Intercontinental Chems., LLC v. United States

• Decision Date: 12 November 2020
• Docket Number: Court No. 20-00068,Slip Op. 20-162
• Parties: INTERCONTINENTAL CHEMICALS, LLC, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

483 F.Supp.3d 1232

INTERCONTINENTAL CHEMICALS, LLC, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 20-162

Court No. 20-00068

United States Court of International Trade.

November 12, 2020

Matthew K. Nakachi, Junker & Nakachi, of San Francisco, CA for plaintiff.

Kelly Ann Krystyniak, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C. for defendant. With him on the brief were Ethan P. Davis, Acting Assistant Attorney General, and L. Misha Preheim, Assistant Director. Of counsel on the brief was Brandon Jerrold Custard, Trial Attorney.

OPINION

Reif, Judge:

Plaintiff Intercontinental Chemicals, LLC ("ICC" or "plaintiff") brings this action against the United States of America ("Government" or "defendant") to challenge the liquidation instructions issued by the Department of Commerce ("Commerce") with respect to imports of xanthan gum from the People's Republic of China ("China"). Complaint, ECF No. 2 ("Compl."). Defendant moves to dismiss under USCIT Rule 12(b)(1) for lack of subject matter jurisdiction and under USCIT Rule 12(b)(6) for failure to state a claim on which relief can be granted. Def.'s Mot. to Dismiss, ECF No. 12 ("Def. Br.").

Upon review of the filings and applicable law, this Court grants the United States' motion to dismiss for lack of subject matter jurisdiction because 28 § 1581(i), not § 1581(c), provides the requisite jurisdictional basis to review plaintiff's claim. The court does not reach the Rule 12(b)(6) motion to dismiss for failure to state a claim because dismissal under Rule 12(b)(1) renders the 12(b)(6) claim moot.¹ "[A] court without such jurisdiction lacks power to dismiss a complaint for failure to state a claim." IMark Marketing Servs., LLC v. Geoplast S.p.A , 753 F. Supp. 2d 141, 149 (D.D.C. 2010) (citation omitted).

Subject Matter Jurisdiction

BACKGROUND

On July 19, 2013, Commerce published an antidumping duty order on xanthan gum from China at a rate of 154.07%. See Xanthan Gum from the People's Republic of China , 78 Fed. Reg. 43,143 (Dep't of Commerce July 19, 2013). On July 5, 2016, Commerce issued a notice of opportunity to request an administrative review of that order for the period covering July 1, 2015 through June 30, 2016. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review , 81 Fed. Reg. 43,584 (Dep't of Commerce Jul. 5, 2016). After receiving multiple requests for review, Commerce initiated its third administrative review of the xanthan gum from China antidumping duty order. See Initiation of Antidumping and Countervailing Duty Administrative Reviews , 81 Fed. Reg. 62,720 (Dep't of Commerce Sept. 12, 2016). This administrative review is the subject of the present action.

Due to the large number of companies subject to the administrative review, in accordance with 19 U.S.C. § 1677f-1(c)(2)(B), Commerce selected Deosen Biochemical Ltd. and Deosen Biochemical (Ordos) Ltd. (collectively, Deosen) and Neimenggu Fufeng Biotechnologies Co., Ltd./Shandong Fufeng Fermentation Co., Ltd./Xinjiang Fufeng Biotechnologies Co., Ltd. (collectively, Fufeng) as mandatory respondents. See Xanthan Gum From the People's Republic of China: Preliminary Results of the Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2015-2016 , 82 Fed. Reg. 36,746 (Dep't of Commerce Aug. 7, 2017).

Based on this review, Commerce calculated weighted-average dumping margins of 9.30 percent for Deosen, and zero percent for Fufeng. Id. , 82 Fed. Reg. at 36,747. These margins were unchanged in the Final Results. See Xanthan Gum From the People's Republic of China: Final Results of the Antidumping Duty Administrative Review and Final Determination of No Shipments; 2015-2016 , 83 Fed. Reg. 6,513 (Dep't of Commerce Feb. 14, 2018) ("Final Results"). Commerce instructed Customs and Border Protection ("Customs") to liquidate entries not reported in the U.S. sales databases submitted by Doesen and Fufeng at the China-wide rate of 154.07%. Final Results , 83 Fed. Reg. 6,513.

In accordance with the Final Results of the administrative review, Commerce issued non-public importer/customer-specific liquidation instructions to Customs, including instructions for Fufeng on March 2, 2018. Administrative Message No. 8061303 (Pl. Ex. 13). ICC had been inadvertently omitted from Fufeng's importer list, and thus was billed at the substantially higher, China-wide rate, rather than at the Fufeng-specific rate. After arbitration with Fufeng, through which ICC received partial compensation, ICC initiated this suit at the United States Court of International Trade ("USCIT"), invoking jurisdiction based on 28 U.S.C. § 1581(i)(4).

STANDARD OF REVIEW

The Court's determination of subject matter jurisdiction is a threshold inquiry. Steel Co. v. Citizens For A Better Envm't , 523 U.S. 83, 94–95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). When the requirements for subject matter jurisdiction are not satisfied, the court must dismiss the case for lack of jurisdiction. Mittal Can., Inc. v. United States , 30 C.I.T. 154, 158, 414 F. Supp. 2d 1347, 1351 (2006). Whether to grant a motion to dismiss for lack of jurisdiction is a question of law. JCM Ltd. v. United States , 210 F.3d 1357, 1359 (Fed. Cir. 2000).

When jurisdiction is challenged pursuant to Rule 12(b)(1), " ‘the burden rests on the plaintiff to prove that jurisdiction exists.’ " Pentax Corp. v. Robison , 125 F.3d 1457, 1462 (Fed. Cir. 1997), modified, in part , 135 F.3d 760 (Fed. Cir. 1998) (citation omitted). It is also the court's responsibility to review independently the jurisdiction claims that come before it. J.S. Stone, Inc. v. United States , 27 C.I.T. 1688, 1691, 297 F.Supp.2d 1333, 1337 (2003), aff'd, 111 F. App'x 611 (Fed. Cir. 2004) (citing Ad Hoc Comm. v. United States , 22 C.I.T. 902, 906, 25 F. Supp. 2d 352, 357 (1998) ). This principle is particularly true when a party invokes jurisdiction under § 1581(i). Consol. Bearings Co. v. United States , 25 C.I.T. 546, 549, 166 F. Supp. 2d 580, 583 (2001).

LEGAL FRAMEWORK

When this Court asserts jurisdiction over an action, the Court must identify the claim on which plaintiff seeks relief. Mittal Can., Inc. , 414 F. Supp. 2d at 1351. "It is incumbent upon the Court to independently assess the jurisdictional basis for a case." Consol. Bearings Co. v. United States , 166 F. Supp. 2d at 583.

Jurisdiction under § 1581(i) provides for the USCIT's "residual" jurisdiction, Fujitsu Gen. Am., Inc. v. United States , 283 F.3d 1364, 1371 (Fed. Cir. 2002), which allows this Court to "take jurisdiction over designated causes of action founded on other provisions of law." Norcal/Crosetti Foods, Inc. v. United States , 963 F.2d 356, 359 (Fed. Cir. 1992) (citation omitted). It "may not be invoked when jurisdiction under another [sub]section of § 1581 is or could have been available, unless the relief provided under that other subsection would be manifestly inadequate." Consol. Bearings Co. , 166 F. Supp. 2d at 583 (citing Norcal/Crosetti Foods, Inc. , 963 F.2d at 359 ). If relief was available under any other subsection of 28 U.S.C. § 1581, then it is incumbent on the Court to dismiss the case for lack of subject matter jurisdiction. Mittal Can., Inc. , 414 F. Supp. 2d at 1351.

DISCUSSION

I. Positions of the Parties

Plaintiff characterizes its suit as a case principally about Commerce's liquidation instructions, rather than Commerce's "Final Results" or Customs' implementation of the instructions. Compl. at ¶¶ 5–6. Plaintiff argues that the CIT lacks jurisdiction under § 1581(a) because the issue is not with Customs' implementation of Commerce's instructions, but with Commerce's instructions themselves. Id. at ¶ 5. Similarly, plaintiff maintains that the USCIT lacks jurisdiction under § 1581(c) because the challenge is not to the Final Results of an anti-dumping determination, but to the liquidation instructions — the "administration and enforcement" of an antidumping duty order. Therefore, plaintiff invokes the USCIT's residual jurisdiction under § 1581(i)(4) because, in plaintiff's view, no other grounds for jurisdiction exist. Id. at ¶¶ 4–5.

In support of its argument, plaintiff cites J.S. Stone v. United States , 27 C.I.T. 1688, 297 F. Supp. 2d 1333 (2003), to show that jurisdiction under § 1581(i) is proper when an action challenging liquidation instructions is an action challenging the "administration and enforcement" rather than the Final Results themselves. Pl. Rep. at 2 (citing J.S. Stone , 297 F. Supp. 2d 1333 ). Plaintiff also argues that the CIT has found that jurisdiction under § 1581(i) is proper for cases in which Commerce's instructions contravene Commerce's administrative review determinations. Pl. Rep. at 3 (citing Shinyei Corp. of Am. v. United States , 355 F.3d 1297, 1305 (Fed. Cir. 2004) and Consol. Bearings Co. v. United States , 348 F.3d 997 (Fed. Cir. 2003) ). Based on this framing of the issue, plaintiff concludes that the USCIT has residual jurisdiction under § 1581(i).

Defendant moves to dismiss for lack of subject matter jurisdiction, arguing that plaintiff, as an "interested party," could have participated in the administrative review or disputed the Final Results under § 1581(c), rendering relief under § 1581(i) unavailable. Def.'s Rep. in Supp. of Its Mot. to Dis., ECF No. 21 ("Def. Rep.") at 8 (citing Consol. Bearings Co. , 348 F.3d at 1000 ("Before final liquidation, any interested party may request an administrative review of the antidumping order."); 19 U.S.C. § 1677(9)(A) ("The term ‘interested party’ means a ... United States importer of subject merchandise.")). Defendant argues that the "true nature" of ICC's challenge is a challenge to the Final Results, as the subject of plaintiff's dispute is the assessment rates determined by Commerce, not the liquidation instructions or their enforcement. Def. Rep. at 5. As ICC could have participated in the administrative...