US Says Service Through German Exporter’s Counsel Adequate Under Court Rules

The U.S. said May 28 that service through a German exporter’s U.S. counsel of record in another case was adequate under the trade court’s rules of civil procedure (U.S. v. Koehler Oberkirch, CIT # 24-00014).

Exporters Koehler Oberkirch and Koehler Paper, whom the U.S. claims owe nearly $200 million in unpaid duties (see 2401240072), contested service of their summons May 13 (see 2405140034). They argued that service should instead have been done “through diplomatic channels.”

But the choice by the U.S. to serve the defendants via their U.S. counsel was equally as valid an option as serving them through diplomatic channels would have been, the U.S. said. It said the rules of civil procedure don’t indicate a preference for one of those service methods over the other.

It also disagreed with the exporters that failing to utilize diplomatic channels would “offend international comity.” The German court, in its ruling, was simply saying that it itself declined to serve the summons on the defendants, the U.S. said; it requested that the U.S. instead serve Koehler through diplomatic channels, but didn’t say “that service would offend state sovereignty.”

And it took issue with the exporters' claim that the alleged “punitive” 75.36% tariff rate at the heart of the case would be viewed by the German government as disproportionate, calling the argument “problematic for a number of reasons.”

The Court of International Trade has already found twice that the 75.36% rate on German paper products was not punitive, the government said.

And it said that the defendants were clearly hoping to delay initiation of the litigation by requiring service through diplomatic channels, potentially so that the German government would enter negotiations with the U.S. to solve the matter by political means. But the purpose of service is simply to notify a party of the commencement of a case, the U.S. said.

It called the slow-moving diplomatic channels “a process that defendants hope will lead to service being used as a bargaining chip to escape their debt.”