Home Prods. Int'l, Inc. v. United States

• Decision Date: 27 September 2019
• Docket Number: Consol. Court No. 07-00123,Slip Op. 19-126
• Citation: 405 F.Supp.3d 1368
• Parties: HOME PRODUCTS INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

405 F.Supp.3d 1368

HOME PRODUCTS INTERNATIONAL, INC., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 19-126

Consol. Court No. 07-00123

United States Court of International Trade.

Dated: September 27, 2019

Frederick L. Ikenson, Blank Rome LLP of Washington, DC for Plaintiff Home Products International, Inc.

Michael D. Snyder, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice of Washington, DC for Defendant, United States. With him on the briefs were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director; and Claudia Burke, Assistant Director. Of counsel was Edward N. Maurer, Deputy Assistant Chief Counsel, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs for Border Protection, of New York, NY; and Saad Y. Chalchal, Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade Enforcement and Compliance of Washington, DC.

William E. Perry, Harris & Moure, PLC of Washington, DC for Defendant-Intervenor Since Hardware (Guangzhou) Co., Ltd.

Kristin H. Mowry, Jeffrey S. Grimson, Jill A. Cramer, Sarah M. Wyss, and Bryan P. Cenko, Mowry & Grimson of Washington, DC for Target Corp.

OPINION and ORDER

Gordon, Judge This antidumping case was very long and very expensive. Ten years of litigation concluded when the court entered a judgment pursuant to a stipulation of settlement among Plaintiff Home Products International, Inc. ("Home Products"), Defendant United States ("the Government"), and Defendant-Intervenor Since Hardware (Guangzhou) Co., Ltd. ("Since Hardware"). See Judgment in Accordance with Stipulated Settlement, ECF No. 168 ("Judgment"). Several months later U.S. Customs and Border Protection ("Customs") incorrectly liquidated 224 subject entries at a lower dumping rate (9.47 percent) than specified in the Judgment (72.29 percent). See Def.'s Status Report, ECF No. 171. It was a big error, under-collecting millions of dollars on the subject entries. The error was brought to the attention of the Government shortly after the 90-day window expired for Customs to voluntarily reliquidate the subject entries under 19 U.S.C. § 1501. With no other direct statutory authorization to correct the error, the Government sought an order from the court directing Customs to reliquidate those entries in accordance with the Judgment. Id. The court issued a short order directing Customs to reliquidate the subject entries at the correct rate in accordance with the Judgment. See Order for Reliquidation, ECF No. 172 ("Order"). Almost immediately, Target Corporation ("Target"), the importer of record for 40 of the subject entries, sought to contest the lawfulness of any reliquidation of their entries and assert its rights in the finality of liquidation. See Target's Mot. to Intervene, ECF No. 173; Target's Mot. for Reconsideration and to Vacate Court Order, ECF No. 177; see also Home Products' Resp. in Opp'n to Target's Mot. to Intervene, ECF No. 180; Home Products' Resp. in Opp'n to Target's Mot. for Reconsideration, ECF No. 185; Defendant's Resp. in Opp'n to Target's Mot. to Intervene, ECF No. 183; Defendant's Resp. in Opp'n to Target's Mot. for Reconsideration, ECF No. 186.

The court sua sponte stayed any reliquidation of the subject entries pursuant to the Order, and repositioned the posture of the litigation as a motion to enforce the Judgment by the Government and Plaintiff.¹ See Order Issuing Stay Pending Disposition of Target's Motions, ECF No. 188; see also Home Products' Summary Presentation of Arguments, ECF No. 191; Target Corp.'s Summary Presentation of Arguments, ECF No. 192; Defendant's Summary Presentation of Arguments, ECF No. 193.

I. Discussion

The Customs Courts Act of 1980 ("1980 Act"), Pub. L. No. 96-417, 94 Stat. 1727 (1980) created "a comprehensive system for judicial review of civil actions arising out of import transactions and federal statutes affecting international trade." Statement of President Carter, 16 Weekly Comp. of Pres. Doc. 2183 (Oct. 11, 1980); see also H.R. Rep. No. 96-1235, at 18–20 (1980), as reprinted in 1980 U.S.C.C.A.N. 3727, 3729. A significant part of this comprehensive new system was the explicit conferral on the U.S. Court of International Trade of "all the powers in law and equity of, or as conferred by statute upon, a district court of the United States." 28 U.S.C. § 1585 (1982). In possessing remedial powers co-extensive with those of a federal district court, this Court is authorized, with certain exceptions not relevant here, "to order any form of relief that is appropriate in a civil action, including, but not limited to, declaratory judgments, orders of remand, injunctions, and writs of mandamus and prohibition." 28 U.S.C. § 2643(c). The 1980 Act "leaves no doubt that 28 U.S.C. § 2643(c)(1) ‘is a general grant of authority for the Court of International Trade to order any form of relief that it deems appropriate under the circumstances.’ " United States v. Mizrahie, 9 C.I.T. 142, 146, 606 F. Supp. 703, 707 (1985) (quoting H.R. Rep. No. 96-1235, at 61, as reprinted in 1980 U.S.C.C.A.N. 3772). As a consequence, Congress empowered the Court of International Trade to adjudicate the rights of parties aggrieved by agency decision-making in the customs and international trade law arena and afford them full and complete relief. See H.R. Rep. No. 96-1235, at 20, 60–62, as reprinted in 1980 U.S.C.C.A.N. 3729, 3771–73.

To provide complete relief a court may, from time to time, be required to enforce its judgments and issue additional declaratory and injunctive relief. See Riggs v. Johnson County, 73 U.S. 166, 187, 6 Wall. 166, 18 L.Ed. 768 (1868) (Without the ability to enforce judgments, "the judicial power would be incomplete and entirely inadequate to the purposes for which it was conferred by the Constitution."). A supplementary proceeding for a court to enforce a judgment is "summary in nature; [it] cannot be used to take up matters beyond the contours of the judgment and thereby short-circuit the usual adjudicative processes." Harvey v. Johanns, 494 F.3d 237, 244–45 (1st Cir. 2007) (citing Fafel v. Dipaola, 399 F.3d 403, 411 (1st Cir. 2005) ). A court's power to enforce a judgment is therefore confined to the four corners of the judgment itself. Id.; see also Peacock v. Thomas, 516 U.S. 349, 359, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996).

A. Liquidation

Liquidation, "the final computation or ascertainment of duties on entries for consumption," is a fundamental concept in all U.S. import transactions. See 19 C.F.R. § 159.1. Optimally, liquidation occurs correctly. If not, reliquidation to correct any resulting error is neither inevitable nor open-ended because Congress long ago adopted a principle of finality for the liquidation of entries that is now codified primarily in 19 U.S.C. §§ 1514 and 1501 (Customs has 90-day window after liquidation in which to correct errors); see also F. Vitelli & Son v. United States, 250 U.S. 355, 358, 39 S.Ct. 544, 63 L.Ed. 1028 (1919) ("the remedy intended to be accomplished by [a prior provision similar to 19 U.S.C. § 1514 ] was to prevent the right to reliquidate, which had previously been exerted without limit, from being exercised except in the particular conditions stated ....").

Liquidation of entries covered by an antidumping or countervailing duty order is somewhat unusual because of the " ‘retrospective’ assessment system under which final liability for antidumping ... duties is determined after merchandise is imported." 19 C.F.R. § 351.212(a) ; see 19 U.S.C. § 1675(a)(2). Liability to pay antidumping duties accrues upon entry, see 19 C.F.R. § 141.1(a), but the actual duty is not formally determined until after entry, and not paid until Customs liquidates, possibly many years after entry. Liquidation is suspended during U.S. Department of Commerce ("Commerce") proceedings, see generally American Power Pull Corp. v. United States, 39 CIT ––––, ––––, 121 F. Supp. 3d 1296, 1300–02 (2015) (explaining statutory scheme for suspension of liquidation), which enables Commerce to exercise its jurisdiction to determine correct assessment rates for subject entries.

If Commerce's proceedings are judicially reviewed, the Court of International Trade then assumes jurisdiction over the subject entries and typically issues a court-ordered injunction that stays liquidation pending issuance of the final court decision (including appeals). See 19 U.S.C. § 1516a(c)(2), American Power Pull, 39 CIT at ––––, 121 F. Supp. 3d at 1302. After the final court decision, the injunction terminates,² and Commerce issues instructions to Customs to liquidate the subject entries in accordance with "the final court decision." 19 U.S.C. § 1516a(e). When Customs liquidates an entry, the finality considerations of § 1514 always lurk in the background except when the Court of International Trade takes jurisdiction over the entries in an action under § 1516a. See 19 U.S.C § 1514(b). This is a logical and necessary carve-out from § 1514 because such entries need to be liquidated in accordance with "the final court decision" pursuant to § 1516a(e), meaning the court, not Customs, necessarily has the final say over the entries.

Ideally, things go right, and liquidation occurs correctly, which is true for most entries. Things do, however, occasionally go amiss, and Customs may liquidate entries incorrectly, for example, too early in violation of the (1) statutory suspension of liquidation, see Juice Farms, Inc v. United States, 68 F.3d 1344 (Fed. Cir. 1995) ; SSAB No. Am. Div. v. U.S. Bureau of Customs & Border Prot., 32 C.I.T. 795, 571 F. Supp. 2d 1347 (2008), or (2) court-ordered injunction, see AK Steel Corp. v. United States, 27 C.I.T. 1382, 281 F. Supp. 2d 1318 (2003) ; LG Elecs. U.S.A., Inc. v. United States, 21 C.I.T. 1421, 991 F. Supp. 668 (1997). Merely identifying an error, however, is no guarantee the court will order Customs to correct it. Compare Juice Farms, 68 F.3d 1344 (finality...