CIT Says CBP Need Not Verify Errors Found in Submissions in EAPA Cases, Upholds Evasion Finding

Vaden added that CBP was not required to verify the errors and omissions found in the company's submissions, finding that while the statute lets the agency verify that information, "it does not mandate verification in all cases." Where a company submits incomplete information, "failing to 'verify' that evidence is not an abuse of the agency's discretion," the judge said.

"We are pleased by the Court’s decision," Timothy Brighbill and Laura El-Sabaawi, counsel for petitioner MasterBrand Cabinets, said in an email. "The Enforce and Protect Act has quickly become a valuable tool for addressing evasion of antidumping and countervailing duties, so it is significant that the Court reviewed and upheld CBP’s analysis and reasoning on all of the EAPA issues under appeal.”

Skyview claimed that in the Enforce and Protect Act proceeding, CBP illegally shifted the burden of proof on the respondent by failing to verify the information allegedly replete with errors, requiring it to disprove the allegations against it. Vaden said no such burden was shifted since the "substantial evidence standard continued to govern." The judge said that the agency, after reviewing all the evidence and making various attempts to flesh out the record by requesting missing information from Skyview, "found that substantial evidence supported the evasion allegations."

The importer claimed that in the investigation, CBP impermissibly relied on "hearsay" evidence in the form of a report submitted by a third-party investigator who was paid by petitioner MasterBrand. Skyview said the report was clearly biased on the petitioner's behalf, while the government said that the report's allegations were corroborated by "foreign market research" carried out by non-party entities.

Vaden said that "[f]or better or worse, the Federal Rules of Evidence," which would bar the consideration of hearsay, "do not govern administrative adjudications." As a result, the judge noted that it is "long established that agencies may consider hearsay and that" it can be treated as substantial evidence so long as the circumstances lend it credence to a reasonable mind. "Because admission of hearsay evidence is permitted in administrative proceedings and Customs adequately explained why it considered the challenged evidence credible, substantial evidence supports its determination," the opinion said.

In the case, Skyview also argued that CBP violated its due process rights by not giving it access to the business confidential information in the proceeding, echoing the complaints of many EAPA challengers. Skyview said CBP failed to share photographs and videos of Malaysian manufacturer Rowenda Kitchen's facility. Vaden ruled that Skyview failed to show that the agency action inhibited the company's ability to present its case or respond to evidence being used against it. CBP provided adequate summaries of the confidential information and described the evidence "with enough specificity" that the company "was put on notice and able to offer counterevidence," the opinion said.

During the investigation, CBP decided to use adverse inferences against Rowenda Kitchen for its failure to respond to various requests for information. Skyview claimed that it could not be punished for another company's failure to cooperate. Vaden said that the statute "offers clear instruction" in this case, permitting CBP to use adverse inferences against a non-cooperating party "without regard to whether another person involved in the same transaction or transactions under examination has provided the information sought."

The judge also sided with the government regarding Skyview's challenge to CBP's alleged failure to confer with the Commerce Department on whether the goods were in scope. The statute compels CBP to reach out to Commerce only when there is a dispute on whether the goods are in scope. "Here, there is no dispute about whether the wooden vanities and cabinets at issue are of the type that would be subject to the antidumping and countervailing duty orders," Vaden said, noting that the only issue is the country of origin of the goods.

(Skyview Cabinet USA v. United States, Slip Op. 23-91, CIT #22-00080, dated 06/20/23, Judge Stephen Vaden. Attorneys: Kyl Kirby for plaintiff Skyview Cabinet; Ioana Cristei for defendant U.S. government; Timothy Brightbill of Wiley Rein for defendant-intervenor MasterBrand Cabinets)