Ethan Allen Global, Inc. v. United States , 816 F. Supp. 2d 1330 ( 2012 )

Slip Op. 12-11
UNITED STATES COURT OF INTERNATIONAL TRADE
ETHAN ALLEN GLOBAL, INC. and
ETHAN ALLEN OPERATIONS, INC.,
Plaintiffs,
v.
UNITED STATES,
Before: Gregory W. Carman, Judge
Defendants, Timothy C. Stanceu, Judge
Leo M. Gordon, Judge
and
Court No. 08-00302
KINCAID FURNITURE CO., INC., L & J.G.
STICKLEY, INC., SANDBERG FURNITURE
MANUFACTURING COMPANY, INC.,
STANLEY FURNITURE CO., INC.,
T. COPELAND AND SONS, INC., and
VAUGHAN-BASSETT FURNITURE
COMPANY, INC.,
Defendant-Intervenors.
OPINION
[Dismissing the action for failure to state a claim upon which relief can be granted]
Dated: January 20, 2012
Craig A. Lewis and Jonathan T. Stoel, Hogan Lovells US LLP, of Washington, DC, for
plaintiffs.
Jessica R. Toplin, David S. Silverbrand, and Courtney S. McNamara, Trial Attorneys,
Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC,
for defendant United States. With them on the briefs were Tony West, Assistant Attorney
General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of
counsel on the briefs were Andrew G. Jones and Joseph Barbato, Office of Assistant Chief
Counsel, U.S. Customs and Border Protection, of New York, NY.
Court No. 08-00302 Page 2
Patrick V. Gallagher, Jr., Attorney Advisor, Office of the General Counsel, U.S.
International Trade Commission, of Washington, DC, for defendant U.S. International Trade
Commission. With him on the briefs were James M. Lyons, General Counsel, and Neal J.
Reynolds, Assistant General Counsel.
Joseph W. Dorn, Jeffrey M. Telep, and Steven R. Keener, King & Spalding LLP, of
Washington, DC, for defendant-intervenors. With them on the briefs was Taryn K. Williams. Of
counsel on the briefs was Richard H. Fallon, of Cambridge, MA.
Stanceu, 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”), that denied plaintiffs Ethan Allen Global, Inc. and Ethan Allen Operations, Inc.
(collectively, “Ethan Allen”) certain monetary benefits under the Continued Dumping and
Subsidy Offset Act of 2000 (“CDSOA” or “Byrd Amendment”), Pub. L. No. 106-387,
§§ 1001-03, 114 Stat. 1549, 1549A-72-75 (codified at 19 U.S.C. § 1675c (2000)),1 repealed by
Deficit Reduction Act of 2005, Pub. L. 109-171, § 7601(a), 120 Stat. 4, 154 (Feb. 8, 2006;
effective Oct. 1, 2007). ITC denied Ethan Allen the status of an “affected domestic producer”
(“ADP”), which potentially would have qualified Ethan Allen for distributions of antidumping
duties collected under an antidumping duty order on imports of wooden bedroom furniture from
the People’s Republic of China (“China” or the “PRC”). Notice of Amended Final
Determination of Sales at Less Than Fair Value & Antidumping Duty Order: Wooden Bedroom
Furniture From the People’s Republic of China, 70 Fed. Reg. 329 (Jan. 4, 2005) (“Antidumping
Duty Order”). In the absence of an ITC designation of ADP status, Customs made no CDSOA
distributions to Ethan Allen. Plaintiffs bring facial and as-applied constitutional challenges to
1
Citations are to the codified version of the Continued Dumping and Subsidy Offset Act
(“CDSOA”), 19 U.S.C. § 1675c (2000). All other citations to the United States Code are to the
2006 edition.
Court No. 08-00302 Page 3
the CDSOA and claim, further, that the various actions by the two agencies violated the
Administrative Procedure Act, 5 U.S.C. §§ 701-706 (“APA”). First Amended Compl. ¶¶ 33-62
(Feb. 1, 2011), ECF No. 20.
Before the court are three motions brought under USCIT Rule 12(b)(5) to dismiss for
failure to state a claim upon which relief can be granted. Defendant-intervenors Kincaid
Furniture Co., Inc., L & J.G. Stickley, Inc., Sandberg Furniture Manufacturing Company, Inc.,
Stanley Furniture Co., Inc., T. Copeland and Sons, Inc., and Vaughan-Bassett Furniture
Company, Inc. moved under Rule 12(b)(5) on February 23, 2011. Def.-intervenors’ Mot. to
Dismiss (Feb. 23, 2011), ECF No. 34 (“Def.-intervenors’ Mot.”). Defendant ITC so moved on
May 2, 2011, and Customs followed with its motion on May 4, 2011. Def. U.S. Int’l Trade
Comm’n’s Mot. to Dismiss for Failure to State a Claim (May 2, 2011), ECF No. 60 (“ITC’s
Mot.”); Def. U.S. Customs & Border Protection’s Mot. for J. on the Pleadings (May 4, 2011),
ECF No. 61 (“Customs’ Mot.”).2 The court determines that relief is not available on any of
plaintiffs’ claims and will enter judgment dismissing this action.
I. BACKGROUND
During a 2003 ITC investigation to determine whether imports of wooden bedroom
furniture from China were causing or threatening to cause material injury to the domestic
industry, Ethan Allen responded to a “U.S. producers’ questionnaire” from the ITC, indicating
thereon that it “took no position on the petition.” First Amended Compl. ¶ 23; Initiation of
2
U.S. Customs & Border Protection (“CBP” or “Customs”) labels its motion as one for
judgment on the pleadings (ostensibly under USCIT Rule 12(c)) but subsequently refers to it as a
motion to dismiss under USCIT Rule 12(b)(5). Def. U.S. Customs & Border Protection’s Mot.
for J. on the Pleadings (May 4, 2011), ECF No. 61. The court hereinafter refers to this motion as
a motion to dismiss for failure to state a claim upon which relief can be granted.
Court No. 08-00302 Page 4
Antidumping Duty Investigation: Wooden Bedroom Furniture from the People’s Republic of
China, 68 Fed. Reg. 70,228, 70,231 (Dec. 17, 2003). Based on an affirmative ITC injury
determination, the International Trade Administration, U.S. Department of Commerce
(“Commerce” or the “Department”) in early 2005 issued the antidumping duty order on imports
of wooden bedroom furniture from China. Antidumping Duty Order, 70 Fed. Reg. at 329; First
Amended Compl. ¶ 26. Determining that Ethan Allen had not supported the petition, the ITC
declined to designate Ethan Allen an ADP for Fiscal Years 2006 through 2010, both in its lists of
ADPs and, subsequently, in response to Ethan Allen’s written requests. First Amended Compl.
¶¶ 27-32; Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers,
71 Fed. Reg. 31,336, 31,375-76 (June 1, 2006); Distribution of Continued Dumping & Subsidy
Offset to Affected Domestic Producers, 72 Fed. Reg. 29,582, 29,622-23 (May 29, 2007);
Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 73 Fed.
Reg. 31,196, 31,236-37 (May 30, 2008); Distribution of Continued Dumping & Subsidy Offset to
Affected Domestic Producers, 74 Fed. Reg. 25,814, 25,855-56 (May 29, 2009); Distribution of
Continued Dumping & Subsidy Offset to Affected Domestic Producers, 75 Fed. Reg. 30,530,
30,571-72 (June 1, 2010). Despite Ethan Allen’s filing CDSOA certifications with Customs for
the various fiscal years to request CDSOA disbursements, Customs has made no distributions to
Ethan Allen. First Amended Compl. ¶¶ 30-32.
On September 12, 2008, Ethan Allen commenced this action to challenge ITC’s refusal to
designate Ethan Allen as an ADP and the refusal of Customs to include Ethan Allen in the
CDSOA distributions for Fiscal Years 2006 through 2008 as well as future distributions. Compl.
¶ 1 (Sept. 12, 2008), ECF No. 4. The court then issued a stay of this action pending final
Court No. 08-00302 Page 5
resolution of other litigation raising the same or similar issues. Order (Oct. 7, 2008), ECF No. 10
(staying action “until final resolution of Pat Huval Restaurant & Oyster Bar, Inc. v. United States
International Trade Commission, Consol. Court No. 06-00290, 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), which addressed questions also present in this case, the court issued an order
directing plaintiffs to show cause why this case should not be dismissed and lifted the stay for the
purposes of allowing any brief, response, or reply described in that order. Order (Jan. 3, 2011),
ECF No. 17. On February 1, 2011, plaintiffs responded to the court’s order and moved for a
partial lifting of the stay to allow amendment of the complaint to add factual allegations
pertaining to two additional fiscal years, 2009 and 2010. Resp. to Order to Show Cause
(Feb. 1, 2011), ECF No. 18 (“Pls.’ Resp. to Order”); Pls.’ Mot. for Partial Lifting of Stay
(Feb. 1, 2011), ECF No. 19 (“Pls.’ Mot.”).
The court lifted the stay for all purposes on February 9, 2011. Order (Feb. 9, 2011), ECF
No. 28. A motion under USCIT Rule 12(b)(5) for failure to state a claim upon which relief can
be granted was filed by defendant-intervenors on February 23, 2011, by ITC on May 2, 2011, and
by Customs on May 4, 2011. Def.-Intervenors’ Mot; ITC’s Mot.; Customs’ Mot. Briefing on
these motions is now complete.3
3
CBP has not made any distributions affecting this case and indicates that it will refrain
from doing so until January 31, 2012 at the earliest. Def. U.S. Customs & Border Protection’s
Resp. to the Ct.’s Feb. 14, 2011 Request (Feb. 28, 2011), ECF No. 37.
Court No. 08-00302 Page 6
II. DISCUSSION
The court exercises jurisdiction over this action according to section 201 of the Customs
Courts Act, 28 U.S.C. § 1581(i)(4), which grants jurisdiction over civil actions arising from laws
of the United States, such as the CDSOA, providing for administration with respect to duties,
such as antidumping duties, on the importation of merchandise for reasons other than the raising
of revenue. See Furniture Brands Int’l v. United States, 35 CIT __, __, Slip Op. 11-132, at 9-15
(Oct. 20, 2011); New Hampshire Ball Bearing, Inc. v. United States, 36 CIT __, __, Slip Op.
12-02, at 4 (Jan. 3, 2012); Schaeffler Group USA, Inc. v. United States, 36 CIT __, __, Slip Op.
12-08, at 5 (Jan. 17, 2012).
We address below the claims stated in Ethan Allen’s First Amended Complaint.4 In
ruling on motions to dismiss made under USCIT Rule 12(b)(5), we dismiss a complaint that does
not “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). For the reasons set forth below, we conclude that each of
4
In their motion for a partial lifting of the stay on February 1, 2011, plaintiffs asserted a
right to amend their complaint as a matter of course because “[d]efendant has not yet filed its
answer nor has it filed a motion to dismiss under Rule 12(b), (e), or (f).” Mot. For Partial Lifting
of Stay 3-4 (Feb.1, 2011), ECF No. 19. Under USCIT Rule 15(a) as amended effective
January 1, 2012, “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.” USCIT R. 15(a).
Prior to this amendment, a party could amend its pleading once as a matter of course before being
served with a responsive pleading. Because plaintiffs filed their notice of an amended complaint
only one month after the effective date of the rule change, and because the other parties to this
case 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 (“These 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. 08-00302 Page 7
the claims in Plaintiffs’ First Amended Complaint must be dismissed for failure to state a claim
upon which relief can be granted.
The CDSOA amended the Tariff Act of 1930 (“Tariff Act”) to provide for the distribution
of funds from assessed antidumping and countervailing duties to persons with ADP status, which
is limited to petitioners, and interested parties in support of petitions, with respect to which
antidumping duty and countervailing duty orders are entered.5 19 U.S.C. § 1675c(a)-(d).6 The
statute directed the ITC to forward to Customs, within sixty days after an antidumping or
countervailing duty order is issued, lists 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.”7 Id. § 1675c(d)(1). The CDSOA directed Customs to publish in the
5
The CDSOA provided that:
The term “affected domestic producer” means any manufacturer, producer, farmer,
rancher or worker representative (including associations of such persons) that
(A) was a petitioner or interested party in support of the petition with respect to
which an antidumping duty order, a finding under the Antidumping Act of 1921, or a
countervailing duty order has been entered, and
(B) remains in operation.
19 U.S.C. § 1675c(b)(1) (emphasis added).
6
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).
7
Additionally, the CDSOA directed the ITC to forward to Customs a list identifying
affected domestic producers “within 60 days after the effective date of this section in the case of
orders or findings in effect on January 1, 1999 . . . .” 19 U.S.C. § 1675c(d)(1). The antidumping
(continued...)
Court No. 08-00302 Page 8
Federal Register lists of ADPs potentially eligible for distributions of a “continuing dumping and
subsidy offset” that are based on the lists obtained from the Commission. Id. § 1675c(d)(2). The
CDSOA also directed Customs to segregate antidumping and countervailing duties according to
the relevant antidumping or countervailing duty order, to maintain these duties in special
accounts, and to distribute to an ADP annually, as reimbursement for incurred qualifying
expenditures, a ratable share of the funds (including all interest earned) from duties assessed on a
specific unfairly traded product that were received in the preceding fiscal year. Id.
§ 1675c(d)(3), (e).
In February 2009, approximately five months after plaintiffs filed suit on their original
complaint, the Court of Appeals decided SKF, upholding the CDSOA against constitutional
challenges brought on First Amendment and Fifth Amendment equal protection grounds.
556 F.3d at 1360. 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 petition support
requirement of the CDSOA unconstitutional on Fifth Amendment equal protection grounds.
In Counts I and II of the amended complaint, plaintiffs challenge the “in support of the
petition” requirement of the CDSOA (“petition support requirement”), both facially and as
applied to Ethan Allen, on First Amendment grounds. First Amended Compl. ¶¶ 33-46. In
Counts III and IV, plaintiffs challenge the petition support requirement, both facially and as
applied to Ethan Allen, on Fifth Amendment equal protection grounds. Id. ¶¶ 47-58. Finally, in
Count V, plaintiffs claim that defendants’ actions violate the APA. Id. ¶¶ 59-62.
7
(...continued)
duty order at issue in this case was not in effect on that date.
Court No. 08-00302 Page 9
A. Plaintiffs’ Facial Constitutional Challenges Are Foreclosed by Court of Appeals Precedent
In Count II of the First Amended Complaint, plaintiffs bring various facial challenges to
the CDSOA under the First Amendment. Id. ¶¶ 40-46. They ground these facial challenges in
the First Amendment guarantees of freedom of speech and the ability to petition for redress of
grievances, id. ¶ 41, and claim specifically that the CDSOA engages in impermissible viewpoint
discrimination, conditioning a government benefit on the content of political speech, i.e.,
expression of support for an antidumping petition, id. ¶ 42. They claim, further, that the CDSOA
is overbroad and not narrowly tailored to achieve a compelling government objective, id. ¶ 43,
imposes a content-based restriction, and creates a designated public forum for political speech,
then imposing its content-based restriction on that speech, all in violation of the First
Amendment, id. ¶¶ 44-45.
Count IV of the First Amended Complaint bases a facial challenge to the CDSOA on the
equal protection guarantee of the Fifth Amendment. Id. ¶¶ 53-58. In brief summary, plaintiffs
claim that the CDSOA creates a classification infringing on Ethan Allen’s free speech rights that
is not narrowly tailored to a compelling government objective, id. ¶ 54, and creates an arbitrary
and restrictive classification consisting of domestic producers that supported a petition, thereby
discriminating between similarly-situated domestic producers without a rational basis and
without serving a legitimate government purpose, id. ¶¶ 55-56.
SKF held broadly that the CDSOA is not unconstitutional under the First Amendment and
does not abridge the Fifth Amendment’s equal protection guarantee. 556 F.3d at 1360 (“[T]he
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
Court No. 08-00302 Page 10
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.”). Relief on plaintiffs’ claims that the petition
support requirement is facially invalid under the First Amendment and under the Fifth
Amendment equal protection guarantee is foreclosed by this precedent.
B. Plaintiffs’ As-Applied Constitutional Challenges Also Must Be Dismissed
In Count I of the First Amended Complaint, plaintiffs bring various as-applied challenges
to the CDSOA under the First Amendment. First Amended Compl. ¶¶ 33-39. They ground their
as-applied challenges in the First Amendment guarantees of freedom of speech and the ability to
petition for redress of grievances, id. ¶ 34, and claim specifically that the CDSOA discriminates
against those, such as Ethan Allen, who did not express support for the antidumping petition, id.
¶ 35. They claim, further, that such an application of the CDSOA is overbroad and not narrowly
tailored to achieve a compelling government objective, id. ¶ 36. Plaintiffs claim, further, that the
CDSOA as applied to Ethan Allen impermissibly compels speech by requiring manufacturers
such as plaintiffs to articulate support for a specific policy, id. ¶ 37, a content-based restriction,
and creates a designated public form for political speech, which is subject to a content-based
restriction, id. ¶ 38.
Count III of the First Amended Complaint brings an as-applied challenge to the CDSOA
that plaintiffs base on the equal protection guarantee of the Fifth Amendment. Id. ¶¶ 47-52.
Specifically, plaintiffs claim that the application of the CDSOA to Ethan Allen and others who
did not support a petition creates a classification infringing on Ethan Allen’s free speech rights
Court No. 08-00302 Page 11
that is not narrowly tailored to a compelling government objective. Id. ¶ 48. They claim that the
CDSOA creates an arbitrary and restrictive classification consisting of those domestic producers
that supported a petition, thereby discriminating between similarly-situated domestic producers
without a rational basis and without serving a legitimate government purpose. Id. ¶¶ 49-50.
In opposing dismissal, plaintiffs attempt to distinguish their case from SKF by arguing
that “SKF actively opposed the proceeding in its case; Ethan Allen did not.” Resp. in Opp’n to
Defs.’ Mot. to Dismiss 12, 15 (Jun. 6, 2011), ECF No. 65 (“Pls.’ June Opp’n”). Plaintiffs,
however, fail to plead facts that would bring their as-applied claims outside of the holding in
SKF, in which the Court of Appeals held that the CDSOA did not violate constitutional First
Amendment or equal protection principles when applied to plaintiff SKF USA, Inc. (“SKF”),
which, in its questionnaire response to the ITC, indicated opposition to the petition at issue in
that case. In imposing the petition support requirement as a condition for the receipt of CDSOA
distributions, the CDSOA did not distinguish between a party who opposed an antidumping or
countervailing duty petition and a party who simply declined to take a position in support of such
a petition. See 19 U.S.C. § 1675c(b)(1)(A), (d)(1). The Court of Appeals, rejecting SKF’s First
Amendment and equal protection challenges to the CDSOA, reached a broad holding in SKF that
did not turn on any such distinction. SKF, 556 F.3d at 1360. The reasoning supporting that
holding is equally broad. The Court of Appeals analogized that “[a]t best, the role of parties
opposing (or not supporting) the petition in responding to questionnaires is similar to the role of
opposing or neutral parties in litigation who must reluctantly respond to interrogatories or other
discovery,” and that it was “rational for Congress to conclude that those who did not support the
petition should not be rewarded.” Id. at 1359. It is, therefore, unavailing for plaintiffs to claim
Court No. 08-00302 Page 12
that they are differently situated than SKF because they “[Took] No Position” rather than
“[O]pposed” the petition, as SKF did. Resp. in Opp’n to Def.-intervenors’ Mot. to Dismiss
10-11, 15-16 (April 22, 2011), ECF No. 58 (“Pls.’ April Opp’n”); Pls.’ June Opp’n 9, 12, 15.
In support of their as-applied First Amendment challenge to the CDSOA, plaintiffs cite
three recent U.S. Supreme Court decisions, Snyder v. Phelps, 131 S. Ct. 1207 (2011), Citizens
United v. Federal Election Comm’n, 130 S. Ct. 876 (2010), and United States v. Stevens, 130 S.
Ct. 1577 (2010). They consider these cases to “cast significant doubt on whether the approach
adopted by the Federal Circuit in deciding the First Amendment issues presented in SKF can be
applied to the Ethan-Allen specific facts at issue in this litigation,” arguing that “the specific,
different facts alleged by Ethan Allen mandate a reconsideration of the SKF court’s analysis and
a stricter level of scrutiny than was applied in that case.” Pls.’ June Opp’n 18-25; Pls.’ April
Opp’n 13-14. Ethan Allen views these three cases as undermining “the Federal Circuit’s analysis
under the Central Hudson test,” which applied “an intermediate level of scrutiny” that plaintiffs
view to be no longer appropriate for the CDSOA as applied to Ethan Allen. Pls.’ June Opp’n 19
(citing Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980)).
We reject this argument, concluding that each of the three Supreme Court decisions upon which
plaintiffs rely neither invalidates the holding of SKF nor otherwise requires us to apply a strict
scrutiny analysis in the case before us.
In Snyder v. Phelps, the Supreme Court ruled that members of the Westboro Baptist
Church who picketed at public sites near the funeral of a member of the U.S. Marine Corps killed
in the line of duty in Iraq could not be held liable, in the particular circumstances of that case, on
state-law tort claims alleging intentional infliction of emotional distress, intrusion upon
Court No. 08-00302 Page 13
seclusion, and civil conspiracy. 131 S.Ct. at 1213-14, 1220. Concluding that the speech in
question, signs displaying various controversial messages condemning the United States and its
military, was entitled to “‘special protection’ under the First Amendment,” id. at 1219, the
Supreme Court held that the jury verdict holding the Westboro picketers liable on the tort claims
must be set aside. The Court emphasized as essential to its holding that the Westboro picketers
carried signs displaying messages that, for the most part, constituted speech addressing matters of
public concern, id. at 1216-17, and conducted their picketing peacefully, and without interfering
with the funeral, at each of three locations the Supreme Court considered to be a public forum,
id. at 1218-19.
Citing Snyder v. Phelps, plaintiffs argue that “[c]onsistent with the Supreme Court’s
recent clear directive, voicing a position on a government antidumping investigation (or, in Ethan
Allen’s case, deciding not to take a position) constitutes speech on a ‘matter of public concern,’
subject to heightened First Amendment protection.” Pls.’s June Opp’n 20. Snyder did not
address the question of whether the type of speech involved in this case constituted speech on a
matter of public concern. But even were we to accept plaintiffs’ premise that the speech
involved here was on a matter of public concern, we still would conclude that Snyder v. Phelps
resolved a fundamentally different First Amendment question than those presented by this case
and by SKF. Here, plaintiffs are not asserting First Amendment rights as a defense against civil
liability for an award of monetary damages. The “burden” the CDSOA placed on Ethan Allen’s
speech the ineligibility to receive potential CDSOA distributions does not rise to a level
commensurate with the burden the Supreme Court precluded by setting aside the jury verdict
imposing tort liability on the Westboro picketers. In speaking to a First Amendment issue far
Court No. 08-00302 Page 14
afield of those presented here, Snyder v. Phelps does not establish a principle of First
Amendment law requiring us to invalidate the CDSOA petition support requirement as applied to
Ethan Allen.
Citizens United v. Federal Election Comm’n struck down on First Amendment grounds a
federal election law imposing an “outright ban, backed by criminal sanctions” on independent
expenditures by a “corporation,” including “nonprofit advocacy corporations” or “unions,”
during the 30-day period preceding a primary election or the 60-day period preceding a general
election, for an “electioneering communication” or for advocacy of the election or defeat of a
candidate. 130 S. Ct. at 886-87, 897. Stating that “political speech must prevail against laws
that would suppress it, whether by design or inadvertence,” the Supreme Court concluded that
“[l]aws that burden political speech are ‘subject to strict scrutiny,’ which requires the
Government to prove that the restriction ‘furthers a compelling interest and is narrowly tailored
to achieve that interest.’” Id. at 898 (citing Federal Election Comm’n v. Wisconsin Right to Life,
Inc., 551 U.S. 449, 464 (2007)). Plaintiffs argue that “the ITC’s conditioning of a ‘reward’ (i.e.,
CDSOA distributions) on a particular expression of an opinion effectively suppresses a category
of speech entitled to heightened protection under Snyder and Citizens United.” Pls.’ June Opp’n
21. “This is because non-political corporate speech is entitled to strict scrutiny when the speech
is not merely related to a commercial transaction but is an independent assertion of a particular
viewpoint on a matter of public importance.” Id. at 21-22. According to plaintiffs, “Defendants’
actions suppressed Ethan Allen’s corporate right to express itself on matters concerning public
affairs and its right to petition the government.” Id.
Court No. 08-00302 Page 15
The Supreme Court’s admonishments in Citizens United that “political speech must
prevail against laws that would suppress it, whether by design or inadvertence” and that “[l]aws
that burden political speech are ‘subject to strict scrutiny,’” 130 S. Ct. at 898, should not be
applied indiscriminately to any statute raising First Amendment concerns, and we decline to do
so here. The statute struck down in Citizens United banned political speech and subjected that
speech to criminal sanction, and the Court’s decision to apply strict scrutiny can only be viewed
properly in that context. The Court of Appeals recognized in SKF that the CDSOA “does not
prohibit particular speech,” that “statutes prohibiting or penalizing speech are rarely sustained,”
and that “cases addressing the constitutionality of such statutes are of little assistance in
determining the constitutionality of the far more limited provisions of the Byrd Amendment.”
556 F.3d. at 1350. As the Court of Appeals reasoned, “[i]n considering limited provisions that
do not ban speech entirely, the purpose of the statute is important.” Id. The Court concluded that
“[n]either the background of the statute, nor its articulated purpose, nor the sparse legislative
history supports a conclusion that the purpose of the Byrd Amendment was to suppress
expression.” Id. at 1351. Accordingly, we reject plaintiffs’ arguments to the effect that the
holdings in Snyder and Citizens United implicitly invalidated the First Amendment analysis the
Court of Appeals employed in SKF.
In United States v. Stevens, the Supreme Court struck down as “substantially overbroad,
and therefore invalid under the First Amendment,” a federal statute that criminalized the
commercial creation, sale, or possession of depictions of “animal cruelty,” which the statute
defined as “conduct in which a living animal is intentionally maimed, mutilated, tortured,
wounded, or killed, if such conduct is illegal under Federal law or the law of the State in which
Court No. 08-00302 Page 16
the creation, sale, or possession takes place.” 130 S. Ct. at 1582 n.1, 1592. The Court rejected
the government’s argument that the statute, which contained an “exceptions clause” exempting
depictions with “serious religious, political, scientific, educational, journalistic, historical, or
artistic value,” id. at 1583, is “narrowly limited to specific types of ‘extreme’ material,” id. at
1587. According to plaintiffs, Stevens “further supports Ethan Allen’s position that the ITC’s
application of the CDSOA to Ethan Allen’s particular facts (i.e., a domestic producer that
submitted completed questionnaires to the ITC and checked the ‘take no position’ box) is
overbroad and thus unconstitutional.” Pls.’ June Opp’n 22. Plaintiffs submit that the petition
support requirement as interpreted by defendants “restricts Ethan Allen’s right to freedom of
speech without furthering the government’s interest” and “extends beyond the stated purpose of
excluding those who did not support the petition and discriminates against active supporters like
Ethan Allen who adopted a neutral viewpoint in its ITC questionnaires.” Id. at 23.
Unlike the statute invalidated by Stevens, the CDSOA does not criminalize or otherwise
prohibit a broad category of protected speech. The First Amendment analysis in Stevens,
therefore, is not applicable to the First Amendment issues raised by this case. The Court of
Appeals upheld the petition support requirement according to the test of Central Hudson,
447 U.S. at 566, under which regulation of commercial speech must directly advance a
substantial governmental interest and not be “more extensive than necessary” to serve that
interest. SKF, 556 F.3d at 1355. The Court of Appeals concluded that the CDSOA was not
overly broad when judged according to the “not more extensive than necessary” criterion. Id. at
1357-60. We conclude that nothing in the holding in Stevens invalidates the holding of SKF.
Court No. 08-00302 Page 17
In summary, we consider SKF binding on us, and controlling in this case, notwithstanding
the Supreme Court’s holdings in Snyder, Citizens United, and Stevens. For this reason and the
other reasons discussed above, we conclude that plaintiffs’ as-applied First Amendment and
equal protection claims must be dismissed under USCIT Rule 12(b)(5).
C. No Relief Can Be Granted on Plaintiffs’ APA Claim
Count V of the First Amended Complaint claims under the APA that defendants’ actions
were “unlawful, arbitrary, capricious, an abuse of agency discretion, not supported by substantial
evidence, and contrary to Ethan Allen’s constitutional right to due process.” First Amended
Compl. ¶ 60. Plaintiffs allege that defendants “have inappropriately treated similarly situated
domestic producers differently, without any rational basis for doing so” and “have limited the
definition of ADP to include only those domestic producers who supported the Petition by their
conduct and expressed support for the petition, while excluding from this definition those
domestic producer[s] who likewise supported the Petition by their conduct but did not express
support for the petition.” Id. ¶ 61. Relying on certain language in SKF, plaintiffs claim that
defendants’ interpretation of the ADP definition “conflicts with the purpose of the CDSOA,
which is to reward domestic producers who support the Petition through their conduct.” Id.
Plaintiffs have based their APA claim on an impermissible construction of the CDSOA.
The CDSOA limits ADP status to “a petitioner or interested party in support of the petition,”
19 U.S.C. § 1675c(b)(1), and further provides, so that Customs may make distributions, that the
ITC is to inform Customs of “persons that indicate support of the petition by letter or through
questionnaire response,” id. § 1675c(d)(1). Plaintiffs do not allege that they indicated their
support of the wooden bedroom furniture petition, either by letter or through questionnaire
Court No. 08-00302 Page 18
response, and admit that, Ethan Allen, when asked by the ITC petition whether it supported that
petition, took no position. First Amended Compl. ¶ 23 (“Although Ethan Allen is a domestic
producer of [wooden bedroom furniture], Ethan Allen took no position on the petition but
participated fully in the investigation process by returning the completed questionnaire and
making revisions thereto, as requested by the ITC.”). On the facts as pled in the complaint, we
conclude that the ITC did not act unlawfully in denying Ethan Allen status as an ADP. Nor did
Customs unlawfully refuse to pay Ethan Allen CDSOA distributions. Contrary to plaintiffs’
claim, defendants did not “inappropriately” treat “similarly situated domestic producers
differently, without any rational basis for doing so,” Id. ¶ 61. The CDSOA charged the ITC with
determining the identity of the parties who supported the petition based on the test set forth in
19 U.S.C. § 1675c(b)(1) and (d)(1). With a “rational basis” grounded in the plain meaning of the
statute, ITC applied the statutory test in determining that Ethan Allen was not among the parties
who qualified as ADPs. Defendants’ determinations, therefore, comported with the APA.
Plaintiffs allege no facts supporting a conclusion that either agency failed to accord Ethan Allen
fundamental fairness in making those determinations, and plaintiffs’ claim under the APA that
the agencies violated Ethan Allen’s constitutional due process rights is, accordingly, meritless.
In support of their APA claim, plaintiffs argue that “the Federal Circuit in SKF
enunciated a saving construction with respect to the CDSOA support provision under which
benefits are awarded for ‘actions (litigation support),’ not viewpoint expression.” Pls.’ June
Opp’n 24 (citing SKF, 556 F.3d at 1353) (stating that the purpose of the petition support
requirement is to “reward injured parties who assisted government enforcement of the
Court No. 08-00302 Page 19
antidumping laws by initiating or supporting antidumping proceedings”). Plaintiffs maintain that
denial by the ITC of ADP status for Ethan Allen based on Ethan Allen’s having expressed no
position on the petition in the ITC’s questionnaire is “inconsistent with the statutory construction
identified by the Federal Circuit in SKF.” Id. at 24-25.
Plaintiffs misconstrue the holding in SKF, which the Court of Appeals did not base on a
limiting construction of the CDSOA. See SKF, 556 F.3d at 1353. In analyzing the CDSOA
under the First Amendment, the Court of Appeals construed the CDSOA such that “the purpose
of the Byrd Amendment’s limitation of eligible recipients was to reward injured parties who
assisted government enforcement of the antidumping laws by initiating or supporting
antidumping proceedings.” Id. at 1352. When later alluding to a “limiting construction” that
“rewards actions (litigation support) rather than the expression of particular views,” the Court of
Appeals was speaking only hypothetically and in dicta. Id. at 1353 (“Finally, if we were to view
this case as involving the construction of statutory language rather than an exercise in
ascertaining statutory purpose, the result would be the same.”). But the Court of Appeals held,
broadly, that the CDSOA “is valid under the First Amendment” and “is also clearly not violative
of equal protection under the rational basis standard.” Id. at 1360. The Court of Appeals did not
adopt a limiting construction under which the CDSOA, in order to conform to the First
Amendment, must be construed to permit distributions to a party who participated in the ITC’s
investigation but did not “indicate support of the petition by letter or through questionnaire
response.” 19 U.S.C. § 1675c(d)(1). As we pointed out previously, the Court of Appeals stated
that it was “rational for Congress to conclude that those who did not support the petition should
Court No. 08-00302 Page 20
not be rewarded,” and it did so in the context of discussing “the role of parties opposing (or not
supporting) the petition.” Id. at 1359.
Plaintiffs also cite legislative history of the Byrd Amendment to support the proposition
that Congress intended to effectuate a broad remedy for injurious foreign dumping and thus did
not intend to benefit only those who supported petitions. Pls.’ Jun Opp’n 3-6. The legislative
history plaintiffs cite, which speaks of injured domestic producers and industries in the
aggregate, does not support a construction disregarding the language of the statute itself,
19 U.S.C. § 1675c(b)(1), (d)(1), which determines ADP eligibility on an individual, not an
industry, basis and limits eligibility to petitioners and those in support of a petition.
For the reasons discussed in the foregoing, we conclude that plaintiffs’ claim arising
under the APA must be dismissed.
III. CONCLUSION
Plaintiffs’ facial and as-applied constitutional claims are precluded by binding precedent,
and plaintiffs’ APA claim rests on an impermissible construction of the CDSOA. All claims in
this action must be dismissed as they are not supported by “sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 129 S. Ct. at 1949 (quoting
Twombly, 550 U.S. at 570). Plaintiffs already have availed themselves of the opportunity to
amend their complaint. We conclude that it is appropriate to enter judgment dismissing this
action.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge
Dated: January 20, 2012
New York, New York