CAFC Addressed Substantive Issues Without Prior Briefing, Tomato Exporters Say in Rehearing Bid

Plaintiff-appellants in a case challenging the termination of an antidumping duty suspension agreement filed a motion for a panel or full court rehearing at the U.S. Court of Appeals for the Federal Circuit after the court found that the appellants made no plausible challenge to the termination. Appellants Bioparques de Occidente, Agricola La Primavera and Kaliroy said the court's decision was made "despite the absence of any briefing or arguments on the matter in this appeal," raising serious fairness and due process concerns (Bioparques de Occidente v. U.S., Fed. Cir. #20-2265).

The decision was issued as one of four pertaining to the same antidumping duty investigation on Mexican tomatoes. In 1996, an agreement was struck to suspend the antidumping duty investigation on tomatoes from Mexico, requiring signatories to sell their goods in the U.S. at minimum reference prices. Successive agreements were made in 2002, 2008 and 2013. However, in 2019, the Commerce Department withdrew from the 2013 agreement, continuing the AD investigation. Before an AD order could be imposed, though, a new suspension agreement was struck with higher minimum reference prices requiring dumping margins not to exceed 15%. U.S. tomato producers asked Commerce to continue the investigation, however, leading to the agency releasing a final determination finding that dumping was occurring.

The Federal Circuit issued its four opinions on April 14 (see 2204140067). In Bioparques de Occidente's case, the appellants challenged the termination of the 2013 agreement, the continuation of the investigation and the final determination. The appellate court reversed the Court of International Trade's ruling that the claims over the termination of the 2013 agreement were moot, but it went on to decide on substantive grounds that the claims over the termination of the agreement laid out no plausible challenge to the termination and should thus be dismissed.

The appellants now argue in their rehearing motion that this was a miscarriage of justice since their termination claims were decided on substantively despite the lack of briefing on the substance of these claims. The rehearing brief further laid out a series of arguments to show that "plausible" claims exist to hold the termination of the suspension agreement unlawful. The companies argued that the panel's decision failed to discuss the language of Commerce's regulations, which differ from the statute and limit Commerce's ability to terminate suspension agreements.

On this point, the appellants argued that where the statute is ambiguous, deference is paid to agency interpretation. As the statute is ambiguous on the question of when to terminate suspension agreements, Commerce's regulations should stand as an authority, and, contrary to what the court originally wrote, the regulations aren't just as ambiguous as the statute. "As long as the underlying investigation exists, Commerce is permitted to terminate a suspension agreement only when Commerce finds that the 'agreement has been violated or no longer meets the requirements of the Act,'" the brief said. "The Panel’s conclusion that Commerce was authorized to terminate or revise a suspension agreement in circumstances other than those described in 19 U.S.C. §1673c(i) and §351.209 of the regulations is, therefore, without merit."

The appellants also argued that the court's decision that Commerce was allowed to terminate the suspension agreement as a matter of contract failed to address key legal and factual issues. Under this claim, the companies said that Kaliroy is not bound by consent to the termination provisions of the suspension agreement and can challenge the legality of the provisions, the panel failed to consider the impact of the incorporation of Commerce's regulations into the 2013 suspension agreement, and that the panel's decision failed to consider the course of conduct between the parties in interpreting the 2013 agreement.