Royal United Corp.. v. United States

• Decision Date: 25 June 2010
• Docket Number: Slip Op. 10-71.,Court No. 09-00351.
• Citation: 714 F.Supp.2d 1307
• Parties: ROYAL UNITED CORP., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

714 F.Supp.2d 1307

ROYAL UNITED CORP., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 10-71.

Court No. 09-00351.

United States Court ofInternational Trade.

June 25, 2010.

COPYRIGHT MATERIAL OMITTED.

Hume & De Luca, PC (Robert T. Hume and Stephen M. De Luca) for the Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Stephen C. Tosini), and, of counsel, Aaron P. Kleiner, Attorney-International, Office of the Chief Counsel for Import Administration, Department of Commerce, for Defendant United States.

OPINION

POGUE, Judge.

In this matter, Plaintiff, an importer of axes/adzes from the People's Republic of China (“China” or “PRC”), seeks re-liquidation of two of its entries at the cash deposit rate, rather than at the assessment rate determined by the Department of Commerce (“Commerce” or “the Department”) in its periodic administrative review of the antidumping duty order covering Plaintiff's entries. Plaintiff, however, did not participate in that administrative review proceeding, despite constructive notice of the opportunity to do so. Because of Plaintiff's failure to so participate, and because Plaintiff's complaint would require the court to review Commerce's administrative proceeding, the Plaintiff has failed to satisfy a statutory prerequisite for judicial review and therefore lacks standing to bring its Complaint. Accordingly, the court must dismiss the action for lack of jurisdiction. ¹

BACKGROUND

The administrative proceeding at issue was a review of a 1991 antidumping duty order on four classes of heavy forged hand tools, which included axes/adzes. Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles From the People's Republic of China, 56 Fed.Reg. 6622 (Dep't Commerce February 19, 1991)(notice constituting antidumping duty orders). ² Commerce initiated this administrative review in response to four separate requests for review, all made in late February 2006. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Deferral of Administrative Reviews, 71 Fed.Reg. 17,077 (Dep't Commerce Apr. 5, 2006) (“ Notice of Initiation ”); Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China, 72 Fed.Reg. 10492 (Dep't Commerce Mar. 8, 2007) (preliminary results and partial rescission of the 2005-2006 administrative reviews) (“ Preliminary Results ”) (noting the four requests for initiation of review).

Because the goods at issue come from China, which Commerce considers to be a nonmarket economy (“NME”), Commerce employed its rules and practices for NMEs in these proceedings. Specifically, for goods imported from an NME, Commerce employs a presumption that all exporters in the NME are under state control. See Sigma Corp. v. United States, 117 F.3d 1401, 1405-06 (Fed.Cir.1997)(upholding the presumption of state control as within Commerce's authority). ³

Applying its presumption of state control, it is Commerce's practice to “conditionally” cover, in a review, an NME-wide entity, even when no review of a NME-wide entity has been requested. Commerce gives notice of its practice by publication in the Federal Register. After such notice, if at least one named exporter ⁴ fails to demonstrate independence from government control, the NME-wide entity, and therefore all exporters who fail to demonstrate their independence, are also covered by the results of the review.

Pursuant to this conditional coverage practice, when it initiates a review, Commerce instructs the Bureau of Customs and Boarder Protection (“CBP” or “Customs”) to suspend liquidation of entries of subject merchandise from all unnamed exporters from the NME who have not demonstrated entitlement to a company-specific rate. Upon completing its review, Commerce may then order the entries liquidated at the rate it assesses against the products of the NME-wide entity. ⁵

The two Chinese exporters of the merchandise at issue in this case, Jiangsu Sainty and Shanxi Tianli, were not among those companies for whom review was requested in the administrative review in question. However, following its conditional coverage practice, Commerce included the following language in the Notice of Initiation, as a footnote to its list of companies to be reviewed:

If ... one of the above-named companies does not qualify for a separate rate,

all other exporters of [axes/adzes] from ... China who have not qualified for a separate rate are deemed to be covered by this review as part of the single PRC entity of which the named exporters are a part.

Notice of Initiation, 71 Fed.Reg. at 17,079 n. 6. ⁶

As anticipated by Commerce's notice, at least one of the named exporters for whom review was requested failed to qualify for separate rate status. Commerce accordingly included the China-wide entity within the scope of this review. Preliminary Results, 72 Fed.Reg. at 10,494 (“Jafsam (with respect to all four classes or kinds [of merchandise subject to the antidumping duty order, including axes/adzes] ) failed to respond to the Department's requests for information.... By failing to adequately respond to the Department's requests for information, ... Jafsam ... ha[s] not demonstrated [that it is] free of government control, [is] therefore not eligible to receive a separate rate, and [is] accordingly being treated as part of the PRC-wide entity.”); see also id. at 10,497 & n. 2 (listing PRC-wide rate for “Heavy Forged Hand Tools from the PRC: Axes/Adzes,” and noting that “[t]he PRC-wide entity for Axes/Adzes includes Jafsam.”). ⁷ Affirming these preliminary results, Commerce, in its final results, applied a 189.37 percent dumping margin on axes/adzes from the China-wide entity. Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China, 72 Fed.Reg. 51,787, 51,790 (Dep't Commerce Sept. 11, 2007) (final results and rescissions of the 2005-2006 administrative reviews). Based on these final results, Commerce then issued liquidation instructions to CBP, directing CBP to liquidate entries covered by the review in accordance with the final results. ( See Am. Compl. ¶ 13.)

Plaintiff's two entries at issue are axes/adzes subject to the antidumping duty order on heavy forged hand tools from China, entered during the period of administrative review, in August 2005 and November 2005. (Am.Compl.¶ 1.) ⁸ Accordingly, after notification to Plaintiff, in early 2008, CBP liquidated Plaintiff's two entries at the China-wide assessment rate of 189.37 percent. ( Id. ¶ 11.) ⁹ Plaintiff filed a protest of the liquidation and requested an application for further review, both of which were denied by CBP on the ground that the liquidations were executed in accordance with Commerce's instructions at the close of the review. ( See id. ¶ 13.)

Seeking review of CBP's action, Plaintiff, in its Complaint, now requests an order directing CBP to re-liquidate these entries at the cash deposit rate paid at their time of entry. ( Id. ¶ 15.) Plaintiff contends that because no interested party requested review of the specific Chinese exporters of the products Plaintiff imported, ¹⁰ the merchandise was improperly liquidated at the assessment rate from the administrative review, which included antidumping duties. Plaintiff argues, in essence, that the exporters of its merchandise were unlawfully covered by the results of the instant administrative review of the antidumping duty order on axes/adzes from China. ( See id. ¶¶ 2, 7-15.)

Plaintiff asserts that it has a cause of action under the Administrative Procedure Act (“APA”) ¹¹ , and that this court has jurisdiction over its claim pursuant to 28 U.S.C. § 1581(i) (2006). (Am.Compl.¶¶ 1-3.) However, as further explained below, the court concludes that, based on the facts alleged in Plaintiff's complaint, Plaintiff could and should have brought its claim under Section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a (2006), ¹² and may not now use the broad provisions of the APA and 28 U.S.C. § 1581(i) to circumvent the special statutory procedures and prerequisites enacted by Congress for the adjudication of a Section 1516a claim in this Court. See, e.g., Nat'l Corn Growers Ass'n v. Baker, 840 F.2d 1547, 1556-57 (Fed.Cir.1988) (if claim could have been brought under Section 1516, jurisdiction under Subsection 1581(i) may not be invoked to adjudicate the same claim under the APA, because doing so would circumvent the proper procedures of Section 1516).

As is also further explained below, “the true nature of [Plaintiff's] action” ¹³ is such that the sole potential basis for jurisdiction is pursuant to 28 U.S.C. § 1581(c). See Transcom, Inc. v. United States, 121 F.Supp.2d 690, 693, 695-96 (CIT 2000) (“ Transcom III ”), aff'd, 294 F.3d 1371 (Fed.Cir.2002). However, because Plaintiff-by failing to participate in the administrative review proceeding the results of which Plaintiff now seeks to challenge ¹⁴ -has failed to meet a statutory prerequisite for this Court's exercise of jurisdiction under Subsection 1581(c), the Plaintiff lacks standing to bring its action, and the court therefore lacks subject matter jurisdiction to hear Plaintiff's claim. See Miller & Co. v. United States, 824 F.2d 961, 964 (Fed.Cir.1987) (affirming dismissal of claim over which plaintiff sought jurisdiction under § 1581(i), because “[the] action falls clearly under § 1581(c)” but plaintiff failed to participate in the administrative proceeding sought to be reviewed).

STANDARD OF REVIEW

In considering a motion to dismiss, the court accepts all factual allegations in a plaintiff's complaint to be true. See Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). However, courts are not bound to accept the truth of legal conclusions stated in the...