Canadian Wheat Bd. v. U.S.
| Decision Date | 24 April 2007 |
| Docket Number | Court No. 07-00058.,Slip Op. 07-61. |
| Citation | 491 F.Supp.2d 1234 |
| Parties | CANADIAN WHEAT BOARD, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Steptoe & Johnson, LLP (Mark Astley Moran, Jamie Benjamin Beaber and Matthew S. Yeo), for plaintiff.
Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Stephen C. Tosini); Office of Chief Counsel for Import Administration, United States Department of Commerce (Scott McBride), for defendant, of counsel.
This matter is before the court on the Canadian Wheat Board's ("CWB") motion for a preliminary injunction pursuant to USCIT Rule 65(a). By its motion, plaintiff seeks an order enjoining the United States, the United States Department of Commerce ("Commerce" or the "Department") and the Bureau of Customs and Border Protection ("Customs") from liquidating or causing or permitting to be liquidated all entries of Canadian hard red spring ("HRS") wheat that were: "(1) entered, or withdrawn from warehouse, for consumption prior to January 2, 2006; (2) imported into the United States by or on behalf of the CWB; and (3) subject to the antidumping ... and countervailing duty ... orders on HRS wheat from Canada ...." Pl.'s Mem. P. & A. Supp. Mot. TRO & Prelim. Inj. 1 ("Pl.'s Mem.");1 see also HRS Wheat from Canada, 68 Fed. Reg. 60,641 (Dep't of Commerce Oct. 23, 2003) (notice) (antidumping duty order); HRS Wheat from Canada, 68 Fed.Reg. 60,642 (Dep't of Commerce Oct. 23, 2003) (notice) (countervailing duty order) (collectively, the "AD/CVD Orders").
Plaintiff's substantive challenge is to a legal conclusion contained in Commerce's notice of revocation of the AD/CVD Orders, which was published following a negative injury determination of the United States International Trade Commission ("ITC" or the "Commission"). See HRS Wheat from Canada, Notice of Panel Decision, Revocation of Countervailing and Antidumping Duty Orders and Termination of Suspension of Liquidation, 71 Fed.Reg. 8275 (Dep't of Commerce Feb. 16, 2006) (notice) ("Notice of Revocation"). The ITC made its negative determination following remand from a binational panel assembled pursuant to article 1904 of the North American Free Trade Agreement ("NAFTA"). Specifically, plaintiff takes issue with Commerce's statement in the Notice of Revocation that it would instruct Customs to liquidate, without duties, only those imports that "entered the United States on or after January 2, 2006." Id. For plaintiff, Commerce committed legal error by not making the Notice of Revocation applicable to all entries, the liquidation of which had been suspended, made while the now invalid AD/CVD Orders were in place. Plaintiff claims that its position is supported by this Court's decision in Tembec, Inc. v. United States, 30 CIT ___, 461 F.Supp.2d 1355 (2006) ("Tembec II"), judgment vacated by Tembec, Inc. v. United States, 31 CIT, 475 F.Supp.2d 1393 (2007) ("Tembec III").2 See id. at ___, 461 F.Supp.2d at 1367 ().
The CWB asserts 28 U.S.C. § 1581(i)(4) (2000)3 as the jurisdictional basis for its suit. By its opposition to plaintiff's motion, the United States, on behalf of Commerce, argues that the Court lacks jurisdiction over this matter. See Def.'s Opp'n Pl.'s Mot. Prelim. Inj. 4-10 ("Def.'s Opp'n"). For the reasons that follow, the court finds that jurisdiction lies pursuant to 28 U.S.C. § 1581(i)(4). In addition, the court grants plaintiffs motion for a preliminary injunction.
The CWB is an exporter of Canadian HRS wheat. In September 2002, the domestic wheat industry petitioned both Commerce and the ITC seeking investigations into possible dumping and subsidization of Canadian HRS wheat, and the effects of Canadian wheat imports on the U.S. market. Thereafter, the Department published its findings that Canadian HRS wheat was both subsidized and being sold in the United States at less than fair value. See Certain Durum Wheat and HRS Wheat from Canada, 68 Fed.Reg. 52,747 (Dep't of Commerce Sept. 5, 2003) (final affirmative countervailing duty determination); Certain Durum Wheat and HRS Wheat from Canada, 68 Fed.Reg. 52,741 (Dep't of Commerce Sept. 5, 2003) (final affirmative sales at less than fair value determination).
In October 2003, after conducting its own investigation, the ITC determined that imports of Canadian HRS wheat were materially injuring the domestic industry. See Durum and HRS Wheat from Canada, USITC Pub. 3639, Inv. Nos. 701-TA-430A and 430B and 731-TA-1019A and 1019B (Oct.2003) (Final). Thereafter, on October 23, 2003, Commerce published the AD/ CVD Orders.
Plaintiff challenged the ITC's affirmative determination before a NAFTA panel. On June 7, 2005, the NAFTA panel found unsupported by substantial evidence the ITC's affirmative material injury determination and remanded the matter to the Commission for further consideration. See HRS Wheat from Canada, USA-CD2003-1904-06 (panel decision) at 64 (June 7, 2005), available at http://www.nafta-secalena.o rg/app/DocRepository/1/Disput e/english/NAFTA_Chapter_19/USA/ua03060e.pdf (last visited Apr. 24, 2007). On remand, the ITC reversed its original affirmative determination and concluded "that an industry in the United States is not materially injured, or threatened with material injury, by reason of imports of [HRS] wheat from Canada found to be subsidized and sold in the United States at less than fair value." HRS Wheat from Canada, USITC Pub. 3806, Inv. Nos. 701-TA-430B and 731-TA-1019B (Oct.2005) (Remand).
The domestic wheat industry then challenged the ITC's negative determination before the NAFTA panel. On December 12, 2005, the NAFTA panel sustained the ITC's negative determination and ordered the U.S. NAFTA Secretary to issue a Notice of Final Panel Action. See HRS Wheat from Canada, USA-CDA-2003-1904-06 () at 5, 21-22 (Dec. 12, 2005), available at http://www.nafta-sec-alena.org/app/ DocRepository/1/ua03061e.pdf (last visited Apr. 24, 2007). That notice was issued on December 23, 2005.
On January 30, 2006, the U.S. NAFTA Secretary published in the Federal Register a Notice of Completion of Panel Review, which by its terms was effective as of January 24, 2006. See Article 1904 NAFTA Panel Reviews; Completion of Panel Review, 71 Fed.Reg. 4896 (Dep't of Commerce Jan. 30, 2006) (notice).
On January 31, 2006, pursuant to 19 U.S.C. § 1516a(g)(5)(B), Commerce published in the Federal Register notice that the NAFTA panel's final decision was not in harmony with the Commission's original affirmative injury determination. See HRS Wheat from Canada: NAFTA Panel Decision, 71 Fed.Reg. 5050 (Dep't of Commerce Jan. 31, 2006) ("Timken Notice"); see also Timken Co. v. United States, 893 F.2d 337, 340 (Fed.Cir.1990). This notice had an effective date of January 2, 2006.4 The notice stated that it "serve[d] to suspend liquidation of entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after January 2, 2006, i.e., 10 days from the issuance of the Notice of Final Panel Action, at the current cash deposit rate." Timken Notice, 71 Fed.Reg. at 5051. Thus, the notice preserved from liquidation those entries made on or after January 2, 2006, but did nothing to prevent liquidation of earlier entries made with unfair trade duties in place.
Commerce took this action even though it recognized that the ITC's negative determination removed the foundation for the AD/CVD Orders. That is, the ITC's October 2003 affirmative injury determination had been reversed. In keeping with this reversal, on February 16, 2006, the Department published the Notice of Revocation, which "revok[ed] the countervailing duty order and antidumping duty order on [HRS] wheat from Canada...." Notice of Revocation, 71 Fed.Reg. at 8275. Nonetheless, Commerce explicitly stated that the Notice of Revocation "[did] not affect the liquidation of entries made prior to January 2, 2006." Id.
Plaintiff's entries were made in September 2004. At the time plaintiff entered its merchandise, the goods were subject to the duties imposed by the then-existing AD/CVD Orders. As a result, the CWB paid cash deposits based on the 5.29 percent net subsidy rate and 8.86 percent antidumping duty margin.5 Liquidation of these entries was suspended on October 31, 2005, when the CWB filed a request for an administrative review of the AD/CVD Orders. See Pl.'s Mem. 6. On February 26, 2007, however, the CWB withdrew its request for an administrative review, thereby exposing its entries to liquidation under the terms of the Notice of Revocation. See Pl.'s Mem. 7.
On February 21, 2007, nearly one year after the publication of the Notice of Revocation, the CWB commenced this action. Plaintiff now asks the court to enjoin preliminarily the liquidation of its merchandise to allow it to litigate the merits of its case.
The Courts have developed the familiar four-part test requiring a party seeking injunctive relief to establish that: (1) it is likely to succeed on the merits of its complaint; (2) absent an injunction, it will be irreparably harmed; (3) the balance of hardships on the parties favors the movant; and (4) the public interest would be better served by the issuance of the injunction. See FMC Corp. v. United States, 3 F.3d 424, 427 (Fed.Cir.1993); Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (Fed.Cir.1983).
In determining whether the movant has carried its burden and satisfied the four-part test, "[n]o one factor, taken individually is necessarily dispositive." FMC Corp., 3 F.3d at 427. Indeed, "[a]s a basic proposition, the matter...
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