CIT Rejects Wheel Importer's Bid to Amend Preliminary Injunction in Evasion Case
The Court of International Trade on Dec. 19 denied importer Lionshead Specialty Tire and Wheel's bid to amend a preliminary injunction in an antidumping duty and countervailing duty evasion case to not enjoin the liquidation of steel trailer wheels that the Commerce Department has found to fall outside the scope of the relevant AD/CVD orders. Judge Gary Katzmann held that Lionshead failed to "demonstrate changed circumstances that warrant the modification of the preliminary injunction."
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Commerce made a scope ruling on whether three types of wheels -- Methods A, B and C -- made by Asia Wheel Co. are excluded from the AD/CVD orders on certain steel trailer wheels. The agency said Method B wheels, which are made of Thai-origin rims and discs, are excluded from the orders, though the agency established a certification regime for Model B wheels to address possible circumvention.
In its suit against CBP's finding that Lionshead evaded the AD/CVD orders, the importer moved to amend the trade court's preliminary injunction on the liquidation of the affected tire entries to allow for the liquidation of Method B wheels (see 2411060023). Petitioner Dexstar Wheel Division of Americana Development opposed the bid on the grounds that Lionshead failed to show that its entries are Method B wheels and that the amendment would alter a CBP decision.
Katzmann sided with Dexstar, finding that Lionshead failed to show any justification for amending the preliminary injunction. While the importer said the inequity in continuing the suspension of liquidation on the Method B wheels stems from the impact of the unliquidated entries on its customs bond, the judge said this "does not explain how this (actual or potential) liability represents a changed circumstance."
The debt instruments Lionshead refers to were in place before the injunction, the court noted. "If the existence of this debt is the circumstance to which Lionshead ascribes inequity, it is a continued circumstance -- not a changed one," the opinion said.
Katzmann said Lionshead also failed to show that its amendment would "prevent inequity," since the preliminary injunction doesn't enjoin the liquidation of Method B wheel entries. Instead, it enjoins CBP from liquidating wheels from Thailand that were subject to CBP's final decision in the evasion proceeding. CBP's evasion decision, "in turn, explicitly" says the wheels are covered merchandise if they are Method A or C wheels, not Method B wheels.
"If Lionshead has indeed made entries of Method B wheels, no amendment is needed to secure their liquidation," the court said.
While the government originally consented to the amendment, its revocation of that consent doesn't mean it has a different interpretation of the injunction, but rather it has "new appreciation that CBP had already determined that no entries contained Method B wheels," the decision said. As a result, the amendment wouldn't resolve any inequity, since "the existing preliminary injunction does not enjoin the liquidation of Method B wheels," Katzmann held.
The judge added that the amendment also would "have the practical effect of reversing CBP’s determination that none of Lionshead’s wheels are Method B wheels." CBP said Lionshead had no Method B wheels since it didn't submit certifications or other evidence in support of their requests for review that their goods were Method B wheels.
(Dexter Distribution Group v. United States, Slip Op. 24-146, CIT Consol. # 24-00019, dated 12/19/24, Judge: Gary Katzmann; Attorneys: Nancy Noonan of ArentFox Schiff for plaintiff Dexter Distribution Group; Robert Williams of Clark Hill for consolidated plaintiff Lionshead Specialty Tire and Wheel; Jordan Kahn of Grunfeld Desiderio for consolidated plaintiff Trailstar; Monica Triana for defendant U.S. government; Nicholas Birch of Schagrin Associates for defendant-intervenor Dexstar Wheel Division of Americana Development)