Seafood Exporters Ass'n of India v. U.S.
| Citation | 479 F.Supp.2d 1367 |
| Decision Date | 13 March 2007 |
| Docket Number | Court No. 05-00347.,Slip Op. 07-37. |
| Parties | SEAFOOD EXPORTERS ASSOCIATION OF INDIA, Gourmet Fusion Foods Inc., and International Creative Foods, Inc., Plaintiffs, v. UNITED STATES of America, Robert C. Bonner, Commissioner, United States Customs and Border Protection, and United States Customs and Border Protection, Defendants. |
| Court | U.S. Court of International Trade |
Kaye Scholer LLP, Washington, DC for plaintiffs.,
Peter D. Keisler, 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); Chi S. Choy, Attorney, Office of the Assistant Chief Counsel for International Trade Litigation, Bureau of Customs and Border Protection, United States Department of Homeland Security, of counsel, for defendants.
Plaintiffs Seafood Exporters Association of India ("SEAI"), Gourmet Fusion Foods Inc. ("GFF"), and International Creative Foods, Inc. ("ICF") (collectively "plaintiffs") challenge "Bond Directive 99-3510-004," as amended ("Bond Directive"), which was issued by the Bureau of Cus toms and. Border Protection ("Customs" or "CBP"). The Bond Directive, which was issued by Customs headquarters, requires the various Customs port directors throughout the United States to review the sufficiency of the limits of liability in continuous entry bonds ("continuous bonds") used by importers of agricultural and aquacultural merchandise that is subject to antidumping or countervailing duty orders, and to require importers to obtain larger bonds when necessary, according to a prescribed formula. Plaintiffs challenge as unlawful the Bond Directive and the application of the Bond Directive to the determinations by Customs of their individual bonding requirements. First Am. Compl. ¶ 13, 14, 19, 28. Plaintiffs contend that Customs lacks the statutory authority to require bonds as security for the payment of antidumping duties that are already secured by cash deposits, that the promulgation of the Bond Directive by Customs violated the Administrative Procedure Act ("APA"), and that the application of the Bond Directive to plaintiffs was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Id. ¶ 13, 24, 26, 28.
Defendants move to dismiss plaintiffs' first amended complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted, under USCIT Rules 12(b)(1) and 12(b)(5), respectively. Defs.' Mot. to Dismiss 1-2. With respect to subject matter jurisdiction, defendants argue that plaintiffs' claims do not address a final agency action and therefore are not ripe for judicial review. Id. at 9-12. Plaintiffs lack standing, according to defendants, because they fail to demonstrate that they are adversely affected by an agency action and that their interests are within the zone of interests protected under the statutes under which they bring their claim, 19 U.S.C. §§ 1623(a), 1673e(a)(3) (2000). Id. at 12-18.
The court concludes that plaintiffs' claims are ripe for review. The actions Customs took to apply the Bond Directive to plaintiffs are fit for judicial decision because of the consequences to plaintiffs' businesses that these actions are alleged to have caused and because of the hardship that would result from withholding court consideration of plaintiffs' claims.
The court concludes that plaintiffs have standing to bring this action. Plaintiffs GFF and ICF allege injury in fact from the increased collateral requirements, higher premium payments, and lost business opportunities that they attribute to the Bond Directive as applied to their businesses. First Am. Compl. 122; Pls.' Opp'n to Defs.' Mot. to Dismiss 4 ( ). The interests that these plaintiffs seek to protect are within the zone of interests protected by or regulated by 19 U.S.C. § 1623, under which Customs is authorized to require continuous bonds in amounts necessary to protect the revenue and ensure compliance with the tariff laws. First Am. Compl. ¶¶ 22, 24, 28; Pis.' Opp'n 14-18.
Plaintiff SEAI has met associational standing requirements, which require that at least one member of the association be able to sue in its own right, that the association seek to protect an interest central to its purpose, and that the relief sought not require individualized testimony by member plaintiffs. First Am. Compl. ¶ 1; Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 343-44, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). SEAI has demonstrated that some of its members would be able to sue in their own right by alleging that these members have incurred specific harm from the application of the Bond Directive to their import activities. First Am. Compl. ¶ 9. SEAI has pleaded that it seeks to protect interests that are central to its purpose as an association, including ensuring the ability of its members to import shrimp and remedying its members' injuries due to the Bond Directive. Id. ¶¶ 1, 9. Finally, the relief SEAI seeks, i.e., that the court declare the Bond Directive contrary to law and enjoin its continued application, does not include damages and would not necessarily require individualized testimony. Id. at 14.
There are no grounds to dismiss plaintiffs' complaint for failure to state a claim on which relief can be granted. Defendants offer no argument in support of such dismissal beyond the arguments it makes on standing, which are unavailing. Because plaintiffs' pleadings are sufficient to state a claim upon which relief can be granted and plaintiffs have demonstrated the ripeness of their claims for judicial review and standing to bring those claims, defendants' motion must be denied.
GFF and ICF are U.S. importers of seafood from India, including frozen warmwater shrimp. First Am. Compl. ¶ 1. SEAI is an association of some three hundred companies that export seafood from India, including frozen warmwater shrimp, or import Indian seafood into the United States. Id. ¶ 1 & Ex. 1 (). Defendants admit that at least seven SEAI members are importers of shrimp for which Customs deemed bonds insufficient. Defs.' Reply Br. in Supp. of Their Mot. to Dismiss 4 ( ); see First Am. Compl. ¶ 1 & Ex. 1.
Bond Directive 99-3510-004, originally issued by Customs as Directive 3510-04 on July 23, 1991, set forth guidelines under which port directors must assess the sufficiency of an importer's continuous bond. See Monetary Guidelines for Setting Bond Amounts, Customs Directive 3510-04 (July 23, 1991), available at http://cbp.gov/ linkhand ler/cgov/toolbox/legal/directives/3510-004.ctt/3510-004.txt. Prior to the amendment by Customs in 2004, the Bond Directive set a non-discretionary, minimum continuous bond amount at $50,000 and established a formula by which "the bond limit of liability amount shall be fixed in multiples of $10,000 [or $100,000] nearest to 10 percent of duties, taxes and fees paid by the importer or broker acting as importer of record during the calender year preceding the date of the [bond] application." Id. (provided at "Activity 1 — Importer or Broker — Continuous"). Whether the bond limit was fixed in multiples of $10,000 or $100,000 depended upon whether or not the importer's total duty and tax liability during the calender year preceding its bond application exceeded $1,000,000. Id.; see First Am. Compl. ¶ 12 n. 3.
Customs, on July 9, 2004, posted on its website the amendment to the Bond Directive that gave rise to this case (the "Amendment"). The Amendment required all Customs port directors "to review continuous bonds for importers who import agriculture/aquaculture merchandise subject to antidumping/countervailing duty cases and obtain larger bonds where necessary." See Amendment to Bond Directive 99-3510-004 for Certain Merchandise Subject to Antidumping/Countermiling Duty Cases (July 9, 2004), available at http://www.cbp.gov/xp/c gov/import/cargo_summary/bonds/07082004.xml ("Amendment"); see First Am. Compl. ¶ 14. The Amendment established new formulas for calculating minimum liability limits for these continuous bonds. Under the new formulas, the minimum liability limits were substantially higher than those required previously.1 The Amendment directed that "in fixing the limit of liability amount," port directors will calculate the product of an importer's antidumping or countervailing duty rate and the value of merchandise subject to antidumping or countervailing duties imported by that importer during the previous year. Amendment (setting forth the formula as the "[antidumping or countervailing duty] rate at Order [multiplied by the] value of imports of merchandise subject to the case by the importer during the previous year."). Thus, instead of a formula based generally on ten percent of the importer's total duties paid during the previous year, the new formula required a minimum bond set at 100 percent of the antidumping duties that would have been paid on the principal's imports during the previous year, had those imports been subject to the antidumping duty margin required by the order. The formula did not include in its calculation a reduction for cash deposits that would be made, as required under the antidumping laws, as security for future antidumping duty liability on entries made following the publication of an order. See 19 U.S.C. § 1673e(a)(3) ().
The Amendment also applied to preorder entries, i.e., entries subject to provisional antidumping,...
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