Federal Circuit Upholds CIT Decision in Totes-Isotoner v. U.S. Case

February 9, 2010

In Totes-Isotoner Corp. v. United States, Appeal No. 2009-1113 (Fed. Cir. February 5, 2010), the Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed the decision of the Court of International Trade (“CIT”).    Totes-Isotoner challenged the constitutionality on equal protection grounds of the different tariff rates imposed on “men’s gloves” and gloves “for other persons” under the U.S. tariff schedule (“HTSUS”). 

After concluding that the CIT properly entertained Totes-Isotoner’s suit, the Federal Circuit turned to the merits of the claims.  According to the Court, in order to establish a violation of the equal protection clause in the tariff context the plaintiff has to demonstrate an intent to discriminate on the part of the government.   The Court reasoned that not only are tariff rates based on particular products that are affected by different economic conditions, but Congress also has broad authority when enacting revenue- raising tax legislation.  In light of this, the Court held that the tariff differential at issue is not facially discriminatory. When there is no facial discrimination, a plaintiff needs to demonstrate discriminatory intent.   Since Totes-Isotoner failed to plead any evidence of discriminatory intent, the Federal Circuit affirmed the dismissal for failure to state a claim.

There was also a concurring opinion. According to the concurrence, equal protection cases prohibit discrimination against people, not products.   Totes-Isotoner’s argument was based entirely on what it believed was a facially discriminatory tariff—Totes-Isotoner did not make a disparate impact argument that the cost of the higher tariff rate was passed on to consumers, presumably men.  Since such a demonstration was absent, the concurrence concluded that the case should be dismissed.