UNITED STATES COURT OF INTERNATIONAL TRADE

Slip Op. 25-57

Before the Court in Solar Energy Indus. Ass’n v. United States, Court No. 20-03941, Slip Op. 25-57 (May 8, 2025) was a review of the parties’ obligations per a mandate from the U.S. Court of Appeals for the Federal Circuit instructing the entry of judgment in favor of the Defendants. The case concerned the Federal Circuit’s upholding of the validity of Presidential Proclamation 10101, which removed certain exclusions from safeguard duties on solar panel imports. As a result, the trial court was directed to enter judgment accordingly. However, the  appellate court’s disposition also necessitated further proceedings because during the course of the litigation, first before this court and then before the Federal Circuit on appeal and rehearing, the CIT had issued an injunction against U.S. Customs and Border Protection (CBP) from liquidating entries of solar panels subject to the challenged duties. However, given certain unresolved compliance issues, the court in this case addressed these problems in this opinion.

The dispute concerned the fact that CBP contravened the Suspension Order by unlawfully liquidating entries of solar panels that are subject to the safeguard duties that Proclamation 10101 rendered applicable, and which the Federal Circuit has since decided are validly imposed. Defendants asserted that these liquidations were “inadvertent”. They asked the court to enter judgment directing the United States, through CBP, to reliquidate any inadvertently liquidated subject entries covered by the injunction where liquidation was not consistent with the Proclamation. Plaintiffs opposed this request.

The CIT reviewed this case pursuant to its jurisdiction under 28 U.S.C. § 1581(i). The CIT considered whether to exercise its equitable powers to allow reliquidation of entries that had been liquidated in violation of its Suspension Order and at duty rates lower than those later upheld by the Federal Circuit. After reviewing the parties’ arguments and the case’s circumstances, the court declined to permit reliquidation.

Generally, importers do not pay the final dutiable amount of an import duty at the time the merchandise enters the United States. Instead, the importer deposits the estimated duties and fees payable on such merchandise with CBP. CBP then liquidates the entry at a later date, after determining the final amount of duty to be paid on such merchandise and determining any increased or additional duties, taxes, and fees or any excess of duties, taxes, and fees deposited. CBP then collects any increased or additional duties and fees due, together with interest thereon, or refunds of any excess money deposited, together with any interest as determined per the liquidation or the reliquidation. When an entry is liquidated, it becomes final and conclusive on all parties, unless a protest is filed or a civil action contesting the denial of a protest, in whole or in part, is commenced in the CIT. The CIT may suspend liquidation of an entry pending judicial review that may affect the final applicable duty rate. Usually, the court will do so by enjoining CBP’s liquidation of the entry in question. This means that an entry that has been liquidated generally cannot be reliquidated, even upon a later judicial determination that the liquidated rate was inaccurate of inconsistent with law. Here, the subject of the parties’ dispute was the government’s request to reliquidate 174 relevant entries that CBP liquidated in violation of the Suspension Order, which covered the period August 5, 2022 to October 25, 2024, at a rate that was inconsistent with the Presidential Proclamation.

The government argued that CBP is allowed to reliquidate unlawfully-liquidated entries without a court order authorizing that action. Additionally, it argued that even if reliquidation requires a court order, the circumstances of this case warrant that order’s issuance. However, the court disagreed. It upheld that reliquidation after ninety days requires a court order. In this case, more than eight hundred days elapsed between the first unlawful liquidation of the relevant entries. This meant that the statutory deadline for CBP to unilaterally reverse the unlawful liquidation of the entries had long since passed. Thus, the government failed to rectify the situation on time even after CBP’s discovery that it had unlawfully liquidated entries in violation of the court’s injunction against doing so. Furthermore, the court ruled that the defendants did not demonstrate entitlement to equitable relief. On this point, the court said that the government failed to show that it made diligent efforts to comply with the Suspension Order. Additionally, the court found that the government failed to persuasively explain how the relevant entries were unlawfully liquidated. The court noted that the government said, in general terms, that oversight caused the erroneous liquidations and such errors made the entries “inadvertently liquidated”. As a result, the court decided not to grant equitable relief. Instead, the court agreed with plaintiffs that the government did not show any proactive measures to avoid recurring violations of the Suspension Order. In fact, the government discovered that some unlawful liquidations were occurring, as confirmed by a notice from 2022. Rather than use this notice to flag the issue and anticipate reversing further violations of the Suspension Order, the government took no action. The Court noted that CBP bears the burden of strict compliance with all statutory and judicially-imposed requirements related to liquidation.

The court concluded that the government erroneously liquidated entries in violation of a court order and then sought to reliquidate those entries at a higher rate more than ninety days afterwards. Given this noncompliance, the court dissolved the Suspension Order without authorizing the reliquidation of the relevant entries.