Five Rivers Electronics Innovation, LLC v. United StatesFive Rivers Electronics Innovation, LLC v. United States
OPINION
Plaintiff challenges a decision by U.S. Customs and Border Protection (“Customs”) denying Plaintiff an offset distribution for fiscal year 2009 under the Continued Dumрing and Subsidy Offset Act of 2000, Section 754 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675c (2000) 1 (“CDSOA”), repealed by the Deficit Reduction Act of 2005, Pub.L. No. 109-171, Title VII, Subtitle F § 7601(a), 120 Stat. 154 (2005). Defendаnt has moved to dismiss Plaintiffs complaint pursuant to USCIT Rule 12(b)(5).
Background
The CDSOA directs that duties assessed pursuant to an antidumping duty order be distributed on аn annual basis to the “affected domestic producers [ADPs] for qualifying expenditures.” 19 U.S.C. § 1675c(a) (emphasis added). On May 29, 2009, Customs issued a notice of intent to distribute duties collected during fiscal year 2009 on color television receivers from China. Distribution of Continued Dumping and Subsidy Offset to Affected Domestiс Producers (“Distribution Notice ”), 74 Fed.Reg. 25,814 (U.S. Customs and Border Protection May 29, 2009). On July 23, 2009, Five Rivers filed a certification of qualified expenses in respоnse to the Distribution Notice, seeking a share of the CDSOA distributions for the 2009 fiscal year. Customs denied Five Rivers’ certification because Five Rivеrs did not produce the color television receivers during fiscal year 2009. On September 17, 2009, Five Rivers filed a request for reconsideration. Customs denied the request for reconsideration because Five Rivers had ceased production of the subject receivers, and therefore, under the statute and the applicable regulation, did not qualify as an ADP.
Standard of Review
When dеciding a USCIT Rule 12(b)(5) motion to dismiss for failure to state a claim upon which relief can be granted, the court assumes all factual allegations to be true and draws all reasonable inferences in plaintiffs favor.
Cedars-Sinai Med. Ctr. v. Watkins,
1583-84 & n. 13 (Fed.Cir.1993). Plaintiffs factual allegations, however, must be “enough to raise a right to relief above the speculative level on the Court No. 10-00201 Page 3 assumptiоn that all the allegations in the complaint are true (even if doubtful in fact).”
Bell Atlantic Corp. v. Twombly,
Discussion
The CDSOA defines an ADP as “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 rеspect to which an antidumping duty order ... has been entered, and (B) remains in operation.” 19 U.S.C. § 1675c(b)(l). The statute further provides thаt “[c]ompanies, businesses, or persons that have ceased the production of the product covered by the order or finding ... shall not be an [ADP].” Id. (emрhasis added). Customs, in turn, has further clarified this statutory production requirement: “Product no longer produced. A company, business оr person that has ceased production of the product covered by the antidumping duty order or finding, or countervailing duty order, i.e., did not manufacture that product at all during the fiscal yeаr that is the subject of the disbursement, is not an [ADP] under this section.” 19 C.F.R. § 159.61(b)(2)(f) (emphasis added).
There is no dispute that Plaintiff had ceased prоduction and did not manufacture color television receivers at all during fiscal year 2009. It is therefore difficult to imagine how Plaintiff could possibly qualify as an ADP under the CDSOA. Undaunted, Plaintiff challenges the validity of Customs regulation, arguing that
it is untenable that a producer who ‘remains in operation’ ... was not able to obtain a CDSOA disbursement simply because it was forced to cease production, especially when it did so because of the continued dumping of subject imports. To force a сompany that has been injured by the dumped imports to continue to produce subject product especially in thе face of continued dumping and other harsh economic conditions, not only defies logic but is contrary to the purpose behind the law, and could certainly not have been Congress’ intent.
Pl.’s Resp. in Opp’n to Def.’s Mot. to Dismiss at 8, ECF 18.
With all due respеct for Plaintiffs particular plight, these arguments ignore the plain language of the CDSOA, which excludes from ADPs those domestic producers that have “ceased production,” 19 U.S.C. § 1675c(b)(l)(B), and which plainly and unambiguously forces a company to continue to рroduce the subject product if that company wants CDSOA distributions. Part of Plaintiffs problem is that Plaintiff incorrectly assumes that the рrimary purpose of the CDSOA is to benefit all domestic producers without qualification. PL’s Resp. in Opp’n to Def.’s Mot. to Dismiss at 8. Thаt is simply not the case. The CDSOA has a much more limited pool of beneficiaries than all domestic producers. Congress placed specific conditions on who could qualify as an ADP, excluding those domestic producers that had “ceased production.” 19 U.S.C. § 1675c(b)(l)(B). In so doing, Congress explicitly favored domestic producers who remain in production ovеr those, like Plaintiff, that have not. Plaintiff unfortunately “ceased production.” The statute therefore mandates that Plaintiff may not qualify as an ADP. Much as Plaintiff would like, the court cannot rewrite the statute and eliminate the production requirement.
With that said, Customs’ additional regulatory clarification that an affected domestic producer must have been manufacturing the product “during the fiscal year that is the subject of the disbursement,” 19 C.F.R. § 159.61 (b)(2)(i), is not, as Plaintiff contends, an impermissible, gap-filling constructiоn of the CDSOA, but rather a straightforward implementation of the *1352 Congressional requirement that ADPs not have “ceased production.” At the time of the application for CDSOA distributions, prospective ADPs must certify, among other things, that they “remain in operation and continue to produce the product covered by the particular order.” 19 C.F.R. 159.63(b)(3)(iii). If they do, then they may qualify as ADPs, if thеy do not, they cannot qualify because they have “ceased production.” 19 U.S.C. § 1675c(b)(l)(B). It is simply not enough that Plaintiff “‘remained in оperation’ ... and maintains the capacity to sell the subject merchandise.” Compl. ¶ 24, ECF 4. By ceasing production Plaintiff disquаlified itself as an ADP. Customs’ denial of Plaintiffs CDSOA distribution was therefore correct, and Plaintiff cannot prevail in this action.
Conclusion
For the fоregoing reasons, Plaintiffs complaint fails to state a claim upon which relief can be granted. Accordingly, the court will enter judgment granting Defendant’s motion to dismiss and dismiss this action.
Notes
. Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions in Title 19 of the U.S.Code, 2000 edition.