Giorgio Foods, Inc. v. United States , 2013 CIT 29 ( 2013 )

Slip Op. 13-29
UNITED STATES COURT OF INTERNATIONAL TRADE
GIORGIO FOODS, INC.,
Plaintiff,
v.
UNITED STATES and UNITED STATES
INTERNATIONAL TRADE Before: Timothy C. Stanceu, Judge
COMMISSION,
Court No. 03-00286
Defendants,
and
L.K. BOWMAN COMPANY,
MONTEREY MUSHROOMS, INC., and
THE MUSHROOM COMPANY,
Defendant-intervenors.
OPINION
[Grating motions to dismiss pursuant to USCIT Rules 12(b)(1) and 12(b)(5)]
Dated: March 6, 2013
Michael T. Shor and Sarah Brackney Arni, Arnold & Porter LLP, of Washington, DC, for
plaintiff.
Courtney S. McNamara, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington DC, for defendant United States. With her on the
brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson,
Director, and Franklin E. White, Jr., Assistant Director.
Neal J. Reynolds, Assistant General Counsel for Litigation, and Patrick V. Gallagher, Jr.,
Attorney Advisor, Office of the General Counsel, U.S. International Trade Commission, of
Washington DC, for defendant U.S. International Trade Commission.
Court No. 03-00286 Page 2
Valerie A. Slater, Akin, Gump, Strauss, Hauer & Feld, LLP, of Washington, DC, for
defendant-intervenors L.K. Bowman Company and The Mushroom Company. With her on the
brief were W. Randolph Teslik and Troy D. Cahill.
Michael J. Coursey and R. Alan Luberda, Kelley Drye & Warren, LLP, of Washington,
DC, for defendant-intervenor Monterey Mushrooms, Inc.
Stanceu, Judge: This case arose from decisions of two agencies, the U.S. International
Trade Commission (the “ITC” or the “Commission”) and U.S. Customs and Border Protection
(“Customs”), denying plaintiff monetary benefits under the now-repealed Continued Dumping
and Subsidy Offset Act of 2000 (“CDSOA” or “Byrd Amendment”), 19 U.S.C. § 1675c (2000).1
The ITC determined that Giorgio Foods, Inc. (“Giorgio”), a domestic producer of preserved
mushrooms, did not qualify for “affected domestic producer” (“ADP”) status, which a domestic
producer must obtain in order to receive CDSOA disbursements (“offsets”) of collected
antidumping duties from Customs. Giorgio claims it is owed a share of the duties Customs
collected under various antidumping duty orders on imports of certain preserved mushrooms
from Chile, the People’s Republic of China (“China”), Indonesia, and India and distributed to
other domestic mushroom producers.2 Second Am. Compl. ¶ 17 (June 7, 2011), ECF No. 150-1.
1
Pub.L. No. 106-387, §§ 1001-03, 114 Stat. 1549, 1549A-72-75, repealed by Deficit
Reduction Act of 2005, Pub.L. 109-171, § 7601(a), 120 Stat. 4, 154 (Feb. 8, 2006; effective
Oct. 1, 2007). Citations are to the codified version of the Continued Dumping and Subsidy
Offset Act (“CDSOA”), 19 U.S.C. § 1675c (2000). All other citations to the United States Code
are to the 2006 edition.
2
See Notice of Antidumping Duty Order: Certain Preserved Mushrooms from Chile,
63 Fed. Reg. 66,529 (Dec. 2, 1998); Notice of Amendment of Final Determination of Sales at
Less Than Fair Value and Antidumping Duty Order: Certain Preserved Mushrooms from the
People’s Republic of China, 64 Fed. Reg. 8,308 (Feb. 19, 1999); Notice of Antidumping Duty
Order: Certain Preserved Mushrooms from Indonesia, 64 Fed. Reg. 8,310 (Feb. 19, 1999);
Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping
Duty Order: Certain Preserved Mushrooms from India, 64 Fed. Reg. 8,311 (Feb. 19, 1999).
Court No. 03-00286 Page 3
The ITC construed the “petition support requirement” of the CDSOA, 19 U.S.C.
§ 1675c(b)(1)(A), (d)(1), under which CDSOA offsets are limited to petitioners and parties in
support of an antidumping or countervailing duty petition, so as to disqualify Giorgio from the
list of potential ADPs because Giorgio indicated to the ITC in questionnaire responses that it did
not support the petition that resulted in the antidumping duty orders. Id. ¶ 45. Because Giorgio
lacked ADP status, Customs made no CDSOA disbursements to Giorgio for Fiscal Years 2001
through 2010. Id. ¶¶ 10, 80-84, 87.
Plaintiff’s second amended complaint brings as-applied constitutional challenges to the
CDSOA’s petition support requirement that are grounded in the First Amendment and the Fifth
Amendment equal protection guarantee. Id. ¶¶ 89-98. Plaintiff also asserts “unjust enrichment”
claims against the defendant-intervenors opposing it in this action, L.K. Bowman Company, a
division of Hanover Foods Corporation (“L.K. Bowman”), Monterey Mushrooms, Inc.
(“Monterey”), and The Mushroom Company (“Mushroom Co.”), each of whom Giorgio alleges
to have received and retained, unjustly, Giorgio’s share of CDSOA distributions. Id. ¶¶ 85, 108.
Before the court are several motions to dismiss. The court concludes that Giorgio’s
constitutional claims must be dismissed for failure to state a claim upon which relief can be
granted and that it lacks subject matter jurisdiction over Giorgio’s unjust enrichment claims. The
court will enter judgment dismissing this action.
I. BACKGROUND3
On January 6, 1998, an antidumping duty petition filed with Commerce and the ITC
sought the imposition of antidumping duties on preserved mushrooms from Chile, China,
3
The facts as stated herein are as pled in the Second Amended Complaint.
Court No. 03-00286 Page 4
Indonesia, and India. Second Am. Compl. ¶ 26. Beginning that year, the ITC conducted
investigations to determine whether imports of certain preserved mushrooms from Chile, China,
Indonesia, and India were causing or threatening to cause material injury to a domestic industry.
Id. ¶ 27 (citing Initiation of Antidumping Investigations: Certain Preserved Mushrooms from
Chile, India, Indonesia, and the People’s Republic of China, 63 Fed. Reg. 5,360 (Feb. 2, 1998)).
In conducting those investigations, the ITC sent questionnaires to domestic producers of
preserved mushrooms, including Giorgio. Id. ¶¶ 9, 45. In its responses to the Commission’s
questionnaires for the preliminary, as well as the final, phase of the investigations, “Giorgio
wrote that it (1) took no position with respect to the petition filed against preserved mushrooms
from Chile, China, and Indonesia, and (2) opposed the petition with respect to India.” Id. ¶ 45.
Based on an affirmative ITC injury determination and its own affirmative finding of sales
at less than fair value, the International Trade Administration, U.S. Department of Commerce
(“Commerce” or the “Department”) issued an antidumping duty order on certain preserved
mushrooms from Chile on December 2, 1998. Id. ¶¶ 8, 62; see also Notice of Antidumping Duty
Order: Certain Preserved Mushrooms from Chile, 63 Fed. Reg. 66,529 (Dec. 2, 1998).
Similarly, on February 19, 1999, Commerce issued antidumping duty orders on preserved
mushrooms from India, Indonesia, and China. Second Am. Compl. ¶¶ 8, 62; see also Notice of
Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty
Order: Certain Preserved Mushrooms from India, 64 Fed. Reg. 8,311 (Feb. 19, 1999); Notice of
Antidumping Duty Order: Certain Preserved Mushrooms from Indonesia, 64 Fed. Reg. 8,310(Feb. 19, 1999); Notice of Amendment of Final Determination of Sales at Less Than Fair Value
and Antidumping Duty Order: Certain Preserved Mushrooms from the People’s Republic of
China, 64 Fed. Reg. 8,308 (Feb. 19, 1999).
Court No. 03-00286 Page 5
The CDSOA was enacted on October 28, 2000. 19 U.S.C. § 1675c. Concluding that
Giorgio had not supported a petition resulting in any of the four mushroom antidumping orders
so as to qualify Giorgio for CDSOA offsets, the ITC did not include Giorgio on its published
lists of ADPs for the mushroom antidumping duty orders for Fiscal Years 2001 through 2010.4
Second Am. Compl. ¶ 10. The ITC subsequently denied Giorgio’s written requests for ADP
status. Id. ¶¶ 71-73. Giorgio filed CDSOA certifications with Customs for various fiscal years
to request CDSOA disbursements, but Customs made no disbursements to Giorgio.5 Id.
¶¶ 67, 78. In contrast, the ITC included the defendant-intervenors on its ADP lists, under the
four mushroom antidumping orders, for all fiscal years since the CDSOA was enacted, and
Customs has distributed CDSOA offsets to the defendant-intervenors in every fiscal year. Id.
¶ 11.
4
Distribution of Continued Dumping and Subsidy Offset to Affected Domestic
Producers, 66 Fed. Reg. 40,782, 40,797 (Aug. 3, 2001); Distribution of Continued Dumping and
Subsidy Offset to Affected Domestic Producers, 67 Fed. Reg. 44,722, 44,735-36 (July 3, 2002);
Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, 68 Fed.
Reg. 41,597, 41,630-31 (July 14, 2003); Distribution of Continued Dumping & Subsidy Offset to
Affected Domestic Producers, 69 Fed. Reg. 31,162, 31,193-94 (June 2, 2004); Distribution of
Continued Dumping & Subsidy Offset to Affected Domestic Producers, 70 Fed. Reg. 31,566,
32,156-57 (June 1, 2005); Distribution of Continued Dumping & Subsidy Offset to Affected
Domestic Producers, 71 Fed. Reg. 31,336, 31,351, 31,366, 31,369, 31,372 (June 1, 2006);
Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 72 Fed.
Reg. 29,582, 29,597, 29,612, 29,615, 29,619 (May 29, 2007); Distribution of Continued
Dumping & Subsidy Offset to Affected Domestic Producers, 73 Fed. Reg. 31,196, 31,211,
31,226-27, 31,230, 31,233 (May 30, 2008); Distribution of Continued Dumping & Subsidy Offset
to Affected Domestic Producers, 74 Fed. Reg. 25,814, 25,830, 25,846, 25,849, 25,852 (May 29,
2009); Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers,
75 Fed. Reg. 30,530, 30,546, 30,562, 30,565, 30,568 (June 1, 2010).
5
Plaintiff pleads that Giorgio Foods, Inc. (“Giorgio”) did not file a certification for
CDSOA benefits under the antidumping duty order for preserved mushrooms from India on
account of futility, as the Commission’s response to Giorgio’s certifications for the three other
antidumping duty orders had stated that it was “inappropriate” to add Giorgio to the list of ADPs
because of Giorgio’s questionnaire responses in the original investigations. Second Am. Compl.
¶¶ 70-73 (June 7, 2011), ECF No. 150.
Court No. 03-00286 Page 6
Giorgio commenced this action on May 23, 2003. Summons, ECF No. 1; Compl., ECF
No. 4. This case was stayed on October 10, 2003 pending resolution of cross-motions for
judgment upon the agency record in another case involving a constitutional challenge to the
CDSOA, PS Chez Sidney, L.L.C. v. U.S. Intern. Trade Com’n, Court No. 02-00635. Order,
ECF No. 27. The decision in that case, PS Chez Sidney, 30 CIT 858, 442 F. Supp. 2d 1329(2006) (“Chez Sidney I”), rejected a statutory CDSOA claim but held the CDSOA petition
support requirement violative of the First Amendment, id. at 1331-33.
After the lifting of the stay, plaintiff moved on July 28, 2006 for a temporary restraining
order and a preliminary injunction, seeking to prevent further CDSOA distributions to the
recognized ADPs for the mushroom antidumping duty orders.6 Giorgio Foods Inc.’s Mot. for a
TRO & for a Prelim. Inj., ECF No. 30. This Court denied the motion for a temporary restraining
order on August 2, 2006, Order, ECF No. 32, and on August 9, 2006, plaintiff filed a second
motion for a preliminary injunction, Giorgio Foods Inc.’s Mot. for a Prelim. Inj., ECF No. 34.
On August 23, 2006, L.K. Bowman, Monterey, Mushroom Canning, and Sunny Dell Foods, Inc.
(“Sunny Dell”), parties that were petitioners in the antidumping duty investigations, Second Am.
Compl. ¶ 27, moved to intervene in this action, Mot. to Intervene as of Right, ECF No. 39. The
court granted the intervention motion with respect to all movants except for Sunny Dell, which
declined to produce a witness requested by plaintiff for questioning at the preliminary injunction
6
As a result of the commencement of this action and plaintiff’s moving on August 9,
2006 for a preliminary injunction, U.S. Customs & Border Protection (“Customs”), pending
resolution of this action, provisionally treated Giorgio as an affected domestic producer for
Fiscal Years 2006 through 2009 and withheld Giorgio’s claimed share from distribution to
recognized ADPs. Second Am. Compl. ¶ 87. Customs did not withhold any CDSOA funds for
Giorgio for Fiscal Year 2010. Id. ¶ 88.
Court No. 03-00286 Page 7
hearing. Order 2 (Sept. 13, 2006), ECF No. 51. On September 22, 2006, this Court denied the
motion for a preliminary injunction. Order Denying Pl.’s Mot. for Prelim. Inj., ECF No. 58.
On October 12, 2006, plaintiff moved for leave to amend its complaint. Giorgio Foods,
Inc.’s Mot. for Leave to Amend the Compl., ECF No. 59. Plaintiff sought to abandon a statutory
claim it had brought against the ITC, to add facial and as-applied challenges to the petition
support requirement under the Fifth Amendment equal protection guarantee, and to add claims
for unjust enrichment against the defendant-intervenors. Mem. of Law in Supp. of Pl.’s Mot. for
Leave to Amend the Compl. 1-2, ECF No. 59. Plaintiff also sought to “update” its claims, to add
“factual allegations” to account for developments since the case was filed and stayed in 2003,
and to clarify its requested relief, which plaintiff specified as CDSOA distributions for fiscal
years 2001 through 2005. Id.; First Am. Compl. ¶¶ 64, 69 (Oct. 12, 2006), ECF 59-2. On
August 21, 2007, the court granted plaintiff’s motion with respect to the aforementioned
amendments.7 Giorgio Foods, Inc. v. United States, 31 CIT 1261, 1262, 515 F. Supp. 2d 1313,
1316 (2007) (“Giorgio I”).
On May 6, 2008, this Court stayed this action a second time pending appellate resolution
of the Chez Sidney litigation as well as another case that addressed constitutional issues
involving the CDSOA, SKF USA Inc. v. United States, Court No. 05-00542. Order, ECF No. 84;
SKF USA, Inc. v. United States, 30 CIT 1433, 1446-47 451 F. Supp. 2d 1355, 1366-67 (2006)
(“SKF USA I”) (holding the petition support requirement of the CDSOA unconstitutional on
7
Plaintiff’s motion for leave to amend also sought to add Sunny Dell Foods, Inc.
(“Sunny Dell”) as a defendant. Giorgio Foods, Inc.’s Mot. for Leave to Amend the Compl. 4
(Oct. 12, 2006), ECF No. 59. The court denied this request, concluding that the addition would
unduly prejudice plaintiff, based on Sunny Dell’s previous refusal to produce a witness in
response to plaintiff’s request at the hearing on the motion for preliminary injunction. Giorgio
Foods, Inc. v. United States, 31 CIT 1261, 1265-1267, 515 F. Supp. 2d 1313, 1318-20 (2007).
Court No. 03-00286 Page 8
Fifth Amendment equal protection grounds). On February 19, 2009, the Court of Appeals for the
Federal Circuit (“Court of Appeals”) reversed SKF USA I and upheld the petition support
requirement under the First Amendment and the equal protection guarantee of the Fifth
Amendment. SKF USA, Inc. v. United States, 556 F.3d 1337, 1360 (Fed. Cir. 2009) (“SKF
USA II”). On May 17, 2010, the United States Supreme Court denied a petition for a writ of
certiorari in SKF USA II. SKF USA, Inc. v. Customs and Border Protection, 130 S.Ct. 3273(2010). On October 28, 2010, the Court of Appeals issued a non-precedential order in PS Chez
Sidney, stating that, following the denial of certiorari, SKF USA II is a final decision that “is
controlling with regard to all constitutional issues presented in [the] appeal,” while limiting
briefing to the non-constitutional issues in that case. PS Chez Sidney, L.L.C. v. U.S. Intern.
Trade Com’n, 409 F.App’x 327, 329 (Fed. Cir. 2010) (“Chez Sidney II”).
After the lifting of the second stay, plaintiff moved on April 5, 2010 for leave to amend
its complaint a second time. Giorgio Foods, Inc.’s Second Mot. for Leave to Amend the Compl.,
ECF No. 150. Plaintiff sought to withdraw its facial First Amendment and equal protection
challenges to the CDSOA and replace them with claims that the CDSOA violates the First
Amendment and Fifth Amendment equal protection guarantee “as applied to Giorgio” for Fiscal
Years 2001 through 2010. Mem. of Law in Supp. of Pl.’s Second Mot. for Leave to Amend the
Compl. 2-4, ECF No. 150 (“Pl.’s Mem. in Supp. of Second Mot. to Amend”); Second Am.
Compl. ¶¶ 90-91, 94-97. Plaintiff also sought to reinstate its previously abandoned statutory
claim and, in the alternative, to add a claim alleging “substantive and procedural due process
violations, arising from the CDSOA’s failure to afford Giorgio notice and an opportunity to
present evidence of actions Giorgio took in support of the petition.” Pl.’s Mem. in Supp. of
Second Mot. to Amend 3-4. Finally, plaintiff sought to add a claim for money damages against
Court No. 03-00286 Page 9
the United States. Id. at 3-4, 12. On November 17, 2011, this Court granted plaintiff’s request to
abandon the facial constitutional claims, Giorgio Foods, Inc. v. United States, 35 CIT __, __,
804 F. Supp. 2d 1315, 1320-21 (2011) (“Giorgio II”), but denied plaintiff’s requests to add a
statutory claim, due process claims, and a claim for money damages, id. 35 CIT at __, 804 F.
Supp. 2d at 1321-25.
On July 13, 2012, the Court of Appeals issued its decision in PS Chez Sidney, L.L.C. v.
U.S. Intern. Trade Com’n, 684 F.3d 1374 (Fed. Cir. 2012) (“Chez Sidney III”). On October 16,
2012, defendant and defendant-intervenors filed their motions to dismiss. On January 30, 2013,
the court denied a motion by plaintiff to stay this action pending the outcome of two appeals of
CDSOA-related decisions arising from an antidumping duty order on Chinese wooden bedroom
furniture that were, and continue to be, pending before the Court of Appeals. Giorgio Foods v.
United States, 37 CIT __, __, Slip Op. 13-14, at 5 (“Giorgio III”). On March 1, 2013, plaintiff
filed its response to the motions to dismiss. Pl.’s Opp’n to Defs.’ and Def.-Intervenors’ Mots. to
Dismiss, ECF No. 200 (“Pl.’s Opp’n”).
II. DISCUSSION
Before the court are the motions to dismiss the second amended complaint, as filed on
October 16, 2012 by defendant United States, defendant ITC, and defendant-intervenors.8 The
8
Defendant U.S. International Trade Commission (“ITC”) moved to dismiss under Rule
12(b)(5). Def. U.S. Int’l Trade Comm’n’s Mot. to Dismiss Pursuant to R. 12(b)(5), ECF No. 179
(“ITC’s Mot.”). The United States and defendant-intervenors moved to dismiss under Rules
12(b)(1) and 12(b)(5). Def.’s Mot. to Dismiss for Failure to State a Claim upon which Relief
Can Be Granted and Mot. to Dismiss for Lack of J. (“Def.’s Mot.”), ECF No. 180; Mot. by
Def.-Intervenors L.K. Bowman Co. and The Mushroom Co. (Formerly Mushroom Canning Co.)
to Dismiss the Second Am. Compl., ECF No. 181 (“L.K. Bowman & Mushroom Co.’s Mot.”);
Def.-Intervenor Monterey Mushrooms, Inc.’s Mot. to Dismiss Pl.’s Second Am. Compl.
Pursuant to Rs. 12(b)(1) and 12(b)(5), ECF No. 182 (“Monterey’s Mot.”). Earlier (in 2003), a
motion to dismiss a count in the original complaint pursuant to USCIT Rule 12(b)(5) was filed
(continued…)
Court No. 03-00286 Page 10
claims remaining in that complaint following the decision of this Court in Giorgio II, 35 CIT
at __, 804 F. Supp. 2d at 1320-21, are constitutional challenges to the CDSOA, brought against
defendants ITC and the United States, and claims of unjust enrichment, brought against the
defendant-intervenors.9 Specifically, plaintiff challenges the petition support requirement of the
CDSOA, as applied to Giorgio, on First Amendment grounds. Second Amended Compl.
¶¶ 89-92. Further, it challenges the petition support requirement, as applied to Giorgio, on Fifth
Amendment equal protection grounds. Id. ¶¶ 93-98. Finally, invoking supplemental jurisdiction,
id. ¶ 21, plaintiff claims that the defendant-intervenors have been unjustly enriched at the
expense of Giorgio, having received and retained Giorgio’s lawful share of CDSOA distributions
for certain fiscal years, and seeks restitution, through direct recovery of those distributions, from
each of the defendant-intervenors, id. ¶¶ 107-108, 109(e).
The court exercises subject matter jurisdiction over plaintiff’s constitutional challenges to
the CDSOA according to section 201 of the Customs Courts Act of 1980 (2006), 28 U.S.C.
§ 1581(i)(4), which provides the Court of International Trade jurisdiction of civil actions arising
out of any law of the United States, such as the CDSOA, providing for administration with
respect to duties (including antidumping duties) on the importation of merchandise for reasons
other than the raising of revenue. The CDSOA, out of which the constitutional claims arise, is
such a law. See Furniture Brands Int’l v. United States, 35 CIT ___, ___, 807 F. Supp. 2d 1301,
(continued…)
by the ITC. Mot. of Def. U.S. Int’l Trade Comm’n to Dismiss Claim 1 of the Compl. (Aug. 25,
2003), ECF No. 18. Because this motion was limited to the statutory claim in plaintiff’s original
complaint, it became moot when plaintiff abandoned that claim in its first amended complaint.
9
In accordance with this Court’s Order dated April 22, 2011, ECF No. 143, which
granted a Consent Motion for Bifurcation, the court adjudicates plaintiff’s constitutional claims
prior to adjudicating any other issues, including remedy issues and plaintiff’s claims for unjust
enrichment and restitution.
Court No. 03-00286 Page 11
1307-10 (2011). The court concludes it lacks subject matter jurisdiction over plaintiff’s claims
of unjust enrichment. This issue is addressed in Part II(B) of this Opinion.
A. No Relief Is Available on Plaintiff’s As-Applied Constitutional Challenges to the CDSOA
In deciding USCIT Rule 12(b)(5) motions to dismiss for failure to state a claim upon
which relief can granted, “the court must accept as true the complaint’s undisputed factual
allegations and should construe them in a light most favorable to the plaintiff.” Cambridge v.
United States, 558 F.3d 1331, 1335 (Fed. Cir. 2009) (citations omitted). However, plaintiff's
complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Determining whether a complaint states a
plausible claim for relief [is] a context-specific task that requires the reviewing court to draw on
its judicial experience and common sense.” Id. at 679.
The CDSOA amended the Tariff Act of 1930 (“Tariff Act”) to provide for the
distribution of antidumping and countervailing duties to persons with ADP status, which is
limited to petitioners, and interested parties in support of petitions, with respect to which
antidumping duty and countervailing duty orders are entered.10 19 U.S.C. § 1675c(a), (d).11
10
The CDSOA provided that:
The term “affected domestic producer” means any manufacturer, producer, farmer,
rancher or worker representative (including associations of such persons) that–
(A) was a petitioner or interested party in support of the petition with respect to
which an antidumping duty order, a finding under the Antidumping Act of 1921, or a
countervailing duty order has been entered, and
(B) remains in operation.
19 U.S.C. § 1675c(b)(1) (emphasis added).
11
Congress 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
(continued…)
Court No. 03-00286 Page 12
The statute directed the ITC to forward to Customs “within sixty days after the effective date of
this section [19 U.S.C. § 1675c] in the case of orders . . . in effect on January 1, 1999, or
thereafter . . . a list of 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). The CDSOA directed that Customs publish in the Federal Register, prior to each
distribution, lists of ADPs potentially eligible for distributions of a “continuing dumping and
subsidy offset” based on the lists obtained from the Commission and that Customs request that
potentially eligible parties certify eligibility for such an offset. Id. § 1675c(d)(2). The CDSOA
also directed Customs to segregate antidumping and countervailing duties according to the
relevant antidumping or countervailing duty order, to maintain these duties in special accounts,
and to distribute to companies determined to be ADPs annually, as reimbursement for incurred
qualifying expenditures, a ratable share of the funds (including all interest earned) from duties
assessed on a specific unfairly traded product that were received in the preceding fiscal year. Id.
§ 1675c(d)(3), (e).
The Second Amended Complaint states that “[a]s applied to Giorgio . . . the CDSOA’s
petition support requirement violates the free speech clause of the First Amendment of the
United States Constitution.” Second Am. Compl. ¶ 90. Plaintiff alleges that “[a]s a result of the
(continued…)
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. 03-00286 Page 13
unconstitutional application of the petition support requirement, Giorgio has unlawfully been . . .
denied CDSOA offsets . . . for fiscal years 2001-2010 . . . .” Id. ¶ 91.
Plaintiff alleges, further, that “[a]s applied to Giorgio . . . the CDSOA’s petition support
requirement violates the Equal Protection guarantee of the U.S. Constitution.” Id. ¶ 94. The
complaint states that the CDSOA’s speech-based eligibility criterion “creates a classification that
implicates the exercise of constitutional free speech rights . . . that is not narrowly tailored to
achieve a compelling government objective.” Id. ¶ 95. Plaintiff also claims that the petition
support requirement “discriminates without a rational basis between Giorgio . . . and other
domestic producers . . . , including the Defendant-Intervenors.” Id. ¶ 96. Plaintiff alleges that
because of the equal protection violation, “Giorgio has unlawfully been . . . denied [CDSOA
offsets] . . . for fiscal years 2001-2010 . . . .” Id. ¶ 97.
Both of plaintiff’s constitutional claims are foreclosed by the holding of SKF USA II,
which upheld the petition support requirement of the CDSOA on both First Amendment and
equal protection grounds. The Court of Appeals stated that “the 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.” SKF USA II, 556 F.3d at 1360. The Court of Appeals further held
that “[b]ecause it serves a substantial government interest, the Byrd Amendment is also clearly
not violative of equal protection under the rational basis standard.” Id.Although stating that its challenges are “as applied to Giorgio,” Second Am. Compl.
¶¶ 90, 94, plaintiff does not plead facts distinguishing Giorgio’s constitutional challenges from
the challenges asserted, and rejected by the Court of Appeals, in SKF USA II. Plaintiff alleges
various facts that it characterizes as demonstrating that it is in support of an antidumping duty
Court No. 03-00286 Page 14
petition, including “providing all requested factual information” in its questionnaire responses to
the ITC. Pl.’s Opp’n 1, 3 (citing Second Am. Compl. ¶ 45). The controlling fact, however, is
plaintiff’s admission in the complaint that, in both the preliminary and final phases of the
Commission’s investigation, “in response to one question on each questionnaire asking whether
it supported the petition against each country, Giorgio wrote that it (1) took no position with
respect to the petition filed against preserved mushrooms from Chile, China, and Indonesia, and
(2) opposed the petition with respect to India.” Second Am. Compl. ¶ 45. SKF USA, Inc.
(“SKF”), the plaintiff in SKF USA II, challenged the petition support requirement on grounds
indistinguishable from those asserted here. SKF did not express support for the petition involved
in that case. SKF USA II, 556 F.3d at 1343.
In opposing dismissal, plaintiff attempts to distinguish its case from SKF USA II, arguing
that SKF had actively opposed the petition while Giorgio actively “supported” the petition by
responding completely to the ITC’s questionnaires and performing numerous other actions
before and during the ITC’s investigation. Pl.’s Opp’n 1-2 (citing Second Am. Compl. ¶¶ 29,
32-44). Plaintiff submits that as-applied constitutional challenges are inherently fact-based, id.
at 14, and emphasizes that “Giorgio took no actions (as distinguished from its abstract
expression of viewpoint in response to the petition support question) to oppose the petitions or
Petitioners’ trade enforcement efforts at any time in the Commission’s investigation,” id. at 1,
3-4 (citing Second Am. Compl. ¶ 54) (footnote omitted).
The court rejects plaintiff’s argument. A party in the position of SKF and Giorgio, i.e., a
party without petitioner status in an antidumping duty investigation brought under the Tariff Act
of 1930, can satisfy the petition support requirement of the CDSOA only if that party
“indicate[s]” to the Commission “support of the petition by letter or through questionnaire
Court No. 03-00286 Page 15
response.” 19 U.S.C. § 1675c(d)(1) (emphasis added). From the facts set forth in the Second
Amended Complaint, it is clear that Giorgio, like SKF, failed to do so. The fact that Giorgio, as
to three of the four countries named in the petition, did not take a position in opposition to the
petition is not a meaningful distinction in light of the holding in SKF USA II.
Nothing in the SKF USA II opinion supports the notion that the Court of Appeals upheld
the petition support requirement only partially or upheld the petition support requirement in
some form other than as set forth in the CDSOA. Although SKF undertook various actions to
“actively oppose” the petition, id. at 1358-59, whereas Giorgio opposed the petition only as to
one country, this distinction is not meaningful because the petition support requirement draws no
distinction between opposing a petition and declining to support a petition. See 19 U.S.C.
§ 1675c(b)(1)(A), (d)(1). Nor is the holding in SKF USA II based on any such distinction. As
the Court of Appeals stated, “[a]t best, the role of parties opposing (or not supporting) the
petition in responding to questionnaires is similar to the role of opposing or neutral parties in
litigation who must reluctantly respond to interrogatories or other discovery.” SKF USA II,
556 F.3d at 1359. The Court of Appeals explained that because “the purpose of the Byrd
Amendment’s limitation of eligible recipients was to reward injured parties who assisted
government enforcement of the antidumping laws by initiating or supporting antidumping
proceedings,” id. at 1352, it was “rational for Congress to conclude that those who did not
support the petition should not be rewarded,” id. at 1360 (emphasis added).
Next, plaintiff argues that in SKF USA II, the Court of Appeals “adopted a limiting
construction of the [CDSOA]” and in so doing established a new test for eligibility based on a
company’s actions during the investigation, including its litigation support actions, rather than
the particular viewpoint expressed in questionnaire responses. Pl.’s Opp’n 18, 20 (citing SKF
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USA II, 556 F.3d at 1353). Accordingly, as plaintiff submits, “the ITC failed to consider
[Giorgio’s] actions and failed to make any factual findings concerning [the] actions it took in
support or in opposition to the petition.” Id. at 21 (citation omitted). Plaintiff misinterprets the
holding of SKF USA II. The statements in the opinion alluding to a “limiting construction” that
“rewards actions (litigation support) rather than the expression of particular views,” were made
in the context of a theoretical construction of statutory language as an alternative to the Court’s
previous discussion of congressional purpose and as part of the larger analysis by which the
Court subjected the CDSOA to First Amendment standards for the regulation of commercial
speech. See SKF USA II, 556 F.3d at 1353 (“Finally, if we were to view this case as involving
the construction of statutory language rather than an exercise in ascertaining statutory purpose,
the result would be the same.”) (emphasis added).12 Contrary to plaintiff’s view, SKF USA II did
not establish a new test for ADP eligibility in order to conform the statute to the First
Amendment. Instead, the Court upheld, in the face of constitutional challenges, the test for ADP
eligibility that Congress enacted. Like the plaintiff in SKF USA II, Giorgio did not meet that test.
In support of its as-applied challenges, plaintiff also cites the recent decision of the Court
of Appeals in Chez Sidney III. Plaintiff considers Chez Sidney III to be controlling in this action
and submits that the Court of Appeals, “[b]uilding on its First Amendment analysis in SKF
[USA II] . . . ruled [] that CDSOA benefits could neither be granted nor denied to a claimant
solely based on an abstract expression of viewpoint.” Pl.’s Opp’n 23. Thus, “Chez Sidney [III]
12
The court notes, further, that “as applied” First Amendment challenges in the
commercial speech context are generally disfavored. See United States v. Edge Broadcasting
Co., 509 U.S. 418, 430-31 (1993) (“[We] judge the validity of the restriction in this case by the
relation it bears to the general problem . . . not by the extent to which it furthers the
Government’s interest in an individual case.”).
Court No. 03-00286 Page 17
[] reiterates that . . . ‘it is the surrounding circumstances, not abstract statements of support alone,
upon which an appropriate support determination depends.’” Id. (citing Chez Sidney III,
684 F.3d at 1382-83).13 Plaintiff argues, further, that “the analysis and holding of Chez Sidney
[III] cannot be ignored simply because Chez Sidney asserted a statutory claim, rather than a
constitutional claim” because “[t]here is little practical difference . . . between a claim that the
ITC interpreted the [CDSOA] incorrectly as a matter of statutory construction and a claim that
the ITC’s construction of the [CDSOA] as applied to Giorgio was unconstitutional.” Id. at 27.
Chez Sidney III is not controlling of the outcome of this case. That decision did not
overturn the decision in SKF USA II. Nor did it rule on any issue concerning the
constitutionality of the petition support requirement. As the Court of Appeals made clear, the
constitutional issues presented in Chez Sidney III were definitively resolved by SKF USA II,
Chez Sidney III, 684 F.3d at 1379 n.3, and the decision rendered therein is strictly limited to a
statutory challenge, id. at 1378-79. No such statutory challenge is found in Giorgio’s second
amended complaint. See Giorgio II, 35 CIT at __, 804 F. Supp. 2d at 1321-22. Plaintiff’s
assertion that there is “little practical difference” between a constitutional and statutory challenge
to the CDSOA thus ignores the explicit pronouncement of the Court of Appeals concerning the
13
Plaintiff also argues that in Chez Sidney III, the Court of Appeals for the Federal
Circuit (“Court of Appeals”) stated that the limiting construction “‘effectively redefine[ed]
[affected domestic producers] from ‘interested parties in support of a petition’ to ‘interested
parties in a petition.’” Pl.’s Opp’n to Defs.’ and Def.-Intervenors’ Mots. to Dismiss 23 (Mar. 1,
2013), ECF No. 200 (citing PS Chez Sidney, L.L.C. v. United States, 684 F.3d 1374, 1380 (Fed.
Cir. 2012) (“Chez Sidney III”)). However, the Court of Appeals made this statement in reference
to this Court’s decision in SKF USA Inc. v. United States, 30 CIT 1433, 1446, 451 F. Supp. 2d
1355, 1366 (2006), which was reversed by SKF USA, Inc. v. United States, 556 F.3d 1337, 1360
(Fed. Cir. 2009) (“SKF USA II”). The court, therefore, dismisses this misguided argument.
Court No. 03-00286 Page 18
scope of Chez Sidney III. Neither the holding nor the analysis of Chez Sidney III makes viable
Giorgio’s as-applied constitutional challenges to the CDSOA.
In summary, plaintiff has failed to allege facts sufficient to demonstrate that its
constitutional claims are not foreclosed by the binding precedent of SKF USA III. As to these
claims, therefore, the second amended complaint does not “contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 662(citation omitted). The court must dismiss these claims pursuant to USCIT Rule 12(b)(5).
B. The Court Lacks Subject Matter Jurisdiction over Plaintiff’s Unjust Enrichment Claims
Subject matter jurisdiction is a threshold issue, Steel Co. v. Citizens for Better
Environment, 523 U.S. 83, 94-95 (1998), and plaintiff carries the burden of demonstrating that
its assertion of subject matter jurisdiction is proper, McNutt v. General Motors Acceptance
Corp., 298 U.S. 178, 189 (1936). In ruling on a motion to dismiss for lack of subject matter
jurisdiction, the “court must accept as true all undisputed facts asserted in the plaintiff’s
complaint and draw all reasonable inferences in favor of the plaintiff.” Trusted Integration, Inc.
v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011) (citation omitted).
Plaintiff claims that the three defendant-intervenors have been “unjustly enriched at the
expense of Giorgio as a result of the unconstitutional petition support requirement.” Second Am.
Compl. ¶ 108. According to plaintiff, “Defendant-Intervenors have received . . . more than their
appropriate pro rata share of CDSOA disbursements under the mushroom antidumping orders,
including the portions of such disbursements that rightfully belong to Giorgio.” Id. ¶ 18. As a
remedy, plaintiff seeks “to disgorge and make full restitution to Giorgio of Giorgio’s lawful
share of all CDSOA disbursements [defendant-intervenors] have received . . . .” Id. ¶ 109(e).
Court No. 03-00286 Page 19
Plaintiff submits that the court possesses subject matter jurisdiction over this claim
because it “falls within the [court’s] supplemental jurisdiction . . . [as it] stems from and is
directly related to Giorgio’s claims against Defendant the United States in connection with its
administration and enforcement of the CDSOA, as to which this Court has original jurisdiction,
such that they form part of the same case or controversy.” Id. ¶ 21 (citations omitted). Plaintiff
also submits that its unjust enrichment claims “raise[] complex jurisdictional issues involving not
only the applicability of this Court of the federal supplemental jurisdiction statute . . . but also
common law doctrines of ancillary, pendant, and pendant-party jurisdiction.” Pl.’s Opp’n 32
(citing Thyssenkrupp Mexinox S.A. v. United States, 33 CIT __, __, 616 F. Supp. 2d 1376,
1381-83 (2009); Old Republic Ins. Co. v. United States, 14 CIT 377, 382, 741 F. Supp. 1570,
1575 (1990)).
The court rejects plaintiff’s argument on subject matter jurisdiction. “Some statutory
grant of authority is required” for this Court to entertain a direct claim by one private party
against another, and this Court lacks statutory supplemental jurisdiction under 28 U.S.C.
§ 1367(a), which is limited to the district courts. Sioux Honey Assoc. v. Hartford Fire Insurance
Co., 672 F.3d 1041, 1051-56 (Fed. Cir. 2012), cert. denied 133 S.Ct. 126 (2012). Therefore, the
court may not exercise jurisdiction over plaintiff’s claims against the defendant-intervenors, and
those claims must be dismissed according to USCIT Rule 12(b)(1).
III. CONCLUSION
For the foregoing reasons, all of the claims in plaintiff’s second amended complaint must
be dismissed. Plaintiff’s as-applied constitutional claims brought under the First Amendment
and Fifth Amendment equal protection guarantee are precluded by binding precedent and must
be dismissed for failure to state a claim upon which relief can be granted under USCIT
Court No. 03-00286 Page 20
Rule 12(b)(5). The court lacks subject matter jurisdiction over plaintiff’s unjust enrichment
claims, which therefore must be dismissed pursuant to USCIT Rule 12(b)(1). Plaintiff twice has
amended its complaint, and the court sees no justification for allowing plaintiff to seek leave for
further amendment. Therefore, the court shall enter judgment dismissing this action.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge
Dated: March 6, 2013
New York, New York