Amsted Rail Co. Makes Opening Arguments at Federal Circuit in Conflict-of-Interest Suit

The Court of International Trade should have allowed a company that filed an attorney conflict-of-interest suit involving an International Trade Commission AD/CVD injury proceeding to amend its allegations to comply with the court's opinion, rather than dismissing the case outright with leave to file under a different jurisdictional provision, said the company, Amstead Rail Co., in an opening brief filed Jan. 13 at the U.S. Court of Appeals for the Federal Circuit (Amsted Rail Company v. United States, Fed. Cir. # 23-1355).

The case concerns a past ITC injury investigation on freight rail couplers and parts thereof from China and a present injury investigation on the same goods from China and Mexico. ARC is a U.S. producer and importer of freight rail couplers, and originally employed Wiley Rein, where Daniel Pickard was a partner at the time, to represent it.

After filing a petition for ARC, Pickard moved to Buchanan Ingersoll. Following a negative injury determination in the original ITC proceeding, Pickard filed a new petition naming imports of freight rail couplers from Mexico and China as the source of the injury. He did this knowing ARC had the only imports from Mexico via its maquiladora factory, ASF-K. The plaintiffs described this as a "betrayal" by Pickard, and said the attorney used ARC's information -- that ARC had the only imports of freight rail couplers from Mexico via its maquiladora factory -- against it.

CIT dismissed the case for lack of jurisdiction (see 2211160057). The plaintiffs then asked for an injunction barring Pickard and Buchanan from participating in the injury investigation at the ITC pending an appeal of the decision (see 2211210036). Katzmann denied the injunction bid since a notice of appeal had not yet been filed but said even if it had been filed, the plaintiffs failed to prove that they would likely succeed on the merits and suffer irreparable harm without the injunction.

Now at the Federal Circuit, the appellants argue that CIT did in fact have jurisdiction under Section 1581(i), claiming that they "easily" show that jurisdiction was "manifestly inadequate" under Section 1581(c). "They cannot await the agency’s final determinations to seek review under § 1581(c)," the appellants said. "Plaintiffs’ right to proceedings untainted by Pickard’s conflict of interest will be destroyed if that right’s vindication is postponed until after the Current Investigations have run their course. ARC shared critical client confidences with Pickard, who may misuse or disclose those confidences to the Coalition’s unfair advantage in the Current Investigations."

The appellants also put forth "another, independent reason" for satisfying the "manifest inadequacy" test. This reason says that judicial review of agency decisions over attorney disqualification is not allowed under Section 1581(c). "Attorney disqualification simply does not bear on that statute's limited remit," the brief said. ARC railed against CIT's jurisdictional standard that required the plaintiffs to show actual confidences might be exploited. "Requiring a showing of actual shared confidences requires the very disclosure the conflict rule protects against," the brief said. "Demanding self-destructive pleading is not the right way to cabin § 1581(i) jurisdiction."

CIT, at a "minimum," should have let the appellants replead the jurisdictional allegations, the plaintiffs said. If they had the chance, the plaintiffs said, they would amend their pleadings to meet the "overly onerous jurisdictional standard" by showing that Pickard knew of certain information relevant to ARC's defenses in the investigations.