EAPA Statute Does Not Require Notice Nor Access to Confidential Information, DOJ Tells CIT

December 14, 2021 by Jacob Kopnick|Top News

While the companies found to have evaded antidumping and countervailing duties on hardwood plywood from China argue that the evasion investigation deprived them of their due process rights, this is not how Congress set up the evasion statute, the Department of Justice argued in a Dec. 10 brief. Opposing the plaintiffs, led by American Pacific Plywood, at the Court of International Trade, DOJ said that the Enforce and Protect Act does not require CBP to notify a party that it's under investigation nor give a company access to confidential information or an opportunity to be heard. DOJ also made the case to CIT that the facts back up its ultimate evasion finding (American Pacific Plywood, Inc. et al. v. United States, CIT Consol. #20-03914).

The U.S.'s brief comes in response to a fiery argument from the plaintiffs that blasted CBP's conduct during the investigation (see 2108110034). Prior to the investigation, though, in 2018, the Commerce Department imposed antidumping and countervailing duty orders on hardwood plywood from China. Then, in what the plaintiffs characterize as a move following the "hallowed tradition of enterprising American capitalism," Chinese plywood manufacturers moved their operations to Cambodia to avoid the AD/CV duties. The evasion petitioners, then, responded by charging "without evidentiary foundation" that the plaintiffs had been selling Chinese hardwood plywood transshipped through Cambodia.

CBP's Trade Remedy Law Enforcement Directorate then conducted an investigation of duty evasion, coming away with an affirmative finding for the plaintiffs. Due to EAPA regulations, TRLED was able to impose interim measures without timely notification to plaintiffs, a clear violation of the plaintiffs' due process rights, the plaintiffs alleged. The plaintiffs also held that CBP violated their due process rights by failing to provide them with access to business proprietary information.

In its response, DOJ said that the statute "broadly authorizes CBP" to carry out its investigations in this way, tapping a recent CIT decision that dismissed the plaintiffs' very arguments -- in particular, the ones over the temporary interim measures. In a November opinion, CIT said that CBP did not violate an EAPA investigation respondent's due process rights (see 2111050040). After establishing that the respondent, Diamond Tools Technology, had a protected interest in the case, the court then said that DTT failed to show a protected interest in the interim evasion measures, but that a protected interest was established for the final evasion finding.

The U.S., in its brief, said that the Diamond Tools ruling rejected similar arguments made by the plaintiffs and that the EAPA statute is silent on whether notice needs to be given for interim measures. "In that case, the importer challenged CBP’s imposition of interim measures without prior notice and opportunity to be heard," the brief said. "... The Court explained that '[i]nterim measures are temporary' and that '[i]f Customs finds in its final determination that no evasion exists, any measures taken in the interim, such as a suspension of liquidation or collection of cash deposits, will be lifted and any additional duties or cash deposits paid will be reimbursed to the importer with interest.' The fact that the interim measures are temporary further negates plaintiffs’ claims of harm."

DOJ further argued that the plaintiffs' arguments over the constitutionality of the lack of notice and access to business proprietary information hold no basis in the law. "While plaintiffs may wish to have known about the impending interim measures prior to imposition, there was no requirement under the EAPA statute for CBP to provide such notice. In fact, notice may have very well thwarted the investigation. Thus, plaintiffs fail to establish that their due process rights were violated because CBP imposed interim measures without prior notification. ...

"Plaintiffs’ second Constitutional due process argument (access to confidential information) similarly fails. ... as plaintiffs acknowledge, there is no statutory authority that requires or authorizes CBP to disclose business confidential information under an administrative protective order similar to an antidumping and countervailing duty investigation or safeguards investigation." The trade court has twice now dismissed claims over business confidential information -- once in the Diamond Tools ruling and in the Royal Brush Manufacturing v. United States case (see 2012020050) -- and should do so again, the government said.

"In sum, plaintiffs fail to identify any right to which they were owed due process, and plaintiffs do not have a due process right to a 'particular form of procedures,'" the U.S. argued. "Without establishing any due process right, the Court should decline plaintiffs’ invitation to limit CBP’s discretion in investigating EAPA allegations."