Trade Updates for Week of October 24, 2018

United States Court of International Trade

Court Orders Enforcement of Judgment in Antidumping Matter

Before the Court in United States Steel Corp. et. al. v. United States et. al,. Slip Op. 18-139, Court No. 14-00263 (October 17, 2018) was plaintiff’s motion to enforce a judgment previously issued by the Court. In previous litigation, the Court ordered the Commerce Department to adjust the rates of two foreign respondents who had been assigned the “all others” rate. Commerce issued new rates for the respondents but did not recalculate the “all others rate.” Plaintiff requested that all other rate be recalculated according to the new respondent rates. The government refused to do so arguing it had carried out the Court’s order.  The plaintiffs argued that Commerce had failed to recalculate the “all others rate” as in previous cases. The Court granted the plaintiff’s request and ordered Commerce to issue a revised Timken notice either reconsidering or further explaining its determination.   The Court noted:

“Agency action becomes an established practice when a uniform and established procedure exists that would lead a party, in the absence of notification of change, reasonably to expect adherence to the agency’s past action.” Id. at 8.The Court held it was Commerce’s prior practice to recalculate the “all others rate” when respondent rates are changed because the agency had done so numerous times, and had even stated in agency decisions it was Commerce’s practice. In addition the Court said “where Commerce deviates from its practice, it has two options. First, Commerce may explain why it is reasonable under the circumstances to deviate from that practice. Second, Commerce may announce a change to its practice, unless the party in the instant case can be shown to have detrimentally relied on such practice.” Id. at 17. As such, the issue was remanded back to Commerce for a further reconsideration.     

Scope Determination on Strike Pins Remanded to Commerce.

Before the Court in Midwest Fastener Corp. v. United States et. al, Slip Op. 18-142, Court No. 17-00231 (October 19, 2018) was Commerce’s  determination that certain “strike pins” were within the scope of the antidumping duty (“ADD”) order covering steel nails from China. Commerce determined the strike pins were unambiguously subject to the scope of the orders on steel nails. Plaintiff’s argued Commerce’s decision was not supported by substantial evidence. The Court remanded the issue to Commerce for further reconsideration, holding:

“Scope orders may be interpreted as including subject merchandise only if they contain language that specifically includes the subject merchandise or may be reasonably interpreted to include it.” Id. at 6. The scope of the ADD order covered “nails . . . constructed of two or more pieces (i) includes multi-component products where one component is a nail, and the other non-nail components aid the functioning of the nail, and (ii) that here, the threaded body, washer and nut components merely aid the functioning of the nail component.”

Commerce considered the strike pin as a unitary object consisting of four components, one of which was a nail, therefore the agency found the object was within the scope of the ADD order.  However, the Court said Commerce had failed to produce evidence that “other components of the strike pin anchor merely aid the functioning of the pin” and that the agency needed to clarify the meaning of the phrase “constructed of two or more pieces”. Id. at 10. The issue was remanded for further clarification.

Court Denies Motion to Stay Judgment on Endangered Species

In National Resources Defense Council et. al. v. Wilbur Ross et. al., Slip Op. 18-143, Court No. 18-00055 (October 22, 2018), the court declined to stay its judgment requiring the United States to exclude certain Mexican fish harvested in a manner which engendered the vaquita, a small porpoise species in danger of extinction.  The Court had previously ordered the government to enforce the Marine Mammal Protection Act (“MMPA”) and ban the importation of fish caught with gillnets that also catch and endanger the vaquita, and issued a preliminary injunction to that effect. The Government motioned for a stay of the preliminary injunction pending appeal, alleging that the Court made several legal errors, but the Court declined to grant one.

“A stay pending appeal is not a matter of right, even if irreparable injury might otherwise result, and the party seeking the stay bears the burden of showing that the circumstances justify an exercise of the court’s discretion.” Id. at 6. The defendant’s arguments in support of the stay are that the Court made an error by issuing the injunction and the Government is suffering serious harm as a result of the injunction. The Court strongly stated no legal errors had been committed because the government “by failing to ban the fish imports as required by the MMPA, the Government unlawfully withheld agency action under § 706(1) of the Administrative Procedure Act.” Id. at 7.

The Court also strongly stated that it did not abuse its discretion when weighing the plaintiffs harm against the governments.  The Court said that “the declarations attached to the Government’s motion to stay provide no better evidence of a concrete rather than speculative injury” and that “the public interest is best served when the Government complies with the law, namely the preservation of marine mammal populations, such as the vaquita here.” Id. at 8.

 

Informal Consultations Insufficient to Discharge Discovery Obligations.

Before the Court in United States v. Great Neck Saw Manufacturers Inc., Slip Op. 18-144, Court No. 17-00049 (October 22, 2018) was the plaintiff’s motion to compel discovery responses from the defendant in a penalty litigation. On April 6, 2018 the government served defendant with numerous discovery requests with responses due on May 10th. Defendant requested an extension to May 25th, because of the large number of entries involved. GNSM failed to provide any responses by the deadline without explanation. Despite communication back and forth between the parties the issue was never resolved. On July 10th the defendant produced documentation to the plaintiff that the Government did not believe came close to fulfilling the defendant’s obligation, and the motion to compel was filed. Defendant argued it was impossible to fulfill the Government’s discovery request. The Court denied the motion to compel without prejudice.

Judge Leo Gordon indicated that, during discovery parties must make “an effort to determine precisely what the requesting party is actually seeking; what responsive documents or information the discovering party is reasonably capable of producing; and what specific, genuine objections or other issues, if any, cannot be resolved.” Id. at 6. The Court said “plaintiff’s description of its efforts to confer failed to provide the court with a sense of whether the parties reasonably engaged in deliberations, conversations, a comparison of views, or consultations with an eye to resolving the dispute prior to involving the court” because the plaintiffs email conversations with the defendant were “minimal in length.” Id. at 6-7. Because of this, the Court could not compel the discovery.  In order to assist in the litigation process the Court ordered the parties to confer and to make an effort to resolve the dispute. The Court left the option open for further motions to be filed at that time.