Ethan Allen Global, Inc. v. United States , 37 F. Supp. 3d 1371 ( 2014 )

Slip Op. 14-161
UNITED STATES COURT OF INTERNATIONAL TRADE
ETHAN ALLEN GLOBAL, INC. and
ETHAN ALLEN OPERATIONS, INC.,
Plaintiffs,
v. Before: Timothy C. Stanceu, Chief Judge
UNITED STATES and UNITED STATES Court No. 13-00183
INTERNATIONAL TRADE
COMMISSION,
Defendants.
OPINION
[Dismissing an action for failure to state a claim upon which relief can be granted in an action
seeking distributions under the Continued Dumping and Subsidy Offset Act of 2000]
Dated: December 31, 2014
Jill A. Cramer, Kristin H. Mowry, Jeffrey S. Grimson, Sarah Wyss, and Daniel R. Wilson,
Mowry & Grimson, PLLC, of Washington, DC, for plaintiffs Ethan Allen Global, Inc. and Ethan
Allen Operations, Inc.
Franklin E. White, Jr., Assistant Director, Martin M. Tomlinson, Trial Attorney, Jeanne
E. Davidson, Director, and Joyce R. Branda, Acting Assistant Attorney General, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant
United States.
Robin L. Turner, Acting Assistant General Counsel for Litigation, Patrick V. Gallagher,
Jr., Attorney-Advisor, and Dominic L. Bianchi, General Counsel, Office of the General Counsel,
U.S. International Trade Commission, of Washington, DC, for defendant U.S. International
Trade Commission.
Stanceu, Chief Judge: This case arose from the actions of two agencies, the U.S.
International Trade Commission (the “Commission” or “ITC”) and U.S. Customs and Border
Protection (“Customs” or “CBP”), that denied plaintiffs Ethan Allen Global, Inc. and Ethan
Allen Operations, Inc. (collectively, “Ethan Allen”) certain monetary benefits under the
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now-repealed Continued Dumping and Subsidy Offset Act of 2000 (the “CDSOA” or “Byrd
Amendment”), §§ 1001-03, 114 Stat. 1549, 19 U.S.C. § 1675c (2000) (repealed 2006, effective
2007). Compl. ¶¶ 1, 27-34 (May 8, 2013), ECF No. 4 (“Compl.”). The ITC determined that
Ethan Allen did not qualify for “affected domestic producer” (“ADP”) status, which would have
made Ethan Allen eligible to receive distributions of duties collected under an antidumping duty
order on wooden bedroom furniture from the People’s Republic of China (“PRC” or “China”)
because Ethan Allen, in responding to an ITC questionnaire, stated that it took no position on the
petition that resulted in the order. Compl. ¶¶ 22, 27, 28. Customs made no CDSOA
distributions to Ethan Allen for Fiscal Years 2011 and 2012. Compl. ¶¶ 32-33.
Plaintiffs brought this case alleging various facial and as-applied constitutional
challenges to the CDSOA and claiming that the actions by the ITC and Customs violated the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706 (2006). Compl. ¶¶ 37-55. Plaintiffs
seek declaratory and injunctive relief to establish Ethan Allen as eligible for a distribution of
antidumping duties collected on the relevant order for Fiscal Years 2011 and 2012, as well as for
future distributions under the CDSOA, and mandating the distribution of Ethan Allen’s pro rata
share of such distributions. Compl. ¶ 1, Prayer for Relief (1), (2). Plaintiffs also seek declaratory relief
“that the conduct of CBP and the ITC in limiting eligibility for disbursement of funds to those
ADPs that expressed supported for antidumping petitions and denying eligibility to those ADPs
that supported the Petition through their conduct is unlawful, arbitrary, capricious, an abuse of
discretion, not supported by substantial evidence, and in violation of Ethan Allen’s constitutional
rights.” Compl. ¶ 1, Prayer for Relief (4). Finally, plaintiffs seek damages as a result of being excluded
from past and current CDSOA distributions and reasonable attorney’s fees and costs. Compl. ¶ 1, Prayer
for Relief (3), (5).
Court No. 13-00183 Page 3
Before the court is defendants’ motion to dismiss under USCIT Rule 12(b)(5) for failure
to state a claim upon which relief can be granted. Defs.’ Mot. to Dismiss (Apr. 24, 2014), ECF
No. 23 (“Defs.’ Mot.”). The court determines that no relief is available on any of plaintiffs’
claims and will enter judgment dismissing this action.
I. BACKGROUND
Background on this action is provided in the court’s prior opinion, Ethan Allen Global,
Inc. v. United States, 38 CIT __, Slip Op. 14-76 (June 27, 2014) (“Ethan Allen I”) (denying
motion to stay), and is supplemented herein.
A. The CDSOA
The CDSOA amended the Tariff Act of 1930 (“Tariff Act”) by establishing an annual
distribution of assessed antidumping and countervailing duties to eligible ADPs as
reimbursement for qualifying expenses. 19 U.S.C. § 1675c(a)-(d) (2000). ADP status is limited
to petitioners and interested parties, id. § 1675c(b)(1), that indicated support for the petition that
gave rise to the pertinent antidumping or countervailing duty order “by letter or through
questionnaire response,” id. § 1675c(d)(1). Under the CDSOA, within sixty days after the
International Trade Administration, U.S. Department of Commerce (“Commerce” or the
“Department”) issued an antidumping order, the ITC would forward to Customs a list of ADPs
potentially eligible for CDSOA distributions of duties collected under that order and Customs
would publish that list in the Federal Register. Id. § 1675c(d)(1). Customs was then responsible
for making the annual distributions to qualifying ADPs that file certifications with Customs. Id.
§ 1675c(d)(3), (e).
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B. Administrative Actions at Issue
In 2003, the ITC commenced an investigation to determine whether imports of wooden
bedroom furniture from the People’s Republic of China (“China”) were causing or threatening to
cause material injury to the domestic industry. Initiation of Antidumping Duty Investigation:
Wooden Bedroom Furniture from the People’s Republic of China, 68 Fed. Reg. 70,228 (Int’l
Trade Comm’n Dec. 17, 2003). Ethan Allen domestically manufactures and distributes wooden
bedroom furniture. Compl. ¶ 2. In response to an ITC questionnaire issued during this
investigation, Ethan Allen stated that it took no position on the petition that triggered the
investigation. Compl. ¶ 22. In 2005, Commerce issued an antidumping duty order on imports of
wooden bedroom furniture from China. Notice of Amended Final Determination of Sales at Less
Than Fair Value and Antidumping Duty Order: Wooden Bedroom Furniture From the People’s
Republic of China, 70 Fed. Reg. 329 (Int’l Trade Admin. Jan. 4, 2005).
For Fiscal Years 2011 and 2012, Customs published individual lists of ADPs that the ITC
determined were potentially eligible for CDSOA distributions and did not include Ethan Allen
on either list. Distribution of Continued Dumping and Subsidy Offset to Affected Domestic
Producers, 76 Fed. Reg. 31,020 (Dep’t of Homeland Sec. May 27, 2011) (concerning Fiscal
Year 2011); Distribution of Continued Dumping and Subsidy Offset to Affected Domestic
Producers, 77 Fed. Reg. 32,718 (Dep’t of Homeland Sec. June 1, 2012) (concerning Fiscal
Year 2012). On July 20, 2011, Ethan Allen filed a certification with Customs requesting
CDSOA distributions for Fiscal Year 2011. Compl. ¶ 32. On June 27, 2012, Ethan Allen filed
another certification with Customs, this time requesting CDSOA distributions for Fiscal
Year 2012. Compl. ¶ 33. Customs did not grant Ethan Allen CDSOA distributions for either
Fiscal Years 2011 or 2012. Compl. ¶¶ 32, 33.
Court No. 13-00183 Page 5
C. Procedural History
Plaintiffs commenced this action on May 8, 2013. Summons, ECF No. 1; Compl.
Defendants filed a motion to dismiss the action on April 24, 2014. Defs.’ Mot. 1. Plaintiffs filed
a response to defendants’ motion on June 2, 2014,1 Pl. Ethan Allen Global. Inc. & Ethan Allen
Operations, Inc.’s Resp. to Defs.’ Mot. to Dismiss, ECF No. 24, and defendants filed a reply in
support of the motion on August 22, 2014, Defs.’ Reply in Supp. of Mot. to Dismiss, ECF
No. 37. On June 17, 2014, the court denied a motion by plaintiffs to stay this action pending
final resolution of a petition for a writ of certiorari to the U.S. Supreme Court in a case
concerning the denial of Ethan Allen’s CDSOA distribution requests for Fiscal Years 2006
through 2010. Ethan Allen I, 38 CIT at __, Slip Op. 14-76 at 4-5. Defendants filed a status
report on October 20, 2014, following the U.S. Supreme Court’s denial of the petition for a writ
of certiorari that was the subject of plaintiffs’ motion to stay. Defs. United States & U.S.
Customs & Border Prot.’s Status Report, ECF No. 39; see Ashley Furniture Indus., Inc., et al. v.
United States, 135 S. Ct. 72 (2014) (denying certiorari).
II. DISCUSSION
The court exercises jurisdiction over this matter pursuant to section 201 of the Customs
Courts Act of 1980, 28 U.S.C. § 1581(i) (2006), which grants this Court exclusive jurisdiction
over various civil actions not falling under the jurisdictional grants of subsections (a)-(h) of
section 201 but that arise out of a law of the United States, such as the CDSOA, that provides for
the administration of duties (including antidumping duties) on the importation of merchandise.
1
Plaintiffs’ response to defendants’ motion to dismiss asserts only that the court should
deny defendants’ motion and reiterates its position that the court should stay this case pending
the U.S. Supreme Court’s consideration of a writ of certiorari, a request the court denied. Pl.
Ethan Allen Global. Inc. & Ethan Allen Operations, Inc.’s Resp. to Defs.’ Mot. to Dismiss 1-2
(June 2, 2014), ECF No. 24.
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“[A] judge ruling on a defendant’s motion to dismiss a complaint ‘must accept as true all
of the factual allegations contained in the complaint.’” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007) (“Twombly”) (citations omitted). However, a complaint must be
dismissed if it does not “contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Iqbal”)
(quoting Twombly, 550 U.S. at 570). “Determining whether a complaint states a plausible claim
for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id., 556 U.S. at 679.
In Counts One and Two of the complaint, plaintiffs challenge the CDSOA, both facially
and as applied to Ethan Allen, on First Amendment grounds. Compl. ¶¶ 37–50. In Count Three,
plaintiffs claim that the actions of the ITC and Customs violate the APA and Ethan Allen’s
constitutional rights. Compl. ¶¶ 51-54.
A. No Relief Can be Granted on Plaintiffs’ Constitutional Challenges
Counts One and Two of plaintiffs’ complaint bring several constitutional challenges
grounded in the First Amendment guarantees of free speech and belief and the right to petition
the government for redress of grievances. Compl. ¶¶ 37-50; see U.S. Const. amend. I (“Congress
shall make no law . . . abridging the freedom of speech, or of the press; or the right of the people
peaceably to assemble, and to petition the Government for a redress of grievances.”). In
Count Three, plaintiffs allege that the agencies’ actions “violate[] Ethan Allen’s constitutional
rights,” Compl. ¶ 53, but offer no additional constitutional grounds on which the court may
evaluate plaintiffs’ claims. See Compl. ¶¶ 51-54.
In Count One, plaintiffs bring various as-applied challenges to the CDSOA under the
First Amendment. Compl. ¶ 37-43. Plaintiffs claim specifically that the CDSOA unlawfully
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discriminates against those, such as Ethan Allen, who did not express support for the
antidumping petition. Compl. ¶ 39. They claim, further, that such an application of the CDSOA
is overbroad and not narrowly tailored to achieve a compelling government objective. Compl.
¶ 40. Plaintiffs claim, further, that the CDSOA as applied to Ethan Allen impermissibly compels
speech by requiring manufacturers such as plaintiffs to articulate support for a specific policy,
Compl. ¶ 41, and imposes viewpoint discrimination in a designated public form for political
speech in a way that is not narrowly drawn to any compelling state interest. Compl. ¶ 42.
Plaintiffs bring, in Count Two, various facial challenges to the CDSOA under the First
Amendment. Compl. ¶¶ 44-50. Plaintiffs claim specifically that the CDSOA engages in
impermissible viewpoint discrimination and conditions a government benefit on the content of
political speech, i.e., expression of support for an antidumping petition. Compl. ¶ 46. They
claim, further, that the CDSOA is overbroad and not narrowly tailored to achieve a compelling
government objective, Compl. ¶ 47, and that the statute imposes an unconstitutional condition on
the receipt of a government benefit by requiring domestic manufacturers to articulate support for
a particular policy in a designated public forum for political speech, Compl. ¶¶ 48–49.
The court concludes that plaintiffs’ constitutional challenges are foreclosed by binding
precedent and, therefore, must be dismissed. In Ashley Furniture Industries, Inc., 734 F.3d 1306
(Fed. Cir. 2013) (“Ashley”), the U.S. Court of Appeals for the Federal Circuit (“Court of
Appeals”) denied the relief requested on First Amendment grounds in a joint decision addressing
the appeals of two related decisions of this Court. One of the decisions on appeal was Ethan
Allen Global Inc. v. United States, 36 CIT __, 816 F. Supp. 2d 1330 (2012) (“Ethan Allen”), in
which Ethan Allen challenged the ITC’s refusal to designate Ethan Allen as an ADP and CBP’s
refusal to disburse to Ethan Allen funds collected under the relevant antidumping order, but with
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respect to CDSOA distributions for Fiscal Years 2006 through 2010. Id. at __, 816 F. Supp. 2d
at 1333. In Ashley, the Court of Appeals rejected both Ethan Allen’s facial and as-applied
challenges under the First Amendment, which were brought on nearly identical grounds to the
challenges Ethan Allen now brings. The Court of Appeals stated that “the government did not
deny Byrd Amendment distributions to Appellants solely on the basis of abstract expression,”
Ashley, 734 F.3d at 1310, and that Ethan Allen’s facial First Amendment challenges in that case
were precluded by the holding in SKF USA, Inc. v. U.S. Customs & Border Prot.,
556 F.3d 1337, 1382 (Fed. Cir. 2009) (“SKF”), cert. denied, 130 S. Ct. 3273 (2010). See Ashley,
734 F.3d at 1310 (“We are bound to follow this precedent and are not free to revisit the First
Amendment arguments that were before the SKF panel.”). In SKF, the Court of Appeals held
broadly that the CDSOA is “valid under the First Amendment” because it “is within the
constitutional power of Congress to enact, furthers the government’s substantial interest in
enforcing the trade laws, and is not overly broad.” SKF, 556 F.3d at 1360.
In summary, plaintiffs have failed to allege facts sufficient to demonstrate that its
constitutional claims are not foreclosed by the binding precedents of Ashley and SKF. As to
these claims, therefore, the complaint does not “contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 662, 129 S.
Ct. 1937 (citation omitted). The court must dismiss these claims pursuant to defendants’ motion
under USCIT Rule 12(b)(5).
B. No Relief Can be Granted on Plaintiffs’ Statutory Challenges
Plaintiffs’ complaint alleges that the actions of the ITC and Customs violated the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706, and that the conduct of the two agencies
was “arbitrary, capricious, and an abuse of discretion.” Id. ¶¶ 51-54. Specifically, plaintiffs
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allege that the agencies “inappropriately treated similarly-situated domestic producers
differently, without any rational basis for doing so,” and unlawfully “limit[ed] the definition of
Affected Domestic Producer to include only those domestic producers who supported the
Petition by their conduct and expressed support for the petition, while excluding from this
definition those domestic producer who likewise supported the Petition by their conduct but did
not express support for the petition.” Id. ¶ 53. Relying on a decision of the Court of Appeals,
plaintiffs assert that such an interpretation conflicts with the purpose of the CDSOA, which,
according to plaintiffs, is “to reward domestic producers who support the Petition through their
conduct.” Id. (citing PS Chez Sidney, L.L.C. v. U.S. Int’l Trade Comm’n, 684 F.3d 1374, 1382
(Fed. Cir. 2012) (“PS Chez Sidney”)).
The court concludes that, on the facts as pled in the complaint, no relief can be granted on
plaintiffs’ statutory claims. The CDSOA provision relevant to these claims is the directive that
the ITC, in providing its list of ADPs to Customs, include “a list of persons that indicate support
of the petition by letter or through questionnaire response.” 19 U.S.C. § 1675c(d)(1) (emphasis
added). Plaintiffs admit that in its questionnaire responses, “Ethan Allen took no position on the
petition . . . .” Compl. ¶ 22. The court must dismiss plaintiffs’ statutory claims that the actions
by the two agencies violated the APA because plaintiffs have admitted that Ethan Allen did not
support the petition in its questionnaire response—a fact disqualifying Ethan Allen from
receiving CDSOA distributions under the plain meaning of the statute—and present no other
facts from which the court could reach a conclusion that the agencies’ actions must be set aside.
Plaintiffs’ contention that the purpose of the CDSOA is “to reward domestic producers
who support the Petition through their conduct,” Compl. ¶ 53, does not save plaintiffs’ statutory
claims. In neither SKF nor PS Chez Sidney did the Court of Appeals construe the CDSOA such
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that a domestic producer may take no position on a petition in its ITC questionnaire responses
and still be eligible to receive CDSOA distributions. To the contrary, the Court of Appeals in
SKF reasoned that in enacting the petition support requirement, Congress had permissibly, and
rationally, concluded that those who did not support a petition through a letter or questionnaire
response should not be rewarded. SKF, 556 F.3d at 1357, 1359 (“At best the role of parties
opposing (or not supporting) the petition in responding to questionnaires is similar to the role of
opposing or neutral parties in litigation who must reluctantly respond to interrogatories or other
discovery. . . . It was thus rational for Congress to conclude that those who did not support the
petition should not be rewarded.”). The Court of Appeals’ decision in PS Chez Sidney is not
applicable to this action because it concerned a different factual pattern from the instant case.
The party in PS Chez Sidney checked a box in one questionnaire indicating its support for the
petition and indicated that it took no position in a subsequent questionnaire. PS Chez Sidney,
684 F.3d at 1377. The holding in PS Chez Sidney did not qualify the holding in SKF to the
benefit of parties that did not take a position in support of the petition. Id., 684 F.3d at 1381.
In Ashley, the Court of Appeals explained that “under the plain meaning of the Byrd
Amendment . . . [i]t is not enough . . . merely to supply the answers to the questionnaires,”
Ashley, 734 F.3d at 1311, because “[t]he plain language of the statute requires ‘support of the
petition’ in order to obtain a distribution,” id. (citing 19 U.S.C. § 1675c(b)(1)(A)), and “[a]
producer meets that requirement when it ‘indicate[s] support . . . by letter or through
questionnaire response,’” id. (citing 19 U.S.C. § 1675c(d)(1)). Referring to the same
questionnaire responses at issue here, the Court of Appeals stated that “[t]he conclusion that a
producer who indicates that it ‘takes no position’ in a questionnaire is a supporter is []
incongruous [with the plain language of the statute] because such a producer has not ‘indicated
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support.’” Ashley, 734 F.3d at 1311; see also Compl. ¶ 22 (“Ethan Allen took no position on the
petition . . . .”). Plaintiffs fail to plead any facts that would allow the court to distinguish the
application of the CDSOA to Ethan Allen in this case from its application to Ethan Allen in
Ashley. Ethan Allen’s expression that it took no position on the antidumping duty petition did
not satisfy the plain meaning of the statute and properly resulted in Ethan Allen’s disqualification
from receiving distributions under the CDSOA.
Because the statute precludes ADP status to parties that did not support the petition
through letter or questionnaire response, plaintiffs can receive no relief on their statutory claims
on the facts pled and the court, therefore, must dismiss these claims pursuant to USCIT
Rule 12(b)(5).
III. CONCLUSION
For the foregoing reasons, defendants’ motion to dismiss this case under USCIT
Rule 12(b)(5) for failure to state a claim must be granted. The court will enter judgment
dismissing this action.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Chief Judge
Dated: December 31, 2014
New York, NY