PATRICK A. FITCH
INTRODUCTION
In 2009, the United States Court of Appeals for the Federal Circuit
frequently exercised its exclusive statutory jurisdiction under
28 U.S.C. § 1295(a)(5) to hear appeals from the U.S. Court of
International Trade.1 With this broad authority to hear the full
panoply of cases involving the complex and organic regime of U.S.
trade laws and regulations, the Federal Circuit each year must rule on
complex and diverse questions of law. The Federal Circuit issued
nineteen international trade-related precedential opinions in the
2009 calendar year, spanning issues as varied as tariff classification,
drawback requests, antidumping duty proceedings and the
constitutionality of the now-repealed Byrd Amendment.
This Article reviews the Federal Circuit’s 2009 decisions dealing
with international trade-related matters. While some decisions
turned on extremely fact-specific issues—often relevant only to that
action’s litigants—others will undoubtedly alter agency practice for
the foreseeable future at U.S. Customs and Border Protection
(Customs), the U.S. Department of Commerce (Commerce) and the
U.S. International Trade Commission (ITC). This Article separates
the 2009 international trade decisions of the Federal Circuit into two
main areas: (1) customs law and (2) trade remedies at Commerce
and the ITC.
I. U.S. CUSTOMS LAWS
Customs cases once again represented a significant portion of the
Federal Circuit’s 2009 international trade decisions. More than half
of the Federal Circuit’s eleven 2009 Customs decisions concerned
tariff classification.2 Others concerned drawback requests and
requests for refunds of fees incurred by importers in the ordinary
course of business.3 One case concerned the ability of brokers to seek
judicial review of license revocations caused by their failure to file
reports concerning their brokering activities.4 The Federal Circuit
generally expresses deference to the decisions of Customs, but has
not shown any reluctance to intervene on behalf of private litigants
when circumstances warrant.
A. Tariff Classification
In 2009, the Federal Circuit decided five tariff classification cases.
These cases involved disagreements between importers or
manufacturers and Customs about where certain products fall within
the voluminous Harmonized Tariff Schedule of the United States
(HTSUS), a system of ten-digit codes that purports to cover the full
panoply of products imported into the United States. These ten-digit
codes are significant to importers, as they determine the duty rate
attached to a product and whether its country of origin entitles it to
preferential treatment.5
The Federal Circuit ruled on the classification of Canadian cut
lumber in Millenium Lumber Distribution Ltd. v. United States.6
Millenium appealed the Court of International Trade’s grant of
summary judgment in favor of the government that Customs
correctly classified Millenium’s lumber under HTSUS heading 4407,
which covers “[w]ood sawn or chipped lengthwise, sliced or peeled,
whether or not planed, sanded or finger-jointed, of a thickness
exceeding 6 mm.”7
Millenium argued that 215 entries of its cut lumber, including twoby-
three, two-by-four and two-by-six lumber, cut to various lengths
ranging from five to twenty feet and entered between October 1999
and January 2001, should be classified either under HTSUS
subheading 4418.90.40 as “[b]uilders’ joinery and carpentry of wood”
or under HTSUS heading 4421 as “[o]ther articles of wood.”8 After
Customs notified Millenium in December 2000 that it liquidated the
merchandise under HTSUS heading 4407, Millenium filed two timely
protests.9
On appeal, the Federal Circuit affirmed. The court found as a
threshold matter that determining the meaning of tariff provisions is
a question of law, while determining whether specific imports fall
within certain tariff provisions is a question of fact.10 Citing the
Explanatory Note to HTSUS heading 4407, which specifies that
heading 4407 covers all wood and timber thicker than 6 mm “[w]ith a
few exceptions,” the Federal Circuit upheld Customs’ classification of
Millenium’s lumber under HTSUS heading 4407.11 The court
rejected classification under HTSUS heading 4418, because
Millenium’s lumber had not undergone sufficient working to
constitute “joinery and carpentry.”12 The court also rejected
classification under the catchall provision in HTSUS heading 4421
because—under General Rule of Interpretation 3(a)’s rule of relative
specificity, which provides that goods prima facie classifiable under
two or more headings are properly classified in the most specific
heading—it deemed HTSUS heading 4407 more descriptive.13
In Archer Daniels Midland Co. v. United States,14 the Federal Circuit
upheld an importer’s protest of Customs’ classification of deodorizer
distillate (DOD), a residue from edible soybean oil production.15
Customs classified DOD under HTSUS subheading 3824.90.28, a
“catchall provision” for “[c]hemical products and preparations of the
chemical or allied industries . . . not elsewhere specified or included:
Other . . . : Other.”16 Archer Daniels Midland (ADM) conceded that
HTSUS heading 3824 covered the subject products but contended
that other headings were more descriptive, and filed suit at the Court
of International Trade seeking classification under HTSUS heading
3825, a duty-free heading that provides for “[r]esidual products of
the chemical or allied industries, not elsewhere specified or
included.”17
The Court of International Trade granted summary judgment for
the government.18 It viewed the explanatory note to HTSUS
subheading 3825 as providing an exhaustive list of four substances—
alkaline iron oxide, residues from antibiotics manufacture,
ammoniacal gas liquors and spent oxide—that formed the complete
list of items subject to classification in that subheading.19 The Federal
Circuit reversed, finding HTSUS subheading 3825 appropriate and
more descriptive than HTSUS subheading 3824.20
First, the Federal Circuit found that “[DOD] falls within the
ordinary meaning of the term ‘residual products,’” as it is left over
from the distillation of soybean oil.21 The court rejected the
government’s argument that the list of products in the Explanatory
Note to HTSUS subheading 3825 was exhaustive due to “a notable
absence of language in the Explanatory Note confining the list to the
enumerated items or suggesting the list is exhaustive.”22 Because the
court found no evidence that Congress intended for HTSUS
headings 3824 and 3825 to be mutually exclusive, it deemed DOD
prima facie classifiable in both headings.23 Pursuant to General Rule
of Interpretation 3(a)’s rule of relative specificity, the Federal Circuit
deemed the phrase “residual products” as used in HTSUS
subheading 3825 more descriptive than general “chemical products”
as used in HTSUS subheading 3824.24
In Value Vinyls, Inc. v. United States,25 the Federal Circuit evaluated
the proper tariff classification of plastic-coated fabric material,
imported in sheets and used to make truck covers, dividers,
upholstery, signs and other products.26 The Court of International
Trade classified the product in HTSUS subheading 3921.90.11 as “a
product with textile components in which man-made fibers
predominate by weight over any other single textile fiber” because
the product is made entirely of man-made fibers.27 The Federal
Circuit agreed with this classification and affirmed.28
The government argued that the word “predominate” in HTSUS
subheading 3921.90.11 required at least two components and could
not apply to products made of only one type of fiber.29 In rejecting
this argument, the Federal Circuit accepted the Court of
International Trade’s analysis that products made of only man-made
fibers appeared in HTSUS subheading 3921.90.11, dating back to
that subheading’s predecessor provision in the Tariff Schedule of the
United States (TSUS), prior to harmonization.30 Citing legislative
history indicating that the harmonization of the tariff schedule
intended to adopt internationally accepted terminology without
affecting classification or duties, the Federal Circuit found that no
other HTSUS provision provided for wholly man-made fibers as did
the TSUS predecessor provision to HTSUS subheading 3921.90.11.31
Thus, Value Vinyls’ man-made fibers were properly classified under
HTSUS subheading 3921.90.11.32
United States v. UPS Customhouse Brokerage, Inc.33 presented the
question of whether certain alleged misclassifications by UPS
Customhouse Brokerage, Inc. also gave rise to multiple violations of
19 U.S.C. § 1641, which obligates customs brokers to exercise
reasonable supervision and control over their business.34 The Federal
Circuit agreed with the Court of International Trade and with
Customs that UPS misclassified certain merchandise, but vacated and
remanded the Court of International Trade’s holding that UPS failed
to exercise reasonable supervision and control over its business based
on those misclassifications.35
The dispute arose from UPS’s classifications under HTSUS
heading 8473, which covers parts and accessories of automatic data
processing (ADP) machines.36 Specifically, UPS classified sixty entries
under HTSUS subheading 8473.30.9000 between January and May
2000.37 Customs initiated eight separate penalty actions covering
these sixty entries and argued that 8473.30.9000 required ADP
machine parts to themselves contain a cathode ray tube (CRT),
rather than merely be part of a computer that contained a CRT.38
UPS paid some of the penalties, but Customs filed suit at the Court of
International Trade in December 2004 to enforce the unpaid portion
of the penalties (approximately $75,000).39 UPS unsuccessfully
sought a summary judgment declaration that Customs may only assess
one penalty for a maximum $30,000 under 19 U.S.C. § 1641.40
After a bench trial, the Court of International Trade found that
UPS misclassified the ADP machine parts and failed to exercise
reasonable supervision and control in so doing.41 UPS appealed, and
the Federal Circuit affirmed Customs’ and the Court of International
Trade’s finding of misclassification but reversed and remanded on
the section 1641 reasonable supervision issue.42
Regarding its classifications, UPS argued that HTSUS subheading
8473.30 divides items based on whether the ADP machine of which
they are a part or accessory contains a CRT.43 The Federal Circuit:
(1) ruled that “subheading 8473.30 demonstrates that there are two
types of ‘parts and accessories’: those ‘not incorporating a [CRT]’
and ‘other,’” and thus rejected UPS’s line of argument; (2) found
that HTSUS subheading 8473 actually differentiated between ADP
machine parts and accessories with and without a CRT; and (3)
affirmed Customs’ classification in HTSUS subheading 8473.44
In reversing and remanding the Court of International Trade’s
decision on UPS’s section 1641 liability, the Federal Circuit reasoned
that Customs had not considered the ten factors that it must evaluate
under 19 C.F.R. § 111.1.45 Though the Federal Circuit deferred to
Customs’ right to interpret its own regulations, the Federal Circuit
cautioned that “this discretion does not absolve Customs of its
obligation under the regulation to consider at the least the ten listed
factors.”46 The court thus reversed and remanded for further analysis
as to whether UPS violated 19 U.S.C. § 1641 in light of the
19 C.F.R. § 111.1 factors.47
In its second wood- and lumber-related classification decision of
2009, the Federal Circuit considered the proper classification of
laminated flooring panels in Faus Group, Inc. v. United States.48 Faus
Group, Inc. made the flooring panels at issue out of a fiberboard core
with a density of 0.85 to 0.95 g/cm3.49 The panels are nonstructural
finished articles to be installed by their end-users over an existing
structural subfloor.50 Each panel is grooved to facilitate assembly.51
Customs classified these panels under HTSUS heading 4411, which
provides for “[f]iberboard of wood or other ligneous materials,
whether or not bonded with resins or other organic substances.”52
Faus protested and sought classification under HTSUS subheading
4418, which provides for “[b]uilders’ joinery and carpentry of wood,
including cellular wood panels and assembled parquet panels;
shingles and shakes.”53 Customs denied Faus’s protest, and Faus filed
suit at the Court of International Trade.54
In what the Federal Circuit described as a “fifty-three page
analysis . . . that can only be described as Talmudic in its breadth and
thoroughness,” the Court of International Trade deemed the floor
panels prima facie classifiable under both HTSUS headings 4411 and
4418.55 Under General Rule of Interpretation 3(a)’s rule of relative
specificity, the Court of International Trade determined that HTSUS
heading 4411 is the more specific of the two headings and thus more
appropriate for classification.56 Faus timely appealed to the Federal
Circuit.57
The Federal Circuit sided with Faus and reversed the Court of
International Trade.58 Citing Note 4 to Chapter 44 of the
Harmonized System—which excludes wood products finished to the
extent that they acquired “the character of articles of other headings”—the
Federal Circuit analyzed whether Faus’ laminate floor panels had
been processed to the extent that they had the character of articles in
other tariff headings.59 The Federal Circuit adopted the Court of
International Trade’s conclusion that Faus’ products are prima facie
classifiable in both HTSUS headings 4411 and 4418 but appeared
sympathetic to Faus’ reading of Note 4 to Chapter 44, that fiberboard
processed such that it is prima facie classifiable in HTSUS heading
4418 is thus excluded from HTSUS heading 4411.60
The Federal Circuit also employed a General Rule of
Interpretation 3(a) analysis to avoid a final interpretation of Note 4
to Chapter 44, and instead based its holding on the determination
that HTSUS heading 4418’s requirement that wood products be
processed makes it more specific than HTSUS heading 4411, which
has no such processing requirement.61 The court added that HTSUS
heading 4411 is broader than HTSUS heading 4418 because it covers
any fiberboard product with the character of an article under
another heading “as long as it was created using one of the many
enumerated processes in Note 4.”62
B. Valuation Issues
The only valuation-related decision issued by the Federal Circuit
concerned penalties levied against an importer for a multi-year
double-invoicing scheme that Customs alleged served to substantially
undervalue imports of Mexican frozen produce and deprive the
government of more than $600,000 in duty revenue.63
The Federal Circuit reaffirmed penalties assessed against an
importer found guilty of a double-invoicing scheme to suppress the
entered value of its goods in United States v. Inn Foods, Inc.64 The
government alleged that Inn Foods, Inc. and its now-defunct Cayman
Islands-based affiliate SeaVeg fraudulently entered frozen produce
from and with the cooperation of six Mexican growers between 1987
and 1990.65
Inn Foods, SeaVeg and the Mexican growers agreed upon a
double-invoicing system, in which the growers would issue a “factura”
invoice to Inn Foods or SeaVeg with an invoice number, produce
description and price.66 The price on this factura did not represent
the price actually paid to the grower or the market value of the
produce, and was in fact “substantially lower” than either of those
figures.67 Inn Foods and SeaVeg would provide these facturas to their
customs brokers, who would use it to enter the goods into the United
States through Customs.68 After receipt of the goods, Inn Foods and
SeaVeg would create a second invoice with the original invoice
number and produce description, but with the higher price reflecting
the produce’s market value, and would then send it to the grower as
an order confirmation.69 Inn Foods or SeaVeg would initially pay
seventy percent of the higher amount, with the balance months later
after the parties could determine the final market price of the
produce.70
Customs began to examine the entries made on behalf of Inn
Foods and SeaVeg in 1988.71 In 1989, Customs’ third formal request
for documentation led to the discovery of records indicating that the
actual value of the entered produce vastly exceeded the values listed
on the facturas used for entry purposes and presented to Customs.72
After learning that Customs intended to investigate the case formally,
Inn Foods added disclaimers to its entries that stated, in relevant part,
“[t]he value being used on shipments . . . is strictly for customs
clearance” and that “[l]iquidation . . . is to be withheld until the
importer of record . . . is able to complete the audit of their files and
arrive at a true transaction value.”73
The government filed suit against Inn Foods in 2001 under
19 U.S.C. § 1592, alleging that this fraudulent invoicing system
deprived the government of significant duties owed.74 The Court of
International Trade initially dismissed the suit as time-barred, but the
Federal Circuit reversed.75 On remand, the Court of International
Trade held a bench trial and ruled that Inn Foods submitted the
materially false facturas with intent to defraud Customs.76 Inn Foods
faced a monetary penalty of $7.5 million under 19 U.S.C.
§ 1592(c)(1) and unpaid duties of $624,602.55 under 19 U.S.C.
§ 1592(d).77 The Court of International Trade found Inn Foods
liable for the entire penalty amount because it acted as either an alter
ego or aider and abettor of SeaVeg.78
On appeal, Inn Foods contended that it acted merely with
negligence when it filed false invoices and not with any fraudulent
intent.79 In rejecting this theory, the Federal Circuit held that the
evidentiary record confirmed the Court of International Trade’s
determination that Inn Foods knew of the facturas’ falsity, and knew
that its brokers would use the facturas to enter the subject produce
into the United States.80 The court then called on precedent from
the other circuit courts to confirm that “[i]nferring fraudulent intent
from the knowing use of false invoices is hardly unique to the
customs context.”81 The Federal Circuit also noted that Inn Foods
and SeaVeg concealed the existence of the double-invoice system,
even from their brokers.82 Moreover, Inn Foods and SeaVeg knew
from their brokers that the values on the facturas were material to the
produce’s entry and Customs’ valuation process.83
Inn Foods claimed that the disclaimers added to the facturas in
1989 “belie[d] any possibility that intent to defraud existed.”84 The
Federal Circuit disagreed for three reasons. First, the statement that
the invoices existed “strictly for customs clearance” at best suggested
that “the invoices contained a mere calculational error,” when in
actuality Inn Foods presented intentionally falsified values.85 Second,
the disclaimers’ suggestion of a pending audit to determine the
produce’s value was implausible because Inn Foods possessed and
kept in its records both the facturas and the true invoices, and thus
did not need an audit to learn the entered produce’s true value.86
Third, the statement that Inn Foods would correct any valuation
errors rang hollow because Inn Foods never filed any actual
corrections with Customs.87
Finally, Inn Foods challenged its liability for the entire sum of
$624,602.55 in unpaid duties.88 Though the Federal Circuit
conceded Inn Foods’ argument that Congress intended that
“normally only importers of record and their sureties are liable for
duty,”89 it also found that 19 U.S.C. § 1592(d) “suggests that the party
liable for penalties under [19 U.S.C. § 1592(a)] would also be liable
under [19 U.S.C. § 1592(d)] for the lost duty.”90 The Federal Circuit
further reasoned that Congress intended for parties liable as aiders
and abettors to face liability for the duties lost by the government as a
direct result of aiding and abetting.91 Thus, Inn Foods remained
liable for the full amount of unpaid duties.
C. Jurisdictional Issues
The only purely jurisdictional issue presented to the Federal
Circuit in 2009 concerned the Court of International Trade’s ability
to review the revocation of a customs broker’s license for that
broker’s failure to file a required periodic report of the broker’s
business activity.
In Schick v. United States,92 the Federal Circuit decided that the
Court of International Trade lacks authority to review Customs’
decision to revoke a broker’s license for failure to file a triennial
status report.93 The plaintiff, a customs broker for more than twenty
years, failed to file a triennial status report on its due date and failed
again to do so within the sixty-day grace period referenced in a letter
sent to him by the applicable Customs Port Director.94 Two months
after Customs revoked the plaintiff’s license, he requested a hearing
and a withdrawal of the revocation under 19 U.S.C. § 1641(d)(2)(B),
which pertains to disciplinary proceedings against customs brokers.95
Customs denied the request and reasoned that the license revocation
constituted an operation of law under 19 U.S.C. § 1641(g)(1), and
that the governing statute did not afford the plaintiff a right to a
hearing.96
Contending that Customs should have followed the procedures for
disciplinary proceedings, the plaintiff sought relief in the Court of
International Trade. The Court exercised jurisdiction under 28
U.S.C. § 1581(i)(4), but rejected the plaintiff’s request for relief.97
Citing Retamal v. United States Customs & Border Protection,98 the Federal
Circuit rejected the Court of International Trade’s basis for
exercising jurisdiction in this matter.99 The Federal Circuit
reaffirmed its holding in Retamal that revocation of a customs broker
license for failing to file a triennial report does not relate to the
disciplinary provisions of 19 U.S.C. § 1641(g), and is not referenced
anywhere in 28 U.S.C. §§ 1581(a)–(h) or (i)(1)–(3).100 In remanding
this proceeding to the Court of International Trade, the Federal
Circuit concluded that “19 U.S.C. § 1641(g) provides the Secretary
with independent authority to revoke a customs broker’s license, an
action that is unreviewable in the Court of International Trade,” and
advised the court to consider whether the transfer statute,
28 U.S.C. § 1631, applies.101
D. Other Customs Issues
The Federal Circuit considered whether an importer’s repeated
Harbor Maintenance Tax (HMT)102 payments when none were
required should be treated as a remediable “inadvertence” or an
irremediable mistake of law in Esso Standard Oil Co. (PR) v. United
States.103 Congress amended the HMT statute in 1988 to exempt
shipments between Alaska, Hawaii or “any possession of the United
States” to the U.S. mainland, Alaska, Hawaii or a U.S. possession.104
Customs, which Congress tasked with administering the HMT laws,
had not updated its regulations to reflect this new exemption for
shipments between U.S. possessions.105
Esso intentionally made $339,000 in unnecessary HMT payments
between 1993 and 1997 for petroleum products it shipped between
the U.S. Virgin Islands and Puerto Rico.106 Customs liquidated these
entries between 1994 and 1997 without change and without
refunding Esso’s HMT payments.107 Esso realized that possession-topossession
shipments enjoyed an exemption from the HMT later in
1997 and filed three separate requests for HMT refunds, which
Customs treated as requests for reliquidation under 19 U.S.C.
§ 1520(c).108 Customs denied all three requests because it considered
the HMT payments “a mistake of law . . . [not] correct[able] under
19 U.S.C. § 1520(c)(1).”109
The Court of International Trade heard Esso’s challenge to
Customs’ denial, and in a summary judgment ruling found that the
HMT payments constituted a correctable “inadvertence” under 19
U.S.C. § 1520(c)(1) resulting from Customs’ failure to update its
regulations to accord with the 1988 HMT amendments.110 On appeal,
the Federal Circuit reversed the Court of International Trade’s
holding that two of the three requests for reliquidation constituted
correctable “inadvertences” and affirmed that the third request was
time-barred.111
Esso advanced four theories to defend its request for HMT refunds:
first, that a Customs refund procedure in place for entities that pay
quarterly HMT fees—instead of importers that pay per entry, as Esso
did—should apply to Esso in this case;112 second, that a 1989 telex
from Customs Headquarters created an alternative avenue for
claiming HMT refunds;113 third, that the refund requests actually
qualified as “exactions” under 19 U.S.C. § 1514(a)(3);114 and fourth,
that the statutory time limits of the applicable Customs statutes
should be equitably tolled.115 The Federal Circuit rejected all four
theories.116
First, the Federal Circuit held that the subject refund procedure
did not apply to importers at all, and cited Swisher International, Inc. v.
United States,117 to confirm that a timely protest represented the sole
avenue for importers to recover HMT payments.118 Second, the court
declined to create a new refund procedure based on a 1989 telex
because the stated purpose of that telex was merely to summarize the
1988 HMT amendments, and not to create any procedures beyond
what the 1988 amendments specified.119 Third, the court rejected
Esso’s “exaction” argument, which relied on Swisher, because Swisher
involved a quarterly HMT payer and not an importer.120 Finally, the
court declined to adopt Esso’s equitable tolling argument because
the statutory exemption from HMT payments took effect five years
prior to Esso’s initial HMT overpayment, and “[e]quitable tolling
cannot excuse this lack of diligence.”121
The Federal Circuit then held as a general matter that Customs’
lack of diligence in failing to update its regulations in accordance
with the 1988 amendments did not offset importers’ lack of diligence
in understanding the HMT rules.122 In this regard, the court ruled
that “an error is not an ‘inadvertence’ if it is the result of negligent
inaction or an advertent misunderstanding of the law, regardless if
the inaction or misunderstanding was originally the fault of Customs
or the importer.”123
In Aectra Refining & Marketing, Inc. v. United States,124 the Federal
Circuit considered a claim for a refund of HMT and Merchandise
Processing Fee (MPF) payments on certain petroleum products
subsequently used to produce export goods, commonly known as
drawback.125 Aectra Refining and Marketing, Inc. imported
petroleum products, paid customs duties, MPFs and HMTs, and
subsequently exported finished petroleum products between 1987
and 1997.126 The issue before the Federal Circuit was not whether
Aectra’s imports and exports qualified for drawback, but rather
whether Aectra made a timely drawback claim—normally within
three years.127
Aectra timely filed ten requests for drawback between 1997 and
1998, but listed only the duties paid and omitted the MPF and HMT
payments.128 At the time, Customs’ regulations did not allow for
drawback on MPF or HMT payments, but Aectra conceded that it
knew Customs’ policy in this regard was subject to ongoing judicial
review.129 After Aectra filed its drawback claim—but while those
claims could be timely amended or re-filed—the Federal Circuit
determined that MPF payments were recoverable under drawback
but that HMT payments were not.130 Congress later amended the
drawback statute in 2004 to permit the recovery of HMT payments.131
Though Aectra never amended its drawback claims during the
three-year statutory period, it filed a protest prior to Congress’ 2004
amendments, requesting MPF and HMT on the same entries for
which it sought drawback in 1997 and 1998.132 Customs denied this
protest, and Aectra appealed to the Court of International Trade.133
Aectra argued that the 2004 drawback amendments suspended the
three-year limit on HMT drawback claims, that its original drawback
claims were sufficiently complete so as to entitle it to HMT and MPF
payment refunds and that the futility of such claims based on
Customs’ policy at the time the drawback claims were filed rendered
them unnecessary.134 The Court of International Trade rejected these
arguments and affirmed Customs’ denial of the claims.135
In affirming the Court of International Trade, the Federal Circuit
clarified that Congress’ 2004 drawback amendments, instead of
creating a new right to HMT refunds, merely clarified that such
refunds were always available under the statute.136 Citing Supreme
Court precedent, the Federal Circuit found nothing in the 2004
amendments that suggested intent to waive or otherwise modify the
longstanding three-year statute of limitations on drawback claims.137
The Federal Circuit also rejected Aectra’s argument that it did not
have to include HMT and MPF payment amounts in its drawback
request to complete a claim because 19 C.F.R. § 191.51(b) defines a
“complete” claim as including a full calculation of the amount of
drawback due.138 Finally, the Federal Circuit rejected Aectra’s
argument that requesting HMT and MPF payment refunds at the
time it filed drawback requests was futile and thus not required.139
Applying Supreme Court precedent in the area of tax law, the
Federal Circuit reasoned that “futility does not excuse the failure to
file a proper claim for limitations purposes.”140
In Heartland By-Products, Inc. v. United States (Heartland VII),141 the
Federal Circuit ruled that the Court of International Trade must treat
the Circuit’s customs classification decisions as retroactively
applicable.142 Heartland By-Products’ dispute with Customs began in
1995, when Customs issued a ruling letter classifying Heartland’s
prospective sugar syrup imports as exempt from the Tariff Rate
Quota (TRQ) duties on sugar.143 In 1999, after Heartland had
established its sugar refining business and had commenced
importing significant quantities of sugar syrup into the United States,
Customs revoked its ruling letter and reclassified Heartland’s sugar
syrup as subject to the substantially higher TRQ duties.144 Heartland
filed suit at the Court of International Trade before Customs’
revocation and reclassification took effect.145 In Heartland I, the Court
of International Trade determined that Customs’ revocation was
unlawful and exempted Heartland’s imports from TRQ duties.146 In
Heartland II, the Federal Circuit reversed Heartland I and upheld
Customs’ reclassification.147 After the Heartland II decision, Heartland
stopped importing the sugar syrup at issue.148
Although Customs did not liquidate or reliquidate most of
Heartland’s entries at the TRQ rate after the Heartland II mandate
issued, some entries were liquidated or reliquidated at the TRQ rate
prior to its issuance.149 Heartland protested these liquidations and
reliquidations, while Customs sought more than $65 million in
unpaid TRQ duties.150 Heartland also sought a judgment at the Court
of International Trade that any liquidations or reliquidations made
prior to the Heartland II mandate should not be subject to the TRQ
rate, which was dismissed for lack of jurisdiction under 28 U.S.C.
§ 1581(h).151 After Heartland appealed another suit dismissed by the
Court of International Trade,152 the Federal Circuit reversed and
concluded that the Court of International Trade had ancillary
jurisdiction to decide the scope of the Federal Circuit’s Heartland I
decision.153
On remand, the Court of International Trade granted Heartland’s
motion for summary judgment and ruled that Customs must
liquidate any entries made by Heartland before the Heartland II
mandate issued at the non-TRQ rate.154 The court reasoned that
retroactive liquidation at the TRQ rate would “undermine the
purpose of pre-importation review.”155 On appeal, the Federal Circuit
reversed.156
The Federal Circuit affirmed the Supreme Court’s general rule
that judicial decisions have retroactive effect.157 The court rejected
Heartland’s argument that the pre-importation review afforded by
28 U.S.C. § 1581(h) represented an exception to this general rule,
finding in the legislative history for that provision evidence that it was
intended as “a very narrow and limited exception to th[e] rule” that
the Court of International Trade “does not possess jurisdiction to
review a ruling . . . unless it relates to a subject matter presently
within the jurisdiction of the United States Customs Court.”158
The Federal Circuit also determined that, contrary to Heartland’s
contention that 28 U.S.C. § 1581(h) would be rendered meaningless
if importers could not rely on section 1581(h) decisions while they
remained subject to appeal, the pre-importation process merely
existed to allow importers the chance to challenge Customs rulings
and exhaust all appeals before importing the goods at issue.159 Thus,
the Federal Circuit found that its Heartland II decision applied
retroactively to entries liquidated or reliquidated before the Heartland
II mandate issued.160
In its final Customs-related decision of 2009, Agro Dutch Industries,
Ltd. v. United States,161 the Federal Circuit considered whether
Customs’ liquidation of entries after the Court of International Trade
issued an injunction barring their liquidation but before that
injunction took effect, mooted pending claims for reliquidation at a
newer, lower duty rate.162 The Federal Circuit decided that it did not,
and in that regard affirmed the holding of the Court of International
Trade.163
After the Department of Commerce published the final results of
its second administrative review in the Court of International Trade
of an antidumping duty order on preserved mushrooms from India,
Agro Dutch Industries, Ltd. sought review of its 27.80% antidumping
duty margin.164 Agro Dutch moved for a preliminary injunction to
prevent liquidation of its covered entries during the pendency of its
action.165 The government consented to this request, even though
Agro Dutch filed it outside of the thirty-day deadline normally
required by the Court of International Trade rules of practice.166
The Court of International Trade granted Agro Dutch’s request for
an injunction, which took effect five days after service on certain
Commerce and Customs personnel.167 The government requested
this five-day grace period to avoid “an inadvertent violation” of the
injunction due to lack of notice by the applicable government agents
or delay in dispensing the required instructions.168
Commerce had previously issued liquidation instructions to
Customs after its final administrative review results published.169 On
the same day that Agro Dutch served the injunction on the
appropriate Customs and Commerce personnel, “Customs acted on
those [prior] instructions and liquidated nearly all of Agro Dutch’s
entries.”170
After “extensive” additional proceedings, Commerce recalculated
Agro Dutch’s antidumping duty rate from 27.80% to 1.54%.171 The
Court of International Trade sustained this significantly lower duty
rate on review, and ordered that the entries be reliquidated at the
lower duty rate.172
Since Customs personnel had already liquidated nearly all of Agro
Dutch’s entries at the higher duty rate on the same day that Agro
Dutch served the initial injunction, the government argued that the
reliquidation request was moot.173 The Court of International Trade
rejected this line of argument, noted that the injunction issued
before the liquidations took place, and attributed the liquidations to
“what might best be charitably described as ‘inadvertence.’”174 The
Court of International Trade backdated the injunction and held that
not granting relief would cause “manifest injustice” to the non-party
importer of record, “which was likely to be rendered insolvent unless
the entries were reliquidated at the proper, lower duty rate.”175
On appeal, the Federal Circuit acknowledged that, under Zenith
Radio Corp. v. United States,176 court actions in which liquidation has
already occurred are ordinarily mooted.177 However, the Federal
Circuit noted that it has previously acknowledged the existence of
exceptions to that rule.178 When liquidation occurs in spite of an
injunction to the contrary, for example, the Federal Circuit held that
“not only does the trial court retain jurisdiction, but a broad array of
remedies . . . [are] available to the court to rectify the unlawful
liquidation.”179
Since the injunction was issued solely to prevent liquidation
pending a decision on Agro Dutch’s challenge, the Federal Circuit
was skeptical that Customs’ mass liquidation on the day that the
injunction was served amounted to merely a mistake.180 Indeed, the
Federal Circuit emphasized that the five-day grace period “was not
intended to allow the government to ‘rush in’ to liquidate the
relevant entries and thereby avoid the effect of the injunction.”181
Thus, the Federal Circuit affirmed that Customs’ arguably suspicious
liquidation of the enjoined entries did not moot Agro Dutch’s
173. Id.
request for reliquidation at the corrected, substantially lower duty
rate.182
II. TRADE REMEDIES LAWS
Commerce and the ITC share the responsibility for conducting
antidumping and countervailing duty investigations.183 Antidumping
investigations attempt to combat “dumping” of products at less than
fair value in the United States from other countries.184 Commerce has
the responsibility of determining whether products are entering the
United States and being sold at less than fair value, while the ITC
determines whether this activity injures or threatens to injure a
domestic industry in the subject goods.185 Countervailing duty
investigations seek to determine whether a foreign government or
public entity is subsidizing the manufacture of the subject goods.186
A. Department of Commerce
In 2009, the Federal Circuit decided seven cases involving
antidumping and countervailing duty investigations. Interestingly, all
of these decisions stemmed from Commerce’s, and not the
International Trade Commission’s, role in these investigations.
In Belgium v. United States,187 the Federal Circuit reviewed
Commerce’s liquidation instructions treating certain imports of
stainless steel plate in coils (SSPC) as steel of Belgian—not German—
origin, and thus subject to antidumping and countervailing duties on
Belgian SSPC.188 Plaintiffs-appellants Arcelor Stainless USA, LLC and
Arcelor Trading USA, LLC imported SSPC and made cash deposits in
compliance with the antidumping and countervailing duty orders,
but alleged that it had mistakenly designated some of the SSPC as of
Belgian origin when it was actually of German origin.189 Because
Arcelor appealed the results of Commerce’s first administrative
review, albeit on other grounds, the subject entries were not
liquidated.190
Prior to the fourth administrative review, Arcelor discovered that it
should have entered as of German origin some of the SSPC entered
under the antidumping and countervailing duty orders during the
first administrative review period.191 Arcelor believed, under the
“substantial transformation” doctrine, that the SSPC at issue was of
German origin because the steel was hot rolled in Germany and not
further cold rolled in Belgium.192 Arcelor filed timely protests with
Customs under 19 U.S.C. § 1514 and sent letters to Customs seeking
to correct the origin designations and collect a refund of the
deposits.193 Based on this logic, Arcelor did not include the SSPC that
it considered of German origin in its questionnaire responses during
the fourth administrative review.194
Commerce accepted Arcelor’s argument and issued liquidation
instructions alongside the fourth administrative review that “‘imports
of SSPC hot rolled in Germany and not further cold rolled in
Belgium are not subject to the antidumping duty order on SSPC from
Belgium. Entries of this merchandise made on or after 05/01/02
should be liquidated without regard to antidumping duties.’”195
In contrast, Commerce issued liquidation instructions that the
entries covered by the first administrative review remain subject to
antidumping and countervailing duties.196 Arcelor filed suit in the
Court of International Trade to challenge the liquidation instructions
specific to the first administrative review.197
After the Federal Circuit initially remanded the Court of
International Trade’s denial of the plaintiffs’ joint motion for a
preliminary injunction,198 the Court of International Trade held that
Commerce’s liquidation instructions were contrary to law.199 The
lower court reasoned that “[p]laintiffs can not [sic] be expected to
raise a challenge on an issue before it ripens or is revealed,” and “that
Commerce may not impose duties on goods that” it has determined
“are outside the scope of an antidumping or countervailing duty
order.”200
On appeal, the Federal Circuit affirmed the Court of International
Trade and rejected the government’s argument that Arcelor failed to
exhaust administrative remedies before filing suit.201 The court
reasoned that because the first administrative review “did not define
what criteria should be applied to determine whether particular steel
was Belgian in origin[,] nor did it state which entries were subject to
antidumping or countervailing duties[,]” Arcelor had no relevant
grounds on which to challenge the first administrative review, and
thus, no administrative remedies to exhaust.202 The Federal Circuit
viewed the government’s real argument as frustration that importers
should not enjoy the ability to make such belated country-of-origin
corrections, but held that “neither the [antidumping and
countervailing duty] statute[,] nor the regulations impose a time
limit on the correction of errors such as those made here by
Arcelor.”203
Therefore, the Federal Circuit found Commerce’s liquidation
instructions for entries subject to the first administrative review as
contrary to its long-established precedent that SSPC hot rolled in one
country, and not further cold rolled elsewhere, originates in the
country where it undergoes hot rolling.204 In this case, Arcelor and
the fourth administrative review liquidation instructions correctly
deemed SSPC hot rolled in Germany and not further cold rolled in
Belgium, and therefore not of Belgian origin.205
In NMB Singapore Ltd. v. United States,206 the Federal Circuit
reviewed Commerce’s decision, in a second sunset review of an
antidumping duty order on ball bearings, to continue the order while
reducing the dumping margins to levels lower than before the order
took effect.207 The Federal Circuit affirmed Commerce’s decision to
continue the order, but vacated and remanded the decision to
reduce the subject dumping margins.208
JTEKT Corporation and Koyo Corporation of U.S.A. (JTEKT)
argued that Commerce’s second sunset review determination failed
to consider evidence that JTEKT submitted, specifically that import
levels did not decrease substantially, that a U.S. recession caused any
decreases in JTEKT’s import levels around 2001,209 and that, more
broadly, “substantial evidence” did not support Commerce’s
decision.210 The Federal Circuit found it consistent with Commerce’s
Statement of Administrative Action and Sunset Policy Bulletin to
continue an antidumping duty order based merely on dumping at
any level above de minimis, and thus found it unnecessary to consider
JTEKT’s argument that Commerce failed to consider its evidence of
import volume.211 Because JTEKT did not challenge the validity of
the Statement of Administrative Action or the Sunset Policy Bulletin,
the Federal Circuit inferred their validity.212 Moreover, the Federal
Circuit reaffirmed its holding in Timken U.S. Corp. v. United States213
that 19 U.S.C. § 1677f(i) “does not require us to invalidate a decision
of Commerce if Commerce failed to explicitly address a party’s nondispositive
argument.”214
The Timken Company argued on cross-appeal that Commerce
both lacked substantial evidence to reduce the subject dumping
margins and deviated from its established methodology in the
process.215 Noting for example that Commerce did not specify what
data it used to determine certain importer’s import volumes, the
Federal Circuit agreed with Timken and found that:
it is difficult to square many of Commerce’s statements that the
Japanese importers’ levels of imports were steady or increasing with
the actual data before Commerce, even if we accepted the
arguments that Commerce could permissibly consider different
types of import data and different segments of the five-year review
period for different importers while ignoring pre-order levels.216
The Federal Circuit further agreed that Commerce deviated from
its past practice of comparing pre-order volumes to volumes during
the life of an antidumping order because Commerce only considered
volumes during the life of the order in this instance.217 The Federal
Circuit also vacated and remanded Commerce’s recalculation of its
dumping margins for further analysis of whether Commerce correctly
substituted respondents’ export data for Japanese companies’ U.S.
market share, the traditional relevant metric.218
In Sango International L.P. v. United States,219 the Federal Circuit
affirmed Commerce’s determination, on remand, that Sango
International L.P.’s gas meter swivels and nuts fell within the scope of
the antidumping duty order on certain malleable iron pipe fittings
(MIPFs) from China.220 Sango’s products came under the scope of
the subject antidumping duty order because Customs classified them
upon entry under HTSUS subheading 7307.19.90.60, which covers
“[t]ube or pipe fittings (for example, couplings, elbows, sleeves), of
iron or steel: Cast fittings: Other: Other Threaded.”221 Sango
requested classification under HTSUS subheading 9028.90.00 as parts
for and accessories to gas meters, but Customs denied this request.222
Commerce’s remand determination followed the requirements of
19 C.F.R. § 351.225(k)(2) and generally determined that Sango’s gas
meter swivels and nuts cannot be used without each other and were
properly classified in the tariff heading that subjected them to the
applicable antidumping duty order.223 The Court of International
Trade affirmed Commerce’s remand determination, accepting its
arguments that Sango’s parts are distributed through the same
avenues of trade as MIPFs and to purchasers of MIPFs, among other
factors.224
On appeal to the Federal Circuit, Sango argued that both
Commerce’s decision to treat its products collectively and
Commerce’s remand determination lacked substantial evidence in
the record.225 The Federal Circuit rejected Sango’s first argument
because it agreed with Commerce and the Court of International
Trade that Sango’s gas meter swivels and nuts could not be used
without each other, and the fact that Sango packaged and sold the
products separately was unavailing as a matter of law.226 Sango’s
second argument failed because the Federal Circuit read the
antidumping duty order as including MIPFs that connect a pipe or a
pipe fitting to an apparatus, which Sango’s gas meters and swivels
did.227 The Federal Circuit further found that Sango’s gas meters and
swivels and the MIPFs subject to the antidumping duty order shared
physical characteristics and were marketed through the same
channels of commerce.228
In Huvis Corp. v. United States,229 the Federal Circuit affirmed
Commerce’s use of a constructed market price in valuing Huvis
Corporation’s imported polyester staple fiber subject to an
antidumping duty order.230 Huvis appealed after Commerce issued its
findings in the fifth administrative review.231
Huvis purchased all of a key component used in the production of
polyester staple fiber from affiliated companies during this period,
which triggered the “major input rule” under 19 U.S.C.
§§ 1677b(f)(2)–(3) and 19 C.F.R. § 351.407(b).232 The “major input
rule” requires Commerce to determine the value of an affiliatesourced
key production component as the higher of (1) the transfer
price, (2) the market value, or (3) the cost of production.233
As it had done previously, during the fifth administrative review,
Commerce requested that Huvis submit the transfer price, market
value and cost of production for the major inputs at issue.234 For
qualified-grade and purified terephthalic acids—the major inputs at
issue—Huvis submitted only transfer price and cost of production,
explaining that its supplier considered market price data
proprietary.235 Though Commerce had, in three of four cases,
previously applied the major input rule for only the two measures
Huvis supplied, for the fifth administrative review Commerce chose
to construct a market price from “facts available.”236 In this case,
Commerce arrived at a market price by adding an average profit rate,
taken from suppliers’ submitted financial statements, and added it to
Huvis’ submitted cost of production.237 This constructed market price
exceeded both the transfer price and cost of production submitted by
Huvis, and thus Commerce used it to value the subject major
inputs.238
Huvis filed suit in the Court of International Trade to challenge
Commerce’s constructed market price as unsupported by substantial
evidence.239 The Court of International Trade found that
Commerce’s constructed market value—which relied on Huvis’ own
data—was supported by substantial evidence and did not apply any
adverse inferences against Huvis.240 The Court of International Trade
nonetheless remanded to Commerce based on the court’s finding
that Commerce’s use of constructed market price was inconsistent
with its past practice of simply using the highest available price
measure.241
On remand, Commerce stood by its methodology and explained
that it only now realized it had enough data to construct a market
price, and that doing so provided “a more complete analysis under
the major input rule, and result[ed] in a more accurate calculation of
Huvis’s dumping margin.”242 The Court of International Trade
accepted this methodology and affirmed Commerce’s constructed
market value determination.243
Huvis appealed to the Federal Circuit, again under the theory that
the constructed market price was unsupported by substantial
evidence and contrary to law.244 Huvis argued that Commerce’s
standard practice was to look only at the available measures and not
to construct a major input value, which made it the “law of the
proceeding” and a practice that Huvis should expect from Commerce
during the fifth administrative review.245 Finally, Huvis argued that
Commerce’s methodology of adding cost of production to profit
renders the cost of production variable in the major input test
meaningless, since the market value would always be higher.246
First, the Federal Circuit found that Commerce’s constructed
market value methodology in this case was permissible under the
antidumping statute.247 The Federal Circuit deemed Commerce’s
addition of an average profit to cost of production reasonable “since
there is no suggestion here that product sales were unprofitable or
that the profit margins were unusually low.”248 The court also found it
reasonable for Commerce to differentiate between varying grades of
terephthalic acids because Huvis’ own transfer price data showed that
it paid more for higher grade materials.249
Second, the Federal Circuit ruled that Commerce had a “good
reason” to deviate from its past practice.250 In this case, the court
endorsed Commerce’s determination that it could increase the
accuracy of its estimated market prices—and consequently its
dumping margins—by calculating the market price for Huvis.251 The
court rejected Huvis’s argument that Commerce could not abruptly
change course, as Huvis offered no evidence of actual detrimental
reliance.252 Thus, Commerce was permitted to proceed with its fifth
administrative review based on a calculated market price for certain
of Huvis’ terephthalic acids.253
Ningbo Dafa Chemical Fiber Co. v. United States254 concerned an
antidumping duty investigation of recycled polyester staple fiber
(PSF) from China.255 Commerce issued a final determination
imposing a 4.86% dumping rate for Ningbo Dafa Chemical Fiber
Co.256 The Federal Circuit agreed with the Court of International
Trade and affirmed Commerce’s final determination, finding that it
was supported by substantial evidence.257
PSF is made in part from recycled polyethylene terephthalate
(PET) bottle flake, and the color of the PET flake used in production
corresponds with the color of the finished PSF.258 Commerce
requested the invoices from Ningbo’s market economy purchases of
PET flake during its investigation, in furtherance of its obligation to
use the “best available information” to value the subject PSF.259 In
response, Ningbo gave Commerce fifty-eight invoices from its
qualifying market economy PET purchases, but very few of those
identified the color of PET flake purchased.260 After Commerce
unsuccessfully made a second inquiry for invoices that matched
purchase price with PET flake color, Commerce made its
determination based on “neutral partial ‘facts available’”
inferences.261
First, the Federal Circuit upheld Commerce’s use of “facts
available” inferences in this case because “Ningbo did not provide the
requested information in the form and manner requested” and
because Commerce reasonably determined the color of PET flake to
be relevant to its value.262 The court emphasized that the reason
behind a respondent’s failure to provide information reasonably
requested by Commerce is “of no moment”—including if the
respondent is from a non-market economy country—and the failure
alone allows Customs to make facts available inferences.263
Second, the Federal Circuit held that substantial evidence
supported Commerce’s final determination.264 The court deferred to
Commerce’s conclusion that it required color-specific PET flake
values and that color-specific, surrogate PET flake values from India
did not exist.265 The Federal Circuit then decided that Commerce’s
application of its neutral facts available inferences was supported by
substantial evidence.266 Noting that Commerce’s methodologies are
“presumptively correct” under Thai Pineapple Public Co. v. United
States267 and Florida Citrus Mutual v. United States,268 Ningbo’s claim that
it would have been impossible to produce color-specific PET flake
invoices as requested by Customs was not persuasive.269 In the court’s
view, Commerce had incomplete information to work with and acted
reasonably when it used the best information available to assign
colors to the market economy invoices that lacked colors.270
Moreover, the Federal Circuit found that substantial evidence
supported Commerce’s color-specific PET flake valuations, both
because the incomplete information provided by Ningbo made an
exact correlation between Ningbo’s PET flake purchases and its PSF
production possible271 and because Commerce’s calculated values
matched up with the prices derived from a co-respondent that did
provide color-specific PET flake invoices.272 Thus, Commerce’s final
determination and dumping margin for Ningbo were affirmed.273
The Federal Circuit upheld an “adverse facts available” (AFA)
antidumping ruling in PAM, S.P.A. v. United States.274 The appeal
considered the Court of International Trade’s affirmance of
Commerce’s determination of a 45.49% AFA margin for PAM S.P.A.
(PAM), an Italian producer and exporter of pasta, in compliance
with the Court of International Trade’s earlier instructions on
remand to recalculate an AFA antidumping margin in accordance
with 19 U.S.C. § 1677e(c).275
This appeal concerned the sixth administrative review, during
which PAM filed questionnaire responses with Commerce and
participated in the verification of its sales databases.276 However, PAM
failed to report sales to AGEA, a governmental entity, and a set of
invoices for pasta shipped directly from an external warehouse to
PAM’s customers.277 These omissions represented approximately twothirds
of PAM’s total domestic sales.278
Based on these omissions, Commerce determined that PAM failed
to cooperate with its investigation and applied an AFA margin.279 The
AFA margin of 45.49% applied to PAM represented the highest
margin applied to any party that had been previously upheld in the
course of the investigation.280 PAM challenged Commerce’s decision
and the Court of International Trade remanded, finding that
Commerce had not “adequately corroborated” the subject margin.281
On remand, Commerce took into account PAM’s databases but
found the same margin that it found in the sixth administrative
review.282
Noting that “Congress has made very clear the importance of
accurate and complete reporting of home market sales to the
Department of Commerce,” the Federal Circuit found that
“Commerce’s discretion in applying an AFA margin is particularly
great when a respondent is uncooperative by failing to provide or
withholding information.”283 The court identified substantial
evidence for the 45.49% AFA margin based on Commerce’s finding
that at least twenty-nine sales occurred with margins at or above
45.49%.284 The court rejected PAM’s argument that its high margin
sales were mere outliers, as 0.5% of total sales, based on Ta Chen
Stainless Steel Pipe, Inc. v. United States.285 In that case, the Federal
Circuit held that, “[s]o long as the data is corroborated,” Commerce
may choose to rely on a small subset of data to support an AFA
margin.286
Qingdao Taifa Group Co. v. United States287 required the Federal
Circuit to decide whether the Court of International Trade had the
power to halt liquidation of entries for importers of hand trucks
made and exported by Qingdao Taifa Group Co. (Taifa) so that Taifa
could challenge antidumping duties imposed on it by Commerce.288
Various U.S. companies purchased Taifa hand trucks in 2005 and
2006 and paid cash deposits pursuant to the applicable antidumping
duty order, but Taifa did no importation of its own and thus paid no
cash deposits directly.289 Commerce later notified all interested
parties of the opportunity to request a review of the entries.290
Commerce initiated a review based in part on Taifa’s request and
sent personnel to China to visit Taifa and interview its employees.291
During its visit to China, Commerce detected “concealment,
destruction, and tampering with responsive documents” and, as a
result, applied an AFA margin under 19 U.S.C. § 1677e(b) and
assigned the general antidumping duty rate used for China, which
was much higher than the rate generally applied to individual
exporters.292 Taifa challenged this determination at the Court of
International Trade, which granted Taifa’s motion for a preliminary
injunction and halted liquidation pending the outcome of its
review.293 Certain domestic producers who later intervened in the
Court of International Trade action appealed to the Federal
Circuit.294
The Federal Circuit reviewed the Court of International Trade’s
grant of an injunction under an “abuse of discretion” standard.295
Pursuant to this standard, the lower court will only be reversed if it
“made a clear error of judgment in weighing the relevant factors or
exercised its discretion based on an error of law or clearly erroneous
fact finding.”296
As an initial matter, the Federal Circuit rejected the government’s
argument that the intervening domestic producers had waived their
right to participate because they did not intervene until after the
injunction was granted.297
In affirming the Court of International Trade’s decision, the
Federal Circuit determined that Taifa faced irreparable forfeiture in
the event that an injunction was not granted.298 The court further
reasoned that no other statutory framework or process existed for
Taifa to challenge the validity of Commerce’s chosen antidumping
duty margins, and thus the company would have no recourse after
liquidation was completed.299 Moreover, the court found that the
legislative history of the antidumping statute supports an injunction,
as “[t]he Tariff Act . . . expressly contemplates protections for foreign
as well as domestic manufacturers.”300 And the court finally
determined that Taifa demonstrated “at least a ‘fair chance of success
on the merits.’”301 Though “no party proffers any significant evidence
about the merits of the imposed tariff rate,”302 Taifa at least claimed
that it should not be subject to the China-wide rate because it is not a
government-controlled entity.303 Based on this limited argument, the
Federal Circuit saw no cause to overturn the Court of International
Trade’s finding that Taifa demonstrated some likelihood of success
on the merits.304 Therefore, the Federal Circuit sustained the
injunction granted by the Court of International Trade.305
B. International Trade Commission
The Federal Circuit issued only one decision in 2009 arising out of
the ITC, and it related to the constitutionality of the now-repealed
Byrd Amendment.306 The case discussed below continued to the
Federal Circuit, even though Congress repealed the statute, because
the private parties’ claim for distributions predated the Amendment’s
repeal.307
In 2009, the Federal Circuit upheld the constitutionality of the
Byrd Amendment,308 which provided for the distribution of
antidumping duties collected by the federal government to certain
“affected domestic producers” of the dumped goods, against First
and Fifth/Fourteenth Amendment challenges.309 SKF USA (SKF)
challenged the ITC’s 2005 denial of its request for Byrd Amendment
distributions.310 The ITC reasoned in its denial that SKF was not
eligible for distributions because it was not a petitioner and had not
supported the petition resulting in the antidumping duty order.311
The Court of International Trade agreed with SKF and found that
the Byrd Amendment’s language that limited eligible claimants to
petitioners or supporters of the petition violated the equal protection
guarantees of the Fifth Amendment.312
On appeal, the Federal Circuit declined to decide threshold
questions of jurisdiction and simply assumed that the Court of
International Trade had jurisdiction to hear SKF’s claim and that the
claim was not barred by any applicable statute of limitations.313 The
Court further determined that, since SKF challenged the Byrd
Amendment as applied to its claim for distributions and not on its
face, the claim could only accrue once SKF filed suit to collect the
duties.314
Stressing its adherence to the doctrine of constitutional avoidance,
the Federal Circuit first considered SKF’s First Amendment
argument.315 The Court rejected SKF’s argument that the Byrd
Amendment’s restriction of distributions functioned to penalize
domestic producers who declined to speak in support of
antidumping petitions because “[p]arties who are awarded
antidumping distributions under the Byrd Amendment may say
whatever they want about the government’s trade policies generally
or about the particular antidumping investigation, provided they do
so outside the context of the proceeding itself.”316 In this regard, the
Federal Circuit found that the Byrd Amendment, rather than chilling
opposing views, rewards the efforts of domestic producers who aid
enforcement.317
SKF based its equal protection argument on the theory that no
rational basis for distributing antidumping duties only to domestic
producers that supported an antidumping petition furthered the
compensatory purpose of the Byrd Amendment.318 The government
countered that the Byrd Amendment “identifies a group of
beneficiaries that are entitled to compensation for unfair trade
practices” and thus rationally supports its purpose.319 The Court of
International Trade agreed with SKF because it saw the antidumping
laws as “designed to benefit entire industries rather than individual
companies.”320 But the Federal Circuit rejected this line of reasoning
and—extending its First Amendment findings to its equal protection
analysis—found that the Byrd Amendment was rationally related to
the legitimate purpose of enforcing U.S. trade laws and rewarding
those in the private sector who assist in that enforcement.321
In a split decision, the Federal Circuit denied a petition for a panel
rehearing and a petition for rehearing en banc on September 29,
2009.322
CONCLUSION
In 2009, the Federal Circuit issued nineteen precedential
international trade-related decisions that will undoubtedly prove
important to both the import and export community’s day-to-day
business operations and the future activities of Customs, Commerce
and the ITC. The Federal Circuit’s review of international traderelated
appeals from the Court of International Trade remains a
small but extremely important body of law, and the Federal Circuit’s
role in creating judicial precedent for the ever-changing regime of
U.S. trade policy and trade regulations is only likely to increase with
time.