On Behalf Of All Others Similarly Situated v. United States

• Decision Date: 27 August 2010
• Docket Number: Slip Op. 10-96.,Court No. 09-00141.
• Citation: 722 F.Supp.2d 1342
• Parties: SIOUX HONEY ASSOCIATION, Adee Honey Farms, Monterey Mushrooms, Inc., The Garlic Company, and Beaucoup Crawfish, Inc., dba Riceland Crawfish, Inc., individually and on behalf of all others similarly situated, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

722 F.Supp.2d 1342

SIOUX HONEY ASSOCIATION, Adee Honey Farms, Monterey Mushrooms, Inc., The Garlic Company, and Beaucoup Crawfish, Inc., dba Riceland Crawfish, Inc., individually and on behalf of all others similarly situated, Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 10-96. Court No. 09-00141.

United States Court of International Trade.

Aug. 27, 2010.

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Kelley Drye & Warren LLP (Paul C. Rosenthal, Donna L. Wilson, Kathleen W. Cannon, Michael J. Coursey, and Richard D. Milone), Washington, DC, for plaintiffs Sioux Honey Association, Adee Honey Farms, The Garlic Company, and Monterey Mushrooms, Inc. and co-counsel for plaintiff Beaucoup Crawfish, Inc., dba Riceland Crawfish, Inc.

Adduci, Mastriani & Schaumberg, LLP (Will E. Leonard and John C. Steinberger), Washington, DC, co-counsel for plaintiff Beaucoup Crawfish, Inc., dba Riceland Crawfish, Inc.

Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Michael J. Dierberg and L. Misha Preheim); Andrew G. Jones and Albert T. Kundrat, Office of Assistant Chief Counsel (Indianapolis), United States Customs and Border Protection, of counsel; Jonathan Zielinski, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant United States.

OPINION

STANCEU, Judge:

Plaintiffs Sioux Honey Association, Adee Honey Farms, Monterey Mushrooms, Inc., The Garlic Company, and Beaucoup Crawfish, Inc., dba Riceland Crawfish, Inc. (collectively, “plaintiffs”) brought this action against the United States and against a large number of private parties (“Surety Defendants”) engaged in the business of issuing customs bonds. Compl. ¶¶ 1-2. Plaintiffs, domestic producers of honey, mushrooms, garlic, or crawfish, alleged numerous statutory and regulatory violations by the United States Department of Commerce (“Commerce”) and United States Customs and Border Protection (“Customs”) affecting antidumping duty (“AD”) collections on products in numerous new shipper reviews (“NSRs”) that Commerce conducted under the antidumping laws. Id. ¶¶ 1-5. Plaintiffs assert rights on their own behalf and seek to represent the interests of a class of other, similarly-situated domestic producers. Id. ¶¶ 2, 77. Common to many of their claims are allegations that various government actions, or failures to act, denied them remedial benefits due them under the antidumping laws and prevented them from obtaining the full amount of distributions to which they are entitled under the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”), 19 U.S.C. § 1675c (repealed 2006). Compl. ¶ 5.

Ruling on various motions, the court dismissed the Surety Defendants, having concluded that each claim brought solely against the Surety Defendants and each claim brought jointly against the Surety Defendants and the United States must be dismissed, either for lack of standing or for failure to state a claim upon which relief can be granted. Sioux Honey Ass'n v. Hartford Fire Ins. Co., 34 CIT ----, ----, 700 F.Supp.2d 1330, 1351-52 (2010) (“ Sioux Honey I ”). The court now dismisses all remaining claims in this action.

I. Background

The background of this litigation is presented in the court's opinion and order in Sioux Honey I, 34 CIT at ----, 700 F.Supp.2d at 1335-38, and is summarized briefly herein.

A. Customs Bonding for Merchandise Subject to New Shipper Reviews

Upon request, Commerce conducts reviews to establish individual weighted-average dumping margins for foreign exporters or producers of merchandise subject to an antidumping duty order who did not export subject merchandise during the period of the investigation and are not affiliated with a producer or exporter who did so. 19 U.S.C. § 1675(a)(2)(B) (2006). From January 1, 1995, the effective date of legislation establishing the new shipper review procedures, to April 1, 2006 (a period of time to which plaintiffs refer as the “NSR Bond Period,” Compl. ¶ 4), the antidumping law permitted these “new shippers” to post bonds with Customs in lieu of cash deposits to serve, during the time required to conduct the review, as security for future payment of antidumping duties. See 19 U.S.C. § 1675(a)(2)(B)(iii) (suspended by the Pension Protection Act of 2006, Pub.L. No. 109-280, § 1632(a), 120 Stat. 780, 1165 (2006)). At the center of this action are numerous customs importation bonds (“new shipper bonds”) obtained from sureties by importers of Chinese-origin products subject to antidumping duty orders and new shipper reviews during the NSR Bond Period. See id. § 1623 (authorizing the collection of bonds for protection of the revenue and compliance with laws enforced by Customs); 19 C.F.R. § 113.62 (2009) (setting forth regulations and conditions for basic importation and entry bonds). Plaintiffs estimate that the new shipper bonds at issue in this case number in the hundreds and have “an estimated combined face value of several hundred million dollars.” Compl. ¶ 2. Their claims against the United States involve new shipper reviews conducted under twenty Court No. 09-00141 Page 4 antidumping orders on imports from China (the “China NSR Orders”). Id. ¶ 4. Plaintiffs' complaint states that the vast majority of the new shipper bonds were issued on imports subject to four antidumping orders on imports from China (the “Four Orders”), which pertained to fresh garlic, preserved mushrooms, freshwater crawfish tail meat, and pure honey. Id.

B. Rights of Domestic Producers to Distributions under the CDSOA

The CDSOA directed Customs to deposit collected antidumping (and countervailing) duties into special accounts, to segregate those duties according to the relevant antidumping (or countervailing) duty order, and to distribute, on an annual basis, a ratable share of duties collected for a particular unfairly-traded product to domestic producers who qualified as affected domestic producers (“ADPs”) under the CDSOA, as reimbursement for incurred qualifying expenditures. 19 U.S.C. § 1675c(e) (repealed 2006); 19 C.F.R. § 159.61 (2009). In the 2006 repeal of the CDSOA, Congress provided for the continued distribution of duties “on entries of goods made and filed before October 1, 2007.” Deficit Reduction Act of 2005, Pub.L. No. 109-171, § 7601(b), 120 Stat. 4, 154 (2006).

Plaintiffs seek to represent not only their own interests but also the interests of a proposed class of similarly-situated ADPs and parties who seek ADP status in litigation now pending before the courts, in which the would-be ADPs challenge as unconstitutional CDSOA provisions limiting ADP status to those parties who expressed support for an antidumping or countervailing duty petition. ¹ Compl. ¶ 77.

C. Judicial Proceedings

In Sioux Honey I, decided on March 26, 2010, the court dismissed all claims brought against the Surety Defendants in this action, whether brought jointly against the Surety Defendants and the United States or brought solely against the Surety Defendants. Sioux Honey I, 34 CIT at ----, 700 F.Supp.2d at 1351. The court thus dismissed all claims expressed in Counts One through Six of the complaint. Id. The court reserved decision on the motion of the United States to dismiss with respect to the remaining claims in the complaint (Counts Seven through Fifteen), which are addressed in this Opinion. Id.; United States' Mot. to Dismiss Pls.' Compl. for Lack of Jurisdiction & for Failure to State a Claim upon which Relief May Be Granted (“Mot. to Dismiss”).

D. Plaintiffs' Remaining Claims Against the United States

In their remaining claims against the United States, plaintiffs allege that Customs denied them due process by not allowing them to participate in the adjudications of administrative protests by the sureties. Compl. ¶¶ 150-163 (Count Seven). Commerce, they allege, failed in some instances to issue to Customs required instructions to liquidate entries subject to new shipper reviews under the China NSR Orders. Id. ¶¶ 164-173 (Count Eight). They claim that Customs unlawfully failed to liquidate some entries within six months of receiving liquidation Court No. 09-00141 Page 6 instructions from Commerce and thereby allowed the entries to be deemed liquidated, thus denying plaintiffs the remedial benefits of the antidumping duty orders and reducing the amount of CDSOA distributions (“offsets”) available to plaintiffs as ADPs. Id. ¶¶ 174-183 (Count Nine). They claim, further, that Customs failed to distribute some collected antidumping duties as required by the CDSOA or distributed some duties it should have withheld from distribution, id. ¶¶ 184-190 (Count Ten), and failed to issue demands to sureties to recover duties under the new shipper bonds, id. ¶¶ 191-197 (Count Eleven). Based on a theory that the statutory power to compromise antidumping duties was transferred from Customs to Commerce in 1980, plaintiffs claim that Customs, in some instances, compromised antidumping duties owed in new shipper reviews although lacking legal authority to do so. Id. ¶¶ 198-205 (Count Twelve). They claim that Customs wrote off certain antidumping duties, contrary to various statutes and regulations. Id. ¶¶ 206-215 (Count Thirteen). Plaintiffs claim that actions by Customs to cancel bonds and charges against bonds were unlawful because Customs failed to publish, as required by law, guidelines on its exercise of bond cancellation authority. Id. ¶¶ 216-225 (Count Fourteen). Finally, plaintiffs allege that Customs failed to notify the Department of Justice of the need to file collection actions against the sureties on certain new shipper bonds and thereby violated a provision in the Customs regulations. Id. ¶¶ 226-235 (Count Fifteen). On these various claims, plaintiffs seek...