Zenith Radio Corp. v. United States

• Decision Date: 09 December 1980
• Docket Number: Court No. 80-5-00861.
• Citation: 1 CIT 53,505 F. Supp. 216
• Parties: ZENITH RADIO CORPORATION, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

505 F. Supp. 216

1 CIT 53

ZENITH RADIO CORPORATION, Plaintiff, v. UNITED STATES, Defendant.

Court No. 80-5-00861.

United States Court of International Trade.

December 9, 1980.

Frederick L. Ikenson, Washington, D. C., and Philip J. Curtis, Glenview, Ill., on the brief for plaintiff.

Alice Daniel, Asst. Atty. Gen., Washington, D. C. (David M. Cohen, Washington, D. C., Director, Commercial Litigation Branch, on the brief), for defendant.

Memorandum and Order On Plaintiff's Motion for a Preliminary Injunction

MALETZ, Judge:

Plaintiff, an American television manufacturer, moves for an order enjoining pendente lite the Secretary of Commerce, the Secretary of the Treasury, the Attorney General and the Commissioner of Customs, and their successors, agents and assigns, from implementing the terms of any settlement agreement entered into by or on behalf of the United States Department of Commerce, the United States Department of the Treasury, the United States Department of Justice and/or the United States Customs Service, and various importers of television receivers from Japan subject to the Secretary of the Treasury's finding of dumping, T.D. 71-76 (1971).

By way of background, on May 28, 1980 plaintiff brought an action in this court under section 516A of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. § 1516a(a)(2)) challenging certain settlement agreements into which the United States had entered on April 28, 1980 with various importers of television receivers from Japan. The major portion of these settlement agreements related to claims arising out of a large backlog of unliquidated entries.

On June 27, 1980, plaintiff filed a verified complaint in which it detailed its grievances and alleged that the implementation of the settlement agreements would result in the unlawful forgiveness to plaintiff's competitors of hundreds of millions of dollars in antidumping liability on these unliquidated entries. As a first cause of action, the complaint asserted that the settlement was not authorized by 19 U.S.C. § 1617 and thus was ultra vires, illegal and void.

Alternatively, as a second cause of action, the complaint alleged that even assuming 19 U.S.C. § 1617 provided authority for the settlement, the Government officials who recommended and determined that the claims should be settled acted arbitrarily, capriciously, in bad faith and unlawfully. More specifically, the complaint alleged that the recommendations and the decision to settle the claims as well as the terms of the settlement were based on bad faith and improper motivations of persons in the Executive Branch. According to the complaint, the recommendations and decisions to settle, and the terms of the settlement were based primarily on political and other irrelevant considerations.

Following enactment of the Customs Courts Act of 1980, which became effective on November 1, 1980, plaintiff filed an amended complaint in this court on November 3, 1980 under 28 U.S.C. § 1581(c) (a provision which gives the court jurisdiction over actions commenced under section 516A of the Tariff Act of 1930, as amended (19 U.S.C. § 1516a)). Alternatively, the amended complaint was brought under 28 U.S.C. § 1581(i) (a provision which was added by the Customs Courts Act of 1980 to grant broad residual jurisdictional authority to this court). It is undisputed that by virtue of § 1581(i), this court has jurisdiction to entertain this action.

It is important to add by way of further background that on May 8, 1980, the Court of Appeals for the District of Columbia Circuit in The Committee to Preserve American Television (a.k.a. Compact) v. Miller, C.A.D.C. No. 79-1948, issued an injunction pending appeal which is the same in substance as the preliminary injunction sought by plaintiff here. However, the enactment of the Customs Courts Act of 1980 makes imminent the dissolution by the D.C. Circuit of its injunction in view of the exclusivity of subject matter jurisdiction which Congress has now vested in this court. Indeed, the appellants in the Compact case have filed a motion with the D.C. Circuit to transfer that case to this court. The Government, on the other hand, opposes the motion to transfer and urges that the D.C. Circuit dissolve its injunction pending appeal. In this posture the injunction pending appeal could be dissolved by the D.C. Circuit at any time. Given that circumstance, plaintiff's motion in this court for a preliminary injunction is ripe for decision at this time.

Nor is there any question as to the power of this court to issue a preliminary injunction in appropriate circumstances. For the Customs Courts Act of 1980 vests this court—renamed the United States Court of International Trade—with "all the powers in law and equity of, or as conferred by statute upon, a district court of the United States." 28 U.S.C. § 1585. Thus, the Act specifically authorizes the court to issue injunctions. 28 U.S.C. § 2643(c)(1). What is more, Congress intended "to grant the Court of International Trade remedial powers coextensive with those of a federal district court. * * * Therefore when a party requests the court to grant injunctive relief, the court is to be guided by the same factors utilized by a federal district court when it considers a request for a preliminary injunction." H.R.Rep. No. 96-1235, 96th Cong.2d Sess. 61, U.S.Code Cong. & Admin.News 1980, pp. 7088, 7131 (1980).

The factors utilized by district courts in considering a request for a preliminary injunction are set out in the leading case of Virginia Petroleum Jobbers Association v. F.P.C., 259 F.2d 921, 925 (D.C.Cir.1958). There the court indicated that to prevail the petitioner must show (1) that there is a substantial likelihood that the petitioner will prevail on the merits; (2) that without the relief requested the petitioner will be irreparably injured; (3) that the issuance of the relief requested will not substantially harm other interested parties; and (4) that the public interest would be served by the relief requested.¹

Recently, the D.C. Circuit in Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir.1977), amplified these factors as follows:

* * * Under Virginia Petroleum Jobbers a court, when confronted with a case in which the other three factors strongly favor interim relief may exercise its discretion to grant a stay if the movant has made a substantial case on the merits. The court is not required to find that ultimate success by the movant is a mathematical probability, and indeed, as in this case, may grant a stay even though its own approach may be contrary to movant's view of the merits. The necessary "level" or "degree" of possibility of success will vary according to the court's assessment of the other factors.

Applying the Virginia Petroleum/Holiday Tours test to the present case, we find the following:

1. Likelihood that Plaintiff will Prevail on the Merits

The court has examined the record made in the case thus far, including the complaint; defendant's motion to dismiss for lack of jurisdiction and brief in support thereof; plaintiff's cross-motion for partial summary judgment on its first cause of action and its brief in support thereof and in opposition to defendant's motion to dismiss; defendant's cross-cross-motion for summary judgment and brief in support thereof and in opposition to plaintiff's motion for partial summary judgment; the amended complaint; and defendant's reply to plaintiff's opposition to defendant's motion to dismiss.² What is particularly significant is that several of the foregoing submissions set forth facts supported by accompanying exhibits with respect to the background of and circumstances surrounding the settlement agreements. Based on these facts which are largely uncontroverted, the court—without reference to plaintiff's first cause of action—is of the view that plaintiff has made out a substantial case on the merits on its alternative second cause of action alleging that Government officials in negotiating and executing the settlement...