Candle Corp. of America and Blyth v. U.S. Intern.

• Decision Date: 08 April 2003
• Docket Number: Court No. 02-00751.,No. Slip Op. 03-40.,Slip Op. 03-40.
• Citation: 259 F.Supp.2d 1349
• Parties: CANDLE CORPORATION OF AMERICA AND BLYTH, INC., Plaintiffs, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, Deanna Tanner Okun, Chairman, United States Customs Service, and Robert C. Bonner, Commissioner, Defendants, and Candle—Lite Division of Lancaster Colony Corporation, Lumi-Lite Candle Co., and General Wax & Candle Co., Defendant-Intervenors,
• Court: U.S. Court of International Trade

259 F.Supp.2d 1349

CANDLE CORPORATION OF AMERICA AND BLYTH, INC., Plaintiffs, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, Deanna Tanner Okun, Chairman, United States Customs Service, and Robert C. Bonner, Commissioner, Defendants, and Candle—Lite Division of Lancaster Colony Corporation, Lumi-Lite Candle Co., and General Wax & Candle Co., Defendant-Intervenors,

No. Slip Op. 03-40.

Court No. 02-00751.

United States Court of International Trade.

April 8, 2003.

Hale and Dorr LLP (David A. Wilson), Washington, DC, for Plaintiffs Candle Corporation of America and Blyth, Inc.

Lyn M. Schlitt, General Counsel; James M. Lyons, Deputy General Counsel, Michael Diehl, Attorney Advisor, for Defendant U.S. International Trade Commission.

Robert D. McCallum, Jr., Assistant Attorney General, David M. Cohen, Director, Lucius B. Lau, Assistant Director, Paul D. Kovac, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Ellen C. Daly, Senior Attorney, Office of the Chief Counsel, United States Customs Service, for Defendant United States, of counsel.

Stewart and Stewart (Terence P. Stewart, Eric P. Salonen, Patrick J. McDonough, Dennis R. Nuxoll), Washington, DC, for Defendant-Intervenors Candle-Lite Division of Lancaster Colony Corporation, Lumi-Lite Candle Co., and General Wax & Candle Co.

Pepper Hamilton LLP (Gregory C. Dorris, Edward M. Andries), Washington, DC, for Defendant-Intervenor Muench-Kreuzer Candle Company.

OPINION

POGUE, District Judge.

This matter is before the Court on the motion of Plaintiffs Candle Corporation of America and Blyth, Inc. (collectively "CCA" or "Plaintiffs") for judgment upon the agency record. Plaintiffs seek reversal of the United States Customs Service's ("Customs") denial of Plaintiffs' application for certification for receipt of payments pursuant to the Continued Dumping and Subsidy Offset Act of 2000, 19 U.S.C. § 1675c ("CDSOA" or "Byrd Amendment").¹ This Court exercises jurisdiction under 28 U.S.C. § 1581(i) (2000). We deny Plaintiffs' motion and grant judgment for the defendants.

Background

The Byrd Amendment provides for the annual distribution of the duties collected pursuant to antidumping and countervailing duty orders.² The distribution, termed a "continued dumping and subsidy offset," is available to "affected domestic producers for qualifying expenditures." 19 U.S.C. § 1675c(a). The purpose of the Byrd Amendment is to strengthen the remedial effects of the antidumping duties imposed on subject merchandise. See Pub.L. 106-387, 114 Stat. 1549, 1549A-72-73, reprinted in 19 U.S.C.A. § 1675c ("United States trade laws should be strengthened to see that the remedial purpose of those laws is achieved."); Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1380 (Fed.Cir.2003) ("Far from rendering the antidumping statute penal in nature ..., the Byrd Amendment actually enhances its remedial nature. The duties now bear less resemblance to a fine payable to the government, and look more like compensation to victims of anticompetitive behaviors.").

The term "affected domestic producer" is defined in the Byrd Amendment as

any manufacturer, producer, farmer, rancher, or worker representative (including associations of such persons) that—

(A) was a petitioner or interested party in support of the petition with respect to which an antidumping duty order, a finding under the Antidumping Act of 1921, or a countervailing duty order has been entered, and

(B) remains in operation.

19 U.S.C. § 1675c(b)(1). The statute specifies, however, that

Companies, businesses, or persons that have ceased the production of the product covered by the order or finding or who have been acquired by a company or business that is related to a company that opposed the investigation shall not be an affected domestic producer.

Id.

The Byrd Amendment requires the International Trade Commission ("ITC" or "Commission") to forward to the Commissioner of Customs "a list of petitioners and persons with respect to each [antidumping] order ... that indicate support of the petition by letter or through questionnaire response." 19 U.S.C. § 1675c(d)(1); see also 19 C.F.R. § 159.61(b).³ Subsequently, Customs must publish a notice of intention to distribute the continued dumping and subsidy offset and the ITC list of the affected domestic producers potentially eligible to receive an offset distribution. 19 U.S.C. § 1675c(d)(2). Customs also "reques[s] a certification from each potentially eligible affected domestic producer," and determines whether to grant or deny certification.⁴ 19 U.S.C. § 1675c(d)(2)-(3); 19 C.F.R. § 159.63. Additionally, Customs is charged with determining whether "successor companies" that file applications for certification are eligible to receive distributions. 19 C.F.R. § 159.61(b)(1)(i).⁵

On Sept. 3, 1985, the National Candle Association filed a petition seeking an antidumping investigation of petroleum wax candles from the People's Republic of China. Antidumping Petition, Petroleum Wax Candles from the People's Republic of China (Sept. 3, 1985), Certified Admin. Rec. ("C.A.R.") Tab 1 ("Petition"). The investigation was initiated, and, in due course, an antidumping order was issued. Antidumping Duty Order: Petroleum Wax Candles From the People's Republic of China, 51 Fed.Reg. 30,686 (Dep't Commerce Aug. 28,1986).

On December 29, 2000, the ITC transmitted to Customs "a list of petitioners and other entities that indicated public support of the petition." Letter from Stephen Koplan, U.S. International Trade Commission, to Stuart Seidel, Assistant Commissioner, U.S. Customs Service (Aug. 27, 2001), C.A.R. Tab 4 at 2. This ITC list subsequently appeared in Customs' notice of intent to distribute continued dumping and subsidy offsets, published in the Federal Register on August 3, 2001. Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, 66 Fed.Reg. 40,782, 40,784-99 (Dep't Treasury Aug. 3, 2001) (notice of intent to distribute offset); see also Letter from Douglas M. Browning, U.S. Customs Service, to Jay P. Urwitz, Hale and Dorr LLP (Jan. 18, 2002), C.A.R. Tab 6 at 2. Plaintiff Candle Corporation of America ("CCA") was not among the listed eligible firms, and on August 21, 2001, requested that it be added to the list. On August 27, 2001, in response to Plaintiffs' request, the ITC declined to add CCA to the ITC list because "the company did not indicate support of the petition in either of the questionnaires it submitted in the original investigation." Letter from Stephen Koplan, U.S. International Trade Commission, to Bonnie B. Byers, Hale and Dorr LLP (Aug. 27, 2001), CAR. Tab 4 at 1. The ITC did, however, add to its list two other U.S. candle producers, Colonial Candle of Cape Cod and Lenox Candles. Id., C.A.R. Tab 4 at 2-3. Both of these companies were acquired by CCA in asset purchase agreements. Letter from Jay P. Urwitz, Hale and Dorr LLP, to Douglas Browning, U.S. Customs Service (Oct. 2, 2001), C.A.R. Tab 5 at Asset Purchase Agreements; see also id. at Certification at 2 para. 5 ("CCA acquired Lenox Candles ('Lenox') from Lenox Corporation on June 8, 1987.... CCA acquired Colonial Candle of Cape Cod ('Colonial Candle') from General Housewares Corp. on April 19, 1990."). Plaintiffs do not challenge the August 27, 2002 ITC decision. See Joint Stipulation of the Parties at 4 para. 3 (Dec. 17, 2002) ("Jt.Stip.").

On October 2, 2001, CCA filed an application for certification "in response to the Customs Service notice in the Federal Register concerning the Distribution of Continued Dumping and Subsidy Offset," seeking "distribution of continued antidumping duties on behalf of Lenox Candle and Colonial Candle of Cape Cod." Letter from Jay P. Urwitz, Hale and Dorr LLP, to Douglas Browning, U.S. Customs Service (Oct. 2, 2001), C.A.R. Tab 5 at 1; Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, 66 Fed.Reg. at 40,782. CCA claimed that it was eligible to receive CDSOA distributions as the "successor company" to Lenox and Colonial, "as provided in Section 159.61(b)(1)(i) of the regulations." Letter from Jay P. Urwitz, Hale and Dorr LLP, to Douglas Browning, U.S. Customs Service (Oct. 2, 2001), C.A.R. Tab 5 at 1.⁶

On January 18, 2002, Customs denied CCA's certification request with regard to eligibility for distributions for fiscal year 2001. See Letter from Douglas M. Browning, U.S. Customs Service, to Jay P. Urwitz, Hale and Dorr LLP (Jan. 18, 2002), C.A.R. Tab 6. Subsequently, Customs denied CCA's requests for reconsideration with regard to fiscal years 2001 and 2002. See Letter from Douglas M. Browning, U.S. Customs Service, to Jay P. Urwitz, Hale and Dorr LLP (May 3, 2002), C.A.R. Tab 8; Letter from Michael T. Schmitz, U.S. Customs Service, to Jay P. Urwitz, Hale and Dorr LLP (Dec. 4, 2002), C.A.R. Tab 10.

Plaintiffs challenge these Customs decisions, asserting that CCA is entitled to collect CDSOA offset distributions as the successor company to Lenox and Colonial, Pls.' Mem. at 9-10, and alternatively that Lenox and Colonial are independently entitled to collect CDSOA distributions as "affected domestic producers" that "remain in operation." 19 U.S.C. § 1675c(a)(b); Pis.' Reply Mem. Supp. Mot. J. Agency R. at 4-5 ("Pis.' Reply").

Standard of Review

In cases arising under 28 U.S.C. § 1581(i), "the Court of International Trade shall review the matter as provided in section 706 of title 5." 28 U.S.C. § 2640(e). Title 5 U.S.C. § 706 provides that this Court shall, inter alia, "hold unlawful and set aside agency action, findings, and conclusions found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (2000).

"The scope of review under the `arbitrary and capricious' standard is narrow." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1...