CIT Rejects Reconsideration Bids on Dismissed Claims Seeking Delinquency Interest Under CDSOA

The Court of International Trade, in three related opinions, rejected reconsideration bids from a series of domestic manufacturers and producers of a wide range of goods covered by antidumping duty orders for the court to vacate or modify certain claims as being time barred. The reconsideration motions concern whether certain claims seeking payouts of delinquency interest under the Continued Dumping and Subsidy Offset Act of 2000 were timely filed. Judge Timothy Stanceu said that the plaintiffs "have not put forth a valid reason why the court should vacate or modify the decision."

In three separate cases led by Adee Honey Farms, Hilex Poly and American Drew, but including many other domestic producers as plaintiffs, the plaintiffs say the text of CDSOA as enacted by Congress expressly requires that CBP distribute “all interest” associated with antidumping and countervailing duties to affected domestic producers under CDSOA. (see 2105250069). CBP says delinquency interest is not included in CDSOA distributions.

In three opinions issued in December 2020, Stanceu said that the final rule issued by CBP to implement the CDSOA put the parties on notice of a decision by CBP on the type of interest the agency would deposit into each "special account," where it would then be distributed to the eligible domestic producers. Accordingly, the court said that the only timely claims were the ones relating to the "application of the Final Rule to their individual CDSOA distributions occurring during the two years prior to their instituting their actions." All claims seeking delinquency interest received before July 15, 2014, were dismissed as time barred.

Various plaintiffs then sought for court reconsideration of this decision. One plaintiff in the Adee Farms case, Monterey Mushrooms, argued that the court should reverse the decision since the administrative record was not filed until February 2021, over eight months from when the court's order was issued, the court should reverse its order given that the record confirms that CBP didn't announce its decision to exclude delinquency interest from CDSOA distributions until 2014. The court found the argument unconvincing.

"In moving for reconsideration, Monterey Mushrooms relies mistakenly on the filing of the administrative record with the court," Stanceu said. "Reversing the decision dismissing the claims the court ruled untimely would require the court to conclude that the Final Rule did not place Monterey Mushrooms on notice of an agency decision that Monterey Mushrooms would not be receiving delinquency interest in its CDSOA distributions. Nothing in plaintiff’s motion for reconsideration meaningfully addresses the issue of notice."

In the American Drew and Hilex Poly cases, the plaintiffs' argument also centered around the administrative record, which, according to plaintiffs, "now confirms that CBP is playing an interpretive shell game" and that CBP changed its mind about whether to distribute the delinquency interest. The plaintiffs said that this was evidenced in the inclusion of the word "only" in the preamble to the final rule. Stanceu was unconvinced by this argument as well.

"The conclusion that the Final Rule provided notice of the type of interest to be distributed does not hinge entirely on the preamble language or the word 'only' appearing therein," the opinion said. Stanceu explained that delinquency interest can only accrue from liquidation and that it is "unreasonable" to interpret the provision to mean that any interest other than interest charged at liquidation will be made available for distribution. "The preamble, by informing interested parties that only Section 1677g interest will be made available for distribution under the CDSOA, removed any remaining doubt," the judge said.

The plaintiffs also argued that CBP's change requires more explanation and that as of the time the agency published its proposed rule for implementing the CDSOA, CBP originally signaled it would collect delinquency interest. However, the judge ruled that neither the proposed rule nor the Final Rule told the parties that delinquency interest would be distributed. Since there was no change, no explanation was needed.

(Adee Honey Farms v. United States, Slip Op. 22-60, CIT Consol. #16-00127, dated 06/08/22, Judge Timothy Stanceu. Attorneys: Adam Gordon of The Bristol Group for movant Monterey Mushrooms; Beverly Farrell for defendant U.S. government)

(American Drew, et al. v. United States, Slip Op. 22-61, CIT #17-00086, dated 06/08/22, Judge Timothy Stanceu. Attorneys: J. Michael Taylor of King & Spalding for plaintiffs; Beverly Farrell for defendant U.S. government)

(Hilex Poly Co. v. United States, Slip Op. 22-62, CIT #17-00090, dated 06/08/22, Judge Timothy Stanceu. Attorneys: J. Michael Taylor of King & Spalding for plaintiffs; Beverly Farrell for defendant U.S. government)