FEDERAL CIRCUIT AFFIRMS DISMISSAL OF ANTIDUMPING REVIEW REQUEST ON FRAUD GROUNDS

A so-called domestic producer association, which provided material false information to the Commerce Department, forfeited its right to request an annual review of Chinese importers in connection with the outstanding antidumping order against Fresh Garlic from the People’s Republic of China, the Court of Appeals the Federal Circuit recently held.

In New Mexico Garlic Growers Coalition v. United States, No. 2019-1404 (March 27, 2020), two growers claiming to constitute a domestic association of garlic producers petitioned the Commerce Department to conduct an annual review of a Chinese garlic producer/exporter, Harmoni Spice. After the review was initiated, one of the two New Mexico growers advised Commerce that it had left the Coalition, and that other members of the coalition had deceived Commerce concerning the fact that Coalition members were acting for certain Chinese interests. After considering this additional information, Commerce determined that there had been material misrepresentations made regarding the New Mexico growers’ standing and terminated the review. The New Mexico growers then sued to challenge Commerce’s determination. The CIT determined that Commerce’s decision that the New Mexico growers lacked standing to seek the investigation was supported by substantial evidence and upheld it.

The Federal Circuit affirmed the decision of the Court of International Trade.

The New Mexico growers claimed that Harmoni Spice had colluded with the original petitioners, the Fresh Garlic Producers Association (FGPA), to avoid review of Harmoni’s zero antidumping rate. FGPA had repeatedly sought review of Harmoni, then withdrawn the requests. Harmoni is reputedly a major producer of one of the leading FCPA members.

The Federal Circuit held that Commerce had inherent authority to protect the integrity of its proceedings, which included the power to terminate an ongoing review if the party requesting the review was not able to demonstrate that it had standing as a “domestic interested party.”

The New Mexico group had also argued that once a request for review is made, Commerce must review all entries for all foreign exporters and producers of the merchandise in question. It also challenged the regulation allowing interested parties to withdraw review requests after they were made. Finding that the New Mexico group’s lack of standing undermined its ability to legitimately raise these issues in the CIT, the Federal Circuit elected not to rule on them.

While we’re all working from home: The story behind this lawsuit is the subject of the episode “Garlic Breath” in the Netflix documentary series “Rotten”. It’s interesting viewing.