Fundicao Tupy S.A. v. United States , 12 Ct. Int'l Trade 813 ( 1988 )

MEMORANDUM OPINION

WATSON, Judge:

In this opinion the Court denies plaintiffs’ Motion for Reconsideration of this Court’s Order of July 26, 1988 denying plaintiffs’ Motion to Modify Injunction Pending Appeal.

BACKGROUND

On August 11, 1988, plaintiffs filed the subject Motion for Reconsideration of the Court’s Order of July 26,1988 which denied their Motion to Modify Injunction Pending Appeal dated June 28,1988. Plaintiffs allege that the Order of July 26 failed to comply with Rule 52(a) of the Rules of this Court.¹ Plaintiffs also allege that the Order conflicts with the recent decision in Ipsco, Inc. v. United States, 12 CIT —, 692 F.Supp. 1368 (1988), which granted in-junctive relief in a similar case.

Plaintiffs brought the underlying action contesting both the final determination of the International Trade Administration of the United States Department of Commerce (“ITA” or Commerce) and the final determination of the United States International Trade Commission on the dumping of malleable cast iron pipe fittings from Brazil which caused material injury to a domestic industry.

On January 12, 1988, this Court entered a final judgment on the merits of the case affirming both determinations of the government. See Fundicao Tupy S.A. v. United States, 12 CIT —, 678 F.Supp. 898 (1988).

Prior to that time, plaintiffs moved for a preliminary injunction to enjoin the automatic liquidation of entries made during the first post-order review period and which had become subject to the automatic assessment provision of § 751 of the Tariff Act of 1930, as amended (the “Act”)² and the implementing § 353.53a(d) of Commerce’s Regulations.³

The Court denied plaintiffs’ motion for preliminary injunction in Fundicao Tupy S.A. v. United States, 11 CIT —, 669 F.Supp. 437, 439 (1987) {Tupy I), holding that plaintiffs failed to show immediate and irreparable harm because “[a]ny harm ... that plaintiffs may suffer if the entries are liquidated is undeniably the result of their failure to utilize the administrative remedy provided.” The Court accepted ITA’s argument that under the 1984 amendment to § 751 of the Act, plaintiffs had the option to request an administrative review of the subject entries and thus prevent the alleged “irreparable harm” of automatic liquidation under 19 C.F.R. § 353.53a(d). The Court found that plaintiffs did not challenge the validity of the regulations, nor did they dispute “that they were properly notified of the necessity of requesting a review” in order to prevent the automatic assessment of duties. Id.

The Court recognized the importance of the issues raised by plaintiffs’ motion for injunctive relief and granted a certification for interlocutory appeal and a stay of its denial of the preliminary injunction pending appeal. See Fundicao Tupy S.A. v. United States, 11 CIT —, 671 F.Supp. 27 (1987) {Tupy II). When this Court issued its final decision on the merits, however, the Court of Appeals for the Federal Circuit dismissed the interlocutory appeal of our denial of the preliminary injunction on the grounds of mootness. See Fundicao Tupy S.A. v. United States, 841 F.2d 1101 (Fed. Cir.1988). The stay of the decision denying the preliminary injunction in Tupy I pending the interlocutory appeal became ipso facto dissolved.

Plaintiffs appealed the final judgment on the merits and moved for a new stay pending appeal. We granted plaintiffs’ motion for a second stay under Rule 62 of the Rules of this Court to preserve the status quo. See Fundicao Tupy S.A. v. United States, 12 CIT —, Slip Op. 88-32 (Mar. 16, 1988) {Tupy III) [available on WESTLAW, 1988 WL 24558].

On June 28, 1988, plaintiffs moved to expand the scope of the stay granted in Tupy 7/7 to include entries made during the second review period. These new entries became subject to automatic liquidation, because plaintiffs once again failed to request an administrative review for these new entries. The Court denied that motion in its Order entered without an opinion on July 26, 1988.

DECISION

The Court finds that Rule 52(a) of the Rules of this Court does not apply to its Order of July 26, 1988, denying plaintiffs’ motion to modify the stay. That order does not dispose of an “interlocutory injunction”, but is a discretionary action under Rule 62 of the Rules of this Court which is entitled Stay of Proceedings to Enforce a Judgment. Rule 62(c) in pertinent part states that:

the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal

(emphasis added). In its Order of July 26, 1988, this Court did not choose to either “suspend, modify, restore, or grant an injunction”, but chose to refrain from exercising its discretion to do so for the reasons described below.

With regard to plaintiffs’ allegation that the Order’s compliance with Rule 52(a) is necessary in order to facilitate its appellate review, we conclude that, unlike a decision to grant or deny an “interlocutory” injunction subject to Rule 52(a), the discretionary Order of the Court denying a stay pending appeal of the final judgment is not subject to appellate review. Instead, considering the circumstances of this case, we believe that the Order dated July 26, 1988, entitles plaintiffs to seek the injunctive relief in the Court of Appeals as the court of first instance.

The four criteria of preliminary injunctions are widely utilized by the courts in determining whether to grant a stay of their own final judgments pending appeal. The weight and the legal effect of the four criteria in the context of a discretionary stay pending appeal of the final judgment, however, are substantially different. In Davis v. Lukhard, 106 F.R.D. 317 (E.D.Va. 1984), the court denied a motion for stay pending appeal, stating that:

the criteria for exercising discretion pending appeal are not the same as those appropriate to the granting of a temporary restraining order or a preliminary injunction.

Id. at 318. With regard to the criteria of the likelihood of prevailing on the merits, the Davis court stated that, after having determined the merits of the case,

[t]o think plaintiffs were ‘likely’ to obtain a reversal on appeal would require that I think the Court of Appeal would not apply the law.

Id. at 319 (emphasis in original). Similarly, after having determined the impact intended by the applicable law, the court was unable to find “irreparable harm” where the intent of the law

assumes that plaintiffs will suffer irreparable harm in the indefinite future so long as the new laws adopted by Congress and enforced by the defendant remain in effect. With all the notice plaintiffs have had of the impending implementation, the immediacy of ‘irreparable harm’ does not exist.

Id. Finally, with regard to the “public interest” criterion, the court determined that:

The public interest will be served by having the will of Congress worked. Were I to grant the stay after having determined that Congress intended the procedure to be altered, it seems to me that I would merely be substituting my view of the public interest for that of the Congress.

Id.

Davis reflects the highly discretionary nature of a court’s decision to grant a stay pending appeal of its final judgment. This widely held view that a stay cannot be granted unless a movant can show the probability of success on appeal, however, is not followed by other courts. See Ruiz v. Estelle, 650 F.2d 555 (5th Cir.1981).

In Washington Metropolitan Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 843-44 (D.C.Cir.1977), the court held:

The court is not required to find that ultimate success by the movant is a mathematical probability, and indeed, as in this case, may grant a stay even though its own approach may be contrary to movant’s view ... An order maintaining the status quo is appropriate when a serious legal question is presented, when little if any harm will befall other interested persons or the public and when denial of the order would inflict irreparable injury on the movant.

(emphasis added).

Similarly, by granting the stay pending appeal of the final judgment in Tupy III, we did not adhere to so strict a standard as to require showing that plaintiffs’ position is likely to prevail on appeal. Consequently, we did not repudiate our decision in Tupy I that plaintiffs were not entitled to injunctive relief when we granted the stay. Moreover, a decision to grant a stay pending appeal under Rule 62(c) may not procedurally be interpreted to overrule the Court’s previous decision to deny a preliminary injunction under Rule 65(a). These are two procedurally different and independent decisions of this Court.

It is not disputed that pursuant to Rule 65(d) the application for a preliminary injunction and its denial by the Court were limited in scope to the entries of the subject merchandise which were made during the first post-order review period. The subsequent stays pending appeal were also limited to the first review period. Plaintiffs may not sidestep an application for a new injunction with regard to the entries made during a second review period by seeking to modify the previous stay, because there is no outstanding decision which could be stayed with regard to these new entries.

Furthermore, by denying the preliminary injunction for failure to request an administrative review in the first review period in Tupy I, we did not adhere to the view that liquidation of all post-order entries may be enjoined pending the disposition of a court action challenging the validity of an original order, but held that plaintiffs were required to request an administrative review to preclude liquidation of the new entries. That conclusion is the law of this case until the Court of Appeals determines to the contrary, notwithstanding the subsequent decisions in Oki Elec. Indus. Co. v. United States, 11 CIT —, 669 F.Supp. 480 (1987) and Ipsco Inc. v. United States, 12 CIT —, 692 F.Supp. 1368 (1988).

In granting the stay pending interlocutory appeal in Tupy II, this Court recognized the confusion created by the 1984 amendment to § 751 of the Act and the conflict between our decision in Tupy I and Oki.

In Oki, which was followed by Ipsco, the court concluded that it would be improper to require plaintiffs to request a new administrative review as a condition precedent to obtain an injunctive relief in an action challenging the original order. Oki stated that in view of the legislative history and congressional intent of the 1984 amendment to § 751 of the Act to avoid unnecessary reviews,

[t]o hold otherwise would presumably result in the increase of more unnecessary 751 reviews as importers will undoubtedly request 751 reviews simply to preserve their rights and avoid the automatic assessment provisions of the regulation.

See Oki, supra, at 486.

In Tupy I, which was issued shortly before Oki, this Court found that the law does require parties to request a review when they are less than satisfied with the impending automatic liquidation of their entries. The 1984 amendment to § 751 of the Act allowed parties to avoid the unnecessary 751 reviews when they are satisfied with the current status of their incoming entries. The legislative history of the 1984 amendment to the Act, however, is completely silent with regard to whether interested parties must request an administrative review in order to voice their dissatisfaction on the administrative level, even though they have judicially challenged the agency’s previous determination that became the basis of the automatic liquidation of their subsequent entries. The question still remains as to when an administrative review is “unnecessary,” and whether it was reasonable for Commerce to assume that plaintiffs’ failure to request a review of the post-order entries indicated their per se satisfaction with automatic assessment of their new entries by operation of 19 C.F.R. § 353.53a(d).

Similarly, there is no indication in the legislative history that the 1984 amendment intended to change the existing statutory scheme which separates each administrative review period into an independent cause of action subject to a separate judicial review. None of these controversial issues have been addressed by the Court of Appeals, because the interlocutory appeal of this Court’s decision in Tupy I became moot when we issued the final decision on the merits. The need for resolution of these issues became renewed by plaintiffs’ appeal of the final judgment and by the impending automatic liquidation of the new entries of the merchandise which were made during the second administrative review period.

We recognize that pursuant to Rule 62(c) of the Rules of this Court and Rule 8(a) of the Federal Rules of Appellate Procedure (“FRAP”), this Court has the power to grant or deny a new injunction for these new entries independently of the previous stay. We believe that in this particular case, however, plaintiffs are entitled to seek that relief directly from the Court of Appeals, because this Court has previously denied plaintiffs’ motion for an identical injunction with regard to the entries from the first review period in Tupy I.

Since the Court of Appeals has now assumed jurisdiction over this matter, we do not believe that it would be appropriate for this Court to conduct an intra-court review of its previous decision by revisiting these issues⁴.

Rule 8(a) of FRAP directs the appellants to seek relief in the lower court first. At the same time, the rule further provides that:

A motion for such [injunctive] relief may be made to the court of appeals or to a judge thereof, but the motion shall show that application to the district court for the relief sought is not practicable, or that the district court denied an application

In Benford v. American Broadcasting Cos., Inc., 36 Fed.R.Serv.2d (Callahan) 1368 (D.Md.1983), the court denied an application for a stay of the fine imposed by the court’s contempt order finding that the application attempted to reargue the same issues which were disposed of by the underlying order. The Benford court concluded that:

under the circumstances, and particularly because an appeal has now been filed, if a stay is to be imposed, it would more properly be ordered by the United States Court of Appeals ...

Id. at 1369.

CONCLUSION

We conclude that in view of our decision in this case to deny a similar injunction in Tupy I, it is not practicable for plaintiffs to seek the same relief in this Court. In addition, the Order of this Court dated July 26, 1988, entitles plaintiffs to seek the in-junctive relief directly from the Court of Appeals.

For these reasons and upon reading and filing plaintiffs’ motion for reconsideration; upon the response of defendant; upon all papers and proceedings had herein, and upon due deliberation, it is hereby

ORDERED that the plaintiffs’ motion be, and it hereby is, denied; and it is further

ORDERED that the Temporary Restraining Order which was issued by the Court pending disposition of this motion will be extended for a period of ten days from the date of this decision.

This Order shall be effective immediately-

SO ORDERED.

1 . Rule 52(a) of the Rules of this Court requires that “in granting or refusing interlocutory injunctions the court shall ... set forth the facts and conclusions of law which constitute the grounds of its action."

2 . 19 U.S.C. § 1675(a) in pertinent part provides: (1) In general At least once during each 12-month period beginning on the anniversary of the date of publication of ... an antidumping duty order ..., the administering authority, if a request for such a review has been received and after publication of notice of such review in the Federal Register, shall—

(B) review, and determine ... the amount of any antidumping duty ... and shall publish the results of such review, together with notice of any duty to be assessed, estimated duty to be deposited, or investigation to be resumed in the Federal Register.

3 . 19 C.F.R. § 353.53a(d)(l) provides:

For orders or findings, if the Secretary does not receive a timely request under paragraph (a)(1), (a)(2), (a)(3), or (a)(5) of this section, the Secretary, without additional notice, will instruct the Customs Service to assess antidumping duties on the merchandise described in paragraphs (b)(1) through (b)(3) of this section at rates equal to the cash deposit of (or bond for) estimated antidumping duties required on that merchandise at the time of entry, or withdrawal from warehouse, for consumption and to continue to collect the cash deposit previously ordered.

4 . For an overview of the interplay between F.R. Civ.P. 62(d), which is identical to Rule 62(c) of the Rules of this Court, and Rule 8(a) of FRAP, See Betts v. Coltes, 449 F.Supp. 751 (D.Haw. 1978).