Slip Op. 06-175
UNITED STATES COURT OF INTERNATIONAL TRADE
CONSOLIDATED FIBERS, INC., STEIN FIBERS,
LTD., BERNET INTERNATIONAL TRADING,
LLC, AND BMT COMMODITY CORPORATION,
Before: Leo M. Gordon, Judge
Plaintiffs,
Court No. 06-00134
v.
UNITED STATES,
Defendant.
OPINION AND ORDER
[Motions to dismiss denied.]
Dated: November 30, 2006
deKieffer & Horgan (Gregory S. Menegaz, Merritt R. Blakeslee, J. Kevin Horgan)
for the Plaintiffs Consolidated Fibers, Inc., Stein Fibers, Ltd., Bernet International
Trading, LLC, and BMT Commodity Corporation.
James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel
for Litigation, Karl von Schriltz, Attorney-Advisor, United States International Trade
Commission, for the Defendant.
Kelly Drye Collier Shannon (Paul C. Rosenthal, Kathleen W. Cannon,
David C. Smith, Jr.) for the Defendant-Intervenors Dak Fibers, LLC, Invista S.a.r.l., and
Wellman, Inc.
Gordon, Judge: Defendant and Defendant-Intervenors move to dismiss count
two of Plaintiffs’ complaint for lack of subject matter jurisdiction pursuant to
USCIT R. 12(b)(1), and for failure to state a claim upon which relief can be granted
pursuant to USCIT R. 12(b)(5). For the reasons set forth below, the motions are
denied.
Court No. 06-00134 Page 2
I. Background
During the five-year (“sunset”) reviews of the antidumping duty orders on
polyester staple fiber (“PSF”) from Korea and Taiwan, Plaintiffs requested that the
United States International Trade Commission (“Commission”) institute a proceeding to
reconsider the original PSF injury determinations because of new evidence that certain
domestic producers conspired to fix PSF prices and allocate customers during the
original period of investigation and part of the review period. Letter dated Oct. 26, 2005
from deKieffer & Horgan to Secretary Abbott at 2-3, 18-22, (“Reconsideration Request”),
Certain Polyester Staple Fiber from Korea and Taiwan, Inv. Nos. 731-TA-825-826.
Plaintiffs argued that this conspiracy had compromised the integrity of the Commission’s
original investigations and that the Commission should therefore institute a
reconsideration proceeding and revoke the antidumping duty orders ab initio. Id.
Plaintiffs believed there were “striking and highly relevant parallels” between the
alleged PSF antitrust conspiracy and the Commission’s reconsideration proceeding in
Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela , Inv.
Nos. 303-TA-23, 731-TA-566-570 and 731-TA-641 (reconsideration), USITC Pub. 3218
(Aug. 1999) (“Ferrosilicon”). Reconsideration Request at 3. In Ferrosilicon, the
Commission reconsidered original injury determinations underlying a countervailing duty
order covering ferrosilicon from Venezuela, and antidumping duty orders covering
ferrosilicon from Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela.
Ferrosilicon began with a petition pursuant to Section 751(b) of the Tariff Act of 1930, as
Court No. 06-00134 Page 3
amended, 19 U.S.C. § 1675(b) (2000).1 The Brazilian ferrosilicon importers requested a
changed circumstances review of the Commission’s material injury determination on
Brazilian ferrosilicon because of new evidence of a price-fixing conspiracy among
domestic producers. The Commission instituted the requested changed circumstances
review and self-initiated changed circumstances reviews of the related material injury
determinations for ferrosilicon from China, Kazakhstan, Russia, Ukraine, and
Venezuela. Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and
Venezuela, 63 Fed. Reg. 40,314 (Int’l Trade Comm’n July 28, 1998) (notice of changed
circumstances reviews).
The Commission subsequently suspended these changed circumstances
reviews, determining that “reconsideration” was a more appropriate procedure for
review of the original determinations than a changed circumstances review.
Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, 64 Fed.
Reg. 28,212 (Int’l Trade Comm’n May 25, 1999) (notice of suspension of changed
circumstances review and commencement of reconsideration proceeding). Thereafter,
the Commission reversed its original affirmative material injury determinations ab initio
and issued a negative injury determination for each of the original investigations.
Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, 64 Fed.
Reg. 47,865, 47,865-66 (Int’l Trade Comm’n Sept. 1, 1999); USITC Pub. 3218 at 1.
The Commission concluded on reconsideration that the domestic industry had never
1
All further citations to the Tariff Act of 1930 are to the relevant provision in Title 19 of
the U.S. Code, 2000 edition.
Court No. 06-00134 Page 4
been materially injured, or threatened with material injury by reason of the ferrosilicon
imports. USITC Pub. 3218 at 4.
In accordance with the Commission's action, Commerce “rescinded” the
antidumping and countervailing duty orders covering the subject imports, explaining that
the Commission's negative injury determinations on reconsideration had “rendered [the
orders] legally invalid from the date of issuance.” Ferrosilicon From Brazil, Kazakhstan,
People's Republic of China, Russia, Ukraine, and Venezuela, 64 Fed. Reg. 51,097,
51,098 (Dep’t of Commerce Sept. 21, 1999) (notice of rescission of antidumping duty
orders).
Despite some apparent parallels of the antitrust activity among the domestic
producers of ferrosilicon and the antitrust activity among the domestic producers of
PSF, the Commission preliminarily denied Plaintiffs’ reconsideration request. Plaintiffs,
however, continued to argue in the on-going sunset reviews that the alleged price-fixing
and customer allocation conspiracy had compromised the integrity of the Commission’s
original PSF investigation and injury determinations. Certain Polyester Staple Fiber
from Korea and Taiwan, Inv. Nos. 731-TA-825-826 (Review), USITC Pub. 3843 at 16-
22 (Mar. 2006). In response, petitioners—Defendant-Intervenors here—argued that
Plaintiffs’ price-fixing allegations related only to a PSF product known as “fine denier”
PSF, which is not subject to the antidumping orders on PSF from Korea and Taiwan.
Id. at 17-18.
The Commission conducted a public hearing on January 17, 2006, in which
interested parties provided testimony and answered Commission questions on the
Court No. 06-00134 Page 5
alleged antitrust conspiracy. On March 20, 2006, the Commission issued its final
decision on Plaintiffs’ reconsideration request (together with its final views in the sunset
review of PSF from Korea and Taiwan), explaining that a reconsideration proceeding
was not warranted. Id. at 16-23.
Count two of Plaintiffs’ complaint challenges the Commission’s decision not to
revoke the original injury determinations ab initio, and by extension, the denial of
Plaintiffs’ reconsideration request. Defendant and Defendant-Intervenors move to
dismiss count two of Plaintiffs’ complaint for lack of subject matter jurisdiction and for
failure to state a claim upon which relief can be granted.
II. Standard of Review
In deciding a USCIT R. 12(b)(1) motion that does not challenge the factual basis
for the complainant's allegations, and when deciding a USCIT R. 12(b)(5) motion to
dismiss for failure to state a claim upon which relief can be granted, the court assumes
all factual allegations to be true and draws all reasonable inferences in plaintiff’s favor.
Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583-84 & n.13 (Fed. Cir. 1993);
Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995) (subject matter jurisdiction);
Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991) (failure to state a
claim).
III. Discussion
A. Subject Matter Jurisdiction
Plaintiffs assert jurisdiction for count two of their complaint under 28 U.S.C.
§ 1581(c) (2000) or 28 U.S.C. § 1581(i) (2000).
Court No. 06-00134 Page 6
1. 28 U.S.C. § 1581(c)
Section 1581(c) provides the Court of International Trade with jurisdiction to
review certain Commission antidumping determinations listed in 19 U.S.C. § 1516a(a).
Plaintiffs contend that the Commission’s denial of their reconsideration request “is
subsumed within, and inseparable from” the Commission’s final PSF sunset
determination, which is one such reviewable determination pursuant to 19 U.S.C.
§ 1516a(a)(2)(B)(iii). (Pls.’ Opp’n to Mot. to Dismiss at 6.) Although the Commission
must take into account “its prior injury determinations” when conducting a sunset
review, 19 U.S.C. § 1675a(a)(1)(A), that undertaking is not equivalent to a full-blown
reconsideration of the underlying injury determination.
While it made sense for the Commission to consolidate Plaintiffs’ reconsideration
request with the ongoing sunset review for administrative efficiency, Plaintiffs are not
correct that the final sunset determination and the final denial of Plaintiffs’
reconsideration request are one in the same for purposes of judicial review. They are
not. Different standards of review apply to each. The Commission’s final sunset
determination is reviewed under the substantial evidence standard. 19 U.S.C.
§ 1516a(b)(1)(B)(i). The Commission’s denial of Plaintiffs’ reconsideration request, if
reviewable at all, is reviewed under the more deferential abuse of discretion standard.
28 U.S.C. § 2640(e) (2000); 5 U.S.C. § 706(2)(A) (2000); ICC v. Bhd. of Locomotive
Eng’rs, 482 U.S. 270, 278 (1987) (“the basis for challenge must be that the refusal to
reopen was ‘arbitrary, capricious, [or] an abuse of discretion.’ 5 U.S.C. § 706(2)(A).”).
Accordingly, the court’s jurisdictional basis for review of the Commission’s final sunset
Court No. 06-00134 Page 7
determination pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C.
§ 1516a(a)(2)(B)(iii) does not extend to review of the Commission’s denial of Plaintiffs’
reconsideration request.
Plaintiffs alternatively contend that the Commission’s denial of their
reconsideration request falls within the scope of section 1516a(a)(2)(B)(i), which
identifies other reviewable Commission determinations, specifically “[f]inal affirmative
determinations by . . . the Commission under section . . . 1673d of this title, including
any negative part of such a determination . . . .” The Commission’s denial of Plaintiffs’
reconsideration request, however, is not a final affirmative determination under
section 1673d, and therefore section 1516a(a)(2)(B)(i) does not cover Plaintiffs’ claim.
Had the Commission commenced a reconsideration proceeding, then the
resulting reconsideration determination would have been reviewable under 28 U.S.C.
§ 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(i) or § 1516a(a)(2)(B)(ii). See Bhd. of
Locomotive Eng’rs, 482 U.S. at 278 (“When the Commission reopens a proceeding for
any reason and, after reconsideration, issues a new and final order setting forth the
rights and obligations of the parties, that order—even if it merely reaffirms the rights and
obligations set forth in the original order—is reviewable on its merits”); see, e.g., Elkem
Metals Co. v. United States, 26 CIT 234, 238, 193 F. Supp. 2d 1314, 1319 (2002)
(asserting jurisdiction over reconsideration results pursuant to 19 U.S.C.
§ 1516a(a)(2)(B)(ii)). Admittedly, the Commission explained its reasons for denying the
reconsideration request in sufficient detail that one might conclude that the Commission
“did indeed give the case a second look (and thereby ‘reconsidered’ in a dictionary
Court No. 06-00134 Page 8
sense).” Betty B. Coal Co. v. United States Dep’t of Labor, 194 F.3d 491, 496 (4th Cir.
1999). But in Brotherhood of Locomotive Engineers, the Supreme Court drew a bright
line for courts to distinguish appealable reaffirmations from unappealable denials: the
agency's “formal action” controls.
It is irrelevant that the [agency’s] order refusing reconsideration discussed
the merits of the [movants'] claims at length. Where the [agency's] formal
disposition is to deny reconsideration, and where it makes no alteration in
the underlying order, we will not undertake an inquiry into whether
reconsideration “in fact” occurred. In a sense, of course, it always occurs,
since one cannot intelligently rule upon a petition to reconsider without
reflecting upon, among other things, whether clear error was shown. It
would hardly be sensible to say that the [agency] can genuinely deny
reconsideration only when it gives the matter no thought; nor to say that
the character of its action (as grant or denial) depends upon whether it
chooses to disclose its reasoning. Rather, it is the [agency's] formal action,
rather than its discussion, that is dispositive.
Bhd. of Locomotive Eng’rs, 482 U.S. at 280-281.
Here, the Commission did not reconsider the original injury determinations, but
instead denied Plaintiffs’ reconsideration request. Thus, the Court of International
Trade does not have jurisdiction under 28 U.S.C. § 1581(c) (2000) to hear count two of
Plaintiffs’ complaint.
2. 28 U.S.C. § 1581(i)
Plaintiffs have also asserted jurisdiction under the Court of International Trade’s
residual jurisdictional provision, 28 U.S.C. § 1581(i), which provides a general grant of
jurisdiction over civil actions commenced against the Commission arising out of the
“administration and enforcement” of the antidumping laws. See 28 U.S.C.
§ 1581(i)(2) & (4) (2000). Section 1581(i) may attach, though, only if a remedy under
another section of 1581 is unavailable, see Miller & Co. v. United States, 824 F.2d 961,
Court No. 06-00134 Page 9
963 (Fed. Cir. 1987), a requisite satisfied in this case because section 1581(c), the only
other potential jurisdictional provision, is unavailable.
Among other things, section 1581(i) supplies jurisdiction for Administrative
Procedure Act (“APA”) claims challenging the administration and enforcement of the
antidumping laws by either the Commission or the United States Department of
Commerce. See, e.g., Shinyei Corp. of Am. v. United States, 355 F.3d 1297, 1309
(Fed. Cir. 2004) (“The case at bar is an action under the APA challenging Commerce
instructions as in violation of section 1675(a)(2)(C).”). Although Plaintiffs’ complaint
does not expressly state that they are challenging the Commission’s denial of Plaintiffs’
reconsideration request under the APA, Defendant and Defendant-Intervenors have
construed count two of Plaintiffs complaint to be such an action, which Plaintiffs have
not disputed. Defendant and Defendant-Intervenors further contend that the
Commission’s denial of Plaintiffs’ reconsideration request is not reviewable because
there are no statutory or regulatory provisions governing a reconsideration proceeding
and it is therefore an “agency action . . . committed to agency discretion by law,”
5 U.S.C. § 701(a)(2) (2000), a jurisdictional limitation for APA claims that applies to the
general grant of jurisdiction contained in 28 U.S.C. § 1581(i) (2000). Cf. Bhd. of
Locomotive Eng’rs, 482 U.S. at 282 (noting that the limitation of 5 U.S.C. § 701(a)(2)
applies to “the general grant of jurisdiction contained in 28 U.S.C. § 1331” and “the
Hobbs Act as well”).
The general rule is that an agency's denial of a petition for reconsideration is
committed to agency discretion and not subject to judicial review unless the request is
Court No. 06-00134 Page 10
based on “new evidence or changed circumstances,” in which case the court evaluates
whether “the refusal to reopen was ‘arbitrary, capricious, [or] an abuse of discretion.’”
Id. at 278-79 (quoting 5 U.S.C. § 706(2)(A)); see also, AT&T Corp. v. FCC, 363 F.3d
504, 507-08 (D.C. Cir. 2004); Southwestern Bell Tel. Co. v. FCC, 180 F.3d 307, 311
(D.C. Cir. 1999) (“a petition seeking review of an agency's decision not to reopen a
proceeding is not reviewable unless the petition is based upon new evidence or
changed circumstances.”). Put another way, “[i]f the petition that was denied sought
reopening on the basis of new evidence or changed circumstances, review is available
and abuse of discretion is the standard; otherwise, the agency's refusal to go back over
ploughed ground is nonreviewable.” Bhd. of Locomotive Eng’rs, 482 U.S. at 284.
The Court in Brotherhood of Locomotive Engineers was interpreting the
Interstate Commerce Act, which contained three grounds for rehearing: "material error,
new evidence, or substantially changed circumstances." 482 U.S. at 277 (citing
49 U.S.C. § 10327(g), current version at 49 U.S.C. § 722(c) (2000)). Under the
antidumping laws, the Commission has express statutory authorization to review its
prior injury determinations upon the request of a party for a “changed circumstances”
review. 19 U.S.C. § 1675(b). An interested party, in turn, has an express statutory right
of judicial review (as opposed to an APA claim) if the Commission refuses to initiate a
changed circumstances proceeding. 19 U.S.C. § 1516a(a)(1)(B). The court evaluates
whether the refusal to initiate was “arbitrary, capricious, [or] an abuse of discretion,”
19 U.S.C. § 1516a(b)(1)(A), the same standard applied when reviewing a denial of a
reconsideration request under the APA for “new evidence or changed circumstances.”
Court No. 06-00134 Page 11
Plaintiffs here did not request a changed circumstances review because they were
heeding the Commission’s approach in Ferrosilicon. Plaintiffs therefore requested that
the Commission commence a reconsideration proceeding to evaluate the new evidence
relating to the antitrust activity of some members of the domestic industry, just as the
Commission had done in Ferrosilicon.
Unlike the statutory provisions for a changed circumstances review, there is no
express statutory authorization for the Commission to conduct a reconsideration
proceeding. The Commission, however, has inherent administrative authority under the
antidumping and countervailing duty laws to reconsider its original injury determinations,
at least when fraud has been perpetrated on the agency during the underlying
investigations. See Elkem Metals Co., 26 CIT at 240, 193 F. Supp. 2d at 1321
(reviewing Ferrosilicon); see also Alberta Gas Chems., Ltd. v. Celanese Corp.,
650 F.2d 9, 12-14 (2d Cir. 1981) (“It is hard to imagine a clearer case for [the
Commission] exercising this inherent power than when a fraud has been perpetrated on
the tribunal in its initial proceeding.”). Under Brotherhood of Locomotive Engineers, the
Commission’s denial of a reconsideration request is unreviewable unless the request is
based on new evidence, in which case the court has jurisdiction pursuant to 28 U.S.C.
§ 1581(i) (2000) to review the denial under the abuse of discretion standard set forth in
5 U.S.C. § 706(2)(A) (2000).
B. Failure to State a Claim upon which Relief can be Granted
Defendant and Defendant-Intervenors have also moved to dismiss count two of
Plaintiffs’ complaint for failure to state a claim upon which relief can be granted. In their
Court No. 06-00134 Page 12
complaint Plaintiffs challenged the Commission’s failure to revoke the PSF antidumping
duty orders ab initio. Compl. ¶¶ 7 & 25. Defendant and Defendant-Intervenors correctly
note that the antidumping statute authorizes only the Department of Commerce to
revoke antidumping orders, not the Commission. Def.-Intervenors’ Reply Br. at 3 (citing
19 U.S.C. § 1675(d)), Def.’s Reply Br. at 13. Therefore, to the extent count two of
Plaintiffs’ complaint seeks ab initio revocation of the antidumping duty orders by the
Commission, Plaintiffs seek relief that cannot be granted.
The Commission, however, may revoke its original injury determinations. See
Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, 64 Fed.
Reg. 47,865, 47,865-66 (Int’l Trade Comm’n Sept. 1, 1999); USITC Pub. 3218 at 1;
Elkem Metals Co., 26 CIT at 240, 193 F. Supp. 2d at 1321 (reviewing Ferrosilicon). If it
does, then Commerce revokes the antidumping duty order. See Ferrosilicon From
Brazil, Kazakhstan, People's Republic of China, Russia, Ukraine, and Venezuela,
64 Fed. Reg. 51,097, 51,098 (Dep’t of Commerce Sept. 21, 1999) (notice of rescission
of antidumping duty orders) (Commission’s revocation of original injury determinations
“rendered [the orders] legally invalid from the date of issuance.”).
At a conference held on November 29, 2006, Plaintiffs’ moved to amend their
complaint to replace the words “antidumping duty orders” in ¶ 7 and the word “orders” in
¶ 25 with the words “injury determinations” respectively. The court subsequently
granted the motion, curing the defect in their complaint. At the conference the court
inquired whether this amendment mooted Defendant and Defendant-Intervenors’
motions to dismiss for failure to state a claim upon which relief can be granted.
Court No. 06-00134 Page 13
Defendant and Defendant-Intervenors argued that it did not, and that there was
still no claim upon which relief can be granted because there is no statutory or
regulatory guidance for the court to review the agency’s denial of Plaintiffs’
reconsideration request. These arguments though, do not address Plaintiffs’ purported
failure to state a claim, but rather go to the question of subject matter jurisdiction over
Plaintiffs’ APA claim, which is addressed above. The court may not dismiss Plaintiffs’
claim “unless it appears beyond doubt that [they] can prove no set of facts in support of
[their] claim which would entitle [them] to relief.” Conley v. Gibson, 355 U.S. 41, 45-46
(1957). Here, Plaintiffs are seeking the relief the Commission granted in Ferrosilicon.
The first step for Plaintiffs is to overcome the denial of their reconsideration request.
Toward that end, Plaintiffs have sufficiently plead an APA claim for which some relief is
possible, namely, a finding that the Commission abused its discretion in denying the
reconsideration request. Therefore, count two of Plaintiffs’ complaint must survive
Defendant and Defendant-Intervenors’ Rule 12(b)(5) motions to dismiss.
IV. Conclusion
The court has jurisdiction under 28 U.S.C. § 1581(i) (2000) to hear Plaintiffs’ APA
claim that the Commission abused its discretion in denying Plaintiffs’ reconsideration
request, which was based on the newly discovered antitrust activity of members of the
domestic PSF industry during the original period of investigation. To overturn that
denial, Plaintiffs must show “‘the clearest abuse of discretion,’” Bhd. of Locomotive
Eng’rs, 482 U.S. at 278 (quoting United States v. Pierce Auto Freight Lines, Inc.,
Court No. 06-00134 Page 14
327 U.S. 515, 534-535 (1946)). Accordingly, the court denies Defendant and
Defendant-Intervenors’ motions to dismiss.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: New York, New York
November 30, 2006