EAPA Challenges Await Proper Conditions for Court to Hear Constitutional Arguments

Many cases challenging findings of antidumping or countervailing duty evasion under the Enforce and Protect Act include claims that the process has violated an importer's constitutional rights, particularly under the Fifth Amendment. Case after case in the Court of International Trade argues elements of the EAPA process -- from the lack of notice provided to an importer that it's under investigation to the insufficient public summaries of proprietary information in the investigation -- violate importers' due process rights under the U.S. Constitution. However, the circumstances under which these claims may actually be heard by CIT may have yet to come, trade lawyers said.

The right judge and the right fact pattern may do the trick, trade lawyer David Craven told Trade Law Daily. Until those come about, decisions coming out of the court may dance around the constitutional issues, deciding EAPA cases on different grounds.

So far, the closest the court has come to embracing one of the broad constitutional challenges posed by importers under an EAPA investigation came in Royal Brush Manufacturing, Inc. v. U.S. In the case, the court found that CBP failed to properly disclose information to Royal Brush that it relied on to find the importer guilty of evasion (see 2012020050). Even in this case, though, the court stopped short of saying importers should have the same benefits given to parties to AD/CVD proceedings, which include access to all business confidential information.

A more favorable fact pattern and judge selection may be what was standing between Royal Brush and a more broad ruling of unconstitutionality from the court. "I think certain judges are more likely to address [constitutional questions] than others," said Mary Hodgins, partner at Morris Manning. "If we were able to get a clear fact pattern. Some of them are so detailed, and there’s so much fact finding going on with these cases that it’s hard to get a clear fact pattern. I know that [Royal Brush] was the most procedural decision to come out recently, and we’re relying on that in a lot of our appeals now too, but I think it’s just a combination of getting the right fact pattern and the right judge."

Hodgins estimates that it will be at least another year before we hear from CIT on these issues. Tack on another to hear from the U.S. Court of Appeals for the Federal Circuit -- the opinion that truly matters in this case, for the alleged due process violations will continue unabated without it. "We see that Commerce is not going to stop its practice even if there’s been multiple CIT cases against it until they hear from the Federal Circuit, and I assume that Customs is the same," Hodgins said.

In the meantime, all importers can do is focus on remaining compliant with existing regulations and conduct thorough due diligence into their supply chains. "There’s a real need for a statute like this to make sure that people are not evading the duty orders," Hodgins said. "[Importers] should always do their due diligence and really look at their suppliers, make sure they have legitimate businesses in whatever country they say they’re shipping from ... the most responsible importers go and visit the facilities, they make sure their production capacity is what they say they are, they’re a legitimate business and producing the amount they say they can supply. They ask about their suppliers, where their imports are coming from, making sure they know who they’re doing business with. Those are the biggest questions to answer to avoid impropriety and also to just maintain good records."