Surety Company Moves to Stay Action Seeking to Collect AD Duties After Statute of Limitations Ran Out

Surety company American Home Assurance Company wants a stay in its case, brought by the U.S., in which the government is seeking to collect antidumping duties on entries of canned mushrooms from China brought in between 2000 and 2001, according to its Nov. 26 motion at the Court of International Trade. Filed without consent from the Department of Justice, AHAC wants all proceedings halted in the lawsuit until the court renders a judgment in a similar case, United States v. Aegis Security Insurance Company, currently pending before Judge Stephen Vaden (United States v. American Home Assurance Company, CIT #20-00175).

DOJ is seeking to recover a customs bond for unpaid AD duties, arguing that sureties have a unique liability to pay the unpaid duties. To establish that the statute of limitations hasn't run out on collecting payments on a decade-plus-old bill, the government has argued that its issuance of a bill to the surety constitutes a reliquidation of the entries, allowing it to collect duties from the sureties at a much later date than the date of liquidation (see 2105170036).

The government is making a nearly identical argument in the Aegis case, as it's seeking to untether the six-year statute of limitations for customs bonds from the date an entry is liquidated. Aegis has argued that doing so would undermine the entire business model of sureties (see 2109210086). In its motion to stay, AHAC claims that the Aegis case will resolve the questions of whether the government's claim for the AD duties is time barred by the six-year statute of limitations and whether "prejudice required for the laches defense may be presumed as a matter of law where there is unreasonable delay in issuing a demand against a customs bond."

On the second question, CIT has ordered the parties to conduct discovery to find if Aegis suffered actual harm as a result of the government's "extensive delay" in issuing the bills for the AD duties after the entries were liquidated. "To put it simply, if either of the aforementioned legal defenses are decided in defendant’s favor, the question of whether there was actual harm is irrelevant," the motion to stay said. "For this reason, and in an effort to preserve judicial resources and additional costs and time associated with the involved additional discovery, defendant asks that the court agree that a stay of this action is appropriate."