Thyssenkrupp Mexinox S.A. De C.V. v. U.S.

• Citation: 616 F.Supp.2d 1376
• Decision Date: 13 May 2009
• Docket Number: Court No. 06-00236.,Slip Op. 09-41.
• Parties: THYSSENKRUPP MEXINOX S.A. de C.V., et al., Plaintiffs, v. UNITED STATES, et al., Defendants, and AK Steel Corporation, Allegheny Ludlum Corporation, North American Stainless, Defendant-Intervenors.
• Court: U.S. Court of International Trade

616 F.Supp.2d 1376

THYSSENKRUPP MEXINOX S.A. de C.V., et al., Plaintiffs, v. UNITED STATES, et al., Defendants, and AK Steel Corporation, Allegheny Ludlum Corporation, North American Stainless, Defendant-Intervenors.

Slip Op. 09-41.

Court No. 06-00236.

United States Court of International Trade.

May 13, 2009.

Hogan & Hartson LLP, Washington, DC (Lewis E. Leibowitz, Jonathan L. Abram, H. Christopher Bartolomucci, Helaine R. Perlman and Brian S. Janovitz), for the Plaintiffs.

Michael F. Hertz, Acting Assistant Attorney General; Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Michael J. Dierberg), for the Defendants.

Kelley Drye & Warren, LLP (Mary T. Staley, Daniel P. Lessard and David A. Hartquist), for the Defendant-Intervenors.

OPINION

POGUE, Judge.

This action involves the distribution to affected domestic producers, pursuant to the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA" or "Byrd Amendment"),¹ 19 U.S.C. § 1675c (2000), of antidumping ("AD") duties assessed and collected on imports of certain steel products from Mexico. In their complaint, Plaintiffs claim, correctly, that the Byrd Amendment may not be applied to AD duties on goods from Mexico.

Currently before the court is Plaintiffs' motion to amend that complaint to add (1) a new cause of action, for unjust enrichment, against the Defendant-Intervenors, Plaintiffs' domestic competitors, for receiving and retaining distributions under the Byrd Amendment of AD duties collected upon the entry into the U.S. of Plaintiffs' goods, and (2) a claim for injunctive relief requiring the Defendant-Intervenors to disgorge those illegally-received distributions.

As will be explained further below, because Plaintiffs' unjust enrichment action is duplicative of Plaintiffs' original complaint and unnecessary to the just resolution thereof, and because a provision in the American Recovery and Reinvestment Act of 2009, H.R. 1, Pub.L. No. 111-5, §§ 1-7002, 123 Stat. 115, 115-521 (2008) ("ARRA") has rendered moot Plaintiffs' request for additional injunctive relief, Plaintiffs' motion to amend is denied.²

I.

The court has previously concluded that the U.S. Customs and Border Protection ("Customs")³ interpretation of the Byrd Amendment—to permit distribution to affected domestic producers of AD duties collected on goods from NAFTA countries—is contrary to law. Canadian Lumber Trade Alliance v. United States, ___ CIT ___, ___, 425 F.Supp.2d 1321, 1373 (2006) ("CLTA I"), vacated in part on other grounds, 517 F.3d 1319 (Fed.Cir. 2008) ("CLTA II"), cert. denied, ___ U.S. ___, 129 S.Ct. 344, 172 L.Ed.2d 32 (2008). In CLTA I, the court held that the Byrd Amendment, read in conjunction with section 408 of the North American Free Trade Agreement ("NAFTA") Implementation Act, "states that [Byrd Amendment] distributions should be made from duties collected pursuant to antidumping and countervailing duty orders except for duty orders on goods from Canada or Mexico."⁴ CLTA I, 425 F.Supp.2d at 1372 (emphasis in original).

On appeal of CLTA I, the Federal Circuit affirmed in part and vacated in part. See CLTA II, 517 F.3d at 1344 (vacating the court's judgment on the agency record as to lumber and magnesium plaintiffs on grounds of mootness, but otherwise affirming the court's judgment, though on other grounds with regard to the government of Canada's standing to bring the lawsuit).

The case at bar constitutes the Mexican analog to CLTA I. Thyssenkrupp Mexinox S.A. de C.V. ("Thyssenkrupp"), a Mexican corporation, manufactures and exports stainless steel sheet and strip ("SSSS") products to the United States. Mexinox USA, Inc. ("Mexinox")⁵ imports, markets and distributes Thyssenkrupp's products into the U.S. Plaintiffs' steel products are subject to a July 27, 1999 antidumping duty order that is still in force. See Stainless Steel Sheet and Strip in Coils From Mexico, 64 Fed.Reg. 40,560 (Dep't Commerce July 27, 1999) (notice of amended final determination of sales at less than fair value and antidumping duty order) ("the antidumping duty order"). Up to and through October 1, 2007, Defendants United States, Customs and W. Ralph Basham, then-Commissioner of Customs⁶ (collectively, "the government") have collected AD duties on Plaintiffs' imports, and, pursuant to the Byrd Amendment, have paid a significant portion of the duties so collected to certain "affected domestic producers," see 19 U.S.C. § 1675c(a)-(b) (2000), which Plaintiffs allege include AK Steel Corp., Allegheny Ludlum Corp. and North American Stainless (collectively, "Defendant-Intervenors") and other of Plaintiffs' direct competitors.⁷ Plaintiffs further allege that, upon final liquidation of all pre-October 2007 imports, Customs will distribute the remainder of the AD duties so collected in accordance with the CDSOA.⁸

Plaintiffs' original complaint, filed in July 2006, requested declaratory relief. In addition, Plaintiffs' action sought a permanent injunction prohibiting future CDSOA disbursements of AD duties paid by Plaintiffs and directing Customs to reclaim certain improperly-disbursed funds, see infra, through the "disgorgement" or "claw back" provision contained in Customs' regulations implementing the CDSOA.⁹

On September 25, 2006, the court stayed this case until any appeals in CLTA I were resolved. The court also enjoined Customs from making any CDSOA payments "to the extent they derive from duties assessed pursuant to antidumping orders ... upon [SSSS] products from Mexico."¹⁰

After the February 25, 2008 decision of the Federal Circuit in CLTA II, the CLTA I defendant-intervenor petitioned for a writ of certiorari; the Supreme Court denied certiorari on October 6. See U.S. Steel Corp. v. Canadian Lumber Trade Alliance, ___ U.S. ___, 129 S.Ct. 344, 172 L.Ed.2d 32 (2008). By the terms of this court's September 25, 2006 order, as amended by its November 12, 2008 order, the stay in this matter has now been lifted but the preliminary injunction remains in force.¹¹

On November 11, 2008, Plaintiffs filed their current Motion for Leave to Amend Complaint. Plaintiffs' motion supplemented their original complaint, which sought disgorgement of "payments announced on December 17, 2004 and November 29, 2005 of AD duties that had been assessed on imports of [SSSS] products from Mexico" covered by the antidumping duty order. Pls.' Compl. 10. In their proposed amended complaint, Plaintiffs ask the court to order Defendant-Intervenors to "return to the United States, together with applicable interest" all CDSOA distributions of duties assessed under the antidumping order. Pls.' [Proposed] Amended Compl. ¶ 61. Furthermore, Plaintiffs introduce their newly-asserted cause of action for unjust enrichment, against Defendant-Intervenors, "under federal common law and applicable state common law." Id. ¶ 63.

Both the government and Defendant-Intervenors object to Plaintiffs' motion, claiming lack of jurisdiction and futility.

III.

Plaintiffs' original complaint contains causes of action seeking declaratory and permanent injunctive relief pursuant to 5 U.S.C. § 706.¹²

The court has jurisdiction over Plaintiffs' complaint pursuant to 28 U.S.C. § 1581(i).¹³ See CLTA I, 425 F.Supp.2d at 1332. With jurisdiction under section 1581(i) comes the power to fashion appropriate relief. See 28 U.S.C. §§ 1585, 2643. However, "a grant of jurisdiction over claims involving particular parties does not itself confer jurisdiction over additional claims by or against different parties." Finley v. United States, 490 U.S. 545, 556, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989). Plaintiffs' unjust enrichment cause of action, against Defendant-Intervenors, is not stated against the government; consequently, section 1581 cannot supply jurisdiction for this cause of action.¹⁴

Plaintiffs assert that the court has pendent and/or ancillary jurisdiction¹⁵ over the unjust enrichment cause of action because that action has a "close nexus" to Plaintiffs' causes of action against the government. See United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); see also Morris Costumes, Inc. v. United States, ___ CIT ___, ___, 465 F.Supp.2d 1345, 1350-51 (2006); Old Republic Ins., 14 CIT at 381-83, 741 F.Supp. at 1574-76; United States v. Mecca Export Corp., 10 CIT 644, 646-47, 647 F.Supp. 924, 926-27 (1986); Tabor, 9 CIT at 235-38, 608 F.Supp. at 660-64; United States v. Gold Mountain Coffee, Ltd., 8 CIT 247, 248-50, 597 F.Supp. 510, 513-15 (1984). This much of Plaintiffs' argument is correct.

At the same time, in order for a federal court to have pendent jurisdiction, the pendent claim must meet two conditions. The claim must not be one subject to the exclusive jurisdiction of another court, and:

the relationship between that claim and the state claim [must] permit[] the conclusion that the entire action before the court comprises but one constitutional "case." The federal claim must have substance sufficient to confer subject matter jurisdiction on the court. The state and federal claims must derive from a common nucleus of operative fact. But if, considered without regard to their federal or state character, a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal issues, there is power in federal courts to hear the whole.

Gibbs, 383 U.S. at 725, 86 S.Ct. 1130 (footnotes and internal citation omitted) (emphasis added). In other words, "the connection between the main proceedings and the pendent claim must be such that the exercise of pendent jurisdiction is `necessary to the just resolution of the main proceeding.'" Old Republic Ins., 14 CIT at 381, 741 F.Supp. at 1575 (quoting Tabor, 9 CIT at 237, 608 F.Supp. at 662).

Similarly, "the power to exercise ancillary jurisdiction also requires, inter...