Opinion ID: 2809235
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: The facts of the case are generally undisputed and are set forth in the Court of International Trade’s decision. See Am. Home, 964 F. Supp. 2d at 1345–46. We recite here the facts pertinent to the issues before us.
Following a 1996 investigation, the U.S. Department of Commerce (“Commerce”) determined that freshwater crawfish tail meat imported from China was being sold in the United States at less than fair market value. See Freshwater Crawfish Tail Meat from the People’s Republic of China, 62 Fed. Reg. 41,347 (Aug. 1, 1997). As a result, Commerce ordered that entries of freshwater crawfish tail meat from China be subject to antidumping duties upon entry into the United States. 1
JCOF is an importer based in New York. In 2001, it arranged to import into the United States shipments of freshwater crawfish tail meat from a Chinese exporter, Yangzhou Lakebest Foods Company, Ltd. (“Yangzhou”). Yangzhou did not export freshwater crawfish tail meat to 1 Dumping occurs when foreign-produced goods are sold in the United States at a price below the sales price in the country of origin. E.g., Dongbu Steel Co. v. United States, 635 F.3d 1363, 1365 (Fed. Cir. 2011). If domestic companies believe they are being injured by dumping activity, they can lodge complaints with Commerce requesting the imposition of antidumping duties. Id. Commerce then conducts an investigation based on the complaints to determine whether, and to what extent, dumping is occurring. It orders antidumping duties if a domestic industry is being injured by less-than-fairmarket prices. Id. 4 US v. AMERICAN HOME ASSURANCE CO. the United States during the period of Commerce’s 1996 investigation. For that reason, for purposes of exporting freshwater crawfish tail meat to the United States in 2001, it qualified as a “new exporter” of merchandise under 19 U.S.C. § 1675(a)(2)(B). Yangzhou’s “new exporter” status gave JCOF options for how it could post the security necessary for the Bureau of Customs and Border Protection (“Customs”) to release the imported goods from its custody. It had the option of “posting, until the completion of the [administrative] review [of the new exporter], . . . a bond or security in lieu of a cash deposit.” 19 U.S.C. § 1675(a)(2)(B)(iii). Exercising that option, JCOF chose to use a surety company to post the required security. In April 2001, it contracted with AHAC, a New York-based surety, for the issuance of a one-year, continuous bond in the amount of $600,000. 2 The bond became effective on May 4, 2001, and provided Customs with security for future duties owed on entries of freshwater crawfish tail meat from Yangzhou. [J.A. 23] Under the terms of the bond, AHAC and JCOF were jointly and severally obligated, and had a liability cap of $600,000. Am. Home, 964 F. Supp. 2d at 1345. During the period covered by the bond, JCOF made two entries of crawfish tail meat from Yangzhou at the Port of Los Angeles/Long Beach. Id. The entries occurred on November 1, and 2, 2001, and were identified as M42– 1164064–2 and M42–1164065–9, respectively. At the time of entry, JCOF declared a 0% ad valorem antidump- 2 A “continuous bond,” as compared to a “single transaction bond,” covers “liabilities resulting from multiple import transactions over a period of time, such as one year.” Nat’l Fisheries Inst., Inc. v. U.S. Bureau of Customs & Border Prot., 465 F. Supp. 2d 1300, 1302 (Ct. Int’l Trade 2006); see also 19 C.F.R. § 113.12. US v. AMERICAN HOME ASSURANCE CO. 5 ing duty rate, which was the deposit rate then in effect for shipments by Yangzhou. Id. Based on JCOF’s bond, Customs allowed the freshwater crawfish tail meat to be released from its custody and to enter the stream of commerce in the United States. Shortly thereafter, Commerce conducted an administrative review of freshwater crawfish tail meat entries during the period of September 1, 2001, through August 31, 2002. 3 During the review, liquidation of JCOF’s two entries was suspended while Yangzhou’s final antidumping duty rate was determined. 4 When Commerce eventually published the final results of its administrative review in February 2004, it assigned Yangzhou a 223.01% ad valorem antidumping duty rate. See Freshwater Crawfish Tail Meat from the People’s Republic of China, 69 Fed. Reg. 7,193, 7,194 (Feb. 13, 2004). On May 12, 2004, Commerce issued instructions di- recting Customs to liquidate JCOF’s November 2001 entries at the new rate assigned to Yangzhou. Customs thereafter liquidated the entries on June 25, 2004, and billed JCOF for duties owed. Am. Home, 964 F. Supp. 2d at 1346. Following JCOF’s failure to pay the duties, 3 An interested party may request Commerce to conduct an “administrative review” of an outstanding antidumping order. See 19 U.S.C. § 1675. The final results of such a review “shall be the basis for the assessment of countervailing or antidumping duties on entries of merchandise covered by the determination and for deposits of estimated duties.” Id. at § 1675(a)(2)(C). 4 “Liquidation” means the final computation or ascertainment of the duties accruing on an entry. 19 C.F.R. § 159.1. Under Commerce’s accounting system, and as a result of suspended liquidations, the actual liquidation of entries subject to an antidumping order may occur years after the date of importation. 6 US v. AMERICAN HOME ASSURANCE CO. Customs sought payment from AHAC, as JCOF’s surety. In November 2004, AHAC denied liability and responded to Customs’ demand for payment under the bond by filing Protest No. 2704-04-102655 (the “102655 protest”). At about the same time, Shanghai Taoen International Trading Co., Ltd. (“Shanghai Taoen”), one of the other exporters of freshwater crawfish tail meat subject to Commerce’s 2004 administrative review, filed suit in the Court of International Trade challenging the results of the review. Id. Shanghai Taoen’s suit precipitated a preliminary injunction enjoining liquidation of the entries of crawfish tail meat exported by it. Id. Yangzhou was not named in the injunction, however, as it was not a party to the pending litigation. Id. Subsequently, in February 2005, the Court of International Trade sustained Commerce’s final results. Shanghai Taoen Int’l Trading Co., Ltd. v. United States, 360 F. Supp. 2d 1339, 1348 (Ct. Int’l Trade 2005). The court’s affirmance dissolved the outstanding injunction, and Customs was instructed to liquidate Shanghai Taoen’s entries at the applicable rate. Following dissolution of the Shanghai Taoen injunction, and even though the injunction had not applied to shipments from Yangzhou, Customs reliquidated JCOF’s two November 2001 entries on June 3, 2005, believing that the original liquidations in June 2004 may have been in violation of the Shanghai Taoen injunction. See Joint Appendix (“J.A.”) 109–112. 5 As a result of those mistaken 5 In an August 7, 2007, letter to JCOF and AHAC, Customs wrote that it believed the preliminary injunction issued by the Court of International Trade in Shanghai Taoen covered JCOF’s entries. As a result, Customs said it had thought it should “unset” its original June 2004 liquidations as being in violation of the court’s order. J.A. 110. Reliquidation of JCOF’s entries in June 2005 folUS v. AMERICAN HOME ASSURANCE CO. 7 reliquidations, Customs voided its prior bills for duties owed and issued new bills to JCOF. When JCOF failed to pay the duties, Customs again sought payment from AHAC. Several weeks later, in July 2005, apparently not appreciating the effect of its reliquidation action, Customs denied the 102655 protest. That protest had remained unresolved following the original June 2004 liquidations. In September 2005, Customs issued a second demand to AHAC for payment of duties on the entries reliquidated in June 2005. AHAC did not appeal the denial of the 102655 protest by filing suit in the Court of International Trade. Instead, in December 2005, it filed a second protest, Protest No. 2704-05-102579 (the “102579 protest”), contesting Customs’ further demand for payment under the continu- lowed the court’s February 2005 opinion in Shanghai Taoen sustaining the findings of Commerce’s administrative review and lifting the injunction. Customs stated in its 2007 letter that, when it reliquidated, it believed it had authority to do so under 19 U.S.C. § 1504(d) because the June 2005 reliquidations were being made within six months of the court’s February 2005 order, which it mistakenly perceived as removing a suspension of liquidation covering JCOF’s entries. It is now undisputed that the Shanghai Taoen preliminary injunction never applied to JCOF’s entries and that 19 U.S.C. § 1501 therefore provided the proper timeframe within which Customs could have reliquidated the entries: “within ninety days from the date on which notice of the original liquidation is given or transmitted to the importer.” That is, in this case, within ninety days of notice of the June 2004 liquidations, Customs could have reliquidated. It is undisputed that Customs’ June 2005 reliquidations fell outside of the § 1501 timeframe and were thus erroneous, in addition to being unnecessary. 8 US v. AMERICAN HOME ASSURANCE CO. ous bond following the erroneous reliquidations. In July 2006, Customs denied AHAC’s protest. AHAC did not file an action in the Court of International Trade contesting the denial. On February 9, 2007, Customs sent a third demand letter to AHAC. In it, Customs sought a total payment of $1,157,898.22 for unpaid duties and interest in connection with JCOF’s two November 2001 freshwater crawfish tail meat entries. Am. Home, 964 F. Supp. 2d at 1346. AHAC denied liability and refused to make payment under the bond.
On June 21, 2010, the government filed suit in the Court of International Trade to recover from AHAC, as JCOF’s surety, the duties and interest allegedly owed on the November 2001 entries. The parties, in due course, cross-moved for summary judgment on various issues. Seeking summary judgment on the merits, AHAC asserted that the government’s collection action was moot due to the 2005 reliquidations. It argued that the erroneous reliquidations voided the previous timely liquidations of June 2004, resulting in a scenario where no valid liquidation or reliquidation occurred. According to AHAC, since no valid liquidation was on record, the entries at issue should have been deemed liquidated by operation of law under 19 U.S.C. § 1504(d) at the initially-declared 0% rate six months after the suspension of liquidation was removed in February 2004. The government moved for summary judgment on en- titlement to prejudgment statutory interest under 19 U.S.C. § 580. Section 580 provides that “[u]pon all bonds, on which suits are brought for the recovery of duties, interest shall be allowed . . . from the time when said bonds became due.” The government argued that the statute’s plain language mandated that it be awarded interest for AHAC’s delayed payment under the continuUS v. AMERICAN HOME ASSURANCE CO. 9 ous bond. The government also claimed entitlement to equitable prejudgment interest. In the decision now on appeal, the Court of International Trade ruled on the summary judgment motions. The court first determined that AHAC was legally obligated to pay under its continuous bond. Am. Home, 964 F. Supp. 2d at 1347. It agreed with AHAC that the 2005 reliquidations superseded and voided the original liquidations. It ruled, however, that AHAC was required to preserve its rights by timely protesting the reliquidations by instituting litigation. Id. at 1347, 1349. The court concluded that, under our decision in Juice Farms, Inc. v. United States, 68 F.3d 1344 (Fed. Cir. 1995), the 2005 reliquidations became final, “whether legal or not,” once AHAC failed to challenge them in court. Am. Home, 964 F. Supp. 2d at 1347 (quoting Juice Farms, 68 F.3d at 1346). The court held that since AHAC failed to timely challenge the reliquidations in court, it had failed to preserve its rights and was thus liable under the continuous bond. Id. at 1349. Having found AHAC liable, the Court of International Trade next held that the government was not entitled to statutory prejudgment interest under § 580. Id. at 1350– 55. In the court’s view, the historical context of the statute did not allow the word “duties” to encompass antidumping duties. The court determined that, “in the period since the statute’s enactment over 200 years ago, Congress, courts, and the Government itself have counseled that antidumping duties are not comparable to normal customs duties in function, purpose, and character.” Id. at 1352. In reaching its decision, the court relied on Dynacraft Industries v. United States, 118 F. Supp. 2d 1286 (Ct. Int’l Trade 2000), and Wheatland Tube Co. v. United States, 495 F.3d 1355 (Fed. Cir. 2007). The court stated that, in Dynacraft, it had previously interpreted “duties” in an interest statute, 19 U.S.C. § 1505, as encompassing only “ordinary” customs duties. Am. Home, 10 US v. AMERICAN HOME ASSURANCE CO. 964 F. Supp. 2d at 1353 (citing Dynacraft, 118 F. Supp. 2d at 1292). Citing our decision in Wheatland Tube, the court noted that the government itself had previously advocated for the interpretation of “duties” adopted in Dynacraft. Id. (citing Wheatland Tube, 495 F.3d at 1361– 63). The Court of International Trade did rule, though, that the government was entitled to equitable prejudgment interest (in excess of the $600,000 bond limit) for AHAC’s use of the money owed after payment had become due. Id. at 1354–57. The court determined that both equity and fairness weighed in favor of awarding equitable interest to the government. Id. at 1356–57. AHAC timely appealed the Court of International Trade’s decision on liability and equitable interest; the government timely cross-appealed the court’s denial of § 580 interest. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).