Diamond Sawblades Mfrs. Coal. v. United States

• Decision Date: 29 March 2012
• Docket Number: Consol. Court No. 06-00248
• Parties: DIAMOND SAWBLADES MANUFACTURERS COALITION, Plaintiff, v. UNITED STATES, Defendant, and EHWA DIAMOND INDUSTRIAL CO., LTD., SH TRADING INC., and SHINHAN DIAMOND INDUSTRIAL CO. LTD., Defendant-Intervenors.
• Court: U.S. Court of International Trade

DIAMOND SAWBLADES MANUFACTURERS COALITION, Plaintiff, v. UNITED STATES, Defendant, and EHWA DIAMOND INDUSTRIAL CO., LTD., SH TRADING INC., and SHINHAN DIAMOND INDUSTRIAL CO. LTD., Defendant-Intervenors.

Consol. Court No. 06-00248

UNITED STATES COURT OF INTERNATIONAL TRADE

Dated: March 29, 2012

Before: R. Kenton Musgrave, Senior Judge

OPINION AND ORDER

[Motion to amend preliminary injunction denied, motion to amend complaint granted.]

Daniel B. Pickard and Maureen E. Thorson, Wiley, Rein & Fielding, LLP, of Washington, D.C., for plaintiff Diamond Sawblades Manufacturers Coalition.

Eric Emerson and Laura R. Ardito, Steptoe and Johnson, LLP, of Washington, D.C., for consolidated plaintiff Hyosung D&P Co., Ltd.

Delisa M. Sanchez, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With her on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel on the brief was Hardeep K. Josan, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, D.C.Bruce M. Mitchell, Andrew B. Schroth, Mark E. Pardo, Ned H. Marshak, and Andrew T. Shultz, Grunfeld, Desiderio, Lebowitz, Silverman & Kledstadt, LLP, of Washington, D.C., for defendant-intervenor Ehwa Diamond Industrial Co., Ltd.

Michael P. House and Mary Rose Hughes, Perkins Coie, LLP, of Washington, D.C., for defendant-intervenors SH Trading Inc. and Shinhan Diamond Industrial Co. Ltd.

Musgrave, Senior Judge: Presuming familiarity with slip opinion 11-137 (Nov. 2, 1011), which granted the motion of Diamond Sawblades Manufacturers Coalition ("DSMC") for preliminary injunction against liquidation of entries of merchandise subject to the final administrative determination of sales at less than fair value ("LTFV") Diamond Sawblades and Parts Thereof from the Republic of Korea, 71 Fed. Reg. 29310 (Dep't Comm. May 22, 2006), the court now considers a motion filed by the defendant to amend the injunction against liquidation of subject merchandise in order to permit liquidation of subject merchandise entered on or after the effective date of a certain notice revoking the antidumping duty order ("Revocation Notice"),¹ see Section 129 of the Uruguay Round Agreements Act ("section 129"), 19 U.S.C. § 3538, which implicates the relief DSMC seeks in its underlying challenge to the LTFV final results. DSMC has also interposed a motion to permit amendment of its complaint. For the following reasons, modification of the injunction will be disallowed but amendment of DSMC's complaint allowed.

I

This court has inherent power and the discretion to modify the injunction in the event of changed circumstances. See Aimcor v. United States, 23 CIT 932, 939, 83 F. Supp. 2d 1293,1299 (1999). A party may move for modification pursuant to USCIT Rules 7(b) and 65(b)(4), but a movant "for dissolution must make a very compelling demonstration, both of changed circumstances and resulting inequities for the moving party, to justify dissolution of the injunction prior to a final decision on the merits of the action." Id. An opponent does not bear a burden of reproving the case for an injunction's continuance. See, e.g., Ad Hoc Shrimp Trade Action Committee v. United States, 32 CIT 666, 669, 562 F. Supp. 2d 1383, 1387 (2008); SKF USA Inc. v. United States, 28 CIT 170, 182, 316 F. Supp. 2d 1322, 1334 (2004).

The defendant contends amendment of the injunction is necessary because the U.S. Department of Commerce, International Trade Administration ("Commerce" or "the Department") "has not been able to fully implement the section 129 determination" until the injunction is lifted, and the "Court does not possess jurisdiction over entries subject to the section 129 determination and has no basis upon which to maintain the current injunction with respect to those entries." Def's Mot. at 2, 7-8.

DSMC originally sought enjoinder of revocation of the antidumping duty order in addition to enjoinder of liquidation, arguing that Commerce could not revoke without the Court's permission because jurisdiction over the LTFV determination had vested here. In any event,² as the defendant here impresses, revocation is denied its full effect for so long as liquidation continues to be enjoined. Unresolved in the earlier opinions was how revocation should be challenged, in the event it occurred as a consequence of instruction from the USTR interpreted as requiring immediaterevocation of the antidumping duty order with respect to all unliquidated entries entered on or after the date the USTR so instructs. Cf. 19 U.S.C. § 3538(c)(1)(B) with Slip Op. 11-137 at 13.³

Now, due to the present injunction against liquidation, DSMC takes the position that it was not required to challenge revocation in order to preserve its right to appeal the underlying LTFV determination. DSMC argues that the court continues to have jurisdiction over those entries and that the motion to amend the injunction should be rejected for the same reasons articulated in slip opinion 11-137 for rejecting opposition to its issuance (i.e., the injunction) in the first place. Opp. to Def's Mot. to Amend Prelim. Inj. at 3. More precisely, DSMC argues that ultimate success on this matter (its challenge to the LTFV determination) resulting in above-de-minimis dumping rates and reinstatement of the antidumping duty order is a challenge to Commerce's revocation decision "in some fashion" as contemplated by slip opinion 11-137.

With the benefit of time, and upon further reflection, the court is persuaded that the Revocation Notice does not, in fact, delineate or delimit the Court's jurisdiction over the entriessubject to DSMC's challenge to the LTFV determination. Commerce is required to "implement" its section 129 determination if instructed to do so by the USTR, and an unchallenged zero-percent margin determined pursuant thereto would certainly seem to remove the antidumping duty order's legal underpinning and imply that revocation of the antidumping duty order is the necessary consequence. Cf. 19 U.S.C. § 3538(c)(1)(A). But, nowhere in the statute is it decreed that immediate liquidation is the consequence of such implementation, only that unliquidated entries entered on or after the effective date of the section 129 determination get the benefit thereof. See 19 U.S.C. § 3538(c)(1)(B).

DSMC has foregone challenging revocation. It maintains, however, a right to reinstatement that is dependent upon success in this LTFV challenge. Such a right is independent of whatever challenge DSMC could have brought against "implementation" of the section 129 determination that has resulted in revocation, a determination with which DSMC contends it has no legal complaint. See Globe Metallurgical, supra, 31 CIT at 1728, 530 F. Supp. 2d at 1349 (plaintiff not required to challenge revocation separately in order to maintain right to reinstatement of unfair trade order). By contrast, the defendant's motion essentially asks the court to undertake an act that could moot most of the relief sought in this case. Its papers do not persuade that such a result is required, or that either it or the other parties will be prejudiced by continuation of the injunction until the matter is concluded. Given the posture of the litigation at this point, the Revocation Notice is interlocutory. Which matter is left standing remains to be seen.

II

DSMC's motion to amend its complaint reasons that amendment serves the interests of justice due to the "unusual" circumstances occasioned by the section 129 determination, that had the antidumping duty margin been de minimis from the outset it would "likely" have challenged additional issues. DSMC Mot. at 4. DSMC also calls attention to the fact that the court granted a previous motion to amend its complaint after Commerce amended the final LTFV margin results to correct for ministerial errors. Id.

The court will not speculate on likelihood, but it will reflect on the fact that the margins were not de minimis when the litigation was filed and on the fact that the litigation's status quo is now with respect to de minimis estimated dumping margins, below the level needed to support the antidumping duty order.⁴

USCIT Rule 15(a)(2), which is identical to Rule 15(a)(2) of the Federal Rules of Civil Procedure, directs that leave to amend a complaint should be "freely" given "when justice so requires," which implies the absence of a valid reason for denial such as futility and undue prejudice. See Foman v. Davis, 371 U.S. 178, 182 (1962); Intrepid v. Pollock, 907 F.2d 1125, 1128-29 (Fed. Cir. 1990).

In opposition to DSMC's motion, the defendant argues amendment would be futile. That is, if DSMC "wished to extend any relief it may obtain with respect to the LTFV determinationinto the legally distinct section 129 determination," DSMC was required to challenge the section 129 determination but failed to do so. The defendant also contends DSMC fails to provide any "factual" support for the contention that prevailing on its amended claims would result in non-de-minimis margins even in the absence of zeroing. Def's Opp. to DSMC's Mot. at 4-5, referencing DSMC Mot. at n.1.

The court does not consider the proposed amendments in isolation but in relation to the entire complaint. Any factual support necessary therefor would be in the administrative record. The real question on futility is best measured on the basis of whether the proposed amendments would survive a motion to dismiss or for summary judgment. See, e.g., FYH Bearing Units USA, Inc. v. United States, 35 CIT _, 753 F. Supp. 2d 1348 (2011). Facially, none of the proposed pleadings appears to be deficient for the purpose of such motions.⁵

The consolidated plaintiff Hyosung D&P Co., Ltd. ("Hyosung"), and the defendant-intervenors SH Trading Inc. and Shinhan Diamond Industrial Co., Ltd. ("Shinhan"), and Ehwa Diamond...