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Judge Holds Firm in Safeguard Case

A Court of International Trade judge denied a government motion for a stay of a preliminary injunction barring it from acting on China safeguard cases.

WASHINGTON — A judge on Monday refused a U.S. Justice Department request to delay a preliminary injunction that bars the government from accepting or reviewing China safeguard petitions.

Senior Judge Richard W. Goldberg of the U.S. Court of International Trade issued a one-sentence order three days after the Justice Department filed a motion for a stay. The federal agency argued in its motion filed Friday for a limited stay, at a minimum. That would have left intact the CIT’s preliminary injunction against imposing threat-based safeguards but would have allowed the government to self-initiate safeguards, consider and analyze pending petitions and hold consultations with China.

Goldberg’s ruling was a procedural victory for the U.S. Association of Importers of Textiles & Apparel, which brought the lawsuit against the government on Dec. 1, and another roadblock for domestic textile and apparel producers concerned that unrestrained imports from China are already flooding the market.

“It is an indication the judge has real confidence in his decision to grant the preliminary injunction,” said Brenda Jacobs, the lead counsel for the USA-ITA.

The USA-ITA sued five federal agencies seeking a permanent injunction, alleging that the government violated its own published regulations and the Administrative Procedures Act when it agreed to accept safeguard petitions based on the threat of market disruption as opposed to actual harm.

The government has until Monday to respond to the USA-ITA’s opposition to the government’s motion to dismiss the case. The Justice Department has also said it plans to file an appeal of the preliminary injunction with the Federal Circuit Court of Appeals.

Goldberg’s rulings have thrown into question the timing of potential China safeguards, which are essentially temporary quotas. A coalition of domestic textile and apparel groups, and the union UNITE HERE that filed 12 China safeguard petitions in an effort to curb the flow of Chinese imports could be forced to file new safeguard petitions, this time based on actual market disruption, if the CIT case or appeals process drags on.

“The judge is taking the [safeguard] process out of play by the extent of his actions,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “This is indicative of the U.S. government’s inability to provide effective safeguard remedies. If it’s not a 17-month delay in producing [safeguard] regulations, it’s a set of rules that take 120 days to adjudicate, and now there is an extra layer of complexity because a judge is putting everything on ice.”

This story first appeared in the February 1, 2005 issue of WWD.  Subscribe Today.