US Says Exporters Not Within Section 307's 'Zone of Interest' for Standing Purposes
Exporter Hoshine Silicon (Jia Xiang) Industry Co. has no statutory or constitutional standing to challenge CBP's issuance of or refusal to modify the withhold release order on silica-based products made by its parent company Hoshine Silicon or its subsidiaries, the U.S. argued. Filing a reply brief at the Court of International Trade on Nov. 8, the government said Hoshine offered an incorrect "zone of interests" analysis to bolster its claim of statutory standing (Hoshine Silicon (Jia Xing) Industry Co. v. United States, CIT # 24-00048).
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The U.S. initially moved to dismiss the case (see 2408260044), arguing that Hoshine isn't within the "zone of interest" of the applicable statute -- Section 307 of the Trade Act of 1930, which prohibits the import of goods made with forced labor. In response, Hoshine said this analysis only requires the exporter's interests to be within the zone of interests to be protected or regulated by the law (see 2410210054).
The government challenged this analysis, arguing that Section 307 doesn't regulate foreign manufacturers but instead explicitly bars the importation of goods made with forced labor, limiting its reach to "importers of the suspected goods." Congress meant for the statute to protect domestic manufacturers and workers from unfair trade caused by the importation of cheaper goods made with forced labor, the brief said.
Hoshine said it's within the zone of interest because its interests as a foreign producer align with the statute's, since it wants to ensure lawful trade. The U.S. said this claim fails, since the exporter failed to cite any authority expanding the zone-of-interest test "beyond those that the statute was intended to protect or regulate to include those whose interests somehow 'align' with the statute," the brief said. This test would "unduly expand the scope of statutory standing."
There's also no basis to say that Hoshine's interests are aligned with the statute's, since the WRO was imposed on Hoshine due to a reasonable belief that the company and its subsidiaries are shipping goods made with forced labor, the brief said.
The U.S. also claimed that the first count of Hoshine's case, challenging the issuance of the WRO, is untimely since it was brought over two years since the WRO was issued. The exporter argued that it's inequitable to dismiss this claim, given that CBP repeatedly encouraged the company to petition to modify the WRO to allow the agency to exclude a specific supply chain from the embargo. In responding to the petition, the agency then adopted an all-or-nothing approach to the WRO.
In response, the government said that parties have the option to request a WRO modification and that CBP didn't "induce" or "trick" Hoshine into "pursuing that avenue here," making the company's equitable claims "baseless." The U.S. also took issue with Hoshine's challenges to both the issuance of the WRO and the refusal to modify the WRO, claiming that Hoshine can't "have it both ways." It can't claim harm from the WRO for establishing injury-in-fact and also from the modification request denial for "statute of limitations purposes," the brief said.
The government also replied to Hoshine's claims that it suffered sufficient injury to establish constitutional standing, arguing that the exporter can't claim harm under the "competitor standing doctrine." The trade court has previously used this doctrine to grant standing to companies that were likely to suffer economic injury due to benefits granted to their competitors via AD/CVD or safeguard duties.
The "absence of any demonstrated benefit to an existing competitor or expansion of market participants resulting from CBP’s action" here bars this claim, the brief said.