US Opposes Importer's Bid for Attorney's Fees After It Won EAPA Case

The U.S. on Sept. 10 opposed importer Interglobal Forest's bid for attorney's fees after it prevailed in an antidumping and countervailing duty evasion case. The government said Interglobal can't be considered a "prevailing party" because the court's decision sustaining CBP's remand decision reversing its evasion finding didn't "materially alter the legal relationship of the parties" (Interglobal Forest v. United States, CIT # 22-00240).

The evasion decision was reversed not due to an error CBP made but due to the Commerce Department's "change in its position that the entered merchandise" wasn't subject to the AD/CVD orders on hardwood plywood from China, the U.S. argued. The government said that even if Interglobal was a prevailing party, the U.S. position was "substantially justified," since CBP "lawfully relied" on Commerce's scope decision finding the importer's goods fell within the scope of the orders.

CBP reversed the evasion finding on remand after Interglobal's products were removed from the scope of the AD/CVD orders following litigation in a separate case at the trade court (see 2404080020). Interglobal asked the court to make the government pay its attorney's and paralegal's fees, claiming that CBP's investigation against the company had never been backed by substantial evidence and was instead the result of "bad acts" and "various violations of federal regulations" by the government (see 2407090051).

The U.S. said in response that even if Interglobal is found to be a prevailing party and the government wasn't substantially justified in its position, the granting of attorney's fees would be "unjust" under the Equal Access to Justice Act's provision for "special circumstances." Such circumstances exist when the U.S. unsuccessfully advanced good faith novel and credible legal theories, litigated a case of first impression or disputed an "unsettled area of law."

In the present case, an issue of first impression was involved, the U.S. said, in particular the question of "CBP’s reliance on a scope ruling that has subsequently been overturned on appeal to this Court." The brief said that "the law regarding the nature extent of CBP’s authority under EAPA is largely unsettled."

Even if it wasn't unjust to grant Interglobal attorney's fees, the company isn't entitled to the amount of fees for attorneys and paralegals that it claims since Interglobal isn't entitled to fees for proceedings before CBP, the U.S. argued. The importer failed to establish that it's entitled to actual attorney's fees based on a "special factor," as provided for in the law, since the case didn't require specialized customs law skills, the government claimed.

Interglobal also failed to show its entitlement to its requested rate of paralegal fees. The importer also seeks fees related to "unsuccessful claims and claims that unnecessarily prolonged the litigation," the U.S. said. Interglobal claimed that CBP's evasion finding was an abuse of discretion, the decision to start the investigation wasn't legally supported and CBP didn't adhere to EAPA's statutory requirements. CBP said on remand that there was no evasion, rendering Interglobal's allegations "moot such that there was no relief that the Court could provide to IGF."

If the court finds Interglobal is entitled to fees, "the Court should reduce any fees awarded based on IGF’s lack of success on the merits," the brief said.

Lastly, the U.S. said Interglobal's request for fees is "otherwise unreasonable" since it seeks fees for "excessive, irrelevant, vague, and duplicative time entries." Discussion in the brief of this point was largely redacted.