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Update on Challenge to Cotton Fee Assessment

March 22, 2004

The legality of cotton fees assessed by U.S. Customs and Border Protection (“CBP”), on importations of cotton apparel, cotton fabric, and raw cotton is being challenged in the Court of International Trade (“CIT”). Should this litigation ultimately be favorable, past and future payments of the cotton fees may be recovered by importers.

The assessed fee is based upon the type of fabric or garment, the net weight of the cotton, and its HTS classification. Cotton fees are used to fund the activities of the Cotton Board in advertising, promotion, and research and development on behalf of the U.S. cotton industry.

Prior court decisions have held that other research and promotion programs involving pork, beef, and mushrooms, are unconstitutional.

Recent Decision by USDA to Continue the Cotton Fee

The USDA’s Agricultural Marking Service (AMS) has recently issued a notice that it has reviewed the Cotton Research And Promotion Order (“Cotton Order”), on which the assessment of the cotton fee is based, concluding that the Cotton Order should be continued without any modification. AMS has indicated that 12,000 importers, 21,000 producers, and 300 first handlers are included within the Cotton Order.

Requirement to File an Action in the CIT to Potentially Recover Cotton Fees

To preserve the right of an importer to recover the refunds of cotton fees paid on entries, an action must be filed in the CIT in the event that the litigation on this issue is eventually successful. This action will provide the importer the right to obtain the refunds of the cotton fees paid on all shipments for the prior two-year period, and also includes a claim that the cotton fee is invalid from the date of its inception.

For further information, please contact Stephen S. Spraitzar at (415) 288-0427 or via email at, or George R. Tuttle at (415) 288-0425 or via email at

Stephen Spraitzar and George Tuttle are attorneys with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

Copyright 2005 by Tuttle Law Offices.

All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.


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