[00:00:00] Speaker 02:
The next case is Eddie Honey Farms versus Monterey Mushrooms, 2022-2105.

[00:00:10] Speaker 02:
Mr. Gordon.

[00:00:12] Speaker 00:
Good morning, Your Honors.

[00:00:13] Speaker 00:
May it please the Court.

[00:00:14] Speaker 00:
My name is Adam Gordon from the Bristol Group PLLC, appearing today on behalf of Monterey Mushrooms.

[00:00:21] Speaker 00:
This appeal involves two issues.

[00:00:23] Speaker 00:
The first, whether the plain language of the Continued Dumping and Subsidy Offset Act of 2000

[00:00:28] Speaker 00:
requires Customs and Border Protection to distribute all interest, including delinquency interest, to affected domestic parties.

[00:00:36] Speaker 00:
It does.

[00:00:37] Speaker 00:
The second issue is whether plaintiff, my client, had noticed before July 2014 that CBP had decided unilaterally and contrary to both its statute and regulations to withhold delinquency interest from distribution.

[00:00:52] Speaker 00:
The answer to this is unequivocally no.

[00:00:55] Speaker 00:
I'd like to start with the statute.

[00:00:57] Speaker 00:
the plain language of the statute, which requires distribution of delinquency interest.

[00:01:04] Speaker 00:
In 2000, Congress passed the CDSOA and includes three provisions that are of interest here.

[00:01:10] Speaker 00:
The first, and they need to be read in order.

[00:01:13] Speaker 00:
The first is 1675C subpart D, distribution of funds, requiring the commissioner, customs, saying they shall distribute all funds, including all interest earned on the funds from assessed duties

[00:01:27] Speaker 00:
received in the preceding fiscal year to affected domestic producers.

[00:01:31] Speaker 02:
From assessed duties.

[00:01:35] Speaker 00:
All funds from assessed duties.

[00:01:36] Speaker 00:
From assessed duties.

[00:01:37] Speaker 00:
Yes, Your Honor.

[00:01:40] Speaker 00:
Following that is the provision directing customs how to do this, requiring them to set up special accounts, requiring the commissioner saying they shall deposit into the special accounts all anti-dumping and countervailing duties, including interest earned on such duties that are assessed

[00:01:57] Speaker 00:
assessed after the effective date of this section under the anti-dumping order or finding or countervailing duty order with respect to which the account was created.

[00:02:05] Speaker 02:
And isn't that at liquidation?

[00:02:09] Speaker 02:
And so isn't that where the two-year statute of limitations comes in?

[00:02:15] Speaker 00:
Well, Your Honor, that doesn't say at liquidation.

[00:02:17] Speaker 00:
That says, shall deposit into these special accounts all anti-dumping duties, including interest earned on such duties enters our position

[00:02:26] Speaker 00:
that delinquency interest is unquestionably earned on the duties when they're not paid within the 30 days following issuance of the bill from customs.

[00:02:36] Speaker 00:
I think it's also important to acknowledge or recognize the third provisions, 19 USC 1675 CE 3, which gets to the heart of the authority given to customs, which is very limited

[00:02:48] Speaker 00:
they are directed and authorized to provide the time and manner of distributions.

[00:02:54] Speaker 00:
And that says, consistent with the requirements of subsections C and D of this section, the commissioner shall by regulation prescribe the time and manner in which distributions of the funds in a special account shall be made.

[00:03:06] Speaker 00:
So to the extent there's any arguable uncertainty with respect to the terms of 1675 C E2,

[00:03:14] Speaker 00:
You have to read that together with the broad language of section 1675 CD, which directs the commissioner to distribute all funds, and that's broader than just the duties themselves, including all interest earned on the funds, which encompasses all types of interest, not simply 1677 G interest on underpayments to the affected domestic parties.

[00:03:38] Speaker 04:
I want to ask you a question about funds.

[00:03:40] Speaker 04:
I think it's interesting that one of the statutory provisions you talked to us about uses the word funds, and the other one says, doesn't use the word funds.

[00:03:49] Speaker 04:
How are you interpreting funds?

[00:03:51] Speaker 04:
And I guess we have to say, all funds from assessed duties would be the right language to focus on.

[00:03:59] Speaker 04:
How does funds differ from what's in these special accounts?

[00:04:03] Speaker 00:
well i think funds is is a and broader uh... broader uh... phrase deliberately used by congress in light of the context of providing expensive relief to the domestic industry where uh... dumping or subsidization continues but what are funds compared to you know that the amount of money in the special accounts i don't think there's a difference between them i want to know if you think there is a difference you know that

[00:04:29] Speaker 00:
No, I think funds connotes the duties plus the interests that arises from them.

[00:04:35] Speaker 04:
Actually, it can't be funds.

[00:04:38] Speaker 04:
Yes, you're right.

[00:04:38] Speaker 04:
It includes the interest because the parenthetical says so.

[00:04:41] Speaker 00:
Correct.

[00:04:42] Speaker 00:
And that interest is not limited to the same.

[00:04:44] Speaker 04:
I understand that's the issue.

[00:04:45] Speaker 04:
I'm just trying to understand the language all funds in 1675D3.

[00:04:52] Speaker 04:
And then there's the language all any dumping or countervailing duties.

[00:04:59] Speaker 00:
in the other provision sixteen seventy five c one and i'm reading them as being the same thing and i want to see if you agree at setting the interest issues well i think they have to read together and that would they would be they would represent the same the same corpus yes okay and that that's pursuant to sixteen seventy five c three which refers back to both of the earlier provisions uh... in in in when directing the commissioner uh...

[00:05:26] Speaker 00:
to create regulations to prescribe merely the time and manner, not authority to interpret the statute, which is clear on its face.

[00:05:36] Speaker 03:
I'll end up on a question that Judge Lurie asked.

[00:05:39] Speaker 03:
In your view, does assessment or duties assessed necessarily refer to assessment occurring at the time of liquidation?

[00:05:48] Speaker 00:
Well, Your Honor, duties are assessed at the time of liquidation.

[00:05:51] Speaker 00:
And the amount of duties is fixed then.

[00:05:54] Speaker 00:
But the amount of interest, especially delinquency interest, will continue.

[00:05:58] Speaker 00:
The amount of interest will continue to accrue.

[00:06:01] Speaker 00:
And then the final amount of interest that is owed won't be known until payment is made for the delinquency.

[00:06:07] Speaker 00:
And that's a function of, in this case, it's a function of the amount of the duties that are fixed at liquidation.

[00:06:13] Speaker 00:
So it is our position that both the agency and the trial court

[00:06:17] Speaker 00:
rendered incorrect analyses of the statute to conclude that it was ambiguous and that did not require the distribution of delinquency interest.

[00:06:27] Speaker 00:
To reach the conclusion that they had, it requires reading the statute out of order, it ignores the plain language of the text, and it requires reading the word all out of the statute, which is impermissible, and it requires distorting the text

[00:06:43] Speaker 00:
in a way, past reasonable bounds of interpretation, particularly where the text is as clear as it is here.

[00:06:49] Speaker 04:
Do you know, and this might be a question better for the government, but do you know how often delinquency interest is assessed?

[00:06:56] Speaker 00:
Well, the broader answer, in terms of honestly the sort of frequency with which this occurs,

[00:07:05] Speaker 00:
we don't know and part of this because we've never been able to get an actual number from customs concerning the amount of delinquency interest at issue in these in these cases you know if the percentage for the delinquency interest is the same as the percentage for the other kind of interest which is indisputably part of the agreed to by the parties to be included in the special fund we don't know your honor we don't know and i'd be very into very deep i'd be very interested to hear more from opposing counsel about that

[00:07:37] Speaker 03:
extent we do reach the legislative history, does any of it mention delinquency interest?

[00:07:45] Speaker 00:
No, Congress like customs in its notice of proposed rulemaking and in its final rules didn't discuss delinquency versus Section 1677-G interest at all.

[00:07:58] Speaker 00:
And in fact, it's worth noting that in the notice of proposed rulemaking and in the

[00:08:03] Speaker 00:
final rule in the proposed regulations themselves and in the final regulation, all they refer to in a section that actually has nothing to do with this type of interest, they refer to statutory interest.

[00:08:15] Speaker 00:
In fact, it's worth noting that, as you would expect, this statute

[00:08:21] Speaker 00:
uh... received an intense amount of interest in scrutiny when it when it rose uh... after the notice of proposed rulemaking was issued there are forty sets of comments file addressing the proposed regulations not a single one address either section sixteen seventy seven g interest or uh... fifteen oh five d interest the only comment made was with respect to whether the special accounts and clearing accounts themselves would be interested

[00:08:47] Speaker 00:
And that's something Customs spoke to, both in the Notice of Proposal rulemaking and in the commentary to the final rule.

[00:08:56] Speaker 00:
And it bears note in the chronology of events here.

[00:08:59] Speaker 04:
At the time, when Customs... They do make clear in that section, though, that they don't think the delinquency interest will be included.

[00:09:10] Speaker 04:
maybe I should state that better.

[00:09:11] Speaker 04:
They make it clear that the only interest that they think is going to be included is the 1677-G interest, right?

[00:09:21] Speaker 04:
I agree.

[00:09:21] Speaker 04:
It's not in a section titled interest.

[00:09:23] Speaker 04:
It's in a different section.

[00:09:25] Speaker 00:
It is in a section entitled interest on the question of whether the special accounts and clearing accounts themselves would bear interest.

[00:09:32] Speaker 00:
And the answer was no, because Congress hadn't authorized that.

[00:09:35] Speaker 00:
But I think that

[00:09:38] Speaker 00:
phrase you just quoted is very important to understand in the context in which it was offered.

[00:09:43] Speaker 00:
This is responding to the question of whether, as I said, the special accounts, the accounts themselves, would bear interest.

[00:09:50] Speaker 00:
And it's important to note that in responding to that in the final rule, customs specifically refers back to what it said in the notice of proposed rulemaking, saying, as previously explained in the notice of proposed rulemaking, funds in government accounts are not interest-bearing.

[00:10:08] Speaker 00:
unless specified by Congress.

[00:10:10] Speaker 00:
So when it says, thus, only interest charged on anti-dumping and countervailing duty funds themselves, that's referring to interest before they're placed in the special accounts, not to the interest that accrues on the funds themselves, whether it's 1677G interest or 1505D interest.

[00:10:34] Speaker 00:
And I think it's very important to note the reference back to the

[00:10:38] Speaker 00:
Notice of Proposed Rulemaking, which says, there it says, in their own comment on this, if there is interest paid by any importer on any anti-dumping or countervailing duties billed during the liquidation process for the import entries, that interest will be transferred to the clearing account or the special account as appropriate.

[00:10:57] Speaker 00:
And we know from the record that at the time Customs published that comment, it was intending to distribute the 1505D interest.

[00:11:06] Speaker 00:
Only after that did it make a change in its position, but it never revealed that to the public until, in our case, until 2014.

[00:11:16] Speaker 00:
We had no idea that it was withholding delinquency interest.

[00:11:18] Speaker 03:
So looking at the briefing, it was unclear to me whether or not it was ever publicly made known that that was the position, that the section 1505D interest would be distributed.

[00:11:28] Speaker 03:
Was that public or was that internal in terms of that being the position?

[00:11:33] Speaker 00:
Well, the position is only shown in the record in an internal CBP document, and that was never known publicly.

[00:11:42] Speaker 00:
Our client didn't learn of it until July of 2014 in the context of private conversations with the agency related to a failure to distribute the full amount of a settlement in a litigation.

[00:11:54] Speaker 00:
Other parties learned of it either through a report to Congress in 2015,

[00:11:59] Speaker 00:
or through a very brief comment in their one of their fair register notices published in twenty sixteen and until that time uh... outside i i might be the only person here before the court on this issue today who's had experience with the cd s l a from its inception not a single person thought that this is how we're being administered because it was a six minutes you're going to three oh that's not there you are going to work for you with apologies thank you for the intelligence

[00:12:34] Speaker 01:
Morning, Your Honors.

[00:12:35] Speaker 01:
May it please the Court.

[00:12:37] Speaker 01:
Your Honors, this case is about a statute.

[00:12:41] Speaker 01:
It is statutory construction, statutory analysis.

[00:12:45] Speaker 01:
What customs did in the administrative record, of course, can never contravene the terms of the statute.

[00:12:53] Speaker 01:
And what's very interesting about this particular statute is that

[00:12:59] Speaker 01:
The ADPs would have this court parse out the word all.

[00:13:04] Speaker 01:
But the word all remarkably doesn't show up everywhere.

[00:13:09] Speaker 01:
And what we have here is, and you've been told that the ADPs would like you to follow the statute in order.

[00:13:16] Speaker 01:
You have to follow the statute in order.

[00:13:19] Speaker 01:
But that doesn't make any sense.

[00:13:21] Speaker 01:
Because the distribution of funds relies on the monies that go into the special accounts first.

[00:13:29] Speaker 01:
So it's a chicken and egg story.

[00:13:31] Speaker 01:
You have to go to the special accounts first to find out what it was that Congress intended to go into those accounts.

[00:13:41] Speaker 01:
Because it is from those accounts that the distributions will be made.

[00:13:47] Speaker 04:
So you're saying we should read 1675E1

[00:13:51] Speaker 04:
which tells you deposit into accounts, and then you read 1675D3, which tells you to distribute.

[00:13:59] Speaker 04:
That's correct, Your Honor.

[00:14:00] Speaker 04:
I don't know if it makes a difference, but what language are you relying on specifically in 1675CE1 for saying when it says,

[00:14:12] Speaker 04:
You know, even if, I guess, because it doesn't have all in it.

[00:14:16] Speaker 04:
But what work do you think all is doing in these statutes, or at least in 1675 CD3?

[00:14:22] Speaker 04:
Right, Your Honor.

[00:14:24] Speaker 01:
In the distribution statute.

[00:14:27] Speaker 01:
That's the only time we see the phrase all interest.

[00:14:31] Speaker 01:
And it says, as Your Honor noted earlier, all interest earned on the funds.

[00:14:37] Speaker 01:
And it's also interesting, we have in the section with respect to the deposits into accounts, it is

[00:14:45] Speaker 01:
There's no use of the word funds.

[00:14:48] Speaker 01:
It's duties.

[00:14:50] Speaker 01:
So we've gone from the word duties to the word funds, as your honor was noting earlier.

[00:14:55] Speaker 01:
What is going on there?

[00:14:58] Speaker 01:
If we go back to how things work, as an entry comes in, if an anti-dumping countervailing is applicable, when it's assessed,

[00:15:10] Speaker 01:
For the most part, if all goes well, nothing else should happen.

[00:15:14] Speaker 01:
There should have been a deposit perfectly, bang on, and that money rolls into the special account.

[00:15:20] Speaker 01:
But then there are two other options that could occur.

[00:15:22] Speaker 01:
There could have been an under deposit of the amount of money, because whatever comes out of commerce, oops, the rate was higher.

[00:15:31] Speaker 01:
Sorry, your best interest, but you tried, but you failed.

[00:15:35] Speaker 01:
So that means interest is running.

[00:15:37] Speaker 01:
It's statutory interest.

[00:15:39] Speaker 01:
And the only statutory interest that runs on under-deposits is 1677G.

[00:15:46] Speaker 01:
The other scenario could be an over-deposit.

[00:15:50] Speaker 01:
Someone decided, oh, well, it's too much, or they used an earlier rate, and they got a better rate out of commerce this time around.

[00:15:59] Speaker 01:
So they get interest back.

[00:16:02] Speaker 01:
So when we're looking at what's going into the accounts, one of those three things is happening.

[00:16:07] Speaker 01:
Perfect money with no interest, because they got it right, under deposits requiring interest, and then there's the other interest, the interest that will go back to the importer.

[00:16:18] Speaker 03:
And it's interesting.

[00:16:20] Speaker 03:
the opposing counsel's argument that it's all interest.

[00:16:23] Speaker 03:
At least that's what's identified.

[00:16:25] Speaker 01:
But indeed, at the first stage of where the all interest subsequently is going to be distributed to me, the ADP, prior to that, I've got to go into an account.

[00:16:38] Speaker 01:
So what's going into the account?

[00:16:40] Speaker 01:
I can't give you what's not there.

[00:16:42] Speaker 01:
So the account, the role into the account is what is setting us up.

[00:16:47] Speaker 01:
And we're being told it's what is duties that are assessed.

[00:16:51] Speaker 01:
And we understand that to be liquidation.

[00:16:54] Speaker 01:
So what is the only interest that occurs at liquidation?

[00:16:58] Speaker 01:
In the context of an ADD or CVD order, it is 1677G interest.

[00:17:04] Speaker 01:
It cannot perforce.

[00:17:06] Speaker 01:
It is impossible at liquidation for 1505D delinquency interest to be in play.

[00:17:14] Speaker 01:
It's not possible.

[00:17:14] Speaker 04:
Can I back up for a minute?

[00:17:16] Speaker 04:
I think that you're relying on, when you say you're relying on the language that are assessed, meaning that we're looking at liquidation, and then it's not just any duties.

[00:17:25] Speaker 04:
It's all anti-dumping or countervailing duties.

[00:17:28] Speaker 04:
under the anti-dumping order or finding or the countervailing duty order, right?

[00:17:34] Speaker 01:
Yes, Your Honor.

[00:17:35] Speaker 04:
So you're finding that all that language is modifying the word duties, because it says interest earned on such duties.

[00:17:42] Speaker 01:
Exactly, Your Honor.

[00:17:43] Speaker 01:
The use of the such duties relates you right back to the duties that have been assessed under the anti-dumping or and or countervailing and or finding under.

[00:17:53] Speaker 04:
And as I understand the government's position,

[00:17:57] Speaker 04:
That does not include delinquency interests, because delinquency interests would be on the duties that were assessed, the duties, the interest,

[00:18:10] Speaker 04:
and any fees or other, I don't know, what else could it be?

[00:18:15] Speaker 01:
What else is... Well, it can be, 1505D requires someone not to pay after they've been requested.

[00:18:22] Speaker 04:
So they don't pay within 30 days.

[00:18:24] Speaker 01:
Which obviously is delinquency.

[00:18:25] Speaker 01:
So it's an interesting thing about the use of the word earned, because we think about if you place money in a bank, you earn interest on your deposits.

[00:18:36] Speaker 01:
But if you are late on your credit card payment to that same bank, you're going to be hit with interest.

[00:18:44] Speaker 01:
You're not earning interest.

[00:18:47] Speaker 01:
It's the time value of money that the bank is recovering from you when you're late.

[00:18:52] Speaker 01:
But here, it's talking about earnings.

[00:18:54] Speaker 02:
Chancellor, if you're right about delinquency interest, where does it go?

[00:18:58] Speaker 01:
Delinquency interests under a long-standing regulation from customs, which occurred prior to the enactment of the CDSOA and which is consistent with what every logical person who's ever dealt with a mortgage or credit card bill or any other kind of bill,

[00:19:14] Speaker 01:
If you are late, the first thing that gets paid is interest.

[00:19:19] Speaker 02:
So under a regulation from customs... Yes, but 1677G interest gets paid back, right?

[00:19:26] Speaker 02:
Then why would delinquency interest not be paid back?

[00:19:29] Speaker 01:
Because the statute doesn't call for the delinquency interest to go to the ADPs.

[00:19:34] Speaker 01:
Because it's not present here.

[00:19:37] Speaker 04:
Because what is going into... Their view is that

[00:19:40] Speaker 04:
It says it shall distribute all funds, including all interest earned on the funds, from assessed duties.

[00:19:47] Speaker 04:
Why isn't delinquency interest an interest earned on the fund?

[00:19:53] Speaker 01:
Because what's in the distribution of funds is what goes into these special accounts.

[00:20:01] Speaker 01:
And if it were a late payment under the regulations, delinquency interest doesn't go into those accounts.

[00:20:08] Speaker 01:
But if we go back to the accounts, the plain language talks about... Why doesn't... Wait, wait, wait.

[00:20:13] Speaker 04:
You're saying that all interest doesn't include delinquency interest because

[00:20:21] Speaker 04:
Delinquency interest doesn't go in the fund.

[00:20:23] Speaker 01:
Because the plain language of the statute of what rolls into the special accounts, which then become the distributed funds later, does not include- It says, shall distribute all funds, including all interest earned on the funds.

[00:20:39] Speaker 04:
And so even if it's not in the fund, but it's an interest earned on the fund, why wouldn't it be provided?

[00:20:44] Speaker 04:
Because I think that- There's an answer to this that's in the statute.

[00:20:47] Speaker 04:
I don't know why you're not giving it.

[00:20:49] Speaker 04:
I mean, I don't know that I agree with the answer, but there's an answer.

[00:20:54] Speaker 01:
Well, it's earned on the funds, and it goes right back to the same statute earlier, which is earned on the funds when they're assessed.

[00:21:01] Speaker 01:
And 1505D interest is not earned on the funds for two purposes.

[00:21:09] Speaker 01:
1505D runs after liquidation.

[00:21:12] Speaker 01:
And at the time of liquidation, as your honor is referencing, you would have anti-dumping potentially, countervailing potentially.

[00:21:20] Speaker 01:
You'd have that interest 1677G.

[00:21:23] Speaker 01:
You'd also have, perhaps, regular duties if these are not a zero radiation.

[00:21:28] Speaker 03:
Does each complication essentially have a temporal component?

[00:21:31] Speaker 03:
in terms of being at the time of liquidation?

[00:21:34] Speaker 03:
I'm trying to make sure I understand your discussion.

[00:21:37] Speaker 01:
Yes, exactly right, Your Honor.

[00:21:39] Speaker 01:
The analysis from our perspective is that when this language is used, very special language, it talks about duties that are assessed.

[00:21:49] Speaker 01:
This court has said in Norse that assessed and liquidation are synonymous with one another.

[00:21:55] Speaker 01:
Assessing duties means liquidation.

[00:21:58] Speaker 01:
It can't be anything else when you're assessing duties.

[00:22:02] Speaker 01:
So at the time you're assessing duties, what interest is the only interest available?

[00:22:06] Speaker 01:
1677 J. And so at that point, that's what's being deposited in the accounts.

[00:22:13] Speaker 01:
The distribution of funds doesn't get into all the other things that occur afterwards.

[00:22:19] Speaker 01:
The distribution of funds is just what funds are being distributed.

[00:22:26] Speaker 01:
It is the duties, and it's each entry.

[00:22:29] Speaker 01:
So when we're talking about, well, why would Congress use all funds here and duties there?

[00:22:36] Speaker 01:
Because assessment is occurring at liquidation, and what is liquidated is an entry.

[00:22:42] Speaker 01:
So that now, once it's liquidated, we have a rest.

[00:22:46] Speaker 01:
We have the amount of money that's due and its interest if it was an underpayment.

[00:22:50] Speaker 01:
And with the overpayment, I think the overpayments help explain why the word all funds.

[00:22:58] Speaker 02:
I haven't heard the words two-year statute of limitations.

[00:23:03] Speaker 02:
in your argument.

[00:23:04] Speaker 02:
That's ultimately what this is about.

[00:23:06] Speaker 02:
Two years after the cause of action first accrues.

[00:23:10] Speaker 01:
Yes, Your Honor.

[00:23:10] Speaker 02:
And your view is that accrues at liquidation?

[00:23:14] Speaker 01:
Well, the cause of action here, which was really complained about, is we should not have any reduction by 1505D if there's a late payment.

[00:23:27] Speaker 01:
There are two simultaneous things occurring here.

[00:23:30] Speaker 01:
There is the issue of when did you all have notice?

[00:23:34] Speaker 01:
You had notice when the final notice went into the Federal Register notice, and you had asked questions about, well, what kind of interest?

[00:23:43] Speaker 01:
It's interesting.

[00:23:43] Speaker 03:
So you noticed when the final rule, is that what you're getting at?

[00:23:46] Speaker 01:
The final rule, yes, Your Honor.

[00:23:49] Speaker 01:
It's kind of interesting because when we look at the final rule, the ADPs who were asking questions, they're part of the comments that are reflected in the final rule, they ask, well,

[00:24:03] Speaker 01:
If somebody overpaid and you give back interest to them because they earned interest on the overpaid deposit, will that be taken away from us?

[00:24:14] Speaker 01:
And Customs says no.

[00:24:16] Speaker 01:
Because the ADPs are observing the fact, this is an implicit acknowledgement by the commoners, that the interest that is in play for these accounts is 6077J.

[00:24:28] Speaker 01:
Has to be.

[00:24:29] Speaker 01:
That's why they asked that question.

[00:24:31] Speaker 01:
Oh, you're not going to diminish our funds by the amount you paid back to another importer, right?

[00:24:36] Speaker 01:
Because they over-deposit it.

[00:24:38] Speaker 01:
And customs was like, that's correct.

[00:24:39] Speaker 01:
You're going to get to keep that.

[00:24:40] Speaker 01:
Don't worry.

[00:24:42] Speaker 01:
That, I believe, is why the language of all funds on interests earned.

[00:24:49] Speaker 01:
You're not allowing that interest to be because there are multiple entries that went in and made up the whole bucket of funds.

[00:24:59] Speaker 01:
You're not allowing a payment of interest to an importer to then affect these other entries that actually had interest due and owing under 1677-G.

[00:25:09] Speaker 01:
So you're not doing a set off against an entirely different entry.

[00:25:14] Speaker 03:
I think that's what's... You can say that we need to reach the time bar issue if we agree that delinquency interest is excluded.

[00:25:25] Speaker 01:
If we agree that delinquency interest is excluded, I don't think that we need... Well, I mean, I think we still need to reach the time bar simply because you should enforce the rights that are available and jurisdiction would not reach back to 2000 and 2001.

[00:25:45] Speaker 02:
In other words, only delinquency interest is at issue here?

[00:25:50] Speaker 01:
Well, I mean, arguably, TIFTY, which is the subsequent amendment to the CDSOA, said, well, we're going to give you all interest, which is one of the reasons why I think if we look at the plain language and we look at the fact that Congress, through TIFTY, amends.

[00:26:07] Speaker 02:
How about answering my question?

[00:26:09] Speaker 02:
Is only delinquency interest at stake here?

[00:26:16] Speaker 01:
My understanding would be only delinquency interest would be at stake here because it would be... The enactment of TIFTY going back two years, this would not affect

[00:26:32] Speaker 01:
They're already within the time zone where they would get every form of interest.

[00:26:36] Speaker 01:
They would get 1677G, 1505D, 580 if the US government brings a lawsuit.

[00:26:42] Speaker 01:
And oh, and if a court decides to provide equitable interest, you'll get that too.

[00:26:45] Speaker 02:
Well, I thought there was interest that is not delinquency interest, but is barred by the two-year statute of limitations.

[00:26:53] Speaker 02:
And then there is delinquency interest, which is simply not covered by the statute to be paid back.

[00:27:01] Speaker 01:
Yes, yes, Your Honor.

[00:27:03] Speaker 01:
It would be the 1677G interest and the 1505D interest.

[00:27:08] Speaker 01:
And it would be barred by the statute of limitations.

[00:27:10] Speaker 01:
So it would only relate back two years from when, because these are as applied, each distribution essentially becomes a new world, which is why the last two years can actually be heard.

[00:27:23] Speaker 04:
But the parties here aren't claiming that they didn't get 1677G interest, right?

[00:27:29] Speaker 01:
Your Honor, I don't know that that's, I think the primary focus is just the delinquency interest.

[00:27:38] Speaker 01:
They don't make a claim that they thought they weren't getting 16, 17.

[00:27:42] Speaker 02:
Well, in about seven seconds, we're going to find out.

[00:27:47] Speaker 04:
Can I ask one quick question?

[00:27:48] Speaker 04:
I just wanted to ask the question, which is, how often is delinquency interest assessed?

[00:27:54] Speaker 04:
And at what rate compared to the rate, is it the same rate?

[00:27:59] Speaker 04:
that is the rate for the 1677G interest?

[00:28:09] Speaker 01:
The delinquency interest in the 1677G, I believe, do run at the same rate.

[00:28:12] Speaker 01:
I think they use the IRS rate, so that would be the same.

[00:28:16] Speaker 01:
But with respect to how much delinquency interest, I'm not entirely sure.

[00:28:22] Speaker 01:
I will say this.

[00:28:24] Speaker 01:
We know that

[00:28:26] Speaker 01:
Congress decided to pass 50 because when importers were not paying, there was a kind of a rash of importers, dump and run, and there was a bond in lieu back then, so you didn't even have deposits.

[00:28:43] Speaker 01:
The government has to go out and collect the amount that should have been deposited, but because there was a new shipper, and this court I know is aware of the new shipper basis where you could use a bond in lieu of paying anything,

[00:28:56] Speaker 01:
Those cases took a while to work up.

[00:28:58] Speaker 01:
And so the delinquency interest would be there.

[00:29:01] Speaker 02:
I think you're off the track.

[00:29:02] Speaker 02:
I think you're off the track and you're out of time.

[00:29:05] Speaker 02:
So let's hear from, rebuttal from Mr. Gordon.

[00:29:16] Speaker 00:
Your Honor, just a couple of quick points.

[00:29:19] Speaker 00:
Firstly, I was surprised to hear, or not to hear, why TIFTIA was actually passed.

[00:29:24] Speaker 00:
The relevant portion of TIFTIA was passed by Congress in reaction to its understanding that customs was failing to distribute all interest as the statute requires.

[00:29:36] Speaker 00:
Is this case only about delinquency interest?

[00:29:39] Speaker 00:
Yes, it is, Your Honor.

[00:29:41] Speaker 00:
I want to pick up on one point, or the opposing counsel's focus on the phrase assessed duties in 1675 CD and the distribution of funds portion.

[00:29:52] Speaker 00:
Composing counsel is trying to assign that a role as temporally limiting exactly what duties or what duties and interests would be distributed.

[00:30:00] Speaker 00:
I think it's important to understand that the special accounts and the clearing accounts involve two different kinds of duties.

[00:30:05] Speaker 00:
On the one hand, the clearing accounts involve estimated duties.

[00:30:10] Speaker 00:
On the other hand, the special accounts involve assessed duties.

[00:30:14] Speaker 00:
uh... estimated duties are deposited they can go up they can go down depending on the results of the commerce review uh... you don't know the final fixed amount until liquidation when they are

[00:30:24] Speaker 00:
assessed duties start temporal limitation needs to be uh... read together with the phrase all funds without limitation i will say that with respect to the language in this statute congress knew full well uh... what's involved in the tariff act of nineteen thirty if congress intended to limit the kinds of interest that were to be paid it would have done so here by referring specifically to perhaps sixteen seventy seven g interest alone or fifteen oh five d interest by itself

[00:30:53] Speaker 04:
with Chevron possibly on the chopping block.

[00:30:56] Speaker 04:
You don't, are you relying on Chevron at all?

[00:30:59] Speaker 00:
my what even on chevron deference all the line is that i wouldn't be but i mean what is your view on chevron i think a lot of the statute is abundantly clear you don't need to get to chevron uh... to chevron analysis here but if you do uh... the agency's reading or implementation if you will the statute is out of bounds they didn't interpret the statute at all if you look at the record the only reason that they did decline to distribute delinquency interest is in the record

[00:31:27] Speaker 00:
and it wasn't actually stated on the record until 2021, is that they had what they refer to, euphemistically, as a technological limitation that prevented them from assigning Section 1505 deinterest.

[00:31:39] Speaker 00:
They apparently didn't realize that until after they had already said, it's the position of the agency that we will look for ways to assign the 1505 deinterest to the relevant orders.

[00:31:50] Speaker 00:
Not whether they would, but how.

[00:31:53] Speaker 00:
So let me just say in closing, if you will, that this appeal is about more than an uncertain amount of money or appealed statute.

[00:32:02] Speaker 00:
This speaks to fundamental principles of administrative law, fidelity to the obvious and clear language of a statute, transparency in agency action, accountability for what the agency actually did and why, reviewing an agency's actions based on what actually occurred, and giving notice of critical decisions.

[00:32:20] Speaker 00:
I would respectfully submit to this court that affirming this decision would signal to agencies within this court's jurisdiction at least that they can issue regulations that pay lip service to a statute,

[00:32:30] Speaker 00:
but then do whatever they want without telling anyone for at least 14 years.

[00:32:34] Speaker 02:
Sounds terrible.

[00:32:35] Speaker 00:
I agree.

[00:32:36] Speaker 00:
And we feel that this court should not condone that kind of administrative mischief.

[00:32:41] Speaker 00:
So we would respectfully submit that the court should reverse and remand for judgment in plaintiff's favor.

[00:32:46] Speaker 00:
Thank you very much.

[00:32:46] Speaker 02:
Thank you, counsel.

[00:32:47] Speaker 02:
The case is submitted.