Slip Op. 08-66
UNITED STATES COURT OF INTERNATIONAL TRADE
TRUSTEES IN BANKRUPTCY OF
NORTH AMERICAN RUBBER THREAD
CO., INC., FILMAX SDN. BHD.,
HEVEAFIL USA, INC., AND
HEVEAFIL SDN. BHD.,
Before: Richard W. Goldberg,
Plaintiffs, Senior Judge
v. Consol. Court No. 05-00539
UNITED STATES,
Defendant.
OPINION
[Commerce’s refusal to initiate a changed circumstances review
is remanded.]
Date: June 10, 2008
Miller & Chevalier Chartered (Peter J. Koenig) for Plaintiff
Trustees in Bankruptcy of North American Rubber Thread Co., Inc.
White & Case, LLP (Walter J. Spak, Emily Lawson, and Jay C.
Campbell) for Plaintiffs Filmax Sdn. Bhd., Heveafil USA, Inc.,
and Heveafil Sdn. Bhd.
Gregory G. Katsas, Acting Assistant Attorney General; United
States Department of Justice; Jeanne E. Davidson, Director, and
Patricia M. McCarthy, Assistant Director, Commercial Litigation
Branch, Civil Division, United States Department of Justice,
(Stephen C. Tosini); David W. Richardson, Of Counsel, Office of
Chief Counsel for Import Administration, Department of Commerce
for Defendant United States.
GOLDBERG, Senior Judge: This case is before the Court following
a court-ordered remand. See Tr. in Bankr. of N. Am. Rubber
Court No. 05-00539 Page 2
Thread Co. v. United States, 31 CIT __, 533 F. Supp. 2d 1290
(2007) (“NART”). In NART, the Court ordered the U.S. Department
of Commerce (“Commerce”) to provide a reasonable explanation for
its departure from past agency practice, or in the alternative
to conduct a changed circumstances review. For the reasons
stated below, the Court remands Commerce’s results for further
proceedings consistent with this opinion.
I. STANDARD OF REVIEW
The Court has jurisdiction under 28 U.S.C. § 1581(i). When
reviewing an action under section 1581(i), the Court will set
aside a decision of Commerce if it is “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706(2)(A) (2000); see 28 U.S.C. § 2640(e) (2000).
II. BACKGROUND
The procedural history of this case is set forth in greater
detail in the Court’s previous opinions. See NART, 31 CIT at
__, 533 F. Supp. 2d at 1291—93; Tr. in Bankr. of N. Am. Rubber
Thread Co. v. United States, 30 CIT __, __, 464 F. Supp. 2d
1350, 1351—53 (2006). However, the relevant facts are as
follows: In 1992, Commerce published an antidumping duty order
on imports of extruded rubber thread from Malaysia. When North
Court No. 05-00539 Page 3
American Rubber Thread Co. (“NART”),1 the sole domestic
manufacturer of extruded rubber thread, filed for bankruptcy,
Filmax Sdn. Bhd, Heveafil USA Inc., and Heveafil Sdn. Bhd
(collectively “Heveafil”) requested a changed circumstances
review. NART agreed that the antidumping duty order should be
revoked as to entries after October 1, 2003. Heveafil, however,
argued that the order should be revoked back to October 1, 1995;
a date effectively encompassing all of its entries.2 Upon
investigation, Commerce revoked the antidumping duty order as to
entries after October 1, 2003.
After this review, NART changed its position and asked
Commerce to conduct a second changed circumstances review to
determine whether the order should be revoked to October 1,
1995. Commerce refused, arguing that revoking an order subject
to a completed administrative review would violate long-standing
1
NART refers both to the former company and the plaintiffs in
the current case, Trustees in Bankruptcy of North American
Rubber Thread Co., Inc., its successor-in-interest.
2
Revocation of the order through October 1, 1995 would result in
the revocation of any duties incurred between October 1, 1995
and September 30, 1996 only. Liquidation during this period was
suspended due to ongoing litigation related to Commerce’s
periodic review of that period. See Heveafil Sdn. Bhd. v.
United States, Appeal Nos. 02-1085, 02-1086, 02-1087 (Fed. Cir.
Mar. 19, 2003) (unpublished). That case has been stayed pending
the outcome of the current action. All entries from the other
periods have previously been liquidated.
Court No. 05-00539 Page 4
agency practice. NART and Heveafil challenged this refusal.3 In
NART, the Court noted that Commerce, contrary to its position
that it was long-standing agency practice not to revoke an order
subject to a completed review, had done so on several occasions.
Accordingly, the Court ordered Commerce to explain its departure
from its past practice, or in the alternative, to conduct a
changed circumstances review. On remand, Commerce again refused
to conduct a changed circumstances review arguing: (1) it lacked
the authority to revoke the antidumping duty order; and (2) that
the Court incorrectly interpreted its prior conduct as
establishing an agency practice.
III. DISCUSSION
Commerce must conduct a changed circumstances review
whenever an interested party has shown a change “sufficient to
warrant a review.” 19 U.S.C. § 1675(b)(1) (2000). Here,
Commerce’s refusal to conduct a second changed circumstances
review was not based on the merits of NART and Heveafil’s
request, but instead on its interpretation of the statutory
framework. In NART, the Court provided specific remand
instructions and the Court must now analyze whether Commerce’s
results comply with these instructions.
3
NART and Heveafil brought separate actions challenging
Commerce’s refusal to conduct a second changed circumstances
review. These actions were consolidated to form the present
action.
Court No. 05-00539 Page 5
A. Commerce’s Interpretation of the Statutory Antidumping
Framework
In Commerce’s view, its decision not to conduct a changed
circumstances review was based on the fact that the only
unliquidated entries, the entries for the period from October 1,
1995 to September 30, 1996, were already subject to a completed
review. In Commerce’s view, the principle of “administrative
finality” unambiguously prevails over any discretion the agency
has in selecting an effective date of revocation; or in short,
that the completion of an administrative review unambiguously
precludes the agency from retroactively revoking an order. The
NART Court, however, already rejected this argument. See NART,
31 CIT at __, 533 F. Supp. 2d at 1293–95. Commerce’s current
remand results are only a more thorough attempt to support an
already rejected interpretation of the statutory framework.
B. Commerce is Unable to Provide a Reasonable Explanation
for Its Deviation From Past Agency Conduct
Commerce also fails to provide a reasonable explanation for
its departure from its past practice. Generally, “‘an agency
action is arbitrary when the agency offer[s] insufficient
reasons for treating similar situations differently.’” SKF USA,
Inc. v. United States, 263 F.3d 1369, 1382 (quoting Transactive
Corp. v. United States, 91 F.3d 232, 237 (D.C. Cir. 1996)).
Here, Commerce argues that it is not agency practice to revoke
orders already subject to completed administrative reviews.
Court No. 05-00539 Page 6
According to Commerce, the prior scope rulings which appear to
adopt this practice were instead the result of litigation
settlements. See, e.g., Certain Cold-Rolled Carbon Steel Flat
Products from the Netherlands, 67 Fed. Reg. 9956, 9956—57 (Dep’t
Commerce Mar. 5, 2002) (final results of changed circumstances
review). In Commerce’s view, any subsequent confusion regarding
its past practice was solely due to “inartful drafting” by the
agency. The NART Court, however, already rejected Commerce’s
argument that its prior scope rulings lack precedential value.
NART, 31 CIT at __, 533 F. Supp. 2d at 1296 n.9. Additionally,
Commerce has previously revoked orders pursuant to its authority
under 19 U.S.C. § 1675(b) and (d) and/or § 1677m(h), or its
ability to determine an effective date of revocation. See,
e.g., Porcelain-on-Steel Cookware from Mexico, 67 Fed. Reg.
19553, 19554 (Dep’t Commerce Apr. 22. 2002) (final results of
changed circumstances review). Commerce fails to provide any
explanation for treating the current situation differently—
beyond the litigation settlement rationale rejected in NART.
See NART, 31 CIT __, 533 F. Supp. 2d at 1296 n.9. As such,
Commerce has again failed to provide a reasonable explanation
for its deviation from past agency practice.
IV. CONCLUSION
For the foregoing reasons, this matter is remanded for
further proceedings consistent with this opinion. On remand,
Court No. 05-00539 Page 7
Commerce shall conduct the second changed circumstances review
requested by NART and Heveafil. A separate order will be issued
accordingly.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: June 10, 2008
New York, New York