Exporter Challenges CBP 'Gamesmanship' in Seeking to Dismiss Suit on WRO Modification Petition

Exporter Hoshine Silicon (Jia Xiang) Industry Co. on Oct. 18 told the Court of International Trade that it has statutory and constitutional standing to challenge CBP's denial of its petition to modify the withhold release order imposed 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).

Hoshine responded to the government's motion to dismiss the suit for lack of standing (see 2408260044. The U.S. also said one count of the complaint, which challenges the WRO listing decision, should be tossed as being untimely, since the challenge was brought over two years after the WRO was issued. Hoshine described this claim as "ironic," given that CBP "dictated the administrative pathway that Jiaxing Hoshine followed here," but now says the company should have followed a different path and timeline.

"That type of gamesmanship should not be countenanced," the brief said.

Before CBP, Hoshine sought to modify the WRO to allow CBP to exclude a specific and narrowly defined supply chain from the import ban. After several phone calls with CBP's Forced Labor Division, the exporter said CBP encouraged the company to file the modification petition. The agency denied the petition on the grounds that it would undermine the general forced labor enforcement efforts, which allow for clearances of individual shipments.

Hoshine argued that it was only after the petition was denied that it became clear "the agency was taking the position that all Hoshine Group companies must rise or fall together," requiring the company to challenge the WRO listing "in its entirety." Hoshine said it had no reason to challenge the listing decision itself until its petition was rejected, meaning its "statute of limitations on count one thus did not begin to run until that date."

In making this claim, Hoshine relied on the Supreme Court's recent decision in Corner Post v. Bd. of Governors of Fed. Rsrv. Sys., which says the statute of limitations for claims under the Administrative Procedure Act doesn't start until the plaintiff is injured by a federal agency action.

The U.S. said Hoshine doesn't have statutory standing to challenge the petition rejection, since the exporter isn't within the statute's "zone of interests," which solely protects domestic producers and workers. The exporter replied that this "misinterprets" both the zone of interests test and the scope of Section 307 -- the law under which the WRO was imposed.

The zone of interests test only requires Hoshine's interests to be within the zone of interests to be protected or "regulated" by the law, the brief siad. There's "no question" here that Section 307 "directly (indeed, in this case harshly and unfairly) 'regulates' interests held by foreign producers and exporters that are targeted for detentions and/or exclusions by imposing a de facto embargo," the brief said.

The U.S. is also "simply wrong" in claiming Hoshine's interest don't align with the statutory purpose, since Section 307's objective is "to ensure lawful trade and compliance with U.S. import regulations, including addressing forced labor concerns," the brief said. Foreign manufacturers have a "direct interest in demonstrating compliance with these standards."

The government said Section 307 is unlike AD/CVD laws, which allow for specific appeals at CIT. Hoshine said the "absence of explicit statutory remedies in Section 307 does not imply an exclusion from judicial review, especially where the foreign manufacturer’s compliance with U.S. laws is concerned.”

Hoshine added that it has constitutional standing, since it has suffered injury-in-fact. A bare procedural violation is enough to establish standing "where that procedural harm results in other concrete harms" and where there exists the chance the agency's final decision, when procedurally sufficient, "may not be in plaintiff's favor," the brief said. The exporter also contested the government's claim that it hasn't alleged any monetary loss, also challenging the idea that since it hasn't quantified its loss, it has failed to establish economic injury. The company said such a notion is "at odds with well-settled precedent."