Lexmark Parent Still Under Slavery Embargo

Despite a board of directors rich with boldfaced Washington names, Lexmark parent Ninestar corporation appears unlikely to break free of its designation as an employer of modern slavery under the Uyghur Forced Labor Protection Act.

The owner of the former typewriter, printer and keyboard division of IBM corporation, filed a lawsuit last August against the U.S. Department of Homeland Security (DHS) and other related parties of the U.S. government before the U.S. Court of International Trade. [10970]

DHS added Ninestar and certain of its subsidiaries to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, and the company "is suffering irreparable harm to its business and reputation based on the listing," according to a statement at the time.

Last week Judge Gary Katzmann denied Ninestar’s Motion for Preliminary Injunction staying the Listing Decision.  

The FLETF’s addition of Ninestar to the Entity List of the UFLPA presumptively prohibits, under section 307, the importation into the United States of any goods produced by Ninestar. The FLETF also provided a procedure for listed entities to request removal.

Without first availing itself of the FLETF’s removal procedure, Ninestar filed this action before the U.S. Court of International Trade (“CIT”) requesting that the court vacate the Listing Decision and lift the embargo because the Listing Decision violated the Administrative Procedure Act (“APAon four counts:

• the FLETF failed to adequately explain its decision;
• the FLETF’s determination is unsupported by substantial evidence;
• the FLETF exceeded its authority by using a burden of proof of reasonable cause rather than preponderance of the evidence; and
• the FLETF’s determination amounted to an impermissibly retroactive application of the UFLPA.

Ninestar’s Motion for Preliminary Injunction—the first of its kind since the UFLPA was signed in 2021—requesting the court to (1) stay the FLETF’s decision to add Ninestar to the Entity List and (2) prevent the Government from taking any action predicated on the Listing Decision against the importation of Ninestar’s goods.

The court first exercises its discretion to determine that the administrative exhaustion requirement is not appropriate in this case due to the conclusory nature of the FLETF’s initial Listing Decision. Turning next to Ninestar’s Motion for Preliminary Injunction, the court concludes that Ninestar (1) is not likely to succeed on Counts One, Three, and Four of the Amended Complaint, (2) has failed to establish irreparable harm, and (3) does not prevail in the balancing of equities and public interest.

The Motion for Preliminary Injunction is therefore denied. The embargo is still in force, meaning that Ninestar’s merchandise continues to be prohibited from entering the United States.