Slip Op. 11 - 30

UNITED STATES COURT OF INTERNATIONAL TRADE

 

 :

BORUSAN MANNESMANN BORU SANAYI :

ve TICARET A.a., :

:

Plaintiff, :

:

 v. : Before: R. Kenton Musgrave, Senior Judge

:

UNITED STATES, : Court No. 10-00312

:

Defendant, :

:

 and :

:

WHEATLAND TUBE COMPANY, and :

UNITED STATES STEEL CORP., :

:

 Defendant-Intervenors. :

 :

OPINION

[Granting plaintiff’s motion to stay and holding defendant’s motion to dismiss in abeyance.]

Dated: March 22, 2011

Lafave Associates (Arthur J. Lafave III) for the plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Franklin E.

White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of

Justice (Melissa M. Devine); Office of the Chief Counsel for Import Administrative, U.S.

Department of Commerce (Sapna Sharma), of counsel, for the defendant.

King & Spaulding, LLP (Gilbert B. Kaplan, Brian E. McGill, Daniel L.

Schneiderman, and Prentiss L. Smith), for the defendant-intervenor Wheatland Tube Company.

Skadden Arps Slate Meagher & Flom, LLP (Jeffrey D. Gerrish, Robert E. Lighthizer,

and Soo-Mi Rhee), for the defendant-intervenor United States Steel Corporation.
Court No. 10-00312 Page 2

Musgrave, SeniorJudge: PlaintiffBorusanMannesmann Boru Sanayi ve Ticaret A.a.

(“BMB”) initiated this action to contest three aspects of Certain Welded Carbon Steel Pipe and Tube

from Turkey: Notice of Final Antidumping Duty Administrative Review, 75 Fed. Reg. 64250 (Dep’t

Comm. Oct. 19, 2010) (“Final Results”), as compiled bythe Department of Commerce, International

Trade Administration (“Commerce”). BMB has now moved for stay to abide the final disposition

of two decisions of this Court currently before the Court of Appeals for the Federal Circuit

(“CAFC”) that BMB argues affect the first and third counts of its complaint, respectively: the

inclusion of “unpaid and uncollected” import duties from a Turkish duty drawback program in

BMB’s cost of production (“Count One”) and inconsistent statutory interpretation in the application

of “zeroing” in the determination of BMB’s weighted average dumping margin (“Count Three”). 1

Recent affirmance of Saha Thai Steel Pipe (Public)Co. v. United States, Slip Op. 10-

1 (Jan. 4, 2010) __ F.3d ___, 2011 WL 553585 (Fed. Cir. Feb. 14, 2011), by the CAFC undercuts

argument for stay with respect to Count One. Whether further appeal of that matter will be taken

is doubtful but remains to be seen. See Saha Thai Steel Pipe (Public) Co. v. United States, 35 CIT

___, Slip Op. 11-29 (Mar. 22, 2011); see also 28 U.S.C. § 2101(c).

Regarding Dongbu Steel Co. v. United States, 34 CIT ___, 677 F. Supp. 2d 1353

(Feb. 4, 2010), appeal docketed, No. 2010-1271 (Fed. Cir. Mar 29, 2010), BMB argues a decision

Familiarity is here presumed on Commerce’s zeroing practice generally and its 2006 1

announcement that zeroing would be discontinued in investigations. See, e.g., Corus Staal BV v.

United States, 502 F.3d 1370 (Fed. Cir. 2007); see also Antidumping Proceedings: Calculation of

the Weighted-Average Dumping Margin During an Antidumping Investigation; Final Modification,

71 Fed. Reg. 77722, 77724 (Dep’t Comm. Dec. 27, 2006) (“the Department’s denial of offsets in

certaininvestigations,when using the average-to-average comparison methodology, was inconsistent

with the Antidumping Agreement”).
Court No. 10-00312 Page 3

by the CAFC is expected that will address the same claim that BMB raises as Count Three of this

action, namely the allegedly inconsistent and unlawful agency interpretation of the statutory term

“weighted average dumping margin” after abandoning zeroing in investigations. See 19 U.S.C. §

1677(35)(A)-(B). BMB argues a stay will conserve resources on adjudication of Count Three until

the precise issue is settled in Dongbu.

The government opposes a stay and moves to dismiss Count Three for failure to state

a claim for which relief is available. See USCIT Rule 12(b)(5). The parties thus move for entry of

conflicting scheduling orders, and BMB has also submitted a further motion for leave to file a surreply to the motion to dismiss. The government’s response to that motion is one of partial

opposition, in that it takes no position with respect to the discussion of a particular case therein, SKF

USA Inc. v. United States, 630 F.3d 1365 (Fed. Cir. 2011), but argues that the portions of the surreply that do not discuss SKF should be struck because they are simply reiteration of points BMB

previously raised on other issues. The government also argues that since it is the movant on the

motion to dismiss, it ought to be permitted the final word and the opportunity to file a sur-rebuttal

in the event the sur-reply is permitted filing.

Unlike BMB’s motion, the government has not actually attempted filing of its

proposed sur-rebuttal. But its points are well-taken: the Rules of this Court “should be construed

to secure the just, speedy, and inexpensive determination of every action and proceeding.” USCIT

R. 1. Further, a “court cannot allow the pre-trial . . . process to become needlessly protracted by

endless sur-reply briefs.” Saha Thai Steel Pipe Co. v. United States, 11 CIT 257, 259 n.5, 661 F.

Supp. 1198, 1201 n.5 (1987). On the other hand, it is also “in the interest of the court to hear all the
Court No. 10-00312 Page 4

parties’ arguments expressed as thoroughly and clearly as possible” when dealing with complex

issues or issues of statutory interpretation of possibly precedential import. Borden, Inc. v. United

States, 22 CIT 233, 248 n.11, F. Supp. 2d. 1221, 1234 n.11 (1998). See, e.g., Diamond Sawblades

Mfrs. Coalition v. United States, 31 CIT 1249, 1252 (2007). On that note, BMB’s motion to file a

sur-reply will be granted, but those parts of it that do not concern discussion of SKF will be

disregarded.

Turning to the motion to stay, such a motion is an appeal to a court’s discretion,

which is “not to its inclination, but to its judgment; and its judgment is to be guided by sound legal

principles.” United States v. Burr, 25 F. Cas. 30, 35 (No. 14692D) (CC Va. 1807). The stay

applicant bears the burden of demonstrating the circumstances entitling it to a stay, e.g., Nken v.

Holder, __ U.S. ___, ___, 129 S.Ct. 1749, 1761 (2009), and consideration is typically on (1)

whether the applicant has made a strong showing that he is likely to succeed on the merits, (2)

whether the applicant will be irreparably injured absent a stay, (3) whether issuance of the stay will

substantially injure the other parties interested in the proceeding, and (4) where the public interest

lies. Id. And as a practical matter, the standard for both a stay and a preliminary injunction is the

same, in that both prevent

some action before the legality of that action has been conclusively determined. But

a stay achieves this result by temporarily suspending the source of authority to act --

the order or judgment in question -- not by directing an actor’s conduct. A stay

“simply suspend[s] judicial alteration of the status quo,” while injunctive relief

“grants judicial intervention that has been withheld by lower courts.”

Id. at 1758 (quoting Ohio Citizens for Responsible Energy, Inc. v. NRC, 479 U.S. 1312, 1313

(1986)). As on a motion for preliminary injunction, no single factor is dispositive on a motion for
Court No. 10-00312 Page 5

stay, and “the weakness of the showing regarding one factor may be overborne by the strength of the

others.” Diamond Sawblades Mfrs. Coalition v. United States, 33 CIT ___, Slip Op. 09-128 (Nov.

9, 2009) (quoting FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993)).

With respect to Count Three, the government argues BMB has not suggested it will

suffer economic or any other harm or any legal prejudice by proceeding with litigation, nor has it

argued or demonstrated that there is a “strong likelihood of success on the merits,” or addressed

whether a stay will benefit the public interest, or argued that the balance of hardships favor a stay,

apart from its argument regarding conservation of parties’ and the court’s resources. Further, the

government contends, BMB does not address the likelihood of departure by the CAFC from its line

of cases upholding zeroing in administrative reviews; in the most recent case the CAFC observed

that the continued practice of zeroing in administrative reviews was “not inconsistent with the

statute” discontinuation of the practice in investigations. SKF USA Inc. v. United States, 630 F.3d

1365, 1375 (Fed. Cir. 2011) (“[e]ven after Commerce changed its policy with respect to original

investigations, we have held that Commerce’s application of zeroing to administrative reviews is not

inconsistent with the statute”) (referencing Corus Staal BV v. United States, 502 F.3d 1370, 1375 2

(Fed. Cir. 2007)). Rather, the government argues, case law counsels dismissal of Count Three

entirely.

BMB’s sur-reply contends that the precise issue addressed in SKF, in the

administrative review covered thereby, was the argument that zeroing was improper because zeroing

But cf. Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin 2

and Assessment Rate in Certain Antidumping Duty Proceedings, 75 Fed. Reg. 81533 (Dec. 28, 2010)

(request for comments on proposed elimination of zeroing in most antidumping duty reviews due

to inconsistency with “international obligations”).
Court No. 10-00312 Page 6

is “prohibited” by the World TradeOrganization, whereas the claim in this matter “is that Commerce

has acted inconsistently with U.S. law by interpreting the same provision of the statute in arbitrary

and inconsistent ways under its gap-filling authority.” Pl.’s Sur-Reply to Def.’s Reply in Support

of its Motion to Dismiss in Part at 4 (italics added). BMB implies SKF’s reference to Corus Staal

should be discounted because Corus Staal considered an administrative review that had been

completed before Commerce announced the change in its zeroing policy with respect to

investigations (and thereforemight be said to involve conceptually“uniform” application of policy),

whereas Dongbu involves an administrative review completed afterCommerce announced its change

in policy and is expected to address the issue BMB raises in this matter by way of Count Three of

its complaint.

The court is persuaded the Federal Circuit has not precisely addressed the issue here. 

After considering the arguments for and against the motion for stay, the motion will be granted and

the government’s motion to dismiss will be held in abeyance pending the exhaustion of appeal in

both Dongbu and Saha Thai. Although recent decisions continue to sustain zeroing in various

contexts (see, e.g., SKF, supra; Calgon Carbon Corp. v. United States, Slip Op. 11-21 at 28 (Feb.

17, 2011); MCC Eurochem v. United States, Slip Op. 11-13 at 4 (Feb. 4, 2011)), the issue of

consistent statutory interpretation is of sufficient import to warrant a stay of this matter. Cf note 2,

supra. Neither the government nor the domestic industry have alleged they would be injured in any

way by maintenance of the status quo and the Final Results are otherwise uncontested. A separate

order implementing the foregoing will issue.

Dated: March 22, 2011 /s/ R. Kenton Musgrave 

New York, New York R. KENTON MUSGRAVE, Senior Judge