Wanxiang Am. Corp. v. United States, Slip Op. 19-112

• Decision Date: 19 August 2019
• Docket Number: Slip Op. 19-112,Court No. 18-00120
• Citation: 399 F.Supp.3d 1323
• Parties: WANXIANG AMERICA CORPORATION, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

399 F.Supp.3d 1323

WANXIANG AMERICA CORPORATION, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 19-112

Court No. 18-00120

United States Court of International Trade.

Dated: August 19, 2019

William R. Isasi, Alexander D. Chinoy, Elisa S. Solomon, and T. Scott Shelton, Covington & Burling, LLP, of Washington, DC, argued for plaintiff.

Stephen C. Tosini, Senior Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. With them on the supplemental brief was Joseph H. Hunt, Assistant Attorney General. Of counsel was James Ahrens, Office of Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC. With him on the brief was Steven J. Holtkamp, U.S. Customs and Border Protection, of Chicago, IL.

OPINION

Katzmann, Judge:

This is a case about jurisdiction through the lenses of the anti-dumping statute and the Administrative Procedure Act. At its center is a challenge brought by an importer to a memorandum prepared by one government component for another in an anti-dumping investigation. Plaintiff Wanxiang America Corporation ("WAC") imported goods from Wanxiang Qinchao, Co., Ltd., ("WQ"). Both WAC and WQ are subsidiaries of Wanxiang Group Corporation ("WG"). WG and WAC participated in previous anti-dumping administrative reviews and were determined not to be subject to anti-dumping duties on Chinese tapered roller bearings ("TRBs");¹ WQ, however, was never reviewed.

WAC now invokes this court's residual jurisdiction under 28 U.S.C. § 1581(i), arguing that the United States Department of Commerce ("Commerce") violated anti-dumping duty laws and due process principles by providing guidance to the United States Customs and Border Protection ("CBP") in a memorandum stating that WQ had never been reviewed and thus was not entitled to WG's 0% anti-dumping rate. According to WAC, this communication constituted a final agency action improperly made, without notice, outside established anti-dumping duty procedures. For its part, Defendant the United States ("the Government") counters that the proper way to obtain relief would have been to subject WQ to administrative reviews -- just as WAC and WG had been – and to seek redress in this court under 28 U.S.C. § 1581(c). According to the Government, because this court could have had jurisdiction under 28 U.S.C. § 1581(c), this suit is itself an improper attempt to circumvent established anti-dumping procedures and to transform an information memorandum into a new final agency action.

The court concludes that because jurisdiction could have been invoked under 28 U.S.C. § 1581(c), residual jurisdiction under 28 U.S.C. § 1581(i) is not available. Moreover, although WAC contends otherwise, the Commerce guidance to CBP is not a reviewable Administrative Procedure Act ("APA") final agency action. The court grants the Government's motion to dismiss for lack of subject matter jurisdiction.

BACKGROUND

I. Legal Framework

A. Anti-Dumping and Countervailing Duty Proceedings

Dumping occurs when a foreign company sells a product in the United States for less than fair value -- that is, for a lower price than in its home market. Sioux Honey Ass'n v. Hartford Fire Ins., 672 F.3d 1041, 1046 (Fed. Cir. 2012). Similarly, a foreign country may provide a countervailable subsidy to a product and thus artificially lower its price. U.S. Steel Grp. v. United States, 96 F.3d 1352, 1355 n.1 (Fed. Cir. 1996). To empower Commerce to offset economic distortions caused by dumping and countervailable subsidies, Congress enacted the Tariff Act of 1930.² Sioux Honey Ass'n, 672 F.3d at 1046–47. Under the Tariff Act's framework, Commerce may -- either upon petition by a domestic producer or of its own initiative -- begin an investigation into potential dumping or subsidies and, if appropriate, issue orders imposing duties on the subject merchandise. Id.

19 U.S.C. § 1592 grants CBP the authority to impose a monetary penalty for tariff misclassification.³ If CBP determines that a company has failed to deposit required anti-dumping duties or has misclassified merchandise, it may issue a pre-penalty notice to inform the company that it is contemplating issuing a claim for a monetary penalty under 19 U.S.C. § 1592(b)(1). CBP then investigates to determine whether there was a violation of anti-dumping laws and, if applicable, the appropriate penalty amount. CBP must prove both that an entry occurred through the use of a material false statement (or omission) and that such statement occurred as a result of the alleged violator's culpability. 19 U.S.C. § 1592(a). 19 U.S.C. § 1592(e) provides for de novo judicial review of "all issues, including the amount of penalty" in any proceeding to recover a penalty under the statute. Thus, the classification of the merchandise, giving rise to both a claim for additional duties owed and penalties in this case, would be open to review by the court in a judicial action to recover the penalty regardless of the fact that the entries in question have been liquidated, or of any conclusions of the auditors or import specialists regarding this issue.

B. Jurisdiction

The court's jurisdiction is governed by 28 U.S.C. § 1581. Relevant to this case are subsections (c) and (i). Under 28 U.S.C. § 1581(c), the court has exclusive jurisdiction over any civil action commenced under section 516A or 517 of the Tariff Act of 1930.⁴ Under 28 U.S.C § 1581(i), the court has residual jurisdiction to hear any civil action against the United States "that arises out of any law of the United States providing for" importation revenues, tariffs and duties, embargoes, and administration and enforcement of matters involving section 515 of the Tariff Act.⁵ The court's residual jurisdiction under 28 U.S.C. § 1581(i) may not be invoked when jurisdiction under another subsection of 28 U.S.C. § 1581 is or could have been available, unless the remedy provided under that other subsection would be manifestly inadequate. Ford Motor Co. v. United States, 688 F.3d 1319, 1323 (Fed. Cir. 2012).

II. Factual Background and Procedural History

Although Commerce's memorandum memorializing its guidance to CBP concerning the entities entitled to WG's 0% AD rate was published approximately three years ago, the origins of this dispute date back almost three decades. Commerce first published the anti-dumping on TRBs from China on May 27, 1987. See Tapered Roller Bearings From the People's Republic of China; Final Determination of Sales at Less Than Fair Value, 52 Fed. Reg. 19748 (Dep't Commerce May 27, 1987) ("AD Order"). Following Commerce's publication of the AD Order, WG participated in several administrative reviews between 1995 and 2001. Public Compl., ¶¶ 21–24, 43–45, May 23, 2018, ECF No. 5 ("Compl."). Commerce applied a de minimis rate of .11% for the administrative review for the 1995 to 1996 period and a rate of 0% for the periods covering 1996 to 1997, 1998 to 1999, 1999 to 2000, and 2000 to 2001. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Amended Final Results of Antidumping Duty Administrative Review, 67 Fed. Reg. 46176, 46177 (Dep't Commerce July 12, 2002) ("Amended Final Results of the 2000–2001 Administrative Review"); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of 1996–1997 Antidumping Duty Administrative Review and New Shipper Review and Determination Not To Revoke Order in Part, 63 Fed. Reg. 63842, 63859 (Dep't Commerce Nov. 17, 1998) ; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished; Amended Final Results of 1998–1999 Administrative Review, 66 Fed. Reg. 11562, 11563–64 (Dept' Commerce Feb. 26, 2001) ; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished; Final Results of 1999–2000 Administrative Review, 66 Fed. Reg. 57420, 57421–22 (Dep't Commerce Nov. 15, 2001) ("Final Results of the 1999–2000 Administrative Review"); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Amended Final Results of 2000–2001 Administrative Review, 67 Fed. Reg. 72147 (Dep't Commerce Dec. 4, 2002). In the administrative reviews covering Chinese TRBs for 1999 to 2000 and 2000 to 2001, WG had asked Commerce to rescind the AD Order as it applied to WG because WG had a de minimis or 0% antidumping duty margin during the preceding three years. Commerce rejected these requests and thus the AD Order remained in force as to WG at the time of the subject entries. Final Results of the 1999–2000 Administrative Review, 66 Fed. Reg. at 57422 ; Amended Final Results of the 2000–2001 Administrative Review, 67 Fed. Reg. at 72147. Because Commerce has not examined WG since 2002, the 0% anti-dumping rate continues to apply to WG.

According to the complaint, WAC is a WG "subsidiary" and "has customarily acted as importer of record for these entries" of merchandise produced or exported by WG. Compl. ¶¶ 8, 28. Despite Commerce's refusal to rescind the AD Order, as discussed above, WAC nonetheless imported the subject entries as type "01" ordinary consumption entries, rather than type "03" anti-dumping or countervailing duty entries on its CF7501 commercial entry forms. Public Def.'s Mot. to Dis. at 6–7, Jul. 26, 2018, ECF No. 25 ("Def.'s Br.") (citing Decl. of Amy Johnson at Conf. Ex. B, Jul. 20, 2018, ECF No. 24).⁶

Commerce never reviewed WQ, the alleged exporter of the subject wheel hub assemblies in this case, and thus never assigned WQ a separate rate during an anti-dumping proceeding. Compl. at Ex. 1, Department of Commerce, Customs Liaison Unit, Memorandum to Customs and Border Protection (May 25, 2016) ("CLU Memo"), at Attach. 1, Department's February 25, 2015 Guidance to...