Norsk Hydro Canada Inc. v. United States

Slip Op. 04-129
United States Court of International Trade

NORSK HYDRO CANADA INC.,

Plaintiff, Before: Pogue, Judge
v.
Court No. 03-00828
UNITED STATES,

Defendant,

and

U.S. MAGNESIUM, LLC,

Defendant-Intervenor.

[Defendant’s Motion to Dismiss denied.]

Decided: October 12, 2004

Steptoe & Johnson LLC (Eric C. Emerson, Gregory S. McCue, Meredith
A. Rathbone) for Plaintiff Norsk Hydro Canada Inc.

Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, Jeanne E. Davidson, Deputy Director, Stephen C. Tosini,
Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, Jonathan J. Engler, Attorney-Advisor, Office
of Chief Counsel for Import Administration, U.S. Department of
Commerce, Of Counsel, for Defendant.

King & Spalding, LLP (Stephen A. Jones, Joseph W. Dorn, Jeffrey M.
Telep) for Defendant-Intervenor U.S. Magnesium, LLC.

OPINION

POGUE, Judge: This is a dispute over the calculation and

collection of countervailing duties on pure and alloy magnesium

that Plaintiff imported into the United States. The Defendant

United States Department of Commerce (“Commerce”) declined, during

an administrative review of Plaintiff’s entries of pure and alloy
Court No. 03-00828 Page 2

magnesium, to recognize Plaintiff’s overpayment of countervailing

duties. Plaintiff brings this action under 19 U.S.C. § 1581(c)

(2000), challenging Commerce’s decision as not in accordance with

law. Specifically, Plaintiff claims that 19 U.S.C. § 1671(a)

requires Commerce to recognize and offset Plaintiff’s overpayment

so that the total duties imposed over time equal the net

countervailable subsidy. Defendant moves to dismiss Plaintiff’s

complaint for lack of subject matter jurisdiction under 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). Def.’s Mot. Dismiss at 5.

Because jurisdiction is proper under § 1581(c) and Plaintiff has

properly alleged that Commerce acted not in accordance with law,

the Court denies Defendant’s motion.

BACKGROUND1

In 1992, the government of the United States determined that

Plaintiff, Norsk Hydro Canada Inc., (“NHCI”), received two non-

recurring countervailable grants from Canada; the grants created a

fixed total net subsidy amount to be countervailed. Pure Magnesium

and Alloy Magnesium From Canada, 57 Fed. Reg. 39,392 (Dep’t

Commerce Aug. 31, 1992) (countervailing duty orders); Compl. of

1
For purposes of its motion to dismiss, the government
accepts the facts as alleged in paragraphs four through ten of
Plaintiff’s complaint. Def.’s Mot. Dismiss at 3.
Court No. 03-00828 Page 3

NHCI at para 4. Commerce amortized the non-recurring grants over

a fourteen year period and calculated an amount to be countervailed

each year. Compl. of NHCI at para 4. Commerce has conducted

annual administrative reviews of the amount of the countervailing

duty. See 19 U.S.C. 1675(a).2

Throughout 1997, Plaintiff imported pure and alloy magnesium

that was subject to various countervailing duty (CVD) cash deposit

2
The text of 19 U.S.C. § 1675(a) states, in relevant part:

(a) Periodic review of amount of duty

(1) In general

At least once during each 12-month period beginning on the
anniversary of the date of publication of a countervailing
duty order under this subtitle or under section 1303 of this
title, an antidumping duty order under this subtitle or a
finding under the Antidumping Act, 1921, or a notice of the
suspension of an investigation, the administering authority,
if a request for such a review has been received and after
publication of notice of such review in the Federal Register,
shall—
(A) review and determine the amount of any net
countervailable subsidy,
(B) review, and determine (in accordance with paragraph
(2)), the amount of any antidumping duty, and
(C) review the current status of, and compliance with,
any agreement by reason of which an investigation was
suspended, and review the amount of any net
countervailable subsidy or dumping margin involved in the
agreement,

and shall publish in the Federal Register the results of such
review, together with notice of any duty to be assessed,
estimated duty to be deposited, or investigation to be
resumed.

19 U.S.C. § 1675(a).
Court No. 03-00828 Page 4

rates, depending on the date of each entry. Compl. at para. 5.3 On

September 8, 1999, Commerce published the Final Results of its

administrative review covering the 1997 entries. Pure Magnesium

and Alloy Magnesium From Canada, 64 Fed. Reg. 48,805 (Dep’t

Commerce Sept. 8, 1999) (final results of countervailing duty

administrative reviews). The results of the administrative review

determined that countervailing duties should be assessed at 2.02%

on Plaintiff’s 1997 entries of pure and alloy magnesium. Id. at

48,806. Commerce then issued instructions to the United States

Bureau of Customs and Border Protection (“Customs”)4 to that

effect. Compl. of NHCI at para. 5. Customs sent an e-mail to all

Customs ports of entry containing Commerce’s liquidation

instructions. Id.; Customs Message No. 9342201, Pl.’s Ex. 3 (Dec.

8, 1999). However, in September 2000 and February 2001, Customs

officials at Port Huron issued a notice of liquidation for

Plaintiff’s 1997 entries, advising that liquidation had occurred at

the higher cash deposit rates rather than at the 2.02% final

3
These rates varied from 3.18% to 7.61%. See Compl. Of NHCI
at para. 5.
4
Effective March 1, 2003, the United States Customs Service
was renamed the United States Bureau of Customs and Border
Protection. See Homeland Security Act of 2002, Pub. L. No. 107-
296 §1502, 2002 U.S.C.C.A.N. (116 Stat.) 2135, 2308;
Reorganization Plan Modification for the Department of Homeland
Security, H.R. Doc. No. 108-32, at 4 (2003).
Court No. 03-00828 Page 5

assessment rate.5 Compl. of NHCI at para. 6; see also Liquidation

Notices, Attach. 1 to Pl.’s Resp. to Ct. Order (“Pl.’s Supp. Br.”).

During the administrative review of Plaintiff’s 2001 entries,

Plaintiff provided a spreadsheet listing of each 1997 entry

wrongfully liquidated by Customs, and calculated the amount of

excess countervailing duties, plus interest, retained by the U.S.

government as of the date of the spreadsheet.6 Compl. of NHCI at

para. 7. Plaintiff requested that Commerce adjust its 2001

countervailing duty final results to account for this over

imposition of countervailing duties. Id. However, Commerce claimed

that the issue was not properly before it for review and that it

lacked the authority to address this issue, asserting that Customs’

erroneous liquidation should have been protested to Customs. Pure

Magnesium and Alloy Magnesium from Canada, 68 Fed. Reg. 25,339,

5
NHCI states that it received courtesy copies of the
liquidation notices by mail at most a few weeks after the
notices’ issuance in September 2000 and February 2001. See Pl.’s
Response to Court Order at 2 (“Pl.’s Supp. Br.”). The notices
themselves are unclear as to whether they constitute only a late
acknowledgment that liquidation by operation of law had taken
place or whether they mean to convey Customs’ intention to
actively re-liquidate the entries, but at the same rate at which
they had liquidated by operation of law. For further discussion
of this issue, see infra pp. 9-14.
6
Commerce conducted a 2000 administrative review of which
the final results were published in the Federal Register on
September 10, 2002. Pure Magnesium and Alloy Magnesium From
Canada; 67 Fed. Reg. 57,394 (Dep’t Commerce, Sept. 10, 2002)
(preliminary results of countervailing duty administrative
reviews). Plaintiff did not challenge the liquidation of the
1997 entries during this administrative review.
Court No. 03-00828 Page 6

25,340 (Dep’t Commerce May 12, 2003) (preliminary results of

countervailing duty administrative reviews).

Plaintiff responded by claiming that it was unable to protest

the treatment of its entries to Customs because liquidation

occurred by operation of law, and was therefore not statutorily

protestable. See Compl. of NHCI at para 9. Plaintiff moreover

claimed that under 19 U.S.C. § 1671(a)7 Commerce was required to

offset its 2001 payments to ensure that the amount of

countervailing duties imposed over the entire amortization period

equals the net countervailable subsidy received. Compl. of NHCI at

para. 9. Commerce again rejected Plaintiff’s argument. Compl. of

NHCI at para. 10.

In the instant claim, Plaintiff asks the Court to hold

unlawful Commerce’s refusal to offset the excess countervailing

duties imposed on Plaintiff’s past entries of pure and alloy

magnesium, as encompassed by the final results of the

administrative review. Compl. of NHCI at 10 (prayer for relief).

Defendant moves to dismiss Plaintiff’s complaint for lack of

7
19 U.S.C. § 1671(a) states, in relevant part:

If [Commerce] determines that . . . a country . . . is providing
directly or indirectly, a countervailable subsidy with respect to
the manufacture, production, or export of a class or kind of
merchandise imported, or sold (or likely to be sold) for
importation, into the United States . . . there shall be imposed
upon such merchandise a countervailing duty . . . equal to the
amount of the net countervailable subsidy.

19 U.S.C. § 1671(a).
Court No. 03-00828 Page 7

subject matter jurisdiction under USCIT R. 12(b)(1) and for failure

to state a claim upon which relief can be granted under USCIT R.

12(b)(5). Def.’s Mot. Dismiss at 5.

STANDARD OF REVIEW

The two issues before this Court are whether this court has

subject matter jurisdiction and whether, assuming that the court

does have subject matter jurisdiction over Plaintiff’s complaint,

Plaintiff has failed to state a claim upon which relief can be

granted. Where jurisdiction is challenged, “because Plaintiff is

seeking to invoke the Court’s jurisdiction, it has the burden to

establish the basis for jurisdiction.” See Former Employees of

Sonoco Prods. Co. v. United States Sec’y of Labor, 27 CIT __, __,

273 F. Supp. 2d. 1336, 1338 (2003) (citing McNutt v. Gen. Motors

Acceptance Corp., 298 U.S. 178, 189 (1936)). At the same time, “the

Court assumes ‘all well-pled factual allegations are true,’

construing ‘all reasonable inferences in favor of the nonmovant.’”

United States v. Islip, 22 CIT 852, 854, 18 F. Supp. 2d 1047, 1051

(1998) (quoting Gould, Inc. v. United States, 935 F.2d 1271, 1274

(Fed. Cir. 1991)).

To the extent that this case properly arises under 28 U.S.C.

§ 1581(c), this Court reviews the actions of the government in

countervailing subsidy proceedings to determine whether they are

“in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

Accordingly, in order to determine whether Plaintiff’s complaint
Court No. 03-00828 Page 8

states a claim upon which relief can be granted, the Court must

decide whether or not Plaintiff has properly alleged that Commerce,

in denying its requested adjustment, acted in a manner not “in

accordance with law.”

DISCUSSION

This opinion will first discuss subject matter jurisdiction,

and second, Defendant’s argument regarding failure to state a claim

upon which relief can be granted. In evaluating the argument that

Plaintiff has failed to state a claim, the Court will focus on the

question of whether Plaintiff has properly alleged that Commerce

failed to act in accordance with law under 19 U.S.C. § 1671(a) by

refusing to offset the duties imposed on Plaintiff’s past entries.

A. Subject Matter Jurisdiction under 28 U.S.C. § 1581(c)

Commerce argues that 28 U.S.C. § 1581(c) is not the proper

vehicle for bringing Plaintiff’s claim. Specifically, Commerce

argues that Plaintiff should have exhausted administrative remedies

under 28 U.S.C. § 1581(a) before bringing a claim against Commerce.

The Court will first address whether § 1581(c) provides

jurisdiction over Plaintiff’s claim. Then, the Court will address

the question of whether, even if § 1581(c) does provide

jurisdiction, Plaintiff should nonetheless be required to exhaust

remedies under § 1581(a) .
Court No. 03-00828 Page 9

I. Section 1581(c) provides jurisdiction for a claim
challenging Commerce’s 2001 administrative review
determination.

Section 1581(c) provides for judicial review of certain

“reviewable determinations” outlined in 19 U.S.C. §

1516a(a)(2)(B). See 28 U.S.C. § 1581(c); 19 U.S.C. § 1516a. If not

outlined in this statute, an action by Commerce cannot be

categorized as a “reviewable determination” and thus, the Court

will not possess jurisdiction under § 1581(c). See Shinyei Corp.

of Am. v. United States, 355 F.3d 1297, 1304 (Fed. Cir. 2004).

Under § 1516a(a)(2)(B), a reviewable determination refers to, among

other things, “a final determination . . . by the administering

authority or the Commission under section 1675 of this title.” See

19 U.S.C. § 1516a(a)(2)(B)(iii).

Title 19 U.S.C. § 1675 provides for annual administrative

reviews of the amount of countervailing duties. See 19 U.S.C. §

1675. Determinations stemming from annual administrative reviews

are therefore reviewable determinations under 19 U.S.C. § 1516a,

and 28 U.S.C. § 1581(c) provides the Court with subject matter

jurisdiction to hear challenges to such determinations. As

Plaintiff here challenges Commerce’s 2001 administrative review

determination as not in accordance with law, jurisdiction exists

over this “reviewable determination” pursuant to 28 U.S.C. §

1581(c).
Court No. 03-00828 Page 10

ii. Exhaustion of Remedies under § 1581(a) is not required.

Commerce’s argues that there is no jurisdiction under §

1581(c) because (1) all other administrative remedies should be

exhausted before a § 1581(c) claim may be brought and (2)

Plaintiff had available administrative remedies under § 1581(a).

Def.’s Mot. Dismiss at 10. The Court will first discuss whether

Plaintiff had any remedies available under 28 U.S.C. § 1581(a). To

the extent that such remedies existed, the Court will then discuss

whether jurisdiction here depends on their exhaustion.

a. Plaintiff had an available remedy under § 1581(a).

Title 28 U.S.C. § 1581(a) provides this Court jurisdiction

over protests against Customs’ decisions. See 28 U.S.C. § 1581(a),

19 U.S.C. §§ 1514, 1515. However, Plaintiff claims that its

entries liquidated by operation of law pursuant to 19 U.S.C. §

1504(d), and that as such liquidation involves no “decision” by

Customs, it was therefore unable to protest the liquidation under

§ 1581(a). Pl.’s Opp’n to Mot. Dismiss at 21 (“Pl.’s Br.”).

Section 1504(d) states that liquidation by operation of law occurs

if six months after having received notice of the removal of

suspension of liquidation, Customs has not liquidated the entries.

See 19 U.S.C. § 1504(d).8 Notice of the removal of suspension

8
The text of § 1504(d) is as follows:

Except as provided in section 1675(a)(3) of this title, when a
suspension required by statute or court order is removed, the
Customs Service shall liquidate the entry, unless liquidation is
Court No. 03-00828 Page 11

occurs when the final results of an investigation or review are

published in the Federal Register. See Int’l Trading Co. v. United

States, 281 F.3d 1268, 1277 (Fed. Cir. 2002) (holding that

publication of the final results provides notice to Customs of the

correct liquidation amount, thereby beginning the six months until

liquidation occurs by operation of law). Thus, entries are deemed

liquidated within six months of the Federal Register notice of the

final results. Id.9 The 1997 countervailing duty final results

extended under subsection (b) of this section, within 6 months
after receiving notice of the removal from the Department of
Commerce, other agency, or a court with jurisdiction over the
entry. Any entry (other than an entry with respect to which
liquidation has been extended under subsection (b)) not
liquidated by the Customs Service within 6 months after receiving
such notice shall be treated as having been liquidated at the
rate of duty, value, quantity, and amount of duty asserted at the
time of entry by the importer of record.

19 U.S.C. § 1504(d).
9
The Court recently addressed a claim that the first clause
of § 1504(d), which refers to 19 U.S.C. § 1675(a)(3), invalidates
liquidation by operation of law for any entries previously
subject to an administrative review. See Int’l Trading Co. v.
United States, slip op. 04-01 at 7-13 (CIT Jan. 2, 2004). Title
19 U.S.C. § 1675(a)(3) states in part:

[I]f the administering authority orders any liquidation
of entries pursuant to a review under [section
1675(a)(1)], such liquidation shall be made promptly
and, to the greatest extent practicable, within 90 days
after the instructions to Customs are issued. In any
case in which liquidation has not occurred within that
90-day period, the Secretary of the Treasury shall,
upon the request of the affected party, provide an
explanation thereof.
19 U.S.C. § 1675(a)(3)(B). In Int’l Trading Co., the
government argued that where Commerce ordered liquidation of
Court No. 03-00828 Page 12

were published in the Federal Register on September 8, 1999.

Compl. of NHCI at para. 5. Thus, because Customs made no

intervening attempt to liquidate, the entries at issue were all

deemed liquidated by operation of law by March 8, 2000.

Case law is divided on the matter of whether an importer can

protest a deemed liquidation. Section 1514(a) indicates that only

Customs “decisions” may be protested. The Court has explained

that:

[T]ypically, ‘decisions’ of Customs [under 1514(a)] are
substantive determinations involving the application of
pertinent law and precedent to a set of facts, such as
tariff classification and applicable rate of duty. U.S.
Shoe Corp. v. United States, 114 F.3d 1564, 1569 (Fed.
Cir. 1997), aff’d, 523 U.S. 360 (1998). Customs does not
make a decision in order to effect a deemed liquidation.

Fujitsu Gen. Am., Inc. v. United States, 24 CIT 733, 739, 110 F.

Supp. 2d 1061, 1069 (2000), aff’d, 283 F.3d 1364 (Fed. Cir.

entries that had been subject to suspension during an
administrative review, § 1504(d) did not apply; rather,
Customs could take as long as it desired to liquidate
entries, so long as it could provide an explanation upon
request. The Court found this argument unpersuasive. Among
other things, the Court found that given that § 1504(d)
applies, by its terms, to “any entry,” even entries that had
been under administrative review were subject to liquidation
by operation of law within six months of the Federal
Register notice of the final results. See Int’l Trading Co.
v. United States, slip op. 04-01 at 7-8 (CIT Jan. 2, 2004).
Therefore, the entries at issue here were subject to deemed
liquidation under § 1504(d), although the question would be
mooted were it clear that Customs had re-liquidated the
goods. See supra note 5.
Court No. 03-00828 Page 13

2002).10 A more recent decision of the Court, however, states that

“[i]f a deemed liquidation or any liquidation is adverse to an

importer, it has its protest remedies under 19 U.S.C. § 1514 and

access to judicial review under 28 U.S.C. § 1581(a).” Cemex, S.A.

v. United States, 27 CIT __, __, 279 F. Supp. 2d 1357, 1362 (2003),

aff’d, Court Nos. 04-1058, 04-1080 (Fed. Cir. Sept. 28, 2004).

However, regardless of whether a deemed liquidation is

protestable or not, Plaintiff was not necessarily without a Customs

remedy. If Customs’ September 1999 and March 2000 notices of

liquidation were evidence of an active reliquidation of NHCI’s

entries, that reliquidation would clearly have been protestable as

a decision of the Customs Service under 19 U.S.C. § 1581(a). If,

on the other hand, Customs’ September 1999 and March 2000 notices

of liquidation were merely belated indications that deemed

liquidation had occurred, then it is possible that an avenue of

relief existed under 19 U.S.C. § 1520(c). Title 19 U.S.C. §

1520(c) allows for challenges of mistakes of fact, clerical errors,

10
The Court notes that this decision had not been issued by
the time that Plaintiff received the notices of liquidation
regarding its entries. However, the groundwork for Fujitsu Gen.
Am.’s holding that deemed liquidations were not subject to
protest had already been laid by U.S. Shoe Corp., cited above,
which stated that a Customs decision involved application of law
to facts; even before the specific holding in Fujitsu Gen. Am.,
it was apparent that no “decision” was involved in liquidation by
operation of law. However, as this Court’s decision in the
instant case does not rest on finding that there was no
protestable decision by the Customs Service, the point is moot.
Court No. 03-00828 Page 14

or other inadvertences within one year of liquidation.11 Although

Customs’ failure to liquidate entries in accordance with Commerce’s

instructions cannot be categorized as a mistake of fact or a

clerical error,12 a liquidation by operation of law may result from

inadvertence. Inadvertence has been defined as “an oversight or

involuntary accident, or the result of inattention or carelessness,

and even as a type of mistake. It is thus language broader in

scope than mistake.” See Hambro Automotive Corp. v. United States,

66 C.C.P.A. 113, 118, 603 F.2d 850, 854 (1979) (citing C.J. Tower

& Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22, 336

F. Supp. 1395, 1399 (1972) (internal citation omitted). Therefore,

to the extent liquidation by operation of law occurred as a result

of Customs’ inattention or carelessness, this occurrence could have

been challenged as an inadvertence under § 1520(c).13

11
The text of 19 U.S.C. § 1520(c) is as follows:

Notwithstanding a valid protest was not filed, the Customs
Service may. . .reliquidate an entry or reconciliation to
correct—
(1)a clerical error, mistake of fact, or other
inadvertence . . . adverse to the importer and manifest from
the record or established by documentary evidence in any
entry . . . when the error, mistake or inadvertence is
brought to the attention of the Customs Service within one
year after the date of liquidation or exaction.

19 U.S.C. § 1520(c).
12
Commerce concedes that if deemed liquidation occurred, it
occurred inadvertently. Def.’s Mot. Dismiss at 11.
13
Refusal to correct a mistake, clerical error, or
inadvertence would itself be a “decision” of Customs, and
Court No. 03-00828 Page 15

Accordingly, it appears that whether Plaintiff’s entries

liquidated by operation of law, or whether, having allowed the

entries to liquidate by operation of law, Customs actively re-

liquidated them in a manner inconsistent with Commerce’s

instructions, Plaintiff did have a Customs remedy available. The

Court therefore moves on to consider whether exhausting such a

remedy should have been prerequisite to filing the claim here.

b. Exhaustion of the § 1581(a) Remedy Was Neither
Required, Nor Appropriate.

There are two statutes that this Court must consider in

deciding whether jurisdiction here depends on Plaintiff’s

exhaustion of its available Customs remedy. First, the Court will

examine whether 28 U.S.C. § 1581, which comprises the various

grants of jurisdiction to this Court, contains such a requirement

of exhaustion. Second, the Court will consider 28 U.S.C. §

2637(d), which gives this Court discretion to require exhaustion of

administrative remedies where there is not otherwise a statutory

requirement of exhaustion.

Title 28 U.S.C. § 1581(a)14 provides jurisdiction for this Court

to review the denial of Customs protests under § 1514, or refusal

therefore protestable 28 U.S.C. § 1581(a).
14
The text of 28 U.S.C. § 1581(a) is as follows:

The Court of International Trade shall have exclusive
jurisdiction of any civil action commenced to contest the denial
of a protest, in whole or in part, under section 515 of the
Tariff Act of 1930.
Court No. 03-00828 Page 16

to correct an error, mistake or inadvertance under § 1520(c).

Title 28 U.S.C. 1581(c)15 provides jurisdiction for this Court to

review certain determinations of the Department of Commerce.

Neither section refers to the other. Each grant of jurisdiction

stands alone, providing separate and distinct avenues of relief.

The language of these statutes, therefore, does not appear to

require exhaustion of Customs remedies in order to bring a ripe

claim against Commerce.16,17 However, although § 1581(c) on its own

15
The text of 28 U.S.C. § 1581(c) is as follows:

The Court of International Trade shall have exclusive
jurisdiction of any civil action commenced under section 516(A)
of the Tariff Act of 1930.
16
Moreover, Omni U.S.A., Inc. v. United States, 840 F.2d 912
(Fed. Cir. 1988), a “parallel” case cited by Commerce as
requiring Plaintiff to protest under § 1520(c) in a situation
such as this, is inapposite to the case before this Court.
Because the plaintiff in Omni U.S.A. missed the opportunity to
protest under § 1520(c) and § 1581(a), Plaintiff was precluded
from asserting all claims under § 1581(i) jurisdiction. This is
because “[s]ection 1581(i) jurisdiction may not be invoked when
jurisdiction under another section of § 1581 is or could have
been available, unless the remedy provided under that other
subsection would be manifestly inadequate.” Miller & Co. v.
United States, 824 F.2d 961, 963 (Fed. Cir. 1987). However, in
the present case as mentioned above, because Plaintiff is seeking
to establish § 1581(c) jurisdiction, and not (i), even if a
possible remedy existed under § 1520(c), it does not preclude §
1581(c) jurisdiction.
17
The Court also notes that the statutes providing for the
causes of action that Plaintiff could possibly have proceeded
under, 19 U.S.C. § 1514(a) (Customs protest either of wrongful
active liquidation or refusal to correct wrongful inadvertent
liquidation), 19 U.S.C. § 1520(c) (Customs mistake) and 19 U.S.C.
§ 1671(a) (requiring that only duties equal to the net
countervailable subsidy are imposed) do not refer to one another
in any way.
Court No. 03-00828 Page 17

terms does not appear to require exhaustion of Customs remedies, it

remains within this Court’s discretion to require such exhaustion

under a separate statute, 28 U.S.C. § 2637(d). Title 28 U.S.C. §

2637(d) states that “[i]n any [§ 1581(c)] action . . ., the Court

of International Trade shall, where appropriate, require the

exhaustion of administrative remedies.” 28 U.S.C. § 2637(d).

“Administrative remedies,” as the phrase is used in 28 U.S.C. §

2637(d), presumably includes all remedies that could or would have

been available, including Customs remedies. Accordingly, this

Court must determine whether it is appropriate to require that

Plaintiff have exhausted its Customs remedies in this case.

There is a factor counseling for the exhaustion requirement;

i.e., Plaintiff appears to have allowed the filing period on its

Customs remedy to run out before bringing its claim to Commerce’s

attention. This laxity invites the speculation that Plaintiff

slept on its rights. Nonetheless, the Court is persuaded that such

tardiness cannot preclude relief where Congress created independent

remedies with different agencies. Even where statutes overlap in

their remedial effect, courts do not hold that one must be favored

over another absent Congressional language to that effect. See,

e.g., Southwest Marine, Inc. v. Gizoni, 502 U.S. 81, 90-92 & n.5

(1991); Brooks v. United States, 337 U.S. 49, 53 (1948). There is

no such limiting language here. Moreover, as noted above, none of

the statutes that could provide a cause of action in this case
Court No. 03-00828 Page 18

refer to each other in any way that this Court could reasonably

construe as requiring a prospective Plaintiff to exhaust remedies

with one agency before proceeding against another.

Furthermore, Congress appears to have acquiesced in the

possibility that a prospective Plaintiff would have a choice of

pursuing a remedy with Customs or Commerce, in light of this

Court’s holding in Serampore Indus. Pvt. Ltd. v. United States

Dep’t of Commerce, 11 CIT 866, 675 F. Supp. 1354 (1987)

(“Serampore”). In Serampore, the Court upheld Commerce’s

interpretation of the word “imposed,” as used in 19 U.S.C. §

1677(a), to mean “assessed.” Serampore, 11 CIT at 871-73, 675 F.

Supp. at 1359. This definition applies to other uses of the word

“imposed” in the countervailing duty statutes,18 including the

word’s use in 19 U.S.C. § 1671(a). Title 19 U.S.C. § 1671(a)

requires that the duties imposed be equal to the net

countervailable subsidy. Because it is Customs that carries out

the actual assessment of duties, through liquidation procedures,

see 19 U.S.C. § 1500, this gives Commerce some responsibility for

Customs’ liquidation of entries subject to countervailing duty

orders, inasmuch as Commerce must correctly calculate the duties so

18
Any term used in multiple places in a single statute is
presumed to carry the same meaning throughout. See RHP Bearings
Ltd. v. United States, 288 F.3d 1334, 1347 (Fed. Cir. 2002); SKF
USA Inc. v. United States, 263 F.3d 1369, 1382-83 (Fed. Cir.
2001). Moreover, in the instant case, Commerce has indicated no
disagreement with interpreting “imposed,” as used in 19 U.S.C. §
1677(a), to mean the actual assessment of duties by Customs.
Court No. 03-00828 Page 19

that Customs will assess the correct amount of duties. Since the

Serampore decision was issued, Congress presumably has been aware

that both Commerce and Customs are involved in the “imposition” of

countervailing duties, and that both agencies may be called upon to

remedy a defect in such imposition.19 Given that the trade

statutes, including the provisions regarding countervailing duties,

19
There appears to be no disagreement, on the facts here,
that it is Customs that, through liquidation procedures, imposes
duties. However, the Court notes that Commerce recently elected
to change its interpretation of “imposed,” so that countervailing
duties are “imposed” not when Customs actually assesses the
duties, but when Commerce publishes the results of an
administrative review in the Federal Register. Dupont Teijin
Films USA, LP v. United States, 27 CIT __, 297 F. Supp. 2d 1367
(2003). Where Congress has left a gap for an agency to fill, as
it appears to have done with regard to the meaning of the word
“imposed” throughout the countervailing duty statutes, the agency
is at liberty to change its interpretation, so long as its new
interpretation is reasonable. Commerce’s new interpretation was
granted deference by the Court. Id.
Although Dupont Teijin Films USA, LP dealt with a different
provision than that at issue here, where a word is used multiple
times over the course of a statute, courts presume that the term
maintains the same meaning throughout. Therefore, it would
appear that “imposed,” does not mean “assessed,” at least after
the end of 2003. This action arose, of course, before the end of
2003, and the actions complained of also occurred before
Commerce’s new interpretation of “imposed” was approved by the
Court. Moreover, Commerce does not advocate for this new
interpretation in its submissions here.
Nevertheless, the Court notes that in future cases, given
this new interpretation of the word “imposed,” the result here
may not obtain. Where duties are imposed at the time of Federal
Register publication, Commerce would presumably need not take
into account Customs particular liquidations of previous years’
entries. Rather, Commerce’s duty would only be to annually
publish a duty rate in the Federal Register which conformed to
its overall plan for amortizing the overall subsidy. In such a
case, it would appear that wrongful acts or errors occurring at
liquidation could then only be corrected through Customs
protests.
Court No. 03-00828 Page 20

have been subject to numerous revisions since 1987, especially with

regard to the Uruguay Round, Congress’ failure to indicate that it

favored remedies against one agency as opposed to another supports

the notion that Congress intended that where either agency is

capable of remedying the wrong, Plaintiffs have their choice of

remedy. See Gen. Dynamics Land Sys. v. Cline, 124 S. Ct. 1236,

1245 (2004) (Congress’ failure to amend longstanding judicial

construction of the Age Discrimination in Employment Act amounted

to Congressional acquiescence to the judicial interpretation).

Finally, although Plaintiff did wait approximately two years

from the time that Customs issued notices of the improper deemed

liquidation, or improper active liquidation, to bring its claim to

Commerce, and did not raise this issue in the administrative review

for the year 2000, such a delay is not particularly prejudicial to

Commerce or to the administration of justice in this matter. It is

agreed that, in the instant case, Commerce amortized the duties

owed over a fourteen year period. Nor is there any statutory

requirement that an issue be brought to Commerce within a certain

time. It therefore appears to the Court that so long as Plaintiff

brought the matter of the overpayment to Commerce’s attention at a

time when it was still feasible for Commerce to adjust the

amortization schedule or otherwise offset the payment so that the

administrative reviews would result in Customs’ overall assessment

of duties equal to the net countervailable subsidy, there is no
Court No. 03-00828 Page 21

prejudice to Commerce.

Therefore, the Court finds that while an administrative remedy

before Customs was available to Plaintiff, Plaintiff was not

statutorily required to exhaust that remedy before bringing its

claim against Commerce. Moreover, given the particular statutes

involved and Congress’ presumed decision to allow certain judicial

constructions thereof to remain unchanged, it would be

inappropriate for the Court to require such exhaustion. The Court

will therefore now discuss whether Plaintiff has stated a claim

upon which relief can be granted.

B. Plaintiff States a Claim Upon Which Relief Can Be Granted

As noted above, Plaintiff brings this case to challenge

Commerce’s determination during the 2001 administrative review not

to offset Plaintiff’s overpayment of duties on its 1997 entries.

Plaintiff contends that Commerce is obligated to offset the amount

owed by Plaintiff for its 1997 entries in future years so that the

final amount of countervailing duties imposed on Plaintiff will

equal the net countervailable subsidy under 19 U.S.C. § 1671(a).

First, the Court will discuss what duties Commerce is charged

with under 1671(a) and whether Plaintiff properly states a claim

that Commerce acted not in accordance with law. Second, this Court

will address Commerce’s argument that Plaintiff’s claim fails

because Commerce does not have the statutory authority to offset
Court No. 03-00828 Page 22

Plaintiff’s overpayment of countervailing duties.

First, Plaintiff argues that Commerce’s obligation under §

1671(a) is to calculate the amount of duties that Customs will

impose on importers. See Pl.’s Br. at 10. Plaintiff argues that

though Commerce might have initially calculated the 1997 duties

correctly, Commerce, by failing to take into account the

overpayment resulting from Customs’ actions or inadvertences, has

not properly calculated the 2001 countervailing duty assessment

rate. See id. Because Customs itself has no authority to collect

countervailing duty moneys except in accordance with Commerce’s

instructions, Commerce’s refusal to offset the overpayment will

result in Customs’ imposition, over the amortization period, of

duties in excess of the net countervailable subsidy. Although

Commerce was not the original source of error, Commerce will have

knowingly violated § 1671(a) by not correctly instructing Customs

in a manner that results, over the amortization period, in the

collection of duties equal to the net subsidy.20 See Pl.’s Br. at

20
The Court finds the language of 19 U.S.C. § 1675(a),
providing for annual administrative reviews of antidumping and
countervailing duty orders, revealing. With regard to
countervailing duty reviews, this statute states:

At least once during each 12-month period beginning on the
anniversary of the date of publication of a countervailing duty
order . . . [Commerce] . . . shall—
(A) review and determine the amount of any net
countervailable subsidy.

19 U.S.C. § 1675(a).
Court No. 03-00828 Page 23

11-12. Accordingly, Plaintiff’s claim alleges that Commerce’s

determination during the 2001 review not to offset Plaintiff’s

overpayment was not in accordance with law. Plaintiff’s claim

therefore properly states a cause of action before this Court.

Second, while Commerce appears to admit that it is responsible

for correctly calculating duties so as to result in the overall

imposition, by Customs, of duties equal to the net countervailable

subsidy, Commerce argues that it lacks authority to offset the 1997

error during the 2001 review because 19 U.S.C. § 1675, the statute

providing for administrative reviews, refers to a “12-month period

beginning on the anniversary date of the publication of a

countervailing duty order.” Because each administrative review may

only concern itself with what occurred during the “period of

review,” under Commerce’s interpretation of § 1671(a) and § 1675,

Plaintiff has no claim for relief because the 2001 administrative

review cannot take into account anything that happened with regard

to 1997 entries. Def.’s Mot. Dismiss at 8. As there is no

indication within § 1671(a) as to how the “period of review” should

be applied in this situation, the Court must decide whether to

It is unclear to the Court how Commerce can recalculate the
amount of the “net countervailable subsidy,” if it does not take
into account that which has already been paid, i.e., those moneys
that no longer form part of the net countervailable subsidy.
Title 19 U.S.C. § 1675(a) and 19 U.S.C. § 1671 thereby complement
one another, reinforcing the notion that Commerce must take into
account an overpayment from a previous year in further years’
recalculations of the “net countervailable subsidy.” But see 19
U.S.C. § 1514.
Court No. 03-00828 Page 24

defer to Commerce’s interpretation of the interplay between §

1671(a) and § 1675.21

Here, Commerce argues that because 19 U.S.C. § 1675(a)(1)

refers to a “12-month period beginning on the anniversary date of

the publication of a countervailing duty order,” jurisdiction

pursuant to 28 U.S.C. § 1581(c) does not extend to entries made

before the period of review. Def.’s Mot. Dismiss at 8. Commerce

claims that § 1671(a) cannot apply in this case because Plaintiff’s

1997 entries are outside the scope of the twelve-month “periodic

review of duties” for Plaintiff’s 2001 entries. However, the Court

will not defer to this interpretation because it would altogether

nullify the meaning and purpose of § 1671(a) with regard to one-

time, non-recurring subsidies.

21
In general, the determination of whether the agency's
statutory interpretation is in accordance with law follows the
two-step analysis formulated in Chevron U.S.A. Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837 (1984) (“Chevron”). The
first step is to investigate as a matter of law “whether
Congress's purpose and intent on the question at issue is
judicially ascertainable.” Steel Auth. of India, Ltd. v. United
States, 25 CIT 472, 476, 146 F. Supp. 2d 900, 906 (2001) (quoting
Timex V.I., Inc. v. United States, 157 F.3d 879, 881 (Fed. Cir.
1998)). If, after employing the first prong of Chevron, a court
concludes that the statute is silent or ambiguous with respect to
the specific issue, as is the case here, the court proceeds to
the second step. See Chevron, 467 U.S. at 842-43. In the second
step of the Chevron analysis, the narrow legal question is
whether the agency's statutory interpretation is a permissible
construction of the statute. See id. If so, the court must
defer to Commerce's reasonable interpretation. Steel Auth. of
India, Ltd., 25 CIT 472, 476, 146 F. Supp. 2d 900, 906 (2001)
(citing Koyo Seiko., Ltd. v. United States, 36 F.3d 1565, 1573
(Fed. Cir. 1994)).
Court No. 03-00828 Page 25

As established above, by applying Commerce’s then current

interpretation of “imposed,” the language of § 1671(a) clearly

indicates that Commerce should calculate the countervailing duties

so that ultimately, the amount of countervailing duties that

Customs imposes on an importer is equal to the net countervailable

subsidy. Yet, by accepting Commerce’s proposed interpretation

regarding the twelve months of the period of review, Commerce would

never be able to correctly calculate the amount of countervailing

duties owed over an amortization period if a mistake is made by

Customs in the liquidation of the entries. This is because Customs

does not assess duties on or liquidate the entries until after the

“period of review” regarding those entries is completed and

Commerce has published its findings in the Federal Register. See

19 U.S.C. § 1675(a). In effect, any errors or incorrect

liquidations made by Customs are with regard to entries belonging

to a “period of review” long past. Therefore, if this Court were

to accept Commerce’s interpretation, and strictly enforce the

period of review so that any incorrect liquidation made with regard

to entries dating from before the twelve-month period of review

cannot be considered, Commerce would not be able to fulfill its

obligation to calculate countervailing duties correctly under §

1671(a). This would render the language and meaning of § 1671(a)

void with regard to amortized countervailed subsidies, as it would

invalidate the mandate to properly calculate countervailing duties
Court No. 03-00828 Page 26

so as to equal the net countervailable subsidy.

Plaintiff here, for example, is protesting a mistake that

occurred in the 2000 and 2001 liquidation of its 1997 entries.22

22
The Court notes that while Commerce argues that it cannot
address the Customs errors because the errors were made with
regard to entries from 1997, and Plaintiff brought the errors up
in the 2001 review, Commerce does not make the somewhat more
subtle argument that, if deemed liquidation occurred without any
other action by Customs, the deemed liquidation took place in
March 2000 and that, therefore, the error itself took place
outside the period of review, and had Plaintiff desired to see
this error remedied, it should have requested an administrative
review for the year 2000. Assuming that active liquidations were
made by Customs, one batch in September 2000 and one in February
2001, then only the second batch of liquidations occurred within
the period of review. Such arguments might hold more weight were
this case not dealing with a subsidy which Commerce itself had
amortized over fourteen years. It appears somewhat disingenuous
for Commerce to refuse to consider anything occurring outside the
immediate period of review when Commerce itself has linked each
period together through a fourteen-year amortization.
Rather, as Plaintiff points out in its brief, because
Commerce is subject to the requirement under § 1671(a) to ensure
that the amount countervailed is equal to the net subsidy
received, in each period of review Commerce explicitly reviews
the total amount of the non-recurring subsidy benefit and the
amount allocated over each of the fourteen periods of review.
Pl.’s Br. at 16. The chart issued by Commerce in connection with
the Final Results for the 2001 Administrative Review which
features the amount to be countervailed in each year of the
fourteen-year amortization period, further demonstrates that
Commerce views the periods of review as joined by the universal
goal of assessing the total amount of benefit conferred over
time. See Memorandum to The File, from Melanie Brown, Import
Compliance Analyst, AD/CVD Enforcement, Group I, Office I, Re:
Tenth (2001) Countervailing Duty Administrative Reviews of Pure
Magnesium and Alloy Magnesium from Canada, Calculation of Final
Results, Pl.’s Ex. 13 at 3 (Sept. 9, 2003). Therefore, in the
case where a countervailing duty is imposed on a non-recurring
subsidy, because it is amortized over a period of years,
Commerce should have the capacity to offset the excess
countervailing duties imposed on Plaintiff’s past entries.
Moreover, Commerce has previously recognized its authority
to make an adjustment similar to the one requested here, so as to
Court No. 03-00828 Page 27

If this Court were to accept Commerce’s interpretation of the

statute, it would require Plaintiff to have made its 1581(c)

challenge in 1997, before Customs wrongly liquidated the entries at

maintain the equality of the countervailing duties imposed with
the amount of a non-recurring subsidy. Pl.’s Br. at 13. In the
Issues and Decision Memorandum accompanying Certain Pasta from
Italy, 66 Fed. Reg. 64,214, 64,215 (Dep’t Commerce, Dec. 12,
2001) (final results of the fourth countervailing duty
administrative review), though a recurring subsidy was at issue,
Commerce explained:

If Delverde were, for example, repaying a non-recurring
grant that it received prior to the period of review,
we would agree that any portion of that grant that had
not already been countervailed should be reduced by the
amount repaid. (We would do this without regard to the
offset provision because, as Delverde argues, the
repayment would be a reduction in the financial
contribution and benefit.)

Memorandum to Bernard Carreau, Acting Assistant Sec’y for Imp.
Admin., from Richard W. Moreland, Deputy Assistant Sec’y, Group
I, Imp. Admin., Issues and Decision Memorandum: Final Results of
the 1999 Countervailing Duty Administrative Review of Certain
Pasta from Italy, Pl.’s Ex. 12 at Comment 7 (Dec. 4, 2001);
Certain Pasta from Italy, 66 Fed. Reg. 64,214, 64,215 (Dec. 12,
2001) (incorporating the above-mentioned memorandum by
reference).
Finally, this Court rejects Commerce’s argument that the
amortization schedule of a non-recurring subsidy is so analogous
to federal tax laws concerning the depreciation of capital assets
that the statute of limitations for amending prior years’ income
tax returns should apply here. Commerce argues that the logic of
federal income tax law, where the fact that an asset depreciates
over the course of a number of years does not allow a taxpayer to
receive the benefit of one year’s allocated depreciation in a
later tax year, should be applied to the present situation.
Def.’s Reply, at 11-12. However, the federal income tax rules
exist so the taxpayer may not benefit from failure to file taxes,
or otherwise improperly benefit. Yet, in the present situation, a
mistake was made on the government’s part that resulted in
Plaintiff paying more than it owed. Therefore, to follow
Commerce’s analogy would force Plaintiff to pay for a mistake
that it did not make.
Court No. 03-00828 Page 28

issue. This would mean that Plaintiff would never have been able

to challenge Commerce’s non-compliance with § 1671(a).

Accordingly, Commerce’s interpretation of § 1671(a) results in an

unreasonable interpretation of the statute, and Chevron deference

will not be given to Commerce’s interpretation.

Therefore, although Commerce argues that it lacks the

statutory authority to provide a remedy in this situation, its own

interpretation of the Congressional purpose of § 1671(a) does not

support its claim.23 Commerce’s attempt at reconciling § 1675's

period of review with the requirements of § 1671(a) will not be

granted deference, as the interpretation renders § 1671(a) null and

23
Liquidation does not prevent Commerce from remedying this
situation. Asociacion Colombiana de Exportadores v. United
States, 916 F.2d 1571, 1573 (Fed. Cir. 1990), Juice Farms, Inc.
v. United States, 68 F.3d 1344, 1346 (Fed.Cir. 1995), and United
States v. A.N. Deringer, Inc., 66 C.C.P.A. 50, 52 & 55-56, 593
F.2d 1015, 1017 & 1020-21 (1979), cases cited by Commerce as
precluding Plaintiff’s relief because the entries were already
liquidated, are inapposite. Juice Farms and A.N. Deringer were
not brought under § 1581(c) and stand merely for the proposition
that there is no § 1581(a) jurisdiction over untimely filed
Customs protests. While it is true that Asociacion Colombiana de
Exportadores may be cited for the proposition that liquidation is
final, and no moneys may thereafter be recovered, Plaintiff here
does not seek Customs’ disgorgement of its overpayment. Rather,
it seeks to have the amortization schedule maintained by Commerce
adjusted to reflect this overpayment. Customs is in no way
involved in such a remedy, and such remedy does not seek to undo
the liquidation of the 1997 entries. The finality of the
liquidation of the 1997 entries under 19 U.S.C. § 1514 is thereby
not contested. Nor does Commerce’s adjustment of the amortization
schedule result in a “reconciliation” regarding the 1997 entries;
rather than affecting those entries, the adjustment simply takes
into account the fact of the particular amount of subsidy left to
be amortized, and adjusts accordingly.
Court No. 03-00828 Page 29

void with regard to administrative reviews of countervailing duty

orders relating to one-time, non-recurring subsidies which are

amortized over a period of years.

CONCLUSION

Because Plaintiff was not statutorily required to exhaust its

extant Customs remedy, because the Court finds that it is not

appropriate to require such exhaustion in this case, and because

Commerce has the authority under § 1671(a) to ensure that the

amount of the countervailing duty imposed is equal to the amount of

the net countervailable subsidy, the Court denies Defendant’s

motion to dismiss. It is so ordered.

/s/Donald C. Pogue
Donald C. Pogue
Judge

Dated: New York, New York
October 12, 2004