US Says Exporter Has No Constitutional, Statutory Standing to Challenge WRO

The U.S. told the Court of International Trade on Aug. 23 that exporter Hoshine Silicon (Jia Xing) Industry Co. doesn't have statutory or constitutional standing to challenge CBP's denial of the company's request to remove it from a withhold release order (WRO) on silica-based products made by its parent company Hoshine Silicon and its subsidiaries (Hoshine Silicon (Jia Xing) Industry Co. v. United States, CIT # 24-00048).

Filing a motion to dismiss, the government claimed that the exporter, which goes by Jiaxing Hoshine, isn't within the statute's "zone of interest," and that the claimed economic and reputational harms aren't concrete enough to provide constitutional standing.

The U.S. said it provides a chance for all parties, including foreign manufacturers, to request a modification or revocation of a WRO if a company remediates all forced labor indicators or shows that forced labor wasn't used. In 2021, Jiaxing Hoshine met with CBP to request the modification of the WRO to exclude its specific supply chain. The agency denied the request but said the exporter could show that individual shipments were devoid of forced labor.

Instead, Jiaxing Hoshine challenged the WRO at the trade court under Section 1581(i), the court's "residual" jurisdiction (see 2402210045).

The government then filed its motion to dismiss, claiming that the exporter doesn't have standing to sue under the statute, 19 U.S.C. 1307, that bans the import of goods made with forced labor. The U.S. said CIT ought to conduct a "zone of interest" analysis, which is meant to limit lawsuits under statutorily granted causes of action to the class of parties intended to be protected by the statute. The government argued that Section 1307's "zone of interest" is "limited to domestic producers and workers and those regulated by the statute."

Adhering to the statute's zone of interest "becomes especially important in the trade sphere," because no party has a "constitutionally protected right to import, or even to engage in international trade," the brief said. Here, the law gives "no rights to the foreign manufacturer for a cause of action against the enforcement of section 1307," the U.S. claimed. The purpose of the law is to shield domestic producers and workers from the unfair competition presented by forced labor.

The U.S. made this point by contrasting Section 1307 with the antidumping and countervailing duty statutes, which explicitly provide outlets for foreign producers to challenge agency decisions. And while CBP set up a process to request the modification or revocation of a WRO, these processes are a "courtesy" and don't establish any standing rights in federal courts, the government argued.

Jiaxing Hoshine also doesn't have constitutional standing to challenge the WRO, the brief said. The exporter first claimed it suffered concrete harm since its customers have stopped engaging in business with the company following the WRO. The government argued that these "vague allegations" fail to establish standing, since "Jiaxing Hoshine has not quantified its loss by any measure, such as by providing monetary values from the contracts that have purportedly not been executed as a result of the WRO." The company offers no specifics, failing to articulate any concrete injury, the brief said.

Even if the harm was concrete, Jiaxing Hoshine failed to show that the WRO is the cause of the injury, because there is no factual basis on which the court could find the contracts were axed due to CBP's actions. As a result, the exporter can't show that "enjoining the WRO would cure its alleged harms," the brief said.

Jiaxing Hoshine also tried to claim it suffered a concrete harm from the fact that its goods are "automatically presumed to have been manufactured using forced labor" as a result of the WRO. The U.S. responded that it's "not clear what specific harm is being alleged by this claim," and that the exporter can't claim it's completely barred from importing goods to the U.S. since it has the option of establishing the admissibility of its individual shipments.

Lastly, the exporter alleged it suffered reputational harm due to the WRO. The government said Jiaxing Hoshine again failed to allege this harm with specificity and that the company only advanced "bare conclusions of reputational harm." The exporter "has not identified a close historical or common-law analogue for the asserted injury and, without such, Jiaxing Hoshine has not stated a concrete reputational harm or established standing based on alleged reputational harm."