WASHINGTON (Aug. 29, 2012)—Last March, spurred by a federal appeals court ruling in a case involving Chinese off-the-road tires, Congress passed a law allowing the Commerce Department to apply countervailing duties to products from non-market-economy countries.
Now, the plaintiffs in the off-the-road tire case are challenging the constitutionality of the new law before the U.S. Court of International Trade.
Section 1(b) of the legislation, which allows Commerce to impose countervailing duties retroactively, is unconstitutional on its face, according to the brief filed Aug. 17 by the former GPX International Tire Corp. and other plaintiffs.
Specifically, the section violates the Constitution's Ex Post Facto clause, which forbids retroactive criminalization of behaviors or activities, the brief said.
It also violates both the Fifth Amendment's guarantee of due process and equal protection under the law as guaranteed by the Due Process Clause, it said.
GPX and its co-plaintiffs want the trade court to strike down both Section 1(b) and the countervailing duty order against Chinese OTR tires, which Section 1(b) made retroactive to 2006.
Bryan Ganz, CEO of Maine Industrial Tire L.L.C. and former co-chairman of GPX, said a victory in court won't benefit him or GPX materially. However, the application of Section 1(b) goes far beyond OTR tires, and the issue has become one of basic constitutional rights, he said.
“Even if you win in court, all Congress has to do is pass a law so that you lose,” Ganz said. “What company in its right mind would take on any agency of government under those circumstances? This will have a chilling effect on American business.”