Amended Complaint in Conflict-of-Interest Case Doesn't Cure 'Fundamental Deficiencies,' US Says

An amended complaint in a conflict-of-interest case does not cure the fundamental deficiencies of the suit, the U.S. argued in a second motion to dismiss at the Court of International Trade. While the amended complaint included specific examples of alleged ethical violations committed by plaintiff Amsted Rail Co.'s former counsel and a declaration from an ethics expert, the case still suffers from a lack of jurisdiction, the government said (Amsted Rail Co. v. United States, CIT # 22-00316).

The case concerns a past antidumping and countervailing duty investigation on freight rail couplers and parts thereof from China and a present AD/CVD investigation on the same goods from China and Mexico. ARC is a U.S. producer and importer of the subject merchandise, and is affiliated with a maquiladora factory, ASF-K, a fellow plaintiff in the action. As a petitioner in the previous investigation, ARC originally employed Wiley Rein, where Daniel Pickard worked as a partner, to represent them. Pickard filed an AD/CVD petition on behalf of ARC and McConway and Torley (M&T).

ARC subsequently withdrew from the petition, leaving Pickard to carry on with M&T and a labor union in the industry. An administrative protective order (APO) in this investigation was then issued. Until its withdrawal, ARC disclosed confidential information to Pickard to help prepare for his case.

In the prior injury investigation, the International Trade Commission unanimously voted that the U.S. industry was not materially harmed by imports of the subject merchandise from China, ending the AD/CVD investigations. But during the proceeding, Pickard had moved from Wiley Rein to Buchanan Ingersoll. The ITC issued its injury determination in June, when the APO only covered Pickard and two non-attorneys at Wiley. After the determination, in July 2022, Buchanan then filed an amendment to the APO adding seven attorneys and two non-attorney personnel from Buchanan.

Days later, Buchanan filed a petition to start new AD/CVD investigations on the freight rail couplers, this time adding Mexico. These Buchanan lawyers included Mexican imports knowing that the only Mexican imports came from ARC's affiliate. Describing this as a "betrayal," ARC originally took to the ITC and Commerce to argue that Pickard and Buchanan should be disqualified from the proceeding and booted from the APO. The plaintiffs then went to the trade court over the ITC's failure to toss Buchanan and Pickard from the APO.

ARC and ASF-K filed another case at CIT, this time looking to get the trade court to have Commerce disqualify Buchanan from the AD/CVD investigations (see 2211020045). In the proceedings, the agency said it wouldn't make a finding as to whether the firm should be barred from further participation. Then, in ARC's case naming the ITC as a defendant, the trade court dismissed the action for lack of subject matter jurisdiction (see 2211160057). In that case, ARC then filed for an injunction pending an appeal of the decision, arguing that the court erred by illegally shifting the burden to the plaintiffs to identify specific times ARC shared confidential information with Pickard and Buchanan.

Hoping not to have its case against Commerce dismissed on similar grounds, ARC amended the complaint to add a specific instance of Pickard allegedly using the importer's information against it and a declaration from an ethics professional (see 2211220066). The U.S. then renewed its motion to toss the case, arguing that the new complaint does not fix the fundamental issues with the suit. "Because the new factual submissions and ethics opinion were not submitted to Commerce in the first instance, they cannot cure the jurisdictional and substantive deficiencies in the complaint," the brief said. Aside from this, the government said the court still does not have the jurisdiction to hear this case under Section 1581(i), the court's "residual" jurisdiction, since another section of Section 1581 is not "manifestly inadequate."