Wednesday, March 10, 2021

ITC Revisits Issue of Thread Count of Bed Sheets

On March 24, 2017, the United States International Trade Commission published in the Federal Register (82 FR 1506), notice the Commission has issued a general exclusion order barring entry of certain woven textile fabrics and products containing same.

The Commission instituted this investigation on December 18, 2015, based on complaint filed by AAVN, Inc. of Richardson, Texas ("AAVN"). The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain woven textile fabrics and products containing same, by reason of false advertising.

AAVN accused Pradip of false advertising, specifically alleging that Pradip misrepresented the thread count of sheets manufactured in India, imported into the United Sates, and sold in United States department stores.

The Commission determined that the appropriate remedy in this investigation was a general exclusion order prohibiting the entry of certain woven textile fabrics and products containing same that are falsely advertised through a misrepresentation of thread count.

On March 10, 2021, the United States International Trade Commission published in the Federal Register (85 FR 13731) Certain Woven Textile Fabrics and Products Containing Same; Commission Decision Instituting a Rescission Proceeding and Granting a Petition for Rescission of a General Exclusion Order and Seizure and Forfeiture Orders; Termination of Rescission Proceeding.

On February 3, 2021, AAVN filed a petition to rescind the GEO and SFOs. AAVN contends that it disagrees with the testing protocol used by Customs and Border Protection to determine whether imported articles falsely advertise their thread counts. In particular, AAVN contends that the methodology is too strict as compared to alleged testing conducted by independent testing laboratories. AAVN further contends that the "exclusion of goods, including from AAVN's licensees and customers, even after qualified independent testing labs have confirmed the accuracy of those authorized products' thread counts, harms AAVN's business and its standing with reputable importers." AAVN recognizes that the GEO was originally issued to redress substantial injury to AAVN, but states that "AAVN is ultimately in the best position to evaluate injury to itself," and that rescission of the Commission remedial orders (the GEO and the SFOs issued pursuant to it) "would be less injurious to [AAVN] than continued enforcement of the GEO."

Having reviewed the petition, the opposition thereto, and the record of the investigation, the Commission determined that the petition complies with Commission Rule 210.76, 19 CFR 210.76. The Commission has determined to institute a rescission proceeding and to grant the petition. AAVN's petition alleges that the exclusion of articles pursuant to the GEO exacerbates rather than redresses any injury it faces from imports. Thus, the conditions that led to the issuance of the GEO no longer exist, and the Commission has determined to rescind the GEO. Because an SFO requires a predicate exclusion order, there is no basis to continue enforcement of SFOs after rescission of the underlying GEO. Accordingly, all SFOs in this investigation are likewise rescinded. The rescissions are effective as of the date of the Order issued herewith.

The rescission proceeding is terminated. The GEO and all SFOs are rescinded.

The Commission vote for this determination took place on March 4, 2021.

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