Canadian Exporter Rails Against Commerce's Cash Deposit Instructions in Section 1581(i) Case at CIT

CBP unlawfully changed exporter J.D. Irving's antidumping duty cash deposit rate on its 2020 entries months after the rate had been confirmed when no administrative review had been requested of the exporter, J.D. Irving argued in a Sept. 9 complaint at the Court of International Trade. Because the change came after assessment instructions had been issued for the 2020 review period, it improperly set a cash deposit that was not based on same dumping margin as its most recent assessment rate, the exporter said (J.D. Irving v. U.S., CIT #22-00256).

The case concerns the antidumping duty order on softwood lumber from Canada. In January 2021, when requests for review for the 2020 review period were due, J.D. Irving had been subject to a 1.57% AD duty cash deposit rate calculated in the 2017-18 administrative review. When no request for review of J.D. Irving came in, Commerce instructed CBP to assess AD duties for the 2020 review period at that 1.57% rate and collect a 1.57% AD duty cash deposit for the company.

In November 2021, Commerce issued the final results in the 2019 AD review, giving the exporter the non-selected companies' rate of 11.59% and rejecting J.D. Irving's argument the 2020 AD cash deposit rate of 1.57% should continue to apply to the exporter's entries. The next month, Commerce issued AD cash deposit instructions to CBP, changing the exporter's cash deposit rate from the 1.57% in effect at the time no 2020 review was requested to the 2019 rate of 11.59%. Then, in August 2022, Commerce issued the final results in the 2020 AD review, making no changes to J.D. Irving's rate but declining to update J.D. Irving's cash deposit rate found for 2019 to what J.D. Irving says is the most recent dumping margin for the exporter, 1.57%.

The agency said this move was consistent with its "long-held practice of not updating the cash deposit instructions for companies not under review." J.D. Irving appealed to the trade court, contesting these cash deposit instructions and seeking refunds for duties paid on entries made and exported by J.D. Irving entered on or after Aug. 9, 2022, beyond the 1.57%. The exporter said Commerce's instructions violate the Tariff Act.

"Here, the most recent AD assessment rate assigned to J.D. Irving is for the 2020 POR," the brief said. That rate was set when nobody requested a review of J.D. Irving for 2020 while that 1.57% rate was in effect, it said. "Nevertheless, whereas Commerce instructed CBP to assess AD duties on J.D. Irving’s import entries during the end of 2020 at a dumping rate of 1.57% (the AD cash deposit rate that applied upon entry), ... Commerce’s 2020 Cash Deposit Instructions fail to instruct CBP to collect cash deposits on imports of subject merchandise from J.D. Irving at the same dumping rate. Consequently, CBP continues to collect AD cash deposits on imports of subject merchandise from J.D. Irving based on a dumping rate (11.59%) determined for an earlier POR, 2019."

The two-count complaint made two claims against Commerce's move: the instructions violated the law because they failed to give J.D. Irving a cash deposit rate based on the same margin as the company's most recent AD assessment rate, and Congress' intent in requiring Commerce to conduct an administrative review was to reduce the administrative burden of automatically reviewing every outstanding order even though the parties are satisfied with the existing order. On the latter point, the plaintiff said that since neither J.D. Irving nor any U.S. producer requested a review of the plaintiff for the 2020 POR, the most recent AD cash deposit rate for that period was the proper rate for the exporter's entries going forward. Any move to ignore that is "inconsistent with congressional intent."

J.D. Irving filed its case under Section 1581(i), the court's "residual" jurisdiction -- a move the court allows only if no other subsection of Section 1581 is available, and if so, whether that remedy would be "manifestly inadequate." The exporter discussed this prospect in the complaint, finding that normally the court would have jurisdiction under Section 1581(c) and said the plaintiff "undertook all requirements to obtain relief from this court through an action commenced under that subsection of" Section 1581. The exporter said it participated in the 2020 review, then gave timely notice to the USMCA's U.S. and Canadian secretaries, all interested parties and Commerce of its intent to commence review of the final results at CIT.

J.D. Irving said that unlike the trade court, the USMCA binational panel lacks equitable powers. "Consequently, J.D. Irving cannot obtain the injunctive/equitable relief it seeks – i.e., an order directing Commerce to instruct CBP to reinstate the lawful AD cash deposit rate (1.57%) retroactively and to refund excess AD cash deposits paid -- from a USMCA binational panel," the brief said. "Because any relief J.D. Irving could obtain through USMCA panel review of the 2020 Review Final Results would be 'manifestly inadequate,' J.D. Irving is appealing Commerce’s 2020 Cash Deposit Instructions and seeks to invoke this court’s jurisdiction under 28 U.S.C. § 1581(i)."