Court Opinion

ID: 2806493
Source: CourtListenerOpinion
Date Created: 2015-06-09 16:03:06.357204+00
Date Added: 2024-06-11T12:07:26.474325
License: Public Domain

Slip Op. 15-54

                UNITED STATES COURT OF INTERNATIONAL TRADE

 P.F. STORES, INC.,

        Plaintiff,

 v.

 UNITED STATES,

        Defendant,                             Before: Claire R. Kelly, Judge

 and                                           Court No. 14-00200

 AMERICAN FURNITURE
 MANUFACTURERS COMMITTEE FOR
 LEGAL TRADE AND VAUGHAN-
 BASSETT FURNITURE COMPANY,
 INC.,

        Defendant-Intervenors.

                                        OPINION

[Granting Defendant’s and Defendant-Intervenors’ motions to dismiss Plaintiff’s complaint
for lack of subject-matter jurisdiction.]

                                                              Dated: June 9, 2015

Josh Levy, Peter S. Herrick, P.A., of Florida, argued for Plaintiff. On the brief was Peter
Stanwood Herrick.

Douglas Glenn Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for Defendant. With him on the
brief were Joyce R. Branda, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Shana
Ann Hofstetter, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.

J. Michael Taylor, King & Spalding, LLP, of Washington, DC, argued for Defendant-
Intervenors. With him on the brief were Daniel Lawrence Schneiderman and Joseph W.
Dorn.
Court No. 14-00200                                                                   Page 2

         Kelly, Judge: This matter is before the court on Defendant’s, United States, and

Defendant-Intervenors’, American Furniture Manufacturers Committee for Legal Trade

and Vaughan-Bassett Furniture Company, Inc., motions to dismiss. Plaintiff, P.F. Stores,

Inc. (“Plaintiff” or “PF Stores”), argues the court has 28 U.S.C. § 1581(i) (2012)1

jurisdiction because the U.S. Department of Commerce’s (“Commerce”) actions resulted

in Plaintiff’s entries being deemed liquidated. Defendant and Defendant-Intervenors

argue the court lacks subject-matter jurisdiction because Plaintiff failed to avail itself of

adequate judicial remedies under 28 U.S.C. § 1581(a). The court finds that it lacks

subject-matter jurisdiction to hear Plaintiff’s claims and dismisses Plaintiff’s complaint for

the reasons set forth below.

                                       BACKGROUND

         PF Stores is an importer of wooden bedroom furniture manufactured in China by

Dream Rooms Furniture (Shanghai) Co. Ltd. (“Dream”). See Compl. ¶¶ 1, 4–5, Aug. 26,

2014, ECF No. 2 (“Pl.’s Compl.”).           PF Stores’ entries were subject to the third

administrative review of the antidumping order on wooden bedroom furniture from the

People’s Republic of China, covering entries made in 2007. See Wooden Bedroom

Furniture from the People’s Republic of China, 74 Fed. Reg. 41,374 (Dep’t Commerce

Aug. 17, 2009) (final results of antidumping duty administrative review and new shipper

reviews). Dream filed suit in this Court contesting the results of the third administrative

review and obtained an injunction against liquidation of its entries on September 22, 2009.

1
    Further citations to Title 28 of the U.S. Code are to the 2012 edition.
Court No. 14-00200                                                                 Page 3

See Pl.’s Compl. ¶¶ 6–7, Ex. A. The injunction provided that the subject entries “shall be

liquidated in accordance with the final court decision in this action, including all appeals

and remand proceedings, as provided in section 516A of the Tariff Act of 1930, as

amended, 19 U.S.C. § 1516a(e) (2006).” Pl.’s Compl. Ex. A at 2.

       The court consolidated Dream’s action with five other actions contesting the results

of the third administrative review on November 6, 2009. Def.’s Mot. Dismiss & App. DA40,

Dec. 3, 2014, ECF No. 14 (“Def.’s Mot. & App.”). After several remands, the court

sustained Commerce’s third remand results on February 5, 2013.               See Lifestyle

Enterprise, Inc. v. United States, 37 CIT __, __, 896 F. Supp. 2d 1297, 1299 (2013). Two

parties to the consolidated action, not including Dream, appealed the court’s slip opinions.

See Def.’s Mot. & App. DA33–DA34 (docket listing notices of appeal).

       On June 13, 2013, the Lifestyle court granted an unopposed motion made by the

Defendant-Intervenors in this case, to sever and deconsolidate three of the previously

consolidated actions, including Dream’s action. See Def.’s Mot. & App. DA34, DA42–43.

The court further ordered that Dream’s injunction was “hereby amended as follows . . . all

entries exported by Orient International Holding Shanghai Foreign Trade Co., Ltd. and

Dream Rooms Furniture (Shanghai) Co., Ltd. shall be liquidated without delay in

accordance with this Court’s February 5, 2013 final judgment for the period January 1,

2007 to December 31, 2007 . . . .” Id. at DA43

       In a message dated June 25, 2013, Commerce issued instructions to U.S.

Customs and Border Protection (“CBP”) to liquidate entries of furniture exported by

Dream during 2007 at a final rate of 216.01%. See Pl.’s Compl. ¶ 10, Ex. B at 1. In
Court No. 14-00200                                                                     Page 4

September 2013, CBP liquidated the entries imported by Plaintiff and exported by Dream

at the rates provided in these instructions. Def.’s Mot. & App. DA46, DA49. Plaintiff filed

protests arguing that the entries it imported from Dream were deemed liquidated pursuant

to Section 504(d) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1504(d) (2012),2 six

months from the court’s February 5, 2013 slip opinion. Id. at DA44–DA49. CBP denied

these protests on May 21 and June 5, 2014. Id. at DA46, DA49.

       Plaintiff does not challenge the denial of its protests in this action. Rather, Plaintiff

argues that it challenges various Commerce actions for which the court has subject-

matter jurisdiction pursuant to 28 U.S.C. § 1581(i) because the court could not have

jurisdiction pursuant to 28 U.S.C. §§ 1581(a) or (c). See Pl.’s Mot. Opposing Def.’s Mot.

Dismiss 3–4, Feb. 6, 2015, ECF No. 19 (“Pl.’s Opp’n Def.’s Mot. Dismiss”).3

2
  Further citations to the Tariff Act of 1930, as amended, are to the relevant portions of
Title 19 of the U.S. Code, 2012 edition.
3
   Plaintiff enumerated three counts in its complaint: (1) Commerce’s liquidation
instructions were null and void because they were issued beyond the ten day period
prescribed in 19 U.S.C. § 1675(a)(3)(C) for Commerce to transmit to the Federal Register
for publication the final disposition and to issue instructions to the Customs Service with
respect to the liquidation of entries pursuant to the review, and thus, the subject entries
should be “deemed liquidated” pursuant to 19 U.S.C. § 1504(d); (2) the period for deemed
liquidation under 19 U.S.C. § 1504(d) is triggered when final results of the third remand
are published in the Federal Register, and here, final results of the third remand were
never published in the Federal Register, thus, the entries should be treated as having
been liquidated under § 1504(d); and (3) pursuant to the Administrative Procedure Act, 5
U.S.C. § 702 (“APA”) Commerce’s instructions were erroneous because they were
untimely and never published in the Federal Register, thus, the subject imports were
deemed liquidated. See Pl.’s Compl. ¶¶ 13–20.
Court No. 14-00200                                                                     Page 5

                                      JURISDICTION

       “The Court of International Trade, like all federal courts, is a court of limited

jurisdiction.” See Sakar Int’l, Inc. v. United States, 516 F.3d 1340, 1349 (Fed. Cir. 2008).

A party invoking the court’s jurisdiction bears the burden of establishing it and may not

expand jurisdiction by creative pleading. Norsk Hydro Can., Inc. v. United States, 472
F.3d 1347, 1355 (Fed. Cir. 2006). It is well-settled that a party may not invoke jurisdiction

under § 1581(i) “when jurisdiction under another subsection of § 1581 is or could have

been available, unless the remedy provided under that other subsection would be

manifestly inadequate.” Miller & Co. v. United States, 824 F.2d 961, 963 (Fed. Cir. 1987)

(citations omitted). Thus, the court must look to the “true nature of the action” to determine

whether jurisdiction under § 1581(i) exists. Norsk Hydro Can., 472 F.3d at 1355.

                                       DISCUSSION

       As indicated above, Plaintiff claims jurisdiction exists pursuant to 28 U.S.C.

§ 1581(i), the Court of International Trade’s residual jurisdiction, which provides:

       (i) In addition to the jurisdiction conferred upon the Court of International
       Trade by subsections (a)-(h) of this section and subject to the exception set
       forth in subsection (j) of this section, the Court of International Trade shall
       have exclusive jurisdiction 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--

              (1) revenue from imports or tonnage;
              (2) tariffs, duties, fees, or other taxes on the importation of
              merchandise for reasons other than the raising of revenue;
              (3) embargoes or other quantitative restrictions on the importation of
              merchandise for reasons other than the protection of the public
              health or safety; or
Court No. 14-00200                                                                      Page 6

              (4) administration and enforcement with respect to the matters
              referred to in paragraphs (1)-(3) of this subsection and subsections
              (a)-(h) of this section.

       This subsection shall not confer jurisdiction over an antidumping or
       countervailing duty determination which is reviewable either by the Court of
       International Trade under section 516A(a) of the Tariff Act of 1930 or by a
       binational panel under article 1904 of the North American Free Trade
       Agreement or the United States-Canada Free-Trade Agreement and
       section 516A(g) of the Tariff Act of 1930.

28 U.S.C. § 1581(i). The true nature of Plaintiff’s claims involves a protestable CBP

decision regarding liquidation and/or deemed liquidation, therefore § 1581(a) jurisdiction

would not have been manifestly inadequate.

       Plaintiff asserts, in each of its three counts, that its entries were deemed liquidated

pursuant to 19 U.S.C. § 1504(d). See Pl.’s Compl. ¶¶ 13–20. Plaintiff argues that deemed

liquidation occurred as a result of a failure of Commerce to: 1) comply with a statutory

time period for issuing liquidation instructions, 2) publish notice of a final disposition in the

Federal Register, or 3) issue valid liquidation instructions in violation of the APA. Id. All

of these “deemed liquidation” theories essentially argue that administrative errors caused

CBP to liquidate entries it should not have liquidated. However, a decision by CBP as to

liquidation is a protestable CBP decision regardless of any administrative errors which

Commerce may have committed prior to CBP’s decision. While CBP makes no decision

as to the substance of Commerce’s instructions, i.e., antidumping duty rates, the decision

as to when to implement those instructions through the process of liquidation belongs to

CBP. See, e.g., Cemex, S.A. v. United States, 384 F.3d 1314, 1324 (Fed. Cir. 2004)
Court No. 14-00200                                                                   Page 7

(footnotes omitted) (explaining that Customs makes no decision in calculating

antidumping duties, but makes a decision regarding liquidation).

      Section 1504(d) provides:

      (d) Removal of suspension
      Except as provided in section 1675(a)(3) of this title, when a suspension
      required by statute or court order is removed, the Customs Service shall
      liquidate the entry, unless liquidation is extended under subsection (b) of
      this section, within 6 months after receiving notice of the removal from the
      Department of Commerce, other agency, or a court with jurisdiction over the
      entry. Any entry (other than an entry with respect to which liquidation has
      been extended under subsection (b) of this section) not liquidated by the
      Customs Service within 6 months after receiving such notice shall be
      treated as having been liquidated at the rate of duty, value, quantity, and
      amount of duty asserted by the importer of record or (in the case of a
      drawback entry or claim) at the drawback amount asserted by the drawback
      claimant.

19 U.S.C. § 1504(d). Section 1514(a)(5) specifically identifies decisions under § 1504(d)

as protestable decisions. It provides that CBP decisions,

      including the legality of all orders and findings entering into the same, as
      to--
             ...

             (5) the liquidation or reliquidation of an entry, or reconciliation as to
             the issues contained therein, or any modification thereof, including
             the liquidation of an entry, pursuant to either section 1500 of this title
             or section 1504 of this title;
             ...

      shall be final and conclusive upon all persons . . . unless a protest is filed in
      accordance with this section, or unless a civil action contesting the denial
      of a protest, in whole or in part, is commenced in the United States Court of
      International Trade in accordance with chapter 169 of Title 28 within the
      time prescribed by section 2636 of that title.

19 U.S.C. § 1514(a)(5). Pursuant to 19 U.S.C. § 1515, CBP reviews protests of CBP

decisions listed in 19 U.S.C. § 1514, and the Court of International Trade reviews actions
Court No. 14-00200                                                                   Page 8

contesting the denial of such protests under its 28 U.S.C. § 1581(a) jurisdiction.

Therefore, under 19 U.S.C. § 1514(a)(5), Plaintiff could have protested the liquidation

based upon a claim that the goods had already been deemed liquidated and contested

any denial of such a protest under 28 U.S.C. § 1581(a). While Plaintiff protested CBP’s

liquidation of its entries pursuant to § 1514(a)(5), it did not file a claim at this Court

contesting the denial of its protests. As Plaintiff did not pay the duties and interest due

upon liquidation, it did not meet the jurisdictional prerequisites for bringing an action to

challenge the denial of a protest. See 28 U.S.C. § 2637(a). However, as the U.S. Court

of Appeals for the Federal Circuit has held, jurisdiction under § 1581(i) is not appropriate

“when jurisdiction under another subsection of § 1581 is or could have been available . .

. .” Miller, 824 F.2d at 963 (citations omitted). Thus, Plaintiff’s claims must be dismissed

for lack of jurisdiction because a remedy under § 1581(a) would not have been manifestly

inadequate.

       The Court of Appeals addressed deemed liquidation claims in Fujitsu Gen. Am.,

Inc. v. United States, 283 F.3d 1364, 1373–76 (Fed. Cir. 2002). In Fujitsu, the plaintiff

argued that the Court of International Trade had § 1581(i) jurisdiction to review its untimely

protested deemed liquidation claims. Id. The plaintiff filed several protests with Customs,

contesting interest assessed on its entries. Id. at 1369. Subsequently, the plaintiff filed

supplemental letters with Customs claiming that its merchandise had been deemed

liquidated pursuant to 19 U.S.C. § 1504(d) at the rate claimed at the time of entry. Id. at

1369–70. The plaintiff’s deemed liquidation theory was rejected because the plaintiff

“could have invoked the jurisdiction of the Court of International Trade under 28 U.S.C.
Court No. 14-00200                                                                   Page 9

§ 1581(a) if, pursuant to 19 U.S.C. § 1514(a)(5), it had timely protested the liquidations .

. . .” Id. at 1374. At the time of Fujitsu, the clause “including the liquidation of an entry,

pursuant to either section 1500 or section 1504 of this title” was not in 19 U.S.C. § 1514,

and, yet, the Court of Appeals held that decisions as to deemed liquidation were

protestable and not subject to § 1581(i) jurisdiction. The subsequent amendment of the

statute to explicitly include “section 1504” in the text only confirmed the Court of Appeals’

holding. See Alden Leeds Inc. v. United States, 476 Fed. App’x 393, 397 (Fed. Cir. 2012).

       Responding to Defendant’s motion to dismiss, Plaintiff argues that § 1581(c) is not

available because it is not challenging the final results of an administrative review, but

rather Commerce’s “automatic assessment procedure.” Pl.’s Opp’n Def.’s Mot. & App. 6.

The court agrees in part with Plaintiff’s argument. Plaintiff could not have brought its

claims in a § 1581(c) case. As Plaintiff explains, “[i]t had no objections to the Court’s

June 2013 order.” Id. at 7. Moreover, as Plaintiff explains, “[t]here is no dispute that

Commerce’s liquidation instructions are consistent with both the final results and the

court’s June, 2013 order.” Id. at 8. However, this does not save Plaintiff because as

discussed above, Plaintiff’s claims are a challenge to CBP’s decision as to liquidation, or

deemed liquidation. CBP liquidated Plaintiff’s entries at the rate specified in Commerce’s

liquidation instructions. Thereafter, Plaintiff filed protests with CBP, arguing that the

entries had already been deemed liquidated at the rate asserted at the time of entry

because liquidation occurred more than six months after the Lifestyle court issued its

opinion on February 5, 2013. See Def.’s Mot. & App. 7, DA44–45, 47–48. In denying

Plaintiff’s protests, CBP determined that the goods had not been deemed liquidated at
Court No. 14-00200                                                                  Page 10

the entered rate. CBP found that pursuant to 19 U.S.C. § 1504(d), it had not received

notice that suspension of liquidation had been removed until Commerce issued liquidation

instructions on June 25, 2013. See id. at 7, DA46, DA49. According to CBP, the six

month deadline for deemed liquidation had not yet passed when CBP liquidated Plaintiff’s

entries. Id. Any objection Plaintiff had to CBP’s decision would have formed the basis of

a claim under 28 U.S.C. § 1581(a) pursuant to 19 U.S.C. § 1514(a)(5).

       Plaintiff incorrectly claims that it is challenging a Commerce decision. Pl.’s Opp’n

Def.’s Mot. & App. 6. Each of its deemed liquidation theories rest upon the foundation

that something other than Commerce’s liquidation instructions on June 25, 2013 served

as notice to Customs and triggered the running of the six months deemed liquidation

timeframe provided by 19 U.S.C. § 1504. If, under Plaintiff’s theories, something other

than Commerce’s instructions triggered the six month time frame but Customs did not

acknowledge it, that would have been Customs’ error. The court does not reach the

question of whether these theories of notice have merit. However, the true nature of

Plaintiff’s claim is that Customs failed to act as required by 19 U.S.C. § 1504(d) and that

is a protestable decision.

       Responding to Defendant-Intervenors’ motion to dismiss, Plaintiff argues “[Plaintiff]

did not file a section 1581(a) claim in this Court supra. Therefore, the [sic] 1581(a) was

not a viable option for [Plaintiff].” Pl.’s Mot. Opposing Def.-Intervenors’ Mot. Dismiss 4,

Feb. 6, 2015, ECF No. 20 (“Pl.’s Opp’n Def-Intervenors’ Mot. Dismiss”). Plaintiff’s reasons

for not filing a § 1581(a) claim, not having “the $190,000 in duties and interest to pay prior

to the filing of the summons, and, more importantly [that] there was no Customs error in
Court No. 14-00200                                                                  Page 11

the liquidations,” fall flat.   Pl.’s Opp’n Def-Intervenors’ Mot. Dismiss 3–4.      Plaintiff’s

inability to pay the duties necessary to file a § 1581(a) claim do not make remedies

available under § 1581(a) inadequate. See Int’l Custom Prods., Inc. v. United States, 467
F.3d 1324, 1327 (Fed. Cir. 2006) (citations omitted). Moreover, as the court discussed

above, the true nature of Plaintiff’s claims is that CBP incorrectly liquidated its

merchandise. That CBP decision is protestable. Plaintiff’s argument that “there was no

Customs error in the liquidations” does not change the fact that it is complaining about a

CBP decision to liquidate the goods. Plaintiff’s artful pleading and responses to motions

to dismiss do not set forth a claim for which the court has subject-matter jurisdiction.

       Plaintiff unpersuasively attempts to analogize its claims and the facts of this case

to a “proactive” version of the facts of United States v. Cherry Hill Textiles, Inc., 112 F.3d
1550 (Fed. Cir. 1997). Plaintiff argues that Fujitsu “would be inapplicable where as here

[Plaintiff] is, inter alia, in essence defending a possible government enforcement action.”

Pl.’s Opp’n Def-Intervenors’ Mot. Dismiss 5. In Cherry Hill, the Court of Appeals allowed

the defendant importer and surety to pursue a deemed liquidation theory as an affirmative

defense in an enforcement action brought by the government. The facts and reasoning

of that case are inapplicable. The entire reasoning of the case was premised on the fact

that defendants were involved in a government enforcement action, not pursuing a claim

against the government. Cherry Hill, 112 F.3d at 1552.

       Plaintiff’s attempt to analogize to Shinyei Corp. of Am. v. United States, 355 F.3d
1297 (Fed. Cir. 2004), also must fail.       As Defendant explains, Plaintiff’s argument

challenging liquidation instructions pursuant to Shinyei Corp. is faulty because
Court No. 14-00200                                                                 Page 12

“Commerce’s liquidation instructions are consistent with both the final results and the

Court’s June 2013 order that directed liquidation without delay.” Def.’s Mot. & App. 13.

As indicated above, Plaintiff concedes this in its brief. See Pl.’s Opp’n Def.’s Mot. Dismiss

8. None of the other cases Plaintiff cites to support this argument persuade the court

either. The distinguishing factor in all those cases is that the party challenged the

substance of Commerce’s liquidation instructions, not CBP’s decision to liquidate. See

Shinyei Corp., 355 F.3d at 1306 (explaining that the plaintiff’s action challenged the rate

in Commerce’s liquidation instructions as inconsistent with a final court decision, a

Commerce decision not listed in 19 U.S.C. § 1516a); Mitsubishi Elecs., 44 F.3d at 977

(denying jurisdiction under § 1581(a) because the plaintiff’s challenge was to Commerce’s

decision as to the rates in its liquidation instructions).

       For the foregoing reasons, Plaintiff’s claims are dismissed with prejudice. The

court will issue a judgment in accordance with this opinion.

                                                     /s/ Claire R. Kelly
                                                    Claire R. Kelly, Judge

Dated: June 9, 2015
       New York, New York