M S Int'l v. United States , 2020 CIT 12 ( 2020 )

Slip Op. 20-12
UNITED STATES COURT OF INTERNATIONAL TRADE
M S INTERNATIONAL, INC.,
Plaintiff,
v. Before: Leo M. Gordon, Judge
UNITED STATES of AMERICA,
Consol. Court No. 19-00132
UNITED STATES DEPARTMENT of
COMMERCE, and SECRETARY
WILBUR L. ROSS, JR.,
Defendants,
and
CAMBRIA COMPANY LLC,
Defendant-Intervenor.
OPINION and ORDER
[Motions to dismiss for lack of subject matter jurisdiction granted.]
Dated: January 30, 2020
Jonathan T. Stoel, Jared R. Wessel, and Nicholas R. Sparks, Hogan Lovells US LLP,
of Washington, D.C., for Plaintiff M S International Inc.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, D.C., for Defendants United States,
U.S. Department of Commerce, and Wilbur L. Ross, Jr., Secretary of Commerce.
With him on the briefs were Joseph H. Hunt, Assistant Attorney General, Jeanne E.
Davidson, Director, and Tara K. Hogan, Assistant Director. Of counsel was Mykhaylo
Gryzlov, Senior Counsel, U.S. Department of Commerce, Office of the Chief Counsel for
Trade Enforcement and Compliance, of Washington, D.C.
Roger B. Schagrin, Luke A. Meisner, Elizabeth J. Drake, and Kelsey M. Rule, Schagrin
Associates, of Washington, D.C., for Defendant-Intervenor Cambria Company LLC.
Consol. Court No. 19-00132 Page 2
Gordon, Judge: In this action, M S International, Inc. (“Plaintiff” or “MSI”)
challenges the U.S. Department of Commerce’s (“Commerce”) industry support
determinations made as part of the initiation of the antidumping (“AD”) and countervailing
duty (“CVD”) investigations (“Investigations”) regarding quartz surface products (“QSPs”)
from India and the Republic of Turkey. See Certain Quartz Surface Products from India
and the Republic of Turkey, 84 Fed. Reg. 25,529 (Dep’t of Commerce June 3, 2019)
(notice of India and Turkey AD investigation initiation) (“AD Notice”); Certain Quartz
Products from India and the Republic of Turkey, 84 Fed. Reg. 25,524 (Dep’t of Commerce
June 3, 2019) (notice of India and Turkey CVD investigation initiation) (“CVD Notice”).
MSI asserts that the court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(i).
Defendants move pursuant to USCIT Rule 12(b)(1) to dismiss this action for lack
of subject matter jurisdiction. Defendant-Intervenor, Cambria Company LLC (“Cambria”),
also moves to dismiss this action pursuant to USCIT Rule 12(b)(1) for lack of subject
matter jurisdiction, and alternatively pursuant to USCIT Rule 12(b)(6) for failure to state a
claim. See Defs.’ Mot. to Dismiss, ECF No. 22 (“Defs.’ Mot.”); Def.-Intervenor’s Mot. to
Dismiss Pl.’s Compl., ECF No. 23 (“Cambria’s Mot.”); see also Pl.’s Resp. to Defs.’ and
Def.-Intervenor’s Motions to Dismiss, ECF No. 33 (“Pl.’s Resp.”); Def.-Intervenor’s Reply
in Supp. of its Mot. to Dismiss, ECF No. 37 (“Cambria’s Reply”); Defs.’ Reply in Supp. of
Mot. to Dismiss, ECF No. 38 (“Defs.’ Reply”). Lastly, Cambria moves to dismiss because
MSI’s claim is not ripe for judicial review. See Cambria’s Mot. For the following reasons,
the motions to dismiss for lack of subject matter jurisdiction are granted.
Consol. Court No. 19-00132 Page 3
I. Background
In May 2019, Cambria filed AD and CVD petitions with Commerce regarding QSPs
from India and Turkey. QSPs are a stone composite building material used for countertop
surfaces in residential, commercial, and industrial properties. Pl.’s Resp. at 5. The QSP
production process generally entails (1) the creation of a raw QSP slab, followed
by (2) a fabrication process that transforms slabs into products suitable for installation. Id.
at 5–6. For a petitioner, like Cambria, to initiate an AD or CVD investigation, it must first
file a petition with Commerce that meets the requirements of Sections 702(b)(1) and
732(b)(1) of the Tariff Act of 1930, as amended, 19 U.S.C. §§ 1671a(b)(1) and
1673a(b)(1). 1 These provisions require that the petitions must be filed “on behalf of
an industry.” As the initial step in an investigation, the petition must show that: (1) the
domestic producers who support the petition account for at least 25 percent of the total
production of the domestic like product, and (2) the domestic producers who support the
petition account for more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for or opposition to the
petition. 19 U.S.C. §§ 1671a(c)(4)(A), 1673a(c)(4)(A).
MSI, an importer of QSPs from India and Turkey, argued before Commerce that
the petitions failed to satisfy the industry support requirement because they did not
include QSP fabricators within the domestic industry. Commerce rejected MSI’s
1
Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of
Title 19 of the U.S. Code, 2012 edition.
Consol. Court No. 19-00132 Page 4
contentions, determined that the petitions had sufficient industry support, and initiated the
Investigations. See AD Notice; CVD Notice.
Plaintiff seeks immediate judicial review of Commerce’s industry support
determinations. See Complaint, ECF No. 4. Plaintiff argues that by excluding QSP
fabricators from Commerce’s industry support determinations, Commerce violated
19 U.S.C. §§ 1671a and 1673a. MSI further contends that the Investigations have created
a huge burden of time and resources as a result of MSI’s participation in the allegedly
unlawful Investigations. MSI argues that the court has jurisdiction under 28 U.S.C.
§ 1581(i) to review its claims and seeks (1) a declaration that the Investigations are
unlawful and (2) a remand for Commerce to reconsider its industry support
determinations.
II. Standard of Review
The claimant carries “the burden of demonstrating that jurisdiction
exists.” Techsnabexport, Ltd. v. United States, 16 CIT 420, 422, 795 F. Supp. 428, 432,
(1992) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)).
In deciding a motion to dismiss for lack of subject matter jurisdiction, the court assumes
“all factual allegations to be true and draws all reasonable inferences in plaintiff's favor.”
Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995).
Consol. Court No. 19-00132 Page 5
III. Discussion
Plaintiff does not assert jurisdiction under 28 U.S.C. § 1581(c) where challenges
to Commerce decision-making in antidumping and countervailing duty proceedings
ordinarily lie. That avenue requires a “final determination,” 19 U.S.C. § 1516a(a)(2)(B)(iii),
and is available when Commerce publishes its final determination of the investigations
in the Federal Register. 19 U.S.C. § 1516a(a)(2). Although Commerce did not agree with
Plaintiff’s industry support arguments, Plaintiff may submit a case brief commenting on
Commerce’s industry support determination. 19 C.F.R. § 351.309. If Plaintiff in good faith
believes Commerce violated the statute, and that violation has invalidated the whole
investigation, Plaintiff can focus its case brief on that one point. Assuming arguendo
Plaintiff is correct, and Commerce then fails to correct the error, Plaintiff may challenge
Commerce’s industry support determinations in this Court under 28 U.S.C. § 1581(c) as a
reviewable final determination under 19 U.S.C. § 1516a(a)(2)(B)(iii). This Court has the
power to declare Commerce’s proceeding unlawful and order Commerce to redo the
investigation, if necessary. 28 U.S.C. §§ 1585, 2643(c). The court can also enjoin
liquidation of any entries subject to unlawful affirmative antidumping and countervailing
determinations that result, and order that any cash deposits paid on those entries be
refunded in full. Plaintiff therefore has a full and complete remedy under 28 U.S.C.
§ 1581(c). Plaintiff, though, is not waiting for Section 1581(c) jurisdiction to attach. It seeks
immediate relief under 28 U.S.C. § 1581(i), this Court's oft-litigated residual jurisdiction
provision:
Consol. Court No. 19-00132 Page 6
Under 28 U.S.C. § 1581(i), the Court has jurisdiction to
hear “any civil action commenced against the United States,
its agencies, or its officers, that arises out of any law of the
United States providing for—... (2) tariffs, duties, fees, or other
taxes on the importation of merchandise for reasons other
than the raising of revenue,” and “(4) administration and
enforcement with respect to the matters referred to
in paragraphs (1)-(3) of this subsection and subsections
(a)-(h) of this section.” However, § 1581(i) “shall not confer
jurisdiction over an antidumping or countervailing duty
determination which is reviewable ... by the Court of
International Trade under section 516A(a) of the Tariff Act of
1930...” 28 U.S.C. § 1581(i). The legislative history of
§ 1581(i) demonstrates Congress intended “that any
determination specified in section 516A of the Tariff Act of
1930, [as amended,] or any preliminary administrative action
which, in the course of the proceeding, will be, directly or by
implication, incorporated in or superceded by any such
determination, is reviewable exclusively as provided in section
516A.” H.R. Rep. No. 96–1235, at 48 (1980), reprinted
in 1980 U.S.C.C.A.N. 3729, 3759–60. Thus, the Court's
§ 1581(i) jurisdiction is available only if the party asserting
jurisdiction can show the Court's § 1581(a)-(h) jurisdiction is
unavailable, unless the remedies afforded by those provisions
would be manifestly inadequate. See Miller & Co. v. United
States, 824 F.2d 961, 963 (Fed. Cir. 1987) (“Section 1581(i)
jurisdiction may not be invoked when jurisdiction under
another subsection of § 1581 is or could have been available,
unless the remedy provided under that other subsection
would be manifestly inadequate.” (citations omitted)).
When jurisdiction under another provision of § 1581
“is or could have been available, the party asserting § 1581(i)
jurisdiction has the burden to show how that remedy would be
manifestly inadequate.” Id. at 963 (citations omitted). That
judicial review may be delayed by requiring a party to wait for
Commerce's final determination in a countervailing duty
investigation is not enough to make judicial review under
§ 1581(c) manifestly inadequate. Gov't of People's Republic
of China v. United States, 31 CIT 451, 461, 483 F. Supp. 2d
1274, 1282 (2007). Neither the burden of participating in the
Consol. Court No. 19-00132 Page 7
administrative proceeding nor the business uncertainty
caused by such a proceeding is sufficient to constitute
manifest inadequacy. See, e.g., id. at 461, 483 F. Supp. 2d
at 1282, 1385 (citing FTC v. Standard Oil, 449 U.S. 232, 244,
(1980)); Abitibi-Consolidated Inc. v. United States, 30 CIT 71
4, 717–18, 437 F. Supp. 2d 1352, 1356–57 (2006).
Essentially, the type of review sought by a plaintiff asserting
the court's § 1581(i) jurisdiction must not already be provided
for by 19 U.S.C. § 1516a (2006). Abitibi-Consolidated Inc.,
30 CIT at 717-18, 437 F. Supp. 2d at 1356–57.
The Court's § 1581(c) jurisdiction makes final
determinations by Commerce reviewable via 19 U.S.C.
§ 1516a(a)(2). The Court of Appeals for the Federal Circuit
has held that § 1516a(a)(2) allows for judicial review of both
matters of procedural correctness, as well as the substantive
merits of the determination. See Miller & Co., 824 F.2d at 964
(“Under 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a, the
procedural correctness of a countervailing duty determination,
as well as the merits, are subject to judicial review.” (citations
omitted)). That Commerce has conducted the administrative
proceeding in a manner that is contrary to law is an allegation
made expressly reviewable by 19 U.S.C. § 1516a(b)(1), which
directs the court to “hold unlawful any determination, finding,
or conclusion found—... (B)(i) in an action brought under
paragraph (2) of subsection (a) of this section, to be
unsupported by substantial evidence on the record, or
otherwise not in accordance with law...”
Borusan Mannesmann Boru Sanayi v. Ticaret A.S., 38 CIT ___, ___, 986 F. Supp. 2d
1381, 1384–85 (2014). To this, the court would add the helpful reminder that Plaintiff’s
1581(i) claim is nothing more than an Administrative Procedure Act 2 claim, subject to its
requirements, including that “[a]gency action made reviewable by statute and final agency
action for which there is no other adequate remedy in a court are subject to judicial
2
5 U.S.C. §§ 701–706.
Consol. Court No. 19-00132 Page 8
review.” 5 U.S.C. § 704 (emphasis added). This APA provision is necessarily mirrored
in the court's residual jurisdiction case law, which as noted above prescribes that Section
1581(i) supplies jurisdiction only if a remedy under another section of 1581 is unavailable
or manifestly inadequate. Section 704 of the APA also provides that “[a] preliminary,
procedural, or intermediate agency action or ruling not directly reviewable is subject
to review on the review of the final agency action.” 5 U.S.C. § 704 (emphasis added).
The legislative history to 1581(i), the case law, and the Administrative Procedure
Act all discourage piecemeal review of Commerce Department international trade
proceedings. They are problematic for any plaintiff who is challenging preliminary
administrative actions regarding industry support that will be incorporated in or
superseded by the final determination. Since challenges to industry support
determinations are routinely reviewed under 19 U.S.C. § 1516a as part of a final AD or
CVD determination, the court has jurisdiction to review Plaintiff’s claims under § 1581(c)
after Commerce issues its final determinations for the Investigations, as Plaintiff well
knows. See, e.g., M S Int’l Inc. v. United States, Court Nos. 19-00140 & -00141 (Plaintiff’s
actions brought under § 1581(c) challenging Commerce’s industry support findings in the
AD and CVD Investigations of Certain QSPs from the People’s Republic of China);
see also H.R. Rep. No. 98-725, at 47 (1984), reprinted in 1984 U.S.C.C.A.N. 5127
(In amending 19 U.S.C. § 1516a, Congress eliminated interlocutory judicial review,
in most instances, so as to avoid costly and time consuming legal action where the issue
can be resolved just as equitably at the conclusion of the administrative proceedings.).
Consol. Court No. 19-00132 Page 9
Plaintiff’s arguments that it is suffering a substantial financial burden and business
harm by having to participate and await final determinations in these Investigations,
see Pl.’s Resp. at 7–8, are to no avail. Participating in an administrative proceeding,
incurring the attendant litigation expense, and enduring the collateral consequences of
such participation, business or otherwise, does not, and cannot, constitute irreparable
harm. See FTC v. Standard Oil, 449 U.S. 232, 244 (1980). Otherwise, every issue in
every trade case would be eligible for piecemeal review and Section 1581(i) would
completely swallow Section 1581(c).
There is no merit in Plaintiff’s jurisdictional arguments or Section 1581(i) claim.
If Commerce reaches affirmative final determinations in the Investigations, Plaintiff may
then seek relief by bringing its claims under Section 1581(c) as it has done in other
matters. See, e.g., M S Int’l. Inc. v. United States, Court Nos. 19-00140 & -00141.
IV. Conclusion
For the foregoing reasons, the court grants Defendants’ and Cambria’s USCIT
Rule 12(b)(1) motions to dismiss for lack of subject matter jurisdiction.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: January 30, 2020
New York, New York