1 Renamed, effective March 1, 2003, the U.S. B ureau of Customs and Border Protection per that Homeland

Se cur ity Act of 2002, Pub. L . 107-296 § 1502, 116 Stat. 2135, 2308-09 (Nov. 25, 2002) and the Reor gan ization Plan Modifica tion for the Depar

tment of H omeland Se curity, H.R. Doc. 108-32 at 4 (2003). Slip Op. 03 - 130 

## UNITED STATES COURT OF INTERNATIONAL TRADE

: OKAYA (

USA), I NC. : : Plaintiff, :

: v. : Before: M USGRAV

E, JUDGE : UNITED STATES : Court No. 02-00642 : Defend ant. : : [On the matte

r of liquid

ati on instruct ions from U .S. Depar tment of Co mmerce t

o former U.S. Cust oms Service allegedly divergent from final chang ed circumstances and partial revoca tion o f antidumping order r

esults, pla

intiff’s mo t ion for ju

dgment d enied, de fendant ’s motion to dismiss coun ts I and I I o f the comp laint

and cross- motio n for

judg ment on the

age ncy reco rd g ranted.] Decided: October 3, 2003 Willk ie Farr & Gallaghe r LLP , Washington D.C. ( Matthew R. Nicely , Carrie L. Owens ), for the plaintiff. Peter D. Keisler , Assistant Attorney Gene ral, David M. Cohen , Dir ector, Patricia M. McCarthy , Assistant

Director, Civi l Division, Commercial Litigation Branch, U nited States Department of Justice, (

Ada E. Bosque ); Office of Chief Counsel for Imp ort Admini stration, U.S. Department of Commerce ( Amanda Blaurock

), of cou nsel, for the defe ndant. OPINION Plaintiff Okaya (U SA) Inc. (“Okay a”) moves for judgment by default or on

the merits of a three-count

complaint alleging that liquidation instructions from the U.S. Department of Commerce (“Commerce”) to the U.S. Customs Service 1 (“Customs”) regarding par tial revocation of theCourt No. 02-00642 Page 2

2 Under pr

io r l aw, Commerce generally administered each required automatic revie w as including the one-ye ar period preceding and the one-yea r period succeeding the

date of review. See American Spring Wire Corp. v. United States , 7 CIT 2, 4-5, 578 F.Supp. 1405, 1407 (1984). Cf. 19 U.S.C. § 1675(a

)(1) (1 982). Cong

ressiona l amendme

nt was “ d esigned to limit the number of reviews i n c ases in which there is little or no interest, thus limiting the burden on petitioners and responde nts, as well a s the admin

istering authority .” H.R. Rep. No. 98-1156, 98th Cong., 2d Sess. at 181 (1984 ), repr

inted in 1984 U.S.C.C.A .N. 5220, 5298. Cf. Trade Agreements Act of 1979, Pub. L. No. 96-39 , § 101, 93 St at. 175 (1979) with Urugua y Ro und Agr eements Act, Pub. L. No. 98-573, § 611(a)(2)(A), 98 Stat. 2948, 3031 (1984). However, it re sulted in no change to the singular nature of each “period

of revie w,” and C ommerce

continue s to adminis ter multip le administrative reviews ina sing le proc eeding when efficient to do so. See , e.g. , Final Resu lts of Antidu mping Duty Administrative Review; Spun Acrylic Yarn From Italy , 55 Fed. Reg. 189 25 ( May 7, 1990); Television Receiv ers, Monochro me and Colo r, From Ja pan; Fina l Results o

f Antidumping Duty Administrative Review and Dete rmination N

ot To Revo ke in Part

, 54 Fed . Reg. 3 5517 ( Aug. 28, 1989) ; Drycleaning Machine ry From West Germany; Final Results of Administrative Review of Antidumping Finding , 50 Fed. Reg. 32154 (Aug. 8, 1985). Cf. Rubberflex Sdn. Bhd. v. United States , 23 CIT 461, 472, 59 (continued...) antidumping duty order on c ertain tin mill products from Japan were not in accor dance with the underlying

changed circumstances dete rmination. The government moves to dismiss counts I and II of the complaint and for judgment on the administrative record. F or the followi ng reasons, t he Court gr ants the g overnme

nt’s motion s and den

ies the pla

intiff’s

. Background The United States has a “retrospective” assessment sy stem for antidumping and countervailingduties: final liability is determined after me rchandise is imported. See 19 C.F.R. §§ 351.212(a), 351.213( a). Dur ing the a nniversa ry month of public ation of the antidum ping duty order

anaffected producer, exporter or importer may re quest an “administrative” review for assessment of dut ies on its subject merchandise entered during the relevant “period of review.” 19 U.S.C. § 1675(a)(1); 19 C.F.R. § 35 1.213 (b)(3). The period of review is ty pically the 12-month period beginning on the anniversary

of the date of publication of the order. 2 See 19 U.S.C. § 1675(a)(1);Court No. 02-00642 Page 3

2 (...continued) F.Supp.2d

1338, 1348 (1999) (observing that “each a dministrative review is a separate pr oceeding ”). Onthe other ha

nd, it is also re mains true

that Comme

rce inte rprets the period

of revie w flexibly

to include more or le ss than twelve months as circumstances require. See , e.g. , Stainless Steel Sheet and Strip in Coils From Italy: Final Results of Antidumping Duty Administrative Review , 67 Fed. Reg. 1715 (Jan. 14, 2002)(amende d, 68 Fed . Reg. 11 521 (Mar . 11, 2003) ); Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide from the Netherlands; Final Results of Antidum ping Administrative Review , 61 Fed . Reg. 51406 (Oc t. 2, 1996) ; Polyethylene Tere phthalate Film, She et, an d Strip from Japan; Final Results of Antidumping Duty Administrative Review , 60 Fed. R eg . 32133 (June 20, 1995). 19 C.F.R. § 351.213(e)(1)(i). The rate determined at such review becomes the cash deposit r ate for future entries. 19 U.S.C. § 1675(a)(2)(C). I f Commerce does not receiv e a timely

review r equest,

or if it rec eives a t

imely request for less than all of the entries during the review period, then without further notice it will issue automatic liquid ation instructions to Customs for assessment of

an tidumping duties on non-reviewed entries at rates equal to the c ash deposit of or bond fo r estimated antidumping or countervailing duties required at the ti me of entry or withdrawal from warehouse for consumption. 19 C.F.R. §§ 351.212(c)(1)&(2). Aninterested party

may also reque st a determination on whether revocation of the antidumping order in

whole or in part is warrant

ed via a “ chang ed circ

umstance s” revie

w. 19 C.F. R. § 351.216(b). See 19 U.S.C. § 1 675(d)( 1). The r equest ma

y be ma de at any

time , however a sho wing of “good cause” is required if the request is made prior to the second annive rs ar y o f publication of the order. Id . & § 351.216(c). If a changed circumstance s or administrative review is initiated , then liqu

idation of the aff ected e ntrie s is suspended until Commerce publishes final review results. See , e.g. , Wirth Ltd. v. United States , 22 CIT 285, 288, 5 F.Supp.2d 968, 972 (1998); American Permac, Inc. v. United States , 16 CIT 672, 800 F.Supp. 952 (1992). See also 19 U.S.C. § 1675(a) (1). Revie ws are conducted in accordance with the proc edures outlined at 19 C.F.R.§Court No. 02-00642 Page 4

3 S pecifically, “ steel coated with metallic chromium lay er between 100-200 mg/m2 and a chromiumoxide l ayer

between 5-30 mg/m2; chemical composition of 0.05% maximum carbon, 0.03% ma xim um silicon; 0.60% maximum manganese, 0.02% maximum sulfur; maximum flux density of 10kg

minimum and a coercive force of 3.8 ore minimum.” 67 Fe d. Reg. at 3686.

4 References to the public administrative record he rein abbreviated “PDoc.” 351.221 governing, inter alia , notice, comment, verification, and publication of rev iew res ul ts . If Commerce finds changed circumstances sufficient to justify revoc ation, the effective date of revocation

is within Commerce’s discretion. See 19 U.S.C. § 1675(d)(3). Suspension of liquidation pending review

is considered removed upon publication of the final results in the federa l register. See , e.g. , Fujitsu General America, Inc. v. United St ates , 1 10 F.Supp.2d 1061, 1077 (2000), aff’d 283 F.3d 1364, 1380 (Fed. Cir. 2002); International Trading Co. v. United States , 110 F.Supp.2d 977, 986 (2002), aff’d

281 F.3d 1286 (Fed. Cir. 2002). See also19 C.F.R. § 351.222(g)(4) (when Commerce revokes an

order e ither in w

hole or in part bas ed upon change d circum stances , it “will order the suspension of liquidation ended on the effective date of the notice of revocation”). OnDecemb er 3, 200 1, appro ximately fifteen months after Commerce imposed Certain Tin Mill Products From Japan: Notice of Antidumping Duty Order , 65 Fed. Reg. 52067 (Aug. 28, 2000), Ok aya request

ed re vocation in part with respect to a particular ty pe of steel 3 pursuant to changed circumstances in accordance with 19 U.S.C. § 1675(d)(1). See PDoc 1. 4 Since the request was made prior to the second anniversary of the order, in accordance with 19 C.F.R. § 351.216 Okaya a rgued that “good cause” existed for revoca tion. Okaya also re quested expedited review and r etroactive revocation. No other administrative review had been reque sted or initiated at the time. Commerce pub l ished notice of the request on January 25, 2002. See Certa in Tin Mill Products From Japan: Notice of Initiatio n of Change d Circumst

ances Re view of An tidumping DutyCourt No. 02-00642 Page 5

5 As part of its request, Okay a submitted evidence that all known U.S. tin producers were not or were uninterested in producing this product. See PDoc 1 at 5, Att. C (Dec. 3, 2001).

6 See PDoc 10 (“ Okay

a Case B r.”) at

4 (Okay a’s emph asis) & P D oc 13 (Memo f rom Analyst/I A Re: Meeting with Wilkie Farr dated Apr. 12, 2002). Order , 67 Fed. Reg. 3686 (Jan. 25, 2002). The notice acknowledg ed the request for “partia l revocation

. . . retroactively

for all unliquidated entries” and the fact that no dom es tic producer expressed opposition. Id . at 3686, 3688. On March 8, 20 02, Commerce issued Certain Tin M ill Products From Japan: Preliminary Results of Changed Circumstances Review , 67 Fed . Reg. 10667 (Mar. 8, 200 2) ann ounci ng i ts preli minary decision to “revo ke this or

der, in pa rt, with r espect t o future entries of certain tin-free steel . . . base d on t he fact that domestic interested parties have expressed no interest in the continuation of [thatpart of] th e ord

er[.] ” 5 Id . The pre liminary results did not sta

te an “effective date” for

revocation, only that the e ffective date of the order was March 8, 2002. Id . The established estimated antidumping duties cas h deposit r ate remained in effect pending the final results. See id

. Becau se the preliminary re sults reflected revocation only as to prospective entry , on March 22, 2002, Okaya r

equested a meeting with C ommerce . Durin g the meeting and in its case brief, Ok aya emphasized that 19 C.F.R. § 351,222(g)(4) cl early state s that if Commerce’s “Secretary revokes an order, in whole or in part, . . . the Secre tary . . . will instruct t he Customs Se

rvice to releas e anycash

depo sit or

bond[ .]” 6 Ok aya also argued that there were “myriad” e

xamples of the

a dmini strative practice of retroactive revoc ation which refunded “with interest any estimated antidumping duties collected for all unliquidated entries entered or withdra wn from warehouses onCourt No. 02-00642 Page 6

7 Okaya Case

Br. at 4 & n.8, referencing the

following final results of changed c ircumstances reviews : Vector Supercomputers From Japan , 66 Fed. Reg. 222 13 (May 3, 2001); Certain Ho tRolled Lead and Bismuth Carbon Steel Products from the United Kingdom , 65 Fed. Reg. 13713 (Mar. 14, 20 00); Certain Fresh Cut Flowers from Ecuador , 64 Fed. Reg. 56327, 56328 (Oct. 19, 1999); Stainless S

teel Holl ow Product

s from Sweden , 60 Fed. Reg. 425 29 (Aug . 16, 1995) ; Roller Chain, Other then Bicycle from Japan , 64 Fed . Reg. 66889 (Nov. 30, 1999 ); Fresh Kiwifruit from New Zealand , 64 Fed. Reg. 5048 6 (Sep. 17, 19 99); Replacement Parts for Self-Propelled Bituminous Paving Equipment from Canada , 60 Fed. Reg. 48691 (Sep. 20, 2000).

8 Id . at 5 & n.10 (Okay

a’s emphasis), referen cing Certain Corrosion-Resistant Carbon Steel Flat Products From Japan , 67 Fed. Reg. 7356, 7357 (Feb. 19, 2002), which Okay a characterized as “retro actively

refunding duties for all unliquidated entries without men tion of a specifi c time period” (Okaya ’s emphasis). or after the date of the original orde r. 7 In short, Okay

a argued that refund o f d eposits on “all unliq uidat ed entries” is “both required by the reg

ulations and is standard practice.” 8 On July 1, 2002, Commerce published its final ruling, the relevant portions of which rea d:

. . . On December 3, 2001, Okay a . . . requested that the Department revoke in part the antidumping duty order on certain tin mill products from Japan. Okay

a also re quested t

hat the pa rtial re vocatio n a pply retroac

tively for all unliqui dated en

tries. * * * No do mestic produ cers of tin mill products have expressed opposition to the partial revocation of the tin mill products order following the Initiation No tice an d the Prel iminary Results. F or these

reasons the Depa

rtment is partiall y revoking the order on tin mill products from Japan, effec tive Aug ust 1, 2001, with respect to all unliquidated entries for consumption of tin-f r ee steel which meets the specifications detailed above . . . . We will instruct [Customs] . . . to liqui date witho ut regard to antidumping duties, as applicable, and to refund any estimated

antidumping duties co llected f or all un liquidated

entries of certain tin mill products (i.e., certain tin-free steel ) meeting the specifications indicated above. Certain Tin Mill

Products F

rom Japan : Final Re

sults of Changed Circumstances Review , 67 Fed. Reg. 44177, 44177, 44179, PDoc 16 (July 1, 2002).Court No. 02-00642 Page 7

OnJuly 31, 2002, automatic liquida tion instructions issued to Customs from Commerce bearing boilerpla

te wor ding which explained that Commerce does not automatically conduct administrative reviews

of antidu

mping dut

y or ders, tha t s uch revi ews must be request ed in accordancewith 19 C.F.R. § 351.213, and that since Commerce had not received a re quest fo r an administrative review

of the antidumping duty or der for the period “04/12/2000 – 07/31/2001” on the merchandise listed on the instructions, Customs was instructed to assess antidumping duties on mercha ndise entere d or withdr

awn fro m wareho

use for consumption at

the cash deposit or bonding rate in effect on the date of entry . Msg. No. 2256202 (July 31, 2002). Thereafter, on September 16, 2002, beyond the statute of limitations for challenging the final results, Customs posted the following revocation instructions from Commerce, dated September 13, 2002, on its electronic bulletin board:

Customs is directed to term in ate the s uspension of liquida

tion for a

ll shipments

of certain tin-free steel entere d, or withdr awn fo r consumption fromwarehouse, for co nsu mption on or after 08/01/2001. All entries of certai n ti n-free steel that were suspended on or after 08/01/2001 should be liquidated without re gard to

antidumpin

g duties ( i.e. , release all bonds and refund all cash deposits). Instructions to Customs Re: Revocation of Dumping Order in Part on Tin-Free Steel from Japan , Msg. No. 2256202 (Sep. 13, 2002). O n October

8, 2002, O kay

a filed a summons an

d a three -count c omplaint a sse rtin g jurisdiction under

28 U.S.C. § 1581(i). Count I alleges that “ Commerce did not properly explain the basis for its revocation instructions to treat entries before August 1 , 2001 diff

erently from those that entered on or after that date” and

th at th er ef

or e C om me rc e’ s i ns tr uc ti on s “ we re ar bi tr ar y, capric ious,

anabuse of

discreti on, and we

re other wise not in

accord ance wi th law.” C omp l. ¶ 9. Co unt IICourt No. 02-00642 Page 8

9 CIT Ru les 12(a )(1)(A ) and 6(a ) allow th e gove

rnment 60

day s to respond to a

complaint unless the response would be due on a Saturda y, Su nday, or leg al holiday, in which eve nt the response is due on t he n ex t d ay wh ich is not suc h a d ay. C IT Rule 6(a) states tha t “the da y of the act, event, or default from which the designated per iod of time begins to run shall not be inc luded” in the computation of the period allowed for a responsive pleading. When servic e upon a party is by mail, CIT Rule 6(c) adds five da ys “to the presc

ribed or allowed period[.]” In t his matter, the summons and compl aint wer e serve d upon the

gover nment on October 8, 2002 by mailing i

n accordancewith CIT Rule 4(i). See Exhibits to Def.’s Opposition to Pl.’s Mot for Default Judgment ( sic – such a motion had not been filed at the time). The 60th day from that date was Saturda y , December

7, 2002. The government contended that in acc ordance w ith CIT Rule 6(a), the “prescribed

or allowed period” for a respo nsi ve pleading, assuming hand-delivery of service, was Mo nd ay, December 9, 2002. Including the five- day period f or mailing, the fifth day

from and excluding December 9, 2002, was December 14, 2002, another Saturday , and therefo re the government

argue d that a

re sp on si ve pl ea di ng wa s d ue Mo nd ay, December 16, 2002, the date it filed its motion to dismiss cou

nts I and I I of t

he compla

int. Howe

ver, the gover nment’s in

terpretation is incorre ct and isat odds with the fact of service in this matter. The Court’s Rules contemplate that the period allowed for mailing is to be added directly to the original “prescribed or allowed pe riod” and the total i s treate d as a sing le perio d for pur

poses of c omputation . Mail ing is not treat ed as a separate, additional period. Cf. Charles Alan Wright, Arthur R. Miller, Mary Kay

Kane, 4B Federal (continued...) alleges that

“Commerce’s decision to treat identical products differently

based solely upon the e

ntry date is neither supported by a ny evidence

on the record nor Commerce’s prior practice” and that the decisionwas therefore “ arbitrary , caprici ous, an abu se of discretion, and otherwise not in accordance with law.” Id . ¶ 10. Count II I alleges tha t “Commerce’s instructions to implement revoca ti on procedures are inc onsistent w ith the pla inlanguage of its final results in the chang ed circumstances review” an d t ha t t he y we re th er ef or e “ ar bi tr ar y, capricious, an abuse of discretion, and otherwise not in accordance with law.” Id . ¶ 11. OnDecember 16, 2002, the government filed a motion to dismiss counts I and II of the complaint for lack of subject matter juri sdicti on under 28 U.S.C. § 1581(i) and it submitted a proposed order for Okay

a to file an amended complaint within 30 day s, to which the government would then respond

after 30 more day s. Th e m ot io n w as fi le d u nt im el y. 9 However, subject matterCourt No. 02-00642 Page 9

9 (...continued) Practice & Proc edure § 1171 (3d ed. 1998) (“Service by Mail,” et cete

ra ) (interpreting

Feder al Rule of Civil Procedure (“F.R.C.P.”) 6(e)). I n other words, the government’s responsive pleadin g was due sixty-five day

s from October 8, 2002, the date of mailing of the summons and complaint, i.e. , by Thursday

, December 12, 2002.

10 See , e.g. , Renesas Technology America Inc. v. United

States , Sli p Op. 0 3-106 (CIT Aug. 18, 2003); Shinyei Corp. of America v. United States , Slip O p. 03-19 (CIT Feb. 14, 2003). Ge ne ra ll y, a pleading’s allegations of jurisdiction are taken as true unless denied or controverted by the movant. A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction serves one of two purp oses: either it cha llenge s the suff

iciency of the ple ading u

nder Rule 8, or it pr

esents a defense by way of abatement. On

such a motion, the moving party cha llenges either the sufficiency of the pleadings or the factual basis underly ing the pl ead in gs. Inthe first instance, all facts alleged inthe no n-mov ing par ty's plead ings are accepted as true. If th e 12(b)( 1) motion d enies or controve rts the pleader ’s alleg ations of jurisdict ion the mov ant is dee

med to be challenging

the factual basis for the court’s subject matter jurisdiction, in which instance only uncontrove rted facts are accepte d as true, and the r

emaining facts a re subje ct to fact-finding by t he Court. By

contras t, a motion t

o dismiss for failure to state a claim for relief unde r Rule 12(b)(6) goes to the sufficiency of the pleading under Rul e 8(a)(2), and the on ly information necess ary

for a de cision on t

he motion is

to be found in the pleading itself; if outside evidence is considered, the motion is converted into one for summary judgme

nt. See generally 5A Wrigh t et alia , Fe deral Pract ice &Procedure § 1363. See , e.g. , Cedars-Sinai Medical Ctr. v. Watkins , 11 F.3d 1573, 1583-84 (Fed. Cir. 1993) ; Gould, Inc. v. United States , 935 F.2d 1271, 1274 (Fed. Cir. 1991); Kemet Electronics Corp. v. Barshefsky , 21 CIT 912, 929, 976 F.Supp. 1012, 1027 (1997). jurisdiction may be cha

llenged at any

time, since a court has a duty to determine whether it ha s jurisdiction over matters presented for disposition. 10 “Section1581(i) jurisdiction may not be invoked when jurisdiction under another subsection of § 1581 is

or could have been available, unless the remedy pr

ovided under that other subsection would be manifestly inade quate.” Miller & Co. v. United States , 824 F.2d 961, 963 (Fed. Cir. 1987). See also JCM, Ltd. v. United States , 210 F.3d 1 357, 1359 ( Fed. Cir . 2000); Norcal/Cro setti Food s, Inc. v. United States , 963 F.2d 356, 359 (Fed. Cir. 1992). The government ar gued that counts I a

nd II in reality soug

ht to contest the “rejection” of Okay a’s request for retroactive applica tion of partial revocation

an d t ha t s uc h a cl ai m i s t im e- ba rr ed be ca us e O ka ya f ai le d t o i ni ti at e s ui t w it hi n 3 0 d aysCourt No. 02-00642 Page 10

11 Heveaf

il instructs that the Court’s residual jurisdiction is appropriate when reviewing Commerce’s instructi ons to Custom s becaus e “Commer ce, not Cu stoms, is the ag ency responsi ble for issuing instructions and determining theamo unt of a nt id um pi ng d ut y to b e as ses sed .” 2 3 C IT at 449. See also id. at 450 (the Court “reviews Commerce’s liquidation instructions . . . and will find them unlawful if they a re ‘arbitra

ry, capric ious, an a

buse of di scretion , or other wise not in accordancewith law’”) (quot ing A dministrative Procedure Act (“APA”) in part, 5 U.S.C. § 706(2)(A)). Consolidated Bearings instructs that liquidation instructions are not reviewable under 28 U.S.C. § 1581(c), since they are not part of the final results, and will be considered arbitrary and capricious if they dive

rg e from the final results and Commerce fails to explain their basis. Under suchcircumstances, subsection (i) provides theappropriate basis for review. 166 F.Supp.2d at 583. of publication. See 19 U.S.C. § 1516a(a)(2); 28 U.S.C. § 1581(c). The government contended that if Okaya be lieved the final results to be ambiguous, then it should ha

ve chall enged

that ambig

uity pursuant to 28 U.S.C. § 1581(c). Ok aya bore the burden of proving its jurisdictional allegations. Gibbs v. Buck , 307 U.S. 66 (1939). See , e.g. , MBL (USA) Corp. v. United States , 14 CIT 161, 164, 733 F.Supp. 379, 382 (1990); Smith Corona Gro up, SCM Corp. v. United States , 8 CIT 100, 102, 593 F.Supp. 414, 417 (1984). Ok aya contended that its complaint contested only the alleged divergenc e in the liquidation instructions from the final results that resulted from Commerce ’s decis ion, withou t explanati on, to treat en tr ie s d if

fe re nt ly d ep en di ng up on th ei r e nt ry d ate; the refore , Okay a argu ed, sect ion 1581(i ) jurisdiction is appropriate tocontest such divergence on the authority of Consolidated

Bearings C

o

v. United States , 25 CIT ___, 166 F.Supp.2d 580 (2001) and Heveafil Sdn. Bhd. v. United States , 23 CIT 447 (1999). 11 Pl.’s Opp. to Mot. to Dismiss at 5-9. Okaya further e xplained that at the time the final results w ere issued, it unde rstood Commerce to

grant revocation as to “all” entries that were unliquidated as of the effective date of revoc ation, as it had requested, and that it was not until the liquidation instructions were posted on Customs’ web site, bey ond the statute of limitations for

c hallen gingthe final changed circumstance s determination, see 28 U. S. C. § 1 58 1( c) , t ha t O ka yaCourt No. 02-00642 Page 11

realized Commerce had issued

an interpretation that differed from what Okay

a considered to be the “proper” interpretation of the final results. The parties’ argume

nts implicate d the factual basis of Okaya ’s jurisdictional allegations, i.e. , the proper interpretation of the final results. Since Okaya’s jurisdictional allegations depend upon the correctness of its interpretation of the final results, and since the gov ernment ’s motion to dismiss depends upon the reasonableness of Okay a’s interpretation, the Court determined tha t the jurisdictional allega

tions are intertwin

ed with t he merits and that it was appropriate to reserve decisionuntil final disposition. See Renesas Technology , supra ; Nissei Sangyo America v. United States , Slip Op. 03- 105 (CI T Aug. 1 8, 2003); Takashima U.S.A., Inc. v. United States , 19 CIT 673, 886 F.Supp. 858 (1995); PPG Industries Inc. v. United States , 84 Cust. Ct. 256 (1980). Cf. Martin ByMartin v. Secretary of Health and Human Se rvices , 62 F.3d 1403, 1406 (Fed. Cir. 1995) (“the distinction between facts necessary to establish jurisdiction and those necessary to prove a

claim is often a close one, carry

ing significant legal conseque nces”). Onthe other hand, the government’sunt imel y motion presen ted a j urisd icti onal c halle nge

o nly to a part of the complaint. The government ag reed, on the authority

of Heveaf

il , tha t th e allegations of c oun t II I appear ed suffi cient to c onfer su bsection (i) juris diction, s ince the claim alleges that the li quidation instructi ons were

inconsiste

nt with the fina l results. See Def.’s M ot. to Dismiss In Part at 7. Although subject matter jurisdiction may

neither be waived nor agreed a

mong the parties, the Court concurred that count I II sounded in 1581(i) jurisdiction. Since the government had not provid

ed timely substantive responses to any pa rt of the complaint nor timely moved for an extension of time to answer the complaint, Okay a moved for entry

of default and

for leave to file aCourt No. 02-00642 Page 12

motion for default judgment. The gover nment opposed Okaya ’s motion for entry of default on the ground that the mo tion to dismiss had not been untimely. The Court concluded tha tthe motion t

o dismiss in part did

not alter the time within which to answe r the re mainder of the co mp lain t not addressed by

such motion. See Gerlach v. Michigan Bell Tel. Co. , 448 F.Supp. 1168, 1174 (D.C. Mich. 1978) (“separate counts are, by definition, independent bases for a lawsuit and the parties are responsi ble to procee d with litig ation on those counts which are not challenged by a motion under F.R.C.P. 12(b)”). Cf

. CIT Rule 7(a) (“T

here sha ll b e a compl aint and . . . an ans wer”); CIT Ru le 12(a) (“the Un

ited State s . . . shall

serve an answer to the complaint . . . within 60 day s of service”); CIT Rule 12(b ) (“Eve

ry defense , in law or

fact, to a clai m for relief in any

pleading, . . . shall be asserted in the responsive pleading thereto ”). But see Wright et alia , 5A Federal Practice & Procedu re § 1346 (“[T]his approach also has the disadva ntages of requiring duplicative sets of plead ings in the event that the motion is denied, and of causing confusion over the proper scope of discovery during the motion's pendency . A more considered solution might be to hold that

a partial Rule 12(b) motion expands the time for answering the entire pleading, r elying on the

prospe ct o f Rule 11 sancti ons to dete

r the abu sive use

of such a motion). See also Brocksopp Engineering, Inc.

v. Bach-Simpson, Ltd. , 136 F.R.D. 485 (E. D. Wis c. 1991) (partial motion to dismiss extends defend ant's time to answer all claims). After considering such a uthority as could be

discerned in

this area, the Court

conclude d that disc overy was not a

n issue in th

is matter and that any

“duplicative” plead ings rather would be the resul t of th e defen dant’ s piec emeal appro ach to plead ing, the first of whichwas untime ly. Theref ore, ac cepting

the rea sons adva

nced by Okay a, the Cou

rt gra nted its motion for entry of

default on February

3, 2003. Cf. LaPerla Fashions, Inc. v. United States , 22 CITCourt No. 02-00642 Page 13

385 (1998) (

noting e ntry of defa ult); Syva v. United States , 12 CIT 199, 681 F

. Supp. 885 (1988) (noting entry

of default). OnFebrua ry 24, 200 3, th e go vernm ent moved for rec onsidera

tion pursu

ant to CI T Rule 55(c), whic h allows setting aside an entry of defa ult for “good caus e shown.” The Rule p arallel s F.R.C.P. 55(c), which is generally interpreted to req

uire of a defendant seeking to have entry of default set aside to show: (1) good cause for their de fau lt; (2) quickaction to correct it; and (3) a meritorious defense to the plaintiff's complaint. See , e.g. , Union Pacific R ailroad Co. v. Progre ss Rail Services Corp. , 256 F.3d

781, 782- 83 (8th

Cir. 2001) (refere ncing Pioneer Investment Services Co. v. Brunswi

ck Assoc iates LP , 507 U.S. 380, 3 94-95 (1993) and considering (1) the leng th and

reason for the delay

in filing and whether the defendant ac ted in good faith, (2) the prejud ice th e plaintiff incurred by the delay

, and (3) whether the defendant has a meritorious defense) ; Action S.A.

v. Marc Rich &

Co., Inc. , 951 F.2d 504, 507 (2d Cir.1991) (considering (1) whether the de fault was willf ul, (2) whether setting aside the defa ult would prejudice the adversary , and (3) whether a meritorious defense is presented), cert. denied, 503 U.S. 1006 (1992). Feder al court s have g eneral ly looked for guidance on “good c ause” in F.R.C.P. Rule 60(b), which includes “mistake , inadvert ence, surprise, or excusable neglect.” See Medunic v Lederer , 64 F.R.D. 403 (D.C. Pa 1974). The government

essentia lly r eiterat ed arg ument pre sented in

its response to Okaya ’s motion for entry of defa ult that its m

otion to dismiss had not been untimely. On March 5, 2003, Oka ya filed opposition, which co n tended that the government’s “mistake” wa s not excusable. Okaya f urther noted, among o ther thing s: “[e]ven n ow, almost

three months after the deadline[for answering], and after this Court has issued an entry of de fault, defendant still refuses to answer the complaint.” Pl.’sCourt No. 02-00642 Page 14

Resp. in Opp. toMot. for Recon. at 2. That was true as to count III , however the Court had not y et ruled on the motion to dismiss. Nonetheless, the Court agreed that the governmen t’s “ liberal” interpretation

of the Court’s Rules for responsive pleading had no t b een reasonable and therefor e den ied reconsideration on March 27, 2003. The order the refor acceded to Okay

a’s demand t o include langua

ge req uiring t he defe ndant “to answer all count s of the Comp laint for thwith” in order to rece ive one, c omplete, responsi ve plead ing fro m the gov ernment

. The gover

nment file d its answe

r April 2, 2003, denying

every fact alleged in the complaint and setting out the affirma

tive def ense of l ack of ju

risdiction over co

unts I and I I and failure

to exhaust administrative remedies. Okay a then moved for entry

of default judgment or judgment upon the administrative record under CI T Rules 55(b), 55(e), and 56.1. The governme nt respond edby renewing its motion to dismiss counts I and II and by reque sting judgment upon the agency

record. Discussion I Entry of default judgment may

be appropriate against a par ty who has failed to plea d o r otherwis e defend a

gainst a claim br ou gh t b y an ot he r p ar ty. See Black’s Law Dictionary 417 (6th ed. 1990). On a motion

for def ault judg ment, a court should take into account “considerations of social goals, justic e and e xpediency . . . within the domain of the trial judg e’s discretion[,]” Gomes v. Williams , 420 F.2d 1364, 1366 (10th Cir. 1970), which may include the amount of money involved, whether material issues of fact or issues of substantialpublic importance are at issue, whether the default is larg ely

technic al, whethe r the plaintiff has been substantially prejudiced by the

delay involved, whether

the gro unds for d efault a re clea rly established or ar

e in doubt, the

harshne ss of theCourt No. 02-00642 Page 15

effect of default judgment, whether default wa s caused by a good-faith mistake or by excusable or inexcusab le neglect on the part of the defenda nt, and whether the plaintiff itself engag ed in dilatory behavior. See gen erally

Wright et alia , 10A Federal P ractice and Proce

dure § 2685. However, the “preferred” resolution of liti ga tion is consideration on the merits. See e.g. , Bradyv. United States , 211 F.3d 499 ( 9th Cir. 200 0); Coon v. Grenier , 867 F.2d 73 (1st Cir. 1989); Mason v. Lister , 562 F.2d 343, 345 (5th Cir. 1977) Schwab v. Bullock’s Inc. , 508 F.2d 353 (9th Cir. 1974); Pulliam v. Pulliam , 478 F.2d 935 ( D.C. Cir. 1 973); Tolson v. Hodge , 411 F.2d 123 (4th Cir. 1969); Hutton v. Fisher , 359 F.2d 913 (3rd Cir. 1966). Furthermore, CIT Rule 55(e) provides that “[n]o judgment by de fault shall be entered against the United States or an officer or a gency thereof unless the claimant establishes a claim or right to relief by

evidence satisfactory

to the court.” As with other Rules, CIT Rule 55(e) para llels F.R.C.P. 55(e), which rests on the rationale that the taxpaye rs at large should not b e subjec ted to the cost of a judgment entered as a penalty against a government offic ial which comes as a wind

fall to the individua

l litigan t. The priv ate par

ty mu st first demonstr ate that there is some basis on which he is entitled on the merits of his claim to receive judgment. A court should acc ord respe ct to this policy beyond the conf ines of Rul e 55(e) ’s strict

covera ge whe n it can do so without running against a countervailing consideration. Campbell v. Eastland , 307 F.2d 478 (5th Cir 1962), cert. denied 371 U.S. 955 (1963). See gen erally Wright et alia , 10A Federal P ractice and Proce

dure § 2702. A part from Oka

ya ’s righ t to relie f, addre ssed below, on its mot ion for e ntr y of defa ul t judgment Okaya c ontends that it has been prejudiced by the g overnment’s delay of disposition of

this matter by an additional four months and f ive separate briefings requiring time and eff

ort to add ress and that the government’s actions continue to deprive it of monies rightfully owed to it Pl.’s ReplyCourt No. 02-00642 Page 16

inSupport of Its Mot. for Judgm. or Judgm. Upon the Agenc y Record a

t 10. The Court ag

rees wit h the proposition that unjust del ays in li tiga tion would be prejudicial to a plaintiff. Cf

. Robinson v. United States , 734 F.2d 735, 739 (11th Cir. 1984) (“being deprived of this substantial sum of money for [suc h a sign ifica nt per iod o f tim e] is undou btedl y a signifi cant b urden ”) (cit ing United States v. $23,407.69 in United States Currency , 715 F.2d 162, 166 (5th Cir. 1983). Moreover, “[t]he fact that

a court has allowed a party in default to proceed in the suit and answer the complaint does not automatic ally put the defaulting party in the position of one who is making a timely r esponse to a complaint.” Bavouset v. Shaw’s of San Francisco , 43 F.R.D. 296, 299 (S.D. Tex. 1967). However, the Court is not

persuad ed that th e gove

rnment’s motion to dis m iss co unts I and I I, fi led on its assumption that it was timely, was a mere delaying tactic. Moreover, at the time of Okay a’s motion for entry of de fault, the Court also acceded to Okay a’s request to seek leave to move for entry of default judgment since, at the time, the government had not fi led an answer to the complaint. At

common law, joinder of issue occurs when “the parties to a c aus e arriv e at that stag e of it in their pleading s, that one a sserts a f act to be so, and the other denies it.” Black's Law Dictionary 836. In this instance, joinder of issue occurred after entry of de fault as a result of the plaintiff’s request for j oinder. Moving for entry of default judgment at this stage, although pe rmitted by

the Order o f March 27, 2003, appears to be a procedural contra dicti on. On bal ance, the Court exe rcises it s discreti on to addr

ess this ma

tter on its own merit s.

II No rm al ly, the Court i s asked to consider whether there is a mbiguity inthe authorizing sta

tute upon which a clear agenc y determination re sts. In this instance, the Court is asked to consider theCourt No. 02-00642 Page 17

12 See , e.g. , Pl.’s Rep ly in

Support of

Its Mo t. for Judg

m. or Judgm

. Upon the Agency Record at 18 (table and footnotes). See alsofootnote 7, supra , and cases cited. reverse. The antidumping statute provides that “[a] determination under this section to revoke an order or finding or terminate a suspended i nvest iga tion shall apply with respect to unliquidated entries of the sub

ject mer chandise whic h are ente red , or withdrawn from warehouse, for consumption on or after t he date d etermined by the a dministering authority.” 19 U .S.C. § 1675(d)(3) (highlighting

added). The meaning of this provision is plain: merchandise which entered prior to the effective date of revoc ation decided by Commerc e, a matter within its discretion, does notreceiv e the benefit of r evocati on. I

n this matte

r, howev er, it is th e me aning of the operative langua ge of the final results that is implicated, if not contested, the allegation being liquidation instructions not in conformity therewith. Alth ough the parties apparently disagree over the extent of suspended liquidations included within the ambit of Co mmerce’ s revoca tion policy

, at leas t one aspe ct of the briefing is abundan

tly clear: except for

the instant matter, the effect of the date chosen by C ommerce

as the ef fective date of revoca tion is prospective in application. 12 This comes as no surprise, in light of the plain meaning of section 1675(d)(3). The final results underly ing the instant matter are therefore defective to the extent that they make re

vocation “effective August 1, 2001, with respect to all unliquidated entries.” They do not use the words “e ntered on or after,” which would have c learly sig naled the usual prospective effect of revoca tion from the effective date. Inthe absence of

such language, and since

the final results further

stated, e.g. , that Commerce will instruct C

ustoms t o “refund any

estimated antidumping duties collected for all unliquidated entries of cert

ain tin mill products( i.e. , cer tain t in-f ree s teel ) mee

ting the sp ecif icat ions i ndic ated [,]”Court No. 02-00642 Page 18

67 Fed. Reg . at 44,17 9 (highl ighting added), Okay

a argu es it was r easonab le to conclude that refunds would be issued, as long as the entries were unliquidated as of August 1, 2001. Okay a does not (and cannot)argue that the final results were ambiguous: it argues that their me aning was plain , or at le ast

as it interpreted them. That is, Okay a argues it was reasonable to inter pret the fina l results t o mean that Commerce

had gr anted its r etroac tive rev ocation r

equest in full and that it applied revocation “to any entries tha

t remained unliquidated as of that date [.]” Pl. ’ s Opp. to Mo t. to Dismiss at 3 (highlighting added). However, the Court must conclude that the absence of “entered on or after” inthe final results does not result in the “unambiguous” interpretation Okay a advocates. In lig

ht of

s ection1675(d)( 3), Okay a’s inter pretation is inher

ently contrad ictory since it r enders “ effec tiv e August 1, 2001” sup erfluou s as well as the significance of any antidumping duties that attached at entry prior to such effective revocation date. F urther, it does not

logically f

ollow from the fact that the final results omitted “entered on or after” that Commerce granted Okay

a’s request for

retroactive revocation

as to all dumping d

uty deposits r

egard less of the date of e ntry . For the

argume nt to have merit, Okaya would have to demo nstrate in accordance with section 1675(d)(3) not only that “effective August 1, 2001” was not intended as the date

of revoc ation but it

must also de

monstrate whichdate was intended

for rev ocation, which ca

n only have pro spective

effec t in accordance

with section1675(d)(3). Ok aya has not done so. Furthermore, Okay a agrees that Commerce announc ed

aneffec tive date

of revoc ation in the

final re sults, i.e. August 1, 2001. Consequently, the arg ument that the final results literally (a nd t herefore unamb iguously ) made r evocati on effe ctive as

to “all unliquidated

entries” regar dless of entry, due to the a

bsence of “entered on or afte r,” is argument for enforcement

of a dete rmination that is not in acc ordance

with 19 U.S. C. § 1675(d

)(3) an d is thereforeCourt No. 02-00642 Page 19

unlawfu l, becau se that pr

ovision is c lear as

to its “prospective” application. Such a determination would the refore be unenf orceab le, as wo

uld litera l liquidati on instructions eman ating f rom it. Ac co rd in gl y, to give e ffect to th e final results, the Court must construe the d efects i n operative langua ge in accordancewith law to the extent possible. The Court finds that although the final results omit the words “entered on or after,” Commerce nonetheless announced August 1, 2001

as the effective date of revoca tion, and that revocation was to haveprospective effect from such date, inaccord ance with section 1675(d)(3). Also in accordance with that provision, “all unliquidated entries” as used in the final results must be construed as all unliquidated entries that obtain the benefit of revocation, i.e. , those that entered on or aft er such effective date of re vocation. The liquidation instructions, based thereon, describe subject merchandise “entered, or withdrawn from

a warehouse, for consumption on or after 08/01/2001.” Okaya is cor

rect in alleging that they

appear faciall y inconsistent with the final results as issued; however, based upon the foregoing , the Court must find the liquidation instructions in accordance with the effective date of revocation determined inthe final results and in accordance with law, since they are in accordancewith section 1675(d)(3). They are the refore not lega lly i nconsiste nt with the

final re sults. Conclusion Based up on the foreg oing, the Court must c onclude t

hat Okay a’s prop er reme dy l ay

in challenging

the fina l results w

ithin 30 da

ys o f issuanc e pursua

nt to 28 U.S. C. § 1581(c). The Court concludes that it lacks jurisdiction over counts I and I I and therefore grants the

defendant’s motion to dismiss these counts. Since the liquidation instructi ons are n ot inconsi stent with

the fina l results and are in accordance w

ith law, judgment will enter for the defendant

.Court No. 02-00642 Page 20

________________________________________ R. KENTON MUSGRAVE, JUDGE Dated: October 3, 2003 New York, New York