This matter is before the court on Plaintiffs Impact Steel Canada Corporation, Impact Steel Canada Company, and Impact Steel, Inc.’s (“Plaintiffs”) motion for judgment upon the agency record and Defendant United States’ motion to dismiss. Plaintiffs are importers and exporter-resellers of certain corrosion-resistant carbon steel flat products from Canada. (Req. for Admin. Rev. (Aug. 31, 2004),
available at
Mem. of P. & A. in Supp. of Pis.’ Mot. for J. Upon the Agency R. (“Pis.’ Br.”) at Attach. 1 (P.R. 3).) Plaintiffs challenge the United States Department of Commerce’s (“Commerce”) interpretation of its regulations and resulting liquidation instructions as to antidumping duties on merchandise entered into the United States by resellers unaffiliated with a foreign producer. For the reasons stated below, the court finds its opinion in
Parkdale Int’l, Ltd. v. United States,
BACKGROUND
An antidumping duty order was first applied to these steel products in 1993, and Plaintiffs made entry of steel products subject to the order. See Certain Corrosion-Resistant Carbon Steel Flat Prods. & Certain Cut-to-Length Carbon Steel Plate From Canada, 58 Fed.Reg. 44,162 (Dep’t Commerce Aug. 19, 1993). Under 19 U.S.C. § 1675, administrative reviews of an antidumping duty order are granted only upon request in the “anniversary month” in which the relevant order was published. 19 U.S.C. § 1675(a)(1) (2000). If no administrative review is requested, Commerce’s regulation, 19 C.F.R. § 351.212(c)(1), governs the assessment of duties on entries subject to an antidump-ing duty order, including those of a reseller who exports subject merchandise to the United States. 19 C.F.R. § 351.212(c)(1) (2007). 1
On October 15, 1998, Commerce published notice and requested comments concerning its intention to clarify 19 C.F.R. § 351.212.
See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties,
63 Fed.Reg. 55,361
The Reseller Policy states that automatic liquidation at the cash-deposit rate of the producer will apply to a reseller, who does not have its own rate, only when no administrative review has been requested of either the reseller or the producer. Id. If a review is conducted of “a producer of the reseller’s merchandise where entries of the merchandise were suspended at the producer’s rate, automatic liquidation will not apply to the reseller’s sales.” Id. If Commerce determines that “the producer knew, or should have known, that the merchandise it sold to the reseller was destined for the United States,” the producer’s assessment rate will be used. Id. Otherwise, the reseller’s merchandise will be liquidated at the all-others rate, if no company-specific review was done of the reseller during that period. Id.
On August 3, 2004, Commerce provided notice of opportunity for interested parties to request an administrative review for the period of August 1, 2003 through July 31, 2004, specifically alerting them of the
Reseller Policy. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review,
69 Fed. Reg. 46,496 (Dep’t Commerce Aug. 3, 2004). After timely requests, Commerce initiated an administrative review of Impact Steel Canada Corporation and Impact Steel Canada, Ltd.
2
and the interested producers, Dofasco Inc. (“Dofasco”) and Stelco Inc. (“Stelco”).
See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in
Part, 69 Fed.Reg. 56,745 (Dep’t Commerce Sept. 22, 2004). Plaintiffs subsequently withdrew the request for administrative review, pursuant to 19 C.F.R. § 351.213(d)(1). (Withdrawal of Admin. Rev. Req. (Nov. 12, 2004),
available at
Pis.’ Br. at Attach. 2 (P.R. 10).) Pursuant to Plaintiffs’ withdrawal letter, Commerce rescinded the administrative review of Impact Steel Canada, Ltd., effective November 12, 2004.
See Notice of Rescission, in Part, of Antidumping Duty Administrative Review: Convsion-Resistant Carbon Steel Flat Products From Canada,
70 Fed.Reg. 17,648 (Dep’t Commerce Apr. 7, 2005). On February 9, 2005, Commerce sent instructions to United States Customs and Border Protection (“Customs”) to liquidate all entries of all firms except for those that requested an administrative review, including Impact Steel Canada, Ltd., Dofasco, and Stelco. (Liquidation Instructions (Feb. 9, 2005),
available at
Pis.’ Br. at Attach. 3 (P.R. 23).) Commerce published its final determination of the administrative review on March 16, 2006.
See Certain Corrosion-Resistant Carbon Steel Flat Products from Canada: Final Results of Anti-
STANDARD OF REVIEW
When deciding a motion to dismiss, the court assumes that “ ‘all well-pled factual allegations are true,’ construing ‘all reasonable inferences in favor of the nonmov-ant.’ ”
United States v. Islip,
DISCUSSION
Plaintiffs challenge Commerce’s interpretation of 19 C.F.R. § 351.212, as it relates to entries made in the United States of merchandise purchased from resellers who are unaffiliated with a foreign producer, as set forth in the Reseller Policy. Count I alleges that Commerce violated the Administrative Procedure Act (“APA”), 5 U.S.C. § 551 et seq., in issuing the Reseller Policy, that the “clarification” is irreconcilably inconsistent with § 351.212(c), and that it is arbitrary, capricious, and contrary to governing law. (See Pls.’ Br. 10-23; see also Pis.’ Compl. 7.) Plaintiffs also contend in Count II that the entries had already liquidated by operation of law when the Liquidation Instructions were issued, 3 and in Count III that the Liquidation Instructions are unlawful because they are not supported by the necessary knowledge determination, as required by the Reseller Policy. (See Pls.’ Br. 23-28; see also Pl.’ Compl. 7.) Defendant, the United States, challenges the court’s jurisdiction to adjudicate Plaintiffs’ action, and asserts a statute of limitations bar as well. (Def.’s Combined Mot. to Dismiss & Resp. to Pl.’s Mot. for J. Upon the Agency R. 2 (“Def.’s Br.”).)
A. Jurisdiction is proper under 28 U.S.C. § 1581(i) for facial challenges to Commerce’s Reseller Policy
The court previously addressed, in
Parkdale Int’l, Ltd. v. United States,
This Court is granted broad residual jurisdiction under 28 U.S.C. § 1581(i) to hear “any civil action commenced against the United States ... that arises out of any law of the United States providing for ... tariffs [or] duties ... on the importation of merchandise for reasons other than the raising of revenue,” and for cases challenging Commerce’s “administration and enforcement with respect to the matters referred to” in § 1581. 28 U.S.C. § 1581(i)(2), (4) (2000). Section 1581(i),
The government argues that in reality, Plaintiffs are challenging Commerce’s decision in its Final Results, not Commerce’s Liquidation Instructions, and therefore, Plaintiffs’ claims actually are based on a listed determination under 19 U.S.C. § 1516a(a)(2)(B), which should have been challenged pursuant to § 1581(c). (Def.’s Br. 16-17.) Plaintiffs counter that they are not challenging the final results of the administrative review, but the Reseller Policy and its application to the Liquidation Instructions. (Pls.’ Resp. to Def.’s Mot. to Dismiss and Reply Br. in Supp. of Pls.’ Mot. for J. Upon the Agency R. 1-2 (“Pls.’ Resp. Br.”).)
A court must “look to the true nature of the action ... in determining jurisdiction.”
Norsk Hydro Can., Inc. v. United States,
Additionally, policy concerns also demonstrate why jurisdiction is appropriate under § 1581(i). “Because a claim under the APA accrues at the time of ‘final agency action,’ 5 U.S.C. § 704, facial challenges to regulations and claims arising from a failure to comply with APA procedures accrue at the time the rule was published, not when the rule is applied to a plaintiff.” Id. (citation omitted). This encourages early court intervention, allowing for an agency to correct any errors before a new policy has been relied on widely. See id. at 1349. Requiring plaintiffs to raise this argument in an administrative review delays such a process, because years could pass before a party chooses to not participate in an administrative review to obtain its own rate, but instead flies a case brief challenging the application of the policy. See id. Such policy considerations weigh against finding that § 1581(c) jurisdiction covers this type of case. Accordingly, because the court finds no difference between the jurisdictional question at issue in Counts I and II and Parkdale II, and it finds the reasoning of Parkdale II sound, the court concludes it has jurisdiction as to Counts I and II under 28 U.S.C. § 1581(f).
Defendant asserts that, even assuming § 1581(i) jurisdiction could apply, Plaintiffs’ claim that Commerce did not follow
As to the APA procedural claim, because that claim was not made clearly in the complaint, the court cannot find that the government waived its right to assert the statute of limitations bar. Therefore, that claim, having accrued more than two years before the commencement of suit, is barred by the statute of limitations. Nonetheless, because of the lack of clarity in the filings of both parties, in the interest of judicial economy, the court will address the APA procedural claim as well.
In Count III of their complaint, Plaintiffs raise an alternative claim to invalidity of the
Reseller Policy.
They allege that Commerce’s
Liquidation Instructions
were unlawful because they were not supported by a knowledge determination as required by the
Reseller Policy.
(Pis.’ Br. 23-26; Pis.’ Compl. 7.) As to Count III, it appears to the court that Plaintiffs have failed to allege injury in fact necessary to establish that this claim presents a “case or controversy” within the meaning of Article III of the United States Constitution.
Ontario Forest Indus. Assoc, v. United States,
B. Plaintiffs’ motion for judgment on the agency record is denied because the Reseller Policy is not invalid or contrary to law
As to the merits of Count I, Plaintiffs argue that the
Reseller Policy
substantively alters the plain meaning of 19 C.F.R. § 351.212(c), and thus is inconsistent with the regulation, because it requires entries not subject to a review request to be liquidated at a rate different from the required deposit rate at the time of entry.
5
Plaintiffs
Plaintiffs’ argument, however, fails to acknowledge that the Reseller Policy addresses a particular situation that is not discussed in § 351.212, specifically, what the rate of liquidation would be for a reseller’s entries of a producer’s merchandise when (1) the producer’s cash-deposit rate was used for the reseller’s entries, (2) the producer, but not the reseller, is expressly subject to the administrative review, and (3) the producer did not know at the time of sale that the merchandise was destined for the United States. (Def.’s Br. 23-24.) The Reseller Policy defines what is covered by a request for an administrative review, and clearly articulates that the entries of merchandise of the subject producer, including that sold by resellers, are covered by a request for review concerning that producer and are not automatically liquidated.
Contrary to Plaintiffs’ assertion, the Reseller Policy does not replace the automatic liquidation provision of § 351.212(c)(1) by creating a new system for determining the assessment rate for entries previously subject to the original cash-deposit rate. Rather, the Reseller Policy merely fills a gap in the regulation by addressing a situation not specifically addressed therein. Parkdale II, 508 F.Supp.2d at 1353. Specifically, the policy explains how to assess duties on entries that are covered by administrative review requests because an assumption of some level of affiliation between the producer and reseller was made previously, but the entries are not covered by the rates determined for the producer in that review because the “affiliation” assumption does not hold. 7 Id. Accordingly, the Reseller Policy is not invalid for conflict with the regulation.
Furthermore, any procedural deficiencies with regard to the
Reseller Policy
are harmless. The APA requires for any proposed rulemaking that “notice of [the] proposed rule making [ ] be published in the Federal Register,” and that “interested persons [have] an opportunity to participate in the rule making through submission of written data, views, or arguments.” 5 U.S.C. § 553(b), (c) (2007). After considering the relevant information received,
As detailed in
Parkdale II,
it appears that Commerce satisfied each of these requirements when it issued the
Reseller Policy:
it published notice regarding its
Reseller Policy
in the Federal Register and requested comments, extended the comment period in 1998 and again in 2002, and published its final clarification with detailed responses to all the comments received.
See Reseller Notice,
Finally, the APA requires that any “agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” be held unlawful and set aside. 5 U.S.C. § 706(2)(A). Plaintiffs contend that the Reseller Policy is arbitrary, capricious, and contrary to law because it relies on factors Congress did not intend Commerce to consider and fails to consider important concerns identified by Congress in this area. (Pls.’ Br. 17-23.)
Plaintiffs contend that 19 U.S.C. § 1675(a)(1) and 19 C.F.R. § 351.212 sought to avoid uncertainty regarding assessment rates, additional -reviews, and a greater administrative burden. • (Pls.’ Br. 18-20 (stating that the amendment to § 1675 was “ ‘designed to limit the number of reviews in cases in which there is little or no interest, thus limiting the burden on petitioners and respondents, as well as the administering authority’ ”) (quoting H.R.Rep. No. 98-1156, at 181 (1984) (Conf. Rep.), as
reprinted in
1984 U.S.C.C.A.N. 5220, 5298).) Plaintiffs argue that under the current
Reseller Policy,
however, a reseller is more likely to request a review than under Commerce’s former practice, because it will be wary that its entries are not covered by the request for an administrative review of its producer. (Pls.’ Br. 20.) Plaintiffs emphasize that the
Reseller Policy
injects uncertainty into the decision making, because resellers no longer know the result of not requesting a review, as was the case when the automatic liquidation of entries was made at the cash-
As emphasized in
Parkdale II,
Congress’s concern with administrative efficiency is only one of a number of competing policy concerns Commerce needs to consider when it creates assessment rules and regulations, and other concerns, such as preventing “margin-shopping” and promoting accurate margin calculations, should also be considered.
Parkdale II,
Thus, there is no inconsistency of the Reseller Policy with either the governing statute or regulation.
CONCLUSION
For the foregoing reasons, Defendant’s Motion to Dismiss is granted as to Count III and denied as to Counts I and II. Plaintiffs’ Motion for Judgment on the Agency Record is denied as to Counts I and II.
JUDGMENT
This case having been submitted for decision and the court, after deliberation, having rendered a decision therein; now, in conformity with that decision,
IT IS HEREBY ORDERED that Defendant United States’ Motion to Dismiss is granted as to Count III and denied as to Counts I and II. Plaintiffs Impact Steel Canada Corporation, Impact Steel Canada Company, and Impact Steel, Inc’s. Motion for Judgment on the Agency Record is denied as to Counts I and II. Judgment on Counts I and II is entered for Defendant. Count III is dismissed.
Notes
. 19 C.F.R. § 351.212(c), provides:
(c) Automatic assessment of antidumping and countervailing duties if no review is requested.
(1)If the Secretary does not receive a timely request for an administrative review of an order (see paragraph (b)(1), (b)(2), or (b)(3) of § 351.213), the Secretary, without additional notice, will instruct the Customs Service to:
(i) Assess antidumping duties or countervailing duties, as the case may be, on the subject merchandise described in § 351.213(e) at rates equal to the cash deposit of, or bond for, estimated antidumping duties or countervailing duties required on that merchandise at the time of entry, or withdrawal from warehouse, for consumption; and
(ii) To continue to collect the cash deposits previously ordered.
(2) If the Secretary receives a timely request for an administrative review of an order (see paragraph (b)(1), (b)(2), or (b)(3) of § 351.213), the Secretary will instruct the Customs Service to assess antidumping duties or countervailing duties, and to continue to collect cash deposits, on the merchandise not covered by the request in accordance with paragraph (c)(1) of this section.
(3) The automatic assessment provisions of paragraphs (c)(1) and (c)(2) of this section will not apply to subject merchandise that is the subject of a new shipper review (see § 351.214) or an expedited antidumping review (see § 351.215).
19 C.F.R. § 351.212(c).
. Plaintiffs note that although the request included the name "Impact Steel Canada, Ltd.,” the actual name of the entity is Impact Steel Canada Company. (See Pls.’ Br. 8 n.3.)
. As will be explained, see infra note 6, the court views Count II as another aspect of the claim that the Reseller Policy is invalid, as alleged in Count I.
. As a responsive pleading has been filed, Plaintiffs have no automatic right to amend their complaint to remedy deficiencies. US-CIT R. 15(a). Accordingly, the court does not reach Defendant’s argument that such a claim cannot be raised under 28 U.S.C. § 1581 (i).
. Plaintiffs have cited to the explanatory language for the regulation and its reference to specific “entries.” (Pis.’ Br. 12 (”[I]f an entry is not subject to a request for a review, the Department will instruct the Customs Service to liquidate that entry and assess duties at the
. Similarly, Plaintiffs claim under Count II that Commerce's rescission of their administrative review, following Plaintiffs withdrawal of their request for review, provided notice to Customs of the lifting of the suspension of Plaintiffs’ entries. (Pls.’ Br. 26-28.) Plaintiffs contend, therefore, that because they were not covered by any administrative review, their entries liquidated by operation of law six months after Commerce’s rescission. (Id. at 27); see also 19 U.S.C. § 1504(d). Although Plaintiffs withdrew their administrative review request, entries of Dofasco and Stelco’s merchandise continued to be suspended under their respective requests for review until Commerce published its Final Results. Thus, assuming the Reseller Policy is valid, Plaintiffs' entries for merchandise produced by Dofasco and Stelco were not deemed liquidated by operation of law six months after Commerce’s rescission of Plaintiffs’ administrative review. Instead, they could be actively liquidated when Commerce published its Final Results and provided Liquidation Instructions to Customs thereafter.
. In this context the court uses "affiliation” as a short hand for the knowledge component of the Reseller Policy. This is not a reference to 19 U.S.C. § 1677(33).
