Hartford Fire Ins. Co. v. United States
| Decision Date | 01 December 2014 |
| Docket Number | No. 2013–1585.,2013–1585. |
| Parties | HARTFORD FIRE INSURANCE COMPANY, Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
OPINION TEXT STARTS HERE
Frederic D. Van Arnam, Jr., Barnes, Richardson & Colburn, LLP, of New York, New York, argued for plaintiff-appellant. With him on the brief was Helena D. Sullivan.
Jason M. Kenner, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellee. With him on the brief were Stuart F. Delery, Assistant Attorney General, and Jeanne E. Davidson, Director, of Washington, DC, and Amy M. Rubin, Acting Assistant Director, International Trade Field Office, of New York, New York. Of counsel on the brief was Beth C. Brotman, Office of Assistant Chief Counsel, United States Customs and Border Protection, of New York, New York. Of counsel was Justin Reinhart Miller, Attorney, United States Department of Justice, of New York, New York.
Before LOURIE, PLAGER, and WALLACH, Circuit Judges.
Appellant Hartford Fire Insurance Company (“Hartford”) appeals the final judgment of the United States Court of International Trade (“CIT”) dismissing its action for failure to state a claim for which relief can be granted. See Hartford Fire Ins. Co. v. United States, 918 F.Supp.2d 1376 (Ct.Int'l Trade 2013). Because Hartford has failed to plead sufficient factual matter to “state a claim to relief that is plausible on its face,” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks and citation omitted), this court affirms.
Between July 30, 2003, and August 31, 2003, Sunline Business Solution Corporation (“Sunline”) imported into the United States eight entries of freshwater crawfish tailmeat from Chinese producer Hubei Qianjiang Houhu Frozen (the “Hubei Entries”). The Hubei Entries were subject to an antidumping duty order covering freshwater crawfish tailmeat from China. See Freshwater Crawfish Tail Meat from the People's Republic of China, 62 Fed.Reg. 48,218 (Dep't of Commerce Sept. 15, 1997) (notice of amendment to final determination of sales at less than fair value and antidumping duty order) (“the Order”).
The Hubei Entries were entered following approval from United States Customs and Border Protection (“Customs”) of eight single-entry bonds that covered the estimated antidumping duties on the Hubei Entries and designated Hartford as the surety. Hubei was a new shipper of freshwater crawfish tailmeat, and the Hubei Entries were made during the pendency of Hubei's “new shipper review.” 1See Freshwater Crawfish Tail Meat from the People's Republic of China, 67 Fed.Reg. 67,822 (Dep't of Commerce Nov. 7, 2002) (initiation of antidumping duty new shipper reviews). After Hubei's new shipper review was rescinded, meaning Hubei did not qualify for an individual antidumping duty rate, Customs liquidated the Hubei Entries at the 223.01% country-wide rate in effect pursuant to the final results of the relevant administrative review of the Order. See Freshwater Crawfish Tail Meat from the People's Republic of China, 68 Fed.Reg. 52,746 (Dep't of Commerce Sept. 5, 2003) (rescission of antidumping duty new shipper reviews). Following Sunline's failure to pay the duties owed after liquidation, Customs demanded payment from Hartford.
Hartford did not satisfy the demand and instead filed a complaint at the CIT on February 7, 2007, seeking to void its obligations under the bonds securing the Hubei Entries. Hartford alleged the bonds were voidable because Customs had been investigating Sunline for possible import law violations during the period in which the bonds were secured and the Hubei Entries were entered, and Customs did not inform Hartford of the investigation. In particular, in Hartford's Second Amended Complaint filed on September 12, 2012,2 Hartford alleges, as its single cause of action, that Customs, as obligee on the bonds, abused its discretion by either failing to require a cash deposit in lieu of a bond for the Hubei Entries or by failing to reject the entries altogether. Hartford further alleged, given the confidential nature of Customs' investigation, Customs should have known that Hartford was not aware of the existence of an investigation, and therefore Customs unreasonablyincreased Hartford's risk when it approved the Hubei bonds.
Customs moved to dismiss the Second Amended Complaint for failure to state a claim pursuant to USCIT Rule 12(b)(5), which the CIT granted on June 27, 2013. Hartford appeals. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(5) (2012).
This court reviews de novo the CIT's dismissal of a case for failure to state a claim for which relief can be granted. Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1049 (Fed.Cir.2012). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). “In deciding a motion to dismiss, the court must accept well-pleaded factual allegations as true and must draw all reasonable inferences in favor of the claimant.” Kellogg Brown & Root Servs., Inc. v. United States, 728 F.3d 1348, 1365 (Fed.Cir.2013) (citing Lindsay v. United States, 295 F.3d 1252, 1257 (Fed.Cir.2002)).
The antidumping statute authorizes the United States Department of Commerce (“Commerce”) to impose duties on imported goods that are sold in the United States at less-than-fair value. See19 U.S.C. § 1673 (2000). Once an antidumping duty order covering certain goods is in place, upon request, Commerce will conduct administrative reviews “for new exporters and producers” who did not export the subject merchandise during the period of investigation. 3Id. § 1675(a)(2)(B); see also Marvin Furniture (Shanghai) Co. v. United States, 744 F.3d 1319, 1323 (Fed.Cir.2014) ().
“When importing merchandise into the United States, ‘the importer of record shall deposit with [Customs] at the time of entry ... the amount of duties and fees estimated to be payable on such merchandise,’ including applicable antidumping or countervailing duties.” Chemsol, LLC v. United States, 755 F.3d 1345, 1349 (Fed.Cir.2014) (quoting 19 U.S.C. § 1505(a)). The “deposits collected upon entry are considered estimates of the duties that the importer will ultimately have to pay as opposed to payments of the actual duties.” Sioux Honey, 672 F.3d at 1047. The deposited security is frequently a customs bond, but when a bond or other type of security is not specifically required by law, “the Secretary of the Treasury may ... require, or authorize customs officers to require, such bonds or other security as he, or they, may deem necessary for the protection of the revenue or to assure compliance with any provision of law, regulation, or instruction.” 19 U.S.C. § 1623(a). For new shipper reviews, pursuant to 19 U.S.C. § 1675(a)(2)(B)(iii), Commerce “shall ... direct [Customs] to allow, at the option of the importer, the posting ... of a bond or security in lieu of a cash deposit for each entry of the subject merchandise” (i.e., the so-called “bonding privilege”) (emphasis added).4
In response to Hartford's allegation that Customs abused its discretion when it approved the Hubei bonds because it was aware that Sunline was being investigated, the CIT held, “[e]ven construed in the light most favorable to [Hartford], there is nothing in the pleadings here to plausibly suggest that Customs' investigation had proceeded to the stage where Customs had reason to believe the Hubei entries were problematic or that new shipper bonds would be insufficient security.” Hartford, 918 F.Supp.2d at 1381. In doing so, the CIT observed “Hartford merely pleads that the investigation into Sun-line had begun two weeks before the last Hubei bond was issued,” and that “the investigation did not involve the Hubei entries, but rather involved the entries of an entirely different supplier.” Id. Therefore, the CIT concluded, “[w]ithout any connection to the Hubei entries, a bare allegation that Customs was investigating Sunline is insufficient to plausibly suggest abuse of discretion.” Id. (citations omitted).
The CIT found unavailing Hartford's argument that Customs abused its discretion by failing to reject the Hubei Entries altogether in light of (1) the investigation and (2) the fact that Customs ultimately rejected another set of entries made by Sunline that preceded the Hubei Entries (the “World Commerce Entries”). Id. The World Commerce Entries were rejected because Customs concluded Sunline had falsified documents to reflect a different manufacturer. Id. (citations omitted). The CIT explained this argument failed “because the World Commerce entries suffered from a different flaw that was independent of, and not logically connected to, Sunline's default on the Hubei entries.” Id. The CIT found Hart-ford's “pleadings do not even suggest how Customs' investigation of false documentation in one set of entries can plausibly lead to the conclusion that Sunline would default on the Hubei entries.” Id. As such, the CIT found no basis to plausibly infer an...
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