United States Court of International Trade

Remand Determination Sustained in Cold-Rolled Steel Flat Products Case

Before the Court in Hyundai Steel Co. v. United States et. al., Slip Op. 19-24, Court No. 16-00228 (February 26, 2019) was Commerce’s remand redetermination in the antidumping duty investigation of certain cold-rolled steel flat products from Korea. The court had previously remanded for Commerce to reconsider some of the agency’s decisions regarding the use if adverse facts availbe (“AFA”) and constructed export price (“CEP”).  On remand, Commerce found that the use of AFA for U.S. sales where Plaintiff did not incur domestic inland freight was inappropriate; and found that the use of AFA for U.S. sales for which Plaintiff incurred domestic inland freight, regardless of the use of an affiliated or unaffiliated freight provider– was warranted because it was not possible to distinguish freight providers. In addition, Commerce continued to deny Plaintiff a CEP offset.

“The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law.” Id. at 5. “The results of a redetermination pursuant to court remand are also reviewed for compliance with the court’s remand order.” Id. The Court said “the record did not allow Commerce to determine the percentage of freight charges provided by unaffiliated providers” because of this, the agency “was unable to reduce the AFA freight adjustment to account for unaffiliated domestic inland freight.” Id. at 6-7. In regards to the offset issue, “when Commerce is unable to find sales in the home market at the same level of trade as the sales in the U.S. market, it will compare sales at different levels of trade and account for that difference by making a level of trade adjustment or granting a CEP offset.” Id. at 10. Commerce re-examined the record and concluded that all three of Plaintiff’s U.S. sale channels represent the same level of trade in the home market. The court said “Substantial evidence supports that finding.” Id. at 13. In addition, the Court also said Commerce complied with the court’s remand order.

Commerce Decision Remanded Regarding Application of State Wide Duty Rate

Before the Court in Hubbell Power Sys., Inc. v United States et. al., Slip Op. 19-25, Court No. 15-00312 (February 27th, 2019) was Commerce’s results in the administrative review of an antidumping (“AD”) duty order on certain steel threaded rod from China. Plaintiff challenges Commerce Commerce’s rejection of Gem-Year’s, a Chinese exporter, application for separate rate status and assignment of the 206% country-wide rate. During the review, Commerce found that Gem-Year had failed to cooperate by not acting to the best of its ability. Particularly, Commerce took issue with the late disclosure that affiliate, Jinn-Well Auto Parts Co. Ltd. (“JinnWell”), had likely produced in-scope merchandise. As such, Commerce applied the China-wide rate against Gem-Year. For the following reasons, the matter is remanded for Commerce for reconsideration.

Courts have “consistently upheld Commerce’s use of a rebuttal presumption of state control such that entities in NMEs are assigned the state-wide AD duty rate unless they demonstrate eligibility for a separate rate.” Id. at 7. “If an entity demonstrates a lack of de jure and de facto government control, Commerce will assign it a separate rate.” Id. The Court said “the imposition of China’s total rate in response to Gem-Year’s failure to timely reveal Jinn-Well’s production of some small amount of subject merchandise appears unduly punitive or arbitrary given the extensive factual information that remained on the record.” Id. at 10. The Court said Commerce failed to consider an “indication that Gem-Year may not have understood the Jinn-Well products to be within the scope of the AD duty order and that these products were not sold in the United States.” Id. at 11. Therefore, the issue was remanded.

United States District Court

Customs Seizure Decisions Not Reviewable Prior to Forfeiture Proceedings, District Court Rules

A Federal District Court will not review petitions filed with Customs regarding seizure of merchandise, according to a recent decision from the United States District Court for the District of Delaware.

In LKQ Corporation et al. v. Department of Homeland Security et al., No. 18-225-MN (D. Del)(February 22, 2019), which an importer of “repair grilles” for cars challenged determinations by Customs and Border Protection to seize imported grilles as either bearing counterfeit or “confusingly similar” versions of registered trademarks which have been recorded with Customs for import protection. The importer had previously sought to challenge exclusions of its merchandise in the Court of International Trade. The dispute subsequently spilled over into Federal District Courts, where forfeiture cases against certain grilles are pending in California and Georgia.

The importer filed suit in the Federal District Court in Delaware in an attempt to get comprehensive review of all of CBP’s various seizure actions (some 165 in total), which are the subject of some 81 petitions for mitigation of seizures. It also sought to consolidate the California and Georgia seizure cases with its Delaware challenge

Not surprisingly, the Court in Delaware has now dismissed the plaintiffs’ case in its entirety, for a variety of reasons. First, it held that the courts have no jurisdiction to review Customs’ “discretionary” review of petitions for mitigation, which it characterized as requests for “executive pardons of the property based on the petitioner’s innocence”. It declined to interfere with Customs’ seizures of various entries of goods, noting that the exclusive remedy was to have the government file a case to forfeit the property, in which case the importer could assert a claim to the goods.  If the government delayed too long in bringing forfeiture cases, the importers could bring an equitable action seeking to have forfeitures commenced or the property released.

The court also noted that there was no due process right to pre-forfeiture hearings with respect to goods seized at the border.