Cementos Guadalajara, SA v. US

• Decision Date: 27 April 1988
• Docket Number: Court No. 86-12-01525.
• Citation: 686 F. Supp. 335
• Parties: CEMENTOS GUADALAJARA, S.A., Cementos Portland Nacional, S.A., and Cementos Veracruz, S.A., Plaintiffs, Cementos Anahuac Del Golfo, S.A., Plaintiff-Intervenor, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

686 F. Supp. 335

CEMENTOS GUADALAJARA, S.A., Cementos Portland Nacional, S.A., and Cementos Veracruz, S.A., Plaintiffs, Cementos Anahuac Del Golfo, S.A., Plaintiff-Intervenor, v. UNITED STATES, Defendant.

Court No. 86-12-01525.

United States Court of International Trade.

April 27, 1988.

Ross & Hardies, (Joseph S. Kaplan, Chicago, Ill., on the motion); and O'Connor & Hannan, (David P. Darnell, Washington, D.C., of counsel on the motion) for plaintiffs.

Rogers & Wells (Eugene T. Rossides and Robert E. Ruggeri, Washington, D.C., on the motion) for plaintiff-intervenor.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Washington, D.C., (Velta A. Melnbrencis, Asst. Director, New York City, on the motion); and Douglas A. Riggs, Gen. Counsel, M. Jean Anderson, Chief Counsel for International Trade Office of the Deputy Chief Counsel for Import Admin., U.S. Dept. of Commerce (Craig L. Jackson, Washington, D.C., of counsel on the motion) for defendant.

Stewart and Stewart, (Eugene L. Stewart, Terence P. Stewart, D. Scott Nance, and William A. Fennell, Washington, D.C., on the amici brief); Cabot Corp., (William L. May, Jr., Boston, Mass., of counsel on the brief); and PPG Industries, Inc. (Glenn Miller, Pittsburgh, Pa., of counsel on the brief) supporting defendant as amici curiae.

MEMORANDUM OPINION AND ORDER

CARMAN, Judge:

Plaintiffs Cementos Guadalajara, S.A., Cementos Portland Nacional, S.A., and Cementos Veracruz (plaintiffs) commence this action pursuant to section 516A of the Tariff Act of 1930 (the Act) as amended 19 U.S.C. § 1516a and 28 U.S.C. § 1581(c) (1986). The plaintiffs contest the Department of Commerce, International Trade Administration's (ITA) administrative review of its countervailing duty investigation pursuant to section 751 of the Act, as amended, 19 U.S.C. § 1675 (1986), (751 review), of cement and cement clinker from Mexico. Portland Hydraulic Cement and Cement Clinker From Mexico; Final Results of Countervailing Duty Administrative Review, 51 Fed.Reg. 44500 (1986). The review under appeal covered entries made from January 1, 1984 through December 31, 1984 and was the second administrative 751 review of the countervailing duty order.¹

Plaintiffs brought the action to challenge the authority of the ITA to conduct a 751 review of the countervailing duty order (CVD order) on portland hydraulic cement and cement clinker (PHC) and to issue the results thereof. Plaintiffs' action also contests the authority of the ITA to conduct future 751 reviews based upon the order and to continue to direct the U.S. Customs Service (Customs) to collect estimated duty deposits on future entries. Plaintiffs' challenges rest on the issue whether or not the accession of Mexico to the GATT agreement should have effect on entries of the subject merchandise imported from Mexico into the U.S. at a date prior to Mexico's accession. Plaintiffs believe there is an effect, and its result should end in applying an injury determination requirement retroactively to goods entered before the accession date. Cementos Anahuac del Golfo, S.A. (plaintiff-intervenor), supports these assertions.

Plaintiffs now move for summary judgment, pursuant to Rule 56 of the rules of this Court, requesting the Court to: (1) direct the ITA to revoke the order; (2) direct the ITA to order Customs to refund all estimated duty deposits paid upon entries of the subject merchandise; and (3) direct Customs to stop collecting the estimated countervailing duty deposits on the entries of PHC.

Defendant Government urges the Court to deny plaintiffs' motion, enter judgment in favor of the defendant, and sustain the final results of the second 751 review of the CVD order on cement and cement clinker from Mexico. Amici curiae support defendant's position. Upon review of the material facts as to which there is no genuine issue, the Court denies plaintiffs' motion and enters judgment for defendant.

FACTS

The following facts appear not to be in dispute. On March 8, 1983, the United States Department of Commerce (Commerce) received a petition filed on behalf of the United States producers of PHC. The petition alleged manufacturers, producers, or exporters of PHC in Mexico received, directly or indirectly, bounties or grants within the meaning of section 303 of the Act, as amended, 19 U.S.C. § 1303. On the basis of the petition, the ITA initiated a countervailing duty investigation, on March 28, 1983, to determine if Mexican PHC manufacturers, producers, or exporters received benefits that constituted bounties or grants. Initiation of Countervailing Duty Investigation; Portland Hydraulic Cement and Cement Clinker From Mexico, 48 Fed.Reg. 14019 (1983).

At the time of the investigation Mexico was not a "country under the Agreement" within the meaning of section 701(b) of the Act, as amended, 19 U.S.C. § 1671 (1982), and therefore the ITA applied section 303 of the Act, as amended, 19 U.S.C. § 1303. Section 1303(a)(2) provides for the imposition of duties on nondutiable goods from a country which has no international obligation with the United States requiring an injury determination, by the U.S. International Trade Commission (ITC), for the merchandise. Therefore, under § 1303, the domestic industry was not required to allege, and the ITC was not required to determine, whether or not the importation of the Mexican merchandise caused or threatened to cause material injury to a United States industry.

The ITA determined the investigation was "extraordinarily complicated" and published, on May 19, 1983, its statement, pursuant to section 703(c)(1)(B)(i), of the Act, as amended, 19 U.S.C. § 1671b(c)(1)(B)(i) (1982), declaring the case extraordinarily complicated and requiring additional time necessary to make a preliminary determination. Portland Hydraulic Cement and Cement Clinker From Mexico; Postponement of Preliminary Countervailing Duty Determination, 48 Fed.Reg. 22606 (1983).

On July 1, 1983 the ITA completed and issued its preliminary determination that benefits constituting bounties or grants were being provided to Mexican cement businesses. Preliminary Affirmative Countervailing Duty Determination; Portland Hydraulic Cement and Cement Clinker From Mexico, 48 Fed.Reg. 31437 (1983). The scope of the investigation covered PHC merchandise which was currently imported under items 511.1420 and 511.1440 of the Tariff Schedules of the United States Annotated (TSUSA). The ITA preliminarily determined the estimated net subsidy provided by Mexico to the Mexican cement producers to be 5.69 percent ad valorem. Id. The ITA then directed Customs to "suspend liquidation of all entries of the products subject to this determination which are entered, or withdrawn from warehouse, for consumption, or to require a cash deposit or bond on these products in the amount equal to the estimated net subsidy." Id. at 31437.

The only known producers and exporters of the subject merchandise in Mexico, exported to the United States, were the following businesses: Cementos Guadalajara, S.A., (plaintiff), Cementos Anahuac del Golfo, S.A., (plaintiff-intervenor), Cementos de Chihuahua, S.A., Cementos Mexicanos, S.A., and Cooperativa Cementos Hidalgo, S.C.L. Final Affirmative Countervailing Duty Determination and Countervailing Duty Order; Portland Hydraulic Cement and Cement Clinker From Mexico, 48 Fed.Reg. 43063 (1983).

On September 21, 1983, the ITA published its final results of the investigation on the cement merchandise from Mexico. Id. Based upon its investigation, the ITA determined certain benefits constituting bounties or grants, pursuant to 19 U.S.C. § 1303, were being provided to the Mexican producers and exporters of the subject merchandise. The period of time used by the ITA, for measurement of the bounties or grants under investigation, was January 1 to December 31, 1982. Id. at 43064. The ITA continued to hold, in effect, the suspension of the liquidation ordered in the preliminary determination until further notice. Id. at 43070. The net bounties or grants for duty deposit purposes was established for each firm as follows: (1) Cementos Guadalajara, S.A., 5.13%; (2) Cementos Anahuac del Golfo, S.A., 1.64%; (3) Cementos de Chihuahua, S.A., 17.12%; (4) Cementos Mexicanos, S.A., 6.78%; (5) Cooperative Cementos Hidalgo, S.C.L., 0% and; (6) all other manufacturers, producers, or exporters, 6.05%. Id.

The ITA also continued to direct Customs to require cash deposits "in the amounts indicated above for each entry of the subject merchandise entered or withdrawn from warehouse, for consumption, on or after the date of the publication of the notice in the Federal Register, and to assess countervailing duties in accordance with sections 706(a)(1) 19 U.S.C. § 1671e(a)(1) and 751 19 U.S.C. § 1675 of the Act. Id. The ITA also stated its intention "to conduct an administrative review within 12 months of the publication of this determination...." Id.

It should be noted the ITA, in its final affirmative determination, repeated essentially the same statement made in its preliminary determination concerning Mexico's GATT status. This statement was published as follows:

Mexico is not a "country under the Agreement" within the meaning of section 701(b) of the Act and, therefore, section 303 of the Act applies to this investigation. The merchandise being investigated is nondutiable, but there are no "international obligations" within the meaning of section 303(a)(2) of the Act which require an injury determination for nondutiable merchandise from Mexico. Therefore, under this section the domestic industry is not required to allege that, and the U.S. International Trade Commission is not required to determine whether, imports of this product cause or threaten material injury to a U.S. industry.

48 Fed.Reg. at 43064.

On April 30, 1985, the Office of the United States Trade Representative published...