United States Court of Appeals
for the Federal Circuit
__________________________
SIOUX HONEY ASSOCIATION, ADEE HONEY
FARMS,
MONTEREY MUSHROOMS, INC., THE GARLIC
COMPANY,
AND RICELAND CRAWFISH, INC. (ALSO KNOW AS
BEAUCOUP CRAWFISH OF EUNICE, INC.),
Plaintiffs-Appellants,
v.
HARTFORD FIRE INSURANCE COMPANY,
HARTFORD ACCIDENT AND
INDEMNITY COMPANY, HARTFORD CASUALTY
INSURANCE COMPANY,
HARTFORD INSURANCE COMPANY OF ILLINOIS,
HARTFORD INSURANCE COMPANY OF THE
MIDWEST,
AND HARTFORD INSURANCE COMPANY OF THE
SOUTHEAST,
Defendants-Appellees,
and
AEGIS SECURITY INSURANCE COMPANY
AND LINCOLN GENERAL INSURANCE COMPANY,
Defendants-Appellees,
and
AMERICAN CONTRACTORS INDEMNITY
COMPANY,
AMERICAN HOME ASSURANCE COMPANY,
SIOUX HONEY v. HARTFORD FIRE 2
AND XL SPECIALTY INSURANCE COMPANY,
Defendants-Appellees,
and
GREAT AMERICAN ALLIANCE INSURANCE
COMPANY,
GREAT AMERICAN INSURANCE COMPANY,
AND GREAT AMERICAN INSURANCE COMPANY
OF NEW YORK,
Defendants-Appellees,
and
INTERNATIONAL FIDELITY INSURANCE
COMPANY,
Defendant-Appellee,
and
WASHINGTON INTERNATIONAL INSURANCE
COMPANY,
Defendant-Appellee,
and
UNITED STATES, UNITED STATES CUSTOMS
AND BORDER PROTECTION,
JAYSON P. AHERN, ACTING CUSTOMS COMMISSIONER,
DEPARTMENT OF COMMERCE, AND GARY
LOCKE, SECRETARY OF COMMERCE,
Defendants-Appellees.
__________________________
2011-1040
__________________________
Appeal from the United States Court of International
Trade in case no. 09-CV-0141, Judge Timothy C. Stanceu.
3 SIOUX HONEY v. HARTFORD FIRE
__________________________
Decided: February 7, 2012
__________________________
PAUL C. ROSENTHAL, Kelley Drye & Warren LLP, of
Washington, DC, argued for plaintiffs-appellants. With
him on the brief were MICHAEL J. COURSEY and JOHN M.
HERRMANN. Of counsel on the brief were WILL E.
LEONARD JR. and JOHN C. STEINBERGER, Adduci, Mas-
triani & Schaumberg, L.L.P., of Washington, DC.
JONATHAN F. COHN, Sidley Austin, LLP, of Washing-
ton, DC, argued for defendants-appellees The Hartford
Fire Insurance Company et al. With him on the brief
were PETER D. KEISLER, NEIL R. ELLIS, LAWRENCE R.
WALDERS, QUIN M. SORENSON and RYAN C. MORRIS. Of
counsel was ARTHUR K. PURCELL, Sandler, Travis &
Rosenberg, P.A., of New York, New York.
MARY KAY VYSKOCIL, Simpson Thacher & Bartlett,
LLP, of New York, New York, argued for remaining
defendants-appellees with the exception of the United
States, et al. With her on the brief for Washington Inter-
national Insurance Company were BARRY R. OSTRAGER
and MICHAEL J. GARVEY. Of counsel on the brief was
GILBERT LEE SANDLER, Sandler, Travis & Rosenberg, P.A.,
of Miami, Florida. On the brief for defendants-appellees
American Contractors Indemnity Company, et al, were
MARK F. HORNING and HERBERT C. SHELLEY, Steptoe &
Johnson, LLP, of Washington, DC. Of counsel was LAURA
ROSE ARDITO. Of counsel on the brief for defendants-
appellees American Alliance Insurance Company, et al
were MARK D. PLEVIN, THEODORE R. POSNER and
SIOUX HONEY v. HARTFORD FIRE 4
ALEXANDER H. SCHAEFER, Crowell & Moring, LLP, of
Washington, DC. On the brief for defendants-appellees
International Fidelity Insurance Company, et al, were
ARMEN SHAHINIAN and ADAM P. FRIEDMAN, Wolff & Sam-
son, PC, of West Orange, New Jersey. On the brief for
defendants-appellees Aegis Security Insurance Company,
et al, was T. RANDOLPH FERGUSON, Sandler, Travis &
Rosenberg, P.A., of San Francisco, California.
L. MISHA PREHEIM, Trial Attorney, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendants-
appellees United States, et al. With him on the brief were
TONY WEST, Assistant Attorney General, JEANNE E.
DAVIDSON, Director, and FRANKLIN E. WHITE, JR., Assis-
tant Director. Of counsel on the brief were JONATHAN M.
ZIELINSKI, Attorney, Office of the Chief Counsel for Im-
port Administration, United States Department of Com-
merce, of Washington, DC; ALBERT T. KUNDRAT and
ANDREW G. JONES, Attorneys, Office of Assistant Chief
Counsel, United States Customs and Border Protection, of
Indianapolis, Indiana.
__________________________
Before RADER, Chief Judge, LOURIE and PROST, Circuit
Judges.
PROST, Circuit Judge.
Under federal trade law imported products are often
assessed antidumping duties in an effort to prevent these
products from undercutting the domestic market. The
Continued Dumping and Subsidy Offset Act of 2000
(“CDSOA”), which has since been repealed, directed the
government to distribute collected duties to domestic
producers harmed by dumping. 19 U.S.C. § 1675c(a)
(2000). In this case, Plaintiffs are domestic producers
5 SIOUX HONEY v. HARTFORD FIRE
seeking distributions under the CDSOA. Plaintiffs also
attempt to compel the assessment and collection of addi-
tional antidumping duties. The United States Court of
International Trade dismissed all of Plaintiffs’ claims at
the motion to dismiss stage. See Sioux Honey Ass’n v.
Hartford Fire Ins. Co., 700 F. Supp. 2d 1330 (Ct. Int’l
Trade 2010); Sioux Honey Ass’n v. United States, 722 F.
Supp. 2d 1342 (Ct. Int’l Trade 2010). We affirm-in-part
and vacate-in-part. Additionally, we affirm the Court of
International Trade’s decision to deny Plaintiffs’ motion
for jurisdictional discovery.
I. BACKGROUND
A. Antidumping Statutory Scheme
Dumping occurs when a foreign company sells a prod-
uct in the United States at a lower price than what it sells
that same product for in its home market. Such a product
can be described as being sold below “fair value.” Dump-
ing presents unfair competition concerns because foreign
companies selling goods below fair value can undercut
domestic producers selling those same goods at market
prices. Congress attempted to offset the harmful effects
of dumping by enacting the Tariff Act of 1930. This
statute, in combination with other statutes and regula-
tions, provides a complex framework for determining the
extent to which an imported product is being dumped,
and for calculating a duty rate that offsets the dumping.
Under the antidumping statutes, a domestic producer
suspecting a foreign company of dumping can petition the
Department of Commerce (“Commerce”) for an investiga-
tion of that foreign company’s merchandise. Additionally,
Commerce itself may initiate such an investigation. In an
investigation, Commerce analyzes the prices of the im-
SIOUX HONEY v. HARTFORD FIRE 6
ported goods and determines whether dumping occurred.
19 U.S.C. §§ 1671, 1673. The International Trade Com-
mission (“ITC”) conducts a parallel investigation to de-
termine whether an industry in the United States suffers
injury from the imports at issue. Id. If the final determi-
nations of Commerce and the ITC are affirmative (i.e., if
they conclude that dumping and injury occurred), Com-
merce issues an antidumping order (“AD order”), which
publishes duty rates for the investigated products. Id.
§§ 1671e, 1673e. The duty rates calculated by Commerce
throughout the antidumping investigation are called
“deposit rates.”
The AD order also instructs United States Customs
and Border Protection (“Customs”) to collect cash deposits
for merchandise subject to the order when that merchan-
dise enters the country. The values of these deposits are
based on the duty rates published in the order. Techni-
cally speaking, the duty rates published in the AD order
are not the final, assessed rates. Rather, as explained
below, rates are finalized later in the process. Therefore,
the cash deposits collected upon entry are considered
estimates of the duties that the importer will ultimately
have to pay as opposed to payments of the actual duties.
Each year after an AD order issues, an interested
party can request that Commerce conduct an administra-
tive review of the order. In this review, Commerce ana-
lyzes the actual merchandise imported throughout the
previous year that is subject to the order. (In some ad-
ministrative reviews, Commerce analyzes the merchan-
dise imported over the previous year and a half.) This
system, often described as a retroactive system, enables
Commerce to calculate a final duty rate based on the
actual imports themselves as opposed to information
obtained before importation even began. The final anti-
7 SIOUX HONEY v. HARTFORD FIRE
dumping duty rate obtained through the administrative
review is called the liquidation rate. Commerce commu-
nicates this liquidation rate to Customs through “liquida-
tion instructions,” and Customs then instructs its staff at
each port to assess final duties on all relevant entries. If
the deposit rate (i.e., the estimated rate calculated during
the antidumping investigation) is higher than the final
liquidation rate, then the importer overpaid and is enti-
tled to a refund. If the deposit rate equals the liquidation
rate, then the importer’s previous deposit satisfies its
duty obligation. Notably, if no administrative review is
requested, the deposit rate is generally used to assess the
final duty.
Additionally, the antidumping statutes permit accel-
erated review for companies that ship the same type of
product covered by a previously-issued antidumping duty
order, but where that shipping occurs outside of the
timeframe encompassed by order’s period of review. Such
companies are often called “new shippers,” and this
accelerated review program is called a “new shipper
review.” If a new shipper does not participate in a new
shipper review, its merchandise will likely be subject to a
predetermined deposit rate that applies generally to
companies whose products were never individually inves-
tigated. These predetermined rates are often higher than
the individual rates obtained through an investigation.
Like importers participating in an initial antidumping
investigation, new shippers participating in a new shipper
review must post a deposit intended to reflect the value of
the antidumping duties that will ultimately be owed. 19
U.S.C. § 1675(a)(2)(B)(iii). For over eleven years (January
1, 1995 through April 1, 2006), new shippers were allowed
to satisfy this deposit requirement by having a surety
post a Customs bond in lieu of cash (also referred to as a
SIOUX HONEY v. HARTFORD FIRE 8
“new shipper bond”). Id. This bond posting process was
(and still is) governed by contracts involving new ship-
pers, sureties, and the government. These bond contracts
are intertwined with the federal antidumping regime, as
they incorporate numerous antidumping statutes and
regulations by reference. In August 2006, however,
Congress suspended the bonding option, thereby making
cash deposits mandatory.
Finally, as mentioned, the antidumping statutes re-
quire Customs to distribute collected duties to domestic
companies harmed by dumping. Specifically, in October
2000, Congress passed the Continued Dumping and
Subsidy Offset Act, which provides that Customs “shall”
distribute antidumping duties collected on imports to the
“affected domestic producers.” 19 U.S.C. § 1675c(a).
While Congress repealed the CDSOA in 2005, it allowed
for the continued distribution of duties assessed and
collected before October 1, 2007. See Continued Dumping
and Subsidy Offset Act of 2000, Pub.L. No. 106–387,
§ 1001–1003, 114 Stat. 1549, 1549A–72–75 (codified at 19
U.S.C. § 1675c (2000)), repealed by Deficit Reduction Act
of 2005, Pub.L. 109–171, § 7601(a), 120 Stat. 4, 154 (Feb.
8, 2006; effective Oct. 1, 2007).
B. Plaintiffs’ Allegations and the Court of
International Trade Decision
Plaintiffs are domestic producers seeking distribu-
tions of antidumping duties under the CDSOA. They filed
suit in 2009 against Customs and Commerce (collectively
“Government”), as well as various sureties (“Surety
Defendants”). As Plaintiffs allege in their Complaint,
Customs has failed to collect millions of dollars of as-
sessed antidumping duties in recent years. Plaintiffs
assert that a large portion of these uncollected funds can
9 SIOUX HONEY v. HARTFORD FIRE
be traced back to Customs bonds posted in conjunction
with new shipper reviews. Specifically, Plaintiffs contend
that “all or virtually all” of the Customs bonds issued
between January 1, 1995 and August 18, 2006 stem from
a mere twenty AD orders—all involving Chinese imports
(“the twenty Chinese Orders”). Compl. ¶¶ 3-4. Moreover,
Plaintiffs allege that “the vast majority” of the Customs
bonds issued within this timeframe relate back to AD
orders on the following four products: fresh garlic, certain
preserved mushrooms, freshwater crawfish tail meat, and
pure honey (“the Four Orders”). Id. at ¶ 4. As Plaintiffs
summarize, of the 174 new shipper reviews conducted
between January 1, 1995 and August 18, 2006 under the
twenty Chinese Orders, 107 were conducted under the
Four Orders. Id.
Citing information from Customs’ website, Plaintiffs
represent in their Complaint that Customs has failed to
collect $723 million of the $771 million in final AD duties
assessed under the Four Orders over the past six years.
Id. at ¶ 7. Plaintiffs then allege that most of these uncol-
lected duties are owed by sureties who posted Customs
bonds on behalf of new shippers. Id. Notably, Plaintiffs
explain that substantially all imports from the twenty-
seven importers participating in new shipper reviews
under the Four Orders ceased after Congress suspended
the new shipper bonding option.
This lawsuit involves numerous claims that, for the
most part, fall into two categories. Regarding the first
category of claims (i.e., Counts 1-7), Plaintiffs seek to
enforce new shipper bond contracts as third-party benefi-
ciaries. In asserting these claims, Plaintiffs sued the
Government as well as various sureties that allegedly
insured new shipper bonds. Regarding the second cate-
gory of claims (i.e., Counts 8-15), Plaintiffs contend that
SIOUX HONEY v. HARTFORD FIRE 10
Customs and Commerce failed to satisfy a number of
statutory and regulatory obligations, which prevented the
collection and distribution of antidumping duties.
The Court of International Trade dismissed all fifteen
of Plaintiffs’ claims at the motion to dismiss stage. Spe-
cifically, the Court of International Trade dismissed
Counts 2, 3, 4, and 6 for lack of standing and Counts 1
and 5 for failure to state a claim upon which relief can be
granted. See Sioux Honey, 700 F. Supp. 2d at 1330. For
the most part, these dismissals resulted from the Court of
International Trade’s conclusion that Plaintiffs failed to
qualify as intended third-party beneficiaries of the bond
contracts. The Court of International Trade also dis-
missed Counts 7, 8, 9, 13, and 14 for lack of subject mat-
ter jurisdiction and Counts 10, 11, 12, and 15 for failure to
state a claim upon which relief can be granted. See Sioux
Honey, 722 F. Supp. 2d at 1342. These claims were
dismissed on standing, ripeness, or Twombly grounds.
See Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).
Finally, the Court of International Trade denied Plain-
tiffs’ motion for jurisdictional discovery. See Sioux Honey,
722 F. Supp. 2d at 1366-72.
Plaintiffs appealed from the Court of International
Trade’s judgment. We generally have jurisdiction to hear
appeals from the Court of International Trade under 28
U.S.C. § 1295(a)(5). As explained below, however, we lack
jurisdiction over some of the claims at issue.
II. DISCUSSION
A. Standard of Review and Claims at Issue on Appeal
We apply a de novo standard of review to both a trial
court’s dismissal for lack of jurisdiction and a trial court’s
11 SIOUX HONEY v. HARTFORD FIRE
dismissal for failure to state a claim for which relief can
be granted. Boyle v. United States, 200 F.3d 1369, 1372
(Fed. Cir. 2000); see also Canadian Lumber Trade Alli-
ance v. United States, 517 F.3d 1319, 1330-31 (Fed. Cir.
2008). We review a trial court’s denial of a request for
discovery for abuse of discretion. Forest Prods. NW, Inc.
v. United States, 453 F.3d 1355, 1359 (Fed. Cir. 2006).
On appeal, Plaintiffs challenge the Court of Interna-
tional Trade’s dismissal of four of the Complaint’s six
claims asserted against the Surety Defendants. These
claims allege the following:
Count 1: Plaintiffs are intended third-party benefi-
ciaries of the bond contracts involving the
importers, sureties, and Government;
Count 2: The new shipper bonds were not voided
by the CDSOA;
Count 3: Surety Defendants breached their new
shipper bond contracts involving the im-
porters and Government;
Count 6: Surety Defendants unlawfully compro-
mised, modified, or discharged new ship-
per bonds owed under the bond contracts.
Plaintiffs also appeal from the Court of International
Trade’s dismissal of eleven of the Complaint’s claims
asserted against the Government, alleging the following:
Count 1: Plaintiffs are intended third-party benefi-
ciaries of the bond contracts involving the
importers, sureties, and Government;
SIOUX HONEY v. HARTFORD FIRE 12
Count 2: The new shipper bonds were not voided
by the CDSOA; 1
Count 6: The Government unlawfully compro-
mised, modified, or discharged new ship-
per bonds owed under the bond contracts;
Count 8: Commerce failed to issue liquidation in-
structions to Customs, which resulted in
uncollected antidumping duties;
Count 9: Customs failed to assess final antidump-
ing duties (i.e., it failed to execute the in-
structions it received from Commerce);
Count 10: Customs failed to distribute collected du-
ties to the domestic producers in accor-
dance with the CDSOA;
Count 11: Customs failed to issue letters to sureties
demanding payment when importers
missed duty payments;
Count 12: Customs unlawfully compromised (i.e.,
settled) antidumping duties secured by
new shipper bonds;
Count 13: Customs unlawfully wrote off duties as
uncollectable;
1 There is confusion in the briefing regarding
whether Plaintiffs appeal the Court of International
Trade’s dismissal of Counts 1 and 2 as asserted against
the Government. We will treat these claims as being
appealed.
13 SIOUX HONEY v. HARTFORD FIRE
Count 14: Customs unlawfully cancelled new ship-
per bonds; and
Count 15: Customs failed to provide the Depart-
ment of Justice with notice letters when
sureties did not meet payment obliga-
tions. 2
For the reasons detailed below, Counts 1, 2, 3, and 6
as asserted against the Surety Defendants must be dis-
missed. We reach this conclusion, however, on grounds
other than those relied on by the Court of International
Trade. Specifically, while the Court of International
Trade dismissed these claims on third-party beneficiary
grounds, we do so for lack of jurisdiction.
As for the claims against the Government, dismissal
is appropriate for:
Counts 1, 2, and 6 because Plaintiffs fail to qualify as
intended third-party beneficiaries of the
bond contracts;
Counts 11 and 13 because these claims challenge dis-
cretionary agency actions that are unre-
viewable in federal court under Heckler v.
Chaney, 470 U.S. 821 (1985);
Counts 8-10, 12, and 15 because these claims fail to
state a claim upon which relief can be
granted under Twombly, 550 U.S. at 544;
and
2 Plaintiffs did not appeal the Court of Interna-
tional Trade’s dismissal of Counts 4, 5, and 7. 19 U.S.C.
§ 1671.
SIOUX HONEY v. HARTFORD FIRE 14
Count 14 because Plaintiffs conceded that this claim
was filed in error.
We turn first to the Claims against the Surety Defen-
dants, followed by the Claims against the Government.
B. Claims Against the Surety Defendants
The Court of International Trade’s jurisdiction lies
primarily over claims asserted by or against the federal
government. In the present case, however, the Court of
International Trade exercised supplemental jurisdiction
over claims asserted by private parties against other
private parties (i.e., the claims asserted by Plaintiffs
against the Surety Defendants), reasoning that 28 U.S.C.
§ 1585 permitted it to exercise this jurisdiction under 28
U.S.C. § 1367, the district court supplemental jurisdiction
statute. See Sioux Honey, 700 F. Supp. 2d at 1345. As
explained below, however, this conclusion is erroneous.
We find that the Court of International Trade lacks
jurisdiction to hear the claims at issue in this appeal
asserted against the Surety Defendants (Counts 1, 2, 3,
and 6).
1. Statutory Supplemental Jurisdiction
“[T]wo things are necessary to create jurisdiction . . . .
The Constitution must have given to the court the capac-
ity to take it, and an act of Congress must have supplied
it.” Mayor v. Cooper, 73 U.S. 247, 252 (1867). “Courts
created by statute can have no jurisdiction but such as
the statute confers.” Christianson v. Colt Indus. Operat-
ing Corp., 486 U.S. 800, 818 (1988). The Court of Interna-
tional Trade is a court created by statute. See Customs
Courts Act of 1980, Pub. L. No. 96-417, 94 Stat. 1727 (Oct.
10, 1980). It “operates within precise and narrow juris-
15 SIOUX HONEY v. HARTFORD FIRE
dictional limits” and “cannot exercise jurisdiction over
actions not addressed by a specific jurisdictional grant.”
Trayco, Inc. v. United States, 994 F.2d 832, 836 (Fed. Cir.
1993).
The “jurisdictional limits” of the Court of Interna-
tional Trade are explicitly set forth in the Customs Courts
Act. See 28 U.S.C. §§ 1581-1584. In particular, §§ 1581,
1582, and 1584 grant the Court of International Trade
jurisdiction over specific types of claims mostly involving
trade law that are asserted by or against the United
States. It is undisputed that the claims against the
Surety Defendants do not fall under any of these jurisdic-
tional provisions.
The remaining jurisdictional provision in the Customs
Courts Act, 28 U.S.C. § 1583, confers a form of supple-
mental jurisdiction on the Court of International Trade,
namely jurisdiction over any “counterclaim, cross-claim,
or third-party action” where the claim involves “imported
merchandise that is the subject matter of [the original
claims]” or a “recover[y] upon a bond or customs duties
relating to such merchandise.” The Court of International
Trade concluded that § 1583 cannot provide jurisdiction
over the claims against the Surety Defendants because
Plaintiffs did “not bring[] a cross-claim or counterclaim,
nor are they asserting a ‘third party action,’ which is in
the nature of impleader.” See Sioux Honey, 700 F. Supp.
2d at 1339 n.4. Plaintiffs do not dispute this conclusion
on appeal. We agree that § 1583 does not vest the Court
of International Trade with jurisdiction over the Surety
Defendant claims. In sum, the Court of International
Trade correctly concluded that “plaintiffs’ claims against
the Surety Defendants do not fall within any grant of
original jurisdiction to the Court of International Trade.”
SIOUX HONEY v. HARTFORD FIRE 16
Id. at 1339. Indeed, Plaintiffs do not argue to the con-
trary. See id.
As noted above, however, the Court of International
Trade concluded that another provision in the Customs
Courts Act, 28 U.S.C. § 1585, provided it with the author-
ity to exercise supplemental jurisdiction under 28 U.S.C.
§ 1367 over the Surety Defendant claims. See Sioux
Honey, 700 F. Supp. 2d at 1345. In particular, the Court
of International Trade explained that § 1367’s grant of
supplemental jurisdiction to district courts was among
“the powers in law and equity” conferred to the Court of
International Trade under 28 U.S.C. § 1585. Id. at 1343,
1345 (concluding that “§ 1585 and § 1367, when construed
together and according to their respective purposes as
revealed in the legislative history, confer upon the Court
of International Trade the statutory form of supplemental
jurisdiction” found in § 1367). Put simply, the Court of
International Trade construed the “power” term in § 1585
to include the concept of supplemental jurisdiction. This
conclusion, however, is flawed.
As an initial matter, “power” and “jurisdiction” are
separate and distinct concepts, a characterization that
weighs against construing power to subsume jurisdiction.
For example, we have stated that a “distinction exists
between a court’s subject matter jurisdiction and its
inherent powers, i.e., those incidental powers necessary
and proper to an exercise of that jurisdiction.” Rhone
Poulenc, Inc. v. United States, 880 F.2d 401, 402 (Fed. Cir.
1989). “Subject matter jurisdiction” refers to the class of
cases that the court is authorized to hear. Id. at 402-03.
“Power” refers to the court’s ability, when it has subject
matter jurisdiction, to grant equitable and legal relief to a
party. Id. Even the Court of International Trade has
previously stated that § 1585 “relates only to the powers
17 SIOUX HONEY v. HARTFORD FIRE
of the Court to render an effective judgment once jurisdic-
tion is established.” Star Sales & Distrib. Corp. v. United
States, 663 F. Supp. 1127, 1130 (Ct. Int’l Trade 1986).
Thus, a court’s power to grant relief is not synonymous
with its ability to exercise jurisdiction, as these two
concepts are separate and distinct. Power does not neces-
sarily envelop the concept of jurisdiction.
Further, that § 1585 does not contain a “jurisdiction”
term is telling, especially because the Customs Courts Act
does refer to “jurisdiction” numerous times in neighboring
provisions (i.e., §§ 1581-1584). “[W]here Congress in-
cludes particular language in one section of a statute but
omits it in another section of the Act, it is generally
presumed that Congress acts intentionally and purposely
in the disparate inclusion or exclusion.” Russello v.
United States, 464 U.S. 16, 23 (1983) (internal quotation
marks omitted). Congress’s use of the term “jurisdiction”
in §§ 1581-1584 but not in § 1585 suggests that it did not
intend for the “powers” term in § 1585 to incorporate the
concept of supplemental jurisdiction.
Moreover, reading § 1585 to provide a grant of sup-
plemental jurisdiction would render another provision in
the Customs Courts Act superfluous. As mentioned, 28
U.S.C. § 1583 confers a form of supplemental jurisdiction
on the Court of International Trade, namely jurisdiction
over counterclaims, cross-claims, or third-party actions
involving specific subject matter. Allowing § 1585 to
incorporate supplemental jurisdiction would provide the
Court of International Trade with all the authorities
granted in § 1583, thereby rendering § 1583 meaningless.
Indeed, “one of the most basic interpretive canons” is
“that ‘[a] statute should be construed so that effect is
given to all its provisions, so that no part will be inopera-
tive or superfluous, void or insignificant.’” Corley v.
SIOUX HONEY v. HARTFORD FIRE 18
United States, 129 S. Ct. 1558, 1566 (2009) (quoting Hibbs
v. Winn, 542 U.S. 88, 101 (2004)); see also Princess
Cruises, Inc. v. United States, 201 F.3d 1352, 1362 (Fed.
Cir. 2000) (“It is a long-held tenet of statutory interpreta-
tion that one section of a law should not be interpreted so
as to render another section meaningless.”). The fact that
the Court of International Trade’s construction of the
“powers” term in § 1585 would render § 1583 meaningless
provides another justification for rejecting this construc-
tion. For the above reasons, we conclude that the “pow-
ers” term of 28 U.S.C. § 1585 cannot be construed to
provide the Court of International Trade with authority to
exercise 28 U.S.C. § 1367 supplemental jurisdiction over
Plaintiffs’ claims against the Surety Defendants.
Notably, the Court of International Trade relied heav-
ily on legislative history in concluding that § 1585 and
§ 1367 combine to provide it with supplemental jurisdic-
tional authority over the Surety Defendant claims. For
example, the Court of International Trade emphasized
the following language from the Customs Courts Act’s
House Report:
Proposed Section 1585 provides that the Court of
International Trade shall possess all the powers
in law and equity of, or conferred by statute upon,
a district court. In the past, there has been some
doubt as to whether or not the Customs Court
possessed this full judicial authority. It is the
Committee’s intent to make clear that the Cus-
toms Court’s successor, the United States Court of
International Trade, does possess the same ple-
nary powers as a federal court [sic] district court.
Sioux Honey, 700 F. Supp. 2d at 1341 (quoting H.R. Rep.
No. 96-1235, at 50 (1980), reprinted in 1980 U.S.C.C.A.N.
19 SIOUX HONEY v. HARTFORD FIRE
3729, 3762). The Court of International Trade viewed the
use of the terms “full judicial authority” and “plenary
powers” as “strongly counsel[ing] against a narrow read-
ing of § 1585 under which the provision is confined in
scope to remedial powers in law and equity.” Id. at 1342.
We disagree with the Court of International Trade’s
analysis of the Customs Courts Act’s House Report and
believe that the Report just as readily supports a conclu-
sion that the Court of International Trade lacks authority
to exercise supplemental jurisdiction over the Surety
Defendant claims. As evident in the Report, a main
purpose of the Customs Courts Act was to eliminate the
“inconsistent judicial decisions” and “jurisdictional con-
flicts” resulting from district courts hearing some trade
cases, and the Customs Court (the predecessor court to
the Court of International Trade) hearing others. H.R.
Rep. No. 96-1235, at 19-20, reprinted in 1980
U.S.C.C.A.N. at 3731. These inconsistencies and conflicts
arose in part because the district courts had significantly
greater remedial powers than the Customs Court. In-
deed, “the Customs Court’s remedial powers [were] gen-
erally limited to agreeing or disagreeing with the final
determination of an administrative agency.” Id. at 21,
reprinted in 1980 U.S.C.C.A.N. at 3733.
To solve this problem, the jurisdictional provisions
mentioned earlier (§§ 1581-1584 of Title 28) were drawn
to “defin[e] the demarcation between the jurisdiction of
the Court of International Trade and the federal district
courts.” H.R. Rep. No. 96-1235, at 30, reprinted in 1980
U.S.C.C.A.N. at 3741. Then, through § 1585, Congress
conferred upon the Court of International Trade powers to
grant relief in the cases before it that far exceeded the
Customs Court’s prior authority. Thus, the Report illus-
trates how “power” and “jurisdiction” were incorporated
SIOUX HONEY v. HARTFORD FIRE 20
separately into the Customs Courts Act, with the power
concept being embedded in § 1585 and the jurisdiction
concept being embodied in §§ 1581-1584. For these rea-
sons, we believe the House Report, if anything, supports
the conclusion that the “powers” term in § 1585 does not
subsume the concept of supplemental jurisdiction. Thus,
we disagree with the Court of International Trade’s
conclusion to the contrary.
Additionally, no grant of supplemental jurisdictional
authority to the Court of International Trade can be found
in 28 U.S.C. § 1367 itself. Indeed, this provision only
confers jurisdiction on the “district courts.” Congress
expressly defined “district court” to mean “the courts
constituted by chapter 5” of Title 28. See 28 U.S.C. § 451;
Id. §§ 81-144 (establishing trial courts in fifty states and
the District of Columbia). The Court of International
Trade, however, is constituted by chapter 11 of Title 28.
Therefore, the Court of International Trade is not a
“district court” and cannot benefit from § 1367. This
conclusion is reinforced by the fact that Title 28 repeat-
edly treats district courts and the Court of International
Trade as separate and exclusive entities. See, e.g., id.
§ 451 (referring to “district courts” and “the Court of
International Trade” separately in the definitions of
“court of the United States” and “judge of the United
States”).
The Court of International Trade relied on the legisla-
tive history associated with 28 U.S.C. § 1367 to support
its conclusion that it had authority to exercise statutory
supplemental jurisdiction. See Sioux Honey, 700 F. Supp.
2d at 1345. This legislative history states that
“[l]egislation . . . is needed to provide the federal courts
with statutory authority to hear supplemental claims.”
H.R. Rep. No. 101-734 (1990), at 28, reprinted in 1990
21 SIOUX HONEY v. HARTFORD FIRE
U.S.C.C.A.N. 6860, 6874. As explained above, however,
§ 1367’s grant of supplemental jurisdiction authority was
clearly confined to district courts. Therefore, we decline
to adopt the Court of International Trade’s reasoning
regarding this issue.
In sum, in relying so heavily on legislative history, the
Court of International Trade failed to properly consider
the statutory language of 28 U.S.C. § 1367 and §§ 1581-
1585. Nothing in these statutes, when viewed in combi-
nation or individually, provides a specific grant of sup-
plemental jurisdictional authority to the Court of
International Trade over the types of claims asserted
against the Surety Defendants. See Christianson, 486
U.S. at 818 (“Courts created by statute can have no juris-
diction but such as the statute confers.”). For these
reasons, we conclude that the Court of International
Trade erred in exercising statutory jurisdiction over the
Surety Defendant claims (Claims 1, 2, 3, and 6) under
§ 1585 and § 1367.
2. Common Law Pendent Jurisdiction
On appeal, as they did below, Plaintiffs assert that
even if the Court of International Trade cannot exercise
statutory supplemental jurisdiction over the claims
against the Surety Defendants under § 1585 and § 1367,
it can exercise non-statutory, common law pendent juris-
diction over those claims. Pendent jurisdiction involves a
court’s ability to hear a claim “for which there is no inde-
pendent basis for federal jurisdiction, but that arises out
of a ‘common nucleus of operative fact’ with a properly
asserted claim that does fall within the federal court’s
subject matter jurisdiction.” 16 J. Moore et al., Moore’s
Federal Practice § 106.03[2], pp. 106-11 (3d ed. 2011).
Pendent jurisdiction has two primary components: pen-
SIOUX HONEY v. HARTFORD FIRE 22
dent-claim jurisdiction and pendent-party jurisdiction.
Pendent-claim jurisdiction principles apply in a federal
lawsuit involving one plaintiff versus one defendant,
where an independent jurisdictional basis exists for one of
the claims at issue between the parties, but not for a
second state law claim. See id. § 106.03[3]. Pendent-
party jurisdiction principles, on the other hand, apply if
the plaintiff in the previous example asserts that second
state law claim against a third party not named in an-
other claim independently cognizable by the federal court.
See id. Thus, pendent-party jurisdiction is often de-
scribed as involving the exercise of pendent jurisdiction
over parties, as opposed to claims between parties already
before the court through an independently cognizable
federal claim.
The seminal Supreme Court case discussing the con-
cept of pendent-claim jurisdiction is United Mine Workers
of America v. Gibbs, 383 U.S. 715 (1966). There, the
plaintiff asserted the following claims against the same
defendant: (1) a claim based on a federal statute and (2) a
state law claim grounded in Tennessee common law. Id.
at 720-21. The Court held that the district court did not
err in exercising jurisdiction over the state law claim,
reasoning that a federal court can hear a state law claim
if it derives from the same “common nucleus of operative
fact” as the federal claim. Id. at 725, 729. The Supreme
Court also explained, however, that even if a district court
has the authority to invoke the doctrine of pendent juris-
diction, “[t]hat power need not be exercised” because
“pendent jurisdiction is a doctrine of discretion, not of
plaintiff’s right.” Id. at 726.
The Supreme Court addressed the concept of pendent-
party jurisdiction in Finley v. United States, 490 U.S. 545
(1989). In that case, the plaintiff filed a federal claim
23 SIOUX HONEY v. HARTFORD FIRE
against the federal government along with state law
claims against a local, nonfederal utility company. Id. at
546. The Court held that no jurisdiction existed over the
state law claims asserted against the utility company. Id.
at 556. In reaching this conclusion, the Court explained
that the Finley state law claims “fundamentally dif-
fer[ed]” from the state law claim in Gibbs because exercis-
ing jurisdiction over the Finley claims would require
adding a party to the suit. Id. at 549; see also id. at 551
(“The most significant element of ‘posture’ or of ‘context’
in the present case . . . is precisely that the added claims
involve added parties over whom no independent basis of
jurisdiction exists.” (citation omitted)); id. at 556 (“All our
cases . . . have held that a grant of jurisdiction over claims
involving particular parties does not itself confer jurisdic-
tion over additional claims by or against different par-
ties.”). Indeed, in Gibbs, the parties implicated by the
state law claim were already before the court through an
“independently cognizable” federal claim. See id. at 549. 3
The Court of International Trade, applying Finley,
concluded that it lacked authority to exercise “‘common
law’ supplemental jurisdiction” over the Surety Defendant
claims. Sioux Honey, 700 F. Supp. 2d at 1340. We agree.
As explained above, the Court of International Trade has
no original jurisdiction over any of the claims against the
Surety Defendants. We also concluded that no statutory
supplemental jurisdiction exists in this case. Therefore,
absent pendent jurisdiction, the Surety Defendants would
3 The Court in Finley acknowledged that its finding
of no jurisdiction over the state law claims “mean[t] that
the efficiency and convenience of a consolidated action
[would] sometimes have to be forgone in favor of separate
actions in state and federal courts.” Id. at 555. This
concern, however, did not compel the Court to exercise
jurisdiction over the state law claims. Id.
SIOUX HONEY v. HARTFORD FIRE 24
drop entirely from the suit. Thus, pendent-party jurisdic-
tion is at issue in this case—not pendent-claim jurisdic-
tion, and Finley controls.
Finley clearly bars the type of procedural maneuver
that Plaintiffs attempt in this case (i.e., bringing addi-
tional parties into a lawsuit through claims not independ-
ently cognizable in federal court). Following Finley, we
conclude that the Court of International Trade does not
possess common law, pendent jurisdiction over the Surety
Defendant claims at issue in this appeal (Claims 1, 2, 3,
and 6). Some statutory grant of authority is required,
which, as stated above, does not exist in this case. Be-
cause jurisdiction is lacking over the Surety Defendant
claims at issue in this appeal, these claims must be
dismissed.
C. Claims Against the Government
In light of our conclusion that the Court of Interna-
tional Trade lacks jurisdiction over the claims asserted
against the Surety Defendants, all that remains for
resolution are the claims raised on appeal that have been
asserted against the Government (i.e., Counts 1, 2, 6, and
8-15). Of these claims, Counts 1, 2, and 6 must fail be-
cause Plaintiffs do not qualify as intended third-party
beneficiaries. We explain why below in Subsection 1.
Counts 8-15 fail for the reasons discussed below in Sub-
section 2.
1. Claims Involving Third-Party Beneficiary Status
As mentioned above, during the time period at issue
in this lawsuit, a new shipper was permitted to satisfy its
duty deposit requirement by posting a Customs bond
equal in value to the cash deposit otherwise required. As
25 SIOUX HONEY v. HARTFORD FIRE
part of this process, sureties entered into contracts with
importers to insure payment of deposits. Plaintiffs target
these bond contracts in Counts 1, 2, and 6, arguing that
they have a right to enforce the contracts as third-party
beneficiaries. The Court of International Trade found
otherwise, dismissing Counts 1, 2, and 6 after concluding
that Plaintiffs did not qualify as intended third-party
beneficiaries. Sioux Honey, 700 F. Supp. 2d at 1348. We
agree with the Court of International Trade.
A plaintiff lacking privity of contract can nonetheless
sue for damages under that contract if it qualifies as an
intended third-party beneficiary. See Flexfab, L.L.C. v.
United States, 424 F.3d 1254, 1263 (Fed. Cir. 2005);
Alpine Cnty., Cal. v. United States, 417 F.3d 1366, 1368
(Fed. Cir. 2005); Chancellor Manor v. United States, 331
F.3d 891, 901 (Fed. Cir. 2003). “In order to prove third
party beneficiary status, a party must demonstrate that
the contract not only reflects the express or implied
intention to benefit the party, but that it reflects an
intention to benefit the party directly.” Glass v. United
States, 258 F.3d 1349, 1354 (Fed. Cir. 2001) (emphasis
added). “The intent of the parties to the contract is there-
fore the cornerstone of a claim for third-party beneficiary
status.” Flexfab, 424 F.3d at 1259; see also Astra USA,
Inc. v. Santa Clara Cnty., Cal., 131 S.Ct. 1342, 1347
(2011) (“A nonparty becomes legally entitled to a benefit
promised in a contract . . . only if the contracting parties
so intend.”). A party does not obtain third-party benefici-
ary status, however, “merely because the contract would
benefit them.” FDIC v. United States, 342 F.3d 1313,
1319 (Fed. Cir. 2003). Indeed, third-party beneficiary
status is an “exceptional privilege” and “should not be
granted liberally.” German Alliance Ins. Co. v. Home
Water Supply Co., 226 U.S. 220, 230 (1912); Flexfab, 424
F.3d at 1259.
SIOUX HONEY v. HARTFORD FIRE 26
That said, “[t]he intended beneficiary need not be spe-
cifically or individually identified in the contract.” Mon-
tana v. United States, 124 F.3d 1269, 1273 (Fed. Cir.
1997). If not identified, however, the nonparty must still
“fall within a class clearly intended to be benefited
thereby.” Id. “When the intent to benefit the third party
is not expressly stated in the contract, evidence thereof
may be adduced.” Roedler v. Dep’t of Energy, 255 F.3d
1347, 1352 (Fed. Cir. 2001).
Under our precedent, Plaintiffs (i.e., domestic produc-
ers) cannot qualify as intended third-party beneficiaries of
the new shipper bond contracts. First, the contract lan-
guage itself clearly treats the Government as the sole
beneficiary. In particular, the language states that the
importers and sureties agreed to “bind” themselves “to the
United States in the amount or amounts, as set forth
below.” The contracts also incorporate federal regulations
indicating that the Government is the beneficiary. See,
e.g., 19 C.F.R. § 113.62 (requiring “principal and surety,
jointly and severally” to “[p]ay, as demanded by Customs,
all additional duties, taxes, and charges subsequently
found due . . . on any entry secured by [a] bond”). Plain-
tiffs do not argue to the contrary, acknowledging that
each new shipper bond “is a contract among an importer
(the bond’s principal and primary obligor); the issuing
surety (the bond’s secondary obligor); and Customs (the
bond’s sole identified beneficiary).” The contracts do not
identify the domestic producers as beneficiaries, also a
conclusion Plaintiffs do not dispute.
The bond contracts’ (1) treatment of the Government
as a beneficiary; (2) failure to identify the domestic pro-
ducers as beneficiaries; and (3) failure to mention a class
of third parties that could potentially encompass the
domestic producers, see Montana, 124 F.3d at 1273, all
27 SIOUX HONEY v. HARTFORD FIRE
combine to strongly support the conclusion that these
contracts do not “reflect[] an intention to benefit” the
domestic producers “directly.” See Glass, 258 F.3d at
1354. Instead, any benefit the domestic producers may
derive from the bond contracts would come indirectly
through the application of the CDSOA. The mere fact
that the domestic producers stand to ultimately benefit
from the bond contracts in some capacity does not auto-
matically render them intended third-party beneficiaries.
See, e.g., FDIC, 342 F.3d at 1319. The intended benefit
must be direct. See Glass, 258 F.3d at 1354.
Plaintiffs argue on appeal that they are intended
third-party beneficiaries because the new shipper bond
contracts are essential to achieving the antidumping
statute’s purpose of collecting duties, which are then
redistributed to domestic producers under the CDSOA.
According to Plaintiffs, the importers, Surety Defendants,
and the Government knew the contracts they were in-
volved in would operate within the CDSOA framework
and that the domestic producers would benefit directly
from the contracts. See Montana, 124 F.3d at 1273 (“The
intended beneficiary need not be specifically or individu-
ally identified in the contract” and can merely “fall within
a class clearly intended to be benefited thereby.”). As a
result, contend Plaintiffs, the intent of the contracting
parties to directly benefit the domestic producers exists.
In further support of its position, Plaintiffs rely on Roed-
ler, 255 F.3d at 1352, which states that when a contract
involving the United States “implements a statutory
enactment, it is appropriate to inquire into the governing
statute and its purpose” when performing the third-party
beneficiary analysis.
Following the Supreme Court’s recent guidance in As-
tra, we reject Plaintiffs’ contentions. In Astra, a program
SIOUX HONEY v. HARTFORD FIRE 28
created by a federal statute imposed limits on prices that
drug manufacturers could charge healthcare facilities for
medications. 131 S.Ct. at 1345. Drug manufacturers
wishing to participate in state Medicaid systems had to
enroll in this federal program. Id. To enroll, the drug
manufacturers signed “form” contracts with the Depart-
ment of Health and Human Services (“HHS”) that “simply
incorporate[d] statutory obligations.” Id. at 1348. One
statutory provision in the federal program provided for
compensation to healthcare facilities overcharged by the
drug manufacturers. Id. at 1347. Some healthcare
facilities, believing they were overcharged for drugs, sued
drug manufacturers under this federal statutory scheme.
Id. Specifically, the healthcare facilities alleged that the
overcharging constituted a breach of the manufacturers’
enrollment contracts and that the facilities, as third-party
beneficiaries of those contracts, could recover damages. 4
Id. at 1347
Despite acknowledging that the enrollment contracts
specifically named the healthcare facilities as recipients of
the drugs and that the very purpose of these agreements
was to ensure that these facilities were not overcharged,
the Supreme Court declined to accord the plaintiffs in-
tended third-party beneficiary status. Id. at 1347-48.
Instead, the Court held that suits filed by the statutorily-
protected healthcare facilities to enforce the enrollment
contracts were “incompatible with the statutory regime.”
Id. at 1345. In reaching this conclusion, the Court em-
phasized that Congress placed the Secretary of HHS in
4 The healthcare facilities initiated this lawsuit de-
spite the fact that the federal program at issue granted
HHS the authority to oversee compliance with the drug
pricing system; it did not provide the healthcare facilities
with a private right of action. Id. at 1345.
29 SIOUX HONEY v. HARTFORD FIRE
control of the drug pricing scheme, not the healthcare
facilities. Id. “[HHS’s] control could not be maintained
were potentially thousands of [healthcare facilities]
permitted to bring suits alleging errors in manufacturers’
price calculations.” Id. “If [the healthcare facilities] may
not sue under the statute, it would make scant sense to
allow them to sue on a form contract implementing the
statute, setting out terms identical to those contained in
the statute.” Id. Indeed, the Court reasoned that “[t]he
absence of a private right to enforce . . . would be ren-
dered meaningless if [the healthcare facilities] could
overcome that obstacle by suing . . . instead.” Id. at 1348.
Under Astra, the fact that a private entity stands to
benefit financially from a statutory scheme does not
necessarily make it an intended third-party beneficiary of
contracts operating within that scheme where no statu-
tory private right of action exists.
The present case is factually similar to Astra. First,
both cases involve complex statutory schemes that offer
the plaintiffs the potential of obtaining a financial benefit.
Moreover, like the plaintiffs in Astra, Plaintiffs in this
case attempt to recover under a contract intertwined with
that statutory scheme, claiming intended third-party
beneficiary status. Additionally, the contracts at issue in
both cases are governed by federal laws. Perhaps most
importantly, the statutes governing the contracts at issue
in both cases do not grant the plaintiffs the right to bring
a private lawsuit to recover the fees allegedly owed to
them. See id. at 1347. Indeed, in the present matter,
Congress vested the Government with the authority to
enforce the Customs bond contracts, not the domestic
producers. See 19 U.S.C. § 1623(a)-(c) (authorizing “the
Secretary of the Treasury” or “the Customs Service” to
enforce Customs bonds); see also id. § 1514(a)-(b) (after
Customs makes a payment demand on the surety, the
SIOUX HONEY v. HARTFORD FIRE 30
surety must either pay Customs or file an administrative
protest with Customs which, if denied, may be challenged
in the Court of International Trade). In a situation such
as this, where no statutory private right to enforce the
Customs bonds exists, permitting a party to sue as an
intended third-party beneficiary would improperly render
“[t]he absence of [that] private right . . . meaningless.”
See Astra, 131 S.Ct. at 1348.
In sum, while the bond contracts treat the Govern-
ment as a direct beneficiary, the same cannot be said of
the domestic producers or a class that encompasses the
domestic producers. This conclusion is supported by the
fact that the antidumping statutes do not confer private
enforcement rights on the domestic producers under the
bond contracts. Any benefit the domestic producers
derive from the bond contracts comes indirectly as a
result of the operation of the CDSOA. Because Plaintiffs
are not intended third-party beneficiaries of the bond
contracts, they cannot enforce these contracts. Thus, we
affirm the Court of International Trade’s dismissal of
Counts 1, 2, and 6 as asserted against the Government.
2. Remaining Claims
After our rulings on the supplemental jurisdiction and
third-party beneficiary matters, only Counts 8-15 remain
at issue in this appeal. As mentioned, these claims,
which primarily accuse Commerce and Customs of failing
to satisfy statutory and regulatory obligations, were
dismissed below on standing, ripeness, or Twombly
grounds. Dismissal of these claims is appropriate. First,
we conclude that Counts 11 and 13 must fail because they
involve discretionary agency actions, which are unreview-
able in federal court under Heckler, 470 U.S. at 821.
Next, we find that Counts 8-10, 12 and 15 fail to state a
31 SIOUX HONEY v. HARTFORD FIRE
claim upon which relief can be granted because the Com-
plaint lacks the factual matter necessary to satisfy the
pleading requirements set forth in Twombly, 550 U.S. at
544. Finally, given an admission by Plaintiffs, Count 14
must also fail. 5
On appeal, the Government argues that the Court of
International Trade properly dismissed Claims 11 and 13
because these claims involve discretionary agency actions
not subject to judicial review under Heckler. Plaintiffs
respond by contending that the actions addressed in
Claims 11 and 13 are required and ministerial, as op-
posed to discretionary, and are thus not protected by
Heckler. We agree with the Government. 6
In Heckler, the Supreme Court addressed “the extent
to which a decision of an administrative agency to exer-
cise its ‘discretion’ not to undertake certain enforcement
actions is subject to judicial review under the Administra-
tive Procedure Act, 5 U.S.C. § 501 et. seq.” 470 U.S. at
5 Regarding Count 14, Customs is authorized under
19 U.S.C. § 1623(c) to cancel a bond upon a breach of the
bond contract. According to Plaintiffs, “Congress
amended Section 1623(c) in 1988 to require Customs to
issue guidelines under which it would exercise its Section
1623(c) bond cancellation authority.” Compl. ¶ 217. In
Count 14, Plaintiffs allege that Customs failed to issue
those guidelines. Customs, however, did issue guidelines
pursuant to 19 U.S.C. § 1623(c). See Customs Bond
Cancellation Standards, 54 Fed. Reg. 16,182 (Customs
Apr. 21, 1989); Guidelines to the Cancellation of Certain
Claims for Liquidated Damages, 67 Fed. Reg. 19,485
(Customs Apr. 19, 2002). Plaintiffs now admit that they
filed Count 14 in error. For these reasons, we affirm the
Court of International Trade’s dismissal of Count 14.
6 Heckler applies in this case because Plaintiffs
seek review under the Administrative Procedure Act.
SIOUX HONEY v. HARTFORD FIRE 32
823. The plaintiffs, prison inmates sentenced to death by
lethal injection, alleged that the use of particular drugs
for capital punishment violated certain provisions of the
Federal Food, Drug, and Cosmetic Act (“FDCA”). They
requested that the Food and Drug Administration
(“FDA”) take various enforcement actions to prevent the
alleged violations, including affixing warnings on drugs
and instructing prison administrators not to use the
drugs for execution purposes. Id. at 823-24. The FDCA,
however, contained no provisions requiring the FDA to
take any of the actions requested by the plaintiffs. Id. at
835. Instead, “[t]he Act’s enforcement provisions . . .
commit[ed] complete discretion to the Secretary to decide
how and when they should be exercised.” Id.
The Court explained that in situations where an
agency invokes its discretion to refuse to take enforce-
ment steps, “the presumption is that judicial review is not
available.” Id. at 831. The Court provided the following
basis for this presumption:
First, an agency decision not to enforce often in-
volves a complicated balancing of a number of fac-
tors which are peculiarly within its expertise.
Thus, the agency must not only assess whether a
violation has occurred, but whether agency re-
sources are best spent on this violation or another,
whether the agency is likely to succeed if it acts,
whether the particular enforcement action re-
quested best fits the agency’s overall policies, and,
indeed, whether the agency has enough resources
to undertake the action at all. An agency gener-
ally cannot act against each technical violation of
the statute it is charged with enforcing. The
agency is far better equipped than the courts to
deal with the many variables involved in the
33 SIOUX HONEY v. HARTFORD FIRE
proper ordering of its priorities. . . . In addition to
these administrative concerns, we note that when
an agency refuses to act it generally does not ex-
ercise its coercive power over an individual's lib-
erty or property rights, and thus does not infringe
upon areas that courts often are called upon to
protect. Similarly, when an agency does act to en-
force, that action itself provides a focus for judicial
review, inasmuch as the agency must have exer-
cised its power in some manner. The action at
least can be reviewed to determine whether the
agency exceeded its statutory powers.
Id. at 831-32 (citations omitted).
The presumption that judicial review is not available
“may be rebutted where the substantive statute has
provided guidelines for the agency to follow in exercising
its enforcement powers.” Id. at 832-33. Indeed, “in
establishing this presumption in the APA, Congress did
not set agencies free to disregard legislative direction in
the statutory scheme that the agency administers.” Id. at
833. In Heckler, however, the Supreme Court concluded
that the FDCA’s enforcement provisions, which commit-
ted complete discretion to the Secretary, were insufficient
to overcome the presumption. Id. at 835, 837. Therefore,
the Court held that “[t]he FDA’s decision not to take the
enforcement actions requested by respondents [was] . . .
not subject to judicial review under the APA.” Id. at 837-
38.
Notably, the Supreme Court in Heckler discussed
Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402
(1971), a case where the petitioners sought to prevent
construction of an interstate highway through a park in
Tennessee. Id. at 406-07. The federal statute at issue in
SIOUX HONEY v. HARTFORD FIRE 34
Overton Park provided that the Secretary “shall not
approve” any program or project using public parkland if
a “feasible and prudent” alternative route exists. Id. at
405. The Court found that the petitioners, who argued
that this statute prohibited the Secretary from authoriz-
ing construction of the road, were entitled to judicial
review because “the Secretary’s decision . . . d[id] not fall
within the [APA’s] exception for action ‘committed to
agency discretion.’” Id. at 410. Indeed, “[t]his is a very
narrow exception.” Id.
Heckler distinguished Overton Park, explaining that
Overton Park did not involve an agency’s refusal
to take requested enforcement action. It involved
an affirmative act of approval under a statute that
set clear guidelines for determining when such
approval should be given. Refusals to take en-
forcement steps generally involve precisely the
opposite situation, and in that situation we think
the presumption is that judicial review is not
available.
Heckler, 470 U.S. at 831.
In Counts 11 and 13, Plaintiffs allege that Customs
failed to issue demand letters to sureties when importers
missed duty payments (Count 11) and unlawfully wrote
off duties as uncollectable (Count 13). As the Government
points out, however, Plaintiffs fail to identify any law
requiring Customs to issue a demand letter to a surety
within a particular period of time. We are aware of no
such law. Plaintiffs also fail to identify a law prohibiting
Customs from writing off a debt. Once again, we are
aware of no such law. In other words, Customs has
discretion when deciding whether to engage in the con-
35 SIOUX HONEY v. HARTFORD FIRE
duct described in Counts 11 and 13. That Customs has
this discretion makes sense, since this agency is in the
best position to decide whether to devote federal resources
towards obtaining relief from sureties, or whether such
efforts would be wasteful. Because Customs possesses
the discretion to perform the agency actions described in
Counts 11 and 13, these claims fail under Heckler.
With regard to the remaining claims, we conclude
that Heckler does not apply to preclude judicial review of
Counts 8-10, and 15 because these counts allege discrete
agency actions (or failures to take discrete agency actions)
that either Customs or Commerce was required to take.
See Norton v. S. Utah Wilderness Alliance, 542 U.S. 55, 64
(2004) (A plaintiff attempting to challenge an agency’s
failure to act under the Administrative Procedure Act can
only do so in federal court if that failure to act involves “a
discrete agency action that [the agency] is required to
take.”). Therefore, we find that Plaintiffs have standing
to assert these claims.
Regarding Count 12, the Government argues that
Plaintiffs cannot succeed under this claim for the same
reasons that Counts 1, 2, and 6 fail: because Plaintiffs do
not qualify as intended third-party beneficiaries. Unlike
Counts 1, 2, and 6, however, Count 12 does not simply
involve an attempt to enforce the bond contracts. Instead,
Plaintiffs accuse Customs in Count 12 of acting outside of
its statutory authority by cancelling antidumping duties
associated with bond contracts, contending that Com-
merce rather than Customs has this authority. Plaintiffs’
failure to qualify as intended third-party beneficiaries
does not prevent them from making this type of challenge.
Moreover, the fact that Count 12 accuses Customs of
acting without authorization, as opposed to failing to act
when required by law, means that the presumption of no
SIOUX HONEY v. HARTFORD FIRE 36
judicial review discussed in Heckler does not apply to this
claim. For these reasons, we find that jurisdiction exists
over Count 12.
As explained below, however, we conclude that
Counts 8-10, 12, and 15 must be dismissed because they
fail to state a claim upon which relief can be granted
under Twombly, 550 U.S. at 544. In Count 8, Plaintiffs
allege that Commerce failed to issue liquidation instruc-
tions to Customs, which resulted in uncollected antidump-
ing duties. In Counts 9, 10, 12 and 15, Plaintiffs target
Customs, not Commerce, asserting that Customs: (1)
failed to assess final antidumping duties (Count 9); (2)
failed to distribute collected duties to the domestic pro-
ducers in accordance with the CDSOA (Count 10); (3)
unlawfully compromised, or settled, antidumping duties
secured by new shipper bonds (Count 12); and (4) failed to
provide the Department of Justice with notice letters
when sureties did not meet payment obligations (Count
15).
The Government argues on appeal that Plaintiffs’
Complaint is devoid of facts and cannot satisfy the plead-
ing requirements set forth in Twombly. In response,
Plaintiffs contend that their Complaint does contain
factual detail sufficient to meet the thresholds of Court of
International Trade Rule 8 and Twombly. Additionally,
Plaintiffs assert that the Court of International Trade
parsed each count of the Complaint individually, failing to
properly consider the counts within the context of the
antidumping duty assessment and collection process. We
agree with the Government and conclude that dismissal
of Counts 8-10, 12, and 15 under Twombly is appropriate
because Plaintiffs failed to allege any specific instances
37 SIOUX HONEY v. HARTFORD FIRE
where Commerce and Customs actually committed the
harms alleged in these claims. 7
Under Court of International Trade Rule 8(a)(2), a
pleading must contain a “short and plain statement of the
claim showing that the pleader is entitled to the relief.”
The Supreme Court explained in Twombly that while
Rule 8 does not require “detailed factual allegations,” it
does require more than “labels and conclusions.”
Twombly, 550 U.S. at 555. Indeed, “a formulaic recitation
of the elements of a cause of action will not do.” Id. (citing
Papasan v. Allain, 478 U.S. 265, 286 (1986)). The
“[f]actual allegations must be enough to raise a right to
relief above the speculative level.” Id.
“To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to
‘state a claim of relief that is plausible on its face.’”
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting
7 The Government argues that Plaintiffs lack
standing under Lujan v. Defenders of Wildlife, 504 U.S.
555 (1992), to assert their claims because they have not
provided any concrete factual instances showing that
Commerce or Customs actually engaged in the allegedly
harmful conduct listed in the Counts of the Complaint.
We view this argument as one invoking the merits of the
case as opposed to a threshold standing argument. As a
result, following Morrison v. National Australia Bank
Ltd., 130 S.Ct. 2869 (2010), we elect to address the Gov-
ernment’s argument under Court of International Trade
Rule 12(b)(5) (the equivalent to Fed. R. Civ. P. 12(b)(6)),
rather than Court of International Trade Rule 12(b)(1)
(the equivalent to Fed. R. Civ. P. 12(b)(1)). See Morrison,
130 S.Ct. at 2877 (explaining that appellate court erred
by addressing “merits question” under Rule 12(b)(1)
instead of Rule 12(b)(6), but declining to remand because
“a remand would only require a new Rule 12(b)(6) label
for the same Rule 12(b)(1) conclusion”).
SIOUX HONEY v. HARTFORD FIRE 38
Twombly, 550 U.S. at 570). “A claim has facial plausibil-
ity when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defen-
dant is liable for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). “The plausibility standard is
not akin to a ‘probability requirement,’ but it asks for
more than a sheer possibility that a defendant has acted
unlawfully.” Id.; see Twombly, 550 U.S. at 557-58 (“some-
thing beyond the mere possibility . . . must be alleged”).
“Determining whether a complaint states a plausible
claim for relief will . . . be a context-specific task that
requires the reviewing court to draw on its judicial ex-
perience and common sense.” Iqbal, 129 S.Ct. at 1950.
In Claims 8-10, 12, and 15, Plaintiffs allege that
Commerce and Customs failed to take various actions
required by law involving the assessment, collection, and
distribution of antidumping duties, and that these fail-
ures resulted in uncollected and undistributed duties. In
support of its claims, Plaintiffs rely on public information
published by Customs on its website indicating that
Customs has failed to collect $723 million in final, as-
sessed antidumping duties under the Four Orders over a
six-year period. Thus, Plaintiffs’ cause of action relies
largely on the connection, if any, between (1) the alleged
failure to follow the antidumping statutes and regulations
and (2) the uncollected duties reported on Customs’
website. Plaintiffs assert that given the substantial
amount of uncollected duties, it is plausible to conclude
and reasonable to infer that Commerce and Customs did
not perform the statutory and regulatory obligations
listed in Counts 8, 9, 12, and 15. According to Plaintiffs,
it necessarily follows, then, that had the duties been
collected they could have been distributed to the domestic
producers under the CDSOA (see Count 10).
39 SIOUX HONEY v. HARTFORD FIRE
While Plaintiffs state that Customs failed to collect
over $700 million in duties, their Complaint warrants
dismissal because it contains no facts indicating that the
conduct alleged in Counts 8-10, 12, and 15 actually oc-
curred and caused the duties to be uncollected and undis-
tributed. Indeed, Plaintiffs do not provide a single factual
instance in their Complaint showing that Commerce
failed to issue liquidation instructions to Customs when it
was required to do so (Count 8) or that Customs: (1) failed
to assess final antidumping duties when it was required
to do so (Count 9); (2) failed to distribute collected duties
to the domestic producers in accordance with the CDSOA
when it was required to do so (Count 10); (3) unlawfully
compromised, or settled, antidumping duties secured by
new shipper bonds (Count 12); or (4) failed to provide the
Department of Justice with a notice letter when it was
required to do so (Count 15).
While it is possible that Commerce and Customs en-
gaged in the actions (or inactions) outlined in Claims 8-
10, 12, and 15, and that this activity (or inactivity) re-
sulted in a failure to collect and distribute the duties,
Plaintiffs have not provided enough factual detail in the
Complaint to render these conclusions plausible. See
Iqbal, 129 S.Ct. at 1949; Twombly, 550 U.S. at 570.
Indeed, other scenarios not relating to Commerce or
Customs’ conduct could explain why Customs has not yet
collected the $723 million. For example, the importers or
sureties responsible for paying the duties could have gone
out of business or declared bankruptcy. Furthermore, as
the Government represented at oral argument, certain
duties could be currently uncollected because they are
subject to protests or pending collection actions. See Oral
Arg. at 20:32-20:56, available at
http://www.cafc.uscourts.gov/oral-argument-
recordings/2011-1040/all. In providing so few facts in
SIOUX HONEY v. HARTFORD FIRE 40
support of their allegations, Plaintiffs have done nothing
to separate the conduct alleged in Counts 8-10, 12 and 15
from a whole host of other possible alternatives. See
Iqbal, 129 S.Ct. at 1951 (considering the existence of
“more likely” explanations in finding that a claim lacked
plausibility). For these reasons, we conclude that Plain-
tiffs have failed to “nudge” Counts 8-13 and 15 “across the
line from conceivable to plausible.” See Twombly, 550
U.S. at 570. Therefore, these claims must be dismissed.
Notably, as the Supreme Court explained in Twombly,
“a district court must retain the power to insist upon
some specificity in pleading before allowing a potentially
massive factual controversy to proceed.” Id. at 558. This
rule rings especially true in the present case given the
Government’s obligation to compile an administrative
record. Counts 8-10, 12, and 15 implicate virtually every
meaningful step of the antidumping duty collection and
distribution process and span a period of six years. The
lack of factual specificity in these claims leaves the Gov-
ernment lost at sea when attempting to compile an ad-
ministrative record. This further supports dismissal
under Twombly.
Plaintiffs argue that they cannot plead with more
specificity because the facts necessary to make such a
pleading are in the possession of the Government and are
thus unattainable. We reject this argument. Plaintiffs’
assertion is undermined by the fact that the record pro-
vides no indication that they made an effort to obtain the
information from the Government that they now claim is
unattainable (either through a Freedom of Information
Act request or by simply calling or writing Commerce or
41 SIOUX HONEY v. HARTFORD FIRE
Customs for information). 8 To be sure, this is not to say
that Plaintiffs were required to file Freedom of Informa-
tion Act requests or call Commerce and Customs in order
to satisfy the Twombly standard. These examples simply
highlight the fact that nothing in the record shows that
Plaintiffs made an attempt to obtain the information that
they now claim is “unavailable.”
D. Motion for Jurisdictional Discovery
In the Court of International Trade proceedings,
Plaintiffs moved for permission to take jurisdictional
discovery. As mentioned, the Court of International
Trade denied this motion, concluding that each claim was
dismissed for reasons that could not be remedied by
discovery. We find that the Court of International Trade
did not abuse its discretion in denying the motion.
III. CONCLUSION
For the foregoing reasons, Counts 1, 2, 3, and 6 as as-
serted against the Surety Defendants must be dismissed
for lack of jurisdiction. Regarding Count 1, the Court of
International Trade dismissed this claim on the merits for
failure to state a claim upon which relief can be granted.
We vacate this judgment and remand with instructions to
dismiss for lack of jurisdiction. The Court of Interna-
tional Trade’s judgment with respect to Counts 2, 3, and
6, however, is affirmed. Indeed, while the court dismissed
8 The Government represented at oral argument
that if Plaintiffs had called Customs for information on
various liquidations, Customs would likely have provided
information. Oral Arg. at 25:00-25:25, available at
http://www.cafc.uscourts.gov/oral-argument-
recordings/2011-1040/all.
SIOUX HONEY v. HARTFORD FIRE 42
these claims on grounds other than those relied on in this
opinion, its final judgment of dismissal was for lack of
subject matter jurisdiction; the same result compelled by
our conclusion.
Additionally, as explained above, the claims asserted
against the Government must be dismissed. Because we
agree with the Court of International Trade’s conclusion
that Plaintiffs fail to qualify as intended third-party
beneficiaries, we affirm the dismissal of Counts 1, 2, and
6. We also affirm the court’s dismissal of Counts 8-10 and
12-15. 9 Regarding Count 11, the Court of International
Trade dismissed this claim on the merits even though it
was unreviewable under Heckler, 470 U.S. at 821. There-
fore, we vacate this judgment and remand with instruc-
tions to dismiss for lack of jurisdiction.
Finally, we affirm the Court of International Trade’s
decision to deny Plaintiffs’ motion for jurisdictional dis-
covery.
AFFIRMED-IN-PART AND VACATED-IN-PART
9 While the trial court dismissed Counts 8 and 9 for
lack of jurisdiction and we concluded that these claims
must be dismissed under Twombly, an affirmance is still
appropriate. See Morrison, 130 S.Ct. at 2877, 2888 (Su-
preme Court affirmed judgment dismissing claims for
lack of subject matter jurisdiction despite finding that
these claims must be dismissed under Fed. R. Civ. P.
12(b)(6) instead).