Comm. Overseeing Action for Lumber Int'l Trade Investigations v. United States

Slip Op. 25-47 UNITED STATES COURT OF INTERNATIONAL TRADE

COMMITTEE OVERSEEING ACTION FOR LUMBER INTERNATIONAL TRADE INVESTIGATIONS OR NEGOTIATIONS, Plaintiff, and MOBILIER RUSTIQUE (BEAUCE) INC., ET AL., Before: Mark A. Barnett, Chief Judge Consolidated Plaintiffs, Consol. Court No. 19-00122 v. UNITED STATES, Defendant, and FONTAINE INC., ET AL., Defendant-Intervenors.

OPINION AND ORDER [Denying motion to explicitly state obligation to refund countervailing duty cash deposits established by Slip Op. 23-163; granting motion for leave to file a reply; granting motion for leave to file a supplemental brief.]

Dated: April 18, 2025 Sophia J.C. Lin, Abraham P. Hendryx, Andrew W. Kentz, Nathaniel Maandig Rickard, Whitney M. Rolig, Zachary J. Walker, and David A. Yocis, Picard Kentz & Rowe LLP, of Washington, DC, for Plaintiff Committee Overseeing Action for Lumber International Trade Investigations or Negotiations.

Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. On the Consol. Court No. 19-00122 Page 2 brief were Yaakov Roth, Acting Assistant Attorney General, Patricia M. McCarthy, Director, and Claudia Burke, Deputy Director. Of counsel on the brief was Alexandra Khrebtukova, Senior Attorney, Office of Chief Counsel, U.S. Customs and Border Protection.

Edward M. Lebow, Haynes and Boone, LLP, of Washington, DC, for Defendant- Intervenors Les Produits Forestiers D&G Ltée and Marcel Lauzon Inc. Rajib Pal and James Mendenhall, Sidley Austin LLP, of Washington, DC, for Defendant- Intervenors North American Forest Products Ltd, Parent-Violette Gestion Ltée, and Le Groupe Parent Ltée.

Yohai Baisburd, Jonathan M. Zielinski, and James E. Ransdell, Cassidy Levy Kent (USA) LLP, of Washington, DC, for Defendant-Intervenor Scierie Alexandre Lemay & Fils Inc. Barnett, Chief Judge: Certain Defendant-Intervenors (“Movants”) 1 seek correction for what they assert is a clerical error in, or unintended omission from, a prior court order. Mot. to Explicitly State Obligation to Refund Countervailing Duty Cash Deposits Est. by Slip Op. 23-163 (“Refund Mot.”), ECF No. 262. Granting this motion would require U.S. Customs and Border Protection (“CBP” or “Customs”), upon request, to issue pre-liquidation refunds of cash deposits paid on the subject entries. See id. (proposed order). Plaintiff, Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (“the Coalition”), and Defendant, United States (“the Government”), each oppose the Refund Motion. See Def.’s Resp. to the Reqs. for Partial Liquidation (“Def.’s Resp.”), ECF No. 277; Pl.’s Resp. in Opp’n to [Refund Mot.] (“Pl.’s Resp.”), ECF No. 278. The court exercises jurisdiction in this case pursuant to 28 U.S.C. § 1581(i)(1)(D) (2018 & Supp. II 2020). For the following reasons, the court will

Consol. Court No. 19-00122 Page 3 deny the Refund Motion. The court will grant Movants’ request for leave to file a reply and the Government’s request for leave to file a supplemental brief.

BACKGROUND This case arises out of the U.S. Department of Commerce’s final results in the countervailing duty (“CVD”) expedited review of certain softwood lumber products from Canada. See Certain Softwood Lumber Prods. From Can., 84 Fed. Reg. 32,121 (Dep't Commerce July 5, 2019) (final results of CVD expedited review) (“Final Results”), ECF No. 99-5. In the Final Results, Commerce announced the results of expedited reviews requested by eight Canadian producers and their affiliates that were not selected for individual examination during the investigation and had been assigned the “all-others” rate of 14.19 percent. Relevant here, Commerce determined de minimis rates for Movants and their respective affiliates. See id. at 32,122. Consequently, Commerce excluded Movants from the underlying CVD order. See id.; Certain Softwood Lumber Prods. From Can., 83 Fed. Reg. 347 (Dep’t Commerce Jan. 3, 2018) (am. final affirmative CVD determination and CVD order) (“CVD Order”). Following vacatur of a temporary restraining order barring CBP from liquidating Movants’ unliquidated entries, 2 Commerce issued liquidation instructions to CBP stating, inter alia, that subject merchandise produced and exported by Movants “should be liquidated without regard to countervailing duties (i.e., refund all cash deposits).” Message No. 9234309 (Aug. 22,

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2019) ¶ 4. Commerce further noted CBP’s authority “to grant a refund, if requested by the importer, of countervailing duty cash deposits for [the subject] entries.” Message No. 9288315 (Oct. 15, 2019) ¶ 2 (citing 19 U.S.C. § 1520(a)(4)). 3 On August 18, 2021, this court vacated the regulation 4 on which Commerce relied to conduct the CVD expedited review, vacated the Final Results, and entered judgment in this case. See Comm. Overseeing Action for Lumber Int’l Trade Investigations or Negots. v. United States (Coalition IV), 45 CIT __, 535 F. Supp. 3d 1336 (2021); J., ECF No. 194. The Judgment required Commerce to reinstate Movants in the CVD Order prospectively and “impose a cash deposit requirement based on the all-others rate from the investigation or the company-specific rate determined in the most recently completed administrative review in which the company was reviewed.” J. at 2. Commerce then instructed CBP to reimpose cash deposits for entries made on or after August 28, 2021. 5 Message No. 1244401 (Sept. 1, 2021) ¶ 4. The U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) subsequently reversed this court’s

Consol. Court No. 19-00122 Page 5 decision to vacate the regulation and the Final Results. See Comm. Overseeing Action for Lumber Int’l Trade Investigations or Negots. v. United States (Coalition V), 66 F.4th 968, 979 (Fed. Cir. 2023).

Following Coalition V, and while this court considered challenges to substantive aspects of the Final Results, Movants were again excluded from the CVD Order. See Comm. Overseeing Action for Lumber Int’l Trade Investigations or Negots. v. United States (Coalition VI), 47 CIT __, 665 F. Supp. 3d 1347 (2023) (granting motion for relief from court’s August 18, 2021, Judgment and reinstating the exclusion from the CVD Order). 6 The Government did not oppose reinstatement of the exclusion or the terms of the requested relief. See Def.’s Resp. to the Ct.’s Order to Respond to [Mot. to Exclude], ECF No. 228. The Government noted in its response filing “that certain of the entries covered by this proposed order are subject to administrative suspensions of liquidation under the North American Free Trade Agreement or United States Mexico Canada Agreement, and Commerce will be required to modify those administrative suspensions to give effect to the proposed order.” Id. at 10.

In granting Movants’ request, the court ordered Commerce to: 1) issue a Federal Register notice excluding Movants from the CVD Order; 2) “instruct CBP to discontinue

Consol. Court No. 19-00122 Page 6 the suspension of liquidation and the collection of cash deposits of estimated countervailing duties on all shipments of softwood lumber produced and exported by [Movants], entered, or withdrawn from warehouse, for consumption on or after August 28, 2021”; and 3) “instruct CBP to liquidate, without regard to countervailing duties, all suspended entries of shipments of softwood lumber produced and exported by [Movants].” Coalition VI, 665 F. Supp. 3d at 1355. That relief reflected the terms of the order proposed by Movants. Compare id., with Proposed Order, ECF No. 222 (accompanying the motion to reinstate the exclusion from the CVD Order). Thereafter, Commerce instructed CBP to “discontinue the suspension of liquidation for all shipments of softwood lumber produced and exported” by Movants and entered on or after August 28, 2021, and “liquidate such entries without regard to countervailing duties (i.e., refund all cash deposits).” Message No. 4018411 (Jan. 18, 2024) ¶ 2. Commerce noted that the court order reinstating Movants’ exclusion from the CVD Order “supersedes the suspension of liquidation related to the Binational Panel (USMCA Secretariat File No.: USA-CDA-2023-10.12-01) review . . . covering the period 1/01/2021 through 12/31/2021 and nullifies the continued suspension of liquidation instruction with respect to the companies identified in paragraph 2” of the instructions relevant to that administrative suspension. 7 Id. ¶ 4. Commerce stated: “Thus, there are no injunctions applicable to the entries covered by this instruction.” Id.

The foregoing notwithstanding, judicial and administrative proceedings associated with the parallel antidumping duty order have resulted in the continued suspension of liquidation of the subject entries. See Refund Mot. at 7. Movants were “unable to rectify the issue,” i.e., obtain pre-liquidation refunds, “through direct engagement with [the Government].” Id. Movants’ inability to obtain pre-liquidation refunds precipitated the Refund Motion. See id. at 2 (stating that the Government “continues to withhold its collection of millions of dollars’ worth of CVD cash deposits previously obtained from [Movants]”). 8 On January 17, 2025, the court held a status conference with the parties regarding the Refund Motion. Docket Entry, ECF No. 284. That day, the court deferred consideration of the Refund Motion “for 30 days to allow time for the parties to discuss resolution of the motion.” Order (Jan. 17, 2025), ECF No. 285. The court further ordered:

through December 31, 2021, and, consistent with 19 C.F.R. § 356.8, the suspension of liquidation of the relevant entries had been continued by Commerce. Upon reinstatement of the exclusion from the CVD Order, Commerce revised that suspension of liquidation during the panel proceeding to exclude Movants’ entries. Nevertheless, Movants’ entries over several review periods remain suspended as a result of ongoing challenges to the results of the antidumping duty administrative reviews before the U.S. Court of International Trade and other binational panels.

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[U]nless the motion is withdrawn, on February 18, 2025, movants must file a joint status report regarding the status of the pending motion. As discussed during the status conference, such joint status report must be accompanied by a document listing all legal bases for suspension of liquidation for the relevant entries covering the time period August 28, 2021, through November 20, 2023, for both the antidumping and countervailing duty proceedings. The parties must also provide, as exhibits to that document, relevant Federal Register notices, Customs messages, or other documents relevant to the liquidation status of the entries. Id. (emphasis added). Following the court’s grant of an extension request, Order (Feb.

18, 2025), ECF No. 298, on March 4, 2025, Movants filed the status report and required documentation, Jt. Status Rep., ECF No. 299. Shortly thereafter, the Government moved for leave to file a supplemental brief to respond to the Joint Status Report.

Def.’s Mot. for Leave to File a Suppl. Br., ECF No. 300; see also Suppl. Br., ECF No. 300; Decl. of Connor Snitker (“Snitker Decl.”), ECF No. 300-1. Movants opposed the Government’s motion. [Movants’] Resp. in Opp’n to Def.’s Mot. for Leave to File a Suppl. Br. and Suppl. Br., ECF No. 302. 9 DISCUSSION I. Parties’ Contentions Movants contend that USCIT Rule 60(a) permits the court to amend the Coalition VI order to require CBP to refund cash deposits paid on the subject entries prior to liquidation. Refund Mot. at 2, 9–11. Movants argue that such an amendment would

Consol. Court No. 19-00122 Page 9 reflect the intent of the parties at the time the court reinstated Movants’ exclusion from the CVD Order and is consistent with Commerce’s acknowledgement in Message No. 9288315 that CBP has authority to issue pre-liquidation refunds. Id. at 9. In the alternative, Movants seek the same relief pursuant to USCIT Rule 60(b)(5) for reasons of equity. Id. at 2–3. Movants argue that CBP’s retention of the cash deposits pending liquidation that will await resolution of binational panel reviews is “deeply unfair.” Id. at 12. They assert that “the deprivation” to which Movants are currently subject outweighs any administrative burden imposed on CBP from issuing pre-liquidation refunds. Id. at 14.

The Government contends that Rule 60(a) provides no basis for granting Movants’ requested relief because the parties’ intent was accurately captured in the Coalition VI order. Def.’s Resp. at 8. The Government further argues that the issuance of refunds with interest following liquidation is consistent with the governing statutes and regulations. Id. at 9. Although 19 U.S.C. § 1520(a)(4) permits CBP to issue pre- liquidation refunds, the Government contends, CBP is never required to do so and CBP’s decision not to is neither protestable nor judicially reviewable. Id. at 10. With respect to Rule 60(b)(5), the Government argues that Movants have not identified the requisite changed circumstances or inequity that rule requires. Id. at 10–12. The Government further avers, with support from a declaration by a CBP official, that issuing pre-liquidation refunds would be extremely burdensome. Id. at 12–14; see also Decl. of Alexander Amdur (“Amdur Decl.”), ECF No. 277-2; Snitker Decl. (providing additional information).

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The Coalition contends that Movants failed to identify any “mistake” in the Coalition VI order as required by Rule 60(a). Pl.’s Resp. at 3. Instead, the Coalition argues, Movants simply “fail[ed] to anticipate the well-established ramifications of Customs’ regulation and practice regarding the liquidation of entries” and are now seeking “different relief.” Id. at 4. Regarding Rule 60(b)(5), the Coalition contends that Movants are not entitled to relief because this case concerns a Commerce determination, whereas Movants’ current dispute over refunds lies with Customs and they have not established standing to challenge Customs’ action. Id. at 5–6. 10 If the court disagrees, then the Coalition argues that Movants have not shown that CBP abused its discretion pursuant to 19 U.S.C. § 1520(a)(4). Id. at 6–8.

Movants counter that 28 U.S.C. § 2643(c)(1) authorizes the court to order CBP to issue pre-liquidation refunds of cash deposits. Reply at 2, 4. Movants argue that the parties intended for the Coalition VI order to require CBP to issue refunds. Id. at 2.

Movants seek to rebut the Government’s assertions regarding the burden that issuing refunds would place on CBP, arguing that Movants’ prior experience obtaining refunds in 2019 and 2020 indicates that any such burden is manageable. Id. at 4–5.

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II. Analysis A. Legal Standards Rule 60 governs “relief from a judgment or order.” Rule 60(a) permits the court to “correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment, order, or other part of the record,” USCIT Rule 60(a), in order for the relevant document to conform with “the intentions of the court and the parties,” Agro Dutch Indus. Ltd. v. United States, 589 F.3d 1187, 1192 (Fed. Cir. 2009) (citing USCIT Rule 60(a)). Errors correctible under this rule are “minor”; Rule 60(a) is not intended “to substantially alter the rights of the parties thereto.” Patton v. Sec’y of Dep’t of Health and Human Servs., 25 F.3d 1021, 1029 (Fed. Cir. 1994). 11 “Errors of a more substantial nature are more appropriately correctable under subdivision (b).” Id. Rule 60(b)(5) permits the court to “relieve a party or its legal representative from a final judgment, order, or proceeding” when “applying [the judgment or order] prospectively is no longer equitable.” USCIT Rule 60(b)(5); see also Horne v. Flores, 557 U.S. 433, 447 (2009). 12 A motion filed pursuant to Rule 60(b)(5) “must be made within a reasonable time.” USCIT Rule 60(c)(1). Rule 60(b)(5) “is rooted in the

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‘traditional power of a court of equity to modify its decree in light of changed circumstances.’” Tapper, 833 F.3d at 170 (quoting Frew ex rel. Frew v. Hawkins, 540 U.S. 431, 441 (2004)). While the rule “may not be used to challenge the legal conclusions on which a prior judgment or order rests,” it “provides a means by which a party can ask a court to modify or vacate a judgment or order if a significant change either in factual conditions or in law renders continued enforcement detrimental to the public interest.” Horne, 557 U.S. at 447 (citation and quotation marks omitted).

Regardless of the basis, the decision whether to grant relief is discretionary. See Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., 714 F.3d 1289, 1295 (Fed. Cir. 2013).

B. USCIT Rule 60(a) Movants have not demonstrated any mistake, clerical or otherwise, in the Coalition VI order. Thus, Rule 60(a) is not a basis for the requested relief. Movants effectively seek an affirmative injunction requiring CBP to issue, on request, pre- liquidation refunds. See Refund Mot. at 15 (requesting the court to clarify that the Coalition VI order “includes the obligation to promptly refund all countervailing duty cash deposits . . . upon request by [Movants]”). But that is a substantially different form of relief from the issuance of refunds via liquidation in the normal course.

The parties’ filings instead suggest that Movants were mistaken in their expectations as to what CBP would do as a result of the Coalition VI order. In the motion to reinstate their exclusion from the CVD Order, Movants sought “to restore the status quo ante” that existed before the court entered its August 18, 2021, Judgment.

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Mot. to Reinstate Exclusion from [CVD] Order Pending Resolution of Litigation at 8, ECF No. 222. The liquidation instructions in effect prior to the August 18, 2021, Judgment stated that subject merchandise suspended on or after April 28, 2017, “should be liquidated without regard to countervailing duties (i.e., refund all cash deposits).” Message No. 9234309 ¶ 4. The cash deposit instructions noted the exclusion from the CVD Order and referenced CBP’s refund authorization pursuant to 19 U.S.C. § 1520(a)(4). Message No. 9288315 ¶¶ 2–3. The Coalition VI order was entirely consistent with these instructions. 13 While CBP may have granted previous requests for pre-liquidation refunds, see Reply Exs. 1–3 (attesting to Movants’ respective receipt of pre-liquidation refunds in 2019 and 2020), neither now, nor then, was CBP required to make such pre-liquidation refunds.

Indeed, in their reply, Movants noted their “expectation that the Court’s most recent order to reinstate [Movants’] exclusion would yield similar pre-liquidation refunds” as Movants obtained in 2019 and 2020. Reply at 5 (emphases added). Similarly, Movants averred it was not “unreasonable . . . to expect that pre-liquidation refunds would be forthcoming, given CBP’s prior conduct in processing such refunds related to this matter.” Id. at 7 (emphases added). Movants’ erroneous expectations are not,

Consol. Court No. 19-00122 Page 14 however, a basis for relief under Rule 60(a). Accordingly, relief under this rule will be denied.

C. USCIT Rule 60(b)(5) In the alternative, Movants urge the court to exercise its authority pursuant to Rule 60(b)(5) to order the refund of cash deposits as a form of relief from the August 18, 2021, Judgment. Refund Mot. at 2–3. In Coalition VI, the court granted Movants relief under this rule. 665 F. Supp. 3d at 1353–55. This time, the equities do not favor granting Movants their requested further relief.

There has been no legal change since Coalition VI. What has changed, however, is the system CBP uses to process pre-liquidation refunds. “Specifically, in 2022, CBP implemented its new Automated Commercial Environment (ACE) refunds system, to replace its legacy Automated Commercial System (ACS) for the purpose of duty and estimated duty deposits refunds.” Suppl. Br. at 2; Snitker Decl. ¶¶ 4–5. Within the ACE system, processing pre-liquidation refunds “is a manual, entry-by-entry process that requires” several instances of approval and review before “an Entry Specialist manually process[es] each entry and certif[ies] the refund to the Department of Treasury.” Snitker Decl. ¶ 7. Even then, “a different Entry Specialist is required to review each refund,” ensuring procedural compliance, before “a different Entry Supervisor . . . manually certif[ies] each refund.” Id. While CBP’s “normal semi- automated liquidation processes” would result in “refunds plus interest, for all 13,000 [subject entries] in a matter of days,” processing “preliquidation refunds for the same Consol. Court No. 19-00122 Page 15 entries would [now] take [CBP] years to complete, and would add weeks to the liquidation process down the road as well.” Id. ¶ 9 (emphasis added).

Movants fail to persuade the court that any harm arising from the Government’s retention of cash deposits pending liquidation outweighs this administrative burden.

Movants’ assertions of harm are conclusory and unsupported by affidavits or other evidence. Refund Mot. at 13; see also Reply at 7. 14 The court is aware that suspension of the subject entries remains in place, and may remain for some time, pending the conclusion of challenges to parallel antidumping duty review results. See Jt. Status Rep., Ex. 1 (listing the current bases for suspension and status thereof). The interest on any excess cash deposits paid will continue to accrue until liquidation, providing the statutorily provided offset to any harm arising from the unavailability of the funds until that time. See 19 U.S.C. § 1505(b), (c).

Movants identify the Trans Texas Tire litigation as an example of the court exercising its authority pursuant to 28 U.S.C. § 2643(c)(1) “to fashion a remedy that included pre-liquidation refunds.” Reply at 2 (citing Trans Texas Tire, LLC v. United States (Trans Texas I), 45 CIT __, __, 519 F. Supp. 3d 1275, 1289 (2021)). There,

Coalition VI, 665 F. Supp. 3d at 1354–55. Movants did not present the question whether they must await the conclusion of parallel proceedings before obtaining refunds and, thus, the court did not address that question.

Consol. Court No. 19-00122 Page 16 however, the court did not explicitly rely on 28 U.S.C. § 2643(c)(1). Rather, while sustaining Commerce’s scope determination, the court found Commerce’s “decision to assess duties retroactive to the date of the Preliminary Determination” to be unlawful “because the language in the Initiation Notice and Preliminary Determination did not provide adequate notice of the inclusion of [the plaintiff’s merchandise]” in the relevant order. 519 F. Supp. 3d at 1289 (underline omitted). The court required “Commerce to reformulate its instructions consistent with this opinion.” Id. On remand, Commerce issued revised instructions that “indicated that it will ‘order the continuation of the suspension of liquidation of the entries at issue’ but also instruct CBP to ‘give effect to [Trans Texas I] by allowing for the importer to seek refunds pursuant to 19 U.S.C. 1520(a)(4).’” Trans Texas Tire, LLC v. United States (Trans Texas II), 45 CIT __, __, 545 F. Supp. 3d 1374, 1377 (2021). The court sustained Commerce’s remand redetermination after finding that the instructions “properly ensure access to interim remedies pursuant to 19 U.S.C. § 1520(a)(4).” Id. The court did not require CBP to provide pre-liquidation refunds but ensured that such relief could be made available.

As the Government here points out, “preliquidation refunds of AD/CVD deposits are rare and generally limited to situations involving very few entries.” Amdur Decl. ¶ 4.

Significantly, the Trans Texas Tire litigation and Commerce’s revised instructions considered in that case predate CBP’s transitioning of the collections portion of ACS to Consol. Court No. 19-00122 Page 17

ACE. 15 Whether or to what extent CBP exercises its discretionary authority pursuant to 19 U.S.C. § 1520(a)(4) in any given case is not a basis for requiring CBP to do so here.

Accordingly, the court will deny Movants relief under this rule.

CONCLUSION AND ORDER The court encourages the parties to continue discussing suitable methods for resolving Movants’ reasonable concerns with the delay in obtaining cash deposit refunds due to the ongoing suspensions of liquidation. However, Movants have not met their burden, pursuant to USCIT Rules 60(a) or 60(b)(5), to establish a basis for the court to order CBP to engage in the highly burdensome process of issuing pre- liquidation refunds for the roughly 13,000 subject entries. Accordingly, it is hereby ORDERED that the motion to explicitly state an obligation to refund countervailing duty cash deposits established by Slip Op. 23-163 (ECF No. 262) is DENIED; it is further

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ORDERED that the motion for leave to reply in support of motion to explicitly state an obligation to refund countervailing duty cash deposits established by Slip Op. 23-163 (ECF No. 280) is GRANTED, and the reply brief is accepted for filing; and it is further ORDERED that the motion for leave to file a supplemental brief (ECF No. 300) is GRANTED, and the supplemental brief is accepted for filing.

/s/ Mark A. Barnett Mark A. Barnett, Chief Judge Dated: April 18, 2025 New York, New York