Oman Fasteners, LLC v. United States

• Decision Date: 15 October 2021
• Docket Number: Consolidated Court No. 20-00037,Slip Op. No. 21-144
• Citation: 542 F.Supp.3d 1399
• Parties: OMAN FASTENERS, LLC, et al., Plaintiffs, v. UNITED STATES, et al., Defendants.
• Court: U.S. Court of International Trade

542 F.Supp.3d 1399

OMAN FASTENERS, LLC, et al., Plaintiffs,

v.UNITED STATES, et al., Defendants.

Slip Op. No. 21-144

Consolidated Court No. 20-00037

United States Court of International Trade.

October 15, 2021

Michael P. House, Perkins Coie, LLP, of Washington, D.C., for plaintiffs Oman Fasteners LLC, Huttig Building Products, Inc., and Huttig Inc. With him on the submissions were Andrew Caridas, Shuaiqi Yuan, Jon B. Jacobs, and Brenna D. Duncan.

Tara K. Hogan, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendants. With her on the submissions were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Aimee Lee, Assistant Director, Meen Geu Oh, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C.

OPINION AND ORDER

Stanceu, Judge.

Defendants move for a partial stay pending their appeal of the judgment this Court entered in Oman Fasteners, LLC v. United States , Judgment (June 10, 2021), ECF No. 108 ("Judgment"), and for certain other measures related to protection of potential government revenue. In the Judgment, the court awarded remedies for plaintiff Oman Fasteners, LLC ("Oman") and plaintiffs Huttig Building Products, Inc. and Huttig, Inc. (collectively, "Huttig"), importers of steel nails, in a challenge to a Presidential action taken under Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862 ("Section 232"), imposing additional duties of 25% ad valorem on certain imported products made of steel, including steel nails.¹ See Proclamation 9980, Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles Into the United States , 85 Fed. Reg. 5,281 (Exec. Office of the President Jan. 29, 2020) (" Proclamation 9980"). Plaintiffs oppose defendants’ motion.

The court orders a stay of the Judgment, orders suspension of liquidation of the entries affected by this litigation, and requires defendants to confer with Oman and with Huttig to obtain agreements on bonding of entries made on and after June 10, 2021, for protection of the revenue potentially owing due to Proclamation 9980.

I. BACKGROUND

The background of this action is set forth in our previous opinion and supplemented herein. See Oman Fasteners, LLC v. United States , 45 CIT ––––, 520 F. Supp. 3d 1332 (2021) (" Oman "). Other pertinent background is presented in decisions of this Court adjudicating a claim substantially the same as the one adjudicated in this litigation. See PrimeSource Bldg. Prods., Inc. v. United States , 45 CIT ––––, 497 F. Supp. 3d 1333 (2021) (" PrimeSource I "), PrimeSource Bldg. Prods., Inc. v. United States , 45 CIT ––––, 505 F. Supp. 3d 1352 (2021) (" PrimeSource II ").

Oman and Huttig brought actions, now consolidated, challenging the lawfulness of Proclamation 9980 on February 7, 2020, [Oman's] Compl. (Ct. No. 20-00037), ECF No. 2; and February 18, 2020, [Huttig's] Compl. (Ct. No. 20-00045), ECF No. 5. Shortly thereafter, upon the consent of all parties, this Court entered preliminary injunctions prohibiting defendants from collecting 25% cash deposits on Oman and Huttig's entries of merchandise within the scope of Proclamation 9980 and also prohibiting the liquidation of the affected entries. Order (Ct. No. 20-00037) (Feb. 21, 2020), ECF Nos. 34 (conf.), 35 (public) ("Oman Prelim. Inj. Order"); Order (Ct. No. 20-00045) (Mar. 4, 2020), ECF Nos. 29 (conf.), 30 (public) ("Huttig Prelim. Inj. Order"). The preliminary injunctions also required plaintiffs to terminate their existing continuous bonds and replace them with continuous bonds having a higher limit of liability to reflect the additional duties Oman and Huttig otherwise would have been required to deposit. Oman Prelim. Inj. Order 2; Huttig Prelim. Inj. Order 2.

On March 9, 2020, in response to Oman's and defendants’ Joint Notice of Proposed Scheduling Order and Amended Injunction Order, the court ordered a stay of Counts II and III of Oman's complaint "pending the Court's decision on the parties’ motions on Count I of the complaint." Order 1 (Ct. No. 20-00037), ECF No. 46. The court amended the preliminary injunctive order to provide that the order would continue in effect until the court entered judgment on Count I of Oman's complaint. Id. at 2. On March 16, 2020, the court consolidated Ct. No. 20-00045 with Ct. No. 20-00037 sub nom. Oman Fasteners, LLC v. United States , stayed Counts II and III of Huttig's complaint pending the resolution of Count I, and modified the preliminary injunction entered in Ct. No. 20-00045 to provide for the order to continue in effect until judgment was entered on Count I. Order, ECF No. 54.

On September 11, 2020, and January 20, 2021, with the consent of the parties, the court amended Oman and Huttig's preliminary injunctions, respectively, to require plaintiffs to "monitor [their] subject imports and foregone duty deposits" instead of conferring with defendants prior to the expiry of their continuous bonds, and to terminate and replace each continuous bond once the amount of foregone duty deposits reached the amount of the bond, minus the baseline bond amount as calculated pursuant to the general continuous bonding formula of U.S. Customs and Border Protection ("Customs" or "CBP"). [Oman Prelim. Inj.] Order 2 (Sept. 11, 2020), ECF Nos. 94 (conf.), 95 (public); [Huttig Prelim. Inj.] Order 2 (Jan. 20, 2021), ECF Nos. 100 (public), 101 (conf.).

In the PrimeSource litigation, this Court awarded summary judgment to plaintiff PrimeSource Building Products, Inc., holding that Proclamation 9980 was issued beyond the statutory time limits set forth in Section 232. PrimeSource II , 45 CIT at ––––, 505 F. Supp. 3d at 1357. Thereafter, the parties in the instant litigation filed a Joint Status Report, in which the defendants agreed that the decisions in PrimeSource were "decisive as to Count I of Plaintiffs’ Complaints" and that as a result there was "no reason for this Court not to grant Plaintiffs’ Motion for Summary Judgment on Count I of the Complaints ... and deny Defendant[s’] Motion to Dismiss Count I of Plaintiffs’ Complaints." Joint Status Report 1–2 (Apr. 30, 2021), ECF No. 105. Further, plaintiffs agreed to move the court to lift the stay and dismiss Counts II and III of their complaints. Id. Accordingly, in Oman , the court granted summary judgment in favor of plaintiffs on Count I of their complaints and dismissed without prejudice Counts II and III. 45 CIT at ––––, 520 F. Supp. 3d at 1339.

The amended preliminary injunctions dissolved upon the entry of judgment on June 10, 2021. See Judgment 1–2. In the Judgment, this Court ordered, inter alia , that defendants liquidate the duties affected by this litigation without the assessment of the 25% additional duties provided for in Proclamation 9980. Id.

Defendants filed a notice of appeal of the Judgment, Notice of Appeal (Aug. 7, 2021), ECF No. 110, and shortly thereafter their motion for a stay pending appeal and other measures, Defs.’ Mot. for Stay of J. to Maintain the Status Quo Ante Pending Appeal (Aug. 9, 2021), ECF No. 111 (conf.), (Oct. 14, 2021), ECF No. 119 (public) ("Defs.’ Mot. for Stay"). Defendants requested that, for the pendency of the appeal, the court: (1) stay the requirement to liquidate Oman's and Huttig's entries without the assessment of the 25% additional duties and reinstate the order to suspend liquidation; (2) stay the requirement to refund with interest any deposits of estimated duties under Proclamation 9980 made by Oman and Huttig; and (3) reinstate the requirements that plaintiffs monitor their imports of merchandise covered by Proclamation 9980 and maintain a sufficient continuous bond for the duty liability on these imports. Defs.’ Mot. for Stay 1–2. Plaintiffs filed their opposition to defendants’ stay motion on August 30, 2021. Pls.’ Opp'n to Defs.’ Mot. for Stay of J. Pending Appeal, ECF Nos. 116 (conf.), 117 (public) ("Pls.’ Opp'n").

II. DISCUSSION

In exercising its traditional powers to further the administration of justice, a federal court may stay enforcement of a judgment pending the outcome of an appeal. Nken v. Holder , 556 U.S. 418, 421, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009). "While an appeal is pending from ... [a] final judgment that grants, continues, modifies, refuses, dissolves, or refuses to dissolve or modify an injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights." USCIT R. 62(d). When that judgment was rendered by a three-judge panel, "the order must be made ... by the assent of all its judges, as evidenced by their signatures." Id.

The party seeking a stay pending appeal has the burden of demonstrating that the stay is justified by the circumstances. Nken , 556 U.S. at 433–34, 129 S.Ct. 1749. We consider four factors in deciding whether defendants have met that burden: (1) whether defendants have made a strong showing that they will succeed on the merits; (2) whether they will be irreparably harmed absent the stay; (3) whether issuance of the stay will substantially injure plaintiffs; and (4) where the public interest lies. See Hilton v. Braunskill , 481 U.S. 770, 776, 107 S.Ct. 2113, 95 L.Ed.2d 724 (1987). "There is substantial overlap between these and the factors governing preliminary injunctions." Nken , 556 U.S. at 434, 129 S.Ct. 1749 (citing Winter v. Nat. Res. Def. Council, Inc. , 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ). The "likelihood of success" and "irreparable harm" factors, working together, are the most critical, and where the United States is a party, the balance of equities and the public interest factors "merge." Id. at 434–35, 129 S.Ct. 1749. We conclude that all four factors support our granting defendants’ motion.

A. Success on the Merits

The decision of the Court of Appeals for the Federal Circuit ("Court of Appeals") in ...