Seafood Exps. Ass'n of India v. United States , 32 Ct. Int'l Trade 78 ( 2008 )

Slip Op. 08-9
UNITED STATES COURT OF INTERNATIONAL TRADE
SEAFOOD EXPORTERS ASSOCIATION
OF INDIA, GOURMET FUSION FOODS
INC., and INTERNATIONAL CREATIVE
FOODS, INC.,
Plaintiffs,
v. Before: Timothy C. Stanceu, Judge
UNITED STATES OF AMERICA, Court No. 05-00347
ROBERT C. BONNER,
COMMISSIONER, UNITED STATES
CUSTOMS AND BORDER
PROTECTION, AND UNITED STATES
CUSTOMS AND BORDER
PROTECTION,
Defendants.
OPINION AND ORDER
[Granting in part, and denying in part, defendants’ motion for reconsideration and modifying the
March 13, 2007 and June 19, 2007 orders addressing the filing of the administrative record]
Dated: January 18, 2008
Troutman Sanders LLP (Julie C. Mendoza, Donald B. Cameron, R. Will Planert, Jeffrey
S. Grimson and Brady W. Mills) for plaintiffs.
Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeanne E. Davidson, Director,
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Stephen C. Tosini); Chi S. Choy, Attorney, Office of the Assistant
Chief Counsel for International Trade Litigation, Bureau of Customs and Border Protection,
United States Department of Homeland Security, of counsel, for defendants.
Court No. 05-00347 Page 2
Stanceu, Judge: Before the court is defendants’ motion for reconsideration pursuant to
USCIT Rule 59(a) and (e). In their motion, defendants request that the court reconsider, in part,
the court’s order of March 13, 2007 (Docket Entry No. 32) (the “Order”). Defendants seek
reconsideration of the directive in the Order that defendants include in their filing of the
administrative record for this case the public documents associated with a notice issued by
defendant United States Customs and Border Protection (“Customs”), Monetary Guidelines for
Setting Bond Amounts for Importations Subject to Enhanced Bonding Requirements, 71 Fed.
Reg. 62,276 (Oct. 24, 2006) (the “Notice”). Defendants argue that the public documents
associated with the Notice should not be included in the administrative record because the Notice
was issued after plaintiffs, on May 23, 2005, filed their first amended complaint and plaintiffs
have not alleged in their amended complaint that the Notice harmed them.
For the reasons discussed herein, the court grants defendants’ motion in part and denies it
in part. The court amends the Order to allow defendants to refrain from filing, at this time, the
public documents associated with the Notice. The court reserves decision on the question of
whether those documents will be necessary for the resolution of this case and therefore will be
required to be filed at a later date.
I. BACKGROUND
On March 13, 2007, the court denied defendants’ motion to dismiss this action for lack of
subject matter jurisdiction and for failure to state a claim upon which relief can be granted.
Seafood Exps. Ass’n of India v. United States, 31 CIT ___, 479 F. Supp. 2d 1367 (2007). On the
same day, the court issued the Order. Order of Mar. 13, 2007 (Docket Entry No. 32). Familiarity
with the court’s opinion in Seafood Exporters Association of India (the “Opinion”) is presumed.
Court No. 05-00347 Page 3
The Order required defendants to file the public administrative record for the case and
provided defendants with thirty days to complete such filing. Id. at 2. The Order stated in
relevant part that the public administrative record for the case:
shall include, but not be limited to, public documents pertaining to the
promulgation and application of the Bond Directive and all modifications thereto,
including the Monetary Guidelines for Setting Bond Amounts for Importations
Subject to Enhanced Bonding Requirements, 71 Fed. Reg. 62,276 (Oct. 24, 2006)
....
Id. In response to the Order, defendants filed, on April 11, 2007, a set of documents that did not
include the public documents associated with the Notice. Defendants filed their motion for
reconsideration on April 9, 2007, requesting that the court reconsider its requirement for filing of
the public documents associated with the Notice because the Notice was not contested by
plaintiffs in this case. See Mot. for Recons. 1 (“Defs.’ Mot. for Recons.”). Plaintiffs filed their
opposition to defendants’ motion for reconsideration on April 26, 2007. Pls.’ Opp. to Defs.’
Mot. for Recons. of this Ct.’s Mar. 13, 2007 Order.
II. DISCUSSION
Defendants argue that the records pertaining to the Notice are not part of the record of the
decision being challenged, that there is no case or controversy concerning the Notice, and that
any claims relating to the Notice would not be ripe for judicial review because plaintiffs have not
exhausted their administrative remedies with respect to any determinations of bond sufficiency
made pursuant to the Notice. See Defs.’ Mot. for Recons. 5-10. In opposing defendants’ motion,
plaintiffs contend that the court took into consideration the scope of the claims contained in their
amended complaint when drafting the Order, and as such the court intended defendants to file the
public documents associated with the Notice. Pls.’ Opp. to Defs.’ Mot. for Recons. of this Ct.’s
Court No. 05-00347 Page 4
Mar. 13, 2007 Order ¶ 5. Plaintiffs point to language in the Opinion in which the court, in
discussing the changes to the “procedures and polices underlying the various issuances
comprising the Bond Directive,” notes that “[t]hese policies appear to have changed after
issuance of the Amendment on July 9, 2004, and in particular upon publication of the Notice in
October 2006, which occurred after plaintiffs brought this action.” Id. ¶ 6 (quoting Seafood
Exps. Ass’n of India, 31 CIT at ___, 479 F. Supp. 2d at 1377). Plaintiffs argue that defendants’
repeated attempts to delay the filing of the administrative record have hampered plaintiffs’ ability
to move forward with this litigation. Id. ¶ 1. In the event that the court grants the
reconsideration motion and agrees to exclude documents related to the Notice in the filing of the
administrative record, plaintiffs request leave to amend their complaint to incorporate claims
related to the Notice. Id. ¶ 7.
Granting a motion for reconsideration under USCIT Rule 59(a) is within the sound
discretion of the court. Union Camp Corp. v. United States, 23 CIT 264, 270, 53 F. Supp. 2d
1310, 1317 (1999). The purpose of such a motion is “to rectify a significant flaw in the conduct
of the original proceedings[,]” such as “when a movant demonstrate[s] that the judgment is based
on manifest errors of law or fact.” Id. (internal citations and quotation marks omitted). The
court concludes that defendants’ arguments do not identify a flaw in the conduct of the
proceedings satisfying the “manifestly erroneous” standard and that those arguments rest on an
overly narrow construction of plaintiffs’ claims.
In its opinion denying the motion to dismiss, the court discussed the Notice, which
announced changes to the guidelines and formulas by which Customs determines limits of
liability on continuous entry bonds issued to importers of certain categories of merchandise
Court No. 05-00347 Page 5
subject to antidumping duty orders. Seafood Exps. Ass’n of India, 31 CIT at ___, 479 F. Supp.
2d at 1374-75. The process affected by the Notice previously was set forth in amended Bond
Directive 99-3510-004 (the “Bond Directive”), which Customs amended on July 9, 2004 and
subsequently clarified. See Monetary Guidelines for Setting Bond Amounts, Customs
Directive 3510-04 (July 23, 1991), available at http://cbp.gov/linkhandler/cgov/ toolbox/legal/
directives/3510-004.ctt/3510-004.txt; Amendment to Bond Directive 99-3510-004 for Certain
Merchandise Subject to Antidumping/Countervailing Duty Cases (July 9, 2004), available at
http://www.cbp.gov/xp/cgov/import/cargo_summary/bonds/07082004.xml; Clarification to
July 9, 2004 Amended Monetary Guidelines for Setting Bond Amounts for Special Categories of
Merchandise Subject to Antidumping and/or Countervailing Duty Cases (Aug. 10, 2005),
available at http://www.cbp.gov/xp/cgov/import/cargo_summary/ bonds/07082004.xml.
Defendants are correct in arguing that the administrative record pertaining to the Bond
Directive, as it existed on July 9, 2004, does not contain documents that were created after that
date. However, plaintiffs’ amended complaint challenges as unlawful not only the Bond
Directive, but also the application of the Bond Directive to the determinations that Customs
made to establish their individual bonding requirements. See First Am. Compl. 14, ¶ i. Because
the court was unable to conclude that documents related to the Notice will be unnecessary to the
adjudication of plaintiff’s claims, the court ordered inclusion of these documents in the
administrative record. The court continues to be unable to so conclude, not only because
plaintiffs’ claims are broader than a challenge to the Bond Directive per se, but also because
plaintiffs seek declaratory and also equitable relief, praying for a permanent injunction against
the application of the “Bond Directive” to their future imports. See id. at 14, ¶¶ ii-iii. Plaintiffs,
Court No. 05-00347 Page 6
in their amended complaint, specifically reference “Current Bond Formulas” that Customs posted
on its website on January 24, 2005, and into which, according to plaintiffs, “the Bond Directive
was incorporated.”1 Id. ¶ 12. The exact scope and content of the “Bond Directive,” as it possibly
could be applied to future imports, appears to be changing over time and is a matter that might be
resolved only as the litigation progresses. At this stage of the proceedings, the nature of any
relief to which plaintiffs may be entitled, whether as a matter of law or equity, can only be a
matter of speculation. For these reasons, the court disagrees with defendants’ argument that there
is no case or controversy concerning the Notice. The court also disagrees with defendants’
argument pertaining to ripeness and exhaustion of administrative remedies. The amended
complaint indicates that plaintiffs have been participants in proceedings to determine limits of
liability on continuous entry bonds. See id. ¶¶ 19-20, 22. The court finds no basis to conclude, at
this stage of the litigation, that the documents in question could be related only to a potential
future claim of plaintiffs that would be dismissed for lack of ripeness or for failure to exhaust
administrative remedies.
Nevertheless, the court also notes that since it issued the Order, defendants have filed
confidential records for a number of individual bond determinations, and also notes that the
question of whether a specific need for the documents related to the Notice will arise later in the
course of this litigation is also a matter of speculation. See Docket Entry No. 45 (entered
Apr. 30, 2007). Therefore, the court will exercise its discretion to modify the Order such that
1
In addition to the Notice, Customs issued other public documents affecting the subject
matter of the Bond Directive. See Seafood Exps. Ass’n of India, 31 CIT ___, ___, 479 F. Supp.
2d 1367, 1372-73 (describing issuance of “Current Bond Formulas” on January 24, 2005 and
issuance of a “Clarification” to the Bond Directive on August 10, 2005).
Court No. 05-00347 Page 7
defendants will not be burdened with the obligation to file the public documents related to the
Notice at this time. However, the court declines to rule in response to defendants’ motion for
reconsideration that the public documents associated with the Notice will not in the future be
necessary to the adjudication of plaintiff’s claims. The court will consider the need to
supplement the administrative record by the filing of these documents if circumstances and the
interest of justice so require.
Finally, the court turns to plaintiffs’ request to amend their complaint to incorporate
claims relating to the Notice, in the event that the court grants the reconsideration motion and
agrees to exclude documents related to the Notice in the filing of the administrative record. Pls.’
Opp. to Defs.’ Mot. for Recons. of this Ct.’s Mar. 13, 2007 Order ¶ 7. In considering leave to
amend a complaint, the court is to apply the standard set forth in USCIT Rule 15, which provides
that “leave shall be freely given when justice so requires.” See USCIT R. 15(a); see also Foman
v. Davis, 371 U.S. 178, 182 (1962) (providing that absent dilatory motive, undue cause for delay,
repeated failure to cure deficiencies by amendments, futility of amendment, or undue prejudice to
the opposing party, leave to amend should be liberally given). The request in plaintiffs’
opposition papers for leave to amend the complaint is insufficient to allow the court to decide the
question of whether leave to amend is warranted under the standard of Rule 15. Plaintiffs have
once amended their complaint as of right and an answer has been filed; any further amendment
may be granted only by leave of court or by written consent of the adverse party. USCIT
R. 15(a). Unless plaintiffs obtain such consent, the court will consider whether to grant leave to
amend the complaint upon the filing of a motion under USCIT Rule 15(a) for leave to amend and
a proposed amended complaint. Absent a showing of good cause as required by USCIT
Court No. 05-00347 Page 8
Rule 16(b), such a motion should be filed before the final date for amending the pleadings that is
specified in a scheduling order entered under USCIT Rule 16(b)(1). See USCIT R. 16(b). In
amending the Order, the court also is ordering the parties to confer and submit a proposed
scheduling order.
III. ORDER
Upon consideration of defendants’ motion to reconsider, plaintiff’s response thereto, and
all other submissions and proceedings herein, it is
ORDERED that defendants’ motion for reconsideration is GRANTED in part and
DENIED in part; it is further
ORDERED that the court’s March 13, 2007 order, Docket Entry No. 32, is hereby
modified to provide that defendants need not file, at this stage of the litigation, the public
documents associated with Monetary Guidelines for Setting Bond Amounts for Importations
Subject to Enhanced Bonding Requirements, 71 Fed. Reg. 62,276 (Oct. 24, 2006); it is further
ORDERED that the court’s June 19, 2007 order, Docket Entry No. 48, is modified to
provide that the administrative record for this case is deemed filed, subject to a possible future
order supplementing the administrative record with additional materials; and it is further
ORDERED that the parties confer and file a proposed scheduling order by February 8,
2008.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge
Dated: January 18, 2008
New York, New York