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US Fights Off Importer's Claim for Attorney's Fees in Sawblades EAPA Case

The Court of International Trade should not grant improper Diamond Tools Technology's application for attorney fees under the Equal Access to Justice Act since the government's position in an Enforce and Protect Act investigation was "substantially justified" and the case presented a "matter of first impression and a novel issue," the U.S. argued in a Nov. 27 reply brief (Diamond Tools Technology v. United States, CIT # 20-00060).

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Even if not, the Equal Access to Justice Act's provision on "special circumstances" also renders an attorney fee award "unjust" since the interpretation of the EAPA provision at issue in the case was a matter of first impression, the government argued. DTT's misrepresentations of itself as an Illinois limited liability company and its submissions containing misleading documents also points against the award, the brief said.

The trade court in August sustained CBP's remand results finding that DTT didn't evade the antidumping duty order on diamond sawblades from China. The remand results saw the agency reverse its evasion finding on DTT's shipments of diamond sawblades assembled in Thailand but made with Chinese cores and segments before Dec. 1, 2017 (see 2307310021).

CIT previously said the pre-Dec. 1, 2017, entries were consistent with the Commerce Department's past interpretation of the AD order's scope in the agency's issues and decision memorandum issued as part of the AD investigation, which said Commerce finds a sawblade's country of origin to be the place where the segments and cores are attached to make a finished diamond sawblade. Since there was no doubt about the meaning of the scope at the time of the imports, DTT didn't make a "material and false statement," CBP said on remand.

In its application for attorney's fees, DTT argued the U.S. position was not justified since CBP found that the importer engaged in evasion though it complied with the "clear standard" laid out in Commerce's scope ruling and because CBP failed to comply with the court's first remand order. The U.S. said in reply that while the trade court "ultimately positioned CBP to declare that DTT didn't make a material false statement," the government "reasonably interpreted the material-false-statement element, in the absence of any precedent, as being governed by Commerce's current determination regarding the scope of the AD order."

In addition, the issue of DTT's reliance on the issues and decision memorandum despite the EAPA statutory scheme was a "novel" one, as the importer concedes, the brief said. "Binding precedent forecloses a finding that the Government was not substantially justified when presented, as here, with matters of first impression or novel issues. This case presents both," the U.S. said.

Even if the court finds the government's position wasn't justified, the statute bars collection of attorney's fees, the U.S. claimed. DTT "failed to establish that it is entitled to its actual fees based on a 'special factor' because this case did not require specialized customs law skills." Additionally, the importer may not lay claim to "enhanced fees" under the "Adjusted Laffey Matrix" since the matrix does not apply to cases where the hourly rate is limited by statute.

DTT also failed to correctly set the amount of paralegal fees under the statute and may not seek attorney fees related to its "unsuccessful claims," nor may it seek fees for "excessive, irrelevant, vague, and duplicative time entries," the brief said. The company's billing statements show an "excessive number of hours and an excessive reliance on senior attorneys for briefing and preparation for oral argument," the government noted. As a result, the court should "exclude from the fee calculation 'hours that were not 'reasonably expended,'" the brief said.

For instance, the 153.8 billed hours and 139.97 billed hours from multiple partners and senior attorneys for preparing the motion for judgment and reply in support of the motion for judgment, respectively, are unreasonable, the government said.