US Backs Motion to Toss EAPA Case at CAFC Since Entries Have Liquidated

Importer Royal Brush Manufacturing has failed to rebut the U.S.'s showing that an appeal of an Enforce and Protect Act case should be dismissed since the entries have all been liquidated, the government argued in a Jan. 30 reply brief at the U.S. Court of Appeals for the Federal Circuit. Royal Brush failed to address the U.S. reliance on Federal Circuit precedent showing that "an unprotested liquidation divests the trial court of jurisdiction, even if the liquidation was erroneous," the brief said (Royal Brush Manufacturing v. United States, Fed. Cir. # 22-1226).

In the EAPA investigation, CBP said Royal Brush evaded the antidumping and countervailing duty orders on pencils from China by transshipping them through the Philippines. Royal Brush sued, arguing its due process rights were violated because it was not granted access to confidential information in the case and that the public summaries CBP provided were inadequate.

The Court of International Trade initially agreed with the latter point, but it stopped short of finding CBP should have shared all the confidential information with Royal Brush (see 2012020050). CIT eventually upheld the final evasion finding from CBP after the agency provided the public summaries. Royal Brush appealed to the Federal Circuit, where it is seeking a broader ruling against CBP on due process grounds (see 2202070071).

In the meantime, it came to light that the entries at issue had been liquidated before Royal Brush requested an injunction from the trade court. Four of the five entries at issue liquidated during the EAPA proceeding itself. As a result, the U.S. moved for dismissal of the appeal (see 2212090066). Royal Brush argued that dismissing the case on these grounds would deprive it of any judicial recourse and permit CBP's illegal liquidation of the entries. The importer said finding the case to be moot misconstrues the law and incorrectly presumes that the company's interests are limited to the erroneous assessment of duties (see 2301240025).

In its reply, the government again argued that the court lacks jurisdiction since the company failed to protest the liquidations. The U.S. also went after the appellant's interpretation of the scope of the Federal Circuit's ruling in Zenith Radio Corp. v. U.S. In the 1983 decision, the appellate court said that allowing liquidation of the merchandise at issue before a decision on the merits was rendered would deprive Zenith of its right to obtain judicial review of the determination. Royal Brush argued that an exception to this rule applies as established in Shinyei Corp. of America v. U.S. -- a decision which held that liquidation did not remove jurisdiction over an Administrative Procedure Act action challenging Commerce's instruction.

The U.S. sought to differentiate the Shinyei ruling from the facts of the present case. In Shinyei, the Federal Circuit said the result would have been different if the action involved a protest of erroneously liquidated entries, the government pointed out. "Here, however, Royal Brush slept on its rights by failing to bring a protest," the brief said. "Royal Brush’s failure to pursue its statutory remedy to protest the liquidations renders reliquidation an inappropriate form of relief. Indeed, since Shinyei, this Court has reaffirmed that an importer is not entitled to reliquidation when the importer 'failed to avail itself of ... alternative remedies.'"

Royal Brush also claimed that it would be "outlandish and inequitable" to require the company to regularly check CBP's website to make sure its entries have not been liquidated. "But that is precisely what this Court has required," the government said, citing the court's 1995 decision Juice Farms v. U.S., in which the court said that CBP posted bulletin notices at the customs house, and that these notices satisfy the notice requirement and trigger the 90-day protest period.