SCM Corp. v. United States

• Citation: 450 F. Supp. 1178
• Decision Date: 11 May 1978
• Docket Number: C.R.D. 78-2,Court No. 77-4-00553.
• Parties: SCM CORPORATION v. UNITED STATES (Brother International Corporation, Party-in-Interest).
• Court: United States Court of Customs and Patent Appeals

450 F. Supp. 1178

SCM CORPORATION v. UNITED STATES (Brother International Corporation, Party-in-Interest).

C.R.D. 78-2; Court No. 77-4-00553.

United States Customs Court.

May 11, 1978.

Stewart & Ikenson, Washington, D. C. (Eugene L. Stewart and Frederick L. Ikenson, Washington, D. C., of counsel), for plaintiff.

Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C. (David M. Cohen, Chief, Customs Sec., and Glenn E. Harris, New York City, trial atty.), for defendant.

Tanaka, Walders & Ritger, Washington, D. C. (H. William Tanaka and Lawrence R. Walders, Washington, D. C., of counsel), for party-in-interest.

RE, Chief Judge.

Plaintiff, SCM Corporation ("SCM"), an American manufacturer, by this action seeks to review under section 516(c) of the Tariff Act of 1930, as amended, the failure of the Secretary of the Treasury not to assess dumping duties upon the importation from Japan of portable electric typewriters. It has moved under Rule 1.1(b) of the rules of this court for a determination whether this court has subject matter jurisdiction over this action.¹

Rule 1.1(b) provides that "where, in any proceeding or in any instance, there is no applicable rule of procedure, the judge or judges, before whom the action is pending, may prescribe the same." Although Rule 4.7(b)(2) provides defendants with the defense of lack of subject matter jurisdiction, there is no equivalent procedure by which plaintiffs may contest subject matter jurisdiction.² SCM has moved under Rule 1.1(b) because, while invoking the court's jurisdiction by bringing this action, it nevertheless deems it necessary to contest the jurisdiction of the court. Even though not specifically provided for in the rules of this court, SCM's motion will nonetheless be entertained and considered. See Rubberset Co. v. United States, 68 Cust.Ct. 370, C.R.D. 72-9, 342 F.Supp. 749 (1972). Since, by this motion, SCM contests the jurisdiction of the court, the motion will be treated as a motion to dismiss for lack of subject matter jurisdiction.

A brief history of this litigation, and the statutory scheme under which it arose, is necessary to understand the nature and purpose of plaintiff's motion.

This case arises under the Antidumping Act of 1921, 19 U.S.C. § 160 et seq. (1970 & Supp. V 1975) ("Antidumping Act"), which was enacted to prevent actual or threatened injury to a domestic industry resulting from sales of imported merchandise in the United States at prices lower than in the country of origin. J.C. Penney Co. v. United States Department of Treasury, 319 F.Supp. 1023, 1024 (S.D.N.Y.1970), aff'd, 439 F.2d 63 (2d Cir. 1971), cert. denied, 404 U.S. 869, 92 S.Ct. 60, 30 L.Ed.2d 113 (1971); Timken Co. v. Simon, 176 U.S.App.D.C. 219, 539 F.2d 221 (1976). An affected American manufacturer, producer or wholesaler has the right to file a complaint with the Secretary of the Treasury ("Secretary") alleging that a class of foreign merchandise is being "dumped" in the United States. 19 U.S.C. § 1516 (Supp. V 1975). The Secretary is then required to determine whether the foreign merchandise is actually being sold at a lower price in this country than in the home market, i. e., whether the sales are at less than fair value (LTFV). Whenever the Secretary finds sales at LTFV, he advises the United States International Trade Commission ("ITC"), which has three months to determine "whether an industry in the United States is being or is likely to be injured, or is prevented from being established, by reason of the importation of such merchandise into the United States." If the ITC makes an affirmative injury determination, the Secretary must publish a notice of his and the ITC's determinations in the Federal Register. This publication constitutes the "dumping finding." The finding must include a description of the class or kind of merchandise to which it applies in such detail as may be necessary for the guidance of customs officers. 19 U.S.C. § 160(a).

When the "dumping finding" has been published, all unappraised merchandise described in the finding, entered or withdrawn from warehouse for consumption, not more than 120 days before the question was presented to the Secretary, is subject to special dumping duties. The amount of the dumping duties is the difference between the value of the merchandise in the foreign market, and the purchase or exporter's sales price, i. e., the "dumping margin." 19 U.S.C. § 161(a). Dumping duties will not necessarily be assessed merely because the imported merchandise has been the subject of a dumping finding. Customs officials will assess dumping duties on an entry by entry basis, and only if they find a "dumping margin."

If the Secretary finds no LTFV sales, or if the ITC makes a negative injury determination, no dumping finding can be published and no dumping duties can be assessed. For a brief summary of the provisions of the Antidumping Act, see SCM Corporation v. United States (Brother International Corporation, Party-in-Interest), 79 Cust.Ct. 163, C.R.D. 77-6, 435 F.Supp. 1224 (1977), which denied plaintiff's motion for assignment of this action to a three-judge panel.

Under the Antidumping Act, dumping duties can be assessed only against unappraised merchandise. Congress, therefore, provided the provisional remedy known as "withholding of appraisement" to prevent importations during the pendency of the dumping investigation from being appraised by customs, and thus escaping subsequent imposition of dumping duties. Whenever the Secretary has reason to believe or suspect that a class of merchandise, as to which a finding has not been made public, is being sold at LTFV, i. e., being "dumped," he shall publish in the Federal Register what is called a withholding notice. An appraisement is withheld until further order, or until a dumping finding has been published. 19 U.S.C. § 160(b).

Pursuant to the Antidumping Act, SCM filed a complaint with the Secretary on February 14, 1974, alleging that portable electric typewriters from Japan were being "dumped" in the United States. Notice of pendency of a dumping investigation was published on March 20, 1974. Notice providing for withholding of appraisement followed on December 20, 1974. On March 20, 1975, Assistant Secretary of the Treasury Macdonald published a notice that sales of portable electric typewriters from Japan were being or were likely to be made at LTFV. 40 Fed.Reg. 12685 (1975). The ITC, advised of the Secretary's determination, held hearings in May of 1975, and on June 19, 1975 by a 3-2 vote, one Commissioner abstaining, rendered a negative determination of injury. The negative injury determination was published on June 26, 1975. 40 Fed.Reg. 27079 (1975). As a result of the negative injury determination by the ITC, the Secretary of the Treasury had no authority to publish a dumping finding or to assess dumping duties. Accordingly, he authorized the appraisement of the typewriters which were subject to withholding of appraisement pending the outcome of the dumping investigation.

SCM sought to contest the negative injury determination of the ITC. It commenced an action in the United States District Court for the District of Columbia seeking to set aside the negative injury determination of the ITC, and requested preliminary injunctive relief. SCM Corporation v. United States International Trade Commission et al., 404 F.Supp. 124 (D.D.C. 1975). The jurisdictional basis for the action was 28 U.S.C. § 1340 (1970), which provides that "the district courts shall have original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue, or revenue from imports or tonnage except matters within the jurisdiction of the Customs Court." The jurisdiction of the United States Customs Court over actions by American manufacturers is found in 28 U.S.C. § 1582(b) (1970), which provides that "the Customs Court shall have exclusive jurisdiction of civil actions brought by American manufacturers, producers, or wholesalers pursuant to section 516 of the Tariff Act of 1930, as amended."³

These statutes make it clear that if a civil action is within the exclusive jurisdiction of the United States Customs Court, it cannot be brought in the district courts. E. g., Consumers Union of United States, Inc. v. Committee for Implementation of Textile Agreements, 561 F.2d 872 (D.C. Cir. 1977), cert. denied, 435 U.S. 933, 98 S.Ct. 1509, 55 L.Ed.2d 531 (1978); Fritz v. United States, 535 F.2d 1192 (9th Cir. 1976). Since the defendants in the district court maintained that the United States Customs Court had jurisdiction under the provisions of section 516, it moved to dismiss SCM's action for lack of subject matter jurisdiction. The district court held that since SCM could bring its action pursuant to section 516, it was within the exclusive jurisdiction of the United States Customs Court. In its decision, the district court also stated that the amendments to section 516 "provided in the Trade Act of 1974 reinforce the conclusion that Congress did not mean to deprive the Customs Court of its exclusive jurisdiction over customs matters." SCM Corporation, 404 F.Supp. at 130. Accordingly, the district court granted defendants' motion and dismissed the action. Id. at 132.

On appeal, the United States Court of Appeals for the District of Columbia Circuit expressed doubt on the jurisdictional question presented and stated:

"SCM has raised what are far from frivolous doubts concerning its ability to obtain review in the Customs Court pursuant to section 516(c). On the other hand, the defendants have urged upon us what appear to be quite possible constructions of the applicable statutes and legislative history." SCM Corporation v. United States International Trade Commission et al., 179 U.S.App.D.C. 110, 549 F.2d 812, 821 (1977).

Hence, the court of appeals reversed the judgment dismissing SCM's action for lack of subject matter jurisdiction, and remanded ...