Yacheng Baolong Biochemical Products Co. v. U.S.

• Decision Date: 16 July 2003
• Docket Number: Slip Op. 03-84. Court No. 01-00338.
• Citation: 277 F.Supp.2d 1349
• Parties: YANCHENG BAOLONG BIOCHEMICAL PRODUCTS COMPANY, LTD., Plaintiff, v. UNITED STATES OF AMERICA, Defendant, and Crawfish Processors Alliance, et al., Defendant-Intervenors
• Court: U.S. Court of International Trade

277 F.Supp.2d 1349

YANCHENG BAOLONG BIOCHEMICAL PRODUCTS COMPANY, LTD., Plaintiff, v. UNITED STATES OF AMERICA, Defendant, and Crawfish Processors Alliance, et al., Defendant-Intervenors

Slip Op. 03-84. Court No. 01-00338.

United States Court of International Trade.

July 16, 2003.

deKieffer & Horgan (J. Kevin Horgan), Washington, DC, for Plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, A. David Lafer, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, Paul D. Kovac, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Arthur D. Sidney, Attorney, United States Department of Commerce, for Defendant, of counsel.

Adduci, Mastriani & Schaumberg, L.L.P. (Will E. Leonard, Mark R. Leventhal, John C. Steinberger), Washington, DC, for Defendant-Intervenors.

OPINION

CARMAN, Chief Judge.

Before this Court are the Court's Order to Show Cause issued on May 21, 2003, and Plaintiff's, Yancheng Baolong Biochemical Products Company, Ltd. ("Yancheng"), Motion to Clarify Or, Alternatively, Extend Injunction Against Liquidation of Entries filed on November 6, 2003. After certain facts had been revealed in the course of telephone conferences with the parties, the Court issued an Order to Show Cause providing an opportunity for the United States ("Government"), to present evidence why it should not be held in contempt of this Court's injunctive order of August 2001. Like other courts created under Article III of the Constitution, this Court "has the inherent power to determine the effect of its judgments and issue injunctions to protect against attempts to attack or evade those judgments." United States v. Hanover Ins. Co., 82 F.3d 1052, 1054 (Fed.Cir.1996). For the reasons set forth below, the Court holds that Defendant was in contempt of this Court's order of August 2001 when certain entries were liquidated in January 2003.

BACKGROUND

At the June 4, 2003 Show Cause Hearing, counsel for Defendant and counsel for Plaintiff agreed to the following facts. (Hr'g Tr. at 4-5.) In August 2001, on a consent motion, this Court issued a preliminary injunction ("August 2001 Preliminary Injunction"), enjoining the liquidation of any and all unliquidated entries of crawfish tail meat from the People's Republic of China exported by Plaintiff that were covered by Freshwater Crawfish Tail Meat from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review and New Shipper Reviews, and Final Partial Rescission of Antidumping Duty Administrative Review, 66 Fed.Reg. 20,634 (Apr. 24, 2001) (Agreed Statement of Facts at ¶ 1.) The injunction was issued pursuant to 19 U.S.C. § 1516a(c)(2), which authorizes the United States Court of International Trade ("CIT") to "enjoin the liquidation of some or all entries of merchandise covered by a determination ... upon a request by an interested party for such relief." 19 U.S.C. § 1516a(c)(2) (2000). The August 2001 Preliminary Injunction specifically stated that Defendant shall be enjoined from liquidating the subject entries "during the pendency of this action," and "that the entries subject to this injunction shall be liquidated in accordance with the final court decision as provided in 19 U.S.C. § 1516a(e)."¹ (Aug.2001 Prelim. Inj. at 1-2.) The injunction covered thirty-one entries: twenty-eight at the Port of Los Angeles, California; three at the Port of Norfolk, Virginia. (Hr'g Tr. at 67; see also Def.'s Conf. Submission of 04/10/03.)

On August 15, 2002, after consideration of Plaintiff's motion for judgment upon the agency record, the Court entered judgment in favor of Defendant sustaining the Department of Commerce's ("Commerce") determination. (Agreed Statement of Facts at ¶ 2); see also Yancheng Baolong Prods. Co., Ltd. v. United States, 219 F.Supp.2d 1317 (CIT 2002), appeal docketed, No. 03-1059 (Fed.Cir. Nov. 5, 2002). Plaintiff filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit ("Federal Circuit") on October 4, 2002. (Id. at ¶ 3.)

On November 1, 2002, Commerce sent instructions to the United States Customs Service, now organized as the Bureau of Customs and Border Protection ("Customs"), directing Customs to liquidate the subject entries. (Hr'g Tr. at 19.) On November 6, 2002, Plaintiff filed a Motion to Clarify Or, Alternatively, Extend Injunction Against Liquidation of Entries ("Plaintiff's Motion to Clarify") in this Court. (Agreed Statement of Facts at ¶ 4.) In that motion, Plaintiff asserted that Plaintiff's counsel had been informed by Defendant's counsel that unless Plaintiff obtained an injunction pending appeal, the subject entries would be liquidated. (Pl.'s Mot. to Clarify at 3.) As stated in the Motion to Clarify, Plaintiff's position was "that the injunction already issued by the Court in this action remains in effect without any further intervention by the Court." (Id. at 4.) Plaintiff stated that Defendant's counsel would consent to a new injunction pending appeal. (Id. at 3.) However, according to Plaintiff, the Crawfish Processor Alliance, the Louisiana Department of Agriculture and Forestry, and Bob Odom, Commissioner, (collectively "Defendant-Intervenors") would not consent to an injunction pending appeal because of the possible effect it could have on Defendant-Intervenors' ability to collect under the statute allowing domestic industries to receive distributions of antidumping duties.² (Id.) Neither Defendant-Intervenors nor Defendant responded to Plaintiff's Motion to Clarify.

On November 8, 2002, Customs sent liquidation instructions to its field offices directing the liquidation of all shipments of the subject merchandise exported by Yancheng and entered, or withdrawn from warehouse, for consumption during the period of review at an antidumping duty rate of 201.63% of the entered value. (Id. at ¶ 5.) On January 3, 2003, fourteen of the subject entries at the Port of Los Angeles were liquidated. (Id. at ¶ 7.) On January 10, 2003, one entry at the Port of Los Angeles was liquidated. (Id. at ¶ 8.)

The time for Defendant and Defendant-Intervenors to respond to Plaintiff's Motion to Clarify expired on December 15, 2002, and the Court scheduled a telephone conference with the parties on January 15, 2003, to discuss Plaintiff's pending motion. (Id. at ¶ 9.) At that conference, the Court indicated that the Court considered clarification unnecessary because the original preliminary injunction was still in effect. (Id.) On January 17, 2003, thirteen more entries at the Port of Los Angeles were liquidated. (Id. at ¶ 10.) On the same date, January 17, 2003, Customs issued new instructions to its field offices to stop the liquidation of the entries. (Id. at ¶ 11.)

Over the next several months, the parties continued settlement negotiations attempting to resolve this matter and submitted status reports to the Court regarding the parties' continued effort to discover the relevant facts. (Id. at ¶¶ 12-19.) On April 10, 2003, the Government submitted a chart to the Court that listed which entries covered by the August 2001 Preliminary Injunction had been liquidated. (Id. at ¶ 16.) On May 5, 2003, counsel for Defendant submitted a list of the names and last known addresses of the importers and sureties involved. (Id. at ¶ 20.) At the request of the Court, the Government sent a letter to the importers and sureties involved notifying them that "[n]otwithstanding the Court's injunctive order issued on August 2, 2001, the government issued liquidation instructions to [Customs]." (Id. at ¶ 21; Letter from A. David Lafer, Senior Trial Counsel, Commercial Litigation Branch, United States Department of Justice, to Importer/Surety of 05/06/03.) Of the thirty-one entries covered by the August 2001 Preliminary Injunction, twenty-eight entries at the Port of Los Angeles were liquidated; the three entries at the Port of Norfolk remained unliquidated as of June 4, 2003. (Hr'g Tr. at 32, 67.)

On May 21, 2003, this Court issued an Order to Show Cause affording the Government an opportunity to present evidence why it should not be held in contempt of this Court's August 2001 Preliminary Injunction for issuing instructions to liquidate and for its actions on January 3, January 10, and January 17, 2003, wherein twenty-eight out of the thirty-one subject entries were liquidated.

PARTIES' CONTENTIONS

I. Defendant's Contentions

It is the Government's position that the August 2001 Preliminary Injunction dissolved when this Court entered judgment in favor of Defendant on August 15, 2002. (Def.'s Resp. to the Ct.'s Order to Show Cause of May 21, 2003 ("Def.'s Br.") at 2, 5.) The Government contends that because liquidation was not enjoined pending appeal, Commerce was acting within its powers to instruct Customs to liquidate the subject entries on November 1, 2002, and for the liquidations to take place in January 2003. (Id. at 8.)

As the basis for its argument, the Government relies on Fundicao Tupy S.A. v. United States, 841 F.2d 1101, 1103 (Fed Cir.1988).³ In its argument, the Government focuses on the Federal Circuit's description of preliminary injunctions in Fundicao Tupy. (Def.'s Br. at 8-9.) Defendant cites the Federal Circuit's use of quoted language from MOORE'S FEDERAL PRACTICE: "[a preliminary injunction] is ipso facto dissolved by a dismissal of the complaint or the entry of a final decree in the cause." (Def.'s Br. at 8-9 (quoting Fundicao Tupy, 841 F.2d at 1103).)

The Government contends that Fundicao Tupy articulates a general rule that preliminary injunctions dissolve when the CIT enters judgment on the merits. (Id. at 9.) The Government contends that Fundicao Tupy is "a precedential decision" regarding preliminary injunctions and that "only the [Federal Circuit] sitting en banc is empowered...