Productions v. United States

Decision Date19 August 2013
Docket NumberNo. 2013–1044.,2013–1044.
PartiesITOCHU BUILDING PRODUCTS, Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee.
CourtU.S. Court of Appeals — Federal Circuit

OPINION TEXT STARTS HERE

Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, of New York, NY, argued for plaintiff-appellant. With him on the brief were Bruce M. Mitchell, Andrew T. Schutz and Kavita Mohan.

Ryan M. Majerus, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. On the brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Carrie A. Dunsmore, Trial Attorney. Of counsel on the brief was Nathaniel Halvorson, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC. Of counsel was Melissa M. Devine, Attorney, United States Department of Justice, of Washington, DC.

Before LOURIE, BRYSON, and TARANTO, Circuit Judges.

TARANTO, Circuit Judge.

Itochu Building Products asked the United States Department of Commerce to act under 19 U.S.C. § 1675(b) to revoke part of an antidumping-duty order applicable to imported steel nails. Before Commerce issued its preliminary determination to do so, Itochu submitted comments, met with Commerce officials, and provided legal authority to urge that the requested partial revocation take effect at an early specified date. Commerce rejected that position in its preliminary ruling, saying that a later date would apply, and generally invited interested parties to comment. Itochu did not avail itself of that opportunity. In its final ruling, Commerce adopted the partial revocation, which the domestic industry did not oppose, but adhered to its position giving the change the later effective date.

When Itochu challenged the effective-date determination in the United States Court of International Trade, the court declined to address the merits. Instead, invoking 28 U.S.C. § 2637(d)'s directive to require exhaustion of administrative remedies “where appropriate,” the trade court dismissed Itochu's challenge because Itochu had failed to resubmit to Commerce, after the preliminary ruling, the comments it had submitted earlier.

We reverse the trade court's ruling as an abuse of discretion. In the circumstances here, requiring exhaustion served no discernible practical purpose and would have risked harm to Itochu. We remand for further proceedings.

Background

In August 2008, after finding that certain steel nails exported from the People's Republic of China were being sold in the United States at less than fair value, the Department of Commerce issued an antidumping-duty order under 19 U.S.C. §§ 1673d-e, effective as of January 23, 2008. Certain Steel Nails from the People's Rep. of China, 73 Fed.Reg. 44,961 (Dep't of Commerce Aug. 1, 2008) (antidumping-duty order). In September 2009, Commerce initiated an administrative review of that order, under 19 U.S.C. § 1675(a), for the period January 23, 2008, to July 31, 2009. Certain Steel Nails from the People's Rep. of China, 74 Fed.Reg. 48,224, 48,226–28 (Dep't of Commerce Sep. 22, 2009) (initiation of admin. rev.).

Mid Continent Nail Corporation was one of several domestic nail manufacturers that had petitioned Commerce to launch the investigation that had resulted in the antidumping-duty order. On February 11, 2011, while the administrative review was still underway, Mid Continent notified Commerce that it no longer had an interest in receiving antidumping-duty relief from imports of four types of steel nails. See Certain Steel Nails from the People's Rep. of China, 76 Fed.Reg. 22,369 (Dep't of Commerce Apr. 21, 2011) (initiation and prelim. results). Mid Continent asked Commerce to initiate a changed-circumstances review, under 19 U.S.C. §§ 1675(b), (d)(1), to revoke the order as to those four types of nails. Id. Mid Continent asked that the revocation be effectivefor all entries that (a) were made on or after January 23, 2008, and (b) were not subject to final duty determinations ( i.e., were not yet liquidated) when the changed-circumstances order eventually issued. January 23, 2008, was the effective date of the antidumping-duty order and the start of the period covered by the pending administrative review. Id.

On February 22, 2011, Itochu submitted comments to Commerce in support of Mid Continent's request for partial revocation of the antidumping-duty order. Itochu urged that partial revocation of the order back to January 23, 2008, would be consistent with two of Commerce's policies. First, it argued, Commerce had a practice of revoking orders for unliquidated entries that were not yet subject to a completed administrative review. Itochu argued that United States Customs and Border Protection does not fix and assess the final amount of duties owed on entries ( i.e., does not liquidate such entries) until an administrative review is complete, see19 U.S.C. § 1675(a)(2)(C), and here, the administrative review was still pending. Second, and in any event, should the administrative review conclude before Commerce could make its final determination in the changed-circumstances review, Itochu explained that its January 2008 date was consistent with Commerce's practice of granting similar requests where entries remain unliquidated for other reasons, such as ongoing litigation. Itochu also requested that Commerce expedite consideration of the changed-circumstances review because the domestic industry and interested parties supported the requested partial revocation.

On March 8, 2011, counsel for Itochu met with eight officials from the Department of Commerce to present its argument that partial revocation should take effect as of January 23, 2008. In support of its position, Itochu's counsel provided the officials with 41 pages of excerpts from prior Commerce determinations in which, Itochu argued, Commerce had granted requests that partial revocations in changed-circumstances reviews apply to all unliquidated entries.

On March 23, 2011, Commerce completed its administrative review for the period from January 23, 2008, to July 31, 2009. Certain Steel Nails from the People's Rep. of China, 76 Fed.Reg. 16,379 (Dep't of Commerce Mar. 23, 2011) (final results admin. rev.). Commerce issued liquidation instructions to Customs for the steel nails covered by the administrative review, but liquidation of Itochu's entries was thereafter enjoined pending a challenge in the trade court to the final results of the administrative review. See Mid Continent Nail Corp. v. United States, No. 11–cv–119–DAR, Dkt. No. 13 (Int'l Trade Ct. May 20, 2011) (order granting preliminary injunction).

On April 21, 2011, Commerce took two actions simultaneously: it formally initiated the changed-circumstances review and, granting Itochu's request for expedition, published the preliminary results of the review. Certain Steel Nails from the People's Rep. of China, 76 Fed.Reg. at 22,369. Commerce preliminarily determined that “the domestic producers ... ha[d] no interest in the continued application of the antidumping duty order” for the four types of nails at issue and that it intended to revoke the order for those nails. Id. at 22,371.

Regarding the effective date of the revocation, Commerce noted that Itochu had submitted comments, and met with department officials, to urge that the revocation take effect January 23, 2008. Id. at 22,370. But Commerce preliminarily rejected that position, because it did “not find this to be consistent with [Commerce's] recent practice.” Id. at 22,371. Commerce instead said that the revocation would be effective August 1, 2009, the day after the period covered by the just-completed administrative review. Id. Commerce explained: “It is the Department's practice to revoke (in whole or in part) an antidumping duty order so that the effective date of revocation covers entries that have not been subject to a completed administrative review.” Id. Commerce invited interested parties to comment on the preliminary results within 14 days, though it did not cite 19 C.F.R. § 351.309, the regulation that governs submission of written argument by interested parties. Id. Commerce explained that the timing of its final results would depend on whether it received comments: if so, the final results would not issue for up to 270 days; if not, they would issue within 45 days. Id.

Itochu did not submit comments in response to the preliminary results. On May 24, 2011, 33 days after publication of the preliminary results, Commerce published the final results of the changed-circumstances review. Certain Steel Nails from the People's Rep. of China, 76 Fed.Reg. 30,101 (Dep't of Commerce May 24, 2011) (final results). Commerce concluded that it would revoke the antidumping duty order with regard to the four types of steel nails at issue. Id. Again describing its interactions with Itochu concerning the effective date of the revocation, Commerce again rejected Itochu's position, instead adopting August 1, 2009, as the effective date. See id. at 30,101–02. Commerce explained that its “recent practice has been to select the date after the most recent period for which a review was completed ... as the effective date.” Id. at 30,102 & n. 5.

Itochu challenged Commerce's determination regarding the effective date in the trade court and moved for judgment on the agency record under that court's Rule 56.2. On September 19, 2012, the court issued its decision. Itochu Bldg. Prods. v. United States, 865 F.Supp.2d 1332 (Ct.Int'l Trade 2012). It did not reach the merits of the proper effective date for the partial revocation of the antidumping-duty order. Rather, relying on its authority under 28 U.S.C. § 2637(d) to “require the exhaustion of administrative remedies” “where appropriate,” the court found that Itochu had failed to exhaust its administrative remedies by “declin[ing] to...

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