Wheel Hub Assembly Importer Denied 1581(i) Jurisdiction by Federal Circuit

Tapered roller bearing importer Wanxiang America Corporation does not have jurisdiction to challenge guidance issued from the Commerce Department to CBP on the assessment of antidumping duties, the U.S. Court of Appeals for the Federal Circuit said in a Sept. 2 decision upholding a ruling from the Court of International Trade. Jurisdiction under the court's residual jurisdiction, Section 1581(i), cannot be claimed by "creative pleading," and proper jurisdiction for Wanxiang America's case could have been claimed elsewhere based on the "true nature of the action," the court said. The Federal Circuit pointed to a CIT's denied protest jurisdiction under Section 1581(a), and antidumping and countervailing duty challenge jurisdiction under Section 1581(c), as potential jurisdictional homes for the action.

From 1994 to 2001, Wanxiang Group Corp., an automobile parts manufacturer based in China, and its exporting wing, Wanxiang Import and Export Co., participated in administrative reviews for first-generation wheel hub assemblies subject to a 1987 antidumping order on tapered roller bearings from China. The pair got company-specific dumping rates of zero percent, but Wanxiang Qianchao, another subsidiary of Wanxiang Group's, did not get the company-specific rate.

Wanxiang America, the Group's importer, then brought in second- and third-generation wheel hubs from Wanxiang Qianchao that Commerce said were within the order's scope via a scope ruling. During a CBP audit of Wanxiang America's wheel hub assemblies, the agency said that Wanxiang Qianchao did not get Wanxiang Group's zero percent dumping rate since it didn't participate in the administrative review. In making this decision, CBP issued a memorandum that included guidance from Commerce to CBP.

Wanxiang America then filed its suit in CIT challenging the guidance that Commerce gave to CBP, arguing that it violated the company's due process rights. In particular, Wanxiang said that Commerce's memo was issued without giving the importer a chance to comment on or review the decision before it was made (see 1908190030). The trade court dismissed the case for lack of jurisdiction, declaring that the importer had other means to challenge the decision. The decision was based on the concept that a plaintiff must show that other jurisdictional grounds are "manifestly inadequate" before being awarded Section 1581(i) jurisdiction.

The Federal Circuit upheld this decision, finding that Wanxiang America did not even argue that the other sections of the law were inadequate to provide relief. "Therefore, the only question we must decide is whether jurisdiction 'is or could have been available' under any other subsection of § 1581," the court said. In fact, it was, the court ruled. The importer could have sought relief elsewhere under Section 1581.

"In essence, Wanxiang is protesting having to pay antidumping duties and penalties on entries identified during the customs audit," the court said. "But Wanxiang could have challenged the assessments by pursuing a protest under 19 U.S.C. § 1514 (“Protest Against Decisions of Customs Service”) and then, if unsuccessful, by challenging unfavorable results before the CIT under § 1581(a)."

Further, jurisdiction could have been sought under Section 1581(c) if the importer initiated a test shipment and sought an administrative review of the entries as a new shipper, the opinion read. "During the review, Wanxiang would have had the opportunity to argue the issues it raised in its complaint before the CIT. In addition, the results of the administrative review could have been challenged before the CIT pursuant to 19 U.S.C. § 1516a, invoking jurisdiction of the CIT under § 1581(c)."

(Wanxiang America Corp. v. United States, Fed. Cir. # 20-1044, dated 09/02/21, Judges Kimberly Moore, Jimmie Reyna and Richard Taranto. Attorneys: Michael Roll of Roll & Harris for plaintiff-appellant Wanxiang; Stephen Tosini for defendant-appellee U.S. government)