Candle Corp. of Amer. v. U.S. Intern. Trade Com'n

• Citation: 374 F.3d 1087
• Decision Date: 02 July 2004
• Docket Number: No. 03-1348.,03-1348.
• Parties: CANDLE CORPORATION OF AMERICA, Plaintiff-Appellant, and Blyth, Inc., Plaintiff, v. UNITED STATES INTERNATIONAL TRADE COMMISSION and Deanna Tanner Okun, Chairman, United States International Trade Commission, Defendants, and United States Bureau of Customs and Border Protection and Robert C. Bonner, Commissioner, United States Bureau of Customs and Border Protection, Defendants-Appellees, and Candle-Lite Division of Lancaster Colony Corporation, Lumi-Lite Candle Co., and General Wax & Candle Co., Defendants-Appellees, and Muench-Kreuzer Candle Company, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

374 F.3d 1087

CANDLE CORPORATION OF AMERICA, Plaintiff-Appellant, and Blyth, Inc., Plaintiff, v. UNITED STATES INTERNATIONAL TRADE COMMISSION and Deanna Tanner Okun, Chairman, United States International Trade Commission, Defendants, and United States Bureau of Customs and Border Protection and Robert C. Bonner, Commissioner, United States Bureau of Customs and Border Protection, Defendants-Appellees, and Candle-Lite Division of Lancaster Colony Corporation, Lumi-Lite Candle Co., and General Wax & Candle Co., Defendants-Appellees, and Muench-Kreuzer Candle Company, Defendant-Appellee.

No. 03-1348.

United States Court of Appeals, Federal Circuit.

DECIDED: July 2, 2004.

David A. Wilson, Hale and Dorr LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief was Joshua A. Davenport.

Paul D. Kovac, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees, United States Bureau of Customs and Border Protection, et al. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director and Jeanne E. Davidson, Deputy Director. Of counsel on the brief was Ellen C. Daly, Senior Attorney, Office of Chief Counsel, United States Bureau of Customs and Border Protection, of Washington, DC. Of counsel was Lucius B. Lau.

Eric P. Salonen, Stewart and Stewart, of Washington, DC, argued of defendants-appellees, Candle-lite Division of Lancaster Colony Corporation, et al. With him on the brief were Terence P. Stewart and Patrick J. McDonough.

Gregory C. Dorris, Pepper Hamilton LLP, of Washington, DC, argued for defendant-appellee, Muench-Kreuzer Candle Company. With him on the brief was Edward M. Andries.

Before MICHEL, GAJARSA, and DYK, Circuit Judges.

Opinion for the court filed by Circuit Judge DYK. Dissenting opinion filed by Circuit Judge GAJARSA.

DYK, Circuit Judge.

This case involves a proceeding pursuant to the Continued Dumping and Subsidy Offset Act of 2000, Pub. L. No. 106-387, § 1(a), 114 Stat. 1549, 1549A-73 (codified at 19 U.S.C. § 1675c (2000)) ("CDSOA" or "Byrd Amendment"), which entitled "affected domestic producers" to recover antidumping duties imposed on foreign producers. 19 U.S.C. § 1675c(a). The United States Bureau of Customs and Border Protection ("Customs") denied the requests by Candle Corporation of America ("CCA") for offset distributions pursuant to the Byrd Amendment for fiscal years 2001 and 2002. CCA sought review of these decisions in the United States Court of International Trade, which granted judgment in the government's favor on the ground that CCA (either on its own behalf or on behalf of the entities it acquired) cannot qualify to receive offset distributions because it did not support the petition that led to the imposition of antidumping duties. Candle Corp. of Am. v. United States Int'l Trade Comm'n, 259 F.Supp.2d 1349, 1356 (Ct. Int'l Trade 2003). We affirm, although we do so on a somewhat different theory than that of the Court of International Trade.

BACKGROUND

Stripped of irrelevancies, the background may be simply stated. On September 3, 1985, the National Candle Association, an organization of domestic candle makers, filed a petition for an antidumping investigation of petroleum wax candles from the People's Republic of China. Among other entities, Lenox Candles ("Lenox") and Colonial Candles of Cape Cod ("Cape Cod") supported the petition. Appellant CCA did not, although it was listed among "OTHER U.S. CANDLE MANUFACTURERS" in the petition. In response to the first of two separate questionnaires from the United States International Trade Commission ("ITC"), CCA declined to support the petition because CCA imported the dumped candles and, therefore, tariffs would adversely affect its income. In response to the second questionnaire, CCA opposed the petition. The ITC ultimately published an antidumping order on August 28, 1986, and antidumping duties were collected. Antidumping Duty Order: Petroleum Wax Candles From the People's Republic of China, 51 Fed. Reg. 30,686 (Aug. 28, 1986).

The Byrd Amendment requires that duties assessed pursuant to an antidumping duty order be distributed in offset distributions to affected domestic producers¹ for their qualifying expenditures.² 19 U.S.C. § 1675c(a). The ITC prepares a list of affected domestic producers, which it forwards to Customs. See id. § 1675c(d)(1). The affected domestic producers must certify that they desire and are entitled to a distribution, and they must disclose their qualifying expenditures. See id. § 1675c(d)(2). Customs then distributes the funds among the affected domestic producers on a pro rata basis. See id. § 1675c(d)(3). In addition, Customs regulations provide that successor companies to affected domestic producers may receive any offset distributions to which the predecessor company is entitled. 19 C.F.R. § 159.61(b)(1)(i) (2003).³ Pursuant to the Byrd Amendment, Customs had available $18,317,982.28 of offset distributions for the petroleum wax candle antidumping order for fiscal year 2001, CDSOA FY2001 Disbursements FINAL, available at http://www.customs.ustreas.gov/xp/cgov/import/add_ cvd/cont_dump/cdsoa_01/, and had available $69,536,243.70 for fiscal year 2002, CDSOA FY2002 Disbursements FINAL, available at http://www.customs.ustreas.gov/xp/cgov/import/add_ cvd/cont_dump/cdsoa_02/.

After the entry of the antidumping order, CCA acquired substantially all of the assets of Lenox and Cape Cod (which had supported the petition) through separate asset purchase agreements in 1987 and 1990, respectively. In 2001 CCA sought a Byrd Amendment offset distribution on behalf of Lenox and Cape Cod. However, Customs denied CCA's claim, stating that CCA did not qualify for an offset distribution either as an affected domestic producer or as a successor company to Lenox and Cape Cod. CCA again sought a Byrd Amendment offset distribution in 2002, which Customs denied.

On November 27, 2002, CCA filed a complaint in the Court of International Trade seeking review pursuant to 28 U.S.C. § 1581(i) of Customs' denial of offset distributions, arguing that it qualified as an affected domestic producer both in its own right and as a successor company to Lenox and Cape Cod. On April 8, 2003, the Court of International Trade denied CCA's motion for summary judgment and granted judgment in favor of the government. Candle Corp., 259 F.Supp.2d at 1350. First, the court held that CCA did not qualify as an "affected domestic producer" because it had not supported the petition for the antidumping investigation. Id. at 1354. Second, it held that CCA did not qualify as a "successor company" to Lenox and Cape Cod pursuant to the Byrd Amendment because CCA had not supported the petition. Id. at 1356. Third, the court refused to consider CCA's argument that it was entitled to claim on behalf of Lenox and Cape Cod on the theory that they allegedly "remain[] in operation" because CCA raised the argument for the first time in its reply brief. Id. at 1357.

CCA appealed, and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION

In reviewing decisions by the Court of International Trade in actions pursuant to 28 U.S.C. § 1581(i), we "apply the standard of review set forth in 5 U.S.C. § 706." Consol. Bearings Co. v. United States, 348 F.3d 997, 1004 (Fed.Cir.2003). Accordingly, we will set aside Customs' denial of offset distributions only if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (2000).

I

The central question before us is whether a company that opposed an antidumping investigation can recover Byrd Amendment offset distributions by acquiring businesses that would have been entitled to such distributions. The pertinent statutory language is:

Duties assessed pursuant to a countervailing duty order, an antidumping duty order, or a finding under the Antidumping Act of 1921 shall be distributed on an annual basis under this section to the affected domestic producers for qualifying expenditures. Such distribution shall be known as the "continued dumping and subsidy offset". [sic]

19 U.S.C. § 1675c(a). The statute defines the term "affected domestic producer" as:

any manufacturer, producer, farmer, rancher, or worker representative (including associations of such persons) that —

(A) was a petitioner or interested party in support of the petition with respect to which an antidumping duty order, a finding under the Antidumping Act of 1921, or a countervailing duty order has been entered, and

(B) remains in operation.

Companies, businesses, or persons that have ceased the production of the product covered by the order or finding or who have been acquired by a company or business that is related to a company that opposed the investigation shall not be an affected domestic producer.

Id. § 1675c(b)(1) (emphasis added).

Three things are clear. First, as CCA admits, CCA itself does not qualify as an "affected domestic producer." Second, Lenox and Cape Cod qualify as "affected domestic producers" if they "remain[] in operation," unless disqualified by the last sentence of 1675c(b)(1). Third, Customs' regulation allows CCA as the acquiring company to claim on behalf of Lenox and Cape Cod. It states:

In the case of a company that has succeeded to the operations of a predecessor company that appeared on the [ITC list of potential affected domestic producers], the successor company may file a certification to claim an offset as an affected domestic producer on behalf of the predecessor company. In its certification, the company must name the predecessor company to which it has succeeded and it must describe in detail the duly authorized succession by which it is entitled to file the certification.

19 C.F.R. § 159.61(b)(1)(i). That regulation seems to us permissible under the statute, which authorizes Customs to...