Yancheng Baolong Biochemical Products Co. v. United States , 406 F.3d 1377 ( 2005 )

United States Court of Appeals for the Federal Circuit
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YANCHENG BAOLONG BIOCHEMICAL PRODUCTS COMPANY, LTD.,
Plaintiff-Cross Appellant,
v.
UNITED STATES,
Defendant-Appellant,
and
CRAWFISH PROCESSORS ALLIANCE,
LOUISIANA DEPARTMENT OF AGRICULTURE & FORESTRY,
and BOB ODOM, Commissioner.
Defendants.
J. Kevin Horgan, deKieffer & Horgan, of Washington, DC, argued for plaintiff-
cross appellant.
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of Washington, DC, argued for
defendant-appellant. On the brief were Peter D. Keisler, Assistant Attorney General,
David M. Cohen, Director, Jeanne E. Davidson, Deputy Director, and Stephen C. Tosini,
Trial Attorney. Of counsel on the brief were John D. McInerney, Acting Chief Counsel,
Elizabeth C. Seastrum, Senior Counsel, and, Marisa Beth Goldstein, Attorney, Office of
the Chief Counsel for Import Administration, United States Department of Commerce, of
Washington, DC.
Appealed from: United States Court of International Trade
Judge Gregory W. Carman
United States Court of Appeals for the Federal Circuit
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YANCHENG BAOLONG BIOCHEMICAL PRODUCTS COMPANY, LTD.,
Plaintiff-Cross Appellant,
v.
UNITED STATES,
Defendant-Appellant,
and
CRAWFISH PROCESSORS ALLIANCE,
LOUISIANA DEPARTMENT OF AGRICULTURE & FORESTRY, and
BOB ODOM, Commissioner,
Defendants.
___________________________
DECIDED: May 11, 2005
___________________________
Before CLEVENGER, GAJARSA, and PROST, Circuit Judges.
CLEVENGER, Circuit Judge.
The United States appeals the decision of the United States Court of
International Trade holding it in contempt for violating a preliminary injunction by
ordering liquidation of the entries of Yancheng Baolong Biochemical Products Co., Ltd.
("Yancheng"). Yancheng cross-appeals the court's decision to deny attorney fees for
the contempt proceedings. We affirm the decision of the Court of International Trade
denying Yancheng an award of attorney fees because even though we find that the
government was correctly held in contempt, the government has not waived its
sovereign immunity for this type of award.
I
The United States Department of Commerce ("Commerce") determined that
sales under an antidumping duty administrative review reported by Yancheng were
actually from another exporter. Consequently, Commerce rescinded review of
Yancheng's entries. Freshwater Crawfish Tail Meat from the People's Republic of
China; Notice of Final Results of Antidumping Duty Administrative Review and New
Shipper Reviews, and Final Partial Rescission of Antidumping Duty Administrative
Review, 66 Fed. Reg. 20,634 (Apr. 24, 2001). Yancheng's merchandise that entered
the United States during the period of review ("POR") was thus subjected to a China-
wide duty rate of 201.63 percent.
Yancheng then commenced suit in the Court of International Trade and moved
for a preliminary injunction to stop Commerce from liquidating its entries. The injunction
was fashioned to prevent the government, "during the pendency of this action, including
during any remands, from causing or permitting liquidation" of entries of freshwater
crawfish tail meat from China exported by Yancheng and entered into the United States
during the POR. Yancheng Baolong Biochem. Prods. Co. v. United States,
No. 01-00338, slip op. at 1 (Ct. Int'l Trade Aug. 2, 2001) ("Injunction Order"). The
injunction indicated that the entries would be "liquidated in accordance with the final
court decision as provided in 19 U.S.C. § 1516a(e)." Id. at 2.
The Court of International Trade sustained Commerce's rescission of the review
on August 15, 2002. Yancheng Baolong Biochem. Prods. Co. v. United States,
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219 F. Supp. 2d 1317 (Ct. Int'l Trade 2002) ("Yancheng I"). Yancheng appealed that
decision to the Federal Circuit on October 4, 2002, and did not seek another injunction
pending the appeal.
Commerce ordered Customs to liquidate Yancheng's entries at the rate of 201.63
percent on November 1, 2002. On November 5, 2002, Yancheng filed a motion to
clarify the duration of the preliminary injunction. The government failed to respond to
this motion to clarify. On November 8, 2002, Customs field offices received the
instructions to liquidate. On January 3 and January 10, 2003, Customs liquidated
some entries subject to the injunction. The trial court informed the parties on
January 15, 2003, that the original injunction remained effective through the appeal. On
January 17, 2003, Customs liquidated the last of the 28 entries on the West Coast.
Only three of Yancheng's entries, those on the East Coast, remained unliquidated. See
Yancheng Baolong Biochem. Prods. Co. v. United States, 277 F. Supp. 2d 1349, 1351-
52 (Ct. Int'l Trade 2003) ("Yancheng II"). On the same day that the last liquidations
occurred on the West Coast, Customs received new instructions to discontinue the
liquidation of Yancheng's entries. The Court of International Trade then held the
government in contempt of the preliminary injunction on July 16, 2003, based on the
liquidations that occurred in January 2003 that implemented Commerce's November
2002 instructions. The court found that the government violated the preliminary
injunction because the injunction was in effect until all appeals were completed in the
case. See Yancheng II, 277 F. Supp. 2d at 1363.
The Federal Circuit sustained the application of the China-wide rate to Yancheng
on August 4, 2003. Yancheng Baolong Biochem. Prods. Co. v. United States, 337 F.3d
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1332 (Fed. Cir. 2003) ("Yancheng III"). In response, the government filed a motion to
vacate the civil contempt order. The Court of International Trade requested additional
briefing on whether the government had waived sovereign immunity to the award of
contempt damages. The government's motion to vacate the contempt order was denied
on April 28, 2004, and the court held that Yancheng could not recover attorney fees as
damages for the government's contempt because the government had not waived its
sovereign immunity for such an award. Yancheng Baolong Biochem. Prods. Co. v.
United States, No. 01-00338 (Ct. Int'l Trade Apr. 28, 2004) ("Yancheng IV"). Relying on
Lane v. Pena, 518 U.S. 187 (1996), the court found that there was no unequivocal
expression of waiver in any statutory text. Yancheng IV, slip op. at 25. The government
now appeals the decision of the Court of International Trade which held the government
in contempt of the preliminary injunction, and Yancheng cross-appeals the finding that
sovereign immunity precludes its recovery of attorney fees for the contempt
proceedings. We have jurisdiction over this appeal from a final decision of the Court of
International Trade pursuant to 28 U.S.C. § 1295(a)(5) (2000).
II
This court reviews contempt decisions for abuse of discretion. Ammex, Inc. v.
United States, 334 F.3d 1052, 1055 (Fed. Cir. 2002). Abuse of discretion will be found
when there is an error of law, a clear error of judgment, or findings that were clearly
erroneous. Id. Questions of law are reviewed de novo. Koyo Seiko Co. v. United
States, 36 F.3d 1565, 1570 (Fed. Cir. 1994).
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III
The government contends that Yancheng was required to ask for a second
injunction for the period pending appeal and that it should not have been held in
contempt because the preliminary injunction was not a clear order. Yancheng argues
that the preliminary injunction in this case issued such that entries would be "liquidated
in accordance with the final court decision as provided in 19 U.S.C. § 1516a(e)," see
Injunction Order, slip op. at 2, which under Federal Circuit precedent clearly included
the time period pending the appeal. The government admits that the "[s]uspension of
liquidation of subject entries is a routine procedure in this type of case because
liquidation can render the litigation moot." The government also acknowledges that this
case would have been mooted if Customs would have liquidated the three East Coast
entries at the same time it liquidated the West Coast entries. As this court held in
Zenith Radio Corp. v. United States, if there is no injunction, liquidation is automatic
under 19 U.S.C. § 1516a(e) and § 1516a(c)(1), and any decision on the merits of a
liquidation challenge after liquidation has taken place is without effect. 710 F.2d 806,
810 (Fed. Cir. 1983).
To establish civil contempt, it must be shown, by clear and convincing evidence,
that there was a valid order in place, the defendant had knowledge of the order, and the
order was disobeyed. Ammex, Inc. v. United States, 193 F. Supp. 2d 1325, 1327-28
(Ct. Int'l Trade 2002). The government argues that it cannot be held in contempt
because there is a "fair ground of doubt as to the wrongfulness of the [government's]
actions." Preemption Devices, Inc. v. Minn. Mining & Mfg. Co., 803 F.2d 1170, 1173
(Fed. Cir. 1986). The government asserts that the injunction was dissolved upon the
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issuance of the Court of International Trade decision, or that at least there was a fair
ground of doubt as to whether the injunction continued into the appeal stage of the
litigation.
The statutory scheme under which the preliminary injunction issued in this case
is critical to determining when the injunction was intended to dissolve. The preliminary
injunction references the liquidation procedure set forth in 19 U.S.C. § 1516a(e). The
statutory text of section 1516a(e) is as follows:
(e) Liquidation in accordance with final decision
If the cause of action is sustained in whole or in part by a decision of the
United States Court of International Trade or of the United States Court of
Appeals for the Federal Circuit—
(1) entries of merchandise of the character covered by the
published determination of the Secretary, the administering authority, or
the Commission, which is entered, or withdrawn from warehouse, for
consumption after the date of publication in the Federal Register by the
Secretary or the administering authority of a notice of the court decision,
and
(2) entries, the liquidation of which was enjoined under subsection
(c)(2) of this section,
shall be liquidated in accordance with the final court decision in the action.
Such notice of the court decision shall be published within ten days from
the date of the issuance of the court decision.
19 U.S.C. § 1516a(e) (2000).
This court has previously determined what constitutes "the final court decision in
the action" for the purposes of this statute in Timken Co. v. United States, 893 F.2d 337(Fed. Cir. 1990). In Timken, the Federal Circuit, while acknowledging that the term
"'final decision' can mean different things in different situations," found that 19 U.S.C.
§ 1516a(e)(2) required that a "final decision" is a decision that is "conclusive," where all
appeals or possibility of appeals are foreclosed. 893 F.2d at 339. The court held that
"an appealed CIT decision is not a 'final court decision' within the plain meaning of
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§ 1516a(e)." Id. This court further noted that "§ 1516a(e) does not require liquidation in
accordance with an appealed CIT decision, since that section requires that liquidation
take place in accordance with the final court decision in the action." Id. at 340.
The Federal Circuit has also addressed this issue in Hosiden Corp. v. Advanced
Display Manufacturers of America, 85 F.3d 589 (Fed. Cir. 1996). As in Timken, the
court found that "[i]n accordance with 19 U.S.C. § 1516a(e), entries of merchandise for
which liquidation has been suspended by court order remain subject to suspension of
liquidation until there is a 'final court decision in the action.'" Id. at 590. The court
reiterated that "[a] decision of the Court of International Trade that has been appealed
'is not a "final court decision" within the plain meaning of § 1516a(e)'" and that "[s]tatute
and precedent are clear that the decision of the Court of International Trade is not a
'final court decision' when appeal has been taken to the Federal Circuit." Id. at 591.
Most recently this court has reviewed "final decision" in the context of section
1516a(e) in Fujitsu General America, Inc. v. United States, 283 F.3d 1364 (Fed. Cir.
2002). In Fujitsu, liquidation was enjoined pursuant to 19 U.S.C. § 1516a(c)(2).
Continuing the logic of Timken and Hosiden, the Federal Circuit found that the injunction
would end, according to section 1516a(e), when the decision was "final" or conclusive
such that it could no longer be appealed. Id. at 1379. The decision became "final" and
the injunction dissolved on the date when "the time for petitioning the Supreme Court for
certiorari expires without the filing of a petition." Id.
This line of precedent forecloses any argument by the government that the
preliminary injunction was ambiguous or was not intended to persist through the appeal
process. There is therefore no fair ground of doubt that the government violated a valid
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injunction by prematurely liquidating Yancheng's entries. Thus the Court of International
Trade did not abuse its discretion by holding the government in contempt of the
preliminary injunction. However, Yancheng cannot recover damages from the
government because the government has not waived its sovereign immunity under the
theories as presented.
Yancheng presented two theories on the waiver of sovereign immunity in this
case. Yancheng argued that the grant of jurisdiction in 28 U.S.C. § 1581(c) to the Court
of International Trade that opened the door to dumping cases in which the United States
is a party effectuated a broad waiver of sovereign immunity. Yancheng alternatively
argued that Rule 86.2 of the Court of International Trade, which governs civil contempt
proceedings in that court and allows for the award of damages to the party harmed by
the contumacious conduct, effects a waiver of sovereign immunity under the Equal
Access to Justice Act, Pub. L. No. 96-481, Title II, 1980 U.S.C.C.A.N. (94 Stat.) 2325
(1980) ("EAJA") (codified as amended at various sections of 5 & 28 U.S.C.). Neither of
the theories that Yancheng presents establishes an unequivocal waiver.
Waivers of sovereign immunity must be "unequivocally expressed." United
States v. Nordic Village, Inc., 503 U.S. 30, 33 (1992) (citing Irwin v. Dep't of Veterans
Affairs, 498 U.S. 89, 95 (1990)). The Supreme Court has found that "firmly grounded in
[their] precedents" is the fact that "[a] waiver of the Federal Government's sovereign
immunity must be unequivocally expressed in statutory text" and "will not be implied."
Lane, 518 U.S. at 192. Yancheng has not pointed to any language in 28 U.S.C.
§ 1581(c) that unequivocally expresses a waiver of sovereign immunity for liability to
sanctions for contempt of court, and according to Supreme Court precedent, we cannot
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imply one. Although monetary damage awards in contempt proceedings may be an
effective tool for the Court of International Trade to control litigant behavior, monetary
damages are not the exclusive means to vindicate the authority of the court. The
government's submission to the jurisdiction of the court alone is not sufficient to supply
a waiver of sovereign immunity for the sanctions the court sought to impose.
Similarly, Yancheng cannot point to a statutory basis for a waiver of sovereign
immunity with regard to Rule 86.2 of the Court of International Trade. Yancheng
attempts to rely on M.A. Mortenson Co. v. United States, 996 F.2d 1177 (Fed. Cir.
1993), to establish a waiver of sovereign immunity. Mortenson, however, is
distinguishable from the present case. In Mortenson, the rule at issue was Rule 37 of
the United States Claims Court ("RUSCC 37") which was drawn in its entirety from
Federal Rule of Civil Procedure 37. 996 F.2d at 1183. The Federal Rules are
promulgated under the authority of the Supreme Court and are submitted to Congress
for review and approval which, according to the Supreme Court, deems the Federal
Rules as having the "force [and effect] of a federal statute." Sibbach v. Wilson & Co.,
312 U.S. 1, 13 (1941); see also Mortenson, 996 F.2d at 1181. In the present case,
attorney fees were requested based on Rule 86.2 of the Rules of the United States
Court of International Trade which provides that "[a] reasonable counsel fee,
necessitated by the contempt proceeding, may be included as an item of damage."
Unlike RUSCC 37, Rule 86.2 of the Court of International Trade has no corollary rule in
the Federal Rules, and the Rules of the Court of International Trade are not
promulgated subject to congressional approval. The court is given blanket authority by
statute to promulgate its own rules, but without any specific power to subject the United
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States to monetary liability. See 28 U.S.C. § 2633(b) (2000). Thus, the logic of
Mortenson simply does not extend to the rule at issue in this case.
Yancheng did not file an EAJA petition. We therefore need not reach the
question of whether Yancheng is a prevailing party in the contempt proceedings
because attorney fees are not sought under an EAJA petition. Because neither of
Yancheng's proffered theories support finding an unequivocal waiver expressed in
statutory text, attorney fees awarded as damages incurred because of the contempt
proceedings against Commerce cannot be granted in this case.
IV
The Court of International Trade correctly held the United States in contempt of
the preliminary injunction restraining the liquidation of Yancheng's entries at the China-
wide rate. However, we conclude that the government has not waived its sovereign
immunity to the award of attorney fees under Rule 86.2 of the Court of International
Trade; thus we affirm the denial of such an award.
AFFIRMED
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