Court Opinion

ID: 9930691
Source: CourtListenerOpinion
Date Created: 2024-02-07 16:03:38.718633+00
Date Added: 2024-06-11T11:24:36.910236
License: Public Domain

Slip Op. 24-

         UNITED STATES COURT OF INTERNATIONAL TRADE

 NORCA INDUSTRIAL
 COMPANY, LLC,

       Plaintiff,

 and
                                        Before: Jennifer Choe-Groves, Judge
 INTERNATIONAL PIPING &
 PROCUREMENT GROUP, LP,
                                        Consol. Court No. 21-00192
       Consolidated Plaintiff,

 v.

 UNITED STATES,

       Defendant.

                                   OPINION

[Sustaining the negative evasion determination of U.S. Customs and Border
Protection under the Enforce and Protect Act.]

                                                         Dated: February 7, 2024

Peter Koenig, Jeremy W. Dutra, and Christopher D. Clark, of Squire Patton Boggs
(US) LLP, Washington, D.C., for Plaintiffs Norca Industrial Company, LLC and
International Piping & Procurement Group, LP.

Margaret J. Jantzen, Senior Trial Counsel, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, D.C., and Tamari J.
Lagvilava, Office of Chief Counsel, U.S. Customs and Border Protection, of
Washington, D.C., for Defendant United States.
Consol. Court No. 21-00192                                                       Page 2

      Choe-Groves, Judge: This case arises out of U.S. Customs and Border

Protection’s (“Customs”) evasion determination under the antidumping order on

certain carbon steel butt-weld pipe fittings from the People’s Republic of China

(“China”). Customs’ Final Administrative Determination in Enforce and Protect

Act (EAPA) Case No. 7335 (Mar. 22, 2021) (“Final Administrative

Determination”), PR 3791; see Certain Carbon Steel Butt-Weld Pipe Fittings From

the People’s Republic of China (“Order”), 57 Fed. Reg. 29,702 (Dep’t of

Commerce July 6, 1992) (antidumping duty order and amendment to final

determination of sales at less than fair value). Before the Court is the Final

Remand Redetermination (“Remand Redetermination”), Final Remand

Redetermination EAPA Consol. Case No. 7335, ECF No. 58, which the Court

ordered in Norca Indus. Co. v. United States, 46 CIT __, 561 F. Supp. 3d 1379

(2022) (“Norca I”). For the following reasons, the Court sustains Customs’

negative evasion determination in the Remand Redetermination.

                                 BACKGROUND

      On November 6, 2020, Customs determined that substantial evidence

demonstrated that Plaintiffs entered covered merchandise into the United States

through evasion of the Order. Notice of Determination as to Evasion (Nov. 6,

1
  Citations to the administrative record reflect the public record (“PR”), ECF No.
18.
Consol. Court No. 21-00192                                                    Page 3

2020) (“November 6 Determination”) at 1–2, PR 368. Customs initiated on

November 5, 2019 a parallel Enforce and Protect Act (“EAPA”) investigation into

whether Plaintiffs evaded the Order with their entries of merchandise into the

United States based on allegations raised by Allied Group. Id. at 2. Allied Group

alleged that BW Fittings, the former Vietnamese supplier of Plaintiffs’

merchandise, did not produce carbon steel butt-weld fittings in Vietnam, but

transshipped such merchandise from China into the United States. Id.

      Customs’ Regulations and Rulings of the Office of Trade affirmed the

November 6 Determination on March 22, 2021. See Final Administrative

Determination. Plaintiffs filed separate suits challenging the November 6

Determination and Final Administrative Determination, which the Court

consolidated. Order (June 8, 2021), ECF No. 14.

      After Plaintiffs filed their respective Rule 56.2 motions, Defendant requested

a remand of the Final Administrative Determination because Customs had recently

learned that certain documents collected during the investigation were not provided

to the Parties during the investigation or were not included as part of the record.

Def.’s Mot. Voluntary Remand Suspend Current Br. Schedule (“Def.’s Mot.

Voluntary Remand”), ECF No. 23; see also Pl.’s Rule 56.2 Mot. J. Agency R.,

ECF No. 20; Mem. Points Auth. Supp. Pl.’s Rule 56.2 Mot. J. Agency R., ECF No.

21 (“Pl.’s Rule 56.2 Mem.”); Consol. Pl.’s Rule 56.2 Mot. J. Agency R., ECF No.
Consol. Court No. 21-00192                                                  Page 4

22. Defendant conceded that the administrative record was incomplete, stating that

remand would allow an opportunity for a third party, who had submitted numerous

photographs and videos from a November 2019 site visit of BW Fittings’ Vietnam

facility to Customs (but were excluded from the administrative record), to bracket

the business confidential information in its submissions to Customs. Def.’s Mot.

Voluntary Remand at 4; see Pl.’s Rule 56.2 Mem. at 5. On March 11, 2022, this

Court remanded the Final Administrative Determination. Norca I, 46 CIT at __,

561 F. Supp. 3d at 1384.

      The Court stayed this case while Customs referred a covered merchandise

determination to the U.S. Department of Commerce (“Commerce”) to determine

whether Plaintiffs’ Chinese-origin rough fittings purchased from BW Fittings were

covered by the Order in two scenarios: (1) Chinese-origin rough fittings that only

underwent the third stage of production (i.e., finishing processes) in Vietnam and

(2) Chinese-origin rough fittings that underwent both the second and third stages of

production in Vietnam. Customs’ Covered Merchandise Referral Request for

Merchandise Under EAPA Consolidated Case [No.] 7335 (Remand [No.] 7717),

Imported by Norca Industrial Company, LLC and International Piping &

Procurement Group, LP: Antidumping Duty Order on Certain Carbon Steel Butt-

Weld Pipe Fittings from the People’s Republic of China (Sept. 6, 2022) at 4, ECF

No. 53-1.
Consol. Court No. 21-00192                                                     Page 5

      Commerce issued its final covered merchandise determination on September

29, 2023, stating that a rough fitting does not become covered merchandise (or an

unfinished fitting) until after the second stage of production and is a material input

used in the production of an unfinished fitting. Decision Mem. Final Results

Covered Merchandise Inquiry – EAPA Inv. 7335: Certain Carbon Steel Butt-Weld

Pipe Fittings from the People’s Republic of China (Dep’t of Commerce Sept. 29,

2023) (“Final Covered Merchandise Determination”) at 27, ECF No. 53-2.

Commerce determined that the subject merchandise were outside the scope of the

Order. Id.

      In light of Commerce’s covered merchandise determination, Customs filed a

negative evasion determination on January 22, 2024. See Remand

Redetermination. Plaintiffs filed comments asking the Court to sustain the

Remand Redetermination. Pls.’ Cmts. Remand Redetermination (“Pls.’ Cmts.”),

ECF No. 61.

      The Court held a status conference on January 29, 2024. Status Conference

(Jan. 29, 2024), ECF No. 62.

               JURISDICTION AND STANDARD OF REVIEW

      The Court has jurisdiction pursuant to section 517 of the Tariff Act of 1930,

as amended, 19 U.S.C. § 1517(g), and 28 U.S.C. § 1581(c), which grant the Court

jurisdiction over actions contesting determinations of evasion pursuant to
Consol. Court No. 21-00192                                                    Page 6

the EAPA statute. The Court reviews Customs’ evasion determination for

compliance with all procedures under 19 U.S.C. §§ 1517(c) and (f) and will hold

unlawful “any determination, finding, or conclusion [that] is arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law.” 19 U.S.C.

§ 1517(c)(1)(A), (g)(2). The Court reviews determinations made on remand for

compliance with the Court's remand order. Ad Hoc Shrimp Trade Action Comm.

v. United States, 38 CIT 727, 730, 992 F. Supp. 2d 1285, 1290 (2014), aff’d, 802

F.3d 1339 (Fed. Cir. 2015).

                                   DISCUSSION

      Customs has authority under the EAPA to investigate and determine whether

covered merchandise was entered into the customs territory of the United States

through evasion. 19 U.S.C. § 1517(c)(1)(A). “Evasion” is defined as:

      [E]ntering 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 Norca I, the Court remanded the Final Administrative Determination for

Customs to correct the record and reconsider the allegations of evasion. Norca I,

46 CIT at __, 561 F. Supp. 3d at 1384. On remand, Customs placed new
Consol. Court No. 21-00192                                                 Page 7

information on the record and made a covered merchandise referral to Commerce.

Remand Redetermination at 1–3. Commerce’s covered final merchandise referral

concluded that the subject merchandise were outside the scope of the Order. Final

Covered Merchandise Determination at 27. Based on Commerce’s referral,

Customs reconsidered its prior affirmative evasion determination, and in the

Remand Redetermination made a final negative evasion determination.

      Plaintiffs now ask the Court to sustain the Remand Redetermination and

order the immediate liquidation of previously suspended entries. Pls.’ Cmts. at 2–

3. The Government did not file a response to Plaintiffs’ comments, but does not

oppose Plaintiff’s request to sustain the Remand Redetermination. Status

Conference (Jan. 29, 2024).

      The Court concludes that Customs’ Remand Redetermination is supported

by substantial evidence and in accordance with law, and complies with the Court’s

remand order.
Consol. Court No. 21-00192                                               Page 8

                                   CONCLUSION

      For the foregoing reasons, the Court sustains the Remand Redetermination.

Judgment will enter accordingly.

                                                    /s/ Jennifer Choe-Groves
                                                   Jennifer Choe-Groves, Judge

Dated:    February 7, 2024
         New York, New York