Koyo Corp. of U.S.A. v. United States

• Decision Date: 13 March 2013
• Docket Number: Court No. 12–00147.,Slip Op. 13–32.
• Citation: 899 F.Supp.2d 1367
• Parties: KOYO CORPORATION OF U.S.A., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

899 F.Supp.2d 1367

KOYO CORPORATION OF U.S.A., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 13–32.

Court No. 12–00147.

United States Court of

International Trade.

March 13, 2013.

John M. Gurley, Nancy A. Noonan, and Diana D. Quaia, Arent Fox, LLP, of Washington, DC, for Plaintiff Koyo Corporation of U.S.A.

Courtney S. McNamara and Jessice R. Toplin, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, for Defendants United States, U.S. Customs and Border Protection, David V. Aguilar, Acting Commissioner, U.S. Customs and Border of Protection, of Washington, DC. With them on the briefs were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director.

Patrick V. Gallagher, Jr., Attorney Advisor, United States International Trade Commission, Office of General Counsel, of Washington, DC, for Defendants U.S. International Trade Commission and Irving Williamson, Chairman, U.S. International Trade Commission. With him on the brief was Neal J. Reynolds, Assistant General Counsel for Litigation.

Terence P. Stewart, Geert M. De Prest, and Patrick J. McDonough, Stewart and Stewart, of Washington, DC, for Defendant–Intervenors The Timken Company and MPB Corporation.

GORDON, Judge:

This case arose from the actions of two agencies, the U.S. International Trade Commission (“ITC”) and U.S. Customs and Border Protection (“Customs”) that denied Plaintiff Koyo Corporation of U.S.A. (“Koyo”) certain monetary benefits under the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”), 19 U.S.C. § 1675c (2000), repealed by Deficit Reduction Act of 2005, Pub. L. 109–171, § 7601(a), 120 Stat. 4, 154 (Feb. 8, 2006; effective Oct. 1, 2007).¹ The ITC did not include Koyo on a list of parties potentially eligible for “affected domestic producer” (“ADP”) status, which would have qualified Koyo for distributions of antidumping duties collected under various antidumping duty orders on tapered roller bearings and ball bearings (“subject orders”). Pl.'s Compl. ¶¶ 16, 47, 51, ECF No. 2. Because Plaintiff was not on the ITC's list of potential ADPs, Customs made no CDSOA distributions to Koyo.

Plaintiff brings facial and as-applied constitutional challenges to the CDSOA under the First Amendment and the equal protection and due process guarantees of the Fifth Amendment.

Before the court are the USCIT Rule 12(b)(5) motions of the ITC and the United States to dismiss for failure to state a claim upon which relief can be granted, and the Rule 12(c) motion of The Timken Company and MPB Corporation for judgment on the pleadings. The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(i) (2006). See Furniture Brands Int'l, Inc. v. United States, 35 CIT ––––, ––––, 807 F.Supp.2d 1301, 1307–10 (2011). For the reasons set forth below, the court concludes that Plaintiff has failed to state a claim upon which relief can be granted. The court will grant Defendants' and Defendant–Intervenors' motions and dismiss this action.

I. Background

Plaintiff was a domestic manufacturer of tapered roller bearings and ball bearings at the time of the original antidumping duty investigations that resulted in the subject orders.² Compl. ¶ 13. Koyo did not support the underlying antidumping duty investigations. Compl. ¶ 15. Plaintiff submitted multiple requests and certifications with the ITC and Customs seeking to be included on the list of ADPs. Compl. ¶¶ 16, 44, 45, 48, 53. To date, the ITC has not included Koyo on its list of ADPs eligible for disbursements of antidumping duties under the CDSOA for the subject orders for any fiscal year, including Fiscal Years 2010 and 2011. Compl. ¶¶ 16, 47, 51. Neither has Customs made any CDSOA distributions to Koyo for those fiscal years. Koyo commenced this action on May 30, 2012, contesting the denial of CDSOA distributions for the fiscal years in question. Defendants subsequently filed their motions to dismiss, and Defendant–Intervenors moved for judgment on the pleadings.

II. Standard of Review

In deciding a USCIT Rule 12(b)(5) motion to dismiss for failure to state a claim upon which relief can be granted, the court assumes all factual allegations to be true and draws all reasonable inferences in the plaintiff's favor. Nan Ya Plastics Corp., Am. v. United States, 36 CIT ––––, ––––, 853 F.Supp.2d 1300, 1305 (2012) (citing Cedars–Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583–84 & n. 13 (Fed.Cir.1993)). A USCIT Rule 12(c) motion for judgment on the pleadings is reviewed under the same standard as a motion to dismiss under Rule 12(b)(5) for failure to state a claim. Forest Labs., Inc. v. United States, 29 CIT 1401, 1402–03, 403 F.Supp.2d 1348, 1349 (2005), aff'd,476 F.3d 877 (Fed.Cir.2007).

A plaintiff's factual allegations must be “enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim of relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955).

III. Discussion

In 2000, Congress amended the Tariff Act of 1930 to add Section 754, the CDSOA, which provides distributions of assessed antidumping and countervailing duties to ADPs on a fiscal year basis. 19 U.S.C. § 1675c(d)(1). To be an ADP, a party must meet several criteria, including the requirement that it have been a petitioner, or an interested party in support of a petition with respect to which an antidumping duty or countervailing duty order was entered. Id. § 1675c(b)(1) (“petition support requirement”). The CDSOA directed the ITC to forward to Customs, within 60 days of the issuance of an antidumping or countervailing duty order, lists of persons potentially eligible for ADP status, i.e., “petitioners and persons with respect to each order and finding and a list of persons that indicate support of the petition by letter or through questionnaire response.” Id. § 1675c(d)(1). Customs then publishes the lists of potential ADPs in the Federal Register annually, prior to each distribution. Id. § 1675c(d)(2). Customs distributes assessed duties to parties on the list of potential ADPs that certify that they met the remaining eligibility criteria. Id. § 1675c(d)(2).

In this action, the ITC compiled lists of potential ADPs with respect to the subject orders. Compl. ¶ 40. Customs published the lists of potential ADPs for Fiscal Year 2010 on June 1, 2010, id. ¶ 46, and for Fiscal Year 2011 on May 27, 2011, id. ¶ 50. Plaintiff did not appear on either list. Id. ¶¶ 47, 51. Nevertheless, Plaintiff certified to Customs its eligibility for both fiscal years. Id. ¶¶ 48, 52. Customs responded by confirming receipt of Koyo's claims for Fiscal Years 2010 and 2011 but did not indicate the validity of those claims. Id. ¶¶ 49, 54.

In Count 1, Plaintiff challenges the petition support requirement, as applied to Koyo, on First Amendment grounds. Compl. ¶¶ 59–61. In Count 2, Plaintiff claims the petition support requirement facially violates the First Amendment guarantees of freedom of speech and belief, and the right to petition the government for redress of grievances. Id. ¶ 63. Plaintiff also claims that the petition support requirement facially violates the First Amendment because it engages in impermissible viewpoint discrimination by conditioning receipt of a government benefit on a private speaker's specific viewpoint, i.e., expression of support for an antidumping duty petition, and is overbroad because it compels speech. Id. ¶¶ 64–65.

In Count 3, Plaintiff challenges the application of the petition support requirement to it on Fifth Amendment equal protection grounds. Id. ¶¶ 67–69. In Count 4, Plaintiff claims that the petition support requirement violates the equal protection guarantees of the Fifth Amendment because it impermissibly creates classifications that implicate Plaintiff's fundamental speech rights, and because there is no legitimate governmental purpose for differentiating between similarly situated domestic producers. Id. ¶¶ 71–73.

Lastly, in Count 5, Plaintiff challenges the petition support requirement as impermissibly retroactive in violation of the Fifth Amendment due process guarantee because eligibility for ADP status and disbursements is based on past conduct, i.e., support for the petition, and because the retroactive aspect of those eligibility determinations is not rationally related to a legitimate government purpose. Id. ¶¶ 75–76.³

Plaintiff's First Amendment and Fifth Amendment equal protection facial challenges to the CDSOA are identical to previous claims that the court rejected in a companion case involving prior fiscal years.⁴See Pat Huval Restaurant & Oyster Bar, Inc. v. United States, 36 CIT ––––, 823 F.Supp.2d 1365 (2012) (“ Pat Huval ”). In Pat Huval, the court determined that Plaintiff's facial claims were precluded by the holding in SKF USA, Inc. v. U.S. Customs and Border Protection, 556 F.3d 1337 (Fed.Cir.2009) ( “ SKF USA II ”). Id., 36 CIT at ––––, 823 F.Supp.2d at 1375. The court noted that the Court of Appeals for the Federal Circuit upheld the CDSOA against constitutional challenges brought on First Amendment and Fifth Amendment equal protection grounds. Id. (citing SKF USA II, 556 F.3d at 1360 (“[T]he Byrd Amendment is within the constitutional power of Congress to enact, furthers the government's substantial interest in enforcing the trade laws, and is not overly broad. We hold that the Byrd Amendment is valid under the First Amendment.”); id. (“Because it serves a substantial government interest, the Byrd Amendment is also clearly not violative of equal protection...