Sonco Steel Tube Div., Ferrum, Inc. v. US

• Decision Date: 25 October 1988
• Docket Number: Court No. 86-07-00899.
• Citation: 12 CIT 990,698 F. Supp. 927
• Parties: SONCO STEEL TUBE DIV., FERRUM, INC., Plaintiff, v. The UNITED STATES, Defendant, and Lone Star Steel Co., Defendant-Intervenor.
• Court: U.S. Court of International Trade

698 F. Supp. 927

12 CIT 990

SONCO STEEL TUBE DIV., FERRUM, INC., Plaintiff, v. The UNITED STATES, Defendant and Lone Star Steel Co., Defendant-Intervenor.

Court No. 86-07-00899.

United States Court of International Trade.

October 25, 1988.

Dow, Lohnes & Albertson, William Silverman, Carrie A. Simon and Ryan Trainer, Washington, D.C., for plaintiff.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Platte B. Moring, III, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for defendant.

Dewey, Ballantine, Bushby, Palmer & Wood, Michael H. Stein, Washington, D.C., for defendant-intervenor.

OPINION AND ORDER

RESTANI, Judge:

This matter is before the court on plaintiff's motion for an injunction of liquidation pursuant to 19 U.S.C. § 1516a(c) (1982). The original Department of Commerce, International Trade Administration (ITA) antidumping determination which underlies this action is the same determination underlying Ipsco, Inc. v. United States, 12 CIT ___, 692 F.Supp. 1368 (1988) (Ipsco) in which the court granted an injunction of liquidation in similar, but not identical, circumstances.

The United States continues to adhere to its chief objection, that is, that this court has no jurisdiction to grant an injunction of liquidation in a suit challenging a final ITA determination.¹ That position was rejected in Oki Electric Indus. Co. v. United States, 11 CIT ___, 669 F.Supp. 480 (1987) (Oki) and in Ipsco and it is rejected here. The government summarizes its position as follows:

Since Congress has established separate reviews for different phases of an antidumping or countervailing duty proceeding, a challenge to a determination issued during one phase does not give rise to a course of action regarding another phase of the administrative proceeding.

Defendant's Supp. Brief at 4.

The position is untenable. As indicated in Ipsco, nothing in 19 U.S.C. § 1516a(c) limits the ability of litigants to obtain injunctive relief to annual review cases only. In fact, section 1516a(c)(2) specifically addresses both ITA and International Trade Commission (ITC) determinations, the effects of which pervade all aspects of unfair trade cases. Generally, without a valid affirmative ITC injury determination, annual reviews are not proper because any order imposing duties to offset unfair trade practices would be invalid. Similarly, if ITA does not make a valid affirmative determination, a party should not be subjected to any duties or annual reviews. It is impossible to totally separate the effects of an original determination from subsequent events, as defendant would wish. An annual review does not have independent existence, it requires a valid underlying order.² Furthermore, an injunction of liquidation in a case where there is no annual review cannot possibly be construed as "a course of action regarding another phase of the administrative proceeding." There is no other phase.

The government also contends that no injunction should issue because the language of section 1516a

presupposes that the determination in question is one which by statute would result in liquidation unless this Court issues an injunction. Thus, Congress only intended section 1516a(c) to apply to those determinations enumerated in section 1516a(a) which would have as a consequence the liquidation of the entries covered by the particular determination. Since a final determination only sets an estimated duty deposit rate, and not an assessment or liquidation rate, section 1516a(c) does not grant this Court the authority to enjoin liquidation in a case challenging a final affirmative determination.

Id. at 5 (emphasis in original).

This position is also untenable. When Congress amended the law in 1984 to make annual reviews optional³ it also authorized the government to promulgate regulations allowing for liquidation in accordance with the original determination. The regulation which purportedly accomplished this is 19 C.F.R. § 353.53a(d) (1987). It is liquidation in accordance with the original determination that is sought to be enjoined, not liquidation in accordance with a later proceeding. Assuming, arguendo, that it was improper before 1984 to enjoin liquidation in connection with a challenge to an original ITA determination, it is not forbidden after 1984 in a case where no annual review determination will govern the liquidation of entries. See Oki and Ipsco.

Many of defendant's arguments against injunction purportedly demonstrate that the public interest of proper enforcement of the statutory scheme warrants denial of the injunction. Although it is very difficult to reconcile the various provisions of the antidumping law, particularly 19 U.S.C. § 1516a(c), with the 1984 amendment, the court must do so in order to interpret the statutory scheme properly, unless a legislative change occurs. Furthermore, ITA's regulation, 19 C.F.R. § 353.53a(d), must also be applied, unless it is in conflict with the statute. If properly interpreted, the regulation can be applied in a manner which is in harmony with the statute.

Analysis starts with the basic provision of 19 U.S.C. § 1516a(c)(1) which indicates that liquidation of entries made prior to publication of notice of a contrary court decision is to be in accordance with the challenged agency determination. The provision contains an exception to this rule —in the case of a court ordered injunction of liquidation, as is sought here. In the event of an injunction of liquidation by the court, liquidation is to be in accordance with the court's final decision for any unliquidated entries. 19 U.S.C. § 1516a(e). The 1984 amendment did not abolish the ability of a party to obtain the type of injunction referred to in section 1516a(c)(2), thus any regulation issued pursuant to the 1984 amendment cannot abolish a party's access to such injunctive relief.⁴ The statutory scheme permits injunction of liquidation in whichever manner liquidation is to occur, that is, as a result of a review or otherwise. Injunction, therefore, is not contrary to the regulation describing a procedure for liquidation.

It is important to discuss some fact patterns which are not at issue here, in order to comprehend the flaws in defendant's approach, as well as the anomalies created by the 1984 amendment. In presenting its case, defendant describes, inter alia, its view of the operation of the statutory scheme if no injunction is entered. Of particular note is the following statement:

If the Court's decision with regard to the final determination is not issued prior to the completion of the requested administrative review (and there is no likelihood that the decision will result in the revocation of the order), the case challenging the final determination becomes moot. Since the final results of the administrative review govern liquidation, there no longer exists a "case or controversy" with respect to the estimated deposit rate established by the final determination. See PPG v. United States, 11 CIT ____, 660 F.Supp. 965 (1987).

Defendant's Supp. Brief at 8.⁵

This statement is interesting because it acknowledges that a case that may result in revocation is not mooted by a subsequent review, but it is difficult to comprehend why a "likelihood" of revocation as a result of the court's decision is the standard. Mootness involves the issue of whether a controversy exists. If a party claims he is entitled to "revocation," the controversy is not mooted; it must be finally resolved. Even accepting much of defendant's argument, it seems clear that a case such as Sonco's, which seeks among other things total elimination from the antidumping duty order, would not be mooted by a subsequent annual review determination finding some margin or by the setting of a margin based on the final determination. Apparently, there is agreement that where requested annual reviews have not been completed before a court decision finding an affirmative antidumping determination invalid there is no basis for liquidation with antidumping duties. Therefore, a court order totally invalidating an ITA original determination, which order occurs in the midst of an annual review, will result in the suspended entries being liquidated with no antidumping duties, even without an injunction and even though they were entered prior to the court's decision.

In this case, Sonco filed no administrative review. It sought exclusion from the order (or "revocation" as to itself) and whatever lesser relief it could obtain by means of a challenge to ITA's original determination. As a result of the 1984 amendment and ITA's regulation, suspension has been terminated and liquidation will occur immediately unless injunction is issued under 19 U.S.C. § 1516a(c)(2). It is injunction of such liquidation which Sonco seeks, and it is injunction which will preserve the status quo, just as administrative suspension does upon request for an annual review.

The court is very concerned that the status quo be preserved pending resolution of this matter.⁶ This was an important concern of the Court of Appeals in Zenith Radio Corp. v. United States, 710 F.2d 806 (Fed.Cir.1983), where it reversed an order of this court denying an injunction of liquidation in the context of an annual review case.

Injunctions under 19 U.S.C. § 1516a(c) do more than preserve the status quo simply to allow harm to occur when litigation is complete. They preserve the status quo for the purpose of assuring that duties are assessed in accordance with law as it is finally determined to be. Had the 1984 amendments not occurred, liquidation as to each year's entries would be automatically suspended until completion of the relevant annual review. Given the time necessary to complete reviews, the parties often had several years to resolve disputes about ITC and ITA affirmative original determinations before liquidation of any entries was ordered. With the 1984 amendment,...