UNITED STATES COURT OF INTERNATIONAL TRADE

Fraserview Remanufacturing Inc. v. United States, Slip Op. 24-8

In Fraserview Remanufacturing Inc. v. United States, Slip Op 24-8 (January 25, 2024) a Canadian exporter of softwood lumber had some eighty (80) entries suspended while the Commerce Department conducted its first administrative review of the antidumping and countervailing duty orders against Softwood Lumber from Canada.  Even though the Commerce Department had directed Customs to suspend liquidation of the entries, the agency marked them for liquidation.  When CBP failed to follow through on the liquidations, it concluded that the entries were “deemed liquidated” by operation of 19 U.S.C. § 1504.  It later posted notice of the “deemed liquidations” on its Automated Commercial Environment.  Frasierview, the importer, contacted CBP in an effort to have the entries returned to suspended status but Customs told them that since the time for protesting the liquidations had expired, there was nothing they could do.

Fraserview then commenced suit in the CIT invoking the Court’s 28 U.S.C. §1581(i) “residual jurisdiction.” The Government moved to dismiss for lack of subject matter jurisdiction, holding that the importer should have protested the deemed liquidation within 180 days of the liquidation date and proceeded to court upon denial of their protest pursuant to 28 U.S.C. §1581(a). But the Court was having none of it.  The Court that the CIT’s “residual jurisdiction” could only be used where no other remedy was available or the remedy was “manifestly inadequate”.  In this case, he ruled, the protest remedy was not available to the plaintiff because the entries had never liquidated, deemed or otherwise.

The Court pointed to the statutory scheme in 19 U.S.C. §1504, governing “deemed liquidation” of entries suspended pursuant to antidumping or countervailing duty orders.  That statute provides that the liquidation of entries continues to be suspended until the Commerce Department notifies CBP that the entries should be liquidated.  Thereafter, CBP has 180 days to liquidate the entries in accordance with Commerce’s directions.  If Customs fails to liquidate within the 180 day period, the entries are “deemed liquidated” as entered (which may be good or bad for the importer depending on what the Commerce Department decided).  In this case, the Court reasoned, Commerce had never instructed CBP to liquidate the entries and no “deemed liquidation” could have occurred pursuant to 19 U.S.C. §1504.  Furthermore, an importer could not protest a liquidation or reliquidation until one had occurred.  From this, the Court reasoned, the protest remedy was not available to Fraserview. The Court not only denied the Government’s Motion to Dismiss, but entered a declaratory judgment in the Plaintiff’s favor, holding that the deemed liquidations were ineffective and directing Customs to return them to “suspended” status pending the outcome of any appeals before a court or a USMCA binational dispute resolution panel.  The Court ordered CBP to report back within 90 days. The decision is yet another step in the Court’s recent movement to loosen the concept of “finality of liquidation” in order to do justice in exceptional circumstances.

Government of Canada, et. al., v. United States, Slip Op. 24-17

Before the Court in Government of Canada, et. al., v. United States, Slip Op. 24-17 (February 15, 2024) were several motions to intervene as of right filed pursuant to USCIT Rule 24 and 28 U.S.C. § 2631(j)(1)(B) in a consolidated action challenging the fourth administrative review of the antidumping duty order on certain softwood lumber products from Canada. After decades of consenting to intervention motions, the Government argued for the first time that requests for administrative review are inadequate, and parties must file factual information before Commerce to intervene as a matter of right before the CIT. For the reasons discussed below, the Court held that parties who file a request for administrative review satisfy the statutory “party to a proceeding” standing requirement. In addition, The Court held that Commerce’s regulations 19 C.F.R. § 351.102(b)(36) and 19 C.F.R. § 351.102(b)(21), when applied to 28 U.S.C. § 2631(j)(1)(B), conflict with the statute and are not in accordance with law.

USCIT Rule 24 allows a party to intervene in an action upon timely application “when a statute of the United States confers an unconditional right to intervene.” To succeed on a motion to intervene, the proposed intervenors in actions filed pursuant to 19 U.S.C. § 1516a must show that each party is an “interested party,” “would be adversely affected or aggrieved by a decision in a civil action pending in the [CIT],” and “was a party to the proceeding in connection with which the matter arose.” The Court held that by requesting administrative reviews proposed intervenors “put Commerce on notice of: 1) their disagreement with the existing dumping margins and the cash deposit rates paid during the period of review; 2) their interest in obtaining a more favorable margin rate; 3) their willingness to provide more information if selected by Commerce for administrative review (or be subjected to adverse facts available for not cooperating); and 4) information that assisted Commerce in its selection of mandatory respondents.” As such, the Court held that the parties who file a request for administrative review, without filing an administrative case brief, meet the statutory requirements of 28 U.S.C. § 2631(j)(1)(B) and shall have standing to intervene as a matter of right in litigation before the CIT.

The Government also argued that because all but one of the proposed defendant intervenors did not file administrative case briefs they were not parties to the proceeding because the submissions were not “written arguments” nor “factual information” as required by 19 C.F.R. § 351.102(b)(21) and (36). The Court said that the regulations do not control the Court’s construction of a statute administered by the Court itself. The Court found the regulations when applied to the Court’s standing statute were not in accordance with law because : “1) the regulations are examples of Commerce attempting to regulate an area squarely within the Court’s purview … ; 2) the regulation … includes added requirements of ‘active’ participation and ‘written submissions’ that do not appear in the statute …; 3) the regulation … includes stringent requirements of ‘statements of fact’ submitted ‘in support of allegations’ that do not appear in the statute …; and 4) Commerce’s regulations narrow the definition of ‘party to a proceeding’ in conflict with Congress’ expressed intent that access to the CIT should be expanded rather than limited.” Ultimately, the Court found that the Government arguments held little sway given that for decades, the Government has consented to intervention and only started to oppose intervention for the first time in this case.