Viet. Finewood Co. Ltd. v. United States

Citation466 F.Supp.3d 1273
Decision Date31 July 2020
Docket NumberSlip Op. 20-106,Court No. 19-00218
Parties VIETNAM FINEWOOD COMPANY LIMITED, et al., Plaintiffs, and Liberty Woods International, Inc., Plaintiff-Intervenor, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Gregory S. Menegaz, J. Kevin Hogan, and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, for Plaintiffs Vietnam Finewood Company Limited, Far East American, Inc., and Interglobal Forest LLC.

Ellen M. Murphy, Orrick, Herrington & Sutcliffe LLP, of New York, NY, for Plaintiff-Intervenor Liberty Woods International, Inc.

Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for Defendant United States. With her on the brief were Ethan P. Davis, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Justin R. Miller, Attorney-In-Charge, International Trade Field Office, and Aimee Lee, Assistant Director.

OPINION AND ORDER

Barnett, Judge:

This matter is before the court on three categories of motions relevant to U.S. Customs and Border Protection's ("CBP" or "Customs") EAPA (Enforce and Protect Act) Investigation No. 7252 conducted pursuant to 19 U.S.C. § 1517 (2018).1 Defendant United States ("Defendant" or "the Government") moves to dismiss the amended complaint filed by Plaintiffs Vietnam Finewood Company Limited ("Vietnam Finewood"), Far East American, Inc. ("FEA"), and InterGlobal Forest LLC ("IGF") (collectively, "Plaintiffs") and the complaint filed by Plaintiff-Intervenor Liberty Woods International, Inc. ("Plaintiff-Intervenor" or "Liberty Woods") for lack of subject matter jurisdiction pursuant to United States Court of International Trade ("USCIT" or "CIT") Rule 12(b)(1). Def.’s Mot. to Dismiss, ECF No. 41, and accompanying Def.’s Mem. in Supp. of its Mot. to Dismiss ("Def.’s Mot. Dismiss"), ECF No. 41; Order (Apr. 30, 2020), ECF No. 44 (indicating the court's intention to treat the Government's motion as a responsive pleading with respect to Liberty Woods’ complaint, to which the Government had not previously responded, and which lacked an independent basis for jurisdiction). Plaintiffs and Plaintiff-Intervenor each seek leave to file a supplemental complaint to account for events that occurred since the action was commenced. Pls.’ Mot. for Leave to File Suppl. Compl. ("Pls.’ Mot. Suppl. Compl."), ECF No. 60; Ltr. from Ellen M. Murphy, Orrick, Herrington & Sutcliffe LLP, to the Court (June 11, 2020) ("LW's Mot. Suppl. Compl."), ECF No. 62. Plaintiffs also seek a preliminary injunction enjoining the U.S. Department of Commerce ("Commerce") from conducting a scope inquiry Commerce initiated following a referral from Customs pursuant to 19 U.S.C. § 1517(b)(4). Pls.’ Mot. for Prelim. Inj., ECF No. 22.

For the following reasons, the court grants Defendant's motion to dismiss for lack of subject matter jurisdiction. Plaintiffs’ and Plaintiff-Intervenor's respective motions for leave to file a supplemental complaint will be denied and Plaintiffsmotion for a preliminary injunction will be denied as moot.

STANDARD OF REVIEW

To adjudicate a case, a court must have subject-matter jurisdiction over the claims presented. See Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 94–95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). "[W]hen a federal court concludes that it lacks subject-matter jurisdiction, the complaint must be dismissed in its entirety."

Arbaugh v. Y & H Corp. , 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006).

Plaintiffs bear the burden of establishing subject-matter jurisdiction. See Norsk Hydro Can., Inc. v. United States , 472 F.3d 1347, 1355 (Fed. Cir. 2006). When, as here, the plaintiffs assert section 1581(i) jurisdiction, they "bear[ ] the burden of showing that another subsection is either unavailable or manifestly inadequate." Erwin Hymer Group N. Am., Inc. v. United States , 930 F.3d 1370, 1375 (Fed. Cir. 2019) (citation omitted). Because the pending motion to dismiss rests on the availability of jurisdiction pursuant to subsection (c) of section 1581, and therefore challenges the existence of subsection (i) jurisdiction, "the factual allegations in the complaint are not controlling and only uncontroverted factual allegations are accepted as true." Shoshone Indian Tribe of Wind River Rsrv., Wyo. v. United States , 672 F.3d 1021, 1030 (Fed. Cir. 2012). To resolve the pending motion to dismiss, the "court is not restricted to the face of the pleadings" and may, if necessary, "review evidence extrinsic to the pleadings." Id. (internal quotation marks and citation omitted).

BACKGROUND
I. Legal Framework
A. Overview of EAPA Investigations

As noted, EAPA investigations are governed by 19 U.S.C. § 1517.2 Supra note 1. Section 1517 directs Customs to initiate an investigation within 15 days of receipt of an allegation that "reasonably suggests that covered merchandise has been entered into the customs territory of the United States through evasion." 19 U.S.C. § 1517(b)(1) ; see also id. § 1517(b)(2) (stating allegation requirements). "Covered merchandise" refers to "merchandise that is subject to" antidumping or countervailing duty orders issued pursuant to 19 U.S.C. § 1673e or 19 U.S.C. § 1671e, respectively. Id. § 1517(a)(3). "Evasion" is defined as:

entering covered merchandise into the customs territory of the United States by means of any document or electronically transmitted data or information, written or oral statement, or act that is material and false, or any omission that is material, and that results in any cash deposit or other security or any amount of applicable antidumping or countervailing duties being reduced or not being applied with respect to the merchandise.

Id. § 1517(a)(5)(A).3

If Customs "receives an allegation ... and is unable to determine whether the merchandise at issue is covered merchandise," Customs must "refer the matter to [Commerce] to determine whether the merchandise is covered merchandise" and "notify the party that filed the allegation, and any other interested party participating in the investigation, of the referral." Id. § 1517(b)(4)(A).

Once Customs initiates an investigation, it has 90 days to decide "if there is a reasonable suspicion that such covered merchandise was entered into the customs territory of the United States through evasion" and, if so, to impose interim measures. Id. § 1517(e). Interim measures consist of: (1) "suspend[ing] the liquidation of each unliquidated entry of such covered merchandise that entered on or after the date of the initiation of the investigation"; (2) "extend[ing] the period for liquidating each unliquidated entry of such covered merchandise that entered before the date of the initiation of the investigation"; and (3) "such additional measures as [Customs] determines necessary to protect the revenue of the United States." Id.

Customs generally must issue its determination "not later than 300 calendar days after the date on which" Customs initiated the investigation. Id. § 1517(c)(1)(A). Customs may, however, extend this period by "not more than 60 calendar days" if CBP determines that "the investigation is extraordinarily complicated" or "additional time is necessary." Id. § 1517(c)(1)(B). Additionally, the time "required for any referral and determination" by Commerce as to whether the merchandise is covered merchandise "shall not be counted in calculating" CBP's deadline for issuing its determination. Id. § 1517(b)(4)(C). Customs’ determination regarding the existence of evasion must be "based on substantial evidence." Id. § 1517(c)(1)(A).

Within 30 days of Customs’ evasion determination pursuant to section 1517(c), the person alleging evasion, or the person found to have engaged in evasion, may file an administrative appeal with Customs "for de novo review of the determination." Id. § 1517(f)(1). Thereafter, either of those persons have 30 business days in which to seek judicial review of Customs’ determination and administrative review. Id. § 1517(g)(1). EAPA directs the court to examine "whether [CBP] fully complied with all procedures under subsections (c) and (f)" and "whether any determination, finding, or conclusion is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. § 1517(g)(2).

B. The Court's Subject Matter Jurisdiction

The USCIT, like all federal courts, is a "court[ ] of limited jurisdiction marked out by Congress." Norcal/Crosetti Foods, Inc. v. United States , 963 F.2d 356, 358 (Fed. Cir. 1992) (quoting Aldinger v. Howard , 427 U.S. 1, 15, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976) ). The court's jurisdiction is governed by 28 U.S.C. § 1581 (2018), et seq. See id.

Relevant here, Section 1581(c) grants the court jurisdiction (referred to as "(c) jurisdiction") to review Customs’ EAPA determinations. 28 U.S.C. § 1581(c) ; 19 U.S.C. § 1517(g). Section 1581(i) grants the court jurisdiction (referred to as "(i) jurisdiction") to entertain "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," and "(4) administration and enforcement with respect to the matters referred to in paragraphs (1)(3) of this subsection and subsections (a)(h) of this section." 28 U.S.C. § 1581(i)(2),(4).

" Section 1581(i) embodies a ‘residual’ grant of jurisdiction[ ] and may not be invoked when jurisdiction under another subsection of [ section] 1581 is or could have been available, unless the remedy provided under that other subsection would be manifestly inadequate." Sunpreme Inc. v. United States , 892 F.3d 1186, 1191 (Fed. Cir. 2018) (citation omitted). The scope of the court's (i) jurisdiction is "strictly limited." Erwin Hymer , 930 F.3d at 1374 (citation omitted). Otherwise, (i) jurisdiction would "threaten to swallow the...

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