CAFC Orders Refunds of AD/CVD Cash Deposits on China Wind Towers to Proceed
The U.S. Court of Appeals for the Federal Circuit on Jan. 24 gave a green light to refunds of antidumping and countervailing duty cash deposits collected during the investigations on utility scale wind towers from China. The domestic Wind Tower Trade Coalition had appealed from the Court of International Trade, after the lower court denied an injunction preventing liquidation of wind towers from China entered between June 6, 2012, and Feb. 12, 2013. CAFC agreed with the lower court’s decision, finding the lawsuit unlikely to succeed, and refused to grant a preliminary injunction putting liquidation on hold.
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The dispute originated from a split vote by the International Trade Commission that the Commerce Department interpreted to mean AD/CV duties couldn’t be collected retroactively. In its final injury vote, the ITC tied three to three on the question of injury to domestic injury, which under AD/CVD law resulted in an affirmative injury determination. Only two of the three commissioners found actual injury, however. The other affirmative voter found only a threat of injury, and said that even if there had been no provisional measures imposed -- that is, even if liquidation hadn’t been suspended and cash deposits hadn’t been collected for wind towers collected during the investigation -- actual injury still would not have occurred. Without a determination of actual injury from imports during that period, Commerce in its AD/CVD orders directed CBP to liquidate entries made during the provisional measures period, and refund cash deposits that had been collected on them.
The exact same voting pattern had occurred once before, and was also the subject of a lawsuit. CIT in 1992 reversed Commerce’s decision to retroactively collect cash deposits. The ITC had voted three to three, and one of the three voters that found injury said that injury would not have occurred even if liquidation hadn’t been suspended during the investigation. Commerce looked to the majority of the majority -- two of the three affirmative voters found actual injury -- to justify collection of cash deposits during the investigation. CIT disagreed, because the vote on injury during the investigation was actually four to two when the three negative injury voters were taken into account.
The Court of International Trade granted a temporary reprieve to the wind towers coalition when the domestic coalition filed suit to challenge liquidation. For a court to issue an injunction, it has to find that the lawsuit related to the injunction is likely to succeed. But after hearing the Wind Tower Trade Coalition’s arguments, it denied the request for injunction and ordered liquidation to proceed, in part because it had already ruled on the issue in the 1992 case. Liquidation was again temporarily suspended by CAFC while it considered the appeal.
The appeals court also found success unlikely. The court owes government agencies deference to interpret laws when Congress hasn’t weighed in. Unlike Commerce’s decision that CIT reversed in 1992, the decision to refund cash deposits on wind towers was reasonable. In any case, the Congress has spoken on the issue, if indirectly, said CAFC. Laws on ITC injury votes are intended to ensure that Commerce does not impose duties on merchandise entered during the investigation when the ITC doesn’t find injury from those imports. “This purpose is flouted when two-thirds of the ITC’s votes are disregarded,” said CAFC. The court denied the coalitions request for preliminary injunction, and ordered the temporary injunctions preventing liquidation during the appeal dissolved.
(Wind Tower Trade v. U.S., CAFC No. 2013-1308, 01/24/14, Judges Newman, Moore, and Wallach)