Trustees of N. Am. Rubber Thread v. U.S.

• Decision Date: 21 December 2007
• Docket Number: Court No. 05-00539.,Slip Op. 07-184.
• Citation: 533 F.Supp.2d 1290
• Parties: TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC., Filmax Sdn. Bhd., Heveafil USA, Inc., and Heveafil Shd. Bhd., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

533 F.Supp.2d 1290

TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC., Filmax Sdn. Bhd., Heveafil USA, Inc., and Heveafil Shd. Bhd., Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. 07-184.

Court No. 05-00539.

United States Court of International Trade.

December 21, 2007.

Miller & Chevalier Chartered, Washington, DC (Peter J. Koenig) for Plaintiff Trustees in Bankruptcy of North American Rubber Thread Co., Inc.

White & Case, LLP, Washington, DC (Walter J. Spak, Emily Lawson, and Jay C. Campbell) for Plaintiffs Filmax Sdn. Bhd., Heveafil USA, Inc., and Heveafil Sdn. Bhd.

Jeffrey S. Bucholtz, Acting Assistant Attorney General; United States Department of Justice; Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, (Stephen C. Tosini); David W. Richardson, Of Counsel, Office of Chief Counsel for Import Administration, Department of Commerce for Defendant United States.

OPINION

GOLDBERG, Senior Judge.

This case is before the. Court on Plaintiffs' motion for judgment upon the agency record. Plaintiffs are Trustees in Bankruptcy of North American Rubber Thread Co., Inc., the successor-in-interest to the North American Rubber Thread Co., Inc. (together, "NART"), and Malaysian rubber manufacturer Heveafil, consisting of Filmax Sdn. Bhd, Heveafil USA Inc., and Heveafil Sdn. Bhd. (together, "Heveafil").¹ Plaintiffs seek judicial review of a decision by the U.S. Department of Commerce ("Commerce") to not initiate a changed circumstances review of an antidumping duty order. Plaintiffs allege that Commerce's decision was arbitrary, capricious, or otherwise not in accordance with law. For the reasons that follow, the Court remands Commerce's refusal to initiate the changed circumstances review for further consideration consistent with this opinion.

I. BACKGROUND

The procedural history of this case is set forth at length in Trustees in Bankruptcy of North American Rubber Thread Co. v. United States, 30 CIT ___, ___, 464 F.Supp.2d 1350, 1351-53 (2006) ("NART"). Briefly, the relevant facts are as follows: In 1992, Commerce published an antidumping duty order on extruded rubber thread from Malaysia (the "Order"). Approximately six years later, Commerce completed an administrative review of the Order for the period of October 1, 1995 through September 30, 1996. Heveafil challenged the results of the 1995-1996 review, and liquidation of the entries covered by that review was suspended.²

In 2004, Commerce granted Heveafil's request to conduct a changed circumstances review of the Order, pursuant to 19 U.S.C. § 1675(b)(1), on the basis that NART, the sole manufacturer of the domestic likeproduct, had filed for bankruptcy and ceased operations. NART agreed with Commerce's prelhninary decision that changed circumstances warranted revocation of the Order effective October 1, 2003 — the first day of the most recent period of administrative review and the only period for which an administrative review had not been completed. Heveafil disputed this effective date and argued that Commerce should revoke the Order effective October 1, 1995. This earlier date would cover all unliquidated entries of the subject imports. Commerce ultimately revoked the Order and selected October 1, 2003 as the effective date of revocation.³

On February 18, 2005, NART changed its position supporting Commerce's effective date of revocation. NART requested that Commerce initiate another changed circumstances review seeking retroactive revocation of the Order effective October 1, 1995 — the earlier date requested by Heveafil in the first changed circumstances review. NART explained in its request that it no longer had an interest in the enforcement or existence of the Order as of that earlier date.

Commerce then notified NART by letter of its refusal to initiate the second changed circumstances review. Commerce explained that a changed circumstances review must be conducted in the context of an existing order and that "revoking an order to cover entries subjected to a completed administrative review would be contrary, to the Department's long-standing practice." See Compl., Dec. 6, 2005, Ex. 1 (Commerce's response to request for changed circumstances review dated June 15, 2005). Specifically, Commerce stated that it was unable to conduct the requested review because "1) all administrative reviews of [the subject imports] have been completed; and 2) there is no existing order for which to initiate a changed circumstances review...."⁴ Id.

In the present action, Plaintiffs request the Court to order Commerce to initiate a changed circumstances review to consider changing the effective date of revocation of the Order from October 1, 2003 to October 1, 1995.

II. JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction under 28 U.S.C. § 1581(1). See NART, 30 CIT at ___, 464 F.Supp.2d at 1364 (denying Commerce's motion to dismiss for lack of subject matter jurisdiction and failure to state a cause of action). When a matter is within the subject matter jurisdiction of § 1581(i), the Court will set aside an action by Commerce if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (2000); see 28 U.S.C. § 2640(e) (2000).

III. DISCUSSION

A. Changed Circumstances Reviews

Antidumping law grants Commerce the authority to revoke an antidumping order based on changed circumstances. See 19 U.S.C. § 1675(b), (d) (2000). Commerce is required to conduct a changed circumstances review whenever it receives a request by an interested party that "shows changed circumstances sufficient to warrant a review" of an antidumping duty order. § 1675(b)(1). Commerce's regulations elaborate on this requirement, stating that Commerce may revoke an order if "[p]roducers accounting for substantially all of the production of the domestic like product, to which the order (or the part of the order to be revoked) ... pertains have expressed a lack of interest in the order, in whole or in part ..." 19 C.F.R. § 351.222(g) (2006); see Or. Steel Mills Inc. v. United States, 862 F.2d 1541, 1545 (Fed.Cir.1988) (holding that lack of industry support alone is a ground for revocation); Stainless Steel Plate in Coils from Italy, 71 Fed.Reg. 15380 (Dep't Commerce Mar. 28, 2006) (final results of changed circumstances review) (revoking countervailing duty order based on lack of industry support).

In its request for a changed circumstances review, NART clearly established lack of industry support for the continuation of the Order as it applies to unliquidated entries for the 1995-1996 period of review. In its refusal to initiate the review, Commerce did not base its decision on whether NART demonstrated changed circumstances sufficient to warrant a review. Instead, Commerce stated that, the agency was without authority and it would be contrary to long-standing practice to revoke an order to cover entries subject to a completed administrative review.

B. Authority to Conduct a Changed Circumstances Review for Entries Subject to a, Completed Administrative Review

Commerce argues that it unambiguously lacks the authority to initiate a changed circumstances review concerning the 1995-1996 entries because they were subject to a completed administrative review. Commerce explicitly asks the Court to apply step one of the two-step test set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed2d 694 (1984). In order to decide whether Commerce has interpreted a statute in accordance with law, step one directs the Court to determine "whether Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. 2778. To make this determination, the Court first looks at the statute's text to ascertain its plain and unambiguous meaning. See Timex VI., Inc. v. United States, 157 F.3d 879, 882 (Fed.Cir.1998). If the statute's plain meaning speaks directly to the precise question at issue, that meaning is the law and the Court's inquiry ends. See id. ("Because a statute's text is Congress's final expression of its intent, if the text answers the question, that is the end of the matter.").

Commerce claims that 19 U.S.C. § 1675(a) unambiguously precludes the inclusion of unliquidated entries subject to a completed administrative review within the scope of a changed circumstances review. Section 1675(a) governs periodic reviews of countervailing or antidumping duty, orders.⁵ The agency's determination pursuant to § 1675(a) is thus the basis for the assessment of duties pursuant to the order. See § 1675(a)(2)(C). Once this determination is made and published, Commerce claims that the results cannot be altered pursuant to a changed circumstances review.⁶ According to Commerce, the antidumping duties calculated in the final results of the 1995-1996 administrative review must be assessed on the 1995-1996 entries.

Commerce fails to account for 19 U.S.C. § 1675(d)(3) in its analysis. This statute governs the revocation of an order, and states that a determination to revoke an order "shall apply with respect to unliquidated entries of the subject merchandise which are entered, or withdrawn from warehouse, for consumption on or after the date determined by the administering authority." § 1675(d)(3). This section gives the agency discretion to select the effective date of revocation and presents no conflict with the provisions of § 1675(a) that Commerce discusses. In its request to initiate a changed circumstances review, NART does not challenge the results or the basis of the completed 1995-1996 review. Instead, it merely seeks retroactive revocation of an order so the unliquidated entries will be assessed under a different duty rate. Cf. Ugine and Alz Belgium, N.V. v. United States, 517 F.Supp.2d 1333, 130 (CIT 2007) (holding that Commerce is not barred from...