The U.S. Court of International Trade has concluded that it lacks subject matter jurisdiction over a lawsuit brought by Canadian lumber company J.D. Irving Limited with respect to a tariff increase. While the court may have been able to preside over the case, a requested panel review per the United States-Mexico-Canada Agreement shifted its jurisdiction.

According to the case background included in the court’s opinion, the U.S. Department of Commerce (Commerce) initiated an administrative review of its softwood lumber order published in 2018. The results of that review led the department to assign J.D. Irving an assessment rate of 1.57%. A second administrative review then began in March 2020, resulting in J.D.’s assessment rate rising to 11.59%.

J.D. Irving brought the suit against Commerce in December 2021, arguing that the department “acted arbitrarily and in a manner inconsistent with Congress’ intent” by replacing the 1.57% cash deposit rate with the 11.59% rate assigned to J.D. Irving following a second review. According to J.D. Irving officials, the action “injects uncertainty into the review-request process” and “contravenes Commerce’s regulations.”

Two days prior to that filing, interested parties requested a panel review of the results of the second administrative review per the United States-Mexico-Canada Agreement. According to court documents, that request left the panel with “exclusive review” of the second administrative review.

“The binational panel has the authority to reach a decision as to the lawfulness of Commerce’s determination with respect to the cash deposit rate assigned to J.D. Irving,” court officials wrote with respect to the company’s request for declaratory relief.

“Upon a favorable panel decision with respect to such a challenge to the lawfulness of Commerce’s determination, the panel would have the authority to remand the determination to Commerce, which would then be required to ‘take action not inconsistent with’ the panel’s decision,” officials added.

The judge then granted Commerce’s motion to dismiss, as the U.S. Court of International Trade “lacks subject matter jurisdiction.”