CIT Says Jiaxing Hoshine Has Constitutional, Statutory Standing to Challenge Refusal to Modify WRO

The WRO was issued in 2021 on the grounds that Hoshine and its subsidiaries make silica-based products with forced labor. Jiaxing Hoshine brought the case to challenge the issuance of the WRO and CBP's refusal to modify the order to specifically exclude the company (see 2402210045). The U.S. moved to toss the suit, claiming Jiaxing Hoshine had neither constitutional nor statutory standing to sue (see 2408260044).

Regarding the company's constitutional standing, the government argued that Jiaxing Hoshine didn't establish sufficient facts to show injury in fact and that, even if it suffered this injury, such harm isn't traceable to the government's actions but rather is the result of choices made by third parties. The U.S. also said the trade court can't redress any harm suffered by the company.

Kelly rejected the government's claims, initially finding that Jiaxing Hoshine had alleged enough facts to show injury in fact. The company alleged it lost money from customers, will imminently lose more "should it be denied relief" and suffered both reputational and procedural harm. The court said the company sufficiently quantified that it has or will suffer these harms in confidential documents submitted to the court.

Regarding the reputational harm suffered by the company, the court said Jiaxing Hoshine "adequately alleged" that it "has been the subject of disparaging accusations and damaging rumors" that have harmed its business. Kelly also said the company adequately alleged procedural harms, which include the issuance of and refusal to modify the WRO were ecisions made "without an evidentiary basis or reasoned justification."

The court then said the government appeared to have conceded "traceability," since it explained that the publication of a WRO notifies parties that Hoshine's exports will be detained." However, the U.S. said "other economic and market conditions" may fully account for third-parties' decisions not to do business with Jiaxing Hoshine. Kelly said that while this "causal chain is more difficult to establish" when it involves third parties, this chain can still be alleged "if those third-party actions are predictable," as is the case when CBP issues a WRO.

Kelly said the most "problematic" element for Jiaxing Hoshine is redressability, since the company can't get redress for the business it lost due to the issuance of and failure to modify the WRO. If this was the only issue alleged, the case would be dismissed, but since Jiaxing Hoshine also alleged procedural harms, the harms can be redressed by the trade court, the court held.

Regarding statutory standing, the U.S. had argued Jiaxing Hoshine isn't in the "zone of interest" of Section 307, the statute banning the import of goods made with forced labor, since the law is only meant to protect domestic producers, workers and those regulated by the statute. Kelly clarified that in an Administrative Procedure Act context, "courts examine whether the plaintiff is regulated by the statute.”

The court ultimately found the company to fall under the law's zone of interest, since its "conduct is being regulated by the Hoshine WRO." As a result of the order, "its goods are embargoed unless it obtains a modification of the Hoshine WRO, CBP revokes the Hoshine WRO, or an importer successfully establishes that the goods are not manufactured with forced labor," the court said. That the law only regulates importers "is of no moment." And while the Section 307 scheme allows companies to get relief on an "import-by-import basis," the statute doesn't explicitly call for this scheme and explicitly "regulates exporters," providing them with statutory standing, the court said.

Where Kelly did side with the U.S. was on the timeliness of Jiaxing Hoshine's challenge to the issuance of the WRO. Citing the Supreme Court's recent decision in Corner Post v. Bd. Of Governors of Fed. Rsr. Sys., the company challenged the issuance of the order past the statute of limitations, arguing that the claim is timely, since the statute of limitations for APA claims doesn't begin "until a plaintiff is concretely injured by final agency action."

The court said that despite Jiaxing Hoshine's claim that its right to challenge the WRO "accrued when CBP rejected its modification petition," the right actually accrued when the WRO was issued. The company's claim of reputational harm "contradicts its position that it was not really harmed until its modification petition was rejected," and the company's "modification efforts" show that "it knew it was subject to, and was being harmed by, the Hoshine WRO," the court noted.

And while Jiaxing Hoshine argues that the statute of limitations should be "tolled" for equitable reasons, since the company was discussing modification with CBP for the entire statute of limitations period, the court refused to find that the agency engaged in "trickery." The company's reliance on discussions with CBP "effectively concedes that it knew its legal position and it alleges no conduct by Defendants that could be considered trickery or inducement."

(Hoshine Silicon (Jia Xing) Industry Co. v. United States, Slip Op. 25-42, CIT # 24-00048, dated 04/16/25; Judge: Claire Kelly; Attorneys: Craig Lewis of Hogan Lovells for plaintiff Hoshine Silicon (Jia Xing) Industry; Monica Triana for defendant U.S. government)