Trade Court Says No Attorney's Fees for Plywood Importer in AD/CVD Evasion Case

The Court of International Trade on Oct. 7 denied importer Interglobal Forest's application for attorney's fees in its suit challenging CBP's affirmative finding of evasion of the antidumping and countervailing duty orders on hardwood plywood from China. Judge Mark Barnett said that Interglobal wasn't a "prevailing party" in the action because the evasion determination was reversed without admitting to an agency error and only after the Commerce Department reversed its scope finding after separate legal action at the trade court.

Barnett added that the government's position was substantially "justified based on the novel nature" of Enforce and Protect Act investigations and CBP's "justifiable reliance" on Commerce's scope ruling. To hold otherwise would make CBP potentially liable for another agency's error, the court said.

The underlying EAPA investigation, which found importers, including Interglobal, liable for evading the AD/CVD orders, spawned three lines of CIT cases. The first challenged the evasion finding, the second targeted Commerce's determination following a scope referral from CBP and the last challenged CBP's liquidation of the entries at issue. The scope ruling was rejected by the trade court and saw Commerce flip its position to find plywood shipped from China to Vietnam outside the scope of the AD/CVD orders.

As a result, CBP asked for a voluntary remand in the present action and likewise reversed its evasion determination (see 2404080020). Interglobal then applied for attorney and paralegal fees, saying CBP's evasion finding was based on weak evidence and issued due to "bad acts" and "various violations of federal regulations" by the government (see 2407090051).

The first contested element of this application was whether Interglobal was a "prevailing party" -- a requirement for fees under the Equal Access to Justice Act. Barnett noted that in settling this question, the U.S. Court of Appeals for the Federal Circuit "has emphasized the role of agency error in determining prevailing-party status." When a remand is ordered without a judicial finding of error or concession of error by the agency, the default rule says the conclusion isn't based on agency error, the judge said, noting case law from CAFC and the Supreme Court.

Since no judicial finding of error or concession of error took place here, Interglobal isn't the prevailing party, Barnett said. At "no point did the court make a finding of error on the part of Customs," the judge said, noting that remand was found to be appropriate after a change in the scope determination due to another CIT case in which Interglobal didn't seek attorney's fees.

The attorney's fees request would see CBP "take account of another agency's redetermination here." The relevant "change in legal relationship" was between Interglobal and Commerce, not Interglobal and CBP, the court said.

Relatedly, Barnett said the government's position was substantially justified. The EAPA statute mandates CBP rely on other agencies' determinations, telling the agency to refer scope issues to Commerce. Nothing in the law "suggests that Customs was empowered to ignore or second-guess Commerce’s scope determination," the opinion said.

The other issues with the evasion determination alleged by Interglobal weren't fully litigated, further cementing the notion that the importer wasn't the prevailing party, Barnett held.

(Interglobal Forest v. U.S., Slip Op. 24-109, CIT # 22-00240, dated 10/07/24; Judge: Mark Barnett; Attorneys: Thomas Cadden of Cadden & Fuller for plaintiff Interglobal Forest; Elizabeth Speck for defendant U.S. government)