Barden Corp. v. United States, SLIP OP 16–12

• Decision Date: 10 February 2016
• Docket Number: SLIP OP 16–12,Consol. Court No. 06–00435
• Citation: 144 F.Supp.3d 1341
• Parties: The Barden Corporation, Plaintiff, v. United States, Defendant.
• Court: U.S. Court of International Trade

144 F.Supp.3d 1341

The Barden Corporation, Plaintiff,

v.United States, Defendant.

SLIP OP 16–12

Consol. Court No. 06–00435

United States Court of International Trade.

February 10, 2016

Max F. Schutzman, Andrew T. Schutz, and Kavita Mohan, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, New York, for Plaintiff The Barden Corporation.

Martin M. Tomlinson, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Frank E. White, Jr., Assistant Director. Of counsel on the brief were Suzanna Hartzell–Baird and Jessica Miller, Office of the Assistant Chief Counsel, U.S. Customs and Border Protection, of Washington, DC.

Patrick V. Gallagher, Jr., Attorney–Advisor, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, for Defendant U.S. International Trade Commission. With him on the brief were Dominic Bianchi, General Counsel, and Robin L. Turner, Acting Assistant General Counsel for Litigation.

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

Before: Timothy C. Stanceu, Chief Judge, Leo M. Gordon, Judge, Gregory W. Carman, Senior Judge

OPINION

Gordon, Judge:

Plaintiff, The Barden Corporation (“Barden”), a domestic producer of antifriction bearings (“AFBs”), initiated these consolidated actions¹ against the United States asserting constitutional challenges to the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”), Pub.L. No. 106–387, §§ 1001–03, 114 Stat. 1549, 1549A–72–75 (2000), codified at 19 U.S.C. § 1675c (2000),² repealed by Deficit Reduction Act of 2005, Pub.L. No. 109–171, § 7601(a), 120 Stat. 4, 154 (2006).³

Barden applied for, but was denied, shares for Fiscal Years (“FYs”) 2007, 2008, and 2009 of CDSOA distributions of antidumping duties assessed under various AFB antidumping duty orders issued in 1989.⁴ U.S. Customs and Border Protection (“Customs” or “CBP”) denied Barden's applications for FYs 2007, 2008, and 2009 under a provision of the CDSOA (the “acquisition provision”) that makes a domestic producer ineligible to receive CDSOA distributions if it was “acquired by a company or business that is related to a company that opposed the investigation” resulting in the issuance of the relevant antidumping duty order. 19 U.S.C. § 1675c(b)(1). As to FYs 2010 and 2011, Barden made no application for CDSOA distributions.

Regarding claims for FYs 2007, 2008, and 2009, Barden raises two as-applied challenges to the constitutionality of the acquisition provision. First, Barden claims that Customs violated Barden's constitutional right to equal protection by denying Barden CDSOA eligibility without a rational basis, asserting that Barden is situated similarly to other domestic producers that received CDSOA distributions. Second, Barden claims that Customs applied the acquisition provision retroactively and thereby violated Barden's right to due process. For FYs 2010 and 2011, Barden challenges Customs' application of the acquisition provision of the CDSOA to Barden under the First Amendment, equal protection doctrine, and due process clause.

Before the court is Plaintiff's motion for judgment upon the agency record, submitted under USCIT Rule 56.1. Plaintiff seeks (1) declaratory relief stating that the acquisition provision as applied to it is unconstitutional on equal protection and retroactivity grounds, and (2) an affirmative injunction requiring Customs to distribute CDSOA funds to Barden. For the reasons set forth below, the court denies Plaintiff's Rule 56.1 motion and will enter judgment for Defendants.

I. Background

The background of this litigation is summarized briefly below and provided in detail in Barden Corp. v. United States, 36 CIT ––––, 864 F.Supp.2d 1370 (2012) (“Barden I ”). The court presumes familiarity with the CDSOA, the underlying antidumping duty investigations, the procedural history of the decisions by the U.S. International Trade Commission (“ITC”) and Customs regarding the CDSOA distributions for the subject fiscal years, and the underlying facts in this action as described in Barden I.

Barden expressly supported the petition underlying the antidumping duty investigation that resulted in the 1989 antidumping duty orders on AFBs. In 1991, Barden was acquired by FAG Kugelfischer Georg Schaefer KGaA, a German producer of AFBs whose U.S. affiliate, FAG Bearings Corporation, opposed the AFBs antidumping duty petition. See Compl. ¶ 10, ECF No. 4.⁵ In 2002, FAG Kugelfischer Georg Schaefer KGaA, FAG Bearings Corporation, and Barden were acquired by INA–Schaeffler KG, another German producer of AFBs. Id. INA's U.S. manufacturing affiliate, INA Bearing Co., Inc., also opposed the antidumping duty petition. Br. in Supp. of Pl.'s Rule 56.1 Mot. for J. Upon the Agency R. 4, ECF. No. 95 (“Barden's Br.”) (citing INA Bearing Co., Inc. Producer's Questionnaire Responses, Docs. 4–5, ECF No. 86–7).

In December 2000, as required by the CDSOA, the ITC transmitted to Customs a list of antidumping and countervailing duty orders in effect as of January 1, 1999, along with a list of those companies that had indicated “public” support for the petition seeking initiation of the antidumping duty investigation on AFBs. See Letter from USITC to Customs Re: List of Entities Indicating Public Support of Petition (Dec. 29, 2000), Doc. 5, ECF No. 95–1. Inclusion on the ITC's list of supporters of the petition is a necessary, but not a sufficient, condition for receiving distributions under the CDSOA. The initial ITC list of supporters of the petition resulting in the AFBs orders did not include Barden because Barden had not waived confidentiality for its expression of support for the petition. As a result, Customs' notices of intent to distribute for FYs 2004, 2005, and 2006 did not include Barden.

Barden initially was excluded from Customs' notice of intent to distribute for FY 2007. See Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, 72 Fed.Reg. 29,582 (Dep't of Homeland Security May 29, 2007). However, it subsequently filed the necessary waiver of confidentiality and certifications with the ITC. See Letter from Barden and Schaeffler Containing Certifications for FY 2007 (July 27, 2007), Doc. 7, ECF No. 95–1. Thereafter, the ITC added Barden to the FY 2007 list of supporters of the petition. See Letter from USITC to Customs Re: Revision of Commission's List of Petitioners to Include Barden (Aug. 3, 2007), Doc. 8, ECF No. 95–1. Customs nevertheless denied Barden's application for FY 2007 CDSOA distributions because Barden was not included on the ITC's initial list. See Letter from CBP to Barden Denying Barden's Request for CDSOA Disbursements (Sept. 21, 2007), Doc. 9, ECF No. 95–1. Barden requested reconsideration. See Letter from Barden to CBP Requesting Reconsideration of CDSOA Disbursements (Dec. 20, 2007), Doc. 10, ECF No. 95–1.

Customs denied the request for reconsideration, reasoning that Barden “appears to have been acquired by a company that opposed the antidumping duty investigations.” Letter from CBP to Barden Denying Reconsideration for 2007 CDSOA Disbursements (Jan. 15, 2008), Doc. 11, ECF No. 95–1. Customs later rejected Barden's certifications and requests for distributions for FYs 2008 and 2009, using the same rationale. See Letters from CBP to Barden Denying Reconsideration for 2008 and 2009 CDSOA Disbursements (Sept. 5, 2008 & Aug. 19, 2009), Docs. 12–13, ECF No. 95–1.

The court previously dismissed Barden's First and Fifth Amendment challenges to the distributions for FYs 2004, 2005, and 2006. Regarding FY 2004, the court held that the claims against the ITC were time-barred and that no relief could be granted for the claims against Customs. Barden I, 36 CIT at ––––, 864 F.Supp.2d at 1376–77. The court also dismissed Barden's claims for FYs 2005 and 2006 for failure to state a claim upon which relief can be granted, on the ground that Barden, prior to 2007, failed to provide the required waiver of confidential treatment for its support of the petition. Id. at ––––, 864 F.Supp.2d at 1377–78. For the same reason, the court concluded that Barden's constitutional challenge to the retroactive aspect of the CDSOA failed for FYs 2005 and 2006. Id. at ––––, 864 F.Supp.2d at 1378–79. Finally, the court held that Barden's remaining constitutional claims for FYs 2005 and 2006, which challenged the petition support requirement, were foreclosed by the binding precedent of SKF USA, Inc. v. U.S. Customs and Border Protection, 556 F.3d 1337 (Fed.Cir.2009) (“SKF ”), cert. denied, 560 U.S. 903, 130 S.Ct. 3273, 176 L.Ed.2d 1182 (2010). Barden I, 36 CIT at ––––, 864 F.Supp.2d at 1378.

The court, however, denied motions to dismiss by Defendants and Defendant–Intervenors directed to Barden's claims for CDSOA disbursements for FYs 2007, 2008, and 2009. The court stated that “[b]ecause the acquisition clause has not been subjected to judicial challenge on constitutional grounds, either in SKF or in any other case, the questions of whether the acquisition clause is permissible under the First Amendment and whether that clause is permissible under the equal protection guarantee remain matters of first impression.” Id. at ––––, 864 F.Supp.2d at 1380. The court declined to consider the constitutional and related questions, including those pertaining to retroactivity, at the pleading stage, when the administrative record was not yet before the court. Id.

II. Discussion

The court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1581(i)(4). See id. at ––––, 864 F.Supp.2d at 1373 (citing Furniture Brands Int'l, Inc. v. United States, 35 CIT ––––, ––––, 807 F.Supp.2d 1301, 1307–10 (2011) ). The court reviews the constitutionality...