Koyo Corp. of U.S.A. v. United States , 899 F. Supp. 2d 1367 ( 2013 )

Slip Op. 13-32
UNITED STATES COURT OF INTERNATIONAL TRADE
KOYO CORPORATION OF U.S.A.,
Plaintiff,
Before: Leo M. Gordon, Judge
v.
Court No. 12-00147
UNITED STATES,
Defendant.
OPINION
[Dismissing all claims for failure to state a claim upon which relief can be granted;
dismissing the action.]
Dated: March 13, 2013
John M. Gurley, Nancy A. Noonan, and Diana D. Quaia, Arent Fox, LLP, of
Washington, DC, for Plaintiff Koyo Corporation of U.S.A.
Courtney S. McNamara and Jessice R. Toplin, Trial Attorneys, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, for Defendants United
States, U.S. Customs and Border Protection, David V. Aguilar, Acting Commissioner,
U.S. Customs and Border of Protection, of Washington, DC. With them on the briefs
were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E.
Davidson, Director, and Franklin E. White, Jr., Assistant Director.
Patrick V. Gallagher, Jr., Attorney Advisor, United States International Trade
Commission, Office of General Counsel, of Washington, DC, for Defendants U.S.
International Trade Commission and Irving Williamson, Chairman, U.S. International
Trade Commission. With him on the brief was Neal J. Reynolds, Assistant General
Counsel for Litigation.
Terence P. Stewart, Geert M. De Prest, and Patrick J. McDonough, Stewart and
Stewart, of Washington, DC, for Defendant-Intervenors The Timken Company and MPB
Corporation.
Gordon, Judge: This case arose from the actions of two agencies, the
U.S. International Trade Commission (“ITC”) and U.S. Customs and Border Protection
(“Customs”) that denied Plaintiff Koyo Corporation of U.S.A. (“Koyo”) certain monetary
Court No. 12-00147 Page 2
benefits under the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”),
19 U.S.C § 1675c (2000), repealed by Deficit Reduction Act of 2005, Pub. L. 109-171,
§ 7601(a), 120 Stat. 4, 154 (Feb. 8, 2006; effective Oct. 1, 2007).1 The ITC did not
include Koyo on a list of parties potentially eligible for “affected domestic producer”
(“ADP”) status, which would have qualified Koyo for distributions of antidumping duties
collected under various antidumping duty orders on tapered roller bearings and ball
bearings (“subject orders”). Pl.’s Compl. ¶¶ 16, 47, 51, ECF No. 2. Because Plaintiff
was not on the ITC’s list of potential ADPs, Customs made no CDSOA distributions to
Koyo.
Plaintiff brings facial and as-applied constitutional challenges to the CDSOA
under the First Amendment and the equal protection and due process guarantees of the
Fifth Amendment.
Before the court are the USCIT Rule 12(b)(5) motions of the ITC and the United
States to dismiss for failure to state a claim upon which relief can be granted, and the
Rule 12(c) motion of The Timken Company and MPB Corporation for judgment on the
pleadings. The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(i)
(2006). See Furniture Brands Int’l, Inc. v. United States, 35 CIT __, __, 807 F. Supp. 2d
1Congress repealed the CDSOA in 2006, but the repealing legislation provided that
“[a]ll duties on entries of goods made and filed before October 1, 2007, that would [but
for the legislation repealing the CDSOA], be distributed under [the CDSOA] . . . shall be
distributed as if [the CDSOA] . . . had not been repealed . . . .” Deficit Reduction Act of
2005, Pub. L. No. 109-171, § 7601(b), 120 Stat. 4, 154 (2006). In 2010, Congress
further limited CDSOA distributions by prohibiting payments with respect to entries of
goods that as of December 8, 2010 were “(1) unliquidated; and (2)(A) not in litigation; or
(B) not under an order of liquidation from the Department of Commerce.” Claims
Resolution Act of 2010, Pub. L. No. 111-291, § 822, 124 Stat. 3064, 3163 (2010).
Court No. 12-00147 Page 3
1301, 1307-10 (2011). For the reasons set forth below, the court concludes that Plaintiff
has failed to state a claim upon which relief can be granted. The court will grant
Defendants’ and Defendant-Intervenors’ motions and dismiss this action.
I. Background
Plaintiff was a domestic manufacturer of tapered roller bearings and ball bearings
at the time of the original antidumping duty investigations that resulted in the subject
orders.2 Compl. ¶ 13. Koyo did not support the underlying antidumping duty
investigations. Compl. ¶ 15. Plaintiff submitted multiple requests and certifications with
the ITC and Customs seeking to be included on the list of ADPs. Compl. ¶¶ 16, 44, 45,
2
See Ball Bearings, Cylindrical Roller Bearings, and Parts Thereof from Sweden,
54 Fed. Reg. 20,907 (Dep’t of Commerce May 1, 1989) (antidumping duty order); Ball
Bearings, Cylindrical Roller Bearings, and Parts Thereof from the United Kingdom,
54 Fed. Reg. 20,910, (Dep’t of Commerce May 15, 2009) (antidumping duty orders and
amendments to determinations of sales at less than fair value); Ball Bearings,
Cylindrical Roller Bearings, and Spherical Plain Bearings and Parts Thereof from
France, 54 Fed. Reg. 20,902 (Dep’t of Commerce May 15, 1989) (antidumping duty
orders); Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings and
Parts Thereof from the Federal Republic of Germany, 54 Fed. Reg. 20,900 (Dep’t of
Commerce May 15, 1989) (antidumping duty orders); Tapered Roller Bearings, and
Parts Thereof, Finished or Unfinished, from the Hungarian People’s Republic, 52 Fed.
Reg. 23,319 (Dep’t of Commerce June 19, 1987) (antidumping duty order); Ball
Bearings and Cylindrical Roller Bearings, and Parts Thereof from Italy, 54 Fed. Reg.
20,903 (Dep’t of Commerce May 15, 1989) (antidumping duty orders); Ball Bearings
and Parts Thereof from Romania, 54 Fed. Reg. 20,906 (Dep’t of Commerce May 15,
1989) (antidumping duty order); Ball Bearings and Parts Thereof from Singapore, 54
Fed. Reg. 20,907 (Dep’t of Commerce May 15, 1989) (antidumping duty order);
Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People’s
Republic of China, 52 Fed. Reg. 22,667 (Dep’t of Commerce June 15, 1987)
(antidumping duty order); Tapered Roller Bearings and Certain Components from
Japan, 41 Fed. Reg. 34,974 (Dep’t of Treasury Aug. 18, 1976) (antidumping duty order);
Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from Japan, 52
Fed. Reg. 37,352 (Dep’t of Commerce Oct. 6, 1987) (antidumping duty order); Ball
Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof
from Japan, 54 Fed. Reg. 20,904 (Dep’t of Commerce May 15, 1989) (antidumping duty
orders).
Court No. 12-00147 Page 4
48, 53. To date, the ITC has not included Koyo on its list of ADPs eligible for
disbursements of antidumping duties under the CDSOA for the subject orders for any
fiscal year, including Fiscal Years 2010 and 2011. Compl. ¶¶ 16, 47, 51. Neither has
Customs made any CDSOA distributions to Koyo for those fiscal years. Koyo
commenced this action on May 30, 2012, contesting the denial of CDSOA distributions
for the fiscal years in question. Defendants subsequently filed their motions to dismiss,
and Defendant-Intervenors moved for judgment on the pleadings.
II. Standard of Review
In deciding a USCIT Rule 12(b)(5) motion to dismiss for failure to state a claim
upon which relief can be granted, the court assumes all factual allegations to be true
and draws all reasonable inferences in the plaintiff’s favor. Nan Ya Plastics Corp., Am.
v. United States, 36 CIT ___, ___, 853 F. Supp. 2d 1300, 1305 (2012) (citing Cedars-
Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583-84 & n.13 (Fed. Cir. 1993)). A USCIT
Rule 12(c) motion for judgment on the pleadings is reviewed under the same standard
as a motion to dismiss under Rule 12(b)(5) for failure to state a claim. Forest Labs., Inc.
v. United States, 29 CIT 1401, 1402-03, 403 F. Supp. 2d 1348, 1349 (2005), aff’d, 476
F.3d 877 (Fed. Cir. 2007).
A plaintiff’s factual allegations must be “enough to raise a right to relief above the
speculative level on the assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555 (2007). “To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
Court No. 12-00147 Page 5
as true, to ‘state a claim of relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
III. Discussion
In 2000, Congress amended the Tariff Act of 1930 to add Section 754, the
CDSOA, which provides distributions of assessed antidumping and countervailing
duties to ADPs on a fiscal year basis. 19 U.S.C. § 1675c(d)(1). To be an ADP, a party
must meet several criteria, including the requirement that it have been a petitioner, or an
interested party in support of a petition with respect to which an antidumping duty or
countervailing duty order was entered. Id. § 1675c(b)(1) (“petition support
requirement”). The CDSOA directed the ITC to forward to Customs, within 60 days of
the issuance of an antidumping or countervailing duty order, lists of persons potentially
eligible for ADP status, i.e., “petitioners and persons with respect to each order and
finding and a list of persons that indicate support of the petition by letter or through
questionnaire response.” Id. § 1675c(d)(1). Customs then publishes the lists of
potential ADPs in the Federal Register annually, prior to each distribution. Id.
§ 1675c(d)(2). Customs distributes assessed duties to parties on the list of potential
ADPs that certify that they met the remaining eligibility criteria. Id. § 1675c(d)(2).
In this action, the ITC compiled lists of potential ADPs with respect to the subject
orders. Compl. ¶ 40. Customs published the lists of potential ADPs for Fiscal Year
2010 on June 1, 2010, id. ¶ 46, and for Fiscal Year 2011 on May 27, 2011, id. ¶ 50.
Plaintiff did not appear on either list. Id. ¶¶ 47, 51. Nevertheless, Plaintiff certified to
Customs its eligibility for both fiscal years. Id. ¶¶ 48, 52. Customs responded by
Court No. 12-00147 Page 6
confirming receipt of Koyo’s claims for Fiscal Years 2010 and 2011 but did not indicate
the validity of those claims. Id. ¶¶ 49, 54.
In Count 1, Plaintiff challenges the petition support requirement, as applied to
Koyo, on First Amendment grounds. Compl. ¶¶ 59-61. In Count 2, Plaintiff claims the
petition support requirement facially violates the First Amendment guarantees of
freedom of speech and belief, and the right to petition the government for redress of
grievances. Id. ¶ 63. Plaintiff also claims that the petition support requirement facially
violates the First Amendment because it engages in impermissible viewpoint
discrimination by conditioning receipt of a government benefit on a private speaker’s
specific viewpoint, i.e., expression of support for an antidumping duty petition, and is
overbroad because it compels speech. Id. ¶¶ 64-65.
In Count 3, Plaintiff challenges the application of the petition support requirement
to it on Fifth Amendment equal protection grounds. Id. ¶¶ 67-69. In Count 4, Plaintiff
claims that the petition support requirement violates the equal protection guarantees of
the Fifth Amendment because it impermissibly creates classifications that implicate
Plaintiff’s fundamental speech rights, and because there is no legitimate governmental
purpose for differentiating between similarly situated domestic producers. Id. ¶¶ 71-73.
Lastly, in Count 5, Plaintiff challenges the petition support requirement as
impermissibly retroactive in violation of the Fifth Amendment due process guarantee
because eligibility for ADP status and disbursements is based on past conduct, i.e.,
support for the petition, and because the retroactive aspect of those eligibility
Court No. 12-00147 Page 7
determinations is not rationally related to a legitimate government purpose. Id. ¶¶ 75-
76.3
Plaintiff’s First Amendment and Fifth Amendment equal protection facial
challenges to the CDSOA are identical to previous claims that the court rejected in a
companion case involving prior fiscal years.4 See Pat Huval Restaurant & Oyster Bar,
Inc. v. United States, 36 CIT ___, 823 F. Supp. 2d 1365 (2012) (“Pat Huval”). In Pat
Huval, the court determined that Plaintiff’s facial claims were precluded by the holding in
SKF USA, Inc. v. U.S. Customs and Border Protection, 556 F.3d 1337 (Fed. Cir. 2009)
(“SKF USA II”). Id., 36 CIT at ___, 823 F. Supp. 2d at 1375. The court noted that the
Court of Appeals for the Federal Circuit upheld the CDSOA against constitutional
challenges brought on First Amendment and Fifth Amendment equal protection
grounds. Id. (citing SKF USA II, 556 F.3d at 1360 (“[T]he Byrd Amendment 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. We hold that the Byrd Amendment
is valid under the First Amendment.”); id. (“Because it serves a substantial government
3
In Counts 6 and 7, Koyo alleges that, because the CDSOA is unconstitutional, it is void
ab initio, and that the unconstitutional provisions are severable from the CDSOA as a
whole. These counts speak to remedy should Plaintiff prevail on the merits.
Accordingly, the court construes them as part of the Prayer for Relief and not as part of
Plaintiff’s substantive claims.
4
Koyo raised its constitutional challenges regarding all fiscal years prior to Fiscal Year
2006 in Court No. 06-00324, Fiscal Years 2006 and 2007 in Court No. 08-00340, and
Fiscal Years 2008 and 2009 in Court No. 10-00001.
Court No. 12-00147 Page 8
interest, the Byrd Amendment is also clearly not violative of equal protection under the
rational basis standard.”)).5
Plaintiff argues that SKF USA II is no longer binding in light of Supreme Court
decisions in Citizens United v. FEC, 558 U.S. 310 (2010), Snyder v. Phelps, 562 U.S.
___ (2011), and Sorrell v. IMS Health Inc., 564 U.S. ___ (2011). Those cases, which
dealt with restrictions on electioneering speech, state-law tort claims, and state-law
regulation of confidentiality of pharmaceutical prescriptions, respectively, do not
implicitly overturn SKF USA II or otherwise require the application of a level of scrutiny
on restrictions of commercial speech that differs from that applied to the CDSOA in SKF
USA II. See, e.g., Standard Furniture Mfg. Co. v. United States, 36 CIT ___, ___- ___,
823 F. Supp. 2d 1327, 1338-42 (2012).
As to its as-applied challenges, Plaintiff is no differently situated than the plaintiff
in Pat Huval. Here too, Koyo has failed to plead facts that permit the court to conclude
that these challenges differ from those brought and rejected in SKF USA II. See Pat
Huval, 36 CIT at___, 823 F. Supp. 2d at 1376-77. Plaintiff’s complaint does not contain
any allegations that the CDSOA was applied to Koyo in a manner that differs from its
application to other domestic producers who did not support a petition. Koyo admits
that it did not express support for the petition. Compl. ¶ 15. This places Koyo “on the
same footing as other potential claimants who did not support the petition, such as SKF
5
SKF USA II reversed the decision of the Court of International Trade in SKF USA Inc.
v. United States, 30 CIT 1433, 451 F. Supp. 2d 1355 (2006), which held the petition
support requirement of the CDSOA unconstitutional on Fifth Amendment equal
protection grounds.
Court No. 12-00147 Page 9
in SKF USA II.” Pat Huval, 36 CIT at ___, 823 F. Supp. 2d at 1377 (citing SKF USA II,
556 F.3d at 1343).
Because Koyo’s constitutional facial and as-applied challenges here are
indistinguishable from those claims in Pat Huval and indistinguishable from those claims
rejected by the Court of Appeals in SKF USA II, those challenges are foreclosed by the
holding in SKF USA II. Accordingly, Counts 1 through 4 of Plaintiff’s complaint must be
dismissed for failure to state a claim on which relief can be granted.
Plaintiff claims that the petition support requirement is impermissibly retroactive
in violation of the Fifth Amendment due process guarantee because eligibility for
CDSOA benefits is based on past conduct, i.e., petition support. In the companion
case, the court rejected the identical claim. See Pat Huval, 36 CIT at ___, 823 F. Supp.
2d at 1377 (quoting New Hampshire Ball Bearing v. United States, 36 CIT ___, ___ -
___, 815 F. Supp. 2d 1301, 1309 (2012) (“‘the retroactive reach of the petition support
requirement in the CDSOA is justified by a rational legislative purpose and therefore is
not vulnerable to attack on constitutional due process grounds.’”); id. (internal quote
omitted) (“‘It was not arbitrary or irrational for Congress to conclude that the legislative
purpose of rewarding domestic producers who supported antidumping petitions . . .
would be ‘more fully effectuated’ if the petition support requirement were applied both
prospectively and retroactively.’”)). Because Plaintiff’s claim is indistinguishable from
that in Pat Huval, Count 5 of Plaintiff’s complaint must be dismissed.
Court No. 12-00147 Page 10
IV. Conclusion
For the foregoing reasons, Defendants’ motions to dismiss Plaintiff’s complaint
under Rule 12(b)(5) for failure to state a claim and Defendant-Intervenors’ motion for
judgment on the pleadings under Rule 12(c) are hereby granted. Judgment dismissing
this action will be entered accordingly.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: March 13, 2013
New York, New York