Montgomery Ward & Co. v. Zenith Radio Corp.

673 F.2d 1254, 69 C.C.P.A. 96
CourtCourt of Customs and Patent Appeals
DecidedMarch 11, 1982
DocketAppeal No. 81-24
StatusPublished
Cited by49 cases

This text of 673 F.2d 1254 (Montgomery Ward & Co. v. Zenith Radio Corp.) is published on Counsel Stack Legal Research, covering Court of Customs and Patent Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montgomery Ward & Co. v. Zenith Radio Corp., 673 F.2d 1254, 69 C.C.P.A. 96 (ccpa 1982).

Opinion

Nies, Judge.

Montgomery Ward & Company (Wards) and the Government as intervenor appeal from an order of the Court of International Trade requiring the Government to disclose to Zenith Radio Corporation (Zenith) a file compiled by the Customs Service during an investigation of Wards for possible violations of 19 U.S.C. 1592, We reverse and remand with instructions to dismiss this action for want of jurisdiction.

BACKGROUND

This proceeding involves review of the discretionary action of the Secretary of Commerce and raises fundamental questions of the separation of powers between the Judicial and Executive Branches of Government. Zenith seeks to overturn a portion of settlement agreements under which the Secretary of Commerce, the Secretary of the Treasury, and the Attorney General compromised claims against 22 importers with respect to dumping duties imposed on these companies pursuant to T.D. 71-76, 5 Cust. Bull. 151 (1971), and civil penalty claims against four of these companies, including Wards, asserted under 19 U.S.C. 1592. Zenith challenges only the legality of the agree[99]*99ments insofar as they relate to dumping duty claims which were not in litigation and which would he settled for approximately $66 million.1

Zenith alleged two causes of action, the first that the Secretary of Commerce had no authority to settle claims for dumping duties under 19 U.S.C. 1617, and a second that, assuming the Secretary had such authority, the settlements were entered into in bad faith. On February 27, 1981, the court below granted the Government’s motion for summary judgment on the first cause of action and denied summary judgment on the cause based on “bad faith.”

Zenith alleges that the subject settlements are the culmination of years of utter disregard of the law by officials of the Executive Branch who have interfered with and frustrated enforcement of the Anti-dumping Act, that political considerations motivated the settlement rather than enforcement, that Zenith had no opportunity to be heard concerning the amount of duties which would be assessed, that the settlements violated its procedural rights under § 751 of the Tariff Act of 1930 (19 U.S.C. 1675), which was added by the Trade Agreements Act of 1979, and that it is aggrieved by its competitors’ unlawful release from payment of hundreds of millions of dollars in dumping duties.

Zenith asserts that the Government’s estimate of $138.7 million as the possible amount of dumping duties which might be collected was low, and that any belief by the officials in the legal weakness of the Government’s case against the importers with respect to the Government’s method of calculating such duties was unfounded.

Zenith further asserts that the Government of the United States and the Government of Japan entered into a secret side agreement at the time of the Orderly Marketing Agreement entered into between the countries in May 1977 in which the United States agreed to assess dumping duties in conformity with the International Antidumping Code, notwithstanding that the Code differs from our national legislation.

Finally, Zenith asserts that the settlement agreement falsely states that the United States knew of no violation of law relating to or arising from the importation of Japanese television receivers.

Zenith’s original complaint, filed June 27, 1980, was based upon rights under section 516A(a) (2) of the Tariff Act of 1930 (19 U.S.C. [100]*1001516a (a) (2)), and asserted jurisdiction in the court under 28 U.S.C. 1581(c). In its amended complaint filed November 3, 1980, it added an allegation that the action was brought pursuant to 5 U.S.C. 772 et seq. [sic, the Administrative Procedure Act, 5 U.S.C. 702 et seq., hereinafter APA], jurisdiction being conferred by 28 U.S.C. 1581 (i) .2 However, the remaining allegations of the complaint were unchanged except for minor details and the addition of a specific pleading that it would be adversely affected or aggrieved by the favorable settlement of the claims against its competitors.

DISCOVERY PROCEEDINGS IN THE COURT OP INTERNATIONAL TRADE

On July 2, 1980, Zenith served interrogatories and a request for production of documents upon the Government. The Government moved for an order relieving it of the obligation to respond, urging that judicial review should be limited to the record made by the agency. The court denied that motion on August 20,1980.

Zenith moved on October 25, 1980, for an order preliminarily enjoining implementation of the settlement agreements. The Government opposed, again moving for an order relieving it of the obligation to respond to discovery.

On December 9, 1980, the court issued an injunction- pendent lite, preliminarily enjoining implementation of the settlement agreements, stating that Zenith had “made out a substantial case on the merits of its alternative second [bad faith] cause of action.” Zenith Radio Corp. v. United States, 1 CIT 53, Slip Op. 80-11, 505 F. Supp. 216, 219 (1980).

On December 12, 1980, the court denied the Government’s second motion, holding that Zenith had “made a sufficiently strong showing of bad faith so as to warrant discovery”3 and directed the Government to respond to Zenith’s discovery demands. Zenith Radio Corp. v. United States, 1 CIT 53, Slip Op. 80-11, 15 Cust. Bull. & Dec., No. 1, 29 (1980). The administrative record was timely filed on January 27,1981, and, accordingly, had not been reviewed at the time of the court’s order of December 12,1980.4

[101]*101The Government continued to resist production of documents outside the administrative record in connection with its motion for summary judgment and submitted affidavits to overcome Zenith’s showing of “bad faith.” Zenith moved for an order compelling production. Among the documents sought was the Investigative file compiled by the Customs Service during its § 1592 investigation of Wards (Wards file). Wards was permitted to intervene for the sole purpose of opposing the motion for production of that file.

On May 13,1981, the court granted Zenith’s motion for production, under a protective order. Its motion for reconsideration being denied on June 18,1981, Wards appealed. On July 7,1981, this court granted a stay of the May 13,1981 order.

POSITIONS OP THE PARTIES ON APPEAL

Zenith argues that the subject discovery order is interlocutory and, therefore, not subject to review at this time. Zenith further contends that the court below did not abuse its discretion in going beyond the record and granting discovery because of the strength of its showing of bad faith.

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Bluebook (online)
673 F.2d 1254, 69 C.C.P.A. 96, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montgomery-ward-co-v-zenith-radio-corp-ccpa-1982.