Lawyers Say CAFC's Royal Brush Ruling Could Apply to Forced Labor Proceedings
The U.S. Court of Appeals for the Federal Circuit's recent ruling in Royal Brush Manufacturing v. U.S., which found that CBP violated importer Royal Brush's due process rights by not giving it access to business confidential information in an antidumping and countervailing duty evasion proceeding, "may have broader implications," including on forced labor issues, customs lawyer Lawrence Friedman said in a July 28 blog post. If the decision "applies generally, it may require that" CBP make its record fully available, including BCI, which would be an "interesting unintended consequence" of this Enforce and Protect Act case, Friedman said.
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He added that importers have expressed similar due process concerns in forced labor enforcement proceedings. Both in EAPA investigations and the forced labor cases, importers complain because they don't know what information CBP has showing that forced labor or evasion is occurring, and so the company has no way to rebut the evidence.
The appellate court said this violates the "relatively immutable principle" of due process (see 2307270038). The court said there was no basis to exempt BCI from this principle, whereby the government must provide access to the evidence used as the basis for an action that seriously injures an individual. Friedman characterized the ruling as a "big win for importers who are subject to an evasion investigation and their foreign exporters." The decision "will necessarily add to the transparency of that process and allow importers a full opportunity to review and address the evidence against them," he said.
Sidley lawyer Ted Murphy said in an email that the decision "may have a significant impact" on CBP enforcement action under the Uyghur Forced Labor Prevention Act. Murphy said the statute allows CBP to presume that imports were made with forced labor if part of the good is made in Xinjiang, China, though the statute does not let CBP presume that an article contains Xinjaing content or was made by a UFLPA-listed entity.
CBP detains imports under this law but doesn't tell the importer why. In response, the importer can apply for review if it believes the UFLPA does not apply. Murphy said there seems to be a "parallel between CBP's actions in this case and how it is currently approaching UFLPA enforcement." CBP makes an admissibility decision on an import based on facts not shared with the importer. "It will be interesting to see whether the Federal Circuit’s decision in Royal Brush impacts CBP’s UFLPA enforcement efforts going forward (on its own initiative or otherwise)," Murphy said.