Tembec, Inc. v. U.S.

• Decision Date: 13 October 2006
• Docket Number: Slip Op. 06-152. Court No. 05-00028.
• Citation: 461 F.Supp.2d 1355
• Parties: TEMBEC, INC., Plaintiff, and Government of Canada, Gouvernement du Quebec, Government of Ontario, Government of Alberta, Government of British Columbia, Canadian Lumber Trade Alliance, and Abitibi-Consolidated, Inc., Plaintiff-Intervenors, v. UNITED STATES, Defendant, and Coalition for Fair Lumber Imports Executive Committee, Defendant-Intervenor.
• Court: U.S. Court of International Trade

461 F.Supp.2d 1355

TEMBEC, INC., Plaintiff, and Government of Canada, Gouvernement du Quebec, Government of Ontario, Government of Alberta, Government of British Columbia, Canadian Lumber Trade Alliance, and Abitibi-Consolidated, Inc., Plaintiff-Intervenors, v. UNITED STATES, Defendant, and Coalition for Fair Lumber Imports Executive Committee, Defendant-Intervenor.

Slip Op. 06-152. Court No. 05-00028.

United States Court of International Trade.

October 13, 2006.

Baker & Hostetler, LLP (Elliot Jay Feldman, Bryan Jay Brown, John Burke, Robert Lewis LaFrankie), Washington, DC, for Plaintiff Tembec, Inc.

Arnold & Porter, LLP (Michael Tod Shor), Washington, DC, for Plaintiff-Intervenor Abitibi-Consolidated, Inc.

Steptoe & Johnson, LLP (Mark Astley Moran, Alice Alexandra Kipel, Sheldon E. Hochberg, Michael Thomas Gershberg), Washington, DC, for Plaintiff-Intervenor Canadian Lumber Trade Alliance Executive Committee.

Arent Fox Kintner Plotkin & Kahn, PLLC (Matthew J. Clark, Keith Richard Marino), Washington, DC, for Plaintiff-Intervenor Gouvernement du Quebec.

Hogan & Hartson, LLP (Mark S. McConnell, Craig Anderson Lewis, Harold Deen Kaplan, Jonathan Thomas Stoel), Washington, DC, for Plaintiff-Intervenor Government of Ontario.

Akin, Gump, Strauss, Hauer & Feld, LLP (Spencer Stewart Griffith, Bernd G. Janzen, Anne K. Cusick, Jason Alexander Park), Washington, DC, for Plaintiff-Intervenor Government of British Columbia.

Weil, Gotshal & Manges, LLP (M. Jean Anderson, Washington, DC, Amy Tross Dixon, Arlington, VA, Gregory Husisian, Jahna Hartwig, John Michael Ryan, J. Sloane Strickler, Washington, DC); Wilmer, Cutler, Pickering, Hale & Dorr, LLP (Randolph Daniel Moss), Washington, DC, for Plaintiff-Intervenor Government of Canada.

Arnold & Porter, LLP (Claire Elizabeth Reade), Washington, DC, for Plaintiff-Intervenor Government of Alberta.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; (Jeanne E. Davidson), Deputy Director; (Stephen Carl Tosini), Commercial Litigation Branch, Civil Division, United States Department of Justice; Dean Pinkert, Senior Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce; Theodore R. Posner, Associate General Counsel, Office of the United States Trade Representative for Defendant United States.

Dewey Ballantine, LLP (Kevin M. Dempsey, Alan William Wolff, Harry Lewis

Clark, David Adrian Bentley), Washington, DC, for Defendant-Intervenor Coalition for Fair Lumber Imports Executive Committee.

Before: Jane A. Restani, Chief Judge, Judith M. Barzilay & Richard K. Eaton, Judges.

PER CURIAM.

On July 21, 2006, the court issued its opinion in Tembec, Inc. v. United States, 30 CIT ___, 441 F.Supp.2d 1302 (2006) ("Tembec I"), in which it found invalid the action of the United States Trade Representative ("USTR") ordering the implementation¹ of a United States International Trade Commission ("ITC") affirmative threat of material injury determination arising from imports of Canadian softwood lumber into the United States. In that opinion, the court reserved decision on the remedy to be imposed, i.e., the extent to which cash deposits made on the importation of the Canadian merchandise must be refunded. This opinion addresses the remedy issue.

Plaintiff Tembec, ("Tembec"), Plaintiff-Intervenors Canadian Lumber Trade Alliance ("CLTA"), and the Governments of Canada² (collectively "Plaintiffs"); Defendant United States, and Defendant-Intervenor Coalition for Fair Lumber Imports Executive Committee ("CFLI") (collectively "Defendants"); and the court all agree that the deposits made on merchandise that entered the United States after the publication of the Timken notice³ must be refunded. In its analysis, the court now concludes that because liquidation is suspended for most of the entries made on or prior to the Timken notice, they are preserved for liquidation in accordance with the final decision of the North American Free Trade Agreement ("NAFTA") panel.⁴ The court, therefore, finds that the refund of the deposits on such entries is required as well. As we explained in Tembec I, the court has jurisdiction to grant this relief.

I. Background

The history of this case is set out in the court's opinion in Tembec I. What follows is as much of that history as is necessary here. On May 16, 2002, the ITC reached its amended final determination that the United States softwood lumber industry was threatened with material injury by reason of imports from Canada. See Softwood Lumber from Canada, Inv. Nos. 701-TA-414, 731-TA-928 (Final) USITC Pub. 3509 (May 2002). The United States Department of Commerce ("Commerce") implemented the ITC's determination by issuing the antidumping ("AD") and countervailing duty ("CVD") orders incorporating it. Those orders were effective upon publication in the Federal Register on May 22, 2002. See Certain Softwood Lumber Products from Canada, 67 Fed. Reg. 36,068 (Dep't Commerce May 22, 2002) (notice of amended final determination of sales at less than fair value and notice of antidumping order); Certain Softwood Lumber Products from Canada, 67 Fed.Reg. 36,070 (Dep't Commerce May 22, 2002) (notice of amended final affirmative countervailing duty determination and notice of countervailing duty order) (collectively "May 22, 2002 orders"). That publication served as notice to the Bureau of Customs and Border' Protection ("Customs") that it was henceforth to collect cash deposits for the subject merchandise equal to the amended weighted average AD margin⁵ and net subsidy rate.⁶ See Certain Softwood Lumber Products from Canada, 67 Fed.Reg. at 36,068; Certain Softwood Lumber Products from Canada, 67 Fed.Reg. at 36,070. The deposits largely remain in the United States treasury.⁷

The ITC's affirmative determination was appealed to a NAFTA panel pursuant to Article 1904 of the NAFTA. On September 10, 2004, at the direction of the panel, the ITC issued a negative threat of injury determination. See Softwood Lumber from Canada, Inv. Nos. 701-TA414, 731-TA-928 (Final) (Third Remand), USITC Pub. 3815, Views on Remand (Sept. 10, 2004) at 13-14. On October 12, 2004, the NAFTA panel affirmed the ITC's negative threat of injury determination, and the NAFTA Secretariat issued a Notice of Final Panel Action. See Certain Softwood Lumber Products from Canada, USA-CDA-2002-1904-07, Panel Decision (Oct. 12, 2004) ("final panel decision"). Commerce thereafter published the Timken notice, reflecting that the final panel decision was "not in harmony" with the ITC's original injury determination of May 2002 and suspending liquidation of the entries of the subject merchandise. See Certain Softwood Lumber Products from Canada, 69 Fed.Reg. 69,584, 69,585 (Dep't Commerce Nov. 30, 2004). The effective date of the Timken notice was November 4, 2004.⁸

Periodic reviews⁹ of the May 22, 2002 AD/CVD orders have been requested. The results of these reviews have been appealed to NAFTA panels or this Court.

II. Analysis

At issue is the disposition of the cash deposits made on or before the publication of the Timken notice. Specifically, the court must determine if 19 U.S.C. § 1516a(g)(5)(B) controls liquidation of the pre-Timken notice entries. Should that be the case, entries made on and before November 4, 2004 would be liquidated in accordance with the May 22, 2002 orders incorporating the May 16, 2002 ITC affirmative determination, rather than the subsequent negative determination upheld by the NAFTA panel. In other words, the court must determine whether the unfair trade laws: (1) require that entries made on or before November 4, 2004, the liquidation of which has been suspended, are to be liquidated in accordance with the May 22, 2002 affirmative unfair trade orders, even though those orders have been invalidated; or (2) call for the liquidation of all unliquidated entries in accordance with the ITC's Negative Remand Determination. See Certain Softwood Lumber Products from Canada, USA-CDA-2002-1904-07, Panel Decision (Oct. 12, 2004).

Review of AD/CVD determinations involving merchandise from free trade area countries,¹⁰ such as softwood lumber imported into the United States from Canada under NAFTA, is governed by 19 U.S.C. § 1516a(g). According to Defendants, where a NAFTA panel review of an ITC final determination is requested, § 1516a(g)(5)(B) controls the liquidation of merchandise subject to the panel's review:

In the case of a determination for which binational panel review is requested pursuant to article 1904 of the NAFTA or of the Agreement,[¹¹] entries of merchandise covered by such determination shall be liquidated in accordance with the determination of the administering authority [Commerce] or the Commission [ITC], if they are entered, or withdrawn from warehouse, for consumption on or before the date of publication in the Federal Register by the administering authority of notice [the Timken notice] of a final decision of a binational panel, or of an extraordinary challenge committee, not in harmony with that determination.

19 U.S.C. § 1516a(g)(5)(B). Defendants maintain that despite the ITC's ultimate determination that there was no injury or threat of injury, Plaintiffs are not entitled to refunds of AD/CVD deposits made on merchandise entered on or before November 4, 2004. See Def.'s Mem. 35; Def.-Int.'s Reply 46. Defendants base this argument primarily on what they insist is the plain meaning of § 1516a(g)(5)(B) that the pre-Timken notice entries must be liquidated "in accordance with the [original] determination of the ... Commission." See Def.'s Reply 42 (characterizing the rule in § 1516a(g)(5)(B) as "the unambiguous text of the controlling statute"); see also Def.-Int.'s Reply 46.

We agree with Defendants that, were § 1516(a)(g)(5)(B) to control, entries made on or before the date of publication of the Timken notice would be liquidated in accordance with the order incorporating the ITC's...