Court Opinion

ID: 4880929
Source: CourtListenerOpinion
Date Created: 2021-09-02 15:01:05.460707+00
Date Added: 2024-06-11T08:03:09.827825
License: Public Domain

Case: 20-1044    Document: 48     Page: 1    Filed: 09/02/2021

     United States Court of Appeals
       for the Federal Circuit
                  ______________________

       WANXIANG AMERICA CORPORATION,
               Plaintiff-Appellant

                             v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2020-1044
                  ______________________

    Appeal from the United States Court of International
 Trade in No. 1:18-cv-00120-GSK, Judge Gary S.
 Katzmann.
                ______________________

                Decided: September 2, 2021
                  ______________________

      MICHAEL EDWARD ROLL, Roll & Harris LLP, Los Ange-
 les, CA, argued for plaintiff-appellant. Also represented by
 BRETT HARRIS, Washington, DC.

     STEPHEN CARL TOSINI, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee. Also repre-
 sented by JEFFREY B. CLARK, JEANNE DAVIDSON, PATRICIA
 M. MCCARTHY; NIKKI KALBING, United States Department
 of Commerce, Washington, DC.
                   ______________________
Case: 20-1044    Document: 48     Page: 2    Filed: 09/02/2021

 2         WANXIANG AMERICA CORPORATION     v. UNITED STATES

 Before MOORE, Chief Judge *, REYNA and TARANTO, Circuit
                        Judges.
 REYNA, Circuit Judge.
     Appellant Wanxiang America Corporation appeals a
 judgment of the United States Court of International Trade
 determining that it lacks jurisdiction over Appellant’s ac-
 tion under 28 U.S.C. § 1581(i), and that Appellant’s claims
 concerning a United States Department of Commerce
 memorandum are not ripe for judicial review because the
 memorandum is not a final agency action. We hold that
 the Court of International Trade does not have jurisdiction
 under § 1581(i) because Appellant could have sought relief
 under another subsection of § 1581, and Appellant has not
 shown that such relief would have been manifestly inade-
 quate. We do not reach the issue on finality of the memo-
 randum. Affirmed.
                         BACKGROUND
     This appeal involves a complicated and technical ad-
 ministrative record concerning how antidumping duties
 are determined, assessed, and collected. The record also
 involves Pre-Penalty and Penalty Notices issued to U.S.
 importers whom the U.S. Customs and Border Protection
 (“Customs”) has determined are in violation of U.S. cus-
 toms laws and regulations governing imports of goods that
 are subject to antidumping duties. The United States
 Court of International Trade (“CIT”) provided a thorough
 and detailed review of the record, so we forgo repeating
 that recitation here and reference only those aspects of the
 record that are pertinent to the main issue on appeal, the
 jurisdiction of the CIT.

     *    Chief Judge Kimberly A. Moore assumed the posi-
 tion of Chief Judge on May 22, 2021.
Case: 20-1044    Document: 48      Page: 3    Filed: 09/02/2021

 WANXIANG AMERICA CORPORATION     v. UNITED STATES          3

     Plaintiff-Appellant Wanxiang America Corporation
 (“Wanxiang”) is a U.S. importer for its parent corporation,
 Wanxiang Group Corporation (“Wanxiang Group”), an au-
 tomotive parts manufacturing company headquartered in
 China. J.A. 141. The history leading to this appeal in-
 volves additional Wanxiang Group subsidiaries, including
 two of its Chinese exporters, Wanxiang Import and Export
 Co., Ltd. (“Wanxiang IE”), and Wanxiang Qianchao Co.,
 Ltd. (“Wanxiang Q”). J.A. 42–43.
     From 1994 to 2001, Wanxiang Group and Wanxiang IE
 participated in annual administrative reviews conducted
 by the U.S. Department of Commerce (“Commerce”) that
 covered entries of first-generation wheel hub assemblies
 that were subject to a 1987 antidumping duty order on ta-
 pered roller bearings (“TRBs”) from China. J.A. 40–42; see
 Tapered Roller Bearings From the People’s Republic of
 China; Final Determination of Sales at Less Than Fair
 Value, 52 Fed. Reg. 19,748 (May 27, 1987) (“TRB Anti-
 dumping Duty Order”). As a result of those reviews, Wan-
 xiang Group and Wanxiang IE were assigned company-
 specific antidumping duty rates of zero percent. J.A. 41,
 60. This means that although imports from those two re-
 lated companies were subject to the TRB Antidumping
 Duty Order, they were found not to be dumping and, there-
 fore, received zero-percent dumping rates. Wanxiang Q, on
 the other hand, did not receive a company-specific anti-
 dumping duty rate because, as the record shows, it did not
 participate in the reviews. J.A. 60.
     Wanxiang later imported second- and third-generation
 wheel hub assemblies from Wanxiang Q, and on the cus-
 toms entry forms, it classified the entries as not subject to
 any antidumping duty order. See J.A. 43–44; Appellant’s
 Opening Br. 14. It is undisputed that a 2010 scope inquiry
 conducted by Commerce determined the second- and third-
 generation wheel hub assemblies were within the scope of
 the TRB Antidumping Duty Order. J.A. 574–75; see also
 Power Train Components, Inc. v. United States, 911 F.
Case: 20-1044    Document: 48     Page: 4   Filed: 09/02/2021

 4         WANXIANG AMERICA CORPORATION     v. UNITED STATES

 Supp. 2d 1338 (Ct. Int’l Trade 2013), aff’d mem., 565 F.
 App’x 899 (Fed. Cir. 2014).
     In June 2012, Customs initiated an audit of Wan-
 xiang’s entries of wheel hub assemblies during the five-
 year period of October 1, 2007, to September 30, 2012.
 J.A. 141–42, 575–76. Due to the large number of entries
 made by Wanxiang during the review period, Customs
 chose to analyze a statistical sample of 100 entries.
 J.A. 137, 142.
     During the audit, Wanxiang suggested that Wan-
 xiang Q was subject to Wanxiang Group’s zero-percent an-
 tidumping duty rate. 1 J.A. 44–45, 151. On February 25,
 2015, Commerce sent Customs a report titled “Guidance to
 CBP.” J.A. 59–60. The report was sent “[i]n response to
 [Customs’] inquiry” and was based on Commerce’s “review”
 of “documents previously sent to [Customs],” which had
 been submitted during the annual administrative review
 periods from 1994–2001. J.A. 60. Commerce explained
 that none of the documents from the relevant review peri-
 ods “clearly identified [Wanxiang Q] itself as being a man-
 ufacturer or exporter of subject merchandise.”          Id.
 Commerce further confirmed that upon its examination of
 the records from the reviews, “no evidence . . . suggested
 that [Wanxiang Q] exported the subject merchandise dur-
 ing the relevant [periods of review].” Id.
     On September 2, 2015, Customs issued its final audit
 report, finding that some of the audited entries were im-
 ports of wheel hub assemblies from Wanxiang Q. See
 J.A. 143, 148–49, 577. But since Wanxiang Q did not

     1   It also appears that Wanxiang maintained, alter-
 natively, that it had no reason to believe that the newer-
 generation wheel hub assemblies were subject to the TRB
 Antidumping Duty Order.         See Appellant’s Opening
 Br. 7–15.
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 WANXIANG AMERICA CORPORATION    v. UNITED STATES          5

 participate in the relevant annual reviews (as indicated in
 the Guidance to CBP), it never received a company-specific
 dumping rate. J.A. 148–49. As a result, Customs deter-
 mined that the Wanxiang Q imports were subject to the
 China country-wide rate of 92.84% ad valorem, the rate ap-
 plicable to Chinese companies that otherwise did not re-
 ceive a company-specific rate.         Id.   Customs also
 determined, based on the sampling results and a projection
 over the sampling frame, that Wanxiang had underpaid
 dumping duties by a significant amount. J.A. 143, 148. Af-
 ter the final audit report was issued, representatives from
 Wanxiang and the Wanxiang Group met with the Secre-
 tary of Commerce and the Under Secretary of Commerce
 for International Trade to discuss the audit. J.A. 70.
      On May 25, 2016, Customs Liaison Unit placed a mem-
 orandum on the record (“CLU Memo”). J.A. 58. Three doc-
 uments were attached to the CLU Memo: (1) Commerce’s
 February 2015 Guidance to CBP; (2) a corporate organiza-
 tional chart provided by Wanxiang Group that was previ-
 ously attached to the Guidance; and (3) a June 2013
 announcement in which Commerce noted that two Wan-
 xiang Group subsidiaries 2 (but not Wanxiang Q) were sub-
 ject to the zero-percent rate. J.A. 58–64. The CLU Memo
 described the Guidance to CBP as providing guidance “re-
 garding the entities in the 1994–2001 administrative re-
 view periods that were entitled to the Wanxiang Group[’s]
 cash deposit rate” of zero percent. J.A. 58. The CLU Memo
 also stressed that the information provided therein did “not
 constitute new factual information on the record of this
 closed segment of the proceeding.” Id.
    Almost two years later, in January 2018, Customs is-
 sued a Pre-Penalty Statement notifying Wanxiang that it
 may be liable for paying lost revenue (antidumping duties)
 and a substantial penalty for misclassification of entries

    2   Those entities are not relevant to this appeal.
Case: 20-1044      Document: 48      Page: 6    Filed: 09/02/2021

 6           WANXIANG AMERICA CORPORATION      v. UNITED STATES

 and failure to pay antidumping duties. J.A. 107–10. In
 April 2019, Customs issued a Penalty Notice demanding
 that Wanxiang pay specific amounts in lost revenue and
 penalties. Appellant’s Opening Br. 20–21. Notably, Wan-
 xiang did not protest the Penalty Notice pursuant to
 19 U.S.C. § 1514, and Wanxiang has not made payment on
 the dumping duties or the penalty. Oral Arg. 7:40–59,
 http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20-
 1044_11032020.mp3. Instead, Wanxiang chose to chal-
 lenge the Penalty Notice by suing Commerce.
                          CIT ACTION
     On May 23, 2018, Wanxiang filed a complaint before
 the CIT, asserting jurisdiction under 28 U.S.C. § 1581(i)(2)
 and (4). 3 J.A. 37. Specifically, Wanxiang alleged that the

     3    Congress later amended 28 U.S.C. § 1581(i) to re-
 designate subparagraphs (1) through (4) as subparagraphs
 (1)(A) through (1)(D), respectively. See United States-Mex-
 ico-Canada Agreement Implementation Act, Pub. L.
 No. 116–113, § 423(a)(1), 134 Stat. 11, 65 (2020). The rele-
 vant § 1581(i) subsections, now (1)(B) and (1)(D), provide:
     (i) (1) In addition to the jurisdiction conferred
         upon the [CIT] by subsections (a)–(h) of
         [§ 1581] . . . , the [CIT] shall have exclusive ju-
         risdiction of any civil action commenced against
         the United States, its agencies, or its officers,
         that arises out of any law of the United States
         providing for— . . .
         (B) tariffs, duties, fees, or other taxes on the
             importation of merchandise for reasons
             other than the raising of revenue; . . . or
         (D) administration and enforcement with re-
             spect to the matters referred to in [§ 1581].
 28 U.S.C. § 1581(i).
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 WANXIANG AMERICA CORPORATION     v. UNITED STATES          7

 Guidance to CBP issued by Commerce violated Due Pro-
 cess and was otherwise contrary to law or unsupported by
 substantial evidence. J.A. 51–54. Wanxiang sought a re-
 mand for Commerce to “reconsider[]” whether Wanxiang Q
 was entitled to the Wanxiang Group zero-percent dumping
 rate. J.A. 55.
     The government moved to dismiss for lack of subject-
 matter jurisdiction. See Wanxiang Am. Corp. v. United
 States, 399 F. Supp. 3d 1323, 1330 (Ct. Int’l Trade 2019).
 The CIT granted the motion after concluding, among other
 things, that it lacked jurisdiction under § 1581(i) because
 the relief sought by Wanxiang “could have been available
 under a . . . § 1581(c) action.” Id. at 1331–32. The CIT held
 that because Wanxiang could have sought relief through
 § 1581(c), Wanxiang could not now assert residual jurisdic-
 tion through § 1581(i). Id. Wanxiang appeals the dismis-
 sal. We have jurisdiction under 28 U.S.C. § 1295(a)(5).
                         DISCUSSION
     We review the CIT’s grant of a motion to dismiss de
 novo. Juice Farms, Inc. v. United States, 68 F.3d 1344,
 1345 (Fed. Cir. 1995). This court must accept as true all
 well-pleaded factual allegations and draw all reasonable
 inferences in favor of the claimant. Hartford Fire Ins. Co.
 v. United States, 772 F.3d 1281, 1284 (Fed. Cir. 2014). A
 party invoking the CIT’s jurisdiction has the burden of es-
 tablishing that jurisdiction. Norsk Hydro Can., Inc.
 v. United States, 472 F.3d 1347, 1355 (Fed. Cir. 2006).
     This court has long held that § 1581(i) is a statute of
 residual jurisdiction that may not be invoked where juris-
 diction is or could have been available under any other sub-
 section of § 1581, unless such other relief would be
 manifestly inadequate. Miller & Co. v. United States,
 824 F.2d 961, 963 (Fed. Cir. 1987) (collecting cases); ac-
 cord, e.g., Ford Motor Co. v. United States, 688 F.3d 1319,
 1323 (Fed. Cir. 2012). Thus, when assessing jurisdiction
 under § 1581(i), we primarily consider (1) whether
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 8          WANXIANG AMERICA CORPORATION      v. UNITED STATES

 jurisdiction under a subsection other than § 1581(i) was
 available, and (2) if so, whether the remedy provided under
 that subsection is “manifestly inadequate.” Erwin Hymer
 Grp. N.A., Inc. v. United States, 930 F.3d 1370, 1375
 (Fed. Cir. 2019).
      As a threshold matter, we note that Wanxiang does not
 argue in its opening brief that relief under another subsec-
 tion of § 1581 would be manifestly inadequate. Nor did
 Wanxiang raise a “manifestly inadequate” argument at the
 CIT. Wanxiang, 399 F. Supp. 3d at 1331 n.10. Given these
 circumstances, we find that Wanxiang has waived or for-
 feited the argument that any other relief that may have
 been available to it was manifestly inadequate. See Op-
 tivus Tech., Inc. v. Ion Beam Applications S.A., 469 F.3d
 978, 989 (Fed. Cir. 2006) (“An issue not raised by an appel-
 lant in its opening brief is waived.” (citation and alterations
 omitted)); see also Indus. Chems., Inc. v. United States,
 941 F.3d 1368, 1373 n.3 (Fed. Cir. 2019) (deeming § 1581(i)
 argument waived on appeal where appellant did not raise
 issue before the CIT). Therefore, the only question we must
 decide is whether jurisdiction “is or could have been avail-
 able” under any other subsection of § 1581. Miller & Co.,
 824 F.2d at 963.
     We hold that the CIT lacks subject-matter jurisdiction
 under § 1581(i) because Wanxiang could have sought relief
 under another subsection of § 1581. In essence, Wanxiang
 is protesting having to pay antidumping duties and penal-
 ties on entries identified during the customs audit. See
 J.A. 55. But Wanxiang could have challenged the assess-
 ments by pursuing a protest under 19 U.S.C. § 1514 (“Pro-
 test Against Decisions of Customs Service”) and then, if
 unsuccessful, by challenging unfavorable results before the
 CIT under § 1581(a). 4 Alternatively, Wanxiang could have

     4    Subsection 1581(a), which governs the CIT’s juris-
 diction to review Customs’ treatment of protests, sets forth
Case: 20-1044     Document: 48     Page: 9    Filed: 09/02/2021

 WANXIANG AMERICA CORPORATION     v. UNITED STATES           9

 initiated a test shipment and sought, as a new shipper, an
 administrative review of the entries. During the review,
 Wanxiang would have had the opportunity to argue the is-
 sues it raised in its complaint before the CIT. In addition,
 the results of the administrative review could have been
 challenged before the CIT pursuant to 19 U.S.C. § 1516a,
 invoking jurisdiction of the CIT under § 1581(c). 5
     Wanxiang concedes it could have sought administra-
 tive review and then challenged unfavorable results at the
 CIT under § 1581(c). Oral Arg. at 4:15–46; 4:54–5:03;
 5:28–6:30. Wanxiang, however, asserts § 1581(i) jurisdic-
 tion because, in its view, it was not legally compelled to
 take that route. Id. at 6:22–30 (“Yes, [Wanxiang] could
 have done all of that. There’s no question they could have
 done all of that. The question, though, is: Were they re-
 quired to do all of that?”). But Wanxiang misapprehends
 the § 1581(i) standard, which asks only whether another
 route under § 1581 existed that was not manifestly inade-
 quate. It is true that Wanxiang had the choice of whether
 or not to file a protest or seek an administrative review, but
 having made the choice not to do so, the relief it seeks now

 an express scheme for administrative and judicial review
 of Customs’ penalty actions. Under this statutory scheme,
 an aggrieved party must first file a protest with Customs
 under 19 U.S.C. § 1514 before it can file suit in the CIT un-
 der § 1581(a) to contest denials. Int’l Custom Prods., Inc.
 v. United States, 467 F.3d 1324, 1326–27 (Fed. Cir. 2006).
     5   Subsection 1581(c) grants the CIT exclusive juris-
 diction over any civil action commenced under 19 U.S.C.
 §§ 1516a or 1517. See 28 U.S.C. § 1581(c). This includes
 the “jurisdiction to consider challenges to Commerce’s as-
 sessment of antidumping duties based on its determination
 during administrative reviews.”        Juancheng Kangtai
 Chem. Co. v. United States, 932 F.3d 1321, 1329 (Fed. Cir.
 2019).
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 10         WANXIANG AMERICA CORPORATION     v. UNITED STATES

 under § 1581(i) is foreclosed. An importer may not simply
 “elect to proceed under [§] 1581(i), without having first
 availed himself of the remedy provided by [§] 1581(c).”
 Sunpreme Inc. v. United States, 892 F.3d 1186, 1193
 (Fed. Cir. 2018) (quoting JCM, Ltd. v. United States,
 210 F.3d 1357, 1359 (Fed. Cir. 2000)).
      An importer cannot successfully assert § 1581(i) juris-
 diction via “creative pleading.”      Id. (quoting Norsk,
 472 F.3d at 1355). This court will “look to the true nature
 of the action” brought before the CIT under § 1581(i) to de-
 termine whether the action could have been brought under
 another subsection of § 1581. Id. (quoting Norsk, 472 F.3d
 at 1355). For instance, in Sunpreme, the importer sought
 a refund of cash deposits, an end of suspension of liquida-
 tion, and release from having to make future cash deposits,
 all of which we found to be “the very relief associated with
 a scope ruling determination.” Id. Despite its pleading, it
 was clear that Sunpreme sought “a decision that its prod-
 ucts [we]re not subject to the scope of the [antidumping
 duty] orders,” so we reversed the CIT’s exercise of § 1581(i)
 jurisdiction because Sunpreme had available to it relief un-
 der § 1581(c). Id. at 1193–94.
     Similarly, in Juancheng Kangtai Chemical Co. v.
 United States, we affirmed the CIT’s dismissal for lack of
 jurisdiction because jurisdiction was available to Kangtai
 under § 1581(c). 932 F.3d 1321, 1328–29 (Fed. Cir. 2019).
 Although Kangtai asserted jurisdiction under § 1581(i)(2)
 and (4)—as Wanxiang does here—we observed that the
 “true nature” of Kangtai’s action was to protest Com-
 merce’s assessment of antidumping duties on entries, and
 it could have sought relief under § 1581(c). Id. at 1328.
 Further, we determined that Kangtai failed to demonstrate
 such relief would have been manifestly inadequate. Id.
 at 1329–30. Thus, despite Kangtai’s attempt to base its ac-
 tion in § 1581(i), we held that such jurisdiction was una-
 vailable.
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 WANXIANG AMERICA CORPORATION     v. UNITED STATES          11

     Here, the true nature of Wanxiang’s complaint is that
 Wanxiang seeks to avoid paying antidumping duties and a
 penalty assessed against it via a Penalty Notice. See
 J.A. 55. The bases of its complaint are issues routinely first
 brought up and challenged in protest proceedings and ad-
 ministrative reviews. See, e.g., Guizhou Tyre Co. v. United
 States, No. 17-00100, 2021 WL 1944431 (Ct. Int’l Trade
 May 14, 2021); Husteel Co. v. United States, No. 19-00107,
 2021 WL 1740367 (Ct. Int’l Trade May 3, 2021).
                         CONCLUSION
      We agree with the CIT that Wanxiang chose to forgo
 available avenues to administrative relief that could have
 resulted in the CIT’s proper exercise of jurisdiction under
 § 1581(a) or (c). Wanxiang does not argue that such relief
 under those subsections would have been manifestly inad-
 equate. As a result, Wanxiang cannot now avail itself of
 the CIT’s residual jurisdiction under § 1581(i). The CIT
 therefore properly dismissed this case for lack of subject-
 matter jurisdiction. Because the CIT lacked jurisdiction
 under § 1581(i), we do not reach the questions concerning
 the finality of the CLU Memo. The judgment of the CIT is
 affirmed.
                         AFFIRMED