Norca Industrial Company, LLC v. United States
| Decision Date | 11 March 2022 |
| Docket Number | Slip Op. 22-19,Consol. Court No. 21-00192 |
| Citation | 561 F.Supp.3d 1379 |
| Parties | NORCA INDUSTRIAL COMPANY, LLC, Plaintiff, and International Piping & Procurement Group, LP, Consolidated Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Peter Koenig and Jeremy W. Dutra, Squire Patton Boggs (US) LLP, of Washington, D.C., for Plaintiff Norca Industrial Company, LLC, and Consolidated Plaintiff International Piping & Procurement Group, LP. With them on the brief was Christopher D. Clark.
Bret R. Vallacher, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With him on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director.
This case concerns challenges to determinations by U.S. Customs and Border Protection ("Customs" or "CBP") pursuant to the Enforce and Protect Act of 2015 ("EAPA") regarding allegations that Plaintiff Norca Industrial Company, LLC ("Norca") and Consolidated Plaintiff International Piping & Procurement Group, LP ("IPPG") (collectively, "Plaintiffs") evaded the antidumping duty order covering certain carbon steel butt-weld ("CSBW") pipe fittings from the People's Republic of China ("AD Order"). See Antidumping Duty Order and Amendment to the Final Determination of Sales at Less Than Fair Value; Certain Carbon Steel Butt-Weld Pipe Fittings From the People's Republic of China, 57 Fed. Reg. 29,702 (Dep't of Commerce July 6, 1992). Before the Court are Plaintiff Norca Industrial Company, LLC's Rule 56.2 Motion for Judgment on the Agency Record, ECF No. 20; Plaintiff International Piping & Procurement Group, LP's Rule 56.2 Motion for Judgment on the Agency Record ("IPPG's 56.2 Mot."), ECF No. 22; and Defendant's Motion for Voluntary Remand and to Suspend the Current Briefing Schedule ("Defendant's Motion" or "Def.’s Mot."), ECF No. 23. Defendant's Motion indicates that neither Norca nor IPPG oppose remand, "but believe that, for the reasons stated in their motion for judgment, the remand should extend to other issues raised in their motion." Id. For the following reasons, the Court grants Defendant's Motion.
EAPA investigations are governed by 19 U.S.C. § 1517, which directs Customs to initiate an investigation within fifteen business days of receipt of an allegation that "reasonably suggests that covered merchandise has been entered into the Customs territory of the United States through evasion." 19 U.S.C. § 1517(b)(1). "Covered merchandise" is "merchandise that is subject to" antidumping or countervailing duty orders issued pursuant to 19 U.S.C. § 1673e or 19 U.S.C. § 1671e, respectively. Id. § 1517(a)(3). "Evasion," in turn, is defined as:
entering covered merchandise into the Customs territory of the United States by means of any document or electronically transmitted data or information, written or oral statement, or act that is material and false, or any omission that is material, and that results in any cash deposit or other security or any amount of applicable antidumping or countervailing duties being reduced or not being applied with respect to the merchandise.
Id. § 1517(a)(5)(A).
In this case, the Administrative Record Index filed with the Court, ECF No. 18, is not the complete administrative record but includes the administrative Notice of Determination as to Evasion in the form of a letter to the relevant parties from Customs’ Trade Remedy Law Enforcement Directorate, dated November 6, 2020, on EAPA Consolidated Case No. 7335 ("Determination"), ECF No. 18–2. According to this Determination, on October 9, 2019, Allied Group ("Allied"), a U.S. producer of CSBW pipe fittings, alleged to Customs that Norca and IPPG were evading the AD Order by importing CSBW pipe fittings of Chinese origin into the United States that had been "transshipped" through Vietnam. Id. at 2. Customs determined that the allegations were credible and initiated separate but parallel EAPA investigations of Norca's and IPPG's imports pursuant to 19 U.S.C. § 1517(b)(1). See id.
Customs issued CBP Form 28 questionnaires to Norca and IPPG for entry and production documentation and conducted an on-site visit to the facilities of their Vietnamese supplier, BW Fittings Co., Ltd. ("BW Fittings"). Id. at 2–3. From the available information, Customs determined that a "reasonable suspicion existed that at least some of the CSBW pipe fittings imported by Norca and IPPG into the United States ... were manufactured in China and, therefore, should have been subject to AD duties." Id. at 3. Customs then implemented interim measures against Norca and IPPG and informed them that liquidation of their CSBW pipe fittings entered on or after November 5, 2019 (the date of initiation of the two investigations, later administratively consolidated) would be suspended and that the period for liquidating all unliquidated entries entered before that date would be extended.1 See id.
After issuing several subsequent requests for information ("RFIs") to Norca, IPPG, and Allied, Customs analyzed the record pursuant to the substantial evidence standard of 19 U.S.C. § 1517(c)(1)(A) and concluded that the record supported "a determination that Norca's and IPPG's imports of covered merchandise entered the United States through evasion, resulting in the avoidance of applicable AD deposits or other security." Id. at 3–5, 13–14. Customs’ Regulations and Rulings of the Office of Trade affirmed the Determination after de novo administrative review. See Admin. Review Decision, ECF No. 18–3.
Norca and IPPG filed separate suits to contest the Determination and administrative review, and the Court consolidated the cases. Consol. and Scheduling Order, ECF No. 14. After Norca and IPPG filed motions for judgment on the agency record pursuant to USCIT Rule 56.2 (ECF Nos. 20 and 22), Defendant United States ("Defendant") moved for remand. See Def.’s Mot.
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c)2 and 19 U.S.C. § 1517(g)(1). When an "agency recognizes deficiencies in its decisions, explanations, or procedures ... it may ask the court to remand the case back to the agency so that it may correct the deficiency." 3 Charles H. Koch, Jr., Administrative Law and Practice § 8:31(d) (3d ed. 2010); see also SKF USA Inc. v. United States, 254 F.3d 1022, 1028 (Fed. Cir. 2001). "[I]f the agency's concern is substantial and legitimate, a remand is usually appropriate." SKF, 254 F.3d at 1029. An agency's concerns are substantial and legitimate when "(1) [it] supports its request with a compelling justification, (2) the need for finality does not outweigh the justification, and (3) the scope of the request is appropriate." Baroque Timber Indus. (Zhongshan) Co. v. United States, 37 C.I.T. 1123, 1127, 925 F. Supp. 2d 1332, 1338–39 (2013) (citation omitted); see also SKF, 254 F.3d at 1029–30 ().
Defendant contends that its request for remand is substantial and legitimate because it "recently learned" that certain documents collected during the investigation were not provided to the Parties during the investigation or included as part of the record that Customs received for consideration during the administrative review. Def.’s Mot. at 1–2. Plaintiffs "are not opposed to a voluntary remand, but believe that, for the reasons stated in their motion for judgment, the remand should extend to other issues raised in their motion." Id. at 1.
Norca's memorandum accompanying its USCIT Rule 56.2 motion complains in part of a "third party" that submitted numerous photographs and videos from a November 2019 site visit of BW Fittings’ Vietnam facility, and that Norca did not learn about Customs’ communications with the third party or that the third party submitted evidence to Customs until after Customs issued its final determination. Mem. P. & A. Supp. Pl.’s R. 56.2 Mot. J. Agency R. ("Norca's Memorandum" or "Norca's Mem.") at 19–20, ECF No. 21. This legal error was compounded, according to Norca, by Customs’ decision to exclude from the administrative record Customs’ own communications with the third party and the documents and information the third party submitted to Customs pursuant to an investigation request, which Norca argues is a violation of 19 C.F.R. § 165.21 because the administrative record must include, among other things, materials obtained and considered by Customs during the investigation. Id. IPPG raises similar allegations in its 56.2 motion. See IPPG's 56.2 Mot. at 2 (incorporating and adopting Norca's Memorandum)
Defendant concedes that the administrative record is incomplete, stating that remand would allow an opportunity for the "third party" to bracket the business confidential information in its submissions to Customs, and that if it fails to do so, remand would allow Customs to provide a public summary of those materials as well as permit the filing of public summaries of the business confidential information withheld from the public record, steps that will enable the public record to be as complete as...
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