Court Opinion

ID: 4194292
Source: CourtListenerOpinion
Date Created: 2017-08-08 21:02:20.181338+00
Date Added: 2024-06-11T14:40:00.077990
License: Public Domain

Slip Op. 17 - 101

            UNITED STATES COURT OF INTERNATIONAL TRADE

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INMAX SDN. BHD. and INMAX INDUSTRIES   :
SDN. BHD.,
                         Plaintiffs,   :

                    v.                         :

UNITED STATES,                                 :    Court No. 17-00205
                                Defendant,
                  -and-                        :

MID CONTINENT STEEL & WIRE, INC.,              :

              Intervenor-Defendant.    :
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                               Memorandum & Order

[Plaintiffs’ application(s) for immediate injunctive relief
 from cash deposits on entries subject to antidumping-duty
 order pending completion of administrative and judicial
 reviews of the basis therefor denied.]

                                                    Dated: August 8, 2017

     Gregory S. Menegaz, J. Kevin Horgan, and Alexandra H. Salzman,
deKieffer & Horgan, PLLC, Washington, D.C., for the plaintiffs.

     Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, Washington,
D.C., for the defendant. With him in opposition Chad A. Readler,
Acting Assistant Attorney General, Jeanne E. Davidson, Director,
and Patricia M. McCarthy, Assistant Director.

     Adam H. Gordon, The Bristol Group PLLC, Washington, D.C., for
the intervenor-defendant.

           AQUILINO, Senior Judge: The above-encaptioned plaintiffs

commenced this action contesting Certain Steel Nails from Malaysia:

Final   Results   of     the    Changed   Circumstances   Review   (“CCR”),
Court No. 17-00205                                                Page 2

published at 82 Fed.Reg. 34476 (July 25, 2017) by the International

Trade Administration, U.S. Department of Commerce (“ITA”), as

discussed   in   the   agency’s   accompanying   issues   and   decision

memorandum (“IDM”) dated July 17, 2017.     In thereby invoking this

court’s jurisdiction pursuant to 28 U.S.C. §1581¥c¦, on August 2,

2017 the plaintiffs interposed an application for a temporary

restraining order and a motion for a preliminary injunction,

enjoining the defendant

     until the final and conclusive court decision in this
     litigation from requiring Inmax Industries Sdn. Bhd. to
     pay the increased antidumping cash deposit rate of 39.35%
     currently assigned to Inmax Sdn Bhd. instead of the
     previous 2.66% cash deposit rate on imports assigned to
     Inmax Industries lawfully by the [ITA] at the conclusion
     of the original investigation[,]

to quote from the latter’s proposed order.

            To be granted such extraordinary, interim, equitable

relief, a movant must show (1) immediate and irreparable harm, (2)

likelihood of success on the merits, (3) the balance of hardship on

all parties favors it, and (4) such relief is in the public

interest.   See, e.g., FMC Corp. v. United States, 3 F.3d 424, 427

(Fed.Cir. 1993); Zenith Radio Corp. v. United States, 710 F.2d 806,

809 (Fed.Cir. 1983). In assessing such requirements, the court may

employ a “sliding scale”, which means that not every one must be

established to the same degree, and a strong showing on one can
Court No. 17-00205                                              Page 3

overcome a weaker showing on others. Corus Group PLC v. Bush, 26
CIT 937, 942, 217 F. Supp. 2d 1347, 1353 (2002), aff’d, 352 F.3d 1351

(Fed.Cir. 2003), citing FMC Corp., 3 F.3d at 427. “Central to the

movant’s burden are the likelihood of success and irreparable harm

factors.” Sofamor Danek Grp., Inc. v. DePuy-Motech, Inc., 74 F.3d
1216, 1219 (Fed.Cir. 1996).

                                  I

           Here,   the   plaintiffs   claim   “unique”   circumstances

necessitate the relief prayed for.       By way of background, they

explain that they are Malaysian exporters of certain steel nails to

the United States subject to ITA’s Certain Steel Nails From the

Republic of Korea, Malaysia, the Sultanate of Oman, Taiwan and the

Socialist Republic of Vietnam: Antidumping Duty Orders, 80 Fed.Reg.

39994 (July 13, 2015).      The plaintiffs apparently are related

companies, but during the underlying agency investigation they were

not “collapsed” pursuant to ITA’s regulation thereon into a single

entity.1   The plaintiffs intimate that this may have been due to

the fact that only one of them was commercially exporting subject

       1
          See 19 C.F.R. §351.401(f)(1) ("the Secretary will treat
two or more affiliated producers as a single entity where those
producers have production facilities for similar or identical
products that would not require substantial retooling of either
facility in order to restructure manufacturing priorities and the
Secretary concludes that there is a significant potential for the
manipulation of price or production").
Court No. 17-00205                                                        Page 4

merchandise     during   the   investigation      and    point    out   that   the

domestic petitioner essentially waived argument over collapsing

during the investigation.

              When that investigation’s final results were published,

Inmax Sdn. Bhd. received the 39.35 percent antidumping-duty rate as

a result of application of total adverse facts available, and Inmax

Industries, not individually investigated, was subjected to the

amended “all others” rate of 2.66 percent.           As a result of the CCR,

however, ITA collapsed the two entities into one and subjected

both, as one, to the 39.35 percent cash deposit rate.

              The plaintiffs now contend immediate relief is necessary

to prevent irreparable harm in that they would lose their right to

obtain meaningful judicial review with respect to the cash deposits

for entries of merchandise before the completion of the first ITA

administrative review, which they anticipate will be in December

2017    and   during   which   the    agency   has      already   preliminarily

determined a margin for them as collapsed entities of 1.03 percent,

and they would thereby lose any benefit of a favorable ruling by

the court. They aver that, upon learning of the CCR final results,

Inmax    Industries      ceased      production    and     forewent     business

opportunities, but also that that entity has shipments en route to

the United States that will incur the “extreme high margin” because
Court No. 17-00205                                                          Page 5

they   cannot    be     redirected    in   a    cost-effective      way,   and   the

plaintiffs complain they are unable to finance the nearly $4

million in cash deposits that would be required until completion of

the first administrative review.               See Plaintiffs’ Application, p.

10.

            As    for    likelihood    of      success   on   the    merits,     the

plaintiffs argue the initiation of the CCR

       [wa]s based upon factors already known and verified in
       the investigation and well prior to the Department’s
       final determination in the investigation. No new facts
       or circumstances exist from the investigation. Nothing
       in fact changed. The Department’s cost verification
       report from the original investigation observed expressly
       both “production and sales [by Inmax Industries] had
       commenced as of the date of the cost verification.”[ ]
       Accordingly, the Department had no basis to find a
       changed circumstance.

Id. at 14-15, referencing Memorandum from Taija A. Slaughter to

Neal M. Halper regarding “Verification of Inmax Sdn. Bhd. in the

Antidumping Investigation of Certain Steel Nails from Malaysia,”

dated February 17, 2015, page 3.

            As to balance of hardships, the plaintiffs contend that

no other party will suffer hardship and that the current schedule

anticipates      completion    of    the   first    administrative     review    in

December 2017; hence, at most, injunction would merely “postpone a

potential new cash deposit rate for the companies” which only
Court No. 17-00205                                                        Page 6

amounts to an “inconvenience” to the United States.                  Id. at 20,

citing SKF USA, Inc. v United States, 28 CIT 170, 175, 316 F.

Supp.2d 1322, 1328 (2004).

            Lastly, the plaintiffs point to the steadfast judicial

position on the subject of the public interest as being best served

when the trade laws of the United States are accurately and fairly

administered.      Id. at 21, referencing, e.g., Chilean Nitrate Corp.

v. United States, 11 CIT 538, 540 (1987).

                                         II

            The defendant responds that the plaintiffs submit nothing

to substantiate their claim of irreparable harm and “[a]ttorney

argument is not evidence” thereof, Def’s Resp. at 5, quoting Icon

Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1043 (Fed.

Cir.    2017),    and   that   because    the   plaintiffs    seek   to   enjoin

collection of cash deposits rather than liquidation, there is no

basis for presuming harm as a matter of law here, id.            See also id.

at 6 ("Congress did not intend that the ordinary operation of the

antidumping duty law -- which includes the collection of estimated

duties in the form of cash deposits, see, e.g., 19 U.S.C. §

1673d(c)(1)(B)(ii) -- could be considered irreparable harm, or it

would    not     have   limited   section       1516a(c)(2)   injunctions    to

liquidation"), referencing Hohn v. United States, 524 U.S. 236, 249
Court No. 17-00205                                                       Page 7

(1998), and Shandong Dongfang Bayley Wood Co. v. United States, 41

CIT ___, Slip Op. 17-77 at 7, 2017 WL 2838344 at *3 (July 3, 2017)

(rejecting attempt to enjoin collection of cash deposits after

preliminary determination for want of residual jurisdiction because

plaintiff “ma[de] no argument that this is imminent harm to [it]

showing that the ordinary means of obtaining judicial review of a

Commerce determination will be inadequate in the circumstances of

this litigation”).         The defendant also contends that the alleged

“harm”     is   actually    the   result    of   plaintiffs’   own   business

decision(s), and that good cause did exist to initiate and conduct

the CCR, as indicated in the IDM.                See generally Defendant’s

Response at 2-3, quoting IDM at 5 (citing petitioner’s CCR Request

at   Ex.   4,   attached     as   Ex.   1   to   Def’s   Resp.),   and   at   6.

Consequently, the defendant argues the plaintiffs are unlikely to

succeed on the merits and that “maintaining a maximum level of

security for the unliquidated entries would serve broadly the

public interest of revenue collection.” Id. at 9, quoting National

Fisheries Institute, Inc. v. United States Bureau of Customs &

Border Protection, 34 CIT 1371, 1377, 751 F. Supp. 2d 1318, 1325

(2010).
Court No. 17-00205                                           Page 8

                               III

           USCIT Rule 65(c) requires a movant for extraordinary,

interim, equitable relief to post security in an amount that would

be “proper to pay the costs and damages sustained by any party

found to have been wrongfully enjoined or restrained.”       Having

considered all the papers submitted herein, this court is not

persuaded that disregard of this long-standing requirement, which,

in effect, is what the plaintiffs seek, would be appropriate.

Accordingly, the specific relief for which they now plead must be,

and it hereby is, denied.

           So ordered.

Dated:   New York, New York
         August 8, 2017

                                     /s/ Thomas J. Aquilino, Jr.
                                             Senior Judge