P.F. Stores, Inc. v. United States , 70 F. Supp. 3d 1343 ( 2015 )

Slip Op. 15-54
UNITED STATES COURT OF INTERNATIONAL TRADE
P.F. STORES, INC.,
Plaintiff,
v.
UNITED STATES,
Defendant, Before: Claire R. Kelly, Judge
and Court No. 14-00200
AMERICAN FURNITURE
MANUFACTURERS COMMITTEE FOR
LEGAL TRADE AND VAUGHAN-
BASSETT FURNITURE COMPANY,
INC.,
Defendant-Intervenors.
OPINION
[Granting Defendant’s and Defendant-Intervenors’ motions to dismiss Plaintiff’s complaint
for lack of subject-matter jurisdiction.]
Dated: June 9, 2015
Josh Levy, Peter S. Herrick, P.A., of Florida, argued for Plaintiff. On the brief was Peter
Stanwood Herrick.
Douglas Glenn Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for Defendant. With him on the
brief were Joyce R. Branda, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Shana
Ann Hofstetter, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
J. Michael Taylor, King & Spalding, LLP, of Washington, DC, argued for Defendant-
Intervenors. With him on the brief were Daniel Lawrence Schneiderman and Joseph W.
Dorn.
Court No. 14-00200 Page 2
Kelly, Judge: This matter is before the court on Defendant’s, United States, and
Defendant-Intervenors’, American Furniture Manufacturers Committee for Legal Trade
and Vaughan-Bassett Furniture Company, Inc., motions to dismiss. Plaintiff, P.F. Stores,
Inc. (“Plaintiff” or “PF Stores”), argues the court has 28 U.S.C. § 1581(i) (2012)1
jurisdiction because the U.S. Department of Commerce’s (“Commerce”) actions resulted
in Plaintiff’s entries being deemed liquidated. Defendant and Defendant-Intervenors
argue the court lacks subject-matter jurisdiction because Plaintiff failed to avail itself of
adequate judicial remedies under 28 U.S.C. § 1581(a). The court finds that it lacks
subject-matter jurisdiction to hear Plaintiff’s claims and dismisses Plaintiff’s complaint for
the reasons set forth below.
BACKGROUND
PF Stores is an importer of wooden bedroom furniture manufactured in China by
Dream Rooms Furniture (Shanghai) Co. Ltd. (“Dream”). See Compl. ¶¶ 1, 4–5, Aug. 26,
2014, ECF No. 2 (“Pl.’s Compl.”). PF Stores’ entries were subject to the third
administrative review of the antidumping order on wooden bedroom furniture from the
People’s Republic of China, covering entries made in 2007. See Wooden Bedroom
Furniture from the People’s Republic of China, 74 Fed. Reg. 41,374 (Dep’t Commerce
Aug. 17, 2009) (final results of antidumping duty administrative review and new shipper
reviews). Dream filed suit in this Court contesting the results of the third administrative
review and obtained an injunction against liquidation of its entries on September 22, 2009.
1
Further citations to Title 28 of the U.S. Code are to the 2012 edition.
Court No. 14-00200 Page 3
See Pl.’s Compl. ¶¶ 6–7, Ex. A. The injunction provided that the subject entries “shall be
liquidated in accordance with the final court decision in this action, including all appeals
and remand proceedings, as provided in section 516A of the Tariff Act of 1930, as
amended, 19 U.S.C. § 1516a(e) (2006).” Pl.’s Compl. Ex. A at 2.
The court consolidated Dream’s action with five other actions contesting the results
of the third administrative review on November 6, 2009. Def.’s Mot. Dismiss & App. DA40,
Dec. 3, 2014, ECF No. 14 (“Def.’s Mot. & App.”). After several remands, the court
sustained Commerce’s third remand results on February 5, 2013. See Lifestyle
Enterprise, Inc. v. United States, 37 CIT __, __, 896 F. Supp. 2d 1297, 1299 (2013). Two
parties to the consolidated action, not including Dream, appealed the court’s slip opinions.
See Def.’s Mot. & App. DA33–DA34 (docket listing notices of appeal).
On June 13, 2013, the Lifestyle court granted an unopposed motion made by the
Defendant-Intervenors in this case, to sever and deconsolidate three of the previously
consolidated actions, including Dream’s action. See Def.’s Mot. & App. DA34, DA42–43.
The court further ordered that Dream’s injunction was “hereby amended as follows . . . all
entries exported by Orient International Holding Shanghai Foreign Trade Co., Ltd. and
Dream Rooms Furniture (Shanghai) Co., Ltd. shall be liquidated without delay in
accordance with this Court’s February 5, 2013 final judgment for the period January 1,
2007 to December 31, 2007 . . . .” Id. at DA43
In a message dated June 25, 2013, Commerce issued instructions to U.S.
Customs and Border Protection (“CBP”) to liquidate entries of furniture exported by
Dream during 2007 at a final rate of 216.01%. See Pl.’s Compl. ¶ 10, Ex. B at 1. In
Court No. 14-00200 Page 4
September 2013, CBP liquidated the entries imported by Plaintiff and exported by Dream
at the rates provided in these instructions. Def.’s Mot. & App. DA46, DA49. Plaintiff filed
protests arguing that the entries it imported from Dream were deemed liquidated pursuant
to Section 504(d) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1504(d) (2012),2 six
months from the court’s February 5, 2013 slip opinion. Id. at DA44–DA49. CBP denied
these protests on May 21 and June 5, 2014. Id. at DA46, DA49.
Plaintiff does not challenge the denial of its protests in this action. Rather, Plaintiff
argues that it challenges various Commerce actions for which the court has subject-
matter jurisdiction pursuant to 28 U.S.C. § 1581(i) because the court could not have
jurisdiction pursuant to 28 U.S.C. §§ 1581(a) or (c). See Pl.’s Mot. Opposing Def.’s Mot.
Dismiss 3–4, Feb. 6, 2015, ECF No. 19 (“Pl.’s Opp’n Def.’s Mot. Dismiss”).3
2
Further citations to the Tariff Act of 1930, as amended, are to the relevant portions of
Title 19 of the U.S. Code, 2012 edition.
3
Plaintiff enumerated three counts in its complaint: (1) Commerce’s liquidation
instructions were null and void because they were issued beyond the ten day period
prescribed in 19 U.S.C. § 1675(a)(3)(C) for Commerce to transmit to the Federal Register
for publication the final disposition and to issue instructions to the Customs Service with
respect to the liquidation of entries pursuant to the review, and thus, the subject entries
should be “deemed liquidated” pursuant to 19 U.S.C. § 1504(d); (2) the period for deemed
liquidation under 19 U.S.C. § 1504(d) is triggered when final results of the third remand
are published in the Federal Register, and here, final results of the third remand were
never published in the Federal Register, thus, the entries should be treated as having
been liquidated under § 1504(d); and (3) pursuant to the Administrative Procedure Act, 5
U.S.C. § 702 (“APA”) Commerce’s instructions were erroneous because they were
untimely and never published in the Federal Register, thus, the subject imports were
deemed liquidated. See Pl.’s Compl. ¶¶ 13–20.
Court No. 14-00200 Page 5
JURISDICTION
“The Court of International Trade, like all federal courts, is a court of limited
jurisdiction.” See Sakar Int’l, Inc. v. United States, 516 F.3d 1340, 1349 (Fed. Cir. 2008).
A party invoking the court’s jurisdiction bears the burden of establishing it and may not
expand jurisdiction by creative pleading. Norsk Hydro Can., Inc. v. United States, 472
F.3d 1347, 1355 (Fed. Cir. 2006). It is well-settled that a party may not invoke jurisdiction
under § 1581(i) “when jurisdiction under another subsection of § 1581 is or could have
been available, unless the remedy provided under that other subsection would be
manifestly inadequate.” Miller & Co. v. United States, 824 F.2d 961, 963 (Fed. Cir. 1987)
(citations omitted). Thus, the court must look to the “true nature of the action” to determine
whether jurisdiction under § 1581(i) exists. Norsk Hydro Can., 472 F.3d at 1355.
DISCUSSION
As indicated above, Plaintiff claims jurisdiction exists pursuant to 28 U.S.C.
§ 1581(i), the Court of International Trade’s residual jurisdiction, which provides:
(i) In addition to the jurisdiction conferred upon the Court of International
Trade by subsections (a)-(h) of this section and subject to the exception set
forth in subsection (j) of this section, the Court of International Trade shall
have exclusive jurisdiction of any civil action commenced against the United
States, its agencies, or its officers, that arises out of any law of the United
States providing for--
(1) revenue from imports or tonnage;
(2) tariffs, duties, fees, or other taxes on the importation of
merchandise for reasons other than the raising of revenue;
(3) embargoes or other quantitative restrictions on the importation of
merchandise for reasons other than the protection of the public
health or safety; or
Court No. 14-00200 Page 6
(4) administration and enforcement with respect to the matters
referred to in paragraphs (1)-(3) of this subsection and subsections
(a)-(h) of this section.
This subsection shall not confer jurisdiction over an antidumping or
countervailing duty determination which is reviewable either by the Court of
International Trade under section 516A(a) of the Tariff Act of 1930 or by a
binational panel under article 1904 of the North American Free Trade
Agreement or the United States-Canada Free-Trade Agreement and
section 516A(g) of the Tariff Act of 1930.
28 U.S.C. § 1581(i). The true nature of Plaintiff’s claims involves a protestable CBP
decision regarding liquidation and/or deemed liquidation, therefore § 1581(a) jurisdiction
would not have been manifestly inadequate.
Plaintiff asserts, in each of its three counts, that its entries were deemed liquidated
pursuant to 19 U.S.C. § 1504(d). See Pl.’s Compl. ¶¶ 13–20. Plaintiff argues that deemed
liquidation occurred as a result of a failure of Commerce to: 1) comply with a statutory
time period for issuing liquidation instructions, 2) publish notice of a final disposition in the
Federal Register, or 3) issue valid liquidation instructions in violation of the APA. Id. All
of these “deemed liquidation” theories essentially argue that administrative errors caused
CBP to liquidate entries it should not have liquidated. However, a decision by CBP as to
liquidation is a protestable CBP decision regardless of any administrative errors which
Commerce may have committed prior to CBP’s decision. While CBP makes no decision
as to the substance of Commerce’s instructions, i.e., antidumping duty rates, the decision
as to when to implement those instructions through the process of liquidation belongs to
CBP. See, e.g., Cemex, S.A. v. United States, 384 F.3d 1314, 1324 (Fed. Cir. 2004)
Court No. 14-00200 Page 7
(footnotes omitted) (explaining that Customs makes no decision in calculating
antidumping duties, but makes a decision regarding liquidation).
Section 1504(d) provides:
(d) Removal of suspension
Except as provided in section 1675(a)(3) of this title, when a suspension
required by statute or court order is removed, the Customs Service shall
liquidate the entry, unless liquidation is extended under subsection (b) of
this section, within 6 months after receiving notice of the removal from the
Department of Commerce, other agency, or a court with jurisdiction over the
entry. Any entry (other than an entry with respect to which liquidation has
been extended under subsection (b) of this section) not liquidated by the
Customs Service within 6 months after receiving such notice shall be
treated as having been liquidated at the rate of duty, value, quantity, and
amount of duty asserted by the importer of record or (in the case of a
drawback entry or claim) at the drawback amount asserted by the drawback
claimant.
19 U.S.C. § 1504(d). Section 1514(a)(5) specifically identifies decisions under § 1504(d)
as protestable decisions. It provides that CBP decisions,
including the legality of all orders and findings entering into the same, as
to--
...
(5) the liquidation or reliquidation of an entry, or reconciliation as to
the issues contained therein, or any modification thereof, including
the liquidation of an entry, pursuant to either section 1500 of this title
or section 1504 of this title;
...
shall be final and conclusive upon all persons . . . unless a protest is filed in
accordance with this section, or unless a civil action contesting the denial
of a protest, in whole or in part, is commenced in the United States Court of
International Trade in accordance with chapter 169 of Title 28 within the
time prescribed by section 2636 of that title.
19 U.S.C. § 1514(a)(5). Pursuant to 19 U.S.C. § 1515, CBP reviews protests of CBP
decisions listed in 19 U.S.C. § 1514, and the Court of International Trade reviews actions
Court No. 14-00200 Page 8
contesting the denial of such protests under its 28 U.S.C. § 1581(a) jurisdiction.
Therefore, under 19 U.S.C. § 1514(a)(5), Plaintiff could have protested the liquidation
based upon a claim that the goods had already been deemed liquidated and contested
any denial of such a protest under 28 U.S.C. § 1581(a). While Plaintiff protested CBP’s
liquidation of its entries pursuant to § 1514(a)(5), it did not file a claim at this Court
contesting the denial of its protests. As Plaintiff did not pay the duties and interest due
upon liquidation, it did not meet the jurisdictional prerequisites for bringing an action to
challenge the denial of a protest. See 28 U.S.C. § 2637(a). However, as the U.S. Court
of Appeals for the Federal Circuit has held, jurisdiction under § 1581(i) is not appropriate
“when jurisdiction under another subsection of § 1581 is or could have been available . .
. .” Miller, 824 F.2d at 963 (citations omitted). Thus, Plaintiff’s claims must be dismissed
for lack of jurisdiction because a remedy under § 1581(a) would not have been manifestly
inadequate.
The Court of Appeals addressed deemed liquidation claims in Fujitsu Gen. Am.,
Inc. v. United States, 283 F.3d 1364, 1373–76 (Fed. Cir. 2002). In Fujitsu, the plaintiff
argued that the Court of International Trade had § 1581(i) jurisdiction to review its untimely
protested deemed liquidation claims. Id. The plaintiff filed several protests with Customs,
contesting interest assessed on its entries. Id. at 1369. Subsequently, the plaintiff filed
supplemental letters with Customs claiming that its merchandise had been deemed
liquidated pursuant to 19 U.S.C. § 1504(d) at the rate claimed at the time of entry. Id. at
1369–70. The plaintiff’s deemed liquidation theory was rejected because the plaintiff
“could have invoked the jurisdiction of the Court of International Trade under 28 U.S.C.
Court No. 14-00200 Page 9
§ 1581(a) if, pursuant to 19 U.S.C. § 1514(a)(5), it had timely protested the liquidations .
. . .” Id. at 1374. At the time of Fujitsu, the clause “including the liquidation of an entry,
pursuant to either section 1500 or section 1504 of this title” was not in 19 U.S.C. § 1514,
and, yet, the Court of Appeals held that decisions as to deemed liquidation were
protestable and not subject to § 1581(i) jurisdiction. The subsequent amendment of the
statute to explicitly include “section 1504” in the text only confirmed the Court of Appeals’
holding. See Alden Leeds Inc. v. United States, 476 Fed. App’x 393, 397 (Fed. Cir. 2012).
Responding to Defendant’s motion to dismiss, Plaintiff argues that § 1581(c) is not
available because it is not challenging the final results of an administrative review, but
rather Commerce’s “automatic assessment procedure.” Pl.’s Opp’n Def.’s Mot. & App. 6.
The court agrees in part with Plaintiff’s argument. Plaintiff could not have brought its
claims in a § 1581(c) case. As Plaintiff explains, “[i]t had no objections to the Court’s
June 2013 order.” Id. at 7. Moreover, as Plaintiff explains, “[t]here is no dispute that
Commerce’s liquidation instructions are consistent with both the final results and the
court’s June, 2013 order.” Id. at 8. However, this does not save Plaintiff because as
discussed above, Plaintiff’s claims are a challenge to CBP’s decision as to liquidation, or
deemed liquidation. CBP liquidated Plaintiff’s entries at the rate specified in Commerce’s
liquidation instructions. Thereafter, Plaintiff filed protests with CBP, arguing that the
entries had already been deemed liquidated at the rate asserted at the time of entry
because liquidation occurred more than six months after the Lifestyle court issued its
opinion on February 5, 2013. See Def.’s Mot. & App. 7, DA44–45, 47–48. In denying
Plaintiff’s protests, CBP determined that the goods had not been deemed liquidated at
Court No. 14-00200 Page 10
the entered rate. CBP found that pursuant to 19 U.S.C. § 1504(d), it had not received
notice that suspension of liquidation had been removed until Commerce issued liquidation
instructions on June 25, 2013. See id. at 7, DA46, DA49. According to CBP, the six
month deadline for deemed liquidation had not yet passed when CBP liquidated Plaintiff’s
entries. Id. Any objection Plaintiff had to CBP’s decision would have formed the basis of
a claim under 28 U.S.C. § 1581(a) pursuant to 19 U.S.C. § 1514(a)(5).
Plaintiff incorrectly claims that it is challenging a Commerce decision. Pl.’s Opp’n
Def.’s Mot. & App. 6. Each of its deemed liquidation theories rest upon the foundation
that something other than Commerce’s liquidation instructions on June 25, 2013 served
as notice to Customs and triggered the running of the six months deemed liquidation
timeframe provided by 19 U.S.C. § 1504. If, under Plaintiff’s theories, something other
than Commerce’s instructions triggered the six month time frame but Customs did not
acknowledge it, that would have been Customs’ error. The court does not reach the
question of whether these theories of notice have merit. However, the true nature of
Plaintiff’s claim is that Customs failed to act as required by 19 U.S.C. § 1504(d) and that
is a protestable decision.
Responding to Defendant-Intervenors’ motion to dismiss, Plaintiff argues “[Plaintiff]
did not file a section 1581(a) claim in this Court supra. Therefore, the [sic] 1581(a) was
not a viable option for [Plaintiff].” Pl.’s Mot. Opposing Def.-Intervenors’ Mot. Dismiss 4,
Feb. 6, 2015, ECF No. 20 (“Pl.’s Opp’n Def-Intervenors’ Mot. Dismiss”). Plaintiff’s reasons
for not filing a § 1581(a) claim, not having “the $190,000 in duties and interest to pay prior
to the filing of the summons, and, more importantly [that] there was no Customs error in
Court No. 14-00200 Page 11
the liquidations,” fall flat. Pl.’s Opp’n Def-Intervenors’ Mot. Dismiss 3–4. Plaintiff’s
inability to pay the duties necessary to file a § 1581(a) claim do not make remedies
available under § 1581(a) inadequate. See Int’l Custom Prods., Inc. v. United States, 467
F.3d 1324, 1327 (Fed. Cir. 2006) (citations omitted). Moreover, as the court discussed
above, the true nature of Plaintiff’s claims is that CBP incorrectly liquidated its
merchandise. That CBP decision is protestable. Plaintiff’s argument that “there was no
Customs error in the liquidations” does not change the fact that it is complaining about a
CBP decision to liquidate the goods. Plaintiff’s artful pleading and responses to motions
to dismiss do not set forth a claim for which the court has subject-matter jurisdiction.
Plaintiff unpersuasively attempts to analogize its claims and the facts of this case
to a “proactive” version of the facts of United States v. Cherry Hill Textiles, Inc., 112 F.3d
1550 (Fed. Cir. 1997). Plaintiff argues that Fujitsu “would be inapplicable where as here
[Plaintiff] is, inter alia, in essence defending a possible government enforcement action.”
Pl.’s Opp’n Def-Intervenors’ Mot. Dismiss 5. In Cherry Hill, the Court of Appeals allowed
the defendant importer and surety to pursue a deemed liquidation theory as an affirmative
defense in an enforcement action brought by the government. The facts and reasoning
of that case are inapplicable. The entire reasoning of the case was premised on the fact
that defendants were involved in a government enforcement action, not pursuing a claim
against the government. Cherry Hill, 112 F.3d at 1552.
Plaintiff’s attempt to analogize to Shinyei Corp. of Am. v. United States, 355 F.3d
1297 (Fed. Cir. 2004), also must fail. As Defendant explains, Plaintiff’s argument
challenging liquidation instructions pursuant to Shinyei Corp. is faulty because
Court No. 14-00200 Page 12
“Commerce’s liquidation instructions are consistent with both the final results and the
Court’s June 2013 order that directed liquidation without delay.” Def.’s Mot. & App. 13.
As indicated above, Plaintiff concedes this in its brief. See Pl.’s Opp’n Def.’s Mot. Dismiss
8. None of the other cases Plaintiff cites to support this argument persuade the court
either. The distinguishing factor in all those cases is that the party challenged the
substance of Commerce’s liquidation instructions, not CBP’s decision to liquidate. See
Shinyei Corp., 355 F.3d at 1306 (explaining that the plaintiff’s action challenged the rate
in Commerce’s liquidation instructions as inconsistent with a final court decision, a
Commerce decision not listed in 19 U.S.C. § 1516a); Mitsubishi Elecs., 44 F.3d at 977
(denying jurisdiction under § 1581(a) because the plaintiff’s challenge was to Commerce’s
decision as to the rates in its liquidation instructions).
For the foregoing reasons, Plaintiff’s claims are dismissed with prejudice. The
court will issue a judgment in accordance with this opinion.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: June 9, 2015
New York, New York