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دوشنبه 31 خرداد‌ماه سال 1389 ساعت 05:49 ب.ظ

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constitutionality of the now-repealed Byrd Amendment.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.

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