Barden Corp. v. United States , 144 F. Supp. 3d 1341 ( 2016 )

SLIP OP 16-12
UNITED STATES COURT OF INTERNATIONAL TRADE
THE BARDEN CORPORATION,
Before: Timothy C. Stanceu, Chief Judge
Plaintiff, Leo M. Gordon, Judge
Gregory W. Carman, Senior Judge
v.
Consol. Court No. 06-00435
UNITED STATES,
Defendant.
OPINION
[Plaintiff’s motion for judgment on the agency record denied; certain claims dismissed for
lack of standing; judgment for Defendants.]
Dated: February 10, 2016
Max F. Schutzman, Andrew T. Schutz, and Kavita Mohan, Grunfeld, Desiderio,
Lebowitz, Silverman & Klestadt LLP, of New York, New York, for Plaintiff The Barden
Corporation.
Martin M. Tomlinson, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for Defendant United States. With him on the brief
were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Frank
E. White, Jr., Assistant Director. Of counsel on the brief were Suzanna Hartzell-Baird and
Jessica Miller, Office of the Assistant Chief Counsel, U.S. Customs and Border Protection, of
Washington, DC.
Patrick V. Gallagher, Jr., Attorney-Advisor, Office of the General Counsel, U.S.
International Trade Commission, of Washington, DC, for Defendant U.S. International
Trade Commission. With him on the brief were Dominic Bianchi, General Counsel, and
Robin L. Turner, Acting Assistant General Counsel for Litigation.
Consol. Court No. 06-00435 Page 2
Terence P. Stewart, Geert De Prest, and Patrick J. McDonough, Stewart and
Stewart, of Washington, DC, for Defendant-Intervenors Timken US Corporation and MPB
Corporation.
Gordon, Judge: Plaintiff, The Barden Corporation (“Barden”), a domestic producer
of antifriction bearings (“AFBs”), initiated these consolidated actions1 against the United
States asserting constitutional challenges to the Continued Dumping and Subsidy Offset
Act of 2000 (“CDSOA”), Pub. L. No. 106-387, §§ 1001-03, 114 Stat. 1549, 1549A-72-75
(2000), codified at 19 U.S.C. § 1675c (2000),2 repealed by Deficit Reduction Act of 2005,
Pub. L. No. 109-171, § 7601(a), 120 Stat. 4, 154 (2006).3
Barden applied for, but was denied, shares for Fiscal Years (“FYs”) 2007, 2008,
and 2009 of CDSOA distributions of antidumping duties assessed under various AFB
antidumping duty orders issued in 1989.4 U.S. Customs and Border Protection
1
Under Consol. Court No. 06-00435 are Court Nos. 07-00063, 08-00350, 08-00389,
10-00050, and 12-00247.
2
Citations to 19 U.S.C. § 1675c are to the 2000 edition of the United States Code. All
other citations to the United States Code are to the 2012 edition.
3
Congress repealed the CDSOA in 2006, but the repealing legislation provided that “[a]ll
duties on entries of goods made and filed before October 1, 2007, that would [but for the
legislation repealing the CDSOA], be distributed under [the CDSOA] shall be distributed
as if [the CDSOA] had not been repealed . . . .” Deficit Reduction Act of 2005, Pub. L. No.
109-171, § 7601(b), 120 Stat. 4, 154 (2006). In 2010, Congress further limited CDSOA
distributions by prohibiting payments with respect to entries of goods that as of December
8, 2010 were “(1) unliquidated; and (2)(A) not in litigation; or (B) not under an order of
liquidation from the Department of Commerce.” Claims Resolution Act of 2010, Pub. L.
No. 111-291, § 822, 124 Stat. 3064, 3163 (2010).
4
Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical
Plain Bearings and Parts Thereof From the Federal Republic of Germany, France, Italy,
Consol. Court No. 06-00435 Page 3
(“Customs” or “CBP”) denied Barden’s applications for FYs 2007, 2008, and 2009 under
a provision of the CDSOA (the “acquisition provision”) that makes a domestic producer
ineligible to receive CDSOA distributions if it was “acquired by a company or business
that is related to a company that opposed the investigation” resulting in the issuance of
the relevant antidumping duty order. 19 U.S.C. § 1675c(b)(1). As to FYs 2010 and 2011,
Barden made no application for CDSOA distributions.
Regarding claims for FYs 2007, 2008, and 2009, Barden raises two as-applied
challenges to the constitutionality of the acquisition provision. First, Barden claims that
Customs violated Barden’s constitutional right to equal protection by denying Barden
CDSOA eligibility without a rational basis, asserting that Barden is situated similarly to
other domestic producers that received CDSOA distributions. Second, Barden claims that
Customs applied the acquisition provision retroactively and thereby violated Barden’s
right to due process. For FYs 2010 and 2011, Barden challenges Customs’ application of
the acquisition provision of the CDSOA to Barden under the First Amendment, equal
protection doctrine, and due process clause.
Before the court is Plaintiff’s motion for judgment upon the agency record,
submitted under USCIT Rule 56.1. Plaintiff seeks (1) declaratory relief stating that the
acquisition provision as applied to it is unconstitutional on equal protection and
retroactivity grounds, and (2) an affirmative injunction requiring Customs to distribute
(cont.)
Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom, 54 Fed. Reg.
20,900, 20,900-11 (Dep’t of Commerce May 15, 1989).
Consol. Court No. 06-00435 Page 4
CDSOA funds to Barden. For the reasons set forth below, the court denies Plaintiff’s
Rule 56.1 motion and will enter judgment for Defendants.
I. Background
The background of this litigation is summarized briefly below and provided in detail
in Barden Corp. v. United States, 36 CIT ___, 864 F. Supp. 2d 1370 (2012) (“Barden I”).
The court presumes familiarity with the CDSOA, the underlying antidumping duty
investigations, the procedural history of the decisions by the U.S. International Trade
Commission (“ITC”) and Customs regarding the CDSOA distributions for the subject fiscal
years, and the underlying facts in this action as described in Barden I.
Barden expressly supported the petition underlying the antidumping duty
investigation that resulted in the 1989 antidumping duty orders on AFBs. In 1991, Barden
was acquired by FAG Kugelfischer Georg Schaefer KGaA, a German producer of AFBs
whose U.S. affiliate, FAG Bearings Corporation, opposed the AFBs antidumping duty
petition. See Compl. ¶ 10, ECF No. 4.5 In 2002, FAG Kugelfischer Georg Schaefer KGaA,
FAG Bearings Corporation, and Barden were acquired by INA-Schaeffler KG, another
German producer of AFBs. Id. INA’s U.S. manufacturing affiliate, INA Bearing Co., Inc.,
also opposed the antidumping duty petition. Br. in Supp. of Pl.’s Rule 56.1 Mot. for J.
Upon the Agency R. 4, ECF. No. 95 (“Barden’s Br.”) (citing INA Bearing Co., Inc.
Producer’s Questionnaire Responses, Docs. 4-5, ECF No. 86-7).
5
Citations to the “Complaint” are to the complaint Plaintiff filed in Court No. 06-00435,
unless otherwise specified.
Consol. Court No. 06-00435 Page 5
In December 2000, as required by the CDSOA, the ITC transmitted to Customs a
list of antidumping and countervailing duty orders in effect as of January 1, 1999, along
with a list of those companies that had indicated “public” support for the petition seeking
initiation of the antidumping duty investigation on AFBs. See Letter from USITC to
Customs Re: List of Entities Indicating Public Support of Petition (Dec. 29, 2000), Doc. 5,
ECF No. 95-1. Inclusion on the ITC’s list of supporters of the petition is a necessary, but
not a sufficient, condition for receiving distributions under the CDSOA. The initial ITC list
of supporters of the petition resulting in the AFBs orders did not include Barden because
Barden had not waived confidentiality for its expression of support for the petition. As a
result, Customs’ notices of intent to distribute for FYs 2004, 2005, and 2006 did not
include Barden.
Barden initially was excluded from Customs’ notice of intent to distribute for
FY 2007. See Distribution of Continued Dumping and Subsidy Offset to Affected
Domestic Producers, 72 Fed. Reg. 29,582 (Dep’t of Homeland Security May 29, 2007).
However, it subsequently filed the necessary waiver of confidentiality and certifications
with the ITC. See Letter from Barden and Schaeffler Containing Certifications for FY 2007
(July 27, 2007), Doc. 7, ECF No. 95-1. Thereafter, the ITC added Barden to the FY 2007
list of supporters of the petition. See Letter from USITC to Customs Re: Revision of
Commission’s List of Petitioners to Include Barden (Aug. 3, 2007), Doc. 8, ECF No. 95-1.
Customs nevertheless denied Barden’s application for FY 2007 CDSOA distributions
because Barden was not included on the ITC’s initial list. See Letter from CBP to Barden
Denying Barden’s Request for CDSOA Disbursements (Sept. 21, 2007), Doc. 9, ECF No.
Consol. Court No. 06-00435 Page 6
95-1. Barden requested reconsideration. See Letter from Barden to CBP Requesting
Reconsideration of CDSOA Disbursements (Dec. 20, 2007), Doc. 10, ECF No. 95-1.
Customs denied the request for reconsideration, reasoning that Barden “appears
to have been acquired by a company that opposed the antidumping duty investigations.”
Letter from CBP to Barden Denying Reconsideration for 2007 CDSOA Disbursements
(Jan 15, 2008), Doc. 11, ECF No. 95-1. Customs later rejected Barden’s certifications
and requests for distributions for FYs 2008 and 2009, using the same rationale. See
Letters from CBP to Barden Denying Reconsideration for 2008 and 2009 CDSOA
Disbursements (Sept. 5, 2008 & Aug. 19, 2009), Docs. 12-13, ECF No. 95-1.
The court previously dismissed Barden’s First and Fifth Amendment challenges to
the distributions for FYs 2004, 2005, and 2006. Regarding FY 2004, the court held that
the claims against the ITC were time-barred and that no relief could be granted for the
claims against Customs. Barden I, 36 CIT at ___, 864 F. Supp. 2d at 1376-77. The court
also dismissed Barden’s claims for FYs 2005 and 2006 for failure to state a claim upon
which relief can be granted, on the ground that Barden, prior to 2007, failed to provide
the required waiver of confidential treatment for its support of the petition. Id. at ___, 864
F. Supp. 2d at 1377-78. For the same reason, the court concluded that Barden’s
constitutional challenge to the retroactive aspect of the CDSOA failed for FYs 2005 and
2006. Id. at ___, 864 F. Supp. 2d at 1378-79. Finally, the court held that Barden’s
remaining constitutional claims for FYs 2005 and 2006, which challenged the petition
support requirement, were foreclosed by the binding precedent of SKF USA, Inc. v. U.S.
Consol. Court No. 06-00435 Page 7
Customs and Border Protection, 556 F.3d 1337 (Fed. Cir. 2009) (“SKF”), cert. denied,
560 U.S. 903 (2010). Barden I, 36 CIT at ___, 864 F. Supp. 2d at 1378.
The court, however, denied motions to dismiss by Defendants and Defendant-
Intervenors directed to Barden’s claims for CDSOA disbursements for FYs 2007, 2008,
and 2009. The court stated that “[b]ecause the acquisition clause has not been subjected
to judicial challenge on constitutional grounds, either in SKF or in any other case, the
questions of whether the acquisition clause is permissible under the First Amendment
and whether that clause is permissible under the equal protection guarantee remain
matters of first impression.” Id. at ___, 864 F. Supp. 2d at 1380. The court declined to
consider the constitutional and related questions, including those pertaining to
retroactivity, at the pleading stage, when the administrative record was not yet before the
court. Id.
II. Discussion
The court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1581(i)(4).
See id. at ___, 864 F. Supp. 2d at 1373 (citing Furniture Brands Int’l, Inc. v. United States,
35 CIT ___, ___, 807 F. Supp. 2d 1301, 1307-10 (2011)). The court reviews the
constitutionality of a statute de novo. See Princess Cruises, Inc. v. United States, 201
F.3d 1352, 1357 (Fed. Cir. 2000).
Congress enacted the CDSOA in 2000 to provide annual distributions to “affected
domestic producers” (“ADPs”) of duties collected on outstanding antidumping and
countervailing duty orders, such as the antidumping duty orders on AFBs, to offset
“qualifying expenditures” of those ADPs. 19 U.S.C. § 1675c(a). The statute defines an
Consol. Court No. 06-00435 Page 8
ADP generally as any manufacturer remaining in operation that “was a petitioner or
interested party in support of the petition with respect to which an antidumping duty order
. . . has been entered.” 19 U.S.C. § 1675c(b)(1) (the “petition support requirement”).
The definition of an ADP is in turn limited by the acquisition provision, which
provides: “Companies, businesses, or persons . . . who have been acquired by a company
or business that is related to a company that opposed the investigation shall not be an
affected domestic producer.” Id. A company or business is “related to” another if, inter
alia, it “directly or indirectly controls or is controlled by the other” or “a third party directly
or indirectly controls both” companies or businesses. 19 U.S.C. § 1675c(b)(5).
A company or business “shall be considered to directly or indirectly control another party
if the party is legally or operationally in a position to exercise restraint or direction over
the other party.” Id.
A. Claims Relating to FYs 2007, 2008, and 2009
The court first considers Barden’s as-applied constitutional claims seeking CDSOA
disbursements for FYs 2007, 2008, and 2009. Barden’s claims are, in essence, that the
acquisition provision was applied to it in violation of its right to equal protection and, due
to an alleged retroactive application, also in violation of its right to due process. In its
complaints, Barden had also included First Amendment challenges to the acquisition
provision for these fiscal years. See Barden I, 36 CIT at ___, 864 F. Supp. 2d
at 1379-80. In its Rule 56.1 motion and supporting briefs, Barden asserts only the equal
protection and due process retroactivity claims. Therefore, the First Amendment claims
with respect to FYs 2007, 2008, and 2009 have been waived. See USCIT R. 56.1(c)(1)
Consol. Court No. 06-00435 Page 9
(stating that “the briefs submitted on the motion . . . must include a statement setting out
. . . [t]he issues of law presented together with the reasons for contesting or supporting
the administrative determination”).
i. Equal Protection
A party may challenge federal economic legislation on equal protection grounds
under the due process clause of the Fifth Amendment. See U.S. R.R. Retirement Bd. v.
Fritz, 449 U.S. 166, 173-177 (1980) (identifying the standard governing a Fifth
Amendment equal protection challenge to the Railroad Retirement Act of 1974 as the
same standard applying to a Fourteenth Amendment equal protection challenge to state
legislation); see also Mathews v. De Castro, 429 U.S. 181, 182 n.1 (1976) (“It is well
settled that the Fifth Amendment's Due Process Clause encompasses equal protection
principles.”). For an equal protection claim, a plaintiff maintains that it “has been
intentionally treated differently from others similarly situated and that there is no rational
basis for the difference in treatment.” Village of Willowbrook v. Olech, 528 U.S. 562, 564
(2000). “[A] classification neither involving fundamental rights nor proceeding along
suspect lines . . . cannot run afoul of the Equal Protection Clause if there is a rational
relationship between the disparity of treatment and some legitimate governmental
purpose.” Armour v. City of Indianapolis, 132 S. Ct. 2073, 2080 (2012) (quoting Heller v.
Doe, 509 U.S. 312, 319-20 (1993)). The statute will be upheld if “there is any reasonably
conceivable state of facts that could provide a rational basis for the classification.” Id.
(quoting FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993)). A rational basis may
be found if “there is a plausible policy reason for the classification, the legislative facts on
Consol. Court No. 06-00435 Page 10
which the classification is apparently based rationally may have been considered to be
true by the governmental decision-maker, and the relationship of the classification to its
goal is not so attenuated as to render the distinction arbitrary or irrational.” Id. (quoting
Nordlinger v. Hahn, 505 U.S. 1, 11 (1992)).
To examine whether a rational basis exists to support a statute challenged on
equal protection grounds, the court first must “deduce the independent objectives of the
statute” and then must “analyze whether the challenged classification rationally furthers
achievement of those objectives.” Fritz, 449 U.S. at 187 (Brennan, J., concurring). The
burden is on the party raising the constitutional challenge “‘to negative every conceivable
basis which might support [the statute],’ whether or not the basis has a foundation in the
record.” Heller, 509 U.S. at 320-21 (quoting Lehnhausen v. Lake Shore Auto Parts Co.,
410 U.S. 356, 364 (1973)).
The U.S. Court of Appeals for the Federal Circuit (“Court of Appeals”) has
discussed the purposes underlying both the petition support requirement and the
acquisition provision of the CDSOA. In an action challenging the constitutionality of the
petition support requirement, the Court of Appeals concluded that “[t]he purpose of the
[CDSOA]’s limitation of eligible recipients was to reward injured parties who assisted
government enforcement of the antidumping laws by initiating or supporting antidumping
proceedings.” SKF, 556 F.3d at 1352; accord Schaeffler Group USA, Inc. v. United
States, 786 F.3d 1354, 1363-64 (Fed. Cir. 2015). The CDSOA “shifts money to parties
who successfully enforce government policy.” SKF, 556 F.3d at 1356-57. The Court of
Appeals in Candle Corp. of America v. U.S. Int’l Trade Comm’n, 374 F.3d 1087, 1094
Consol. Court No. 06-00435 Page 11
(Fed. Cir. 2004) (“Candle Corp.”), construed the acquisition provision. The Court of
Appeals held that the acquisition provision denied eligibility for CDSOA benefits not only
to a domestic producer acquired by a business related to a company that opposed the
investigation but also to a domestic producer acquired by a company that itself opposed
the investigation. Id. The Court of Appeals concluded that “[t]he purpose of the statute is
quite clear—to bar opposers of antidumping investigations from securing payments either
directly or through the acquisition of supporting parties.” Id. Candle Corp., a case of
statutory construction, did not involve questions regarding the constitutionality of the
acquisition provision.
The dual purposes of the CDSOA—rewarding those who helped enforce U.S.
antidumping laws by filing or supporting petitions and precluding rewards that benefit
opponents of an investigation—are intertwined. The purpose of the petition support
requirement, as identified by the Court of Appeals, could be defeated if the statute did not
contain the acquisition provision. For instance, a party that opposed an antidumping duty
investigation could acquire a petition supporter to benefit, directly or indirectly, from
CDSOA distributions even though it had opposed the very investigation resulting in the
relevant antidumping duty order. There is at least a “plausible policy reason,” Armour,
132 S. Ct. at 2080, for differentiating between a domestic producer acquired by an
opponent of an investigation, or by a business related to an opponent of an investigation,
and one not so acquired. Therefore, the court must conclude that “the relationship of the
classification to its goal is not so attenuated as to render the distinction arbitrary or
irrational.” Id.
Consol. Court No. 06-00435 Page 12
Barden argues that it cannot reasonably be differentiated from other domestic
producers. According to Barden, “the mere fact of a company’s stock ownership bears no
reasonable relation to the essential purpose of the CDSOA.” Barden’s Br. 8. Similarly,
Barden maintains that its support of the AFBs petitions “place[s] it squarely within the
category of injured parties that should be rewarded” pursuant to the CDSOA’s purpose
as divined by the Court of Appeals in SKF. Id. at 13. Barden contends that its “later
acquisition by a German company, whose related affiliate opposed the petition,” does not
“invalidate” Barden’s entitlement to a CDSOA distribution. Id. However, as Defendant
United States points out, Barden’s argument “ignores the economic reality that a benefit
to a subsidiary company . . . necessarily benefits the parent company, either directly or
indirectly.” Def. U.S. Customs and Border Prot.’s Resp. to Pl.’s Rule 56.1 Mot. for J. Upon
the Agency R. 17, ECF No. 102. By defining “related to” in terms of legal or operational
control, see 19 U.S.C. § 1675c(b)(5), Congress furthered its intention to ensure that
opponents of investigations would not benefit, directly or indirectly, from CDSOA
disbursements derived from petition support.
Barden also argues that distinguishing an acquired company from a non-acquired
company on grounds of ownership is arbitrary because it could allow the distribution of
CDSOA benefits to a domestic producer who acts contrary to the legislative purpose.
Barden’s Br. 16 (submitting that the acquisition provision permits ADPs to import dumped
merchandise, purchase a foreign company and dump subject merchandise, oppose
continued duties in sunset reviews, or move operations to a target country and directly
dump subject merchandise). This appears to be an argument that Congress could have
Consol. Court No. 06-00435 Page 13
done more to restrict rewards and acted arbitrarily by not doing so. Even were the court
to accept the premise apparently underlying Barden’s argument, it still would be
“compelled under rational-basis review to accept [the] legislature’s generalizations even
when there is an imperfect fit between means and ends.” Heller, 509 U.S. at 321. The
court must uphold a statute “even if it does not do a perfect job of selecting those cases
that appear to be appropriate subjects of congressional concern.” Black v. Sec’y of Health
& Human Servs., 93 F.3d 781, 788 (Fed. Cir. 1996). Whether Congress should have
placed further restrictions upon the receipt of CDSOA distributions is not a question for
the court. See Beach Commc’ns, 508 U.S. at 315-16 (“Defining the class of persons
subject to a regulatory requirement—much like classifying governmental beneficiaries—
inevitably requires that some persons who have an almost equally strong claim to favored
treatment be placed on different sides of the line, and the fact that the line might have
been drawn differently at some points is a matter for legislative, rather than judicial,
consideration.”) (internal quotations and citations omitted). In an equal protection context,
the court must uphold distinctions established by Congress where “there is any
reasonably conceivable state of facts that could provide a rational basis for the
classification.” Id. at 313.
The court concludes that the acquisition provision does not abridge the equal
protection guarantee of the Fifth Amendment because a rational relationship exists
between the restriction it imposes and the overall purposes of the CDSOA. See Armour,
132 S. Ct. at 2080.
Consol. Court No. 06-00435 Page 14
ii. Retroactivity
Barden grounds its due process retroactivity claim upon a contention that Customs
applied the CDSOA retroactively and therefore impermissibly disqualified Barden from
receiving disbursements for FYs 2007, 2008, and 2009 based on Barden’s acquisition by
FAG Kugelfischer Georg Schaefer KGaA. Rep. Br. in Supp. of Pl.’s Rule 56.1 Mot. for J.
Upon Agency R. 13, ECF No. 109 (“Barden’s Reply”). According to Barden, the
disqualifying acquisition occurred in 1991, long prior to the 2000 enactment of the
CDSOA. Id.; Compl. ¶ 10; Barden’s Br. 4. Defendants Customs and ITC, and Defendant-
Intervenor Timken, argue that Barden lacks standing to raise a retroactivity challenge to
the constitutionality of the CDSOA. The court agrees.
As noted above, Customs issued a letter denying Barden’s request for
reconsideration of the earlier denial of benefits for FY 2007, reasoning that Barden
“appears to have been acquired by a company that opposed the antidumping duty
investigations.” Letter from CBP to Barden Denying Reconsideration for 2007 CDSOA
Disbursements (Jan. 15, 2008), Doc. 11, ECF No. 95-1. Customs stated the same reason
for denying Barden’s requests to receive CDSOA disbursements for FYs 2008 and 2009.
See Letters from CBP to Barden Denying Reconsideration for 2008 and 2009 CDSOA
Disbursements (Sept. 5, 2008 & Aug. 19, 2009), Docs. 12-13, ECF No. 95-1. CBP’s
finding that Barden “appears to have been acquired by a company that opposed the
antidumping duty investigations” (a finding that Barden does not contest in this litigation)
is vague. Customs’ denial letters, using the singular word “company,” refer to only one
acquisition. The letters do not specify whether the referenced acquisition was the one that
Consol. Court No. 06-00435 Page 15
took place in 1991 or the one that took place in 2002, nor do they specify the entity
Customs found to have “opposed the antidumping duty investigations.” The record as a
whole does not reveal whether Barden was denied ADP eligibility based on an acquisition
that occurred prior to the 2000 enactment of the CDSOA or one that occurred thereafter.
Barden grounds its retroactivity claim in an assertion that Customs disqualified
Barden based on the 1991 acquisition. Barden’s Reply 13. If, instead, Customs was
referring in its denial letters to the 2002 acquisition, Barden would lack standing to bring
any due process claim on the ground of retroactivity. Therefore, for purposes of analyzing
the standing issue presented by Barden’s retroactivity claim, the court presumes that
Customs was referring to the 1991 acquisition in its denial letters.
Standing is a “threshold jurisdictional question” stemming from Article III of the
Constitution, which “extends the ‘judicial Power’ of the United States only to ‘Cases’ and
‘Controversies.’” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102 (1998) (quoting
U.S. Const. art. III, § 2). Based on this limitation, as well as “the separation-of-powers
principles underlying that limitation,” the Supreme Court has “deduced a set of
requirements that together make up the ‘irreducible constitutional minimum of standing.’”
Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1386 (2014)
(quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). “The plaintiff must have
suffered or be imminently threatened with a concrete and particularized injury in fact that
is fairly traceable to the challenged action of the defendant and likely to be redressed by
a favorable judicial decision.” Id. (internal quotations and citations omitted).
Consol. Court No. 06-00435 Page 16
For purposes of standing, Barden can show that it incurred an injury by reason of
CBP’s denial letters. However, in addition to demonstrating that it experienced an injury
in fact caused by the action being challenged, a plaintiff must demonstrate for standing
that a favorable judicial decision on its claim could redress that injury. See Ariz. State
Leg. v. Ariz. Indep. Redistricting Comm’n, 135 S. Ct. 2652, 2663 (2015). If the court were
to presume that Customs applied the statute to Barden in an impermissibly retroactive
manner based on the 1991 acquisition, Barden still would need to demonstrate that it
qualified for CDSOA benefits during FY 2007, 2008, or 2009. Barden cannot make this
showing.
Barden states that it was “acquired in 2002 by INA-Schaeffler KG, a bearing
producer based in Germany” that, according to Barden, “did not support the original AFBs
investigation.” Compl. ¶ 10. The court assumes that non-support of the investigation is
insufficient to trigger disqualification under the acquisition provision. However, opposition
does trigger disqualification. See 19 U.S.C. § 1675c(b)(1). It appears that Barden’s
acquirer went beyond mere non-support and actually opposed the investigation. Barden
stated that INA-Schaeffler KG “opposed the original AFBs investigation,” adding that INA
Bearing Co., Inc., the U.S. production affiliate of INA-Schaeffler KG, “opposed the petition
as well.” Barden’s Br. 4 (emphasis added) (citing INA Producer’s Questionnaire
Response, Doc. 4, ECF No. 86-7).
To obtain a CDSOA distribution in any form for FY 2007, 2008, or 2009, Barden
would have to make two showings. First, Barden would have to contradict its own
assertions and show that its 2002 acquirer, INA-Schaeffler KG, did not oppose the AFBs
Consol. Court No. 06-00435 Page 17
investigation. Second, Barden would also have to demonstrate that the opposition of INA
Bearing Co. to the petition (and therefore, the investigation) would not have disqualified
Barden from receiving a benefit. Based upon the representations Barden has made in
this litigation, the court concludes that Barden would not succeed. Barden has made the
unqualified statement that INA-Schaeffler KG “opposed the original AFBs investigation.”
Barden’s Br. 4. Due to Barden’s characterization in its brief of INA Bearing Co., Inc. as
the “U.S. production affiliate” of INA-Schaeffler KG, Barden also would fail in attempting
to show that INA-Schaeffler KG is not “related to” INA Bearing Co., Inc. within the meaning
of the acquisition provision. Barden’s representations indicate, at least, a relationship
between the two companies characterized by a level of direct or indirect control sufficient
to meet the related party definition in the CDSOA. See 19 U.S.C. § 1675c(b)(5) (“For
purposes of this paragraph, a party shall be considered to directly or indirectly control
another party if the party is legally or operationally in a position to exercise restraint or
direction over the other party.”).
In sum, Barden could not demonstrate its qualification for a CDSOA benefit for
FY 2007, 2008, or 2009 even if the court were to conclude that the CDSOA was
retroactively applied in a constitutionally impermissible way. Therefore, the court must
dismiss for lack of standing Plaintiff’s due process retroactivity claims.
B. Claims Relating to FYs 2010 and 2011
Barden’s complaint in Court No. 12-00247 asserts constitutional challenges to the
CDSOA in relation to distributions for FYs 2010 and 2011 based on First Amendment,
equal protection, and due process retroactivity grounds. Barden did not address these
Consol. Court No. 06-00435 Page 18
claims in its Rule 56.1 motion or supporting briefs and thus appears to have waived them.6
See USCIT Rule 56.1(c). However, the court does not reach the issue of waiver because
the court concludes that it has no jurisdiction over these claims.
The court must determine whether standing, and thus jurisdiction, exists even
when no party raises the issue. See Steel Co., 523 U.S. at 94 (quoting Great S. Fire Proof
Hotel Co. v. Jones, 177 U.S. 449, 453 (1900)). As discussed above, standing is a
threshold question implicating whether the court is able to use the judicial powers granted
by the U.S. Constitution. Id. at 102 (quoting U.S. Const. art. III, § 2). “For the court to
pronounce upon the meaning or the constitutionality of a . . . federal law when it has no
jurisdiction to do so is, by very definition, for a court to act ultra vires.” Id. at 101-02.
Barden’s standing problem for FYs 2010 and 2011 is not for lack of alleging injury.
Barden claims that its competitors received CDSOA distributions in these years while
Barden did not. This claim suffices to allege an injury for standing purposes. However,
Barden’s allegations and the administrative record establish that Customs did not cause
Barden’s injury.
In the context of standing, causation requires “a fairly traceable connection
between the plaintiff’s injury and the complained-of conduct of the defendant.” Id. at 103
(citing Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). The “complained-
6
The court notes that Court No. 12-00247 was consolidated with Court No. 06-00435 on
February 11, 2014. Order, ECF No. 88. Thereafter, on February 14, 2014, the court issued
(cont.)
its scheduling order for briefing on the merits of remaining claims in this consolidated
action. Order, ECF No. 89.
Consol. Court No. 06-00435 Page 19
of conduct” may take the form of an adverse agency decision. See, e.g., Ashley Furniture
Indus., Inc. v. United States, 734 F.3d 1306 (Fed. Cir. 2013) (challenging CBP decision
not to provide plaintiff with CDSOA distribution). On occasion, the complained-of conduct
may be an agency’s failure to act. See, e.g., Sioux Honey Ass’n v. Hartford Fire Ins. Co.,
672 F.3d 1041, 1061 (Fed. Cir. 2012) (finding standing where plaintiff alleged injury
caused by Customs’ failure to take required discrete agency action). However, agency
inaction will give rise to standing only where “a plaintiff asserts that an agency failed to
take a discrete agency action that it is required to take.” Norton v. S. Utah Wilderness All.,
542 U.S. 55, 64 (2004) (examining a claim under the Administrative Procedure Act,
5 U.S.C. § 706 et seq.); accord Sioux Honey, 672 F.3d at 1061 (applying Norton’s
limitation on challenges to agency inaction to the issue of standing in the Customs
context).
The record here indicates that Plaintiff never applied for a distribution of CDSOA
funds for FY 2010 or 2011. As Barden admits, “Barden did not file certifications with
Customs for fiscal years 2010 and 2011.” Complaint at ¶ 37, Court No. 12-00247, ECF
No. 5. Pursuant to regulation, Customs distributes CDSOA funds only in response to
certifications filed by producers. 19 C.F.R. § 159.63 (2012).7 That regulation requires,
among other things, that “[i]n order to obtain a distribution of the offset, each affected
7
In December 2012, a minor modification of this section was made. See Technical
Corrections to U.S. Customs and Border Protection Regulations, 77 Fed. Reg. 73,309
(Dep’t of Homeland Security Dec. 10, 2012) (“removing the words ‘Office of Finance’ and
adding in their place the words ‘Office of Administration’”). The provision otherwise
remains in effect in unchanged form to the present. All further citations to the Code of
Federal Regulations are to the 2012 edition.
Consol. Court No. 06-00435 Page 20
domestic producer must submit a certification . . . that must be received within 60 days
after” Customs publishes a notice of distributions. Id. at § 159.63(a). The certification must
indicate “that the affected domestic producer desires to receive a distribution,” list
“qualifying expenditures incurred,” and “demonstrate that the domestic producer is eligible
to receive a distribution as an affected domestic producer.” Id. The regulation does not
require Customs to decide whether to distribute CDSOA funds to a producer absent a
certification. Not only has Barden admitted that it filed no certifications for FYs 2010 and
2011, it also has failed to challenge the requirement in 19 C.F.R. § 159.63 that it do so.
Since Barden filed no certifications for FYs 2010 and 2011, there was nothing for Customs
to decide regarding Barden. Unlike in FYs 2007, 2008, and 2009, Customs was not called
on to apply the CDSOA or its acquisition clause to Barden for FYs 2010 and 2011. Thus,
Customs did not refuse to give Barden a CDSOA distribution for those years. Customs
neither took agency action nor unlawfully withheld required agency action respecting
Barden for FYs 2010 and 2011. Barden’s injury was caused by Barden alone—through
its failure to apply for a distribution—not by any action or refusal of action on the part of
Customs.
This case is akin to Simon v. Eastern Kentucky. Welfare Rights Orginization, in
which indigent individuals and associations of indigents sued the IRS for granting
favorable tax treatment to hospitals that refused to provide plaintiffs with certain services.
426 U.S. at 28. The Supreme Court rejected standing because “[i]t is purely speculative
whether the denials of service specified in the complaint fairly can be traced to [the IRS]’s
‘encouragement’ or instead result from decisions made by the hospitals without regard to
Consol. Court No. 06-00435 Page 21
the tax implications.” Id. at 42-43. Here, the break in causation is even more stark:
Barden’s own failure to file certifications, rather than the action of a third party, was the
cause of Barden’s injuries in FYs 2010 and 2011.
Barden’s complaint seeking a remedy for FYs 2010 and 2011 asserts that “Barden
did not file certifications with Customs for fiscal years 2010 and 2011 as, based upon the
blanket denials in years 2007, 2008 and 2009, it would have been futile to do so.” Compl.
¶ 37, Court No. 12-00247, ECF No. 5. But futility, although often recognized as a possible
exception to the requirement that a party exhaust administrative remedies prior to bringing
a judicial challenge to an agency action, will not suffice where, as here, the issue is not
exhaustion but jurisdiction due to a lack of standing.
Barden also asserts in its complaint for FYs 2010 and 2011 that it has standing
because “[t]he Court can redress Barden’s injury by ordering the requested relief.” Id. ¶ 9.
However, the court could not provide any remedy in the circumstance Barden has pled.
Barden failed to comply with the essential regulatory requirement of filing the necessary
certifications for Customs to consider. See 19 C.F.R. § 159.63. Therefore, even were
Barden to succeed on the merits of its constitutional claims, the court still would lack the
power to order Customs to provide Barden CDSOA distributions in the absence of
certifications. This inability is another reason why the court concludes that Barden lacks
standing to assert its constitutional claims for FYs 2010 and 2011.
As Plaintiff lacks standing, the court has no jurisdiction over Plaintiff’s claims
arising from FYs 2010 and 2011. Consequently, the court sua sponte dismisses the
claims in the 2012 complaint.
Consol. Court No. 06-00435 Page 22
IV. Conclusion
For the aforementioned reasons, the court determines that the acquisition
provision of the CDSOA is supported by a rational basis and therefore satisfies the equal
protection guarantee of the Constitution. The court determines that Barden lacks standing
to challenge the CDSOA on due process retroactivity grounds and also lacks standing to
assert claims relating to FYs 2010 and 2011. Barden’s motion for judgment on the agency
record is denied. The court will enter judgment for Defendants.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: February 10, 2016
New York, New York