77 F.Supp.3d 1307 (CIT. 2015), 13-00018, Meridian Prods., LLC v. United States

Docket Nº:13-00018
Citation:77 F.Supp.3d 1307
Opinion Judge:R. Kenton Musgrave, Senior Judge.
Party Name:MERIDIAN PRODUCTS, LLC, Plaintiff, v. UNITED STATES, Defendant
Attorney:No. 13-00018 Daniel J. Cannistra and Richard P. Massony, Crowell & Moring LLP, of Washington DC, for the plaintiff. Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington DC, for the defendant. With her on the brief were Benjam...
Judge Panel:Before: R. Kenton Musgrave, Senior Judge.
Case Date:June 23, 2015
Court:Court of International Trade
 
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77 F.Supp.3d 1307 (CIT. 2015)

MERIDIAN PRODUCTS, LLC, Plaintiff,

v.

UNITED STATES, Defendant

No. 13-00018

United States Court of International Trade

June 23, 2015

As Corrected July 13, 2015.

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[Copyrighted Material Omitted]

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Granting plaintiff's motion for reconsideration, vacating judgment, and remanding to Commerce a third time.

Daniel J. Cannistra and Richard P. Massony, Crowell & Moring LLP, of Washington DC, for the plaintiff.

Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington DC, for the defendant. With her on the brief were Benjamin C. Mizer, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Jessica M. Link, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington DC.

Before: R. Kenton Musgrave, Senior Judge.

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OPINION AND ORDER

R. Kenton Musgrave, Senior Judge.

Pursuant to USCIT Rules 46 and 59(b), the plaintiff Meridian Products LLC (" Meridian" ), a U.S. importer, moves for reconsideration of the court's decision in Meridian Products, LLC v. United States, 38 CIT__, 37 F.Supp.3d 1342 (2014) (" Meridian III " ). See Pl's Mot. for Reconsideration of the Court's Order in Slip Opinion 14-158, PDoc 50 (Jan. 28, 2015) (" Pl's Mot." ). Familiarity with prior proceedings and Meridian III, which sustained the Final Results of Redetermination Pursuant to Court Remand, Meridian Products, LLC v. United States, Court No. 13-0018, PDoc 29 (June 17, 2014) (" Second Remand" ), is presumed. See Meridian III; see also Meridian Products, LLC v. United States, 38 CIT__, 971 F.Supp.2d 1259 (2014) (" Meridian II " ); Meridian Products, LLC v. United States, 37 CIT__, Slip Op. 13-75, (June 17, 2013) (" Meridian I " ).

Conducted by the International Trade Administration of the U.S. Department of Commerce (" Commerce" ), the matter concerns a scope ruling under the antidumping and countervailing duty orders (" Orders " ) on aluminum extrusions from the People's Republic of China (" PRC" ),1 on the plaintiff's imported refrigerator/freezer trim kits (" Trim Kits" ) from the PRC. The plaintiff's precise motion asks for reconsideration of the exhaustion question that decided Meridian III, arguing that it " had no opportunity" to raise before the agency the issue here, that exhaustion of administrative remedies was a useless formality, and that the issue is " a pure question of law" not requiring further factual development. Pl's Mot. at 6-11. The defendant United States asks the court to uphold Meridian III, countering that the plaintiff fails to identify any factual or legal error in the prior decision on the exhaustion question. See Def's Resp. to Pl's Mot. for Reconsideration, PDoc51 (Mar. 4, 2015) (" Def's Resp." ).

After considering the plaintiff's motion, the court reconsiders its prior decision, vacates judgment, and remands the case back to Commerce again for application of the proper definition of the " finished goods kit" exclusion, in compliance with the language of those Orders, and for redetermination of whether the Trim Kits fall within the scope of those Orders.

I. Background

Brief background is here outlined for ease of understanding. After reviewing the findings of Commerce's First Remand,2 the court remanded to Commerce a second time, directing it to " proceed from a clean slate on the question of whether the Trim Kits fall within the scope of the Orders, fully taking into account the prior relevant scope rulings." See Meridian II, supra, 971 F.Supp.2d at 1271.

Commerce's draft remand, issued Wednesday May 14, 2014, found that an " exception to the 'finished goods kit' exclusion" exists, to wit that " an imported product will not be considered a 'finished

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goods kit' . . . merely by including fasteners such as screws, bolts, etc. in the packaging with an aluminum extrusions product", that a product may not consist entirely of aluminum extrusions and be excluded as a " finished goods kit", and that the plaintiff's Trim Kits, which consist entirely of subject aluminum extrusions, fasteners, and " extraneous" materials, do not satisfy the " finished goods kit" exclusion to the Orders.3 It also applied the analysis in the Drapery Rail Kits Remand and the Solar Panel Mounting Systems Ruling to the Trim Kits,4 and continued to find that the kits were not analogous to the goods in those rulings and were within the scope of the Orders. Draft Remand at 14-19. Commerce then gave interested parties a mere five days to comment on the Draft Remand. See id. at 19.

Meridian's comments on the Draft Remand addressed Commerce's analysis of the applicability of the Drapery Rail Kits Remand and Solar Panel Mounting Systems Ruling to the Trim Kits, and noted that its comments were abbreviated in light of the limited time Commerce provided. Meridian did not, however, comment on the portion of Commerce's analysis in which Commerce determined that the " finished goods kit" exclusion language, see infra, meant that Meridian's Trim Kits, which Commerce found consisted entirely of aluminum extrusions, fasteners and " extraneous" materials, did not qualify for the exclusion. See generally Meridian's Cmts. on the Draft Remand, PDoc 40-2 (May 19, 2014). In the Second Remand, Commerce continued to find that " kits [that] consist only of aluminum extrusions, fasteners, and extraneous materials do not meet the exclusion criteria for 'finished goods kits'" and that Meridian's Trim Kits do not qualify as " finished goods kits", " because they consist entirely of aluminum extrusions, fasteners and extraneous materials", further that in its comments on remand Meridian did not challenge or dispute this finding. Second Remand at 12-14 and 23-25. Meridian previously sought to challenge this part of Commerce's analysis before the court. Meridian's Motion for Remand, PDoc 35 (July 15, 2014), ECF No. 35. However, the court sustained the Second Remand results, finding that the plaintiff had failed to exhaust its administrative remedies by not raising or incorporating by reference those arguments before Commerce. See Meridian III, supra, 37 F.Supp.3d at 1342-54.

II. Discussion

A. Request for Reconsideration: " Pure Issue of Law" Exception to Exhaustion

" The major grounds justifying a grant of a motion to reconsider a judgment are an intervening change in the controlling

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law, the availability of new evidence, the need to correct a clear factual or legal error, or the need to prevent manifest injustice." Ford Motor Co. v. United States, 30 CIT 1587, 1588 (2006) (internal citation omitted).5 Through its arguments, Meridian asks for relief from Meridian III, contending that three of these exceptions apply.

While " [t]he exhaustion doctrine requires a party to present its claims to the relevant administrative agency for the agency's consideration before raising these claims to the Court", Shangdong Huarong Machinery Co., Ltd. v. United States, 30 CIT 1269, 1305, 435 F.Supp.2d 1261, 1292 (2006) (internal citations omitted), and the court tends to take a strict stance on exhaustion, the requirement that a party exhaust its administrative remedies has been excused in trade cases " where exhaustion would be 'a useless formality,' intervening legal authority 'might have materially affected the agency's actions,' the issue involves 'a pure question of law not requiring further factual development,' where 'clearly applicable precedent' should have bound the agency, or where the party 'had no opportunity' to raise the issue before the agency." See SeAH Steel Corp. v. United States, 35 CIT __, __, 764 F.Supp.2d 1322, 1325-26 (2011), referencing Jiaxing Brother Fastener Co., Ltd. v. United States, 34 CIT 1455, 1466, 751 F.Supp.2d 1345, 1355-56 (2010) (internal citations omitted).

Meridian claims, fundamentally, that it should be excused from exhausting its administrative remedies because (1) it " had no opportunity" to raise the issue before the agency, (2) re-iterating points it had already made to Commerce would have been a useless formality in " Commerce's informal redetermination procedures", and (3) the issue was " a pure question of law'. See Pl's Mot. at 2-11. In its response, the defendant maintains that Meridian not only failed to exhaust administrative remedy concerning Commerce's " aluminum content" analysis for the " finished goods kit" exclusion but also effectively failed to exhaust its arguments that those exceptions to exhaustion apply. The defendant avers that instead of seeking leave from the court to respond to Commerce's exhaustion argument, which was initially raised in Commerce's response to the plaintiff's comments on remand, Meridian has here first responded to the arguments after judgment was entered, and that as a result the court should dismiss Meridian's motion for reconsideration.6

" [P]arties cannot use a motion for reconsideration to raise new legal arguments that could have been raised before a judgment was issued." Bank of Ann Arbor v. Everest Nat. Ins. Co.,

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563 F.App'x 473, 476 (6th Cir. 2014), referencing Roger Miller Music, Inc. v. Sony/ATV Publ'g, 477 F.3d 383, 395 (6th Cir. 2007). However, section 2637(d) of Title 28, United States Code, provides that " the Court of International Trade shall, where appropriate, require the exhaustion of administrative remedies [pursuant to Rule 59]" (court's italics), and granting a motion for reconsideration, likewise, rests within the discretion of the court. See Agro Dutch Indus. Ltd. v. United States, 508 F.3d 1024, 1029 (Fed. Cir. 2007) (" Agro Dutch " )...

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