Lincoln General Ins. Co. v. U.S., Slip Op. 04-73. Court No. 03-00546.

Decision Date18 June 2004
Docket NumberSlip Op. 04-73. Court No. 03-00546.
Citation341 F.Supp.2d 1265
PartiesLINCOLN GENERAL INSURANCE CO., Plaintiff, v. UNITED STATES, Defendant, and Fresh Garlic Producers Ass'n, Christopher Ranch, L.L.C., Farm Gate, L.L.C., the Garlic Co., Valley Garlic, and Vessey and Co., Defendant-Intervenors.
CourtU.S. Court of International Trade

Sandler, Travis & Rosenberg, P.A. (T. Randolph Ferguson, San Francisco, FL, Philip S. Gallas, Washington, DC, Mark R. Ludwikowski, Burke, VA, and Arthur Purcell, Miami, FL), for Plaintiff.

Peter D. Kessler, Assistant Attorney General; David M. Cohen, Director, Jeanne E. Davidson, Assistant Director Civil Division, Commercial Litigation Branch, United States Department of Justice, (Stefan Shaibani); and Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Scott D. McBride), for Defendant, of counsel.

Collier Shannon Scott (Michael J. Coursey and John M. Herrmann), Washington, DC, for Defendant-intervenors.

OPINION

MUSGRAVE, Judge.

Lincoln General Insurance Company ("Lincoln") is a surety on bonds for certain importers which entered garlic into the United States from the People's Republic of China ("PRC") subject to Antidumping Duty Order: Fresh Garlic From the People's Republic of China, 59 Fed.Reg. 59209 (Nov. 16, 1994). Invoking the jurisdiction of this Court under 28 U.S.C. § 1581(c) or § 1581(i), Lincoln seeks vacatur and remand of the final decision of the International Trade Administration of the U.S. Department of Commerce ("Commerce") to rescind the first administrative review of Huaiyang Hongda Dehydrated Vegetable Company ("Hongda"). The government challenges subject matter jurisdiction and Lincoln's standing to bring this action. For the reasons herein, the Court finds subject matter jurisdiction under 19 U.S.C. § 1516a(a)(2) and 28 U.S.C. §§ 1581(c) and standing in Lincoln to assert the claims of its affected bonded importers under 28 U.S.C. §§ 2631(c). Consequently, the Court does not reach the jurisdictional issues argued with respect to 28 U.S.C. §§ 1581(i) and 2631(i).

Background

The new shipper review of fresh garlic from the PRC produced or exported by Hongda covered the period November 1, 2001 through April 30, 2002 and was initiated on June 26, 2002. See Fresh Garlic from the People's Republic of China: Rescission of New Shipper Antidumping Review and Initiation of New Shipper Antidumping Duty Review, 67 Fed.Reg. 44594 (July 3, 2002). Commerce then announced the opportunity for interested parties to request an administrative review of the antidumping order for the twelve-month period November 1, 2001 to October 31, 2002. Antidumping or Countervailing Duty Order, Finding or Suspended Investigation: Opportunity to Request Administrative Review, 67 Fed.Reg. 66612 (Nov. 1, 2002). The U.S. petitioners, defendant-intervenors herein, requested administrative review of Hongda. The initiated administrative review was to cover Hongda's shipments of fresh garlic from the PRC for the period May 1, 2002 through October 31, 2002. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 67 Fed.Reg. 78772 (Dec. 26, 2002). On April 28, 2003, the petitioners submitted a letter to Commerce withdrawing their request for administrative review of Hongda. Subsequently, on June 19, 2003, Commerce published Fresh Garlic From the People's Republic of China: Final Results of Antidumping Duty New Shipper Review, 68 Fed.Reg. 36767 (June 19, 2003), which determined a dumping margin for Hongda for the November 1, 2001 to March 31, 2002 period of 367.76 percent based on adverse facts available.

Lincoln asserts that it "participated" in the administrative review on behalf of itself and/or on behalf of the importers it bonded. On July 24, 2003, Hongda and, on behalf of several importers, Lincoln filed appearances through their respective counsels and thereafter met with ITA officials to urge Commerce to continue the administrative review of Hongda. Hongda and Lincoln informed Commerce that U.S. sureties had uncovered two fraudulent schemes that had been used to evade antidumping duties on imports of Chinese agricultural products and that these schemes particularly implicated Hongda's customs and potential antidumping duty liabilities. Hongda and Lincoln indicated that a continuation of Hongda's administrative review afforded Commerce the opportunity to identify legitimate and illegitimate garlic shipments, develop solutions for curtailing the fraudulent abuse of its antidumping reviews with respect to China, and resurrect public confidence in the proper administration of Chinese agricultural imports.

On July 29, 2003, Hongda and, on behalf of several importers, Lincoln submitted comments in opposition to Commerce's potential rescission of the first administrative review of Hongda. Hongda and Lincoln reiterated to Commerce that Hongda was the victim of identity theft and concomitant fraudulent schemes during the period of its administrative review. Accordingly, Hongda and Lincoln requested that Commerce continue Hongda's review to uncover additional information about the fraudulent schemes which were used to avoid payment of antidumping duties and to determine which imports under Hongda's name were legitimate.

On August 6, 2003, Commerce published notice in the Federal Register rescinding Hongda's administrative review. See Fresh Garlic From the People's Republic of China: Partial Rescission of Antidumping Duty Administrative Review, 68 Fed.Reg. 46580 (Aug. 6, 2003). Commerce considered that fraudulent import practices are rather the concern of the Bureau of Immigration and Customs Enforcement (i.e., irrelevant to administrative review of the antidumping duty order), and reasoned that rescission was appropriate because the petitioners had withdrawn their request and Hongda itself had not made one. The next day, August 7, 2003, Commerce published a notice in the Federal Register extending until October 31, 2003 the deadline for its preliminary results in the administrative review in which Hongda was a respondent prior to Commerce's decision a day earlier. See Fresh Garlic From the People's Republic of China: Notice of Extension of Time Limit for the Preliminary Results of Antidumping Duty Administrative and New Shipper Reviews, 68 Fed.Reg. 47020 (Aug. 7, 2003).

After filing this action, Lincoln moved for a preliminary injunction to enjoin the Bureau of Customs and Border Protection from liquidating any unliquidated entries for which Hongda was listed as the manufacturer or exporter, and the government filed its motion to dismiss for lack of subject matter jurisdiction. Argument on the motions was heard December 16, 2003, at which it was adduced that a preliminary injunction had been granted in the matter of Huaiyang Hongda Dehydrated Vegetable Company v. United States, Court No. 03-00636, which afforded sufficient preservation of Lincoln's claims for the time being. The government's motion was taken under advisement.

The parties were subsequently ordered to show cause why the matter should not be stayed pending the outcome of Court No. 03-00636. Their responses indicate a preference for immediate resolution of the jurisdictional issue. The government's response opposes a stay on the argument that it would be tantamount to an assertion of jurisdiction, and it also moves to strike a certain attachment1 to Lincoln's brief in response to the order to show cause as irrelevant. Lincoln suggests that the proper posture would be for expedited resolution of the jurisdictional issue and then consolidation with Court No. 03-00636, and it also contends the attachment to its response brief is "directly relevant to the instant case." Pl.'s Resp. to Order to Show Cause, n. 1.

Discussion

Although the letter from Commerce attached to Lincoln's response to the order to show cause relates to the subsequent administrative review, the Court considers the attachment within the realm of Lincoln's permissible argument and indicative of Commerce's position with respect to the issues presented here. The government's motion to strike is therefore denied.

The overarching question implicated by the government's motion to dismiss is whether a surety on a customs entry bond has access to the same administrative and judicial remedies available to its principal on the bond, a United States importer. The burden of establishing jurisdiction lies with Lincoln as the party seeking to invoke this Court's jurisdiction. See, e.g., Old Republic Ins. Co. v. United States, 14 CIT 377, 379, 741 F.Supp. 1570, 1573 (1990) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936)).2

Since the United States is immune from suit unless it consents to be sued, e.g., United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980), waiver of sovereign immunity "must be unequivocally expressed" in the jurisdictional statute, and it is to be "strictly construed... in favor of the sovereign." Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 2096, 135 L.Ed.2d 486 (1996). For purposes of the imposition and administration of countervailing and antidumping duties under subtitle IV of the Tariff Act of 1930, as amended, the United States' explicit waiver of sovereign immunity is contained in 28 U.S.C. § 1581 (2002).

28 U.S.C. § 1581(c) provides: "The Court of International Trade shall have exclusive jurisdiction of any civil action commenced under section 516A of the Tariff Act of 1930." Section 516A, codified at 19 U.S.C. § 1516a, encompasses the type of determination about which Lincoln complains. See 19 U.S.C. §§ 1516a(a)(2)(A)(i)(I), 1516a(a)(2)(a)(2)(B). In order to bring an action to contest such matters before this Court, a plaintiff must demonstrate that it is both an "interested party" and "a party to the proceeding in connection with which the matter arose." 28 U.S.C. § 2631(c). See 19 U.S.C. §...

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  • United States v. Great Am. Ins. Co. of Ny
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    ...and participate in antidumping ... duty proceedings having a potential impact on them.”. See Lincoln Gen. Ins. Co. v. United States, 28 CIT 931, 341 F.Supp.2d 1265 (2004) (“ Lincoln ”). In Lincoln, the surety sought the opportunity to bring claims relating to fraudulent schemes which were u......
  • Lincoln General Ins. Co. v. U.S.
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    ...is proper pursuant to 19 U.S.C. §§ 1516a(a)(2)(A)(i)(I), (a)(2)(B)(iii), and 28 U.S.C. § 1581(c). See Lincoln General Insurance Co. v. United States, 28 CIT ____, 341 F.Supp.2d 1265 (2004). At this stage, Lincoln moves for USCIT Rule 56.2 judgment arguing that Commerce's decision is unsuppo......

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