United States Court of Appeals for the Federal Circuit
2007-1094
UNITED STATES TSUBAKI, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Brian F. Walsh, Barnes, Richardson & Colburn, of Chicago, Illinois, argued for
plaintiff-appellant. With him on the brief was Christine H. Martinez.
Barbara S. Williams, Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, United States Department of Justice, of New
York, New York, argued for defendant-appellee. With her on the brief were Peter D.
Keisler, Acting Attorney General and James A. Curley, Attorney. Of counsel on the brief
was Beth C. Brotman, Office of Assistant Chief Counsel, United States Customs and
Border Protection.
Appealed from: United States Court of International Trade
Senior Judge Richard W. Goldberg
United States Court of Appeals for the Federal Circuit
2007-1094
UNITED STATES TSUBAKI, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Appeal from the United States Court of International Trade in case no. 01-00519, Senior
Judge Richard W. Goldberg.
__________________________
DECIDED: January 9, 2008
___________________________
Before BRYSON, Circuit Judge, CLEVENGER, Senior Circuit Judge, and LINN, Circuit
Judge.
BRYSON, Circuit Judge.
Between December 1979 and July 1983, United States Tsubaki, Inc., imported
56 entries of roller chains into this country from Japan. Tsubaki asserted that the
merchandise was entitled to enter duty-free, so it made no cash deposit for the
merchandise at the time of entry. The entries, however, were subject to an antidumping
order. In order to determine whether any antidumping duties were owed for those
entries, the Department of Commerce conducted administrative reviews for two periods:
December 1, 1979, through March 31, 1981, (“the first period”) and April 1, 1981,
through September 1, 1983, (“the second period”). Liquidation of the entries was
suspended pending the final results of those administrative reviews. The results of the
first and second reviews were published in the Federal Register on December 4, 1986,
and May 8, 1987, respectively. Roller Chain, Other than Bicycle from Japan; Final
Results of Antidumping Duty Administrative Review, 51 Fed. Reg. 43,755 (Dec. 4,
1986); Roller Chain, Other than Bicycle from Japan; Final Results of Antidumping Duty
Administrative Review, 52 Fed. Reg. 17,425 (May 8, 1987). The weighted average final
dumping margins were 0.07% for the entries in the first review period and 0.18% to
0.36% for the entries in the second review period. The issuance of the final results had
the effect of lifting the suspension of liquidation; the publication of the final results in the
Federal Register had the effect of giving notice to the Customs Service that suspension
of liquidation had been lifted. See Int’l Trading Co. v. United States, 412 F. 3d 1303,
1307-09 (Fed. Cir. 2005); Int’l Trading Co. v. United States, 281 F.3d 1268, 1277 (Fed.
Cir. 2002).
Although the antidumping determinations became final in 1986 and 1987,
Commerce did not issue liquidation instructions to Customs for the two groups of entries
at that time. In fact, Customs did not liquidate the two groups of entries until October
2000 and February 2001. Tsubaki protested the liquidations at that time, contending
that the entries were all deemed liquidated by operation of law under 19 U.S.C. §
1504(d) at the rate of duty Tsubaki had declared at the time of entry, which was 0%.
After Customs denied the protest, Tsubaki filed this action in the Court of International
Trade.
In a thorough opinion, the Court of International Trade held that 51 of the 56
entries were not deemed liquidated and were therefore subject to assessed duties.
2007-1094 2
U.S. Tsubaki, Inc. v. United States, 461 F. Supp. 2d 1339 (Ct. Int’l Trade 2006). The
government conceded that the remaining five entries were deemed liquidated at the 0%
duty rate. Tsubaki has appealed from the disposition of the 51 contested entries.
I
As a general matter, if an entry is not liquidated within one year from the date of
entry, it is deemed liquidated by operation of law at the rate of duty declared by the
importer at the time of entry. 19 U.S.C. § 1504(a). That rule does not apply, however,
when liquidation has been suspended either by operation of statute or by court order.
Such cases are governed by 19 U.S.C. § 1504(d). The version of section 1504(d) that
was in effect between 1984 and 1993 provided as follows:
Any entry of merchandise not liquidated at the expiration of four years
from the applicable date specified in subsection (a) of this section, shall be
deemed liquidated at the rate of duty, value, quantity, and amount of duty
asserted at the time of entry by the importer of record, unless liquidation
continues to be suspended as required by statute or court order. When
such a suspension of liquidation is removed, the entry shall be liquidated
within 90 days therefrom.
19 U.S.C. § 1504(d) (1988). Under that statute, if liquidation was suspended for four
years after the date of entry and the suspension was then removed, Customs was
directed to liquidate the entry within 90 days thereafter. However, because the statutory
command was interpreted as directory and not mandatory, the upshot was that deemed
liquidation did not occur in any case in which liquidation was suspended for four years
or more. See Am. Permac, Inc. v. United States, 191 F.3d 1380, 1382 (Fed. Cir. 1999);
Canadian Fur Trappers Corp. v. United States, 884 F.2d 563, 566 (Fed. Cir. 1989);
Koyo Corp. of U.S.A. v. United States, 403 F. Supp. 2d 1305, 1308 (Ct. Int’l Trade
2005).
2007-1094 3
In 1993, Congress amended section 1504(d). The amended version extended
the period of time for liquidating entries after the lifting of suspension of liquidation from
90 days to six months, but it made deemed liquidation mandatory in all cases if
liquidation was not effected within that six-month period. 19 U.S.C. § 1504(d) (1994).
The new statute provided as follows, in pertinent part:
[W]hen a suspension required by statute or court order is removed, the
Customs Service shall liquidate the entry . . . within 6 months after
receiving notice of the removal from the Department of Commerce . . . .
Any entry . . . not liquidated by the Customs Service within 6 months after
receiving such notice shall be treated as having been liquidated at the rate
of duty, value, quantity, and amount of duty asserted at the time of entry
by the importer of record.
This case turns on which version of section 1504(d) applies to the entries at
issue. If the pre-1993 version applies, there would be no deemed liquidation, despite
the extraordinary delay between the lifting of the suspension of liquidation in 1986 and
1987 and the ultimate liquidation of the entries in 2000 and 2001. If the 1993 version of
section 1504(d) applies, however, the entries would be deemed liquidated, since the
entries were not liquidated within six months of the lifting of the suspension of
liquidation.
II
In order to determine which version of section 1504(d) applies, we must
determine what event triggers the statute’s application. Tsubaki argues that the trigger
for applying section 1504(d) is the liquidation of the entries in 2000 and 2001. Because
those triggering acts occurred after the enactment of the 1993 version of section
1504(d), Tsubaki argues, the 1993 version of the statute applies. To support that
argument, Tsubaki relies on this court’s decision in Travenol Laboratories, Inc. v. United
2007-1094 4
States, 118 F.3d 749 (Fed. Cir. 1997), which concerned the appropriate trigger for 19
U.S.C. § 1505(c), the statute that governs the payment of interest on liquidated entries.
Travenol held that the triggering act for the statutory obligation to pay interest on the
overpayment of liquidated duties is the act of liquidation or reliquidation.
Travenol, which dealt with the accrual of interest, not the suspension of
liquidation, has no application to the issue presented in this case. In Travenol, we noted
that “Customs does not determine whether there has been an overpayment or
underpayment of estimated duties until it liquidates or reliquidates an entry.” Because
liquidation or reliquidation determines whether the importer has overpaid the applicable
duties, we held that liquidation or reliquidation is the appropriate triggering event for the
statutory liability for interest on those payments. Travenol, 118 F.3d at 753. In this
case, by contrast, the 1993 version of section 1504(d) identifies notice to Customs of
the lifting of the suspension of liquidation as the critical act that imposes the burden of
prompt liquidation on the government. Therefore, notice to Customs of the act of lifting
the suspension of liquidation is the correct trigger for the application of 19 U.S.C.
§ 1504(d). Because that act occurred prior to 1993 with respect to both groups of
entries, the pre-1993 version of section 1504(d) applies unless congressional intent or
the governing principles of retroactivity dictate that the 1993 version of section 1504(d)
should be given retroactive effect.
In addressing this issue, we do not write on a clean slate. As the trial court
noted, this court has already held that the 1993 version of section 1504(d) should not be
applied to cases in which suspension of liquidation was lifted and notice to Customs of
the lifting of suspension occurred prior to the effective date of the 1993 amendment.
2007-1094 5
See Am. Permac, Inc. v. United States, 191 F.3d 1380 (Fed. Cir. 1999). Our analysis in
that case controls here.
In American Permac, the importer made three entries of machines that were
subject to an antidumping administrative review. The entries were suspended from
liquidation pending final resolution of the review. Commerce published the final results
of the review, which the importer challenged in the Court of International Trade. During
that court’s review, liquidation continued to be suspended. In August 1989, the Court of
International Trade affirmed the final results. Suspension of liquidation was removed at
that time, and notice of the lifting of the suspension was given to Customs through
publication in the Federal Register. See Am. Permac, 191 F.3d at 1381; Drycleaning
Machinery from West Germany; Final Results of Antidumping Duty Administrative
Review in Accordance with Decision upon Remand, 54 Fed. Reg. 35,363 (Aug. 25,
1989). In October 1989, Commerce instructed Customs to liquidate the entries and to
assess antidumping duties in accordance with the court’s determination. Liquidation of
the entries did not occur, however, until April 1994.
Applying the 1993 version of section 1504(d), the Court of International Trade
held that the entries in American Permac were deemed liquidated at the duty rate
asserted by the importer at the time of entry. Am. Permac, Inc. v. United States, 984 F.
Supp. 621 (Ct. Int’l Trade 1997). This court, however, reversed, holding that to apply
the 1993 version of section 1504(d) would give that statute “an impermissible retroactive
effect because it attaches new legal consequences to events completed before the
statute was enacted.” Am. Permac, 191 F.3d at 1381. Because the triggering events
for deemed liquidation under section 1504(d) occurred prior to the effective date of the
2007-1094 6
1993 statute, and because the court concluded that “there is no expression of
congressional intent, either in the statutory language or legislative history of section
1504(d), that retroactive effect is contemplated,” the court held that the case was
governed by the pre-1993 version of section 1504(d). Id.
Tsubaki has not pointed to any material difference between this case and
American Permac. In American Permac, the lifting of the suspension of liquidation and
the accompanying notice to Customs of the lifting of suspension occurred after a court
challenge to the final results, whereas in this case, the lifting of the suspension of
liquidation and the accompanying notice to Customs of the lifting of suspension
occurred at the time the final results were announced (as there was no court challenge
to the final results). That distinction, however, makes no difference. In American
Permac, as here, the critical facts—the lifting of the suspension of liquidation and the
notice to Customs of the lifting of suspension—occurred prior to the effective date of the
1993 Act. For that reason, the court in American Permac held that the pre-1993 version
of section 1504(d) governs, and we are bound by that governing precedent to reach the
same result. 1
1
One difference between this case and American Permac is that in this case
the liquidations occurred more than six months after the enactment of the 1993
amendment to section 1504(d), while in American Permac the liquidation occurred less
than six months after the enactment of the statute. Thus, the six-month period specified
in the 1993 statute would not have run at the time the entries in American Permac were
liquidated if that period were deemed to have begun running for pre-existing
“suspended liquidation” entries on the statute’s effective date. Tsubaki does not argue
that that distinction makes a difference, however, and we therefore do not address
whether the 1993 version of the statute could be applied to such entries that remained
unliquidated six months after the enactment of the 1993 statute without giving that
statute an impermissibly retroactive effect.
2007-1094 7
Tsubaki argues that the portion of the decision in American Permac that
addresses the triggering event for section 1504(d) is dictum, that we are not bound by
that decision, and that we should instead follow the decision of the Court of International
Trade in American International Chemical, Inc. v. United States, 387 F. Supp. 2d 1258
(Ct. Int’l Trade 2005). Contrary to Tsubaki’s contention, we do not regard as dictum the
statement of this court in American Permac that the lifting of the suspension of
liquidation is the triggering event for the running of the time period for liquidation under
section 1504(d). Because the publication in the Federal Register that effects the lifting
of the suspension of liquidation also constitutes notice to Customs that suspension of
liquidation has been removed, see Int’l Trading Co., 281 F.3d at 1277, the court’s
reference in American Permac to the lifting of the suspension of liquidation
encompassed both acts. What is important about this court’s decision in American
Permac, and what governs the disposition of this case, is the court’s determination that
because the triggering acts for section 1504(d) occurred prior to the effective date of the
1993 amendment to that statute, the 1993 amendment could not be applied to the
events of that case without giving the 1993 amendment impermissible retroactive effect.
In this case, the triggering events clearly occurred prior to the enactment of the 1993
amendment to section 1504(d). The lifting of the suspension of liquidation and the
concomitant notice to Customs occurred with the publication of the final results of the
administrative reviews in 1986 and 1987. The square holding of American Permac is
that, in a case in which the triggering events for the application of section 1504(d)
occurred before the enactment of the 1993 amendment, the 1993 amendment does not
apply. Following that ruling, as we must, we hold that the 1993 version of section
2007-1094 8
1504(d) does not apply in this case because the lifting of the suspension of liquidation
and the notice to Customs of the lifting of the suspension of liquidation occurred long
before the effective date of the amendment.
Although we are bound by the prior decision of this court in American Permac,
and not by the decision of the Court of International Trade in the American International
Chemical case, we note that American International Chemical is distinguishable from
both American Permac and this case, and it would not provide support for Tsubaki’s
claim even if we were to follow it. In American Permac, as in this case, the lifting of the
suspension of liquidation and the notice to Customs of the lifting of the suspension both
occurred prior to the effective date of the 1993 statute. In American International
Chemical, by contrast, although Commerce was required to publish notice of the final
judgment of the court following a challenge to the administrative review of the subject
entries, which would have given Customs notice of the removal of the suspension of
liquidation, Commerce failed to do so. 387 F. Supp. 2d at 1261. Instead, the court
found that notice to Customs did not occur until years later, after the 1993 version of
section 1504(d) had gone into effect. For that reason, the court concluded that applying
the 1993 statute to the entries in question would not have an impermissible retroactive
effect. Because of that factual difference between the cases, the decision in American
International Chemical would not require a different result in this case even if we
followed that decision.
Tsubaki makes the further argument that the liquidations in 2000 and 2001
occurred in response to a purported June 9, 2000, email message from Commerce to
Customs inquiring about the status of the entries. For that reason, Tsubaki argues, the
2007-1094 9
June 9, 2000, email message should be regarded as the trigger for section 1504(d).
The trial court found it unnecessary to address the circumstances surrounding the
alleged email message. We also find the alleged email message irrelevant to the
proper resolution of the legal issue in this case. Tsubaki contends that even though the
lifting of the suspension of liquidation and the original notice to Customs occurred in
1986 and 1987, the June 9, 2000, email message constituted a second notice to
Customs. For that reason, Tsubaki argues, the statutory obligation to liquidate the
entries should have been triggered by that second notice and should have expired six
months after that date. We disagree. Even assuming that such an email message was
sent in June 2000 and that it constituted a request to Customs to liquidate the entries,
the events that triggered the application of the section 1504(d) obligation to liquidate
had already occurred long before, and the issuance of a new message to Customs
therefore did not constitute the “notice of the removal” of suspension of liquidation
referred to in the statute. We therefore sustain the ruling of the trial court rejecting
Tsubaki’s claim with respect to the 51 contested entries.
AFFIRMED.
2007-1094 10