CIT Tosses Case Contesting AD Cash Deposit Instructions for Lack of Jurisdiction Under Section 1581(i)
The Court of International Trade in a Jan. 25 opinion dismissed a case from J.D. Irving on the Commerce Department's cash deposit instructions to CBP after the 2019 administrative review of the antidumping duty order on softwood lumber products from Canada. Judge Timothy Reif said that the court did not have subject matter jurisdiction to hear the case under Section 1581(i), the court's "residual" jurisdiction, since jurisdiction would have been available under Section 1581(c), "but for the decision" by parties involved to request a binational panel review of the AD review under USMCA.
The true nature of the case challenges Commerce's final results in the review and not the cash deposit instructions, the judge said. Reif likened the case to the character of Mowgli in Rudyard Kipling's The Jungle Book.
As a non-selected respondent in the first and second review, J.D. Irving received the non-selected companies' rate of 1.57% and 11.59%, respectively. However, after Commerce started the second review, but before it released the review's final results, the agency started the third review of the order. This time, though, no party requested that Commerce review J.D. Irving, so Commerce told CBP to liquidate the exporter's entries at the 1.57% rate then in effect. The agency, though, announced that after the AD rate in the second review, 11.59%, becomes final, it will serve as the cash deposit rate for entries going forward. J.D. Irving took issue with this administratively, arguing that the 11.59% mark cannot become its cash deposit rate since the agency had already come up with a rate for a more recent review period, as the company kept the 1.57% rate for the third review after nobody requested a review of the company.
J.D. Irving filed suit at CIT, arguing that the lack of a request for the 2020 review signaled that both sides agreed that the cash deposit rate in effect from the 2018 review, 1.57%, was an accurate measure of J.D. Irving's dumping level and not the higher rate CBP used to liquidate the entries, 11.59% (see 2201050029).
J.D. Irving filed its suit to contest the cash deposit instructions under Section 1581(i), acknowledging that normally it would seek jurisdiction under Section 1581(c), but two days before the complaint was filed, other parties requested a binational panel review of the 2019 review under the USMCA. This gives the panel "exclusive review" of the review. The U.S. then moved to dismiss the case for lack of jurisdiction (see 2204050067).
Reif sided with the government, finding that the court does not have jurisdiction to hear the case under Section 1581(i) since the true nature of the action contests the final results of the 2019 review. The trade court has previously looked to cases similar to J.D. Irving's and also found that the "true nature" of the action contests the final determination by Commerce and not its instructions to CBP, the judge said. "Consequently, subject matter jurisdiction for this Court to hear plaintiff’s challenge with respect to the AR 2 Final Results 'could have been available' under 28 U.S.C. § 1581(c), but for the binational panel review that now is underway," the opinion said.
The judge then turned to the question of whether the relief provided to the plaintiff under Section 1581(c) or before the binational panel would be so manifestly inadequate as to establish jurisdiction under Section 1581(i). Discussing the request for declaratory relief, Reif said that the binational panel can touch on the lawfulness of Commerce's determination over the cash deposit rate. As for the plaintiff's request to retroactively reimpose the 1.57% cash deposit rate and get a refund for excess cash deposits, Reif said that he does not find persuasive the plaintiff's claim that only the injunctive power of the court can achieve this relief. J.D. Irving could eventually challenge for its deposits once the binational review wraps up either before a panel or the trade court, the judge said.
Reif said that an alternative remedy is available via a challenge in one or more administrative reviews of the collection of cash deposits at the higher rate. The judge pointed to three considerations that show that this remedy would not be manifestly inadequate: the remedy would produce an adequate result; the payment of cash deposits at the higher rate during the course of administrative proceedings and any appeals "would not render the alternative remedy manifestly inadequate;" and just because the court has the power to issue the requested injunctive relief, the alternative relief is not manifestly inadequate.
(J.D. Irving v. United States, Slip Op. 23-10, CIT # 21-00641, dated 01/25/23, Judge Timothy Reif. Attorneys: Jay Campbell of White and Case for plaintiff J.D. Irving; Kelly Krystyniak for defendant U.S. government)