Nan Ya Plastics Corp., Am. v. United States , 853 F. Supp. 2d 1300 ( 2012 )

Slip Op. 12-92
UNITED STATES COURT OF INTERNATIONAL TRADE
NAN YA PLASTICS CORPORATION,
AMERICA,
Plaintiff,
Before: Gregory W. Carman, Judge
Timothy C. Stanceu, Judge
v.
Leo M. Gordon, Judge
UNITED STATES OF AMERICA, UNITED
Court No. 08-00138
STATES CUSTOMS AND BORDER
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: July 12, 2012
J. Kevin Horgan, deKieffer & Horgan, of Washington, DC, for Plaintiff Nan Ya
Plastics Corporation, America.
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. 08-00138 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, Nan Ya Plastics
Corporation, America (“Nan Ya”), 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§ 1675c (2000), repealed by Deficit Reduction Act of 2005, Pub.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 a list of parties potentially eligible for “affected domestic producer” (“ADP”) status,
which potentially would have qualified Nan Ya for distributions of antidumping duties
collected under antidumping duty orders on imports of certain polyester staple fiber
(“PSF”) from the Republic of Korea and Taiwan. Certain Polyester Staple Fiber from
Korea and Taiwan, Inv. No. 731-TA-825-826 (Final), USITC Pub. 3300 (May 2000);
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 Nan Ya.
Court No. 08-00138 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 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 Mot. to Dismiss for Failure to State a Claim upon Which Relief can be
Granted, ECF No. 49 (“ITC’s Mot.”)) and Customs (Defs. the United States and U.S.
Customs and Border Protection’s Mem. in Supp. of the Mot. to Dismiss for Failure to
State a Claim, 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) (“Furniture Brands I”). For the reasons set
forth below, we conclude that Plaintiff’s claims must be dismissed for failure 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, including
Plaintiff, the U.S. Department of Commerce (“Commerce”) initiated an antidumping
investigation of PSF from the Republic of 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); Sec. Am. Compl.
Court No. 08-00138 Page 4
¶ 21, ECF No. 46. The ITC conducted an injury investigation. Certain Polyester Staple
Fiber from Korea and Taiwan, 64 Fed. Reg. 17,414 (ITC Apr. 9, 1999); Sec. Am. Compl.
¶ 21. Shortly thereafter, on May 4, 1999, Nan Ya withdrew as a petitioner as to Korea.
See Certain Polyester Staple Fiber from Korea and Taiwan (Review), USITC Pub. 3483
at I-6 n.5 (Mar. 2006); Sec. Am. Compl. ¶ 22.1 As part of its investigation, the ITC sent
questionnaires to the domestic industry that asked domestic producers, including Nan
Ya, to, inter alia, identify their position regarding the petition by checking one of three
boxes indicating either support, opposition, or no position. Plaintiff filed a response but
did not check the box indicating support for the petition on the ITC’s final phase
questionnaire. Id. ¶ 23.
Following an affirmative injury determination on PSF 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; Sec. Am. Compl. ¶ 25. The antidumping duty orders remain in effect. Sec. Am.
Compl. ¶ 25.
Plaintiff brought this action on April 18, 2008, contesting the denial of CDSOA
distributions to Plaintiff for Fiscal Years 2006 and 2007. Id. ¶ 6. 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. 11 (action stayed “until final resolution of
1
Nan Ya was only a petitioner as to the Republic of Korea and not as to Taiwan. Thus,
upon its withdrawal, Nan Ya was “no longer a petitioner against either country.” Sec.
Am. Compl. ¶ 22.
Court No. 08-00138 Page 5
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) (“SKF”), cert.
denied, 130 S. Ct. 3273 (2010),2 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. 15. After receiving Plaintiff’s
response, the court lifted the stay on this action for all purposes. Order Lifting Stay,
Feb. 9, 2011, ECF No. 219. On May 5, 2011, Plaintiff filed its Second Amended
Complaint, seeking CDSOA disbursements for Fiscal Years 2006, 2007, and
subsequent fiscal years. See Sec. Am. Compl., Prayer for Relief. Defendants filed
motions to dismiss for failure to state a claim upon which relief can be granted on May
24, 2011 (ITC’s Mot.) and May 5, 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 the plaintiff’s favor. Cedars-Sinai Med. Ctr. v.
Watkins, 11 F.3d 1573, 1583-84 & n.13 (Fed. Cir. 1993); Gould, Inc. v. United States,
935 F.2d 1271, 1274 (Fed. Cir. 1991).
2
SKF reversed the decision of the Court of International Trade in SKF USA Inc. v.
United States, 30 CIT 1433, 451 F. Supp. 2d 1355 (2006), which held the CDSOA
requirement that limited affected domestic producer status to interested parties in
support of the petition unconstitutional on Fifth Amendment equal protection grounds.
Court No. 08-00138 Page 6
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). “To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim of relief that is 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).3 ADP status is available
only to a party who “was a petitioner or interested party in support of a petition with
respect to which an antidumping duty order, a finding under the Antidumping Duty Act of
1921, or a countervailing duty order was entered.” Id. § 1675c(b)(1). 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
3
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. 08-00138 Page 7
response.” Id. § 1675c(d)(1). Customs 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
meet the remaining eligibility criteria. Id. § 1675c(d)(2).
The ITC compiled lists of potential ADPs with respect to the antidumping duty
orders on PSF, which lists it then provided to Customs. Sec. Am. Compl. ¶ 27.
Customs published the lists of potential ADPs for Fiscal Year 2006 on June 1, 2006, and
for Fiscal Year 2007 on May 29, 2007. Id. ¶¶ 32, 33. Plaintiff did not appear on either
list. Id. ¶¶ 27, 32, 33. Nevertheless, Plaintiff certified to Customs its eligibility for both
fiscal years based on “developing case law.” Id. ¶ 34. Customs responded by
indicating that Nan Ya 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. ¶ 36.
Plaintiff also filed a letter with the ITC seeking formal certification as an ADP. Id. ¶ 35.
Stating that Plaintiff “did not qualify as an ADP because it did not support the original
petitions,” the ITC denied Nan Ya’s request for certification. Id. ¶ 37.
Plaintiff challenges the validity and constitutionality of the Commission’s and
CBP’s application of the CDSOA to Nan Ya. In Count 1 of the Second Amended
Complaint, Plaintiff claims that the ITC’s determination not to include Nan Ya on the list
of potential ADPs and Customs’ refusal to provide CDSOA distributions to Nan Ya were
inconsistent with the CDSOA, not supported by substantial evidence, and otherwise not
in accordance with law. Sec. Am. Compl. ¶ 44. In Counts 2 and 3, Plaintiff challenges
Court No. 08-00138 Page 8
on First Amendment grounds the provision in the CDSOA that, with respect to parties
who were not petitioners, confines benefits to parties who were in support of a petition.
19 U.S.C. §§ 1675c(b)(1), (d)(1) (“the petition support requirement”). Plaintiff brings its
First Amendment challenge to the petition support requirement both facially and on an
as-applied basis. Sec. Am. Compl. ¶¶ 45-51. In Counts 4 and 5, Plaintiff challenges the
petition support requirement, both facially and as applied to Nan Ya, on Fifth
Amendment equal protection grounds. Id. ¶¶ 52-57. In Count 6, Plaintiff challenges the
petition support requirement as impermissibly retroactive in violation of the Fifth
Amendment due process guarantee on the ground that Defendants based eligibility for
ADP status, and thus eligibility for disbursements, on past conduct. Id. ¶ 59. Finally, in
Count 7, Plaintiff claims the petition support requirement was satisfied by Nan Ya’s
support for the continuation of the antidumping orders during the ITC’s five-year review
(“Sunset Review”) of those orders. Id. ¶ 61.
A. Plaintiff’s Statutory Challenges Must Be Dismissed
Nan Ya claims in Count 1 that the ITC and Customs violated the CDSOA by
denying Nan Ya disbursements thereunder. Id. ¶ 44. In a related context, Plaintiff
claims in Count 7 that Nan Ya qualified under the CDSOA as a party in support of the
petition because it “expressed support for the continuation of the orders during the
Commission’s five-year review of such orders, which is the functional equivalent of
supporting the petition for the five-year renewal period.” Id. ¶ 61. Because we exercise
jurisdiction over Plaintiff’s statutory claims according to 28 U.S.C. § 1581(i), we review
these claims as provided in section 706 of the Administrative Procedure Act, 5 U.S.C.
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§ 706 (2006). 28 U.S.C. § 2640(e). Under this standard, the court must hold unlawful
agency actions found to be “arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law . . . .” 5 U.S.C. § 706(2)(A). We conclude that Plaintiff has
failed to allege facts upon which the court could conclude that the ITC or Customs acted
unlawfully according to this standard.
Nan Ya could have obtained from the ITC a designation of status as a potential
ADP only if it qualified as a “petitioner” or, in the alternative, as a “party in support of the
petition.” 19 U.S.C. § 1675c(b)(1)(A). Nan Ya could qualify as a “party in support of the
petition” only if it indicated “support of the petition by letter or through questionnaire
response.” Id. § 1675c(d)(1). To prevail on its statutory claims against the
Commission, Plaintiff must plead facts under which we could conclude that the ITC, in
omitting Nan Ya from its lists of potential ADPs, acted arbitrarily or capriciously, abused
its discretion, or otherwise acted contrary to law. For the reasons presented below, we
conclude that Nan Ya has failed to plead such facts. Therefore, we will dismiss, for
failure to state a claim on which relief can be granted, all statutory claims brought
against the ITC, as stated in Counts 1 and 7 of the Second Amended Complaint.
1. The ITC Did Not Err in Declining to Recognize Nan Ya
as a “Petitioner” under the CDSOA
Nan Ya was among a group of domestic producers that filed, on April 2, 2009, a
petition seeking imposition of antidumping duties on PSF but sought antidumping duties
only as to Korea, not Taiwan. Sec. Am. Compl. ¶¶ 21, 22; see Certain Polyester Staple
Fiber from Korea and Taiwan, 64 Fed. Reg. 17,414 (USITC Apr. 9, 2009). Plaintiff
admits that it “withdrew as a petitioner” as to Korea on May 4, 1999. Sec. Am. Compl. ¶
Court No. 08-00138 Page 10
22. The CDSOA provides that a party that “was a petitioner . . . with respect to which
an antidumping duty order . . . has been entered” potentially may receive ADP status.
19 U.S.C. § 1675c(b)(1)(A). On these facts, we cannot conclude that the ITC erred by
not recognizing Nan Ya as a “petitioner” within the meaning of the CDSOA.
Under the antidumping statute, a “petitioner” is an interested party who files, on
behalf of a domestic industry, a petition “which alleges the elements necessary for the
imposition of the duty imposed by section 1673 of this title, and which is accompanied
by information reasonably available to the petitioner supporting those allegations.” Id.
§ 1673a(b)(1), (b)(2). Those “elements,” as set forth in § 1673, are that a class or kind
of foreign merchandise is being, or is likely to be, sold in the United States at less than
fair value, and that imports of that merchandise are causing or threatening to cause
material injury to a domestic industry or are materially retarding establishment of a U.S.
industry. A “petitioner,” therefore, in alleging the elements required for the imposition of
an antidumping duty, is, as a general matter, a party who seeks to have an antidumping
duty imposed on imports of the foreign merchandise that is the subject of the petition.4
It follows that a party who withdraws from a petition effectively has served public notice
that it has withdrawn its previous support for the imposition of antidumping duties or
other relief.
The CDSOA makes no distinction between the benefits it makes available to
parties who were “petitioners” and those who were “in support of the petition.”
19 U.S.C. § 1675c(b)(1)(A), (d). What these two groups have in common is that they
4
A petition may result in relief from dumped imports through means other than an
antidumping duty order, e.g., a suspension agreement. See 19 U.S.C. § 1673c(b), (c).
Court No. 08-00138 Page 11
were in support of a measure affording relief from the imports alleged to be sold at less
than fair value, which relief, in the typical case, will take the form of an order imposing
antidumping duties. Only if such an antidumping duty order is imposed may CDSOA
disbursements eventually occur. Thus, in awarding benefits, the statute draws a clear
distinction between those parties who were in support of the imposition of antidumping
duties and those who were not. Because Nan Ya withdrew its support for the imposition
of antidumping duties on PSF imports from Korea (or, for that matter, any alternate form
of relief from these imports) by its act of withdrawing from the petition, we cannot
conclude that the ITC abused its discretion or otherwise acted contrary to law in not
recognizing Nan Ya as a “petitioner” under the CDSOA as to the order on Korea. Nan
Ya, furthermore, has alleged no facts from which we could conclude that the ITC acted
arbitrarily or capriciously, such as facts indicating that Nan Ya was treated differently
than other parties who withdrew from a petition or that the ITC failed to consider all
relevant factors. See 33 Charles Alan Wright & Arthur R. Miller, Federal Practice &
Procedure § 8334 (3d ed. 1998).
2. The ITC Did Not Err in Declining to Recognize Nan Ya as a
“Party in Support of the Petition” under the CDSOA
In claiming that the ITC unlawfully determined that Nan Ya did not qualify for
ADP status as a party in support of the petition, Plaintiff alleges that “there is evidence
of Nan Ya’s support within the record of the original investigation in the form of
testimony of Brad Dutton, a Senior Account Manager for Nan Ya, in support of the
petition.” Sec. Am. Compl. ¶ 41. Plaintiff attached to its complaint a transcript of
Court No. 08-00138 Page 12
testimony Mr. Dutton gave before the ITC at a hearing on April 26, 1999. Id. Ex. 1. This
allegation is insufficient to establish Nan Ya’s eligibility for CDSOA benefits.
The CDSOA allowed a party such as Nan Ya to qualify for potential
disbursements either as a petitioner or as a party in support of a petition. See
19 U.S.C. § 1675c(b)(1)(A). When Mr. Dutton gave his testimony, Nan Ya was still a
petitioner, Nan Ya’s withdrawal having occurred eight days later. As we discussed
above, a petitioner is, by definition, a party who is in support of the imposition of
antidumping duties. Because the Dutton testimony occurred while Nan Ya was still a
petitioner, and prior to Nan Ya’s withdrawal from the petition, that testimony cannot
serve as an independent basis upon which Nan Ya could have qualified for CDSOA
benefits as a party “in support of the petition” as to Korea within the meaning of
§ 1675c(b)(1)(A). Moreover, the transcript of the Dutton testimony does not state that
Nan Ya supports the petition, either as to Korea or Taiwan. Instead, Mr. Dutton’s
testimony addresses alleged injury to Nan Ya from imports of PSF. Sec. Am. Compl.
Ex. 1, at 27-30.
Plaintiff also points to “a post-hearing brief filed by petitioner’s counsel which
asserts that Nan Ya’s interest is as a domestic producer in support of the petition,” an
excerpt from which Plaintiff also attached as an exhibit to the complaint. Sec. Am.
Compl. ¶ 41 & Ex. 2. As to Korea, this allegation fails for precisely the same reason as
the allegation concerning the Dutton testimony, i.e., the brief was filed with the ITC on
April 29, 1999, just before Nan Ya withdrew from the petition. As to Korea and Taiwan,
the excerpt from Nan Ya’s brief does not affirmatively declare support for the petition.
Court No. 08-00138 Page 13
Rather, it states that Nan Ya’s “operations have not been shielded from the adverse
impact of the subject imports” and that “notwithstanding Nan Ya America’s ownership by
a subject Taiwanese producer, Nan Ya’s interest is as a domestic producer.” Id. Ex. 2,
at 9.
Even if we were to presume that the Dutton testimony or the brief constituted
support for the petition, we still would conclude that these actions do not satisfy the
petition support requirement. Plaintiff admits that on January 20, 2000, during the final
phase of the ITC’s injury investigation, “it filed a U.S. producer questionnaire taking no
position with respect to support for the petitions against Korea and Taiwan.” Sec. Am.
Compl. ¶ 23. As we have stated previously, the plain language of § 1675c(d)(1)
requires affirmative support of a petition. Ethan Allen Global, Inc. v. United States, 36
CIT ___, ___, 816 F. Supp. 2d 1330, 1337 (2012). Anything other than an affirmative
statement of support fails to satisfy the statute. Here, in responding that it takes “no
position” on the subject petition, Nan Ya affirmatively declined to support the petition,
either as to Korea or Taiwan. Nan Ya thus negated any prior expression of support that
it may have made. 5
Plaintiff does not allege that Nan Ya, having declined in that questionnaire
response to take a position in support of the petition, made any further communication
to the ITC in support of the petition, prior to the issuance of the antidumping duty order
on PSF from Korea. Instead, Plaintiff alleges only that it provided “financial support to
5
In opposing dismissal, Plaintiff states that it supported the petition in an April 14, 2009
questionnaire response to the ITC. Pl.’s Opp’n to ITC Mot. 19, ECF No. 51. This
allegation does not appear in the complaint. Even if it did, it still would fail because of
Nan Ya’s later expression of no position on the petition.
Court No. 08-00138 Page 14
petitioners’ counsel in the original investigation,” Sec. Am. Compl. ¶ 43 & Ex. 3, and
expressed support for the continuation of the antidumping duty orders in a five-year
sunset review under 19 U.S.C. § 1675(c), id. ¶¶ 31, 60-61. Neither of these actions
qualified Nan Ya as an ADP. The CDSOA provides that the list the ITC forwards to
Customs is to include those parties “that indicate support of the petition by letter or
through questionnaire response.” 19 U.S.C. §1675c(d)(1). As this Court previously has
held, providing financial support to a petitioner does not enable a person to obtain ADP
status under the CDSOA as a party in support of the petition. Tampa Bay Fisheries,
Inc. v. United States, 36 CIT __, __, 825 F. Supp. 2d 1331, 1340-41 (2012). As this
Court also has held, support for an already-issued antidumping duty order in a five-year
“sunset” review is not the equivalent of support for a petition under the CDSOA. United
Synthetics, Inc. v. United States, 36 CIT __, __, Slip Op. 12-52, at 9-11 (Apr. 20, 2012).
In summary, we conclude that Plaintiff has failed to plead facts from which we
may conclude that the ITC acted arbitrarily, capriciously, in excess of its discretion, or
otherwise contrary to law, when it denied Nan Ya ADP status as a party in support of
the petition.
3. Plaintiff Fails to State a Statutory Claim Against Customs
on which Relief Can Be Granted
Plaintiff claims that Customs violated the CDSOA by failing to include Nan Ya in
CDSOA distributions. Sec. Am. Compl. ¶ 6 (“Nan Ya challenges . . . Customs’ failure to
make a distribution to Nan Ya in FY 2007 and FY 2006 under the CDSOA.”). Eligibility
to participate in a distribution, however, is limited to those parties appearing on the list
of potential ADPs prepared by the Commission. Paragraph (1) of 19 U.S.C. § 1675c(d)
Court No. 08-00138 Page 15
requires the Commission to prepare a list of potential ADPs, while paragraph (2) directs
Customs to publish “the list of affected domestic producers potentially eligible for the
distribution based on the list obtained from the Commission under paragraph (1)” and
states that Customs must request a certification of eligibility “from each potentially
eligible affected domestic producer.” Paragraph (3) of section 1675c(d) requires
Customs to make distributions “based on the certifications described in paragraph (2).”
Customs, therefore, lacked authority to include Nan Ya, a party that the ITC determined
not to qualify as an ADP, in its distributions of disbursements under the CDSOA.
Therefore, we must dismiss, for failure to state a claim on which relief can be granted,
all statutory claims Plaintiff brings against Customs, as stated in Counts 1 and 7 of the
Second Amended Complaint.
B. Plaintiff's Constitutional Challenges Must be Dismissed
In Counts 2 through 5, Plaintiff brings facial and as-applied challenges to the
petition support requirement of the CDSOA under the First Amendment and the Fifth
Amendment’s equal protection guarantee. Sec. Am. Compl. ¶¶ 45-47. In Count 6,
Plaintiff challenges the petition support requirement as impermissibly retroactive under
the Fifth Amendment due process guarantee. Id. ¶ 58-59. We conclude that the First
Amendment and equal protection claims must be dismissed as foreclosed by binding
precedent. We reject Plaintiff’s due process claims because we conclude that the
petition support requirement is not impermissibly retroactive.
Court No. 08-00138 Page 16
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. Sec. Am. Compl.
¶ 51. 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 petition,
and is therefore an unconstitutional restriction on speech. Id. ¶ 50.
In Count 5, Plaintiff raises a facial challenge to the CDSOA, claiming that the
petition support requirement violates the equal protection guarantee of the Fifth
Amendment. Id. ¶ 56. Plaintiff claims that the CDSOA creates a classification infringing
on Nan Ya's fundamental right to free speech that is not narrowly tailored to a
compelling government objective. Id. Plaintiff also contends that the CDSOA
impermissibly discriminates between Plaintiff and other domestic producers who
expressed support for the petition. Id. ¶ 57.
The Court of Appeals rejected analogous claims challenging the petition support
requirement in SKF, in which it upheld the petition support requirement under the First
Amendment and under the Fifth Amendment’s equal protection guarantee. SKF,
556 F.3d at 1360 (stating 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.”); id. at 1360 n.38 (“For the same reason, the Byrd
Amendment does not fail the equal protection review applicable to statutes that
Court No. 08-00138 Page 17
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 First Amendment and
equal protection challenges to the CDSOA, therefore, are foreclosed by the holding in
SKF, and those challenges must be dismissed for failure to state a claim on which relief
can be granted.
Plaintiff argues that SKF is no longer good law because the decision of the Court
of Appeals in SKF to uphold the petition support requirement using an intermediate level
of scrutiny, the “Central Hudson” test, was implicitly overturned by a recent decision of
the U.S. Supreme Court, Snyder v. Phelps, 131 S. Ct. 1207 (2011). Pl.’s Opp’n to ITC
Mot. at 12 (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.
at 13. Snyder, however, does not support a conclusion that SKF 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 1213-14, 20. The case does
not hold that all speech addressing matters of public concern, such as a position taken
in antidumping litigation, must receive a level of judicial scrutiny higher than that applied
in SKF. See Standard Furniture Mfg. Co. v. United States, 36 CIT ___, ___, 823 F.
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Supp. 2d 1327, 1338-39 (2012) (concluding that Snyder did not compel a First
Amendment analysis differing from that which was applied in SKF).
Plaintiff proceeds to bring the court's attention to Sorrell v. IMS Health Inc.,
131 S. Ct. 2653 (2011), as additional authority to invalidate the level of scrutiny applied
to the CDSOA by the Court of Appeals in SKF. Plaintiff argues:
Sorrell establishes that statutes which impose content-based burdens,
including viewpoint-based burdens, are subject to the same strict scrutiny
as those which impose content-based bans. Therefore, consistent with the
Sorrell decision, the CDSOA should be subject to the same heightened
scrutiny that was imposed by the Supreme Court upon a statute that
produced a content-based burden on protected speech. Nan Ya submits
that the CDSOA cannot withstand the heightened level of scrutiny because
the law was not narrowly tailored to serve a compelling government
interest.
Pl.’s Opp'n to ITC Mot. at 13-14.
In a line of recent cases, this Court has rejected the argument that Sorrell
implicitly overturned SKF. See Ashley Furniture Indus., Inc. v. United States, 36 CIT
___, ___, Slip Op. 12-29 at 10-13 (Mar. 6, 2012); NSK Corp. v. United States, 36 CIT
___, ___, 821 F. Supp. 2d 1349, 1356 (2012); Pat Huval Rest. & Oyster Bar, Inc. v.
United States, 36 CIT ___, ___, 823 F. Supp. 2d 1365, 1376 (2012); Standard Furniture
Mfg. Co., 36 CIT ___, ___, 823 F. Supp. 2d at 1340-42; Furniture Brands Int'l v. United
States, 36 CIT ___, ___, Slip Op. 12-20 at 12-13 (Feb. 17, 2012). In those cases we
ruled that nothing in the Supreme Court’s holding in Sorrell requires that constitutional
claims akin to those raised by Plaintiff must survive dismissal under the SKF precedent.
Although reaching opposite First Amendment outcomes, Sorrell and SKF analyze
dissimilar statutes, which vary considerably in the nature and degree of the effect on
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expression and, most significantly, differ in purpose. The Vermont statute at issue in
Sorrell authorized civil remedies against those selling or using certain information that
identified the prescriber of prescription drugs, engaged in content-discrimination, and, in
practical application, also discriminated by viewpoint. Sorrell, 131 S. Ct. at 2660. The
CDSOA does not have as a stated purpose, or even as an implied purpose, the
intentional suppression of expression. SKF, 556 F.3d at 1351-52.
We conclude that Plaintiff's facial constitutional challenges to the CDSOA are
foreclosed by the holding in SKF, and these challenges must be dismissed for failure to
state a claim on which relief can be granted.
2. Plaintiff's First Amendment As-Applied Challenge Must be Dismissed
In Count 2, Plaintiff asserts an as-applied constitutional challenge under the First
Amendment, claiming specifically that the CDSOA discriminates against those, such as
Nan Ya, who did not express a specific viewpoint (support for the antidumping petition),
and is, therefore, an unconstitutional restriction on speech. Sec. Am. Compl. ¶ 46-47.
Nan Ya argues that because of its participation and cooperation in the ITC investigation
in support of the petition, the ITC's denial of ADP status to Nan Ya was impermissibly
based solely on Nan Ya’s expression in the final phase questionnaire, where Nan Ya
took no position with regard to the petition. Pl.’s Opp'n to ITC Mot. at 10-11. Nan Ya
also contends that it “actively promoted the government’s enforcement of the
antidumping laws by assisting in the conduct of the antidumping proceeding and the
Sunset review and at no point took any action, or made any statement in opposition to
the petition.” Id. at 10. In particular, Nan Ya argues that it supported the petition
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through its response to the preliminary phase questionnaire and to the continuation of
the antidumping duty orders in the Sunset review. Id. at 10-11.
Nan Ya submits that the Court of Appeals in SKF did not rule on such facts, and
that should the court’s interpretation of the CDSOA in SKF be applied to the facts in the
instant case, the outcome would be an as-applied violation of the First Amendment. Id.
at 9-10. Nan Ya would thus have us rule that the ITC’s application of the CDSOA
violated the First Amendment to the extent the ITC based its determination that Plaintiff
did not qualify as a potential ADP on Plaintiff’s failing to indicate support of the petition
by letter or questionnaire response. Id.
Plaintiff's argument again misinterprets SKF, 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, in fact, 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, although requiring a non-
petitioner, such as SKF, to express support for the petition in order to acquire ADP
status, met that standard. SKF, 556 F.3d at 1354-55. The Court of Appeals did state,
as Plaintiff highlights, that “[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 “a 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 Mot. at 8. However, those statements were in the context of
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discussing statutory language as an alternative to previous discussion in the opinion on
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 I, 35 CIT at ___, 807 F. Supp. 2d at 1311-
12 (rejecting the argument that SKF modified the meaning of the petition support
requirement).
Plaintiff’s as-applied First Amendment challenges, therefore, are foreclosed by
the holding in SKF. Plaintiff has failed to allege any material facts that would distinguish
these claims from the binding precedent established by that holding, and, therefore,
Nan Ya's as-applied challenge must be dismissed.
3. Plaintiff’s Fifth Amendment Equal Protection
As-Applied Challenges 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 petition in that the petition support requirement, as applied to Nan Ya, was
not rationally related to a legitimate governmental purpose and thereby contravened the
equal protection guarantee of the Fifth Amendment. Sec. Am. Compl. ¶ 53-54. See
also Pl.’s Opp’n to ITC Mot. at 11-12.
Plaintiff has alleged no facts that distinguish its equal protection claims from the
equal protection claim addressed, and rejected, in SKF. The Court of Appeals held that
the petition support requirement of the CDSOA does not abridge the equal protection
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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, 556 F.3d at 1360. SKF 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 Plaintiffs’ as-
applied equal protection claims, which must be dismissed.
4. The Petition Support Requirement Does Not Violate
the Due Process Clause Due to Retroactivity
In Count 6 of the Second Amended Complaint, Plaintiff claims that the CDSOA
petition support requirement impermissibly bases eligibility for CDSOA disbursements
on Plaintiff’s past conduct, thereby creating a retroactive consequence in violation of the
Due Process Clause of the Fifth Amendment. Plaintiff claims that the CDSOA is
retroactive because Plaintiff’s “prior act of answering a domestic producer questionnaire
was given a ‘quality or effect’ which it previously did not have when it was performed.”
Pl.’s Opp’n to ITC Mot. at 15.
This Court has recently ruled on retroactivity claims essentially identical to those
raised by Plaintiff. See New Hampshire Ball Bearing v. United States, 36 CIT ___, ___,
815 F. Supp. 2d 1301, 1306-10 (2012); see also Schaeffler Group USA, Inc. v. United
States, 36 CIT ___, ___, 808 F. Supp. 2d 1358, 1363-64 (2012). We concluded that
“the retroactive reach of the petition support requirement in the CDSOA is justified by a
rational legislative purpose and therefore is not vulnerable to attack on constitutional
due process grounds.” New Hampshire Bearing, 36 CIT at ___, 815 F. Supp. 2d at
1309. We reasoned that “it would not be arbitrary or irrational for Congress to conclude
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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.” Id. (quoting Pension
Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 730-31 (1984)). We
conclude, therefore, that Congress did not violate Plaintiff’s Fifth Amendment due
process rights in basing potential eligibility for CDSOA disbursements on a decision
whether to support the petition that Plaintiff made prior to the enactment of the CDSOA.
Based on this conclusion, we will dismiss the due process claim in Count 6 of the
Second Amended Complaint for failure to state a claim upon which relief can be
granted.
IV. CONCLUSION
For the foregoing reasons, Defendants’ motions to dismiss Plaintiff’s Second
Amended Complaint for failure to state a claim are hereby granted.6 Judgment
dismissing this action will be entered accordingly.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: July 12, 2012
New York, New York
6
Because we are dismissing Plaintiff’s Second Amended Complaint for failure to state a
claim, we will deny Plaintiff’s motion to complete and supplement the administrative
record, ECF No. 38, as moot.