Trustees in Bankr. of N. Amer. v. U.S., Slip Op. 08-66. Court No. 05-00539.

• Decision Date: 10 June 2008
• Docket Number: Slip Op. 08-66. Court No. 05-00539.
• Citation: 558 F.Supp.2d 1367
• Parties: TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC., Filmax Sdn. Bhd., Heveafil USA, Inc., and Heveafil Sdn. Bhd., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

558 F.Supp.2d 1367

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

Slip Op. 08-66. Court No. 05-00539.

United States Court of International Trade.

June 10, 2008.

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.

Gregory G. Katsas, 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 following a court-ordered remand. See Tr. in Bankr.of N. Am. Rubber Thread Co. v. United States, 31 CIT ___, 533 F.Supp.2d 1290 (2007) ("NART"). In NART, the Court ordered the U.S. Department of Commerce ("Commerce") to provide a reasonable explanation for its departure from past agency practice, or in the alternative to conduct a changed circumstances review. For the reasons stated below, the Court remands Commerce's results for further proceedings consistent with this opinion.

I. STANDARD OF REVIEW

The Court has jurisdiction under 28 U.S.C. § 1581(1). When reviewing an action under section 1581(f), the Court will set aside a decision of 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).

II. BACKGROUND

The procedural history of this case is set forth in greater detail in the Court's previous opinions. See NART, 31 CIT at ___, 533 F.Supp.2d at 1291-93; Tr. in Bankr.of N. Am. Rubber Thread Co. v. United States, 30 CIT ___, ___, 464 F.Supp.2d 1350, 1351-53 (2006). However, the relevant facts are as follows: In 1992, Commerce published an antidumping duty order on imports of extruded rubber thread from Malaysia. When North American Rubber Thread Co. ("NART"),¹ the sole domestic manufacturer of extruded rubber thread, filed for bankruptcy, Filmax Sdn. Bhd, Heveafil USA Inc., and Heveafil Sdn Bhd (collectively "Heveafil") requested a changed circumstances review. NART agreed that the antidumping duty order should be revoked as to entries after October 1, 2003. Heveafil, however, argued that the order should be revoked back to October 1, 1995; a date effectively encompassing all of its entries.² Upon investigation, Commerce revoked the antidumping duty order as to entries after October 1, 2003.

After this review, NART changed its position and asked Commerce to conduct a second changed circumstances review to determine whether the order should be revoked to October 1, 1995. Commerce refused, arguing that revoking an order subject to a completed administrative review would violate long-standing agency practice. NART and Heveafil challenged this refusal.³ In NART, the Court noted that Commerce, contrary to its position that it was long-standing agency practice not to revoke an order subject to a completed review, had done so on several occasions. Accordingly, the Court ordered Commerce to explain its departure from its past practice, or in the alternative, to conduct a changed circumstances review. On remand, Commerce again refused to conduct a changed circumstances review arguing: (1) it lacked the authority to revoke the antidumping duty order; and (2) that the Court incorrectly interpreted its prior conduct as establishing an agency practice.

III. DISCUSSION

Commerce must conduct a changed circumstances review whenever an interested party has shown a change "sufficient to warrant a review." 19 U.S.C. § 1675(b)(1) (2000). Here, Commerce's refusal to conduct a second changed circumstances review was not based on the merits of NART and Heveafil's request, but instead on its interpretation of the statutory framework. In NART, the Court provided specific remand instructions and the Court must now analyze whether Commerce's results comply with these instructions.

A. Commerce's Interpretation of the Statutory Antidumping Framework

In Commerce's view, its decision not to conduct a changed circumstances review was based on the fact that the only unliquidated entries, the entries for the period from October 1, 1995 to September 30, 1996, were already subject to a completed review. In Commerce's view, the principle of "administrative finality" unambiguously prevails over any discretion the agency has in selecting an effective date of revocation; or in short, that the completion of an administrative review unambiguously precludes the agency from retroactively revoking an order. The NART Court, however, already rejected this argument. See NART, 31 CIT at ___, 533 F.Supp.2d at 1293-95. Commerce's current remand results are only a more thorough attempt to support an already rejected interpretation of the statutory framework.

B. Commerce is Unable to Provide a Reasonable Explanation for Its Deviation From Past Agency Conduct

Commerce also fails to provide a reasonable explanation for its departure from its past practice. Generally, "`an agency action is arbitrary when the agency offer[s] insufficient reasons for treating similar situations differently.'" SKF USA, Inc. v. United States, 263 F.3d 1369, 1382 (quoting Transactive Corp. v. United States, 91 F.3d 232, 237 (D.C.Cir.1996)). Here, Commerce argues that it is not agency practice to revoke orders already subject to completed administrative reviews. According to Commerce, the prior scope rulings which appear to adopt this practice were instead the result of litigation settlements. See, e.g., Certain Cold-Rolled Carbon Steel Flat Products from the Netherlands, 67 Fed.Reg. 9956, 9956-57 (Dep't Commerce Mar. 5, 2002) (final results of changed circumstances review). In Commerce's view, any subsequent confusion regarding its past practice was solely due to "inartful drafting" by the agency. The NART Court, however, already rejected Commerce's argument that its prior scope rulings lack...