DOJ Opposes Surety Co.'s Motion to Stay Action Over Late Collected AD Duties
The Court of International Trade should not stay a case over the U.S.'s bid to collect antidumping duties on entries brought in between 2000 and 2001, the Department of Justice argued in a Dec. 10 brief. Though the defendant in the case, surety company American Home Assurance Company (AHAC), wants the case stayed until a resolution in a similar case, the U.S. argues that it will be harmed due to its ongoing discovery efforts in the AHAC action and that AHAC has failed to show any hardship. The U.S. also says the speculative nature of how the related case will affect the AHAC action does not warrant a stay (United States v. American Home Assurance Company, CIT #20-00175).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
In AHAC's case, an importer brought in canned mushrooms from China at the turn of the century. DOJ is seeking to recover a customs bond for unpaid AD duties on the mushrooms, arguing that sureties have a unique liability to pay the unpaid duties. To establish that the statute of limitations hasn't run out on collecting payments on a decade-plus-old bill, the government has argued that its issuance of a bill to the surety constitutes a reliquidation of the entries, allowing it to collect duties from the sureties at a much later date than the date of liquidation (see 2105170036).
The government is making a nearly identical argument in the case United States v. Aegis Security Insurance Company, as it's seeking to untether the six-year statute of limitations for customs bonds from the date an entry is liquidated. Aegis has argued that doing so would undermine the entire business model of sureties (see 2109210086). In its motion to stay, AHAC claims that the Aegis case will resolve the questions of whether the government's claim for the AD duties is time barred by the six-year statute of limitations and whether "prejudice required for the laches defense may be presumed as a matter of law where there is unreasonable delay in issuing a demand against a customs bond" (see 2111290045).
On the second question of the case, CIT has ordered the parties to conduct discovery to find if Aegis suffered actual harm as a result of the government's "extensive delay" in issuing the bills for the AD duties after the entries were liquidated. It is for this discovery that DOJ opposes the stay bid, since a stay would harm the government during its discovery efforts on this question. "For instance, the discovery we seek with regard to AHAC’s alleged prejudice will only become more difficult to obtain if this case is stayed until the litigation in United States v. Aegis is concluded. ... It is possible that the final adjudication of United States v. Aegis will not occur for years," the brief said. "By that point, it will only be less likely that the documents and testimony the Government seeks in discovery will no longer be available."
The other two reasons fueling the DOJ's opposition into the stay motion include AHAC's purported failure to show any hardship in being required to move forward with discovery and the speculative nature of AHAC's position that the Aegis decision will influence its case. On the latter point, the DOJ argued that "even if the Aegis Court were to find against the Government on the statute of limitations issue, this Court is not bound by a decision in United States v. Aegis and could reach a different result."