Agro Dutch Industries Ltd. v. United States

Slip Op. 08 - 110
UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
AGRO DUTCH INDUSTRIES LIMITED, :
:
Plaintiff, :
:
v. : Before: MUSGRAVE, Senior Judge
: Court. No. 02-00499
UNITED STATES, :
:
Defendant, :
:
and :
:
COALITION FOR FAIR PRESERVED :
MUSHROOM TRADE, :
:
Defendant-Intervenor. :
____________________________________:
[Motion granted to amend judgment on antidumping duty administrative review.]
OPINION AND ORDER
Dated: October 17, 2008
Garvey Schubert Barer (Lizbeth R. Levinson, Ronald M. Wisla) for the plaintiff.
George G. Katsas, Assistant Attorney General, Jeanne E. Davidson, Director, Commercial
Litigation Branch, Civil Division, United States Department of Justice (Richard P. Schroeder); and
International Office of Chief Counsel for Import Administration, United States Department of
Commerce (Hardeep K. Josan), of counsel, for the defendant.
Collier, Shannon, Scott, PLLC (Adam H. Gordon and Michael J. Coursey) for the defendant-
intervenor.
This opinion presumes familiarity with prior proceedings in the matter. The plaintiff Agro
Dutch Industries Ltd. provided no comment following the Results of Redetermination Pursuant to
Remand (“Redetermination”) of Certain Preserved Mushrooms From India: Final Results of
Court No. 02-00499 Page 2
Antidumping Duty Administrative Review, 67 Fed. Reg. 46,172 (July 12, 2002) submitted by the
International Trade Administration, U.S. Department of Commerce (“Commerce”), but it now seeks
to amend the Judgment pursuant to USCIT Rules 59(e) and 60(a) to specify mandatory reliquidation
of all entries liquidated upon Commerce’ instruction at the original and erroneous antidumping duty
rate by what was then the U.S. Bureau of Customs and Border Protection (“Customs,” including its
latest incarnation), after this action was commenced, after Commerce changed its liquidation policy,
and one day before liquidation was enjoined. Agro Dutch thereafter amended its Complaint to
invoke the Court’s residual jurisdiction under 28 U.S.C. § 1581(i) and plead that the government’s
“premature” liquidation was based upon instructions from Commerce that “were arbitrary,
capricious, an abuse of discretion or not otherwise in accordance with law.”1 Compl. ¶ 22. See Slip
Op. 08-50 (May 8, 2008). The relief Agro Dutch seeks will be granted in part, as follows.
The antidumping statute requires liquidation of entries covered by Commerce’s
administrative determination unless enjoined by order of this Court. See 19 U.S.C. §§ 1516a(c) &
(e). Thus, the parties here again focus on Commerce’s then-new 15-day liquidation policy,2 whether
1
Agro Dutch would have better served its own interests and those of this proceeding by
updating its treatment of the issue (as it has here done) during the comment period on the
Redetermination, particularly in view of new case law since it first briefed the issue in early 2003.
2
See also Agro Dutch Indus. Ltd. v. United States, 29 CIT 20, 358 F.Supp.2d 1293 (2005).
The policy has been a matter of some controversy. See Announcement Concerning Issuance of
Liquidation Instructions Reflecting Results of Administrative Reviews (Dep’t Comm., Aug. 9, 2002).
Cf., e.g., Tianjin Machinery Import & Export Corp. v. United States, 28 CIT 1635, 353 F.Supp.2d
1294 (2004) with Mittal Steel Galati S.A. v. United States, 31 CIT ___, 491 F.Supp.2d 1273 (2007).
Agro Dutch did not claim that the liquidation instructions as issued were not “in accordance with”
the original final administrative review results but rather that Commerce’s new 15-day liquidation
policy, the cause of the liquidation problem at issue, is unlawful, and, further, implied that success
on the merits of its 28 U.S.C. § 1581(c) action would consequently render the liquidation instructions
(continued...)
Court No. 02-00499 Page 3
the liquidations were pursuant to that policy and lawful or unlawful, who did what and when, et
cetera,3 but at this stage a decision on the “technical” legality of the liquidations is of less moment
to amending the judgment. What is important at this stage is (1) that the liquidations resulted in the
assessment of unfair trade duties at an unfair rate that has since been invalidated, see Slip Op. 08-50,
(2) that these liquidations apparently occurred in spite of the parties’ ultimate good faith (presumed)
2
(...continued)
unlawful in their own right. Cf. 19 U.S.C. § 1675(a)(2)(C) (the results of an administrative review
“shall be the basis for the assessment of . . . antidumping duties on entries of merchandise covered
by the determination”) with 19 U.S.C. § 1516a(e) (liquidation in accordance with final judicial
decision).
3
The dispute concerns the following timeline:
- July 5, 2002, Commerce issues final results of the underlying review.
- July 12, 2002, Commerce publishes results of review in the Federal Register.
- July 19, 2002, Agro Dutch files summons and complaint commencing appeal; thereafter
Agro Dutch replaces counsel.
- August 9, 2002, Commerce announces a new liquidation instructions issuance policy; Agro
Dutch files substitution of counsel.
- August 18, 2002, USCIT Rule 56.2 deadline for motion to enjoin liquidation.
- August 23, 2002, Commerce issues the liquidation instructions at issue to Customs.
- September 26, 2002, Agro Dutch files consent motion to enjoin liquidation (subsequently
refiled on September 30, 2002).
- October 1, 2002, Court grants preliminary injunction, with effect from the fifth business day
after personal service upon the government.
- October 4, 2002, Customs liquidates most (if not all) of Agro Dutch’s entries, the same day,
as represented by government counsel, that Agro Dutch personally serves the injunction.
- October 8, 2002 (or October 11, 2002, if the government’s representation on service is
accurate), preliminary injunction to take effect.
(In its Answer to the Complaint, the government raised the affirmative defenses of estoppel,
laches and waiver. Ans. ¶¶ 25-27. Laches appears inapplicable, because even if it could be proven
that Agro Dutch unreasonably delayed asserting its rights, the government appears unable to prove
material prejudice as a result of such delay. Cf. Slip Op. 08-50 with, e.g., Lincoln Logs Ltd. v.
Lincoln Pre-Cut Log Homes, Inc., 971 F.2d 732 (Fed. Cir. 1992) and Freeport Minerals Co. v.
United States, 758 F.2d 629 (Fed. Cir. 1985). Further, estoppel and waiver appear rather relevant
to the issue of the government’s consent to injunction and its apparent insistence on effectiveness
on the fifth day after personal service.)
Court No. 02-00499 Page 4
effort to enjoin liquidation pursuant to 19 U.S.C. § 1516a(c),4 and (3), to a lesser extent, that the
liquidations were thereafter protested to Customs in order to provide some continued protection, see
Pl.’s Mot to Amend Judg., Ex. 1.5 As to all three, the government’s strongest argument is that under
SKF USA, Inc. v. United States, 512 F.3d 1326 (Fed. Cir. 2008), the rule of Zenith would be violated
by “backdating” the grant of injunction to a date prior to when the contested entries were actually
liquidated. Cf. 512 F.3d at 1332 with Zenith Radio Corp. v. United States, 710 F.2d 806 (Fed. Cir.
1983). The facts of SKF, however, stand in contrast to this matter, in which the Court granted the
parties’ consent to enjoin before liquidation occurred, at least as to certain entries.
Assuming the government acted in good faith in requesting the plaintiff’s consent to a five-
day delay in the effective date of the injunction, liquidation apparently occurred in this matter only
as a result of what might best be charitably described as “inadvertence.” Further, liquidation did not
moot judicial review of the administrative review. See Slip Op. 08-50. Therefore, it does not follow
that substituting, nunc pro tunc, to an effective date for the injunction that comports with the parties’
intention to enjoin would violate the rule of Zenith in this matter.
4
See, e.g., Pl.’s Br. in Support of Mot. for Judg. Upon the Agency Record at 25 (the
government’s consent to preliminary injunction “clearly intended that the entries that will be affected
by the Court’s decision in this lawsuit would be subject to the injunction, and it is only the accident
of their coincidental early liquidation that frustrated that intent”) & Pl.’s Mot to Amend Judg., Ex.
1 (letter dated Dec. 26, 2002 (“Letter”) from counsel to U.S. Customs Service (as it was then
known), at 7-8) (same). No explanation has been offered for the five-day delay in the effective date
of the injunction except that it is alleged to have been at the insistence of the government, see, e.g.,
id., Letter at 5, which the government does not refute.
5
Cf. Mittal Steel Galati S.A. v. United States, 31 CIT ___, 521 F.Supp.2d 1409 (2007). But,
jurisdiction under 28 U.S.C. § 1581(a) does not extend to protests of mere ministerial acts of
Customs on instruction from Commerce. See, e.g., Mitsubishi Electronics America, Inc. v. United
States, 44 F.3d 973 (Fed. Cir. 1994).
Court No. 02-00499 Page 5
Furthermore, Shinyei Corp. of America v. United States, 524 F.3d 1274 (Fed. Cir. 2008)
(“Shinyei II”) and Shinyei Corp. of America v. United States, 355 F.3d 1297 (Fed. Cir. 2004)
(“Shinyei I”) hold that actual or deemed liquidation of unfair trade duties do not, necessarily, deprive
the Court of jurisdiction to relieve improper liquidation instruction from Commerce to Customs.
These two cases thus clarify that liquidation did not, necessarily, moot the relief Agro Dutch seeks.
Cf. Shinyei II, 524 F.3d at 1283 (limiting the applicability of the rationale of SKF among cases
“hold[ing] only that when an entry is deemed liquidated, the duty rate is the deposit rate, and
Customs may not recover additional duties from the importer thereafter”) (italics in original).
Rather, the Shinyei cases reveal that the government’s position here is not unassailable.
By its motion, Agro Dutch appeals to the equitable power of the Court, 28 U.S.C. § 1585,
in asserting that the importer of record, a non-party, would be rendered insolvent unless the proper
rate of antidumping duties is assessed through reliquidation. That circumstance stands in stark
contrast to the “justice” of the government’s claim, which amounts to potential award of erroneous
and excessive unfair trade duties to which it would not otherwise be entitled (see Slip Op. 08-50)
but for the pure technicality of the consequence to justiciability of liquidation. The inequity of the
potential consequence to the importer of record, of denial of the instant motion at this stage, thus
favors granting the relief Agro Dutch seeks, even if the record indications of plaintiff dilatoriness
during the course of these proceedings most emphatically do not, in this hopefully unique matter.
Under USCIT Rule 59(e), via (a)(2), the judgment may be amended “for any of the reasons
for which rehearings have heretofore been granted in suits in equity in the courts of the United
States[,]” one of which is to prevent manifest injustice. Cf. Doe v. New York City Dep’t of Social
Court No. 02-00499 Page 6
Servs., 709 F.2d 782, 789 (2d Cir.1983). The circumstances of this case compel the conclusion that
the Court has not been deprived of 28 U.S.C. § 1581(i) jurisdiction over the “administration and
enforcement” of proper liquidation instruction on the applicable antidumping duties for the entries
at bar by their “inadvertent” liquidation, because manifest injustice would apparently result to a non-
party if the plaintiff’s motion were not granted. Further, in the interests of judicial economy and the
parties’ resources the court will except requiring a fuller presentation of Agro Dutch’s evidence to
support its representations by way of a formal hearing and will accept as credible and sufficient for
the purpose of the instant motion the various assertions and representations found in counsels’ briefs
with respect to the financial position of the importer of record. See, e.g., Pl.’s Mot to Amend Judg.,
Ex. 1, Letter at 7 (the “importer of record . . . now faces Customs bills totaling many times greater
than its total corporate assets”).
Therefore, upon consideration of Agro Dutch’s motion to amend, and all other papers and
proceedings had herein, the motion is hereby granted to the effect that the effective date of the
injunction is hereby amended, nunc pro tunc, to October 1, 2002, the date the Court granted the
injunction; and to the effect that all entries of subject merchandise on that date or subsequently
liquidated pursuant to the final results of the Department of Commerce, International Trade
Administration, published at 67 Fed. Reg. 46,172 (July 12, 2002) shall hereby be reliquidated in
accordance with this Court’s Judgment in Slip Op. 08-50 (May 8, 2008). As to entries liquidated
before such date, the Court retains no jurisdiction. Cf. SKF, supra, with Shinyei I & Zenith, supra.SO ORDERED.
Dated: October 17, 2008 /s/ R. Kenton Musgrave
New York, New York R. KENTON MUSGRAVE, Senior Judge