Trade Updates for Week of June 6, 2018

United States Court of International Trade

 

Preliminary Injunction Granted

Where a single entry bond requirement (“SEB Requirement”) imposed an enhanced SEB Requirement amount of three times the value of the entire shipment, the Court granted an injunction restraining U.S. Customs and Border Protection from collecting such a bond, other than the $200,000 continuous bond currently in place for plaintiff.

In U.S. Auto Parts Network,  Inc. v. United States et al., Court No. 18-68, Slip Op. 18-62 (May 25, 2018), the Court reviewed the preliminary injunction factors to decide whether an injunction should be granted.  Because of plaintiff’s inability to pay the SEB Requirement at about $9 million, and plaintiff’s showing that it would be forced into bankruptcy if required to pay the SEB Requirement, the Court found for plaintiff in regards to irreparable harm, balance of hardships, and agency action in violation of the APA.   The single entry triple bond was determined to be excessive and the Court noted that the government determined that approximately 99% of the goods imported by U.S. Auto were not implicated by Customs’ counterfeit allegations, which was the reason for the SEB Requirement. In regards to public interest, the Court found that it weighs in favor of both plaintiff and defendants where, plaintiff has had to force time off for employees because of the SEB Requirement, and defendant is mandated to enforce the law. While the Court did not find that plaintiff provided a sufficient showing in regards to due process claims, it nonetheless granted the injunction.

 

Final Scope Ruling Remanded on Zinc Anchors

In OMG, Inc. v. United States and Mid Continent Steel & Wire Inc., Court No. 17-36 , Slip Op. 18-63 (May 29, 2018), plaintiff challenged Commerce’s determination that zinc anchors fall within the scope of Antidumping and Countervailing duty orders on Certain Steel Nails from the Socialist Republic of Vietnam. Certain Steel Nails from the Socialist Republic of Vietnam: Final Scope Ruling on OMG, Inc.’s Zinc Anchors (Feb. 6, 2017), P.D. 29 (“Final Scope Ruling”).  The zinc anchors by definition are not nails or “fastener(s) inserted by impact into the materials to be fastened.”  OMG’s anchors are “inserted into predrilled holes which must be a minimum of ½[inch] deeper than the Zinc Anchor embedment.” Slip Op. at pg. 10.   Moreover, trade usage supports the conclusion that OMG’s zinc anchors are not nails.  Thus, the Court remanded the Final Scope Ruling to Commerce for further consideration consistent with the Court’s opinion.

 

Ex Parte Communications Must Be Included In Administrative Record

In CSC Sugar LLC. v. United States, Slip Op. 18-64, Court No. 17-00214 (June 1, 2018) & in CSC Sugar LLC. v. United States, Slip Op. 18-65, Court No. 17-00215 (June 1, 2018) the Court heard arguments over Commerce’s duty to disclose ex parte communications about suspension agreement renegotiation regarding sugar from Mexico subject to antidumping and countervailing duty investigations. Commerce had previously placed antidumping and countervailing duties on sugar from Mexico,  but had made suspension agreements in regards to the duties with the Mexican Government. In 2016, Commerce notified Mexico that it intended to withdraw from the agreements unless the terms were renegotiated. After the renegotiation process “Commerce invited interested parties to comment on the draft” suspension agreements. Id. at 5. However, plaintiff brought this case contending the administrative record was incomplete because the Financial Times had published an article reporting phone calls between U.S. representatives, Mexican representatives, sugar industry representatives that was never disclosed on the record.

The issue in this case was whether Commerce was required to disclose the phone conversations between various U.S., Mexican, and industry representatives on the administrative record. 19 U.S.C. § 1516 required the government to disclose “a copy of all information presented to or obtained by the Secretary… including all government memoranda … and the record of ex parte meetings.” Id. at 10. 19 U.S.C. § 1677 required the memorialization of ex parte meetings. The government argued that it was not required to disclose the contents of the meetings because the content was exempt because they were confidential. In analyzing this argument the Court used the Chevron test.  The Court considered the language of the applicable statutes to determine if the language in the statute was ambiguous, if the language was ambiguous the Court would then consider if the government’s interpretation of the language was reasonable. In interpreting the applicable statute, the Court said there were no limitations on the “requirement that the record include all information presented to or obtained by Commerce in the course of the proceeding.” Id. at 11. The Court granted plaintiffs motion to complete the record by requiring the government to disclose these ex parte communications. However, the Court did not grant plaintiff’s request for the government to disclose ex parte communications from after Commerce’s final determinations were published because they were not subject to disclosure on the record.