STANCEU, Judge:
This case arose from the actions of two agencies, the U.S. International Trade Commission (the "ITC" or the "Commission") and U.S. Customs and Border Protection ("Customs"), that denied plaintiffs Ethan Allen Global, Inc. and Ethan Allen Operations, Inc. (collectively, "Ethan Allen") certain monetary benefits under the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA" or "Byrd Amendment"), Pub.L. No. 106-387, §§ 1001-03, 114 Stat. 1549, 1549A-72-75 (codified at 19 U.S.C. § 1675c (2000)),
Before the court are three motions brought under USCIT Rule 12(b)(5) to dismiss for failure to state a claim upon which relief can be granted. Defendant-intervenors Kincaid Furniture Co., Inc., L & J.G. Stickley, Inc., Sandberg Furniture Manufacturing Company, Inc., Stanley Furniture Co., Inc., T. Copeland and Sons, Inc., and Vaughan-Bassett Furniture Company, Inc. moved under Rule 12(b)(5) on February 23, 2011. Def.-intervenors' Mot. to Dismiss (Feb. 23, 2011), ECF No. 34 ("Def.-intervenors' Mot."). Defendant ITC so moved on May 2, 2011, and Customs followed with its motion on May 4, 2011. Def. U.S. Int'l Trade Comm'n's Mot. to Dismiss for Failure to State a Claim (May 2, 2011), ECF No. 60 ("ITC's Mot."); Def. U.S. Customs & Border Protection's Mot. for J. on the Pleadings (May 4, 2011), ECF No. 61 ("Customs' Mot.").
During a 2003 ITC investigation to determine whether imports of wooden bedroom furniture from China were causing or threatening to cause material injury to the domestic industry, Ethan Allen responded to a "U.S. producers' questionnaire" from the ITC, indicating thereon that it "took no position on the petition." First Amended Compl. ¶ 23; Initiation of Antidumping Duty Investigation: Wooden Bedroom Furniture from the People's Republic of China, 68 Fed.Reg. 70,228, 70,231 (Dec. 17, 2003). Based on an affirmative ITC injury determination, the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") in early 2005 issued the antidumping duty order on imports of wooden bedroom furniture from China. Antidumping Duty Order, 70 Fed.Reg. at 329; First Amended Compl. ¶ 26. Determining that Ethan Allen had not supported the petition, the ITC declined to designate Ethan Allen an ADP for Fiscal Years 2006 through 2010, both in its lists of ADPs and, subsequently, in response to Ethan Allen's written requests. First Amended Compl. ¶¶ 27-32; Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 71 Fed. Reg. 31,336, 31,375-76 (June 1, 2006); Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 72 Fed.Reg. 29,582, 29,622-23 (May 29, 2007); Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 73 Fed.Reg. 31,196, 31,236-37 (May 30, 2008); Distribution of Continued Dumping & Subsidy Offset to Affected Domestic Producers, 74 Fed.Reg. 25,814, 25,855-56 (May 29, 2009); Distribution of
On September 12, 2008, Ethan Allen commenced this action to challenge ITC's refusal to designate Ethan Allen as an ADP and the refusal of Customs to include Ethan Allen in the CDSOA distributions for Fiscal Years 2006 through 2008 as well as future distributions. Compl. ¶ 1 (Sept. 12, 2008), ECF No. 4. The court then issued a stay of this action pending final resolution of other litigation raising the same or similar issues. Order (Oct. 7, 2008), ECF No. 10 (staying action "until final resolution of Pat Huval Restaurant & Oyster Bar, Inc. v. United States International Trade Commission, Consol. Court No. 06-00290, that is, when all appeals have been exhausted.").
Following the decision of the U.S. Court of Appeals for the Federal Circuit ("Court of Appeals") in SKF USA Inc. v. United States, 556 F.3d 1337 (2009) ("SKF"), cert. denied, ___ U.S. ___, 130 S.Ct. 3273, 176 L.Ed.2d 1182 (2010), which addressed questions also present in this case, the court issued an order directing plaintiffs to show cause why this case should not be dismissed and lifted the stay for the purposes of allowing any brief, response, or reply described in that order. Order (Jan. 3, 2011), ECF No. 17. On February 1, 2011, plaintiffs responded to the court's order and moved for a partial lifting of the stay to allow amendment of the complaint to add factual allegations pertaining to two additional fiscal years, 2009 and 2010. Resp. to Order to Show Cause (Feb. 1, 2011), ECF No. 18 ("Pls.' Resp. to Order"); Pls.' Mot. for Partial Lifting of Stay (Feb. 1, 2011), ECF No. 19 ("Pls.' Mot.").
The court lifted the stay for all purposes on February 9, 2011. Order (Feb. 9, 2011), ECF No. 28. A motion under USCIT Rule 12(b)(5) for failure to state a claim upon which relief can be granted was filed by defendant-intervenors on February 23, 2011, by ITC on May 2, 2011, and by Customs on May 4, 2011. Def.-Intervenors' Mot; ITC's Mot.; Customs' Mot. Briefing on these motions is now complete.
The court exercises jurisdiction over this action according to section 201 of the Customs Courts Act, 28 U.S.C. § 1581(i)(4), which grants jurisdiction over civil actions arising from laws of the United States, such as the CDSOA, providing for administration with respect to duties, such as antidumping duties, on the importation of merchandise for reasons other than the raising of revenue. See Furniture Brands Int'l v. United States, 35 CIT ___, ___, 807 F.Supp.2d 1301, 1307-10 (2011); New Hampshire Ball Bearing, Inc. v. United States, 36 CIT ___, ___, 815 F.Supp.2d 1301, 1304-05, 2012 WL 11272, *1-2 (Jan. 3, 2012); Schaeffler Group USA, Inc. v. United States, 36 CIT ___, ___, 808 F.Supp.2d 1358, 1360 (2012).
We address below the claims stated in Ethan Allen's First Amended Complaint.
The CDSOA amended the Tariff Act of 1930 ("Tariff Act") to provide for the distribution of funds from assessed antidumping and countervailing duties to persons with ADP status, which is limited to petitioners, and interested parties in support of petitions, with respect to which antidumping duty and countervailing duty orders are entered.
In February 2009, approximately five months after plaintiffs filed suit on their original complaint, the Court of Appeals decided SKF, upholding the CDSOA against constitutional challenges brought on First Amendment and Fifth Amendment equal protection grounds. 556 F.3d at 1360. SKF reversed the decision of the Court of International Trade in SKF USA Inc. v. United States, 30 CIT 1433, 451 F.Supp.2d 1355 (2006), which held the petition support requirement of the CDSOA unconstitutional on Fifth Amendment equal protection grounds.
In Counts I and II of the amended complaint, plaintiffs challenge the "in support of the petition" requirement of the CDSOA ("petition support requirement"), both facially and as applied to Ethan Allen, on First Amendment grounds. First Amended Compl. ¶¶ 33-46. In Counts III and IV, plaintiffs challenge the petition support requirement, both facially and as applied to Ethan Allen, on Fifth Amendment equal protection grounds. Id. ¶¶ 47-58. Finally, in Count V, plaintiffs claim that defendants' actions violate the APA. Id. ¶¶ 59-62.
In Count II of the First Amended Complaint, plaintiffs bring various facial challenges to the CDSOA under the First Amendment. Id. ¶¶ 40-46. They ground these facial challenges in the First Amendment guarantees of freedom of speech and the ability to petition for redress of grievances, id. ¶ 41, and claim specifically that the CDSOA engages in impermissible viewpoint discrimination, conditioning a government benefit on the content of political speech, i.e., expression of support for an antidumping petition, id. ¶ 42. They claim, further, that the CDSOA is overbroad and not narrowly tailored to achieve a compelling government objective, id. ¶ 43, imposes a content-based restriction, and creates a designated public forum for political speech, then imposing its content-based restriction on that speech, all in violation of the First Amendment, id. ¶¶ 44-45.
Count IV of the First Amended Complaint bases a facial challenge to the CDSOA on the equal protection guarantee of the Fifth Amendment. Id. ¶¶ 53-58. In brief summary, plaintiffs claim that the CDSOA creates a classification infringing on Ethan Allen's free speech rights that is not narrowly tailored to a compelling government objective, id. ¶ 54, and creates an arbitrary and restrictive classification consisting of domestic producers that supported a petition, thereby discriminating between similarly-situated domestic producers without a rational basis and without serving a legitimate government purpose, id. ¶¶ 55-56.
SKF held broadly that the CDSOA is not unconstitutional under the First Amendment and does not abridge the Fifth Amendment's equal protection guarantee. 556 F.3d at 1360 ("[T]he Byrd Amendment is within the constitutional power of Congress to enact, furthers the government's substantial interest in enforcing the trade laws, and is not overly broad."); id. at 1360 n. 38 ("For the same reason, the Byrd Amendment does not fail the equal protection review applicable to statutes that disadvantage protected
In Count I of the First Amended Complaint, plaintiffs bring various as-applied challenges to the CDSOA under the First Amendment. First Amended Compl. ¶¶ 33-39. They ground their as-applied challenges in the First Amendment guarantees of freedom of speech and the ability to petition for redress of grievances, id. ¶ 34, and claim specifically that the CDSOA discriminates against those, such as Ethan Allen, who did not express support for the antidumping petition, id. ¶ 35. They claim, further, that such an application of the CDSOA is overbroad and not narrowly tailored to achieve a compelling government objective, id. ¶ 36. Plaintiffs claim, further, that the CDSOA as applied to Ethan Allen impermissibly compels speech by requiring manufacturers such as plaintiffs to articulate support for a specific policy, id. ¶ 37, a content-based restriction, and creates a designated public form for political speech, which is subject to a content-based restriction, id. ¶ 38.
Count III of the First Amended Complaint brings an as-applied challenge to the CDSOA that plaintiffs base on the equal protection guarantee of the Fifth Amendment. Id. ¶¶ 47-52. Specifically, plaintiffs claim that the application of the CDSOA to Ethan Allen and others who did not support a petition creates a classification infringing on Ethan Allen's free speech rights that is not narrowly tailored to a compelling government objective. Id. ¶ 48. They claim that the CDSOA creates an arbitrary and restrictive classification consisting of those domestic producers that supported a petition, thereby discriminating between similarly-situated domestic producers without a rational basis and without serving a legitimate government purpose. Id. ¶¶ 49-50.
In opposing dismissal, plaintiffs attempt to distinguish their case from SKF by arguing that "SKF actively opposed the proceeding in its case; Ethan Allen did not." Resp. in Opp'n to Defs.' Mot. to Dismiss 12, 15 (Jun. 6, 2011), ECF No. 65 ("Pls.' June Opp'n"). Plaintiffs, however, fail to plead facts that would bring their as-applied claims outside of the holding in SKF, in which the Court of Appeals held that the CDSOA did not violate constitutional First Amendment or equal protection principles when applied to plaintiff SKF USA, Inc. ("SKF"), which, in its questionnaire response to the ITC, indicated opposition to the petition at issue in that case. In imposing the petition support requirement as a condition for the receipt of CDSOA distributions, the CDSOA did not distinguish between a party who opposed an antidumping or countervailing duty petition and a party who simply declined to take a position in support of such a petition. See 19 U.S.C. § 1675c(b)(1)(A), (d)(1). The Court of Appeals, rejecting SKF's First Amendment and equal protection challenges to the CDSOA, reached a broad holding in SKF that did not turn on any such distinction. SKF, 556 F.3d at 1360. The reasoning supporting that holding is equally broad. The Court of Appeals analogized that "[a]t best, the role of parties opposing (or not supporting) the petition in responding to questionnaires is similar to the role of opposing or neutral parties in litigation who must reluctantly respond to interrogatories or other discovery," and that it was
In support of their as-applied First Amendment challenge to the CDSOA, plaintiffs cite three recent U.S. Supreme Court decisions, Snyder v. Phelps, ___ U.S. ___, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011), Citizens United v. Federal Election Comm'n, ___ U.S. ___, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), and United States v. Stevens, ___ U.S. ___, 130 S.Ct. 1577, 176 L.Ed.2d 435 (2010). They consider these cases to "cast significant doubt on whether the approach adopted by the Federal Circuit in deciding the First Amendment issues presented in SKF can be applied to the Ethan-Allen specific facts at issue in this litigation," arguing that "the specific, different facts alleged by Ethan Allen mandate a reconsideration of the SKF court's analysis and a stricter level of scrutiny than was applied in that case." Pls.' June Opp'n 18-25; Pls.' April Opp'n 13-14. Ethan Allen views these three cases as undermining "the Federal Circuit's analysis under the Central Hudson test," which applied "an intermediate level of scrutiny" that plaintiffs view to be no longer appropriate for the CDSOA as applied to Ethan Allen. Pls.' June Opp'n 19 (citing Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980)). We reject this argument, concluding that each of the three Supreme Court decisions upon which plaintiffs rely neither invalidates the holding of SKF nor otherwise requires us to apply a strict scrutiny analysis in the case before us.
In Snyder v. Phelps, the Supreme Court ruled that members of the Westboro Baptist Church who picketed at public sites near the funeral of a member of the U.S. Marine Corps killed in the line of duty in Iraq could not be held liable, in the particular circumstances of that case, on state-law tort claims alleging intentional infliction of emotional distress, intrusion upon seclusion, and civil conspiracy. 131 S.Ct. at 1213-14, 1220. Concluding that the speech in question, signs displaying various controversial messages condemning the United States and its military, was entitled to "`special protection' under the First Amendment," id. at 1219, the Supreme Court held that the jury verdict holding the Westboro picketers liable on the tort claims must be set aside. The Court emphasized as essential to its holding that the Westboro picketers carried signs displaying messages that, for the most part, constituted speech addressing matters of public concern, id. at 1216-17, and conducted their picketing peacefully, and without interfering with the funeral, at each of three locations the Supreme Court considered to be a public forum, id. at 1218-19.
Citing Snyder v. Phelps, plaintiffs argue that "[c]onsistent with the Supreme Court's recent clear directive, voicing a position on a government antidumping investigation (or, in Ethan Allen's case, deciding not to take a position) constitutes speech on a `matter of public concern,' subject to heightened First Amendment protection." Pls.'s June Opp'n 20. Snyder did not address the question of whether the type of speech involved in this case constituted speech on a matter of public concern. But even were we to accept plaintiffs' premise that the speech involved here was on a matter of public concern, we still would conclude that Snyder v. Phelps resolved a fundamentally different First Amendment question than those presented
Citizens United v. Federal Election Comm'n struck down on First Amendment grounds a federal election law imposing an "outright ban, backed by criminal sanctions" on independent expenditures by a "corporation," including "nonprofit advocacy corporations" or "unions," during the 30-day period preceding a primary election or the 60-day period preceding a general election, for an "electioneering communication" or for advocacy of the election or defeat of a candidate. 130 S.Ct. at 886-87, 897. Stating that "political speech must prevail against laws that would suppress it, whether by design or inadvertence," the Supreme Court concluded that "[l]aws that burden political speech are `subject to strict scrutiny,' which requires the Government to prove that the restriction `furthers a compelling interest and is narrowly tailored to achieve that interest.'" Id. at 898 (citing Federal Election Comm'n v. Wisconsin Right to Life, Inc., 551 U.S. 449, 464, 127 S.Ct. 2652, 168 L.Ed.2d 329 (2007)). Plaintiffs argue that "the ITC's conditioning of a `reward' (i.e., CDSOA distributions) on a particular expression of an opinion effectively suppresses a category of speech entitled to heightened protection under Snyder and Citizens United." Pls.' June Opp'n 21. "This is because non-political corporate speech is entitled to strict scrutiny when the speech is not merely related to a commercial transaction but is an independent assertion of a particular viewpoint on a matter of public importance." Id. at 21-22. According to plaintiffs, "Defendants' actions suppressed Ethan Allen's corporate right to express itself on matters concerning public affairs and its right to petition the government." Id.
The Supreme Court's admonishments in Citizens United that "political speech must prevail against laws that would suppress it, whether by design or inadvertence" and that "[l]aws that burden political speech are `subject to strict scrutiny,'" 130 S.Ct. at 898, should not be applied indiscriminately to any statute raising First Amendment concerns, and we decline to do so here. The statute struck down in Citizens United banned political speech and subjected that speech to criminal sanction, and the Court's decision to apply strict scrutiny can only be viewed properly in that context. The Court of Appeals recognized in SKF that the CDSOA "does not prohibit particular speech," that "statutes prohibiting or penalizing speech are rarely sustained," and that "cases addressing the constitutionality of such statutes are of little assistance in determining the constitutionality of the far more limited provisions of the Byrd Amendment." 556 F.3d at 1350. As the Court of Appeals reasoned, "[i]n considering limited provisions that do not ban speech entirely, the purpose of the statute is important." Id. The Court concluded that "[n]either the background of the statute, nor its articulated purpose, nor the sparse legislative history supports a conclusion that the purpose of the Byrd Amendment was to suppress expression." Id. at 1351. Accordingly, we reject plaintiffs' arguments to the effect that the holdings in Snyder and Citizens United implicitly invalidated the First
In United States v. Stevens, the Supreme Court struck down as "substantially overbroad, and therefore invalid under the First Amendment," a federal statute that criminalized the commercial creation, sale, or possession of depictions of "animal cruelty," which the statute defined as "conduct in which a living animal is intentionally maimed, mutilated, tortured, wounded, or killed, if such conduct is illegal under Federal law or the law of the State in which the creation, sale, or possession takes place." 130 S.Ct. at 1582 n. 1, 1592. The Court rejected the government's argument that the statute, which contained an "exceptions clause" exempting depictions with "serious religious, political, scientific, educational, journalistic, historical, or artistic value," id. at 1583, is "narrowly limited to specific types of `extreme' material," id. at 1587. According to plaintiffs, Stevens "further supports Ethan Allen's position that the ITC's application of the CDSOA to Ethan Allen's particular facts (i.e., a domestic producer that submitted completed questionnaires to the ITC and checked the `take no position' box) is overbroad and thus unconstitutional." Pls.' June Opp'n 22. Plaintiffs submit that the petition support requirement as interpreted by defendants "restricts Ethan Allen's right to freedom of speech without furthering the government's interest" and "extends beyond the stated purpose of excluding those who did not support the petition and discriminates against active supporters like Ethan Allen who adopted a neutral viewpoint in its ITC questionnaires." Id. at 23.
Unlike the statute invalidated by Stevens, the CDSOA does not criminalize or otherwise prohibit a broad category of protected speech. The First Amendment analysis in Stevens, therefore, is not applicable to the First Amendment issues raised by this case. The Court of Appeals upheld the petition support requirement according to the test of Central Hudson, 447 U.S. at 566, 100 S.Ct. 2343, under which regulation of commercial speech must directly advance a substantial governmental interest and not be "more extensive than necessary" to serve that interest. SKF, 556 F.3d at 1355. The Court of Appeals concluded that the CDSOA was not overly broad when judged according to the "not more extensive than necessary" criterion. Id. at 1357-60. We conclude that nothing in the holding in Stevens invalidates the holding of SKF.
In summary, we consider SKF binding on us, and controlling in this case, notwithstanding the Supreme Court's holdings in Snyder, Citizens United, and Stevens. For this reason and the other reasons discussed above, we conclude that plaintiffs' as-applied First Amendment and equal protection claims must be dismissed under USCIT Rule 12(b)(5).
Count V of the First Amended Complaint claims under the APA that defendants' actions were "unlawful, arbitrary, capricious, an abuse of agency discretion, not supported by substantial evidence, and contrary to Ethan Allen's constitutional right to due process." First Amended Compl. ¶ 60. Plaintiffs allege that defendants "have inappropriately treated similarly situated domestic producers differently, without any rational basis for doing so" and "have limited the definition of ADP to include only those domestic producers who supported the Petition by their conduct and expressed support for the petition, while excluding from this definition those domestic producer[s] who likewise supported the Petition by their conduct but did not express support for the petition." Id. ¶ 61. Relying on certain language
Plaintiffs have based their APA claim on an impermissible construction of the CDSOA. The CDSOA limits ADP status to "a petitioner or interested party in support of the petition," 19 U.S.C. § 1675c(b)(1), and further provides, so that Customs may make distributions, that the ITC is to inform Customs of "persons that indicate support of the petition by letter or through questionnaire response," id. § 1675c(d)(1). Plaintiffs do not allege that they indicated their support of the wooden bedroom furniture petition, either by letter or through questionnaire response, and admit that, Ethan Allen, when asked by the ITC petition whether it supported that petition, took no position. First Amended Compl. ¶ 23 ("Although Ethan Allen is a domestic producer of [wooden bedroom furniture], Ethan Allen took no position on the petition but participated fully in the investigation process by returning the completed questionnaire and making revisions thereto, as requested by the ITC."). On the facts as pled in the complaint, we conclude that the ITC did not act unlawfully in denying Ethan Allen status as an ADP. Nor did Customs unlawfully refuse to pay Ethan Allen CDSOA distributions. Contrary to plaintiffs' claim, defendants did not "inappropriately" treat "similarly situated domestic producers differently, without any rational basis for doing so," Id. ¶ 61. The CDSOA charged the ITC with determining the identity of the parties who supported the petition based on the test set forth in 19 U.S.C. § 1675c(b)(1) and (d)(1). With a "rational basis" grounded in the plain meaning of the statute, ITC applied the statutory test in determining that Ethan Allen was not among the parties who qualified as ADPs. Defendants' determinations, therefore, comported with the APA. Plaintiffs allege no facts supporting a conclusion that either agency failed to accord Ethan Allen fundamental fairness in making those determinations, and plaintiffs' claim under the APA that the agencies violated Ethan Allen's constitutional due process rights is, accordingly, meritless.
In support of their APA claim, plaintiffs argue that "the Federal Circuit in SKF enunciated a saving construction with respect to the CDSOA support provision under which benefits are awarded for `actions (litigation support),' not viewpoint expression." Pls.' June Opp'n 24 (citing SKF, 556 F.3d at 1353) (stating that the purpose of the petition support requirement is to "reward injured parties who assisted government enforcement of the antidumping laws by initiating or supporting antidumping proceedings"). Plaintiffs maintain that denial by the ITC of ADP status for Ethan Allen based on Ethan Allen's having expressed no position on the petition in the ITC's questionnaire is "inconsistent with the statutory construction identified by the Federal Circuit in SKF." Id. at 24-25.
Plaintiffs misconstrue the holding in SKF, which the Court of Appeals did not base on a limiting construction of the CDSOA. See SKF, 556 F.3d at 1353. In analyzing the CDSOA under the First Amendment, the Court of Appeals construed the CDSOA such that "the purpose of the Byrd Amendment's limitation of eligible recipients was to reward injured parties who assisted government enforcement of the antidumping laws by initiating or supporting antidumping proceedings." Id. at 1352. When later alluding to a "limiting construction" that "rewards actions (litigation support) rather than the expression of particular views," the Court of Appeals was speaking only hypothetically and in dicta. Id. at 1353 ("Finally, if we were to
Plaintiffs also cite legislative history of the Byrd Amendment to support the proposition that Congress intended to effectuate a broad remedy for injurious foreign dumping and thus did not intend to benefit only those who supported petitions. Pls.' Jun Opp'n 3-6. The legislative history plaintiffs cite, which speaks of injured domestic producers and industries in the aggregate, does not support a construction disregarding the language of the statute itself, 19 U.S.C. § 1675c(b)(1), (d)(1), which determines ADP eligibility on an individual, not an industry, basis and limits eligibility to petitioners and those in support of a petition.
For the reasons discussed in the foregoing, we conclude that plaintiffs' claim arising under the APA must be dismissed.
Plaintiffs' facial and as-applied constitutional claims are precluded by binding precedent, and plaintiffs' APA claim rests on an impermissible construction of the CDSOA. All claims in this action must be dismissed as they are not supported by "sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). Plaintiffs already have availed themselves of the opportunity to amend their complaint. We conclude that it is appropriate to enter judgment dismissing this action.
19 U.S.C. § 1675c(b)(1) (emphasis added).