Capella Sales & Servs. Ltd. v. United States

Decision Date04 January 2018
Docket Number2017-1196,2016-2649
Citation878 F.3d 1329
Parties CAPELLA SALES & SERVICES LTD., Plaintiff–Appellant v. UNITED STATES, ALUMINUM EXTRUSIONS FAIR TRADE COMMITTEE, Defendants–Appellees
CourtU.S. Court of Appeals — Federal Circuit

Irene Huei–min Chen, Chen Law Group LLC, Rockville, MD, argued for plaintiff-appellant.

Aimee Lee, International Trade Field Office, Appellate Section, International Trade Litigation, United States Department of Justice, New York, NY, argued for defendant-appellee United States. Also represented by Chad A. Readler, Jeanne E. Davidson, Reginald T. Blades, Jr. ; James Henry Ahrens, II, Office of the Chief Counsel for Trade Enforcement & Compliance, United States Department of Commerce, Washington, DC.

Alan H. Price, Wiley Rein, LLP, Washington, DC, for defendant-appellee Aluminum Extrusions Fair Trade Committee. Also represented by Robert E. DeFrancesco, Iii, Laura El–Sabaawi, Derick Holt.

Before Lourie, O’Malley, and Chen, Circuit Judges.

Lourie, Circuit Judge.

Capella Sales & Services Ltd. ("Capella") appeals from the decisions of the United States Court of International Trade (the "Trade Court"), dismissing Capella’s two separate complaints under USCIT Rule 12(b)(6). Capella Sales & Servs. Ltd. v. United States , 180 F.Supp.3d 1293, 1303–04 (Ct. Int’l Trade 2016) (" Decision I "); Capella Sales & Servs. Ltd. v. United States , 181 F.Supp.3d 1255, 1263–64 (Ct. Int’l Trade 2016) (" Decision II "). Because the Trade Court did not err in dismissing Capella’s complaints, we affirm.

BACKGROUND

The United States Department of Commerce ("Commerce" or "the Secretary") has authority, in certain situations, to impose countervailing duties ("CVDs") on imported goods if it "determines that the government of a country ... is providing, directly or indirectly, a countervailable subsidy with respect to" an imported good. 19 U.S.C. § 1671(a)(1) (2012). Capella challenges here the assessed CVD rate of 374.15% on four entries of aluminum extrusions that Capella imported into the United States from the People’s Republic of China ("PRC"), arguing that it is entitled to a lower rate obtained by several other importers after they successfully challenged the 374.15% rate at the Trade Court in a separate case.

In determining whether and at what rates to assess CVDs, Commerce may initiate an investigation. Id. § 1671a(a). Within a fixed time period following initiation of an investigation, Commerce "shall make a final determination of whether or not a countervailable subsidy is being provided with respect to the subject merchandise." Id. § 1671d(a)(1). If Commerce identifies such a countervailable subsidy, then it shall determine either "an estimated individual [CVD] rate for each exporter and producer individually investigated," or, if permitted by § 1671d(c)(5), "an estimated all-others rate for all exporters and producers not individually investigated." Id. § 1671d(c)(1)(B)(i). If Commerce calculates an all-others rate, Commerce must then order the "posting of a cash deposit, bond, or other security ... for each entry of the subject merchandise" at that rate. Id. § 1671d(c)(1)(B)(ii). This rate is referred to as the cash deposit rate.

After the posting of the cash deposit or bond at the cash deposit rate, entries are "liquidated," subject to certain limitations. See 19 U.S.C. § 1504. Liquidation is "the final computation or ascertainment of duties on entries." 19 C.F.R. § 159.1 (2017). The general rule is that "entries of merchandise ... covered by a determination of the Secretary ... shall be liquidated in accordance with the determination of the Secretary." 19 U.S.C. § 1516a(c)(1).

However, the statute contemplates several situations in which subject entries might not be liquidated at the cash deposit rate calculated in the final determination. First, if an affected party challenges a final determination by Commerce covering its entries in court, and the court enjoins liquidation of the entries at Commerce’s determined rate, then those entries are instead "liquidated in accordance with the final court decision in the action," which could result in a revised cash deposit rate. Id. § 1516a(e). Second, subject entries not enjoined by the court must still be liquidated according to the final court decision if the entries are made "after the date of publication in the Federal Register ... of a notice of the court decision." Id. § 1516a(e)(1). Such a notice is called a " Timken notice," referring to Timken Co. v. United States , 893 F.2d 337, 341 (Fed. Cir. 1990). Commerce may also initiate administrative review of entries "if a request for such review has been received," 19 U.S.C. § 1675(a)(1), and then calculate a new rate that forms "the basis for the assessment of [CVDs] ... and for deposits of estimated duties," id. § 1675(a)(2)(C).

Commerce initiated a CVD investigation of imports of certain aluminum extrusions from the PRC in 2010. As a result of the investigation, Commerce published a final determination setting the all-others rate on entries of aluminum extrusions from the PRC at 374.15%, see Aluminum Extrusions from the [PRC]: Final Affirmative Countervailing Duty Determination, 76 Fed. Reg. 18,521, 18,522 (Apr. 4, 2011) (the "final determination"), and issued a CVD order on May 26, 2011, directing United States Customs and Border Protection ("CBP") to assess CVDs on subject merchandise as calculated in the final determination, see Aluminum Extrusions from the [PRC]: Countervailing Duty Order, 76 Fed. Reg. 30,653, 30,655 (May 26, 2011). Capella imported its four entries of subject aluminum extrusions from the PRC between November 2011 and June 2012.

Meanwhile, several other aluminum importers challenged Commerce’s final determination at the Trade Court, resulting in the MacLean–Fogg litigation. The MacLean–Fogg litigation resulted in court decisions holding the 374.15% all-others rate unlawful, MacLean–Fogg Co. v. United States , 853 F.Supp.2d 1336, 1342–43 (Ct. Int’l Trade 2012), and affirming a lower rate determined by Commerce, MacLean–Fogg Co. v. United States , 885 F.Supp.2d 1337, 1342–43 (Ct. Int’l Trade 2012). Commerce published a Timken notice, effective December 10, 2012, notifying the public that the latter MacLean–Fogg decision was "not in harmony with" Commerce’s final determination. Aluminum Extrusions from the [PRC]: Notice of Court Decision Not in Harmony With Final Determination, 77 Fed. Reg. 74,466, 74,466 –67 (Dec. 14, 2012) (the " Timken notice"). Ultimately, the MacLean–Fogg litigation resulted in an all-others rate of 7.37% on entries of aluminum extrusions from the PRC. Aluminum Extrusions from the [PRC]: Amended Final Countervailing Duty Determination, 80 Fed. Reg. 69,640, 69,641 (Nov. 10, 2015).

Certain parties requested, and Commerce initiated, administrative review of 2011 and 2012 entries subject to Commerce’s final determination in July 2012 and June 2013, respectively. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 77 Fed. Reg. 40,565 –02, 40,567 (July 10, 2012); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 78 Fed. Reg. 38,924 –01, 38,925 (June 28, 2013). Capella never sought administrative review of its entries. Consequently, under 19 C.F.R. § 351.212(c) (2011), Capella’s four entries were subject to automatic liquidation at the 374.15% cash deposit rate in effect at the time of the entries.

When CBP required Capella to pay cash deposits at the all-others CVD rate, Capella refused. Capella instead filed two complaints at the Trade Court challenging Commerce’s instructions regarding the rate applicable to Capella’s entries. Both complaints asserted that Commerce cannot lawfully apply the 374.15% rate to Capella’s four entries because of the disparity between the 374.15% rate from Commerce’s final determination and the ultimate 7.37% rate resulting from the MacLean–Fogg litigation.

The Trade Court dismissed both complaints under USCIT Rule 12(b)(6) for failure to state a claim upon which relief can be granted. The Trade Court determined that Congress, in § 1516a(c)(1) and § 1516a(e), spoke clearly on the issue of what CVD rate applies to pre- Timken notice entries when liquidation is not enjoined by court decision or the subject of administrative review: the rate Commerce established in its final determination. Decision II , 181 F.Supp.3d at 1263–64 ; Decision I , 180 F.Supp.3d at 1303–04. Because there was no dispute that Capella’s entries were made before the Timken notice and that Capella did not participate in the MacLean–Fogg litigation or request administrative review of its entries, Capella could not claim the benefit of the lower all-others rate awarded to the MacLean–Fogg litigants.

Capella appealed both dismissals, and we have jurisdiction over the consolidated appeal under 28 U.S.C. § 1295(a)(5).

DISCUSSION

We review de novo the Trade Court’s dismissal of a complaint for failure to state a claim upon which relief can be granted. United States v. Ford Motor Co. , 497 F.3d 1331, 1336 (Fed. Cir. 2007). We accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of Capella. Perez v. United States , 156 F.3d 1366, 1370 (Fed. Cir. 1998).

In reviewing the validity of an agency’s interpretation of a statute that it is charged with administering, "we must first carefully investigate the matter to determine whether Congress’s purpose and intent on the question at issue is judicially ascertainable." Timex V.I., Inc. v. United States , 157 F.3d 879, 881 (Fed. Cir. 1998) ; see also Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 842–43 & n.9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). We do so by employing the traditional tools of statutory construction; we examine the statute’s text, structure, and legislative history, and apply the relevant canons of interpretation. See Timex , 157 F.3d at 882. If we "ascertain[ ] that Congress had an intention on the precise...

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