Wire Hanger Importer Offers APO as Solution to Due Process Concerns in EAPA Cases at CIT

The lack of access to business confidential information (BCI) in an antidumping and countervailing duty evasion investigation violated wire hanger importer Leco Supply's due process rights, the importer told the Court of International Trade in a Jan. 24 brief. Responding to CBP's remand results in which it took another look at its initial finding of evasion under the Enforce and Protect Act, Leco said its lack of access to confidential information and the withholding of information not entitled to confidentiality at the administrative level "clearly risked erroneous deviation of Leco's private interests," the brief said. An administrative protective order issued during EAPA investigations would end this concern, the importer told the trade court (Leco Supply v. U.S., CIT #21-00136).

At the conclusion of the EAPA investigation into Leco's alleged evasion of the AD/CVD orders on wire hangers from Vietnam, the CBP Office of Trade's Trade Remedy Law Enforcement Directorate found that Leco was guilty of evasion by falsely claiming the country of origin as Laos. After litigation started, though, CBP was alerted that certain documents weren't transmitted from one key CBP branch to another, leading the agency not to consider the entire record. At CIT, CBP requested a voluntary remand to reconsider this along with the state of its public summaries of the business confidential information given the recent Royal Brush v. U.S. decision.

After returning with the voluntary remand results, CBP said that it accomplished its twin goals of not releasing BCI to parties not authorized to see it while ensuring proper levels of transparency in the investigation (see 2111120064). The agency required all parties, including Leco, to submit a public summary of its BCI as part of the remand. After reviewing them, CBP said the summaries satisfy the requirements of the law and don't violate the importer's due process rights.

Leco, in response, blasted CBP's remand results as still in violation of the law, beginning with its decisions to allow redacted information that allegedly isn't qualified for BCI treatment. The importer floated two documents as an example of such an "arbitrary" decision that stands as an "abuse of discretion" because the information in the documents was either publicly available or not a trade secret or confidential commercial or financial information, as claimed by the EAPA alleger. The whole process reeks of impartiality, the importer suggested.

"CBP’s insistence on accepting [the alleger's] M&B's improper bracketing of entire documents containing highly relevant information is particularly galling given its rejection of documents submitted by Leco for 'over bracketing' of information such as the field headings of CF7501 entry summaries and commercial invoices," the brief said. "Leco objected at the time to this disparate treatment, to no avail. For CBP to reject documents submitted by the importers under investigation as 'overly bracketed,' and then to claim it cannot 'question' the alleger’s bracketing of a highly relevant document in its entirety, raises questions of impartiality in the treatment of the parties to this investigation."

Leco argued that the lack of access to BCI violated its due process rights in the investigation itself. Using the standard established by the 1976 Supreme Court case, Mathews v. Eldridge, Leco argued that it had a private interest affected by CBP action, a risk of "erroneous deprivation of such interest" through the EAPA investigation and the lack of administrative burdens posed by a substitute procedural requirement. The importer said the risk of erroneous deprivation was established through CBP's treatment of BCI since this prevented Leco from responding to the very information on which CBP relied in its evasion finding.

"This confluence of factors -- the regulation’s effect of concealing violations, the significant barriers to judicial redress, and the stated policy of CBP not to police parties’ claims for business confidential treatment or to justify its own -- raises the likelihood that improper claims of business confidential treatment will be not the exception but the rule, and even that unscrupulous parties may use claims for business confidential treatment as a tool for the improper concealment of relevant information from opposing parties," the brief said. Leco floated an APO as a quick fix to this dilemma for future EAPA cases -- a solution also offered in the House of Representative's America COMPETES Act of 2022 (see 2201260065).