Canadian Lumber Exporter Urges CAFC to Reconsider Rejection of Suit on AD Cash Deposit Rate
Canadian lumber exporter J.D. Irving urged the U.S. Court of Appeals for the Federal Circuit to reconsider its rejection of the company's attempt to challenge the denial of an antidumping duty cash deposit rate under Section 1581(i), the Court of International Trade's "residual" jurisdiction. Filing a petition for panel rehearing and rehearing en banc, J.D. Irving said the appellate court's decision is "grounded on a fundamental misunderstanding of the law and fact" related to its claim (J.D. Irving v. United States, Fed. Cir. # 23-1652).
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J.D. Irving said review under Section 1581(c) was improper, since neither review under a USMCA panel nor an AD review "can remedy an unlawfully assigned AD cash deposit rate."
The company was a respondent in the 2018 and 2019 reviews on Canadian lumber but not in the 2020 review. At the start of the 2020 review, Commerce told CBP to liquidate J.D. Irving's 2020 entries at the 1.57% rate calculated in the 2018 review, since the 2019 review's results weren't available yet. Before CBP liquidated the entries, the 2019 review ended and J.D. Irving's rate increased to 11.59%. Commerce then told CBP to liquidate the exporter's entries at the higher rate, which J.D. Irving challenged, arguing that the earlier instructions shouldn't have been revocable.
The trade court dismissed the case, finding that it could seek relief before a USMCA binational panel given that other respondents in the 2019 review asked for the establishment of a binational panel, barring CIT review (see 2301250060). The Federal Circuit affirmed, ruling that the true nature of the suit challenged the 2019 rate and that relief could be sought before a USMCA panel or AD review (see 2410100042).
Seeking a rehearing, J.D. Irving now says CAFC got it wrong. A remand order from a USMCA panel can affect the AD rate applied to the entries covered by the review, but it can't affect the AD cash deposit rate applied to entries made "after conclusion of the review," the brief said. The panels don't have the injunctive power needed to force Commerce to replace a faulty AD cash deposit rate for the prior import entries, the exporter argued.
An AD review is also inadequate, since it only concerns the AD cash deposit rate for entries covered by the review but not a prior AD deposit rate "unlawfully assigned" on prior entries. Without an injunction "requiring Commerce to reinstate retroactively a lawful AD cash deposit rate and refund excess cash deposits paid at the unlawful rate, Commerce would escape any accountability for its assignment of an unlawful AD deposit rate," the brief said.
The Federal Circuit said that if the USMCA panel invalidates the 2019 review, Commerce wouldn't assess J.D. Irving's suspended entries at the final 11.59% rate, and the company would get appropriate refunds for deposits made at the higher rate. J.D. Irving said this rationale highlights the court's error. Contrary to this reasoning, the exporter's action doesn't concern imports entered during the 2019 review period, the brief said.
Instead, J.D. Irving argued that it's challenging Commerce's assignment of an unlawful AD cash deposit rate to its entries made "as of the conclusions" of the review's final results.
In addition, the company argued that the Federal Circuit "entirely overlooked that JDI seeks not only retroactive relief, but also prospective relief: a binding order to prevent Commerce from continuing to apply an unlawful policy -- prioritizing outdated AD deposit rates over current AD deposit rates established by operation of law -- going forward." This type of relief can't be effectuated by USMCA panels or AD reviews, the brief said.