Slip Op 13 - 42



## UNI TED STATES COURT OF INTERNATIO NAL T RADE

: ADVAN CED TECHNOL OGY & MATERI AL S : CO., L TD., B EI J I

NG GAN G YAN D I AMOND : PRODUCTS C OMPANY, and G ANG YA N : DI AMOND PRODUCTS, I NC., :

: Plaintiffs, : Be fore : R. Kenton Musgr ave, Senior J udg e : BO SUN TOOL S GROUP CO. L TD, : Consol. C ourt No. 09-00511 : Plaintiff-I nterve nor, : : v. : : UNI TED STATES, : : Def endant, :

: and : : DI AMOND SAWBL ADES MANUF ACTURERS : COAL I TI ON, WEI HAI

XI ANGGU ANG : MECHANI CAL I

NDUSTRI AL

CO., L TD., : and QI NGDAO SHI

NHAN D I AMOND : I NDUSTRI AL . CO., L TD., : : Def endant- I nterve nors. :

: OP INION [Entries of merc handise cover ed by less-than-f air-va lue deter

mination enjoined from liqu i d ation pendente lite ; temporary

restra int ag ainst revoc ation of antidumping duty order dissolved.] Dated: Ma

rch 28, 2013 Jeffery S. Neeley and Stephe n W

. B r o p h y , B a rnes, Richardson & Colburn, of Washington DC, for the pla intiffs.Consol. C ourt No. 09-00511 Pag e 2

Melissa M. Dev in e , T ri al Attorney , Commercial L itigation Br anch, Civil Division, U.S. Depa rtment of J ustice, of Washington DC, for the defe ndant. Wit h her on the brief wer e Stuart F. Delery , Principal Deputy Assistant A ttorney Gene ral; Jeanne E. Davidson , Direc tor, and Franklin E. W hite , Jr. , Assistant Direc tor. Of counsel on the brief was Nathaniel J. Halvorson , Offic e of the Chief Counsel for I mport Administration, U.S. Depa rtment of Commerce, joined at the hear ing by Miche le D. Lynch , of that off ice. Daniel B. Pickard and Mauree n E. Thorson , Wil ey , R ei n & Fi elding L L P, of W ashing ton DC, for the de fenda

nt-intervenor

Diamond Sawblade s Manufa cture rs Coalition.
Musgr ave, Senior

J udg e: Familiarity

with prior proc eeding s is presumed. Rece nt 1

n o t ice from the United States Depa rtment of Commerce, I nterna tional Trade Administrat i o n (“Commerc e”) of a final deter mination pursuant to section 129 of the Urug uay Round Ag ree ments Act prompted the defe ndant-interve nor Diamond Sawblades Manufa cture rs Coalition (“D SMC”)
to move for a temporar

y restra ining order and preliminary injunction in this court. See Mem. from Gar y Tave rman, Sr. Advis o r for Antidumping and Countervailing Duty Oper ations, to Paul Piquado, Assistant Secre tary for I mport Administration, re: Final Results of the Procee ding under Section 129 of the Urug

uay Round Ag ree ments Act: Antidumping Measur es on Diamond Sawblades and Parts There of fr om the People’s Republic of China ( Mar. 4, 2013) (“f inal section 129 dete rmination”). The underly ing case is curr ently on second rema nd to Commerce for r econside ration of whethe r t h e “A T &M entity ,” a collapsed gr oup of companies (including the pl aintiffs) that are

See Slip Ops. 11-122 (Oc t. 12, 2011); 1 2 -1 4 7 (Nov. 30, 2012). The litigation is a 1 consolidation of ch al l enges to the final less than fair value (“L TFV ”) deter mination in the an tidumping duty investiga tion into imported diamond sawblade s and parts there of from t h e People’s Republic of Chi n a (“ PRC ”). Diamond Sawblades and Parts Thereof from the People’

s Republic o

f China , 71 Fe d. Reg

. 29303 (May 22, 2006) ( inter alia final L TFV deter mination); Diamond Sawblades and Parts Thereof from the People’ s Republic of China , 71 Fe d. Reg . 35864 (June 2 2 , 2006) (ame nded final L TFV deter mination); see also Diamond Sawblades and Parts Thereof from the People’

s Republic of China and the Republic of Korea , 74 Fe d. Reg

. 57145 (Nov. 4, 2009) (a

ntidumping duty

order s).Consol. C ourt No. 09-00511 Pag e 3

eng ag ed in producing and/or exporting diamond sawblade s and parts there on from the PRC subject
to the g overning antidumping duty order , is entitled to a separ ate rate distinct from that of the PRC

wide rate

. Commerce’ s final secti o n 129 deter mination results from an adver se World Trade Org anization panel decision that was filed on behalf of the AT& M entity by the Gover nment of the PRC ag ainst the “zeroing ” methodology employ ed in the U. S

. diamond sawblade s dumping investiga tion. See United States -- Anti-Dumping Measure s on Certain Shrimp and Diamond Saw Blades from China , WT/DS 422/R para s. 2.4, 2. 6 & n.19 (June 8, 2012). The final section 129

rec alcul at i o n o f the AT& M entity ’s marg in without zeroing methodology produce d a de minimis dumping marg in f

or the AT& M entity

. The section 129 deter mination also indicates Commerce’ s final decision on revoc ation as to future entries once the deter mination is i m p l em en t ed upon instruction by the United States Trade Represe ntative. Wit h revoc ation, Commerce in the ordinary

course of administration w ill also order U.S. Custom s and B order Protection (“CB P”) to liquidate or lift the suspension of liquidation on entries of A T& M-entity subject merc handise.. DSMC seeks (1) enjoi n der ag ainst lifting the suspension of liquidation and (2) enjoinder of exclusion or revocation of the AT&M enti ty from the ambit of t he antidumpi ng duty order

. Commerce and CBP being prese ntly restra ined via order of Marc h 6, 2013, the question is what restraint is nece ssary pendente lite this action. Enjoinder requires weig hing (1) the threa t of immediate and irrepa

rable harm if pr eliminary relief is not gra nted, (2) the movant’s likelihood of

succe ss on the m erits, (3) the balance of the hardships, and (4) the publ ic i ntere st. See , e.g. , PPG Industries, Inc. v. United States , 14 CI T 18, 729 F. Supp. 859 (1990). An y s i n gl e fac tor may prec lude injunction. See F MC Corp. v. United States , 3 F.3d 424, 427 ( Fe d. Cir. 1993).Consol. C ourt No. 09-00511 Pag e 4

Discussion The circ umstances here are simil ar to those rela ting to the prel i m i n ary injunction obtained in the litigation over imports of simil ar subject merc handise from Kore a. See Diamond Sawblades Mfrs. Coal. v. United States , Slip Ops 11-117 (Sep. 22, 2011), 11-137 (Nov. 3, 2011), and 12-46 (Mar

. 29, 2012). Here, only the AT& M entity

is being excluded from the antidumping order , which i s n o t b eing revoke d in its entirety

. The court finds the rationale of those decisions instructive in this inst ance . A

An aff irmative L TFV investiga tion no rm ally has two eff ects: (1) to establish that subject merc handise is subject to, and will be subject to, an antidumping duty order for at least five
y ear s, and (2) to establish cash deposit rate s that will preva il until an administrative revie w is completed or

the dea dline for r eview pa sses without a reque st theref or. I t is with the first of these that DSMC is prese ntly conc er n ed. DSMC arg ues Commerce’ s and CBP’s intended acts would
moot the duration of the antidumping duty order and rende r the court unable to g rant the relie f to which it is entitled. There fore , acc ording to DSMC, injunction is nece ssary to preve nt revoc ation of the antidumping duty order as applicable to the AT& M entity ’s exports or product and to preve nt lifting the suspension of liquidation ther eon so as to ensure that such merc handise does not e scape assessment of a

ntidumping duties should DSMC prevail in this action. A final section 129 deter

mination is a new and separ ate proce eding

. I t stands apar t from the ag ency deter

mination it would alter or amend, such as a L TFV deter mination. See Statement of Administrative Action acc ompany ing the Urug uay Round Ag ree ments Act, H.R. Doc.Consol. C ourt No. 09-00511 Pag e 5

No. 103-316, Vol. 1 at 1025, 1027 (1994) (“SAA” ), reprinted in 1994 U.S.C.C.A.N. 4040, 4312-14. A section 129 deter

mination is prospec tive only and does not aff ect entries made prior to it. See 19 U.S.C. § 3538(c) (1). Henc e, as the g overnme nt arg ues, the final section 129 deter mination does not
moot DSMC’s claims reg arding entries made prior to that deter min at i o n o r aff

ect the court’s jurisdiction over those ea rlier e ntries. See Slip Op. 11-117 at 5. As to the prospec tive en t ri es af fec ted by the final section 129 deter mination, the
g overnme nt arg

ues DS MC’s motion for preliminary injunction “does not arise fro m C o m merc e’s final L TFV deter

mination” but is “base d solely upon” the y et-to-be -implemented final section 129 deter mination. Thus, the g overnme nt arg ues, the court would not possess jurisdiction over those entries in the event it is implemented. I t c ontends, rathe r, that the antidumping statute provides an adequate reme dy to contest revoc ati o n and the final section 129 deter mination, see 19 U.S.C. § 1516a(a )(2) (B )(vii), and “nothing in the statute require s that a sec tion 129 pr ocee ding be held in abey ance pending the outcome of ong oing dome stic liti g ation.” De f' s Br . at 13. By the same token, howeve r, nothing in the statute require s divestment of jurisdiction

over which a court is presently possessed including relief aff ecting prospec tive entries that may be made moot by such revoc ation. DSMC’s challeng es to the L TFV results, if succe ssful, would aff ect those entries. I f DSMC preva ils here , the antidumping duty order will continue to apply to the AT& M entity

even in the a

bsence of zeroing . That is the circumstance to which DSM C’s motion for pr eliminary

injunction is addressed, not the f inal section 129 dete rmination itself. The g overnme nt arg ues that the co u rt l ac ks the rig ht to enjoin revoc ation and suspension of liquidation beca us e C ommerce ’s final section 129 deter mination has not beenConsol. C ourt No. 09-00511 Pag e 6

“implemented” and is there fore no t ri p e fo r judicial revie w, but the fac t that DSMC may have a separ ate rig ht to challeng e revoc ation re s u lting from implementation of the section 129 deter mination i s rathe r beside the point. L eg al conseque nces clea rly flow from the section 129 deter mination, see Slip Op. 11-137 at 3 -4, and the court there fore finds it “fina l” in the sense contemplated by Benne tt v. Spear , 520 U. S

. 1 54, 177-78 (1997); see also Abbott Laboratori es v. Gardner , 387 U.S. 136, 149 (1967).

Commerce ’s reg ulations indicate that a company that rec eives a zero marg in in an L TFV investiga tion will be excluded from its antidumping duty order

. See 19 C.F.R. § 351.204(e)

. Ex cluding the AT& M entity from this antidumping duty order would ordinarily lift the suspension of liquidation and permit future entries of the AT& M entity ’s merc handise to liquidate fre e of antidumping duties. A final judgme nt in th i s ac t i o n which determines t hat t he AT&M entity was not entitled to a separ ate rate would be ineffe ctive as to those entries in that circ umstance. And y et this case is now on second remand to Commerce o n t he question of whether that entity is entitled
to a separ ate rate

. I f the AT& M entity is actua lly part of the PRC -wide entity , as arg ued by DSMC, then the marg in for the AT& M entity would rise to 164.09 perc ent without rega rd to zeroing methodology

. This would eff ectively reve rse any revoc ation made pursuant to the final section 129 deter mination. B

The court finds that DSMC has m et i ts burden un der the four factors nece ssary for injunction. Reg arding enjoinder ag ainst lifting the suspension of liquidation, the court finds DSMC will suffe r irrepa

rable harm if entries are liquidated without antidumping duties that may ultimatelyConsol. C ourt No. 09-00511 Pag e 7

be deter mined owed as a result of this litigation. L iquidation by CBP prior to a final decision on the issue of whether the AT& M entity is e ntitled to a separ ate rate would deny a substantial portion of the re lief that DSMC seeks. The c ourt finds irre para ble har m in that the statute would not be able to pr ovide meaning ful relief to D SMC in that circ umstance. See FMC Corp. , supra , 3 F.3d at 431 (“a lthough there may be prospec tive relief available as to future entries, there is no prospec tive relief

-- or, otherwise stated, meaning ful relief that can be applied retroa ctively subsequent to an appea l

-- to c orre ct an improper liquidation”); Zenith Radio Corp. v

. United States , 710 F.2d 806, 811 (F ed. Cir. 1983) (“the inability of revie wing courts to m ea n i n gful ly corr ect the revie w deter mination is irrepa rable injury that must be considere d by the trial court” ); Qingdao Taifa Group Co. v

. United States , 32 CI T 1169, 1170 (2008) (“[i] t ha s long been established that liquidation of entries afte r a final deter

mination of duties for a particula r period, befor e the merits can be litigated, is suff icient h ar m ”) , a f f ’d , 581 F.3d 1375 (F ed. Cir. 2009); accord NSK Corp. v. United States , 31 CI T 19 6 2 , 1965 (2007) (liquidation prior to completion of revie w results and revoc ation of order would leave
p l aint iff without meaning ful judicial reme dy ); PPG Industri es , supra , 14 CI T at 21, 729 F. S u p p . at 861 (liquidation prior to the cour t’s final dec ision would constitut e irre para ble injury ). Reg arding the DSMC’s likelihood of succe ss on the m er i t s , t h e appellate court in Qingdao Taifa noted that it “take s very seriously the Supreme Court’s re ce n t em p h asis on the importance of the likelihood of s u ccess in the preliminary injunction calc ulus” but it “also

rec og nize[ d] that 19 U. S

. C

. § 1516a(c )(2) envisions the use of preliminary injunctions in the antidumping context to prese rve proper leg al options and to allow for a full and fair revie w of duty deter minations be fore liquidation.” Qingdao Taifa , 581 F.3d at 1382. Some likelihood of succe ssConsol. C ourt No. 09-00511 Pag e 8

is require d to be shown, albeit in light of the harm to be avoided. See FMC Co r p . , 3 F. 3 d at 430 (“[n]owhere in Z enith does it sug g est that the harm suffe red b y [appellant] entitles [i t] to an injunction absent a showing of likelihood of succe ss on t h e m erits”). DSMC has now twice
persua ded the court on the validity of its claims perta ining to the AT& M entity ’s enti tlement to a

s ep ara te rate, and the matter is now on its second remand to that ag ency for reconsider ation. Slip Op

. 1 2 -147. The court there fore finds that DSMC has satisfied its burden on the like l i h o o d o f

succe ss. Reg arding the balanc e of hardships, the court finds that any hardship to other parties that would be cause d by an injunction ag ainst lifting the suspension of liquidation is outweig hed by the i rre para

ble harm to DSMC that would occur if a n injunction wer e denied. The defenda nt will suffe r no signific ant hardship as a result of this court g ranting the re q u es t ed injunction ag ainst liquidation, beca

use the main eff

ect of the injunction would be to require the continued suspension of liquidation on incoming entrie s, and suspension of liquidation is at most an “inconve nience ” to the g overnme nt. See Timken , 6 CI T at 81, 569 F. Supp. a t 70- 71; Target Corp. , Slip Op. 10-141 at 6

. S i milarly , the delay in liquidation that would be occa sioned by reta ining the suspensi o n o f l i q u i d at ion would no more than inconvenienc e any interested private party

. By contra st, DSMC’s ri gh t to obtain meaning ful judicial revie w is at stake. I f the curr ent litigation wer e to result in a finding that t h e AT& M entity ’s L TFV marg in is above de minimis , the harm to DSMC will be irreve rsible if the AT& M entity ’s entries wer e liquidated in the interim, as no relief will be available for such entries if they are alre ady liquidated. As such, the court finds that the balanc e of hardships favor s DSMC.Consol. C ourt No. 09-00511 Pag e 9 Considering the l ast fac tor, the court finds that the publ ic i nter est is best serve d by eff ective enfor ceme nt of the trade laws, by ensuring that acc urate amounts of antidumping duties are assessed on entries cover ed by antidumping duty order s, and by ensuring that entities, to the extent that they continue to sell merc handise at less than fair value, rema in subject to anti d u m ping duty order s. See , e.g. , Smith-Corona Grou p v. United States , 1 CI T 89, 98, 507 F. Supp. 1015, 1023 (1980) (“the public interest is best serve d by preve nting entries subject to assessment of antidumping duties from esca

ping the corr ect amount of such duties”), aff’d , 713 F.2d 1568 (F ed. Cir. 1983), cert. denied , 465 U.S. 1022 (1984). As the court held in Qingdao Taifa , “[t] here is also littl e doubt that
t h e public interest is serve d by permitting the court to rea ch a considere d decision reg ar d i n g t h e ag ency ’s deter

mination as to w hether , and in w hat amount, duties are owed, be fore prec luding the parties from litigating the issue.” 32 CI T at 1171. Her e, as in that case , “[n] o harm comes to either side from prese rving the status quo .” Id

. (italics added) Moreove r, it is alway s in the public interest
to allow the courts to conduct a full examination of the fac ts and the law in any g iven case , to ensure that justice will preva il. See Target Corp. , Slip Op. 10-141 at 6. Acc ording ly , the publ ic i ntere st would be best serve d “by the proce dural s afeg uard of an injunction pendente lite to maintain the status quo of the unliquidated entries until a final resolution of the merits.” Smith-Corona G roup , 1 C I T at 98, 507 F. Supp. at 1023 (italics added)

. L iquidation of subject imports prio r t o t h e completion of the appellate proce ss may preve nt the rec overy of lawfully owed antidumping duties and preve nt the exercise of meaning ful judicial revie w. Consequently , the court finds that g ranting the re q u est for injunction ag ainst liquidation is in the public interest and would avoid these
outcomes.Consol. C ourt No. 09-00511 Pag e 10

C I n its response to DSMC’s motion for preliminary injunction, AT& M arg ues t h at DSMC’s challeng e to the L TFV results is pr otected by the proc ess of a dminist rative r eview of the antidumping duty order and entries of its merchandise that has bee n occur ring . AT& M points out that DSMC has separate ly challeng ed and enjoined liquidation of entries c overe d by the period of the now-c ompleted first administrative revie w ( see Court No. 13-00078), that the final second administrative revie w results are due shortly , that the third administrative revie w has been initiated, that Commerce continues to require the suspension of liquidation for entries subject to the latter two revie ws. DSMC may be protec ted with respe ct to entries prior to implementation of the final section 129 deter mination, but it is not with respect to entrie s occur ring there afte r. See supra

. AT& M also makes the point that by enjoining lifting of the suspension of liquidation, the court is interfe ring with the opera tion of 19 U.S.C. § 1675(a) (1) and (3), which provide that if

no appeal i s t ak en entries are to be liquidated as enter ed or in acc ordanc e with the administrative revie w results by opera tion of law. Nowher e in the statutes, howeve r, is it indicated that overla pping

or comp l ementary injunctive relief is impermissible. The court has broad authority to enjoin liquidation. 19 U.S.C. § 1516a(c )(2) provides that this court “may enjoin t h e liquidation of som e

or all entries of merc handise cover ed by a deter mination of

. . . the administering authority

. . . upon

a reque st by an interested party for such relief and a proper showing that the reque sted relief should be g rante d under the circ umstances.” See , e.g. , SKF USA Inc. v. United States , 28 CI T 170, 181, 316 F. Supp. 2d 1322, 1 3 33 (2004) (powe r of this court sitti ng in equity complements Commerce’ sConsol. C ourt No. 09-00511 Pag e 11

administrative suspension), vacate d as moot , 512 F.3d 1326 (F ed. Cir. 2008). The court is not here ruling on a motion to tailor an injunction to accor d with the opera tion of law. D The go v ernment and AT& M arg ue that DSMC’s claim for an injunction ag ainst

r evoca tion of the antidumping duty order is prema ture, and that the court lacks jurisdiction to provide the reque sted relief

. The co u rt ag ree s. The g overning statute provides DSMC the opportunity to seek ju d i ci al revie w of any final section 129 deter mination and of the administrative notice of

revoc ation to exclude the AT& M entity from the antidu m p i n g d u t y order

. The nece ssary administration of U.S. trade laws require s interim action by C o m m er ce . See supra; see also Diamond Sawblades Mfrs. Coal. v. United States , 33 CI T ___, 650 F. Supp. 2d 1331 (2009), aff’d , 612 F.3d 1348 (F ed. Cir. 2010) (re quiring Commerce, consistent with its statutory responsibilities and i ts aff

irmative L TFV deter

mination, to enter an antidumping duty order when the U.S. I nterna tional Trade Commi ssion issues it s aff irmative mater ial injury

deter mination). Previously , when face d with a si milar question in the litigation over the Korean diamond sawblade s dumping investiga tion, the c ourt conclude d that an “interloc utory ” revoc ation of an antidumping duty order

as a conseque nce of implementation of a final section 129 deter mination did not in t h at i n s tance aff ect the leg al predic ate of the orig inal aff irmative L TFV deter

mination. The same holds true here

. I n support of enjoining revoc ation DSMC arg ues that the e ffe cts of the se ction 129 deter mination cannot be cate g orized as “ordina ry conseque nces of antidumping duty proce dures” which ordinarily “do not constitute irrepa rable harm.” See Slip Op. 11-117 at 5; see also , e.g. , Matsushita Elec. Indus. Co. v. United States , 823 F.2d. 505, 509 (F ed. Cir. 1987)

. Rely ing onConsol. C ourt No. 09-00511 Pag e 12

Hosiden Corp. v. United States , 85 F.3d 589 (F ed. Cir. 1996), DSMC arg ues that unless Commerce is restra ined from excluding the AT& M entity from the antidumping duty order , it may “be without

rec ourse” if it ultimately preva ils in this litigation beca use there are no “appa

rent” mecha

nisms for restoring a company to an antidumping duty order ’s am b i t o n ce the company is excluded in

acc ordanc e with 19 C.F.R. § 351.204(e)

. DSMC’s Mot. Br

. at 8, 13. DSMC arg ues that the rea son Commerce must be enjoined from excluding the AT& M entity from the order is beca use unlike the action reg arding the Kore an antidumping duty order the exclusion of only one company is at issue.

That does not ap p ear to be a meaning ful distinction. I n the para llel Kore an antidumping matter , afte r liquidation wa s preliminarily enjoined the g overnme nt filed a motion to lift the injunction in order to “fully ” implement a section 129 deter mination that resulted i n zero marg ins for all imports from Kore a. The mo t i o n wa s denied, Slip Op. 12-46 at 13, and in their
arg ument the d o m es t i c i ndustry had taken the pos ition that it did not need to separ ately challeng e

revoc ation beca

use the injunction ag ainst lifting the suspension of liquidation adequately protec ted
t h ei r interests. The court ag ree d, finding that the DS MC maintained a rig ht of reinstatement , an d also that Commerce ’s re vocation wa s essentially interlocutory

. Her e, exclusion of the AT& M entity from the antidumping dut y o rd er would constitute harm if the f

inal result of thi s action is that the AT& M entity is ineligible for

a sepa rate
rate

. Howeve r, it does not appea r that such action alone is “irre para ble” or irreve rsible. Unlike the liquidation of entries of AT& M products or exports, the revoc ation of the order as to the AT& M entity is subject to a meaning ful reme dy , should this action deter mine that the AT& M entity did not qualify for a separ ate rate

. Both Commerce and the court reta in the powe r t o u n d o any suchConsol. C ourt No. 09-00511 Pag e 13

interlocutory action as nece ssary to harmonize with a final decision on the merits of the underlying litigation. Cf

. 19 U.S.C. § 1516a(c) (3); Slip Op. 11-137 at 13. A sepa rate order to the above e ffe ct is issued here with.

/s/ R. Kenton Musgra

ve R. Kenton Musg rave , Senior J udg e Dated: Ma

rch 28, 2013 New Y ork, Ne w York