Court Opinion

ID: 817411
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:50:20.511835+00
Date Added: 2024-06-11T15:37:28.066909
License: Public Domain

Slip Op. 08-135

            UNITED STATES COURT OF INTERNATIONAL TRADE
_______________________________
                                :
SHANDONG HUARONG MACHINERY CO.,:
LTD., TIANJIN MACHINERY IMPORT :
& EXPORT CORP., and SHANDONG    :
MACHINERY IMPORT & EXPORT CO., :
                                :
                Plaintiffs,     :
                                :
     v.                         : Before: Richard K. Eaton, Judge
                                :
UNITED STATES,                  : Court No. 06-00345
                                :
                Defendant,      :
     and                        :
                                :
AMES TRUE TEMPER,               :
                                :
          Defendant-Intervenor.:
_______________________________:

                             OPINION

[Defendant United States Department of Commerce’s motion to
dismiss granted and case dismissed]

                                           Dated: December 10, 2008

     Hume & Associates LLC (Robert T. Hume and Marisol Rojo), for
plaintiffs Shandong Huarong Machinery Co., Ltd., Tianjin
Machinery Import & Export Corp., and Shandong Machinery Import &
Export Company.

     Gregory G. Katsas, Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
United States Department of Justice, Civil Division, Commercial
Litigation Branch, (Courtney E. Sheehan), Office of the Chief
Counsel, Import Administration, United States Department of
Commerce (Nithya Nagarajan), of counsel, for defendant.

     Wiley Rein LLP (Eileen P. Bradner and Timothy C.
Brightbill), for defendant-intervenor Ames True Temper.
Court No. 06-00345                                        Page 2

     Eaton, Judge: Before the court is the question of whether

plaintiffs’ case, challenging the results in an antidumping

periodic review, should be dismissed as moot.    On October 31,

2007, defendant the United States, on behalf of the United States

Department of Commerce (“Commerce” or “the Department”), filed a

motion to dismiss certain counts of plaintiffs’ complaint on the

grounds that the merchandise that was the subject of the counts

had been liquidated.     See Def.’s Partial Mot. Dismiss (“Def.’s

Mot.”).   In response, plaintiffs Shandong Huarong Machinery Co.,

Ltd., Tianjin Machinery Import & Export Corp., and Shandong

Machinery Import & Export Company replied, and asked the court to

find that all claims in the complaint were moot and to dismiss

the action.     See Pls.’ Resp. Def.’s Mot. Dismiss (“Pls.’ Resp.”).

Defendant subsequently agreed that a full dismissal was

appropriate.1    See Def.’s Reply Pls.’ Resp. (“Def.’s Reply”).

     After initially supporting defendant’s motion to dismiss

(“Def.-Int.’s Resp.”), defendant-intervenor Ames True Temper

(“Ames” or “defendant-intervenor”) filed a reply brief, opposing

complete dismissal and seeking relief in the form of the

imposition of the duty rates found in the final results of the

periodic review to the already liquidated entries.     See Def.-

Int.’s Reply Br. (“Def.-Int.’s Reply”).    Accordingly, the only

     1
          In light of defendant’s position, the court will treat
its motion as one to dismiss the complaint in its entirety.
Court No. 06-00345                                           Page 3

party that seeks to continue the court’s participation in this

case is Ames.    For the reasons that follow, the court grants

defendant’s motion to dismiss.

                              BACKGROUND

        On September 14, 2006, Commerce issued the Final Results of

Antidumping Duty Administrative Reviews and Final Rescission and

Partial Rescission of Antidumping Administrative Reviews, 71 Fed.

Reg. 54,269 (Dep’t of Commerce Sept. 14, 2006) (“Final Results”).

These results addressed the fourteenth administrative review of

the antidumping duty order for heavy forged hand tools, finished

or unfinished, with or without handles from the People’s Republic

of China, entered or withdrawn from the warehouse for consumption

from February 1, 2004, through January 31, 2005 (the “Antidumping

Order”).     See Pls.’ Resp. 2.   Plaintiffs challenged the Final

Results by filing their complaint in this Court on October 19,

2006.    On November 13, 2006, in order to enjoin the liquidation

of the subject merchandise during the pendency of this action,

plaintiffs filed a consent motion for a preliminary injunction.

        The injunction order, a draft of which was prepared by

plaintiffs, provided that it would affect entries of subject

merchandise that:

             remain unliquidated as of 5:00 p.m. on the
             fifth business day after which copies of this
             Order are personally served on the following
Court No. 06-00345                                        Page 4

           individuals and received by them or their
           delegates

           Ann Sebastian, APO/Unit Docket Center, Room 1870
           Import Administration, International
           Trade Administration
           U.S. Department of Commerce, 14th Street and
           Constitution Avenue, NW
           Washington, DC

           Hon. Robert C. Bonner, Commissioner of Customs
           Attn: Alfonso Robles, Esq., Chief Counsel, U.S. Customs
           Service
           Room 44B, 1300 Pennsylvania Avenue, NW
           Washington[,] DC

           Stephen Tosini, Esq., United States Department of
           Justice
           Civil Division, Commercial Litigation Branch
           1100 L Street, NW
           Washington[,] DC 20530

Shandong Huarong Machin. Co. v. United States, Court No. 06-

00345, at 2-3 (Nov. 17, 2006) (injunction order).

      Although the injunction order was signed and entered,

plaintiffs failed to provide for its proper service on the

officials named therein, including Ann Sebastian at Commerce.

Def.’s Mot. 3.   As a result, Ms. Sebastian did not direct United

States Customs and Border Protection (“Customs”) to suspend the

liquidation of entries subject to the challenged administrative

review.   See Def.’s Mot. 3, Ex. A.

      Subsequently, Commerce learned that the injunction order had

not been served and contacted plaintiffs’ counsel.     Def.’s Mot.

3.   On May 2, 2007, plaintiffs’ counsel mailed copies of the

injunction order to the intended recipients and on May 8, 2007
Court No. 06-00345                                       Page 5

served it by hand on Ms. Sebastian.   Def.’s Mot. 3.

     On October 31, 2007, defendant filed its motion to dismiss

certain counts in the complaint.   Defendant argued that these

counts were moot because, as a result of the failure to timely

serve the injunction order, the entries of plaintiffs’ subject

merchandise were deemed liquidated on March 14, 2007 pursuant to

19 U.S.C. § 1504(d).   See generally Def.’s Mot.2   Subsequent to

the filing of plaintiffs’ response to defendant’s motion,

defendant and plaintiffs agreed that dismissal of the full

complaint was appropriate.3   Def.’s Reply 1 n.1.

     Ames, however, declined to consent to a dismissal4 and asks

     2
           Defendant stated in its motion to dismiss that a live
case or controversy remained with respect to certain counts
because a judgment in plaintiffs’ favor regarding those counts
“could alter the cash deposit rate upon merchandise related to
those counts.” Def.’s Mot. 8; see Hylsa S.A. de C.V. v. United
States, 31 CIT __, __, 469 F. Supp. 2d 1341, 1345 (2007). As
explained infra, defendant subsequently agreed that the entire
complaint should be dismissed. See Def.’s Reply 3.
     3
          Defendant noted

     although we disagree with plaintiffs’ conclusion
     concerning the Court’s jurisdiction over this matter,
     the burden remains with plaintiffs who have indicated
     that they do not intend to satisfy it. Consequently,
     because plaintiffs contend that this court lacks
     subject matter jurisdiction and has [sic] evidenced an
     intent not to prosecute its claims, the complaint
     should be dismissed in its entirety.

Def.’s Reply 3.
     4
          Upon receipt of plaintiffs’ response,
                                                          (continued...)
Court No. 06-00345                                            Page 6

the court to order reliquidation of plaintiffs’ merchandise at

the rates determined in the Final Results, or to remand the case

to Commerce with instructions to order liquidation at those

rates.

                         STANDARD OF REVIEW

     Pursuant to 28 U.S.C. § 1581(c): “The Court of International

Trade shall have exclusive jurisdiction of any civil action

commenced under section 516A [19 U.S.C. § 1516a] of the Tariff

Act of 1930.”

     Because it wishes the court to proceed, it is Ames’ burden

to demonstrate that jurisdiction exists.      See Abitibi-Consol.

Inc. v. United States, 30 CIT __, __, 437 F. Supp. 2d 1352, 1355

(2006).

     4
      (...continued)
              defendant sought and plaintiff[s] agreed to
              seek a stipulation of dismissal. However,
              defendant-intervenor . . . would not consent
              to the dismissal of plaintiffs’ case,
              indicating that it intended to request
              reliquidation of plaintiffs’ entries that had
              been deemed liquidated by operation of law.

Def.’s Reply 1 n.1 (citation omitted).
Court No. 06-00345                                      Page 7

                            DISCUSSION

I.   Suspension, Liquidation and Injunctions

     The question of the court’s jurisdiction in this matter

turns on the liquidation5 process for entries of merchandise

subject to a periodic administrative review.   As further

explained below, generally, once entries have been liquidated,

any question relating to the amount of duties to be applied to

those entries is rendered moot.   Thus, the availability of Ames’

claim for relief turns on the statutory process of liquidation.

     In order to ensure that the rate of duty determined in the

final results of a periodic review are applied to subject

merchandise, the statute provides that “[l]iquidation of a

particular class of entries is suspended when Commerce publishes

in the Federal Register an affirmative preliminary or final

determination in an antidumping investigation covering those

entries.”   Int’l Trading Co. v. United States, 281 F.3d 1268,

1272 (Fed. Cir. 2002) (“Int’l Trading”) (citations omitted); SKF

USA Inc. v. United States, 28 CIT 170, 181, 316 F. Supp. 2d 1322,

1333 (2004) (“SKF I”) (“If the ITA’s determination is

affirmative, all entries of the subject merchandise are ordered

suspended.”) (citing 19 U.S.C. § 1673b(d)); 19 U.S.C.

     5
          “Liquidation of a party’s entries is the final
computation or ascertainment of duties accruing on those
entries.” SKF USA Inc. v. United States, 28 CIT 170, 173, 316 F.
Supp. 2d 1322, 1327 (2004) (citations omitted).
Court No. 06-00345                                          Page 8

§ 1673b(d)(2); 19 U.S.C. § 1673d(c)(1)(C).     Thus, following an

affirmative unfair trade finding, liquidation is suspended to

preserve the entries for liquidation at the assessment rate found

in the final determination. Int’l Trading, 281 F.3d at 1272.         The

suspension of liquidation is terminated, however, when the final

results are published in the Federal Register so that Customs may

liquidate the merchandise at the finally determined rate.       Id.;

see 19 U.S.C. § 1673e(a) (providing that antidumping duty order

should set forth the antidumping duty rate and directing Customs

officers to assess antidumping duties promptly against the

entries subject to the order); 19 U.S.C. § 1675(a)(2)(C)

(providing that the final results of an administrative review

should set forth the determination of antidumping duty rates that

“shall be the basis for the assessment of countervailing or

antidumping duties” on the subject entries).

     If Customs does not act, however, another provision comes

into play.    By statute, entries of merchandise not liquidated by

Customs within six months of the removal of suspension of

liquidation are deemed liquidated at the entered rate:

             Any entry (other than an entry with respect
             to which liquidation has been extended under
             subsection (b) [relating to an extension of
             the six month period by the Secretary of
             Commerce] 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
Court No. 06-00345                                        Page 9

          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)(2006).    Thus, for deemed liquidation to take

place:

          (1) the suspension of liquidation that was in
          place must have been removed; (2) Customs
          must have received notice of the removal of
          the suspension; and (3) Customs must not
          liquidate the entry at issue within six
          months of receiving such notice.

Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1376

(Fed. Cir. 2002) (“Fujitsu”).

     Deemed liquidation, however, is not the necessary result of

the passage of time.    Where a final determination6 is challenged

in this Court, all liquidation, including deemed liquidation, may

be enjoined during the pendency of the action.    19 U.S.C. § 1516a

(c)(2) (“The United States Court of International Trade may

enjoin the liquidation of some or all entries of merchandise

covered by a determination of the . . . administering authority .

. . upon request by an interested party for such relief and a

proper showing that the requested relief should be granted under

the circumstances.”).    The purpose of the injunction is to

suspend liquidation and to preserve merchandise for liquidation

     6
          Determinations subject to this provision are described
in 19 U.S.C. § 1516a(a)(2). See 19 U.S.C. § 1516a(c)(2).
Court No. 06-00345                                        Page 10

at the rate finally determined following judicial review.7

II.   The Court Lacks Subject Matter Jurisdiction

      A.     The Subject Entries Are Deemed Liquidated Pursuant to
             19 U.S.C. § 1504(d)

      The “mootness doctrine” results from the case or controversy

requirement found in Article III of the United States

Constitution.     See 13A Charles Alan Wright, Arthur R. Miller &

Edward H. Cooper, Federal Practice and Procedure § 3533 (2d ed.

1987).     The Supreme Court has explained that a case becomes moot

when it has “lost its character as a present, live controversy of

the kind that must exist if we are to avoid [advisory] opinions

on abstract propositions of law.”     Hall v. Beals, 396 U.S. 45, 48

(1969) (citations omitted).    This requirement of an actual

controversy exists at all stages of an action.      See, e.g.,

Steffel v. Thompson, 415 U.S. 452, 461 n.10 (1974).

      In the context of an unfair trade case, Courts have

generally found that once entries have been liquidated, there is

no case or controversy with respect to the duty rate to be

applied to them.    As a result, liquidation moots a court

challenge to the duty rate imposed in an administrative review:

      7
          In Fujitsu, 283 F.3d at 1379, the Federal Circuit found
that the suspension would end when the court decision in the
action was “final” or conclusive such that it could no longer be
appealed, i.e., when “the time for petitioning the Supreme Court
for certiorari expires without the filing of a petition.” Id.
Court No. 06-00345                                        Page 11

“Once liquidation occurs, it permanently deprives a party of the

opportunity to contest Commerce’s results for the administrative

review by rendering the party’s cause of action moot.”     SKF I, 28

CIT at 173, 316 F. Supp. 2d at 1327 (citing Zenith Radio Corp. v.

United States, 710 F.2d 806, 809-810 (Fed. Cir. 1983)

(“Zenith”)); see also Fujitsu, 283 F.3d at 1376.   In this

respect, Courts have made no distinction between actual

liquidation made by Customs and deemed liquidation.     See Koyo

Corp. v. United States, 497 F.3d 1231, 1237 (Fed. Cir. 2007)

(“Koyo”) (finding that, absent a valid protest, “the rate of duty

that applies to a deemed liquidation under 19 U.S.C. § 1504(d) is

the duty rate claimed on the importer’s entry papers.”)

(citations omitted).

     All parties to this action agree that the injunction order

was ineffective because it was not properly served and that the

three conditions for deemed liquidation have been met.    Notably,

Ames does not dispute that the merchandise has been liquidated

pursuant to the deemed liquidation statute.   See Def.-Int.’s

Reply 6.   Thus, it follows that the liquidation of the subject

merchandise has eliminated any case or controversy cognizable by

the court as to the amount of any antidumping duty rate to be

applied to that merchandise.   See Zenith, 710 F.2d at 810

(stating “liquidation would indeed eliminate the only remedy

available to Zenith for an incorrect review determination by
Court No. 06-00345                                          Page 12

depriving the trial court of the ability to assess dumping duties

on Zenith’s competitors in accordance with a correct margin on

entries in the . . . review period.”); Cemex, S.A. v. United

States, 384 F.3d 1314 (Fed. Cir. 2004) (“Cemex”) (holding that

domestic producers could not gain relief by way of reliquidation

upon challenging Customs’ erroneous liquidation of entries); see

also Shinyei Corp. v. United States, 524 F.3d 1274, 1283 (Fed.

Cir. 2008) (stating that “when an entry is deemed liquidated, the

duty rate is the deposit rate, and Customs may not recover any

additional duties from the importer thereafter.”) (citations

omitted).

     B.     The Court is Without Jurisdiction to Hear Ames’
            Underlying Claims Which Were Rendered Moot by
            Liquidation

     Although Ames concedes that plaintiffs’ entries have been

liquidated, it contends that the court should not dismiss this

case because a live case or controversy remains:

            the vast majority of subject merchandise was
            entered at inappropriately low rates,
            including some rates that were obtained
            through fraudulent means. During the course
            of recent administrative reviews, Commerce
            has determined that certain respondents had
            engaged in agent sales schemes, a finding
            that this Court subsequently affirmed. Using
            these schemes, certain low-margin producers
            “rented out” their antidumping duty margin to
            high-margin producers in exchange for a
            nominal commission fee. As a result, due to
            the overlap in administrative reviews and the
Court No. 06-00345                                          Page 13

          existence of the agent sales, a large
          percentage of the entries in the current
          proceeding appear to have been entered at the
          low duty rates from prior reviews, before the
          agent sales schemes were discovered and fully
          addressed by Commerce and this Court.

Def.-Int.’s Reply 3 (citations omitted).      Put another way, Ames’

argument is that, because plaintiffs’ merchandise was liquidated

at “inappropriately low” duty rates, the court should order

reliquidation at the rates found in the Final Results.      Ames

acknowledges that these “inappropriately low” duty rates were the

product of prior administrative reviews, but insists that they

have become “intertwined with the claims in this action.”      Def.-

Int.’s Reply 4.    Ames apparently believes that the claimed

illegitimacy of the entered duty rates provides a basis for

jurisdiction.     See Def.-Int.’s Reply 2.

     Ames’ arguments are unpersuasive.       As noted, the general

rule is that liquidation renders moot an action brought under 19

U.S.C. § 1516a(a)(2)(A)(i)(I) challenging the amount of the

dumping duties assessed on subject merchandise following a final

determination. See SKF I, 28 CIT at 173, 316 F. Supp. 2d at 1327

(citing Zenith, 710 F.2d at 809-810) (“Once liquidation occurs,

it permanently deprives a party of the opportunity to contest

Commerce’s results for the administrative review by rendering the

party’s cause of action moot.”).

     While the Court of Appeals for the Federal Circuit and this
Court No. 06-00345                                      Page 14

Court have recognized exceptions8 to the general rule, these

exceptions are inapplicable here.   That is, no Court has found

that it has jurisdiction to order reliquidation, at an increased

rate, because merchandise was deemed liquidated at an

inappropriately low entered rate determined in a previous review.

As defendant points out, those cases where reliquidation has been

ordered all involve errors made by government agencies in

contravention of a statute or in violation of a court ordered

     8
          For example, there are circumstances where, following
liquidation, this Court may retain jurisdiction to decide matters
relating to the dumping margins found in the final determination.
See AK Steel Corp. v. United States, 27 CIT 1382, 281 F. Supp. 2d
1318 (2003) (holding Customs’ liquidation, despite the presence
of a valid injunction, void ab initio); Hylsa S.A. de C.V. v.
United States, 31 CIT __, __, 469 F. Supp. 2d 1341, 1345
(2007)(holding that although liquidation mooted any claim for
reliquidation, it did not moot challenge to the dumping margin
determined in an administrative review where a finding of a non-
de-minimis margin could have consequences in the ability to seek
the revocation of the underlying order); Koyo, 497 F.3d at 1231
(holding that importer may protest the failure of Customs to
liquidate entries at the rate contained in Commerce’s
instructions, even though such failure had resulted in the
passage of time necessary for deemed liquidation to take place);
Gerdau Ameristeel Corp. v. United States, 519 F.3d 1336, 1340-
1343 (Fed. Cir. 2008) (holding that liquidation did not moot
challenge to dumping margins themselves because “there remains an
issue having ongoing legal consequences” relating to the possible
revocation of the underlying antidumping order, but that
liquidation ended plaintiff’s right to challenge the duty
assessed on liquidated merchandise); Shinyei Corp. v. United
States, 524 F.3d 1274 (Fed. Cir. 2008) (holding that deemed
liquidated entries may be reliquidated where Commerce issues
erroneous liquidation instructions); but see SKF USA, Inc. v.
United States, 512 F.3d 1326, 1332 (Fed. Cir. 2008) (“SKF II”)
(holding that, where no injunction was entered, deemed
liquidation rendered moot importer’s challenge to correctness of
antidumping duty determined by Commerce).
Court No. 06-00345                                        Page 15

injunction.    See Def.’s Reply 4.   Those cases are far removed

from deemed liquidation resulting from a law office failure.

     Thus, there is nothing in defendant’s case that would take

it out of the rule laid down in SKF I.     See SKF I, 28 CIT at 174,

316 F. Supp. 2d at 1327 (“After an antidumping review

determination, if a party’s entries are liquidated prior to

judicial review of the determination and antidumping duties are

assessed, any outstanding challenges as to those entries are

rendered moot because liquidation, absent errors by Commerce or

Customs, places the entries outside the jurisdiction of the

court.”) (footnote and citation omitted).    Defendant makes no

claim that it seeks the court’s assistance through a finding that

would correct an agency mistake.     Therefore, the only remedy Ames

seeks – reliquidation – is one the court cannot order as a

consequence of the application of the mootness doctrine.

III. Ames’ Claims Are Beyond the Scope of The Action Before This
     Court

     Even if the court had jurisdiction, Ames’ action would be

dismissed.    Under the theory proposed by Ames, the court is asked

to find that the entered rate was “inappropriately low.”    In

order to do so, the court would be required to reopen the

thirteenth administrative review, or additional prior reviews,
Court No. 06-00345                                       Page 16

which provided the basis for the entered rate.    This the court

may not do.     See Norsk Hydro Can., Inc. v. United States, 472

F.3d 1347, 1361 (Fed. Cir. 2006) (finding that administrative

reviews are limited to entries made during the period of review

in issue and that “issues relating to entries from a prior year

that were not raised for Commerce review during the appropriate

POR” would “impair the finality of any one annual review,

potentially prolonging a [countervailing duty] dispute far beyond

the year to which it relates”).    Here, this Court has previously

upheld Commerce’s final results in prior administrative reviews

and defendant-intervenor may not seek to relitigate the issues

raised in the context of those cases.     See, e.g., Ames True

Temper v. United States, 32 CIT __, Slip Op. 08-8 (Jan. 18, 2008)

(not reported in Federal Supplement) (thirteenth administrative

review); Shandong Huarong Machin. Co. v. United States, 31 CIT

__, Slip Op. 07-169 (Nov. 20, 2007) (not reported in the Federal

Supplement) (twelfth administrative review); Shandong Huarong

Machin. Co. v. United States, 31 CIT __, Slip Op. 07-3 (Jan. 9,

2007) (not reported in the Federal Supplement) (eleventh

administrative review).

     Finally, the validity of the entered rate is not a subject

of this action.    That is, it was not raised in plaintiffs’

complaint, defendant’s answer, or defendant-intervenor’s motion

to intervene.    In addition, the evidence upon which Ames hopes to
Court No. 06-00345                                       Page 17

rely is not found in the record of the fourteenth administrative

review, but rather in that of the thirteenth or prior reviews.

That being the case, defendant-intervenor cannot now seek to

begin what is essentially a new lawsuit in the context of one

that both plaintiffs and defendant wish dismissed.    See Parkdale

Int’l v. United States, 30 CIT __, __, 429 F. Supp. 2d 1324, 1337

(2006) (“Intervenor is limited to the field of litigation open to

the original parties, and cannot enlarge the issues tendered by

or arising out of plaintiff’s bill.”) (citing Torrington Co. v.

United States, 14 CIT 56, 57, 731 F. Supp. 1073, 1075 (1990)).

As defendant points out, “[t]o the extent that defendant-

intervenor desires to bring an action in its own right to protect

whatever its own interests may be, it may do so.”    Def.’s Resp.

Ct.’s Aug. 25, 2008 Letter 4.   What defendant-intervenor may not

do, however, is append a new cause of action, based on a record

not before the court, to plaintiffs’ existing suit.
Court No. 06-00345                                      Page 18

                            CONCLUSION

     For the foregoing reasons, the court grants the defendant’s

motion to dismiss.   Judgment shall be entered accordingly.

                                         /s/ Richard K. Eaton
                                         Richard K. Eaton

Dated:    December 10, 2008
          New York, New York