Government's Action to Collect AD Duties 11 Years Post-Entry 'Defies Logic,' Surety Argues

The government's lawsuit seeking to collect antidumping duties on imports of canned mushrooms from China brought in between 2001 and 2002 suffers from serious legal shortcomings, surety American Home Assurance Company (AHAC) said in a May 14 reply brief in the Court of International Trade. Arguing that the government's claims are precluded under res judicataand stare decisis , barred under the statute of limitations and based on untimely and legally void reliquidations, the surety wants the court to rule on the case and grant it the costs associated with litigation. "It defies logic that bills issued ten (10) years later for the same set of entries should be more recoverable than the bills issued in a far shorter time frame," the surety said.

Finding itself in court again in a second case on unpaid antidumping duties on different entries of the same product in the same period of review as the first, AHAC says the government is spinning a new theory: that sureties have a unique liability to pay the unpaid duties and that the government did not have a chance to litigate this theory in either CIT or the U.S. Court of Appeals for the Federal Circuit. Strongly disagreeing with that premise, AHAC said that not only did the government have ample opportunity to argue its new theory but prior rulings on the exact issue precludes any further litigation. "What the Government has failed to do is provide any explanation as to why these bills were not issued sooner and/or included in the prior court action," the surety said.

Central to whether the government may collect the duties is the question of when the government's right of action accrues against the deemed liquidation of the entries. AHAC argues it begins precisely then, at the moment of deemed liquidation. However, the government says its issuance of a bill to the surety constitutes a reliquidation of the entries. AHAC says that, in a previous Federal Circuit case involving Cherry Hill Textiles, "the Court specifically found that the deemed liquidation at issue was final. In cases in which a liquidation has become final, the government cannot seek to recover additional duties simply by making a new liquidation of the original entry," AHAC said. Since the statute of limitations runs from deemed liquidation, the government's attempt to collect the duties is well past the six-year deadline set out by the law.

AHAC also holds that res judicata-- the fact that the same set of circumstances were already litigated -- and stare decisis prevent the litigation from continuing. To prove res judicata, AHAC must prove the parties are identical, the first suit proceeded to a final judgment on the merits and that the second claim is based on the same set of transactional facts. Since the underlying facts in the 2016 decision and this case "constitute a series of connected transactions," the cases are related and are precluded from further litigation, AHAC said.