Royal Brush Manufacturing, Inc. v. United States

Case: 22-1226 Document: 77 Page: 1 Filed: 07/27/2023
United States Court of Appeals
for the Federal Circuit
______________________
ROYAL BRUSH MANUFACTURING, INC.,
Plaintiff-Appellant
v.
UNITED STATES, DIXON TICONDEROGA
COMPANY,
Defendants-Appellees
______________________
2022-1226
______________________
Appeal from the United States Court of International
Trade in No. 1:19-cv-00198-MAB, Chief Judge Mark A.
Barnett.
______________________
Decided: July 27, 2023
______________________
STEVEN D. GORDON, Holland & Knight LLP, Washing-
ton, DC, argued for plaintiff-appellant. Also represented
by RONALD ALAN OLEYNIK.
MARGARET JANTZEN, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee United States.
Also represented by BRIAN M. BOYNTON, CLAUDIA BURKE,
PATRICIA M. MCCARTHY, ANTONIA RAMOS SOARES.
FELICIA LEBORGNE NOWELS, Akerman LLP,
Case: 22-1226 Document: 77 Page: 2 Filed: 07/27/2023
2 ROYAL BRUSH MANUFACTURING, INC. v. US
Tallahassee, FL, argued for defendant-appellee Dixon Ti-
conderoga Company. Also represented by MICHAEL J.
LARSON; JULIA PADIERNA-PERALTA, Washington, DC.
______________________
Before LOURIE, DYK, and STOLL, Circuit Judges.
DYK, Circuit Judge.
Royal Brush Manufacturing Inc. (“Royal Brush”), an
importer of pencils, was accused of transshipping pencils
from China through the Philippines to avoid antidumping
duties assessed on pencils of Chinese origin. Customs and
Border Patrol (“CBP”) found that the pencils had been
transshipped. It based this finding in part on evidence that
had not been supplied to Royal Brush because it was confi-
dential business information. Royal Brush was also denied
the opportunity to rebut this evidence.
We hold that we have jurisdiction and that the failure
to provide access to the redacted information was a viola-
tion of due process. Under the applicable CBP regulation,
Royal Brush must be given an opportunity to rebut this in-
formation with its own evidence.
BACKGROUND
This case concerns five entries of pencils that Royal
Brush imported to the United States between 2017 and
2018. On February 27, 2018, Dixon Ticonderoga Company
(“Dixon”), a competing importer of pencils, filed a com-
plaint with CBP alleging evasion by Royal Brush of anti-
dumping duties under the Enforce and Protect Act of 2015
(“EAPA”), Pub. L. No. 114-125, 130 Stat. 155 (codified in
scattered sections of 19 U.S.C.), 19 U.S.C. § 1517, and the
related regulation, 19 C.F.R. Part 165. Dixon alleged that
Royal Brush was transshipping pencils from China
through the Philippines, falsely claiming the pencils to be
of Philippine origin and thus not subject to the antidump-
ing duties assessed on certain pencils from China.
Case: 22-1226 Document: 77 Page: 3 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 3
CBP initiated an investigation on March 27, 2018, and
a CBP attaché conducted a site visit to Royal Brush’s Phil-
ippines manufacturer, the entity Royal Brush alleged had
been producing the pencils that it imported. The attaché
took photographs of and inside the facility and, in his re-
port, wrote that “[t]he pictures and captions provided in
this report indicate a clear story line of repacked Chinese
pencils bound for the United States in boxes labeled, Made
in the Philippines.” J.A. 175. CBP only provided Royal
Brush with the public version of the report which redacted
all of the photographs.
CBP then commenced a formal investigation to deter-
mine whether Royal Brush was evading antidumping du-
ties. CBP issued a notice of investigation to Royal Brush
in a letter dated June 26, 2018. The letter stated that “CBP
will . . . suspend the liquidation for any entry that has en-
tered on or after March 27, 2018, the date of initiation of
this investigation; and, CBP will extend the liquidation pe-
riod for all unliquidated entries that entered before that
date.” J.A. 776. Such liquidation suspension was man-
dated by 19 U.S.C. § 1517(e) and 19 C.F.R. § 165.24(b)(1).
In November 2018, CBP conducted a verification site
visit to the Philippines manufacturer. The resulting Veri-
fication Report concluded that the Philippines manufac-
turer did not have the capability to produce sufficient
quantities of pencils to account for the total number of pen-
cils imported to the United States in 2018. CBP provided
only a redacted version of the report to Royal Brush which
included neither the numbers used to calculate production
capability and capacity nor the final production capability
and capacity determinations. The redacted version also
omitted other confidential business information, 1 such as
1 Confidential business information is defined by
regulation as information “consist[ing] of trade secrets and
commercial or financial information obtained from any
Case: 22-1226 Document: 77 Page: 4 Filed: 07/27/2023
4 ROYAL BRUSH MANUFACTURING, INC. v. US
photographs of the facility and information about certain
invoices and purchase orders. 2
Royal Brush sought to file a rebuttal to the Verification
Report. Because the Verification Report was submitted
more than 200 days after the investigation was initiated, a
rebuttal would only have been proper if the Verification Re-
port contained “new factual information.” 19 C.F.R.
§ 165.23(c)(1). CBP at first indicated that this rebuttal was
allowed but ultimately rejected the rebuttal because CBP
determined that the verification report did not, in fact, con-
tain new factual information. CBP only accepted Royal
Brush’s written arguments in response to the Verification
Report. Royal Brush was denied the opportunity to submit
rebuttal evidence.
On May 6, 2019, CBP issued a final affirmative deter-
mination of evasion and noted that it would continue to
suspend liquidation of entries. The evasion determination
was upheld on de novo administrative review by the CBP’s
Office of Trade, Regulations, and Rulings.
On November 6, 2019, Royal Brush appealed to the
U.S. Court of International Trade (“CIT”), and soon there-
after moved to enjoin liquidation throughout the pendency
of the case. The CIT granted the motion to enjoin liquida-
tion on November 27, 2019, and later remanded the
person, which is privileged or confidential in accordance
with 5 U.S.C. 552(b)(4).” 19 C.F.R. § 165.4(a). 5 U.S.C.
§ 552(b)(4) covers “trade secrets and commercial or finan-
cial information obtained from a person and privileged or
confidential.”
2 Counsel for Royal Brush was provided with unre-
dacted copies of the Attaché Report and Verification Report
in later proceedings at the CIT pursuant to a CIT protec-
tive order. This information was not available to Royal
Brush during the CBP proceedings.
Case: 22-1226 Document: 77 Page: 5 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 5
proceeding to CBP requiring CBP to provide summaries of
the redacted information, as required by 19 C.F.R.
§ 165.4(e), and to reconsider the denial of the opportunity
to rebut. The CIT did “not hold that Royal Brush is entitled
to receive business confidential information” and noted
that “Congress has not mandated that Royal Brush be af-
forded such access and Royal Brush has not shown that due
process requires it.” J.A. 81.
On remand, CBP issued public summary versions of
the Attaché Report and the Verification Report to Royal
Brush. The photographs in the Attaché Report were re-
placed with generic descriptions such as “photo of sign,”
“photo of a different sign,” and “photo of labeled box with
finished merchandise.” J.A. 1375–84. The summaries in
the Verification Report replaced all numbers associated
with production capability and capacity with either “num-
ber” or “no.” According to CBP:
CBP’s remand proceeding complied with the
Court’s Remand Order. The EAPA statute and ap-
plicable regulations do not provide for a mecha-
nism, such as an administrative protective order
. . ., for disclosure of confidential business infor-
mation to interested parties. As such, CBP is not
authorized to disclose business confidential infor-
mation to interested parties or their authorized
representatives.
J.A. 36 (footnote omitted).
As to the rebuttal issue, CBP “continue[d] to find that
the Verification Report d[id] not contain new factual infor-
mation” and rejected Royal Brush’s rebuttal submission.
J.A. 18. Specifically, CBP found that the calculations in
the Verification Report were “simply CBP using and veri-
fying the factual data on the record and therefore [were] a
natural part of CBP’s investigation as to whether evasion
occurred.” J.A. 26.
Case: 22-1226 Document: 77 Page: 6 Filed: 07/27/2023
6 ROYAL BRUSH MANUFACTURING, INC. v. US
Royal Brush appealed again to the CIT, arguing that
the public summaries were insufficient; that the failure to
provide the unredacted information deprived Royal Brush
of due process; that the Verification Report contained new
information that it should be allowed to rebut; and that the
CBP determination was arbitrary and capricious and not
supported by substantial evidence. 3 The CIT held that
“CBP has complied with 19 C.F.R. § 165.4 by providing nec-
essary public summaries of the confidential information
and that Royal Brush has not established that CBP has
failed to provide Royal Brush the process that it is due.”
J.A. 9–10. The CIT also sustained CBP’s decision to reject
Royal Brush’s rebuttal submission and upheld the evasion
determination, concluding that it was not arbitrary and
was supported by substantial evidence.
Royal Brush appealed to this court pursuant to 28
U.S.C. § 1295(a)(5). Around December 2021, after Royal
Brush filed this appeal, the government informed Royal
Brush that, contrary to the EAPA, 19 U.S.C.
§ 1517(d)(1)(A)(i), (e)(1), CBP’s own regulations, 19 C.F.R.
§§ 165.24(b)(1)(i), 165.28(a)(1)(i)–(ii), and CBP’s previous
representations in its initiation of investigation and final
evasion determination, all five of Royal Brush’s entries had
been liquidated. All of these five entries had been liqui-
dated before the injunction, and the first had been liqui-
dated even before Dixon’s transshipping complaint. At
liquidation, antidumping duties were assessed on the last
two entries but not on the first three.
3 Royal Brush also challenged CBP’s use of adverse
inferences in the evasion determination proceedings at the
CIT. The CIT held that this issue was moot, and Royal
Brush does not raise it on appeal.
Case: 22-1226 Document: 77 Page: 7 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 7
Because the entries had been liquidated, the United
States moved to dismiss this case for lack of jurisdiction.
That motion was referred to the merits panel.
DISCUSSION
I. Jurisdiction
Congress, concerned with evasion of antidumping du-
ties, on February 24, 2016, enacted the EAPA, a statutory
scheme for determining whether “covered merchandise
was entered into the customs territory of the United States
through evasion.” 19 U.S.C. § 1517(c)(1)(A). Evasion pro-
ceedings begin with an allegation or referral to CBP. 19
U.S.C. § 1517(b)(1). Then, CBP has 15 business days to
“initiate an investigation if [CBP] determines that the in-
formation provided in the allegation or the referral . . . rea-
sonably suggests that covered merchandise has been
entered into the customs territory of the United States
through evasion.” Id. After initiation, CBP generally has
300 days to make an evasion determination based on sub-
stantial evidence. Id. § 1517(c)(1)(A). Finally, after CBP
makes its evasion determination, an entity deemed to have
evaded duties has 30 days to seek administrative review by
“appeal[ing] . . . for de novo review of the determination.”
Id. § 1517(f)(1).
When the administrative proceedings are complete, the
entity that imported the covered merchandise can seek ju-
dicial review in the CIT “to determine whether the [eva-
sion] determination and [administrative] review [was]
conducted in accordance” with statutory provisions. Id. §
1517(g)(1). Our court has jurisdiction over “an appeal from
a final decision of the [CIT].” 28 U.S.C. § 1295(a)(5). It is
undisputed that Royal Brush timely sought administrative
review and judicial review of the evasion determination
pursuant to those provisions.
Nevertheless, the government argues that we do not
have jurisdiction because Royal Brush failed to protest the
Case: 22-1226 Document: 77 Page: 8 Filed: 07/27/2023
8 ROYAL BRUSH MANUFACTURING, INC. v. US
liquidations within the statutory time period. The govern-
ment notes that under 19 U.S.C. § 1514(c)(3)(A), a provi-
sion separate from the EAPA, if a party wishes to protest
the liquidation of an entry, it must do so within 180 days
of the liquidation. Failure to file a protest renders the liq-
uidation “final and conclusive upon all persons (including
the United States and any officer thereof).” 19 U.S.C. §
1514(a). Royal Brush did not timely file such a protest.
We have held that “once liquidation occurs the trial
court is powerless to order the assessment of duties at any
different rate.” SKF USA, Inc. v. United States, 512 F.3d
1326, 1328 (Fed. Cir. 2008); see also Zenith Radio Corp. v.
United States, 710 F.2d 806, 810 (Fed. Cir. 1983). Because
courts are powerless to change the assessment of duties,
we have held that cases seeking a change in duties after
liquidation are moot. SFK, 512 F.3d at 1329. The govern-
ment argues that this line of cases applies to cases involv-
ing the EAPA, such as this one.
The government misconstrues the nature of this pro-
ceeding. Royal Brush did not bring a challenge to a liqui-
dation determination; it brought a challenge to an evasion
determination pursuant to the statute specifically author-
izing such challenges. That statute does not require a liq-
uidation protest as a condition of review. Indeed, Royal
Brush had nothing to protest in the liquidation determina-
tions of its first three entries because Royal Brush was not
assessed any antidumping duties. 4
4 Pauline Garcia, a CBP employee with the ability to
review liquidation data in CBP’s database, confirmed that
“CBP did not assess antidumping duties on th[ese]
entr[ies]” in her declaration supporting the government’s
motion to dismiss. Def.-Appellee the United States’ Mot. to
Dismiss for Lack of Jurisdiction Ex. A ¶¶ 5–7, ECF No. 62.
Case: 22-1226 Document: 77 Page: 9 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 9
At least as to these three entries it is clear that the case
is not moot. Apart from the possibility that CBP might suc-
cessfully seek reliquidation of the entries, the evasion de-
termination makes Royal Brush potentially liable for civil
penalties, see 19 U.S.C. § 1517(h), including a “penalty in
an amount not to exceed the domestic value of the mer-
chandise,” id. § 1592(c)(1). See id. § 1592(a)–(c) (noting
that civil penalties can be assessed for fraudulently or neg-
ligently introducing merchandise into the United States by
means of “any document or electronically transmitted data
or information, written or oral statement, or act which is
material and false”). The government has given no indica-
tion that it intends to forgo these remedies. This case is
not moot. See F.C.C. v. Fox Television Stations, Inc., 567
U.S. 239, 255 (2012) (finding no mootness largely because
the agency had the authority to increase future penalties);
Hyosung TNS Inc. v. Int’l Trade Comm’n, 926 F.3d 1353,
1358 (Fed. Cir. 2019) (“[A] case may remain alive based on
collateral consequences, which may be found in the pro-
spect that a judgment will affect future litigation or admin-
istrative action.”) (internal quotation omitted).
We need not determine for purposes of this case what
remedies Royal Brush may have to recover the assessed
duties with respect to their two entries that were subject to
antidumping duties upon liquidation since Royal Brush, in
this case, has not sought such relief.
II. Standard of Review
This Court applies the same standard of review as ap-
plied by the CIT in its review of the administrative record.
BMW of N. Am. LLC v. United States, 926 F.3d 1291, 1300
(Fed. Cir. 2019). This requires this Court to determine
“whether any determination, finding, or conclusion is arbi-
trary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” 19 U.S.C. § 1517(g)(2)(B).
Case: 22-1226 Document: 77 Page: 10 Filed: 07/27/2023
10 ROYAL BRUSH MANUFACTURING, INC. v. US
III. Due Process
We first address Royal Brush’s contention that CBP’s
reliance on the redacted information in the information in
the Attaché Report and Verification Report deprived it of
due process under the Fifth Amendment of the Constitu-
tion. We have previously held that importers in antidump-
ing proceedings are entitled to procedural due process. 5
The government agrees that importers in evasion proceed-
ings enjoy rights to procedural due process. 6
One “relatively immutable” principle of due process is
that “where governmental action seriously injures an indi-
vidual, and the reasonableness of the action depends on
fact findings, the evidence used to prove the [g]overnment’s
case must be disclosed to the individual so that he has an
opportunity to show that it is untrue.” Greene v. McElroy,
360 U.S. 474, 496 (1959). This immutable principle applies
to cases where facts have been withheld from an entity dur-
ing an administrative proceeding. Id. at 497 (gathering
5 See PSC VSMPO-Avisma Corp. v. United States,
688 F.3d 751, 761–66 (Fed. Cir. 2012) (“The due process
right to which [the importer] was entitled [in the anti-
dumping proceeding] was the right to notice and a mean-
ingful opportunity to be heard.”) (internal quotations and
citation omitted); NEC Corp. v. United States, 151 F.3d
1361, 1370 (Fed. Cir. 1998) (“NEC[’s] claim[] that the de-
termination of certain contested facts regarding the pend-
ing antidumping investigation against it was tainted by
prejudgment . . . is a procedural due process claim of the
kind generally cognizable under the Fifth Amendment of
the Constitution.”).
6 The government concedes that Royal Brush has “a
procedural due process right to notice and a meaningful op-
portunity to be heard,” Gov’t Br. 29 (internal quotations
and citation omitted), and that this right to due process is
“undisputed,” id. at 37.
Case: 22-1226 Document: 77 Page: 11 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 11
cases); Ramirez v. Dep’t of Homeland Sec., 975 F.3d 1342,
1349–53 (Fed. Cir. 2020); Doty v. United States, 53 F.3d
1244, 1251 (Fed. Cir. 1995) (“The agency’s . . . withholding
of the evidence on which [it] purported to rely . . . w[as]
. . . egregiously removed from the fairness required of an
agency in its administrative responsibilities . . . .”). 7
One particular example cited in Greene, Ohio Bell Tel-
ephone Co. v. Public Utilities Commission of Ohio, 301 U.S.
292 (1937), is similar to this case. In Ohio Bell, the Public
Utilities Commission set rates for Ohio Bell’s services and
directed Ohio Bell to issue refunds based on the rate calcu-
lations. 301 U.S. at 294–99. In so doing, the Public Utili-
ties Commission relied on price trend information that was
not provided to Ohio Bell. Id. at 297–301. The Supreme
Court held that this was a violation of due process: “To fix
7 See also Stone v. F.D.I.C., 179 F.3d 1368, 1376
(Fed. Cir. 1999) (“Procedural due process guarantees are
not met if the [party adverse to the agency action] has no-
tice only of certain charges or portions of the evidence and
the deciding official considers new and material infor-
mation.”); Ralls Corp. v. Comm. on Foreign Inv. in U.S.,
758 F.3d 296, 319 (D.C. Cir. 2014) (“[D]ue process requires,
at the least, that an affected party . . . be given access to
the unclassified evidence on which the official actor relied
and be afforded an opportunity to rebut that evidence.”);
Am.-Arab Anti-Discrimination Comm. v. Reno, 70 F.3d
1045, 1069 (9th Cir. 1995) (“[T]he very foundation of the
adversary process assumes that use of undisclosed infor-
mation will violate due process because of the risk of er-
ror.”); Sykes v. Apfel, 228 F.3d 259, 273 (3d Cir. 2000);
Ralpho v. Bell, 569 F.2d 607, 629 (D.C. Cir. 1977); Henry
J. Friendly, Some Kind of Hearing, 123 U. Pa. L. Rev. 1267,
1283 (1975) (“There can . . . be no fair dispute over the right
to know the nature of the evidence on which the adminis-
trator relies.”).
Case: 22-1226 Document: 77 Page: 12 Filed: 07/27/2023
12 ROYAL BRUSH MANUFACTURING, INC. v. US
the value of these components [relied upon for the rate de-
termination] the Commission had recourse to statistics
which it collected for itself. There was no suitable oppor-
tunity through evidence and argument to challenge the re-
sult.” Id. at 306 (internal quotations and citation omitted).
The Court noted that “much that [agencies] do within the
realm of administrative discretion is exempt from supervi-
sion if [constitutional] restraints have been obeyed. All the
more insistent is the need, when power has been bestowed
so freely, that the inexorable safeguard of a fair and open
hearing be maintained in its integrity.” Id. at 304 (internal
quotations and citation omitted). The rule of Ohio Bell and
related cases can simply be seen as the outcome of the bal-
ancing test later articulated in Mathews v. Eldridge, 424
U.S. 319 (1976).
In short, the law is clear that, in adjudicative adminis-
trative proceedings, due process “includes the right to know
what evidence is being used against one.” Robbins v. U.S.
R.R. Ret. Bd., 594 F.2d 448, 452 (5th Cir. 1979). We are
aware of no court holding that confidential business infor-
mation is exempt from this constitutional requirement of
disclosure to regulated parties in administrative
proceedings brought against them. 8 The government cites
8 This requirement may not apply in administrative
proceedings that are deemed legislative in nature. In Nor-
wegian Nitrogen Products Co. v. United States, 288 U.S.
294 (1933), a case not cited by the parties, a new duty rate
was assessed on sodium nitrate, based largely on the pro-
duction costs American manufacturers disclosed to the
Tariff Commission. 288 U.S. at 297–298. “The information
as to costs was subject to a pledge of secrecy; the manufac-
turers taking the position, to which the Commission ac-
ceded, that costs were trade secrets, to be withheld from
competitors.” Id. at 298. As such, the information was not
disclosed to a party affected by the change in duties that
Case: 22-1226 Document: 77 Page: 13 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 13
none. 9 There is no legitimate government interest here in
refusing to provide confidential business information to
wished to challenge that change. Id. at 299, 303. The
Court upheld the Commission’s refusal to disclose because
the agency was performing a legislative function. Id. at
305 (“What is done by the Tariff Commission and the Pres-
ident in changing the tariff rates to conform to new condi-
tions is in substance a delegation, though a permissible
one, of the legislative process.”); see also United States v.
Fla. E. Coast Ry. Co., 410 U.S. 224, 245–46 (1973) (finding
no constitutional right to oral argument in the agency pro-
ceeding where “[n]o effort was made to single out any par-
ticular railroad” and the proceedings were legislative in
nature); Gilda Indus., Inc. v. United States, 446 F.3d 1271,
1274–75, 1284 (Fed. Cir. 2006) (finding that an importer
had no right to procedural due process protections when
challenging the inclusion of toasted breads on a retaliation
list created by the United States Trade Representative to
retaliate against a European ban on certain American
meat imports). This is, of course, quite different from the
present situation. We have held that the relatively analo-
gous antidumping proceedings are “‘relatively formal ad-
ministrative procedure[s]’ that adjudicate parties’ rights.”
Pesquera Mares Australes Ltda. v. United States, 266 F.3d
1372, 1381 (Fed. Cir. 2001) (quoting United States v. Mead
Corp., 533 U.S. 218, 230 (2001)); see also NEC Corp., 151
F.3d at 1370 (rejecting the argument that the assessment
of antidumping duties on an individual importer was “a
challenge to the [g]overnment’s legislative power to regu-
late NEC’s conduct in foreign commerce”). Evasion deter-
minations are similarly adjudicative.
9 The government notes that, in Reno, the court
stated that “courts have allowed the Government to keep
certain information confidential.” 70 F.3d at 1070. How-
ever, “the exceptions to full disclosure are narrowly circum-
scribed,” and involve, for instance, state secrets and
Case: 22-1226 Document: 77 Page: 14 Filed: 07/27/2023
14 ROYAL BRUSH MANUFACTURING, INC. v. US
Royal Brush when all government concerns about the ne-
cessity of secrecy can be alleviated by issuing a protective
order, as discussed below.
There is also no question here that CBP relied upon
factual information not provided to Royal Brush to support
its determination that Royal Brush was evading duties by
transshipping Chinese pencils through the Philippines. In
the Notice of Final Determination as Evasion, CBP stated:
Based on entry information and CBP’s calculations
of Philippines Shipper’s production capacity using
data supplied by Philippines Shipper and infor-
mation obtained at verification, CBP determined
that total U.S. imports of pencils by all importers
during 2018 that were identified with Philippines
Shipper as manufacturer exceeded the company’s
annual production capacity by [] percent.
J.A. 105. CBP used that number to support its evasion de-
termination by explaining that, based on its calculations,
the Philippines manufacturer “must have been shipping
large volumes of pencils to the United States from sources
other than its own production facilities.” J.A. 105–06. Be-
fore the Final Determination as to Evasion, Royal Brush
did not have access to the data that led CBP to this conclu-
sion. This was not remedied after remand from the CIT to
CBP, as all CBP did was replace blank brackets with either
“number” or “no.” 10
matters of national security. Id.; see also Ralls Corp., 758
F.3d at 319 (“[D]ue process does not require disclosure of
classified information supporting official action.”);
Abourezk v. Reagan, 785 F.2d 1043, 1061 (D.C. Cir. 1986).
10 Royal Brush also argues that it was improperly de-
nied access to other redacted information in the Verifica-
tion report, such as photographs, “identifying information
Case: 22-1226 Document: 77 Page: 15 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 15
CBP also relied on the redacted photographs in the
CBP Attaché Report in its evasion determination. The Fi-
nal Determination as to Evasion specifically mentions one
such photograph in its recitation of “information on the rec-
ord [that] supports the conclusion that” Royal Brush had
engaged in transshipping. J.A. 106. The Administrative
Determination on Appeal states that “[t]he CBP Attaché’s
report, complete with observations and photographs, une-
quivocally demonstrates repackaging of Chinese pencils
into boxes labeled as made in the Philippines and destined
for the United States.” J.A. 94–95. The public summaries
provided after remand provided no meaningful infor-
mation. Descriptions such as “photo of box with labeled
finished merchandise” and “photo of labeled boxes” did not
provide Royal Brush with enough information to know
what evidence was being used against it. J.A. 1378–79.
In sum, CBP relied on factual information that was not
provided to Royal Brush to determine that Royal Brush
had evaded duties. This, in and of itself, is a clear violation
of due process.
The government nonetheless argues that confidential
business information cannot not be disclosed absent a stat-
ute or regulation authorizing a protective order. 11 In this
about certain invoices and purchase order numbers,” and
“the identity of Manufacturer personnel whom the agency
interviewed.” Appellant’s Br. at 22. However, Royal Brush
makes no specific citations to where CBP relied on this in-
formation in its determination of evasion.
11 In its Final Remand Determination, CBP deter-
mined:
The EAPA statute and applicable regulations do
not provide for a mechanism, such as an adminis-
trative protective order (APO), for disclosure of con-
fidential business information to interested
Case: 22-1226 Document: 77 Page: 16 Filed: 07/27/2023
16 ROYAL BRUSH MANUFACTURING, INC. v. US
respect, the government relies on the general language of
the Trade Secrets Act, 18 U.S.C. § 1905, and cases support-
ing the proposition that agencies generally must be able to
regulate the conduct of their own proceedings (e.g., PSC
VSMPO-Avisma Corp., 688 F.3d; Cook v. United States,
536 F.2d 365 (Ct. Cl. 1976)), none of which approves the
refusal to provide confidential business information to an
adverse party that the agency relied on in reaching its ad-
judicative decision. The Trade Secrets Act prohibits any
government employee from disclosing trade secret infor-
mation “to any extent not authorized by law.” 18 U.S.C.
§ 1905.
We have no doubt that a release of information is “au-
thorized by law” within the meaning of the Trade Secrets
Act if that release is required as a matter of constitutional
due process, as is the case here. The government does not
dispute that confidential business information may
properly be disclosed under the Trade Secrets Act where
there is a provision for an authorized protective order, 12
but urges that neither the EAPA nor the regulations gov-
erning such proceedings contain such a provision. The gov-
ernment contends that “there is simply no legal basis on
parties. As such, CBP is not authorized to disclose
business confidential information to interested
parties or their authorized representatives.
J.A. 36 (footnote omitted).
12 See Qwest Comms. Int’l Inc. v. F.C.C., 229 F.3d
1172, 1173–76 (D.C. Cir. 2000); United States v. W.R.
Grace, 455 F. Supp. 2d 1140, 1148 (D. Mont. 2006); Agility
Public Warehousing Co. K.S.C. v. Dep’t of Def., 110 F. Supp.
3d 215, 229 (D.D.C. 2015). The government concedes that
“the absence of statutory authorization may not necessarily
preclude agencies from promulgating a regulation to gov-
ern an [administrative protective order] procedure.” Gov’t
Br. 31.
Case: 22-1226 Document: 77 Page: 17 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 17
which Royal Brush can establish an entitlement through
CBP to the Philippines Shipper’s confidential business in-
formation” because “[n]either the EAPA statute nor CBP’s
regulations permits, let alone requires, CBP to release con-
fidential business information to Royal Brush.” Gov’t Br.
34–35.
As best we can make out, the government’s argument
is that due process does not require public disclosure of con-
fidential business information relied on in adjudication but
only requires disclosure to affected parties under protective
orders. Therefore, the government asserts, unless a pro-
tective order is authorized by law, disclosure is not author-
ized by law. In other words, the government can avoid
compliance with due process requirements by the simple
expedient of failing to provide for a protective order in a
statute or regulation. We are aware of no case supporting
any such extraordinary theory, and it is untenable on its
face. The right to due process does not depend on whether
statutes and regulations provide what is required by the
constitution.
The government’s concern with public disclosure of the
confidential information is, in any event, unwarranted be-
cause we conclude that CBP has the inherent authority to
utilize protective orders in appropriate circumstances. In
other words, because the Constitution authorizes, and in-
deed requires, the release of confidential business infor-
mation in this case, the Trade Secrets Act does not stand
in the way of such release. And because CBP has the in-
herent authority to issue protective orders, confidential
business information released to Royal Brush can be pro-
tected from public disclosure and there would be no risk
that in narrowly releasing the information to Royal Brush
CBP would compromise the trade secrets.
To be sure, release of confidential business information
is generally governed and protected by statutes or regula-
tions that provide for protective orders. For example, in
Case: 22-1226 Document: 77 Page: 18 Filed: 07/27/2023
18 ROYAL BRUSH MANUFACTURING, INC. v. US
proceedings determining whether antidumping and coun-
tervailing duties should be imposed, 19 U.S.C.
§ 1677f(c)(1)(A) requires the agency to, upon request,
“make all business proprietary information presented to, or
obtained by it, during a proceeding [with certain excep-
tions] available to interested parties who are parties to the
proceeding under a protective order.” But it is well estab-
lished that courts have the inherent authority to adopt pro-
cedures to manage their own affairs. See Dietz v. Bouldin,
579 U.S. 40, 45 (2016); Gumbel v. Pitkin, 124 U.S. 131(1888). So do administrative agencies. “Absent constitu-
tional constraints or extremely compelling circumstances
the administrative agencies should be free to fashion their
own rules of procedure and to pursue methods of inquiry
capable of permitting them to discharge their multitudi-
nous duties.” Vt. Yankee Nuclear Power Corp. v. Nat. Res.
Def. Council, Inc., 435 U.S. 519, 543 (1978) (internal quo-
tations and citations omitted). The leading administrative
law treatise recognizes that “[t]he administrative judge
generally has the authority to fashion protective orders.” 2
Admin. L. & Prac. § 5:40 (3d ed. 2023).
The EAPA statute and associated regulations do not
bar protective orders. While the statute concerning as-
sessing antidumping and countervailing duties includes a
specific provision authorizing protective orders, 19 U.S.C.
§ 1677f(c)(1)(A), and a similar provision was incorporated
in the original House bill that would later become the
EAPA but left out of the final legislation, 13 there is no
13 The earlier version of the bill stated: “For each in-
vestigation initiated . . . the Commissioner shall establish
procedures for the submission of business proprietary in-
formation under an administrative protective order.” H.R.
3057, 112th Cong. § 101(a) (2011). The protective order
provision was explicitly mentioned in a House Report ex-
plaining how Commerce, the agency then proposed to have
Case: 22-1226 Document: 77 Page: 19 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 19
indication that Congress objected to protective orders. Nor
does the history of the EAPA regulation suggest such that
protective orders are unauthorized or undesirable. 14 The
government offers no reason that the use of protective or-
ders would impair the function of the EAPA process. Given
the well-established practice of utilizing protective orders
in litigation15 and the absence of any statutory or
authority over evasion determinations, would implement
the EAPA. See H.R. REP. NO. 114-114, pt. 1, at 86 (2015)
(“Authorized representatives of interested parties can ob-
tain access to business proprietary information through an
administrative protective order.”). There is no indication
as to why this provision did not make it into the final ver-
sion of the statute.
14 The notice of rulemaking promulgated to imple-
ment the EAPA mentioned protective orders only to say
that
as there is no administrative protective order
(APO) process provided for in the EAPA, parties in-
volved in an EAPA proceeding are advised not to
submit information to CBP that they obtained ex-
clusively under a protective order from another
agency, court, or proceeding unless the scope of
that protective order explicitly covers the EAPA in-
vestigation or proceeding under consideration. Ac-
cordingly, parties are advised to exercise caution
when submitting information to CBP in an EAPA
proceeding.
81 Fed. Reg. 56,477, 56,479 (Aug. 22, 2016). This state-
ment was made in the subsection discussing submission of
material to CBP.
15 We note that the CIT rules themselves provide for
such orders. See U.S. Ct. Int’l Trade R. 26(c) (“The court
may, for good cause, issue an order to protect a party or
person . . . requiring that a trade secret or other
Case: 22-1226 Document: 77 Page: 20 Filed: 07/27/2023
20 ROYAL BRUSH MANUFACTURING, INC. v. US
regulatory prohibition of such orders, we have no doubt
that CBP has inherent authority to provide protective or-
ders in EAPA proceedings before the agency.
Finally, the government argues that “Royal Brush . . .
fails to show that lack of access to [confidential business]
information has caused it prejudice.” Gov’t Br. 41. How-
ever, when a due process violation has occurred because of
a denial of access to new and material information upon
which an agency relied, no additional showing of prejudice
is required. See Stone v. F.D.I.C., 179 F.3d 1368, 1377
(Fed. Cir. 1999) (“[W]hen a procedural due process viola-
tion has occurred because of ex parte communications, such
a violation is not subject to the harmless error test.”); see
also Ramirez, 975 F.3d at 1352–53. This is not a situation
in which the evidence “played a negligible role” in the
agency’s final decision. See Tennessee Secondary School
Athletic Ass’n v. Brentwood Academy, 551 U.S. 291, 303 n.4
(2007). In any event, on its face, the denial of access to the
redacted information here was prejudicial because it de-
nied access to information on which the agency relied in
reaching its decision.
There is no basis for CBP to violate Royal Brush’s due
process rights by failing to provide the information on
which it relied to Royal Brush.
IV. Rebuttal
We turn to the issue of Royal Brush’s right to rebuttal.
As Greene and other cases cited earlier make clear, the
right to rebut has constitutional dimensions. See, e.g.,
Greene, 360 U.S. at 496; Ralls Corp., 758 F.3d at 319; see
also Ward v. U.S. Postal Serv., 634 F.3d 1274, 1279 (Fed.
confidential research, development, or commercial infor-
mation not be revealed or be revealed only in a specified
way.”). The CIT thus has the general authority to issue
protective orders, including in EAPA cases. See supra.
Case: 22-1226 Document: 77 Page: 21 Filed: 07/27/2023
ROYAL BRUSH MANUFACTURING, INC. v. US 21
Cir. 2011) (requiring an “opportunity to respond” where a
“deciding official received new and material information by
means of ex parte communications”) (internal quotations
and citations omitted). But here the regulations them-
selves also provide that right. 19 C.F.R. § 165.23(c)(1)
states: “If CBP places new factual information on the ad-
ministrative record [in an evasion determination] on or af-
ter the 200th calendar day after the initiation of the
investigation . . . , the parties to the investigation will have
ten calendar days to provide rebuttal information to the
new factual information.” In accordance with our decision
today, Royal Brush will be provided access to the numerical
data used to calculate the production capacity and the rel-
evant photographs, and this information will be placed in
the administrative record subject to an appropriate protec-
tive order. We need not reach the constitutional question
of a right to rebuttal because we conclude that the regula-
tions themselves provide the right to rebut because CBP
relied on new factual information.
The government’s theory is that the rebuttal regulation
is inapplicable because the Verification Report relies on
only previously provided data. There is no question that
this numerical data is new factual information that, by reg-
ulation, Royal Brush is entitled to rebut. The Verification
Report did not simply rely on data provided previously.
CBP’s own description of the verification process in the Ad-
ministrative Determination on Appeal demonstrates that
new information was provided in the Verification Report:
“[t]he purpose for the CBP [verification visit] was to deter-
mine whether the Philippine supplier could show that it
was capable of producing the amount of pencils allegedly
manufactured for Royal Brush.” J.A. 95. This is further
demonstrated by CBP’s statements in the Final Determi-
nation as to Evasion: “Based on entry information and
CBP’s calculations of Philippines Shipper’s production ca-
pacity using data supplied by Philippines Shipper and in-
formation obtained at verification, CBP determined that
Case: 22-1226 Document: 77 Page: 22 Filed: 07/27/2023
22 ROYAL BRUSH MANUFACTURING, INC. v. US
total U.S. imports of pencils by all importers during 2018
that were identified with Philippines Shipper as manufac-
turer exceeded the company’s annual production capacity
by [redacted] percent.” J.A. 105 (emphasis added).
CONCLUSION
We remand this case to the CIT with instructions to
remand to CBP. 16 On remand, CBP must provide Royal
Brush with the aforementioned redacted information and
give it an opportunity for rebuttal.
VACATED AND REMANDED
COSTS
Costs to Appellant.
16Royal Brush also argues that CBP’s evasion deter-
mination was arbitrary and capricious and not supported
by substantial evidence. Because the case is being re-
manded for further consideration in light of this opinion,
we need not decide whether CBP’s actions were arbitrary
and capricious at this time.