Justia International Trade Opinion Summaries

A 2005 Customs ruling letter stated that Kent’s imported bicycle seats would be classified as “accessories of bicycles” under HTSUS heading 8714, with a 10% ad valorem duty. In 2008, after Customs classified a competitor’s bicycle seats as “seats” under duty-free heading 9401. Kent started filing protests, post-entry amendments, and an application for further review. Customs approved the protests and reliquidated Kent’s merchandise under heading 9401. Kent sought revocation of the 2005 Ruling but continued to make entries through New York and lodged protests for each. Customs stopped granting those protests. Kent began to import the same merchandise through Long Beach under heading 8714. Long Beach Customs treated these entries as bypass entries and liquidated them under heading 8714 without examination or Customs officer review. Kent protested. Although the New York protests were granted, Kent’s Long Beach protests were denied. In 2014, Customs revoked its earlier decisions classifying Kent’s competitors’ merchandise under heading 9401, concluding that the merchandise would be classified under heading 8714. Customs declined to revoke the 2005 Ruling.The Trade Court rejected Kent’s claims that the classification violated 19 U.S.C. 1625(c) by departing from a “treatment previously accorded” and was contrary to a de facto “established and uniform practice” (EUP) under section 1315(d). The Federal Circuit reversed. The Trade Court erred in approving Customs’ use of bypass entries to show the absence of treatment previously accorded but properly found no de facto EUP. View "Kent International, Inc. v. United States" on Justia Law

Wanxiang is a U.S. importer for Wanxiang Group, an automotive parts manufacturing company headquartered in China. In 1994-2001, Group and Wanxiang IE participated in Department of Commerce administrative reviews that covered entries of wheel hub assemblies that were subject to a 1987 antidumping duty order. Group and IE were assigned company-specific antidumping duty rates of zero percent. Wanxiang Q did not receive a company-specific antidumping duty rate because it did not participate in the reviews. Following a 2012 audit of Wangxiang, Customs found that some of the audited entries were imports from Q, subject to the China country-wide rate of 92.84%, and that, based on the sampling results, Wanxiang had underpaid dumping duties. In 2019, Customs issued a Penalty Notice.Wanxiang did not protest under 19 U.S.C. 1514 and has not made any payment but filed a complaint before the Trade Court, asserting jurisdiction under 28 U.S.C. 1581(i)(2) and (4). The court dismissed, concluding that it lacked “residual” jurisdiction because relief could have been available under a section 1581(c) action. Wangxiang has not shown that such relief would have been manifestly inadequate. The Federal Circuit affirmed. Wanxiang could have challenged the assessments by a protest under 19 U.S.C. 1514 and, if unsuccessful, by appealing to the Trade Court under 1581(a). Alternatively, Wanxiang could have initiated a test shipment and sought, as a new shipper, an administrative review, during which it could have argued the issues it raised in its complaint; the results of that review could have been challenged under 19 U.S.C. 1516a, invoking Trade Court jurisdiction under 1581(c). View "Wanxiang America Corp. v. United States" on Justia Law

In an antidumping duty investigation on U.S. imports of cold-drawn mechanical tubing from India, the Department of Commerce rejected Goodluck’s submission of supplemental data and relied on “adverse facts available” under 19 U.S.C. 1677e(b) for its less-than-fair-value analysis, which resulted in an antidumping margin of 33.8% ad valorem applicable to Goodluck’s imports. The Court of International Trade agreed with Goodluck that its submission was a permissible correction of a minor clerical error and that it was entitled to submit supplemental information up to the day of verification. Commerce, under protest, conducted a new less-than-fair-value analysis resulting in a zero-percent antidumping margin for Goodluck, which theTrade Court affirmed.The Federal Circuit reversed. Commerce’s initial determination—rejecting Goodluck’s supplemental submission on grounds that it constituted new factual information and not a minor or clerical correction of the record, and that the submission was unverifiable as it was submitted on the eve of verification—was supported by substantial evidence and not otherwise contrary to law. Goodluck’s revisions were a systemic change to the entire reported database. The revisions were not singular, such as a missing word or an error in arithmetic. View "Goodluck India Ltd. v. United States" on Justia Law

Ayla, a San Francisco-based brand, is the registered owner of trademarks for use of the “AYLA” word mark in connection with on-site beauty services, online retail beauty products, cosmetics services, and cosmetics. Alya Skin, an Australian company, sells and ships skincare products worldwide. Ayla sued in the Northern District of California, asserting trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C. 1114, 1125(a).Alya Skin asserted that it has no retail stores, offices, officers, directors, employees, bank accounts, or real property in the U.S., does not sell products in U.S. retail stores, solicit business from Americans, nor direct advertising toward California; less than 10% of its sales have been to the U.S. and less than 2% of its sales have been to California. Alya Skin uses an Idaho company to fulfill shipments outside of Australia and New Zealand. Alya Skin filed a U.S. trademark registration application in 2018, and represented to potential customers that its products are FDA-approved; it ships from, and allows returns to, Idaho Alya Skin’s website listed U.S. dollars as the default currency and advertises four-day delivery to the U.S.The Ninth Circuit reversed the dismissal of the suit. Jurisdiction under Fed.R.Civ.P. 4(k)(2) comports with due process. Alya Skin had minimum contacts with the U.S., and subjecting it to an action in that forum would not offend traditional notions of fair play and substantial justice. The company purposefully directed its activities toward the U.S. The Lanham Act and unfair competition claims arose out of or resulted from Alya Skin’s intentional forum-related activities. View "Ayla, LLC v. Alya Skin Pty. Ltd." on Justia Law

Imported goods are generally subject to tariffs, duties, fees, and taxes, such as an excise tax. A “drawback” is a customs transaction involving the refund of payments made upon the importation of a good. The most common drawback occurs when duties that are paid when a good is imported are refunded when the same good is exported. A “substitution drawback,” involves the refund of duties, taxes, or fees that were paid upon importation and refunded when similar goods, normally merchandise classified under the same tariff schedule subheading, are exported. Since 2008, substitution drawback has been allowed for wine where the imported wine and exported wine are of the same color and the price variation does not exceed 50 percent. Substitution drawbacks could result in a near-total refund of both tariffs and excise taxes paid on imported wine where the substituted exported wine was either not subject to excise tax (having been exported from a bonded facility) or had received a complete refund of previously paid excise taxes, a “double drawback.”Treasury and Customs promulgated Rule.1, an interpretation of 19 U.S.C. 1313(v), intended to prevent “double recovery,” limits drawbacks to the amount of taxes paid and not previously refunded. The Federal Circuit affirmed the Trade Court in finding the Rule invalid. The Rule is contrary to the clear intent and structure of the statute. View "National Association of Manufacturers v. Department of the Treasury" on Justia Law

Plaintiffs, American purchasers of bulk Vitamin C, filed a class action alleging that four Chinese exporters of Vitamin C conspired to inflate prices and restrict supply in violation of the Sherman Act and the Clayton Act. The district court denied defendants' motion to dismiss on the basis of the act of state doctrine, foreign sovereign compulsion, and international comity. After the district court denied defendants' motion for summary judgment, the case proceeded to trial where all defendants settled except for Hebei and its parent company NCPG. Following the jury verdict, the district court entered treble damages against Hebei and NCPG and denied their renewed motion for judgment as a matter of law. The Second Circuit reversed. The Supreme Court then reversed the Second Circuit's judgment and remanded.On remand from the Supreme Court, the Second Circuit once again concluded that this case should be dismissed on international comity grounds. Giving careful consideration but not conclusive deference to the views of the Ministry of Commerce of the People's Republic of China, the court read the relevant Chinese regulations—as illuminated by contemporaneous administrative documents and industry reports—to have required defendants to collude on Vitamin C export prices and quantities as part and parcel of China's export regime for Vitamin C. The court balanced this true conflict between U.S. and Chinese law together with other established principles of international comity, declining to construe U.S. antitrust law to reach defendants' conduct. Accordingly, the court reversed and remanded with instructions to dismiss the case. View "Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd." on Justia Law

Borusan claimed that it was entitled to a post-sale price adjustment based on the total value of penalties it paid for late delivery of products (large diameter welded pipe) to a customer. The Trade Court agreed and remanded to the U.S. Department of Commerce with instructions to grant the claimed post-sale price adjustment and recalculate the resulting antidumping duty margins. On remand, “Consistent with the [CIT’s] remand, and under protest,” Commerce granted Borusan a post-sale price adjustment based on Borusan’s final allocated share of the penalty, which produced a de minimis antidumping duty rate.The Federal Circuit reversed, concluding that the Department of Commerce’s original post-sale price adjustment was supported by substantial evidence and in accordance with law. Commerce determined, in the course of applying the proper factors provided in its regulations, that a potential existed for manipulating the postsale price adjustment because the claimed adjustment was not tethered to what was established and known to the client at the time of sale. Consistent with its legitimate goal of avoiding such manipulation, Commerce correctly set the post-sale price adjustment in a reasonable manner, based on evidence that existed at the time of sale, that addressed its manipulation concerns. View "Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. American Cast Iron Pipe Cp." on Justia Law

The Department of Commerce initiated a less-than-fair-value investigation into the importation of welded line pipe from Korea, focused on sales by two Korea-based respondents, SeAH and HYSCO. Commerce issued a preliminary determination that SeAH likely was selling welded line pipe in the U.S. at less than fair value during the relevant period. SeAH filed a case brief challenging Commerce’s statistical analysis and citing academic literature in support of that challenge. Commerce rejected SeAH’s case brief for violating procedural regulations and issued a final determination. Commerce calculated SeAH’s weighted-average dumping margin to be above the de minimis threshold for less-than-fair-value investigations by applying its differential pricing analysis to SeAH’s sales and selecting the hybrid approach for calculating SeAH’s weighted-average dumping margin. The Trade Court affirmed.The Federal Circuit affirmed in part, upholding Commerce’s rejection of portions of SeAH’s case brief and aspects of the analysis Commerce used to derive the dumping margin. The court vacated and remanded to give Commerce an opportunity to explain whether the limits on the use of the Cohen’s d test to evaluate whether the test group differs significantly from the comparison group were satisfied or whether those limits need not be observed when Commerce uses the test in less-than-fair-value adjudications. The court “invited” Commerce to clarify its argument that having the entire universe of data rather than a sample makes it permissible to disregard the otherwise-applicable limitations on the use of the Cohen’s d test. View "Stupp Corp. v. United States" on Justia Law

TRI filed entries of citric acid, identifying India as the country of origin, which allowed TRI to file the subject entries as type 01 “consumption” entries, which are not subject to duties, rather than type 03 “consumption—antidumping (AD)/countervailing duty (CVD)” entries. Customs requested information regarding the entries. TRI responded with documentation of the purchase and receipt of citric acid monohydrate from suppliers in India and the processing of the citric acid monohydrate into citric acid anhydrous. TRI admits that the origin of the citric acid monohydrate is unknown. Customs extended liquidation of the entries, 19 U.S.C. 1504(b)(1). Customs’ Office of Laboratory and Scientific Services investigated the processing of the citric acid in India; Customs determined that the product was not substantially transformed and therefore not a product of India. The entries would be liquidated with the applicable consumption, anti-dumping and countervailing duties.TRI filed suit in the Court of International Trade, asserting residual jurisdiction under 28 U.S.C. 1581(I). Separately, TRI also protested Customs’ liquidation of its entries. The Federal Circuit affirmed the Trade Court’s dismissal of the suit for lack of jurisdiction because jurisdiction was available under other section 1581 subsections. Where a plaintiff asserts section 1581(i) jurisdiction, it “bears the burden of showing that another subsection is either unavailable or manifestly inadequate.” TRI has not established that a scope determination or a protest were unavailable or manifestly inadequate. View "TR International Trading Co., Inc. v. United States" on Justia Law

Under 19 U.S.C. 1862, if the President receives, and agrees with, a finding by the Secretary of Commerce that imports of an article threaten to impair national security, the President shall take action to alleviate the threat. Section 1862(c)(1) specifies a period within which the President is to concur or disagree with the Secretary’s finding and to determine the necessary action and another period within which the President is thereafter to implement the chosen action.In January 2018, the Secretary found that imports of steel threatened to impair national security by causing domestic steel-production capacity to be used less than the level needed for operation of the plants to be profitably sustained. In March 2018, within the period prescribed, the President agreed with that finding and announced a plan (Proclamation 9705) that imposed some tariffs immediately, announced negotiations with specified nations, and stated that the immediate measures might be adjusted as necessary. Within months, the President determined that imports were still too high to meet the Secretary’s identified target and raised the tariff on steel from Turkey, Proclamation 9772.The Trade Court found Proclamation 9772 unlawful. The Federal Circuit reversed. The President did not depart from the Secretary’s finding of a national-security threat; the March 2018 presidential action announced a continuing course of action that could include adjustments. The President’s decision to take one of several possible steps to achieve the goal of increasing utilization of domestic steel plants’ capacity for national security reasons meets the rational-basis standard. View "Transpacific Steel LLC v. United States" on Justia Law