CAFC Says Surety Must Pay $6 Million in AD Duties; CBP Hadn't Notified of Suspended Entry
The U.S. Court of Appeals for the Federal Circuit on Dec. 27 affirmed the government’s right to collect over $6 million in surety bonds from Great American Insurance Co. to cover antidumping duties owed on entries of freshwater crawfish tail meat from China. The court said CBP’s failure to notify Great American of the suspension of liquidation of the entries did not invalidate the government lawsuit or the bonds, upholding an August 2011 decision from the Court of International Trade (see 11090903).
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Although CBP is required by 19 USC 1504(c) to notify the importer of record and any authorized agent or surety when an entry has been suspended, the law does not provide a consequence for failure to do so, the court said. Whether the suspension of liquidation was valid depended on the degree of “prejudice” suffered by Great American, said CAFC.
In this instance, the government’s failure to notify Great American didn’t cause any great injury to the company, said the court. The bonds in question were single transaction bonds, so the scope was limited for Great American to change its business practices with respect to the now-defunct importer of record. Additionally, antidumping duties on crawfish tail meat from China had been in place for some time, and the entries were marked as requiring payment of AD duties, so Great American knew the risks involved.
Having decided the lower court correctly decided that Great American owed the government AD duties, CAFC turned to the issue of whether Great American also owed interest. The government had asked CIT to reconsider its decision to order both prejudgment and postjudgment interest from Great American, but the lower court in April 2012 rejected the government’s request (see 12041310).
CAFC agreed with CIT that no prejudgment interest was warranted. The government’s case briefs didn’t go into any depth as to why prejudgment interest was warranted, the court said. Because prejudgment interest isn’t automatic -- an analysis of why it should be awarded is required -- the court couldn’t award it on such a threadbare basis. Regarding the government’s argument that 19 USC 580 required an award of prejudgment interest, the appeals court found the issue of whether Section 580 can apply to antidumping duties was even less settled and more in need of fully developed arguments.
But postjudgment interest was warranted, said the appeals court in its only reversal of CIT’s findings. Statutes on court procedures at 28 USC 1961(c)(4) provide for postjudgment interest on any civil monetary judgments in any district court, and that includes CIT, the appeals court said. The government didn’t have to develop that argument, because postjudgment interest is a given, said the appeals court as it remanded to CIT for calculation of how much postjudgment interest was owed.
(U.S. v. Great American Insurance, CAFC No. 2012-1462/1473, dated 12/27/13, Judges Prost, Plager and Taranto)
(Attorneys: Jeanne Davidson for plaintiff U.S. government; Carter Phillips of Sidley Austin for defendant Great American Insurance Company of New York)