Capella Sales & Servs. Ltd. v. United States

Decision Date14 September 2016
Docket NumberCourt No. 15-00318,Slip Op. 16-86
Citation181 F.Supp.3d 1255
Parties Capella Sales & Services Ltd., Plaintiff, v. United States, Defendant.
CourtU.S. Court of International Trade

Irene H. Chen , Chen Law Group, LLC, of Rockville, MD, and Mark B. Lehnardt , Lehnardt & Lehnardt, LLC, of Liberty, MO, for the Plaintiff.

Aimee Lee , Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for the Defendant. Also on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Reginald T. Blades, Jr. , Assistant Director. Of counsel were Jessica M. Link , Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC, and Edward N. Maurer , Deputy Assistant Chief Counsel, International Trade Litigation, U.S. Customs & Border Protection, of New York, NY.

Alan H. Price , Robert E. DeFrancesco, III , and Derick G. Holt , Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor.

OPINION

Pogue, Senior Judge:

In this action, Capella Sales & Services Ltd. ("Plaintiff" or "Capella")1 again2 challenges the assessment of countervailing duties ("CVD"), at the rate of 374.15 percent ad valorem, on four of its entries of aluminum extrusions from the PRC. The U.S. Department of Commerce ("Defendant" or "Commerce") assessed these duties by applying the all-others rate calculated in Aluminum Extrusions from the [PRC], 76 Fed. Reg. 18,521 (Dep't Commerce Apr. 4, 2011) (final affirmative countervailing duty determination) ("Final CVD Determination"), rather than the (lower) "lawful [cash] deposit rate" calculated subsequently on remand and redetermination of the same Final CVD Determination pursuant to litigation to which Capella was not a party. Compl., ECF No. 3, at ¶¶ 56, 58.

The result in this second action is directed by the Court's opinion in Capella I: Because Capella's complaint challenges Commerce's administration and enforcement of a CVD rate, the court has jurisdiction under 28 U.S.C. § 1581(i) (2012). However, because Plaintiff did not participate in, and have liquidation of its entries enjoined pursuant to, the litigation that resulted in the "lawful rate" calculated on remand and redetermination, it cannot claim entitlement to that rate for entries made prior to the effective date of the revised rate. See19 U.S.C. §§ 1516a(c)(1), 1516a(e) (2012) ; Compl., ECF No. 3, at ¶ 7; cf.Capella I, ––– CIT at ––––, 180 F.Supp.3d at 1295, Slip Op. 16–72 at 3. Plaintiff has, therefore, failed to state a claim upon which relief can be granted. USCIT Rule 12(b)(6).

BACKGROUND

The background of this case is, in almost all respects, identical to the background provided in the Court's opinion in Capella I, ––– CIT at ––––, 180 F.Supp.3d at 1295-99, Slip. Op. at 3–11. For ease of reference, we note here only that Commerce's underlying CVD determination on aluminum extrusion from the PRC calculated an all-others rate of 374.15 percent ad valorem. Final CVD Determination, 76 Fed. Reg. at 18,523. Pursuant to the associated CVD Order, Commerce instructed U.S. Customs and Border Protection ("Customs") to collect cash deposits for non-individually investigated companies at that all-others rate. Aluminum Extrusions from the [PRC], 76 Fed. Reg. 30,653, 30,655 (Dep't Commerce May 26, 2011) (countervailing duty order) ("CVD Order"). Some respondents appealed this determination to this Court in MacLean – Fogg v. United States, Consol. Ct. No. 11–00209,3 as a result of which, after multiple judicial opinions,4 including an appeal to the Court of Appeals for the Federal Circuit ("CAFC"),5 and agency redeterminations,6 the all-others rate was reduced to 7.37 percent (the post-MacLean-Fogg rate). [Fourth] Results of Redetermination Pursuant to Ct. Remand, Consol. Ct. 11-209, ECF Nos. 124-1 (conf. ver.) & 125-1 (pub. ver.).

While the above was ongoing, Capella made four entries of aluminum extrusions from the PRC—two on November 28, 2011, one on March 20, and one on June 16, 2012. Capella mistakenly entered its merchandise as Type 01 (i.e., not subject to AD or CVD duties) rather than Type 03 (i.e., subject to AD or CVD duties). Compl., ECF No. 3, at ¶ 7; CBP Forms 7501 reproduced in Compl., ECF No. 3-1 at attach. 5; Protest, 4601-14-101149 (July 14, 2014), reproduced in Compl. ECF No. 3-1 at attach. 15.

Capella did not participate in the investigation underlying the CVD Order or the MacLean-Fogg litigation. Compl., ECF No. 3, at ¶ 7 ("Capella was unaware of the CVD Order."). Nor did Capella participate in the first administrative review of the CVD Order. Id. at ¶ 10 ("[Capella] was not aware of" the review and therefore "did not know to request a review"). Capella also did not participate in the second administrative review of the CVD Order. Id. at ¶ 22. Based on this lack of participation, Commerce instructed Customs to liquidate Capella's entries at their cash deposit rate. CBP Message No. 2209305 (July 27, 2012), reproduced in Compl., ECF No. 3-1 at attach. 6; CBP Message No. 3197305 (July 16, 2013), reproduced in Compl., ECF No. 3-1 at attach. 10.7

Capella filed its first action with this Court following the CAFC's decision in MacLeanFogg V, 753 F.3d 1237. Summons, Ct. No. 14–304, ECF No. 1; Compl., Ct. No. 14–304, ECF No. 2. In that case, as here, Capella challenged Commerce's decision to assess the investigation rate, rather than a rate resulting from the MacLean - Fogg litigation, on its entries. See Capella I, ––– CIT at ––––, 180 F.Supp.3d at 1301, 1301-02, Slip Op. 16–72 at 16, 18–19.

While Capella I was pending, Commerce made its fourth and final redetermination in MacLean – Fogg, establishing an all-others rate of 7.37 percent ad valorem. [Fourth] Results of Redetermination Pursuant to Ct. Remand, Consol. Ct. 11-209, ECF Nos. 124–1 (conf. ver.) & 125-1 (pub. ver.). This Court affirmed.

Mac – Lean Fogg VIII, 106 F.Supp.3d 1356. Between this affirmance and publication of Commerce's amended final CVD determination in the Federal Register, Capella sent a letter to Commerce arguing that "Commerce should adjust the effective date of the new all-others cash deposit rate of 7.37 percent to apply retroactively to all entries since [Aluminum Extrusions from the [PRC], 75 Fed. Reg. 54,302 (Dep't Commerce Sept. 7, 2010) (preliminary affirmative CVD determination) ]." Letter from Capella to Commerce (Oct. 29, 2015) at 2, reproduced in Compl., ECF No. 3-1 at attach. 17; see Compl., ECF No. 3, at ¶ 35.8

Commerce did not adjust the effective date of the new all-others rate. Rather, Commerce published notice of the new all-others cash deposit rate with an effective date of November 2, 2015, Am. Final CVD Determination, 80 Fed. Reg. at 69,640 -41,9 and issued corresponding instructions to Customs.10 Commerce also issued instructions to Customs to refund cash deposits made in excess of the new rate for entries made before the new cash deposit instructions (November 13, 2015) but after the effective date (November 2, 2015).11

Capella then filed its second action—the instant action—again challenging the CVD rate assessed on its four entries. Summons, ECF No. 1; Compl., ECF No. 3. Capella challenges Commerce's Am. Final CVD Determination, 80 Fed. Reg. 69,640, the corresponding Cash Deposit Instructions, ECF No. 3-1 at attach. 17, and Refund Instructions, ECF No. 3-1 at attach. 19, as "arbitrary, capricious, and [an] abuse of discretion, or otherwise not in accordance with law" for failing to apply, retroactively to Capella's entries, "the lawful [cash] deposit rate," that is the post-MacLean-Fogg rate of 7.37 percent ad valorem. Compl., ECF No. 3, at ¶¶ 56, 58; see Am. Final CVD Determination, 80 Fed. Reg. at 69,641.

The Defendant's motion to dismiss is now before the court. Def.'s Mot. to Dismiss, ECF No. 27.12

DISCUSSION
I. Defendant's Motion to Dismiss Pursuant to USCIT Rule 12(b)(1) For Lack of Subject Matter Jurisdiction13

As in Capella I, Capella claims jurisdiction here under 28 U.S.C. §§ 1581(i)(2), (4), Compl., ECF No. 3, at ¶ 38, framing its action as a challenge to Commerce's decision to not retroactively apply the "lawful [cash] deposit rate" calculated pursuant to the MacLean-Fogg litigation to Capella's entries, id. at ¶ 56.14 Defendant again moves to dismiss, under USCIT Rule 12(b)(1), asserting that Capella's action seeks to challenge the 374.15 percent rate itself and therefore requires jurisdiction under § 1581(c). Def.'s Mot. to Dismiss, ECF No. 27 at 19-22.

Defendant, however, fails to recognize the nature of Capella's claim. Here, Capella challenges Commerce's "decision in the [Am. Final CVD Determination, 80 Fed. Reg. 69,640, Cash Deposit Instructions, ECF No. 3-1 at attach. 18, and Refund Instructions, ECF No. 3-1 at attach. 19] to apply the lawful [cash] deposit rate" only prospectively, for entries made on or after November 2, 2015, given the "extreme disparity between" the 374.15 percent investigation rate and the post-MacLean-Fogg rate. Compl., ECF No. 3, at ¶ 56.15 As explained more fully in Capella I, ––– CIT at ––––, 180 F.Supp.3d at 1298-1301, Slip Op. 16–72 at 11–17, Plaintiff challenges the administration and enforcement of that CVD rate, not the CVD rate itself—specifically, Capella seeks a change in who is retroactively entitled to the benefit of the post-MacLean-Fogg rate. See Compl., ECF No. 3, at ¶¶ 39, 56.16

As Plaintiff's action is therefore a challenge to the "administration and enforcement" of "[CVD] duties," see28 U.S.C. §§ 1581(i)(2), (4), and "jurisdiction under another subsection of § 1581" is not available, Norcal/Crosetti Foods, Inc. v. United States, 963 F.2d 356, 359 (Fed.Cir.1992),17 this Court has jurisdiction over Plaintiff's action pursuant to 28 U.S.C. § 1581(i). Cf.Capella Sales & Services, Ltd. v. United States, ––– CIT ––––, 180 F.Supp.3d 1293, Slip Op. 16–72, 2016 WL 3950721 (July 20, 2016) ; Snap - on, Inc. v. United States...

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