United Synthetics, Inc. v. United States , 844 F. Supp. 2d 1310 ( 2012 )

Slip Op. 12-52
UNITED STATES COURT OF INTERNATIONAL TRADE
UNITED SYNTHETICS, INCORPORATED,
Plaintiff,
Before: Gregory W. Carman, Judge
v.
Timothy C. Stanceu, Judge
Leo M. Gordon, Judge
UNITED STATES OF AMERICA, UNITED
STATES CUSTOMS AND BORDER
Court No. 08-00139
PROTECTION, DAVID V. AGUILAR
(ACTING COMMISSIONER, UNITED
STATES CUSTOMS AND BORDER
PROTECTION), UNITED STATES
INTERNATIONAL TRADE COMMISSION,
AND DEANNA T. OKUN (CHAIRMAN,
UNITED STATES INTERNATIONAL
TRADE COMMISSION),
Defendants.
OPINION
[Dismissing all claims for failure to state a claim upon which relief can be granted;
dismissing the action.]
Dated: April 20, 2012
Gregory S. Menegaz and J. Kevin Horgan, deKieffer & Horgan, of Washington, DC for
Plaintiff United Synthetics, Incorporated.
Jessica R. Toplin, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for Defendants United States, U.S. Customs and
Border Protection, and David V. Aguilar, Acting Commissioner of U.S. Customs and Border
Protection. With her on the briefs were Tony West, Assistant Attorney General, Jeanne E.
Davidson, Director, Franklin E. White, Jr., Assistant Director, and David S. Silverbrand and
Courtney S. McNamara, Trial Attorneys. Of counsel on the briefs were Andrew G. Jones and
Joseph Barbato, Office of Assistant Chief Counsel, U.S. Customs and Border Protection, of
Washington, DC.
Court No. 08-00139 Page 2
Patrick V. Gallagher, Jr., Attorney Advisor, Office of General Counsel, U.S.
International Trade Commission, of Washington, DC for Defendants U.S. International
Trade Commission and Deanna T. Okun, Chairman, U.S. International Trade
Commission. With him on the briefs were James M. Lyons, General Counsel and Neal
J. Reynolds, Assistant General Counsel.
Gordon, Judge: This case arose from the actions of two agencies, the U.S.
International Trade Commission (the “ITC” or the “Commission”) and U.S. Customs and
Border Protection (“Customs” or “CBP”), that denied Plaintiff United Synthetics,
Incorporated (“USI”) certain monetary benefits under the Continued Dumping and
Subsidy Offset Act of 2000 (“CDSOA” or “Byrd Amendment”), 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(2000), repealed by Deficit Reduction Act of 2005, Pub.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). The ITC did not include Plaintiff on its list
of parties potentially eligible for “affected domestic producer” (“ADP”) status, which
would have qualified USI for distributions of antidumping duties collected under
antidumping orders on imports of certain polyester staple fiber (“PSF”) from Korea and
Taiwan. Certain Polyester Staple Fiber from Korea and Taiwan, Inv. No. 731-TA-825-
826 (Final), USITC Pub. 3300 (May 2000) (“Final Injury Determination”); Notice of
Amended Final Determination of Sales at Less Than Fair Value: Certain Polyester
Staple Fiber From the Republic of Korea and Antidumping Duty Orders: Certain
Polyester Staple Fiber From the Republic of Korea and Taiwan, 65 Fed. Reg. 33,807(Dep’t of Commerce May 25, 2000) (“Final LTFV Determination and Antidumping Duty
Orders”). Because Plaintiff was not on the ITC’s list of potential ADPs, Customs made
no CDSOA distributions to USI.
Court No. 08-00139 Page 3
Plaintiff claims that Defendants’ actions are inconsistent with the CDSOA, not
supported by substantial evidence, and otherwise not in accordance with law. Plaintiff
also brings facial and as-applied constitutional challenges to the CDSOA under the First
Amendment and under the equal protection and due process guarantees of the Fifth
Amendment.
Before the court are motions under USCIT Rule 12(b)(5) to dismiss for failure to
state a claim upon which relief can be granted filed by the ITC (Def. U.S. Int’l Trade
Comm’n’s Mem. in Supp. of Its Mot. to Dismiss for Failure to State a Claim, ECF No. 44
(“ITC’s Mot.”)) and Customs (Defs. the United States and U.S. Customs and Border
Protection’s Mem. in Support of Their Mot. to Dismiss for Failure to State a Claim upon
Which Relief Can Be Granted, ECF No. 47 (“Customs’ Mot.”)). The court has
jurisdiction pursuant to 28 U.S.C. § 1581(i) (2006). See Furniture Brands Int’l, Inc. v.
United States, 35 CIT __, __, 807 F. Supp. 2d 1301, 1307-10 (2011). For the reasons
set forth below, we conclude that Plaintiff has failed to state a claim upon which relief
can be granted. The court will grant Defendants’ USCIT Rule 12(b)(5) motions and
dismiss this action.
I. Background
Following a 1999 petition filed by a group of domestic manufacturers, the U.S.
Department of Commerce (“Commerce”) initiated an antidumping investigation of PSF
from Korea and Taiwan. Initiation of Antidumping Duty Investigations: Certain Polyester
Staple Fiber From the Republic of Korea and Taiwan, 64 Fed. Reg. 23,053 (Dep’t of
Commerce Apr. 29, 1999); Am. Compl. ¶ 22, ECF No. 17. Contemporaneously, the ITC
Court No. 08-00139 Page 4
conducted an injury investigation. Certain Polyester Staple Fibers from Korea and
Taiwan, 64 Fed. Reg. 17,414 (ITC Apr. 9, 1999); Am. Compl. ¶ 22.
Following an affirmative injury determination by the ITC in May 2000, Commerce,
on May 25, 2000, published its amended final determinations of sales at less than fair
value and issued the antidumping duty orders covering the subject merchandise. Final
LTFV Determination and Antidumping Duty Orders, 65 Fed. Reg. 33,807; Am. Compl.
¶ 26. The antidumping duty orders remain in effect. Am. Compl. ¶ 26. Plaintiff alleges
that “USI did not exist at the time that the petition was filed or during the original
investigation,” and that “USI was incorporated September 1, 1999 and began operations
as a U.S. manufacturer of subject polyester staple fiber May 30, 2000,” five days after
publication of the antidumping duty orders. Id. ¶ 23.
Plaintiff commenced this action on April 18, 2008, contesting the denial of
CDSOA distributions to Plaintiff for Fiscal Years 2006 and 2007. Compl., ECF No. 4.
Shortly thereafter, the court stayed this action pending a final resolution of other
litigation raising the same or similar issues. Order, May 28, 2008, ECF No. 12 (action
stayed “until final resolution of Pat Huval Restaurant & Oyster Bar, Inc. v. United States,
Consol. Ct. No. 06-0290, that is, when all appeals have been exhausted.”).
Following the decision of the U.S. Court of Appeals for the Federal Circuit (“Court
of Appeals”) in SKF USA Inc. v. United States, 556 F.3d 1337 (2009), cert. denied, 130
S. Ct. 3273 (2010) (“SKF II”), which addressed questions also present in this action, the
court issued an order directing Plaintiff to show cause why this action should not be
dismissed. Order to Show Cause, Jan. 3, 2011, ECF No. 16. On February 1, 2011,
Court No. 08-00139 Page 5
Plaintiff filed its Amended Complaint.1 Am. Compl. After receiving Plaintiff’s response
to the Order to Show Cause, the court lifted the stay on this action for all purposes.
Order Lifting Stay, Feb. 9, 2011, ECF No. 20. Defendants filed motions to dismiss for
failure to state a claim upon which relief can be granted on May 2, 2011 (ITC’s Mot.)
and May 6, 2011 (Customs’ Mot.).
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 plaintiff’s favor. Cedars-Sinai Med. Ctr. v.
Watkins, 11 F.3d 1573, 1584 & n.13 (Fed. Cir. 1993).
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)
(internal citation and footnote omitted). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim of relief that is
1
The filing of the amendment as a matter of course was untimely under Rule 15(a).
USCIT R. 15(a) (A[A] party may amend its pleading once as a matter of course within:
(A) 21 days after serving it, or (B) if the pleading is one to which a responsive pleading
is required, 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is
earlier.@). The amendments would not have been untimely under Rule 15(a) as in effect
prior to January 1, 2011, which rule allowed a party to amend its pleading once as a
matter of course before being served with a responsive pleading. Because the other
parties to this action have addressed in their Rule 12(b)(5) motions the complaint in
amended form, the court exercises its discretion under USCIT Rule 89 to accept
Plaintiffs= First Amended Complaint. USCIT R. 89 (AThese rules and any amendments
take effect at the time specified by the court. They govern . . . proceedings after that
date in a case then pending unless: (A) the court specifies otherwise . . . .@).
Court No. 08-00139 Page 6
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).2 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 sixty 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). The CDSOA further directed that:
[i]n those cases in which a determination of injury was not
required or the Commission’s records do not permit an
identification of those in support of a petition, the
Commission shall consult with the administering authority
[Commerce] to determine the identity of the petitioner and
those domestic parties who have entered appearances
2
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 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. 08-00139 Page 7
during administrative reviews conducted by the
administering authority under section 1675 of this title.
19 U.S.C. § 1675c(d)(1)  (“consultation provision”). 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).
The ITC compiled lists of potential ADPs with respect to the antidumping duty
orders on PSF and provided those lists to Customs. Am. Compl. ¶ 33. Customs
published the lists of potential ADPs for Fiscal Year 2006 on June 1, 2006, id., and for
Fiscal Year 2007 on May 29, 2007, id. ¶ 34. Plaintiff did not appear on either list.
Id. ¶¶ 33-34. Nevertheless, Plaintiff certified to Customs its eligibility for both fiscal
years. Id. ¶ 35. Customs responded by indicating that USI was allocated CDSOA
funds for Fiscal Year 2007 on the subject antidumping duty orders but that the
disbursement of those funds was being withheld pending the disposition of pending
litigation over the Byrd Amendment. Id. ¶¶ 18, 37. Plaintiff also sought certification
from the Commission based on the decisions in PS Chez Sidney v. International Trade
Commission, 30 CIT 858, 442 F. Supp. 2d 1329 (2006) and SKF USA Inc. v. United
States, 30 CIT 1433, 451 F. Supp. 2d 1355  (2006) (“SKF I”).3 Am. Compl. ¶¶ 19, 36.
Stating that Plaintiff “did not qualify as an ADP because it did not support the original
petitions,” the ITC denied USI’s request for certification. Id. ¶ 38.
3
PS Chez Sidney held the petition support requirement unconstitutional on First
Amendment freedom of expression grounds, and SKF I held the petition support
requirement unconstitutional on Fifth Amendment equal protection grounds.
Court No. 08-00139 Page 8
Plaintiff challenges the validity and constitutionality of the Commission’s and
CBP’s application of the CDSOA to USI. In Count 1 of its Amended Complaint, Plaintiff
claims that the ITC’s determination not to include USI on the list of potential ADPs was
inconsistent with the CDSOA, not supported by substantial evidence, and otherwise not
in accordance with the law. Am. Compl. ¶ 41. In Counts 2 and 3, Plaintiff challenges
on First Amendment grounds the CDSOA’s petition support requirement, both facially
and as applied to USI. Id. ¶¶ 43-44, 46-48. In Counts 4 and 5, Plaintiff challenges the
petition support requirement, both facially and as applied to USI, on Fifth Amendment
equal protection grounds. Id. ¶¶ 50-51, 53-54. In Count 6, Plaintiff challenges the
petition support requirement as impermissibly retroactive in violation of the Fifth
Amendment Due Process Clause because Defendants based eligibility for ADP status,
and thus eligibility for disbursements, on past conduct. Id. ¶ 56.
A. Plaintiff’s Statutory Challenges to the Actions
of the Two Agencies Must Be Dismissed
In Count 1 of the Amended Complaint, Plaintiff challenges on statutory grounds
the actions of the ITC and Customs denying it CDSOA distributions for Fiscal Years
2006 and 2007. Plaintiff challenges as unlawful under the CDSOA the ITC’s
determination not to place USI on the list of potential ADPs and the failure of Customs
to provide USI distributions. Am. Compl. ¶ 41. Plaintiff claims that these agency
actions “were inconsistent with the CDSOA, not supported by substantial evidence, and
were otherwise not in accordance with law.” Id.
Plaintiff states that the ITC “has never included USI in its list of eligible ADPs.”
Id. ¶ 28. However, we do not find within the complaint alleged facts that would have
Court No. 08-00139 Page 9
qualified Plaintiff for inclusion on the ITC’s list. According to the CDSOA, a domestic
producer may qualify as an ADP only if it “was a petitioner or interested party in support
of the petition with respect to which an antidumping duty order . . . has been entered.”
19 U.S.C. § 1675c(b)(1). The ITC is directed to prepare “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.” 19 U.S.C.
§ 1675c(d)(1). The Amended Complaint states that Plaintiff was not a petitioner with
respect to the petition resulting in the antidumping duty orders on PSF from Korea and
Taiwan, Am. Compl. ¶ 23, and fails to allege facts according to which we could
conclude that USI obtained ADP status as a party who was in support of that petition.
The Amended Complaint alleges that “USI completed the Commission’s initial
U.S. producer questionnaire and multiple supplemental questionnaires” in the five-year
review (“Sunset Review”) of the antidumping duty orders that the Commission instituted
on March 31, 2005. Am. Compl. ¶ 32. The Amended Complaint further alleges that
“USI was certified as an ADP under the 2007 antidumping duty order covering PSF from
China and has received CDSOA disbursements from that order hence.” Id. ¶ 39. With
respect to the orders on PSF from Korea and Taiwan, Plaintiff argues that, in denying it
ADP status, “the Commission failed to consider USI’s participation in a Sunset Review
under 19 U.S.C. § 1675(c) (2005) as a basis for determining [USI’s] support for the
petition.” USI’s Mem. in Opp’n to Mot. of U.S. Int’l Trade Comm’n to Dismiss for Failure
to State a Claim at 6, ECF No. 50 (“Pl.’s Opp’n to ITC’s Mot.”). According to USI, “[t]he
Commission’s interpretation of the CDSOA in this regard is plainly at odds with the
language of the statute and its underlying purpose.” Id. at 7. Plaintiff argues that the
Court No. 08-00139 Page 10
consultation provision requires the Commission, in certain circumstances, to consult
with Commerce on the identity of parties in support of the petition. Id. (citing 19 U.S.C.
§ 1675c(d)(1)). According to USI, the reference in the consultation provision to
administrative reviews signifies congressional intent that the Commission must consider
evidence of support for the petition found in the record of those reviews, including
sunset reviews. In effect, Plaintiff posits that a domestic producer such as USI, who
was not presented with a questionnaire during the ITC’s injury investigation, still may
satisfy the CDSOA’s definition of “affected domestic producer” by entering an
appearance in a sunset review and expressing support for the continued existence of
the order. Thus, Plaintiff would have us construe the CDSOA to mean that an
interested party’s expression of support for an existing antidumping duty order, at least
in the circumstance presented by this case, is the equivalent of expressing support for
the petition.
We are unable to accept Plaintiff’s proffered construction. In drafting the
CDSOA, Congress was explicit in requiring support for the petition rather than support
for a resulting order. Under the antidumping statute, a petition is filed on behalf of a
U.S. industry seeking initiation of an investigation to determine whether an antidumping
duty should be imposed on imports of a class or kind of merchandise that is alleged to
be, or be likely to be, sold at less than fair value. 19 U.S.C. §§ 1673, 1673a(b). A
petition that ultimately is successful results typically in the issuance of an antidumping
duty order.4 19 U.S.C. § 1673d(c)(2). A periodic administrative review or sunset review
4
In certain cases, a petition may result in other forms of relief from unfairly traded
imports. See 19 U.S.C. § 1673c (providing for suspension agreements).
Court No. 08-00139 Page 11
conducted under section 1675 may be described generally as a proceeding conducted
upon an antidumping duty order rather than a proceeding conducted upon the original
petition. See 19 U.S.C. § 1675(a), (c). Thus, a construction of the CDSOA that equates
support for an order, as expressed during a review, with support for a petition, as
expressed during the investigation conducted upon that petition, is at odds with the plain
meaning of section 1675c(b)(1) when read in the larger context of the antidumping
statute. Moreover, Plaintiff’s construction of the term “interested party in support of the
petition,” as used in section 1675c(b)(1), would have the effect of broadening
considerably the class of domestic producers eligible for CDSOA distributions beyond
the plain meaning of that term. Had Congress intended to provide CDSOA distributions
to parties who supported the continued existence of antidumping duty orders in sunset
reviews, or to parties who otherwise participated as domestic producers in
administrative reviews in ways that supported positions favorable to the domestic
industry, it would not have conditioned ADP status on an expression of support for the
petition.
Plaintiff argues that support for its construction of the statute is found in the
legislative findings of the CDSOA. Plaintiff points to the specific findings that
demonstrate that “creating jobs and promoting investment in affected domestic
industries are among the primary purposes of the antidumping law and in particular the
CDSOA.” Pl.’s Opp’n to ITC’s Mot. at 8 (citing Pub. L. 106-387, § 1(a) [Title X, § 1002],
Oct. 28, 2000, 114 Stat. 1549, 1549A–72). Plaintiff maintains that
[t]he fact that the record of the Commission’s original
investigation may not contain evidence of USI's support for
the petition against Korea and Taiwan should not preclude a
Court No. 08-00139 Page 12
finding that USI is an ADP with respect to the AD
[antidumping] order on PSF from Korea and Taiwan,
particularly where the statutory language explicitly provides
that post-order review proceedings are relevant to the
determination of ADPs who are eligible for CDSOA
distributions.
Id. at 8-9. The legislative findings cited by Plaintiff, however, speak only in general
terms. We do not discern in these findings a specific intent to provide distributions to
domestic interested parties who were not petitioners and who did not express support
for a petition during an investigation.
Plaintiff maintains, further, that the Commission’s interpretation of the CDSOA
would render the consultation provision meaningless and thereby violate the canon of
construction requiring that effect be given to all provisions in the statute. Pl.’s Opp’n to
ITC’s Mot at 7. We disagree. The consultation provision appears in the statute
immediately following a sentence directing that “the Commission shall forward to the
Commissioner [of Customs] . . . within 60 days after the date an antidumping or
countervailing duty order or finding is issued, 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.” 19 U.S.C. § 1675c(d)(1). Under
Plaintiff’s construction, the two sentences, when read together and applied to the facts
of this case, compelled a finding that the Commission’s records, which may have
permitted an identification of some of those domestic interested parties who actually
were in support of the petition that sought the imposition of antidumping duties on
imports of PSF from Korea and Taiwan, were insufficient to determine all such
supporters. Acceptance of Plaintiff’s argument would result in our holding that the ITC
Court No. 08-00139 Page 13
was required to consult with Commerce to identify domestic producers, such as USI,
who entered appearances in administrative reviews associated with that petition.
Positing that “USI might have participated in the original investigation by responding to a
questionnaire from the Commission if USI had received one,” Plaintiff argues that “the
fact that USI was not asked to respond to a Commission questionnaire should not be
used as the basis for denying it eligibility for CDSOA distributions.” Pl.’s Opp’n to ITC’s
Mot. at 9.
The flaw in Plaintiff’s argument is that the ITC’s construction of the CDSOA did
not render meaningless or superfluous the consultation provision. To the contrary, the
provision could have application in situations other than the one presented by this case.
For example, a party who expressed support for a petition during the ITC’s injury
investigation might not be identifiable from the Commission’s records if it subsequently
underwent a change in name. The fact of the name change might well be known to
Commerce as a result of section 1675 reviews in which the party entered one or more
appearances.
In summary, the Amended Complaint fails to allege facts from which we could
conclude that the ITC erred in omitting USI from any list prepared under 19 U.S.C.
§ 1675c(d)(1). For this reason, we also must dismiss the statutory claims Plaintiff brings
against Customs. We do not find within the Amended Complaint facts by which we
could conclude that Customs lawfully could have made distributions to Plaintiff. See
19 U.S.C. § 1675c(d)(2) (requiring Customs to base its “list of affected domestic
producers potentially eligible for the distribution based on the list obtained from the
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Commission under paragraph (1)”). We conclude, therefore, that the claims in Count 1
must be dismissed for failure to state a claim upon which relief can be granted.5
B. Plaintiff’s Constitutional Challenges Must be Dismissed
In Counts 2, 3, 4, and 5, Plaintiff brings facial and as-applied challenges to the
petition support requirement of the CDSOA under the First Amendment and the Fifth
Amendment equal protection guarantee. Am. Compl. ¶¶ 42-54. In Count 6, Plaintiff
challenges the petition support requirement as impermissibly retroactive under the Fifth
Amendment due process guarantee. Id. ¶ 56. We conclude that the First Amendment
and equal protection claims must be dismissed as foreclosed by binding precedent.
The retroactivity claim must be dismissed for failure to state a claim on which relief can
be granted.
1. Plaintiff’s First Amendment and Equal Protection Facial Challenges
to the Petition Support Requirement Are Foreclosed by Binding Precedent
In Count 3, Plaintiff claims that the petition support requirement of the CDSOA
violates the First Amendment on its face because it compels speech. Id. ¶ 48. Plaintiff
further claims that the CDSOA engages in impermissible viewpoint discrimination by
conditioning receipt of a government benefit on a private speaker’s expressing a
specific viewpoint, i.e., expression of support for an antidumping duty petition, and,
therefore, is an unconstitutional restriction on speech. Id. ¶ 47.
In Count 5, Plaintiff claims that the petition support requirement facially violates
the equal protection guarantee of the Fifth Amendment. Id. ¶ 53. Plaintiff contends that
5
Because Plaintiff’s statutory claim is dismissed for failure to state a claim on which
relief can be granted, the court will deny as moot Plaintiff’s motion to complete the
administrative record (ECF No. 40).
Court No. 08-00139 Page 15
the CDSOA creates a classification infringing on USI’s fundamental right to free speech
that is a denial of equal protection because it is not narrowly tailored to a compelling
government objective. Id. Plaintiff further claims that the CDSOA impermissibly
discriminates between USI and other domestic producers who expressed support for
the petition. Id. ¶ 54. Lastly, in Count 5, in what apparently is a restatement of the
claims in Count 1, Plaintiff asserts that “[i]f not facially invalid, then Defendants’
application of the law to distinguish USI as not supporting the enforcement of the
antidumping laws is not supported by substantial evidence.” Id.
The Court of Appeals rejected analogous claims challenging the petition support
requirement in SKF II, in which it upheld the petition support requirement under the First
Amendment and under the Fifth Amendment’s equal protection guarantee. SKF II, 556
F.3d at 1360 (the “Byrd Amendment is within the constitutional power of Congress to
enact, furthers the government’s substantial interest in enforcing trade laws, and is not
overly broad.”); id. at 1360 n.38 (“For the same reason, the Byrd Amendment does not
fail the equal protection review applicable to statutes that disadvantage protected
speech.”); id. at 1360 (“Because it serves a substantial government interest, the Byrd
Amendment is also clearly not violative of equal protection under the rational basis
standard.”). Plaintiff’s facial constitutional challenges to the CDSOA are
indistinguishable from those claims rejected by the Court of Appeals in SKF II and,
therefore, are foreclosed by the holding in SKF II. Accordingly, those challenges must
be dismissed for failure to state a claim on which relief can be granted.
Plaintiff argues that SKF II is no longer good law because the decision of the
Court of Appeals in SKF II to uphold the petition support requirement using an
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intermediate level of scrutiny, the “Central Hudson” test, was implicitly overturned by the
U.S. Supreme Court in Snyder v. Phelps, 131 S. Ct. 1207 (2011). Pl.’s Opp’n to ITC’s
Mot. at 14-15 (citing Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y.,
447 U.S. 557, 564 (1980)). Plaintiff construes Snyder to hold that all speech on matters
of public concern is “entitled to maximum First Amendment protection” and views
responses to the ITC’s questionnaires as speech on a matter of public concern. Id.Snyder, however, does not support a conclusion that SKF II incorrectly applied only an
intermediate level of First Amendment scrutiny. Snyder set aside as contrary to the
First Amendment a jury verdict imposing substantial state law tort liability on persons
who picketed at a military funeral. Snyder, 131 S. Ct. at 1220. The case does not hold
that all speech addressing matters of public concern, such as a position taken in
antidumping duty litigation, must receive a level of judicial scrutiny higher than that
applied in SKF II. See Standard Furniture Mfg. Co. v. United States, 36 CIT ___, ___,
Slip. Op. 12-21, at 16-17 (2012) (finding that Snyder did not compel a First Amendment
analysis differing from that which was applied in SKF II).
2. Plaintiff’s First Amendment As-Applied
Challenge Must be Dismissed
Plaintiff also asserts, in Count 2, an as-applied constitutional challenge under the
First Amendment, claiming specifically that the CDSOA unconstitutionally restricts
speech by discriminating against those, such as USI, who did not express a specific
viewpoint, i.e., support for the antidumping petition. Am. Compl. ¶¶ 43-44. Plaintiff
views the holding in SKF II that the petition support requirement did not violate the First
Amendment as confined to situations in which parties actively opposed the petition and
Court No. 08-00139 Page 17
as signifying that the ITC may consider only a party=s actions, and not a party=s
expressed viewpoints, in determining whether a party supported the petition. Pl.’s
Opp=n to ITC’s Mot. at 10, 13-14. USI maintains that  it satisfied the participation
requirement of SKF II through its actions, i.e., its completion of the ITC’s initial domestic
producer questionnaire and multiple supplemental questionnaires in the Sunset
Reviews. Id. at 11. Plaintiff argues that the ITC=s application of the CDSOA, therefore,
violated the First Amendment to the extent the ITC based its disqualification of USI as a
potential ADP on USI’s failure to indicate support of the petition by questionnaire
response. Id.
Plaintiff=s argument misinterprets SKF II, which does not hold that the CDSOA
would violate the First Amendment if applied to deny CDSOA benefits based solely on a
party’s failing to indicate support for the petition by letter or questionnaire response.
SKF II holds the opposite. The Court of Appeals determined that the appropriate First
Amendment legal standard was the standard applying to regulation of commercial
speech. It then concluded that the CDSOA, which requires a non-petitioner such as
SKF USA, Inc. to express support for the petition in order to acquire ADP status, met
that standard. SKF II, 556 F.3d at 1359-60. The Court of Appeals did state, as Plaintiff
highlights, that A[t]he language of the Byrd Amendment is easily susceptible to a
construction that rewards actions (litigation support) rather than the expression of
particular views@ and that Aa limiting construction of the statute is necessary to cabin its
scope so that it does not reward a mere abstract expression of support.@ Id. at 1353;
Pl.’s Opp=n to ITC’s Mot. at 10. However, those statements were in the context of a
discussion of statutory language as an alternative to a previous discussion in the
Court No. 08-00139 Page 18
opinion addressing the question of congressional purpose. They were part of the
analysis by which the Court of Appeals subjected the CDSOA to First Amendment
standards for the regulation of commercial speech. They do not signify a holding that
the First Amendment prohibits a government agency implementing the CDSOA from
conditioning ADP status on the expression of support for a petition. See Furniture
Brands, 35 CIT at __, 807 F. Supp. 2d at 1311-12 (rejecting the argument that SKF II
adopted a limiting construction of the CDSOA that modified the petition support
requirement).
Plaintiff also argues that, on these facts, Defendants applied the petition support
requirement in a way that was overbroad, thereby violating the First Amendment
according to the test applied by the Court of Appeals in SKF II, the Central Hudson test.
Pl.’s Opp=n to ITC’s Mot. at 12-13 (citing SKF, 556 F.3d at 1357). Positing SKF II to
hold that Adomestic producers who are not petitioners but nevertheless respond to
Commission questionnaires have done enough to be regarded as supporting the
petition,@ Plaintiff argues that denying it CDSOA distributions served no governmental
interest. Id. at 13. This argument is misguided. The Court of Appeals concluded in
SKF II that the CDSOA’s providing benefits only to those who supported the petition,
and not to those who opposed or took no position on the petition, served a substantial
governmental interest, directly advanced that interest, and was not more extensive than
necessary in advancing that interest. SKF II, 556 F.3d at 1355-59.
For the aforementioned reasons, we conclude that Plaintiff’s First Amendment as-
applied challenge is foreclosed by the holding in SKF II. The claims stated in Count 2 of
the complaint, therefore, must be dismissed.
Court No. 08-00139 Page 19
3. Plaintiff’s Fifth Amendment
Equal Protection As-Applied Challenge Must Be Dismissed
In Count 4, Plaintiff claims that the CDSOA impermissibly discriminates between
Plaintiff and other domestic producers who expressed support for the underlying
antidumping duty petition in that the petition support requirement, as applied to USI,
was not narrowly tailored to a compelling government objective, and thereby
contravened the equal protection guarantee of the Fifth Amendment. Am. Compl. ¶ 51;
see also Pl.’s Opp’n to ITC’s Mot. at 16.
Plaintiff has alleged no facts that distinguish its equal protection claim from the
equal protection claim addressed and rejected in SKF II. The Court of Appeals held that
the petition support requirement of the CDSOA does not violate the equal protection
guarantee, holding that the petition support requirement is rationally related to the
government’s legitimate purpose of rewarding parties who promote the government’s
policy against dumping. SKF II, 556 F.3d at 1360. SKF II reasoned that it was “rational
for Congress to conclude that those who did not support the petition should not be
rewarded.” Id. at 1359. For these reasons, relief cannot be granted on Plaintiff’s as-
applied equal protection claims, which must be dismissed.
4. Plaintiff’s Retroactivity Claims Must Be Dismissed
Plaintiff claims in Count 6 that the petition support requirement is impermissibly
retroactive in violation of the Fifth Amendment due process guarantee because
Defendants based eligibility for ADP status, and thus eligibility for disbursements, on
past conduct. Am. Compl. ¶ 56. The Amended Complaint states that “[t]he Due
Process clause disfavors retroactive legislation, i.e., imposition of a requirement that
Court No. 08-00139 Page 20
USI could not have met because it was not yet operating during the original
investigation, and Defendants’ disbursements only to those companies that express
support for a petition are not rationally related to a legitimate governmental purpose.”
Id.6
The petition support requirement was applied retroactively to USI, the
antidumping duty orders on PSF from Korea and Taiwan having been published on
May 25, 2000. Final LTFV Determination and Antidumping Duty Orders, 65 Fed. Reg.
33,807. Publication of the orders thus occurred prior to October 28, 2000, the effective
date of the CDSOA. 19 U.S.C. § 1675c. Only by having expressed support for the
petition that resulted in a pre-enactment antidumping duty order may a domestic
producer qualify as an ADP to receive distributions of duties assessed under such an
order. Id. § 1675c(d)(1).
In New Hampshire Ball Bearing, Inc. v. United States, 36 CIT ___, 815 F. Supp.
2d 1301 (2012), we rejected a claim challenging on due process grounds the retroactive
reach Congress attached to the petition support requirement. The plaintiff in New
Hampshire Ball Bearing had made a decision, long before enactment of the CDSOA,
not to express to the ITC support for an antidumping duty petition. 36 CIT at ___, 815
F. Supp. 2d at 1307. Due to the retroactive reach Congress applied to the petition
support requirement, the plaintiff in that case could not have known the adverse
consequence that Congress, nearly twelve years later, would attach to its decision.
6
The court notes that Plaintiff states that it “does not oppose dismissal of Count 6 of its
complaint which relates to a possible violation of the Due Process Clause of the
Constitution based on the retroactive nature of the CDSOA.” Pl.’s Opp’n to ITC’s Mot.
at 16.
Court No. 08-00139 Page 21
Although we recognized that the CDSOA, in its retroactive petition support provision,
“adjusts ‘rights and burdens’ of ‘economic life’ and ‘upsets otherwise settled
expectations,’” 36 CIT at ___, 815 F. Supp. 2d at 1308 (quoting Usery v. Turner
Elkhorn Mining Co., 428 U.S. 1, 15-16 (1976)), we nevertheless concluded that
Congress did not act arbitrarily and irrationally in attaching a retroactive reach to the
petition support requirement. 36 CIT at ___, 815 F. Supp. 2d at 1309. We concluded
instead that the “‘retroactive application of the legislation is itself justified by a rational
legislative purpose’” and, therefore, permissible on due process grounds. 36 CIT at
___, 815 F. Supp. 2d at 1309 (quoting Pension Benefit Guaranty Corp. v. R.A. Gray
Co., 467 U.S. 717, 729 (1984)). We reasoned that “[i]t 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. 36 CIT at ___,
815 F. Supp. 2d at 1309 (quoting Pension Benefit, 467 U.S. at 730-31). By applying the
petition support requirement retroactively, Congress expanded the group of rewarded
domestic producers to include those who expressed support for petitions in antidumping
duty investigations completed prior to enactment of the CDSOA. In this way, Congress
furthered the purpose of remedying unfairly traded imports. 36 CIT at ___, 815 F. Supp.
2d at 1309.
USI grounds its due process retroactivity claim in alleged facts differing from
those in New Hampshire Ball Bearing. Unlike the plaintiff in that case, USI asserts that
it had no opportunity to express support for the petition seeking the imposition of
antidumping duties on imports of PSF from Korea and Taiwan, having begun operations
Court No. 08-00139 Page 22
as a U.S. manufacturer of the subject PSF on May 30, 2000, five days after the
publication of the antidumping duty orders, and having received no ITC questionnaires
during the injury investigation. Am. Compl. ¶¶ 23, 56. Presuming this allegation to be
true, we nevertheless conclude that USI’s retroactivity claim lacks merit.
Congress chose in the CDSOA to make disbursements potentially available to
domestic producers who expressed support for petitions that, as of the effective date of
the statute, already had ripened into antidumping duty orders. 19 U.S.C. § 1675c(d)(1)
(requiring the ITC to forward its list to Customs “within 60 days after the effective date of
this section in the case of orders . . . in effect on January 1, 1999, or thereafter . . .”). As
discussed above, and as we concluded in New Hampshire Ball Bearing, Congress did
so to fulfill a rational legislative purpose. New Hampshire Ball Bearing, 36 CIT at ___,
815 F. Supp. 2d at 1308. That purpose does not depend on the reason why a given
domestic producer did not express support for a petition: under the CDSOA’s benefit
scheme (as applied either retroactively or prospectively), it makes no difference whether
a producer chose not to express its support to the ITC or, having yet to acquire
interested party status, had no opportunity to respond. As we recognized in New
Hampshire Ball Bearing, it is understandable that domestic producers who had the
opportunity to support a petition but declined to do so prior to enactment, such as the
plaintiff in New Hampshire Ball Bearing, would object to the retroactive reach of the
support provision. 36 CIT at ___, 815 F. Supp. 2d at 1309. Those producers lacked
notice of the consequence Congress later would attach to their choice. Domestic
producers who had no opportunity to express support for a petition resulting in a pre-
enactment antidumping duty order are similarly disadvantaged and justifiably could
Court No. 08-00139 Page 23
object to their lack of an opportunity to obtain distributions of duties assessed under that
order. In enacting the CDSOA, Congress could have avoided the retroactivity problem
for both classes of disadvantaged producers by allowing them to qualify as ADPs by
some other means, such as, for example, by recognizing post-enactment expressions of
support for an antidumping duty order that existed at the time of enactment. Of course,
doing so would have enlarged the group of domestic producers who could benefit from
the CDSOA reimbursement scheme. Alternatively, Congress could have avoided the
retroactivity problem by making the CDSOA entirely prospective, thus narrowing the
group of beneficiaries.
In short, Congress could have chosen to dispense with any retroactive
application of the petition support requirement, and it could have done so either by
broadening or by narrowing the class of domestic producers that it chose to benefit in
the CDSOA. That Congress chose not to do so does not, in our view, make the
CDSOA vulnerable to constitutional attack on due process grounds. As the Supreme
Court stated in Turner Elkhorn: “[i]t is by now well established that legislative acts
adjusting the burdens and benefits of economic life come to the Court with a
presumption of constitutionality, and that the burden is on one complaining of a due
process violation to establish that the legislature has acted in an arbitrary and irrational
way.” 428 U.S. at 15. In furthering a purpose of rewarding domestic producers who
expressed support for petitions, including those who expressed support for petitions
associated with pre-enactment orders, Congress acted neither arbitrarily nor irrationally.
And as the Supreme Court instructed in Pension Benefit: “[p]rovided that the retroactive
application of a statute is supported by a legitimate legislative purpose furthered by
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rational means, judgments about the wisdom of such legislation remain within the
exclusive province of the legislative and executive branches.” 467 U.S. at 729. We
conclude, therefore, that Count 6 must be dismissed for failure to state a claim on which
relief can be granted.
IV. Conclusion
Count 1 must be dismissed because Plaintiff fails to state facts sufficient to
qualify Plaintiff for distributions under the CDSOA. Plaintiff’s First Amendment and
equal protection claims are foreclosed by binding precedent, and Plaintiff’s retroactivity
claims must be dismissed for failure to state a claim on which relief can be granted. USI
already has availed itself of the opportunity to amend its complaint and has not
indicated that it desires to seek leave to amend its complaint further. Therefore, we
conclude that it is appropriate to enter judgment dismissing this action.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: April 20, 2012
New York, New York