[00:00:00] Speaker 00:
We'll hear argument next in number 20-1513, DAK America's LLC versus United States, Mr. Rosenthal.

[00:00:09] Speaker 00:
Thank you, Your Honor.

[00:00:11] Speaker 00:
May it please the court, I am Paul Rosenthal on behalf of the plaintiff's appellant.

[00:00:16] Speaker 00:
This morning, I'd like to address two main issues.

[00:00:19] Speaker 00:
First, I want to go straight to the question raised by this court when you requested supplemental briefing

[00:00:26] Speaker 00:
on whether the letters by customs and border protection to the domestic industry plaintiffs here are final agency action reviewable by the court.

[00:00:34] Speaker 00:
And second, I'd like to address whether customs has ignored its own regulations as well as the intent of Congress by pursuing payments to injured domestic companies many years after those payments were made.

[00:00:48] Speaker 00:
With respect to finality, there should be no question that the two prongs of the test for final agency action

[00:00:55] Speaker 00:
enunciated by the Supreme Court in Bennett v. Spears and adopted by this court in Ashford University earlier this year are met in this case.

[00:01:05] Speaker 00:
The demand letters by customs are the consummation of the agency's decision-making process and the action is one from which legal consequences will flow.

[00:01:17] Speaker 00:
The Ashford case which we decided in February involved the Veterans Administration letter

[00:01:21] Speaker 00:
which gave the plaintiff's educational institution an opportunity to correct deficiencies in its program.

[00:01:28] Speaker 00:
This court found that the so-called CURE letter did not satisfy the Bennett versus Spears first requirement because it was an intermediate step and a multi-step process that would lead to a final decision.

[00:01:41] Speaker 00:
Let's assume here that under Bennett, the first requirement is satisfied.

[00:01:47] Speaker 00:
It's the culmination of the agency's decision-making process.

[00:01:50] Speaker 00:
What are the legal consequences that flow from a demand letter?

[00:01:54] Speaker 00:
The consequences are, first, if it's not paid, interest will be accruing.

[00:02:05] Speaker 00:
And the government has the right to do several follow-up actions, sue or

[00:02:14] Speaker 00:
to begin proceedings to prevent these companies from using other customs privileges.

[00:02:22] Speaker 00:
Is the only legal consequence really that it starts the running of interest in your view?

[00:02:28] Speaker 00:
No, because I don't see this as any different than the consequence enunciated by the Supreme Court in Abbott's lab versus Gardner, which found that an agency action was final.

[00:02:43] Speaker 00:
when plaintiffs had a choice of compliance, which would require significant financial investment, or noncompliance, which would risk serious criminal or civil penalties.

[00:02:52] Speaker 00:
Here, we are risking serious civil penalties.

[00:02:56] Speaker 00:
And that's not as a result of the failure to comply with the demand letter.

[00:03:05] Speaker 00:
Well, Your Honor, by the way,

[00:03:11] Speaker 00:
Final agency action happens all the time when an agency issues a final rule and the courts don't say that you have to wait for the Justice Department, for example, in the Abbot Labs case to launch an enforcement action on the final agency rule.

[00:03:32] Speaker 00:
Enforcement is not the same thing as a final agency action that has legal consequences.

[00:03:39] Speaker 00:
a demand letter that is not responded to and not complied with has legal consequences.

[00:03:46] Speaker 00:
And in fact, in some respects, they're more onerous than waiting for the custom service or the Justice Department to sue my clients.

[00:03:55] Speaker 00:
Because here, as interest accrues, and we have no way to stop that, our risk gets greater.

[00:04:03] Speaker 00:
And in fact,

[00:04:04] Speaker 00:
It allows the agency to effectively punish my client by having the case go longer and longer and puts it at greater risk if they don't comply, then they are going to be paying more.

[00:04:21] Speaker 00:
So there is an immediate consequence because you're at legal risk at that time.

[00:04:26] Speaker 00:
You don't need, and I don't believe I've seen any case that's at your appellate level that you actually have an

[00:04:34] Speaker 00:
have to have an enforcement action in order to decide that the agency action is final with legal consequences.

[00:04:43] Speaker 01:
Mr. Rosenthal, this is Judge Toronto.

[00:04:46] Speaker 01:
Besides interest, is there a risk of penalty of some doubling or trebling or something that would properly be described as a penalty from that?

[00:05:02] Speaker 00:
Yes.

[00:05:03] Speaker 00:
Well, the agency does have the ability to effectively stop these companies from exercising importing privileges as well.

[00:05:16] Speaker 00:
It doesn't threaten that in the letter, but that's one of the consequences of failing to pay your debt to the agency.

[00:05:23] Speaker 00:
So there are other things that the agency could do beyond simply imposing interest.

[00:05:29] Speaker 00:
But those aren't tied to the issuance of demand letter.

[00:05:32] Speaker 00:
They're just tied to the failure to pay amounts due, right?

[00:05:39] Speaker 00:
Yes, they are.

[00:05:40] Speaker 00:
Yes, but the demand letter is a demand to pay the amount to do.

[00:05:45] Speaker 00:
And again, if the standard in Bennett versus Spears is legal consequences flow, in terms of the penalties, there's no difference

[00:05:59] Speaker 00:
whether there was a demand letter or there wasn't a demand letter, right?

[00:06:04] Speaker 00:
Well, until the agency asserts its final determination, which it did, that you owe money, plaintiffs, and we are going to insist that you pay it with interest.

[00:06:16] Speaker 00:
And unless you do, you are at risk of an enforcement proceeding.

[00:06:22] Speaker 00:
That's a legal consequence.

[00:06:25] Speaker 01:
Can I ask?

[00:06:26] Speaker 01:
This is Jeff Toronto again.

[00:06:28] Speaker 01:
It was surprising to me, and I'd like you to explain, maybe I'm just ignorant of this, but when the briefing came in, the supplemental briefing on this question, the amount of authority that was presented to us is tiny.

[00:06:47] Speaker 01:
And I would have thought that the government issues demand letters for payment all of the time.

[00:06:58] Speaker 01:
Well, what do I make of that?

[00:07:00] Speaker 01:
Should we be worried here about deeming this to be a final agency action because then all kinds of demand letters would be reviewable as final agency actions?

[00:07:14] Speaker 01:
Or is there something distinctive going on?

[00:07:17] Speaker 01:
Because there are a couple of district court cases that the government pointed us to.

[00:07:23] Speaker 01:
seen, I guess, was all the government really pointed us to.

[00:07:27] Speaker 01:
So can you help me understand what seems like a very common kind of thing for the government to do and yet there being extremely little law on the final agency action issue raised by demand letters?

[00:07:44] Speaker 00:
Yes.

[00:07:45] Speaker 00:
By the way, one of the cases that the government cites as well as the Smyrna case, which

[00:07:51] Speaker 00:
goes in the opposite direction, which says basically demand letter is the final agency action for these purposes.

[00:07:56] Speaker 00:
Right.

[00:07:57] Speaker 01:
And that was distinguished in the bituminous opinion.

[00:07:59] Speaker 00:
Yes.

[00:08:01] Speaker 00:
But you're right, Your Honor.

[00:08:02] Speaker 00:
There is very little case law in this area, which surprised us as well.

[00:08:07] Speaker 00:
One thing that I will say distinguishes this case from the

[00:08:10] Speaker 00:
other cases involving demand letters is that effectively the government has already exhausted all of the alternatives that the government here says it might pursue.

[00:08:22] Speaker 00:
It has declined to and could not use an administrative offset

[00:08:29] Speaker 00:
And it's also, in this case, gone to the Treasury Department to get money as a judgment fund to pay NANYA, the new affected domestic producer.

[00:08:42] Speaker 00:
So there is nothing else that could be done.

[00:08:45] Speaker 00:
other than to sue on this demand letter.

[00:08:50] Speaker 00:
And it's been very clear that that's the government's intent.

[00:08:53] Speaker 00:
So if they do do that, then you can raise your arguments in response to that, right?

[00:09:00] Speaker 00:
Yes.

[00:09:01] Speaker 00:
And we tried to get it, Your Honor.

[00:09:02] Speaker 00:
We filed a protest.

[00:09:04] Speaker 00:
Even though it's not clear this is a protestable levy or exaction, the government ignored that as well.

[00:09:15] Speaker 00:
We don't want to do, and I think it's unfair to ask, given the circumstances of all the other remedies being, having been pursued already by the agency, is to wait, which could be years, while interest accrues and be at risk for additional payments.

[00:09:35] Speaker 00:
And again, it is not any different than a situation that was in the Abbott Labs case.

[00:09:44] Speaker 01:
Can I ask this, would a government collection action be filed in the CIT or in some other form?

[00:09:51] Speaker 00:
It would normally be in the CIT.

[00:09:54] Speaker 01:
Okay, so we're not faced with a situation where the first mover can change the form?

[00:10:03] Speaker 00:
No.

[00:10:05] Speaker 00:
I'm not aware of anything like that, and that certainly wasn't the intention here.

[00:10:12] Speaker 00:
My expectation would be...

[00:10:14] Speaker 00:
the case would be filed at the CIT authority collection action.

[00:10:23] Speaker 00:
And I understand the concern about, does every run-in-the-mill demand letter generate litigation?

[00:10:29] Speaker 00:
And my answer is no for the reasons I've stated.

[00:10:33] Speaker 00:
And what are those reasons as to why every demand letter wouldn't be reviewable under your theory?

[00:10:41] Speaker 00:
In this instance, the agency has already declined to use the other options available to it, administrative offset, and has already had the money paid from the Treasury under the Judgment Fund to satisfy itself.

[00:10:59] Speaker 00:
There's nothing else it could do here other than sue to collect and have interest accrue in the meantime.

[00:11:09] Speaker 00:
OK.

[00:11:10] Speaker 00:
We consumed a lot of your time with this finality issue.

[00:11:13] Speaker 00:
We'll give you a couple of minutes to address the merits.

[00:11:16] Speaker 00:
And the question there seems to be assuming that this regulation is inapplicable to this situation, the government still has a right and perhaps an obligation to sue to recover the money apart from the regulation, right?

[00:11:33] Speaker 00:
No, it has no right or obligation beyond what the regulation allows.

[00:11:41] Speaker 00:
It's axiomatic that agencies are bound by their own regulations.

[00:11:46] Speaker 00:
And in this instance, they said we are only going to have an exception to finality

[00:11:54] Speaker 00:
If one or two situations is met, one is the situation that is enunciated in the regulation under subsections B2 and 3, and the other one has to do with an effective domestic producer asking for a recalculation of the duties.

[00:12:13] Speaker 00:
Otherwise, everything is supposed to be final.

[00:12:15] Speaker 00:
And there's a very good reason for that.

[00:12:17] Speaker 00:
Suppose for a moment, hypothetically, that we construe the regulation as being inapplicable to this situation, that it's only

[00:12:24] Speaker 00:
applicable in the situation where there's an issue as to whether the importer has overpaid or underpaid duty and the effect of that on the Bird Amendment distribution.

[00:12:37] Speaker 00:
If the regulation is inapplicable, the government has a right to sue to collect overpayments just as a general matter under the Supreme Court cases, right?

[00:12:52] Speaker 00:
No, it does not, Your Honor.

[00:12:54] Speaker 00:
The agency has bound itself.

[00:12:59] Speaker 00:
You're not addressing my question.

[00:13:01] Speaker 00:
My question is let's assume the regulation doesn't apply.

[00:13:04] Speaker 00:
I'm sorry.

[00:13:05] Speaker 00:
I thought you meant the regulation, the exception to the finality part of the regulation.

[00:13:10] Speaker 00:
The whole regulation doesn't apply.

[00:13:12] Speaker 00:
The government can sue to recover, right?

[00:13:16] Speaker 00:
If the regulation doesn't apply, yes, the government can sue to recover.

[00:13:23] Speaker 00:
And but there, with all respect, there's no way to see how this regulation, which goes to the heart of what this statute is all about.

[00:13:38] Speaker 00:
The statute is very clear that it's intended to benefit domestic industries who have been injured.

[00:13:46] Speaker 00:
And if you go and even look at one of the cases cited by the government and looking at the Shea, Sydney, and other cases involving whether you can get clawback, the Canadian Lumber Two case, again, is a CIT case.

[00:14:07] Speaker 00:
not binding on you, but the court declined to seek recoupment there.

[00:14:13] Speaker 00:
Quote, when the government grants or distributes money to parties, those parties have some rights to rely on that money they receive.

[00:14:21] Speaker 00:
After a constant threat of disgorgement, recipients might be loathed to expend money for the purpose for which it was given, fearing that they could not repay the money in the event of a court order.

[00:14:31] Speaker 00:
This would, in turn, frustrate congressional intent in granting money.

[00:14:35] Speaker 00:
And the reason why this finality provision is there is to prevent the intent of Congress to be thwarted by having the government go back and say, any time we want to, we can take that money back.

[00:14:49] Speaker 00:
So there's a reason why that regulation is there.

[00:14:53] Speaker 00:
Had it not been there, the Congress would have been very upset with the drafting of those regulations and the application of them.

[00:15:03] Speaker 01:
And I don't remember.

[00:15:05] Speaker 01:
Was there federal register regulatory history that elaborated in a informative way on that language of what if it's subsection F with the peculiar language final and conclusive on the affected party?

[00:15:28] Speaker 00:
Your Honor, it sounds like it's my rebuttal time, but let me answer this question.

[00:15:35] Speaker 00:
The federal register notice came out and said, we want to make sure that effective domestic producers get paid promptly.

[00:15:46] Speaker 00:
And so we're going to do that and get that money out the door.

[00:15:49] Speaker 00:
But we're going to subject effective domestic producers to have to repay in those instances when it turns out that there's liquidations ordered by customs or reliquidations ordered by a

[00:16:04] Speaker 00:
by the court.

[00:16:05] Speaker 00:
That's the exception to that finality rule.

[00:16:09] Speaker 00:
So they made it very clear that all distributions will be final except for that one situation that they've laid out in the Federal Register as the purpose for adopting this regulation.

[00:16:21] Speaker 00:
So I would say yes, the finality regulation goes to the heart of implementing this statute.

[00:16:34] Speaker 00:
Unless my colleagues have further questions, I think we're... Thank you.

[00:16:43] Speaker 00:
Okay, hearing now, we'll give you two minutes for a rebuttal.

[00:16:47] Speaker 00:
Thank you.

[00:16:48] Speaker 00:
Ms.

[00:16:48] Speaker 00:
Cotay?

[00:16:50] Speaker 02:
Yes, Mickey Cotay for the United States.

[00:16:53] Speaker 02:
May it please the court?

[00:16:55] Speaker 02:
We respectfully request that the court remand this case with instructions that the trial court

[00:17:02] Speaker 02:
Dismissed this case is non-justiciable because customs issuance of demand letters to DAC and AREGA do not constitute final agency action.

[00:17:14] Speaker 00:
How come you didn't raise that issue earlier in the case?

[00:17:19] Speaker 02:
Quite frankly, Your Honor, I did not think of that issue earlier in the case.

[00:17:25] Speaker 02:
Initially, we moved to dismiss this case for failure to state a claim on other grounds.

[00:17:31] Speaker 02:
And I apologize to the court for not even having considered making this argument.

[00:17:39] Speaker 02:
However, as a direct result of the court's request that the parties submit supplemental briefing on the issue, we have definitely concluded based upon the law that we have reviewed that the issuance of demand letters did not constitute final agency action here.

[00:18:01] Speaker 00:
How many demand letters does the government issue every year?

[00:18:05] Speaker 00:
Do we have any sense of that?

[00:18:06] Speaker 00:
I mean, are we talking about millions of them?

[00:18:10] Speaker 02:
Your Honor, I can't fathom a guess on this.

[00:18:13] Speaker 02:
I have been practicing in this practice trade and customs practice for 26 years.

[00:18:22] Speaker 02:
This represents the first case that I've ever handled

[00:18:29] Speaker 02:
where there has been a challenge to the issuance of the demand.

[00:18:34] Speaker 02:
Customs issues demands in connection with penalties.

[00:18:38] Speaker 02:
There are no challenges to the demands in connection with penalties.

[00:18:43] Speaker 02:
In fact, after the agency or after a defendant, later defendant, importer does not pay, the statute provides for customs to file

[00:18:58] Speaker 02:
an action, a penalty action against the importer.

[00:19:02] Speaker 02:
And within the context of that action, all issues relating to the assessment of the penalty are determined by the court or reviewable by the court.

[00:19:15] Speaker 01:
Is the penalty more than pay us what you owe plus interest?

[00:19:19] Speaker 02:
Well, I'm speaking in a different context right now, Your Honor, and that's with respect to just demands per se.

[00:19:26] Speaker 02:
But to address that particular question, this is not a penalty case.

[00:19:33] Speaker 02:
The demands issued here were only demands for the amounts of the overpayment.

[00:19:40] Speaker 02:
And as per the regulations, if the amounts were not repaid, interest would begin accruing at 3% after 30 days.

[00:19:53] Speaker 01:
Can I ask you this question?

[00:19:56] Speaker 01:
I think at page 20 of your brief, not only does the United States have the authority under Supreme Court case works and other cases as well to seek return of the overpayment, but you say the United States has the duty to do so.

[00:20:21] Speaker 01:
So what practical

[00:20:26] Speaker 01:
issue should we be thinking about?

[00:20:30] Speaker 01:
You say you have the duty to seek the money.

[00:20:33] Speaker 01:
You say the decision is utterly final.

[00:20:35] Speaker 01:
You have an exact dollar amount.

[00:20:40] Speaker 01:
Why should this suit not proceed in the very same forum?

[00:20:44] Speaker 01:
There's not even a choice of forum issue.

[00:20:47] Speaker 01:
There seems something very odd about

[00:20:52] Speaker 01:
about final agency action in this particular circumstance where the Justice Department has said you have a duty to go and get the money in the same forum.

[00:21:06] Speaker 02:
So, may I respond, Your Honor?

[00:21:08] Speaker 01:
Yes, please do.

[00:21:08] Speaker 01:
Okay.

[00:21:11] Speaker 02:
I'll start with forum.

[00:21:13] Speaker 02:
In the event that Customs makes a determination to refer this case to the Department of Justice,

[00:21:22] Speaker 02:
this case would not be handled by the Court of International Trade.

[00:21:28] Speaker 02:
It would be handled by a district court.

[00:21:31] Speaker 01:
Under what statute?

[00:21:33] Speaker 02:
I don't know the statute for district court, Your Honor, but I do know that under Section, or 28 USC, Section 1582, which deals with civil actions commenced by the United States in the Court of International Trade,

[00:21:51] Speaker 02:
This kind of collection action would not fall within the scope of the court's jurisdiction.

[00:22:00] Speaker 02:
Therefore, the United States can't bring this collection action to the CIT.

[00:22:07] Speaker 02:
It would have to pursue this action in a district court.

[00:22:10] Speaker 01:
And I don't have this in front of me, but this would not also, this would not fall under 191592.

[00:22:19] Speaker 02:
Section 15, or 19 USC, Section 1592 is a penalty action.

[00:22:26] Speaker 02:
And that involves negligence, gross negligence, and fraud in connection with the importation of merchandise.

[00:22:34] Speaker 02:
This doesn't fall within the scope of that.

[00:22:36] Speaker 02:
That penalty actions are covered by Section 1582.

[00:22:42] Speaker 02:
Suits against sureties who fail to pay duties that they've bonded

[00:22:49] Speaker 02:
fall within the scope of Section 1582 because the United States would then have to sue the sureties.

[00:22:58] Speaker 01:
So your view is that if this suit is dismissed and you fulfill your declared duty to go and get the money, you're going to go to a district court and presumably to a regional circuit to have the issues about the interpretation of the regulation.

[00:23:19] Speaker 01:
under the CDSOA hashed out?

[00:23:24] Speaker 02:
If the agency makes a determination to refer a collection action against DAC and ERECA to the Department of Justice, the Department of Justice has an independent obligation to make a determination as to whether or not to commence such litigation.

[00:23:47] Speaker 02:
If the Department of Justice determined to commence such litigation, it would then file suit in the appropriate district court.

[00:23:57] Speaker 02:
And I apologize to the court because we are not there yet.

[00:24:04] Speaker 02:
The only thing that has occurred here is that customs has followed the regulations governing or promulgated under the CDSOA.

[00:24:16] Speaker 02:
the regulations expressly notify the ADPs that in the event of an overpayment, customs will seek to collect the overpayment from them.

[00:24:30] Speaker 01:
Right, but now you're arguing about the interpretive question of the regulation, which I just want to assume for these purposes is actually a genuine debate about the scope of the regulation.

[00:24:44] Speaker 01:
And then maybe not so much a debate about the authority to go seek overpayment if the regulation is simply inapplicable.

[00:24:54] Speaker 01:
Can I ask you a different question about final agency action?

[00:24:58] Speaker 01:
Yes, Your Honor.

[00:24:59] Speaker 01:
Is that a question that is jurisdictional in the particular sense that we are obliged to address it, even though you did not present it as a

[00:25:14] Speaker 01:
as a defense?

[00:25:19] Speaker 01:
Does the government have a position about that?

[00:25:21] Speaker 01:
My general understanding is that we have not treated that as a final agent, as jurisdictional, but maybe the circuits have different views about that.

[00:25:34] Speaker 01:
Do you have any sense of that?

[00:25:37] Speaker 02:
I do not.

[00:25:38] Speaker 02:
What I was going to say earlier with respect to the regulation

[00:25:44] Speaker 02:
had more to do with final agency action than the second part of this case, which is the trial court's judgment.

[00:25:54] Speaker 02:
What I was going to say is that the rights and obligations were determined within customs regulations.

[00:26:03] Speaker 01:
This is really important to me, so I think I'm just going to ask it a second time.

[00:26:09] Speaker 01:
Do you have a view about whether we are obliged

[00:26:13] Speaker 01:
to decide whether there's final agency action here?

[00:26:20] Speaker 02:
I believe that this is jurisdictional, and I believe that jurisdiction is never waived, and I believe that the court may make a determination that this is non-justiciable because there's no final agency action.

[00:26:47] Speaker 03:
Indeed, what is happening here is... I just want to ask.

[00:26:52] Speaker 03:
I understand your answer to that question, but just to confirm, you don't have any cases to cite to us or anything for that position, right?

[00:27:01] Speaker 02:
I apologize, Your Honor.

[00:27:02] Speaker 02:
No, I do not.

[00:27:04] Speaker 00:
I think the Ashford case specifically reserved the question of whether the finality requirement is jurisdictional or not.

[00:27:12] Speaker 02:
Correct.

[00:27:12] Speaker 02:
Well, I think in that...

[00:27:15] Speaker 02:
Ashford case, that was a direct appeal.

[00:27:17] Speaker 02:
There was no trial decision, I believe, and so the court could make that determination, if I recall correctly.

[00:27:28] Speaker 02:
So it's a slightly different circumstance here.

[00:27:31] Speaker 01:
That was the VA case.

[00:27:36] Speaker 01:
Right, but Ashford, among other things, cited automated radio, which was a case from the Eastern District of

[00:27:43] Speaker 01:
of Virginia, so that actually was a court case.

[00:27:47] Speaker 01:
And in both of those, we went on to decide the final agency action question, and therefore, because we were deciding it, we didn't have to decide if we were obliged to decide it, which I think maybe is an issue here if any of us would be tempted to not want to decide it.

[00:28:12] Speaker 01:
because you didn't raise it.

[00:28:14] Speaker 01:
Correct.

[00:28:15] Speaker 01:
We did not raise it, Your Honor.

[00:28:17] Speaker 01:
That is a fact.

[00:28:18] Speaker 01:
So on the merits piece of it, what is the basis for, let's assume for a moment, and I realize you disagree with this and have reasonable grounds to disagree.

[00:28:38] Speaker 01:
Let's assume for a minute that B3,

[00:28:41] Speaker 01:
is tied in the regulation to B2 so that even B3 is only about the shrinking of the pot for distribution and not about the increase of the number of claimants on the fixed pot.

[00:28:57] Speaker 01:
And we have a increase, we have the latter case, right, where suddenly

[00:29:04] Speaker 01:
There's a new claimant in this sixth pot as opposed to withdrawal of some of the money in the pot because one of the importers turned out to have overpaid.

[00:29:13] Speaker 01:
Assuming that B3 is not applicable, then why doesn't the last clause of F express regulatory intent that the money shall not come back?

[00:29:33] Speaker 01:
be taken back by the government in this situation?

[00:29:41] Speaker 02:
Customs not bind the government, the United States in that way.

[00:29:49] Speaker 02:
Only Congress can make that determination, which is what Congress did in connection with

[00:30:01] Speaker 02:
19 U.S.C.

[00:30:02] Speaker 02:
Section 1514, where it explicitly made a determination as to final and conclusive language in connection with the liquidation and reliquidation of importations.

[00:30:18] Speaker 02:
And it expressly, Congress expressly provided that the liquidations were final as to all parties, including the United States.

[00:30:28] Speaker 02:
Congress has the authority to do that

[00:30:31] Speaker 02:
an agency does not.

[00:30:33] Speaker 02:
Here, as the administrator of the CDSOA, customs could only bind the ADPs and other relevant parties, not the United States.

[00:30:49] Speaker 01:
So just to make sure I understand, I'm understanding what you're saying to be that even though

[00:30:57] Speaker 01:
is it Commerce or Customs here that promulgated the regulation?

[00:31:02] Speaker 02:
I apologize.

[00:31:03] Speaker 02:
I may have said Commerce, but I meant to say Customs.

[00:31:06] Speaker 01:
Okay, so that when Customs was promulgating the regulation under the authority of CDSOA, it could not have decided to make conclusive the distribution of money

[00:31:25] Speaker 01:
turns out by later events to have been too high a distribution.

[00:31:33] Speaker 01:
That would have been outside the congressional authorization of regulatory authority.

[00:31:39] Speaker 02:
That is our position.

[00:31:42] Speaker 01:
Okay.

[00:31:43] Speaker 02:
The CDSOA is silent on that, but that is not something that customs could have taken upon themselves to do.

[00:31:56] Speaker 00:
But I guess assuming that customs did have the authority, does the regulation deal with that situation and purport to say that the United States can't recover the overpayment back?

[00:32:11] Speaker 02:
The regulation does not restrict the customs from attempting to recover erroneous distribution.

[00:32:22] Speaker 02:
If I may, the government has not

[00:32:26] Speaker 02:
attempted to collect any monies from DACA and ARREGA.

[00:32:30] Speaker 02:
I just wanted to clarify that the government has not exhausted any other alternatives.

[00:32:37] Speaker 02:
I want to correct that for the record, Your Honors.

[00:32:40] Speaker 02:
They pursued no collection.

[00:32:42] Speaker 02:
They pursued no offsets.

[00:32:44] Speaker 02:
All that CUSTOMS has done in this instance is to issue demand letters that provide notice that CUSTOMS believes

[00:32:54] Speaker 02:
that the overpayments were made.

[00:32:57] Speaker 02:
And the next step here would be to make a determination as to whether or not to refer this case for collection.

[00:33:08] Speaker 02:
That determination, a referral for collection, would be a final agency action of sorts, but even then, Your Honors, the determination as to whether or not to pursue the action in court would be made by the Department of Justice and then... Are you suggesting the decision to refer the action to the Department of Justice is reviewable final agency action?

[00:33:33] Speaker 02:
No, where I was going with that, Your Honor, is actually quite the contrary.

[00:33:37] Speaker 02:
What I was going to say is that that's even closer to a final agency action than this.

[00:33:43] Speaker 02:
However, the actual action that would affect DAC and ERIGA would be the actual filing of a collection action in court.

[00:33:55] Speaker 02:
And then the court would determine whether or not the United States was entitled to reimbursement.

[00:34:01] Speaker 02:
And the court would determine in making this determination whether or not DAC and ERIGA

[00:34:06] Speaker 02:
are required to pay interest, which is just the regular assessment of interest and make the determination as to whether or not the United States is entitled to its dollar amount, its current dollar amount.

[00:34:23] Speaker 02:
And in conclusion, Your Honors, I will say this.

[00:34:26] Speaker 02:
The CDSOA permits customs to either provide full

[00:34:35] Speaker 02:
distributions for qualifying expenditures when there's enough money in the special fund to do so or when there is not to provide pro rata distributions.

[00:34:48] Speaker 02:
Customs provided pro rata distributions and as a result of a sea shift in the law had to include an additional ADP.

[00:34:59] Speaker 02:
The regulations, the federal registered notices,

[00:35:05] Speaker 02:
put these ADPs on notice of the consequences of overpayments.

[00:35:14] Speaker 02:
And DAC and ARIGA have received the benefits of the CDSOA.

[00:35:21] Speaker 02:
However, they will not, even though they chose to participate and receive benefits, not fulfill their obligations to repay.

[00:35:31] Speaker 00:
Okay.

[00:35:31] Speaker 00:
Thank you, Ms.

[00:35:31] Speaker 00:
Cote.

[00:35:32] Speaker 02:
Thank you, Your Honor.

[00:35:33] Speaker 00:
Mr. Rosenthal, you have two minutes.

[00:35:37] Speaker 00:
Thank you, Your Honor.

[00:35:38] Speaker 00:
Regarding the jurisdiction for collection, 28 USC 1582 requires the government to go to the CIT to collect on customs duties.

[00:35:54] Speaker 00:
And there's been a CIT decision in 2011, the furniture brand, international case, which basically says,

[00:36:02] Speaker 00:
that it has exclusive jurisdiction over CDSOA in regards to CDSOA as involving customs duties as well.

[00:36:13] Speaker 01:
What's the citation of that, please?

[00:36:16] Speaker 00:
The furniture brands pay international cases is 807, feds up second, 1301, quarter contractual trade 2011.

[00:36:26] Speaker 01:
OK, thank you.

[00:36:28] Speaker 00:
Thank you.

[00:36:30] Speaker 00:
Your Honor, the last thing I'm going to say is that there is a reason for a finality provision in the regulation, and that is to prevent

[00:36:43] Speaker 00:
a disgorgement of funds that were supposed to be used to invest, rehire, and accomplish the other objectives to help injured domestic industries to suggest that the regulation that customs put in to implement the purposes of the law would not apply in this circumstance has no basis.

[00:37:04] Speaker 01:
I guess the problem that I have with that is that what you just said seems like something one could say about

[00:37:12] Speaker 01:
a very, very wide range of statutory authorizations to pay out money.

[00:37:19] Speaker 01:
It's for the benefit of the recipients and yet it can turn out that too much was paid and maybe even turn out that too much was paid based on later facts and I'm not sure why that would change anything.

[00:37:34] Speaker 00:
Well, but that's the reason why the law has statute of limitations.

[00:37:39] Speaker 00:
That's why the agencies have statute of limitations.

[00:37:42] Speaker 00:
That's why the law...

[00:37:45] Speaker 00:
reliquidations after a certain amount of time because it wants to have certainty.

[00:37:50] Speaker 00:
So there is, there are many reasons in the law for certainty, many reasons the law to say at some point we're not going to allow the government to change its mind and come after you.

[00:38:01] Speaker 00:
That's a very common thing and it's especially important in this context.

[00:38:06] Speaker 00:
Thank you.

[00:38:07] Speaker 00:
Okay.

[00:38:08] Speaker 00:
Thank you, Mr. Rosenpol.

[00:38:09] Speaker 00:
Thank you, Ms.

[00:38:10] Speaker 00:
Potei.

[00:38:10] Speaker 00:
The case is submitted.

[00:38:16] Speaker 01:
The honorable court is adjourned until tomorrow morning at 10 a.m.