CIT Rejects Bid for Injunction on AD Cash Deposits, Says Exporter Failed to Show Irreparable Harm

Antidumping duty respondent Grupo Simec failed to prove that it would suffer immediate and irreparable harm without an injunction against AD cash deposits, the Court of International Trade held in a Feb. 24 opinion denying the preliminary injunction motion. Judge Stephen Vaden added that Grupo Simec's evidence purportedly showing how it would be harmed without the injunction contained conclusory evidence that, if held to be sufficient to establish harm, would "eviscerate the operation of the antidumping laws."

"We believe the Court appropriately denied Simec’s motion seeking to enjoin Customs from requiring it to pay cash deposits," Jack Shane, counsel for petitioner Rebar Trade Action Coalition, said in a Feb. 24 email. "As the Court determined, Simec failed to satisfy any of the necessary elements for such a motion, namely irreparable harm, likelihood of success on the merits, balance of equities, and serving the public interest."

The case stems from the administrative review of the antidumping duty order on steel concrete rebar from Mexico in which Grupo Simec and Deacero served as mandatory respondents. During the review, Grupo Simec submitted multiple extension requests for certain sections of its questionnaire response and supplemental questionnaire responses due to COVID-19 restrictions, the amount of requested data and electricity blackouts. Commerce granted only some of the requests, often only allowing part of the requested extension period.

Ultimately, Grupo Simec got six weeks to submit its responses. The company got its data in on time, but over a month later, it attempted to turn in additional factual information that the ACCESS system "inadvertently stripped," according to Grupo Simec. The agency denied the submission as untimely and hit the respondent with an adverse facts available rate of 66.7%, citing Grupo Simec's "failure to submit complete responses" and the "widespread and pervasive deficiencies."

Grupo Simic filed suit at CIT, and asked for a PI against the cash deposits, claiming, that it needed the injunction or else it would suffer irreparable reputational and financial harm.

The trade court denied the motion, finding that the plaintiff failed to show that it will likely suffer immediate and irreparable harm absent the injunction. Citing the dictionary definition of the word "immediate" and precedent that "echoes the dictionary," Vaden ruled that Grupo Simec provided "weak evidence," namely, affidavits from the company's chief financial officer, foreign trade manager and U.S. customers. The judge said the affidavits "are conclusory and insufficient to show immediate and irreparable harm" since they offer no timeline for the alleged firing of employees or insolvency of the company's subsidiary, failing to show how sales lost due to the duties would lead to harm.

"If it was sufficient, an injunction could issue every time a party ceased exporting to the United States to avoid paying the assessed rate," the opinion said. "This result would eviscerate the operation of the antidumping laws and obtaining an injunction would be automatic rather than the 'extremely heavy burden' the law requires.

"Grupo Simec has not met its burden of demonstrating irreparable and immediate harm," the opinion said.

Turning to the likelihood that the plaintiff would succeed on the merits, the judge held that while the respondent's claims "are colorable," the company has failed to show a clear likelihood of success on the merits. The U.S. contests Grupo Simec's six claims in its complaint, and "there is no claim that is obviously meritorious at this stage of the case. At best, this factor is neutral for Grupo Simec," the judge said. "Even if one of the company's six claims were clearly meritorious, an injunction cannot issue without a finding of irreparable harm, which is absent here."

Vaden added that the balance of equities and the public interest favor the government. The judge ruled that the respondent gives "short shrift to the harm potentially caused to the Government," and that the company fails to consider that their assumption of a minimal impact on the U.S. cuts against the findings at the core of this proceeding that a tariff increase is needed to counter serious injury to the domestic industry. Vaden said that even accepting the U.S. customers' affidavits as accurate and that the U.S. construction industry would take a hit, "the public's greater interest lies in following Congress's legislative enactments and ensuring that Customs collects cash deposits sufficient to protect the public fisc."

(Grupo Simec v. United States, Slip Op. 23-22,CIT Consol # 22-00202, dated 02/24/22, Judge Stephen Vaden. Attorneys: James Rogers of Nelson Mullins for plaintiffs led by Grupo Simec; Kara Westercamp for defendant U.S. government; John Shane of Wiley Rein for defendant-intervenor Rebar Trade Action Coalition)