Rulings, remedies and court proceedings for customs and trade professionals

ARC Brings Conflict-of-Interest Suit Against Former Counsel in AD/CVD Cases to CIT

Importer Amsted Rail Co. and its Mexican maquiladora affiliate ASF-K Mexico returned a conflict of interest suit against their former counsel, Buchanan Ingersoll partner Daniel Pickard to the Court of International Trade. Filing another complaint at the trade court after previous claims against the Buchanan partner fell short for jurisdictional reasons, ARC said Pickard "betrayed" the company by using its information against it in an injury petition on freight rail couplers from Mexico and China (Amsted Rail Co. v. U.S., CIT # 23-00242).

ARC originally employed Wiley, where Pickard was a partner, to help it, along with domestic producer M&T, file a petition with the International Trade Commission and the Commerce Department to start antidumping and countervailing duty investigations on freight rail couplers from China. ARC later withdrew from the petition, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, took its place.

While readying the petition, ARC said it confided in Pickard "its legal strategy for prosecuting" the trade investigations, "competitive decision-making processes, and extensive business proprietary information relevant to establishing the scope of domestic like product, the domestic industry, and the conditions of competition." After this petition failed, Pickard left Wiley for Buchanan Ingersoll, and filed a petition to start another injury investigation on the freight rail couplers, this time including Mexican imports as well as Chinese ones, with M&T and the union standing as the two petitioners.

Mexican imports were included in the petition, despite that the only Mexican imports came from ARC's affiliate ASF-K, a maquiladora factory and fellow plaintiff in the court action, the complaint said. ARC alleged Pickard then used this information against the importer in the new petition. The importer said the information ARC provided Pickard was "extremely confidential" and related to the business' operations in Mexico, which was the focus of the new petition.

ARC's initial suit in the trade court was dismissed for lack of subject-matter jurisdiction. The court said that while it does have the jurisdiction to review the ITC's decision to grant Pickard and Buchanan access to confidential information in the injury proceeding, it doesn't have this jurisdiction under Section 1581(i), the court's "residual" jurisdiction (see 2211160057). The judge left the door open for the plaintiffs to refile their case under Section 1581(c) once the claim became "ripe."

ARC walked through that door with the present suit, claiming that Pickard "betrayed" the company "for the cynical, self-interested purpose of trying to 'undo' the Commission's negative injury determination in the Predecessor Investigations by including Mexico in the Investigation." At Commerce, the importer asked for Pickard to be disqualified, along with Buchanan and other staff, for an "irreconcilable conflict of interest."

The complaint said Pickard violated Rule 1.10(a) of the ABA Model Rules, which says that when a lawyer becomes linked with a firm, "the firm may not knowingly represent a person in a matter which is the same as, or substantially related to, a matter with respect to which the lawyer had previously represented a client whose interests are materially adverse to that person and about whom the lawyer has in fact acquired information." The trade court should reverse Commerce's refusal to disqualify Pickard, as well as an accountant who worked on the case and also moved with Pickard to Buchanan and the firm itself in the Mexico investigation, the complaint said. Additionally, the court should "terminate the antidumping duty order that" Commerce recently imposed.

The complaint also disputed Commerce's scope determination that found that freight rail couplers attached to railcars at ARC's maquiladora factory in Mexico then shipped into the U.S. as part of the railcar are subject goods.

Another count in the suit concerns Commerce's multinational corporation special rule, which determines normal value by comparing prices of goods sold by the subject producer in a third-country market with prices of goods that a producer's affiliate sold in the affiliate's home market. While Commerce said this rule doesn't apply, the brief said Commerce's practice is "capable of repetition, yet evading review," and should be reviewed by the court. Petitioners will otherwise just allege that the rule applies if the petitioner can concoct a constructed value and "avoid having to obtain any information on actual prices of the affiliate third-country producer for merchandise the affiliated producer sold in its own home market," ARC said.