Seafood Exps. Ass'n of India v. United States

Slip Op. 08-9

UNITED STATES COURT OF INTERNATIONAL TRADE

SEAFOOD EXPORTERS ASSOCIATION
OF INDIA, GOURMET FUSION FOODS
INC., and INTERNATIONAL CREATIVE
FOODS, INC.,

Plaintiffs,

v. Before: Timothy C. Stanceu, Judge

UNITED STATES OF AMERICA, Court No. 05-00347
ROBERT C. BONNER,
COMMISSIONER, UNITED STATES
CUSTOMS AND BORDER
PROTECTION, AND UNITED STATES
CUSTOMS AND BORDER
PROTECTION,

Defendants.

OPINION AND ORDER

[Granting in part, and denying in part, defendants’ motion for reconsideration and modifying the
March 13, 2007 and June 19, 2007 orders addressing the filing of the administrative record]

Dated: January 18, 2008

Troutman Sanders LLP (Julie C. Mendoza, Donald B. Cameron, R. Will Planert, Jeffrey
S. Grimson and Brady W. Mills) for plaintiffs.

Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeanne E. Davidson, Director,
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Stephen C. Tosini); Chi S. Choy, Attorney, Office of the Assistant
Chief Counsel for International Trade Litigation, Bureau of Customs and Border Protection,
United States Department of Homeland Security, of counsel, for defendants.
Court No. 05-00347 Page 2

Stanceu, Judge: Before the court is defendants’ motion for reconsideration pursuant to

USCIT Rule 59(a) and (e). In their motion, defendants request that the court reconsider, in part,

the court’s order of March 13, 2007 (Docket Entry No. 32) (the “Order”). Defendants seek

reconsideration of the directive in the Order that defendants include in their filing of the

administrative record for this case the public documents associated with a notice issued by

defendant United States Customs and Border Protection (“Customs”), Monetary Guidelines for

Setting Bond Amounts for Importations Subject to Enhanced Bonding Requirements, 71 Fed.

Reg. 62,276 (Oct. 24, 2006) (the “Notice”). Defendants argue that the public documents

associated with the Notice should not be included in the administrative record because the Notice

was issued after plaintiffs, on May 23, 2005, filed their first amended complaint and plaintiffs

have not alleged in their amended complaint that the Notice harmed them.

For the reasons discussed herein, the court grants defendants’ motion in part and denies it

in part. The court amends the Order to allow defendants to refrain from filing, at this time, the

public documents associated with the Notice. The court reserves decision on the question of

whether those documents will be necessary for the resolution of this case and therefore will be

required to be filed at a later date.

I. BACKGROUND

On March 13, 2007, the court denied defendants’ motion to dismiss this action for lack of

subject matter jurisdiction and for failure to state a claim upon which relief can be granted.

Seafood Exps. Ass’n of India v. United States, 31 CIT ___, 479 F. Supp. 2d 1367 (2007). On the

same day, the court issued the Order. Order of Mar. 13, 2007 (Docket Entry No. 32). Familiarity

with the court’s opinion in Seafood Exporters Association of India (the “Opinion”) is presumed.
Court No. 05-00347 Page 3

The Order required defendants to file the public administrative record for the case and

provided defendants with thirty days to complete such filing. Id. at 2. The Order stated in

relevant part that the public administrative record for the case:

shall include, but not be limited to, public documents pertaining to the
promulgation and application of the Bond Directive and all modifications thereto,
including the Monetary Guidelines for Setting Bond Amounts for Importations
Subject to Enhanced Bonding Requirements, 71 Fed. Reg. 62,276 (Oct. 24, 2006)
....

Id. In response to the Order, defendants filed, on April 11, 2007, a set of documents that did not

include the public documents associated with the Notice. Defendants filed their motion for

reconsideration on April 9, 2007, requesting that the court reconsider its requirement for filing of

the public documents associated with the Notice because the Notice was not contested by

plaintiffs in this case. See Mot. for Recons. 1 (“Defs.’ Mot. for Recons.”). Plaintiffs filed their

opposition to defendants’ motion for reconsideration on April 26, 2007. Pls.’ Opp. to Defs.’

Mot. for Recons. of this Ct.’s Mar. 13, 2007 Order.

II. DISCUSSION

Defendants argue that the records pertaining to the Notice are not part of the record of the

decision being challenged, that there is no case or controversy concerning the Notice, and that

any claims relating to the Notice would not be ripe for judicial review because plaintiffs have not

exhausted their administrative remedies with respect to any determinations of bond sufficiency

made pursuant to the Notice. See Defs.’ Mot. for Recons. 5-10. In opposing defendants’ motion,

plaintiffs contend that the court took into consideration the scope of the claims contained in their

amended complaint when drafting the Order, and as such the court intended defendants to file the

public documents associated with the Notice. Pls.’ Opp. to Defs.’ Mot. for Recons. of this Ct.’s
Court No. 05-00347 Page 4

Mar. 13, 2007 Order ¶ 5. Plaintiffs point to language in the Opinion in which the court, in

discussing the changes to the “procedures and polices underlying the various issuances

comprising the Bond Directive,” notes that “[t]hese policies appear to have changed after

issuance of the Amendment on July 9, 2004, and in particular upon publication of the Notice in

October 2006, which occurred after plaintiffs brought this action.” Id. ¶ 6 (quoting Seafood

Exps. Ass’n of India, 31 CIT at ___, 479 F. Supp. 2d at 1377). Plaintiffs argue that defendants’

repeated attempts to delay the filing of the administrative record have hampered plaintiffs’ ability

to move forward with this litigation. Id. ¶ 1. In the event that the court grants the

reconsideration motion and agrees to exclude documents related to the Notice in the filing of the

administrative record, plaintiffs request leave to amend their complaint to incorporate claims

related to the Notice. Id. ¶ 7.

Granting a motion for reconsideration under USCIT Rule 59(a) is within the sound

discretion of the court. Union Camp Corp. v. United States, 23 CIT 264, 270, 53 F. Supp. 2d

1310, 1317 (1999). The purpose of such a motion is “to rectify a significant flaw in the conduct

of the original proceedings[,]” such as “when a movant demonstrate[s] that the judgment is based

on manifest errors of law or fact.” Id. (internal citations and quotation marks omitted). The

court concludes that defendants’ arguments do not identify a flaw in the conduct of the

proceedings satisfying the “manifestly erroneous” standard and that those arguments rest on an

overly narrow construction of plaintiffs’ claims.

In its opinion denying the motion to dismiss, the court discussed the Notice, which

announced changes to the guidelines and formulas by which Customs determines limits of

liability on continuous entry bonds issued to importers of certain categories of merchandise
Court No. 05-00347 Page 5

subject to antidumping duty orders. Seafood Exps. Ass’n of India, 31 CIT at ___, 479 F. Supp.

2d at 1374-75. The process affected by the Notice previously was set forth in amended Bond

Directive 99-3510-004 (the “Bond Directive”), which Customs amended on July 9, 2004 and

subsequently clarified. See Monetary Guidelines for Setting Bond Amounts, Customs

Directive 3510-04 (July 23, 1991), available at http://cbp.gov/linkhandler/cgov/ toolbox/legal/

directives/3510-004.ctt/3510-004.txt; Amendment to Bond Directive 99-3510-004 for Certain

Merchandise Subject to Antidumping/Countervailing Duty Cases (July 9, 2004), available at

http://www.cbp.gov/xp/cgov/import/cargo_summary/bonds/07082004.xml; Clarification to

July 9, 2004 Amended Monetary Guidelines for Setting Bond Amounts for Special Categories of

Merchandise Subject to Antidumping and/or Countervailing Duty Cases (Aug. 10, 2005),

available at http://www.cbp.gov/xp/cgov/import/cargo_summary/ bonds/07082004.xml.

Defendants are correct in arguing that the administrative record pertaining to the Bond

Directive, as it existed on July 9, 2004, does not contain documents that were created after that

date. However, plaintiffs’ amended complaint challenges as unlawful not only the Bond

Directive, but also the application of the Bond Directive to the determinations that Customs

made to establish their individual bonding requirements. See First Am. Compl. 14, ¶ i. Because

the court was unable to conclude that documents related to the Notice will be unnecessary to the

adjudication of plaintiff’s claims, the court ordered inclusion of these documents in the

administrative record. The court continues to be unable to so conclude, not only because

plaintiffs’ claims are broader than a challenge to the Bond Directive per se, but also because

plaintiffs seek declaratory and also equitable relief, praying for a permanent injunction against

the application of the “Bond Directive” to their future imports. See id. at 14, ¶¶ ii-iii. Plaintiffs,
Court No. 05-00347 Page 6

in their amended complaint, specifically reference “Current Bond Formulas” that Customs posted

on its website on January 24, 2005, and into which, according to plaintiffs, “the Bond Directive

was incorporated.”1 Id. ¶ 12. The exact scope and content of the “Bond Directive,” as it possibly

could be applied to future imports, appears to be changing over time and is a matter that might be

resolved only as the litigation progresses. At this stage of the proceedings, the nature of any

relief to which plaintiffs may be entitled, whether as a matter of law or equity, can only be a

matter of speculation. For these reasons, the court disagrees with defendants’ argument that there

is no case or controversy concerning the Notice. The court also disagrees with defendants’

argument pertaining to ripeness and exhaustion of administrative remedies. The amended

complaint indicates that plaintiffs have been participants in proceedings to determine limits of

liability on continuous entry bonds. See id. ¶¶ 19-20, 22. The court finds no basis to conclude, at

this stage of the litigation, that the documents in question could be related only to a potential

future claim of plaintiffs that would be dismissed for lack of ripeness or for failure to exhaust

administrative remedies.

Nevertheless, the court also notes that since it issued the Order, defendants have filed

confidential records for a number of individual bond determinations, and also notes that the

question of whether a specific need for the documents related to the Notice will arise later in the

course of this litigation is also a matter of speculation. See Docket Entry No. 45 (entered

Apr. 30, 2007). Therefore, the court will exercise its discretion to modify the Order such that

1
In addition to the Notice, Customs issued other public documents affecting the subject
matter of the Bond Directive. See Seafood Exps. Ass’n of India, 31 CIT ___, ___, 479 F. Supp.
2d 1367, 1372-73 (describing issuance of “Current Bond Formulas” on January 24, 2005 and
issuance of a “Clarification” to the Bond Directive on August 10, 2005).
Court No. 05-00347 Page 7

defendants will not be burdened with the obligation to file the public documents related to the

Notice at this time. However, the court declines to rule in response to defendants’ motion for

reconsideration that the public documents associated with the Notice will not in the future be

necessary to the adjudication of plaintiff’s claims. The court will consider the need to

supplement the administrative record by the filing of these documents if circumstances and the

interest of justice so require.

Finally, the court turns to plaintiffs’ request to amend their complaint to incorporate

claims relating to the Notice, in the event that the court grants the reconsideration motion and

agrees to exclude documents related to the Notice in the filing of the administrative record. Pls.’

Opp. to Defs.’ Mot. for Recons. of this Ct.’s Mar. 13, 2007 Order ¶ 7. In considering leave to

amend a complaint, the court is to apply the standard set forth in USCIT Rule 15, which provides

that “leave shall be freely given when justice so requires.” See USCIT R. 15(a); see also Foman

v. Davis, 371 U.S. 178, 182 (1962) (providing that absent dilatory motive, undue cause for delay,

repeated failure to cure deficiencies by amendments, futility of amendment, or undue prejudice to

the opposing party, leave to amend should be liberally given). The request in plaintiffs’

opposition papers for leave to amend the complaint is insufficient to allow the court to decide the

question of whether leave to amend is warranted under the standard of Rule 15. Plaintiffs have

once amended their complaint as of right and an answer has been filed; any further amendment

may be granted only by leave of court or by written consent of the adverse party. USCIT

R. 15(a). Unless plaintiffs obtain such consent, the court will consider whether to grant leave to

amend the complaint upon the filing of a motion under USCIT Rule 15(a) for leave to amend and

a proposed amended complaint. Absent a showing of good cause as required by USCIT
Court No. 05-00347 Page 8

Rule 16(b), such a motion should be filed before the final date for amending the pleadings that is

specified in a scheduling order entered under USCIT Rule 16(b)(1). See USCIT R. 16(b). In

amending the Order, the court also is ordering the parties to confer and submit a proposed

scheduling order.

III. ORDER

Upon consideration of defendants’ motion to reconsider, plaintiff’s response thereto, and

all other submissions and proceedings herein, it is

ORDERED that defendants’ motion for reconsideration is GRANTED in part and
DENIED in part; it is further

ORDERED that the court’s March 13, 2007 order, Docket Entry No. 32, is hereby
modified to provide that defendants need not file, at this stage of the litigation, the public
documents associated with Monetary Guidelines for Setting Bond Amounts for Importations
Subject to Enhanced Bonding Requirements, 71 Fed. Reg. 62,276 (Oct. 24, 2006); it is further

ORDERED that the court’s June 19, 2007 order, Docket Entry No. 48, is modified to
provide that the administrative record for this case is deemed filed, subject to a possible future
order supplementing the administrative record with additional materials; and it is further

ORDERED that the parties confer and file a proposed scheduling order by February 8,
2008.

/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge

Dated: January 18, 2008
New York, New York