Japanese Exporter Seeks Court Mediation Over Alleged 'Grossly Inflated' Assessment of AD Duties
Japanese exporter Nagase & Co.'s antidumping duty case is an "excellent candidate for resolution via mediation," it told the Court of International Trade in a March 4 motion. Nagase's challenges the Commerce Department's calculation of its cost of production and an alleged error in the assessment rate in Commerce's liquidation instructions to CBP under the court's "residual" jurisdiction (Nagase & Co. v. United States, CIT #21-00574).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Nagase said court-annexed mediation satisfies the four criteria established by the U.S. Court of Appeals for the Federal Circuit that are to be considered when setting up annexation. Of these, Nagase said that annexation is a path that can enhance the court's disposition of the case while also comporting with procedural fairness.
The case contests the final results in the first administrative review of the antidumping duty order on glycine from Japan. Nagase, along with its affiliated producer Yuki Gosei Kogyo Co., served as one mandatory respondent in the review. Nagase challenged Commerce's final determination in the review that the exporter dumped glycine into the U.S. market at a rate of 27.71%.
In the review, Commerce included Nagase's R&D expenses for goods other than glycine in its G&A expense ratio, and Commerce relied only on YGK's accounting practices from before the period of review -- practices that Nagase said have since changed (see 2111290029). Doing so violated the law because it made a factual finding that is unsupported by record evidence and ran contrary to the agency's past practice of excluding R&D expenses for non-subject merchandise, Nagase said. The exporter also said that Commerce "inadvertently duplicated and reported" the incorrect U.S. duty amounts for Nagase's constructed export price sales, resulting in a "grossly inflated" assessment rate.
Nagase hopes mediation will resolve the issue of Commerce's liquidation instructions, although both the U.S. and defendant-intervenor GEO Specialty Chemicals refrained from joining in the motion. The issue of the "grossly inflated" duty assessment raises "two conflicting principles governing judicial review," Nagase said. One principle shoots for fairness while the other reaches for finality of agency determinations. While Nagase said that "the former far outweighs the latter," mediation could "obviate the entire effort needed to balance such fundamental principles over an easily correctable error."
"Moreover, it is possible that correction of [assessment] error could lead to an agreement to dismiss the remaining Counts," the brief said. "Thus, this lawsuit involves a straightforward situation in which mediation could lead to a prompt and efficient resolution of the entire dispute, through negotiations among the parties that would 'broaden resolution options,' in the language of the Court’s Guidelines. In this way, court-annexed mediation would preserve the resources of the Court and the parties."