US Defends CIT Decision to Toss Eighth Amendment AD/CVD Challenge Over Jurisdiction Question

The Court of International Trade properly dismissed importer Rimco's challenge to antidumping and countervailing duty challenge for lack of subject matter jurisdiction, the U.S. argued in a Feb. 15 reply brief at the U.S. Court of Appeals for the Federal Circuit. While the importer filed its case under Section 1581(a), the true home for the action is Section 1581(c) since it challenges the final AD/CVD rates set by the Commerce Department. "The decision of what rate to apply is Commerce’s alone and, for that reason, the claims should have been brought as 28 U.S.C. § 1581(c) challenges," the brief said (Rimco v. United States, Fed. Cir. # 22-2079).

Rimco launched its challenge to contest the 451.10% countervailing duty rate and 231.70% China-wide AD rate on its steel wheel imports, both of which were determined using adverse inferences. The importer made a constitutional claim against the rates, arguing that the duties were penal not remedial, and thus in violation of the Eighth Amendment.

In a July 2022 opinion the trade court dismissed the case (see 2207110032), holding that CBP's ministerial role in the imposition of AD/CVD is "well-settled law" and that the court does not have jurisdiction to hear the constitutional claims under Section 1581(a) since CBP's liquidation of the entries was not a protestable decision. Rimco also made claims under Section 1581(i), the court's "residual" jurisdiction, but the court said that because the importer could have requested an administrative review of the duties, Commerce was denied the chance to hear the constitutional claims.

Rimco took to the appellate court to contest the dismissal order. In its reply, the government leaned on CIT's ruling, claiming that the "correct method to challenge such determinations is to participate in the final investigation determinations or to request administrative reviews by Commerce of Rimco's imports." The agency could have considered the claims made by the importer in that venue, the brief said.

"Because the decision of how much antidumping and countervailing duties to assess is solely Commerce’s, CBP cannot possibly determine whether the duties assessed were excessive or punitive in any way," the government said. "And because Rimco could have, but chose not to request administrative reviews of the antidumping or countervailing duty Orders, the trial court lacks jurisdiction under 28 U.S.C. § 1581(i)."