[00:00:05] Speaker 03:
Okay, the next case before the court is case number 151775, Best Key Textiles, Code Limited versus the United States.

[00:00:17] Speaker 03:
This is a reprise of an action that was previously here and is back again from the judgment of the Court of International Trade.

[00:00:26] Speaker 03:
Mr. Peterson, you want to reserve three minutes for a rebuttal?

[00:00:30] Speaker 01:
Yes, ma'am.

[00:00:41] Speaker 03:
OK, you may proceed.

[00:00:46] Speaker 02:
Ready, Your Honor?

[00:00:47] Speaker 02:
Yes.

[00:00:48] Speaker 02:
Good morning.

[00:00:49] Speaker 02:
My name is John Peterson, and I represent Beske Textiles Company Limited.

[00:00:54] Speaker 02:
This Administrative Procedure Act challenge to customs revocation of a binding ruling was filed in the United States Court of International Trade.

[00:01:03] Speaker 02:
We were seeking APA review, both of the substance of the revocation and the procedure that it was reached by.

[00:01:10] Speaker 04:
Why would the CIT need to consider transfer question if we held it had exclusive jurisdiction pursuant to 1581A?

[00:01:22] Speaker 02:
Well, because the court doesn't have exclusive jurisdiction.

[00:01:25] Speaker 02:
In fact, you held that they don't have exclusive jurisdiction over this case.

[00:01:30] Speaker 02:
Now, a 1581A case,

[00:01:33] Speaker 02:
will never give Beske the relief that it's entitled to under the Administrative Procedure Act.

[00:01:40] Speaker 02:
A 1581A case is an action brought by an importer, who in this case would not be our client, it would be their customer, to challenge the assessment of duty.

[00:01:50] Speaker 02:
It's a challenge to a different decision on a different standard of review, a different record of review, a different relief.

[00:01:59] Speaker 02:
All you can get back in an A case is money refunds

[00:02:03] Speaker 02:
The decision has no race judicata effect.

[00:02:07] Speaker 02:
So in effect, if you say you can review this action under 1581A, the answer is you can't.

[00:02:14] Speaker 02:
And in fact, the Supreme Court spoke to this years ago.

[00:02:18] Speaker 04:
Run that by me again?

[00:02:21] Speaker 02:
By whom do you mean you?

[00:02:23] Speaker 02:
I'm sorry.

[00:02:24] Speaker 02:
The Court of International Trade in the 1581A case will make a decision about the particular assessment in front of it.

[00:02:32] Speaker 02:
It will never make a determination about whether the ruling or the revocation of the ruling was arbitrary, capricious, or legally correct.

[00:02:39] Speaker 03:
But that's what we said in the first case.

[00:02:41] Speaker 03:
We said you don't have the right to make those alternative arguments.

[00:02:45] Speaker 02:
Well, that's a very interesting point, because if that's what the Court is saying, and I don't believe you said that in the first case, what you are saying is that the revocation of a customs ruling under Section 625 of the Tariff Act

[00:03:00] Speaker 02:
is not judicially reviewable under the APA.

[00:03:04] Speaker 02:
And by no means does this court's decision last year go that far.

[00:03:09] Speaker 02:
And there were some 190,000 published rulings.

[00:03:12] Speaker 03:
What we said was your sole remedy was under A, right?

[00:03:17] Speaker 02:
You said the sole relief that the Court of International Trade might give in respect to a tariff classification was under A.

[00:03:26] Speaker 02:
you did not address the question of whether another court, a district court, might be able to hear this case.

[00:03:34] Speaker 02:
Now, this is an administrative procedure act case, and district courts certainly hear those.

[00:03:39] Speaker 02:
It involves customs duties, which is about as federal a question as you can get.

[00:03:44] Speaker 02:
And the district courts do have exclusive jurisdiction over federal questions, except as they may be given to other courts.

[00:03:53] Speaker 02:
All that this court held last year

[00:03:56] Speaker 02:
is that this case could not be cabined within the limited subject matter jurisdiction of the Court of International Trade.

[00:04:04] Speaker 02:
I reread the decision this morning.

[00:04:06] Speaker 02:
And all this court talked about was 28 USC 1581, which is the CIT subject matter jurisdiction.

[00:04:14] Speaker 02:
And you ordered the case dismissed by the Court of International Trade telling them, this doesn't fall within your subject matter jurisdiction.

[00:04:22] Speaker 02:
Now, the question on appeal here

[00:04:24] Speaker 04:
Well, what we said was it could if somebody properly filed a 1581A.

[00:04:30] Speaker 02:
Well, if somebody filed a 1581A case.

[00:04:33] Speaker 04:
People are filing 1581A cases for metallic metal, metallicized yarn.

[00:04:40] Speaker 02:
Well, nobody will ever file a 1581A case dealing with the classification of the yarn because the duty rate for metalized yarn is actually higher than the duty rate for non-metalized yarn.

[00:04:52] Speaker 02:
So no one will ever have standing to file that case.

[00:04:55] Speaker 02:
The best one could hope for is that one of our customers who makes garments from the yarn could import some, pay the duty, and then protest the assessment of that duty.

[00:05:06] Speaker 02:
I mean, that gives best key no direct relief.

[00:05:10] Speaker 02:
That does nothing.

[00:05:10] Speaker 04:
Those 1581 cases are being filed, are they not?

[00:05:14] Speaker 04:
Pardon?

[00:05:14] Speaker 04:
Those 1581 cases are being filed.

[00:05:17] Speaker 02:
One has been filed.

[00:05:18] Speaker 02:
However, even if the plaintiff in that case wins it, it's not going to reverse this ruling.

[00:05:24] Speaker 02:
The Supreme Court spoke to that in the Mead case in 2000.

[00:05:28] Speaker 02:
What's the effect of a binding ruling in a 1581A case?

[00:05:33] Speaker 02:
And what the Supreme Court said is, well, it's something you could give non-binding skid more deference to.

[00:05:37] Speaker 02:
But it is not the decision under review.

[00:05:41] Speaker 02:
And even if the plaintiff wins that 1581A case, the ruling stands.

[00:05:47] Speaker 02:
And every procedural defect in the ruling stands.

[00:05:51] Speaker 02:
And more to the point, in a 1581A case, those are not race judicata.

[00:05:57] Speaker 03:
How would your client even have standing to assert a challenge when your client's not importing?

[00:06:05] Speaker 02:
Oh, no.

[00:06:05] Speaker 02:
Well, you don't have to be an importer to get a customs ruling.

[00:06:09] Speaker 02:
Our client is a supplier of a material in importer shoes.

[00:06:12] Speaker 02:
We had standing to get a customs ruling, and one was issued.

[00:06:16] Speaker 02:
Based on that, we were able to commercialize our product to customers.

[00:06:21] Speaker 02:
Now, when customers revoked that ruling, and the record of the prior case reveals this, our clients suffered $200 million in canceled orders.

[00:06:31] Speaker 02:
Now, that is injury infested.

[00:06:33] Speaker 01:
Let me just, I guess, ask maybe just a slight variant on the standing question Judge O'Malley just asked.

[00:06:41] Speaker 01:
You would be sitting pretty, would you not,

[00:06:46] Speaker 01:
The garment classification ruling went the other way and the rate were reduced from was it 32 to 5.6 or something.

[00:06:57] Speaker 01:
And the current revocation ruling for the yarn remained as is.

[00:07:03] Speaker 01:
Lower rates on both scores.

[00:07:04] Speaker 01:
You're not hurt by the lower rate in the yarn ruling all by itself at all.

[00:07:09] Speaker 01:
Your only harm is that your

[00:07:13] Speaker 01:
your customers, the garment people, are not going to buy from you if they have to pay, et cetera.

[00:07:21] Speaker 02:
But my client's harm was never the harm of paying a customs duty.

[00:07:24] Speaker 02:
My client's harm was the inability to commercialize its product.

[00:07:29] Speaker 01:
I guess what I'm confused about is why doesn't all of that point to the idea that the only way you're harmed is through a ruling the garment people

[00:07:41] Speaker 01:
can challenge through 1581A?

[00:07:45] Speaker 02:
Here's the problem.

[00:07:46] Speaker 02:
1581A decisions are not race judicata.

[00:07:50] Speaker 02:
So we could have a client go in with a pair of pants and win.

[00:07:54] Speaker 02:
Government could say, we're not applying that to anything else.

[00:07:57] Speaker 02:
Keep trying.

[00:07:58] Speaker 02:
Keep trying.

[00:07:59] Speaker 02:
Keep trying.

[00:08:00] Speaker 04:
We would never be able to go to our customers and say, if you buy- That's not the norm, and you're well aware of that.

[00:08:06] Speaker 04:
It's not, excuse me?

[00:08:07] Speaker 04:
It's not the norm.

[00:08:10] Speaker 04:
government brings a specific test case if they, or a party brings a test case and the government agrees to it, if they then in the future try to exclude, the government has to articulate a legitimate basis for that.

[00:08:28] Speaker 02:
But there have been cases involving products like tomato sauce where we've seen repeated and repeated challenges.

[00:08:34] Speaker 02:
I mean, so you can't guarantee it.

[00:08:37] Speaker 02:
The other fact is that our client is entitled to have a ruling which binds customs officers.

[00:08:43] Speaker 02:
Section 502 of the Tariff Act says that an issued ruling binds customs officers to follow it.

[00:08:50] Speaker 02:
We had that protection, and then we lost it when the ruling was revoked.

[00:08:55] Speaker 02:
But the point here involves transit.

[00:08:57] Speaker 01:
Can I ask, what was the story between, if I'm

[00:09:00] Speaker 01:
you'll correct me on the dates between August of 2012 and September of 2013.

[00:09:06] Speaker 01:
September 2013 I think was the revocation ruling for the yarn classification.

[00:09:12] Speaker 01:
August of 2012 was the

[00:09:14] Speaker 01:
the ruling by customs on the garment side, which ended up with the higher, the 32%.

[00:09:23] Speaker 02:
Well, it was pretty strange because both rulings came out on the same day.

[00:09:26] Speaker 02:
On one day, the government said, oh, this garment has the best key yarn.

[00:09:30] Speaker 02:
That's metalized yarn.

[00:09:31] Speaker 02:
It gets the lower duty rate.

[00:09:33] Speaker 02:
And on the same day, they issued a decision saying best key yarn is not metalized yarn.

[00:09:39] Speaker 02:
What that meant is when the best key ruling became effective 60 days after that, the garment ruling became ineffective as well.

[00:09:46] Speaker 02:
It became ineffective.

[00:09:48] Speaker 02:
So that's really the problem.

[00:09:50] Speaker 02:
I mean, the problem here, and the government has a memo in the record of first case saying, oh, if we lose this case, the government could lose up to $2 billion a year in duty collections.

[00:10:02] Speaker 02:
They're going to fight hard.

[00:10:03] Speaker 02:
I mean, if we have to fight them piecemeal in eight cases,

[00:10:07] Speaker 02:
We're never going to get anywhere.

[00:10:08] Speaker 02:
But I mean, the point here is that the APA gives us a right to judicial review of the revocation of a ruling quite apart from the right of our individual customers to fight for a customs duty individually on a shipment.

[00:10:22] Speaker 01:
So I don't know as much about how this works as some others here do.

[00:10:27] Speaker 01:
So let me just ask you this and tell me if there's something off about the question.

[00:10:30] Speaker 01:
Suppose you've got the revocation ruling for the yarn classification.

[00:10:34] Speaker 01:
And so at that point, if you imported yarn, you'd have to pay 13%.

[00:10:39] Speaker 01:
Pay a higher duty.

[00:10:41] Speaker 01:
Pay a higher duty.

[00:10:43] Speaker 01:
And that was the only change in current customs practice.

[00:10:48] Speaker 01:
What would happen when your customers, the shirt makers, the garment makers,

[00:10:52] Speaker 01:
import goods.

[00:10:54] Speaker 01:
What are the customs officers going to do at the shipyard?

[00:10:57] Speaker 02:
Well, look, if we have a binding ruling in effect that this is a metalized... As to the yarn, but not as to the goods.

[00:11:01] Speaker 02:
Yeah, if we have a binding ruling in effect that the yarn is a metalized yarn and one of our customers imports a product made from that yarn and is assessed with duty at higher rate, they have, in addition to whatever classification remedy they would have under 1581A, they would also have the additional ground

[00:11:21] Speaker 02:
of saying that this determination is in contravention of the rule.

[00:11:25] Speaker 02:
And under Section 502 of the Tariff Act, the ruling governs, you know, binds the action of the customs officer.

[00:11:33] Speaker 02:
So it would give both us and our clients a great deal more assurance.

[00:11:38] Speaker 01:
Now... But then would that not have to...

[00:11:41] Speaker 01:
be litigated under 1581A unless customs say, ooh, right, change.

[00:11:47] Speaker 02:
There was a case in the court a couple of years ago, international custom products versus United States, where that exactly happened.

[00:11:54] Speaker 02:
Judge Carman in the Court of International Trade ruled in favor of the plaintiff and said, I'm not going to decide what the classification of product is.

[00:12:02] Speaker 02:
I'm just going to decide that you had a ruling.

[00:12:04] Speaker 02:
The ruling was not followed.

[00:12:06] Speaker 02:
And on that basis, the duty assessment against you is improper.

[00:12:10] Speaker 03:
But that's different than a change in the rule.

[00:12:13] Speaker 02:
Yes.

[00:12:13] Speaker 02:
But Your Honor, see, we're not here to re-argue the best key one.

[00:12:17] Speaker 02:
I accept that the court said the CIT lacked subject matter jurisdiction.

[00:12:21] Speaker 02:
The question here is, when the mandate went down to the court, and we asked the court to transfer it to district court, they refused.

[00:12:29] Speaker 02:
They said, we're not going to consider that.

[00:12:30] Speaker 02:
Saying there was a mandate.

[00:12:31] Speaker 02:
Well, this is the thing.

[00:12:33] Speaker 02:
The government says that the court applied the mandate rule, but they didn't apply the mandate rule.

[00:12:38] Speaker 02:
The transfer statute says the court has an obligation to consider transfer.

[00:12:42] Speaker 03:
The court considered it in the alternative set.

[00:12:44] Speaker 03:
Even if I could consider it, I wouldn't transfer.

[00:12:46] Speaker 02:
But the question here was, did this court's decision last year preclude the issue of transfer?

[00:12:53] Speaker 01:
It didn't.

[00:12:53] Speaker 01:
Well, tell me what's wrong with the following way of thinking about it.

[00:12:57] Speaker 01:
In determining whether the mandate rules, the vertical mandate rule applies, we look, we said, at the letter and the spirit.

[00:13:06] Speaker 01:
The letter was dismissed.

[00:13:08] Speaker 01:
Dismiss is inconsistent with transfer.

[00:13:10] Speaker 01:
Then you look at the spirit.

[00:13:11] Speaker 01:
Now, on the one hand, you might say transfer just wasn't presented to us, and so we didn't really talk about it, and maybe it's outside the spirit.

[00:13:19] Speaker 01:
But on the other hand, a large part of the spirit of the ruling is there is an exclusive way

[00:13:26] Speaker 01:
to get the dispute resolved.

[00:13:29] Speaker 01:
And it's through 1581A.

[00:13:31] Speaker 01:
And where 1581A applies, it is by its terms exclusive.

[00:13:36] Speaker 01:
So why isn't giving the letter of the ruling dismiss its plain meaning, in fact, supported by the spirit?

[00:13:44] Speaker 02:
As I said, Your Honor, 1581A does not solve this dispute.

[00:13:49] Speaker 02:
If we're going to apply the mandated rule, you have to make a contextual examination of what this court did last year.

[00:13:54] Speaker 02:
And the CIT refused.

[00:13:56] Speaker 04:
If this court had said... You knew last year what the court did when you got the ruling.

[00:14:01] Speaker 04:
If you thought that it didn't mean what you wanted, why didn't you request a rehearing of the panel?

[00:14:12] Speaker 02:
We didn't request a rehearing.

[00:14:13] Speaker 02:
We have filed a provisional request, a prison of motion to recall the mandate there.

[00:14:18] Speaker 02:
if this court feels that it needed to be the one to consider transfer.

[00:14:22] Speaker 01:
Did you file a rehearing petition under the usual rehearing rule within 14 days?

[00:14:26] Speaker 02:
No, because I did not want the court to rehear the question of jurisdiction.

[00:14:30] Speaker 02:
I accept them saying the CIT doesn't have jurisdiction.

[00:14:33] Speaker 03:
Did you ask for clarification before the mandate issues?

[00:14:37] Speaker 02:
No, but we're not required to.

[00:14:39] Speaker 02:
We can ask the lower court to transfer.

[00:14:41] Speaker 02:
See, if this court had dismissed saying there's a failure to state a claim,

[00:14:46] Speaker 02:
then if you use the mandate rule, the lower court would say, well, I'm not going to transfer this because the question of transfer is precluded.

[00:14:52] Speaker 02:
You don't have a claim.

[00:14:54] Speaker 02:
To transfer would be to encourage form shopping and relitigation, which can't be done.

[00:14:59] Speaker 02:
The only thing that happened here is this court said, CIT, you don't have jurisdiction over this case under your limited grant of jurisdiction, period, the end.

[00:15:09] Speaker 01:
No, but that is not the only thing that happened.

[00:15:12] Speaker 01:
The last line or sentence or something was,

[00:15:15] Speaker 01:
remand with an order to dismiss.

[00:15:19] Speaker 02:
That's right.

[00:15:19] Speaker 02:
But that does not preclude the lower court when it's dismissed for lack of jurisdiction from considering the question of transfer.

[00:15:28] Speaker 02:
Transfer only becomes material when the court is told or concludes it lacks subject matter jurisdiction.

[00:15:34] Speaker 03:
You've used all your rebuttal time.

[00:15:35] Speaker 03:
We'll give you two minutes for rebuttal.

[00:15:37] Speaker 02:
Thank you, Your Honor.

[00:15:44] Speaker 00:
Good morning, Your Honors.

[00:15:46] Speaker 00:
Beverly Farrell from the United States.

[00:15:48] Speaker 00:
Your Honors, as you've been discussing with Bess Key, the problem here is that it was dismissed for a lack of jurisdiction.

[00:15:56] Speaker 00:
In reading this Court's opinion, when one looks at that jurisdiction, what jurisdiction are we really talking about here?

[00:16:02] Speaker 00:
We're actually, it's subject matter jurisdiction, but we're really talking about the CIT would have had

[00:16:07] Speaker 00:
jurisdiction, had there been a harm.

[00:16:09] Speaker 00:
So you see, really, the jurisdiction spins on it.

[00:16:12] Speaker 00:
Had there been a harm to Best Key in the yarn ruling?

[00:16:15] Speaker 04:
Well, a jurisdiction could have been alleged.

[00:16:18] Speaker 00:
Yes, Your Honor.

[00:16:19] Speaker 00:
And this goes back to, this case is about a yarn ruling.

[00:16:24] Speaker 00:
There's absolutely no harm when you reduce the tariff rate.

[00:16:28] Speaker 00:
If I'm importing into the United States and I get a lower rate, I'm not harmed.

[00:16:31] Speaker 00:
So when Best Key came to the CIT,

[00:16:35] Speaker 00:
There was no jurisdiction because it hadn't been harmed.

[00:16:37] Speaker 00:
In other words, there was no Article III jurisdiction.

[00:16:40] Speaker 00:
There was no case or controversy.

[00:16:43] Speaker 00:
So when this court says to the CIT, oh, you dismissed because there's no subject matter jurisdiction, it's because really there's no Article III jurisdiction.

[00:16:51] Speaker 00:
And if there's no Article III jurisdiction, that's for every federal court in the United States, not just the CIT.

[00:16:57] Speaker 00:
But this court recognized that this is a subject matter had there been harm that would have been exclusively the domain.

[00:17:04] Speaker 00:
of the CIT, but there wasn't harm.

[00:17:07] Speaker 00:
So how could you transfer this to the District of Columbia?

[00:17:10] Speaker 00:
You can't.

[00:17:11] Speaker 00:
There's no Article III standing.

[00:17:13] Speaker 00:
So inherent in this court's opinion, when it says, oh, there is, see, the true nature of Best Key's case isn't that it's upset about a reduction in the yarn's duty because it wasn't going to import it anyway.

[00:17:26] Speaker 00:
That was a pretext.

[00:17:27] Speaker 00:
That was a pretext because we're going to try to piggyback on a decision from customs

[00:17:32] Speaker 00:
This case has always been about the garments.

[00:17:35] Speaker 00:
And this court said that specifically.

[00:17:36] Speaker 00:
It said, you know, this is really easy.

[00:17:38] Speaker 00:
Just bring a 1581A action.

[00:17:41] Speaker 00:
Because if your harm is occurring overseas, because overseas manufacturers who make things out of your yarn won't get a good duty rate in the United States, well, until you get into the United States and get the bad duty rate, then you bring a 1581A action.

[00:17:59] Speaker 00:
This is the sum and substance of the harm that Best Key is really trying to argue about.

[00:18:05] Speaker 00:
So there is no standing for Best Key in any court in the United States of America, because it doesn't have Article III standing.

[00:18:13] Speaker 00:
That's where the lack of subject matter jurisdiction is.

[00:18:15] Speaker 00:
And I think, Your Honors, as this morning, as you're discussing this case, that is where this is driving.

[00:18:22] Speaker 00:
But even if it's not an argument, even if it's a subject.

[00:18:26] Speaker 01:
But can I just ask, can you point

[00:18:28] Speaker 01:
me toward, in the earlier ruling, our 2015 ruling, to what passages say there's no Article III jurisdiction here, because there's no case of controversy.

[00:18:40] Speaker 00:
Your Honor, I don't believe this Court ever articulated it that way.

[00:18:43] Speaker 01:
No.

[00:18:44] Speaker 00:
But what it did articulate was that you had no harm, that Best Keys harm.

[00:18:50] Speaker 00:
See, this case, Best Keys case is limited by the issuance

[00:18:54] Speaker 00:
of a pre-importation norm ruling, which was subsequently revoked.

[00:18:59] Speaker 01:
Right, but I guess I'm pausing on the proposition that if you put the statutes, 1581, out of the picture, the idea that there would be no

[00:19:14] Speaker 01:
Injury in fact traceable to the ruling that there would be, I guess I would pause before I would conclude that there is no article three case of controversy over that.

[00:19:30] Speaker 01:
If they come in and say, I just lost $200 million in orders because of this.

[00:19:37] Speaker 01:
As opposed to that's something that they can get relief for somewhere else or

[00:19:41] Speaker 01:
Somebody can get relief for somewhere else.

[00:19:44] Speaker 01:
But Article 3?

[00:19:45] Speaker 00:
Yes, Your Honor, because when they complain that they've lost, allegedly, because these were contemplative, according to your opinion, before, these orders were alleged.

[00:19:57] Speaker 00:
They were contemplative orders.

[00:19:59] Speaker 00:
But not that they'd actually, there was never a contract put before the court saying, yes, we actually have an order that was revoked.

[00:20:05] Speaker 00:
There's nothing in the factual record that ever indicated that there was a signed, sealed, and delivered contract.

[00:20:11] Speaker 00:
In fact, when Best Key seeks a yarn ruling, gets it, and then subsequently follows with a garment ruling request on the Johnny Collar, when it does that, it suggests that if there are any contracts, that they're contingent that the garment is going to be classified in the lower tariff rate, not as a polyester garment, which will come in at 32%.

[00:20:33] Speaker 00:
So those contracts, just from the context clues, again, we don't have anything in the factual record, not in the case before and not in this case, that there were ever any contracts.

[00:20:44] Speaker 00:
There may have been contingent contracts based on that Johnny Collier ruling, but again, it goes right to what this court said.

[00:20:52] Speaker 03:
In fact, we have in the record from the last case, an admission that there was never any intention of importing yarn.

[00:20:59] Speaker 03:
Right?

[00:20:59] Speaker 03:
That's right, Your Honor.

[00:21:00] Speaker 03:
And that there was no definable contract that they could point to.

[00:21:02] Speaker 03:
That's right, Your Honor.

[00:21:04] Speaker 03:
And that actually is in the prior record.

[00:21:06] Speaker 00:
In the prior record, yes.

[00:21:08] Speaker 00:
So there's nothing in there, but that's the point.

[00:21:09] Speaker 00:
There's nothing in the record that there were ever contracts where there were losses.

[00:21:14] Speaker 00:
When BestKey comes to customs first for a protectural yarn ruling, and then wants to bootstrap a garment ruling on top of that, because see, it's economically irrational to come to customs

[00:21:28] Speaker 00:
OK, seeking a yarn rolling and saying, hi, we'd like to pay a higher duty.

[00:21:33] Speaker 00:
So the assumption has to be that, well, maybe it is you have metalized yarn.

[00:21:37] Speaker 00:
Maybe nothing gets done and that you just agree with what the petitioner is seeking because no one would do something economically irrational.

[00:21:44] Speaker 00:
But then the garment rolling comes in and you understand that there is no economic irrationality.

[00:21:49] Speaker 00:
There's a bootstrapping effect that's going to occur here because there was never an intention.

[00:21:54] Speaker 00:
There was never an intention to import yarn into the United States.

[00:21:57] Speaker 00:
It was unfair to ask customs to issue a yarn ruling in the first instance when you knew full well you were never ever any day in your life going to import yarn into this country.

[00:22:08] Speaker 00:
Maybe those, maybe it shouldn't be revoked, maybe they should be void ab initio.

[00:22:12] Speaker 00:
Maybe the yarn ruling which was nothing but a pretext should be void ab initio.

[00:22:17] Speaker 00:
Because really the substance of this case, the heart of this case is the garment.

[00:22:23] Speaker 03:
So when you say- Do you have to have an intention, put aside Article 3 jurisdiction, do you have to have an intention to import to seek a ruling?

[00:22:31] Speaker 00:
Yes.

[00:22:33] Speaker 00:
Because you have to, under CFR 177.1 and .2, when a person is seeking a pre-importation ruling letter, it has to be for a specific transaction.

[00:22:44] Speaker 00:
They have to say, they even tell you what port they're going to be bringing it in.

[00:22:47] Speaker 00:
You have to say what port you intend.

[00:22:49] Speaker 00:
Now, it could happen that you don't do it.

[00:22:51] Speaker 00:
Something could happen.

[00:22:53] Speaker 00:
You know, the world changes and it doesn't come to pass.

[00:22:56] Speaker 00:
But if you're never going to import yarn, which it appears to be the case here, because the record reflects that, that Besky never had an intention to import yarn into the United States.

[00:23:07] Speaker 00:
Besky always had an intention to sell yarn to foreigners who would make garments that would eventually end up in the United States.

[00:23:15] Speaker 00:
That's really what the nub of this case is.

[00:23:18] Speaker 00:
And therefore, the nub of the case is garments.

[00:23:20] Speaker 00:
It's always been garments.

[00:23:21] Speaker 00:
It's not yarn.

[00:23:23] Speaker 00:
So when that yarn ruling comes out, and then it gets revoked, and then the duty drops, you don't have a harm for the thing that you were actually asking for, which was a pre-importation ruling regarding yarn.

[00:23:36] Speaker 00:
All this other stuff is a sideshow.

[00:23:38] Speaker 00:
It's a sideshow that occurs overseas.

[00:23:40] Speaker 00:
It's not cognizable.

[00:23:42] Speaker 00:
This is not cognizable harm.

[00:23:44] Speaker 00:
Contracts, even if there were contracts that then went out of being,

[00:23:49] Speaker 00:
Those are not cognizable harms for pre-importation ruling with respect to yarn.

[00:23:54] Speaker 00:
You should get a pre-importation ruling with respect to a garment, which they did.

[00:23:59] Speaker 00:
And what did they do with that ruling?

[00:24:01] Speaker 00:
Nothing.

[00:24:01] Speaker 00:
And by the way, that ruling was always at 32%.

[00:24:05] Speaker 00:
The Johnny Collar ruling, when it was first issued, said, no, it's not something that would fall in with metalized yarn.

[00:24:15] Speaker 00:
It's a polyester shirt.

[00:24:17] Speaker 00:
That yarn ruling came in that way.

[00:24:20] Speaker 00:
That's how Customs classified it.

[00:24:22] Speaker 00:
In doing so, Customs realized that there was a problem with the yarn ruling, because now it knows that this other one is a little bit contextual.

[00:24:32] Speaker 00:
When they revoke both, they have to correct.

[00:24:34] Speaker 00:
They have to revoke the Johnny Coller so they can correct the entire record.

[00:24:39] Speaker 00:
When the Johnny Coller ruling gets reissued after the revocation, it's the same ruling.

[00:24:47] Speaker 00:
It's the same classification.

[00:24:49] Speaker 00:
It's a polyester shirt of 32%.

[00:24:51] Speaker 00:
So just bring that action, which, of course, as your honors know from our footnote and our brief, it has been brought as Lockhart textile in the CIT.

[00:24:59] Speaker 00:
So someone will hear.

[00:25:00] Speaker 04:
I looked at that, Cain.

[00:25:02] Speaker 04:
I looked at it.

[00:25:04] Speaker 00:
So it's a case that's based on metalized yarn, and it's women's slacks.

[00:25:09] Speaker 00:
That case is now going to be heard by the CIT eventually.

[00:25:13] Speaker 00:
I mean, there may be a jurisdictional kind of scrabble going on there.

[00:25:16] Speaker 00:
Not the type of jurisdictional scrabble that's going on.

[00:25:19] Speaker 01:
Maybe a jurisdictional scrabble.

[00:25:21] Speaker 01:
You've heard tell.

[00:25:22] Speaker 00:
Well, I'll be honest.

[00:25:23] Speaker 00:
There is a jurisdictional scrabble occurring in that case, but not of the sort that occurs here.

[00:25:27] Speaker 00:
But fundamentally, the yarn ruling being protectual, you end up with a revocation leading to no harm.

[00:25:35] Speaker 00:
So there's no harm there.

[00:25:36] Speaker 00:
So there's no Article III standing.

[00:25:38] Speaker 00:
But then the question becomes,

[00:25:40] Speaker 00:
Do contracts overseas have anything to do with the yarn ruling?

[00:25:44] Speaker 00:
Is it possible to argue that a yarn ruling, that yarn being imported into the United States, has anything to do with overseas contracts?

[00:25:54] Speaker 00:
Those contracts could have continued, couldn't they?

[00:25:57] Speaker 00:
Maybe they want to import them into a different country, not the US.

[00:26:00] Speaker 03:
You're getting down a road of a lot of specific factual findings that the CIT has never made.

[00:26:06] Speaker 03:
Right.

[00:26:07] Speaker 03:
Right.

[00:26:08] Speaker 03:
You mean should we remand for the CIT to make these factual findings?

[00:26:11] Speaker 00:
No, Your Honor, because there isn't any jurisdiction.

[00:26:13] Speaker 00:
So with the CIT, this case was remanded for lack of jurisdiction.

[00:26:18] Speaker 00:
So whether it's lack of jurisdiction because fundamentally there's no harm to best key, which would be Article 3 standing, or whether it's because the true nature.

[00:26:27] Speaker 04:
There's a product in your eye which says it can't exist if there's other heads of jurisdiction.

[00:26:33] Speaker 00:
Correct.

[00:26:33] Speaker 00:
Correct.

[00:26:35] Speaker 00:
And again, this court recognized that, indeed, designed the roadmap for best key.

[00:26:40] Speaker 00:
That if really the harm you're complaining about, the nub of that harm is something else, it's the garment.

[00:26:45] Speaker 00:
That's really the issue.

[00:26:46] Speaker 00:
If the garment manufacturers can see that their garments made of this yarn, however that yarn is classified, if their garments are going to come in and they're going to be classified in this heading, then they're going to proceed.

[00:26:58] Speaker 00:
They're smart business people.

[00:27:00] Speaker 00:
They don't want to come in at 32%.

[00:27:01] Speaker 00:
They don't want to come in at 32%.

[00:27:04] Speaker 03:
If we want to consider in the first instance the propriety of transfer, do we have to conclude that there would be no Article III jurisdiction in the district court?

[00:27:13] Speaker 03:
Or is there a broader basis upon which we could say that justice doesn't support the transfer?

[00:27:20] Speaker 00:
Yes, Your Honor.

[00:27:21] Speaker 00:
There's two.

[00:27:23] Speaker 00:
I believe the Article III is more than sufficient.

[00:27:25] Speaker 00:
But there's also what has been articulated in the opinion of this court before in Best Key, which is really the nature of the case that you're bringing, Best Key, is the garment case.

[00:27:37] Speaker 00:
That's what you're really complaining about, that someone doesn't want to bring garments into the US.

[00:27:41] Speaker 00:
You're trying to kind of effectuate somebody else's rights.

[00:27:45] Speaker 00:
Now, could Best Key import a garment and bring this case?

[00:27:49] Speaker 00:
Yes, of course they could.

[00:27:50] Speaker 00:
They could import one garment and bring this case themselves if they so chose.

[00:27:55] Speaker 01:
Not this case?

[00:27:57] Speaker 01:
Not this case.

[00:27:58] Speaker 01:
It would be a challenge to Johnny, whatever.

[00:28:00] Speaker 00:
Right.

[00:28:01] Speaker 00:
Exactly.

[00:28:02] Speaker 00:
It's a challenge to the Johnny collar case.

[00:28:03] Speaker 00:
I mean, that's been sitting out there for years.

[00:28:06] Speaker 00:
That was a plumb if one wanted to bring a case to really hear the 1581A and the Gorman proper classification.

[00:28:14] Speaker 00:
But what you have here is there are times when something won't be heard.

[00:28:19] Speaker 00:
And this is that type of a case.

[00:28:20] Speaker 00:
The yarn revocation ruling,

[00:28:22] Speaker 00:
You got your proper 1625C.

[00:28:25] Speaker 00:
You had your notice in common.

[00:28:27] Speaker 00:
That was proper.

[00:28:28] Speaker 00:
So we didn't have an improper process that was designed when there's going to be a revocation of a ruling that you receive.

[00:28:34] Speaker 00:
So customs went through the proper process.

[00:28:37] Speaker 00:
So now the outcome is, hey, you benefited from it, even if the process was slightly imperfect, which there's nothing in the record that it was.

[00:28:45] Speaker 00:
But even if there were, OK, you benefited.

[00:28:49] Speaker 00:
So you have no harm.

[00:28:50] Speaker 00:
See, that's the problem for BestKey.

[00:28:52] Speaker 00:
And again, it goes back to 1581A.

[00:28:54] Speaker 00:
So, Your Honor, you ask, is there another way we can come at this that we don't need to transfer?

[00:28:59] Speaker 00:
Well, yes, because fundamentally, the nature of this case is a 1581A action on a garment.

[00:29:04] Speaker 00:
That is the true fundamental nature, because no one's importing Besquis yarn into the United States.

[00:29:10] Speaker 00:
And this case was predicated on the revocation of the yarn ruling, which is a very narrow area.

[00:29:16] Speaker 00:
And that narrow area rendered no harm to Besky.

[00:29:20] Speaker 00:
In fact, it was a benefit to Besky when it reduced the rate of duty on the arm.

[00:29:26] Speaker 00:
The other thing, Your Honor, is with respect to the mandate, when this court remanded with instructions to dismiss for lack of jurisdiction, it was this court that found a lack of jurisdiction.

[00:29:44] Speaker 00:
Therefore, it's only this court

[00:29:46] Speaker 00:
that could actually say that transfer is required or should be considered.

[00:29:52] Speaker 00:
The trial court can't do it.

[00:29:53] Speaker 00:
The trial court's hands are tied because it was not the court under 1631.

[00:29:57] Speaker 00:
If you read 1631, the plain language is the court that concludes that there's no jurisdiction shall consider whether or not to transfer.

[00:30:07] Speaker 00:
The trial court here couldn't have been the court that decided there was no jurisdiction.

[00:30:11] Speaker 00:
It was on the receiving end of this court's determination of no jurisdiction.

[00:30:16] Speaker 00:
So this court could have said in its ruling, oh, and by the way, trial court, why don't you consider whether or not this case ought to be transferred?

[00:30:24] Speaker 00:
And this court also notes, because we had a motion to recall the mandate, this court recognizes, well, if the one thing that's been consistent from the government in this case is that there's no jurisdiction.

[00:30:34] Speaker 00:
That has been our song from the beginning.

[00:30:37] Speaker 00:
There's never been jurisdiction.

[00:30:38] Speaker 00:
We got it right the first time, and then the trial court, on a reconsideration, found jurisdiction, kind of an assumption of jurisdiction.

[00:30:46] Speaker 00:
But that lack of jurisdiction, this court has that ability to transfer.

[00:30:53] Speaker 00:
So you can't ask the trial court to do it.

[00:30:56] Speaker 00:
The proper methodology here should have been, knowing full well the government has been ding-donging the issue of jurisdiction, that as soon as this court's decision came out, the first paragraph told you what the outcome was.

[00:31:07] Speaker 00:
It's going to get dismissed for lack of jurisdiction.

[00:31:09] Speaker 00:
Well, then I should ask for a transfer.

[00:31:11] Speaker 00:
I did it when I was in the trial court.

[00:31:13] Speaker 00:
I asked for a transfer in the trial court.

[00:31:15] Speaker 00:
There were multiple times, at oral argument, in the reply brief, in a motion for reconsideration, before this court ever gets to issuing its mandate.

[00:31:25] Speaker 00:
Got it.

[00:31:26] Speaker 00:
Thank you, Your Honors.

[00:31:33] Speaker 04:
Talk fast if you want to catch up, Mr. Peters.

[00:31:38] Speaker 02:
Your Honor, thank you for giving me two minutes.

[00:31:40] Speaker 02:
I'm going to use them to make two points.

[00:31:43] Speaker 02:
First, we have Article III standing.

[00:31:45] Speaker 02:
We have injury in fact.

[00:31:47] Speaker 02:
We lost over $200 million in business out of the shoot.

[00:31:51] Speaker 02:
Now that is exactly the kind of standing that a district court would accept under the APA.

[00:31:56] Speaker 02:
Let's suppose that my client made a chemical component that was used in a pesticide.

[00:32:01] Speaker 01:
Can I ask this?

[00:32:01] Speaker 01:
Under the APA, if I'm remembering some older Supreme Court law, APA

[00:32:10] Speaker 01:
imposes a higher than injury in fact requirement.

[00:32:14] Speaker 01:
There's this whole zone of interest requirement, which has had different names, but it basically says is this statute one that is supposed to protect you even if you have injury in fact.

[00:32:30] Speaker 01:
So why would that not be a, that is to say, translate everything that we said in the last opinion into, and all this discussion here says,

[00:32:38] Speaker 01:
Your harm is only indirect.

[00:32:40] Speaker 01:
It comes from garment rulings.

[00:32:42] Speaker 01:
That belongs to somebody else.

[00:32:44] Speaker 02:
Extensively litigated below, Your Honor.

[00:32:47] Speaker 02:
The zone of interest test applies when you're not the person who was the recipient to the administrative action, but you are affected by it.

[00:32:54] Speaker 02:
We are the person

[00:32:55] Speaker 01:
You're benefited by the ruling yourself.

[00:33:00] Speaker 02:
I did not.

[00:33:01] Speaker 02:
I mean, let's suppose that I was, to go back to the example I was going through before, suppose I made a chemical component which the EPA said is approved for use in pesticides.

[00:33:10] Speaker 02:
And then the EPA says, it's no longer approved for use in pesticides.

[00:33:15] Speaker 02:
Now, would the government say, oh, Mr. Component Maker, you can't bring a case against the EPA.

[00:33:21] Speaker 02:
You don't have any standing.

[00:33:22] Speaker 02:
You don't have any injury.

[00:33:23] Speaker 02:
Only the guys who have the pesticides would have the injury.

[00:33:27] Speaker 02:
And the courts have never agreed with that.

[00:33:29] Speaker 02:
That component maker would have standing.

[00:33:31] Speaker 02:
That's a false analogy.

[00:33:32] Speaker 04:
Huh?

[00:33:32] Speaker 04:
That's a false analogy.

[00:33:34] Speaker 02:
No, it's not because what we're looking for is declaratory relief, which we get under the APA, not money relief, which the CIT gets.

[00:33:44] Speaker 02:
But here's the second point.

[00:33:45] Speaker 02:
This is really important.

[00:33:47] Speaker 02:
Suppose the duty rate in this ruling had been a higher rate.

[00:33:51] Speaker 02:
Miss Farrell would have been here arguing the same thing.

[00:33:54] Speaker 02:
She would have said, oh, you can't bring a case to challenge the ruling.

[00:33:58] Speaker 02:
All you could do is bring cases when you pay the higher duty and try to get your money back.

[00:34:03] Speaker 02:
Bring a 1581A case.

[00:34:05] Speaker 02:
So whether the duty rate went higher or lower is really not material to what the government's saying.

[00:34:10] Speaker 02:
What the government is saying is this.

[00:34:13] Speaker 02:
They're saying a customs ruling revocation is not judicially reviewable under the APA on its own merits.

[00:34:21] Speaker 02:
Now, if that's the case, they're going to write Section 502 of the Tariff Act right out of the act.

[00:34:28] Speaker 02:
Rulings are no longer binding.

[00:34:29] Speaker 02:
They mean nothing.

[00:34:31] Speaker 02:
We can derogate from them.

[00:34:32] Speaker 02:
They're going to write Section 625C out of the act.

[00:34:35] Speaker 02:
That's where this case comes from.

[00:34:37] Speaker 02:
20 years ago, Congress said, before you get rid of a customs ruling, you need notice, comment, publication.

[00:34:44] Speaker 02:
So if there's no standing, if there's no justiciability for the

[00:34:51] Speaker 02:
issuance or the revocation of a customs ruling, if I can never enforce section 502 and I can never enforce section 625, then you have just announced a range of nonreviewable administrative actions of which there are 190,000 out there right now.

[00:35:09] Speaker 02:
I think if this case is transferred to the district court, they'll have to make original determinations about plausibility.

[00:35:17] Speaker 02:
They'll have to make original determinations about whether we have injury in fact.

[00:35:22] Speaker 02:
That's what this court should do.

[00:35:23] Speaker 02:
I don't know what the district court will do, but I do know that this court probably doesn't want to hold that a whole range of customs law jurisprudence is not judicially revealable.

[00:35:36] Speaker 02:
So take that back into chambers with you.

[00:35:39] Speaker 04:
You're way past your time, Mr. Pearson, but I want to finish my sentence from when you interrupted me.

[00:35:45] Speaker 02:
I apologize, Your Honor.

[00:35:47] Speaker 04:
Well, you should apologize, Mr. Pearson, but you do interrupt.

[00:35:51] Speaker 04:
I was at the point of saying that's a false analogy if you and you said the transcript will show no it isn't and then took off and so I'm going to finish that sentence and that is if you want to make a correct analogy you would say that the EPA approved a chemical for pesticides and then rather than revoking it said oh and by the way it's also good for medical treatments.

[00:36:18] Speaker 04:
And I finished my sentence, and you don't have any time to respond.

[00:36:22] Speaker 04:
Thank you, Your Honor.

[00:36:24] Speaker 04:
All right.

[00:36:26] Speaker 02:
Apologies again.

[00:36:29] Speaker 03:
Case will be submitted.

[00:36:30] Speaker 03:
We'll move on.