Consolidated Fibers, Inc. v. U.S.

• Decision Date: 30 November 2006
• Docket Number: Court No. 06-00134.,Slip Op 06-175.
• Citation: 465 F.Supp.2d 1338
• Parties: CONSOLIDATED FIBERS, INC., Stein Fibers, Ltd., Bernet International Trading, LLC, and BMT Commodity Corporation, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

465 F.Supp.2d 1338

CONSOLIDATED FIBERS, INC., Stein Fibers, Ltd., Bernet International Trading, LLC, and BMT Commodity Corporation, Plaintiffs, v. UNITED STATES, Defendant.

Slip Op 06-175.

Court No. 06-00134.

United States Court of International Trade.

November 30, 2006.

deKieffer & Horgan, Washington, DC (Gregory S. Menegaz, Merritt R. Blakeslee, J. Kevin Horgan) for the Plaintiffs Consolidated Fibers, Inc., Stein Fibers, Ltd., Bernet International Trading, LLC, and BMT Commodity Corporation.

James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel for

Litigation, Karl von Schriltz, Attorney-Advisor, United States International Trade Commission, for the Defendant.

Kelly Drye Collier Shannon, Washington, DC (Paul C. Rosenthal, Kathleen W. Cannon, David C. Smith, Jr.) for the Defendant-Intervenors Dak Fibers, LLC, Invista S.a.r.l., and Wellman, Inc.

OPINION AND ORDER

GORDON, Judge.

Defendant and Defendant-Intervenors move to dismiss count two of Plaintiffs' complaint for lack of subject matter jurisdiction pursuant to USCIT R. 12(b)(1), and for failure to state a claim upon which relief can be granted pursuant to USCIT R. 12(b)(5). For the reasons set forth below, the motions are denied.

I. Background

During the five-year ("sunset") reviews of the antidumping duty orders on polyester staple fiber ("PSF") from Korea and Taiwan, Plaintiffs requested that the United States International Trade Commission ("Commission") institute a proceeding to reconsider the original PSF injury determinations because of new evidence that certain domestic producers conspired to fix PSF prices and allocate customers during the original period of investigation and part of the review period. Letter dated Oct. 26, 2005 from deKieffer & Horgan to Secretary Abbott at 2-3, 18-22, ("Reconsideration Request"), Certain Polyester Staple Fiber from Korea and Taiwan, Inv. Nos. 731-TA-825-826. Plaintiffs argued that this conspiracy had compromised the integrity of the Commission's original investigations and that the Commission should therefore institute a reconsideration proceeding and revoke the antidumping duty orders ab initio. Id.

Plaintiffs believed there were "striking and highly relevant parallels" between the alleged PSF antitrust conspiracy and the Commission's reconsideration proceeding in Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, Inv. Nos. 303-TA-23, 731-TA-566-570 and 731-TA-641 (reconsideration), USITC Pub. 3218 (Aug.1999) ("Ferrosilicon"). Reconsideration Request at 3. In Ferrosilicon, the Commission reconsidered original injury determinations underlying a countervailing duty order covering ferrosilicon from Venezuela, and antidumping duty orders covering ferrosilicon from Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela. Ferrosilicon began with a petition pursuant to Section 751(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675(b) (2000).¹ The Brazilian ferrosilicon importers requested a changed circumstances review of the Commission's material injury determination on Brazilian ferrosilicon because of new evidence of a price-fixing conspiracy among domestic producers. The Commission instituted the requested changed circumstances review and self-initiated changed circumstances reviews of the related material injury determinations for ferrosilicon from China, Kazakhstan, Russia, Ukraine, and Venezuela. Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, 63 Fed.Reg. 40,314 (Int'l Trade Comm'n July 28, 1998) (notice of changed circumstances reviews).

The Commission subsequently suspended these changed circumstances reviews, determining that "reconsideration" was a more appropriate procedure for review of the original determinations than a changed circumstances review. Ferrosilicon From Brazil, China, Kazakhstan, Russia Ukraine, and Venezuela, 64 Fed.Reg. 28,212 (Int'l Trade Comm'n May 25, 1999) (notice of suspension of changed circumstances review and commencement of reconsideration proceeding). Thereafter, the Commission reversed its original affirmative material injury determinations ab initio and issued a negative injury determination for each of the original investigations. Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, 64 Fed.Reg. 47,865, 47,865-66 (Int'l Trade Comm'n Sept. 1, 1999); USITC Pub. 3218 at 1. The Commission concluded on reconsideration that the domestic industry had never been materially injured, or threatened with material injury by reason of the ferrosilicon imports. USITC Pub. 3218 at 4.

In accordance with the Commission's action, Commerce "rescinded" the antidumping and countervailing duty orders covering the subject imports, explaining that the Commission's negative injury determinations on reconsideration had "rendered [the orders] legally invalid from the date of issuance." Ferrosilicon From Brazil, Kazakhstan, People's Republic of China, Russia, Ukraine, and Venezuela, 64 Fed. Reg. 51,097, 51,098 (Dep't of Commerce Sept. 21, 1999) (notice of rescission of antidumping duty orders).

Despite some apparent parallels of the antitrust activity among the domestic producers of ferrosilicon and the antitrust activity among the domestic producers of PSF, the Commission preliminarily denied Plaintiffs' reconsideration request. Plaintiffs, however, continued to argue in the on-going sunset reviews that the alleged price-fixing and customer allocation conspiracy had compromised the integrity of the Commission's original PSF investigation and injury determinations. Certain Polyester Staple Fiber from Korea and Taiwan, Inv. Nos. 731-TA-825-826 (Review), USITC Pub. 3843 at 16-22 (Mar. 2006). In response, petitioners—Defendant-Intervenors here—argued that Plaintiffs' price-fixing allegations related only to a PSF product known as "fine denier" PSF, which is not subject to the antidumping orders on PSF from Korea and Taiwan. Id. at 17-18.

The Commission conducted a public hearing on January 17, 2006, in which interested parties provided testimony and answered Commission questions on the alleged antitrust conspiracy. On March 20, 2006, the Commission issued its final decision on Plaintiffs' reconsideration request (together with its final views in the sunset review of PSF from Korea and Taiwan), explaining that a reconsideration proceeding was not warranted. Id. at 16-23.

Count two of Plaintiffs' complaint challenges the Commission's decision not to revoke the original injury determinations ab initio, and by extension, the denial of Plaintiffs' reconsideration request. Defendant and Defendant-Intervenors move to dismiss count two of Plaintiffs' complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted.

II. Standard of Review

In deciding a USCIT R. 12(b)(1) motion that does not challenge the factual basis for the complainant's allegations, and when deciding a USCIT R. 12(b)(5) motion to dismiss for failure to state a claim upon which relief can be granted, the court assumes all factual allegations to be true and draws all reasonable inferences in plaintiffs favor. Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583-84 & n. 13 (Fed.Cir.1993); Henke v. United States, 60 F.3d 795, 797 (Fed.Cir.1995) (subject matter jurisdiction); Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed.Cir.1991) (failure to state a claim).

III. Discussion

A. Subject Matter Jurisdiction

Plaintiffs assert jurisdiction for count two of their complaint under 28 U.S.C. § 1581(c) (2000) or 28 U.S.C. § 1581(i) (2000).

1. 28 U.S.C. § 1581(c)

Section 1581(c) provides the Court of International Trade with jurisdiction to review certain Commission antidumping determinations listed in 19 U.S.C. § 1516a(a). Plaintiffs contend that the Commission's denial of their reconsideration request "is subsumed within, and inseparable from" the Commission's final PSF sunset determination, which is one such reviewable determination pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii). (Pls.' Opp'n to Mot. to Dismiss at 6.) Although the Commission must take into account "its prior injury determinations" when conducting a sunset review, 19 U.S.C. § 1675a(a)(1)(A), that undertaking is not equivalent to a fullblown reconsideration of the underlying injury determination.

While it made sense for the Commission to consolidate Plaintiffs' reconsideration request with the ongoing sunset review for administrative efficiency, Plaintiffs are not correct that the final sunset determination and the final denial of Plaintiffs' reconsideration request are one in the same for purposes of judicial review. They are not. Different standards of review apply to each. The Commission's final sunset determination is reviewed under the substantial evidence standard. 19 U.S.C. § 1516a(b)(1)(B)(i). The Commission's denial of Plaintiffs' reconsideration request, if reviewable at all, is reviewed under the more deferential abuse of discretion standard. 28 U.S.C. § 2640(e) (2000); 5 U.S.C. § 706(2)(A) (2000); ICC v. Bhd. of Locomotive Eng'rs, 482 U.S. 270, 278, 107 S.Ct. 2360, 96 L.Ed.2d 222 (1987) ("the basis for challenge must be that the refusal to reopen was `arbitrary, capricious, [or] an abuse of discretion.' 5 U.S.C. § 706(2)(A)."). Accordingly, the court's jurisdictional basis for review of the Commission's final sunset determination pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(iii) does not extend to review of the Commission's denial of Plaintiffs' reconsideration request.

Plaintiffs alternatively contend that the Commission's denial of their reconsideration request falls within the scope of section 1516a(a)(2)(B)(i), which identifies other reviewable Commission determinations, specifically "[f]inal affirmative determinations by ... the Commission under section... 1673d of this title, including any negative part of such a determination...." The Commission's denial of Pla...