Court Opinion

ID: 2765829
Source: CourtListenerOpinion
Date Created: 2014-12-31 15:01:02.306325+00
Date Added: 2024-06-11T15:25:06.219706
License: Public Domain

Slip Op. 14-163

                UNITED STATES COURT OF INTERNATIONAL TRADE

STANDARD FURNITURE
MANUFACTURING CO., INC.,

       Plaintiff,

       v.                                         Before: Timothy C. Stanceu, Chief Judge

UNITED STATES and UNITED STATES                   Court No. 13-00202
INTERNATIONAL TRADE
COMMISSION,

       Defendants.

                                            OPINION

[Dismissing an action for failure to state a claim upon which relief can be granted in an action
seeking distributions under the Continued Dumping and Subsidy Offset Act of 2000]

                                                                    Dated: December 31, 2014

        Jill A. Cramer, Kristin H. Mowry, Jeffrey S. Grimson, Sarah Wyss, and Daniel R. Wilson,
Mowry & Grimson, PLLC, of Washington, DC, for plaintiff Standard Furniture Manufacturing
Co., Inc.

        Martin M. Tomlinson, Trial Attorney, Franklin E. White, Jr., Assistant Director, Joyce R.
Branda, Acting Assistant Attorney General, and Jeanne E. Davidson, Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant
United States.

       Patrick V. Gallagher, Jr., Attorney-Advisor, Robin L. Turner, Acting Assistant General
Counsel for Litigation, and Dominic L. Bianchi, General Counsel, Office of the General Counsel,
U.S. International Trade Commission, of Washington, DC, for defendant U.S. International
Trade Commission.

       Stanceu, Chief Judge: This case arose from the actions of two agencies, the U.S.

International Trade Commission (the “Commission” or “ITC”) and U.S. Customs and Border

Protection (“Customs” or “CBP”), that denied plaintiff Standard Furniture Manufacturing Co.,

Inc. (“Standard”), a domestic producer of wooden bedroom furniture, certain monetary benefits
Court No. 13-00202                                                                            Page 2

under the now-repealed Continued Dumping and Subsidy Offset Act of 2000 (the “CDSOA” or

“Byrd Amendment”), §§ 1001-03, 114 Stat. 1549, 19 U.S.C. § 1675c (2000) (repealed 2006,

effective 2007). Compl. ¶¶ 5, 14 (May 14, 2013), ECF No. 4 (“Compl.”). The ITC determined

that Standard did not qualify for “affected domestic producer” (“ADP”) status, which would

have made Standard eligible for distributions of duties collected under an antidumping duty

order on wooden bedroom furniture from the People’s Republic of China (“PRC” or “China”),

because Standard, in responding to an ITC questionnaire, had opposed the petition that resulted

in the order. Compl. ¶¶ 24, 35-40. Customs denied Standard’s requests for CDSOA

distributions for Fiscal Years 2011 and 2012. Compl. ¶¶ 37, 40.

       Plaintiff brought this case claiming that the actions by the ITC and Customs violated the

CDSOA and the Administrative Procedure Act (“APA”), 5 U.S.C. § 706 (2006), and alleging

various facial and as-applied constitutional challenges to the CDSOA. Compl. ¶¶ 47-59.

Plaintiff asks that this court order the ITC to add Standard to the list of ADPs for Fiscal

Years 2011 and 2012 and require Customs to disburse to Standard a pro rata portion of CDSOA

distributions for Fiscal Years 2011 and 2012. Compl.¶ 60.

       Before the court is defendants’ motion to dismiss under USCIT Rule 12(b)(5) for failure

to state a claim upon which relief can be granted. Defs.’ Mot. to Dismiss (Apr. 24, 2014), ECF

No. 28 (“Defs.’ Mot.”). The court determines that relief is not available on any of plaintiff’s

claims and will enter judgment dismissing this action.

                                         I. BACKGROUND

       Background on this action is provided in the court’s prior opinion and order, Standard

Furniture Mfg. Co., Inc. v. United States, 38 CIT __, Slip Op. 14-77 (June 27, 2014) (“Standard

Furniture I”) (denying motion to stay), and is supplemented herein.
Court No. 13-00202                                                                             Page 3

                                          A. The CDSOA

       The CDSOA amended the Tariff Act of 1930 (“Tariff Act”) by establishing an annual

distribution of assessed antidumping and countervailing duties to eligible ADPs as

reimbursement for qualifying expenses. 19 U.S.C. § 1675c(a)-(d) (2000). ADP status is limited

to petitioners and interested parties, id. § 1675c(b)(1), that indicated support for the petition that

gave rise to the pertinent antidumping or countervailing duty order “by letter or through

questionnaire response,” id. § 1675c(d)(1). Under the CDSOA, within sixty days after the

International Trade Administration, U.S. Department of Commerce (“Commerce” or the

“Department”) issued an antidumping order, the ITC would forward to Customs a list of ADPs

potentially eligible for CDSOA distributions of duties collected under that order and Customs

would publish that list in the Federal Register. Id. § 1675c(d)(1). Customs was then responsible

for making the annual distributions to qualifying ADPs that file certifications with Customs. Id.

§ 1675c(d)(3), (e).

                                 B. Administrative Actions at Issue

       In 2003, the ITC commenced an investigation to determine whether imports of wooden

bedroom furniture from the People’s Republic of China (“China”) were causing or threatening to

cause material injury to the domestic industry. Initiation of Antidumping Duty Investigation:

Wooden Bedroom Furniture from the People’s Republic of China, 68 Fed. Reg. 70,228 (Int’l

Trade Comm’n Dec. 17, 2003). In response to an ITC questionnaire issued during this

investigation, Standard stated that it opposed the petition that triggered the investigation. Compl.

¶ 24. In 2005, Commerce issued an antidumping duty order on imports of wooden bedroom

furniture from China. Notice of Amended Final Determination of Sales at Less Than Fair Value
Court No. 13-00202                                                                          Page 4

and Antidumping Duty Order: Wooden Bedroom Furniture From the People’s Republic of

China, 70 Fed. Reg. 329 (Int’l Trade Admin. Jan. 4, 2005).

       For Fiscal Years 2011 and 2012, Customs published individual lists of ADPs that the ITC

determined were potentially eligible for CDSOA distributions and did not include Standard on

either list. Distribution of Continued Dumping and Subsidy Offset to Affected Domestic

Producers, 76 Fed. Reg. 31,020 (Dep’t of Homeland Sec. May 27, 2011) (concerning Fiscal

Year 2011); Distribution of Continued Dumping and Subsidy Offset to Affected Domestic

Producers, 77 Fed. Reg. 32,718 (Dep’t of Homeland Sec. June 1, 2012) (concerning Fiscal

Year 2012). On June 18, 2011, Standard filed a certification with Customs requesting CDSOA

distributions for Fiscal Year 2011, which Customs subsequently denied. Compl. ¶ 36-37. On

July 19, 2012, Standard filed another certification with Customs, this time requesting CDSOA

distributions for Fiscal Year 2012, which Customs also denied. Compl. ¶¶ 39-40.

                                      C. Procedural History

       Plaintiff commenced this action on May 14, 2013. Summons, ECF No. 1; Compl.

Defendants filed a motion to dismiss the action on April 24, 2014. Defs.’ Mot. 1. Plaintiff filed

a response to defendants’ motion to dismiss on June 2, 2014,1 Pl. Standard Furniture Mfg., Co.,

Inc.’s Resp. to Defs.’ Mot. to Dismiss, ECF No. 29, and defendants filed a reply in support of the

motion on August 22, 2014, Defs.’ Reply in Supp. of Mot. to Dismiss, ECF No. 42. On

June 27, 2014, the court denied a motion by plaintiff to stay this action pending final resolution

of a petition for a writ of certiorari to the U.S. Supreme Court in a case in which two other

       1
         Plaintiff’s response to defendants’ motion to dismiss asserts only that the court should
deny defendants’ motion and reiterates its position that the court should stay this case pending
the U.S. Supreme Court’s consideration of a writ of certiorari, a request the court denied. Pl.
Standard Furniture Mfg., Co., Inc.’s Resp. to Defs.’ Mot. to Dismiss (June 2, 2014), ECF No. 29.
Court No. 13-00202                                                                               Page 5

domestic furniture manufacturers challenged the denial of CDSOA distributions. Standard

Furniture I, 38 CIT at __, Slip Op. 14-77 at 5. Defendants filed a status report on

October 20, 2014, following the U.S. Supreme Court’s denial of the petition for a writ of

certiorari that was the subject of plaintiff’s motion to stay. Defs. United States & U.S. Customs

& Border Prot.’s Status Report, ECF No. 44, see Ashley Furniture Indus., Inc., et al. v. United

States, 135 S. Ct. 72 (2014) (denying certiorari).

                                            II. DISCUSSION

        The court exercises jurisdiction over this matter pursuant to section 201 of the Customs

Courts Act of 1980, 28 U.S.C. § 1581(i) (2006), which grants this Court exclusive jurisdiction

over various civil actions not falling under the jurisdictional grants of subsections (a)-(h) of

section 201 but that arise out of a law of the United States, such as the CDSOA, that provides for

the administration of duties (including antidumping duties) on the importation of merchandise.

        “[A] judge ruling on a defendant’s motion to dismiss a complaint ‘must accept as true all

of the factual allegations contained in the complaint.’” Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 570 (2007) (“Twombly”) (citations omitted). However, a complaint must be

dismissed if it does not “contain sufficient factual matter, accepted as true, to ‘state a claim to

relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Iqbal”)

(quoting Twombly, 550 U.S. at 570). “Determining whether a complaint states a plausible claim

for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial

experience and common sense.” Id., 556 U.S. at 679.

        Plaintiff’s complaint has five counts. Count 1 brings statutory challenges, Count 2 brings

both statutory and constitutional challenges, and Counts 3, 4, and 5 bring constitutional

challenges. Compl. ¶¶ 47-59.
Court No. 13-00202                                                                          Page 6

                A. No Relief Can be Granted on Plaintiff’s Statutory Challenges

       Plaintiff’s complaint alleges that the actions of the ITC and Customs violated the

CDSOA and the APA and that the conduct of the two agencies was “arbitrary, capricious, and an

abuse of discretion.” Compl. ¶¶ 47-51. Specifically, plaintiff alleges that the agencies

“inappropriately treated similarly situated domestic producers differently, without any rational

basis for doing so,” Compl. ¶ 51, and unlawfully “limited the definition of ‘affected domestic

producer’ to include only those domestic producers who checked the support box on the

Commission’s questionnaire, while excluding from the definition those domestic producers who

supported the petition through their conduct but did not express support for the petition,” Compl.

¶ 51. Relying on two decisions of the U.S. Court of Appeals for the Federal Circuit (“Court of

Appeals”), plaintiff asserts that such an interpretation conflicts with the purpose of the CDSOA,

which, according to plaintiff, is “to reward domestic producers who support the petition through

their conduct.” Id. (citing SKF USA, Inc. v. U.S. Customs & Border Prot., 556 F.3d 1337, 1382

(Fed. Cir. 2009) (“SKF”), cert. denied, 130 S. Ct. 3273 (2010); PS Chez Sidney, L.L.C. v. U.S.

Int’l Trade Comm’n, 684 F.3d 1374, 1382 (Fed. Cir. 2012) (“PS Chez Sidney”)).

       The court concludes that no relief can be granted on plaintiff’s statutory claims. The

CDSOA provision relevant to these claims is the directive that the ITC, in providing its list of

ADPs to Customs, include “a list of persons that indicate support of the petition by letter or

through questionnaire response.” 19 U.S.C. § 1675c(d)(1) (emphasis added). Plaintiff admits

that “[in] its questionnaire responses, Standard indicated that it opposed the petition.” Compl.

¶ 24. The court must dismiss plaintiff’s statutory claims that the actions by the two agencies

violated the CDSOA and APA because plaintiff has admitted that it opposed the petition in its

questionnaire response—a fact disqualifying Standard from receiving CDSOA distributions
Court No. 13-00202                                                                           Page 7

under the plain meaning of the statute—and alleges no other facts from which the court could

reach a conclusion that the agencies’ actions must be set aside.

       Plaintiff’s contention that the purpose of the CDSOA is “to reward domestic producers

who support the petition through their conduct,” Compl. ¶ 51, does not save plaintiff’s statutory

claims. In neither SKF nor PS Chez Sidney did the Court of Appeals construe the CDSOA such

that a domestic producer may express opposition to a petition in its ITC questionnaire responses

and still be eligible to receive CDSOA distributions. To the contrary, the Court of Appeals in

SKF reasoned that in enacting the petition support requirement, Congress had permissibly, and

rationally, concluded that those who did not support a petition through a letter or questionnaire

response should not be rewarded. SKF, 556 F.3d at 1357, 1359 (“At best the role of parties

opposing (or not supporting) the petition in responding to questionnaires is similar to the role of

opposing or neutral parties in litigation who must reluctantly respond to interrogatories or other

discovery. . . . It was thus rational for Congress to conclude that those who did not support the

petition should not be rewarded.”). The Court of Appeals’ decision in PS Chez Sidney is not

applicable to this action because it concerned a different factual pattern from the instant case.

The party in PS Chez Sidney checked a box in one questionnaire indicating its support for the

petition and indicated that it took no position in a subsequent questionnaire. PS Chez Sidney,
684 F.3d at 1377. The holding in PS Chez Sidney did not qualify the holding in SKF to the

benefit of parties that expressed opposition to a petition. Id., 684 F.3d at 1381.

       Because the statute precludes ADP status to parties that did not support the petition

through letter or questionnaire response, plaintiff can receive no relief on its statutory claims and

the court, therefore, must dismiss these claims pursuant to USCIT Rule 12(b)(5).
Court No. 13-00202                                                                           Page 8

              B. No Relief Can be Granted on Plaintiff’s Constitutional Challenges

       Plaintiff’s complaint also brings several challenges on constitutional grounds. Counts 3

and 5 bring claims grounded in the First Amendment guarantees of free speech and the right to

petition the government for redress of grievances. Compl. ¶¶ 52-54, 58-59. Count 4 brings

claims grounded in the equal protection guarantee under the due process clause of the Fifth

Amendment. Compl. ¶¶ 55-57. Count 2 alleges that the agencies’ actions “violate[] Standard’s

constitutional rights,” Compl. ¶ 51, but offers no additional constitutional grounds on which the

court may evaluate plaintiff’s claims.

       Plaintiff claims, in Count 3, that “[d]efendants’ application of the CDSOA . . . conditions

receipt of a government benefit on a private speaker expressing a specific viewpoint—support

for an antidumping duty petition through checking a ‘support’ box—and, therefore, is viewpoint

discrimination in contravention of the First Amendment.” Compl. ¶ 54. Plaintiff claims, in

Count 5, that the CDSOA petition support requirement “violates the First Amendment to the

Constitution as applied to Standard because it discriminates against Standard based on

expression of [Standard’s] views,” Compl. ¶ 59, towards the antidumping petition “rather than

[Standard’s] action (its litigation support),” Compl. ¶ 59. Plaintiff also claims in Count 5 that

“[d]efendants’ application of the CDSOA further violates the First Amendment’s petition clause

by unconstitutionally abridging Standard’s right to petition the government for redress of

grievances.” Compl. ¶ 59; see U.S. Const. amend. I (“Congress shall make no law . . . abridging

the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to

petition the Government for a redress of grievances.”).

       In Count 4 of the complaint, plaintiff claims that the agencies violated equal protection

guarantees of the Fifth Amendment’s due process clause because the agencies’ actions “created a
Court No. 13-00202                                                                            Page 9

classification that implicates Standard’s fundamental right of speech,” Compl. ¶ 56, and were

“not narrowly tailored to a compelling government objective,” Compl. ¶ 56. Plaintiff also claims

that the agencies violated Fifth Amendment equal protection guarantees because the agencies’

application of the CDSOA “impermissibly discriminates between Standard and other

similarly-situated domestic producers who expressed support for the relevant antidumping

petition . . . denying a benefit to Standard.” Compl. ¶ 57.

       The court concludes that plaintiff’s constitutional challenges are foreclosed by binding

precedent established by SKF and, therefore, must be dismissed. In SKF, the Court of Appeals

held broadly that the CDSOA is “valid under the First Amendment” because it “is within the

constitutional power of Congress to enact, furthers the government’s substantial interest in

enforcing the trade laws, and is not overly broad.” SKF, 556 F.3d at 1360. The Court of

Appeals also held that the CDSOA, as applied to the plaintiff SKF USA, Inc. (“SKF”), violated

neither First Amendment principles nor equal protection principles under the Fifth Amendment

when SKF had expressed opposition to the relevant antidumping duty petition in its ITC

questionnaire response. SKF, 556 F.3d at 1343 (“SKF also responded to the ITC’s questionnaire,

but stated that it opposed the antidumping petition.”). Like SKF, Standard expressed opposition

to antidumping duty petition in an ITC questionnaire response. Compl. ¶ 24. Plaintiff fails to

plead any facts that would allow the court to distinguish the application of the CDSOA to

Standard in this case from the application of the statute in SKF. In all material respects,

Standard’s expression of opposition to an antidumping duty petition was equivalent to that made

by SKF and properly resulted in Standard’s disqualification from receiving distributions under

the CDSOA.
Court No. 13-00202                                                                           Page 10

       In summary, plaintiff has failed to allege facts sufficient to demonstrate that its

constitutional claims are not foreclosed by the binding precedent of SKF. As to these claims,

therefore, the complaint does not “contain sufficient factual matter, accepted as true, to ‘state a

claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 663 (citation omitted). The court

must dismiss these claims pursuant to defendants’ motion under USCIT Rule 12(b)(5).

                                         III. CONCLUSION

       For the foregoing reasons, defendants’ motion to dismiss this case under USCIT

Rule 12(b)(5) for failure to state a claim must be granted. The court will enter judgment

dismissing this action.

                                                      /s/ Timothy C. Stanceu
                                                      Timothy C. Stanceu
                                                      Chief Judge

Dated: December 31, 2014
       New York, NY