Capella Sales & Services Ltd. v. United States

United States Court of Appeals
for the Federal Circuit
______________________
CAPELLA SALES & SERVICES LTD.,
Plaintiff-Appellant
v.
UNITED STATES, ALUMINUM EXTRUSIONS FAIR
TRADE COMMITTEE,
Defendants-Appellees
______________________
2016-2649, 2017-1196
______________________
Appeals from the United States Court of International
Trade in Nos. 1:14-cv-00304-DCP, 1:15-cv-00318-DCP,
Judge Donald C. Pogue.
______________________
Decided: January 4, 2018
______________________
IRENE HUEI-MIN CHEN, Chen Law Group LLC, Rock-
ville, MD, argued for plaintiff-appellant.
AIMEE LEE, International Trade Field Office, Appel-
late Section, International Trade Litigation, United
States Department of Justice, New York, NY, argued for
defendant-appellee United States. Also represented by
CHAD A. READLER, JEANNE E. DAVIDSON, REGINALD T.
BLADES, JR.; JAMES HENRY AHRENS, II, Office of the Chief
Counsel for Trade Enforcement & Compliance, United
States Department of Commerce, Washington, DC.
2 CAPELLA SALES & SERVS. LTD. v. UNITED STATES
ALAN H. PRICE, Wiley Rein, LLP, Washington, DC, for
defendant-appellee Aluminum Extrusions Fair Trade
Committee. Also represented by ROBERT E.
DEFRANCESCO, III, LAURA EL-SABAAWI, DERICK HOLT.
______________________
Before LOURIE, O’MALLEY, and CHEN, Circuit Judges.
LOURIE, Circuit Judge.
Capella Sales & Services Ltd. (“Capella”) appeals from
the decisions of the United States Court of International
Trade (the “Trade Court”), dismissing Capella’s two
separate complaints under USCIT Rule 12(b)(6). Capella
Sales & Servs. Ltd. v. United States, 180 F. Supp. 3d
1293, 1303–04 (Ct. Int’l Trade 2016) (“Decision I”); Capel-
la Sales & Servs. Ltd. v. United States, 181 F. Supp. 3d
1255, 1263–64 (Ct. Int’l Trade 2016) (“Decision II”).
Because the Trade Court did not err in dismissing Capel-
la’s complaints, we affirm.
BACKGROUND
The United States Department of Commerce (“Com-
merce” or “the Secretary”) has authority, in certain situa-
tions, to impose countervailing duties (“CVDs”) on
imported goods if it “determines that the government of a
country . . . is providing, directly or indirectly, a counter-
vailable subsidy with respect to” an imported good.
19 U.S.C. § 1671(a)(1) (2012). Capella challenges here the
assessed CVD rate of 374.15% on four entries of alumi-
num extrusions that Capella imported into the United
States from the People’s Republic of China (“PRC”),
arguing that it is entitled to a lower rate obtained by
several other importers after they successfully challenged
the 374.15% rate at the Trade Court in a separate case.
In determining whether and at what rates to assess
CVDs, Commerce may initiate an investigation. Id.CAPELLA SALES & SERVS. LTD. v. UNITED STATES 3
§ 1671a(a). Within a fixed time period following initiation
of an investigation, Commerce “shall make a final deter-
mination of whether or not a countervailable subsidy is
being provided with respect to the subject merchandise.”
Id. § 1671d(a)(1). If Commerce identifies such a counter-
vailable subsidy, then it shall determine either “an esti-
mated individual [CVD] rate for each exporter and
producer individually investigated,” or, if permitted by
§ 1671d(c)(5), “an estimated all-others rate for all export-
ers and producers not individually investigated.” Id.
§ 1671d(c)(1)(B)(i). If Commerce calculates an all-others
rate, Commerce must then order the “posting of a cash
deposit, bond, or other security . . . for each entry of the
subject merchandise” at that rate. Id. § 1671d(c)(1)(B)(ii).
This rate is referred to as the cash deposit rate.
After the posting of the cash deposit or bond at the
cash deposit rate, entries are “liquidated,” subject to
certain limitations. See 19 U.S.C. § 1504. Liquidation is
“the final computation or ascertainment of duties on
entries.” 19 C.F.R. § 159.1 (2017). The general rule is
that “entries of merchandise . . . covered by a determina-
tion of the Secretary . . . shall be liquidated in accordance
with the determination of the Secretary.” 19 U.S.C.
§ 1516a(c)(1).
However, the statute contemplates several situations
in which subject entries might not be liquidated at the
cash deposit rate calculated in the final determination.
First, if an affected party challenges a final determination
by Commerce covering its entries in court, and the court
enjoins liquidation of the entries at Commerce’s deter-
mined rate, then those entries are instead “liquidated in
accordance with the final court decision in the action,”
which could result in a revised cash deposit rate. Id.
§ 1516a(e). Second, subject entries not enjoined by the
court must still be liquidated according to the final court
decision if the entries are made “after the date of publica-
tion in the Federal Register . . . of a notice of the court
4 CAPELLA SALES & SERVS. LTD. v. UNITED STATES
decision.” Id. § 1516a(e)(1). Such a notice is called a
“Timken notice,” referring to Timken Co. v. United States,
893 F.2d 337, 341 (Fed. Cir. 1990). Commerce may also
initiate administrative review of entries “if a request for
such review has been received,” 19 U.S.C. § 1675(a)(1),
and then calculate a new rate that forms “the basis for the
assessment of [CVDs] . . . and for deposits of estimated
duties,” id. § 1675(a)(2)(C).
Commerce initiated a CVD investigation of imports of
certain aluminum extrusions from the PRC in 2010. As a
result of the investigation, Commerce published a final
determination setting the all-others rate on entries of
aluminum extrusions from the PRC at 374.15%, see
Aluminum Extrusions from the [PRC]: Final Affirmative
Countervailing Duty Determination, 76 Fed. Reg. 18,521,
18,522 (Apr. 4, 2011) (the “final determination”), and
issued a CVD order on May 26, 2011, directing United
States Customs and Border Protection (“CBP”) to assess
CVDs on subject merchandise as calculated in the final
determination, see Aluminum Extrusions from the [PRC]:
Countervailing Duty Order, 76 Fed. Reg. 30,653, 30,655
(May 26, 2011). Capella imported its four entries of
subject aluminum extrusions from the PRC between
November 2011 and June 2012.
Meanwhile, several other aluminum importers chal-
lenged Commerce’s final determination at the Trade
Court, resulting in the MacLean-Fogg litigation. The
MacLean-Fogg litigation resulted in court decisions
holding the 374.15% all-others rate unlawful, MacLean-
Fogg Co. v. United States, 853 F. Supp. 2d 1336, 1342–43
(Ct. Int’l Trade 2012), and affirming a lower rate deter-
mined by Commerce, MacLean-Fogg Co. v. United States,
885 F. Supp. 2d 1337, 1342–43 (Ct. Int’l Trade 2012).
Commerce published a Timken notice, effective December
10, 2012, notifying the public that the latter MacLean-
Fogg decision was “not in harmony with” Commerce’s
final determination. Aluminum Extrusions from the
CAPELLA SALES & SERVS. LTD. v. UNITED STATES 5
[PRC]: Notice of Court Decision Not in Harmony With
Final Determination, 77 Fed. Reg. 74,466, 74,466–67
(Dec. 14, 2012) (the “Timken notice”). Ultimately, the
MacLean-Fogg litigation resulted in an all-others rate of
7.37% on entries of aluminum extrusions from the PRC.
Aluminum Extrusions from the [PRC]: Amended Final
Countervailing Duty Determination, 80 Fed. Reg. 69,640,
69,641 (Nov. 10, 2015).
Certain parties requested, and Commerce initiated,
administrative review of 2011 and 2012 entries subject to
Commerce’s final determination in July 2012 and June
2013, respectively. Initiation of Antidumping and Coun-
tervailing Duty Administrative Reviews, 77 Fed. Reg.
40,565-02, 40,567 (July 10, 2012); Initiation of Antidump-
ing and Countervailing Duty Administrative Reviews, 78
Fed. Reg. 38,924-01, 38,925 (June 28, 2013). Capella
never sought administrative review of its entries. Conse-
quently, under 19 C.F.R. § 351.212(c) (2011), Capella’s
four entries were subject to automatic liquidation at the
374.15% cash deposit rate in effect at the time of the
entries.
When CBP required Capella to pay cash deposits at
the all-others CVD rate, Capella refused. Capella instead
filed two complaints at the Trade Court challenging
Commerce’s instructions regarding the rate applicable to
Capella’s entries. Both complaints asserted that Com-
merce cannot lawfully apply the 374.15% rate to Capella’s
four entries because of the disparity between the 374.15%
rate from Commerce’s final determination and the ulti-
mate 7.37% rate resulting from the MacLean-Fogg litiga-
tion.
The Trade Court dismissed both complaints under
USCIT Rule 12(b)(6) for failure to state a claim upon
which relief can be granted. The Trade Court determined
that Congress, in § 1516a(c)(1) and § 1516a(e), spoke
clearly on the issue of what CVD rate applies to pre-
6 CAPELLA SALES & SERVS. LTD. v. UNITED STATES
Timken notice entries when liquidation is not enjoined by
court decision or the subject of administrative review: the
rate Commerce established in its final determination.
Decision II, 181 F. Supp. 3d at 1263–64; Decision I, 180 F.
Supp. 3d at 1303–04. Because there was no dispute that
Capella’s entries were made before the Timken notice and
that Capella did not participate in the MacLean-Fogg
litigation or request administrative review of its entries,
Capella could not claim the benefit of the lower all-others
rate awarded to the MacLean-Fogg litigants.
Capella appealed both dismissals, and we have juris-
diction over the consolidated appeal under 28 U.S.C.
§ 1295(a)(5).
DISCUSSION
We review de novo the Trade Court’s dismissal of a
complaint for failure to state a claim upon which relief
can be granted. United States v. Ford Motor Co., 497 F.3d
1331, 1336 (Fed. Cir. 2007). We accept all well-pleaded
factual allegations as true and draw all reasonable infer-
ences in favor of Capella. Perez v. United States, 156 F.3d
1366, 1370 (Fed. Cir. 1998).
In reviewing the validity of an agency’s interpretation
of a statute that it is charged with administering, “we
must first carefully investigate the matter to determine
whether Congress’s purpose and intent on the question at
issue is judicially ascertainable.” Timex V.I., Inc. v.
United States, 157 F.3d 879, 881 (Fed. Cir. 1998); see also
Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,
467 U.S. 837, 842–43 & n.9 (1984). We do so by employ-
ing the traditional tools of statutory construction; we
examine the statute’s text, structure, and legislative
history, and apply the relevant canons of interpretation.
See Timex, 157 F.3d at 882. If we “ascertain[ ] that Con-
gress had an intention on the precise question at issue,
that intention is the law and must be given effect,” Chev-
ron, 467 U.S. at 843 n.9, and the only issue is whether the
CAPELLA SALES & SERVS. LTD. v. UNITED STATES 7
agency acted in accordance with that intent, see id. at
842; Timex, 157 F.3d at 882. If, however, we conclude
that Congress either had no intent on the matter, or that
Congress’s purpose and intent are unclear, we defer to the
agency’s interpretation of the statute if it falls within the
range of permissible construction. See Chevron, 467 U.S.
at 843; LTV Steel Co. v. United States, 174 F.3d 1359,
1363 (Fed. Cir. 1999).
Capella argues that the term “entries” in 19 U.S.C.
§ 1516a(c)(1) is ambiguous because it could refer to all or
only some entries. Furthermore, Capella contends that
Commerce’s application of 19 C.F.R. § 351.212(c), which
requires Commerce to apply the CVD rate in effect at the
time of entry, is unreasonable in this case because of the
large disparity between the 374.15% all-others rate
determined by Commerce and the 7.37% all-others rate
that ultimately resulted from the MacLean-Fogg litiga-
tion. Given the large disparity here and the purportedly
punitive nature of the 374.15% rate, Capella argues that
Commerce must apply the 7.37% MacLean-Fogg rate
retroactively to Capella’s entries.
The government responds that the statute is unam-
biguous. According to the government, the statute speci-
fies when Commerce’s determined rate does and does not
apply. Even if the statute were ambiguous, the govern-
ment argues that Commerce reasonably interpreted the
statute in promulgating and applying 19 C.F.R.
§ 351.212(c), which directs Commerce to apply the rate in
effect at the time of entry to Capella’s entries.
We agree with the government that § 1516a(c)(1) is
unambiguous and covers Capella’s entries. The statute
provides that, “[u]nless such liquidation is enjoined by the
court,” “entries . . . shall be liquidated in accordance with
the determination of the Secretary” if entered “on or
before the date of” the Timken notice. 19 U.S.C.
§ 1516a(c)(1). Capella correctly observes that, together,
8 CAPELLA SALES & SERVS. LTD. v. UNITED STATES
§ 1516a(c)(1) and § 1516a(e) address three categories of
entries: (1) entries made on or before the Timken notice,
where liquidation was enjoined by court decision; (2)
entries made after the Timken notice; and (3) entries
made on or before the Timken notice, where liquidation
was not enjoined by court decision. Entries in the first
two categories “shall be liquidated in accordance with the
final court decision.” Id. § 1516a(e). The third category of
entries “shall be liquidated in accordance with the deter-
mination of the Secretary.” Id. § 1516a(c)(1). There is no
dispute that Capella’s entries fall in the third category:
they were not enjoined by the Trade Court in an action
brought under § 1516a, and they were entered before the
effective date of the Timken notice published in December
2012.
Capella’s sole textual argument is that the term “en-
tries” in § 1516a(c)(1) is ambiguous because it is not
modified by the word “all.” In effect, Capella asks us to
hold that entries in the third category only occasionally
“shall be liquidated in accordance with the determination
of the Secretary.” Id. Capella cites no case holding that
absence of the word “all” demands such a porous reading
of the statute. We decline to further subcategorize
§ 1516a(c)(1) based on the particular facts of this case.
Consequently, consistent with the statutory scheme, we
conclude that Capella’s pre-Timken notice entries not
enjoined by court order under § 1516a(c)(2) may properly
be “liquidated as entered” in accordance with the Secre-
tary’s final determination. See Shinyei Corp. of Am. v.
United States, 355 F.3d 1297, 1307–08 (Fed. Cir. 2004);
see also 19 C.F.R. § 351.212(c).
Aside from its textual argument, Capella also con-
tends that the term “entries” is ambiguous because of the
legislative history and purpose of the statute. Capella
points to a portion of the Senate Report indicating that
the rate in effect at the time of entry would only apply in
the “usual” case where litigation is proceeding against a
CAPELLA SALES & SERVS. LTD. v. UNITED STATES 9
final determination. S. Rep. No. 96-249, at 248 (1979),
reprinted in 1979 U.S.C.C.A.N. 381, 634. Capella also
refers to background history supposedly indicating that
Congress did not contemplate “punitive” rates as high as
374.15% when it enacted § 1516a(c) in 1979, because
Commerce only began to assess such rates more recently.
Appellant’s Br. 40–41. Rather, Capella argues that
Congress only intended CVD rates to serve “remedial”
purposes. Id. at 38.
We disfavor such use of legislative history and other
extrinsic factors to create, rather than solve, an ambiguity
in otherwise clear statutory text. See Chamber of Com-
merce v. Whiting, 563 U.S. 582, 599 (2011) (citing United
States v. Shreveport Grain & Elevator Co., 287 U.S. 77, 83
(1932)). Congress knew how to except entries from the
cash deposit rate calculated in Commerce’s final determi-
nation, and did so for entries enjoined by a court decision,
19 U.S.C. § 1516a(e), and entries following a Timken
notice, id. § 1516a(c)(1). Congress also provided for
administrative review of entries if such review is request-
ed. See id. § 1675(a)(1). In contrast, Congress did not
engage in the line-drawing exercise that would be de-
manded by Capella’s “excessive disparity” approach, i.e.,
setting some threshold difference between the cash depos-
it rate and the rate eventually determined by a possible
future court decision above which Commerce must apply
the latter rate retroactively even to pre-Timken notice
entries. As Congress “knew how to create exceptions” to
assessing CVDs according to Commerce’s final determina-
tion, and “explicitly did so” when it wished to, we decline
to create further non-statutory exceptions based on the
extrinsic factors cited by Capella. See Cook v. Principi,
318 F.3d 1334, 1339 (Fed. Cir. 2002). That is not a proper
role for an appellate court.
In any event, the legislative history is consistent with
the plain meaning of the statute, and does not require
this court to create a non-statutory exception to
10 CAPELLA SALES & SERVS. LTD. v. UNITED STATES
§ 1516a(c)(1). The Senate Report cited by Capella states
that, “[p]ursuant to subsections (c)(1) and (e), in the usual
case, liquidation would proceed in accordance with the
decision under challenge while the litigation is proceed-
ing.” S. Rep. No. 96-249, at 248 (1979), reprinted in 1979
U.S.C.C.A.N. 381, 634 (emphasis added). The Senate
Report juxtaposes the “usual” case with “extraordinary
circumstances,” such as where the “[Trade Court], pursu-
ant to [§ 1516a(c)(2)], could order the suspension of liqui-
dation while the litigation proceeds.” Id. (emphasis
added). Capella reads too much into the term “usual.”
The Senate Report merely adds descriptive terms of
“usual” to the situations in § 1516a(c)(1), (e) and “extraor-
dinary” to the situation described in § 1516a(c)(2). It
provides no basis for us to go beyond the text of the stat-
ute.
Thus, an ordinary reading of the statute indicates
that only in certain specified cases may Commerce apply
a rate different from its final determination rate. Inter-
preting the statute consistently with the legislative histo-
ry does not permit, much less require, us to devise a non-
statutory exception to § 1516a(c)(1).
Finally, even assuming that § 1516a(c)(1) were am-
biguous, we agree with the government that, under Chev-
ron, Commerce reasonably interpreted the statute in
19 C.F.R. § 351.212(c). Chevron requires us to defer to
the agency’s interpretation of the statute if it falls within
the range of permissible construction. See Chevron, 467
U.S. at 843; LTV Steel, 174 F.3d at 1363. Section
351.212(c)(1)(i) directs Commerce to “instruct the Cus-
toms Service to . . . [a]ssess antidumping duties or [CVDs]
. . . at rates equal to the [cash deposit rate] required on
that merchandise at the time of entry” if “the Secretary
does not receive a timely request for an administrative
review.” Commerce sensibly assesses CVDs on non-
reviewed entries in accordance with the final determina-
tion in effect at the time of entry. See Shinyei, 355 F.3d
CAPELLA SALES & SERVS. LTD. v. UNITED STATES 11
at 1307; see also Asociacion Colombiana de Exportadores
de Flores v. United States, 916 F.2d 1571, 1577 (Fed. Cir.
1990) (“We do not question the authority of [Commerce],
pursuant to its regulation, to liquidate entries . . . at the
rate set in the original antidumping duty order when
there has been no challenge to the validity of that order
and no request for annual review.”). This is consistent
with the limited time CBP has to liquidate entries, see 19
U.S.C. § 1504(d), provides certainty to both Commerce
and affected parties of the applicable rate for non-
reviewed entries, and encourages affected parties to
exercise the statutory avenues for challenging Com-
merce’s determined rate. Thus, even assuming that
§ 1516a(c)(1) were ambiguous, we would hold that Com-
merce reasonably interpreted this section under Chevron
in light of these considerations.
In sum, we agree with the Trade Court that Capella
has not alleged sufficient facts to state a claim on which
relief can be granted.
CONCLUSION
For the foregoing reasons, we affirm the judgment of
the Trade Court dismissing Capella’s complaints.
AFFIRMED