Commerce Doesn't Fail to Act When Denying Section 232 Exclusion Requests, CIT Finds
The Commerce Department doesn't fail to act when it denies a Section 232 steel and aluminum tariff exclusion request, the Court of International Trade held. Instead, the denial is a "decision" and "not an action unlawfully withheld or unreasonably delayed," Judge Stephen Vaden said, dismissing a host of claims from importer Prysmian Cables and Systems USA against Commerce's rejection of its exclusion requests.
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In addition, the judge held that the statute of limitations to challenge Section 232 exclusion denials is two years, not six, as Prysmian claimed. Vaden rejected the importer's claim that the continuing violation doctrine warrants an extended statute of limitations, as well as the company's claim that the Administrative Procedure Act's six-year statute of limitations applies, as opposed to the two-year limit imposed by 28 U.S.C. 2636(i).
From 2018 to 2021, Prysmian submitted 17 exclusion requests on aluminum rods from Canada, Bahrain, Russia, the United Arab Emirates and Argentina. Commerce denied all 17, with the first denial coming in 2019.
Challenging the denials at CIT, the importer argued that Commerce failed to act, in violation of 5 U.S.C. 706(1), since it didn't "perform three required actions for denials." Prysmian said the agency failed to apply mandatory criteria to the facts the company presented, failed to prepare a memo "responsive" to the exclusion, and failed to tell CBP of Prysmian's entitlement to an exclusion.
The court dismissed the claims, finding that Commerce's decision to deny an exclusion is an act and that the company's claims should have been made under Section 706(2). The Supreme Court has held that a Section 706(1) claim can only proceed where a party claims that an agency "failed to take a discrete agency action that it is required to take," Vaden noted. Prysmian only "takes issue with how Commerce" made its decision, not with the fact that the agency made a decision.
Regarding the company's remaining Section 706(2) claims, Prysmian said that a six-year statute of limitations should apply due to the continuing violation doctrine. The doctrine applies when the claim is "inherently susceptible to being broken down into a series of independent and distinct events or wrongs, each having its own associated damages." The doctrine can't apply when the claim is based on a "single distinct event."
In rejecting Prysmian's invocation of the doctrine, Vaden rested on two cases: Pat Huval Rest. & Oyster Bar v. U.S., decided by CIT in 2008, and Ocean Duke Corp. v. U.S., decided by the U.S. Court of Appeals for the Federal Circuit in 2011.
In Pat Huval, the trade court said the failure to distribute proceeds from antidumping and countervailing duty enforcement action to a restaurant fell under the continuing violation doctrine, since the government engaged in impermissible viewpoint discrimination and payments were made annually. As a result, the "unconstitutional practice created a new cause of action every time payments issued."
In Ocean Duke, CAFC said there was no continuing violation committed by CBP through its imposition of unlawful enhanced entry bond requirements for shrimp importers subject to new AD orders. The court said all the injuries suffered by the importer originated from CBP's decision to require the improper to post bonds under the unlawful requirements. At that point, "all events necessary to state the claim" had occurred.
In the present case, Vaden said there was no continuing violation, since "each exclusion denial was 'a single distinct event.'" All the facts needed to state a claim were "present no later than the dates on which Commerce denied each of Prysmian’s exclusion requests," the court said. There's no annual payment scheme like in Pat Huval, and once Commerce denied the exclusion requests, "there was nothing more for it to do," the judge said, likening the matter to Ocean Duke.
Prysmian alternatively argued that since it brought its case under Section 1581(i), the court's "residual jurisdiction," the standard of review under this section requires the trade court to review the matter as laid out in Section 706. Since, under this section, the court must use the statute of limitations generally used in the Administrative Procedure Act, the court must use the six-year statute of limitations.
Dubbing the argument "creative," Vaden disagreed, finding that the claim "runs aground on the shoals of the statute's text." 28 U.S.C. 2636(i) says that actions taken under Section 1581(i) are barred unless brought within two years after the "cause of action first accrues." This law applies and subjects the importer's claims to the two-year statute of limitations, the decision said.
The court also engaged in an analysis provided for last year by the Supreme Court in its Corner Post v. Bd. of Governors of the Fed. Rsrv. Sys. decision, which said that the APA's general statute of limitations applies "unless the timing provision of a more specific statute displaces it." Since with Section 2636(i) a more specific time limit applies, the general six-year APA limit doesn't.
(Prysmian Cables and Systems USA v. United States, Slip Op. 25-9, CIT # 24-00101, dated 01/22/24; Judge: Stephen Vaden; Attorneys: Brad Keeton of Frost Brown for plaintiff Prysmian Cables and Systems USA; Kyle Beckrich for defendant U.S. government)