Philipp Bros., Inc. v. United States

630 F. Supp. 1317, 10 Ct. Int'l Trade 76, 10 C.I.T. 76, 1986 Ct. Intl. Trade LEXIS 1268
CourtUnited States Court of International Trade
DecidedFebruary 14, 1986
Docket84-4-00528
StatusPublished
Cited by53 cases

This text of 630 F. Supp. 1317 (Philipp Bros., Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philipp Bros., Inc. v. United States, 630 F. Supp. 1317, 10 Ct. Int'l Trade 76, 10 C.I.T. 76, 1986 Ct. Intl. Trade LEXIS 1268 (cit 1986).

Opinion

RESTANI, Judge:

This matter is before the court on plaintiff’s challenge of the final determination in a section 751 annual review of a countervailing duty (CVD) order. Tariff Act of 1930, as amended, 19 U.S.C. § 1675 (1982 & West Supp.1985); 49 Fed.Reg. 9,923 (1984). On April 4, 1980, the International Trade Administration (ITA) of the United States Department of Commerce published a CVD order, pursuant to 19 U.S.C. § 1303 (1982), on pig iron from Brazil. 1 45 Fed.Reg. 23,-045 (1980). The excessive remission of Brazil’s value-added Industrial Products Tax (IPI) was among the subsidies found to be provided by the government of Brazil for exports of Brazilian pig iron. Prior to issuance of the CVD order by ITA, however, the Brazilian government announced that this excess credit would be eliminated as of December 12, 1979, and the subsidy determination was reduced accordingly. Consistent with the conclusion of the Treasury Department, ITA’s estimated duties for the eight largest exporters were calculated on a company-specific, rather than average, basis reflecting the varying bene *1319 fits received by each of the companies from the subsidies. In both its first and second annual reviews, however, ITA switched from its company-specific CVD assessment to an average assessment, which thereby required each pig iron exporter to pay countervailing duties at the same rate. In addition, in its second annual review, ITA announced that it had learned that although the Brazilian government had begun to impose a tax to offset the IPI export credit premium, collection of that tax had been delayed. ITA concluded that the delay in collection conferred a benefit akin to an interest free loan to Brazilian pig iron exporters. ITA calculated the ad valorem benefit of the delay in collection of the offset tax and increased the aggregate countervailing duty rate accordingly in its second annual review, covering entries made during 1980.

Only plaintiff’s challenge of ITA’s second annual review is before the court. Plaintiff alleges that the decision to assess countervailing duties on an average basis rather than a company-specific basis was unlawful. In addition, plaintiff asserts that ITA’s second annual review was untimely and therefore contrary to law. Further, plaintiff claims that adjustment of the CVD rate due to the lag in collection of the IPI export credit premium offset tax constituted the imposition of a CVD without first establishing that such delay is in fact a subsidy. Finally, plaintiff contends that even if this delay in tax collection constitutes a subsidy, ITA’s calculation of the IPI export credit subsidy based on credits earned rather than received, required it to similarly consider the date of offset tax assessment rather than collection.

I. Participation in Comment Period as Jurisdictional Prerequisite

Defendant raises the same jurisdictional defense, failure to exhaust administrative remedies, to plaintiff’s first two claims. Specifically, defendant maintains that plaintiff was required to participate in the comment period following the issuance of the section 751 preliminary review before seeking judicial relief. Under section 751, as it read during the period in question, ITA was required to conduct annual reviews of each CVD order. 2 Accordingly, the agency published its notice of “Preliminary Results of Administrative Review” concerning Brazilian pig iron. 48 Fed.Reg. 54,091 (1983). This notice invited interested parties to comment on the preliminary results. Id. Written comments could be submitted within thirty days of the date of publication of the notice (November 30, 1983). Parties could also “request disclosure and/or a hearing” within ten days of publication. Id. at 54,093. The first question confronting the court is whether plaintiff was required to submit comments or request a hearing before raising issues in this court that could have been raised before the agency.

“The general rule is that ‘administrative exhaustion of remedies is required before a litigant will be allowed to raise a claim via a civil action.’ ” Allen v. Regan, 9 C.I.T. -, Slip Op. 85-126 at 6 (Dec. 10, 1985) (quoting Rhone Poulenc, S.A. v. United *1320 States, 7 C.I.T. -, 583 F.Supp. 607, 609 (1984), citing United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37, 73 S.Ct. 67, 69, 97 L.Ed. 54 (1952)). Procedures governing section 751 reviews are set out in 19 C.F.R. § 355.41 (1983), promulgated by the Secretary of the Treasury. Section 355.41(d) specifically lists the various procedures that ITA set forth in its preliminary order. Thus, to have exhausted its administrative remedies, plaintiff should have either requested a hearing or offered written comments on the proposed changes. Under normal circumstances, only then would it be able to raise those issues at the judicial level. L.A. Tucker Truck Lines, 344 U.S. at 37, 73 S.Ct. at 69 (“as a general rule ... courts should not topple over administrative decisions unless the administrative body not only had erred, but has erred against objection made at the time appropriate under its practice”); Unemployment Compensation Commission v. Aragon, 329 U.S. 143, 155, 67 S.Ct. 245, 251, 91 L.Ed. 136 (1946) (“[a] reviewing court usurps the agency’s function when it sets aside the administrative determination upon a ground not theretofore presented”); Meglio v. Merit Systems Protection Board, 758 F.2d 1576, 1577-78 (Fed.Cir. 1984) (failure to raise claim before administrative body constitutes effective waiver of right to contest).

A plaintiff’s failure to exhaust its administrative remedies is not always fatal to its case, however. This court is not required by statute to consider full exhaustion of administrative remedies a jurisdictional prerequisite to an action contesting the final determination of an annual review of a countervailing duty order. Instead, in this situation, the court “shall, where appropriate, require the exhaustion of administrative remedies.” 28 U.S.C. § 2637(d) (1982) (emphasis added). See Rhone Poulenc, 7 C.I.T. at -, 583 F.Supp. at 611 (exhaustion required “where appropriate” if plaintiff satisfies prerequisite of participation under 19 U.S.C. § 1516a(a)(2)). 3

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Bluebook (online)
630 F. Supp. 1317, 10 Ct. Int'l Trade 76, 10 C.I.T. 76, 1986 Ct. Intl. Trade LEXIS 1268, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philipp-bros-inc-v-united-states-cit-1986.