Trustees in Bankr. of N.A. Rubber Thread v. U.S.

• Decision Date: 01 February 2010
• Docket Number: No. 2009-1191.,2009-1191.
• Citation: 593 F.3d 1346
• Parties: TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC., Plaintiff, and Filmax Sdn. Bhd., Heveafil USA Inc., and Heveafil Sdn. Bhd., Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

593 F.3d 1346

TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC., Plaintiff, and Filmax Sdn. Bhd., Heveafil USA Inc., and Heveafil Sdn. Bhd., Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant.

No. 2009-1191.

United States Court of Appeals, Federal Circuit.

February 1, 2010.

Jay C. Campbell, White & Case LLP, of Washington, DC, argued for plaintiffs-appellees. With him on the brief was Walter J. Spak.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant. With her on the brief were Michael F. Hertz, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Stephen C. Tosini, Trial Attorney.

Before MICHEL, Chief Judge, FRIEDMAN and GAJARSA, Circuit Judges.

Opinion for the court filed by Chief Juudge MICHEL. Dissenting opinion filed by Circuit Judge GAJARSA.

MICHEL, Chief Judge.

The Department of Commerce (Commerce) entered an antidumping duty order in 1992 covering extruded rubber thread from Malaysia. In 2004, the foreign industry (Heveafil) asked Commerce to conduct a changed circumstances review, arguing that the duty order should be revoked with the revocation effective October 1, 1995, because the domestic industry (North American Rubber Thread) had declared bankruptcy and ceased operations. The Trustees in Bankruptcy of North American Rubber Thread (NART) agreed that circumstances had changed and the duty order should be revoked, but they argued during the changed circumstances review that the effective date of October 1, 1995, was incorrect, and the revocation should be effective only as of October 1, 2003. Commerce conducted the changed circumstances review and agreed with NART. As such, the duty order was revoked effective October 1, 2003.

In 2005, NART and Heveafil asked Commerce to conduct a second changed circumstances review, arguing that, because NART had changed its mind about the proper effective date, the duty order should be re-revoked effective October 1, 1995, instead of October 1, 2003. Commerce declined to undertake the second changed circumstances review, holding that, because the order had already been revoked, there was no longer an order that could be reviewed. In the Court of International Trade (CIT), NART and Heveafil challenged Commerce's refusal to conduct the second changed circumstances review, but the United States opposed the CIT litigation on two grounds. First, the United States argued that the CIT did not have jurisdiction to hear NART's or Heveafil's challenge to Commerce's refusal to conduct a changed circumstances review. Second, the United States argued that NART was judicially estopped from offering an argument in the CIT contrary to the argument it offered at Commerce during the first changed circumstances review. The CIT found that it had jurisdiction over the challenges under 28 U.S.C. § 1581(i)(4) and that NART was not precluded by the doctrine of judicial estoppel from bringing its challenge. Because we find that the CIT had jurisdiction over NART's challenge but not Heveafil's challenge, and because we find that NART was judicially estopped from challenging the October 1, 1995 effective date, we affirm in part, reverse in part, and vacate in part.

I. BACKGROUND

Commerce administers the antidumping duty law, under which the United States imposes duties on imports of merchandise sold below its fair value. In order for duties to be imposed on imported merchandise, an antidumping duty order relating to that merchandise must first be entered. After entry of an antidumping duty order, Commerce can—at the request of any party affected by the order—undertake a "changed circumstances" review of the order. 19 U.S.C. § 1675(b)(1). This review can result in the revocation of the order as of an effective date that is determined by Commerce. 19 U.S.C. § 1675(d).

Here, in 1992, Commerce entered an antidumping duty order covering extruded rubber thread from Malaysia. Extruded Rubber Thread from Malaysia, 57 Fed. Reg. 46,150 (Oct. 7, 1992). In 2004, Heveafil, as a foreign producer whose merchandise was subject to the duty order, asked Commerce to conduct a changed circumstances review of the order, arguing that North American Rubber Thread, the sole domestic producer of rubber thread, had filed for bankruptcy and ceased operations, warranting revocation of the antidumping duty order. Heveafil asked for the order to be revoked retroactive to October 1, 1995, because this would cover all unliquidated entries still controlled by Customs and Border Protection. During the 2004 changed circumstances review, NART (the successor-in-interest to North American Rubber Thread) argued against Heveafil, agreeing with Heveafil that the order should be revoked, but urging Commerce to make the effective date of the revocation October 1, 2003, covering only the unliquidated entries that had not yet been the subject of an annual administrative review of the order. NART contends that it was in its best interest to argue in 2004 that the effective date of the revocation should be 2003. Commerce agreed with NART and revoked the order retroactive only to October 1, 2003.

Heveafil brought an action in the CIT under 28 U.S.C. § 1581(c), challenging the effective date of the revocation. That action is not at issue in this appeal, but it remains pending and is stayed awaiting resolution of this case. During the pendency of that action, though, Heveafil and NART reached a settlement agreement resolving their dispute over the antidumping duty order. As a result of the settlement agreement, NART believed it was in its best interest to argue that the order should have been revoked with an effective date of 1995.

Thus, despite NART's argument against the October 1, 1995 revocation date in the 2004 changed circumstances review, and despite NART's having prevailed on this issue, NART asked Commerce in 2005 to conduct a second changed circumstances review, now urging Commerce to re-revoke the antidumping duty order effective October 1, 1995. NART argued that its failure to possess any interest in the enforcement or existence of the order after October 1, 1995, warranted revocation of the order as of that date. On June 15, 2005, Commerce notified NART that it was refusing to initiate the second changed circumstances review, arguing that it was unable to revoke "an order to cover entries subject to a completed administrative review." Trs. in Bankr.of N. Am. Rubber Thread Co., Inc. v. United States, 30 C.I.T. 1537, 464 F.Supp.2d 1350, 1353 (2006) ("NART I").

Both Heveafil and NART challenged Commerce's refusal to initiate the second changed circumstances review. They invoked the CIT's residual jurisdiction statute, 28 U.S.C. § 1581(i)(4), which grants the CIT jurisdiction over suits against the United States arising out of administration and enforcement of the laws relating to duties on imported merchandise. The United States brought a motion to dismiss for lack of jurisdiction, arguing that § 1581(i) was unavailable. The CIT denied the government's motion to dismiss. Id. at 1364. The CIT held first that NART's change of heart as to the proper effective date for revocation of the order should not bar NART's new argument, even in light of its successful earlier argument to the contrary. Id. at 1357. The CIT next held that, although no other portion of 28 U.S.C. § 1581 provided jurisdiction, subject-matter jurisdiction over NART's and Heveafil's claims was available under 28 U.S.C. § 1581(i)(4). Id. at 1354-58. The CIT also considered and rejected the government's argument that a 1984 amendment to 19 U.S.C. § 1516a precluded the CIT from exercising jurisdiction over refusals by Commerce to initiate changed circumstances reviews. Id. at 1358-64. On appeal to this court, the government contests each of these holdings.

After the decision in NART I, the CIT considered the merits of the challenge to Commerce's decision not to conduct the second changed circumstances review and remanded to Commerce for an explanation of why Commerce's decision did not constitute a departure from its normal practice of initiating changed circumstances reviews whenever the domestic industry expressed no interest in the continuation of an antidumping duty order. Trs. in Bankr.of N. Am. Rubber Thread Co., Inc. v. United States, 533 F.Supp.2d 1290 (Ct. Int'l Trade 2007) ("NART II"). On remand, Commerce once again refused to conduct the changed circumstances review, attempting to distinguish the earlier "standard practice" reviews cited by the CIT. The CIT rejected these remand results, ordering the second changed circumstances review to proceed. Trs. in Bankr.of N. Am. Rubber Thread Co., Inc. v. United States, 558 F.Supp.2d 1367 (Ct. Int'l Trade Jun. 10, 2008) ("NART III"). This appeal followed, with the United States appealing only the jurisdictional and judicial estoppel issues decided in NART I, not the merits issues decided in NART II or NART III.

II. DISCUSSION

As with other questions of law, we review the CIT's jurisdictional rulings without deference. JCM, Ltd. v. United States, 210 F.3d 1357, 1359 (Fed.Cir.2000). We review the CIT's decision not to apply the judicial estoppel doctrine for abuse of discretion. Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed.Cir.1996).

Taking first the question of jurisdiction over Heveafil's claim, the CIT exercised subject-matter jurisdiction under 28 U.S.C. § 1581(i)(4), the residual jurisdiction portion of 28 U.S.C. § 1581, which provides in relevant part that

the Court of International Trade shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for—

. . . .

(2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;

. . . .

(4)...