Court Opinion

ID: 9900922
Source: CourtListenerOpinion
Date Created: 2023-11-20 19:01:46.757942+00
Date Added: 2024-06-11T09:21:22.508148
License: Public Domain

Slip Op. 23-

                UNITED STATES COURT OF INTERNATIONAL TRADE

 COMMITTEE OVERSEEING ACTION
 FOR LUMBER INTERNATIONAL TRADE
 INVESTIGATIONS OR NEGOTIATIONS,

                 Plaintiff,

          and

 FONTAINE INC., ET AL.,

                 Consolidated Plaintiffs,
                                              Before: Mark A. Barnett, Chief Judge
                                              Consol. Court No. 19-00122
           v.

 UNITED STATES,

                 Defendant,

          and

 FONTAINE INC., ET AL.,

                 Defendant-Intervenors.

                                OPINION AND ORDER

[Granting motion to reinstate exclusion from countervailing duty order.]

                                                              Dated: November 20, 2023

Andrew W. Kentz, Sophia J.C. Lin, Jessica M. Link, Nathaniel Maandig Rickard,
Whitney M. Rolig, Zachary J. Walker, and David A. Yocis, Picard Kentz & Rowe LLP, of
Washington, DC, for Plaintiff Committee Overseeing Action for Lumber International
Trade Investigations or Negotiations.

Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant United States. With her
on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, and
Patricia M. McCarthy, Director. Of counsel on the brief was Nikki Kalbing, Assistant
Consol. Court No. 19-00122                                                          Page 2

Chief Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance,
U.S. Department of Commerce, of Washington, DC.

Yohai Baisburd, Jonathan M. Zielinski, and James E. Ransdell, Cassidy Levy Kent
(USA) LLP, of Washington, DC, for Defendant-Intervenor Scierie Alexandre Lemay &
Fils Inc.

Edward M. Lebow, Haynes and Boone, LLP, of Washington, DC, for Defendant-
Intervenors Les Produits Forestiers D&G Ltée and Marcel Lauzon Inc.

Rajib Pal, James Mendenhall, and Justin R. Becker, Sidley Austin LLP, of Washington,
DC, for Defendant-Intervenors North American Forest Products Ltd., Parent-Violette
Gestion Ltée, and Le Groupe Parent Ltée.

       Barnett, Chief Judge: This matter is before the court on motion by defendant-

intervenors Scierie Alexandre Lemay & Fils Inc. (“Lemay”), Les Produits Forestiers D&G

Ltée (“D&G”), Marcel Lauzon Inc. (“MLI”), and North American Forest Products Ltd. and

its cross-owned affiliates Parent-Violette Gestion Ltée and Le Groupe Parent Ltée

(together, “NAFP”) (collectively, “movants”) for relief from a final judgment pursuant to

U.S. Court of International Trade (“CIT”) Rule 60(b)(5). Mot. to Reinstate Exclusion

from Countervailing Duty Order Pending Resolution of Litigation (“Mot.”), ECF No. 222.

Plaintiff, Committee Overseeing Action for Lumber International Trade Investigations or

Negotiations (“the Coalition”), opposes the motion. Pl.’s Resp. in Opp’n to [Mot.] (“Pl.’s

Resp.”), ECF No. 223. Defendant, United States (“the Government”), does not oppose

the motion or the terms of the proposed order. Def.’s Resp. to the Ct.’s Order to

Respond to [Mot.] (“Def.’s Resp.”), ECF No. 228. For the following reasons, the court

grants the motion.
Consol. Court No. 19-00122                                                           Page 3

                                       BACKGROUND

       At issue in this case is the U.S. Department of Commerce’s (“Commerce” or “the

agency”) final results in the countervailing duty (“CVD”) expedited review of certain

softwood lumber products from Canada. See Certain Softwood Lumber Prods. From

Canada, 84 Fed. Reg. 32,121 (Dep’t Commerce July 5, 2019) (final results of CVD

expedited review) (“Final Results”), ECF No. 99-5. 1 In the Final Results, and relevant to

this motion, Commerce calculated de minimis rates for D&G, MLI, Lemay, and NAFP. 2

84 Fed. Reg. at 32,122. Commerce therefore stated that it would instruct U.S. Customs

and Border Protection (“CBP”) “to discontinue the suspension of liquidation and the

collection of cash deposits of estimated countervailing duties on all shipments of

softwood lumber produced and exported by” those companies that were entered on or

after July 5, 2019; “liquidate, without regard to countervailing duties, all suspended

entries of shipments of softwood lumber produced and exported by” those companies;

and “refund all cash deposits of estimated countervailing duties collected on all such

shipments.” Id. In other words, effective July 5, 2019, the Final Results provided a

basis for excluding the movants from the CVD Order. See id.

       Presently, Commerce’s Final Results are the subject of five judicial opinions; four

from this court and one from the U.S. Court of Appeals for the Federal Circuit (“Federal

Circuit”). See Comm. Overseeing Action for Lumber Int’l Trade Investigations or

1 The Final Results followed Commerce’s issuance of the underlying order, styled as

Certain Softwood Lumber Products From Canada, 83 Fed. Reg. 347 (Dep’t Commerce
Jan. 3, 2018) (am. final affirmative CVD determination and CVD order) (“CVD Order”).
2 Commerce also calculated a de minimis rate for Roland Boulanger & Cie Ltée and its

cross-owned affiliates, but they are not a party to this litigation.
Consol. Court No. 19-00122                                                          Page 4

Negots. v. United States (“Coalition I”), 43 CIT __, 393 F. Supp. 3d 1271 (2019)

(vacating a temporary restraining order requested by Plaintiff that had barred CBP from

liquidating unliquidated entries of softwood lumber produced or exported by Canadian

companies that received reduced or de minimis rates in the Final Results and denying

the Coalition’s corresponding request for a preliminary injunction); Comm. Overseeing

Action for Lumber Int’l Trade Investigations or Negots. v. United States (“Coalition II”),

43 CIT __, 413 F. Supp. 3d 1334 (2019) (denying the Government’s motion to dismiss

and finding jurisdiction pursuant to 28 U.S.C. § 1581(i)); Comm. Overseeing Action for

Lumber Int’l Trade Investigations or Negots. v. United States (“Coalition III”), 44 CIT __,

483 F. Supp. 3d 1253 (2020) (remanding the Final Results for Commerce to reconsider

the statutory basis for its promulgation of 19 C.F.R. § 351.214(k) (2020) 3 and conduct of

CVD expedited reviews); Comm. Overseeing Action for Lumber Int’l Trade

Investigations or Negots. v. United States (“Coalition IV”), 45 CIT __, 535 F. Supp. 3d

1336 (2021) (following remand, vacating 19 C.F.R. § 351.214(k) and vacating,

prospectively, Commerce’s Final Results); Comm. Overseeing Action for Lumber Int’l

Trade Investigations or Negots. v. United States, 66 F.4th 968 (Fed. Cir. 2023)

3 Effective October 20, 2021, subsection (k) was redesignated as subsection (l) without

material change. See Regulations to Improve Admin. and Enforcement of Antidumping
and Countervailing Duty Laws, 86 Fed. Reg. 52,300, 52,371, 52,373–74 (Sept. 20,
2021). For consistency with prior proceedings in this case, the court refers to 19 C.F.R.
§ 351.214(k). Section 351.214 governs new shipper reviews. Subsection (k) permits a
respondent to “request a review . . . within 30 days of the date of publication in the
Federal Register of the [CVD] order” if that respondent was not “select[ed] for individual
examination” or “accept[ed] as a voluntary respondent” in a CVD investigation in which
Commerce “limited the number of exporters or producers to be individually examined.”
Id. § 351.214(k)(1).
Consol. Court No. 19-00122                                                          Page 5

(“Coalition V”) (reversing and remanding Coalition IV after finding statutory authority for

19 C.F.R. § 351.214(k)).

       In the judgment accompanying Coalition IV, the court ordered Commerce to

“issue a Timken-like Notice rescinding the [Final Results], consistent with the

requirements set forth in 19 U.S.C. § 1516a(c)(1); reinstate the excluded companies in

the CVD Order prospectively; and, for all companies that were covered by the [Final

Results], impose a cash deposit requirement based on the all-others rate from the

investigation or the company-specific rate determined in the most recently completed

administrative review in which the company was reviewed.” [CIT] J., ECF No. 194. 4

Commerce issued a corresponding notice and instructions to CBP, with an effective

date of August 28, 2021. See Certain Softwood Lumber Prods. From Canada, 86 Fed.

Reg. 48,396 (Dep’t Commerce Aug. 30, 2021) (notice of ct. decision not in harmony

with the [Final Results]; notice of rescission of [Final Results]; notice of am. cash

deposit rates) (“Notice of Ct. Decision”); Def.’s Resp., Ex. 1 (CBP Message No.

1244401). In the notice, Commerce explained that the agency was “reinstating the CVD

Order” for the movants and “reassigning the cash deposit rate for the companies

covered by the [Final Results].” Notice of Ct. Decision, 86 Fed. Reg. at 48,396.

       The CIT’s judgment was later reversed by the Federal Circuit. Coalition V, 66

F.4th at 971. While litigation concerning other aspects of the Final Results remains

4 Section 1516a(c)(1) requires Commerce to publish in the Federal Register “a notice of

a decision of the [CIT], or of the [Federal Circuit], not in harmony with [the underlying]
determination . . . within ten days from the date of the issuance of the court decision.”
19 U.S.C. § 1516a(c)(1). Such notice may be referred to as a “Timken Notice” pursuant
to Timken Co. v. United States, 893 F.2d 337, 341 (Fed. Cir. 1990).
Consol. Court No. 19-00122                                                           Page 6

pending, movants seek reinstatement of their exclusion from the CVD Order. Mot. at 1–

2.

                         JURISDICTION AND STANDARD OF REVIEW

      The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(i)(1)(D) (2018 &

Supp. II 2020).

      CIT Rule 60(b) permits the court, “[o]n motion and just terms,” to “relieve a party

or its legal representative from a final judgment, order, or proceeding” when “the

judgment has been satisfied, released, or discharged; it is based on an earlier judgment

that has been reversed or vacated; or applying it prospectively is no longer equitable.”

CIT Rule 60(b)(5). A motion filed pursuant to Rule 60(b)(5) “must be made within a

reasonable time.” CIT Rule 60(c)(1).

      For Rule 60(b)(5), “each of the provision’s three grounds for relief is

independently sufficient.” Horne v. Flores, 557 U.S. 433, 454 (2009). 5 The second

clause, which concerns a final judgment that “is based on an earlier judgment that has

been reversed or vacated,” CIT Rule 60(b)(5), “is limited to cases in which the present

judgment is based on the prior judgment in the sense of claim or issue preclusion,” Pirkl

v. Wilkie, 906 F.3d 1371, 1381 n.6 (Fed. Cir. 2018) (quoting 11 Charles Alan Wright et

al., Federal Practice and Procedure § 2863 (3d ed. 2012)). In other words, because a

second final judgment that is based on an earlier judgment “will stand as res judicata”

5 While Horne addresses Federal Rule of Civil Procedure 60(b), CIT Rule 60(b) “is

identical and the court may refer for guidance to the rules of other courts.” United
States v. Univar USA, Inc., 40 CIT __, __, 195 F. Supp. 3d 1312, 1317 (2016) (citing
CIT Rule 1).
Consol. Court No. 19-00122                                                            Page 7

even though “the first judgment [was] subsequently reversed,” United States v. Canex

Int’l Lumber Sales Ltd., 35 CIT 1025, 1028 (2011) (quoting Reed v. Allen, 286 U.S. 191,

199 (1932)), Rule 60(b)(5) provides a procedural mechanism for litigants to obtain relief

from the second judgment.

         The third clause of Rule 60(b)(5) is principally applied to injunctions. See Wright

et al., § 2863; cf. Invenergy Renewables LLC v. United States, 44 CIT __, __, 450

F.Supp.3d 1347, 1361–63 (2020) (denying motion to dissolve a preliminary injunction

when the defendant failed to show changed circumstances or inequity). This clause is

not, however, limited to injunctions; it “applies to any judgment that has prospective

effect,” Wright et al., § 2863, and “is rooted in the ‘traditional power of a court of equity

to modify its decree in light of changed circumstances,’” Tapper v. Hearn, 833 F.3d 166,

170 (2nd Cir. 2016) (quoting Frew ex rel. Frew v. Hawkins, 540 U.S. 431, 441 (2004)).

         Regardless of the basis, any relief provided by these rules is discretionary. See

Lazare Kaplan Int’l, Inc. v. Photoscribe Tech., Inc., 714 F.3d 1289, 1295 (Fed. Cir.

2013).

                                         DISCUSSION

  I.     The Second Clause of Rule 60(b)(5) is Not an Appropriate Basis for Relief

         Movants contend that relief is merited pursuant to the second clause of Rule

60(b)(5) because the court “Orders” directing Commerce to reinstate the companies in

the CVD Order and “impose cash deposit requirements were ‘based on an earlier

judgment that has been reversed’ by the [Federal Circuit].” Mot. at 1; see also id. at 5.

In so arguing, however, movants misconstrue the operation and purpose of this clause.
Consol. Court No. 19-00122                                                          Page 8

As discussed above, Rule 60(b)(5) provides for relief from a final judgment that itself

was “based on an earlier judgment that has been reversed or vacated,” CIT Rule

60(b)(5), and would, without the benefit of the rule, remain in effect, see Pirkl, 906 F.3d

at 1381 n.6; Canex Int’l, 35 CIT at 1028. That is not the case here. Movants do not

seek relief from a judgment that was based on a distinct, now-reversed, judgment;

instead, movants seek relief from the judgment entered in this case that was

subsequently reversed by the Federal Circuit. 6 Accordingly, the second clause of Rule

60(b)(5) is not an appropriate basis for granting this motion.

 II.   The Third Clause of Rule 60(b)(5) Provides an Appropriate Basis for Relief

       In the alternative, movants seek relief on the basis that enforcement of the

court’s judgment “is no longer equitable.” Mot. at 7 (quoting CIT Rule 60(b)(5)).

Movants contend that the Federal Circuit’s reversal of the judgment constitutes changed

circumstances meriting relief; there is no undue administrative burden in effectuating

relief; and denying the instant motion would effectively grant the Coalition the

preliminary injunction suspending liquidation the court previously denied. Id. at 6–8

(citing Coalition I, 393 F. Supp. 3d at 1278). Movants seek relief on this basis in the

6 Movants appear to separate the actions the court ordered Commerce to take from the

judgment in which the court set out those orders, such that the latter “orders” are based
on an “earlier judgment” that has since been reversed. See Mot. at 1, 5. There is no
such distinction, however, because the orders and the judgment are one and the same.
See [CIT] J. For its part, the Government characterizes the Federal Circuit’s “judgment”
as “reversing or vacating” “an earlier judgment” for purposes of applying this provision.
Def.’s Resp. at 8. While the Government’s characterization is accurate, the second
clause of Rule 60(b)(5) does not apply to these circumstances.
Consol. Court No. 19-00122                                                          Page 9

alternative on the view that any relief from the judgment would be prospective only. See

id. at 7 n.3.

       The Government agrees that the Federal Circuit’s decision in Coalition V

provides the requisite changed circumstances because this court’s judgment no longer

authorizes Commerce to suspend liquidation and collect or retain cash deposits on any

“shipments of softwood lumber produced and exported by D&G, MLI, NAFP, and

Lemay.” Def.’s Resp. at 8–9. The Government therefore contends that the movants

“should not be included” in the CVD Order and does not oppose this court ordering

reinstatement of the exclusion. Id. at 9. The Government acknowledges that resolution

of the remaining claims “may result in changes to the margins initially determined for

[the movants], in which case Commerce will give effect to those changes once they are

subject to a final court decision.” Id.

       The court agrees that movants are entitled to relief on the basis that applying the

judgment “prospectively is no longer equitable.” CIT Rule 60(b)(5). This provision

“provides a means by which a party can ask a court to modify or vacate a judgment or

order if ‘a significant change either in factual conditions or in law’ renders continued

enforcement ‘detrimental to the public interest.’” Horne, 557 U.S. at 447 (quoting Rufo

v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 384 (1992)). The Federal Circuit’s

reversal of this court’s judgment constitutes a sufficient change in the factual and legal

basis for retaining movants in the CVD Order, and the Government’s consent to the

request for relief demonstrates that continued enforcement of this court’s judgment

following reversal by the Federal Circuit is not necessary to protect the public interest.
Consol. Court No. 19-00122                                                         Page 10

       The Coalition’s arguments to the contrary are not persuasive. Plaintiff contends

that movants failed to establish that continued enforcement of the judgment results in

inequity. Pl.’s Resp. at 5–6 (citing Ashland Oil, Inc. v. Delta Oil Prods. Corp., 806 F.2d

1031, 1033–34 (Fed. Cir. 1986)). In Ashland, the Federal Circuit, applying the law of

the Seventh Circuit, found that the plaintiff was not entitled to relief pursuant to Federal

Rule of Civil Procedure 60(b)(5) or (6) because it had not shown that a change in the

law meant that an earlier judgment would prejudice the plaintiff in subsequent litigation.

806 F.2d at 1033. The appellate court noted that the plaintiff had successfully defended

against an estoppel claim in another lawsuit and, thus, had not shown that “continued

operation of the [] judgment will result in inequity.” Id. at 1033–34. The circumstances

here, however, are different: imports of subject merchandise produced and exported by

movants are currently subject to cash deposits of estimated countervailing duties and,

potentially, liquidation at those rates. See Mot. at 6 n.2. Accordingly, continued

enforcement of the now-reversed judgment has a direct and inequitable effect.

       The court must now decide whether movants are entitled to relief as of the

August 28, 2021, effective date of the movants’ reinstatement in the CVD Order or only

from the date of this Opinion and Order. The court finds that relief may be effective as

of August 28, 2021.

       While the rule refers to relief from a final judgment when “applying it

prospectively is no longer equitable,” CIT Rule 60(b)(5), such language has been

interpreted to mean that relief is limited to “the class of judgments having prospective

application (sometimes referred to as ‘prospective force’),” Comfort v. Lynn Sch.
Consol. Court No. 19-00122                                                           Page 11

Comm., 560 F.3d 22, 28 (1st Cir. 2009). “[A] final judgment or order has prospective

application for purposes of Rule 60(b)(5) only where it is executory or involves the

supervision of changing conduct or conditions.” Tapper, 833 F.3d at 170–71 (citation

omitted). The court’s judgment was prospective for purposes of this rule. It not only

imposed the remedy of reinstating movants in the CVD Order prospectively but also

imposed an ongoing “cash deposit requirement based on the all-others rate from the

investigation or the company-specific rate determined in the most recently completed

administrative review in which the company was reviewed.” [CIT] J. at 2.

       In any case, the court sees no reason to limit movants’ relief to the date of this

Opinion and Order. As the court previously observed in its decision to vacate the Final

Results prospectively only, “[t]he interplay between the tripartite interests of domestic

producers, foreign exporters/producers, and the U.S. government is a characteristic of

trade cases and sets trade cases apart from other cases addressing the principle of

retroactivity in which the proponent of retroactivity has a direct stake in its application.”

Coalition IV, 535 F. Supp. 3d at 1362. In other words, when it comes to assessing the

appropriate scope of relief in a given circumstance, the court must account for the

distinctive way in which trade cases operate at both the administrative and judicial

levels. With respect to this motion, excluding movants from the CVD Order as of the

date of this Opinion and Order would require the same mechanism—a Federal Register

notice and set of Commerce instructions to CBP—as would excluding movants from the

CVD Order as of August 28, 2021. See Def.’s Resp. at 9 (explaining how Commerce

would effectuate relief). Given that the Federal Circuit reversed the very basis upon
Consol. Court No. 19-00122                                                         Page 12

which movants were included in the CVD Order as of August 28, 2021, the court will

afford movants relief as of that date. 7

                                   CONCLUSION AND ORDER

       In accordance with the foregoing, the court, after due deliberation, having

considered the motion to reinstate the exclusion from the CVD Order pending resolution

of this litigation, and all responses thereto, it is hereby:

       ORDERED that the motion (ECF No. 222) is GRANTED; it is further

       ORDERED that Commerce issue a Timken-like notice excluding Lemay, MLI,

D&G, and NAFP from Certain Softwood Lumber Products From Canada, 83 Fed. Reg.

347, 348 (Dep’t Commerce Jan. 3, 2018) (am. final affirmative CVD determination and

CVD order); it is further

       ORDERED that Commerce instruct CBP to discontinue the suspension of

liquidation and the collection of cash deposits of estimated countervailing duties on all

shipments of softwood lumber produced and exported by Lemay, MLI, D&G, and NAFP,

entered, or withdrawn from warehouse, for consumption on or after August 28, 2021,

7 CIT Rule 60(b)(6) provides for relief from a final judgment “for any other reason,” i.e.,

any reason other than the reasons listed in Rule 60(b)(1)–(5), “that justifies relief.” CIT
Rule 60(b)(6). Rule 60(b)(6) requires a party to demonstrate “extraordinary
circumstances.” Marquip, Inc. v. Fosber America, Inc., 198 F.3d 1363, 1370 (Fed. Cir.
1999) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380,
393 (1993)). “In simple English, the language of the ‘other reason’ clause, for all
reasons except the five particularly specified, vests power in courts adequate to enable
them to vacate judgments whenever such action is appropriate to accomplish justice.”
Klapprott v. United States, 335 U.S. 601, 614–15 (1949). Movants did not seek relief
pursuant to CIT Rule 60(b)(6), and the court finds that relief is merited pursuant to CIT
Rule 60(b)(5). Thus, the court need not address whether this provision provides an
additional avenue for relief.
Consol. Court No. 19-00122                                                         Page 13

the effective date of Certain Softwood Lumber Products From Canada, 86 Fed. Reg.

48,396 (Dep’t Commerce Aug. 30, 2021) (notice of ct. decision not in harmony with the

[Final Results]; notice of rescission of [Final Results]; notice of am. cash deposit rates);

and it is further

       ORDERED that Commerce instruct CBP to liquidate, without regard to

countervailing duties, all suspended entries of shipments of softwood lumber produced

and exported by Lemay, MLI, D&G, and NAFP.

                                                  /s/   Mark A. Barnett
                                                  Mark A. Barnett, Chief Judge

Dated: November 20, 2023
      New York, New York