Saarstahl Ag v. U.S.

• Decision Date: 02 December 1996
• Docket Number: Court No. 93-04-00219.,Slip Op. 96-190.
• Parties: SAARSTAHL AG, Plaintiff, v. UNITED STATES, Defendant, and Inland Steel Bar Co., Defendant-Intervenor.
• Court: U.S. Court of International Trade

949 F.Supp. 863

SAARSTAHL AG, Plaintiff, v. UNITED STATES, Defendant and Inland Steel Bar Co., Defendant-Intervenor.

Slip Op. 96-190.

Court No. 93-04-00219.

United States Court of International Trade.

December 2, 1996.

deKieffer & Horgan (J. Kevin Horgan, Marc E. Montalbine), Washington, DC, for plaintiff.

Frank W. Hunger, Assistant Attorney General of the United States; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, (A. David Lafer, Jeffrey M. Telep); Jeffery C. Lowe, Attorney-Advisor, Office of Chief Counsel for Import Administration, United States Department of Commerce, Washington, DC, for defendant.

Wiley, Rein & Fielding (Charles O. Verrill, Washington, DC, Will Martin, Winston-Salem, NC), for defendant-intervenor.

OPINION

CARMAN, Chief Judge:

Before the Court is plaintiff's Motion for Leave to Amend its Complaint to include a Count VII challenging the Department of Commerce's ("Commerce" or "Department") use of the 15-year useful life found in the Internal Revenue Service (IRS) tax tables to allocate the benefit of nonrecurring subsidies, rather than the actual average useful life of Saarstahl's physical assets. Saarstahl requests the Court remand the issue to the International Trade Administration (ITA) with instructions to allocate the benefit of nonrecurring subsidies based upon the actual average useful life of Saarstahl's physical assets. Both defendant and defendant-intervenor oppose amendment of the complaint at this late juncture. In addition, Saarstahl has moved for oral argument or alternatively for supplemental briefing with regard to the issues remaining undecided after this Court's final judgment in Saarstahl AG v. United States, 939 F.Supp. 898 (CIT1996). Also before the Court is defendant's Motion to Strike Paragraph 3 of Plaintiff's Comments on Remand. Defendant asserts Saarstahl's failure to raise the allocation issue during the administrative proceeding forecloses its raising the issue at this time. Defendant-intervenor supports this motion while Saarstahl opposes it. The Court has jurisdiction over the matter pursuant to 28 U.S.C. § 1581(c) (1988).

BACKGROUND

In Saarstahl AG v. United States, 78 F.3d 1539 (Fed.Cir.1996), the United States Court of Appeals for the Federal Circuit ("Federal Circuit" or "CAFC") reversed and remanded this Court's decision in Saarstahl, AG v. United States, 858 F.Supp. 187 (CIT1994). This Court subsequently remanded the action to Commerce in Inland Steel Bar Co. v. United States, 936 F.Supp. 1052 (CIT1996).

On September 3, 1996, this Court found those aspects of the Saarstahl Remand pertaining to the issue of privatization were supported by substantial evidence on the record and otherwise in accordance with law and entered final judgment with respect to the privatization issue pursuant to U.S. CIT R. 54(b). See Saarstahl AG v. United States, 939 F.Supp. 898 (CIT1996). In 939 F.Supp. 898, the Court also denied Saarstahl's motion for oral argument, but indicated the non-privatization issues would be decided in a future, separate opinion and oral argument might be appropriate to assist the Court in resolving those non-privatization issues. Saarstahl AG v. United States, 939 F.Supp. at 901 n. 3 (CIT1996). Saarstahl subsequently filed a notice of appeal of Slip Op. 96-154 on October 22, 1996. Saarstahl AG v. United States, 939 F.Supp. 898 (CIT1996), appeal docketed, No. 97-1122 (Fed.Cir. November 25, 1996). The United States also filed a notice of appeal on November 4, 1996. Saarstahl AG v. United States, 939 F.Supp. 898 (CIT1996), appeal docketed, No. ____ (Fed. Cir. ____, 1996).¹

CONTENTIONS OF THE PARTIES

A. Plaintiff's Motion for Leave to Amend Its Complaint

Saarstahl argues the motion to amend its complaint should be granted because use of the new allocation methodology is required by the Court's recent decisions in British Steel plc v. United States, 929 F.Supp. 426 (CIT1996) (British Steel III) and British Steel plc v. United States, 879 F.Supp. 1254 (CIT 1995) (British Steel I). In the British Steel opinions, this Court struck down Commerce's use of the 15-year average useful life from the IRS tax tables to allocate the benefit of nonrecurring subsidies, see British Steel I, 879 F.Supp. at 1298 (concluding "Commerce's use of a 15-year allocation period based solely on the IRS tax tables is `unsupported by substantial evidence on the record [and is] otherwise not in accordance with law'") (citation omitted) (bracketed text in original), and affirmed a methodology which allocated nonrecurring subsidies based upon actual average useful life (AUL) of the physical assets for each respondent. See British Steel III, 929 F.Supp. at 439. Saarstahl maintains under the allocation methodology dictated by this Court in the British Steel opinions, Commerce must calculate company-specific AULs by using the asset values and depreciation information listed in the company's financial statements. By dividing the gross book value of physical assets by the related annual depreciation expense, Commerce determines a "reasonable estimate of average useful life." See British Steel III, 929 F.Supp. at 434 (citation omitted).

Defendant and defendant-intervenor oppose Saarstahl's motion, arguing it is too late in the proceeding for Saarstahl to amend its complaint to raise the allocation issue. Defendant and defendant-intervenor claim Saarstahl did not raise the allocation issue at the administrative level. Additionally, they argue Saarstahl could have challenged the 15-year allocation methodology at any point from the beginning of the original investigation in mid-1992 to the issuance of this Court's first Saarstahl decision in mid-1994 and "[i]ts delay in doing so disqualifies [the complaint's] amendment now." (Def.Interv.'s Opp'n to Pl.'s Mot. to Amend Compl. at 2.)

B. Defendant's Motion to Strike Paragraph 3 of Plaintiff's Comments on Remand

In paragraph 3 of its Comments on Remand, Saarstahl challenges Commerce's use of the 15-year average useful life found in the IRS tax tables rather than the actual average useful life of Saarstahl's physical assets and requests the Court remand the matter to Commerce with instructions to allocate the countervailable benefits received by Saarstahl based upon the actual 9-year average useful life of Saarstahl's physical assets. Defendant objects to this comment, asserting the issue "is not the subject of the remand ordered by the Court," and plaintiff has failed to raise the allocation issue "either in its complaint, or in any of its papers during the long course of these proceedings." (Def.'s Mot. to Strike Par. 3 of Pl.'s Comm. on Remand at 1.)

C. Plaintiff's Motion for Supplemental Briefing

Saarstahl requests this Court direct oral argument on the non-privatization issues remaining after this Court's final judgment in Saarstahl AG v. United States, 939 F.Supp. 898 (CIT1996). Saarstahl argues oral argument is "vitally important because of the significant amount of time which has transpired since the issues in this case were last briefed" and because of the issuance of decisions relevant to this proceeding by this Court and the CAFC during that time. (Pl.'s Mot. for Oral Arg. or Alt. for Supp.Brief. at 1.)² Alternatively, plaintiff requests it be allowed to file a supplemental brief on the non-privatization issues, including the issue of allocation. In its initial response to plaintiff's Motion for Oral Argument or Alternatively for Supplemental Briefing, defendant stated it would defer to the discretion of this Court with respect to plaintiff's application for oral argument. (Def.'s Resp. to Pl.'s Mot. for Oral Arg. at 2.) Defendant subsequently moved to suspend supplemental briefing pending resolution of the outstanding motions regarding the allocation issue.

DISCUSSION

Rule 15(a) of the Rules of the United States Court of International Trade, which parallels Rule 15(a) of the Federal Rules of Civil Procedure, provides that once responsive pleadings have been served, a party may amend its pleading "only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." U.S. CIT R. 15(a). It is within the discretion of the trial court to grant or deny a motion for leave to amend a complaint. See Intrepid v. Pollock, 907 F.2d 1125, 1129 (Fed.Cir.1990) rev'd on other grounds, 972 F.2d 1355 (Fed.Cir.1992) ("It is settled that the grant of leave to amend the pleadings ... is within the discretion of the trial court.") (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S.Ct. 795, 802, 28 L.Ed.2d 77 (1971)). In Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962), the Supreme Court held the requirement that leave be freely given must be balanced against numerous considerations protecting the rights of the opposing party. The Supreme Court stated:

If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of amendment, futility of amendment, etc. — the leave sought should, as the rules require, be "freely given."

Id. The court must make a "discretionary decision, in the sense that the court weigh[] considerations such as undue delay, prejudice to the opposing party and the like." Intrepid, 907 F.2d at 1129.

Examining the factors set forth in Foman, this Court concludes Saarstahl's Motion for Leave to Amend its Complaint must be denied because it comes so late in the proceeding that it would cause undue delay and unfairly prejudice the other parties. Although Saarstahl's assertion that...