CIT Sends Back Wooden Furniture EAPA Case for Failure to Submit Summaries of Confidential Info

CBP failed to provide public summaries of the confidential information in an Enforce and Protect Act antidumping duty evasion investigation, the Court of International Trade ruled in a Nov. 28 opinion. Judge Jennifer Choe-Groves sent back parts and upheld parts of the EAPA finding, ultimately also remanding CBP's decision to retroactively cover entries made before the EAPA statute came into force and include merchandise found by the Commerce Department in a scope ruling to not be covered by the order.

The case concerns the EAPA investigation that found that importer Aspects Furniture International (AFI) evaded antidumping duties on wooden bedroom furniture from China. AFI took to the trade court to argue, among other things, that CBP violated its due process protections by failing to include a mechanism through which it could access the complete and unredacted record behind the evasion finding (see 2011160031). The importer also said that the lack of a meaningful opportunity to be heard before interim measures were put in place deprived it of its due process.

“Customs’ evasion decisions issued in this case, as well as its underlying investigation, presented numerous flaws, and we are very pleased that the Court agreed with our position on the most fundamental aspects," counsel for AFI said.

Choe-Groves first ruled that AFI has "statutory and regulatory rights to appropriate process under the EAPA statute and its regulation" given that importers have a protected interest in the proper assessment of duties on already imported goods. Citing the key Royal Brush v. U.S. CIT case, the judge then said that CBP failed to provide AFI with adequate public summaries of the record's confidential information given that the record does not have a summary of the redacted information in the verification report -- a "problematic" prospect since CBP heavily leans on the verification report in its evasion finding. As such, the court remanded the issue to Commerce.

As for AFI's challenge related to the interim measures, Choe-Groves said that since CBP's regulations gave the plaintiff a chance to contest the evasion allegation and the imposition of interim measures, and AFI could have taken advantage of this chance via several written submissions, AFI did not show that it was deprived of due process in this instance.

AFI further argued that CBP illegally retroactively applied the EAPA statute and regulations to entries made before the statute took effect -- an issue of first impression for the trade court. On this question, the judge said that the statute was clear on when the law took effect. "Because the language is clear that the EAPA statute entered into force on August 22, 2016, 180 days after the Trade Facilitation and [Trade] Enforcement Act of 2015 was enacted, the Court concludes that Customs’ interpretation of 19 C.F.R. § 165.2 is unlawful because the retroactive application of this regulation would effectively allow an EAPA investigation to affect conduct and entries made prior to the EAPA statute entering into force," the opinion said.

The plaintiff also claimed that CBP relied on "illegal hearsay evidence" when making its evasion finding. AFI said that statements from CBP employees in the verification report alleged that these employees saw AFI employees deleting and destroying documents and correspondence. AFI challenged that these statements are hearsay and that CBP illegally decided not to consider affidavits offered by the plaintiff that address these allegations of document destruction.

Choe-Groves noted that CBP "did not provide any analysis about the truthfulness, reasonableness, or credibility of the disputed evidence in weighing the accounts of the Verification Report, though Customs asserted that the evidence was not needed to establish substantial evidence of evasion." The judge ruled that the decision to disregard the affidavits was not arbitrary or capricious, but since the case is remanded for other issues, CBP can decide to put forth greater explanation over the "truthfulness, reasonableness, or credibility of the evidence in dispute." Further, since the affidavits were submitted late, CBP properly did not consider them.

Lastly, the plaintiff said that CBP illegally disregarded a scope ruling from Commerce that declared that some of the importer's merchandise was outside the scope of the AD order. The U.S. first claimed that since AFI failed to raise the issue administratively, the issue was moot. Choe-Groves said that this was not the case, given the plaintiff's arguments in its written arguments in its request for administrative review, and moved onto the merits of the claim. The U.S. said that CBP should be allowed to disregard the scope referral since AFI's entry documents had many "misstatements" about its merchandise, a thorough cargo examination is no longer possible and CBP cannot find whether each entry had covered merchandise.

"The Court concludes that Customs cannot disregard Commerce’s Final Scope Ruling that Customs requested pursuant to the EAPA statute, nor can Customs substitute itself as the administering authority contrary to statute, simply because Customs disagrees with Commerce’s Final Scope Ruling," the opinion said. "... Because Customs included both covered and non-covered merchandise in its EAPA investigation, the Court remands this matter for further consideration by Customs with instructions to only include merchandise within the scope of the Order in the EAPA investigation.

(Aspects Furniture International v. United States, Slip Op. 22-132, CIT #20-03824, dated 11/28/22, Judge Jennifer Choe-Groves. Attorneys: Robert Snyder of the Law Offices of Robert W. Snyder for plaintiff Aspects Furniture International; Douglas Edelschick for defendant U.S. government)