Lincoln General Ins. Co. v. U.S.

• Citation: 412 F.Supp.2d 1320
• Decision Date: 22 December 2005
• Docket Number: Slip Op. 05-162. Court No. 03-00546.
• Parties: LINCOLN GENERAL INSURANCE CO., Plaintiff, v. UNITED STATES, Defendant, and Fresh Garlic Producers Ass'n, Christopher Ranch, L.L.C., Farm Gate, L.L.C., the Garlic Co., Valley Garlic, and Vessey and Co., Defendant-Intervenors.
• Court: U.S. Court of International Trade

412 F.Supp.2d 1320

LINCOLN GENERAL INSURANCE CO., Plaintiff, v. UNITED STATES, Defendant, and Fresh Garlic Producers Ass'n, Christopher Ranch, L.L.C., Farm Gate, L.L.C., the Garlic Co., Valley Garlic, and Vessey and Co., Defendant-Intervenors.

Slip Op. 05-162. Court No. 03-00546.

United States Court of International Trade.

December 22, 2005.

Sandler, Travis & Rosenberg, P.A., San Francisco, CA (T. Randolph Ferguson and Arthur Purcell), for the plaintiff.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Patricia M. McCarthy, Assistant Director, Civil Division, Commercial Litigation Branch, United States Department of Justice, (Mark T. Pittman); and Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Peter J.S. Kaldes), for the defendant, of counsel.

Collier Shannon Scott, Washington, DC (Michael J. Coursey and John M. Herrmann), for the defendant-intervenors.

OPINION

MUSGRAVE, Judge.

This opinion addresses the merits of a challenge brought by plaintiff Lincoln General Insurance Company ("Lincoln") to the rescission of Hongda Dehydrated Vegetable Company ("Hongda"), a manufacturer, producer or exporter ("MPE") of the People's Republic of China ("PRC"), from an administrative review of Antidumping Duty Order: Fresh Garlic From the People's Republic of China, 59 Fed.Reg. 59209 (Nov. 16, 1994).¹ The essential question on this review of an administrative record is whether the rescission, by the Department of Commerce, International Trade Administration ("Commerce"), was lawful despite Lincoln's urging that the administrative review be continued in light of the allegation that Hongda had been victimized by a massive import fraud scheme involving the identity theft (pirating) of Hongda's name and export number by certain unknown named entities.

Previously, the Court concluded that jurisdiction over this matter is proper pursuant to 19 U.S.C. §§ 1516a(a)(2)(A)(i)(I), (a)(2)(B)(iii), and 28 U.S.C. § 1581(c). See Lincoln General Insurance Co. v. United States, 28 CIT ____, 341 F.Supp.2d 1265 (2004). At this stage, Lincoln moves for USCIT Rule 56.2 judgment arguing that Commerce's decision is unsupported by substantial evidence and is not in accordance with law, and it seeks vacatur of the rescission and remand for further proceedings. As was the case with Hongda, the Court is not unsympathetic to Lincoln's predicament; however, it is constrained to deny the motion and enter judgment for the defendant.

Background

Some familiarity with the underlying facts is presumed. See id. When the opportunity presented itself, the petitioners requested an administrative review of Hongda. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 67 Fed.Reg. 66612 (Nov. 1, 2002); see also 19 C.F.R. § 351.213(b). They were the only interested party to do so. Apparently, when it subsequently became clear that Hongda's new shipper review would likely² result in application against Hongda of the countrywide 376.67% antidumping duty rate (which has been imposed on entries of fresh garlic from all MPEs of the PRC since 1994), the petitioners immediately requested to withdraw their request for administrative review of Hongda on April 28, 2003. Public Record Document ("PR") 61. See Fresh Garlic from the People's Republic of China: Partial Rescission of Antidumping Duty Administrative Review, 68 Fed.Reg. 46580, 46581 (Aug. 6, 2003).

About eleven weeks later, Lincoln and Hongda argued to Commerce that they had uncovered a "massive" garlic import fraud scheme involving the identity theft of Hongda's name and export number, and that it was therefore in the public interest to continue the administrative review in order to shed light on the scheme and develop solutions for curtailing the fraudulent abuse of U.S. antidumping law with respect to PRC MPEs and resurrect public confidence in the proper administration of PRC agricultural products. See, e.g., PR 112, PR 114.

Considering the arguments for and against rescission of the administrative review, Commerce observed as follows:

With respect to the petitioners' withdrawal of their review request for Hongda, Golden Light, Good Fate, Phil-Sino, and Mai Xuan, although the petitioners withdrew their review request for these five companies after the 90-day deadline, the Department's regulations at 19 CFR 351.213(d)(1) permit an extension of the deadline if "it is reasonable to do so." We have not committed significant resources to date to the review of Hongda, Golden Light, Good Fate, Phil-Sino, and Mai Xuan. Furthermore, the petitioners were the only party to request an administrative review of these companies.

We have received no submissions opposing the withdrawal of the petitioners' requests as they pertain to Golden Light, Good Fate, Phil-Sino, and Mai Xuan. Although Hongda and several importers expressed concerns pertaining to the rescission of the administrative review of Hongda, the arguments they presented pertain to allegations involving fraud. The investigation of alleged fraudulent activities is within the statutory purview of the Bureau of Immigration and Customs Enforcement (ICE). See 19 USC 1592. Thus, we will refer Hongda's and the importers' allegations of inappropriate conduct to ICE.

For the above reasons, we determine that it is reasonable to extend the deadline for withdrawal of the requests for review of Hongda, Golden Light, Good Fate, Phil-Sino, and Mai Xuan, and we are rescinding the review of the antidumping duty order on fresh garlic from the PRC with respect to these companies.

68 Fed.Reg. at 46581.

For Hongda, the rescission meant continuation of the new shipper review results. For Lincoln, the rescission implied surety liability of unimagined proportions. This action followed, in which the petitioners joined as defendants-intervenor but without briefing or otherwise participating.

Standard of Review

On an action such as this, the standard of review is to ascertain whether there is substantial evidence on the administrative record to support Commerce's "determination, finding or conclusion" or whether such is "otherwise not in accordance with law." See 19 U.S.C. § 1516a(b)(1)(B)(i); 28 U.S.C. § 2640(b). Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951); Consolidated Edison Co. of New York v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938); accord Matsushita Electric Industrial Co. v. United States, 750 F.2d 927, 933 (Fed.Cir. 1984). On that basis, the Court must avoid substituting judgment for that of Commerce, since the possibility of drawing a different conclusion from the same record evidence is insufficient to show that the conclusion drawn by the agency is unsupported by substantial record evidence. See Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026-27, 16 L.Ed.2d 131 (1966).

An allegation of abuse of administrative discretion must be considered in the context of the administrative record, in accordance with the substantial evidence standard. See, e.g., Fujian Machinery and Equipment Import & Export Corp. v. United States, 25 CIT 1150, 1155-56, 178 F.Supp.2d 1305, 1313-14 (2001) (discussing overlap between arbitrary and capricious standard and substantial evidence standard). More precisely, abuse of administrative discretion would be "not otherwise in accordance with law" under 19 U.S.C. § 1516a(b)(1)(B)(i). Cf. Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir.2005) ("[a]n abuse of discretion occurs where the decision is based on an erroneous interpretation of the law, on factual findings that are not supported by substantial evidence, or represents an unreasonable judgment in weighing relevant factors") (citation omitted; describing abuse in context of Administrative Procedure Act).

Discussion

As this matter and the related case of Huaiyang Hongda Dehydrated Vegetable Co. v. United States, 28 CIT ____, 2004 WL 2674164 (2004) indicate, interested parties may find their respective interests in completing an administrative review influenced by events or discoveries arising during the course of a proceeding. When U.S. trade law was amended from automatic to voluntary annual administrative review in 1984, Congress stated that the purpose was "to limit the number of reviews in cases in which there is little or no interest, thus limiting the burden on petitioners and respondents, as well as the administering authority." H.R. Conf. Rep. No. 98-1156, 98th Cong., 2nd Sess. at 181 (1984), reprinted in 1984 U.S.C.C.A.N. 5220, 5297. See also Ferro Union, Inc. v. United States, 23 CIT 178, 181, 44 F.Supp.2d 1310, 1315 (1999) ("Commerce could rightly continue a review in which there is an expressed interest"). Permitting the subsequent withdrawal of a review request is premised on the recognition that an interested party may not know whether it had been in its interest to have requested an administrative review until the prior review had been completed, which might occur long after an order's anniversary. In order to avoid waste of resources and also prevent abuse of process through manipulation, Commerce's position has been that it is appropriate to retain discretion on whether to permit a party to withdraw its request for administrative review beyond 90 days of a review's initiation.³ Thus, the current regulation continues to state that once an administrative review is initiated, upon the request of the requesting party it "will" be rescinded within 90 days of its initiation or thereafter at Commerce's discretion. 19 C.F.R. § 351.213(d)(1). The reasonable exercise of the administering authority's discretion has been upheld in appropriate circumstances, see, e.g., Cosco Home and Office Products v. United States, 28...