Norsk Hydro Canada Inc. v. U.S.
| Decision Date | 12 October 2004 |
| Docket Number | SLIP OP. 04-129.,Court No. 03-00828. |
| Citation | 350 F.Supp.2d 1172 |
| Parties | NORSK HYDRO CANADA INC., Plaintiff, v. UNITED STATES, Defendant, and U.S. Magnesium, LLC, Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Steptoe & Johnson LLC, Washington, DC (Eric C. Emerson, Gregory S. McCue, Meredith A. Rathbone) for Plaintiff Norsk Hydro Canada Inc.
Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Jeanne E. Davidson, Deputy Director, Stephen C. Tosini, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Jonathan J. Engler, Attorney-Advisor, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, for Defendant, of counsel.
King & Spalding, LLP, Washington, DC (Stephen A. Jones, Joseph W. Dorn, Jeffrey M. Telep) for Defendant-Intervenor U.S. Magnesium, LLC.
This is a dispute over the calculation and collection of countervailing duties on pure and alloy magnesium that Plaintiff imported into the United States. The Defendant United States Department of Commerce ("Commerce") declined, during an administrative review of Plaintiff's entries of pure and alloy magnesium, to recognize Plaintiff's overpayment of countervailing duties. Plaintiff brings this action under 19 U.S.C. § 1581(c) (2000), challenging Commerce's decision as not in accordance with law. Specifically, Plaintiff claims that 19 U.S.C. § 1671(a) requires Commerce to recognize and offset Plaintiff's overpayment so that the total duties imposed over time equal the net countervailable subsidy. Defendant moves to dismiss Plaintiff's complaint for lack of subject matter jurisdiction under USCIT R. 12(b)(1) and for failure to state a claim upon which relief can be granted pursuant to USCIT R. 12(b)(5). Def.'s Mot. Dismiss at 5. Because jurisdiction is proper under § 1581(c) and Plaintiff has properly alleged that Commerce acted not in accordance with law, the Court denies Defendant's motion.
In 1992, the government of the United States determined that Plaintiff, Norsk Hydro Canada Inc., ("NHCI"), received two non-recurring countervailable grants from Canada; the grants created a fixed total net subsidy amount to be countervailed. Pure Magnesium and Alloy Magnesium From Canada, 57 Fed.Reg. 39,392 (Dep't Commerce Aug. 31, 1992) (countervailing duty orders); Compl. of NHCI at para 4. Commerce amortized the non-recurring grants over a fourteen year period and calculated an amount to be countervailed each year. Compl. of NHCI at para 4. Commerce has conducted annual administrative reviews of the amount of the countervailing duty. See 19 U.S.C. 1675(a).2
Throughout 1997, Plaintiff imported pure and alloy magnesium that was subject to various countervailing duty (CVD) cash deposit rates, depending on the date of each entry. Compl. at para. 5.3 On September 8, 1999, Commerce published the Final Results of its administrative review covering the 1997 entries. Pure Magnesium and Alloy Magnesium From Canada, 64 Fed.Reg. 48,805 (Dep't Commerce Sept. 8, 1999) (final results of countervailing duty administrative reviews). The results of the administrative review determined that countervailing duties should be assessed at 2.02% on Plaintiff's 1997 entries of pure and alloy magnesium. Id. at 48,806. Commerce then issued instructions to the United States Bureau of Customs and Border Protection ("Customs")4 to that effect. Compl. of NHCI at para. 5. Customs sent an e-mail to all Customs ports of entry containing Commerce's liquidation instructions. Id.; Customs Message No. 9342201, Pl.'s Ex. 3 (Dec. 8, 1999). However, in September 2000 and February 2001, Customs officials at Port Huron issued a notice of liquidation for Plaintiff's 1997 entries, advising that liquidation had occurred at the higher cash deposit rates rather than at the 2.02% final assessment rate.5 Compl. of NHCI at para. 6; see also Liquidation Notices, Attach. 1 to Pl.'s Resp. to Ct. Order ("Pl.'s Supp. Br.").
During the administrative review of Plaintiff's 2001 entries, Plaintiff provided a spreadsheet listing of each 1997 entry wrongfully liquidated by Customs, and calculated the amount of excess countervailing duties, plus interest, retained by the U.S. government as of the date of the spreadsheet.6 Compl. of NHCI at para. 7. Plaintiff requested that Commerce adjust its 2001 countervailing duty final results to account for this over imposition of countervailing duties. Id. However, Commerce claimed that the issue was not properly before it for review and that it lacked the authority to address this issue, asserting that Customs' erroneous liquidation should have been protested to Customs. Pure Magnesium and Alloy Magnesium from Canada, 68 Fed.Reg. 25,339, 25,340 (Dep't Commerce May 12, 2003) (preliminary results of countervailing duty administrative reviews).
Plaintiff responded by claiming that it was unable to protest the treatment of its entries to Customs because liquidation occurred by operation of law, and was therefore not statutorily protestable. See Compl. of NHCI at para 9. Plaintiff moreover claimed that under 19 U.S.C. § 1671(a)7 Commerce was required to offset its 2001 payments to ensure that the amount of countervailing duties imposed over the entire amortization period equals the net countervailable subsidy received. Compl. of NHCI at para. 9. Commerce again rejected Plaintiff's argument. Compl. of NHCI at para. 10.
In the instant claim, Plaintiff asks the Court to hold unlawful Commerce's refusal to offset the excess countervailing duties imposed on Plaintiff's past entries of pure and alloy magnesium, as encompassed by the final results of the administrative review. Compl. of NHCI at 10 (prayer for relief). Defendant moves to dismiss Plaintiff's complaint for lack of subject matter jurisdiction under USCIT R. 12(b)(1) and for failure to state a claim upon which relief can be granted under USCIT R. 12(b)(5). Def.'s Mot. Dismiss at 5.
The two issues before this Court are whether this court has subject matter jurisdiction and whether, assuming that the court does have subject matter jurisdiction over Plaintiff's complaint, Plaintiff has failed to state a claim upon which relief can be granted. Where jurisdiction is challenged, "because Plaintiff is seeking to invoke the Court's jurisdiction, it has the burden to establish the basis for jurisdiction." See Former Employees of Sonoco Prods. Co. v. United States Sec'y of Labor, 27 CIT ___, ___, 273 F.Supp.2d. 1336, 1338 (2003) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). At the same time, "the Court assumes `all well-pled factual allegations are true,' construing `all reasonable inferences in favor of the nonmovant.'" United States v. Islip, 22 CIT 852, 854, 18 F.Supp.2d 1047, 1051 (1998) (quoting Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed.Cir.1991)).
To the extent that this case properly arises under 28 U.S.C. § 1581(c), this Court reviews the actions of the government in countervailing subsidy proceedings to determine whether they are "in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). Accordingly, in order to determine whether Plaintiff's complaint states a claim upon which relief can be granted, the Court must decide whether or not Plaintiff has properly alleged that Commerce, in denying its requested adjustment, acted in a manner not "in accordance with law."
This opinion will first discuss subject matter jurisdiction, and second, Defendant's argument regarding failure to state a claim upon which relief can be granted. In evaluating the argument that Plaintiff has failed to state a claim, the Court will focus on the question of whether Plaintiff has properly alleged that Commerce failed to act in accordance with law under 19 U.S.C. § 1671(a) by refusing to offset the duties imposed on Plaintiff's past entries.
Commerce argues that 28 U.S.C. § 1581(c) is not the proper vehicle for bringing Plaintiff's claim. Specifically, Commerce argues that Plaintiff should have exhausted administrative remedies under 28 U.S.C. § 1581(a) before bringing a claim against Commerce. The Court will first address whether § 1581(c) provides jurisdiction over Plaintiff's claim. Then, the Court will address the question of whether, even if § 1581(c) does provide jurisdiction, Plaintiff should nonetheless be required to exhaust remedies under § 1581(a).
I. Section 1581(c) provides jurisdiction for a claim challenging Commerce's 2001 administrative review determination.
Section 1581(c) provides for judicial review of certain "reviewable determinations" outlined in 19 U.S.C. § 1516a(a)(2)(B). See 28 U.S.C. § 1581(c); 19 U.S.C. § 1516a. If not outlined in this statute, an action by Commerce cannot be categorized as a "reviewable determination" and thus, the Court will not possess jurisdiction under § 1581(c). See Shinyei Corp. of Am. v. United States, 355 F.3d 1297, 1304 (Fed.Cir.2004). Under § 1516a(a)(2)(B), a reviewable determination refers to, among other things, "a final determination ... by the administering authority or the Commission under section 1675 of this title." See 19 U.S.C. § 1516a(a)(2)(B)(iii).
Title 19 U.S.C. § 1675 provides for annual administrative reviews of the amount of countervailing duties. See 19 U.S.C. § 1675. Determinations stemming from annual administrative reviews are therefore reviewable determinations under 19 U.S.C. § 1516a, and 28 U.S.C. § 1581(c) provides the Court with subject matter jurisdiction to hear challenges to such determinations. As Plaintiff here challenges Commerce's 2001 administrative review determination as not in accordance with law, jurisdiction exists over this "reviewable determination" pursuant to 28 U.S.C. § 1581(c).
ii. Exhaustion of Remedies under § 1581(a) is not required.
Commerce's argues...
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