Sioux Honey Ass'n v. Hartford Fire Ins. Co.

Decision Date07 February 2012
Docket NumberNo. 2011–1040.,2011–1040.
Citation33 ITRD 1929,672 F.3d 1041
PartiesSIOUX HONEY ASSOCIATION, Adee Honey Farms, Monterey Mushrooms, Inc., The Garlic Company, and Riceland Crawfish, Inc. (also known as Beaucoup Crawfish of Eunice, Inc.), Plaintiffs–Appellants, v. HARTFORD FIRE INSURANCE COMPANY, Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, and Hartford Insurance Company of the Southeast, Defendants–Appellees,andAegis Security Insurance Company and Lincoln General Insurance Company, Defendants–Appellees,andAmerican Contractors Indemnity Company, American Home Assurance Company, and XL Specialty Insurance Company, Defendants–Appellees,andGreat American Alliance Insurance Company, Great American Insurance Company, And Great American Insurance Company of New York, Defendants–Appellees,andInternational Fidelity Insurance Company, Defendant–Appellee,andWashington International Insurance Company, Defendant–Appellee,andUnited States, United States Customs and Border Protection, Jayson P. Ahern, Acting Customs Commissioner, Department of Commerce, and Gary Locke, Secretary of Commerce, Defendants–Appellees.
CourtU.S. Court of Appeals — Federal Circuit


Paul C. Rosenthal, Kelley Drye & Warren LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were Michael J. Coursey and John M. Herrmann. Of counsel on the brief were Will E. Leonard Jr. and John C. Steinberger, Adduci, Mastriani & Schaumberg, L.L.P., of Washington, DC.

Jonathan F. Cohn, Sidley Austin, LLP, of Washington, DC, argued for defendants-appellees The Hartford Fire Insurance Company et al. With Him on the brief were Peter D. Keisler, Neil R. Ellis, Lawrence R. Walders, Quin M. Sorenson and Ryan C. Morris. Of Counsel Was Arthur K. Purcell, Sandler, Travis & Rosenberg, P.A., of New York, NY.

Mary Kay Vyskocil, Simpson Thacher & Bartlett, LLP, of New York, NY, argued for remaining defendants-appellees with the exception of the United States, et al. With her on the brief for Washington International Insurance Company were Barry R. Ostrager and Michael J. Garvey. Of counsel on the brief was Gilbert Lee Sandler, Sandler, Travis & Rosenberg, P.A., of Miami, FL. On the brief for defendants-appellees American Contractors Indemnity Company, et al., were Mark F. Horning and Herbert C. Shelley, Steptoe & Johnson, LLP, of Washington, DC. Of counsel was Laura Rose Ardito. Of counsel on the brief for defendants-appellees American Alliance Insurance Company, et al., were Mark D. Plevin, Theodore R. Posner and Alexander H. Schaefer, Crowell & Moring, LLP, of Washington, DC. On the brief for defendants-appellees International Fidelity Insurance Company, et al., were Armen Shahinian and Adam P. Friedman, Wolff & Samson, PC, of West Orange, NJ. On the brief for defendants-appellees Aegis Security Insurance Company, et al., was T. Randolph Ferguson, Sandler, Travis & Rosenberg, P.A., of San Francisco, CA.L. Misha Preheim, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees United States, et al. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief were Jonathan M. Zielinski, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC; Albert T. Kundrat and Andrew G. Jones, Attorneys, Office of Assistant Chief Counsel, United States Customs and Border Protection, of Indianapolis, IN.

Before RADER, Chief Judge, LOURIE and PROST, Circuit Judges.

PROST, Circuit Judge.

Under federal trade law imported products are often assessed antidumping duties in an effort to prevent these products from undercutting the domestic market. The Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”), which has since been repealed, directed the government to distribute collected duties to domestic producers harmed by dumping. 19 U.S.C. § 1675c(a) (2000). In this case, Plaintiffs are domestic producers seeking distributions under the CDSOA. Plaintiffs also attempt to compel the assessment and collection of additional antidumping duties. The United States Court of International Trade dismissed all of Plaintiffs' claims at the motion to dismiss stage. See Sioux Honey Ass'n v. Hartford Fire Ins. Co., 700 F.Supp.2d 1330 (Ct. Int'l Trade 2010); Sioux Honey Ass'n v. United States, 722 F.Supp.2d 1342 (Ct. Int'l Trade 2010). We affirm-in-part and vacate-in-part. Additionally, we affirm the Court of International Trade's decision to deny Plaintiffs' motion for jurisdictional discovery.

I. Background
A. Antidumping Statutory Scheme

Dumping occurs when a foreign company sells a product in the United States at a lower price than what it sells that same product for in its home market. Such a product can be described as being sold below “fair value.” Dumping presents unfair competition concerns because foreign companies selling goods below fair value can undercut domestic producers selling those same goods at market prices. Congress attempted to offset the harmful effects of dumping by enacting the Tariff Act of 1930. This statute, in combination with other statutes and regulations, provides a complex framework for determining the extent to which an imported product is being dumped, and for calculating a duty rate that offsets the dumping.

Under the antidumping statutes, a domestic producer suspecting a foreign company of dumping can petition the Department of Commerce (Commerce) for an investigation of that foreign company's merchandise. Additionally, Commerce itself may initiate such an investigation. In an investigation, Commerce analyzes the prices of the imported goods and determines whether dumping occurred. 19 U.S.C. §§ 1671, 1673. The International Trade Commission (“ITC”) conducts a parallel investigation to determine whether an industry in the United States suffers injury from the imports at issue. Id. If the final determinations of Commerce and the ITC are affirmative (i.e., if they conclude that dumping and injury occurred), Commerce issues an antidumping order (“AD order”), which publishes duty rates for the investigated products. Id. §§ 1671e, 1673e. The duty rates calculated by Commerce throughout the antidumping investigation are called “deposit rates.”

The AD order also instructs United States Customs and Border Protection (Customs) to collect cash deposits for merchandise subject to the order when that merchandise enters the country. The values of these deposits are based on the duty rates published in the order. Technically speaking, the duty rates published in the AD order are not the final, assessed rates. Rather, as explained below, rates are finalized later in the process. Therefore, the cash deposits collected upon entry are considered estimates of the duties that the importer will ultimately have to pay as opposed to payments of the actual duties.

Each year after an AD order issues, an interested party can request that Commerce conduct an administrative review of the order. In this review, Commerce analyzes the actual merchandise imported throughout the previous year that is subject to the order. (In some administrative reviews, Commerce analyzes the merchandise imported over the previous year and a half.) This system, often described as a retroactive system, enables Commerce to calculate a final duty rate based on the actual imports themselves as opposed to information obtained before importation even began. The final anti-dumping duty rate obtained through the administrative review is called the liquidation rate. Commerce communicates this liquidation rate to Customs through “liquidation instructions,” and Customs then instructs its staff at each port to assess final duties on all relevant entries. If the deposit rate (i.e., the estimated rate calculated during the antidumping investigation) is higher than the final liquidation rate, then the importer overpaid and is entitled to a refund. If the deposit rate equals the liquidation rate, then the importer's previous deposit satisfies its duty obligation. Notably, if no administrative review is requested, the deposit rate is generally used to assess the final duty.

Additionally, the antidumping statutes permit accelerated review for companies that ship the same type of product covered by a previously-issued antidumping duty order, but where that shipping occurs outside of the timeframe encompassed by order's period of review. Such companies are often called “new shippers,” and this accelerated review program is called a “new shipper review.” If a new shipper does not participate in a new shipper review, its merchandise will likely be subject to a predetermined deposit rate that applies generally to companies whose products were never individually investigated. These predetermined rates are often higher than the individual rates obtained through an investigation.

Like importers participating in an initial antidumping investigation, new shippers participating in a new shipper review must post a deposit intended to reflect the value of the antidumping duties that will ultimately be owed. 19 U.S.C. § 1675(a)(2)(B)(iii). For over eleven years (January 1, 1995 through April 1, 2006), new shippers were allowed to satisfy this deposit requirement by having a surety post a Customs bond in lieu of cash (also referred to as a “new shipper bond”). Id. This bond posting process was (and still is) governed by contracts involving new shippers, sureties, and the government. These bond contracts are intertwined with the federal antidumping regime, as they incorporate numerous antidumping statutes and regulations by reference. In August 2006, however, Congress suspended the bonding option, thereby making cash deposits mandatory.


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