Jiaxing Brother Fastener Co. v. United States , 179 F. Supp. 3d 1156 ( 2016 )

Slip Op. 16-45
UNITED STATES COURT OF INTERNATIONAL TRADE
JIAXING BROTHER FASTENER CO., LTD., :
A/K/A JIAXING BROTHER STANDARD PART
CO., LTD., IFI & MORGAN LTD., and :
RMB FASTENERS LTD.,
:
Plaintiffs,
:
v. Court No. 15-00313
:
UNITED STATES,
:
Defendant,
:
and
:
VULCAN THREADED PRODUCTS, INC.,
:
Defendant-Intervenor.
[Granting Plaintiffs’ Motion to Stay Proceedings]
Dated: May 6, 2016
Gregory S. Menegaz, Alexandra H. Salzman, and J. Kevin Horgan, deKieffer & Horgan,
PLLC, of Washington, D.C., for Plaintiffs.
Elizabeth Anne Speck, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, of Washington, D.C., for Defendant. With her on the brief were Benjamin C. Mizer,
Principal Deputy Assistant Attorney General, Civil Division, Jeanne E. Davidson, Director, and
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch. Of counsel on the brief
was Khalil Gharbieh, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, D.C.
OPINION
RIDGWAY, Judge:
In this action, Plaintiffs Jiaxing Brother Fastener Co., Ltd., et al. (collectively “Brother”)
challenge various aspects of the Final Results of the U.S. Department of Commerce (“Commerce”)
in the fifth administrative review of the antidumping duty order covering certain steel threaded rod
Court No. 15-00313 Page 2
from the People’s Republic of China. See Complaint1; Certain Steel Threaded Rod From the
People’s Republic of China: Final Results of Antidumping Duty Administrative Review: 2013-2014,
80 Fed. Reg. 69,938 (Nov. 12, 2015) (“Final Results”).
Now before the court is Plaintiffs’ Motion to Stay Proceedings, which seeks to hold this
matter in abeyance pending a determination in another action involving all of the same parties. See
Plaintiffs’ Motion to Stay Proceedings at 1, 3 (“Pls.’ Brief”)2; see also Joint Status Report and
Scheduling Order at 2, 3. In that other action, which challenges the preceding (fourth)
administrative review of the same antidumping duty order at issue in this action, Brother contests
essentially the same aspects of Commerce’s determination that Brother raises here. Compare
Complaint (filed in this action), and First Amended Complaint, filed in Jiaxing Brother Fastener Co.,
Ltd., et al. v. United States, et al., Court No. 14-00316; Pls.’ Brief at 1, 2, 3-4, 5; Joint Status Report
and Scheduling Order at 3; see also American Life Ins. Co. v. Stewart, 300 U.S. 203, 215 (1937)
(case for stay pendente lite is clearest “where the parties and the issues are the same” in the two
cases).3
1
Except as otherwise indicated, all documents cited herein were filed on the docket of the
instant action (i.e., Court No. 15-00313).
2
The three plaintiffs in this action (and in the other case, i.e., Court No. 14-00316) are Jiaxing
Brother Fastener Co., Ltd., a/k/a Jiaxing Brother Standard Part Co., Ltd., IFI & Morgan Ltd., and
RMB Fasteners Ltd. Jiaxing Brother Fastener Company is a Chinese manufacturer of the subject
merchandise. The other two plaintiffs are related exporter trading companies.
In both actions, the United States is the defendant, and Vulcan Threaded Products, Inc. – a
domestic producer of the subject merchandise – is a defendant-intervenor.
3
The language of the first four counts of the complaints in the two cases is exactly the same,
verbatim. Compare Complaint, Counts I-IV (filed in this action), and First Amended Complaint,
Counts I-IV, filed in Jiaxing Brother Fastener Co., Ltd., et al., Court No. 14-00316; see also Pls.’
Court No. 15-00313 Page 3
Brother argues that – in light of the overlapping issues and parties in the two actions – a stay
of this action pending a ruling by this court on Brother’s Motion for Judgment on the Agency
Record in Brother’s action challenging the preceding administrative review (Court No. 14-00316)
will conserve judicial resources and help minimize the parties’ litigation costs. See Pls.’ Brief at 3,
4, 5; Joint Status Report and Scheduling Order at 3.4 Brother further contends that such a stay will
Brief at 3-4. Count V of the First Amended Complaint in the other action (i.e., Court No. 14-00316)
challenges Commerce’s “surrogate valuation of brokerage and handling,” an issue that Brother does
not raise in this case. See First Amended Complaint, Count V, filed in Jiaxing Brother Fastener Co.,
Ltd., et al., Court No. 14-00316; see also Joint Status Report and Scheduling Order at 3. Count V
of the Complaint in this action asserts that Commerce improperly “fail[ed] to adjust financial ratios
to account for SG&A [i.e., selling, general, and administrative] labor expenses included in its direct
labor calculation.” See Complaint, Count V (filed in this action).
4
Brother is inconsistent in its statements concerning the duration of the requested stay. On
the first page of its Motion to Stay, Brother asserts that it seeks “to stay proceedings in this action
pending a final resolution of all proceedings, including any and all appeals, in Jiaxing Brother
Fastener Co., Ltd., et al. v. United States, Court No. 14-00316.” See Pls.’ Brief at 1 (emphases
added).
Elsewhere in its Motion to Stay, however, Brother states that it seeks a stay only “until there
is some guidance provided” by the court in Court No. 14-00316, with no reference to appeals or
finality. See Pls.’ Brief at 3 (emphasis added); see also id. at 4 (seeking to “defer[ ] further
proceedings . . . until there is guidance from Court No. 14-00316”); id. (asserting that Defendant-
Intervenor Vulcan Threaded Products, Inc. “would conserve resources by not being required to file
[a brief on the merits in this action] . . . until and unless there is guidance” from Court No. 14-
00316); id. (arguing that the Government “would also benefit from definitive guidance arising out
of” Court No. 14-00316). And, in the Joint Status Report, Brother asserts that “it would needlessly
waste judicial and party resources to argue . . . issues twice before [the parties] can benefit from the
[Court of International Trade’s] guidance” in Court No. 14-00316. See Joint Status Report and
Proposed Scheduling Order at 3 (emphasis added).
Any confusion about the relief that Brother seeks is resolved by the terms of the proposed
Order of Stay filed with Brother’s Motion to Stay, which are highly specific and envision a fairly
limited stay. The proposed Order of Stay contemplates, inter alia, that – within 30 days after
issuance of an opinion on Brother’s Motion for Judgment on the Agency Record pending in Court
No. 14-00316 – the parties would file a status report in this action indicating “what, if any,
issues/claims [in this action] may be appropriate for voluntary remand by the Department of
Court No. 15-00313 Page 4
not prejudice the parties in any way. See Pls.’ Brief at 4.
The Government opposes Brother’s request, arguing that a stay will not achieve any
economies, and that, in fact, a stay will harm other parties. See generally Defendant’s Opposition
to Plaintiffs’ Motion to Stay Proceedings (“Def.’s Opp. Brief”). Defendant-Intervenor Vulcan
Threaded Products, Inc. elected not to brief the issue.5
As explained in greater detail below, a stay pendente lite of limited duration can be expected
to sharpen the issues here and to streamline these proceedings (and thus will help conserve the
resources of all concerned) – and, indeed, conceivably may result in the dismissal of one or more
of Brother’s claims in this action.6 Even more to the point, the record is devoid of evidence that
Commerce or for withdrawal by [Brother]” in light of the opinion in Court No. 14-00316, and
indicating the parties’ views as to “whether it is appropriate to continue the stay” in this matter. See
Brother’s Proposed Order of Stay at 1-2 (emphasis added).
5
A separate action has been filed by a different plaintiff which, like the instant action,
challenges Commerce’s Final Results in the fifth administrative review of the antidumping duty
order covering certain steel threaded rod from the People’s Republic of China. However, the claims
asserted in that action differ from the claims that Brother asserts in this action. See Complaint, filed
in Hubbell Power Systems, Inc. v. United States, et al., Court No. 15-00312; see also Joint Status
Report and Scheduling Order at 2 (distinguishing claims at issue in this action from claims at issue
in Court No. 15-00312). Hubbell Power, the plaintiff in that action, takes no position on the Motion
to Stay at issue here. See Joint Status Report and Scheduling Order at 2, 4; see also Joint Status
Report and Scheduling Order at 2, filed in Hubbell Power Systems, Inc., Court No. 15-00312.
It is reported that Vulcan, the defendant-intervenor in this action, opposes Brother’s Motion
to Stay. See Pls.’ Brief at 5; Joint Status Report and Scheduling Order at 4; see also Joint Status
Report and Scheduling Order at 2, filed in Hubbell Power Systems, Inc., Court No. 15-00312.
However, because Vulcan did not brief the issue, the record is silent as to any factual or legal bases
for the company’s position.
6
Again, at this point Brother seeks a stay of this litigation only through issuance of an
opinion on its Motion for Judgment on the Agency Record pending in Court No. 14-00316. See n.4,
supra. And, as Brother notes, that motion has been fully briefed and argued. See Pls.’ Brief at 5;
Joint Status Report and Scheduling Order at 3.
Court No. 15-00313 Page 5
such a stay will work any real hardship on the Government (or, for that matter, Defendant-Intervenor
Vulcan). Brother’s motion is therefore granted, and further proceedings in this action are stayed
until 30 days following a determination in Jiaxing Brother Fastener Co., Ltd., et al., Court No. 14-
00316.
I. Analysis
The Government contends that, to justify the entry of a stay, a movant must “make a strong
showing that a stay is necessary” – a showing that the Government maintains Brother has not made.
See Defendant’s Opp. Brief at 3 (quoting Georgetown Steel Co. v. United States, 27 CIT 550, 553,
259 F. Supp. 2d 1344, 1347 (2003)); see also Defendant’s Opp. Brief at 2, 3-5. But, in fact, Landis
– the seminal case on stays pendente lite, relied on in Georgetown Steel and invoked by both Brother
and the Government here – makes it clear that “the suppliant for a stay must make out a clear case
of hardship or inequity in being required to go forward” with litigation (i.e., a “strong showing” of
need for a stay) only where “there is . . . a fair possibility that the stay . . . will work damage to some
one else.” Landis v. North American Co., 299 U.S. 248, 255 (1936) (Cardozo, J.) (quoted in
Georgetown Steel, 27 CIT at 553, 259 F. Supp. 2d at 1346-47); see also Def.’s Opp. Brief at 2, 5
(citing Landis); Pls.’ Brief at 2, 3 (same). This is not such a case.
A. Whether Entry of a Stay Will Result in Injury to Any Party
In the instant action, the Government has failed to adduce any evidence that there is even “a
fair possibility” that it (or any other party with a cognizable interest) will suffer harm as a result of
the requested stay. See Pls.’ Brief at 4, 5. The Government’s sole allegation of potential prejudice
Court No. 15-00313 Page 6
posits that “[a] stay in this case could last months or years,” and that, during that time, “[a] stagnant
case will remain dormant on the Court’s docket,” while “the memories of agency personnel and
other interested parties will fade” and “[n]ew personnel may replace the agency employees with
knowledge of this case.” See Def.’s Opp. Brief at 5.7 To be sure, the risks that memories may fade
and that evidence may be lost or destroyed might be compelling considerations in another case.
However, international trade cases like this one are litigated on the administrative record. As such,
all of the evidence that can be considered in this action already has been submitted and preserved.
Any concerns about the potential for loss of evidence and dimming witness memories that might
counsel against a stay in a de novo case simply are not present in this situation.
7
The Government recognizes that “the Court possesses discretion in determining whether to
stay a particular case.” Def.’s Opp. Brief at 3; see, e.g., Cherokee Nation of Oklahoma v. United
States, 124 F.3d 1413, 1416 (Fed. Cir. 1997) (ruling that the decision as to whether, “[w]hen and
how to stay proceedings is within the sound discretion of the trial court”). Nevertheless, citing Ad
Hoc Shrimp Trade Action Committee and noting “the annual nature of Commerce’s administrative
reviews,” the Government underscores that, in the world of international trade law, parallel litigation
of sequential administrative reviews is thoroughly “routine[].” See Def.’s Opp. Brief at 4-5 & n.1;
Ad Hoc Shrimp Trade Action Committee v. United States, 802 F.3d 1339, 1341-48 (Fed. Cir. 2015)
(summarizing concurrent/overlapping litigation and administrative proceedings involving common
issues, spanning three administrative reviews).
True enough. However, that fact alone says nothing about the appropriate outcome here.
Applications for stays are a relatively infrequent occurrence. Plaintiff respondents in particular (like
Brother here) are generally eager to conclude litigation expeditiously, in the hopes of lowering their
assigned dumping margins. But even plaintiff respondents have other interests to weigh. In
considering whether or not to seek a stay in circumstances such as these, each party is entitled to do
its own individual calculus, balancing the advantages of proceeding with the case against the
advantages of deferring it (such as potential savings in the costs of litigation). Brother conducted
just such an analysis here. As detailed herein, the case for a stay in this instance is particularly
strong. The Government has failed to demonstrate that the requested stay will prejudice any party.
See section I.A, infra. And not only are the parties in this action and in Court No. 14-00316 the
same, and the claims in the two actions virtually identical, but, significantly, there is also a
threshold, overarching issue with potentially far-reaching implications – i.e., Commerce’s selection
of Thailand as the surrogate country. See section I.B.1, infra.
Court No. 15-00313 Page 7
To the extent that the Government seeks to protect (for lack of a better term) the inchoate
“institutional memory” of “agency personnel,” the Government has cited no authority for the
proposition that such a nuanced and attenuated interest constitutes the type of harm that must be
weighed in evaluating the appropriateness of a stay in circumstances like these. Moreover, quite
apart from its lack of support in the law, the Government’s argument is further undermined – as a
practical and factual matter – by the not-infrequent turnover in agency staff during the pendency of
international trade litigation in general. Certainly the Government does not represent that, absent
a stay, there will be no changes in relevant agency personnel for the lifetime of this action.8
8
In addition to its argument that it will be prejudiced by a stay because “the memories of
agency personnel and other interested parties will fade” and “[n]ew personnel may replace the
agency employees with knowledge of this case” (Def.’s Opp. Brief at 5), which is disposed of above,
the Government also asserts broadly that “Commerce, defendant-intervenors, and the public have
an interest in a speedy disposition of litigation” (id. at 6).
As noted above, however, the defendant-intervenor – Vulcan – made a considered
determination not to file a brief opposing Brother’s request for a stay. See n.5, supra. The
Government thus is in no position to argue the interests of the defendant-intervenor in this case.
Further, as to the existence and extent of any inherent harm that the Government claims is
associated with a stay pendente lite, it is worth noting that, with some regularity, the Government
consents to – and sometimes even itself seeks – such stays. See, e.g., Order of December 29, 2006,
entered in Gerber Food (Yunnan) Co., Ltd., et al. v. United States, et al., Court No. 04-00454 (in
situation strikingly parallel to situation presented here, granting Government’s motion for stay of
action challenging agency’s determination in fourth administrative review, pending “the issuance
of a final judgment” in action challenging agency’s determination in prior (third) administrative
review) (emphasis added); Order of March 4, 2003, entered in Wilton Indus. v. United States, Court
No. 00-00528 (granting Government’s motion for stay of action pending decision by Court of
Appeals for Federal Circuit in unrelated case); Georgetown Steel, 27 CIT 550, 259 F. Supp. 2d 1344(denying Government’s motion for stay of action challenging antidumping determination pending
decision by Court of Appeals for Federal Circuit in related case); see also, e.g., Union Steel Mfg.
Co. v. United States, 37 CIT ____, ____, 896 F. Supp. 2d 1330, 1334 (2013) (citing three cases
where no party, including the Government, objected to stay pendent lite).
Lastly, and perhaps most fundamentally, the general interest in the “speedy disposition of
Court No. 15-00313 Page 8
Contrary to the Government’s claims, the proposed stay will not “prejudice the Government’s ability
to defend this case.” See Def.’s Opp. Brief at 3.9
litigation” is present in all cases, and thus cannot itself alone per se preclude the entry of a stay in
any case, and certainly not in this one. As the Government acknowledges, the bottom line is that,
in evaluating any application for a stay, factors that may weigh against a proposed stay (such as the
general interest in the “speedy disposition of litigation”) must be balanced against other factors, such
as the interest in efficiency, the interest in judicial economy, and the interest in conserving parties’
resources, as well as other considerations such as the interest in consistency in judicial
decisionmaking, and “public welfare” and “convenience.” See Landis, 299 U.S. at 254, 256; Def.’s
Opp. Brief at 2; see also n.11, infra (noting that “balancing test” may not apply in certain cases).
9
None of the cases cited by the parties here expressly holds that the party status of the
movant (i.e., plaintiff or defendant) may be a relevant factor in evaluating a request for a stay
pendente lite. However, underpinning much of the case law – implicitly, if not explicitly – is a
concern for the rights of assertedly aggrieved plaintiffs to seek redress in the courts. See generally
An Giang Agriculture and Food Import Export Co. v. United States, 28 CIT 1671, 1673 n.3, 350 F.
Supp. 2d 1162, 1164 n.3 (2004) (collecting cases and analyzing, inter alia, Landis, Commodity
Futures Trading Comm’n v. Chilcott Portfolio Mgmt., Inc., 713 F.2d 1477 (10th Cir. 1983), and
Cherokee Nation, 124 F.3d 1413).
Research has disclosed no cases where the court’s analysis evinces comparable concern for
the rights of defendants. This is not to suggest that defendants have no cognizable interest in the
speedy disposition of litigation (whether that litigation is likely to result in their vindication, or not)
– although it is worth noting that it is typically defendants who seek to use delay to their tactical
advantage. Nonetheless, the common law historically has recognized the unique status of the
plaintiff in litigation. Thus, as the Supreme Court has observed, a plaintiff is the “master of [its]
complaint.” See, e.g., City of Chicago v. Int’l College of Surgeons, 522 U.S. 156, 164 (1997); see
also, e.g., The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25 (1913) (Holmes, J.) (explaining
that “the party who brings a suit is master to decide what law he will rely upon”); McDonald v.
Piedmont Aviation, Inc., 625 F. Supp. 762, 767 (S.D.N.Y. 1986) (in denying defendant’s motion to
stay action pending outcome of another case, court “upholds plaintiff’s right to chart the course of
his own litigation and to prosecute his claims in the manner of his choice”) (emphasis added).
It is therefore somewhat anomalous that, in this case, it is the defendant – the Government
– that has asserted that it is inherently harmed by any delay “in a speedy disposition of litigation.”
See Def.’s Opp. Brief at 6. In any event, it does not suffice for any party – plaintiff, defendant, or
otherwise – to assert such an inherent right and rest its case on that bald, abstract proposition,
without articulating in concrete terms the practical, real-life effects of the potential deprivation of
that right under the circumstances of the particular case at bar.
Court No. 15-00313 Page 9
In sum, the Government has failed to identify any concrete cognizable harm associated with
the requested stay.
B. Whether Entry of a Stay Will Promote Judicial Economy
and Conserve Party Resources
The remainder of the Government’s arguments focus solely on disputing the advantages that
Brother claims will flow from granting the requested stay and on contesting Brother’s assertions that
requiring it to proceed with this case at this time would constitute a hardship. See generally Def.’s
Opp. Brief at 2, 3-5. However, absent a showing by the Government that the proposed stay “would
severely affect the rights of others,” Brother is not required to “make a strong showing of necessity”
for the stay. See Commodity Futures Trading Comm’n v. Chilcott Portfolio Mgmt., Inc., 713 F.2d
1477, 1484 (10th Cir. 1983) (cited in Def.’s Opp. Brief at 3).10 Similarly, absent a showing by the
Government that there is at least “a fair possibility that the stay . . . will work damage to some one
else,” Brother need not establish that going forward with this action would constitute a “clear case
of hardship or inequity” for Brother. See Landis, 299 U.S. at 255 (cited in Def.’s Opp. Brief at 5).
In any event, Brother has made out a clear case that, at least to some extent, a stay will
conserve the resources of all concerned (including the court), and that it is at least possible that the
10
CFTC highlights a number of potentially significant factors that are glossed over or ignored
in much of the case law on stays pendente lite. For example, CFTC notes the significance of the
action that the movant seeks to stay, distinguishing between those cases where the relief sought is
the stay of another proceeding versus those cases where – as here – “the relief sought is only a stay
of the case in which the motion is made.” CFTC, 713 F.2d at 1484. Similarly, CFTC emphasizes
the relevance of the identity of the courts potentially affected by the requested stay. Specifically,
CFTC recognizes that special considerations (such as comity) are implicated where the action sought
to be stayed is pending in a different court – and, in particular, that the power of a federal court to
stay actions in the state courts is specifically constrained by federal statute. Id. at 1484 & n.5.
Court No. 15-00313 Page 10
stay will result in very significant savings.11
1. Brother’s Arguments That This Action and Court No. 14-00316
Are “Essentially Identical”
Brother emphasizes that the first two counts of its complaints in both cases raise a threshold,
overarching issue – Commerce’s selection of Thailand as the surrogate country for use in the
agency’s non-market economy analysis. See Pls.’ Brief at 2, 3; Joint Status Report and Proposed
Scheduling Order at 3; Complaint, Counts I-II (filed in this action); First Amended Complaint,
Counts I-II, filed in Jiaxing Brother Fastener Co., Ltd., et al., Court No. 14-00316. There are at
least two critical dimensions to Brother’s observation.
First, whether the decision favors Brother or not, a decision on Brother’s challenge to
Commerce’s selection of Thailand as the surrogate country in Court No. 14-00316 will almost
certainly have implications – indeed, likely major implications – for the parallel claims in this
action. As noted above, the language of the first two counts of Brother’s First Amended Complaint
in its first action is identical to that of the first two counts of its Complaint in this action. See n.3,
11
Quoting Georgetown Steel and citing Cherokee Nation, the Government asserts that, in
evaluating an application for a stay, “a court must weigh [the] competing interests and maintain an
even balance,” taking into account the interests of all parties, the public, and even the court itself.
See Def.’s Opp. Brief at 2 (quoting Georgetown Steel, 27 CIT at 553, 259 F. Supp. 2d at 1346;
Cherokee Nation, 124 F.3d at 1416).
It is less than clear, however, that Brother’s request for a stay of relatively limited duration
is governed by the “balancing test” to which the Government points. See generally Cherokee
Nation, 124 F.3d at 1416 (discussing Landis, and suggesting that “balancing test” governs cases
where stay sought is “of indefinite duration”). Even assuming that the “balancing test” is applicable
here, it does not tip in favor of the Government. As detailed above, the Government has not
demonstrated that it will suffer any real harm as a result of the requested stay. There is thus
essentially nothing to “balance” against the considerations weighing in favor of the stay that Brother
seeks.
Court No. 15-00313 Page 11
supra. Further, Brother litigated those issues in the same fashion at the administrative level in both
the fourth and fifth administrative reviews, pressing essentially the same arguments. Compare, e.g.,
Case Brief of Jiaxing Brother Standard Part Co., Ltd. and Affiliates at 1-2, 3-29 (public version)
(Aug. 4, 2014) (submitted to Commerce in fourth administrative review) and Case Brief of Jiaxing
Brother Standard Part Co., Ltd. and Affiliates at 2, 28-51 (public version) (June 22, 2015) (submitted
to Commerce in fifth administrative review); see also Plaintiffs’ Rule 56.2 Memorandum In Support
of Judgment Upon the Agency Record at 1, 2-3, 7-31, filed in Court No. 14-00316; Plaintiffs’ Reply
Brief at 1, 2-8, filed in Court No. 14-00316.
Second, if the decision on Brother’s challenge to Commerce’s selection of Thailand as the
surrogate country in Court No. 14-00316 favors Brother, that decision might well have implications
– potentially even decisive implications – for Brother’s remaining claims in both Court No. 14-
00316 and in this action. This is because all of the remaining counts of the First Amended
Complaint in Court No. 14-00316 and all of the remaining counts of the Complaint in this action are
challenges to surrogate values and financial ratios that Commerce based on Thai data. See Pls.’
Brief at 3-4; Joint Status Report and Proposed Scheduling Order at 3.12 As a practical matter,
12
See also Complaint, Counts III-V (filed in this action) (assuming that Commerce’s selection
of Thailand as surrogate country is sustained, and, respectively, challenging specific Thai import
data used by the agency to value steel wire rod, alleging that surrogate financial ratios were not
“based on the ‘best available information’” and were “unsupported by substantial evidence,” and
contesting agency’s alleged “failure to adjust [the surrogate] financial ratios [calculated from Thai
financial statements] to account for SG&A labor expenses included in its direct labor calculation”);
First Amended Complaint, Counts III-V, filed in Jiaxing Brother Fastener Co., Ltd., et al., Court No.
14-00316 (assuming that Commerce’s selection of Thailand as surrogate country is sustained, and,
respectively, contesting the specific Thai import data used by the agency to value steel wire rod,
challenging agency’s alleged failure to adjust the surrogate financial ratios calculated from Thai
financial statements to account for SG&A labor expenses included in its direct labor calculation, and
disputing the specific Thai data used by the agency to value brokerage and handling costs).
Court No. 15-00313 Page 12
particularly in light of Commerce’s preference for the use of a single surrogate country, all of
Brother’s remaining claims are (in effect) contingent on the correctness of Commerce’s selection
of Thailand as the surrogate country (which is the subject of Brother’s first two claims). See, e.g.,
Jiaxing Brother Fastener Co. v. United States, ____ F.3d ____, ____, ____, ____, 2016 WL 1599802* 2, 4, 9 (Fed. Cir. 2016) (on appeal in action challenging Commerce’s determination in second
administrative review of same antidumping duty order at issue here, citing 19 C.F.R. § 351.408(c)(2)
and acknowledging agency preference for use of single surrogate country).
Thus, if – as a result of a decision in favor of Brother on either or both of the first two counts
– Commerce were to select a new surrogate country in Court No. 14-00316, it presumably would
be necessary to reevaluate the surrogate values and financial ratios in that case, because they are
based on Thai data. And, to the extent that Commerce’s selection of a new surrogate country in
Court No. 14-00316 were to lead to the selection of a new surrogate country in this action, it
presumably would be necessary to reevaluate the surrogate values and financial ratios in this case
as well.13
13
Of course, as the proverb counsels, “what’s good for the goose is good for the gander.” Just
as a decision in Brother’s favor on its challenge to Commerce’s selection of Thailand as the
surrogate country in Court No. 14-00316 will almost certainly have significant implications for the
parallel claims in this action, it is also true that a decision in favor of the Government on that issue
may leave Brother with very little room to maneuver here (and might even cause Brother to consider
whether those claims should be abandoned in this action).
In addition, Brother (and the other parties), like the court, also must give appropriate
consideration to the implications – if any – for this action (and for Court No. 14-00316) of the
judicial determinations in Jiaxing Brother Fastener Co., Ltd., et al. v. United States, et al., Court No.
12-00384. In that action, which involved the second administrative review of the same antidumping
duty order at issue in this action, Brother similarly challenged Commerce’s selection of Thailand
as the surrogate country. The Court of Appeals recently issued an opinion affirming the Court of
International Trade’s decision, which sustained the selection of Thailand. See generally Jiaxing
Court No. 15-00313 Page 13
Brother similarly emphasizes that the third counts of its complaints in both cases challenge
Commerce’s use of certain Thai import data as the surrogate value for Brother’s steel wire rod input,
which Brother characterizes as “the all-important steel value[].” See Pls.’ Brief at 3; Joint Status
Report and Scheduling Order at 3; Complaint, Count III (filed in this action); First Amended
Complaint, Count III, filed in Jiaxing Brother Fastener Co., Ltd., et al., Court No. 14-00316.14 The
gravamen of Count III is that – even if the agency’s selection of Thailand as the surrogate country
is sustained – the specific Thai data that Commerce used as the surrogate value for steel wire rod
must be adjusted. See Plaintiffs’ Rule 56.2 Memorandum In Support of Judgment Upon the Agency
Record at 1, 31-33, filed in Court No. 14-00316.15
Brother states that “[r]eversal and redetermination on this issue” (i.e., the asserted need for
adjustments to the specific Thai data used to value steel wire rod) in Court No. 14-00316 “would
have a major impact on the antidumping duty margin and would affect which, if any, other
Brother Fastener Co., ____ F.3d ____, 2016 WL 1599802 (Fed. Cir. 2016), aff’ing Jiaxing Brother
Fastener Co. v. United States, 38 CIT ____, 11 F. Supp. 3d 1326 (2014) and Jiaxing Brother
Fastener Co. v. United States, 38 CIT ____, 961 F. Supp. 2d 1323 (2014).
14
See also Jiaxing Brother Fastener Co., ____ F.3d at ____, ____, ____, 2016 WL 1599802* 4, 5, 9 (on appeal in action challenging Commerce’s determination in second administrative
review, acknowledging that, in production of steel threaded rod, the input with greatest impact on
dumping margin is steel wire rod).
15
But see, e.g., Audio Recording of Oral Argument (March 15, 2016) in Court No. 14-00316
at 2:05:00-2:07:58 (counsel for Brother waives part of its argument that adjustments to the specific
Thai data used as the surrogate value for steel wire rod are necessary, at least as to Court No. 14-
00316). In light of its position as revised at oral argument in Court No. 14-00316, it is unclear
whether Brother continues to assert that a decision in Court No. 14-00316 on Brother’s challenge
to the specific Thai data used as the surrogate value for steel wire rod “would have a major impact
on the antidumping duty margin and would affect which, if any, other individual surrogate value
issues [Brother would] continue to appeal” (quoting Pls.’ Brief at 3) in that case and in this one.
Brother has not supplemented its Motion to Stay to clarify this point.
Court No. 15-00313 Page 14
individual surrogate value issues [Brother would] continue to appeal.” Pls.’ Brief at 3.16 As noted
above, the language of the third count of Brother’s First Amended Complaint in Court No. 14-00316
is identical to the language of the third count of its Complaint in this action. See n.3, supra. Further,
Brother litigated the issue in the same fashion at the administrative level in both the fourth and fifth
administrative reviews, making virtually the same arguments. Compare, e.g., Case Brief of Jiaxing
Brother Standard Part Co., Ltd. and Affiliates at 2, 29-34 (public version) (Aug. 4, 2014) (submitted
to Commerce in fourth administrative review) and Case Brief of Jiaxing Brother Standard Part Co.,
Ltd. and Affiliates at 2, 51-55 (public version) (June 22, 2015) (submitted to Commerce in fifth
administrative review); see also Plaintiffs’ Rule 56.2 Memorandum In Support of Judgment Upon
the Agency Record at 1, 31-33, filed in Court No. 14-00316; Plaintiffs’ Reply Brief at 1, 8-14, filed
in Court No. 14-00316.
In other words, Brother seems to contemplate that – even if it does not prevail on its
challenge to Commerce’s selection of Thailand as the surrogate country (i.e., Counts I and II) in
Court No. 14-00316 – a victory for Brother on its challenge to the specific Thai import data that
were used to value steel wire rod for purposes of the Final Results (i.e., a victory on Count III)
would cause Brother to reconsider “which, if any, other individual surrogate value issues . . . [it
would] continue to appeal” in both Court No. 14-00316 and in this action. In short, Brother
16
Brother notes, for example, that its challenge to Commerce’s surrogate valuation of
brokerage and handling charges (the subject of Count V of Brother’s First Amended Complaint in
Court No. 14-00316) is “of minor comparative importance” relative to its challenge to Commerce’s
surrogate valuation of steel wire rod, the subject of Count III in both Court No. 14-00316 and in this
case (as well as its challenge to Commerce’s surrogate financial ratios, the subject of Count IV in
Court No. 14-00316 and Counts IV and V in this case). See Joint Status Report and Scheduling
Order at 3.
Court No. 15-00313 Page 15
represents that a “win” on its challenge to the specific Thai import data used to value steel wire rod
in Court No. 14-00316 might well result in its voluntary dismissal of some or all of its remaining
claims in that case, and in this case as well.17
2. The Government’s Arguments Highlighting Differences
Between This Action and Court No. 14-00316
The Government does not dispute the compelling parallels between the facts and the claims
in this action and the facts and the claims in Court No. 14-00316. The Government acknowledges
that “Commerce ultimately selected Thailand as the surrogate country to value [Brother’s] factors
of production in [both] the fourth and fifth administrative reviews, and made similar choices with
respect to determining surrogate values for steel wire rod, financial expenses, and labor.” Def.’s
Opp. Brief at 2.
The Government nevertheless argues that “Commerce’s determinations in the fifth
administrative review [which are at issue in this action] are independent of those in the fourth
administrative review [which are at issue in Court No. 14-00316], and Commerce relied on . . .
different administrative record[s]” in the two cases. Def.’s Opp. Brief at 2; see also id. at 3-4
(same); Joint Status Report and Scheduling Order at 4 (same). The Government therefore concludes
17
Significantly, Brother stops short of arguing that the ruling on its Motion for Judgment on
the Agency Record in Court No. 14-00316 will likely inform both the parties’ briefing and judicial
consideration of its claims in Counts III through V of its Complaint in this action, to the extent that
Brother does not voluntarily dismiss those claims. However, given the strong similarities between
this case and Court No. 14-00316, the ruling in Court No. 14-00316 will almost certainly have
implications – potentially major implications – for the parallel claims in this action, whether Brother
or the Government prevails. Moreover, Court No. 14-00316 is not the only related litigation that
must be borne in mind. See generally Jiaxing Brother Fastener Co., ____ F.3d ____, 2016 WL
1599802, aff’ing Jiaxing Brother Fastener Co., 38 CIT ____, 11 F. Supp. 3d 1326 (2014) and Jiaxing
Brother Fastener Co., 38 CIT ____, 961 F. Supp. 2d 1323 (2014).
Court No. 15-00313 Page 16
that a stay will not result in any economies because “[t]he Court can only evaluate [Brother’s] claims
that Commerce’s surrogate country and surrogate value determinations were not supported by
substantial evidence by evaluating the record and decision memoranda [that are] specific to each
review.” Def.’s Opp. Brief at 4; see also id. at 3 (same); Joint Status Report and Scheduling Order
at 4 (same).
But these general points that the Government makes – while fundamentally true – cannot
suffice to carry the day, particularly in this case. The Government fails to address in any concrete
way the specific potential practical implications for this action of a decision on Brother’s Motion
for Judgment on the Agency Record pending in Court No. 14-00316. In light of the strong parallels
between the facts and the claims in the two cases, the Government cannot honestly rule out the very
real possibility that the forthcoming ruling in Court No. 14-00316 could have a significant
(potentially even determinative) impact on the evaluation of the claims in this action by the parties
and by the court.
Moreover, it is of no moment that a decision on Brother’s Motion for Judgment on the
Agency Record in Court No. 14-00316 might not dispose of any or all of the claims in this action.
A case may properly be stayed pending the outcome of another case (the “lead” case) even where
there is no possibility that the “lead” case will be determinative of the case sought to be stayed – i.e.,
even where the “lead” case, at most, may streamline the issues in the case sought to be stayed. See,
e.g., Landis, 299 U.S. at 254, 256 (summarily rejecting argument that “before proceedings in one
suit may be stayed to abide the proceedings in another, the parties to the two causes must be shown
to be the same and the issues identical,” and noting that, even though “every question of fact and
Court No. 15-00313 Page 17
law” in the case sought to be stayed might not be decided in the “lead” case, “in all likelihood [the
‘lead’ case] will settle many and simplify them all”); Levya v. Certified Grocers of California, Ltd.,
593 F.2d 857, 863-64 (9th Cir. 1979) (ruling that stay pending outcome of another case is
appropriate even where the other proceedings are not “necessarily controlling of the action” that is
stayed); CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (in evaluating application for stay,
court is to weigh the potential effect on “the orderly course of justice measured in terms of the
simplifying or complicating of issues, proof, and questions of law”).
In the case at bar, it is beyond cavil that a judicial determination in Court No. 14-00316 will
help clarify, refine, and sharpen the issues in this action, and will inform the parties’ briefing, even
if such a determination does not directly dispose of any of the claims here.
II. Conclusion
“[T]he power to stay proceedings is incidental to the power inherent in every court to control
the disposition of the causes on its docket with economy of time and effort for itself, for counsel,
and for litigants.” Landis, 299 U.S. at 254. For the reasons set forth above, a relatively brief stay
of this action – pending a determination in Jiaxing Brother Fastener Co., et al., Court No. 14-00316
– will promote judicial economy, conserve the resources of all parties, and ultimately advance the
interests of justice.
Court No. 15-00313 Page 18
Brother’s Motion to Stay is therefore granted, and further proceedings in this action are
stayed until 30 days following the issuance of an opinion on Brother’s Motion for Judgment on the
Agency Record pending in Court No. 14-00316.
A separate order will enter accordingly.
/s/ Delissa A. Ridgway
Judge
Dated: May 6, 2016
New York, New York