ARC Tells CIT to Axe AD Investigation Due to Former Counsel's Ethics Violations

ARC originally employed Wiley, where Pickard was a partner, to file a petition with the International Trade Commission and Commerce to start AD/CVD investigations on freight rail couplers from China. ARC later withdrew from the petition, and the United Steelworkers union took its place.

While readying the petition, ARC said it confided in Pickard "its legal strategy for prosecuting" AD/CVD investigations against freight rail couplers. The confidences included the company's "decision-making processes" and confidential information "relevant to establishing the scope of the petition and certain key factors critical to establishing that the domestic FRC was being materially injured" by Chinese imports. The motion for judgment said this information included "information regarding the 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 U.S. company M&T and the union standing as the two petitioners.

Mexican imports were included in the petition, despite the fact that the only Mexican imports came from ARC's affiliate ASF-K. ARC alleged at the trade court that Pickard then used this information against the importer in the new petition (see 2311210077). The company's initial suit in the trade court was dismissed for lack of subject-matter jurisdiction (see 2211160057).

Returned to CIT, the importer said it executed an agreement with Pickard that included an advance waiver of potential future conflict, yet the attorney still filed a new petition with the ITC and Commerce targeted at ARC's imports from Mexico. The motion alleged that Pickard "did so for the cynical, self-interested purpose of trying to 'undo' the Commission’s negative injury determination in the 2021-22 investigations by including Mexico in the new investigations."

The importer said American Bar Association and the D.C. bar rules require disqualification of an attorney when four conditions are met -- the party and opposing counsel had a past attorney-client relationship, the interests of the party and the opposing counsel's new client are "adverse to the movant," the matters in the present suit are "substantially related to the matters for which the opposing counsel previously represented the moving party," and the party doesn't consent.

ARC said that this case meets all four and that the "material adversity is just common sense." The importer claimed it was harmed by Pickard's alleged "misuse of its confidential information" because it received a 48.10% dumping margin. Since this conflict of interest "tainted the proceedings, the court must redress Commerce's refusal to disqualify." AD/CVD proceedings are "quasi-adjudicative in nature," meaning Pickard's current clients don't enjoy "an absolute right to counsel of their original choosing where that counsel's conflict of interest threatens the investigations' integrity."

The importer also objected to Commerce's position that it couldn't act on the company's conflict of interest claims administratively. ARC said Commerce isn't an expert in various areas that it's still expected to rule on in "Title VII investigations," and various other federal agencies require attorneys to adhere to ethics rules and "those agencies have established the right to review ethical violations."

The agency's "passing the buck to local Bar authorities leaves Amsted with no adequate remedy," the brief said.

ARC spent the second half of its motion for judgment challenging the factual underpinnings of the AD investigation itself, arguing that the agency's determination that ARC's home market wasn't viable is unsupported by substantial evidence.