Barnett Hears Arguments in Case Involving Five-Year-Old Administrative Review

Chinese truck and bus tire exporters subject to a nearly 5-year-old administrative review that was delayed by an ongoing court challenge should still have kept their records while the litigation played out (see 2402060054), Judge Mark Barnett said during oral argument in the case. During the review, the Commerce Department removed separate rate status for four exporters who refused to serve as mandatory respondents because they said they hadn’t kept the necessary records (YC Rubber Co. (North America) v. U.S., CIT # 19-00069).

Barnett called the argument that the respondents shouldn’t have been expected to hold on to their records throughout the course of the review “kind of silly.”

“It's a five-year time period in which these companies knew they were still subject to administrative review,” he said. “That's a ridiculous argument that doesn't give them permission to destroy the documents that they need, if the administrative review continues, and if there's a request for information from that company.”

He said the same would be true if, under similar circumstances, a company had gone bankrupt.

Jordan Kahn, attorney for Sutong Tire Resources, said that flexibility was warranted because the situation was highly unusual; another attorney called the situation “the fruit of a poisonous tree,” the result of Commerce failing to follow the law “a long, long time ago.”

“Your Honor, you've been doing that for a lot longer than I have,” Kahn said. “Have you seen a case like this? I certainly have not.”

Kahn said his clients were very concerned about the judge issuing a “light-touch” remand order, noting that the review has been going on for a “very long time” and that cases such as these are expensive.

In response, DOJ attorney Ashley Akers said that procedural timelines generally drag in judicial proceedings -- especially if, as the plaintiffs did, a party appeals to the U.S. Court of Appeals for the Federal Circuit. She said the lengthy process was not the Commerce Department’s fault, adding that Kahn’s challenges were “equity-type arguments that don’t actually undermine Commerce’s determination here.”

Turning to the government, Barnett told Akers he was “having a hard time understanding the rationale of the agency” in revoking the plaintiffs’ separate rate statuses. He said that the department had only offered a “conclusion,” not an “explanation.”

“At the end of the day, the agency can't just say, ‘You didn't participate, facts available,’” he said.

Akers said Commerce hadn’t been able to verify the plaintiffs’ separate rate certifications because they hadn’t responded to mandatory questionnaires.

But that was the case as well for Jinlong, a separate rate company that had never been approached to act as a mandatory respondent, the judge pointed out. Commerce generally doesn’t require all separate rate respondents to fill out such questionnaires to verify their certifications, he said.

“I mean, what?” he said.

Kahn and other attorneys also argued that plaintiffs’ separate rate statuses had become a settled issue after they weren’t addressed by CAFC on appeal. Commerce shouldn’t have been allowed to relitigate them, they said.

Barnett said that argument didn’t make sense.

“I mean, all y’all were there on the appeal, saying, ‘Hey, they can’t base the rate on one [respondent], they have to base the rate on more than one,’” Barnett said. “And now you’re saying, ‘Gee, they can’t look at me! Law of the case says I was entitled to a separate rate.’ Well, where else are they supposed to get to more than one if it’s not you guys?”

That was exactly what they had been fighting for on appeal to CAFC, the judge said. He said they had specifically earned a ruling that two respondents were needed in the review, so they couldn’t now argue against Commerce's search for a second.

“I mean, congratulations, you won,” he said.