FURNITURE BRANDS INTERNATIONAL, INC., Plaintiff, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, et al., Defendants.
Civil Action No. 11-00202 (JDB).
United States District Court, District of Columbia.
Aug. 15, 2011.
JOHN D. BATES, District Judge.
David W. Debruin, Matthew E. Price, Jenner & Block LLP, Washington, DC, for Plaintiff.
Patrick V. Gallagher, U.S. International Trade Commission, Courtney Sheehan McNamara, David Samuel Silverbrand, U.S. Department of Justice, Washington, DC, for Defendants.
MEMORANDUM OPINION
JOHN D. BATES, District Judge.
Furniture Brands International, Inc. (plaintiff) has brought suit against Customs and Border Protection (Customs), the International Trade Commission
Plaintiff seeks a declaration, under the Declaratory Judgment Act,
Defendants have filed motions to dismiss for lack of subject matter jurisdiction, contending that the Court of International Trade (CIT) has exclusive jurisdiction pursuant to
BACKGROUND
I. Statutory Framework
Customs collects an antidumping duty when (1) the Commerce Department determines that a class or kind of foreign merchandise is ... sold in the United States at less than its fair value and (2) the ITC determines that a U.S. industry is, or is threatened with being, materially injured because of imports of that merchandise.
II. Plaintiff‘s Challenge to the CDSOA
In 2003, the ITC began investigating whether Chinese wooden bedroom furniture manufacturers were dumping their products on the U.S. market. Wooden Bedroom Furniture from China, 68 Fed. Reg. 63816, 63817 (Nov. 10, 2003). In relation to this investigation, plaintiff responded to the ITC‘s questionnaire and indicated that it was opposed to levying any antidumping duties on imports of Chinese wooden bedroom furniture. Compl. [Docket Entry 1] ¶ 31. Based on its investigation, the ITC ultimately issued an antidumping order against imported Chinese wooden bedroom furniture. Wooden Bedroom Furniture from the People‘s Republic of China, 70 Fed. Reg. 329 (Jan. 4, 2005). Because plaintiff opposed the imposition of this antidumping duty in its questionnaire, plaintiff was statutorily excluded from the list of affected domestic producers. See Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, 71 Fed. Reg. 31336 (June 1, 2006). Customs distributed funds under the wooden bedroom furniture antidumping duty in Fiscal Years 2006, 2007, and 2008. Plaintiff challenges its exclusion for each of those years.
Plaintiff filed a complaint in the CIT on January 23, 2007, claiming, like here, that it was entitled to a CDSOA distribution because the CDSOA‘s definition of affected domestic producer violates the First Amendment insofar as it requires a producer to support an antidumping duty in order to receive a distribution. CIT Compl., Furniture Brands Int‘l, Inc., No. 07-00026. At that time, plaintiff asserted that the CIT had exclusive jurisdiction pursuant to
In the wake of the Federal Circuit‘s rejection of plaintiff‘s First Amendment argument, plaintiff moved to dismiss its CIT action for lack of subject matter jurisdiction and filed an identical action in this Court. Again, plaintiff asks that this Court declare that the CDSOA is unconstitutional, order the ITC to name it an affected domestic producer, and order Customs to distribute to it a share of money from the antidumping fund. Defendants have moved to dismiss for lack of subject matter jurisdiction. Following that motion, this Court stayed briefing on the merits in order to first determine whether the Court has subject matter jurisdiction. Order [Docket Entry 18]. Defendant-intervenors then entered this litigation unopposed and, in addition to moving to dismiss for lack of subject matter jurisdiction, moved to dismiss or transfer the action under the first-to-file rule because of plaintiff‘s pending case in the CIT.
STANDARD OF REVIEW
District courts have the discretion to stay or dismiss a pending suit when
Moreover, it is well-established in the D.C. Circuit that [w]here two cases between the same parties on the same cause of action are commenced in two different Federal courts, the one which is commenced first is to be allowed to proceed to its conclusion first. Washington Metro. Area Transit Auth. v. Ragonese, 617 F.2d 828, 830 (D.C.Cir.1980) (citations omitted). The Circuit has warned against mechanically applying the first-filed rule if the second-filed action deserves priority, see Columbia Plaza Corp. v. Sec. Nat‘l Bank, 525 F.2d 620, 628 (D.C.Cir.1975), but [c]onsiderations of comity and orderly administration of justice dictate that two courts of equal authority should not hear the same case simultaneously, Ragonese, 617 F.2d at 830; see also Columbia, 525 F.2d at 626 (Sound judicial administration counsels against separate proceedings, and the wasteful expenditure of energy and money incidental to separate litigation of identical issues should be avoided.); Nat‘l Family Planning & Reprod. Health Ass‘n v. Sullivan, 1992 WL 345629 at *2 (D.D.C. 1992) (This principle of judicial comity is derived from the policies favoring the conservation of judicial resources as well as providing for the comprehensive disposition of litigation before the federal courts.).
DISCUSSION
Plaintiff readily acknowledges that it has a parallel action pending at the CIT. Pl.‘s Mem. in Opp. to Defs.’ Mot. to Dismiss [Docket Entry 15] at 12. In both cases, plaintiff contends that the CDSOA‘s definition of affected domestic producer violates the First Amendment and it seeks to compel Customs to disburse its share of the funds from the segregated antidumping duty account. Accordingly, there is no question that this Court is presented with the second of two cases between the same parties on the same cause of action. Ragonese, 617 F.2d at 830. In such situations, [d]istrict courts have the discretion to stay or dismiss a pending suit. Poku v. FDIC, 752 F.Supp.2d 23, 28 (D.D.C. 2010) (citing Handy, 325 F.3d at 349).
Plaintiff nonetheless contends that the Court has an independent obligation to assess its jurisdiction over this case, and that determination cannot give way to prudential considerations. Pl.‘s Mem. in Opp. to Def.-Ints.’ Mot. to Dismiss [Docket Entry 27] at 12. Plaintiff‘s contention, however, directly contravenes Sinochem Int‘l Co. Ltd. v. Malaysia Int‘l Shipping Corp., 549 U.S. 422 (2007), which firmly establishes that certain non-merits, nonjurisdictional issues may be addressed preliminarily, because ‘[j]urisdiction is vital only if the court proposes to issue a judgment on the merits.’ Public Citizen v. U.S. Dist. Court for the Dist. of Columbia, 486 F.3d 1342, 1348 (D.C.Cir.2007) (quoting Sinochem, 549 U.S. at 431). Plaintiff, with good reason, does not dispute that the first-to-file rule is one such non-merits, nonjurisdictional issue[ ]. Id.; see, e.g., Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 606 (5th Cir.1999)
At oral argument, plaintiff introduced five cases which it contends are examples where courts found that it was necessary to determine jurisdiction before considering whether to dismiss or transfer on first-to-file grounds. None of these cases, however, suggest that this Court must examine its subject matter jurisdiction before dismissing on first-to-file grounds. Three of the cases are simply examples where courts explained the first-to-file rule using the phrases obtain jurisdiction and acquire jurisdiction in a non-technical manner to mean when the plaintiff commenced the action. See Nw. Airlines, Inc. v. Am. Airlines, Inc., 989 F.2d 1002, 1004 (8th Cir.1993) ([T]he district court first obtaining jurisdiction over the parties should proceed to adjudicate the controversy.); Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir.1982) ([T]he court which first acquired jurisdiction should try the lawsuit.); O‘Hare Int‘l Bank v. Lambert, 459 F.2d 328, 331 (10th Cir.1972) ([T]he first federal district court which obtains jurisdiction of parties and issues should have priority.). For example, the Pacesetter court explained that by acquired jurisdiction it was referring to when the federal action [was] commenced, not when the court decided that it had subject matter jurisdiction. 678 F.2d at 96 n. 3. Notably, none of these three courts actually discussed whether a court was required to address subject matter jurisdiction before turning to the first-to-file rule. Hence, these cases do not present any authority for the proposition that a court must decide its subject matter jurisdiction before dismissing on first-to-file grounds.
Although the other two cases that plaintiff introduced at oral argument discuss whether a court must determine its subject matter jurisdiction before relying on the first-to-file rule, those cases are similarly inapposite. In Zavanna, LLC v. RoDa Drilling Co., 2009 WL 3720177 (D.N.D. 2009), the court discussed whether it had the power to transfer a case based on first-to-file considerations when it lacked subject matter jurisdiction. That court, however, was merely addressing whether a court lacking subject matter jurisdiction can[] transfer a case to another court under
Similarly, in Patterson v. Drews, 2009 WL 2474687 (N.D.Cal. 2009), the court stated that the ‘first to file’ rule is a doctrine allowing a district court to transfer, stay or dismiss a complaint over which it does have jurisdiction when a similar complaint has been filed in another district court. Id. at *4 (citing Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 623 (9th Cir. 1991)). That court, however, appears to miscite Alltrade for that proposition, which says nothing about whether a court must have jurisdiction in order to dispose of a case on first-to-file grounds. See 946 F.2d at 623 (noting that the ‘first to file rule,’ ... allows a district court to transfer, stay, or dismiss an action when a similar complaint has already been filed in another federal court, without mentioning anything about its jurisdiction). The Patterson court also suggests that a court must determine its jurisdiction because jurisdiction
It is worth noting that in Zavanna and Patterson the courts were clearly devoid of subject matter jurisdiction. That is not the case here. When subject matter jurisdiction is clearly lacking, it conserves judicial resources to dismiss a case for lack of subject matter jurisdiction. Plaintiff, however, cites no case where a court facing an open question regarding subject matter jurisdiction found that it must first determine its subject matter jurisdiction before relying on the first-to-file rule. And that jurisdictional dispute lies at the heart of plaintiff‘s dual filings. Indeed, it is difficult to imagine that a court would find that it must first determine subject matter jurisdiction when the very basis of the first-to-file rule is the avoidance of the wasteful expenditure of energy and money incidental to separate litigation of identical issues. Columbia, 525 F.2d at 626.
Plaintiff further contends that, even if the Court is not required to decide jurisdiction, the first-to-file rule should not be applied when subject matter jurisdiction lies exclusively in the second-filed court.3 Pl.‘s Opp. to Def.-Ints.’ Mot. to Dismiss 10. That argument, however, begs the question of which court should decide the jurisdictional question. Plaintiff treats the jurisdictional question as if the CIT is clearly devoid of jurisdiction. The CIT, however, has taken jurisdiction in many other similar CDSOA claims. See, e.g., SKF USA, Inc. v. United States, 451 F.Supp.2d 1355 (Ct. Int‘l Trade 2006); Chez Sidney, L.L.C. v. U.S. Int‘l Trade Comm‘n, 442 F.Supp.2d 1329 (Ct. Int‘l Trade 2006). Indeed, the one other district court in which a party attempted to challenge the CDSOA found that Congress has vested exclusive jurisdiction over this matter with the [CIT] pursuant to
Not only is the CIT the first-filed court, but it is the court that is far better-positioned to decide this jurisdictional issue. In deciding which court should proceed first when presented with parallel filings, the D.C. Circuit has explained that it does not automatically favor[] the first-filed action ... because countervailing equitable considerations, where present, cannot be ignored. Columbia Plaza, 525 F.2d at 627. In Columbia Plaza, the court looked
Moreover, other equitable considerations show that the CIT is the better forum to decide whether CDSOA distributions under
Indeed, the CIT has many similar challenges still pending before the same three-judge panel. See Furniture Brands Int‘l., No. 07-00026, Order to Show Cause (Jan. 3, 2011) (ordering forty-five other similar cases to show cause why they should not be dismissed). This three-judge panel, which is handling all similar challenges, further evidences the CIT‘s expertise in the matter. Moreover, whether or not parties in those matters challenge subject matter jurisdiction, the CIT necessarily will confront that issue if it rules on the merits in those cases. As this Court has explained, when another court is actively wrestling with the issues presented by multiple parties, it is [f]ar better for the litigation to proceed in a single location as the possibility of inconsistent results cannot be ignored. Entines v. United States, 495 F.Supp.2d 84, 86 (D.D.C. 2007). Because equitable considerations favor the CIT for determining the threshold jurisdictional issue, and because the CIT is the first-filed court, this Court will defer to the litigation at the CIT and dismiss this case.4
CONCLUSION
This Court will avoid duplicative litigation by deferring to the CIT to resolve this case. Hence, for reasons of comity and judicial economy, the Court will dismiss plaintiff‘s complaint without prejudice. A separate Order accompanies this Memorandum Opinion.
JOHN D. BATES
UNITED STATES DISTRICT JUDGE