Skf Usa Inc. V. U.S.

• Citation: 451 F.Supp.2d 1355
• Decision Date: 12 September 2006
• Docket Number: Slip Op. 06-139.,Court No. 05-00542.
• Parties: SKF USA INC., Plaintiff, v. UNITED STATES OF AMERICA, United States Customs and Border Protection, Robert C. Bonner (Commissioner, United States Customs and Border Protection), United States International Trade Commission, and Stephen Koplan (Chairman, United States International Trade Commission), Defendants, and Timken U.S. Corporation, Defendant-Intervenor.
• Court: U.S. Court of International Trade

Page 1355

451 F.Supp.2d 1355

SKF USA INC., Plaintiff, v. UNITED STATES OF AMERICA, United States Customs and Border Protection, Robert C. Bonner (Commissioner, United States Customs and Border Protection), United States International Trade Commission, and Stephen Koplan (Chairman, United States International Trade Commission), Defendants, and Timken U.S. Corporation, Defendant-Intervenor.

Slip Op. 06-139.

Court No. 05-00542.

United States Court of International Trade.

September 12, 2006.

Steptoe & Johnson LLP, Washington, DC (Herbert C. Shelley, Alice A. Kipel, Susan R. Gihring and William G. Isasi) for SKF USA Inc., Plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Jeanne E. Davidson, Deputy Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (David S. Silverbrand); Charles Steuart, United States Bureau of Customs and Border Protection, for the United States, Defendant, of counsel.

James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel, Office of the General Counsel, Unites States International Trade Commission (David A.J. Goldfine) for the United States International Trade Commission and Stephen Koplan, Chairman, Defendant.

Stewart and Stewart, Washington, DC (Terence P. Stewart, Amy S. Dwyer and J. Daniel Stirk), for Timken U.S. Corporation, Defendant-Intervenor.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff, SKF USA Inc. ("SKF"), moves pursuant to USCIT R. 56.1 for summary judgment on the agency record challenging Defendants, the Bureau of Customs and Border Protection's ("Customs") and the International Trade Commission's ("ITC's") (collectively, the "Government's") determination that SKF is not an "affected domestic producer" under the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA") and thus not eligible to receive CDSOA distributions. SKF specifically challenges the constitutionality of the CDSOA on First Amendment, Due Process and Equal Protection grounds. The Government responds that the CDSOA is constitutional and that it correctly denied SKF "affected domestic producer" status. Defendant-Intervenor, Timken. U.S. Corporation ("Timken") also responds that the CDSOA is constitutional and that SKF is not entitled to any relief.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(i) (2000).

STANDARD OF REVIEW

In matters arising under 28 U.S.C. § 1581(i), the Court will review the matter as provided in 5 U.S.C. § 706. See 28 U.S.C. § 2640(e). Under the Administrative Procedures Act, i.e. Title 5 of the United States Code, the Court "shall .. . interpret constitutional and statutory provisions . .". 5 U.S.C. § 706. The Court reviews the constitutionality of a statute de novo. See Princess Cruises, Inc. v. United States, 201 F.3d 1352, 1357 (Fed.Cir. 2000).

Under a R. 56.1 motion for judgment upon the agency record, the Court is reviewing an agency's decision based on the facts in the administrative record. See USCIT R. 56.1. In addition, an agency's determination must be "in accordance with law." 5 U.S.C. § 706(2)(A). Finally, while persuasive and informative, the Court is not bound by decisions of parallel courts. See e.g., Corus Group PLC v. Bush, 26 CIT 937, 939 n. 4, 217 F.Supp.2d 1347, 1350 n. 4 (2002).

STATUTORY BACKGROUND

In 2000, Congress amended Title VII of the Tariff Act of 1930 by adding section 754, the CDSOA, commonly known as the Byrd Amendment. See Pub.L. No. 106-387, § 1001 et. seq., 114 Stat. 1549A-72 to 75 (2000), codified as 19 U.S.C. § 1675c (2000). Under the CDSOA, Customs collects duties pursuant to antidumping duty orders and places the monies in special accounts within the United States Treasury. See 19 U.S.C. § 1675c(e). Each antidumping duty order is given its own special account. See id. Customs then disburses the money to certain "affected domestic producers" who have submitted a certification attesting that they have incurred enumerated qualifying expenditures. See 19 U.S.C. § 1675c(b) & (d). The ITC determines which entities qualify as "affected domestic producers," as defined by the CDSOA, and forwards the list of eligible entities to Customs. See 19 U.S.C. § 1675c(d). An "affected domestic producer" is defined as

any manufacturer, producer, farmer, rancher, or worker representative ... that

(A) was a petitioner or interested party in support of the petition with respect to which an antidumping duty order, a finding under the Antidumping Act of 1921, or a countervailing duty order has been entered, and

(B) remains in operation.

19 U.S.C. § 1675c(b)(1). Disbursements are made on a yearly basis and the initial disbursements were made in 2001 based on all existing antidumping duty orders at that time. See 19 U.S.C. § 1675c(d)(3); 114 Stat. 1549A-75.

In 2006, Congress repealed the CDSOA, however, the repeal is not effective until October 1, 2007. See Deficit Reduction Act of 2005, Pub.L. No. 109-171, § 7601(b), 120 Stat. 4, 154 (2006). SKF is challenging the 2005 fiscal year CDSOA disbursements, thus, justiciable issues remain here.

FACTUAL BACKGROUND

The facts are undisputed and briefly included here. In 1988, Commerce initiated an antidumping investigation of antifriction bearings, other than tapered roller bearings and parts thereof, ("AFBs") from Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand and the United Kingdom. See Br. Supp. Pl. SKF USA Inc.'s R. 56.1 Mot. J. Upon Agency R. ("SKF's Br.") at 4; Def.'s Resp. Pl.'s Mot. J. Upon Agency R. ("Customs' Resp.") at 6. The ITC also launched material injury investigations. See id.; Customs' Resp. at 6. SKF was an interested party and a participant in both the original Commerce and ITC investigations and indicated that it opposed the petition in its questionnaire responses. See id. at 5; Customs' Resp. at 6. The ITC found material injury to the domestic industry, which SKF was a part of, by reason of imports from Japan. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom ("USITC Pub. No. 2185"), USITC Pub. No. 2185, Inv. Nos. 303-TA-19 & 20, 731-TA-391-399 (Final) (May 1989).¹ Commerce then determined that there were sales at less-than-fair value resulting in an antidumping duty order, which in relevant part remains in effect. See Antidumping Duty Orders for Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof From Japan, Inv. No. A-588-804, 54 Fed.Reg. 20,904 (Dep't Commerce May 15, 1989). Following the enactment of the CDSOA, the ITC provided Customs with a list of entities (i.e. manufacturer, producer, farmer, rancher, or worker representative) eligible as "affected domestic producers," on which SKF was not included. See Customs' Resp. at 7.

On April 20, 2005, the ITC denied SKF's request to amend its list of eligible domestic producers to obtain CDSOA distributions with respect to duties collected pursuant to the antidumping duty order covering USITC Pub. No. 2185. See SKF's Br. at Ex. 1 & 2. The ITC stated that it denied SKF's request because SKF had opposed the petition in its questionnaire response in the original investigation. See SKF's Br. at Ex. 2. On July 13, 2005, SKF then submitted a certification to Customs requesting CDSOA disbursements in the amount of $115,033,000 for qualifying expenditures incurred. See SKF's Br. at Ex. 3. Customs denied SKF's claim on July 15, 2005, stating that SKF was not on the ITC list of affected domestic producers. See SKF's Br. at Ex. 4. This action followed.

DISCUSSION

I. As Applied Here, the CDSOA Violates the Equal Protection Clause

A. Parties' Contentions

SKF argues that the CDSOA is unconstitutional because it violates the Equal Protection doctrine by discriminating between similarly situated domestic producers. See SKF's Br. at 12. Specifically, SKF states that the CDSOA creates separate classifications for domestic producers between those that expressed support for an antidumping petition and those that did not support or took no position. See id. at 12-13. Only domestic producers that supported a petition are then eligible for CDSOA disbursements. See id. SKF advances that there is no rational basis between the classification of eligible and ineligible domestic producers and a legitimate government objective. See id. at 13. Furthermore, the separate classifications are unreasonable and conflict with the purpose of the antidumping law. See id. at 13-15. In enacting the CDSOA, SKF argues that Congress amended the antidumping law, not to alter the overall purpose of the law, but to strengthen its remedial effect. See Reply Br. Supp. Pl. SKF USA Inc.'s R. 56.1 Mot. J. Upon Agency R. ("SKF's Reply") at 9. SKF states that the purpose of the antidumping law is to equalize trade and prevent injury to domestic industries. See SKF's Br. at 14. The antidumping law, however, is not intended to aid any individual company. See id. Therefore, SKF reasons that because the CDSOA benefits certain individual companies and not domestic industries as a whole, it is contrary to the overall statutory purpose. See id. at 15. The CDSOA also furthers no legitimate purpose in benefitting a mere subsection of a domestic industry, when the entire domestic industry is found to be injured by the ITC. See id. SKF argues that neither the plain language of the CDSOA nor the legislative history connects "injured domestic industries" with "petition supporting domestic companies." Id. at 17. Thus, SKF concludes that the CDSOA definition for "affected domestic producer" is discriminatory with no rational basis in support. See id. at 17-19. SKF also points out that petition-supporting producers are not the only companies that are injured domestic producers and that there is no basis in differentiating between injured domestic companies as being ...