Opinion ID: 2656983
Heading Depth: 4
Heading Rank: 1

Heading: the costs imposed are unrelated to the amount

Text: of actual harm suffered and are related more to the penalized party’s conduct, (2) the proceeds from infractions are collected by the state, rather than paid to the individual harmed, and (3) the statute is meant to address a harm to the public, as opposed to remedying a harm to an individual. Huaiyin, 322 F.3d at 1380 (quoting Ingalls Shipbuilding, Inc. v. Dalton, 119 F.3d 972, 978 (Fed. Cir. 1997) (discussing when a statute imposes a penalty in the context of contract law)). Nevertheless, as both parties conceded at oral argument and Huaiyin itself suggests, 322 F.3d at 1380-81, the three-part Huaiyin test is not exclusive and was developed without the benefit of the Supreme Court’s decision in Smith, which was decided less than a month before Huaiyin and never cited in it. The component parts 20 GUANGDONG WIREKING HOUSEWARES v. US of Huaiyin test largely overlap aspects of the Supreme Court’s seven part test. 1 The first three and final two Smith factors do not support a finding that the 2012 law is punitive. They cut in the opposite direction. Under the first factor, as described in greater detail below, countervailing duties have not “been regarded in our history and traditions as a punishment.” Smith, 538 U.S. at 97; see Nucor Corp. v. United States, 414 F.3d 1331, 1336 (Fed. Cir. 2005); Huaiyin, 322 F.3d at 1380, 1381; Chaparral Steel Co. v. United States, 901 F.2d 1097, 1103-04 (Fed. Cir. 1990). Under the second factor, the 2012 amendment does not constitute “an affirmative disability or restraint.” Smith, 538 U.S. at 97. This reference to disability or restraint concerns the liberty of individual persons. As the Supreme Court explained in Smith, the paradigmatic affirmative disability or restraint is physical restraint, i.e., imprisonment. Id. at 100 (citing Hudson, 522 U.S. at 104). Such restraints are not at issue here. With respect to the third factor, the 2012 amendment does not promote the “traditional aims of punishment.” Id. at 97. Instead, the amendment creates a remedy for unfair conduct when it occurs. The sixth and seventh factors—“whether the regulation comes into play only on a finding of scienter” and “whether the behavior to which it applies is already a crime”—are not applicable to the present case. Id. at 105. We find that these factors weigh against a finding that the 2012 law is punitive. 2 Only two of the seven Smith factors (the fourth and fifth factors) could possibly support Wireking’s position. And these two factors overlap with the three factors articulated in Huaiyin. The fourth factor is essentially directed towards determining whether the law has an alternative, non-punitive purpose. The fifth factor adGUANGDONG WIREKING HOUSEWARES v. US 21 dresses the relationship between the law’s effects and its purported remedial purpose. The fourth Smith factor—whether the regulation “has a rational connection to a nonpunitive purpose,” id. at 97—is both “a ‘[m]ost significant’ factor,” id. at 102 (quoting United States v. Ursery, 518 U.S. 267, 290 (1996)), and the most relevant to this case. It is well established that antidumping and countervailing duty laws are remedial in nature. Both the courts and Congress have consistently confirmed this understanding. See Nucor, 414 F.3d at 1336 (“[T]he purpose of antidumping and countervailing duty laws is remedial, not punitive or retaliatory.”); Huaiyin, 322 F.3d at 1380, 1381; Chaparral Steel, 901 F.2d at 1103-04 (clarifying that trade duties are intended to be “solely remedial”); Peer Bearing Co. v. United States, 182 F. Supp. 2d 1285, 1310 (Ct. Int’l Trade 2001); BadgerPowhatan v. United States, 608 F. Supp. 653, 656 (Ct. Int’l Trade 1985); S. Rep. No. 92-1221, at 8 (1972) (Conf. Rep.) (“[C]ountervailing duties are not, nor were they ever intended to be, penal in nature; they are remedial in nature inasmuch as they operate to offset the effect of subsidies afforded foreign merchandise.”). Indeed, Wireking itself concedes that “countervailing duty and antidumping laws in general are remedial in nature,” Appellant’s Br. 48, “[these duties] in general address different issues,” Appellant’s Reply Br. 17, and countervailing duty law “in general imposes duties that are proportional to the harm.” Id. Thus, the primary purpose of antidumping and countervailing duties generally is remedial, not punitive. The current amendment does not stray from the re- medial nature of trade duties generally. The 2012 amendment enables Commerce to apply countervailing duties to NME imports. Thus, this law simply extends Commerce’s ability to impose countervailing duties to a new group of importers. And like countervailing duty law generally, the specific purpose of the new law is to remedy 22 GUANGDONG WIREKING HOUSEWARES v. US the harm American manufacturers and their workers experience as a result of unfair foreign trade practices. Although the government, as opposed to American manufacturers themselves, receives the duties levied on NME imports, the specific purpose of these laws is to level the playing field for particular American manufacturers, which is relevant under the third Huaiyin factor. Huaiyin, 322 F.3d at 1380 (“remedying a harm to an individual” suggests that the law is non-punitive). Thus, like antidumping and countervailing duties generally, the specific purpose of the 2012 amendment is remedial, not punitive. 3 Wireking focuses primarily on the fifth factor— whether the regulation “is excessive with respect to this purpose,” Smith, 538 U.S. at 97—a factor similar to the first Huaiyin factor—whether “the costs imposed are unrelated to the amount of actual harm suffered and are related more to the penalized party’s conduct.” Huaiyin, 322 F.3d at 1380. Wireking admits that the imposition of both antidumping and countervailing duties on imports from NME countries does not in and of itself have a punitive effect. Indeed, Wireking admits that the law would not violate the Ex Post Facto Clause if it simply made no adjustment at all for double counting. The law’s vice, in Wireking’s view, is that it makes no doublecounting adjustment for proceedings commenced between November 20, 2006, and March 13, 2012, while adjusting for proceedings commenced thereafter. Wireking argues that the antidumping and countervailing duties it must pay account for the same subsidies, and this double counting derogates the law’s remedial effect and renders it punitive. Wireking’s mistake lies in its attempt to parse the antidumping law into discrete parts and apply the ex post facto analysis to each detached portion. Even if the 2012 law could be considered separately from the overall antiGUANGDONG WIREKING HOUSEWARES v. US 23 dumping and countervailing duty law, treating aspects of the 2012 legislation in isolation is not consistent with Supreme Court authority. In Smith, the appellees made a similar argument to the one set forth in the case: they contended that the law at issue, a sex offender registration statute, lacked the necessary regulatory connection because it was not “‘narrowly drawn to accomplish the stated purpose.’” Smith, 538 U.S. at 103 (quoting Brief for Respondents 38). The Ninth Circuit agreed with the appellees, finding that the law was “excessive in relation to its regulatory purpose . . . [because]: first, . . . the statute applie[d] to all convicted sex offenders without regard to their future dangerousness; and, second, . . . it place[d] no limits on the number of persons who ha[d] access to the information.” Id. In response to this argument, the Supreme Court explained that, “[a] statute is not deemed punitive simply because it lacks a close or perfect fit with the nonpunitive aims it seeks to advance.” Id. The Court repeatedly emphasized that even though a law may, in certain circumstances, have an effect that resembles punishment, such imperfect legislation cannot be deemed punitive if its principal impact is non-punitive. Id. at 99, 100, 102, 103. So here. Although the 2012 amendment may permit some ret- roactive double counting, this small “imprecision” does not vitiate the law’s remedial effect generally. See also Seling, 531 U.S. at 263. While the remedial purpose of the 2012 law may “lack[] a close or perfect fit” with its overarching remedial intent, such a potential flaw does not render it punitive. Smith, 538 U.S. at 103. The predominant effect of the new law is remedial. Indeed, if perfect proportionality were necessary to prevent a remedial duty from transforming into a punitive one, most trade laws would fall if applied retroactively since, as we have recognized in past cases, imperfections are a feature of trade law generally. See, e.g., Changzhou Wujin Fine Chem. Factory Co., Ltd. 24 GUANGDONG WIREKING HOUSEWARES v. US v. United States, 701 F.3d 1367, 1376 (Fed. Cir. 2012) (“We have recognized that in some circumstances, antidumping investigations require calculations that are ‘by necessity imperfect . . . .’”). Wireking’s approach is particularly problematic because double counting is hardly a simple calculation, as this case demonstrates and the 2012 legislation recognized by providing for relief only where “the administering authority is []able to identify and measure subsidies provided by the government of the nonmarket economy country.” Application of Countervailing Duty Provisions to Nonmarket Economy Countries, Pub. L. No. 112-99, March 13, 2012, 126 Stat. 265 (March 13, 2012). In this case, it is not entirely clear that such double counting has even occurred. The existence of an ex post facto violation cannot depend on the existence of a complex and unclear calculation designed to determine whether the law goes beyond what is necessary to remedy the injury incurred in a particular case. In summary, Wireking has not shown, let alone by the clearest proof, that the absence of a retrospective doublecounting provision negates the law’s predominantly remedial impact. Thus, under the Smith analysis, we find that the 2012 law is not punitive and does not violate the Ex Post Facto Clause. AFFIRMED GUANGDONG WIREKING HOUSEWARES v. US 25