Committee Overseeing Action for Lumber International Trade Investigations or Negotiations v. United StatesCommittee Overseeing Action for Lumber International Trade Investigations or Negotiations v. United States
COMMITTEE OVERSEEING ACTION FOR LUMBER INTERNATIONAL TRADE INVESTIGATIONS OR NEGOTIATIONS, Plaintiff, v. UNITED STATES, Defendant, and FONTAINE INC., ET AL., Defendant-Intervenors.
OPINION AND ORDER
[Vacating the temporary restraining order entered on July 15, 2019 and denying Plaintiff’s motion for a preliminary injunction.]
Dated: July 26, 2019
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Stephen C. Tosini, Senior Trial Counsel. Of counsel on the brief were Jessica DiPietro and Nikki Kalbing.
Elliot J. Feldman, Baker & Hostetler, LP, of Washington, DC, argued for Defendant-Intervenor Fontaine, Inc. With him on the brief were Michael S. Snarr, John J. Burke, Mark B. Lehnardt, Lindita V. Ciko Torza, and Jake R. Frischknecht.
Lynn G. Kamarck, Hughes Hubbard & Reed LLP, of Washington, DC, argued for Defendant-Intervenor the Government of Canada. With her on the brief were Joanne E. Osendarp, Dean A. Pinkert, Alan G. Kashdan, Daniel M. Witkowski, and Stephen R. Halpin, III.
Jonathan M. Zielinski, Cassidy Levy Kent (USA) LLP, of Washington, DC, argued for Defendant-Intervenor Scierie Alexandre Lemay & Fils Inc. With him on the brief were Yohai Baisburd, Myles S. Getlan, and James E. Ransdell.
Barnett, Judge: Plaintiff, Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (“the Coalition” or “Plaintiff”) challenges the final results of the countervailing duty expedited review of certain softwood lumber products from Canada. Compl. ¶¶ 1-2, ECF No. 2;1
This matter is now before the court on Plaintiff’s motion for a temporary restraining order (“TRO”) and preliminary injunction. Pl.’s Mot. for Temporary Restraining Order and for Prelim. Inj. (“Pl.’s Mot.”), ECF No. 6. On July 15, 2019, prior to assignment to the undersigned, the court entered an order granting Plaintiff’s motion for a TRO. See Temporary Restraining Order (July 15, 2019), ECF No. 10. Pursuant to Rule 65 of the rules of the U.S. Court of International Trade (“USCIT”), the TRO will expire on July 29, 2019. See USCIT Rule 65(b)(2). Plaintiff now seeks to enjoin, “pending a final and conclusive court decision in this litigation, and any appeals therefrom,” “Defendant United States, together with its delegates, officers, agents, servants, and employees of the International Trade Administration of the U.S. Department of Commerce and U.S. Customs and Border Protection” from: (1) liquidating “any unliquidated entries of softwood lumber from Canada that” were subject to the Final Results of Expedited Review, entered on or after April 28, 2017, and were produced or exported by seven of the eight companies that received de minimis or reduced rates in the review; (2) revoking the relevant countervailing duty order on five companies that received de minimis rates in the review; and (3) collecting cash deposits at the rates established in the Final Results of Expedited Review on entries made on or after July 5, 2019 and which were produced or exported by the eight companies subject to the review. [Proposed] Order, ECF No. 6.
Defendant, United States (“the Government”), and several Defendant-Intervenors oppose Plaintiff’s motion. See Def.’s Mot. to Dismiss and Opp’n to Pl.’s Mot. for a Prelim. Inj. (“Def.’s MTD & Opp’n”), ECF No. 21; Opp’n of Def.-Int., Fontaine Inc., to Pl.’s Mot. for Temporary Restraining Order and for Prelim. Inj. (“Fontaine’s Opp’n”), ECF No. 26; Opp’n of Def.-Int. Gov’t of Canada to Pl.’s Mot. for Temporary Restraining Order and for Prelim. Inj. (“Gov’t of Canada’s Opp’n”), ECF No. 67; Resp. of Def.-Int. Scierie Alexandre Lemay & Fils Inc. Opp’n to Pl.’s Mot. for Temporary Restraining Order and for Prelim. Inj. and in Supp. of Def.’s Mot. to Dismiss (“Lemay’s Opp’n”), ECF No. 68.2 Fontaine, Inc. (“Fontaine”) has also moved to modify the TRO. See Mot. to Modify Temporary Restraining Order (“Fontaine’s Mot.”), ECF No. 22. On July 25, 2019, the court heard oral argument on Plaintiff’s motion. Docket Entry, ECF No. 69. For the reasons discussed herein, the court will vacate the TRO as having been improvidently granted and deny Plaintiff’s motion for a preliminary injunction.3
BACKGROUND
“A ‘final determination’ in an antidumping or countervailing duty investigation constitutes a final decision by the [U.S. Department of Commerce (“Commerce” or “the agency”)] as to whether dumping or countervailable subsidization is occurring.”
Relevant here, an exporter that Commerce did not select for individual examination in a countervailing duty investigation may, within 30 days of the date of publication of the relevant order, request an expedited review of the cash deposit rate.
Final duty liability typically is determined in an administrative review of an order pursuant to
In November 2017, Commerce issued final affirmative determinations in its countervailing duty (“CVD”) and antidumping duty (“AD”) investigations of certain softwood lumber products from Canada. See Certain Softwood Lumber Products From Canada, 82 Fed. Reg. 51,814 (Dep’t Commerce Nov. 8, 2017) (final aff. countervailing duty determination and final negative determination of critical circumstances); Certain Softwood Lumber Products From Canada, 82 Fed. Reg. 51,806 (Dep’t Commerce No. 8, 2017) (final aff. determination of sales at less than fair value and aff. final determination of critical circumstances).5 On January 3, 2018, Commerce published the CVD and AD orders. See Certain Softwood Lumber Products From Canada, 83 Fed. Reg. 347 (Dep’t Commerce Jan. 3, 2018) (am. final aff. countervailing duty determination and countervailing duty order) (“CVD Order”); Certain Softwood Lumber Products From Canada, 83 Fed. Reg. 350 (Dep’t Commerce Jan. 3, 2018) (antidumping duty order and partial am. final determination) (“AD Order”).
On March 8, 2018, in response to requests filed by certain Canadian producers, Commerce initiated an expedited review of the CVD Order. See Certain Softwood Lumber Products From Canada, 83 Fed. Reg. 9,833 (Dep’t Commerce March 8, 2018) (initiation of expedited review of the countervailing duty order) (“Initiation Notice”);
On July 5, 2019, Commerce issued the Final Results of Expedited Review in which the agency calculated reduced or de minimis rates for the eight companies as follows: (1) Les Produits Forestiers D&G Ltée and its cross-owned affiliates (“D&G”): 0.21 percent; (2) Marcel Lauzon Inc. and its cross-owned affiliates (“MLI”): 0.42 percent; (3) North American Forest Products Ltd. and its cross-owned affiliates
The rates calculated for D&G, MLI, NAFP, Roland, and Lemay are considered de minimis, therefore, Commerce stated it would instruct U.S. Customs and Border Protection (“CBP”) “to discontinue the suspension of liquidation and the collection of cash deposits of estimated countervailing duties on all shipments of softwood lumber produced and exported by” those companies that were entered on or after July 5, 2019; “liquidate, without regard to countervailing duties, all suspended entries of shipments of softwood lumber produced and exported by” those companies; and “refund all cash deposits of estimated countervailing duties collected on all such shipments.” Id. As to the companies receiving a lower—but not de minimis—rate (Fontaine, Rustique, and Matra), Commerce stated it would instruct CBP “to collect cash deposits of estimated countervailing duties” at the rates calculated for the Final Results of Expedited Review. Id.
DISCUSSION
“A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Nat’l Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). To obtain a preliminary injunction, a party must demonstrate “(1) likelihood of success on the merits, (2) irreparable harm absent immediate relief, (3) the balance of interests weighing in favor of relief, and (4) that the injunction serves the public interest.” Silfab Solar, Inc. v. United States, 892 F.3d 1340, 1345 (Fed. Cir. 2018) (citing Winter, 555 U.S. at 20). “Although preliminary injunctions against liquidation have become almost automatic in antidumping and countervailing duty cases, they are an extraordinary remedy never awarded as of right.” Sumecht NA, Inc. v. United States, 923 F.3d 1340, 1345 (Fed. Cir. 2019) (internal quotation marks and citation omitted).
“In evaluating [irreparable] harm, the court must consider ‘the magnitude of the injury, the immediacy of the injury, and the inadequacy of future corrective relief.’” Shree Rama Enter. v. United States, 21 CIT 1165, 1167, 983 F. Supp. 192, 194 (1997) (quoting Queen’s Flowers de Colombia v. United States, 20 CIT 1122, 1125, 947 F. Supp. 503, 506 (1996)). Of these three factors, “immediacy [of the injury] and the inadequacy of future corrective relief” may be weighed more heavily than magnitude of harm. Nat’l Juice Prods. Ass’n v. United States, 10 CIT 48, 53, 628 F. Supp. 978, 984 (1986) (citations omitted).6 Critically, irreparable harm may not be speculative, see Am. Inst. for Imported Steel, Inc. v. United States, 8 CIT 314, 318, 600 F. Supp. 204, 209 (1984), or determined by surmise, Elkem Metals Co. v. United States, 25 CIT 186, 192, 135 F.Supp.2d 1324, 1331 (2001) (citation omitted). “It is not enough to establish ‘a mere possibility of injury, even where prospective injury is great. A presently existing, actual threat must be shown.’” Shree Rama, 21 CIT at 1167, 983 F. Supp. at 194–95 (quoting Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (1983)). Failure as to this factor is grounds for denying injunctive relief. See, e.g., Sumecht, 923 F.3d at 1348.
A. Parties’ Contentions
Plaintiff presents three arguments as to why it will be irreparably harmed without an injunction. First, Plaintiff argues that its claims will be rendered moot and judicial review will be “a meaningless exercise” if the unliquidated entries of subject merchandise produced or exported by the five companies assigned a de minimis rate are liquidated before the conclusion of this case. Pl.’s Mot. at 12-13. Plaintiff acknowledges that liquidation of entries made on or after June 30, 2017 remains suspended by operation of the AD Order and pending administrative reviews thereof. Id. at 13. Nevertheless, Plaintiff argues, it will be harmed by liquidation of entries that entered between April 28, 2017 and June 30, 2017 and those that entered after June 30, 2017 due to “developments regarding the AD Order before the [c]ourt reaches a conclusion in this case.” Id. at 13-14. Second, Plaintiff argues that it will be harmed by the liquidation of Rustique’s and Fontaine’s entries at the rates established in the Final Results of Expedited Review because Rustique and Fontaine have withdrawn their requests to be included in the first administrative review of the CVD Order and no additional requests have been maintained. Id. at 16-18. Third, Plaintiff argues that revocation of the CVD Order as to the five companies with de minimis rates and reduced cash deposit rates for the three other companies increases the possibility of circumvention of the CVD Order, which will “further injure Plaintiff and the domestic industry.” Id. at 19.
Defendant and Defendant-Intervenors argue that Plaintiff’s motion must fail for lack of proof of irreparable harm; Plaintiff will not be harmed by liquidation, revocation, or changes to cash deposit rates; and its assertions regarding circumvention of the CVD Order are speculative. See Def.’s MTD and Opp’n to Inj. at 9-11; Fontaine’s Opp’n at 4-6; Gov’t of Canada’s Opp’n at 1-2, 3-4; Lemay’s Opp’n at 6-8. Fontaine further argues that any harm Plaintiff incurs respecting liquidation of Fontaine’s and Rustique’s entries “is of [its] own making” because the Coalition withdrew its request for an administrative review of those companies. Fontaine’s Opp’n at 5; see also id., Attach. 2 (the Coalition’s withdrawal of its request for an administrative review).
B. Plaintiff Has Not Met its Burden of Proving Irreparable Harm
Plaintiff’s assertions of harm arising from liquidation, revocation, or changes in the cash deposit rates are unsupported and unpersuasive.
First, Plaintiff has not shown that it will incur irreparable harm in connection with liquidation of entries without regard to countervailing duties for D&G, MLI, NAFP, Roland, and Lemay. Plaintiff attempts to analogize the effect of liquidation on the Coalition to the effect of liquidation during the pendency of a challenge to an administrative review. See Pl.’s Mot. at 12 (citing, inter alia, Zenith, 710 F.2d at 810). Challenges to administrative reviews differ from challenges to investigations, however, because they address dumping margins calculated on entries of subject merchandise for a specific period of review. See Zenith, 710 F.2d at 808. For that reason, the Zenith court concluded that liquidation constituted irreparable harm because the plaintiff, a domestic producer, would lose the “only remedy available to [it] for an incorrect review determination.” Id. at 810 (noting that liquidation would prevent the
“The emphasis throughout Zenith is on the liquidation of entries for a specific review period and the potential loss of plaintiff‘s remedy, i.e., the right to have the administrative determination reviewed, with respect to that specific period.” FMC Corp. v. United States, 3 F.3d 424, 431 (Fed. Cir. 1993). In contrast, the cash deposit rates established in an investigation are prospective because they affect future entries, “not just those made within a specific time period.” NSK Corp. v. United States, 31 CIT 1962, 1965 (2007) (citation omitted). Accordingly, liquidation of entries—without more—generally does not constitute irreparable harm in a challenge brought by a domestic producer to an investigation determination. See Trent Tube Div., Crucible Materials Corp. v. United States, 14 CIT 587, 588, 744 F. Supp. 1177, 1179 (1990) (citing cases finding that liquidation is insufficient to find irreparable harm in challenges by domestic producers to negative injury or dumping determinations, and finding same in the context of a request for an injunction by a domestic producer challenging an affirmative determination); Altx, Inc. v. United States, 26 CIT 735, 737, 211 F. Supp. 2d 1378, 1380 (2002) (discussing Trent Tube and denying motion for preliminary injunction filed by domestic producers challenging an affirmative injury determination).
The purpose of an expedited review “is to provide a noninvestigated exporter with its own cash deposit rate prior to the arrival of the first anniversary month of the order, at which point the exporter may request an administrative review,” Preamble, 62 Fed. Reg. at 27,321, therefore, the results of an expedited review are akin to a final investigation determination. If Plaintiff prevails in this case, the five companies excluded from the order by the expedited review would be reinstated in the CVD Order with the concomitant collection of cash deposits and suspension of liquidation. Thus, liquidation of entries during the interim period would not moot Plaintiff’s claims and, absent evidence demonstrating specific, irreparable harm from liquidation of those entries, Plaintiff is not entitled to an injunction barring liquidation of such entries.7
Plaintiff also has not demonstrated harm arising from the liquidation of Rustique’s and Fontaine’s entries. Assuming, arguendo, that Rustique’s and Fontaine’s entries will liquidate at the reduced rate established in the Final Results of Expedited Review,8 Plaintiff has not demonstrated irreparable harm. As noted by Fontaine, any harm that arises is self-inflicted as a
Plaintiff’s attempt to analogize this case to the circumstances underlying the court’s grant of a preliminary injunction in Fuyao Glass Industry Group Co., Ltd. v. United States, 27 CIT 1321, 1323 (2003), is unpersuasive. Pl.’s Mot. at 17-18. In Fuyao, the court found irreparable harm on the basis of liquidation when an exporter withdrew its own request for an administrative review subsequent to the initial determination. 27 CIT at 1321; cf. OKI Elec. Industry Co., Ltd. v. United States, 11 CIT 624, 631, 669 F. Supp. 480, 485 (1987) (finding irreparable harm to plaintiff/importer of subject merchandise and enjoining liquidation of entries at the challenged rate from the investigation when the plaintiff had withdrawn its request for an administrative review). Fuyao and OKI are distinguishable because the movants—importers/exporters of subject merchandise—had a direct financial stake in the rate at which entries would be liquidated. In contrast, here, the Coalition consists of domestic producers who have not provided any evidence of any harm from, or stake in, the liquidation of the entries at an allegedly erroneous rate. Moreover, judicial relief will continue to be available to Plaintiff if it prevails because future entries would be subject to the all-others rate established in the CVD Order pending a subsequent review.9 Accordingly, Plaintiff has not demonstrated that it would incur irreparable harm from the liquidation of Rustique’s and Fontaine’s entries.
Lastly, Plaintiff has not shown that it will be irreparably harmed by revocation of the order and the implementation of reduced cash deposit rates due to the potential for circumvention of the CVD Order. Put simply, Plaintiff’s speculative circumvention concerns do not present the type of “immediate and viable threat of irreparable harm” necessary for an injunction to issue. Otter Prods., LLC v. United States, 38 CIT __, __, 37 F. Supp. 3d 1306, 1315 (2014) (internal quotation marks and citation omitted). Plaintiff has not provided evidence demonstrating that circumvention is likely, or that Coalition members would be irreparably harmed by circumvention. Plaintiff also contends that because Commerce has found Matra to be uncreditworthy, there is an increased risk that CBP will not be able to collect duties owed if Plaintiff prevails. Pl.’s Mot. at 20. Besides being speculative, Plaintiff does not explain why Matra’s inability to pay duties harms the Coalition specifically, given that it is not the recipient of the duties.
In sum, Plaintiff has failed to offer persuasive arguments or any evidence demonstrating that it would be irreparably harmed in the absence of the temporary
CONCLUSION & ORDER
For the reasons discussed herein, the court VACATES the Temporary Restraining Order entered on July 15, 2019 (ECF No. 10) and DENIES Plaintiff’s motion for a preliminary injunction (ECF No. 6). Fontaine’s motion to modify the temporary restraining order (ECF No. 22) is DENIED AS MOOT.
/s/ Mark A. Barnett
Mark A. Barnett, Judge
Dated: July 26, 2019
New York, New York