Furniture Brands International, Inc. v. United StatesFurniture Brands International, Inc. v. United States
See Easterly v. Heritage Christian Sch., No. 1:08-cv-1714-WTL-TAB, 2009 WL 2750099, at *2-3 (S.D.Ind. Aug. 26, 2009) (examining similar arbitration provision and concluding that provision was not vague and ambiguous). Second, although Defendant apparently contends that the arbitration process will not be impartial, this concern does not invalidate the arbitration provision, particularly where Defendant has failed to point to any specific prejudice that it would suffer under § 701‘s arbitration provision. See Jenkins v. Trinity Evangelical Lutheran Church, 356 Ill.App.3d 504, 292 Ill.Dec. 195, 825 N.E.2d 1206, 1214 (2005) (rejecting partiality argument where plaintiff failed to point to any specific prejudice he would suffer under church bylaws, but instead simply expressed generalized fear of partiality); see also Easterly, 2009 WL 2750099, at *3 (“The Supreme Court has repeatedly counselеd that the FAA leaves no room for judicial hostility to arbitration proceedings and that courts should not presume, absent concrete proof to the contrary, that arbitration systems will be unfair or biased.“) (quoting Penn v. Ryan‘s Family Steak Houses, Inc., 269 F.3d 753, 758 (7th Cir.2001)). Consequently, the Court cannot find that legal constraints external to the parties’ agreement foreclose arbitration.
For the reasons discussed above, the Court concludes that the parties entered into a valid, enforceable agreement to arbitrate the underlying dispute. The Court therefore grants Plaintiff‘s Motion to Compel Arbitration.
III. Conclusion
ACCORDINGLY, the Court GRANTS Plaintiff‘s Motion to Compel Arbitration [3]. The Court ORDERS the parties to submit the underlying dispute to arbitration, as provided in Section 701 of the Discipline, and DIRECTS Defendant to participate in that dispute resolution process. The Court DIRECTS the Clerk to CLOSE this action.4
Patrick V. Gallagher, Jr., Attorney Advisor, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, for defendant United States International Trade Commission. With him on the briefs were James M. Lyons, General Counsel, and Neal J. Reynolds, Assistant General Counsel.
Joseph W. Dorn and Jeffrey M. Telep, King & Spalding LLP, of Washington, DC, for defendant-intervenors. With them on the briefs were Steven R. Keener and Taryn K. Williams. Of counsel on the briefs was Richard H. Fallon, of Cambridge, MA.
Before: Gregory W. Carman, Judge, Timothy C. Stanceu, Judge, Leo M. Gordon, Judge.
OPINION
STANCEU, Judge:
This case arises from decisions of the U.S. International Trade Commission (“ITC” or the “Commissiоn“) to deny plaintiff Furniture Brands International, Inc. (“Furniture Brands“) status as an “affected domestic producer” (“ADP“) under the Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA” or “Byrd Amendment“),
Before the court are four dispositive motions. Defendant-intervenors American Furniture Manufacturers Committee for Legal Trade and Vaughan-Bassett Furniture Company, Inc. and defendant Customs move for judgment on the pleadings under USCIT Rule 12(c). Def.-Intervenors’ Mot. for J. on the Pleadings (Feb. 23, 2011), ECF No. 72 (“Def.-intervenor‘s Mot.“); Defs. the United States & U.S. Customs & Border Protection‘s Mot. for J. on the Pleadings (May 4, 2011), ECF No. 95 (“Customs’ Mot.“). Defendant ITC moves under USCIT Rule 12(b)(5) to dismiss for failure to state a claim upon which relief can be granted. Def. U.S. Int‘l Trade Comm‘n‘s Mot. to Dismiss for Failure to State a Claim (May 2, 2011), ECF
The court determines that it has subject matter jurisdiction over this action and that no relief can be granted on the complaint. The court denies as futile plaintiff‘s motion to amend the complaint, and concludes that this action should be dismissed.
I. BACKGROUND
In 2005, Commerce issued an antidumping duty order on imports of wooden bedroom furniture from China. Antidumping Duty Order, 70 Fed.Reg. at 329. During proceedings before the ITC to determine whether such imports were causing or threatening to cause material injury to the domestic industry, Furniture Brands responded to the ITC‘s questionnaires, opposing the issuance of an antidumping duty order. U.S. Producers’ Questionnaire—Furniture Brands 2 (Sept. 3, 2004) (ITC Admin. R. Doc. No. 5), ECF No. 17; Second Supplemental Compl. ¶ 27. The ITC did not list Furniture Brands as an ADP with respect to this order for fiscal years 2006, 2007, or 2008. Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 71 Fed.Reg. 31,336, 31,375-76 (June 1, 2006); Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 72 Fed.Reg. 29,582, 29,622-23 (May 29, 2007); Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 73 Fed.Reg. 31,196, 31,236-37 (May 30, 2008).
In January 2007, plaintiff commenced this action to challenge the government‘s failure to provide it CDSOA distributions for fiscal year 2006. Compl. (Jan. 23, 2007), ECF No. 4. Customs and the ITC filed their answers to the complaint on March 28 and March 29, 2007, respectively. Answer (Mar. 28, 2007), ECF. No. 20 (answer of Customs); Answer (Mar. 28, 2007), ECF No. 21 (answer of thе ITC). Defendant-intervenors filed their answer on April 11, 2007. Answer (Apr. 11, 2007), ECF No. 28. The court then stayed this action pending a final resolution of other litigation raising the same or similar issues.2 Order (June 5, 2007), ECF No. 39. On December 12, 2007, the court lifted this stay for the limited purpose of allowing an amendment to the complaint to include a challenge to the denial of CDSOA distributions to plaintiff for fiscal year 2007. Order (Dec. 12, 2007), ECF No. 44; First Amended Compl. (deemed filed Oct. 18, 2007), ECF No. 45. On December 11, 2008, the court again lifted the stay for the limited purpose of allowing amendment of the complaint, this time to include a challenge to denial of CDSOA distributions to plaintiff for fiscal year 2008. Order (Dec. 11, 2008), ECF No. 50; Second Supplemental Compl.
Following the decision of the U.S. Court of Appeals for the Federal Circuit (“Court of Appeals“) in SKF USA Inc. v. United States, 556 F.3d 1337 (2009) (”SKF USA II“), cert. denied, --- U.S. ----, 130 S.Ct. 3273, 176 L.Ed.2d 1182 (2010), which addressed legal questions that are also present in this case, the court ordered plaintiff to show cause why this case should not be
During briefing on the various dispositive motions, plaintiff filed a letter notifying the court of a recent decision by the U.S. Supreme Court, which decision, according to plaintiff, “carries great significance for the pending motions to dismiss filed by the Defendants ... and the pending motion for judgment on the pleadings filed by the Intervenors.” Letter from Pl. to the Ct. 1 (July 8, 2011), ECF No. 105 (“Pl.‘s Additional Authority Letter“) (citing Sorrell v. IMS Health Inc., --- U.S. ----, 131 S.Ct. 2653, 180 L.Ed.2d 544 (2011)). Defendant-intervenors filed a reply to this letter, and both defendants responded to this letter in their reply briefs. Def.-intervenor‘s Resp. to Pl.‘s Supplemental Authority Letter (July 22, 2011), ECF No. 109; Defs. United States & U.S. Customs & Border Protection‘s Reply in Supp. of their Mot. to Dismiss For Failure to State a Claim upon Which Relief can be Granted 4-5 n. 3 (July 14, 2011), ECF No. 107; Def. U.S. Int‘l Trade Comm‘n‘s Reply to Pl.‘s Br. in Opp‘n to Mot. to Dismiss for Failure to State a Claim 11-13 (July 14, 2011), ECF No. 108. Subsequently, plaintiff filed another notice, this time informing the court of a decision reached by the U.S. District Court for the District of Columbia in a parallel action, in which plaintiff brought essentially the same claims it brings in this action, and requesting that the court transfer this action to that district court if subject matter jurisdiction is found lacking here.3 Pl.‘s Notice of Supplemental Authority & Clarification of Relief Sought (Aug. 16, 2011), ECF No. 110 (citing Furniture Brands Int‘l, Inc. v. U.S. Int‘l Trade Comm‘n, No. 11-00202, 804 F.Supp.2d 1, 2011 WL 3562890 (D.D.C. Aug. 15, 2011)). Only Customs replied to this second letter. Defs. United States & U.S. Customs & Border Protection‘s Resp. to Pl.‘s Notice оf Supplemental Authority & Clarification of Relief Sought (Aug. 30, 2011), ECF No. 111. Finally, plaintiff replied to Customs’ response. Pl.‘s Resp. to Customs’ Filing Regarding Pl.‘s Notice of Supplemental Authority & Clarification of Relief Sought (Sept. 6, 2011), ECF No. 112.4
II. DISCUSSION
The CDSOA amended the Tariff Act of 1930 (“Tariff Act“) to provide for the distribution of funds from assessed antidumping and countervailing duties to persons with ADP status, which is limited to petitioners, and interested parties in support of petitions, with respect to which antidumping duty and countervailing duty or-
ders
At issue in this case is the “petition support requirement” that the CDSOA imposes as a condition for obtaining distributions.
Comm‘n, 409 Fed.Appx. 327, 328-29 (Fed. Cir.2010) (”PS Chez Sidney II“) (summarily reversing the holding that the petition support requirement was unconstitutional).
Despite the decisions of the Court of Appeals, plaintiff maintains its constitutional claims, arguing that SKF USA II does not foreclose a constitutional challenge to the CDSOA based on facts that plaintiff alleges to differ materially from those on which SKF USA II was decided. Pl.‘s Mem. in Opp‘n to Def.-Intervenors’ Mot. for J. on the Pleadings 4-5 (Mar. 29, 2011), ECF No. 85. Plaintiff also seeks to amend its complaint to add two new claims, both of which it grounds in alleged facts under which plаintiff maintains that defendants, in denying plaintiff ADP status and CDSOA distributions, acted contrary to the CDSOA as interpreted by SKF USA II. Proposed Third Amended Compl. ¶¶ 60-67 (Mar. 29, 2011), ECF No. 84. Plaintiff moves to amend only in the alternative, preferring that the court dismiss this action for lack of subject matter jurisdiction. Pl.‘s Mot. 1-2.
A. The Court Has Jurisdiction Over Plaintiff‘s Complaint
Although invoking subject matter jurisdiction under section 201 of the Customs Courts Act of 1980 (“Customs Courts Act“),
Under paragraph (2) of
Paragraph (4) of
The CDSOA directs Customs to conduct an array of functions, including the depositing, maintaining, allocating, and distributing of antidumping and countervailing duties; specifically, Customs is to maintain the deposited antidumping and countervailing duties by order and to allocate and distribute these duties to ADPs annually as reimbursement for qualifying expenditures. See
The legislative history of the Customs Courts Act supports the court‘s exercise of
Plaintiff argues that jurisdiction over this action is lacking because the CDSOA does not “provide for administration or enforcement with respect to duties” but instead “provides for the distribution of funds collected from duties imposed, administered, and enforced by other statutory provisions.” Mem. of Law in Supp. of Pl.‘s Mot. to Dismiss for Lack of Subject Matter Jurisdiction, Or, in the Alternative, for Leave to Amend the Compl. 2-3 (Mar. 29, 2011), ECF No. 84 (“Pl.‘s Mem.“). Plaintiff‘s bright-line demarcation between collected antidumping and countervailing duties and “funds” is an artificial one that lacks support in the language Congress chose for the CDSOA, which uses the tеrm “duties” interchangeably with the term “funds.” See
Plaintiff cites a decision of the U.S. Court of Appeals for the District of Columbia Circuit, International Labor Rights, Education, & Research Fund v. Bush, 954 F.2d 745 (D.C.Cir.1992) (per curiam), in arguing that jurisdiction is lacking here. Pl.‘s Mem. 3-4. That case involved an action brought by human rights organizations and labor unions to compel Executive Branch enforcement of a provision in the Generalized System of Preferences (“GSP“) statute,
Upon considering the plain language of
B. Plaintiff Fails to State a Claim upon which Relief Can Be Granted
Plaintiff brings two claims in its Second Supplemental Complaint. Both are premised on the contention that the petition support requirement in the CDSOA is constitutionally impermissible. Plaintiff claims, first, that the ITC, in applying that requirement to deny Furniture Brands’ requests for ADP status, “disregarded this Court‘s rulings” in SKF USA I and PS Chez Sidney I. Second Supplemental Compl. ¶¶ 53-56. Second, plaintiff claims that Customs unlawfully ignored these two holdings in refusing to distribute CDSOA funds to Furniture Brands. Id. ¶¶ 57-59.
The Second Supplemental Complaint, filed October 8, 2008, predated the 2009 decisions of the Court of Appeals that overturned SKF USA I and PS Chez Sidney I. The court must now dismiss that complaint under USCIT Rule 12(b)(5) because the complaint does not “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.‘”12 Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). SKF USA II held that the CDSOA is valid under the First and Fifth Amendments to the U.S. Constitution. 556 F.3d at 1360 (“[T]he Byrd Amendment is within the constitutional power of Congress to enact, furthers the government‘s substantial interest in enforcing the trade laws, and is not overly broad.“); id. at 1360 n. 38 (“For the same reason, the Byrd Amendment does not fail the equal protection review applicable to statutes that disadvantage protected speech.“); id. at 1360 (“Because it serves a substantial government interest, the Byrd Amendment is also clearly not viоlative of equal protection under the rational basis standard.“). As the facts alleged in plaintiff‘s complaint admit, Furniture Brands did not indicate to the ITC, either by letter or through questionnaire response, support of the petition seeking antidumping duties on wooden bedroom furniture from China. Second Supplemental Compl. ¶¶ 27, 33, 44. Where, as here, an ITC injury determination was required and the ITC‘s records permit identification of those in support of a petition, the list of interested parties “in support of the petition with respect to which an antidumping order ... has been entered,”
Plaintiff advances several arguments why this action should not be dismissed. First, plaintiff argues that the Cоurt of Appeals adopted a construction of the CDSOA in SKF USA II under which it was impermissible for the ITC and Customs to deny Furniture Brands CDSOA distributions based solely on expression rather than on actions. Pl.‘s Mem. in Opp‘n to Defs. U.S. Customs & Border Protection & U.S. Int‘l Trade Comm‘n‘s Mots. to Dismiss 12-18 (Jun. 6, 2011), ECF No. 102 (“Pl.‘s June Opp‘n“) (citing SKF USA II, 556 F.3d at 1353). Plaintiff asserts as a fact that it was denied CDSOA distributions based solely on expression, i.e., its informing the ITC in a questionnaire response that it opposed the wooden bedroom furniture petition, rather than its actions, and that, in accordance with SKF USA II, that denial now must be found to be contrary to the First Amendment. Id. at 16-17.
Plaintiff‘s argument misinterprets the holding of SKF USA II. The case does not hold that an otherwise-eligible party may not be denied CDSOA distributions merely because the party expressed opposition to, or failed to express support for, a petition. It holds, instead, that the CDSOA, in imposing the petition support requirement, does not violate the First Amendment. The Court of Appeаls concluded that the CDSOA meets the appropriate First Amendment legal standard, which the Court of Appeals determined to be the standard applying to regulation of commercial speech. SKF USA II, 556 F.3d at 1354-55. The Court of Appeals did state, as plaintiff highlights, that “[t]he language of the Byrd Amendment is easily susceptible to a construction that rewards actions (litigation support) rather than the expression of particular views” and that “a limit-
ing
Plaintiff argues, next, that this court should apply strict scrutiny to the petition support requirement rather than the intermediate level of scrutiny applied by the Court of Appeals in SKF USA II. Pl.‘s June Opp‘n 18-22. Attempting to distinguish this case from SKF USA II, plaintiff argues that intermediate scrutiny is appropriate only for commercial speech, which, according to plaintiff, does not describe the nature of Furniture Brands’ opposition to the wooden bedroom furniture petition. Id. at 18. Plaintiff alleges that Furniture Brands’ “primary reasons for oрposing the petition ... were rooted in the company‘s public policy judgment that, in the long run, American industry would be harmed by the imposition of duties.” Id. (“[U]nlike SKF, this case concerns speech on matters of public concern, subject to strict scrutiny.“). In arguing that it has raised a valid as applied challenge, plaintiff again misinterprets SKF USA II. Neither the holding nor the reasoning of the case depends on the specific motivations of plaintiff SKF USA in opposing the petition then at issue. Instead, the case concluded that the established First Amendment standard for regulation of commercial speech was the correct legal test for determining the constitutionality of the CDSOA petition support requirement. SKF USA II, 556 F.3d at 1354-55. Discussing how the CDSOA applies generally to affected parties, and not referring specifically to the speech of SKF USA, the Court of Appeals reasoned that “[r]ewarding parties under the circumstances here is similar to commercially contracting with them to assist in the performance of a government function” and that “rewarding those who support government enforcement is at least constitutional if those provisions satisfy the standards governing commercial speech.” Id.
Next, plaintiff attempts to distinguish SKF USA II on the ground that Furniture Brands, unlike the plaintiff in SKF USA II, is not foreign-owned, arguing that the petition support requirement as applied to Furniture Brands is, in this respect, “[u]nconstitutionally [o]verbroad.” Pl.‘s June Opp‘n 22 (citing Central Hudson Gas & Electric v. Public Serv. Comm‘n of New York, 447 U.S. 557, 566, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980)). Alluding to language in SKF USA II in which the Court of Appeals reasoned that a purpose of the CDSOA was to prevent dumping, plaintiff bases its argument on the specific statement by the Court of Appeals that “Con-
gress
Plaintiff‘s argument that the CDSOA is unconstitutionally overbroad as applied to Furniture Brands is misguided in attempting to draw a distinction based on the ownership of a plaintiff challenging the CDSOA as violative of the First Amendment. The Court of Appeals reasoned that “the purpose of the Byrd Amendment‘s limitation of eligible recipients was to reward injured parties who assisted government enforcement of the antidumping laws by initiating or supporting antidumping proceedings.” SKF USA II, 556 F.3d at 1352. It further reasoned that “the Byrd Amendment directly advances the gоvernment‘s substantial interest in trade law enforcement by rewarding parties who assist in this enforcement,” id. at 1355, and that the CDSOA‘s effect on protected expression was not “overly broad,” id. at 1360. The Court of Appeals considered it permissible under the First Amendment for Congress to decline to reward domestic parties who did not support a petition. See id. at 1358. The Court of Appeals did not condition that conclusion on a circumstance in which the party declining to support the petition is foreign-owned. For its argument, plaintiff seizes on language in SKF USA II that is not part of the holding of the case. The language refers only to the likelihood that ownership by a respondent in an antidumping proceeding will be the reason why a party opposes a petition. Id. (“Opposing parties’ interests lie in defeating the petition, typically (as is the case here) becausе the domestic industry participant is owned by a foreign company charged with dumping.“). Nothing in SKF USA II indicates that the Court of Appeals confined its holding to CDSOA First Amendment challenges brought by foreign-owned plaintiffs. And as the court explained previously, the holding of the case does not attach significance to the reasons why an individual plaintiff who challenges the petition support requirement on First Amendment grounds actually opposed the petition.
Finally, plaintiff‘s July 8, 2011 submission draws the court‘s attention to the Supreme Court‘s recent decision in Sorrell v. IMS Health Inc. Pl.‘s Additional Authority Letter 1 (citing Sorrell v. IMS Health Inc., --- U.S. ----, 131 S.Ct. 2653, 180 L.Ed.2d 544). According to plaintiff, ”Sorrell holds that heightened scrutiny must be given to content-based regulations of commercial speech, and that in the ordinary course, such regulations cannot survive heightened scrutiny.” Id. Plaintiff argues that Sorrell “rejects key premises of” the decision of the Court of Appeals in SKF USA II “so that SKF can no longer be considered good law.” Id. Plaintiff argues in the alternative that “at the very least, Sorrell shows that the SKF decision must be read narrowly” suсh that Furniture Brands “is entitled to prevail on its First Amendment claim despite SKF.” Id. The court rejects both of these arguments.
Sorrell struck down a Vermont statute, the “Prescription Confidentiality Law,” that in its central provision,
Because the Vermont statute “is designed to impose a specific, content-based burden on protected expression,” the Supreme Court concluded that “heightened judicial scrutiny is warranted.” Id. at 2664. The Supreme Court concluded that, in light of the restrictions placed on disfavored speech, the commercial nature of the speech was not a reason for the statute to escape heightened scrutiny, id., under which “the State must show at least that the statute directly advances a substantial government interest and that the measure is drawn to achieve that interest,” id. at 2667-68. The Court decided that the Stаte of Vermont failed to make that showing. The Court reasoned that a purpose the State advanced in support of the statute, promoting medical privacy and physician confidentiality, does not suffice where, as here, the law allows wide dissemination of the information but prohibits its use by a narrow class of disfavored speakers, the detailers, and for a disfavored use, marketing. Id. at 2668. Another purpose the State advanced in support of the Prescription Confidentiality Law, reducing health care costs and promoting public health, also failed to justify the burden on speech. Id. In restraining certain speech by certain speakers, and specifically, in diminishing the ability of detailers to influence prescription decisions, the statute sought to influence medical decisions by keeping physicians from receiving the disfavored information. Id. at 2670. “As Vermont‘s legislative findings acknowledge, the premise of
The court disagrees with plaintiff‘s argument to the effect that Sorrell implicitly overturns SKF USA II. Nothing in the
Also unconvincing is plaintiff‘s argument that Sorrell compels a narrow reading of the holding in SKF USA II under which plaintiff, on the facts of this case, is entitled to prevail on its claims. To support this argument, plaintiff points again to the fact that Furniture Brands is not foreign-owned and to the reasons why Furniture Brands opposed the petition on wooden bedroom furniture. Pl.‘s Additional Authority Letter 3. Plaintiff essentially is repeating two of the arguments that it made in support of its “as applied” challenges to the CDSOA and that the court has rejected. Plaintiff asserts once more that it was denied Byrd Amendment distributions because of the content of its speech and, specifically, the viewpoint it expressed when opposing the petition. Id. For the reasons the court has explained, SKF USA II is controlling precedent in this сase, notwithstanding the alleged facts and circumstances on which plaintiff relies. Sorrell does not compel a “narrow reading” of SKF USA II under which the court may conclude that plaintiff‘s constitutional claims are not foreclosed by the SKF USA II holding.
C. Plaintiff‘s Motion to Amend the Complaint Is Properly Denied on the Ground of Futility
“When a party faces the possibility of being denied leave to amend on the ground of futility, that party must demonstrate that its pleading states a claim on which relief could be granted, and it must proffer sufficient facts supporting the amended pleading that the claim could survive a dispositive pretrial motion.” Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. de C.V., 464 F.3d 1339, 1354-55 (Fed.Cir.2006). The proposed new claims must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.‘” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).
Plaintiff seeks to add two new claims (Counts 3 and 4) to this action. Proposed Third Amended Compl. ¶¶ 60-67. Because neither Count 3 nor Count 4 makes out a plausible claim for relief under the set of facts alleged in the proposed Third Amended Complaint, adding these new claims would be futile. The court, therefore, will deny plaintiff‘s motion to amend.
In Count 3, plaintiff would claim that the government‘s denials of ADP status were contrary to the CDSOA as construed by the Court of Appeals in SKF USA II and therefore “not in accordance with law, in violation of
In Count 4, plaintiff seeks leave to claim that defendants’ determinations that plaintiff was ineligible for CDSOA distributions were “arbitrar[y] and capricious[], in violation of
III. CONCLUSION
The Second Supplemental Complaint must be dismissed for failure to state a claim upon which relief can be granted. The court will deny as futile plaintiff‘s motion to amend the complaint. Judgment dismissing this action will bе entered accordingly.
TIMOTHY C. STANCEU
JUDGE