VoestAlpine USA Corp. v. United StatesVoestAlpine USA Corp. v. United States
OPINION AND ORDER
[In Consolidated Court No. 20-03829, granting Plaintiffs’ motion for reconsideration of the court‘s prior opinion dismissing the action as moot; granting Defendant‘s motion to dismiss the action for failure to state a claim upon which relief may be granted; and denying Plaintiffs’ motion for leave to amend the complaint as futile. In Court No. 21-00290, denying Defendant‘s motion to dismiss for lack of subject matter jurisdiction; granting Plaintiffs’ consent motion for leave to amend the complaint; and granting Defendant‘s motion to dismiss the action for failure to state a claim upon which relief may be granted.]
Dated: May 17, 2022
Aimee Lee, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., argued for Defendant. With her on the briefs were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the briefs were Kenneth S. Kessler, Senior Counsel, Office of the Chief Counsel, Bureau of Industry and Security, U.S. Department of Commerce, of Washington, D.C., and Yelena Slepak, Senior Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of Washington, D.C.
Barnett, Chief Judge: Plaintiffs1 in these companion cases filed complaints seeking reliquidation of several entries of steel merchandise exclusive of duties imposed pursuant to section 232 of the Trade Expansion Act of 1962,
Pending in Court No. 20-03829 is Plaintiffs’ motion for reconsideration of the court‘s opinion and judgment dismissing the action as moot and for leave to amend the complaint. Pls.’ Mot. for Relief from J., Recons. and Leave to Amend Consol. Compls. (“Pls.’ Mot. Recons. 20-3829“), ECF No. 28; Reply Br. of Pls. in Supp. of Mot. for Recons., Relief from J. and to Amend the Compl. (“Pls.’ Reply Recons. 20-3829“), ECF No. 30; see generally VoestAlpine USA Corp. v. United States (”VoestAlpine I“), 45 CIT ___, 532 F. Supp. 3d 1379 (2021) (finding statutory subject matter jurisdiction pursuant to
Pending in Court No. 21-290 is the Government‘s motion to dismiss the action
The facts and legal issues underlying each case are similar in relevant respects and, thus, the court resolves the pending motions in a single opinion. For the reasons discussed herein, the court grants Plaintiffs’ motion for reconsideration, vacates its opinion in VoestAlpine I dismissing Court No. 20-3829 as moot, and denies the Government‘s motion to dismiss Court No. 21-290 for lack of subject matter jurisdiction. The court grants Plaintiffs’ consent motion for leave to file a second amended complaint in Court No. 21-290, but nevertheless grants the Government‘s motions to dismiss both Court Nos. 20-3829 and 21-290 for failure to state a claim upon which relief may be granted. The court denies Plaintiffs’ contested motion for leave to file a second amended complaint in Court No. 20-3829 because the amendment would be futile.
BACKGROUND
I. Section 232 Duties and the Exclusion Process
“Section 232 of the Trade Expansion Act of 1962 authorizes the President to restrict imports of goods to ‘[s]afeguard[ ] national security.‘” N. Am. Interpipe, Inc. v. United States, 45 CIT ___, 519 F. Supp. 3d 1313, 1319 (May 25, 2021) (alterations in original) (quoting
Proclamation 9705 further authorized Commerce “to provide relief from the additional duties . . . for any steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality” and “to provide such relief based upon specific national security considerations.” Id., cl. 3. Commerce must convey all exclusion determinations “to [CBP] for implementation . . . at the earliest possible opportunity.” Id., Annex (U.S. Note 16(c)). Importers are required to “report information concerning any applicable exclusion granted by Commerce in such form as CBP may require.” Id., Annex (U.S. Note 16(d)).
The President twice amended the exclusion information provided in clause three of Proclamation 9705. In Proclamation 9711, the President amended clause 3 to
In 2018, BIS amended
Both Customs and Commerce issued guidance to importers seeking exclusions. Customs issued several Cargo Systems Messaging Service (“CSMS“) messages on the proper submission of approved exclusions. On May 21, 2018, Customs issued guidance stating that “[e]xclusions granted by [Commerce] are retroactive on imports to the date the request for exclusion was posted for public comment at Regulations.gov.” U.S. Customs and Border Prot., CSMS # 18-000352 - Submitting Imports of Products Excluded from Duties on Imports of Steel or Aluminum, https://content.govdelivery.com/accounts/USDHSCBP/bulletins/1f1986e (May 21, 2018, 8:41 AM) (“CSMS # 18-000352“). Thus, “[t]o request an administrative refund for previous imports of excluded products granted by [Commerce], importers may file a [post summary correction (“PSC“)].” Id. If, however, “the entry has already liquidated, importers may protest the liquidation.” Id. Subsequent CSMS messages reiterated that exclusions may be applied retroactively to unliquidated entries and to entries that have liquidated when the liquidation is nonfinal and the protest period has not expired. See U.S. Customs and Border Prot., CSMS # 42566154 – Section 232 and Section 301 – Extensions Reqs., PSCs, and Protest, https://content.govdelivery.com/accounts/USDHSCBP/bulletins/289820a (May 1, 2020, 5:05 PM); U.S. Customs and Border Prot., CSMS # 39633923 - UPDATE:
In June 2019, Commerce published guidance on the section 232 exclusion process. BUREAU OF INDUS. AND SEC., U.S. DEP‘T COMMERCE, 232 EXCLUSION PROCESS FREQUENTLY ASKED QUESTIONS (FAQs) (June 19, 2019), https://www.bis.doc.gov/index.php/documents/section-232-investigations/2409-section-232-faq/file. Therein, Commerce explained that a company in receipt of an approved exclusion should provide CBP with information concerning the importer of record listed in the exclusion and the “product exclusion number.” Id. at 12. Commerce indicated that “an exclusion is granted for one year from the date of signature, or until all excluded product volume is imported (whichever comes first).” Id. Companies “cannot make substantive changes to their exclusion request after submission” but may make “non-substantive changes,” such as changes to the importer of record. Id. at 18. Commerce further stated that it could revoke a granted exclusion “if there was a technical issue that resulted in an inadvertent approval.” Id. at 13. Commerce also provided guidance on the resubmission of denied exclusion requests, including requests that were denied for HTSUS errors. Id. at 25. Resubmissions may apply retroactively “to [the] original submission date for refund purposes.” Id.
II. Factual and Procedural History
Plaintiffs commenced Court No. 20-3829 on November 10, 2020. Summons, ECF No. 2; Compl. Plaintiffs filed an amended complaint on November 12, 2020, that corrected paragraph numbering. [Am.] Compl. (“Am. Compl. 20-3829“), ECF No. 8.5
BIS‘s approval of the revised exclusion and grant of retroactive application occurred after Plaintiffs commenced the action and amended their complaint. Def.‘s Mot. Dismiss 20-3829, Exs. E–F.
Plaintiffs commenced Court No. 21-290 on June 18, 2021. Summons, ECF No. 1; Compl. By then, BIS had already taken the corrective steps outlined above (i.e., approving the revised exclusion request with retroactive effect). Compl. ¶ 15. Plaintiffs filed an amended complaint on September 17, 2021, that corrected paragraph numbering. [Am.] Compl., ECF No. 15. On February 28, 2022, after briefing on the Government‘s motion to dismiss had concluded, Plaintiffs requested leave to file a second amended complaint to remove one of the entries because it “has been determined after review not to be covered by the approved exclusions at issue in this case” and “was mistakenly included in this action.” Pls.’ Consent Mot. Amend 21-290 at 1; id., Ex. 2 (proposed amended complaint (“2nd Am. Compl. 21-290“)), ECF No. 22-2. The Government consented to the motion provided the court did not require a response to the second amended complaint and considered briefing on the motion to dismiss in connection with the second amended complaint. See Pls.’ Consent Mot. Amend 21-290 at 2; id., Ex. 1 (proposed order), ECF No. 22-1.
The operative complaints6 emphasize BIS‘s allegedly unlawful act in approving—instead of denying—the flawed exclusion
the delay that Plaintiffs allege prevented them from applying the revised exclusions to the identified entries. In Court No. 20-3829, in which the complaint is particularly bereft of details, Plaintiffs allege that BIS approved an exclusion with a non-existent HTSUS provision. Am. Compl. 20-3829 ¶ 11. Plaintiffs also acknowledge that the importer of record and port of entry listed in Bilstein‘s original exclusion request were incorrect but allege that these inconsistencies were immaterial. Id. ¶¶ 16, 18–19. Plaintiffs claim that the Government “wrongfully failed to refund” the section 232 duties, id. ¶ 20, and that “BIS has refused to assist in securing refund of the duties,” id. ¶ 21. Plaintiffs seek a judgment holding that the revised exclusion applies to its entries and that the Government must reliquidate the entries and refund the section 232 duties. Id. at 4-5 (prayer for relief).
In Court No. 21-290, Plaintiffs likewise allege that BIS approved an exclusion request with a non-existent HTSUS provision. 2nd Am. Compl. 21-290 ¶¶ 12–13. Plaintiffs further allege that “[s]hortly after” BIS approved the original exclusion request, “Bilstein noted that the HTSUS classification number was incorrect” and that the error traced to Bilstein‘s request. Id. ¶ 16. Plaintiffs complain that “BIS was required to review all exclusion requests before posting” but “failed to do so.” Id. Plaintiffs allege that, in May 2019,7 they contacted BIS seeking guidance about correcting an HTSUS
error in an exclusion and fault the clarity of the guidance they allegedly received. Id. ¶ 17. Plaintiffs followed up with BIS in August 2020 and submitted a revised exclusion request to BIS on November 23, 2020. Id. ¶¶ 19–20. BIS approved the revised exclusion request on December 31, 2020. Id. ¶ 20. On February 2, 2021, BIS approved Bilstein‘s request to render the exclusion effective as of December 9, 2018, the date of Bilstein‘s original submission. Id.; see also Def.‘s Mot. Dismiss 21-290, Ex. F (BIS decision on retroactivity).8 Plaintiffs’ entry liquidated before BIS approved the revised exclusion. 2nd Am. Compl. 21-290 ¶ 21. Plaintiffs claim that both the original and revised exclusions apply to the entry “with the exception of the HTSUS classification number in the first [e]xclusion.” Id. ¶ 25. Plaintiffs also claim that BIS failed to “publish any regulation” on correcting HTSUS provisions, id. ¶ 26, failed to “notify Plaintiffs of any mechanism to obtain refunds” before liquidation, and “had the authority to correct the erroneous HTSUS classification number at any time,” id. ¶ 27. Plaintiffs claim that the Government “is wrongfully in possession of the [s]ection 232 duties” VoestAlpine paid on the entry. Id. ¶ 28. Plaintiffs seek a judgment holding that both exclusions apply to the entry and that the Government must reliquidate the
Plaintiffs’ complaints fail to cite legal authority for the respective claims alleged therein but may reasonably be read to make out a claim against Commerce pursuant to
the Administrative Procedure Act (“APA“) for unlawful “final agency action for which there is no other adequate remedy in a court.”
The Government first moved to dismiss Court No. 20-3829, arguing, inter alia, that: 1) any challenge to BIS‘s grant of the original exclusion with an invalid HTSUS provision was moot because BIS issued a revised exclusion effective as of the date of the original submission, and 2) Plaintiffs failed to state a cognizable claim against the Government because the complaint does not identify unlawful final agency action by Commerce or CBP and Plaintiffs’ own inaction resulted in the final assessment of section 232 duties. Def.‘s Mot. to Dismiss (“Def.‘s Mot. Dismiss 20-3829“) at 22–28, ECF No. 19. In their opposing brief, Plaintiffs argued that although “the true nature of this action is a challenge to the approval by BIS of a fatally flawed and therefore useless steel product exclusion,” Pls.’ Resp. to Def.‘s Mot. to Dismiss Compls. (“Pls.’ Opp‘n Dismiss 20-3829“) at 24–25, ECF No. 21 (emphasis added), the case was not moot because the court retains the “authority to order reliquidation of entries notwithstanding final liquidation,” id. at 28.10 The court agreed with the Government that the sole claim
alleged was moot because Plaintiffs had received all the relief available to them and dismissed the action accordingly. VoestAlpine I, 532 F. Supp. 3d at 1392–95.
Plaintiffs seek reconsideration of that decision. Pls.’ Mot. Recons. 20-3829. The Government opposes the motion. Def.‘s Resp. to Pls.’ Mot. for Relief from J., Recons. and Leave to Amend the Consol. Compls. (“Def.‘s Opp‘n Recons. 20-3829“), ECF No. 29.
Following the court‘s opinion in VoestAlpine I, the Government moved to dismiss Court No. 21-290. See Def.‘s Mot. Dismiss 21-290. The Government argues, inter alia, that: 1) any challenge to Commerce‘s original exclusion decision underlying that case is likewise moot, id. at 14–16, and 2) Plaintiffs failed to state a cognizable claim for relief because their failure to take any action to prevent finality of liquidation bars the refund of section 232 duties by operation of
exclusion constitutes an “intervening legal development” meriting reliquidation. Id. at 11-12 (citing ThyssenKrupp Steel N. Am. v. United States, 886 F.3d 1215, 1222 (Fed. Cir. 2018)).12
On March 8, 2022, the court heard oral argument on the pending motions. Docket Entry, ECF No. 34 (20-3829); Docket Entry, ECF No. 24 (21-290).
JURISDICTION
The court has statutory subject matter jurisdiction pursuant to
DISCUSSION
Article III of the U.S. Constitution limits the court to resolving “legal questions only in the context of actual ‘Cases’ or ‘Controversies.‘” Alvarez v. Smith, 558 U.S. 87, 92 (2009) (quoting
I. Availability of Relief
Plaintiffs seek reconsideration of the court‘s dismissal of Court No. 20-3829 as moot pursuant to USCIT Rules 59(a)(1)(B) and 60(b)(1). Pls.’ Reply Recons. 20-3829 at 1–2; see also Pls.’ Mot. Recons. 20-3829 at 4, 8 (citing USCIT Rules 59 and 60(b) generally).13 Pursuant to USCIT Rule 59(a)(1)(B), “[t]he court may, on motion, grant a new trial or rehearing on all or some of the issues -- and to any party -- . . . after a nonjury trial, for any reason for which a rehearing has heretofore been granted in a suit in equity in federal court.” USCIT 60(b)(1) provides for relief from a final judgment based on “mistake, inadvertence, surprise, or excusable neglect.”14
The standard for demonstrating mootness is “demanding,” Mission Prod. Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652, 1660 (2019), and requires a showing that “an event [has occurred] while a case is pending on appeal that makes it impossible for the court to grant ‘any effectual relief whatever’ to a prevailing party,” Nasatka v. Delta Scientific Corp., 58 F.3d 1578, 1580 (Fed. Cir. 1995) (quoting Church of Scientology v. United States, 506 U.S. 9, 12 (1992)); see also, e.g., Mills v. Green, 159 U.S. 651, 653 (1895) (stating that when the facts—either on the record or “proved by extrinsic evidence“—show that an intervening event “renders it impossible for [the] court . . . to grant . . . any effectual relief whatever, the court . . . will dismiss the appeal“).
The court has observed that “[w]hat constitutes ‘appropriate relief‘” pursuant to
The court finds instructive Rhone Poulenc, Inc. v. United States, 880 F.2d 401 (Fed. Cir. 1989). In the CIT opinion underlying that appeal, the court relied on United States v. Torch Manufacturing Co., 509 F.2d 1187 (CCPA 1975),16 to find that the CIT lacked jurisdiction to entertain a motion for reconsideration filed outside the 30-day timeframe provided for such motions in
at 1189, 1192) (footnote omitted). In Rhone Poulenc, the appellate court held that the enactment of
While the legal issues addressed in Rhone Poulenc are distinct, in reaching its decision the Federal Circuit made several relevant observations. The court noted the “fundamental distinction between a court‘s subject matter jurisdiction and its equitable powers,” such that “[t]he former must exist before the latter may be exercised.” Id. at 402. In other words, while subject matter jurisdiction “concerns the authority of a court to hear and decide [a case],” the court‘s equitable powers “concern[] the remedial relief a court having that authority may grant.” Id. More pointedly, the court explained that “[e]quitable remedial powers,” including the authority conferred by
Rhone Poulenc suggests that the court should not convert its decision on the appropriateness of reliquidation in a given case into a “jurisdictional predicate[]” and should instead consider the possibility of reliquidation sufficient for purposes of the Article III case-or-controversy requirement. Cf. id. at 407–08. The Federal Circuit further indicated that the court should consider the appropriateness of reliquidation in connection with Plaintiffs’ claim for such relief and not as a jurisdictional matter in Confederacion De Asociaciones Agricolas Del Estado De Sinaloa, A.C. v. United States, 2022 WL 1112233 (Fed. Cir. Apr. 14, 2022).
In Confederacion, the Federal Circuit addressed the CIT‘s dismissal of a claim alleging that Commerce unlawfully terminated a suspension agreement17 as moot based on the court‘s finding that it lacked the authority to grant the plaintiffs’ requested relief—reinstatement of the suspension agreement. 2022 WL 1112233, at *4. The Federal Circuit found dismissal on that basis “improper” apparently based on the possibility that the plaintiffs could “prevail on their claims relating to the termination of the [suspension] agreement and their contentions concerning the appropriate relief,” notwithstanding the CIT‘s contrary finding. Id. (emphasis added).18
Confederacion thus suggests that the possibility of relief pursuant to
In light of Rhone Poulenc and Confederacion, the court concludes that the appropriateness of reliquidation as a form of relief would be better addressed in conjunction with an analysis of the claims presented by Plaintiffs in these cases and not through the lens of mootness. The court thus vacates its prior holding in Court No. 20-3829 that Plaintiffs’ claim was moot.19
With respect to Court No. 21-290, BIS granted retroactive application of the revised exclusion before Plaintiffs commenced the action. See 2nd Am. Compl. 21-290 ¶ 20. While mootness may arise upon the occurrence of an event mid-litigation, standing is typically assessed at the outset. See Friends of Earth, Inc. v. Laidlaw Env‘t Servs. (TOC), Inc., 528 U.S. 167, 189 (2000) (addressing standing before mootness). Because all relevant events preceded commencement of the action, the court considers the Parties’ respective arguments regarding dismissal through the lens of standing. Oral Arg. 4:50–6:40, available at https://www.cit.uscourts.gov/audio-recordings-select-public-court-proceedings (time stamp from the recording) (statement by counsel for the Government that standing is the appropriate analysis in this case). For the same reasons that the court finds that Plaintiffs’ claim in Court No. 20-3829 is not moot, however, the court finds that Plaintiffs have standing to pursue their claim in Court No. 21-290.
II. Leave to File a Second Amended Complaint in Court No. 21-290
Before turning to whether dismissal of the complaints is required pursuant to USCIT Rule 12(b)(6), the court must identify the operative complaint to which it should address the Parties’ arguments in Court No. 21-290.20
The Government‘s consent notwithstanding, ordinarily, “an amended complaint supersedes the original complaint,” Pac. Bell Tele. Co. v. linkLine Commc‘ns, Inc., 555 U.S. 438, 456 n.4 (2009), and a prior motion targeting the sufficiency of the original pleading is rendered moot, see, e.g., Aspects Furniture Int‘l, Inc. v. United States, 44 CIT ___, 469 F. Supp. 3d 1359, 1362, 1366–67 (2020) (granting leave to amend a complaint to add factual allegations and alter the nature of the claim mooted pending cross-motions for judgment on the pleadings). The rule is not absolute, however. When, as here, the proposed amended complaint is “substantially identical to the original complaint,” the court may consider the motion to dismiss against the allegations in the proposed pleading. Crawford v. Tilley, 15 F.4th 752, 759 (6th Cir. 2021) (citation omitted); see also, e.g., Pettaway v. Nat‘l Recovery Sols., LLC, 955 F.3d 299, 303–04 (2d. Cir. 2020) (per curiam); Kalos v. United States, 368 F. App‘x. 127, 131–32 (Fed. Cir. 2010) (lower court did not abuse its discretion in applying the defendant‘s motion to dismiss to an amended complaint when “the amended complaint contained the same claims and substantially the same factual allegations as the original [complaint]“).
Plaintiffs seek to make one change—the removal of one of two entries in the action. See Pls.’ Consent Mot. Amend 21-290 at 1–2. The minor nature of the change, in conjunction with the benefit of having a clear record regarding the scope of the action, favors accepting the proposed second amended complaint and evaluating the Government‘s motion to dismiss against the allegations contained therein.
Accordingly, the court will grant Plaintiffs’ consent motion to file a second amended complaint. The court now turns to whether dismissal is required pursuant to USCIT Rule 12(b)(6).
III. In Each Case, Plaintiffs Failed to State a Cognizable Claim Upon Which the Court May Grant the Requested Relief
When reviewing a motion to dismiss for failure to state a claim, “any factual allegations in the complaint are assumed to be true and all inferences are drawn in favor of the plaintiff.” Amoco Oil Co. v. United States, 234 F.3d 1374, 1376 (Fed. Cir. 2000). When there is “more to the story than what appears in [the] complaint,” White v. Keely, 814 F.3d 883, 885 & n.2 (7th Cir. 2016), the court may also consider “matters incorporated by reference or integral to the claim, items subject to judicial notice, [and] matters of public record,” A & D Auto Sales, Inc. v. United States, 748 F.3d 1142, 1147 (Fed. Cir. 2014) (quoting 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed. 2004) (alteration in original)). Public records include “letter decisions of government agencies.” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1197 (3rd Cir. 1993) (citing Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C. Cir. 1979)).
A court may properly dismiss a claim pursuant to Rule 12(b)(6) only if Plaintiffs’ allegations of fact are not “enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). “[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
As previously noted, a generous reading of the operative complaints suggests that BIS‘s issuance of the flawed exclusions constitutes the unlawful final agency action underlying the requests for reliquidation. There is no serious dispute that BIS erred in granting the exclusions containing the invalid HTSUS provisions. See Oral Arg. 1:01:55-1:04:00 (counsel for the Government acknowledging the mistake). “In a case arising under the APA, the court may—and regularly will—remand” deficient agency action for reconsideration. In re Section 301 Cases, Slip Op. 22-32, 2022 WL 987067, at *25 (CIT Apr. 1, 2022) (citing Nat‘l Org. of Veterans’ Advocates, Inc. v. Sec‘y of Veterans Affs., 260 F.3d 1365, 1379–80 (Fed. Cir. 2001)); see also
A remand to BIS is unnecessary here, however, because BIS provided all the relief it could when it issued the revised exclusions and made those exclusions retroactive. Def.‘s Mot. Dismiss 20-3829, Ex. F;21 2nd Am. Compl. 21-290 ¶ 20. Thus, the court returns to the question of court-ordered reliquidation. The court concludes, however, that Plaintiffs have not stated a claim pursuant to which court-ordered reliquidation is an appropriate remedy.
Plaintiffs rely heavily on Shinyei to support their argument regarding the court‘s authority to order reliquidation. See, e.g., Pls.’ Opp‘n Dismiss 20-3829 at 30; Pls.’ Opp‘n Dismiss 21-290 at 9. To be sure, the court may exercise such authority in appropriate cases. See Shinyei, 355 F.3d at 1312; PrimeSource Building Prods., Inc. v. United States, 45 CIT ___, 505 F. Supp. 3d 1352, 1357–58 (2021) (ordering a refund of any section 232 duties paid on entries liquidated despite the court‘s preliminary injunction suspending liquidation);22 Gilda Indus., Inc. v. United States, 33 CIT 751, 760, 625 F. Supp. 2d 1377, 1385 (2009) (ordering CBP to refund certain section 301 retaliatory duties without regard to liquidation status), aff‘d, 622 F.3d 1358 (Fed. Cir. 2010). Here, however, Plaintiffs’ claims relate to the section 232 exclusion process established by the Executive Branch.
The exclusion process established by the President provided that retroactive relief—refunds of section 232 duties on entries made on or after an exclusion request was made—is limited to unliquidated entries or entries for which liquidation is not final. Proclamation 9777, cl. 5; see also Proclamation 9705, cl. 3. Regulations issued by BIS notify importers that refunds of section 232 duties are within the province of CBP, not BIS. See
The instant cases are distinct from Shinyei, in which Shinyei‘s claim arose out of the statute—
At the hearing, Plaintiffs implicitly acknowledged the absence of any legal requirement for an exclusion process when counsel was unable to identify any such requirement (while suggesting, without elaboration, that the absence of a process might have had legal implications). See Oral Arg. 42:50–43:59. Regarding the process established to effectuate section 232 exclusions, Plaintiffs make no claim23 that the limitation on retroactive refunds to entries that have not liquidated or for which liquidation is not final is arbitrary or capricious.24 Plaintiffs also raise no challenge to BIS‘s regulations alerting importers to CBP‘s role in providing refunds and do not suggest that BIS has any authority to issue refunds. While in one case Plaintiffs allege, in a conclusory fashion, that BIS failed to publish a regulation concerning the correction
of HTSUS errors in exclusions or inform Plaintiffs of a mechanism to obtain refunds prior to liquidation, 2nd Am. Compl. 21-290 ¶¶ 26–27, Plaintiffs do not identify any legal basis for the claim, nor is one suggested in their briefing, see Pls’ Opp‘n Dismiss 21-290 at 8 (asserting, without supporting authority, that “Commerce was obligated to make publicly available a viable remedy” for “chang[ing] the tariff number in the exclusion“). Cf.
Plaintiffs’ reliance on ThyssenKrupp v. United States, 886 F.3d 1215 (Fed. Cir. 2018) is also misplaced. See Pls.’ Opp‘n Dismiss 21-290 at 11. That case concerned an intervening change in the legal requirement to pay antidumping duties on eight entries based on revocation of the antidumping duty order with an effective date prior to the entries, a change that CBP failed to apply in response to a timely-filed protest. ThyssenKrupp, 886 F.3d at 1218–20, 1223. Here, however, Commerce‘s approval of the revised exclusions, see Def.‘s Mot. Dismiss 20-3829, Ex. F; 2nd Am. Compl. 21-290 ¶ 20, did not automatically void the application of the duties because approved exclusions must be presented to
pt. 705, Supp. 1(h)(2)(iii)(B). Absent presentation of an approved exclusion to CBP, the legal requirement to pay duties on merchandise subject to section 232 duties remained.
In sum, Plaintiffs’ complaints fail to state a claim upon which the court can grant relief beyond BIS‘s grant of the corrected exclusions.
Plaintiffs’ proposed second amended complaint filed in Court No. 20-3829 fails to cure the deficiencies discussed above and amendment would be futile. See Kemin Foods, L.C. v. Pigmentos Vegetales del Centro S.A. de C.V., 464 F.3d 1339, 1353 (Fed. Cir. 2006) (stating that leave to amend may be denied “if the court finds that . . . the amendment would be futile“) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Plaintiffs seek to add factual allegations concerning the internal processes used by Bilstein and VoestAlpine to apply granted exclusions. See [Proposed] Am. Compl. (“Proposed 2nd Am. Compl. 20-3829“) ¶¶ 12–13, ECF No. 28-1.26 Concerning the purported legal basis for the claim, Plaintiffs seek to allege that “[t]he actions of Defendant contributed substantially to the inability of Plaintiffs to obtain refunds of Section 232 duties before the liquidation of the Entry became final,” id. ¶ 19; “Defendant United States wrongfully granted an exclusion that led Plaintiffs to believe that refunds of duties could be claimed,” id. ¶ 23; “[w]hen Plaintiffs discovered the only method to
obtain relief, the entry had liquidated,” id. ¶ 24; and “[o]btaining refunds without the assistance of the [c]ourt is not possible,” id. ¶ 25.27
As with the existing complaints, however, a favorable reading of the proposed second amended complaint suggests a claim based on Commerce‘s alleged improper grant of the erroneous exclusions and nothing from which the court may infer a “plausible claim” for refunds through reliquidation. See Iqbal, 556 U.S. at 679. Plaintiffs identify no additional allegedly unlawful final agency action(s) or legal theory to support their claim or requested relief. Thus, further amendment would be futile and will be denied. See Kemin Foods, L.C., 464 F.3d at 1353.
CONCLUSION AND ORDER
In accordance with the foregoing, it is hereby
ORDERED that Plaintiffs’ motion for relief from judgment, for reconsideration, and for leave to amend the consolidated complaints (ECF No. 28, Court No. 20-03829) is GRANTED IN PART as to reconsideration of the question of mootness and DENIED IN PART as to leave to file a
ORDERED that the portion of the court‘s opinion in VoestAlpine USA Corp. v. United States, 45 CIT ___, 532 F. Supp. 3d 1379 (2021), dismissing Court No. 20-03829 as moot is VACATED; it is further
ORDERED that Plaintiffs’ consent motion for leave to file a second amended complaint (ECF No. 22, Court No. 21-00290) is GRANTED; and it is further
ORDERED that the Government‘s motions to dismiss the actions for failure to state a claim upon which relief may be granted (ECF No. 19, Court No. 20-03829; ECF No. 17, Court No. 21-00290) are GRANTED.
Judgment will enter in Court No. 21-290 accordingly.
Dated: May 17, 2022
New York, New York
/s/ Mark A. Barnett
Mark A. Barnett, Chief Judge