CAFC Affirms Importer Can't Claim Lower Court-Ordered CV Rate After Not Participating in Lawsuit
The U.S. Court of Appeals for the Federal Circuit on Jan. 4 affirmed a lower court decision that found an importer of aluminum extrusions from China owes a 374.15% countervailing duty assessment, despite the applicable rate falling precipitously to 7.37% in subsequent litigation. Capella Sales & Services should have joined the court challenge, filed its own lawsuit or requested an administrative review if it wanted to benefit from the lower rate, the appeals court said. It did not, so Capella owes assessments at the cash deposit rate in effect at time of entry, CAFC said.
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According to CAFC, and despite arguments from Capella, the law on how court decisions affect antidumping and countervailing duty assessments is unambiguous. Under 19 USC 1516a(c)(1), entries made after a “Timken” notice in the Federal Register, wherein the Commerce Department announces court-ordered changes to AD/CVD rates, should be liquidated at the amended AD/CVD rate. Entries made before the Timken notice, but covered by a CIT-issued injunction barring liquidation, should also be liquidated at the amended rate. But entries before the Timken notice that are not subject to an injunction should be liquidated at the original rate, CAFC said. Because Capella did not join the lawsuit challenging the original rate, its entries were not covered by an injunction and fell into the latter category, it said.
Capella may also have avoided the high CV rate had it requested an administrative review of the entries, which would have resulted in Commerce suspending liquidation. But even though Commerce conducted administrative reviews covering the relevant period, Capella did not request a review, so its entries were subject to automatic liquidation instructions for all companies not subject to review. Capella’s entries were liquidated based on those instructions before Commerce’s Timken notice. CIT issued the underlying decision in July 2016 (see 1607210031).
Capella argued that Congress did not anticipate such high “punitive” rates at the time it created the Timken scheme, as AD rates were generally lower at the time. But Congress’ intent was clear when it enacted the law, CAFC said. “Congress knew how to except entries from the cash deposit rate calculated in Commerce’s final determination, and did so for entries enjoined by a court decision … and entries following a Timken notice,” it said. “Congress also provided for administrative review of entries if such review is requested.” On the other hand, Congress did not set “some threshold difference between the cash deposit rate and the rate eventually determined by a possible future court decision above which Commerce must apply the latter rate retroactively even to pre-Timken notice entries,” CAFC said.
Capella had entered the extrusions in November 2011 and in March and June 2012, at which point they were subject to the 374.15% “all others” rate set by Commerce in its original CV duty investigation. In the meantime, MacLean-Fogg, joined by other U.S. importers and Chinese exporters, had filed a challenge to the "all others" rate. Decisions over the ensuing years from CIT and the U.S. Court of Appeals for the Federal Circuit forced Commerce to lower the rate first to 137.65% effective Dec. 10, 2012, and then to 7.37% effective Nov. 10, 2015 (see 1511090024).
(Capella Sales & Services v. U.S., CAFC # 2016-2649, 2017-1196, dated 01/04/17, Judges Lourie, O’Malley and Chen)