Trade Court Lets Case Proceed Against on AD/CVD Pause on SE Asian Solar Cells

Judge Timothy Reif said that CIT has jurisdiction to hear the case under Section 1581(i), the court's "residual" jurisdiction reserved in part for unusual circumstances. The judge noted that such an unusual circumstance exists in the present case, since "Commerce took an unprecedented action to issue the Duty Suspension Rule."

Thomas Beline, counsel for Auxin and Concept Clean Energy, said in an email that "[u]nlawfully traded circumventing solar modules have been hammering the US industry for far too long without any duties applied because of this unlawful tariff moratorium. We look forward to moving onto the merits of our appeal with an order in hand that the Court will reliquidate past imports and apply duties if Auxin and Concept Clean Energy prevail in the case. "

The decision also took note of a stipulation between the government and plaintiffs -- solar cell maker Auxin Solar and solar module designer Concept Clean Energy -- regarding the court's power to order reliquidation. The U.S. conceded that the court has this power in the event Auxin and Concept Clean Energy win the case, and that the court can order reliquidation of the entries covered by the duty pause "for which liquidation was not suspended and cash deposits were not collected."

In the decision, Reif also allowed nine solar cell importers and exporters to intervene in the challenge. He said that while the companies failed to establish intervention as a matter of right, they cleared the bar for permissive intervention since they showed they would be adversely affected by a decision in the case.

Auxin and Concept Clean Energy launched the suit in January, claiming Section 1581(i) jurisdiction, to contest the duty pause, which was issued after a proclamation from President Joe Biden calling for the action due to the emergency of "electricity generation capacity" (see 2401030071). The U.S. and proposed intervening companies were quick to seek dismissal of the action, claiming that jurisdiction was improper under Section 1581(i) since remedy was available under Section 1581(c) -- the provision allowing the court to hear challenges to the results of AD/CVD proceedings by Commerce and the International Trade Commission (see 2401230040).

Reif noted that Section 1581(c) is for civil action taken under Section 1516a, which includes AD/CVD proceedings and related circumvention cases. The court held that the duty pause can't be classified as a 1516a action since it pertains to the "administration and enforcement" of those actions instead of the "lawfulness of Commerce's Final Determinations themselves."

The duty pause itself says Commerce will tell CBP to take certain actions and says that the directions are taken "despite" the agency's initiation of its circumvention inquiries and final affirmative circumvention decisions. Thus, they don't alter the circumvention findings. Instead, the duty pause concerns the non-collection of duties, fitting it under Section 1581(i), the court said. Reif likened the suit to Shinyei Corp. of Am. v. U.S., in which the U.S. Court of Appeals for the Federal Circuit said a challenge to CBP's liquidation of entries at a higher rate than was set by Commerce fit under Section 1581(i).

Reif then turned to the nine companies' bid to participate in the case, first ruling that the proposed intervenors can't intervene as a matter of right. The judge said the companies failed to establish the second and third factors of this four-part analysis, which say that the intervenors must claim a "legally protectable" interest in the property or transaction at issue and that this interest's relationship to the litigation must be directly affected by the outcome of the case.

Mere economic interests aren't enough to establish a legally protected interest, and that's all the intervenors have here, the judge said. While the companies "may be affected financially by the court's judgment," the "rulemaking process and the substance of the Duty Suspension Rule do not create legally protectable interests beyond 'merely economic' ones," the decision said. Since there's no legally protected interests, the intervenors' claim regarding the third factor necessarily fails, Reif noted.

However, while the economic losses weren't enough to establish intervention as a matter of right, they were enough to secure intervention from the judge himself. Rejecting Auxin's and Concept Clean Energy's claim that the parties needed to show independent constitutional standing, Reif noted that "each proposed defendant-intervenor references both its reliance on the Duty Suspension Rule in making business decisions and the potential financial ramifications of the instant action." This reliance, paired with congressional intent to cast the intervention net broadly with the phrase "adversely affected or aggrieved," allows the companies to intervene, the court said.

Reif concluded by discussing whether introducing nine parties to the case would cause undue delay or prejudice against the existing parties. Ultimately, he said that the reliquidation of entries "would affect not only defendants in the instant action, but also proposed defendant-intervenors." Weighing the parties' rights and the "court's motivation to receive a full understanding of the legal and factual issues presented and the perspectives of interested parties," the court said the intervention wouldn't unduly delay or prejudice the original parties' rights.

(Auxin Solar v. United States, Slip Op. 24-58, CIT # 23-00274, dated 05/09/24; Judge: Timothy Reif; Attorneys: Thomas Beline of Cassidy Levy for plaintiffs Auxin Solar and Concept Clean Energy; Douglas Edelschick for defendant U.S. government; Jeffrey Grimson of Mowry & Grimson for defendant-intervenors led by American Clean Power Association; Jonathan Stoel of Hogan Lovells for defendant-intervenors Canadian Solar (USA) and Canadian Solar International; Matt Nicely of Akin Gump for defendant-intervenors Solar Energy Industries Association and NextEra Energy; Craig Lewis of Hogan Lovells for defendant-intervenors BYD (H.K.) Co. and BYD America; John Brew of Crowell & Moring for defendant-intervenors Invenergy Renewables and Invenergy Solar Equipment Management; Jonathan Freed of Trade Pacific for defendant-intervenors led by Trina Solar (U.S.); Gregory Menegaz of deKieffer & Horgan for defendant-intervenor Risen Solar Technology)