Court Opinion

ID: 4092481
Source: CourtListenerOpinion
Date Created: 2016-10-25 16:02:29.082887+00
Date Added: 2024-06-11T14:07:29.451392
License: Public Domain

Slip Op. 16-101

                  UNITED STATES COURT OF INTERNATIONAL TRADE

 THYSSENKRUPP STEEL NORTH
 AMERICA, INC.,
                                                      Before: Richard W. Goldberg, Senior Judge
                                Plaintiff,            Court No. 15-00072

 v.

 UNITED STATES,

                                Defendant.

                                     OPINION AND ORDER

[The court grants Defendant’s motion to dismiss Plaintiff’s first claim for lack of subject matter
jurisdiction. The court grants Defendant’s motion for judgment on the pleadings with respect to
Plaintiff’s alternative claim.]

                                                                       Dated: October 25, 2016

      Robert L. LaFrankie, Matthew R. Nicely, and Alexandra B. Hess, Hughes Hubbard &
Reed LLP, of Washington, DC, for plaintiff.

       Justin R. Miller, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of New York, NY, for defendant. With him on the brief were
Benjamin C. Mizer, Principle Deputy Assistant Attorney General, Jeanne E. Davidson, Director,
and Claudia Burke, Assistant Director.

      Goldberg, Senior Judge: Plaintiff, ThyssenKrupp Steel North America (“Plaintiff”),

challenges United States Customs and Border Protection’s (“CBP”) rejection of its protests

regarding CBP’s refusal to reliquidate Plaintiff’s entries. In the alternative, Plaintiff challenges

the lawfulness of liquidation instructions issued by the United States Department of Commerce

(“Commerce”). Commerce, CBP, and the United States (collectively, “Defendant”) move for
Court No. 15-00072                                                                            Page 2

dismissal of Plaintiff’s first claim for lack of subject matter jurisdiction and for judgment on the

pleadings with respect to Plaintiff’s alternative claim. The court grants both motions.

                                         BACKGROUND

       In 1993, Commerce published an antidumping duty order on certain corrosion-resistant

steel from Germany (“CORE”). Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-

Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products and

Certain Cut-to-Length Carbon Steel Plate from Germany, 58 Fed. Reg. 44,170 (Dep’t

Commerce Aug. 19, 1993) (amended final determ.).

       On January 3, 2012, the International Trade Commission (“ITC”) instituted the third

sunset review of the antidumping duty order on CORE. Corrosion-Resistant Carbon Steel Flat

Products from Germany and Korea, 77 Fed. Reg. 301 (ITC Jan. 4, 2012) (institution of five-year

review).

       From February 14, 2012 through July 14, 2012, Plaintiff entered eight shipments of

CORE that are the subject of this action. See HQ H243862 and H260365 (Dec. 29, 2014) at 1,

ECF No. 41-2, Ex. 7 (“Decision Letter”). Six entries arrived through the Port of Mobile, AL and

two entries arrived through the Port of Philadelphia, PA. Id. at 1–2. At the time of entry,

Plaintiff deposited estimated antidumping duties on these entries at the 10.02% rate then in

effect. Compl. ¶ 19, ECF No. 5. As part of its annual review process, Commerce solicited

requests for review of the CORE antidumping order. See 19 U.S.C. § 1675(a). Liquidation of

subject entries was suspended during the review process. No interested party requested a review

and, therefore, Commerce lifted the suspension of liquidation and issued liquidation instructions.

Admin. Message No. 2291302 (October 17, 2012), ECF No. 41-2, Ex. 1.

       Commerce’s October 17, 2012 liquidation instructions directed CBP to assess

antidumping duties “at the cash deposit or bonding rate in effect on the date of entry.” Id. ¶ 2.
Court No. 15-00072                                                                             Page 3

CBP liquidated Plaintiff’s Mobile entries on November 16, 2012 and liquidated Plaintiff’s

Philadelphia entries on December 21, 2012. Compl. ¶ 21.

       On March 11, 2013, the ITC published its final determination pursuant to the sunset

review, finding that revocation of the CORE antidumping order was warranted. Corrosion-

Resistant Carbon Steel Flat Products from Germany and Korea, 78 Fed. Reg. 15,376 (ITC Mar.

11, 2013) (final determ.).

       On March 19, 2013, pursuant to the ITC’s determination, Commerce revoked the CORE

antidumping order. Corrosion-Resistant Carbon Steel Flat Products from Germany and Korea,

78 Fed. Reg. 16,832 (Dep’t Commerce Mar. 19, 2013) (revocation of orders). Commerce’s

revocation was effective retroactively, applicable to entries back to and including February 14,

2012. Id.

       On April 4, 2013, Commerce issued new liquidation instructions advising CBP that it had

revoked the order on CORE. Admin. Message No. 3094301 (April 4, 2013), ECF No. 41-2, Ex.

2. Commerce’s instructions directed CBP to liquidate all relevant “unliquidated entries . . . .

without regard to antidumping duties.” Id. ¶¶ 2, 3.

       On April 16, 2013, Plaintiff filed protests with the Port of Mobile. ECF No. 41-2, Ex. 4

(“Port of Mobile Protests”). Plaintiff argued that the liquidation of its entries was not “final” as

Plaintiff had filed valid protests, that its entries therefore remained “unliquidated” within the

meaning of the new liquidation instructions, and that CBP should now reliquidate those entries

without antidumping duties. Id. at Attachment. The Port of Mobile forwarded the protests to

CBP Headquarters (“HQ”) for further review. See Decision Letter 3.

       On May 2, 2013, Plaintiff filed a similar protest with the Port of Philadelphia. ECF No.

41-2, Ex. 6 (“Port of Philadelphia Protest”). On June 4, 2013, the Port of Philadelphia denied the
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protest and Plaintiff’s application for further review. See Decision Letter 3. In its denial, the

Port of Philadelphia stated that Commerce’s instructions applied only to “unliquidated entries,”

which it interpreted to exclude Plaintiff’s previously-liquidated entries. Port of Philadelphia

Protest at item 18.

       On August 1, 2013, Plaintiff requested that CBP HQ set aside the Port of Philadelphia’s

denial of further review of Plaintiff’s protest. See Decision Letter 3. On August 29, 2013, CBP

HQ granted Plaintiff’s request for further review and voided the Port of Philadelphia’s actions so

that CBP HQ could review the Mobile and Philadelphia protests together. See id.

       On December 29, 2014, CBP HQ issued its Decision Letter, ruling that no protestable

issues existed because CBP had properly interpreted the term “unliquidated” in Commerce’s

April 4, 2013 instructions to exclude Plaintiff’s entries. The ports of Mobile and Philadelphia

thereafter rejected Plaintiff’s protests in accordance with CBP HQ’s decision. Compl. ¶¶ 32–33.

       On March 19, 2015, Plaintiff brought a claim under 28 U.S.C. § 1581(a) to challenge

CBP’s decisions. Summons and Compl., ECF Nos. 1, 5. Plaintiff also filed an alternative claim

under 28 U.S.C. § 1581(i) challenging Commerce’s April 4, 2013 liquidation instructions as

contrary to law. Compl. ¶ 2.

       Defendant now moves to dismiss, under USCIT R. 12(b)(1), Plaintiff’s claim against

CBP for lack of subject matter jurisdiction. Def.’s Mot. to Dismiss for Lack of Subject Matter

Jurisdiction under 28 U.S.C. § 1581(a), or in the Alternative, Mot. for J. on the Pleadings, ECF

No. 32 (“MTD”). Defendant argues that CBP’s actions with respect to Plaintiff were not

protestable, such that this court lacks jurisdiction under § 1581(a). Def.’s Mem. in Support of its

MTD at 7, ECF No. 32 (“MTD Memo”). Because the court agrees, and for additional reasons

stated below, the court grants Defendant’s motion. Defendant also moves, pursuant to USCIT R.
Court No. 15-00072                                                                            Page 5

12(c), for judgment on the pleadings with respect to Plaintiff’s alternative claim. MTD. The

court finds that Defendant is entitled to judgment as a matter of law and grants Defendant’s

motion for judgment on the pleadings.

                                   STANDARD OF REVIEW

        “Once jurisdiction is challenged, the plaintiff bears the burden of proving that the court’s

jurisdiction is invoked properly.” Pentax Corp. v. Robison, 125 F.3d 1457, 1462 (Fed. Cir.

1997). In considering this USCIT R. 12(b)(1) motion to dismiss for lack of subject matter

jurisdiction, the court assumes that well-pleaded factual allegations are true. See Cisco Sys., Inc.

v. United States, 35 CIT __, __, 804 F. Supp. 2d 1326, 1330 (2011).

        Judgment on the pleadings is appropriate where there are no material facts in dispute and

the moving party is entitled to judgment as a matter of law. See New Zealand Lamb Co. v.

United States, 40 F.3d 377, 380 (Fed. Cir. 1994). “A ruling on a motion for judgment on the

pleadings is reviewed under the same standard as a motion to dismiss under USCIT R. 12(b) for

failure to state a claim” and the court “must accept all well-pleaded facts as true.” Forest Labs.,

Inc. v. United States, 29 CIT 1401, 1402–03, 403 F. Supp. 2d 1348, 1349 (2005), aff'd, 476 F.3d
877 (Fed. Cir. 2007). However, “the tenet that a court must accept as true all of the allegations

contained in a complaint is inapplicable to legal conclusions.” Macclenny Prod. v. United States,

38 CIT __, __, 963 F. Supp. 2d 1348, 1357 n.16 (2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009)).

                                          DISCUSSION

   I.      Plaintiff Has Failed to Establish § 1581(a) Jurisdiction.

        An importer can only protest “decisions” by CBP that concern one or more of seven

events listed in 19 U.S.C. § 1514(a). Consequently, a protest is invalid if the challenged action

does not fit within § 1514(a) or if the challenged action cannot be characterized as a “decision”
Court No. 15-00072                                                                                Page 6

of CBP. See Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973 (Fed. Cir. 1994) (finding

that § 1581(a) jurisdiction was inappropriate because plaintiff’s claim did not concern a

protestable decision by CBP). A protest must also be filed “within 180 days after but not before

[the] date of liquidation or reliquidation,” or “the date of the decision as to which protest is

made.” 19 U.S.C. § 1514(c)(3). This court has “exclusive jurisdiction of any civil action

commenced to contest the denial of a protest.” 28 U.S.C. § 1581(a).

        Because Plaintiff has alleged jurisdiction under § 1581(a), the court must determine

whether Plaintiff timely protested a protestable CBP decision and whether CBP subsequently

denied that protest. The court finds that Plaintiff has established none of these requisite

jurisdictional facts.

        First, with respect to CBP’s refusal to reliquidate Plaintiff’s entries, Plaintiff’s protests

were untimely. 19 U.S.C. § 1514(c)(3) (requiring that protests occur “within 180 days after but

not before . . . the date of liquidation or reliquidation, or . . . the date of the decision as to which

protest is made.” (emphasis added)). Plaintiff’s protests, filed on April 16, 2013 and May 2,

2013, challenged CBP’s alleged failure to apply Commerce’s April 4, 2013 instructions to

Plaintiff’s entries. Compl. ¶¶ 27–28. But CBP had six months to apply those instructions before

subject entries would be considered liquidated by operation of law. 19 U.S.C. § 1504(d).

Therefore, when Plaintiff filed its protests, it could not know whether or not CBP interpreted the

liquidation instructions to encompass Plaintiff’s entries. Nor was there a decision for CBP to

make before Plaintiff filed its protests, since the protests themselves are the basis for the claim

that CBP erred. See, e.g., Port of Mobile Protests, Attachment at 6 (protesting that “these entries

remain ‘unliquidated’” because they are “subject to proper and timely protests”). These

anticipatory protests violated § 1514(c)(3) and are invalid. See Canadian Reynolds Metals Co. v.
Court No. 15-00072                                                                             Page 7

United States, 28 CIT 2053, 2058, 350 F. Supp. 2d 1302, 1307 (2004) (explaining that a protest

is “untimely and invalid” unless “[t]he decision the protesting party objects to . . . occur[s] prior

to the filing of the protest.”).

        Second, and consequently, Plaintiff’s protests can be considered timely only with respect

to the November 16 and December 21, 2012 liquidations of its entries. However, while timely,

such protests are also invalid because they did not concern a protestable decision by CBP.

Plaintiff’s own admissions make this conclusion plain. As of November 16 and December 21,

2012, Plaintiff’s entries were subject to an antidumping duty order. Compl. ¶¶ 19–20.

Commerce lifted suspension of liquidation and instructed CBP to liquidate relevant entries “at

the cash deposit or bonding rate in effect on the date of entry,” 10.02%. Id. CBP then correctly

applied those instructions to Plaintiff’s entries. See id. ¶ 21. When CBP “merely follows

Commerce’s instructions in assessing and collecting duties” it does not make a protestable

decision under 19 U.S.C. § 1514(a). Mitsubishi, 44 F.3d at 977 (Fed. Cir. 1994).

        Finally, assuming that Plaintiff’s protests suffered from none of the foregoing maladies,

Plaintiff would still need to prove that CBP denied its protests because jurisdiction pursuant to §

1581(a) must be predicated on the “denial of a protest.” 28 U.S.C. § 1581(a); see Zojirushi Am.

Corp. v. United States, Slip Op. 16-78, 2016 WL 4146418, at *9–10 (CIT Aug. 4, 2016). The

protest form, CBP Form 19, allows CBP to indicate that an importer’s protest has been

“Approved,” “Rejected as non-protestable,” “Denied in full,” or “Denied in part.” See Port of

Philadelphia Protest at item 18. An importer can seek an accelerated disposition of a protest and

if the protest “has not been allowed or denied in whole or in part within thirty days” following a

request for accelerated disposition, it is “deemed denied.” 19 U.S.C. § 1515(b). Despite

representing to the court on numerous occasions that CBP “denied” its protests, see, e.g., Compl.
Court No. 15-00072                                                                                           Page 8

¶¶ 32, 33, 36, CBP in fact “rejected” Plaintiff’s challenges “as non-protestable,” see Port of

Mobile Protests at item 18. Plaintiff does not allege that its “rejected” protests were later denied

or deemed denied. In fact, Plaintiff successfully petitioned to have set aside the only protest

denial it received. Decision Letter 3. Without a denial of Plaintiff’s protests, this court has no

jurisdiction under § 1581(a).

          For these reasons, the court grants Defendant’s motion to dismiss Plaintiff’s first claim

for lack of subject matter jurisdiction.

    II.      Plaintiff’s Alternative Claim Fails as a Matter of Law.

          Defendant also moves for judgment on the pleadings pursuant to USCIT R. 12(c) with

respect to Plaintiff’s claim that Commerce’s April 4, 2013 liquidation instructions were

“contrary to law as written and enforced,” in violation of the Administrative Procedure Act

(“APA”). Compl. ¶ 40. 1 As a threshold matter, the court has jurisdiction to hear Plaintiff’s

alternative claim under 28 U.S.C. § 1581(i). Carbon Activated Corp. v. United States, 791 F.3d
1312, 1317 (Fed. Cir. 2015) (a party bringing a challenge to “Commerce’s erroneous instructions

to Customs . . . c[an] invoke § 1581(i) jurisdiction.”). For the following reasons, the court grants

Defendant’s motion for judgment on the pleadings.

          Commerce’s April 4, 2013 liquidation instructions to CBP directed that “all unliquidated

entries of CORE from Germany entered, or withdrawn from warehouse, for consumption on or

after 02/14/2012 should be liquidated without regard to antidumping duties.” Admin. Message

No. 3094301 ¶ 3 (emphasis added). These instructions were in accordance with the statutory

provision regarding the revocation of an antidumping duty order. 19 U.S.C. § 1675(d)(3)

1
         Pursuant to the APA, this court shall “hold unlawful and set aside agency action” found to be arbitrary, in
excess of statutory authority, or otherwise not in accordance with law, among other reasons. 5 U.S.C. § 706(2)(A)-
(F).
Court No. 15-00072                                                                                       Page 9

(stating that a “determination to revoke an order . . . shall apply with respect to unliquidated

entries”). Citing no relevant authorities, Plaintiff insists that because it filed protests, “the

liquidation process was not yet final, and the entries remained ‘unliquidated’ within the meaning

of the law and within the scope of Commerce’s liquidation instructions.” Compl. ¶ 37. 2

        In rejecting Plaintiff’s protests, CBP determined that “unliquidated” and “a liquidation

that has occurred but is not final” because of a pending protest are “different legal concepts.”

Decision Letter 4. The court agrees. Indeed, Plaintiff’s claim is premised on the unfounded

conflation of distinct provisions. It is true that liquidation is the “final” computation of duties on

an entry. 19 C.F.R. § 159.1. At the time of entry, an importer makes a provisional deposit at the

estimated antidumping duty rate, 19 U.S.C. § 1505(a), and then has the opportunity to request a

review of the applicable order and rate, 19 U.S.C. § 1675(a)(1). Liquidation is the final

computation of duties in that it follows the provisional deposit and any subsequent adjustments

to the applicable rate and is meant to establish the ultimate sum owed by the importer. By

contrast, it is certain “decisions of the Customs Service” which are not “final and conclusive”

when timely and validly protested. 19 U.S.C. § 1514(a) (emphasis added). The fact that a valid

and meritorious protest concerning a decision of CBP can lead to a modification of the “final”

computation of duties does not mean that no “final” computation of duties has taken place.

        Plaintiff merges the two concepts to arrive at its claim that its entries were “unliquidated”

within the meaning of Commerce’s April 4, 2013 instructions. See Compl. ¶ 41. The term

“unliquidated” logically extends to those entries for which there has been no final computation of

duties, i.e., no liquidation. However, Plaintiff’s claim that the term “unliquidated” also extends

2
          Plaintiff argues that Koyo Corp. v. United States, 497 F.3d 1231 (Fed. Cir. 2007) and CBP ruling HQ
H030656 support its position. See Port of Mobile Protests, Attachment at 8. However, neither decision concerned
instructions directing liquidation of “unliquidated” entries.
Court No. 15-00072                                                                             Page 10

to its previously-liquidated entries rests on Plaintiff’s legal conclusion that it is so. The court

gives such legal conclusions no weight. Instead, for reasons discussed below, the court holds

that the term “unliquidated,” as used in Commerce’s April 4, 2013 instructions, excludes

Plaintiff’s entries.

        Commerce’s instructions were issued in light of the revocation of the applicable

antidumping duty order following a five-year “sunset” review by the ITC. Admin. Message No.

3094301 ¶ 1. “The focus in such ‘sunset’ reviews is entirely prospective, with the key inquiry

being whether termination of suspended investigations ‘would be likely to lead’ to the dumping

of foreign imports into a particular market in the future.” Comm. for Fairly Traded Venezuelan

Cement v. United States, 372 F.3d 1284, 1286 (Fed. Cir. 2004) (citing 19 U.S.C. §

1675(c)(1)(C)). Even though the effective date of the revocation was retroactive, interpreting the

term “unliquidated” to mean “not previously-liquidated” ensures that the effect of the sunset

review “is entirely prospective,” in that it applies only to future liquidations. See Canadian

Wheat Bd. v. United States, 641 F.3d 1344, 1350 (Fed. Cir. 2011) (explaining that liquidating

“unliquidated entries” is a “prospective action[]”). Accordingly, reading Commerce’s

instructions to exclude Plaintiff’s entries comports with the purpose of the sunset review, since

those entries were previously liquidated in accordance with the order then in effect.

        Commerce’s April 4, 2013 instructions, therefore, are not only in strict accordance with

the wording of 19 U.S.C. § 1675(d)(3), but also appear to be in accordance with the purpose of

the statutory scheme and with the court’s understanding of the term “unliquidated” as meaning

“not previously-liquidated.” See, e.g., Canadian Wheat Bd., 641 F.3d at 1350 (contrasting

directions to liquidate “unliquidated entries” with directions to “invalidate antidumping duties

that had already been liquidated”); Timken Co. v. United States, 21 CIT 889, 891, 972 F. Supp.
Court No. 15-00072                                                                                           Page 11

702, 703 (1997), aff'd sub nom. Koyo Seiko Co. v. United States, 155 F.3d 574 (Fed. Cir. 1998)

(contrasting “previously-liquidated” entries with “unliquidated entries”). Moreover, Plaintiff

cites no authority supporting its interpretation of the term “unliquidated” and has failed to place

any material facts in dispute. The court, therefore, finds that Defendant is entitled to judgment as

a matter of law. 3

                                                 CONCLUSION

         For the forgoing reasons, Defendant’s motion to dismiss Plaintiff’s first claim for lack of

subject matter jurisdiction is granted and Defendant’s motion for judgment on the pleadings with

respect to Plaintiff’s alternative claim is granted.

                                                                                         /s/ Richard W. Goldberg
                                                                                             Richard W. Goldberg
                                                                                                     Senior Judge

Dated: October 25, 2016
New York, New York

3
          Even if Plaintiff were correct that entries remain “unliquidated” when “subjected to valid protests,”
Plaintiff’s claim fails on its own terms. See Compl. ¶ 41. The court has already held that Plaintiff’s protests were
untimely and that the November 16 and December 21, 2012 liquidations involved no protestable CBP decisions.
See supra Part I. The court cannot now find that those same liquidations were non-final (and Plaintiff’s entries
“unliquidated”) by virtue of Plaintiff’s invalid protests.