Husteel Co. v. United States

34 F.Supp.3d 1355

HUSTEEL CO., LTD., PlaintiffNexteel Co., Ltd. and Hyundai HYSCO, Consolidated PlaintiffsILJIN Steel Corporation, AJU Besteel Co., Ltd., and SeAH Steel Corp., Plaintiff–Intervenors

v. UNITED STATES, DefendantUnited States Steel Corporation, Boomerang Tube LLC, Energex Tube (A Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., Welded Tube USA Inc., and Maverick Tube Corporation, Defendant–Intervenors.

Slip Op. 14–148.

Court No. 14–00215.

United States Court of International Trade.

Dec. 18, 2014.

Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, and Sarah S. Sprinkle, Morris, Manning & Martin, LLP, of Washington, DC, for plaintiff.

J. David Park, Nazakhtar Nikakhtar, Henry D. Almond, Yujin K. McNamara, and Yun H. Lee, Akin, Gump, Strauss, Hauer & Feld, LLP, of Washington, DC, for consolidated plaintiffs.

Joel D. Kaufman, Richard O. Cunningham, Alice A. Kipel, and Henry N. Smith, Steptoe & Johnson LLP, of Washington, DC, for plaintiff-intervenor ILJIN Steel Corporation.

Neil R. Ellis, Dave M. Wharwood, Rajib Pal, and Shawn M. Higgins, Sidley Austin, LLP, of Washington, DC, for plaintiff-intervenor AJU Besteel Co., Ltd.

Jeffrey M. Winton, Law Office of Jeffrey M. Winton PLLC, of Washington, DC, for plaintiff-intervenor SeAH Steel Corp.

Melissa M. Devine and Emma E. Bond, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., and Mykhaylo A. Gryzlov, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC, for defendant.

Jeffrey D. Gerrish, Robert E. Lighthizer, and Jamieson L. Greer, Skadden Arps Slate Meagher & Flom, LLP, of Washington, DC, for defendant-intervenor United States Steel Corporation.

Roger B. Schagrin, John W. Bohn, and Paul W. Jameson, Schagrin Associates, of Washington, DC, for defendant-intervenors Boomerang Tube LLC, Energex Tube, Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., and Welded Tube USA Inc.

Robert E. DeFrancesco, III, Alan H. Price, Adam M. Teslik, and Laura El–Sabaawi, Wiley Rein, LLP, of Washington, DC, for defendant-intervenor Maverick Tube Corporation.

OPINION

RESTANI, Judge:

Before the court are the motions for injunctions of liquidation and eventual liquidation in accordance with the results of litigation filed by plaintiff Husteel Co., Ltd., consolidated plaintiffs Nexteel Co., Ltd. and Hyundai HYSCO, and plaintiff-intervenors ILJIN Steel Corporation, AJU Besteel Co., Ltd., and SeAH Steel Corp. (collectively, “movants”). Movants seek to enjoin the defendant, together with the delegates, officers, agents, and employees of the U.S. Department of Commerce (“Commerce”) and U.S. Customs and Border Protection (“Customs”), from liquidating at rates applicable at the time of entry, certain unliquidated entries covered by Commerce's final determination in Certain Oil Country Tubular Goods from the Republic of Korea: Final Determination of Sales at Less than Fair Value and Negative Final Determination of Critical Circumstances, 79 Fed.Reg. 41,983 (Dep't Commerce July 18, 2014) (“Final Determination ”). Defendant consents to the motions. Defendant-intervenors United States Steel Corporation (“U.S. Steel”) and Maverick Tube Corporation (“Maverick”) oppose the motions. The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012). For the following reasons, the motions are granted.

OVERVIEW

Movants are Korean producers and exporters of oil country tubular goods, that challenge various aspects of Commerce's Final Determination in the antidumping investigation covering oil country tubular goods from Korea. In their motions, they seek to enjoin liquidation of entries of their merchandise covered by the Final Determination during the pendency of this court action in order to ensure that they receive any potential benefits that might result from judicial review of the Final Determination. According to movants, the injunctions are necessary because liquidation of their entries will moot their challenges to the Final Determination, at least as it pertains to the entries that are liquidated. See Zenith Radio Corp. v. United States, 710 F.2d 806, 810 (Fed.Cir.1983) (explaining that once liquidation occurs, a subsequent court decision on the merits can have no effect on the antidumping duties assessed on the liquidated entries, even if the duties ultimately are determined to be erroneous). U.S. Steel and Maverick argue that the injunctions are unwarranted.

DISCUSSION

The court “may enjoin the liquidation of some or all entries of merchandise covered by a determination of ... [Commerce] ..., upon a request by an interested party for such relief and a proper showing that the requested relief should be granted under the circumstances.” 19 U.S.C. § 1516a(c)(2). The purpose and effect of granting such an injunction is to preserve the status quo during the pendency of the judicial proceedings in order to ultimately provide parties any relief the court grants. See 19 U.S.C. § 1516a(e)(2) (providing that “entries, the liquidation of which was enjoined under subsection (c)(2) of this section, shall be liquidated in accordance with the final court decision in the action”); Ugine & Alz Belg. v. United States, 452 F.3d 1289, 1297 (Fed.Cir.2006). In deciding whether to enjoin liquidation, the court considers the following factors: 1) whether the movant will suffer irreparable harm if relief is not granted; 2) the movant's likelihood of success on the merits; 3) the balance of equities between the parties; and 4) whether an injunction is in the public interest. See, e.g., Wind Tower Trade Coalition v. United States, 741 F.3d 89, 95 (Fed.Cir.2014) ; Ugine, 452 F.3d at 1292. The court has traditionally applied a “sliding scale” approach to this determination, whereby no single factor will be treated as necessarily dispositive, and the weakness of the showing on one factor may be overcome by the strength of the showing on the others. See Ugine, 452 F.3d at 1292–93 ; Corus Grp. PLC v. Bush, 26 CIT 937, 942, 217 F.Supp.2d 1347, 1353–54 (2002). The court will discuss each factor in turn.

1. Irreparable Harm

The first factor that the court considers is the potential irreparable harm to the movants should the injunctions be denied. Although the court is to consider the four factors described above, this factor traditionally has been given the greatest importance. See Corus Grp., 26 CIT at 942, 217 F.Supp.2d at 1354 (collecting cases). The original legislative history of 19 U.S.C. § 1516a(c)(2) suggests that the court will consider the factors to ensure that liquidation is enjoined only in “extraordinary circumstances.” S.Rep. No. 96–249, at 248–49, 253 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 634, 639. Such history no longer accurately reflects the current law, judicial precedent, and agency practice.

Because of the unique nature of antidumping and countervailing duty challenges, the court routinely enjoins liquidation to prevent irreparable harm to a party challenging the antidumping or countervailing duty rate. See Wind Tower Trade Coalition, 741 F.3d at 95 (“As observed by the CIT, in antidumping and countervailing duty cases preliminary¹ injunctions against liquidation have become almost automatic due to the retrospective nature of U.S. trade remedies, the length of the judicial review process, and the cruciality of unliquidated entries for judicial review.” (internal quotation marks and brackets omitted)). As explained in Zenith, once entries are liquidated, there is no provision permitting reliquidation if the court later determines that the duty rates assessed on those entries were erroneous. 710 F.2d at 810. A party challenging the duty rate is thus deprived of its right to judicial review if the entries are liquidated. See id. Respondents might be subjected to duties that are unwarranted under the trade laws, and petitioners have “a strong, continuing, commercial-competitive stake in assuring that its competing importers will not escape the monetary sanctions deliberately imposed by Congress.” See id. These concerns led the court in Zenith to conclude “that the consequences of liquidation ... constitute irreparable injury.” Id. Suspension of liquidation thus is necessary to ensure effective judicial review of agency action and to guarantee that the rates are consistent with the outcome of the litigation. See 19 U.S.C. § 1516a(e)(2) (providing that “entries, the liquidation of which was enjoined [by court order], shall be liquidated in accordance with the final court decision in the action”).

U.S. Steel and Maverick do not disagree with the premise that liquidation can constitute irreparable harm. Rather, U.S. Steel and Maverick argue that there is no immediate threat of liquidation, and thus there is no irreparable harm that is imminent to justify an injunction. They note that movants are challenging Commerce's final determination in an antidumping investigation. Under the U.S. trade laws, the duty rates determined in an investigation set the cash deposit rates for the imported merchandise. See OKI Elec. Indus. Co. v. United States, 11 CIT 624, 627, 669 F.Supp. 480, 482 (1987). The final rates are not settled until Commerce completes any requested administrative review of the antidumping order covering those entries. Id. Parties may request a review twelve months after the order is issued, and the review itself lasts about a year. 19 U.S.C. § 1675(a) ; OKI Elec. Indus., 11 CIT at 627, 669 F.Supp. at 483. Upon completion of the review, Commerce issues liquidation instructions to Customs. See 19 U.S.C. § 1675(a). According to U.S. Steel and Maverick, because Commerce will not issue liquidation instructions until at least a year from the date of the Final Determination (i.e., September 2015), movants are not faced with any prospect of irreparable harm at present, and the motions therefore should be denied. The court disagrees.

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