Canadian Wheat Bd. v. U.S.

580 F.Supp.2d 1350

CANADIAN WHEAT BOARD and the Government of Canada, Plaintiffs, and Government of Alberta, Government of Ontario, and Government of Saskatchewan, Plaintiff-Intervenors, v. UNITED STATES and the United States Department of Commerce, Defendants.

Slip Op. 08-112. Court No. 07-00058.

United States Court of International Trade.

October 20, 2008.

COPYRIGHT MATERIAL OMITTED

Steptoe & Johnson LLP (Mark A. Moran, Jamie B. Beaber, and Matthew S. Yeo), for plaintiff Canadian Wheat Board.

Weil, Gotshal & Manges LLP (M. Jean Anderson, J. Sloane Strickler, John M. Ryan, and Peter J.S. Kaldes), and Wilmer Cutler Pickering Hale and Dorr LLP (Danielle G. Spinelli, Mark C. Fleming, Randolph D. Moss, and Seth P. Waxman), for plaintiff Government of Canada.

Arnold & Porter LLP (Lawrence A. Schneider and Francis Anthony Franze-Nakamura), for plaintiff-intervenor Government of Alberta.

Hogan & Hartson LLP (Mark S. McConnell, H. Deen Kaplan, Jonathon T. Stoel), for plaintiff-intervenor Government of Ontario.

Cameron & Hornbostel LLP (Michele Sherman Davenport), for plaintiff-intervenor Government of Saskatchewan.

Gregory G. Katsas, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Stephen C. Tosini); Office of the Chief Counsel for Import Administration, United States Department of Commerce (Scott D. McBride), of counsel, for defendants.

OPINION

EATON, Judge.

This matter is before the court on the motions of plaintiffs Canadian Wheat Board ("CWB") and the Governments of Canada¹ (collectively, "plaintiffs") for summary judgment pursuant to USCIT Rule 56(c) and the motion of defendant the United States to dismiss plaintiffs' case pursuant to USCIT Rules 12(b)(1) and 12(b)(5).

In bringing this action, plaintiffs seek to compel the liquidation, without the imposition of unfair trade duties, of certain entries of hard red spring ("HRS") wheat imported into the United States from Canada. Specifically, plaintiffs contend that, because the order imposing the antidumping and countervailing duties affecting CWB's merchandise has been invalidated, all of its unliquidated entries should be liquidated without the imposition of either antidumping or countervailing duties. See Memo. Pl. CWB Supp. Mot. Summ. J. and Opp. Def.'s Mot. to Dismiss ("CWB Br.") 1-4; Memo. Supp. Mot. Pl. Gov't Canada and Pl.-Ints. Canadian Provincial Gov'ts Summ. J. and Resp. Def.'s Mot. to Dismiss ("Can. Br.") 1-3; see also HRS Wheat From Canada, 68 Fed.Reg. 60,641 (Dep't of Commerce Oct. 23, 2003) (notice of antidumping duty order); HRS Wheat From Canada, 68 Fed.Reg. 60,642 (Dep't of Commerce Oct. 23, 2003) (notice of countervailing duty order) (collectively, the "AD/CVD Orders").

Plaintiffs' challenge is to the United States Department of Commerce's ("Commerce" or the "Department") conclusion that CWB's duty deposits should not be refunded in their entirety, despite the revocation of the order under which they were imposed. This legal conclusion was contained in the Department's notice of revocation of the AD/CVD Orders, which was published following a negative injury determination of the United States International Trade Commission ("ITC" or the "Commission"). See Antidumping Duty Investigation and Countervailing Duty Investigation of HRS Wheat from Canada, 71 Fed.Reg. 8,275 (Dep't of Commerce Feb. 16, 2006) (Notice of Panel Decision, Revocation of Countervailing and Antidumping Duty Orders and Termination of Suspension of Liquidation) (the "Notice of Revocation").

For plaintiffs, Commerce committed legal error by not providing for the return of all duty deposits for CWB's entries, the liquidation of which had been suspended, made while the now invalid AD/CVD Orders were in place. Plaintiffs claim that their position is supported by this Court's decision in Tembec, Inc. v. United States, 30 CIT ___, 461 F.Supp.2d 1355 (2006) ("Tembec II"), judgment vacated by Tembec, Inc. v. United States, 31 CIT ___, 475 F.Supp.2d 1393 (2007) ("Tembec III").² Defendant the United States' motion, on behalf of Commerce, seeks dismissal of this action on the grounds that the court does not have the authority to hear plaintiffs' claims. See generally Def.'s Mot. to Dismiss ("Def.'s Br.").

For the reasons that follow, the court dismisses the Governments of Canada from this case for lack of standing, denies the Governments of Canada's motion for summary judgment, and grants CWB's motion for summary judgment.

BACKGROUND

Plaintiff CWB is an exporter of Canadian HRS wheat. In September 2002, the domestic wheat industry petitioned both Commerce and the ITC seeking investigations into possible dumping and subsidization of Canadian HRS wheat, and into the effect of Canadian wheat imports on the United States market. Thereafter, following an investigation, Commerce published its determination that Canadian HRS wheat was both subsidized and being sold in the United States at less than fair value. See Certain Durum Wheat and HRS Wheat from Canada, 68 Fed.Reg. 52,747 (Dep't of Commerce Sept. 5, 2003) (final affirmative countervailing duty determinations); Certain Durum Wheat and HRS Wheat from Canada, 68 Fed.Reg. 52,741 (Dep't of Commerce Sept. 5, 2003) (notice of final determinations of sales at less than fair value).

In October 2003, after conducting its own investigation, the ITC determined that imports of Canadian HRS wheat were materially injuring the domestic industry. See Durum and HRS Wheat from Canada, USITC Pub. 3639, Inv. Nos. 701-TA-430A and 430B and 731-TA-1019A and 1019B (Oct.2003) (Final). This, however, did not end the matter, for CWB challenged the ITC's affirmative determination before a North American Free Trade Agreement ("NAFTA") panel. The panel found that the ITC's affirmative material injury determination was unsupported by substantial evidence and remanded the case to the Commission for further consideration. See HRS Wheat from Canada, USA-CD2003-1904-06 (panel decision) at 64 (June 7, 2005). On remand, the ITC reversed its original affirmative determination and concluded "that an industry in the United States is not materially injured, or threatened with material injury, by reason of imports of [HRS] wheat from Canada found to be subsidized and sold in the United States at less than fair value." HRS Wheat from Canada, USITC Pub 3806, Inv. Nos. 701-TA-430B and 731-TA-1019B (Oct.2005) (Remand).

The domestic wheat industry then challenged the ITC's negative determination before the NAFTA panel. The domestic industry did not prevail, however, and in December 2005 the panel sustained the ITC's negative determination and ordered the United States NAFTA Secretary to issue a Notice of Final Panel Action. That notice was issued on December 23, 2005. See HRS Wheat from Canada, USA-CDA-2003-1904-06 (panel decision on remand determination) at 5, 21-22 (Dec. 12, 2005).

On January 30, 2006, the United States NAFTA Secretary published in the Federal Register a Notice of Completion of Panel Review, which by its terms was effective as of January 24, 2006. See Article 1904 NAFTA Panel Reviews; Completion of Panel Review, 71 Fed.Reg. 4,896 (Dep't of Commerce Jan. 30, 2006) (notice).

On January 31, 2006, pursuant to 19 U.S.C. § 1516a(g)(5)(B), Commerce published in the Federal Register notice that the NAFTA panel's final decision was not in harmony with the ITC's original affirmative injury determination. See HRS Wheat from Canada: NAFTA Panel Decision, 71 Fed.Reg. 5,050 (Dep't of Commerce Jan. 31, 2006) (the "Timken Notice"); see also Timken Co. v. United States, 893 F.2d 337 (Fed.Cir.1990). This notice had an effective date of January 2, 2006,³ and stated that it "serve[d] to suspend liquidation of entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after January 2, 2006, i.e., ten days from the issuance of the Notice of Final Panel Action, at the current cash deposit rate." Timken Notice, 71 Fed.Reg. at 5,051. Thus, the notice preserved from liquidation those entries made on or after January 2, 2006, but did nothing to prevent liquidation of earlier entries.

On February 16, 2006, the Department published the Notice of Revocation, which "revok[ed] the countervailing duty order and antidumping duty order on [HRS] wheat from Canada...." Notice of Revocation, 71 Fed.Reg. at 8,275. Although, as shall be seen, the notice itself appears to indicate otherwise, defendant insists that the Notice of Revocation did not affect the liquidation of entries made prior to January 2, 2006. See Def.'s Br. 10.

Plaintiff CWB's entries were made in September 2004. At the time they were entered, CWB's goods were subject to the duties imposed by the then-existing AD/CVD Orders. As a result, CWB paid cash deposits based on the 5.29 percent net subsidy rate and 8.86 percent antidumping duty margin.⁴ Liquidation of these entries was suspended on October 31, 2005, when CWB filed a request for administrative review of the AD/CVD Orders. See Canadian Wheat Bd. v. United States, 31 CIT ___, ___, 491 F.Supp.2d 1234, 1239 (2007) (citations omitted).

On February 21, 2007, plaintiffs CWB and the Federal Government of Canada commenced actions (since consolidated) in this Court, challenging Commerce's failure to make the revocation of the AD/CVD Orders effective ab initio and refund all paid cash deposits. Thereafter, on February 26, 2007, CWB withdrew its request for administrative review. That same day, CWB moved to restrain temporarily and enjoin preliminarily the liquidation of its merchandise to allow it to litigate the merits of its case. Id. at ___, 491 F.Supp.2d at 1239.

On February 28, 2007, the court granted CWB's motion for a temporary restraining order. See id. at ___, 491 F.Supp.2d at 1248. On May 2, 2007, the court enjoined the liquidation of CWB's entries pending the final and conclusive decision...