Coalition v. United States

Decision Date20 August 2015
Docket NumberSlip Op. 15 - 92,Court No. 13-00168
CourtU.S. Court of International Trade

Before: R. Kenton Musgrave, Senior Judge


[Denying motion to dismiss, granting motion for preliminary injunction, and granting motion for voluntary remand of determination in section 129 proceeding to partially revoke antidumping duty order on diamond sawblades and parts thereof from the People's Republic of China.]

Daniel B. Pickard and Maureen E. Thorson, Wiley Rein LLP, of Washington, DC, for the plaintiff.

Alexander V. Sverdlov, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel on the brief was Aman Kakar, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Jeffrey S. Neeley and Michael S. Holton, Husch Blackwell, LLP, of Washington, DC, for the intervenor-defendants.

Musgrave, Senior Judge: The plaintiff, Diamond Sawblades Manufacturers' Coalition ("DSMC"), brought this suit to challenge a determination of the International Trade Administration, U.S. Department of Commerce ("Commerce") made pursuant to section 129 of the Uruguay Round Agreements Act, Pub. L. No. 103-465, §129, 1087 Stat. 4809, 4836-39 (1994) (section 129), 19 U.S.C. § 3538, in connection with the antidumping investigation of diamond sawblades from the People's Republic of China ("PRC"). See Certain Frozen Warmwater Shrimp from the PRC and Diamond Sawblades and Parts Thereof From the PRC (notice of section 129 implementation and partial revocation), 78 Fed. Reg. 18958 (Mar. 28, 2013) ("Implemented PRC Section 129 Determination"). That determination resulted in revocation of the antidumping duty order on subject merchandise with respect to the "ATM entity."1

Now before the court are a motion for voluntary remand filed by Commerce, a motion to dismiss filed by ATM, and a motion for "preliminary" (pendente lite) injunction filed by the DSMC. For the following reasons, the motion to dismiss will be denied and the motions for preliminary injunction and remand granted.

I. Background

The history of the diamond sawblades from the PRC antidumping investigation is presumably familiar. Briefly, in 2006 Commerce determined that certain PRC producers of diamondsawblades, including the collapsed ATM entity, were dumping their products, while the International Trade Commission ("ITC") determined that there was no injury, either material or threat thereof. See Diamond Sawblades and Parts Thereof from the PRC, 71 Fed. Reg. 29303 (May 22, 2006) (final determination), as amended, 71 Fed. Reg. 35864 (June 22, 2006) (amended final determination) ("LTFV Final Result"). After numerous court proceedings, the ITC reversed its position, determining there to be threatened material injury, and Commerce published the antidumping duty order in 2009. Diamond Sawblades and Parts Thereof from the PRC and the Republic of Korea, 74 Fed. Reg. 57145 (Nov. 4, 2009) ("Order").

Among its other findings during its investigation, Commerce concluded that the collapsed ATM entity had demonstrated independence from government control, and therefore was entitled to receive its own calculated rate. DSMC and certain respondents challenged the LTFV Final Result; among other aspects, DSMC contested the ATM entity's entitlement to a separate rate. Advanced Technology & Materials Co. v. United States, 37 CIT ___, 938 F. Supp. 2d 1342 (2013). After two remands, Commerce determined that the ATM entity had not, in fact, satisfied the requirement for a separate rate because it had failed to rebut the presumption of state control. Id. at 1345. Commerce therefore assigned the ATM entity the country-wide margin of 164.09 percent. Id. The appeals affirmed this determination. 37 CIT at ___, 938 F. Supp. 2d at 1353, aff'd, 541 Fed. Appx. 1002 (Fed. Cir. 2013).

While these challenges were being litigated in these courts, the PRC government challenged a different aspect of Commerce's diamond sawblades investigation before a certain foreign trade organization ("WTO"), namely, Commerce's use of its long-standing "zeroing"methodology to calculate the final antidumping duty rates. In June 2012, a WTO panel ruled that the use of zeroing in calculating certain dumping margins was not consistent with the United States' obligations under the Antidumping Agreement, and the WTO Dispute Settlement Body subsequently adopted the panel report. See WTO Panel Report, United States -- Anti-Dumping Measures on Certain Shrimp and Diamond Sawblades from [the People's Republic of] China, WT/DS422/R (June 8, 2012).

After receipt of a letter from the USTR with respect thereto dated September 2, 2012, see Def-Int's Appx. to Opp. to Mot. for Prelim. Inj. at Tab 2, ECF No. 71 (July 17, 2015), Commerce initiated proceedings pursuant to the requirements of section 129 to bring the United States into compliance with the WTO decision on the diamond sawblades and parts thereof from the PRC investigation. See 19 U.S.C. § 3538(b). After releasing a preliminary determination and considering the parties' comments, Commerce issued a final section 129 determination on March 4, 2013. As part of that determination, Commerce continued to assign the ATM entity a separate rate (just as it had prior to the litigation in the investigation), and recalculated that rate without using zeroing. Recalculation resulted in a de minimis or zero margin. See Final Results of the Proceeding under Section 129 of the Uruguay Round Agreements Act: Antidumping Measures on Diamond Sawblades and Parts Thereof from the PRC (Mar. 4, 2013) ("PRC Section 129 Final"), PDoc 23.

On March 22, 2013, the USTR instructed Commerce to implement the PRC Section 129 Final. See Implemented PRC Section 129 Determination.

The genesis of the specific lawsuit before this court can be traced back to earlier parallel proceedings that involved the antidumping duty order on diamond sawblades and partsthereof from the Republic of Korea ("Korea"). Similar to the WTO action brought by the PRC government for the benefit of the ATM entity, as a result of a successful WTO action brought by the Korean government and subsequent instruction from the United States Trade Representative to Commerce to "implement" the adverse WTO decision pursuant to section 129, Commerce announced that it would revoke the Korean antidumping duty order due to the de minimis margins recalculated without zeroing. Because of the impact revocation would have on the DSMC's then-ongoing litigation over the investigation of subject merchandise from Korea (and the margins determined thereat), the DSMC sought to enjoin that revocation, but did not successfully persuade that such enjoinder was appropriate, although the DSMC did obtain enjoinder of liquidation of entries of that subject merchandise. See Diamond Sawblades Manufacturers Coalition v. United States, 35 CIT ___, Slip Op. 11-137 (Nov. 2, 1011) (denying enjoinder of revocation of antidumping duty order on diamond sawblades and parts thereof from the Republic of Korea on ground that enjoinder would inappropriately interfere with agency's lawful conduct of its duties).

Thus, in light of publication of the Implemented PRC Section 129 Determination, on May 24, 2013, DSMC filed its complaint to challenge that determination. See Compl. at 1 (May 24, 2013), ECF No. 9. In paragraph 14 of its complaint, DSMC challenged Commerce's calculation of ATM's margin in the section 129 determination due to Commerce's final determination in the investigation that ATM was eligible for a separate rate. Id. at 5-6. After issuance on October 11, 2013 of this court's decision sustaining Commerce's redetermination of the ATM entity as ineligible for a separate rate, the DSMC filed its motion for judgment and supporting brief on December 16, 2013, framing the sole issue as whether the partial revocation "was in accordance with law and/orsupported by substantial record evidence where the revocation was premised on a separate rate determination that is void as a matter of law" DSMC Rule 56.2 Br. at 1. The motion was predicated on the argument that the litigation of the 09-00511 case had effectively replaced Commerce's revocation decision as a matter of law, and that the matter should be immediately remanded for reconsideration.

Subsequently, over the DSMC's objection, this matter was stayed pending a final decision on the appeal of the 09-00511 case, and on October 24, 2014, the Court of Appeals for the Federal Circuit issued its decision sustaining the administrative redetermination of the ATM entity's ineligibility for separate rate status. Advanced Technology &Materials Co. v. United States, 581 Fed. Appx. 900 (Fed. Cir. 2014).

Because that decision affected the DSMC's challenge to an issue here that is separate from the adverse WTO decision, the implementation of the USTR's instructions with respect thereto, and the partial revocation that occurred in consequence, Commerce, in the matter at bar, filed on April 17, 2015 a motion for voluntary remand pursuant to USCIT Rule 7(b) to re-evaluate its separate rate determination and reconsider its section 129 determination to revoke the antidumping duty order with respect to the ATM entity in light of the appellate decision. ECF No. 50.

By way of response, on May 1, 2015, ATM filed a motion to dismiss for lack of subject matter jurisdiction or for failure to state a claim upon which relief may be granted, arguing that the complaint fails to allege that Commerce acted contrary to law or without a basis of substantial evidence on the record with...

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