International Trade Law News

Published by Jacobson Burton Kelley PLLC

Candle Corporation of America's (CCA) prospects of obtaining Byrd Amendment funds were recently snuffed out by the Court of Appeals for the Federal Circuit (CAFC).  In Candle Corp. of America v. United States, Slip Op. 03-148, the CAFC held that a company that did not support the original antidumping petition was not entitled to Byrd Amendment payments, even though it had acquired a company that supported the original petition.

In its appeal, CCA requested the CAFC to overturn the U.S. Court of International Trade’s (CIT) earlier decision that CCA did not qualify as an "affected domestic producer" under the Continued Dumping and Subsidy Offset Act of 2000 (commonly known as the "Byrd Amendment") because CCA did not support the original petition.  Under the statute implementing the Byrd Amendment (19 U.S.C. § 1675c), only "affected domestic producers" are entitled to payments. Specifically, the statute provides that an "affected domestic producer" must have been a petitioner or interested party that supported an antidumping or countervailing duty petition that remains in operation.  The statute also indicates that companies who ceased production of the product covered by the antidumping order or who were acquired by a company or business that is related to a company that opposed the investigation will not qualify as an affected domestic producer. 

The origins of this case can be traced back to 1985, when the National Candle Association, an organization comprised of U.S. candle makers, filed an antidumping petition with the U.S. International Trade Commission (ITC) on wax candles from the People's Republic of China. CCA did not support the petition then because it imported candles from China at that time. In 1985, the Commerce Department issued an antidumping order on wax candles from China. Subsequently, Lenox Candles and Colonial Candles of Cape Cod, companies that supported the antidumping petition, were purchased by CCA.  After the Byrd Amendment was enacted, CCA applied to the Bureau of Customs and Border Protection (CBP) to receive Byrd Amendment distributions for 2001 and 2002. However, CBP determined that CCA was not eligible for such distributions since it did not support the petition that led to the imposition of the duties and therefore could not be considered to be an “affected domestic producer.” 

CCA disputed this finding, contending that the two companies it acquired supported the antidumping petition and therefore CCA was entitled to receive payments on their behalf as the successor company.  CCA appealed CBP’s decision that it was not eligible to receive Byrd Amendment distributions to the CIT.  The CIT held that CCA did not qualify as an "affected domestic producer" or as a “successor company” because it did not support the original petition and that the two companies purchased by CCA, Lenox and Cape Cod, were no longer in operation as required by the law.  By a vote of two to one, the CAFC subsequently affirmed the CIT's decision, albeit on different legal grounds (Circuit Judge Gajarsa dissented on grounds that the majority overreached in interpreting the statute).  The question considered by the CAFC was whether Lenox and Cape Cod had "been acquired by a company or business that is related to a company that opposed the investigation."  CCA argued that they were not a "related" company and that Lenox and Cape Cod were still in operation, although under different ownership.  Because the statutory language was unclear, the CAFC looked to Congress' intent. Circuit Judges Dyk and Michel concluded that the Byrd Amendment was intended to prevent opponents of antidumping investigations from profiting by acquiring parties that supported the antidumping petition and as a result CCA could not benefit from the payments.  The majority also indicated that the barrier against receiving payments exists “whether the claim is made by the acquiring company on behalf of the acquired entities or by the acquired entities themselves.”  While decisions issued by the CAFC can be appealed to the U.S. Supreme Court, the U.S. Supreme Court rarely chooses to review cases decided by the CAFC. A s a result, CCA is unlikely to receive any portion of the Byrd Amendment funds arising from the antidumping order on wax candles from China, which amounted to nearly $80 million in 2002 and 2003.

The opinion can be viewed on the CAFC’s Web site at http://www.fedcir.gov/dailylog.html.