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Full Opinion
Slip Op. 10â102
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________
:
ALDEN LEEDS INC., :
:
:
Plaintiff, :
: Before: Richard K. Eaton, Judge
v. :
:
UNITED STATES, : Court No. 09-00476
:
Defendant. :
: Public Version
______________________________:
OPINION AND ORDER
[Defendantâs motion to dismiss denied.]
Dated: September 7, 2010
Sokol, Behot & Fiorenzo (Joseph B. Fiorenzo), for plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Patricia M. McCarthy, Assistant Director, Barbara S.
Williams, Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, United States
Department of Justice (Alexander Vanderweide and Arlene Pianko
Groner); Office of Chief Counsel, International Trade Litigation,
United States Customs and Border Protection (Edward N. Maurer),
of counsel, for defendant.
Eaton, Judge: This matter is before the court on the motion
of defendant the United States, on behalf of United States
Customs and Border Protection (âCBPâ or âCustomsâ), to dismiss
the complaint of plaintiff Alden Leeds Inc. (âAlden Leedsâ) for
(1) lack of subject-matter jurisdiction or (2) failure to state a
claim for which relief can be granted. The question presented is
Court No. 09-00476 Page 2
whether the court may hear plaintiffâs claim even though Alden
Leeds failed to protest timely the unlawful publication of a
notice of deemed liquidation. Defendant makes no serious
argument that it has any rightful claim to plaintiffâs money;
rather, it insists that the court has no power to order its
return.
By its complaint, plaintiff asks the court to use its
equitable powers to âinstruct CBP to refund Alden Leeds the
difference between the estimated deposits of 24.83[ percent] and
the final assessment duties [of 4.07 percent] calculated for
Alden Leeds [following an administrative review] along with
interest.â Am. Compl. ¶ 21(b).1 For the reasons set forth
below, defendantâs motion to dismiss is denied.
BACKGROUND
On June 24, 2005, the United States Department of Commerce
(âCommerceâ) published an antidumping duty order for chlorinated
isocyanurates (âisosâ) from Spain (the âsubject merchandiseâ).
Chlorinated Isocyanurates from Spain, 70 Fed. Reg. 36,562 (Depât
of Commerce June 24, 2005) (notice of antidumping duty order)
(the âOrderâ). The Order provided that the isos exported by
Aragonesas Delsa S.A. would receive an antidumping duty margin of
1
Plaintiffâs amended complaint mislabels ¶ 21 as (a
second) ¶ 12.
Court No. 09-00476 Page 3
24.83 percent. Id. at 36,563. On July 2, 2007, Aragonesas
Industrias y Energia S.A., the successor-in-interest of
Aragonesas Delsa S.A. (collectively, with Aragonesas Industrias y
Energia S.A., âAragonesasâ),2 filed a request for an
administrative review of the isos it produced and exported to the
United States. See 19 C.F.R. § 351.213(b) (2009). Commerce
subsequently published a notice of initiation of an
administrative review of the Order for the period June 1, 2006
through May 31, 2007 (the âPORâ). Initiation of Antidumping and
Countervailing Duty Administrative Reviews and Request for
Revocation in Part, 72 Fed. Reg. 41,057, 41,057 (Depât. of
Commerce July 26, 2007). Commerce issued the final results of
the review on December 30, 2008, setting the final assessment
rate for the subject merchandise at 4.07 percent. See
Chlorinated Isocyanurates from Spain, 73 Fed. Reg. 79,789, 79,789
(Depât. of Commerce Dec. 30, 2008) (final results of antidumping
duty administrative review) (the âFinal Resultsâ).
When its entries are subject to an antidumping duty order,
an importer, such as Alden Leeds, generally makes a cash deposit
of the estimated antidumping duties contained in Commerceâs
2
Aragonesas is a Spanish producer of isos, which can be
used as a swimming pool chemical. Alden Leeds, located in South
Kearny, New Jersey, is an American importer of swimming pool
chemicals. During the period of June 1, 2006 through May 31,
2007, Alden Leeds imported isos produced by Aragonesas. Am.
Compl. ¶ 1.
Court No. 09-00476 Page 4
order. See 19 U.S.C. § 1673e(a)(3) (2006). Here, in accordance
with the Order, Alden Leeds made a deposit with Customs covering
the estimated duty of 24.83 percent (approximately $400,000) for
its entries. Pl.âs Resp. to Def.âs Mot. to Dismiss for Lack of
Jur. or, in the Alt., for Fail. to St. a Cl. (âPl.âs Resp.â) 1â2.
The amount of duty owed by an importer, however, is not final
until the importerâs entries are liquidated.3 The final amount
on liquidation may vary from the deposit amount after Commerce
completes an administrative review. See generally 19 U.S.C.
§ 1675; see also Consol. Bearings Co. v. United States, 348 F.3d
997, 1000 (Fed. Cir. 2003).
As a result of Aragonesasâs request for an administrative
review, the liquidation of plaintiffâs merchandise was suspended.
In order to prevent the liquidation of merchandise subject to a
review prior to the final determination, the law provides for a
suspension of liquidation while the review is proceeding.
Canadian Wheat Bd. v. United States, 33 CIT __, __, 637 F. Supp.
2d 1329, 1334 n.6 (2009) (âCanadian Wheat Bd.â).
On February 7, 2008, Commerce sent Message No. 8038217 to
Customs, which stated that Aragonesasâs isos were subject to a
suspension of liquidation. Admin. R. (âARâ) 13. Despite
Commerceâs suspension of liquidation and despite having received
3
See 19 C.F.R. § 159.1 (âLiquidation means the final
computation or ascertainment of the duties . . . .â).
Court No. 09-00476 Page 5
clear instructions from Commerce that plaintiffâs entries were
not to be liquidated during the pendency of the review, Customs
posted a bulletin notice of liquidation on April 25, 2008 (the
âBulletin Noticeâ). This posting indicated that the twelve
entries for which Aragonesas was the exporter and Alden Leeds was
the importer4 had been liquidated by operation of law (the
4
Counsel for defendant, at oral argument, appeared to
attempt to convert what was obviously a mistake into a volitional
act by suggesting that Customs might have intended to give notice
that these entries were liquidated by operation of law. Tr. of
Or. Arg. on Def.âs Mot. to Dismiss at 11â12. Apparently, the
idea behind this argument is that, even though Customs had
received notice that Aragonesasâs entries were to remain
unliquidated, the notice did not necessarily apply to Alden
Leeds. Counsel appeared to suggest, without saying so directly,
that Customs may have concluded that the suspension did not apply
to Alden Leeds and that this conclusion could be contested only
by way of a protest. Id. at 18â19. It is worth noting that this
argument cannot be found in the briefs and papers that defendant
submitted to the court.
To the extent that defendant actually is advancing this
argument, it is obviously a litigation position. The only way
that Customs was aware that Alden Leeds had entries to liquidate
was that plaintiffâs customs broker had filed certain papers when
the entries were made. These papers, which Customs had before it
when it issued the Bulletin Notice, were supplied to the court by
defendant as part of the administrative record of this case. The
court, therefore, has before it twelve separate sets of documents
each representing an individual entry. AR 1â12. Each set
contains: 1) an Environmental Protection Agency Notice of Arrival
of Pesticides and Devices; 2) a Department of the
Treasury/Customs Service Entry Summary; 3) an Importerâs Blanket
Statement of Non-Reimbursement of Antidumping Duties; and 4) a
Department of the Treasury/Customs Service Entry/Immediate
Delivery Form.
An examination of these forms demonstrates that 1)
Aragonesas is clearly named as the âShipperâ and Alden Leeds is
clearly named as the âImporterâ; 2) the antidumping duty order to
which the merchandise was subject was identified; 3) the
Court No. 09-00476 Page 6
âpurported deemed liquidationâ) on January 26, 2008 under the
provisions of 19 U.S.C. § 1504(d). Def.âs Reply to Pl.âs Resp.
to Mot. to Dismiss for Lack of Jur. or, in the Alt., for Fail. to
St. a Cl. 6 (citing AR 14).
On December 30, 2008, Commerce published the final results
of its review and found that the subject merchandise entered
during the POR should be subject to an antidumping duty rate of
4.07 percent,5 a substantially lower rate than the estimated
antidumping duty rate for plaintiffâs entries was set forth; and
4) the entry numbers, which correspond to the entry numbers
listed on the Bulletin Notice, are set out clearly.
Additionally, as requested at oral argument, defendant,
on June 14, 2010, filed Message No. [[
]].
Message No. [[ ]] renders defendantâs position, advanced at
oral argument, implausible.
Customs employees are, of course, familiar with the
agencyâs own forms and their contents. Customs has produced no
evidence to refute the clear conclusion that the Bulletin Notice
was a simple mistake. Thus, any suggestion that Customs intended
to post the Bulletin Notice of a deemed liquidation because
Customs was unaware that the entries in contention were the same
entries whose suspension was reaffirmed by Message No. 8038217 of
February 7, 2008 is so unreasonable as to be beyond the realm of
serious consideration.
5
â[T]he United States uses a retrospective assessment
system under which final liability for antidumping and
countervailing duties is determined after merchandise is
imported.â 19 C.F.R. § 351.212(a). While an importer deposits
estimated duties on entry of merchandise, the actual duties are
Court No. 09-00476 Page 7
deposit rate of 24.83 percent collected from Alden Leeds. Final
Results, 73 Fed. Reg. at 79,789. Alden Leeds immediately sought
a refund of the difference between the estimated deposit rate and
the final rate determined in the review. Rather than receiving
its refund, Alden Leeds was informed that the subject merchandise
had been deemed liquidated at the deposit rate on January 26,
2008. Pl.âs Resp. 3â4.
Plaintiff then brought this suit to recover the difference
between the deposit rate and the rate found in the Final Results.
Am. Compl. ¶ 21(b). Defendant has moved to dismiss the case
pursuant to USCIT Rule 12(b)(1) by insisting that because
plaintiff failed to protest the purported deemed liquidation
found in the Bulletin Notice, this Court does not have subject-
matter jurisdiction to grant relief to plaintiff. Mem. in Supp.
of Def.âs Mot. to Dismiss for Lack of Jur. or, in the Alt., for
determined later in the assessment process, at the time when the
entries are liquidated. See 19 C.F.R. § 141.103. Thus, when an
administrative review is requested by an interested party, an
importerâs payment of the actual duties is not due until the
entries are liquidated at the rate determined by Commerceâs
review. Parkdale Intâl v. United States, 475 F.3d 1375, 1376â77
(Fed. Cir. 2007) (citing 19 C.F.R. § 141.1(a)); see also 19
C.F.R. § 351.212(a) (stating that â[g]enerally, the amount of
duties to be assessed is determined in a review of the order
covering a discrete period of time.â). Additionally, â[b]ecause
19 U.S.C. § 1675(a)(2) expressly calls for the retrospective
application of antidumping review determinations . . .,
suspension of liquidation during the pendency of periodic
antidumping review is unquestionably ârequired by statute.ââ
Am. Permac, Inc. v. United States, 10 CIT 535, 539, 642 F. Supp.
1187, 1191 (1986).
Court No. 09-00476 Page 8
Fail. to St. a Cl. (âDef.âs Mem.â) 5. In the alternative,
defendant argues that plaintiffâs complaint should be dismissed
for failure to state a claim upon which relief can be granted
because of the failure to protest timely the Bulletin Notice.
Def.âs Mem. 11; see USCIT R. 12(b)(5). For the following
reasons, defendantâs motion is denied.
STANDARD OF REVIEW
As the party seeking to invoke this Courtâs authority, Alden
Leeds bears the burden of establishing subject-matter
jurisdiction. AutoAlliance Intâl, Inc. v. United States, 29 CIT
1082, 1088, 398 F. Supp. 2d 1326, 1332 (2005) (citations
omitted). â[I]t is of utmost importance that mere recitation of
a basis for jurisdiction not be controlling.â Hartford Fire Ins.
Co. v. United States, 544 F.3d 1289, 1293 (Fed. Cir. 2008)
(citation omitted). Alden Leeds must then plead facts from which
this Court may conclude that it has subject-matter jurisdiction
with respect to each of its claims. Schick v. United States, 31
CIT 2017, 2020, 533 F. Supp. 2d 1276, 1281 (2007) (citing McNutt
v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)
(explaining that a plaintiff âmust allege in his pleading the
facts essential to show jurisdictionâ)).
Court No. 09-00476 Page 9
In evaluating defendant's motion to dismiss for failure to
state a claim upon which relief can be granted, this Court âmust
accept all well-pleaded facts as true and view them in the light
most favorable to the non-moving party.â United States v. Ford
Motor Co., 497 F.3d 1331, 1336 (Fed. Cir. 2007) (citation
omitted).
DISCUSSION
I. Jurisdiction Under 28 U.S.C. § 1581(i)
Defendant asserts that because 28 U.S.C. § 1581(a)
jurisdiction was available to plaintiff as an avenue for relief,
it cannot now bring a case under 28 U.S.C. § 1581(i). In other
words, defendant insists that had Alden Leeds wished to dispute
the purported deemed liquidation, it first was required to file a
protest. See 19 U.S.C. § 1514(a). According to defendant, if
plaintiff failed to gain relief by way of protest, it could then
have petitioned this Court for relief pursuant to 28 U.S.C.
§ 1581(a).6 Def.âs Mem. 7â8.
By its complaint, plaintiff asks the court to find
jurisdiction under § 1581(i). Am. Compl. ¶¶ 2â3. As this
6
Section 1581(a) provides that â[t]he Court of
International Trade shall have exclusive jurisdiction of any
civil action commenced to contest the denial of a protest, in
whole or in part, under section 515 of the Tariff Act of 1930.â
Court No. 09-00476 Page 10
Courtâs residual jurisdiction provision, § 1581(i) provides for
the exercise of jurisdiction when relief is not available under
another subsection of § 1581.7 Norcal/Crosetti Foods, Inc. v.
United States, 963 F.2d 356, 359 (Fed. Cir. 1992). According to
plaintiff, in this case, jurisdiction under § 1581(i) is
triggered because other possible remedies were âmanifestly
inadequate.â Miller & Co. v. United States, 824 F.2d 961, 963
(Fed. Cir. 1987) (âMillerâ).
In making this argument, plaintiff asserts that, because the
Bulletin Notice was posted at the customshouse while Commerceâs
7
As noted by the United States Court of Appeals for the
Federal Circuit, § 1581(i) âwas intended to give the Court of
International Trade broad residual authorityâ over cases
involving trade transactions. Conoco, Inc. v. United States
Foreign Trade Zones Bd., 18 F.3d 1581, 1588 (Fed. Cir. 1994).
Defendant cites Norcal/Crosetti Foods, Inc. v. United States for
the proposition that â[t]his limitation âpreserves the
congressionally mandated procedures and safeguards . . . provided
in the other subsections [of 28 U.S.C. § 1581] . . ., absent
which litigants could ignore the precepts of subsections (a)-(h)
and immediately file suit in the Court of International Trade
under subsection (i).ââ 963 F.2d 356, 359 (Fed. Cir. 1992)
(citation omitted). Indeed, the Federal Circuit has indicated
that â[s]ection 1581(i) jurisdiction may not be invoked when
jurisdiction under another subsection of § 1581 is or could have
been available, unless the remedy provided under that other
subsection would be manifestly inadequate.â Miller & Co. v.
United States, 824 F.2d 961, 963 (Fed. Cir. 1987) (citation
omitted); see, e.g., Trs. in Bankr. of N. Am. Rubber Thread Co.,
Inc. v. United States, 593 F.3d 1346, 1353 (Fed. Cir. 2010)
(affirming § 1581(i) jurisdiction for party that âha[d] no
current or future opportunities to get judicial reviewâ); Pac
Fung Feather Co., Ltd. v. United States, 111 F.3d 114, 116 (Fed.
Cir. 1997) (sustaining jurisdiction when â[s]ection 1581(i) was
the importers' only available and potentially adequate optionâ).
Court No. 09-00476 Page 11
suspension was in effect, plaintiffâs entries were not, in fact,
liquidated. Consequently, plaintiff maintains that there was no
event for it to have protested under 19 U.S.C. § 1514(a). Pl.âs
Resp. 5. As a result, plaintiff concludes that, as it could not
lodge a protest, which if denied would have provided jurisdiction
for a lawsuit in this Court under 28 U.S.C. § 1581(a), relief
under that section was necessarily âmanifestly inadequate.â
Pl.âs Resp. 5. Therefore, Alden Leeds urges the court to
exercise its jurisdiction under § 1581(i) in order to provide the
appropriate relief, i.e., the return of its money. Am. Compl.
¶¶ 2â3, 21.
II. Deemed Liquidation Under 19 U.S.C. § 1504(d) and the
Suspension of Liquidation
Congress enacted the deemed liquidation statute, 19 U.S.C.
§ 1504(d), to protect importers from the uncertainties in the
United Statesâ duty assessment process. See United States v.
Cherry Hill Textiles, Inc., 112 F.3d 1550, 1559 (Fed. Cir. 1997).
Pursuant to this provision, entries that remain unliquidated for
six months are liquidated by operation of law at their entered
rate. See 19 U.S.C. § 1504(d).
Before the law operates to bring about a deemed liquidation,
however, three preconditions must be met: â(1) the suspension of
liquidation that was in place must have been removed; (2) Customs
Court No. 09-00476 Page 12
must have received notice of the removal of the suspension; and
(3) Customs must not liquidate the entry at issue within six
months of receiving such notice.â Fujitsu Gen. Am., Inc. v.
United States, 283 F.3d 1364, 1376 (Fed. Cir. 2002). Once these
three preconditions have been satisfied, deemed liquidation under
19 U.S.C. § 1504(d) occurs by operation of law. Deemed
liquidation under § 1504(d), however, does not result from any
affirmative action on the part of Customs. Accordingly,
when a suspension required by statute or court
order is removed, the Customs Service shall
liquidate the entry . . . within 6 months
after receiving notice of the removal from the
Department of Commerce . . . . Any entry . .
. not liquidated by the Customs Service within
6 months after receiving such notice shall be
treated as having been liquidated at the rate
of duty, value, quantity, and amount of duty
asserted by the importer of record . . . .
19 U.S.C. § 1504(d). As this subsubsection makes clear, deemed
liquidation results from operation of law, and Customs makes no
decision and performs no act in order to bring about a deemed
liquidation.8
A suspension of liquidation acts to stop liquidation,
including a deemed liquidation, from occurring. Indeed, a
8
When a deemed liquidation has taken place by operation
of law, it may be the subject of a protest. Koyo Corp. v. United
States, 497 F.3d 1231, 1243 (Fed. Cir. 2007). Judicial review is
then available if that protest is denied. See 28 U.S.C.
§ 1581(a). Where, as here, no deemed liquidation has taken
place, relief by way of protest is not available.
Court No. 09-00476 Page 13
suspension of liquidation serves an important purpose in ensuring
the application of proper unfair trade duties. Thus, liquidation
is suspended during an administrative review so that the entries
may be liquidated at the rate determined by the review. See,
e.g., Canadian Wheat Bd., 33 CIT at __, 637 F. Supp. 2d at 1334
n.6 (âA request for an administrative review results in the
continuation of the suspension of liquidation.â). In order to
assure that the entries will be liquidated at the finally
determined rate, the suspension of liquidation is not terminated
until the final results of an administrative review are published
in the Federal Register. See, e.g., Intâl Trading Co. v. United
States, 281 F.3d 1268, 1272 (2002) (holding that the âsuspension
of liquidation [is] removed when the final results of the
administrative review [are] published in the Federal Registerâ).
Defendant, however, asserts that plaintiff could not rely on
the suspension of liquidation, resulting from the administrative
review, to shield it from claims of erroneous or unlawful deemed
liquidation. While defendant concedes that the suspension, in
fact, prevented a deemed liquidation from taking place, it states
that plaintiff has no avenue to relief by this lawsuit. Rather,
defendant argues that plaintiff was required to protest the
purported deemed liquidation that was announced in the Bulletin
Notice, and only if the protest were denied could the matter be
heard in this Court. According to defendant, this is the holding
Court No. 09-00476 Page 14
in Juice Farms, Inc. v. United States, 68 F.3d 1344 (Fed. Cir.
1995) (âJuice Farmsâ).
In Juice Farms, the plaintiff importerâs entries were
subject to a suspension of liquidation pending an antidumping
review. 68 F.3d at 1345. Despite the suspension, Customs,
actually liquidated the entries. Id. That is, Customs took
affirmative steps to liquidate the importerâs merchandise.
Customs also posted bulletin notices of liquidation at the
customshouse. Id. at 1346. Relying on Commerceâs suspension of
liquidation, the plaintiff did not monitor the posting of
bulletin notices of liquidation for its entries at the
customshouse. Id.
In Juice Farms, as this case, it was only at the conclusion
of the administrative review that the plaintiff learned of the
liquidation of its entries, at which point it protested and
requested a refund of the excess antidumping duty deposits that
it posted for its entries. Id. at 1345â46. Customs, however,
denied the plaintiffâs protest as untimely. Id. at 1346. The
plaintiff filed suit challenging Customâs erroneous liquidations
of its entries, petitioning this Court to find jurisdiction under
§ 1581(i). Id. at 1345. Customs sought dismissal of the suit
arguing that because Juice Farms did not protest the erroneous
liquidations within the time frame prescribed by statute, it had
forfeited its right to bring a lawsuit under § 1581(a). Id.
Court No. 09-00476 Page 15
Having forfeited that right, Customs argued, Juice Farms could
not claim that § 1581(a) jurisdiction was âmanifestly inadequateâ
and thus could not sue using § 1581(i) jurisdiction.
While the erroneous liquidations in Juice Farms were found
to be unlawful, this Court found, and the Court of Appeals for
the Federal Circuit affirmed, that it was unable to order the
entries to be reliquidated because a timely protest was not made
by the plaintiff importer. Id. at 1346. The Federal Circuit
held that judicial review under 28 U.S.C. § 1581(i) was
unavailable because:
Despite information from Customs and
Commerce about suspension of these
liquidations pending investigation, the
bulletin notices adequately notified Juice
Farms of the [actual] liquidation. Juice
Farms failed to file a protest within ninety
days of [the] bulletin notice posting. Juice
Farmsâ protest was untimely. The Court of
International Trade properly dismissed this
case for lack of jurisdiction.
Section 1581(i) of title 28 provides
equitable relief in those cases where
jurisdiction under the other subsections of
section 1581 are âmanifestly inadequate.â In
this case, however, Juice Farms did not show
that the relief in 28 U.S.C. § 1581(a), if
properly invoked, would have been inadequate,
let alone manifestly inadequate. If Juice
Farms had protested within ninety days of
bulletin notices, it would have had an
opportunity to protest the legality of
Customsâ liquidations in the Court of
International Trade. As this court has
stated, a remedy is not inadequate âsimply
because appellant failed to invoke it within
Court No. 09-00476 Page 16
the time frame it prescribes.â
Id. (citations omitted).
Defendantâs argument notwithstanding, Juice Farms is
distinguishable from the instant case because that case involved
actual liquidations rather than deemed liquidations. Thus, the
important difference between this case and Juice Farms is that,
here, Customs, by posting the Bulletin Notice, claims to have
announced a deemed, and not an actual, liquidation. This
difference is critical because, here, unlike in Juice Farms, no
liquidation took place or could have taken place, and thus no
protestable event existed for plaintiff to contest. This
important distinction lies in the different authority delegated
to Customs with respect to actual and deemed liquidations.
Customs has the authority to take the steps that result in
an actual liquidation decision. See generally 19 U.S.C. § 1500.
By way of contrast, Customs has no authority to effect a deemed
liquidation, and can make no finding or determination as to
whether or not a deemed liquidation has occurred. As the plain
language of the deemed liquidation provision makes abundantly
clear, deemed liquidation occurs solely by operation of law.
Thus, since the statute provides that âliquidation[s]â are the
subject of protests, Alden Leeds had nothing to protest because
here, unlike in Juice Farms, there was no liquidation. 19 U.S.C.
§ 1514(a).
Court No. 09-00476 Page 17
This being the case, Alden Leeds is correct in arguing that
LG Electronics U.S.A., Inc. v. United States is instructive. 21
CIT 1421, 991 F. Supp. 668 (1997) (âLG Electronicsâ). In that
case, LG imported color television receivers from Korea that were
subject to an antidumping duty order. LG Electronics, 21 CIT at
1422, 991 F. Supp. at 670. LG deposited antidumping duties with
Customs upon entry of the subject merchandise. Id. at 1422, 991
F. Supp. at 670. Plaintiff then petitioned this Court for review
of Commerce's determinations. Id. at 1422, 991 F. Supp. at
670â71. Pending review, this Court issued preliminary
injunctions against liquidation of the disputed entries. Id. at
1422, 991 F. Supp. at 671.
Nonetheless, during the period that liquidation was
enjoined, Customs posted notices of deemed liquidation at the
entered rate. Id. at 1422, 991 F. Supp. at 671. None of the
purported liquidations were protested within the time frame
required by statute. Id. at 1423, 991 F. Supp. at 671. LG and
Commerce eventually reached a settlement that lowered the
antidumping duty rates from those imposed at entry. Id. at 1423,
991 F. Supp. at 671. As a result, the preliminary injunctions
against liquidation were lifted, permitting liquidation at the
new rates set by Commerce. Id. at 1423, 991 F. Supp. at 671â72.
Customs, however, refused to reliquidate the entries at the lower
rate and the importer filed suit in this Court, invoking 28
Court No. 09-00476 Page 18
U.S.C. § 1581(i) jurisdiction. Id. at 1423, 991 F. Supp. at 672.
Customs moved for summary judgment claiming that the Court had no
jurisdiction over LGâs claims. Id. at 1421, 991 F. Supp. at 670.
The LG Electronics Court denied Customsâ motion for summary
judgment and confirmed jurisdiction under § 1581(i). Id. at
1430, 991 F. Supp. at 677.
In doing so, the LG Electronics Court found that Customsâ
erroneous notices of deemed liquidation were invalid and of no
legal consequence. Id. at 1429, 991 F. Supp. at 676.
Liquidation is deemed to have occurred by
operation of law . . . [except] in cases of
extension, suspension or court order . . . .
Here liquidation was suspended. Thus, as a
matter of law, no deemed liquidation . . .
occurred. Although LG received erroneous
notice of liquidation of these entries,
plaintiff's claim may be heard, because LG did
not have to protest within 90 days, as
specified by 19 U.S.C. § 1514, to preserve its
right to judicial review. The computer-
generated notices of deemed liquidation are
invalid and legally inconsequential, as deemed
liquidation can occur only by operation of
law.
Id. at 1429, 991 F. Supp. at 676 (citation omitted). The court
further noted:
Notwithstanding Customs' provision for
posting notice of deemed liquidation . . .
deemed liquidation itself occurs by operation
of law. Where a liquidation has occurred by
operation of law, notice starts the clock for
the protest period, . . . but the regulations
specify that the notice be âdated as of the
date of expiration of the statutory period[]â
Court No. 09-00476 Page 19
. . . . Such notice may be posted any time
âwithin a reasonable period after each
liquidation by operation of law[]â . . . .
Accordingly, erroneous notice cannot create a
deemed liquidation. Without the expiration of
the statutory period, there is no date to be
noticed. As the statutory period for protest
never began to run, plaintiff may bring suit
under 28 U.S.C. § 1581(i) to compel
liquidation in accordance with the prior order
of the court.
Id. at 1430, 991 F. Supp at 676â77 (citations omitted). In LG
Electronics, as here, the entries purportedly deemed liquidated
were not, because âas a matter of law, no deemed liquidation . .
. occurred.â Id. at 1429, 991 F. Supp. at 676.
III. This Court Has Jurisdiction to Hear Plaintiffâs Case
As has been seen, Customs posted the Bulletin Notice while
Commerceâs suspension of liquidation was in effect and after
having received clear notice of the suspension of liquidation for
the subject merchandise. In addition, none of the § 1504(d)
preconditions necessary for a deemed liquidation to take place
were met prior to the posting of the Bulletin Notice at the
customshouse. Further, as this Court has made clear, âCongress
intended the suspension of liquidation required during § 1675
reviews to override the âdeemed liquidatedâ provisions of
§ 1504.â Am. Permac, Inc. v. United States, 10 CIT 535, 543, 642
F. Supp. 1187, 1194â95 (1986). As a result, no argument can be
Court No. 09-00476 Page 20
advanced to support a claim that a deemed liquidation did, in
fact, occur.
As has been noted, only âliquidation[s]â may be the subject
of protests. 19 U.S.C. § 1514(a). Consequently, Customsâ
posting of the Bulletin Notice was a legal nullity and did not
have the legal ramifications that defendant argues.9 As a
result, despite defendantâs argument to the contrary, Alden Leeds
was not required to protest Customsâ legally inconsequential
Bulletin Notice. See LG Electronics, 21 CIT at 1429, 991 F.
Supp. at 676.
9
Title 19 U.S.C. § 1514(a) provides, in relevant part,
that
the liquidation or reliquidation of an entry,
or reconciliation as to the issues contained
therein, or any modification thereof,
including the liquidation of an entry . . .
shall be final and conclusive upon all
persons (including the United States and any
officer thereof) unless a protest is filed in
accordance with this section, or unless a
civil action contesting the denial of a
protest, in whole or in part, is commenced in
the United States Court of International
Trade in accordance with chapter 169 of title
28 within the time prescribed by section 2636
of that title. When a judgment or order of
the United States Court of International
Trade has become final, the papers
transmitted shall be returned, together with
a copy of the judgment or order to the
Customs Service, which shall take action
accordingly.
Court No. 09-00476 Page 21
Since no protest of the Bulletin Notice was required,
judicial review of its contents under § 1581(a) was unavailable.
As a result, plaintiff has met the âmanifestly inadequateâ
standard, thus triggering this Courtâs § 1581(i) residual
jurisdiction. Miller, 824 F.2d at 963. Therefore, the court
finds it has jurisdiction to hear plaintiffâs claims under
§ 1581(i)(4).
IV. Plaintiff Has Stated a Claim Upon Which Relief Can Be
Granted
For the same reasons that this Court has jurisdiction,
plaintiff also has also stated a valid claim, notwithstanding
defendantâs contention that â19 U.S.C. § 1514(a) precludes any
relief.â Def.âs Mem. 11; see USCIT R. 12(b)(5). By claiming
jurisdiction under 19 U.S.C. § 1581(i), plaintiff asserts that
its cause of action arises under the Administrative Procedure Act
(âAPAâ). 5 U.S.C. §§ 702 et seq.; see also Royal United Corp. v.
United States, 34 CIT __, __, Slip Op. 10-71 at 13 (June 25,
2010) (âIt is, of course, axiomatic that this Court exercises
jurisdiction pursuant to Subsection 1581(i) to adjudicate a cause
of action under the APA.â). Section 702 of the APA provides that
â[a] person suffering legal wrong because of agency action . . .
is entitled to judicial review thereof.â 5 U.S.C. § 702. Here,
plaintiff alleges that it suffered a legal wrong as a result of
Court No. 09-00476 Page 22
Customsâ âwrongful disregard of the suspension of liquidation
instructionsâ by posting the Bulletin Notice. Am. Compl. ¶ 18.
The courtâs previous discussion of the lawfulness of this
Bulletin Notice indicates that has plaintiff stated a valid
claim.
Moreover, under the APA, the court has the authority to
âhold unlawful and set aside agency action . . . found to be . .
. arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.â 5 U.S.C. § 706(2)(A). Because it is
apparent that the court may grant relief to plaintiff by setting
the aside the Bulletin Notice, Alden Leeds has stated a claim
upon which relief can be granted, and defendantâs motion must
fail. See Totes-Isotoner Corp. v. United States, 32 CIT __, __,
569 F. Supp. 2d 1315, 1328 (2008) (holding, in light of the
Supreme Courtâs pleading analysis in Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007), that plaintiffs must now âallege
facts that could provide a showing that [they are] entitled to
reliefâ).
CONCLUSION
Here, Customs seeks to impose procedural bars to judicial
review of its erroneous act. Should its efforts succeed, Customs
would retain money that otherwise would be returned to Alden
Court No. 09-00476 Page 23
Leeds. Customs does not argue, nor indeed could it argue, that
it is entitled to Alden Leedsâs money. Indeed, in order to
advance such an argument, Customs would have to contend that a
deemed liquidation that could not and did not take place actually
transpired. Nonetheless, premised on the notion that Alden Leeds
should have monitored Customsâ behavior in order to catch the
agencyâs own mistakes, Customs seeks to avoid returning the
companyâs funds. As has been seen, the law does not direct this
result. Therefore, for the foregoing reasons, defendantâs motion
to dismiss is denied.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: September 7, 2010
New York, New York