Justia International Trade Opinion Summaries

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

The Department of Commerce conducted an antidumping investigation into “Pneumatic Off-The-Road Tires" from China and published results in 2008. In investigations concerning countries with non-market economies (NMEs), such as China, Commerce applies a presumption that all exporters are subject to government control and uses a single antidumping rate for an NME-wide entity. Commerce found DC had overcome the presumption of government control and assigned a separate weighted-average margin. The “entity,” (exporters that failed to overcome the presumption) was assigned a rate of 210.48%, based on facts available with an adverse inference. DC’s assigned margin was 12.91%. During subsequent administrative reviews, those rates remained in place. DC fully cooperated during a fifth review but Commerce determined that it failed to demonstrate the absence of de facto government control and was not eligible for its separate rate. DC had provided its verified sales and production data (resulting in the calculated rate of 0.14%); no other portion of the entity had provided data. Commerce averaged the previous entity-wide rate and DC’s calculated rate, arriving at a final rate of 105.31% applicable to the entity, including DC. The Trade Court concluded that Commerce must assign DC the calculated individual rate.The Federal Circuit reversed. A country-wide NME entity rate may be an “individually investigated” rate under 19 U.S.C. 1673d(c)(1)(B)(i)(I), which Commerce may assign to the unitary group of exporters that have failed to rebut the presumption of government control. Commerce may carry forward an initial NME entity rate, including adverse inferences built into that rate, in subsequent reviews, even where a respondent cooperates but fails to rebut the presumption of government control. View "China Manufactureres Alliance v. United States" on Justia Law

S.C. Johnson imported, from Thailand, Ziploc® brand reclosable sandwich bags, manufactured from polyethylene resin pellets, and tested to ensure compatibility with food contact. Customs classified the bags under Harmonized Tariff Schedule of the United States (HTSUS) subheading 3923.21.00, covering “[a]rticles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of polymers of ethylene.”The Federal Circuit affirmed the Trade Court in rejecting an argument that the bags should have been classified under HTSUS subheading 3924.90.56, covering “[t]ableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: Other” The court concluded that “the majority of the Carborundum factors support[ed] classification under HTSUS Heading 3923” and also determined that the bags were prima facie classifiable under heading 3924, noting that “[t]he sandwich bags are designed in a manner consistent with household food storage.” Because the sandwich bags were prima facie classifiable under both headings, the court applied General Rule of Interpretation 3, which dictates that goods should be classified under the heading that provides the most specific description. The sandwich bags were properly classified under HTSUS heading 3923 because that heading “has requirements that are more difficult to satisfy and describe the article with a greater degree of accuracy and certainty.” View "SC Johnson & Son Inc. v. United States" on Justia Law

The Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 321(g) regulates homeopathic drugs. A 1988 FDA guidance document outlined the circumstances in which the FDA intended to exercise its discretion not to enforce the full force of the FDCA against homeopathic drugs. In 2019, the FDA withdrew the guidance document, explaining that the homeopathic drug industry had expanded significantly and it had received numerous reports of “[n]egative health effects from drug products labeled as homeopathic.” The FDA then implemented a “risk-based” enforcement approach and added six of MediNatura’s prescription injectable homeopathic products to an import alert, notifying FDA field staff that the products appeared to violate the FDCA.The D.C. Circuit affirmed the dismissal of MediNatura’s challenges. When a product is detained under an import alert, the importer is given notice and an opportunity to be heard, so the import alert was non-final agency action. The court declined to enjoin the withdrawal of the 1988 guidance, noting the public’s strong interest in the enforcement of the FDCA. Requiring the FDA to keep in place a guidance document that no longer reflects its current enforcement thinking, particularly in light of present public health concerns related to homeopathic drugs, is not in the public interest. View "MediNatura, Inc. v. Food and Drug Administration" on Justia Law

Bio-Rad’s patents relate to the generation of microscopic droplets, contiguous fluid that is encapsulated within a different fluid, by using a microfluidic chip. Typically, the inner fluid is water-based, while the outer fluid is oil. The patents arise out of research conducted by inventors at QuantaLife. In 2011, Bio-Rad purchased QuantaLife, acquiring QuantaLife’s patent rights. The inventors became employees of Bio-Rad and executed assignments of their rights to applications that later issued as the 664, 682, and 635 patents. Soon after Bio-Rad acquired QuantaLife, three inventors left Bio-Rad to start 10X, which has developed technology and products in the field of microfluidics, with the goal of achieving DNA and RNA sequencing at the single-cell level. Bio-Rad alleged that 10X violated the Tariff Act, 19 U.S.C. 1337, by importing into the U.S. certain microfluidic chips. The Trade Commission concluded that 10X did not infringe the 664 patent by importing its “Chip GB” but infringed the 664, 682, and 635 patents by importing its “GEM Chips.” The Federal Circuit affirmed. The construction of the term “droplet generation region” is consistent with the intrinsic evidence; substantial evidence established that the use of 10X’s GEM chips directly infringes the asserted claims. Bio-Rad proved the elements of induced and contributory infringement of the 682 and 635 patents with respect to the GEM Chips. View "Bio-Rad Laboratories, Inc. v. United States International Trade Commission" on Justia Law