US Defends Stay Request for Scope Referral in MAC Brick EAPA Case

Magnesia alumina carbon (MAC) brick exporter Fedmet Resources' move to oppose the U.S. stay motion in an Enforce and Protect Act case only delays resolution, DOJ argued in a June 3 reply brief at the Court of International Trade. Fedmet opposes the stay and seeks the filing of a voluntary remand in a window that the U.S. says is impossible since it needs a covered merchandise referral determination from the Commerce Department -- the matter at the heart of the contested stay motion (Fedmet Resources v. U.S., CIT #21-00248).

The case concerns Fedmet Resources' challenge of a 2020 EAPA determination, in which CBP found that Fedmet had evaded the antidumping duty and countervailing duty orders on MAC bricks from China. On April 27, CBP requested a stay to seek a covered merchandise referral from Commerce because it says that it's unable to determine whether the bricks it tested are covered merchandise (see 2204270072).

Fedmet opposed this stay motion (see 2201060035), arguing that since the U.S. Court of Appeals for the Federal Circuit already found in 2014 that the company's Bastion MAC bricks aren't covered by the AD/CVD orders, a covered merchandise referral would be futile. The U.S. disagreed, telling the trade court that the Federal Circuit's decision "has no bearing on the issue pending before the Court," since CBP needs to figure out whether Fedmet's MAC bricks are the exempted bricks or bricks of a different type.

On remand, CBP said it engaged in a further review of the laboratory testing results on Fedmet's bricks along with looking at the written arguments submitted during the remand proceeding questioning the legitimacy of the testing methodologies. "CBP has determined that it cannot resolve the issue, but requires a referral to Commerce," the brief said. The Federal Circuit decision doesn't resolve the matter, and the stay is needed so the covered merchandise referral can be sorted out, the U.S. argued.

DOJ said a covered merchandise referral would narrow the scope of the case because, contrary to what Fedmet suggests, a referral would settle the issue of whether CBP exceeded its authority when finding the Fedmet bricks constituted covered merchandise under EAPA.

Fedmet argued staying the case would be prejudicial since the stay would add another 200 to 350 days to the remand timeline and the company has been "effectively barred from importing" for more than two years. The U.S. again contested this, arguing the imposition of the cash deposit rate is permitted under the EAPA statute and cannot serve as the basis for a prejudice claim. Also, if Fedmet wins on the referral question, it will get a refund of cash deposits. DOJ argued Fedmet's opposition to the stay would delay the matter more because the company asks for a 21-day remand after a denial of the stay despite CBP needing the referral to complete the case.