Gilda Industries, Inc. v. U.S.

• Decision Date: 14 May 2008
• Docket Number: Slip Op. 08-51. Court No. 07-00474.
• Parties: GILDA INDUSTRIES, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

556 F.Supp.2d 1366

GILDA INDUSTRIES, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 08-51. Court No. 07-00474.

United States Court of International Trade.

May 14, 2008.

Peter S. Herrick, for Plaintiff Gilda Industries, Inc.

George G. Katsas Acting Assistant Attorney General, Jeanne E. Davidson Director, Patricia M. McCarthy Assistant Director, (David S. Silverbrand) Commercial Litigation Branch, Civil Division, U.S. Department of Justice; Office of General Counsel, Executive Office of the President, Office of the United States Trade Representative (William Busis) of counsel, for Defendant United States.

OPINION AND ORDER

MUSGRAVE, Senior Judge.

Plaintiff Gilda Industries, Inc. ("Gilda"), is an importer of toasted breads from Spain. On December 17, 2007, Gilda filed with the Court a complaint for damages for the 100% duties that U.S. Customs and Border Protection ("Customs") has collected on Gilda's imports of toasted breads since July 29, 2007. Gilda alleges that Customs has no legal authority to collect the 100% duties because pursuant to 19 U.S.C. § 2417(c) the "retaliation list" established by the United States Trade Representative ("USTR") for the imposition of the 100% duties on certain imports from the European Community ("EC") expired by operation of law on July 29, 2007. Compl. at 2. Gilda requests that the court (1) make a finding that Customs has had no legal authority to collect the duties since July 29, 2007; (2) award to Gilda a refund, with interest, of all duties collected pursuant to the retaliation list since that date; and (3) "issue an order to prevent Customs from collecting 100% duties from Gilda on its toasted breads imported from Spain since on or about July 29, 2007." Compl. at 3. Also before the Court is Gilda's motion for class certification, wherein Gilda contends that there are 212 other importers affected by the HTSUS 9903.02 retaliation list, and that all of these importers should be certified as a class. Mot. for Class Certification at 3.

The government filed a motion to dismiss Gilda's claim on the ground that Gilda, as an importer, does not possess "prudential standing" to maintain the current action; alternatively, the government moves for dismissal for failure to state a claim on which relief can be granted. Def's Mot. to Dismiss and Resp. to PL's Mot. for Class Certification at 1 ("Mot. to Dismiss"). The government opposes Gilda's motion for class certification and asserts that the Court should deny the motion because Gilda has "failed to demonstrate that this is a suitable case for class certification as a class action lawsuit." Id. For the reasons set forth below, the court will deny Gilda's motion for class certification and deny the government's motion to dismiss.

I. Background

This case stems from a dispute between the EC and the United States over the EC's ban on imports of U.S. meat products from animals treated with hormones. In response to the EC's failure to comply with the findings of the World Trade Organization Dispute Settlement Body, which determined that the EC's ban on hormone-treated meat to be in contravention of its trade obligations, the USTR, pursuant to 19 U.S.C. § 2416, imposed 100% ad valorem retaliatory duties on a variety of EC exports to the United States. See Implementation of WTO Recommendations Concerning EC-Measures Concerning Meat and Meat Products (Hormones), 64 Fed.Reg. 14,486 (USTR Mar. 25, 1999). Among the products selected for the retaliatory list were those falling under subheading HTSUS 9903.02.35, which includes "rusks, toasted bread, and similar products."

In 2003, Gilda filed protests with Customs contesting the imposition of the retaliatory duties on various grounds. Customs denied the protests and Gilda ultimately filed suit in this Court. Before the Court, Gilda asserted, inter alia, that it should not be required to pay the 100% duties because the retaliation list had terminated as a matter of law pursuant to 19 U.S.C. § 2417(c), and alternatively, that Gilda should be removed from the retaliation list because the USTR failed to implement the "carousel provision" found in 19 U.S.C. § 2416. See Gilda Industries, Inc., v. United States, 28 CIT 2001, 353 F.Supp.2d 1364 (2004) ("Gilda I"). The Court dismissed Gilda's complaint for failure to state a claim upon which relief can be granted because (1) the domestic producers timely requests for the continuation of the retaliation list had prevented the list from terminating pursuant to 19 U.S.C. § 2417(c), and (2) implementation of the carousel provision would not necessarily result in Gilda's removal from the retaliation list. Id. On appeal, the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") affirmed the relevant holdings of Gilda I, but raised the question, sua sponte, as to whether Gilda possessed "prudential standing" under the Administrative Procedure Act ("APA") to challenge the actions of the USTR. Gilda Industries Inc., v. United States, 446 F.3d 1271, 1279-80 (Fed.Cir.2006) ("Gilda II").

II. Jurisdiction

Gilda's claim facially invokes this Court's jurisdiction over this matter pursuant to 28 U.S.C. § 1581(i)(2) (2000) in that Gilda's claim arises out of a law "providing for ... tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue," and because no other basis for jurisdiction is available or the basis that is available will yield a remedy which is manifestly inadequate. Nat'l Corn Growers Ass'n v. Baker, 840 F.2d 1547, 1555 (Fed.Cir.1988); see Gilda II, 446 F.3d at 1277.

III. Discussion

A. Class Certification

Pursuant to CIT Rule 23(a), there are four prerequisites to class action. First, the class must be so numerous that joinder of all members is impracticable. Second, there must be questions of law or fact common to the class. Third, the claims or defenses of the representative parties must be typical of the claims or defenses of the class, and finally, the representative parties must fairly and adequately protect the interests of the class. In addition to these prerequisites, CIT Rule 23(b) states that one of the three conditions pursuant to Rule 23(b)(1-3) must also be met.

According to Gilda's motion, the "class" that it purports to represent is the class of importers that have continued to pay 100% duties pursuant to the HTSUS 9903.02 "retaliation list" subsequent to July 29, 2007. The court notes that in Gilda I, this court denied the plaintiffs motion for class certification under circumstances almost identical to those present in this matter. In that case the court held:

Because no other class members can be identified the court cannot determine whether joinder is practicable; there are no identifiable common questions of law or fact; and it is unclear whether Plaintiffs claims and defenses are typical of a putative class. It is therefore impossible to determine whether the requirements of class certification can be met. Even assuming that Plaintiffs claims to the contrary are true and a class of plaintiffs does exist, as a discretionary matter a class action should not be maintained. See, e.g. Baxter Healthcare Corp. v. United States, 20 CIT 552, 925 F.Supp. 794 (1996). As Plaintiff has been unable to point to any other pending litigation concerning this issue, conflicting decisions are not a concern. There is also no limited fund problem, as the defendant is not a private litigant.

Gilda I, 28 CIT at 2005, 353 F.Supp.2d at 1368.

In the current matter, Gilda appears to contend that class certification is now warranted because the class members have been "identified." To this end, Gilda explains that, pursuant to a Freedom of Information Act ("FOIA") request, "the government identified 212 importers who were paying the 100% duties," citing Gilda Industries, Inc., v. U.S. Customs and Border Protection, 457 F.Supp.2d 6, 8 (D.D.C. 2006), the case it brought against Customs to enforce the FOIA request (which Customs had denied).

The court does not agree that the circumstances in this matter are appropriate for class certification. Although Gilda's proposed class of plaintiffs appears to meet the numerosity requirement, the fact that 212 potential plaintiffs may exist in a class does not, by itself, equate to those class members being "identified." In Gilda's FOIA case against Customs, Gilda indicated that it had submitted a request that Customs provide "the names and addresses for all importers for the quarter ending September 30, 2003" who were paying the 100% duties pursuant to HTSUS 9903.02. Customs responded that there were 212 importers subject to the 100% duty at that time, but otherwise refused to divulge the identities of the importers pursuant to FOIA's confidentiality exception. The District Court upheld the denial on the ground that disclosure of the information sought by Gilda "could be used to inflict competitive injury on the companies," and noted that several of the importers in question had submitted letters to Customs requesting that the information remain confidential. Id. at 11, 12.

Knowing the probable number of importer-plaintiffs that might ultimately involve themselves in a class action (assuming that data from the last quarter of 2003 accurately represents the number of potential plaintiffs in 2007) does not identify the other plaintiffs in a manner that enables the court to determine whether joinder of those plaintiffs is practicable, whether there are necessarily questions of law or fact common to the class, or whether Gilda's claims and defenses are typical of the class. Further, because neither party is aware of any other plaintiff with pending litigation on this issue, there is no danger of conflicting decisions, and no indication that class action would be superior for the fair and efficient adjudication of the controversy, see CIT Rule 23(b)(1), (3). Finally, the government has not refused to act on any grounds such that...