Corporate officers can’t normally be held liable for their corporations’ negligent misstatements on entry documentation, said the Court of Appeals for the Federal Circuit July 30, reversing a lower court ruling. The Court of International Trade had in 2011 found Harish Shadadpuri liable for criminal penalties under 19 USC 1592 because of his actions as president of Trek Leather, which had admitted gross negligence in its failure to declare assists when valuing merchandise (see 11062115). CAFC said the lower court shouldn’t have, because only the importer of record (in this case Trek) can be held to the reasonable care standard for negligence purposes. To get a Section 592 conviction against a corporate officer, the government either has to “pierce the corporate veil” or allege fraud, CAFC said.
In a tariff classification case on clocks that forecast the weather (or meteorological instruments that tell the time), the Court of Appeals for the Federal Circuit on July 25 voided the judgments of both the lower court and CBP, finding in favor of importer La Crosse Technology. The dispute centered on whether the devices should be classified as clocks, thermometers/barometers/hygrometers, or meteorological instruments. CBP had said they’re all clocks, while the Court of International Trade had classified various models in each of the three categories. La Crosse on appeal argued the devices should all be classified as meteorological instruments because that subheading fully describes them. The appeals court agreed, but for different reasons.
The Court of Appeals for the Federal Circuit rejected a test used by the Commerce Department to determine if items covered by antidumping duty orders, but included in non-subject sets, are subject to AD duties. But while it found fault with the particulars of the test Commerce used to see whether Target’s nails are included under the AD duty order on China, the appeals court reversed a 2012 Court of International Trade ruling that said Commerce wasn’t allowed to perform any test at all on the “mixed media items.” Instead, the appeals court put forward its own test for when this issue arises, both in this Target case and in future cases, and appealed to Commerce to clearly define its mixed media analysis procedures for future cases.
A listing of recent antidumping and countervailing duty messages from the Commerce Department posted to CBP's website July 9, along with the case number(s) and CBP message number, is provided below. The messages are available by searching for the listed CBP message number at addcvd.cbp.gov. (CBP occasionally adds backdated messages without otherwise indicating which message was added. ITT will include a message date in parentheses in such cases.)
A listing of recent antidumping and countervailing duty messages from the Commerce Department posted to CBP's website July 5, along with the case number(s) and CBP message number, is provided below. The messages are available by searching for the listed CBP message number at addcvd.cbp.gov. (CBP occasionally adds backdated messages without otherwise indicating which message was added. ITT will include a message date in parentheses in such cases.)
The Court of Appeals for the Federal Circuit affirmed the dismissal of a challenge to the allocation of 2006 U.S.-Canada Softwood Lumber Agreement funds. The agreement ended a countervailing duty order on softwood lumber from Canada by, in part, requiring Canada to distribute $500 million to the Coalition for Fair Lumber Imports (CFLI). A group of non-CFLI domestic producers said compensating CFLI to the exclusion of other domestic producers is discriminatory, contrary to the underlying law, and improperly delegates distribution authority to the CFLI for funds that should have been distributed by the government. The Court of International Trade dismissed in April 2012 (see 12042048), and CAFC found the lower court was correct July 1. The distribution scheme had a rational basis for discriminating because it was meant to solve a trade dispute the CFLI was heavily involved in, CAFC said. And the underlying law was so broad as to give USTR the discretion to agree to distribution to CFLI. USTR didn’t delegate authority to CFLI to distribute the funds either, because it agreed to the distribution method, CAFC said.
The Court of Appeals for the Federal Circuit affirmed a lower court ruling in favor of the 2008-09 antidumping duty administrative review on laminated woven sacks from China (A-570-916). Shapiro Packaging challenged the Commerce Department’s decision to assign respondent Zibo Aifudi a higher China-wide rate because of its decision to stop participating midway through the review, which meant Commerce couldn’t verify the company’s submissions on independence from government control. But the appeals court on June 24 said no law prohibits Commerce from disregarding information it can’t verify, and affirmed.
The U.S. Court of Appeals for the Federal Circuit upheld the dismissal of a test case on gender and age discrimination by Harmonized Tariff Schedule provisions for footwear and apparel. Rack Room, Skiz Imports, and Forever 21 argued that different duty rates for men’s, women’s and children’s footwear and apparel violate the equal protection clause of the constitution. According to the appeals court ruling, the outcome of 171 lawsuits depended on the result of this test case. As had the Court of International Trade in 2012, CAFC decided the companies failed to demonstrate Congressional intent to discriminate, and so failed to prove a violation of the equal protection clause.
The U.S. Court of Appeals for the Federal Circuit overturned an International Trade Commission decision to end a Section 337 patent investigation of infringement by LG so that the case could go to arbitration with patent holder InterDigital. LG had said it held a license for the patented technology at issue, and the commission found that a plausible basis for arbitration. Both the ITC and LG argued that the appeals court had no jurisdiction to hear the case, because termination for arbitration is not listed as subject to appeal under the governing statute, 19 USC 1337. But the appeals court found that termination of a Section 337 investigation for arbitration is in effect an appealable final determination, even though it isn’t enumerated in the statute. Turning to whether LG had grounds to request arbitration, the appeals court found that the portion of the agreement governing the license on 3G technology had expired, so LG had no right to assert a right to arbitration over the license.
The Commerce Department will take a look at allegations of fraud during the 2008-09 antidumping duty administrative review of frozen warmwater shrimp from China, after the Court of Appeals for the Federal Circuit granted the agency a remand. The case had been before CAFC on appeal from the Court of International Trade’s decision sustaining the 2008-09 final results in March 2012 (see 12040304). In the meantime, Commerce found respondent Hilltop International had committed fraud during the 2010-11 review (see 12083123). The Court of International Trade then expanded a remand of the 2009-10 review to see whether fraud also occurred during that proceeding (see 13011003). In ordering a remand of the 2008-09 final results, CAFC chose to follow the lower court’s lead.