Algoma Steel Corp., Ltd. v. US

• Decision Date: 06 September 1988
• Docket Number: Court No. 86-07-00839.
• Citation: 696 F. Supp. 656,12 CIT 802
• Parties: The ALGOMA STEEL CORP., LTD., and Christianson Pipe, Ltd., Plaintiffs, and Ipsco, Inc., and Ipsco Steel, Inc., Plaintiff-Intervenors, v. The UNITED STATES and International Trade Commission, Defendants, and Lone Star Steel Corporation, Maverick Tube Corporation, and Sawhill Tube Division, Cyclops Corp., Defendant-Intervenors.
• Court: U.S. Court of International Trade

696 F. Supp. 656

12 CIT 802

The ALGOMA STEEL CORP., LTD., and Christianson Pipe, Ltd., Plaintiffs, and Ipsco, Inc., and Ipsco Steel, Inc., Plaintiff-Intervenors, v. The UNITED STATES and International Trade Commission, Defendants, and Lone Star Steel Corporation, Maverick Tube Corporation, and Sawhill Tube Division, Cyclops Corp., Defendant-Intervenors.

Court No. 86-07-00839.

United States Court of International Trade.

September 6, 1988.

Dow, Lohnes & Albertson, William Silverman, Leslie H. Wiesenfelder, and Michael P. House, Washington, D.C., for plaintiffs.

Barnes, Richardson & Colburn, Rufus E. Jarman, Jr., New York City, Matthew J. Clark, Karin M. Burke, New York City, for plaintiff-intervenors.

Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel, and Paul R. Bardos, U.S. Intern. Trade Com'n, Washington, D.C., for defendant Intern. Trade Com'n.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Platte B. Moring, III, Civil Div., U.S. Dept. of Justice, Washington, D.C., for defendant U.S.

Dewey, Ballantine, Bushby, Palmer & Wood, Michael H. Stein, Washington, D.C., for defendant-intervenor Lone Star Steel Co.

OPINION AND ORDER

RESTANI, Judge:

This matter is before the court on plaintiff Algoma Steel's motion for an injunction of liquidation pending appeal of the judgment of this court sustaining the determination of the International Trade Commission of likelihood of material injury to a domestic industry by reason of import of goods manufactured by plaintiff. All parties agree that the authority for any such injunction is 19 U.S.C. § 1516a(c) (1982). No party contends that the court should not hear this motion because of the pendency of the appeal but rather they appear to agree that, as is the case of any ordinary stay pending appeal, this court should hear the motion in the first instance. See Fed. R.App.P. 8(a).

As to entries made prior to May 31, 1987, the termination date of the first annual review period, the court denies plaintiff's motion. At any time during the pendency of the litigation before this court plaintiff might have asked for relief under section 1516a(c); it did not do so. Defendant United States has already issued liquidation instructions with respect to such entries, thus, any action by the court at this time will disturb to some degree the status quo as to such entries. Although liquidation may be said to be a greater disruption of the status quo, in this case the court deems it in the public interest to allow the continuation of the orderly processing of such past entries. Plaintiff concedes that it made a considered choice not to seek a injunction as to the first review period, thereby substantiating defendant's contention that no irreparable harm has been shown with respect to liquidation of the first set of entries.

The real debate in this action is whether the court should grant any injunctive relief as to the second set of entries which occurred between June 1, 1987 and May 31, 1988.¹ Plaintiff delayed almost two months in requesting injunctive relief. This is not a particularly long delay and defendants did not argue that they suffered any prejudice because of the delay. No action was taken during the two month period to effect liquidation. Accordingly, no problem of laches has arisen.

The standard for granting injunctive relief in this case would seem to be the ordinary four part test.² Beginning with the balance of hardships, defendants have not claimed any particular hardships would be caused by the injunction. Duty deposits have been made. If defendants successfully defend the appeal, the injunction will be dissolved without injury to anyone. Given that the balance of hardships is entirely with plaintiff its burdens are somewhat lessened as to the other factors.

Contrary to defendant intervenor's assertion, the court does not find plaintiff's contentions on the merits frivolous. The court obviously disagrees with plaintiff's view of the merits, see Algoma Steel Corp. v. United States, 12 CIT ____, 688 F.Supp. 639 (1988), appeal docketed No. 88-1491 (Fed.Cir. Jul. 7, 1988), but this is not a reason not to grant a stay pending appeal. See American Grape Growers Alliance for Fair Trade v. United States, 9 CIT 505, 507 (1985).

Next, the court will address the question of irreparable harm. Where the court has found a threat of mootness of the litigation and resultant waste of resources, the courts have not required proof of extraordinary financial harm as a prerequisite for an injunction. See Zenith Radio Corp. v. United States, 710 F.2d 806, 810 (Fed.Cir. 1983); Oki Electric Indus. Co. v. United States, 11 CIT ____, 669 F.Supp. 480 (1987); Ipsco, Inc. v. United States, 12 CIT ____, 692 F.Supp. 1368 (1988).³

The court agrees with defendants that mootness does not appear to be a significant issue here, but certain of defendants' arguments about review of Commerce Department determinations are relevant, for they are tangentially related⁴ and they reveal a troubled path of reasoning. Defendant United States argues that the potential for mootness of an action challenging an original determination, necessitating an injunction of liquidation under Ipsco reasoning, will occur only where plaintiff challenges the amount rather than the existence of duties. First, it is often unclear in a challenge to a dumping or subsidy finding what the effect of the challenge might be, that is, whether the challenge is simply to the amount of duties or whether exclusion may be warranted. Second, reliance solely on such a distinction would cause the granting of injunctions for minor governmental errors, but could allow major errors to injure plaintiffs. Third, although the court noted this distinction among types of challenges in another context in Fabricas El Carmen, S.A. v. United States, 12 CIT ___, 680 F.Supp. 1577 (1988) and Agrexco Agricultural Export Company, Ltd. v. United States, XX-XX-XXXXX, (CIT June 22, 1988) (Memorandum Opinion) this distinction was not recognized by the United States. Rather, the thrust of its argument was that annual review determinations prevent original determinations from having any affect. See Government's briefs opposing injunction in Ipsco and seeking dismissal in Fabricas and Agrexco. The court is not prepared to resolve all of the issues which arise out of these concerns in the context of a case involving a Commission determination, but it does appear that annual reviews to establish new rates of duties would not present a threat of mootness to this litigation.

From its view of the broader statutory scheme referred to above, the United States draws an argument that the proper way to obtain a "suspension" of liquidation and the greatest opportunity for relief as to past entries would be for a party such as plaintiff to have filed a request for an annual review. That would mean that any importer or producer who wished to challenge only the Commission's injury determination and prevent liquidation of its entries pending resolution of the dispute should put the Commerce Department to the time and expense of a frivolous annual review proceeding. Congress' intent to prevent unnecessary annual reviews was a factor in granting of the injunction in Ipsco, and this factor affects both the analysis of whether irreparable injury exists and the question of the public interest here, as well.⁵

The United States also argues that the court ignores or rewrites 19 C.F.R. § 353.53a (1987) which provides for liquidation in accordance with the deposit rate in effect at the time of entry if no annual review is requested. On the other hand, at times defendant seemed to contend that the regulation does not apply fully if a court decision results in revocation of the order requiring the deposits. As the court in Oki and Ipsco held, 19 C.F.R. § 353.53a does not appear to apply in its literal terms to every case. If it did, it likely would be in conflict with the statute. All of this leads to the conclusion that the Government's view of the effects of 19 U.S.C. § 1516a(c) and its own regulation is flawed by inconsistency.

Apart from the mootness factor, which appears to be missing here, and the goal of conserving judicial and administrative resources, which may be present, plaintiff might also meet part of its burden by demonstrating unusual financial harm. In this case, pursuant to section 1516a(c), if injunction of liquidation is not granted plaintiffs' goods will likely be subjected to millions of dollars in duties even if it succeeds on appeal. Inability to obtain any monetary relief with regard to liquidated entries involving such substantial amounts weighs in favor of granting the injunction. See National Juice Products Ass'n. v. United States, 10 CIT ___, 628 F.Supp. 978, 984 (1986); American Customs Brokers Co. v. U.S. Customs Service, 10 CIT ___, 637 F.Supp. 218, 220 (1986) (both finding that the lack of ability to obtain relief in a court of law for economic harm suffered may constitute irreparable harm). The problem with plaintiff's argument in this regard is that it is plaintiff's subsidiary, not a party, which will pay the duties. Plaintiff made no attempt to relate the duties to its own economic harm. The court may assume some unrecoverable financial harm, but the degree is uncertain.

Defendants' key argument in this case is the public interest, as reflected in the statutory scheme. They argue that the intent of Congress is to deny injunctive relief unless plaintiff can show harm beyond the unrecoverable loss of substantial amounts of money. They argue further that domestic parties have a very difficult time obtaining injunctions when Commission determinations are challenged because harm through liquidation of competitor's entries at duty rates lower than those sought by the domestic interest is difficult to prove.⁶ Thus, they seem to argue that manufacturers or importers should be required to show...