Int'l Trading Co. v. United States , 2004 CIT 1 ( 2004 )

Slip Op. 04-1
UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
INTERNATIONAL TRADING CO., :
:
Plaintiff, :
:
v. : Before: WALLACH, Judge
: Court No.: 98-08-02658
UNITED STATES, :
:
Defendant. : PUBLIC VERSION
:
____________________________________:
[Plaintiff’s Motion for Summary Judgment is Granted; Defendant’s Cross-Motion for Summary
Judgment is Denied]
Decided: January 2, 2004
Rode & Qualey (R. Brian Burke and William J. Maloney), for Plaintiff.
Peter D. Keisler, Assistant Attorney General, Civil Division, United States Department of
Justice; Barbara S. Williams, Acting Attorney in Charge, International Trade Field Office; James
A. Curley, Attorney, Commercial Litigation Branch, Civil Division; Edward N. Maurer, Office
of Assistant Chief Counsel, United States Customs Service, Of Counsel; Dean A. Pinkert, Office
of Chief Counsel for Import Administration, United States Department of Commerce, Of
Counsel, for Defendant.
OPINION
WALLACH, Judge:
I
INTRODUCTION
This action comes before the court on Plaintiff International Trading Co.’s (“Int’l
Trading”) Motion for Summary Judgment (“Plaintiff’s Motion”) and Defendant’s Cross-Motion
for Summary Judgment (“Defendant’s Cross Motion”). Plaintiff is an importer of shop towels
from Bangladesh who seeks a refund of the increased antidumping duty applied by the United
1
States Customs Service (“Customs”)1 plus the accrued interest paid on its entry. Plaintiff argues
that deemed liquidation occurred six months after the Federal Register notice, which was prior to
the date on which Customs actually liquidated its entry. Defendant claims that Customs correctly
applied the dumping margin and liquidated Plaintiff’s entry and that there was no deemed
liquidation. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a). For the reasons set forth
below, the court grants summary judgment to Plaintiff.
II
BACKGROUND
This case is similar in all material respects to the action that was the subject of this
court’s decision in Int’l Trading Co. v. United States, 110 F. Supp. 2d 977 (CIT 2000) (“Int’l
Trading I , aff’d in Int’l Trading Co. v. United States, 281 F.3d 1268 (Fed. Cir. 2002) (“Int’l
Trading II , reh’g denied, 2002 U.S. App. LEXIS 11482, except that the entry of shop towels
covered by this case was made on or about March 3, 1994, approximately one month later than
the last entry covered by Int’l Trading II. Thus, this entry falls within the period covered by the
third administrative review of the antidumping order against shop towels from Bangladesh, rather
than the period covered by the second administrative review.
Commerce initiated the third administrative review of shop towels from Bangladesh by
notice published in the Federal Register on April 14, 1995, Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 60 Fed. Reg. 19,017 (Apr. 14, 1995), and
liquidation of Int’l Trading’s entry was suspended pursuant to 19 U.S.C. § 1673(d). The entries
1
The United States Customs Service was renamed the United States Bureau of
Customs and Border Protection, effective March 1, 2003. See Homeland Security Act of
2002, Pub. L. 107-296, § 1502, 116 Stat. 2135, 2308-09 (2002); Reorganization Plan for the
Department of Homeland Security, H.R. Doc. No. 108-32 (2003).
2
covered by the third review are subject to the 1994 amendments under the Uruguay Round
Agreements Act (“URAA”); those covered by the second review were not. URAA, Pub. L. No.
103-465, 108 Stat. 4809 (1994); See also Torrington Co. v. United States, 68 F.3d 1347, 1352
(Fed. Cir. 1995).
In Int’l Trading II, the Federal Circuit affirmed this court’s decision that the entries
covered by the second administrative review were deemed liquidated pursuant to 19 U.S.C.
1504(d) (1993) (“§ 1504(d)(1993)”), holding that, in the context of entries whose liquidation had
been suspended by statute pending completion of an administrative review, “the publication of
the final results in the Federal Register constituted notice from Commerce to Customs that the
suspension of liquidation on the subject entries had been removed” within the meaning of §
1504(d) (1993). Int’l Trading II, 281 F.3d at 1277. The Federal Circuit also observed that §
1504(d) (1993) had subsequently “been amended, but not in ways material to the issues in [that]
case.” Id. at 1271.
The final results of the third administrative review covering the entry that is the subject of
the instant action were published in the Federal Register on October 30, 1996. Shop Towels
From Bangladesh; Final Results of Antidumping Duty Administrative Review, 61 Fed. Reg.
55,957 (Oct. 30, 1996). Commerce issued liquidation instructions to Customs by e-mail on July
1, 1997, informing Customs that suspension of liquidation was lifted and to liquidate entries
subject to the administrative review. Customs liquidated this entry with increased antidumping
duties on September 26, 1997, almost one year after publication of the final results. Plaintiff
protested the liquidation, arguing the entry had been deemed liquidated pursuant to 19 U.S.C.
1504(d) (1994) (“§ 1504(d)(1994)”). This protest was denied by Customs on the grounds that
3
the period for deemed liquidation was not triggered until Customs received liquidation
instructions from Commerce. Shop Towels From Bangladesh, 61 Fed. Reg. 55,957. Upon
denial of its protest, Plaintiff commenced this action and now seeks a refund of excess duty and
interest paid on the entry.
III
APPLICABLE LEGAL STANDARDS
A
STANDARD OF REVIEW
Summary judgment is appropriate when, “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with affadavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” USCIT R. 56(d); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106
S. Ct. 2505, 91 L. Ed. 2d 202 (1986). In a motion for summary judgment, the movant bears the
burden of demonstrating that there is no genuine issue of material fact. SRI Int’l v. Matsushita
Elec. Corp. of Am., 775 F.2d 1107, 1116 (Fed. Cir. 1985). This may be accomplished by
producing evidence showing the lack of any genuine issue of material fact or, where the non-
moving party bears the burden of proof at trial, by demonstrating that the nonmovant has failed
to make a sufficient showing to establish the existence of an element essential to its case. Celotex
Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The inferences
drawn from the underlying facts are viewed in favor of the nonmovant.2
2
Because Customs has not given an official interpretation of the relevant statutory
language or an official ruling with the denied protest, neither Chevron U.S.A. Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984) nor United States v.
Mead Corp., 533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 292 (2001); Skidmore v. Swift & Co.,
323 U.S. 134, 65 S. Ct. 161, 89 L. Ed. 124 (1944) deference apply. See Hartog Foods Int’l, Inc.
v. United States, 291 F.3d 789, 791 (Fed. Cir. 2002).
4
IV
ANALYSIS
A
Customs’ Interpretation of 19 U.S.C. § 1504(d) Is an
Impermissible Construction of the Statute
Two statutes are relevant to this case. First, Plaintiff’s claim that the entry in issue was
deemed liquidated at the rate and amount of duty deposited is based on § 1504(d) (1994), which
directs that
[e]xcept as provided in [19 U.S.C. 1675(a)(3)], 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. Any entry 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 at the time of entry by the
importer of record.
The first clause of this provision, referencing 19 U.S.C. § 1675(a)(3), was added by the URAA §
220(c) in 1994.3 H.R. Doc. No. 103-316 at 143 (1994); Plaintiff’s Motion, App. Exh. J. In 1993,
prior to the passage of the URAA, § 1504(d) was amended by Congress.4 See Int’l Trading II,
281 F. 3d at 1272; North American Free Trade Agreement Implementation Act, Pub. L. No. 103-
3
The conforming amendment refers to section 751(a)(3) of the Tariff Act of 1930,
which is codified at 19 U.S.C. § 1675(a)(3).
4
The amendment was designed in part to address an anomaly in
the prior version of the statute, which made deemed liquidation
available if suspension of liquidation were removed before the
expiration of the maximum four-year period for liquidating
entries, but not if suspension of liquidation were removed after
expiration of the four-year period.
Int’l Trading II, 281 F. 3d at 1272; See also Dal-Tile Corp. v. US, 17 CIT 764, 767-68
(1993).
5
182, 107 Stat. 2057, sec. 641 (1993). The Federal Circuit explained that one of the effects and
rationales of the 1993 amendment to § 1504(d) was a “consequence of Customs’ failure to
liquidate within [the] six month period,” suggesting that “one of the principal objectives of the
1993 amendments [was not giving] the government the unilateral ability to extend the time for
liquidating entries indefinitely.” Int’l Trading II, 281 F.3d at 1272-73.
The second relevant statute is subparagraph B of § 1675(a)(3), the provision newly
referenced in § 1504(d) (1994). The relevant section, § 1675(a)(3)(B), provides that
[i]f the administering authority orders any liquidation of entries pursuant to a review under
paragraph (1), such liquidation shall be made promptly and, to the greatest extent practicable,
within 90 days after the instructions to Customs are issued. In any case in which liquidation
has not occurred within that 90-day period, the Secretary of the Treasury shall, upon the
request of the affected party, provide an explanation thereof.
The United States contends that the entry in question is subject wholly to § 1675(a)(3)(B)
as a result of the 1994 amendatory language in § 1504(d), or, in the alternative, that the addition
of § 1675(a)(3)(B) alters the triggering date for deemed liquidation, effectively challenging the
decision and rationale of the Federal Circuit in Int’l Trading II. Int’l Trading argues that §
1504(d) (1994) and § 1675(a)(3)(B) work in concert, so that the former deemed liquidation
consequence applies even if an entry is also subject to the latter. In other words, Plaintiff argues
that there is no need for this court even to reach § 1675(a)(3)(B) because deemed liquidation
would have happened, in this case, within six months of the Federal Register notice as per §
1504(d). Plaintiff’s argument is correct.
6
1
Textual Analysis Shows International Trading II’s Holding of Notice from
Publication Requires No Reconsideration
Statutory construction begins with the plain language of the statute. Robinson v. Shell
Oil Co., 519 U.S. 337, 340, 117 S. Ct. 843, 136 L. Ed. 2d 808 (1997). The court should look
beyond the plain meaning of the statute only if the language is ambiguous or if a literal
interpretation would frustrate the purpose behind the statute. Bob Jones Univ. v. United States,
461 U.S. 574, 586, 103 S. Ct. 2017, 76 L. Ed. 2d 157 (1983). Here, neither the plain language of
§ 1504(d) (1994) and § 1675(a)(3)(B), nor applicable principles of statutory interpretation,
require reconsideration of the issues decided in Int’l Trading II. Neither provision changes the
required method of notice5 from publication, as held by the Federal Circuit in Int’l Trading II,
back to the issuance of liquidation instructions, as the government contends. An examination of
the statutory language strengthens the conclusion that § 1504(d) (1994) and § 1675(a)(3)(B) work
in concert to effectuate expedient Customs liquidation.
The words “any entry” in the second clause of § 1504(d) (1994) also encompasses entries
subject to the proviso in the first clause.6 The plain meaning of “any entry” is any entry,
including ones covered by the proviso. The government contends that the second clause of §
1504(d) (1994) is dependent upon the first clause for its meaning, so that the “any entry”
language is qualified by the amendatory proviso. The court, however, looks first to the plain
5
Notice in this context is that from Commerce to Customs that the statutory
suspension has been removed.
6
A proviso generally “remove[s] special cases from the general enactment” while an
exception “restrict[s] the enacting clause to a particular case.” However, “courts seldom
make consistent distinction in the interpretation of [these] types of limitation.” 1A Norman J.
Singer, Statutes and Statutory Construction § 20:22, at 154 (6th ed. 2002).
7
meaning. See Marcor Dev. Corp. v. United States, 20 C.I.T. 538, 926 F. Supp. 1124, 1129 (CIT
1996). Here, the words are unambiguous, and the exception that follows in parenthesis refers
solely to extended entries.
Despite the clear meaning of the words “any entry,” the government maintains that the
words should instead be read as “some entries, not including those subject to the proviso in
thefirst sentence, or extended entries.”7 The government fails to explain why or how §
1675(a)(3) cannot work in concert with § 1504(d) (1994)’s deemed liquidation provision, when it
must to effectuate Congress’ desire for expedient and certain customs liquidation processes.8 The
simplest conclusion that can be drawn, as Int’l Trading correctly points out, is that “[t]he
government’s interpretation of the second sentence has the effect of removing the words ‘any
entry’ from that sentence.”
The government asserts, under its own plain meaning theory, that when the entry in
question became subject to the administrative review and Commerce issued liquidation
instructions, it qualified under the amendatory proviso of § 1504(d) (1994) as being subject to §
1675(a)(3)(B). Defendant’s Brief in Reply to Plaintiff’s Opposition to the Cross Motion for
Summary Judgment (“Defendant’s Brief in Reply”) at 2. Certainly an entry which meets the
conditions of § 1504(d) (1994)’s proviso referencing § 1675(a)(3)(B) would be subject to the
latter provision. However, the dilemma is again that, under the government’s interpretation, the
7
“A text should not be construed strictly, and it should not be construed leniently; it
should be construed reasonably, to contain all that it fairly means.” Antonin Scalia, A Matter
of Interpretation 23 (Amy Gutmann ed., 1997).
8
A canon of statutory construction is that a statute should be read to avoid internal
inconsistencies. Abner J. Mikva & Eric Lane, An Introduction to Statutory Interpretation and
the Legislative Process 24 (1997).
8
entry would be exclusively subject to § 1675(a)(3)(B)’s 90 day liquidation requirement, with the
sole remedy being an explanation from the Secretary of the Treasury; it would no longer be
covered by the six month deemed liquidation consequence of § 1504(d) (1994). This argument
is, by itself, is inadequate to support or require the mutual exclusivity of §§ 1504(d) (1994) and
1675(a)(3)(B) that the government asserts is the case.
2
The Government’s Argument Would Turn The In Pari Materia Doctrine On Its Head
To help bridge the divide of mutual exclusivity, the government argues that the two
statutes are inherently incompatible, and that they must therefore be construed n pari materia
The in pari materia canon directs that “inconsistencies in one statute may be resolved by looking
at another statute on the same subject.” lack’s Law Dictionary 794 (7th ed. 1999). The
government’s contention is that allowing the subject entry to be deemed liquidated pursuant to §
1504(d) (1994) may “deprive Customs of the right to liquidate the entry within 90 days after
receiving liquidation instructions, a right given to it under § 1675(a)(3)(B).” Defendant’s Brief
in Reply at 24. This interpretation of § 1504(d) (1994), according to the government’s theory,
would “frustrate the application of § 1675(a)(3)(B), and cause the two provisions to be
inconsistent with one another.” Id.
The government’s solution is to erect a wall between the two statutes when certain entries
fall under the § 1504(d) (1994) proviso9, rather than allowing the two provisions to “work
harmoniously together,” as the in pari materia canon prescribes. Ambassador Div. of Florsheim
Shoe v. United States, 748 F.2d 1560, 1565 (Fed. Cir. 1984). In fact, both provisions must work
9
See Defendant’s Cross Motion at 39-41.
9
in concert to effectuate the other. Otherwise, placing the entry solely within the scope of §
1675(a)(3)(B)’s 90 day provision, without subjecting it to the six month deemed liquidation
consequence of § 1504(d) (1994), would frustrate the application of the latter provision, which
by its terms applies to “any entry.”
3
The Doctrine of Expressio Unius Est Exclusio Alterius
Favors Plaintiff’s Interpretation
The joint operation of the two provisions is further supported by looking at the structure
of 19 U.S.C. 1504(d) (1996). Although these additional amendments were not in effect during
the period of review at issue in this case, they are instructive: the statute references two
exceptions in the first sentence but only one in the second sentence.10 The canon of statutory
interpretation, expressio unius est exclusion alterius, whereby “express[ing] or includ[ing] one
thing implies the exclusion of the other, or of the alternative.” Black’s Law Dictionary 602 (7th
10
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 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 at the time of entry by the importer of record.
19 USC § 1504(d) (1996) (emphasis added to1996 amendatory language)
10
ed. 1999). Given this interpretive rule, “where Congress … has carefully employed a term in one
place and excluded it in another, it should not be implied where excluded,” Marshall v. Western
Union Tel. Co., 621 F.2d 1246, 1251 (3d Cir. 1980), it is probable, as Plaintiff argues, that
“Congress was aware of the fact that it was omitting an exception for entries subject to
administrative review from the [second sentence of § 1504(d) (1994)] and that it did so because
such entries are still subject to the consequence of deemed liquidation.” Plaintiff’s Motion at 20.
In response, the government points out that the amendment to § 1504(d) excepting
extended entries (in the second sentence) was made in 1996 and not in 1994, when the
amendment excepting administrative review entries was enacted (in the first sentence).
Defendant’s Brief in Opposition at 17. Therefore, the government argues, the two amendments
were not contemporaneous and thus cannot indicate Congressional intent in enacting the 1994
amendment. Id. at 17-18. For this proposition the government cites Pure Oil Co. v. Suarez, 384
U.S. 202, 206, 86 S. Ct. 1394, 16 L. Ed. 2d 474 (1966).
In Pure Oil, the Supreme Court observed that the approach used in a prior case to
compare two separate statutes, a technique which was based on the two statutes being re-enacted
at the same time, was unavailable since the two statutes at issue had not been contemporaneously
re-enacted. Id. Here, while the two amendments were indeed not contemporaneous, they both
amended only a single statutory provision, § 1504(d). Thus, the comparison technique of Pure
Oil is not applicable here.
11
Moreover, the government concedes that Congress added the “amendatory language in
the second sentence [of § 1504(d) excepting extended entries] … to ensure clarity.”11
Defendant’s Brief in Opposition at 18 n.3. If so, it is reasonable that Congress would have also
added similar clarifying language regarding entries subject to administrative review (§
1675(a)(3)) to the second sentence in 1994, but it did not, nor did it do so in 1996. The
continued absence of such language from the deemed liquidation clause of § 1504(d), even while
Congress added language excepting extended entries from that exact same clause, is compelling
support for an intentional legislative omission.
4
The Proviso of § 1504(d) (1994) Applies Only to the Clause to Which It is Attached
Plaintiff also advances the statutory construction argument that the proviso in the first
clause of § 1504(d) (1994) applies solely to the clause to which it is attached.12 It cites Ritchey v.
Upjohn Drug Co., 139 F.3d 1313, 1316 (9th Cir. 1998) for this proposition: “the most sound
reading of a sentence will refer its limiting clause back to the antecedent clause to which it is
attached, and not to other paragraphs or sentences in the statute.” Similarly, court in Zogbi v.
Federated Department Store, 767 F. Supp 1037, 1039 (C.D. Cal. 1991) stated that the “general
11
The 1996 amendment to § 1504(d) is described as such by the U.S. House of
Representatives Committee on Ways and Means : “By operation of law, when a suspension
of liquidation is removed, Customs must liquidate entries within a specified time period.
This provision clarifies that such liquidation should not occur if an extension has been
issued.”
12
The proviso clause reads: “[e]xcept as provided in § 1675(a)(3) of this title . . . .”
12
rule is that a qualifying phrase or clause only modifies that which immediately precedes it.” The
government asserts that, because the proviso in § 1504(d) (1994) does not have an “antecedent
clause,” this rule cannot apply. Defendant’s Brief in Reply at 9. General principles of statutory
construction indicate that this is not necessarily the case:
The old rule states that the proviso was limited to the section to which it was attached, or the
sections which preceded it. This rule is seldom followed today. Courts have adopted the
rule that the proviso will be applied according to the general legislative intent and will limit
a single section or the entire act depending on what the legislature intended or what meaning
is otherwise indicated. Although the form and the location of the proviso may be some
indication of the legislative intent, form alone will not control. No presumption concerning
the scope of its application arises from the location of the proviso.
2A Norman J. Singer, Statutes and Statutory Construction § 47:09, at 239-241 (6th ed. 2002)
(internal citations omitted) (emphasis added).
The “antecedent clause” is unnecessary and current rules of statutory construction
indicate that the legislative history of a proviso must also be examined in order to ascertain its
full scope. A review of the record for the 1994 amendment to § 1504(d) persuasively
demonstrates that it was unlikely Congress intended that the proviso also apply to the second,
consequences clause, of that statute.
5
The Legislative History Of The 1994 URAA Amendments
Does Not Conflict With Int’l Trading II’s Holding
The legislative history suggests consistency with Int’l Trading II on what constitutes
“notice” within the meaning of § 1504(d)(1994) and on which entries are excepted as per §
13
1675(a)(3)(B) from the consequence of deemed liquidation in § 1504(d) (1994). In fact, very
little legislative history pertaining to the 1994 amendatory language exists. There is no
indication in the implementing legislation, H.R. Rep. No. 103-826, pt. 1 (1994) (“House
Report”); S. Rep. No. 103-412, pt. 1 (1994) (“Senate Report”), that the triggering event for
deemed liquidation under § 1504(d) (1994) will relapse to the issuance of liquidation instructions
by Commerce. There is also nothing to indicate that all entries subject to § 1675(a)(3)(B) will be
removed from the consequence of deemed liquidation under § 1504(d) (1994).
As the government accurately observes, Congress did not impose a time limit on
Commerce to issue liquidation instructions in § 1675(a)(3)(B). Defendant’s Brief in Reply at 3.
However, this does not mean that when subsection B of § 1675(a)(3) was enacted in 1994,
Congress was not concerned with finality and expediency in the customs liquidation process.
Congress has consistently expressed its desire to enhance “certainty in the customs process,”
“effectuate [prompt] liquidation” and “impos[e] requirements of expedition on both Commerce
and Customs.”13 Int’l Trading II, 281 F.3d at 1272-73.
13
The legislative history states “[t]he Committee intends that Commerce complete its
administrative reviews as quickly as possible, so that final liability for antidumping and
countervailing duties can be promptly determined . . . . [I]t is the Committees [sic] intent that
Commerce complete its reviews at the earliest possible time, while still ensuring that the
results are accurate.” URAA, S. Rep. No. 103-412, pt. 1 (1994) (emphasis added); Plaintiff’s
Motion, App. Exh. G. The Customs Procedure Reform and Simplification Act of 1978 states
that where prompt notice of deemed liquidation is required so as to “increase certainty in the
customs process . . . under the present law, an importer may learn years after goods have
been imported and sold that additional duties are due, or may have deposited more money for
estimated duties than are actually due but be unable to recover the excess for years as he
awaits liquidation.” S. Rep. No. 95-778, at 32 (1978) (emphasis added). Furthermore, the
14
Moreover, a major objective of the 1994 URAA amendments implementing the
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
(hereinafter, “Antidumping Agreement”) was to expedite administrative timetables. See URAA,
Pub. L. No. 103-465, 108 Stat. 4809, at 4842-4902. The Antidumping Agreement imposed, for
the first time, specific time limits within which final duty liability must be calculated (completion
of the administrative review) and on the time within which refunds of overdeposited duties must
be made (liquidation of the entries). See Id. at 1466 (“[T]he determination of the final liability
for payment of anti-dumping duties shall take place as soon as possible, normally within twelve
months, and in no case more than eighteen months … any refund shall be made promptly and
normally not more than 90 days following the determination of final liability”) (emphasis added).
Congress did not impose a deadline on issuance of liquidation instructions in §
1675(a)(3)(B) because it was simply unnecessary -- not because expediency had ceased to be a
virtue. Entries subject to this new provision would still be covered by the six month deemed
liquidation consequence of § 1504(d) (1994). Otherwise, Commerce could indefinitely extend
the time for liquidating entries and provide only hortatory recourse to parties; this result would be
inconsistent with Congress’ purpose in both the 1993 and 1994 amendments. It is unlikely that, a
year later, Congress would dramatically undercut the 1993 amendments with nothing in the
record to indicate that it was doing so.
Trade Agreements Act of 1979 established strict timetables for assessment and reviews of
antidumping duties. S. Rep. No. 96-249, at 15-18 (1979).
15
Furthermore, the 1994 amendatory proviso in § 1504(d) (1994) is described in the
implementing legislation as being a “conforming amendment.” H.R. Doc. No. 103-316 at 143
(1994). When Congress describes an amendment as a “conforming amendment,” it generally
indicates the amendment should be read as non-substantive. See Springdale Mem’l Hosp. Ass’n,
Inc. v. Bowen, 818 F.2d 1377, 1386 n.9 (8th Cir. 1987). The Supreme Court has implied “that
when Congress designates an amendment a ‘conforming amendment’ this constitutes valid
evidence of legislative intent that the amendment should be read as a nonsubstantive [sic]
reaction to related legislation.” Id.; CBS, Inc. v. FCC, 453 U.S. 367, 381-82, 101 S. Ct. 2813, 69
L. Ed. 2d 706 (1981); see also Gorbach v. Reno, 219 F.3d 1087, 1101 (9th Cir. 2000) (Thomas,
Circuit Judge, concurring) (“Congressional designation of an amendment as a ‘conforming
amendment’ evidences legislative intent that the amendment should be read as non-substantive”).
Despite the “conforming amendment” language, the government claims that the 1994
amendment to § 1504(d) is a substantive modification because it removes certain entries from the
deemed liquidation consequence of that statute. This position undermines a major purpose of the
1993 amendment to § 1504(d). The 1993 amendments closed a loophole so that all entries (for
which suspension of liquidation had been removed) would be subject to deemed liquidation
within six months of Customs receiving notice from Commerce that the statutory suspension had
been lifted: “[t]he amendment was designed to address an anomaly in the prior version of [§
1504(d)], which made deemed liquidation available if suspension of liquidation were removed
before the expiration of the maximum four-year period for liquidating entries, but not if
16
suspension of liquidation were removed after the expiration of the four-year period.” Int’l
Trading II, 281 F.3d at 1272-73. The only uncertainty, resolved in Int’l Trading II, was over
when this notice was received. It is implausible that Congress would have repealed the 1993
change virtually sub silentio less than a year later -- with little comment or explanation aside
from the descriptor “conforming amendment.” There is no suggestion that either the
Administration or Congress considered the 1994 amendment to § 1504(d) a substantive change
which would have removed a subset of entries from the scope of deemed liquidation, effectively
re-opening a loophole that had been sewn shut the year before.
The Government correctly observes that the 1994 URAA made several substantive
changes to existing law. As examples, the Government notes the creation of new standards for
determining whether dumping margins are de minimis or import volumes are negligible, as well
as a new five-year “sunset” review provision. Defendant’s Brief in Opposition at 26; See also
Plaintiff’s Motion, App. Exh. K). However, unlike the amendatory changes to § 1504(d), none
of the substantive changes cited by the Defendant are described in the implementing legislation
or the Committee Reports as simply “conforming amendments.” The 1994 amendment to §
1504(d) was simply a technical, non-substantive change to conform the statute to the Uruguay
Round Trade Agreements; not a significant substantive modification to existing law.
The government’s counterarguments are unpersuasive. In response to the point that
adopting the Defendant’s interpretation of the 1994 amendatory language would undo sub
silentio the substantive change enacted the year prior, the Defendant declares, without more, that
17
the 1994 amendment “did not undo the change made in 1993, but merely substituted the
liquidation provisions of § 1675(a)(3) for those of § 1504(d) in order to conform domestic law to
the international agreement.” Defendant’s Brief in Reply at 14. This reasoning is flawed;
“substitut[ing] the liquidation provisions” would in fact “undo the change made in 1993.” Id. In
other words, given that the 1993 amendment made all entries (in which suspension of liquidation
had been removed) subject to deemed liquidation, the complete substitution of the liquidation
provisions of § 1675(a)(3) for those of § 1504(d) for entries under administrative review would,
in fact, invalidate the 1993 change, since such entries would no longer be subject to deemed
liquidation.
Alternatively, the government suggests that the alleged substantive change in 1994 was
not implemented sub silentio at all, but was in fact “described in the Statement of Administrative
Action and in the congressional reports.” Defendant’s Brief in Reply at 14.14 This argument
confuses the issue and fails to respond to the sub silentio concern. The core dilemma is that the
government can point to no evidence of Congressional intent to undo the 1993 amendatory
change establishing deemed liquidation for all entries, in which suspension of liquidation had
been removed, not that the enactment of the 1994 amendment had been publicly described. The
government seems to confuse the difference between the mere description of amendatory
14
Defendant continues: “It was there stated that Article 9.3 ‘establishes new rules
regarding the assessment of anti-dumping duties …,’ and that duty refunds would be paid
‘normally within ninety days after the determination of final assessment, and provide an
explanation, if requested, for any delay.” Defendant’s Brief in Reply at 14.
18
changes, an exercise requisite to any type of legislative drafting, with the substantive change in
statutory understanding that is at issue.
The government also contends that in fact “[t]here was no need for such express
statements because the amendatory language, ‘except as provided …,’ … had a definite meaning
in the law and was sufficient to express Congress’ intent.” Id. at 15. Here, the Defendant cites to
United States v. Page, 131 F.3d 1173 (6th Cir. 1997), cert. denied, 525 U.S. 828 (1998), and
United States v. Cortez-Claudio, 312 F.3d 17 (1st Cir. 2002), both of which dealt with a statute
containing similar language. In Cortez-Claudio, the court states that “Section 3583(b) itself
begins with the phrase ‘except as otherwise provided.’ This proviso indicates that § 3583(b)
yields to other more specific statutes, such as § 841, that make different provisions for terms of
supervised release for particular offenses.” Cortez-Claudio, 312 F.3d at 21.
However, the government does not explain how a proviso “yield[ing] to other more
specific statutes” would remove administrative review entries from the scope of deemed
liquidation under the second clause of § 1504(d) (1994). The Page court noted that the proviso in
that case yielded only when there was an “apparent conflict.” Page, 131 F.3d at 1180. In that
case, the two statutes in question were not capable of working in concert; if one applied, the other
did not. Id. at 1177 (explaining that one provided for a supervised release term of “at least 3
years,” while the other directed a term of “not more” than three years). Here, there is no conflict
because it is possible for both statutes to work together. Thus, the government’s citation of Page
does not adequately support its position that the “except as provided” language has a meaning
sufficiently definite so as to obviate any need for Congress to express its intent.
19
Aside from the “conforming amendment” language, there is another portion of
noteworthy legislative text. Section 1504 is described as a “provision which establishes general
rules regarding the liquidation of customs entries” in the Statement of Administrative Action and
Senate Report. URAA, Statement of Administrative Action, H.R. Doc. No. 103-465, at 875
(1994). “General” is defined in lexicons as follows:
general … adj. 1. Relating to, concerned with, or applicable to the whole or every
member of a class or category. 4.a. Not limited in scope, area, or application: as a
general rule.
American Heritage Dictionary 552 (2d ed. 1982).
general … adj. 1: involving or belong to the whole of a body, group, class, or type:
applicable or relevant to the whole rather than to a limited part, group, or section.
Webster’s Third New International Dictionary 944 (1986).
The plain meaning of “general” suggests that § 1504(d) (1994) acts as a default or baseline rule
which is not limited in scope or application. Under this interpretation, § 1504(d) (1994)’s six
month deemed liquidation provision would remain active even while certain entries were also
covered by § 1675(a)(3)(B)’s 90 day liquidation requirement.
The two sections of the statute, § 1675(a)(3)(B) and § 1504(d), thus operate in the
following fashion: Under § 1675(a)(3)(B), an entry that is not liquidated by Customs within 90
days after the Commerce liquidation order confers the right upon the importer to demand an
explanation from the Secretary of the Treasury. If the entry has still not been liquidated (or
extended) six months after notice of removal of suspension (i.e. publication in the Federal
Register), then § 1504(d) (1994) directs that liquidation be effected by operation of law.
20
B
The Federal Circuit’s Opinion in Int’l Trading II Supports Plaintiff’s Position
Customs liquidated Plaintiff’s entry on September 26, 1997, nearly one year after
publication in the Federal Register, and denied its protest on the grounds that such publication
did not constitute notice of removal of suspension. In Int’l Trading II, under facts closely parallel
to those of the instant case, the Federal Circuit deemed such a long delay impermissible. The
court held that publication of the final results in the Federal Register removes the statutory
suspension of liquidation for entries whose liquidation had been suspended by statute pending
completion of an administrative review; the publication also serves as notice to Customs that the
statutory suspension has been removed. Int’l Trading II, 281 F.3d at 1277.
The Government erroneously contends that the 1994 URAA amendments nullify the
holding and rationale of Int’l Trading II by shifting the period for deemed liquidation. The
holding of Int’l Trading II remains under the purview of the 1994 URAA amendment. Even with
the amendatory clause in § 1504(d) (1994) referencing liquidation instructions in §
1675(a)(3)(B), the reasoning of Int’l Trading II, with regards to the issuance of liquidation
instructions, is germane. The Government is correct to argue that there is no statute that requires
a public notice of removal of suspension. The Federal Circuit itself in Int’l Trading II stated that
“neither section 1504 not any other statute or regulation defines” what constitutes the removal of
suspension or the notice of removal to Customs. Id. Nevertheless, the court found that “[t]he
statutory scheme governing suspension of liquidation supports the trial court’s conclusion that
suspension of liquidation was removed when the final results of the administrative review were
21
published in the Federal Register.” Id. at 1272. Furthermore, Defendant ignores the Federal
Circuit’s knowledge in Int’l Trading II of the exception added to the first clause of § 1504(d).
The court specifically observed that § 1504(d) (1993) had since been amended, “but not in ways
material to the issues in this case.” Int’l Trading II, 281 F.3d at 1271.
The Government also argues that Customs is not covered under the Federal Register Act,
which states that “[u]nless otherwise specifically provided by statute, filing of a document,
required or authorized to be published by section 1505 of this title. . . is sufficient to give notice
of the contents of the document to the person subject to or affected by it.” 44 U.S.C. § 1507(1994). The Government claims that, while “person” is defined in 44 U.S.C. § 1501 as an
“individual, partnership, association, or corporation,” the terms “agency” and “Federal agency”
are defined separately and are not included in the definition of “person.” Therefore, the
Government argues that the Federal Register Act does not apply to Customs.15
This court gathers from the Federal Circuit’s reasoning in Int’l Trading II and denial of
the Government’s petition for rehearing on the very same claim that the Federal Circuit did not
want to reach the result that would follow from application of the Government’s current
interpretation of the statute.
The Government further claims, in support of its argument to preclude the notice effect of
the Federal Register, that 19 U.S.C. § 1677f(b)(1) (1994)16 requires the preservation of
15
The Federal Circuit did not explicitly address this argument when the Government
presented its submissions in Int’l Trading II. However, when the Government petitioned the
Federal Circuit for rehearing specifically on this issue on April 12, 2002, the petition was
denied without opinion on April 24, 2002.
16
“Except as provided…, information submitted to the administering authority or the
Commission which is designated as proprietary by the person submitting the information
22
confidentiality of business proprietary material often included in liquidation instructions, thus
precluding publication. To support its assertion, the Government cites the declaration of a
Commerce employee, Laurie Parkhill:
When liquidation instructions include business proprietary information, such as the
names of importers or exporters and specific rates of duty, the Import Administration has
a practice of including in the instructions a statement that they are not to be released to
the public. That practice has been in place at least since 1997. The reason for that
practice is to ensure that business proprietary information is not disclosed inappropriately
to the public.
Although the message Commerce transmits to Customs for transmission to the ports
requires Customs not to release the message to the public, my staff makes available in the
public files of the Import Administration a public version of the instructions. In that
public version, at a minimum, is the date on which Customs transmitted our liquidation
instructions to the field. This practice has been in place at least since 1997.
Declaration of Laurie Parkhill at ¶¶4-5.
Although Ms. Parkhill explains that a public version of the instructions eventually are
available, they are not publicly available at the same time the instructions containing proprietary
information are issued. Therefore, under the Government’s argument infra in which the issuance
of instructions trigger the statutory “time clock” under § 1675(a)(3)(B), parties are first supposed
to wait through the indefinite period until Commerce issues liquidation instructions to Customs
and then when liquidation instructions are eventually issued parties will not know about the
commencement of the 90-day period under § 1675(a)(3)(B) until a public version is available.
The Government’s defense of its inability to afford immediate public notice of liquidation
instructions is unpersuasive. Defendant conceded during oral argument that it could have
shall not be disclosed to any person without the consent of the person submitting the
information ….”
23
published a redacted version of the instructions when it sent the instructions through the
confidential email in the case at hand. Overall, for this court to deem Int’l Trading II
inapplicable to the case at hand would frustrate the policy considerations of efficiency and
predictability that the Federal Circuit intended. Indeed, the Federal Circuit stated:
The date of publication provides an unambiguous and public starting point for the six-
month liquidation period, and it does not give the government the ability to postpone
indefinitely the removal of suspension and liquidation (and thus the date by which
liquidation must be completed) as would be the case if the six-month liquidation period
did not begin to run until Commerce sent a message to Customs advising of the removal
of suspension of liquidation. Beyond that, treating the date of notification as separate
from the date of publication could lead to messy factual disputes about when Customs
actually received notice of the removal of the suspension of liquidation. As in this case,
the courts would be required to referee debates about what kind of communication from
Commerce relating to the announcement of the final results constituted a qualifying
“notice” of the removal of suspension. . . . Adopting that position would require the
courts, after the fact, to examine informal and non-public communications between
Commerce and Customs to determine whether and when those communications
constituted “liquidation instructions.”
Id. at 1275-76; see also NEC Solutions v. United States, Slip-Op. 03-80, 2003 Ct. Int’l Trade
LEXIS 80 (July 9, 2003) (explaining what constituted notice in the absence of a Federal Register
notice).
The Federal Circuit has stated clearly that the Commerce and Customs should not be
allowed to circumvent the expediency provided for in the § 1504(d) by postponing the issuance
of its instructions indefinitely. The justifications for untimeliness made in this case by the
Government that “the delay[in issuing liquidating instructions to Customs]…was caused by an
excess workload at Commerce…” are unsatisfactory. See Defendant’s Cross Motion at 14
(referencing Declaration of Laurie Parkhill ¶ 3). Because § 1504(d) was not been amended
24
materially, nothing renders the reasoning of Int’l Trading II irrelevant or inapposite to the case at bar.
Alternatively, the Government proposes that the subject entry is wholly removed from the
reach of § 1504(d) (1994), and subject solely to § 1675(a)(3)(B). This again runs counter to the
holding and rationale of Int’l Trading II because Commerce could postpone for any period of
time the issuance of liquidation instructions without consequence to itself. Int’l Trading II, 281
F.3d at 1273. As a result, § 1675(a)(3)(B) must work in concert with § 1504(d) (1994)’s six-
month deemed liquidation provision. Otherwise, Commerce would have the unilateral ability to
extend the time for liquidating entries indefinitely, a result Congress could not have intended. Id.
Unfettered discretion to Commerce would undermine one of the principal objectives of the 1993
amendments, which were enacted the year before to:
address an anomaly in the prior version of [§ 1504(d)], which made deemed liquidation
available if suspension of liquidation were removed before the expiration of the maximum
four-year period for liquidating entries, but not if suspension of liquidation were removed
after the expiration of the four-year period. [citation omitted] The amendment increased the
period of time within which Customs could liquidate entries after removal of suspension of
liquidation from 90 days to six months. In addition, however, the amendment made clear
that deemed liquidation was the consequence of Customs’ failure to liquidate within that six-
month period. See H.R. Rep. No. 103-361 part I, at 139 (1993).
Int’l Trading II, 281 F.3d at 1272-73 (emphasis added).
Not only would the government’s argument be contrary to the reasoning of Int’l Trading
II, but the contention is an interpretation of § 1504(d) (1994), that was first advanced in the briefs
for litigation purposes. As such, the argument is not entitled to judicial deference under
Chevron. See, e.g., Chrysler Corp. v. United States, 24 C.I.T. 75, 80 n.4, 87 F. Supp. 2d 1339(2000) (refusing to defer to government’s interpretation of its regulation advanced solely for
litigation purposes); Texport Oil Co. v. United States, 185 F.3d 1291, 1294 (Fed. Cir. 1999)
25
(declining to extend Chevron deference where the agency had not advanced a position on the
issue); Parker v. Office of Pers. Mgmt., 974 F.2d 164, 166 (Fed. Cir. 1992) (“post-”). Indeed,
Customs itself does not make the claim that the entry is wholly removed from the deemed
liquidation consequence of § 1504(d) (1994), only that notice of removal of suspension cannot be
provided by publication; this is the very argument repudiated by Int’l Trading II. See Customs
HQ 228678, Plaintiff’s Motion, App. Exh. I.
Both of the government arguments in this case, either requiring the court to re-assign the
starting point for the six-month liquidation period back to the issuance of liquidation instructions,
or excepting the entry from the deemed liquidation consequence of § 1504(d) (1994), would
directly contradict the holding and rationale of Int’l Trading II. The period for deemed liquidation
pursuant to § 1504(d) (1994) was not triggered when Customs received liquidation instructions
from Commerce on July 1, 1997, but rather when the final results of the third administrative
review covering the entry were published in the Federal Register on October 30, 1996. The
subject entry was thus deemed liquidated by operation of law on April 30, 1997.
V
CONCLUSION
Plaintiff's entries were deemed liquidated pursuant to § 1504(d) on April 30, 1997. This
court declines to apply § 1675(a)(3)(B) to this case because over six months elapsed between the
notice to Customs in the Federal Register on October 30, 1996, and the time at which Customs
liquidated the entry on September 26, 1997. The court grants summary judgment for the Plaintiff
and denies summary judgment for the Defendant. Customs is directed to re-liquidate the subject
26
entry, refunding all antidumping duties assessed in excess of those deposited at the time of entry,
along with interest assessed on such excess antidumping duties.
/s/ Evan J. Wallach, Judge
Date: January 2, 2004
New York, New York
27