United States v. Univar USA, Inc.United States v. Univar USA, Inc.
Lucius B. Lau, White & Case LLP, of Washington, DC, argued for defendant. With him on the brief were Gregory J. Spak and Dean A. Barclay, of Washington, DC, and Fernando L. Aenlle-Rocha, of Los Angeles, CA.
MEMORANDUM AND ORDER
Barnett, Judge:
The case is before the court on cross-motions for partial summary judgment. Univar‘s Mot. for Partial Summ. J. (“Def.‘s PMSJ“), ECF No. 18; Confidential Pl.‘s Opp‘n to Univar‘s Mot. for Partial Summ. J. and Cross-Mot. for Partial Summ. J. (“Pl.‘s Opp‘n and XMSJ“), ECF No. 30. In this case, Plaintiff, United States, seeks to recover unpaid antidumping duties and a monetary penalty pursuant to
BACKGROUND
Between July 9, 2007, and April 3, 2012, Univar made 36 entries of saccharin into the United States at various ports around the country. Compl. ¶ 7; Answer ¶ 7, ECF No. 8.4 Prior to 2003, Univar imported
CBP, through U.S. Immigration and Customs Enforcement, Homeland Security Investigations, began investigating Univar‘s imports of saccharin from Taiwan in 2009. Univar‘s Rule 56.3 Statement in Supp. of its Mot. for Partial Summ. J. (“Def.‘s SOF“) ¶¶ 5, 7, ECF No. 18-3; Confidential Pl.‘s Rule 56.3 Statement in Supp. of its Opp‘n to Univar‘s Mot. for Partial Summ. J. and Cross-Mot. for Partial Summ. J. (“Pl.‘s SOF“) ¶¶ 5, 7, ECF No. 30-1; see also Compl. ¶ 20; Answer ¶ 20. In July 2011, Kinetic Industries, Inc. (“Kinetic“) brought a qui tam action pursuant to the False Claims Act,
- Lung Huang,6 Univar‘s supplier in Taiwan, was not licensed to manufacture sodium saccharin in Taiwan. Am. Penalty Notice at 5.
- High Trans Corp. (“HTC“) was the only licensed manufacturer of saccharin in Taiwan. Confidential Aff. of Special Agent Wally Tsui in Supp. of Pl.‘s Opp‘n. to Univar‘s Mot. for Partial Summ. J. (“Tsui Aff.“), ECF No. 30-11, Ex. 1 (“Department of Homeland Security (“DHS“) ROI No. 18“) at 34, ECF No. 30-12.
- HTC, a company producing saccharin in Kaohsiung City, Taiwan, made a limited number of sales to Lung Huang in 2005, for export to the United States. DHS ROI No. 18 at 63; see also Def.‘s SOF ¶ 64; Pl.‘s SOF ¶ 64.
- As of August 29, 2010, HTC‘s only U.S. customer for saccharin was Rit-Chem. DHS ROI No. 18 at 63.
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The Lung Huang factory address provided by William Huang was a residential building. DHS ROI No. 18 at 73; Am. Penalty Notice at 5.
CBP concluded that there was a sufficient correlation between imports into Taiwan from China and exports from Taiwan to Univar to indicate that Univar‘s imports were simply being transshipped from China, through Taiwan, to the United States. Am. Penalty Notice at 5.
CBP issued a pre-penalty notice on July 21, 2014, followed by a penalty notice on October 1, 2014, and a revised penalty notice on February 10, 2015 (collectively, “penalty notices“). Pre-Penalty Notice; Penalty Notice; Am. Penalty Notice. Univar filed a petition for relief on October 31, 2014 and an amended petition on March 23, 2015 and CBP issued a final decision responding to both petitions on June 15, 2015. Def.‘s PMSJ, Ex. 30 (“CBP Decision Letter“), ECF No. 18-34.
Plaintiff, United States, filed a Summons and Complaint in this action on August 6, 2015. Summons, ECF No. 1; Compl. Parties have filed cross-motions for partial summary judgment and the motions are fully briefed. Def.‘s PMSJ; Pl.‘s Opp‘n and XMSJ. Both parties have also filed U.S. Court of International Trade (“USCIT“) Rule 56(d) declarations asking the court to defer or deny the other party‘s partial motion for summary judgment because relevant discovery is ongoing. See Pl.‘s Suppl. Br., Decl. of Stephen C. Tosini (“Pl.‘s 56(d) Decl.“), ECF No. 75-1; Univar USA Inc.‘s Reply in Supp. of its Mot. for Partial Summ. J. (“Def.‘s Reply“), ECF No. 36., Decl. of Lucius B. Lau in Supp. of Univar USA Inc.‘s Rule 56(d) Request (“Def.‘s 56(d) Decl.“), ECF No. 36-6. After the conclusion of briefing and with leave from the court, Plaintiff filed a supplemental brief, to which Defendant provided a response. Pl.‘s Suppl. Br., ECF No. 75; Univar USA Inc.‘s Resp. to Pl.‘s Suppl. Br. (“Def.‘s Resp. to Pl.‘s Suppl. Br.“), ECF No. 76. The court heard oral argument on October 12, 2016. Docket Entry, ECF No. 77.
After oral argument, Defendant filed two separate motions for leave to file supplemental briefs and both motions are fully briefed. Univar USA Inc.‘s Mot. for Leave to File Suppl. Br. (“Def.‘s First Req.“), ECF No. 79; Pl.‘s Opp‘n to Def.‘s First Req., ECF No. 80; Confidential Univar USA Inc.‘s Second Mot. for Leave to File a Suppl. Br. (“Def.‘s Second Req.“), ECF No. 82; Pl.‘s Opp‘n to Def.‘s Second Mot. for Leave to File Suppl. Br., ECF No. 86.
JURISDICTION AND STANDARD OF REVIEW
This case is brought by the United States against Univar to recover unpaid antidumping duties and a monetary penalty owing from allegedly transshipped saccharin from China through Taiwan pursuant to
The Court of International Trade reviews all issues in actions brought for the recovery of a monetary penalty pursuant to section 1592 de novo and on the basis of the record made before the court.
Summary judgment is appropriate upon motion “after adequate time for discovery” has elapsed and “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a
The court must view the evidence in the light most favorable to the nonmovant and may not weigh the evidence, assess the credibility of witnesses, or resolve issues of fact. See Anderson, 477 U.S. at 249, 255; Netscape Comm.‘s Corp. v. Konrad, 295 F.3d 1315, 1319 (Fed. Cir. 2002) (“When ruling on a motion for summary judgment, all of the nonmovant‘s evidence is to be credited and all justifiable inferences are to be drawn in the nonmovant‘s favor.“) (citations omitted). In a case such as this, when discovery is ongoing, courts must also evaluate whether “adequate time for discovery” has elapsed so that the nonmovant is not “railroaded by a premature motion for summary judgment.” Celotex Corp., 477 U.S. at 322, 326 (internal quotation marks omitted).
A party opposing summary judgment because “it cannot present facts essential to justify its opposition” may ask the court to defer consideration of or deny the motion while it continues discovery. USCIT Rule 56(d) (allowing the court to defer or deny the motion, grant further time for discovery, or issue any other appropriate order); see also Celotex Corp., 477 U.S. at 326; Baron Servs., Inc. v. Media Weather Innovations LLC, 717 F.3d 907 (Fed. Cir. 2013) (addressing
I. Plaintiff may develop additional evidence during discovery beyond that upon which the administrative proceeding was based
The premise underlying Defendant‘s motion for partial summary judgment is that, in an action commenced pursuant to
A penalty proceeding before the court is conducted de novo, with the burden of proof based upon the level of culpability alleged in the penalty claim.
Defendant asserts that the government cannot enforce claims before the court that were not administratively exhausted before CBP. Def.‘s PMSJ at 19-23. However,
Section 1592 penalty proceedings are tried de novo on the basis of the record developed before the court; they are not record reviews of an administrative proceeding, but rather litigation on a claim made by the agency.
II. Defendant‘s motion for partial summary judgment is denied
Defendant argues that the material facts disclosed by CBP in its penalty notices fail to establish gross negligence or negligence with respect to the 23 entries that predate March 2010. Def.‘s PMSJ at
To support its position, Plaintiff filed a series of exhibits with the court, including affidavits and reports prepared by DHS personnel responsible for the underlying investigation. See generally, Confidential Aff. of Special Agent Patrick Deas in Supp. of Opp‘n. to Def.‘s Mot. for Summ. J. (“Deas Aff.“), ECF No. 30-2 (and accompanying exhibits); Confidential Aff. of Special Agent Kyle Maher in Supp. of Opp‘n. to Def.‘s Mot. for Summ. J. (“Maher Aff.“), ECF No. 30-9 (and accompanying exhibits); Tsui Aff. (and accompanying exhibits); Confidential Decl. of Stephen C. Tosini (“Tosini Decl.“), ECF No. 30-20 (and accompanying exhibits). Defendant contests the admissibility of Plaintiff‘s evidence. Def.‘s Reply at 4-6. Plaintiff has not had an opportunity to respond to Defendant‘s objections to its affidavits, declarations and reports with respect to the 23 entries because the objections were raised in Defendant‘s reply. See Def.‘s Reply at 4-6.
As the moving party, Defendant has the burden to show that there are no material facts in dispute related to its claim. See Celotex Corp., 477 U.S. at 323. In this case, Defendant may discharge this burden by showing that there is an absence of evidence supporting Plaintiff‘s case. See id. at 325. However, when discovery is ongoing, the court must consider whether adequate time for discovery has elapsed so that the non-movant is not unfairly disadvantaged by a premature summary judgment motion. See id. at 322, 326.
Defendant contends that Plaintiff is unable to produce any evidence showing entries of allegedly transshipped saccharin prior to March 2010 (as set forth in the Taiwanese customs data). Discovery, however, is not complete. Both parties are continuing to depose witnesses. See, e.g. Pl.‘s Suppl. Br.; Def.‘s Resp. to Pl.‘s Suppl. Br.; Univar USA‘s Mot. for Leave to file Suppl. Br.; Pl.‘s Opp‘n to Def.‘s Mot. for Leave to file Suppl. Br. Additionally, the court issued letters rogatory seeking admissible testimony from William Huang and Guan-fu Lai (a representative of HTC) in Taiwan and responses to those letters remain outstanding. Confidential Request for Int‘l Judicial Assistance (June 21, 2016), ECF No. 50; Request for Int‘l Judicial Assistance (June 21, 2016), ECF No. 51; see also Pl.‘s Suppl. Br. at 2 (the letters rogatory have been received by the relevant Taiwanese district courts and remain pending). Further, Plaintiff has represented that it is in the process of procuring certified statements from Taiwanese authorities pertaining to saccharin production, manufacture or repackaging in Taiwan during the relevant period, data on
As the movant, Defendant has the burden to show that there is an absence of evidence supporting Plaintiff‘s case. However, when that alleged absence may be the result of incomplete, ongoing discovery, the court may properly deny the partial summary judgment motion on the basis of an affidavit or declaration from the nonmoving party showing that, for specified reasons, it cannot present facts to justify its opposition. USCIT Rule 56(d). In this case, the United States has, in the alternative, made such a declaration and, as discussed above, discovery is ongoing.
Defendant also raises evidentiary issues with the Taiwanese customs data and the affidavits and declarations submitted as part of Plaintiff‘s response. Def.‘s Reply at 4-9; see also Univar USA Inc.‘s Resp. to Pl.‘s Rule 56.3 Statement, ECF No. 36-1. Defendant argues that, contrary to Plaintiff‘s position, the Taiwanese customs data does not constitute habit evidence and that, even if it met the requirements of “habit” pursuant to FRE 406, it could not be used to infer that Lung Huang transshipped Chinese saccharin prior to 2010 because habit evidence is customarily used to infer prospective conduct and the Taiwanese customs data only provides information for the period 2010-2012. Def.‘s Reply at 6-9. Defendant claims that the affidavits and declarations put forth by Plaintiff in support of its position are inadmissible hearsay and therefore do not meet the requirements of USCIT R. 56(c)(1) that a party asserting that a material fact is in dispute cite to particular parts of the record and admissible evidence to support its claim. Def.‘s Reply at 4-8; see also USCIT R. 56(c)(1). The court need not resolve these evidentiary issues at this time. Material facts remain in dispute and discovery is ongoing. Whether Plaintiff will obtain sufficient admissible evidence with respect to the 23 pre-March 2010 entries to make its case is to be determined at some future date. In the interim, discovery is ongoing and Defendant‘s motion for partial summary judgment is denied.
III. Plaintiff‘s motion for partial summary judgment is denied
Plaintiff argues that it has established Defendant‘s liability pursuant to section 1592(a) with respect to the 13 entries of saccharin that occurred after March 2010 and liability for antidumping duties and statutory interest on those entries. Pl.‘s Opp‘n and XMSJ at 26-30. Plaintiff references the Taiwanese customs data in conjunction with its evidence that Lung Huang could not have produced the subject merchandise to argue that the post-March 2010 entries were of Chinese origin. See id. at 3-6, 26. Plaintiff then argues that Univar was negligent and breached its duty of reasonable care when, “in light of repeated warnings,” Univar “took no action other than to ask the alleged transshipper whether its merchandise was manufactured in Taiwan,” and “further discarded its own policy of conducting regular audits of and site visits to foreign plants.” Id. at 26, 27-29. Defendant responds that Plaintiff‘s affidavits and declarations submitted in support of its argument are based upon inadmissible hearsay
As the moving party for partial summary judgment with respect to these entries, Plaintiff has the burden to show that there are no disputed material facts and further, that it is entitled to judgment as a matter of law. Plaintiff has failed to carry that burden.
In support of its claim, Plaintiff relies on the arguments it made in response to Defendant‘s partial motion for summary judgment, and offers the court nothing further. Compare Pl.‘s Opp‘n and XMSJ at 26 (“as shown above, those 13 entries are all of Chinese origin saccharin” referring to 13 post-March 2010 entries) with Pl.‘s Opp‘n and XMSJ at 15-18 (discussing evidence establishing Chinese origin of 23 pre-March 2010 entries). To wit, Plaintiff contends that the combination of the Taiwanese customs data, together with CBP‘s finding that the only authorized Taiwanese manufacturer of saccharin, HTC, did not sell to Univar, demonstrates the Chinese origin of the 13 post-March 2010 entries. See Pl.‘s Opp‘n and XMSJ at 15-18, 26. In response, Defendant questions the relevance of Taiwanese customs data, noting that the saccharin Lung Huang imported from China is a different size than the saccharin Lung Huang exported to Univar and that it is not possible to correlate all of the Chinese imports into Taiwan with all of the exports from Lung Huang to the United States. Def.‘s Resp. at 5-6.
Plaintiff‘s argument regarding the Taiwanese customs data rests on correlating Lung Huang‘s saccharin imports into Taiwan from China with its saccharin exports from Taiwan to Univar in the United States. According to Plaintiff, the shipments are correlated by weight and date of import. Pl.‘s Opp‘n and XMSJ at 5-6, 16-17. The Taiwanese customs data also includes information on the mesh or size of the sodium saccharin grain imports and exports. Taiwan Customs Data at 3-4; see Def.‘s Reply at 7 (noting that mesh connotes size). Defendant argues that Plaintiff cannot tie each export to the United States with a correlated prior import from China because the total weight and size of the preceding imports from China did not always correspond with the weight and size of the exports to the United States. Def.‘s Resp. 6-7.
As indicated above, Plaintiff also argues that Univar‘s saccharin entries from 2007 to 2012 could not have been of Taiwanese origin because Lung Huang was not licensed to manufacture saccharin in Taiwan during this time, because Lung Huang allegedly lacked a manufacturing facility during this time, and because HTC was the only licensed manufacturer of saccharin in Taiwan during this period and it did not sell saccharin to Univar. Pl.‘s Opp‘n and XMSJ at 17-18; Pl.‘s Reply at 5. Defendant asserts that Plaintiff has not put forth any Taiwanese regulation that required licensing of saccharin manufacturing facilities and that Lung Huang‘s alleged lack of such license does not mean it did not manufacture saccharin in Taiwan. Def.‘s Resp. at 7. Further, Defendant argues that Plaintiff‘s evidence regarding HTC is inadmissible because it contains hearsay and, in any event, HTC‘s statement regarding its only U.S. customer cannot be used to demonstrate that the statement remained true any time after it was made. Id. at 7.
Plaintiff has failed to demonstrate a lack of disputed material facts with regard to the claims on which it seeks partial summary judgment. As is the case with Defendant‘s motion for partial summary judgment, discovery is ongoing and Defendant has adequately established that this motion must be denied to allow this discovery to continue.11
Plaintiff also argues that Univar is liable for antidumping duties and statutory interest on the 13 post-March 2010 entries because of “uncontroverted proof of Univar‘s violation with respect to these 13 entries, all of even [sic] which post-date the target letter.” Pl.‘s Opp‘n and XMSJ at 29. Because questions of fact remain regarding the country of origin of Univar‘s entries, and, in light of the outstanding discovery, partial summary judgment with regard to antidumping duty liability is similarly inappropriate at this time and is, therefore, denied.
IV. Defendant‘s motions for leave to file supplemental briefs are denied as moot
Confirming the premature nature of both summary judgment motions, parties have continued to supply the court with briefs and allegedly undisputed facts on the basis of ongoing discovery. See Def.‘s First Req.; Pl.‘s Opp‘n to Def.‘s First Req.; Def.‘s Second Req.; see also Pl.‘s Suppl. Br.; Def.‘s Resp. to Pl.‘s Suppl. Br. In light of the denial of the cross motions for partial summary judgment, the Defendant‘s pending motions for leave to file supplemental briefs are denied as moot. Def.‘s First Req.; Def.‘s Second Req.
CONCLUSION
For the reasons stated above, the court DENIES Defendant‘s motion for partial summary judgment with regard to the 23 entries of saccharin that entered prior to March 2010 (ECF No. 18) and DENIES Plaintiff‘s motion for partial summary judgment with regard to the 13 entries of saccharin that entered during or after March 2010 (ECF No. 30).
The court DENIES Univar‘s motion for leave to file a supplemental brief (ECF No. 79) and DENIES Univar‘s second motion for leave to file a supplemental brief (ECF No. 82).
Parties are to proceed in accordance with the
Mark A. Barnett
Judge
Notes
(a) Prohibition
(1) General rule
Without regard to whether the United States is or may be deprived of all or a portion of any lawful duty, tax, or fee thereby, no person, by fraud, gross negligence, or negligence—
(A) may enter, introduce, or attempt to enter or introduce any merchandise into the commerce of the United States by means of—
(i) any document or electronically transmitted data or information, written or oral statement, or act which is material and false, or
(ii) any omission which is material, or
(B) may aid or abet any other person to violate subparagraph (A).
Notwithstanding any other provision of law, in any proceeding commenced by the United States in the Court of International Trade for the recovery of any monetary penalty claimed under this section—
(1) all issues, including the amount of the penalty, shall be tried de novo;
(2) if the monetary penalty is based on fraud, the United States shall have the burden of proof to establish the alleged violation by clear and convincing evidence;
(3) if the monetary penalty is based on gross negligence, the United States shall have the burden of proof to establish all the elements of the alleged violation; and
(4) if the monetary penalty is based on negligence, the United States shall have the burden of proof to establish the act or omission constituting the violation, and the alleged violator shall have the burden of proof that the act or omission did not occur as a result of negligence.