Totes Discrimination in Tariffs Case Dismissed

July 8, 2008

Totes challenged the constitutionality of the disparate tariff rates applied to men’s gloves versus women’s gloves on the grounds that such disparate treatment violated the equal protection clause because it discriminates on the basis of gender and/or age. The government moved to dismiss the action arguing that Totes’ claim involves a non-justiciable political question and that Totes did not have standing to bring this action. In the alternative, the government argued that Totes failed to state a claim upon which relief can be granted.

With regard to the government’s first claim that Totes’ argument is a non-justiciable political question because it involves matters of trade policy, the three-judge panel held that even though the tariff schedule may have originated in the context of international negotiations, it was now codified in statutory law and thus reviewable for its constitutionality. Therefore, Totes’ had properly invoked the court’s traditional role of constitutional review and the government’s request was denied.

On the issue of standing, the court concluded that Totes had both constitutional and prudential standing. According to the court, Totes did suffer some injury-in-fact and its injury was directly connected to the government’s action. Totes paid the higher duties on its imports of men’s gloves and as a direct result suffered an economic loss. Moreover, the court held that because the injury that Totes’ has alleged was within the zone of interests protected by the Constitution’s Equal Protection Clause there was no prudential reason to deny Totes standing to litigate. The court, therefore, denied the government’s request.

Finally, the court addressed the government’s motion to dismiss for failure to state a claim. On this issue, the court concluded that Totes had failed to satisfy the requirements for stating a valid claim set forth in the recent Supreme Court case of Bell Atlantic Corp. v. Twombly.  That is, Totes failed to do more than allege conclusions or formulaic recitations of the elements of a cause of action in its complaint. In order to satisfy Bell Atlantic, according to the court, Totes’ complaint would have to "allege facts sufficient to ‘show’ some purpose or intent to disfavor individuals because of their sex" and that would demonstrate that Totes "is entitled to relief." The court concluded that Totes failed to meet these burdens and therefore dismissed Totes’ complaint, without prejudice, for failure to state a claim.

Since the court dismissed Totes’ complaint without prejudice, Totes is left with two major options. First, it can appeal the decision directly to the Court of Appeals for the Federal Circuit. Or, it has the option of refiling its complaint making sure to address the concerns raised by the decision in its discussion of the Bell Atlantic. case and to allege all of the necessary facts to "show" that Totes is entitled to relief because of the government’s purposeful discrimination.

A copy of the decision may be accessed here.