GPX Update: Plaintiffs Outline Constitutional Challenge

The good folks at Law360 caught up with the US Court of International trade's review of the new CVD/NME law in the context of the case that started it all - GPX Int'l Tire Corp. v. United States.  As you'll recall, the Court of Appeals for the Federal Circuit remanded the case to the CIT for a review of the law's constitutionality.  The CIT judge in charge of the case, Judge Restani, on June 12 asked the parties to the case, including GPX, to "explain what constitutional issues remain" to be litigated.  GPX responded in a June 19 letter, as Law360 explains [$]:

In its letter to the CIT, GPX outlined three grounds on which it planned to challenge the portion of the law giving the government the authority to retroactively impose countervailing duties on Chinese products back to November 2006.

The provision violates the Fifth Amendment's guarantee of due process because "the extreme extent of retroactivity ... and the adverse impact on importers do not serve a legitimate legislative purpose furthered by rational means," GPX wrote.

On this count, the GPX letter states:

Argument 2: Section 1(b) of the Application of Countervailing Duty Provisions to Nonmarket Economy Countries, Pub. L. No. 112-99,126 Stat. 265 (2012) (to be codified at 19 U.S.C. §§ 1671, 1677f-1) is also unconstitutional because it violates the Fifth Amendment's guarantee of due process. The extreme extent of retroactivity (which applies to all proceedings initiated on or after November 20, 2006) and the adverse impact on importers do not serve a legitimate legislative purpose furthered by rational means.

Law360 then summarizes another GPX argument:

In addition, the company said, the law violates the U.S. Constitution's prohibition on the passage of an ex post facto law, which "sanctions conduct only after that conduct has already occurred."

GPX letter:

Argument 3: Section l(b) of the Application of Countervailing Duty Provisions to Nonmarket Economy Countries, Pub. L. No. 112-99, 126 Stat. 265 (2012) (to be codified at 19 U.S.C. §§ 1671, 1677f-1) is also unconstitutional because it violates Article I, Section 9 of the Constitution. The retroactive application of the countervailing duty law to non-market economy countries falls within the constitution prohibition against the passage of an ex post facto law that sanctions conduct only after that conduct has already occurred.

Law360 summary:

Thirdly, GPX cited a provision designed to ensure that when Congress imposes both anti-dumping and countervailing duties on Chinese products, it does not "double count," or apply two types of duties for the same conduct.

The law states that if Commerce can reasonably estimate the extent to which double counting has occurred, it should reduce the anti-dumping duties accordingly. However, that provision applies only to new investigations going forward, not to retroactive application of the law.

According to GPX, that violates the Constitution's due process clause by creating "a special rule that creates a particular class of parties to whom both anti-dumping and countervailing duties may retroactively be imposed, without the protections Congress recognized as necessary."

GPX letter:

Argument 1: Section 1(b) of the Application of Countervailing Duty Provisions to Nonmarket Economy Countries, Pub. L. No. 112-99, 126 Stat. 265 (2012) (to be codified at 19 U.S.C. §§ 1671, 1677f-1) is unconstitutional because it violates equal protection ofthe law as guaranteed by the Fifth Amendment's due process clause. Section 1(b) creates a special rule that creates a particular class of parties to whom both antidumping and countervailing duties may retroactively be imposed without the protections Congress recognized as necessary under Section 2 of the same Act to account for potential double counting, protections that only apply prospectively.

GPX concluded its letter by asking Judge Restani, who heard the original GPX challenges, to adopt a briefing schedule that would require the Plaintiffs to submit their briefs 60 days from the date of the CAFC's remand (June 4, 2012).  At that time, GPX would elaborate - significantly - on the arguments briefly outlined above.  Defendants - including the United States government - would then have 60 days to respond, and plaintiffs would then be able to rebut those defenses within 28 days after that.  No word yet as to whether Judge Restani has agreed to these terms.

So stay tuned.