Hogan Lovells wins key trade victory in antidumping case before the Federal Circuit on behalf of U.S. tire importer

The Aug. 29 decision by the Federal Circuit found that the Tariff Act generally does not permit Commerce to conduct an administrative review of a single exporter or producer to determine antidumping duties when multiple parties are involved in the case and have requested such review.

The Hogan Lovells team led oral argument at both the U.S. Court of International Trade (CIT) and the Federal Circuit.  The firm also filed briefs before the Commerce Department, the CIT, and the Federal Circuit.  

At issue was the Commerce Department’s approach to assessing antidumping duties on 42 exporters and producers of passenger-vehicle and light-truck tires from the People’s Republic of China. The Commerce Department decided to base its antidumping duty rate for the companies not selected for individual review on the calculated rate for only one company rate, notwithstanding that the agency had ample time to calculate and average additional rates. 

The Hogan Lovells team filed suit against Commerce at the CIT in May 2019, following the Commerce Department’s publication of the final results of its second administrative review of the antidumping duty order. The CIT sustained Commerce’s decision in December 2020, finding that the statute gives Commerce the discretion to limit its examination to a single respondent—in spite of the statute’s use of plural “exporters” and “producers” and its direction to employ an “average” of calculated rates.

In an opinion by Judge Pauline Newman, the Federal Circuit ruled that the Commerce Department wrongly decided it could set antidumping duties based on the review of a single party to the proceeding.

“We conclude that Commerce’s interpretation is contrary to the statute’s unambiguous language,” the court stated. “The statute calls for all respondents to be individually investigated, unless the large number makes separate review impracticable.”

The court examined this statutory exception, which allows Commerce to limit its examination to a “reasonable number” of companies if there are too many respondents for Commerce to examine individually. The question was whether it was reasonable in this case to limit its examination to one company. The court concluded it was not. 

“We conclude that a “reasonable number” is generally more than one,” the court stated, vacating the CIT’s judgment and remanding the case.

“This decision underscores that Commerce must follow the unambiguous directions of Congress in calculating fair and accurate dumping margins,” said Hogan Lovells partner Jonathan Stoel, who led the Hogan Lovells team and argued the case at the Federal Circuit. “Commerce does not have boundless discretion in assigning antidumping duty margins.”

In addition to Stoel, the Hogan Lovells team included partner Craig Lewis (both Washington, D.C.) and senior associate Nicholas Sparks (Denver). 

The case is YC Rubber Co. (North America) LLC, Sutong Tire Resources, Inc., Mayrun Tyre (Hong Kong) limited, ITG Voma Corporation, Kendra Rubber (China) Co., LTD., v. United States.