Trade Court Tosses Eighth Amendment AD/CVD Challenge for Lack of Jurisdiction

The Court of International Trade in a July 8 opinion dismissed importer Rimco's antidumping and countervailing duty challenge after finding that the claims lack subject-matter jurisdiction at the trade court. Judge Mark Barnett said that Rimco's Eighth Amendment claims could not proceed under Section 1581(a) since they are not contesting the liquidation of the steel wheel entries at issue but instead contest the Commerce Department's actions leading up to the high AD/CVD rates. The judge further ruled that Rimco's claims made under Section 1581(i), the court's "residual" jurisdiction, cannot stand since the importer could have requested an administrative review of the AD/CVD orders, clearly showing that other avenues of remedy were available.

Rimco filed its case to contest the 457.10% countervailing duty rate and 231.70% China-wide antidumping duty rate on its steel wheel imports (see 2109240049). Both rates were imposed with an adverse inference. The importer made a constitutional claim against the rates, arguing that the duties were penal not remedial, and thus in violation of the Eighth Amendment. This led DOJ to file a motion to dismiss -- a bid supported by proposed defendant-intervenor Accuride Corporation. Rimco challenged CBP's imposition of the duties even though CBP has a ministerial role in administering AD/CVD.

Barnett pointed this out in his opinion, saying that CBP's ministerial role in the imposition of AD/CV duties is "well-settled law." Rimco, though, said that this role does not matter since its constitutional claims are unique. The court ruled against this claim, finding that since CBP's liquidation of the entires was not a protestable decision, the court does not have jurisdiction to hear the claim under Section 1581(a).

Turning to the claims under Section 1581(i), Barnett ruled that since the importer could have requested an administrative review, Commerce was denied the chance to consider the Eighth Amendment claims. Rimco argued that Commerce lacks the capacity to consider these constitutional arguments. The judge disagreed, finding that since Commerce is the "master" of AD/CVD proceedings and that there is nothing in the statute that prevents Commerce from considering an Eighth Amendment challenge, Commerce could have reasonably considered such a claim.

Barnett wrote that, "Here, Rimco has not demonstrated that pursuing its claims through an administrative review would have been an exercise in futility, useless, or incapable of producing the result it seeks. If Rimco established that Commerce’s selected rates violated the Eighth Amendment, Commerce could have exercised its ample discretion to modify the information upon which it relied in making its adverse inference."

In all, the judge ruled that Rimco could have pursued its challenge administratively with Commerce and then under Section 1581(c) at CIT should those administrative challenges have failed. "Rimco failed to pursue the administrative avenue available to it and thereby missed its opportunity to challenge the rates set by Commerce," the opinion said. "It cannot avoid the consequences of that failure through the exercise of the court’s section 1581(i) jurisdiction."

"Next stop is likely the Court of Appeals [for the Federal Circuit]," said John Peterson, counsel for Rimco. "In any event, despite what the Court said, neither Commerce nor any other agency has the power or competence to rule on issues of constitutionality. Commerce may be the 'master of the countervailing and antidumping duty laws,' as the Court wrote, but constitutionality is an issue purely for the courts."

Also before the court was Accuride's motion to intervene. Since Barnett dismissed the case, however, the intervention question became moot.

(Rimco, Inc. v. United States, Slip Op. 22-79, CIT #21-00537, dated 07/11/22, Judge Mark Barnett. Attorneys: John Peterson of Neville Peterson for plaintiff Rimco; Beverly Farrell for defendant U.S. government; Nicholas Birch of Schagrin Associates for proposed defendant-intervenor Accuride Corporation)