CIT Says Exporter Failed to Timely Raise Error Allegation in AD Review on US Price Tweak

Exporter The Ancientree Co. failed to timely raise a ministerial error allegation regarding an adjustment to its U.S. price in an antidumping duty review, the Court of International Trade held on Oct. 24. Judge Mark Barnett said that the Commerce Department's regulations required Ancientree to identify any ministerial errors present in the preliminary results and make all relevant arguments about them in its administrative case brief -- something the company failed to do.

Ancientree received a 7.71% AD rate in the preliminary results of the 2021-22 review of the AD order on wooden cabinets and vanities from China. Commerce didn't adjust the company's U.S. price by the amount of a subsidy allegedly received from China's Export Buyer's Credit Program, which the agency countervailed in a corresponding countervailing duty proceeding. The exporter didn't raise any alarm bells on the lack of the adjustment, and as a result the agency continued to make the adjustment in the final results. Ancientree ultimately received an 8.26% AD rate.

The exporter is challenging the CVD rate in parallel litigation at the trade court.

After receiving this rate, Ancientree filed its ministerial error allegation, which the agency rejected as being untimely. Barnett agreed, finding the company to have "failed to use" Commerce's process as spelled out in its regulations "to request an export subsidy offset to U.S. price."

The court rejected the exporter's attempt to distinguish past cases based on the "methodological" nature of the alleged errors, finding that claim precluded by two U.S. Court of Appeals for the Federal Circuit decisions -- Dorbest v. U.S. and QVD Food Co. v. U.S. Barnett said Dorbest said both substantive and ministerial errors are waived when not timely raised and QVD Food Co. said Commerce didn't abuse its discretion in declining to address an untimely ministerial allegation.

Ancientree also claimed that its failure to raise the issue after the preliminary results should be excused, since its allegation implicates a "pure question of law" and the agency had the chance to consider the issue when the ministerial error allegation was raised. Barnett rejected both exceptions.

The "pure question of law" exception only applies when the argument requires neither further agency involvement nor additional fact finding or record opening. The court said "in addition to potentially reopening the record to substantiate the basis for an increase to U.S. price, Commerce would have had to grapple with the question whether to make the adjustment when the subsidy rate is subject to litigation." The company gave "no excuse for its failure to include the issue in its case brief," meaning consideration of the allegation would waste time and resources, the court added.

Barnett rejected the second claimed exception, noting that the cases in which the trade court didn't require exhaustion since the agency had a chance to consider the issue "generally involved the timely raising of related issues in the normal course of the administrative proceeding." This exception doesn't "override the requirement to raise ministerial errors or other errors 'at the time appropriate under [an agency's] practice,'" the court said.

The judge lastly said Ancientree's claim that the "statutory nature of the adjustment must prevail over a Commerce regulation requiring exhaustion is not persuasive." The court has never suggested that statutory adjustments "are beyond the purview of administrative exhaustion," the opinion said.

Luke Meisner, counsel for petitioner American Kitchen Cabinet Alliance, said in an email that "we are pleased that the Court reached the right decision and did it in such an expeditious manner.”

(The Ancientree Cabinet Co. v. United States, Slip Op. 24-118, CIT # 23-00262, dated 10/24/24; Judge: Mark Barnett; Attorneys: Gregory Menegaz of deKieffer & Horgan for plaintiff Ancientree Cabinet Co.; Collin Mathias for defendant U.S. government; Luke Meisner of Schagrin Associates for defendant-intervenor American Kitchen Cabinet Alliance)