Slip Op. 10-132
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________x
:
FAG HOLDING CORPORATION, :
: Before: Nicholas Tsoucalas,
Plaintiff, : Senior Judge
:
v. : Court No. 06-00325
:
UNITED STATES OF AMERICA, :
:
Defendant. :
______________________________x
OPINION
[Granting Defendant’s Motion to Dismiss for Failure to State a
Claim]
Dated: December 8, 2010
Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP (Max F.
Schutzman, Andrew Thomas Schutz, Ned Herman Marshak, and Robert
Fleming Seely) for the plaintiff.
Tony West, Assistant Attorney General; Barbara S. Williams,
Attorney in Charge, International Trade Field Office, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice
(Alexander J. Vanderweide); Office of Assistant Chief Counsel,
International Trade Litigation, U.S. Customs and Border Protection
(Beth Brotman), of counsel, for the defendant.
Tsoucalas, Senior Judge: Plaintiff FAG Holding Corporation
brings this action pursuant to § 514 of the Tariff Act of 1930, as
amended, 19 U.S.C. § 1514 (2006),1 challenging the liquidation of
two entries by the United States Customs Service.2 See Summons.
1
All references to statutes herein are to the 2006 edition of the
United States Code. Similarly, all citations to regulations are to the
2010 edition of the Code of Federal Regulations.
2
The United States Customs Service is now U.S. Customs and Border
Protection and is herein referred to as “Customs.”
Court No. 06-00325 Page 2
Currently pending is Defendant United States’ Motion to Dismiss for
Failure to State a Claim Upon Which Relief Can be Granted, filed
according to Rule 12(b)(5) of the Rules of the United States Court
of International Trade. See Mem. in Supp. of Def.’s Mot. to
Dismiss (“Def.’s Mot. to Dismiss”) at 1. For the reasons that
follow, the Court finds in favor of Defendant and accordingly
dismisses Plaintiff’s Complaint.
JURISDICTION
Jurisdiction lies under 28 U.S.C. § 1581(a) and 19 U.S.C. §
1514(a)(3) and (5).
STANDARD OF REVIEW
Dismissal for failure to state a claim upon which relief can
be granted is appropriate only when a complaint does not “contain
sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. __, __, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)).3 In order to avoid
dismissal under Rule 12(b)(5), the “[f]actual allegations must be
enough to raise a right to relief above the speculative level . .
. on the assumption that all the allegations in the complaint are
3
USCIT Rule 12(b)(5) is directly parallel to Fed. R. Civ. P.
12(b)(6), which was the subject of Iqbal and Twombly.
Court No. 06-00325 Page 3
true (even if doubtful in fact).” Twombly, 550 U.S. at 555
(internal citations omitted).
BACKGROUND
The entries at issue, which were subject to an antidumping
duty order by the United States Department of Commerce
(“Commerce”), were imported into the United States from Canada on
April 20 and 21, 1992. See Entry No. 331-3884817-2 and Entry No.
331-3886959-0; see also Ball Bearings, Cylindrical Roller Bearings,
and Spherical Plain Bearings and Parts Thereof From the Federal
Republic of Germany, 54 Fed. Reg. 20,900 (Dep’t Commerce May 15,
1989) (the “Order”). After arrival, the merchandise was released
under a special permit for immediate delivery. See subject
entries. Corresponding entry summaries were filed with Customs on
May 4 and 5, 1992. See id. Customs liquidated the subject entries
on December 21, 2001, at an assessed antidumping duty rate of
25.62% ad valorem. See id.; Compl. ¶ 15.
In accordance with the provisions of § 1514, Plaintiff
protested the liquidation of the subject entries, which Customs
subsequently denied on March 28, 2006. See Compl. ¶¶ 16, 17.
Plaintiff then timely filed a summons with this Court on September
25, 2006, seeking reliquidation on the ground that, under 19 U.S.C.
§ 1504(d), the subject entries were deemed liquidated by operation
Court No. 06-00325 Page 4
of law years prior to the 2001 liquidation date. See id. ¶¶ 1,
19. Defendant now moves to dismiss Plaintiff’s Complaint arguing
that it contains insufficient facts to plausibly support its claim.
See Def.’s Mot. to Dismiss at 2, 6. Defendant posits that
Plaintiff has incorrectly calculated the date of entry and that
this suit is baseless because the subject entries were entered
under a special permit for immediate delivery and liquidated before
deemed liquidation would have occurred under § 1504(d). See id. at
4, 6.
ANALYSIS
“Liquidation” is the final ascertainment of duties and other
issues involved in an entry. See 19 C.F.R. § 159.1. Under
ordinary circumstances, Customs has up to one year from the “date
of entry” in which to effect liquidation. See § 1504(a); 19 C.F.R.
§ 159.11. However, in order to preserve the rights of the parties
in certain situations, liquidation may be suspended by court order
or during an administrative review of an antidumping duty order.
See 19 C.F.R. § 159.12(a)(2); see also 19 U.S.C. § 1673b(d)(2).
Once such review is completed, Commerce provides notice that the
suspension has been removed and § 1504(d) directs that Customs has
six months in which to liquidate the entry. If Customs fails to do
so, the unliquidated entry is deemed liquidated by operation of law
at the rate of duty asserted by the importer in the entry
Court No. 06-00325 Page 5
documentation. See § 1504(d).
The Federal Circuit has held that a valid claim of liquidation
by operation of law under § 1504(d) must satisfy the following
elements: (1) the suspension of liquidation formerly in place was
terminated; (2) Customs was notified that such suspension was
removed; and (3) notwithstanding such notice, Customs failed to
liquidate the entry within six months. See Fujitsu Gen. Am., Inc.
v. United States, 283 F.3d 1364, 1376 (Fed. Cir. 2002). First, the
Court must ascertain when the six-month period began to run. In
order to do so, the Court must first determine the date which
suspension of the subject entries was terminated under the first
element. This determination is contingent on which administrative
period was under review at the time. Ascertaining the controlling
period of review, in turn, relies on the “date of entry,” as
defined by the regulations. Therefore, establishing the correct
date of entry is a critical link in the chain of the components in
a claim for deemed liquidation. Depending on the date of entry
asserted in a complaint, such a claim might not be factually
“plausible.” Iqbal, 129 S.Ct. at 1949.
Plaintiff’s argument rests on the assumption that the date of
entry for the subject merchandise was April 20 and 21, 1992. See
Compl. ¶ 6 (the subject merchandise was “entered into the United
Court No. 06-00325 Page 6
States for consumption on April 20 and April 21, 1992").
Consequently, Plaintiff asserts that liquidation of the subject
merchandise was suspended under the administrative review of the
Order covering May 1, 1991, through April 30, 1992 (the “91–92
Review”).4 Under this line of reasoning, Commerce’s promulgation
of the amended final results on April 16, 1998, served as the
requisite notice to Customs, commencing the six-month period for
liquidation. See Compl. ¶¶ 11–12. Accordingly, Plaintiff
maintains that Customs’s actual liquidation was beyond the six-
month deadline to liquidate any entries subject to the 91-92
Review, thus rendering Customs’s December 21, 2001, liquidation
“null and void.” Id. ¶¶ 13–15. As a result, Plaintiff concludes
that the entries were deemed liquidated on October 16, 1998, at
3.9% ad valorem, the duty rate asserted by Plaintiff in the entry
documentation. See id. ¶¶ 13, 16.
Although Plaintiff’s allegations superficially satisfy the
elements of § 1504(d), the Complaint is not supported by plausible
4
Although Commerce published the conclusion of this review on July
26, 1993, Final Results of Antidumping Duty Administrative Reviews and
Revocation in Part of an Antidumping Duty Order, 58 Fed. Reg. 39,729
(Dep’t Commerce July 26, 1993), the final results were subsequently
litigated, prolonging suspension of liquidation for the subject entries
until the Court rendered its final determination in Federal-Mogul Corp.
v. United States, 20 CIT 1438, 950 F.Supp. 1179 (1996). Amended final
results of the 91–92 Review were published in the Federal Register on
April 16, 1998. See Antifriction Bearings (Other Than Tapered Roller
Bearings) and Parts Thereof, 63 Fed. Reg. 18,877 (Dep’t Commerce Apr. 16,
1998) (amended final results).
Court No. 06-00325 Page 7
facts and thus fails as a matter of law. Determining the
plausibility of a claim is a “context-specific task that requires
the reviewing court to draw on its judicial experience and common
sense.” Iqbal, 129 S.Ct at 1950 (internal citation omitted). A
complaint does not exist in a vacuum but rather must be congruent
with the truth of what actually occurred. Here, the best
reflection of what occurred is found in the physical entry
documents for Entry No. 331-3884817-2 and Entry No. 331-3886959-0,
which are central to these claims.5
Since the entry documents show that the subject entries were
imported pursuant to a special permit for immediate delivery,
reference to the Customs regulations is illuminating in determining
the date of entry. See generally 19 C.F.R. §§ 142.21–142.29; see
also 19 U.S.C. § 1448(b). Customs defines “entry” not as the
arrival of a particular shipment of goods at the port (as it may be
5
Normally, when considering a motion to dismiss, the court is limited
to the facts alleged on the face of a complaint and documents
incorporated by reference or appended thereto. See Globe Metallurgical
Inc. v. United States, 31 CIT 1722, 1723, 530 F.Supp. 2d 1343, 1345
(2007). However, any matters integral to a claim or upon which it is
based may be considered without converting it to summary judgment under
USCIT Rule 12(d). See Int’l Audiotext Network v. Am. Tel. & Tel. Co.,
62 F.3d 69 (2nd Cir. 1995).
In contrast, Plaintiff attaches to its response documents outside
the pleadings, invoking USCIT Rule 12(d) for the proposition that the
Court is “required to treat defendant’s motion as one for summary
judgment.” Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss at 4. However,
it is well-settled that a court retains discretion to exclude matters
outside the pleadings and, if such matters are excluded, conversion to
summary judgment is not required. See Carter v. Stanton, 405 U.S. 669
(1972); Hall v. Bellmon, 935 F.2d 1106 (10th Cir. 1991).
Court No. 06-00325 Page 8
considered colloquially), but rather as the formal filing of
required documentation in order to secure the release of imported
merchandise from Customs’s custody and assess the proper amount of
duties. See 19 C.F.R. § 141.0a(a); see also Lowa, Ltd. v. United
States, 5 CIT 81, 85–86, 561 F.Supp. 441, 445 (1983) (in Customs
usage, the word “entry” is a “term of art”), aff’d 724 F.2d 121
(Fed. Cir. 1984). See generally U.S. Customs and Border
Protection, What Every Member of the Trade Community Should Know
About Entry (March 2004).
Goods admitted under the immediate delivery process are
released into United States commerce prior to the conclusion of
formal entry procedures. In most respects, immediate delivery is
similar to ordinary entry, the critical difference being the method
of determining the date of entry. Under most entry procedures, the
date of entry is usually the date of release. See 19 C.F.R. §
141.68. However, this is not the case for entries admitted under
immediate delivery, in which case § 141.68(c) directs that “[t]he
time of entry of merchandise released under the immediate delivery
procedure will be the time the entry summary is filed in proper
form, with estimated duties attached.” (emphasis added).
Therefore, applying § 141.68(c), the controlling dates of entry are
May 4 and 5, 1992—the dates that the entry summaries were filed.
The entry summary documents themselves list both the “Entry Date”
Court No. 06-00325 Page 9
and “Entry Summary Date” as either May 4 or May 5, accordingly.
See entry summaries at Box 3, 4.
Plaintiff’s argument that the dates of entry were April 20 and
21, 1992, the dates that the subject goods were entered into the
United States for consumption or, alternatively, the dates that the
subject goods were authorized for release, is squarely at odds with
the regulatory language governing these facts. 19 C.F.R. §
142.22(b) provides that merchandise entered under a special permit
for immediate delivery is considered to remain in Customs’s
custody, despite physical release, until the timely filing of an
entry summary with duties attached. Thus, read together, §
141.68(c) and § 142.22(b) designate that the time of release and
the time of entry are independent events in the immediate delivery
context. The regulation cannot reasonably be construed otherwise,
nor does Plaintiff cite any authority in support of its
interpretation. Applying the standard set forth in Iqbal and
Twombly, the Court cannot establish that Plaintiff’s supporting
facts plausibly entitle it to relief within this framework.
While all of the factual allegations in a complaint are taken
as true in a motion to dismiss, any “[t]hreadbare recitals of the
elements of a cause of action supported by mere conclusory
statements do not suffice.” Iqbal, 129 S.Ct. at 1949–50 (internal
Court No. 06-00325 Page 10
citation omitted). Plaintiff’s assertion that the dates of entry
are April 20 and 21, 1992, is not a fact in dispute, but instead is
a “legal conclusion” that, as such, is not entitled to the
presumption of truth. See id.
The Court’s ultimate task is to determine whether Plaintiff is
entitled to offer evidence in support of its claim—not whether
Plaintiff will prevail on the merits. See Int’l Custom Prods.,
Inc. v. United States, 32 CIT __, __, 549 F.Supp. 2d 1384, 1397
(2008). As a matter of law, there is no “reasonable expectation”
that discovery will reveal anything and thus the pleadings do not
provide a basis to infer that Plaintiff can plausibly prove its
claim in subsequent stages of litigation. See Totes-Isotoner Corp.
v. United States, 32 CIT __, __, 569 F.Supp. 2d 1315, 1328 (2008)
(citing Twombly, 550 U.S. at 556), aff’d, 594 F.3d 1346 (Fed. Cir.
2010). A deficient claim should be “exposed at the point of
minimum expenditure of time and money by the parties and the
court.” Twombly, 550 U.S. at 558 (internal quotation omitted). A
dismissal here is consistent with the Court’s paramount mandate to
secure the just, speedy, and inexpensive determination of every
action. See USCIT R. 1.
Since the proper dates of entry were May 4 and 5, 1992, the
subject entries were encompassed by Commerce’s May 1, 1992, through
Court No. 06-00325 Page 11
April 30, 1993, period of review (the “92–93 Review”) and the
subject entries remained suspended until November 16, 2002, when
Commerce published its amended final results.6 Under § 1504(d),
Customs had until May 16, 2002, in which to liquidate any entries
subject to Commerce’s 92–93 Review prior to deemed liquidation by
operation of law. Thus, the subject entries were properly
liquidated on December 21, 2001, well within the six-month
deadline. Therefore, the subject entries were timely liquidated
with assessed antidumping duties in full compliance with § 1504(d).
6
Commerce’s final determination, Antifriction Bearings (Other Than
Tapered Roller Bearings) and Parts Thereof, 60 Fed. Reg. 10,900 (Dep’t
Commerce Feb. 28, 1995), was affirmed by the Court of Appeals in SKF USA,
Inc. v. INA Walzlager Schaeffler KG, 180 F.3d 1370 (Fed. Cir. 1999).
Commerce subsequently published the amended final results in Antifriction
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From
Germany, 66 Fed. Reg. 57,704 (Dep’t Commerce Nov. 16, 2001) (amended
final results).
Court No. 06-00325 Page 12
CONCLUSION
After reviewing the sufficiency of the Complaint, the Court
holds that Plaintiff is unable to plausibly plead its claim as a
matter of law. Defendant’s motion to dismiss under USCIT Rule
12(b)(5) is granted and this action is hereby dismissed.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: December 8, 2010
New York, New York