DOJ Moves to Drop EAPA Challenge for Lack of Jurisdiction, 'Tortured' Interpretation of Statute

The Court of International Trade should dismiss an antidumping and countervailing duty evasion protest brought by All One God Faith, doing business as Dr. Bronner's Magic Soaps, since the court lacks jurisdiction over the entries, the U.S. defense said on Aug. 2 in a partial motion to dismiss. Since Dr. Bronner's xanthan gum entries have already liquidated and the importer failed to make a timely appeal of its protest of the liquidation, the court has no jurisdiction over the entries, the Department of Justice said (All One God Faith, Inc. et al. v. United States, CIT #20-00164).

CBP found Dr. Bronner's to be evading the antidumping duty order on xanthan gum from China by claiming that its entries were from India. Only four countries make xanthan gum -- Austria, France, the U.S. and China -- making the Dr. Bronner's assertion an impossible one, DOJ said. "Thus, each of the plaintiffs incorrectly represented the origin of the product, and failed to provide CBP with sufficient documentation to establish where the xanthan gum did originate, instead making general assertions that the product should be subject to a 0.0% duty rate," the brief said.

DOJ called out what it believes to be multiple shortcomings in the Dr. Bronner's lawsuit, including the importer's contention that CBP bears the burden to establish the origin of the imported material. In fact, this burden falls on the importer, DOJ said -- a fact that has been routinely held by CIT and the U.S. Court of Appeals for the Federal Circuit. "Dr. Bronner’s attempts to impermissibly shift its burden by placing the onus on CBP to affirmatively establish that the shipments (which it concedes did not, in fact, originate in India) were 'subject merchandise,'" DOJ said. "This tortured reading of the statute fails."

Dr. Bronner's said in its motion for judgment that it is likely defendant-intervenor CP Kelco is "not subject to material injury by oilfield xanthan produced in China." Due to this, CBP should have completed a "changed circumstances" review to find that the AD order should be altered to omit the Chinese xanthan gum imports by Dr. Bronner's. However, Commerce, not CBP, conducts changed circumstnaces reviews, DOJ said. "Thus, even if the remaining plaintiffs were interested parties making allegations sufficient to merit a changed circumstance review (which they are not), their argument nevertheless fails because they never presented their request to the agency with authority to consider it," the brief said.

"Indeed, there is no doubt that the remaining plaintiffs were aware that Commerce, and not CBP, would be responsible for such a review, as their submissions asked CBP 'to refer the matter to [Commerce] to make a changed circumstances determination. ... Notwithstanding this understanding, the remaining plaintiffs seem to believe that simply stating in passing in administrative filings to CBP that it believes another agency should undertake a changed circumstances review is sufficient to initiate such a review."