### Slip Op. 04- 44

UNITED ST ATES COURT OF INTE RNATIONAL T RADE

__________________________________ : ALL EGHENY BRADFORD : CORPORATION, d/b/a TOP LI NE : PROCESS EQUIPMENT COMPANY, : : Plaintiff, :

: Court No. 02-00073 v. : : THE UNITED STATES, : : Defend ant. :

_ _________

_________

_________

______: [Defendant enjoined from reliquidating entries to corre ct liquidation in violation of court injunction.] Dated: April 29, 2004

Wo mb le C arl yle S and rid ge & R ice PLLC , ( James K. Kearney ) for plaintiff. Peter D. Keisler , Assistant Attorney Gene ral, David M. Cohen , Director, Jeanne E. Davidson , Deputy Direc

tor, Commercial Litigation Bra nch, Civil Division, United States Department of Justice ( David S. Silverbrand , Ja mes H. H ol l, III , and Paul D. Kovac ) , Phil ip J. Curtin , Attorney, Off

ice of the Chief Counsel for Import Administration, United States Department of Commerce, Christopher Chen , Senior A ttorney , Office of the Chie f Counsel, United States Bureau of Customs and Border Protection, of c ounsel, for defendant. OPINION

& ORDER RESTANI, Chief Judge: INTRODUC TION Plaintiff Allegheny

Bradford Corporation, d/b/a Top L ine Process Equipment Company (“Top Line”) a sks the court to find Defendant United States (“Government”) in contempt forCourt No. 02-00073 Page 2

1 Liquidation is defined as the “final computation or a scertainment of the duties or drawback accruing on a

n entry.” 19 C.F .R. § 159.1. Reliquidation is “the re-calculation of the duties or drawback accruing on an entry.” Shinyei Corp. of America v. United States , 355 F.3d 1297, 1310 n.8 (Fed. Cir. 2004). failing to obey

a court-ordered injunction of the liquidation 1 of its stainless steel butt-weld tube fittings. Because the Government’s pr oposed reliquidation of the entries is unsuitable for restoring the status quo ante , the court finds it necessary to take action in connection with the enforcement of the injunction. BACKGROUND The court’s injunction was entered in connection with Top L ine’s suit, which claims that the Commerce Department improperly ruled that the company ’s tube fittings are within the scope of an antidumping order issued in 1993. See Final De terminat ion of Sale s at L ess Than Fair Value and Antidumping Duty Order: Stainless Steel Butt-Weld Pipe Fittings from Taiwan , 58 Fed. Reg. 33,250 (Dep’t Comm. 1993) (final admin. rev.) [hereinafter “ Final Antidumping Order ”]. The scope proceedings beg an on April 12, 2001, with Top Line’s request for a scope ruling f rom Commer

ce reg arding

its tube fi

ttings imp orted fr

om Taiwa n. The sc ope requ

est culminated in a final ruling by Commerce that Top Line’s tube fittings a re within the scope of the Antidumping Order and thus subject to antidumping duties upon entry

. See Final Scope RulingCourt No. 02-00073 Page 3

on the Antidumping Duty Orde r on Stainless Steel Butt-Weld Pipe Fittings from Taiwan: Allegheny

Bradford Corporation d/b/a Top L ine Process Equipment , 66 Fed. Reg. 658 99 (Dept

. Commerce Dec. 21, 2001) (“ Final Affirmative Scope Ruling ”). In response to the unfavor able scope ruling, Top L ine filed suit under 28 U.S.C. § 1581(c) and thereafter filed a Motion For Judgment Upon the Ag ency Rec ord on June 17, 2002, alleging that the Final Affirmative Scope Ruling was “unsupported by

substantial evidence on the record and otherwise not in accordance with law.” Petitioner’ s Scope Br. at 1. This motion is pending before the cour t. Top Line moved for an injunction of liquidation in order to pre serve the status quo. Injunctive relief is made a vailable under such circumstances by 19 U.S.C. § 1516a(c)(2), which permits the Court to enjoin the liquidation of merchandise subject to an affirmative scope determination during the pendency of the litigation. See 19 U.S.C. § 1516a(c)(2) (allowing for injunctive relief in the case of determinations described unde r 19 U.S.C. § 1516a(a)(2), including scope de terminat ions under

(a)(2) (B)(vi )); see also AK Steel , 281 F.Su pp. 2d at 1 318. I

n this case, the court granted the motion on Fe bruary 26, 2002, e

njoining the liquidation of Top Line’s tube fittings from Taiwan during the pendenc y of the litigation re

viewing the Final Affirmative Scope Ruling . In the pertin ent part of the or der, the court:Court No. 02-00073 Page 4

2 On February

28, 2002—two days afte r the issuance of the injunction but before it was served by To

p Line —Commerc e instructed Customs to liquidat

e “all e ntries for all fir

ms exporting SSBWPF [stainless steel butt-weld pipe fittings] from Taiwan to the United States during the 2000–01 period, except for SSBWPF exported by Ta Chen Stainless Steel Pipe, Ltd., Laing Fe ng Stainless Steel Fitting Co., and Tru-Flow I ndustrial Co., Ltd.” Def.’s Opp’n Mot., Decl. of Edward Yang at ¶ 3. The exports of those named firms were under administrative review at the time and were not imported by Top Line, which imports its tube fittings from King Lai I nternational Co., Ltd. ORDERED that the De fendant , togeth er with its delega tes and of ficers, agents , servants and employe es of the United States Customs Service and/or the United States De partmen t of Commer

ce be, a nd they hereby are, en joined dur

ing this litigation from the liquidation from the liquidation of any a nd all entries of stainless steel butt-weld tube fittings from Taiwan which are c overed by the Final Affirmative Scope Ruling on December 10, 2001, and notice of which was published in the Federal Register on Dece mber 21, 2001, 66 Fed. Reg. 65899, and which entries remain unliquidated at the close of business on the day following the day on which a

copy of this order

is personally serve d by Plaintiff on the following individua

ls and re ceived by th em or the ir succe ssors or their dele gates: (1) Ann Sebastian, A.P.O. Coordinator, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Room 1870, Washington, D.C.; and (2) Hon. Robert C. Bonne r, Commissioner of Cu stoms, Atte ntion: Alf onso Roble s, Chief Co

unsel, U.S. Customs Service, Suite 4.4B, 1300 Pennsylvania Avenue , N.W., Washingt on, D.C. Order (Ct. Int’l Trade

Feb. 26, 2002). 2 Top Line served the injunction on Commerce a nd Customs on March 4, 2002. Commerce’s procedure for handling injunctions such as the one issued in this case is as follows: the Import Administration’s office director passes a copy

of the injunction to the

progra m manag er; the p rogra

m manag er passe s it to the a naly st handlin

g the ca se; the a

naly st prepares instructions for Customs regarding the implementation of the injunction; the instructions are reviewed by the program manager ; the analyst forwa rds the approved instructionsCourt No. 02-00073 Page 5

to anothe r Commerc e employ

ee who tr ansmits the

instructi ons to Custom s; Customs headqua rters re views the instructi ons and the

n posts the

m on the Cust

oms’ Electronic B ulletin Board (“CEBB”). D ef.’s Opp’n Mot., Decl. of Edward Yang at ¶6. As for Customs, it has a parallel procedure: a staffper son in the Chief Counsel’s office delivers copies of the order to the staff assistant to the Executive Director of Trade Compliance and Fac ilitation, Office

of Field Operati ons; the Exe cutive Di rector or a subor

dinate pa sses a copy of the or

der to Chief of the Other Government Age ncies Branch (“OGA”) ; the Chief of the OGA delivers the copy

to the appropriate OGA Program Manag er; the OGA Program Manag er verifies that instructions for the implementation of the order have bee n received from Commerce; if no instructions have been received, the OGA Prog ram Manager contacts Commerce , obtains the instructions, reviews them, and eventually posts them on the CEBB. Def.’s Opp’n Mot., Decl. of Alfred S. Morawski at ¶ 3. In this case, the standard pr ocedure did not survive the initial steps, either at Commerce or Customs. As noted above, Commerce was served by Top Line on March 4, 2002 . That same day, Commerce ’s docket center forwarded the injunction to Edward Yang, the I mport Administration Office Director with responsibility for stainless steel butt-weld pipe fittings from Taiwan. Def.’s Opp’n Mot., Decl. of Edwar d Yang at ¶ 5. Mr. Yang sig ned for the injunction,Court No. 02-00073 Page 6

but thereafter the injunction languished. Accor ding to Mr. Yang, a heavy workload caused the standar d proced ure to br eak down , preven

ting the prompt tra

nsmission of

instructi ons to Customs. Id. at ¶7. Similarly, Customs received a copy of the order on March 4. The appropria te staffperson in the Chief Counsel’s office delivered a copy of the order to the staff assistant to the Executive Director of Trade Compliance and Fa cilitation on March 6, 2002. Here the trail ends. The Chief of the OG A does not

recall r eceivin g the or der fro m the Execu

tive Dire ctor’s st

aff ass istant, speculating instead that the order was “misplace d” and that the standard procedures “we re not followed.” Def.’s Opp’n Mot., Decl. of Alfre d S. Morawski at ¶ 4. At the time, Customs did not keep records that would reveal the fa te of the copy of

the order. Customs has since implemented tracking procedures in an attempt to reme dy this deficiency

. Id. For whatever reason, the standar d procedures did not result in the prompt issuance of proper i nstructions to Customs . Ins tead, on F ebruar y 28 , 2002, Comm erce in structed Customs to liquidate entries of stainless steel butt-weld pipe fittings entered betwee n June 1, 2000 and May 31, 2001, without excepting imports from Top Line’s Taiwane se manufacturer, King L ai. Though the injunction order was served on Commerce and Customs several days la ter, it was notCourt No. 02-00073 Page 7

3 The eventual issuance of instructions was set in motion when the Justice Department sent a copy of

the injunction to an attorney in Commerce ’s Office of the Chief Counsel. The Commerce

attorne y th en aler

ted the pr ogram manage

r on May 17, 2002, a s to the ne ed to respond to the injunction. Finally, on June 4, Commerce tra nsmitted to Customs notification of the injunction on SSBWPF from Tai wan manufactur

ed or expor

ted by King L ai along

with instructions to: (1) refrain from liquidating entries of subject merc handise from King La

i which were unliquidated at the close of business of March 5, 2002; and (2) unset immediately any entries that might be set for liquidation. Def.’s Opp’n Mot., Decl. of Edw ard Yang at ¶ 11. until June 4, 2002, that Commerce issued instructions implementing the order. 3 Though t hese instructions were sent on June 4, they we re not posted by Customs on its electronic bulletin board until June 10. In the interim, on June 7, Customs acted under its February 28 orders from Commerce and liquidated fourteen entries of Top L ine’s tube fittings. On June 18, 2002—after it was clear that liquidation had been enjoined—Customs port officia ls advise d Top L ine of the liquidations and ad

vised Top Line of the ne ed to prot

est them in order to avoid finality. Id. at ¶ 8; Pl .’s Mem . in

Supp . of Con tem pt M ot. , Ex. 2, A ffs . of

Kev in J. O’Donne ll and Char

les M. Watson. Top L ine paid a ll duties in

dicated on Customs’ invoices , which were issued as a result of the enjoined liquidations, Pl.’s Mem. in Supp. of Contempt Mot., Ex. 2, O ’Donnel l Aff. at ¶ 5, and w

hich itemi zed the dut

ies and f ees asse ssed by

Customs on each entry

. See Pl.’s Mem. in Supp. of Contempt Mot., Ex. 2, Watson Aff., Exs. Top Line filed a protest on July 22, 2002. Id. Customs re fused To p Line ’s reque st to reve

rse thes e liquidations.Court No. 02-00073 Page 8

On August 29, 2002, Top Line filed a motion for an order to show cause why the Government should not be held in contempt pursuant to Rules 7 and 63 of this Court. The motion asks the court to order Customs to reverse the liquidations and pay the costs and attorneys’ f

ees incurred by

Top Line in protesting the June 7 liquidations. The court heard or al argument on the motion on April 6, 2004. At oral a rgumen t, the Gov ernment

waived a ny o ther ac tion on the

motion for

order to show cause. Accordingly , the court proceeded directly to the underlying

issue of whether the Government should be held in contempt. At the conclusion of oral arg ument, the court gave the parties two weeks in which to agree on a procedure that would cancel the liquidations and return to Top Line the monies it paid on those liquidations. At the end of the two weeks, the Governm ent submitt

ed to the c ourt a sta

tus repor t describ ing the G overnme nt’s inten tion to reliquidate the entries and make refund with interest on or be fore June 19, 2004. Def.’s Status Report (Apr. 20, 2004). The Government did not explain how it can reliquidate entries bef ore the final rates of duties are known. While Top L ine is not altogether adverse to the proposed “reliqu idation,” Top L ine reje cted this a

rrang ement as

inadequa te beca use it fai led to re imburse Top Line for the costs and attorne ys’ fee s incurred in the course of the protest and litigation. Pl.’s Resp. to Def.’ s Status Rep ort (Apr . 21, 2004) . Top L ine also s eems to dis agree with someCourt No. 02-00073 Page 9

aspects of the proposed “reliquidation.” Id. DISCUSSION I. JURISDIC TION Despite engaging in se

ttlement negotiations with Top Line after or al argument, the Government appears to challenge the jurisdiction of the court. Citing the statutory sc heme for protesting Customs’ determinations, 19 U.S.C. § 1514, the Government maintains that the illegal liquidations should be dealt with at the administrative level. See Sandvik Steel Co. v. United States , 164 F.3d 596, 599 (Fed. Cir. 1998) (“When administrative remedies have not been exhausted, judicial review of administrative action is inappropriate”) (interna l quotations omitted). The Government originally argued that 19 U.S.C. § 1514 offered the sole re medy by which Top Line could prevent the imprope r liquidations from becoming final and conclusive. Def.’s Opp’n Br. at 8–9. The Gover nment now argues that, under § 1514(b), the pende ncy of the litigation prevents the liquidations from becoming final, thereby making them unripe for judicial review. Def.’s M ot. at 3–4 ( Apr. 1, 20 04). Unde

r this view , it is uncle ar when , if ever , finality attaches. It is also unclear when an administrative remedy becomes exhausted and thus ripe for judicial review. In essenc e, the Government argues that Customs is free to delay action until theCourt No. 02-00073 Page 10

4 The Government’s argument, by insisting that the improper liquidations may not be reviewed until the conclusion of the underly ing scope litigation, overemphasizes the effec t that should be given to § 1514(b). Section 1514(b), in relevant part, pre vents certain determinations of Customs from becoming final when an action is commenced with this Court. 19 U.S.C. § 1514(b). Section 1514(b) was enacted in 1979, before the Court had power to enjoin liquidation pursuant to § 1516a(c). Cemex, S.A. v. United States , 279 F.Supp. 2d 1357, 1362 (Ct. Int’l Trade 2003). Because the injunction power allows the Court to protect an importer from liquidations that might otherwise become final and unreviewable, “§ 1514(b) seems somewhat redundant.” Id. The court finds it unreasonable to construe § 1514(b)—a statutory provision with an ambiguous purpose—to preclude review of the improper liquidations and thereby frustrate the intent of an injunction order gra nted pursuant to § 1516a(c), a provision with the clear purpose of providing temporary protection to parties who contest agency determinations. conclusion of the scope litigation, and that, in the interim, the court is powerless to ensure tha t the injunction protects Top Line. See 19 U.S.C. § 1 516a(c) ; Zenith Radio Corp. v. United States , 710 F.2d 806, 809–10 (Fed. Cir. 1983) (interpreting § 1516a(c) to require that an injunction be granted only

where the party

shows that it will otherwise be immediately and irr eparably injured). The Government’s argument fails to g rasp the defining aspect of this dispute: the liquidations violated a valid order of the court. In such a situation, it is manifestly inadequate to delay

relief to the party protec

ted by the order

until a time when the need for the order has passed. 4 It is a lso inappropriate to suggest that court orde rs may be ig

nored when a party

finds it efficient to do so. A. Section 1514 and the Exhaustion of Administrative Remedies In creating

the § 1514 protest procedure, Congress expressed a pr eference for administrative protest as a precursor to judicial review. See United States v. A.N. Deringer, I nc. ,Court No. 02-00073 Page 11

593 F.2d 1015, 1021 (C.C.P.A. 1979). Recognizing the import of § 1514, the courts rejected the

propo siti on th at, wh ere a Cu stom s deci sion viol ated an exis ting agency order, the decision was void and the party wa s able to bypass the re quirements of the protest procedure. See United States v. Cherry Hill Textiles, I nc. , 112 F.3d 1550, 1557 (Fed. Cir. 1997) (“the underly ing policy of section 1514 . . . is to channel challenges to liquidations through the protest mec hanism”) (citi ng Deringer , 593 F.2d at 1021). In those ca ses, the precedent of the Feder al Circuit “does not recognize a distinction between ‘void’ and ‘voidable’ liquidations for purposes of determining the applicability of the prote st requirement of section 1514.” Cherry Hill Textiles , 112 F.3d at 1559 ( citi ng Omni U.S.A., Inc. v. United States , 840 F.2d 912 (Fed. Cir. 1988), and Juice Far ms, Inc. v. United States , 68 F.3d 1344 (Fed Cir. 1995)). These cases, however, do not address a situation in which Commerce and Customs have failed to effectuate a § 1516a(c ) court-ordered injunction. I nstead, they involve liquidations that were improper because they conflicted with prior administrative decisions. In Omni , liquidations were suspended by

Commerce. 840 F.2d at 912. The same was the case with Juice Far

ms , 68 F.3d at 1345. In Deringer , Customs liquidated goods that were subsequently rejected by

the Food and Drug Administration. The predece ssor to the Federal Circuit held that § 1514 “c on te mp la te s b ot h t he le ga li ty a nd co rr ec tn es s o f a li qu id at io n b e d et er mi ne d, at le as t i ni ti al ly,Court No. 02-00073 Page 12

via the protest procedure.” Deringer , 593 F .2d at 1020. The Fed eral C ircui t, in decid ing Juice
Farms , took this to

mean tha t “all liqu idations, whether

legal or not, ar

e subjec t to the time ly protest requirement.” 68 F.3d at 1346. These interpretations of § 1514, including their rejection of the voidance doctrine, are distinguished from the instant case by the fact that they

did not involve a violation of a court order. Indicating

that administrative procedures are not alway s a necessary

precursor to judicial review, the Fed

eral Cir cuit circ umscribe d the see

mingly broad re ach it ha

d previou sly

given to the § 1514 protest procedure in Shinyei Corp. of America v. United States , 355 F.3d 1297 (Fed. Cir. 2004) : [Section 15 14(a)] is f

airly construe d to prohib it a chall enge to “decisi ons” of th e Customs Service “as to” l iquidation

outside th e protes t provision s of sect ion 1514(a

). It is not, however, fairly

construed to prohibit reliquidation in all cases, particularly when the alleged error is with Commerce instructions . . . . Underly ing the government’s arg

ument as to sec tion 1514 is

the notion

that Cong

ress has placed s ignific ant value

on the finality of liquidation, and that finality should not be disturbed outside the provisions of section 1514. We do not agree. To begin with, no section in the statute provides tha t liquidations are final except within the narrow confines of section 1514; the statute’s discussion of finality relates to dec isions of Customs. Indeed, the very existence of section 1 514 sugg ests that C ongre ss recog nized the n ecessity

of provid ing rel ief in situations in which errors occurred. Id. at 1311. Recognizing the limits of the applicability of § 1514, the Shinyei

court re fused to construe the statut e in a wa y th at would p revent a

court fr om addre ssing an

agenc y’ s failure

to comply with a court orde

r: “short of compelling legislative history or statutory evidenc e, we decline to find that the statute as a whole was intended to preclude judicia l enforcement of courtCourt No. 02-00073 Page 13

orders after liquidation.” Id. at 1312. Thus, the Federal Circuit has not immunized agencyactions from the force of preexisting court orders through the wholesale reje ction of the voidance doctrine. I nstead, it rejected the voidance doctrine where Customs made a deter mination that violated an existing administrative order or regulation and wher e a meaningful administrative remedy was available. In those cases, there

were sound reasons for requiring the exhaustion of administrative remedies. Those reasons do not apply here, where further administrative re view will only delay

relief and frustrate the intent of the injunction order. The exhau stion doct

rine see ks to prote ct adminis trative a gency authority and promo te judicial efficiency

. Sandvik Steel , 164 F.3d at 600. Th e intere st of admin istrative authority is concerned with allowing an administrative ag ency “ to perform functions within its special competence—to make a factual re cord, to apply its expertise, and to corr ect its own errors.” Id. (citi ng Parisi v. Davidson , 405 U.S. 34, 37 (1972)). Judicial efficiency is served by allowing

an agency “to correct its own errors so as to moot judicial controversies.” Id. It serves neither purpose

to require Top Line to use the prote st procedure or wait until the conclusion of the litigation on the merits. Neither Commerce nor Customs has a special competence which enables it to determine whether a court order should be obey ed. “[W]here Congress has not clearly

required exhaustion, sound judicial discretion governs.” Id. (quoting McCarthy v. Madig an , 503 U.S. 140, 145 (1992). Sound jurisprudence dictates that exhaustion is not required where a party seeks enforcement of a court orde r that was issued to protect that party.Court No. 02-00073 Page 14

B. Custo ms is an Inap prop riate A dmini strati ve Foru m Even if exhaustion were appropriate, Customs is the wrong forum for it. I n arguing that the liquidations have yet to become final, the Government relies heavily on § 1514(b), which pertains to the finality of Customs’ determinations. 19 U.S.C. § 1514(b). The Government overlooks the fact that a determination by Customs is not the source of Top Line’s injury

. Section 15 14(b) pr

ovides tha

t “deter minations o f the Custo ms Servic e” with r espect t o entries subject to final antidumping or countervailing duty determinations will be final and conclusive unless an action is filed with this Court. Id. What is being challenged here is not such a “determination.” At the beginning of this case, Commerce made a determination that the merchandise was subject to antidumping duties. See 19 U.S.C. § 1516a(a)(2)(B)(vi) (providing that Commerce’s scope determinations are reviewable by the Court). Commerc e then ordered Customs to liquidate entries in accordance with its determination. That determination is not at issue her e. What is b eing challeng ed is the li quidation of merchandise i

n violation

of a courtordered injunction. Even assuming Customs had made a determination in liquidating the June 7 entries, the Governm ent has no t demonstr ated tha t the dec ision to liqu

idate wa s an exerc ise of Cust oms’ discretion. In implementing the instructions of Commerce to liquidate entries subject to an antidumping or countervailing duty order, Customs’ actions are ministerial in nature. Yancheng , 277 F. Supp . 2d at 1364 ( quot ing Springfield Indus. v. United States , 11 CIT 123, 655 F.Supp. 506, 507 ( Ct. In

t’l Trad e 1987)) . Furthe

r, Customs h as no authority , statutor y or otherwis e, to determine whether a court-order ed injunction of liquidation should be enforced. That is, when aCourt No. 02-00073 Page 15

5 In this case, however , jurisdiction is also a necessary corollary to the c ourt’s jurisdiction under 28 U.S.C. § 1581(c) to issue the injunction in the first instance. party protests a

liquidation in violati on of a co urt orde r, the out come is fo

reorda ined. Yet despite the obviou s injury

to the par

ty protecte d by

the orde r, the ef fect of the Gove rnment’s position is to delay relief u ntil the conclusion o f the litig ation. Thi s, of cour se, would allow the economic detriment of a liquidation and exaction of funds to persist through the course of the litiga tion, thereby f rustrating Congress’ intent to provide injunctive relief f rom liquidations pursuant to 19 U.S.C. § 1516a(c). See Zenith Radio Corp. , 710 F.2d at 811 (“The greate st concern [of Congress] warranting modification of the prior law was the inadequacy of prospective relief”). To requir e Top L ine to utili ze administ rative r emedies is to requ ire Top L ine to eng age in a futile undertaking that will only delay re lief. See Yancheng , 277 F.Supp. 2d at 1364. Indeed, the essential problem here is not with Customs. Where Commerce is alleged to have c ommitted an error in providing liquidation instructions, § 1514 does not apply

. Shinyei , 355 F.3d at 1304. Instead, an action cha

llenging Commerce’s liquidation instructions is a challenge to the administr ation and enforc ement of

final re sults, and

accord ingly finds its ju

risdictio nal basis

in 28 U.S.C. § 1581(i)(4). Id. at 130 5 (cit ing Consolidated Bearings Co. v. United States , 348 F.3d 997, 1002 (Fed. Cir. 2003)). 5 C. The Voidance Doctrin e The application of the voidance doctrine is supported by the inadequacy

of administrative remedie s and the i

napprop riatene ss of Custom s as a for um for an y su ch reme dies. He

re, as in other ca ses wher

e liquida tions viola

ted an or der of th is Court, th ere is no

meaning ful prote st toCourt No. 02-00073 Page 16

be had the administrative level nor is a determination of Customs really at issue. See, e .g. , Eurodif S.A. v. United States , 2004 Ct. I nt’ Trad e LEX IS 4 ( Ct. In

t’l Trad e 2004); AK Steel Corp. v. United States , 281 F.Su pp. 2d 1318 (Ct. I

nt’l. Tra de 2003) ; Yancheng , 277 F.Supp. 2d 1349 . Put simply

, a court-order

ed suspen sion of liqu

idations c reates a whole d

iffere nt ball g ame apart from the standard protest and judicial review f ramework provided by

Congress. See LG Electronics U.S.A., Inc. v. United States , 21 CIT 1421, 1428 , 991 F.Supp. 668, 675 (Ct. I nt’l Trade 1997) (“The importer’s ordinary obligation to watch for notices of liquidation is suspended where the court h as issued an order forbiddi ng liquid ation”) . Liqu

idations in

violation o f a valid court order have no legal ef fect, LG Electronics , 21 CI T at 1428, 991 F.Sup p. at 675, and it is futile to place a legal nullity within Congress’ statutory sc heme. See Yancheng , 277 F.Supp. 2d at 1364 (“The Court rejects the Government’s contention that a pr otest under § 1514 is the appropriate remedy

for this matter”). In AK Steel , the Court rejected the application of the finality doctrine “where liquidation occurs through an illegal ac t of Customs and in the absence of a protestable event.” The pla intiff in AK Steel was not a

n importer

and so lac

ked stand ing to pr otest liqui dations. H ere, To p Line is an importer and, depending on one’s view of w hether any

protestable event occurred, might be able to file a valid protest. The court sees no reason, howe ver, why—unde

r these facts—the existence of a protestable event in this case would shield the illegal liquidations from prompt remedial action. The crucial factor is the violation of a court order. See Peer Chain Co. v. United States , No. 01-00297, 2004 Ct. Int’l Trade L EXIS 19, *23 n.11 (Ct. I

nt’l Trade 2004) (declining to apply

the void ab initio doctrine because, unlike AK Steel , no court-orderedCourt No. 02-00073 Page 17

injunction prevented Customs from liquidating plaintiff’s entries). Inde ed, the a uthority sugge sts that—regardless of the plaintiff’s ability to protest—liquidations in violation of a court order are qualitatively differe

nt from other liquidations, and so should be considered void ab initio

. Top Line is thus correct in arg uing that the improper liquidations are void ab initio , and that it is inappropriate to subject a legal nullity to reliquidation and other administrative action before this Court may pr

ovide a remedy

. “The proper means to enforce a n order of this Court against the Government is to seek relief in this Court; it is not to file a protest with Customs.” Yancheng , 277 F.Supp. 2d at 1364. II. MERITS It should be uncontroversial to insist that court orders be obe yed, but, based on the Government’s arguments in this and other cases, see, e. g. , AK Steel , 281 F.Supp. 2d 1318; Yancheng , 277 F.Su

pp. 2d 1349 ; D&M Watch Corp. v. United States , 16 CIT 285, 795 F. Supp. 1160 (Ct. Int’l Trade 1992), it seems this proposition needs reinfor cing. While the court apprec iates the

Governm ent’s g ood faith efforts to resolv e this dispu

te after oral ar gument, it is important to revie w briefl y th e potenti ally

contempt uous natur

e of the G overnme

nt’s acti ons in this case. To establi sh contemp t, a plaint iff must s how: (A) the ex istence of a va lid court o rder; (B) defendant’s knowledge of the orde r; and (C) defendant’s disobedience of the or der. Ammex, Inc. v. United States , 193 F.Supp. 2d 1325 1327 (Ct. Int’l Trade 2002). L iquidations in violation of a court order are illegal liquidations. AK Steel , 281 F. Su pp.2d at 1 322 (ref

erring to liquidat

ions in violation of a court order as “illegal liquidations”).Court No. 02-00073 Page 18

A. The Validity of the Court’s Order Section 19 U.S.C. § 1516a(c)(2) permits the Court to enjoin the liquidation of merchandise subject to an affirmative scope de termination under appropriate circumstances. See 19 U.S.C. § 1516a(c)(2) (allowing for injunctive relief in the case of determinations described under 19 U.S.C. § 151 6a(a)(2), inclu ding sco pe deter minations u

nder (a )(2)(B )(vi)); see also AK Steel , 281 F.Supp. 2d at 1318. The Government does not challenge the validity of the order, a

nd the court reaffirms that the order is valid. B. The Government’s Knowledge of the Order Top Line served the orde

r on both Commerce and Customs on March 4, 2001. The Governm ent does n

ot dispute that it had

knowledg e of the order, a nd the cou

rt finds th at it did indeed have knowledge. C. The Government’s Disobedience of the Order The Gove rnment a dmits that it

failed to comply with the or

der. De f.’s Opp ’n Br. a

t 1 (“Certain entries subject to the Court’s February 26, 2002 preliminary injunction were liquidated contrar y to that orde r. Full c omplianc e did not oc cur her e.”). T he Gover nment cha

racter izes this failure as mere bureaucra tic oversight. By

claiming that the illegal liquidations were “inadvertent” and not “willful,” the Government sug gests that its conduct did not rise to the level of disobedience necessary for a finding of contempt. A finding of willful disobedienc e is not necessary when dealing with civil—as opposed to criminal—contempt. Civil contempt is “a sanction to enforce compliance with an order of the court or to compensate for losses or damag es sustained by rea son of noncompliance.” Yancheng , 277 F .Sup p. 2d a t 135 7 (cit ing McComb v.Court No. 02-00073 Page 19

Jacksonville Paper Co. , 336 U.S. 187, 191 (1949)). Civil contempt allows a court to remedy noncompliance regardless of the intent of the noncomplying pa

rty. Id. at 136 3 (cit ing McComb , 336 U.S. at 191). While the Government’s illegal liquidations are sufficient to support a finding of contempt, the more alarming aspect of this case is the Government’s subsequent refusal to rectify the situation. Instead of reversing the liquidations and restoring the status quo ante , the Government informed Top Line ( incorrectly ) that it would have to file a protest to avoid the finality of the liquidations. No further a ction was taken to remedy the harm to Top Line. The Governm ent was c ontent to k eep the money

paid by Top L ine to sati sfy

the dutie s wrong ly

assesse d to it, for

cing To p Line to bear t he burde n of the G overnme

nt’s illeg al conduc

t. Thus, the gov ernment

is not askin

g mere ly to

be excuse d from an

illega l liquidati on, it is als o asking to be excused from repairing the harm done to the pla intiff by the illega

l liquidation. The Government submitted affidavits from Commerce and Customs officials who attributed the illegal liquidations to heavy workloads and a failure to follow standard proce dures for the handling of court orders. The G overnment’s position in this litigation appears to ask the court to tolerate noncompliance with its orders as the unavoidable cost of doing business with the modern administrative bureaucracy . If noncompliance wa s unavoidable in this case, the cost of doing business should be borne by the government, not by

the party whom the or

der was designe d to prote ct. For t he court to excuse t

he Gover nment’s c onduct on

the gro unds that i

t is busy would be to weake

n the force and effect of a ny court orde

r over the Government.Court No. 02-00073 Page 20

6 Here, o f course , reliquid ation as a final re calcula

tion of the

duties owe d on an en

try is not possible, as the underlying litigation continues and the final and conclusive rates of duty have yet to be deter

mined. III. REMEDIES To remedy liquidations that violate a va lid court order, the Court “possesses all the powers in law and equity of, or as conferred by

statute upon, a district court of the United States.” 28 U.S.C. § 1 585; see also AK Steel , 281 F.Supp. 2d at 1323 (ordering the Government to comply with the Co

urt’s ord er withou t making a finding of conte mpt) . This includes the power to grant “any other

form of relief that is appropriate in a civil action.” 28 U.S.C.§ 2643; see also Shinyei , 355 F.3d at 1312 (finding an order of re liquidation permitted by § 2643). 6 CONCLUSION Ac co rd in gl y, 1. As any liquidation is enjoin ed, and c ancella tion and r efund ar e the pro per rem edies, defenda nt shall no t reliquid

ate the 1 4 entrie s at issue. The cour t, howeve r, has no i nterest i n maintaining an injunction no longer desired by the party for

whose protection it was issued. Thus Top Line, if it so desires for its own purposes, may move for amendment of the injunction to permit reliquidation, although it is unclear to the court what ty pe of reliquidation could take place at this juncture. 2. If the Government make s refund with interest of the monies exacted pursuant to the enjoined liquidation on the schedule set forth on its status report, any contempt which may ha

ve existed would be purged. 3. Upon a f

inal and c onclusive

decision on the und

erly ing act ion, the G overnme

nt shallCourt No. 02-00073 Page 21

7 In another case

where the Government liquidated entries in violation of a court orde r, this Court found that attorneys’ fe es could not be awarded to a plaintiff because the Government had not waived its sovereign immunity for such an award. See Yancheng Baolong Biochemical Products Co., Ltd. v. United States , No. 01-00338, Slip Op. 04-42 (Ct. Int’l Trade Apr. 28, 2004). Yancheng

does not foreclose the possibility that attorne ys’ fee s may be ava

ilable in the instant case. The holding in Yancheng was based in part on the fact that the party seeking attorneys’ f

ees was not the prevailing party in the underlying

litigation. Id. , Slip Op. at 22. Because the instant scope litigation remains pending , it has yet to be deter mined whether the same situation will apply in this case. Furthe rmore, Yancheng

does not represent settled law, and, as an opinion of the same level court, does not bind the court. These c onsiderations lead the court to r eserve decision as to the a

vailabili ty o f attorne

ys’ fees. liquidate the 14 entries at issue in accordance with the ra te of duties set forth in such decision. 4. At this po int in the li

tigation , as it is unc lear how the equit ies will ult

imately lie in his matter a nd what in

juries To p Line will have suffer ed, the c ourt see s no reas on to take immediate action on Top Line’s request for costs and attorneys’ fees incurred as a result of its protest and litigation on this matter. 7

SO ORDERED.

/s/ Jane A. Re stani Jane A. Restani Chief Judge Dated: This 29th day of April, 2004. New York, New York