Aimcor Alabama Silicon, Inc. v. U.S.

• Decision Date: 10 December 1999
• Docket Number: Slip Op. 99-129.,Court No. 93-06-00322.
• Citation: 83 F.Supp.2d 1293
• Parties: AIMCOR, ALABAMA SILICON, INC., and American Alloys, Inc., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

83 F.Supp.2d 1293

AIMCOR, ALABAMA SILICON, INC., and American Alloys, Inc., Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. 99-129.

Court No. 93-06-00322.

United States Court of International Trade.

December 10, 1999.

Baker & Botts, L.L.P. (William D. Kramer and Clifford E. Stevens, Jr.) for plaintiffs.

David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (A. David Lafer, Senior Trial Counsel, and James H. Holl, III, Attorney); Christine Savage, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Of Counsel.

Kaye, Scholer, Fierman, Hays & Handler, LLP (Julie C. Mendoza, Donald B. Cameron, and Dean C. Garfield) for defendant-intervenor.

OPINION AND ORDER

WATSON, Senior Judge.

INTRODUCTION

This is a countervailing duty case involving ferrosilicon imported from Venezuela within the court's jurisdiction under 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(i). Pursuant to 19 U.S.C. § 1516a(c)(2), upon the request of an interested party and upon a proper showing, the Court of International Trade may enjoin the liquidation of entries covered by a countervailing duty determination of the United States Department of Commerce ("Commerce"). If the court sustains the cause of action, in whole or in part, entries of merchandise covered by a published determination of Commerce the liquidation of which was enjoined in accordance with § 1516a(c)(2), "shall be liquidated in accordance with the final court decision in the action" 19 U.S.C. § 1516a(e)(2) (emphasis added).

Defendant-intervenor, Ferroatlantica de Venezuela, S.A. ("Ferroven")(formerly CVG-Venezolana de Ferrosilicio, C.A. ("FELSILVEN")), the sole Venezuelan producer and exporter of ferrosilicon to the United States, moves to dissolve the court's May 29, 1996 preliminary injunction enjoining, during the pendency of this litigation, the liquidation of certain entries of ferrosilicon from Venezuela covered by a countervailing duty order. As grounds for dissolution, defendant-intervenor alleges that due to changed circumstances maintenance of the injunction would be inequitable and dissolution is in accord with the terms of the injunction order relating to revocation. Defendant concurs with the reasons advanced by defendant-intervenor for dissolution of the injunction.

Plaintiffs, AIMCOR Alabama Silicon, Inc. and American Alloys, Inc., domestic producers of ferrosilicon, vigorously oppose dissolution because liquidation of the entries prior to a final decision in this case would be contrary to § 1516a(e), contrary to the terms of the injunction itself, and in any event, maintenance of the injunction would not be inequitable, as claimed by defendant-intervenor.

The issue presented is whether, under relevant statutory provisions, and the facts and circumstances of this case, the court should exercise its discretion to dissolve the preliminary injunction prior to a final decision on the merits. For the reasons set forth below, the motion to dissolve is denied.

BACKGROUND

After Commerce published its final affirmative countervailing duty determination covering ferrosilicon from Venezuela, see Final Affirmative Countervailing Duty Determination: Ferrosilicon From Venezuela; and Countervailing Duty Order for Certain Ferrosilicon From Venezuela, 58 Fed.Reg. 27,539, 27,542 (May 10, 1993),¹ plaintiffs commenced this action and moved for judgment on the agency record pursuant to USCIT R. 56.2 contesting certain parts of Commerce's determination. Specifically, plaintiffs challenge Commerce's finding that the purchase by the Venezuelan government's holding company of a newly issued class of common stock, Class "E" shares, from the exporter, C.V.G. Venezolana de Ferrosilicio, C.A. ("FILSILVEN"), was consistent with commercial considerations, and therefore, was not countervailable.² Id. at 27,542. On December 13, 1994, Chief Judge DiCarlo affirmed Commerce's final determination in part, and remanded in part, with directions for further consideration and findings on the issue of whether the Class "E" stock purchase was inconsistent with commercial considerations based on the adequacy of expected return. (Remand I). See Aimcor, Alabama Silicon, Inc. v. United States, 871 F.Supp. 447, 454 (CIT 1994). See also U.S.C. § 1677(5)(A)(ii)(I)("provision of capital... on terms inconsistent with commercial considerations").

In Remand I, Commerce again found that Venezuela's purchase of FELSILVEN's Class "E" stock was consistent with commercial considerations, and hence, was not a countervailable subsidy. Final Results of [First] Remand Determination Pursuant to Court Remand (March 30, 1995) ("Remand determination I"). Plaintiffs challenged that redetermination.

On December 29, 1995, Chief Judge DiCarlo held that Commerce's findings that Class "E" shareholders would not be deprived of capital gains due to any resale restrictions or conditions, and that the shares are entitled to receive dividends and liquidation distributions are unsupported by substantial evidence on the record. Accordingly, the court held that Commerce's determination that the Venezuelan government's purchase of the Class "E" shares in 1991 was consistent with commercial considerations was unsupported by substantial evidence on the record and remanded to Commerce "to determine the appropriate countervailing duty" for Venezuela's equity infusion into FELSILVEN IN 1991 ("Remand II"). Aimcor v. United States, 912 F.Supp. 549, 555 (CIT 1995). See also, 20 CIT 94 (January 4, 1996). In an unpublished order dated April 9, 1996, Judge DiCarlo further directed Commerce to use the standard grant methodology for calculating the countervailing duty rate for the equity infusion FELSILVEN received in 1991.

On Remand II, in accordance with the court's direction, supra, Commerce determined the total countervailing duty rate to be 43.10 percent ad valorem for FELSILVEN. (which included a countervailable subsidy rate of 21.02 percent ad valorem duty rate for the 1991 equity infusion). Results of [Second] Redetermination Pursuant to Court Remand (April 17, 1996).

On April 30, 1996, plaintiffs, sought pursuant to 19 U.S.C. § 1516a(c)(2) to protect itself against the effects of perceived subsidization of the ferrosilicon exporter by the government of Venezuela by enjoining, pending the final decision in this case, the liquidation of the entries of ferrosilicon covered by the countervailing duty order. On May 29, 1996, Judge DiCarlo granted plaintiffs a preliminary injunction "enjoin[ing] [Commerce] during the pendency of this litigation from the liquidation of entries that were entered, or withdrawn from warehouse, for consumption on or after January 1, 1995, and are covered by the countervailing duty order covering ferrosilicon from Venezuela." The injunction has been continuously in effect, and the liquidation of entries has been enjoined, since the date of issuance.

On December 31, 1996, Senior Judge DiCarlo sustained Commerce's Second Redetermination on Remand II calculating the countervailing duty rate. Aimcor v. United States, 960 F.Supp. 305 (CIT 1996), aff'd-in-part, rev'd-in-part, and remanded, 154 F.3d 1375 (Fed.Cir.1998). See also, 957 F.Supp. 289, 291 (CIT 1996). Defendant-intervenor, FELSILVEN, thereupon appealed the final decision of December 31, 1996 to the Federal Circuit.

On September 9, 1998, the Federal Circuit affirmed-in-part and reversed Senior Judge DiCarlo's reversal of Commerce's determination that owners of Class "E" stock could enjoy capital appreciation. The Federal Circuit remanded to Judge DiCarlo the issue of whether an expected return based on potential capital appreciation of the shares alone was sufficient to make the purchase of Class "E" shares by the government of Venezuela consistent with commercial considerations (and hence not a countervailable subsidy). Aimcor, Alabama Silicon, Inc. v. United States, 154 F.3d 1375, 1378-80 (Fed.Cir.1998). Thereupon, on December 30, 1998, Judge DiCarlo again remanded the Class "E" stock purchase issue to Commerce ("Remand III").³

On June 3, 1999, Commerce issued its final results of redetermination in Remand III again determining that the Venezuelan government's purchase of Class E shares was consistent with commercial considerations, and therefore, not a countervailable subsidy. Final Results of [Third] Redetermination Pursuant to Court Remand (June 3, 1999).

On July 15, 1999, plaintiffs filed their comments with this court challenging the final results of Remand III, the court has extended the time for defendant's and defendant-intervenor's rebuttal responses to plaintiffs' comments until December 14, 1999, and on October 14, 1999, Ferroven filed its motion to dissolve the preliminary injunction.

After six years of litigation at both the trial and appellate levels, including three remands to Commerce, and during the pendency of this case, the ITC (which had previously made an affirmative injury determination in 1993, see USITC Pub. 2650 (1993)), received and considered a request to review its affirmative determination in light of "changed circumstances." ITC determined that certain of the alleged changed circumstances were sufficient to warrant review investigations. On July 28, 1998, the Commission initiated changed circumstances reviews with respect to the antidumping duty and countervailing duty orders covering imports of ferrosilicon from countries, including Venezuela. 63 Fed.Reg. 40,314 (July 28, 1998).

However, on May 21, 1999, the Commission suspended those changed circumstances reviews, and on reconsideration of its original determinations reversed its previous affirmative injury determinations ab initio, and issued a negative determination. See USITC Pub. 3218 (August 24, 1999). Based on the Commission's action, Commerce thereupon "rescinded" both its antidumping duty order concerning...