US Says It Did Not Use 'Disallowed Hearsay' in Making Wooden Cabinet EAPA Decision
CBP did not rely on "disallowed hearsay" when finding that Skyview Cabinet evaded the antidumping and countervailing duty orders on wooden cabinets and vanities and components thereof from China, the U.S. argued in a Sept. 19 reply brief. Responding to Skyview's arguments that CBP improperly relied on an affidavit and business confidential statements made by a corporate investigator, the government said that the importer has put forth no evidence questioning the truthfulness and credibility of the evidence and that the affidavits are not irrelevant to the evasion finding. CBP also did not solely rely on the information in the affidavit alone, the brief said (Skyview Cabinet USA v. United States, CIT #22-00080).
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The case concerns CBP's findings in its Enforce and Protect Act investigation on Skyview and three other companies. Skyview filed suit at CIT in March, arguing that CBP can't make an adverse inference where the importer is powerless in inducing a shipper to produce records (see 2203140022). In its motion for judgment, Skyview said that CBP unlawfully relied on hearsay in its substantial evidence determination, that the agency did not follow all EAPA procedures, and that it made a country of origin determination without conferring with Commerce as required.
In its reply, the U.S. said that it did not use hearsay. The government first cited the U.S. Court of Appeals for the Federal Circuit, which first ruled that hearsay evidence can be treated as substantial evidence, even without corroboration, if the circumstances lend it credence. "The Government in fact routinely relies on factual information presented in sworn affidavits in investigations," the brief said. "Moreover, the affidavits, and the information within, were not the only sources of evidence of evasion. ... Moreover, much of the information in the declaration was public, and even as redacted, the declaration provided a reasonable understanding of the substance of the information."
The U.S. defended its evasion finding as backed by substantial evidence. The data showed a huge dip in U.S. imports of wooden cabinets and vanities from China following the imposition of provisional CVD measures, then a concurrent uptick in U.S. imports of the same goods from Malaysia, the government said. All of this happened despite the fact that no manufacturers in Malaysia had the ability to make meaningful quantities of wooden cabinets or vanities "to explain the sudden exponential increase in exports" of these goods from Malaysia. Further, the U.S. populated the record with evidence that Malaysian company Rowenda Kitchen transshipped Chinese-origin wooden cabinets and vanities, the U.S. said.
Skyview said that CBP tossed record evidence it provided. The government replied finding that Skyview's evidence did not explain the discrepancies in the data, nor did it have production information showing that the subject merchandise was made in Malaysia. "Further, the various omissions and discrepancies in Skyview’s responses to the requests for information called into question the accuracy of the information provided," the brief said.
The plaintiff also argued that CBP erred by shifting the burden of proof onto Skyview and failing to verify the information the plaintiff provided over the agency's country of origin analysis. The U.S. found none of these arguments "persuasive," arguing that "EAPA does not provide for burden shifting; rather, Skyview must provide evidence, CBP must make a substantial evidence determination of evasion, and there is no requirement that CBP verify evidence." Skyview said CBP shifted the burden of proof by evaluating the probative value of Skyview's evidence. The U.S. said that this did not shift the burden of proof, but rather "the burden to establish entitlement to a reduced duty is born by the respondent, not the Government."