Neenah Foundry Co. v. U.S.
Citation | 86 F.Supp.2d 1308 |
Decision Date | 20 January 2000 |
Docket Number | Court No. 99-07-00441.,Slip Op. 00-7 |
Parties | NEENAH FOUNDRY CO.; Alhambra Foundry Inc.; Allegheny Foundry Co.; Deeter Foundry Inc.; East Jordan Iron Works, Inc.; Lebaron Foundry Inc.; Municipal Castings, Inc.; and U.S. Foundry & Manufacturing Co., Plaintiffs, v. The UNITED STATES, Defendant. |
Court | U.S. Court of International Trade |
Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal, Robin H. Gilbert, Washington, DC, and Grace W. Kim, Potomac, MD), for the plaintiffs.
David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; and Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Robert E. Nielsen), of counsel, for the defendant.
Cameron & Hornbostel LLP (Dennis James, Jr. and Michele Sherman Davenport, Washington, DC), for Bengal Export Corporation, Carnation Industries Limited, Commex Corporation, Crescent Foundry Company Private Limited, Dinesh Brothers Private Limited, Kajaria Iron Castings Ltd., Kiswok Industries Pvt. Ltd., Nandikeshwari Iron Foundry Pvt. Ltd., Rangilal & Sons, R.B. Agarwalla & Company, RSI Limited, Serampore Industries Pvt. Ltd., and Victory Castings Limited, proffered intervenor-defendants.
Claiming their current circumstances give rise to an issue of first impression, come now the plaintiffs with an application to enjoin the International Trade Administration, U.S. Department of Commerce ("ITA") from instructing the Customs Service to discontinue suspension of liquidation and collection of cash deposits on and after January 1, 2000 for entries of merchandise theretofore within the ambit of Certain Iron Metal Castings From India: Countervailing Duty Order, 45 Fed. Reg. 68,650 (Oct. 16, 1980), per the ITA notice of its revocation published November 12, 1999, 64 Fed.Reg. 61,602.
This action derives from the "Uruguay Round" negotiations under the guise of the General Agreement on Tariffs and Trade, which resulted in multilateral agreements, including one on subsidies and countervailing measures, and which in turn led the U.S. Congress to enactment of the Uruguay Round Agreements Act, Pub.L. No. 103-465, 108 Stat. 4809 (Dec. 8, 1994). Section 220 thereof amended section 751 of the Trade Agreements Act of 1979, 19 U.S.C. § 1675, to require that
5 years after the date of publication of ... a countervailing duty order ... the [ITA] and the [International Trade] Commission ... conduct a review to determine ... whether revocation of ... [such] order ... would be likely to lead to continuation or recurrence of ... a countervailable subsidy ... and of material injury.
citing Final Results of Expedited Sunset Review: Iron Metal Castings From India, 64 Fed.Reg. 30,316 (June 7, 1999). Nonetheless, the above-named plaintiff domestic U.S. manufacturers of competing merchandise commenced this action, alleging in their complaint, among other things, that the agency's determination of certain subsidy rates is "erroneous, being significantly understated." Complaint, para. 8.
the domestic industry will forfeit its right to obtain judicial review and the full benefit of a favorable ruling by this Court.
Both before and during a hearing in open court, the application was opposed by the defendant4, notwithstanding such relief in regular course in cases reviewing administrative determinations pursuant to section 751 of the Trade Agreements Act of 1979, as amended. See, e.g., Zenith Radio Corp. v. United States, 710 F.2d 806 (Fed.Cir.1983); Fenton Corporation v. United States, CIT No. 00-01-00014 (preliminary injunction entered Jan. 11, 2000).
Be Zenith and the innumerable cases that have followed it as they have been, in the absence of government consent in this action, the plaintiffs properly recognize in their papers that this court
must consider four factors in determining whether to grant ... an injunction: (1) whether the movant will suffer irreparable harm if the relief is not granted; (2) whether the movant is likely to succeed on the merits; (3) whether an injunction will be contrary to the public interest; and (4) whether the balance of hardships tips in the movant's favor.... No one factor, taken individually, is necessarily dispositive.... The weakness of the showing regarding one factor may be overborne by the strength of the others....
Plaintiffs' Motion for Preliminary Injunction, pp. 2-3. See FMC Corporation v. United States, 3 F.3d 424, 427 (Fed.Cir. 1993), and cases cited therein. Cf. 19 U.S.C. § 1516a(c)(2).
The papers contain a supporting affidavit from the Vice President of Construction Products Sales and Engineering for plaintiffs Neenah and Deeter foundry companies. It avers, in part, that:
6. Prior to the commencement of the sunset proceedings concerning the 1980 CVD Order, prices of imported castings from India averaged approximately 17.5 cents per pound, based on the floor price established by the Indian Engineering Export Promotion Council ("EEPC"). The EEPC sets the minimum export price primarily to keep the Indian producers from competing with each other.... In the past, in addition to the existence of a floor price mechanism, there was less competition among importers as well because their pricing was dictated by different cash deposit rates that were in effect. If the Order is revoked, Indian producers will no longer have CVD duties assessed on their products. Importers, therefore, will no longer have to pay these CVD duties. This means that all Indian producers will be on equal footing, in that countervailing duties will not be collected on any of their exports, and importers will have even greater flexibility in choosing which exports to purchase. They will purchase primarily on the basis of price, since these products are commodity goods. With even more exporters to choose from, importers will be able to seek even lower prices for these goods. They, in turn will compete even more fiercely with each other as well as against domestic producers. This increased competition will cause prices to spiral downward.
7. The industry has already witnessed first-hand the effect of the pending revocation. In a bid for manhole castings solicited by the City of Des Moines, G.C.I. Castings, which to the best of my knowledge imports exclusively Indian castings, was the lowest bidder by a substantial margin.... The disparity in pricing between the Indian importer and the three other bidders, including Neenah, was drastic. Price differentials were as high as 71 percent. In a fixed price, sealed bid procurement, which is typical in our industry, the bidder with the best price is almost always the awardee. Thus, it is very likely that the domestic industry will lose this contract, which would be a loss of approximately $49,000.00 in revenue.
8. The selling practice of G.C.I. Castings, which is described in paragraph 7, is not an isolated incident. Following the Commission's negative determination, other importers of Indian castings have begun positioning themselves differently than they have traditionally, cutting their prices further in order to gain U.S. market share. In fact, many of these importers have begun offering below-market prices to our existing customers.
* * * * * *
11. Sigma is another importer of Indian castings. To the best of my knowledge, a large percentage, if not all, of Sigma's imports consist of Indian castings. Presently, both G.C.I. Castings and Sigma are actively contacting our existing customers in the Midwest region and quoting them prices for heavy Indian castings which are 10 to 30 per cent lower than Deeter's prices. Based on a sample of companies that we have contacted, more than a dozen have already received offers for Indian castings at extremely reduced prices....
12. The foregoing examples of the recent extremely aggressive pricing by these importers demonstrates that revocation of the Order will cause a rapid loss of domestic market share for the U.S. heavy castings industry. Within one month after the Commission's negative determination, our company has already lost significant sales to importers of...
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