Court Opinion

ID: 4350883
Source: CourtListenerOpinion
Date Created: 2018-12-14 20:01:40.870558+00
Date Added: 2024-06-11T14:06:32.907599
License: Public Domain

Slip Op. 18-172

                  UNITED STATES COURT OF INTERNATIONAL TRADE

HARTFORD           FIRE    INSURANCE
COMPANY,
                                                     Before: Leo M. Gordon, Judge
                           Plaintiff,

             v.                                      Court No. 11-00135
UNITED STATES,

                           Defendant.

                                          OPINION

[Plaintiff’s motion for summary judgment denied; Defendant’s cross-motion for summary
judgment granted.]

                                                               Dated: December 14, 2018

       Frederick D. Van Arnam, Jr., Barnes, Richardson & Colburn, LLP of New York, NY
for Plaintiff Hartford Fire Insurance Company.

       Edward F. Kenny and Beverly A. Farrell, Trial Attorneys, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice of New York, NY for Defendant United
States. With them on the briefs were Joseph H. Hunt, Assistant Attorney General, and
Amy M. Rubin, Assistant Director. Of counsel on the briefs was Paula S. Smith, Attorney,
Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and
Border Protection of New York, NY.

      Gordon, Judge: Plaintiff Hartford Fire Insurance Company (“Hartford”) challenges

the denial of its protests of demands by U.S. Customs and Border Protection (“Customs”

or “CBP”) for payment of antidumping duties on certain surety bonds. Before the court

are cross-motions for summary judgment by Hartford and Defendant United States

(“Defendant” or the “Government”). See Pl.’s Mot. for Summ. J., ECF No. 61 (“Pl.’s Br.”);

Def.’s Mem. of Law Resp. to Pl.’s Summ. J. Mot. & Supp. Def.’s Cross-Mot. for Summ.
Court No. 11-00135                                                                    Page 2

J., ECF No. 69 (“Def.’s Br.”); Pl.’s Reply Supp. Mot. for Summ. J. & Resp. to Def.’s Cross-

Mot. for Summ. J., ECF No. 74 (“Pl.’s Reply”); Def.’s Reply Supp. Cross-Mot. for Summ.

J., ECF No. 80 (“Def.’s Reply”). The court has jurisdiction pursuant to 28 U.S.C. § 1581(a)

(2012). For the reasons set forth below, Plaintiff’s motion for summary judgment is denied,

and Defendant’s cross-motion is granted.

                                   I. Undisputed Facts

       The following facts are not in dispute. See generally Pl.’s Br. at 4–7 (“Pl.’s Stmt. of

Material Facts Not in Issue”); Def.’s Resp. to Pl.’s Stmt. of Material Facts Not in Issue,

ECF No. 70; Def.’s Stmt. of Add’l Material Facts Not in Issue, ECF No. 71; Pl.’s Resp. to

Def.’s Stmt. of Material Facts Not in Issue, ECF No. 75. Shandong Longtai Fruits and

Vegetables Co., Ltd. ("Shandong Longtai") imported fresh garlic from China in five entries

in June, July, and August 2006 (“subject entries”). Pl.’s Stmt. of Material Facts Not in

Issue ¶¶ 1, 2. At that time, the imported garlic was covered by an antidumping duty order.

See id. ¶ 4 (citing Fresh Garlic from the People's Republic of China, 59 Fed. Reg. 59,209

(Dep’t of Commerce Nov. 16, 1994) (“Order”)). Concomitantly, Shandong Longtai was the

subject of a new shipper review before the U.S. Department of Commerce ("Commerce").

Id. ¶ 3 (citing Fresh Garlic from the People's Republic of China, 72 Fed. Reg. 34,438

(Dep’t of Commerce June 22, 2007) (final results and partial rescission of 11th admin.

rev. and new shipper revs.)).

       For each entry, Shandong Longtai did not deposit cash to cover the estimated

antidumping duties, but rather provided single entry bonds (“SEBs” or “subject bonds”)

in lieu of cash deposits. Id. ¶¶ 5, 6. Hartford was the surety on these SEBs, see id. ¶ 7,
Court No. 11-00135                                                                  Page 3

and also on a continuous bond covering the subject entries, see Def.’s Stmt. of Add’l

Material Facts Not in Issue ¶ 2. Customs demanded, but never received, cash deposits

from Shandong Longtai to cover the estimated antidumping duties owed on the subject

entries. Pl.’s Stmt. of Material Facts Not in Issue ¶¶ 12, 14.

       Liquidation of the subject entries was suspended during the pendency of the

12th administrative review of the Order. Id. ¶ 8. As of the dates of entry of the subject

entries, and prior to their liquidation, Congress enacted the Pension Protection Act of

2006, Pub. L. 109–280, 120 Stat. 780 (Aug. 17, 2006) (“PPA”). Id. ¶ 9. Thereafter,

Commerce published the final results of the 12th administrative review. See id. ¶ 15 (citing

Fresh Garlic from the People's Republic of China, 73 Fed. Reg. 34,251 (June 17, 2008)

(final results 12th admin. rev.) (“Final Results”)).

       Pursuant to the Final Results, Customs calculated the final amount of antidumping

duties owed by Shandong Longtai on the subject entries, and demanded that Shandong

Longtai pay that amount. Id. ¶¶ 16, 17. Shandong Longtai failed to pay the final duties.

Id. ¶ 18. Customs then issued demands ("Demands") to Harford that it, as Shandong

Longtai’s surety, pay the antidumping duties owed. Id. ¶ 19. Hartford protested the

Demands, which Customs denied. Id. ¶¶ 20, 21. Subsequently, Hartford paid the

outstanding antidumping duties, thereby satisfying the Demands. Id. ¶ 22.

                                  II. Standard of Review

       The U.S. Court of International Trade reviews Customs' protest decisions de novo.

28 U.S.C. § 2640(a)(1). USCIT Rule 56 permits summary judgment when “there is no

genuine issue as to any material fact.” USCIT R. 56(c); see also Anderson v. Liberty
Court No. 11-00135                                                                   Page 4

Lobby, Inc., 477 U.S. 242, 248 (1986). In considering whether material facts are in

dispute, the evidence must be considered in the light most favorable to the non-moving

party, drawing all reasonable inferences in its favor. See Adickes v. S.H. Kress & Co.,

398 U.S. 144, 157 (1970); Anderson, 477 U.S. at 261 n. 2. Because the dispositive issues

are solely legal and the material facts are uncontroverted, summary judgment is

appropriate. See 10A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L.

Marcus & Adam N. Steinman, Federal Practice & Procedure § 2725 (4th ed. 2018); see

also Dal–Tile Corp. v. United States, 24 CIT 939, 944, 116 F. Supp. 2d 1309, 1314 (2000)

(citing Marathon Oil Co. v. United States, 24 CIT 211, 214, 93 F. Supp. 2d 1277, 1279–

80 (2000)).

                                                               III. Discussion

              At the time of the subject entries, Shandong Longtai, as the importer, had the

option to forgo payment of cash deposits of estimated antidumping duties by posting a

bond until a new shipper review established a duty margin specific to it as the foreign

producer and exporter. See Section 751(a)(2)(B)(iii) of the Tariff Act of 1930,

as amended, 19 U.S.C. § 1675(a)(2)(B)(iii)1 (the “new shipper bonding privilege”)

(Customs was authorized “to allow, at the option of the importer, the posting until the

completion of the review, of a bond or security in lieu of a cash deposit for each entry of

the subject merchandise.”). Subsequently, the PPA suspended the new shipper bonding

privilege. While the PPA, as a whole, applied only “to goods entered, or withdrawn from

1
 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions
of Title 19 of the U.S. Code, 2006 edition, unless otherwise indicated.
Court No. 11-00135                                                                   Page 5

warehouse for consumption, on or after the 15th day after the date of the enactment” of

the PPA (September 1, 2006), see PPA § 1641, 120 Stat. at 1172, Congress provided for

limited retroactive effect for the statutory revocation of the new shipper bonding privilege.

Specifically, the PPA provided that the new shipper bonding privilege “shall not be

effective during the period beginning on April 1, 2006, and ending on June 30, 2009.”2

See PPA § 1632, 120 Stat. at 1165 (“retroactive period”).

              The day after the PPA’s enactment, Customs issued a memorandum that provided

guidance on the collection of antidumping duties from new shippers. See Pl.’s Br. at Ex. 1

(Cathy Sauceda, CBP Director of Special Enforcement, Suspension of Antidumping and

Countervailing Duty Bonding Privilege for New Shippers from 04/01/2006 to 06/30/2009,

CSMS #06-000983 (Aug. 18 2006) (“Sauceda Memo”)). The Sauceda Memo stated that

“CBP shall collect a cash deposit of estimated antidumping and countervailing duties from

importers for each entry of merchandise made during the conduct of all new shipper

reviews . . . entered or withdrawn from warehouse for consumption on or after 04/01/2006,

for which a bond was collected as security.” Sauceda Memo ¶ 5. Pursuant to this

memorandum, Customs sought to collect antidumping duties from Shandong Longtai and

from Hartford as Shandong Longtai’s surety, which Hartford subsequently paid.

                Thereafter, Hartford brought suit challenging Customs’ Demands, raising four

arguments as to why it should not be held liable as a surety on Shandong Longtai’s SEBs.

See Pl.’s Br. at 14–20. Principally, Plaintiff argues that the retroactive effect of the PPA

2
  The new shipper bonding privilege has since been repealed. See 19 U.S.C. § 1675
(2012).
Court No. 11-00135                                                                Page 6

nullified the validity of the SEBs and prohibited Customs from issuing the Demands

predicated on the subject bonds. Id. at 14–16. Second, Plaintiff contends that the subject

SEBs “are creatures of statute,” and that “passage of the [PPA], and the resulting change

in the statutory scheme, rendered the bonds unenforceable.” Id. at 16–17. Third, Plaintiff

argues that Customs’ Demands stem from its “ministerial” role in effectuating the

antidumping laws, and that the PPA’s retroactive elimination of the new shipper bonding

privilege “removed Commerce’s authority to allow Customs to accept bonds in lieu of

cash deposits” as of April 1, 2006. Id. at 17–18. Lastly, Plaintiff maintains that the

retroactive elimination of the new shipper bonding privilege implicitly obligated Customs

to seek cash deposits from Shandong Longtai to replace the security formerly provided

by the SEBs. Id. at 18–20. Because the court disagrees that the passage of the PPA

rendered the subject bonds unenforceable, the court denies Plaintiff’s motion and grants

Defendant’s motion for summary judgment.

                            A. Nullification of the Subject Bonds

      Section 1632(a) of the PPA provides that “[the new shipper bonding privilege] shall

not be effective during the period beginning on April 1, 2006, and ending on June 30,

2009.” PPA, § 1632, 120 Stat. at 1165–66. Plaintiff’s primary argument is that § 1632

nullified bonds issued during the retroactive period. See Pl.’s Br. at 14–16 (“the SEBs

were rendered ineffective by the [PPA]”). The Government disagrees and maintains that

§ 1632 does not nullify Hartford’s liability under the subject bonds. The Government

emphasizes that the purpose of the statute, as expressed in its text, as well as its

legislative history, does not support Hartford’s arguments. Resolution of the parties’
Court No. 11-00135                                                                      Page 7

dispute hinges on the interpretation of § 1632 and the effect of the retroactive suspension

of the new shipper bonding privilege on the subject bonds.

       In determining the meaning of a statute, “[t]he first and foremost ‘tool’ to be used

is the statute’s text, giving it its plain meaning.” Timex V.I., Inc. v. United States, 157 F.3d
879, 882 (Fed. Cir. 1998). Hartford appears to concede that the text of the statute is silent

as to the question of nullification. Hartford does not rely upon the “plain meaning” of

§ 1632, but rather argues that the court should infer nullification of the subject bonds

solely from the fact that the subject entries were made during the retroactive period. This

the court will not do as Hartford’s hoped-for interpretation goes well beyond the express

text and runs contrary to the intent of § 1632.

       In support of its preferred interpretation, Hartford relies on Vandegrift Forwarding

Co. v. Hartford Fire Ins. Co., No. 06-CV-5440, 2009 WL 928337 (E.D.N.Y. Mar. 31, 2009),

for the proposition that once the PPA was enacted into law, the SEBs posted by

Shandong Longtai were no longer valid security for the Government. See Pl.’s Br. at 10,

14. The plaintiff in Vandegrift was a freight forwarder and customs broker who had

obtained bonds from Hartford on behalf of 26 shippers. Vandegrift brought an action to

recover premiums paid by its clients to Hartford for bonds issued during the retroactive

period on the grounds that the bonds were rendered unenforceable by the PPA.

Vandegrift, No. 06-CV-5440, 2009 WL 928337 at *1.

       In dismissing the action for lack of Article III standing, the court did not address the

enforceability of the bonds. See id. at *3–*6 (holding that Vandegrift’s shippers were only

parties that could bring claims against Hartford for premiums paid on bonds). Rather, the
Court No. 11-00135                                                                    Page 8

court described the unenforceability of the bonds as a fact alleged by Vandegrift that was

assumed to be true for the purposes of deciding Hartford’s motion to dismiss. See id.

at *1–*2 (“When considering a motion to dismiss under Rule 12(b)(6), the Court accepts

as true the factual allegations in the complaint and draws all inferences in favor of the

plaintiff.”). Specifically, the court noted that “[a]ccording to Vandegrift, its clients paid

premiums totaling $839,548 for bonds that were rendered ineffective by [the PPA] ….” Id.

at *1. Accordingly, Plaintiff’s reliance on Vandegrift is misplaced.

       Hartford further argues that if Customs could still make demands on bonds posted

during the retroactive period, the April 1, 2006 effective date of § 1632 would “be rendered

entirely superfluous.” Pl.’s Br. at 14. The court disagrees. Hartford contends that

“Congress chose, in strong, clear and imperative language, retroactively to eliminate

importers' ability to post bonds, and to require that Customs obtain cash deposits as

security for entries made on or after April 1, 2006.” See Pl.’s Reply at 9. This is simply not

the case. While Hartford is correct that § 1632(a) retroactively eliminated the option for

new shippers to post bonds, the statute says nothing about any requirement on Customs

to obtain cash deposits retroactively. Section 1632(a) also does not address whether

Customs could continue to rely upon bonds posted by importers during the retroactive

period under the new shipper bonding privilege.

       In response, the Government notes that the legislative history is silent as to the

purpose behind making the provision retroactive, but Congress’ intention may have been

to require new shippers to post cash deposits retroactively to April 1, 2006 despite having

previously posted bonds as securities for antidumping liability. See Def.’s Resp. at 24
Court No. 11-00135                                                                Page 9

(proposing interpretation of § 1632 that would limit rights of new shippers but preserve

rights of Customs with respect to new shipper bonds posted in retroactive period). Under

the Government’s interpretation, the retroactive limitation on the rights of new shippers

under § 1632 may occur without altering the privileges and obligations maintained by the

Government in enforcing the antidumping laws. This approach appears to give meaning

to both the retroactive effective date as well as the intent behind § 1632. See infra

at pp. 9–10 (discussing intent and purpose of § 1632). Ultimately, Hartford has failed to

persuade the court that it must interpret § 1632 to prohibit Customs from making demands

on bonds posted during the retroactive period in order to avoid rendering the effective

date of § 1632 “entirely superfluous.”

       Hartford’s proposed interpretation of § 1632(a) is also at odds with the statute’s

purpose. Section 1632(b) explicitly requires a report on the impact of § 1632(a), stating

that one “of the difficulties that necessitated the suspension [of the new shipper bonding

privilege]” was a “problem in the collection of antidumping duties on imports from new

shippers.” PPA, § 1632(b)(2)(A), 120 Stat. at. 1165. Suspension of the new shipper

bonding privilege was enacted largely as a result of the significant loss of revenue

attributed to new shippers of merchandise subject to antidumping duty orders. See, e.g.,

Def.’s Br. at Ex. 10, U.S. Gov’t Accountability Office, GAO-05-979, International Trade:

Issues and Effects of Implementing the Continued Dumping and Subsidy Offset Act 24–

28 (2005) (noting Congressional consideration of legislation to address difficulties faced

by Customs in collecting antidumping duties from “new shippers”); id. at Ex. 11, Regional

Farm Bill: Field Hearing Before the S. Comm. on Agriculture Nutrition, and the Forestry,
Court No. 11-00135                                                                   Page 10

Statement of the American Honey Producers Associations, Inc., 109th Cong. (2006)

(“… importers from so-called ‘new shippers’ could secure deposits of estimated AD duties

by posting bonds instead of making cash deposits. Importers often closed shop and

‘skipped out’ on these bonds, making it difficult for [Customs] to collect duties and severely

weakening the deterrent effect of the AD order.”). Hartford’s proposed interpretation of

the PPA is inconsistent with the goal of facilitating the collection of antidumping duties.

Adoption of Plaintiff’s interpretation would have the effect of increasing the non-collection

of antidumping or countervailing duties. Hartford cites no legislative history or other

authority supporting its argument that, by enacting the PPA, Congress intended to relieve

sureties of their obligations on bonds posted during the retroactive period and held by

Customs.

       Lastly, Hartford relies on Customs’ communications about the collection of

antidumping duties owed by Shandong Longtai, contending that Customs represented

and acknowledged that it had no ability to continue to rely on and demand payment

against new shipper bonds. Pl.’s Br. at 13. Specifically, Hartford points to the Sauceda

Memo as a formal adoption of this position by Customs. The court again disagrees. The

Sauceda Memo does not provide a representation by Customs that bonds executed

during the retroactive period were unenforceable. Instead, the Sauceda Memo states that:

              Section 1632 of H.R. 4 (suspension of new shipper review
              provision) temporarily suspends the authority of the U.S.
              Department of Commerce (Commerce) to instruct U.S.
              Customs and Border Protection (CBP) to collect a bond or
              other security in lieu of a cash deposit of estimated
              antidumping and countervailing duties for each entry of
Court No. 11-00135                                                                      Page 11

               subject merchandise during the period 04/01/2006, through
               06/30/2009.
               …
               CBP shall collect a cash deposit of estimated antidumping
               and countervailing duties from importers for each entry of
               merchandise made during the conduct of all new shipper
               reviews, except as indicated above, entered or withdrawn
               from warehouse for consumption on or after 04/01/2006, for
               which a bond was collected as security.

Sauceda Memo ¶¶ 1, 5. While the memorandum confirms that Customs sought to collect

cash deposits, the Sauceda Memo is silent as to the enforceability of bonds that were

already posted with Customs.

       Hartford also relies on a letter dated February 5, 2007 from Robert Hamilton,

Director of Customs’ Revenue Division, to Shandong Longtai, stating:

               For the reasons discussed below, the single transaction
               bond(s) that you posted in lieu of said deposit(s) are no longer
               acceptable, as a matter of law.
               …
               Remitting $8,930,468.96 in a timely manner will release the
               single transaction bond(s) that were posted in lieu of a cash
               deposit(s) of dumping or countervailing duties. Release of the
               respective bonds should result in return of security required
               by the surety, if any, that you posted to obtain the bond(s).
               CBP cannot guarantee what your surety(s) will do regarding
               the security they have required. However, CBP holds it within
               its unilateral power to release the single transaction bond(s)
               involved.

See Pl.’s Br. at Ex. 2 (“Hamilton Letter”). It is clear from the context of the entire letter that

the phrase “as a matter of law” refers to § 1632, which suspended the privilege of an

importer, like Shandong Longtai, to post a bond. The letter does not reflect Customs’

belief or position that the subject bonds were unenforceable. Id.
Court No. 11-00135                                                                   Page 12

       Plaintiff incorrectly describes the language in the Hamilton Letter as a “party

admission” that the bonds are unenforceable. See Pl.’s Br. at 13. The language of the

Hamilton Letter confirms Customs’ position that the bonds remained enforceable,

otherwise Customs’ warning that it maintained “unilateral power to release the single

transaction bond(s) involved” would be meaningless. See Hamilton Letter. Customs’

position that Shandong Longtai could no longer rely upon the SEBs as providing sufficient

security under the statute is altogether different from stating that the subject bonds were

rendered unenforceable by the PPA. Accordingly, the court concludes that neither the

Sauceda Memo nor the Hamilton Letter support Hartford’s argument that the subject

bonds are null and void.

       Ultimately, Hartford’s position hinges on an interpretation of the PPA that bonds

tendered to Customs between April 1, 2006 and August 17, 2006 were nullified upon

enactment of the statute. However, the court’s review of the statutory text, purpose, and

the legislative history of the PPA reveals no support for Hartford’s proffered interpretation.

Interpreting § 1632 as proposed by Hartford would run contrary to Congressional intent

and result in additional revenue loss for Customs. See Def.’s Br. 20–24. Accordingly, the

PPA’s suspension of the new shipper bonding privilege did not operate to nullify the

subject bonds.

                                      B. “Statutory” Bonds

       Next, Hartford argues that the subject bonds are unenforceable because they are

“statutory bonds” or “creatures of statute.” Pl.’s Br. at 16. Hartford contends that statutory

bonds must be interpreted with reference to all applicable statutes and regulations insofar
Court No. 11-00135                                                                 Page 13

as they are found to modify the rights of the parties. However, Hartford fails to accurately

characterize the subject bonds. SEBs are contracts under which an importer (the bond’s

principal and primary obligor) and a surety (the bond’s secondary obligor) agree, jointly

and severally, to pay the United States (the bond’s sole identified beneficiary) all duties,

taxes, and charges found due on an entry secured by the bond. See Sioux Honey Assoc.

v. United States, 672 F.3d 1041, 1058 (Fed. Cir. 2012). Customs has broad authority to

request bonds, see 19 U.S.C. §1623 and 19 C.F.R. Part 113, but the obligations created

by the bonds are established by the contractual terms of the bonds themselves, and not

defined by statute. Though the terms of bonds may reference Commerce’s regulations,

that does not mean that the bonds are “statutory” in nature or that they depend upon the

maintenance of the statutory and regulatory framework under which they were written in

order to remain enforceable.

       While new shipper bonds were authorized by 19 U.S.C. § 1675(a)(2)(B)(iii), their

use and creation were not required under the plain language of that statute. The new

shipper bonding privilege gave the importer the option to submit a bond in lieu of a cash

deposit, but did not set any bonding conditions, or address the underlying enforceability

of bonds. Because the PPA does not address or modify the obligations undertaken by

Hartford pursuant to the SEBs, the terms of those bonds, which embody the contractual

agreement between the surety and principal, remain in full force.

                  C. Authority to Demand Payment on the Subject Bonds

       Third, Hartford argues that § 1632’s “suspension of the new shipper bonding

privilege removed Commerce's authority to allow Customs to accept bonds in lieu of cash
Court No. 11-00135                                                                Page 14

deposits.” Pl.’s Br. at 17. Hartford contends that because § 1632 suspended the new

shipper bonding privilege retroactively to April 1, 2006, Commerce, and in turn, Customs,

lacked authority to require anything other than cash deposits from importers to cover

antidumping duties on or after that date. Hartford further maintains that the Demands for

payment on the SEBs constituted unlawful charges or exactions because Customs

retroactively lost its authority to accept or demand payment against the subject bonds

pursuant to § 1632. Id. at 17, 18. The court again disagrees. Congressional enactment of

§ 1632 revoked the new shipper bonding privilege, but did not alter the authority of

Commerce regarding bonds previously posted pursuant to that privilege.

       The language of the new shipper bonding privilege stated that Commerce “shall,

at the time a review under this subparagraph is initiated, direct the Customs Service to

allow, at the option of the importer, the posting, until the completion of the review, of a

bond or security in lieu of a cash deposit.” See 19 U.S.C. § 1675(a)(2)(B)(iii). The

instructions that Commerce issued to Customs are unambiguous—“[f]or shipments of

fresh garlic from the PRC grown by and exported by the following companies [including

Shandong Longtai], entered, or withdrawn from warehouse, for consumption in the United

States on or after December 28, 2005, a bond or other security deposit is permitted, at

the importer’s option” and “[t]he option of a bond in lieu of a cash deposit will remain in

effect for exports from the exporter/grower combinations identified above until publication

of the final results of these new shipper reviews.” See Def.’s Br. at Ex. 1 (Message

No. 6020205 from Commerce’s Director, Special Enforcement to Customs’ Directors of

Field Operations and Port Directors (Jan. 20, 2006)).
Court No. 11-00135                                                               Page 15

       Customs follows Commerce’s instructions regarding antidumping duties. See, e.g.,

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

antidumping duties is performed by Commerce and involves no decision by Customs);

UniPro Foodservice, Inc. v. United States, 32 CIT 1004, 577 F. Supp. 2d 1348 (2008)

(Customs’ role in liquidating entries subject to dumping order merely ministerial, and

Customs has no discretion in the matter). In accordance with Commerce’s instructions,

as well as the requirements of § 1675(a)(2)(B)(iii) then in effect, Customs properly

accepted SEBs for the subject entries.

       The Government does not dispute that Customs’ role in the administration of the

antidumping or countervailing duty law is ministerial. See Def.’s Br. at 9–10. Here,

Customs followed Commerce’s instructions in permitting Shandong Longtai to post bonds

in lieu of cash deposits at the time of entry. And, Commerce issued no additional

instructions directing Customs to cancel or consider unenforceable new shipper bonds

executed during the retroactive period. While Plaintiff may wish the court to infer from

Commerce’s silence on this issue that Commerce intended for Customs to cancel those

bonds, the court concludes that if Commerce intended that result, it would have said so

expressly. It did not.

                         D. Customs’ Obligation to Collect Cash Deposits

       Lastly, Hartford argues that the PPA required Shandong Longtai to make

retroactive cash deposits on the subject entries, and that Customs was required to collect

those cash deposits instead of demanding payments from Hartford. Pl.’s Br. at 17, 18.

Assuming the bonds were nullified by the PPA, Hartford contends that Customs was
Court No. 11-00135                                                                Page 16

required to obtain the outstanding antidumping duties directly from Shandong Longtai

instead of relying on payment from Hartford as the surety. Id. at 15, 16. Hartford argues

that in the absence of an express directive from Congress indicating that Customs could

continue to rely upon bonds issued during the retroactive period of § 1632, the enactment

of § 1632 implicitly required Customs to obtain payment of all antidumping duties in cash

solely from the importers. Id. at 19-20. Once again, the court disagrees. The PPA is silent

about: (1) any obligation on the part of Customs to collect cash deposits on entries filed

during the retroactive period; and (2) the enforceability of new shipper bonds filed with

Customs during the retroactive period, but prior to the date of enactment of the PPA.

Hartford reads more into the PPA than is there, and the court cannot, given what the PPA

does say, absolve Hartford’s liability as surety on the subject bonds.

       Hartford further contends that once Commerce issues an antidumping order,

Customs, pursuant to 19 U.S.C. § 1673g(a), must collect a cash deposit of the estimated

duties as security on entries of merchandise subject to an antidumping duty order, and

Customs may accept a bond in lieu of cash only if a specific exception exists. Pl.’s Br.

at 7. Hartford also contends that once the new shipper bonding privilege was revoked,

Customs was obligated under § 1673g(a) to collect cash deposits. Once again, the court

disagrees.

       Section 1673g(a) provides:

              . . . no customs officer may deliver merchandise of that class
              or kind to the person by whom or for whose account it was
              imported unless that person complies with the requirements
              of subsection (b) of this section and deposits with the
Court No. 11-00135                                                                          Page 17

                             appropriate customs officer an estimated antidumping duty in
                             an amount determined by the administering authority.

19 U.S.C. § 1673g(a) (2012). This section states that Customs shall not deliver

merchandise subject to antidumping duties unless a cash deposit is made. By its express

terms, § 1673g(a) relates only to the time at which Customs “delivers merchandise.” Id.

It is not a general requirement that Customs seek cash deposits at any other time. At the

time the merchandise was delivered (i.e., entered and released), Customs could not and

did not violate § 1673g(a) because the new shipper bonding privilege was in effect and a

bond was lawfully posted.

              Despite Hartford’s arguments, the extent or adequacy of Customs’ efforts in

collecting cash deposits is not a determinative factor in determining Hartford’s liability

under the subject bonds. Hartford’s obligations under the bonds are not contingent upon

Customs’ efforts vis-à-vis the principal/importer.3 Pursuant to the terms of the subject

bonds, Hartford undertook joint and several liability for the duties owed by the importer

up to the bond limits. See Def.’s Br. at Ex. 2 (subject bonds stating “[i]n order to secure

payment of any duty, tax or charge and compliance with law or regulation as a result of

activity covered by any condition referenced below, we, the below named principal(s) and

3
  The court notes that Hartford’s arguments in this respect are not new. The Federal
Circuit previously rejected Hartford’s suggestion that Customs maintains any obligation
to protect the funds of sureties in administering the antidumping laws. See Hartford Fire
Ins. Co. v. United States, 772 F.3d 1281, 1288 (Fed. Cir. 2014) (“Hartford's claim
improperly seeks to convert Customs' obligation to protect the revenue of the United
States into a duty owed to Hartford and impermissibly shift the responsibility for assessing
a surety's risk from the surety to the Government. Customs was not required to assess
Hartford's exposure to risk.”) (internal citations omitted).
Court No. 11-00135                                                            Page 18

surety(ies), bind ourselves to the United States in the amount or amounts, as set forth

below.”).

       In sum, the PPA does not alter the status of bonds already lawfully filed with

Customs, or the ability of Customs to collect against those bonds.

                                       IV. Conclusion

       For the foregoing reasons, the court denies Plaintiff’s motion for summary

judgment and grants Defendant’s motion for summary judgment. The court will enter

judgment accordingly.

                                                            /s/ Leo M. Gordon
                                                          Judge Leo M. Gordon

Dated: December 14, 2018
       New York, New York