Importer Failed to Exhaust Administrative Remedies Over AD Remand Results, DOJ Tells CAFC

The U.S. Court of Appeals for the Federal Circuit should find that pencil importer Prime Time Commerce did not exhaust its administrative remedies by failing to comment on the Commerce Department's remand results in the Court of International Trade, the Department of Justice told the appellate court. Despite its five attempts to obtain “gap-filling” information necessary to determine the correct antidumping rate in an administrative review, Prime Time did not comment on the case's remand results, meaning the importer stands in violation of the exhaustion doctrine that precludes judicial review, DOJ said in its reply brief (Prime Time Commerce, LLC v. U.S., Fed. Cir. #21-1783).

The spat is over Commerce's conduct in the 2015-16 administrative review of the antidumping duty order on cased pencils from China in which Ningbo Homey was selected as the sole individually examined respondent. Prime Time sought to submit information it thought would aid Ningbo Homey's questionnaire responses in the review, only to be denied by Commerce. Ningbo Homey failed to answer Commerce's responses, leading the agency to impose the China-wide rate on the exporter's pencils.

Prime Time appealed this decision to CIT, which found that Commerce's rejection of Prime Time's questionnaire responses and decision to not calculate an importer-specific rate for Ningbo Homey were unsupported. Commerce then accepted Prime Time's information but continued to reject an importer-specific rate for the Chinese company. Only after the final remand did Prime Time challenge Commerce's continued refusal to calculate the importer-specific rate.

The court, though, said Prime Time's argument that Commerce insufficiently explained its practices was barred because the company did not initially raise the arguments before Commerce. Prime Time cannot now argue that its past attempts to get Commerce to reconsider its questionnaire responses rendered any further attempt at reconsideration “futile” simply because the circumstances changed, CIT said (see 2105260054).

DOJ backed this contention in the Federal Circuit, holding that Prime Time failed to exhaust its administrative remedies and that this exhaustion doctrine applies to remand proceedings. “Even if Prime Time assumes that, based on its prior submissions or experience, Commerce would have rejected its arguments, this excuse does not justify the failure to exhaust its remedies,” DOJ said. “And because Commerce is barred from engaging in post hoc rationalizations, if the trial court were to permit parties to bypass the agency and seek judicial review in the first instance, the agency has no ability to defend its action.”

A futility exception to the exhaustion requirement finds that a company does not need to exhaust administrative options if it would need to “go through obviously useless motions in order to preserve their rights.” DOJ argued that Prime Time's case does not qualify for such an exception since the importer's five requests for the gap-filling information occurred before Commerce accepted its questionnaire on the record. “Thus, the timing alone of these previous five submissions indicates that Prime Time’s previous submissions never accounted for Commerce’s acceptance, consideration, and analysis of Prime Time’s submission after remand, and thus it would not have been futile for Prime Time to submit its arguments in light of the changed posture of the case,” DOJ said.

Also, nothing on the record promotes the idea that it would have been futile for Prime Time to submit comments on the preliminary remand results over the gap-filling information, DOJ said. “Quite the opposite, comments would have prompted Commerce to respond to the issues raised, and would have promoted further development of the record for judicial review,” the brief said.