CIT Won't Let Solar Cell Exporter Add Claim to CVD Case Not Raised Administratively

Solar cell exporter Risen Energy Co. may not amend its complaint to add a claim against the countervailability of China's Article 26(2) tax program in a suit challenging the 2020 countervailing duty review on solar cells from China, the Court of International Trade ruled in a Nov. 30 opinion. Judge Jane Restani said that because the issue was not raised administratively at any point, Risen now could not bring the claim before the court. Waiving the exhaustion requirement is "inappropriate" because the exporter does not raise a "pure question of law" but one that requires additions to the record, Restani said.

Risen sought to add the claim after the trade court found in a separate case, also brought by Risen, that the Article 26(2) program was not a de jure specific countervailable subsidy (see 2310110036). The tax program makes tax-exempt a resident enterprise's income derived from investment gains in another resident enterprise. In the separate ruling, Restani said the program is not tied to a specific enterprise or industry.

Risen saw the success its co-plaintiff in that separate action, JingAo Solar Co., had by raising the claim and then tried to amend its complaint to raise the same claim in the present challenge on the 2020 CVD review. Though it failed to raise the issue administratively, Risen said that the exhaustion requirement should be waived because there is a "strong interest in accurately calculating" the CV duties.

Restani disagreed, saying the claim is not a "pure question of law," as required in waiving the exhaustion doctrine. The judge noted that Risen "misunderstands the claim it is trying to raise." The company's claim is not about whether the Article 26(2) program is de jure specific, but whether it is a countervailable subsidy, the opinion said. This claim would require a further development of the record, making it not just a legal issue, the judge held.

In addition, it is "far from certain" that the court would've reached the same outcome here as it did in the separate action brought by Risen, the court noted. Restani said her prior opinion merely held that the government failed to defend the de jure specificity analysis, adding the U.S. could still show otherwise.

The judge also ruled that failing to waive the exhaustion requirement will not cause a "grave injustice." Waiving this requirement is required only where parties are "surprised" by a "twist of the law that is impossible to predict," Restani said. "Here, Risen cannot possibly argue that it was surprised by the existence of this issue; it was the lead plaintiff in the case to which it cites," the opinion held. This issue is not a surprise because Risen can at most claim only it did not expect the court to rule the way it did in the separate action.

"When a party declines to contest a matter at the agency level while its co-plaintiff in an ongoing separate case does so, exhaustion will not give way to an exception designed to give shelter to plaintiffs surprised by the law," the judge said. "The only intervening factor in this case is JA Solar’s victory. That alone is not enough reason to allow Risen to amend this complaint to ... add a claim that it previously has made the decision not to make before the agency."

(Risen Energy Co. v. U.S., Slip Op. 23-168, CIT # 23-00153, dated 11/30/23; Judge: Jane Restani; Attorneys: Greg Menegaz of deKieffer & Horgan for plaintiff Risen Energy Co.; Joshua Kurland for defendant U.S. government; Timothy Brightbill of Wiley for defendant-intervenor American Alliance for Solar Manufacturing)