Shree Rama Enterprises v. U.S.

• Decision Date: 07 November 1997
• Docket Number: Court No. 97-07-01099.,Slip Op. 97-148.
• Citation: 983 F.Supp. 192
• Parties: SHREE RAMA ENTERPRISES, Calcutta Ferrous Ltd., Siko Exports, Kajaria Iron Castings Pvt. Ltd., Crescent Foundry Co. Pvt. Ltd., Dinesh Brothers, Kejriwal Iron & Steel Works, R.B. Agarwalla & Co., Rsi Ltd., and Serampore Indus. Pvt. Ltd., Plaintiffs, v. UNITED STATES, Defendants, Alhambra Foundry, Inc., Allegheny Foundry Co., Bingham & Taylor Div., Virginia Indus., Inc., Charlotte Pipe & Foundry Co., East Jordan Iron Works, Inc., Lebaron Foundry, Inc., Municipal Castings, Inc., Neenah Foundry Co., Opelika Foundry Co., Inc., Tyler Pipe Indus., Inc., U.S. Foundry & Mfg. Co., and Vulcan Foundry, Inc., Defendants-Intervenors.
• Court: U.S. Court of International Trade

983 F.Supp. 192

SHREE RAMA ENTERPRISES, Calcutta Ferrous Ltd., Siko Exports, Kajaria Iron Castings Pvt. Ltd., Crescent Foundry Co. Pvt. Ltd., Dinesh Brothers, Kejriwal Iron & Steel Works, R.B. Agarwalla & Co., Rsi Ltd., and Serampore Indus. Pvt. Ltd., Plaintiffs, v. UNITED STATES, Defendants Alhambra Foundry, Inc., Allegheny Foundry Co., Bingham & Taylor Div., Virginia Indus., Inc., Charlotte Pipe & Foundry Co., East Jordan Iron Works, Inc., Lebaron Foundry, Inc., Municipal Castings, Inc., Neenah Foundry Co., Opelika Foundry Co., Inc., Tyler Pipe Indus., Inc., U.S. Foundry & Mfg. Co., and Vulcan Foundry, Inc., Defendants-Intervenors.

Slip Op. 97-148.

Court No. 97-07-01099.

United States Court of International Trade.

November 7, 1997.

Cameron & Hornbostel (Dennis James, Jr.), Washington, DC, for plaintiffs.

Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Lucius B. Lau) and Robert E. Nielsen, Senior Attorney, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

Collier, Shannon, Rill & Scott (Mary T. Staley), Washington, DC, for defendant-intervenor.

MEMORANDUM OPINION

DiCARLO, Senior Judge.

Plaintiffs have moved for a preliminary injunction to prevent the collection of countervailing duty deposits at the new company-specific rates published in Certain Iron-Metal Castings from India, 62 Fed.Reg. 32,297 (Dep't Commerce 1997) (final admin. review) [hereinafter Final Determination]. Plaintiffs are asking the court to preserve the former country-wide rate of 5.13% pending judicial review of the Final Determination. Because plaintiffs have not demonstrated that they will be irreparably harmed by the new deposit rates, their motion is denied.

BACKGROUND

Until passage of the Uruguay Round Agreements Act of 1994, Commerce routinely set a single country-wide countervailing duty rate, although it could, and often did, assign individual rates to particular exporters. 19 U.S.C. § 1671e(a)(2) (1988); see, e.g., Certain Iron Metal Castings from India, 60 Fed. Reg. 44,849 (Dep't Commerce 1995) (final admin. review). The 1994 Act reversed this practice, creating a general rule in favor of individual company-specific rates. Cf. 19 U.S.C. §§ 1671d(c), 1677f-1(e) (1994) with 19 U.S.C. §§ 1671d(c)(1), 1671e(a)(2) (1988). Although individual rates are not a new invention, plaintiffs argue that this change has created a "new dynamic in the import marketplace[,]" and that the deposit rate has become a determining factor in U.S. importers' purchasing decisions. (Pls.' Br. at 3.) This dynamic is nothing new. Foreign producers have always competed with fellow exporters assigned significantly lower individual deposit rates. Nevertheless, plaintiffs claim that as a result of the change in the law they are threatened with the immediate loss of long-standing customers to other Indian producers with lower deposit rates.

DISCUSSION

I.

As a preliminary matter, the court finds that it has the authority to rule on the plaintiffs' motion. The court has jurisdiction under 28 U.S.C. § 1581 (1994). It is unnecessary to specify whether § 1581(c) or § 1581(i) applies, as the court is not granting the requested relief. See Shakeproof Indus. Products Div. of Illinois Tool Works, Inc. v. United States, 104 F.3d 1309, 1313-14 (Fed. Cir.1997); Hylsa, S.A. de C.V. v. United States, 21 CIT ___, ___, 960 F.Supp. 320, 324-25 (citing Shakeproof Indus. Products), appeal dismissed, 113 F.3d 1255 (Fed.Cir. 1997). In exercising that jurisdiction, the Court of International Trade possesses "all the powers in law and equity of ... a district court of the United States." 28 U.S.C. § 1585 (1994). These include "broad injunctive powers." NTN Bearing Corp. of America v. United States, 892 F.2d 1004, 1006 (Fed.Cir.1989); 28 U.S.C. § 2643(c)(1) (1994).

Defendant claims that this court has no jurisdiction over the administrative handling of entries before a final court decision, except to temporarily suspend liquidation of duties. The argument relies on NTN, which vacated an injunction ordering a refund and forbidding further collection of estimated dumping duties after a partial summary judgment. Id. Under NTN, the court may not order liquidation at a rate other than that set in the challenged determination until after a final court decision, although it may suspend liquidation pending judicial review. Id. at 1006 (citing 19 U.S.C. § 1516a(c)(2), 1516a(e) (1988)).

NTN does not limit this court's jurisdiction. Its holding affects the timing of liquidation, not the court's power to issue injunctions in appropriate circumstances. There have been post-NTN cases in which the court has considered motions to enjoin collection of cash deposits. In all instances, the court has found jurisdiction to consider the motion. Queen's Flowers de Colombia v. United States, 20 CIT ___, 947 F.Supp. 503 (1996) (motion granted); Companhia Brasileira Carbureto de Calcio v. United States, 18 CIT 215 (1994) (citing NTN but finding it did not prohibit extraordinary injunctive relief) (motion denied); Chilean Nitrate Corp. v. United States, 11 CIT 538 (1987) (motion denied). There is no reason to reach a different conclusion here. Given the court's broad authority, the "former significance [of a specific provision for suspending liquidation] cannot be limiting.... [I]t represents simply a particularization of relief available in one important phase of judicial review." Krupp Stahl AG v. United States, 4 CIT 244, 246, 553 F.Supp. 394, 396 (1982). "[E]xclusions to the Court's powers are directly and unambiguously stated in 28 U.S.C. § 2643(c)(1)." Id. This court retains all powers of a district court not specifically excluded there.

II.

While the court has the power to enjoin collection of deposits at the new rates, plaintiffs have not established that they are entitled to injunctive relief. To obtain a preliminary injunction, petitioners must show: 1) that they will be "immediately and irreparably injured," 2) that there is a "likelihood of success on the merits," 3) that the relief requested is in the public interest, and 4) that the "balance of hardship on all parties favors the petitioner." Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (Fed.Cir. 1983). If plaintiffs fail to prove any one of these factors, their motion will fail.

Plaintiffs have not shown that they are threatened with immediate and irreparable injury. Irreparable harm is serious harm that cannot be undone. Id. (citing S.J. Stile Assoc. Ltd. v. Snyder, 68 C.C.P.A. 27, 646 F.2d 522, 525 (C.C.P.A.1981)). In evaluating that harm, the court must consider "the magnitude of the injury, the immediacy of the injury, and the inadequacy of future corrective relief." Queen's Flowers, 20 CIT at ___, 947 F.Supp. at 506. It is not enough to establish "a mere possibility of injury, even where prospective injury is great. A presently existing, actual threat must be shown." Zenith, 710 F.2d at 809.

Plaintiffs' allegation of irreparable harm is identical to the claim raised in Chilean Nitrate, which alleged "significant and permanent monetary injury as a consequence of posting large cash deposits[.]" Chilean Nitrate, 11 CIT at 540. In support of their claim, six of the eight plaintiffs submitted affidavits describing the anticipated effect of increased deposit rates. According to the affidavits, the new rates will affect between 59 and 81 percent of plaintiffs' sales revenues. The affidavits include customer letters and descriptions of conversations with customers in which the customers state that they have switched or will switch suppliers rather than pay the higher deposit rate. Plaintiffs believe that if customers do so, several exporters will be eliminated from the U.S. market for both subject and nonsubject castings.

Plaintiffs' proof is insufficient. While the court need not create a bright-line rule defining the level of harm that would merit an injunction, it is safe to say that the threshold is high and will be very difficult to cross. In Queen's Flowers, petitioners showed that higher deposit rates threatened them with "immediate economic extinction." Queen's Flowers, 20 CIT at ___, 947 F.Supp. at 507. Here, plaintiffs' affidavits do not even contend that they are in danger of bankruptcy. Furthermore, even if they did claim a threat of extinction, affidavits submitted by interested parties are weak evidence, unlikely to justify a preliminary injunction. Plaintiffs submitted no evidence from independent sources, and produced no witnesses available for cross-examination at the preliminary injunction hearing. "No marketing studies, written financial data or other hard evidence of the serious permanent harm which would result from denial of the injunction was presented." Chilean Nitrate, 11 CIT at 541. If the court were to grant plaintiffs' motion on so little documentary evidence, it would essentially be holding that any substantial increase in deposit rates before a final court decision constitutes irreparable harm per se. Future petitioners would be able to forestall the application of new deposit rates in many, if not most, antidumping or countervailing duty determinations contested in court.

A similar debate originally surrounded injunctions suspending liquidation. In Zenith Radio Corp., this court denied a motion to suspend liquidation, holding that liquidation prior to a final court decision is not "irreparable harm per se" and that preliminary injunctions "should not be routinely granted." Zenith Radio Corp. v. United States, 4 CIT 217, 218-19, 553 F.Supp. 1052, 1053-54 (1982), rev'd, 710 F.2d 806 (Fed.Cir.1983). The Federal Circuit reversed, declaring that "the consequences of liquidation do constitute irreparable injury[,]" as liquidation would "eliminate the only remedy available to [petitioners] for an incorrect review...