SKF USA Inc. v. United States , 34 Ct. Int'l Trade 591 ( 2010 )

Slip Op. 10-57
UNITED STATES COURT OF INTERNATIONAL TRADE
SKF USA INC., SKF FRANCE S.A., SKF
AEROSPACE FRANCE S.A.S., SKF
INDUSTRIE S.p.A., SOMECAT S.p.A.,
SKF GmbH, and SKF (U.K.) LIMITED,
Plaintiffs,
v.
Before: Timothy C. Stanceu, Judge
UNITED STATES,
Court No. 09-00392
Defendant,
and
THE TIMKEN COMPANY,
Defendant-Intervenor.
OPINION AND ORDER
[Denying defendant’s motion to dismiss Count I of plaintiffs’ complaint challenging as unlawful
the policy, rule, or practice of the United States Department of Commerce to issue liquidation
instructions fifteen days after the publication of the final results of an administrative review]
Dated: May 17, 2010
Steptoe & Johnson LLP (Herbert C. Shelley, Alice A. Kipel, and Laura R. Ardito) for
plaintiffs.
Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M.
McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice (L. Misha Preheim); Joanna V. Theiss, Office of the Chief Counsel for
Import Administration, United States Department of Commerce, of counsel, for defendant.
Stewart and Stewart (Geert M. De Prest, Terence P. Stewart, William A. Fennell, and
Lane S. Hurewitz) for defendant-intervenor.
Court No. 09-00392 Page 2
Stanceu, Judge: On August 31, 2009, the International Trade Administration, United
States Department of Commerce (“Commerce” or the “Department”) published a determination
to conclude the nineteenth administrative reviews of antidumping duty orders on ball bearings
and parts thereof from France, Germany, Italy, Japan, and the United Kingdom (the “Final
Results”). See Ball Bearings & Parts Thereof From France, Germany, Italy, Japan, & the
United Kingdom: Final Results of Antidumping Duty Admin. Reviews & Revocation of an Order
in Part, 74 Fed. Reg. 44,819 (Aug. 31, 2009) (“Final Results”). Plaintiffs SKF USA Inc., SKF
France S.A., SKF Aerospace France S.A.S., SKF Industrie S.p.A., Somecat S.p.A., SKF GmbH,
and SKF (U.K.) Limited (collectively, “SKF” or “plaintiffs”) brought this action contesting the
Final Results on September 15, 2009. Compl. ¶ 1. One of the claims in their complaint (“Count
I”) contests the Department’s decision to apply its policy of issuing duty assessment and
liquidation instructions to United States Customs and Border Protection (“Customs” or “CBP”)
fifteen days after the publication of the final results of the administrative reviews (the “fifteen-
day policy”). Compl. ¶¶ 14-18 (“Count I”). Defendant moves to dismiss Count I for alleged lack
of standing. Def.’s Mot. to Dismiss 1 (“Def. Mot.”). Because defendant’s argument that
plaintiffs lack standing is meritless, the court denies the motion.
I. BACKGROUND
Pursuant to 19 U.S.C. § 1675(a) (2006), Commerce initiated the nineteenth administrative
reviews of the antidumping duty orders on imports of ball bearings and parts thereof from
France, Germany, Italy, Japan, and the United Kingdom, for the period May 1, 2007 through
April 30, 2008 (the “period of review”). See Initiation of Antidumping & Countervailing Duty
Admin. Reviews, Requests for Revocation in Part & Deferral of Admin. Review, 72 Fed.
Court No. 09-00392 Page 3
Reg. 35,690, 35,691-93 (June 29, 2007). On April 27, 2009, Commerce published the
preliminary results of the administrative reviews. Ball Bearings & Parts Thereof From France,
Germany, Italy, Japan, & the United Kingdom: Prelim. Results of Antidumping Duty Admin.
Reviews & Intent To Revoke Order In Part, 74 Fed. Reg. 19,056 (Apr. 27, 2009) (“Prelim.
Results”). On August 31, 2009, Commerce issued the contested determination. Final Results,
74 Fed. Reg. 44,819.
In the Federal Register notice announcing the Final Results, Commerce stated that “[w]e
intend to issue appropriate assessment instructions directly to CBP 15 days after publication of
these final results of reviews.” Id. at 44,821. In the Issues and Decision Memorandum, which is
incorporated by reference in the Final Results, Commerce explains that “[o]ur practice of issuing
liquidation instructions 15 days after publication of the final results is based upon administrative
necessity, namely that we must provide CBP with sufficient time to liquidate all entries,
particularly in large and complex cases like the instant reviews, before the entries are deemed
liquidated.” Issues & Decision Mem. for the Antidumping Duty Admin. Reviews of Ball Bearings
& Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom for the Period of
Review May 1, 2007, through April 30, 2008, at 12 (Aug. 25, 2009) (“Decision Mem.”); Final
Results, 74 Fed. Reg. at 44,822.
After commencing this action on September 15, 2009, fifteen days after publication of the
Final Results on August 31, 2009, plaintiffs moved for a preliminary injunction on
September 16, 2009 to prohibit Customs from liquidating entries of subject merchandise
produced by or on behalf of plaintiffs that were made during the period of review. Summons;
Court No. 09-00392 Page 4
SKF’s Consent Mot. for a Prelim. Inj. to Enjoin Liquidation of Entries. The court granted
plaintiffs’ motion for preliminary injunction upon defendant’s consent. Order, Sept. 21, 2009.
On November 19, 2009, defendant, the United States, filed the instant motion to dismiss
Count I of the complaint. Def. Mot. 1. On December 21, 2009, plaintiffs filed their response and
on January 11, 2010, defendant filed its reply. Pls.’ Opp’n to Def.’s Mot. to Dismiss (“Pls.
Opp’n”); Def.’s Reply in Supp. of Mot. to Dismiss (“Def. Reply”).
II. DISCUSSION
The court exercises subject matter jurisdiction under 28 U.S.C. § 1581(i) over plaintiffs’
claim in Count I challenging the Department’s decision to apply the fifteen-day policy. See
28 U.S.C. § 1581(i) (2006); SKF USA Inc. v. United States, 31 CIT 405, 409-10 (2007) (“SKF I”)
(citing Shinyei Corp. of Am. v. United States, 355 F.3d 1297, 1304-05 (Fed. Cir. 2004), and
Consol. Bearings Co. v. United States, 348 F.3d 997, 1002-03 (Fed. Cir. 2003)).1
Defendant moves to dismiss Count I on the basis that “SKF lacks standing to maintain
Count I, which asserts only hypothetical harm.” Def. Mot. 2. Plaintiffs were able to obtain an
injunction against liquidation of its entries and, under the court’s order, liquidation of entries of
1
The court held in SKF USA Inc. v. United States that jurisdiction over a claim
challenging the previous fifteen-day policy does not fall under 28 U.S.C. § 1581(c), explaining
that
[t]he language in the Federal Register notice to which plaintiffs direct the court’s
attention is a statement of a present intention on the part of Commerce to take,
within fifteen days of the publication of the Final Results, the future action of
instructing Customs to liquidate, in accordance with the Final Results, the affected
entries.
SKF USA Inc. v. United States, 31 CIT 405, 409 (2007) (“SKF I”). The court reached the same
conclusion regarding a claim challenging the Department’s revised fifteen-day policy in two
subsequent decisions. SKF USA Inc. v. United States, 33 CIT __, __, 659 F. Supp. 2d 1338,
1342-43 n.2 (2009) (“SKF III”); SKF USA Inc. v. United States, 33 CIT __, __, Slip Op. 09-148,
at 5 (Dec. 21, 2009) (“SKF IV”).
Court No. 09-00392 Page 5
plaintiffs’ merchandise will remain enjoined during the pendency of this litigation, including all
remands and appeals. Order, Sept. 21, 2009. Pointing to plaintiffs’ success in obtaining an
injunction, Order, Sept. 21, 2009, defendant argues that “SKF cannot demonstrate that
Commerce’s instruction to Customs resulted in any concrete injury in fact. . . . [a]s SKF must
concede, no entries were actually liquidated; therefore, Commerce’s instructions to Customs did
not harm SKF in any way.” Def. Mot. 3.
In deciding a USCIT Rule 12(b)(1) motion to dismiss that does not challenge the factual
basis for the complainant’s allegations, the court assumes all factual allegations to be true and
draws all reasonable inferences in plaintiffs’ favor. See Cedars-Sinai Med. Ctr. v. Watkins,
11 F.3d 1573, 1583-84 & 1584 n.13 (Fed. Cir. 1993); Henke v. United States, 60 F.3d 795, 797
(Fed. Cir. 1995) (setting forth the standard for determining subject matter jurisdiction). The
applicable pleading requirement for plaintiffs’ claim in Count I is set forth in USCIT Rule 8(a),
which provides that a complaint shall contain “a short and plain statement of the claim showing
that the [plaintiff] is entitled to relief.” USCIT Rule 8(a)(2) (2010). Rule 8(a) “requires more
than labels and conclusions, and a formulaic recitation of a cause of action’s elements will not
do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). Although a complaint need not
contain detailed factual allegations, the “[f]actual allegations must be enough to raise a right to
relief above the speculative level on the assumption that all the complaint’s allegations are true.”
Id.In two previous cases, the Court of International Trade has held that SKF has standing to
challenge Commerce’s fifteen-day policy as applied in prior reviews, despite plaintiffs’ having
obtained an injunction against liquidation. SKF USA Inc. v. United States, 31 CIT 405, 409
Court No. 09-00392 Page 6
(2007) (“SKF I”); SKF USA Inc. v. United States, 33 CIT __, __, 611 F. Supp. 2d 1351, 1362-63
(2009) (“SKF II”); SKF USA Inc. v. United States, 33 CIT __, __, 659 F. Supp. 2d 1338, 1347-48
(2009); SKF USA Inc. v. United States, 33 CIT __, __, Slip-Op. 09-148, at 27-29 (Dec. 21, 2009)
(“SKF IV”).2 In SKF III and SKF IV, the court held that not only did SKF have standing to
challenge Commerce’s policy of issuing liquidation instructions fifteen days after publication of
the Final Results even though plaintiffs did not suffer harm caused by liquidation of its entries,
but that the policy, rule, or practice of the Department was contrary to law. SKF III, 33 CIT at
__, 659 F. Supp. 2d at 1348, 1352; SKF IV, 33 CIT at __, Slip-Op. 09-148, at 29, 35.
The circumstances of this case are directly analogous to those in SKF III and SKF IV. As
those cases concluded, “a claim may present an actual case or controversy if the action originally
complained of is capable of repetition, yet evading review.” SKF III, 33 CIT at __, 659 F. Supp.
2d at 1347-48; SKF IV, Slip-Op. 09-148, at 27; see also, SKF II, 33 CIT at __, 611 F. Supp. 2d
at 1363 n.9; SKF I, 31 CIT at 411-12. In this action, the court takes judicial notice that, despite
the court’s prior holding that the fifteen-day policy was contrary to law, Commerce has continued
2
In SKF II, the court held that Commerce’s previous 2002 policy of issuing liquidation
instructions within fifteen days of publication violated 19 U.S.C. § 1516a(c)(2) “because that
policy allows liquidation to occur almost immediately upon publication rather than providing a
minimally reasonable time during which a party may seek to obtain an injunction against
liquidation.” SKF USA Inc. v. United States, 33 CIT __, __, 611 F. Supp. 2d 1351, 1367 (2009)
(“SKF II”). The court determined that the previous 2002 policy “induces an absurd, and
unnecessary, ‘race to the courthouse’ that burdens impermissibly the right of a prospective
plaintiff to seek the injunction that Congress contemplated in enacting § 1516a(c)(2) and
frustrates the purpose of that provision.” Id. at __, 611 F. Supp. 2d at 1365. In SKF III, the court
held that the Department’s adherence to its current policy, rule, or practice, under which it waits
fifteen days before issuing liquidation instructions was contrary to law because the Department
failed to consider the relevant factors in adopting that policy, rule, or practice. SKF III, 33 CIT
at __, 659 F. Supp. 2d at 1350-51.
Court No. 09-00392 Page 7
to apply its fifteen-day policy in multiple administrative reviews in 2010. See Certain Preserved
Mushrooms from the People’s Republic of China: Am. Final Results Pursuant to Final Ct.
Decision, 75 Fed. Reg. 17,376, 17,377 (Apr. 6, 2010); Certain Pasta from Italy: Notice of Am.
Final Results of the Twelfth Antidumping Duty Admin. Review, 75 Fed. Reg. 11,116, 11,117
(Mar. 10, 2010); Circular Welded Carbon Steel Pipes & Tubes From Thailand: Final Results of
Antidumping Duty New Shipper Review, 75 Fed. Reg. 4529, 4530 (Jan. 28, 2010). The adverse
effect of the new fifteen-day policy, as the court found to exist in SKF III and SKF IV, is,
therefore, capable of repetition.
Defendant argues, further, that the court’s decision in SKF IV, which concluded that the
judgment issued in SKF III declaring the fifteen-day policy contrary to law “cannot ensure that
Commerce will not apply its liquidation policy to SKF,” supports its position that SKF cannot
demonstrate standing. Def. Reply 5. According to this argument, Count I seeks an advisory
opinion because the relief being sought in Count I could not prevent the application of the
fifteen-day policy to SKF in future reviews. Id. The court finds no merit in this argument.
Defendant is correct that the judgments granted in SKF III and SKF IV were declaratory
judgments. SKF III, 33 CIT at __, 659 F. Supp. 2d at 1352; SKF IV, 33 CIT at __,
Slip Op. 09-138, at 35. In a declaratory judgment, a court “may declare the rights and other legal
relations of any interested party seeking such declaration, whether or not further relief is or could
be sought.” 28 U.S.C. § 2201(a) (2006). It may not be presumed that SKF will never be able to
obtain any remedy based on the declaratory judgments it obtained in SKF III and SKF IV
challenging the fifteen-day policy. Nor is SKF precluded in this litigation from seeking relief
other than declaratory relief, and that relief could affect Commerce’s future ability to apply its
Court No. 09-00392 Page 8
unlawfully promulgated fifteen-day policy to SKF. Commerce twice has applied to SKF a policy
that the court has declared to be contrary to law and has given no indication that it will modify
that policy or otherwise remedy the continuing harm the court identified in SKF III. Rather than
attempt to obtain an advisory opinion, Count I rests on a justiciable case or controversy that
continues to exist between Commerce and SKF.
III. CONCLUSION
Plaintiffs have established standing to bring the claim asserted in Count I of the complaint
challenging as unlawful the policy, rule, or practice of Commerce to issue liquidation instructions
fifteen days after the publication of the final results of an administrative review. Accordingly,
defendant’s motion to dismiss Count I must be denied.
ORDER
Upon review of plaintiffs’ complaint, defendant’s motion to dismiss Count I of the
complaint, plaintiffs’ opposition to defendant’s motion to dismiss, defendant’s reply in support
of its motion to dismiss, and all other papers and proceedings herein, and upon due deliberation,
it is hereby
ORDERED that defendant’s motion to dismiss be, and hereby is, DENIED.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge
Dated: May 17, 2010
New York, New York