United States Court of International Trade

Action to Recover Unpaid Duties and a Civil Penalty is Exempt from the Automatic Stay

In United States v. Greenlight Organic, Inc., Court No. 17-31, Slip Op. 17-127 (September 15, 2017), the Court considered whether the automatic bankruptcy stay of 11 U.S.C. § 362(a) (2012)1 applies to an action brought pursuant to 19 U.S.C. § 1592 for fraudulent misrepresentations made in the course of importing merchandise into the commerce of the United States.  Plaintiff argued that the stay was inapplicable because 11 U.S.C. § 362(b)(4) excluded action against a debtor by the government when the case involved the government’s police power.  Defendant argued that the action should be stayed because the government seeks to recover unpaid duties and a penalty for fraud, rather than merely to fix damages for the alleged violation.  The Court held that since the government seeks to enforce United States customs laws related to the fraudulent importation of merchandise and is there an enforcement action under the exemptions.  The automatic stay provisions therefore did not apply and the action will proceed.

Sustained Remand Results Concerning 19th Review

In Fresh Garlic Producers Association et. al. v. United States et. al., Slip. Op. 17-127, Court No. 14-00180, (September 19, 2017), the court reviewed Commerce’s determinations on remand concerning the 18th and 19th Administrative Review of the Antidumping Order on Fresh Garlic from China. Previously in the case, the Court remanded the 18th review for selection of a new surrogate country. Commerce reopened the administrative record, after consulting with plaintiffs, and Ukraine was chosen as the surrogate. Defendant-intervenors argued that Commerce should not have reopened the record and the decision to use Ukraine as a surrogate was not supported by evidence. The defendant intervenors also argued the 19th review was invalid because the ADD rates were based on factors from the surrogate country the court rejected in this case. For the following reasons, the Court sustained the results on Commerce’s remand decisions and the outcome of the 19th annual review.

The first issue was Commerce’s decision to reopen the record for choosing a new surrogate country. Intervenors argued since two other countries had been proposed as surrogates the record did not need to be reopened. The Court stated that “reopening the record on remand is a matter largely left up to Commerce’s discretion,” as long as the Court did not forbid Commerce for examining new information. Id. at 8. The Court had previously said that the record may be reopened in this matter and upheld Commerce’s determination. The next issue was Commerce’s selection of Ukraine as a surrogate. Intervenors argued that the decision was unsupported by evidence. The court said “substantial evidence supports Commerce’s determination that Ukraine offers the best available information.” Id. at 14. The Court also suggested that Ukraine offered better statistics for use then the other proposed surrogates. The final issue was the 19th review’s use of the surrogate country rejected by the Court previously in the case. The Court said in determining the non-mandatory respondents’ rate, Commerce is expected to use “the all others’ rate provision of 19 U.S.C. § 1673d(c)(5).” Id. at 20. However, if the rate could not be calculated, Commerce may use reasonable means to determine a rate. Previously, “the court explicitly said that Commerce could use the 18th AR’s rate as long as it resulted in a non-punitive rate”, this was reasonable enough for the Court to uphold Commerce. Id. at 21. Commerce’s determination in the 19th review was therefore, upheld.