Shinyei Corp. of Am. v. United States , 2011 CIT 69 ( 2011 )

Slip Op. 11-69
UNITED STATES COURT OF INTERNATIONAL TRADE
SHINYEI CORPORATION OF AMERICA,
Plaintiff, Before: Jane A. Restani, Judge
v.
Court No. 08-00191
UNITED STATES,
Defendant. Public Version
OPINION
[In Customs reliquidation matter Plaintiff’s motion for summary judgment granted. Defendant’s
motion for summary judgment denied.]
Dated: June 15, 2011
Charles H. Bayar for the plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Barbara S.
Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch,
Civil Division, U.S. Department of Justice (Amy M. Rubin); Edward N. Maurer, International
Trade Litigation, U.S. Customs and Border Protection, of counsel for the defendant.
Restani, Judge: This matter is before the court on Plaintiff Shinyei Corporation of
America (“SCA”) challenge to the U.S. Customs and Border Protection’s (“Customs”) denial of
protest. SCA moved for summary judgment and the Defendant United States (“the
Government”) cross-moved for summary judgment. The former is granted and the latter is
denied.
Court No. 08-00191 Page 2
BACKGROUND1
The entries at issue, Japanese ball bearings, were made in 1993 and 1994 and
were subject to antidumping duty cash deposit rates of either 9.22% or 13.11%.2 Mem. of Law
in Supp. of Pl.’s Mot. for Summ. J. (“Pl.’s Br.”) 9. SCA deposited estimated antidumping duties.
Id. at 9. In March 14, 2001 Liquidation Instructions, Message 1073202, the United States
Department of Commerce (“Commerce”) instructed Customs:
FOR ALL SHIPMENTS OF BALL BEARINGS AND PARTS THEREOF FROM
JAPAN PRODUCED BY NANKAI SEIKO CO., LTD. (SMT), EXPORTED BY,
IMPORTED BY, OR SOLD TO (AS SHOWN ON THE COMMERCIAL INVOICE OR
CUSTOMS DOCUMENT) THE FIRMS LISTED BELOW, AND ENTERED OR
WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION DURING THE PERIOD
05/01/1993 THROUGH 04/30/1994, ASSESS AN ANTIDUMPING LIABILITY
EQUAL TO THE PERCENTAGE OF THE ENTERED VALUE LISTED BELOW.3
Pl.’s Mot. for Summ. J. Ex. 14.4 SCA purchased the subject goods from Shinyei Kaisha (“SK”),
1
SCA makes numerous procedural challenges relating to the Government’s presentation
of its case. Largely they appear ill-founded, but as SCA has prevailed on substance they are
ultimately harmless.
2
Cash deposit rates were published in two final results of the administrative review of an
antidumping duty order covering ball bearings and parts thereof. Antifriction Bearings (Other
Than Tapered Roller Bearings) and Parts Thereof From France; et al.; Final Results of
Antidumping Duty Administrative Reviews, 57 Fed. Reg. 28,360, 28,361 (Dep’t Commerce June
24, 1992); Final Results of Antidumping Duty Administrative Reviews and Revocation in Part of
an Antidumping Duty Order, 58 Fed. Reg. 39,729, 39,730 (Dep’t Commerce July 26, 1993).
3
The March 14, 2001 Instructions then assessed duties on certain ball bearings sold to
certain U.S. customers, including those at issue here, [[
]] Pl.’s Br. 10.
4
SCA and the Government agreed to refer to the relevant language, “as shown on the
commercial invoice or customs document,” as the “Evidence Restriction.” Pl.’s Br. 10; Def.’s
Mem. in Supp. of Cross-Mot. for Summ. J. and in Opp’n to Pl.’s Mot. for Summ. J. (“Def.’s
Br.”) 2 n.2.
Confidential Information Deleted
Court No. 08-00191 Page 3
its parent. Invoices5 between SK and SCA reviewed by Customs did not list a U.S. end customer
in a way readily decipherable by Customs through review of entry documents, Customs did not
liquidate the subject merchandise in question according to Message 1073202. Def.’s Br. 3. On
April 4, 2002, in its Clean-Up Liquidation Instructions, Message 2092207, Commerce instructed
Customs:
IF YOU ARE STILL SUSPENDING LIQUIDATION ON ANY ENTRIES OF AFBS
FROM JAPAN DURING THE PERIOD 5/1/1993 THROUGH 4/30/1994 AFTER
APPLYING ALL OF THE ABOVE LIQUIDATION INSTRUCTIONS, YOU SHOULD
NOW LIQUIDATE SUCH ENTRIES AT THE DEPOSIT RATE REQUIRED AT THE
TIME OF ENTRY OF THE MERCHANDISE.
Pl.’s Mot. for Summ. J. Ex. 15.6 Customs then liquidated the subject goods in question at the
deposit rates of 9.22% and 13.11%. Pl.’s Br. 9, 11.
SK, the importer’s parent company, had purchased the subject merchandise from
Nankai Seiko Co., Ltd. (“SMT”). Pl.’s Br. 5–6. When packaging the goods, SMT marked the
cartons in which the goods were packaged with a three letter acronym indicating the U.S.
customer. Id. SCA imported and entered the goods. Id. At entry, Customs was presented with
5
The SK Invoices stated for each line item of the subject merchandise: brand name and
type of subject merchandise, manufacturer’s name and address, quantity of subject merchandise,
the product number assigned, the outside diameter and net weight of the subject merchandise,
and the unit price for each item in U.S. dollars. Pl.’s Mot. for Summ. J. Ex. 1–11; Pl.’s Br. 7.
The SK Invoices include no direct reference to the two U.S. customers at issue. See Pl.’s Mot.
for Summ. J. Ex. 1–11.
6
Commerce has no way of knowing what Customs actually did at liquidation. This
instruction tells Customs what to do for entries which were not covered by previous instructions.
As the entries at issue were covered by previous instructions, this message by its terms does not
apply. In any case, the Government does not argue that even if SCA had made clear at entry that
the sales were made to the specified customers, that because the government had not liquidated
the entries at the time of the second message, reliquidation in accordance with the earlier
instruction was impossible. The Government seems to accept that if all the relevant
documentation were presented at the time of entry, the first message would control.
Court No. 08-00191 Page 4
the SK Invoice to SCA, which did not plainly list the two ultimate U.S. Customers. See Pl.’s
Mot. for Summ. J. Ex. 1–11. After entry, SCA obtained SCA-to-customer invoices reflecting the
post-entry sale of the subject goods to the two specific U.S. customers at issue. Pl.’s Br. 6.
These are referred to as the “DC Invoices” in the briefing.7 See Pl.’s Br. 8.
In August 2007, SCA timely protested to Customs that the subject merchandise in
question was ultimately sold to U.S. customers listed in Message 1073202 and therefore
Customs should reliquidate those entries at the lower rate required by that message. Customs
denied SCA’s protest under 19 U.S.C. § 1515, presumably because the papers presented at entry
did not identify to Customs a U.S. customer listed in Message 1073203. Pl.’s Br. 12. The denial
itself refers only to the later Clean-Up Instructions from Commerce. SCA moved for summary
judgment. The Government cross-moved for summary judgment.
STANDARD OF REVIEW & JURISDICTION
Jurisdiction lies under 28 U.S.C. § 1581(a) (protest denial jurisdiction). Summary
judgment is appropriate if the moving party is entitled to judgment as a matter of law and no
genuine issue of material fact exists. CIT R. 56(c); Marriott Int’l Resorts, L.P. v. United States,
586 F.3d 962, 968 (Fed. Cir. 2009). Customs’ denial of protests are reviewed de novo. 28
U.S.C. § 2640(a)(1); Jazz Photo Corp. v. United States, 502 F. Supp. 2d 1277, 1293 (CIT 2007);
Rollerblade, Inc. v. United States, 112 F.3d 481, 484 (Fed. Cir. 1997) (any presumption of
correctness is irrelevant where there is no factual dispute between the parties, because the court
7
The DC Invoices stated for each line item of the subject merchandise: brand name and
type of subject merchandise, U.S. customer’s name and address, SMT’s name and address, the
quantity of subject merchandise, the product number assigned by SMT or the U.S. customer, and
the unit price for each item in U.S. dollars. Pl.’s Mot. for Summ. J. Ex. 1–11; Pl.’s Br. 8–9.
Court No. 08-00191 Page 5
is required to decide the legal issues).8
DISCUSSION
I. Commerce’s Instructions Do Not Prohibit Customs From Examining Post-Entry
Invoices at Protest
SCA alleges that the terms “sold” and “the commercial invoice” in the SMT
Instructions as applied to these entries refer to sales after entry and documents generated after
entry. Pl.’s Br. 13. Specifically, SCA argues that Customs’ interpretation of the SMT
Liquidation Instructions, as referring only to sales made and commercial invoices generated
prior to entry date, violates statutory provisions requiring covered entries to be liquidated in
accordance with the original review results or judicial review. Pl.’s Br. 14. This claim would
have merit if the Government adhered to it but the Government has made clear that it is not
claiming that post-entry sales may not be considered.9 Oral Argument, Shinyei Corp. of Am. v.
United States, No. 08-00191 (CIT May 26, 2011). The Government argues rather that the
importer must make the fact of the post-entry sales clear to Customs in its entry documents. Id.We start with the proposition that Customs must interpret Commerce’s
8
The Government claims that Customs receives Skidmore deference for its interpretation
of liquidation instructions. Def.’s Reply to Pl.’s Resp. to Def.’s Cross-Mot. for Summ. J.
(“Def.’s Resp. Br.”) 2 (citing Skidmore v. Swift & Co., 323 U.S. 134 (1944)). Commerce’s
instructions themselves do not receive deference. Jilin Henghe Pharm. Co. v. United States, 342
F. Supp. 2d 1301, 1305 (CIT 2004), judgment vacated as moot, 123 Fed. App’x 402 (Fed. Cir.
2005). The instructions must reflect antidumping duty review results. Customs has no role in
the antidumping process, so no deference is afforded to Customs’ interpretation of instructions
outside its expertise. In any case the instructions are clear.
9
Such an interpretation would be inconsistent with 19 U.S.C. § 1677a(b) which
recognizes that some sales used to calculate U.S. price in making the antidumping comparison
may occur after entry.
Court No. 08-00191 Page 6
instructions precisely as Customs’ role in the process should be ministerial: Customs should do
no more than enact the intentions of Commerce. Mittal Steel Galati S.A. v. United States, 491 F.
Supp. 2d 1273, 1281 (CIT 2007) (citing Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d
973, 977 (Fed. Cir. 1994)). First, nothing in the fragment, “SOLD TO (AS SHOWN ON THE
COMMERCIAL INVOICE OR CUSTOMS DOCUMENT) THE FIRMS LISTED BELOW,”
limits “sold” and “commercial invoice” to a specific time frame. Assuming it could do so
without running afoul of the protest statute and decades of law interpreting it, if Commerce
wished to limit the time frame for submission of documentation, Commerce would have added
the words “as presented at the time of entry.” Commerce did not place such a limitation in the
instructions, and probably could not lawfully do so.
Next, even if Customs did not have the relevant information at entry to determine
whether or not the goods were ultimately sold to the specific U.S. customers listed in the
instructions from Commerce, Customs apparently had that information at the time of protest.10
Customs must look to reality at protest, correcting any mistakes made at entry regardless of the
record evidence at time of entry. See 19 U.S.C. § 1514; United States v. C. J. Tower & Sons of
Buffalo, Inc., 499 F.2d 1277, 1280 (C.C.P.A. 1974) (assuming the importer was permitted to
submit post-entry evidence to Customs but permitting the importer to submit such evidence
before the Customs Court to correct a mistake of fact made at entry). It would be illogical for
Customs not to look at evidence which is available at protest, only to trigger a court review
where the evidence would be examined. See ITT Corp. v. United States, 24 F.3d 1384, 1394
10
The protest submitted to the court reflects that the actual documentation was to be
provided after the protest was recorded. The Government does not allege that SCA did not or
was not willing to submit the invoices at that time.
Court No. 08-00191 Page 7
(Fed. Cir. 1994) (“the statutory scheme for review of Customs’ denial of a [reliquidation request]
contemplated the evaluation of evidence beyond that considered by Customs” and evidence at
trial “is not limited to merely that which is contained in the administrative record before
Customs”); C. J. Tower, 499 F.2d at 1280.11
Here, Customs, for good reason or not, was incorrect in determining that the
subject goods were not sold to certain U.S. customers and thus were not covered by the first
message. See Pl.’s Mot. for Summ. J. Ex. 1–11. Because Customs made an error, in the sense of
liquidating the entries in a manner that conflicted with Commerce’s instructions, which in turn
implement the antidumping review results, the statute requires Customs to correct the mistake at
protest. See 19 U.S.C. § 1514(a); Ford Motor Co. v. United States, 157 F.3d 849, 857 (Fed. Cir.
1998) (finding that protesters can correct errors made not only by employees of Customs but also
by employees of the importer, thus implying that Customs must consider additional
documentation submitted by the importer at protest). The Government is incorrect that
antidumping duties lead to a narrowing of protest rights. There are not two protest procedures,
one for ordinary duties and one for unfair trade duties. There is one procedure. 19 U.S.C. §
1514(a). Thus, Customs erred in not considering additional documents at protest to demonstrate
the correct amount of duties owed.
The Government claims that requiring Customs to look at invoices not extant at
11
These decisions refer to the now repealed 19 U.S.C. § 1520(c), which provided a
longer time for correction of mistakes of fact than for protesting other errors. There is now one
time period for filing protests based on mistake of law or fact. See 19 U.S.C. 1514(a)&(c)
(2004).
Court No. 08-00191 Page 8
the time of entry would create an incalculable administrative burden. Def.’s Br. 14.12 Customs,
however, need not necessarily expand its review at entry as the right of protest permits correction
of any error. Protest under 19 U.S.C. § 1514 is the principal means by which importers may
challenge an erroneous decision of Customs. See 19 U.S.C. § 1514(a); United States v. U.S.
Shoe Corp., 523 U.S. 360, 365 (1998) (holding that a protest under 19 U.S.C. § 1514 “is an
essential prerequisite when one challenges an actual Customs decision”). Resolving errors of
this nature at protest puts to rest the Government’s concerns regarding the administrative burden
at entry, Def.’s Br. 14–16, and possible statutory time frame violations,13 Def.’s Resp. Br. 11.
The Government also claims that its actions in the instant case were purely
ministerial. Def.’s Br. 7. Presumably it means that to do more than it did would invade
Commerce’s provision. Specifically, the Government states that Customs merely complied with
Customs’ practice since 2000, which has been and continues to be to review only those
documents in existence at the time of entry, excluding post-entry invoices, thereby standardizing
the review of every entry. Def.’s Br. 2–3, 9; Def.’s Cross-Mot. for Summ. J. Amdur Decl. ¶
9–10, 12. Thus, the Government contends, Customs merely read the liquidation instructions to
be in compliance with its regulations. Def.’s Br. 10.14 Ministerial duty—which gives rise to a
12
See supra, n. 9.
13
The Government also has 19 U.S.C. § 1504(b)(1) at its disposal to prevent deemed
liquidation at entry rates for delayed liquidation, permitting the Government to “extend the
period in which to liquidate an entry if . . . the information needed for the proper appraisement or
classification of the imported or withdrawn merchandise . . . or for ensuring compliance with
applicable law, is not available to the Customs Service.” 19 U.S.C.
§ 1504(b)(1). It need not use this authority, however. It may simply liquidate as best it can and
place the burden on the importer to prove its claim at protest.
14
The Government also alleges that 19 C.F.R. § 142.3 provides for identification of
(continued...)
Court No. 08-00191 Page 9
ministerial act—“is one in respect to which nothing is left to discretion.” Mississippi v. Johnson,
71 U.S. 475, 498 (1866). Here, Customs interpreted Commerce’s instructions, rather than
automatically appling an antidumping duty rate. The act of interpretation is not purely
ministerial. Mitsubishi Elec., 44 F.3d at 977 (“Customs cannot modify . . . [Commerce’s]
determinations, their underlying facts, or their enforcement.” (Internal quotation marks
omitted)). Deciding that its policies and regulations should be read expansively to override
Commerce’s instruction was a Customs decision. Because Customs, in essence, modified
Commerce’s instructions, Customs’ actions are not ministerial.
II. DC Invoices Show Subject Goods Sold to Relevant U.S. Customers
Both parties contend that no genuine issue of material fact exists for the purposes
of granting its motion. Def.’s Resp. to Pl.’s Statement of Material Facts as to Which There Are
No Genuine Issues to Be Tried ¶ 6; Mem. of Law in Opp’n to Def.’s Cross-Mot. for Summ. J.
and in Reply to Def.’s Opp’n to Pl.’s Mot. for Summ. J. (“Pl.’s Resp. Br.”) 8, 10. SCA alleges
that the DC Invoices submitted at protest demonstrate that the goods were sold to specific U.S.
customers.15 This claim has merit and at oral argument the Government made clear that even
14
(...continued)
merchandise that enters the United States having been sold. See Def.’s Br. 12 (citing 19 C.F.R.
§ 142.3(6). To the extent the Government relies on its own regulations to argue that
“commercial invoice” in Commerce’s instructions means only the invoice provided at the time of
entry, Def.’s Br. 7–8, it errs. The relevant regulation only shows that entry documentation
requires inter alia “a commercial invoice.” See 19 C.F.R. § 142.3. It does not limit the
documentation that can be filed with a protest under 19 C.F.R. § 174.11 et seq.
15
SCA alleges, in the alternative, the court should find that the markings on the side of
the cartons and the U.S. Customer’s post office box number on the SK Invoices were sufficient
for Customs to find that the subject goods were sold to the relevant U.S. customers at the time of
entry. Pl.’s Resp. Br. 23 n.19. As this matter is resolved on the evidence of the DC Invoices, the
(continued...)
Court No. 08-00191 Page 10
under the court’s view of Customs’ duty at protest no issue of material fact exists.
The DC Invoices clearly show that each of the entries protested were sold to a
U.S. customer listed in Message 1073202. Because SCA made its claim clear at protest and
Customs should have examined the additional invoices at protest, if they were presented, and the
court may do so now, and because no genuine issue of material fact exists, the court grants
summary judgment in favor of SCA.
CONCLUSION
For the above reasons, the court concludes that SCA’s motion for summary
judgment is GRANTED and the Government’s cross-motion for summary judgment is
DENIED. The entries shall be liquidated at the rates ordered by Commerce in Message
1073202 and refund made, with interest, as provided by law. Judgment shall enter accordingly.
/s/ Jane A. Restani
Jane A. Restani
Judge
Dated: This 15th day of June, 2011.
New York, New York
15
(...continued)
court need not decide whether Customs erred in not interpreting the markings on the packages,
or whether SCA failed in some duty to provide the code. If a proper protest is made, all mistakes
may be fixed, those of Customs and those of the importer. The court need not decide who
should have done what.