United States: CIT Establishes When Court-Ordered Relief Takes Effect In Trade Remedy Appeals

International trade litigation requires patience. These disputes often span several years and involve multiple redeterminations by the agency whose action is subject to judicial review. The appeal can get even further complicated when the original proceeding becomes entangled with one or more subsequent administrative proceedings. And even if a party prevails on appeal, a victory may become hollow unless the appropriate agencies implement the redetermination in a timely fashion.

In Sumecht NA, Inc. v. United States, a recent case of first impression before the U.S. Court of International Trade (CIT), Judge Choe-Groves established when the U.S. Department of Commerce (Commerce) must implement court-ordered relief in trade remedy appeals. Her decision also identifies consequences if Commerce fails to implement by the deadline.

Background

Interested parties may appeal trade remedy determinations issued by Commerce to the CIT. If the appealing party prevails and Commerce recalculates the relevant dumping margins or subsidy rates in a remand redetermination, Commerce must publish a so-called "Timken notice" in the Federal Register. This eponymous notice derives from Timken v. United States, in which the U.S. Court of Appeals for the Federal Circuit confirmed that Commerce must publish a notice in the Federal Register when either the CIT or the Federal Circuit renders a decision not in harmony with Commerce's prior determination. 893 F.2d 337, 341 (Fed. Cir. 1990) (discussing 19 U.S.C. § 1516a(c)(1)). Commerce must publish a Timken notice within 10 days from the date that the court issues its contrary judgment. Id. Any imports of subject merchandise that enter the United States after the publication of the Timken notice will liquidate at the recalculated rates. Id.

The Decision

What happens when Commerce fails to publish the Timken notice within ten days? May Commerce remedy the delay by including a retroactive effective date in the notice? In Sumecht, Judge Choe-Groves answers both questions, and neither answer favors Commerce.

The facts in Sumecht are mostly straightforward. A dispute arose over an antidumping determination issued by Commerce concerning solar cells from China. Slip Op. at 3–7. The CIT remanded various aspects of that determination to Commerce, including the 24.48 percent dumping margin assigned to Sumecht NA, Inc.. Id. Commerce revisited its prior determination and ultimately assigned Sumecht a much higher margin of 238.95 percent. Id. The CIT sustained Commerce's revised determination. Id.

Because the CIT's judgment conflicted with Commerce's original determination, Commerce had to issue a Timken notice. Instead of publishing the Timken notice within 10 days, Commerce did so on November 23, 2015, some 49 days after the CIT issued its contrary judgment. Id. at 6. That means Commerce missed the Timken notice deadline by 39 days. Id. In an attempt to remedy its tardy action, Commerce set the effective date for the notice to 10 days after the contrary CIT decision (i.e., October 15, 2015). Id. at 6–7.

Here is where the facts get complicated. As the dispute over Commerce's original antidumping determination on solar cells continued before the CIT, China contested that same Commerce determination at the World Trade Organization (WTO) and won. In August 2015, Commerce implemented the adverse WTO ruling pursuant to Section 129 of the Uruguay Round Agreements Act. Id. at 5. Commerce assigned a revised duty margin of 13.18 percent to Sumecht's entries that entered the United States on or after August 2, 2015. Id.

Fast-forward to November 2015. Sumecht imported products containing solar cells from China between November 9 and November 23, 2015. Id. at 7. Arguments arose over the appropriate dumping margin that should apply to those imports. Sumecht argued that it should receive the lower, WTO-consistent dumping margin of 13.18 percent. Commerce published notice of that margin in August 2015, and that margin took effect that same month. Commerce argued that the 238.95 percent dumping margin calculated in its remand redetermination should attach to Sumecht's imports. Commerce included that margin in the Timken notice, which was published on November 23, 2015. In that same notice, Commerce gave the 238.95 percent margin an effective date of October 15, 2015.

In three parts, Judge Choe-Groves determined which dumping margin attaches to Sumecht's imports. First, she concluded that the "plain language" of the statute imposed an "obligation" on Commerce to publish the Timken notice within 10 days of the adverse court decision, such that Commerce acted unlawfully when it failed to do so. Id. at 10. Second, she held that Commerce could not remedy its tardiness with a retroactive effect date in the Timken notice, such that the lower, WTO-consistent dumping margin of 13.18 percent applies to Sumecht's entries. Recall that Commerce's Timken notice (containing the higher margin of 238.95 percent) did not publish in the Federal Register until November 23, 2015. Judge Choe-Groves determined that the higher margin could not apply before that date because the statute unambiguously states "that subject merchandise is liquidated in accordance with Commerce's {prior} determination until the date of publication {of} the {Timken} notice." Id. at 13 (emphasis added). Finally, she determined that Commerce's delay in publishing the Timken notice did not amount to harmless error because "{r}etroactive application of the {238.95 percent} duty rate . . . would cause a higher rate to apply to {Sumecht} before being put on notice by the issuance of the Timken {n}otice" and "affect {Sumecht}'s ability to make appropriate business decisions and take actions with the benefit of information required by a statutorily-mandated notice." Id. at 15.

Bottom Line

Sumecht contains a straightforward holding: revised dumping margins or subsidy rates will not take effect until Commerce publishes a Timken notice of those recalculations in the Federal Register. This bright line rule provides clear guidance to companies who challenge before the CIT the antidumping and countervailing duties assigned to products that they export and import.

The holding in Sumecht, however, should not be overstated. It concerns the unique scenario in which the retroactive application of a Timken notice would impose a higher dumping margin on particular imports. What if Commerce failed to timely publish a Timken notice, but when published, the notice retroactively applies a lower duty margin? In that situation, Judge Choe-Groves explained that Commerce's tardiness likely would constitute harmless error because importers "would benefit from the retroactive application of a lower duty rate, contrary to the situation in the case before this court." Id. at 11 & n.2. Notably, she does not answer whether an importer could assert prejudicial harm if Commerce fails to timely publish a Timken notice with a lower dumping margin and does not include a retroactive effective date. Nor does she answer whether a petitioner could assert actionable harm under any circumstances.

Undoubtedly, Sumecht is not the last word on this issue. Commerce routinely misses the deadline for publishing a Timken notice. Expect more litigation if Commerce continues to delay the publication of a Timken notice in other cases.

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