YC Rubber Co. v. United States

• Decision Date: 08 November 2019
• Docket Number: Slip Op. 19-139,Consol. Court No. 19-00069
• Citation: 415 F.Supp.3d 1240
• Parties: YC RUBBER CO. (NORTH AMERICA) LLC and Sutong Tire Resources, Inc. (formerly known as Sutong China Tire Resources ), Plaintiffs, Kenda Rubber (China) Co., Ltd., Plaintiff-Intervenor, and Mayrun Tyre (Hong Kong) Limited and ITG Voma Corporation, Consolidated-Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

415 F.Supp.3d 1240

YC RUBBER CO. (NORTH AMERICA) LLC and Sutong Tire Resources, Inc. (formerly known as Sutong China Tire Resources ), Plaintiffs,Kenda Rubber (China) Co., Ltd., Plaintiff-Intervenor,andMayrun Tyre (Hong Kong) Limited and ITG Voma Corporation, Consolidated-Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 19-139

Consol. Court No. 19-00069

United States Court of International Trade.

Dated: November 8, 2019

Lizbeth R. Levinson, Ronald M. Wisla, and Brittney R. Powell, Fox Rothschild LLP of Washington, D.C., for Plaintiff-Intervenor Kenda Rubber (China) Co., Ltd.

Ashley Akers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director.

OPINION AND ORDER

Barnett, Judge:

Before the court is Plaintiff-Intervenor Kenda Rubber (China) Co., Ltd.'s ("Kenda") motion to modify the statutory injunction entered on July 2, 2019, to cover more than 250 entries of Kenda's subject merchandise during the period of review that were liquidated on June 14 and 21, 2019. See Confidential Pl.-In't's Mot. to Modify the Statutory Inj., ECF No. 31; Confidential Mem. of P & A in Supp. of Pl.-Int.'s Mot. to Modify the Statutory Inj. ("Kenda's Mem."), ECF. No. 31-1. Defendant United States ("the Government") opposes Kenda's motion. See Def.'s Resp. in Opp'n to Int.'s Mot. to Modify the Statutory Inj. ("Def.'s Resp."), ECF No. 33. For the following reasons, Kenda's motion is denied.

BACKGROUND

On April 26, 2019, Commerce published the final results of the second administrative review of the antidumping duty order covering certain passenger vehicle and light truck tires from the People's Republic of China for the period of review of August 1, 2016, through July 31, 2017.¹ See Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China , 84 Fed. Reg. 17,781 (Dep't Commerce Apr. 26, 2019) (final results of antidumping duty admin. review and final determination of no shipments; 2016–2017) (" Final Results "), ECF No. 24-4, and accompanying Issues and Decision Mem., A-570-016 (Apr. 19, 2019), ECF No. 24-5. Of relevance to this motion, Commerce assigned a weighted-average dumping margin to Kenda in the amount of 64.57 percent. Final Results , 84 Fed. Reg. at 17,782. Commerce informed interested parties that it "intend[ed] to issue appropriate assessment instructions directly to [U.S. Customs and Border Protection ("Customs") ] 15 days after publication of the final results of this administrative review." Id. at 17,783.

On May 14, 2019, 18 days after Commerce published the Final Results , Commerce sent liquidation instructions to Customs covering relevant entries of subject merchandise from Kenda, among others. Def.'s Resp. at 2 (citing Message No. 9134302, Liquidation Instructions for Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China Exported by Various Companies for the Period 08/01/2016 through 07/31/2017, A-570-016, (May 14, 2019) ("Liquidation Instructions")); see also Kenda's Mem. at 1–2.

On May 23, 2019, Plaintiffs YC Rubber Co. (North America) LLC and Sutong Tire Resources, Inc. (formerly known as Sutong China Tire Resources) filed a summons and complaint in this case. See Summons, ECF No. 1; Compl., ECF No. 2. On May 24, 2019, Plaintiffs filed Form 24 proposed orders for statutory injunctions and said orders were entered the same day.² See Orders for Statutory Inj. Upon Consent (May 24, 2019), ECF Nos. 11–12. These injunctions did not cover Kenda's entries of subject merchandise. See id.

On June 14 and 21, 2019, pursuant to the Liquidation Instructions, Customs liquidated over 250 (but not all) of Kenda's entries of subject merchandise at the rate determined in the Final Results. See Kenda's Mem. at Ex. 1 (Decl. of Robin Pickard, Vice President of Finance and Accounting at Kenda (undated) ("Pickard Decl.")), ¶ 4. By June 25, 2019, Kenda became aware that Customs had liquidated these entries. Id. Upon learning of these liquidations, Kenda contacted counsel about intervening in this litigation. Id. ¶ 5.

On June 27, 2019, Kenda filed a consent motion to intervene in this litigation. See Proposed Pl.-Int.'s Consent Mot. to Intervene as a Matter of Right, ECF No. 18. The following day, the court granted Kenda's motion to intervene. Order (June 28, 2019), ECF No. 21.

On July 2, 2019,³ Kenda filed a Form 24 proposed order for a statutory injunction to enjoin Commerce or Customs from "issuing instructions to liquidate or making or permitting liquidation of any unliquidated entries of" subject merchandise exported by Kenda that were subject to the Final Results. Proposed Inj. at 1–2. Kenda's proposed order covered "any entries inadvertently liquidated after this order [was] signed but before this injunction [was] fully implemented by [Customs] ...." Id. at 3. The court entered the injunction later that same day. See Injunction.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012)⁴ and 28 U.S.C. § 1581(c) (2012). Alternatively, to the extent that it is properly before the court, see infra note 7, the court has jurisdiction pursuant to 28 U.S.C. § 1581(i) to review Kenda's challenge to Commerce's issuance of the Liquidation Instructions pursuant to its 15-Day Policy.⁵ See Mittal Steel Galati S.A. v. United States , 31 C.I.T. 730, 738–39, 491 F. Supp. 2d 1273, 1280 (2007) (stating that "this vexing jurisdictional question... is largely academic" because the court has jurisdiction pursuant to either 28 U.S.C. § 1581(c) or (i) ). With respect to Kenda's motion, the facts are not in dispute; the only questions are whether Customs' liquidation of the relevant entries was inconsistent with the purpose of the injunction, meriting use of the court's equitable powers to reverse liquidation, and whether Commerce's issuance of the Liquidation Instructions was not in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B)(i) (providing that the court "shall hold unlawful" actions brought pursuant to 28 U.S.C. § 1581(c) that are "unsupported by substantial evidence on the record, or otherwise not in accordance with the law"); 28 U.S.C. § 2640(e) (specifying that "civil action[s] not specified in this section" are reviewed as provided in 5 U.S.C. § 706 (2012) ); 5 U.S.C. § 706(2)(A) ("The reviewing court shall ... hold unlawful and set aside agency action, ... found to be [ ] arbitrary, capricious and abuse of discretion, or otherwise not in accordance with the law").

DISCUSSION

A. The Liquidation of Kenda's Entries Was Not Inconsistent with the Injunction and the Court Will Not Exercise Its Equitable Powers

The court entered the Injunction pursuant to 19 U.S.C. § 1516a(c)(2), which provides that the court "may enjoin the liquidation of some or all entries of merchandise covered by a determination of [Commerce]." Here, while Kenda moves to modify the Injunction, Kenda does not seek to have the court enjoin the liquidation of additional unliquidated entries. To the contrary, while only ever addressing the issue in terms of modifying the Injunction, in substance, Kenda would have the court order the reversal of liquidation of Kenda's entries that were liquidated in accordance with the Final Results at a time when no injunction was in place.

Kenda does not allege that the liquidation of these entries occurred contrary to the terms of the Injunction. In fact, Kenda could not make such an argument. It is clear from the Pickard Declaration that Kenda knew these entries had been liquidated and only then considered intervening in this litigation. See Pickard Decl. ¶¶ 3–6.

Kenda nevertheless suggests that the liquidation of these entries must be reversed in accordance with the "purpose" of the Injunction. Kenda's Mem. at 3–5. Kenda's claim is at least disingenuous, if not outright false. Kenda had actual knowledge that the entries in question had already been liquidated when it filed its proposed injunction, Pickard Decl. ¶¶ 3–6; therefore, when it sought the Injunction, which, on its face, applies only to unliquidated entries, it could not have been Kenda's purpose (much less the purpose of any other party consenting to the proposed injunction) that the Injunction cover previously liquidated entries. See Proposed Inj. at 1 (enjoining the liquidation "of any unliquidated entries"); Injunction at 1 (same). Thus, the liquidation of Kenda's entries did not violate the terms or purpose of the Injunction.

Kenda also requests the court to grant relief as an exercise of the court's equitable powers. Kenda's Mem. at 2–5 (citing Agro Dutch Indus. Ltd. v. United States , 589 F.3d 1187 (Fed. Cir. 2009) ; Clearon Corp. v. United States , 34 C.I.T. 970, 717 F. Supp. 2d 1366 (2010) ). That being said, Kenda's argument for relief in equity merely restates its arguments regarding the purpose of the Injunction.

While the court has equitable powers to modify an injunction to achieve its intended purpose, see, e.g. , Clearon , 34 C.I.T. at 979, 717 F. Supp. 2d at 1373, here, the purpose of the Injunction was to maintain the status quo as of the time the Injunction was entered. The particular entries in question were liquidated prior to the entry of the Injunction, and Kenda only sought to intervene after learning of the liquidation. See Pickard Decl. ¶¶ 4–5. Consequently, Kenda's arguments based on equity and the purpose of the Injunction must fail.⁶ See, e.g. , An Giang Fisheries Imp. & Exp. Joint Stock Co. v. United States , 41 CIT ––––, ––––, 211 F. Supp. 3d 1346, 1351 n.6 (2017) (finding that the court's equitable powers do not extend to "reliquidat[ing] entries that liquidated prior to the entry of the statutory injunction and that were not covered by the terms of that...