RESTANI, Judge:
This matter is before the court following denial of Defendant United States' motion to dismiss in Michaels Stores, Inc. v. United States, Slip Op. 12-161, 2012 WL 6720675, 2012 Ct. Int'l Trade LEXIS 161 (Dec. 27, 2012). Plaintiff Michaels Stores, Inc. ("Michaels") challenges the liquidation and cash deposit instructions issued by the Department of Commerce ("Commerce") in administering the antidumping duty ("AD") order for certain cased pencils from the People's Republic of China ("PRC"). See Antidumping Duty Order: Certain Cased Pencils from the People's Republic of China, 59 Fed.Reg. 66,909, 66,909 (Dep't Commerce Dec. 28, 1994) ("Cased Pencils Initial Order"). For the reasons below, the court determines that Commerce lawfully issued liquidation instructions covering the 2008-2009 and 2009-2010 administrative review periods for certain cased pencils that were imported by Michaels.
At issue in this case is the content of liquidation instructions issued following administrative reviews covering two periods of review ("POR"), the 2008-2009 POR and the 2009-2010 POR, both arising out of the 1994 AD order on cased pencils. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Request for Revocation in Part, and Deferral of Initiation of Administrative Review, 75 Fed.Reg. 4770, 4771 (Dep't Commerce Jan. 29, 2010) ("Initiation of Administrative Review 2010"); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 76 Fed.Reg. 5137 (Dep't Commerce Jan. 28, 2011) ("Initiation of Administrative Review 2011"). The parties appear to agree on the facts presented below.
During the 2008-2009 POR, Michaels purchased goods that had been produced by three manufacturers of cased pencils, China First Pencil Co., Ltd. ("China First"), Shanghai Three Star Stationery Industry Co., Ltd. ("Three Star"), and Shandong Rongxin Import and Export Co., Ltd. ("Rongxin"). Mem. of Points & Authorities in Supp. of Pl.'s Mot. for Summ. J. ("Pl.'s Mem.") at 2; Def.'s Resp. to Pl.'s Mot. for Summ. J. ("Def.'s Resp.")
The cash deposit instructions issued by Commerce, to which the liquidation instructions referred, informed U.S. Customs and Border Protection ("Customs") that "if any entries of this merchandise are exported by a firm other than the exporters listed above, then the following instructions apply." Pl.'s Mem. Ex. 6 at 1-2, Ex. 9 at 2, Ex. 11 at 1-2 (emphasis added). Commerce first ordered Customs to use a separate rate "[i]f the PRC or non-PRC exporter of the subject merchandise has its own rate."
During both PORs, Michaels made cash deposits for the entries of cased pencils with Customs pursuant to Michaels' interpretation of the AD order. Pl.'s Mem. at 2, 6. The corresponding cash deposit instructions indicated that the cash deposit rate for exporters not specifically listed and without a separate rate, however, was "the PRC-wide rate of 114.90 percent."
Furthermore, following the 2008-2009 administrative review of Rongxin, Commerce issued a producer's rate for Rongxin of 0.17 percent. Pl.'s Mem. at 4; Def.'s Resp. at 9. Commerce also issued "exporter/importer-specific"
Following liquidation, Michaels was assessed supplemental duties associated with these entries, seeking the difference between the cash deposits Michaels made at the producer's rate and liquidation at the PRC-wide rate. Pl.'s Mem. at 6, 9. After most of Michaels' protests with Customs were unsuccessful, Michaels filed the present action. Although defendant attempted to dismiss the majority of Michaels' claims for lack of jurisdiction, the court denied that motion on December 27, 2012. See
As established in its previous opinion, the court has jurisdiction pursuant to 28 U.S.C. § 1581(i) (2006).
After apparently conceding that the administrative record
A motion for summary judgment, as opposed to judgment on the agency record, is appropriate in this case because Michaels' arguments do not challenge the final results of an administrative review. Michaels merely challenges the liquidation instructions and, only by reference, the cash deposit instructions. The liquidation instructions are not part of an administrative review but rather implement the results of a review. Pl.'s Mem. at 17, 19, 22; see Consol. Bearings Co. v. United States, 348 F.3d 997, 1002 (Fed.Cir.2003) (distinguishing between a challenge to the final results of administrative review and a challenge to liquidation instructions). Consequently, just as in Canadian Wheat Board where the plaintiffs properly challenged a notice of revocation with a motion for summary judgment, here the "true nature" of Michaels' argument is a challenge to the administration and enforcement of Commerce's final determination and not to the determination itself. See 32 CIT at 1127, 580 F.Supp.2d at 1356. Thus, Michaels' motion for summary judgment is properly before the court.
Defendant contends that Michaels is barred from disputing the lawfulness of the cash deposit instructions because: (1) Michaels did not explicitly raise the issue in its complaint, (2) Michaels' challenges to the cash deposit instruction are time barred, and (3) the court lacks subject matter jurisdiction because Michaels failed to exhaust all remedies.
The court simply requires that pleadings contain "a short and plain statement of the claim showing that the pleader is entitled to relief ... which may include... different types of relief." USCIT R. 8(a)(2)-(3); see also USCIT R. 8(f) ("Pleadings must be construed so as to do justice"). Pleadings are sufficient if they adequately notify the defendant of "what the... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Separately, a cause of action under 28 U.S.C. § 1581(i) "is barred unless commenced ... within two years after the cause of action first accrues." 28 U.S.C. § 2636(i).
Defendant fails to demonstrate that all claims referencing the cash deposit instructions
Moreover, this claim is not time-barred because the cause of action accrued once the liquidation instructions were issued and final duties were assessed on Michaels' entries.
Michaels argues that Commerce should have used the producer's rate to determine the cash deposit rate, and ultimately the liquidation rate, applicable to the entries of the subject merchandise, instead of utilizing the PRC-wide rate, which Michaels characterizes as an "all others" rate. See Pl.'s Mem. at 15-17. Defendant argues, in effect, that the PRC-wide rate serves as a noncombination rate assigned to all PRC exporters who have not obtained a separate rate, given the presumption of state control in NMEs,
Commerce's actions in determining the appropriate cash deposit rate for nonproducing exporters where an AD order is in place are governed by 19 C.F.R. § 351.107 (2013). It provides, in relevant part:
Cash Deposit Rates for Nonproducing Exporters; Rates in Antidumping Proceedings Involving a Nonmarket Economy Country, 19 C.F.R. § 351.107(b)(2). Combination and noncombination rates in market economies ("ME") are company-specific rates,
The regulations above define Commerce's practice of determining the appropriate cash deposit rates in the ME context, by providing a sequence of options.
For non-producing exporters, like trading companies, Commerce has said that it "intend[s] to continue calculating AD rates for NME export trading companies, and not the manufacturers supplying the trading companies." Preamble, 62 Fed.Reg. at 27,305 (providing Commerce's first clarification of § 351.107). As a result, under Commerce's present methodology, exporters are required to prove that they are not part of the NME-wide entity to be eligible for a separate rate, which occurs through a formal investigation process. See Transcom, Inc. v. United States, 294 F.3d 1371, 1381 (Fed.Cir.2002) ("Commerce made clear the consequences to an exporter of not rebutting the presumption of state control and establishing its independence: the exporter would be assigned the single rate given to the NME entity").
During the POR, liquidation is suspended for all entries of covered goods until Commerce concludes its review, if any. Then, liquidation instructions are issued by Commerce to Customs to liquidate at either the review rate or at the appropriate cash deposit rate if the company is not reviewed. 19 C.F.R. § 351.212(b),(c)(1)(i). Here, all of the merchandise from the subject exporters was liquidated pursuant to these instructions at the PRC-wide rate. Pl.'s Mem. at 6, 9.
In the present matter, although all of the producers of cased pencils imported by Michaels during the PORs in question
Although Commerce allows exporters to apply for separate rates, no evidence exists, in this instance, that the exporters used by Michaels did so. Therefore, the subject exporters were not eligible for separate rates and were presumed by Commerce to be under state control. See Transcom, 294 F.3d at 1381-82 (affirming the CIT's decision to sustain Commerce's separate rate NME procedure); cf. Certain Oil Country Tubular Goods From the People's Republic of China: Final Determination of Sales at Less Than Fair Value, Affirmative Final Determination of Critical Circumstances and Final Determination of Targeted Dumping, 75 Fed. Reg. 20,335, 20,338, 20,340 (Dep't Commerce Apr. 19, 2010) (utilizing the PRC-wide rate for exporters not individually examined for separate rate status, but providing separate rates to exporters who applied for and established independence and were individually examined). Rather, this failure to apply for separate rate status resulted in the use of the single PRC-wide rate for the exporters in question under Commerce's methodology.
Both sides also raise the additional issue of the change in Commerce's NME policy,
Moreover, defendant's position here is not a post-hoc rationalization, as Michaels puts it, but instead it logically flows from Commerce's previous statements and policies regarding exporters in NMEs. See Pl.'s Reply at 16. Specifically, Commerce legitimately attempts to prevent NME companies from avoiding Commerce's AD orders. The language in § 351.107(d), when read in conjunction with § 351.107(b)(2), upholds two key policy rationales in the NME context: that an exporter's rate is preferable to a producer's rate as the exporter is likely the party to set prices and know which goods are destined for the United States, and that each exporter has the burden of proving it is eligible for a separate rate. See Since Hardware (Guangzhou) Co. v. United States, Slip Op. 10-108, 2010 WL 3982277, at *1, 2010 Ct. Int'l Trade LEXIS 119, at *3-4 (Sep. 27, 2010) (quoting Sigma Corp., 117 F.3d at 1405-06 (explaining that exporters have more information related to issues of state control)); Preamble, 62 Fed.Reg. at 27,303-05. Therefore, even though the producers had separate rates, Commerce's concern remains that these producers will use a state-controlled exporter, allowing the state to dump the goods through that exporter while benefitting from the producer's lower rate.
It is not that the producer's rate will never be used by Commerce in the NME context; the producer, however, may need to export the goods itself or use a separate rate exporter to avoid the PRC-wide rate. Under Michaels' theory, Commerce would be required to list every PRC-controlled exporter, known or unknown, in its investigation and indicate that each exporter's entries will be assessed at a specific rate, the PRC-wide rate. Not only is this burden on Commerce possibly impracticable, but this also could allow PRC firms to establish new, unlisted exporters that have not applied for a separate rate to export their goods during a new POR, avoiding the PRC-wide rate, and possibly avoiding review. See Royal United, 714 F.Supp.2d at 1310 (noting Commerce's practice that every exporter from an NME country that is not particularly referenced in the review is in fact "covered by the results of the review" and is assessed the NME-wide rate).
Thus, Commerce lawfully applied the PRC-wide rate to the subject exporters because the PRC-wide rate constitutes a noncombination rate for exporters that are part of the PRC-wide entity under Commerce's methodology. Consequently, pursuant to 19 C.F.R. § 351.107(b)(2), Commerce lawfully issued instructions ordering liquidation of these entries at the PRC-wide rate and not the producer's rate.
For the foregoing reasons, the court denies Michaels' motion for summary judgment. Although the United States did not move separately for summary judgment and instead requested judgment only at the conclusion of its brief, the court's holding compels the conclusion that the court should enter summary judgment in favor of the United States. Judgment will be entered accordingly.
19 C.F.R. § 351.212(b)(1). Of course, an assessment rate is not a less than fair value rate, i.e. the dumping rate, but a rate based on the value of the entered merchandise, as noted in the regulation. Id.
Assessment of AD Duties, Notice of Policy, 76 Fed.Reg. at 65,694 (emphasis added).