77 F.Supp.3d 1336 (CIT. 2015), 14-00297, Fedmet Res. Corp. v. United States

Docket Nº:14-00297
Citation:77 F.Supp.3d 1336
Opinion Judge:Timothy C. Stanceu, Chief Judge.
Party Name:FEDMET RESOURCES CORPORATION, Plaintiff, v. UNITED STATES, Defendant
Attorney:No. 14-00297 R. Will Planert, Donald B. Cameron, and Sarah S. Sprinkle, Morris, Manning & Martin LLP, of Washington D.C., argued for plaintiff Fedmet Resources Corporation. With them on the brief were Brady W. Mills, Julie C. Mendoza, and Mary S. Hodgins. Amy M. Rubin, Assistant Director, Commerc...
Judge Panel:Before: Timothy C. Stanceu, Chief Judge.
Case Date:June 26, 2015
Court:Court of International Trade
 
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77 F.Supp.3d 1336 (CIT. 2015)

FEDMET RESOURCES CORPORATION, Plaintiff,

v.

UNITED STATES, Defendant

No. 14-00297

United States Court of International Trade

June 26, 2015

Granting in part, and denying in part, defendant's motion to dismiss and granting plaintiff's motion for judgment on the agency record.

R. Will Planert, Donald B. Cameron, and Sarah S. Sprinkle, Morris, Manning & Martin LLP, of Washington D.C., argued for plaintiff Fedmet Resources Corporation. With them on the brief were Brady W. Mills, Julie C. Mendoza, and Mary S. Hodgins.

Amy M. Rubin, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington D.C., argued for defendant United States. With her on the brief were Melissa M. Devine, Trial Attorney, Patricia M. McCarthy, Assistant Director, Jeanne E. Davidson, Director, Benjamin C. Mizer, Acting Assistant Attorney General. Of counsel on the brief was Paula S. Smith, Senior Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

Before: Timothy C. Stanceu, Chief Judge.

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OPINION AND ORDER

Timothy C. Stanceu, Chief Judge.

Plaintiff Fedmet Resources Corporation (" Fedmet" ), a U.S. importer, contests decisions by U.S. Customs and Border Protection (" Customs" or " CBP" ) requiring Fedmet to post 260.24% ad valorem single transaction bonds (" STBs" ) to obtain release of Fedmet's imported merchandise. The merchandise at issue, magnesia carbon bricks (" MCBs" ) that Fedmet declared upon entry to be products of Vietnam, was the subject of three consumption entries that Fedmet made at the port of Cleveland, Ohio in late 2014. The 260.24% ad valorem duty rate upon which Customs based its bond requirement is the sum of the deposit rates Customs applied to effectuate an antidumping duty order (236%) and a countervailing duty order (24.24%) on imported MCBs from the People's Republic of China (" China" ). After commencing this action, Fedmet posted 260.24% single transaction bonds for two of the entries at issue in this litigation, each of which was made on October 21, 2014. In response, Customs has released

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the merchandise on those entries into commerce.

Before the court is Fedmet's Motion for Partial Summary Judgment on the Agency Record, in which Fedmet seeks a judgment declaring unlawful CBP's imposition of the 260.24% bonding requirement on the third entry of merchandise, made on December 2, 2014, and ordering Customs to allow the merchandise covered by that entry to be released without the posting of security for antidumping or countervailing duties. The court grants Fedmet's motion but orders further proceedings concerning the form of relief that will be necessary and appropriate with respect to this entry.

Also before the court is defendant's Motion to Dismiss two of the three counts in Fedmet's complaint for lack of jurisdiction or failure to state a claim on which relief can be granted. The court grants defendant's motion in part and denies it in part.

I. Background

A. Proceedings before U.S. Customs and Border Protection

The three consumption entries at issue in this case were made at the port of Cleveland on October 21, 2014 (Entry Nos. 336-3104829-0 and 336-3104919-9) and December 2, 2014 (Entry No. 336-3105573-3). Second Am. Compl. ¶ ¶ 21, 25, 27, ECF Nos. 45 (conf.), 46 (public) (" Second Am. Compl." ); Entry Documents for Entry No. 336-3104829-0, Tab 3 in First Admin. R., ECF No. 30-4 (conf.); Entry Documents for Entry No. 336-3104919-9, Tab 4 in First Admin. R., ECF No. 30-5 (conf.). With respect to the two October 21, 2014 entries, Customs issued to Fedmet, on November 6, 2014, an " Entry/Rejection Notice" stating that " [t]he country of origin for magnesia carbon brick is believed to be China" and requiring for release the posting of a 260.24% single transaction bond for each entry. Entry/Summary Rejection Sheet for Entry No. 336-3104829-0 , Tab 1 in First Admin. R., ECF No. 30-2 (conf.); Entry/Summary Rejection Sheet for Entry No. 336-3104919-9, Tab 2 in First Admin. R., ECF No. 30-3 (conf.). Fedmet filed with Customs, on November 12, 2014, a submission containing information by which Fedmet attempted to demonstrate that the merchandise on Entry Nos. 336-3104829-0 and 336-3104919-9 was manufactured by a producer in Vietnam that was unaffiliated with Fedmet and that had manufactured the MCBs in Vietnam to Fedmet's specifications. Second Am. Compl. ¶ 18; Oct. 9, 2014 Letter to the Port of Chicago, Submitted to the Port of Cleveland, Tab 17 to Supplemental Admin. R., ECF Nos. 47-4 to 47-11 (conf.). After Fedmet submitted the required single transaction bonds for these two entries (received by Customs on November 28, 2014), Customs released the merchandise into commerce. Second Am. Compl. ¶ 20; Jan. 21, 2015 Decl. of Edward Wachovec, Supervisory Import Specialist at the Port of Cleveland ¶ 2, Supplemental Admin. R., ECF. No. 47-1 (" Wachovec Jan. 21, 2015 Decl. " )

On December 30, 2014, Customs issued an Entry/Rejection Notice for the December 2, 2014 entry, which informed Fedmet that the shipment would not be released unless Fedmet submitted a single transaction bond in an amount calculated at 260.24% of the entered value. Entry/Summary Rejection Sheet for Entry No. 336-3105573-3, Tab 15 to Supplemental Admin. R., ECF No. 47-2 (conf.) (" Entry/Summary Rejection Sheet for Dec. 2 Entry " ). Fedmet has not submitted a 260.24% single transaction bond on the December 2, 2014 entry, and the merchandise covered by that entry has not been released.

B. Proceedings before the Court of International Trade

Plaintiff initiated this action by filing a summons and a complaint on November

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12, 2014. Summons, ECF No. 1; Compl., ECF No. 5. Plaintiff, with leave of the court, filed a second amended complaint on January 9, 2015, which the court deemed filed on January 15, 2015. Second Am. Compl. Defendant filed an answer to the second amended complaint on January 23, 2015. Answer, ECF No. 51.

Defendant filed its Motion to Dismiss Counts I and III of the second amended complaint on January 23, 2015, to which plaintiff responded in opposition on February 3, 2015, and defendant replied on March 4, 2015. Def.'s Mot. to Dismiss Counts I & III of Pl.'s Second Am. Compl., ECF Nos. 49 (conf.), 50 (public) (" Def.'s Mot. to Dismiss" ); Def.'s Mem. in Supp. of its Mot. to Dismiss Counts I & III of Pl.'s Second Am. Compl., ECF Nos. 49 (conf.), 50 (public) (" Def.'s Br. in Supp. of Mot. to Dismiss" ); Pl. Fedmet Res. Corp.'s Opp'n to Def.'s Mot. to Dismiss, ECF Nos. 52 (conf.), 54 (public) (" Pl.'s Opp'n" ); Def.'s Reply in Supp. of Mot. to Dismiss, ECF Nos. 59 (conf.), 60 (public) (" Def.'s Reply" ).

On February 3, 2015, plaintiff moved for judgment on the agency record pursuant to USCIT Rule 56.1. Mot. of Pl. Fedmet Res. Corp. for Partial J. upon the Agency R., ECF Nos. 55 (conf.), 56 (public); Mem. of Law in Supp. of Pl.'s Mot. for Partial J. upon the Agency R., ECF Nos. 55 (conf.), 56 (public) (" Pl.'s Br." ). Defendant responded in opposition to this motion on March 4, 2015 and plaintiff replied on March 24, 2015. Def.'s Resp. in Opp'n to Pl.'s Mot. for Partial J. upon the Admin. R., ECF Nos. 57 (conf.), 58 (public) (" Def.'s Opp'n" ); Reply Br. of Pl. Fedmet Res. Corp. in Supp. of its Mot. for Partial J. on the Agency R., ECF Nos. 64 (conf.), 65 (public) (" Pl.'s Reply" ).

On April 8, 2015, the court held an oral argument on both pending motions, ECF No. 67, and on April 15, 2015, plaintiff filed a joint report stipulating as to certain facts related to the bonds plaintiff obtained for the October 21, 2014 entries and informing the court of the confidentiality of certain information on the record of this proceeding, Joint Status Report, ECF No. 69 (" Joint Status Report" ).

II. Discussion

A. Jurisdiction and Standard of Review

The court exercises jurisdiction over this matter pursuant to the residual jurisdiction provision of section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(i).1 See also 28 U.S.C. § 2631(i) (" Any civil action of which the Court of International Trade has jurisdiction, other than an action specified in subsections (a)-(h) of this section, may be commenced in the court by any person adversely affected or aggrieved by agency action within the meaning of section 702 of title 5." ); 5 U.S.C. § 702 (" A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." ).

In exercising jurisdiction under 28 U.S.C. § 1581(i), the court is to review the matter as provided in the Administrative Procedure Act (" APA" ), 5 U.S.C. § 706. See 28 U.S.C. § 2640(e) (" In any civil action not specified in this section, the Court of International Trade shall review the matter as provided in section 706 of title 5." ). In accordance with 5 U.S.C. § 706, the court must " hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (the " arbitrary and capricious" standard of review).

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B. Defendant's Motion to Dismiss

1. Defendant's Motion to Dismiss Count I of Fedmet's Second Amended Complaint

In Count I of its second amended complaint, Fedmet claims that the magnesia carbon bricks on the October 21, 2014 entries were produced in, and are products of, Vietnam and that CBP's requirement that Fedmet post 260.24% single transaction bonds on those entries based on the A.D. and CVD orders, therefore, " is arbitrary, capricious, an abuse of...

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