VoestAlpine USA Corp. v. United States

• Decision Date: 26 August 2021
• Docket Number: Slip Op. 21-108,Consol. Court No. 20-03829
• Citation: 532 F.Supp.3d 1379
• Parties: VOESTALPINE USA CORP. and Bilstein Cold Rolled Steel LP, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

532 F.Supp.3d 1379

VOESTALPINE USA CORP. and Bilstein Cold Rolled Steel LP, Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 21-108

Consol. Court No. 20-03829

United States Court of International Trade.

August 26, 2021

Lewis E. Leibowitz, The Law Office of Lewis E. Leibowitz, of Washington, DC, for Plaintiffs.

Aimee Lee, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief were Anthony Saler, Assistant Division Chief, and Kenneth S. Kessler, Senior Counsel, Office of the Chief Counsel, Bureau of Industry and Security, U.S. Department of Commerce, of Washington, DC, and Yelena Slepak, Senior Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of Washington, DC.

OPINION AND ORDER

Barnett, Chief Judge:

In this consolidated action, Plaintiffs VoestAlpine USA Corp. ("VoestAlpine") and Bilstein Cold Rolled Steel LP ("Bilstein") seek a court order requiring reliquidation of two entries of steel merchandise exclusive of duties imposed pursuant to section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862 (2018).¹ See Am. Compl. pp. 4–5 (prayer for relief), ECF No. 8; Compl. p. 5, VoestAlpine USA Corp. and Bilstein Cold Rolled Steel LP v. United States , Court No. 20-cv-03840 ("Ct. No. 20-3840") (CIT Nov. 23, 2020). Plaintiffs claim that reliquidation is merited based on the U.S. Department of Commerce's ("Commerce" or "the agency") approval of an exclusion request containing an invalid 10-digit subheading of the Harmonized Tariff Schedule of the United States ("HTSUS"). See Am. Compl. ¶¶ 10–14. Plaintiffs allege jurisdiction pursuant to 28 U.S.C. § 1581(i)(2) and (4) (2018).² See id. ¶ 4.

Defendant United States ("the Government") moves to dismiss the consolidated action pursuant to U.S. Court of International Trade ("CIT") Rules 12(b)(1) and 12(b)(6). Def.’s Mot. to Dismiss ("Def.’s Mot."), ECF No. 19; see also Def.’s Reply Br. in Supp. of its Mot. to Dismiss ("Def.’s Reply"), ECF No. 23. The Government presents several grounds for dismissal. Most relevant here, the Government argues that the court lacks jurisdiction pursuant to 28 U.S.C. § 1581(i) (referred to as "(i) jurisdiction") because Plaintiffs had a remedy pursuant to 28 U.S.C. § 1581(a) (referred to as "(a) jurisdiction")³ under which they could have sought a refund of section 232 duties by first filing a protest with U.S. Customs and Border Protection ("CBP" or "Customs"). Def.’s Mot. at 2–3, 16–22; Def.’s Reply at 8–14. The Government also argues that, to the extent the court finds (i) jurisdiction appropriate, any challenge to Commerce's exclusion decision is moot because Commerce has approved a second exclusion containing a valid HTSUS subheading with retroactive application. Def.’s Mot. at 22–24; Def.’s Reply at 15–16.⁴

Plaintiffs oppose the motion. Pls.’ Resp. to Def.’s Mot. to Dismiss Compls. ("Pls.’ Resp."), ECF No. 21; Pls.’ Surreply to Def.’s Mot. to Dismiss ("Pls.’ Surreply"), ECF No. 25.

For the following reasons, the court finds that Plaintiffs’ claim is moot and therefore grants the Government's motion to dismiss for lack of subject matter jurisdiction.

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 plaintiff asserts jurisdiction pursuant to 28 U.S.C. § 1581(i), it "bears 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 (a) jurisdiction and therefore challenges the existence of (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. (citation omitted).

Article III of the U.S. Constitution also limits the court to resolving "legal questions only in the context of actual ‘Cases’ or ‘Controversies.’ " Alvarez v. Smith , 558 U.S. 87, 92, 130 S.Ct. 576, 175 L.Ed.2d 447 (2009) (quoting U.S. Const., Art. III, § 2). Thus, "[i]f an event occurs while a case is pending on appeal that makes it impossible for the court to grant ‘any effectual relief whatever’ to a prevailing party, the appeal must be dismissed as moot." Nasatka v. Delta Scientific Corp. , 58 F.3d 1578, 1580 (Fed. Cir. 1995) (quoting Church of Scientology v. United States , 506 U.S. 9, 12, 113 S.Ct. 447, 121 L.Ed.2d 313 (1992) ); see also Jem D Int'l (Michigan) Inc. USA v. United States , 44 CIT ––––, ––––, 470 F. Supp. 3d 1374, 1380 (2020) (mootness precludes the court's consideration of a claim "when ‘events have so transpired that the [court's] decision will ... [not] affect the parties’ rights’ ") (first alteration in original) (quoting Clarke v. United States , 915 F.2d 699, 701 (D.C. Cir. 1990) (en banc)).

BACKGROUND

I. The Imposition of Section 232 Duties and the Exclusion Process

"Section 232 of the Trade Expansion Act of 1962 authorizes the President to restrict imports of goods to ‘[s]afeguard[ ] national security.’ " N. Am. Interpipe, Inc. v. United States , 519 F.Supp.3d 1313, 1319 (CIT 2021) (alterations in original) (quoting 19 U.S.C. § 1862 ). Pursuant to that authority, on March 8, 2018, the President announced a 25 percent tariff on imports of certain steel articles, effective March 23, 2018. See Proclamation 9705 (Mar. 8, 2018) (" Proc. 9705"), cl. 1–2, 83 Fed. Reg. 11,625 (Mar. 15, 2018). Proclamation 9705 identified certain six-digit tariff provisions that would be subject to section 232 duties. Id. , cl. 1.⁵ In order to implement the increased duty rates, Proclamation 9705 modified subchapter III of chapter 99 of the HTSUS to add a new subheading, 9903.80.01, which provided for an additional 25 percent tariff on "all entries of iron or steel products from all countries, except products of Canada and of Mexico, classifiable in the headings or subheadings enumerated in this note." Id. , Annex (U.S. Note 16(a)).

Proclamation 9705 authorized Commerce "to provide relief from the additional duties ... for any steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality" and "to provide such relief based upon specific national security considerations." Id. , cl. 3.⁶ Commerce must convey all exclusion determinations "to [CBP] for implementation ... at the earliest possible opportunity." Id. , Annex (U.S. Note 16(c)). Importers are required to "report information concerning any applicable exclusion granted by Commerce in such form as CBP may require." Id. , Annex (U.S. Note 16(d)).

In 2018, Commerce's Bureau of Industry and Security ("BIS") amended 15 C.F.R. pt. 705 to include rules for the administration of the exclusion process. See generally Requirements for Submissions Requesting Exclusions From the Remedies Instituted in Presidential Proclamations Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum Into the United States; and the Filing of Objections to Submitted Exclusion Requests for Steel and Aluminum , 83 Fed. Reg. 12,106 (Dep't Commerce Mar. 19, 2018) (interim final rule) ("March Regulations "); Submissions of Exclusion Requests and Objections to Submitted Requests for Steel and Aluminum , 83 Fed. Reg. 46,026 (Dep't Commerce Sept. 11, 2018) (interim final rule) ("September Regulations "); see also 15 C.F.R. pt. 705, Suppl. 1 (2019).

Relevant here, exclusion requests must be filed by an individual or organization "using steel in business activities ... in the United States" and include "the submitter's name, date of submission, and the 10-digit [HTSUS] statistical reporting number." March Regulations , 83 Fed. Reg. at 12,110. Commerce's approval of an exclusion is limited to the product specified in the request and the "individual or organization that submitted the specific exclusion request, unless Commerce approves a broader application of the [exclusion]." Id. Companies may "submit[ ] a request for exclusion of a product even though an exclusion request submitted for that product by another requester or that requester was denied or is no longer valid." Id. Additionally, "[e]xclusions will generally be approved for one year." Id. at 12,111. Commerce will deny "[e]xclusion requests that do not satisfy the [specified] reporting requirements." Id.

The September Regulations revised the exclusion process set forth in the March Regulations "to improve the fairness, transparency and efficiency of the exclusion and objection process" and to "add a rebuttal and surrebuttal process." 83 Fed. Reg. at 46,048. In the preamble, Commerce explained that it "will not issue a decision granting an exclusion until CBP confirms that the exclusion is administrable, meaning the exclusion request designates the correct HTSUS statistical reporting number." Id. at 46,046. When "a request is denied for HTSUS issues, companies are encouraged to...