Fedmet Resources Corp. v. United States

2014 CIT 141

Opinion

Slip Op. 14-141

UNITED STATES COURT OF INTERNATIONAL TRADE

FEDMET RESOURCES CORPORATION,

Plaintiff, Before: Timothy C. Stanceu, Chief Judge v. Court No. 14-00297 UNITED STATES,

Defendant.

OPINION AND ORDER

[Denying defendant’s motion to stay action contesting a determination by U.S. Customs and Border Protection to require additional bonding on plaintiff’s entries of magnesia carbon bricks]

Date: December 8, 2014

Donald B. Cameron, Morris, Manning & Martin LLP, of Washington, DC, for plaintiff Fedmet Resources Corporation. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Sarah S. Sprinkle.

Patricia M. McCarthy, Assistant Director, Amy M. Rubin, Assistant Director, and Melissa M. Devine, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant United States. With them on the brief were Joyce R. Branda, Acting Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Paula S. Smith, Attorney, Office of the Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

Stanceu, Chief Judge: In this action, plaintiff Fedmet Resources Corporation (“Fedmet”)

challenges a determination by U.S. Customs and Border Protection (“Customs” or “CBP”)

requiring Fedmet to post single transaction bonds (“STBs”) equal to 260.24% ad valorem for

each of four entries of Fedmet’s imports of magnesia carbon bricks (“MCBs”). Citing

section 706(2) of the Administrative Procedure Act, 5 U.S.C. § 706(2)(2012), plaintiff claims

that the decision by Customs requiring Fedmet to post the STBs was “‘arbitrary, capricious, an Court No. 14-00297 Page 2

abuse of discretion, or otherwise not in accordance with law.’” Compl. ¶¶ 3-4 (Nov. 12, 2014),

ECF No. 5 (“Compl.”). Plaintiff notes that the 260.24% ad valorem cash deposit rate was

derived from estimated antidumping duty (“AD”) and countervailing duty (“CVD”) orders (the

“Orders”) on MCBs from the People’s Republic of China (“China” or the “PRC”) and argues

that Customs exceeded its authority under 19 U.S.C. § 1623 (2012) and 19 C.F.R. § 113.13(d)

(2014) by failing to provide adequate reasons for imposing the bond requirement on the

merchandise, which Fedmet had entered as products of Vietnam. Id. (citing Certain Magnesia

Carbon Bricks From the People’s Republic of China: Final Determination of Sales at Less Than

Fair Value and Critical Circumstances, 75 Fed. Reg. 45,467 (Int’l Trade Admin. Aug. 2, 2010);

Certain Magnesia Carbon Bricks From the People’s Republic of China: Final Affirmative

Countervailing Duty Determination, 75 Fed. Reg. 45,472 (Int’l Trade Admin. Aug. 2, 2010));

Mem. of Law in Supp. of Pl.’s Appl. for a TRO & Mot. for a Prelim. Inj. 12-13 (Nov. 12, 2014),

ECF No. 8 (public) (“Pl.’s Public Inj. Br.”).

Before the court is a motion by defendant United States to stay the filing of the

administrative record pending the court’s decision on a motion to dismiss this case that defendant

filed on the same date. Def.’s Mot. to Stay the Filing of the Admin. R. (Dec. 4, 2014), ECF

No. 24 (“Stay Mot.”). Defendant indicates in its motion that plaintiff opposes a stay. Id. at 1.

The court denies defendant’s motion to stay for the reasons discussed herein.

I. BACKGROUND

Fedmet is a United States importer of MCBs and was the importer of record for four

entries of MCBs that are at issue in this case. Compl. ¶ 1, 6. On September 3, 2014, Fedmet

attempted to enter at the Port of Chicago a shipment of MCBs that was described on entry

documents as being of Vietnamese origin. See Pl.’s Public Inj. Br. 4. Court No. 14-00297 Page 3

On September 15, 2014, Fedmet received from Customs at the Port of Chicago an

Entry/Summary Rejection Sheet pertaining to the September 3, 2014 shipment that arrived at that

port. Pl.’s Public Inj. Br. 4; Mem. of Law in Supp. of Pl.’s Appl. for a TRO & Mot. for a Prelim.

Inj., Attach. 2 at Ex. 1 (Nov. 12, 2014), ECF No. 12 (conf.) (“Pl.’s Conf. Inj. Br.”). By this

document, Customs sought a single transaction bond in the amount of 260.24%, explaining that

“[t]his amount covers the current cash deposit rate for Magnesia Carbon Bricks from China per

Department of Commerce Antidumping and Countervailing Duty orders A570-954 (236%) and

C570-955 (24.24%).”1 Pl.’s Public Inj. Br. 4; Pl.’s Conf. Inj. Br., Attach. 2 at Ex. 1. Customs

added that “[t]he merchandise will not be released until the STB is received.” Pl.’s Public Inj.

Br. 4; Pl.’s Conf. Inj. Br., Attach. 2 at Ex. 1. On September 22, 2014, Fedmet received a second

Entry/Summary Rejection Sheet from Customs pertaining to a second shipment that Fedmet

attempted to enter at the Port of Chicago on September 4, 2014. Pl.’s Public Inj. Br. 4; Pl.’s

Conf. Inj. Br., Attach. 2 at Ex. 1.

On October 9, 2014, Fedmet made a written request to Customs at the Port of Chicago to

reconsider the STB requirement for the Chicago entries. Pl.’s Public Inj. Br. 5; Pl.’s Conf. Inj.

Br., Attach. 2. As of November 12, 2014, Fedmet reported that it had not received a written

response to its October 9, 2014 submission. Pl.’s Public Inj. Br. 5.

1 On August 2, 2010, the U.S. Department of Commerce (“Commerce”) issued antidumping and countervailing duty orders on magnesia carbon bricks from the People’s Republic of China (“China” or the “PRC”), which resulted in a “PRC wide Entity” antidumping weighted-average margin of 236.00% and an “all others” net countervailing subsidy rate of 24.24% ad valorem. See Certain Magnesia Carbon Bricks From the People’s Republic of China: Final Determination of Sales at Less Than Fair Value and Critical Circumstances, 75 Fed. Reg. 45,467, 45,471 (Int’l Trade Admin. Aug. 2, 2010); Certain Magnesia Carbon Bricks From the People’s Republic of China: Final Affirmative Countervailing Duty Determination, 75 Fed. Reg. 45,472, 45,474 (Int’l Trade Admin. Aug. 2, 2010). Court No. 14-00297 Page 4

Fedmet received two additional Entry/Summary Rejection Sheets from Customs, both

dated November 6, 2014, pertaining to two shipments that Fedmet attempted to enter at the Port

of Cleveland. Compl. ¶ 19. Both rejection sheets stated that “[t]he country of origin for

magnesia carbon brick is believed to be China” and directed Fedmet to post a single transaction

bond (“STB”) of 260.24% for each of these entries. Id.; Pl.’s Conf. Inj. Br., Attach. 1, Ex. 3.

Fedmet initiated this action by filing a summons and a complaint on November 12, 2014

challenging the STB requirement for the two entries at the Port of Chicago and the two entries at

the Port of Cleveland. Summons, ECF No. 1; Compl., ECF No. 5.

The court conducted two telephone conferences, on November 13, 2014 and

November 17, 2014, with the parties to this action. Based on agreements reached during these

conferences, the court entered an expedited scheduling order on November 17, 2014. Order,

ECF No. 17 (“Scheduling Order”). The scheduling order required Customs to answer plaintiff’s

complaint by December 1, 2014 and to file the administrative record by December 5, 2014. Id.

at 1. On December 1, 2014, defendant filed a consent motion for an extension of time until

December 5, 2014 to file its answer to the complaint and an extension of time until

December 9, 2014 to file the administrative record. Def.’s Consent Mot. for Extension of Time,

ECF No. 21. The court granted this motion. Order (Dec. 3, 2014), ECF No. 21 (“Extension of

Time Order”).

On December 4, 2014, defendant filed its motion to dismiss under USCIT Rule 12(b)(1),

arguing that the court lacks subject matter jurisdiction due to mootness. Def.’s Mot. to

Dismiss 1, ECF No. 23. Defendant argues that the case is now moot because Fedmet has

redirected the Chicago entries to Canada and posted STBs for the Cleveland entries. Id. at 1, 3. Court No. 14-00297 Page 5

Defendant simultaneously filed its motion requesting that the court stay the filing of the

administrative record pending the court’s ruling on the motion to dismiss. Stay Mot. 1.

II. DISCUSSION

“[T]he power to stay proceedings is incidental to the power inherent in every court to

control the disposition of the causes on its docket with economy of time and effort for itself, for

counsel, and for litigants.” Landis v. North American Co., 299 U.S. 248, 254 (1936) (“Landis”).

The decision of when and how to stay a proceeding rests “within the sound discretion of the trial

court.” Cherokee Nation of Okla. v. United States, 124 F.3d 1413, 1416 (Fed. Cir. 1997)

(citations omitted). In making this decision, the court is to “weigh competing interests and

maintain an even balance.” Landis, 299 U.S. at 257. Where a stay might damage another party,

the moving party “must make out a clear case of hardship or inequity in being required to go

forward.” Id. at 255.

The court will deny the stay motion because the competing interests do not support a

stay. Defendant submits that if the court dismisses the action “no record will be necessary” and

that “[a]s we demonstrate in our simultaneously-filed motion to dismiss, Fedmet’s entire case is

moot and this Court does not possess jurisdiction to entertain any of Fedmet’s challenges with

respect to the four entries that are encompassed by this action.” Stay Mot. 1. Defendant

concludes that ‘[i]t would be premature, a misuse of resources, and indeed inappropriate for the

Government to be required to file the administrative record at this time.” Id.

The issue of whether or not this case has become moot will require the court to ascertain,

by whatever means are necessary, certain jurisdictional facts, including in particular factual

circumstances that may surround Fedmet’s posting of the STBs to which defendant alludes in its

motion to dismiss. Plaintiff’s response to the motion to dismiss may shed light on those facts. Court No. 14-00297 Page 6

Plaintiff has the right under USCIT Rule 7(d) to respond to defendant’s motion to dismiss within

thirty days after service of that motion; defendant nevertheless would have the court delay this

action before hearing plaintiff’s response. Plaintiff’s counsel, in keeping with the expedited

nature of this case, has informed the court that it plans to file a response to the motion to dismiss

more expeditiously than is required by Rule 7(d). Because defendant’s motion to dismiss raises

issues the adjudication of which likely will depend, at least in part, on plaintiff’s response to that

motion, the court will not presume that this case is moot and will not grant a stay that could delay

the resolution of this expedited case to the prejudice of the plaintiff. Defendant has not

established that it will incur hardship or inequity if required to go forward. See Landis, 299 U.S.

at 255.

At this stage, the court considers it prudent to avoid delay resulting from the absence of

an administrative record on which this case could proceed. As plaintiff alleges that “CBP has

refused to disclose to Fedmet any information concerning the basis for its apparent suspicion

regarding the origin of the MCBs . . . ,” Compl. ¶ 4, the administrative record is likely to bear

directly on the issue raised in this action. Per the agreement of the parties and based on the

consideration that this case merits expedited proceedings, the court entered an expedited

schedule for this case. See Scheduling Order 1. During the November 17, 2014 teleconference

with the court, defendant agreed to submit the administrative record by December 5 2014. The

court discerns no material hardship to defendant that will result from the filing of the

administrative record, a filing to which defendant has agreed. The court, with plaintiff’s consent,

already has granted one extension of time beyond the initial deadline for this filing. See

Extension of Time Order 1. No further delay is warranted. Court No. 14-00297 Page 7

III. CONCLUSION AND ORDER

For the reasons described herein and upon consideration of all papers and proceedings in

this case, and upon due deliberation, it is hereby

ORDERED that Defendant’s Motion to Stay the Filing of the Administrative Record (Dec. 4, 2014), ECF No. 24, is denied; and it is further

ORDERED that defendant shall file the administrative record on or before December 9, 2014, in accordance with the court’s scheduling order entered on November 17, 2014, as amended. See Order, ECF No. 17; Order (Dec. 3, 2014), ECF No. 21.

/s/Timothy C. Stanceu Timothy C. Stanceu Chief Judge Dated: December 8, 2014 New York, New York