United States v. ITT Industries, Inc.

Slip Op. 04-81

United States Court of International Trade

UNITED STATES,

Plaintiff,
Before: Pogue, Judge
v.
Consol. Court No. 97-01777
ITT INDUSTRIES, INC., d/b/a
ITT JABSCO,

Defendant.

[Plaintiff’s motion for summary judgment granted in part, denied
in part. Defendant’s motion denied. Trial ordered.]

Decided: July 8, 2004

Peter D. Keisler, Assistant Attorney General, Barbara S. Williams,
Attorney-in-Charge, International Trade Field Office, Mikki Graves
Walser, Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, AnnMarie R. Highsmith, Attorney, Of
Counsel, Office of Assistant Chief Counsel, U.S. Bureau of Customs
and Border Protection, Edward N. Maurer, Attorney, Of Counsel,
Office of Assistant Chief Counsel, U.S. Bureau of Customs and
Border Protection, for Plaintiff.

Barnes, Richardson & Colburn (Rufus E. Jarman, Jr., Diane A.
MacDonald, Helena D. Sullivan) for Defendant.

OPINION

Pogue, Judge: Plaintiff United States Bureau of Customs and

Border Protection1 moves for summary judgment pursuant to USCIT

1
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
Consol. Court No. 97-01777 Page No. 2
Rule 56, seeking payment of a civil penalty, together with pre-

judgment and post-judgment interest. Defendant ITT Industries,

Inc., d/b/a ITT Jabsco (“Jabsco”), opposes Plaintiff’s motion and

moves for summary judgment, asserting that because Customs

improperly calculated the actual loss of antidumping duties Jabsco

owed, the agency also inappropriately assessed the civil penalty.

Accordingly, Jabsco seeks a refund of excess antidumping duties

paid with interest, and either a reassessment of the penalty owed

based upon the correct calculation of antidumping duties or a

rescindment of the penalty demand. Jurisdiction is predicated on

28 U.S.C. § 1581(a) (1988) and 28 U.S.C. § 1583 (1988).2 For the

Security, H.R. Doc. No. 108-32, at 4 (2003).
2
This case arises from the Court’s consolidation of two
separate actions: a denied protest action, Court No. 97-00379,
and a penalty action, Court No. 97-01777. The former action,
filed by Defendant, proposed jurisdiction under 28 U.S.C. §
1581(a) or (i), infra, while the latter, filed by Plaintiff,
proposed jurisdiction under 28 U.S.C. § 1582, the statutory
provision granting this Court jurisdiction to hear civil penalty
claims.
Title 28 U.S.C. § 1581(a) states that “[t]he 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.”
28 U.S.C. § 1581(a). Subsection (i) contains the Court’s
residual jurisdiction, and provides, in part, that:

the Court of International Trade shall have exclusive
jurisdiction of any civil action commenced against the
United States . . . that arises out of any law of the
United States providing for–-
. . .
(2) tariffs, duties, fees or other taxes on
the importation of merchandise for reasons
other than the raising of revenue;
Consol. Court No. 97-01777 Page No. 3
reasons discussed below, the Court grants Plaintiff’s motion for

summary judgment in part, denies its motion in part, and denies

Jabsco’s motion for summary judgment. The Court orders trial on

the penalty amount.

Background

The Department of Commerce issues antidumping duty orders for

. . .
(4) administration and enforcement with
respect to the matters referred to in
paragraphs (1)-(3) of this subsection and
subsections (a)-(h) of this section.

28 U.S.C. § 1581(i). Section 1583 states in relevant part that:

[i]n any civil action in the Court of International
Trade, the court shall have exclusive jurisdiction to
render judgment upon any counterclaim . . . if (1) such
claim or action involves the imported merchandise that
is the subject matter of such civil action, or (2) such
claim or action is to recover upon . . . customs duties
relating to such merchandise.

28 U.S.C. § 1583.
Jabsco argues that the Court has independent jurisdiction
over its claim for a refund of duties under 28 U.S.C. § 1581(a),
or in the alternative, § 1581(i). Def.’s Mem. Supp. Mot. Summ.
J. at 6 (“Def.’s Mem.”). Plaintiff, in response, concedes
jurisdiction, but nevertheless, contends that the Court lacks
independent jurisdiction over the denied protest action because
Jabsco failed to satisfy the statutory prerequisites for filing
an independent action under either subsection (a) or (i) of 28
U.S.C. § 1581. See Pl.’s Resp. to Def. Mot. Summ. J. at 6-7
(“Pl.’s Resp.”). The Court does not reach these arguments here,
as it has previously considered and decided the parties’
jurisdictional dispute. Order to Show Cause and Memorandum (May
30, 2001).
Consol. Court No. 97-01777 Page No. 4
imported merchandise that is sold in the United States below its

fair market value and materially injures or threatens to injure a

domestic industry. See 19 U.S.C. § 1673d. These orders impose

antidumping duties reflecting the difference between the foreign

exporter’s sales price and the domestic price of the subject

merchandise. See 19 U.S.C. § 1673e(a)(1). Upon the entry of

merchandise covered by an antidumping order, an importer is

required to make a deposit of estimated duties. See 19 U.S.C. §

1673e(a)(3).

The actual liquidation3 of entries subject to an antidumping

order may occur years after importation. Before final liquidation,

any interested party may request an administrative review of the

antidumping order. See 19 U.S.C. § 1675. The final results of

such a review serve as the basis for the actual assessment of

antidumping duties on entries of merchandise covered by Commerce’s

determination. 19 U.S.C. § 1675(a)(2). Commerce publishes the

final results of an administrative review in the Federal Register,

and later issues liquidation instructions to Customs directing that

agency to collect antidumping duties at the rates determined in the

review proceeding. Id.; 19 C.F.R. § 353.53a(c)(8); see Consol.

Bearings Co. v. United States, 348 F.3d 997, 1002 (Fed. Cir. 2003)

(“Commerce’s liquidation instructions direct Customs to implement

3
Liquidation is defined as “the final computation or
ascertainment of the duties or drawback accruing on an entry.”
19 C.F.R. § 159.1 (1988).
Consol. Court No. 97-01777 Page No. 5
the final results of administrative reviews.”); J.S. Stone, Inc. v.

United States, 27 CIT ___, ___, 297 F. Supp. 2d 1333, 1338 (2003)

(“Commerce issues its final results [of the administrative review]

and directs Customs to collect the appropriate antidumping

duties.”). If an interested party fails to request an

administrative review, Commerce generally directs Customs to

liquidate the merchandise at the cash deposit rates in effect at

the time the merchandise entered the United States, which rate is

published in the Federal Register as the “all others” cash deposit

rate, see J.S. Stone, Inc., 27 CIT at __, 297 F. Supp. 2d at 1344

(internal citation omitted); 19 C.F.R. § 353.53a(d)(1),4 unless

that party received an individual rate in the original

investigation. Antidumping and Countervailing Duty Proceedings:

Assessment of Antidumping Duties, 68 Fed. Reg. 23,954, 23,959

(Dep’t Commerce May 6, 2003) (notice of policy concerning

4
For the full text of 19 C.F.R. § 353.53a(d)(1), see infra
p. 31.
Effective April 27, 1989, Commerce’s regulations were
revised to conform to the provisions of the Trade and Tariff Act
of 1984. See Antidumping Duties, 54 Fed. Reg. 12,742, 12,742
(Dep’t Commerce Mar. 28, 1989) (final rule); Antidumping Duties,
54 Fed. Reg. 13,294, 13,294 (Dep’t Commerce Mar. 31, 1989)
(correcting the effective date of the final rule issued three
days earlier). The revisions reorganized the regulations,
renumbering this provision, known as the automatic assessment
regulation, to 19 C.F.R. § 353.22(e). See Antidumping Duties, 54
Fed. Reg. at 12,756. That provision was again renumbered to its
current regulatory provision, 19 C.F.R. § 351.212(c)(1), as of
June 18, 1997. See Antidumping Duties; Countervailing Duties, 62
Fed. Reg. 27,296, 27,296, 27,392 (Dep’t Commerce May 19, 1997)
(final rule) (“1997 Rule”).
Consol. Court No. 97-01777 Page No. 6
assessment of antidumping duties) (“Assessment Notice”).

Defendant Jabsco, a division of ITT Corporation, manufactured

and sold marine and other liquid pumps, which incorporated

cylindrical roller bearings and/or radial ball bearings, types of

antifriction bearings, in the United States. Jt. Statement Mat’l

Facts Not in Dispute, Def.’s Ex. 1 paras. 1-3 (“Jt. Stat.”).5

Jabsco imported through the Port of Los Angeles seventy entries of

bearings from a related party in the United Kingdom, ITT Jabsco UK

(“Jabsco UK”), between November 1988 and April 1991. Id. paras. 5-

7. Jabsco UK, which also manufactured and sold marine and other

liquid pumps incorporating the same bearing components, purchased

the bearings from a division of SKF Ltd. in the United Kingdom.

See id. paras. 3-4, 6; Letter from Rufus E. Jarman, Jr., Barnes,

Richardson & Colburn, to Imp. Specialist Androvich, Dist. Dir. of

Customs, Customs, Pl.’s Ex. 2 at 1 (June 5, 1992); Jabsco’s

Responses to Pl.’s First Interrogatories and Request for Production

of Documents Directed to Def., Pl.’s Ex. 1 para. 17(a) (“Jabsco’s

Inter. Resp.”). The bearings, however, were manufactured by SKF

5
The Court notes that the summary judgment record contains
evidence compiled by the parties and attached to their various
memoranda. For purposes of clarity, the Court will reference
exhibits attached to the parties original motions for summary
judgment as such: the respective party name, exhibit and the
corresponding exhibit number, followed by the pinpoint page or
paragraph reference. Defendant’s exhibit attached to its
Memorandum of Law in Response to Plaintiff’s Motion for Summary
Judgment will be referenced as “Def.’s Resp. Ex. 1.” Also,
Customs’ incorporation by reference of an exhibit from a
previously filed motion will be cited as “Pl.’s Orig’l Ex. 5d.”
Consol. Court No. 97-01777 Page No. 7
companies located in France, Germany, and Italy. See Jt. Stat.,

Def.’s Ex. 1 para. 3; Pl.’s Mem. Supp. Mot. Summ. J. at 3 (“Pl.’s

Mem.”). Upon receipt, Jabsco UK placed the bearings into its

inventory and shipped them to Jabsco as needed. Jabsco’s Inter.

Resp., Pl.’s Ex. 1 para. 5(a).

Jabsco described the bearings entered between November 1988

and August 1990 as “pump parts” on the Entry Summaries; entries

made between September 1990 and April 1991 were either described as

“needle roller bearings” or “pump parts.” Jt. Stat., Def.’s Ex. 1

paras. 9-10. Customs subsequently liquidated the entries as

identified between December 1988 and December 1991, id. para. 8,

incorrectly classifying the bearings as other parts of pumps for

liquids under subheading 8413.91.90 of the Harmonized Tariff

Schedule of the United States (“HTSUS”),6 19 U.S.C. § 1202, or Item

660.97 of the Tariff Schedules of the United States (“TSUS”), the

predecessor classification statute, or as needle roller bearings

under subheading 8482.40.00, HTSUS. See Jt. Stat., Def.’s Ex. 1

paras. 12-13.7

6
The HTSUS became effective on January 1, 1989. Omnibus
Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, §
1217, 1988 U.S.C.C.A.N. (102 Stat.) 1107, 1163; Rollerblade, Inc.
v. United States, 112 F.3d 481, 483 (Fed. Cir. 1997).
7
Merchandise classifiable under subheading 8413.91.90,
HTSUS, includes:

8413 Pumps for liquids, whether or not fitted with
a measuring device; liquid elevators; part
thereof . . .:
Consol. Court No. 97-01777 Page No. 8
Properly identified at the time of entry, the bearings would

have been subject to pending antidumping duty investigations and

subsequent orders. Id. para. 14. Jabsco neither made any cash

deposits of estimated antidumping duties, nor participated in any

of Commerce’s review proceedings involving the bearings. Id.

paras. 19-20. Rather, on October 30, 1991, Jabsco voluntarily

disclosed to Customs that it had incorrectly identified the seventy

bearing entries as “pump parts” or “needle roller bearings” on its

Entry Summaries, a violation of 19 U.S.C. § 1592(a).8 See Jt.

. . .
Parts:
8413.91 Of pumps:
. . .
8413.91.90 Other.

Subheading 8413.91.90, HTSUS (1989-91); U.S. Int’l Trade Comm’n
Report to Congress and the Pres., Investigation with Respect to
the Operation of the Harmonized System Subtitle of the Omnibus
Trade and Competitiveness Act of 1988, at 10 & n.100 (June 1990)
(“ITC Report”). Merchandise classifiable under Item 660.97,
TSUS, includes:

Pumps for liquids, whether or not fitted with a
measuring devices; . . . and parts thereof:
. . .
660.97 Other.

Item 660.97, TSUS (1988); ITC Report at 7 n.54. Merchandise
classifiable under subheading 8482.40.00, HTSUS, includes:

8482 Ball or roller bearings, and parts thereof:
. . .
8482.40.00 Needle roller bearings.

Subheading 8482.40.00, HTSUS (1989-91); ITC Report at 10 & n.100.

8
For the full text of 19 U.S.C. § 1592(a), see infra p. 23.
Consol. Court No. 97-01777 Page No. 9
Stat., Def.’s Ex. 1 paras. 12-13, 46-47; Letter from Rufus E.

Jarman, Jr., Barnes, Richardson & Colburn, to Dist. Dir. of

Customs, Customs, Pl.’s Ex. 3 at 1-2 (Oct. 30, 1991) (“Prior

Disclosure Letter”).9 That letter offered to tender “any” actual

lost duties within thirty days of Customs’ notification of its

9
Jabsco contends that had it been on notice that its
bearings were subject to antidumping duties, among other things,
it may have participated in the administrative review
proceedings. Def.’s Mem. at 18 n.4, 29. Jabsco, however, fails
to provide any affidavits or other evidence to support its
contention. Because Jabsco’s contention lacks support on the
record, and is therefore mere speculation, the Court does not
reach this argument. Kerzer v. Kingly Mfg., 156 F.3d 396, 400
(2d Cir. 1998) (“Conclusory allegations, conjecture, and
speculation . . . are insufficient to create a genuine issue of
fact.”) (internal citation omitted); Novartis Corp. v. Ben Venue
Labs., Inc., 271 F.3d 1043, 1046 (Fed. Cir. 2001) (“Summary
judgment must be granted against a party who has failed to
introduce evidence sufficient to establish the existence of an
essential element of that party’s case, on which the party will
bear the burden of proof at trial.”) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986)).
Jabsco makes no claim that it was unaware of its errors at
the time of the administrative reviews. The Court notes
therefore that Jabsco could have participated in the
administrative review proceedings, in addition to filing its
prior disclosure letter, as the anniversary months for interested
parties to initiate an administrative review of Commerce’s final
results occurred in May 1990 for the first review and May 1991
for the second. See 19 C.F.R. § 353.53a(a); Antifriction
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof
from Germany, 54 Fed. Reg. 18,992, 18,992 (Dep’t Commerce May 3,
1989) (final determinations of sales at less than fair value);
Antifriction Bearings (Other Than Tapered Roller Bearings) and
Parts Thereof from France, 54 Fed. Reg. 19,092, 19,092 (Dep’t
Commerce May 3, 1989) (final determinations of sales at less than
fair value); Antifriction Bearings (Other Than Spherical Plain
and Tapered Roller Bearings) and Parts Thereof from Italy; and
Spherical Plain Bearings and Parts Thereof, from Italy, 54 Fed.
Reg. 19,096, 19,096 (Dep’t Commerce May 3, 1989) (final
determinations of sales at less than fair value).
Consol. Court No. 97-01777 Page No. 10
calculation of duties. Prior Disclosure Letter, Pl.’s Ex. 3 at 2.

Five days later, Customs notified Jabsco that it was required

to pay $36,344.50 in regular customs duties and $681,127.50 in

antidumping duties. Jt. Stat., Def.’s Ex. 1 para. 49. Payment was

required within thirty days for Jabsco to perfect its “prior

disclosure.” Id.10 Customs’ calculation of such duty amounts was

10
Title 19 C.F.R. § 162.74(a) states that:

[a] prior disclosure is made if the person concerned
discloses the circumstances of a violation (as defined
in [19 C.F.R.] § 162.71(e) of this part), in writing to
[Customs] before, or without knowledge of, the
commencement of a formal investigation of that
violation, and makes a tender of any actual loss of
duties.

19 C.F.R. § 162.74(a). The phrase “discloses the circumstances
of [a] violation” is defined in the regulations at 19 C.F.R. §
162.71(e) and provides:

(e) Discloses the circumstances of [a] violation. When
used in [19 C.F.R.] § 162.74(a), the term “discloses
the circumstances of the violation” means the act of
providing to Customs a written statement which:
(1) Identifies the class or kind of merchandise
involved in the violation;
(2) Identifies the importation included in the
disclosure by entry number or by indicating each
Customs port of entry and the approximate dates of
entry;
(3) Specifies the material false statements or
material omissions made; and
(4) Sets forth to the best of the violator’s
knowledge, the true and accurate information or data
which should have been provided in the entry documents,
and states that the person will provide any information
or data which is unknown at the time of disclosure
within [thirty] days of the initial disclosure date or
within an extension of the [thirty]-day period as
[Customs] may permit in order for the person to obtain
the information or data.
Consol. Court No. 97-01777 Page No. 11
based on the cash deposit rates for estimated antidumping duties

and the application of liquidation instructions from Commerce for

antifriction bearings subject to antidumping duties at the time

Jabsco’s bearings entered the United States. Id. para. 50. The

first instructions, dated June 25, 1991, directed Customs to

liquidate all entries of bearings during the period November 9,

1988 through April 30, 1990 and assess antidumping duties at the

cash deposit rate required at the time of entry, unless the company

had requested an administrative review. Id. para. 31. Those

instructions were corrected on June 9, 1992. As corrected, the

instructions ordered Customs to liquidate bearing entries using the

“all others” rate if the bearings were exported by original

equipment manufacturers (“OEMs”) to a related affiliate in the

United States and the OEMs had not requested administrative review,

but only if the bearings were originally produced by a manufacturer

listed in the June 25, 1991 instructions. Id. para. 32. The

instructions further noted that if the exporter was not an OEM, but

the other conditions existed, Customs should continue to suspend

all bearing entries. Id. The second set of instructions, dated

June 10, 1992, repeated the June 25, 1991 and June 9, 1992

instructions, but applied to bearing entries during the period May

19 C.F.R. § 162.71(e).
Consol. Court No. 97-01777 Page No. 12
1, 1990 through April 30, 1991. See id. para. 39.11 Jabsco

subsequently remitted the customs duties on December 18, 1992, but

informed Customs that it disagreed with the amount of antidumping

duties assessed. Id. paras. 51-52.

A year later, on December 22, 1993, Customs informed Jabsco

that it had negligently “‘failed to exercise due care in

ascertaining or recording the truth of the facts or in ascertaining

[its] obligations under Customs laws.’” Id. para. 53 (quoting

Demand for Duty Statement, Pl.’s Ex. 5 at 3 (Dec. 22, 1993)).12

Customs further demanded that Jabsco owed $619,515.33 in

antidumping duties under 19 U.S.C. § 1592(d),13 and issued a

prepenalty notice in the amount of $217,874.16, the interest on the

antidumping duties owed by Jabsco from the dates the bearings

entered the United States to the date of the notice. Jt. Stat.,

Def.’s Ex. 1 paras. 54-55. Jabsco unsuccessfully appealed Customs’

11
The June 25, 1991 and June 9, 1992 instructions applied to
bearing entries from Germany, France and Italy. See Jt. Stat.,
Def.’s Ex. 1 paras. 31-32. The June 10, 1992 instructions,
however, were formulated into two separate instructions; one
instruction, message number 216115 applied only to bearing
entries from Germany, while the second, message number 2162114,
applied only to bearing entries from France and Italy. Id. para.
39. The Court notes that collectively, these three instructions
are hereinafter referred to as “Commerce’s liquidation
instructions,” except where otherwise specified.
12
Jabsco does not dispute its negligence in this case.
E.g., Def.’s Mem. at 30 (stating that “Jabsco was no more
‘negligent’ than Customs”).
13
For the full text of 19 U.S.C. § 1592(d) see infra note
19.
Consol. Court No. 97-01777 Page No. 13
calculation of the antidumping duties a month later. Id. paras.

56, 58.

Customs subsequently informed Jabsco on August 9, 1996 that it

was required to remit the full amount of antidumping duties within

fourteen days for Jabsco to perfect its prior disclosure; the

letter also stated that Customs would issue a penalty if full

payment of those duties was not received. Jt. Stat., Def.’s Ex. 1

para. 59. Eleven days later, Jabsco tendered the full amount of

antidumping duties owed. Id. para. 60.

In January 1997, Customs confirmed that Jabsco had perfected

it prior disclosure. Id. para. 61. Seven months later, on July

21, 1997, Customs issued a Notice of Penalty to Jabsco in the

amount of $109,418.81, the interest on the antidumping duties from

the dates the entries were filed to the date of Jabsco’s prior

disclosure on October 30, 1991. Id. para. 62. Jabsco’s refusal

to pay the penalty assessed sparked this lengthy litigation.

Standard of Review

Pursuant to USCIT Rule 56, summary judgment is appropriate “if

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the

moving party is entitled to judgment as a matter of law.” USCIT

Rule 56(c); see also Celotex Corp. v. Catrett, 477 U.S. at 322.
Consol. Court No. 97-01777 Page No. 14
“[A] party opposing a properly supported motion for summary

judgment ‘may not rest upon the mere allegations or denials of his

pleading, but . . . must set forth specific facts showing that

there is a genuine issue for trial.’” Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986) (internal quotation omitted). The

Court credits the nonmovant’s evidence and draws all justifiable

inferences from that evidence in the nonmovant’s favor. Netscape

Communications Corp. v. Konrad, 295 F.3d 1315, 1319 (Fed. Cir.

2002) (citing Anderson, 477 U.S. at 255). The nonmovant’s burden

to produce specific facts, however, is only triggered after the

movant has met its initial burden of making a prima facie showing

that the nonmovant cannot prevail at trial. See Celotex Corp., 477

U.S. at 323.

The Court reviews the parties’ motions for summary judgment de

novo, as the instant action was brought under the penalty

provisions codified at 19 U.S.C. § 1592. 19 U.S.C. § 1592(e)(1);

see also United States v. Golden Ship Trading Co., slip. op. 01-07,

at 5 (CIT Jan. 24, 2001) (same); United States v. Snuggles, Inc.,

20 CIT 1057, 1058, 937 F. Supp. 923, 925 (1996) (same) (internal

citations omitted).

Issues Presented

The Court must decide whether Customs properly calculated

Jabsco’s civil penalty in the amount of $109,418.81. The Court’s
Consol. Court No. 97-01777 Page No. 15
determination necessarily turns on whether Customs properly

calculated the actual loss of antidumping duties Jabsco owed. The

Court will identify the parties’ arguments first before addressing

the issues presented.

Parties’ Arguments

Plaintiff argues that Customs properly calculated the amount

of antidumping duties of which the United States was deprived as a

result of Jabsco’s negligent violation of 19 U.S.C. § 1592(a).

Pl.’s Mem. at 13, 24. Plaintiff makes two alternative arguments in

support of that contention. First, Plaintiff contends that the

“all others” cash deposit rate was the applicable rate because

Jabsco and Jabsco UK were OEMs at the time Jabsco entered the

bearings, and as such, would have been required by Commerce’s

liquidation instructions to pay that rate on the bearing entries if

entered properly. See Pl.’s Mem. at 19-20. Jabsco argues in

response that while Jabsco UK and Jabsco could be considered OEMs

of products such as marine and other liquid pumps, they do not

manufacture antifriction bearings, and therefore, cannot be

considered OEMs. Def.’s Resp. Mem. to Pl.’s Mot. Summ. J. at 9

(“Def.’s Resp.”). Moreover, Jabsco argues that Plaintiff has

failed to clearly specify its definition of an OEM as it applies to

this case. Id.

Second, assuming Jabsco and Jabsco UK are not OEMs, Plaintiff
Consol. Court No. 97-01777 Page No. 16
contends that the “all others” cash deposit rate still would have

applied to Jabsco’s entries of bearings under Commerce’s

liquidation instructions because Jabsco failed to participate in

Commerce’s administrative review proceedings and SKF did not

include those entries in any administrative review. See Pl.’s Mem.

at 13-14, 23 (citing J.S. Stone, Inc. v. United States, 27 CIT at

___, 297 F. Supp. 2d at 1333); Pl.’s Mem. Resp. to Questions Raised

by the CIT During July 2, 2002 Teleconference at 6-9 & n.314 (“Pl.’s

14
Customs cites to several other liquidation instructions
issued by Commerce between December 1996 and November 1999 to
support its contention. Pl.’s Teleconf. Mem. at 7-9 & n.3
(citing E-mail from Dir., Imp. Operations, Commerce, to CMC Dirs.
and Port Dirs., Customs, Liquidation Instructions for
Antifriction Bearings (Other Than Tapered Roller Bearings) &
Parts Thereof From Germany by SKF Germany (A-428-201, 203, 205)
(Dec. 6, 1996) (on file with the Court); E-mail from Dir., Imp.
Operations, Commerce, to CMC Dirs. and Port Dirs., Customs,
Liquidation Instructions for AFBS From Germany Produced by SKF
Germany (A-427-201, 203, 205) (May 12, 1998) (on file with the
Court); E-mail from Dir., Imp. Operations, Commerce, to CMC Dirs.
and Port Dirs., Customs, Liquidation Instructions for AFBS and
Parts Thereof From Germany For the Period 11/9/88 Through 4/30/90
(A-428-201, 203, 205) (Aug. 4, 1998) (on file with the Court); E-
mail from Dir., Trade Enforcement & Control, Commerce, to Dirs.
of Field Operations and Port Dirs., Customs, Liquidation
Instructions for AFBS, Other Than Tapered Roller Bearings, and
Parts Thereof From Germany (A-428-201, 203, 205) (Nov. 4, 1999)
(on file with the Court)). In particular, on December 6, 1996,
Commerce issued confidential liquidation instructions covering
cylindrical bearings and ball bearings, among other types of
antifriction bearings, from Germany for the period November 9,
1988 to April 30, 1990. E-mail from Dir., Imp. Operations,
Commerce, to CMC Dirs. and Port Dirs., Customs, Liquidation
Instructions for Antifriction Bearings (Other Than Tapered Roller
Bearings) & Parts Thereof From Germany by SKF Germany (A-428-201,
203, 205) (Dec. 6, 1996) (on file with the Court). Those
instructions directed Customs to only liquidate antifriction
bearing entries manufactured and imported by SKF companies (and
other named companies not relevant here). Id.; see also E-mail
Consol. Court No. 97-01777 Page No. 17

from Dir., Imp. Operations, Commerce, to CMC Dirs. and Port
Dirs., Customs, Liquidation Instructions for Antifriction
Bearings (Other Than Tapered Roller Bearings) & Parts Thereof
From France Produced by SKF France (A-427-201, A-427-205) (Dec.
6, 1996) (on file with the Court) (applying the same instructions
to antifriction bearings from France for the same period); E-mail
from Dir., Imp. Operations, Commerce, to CMC Dirs. and Port
Dirs., Customs, Liquidation Instructions for Antifriction
Bearings (Other Than Tapered Roller Bearings) & Parts Thereof
From Italy By SKF Italy (A-475-201, 203) (Dec. 6, 1996) (on file
with the Court) (applying the same instructions to antifriction
bearings from Italy for the same period). The instructions did
not specifically mention Jabsco or Jabsco UK.
Over seventeen months later, Commerce again issued
confidential liquidation instructions covering cylindrical
bearings and ball bearings, among other types of antifriction
bearings, from Germany for the period May 1, 1990 to April 30,
1991. E-mail from Dir., Imp. Operations, Commerce, to CMC Dirs.
and Port Dirs., Customs, Liquidation Instructions for AFBS From
Germany Produced by SKF Germany (A-427-201, 203, 205) (May 12,
1998) (on file with the Court). Those instructions also only
applied to antifriction bearings manufactured and imported by SKF
companies (and other specifically named exporters or importers
not relevant here). Id.; see also E-mail from Dir., Imp.
Operations, Commerce, to CMC Dirs. and Port Dirs., Customs,
Liquidation Instructions for AFBS From France Produced by SKF
France (A-427-201-012) (May 12, 1998) (on file with the Court)
(applying the same instructions to antifriction bearings from
France for the same period); E-mail from Dir., Imp. Operations,
Commerce, to CMC Dirs. and Port Dirs., Customs, Liquidation
Instructions for AFBS From Italy Produced by SKF Industries
S.P.A. (SKF Italy) (A-475-201, 203) (May 12, 1998) (on file with
the Court) (applying the same instructions to antifriction
bearings from Italy for the same period). The instructions again
did not specifically mention Jabsco or Jabsco UK.
In August 1998, Commerce directed Customs to liquidate any
suspended entries of antifriction bearings from Germany not
covered by any previous instructions for the period November 9,
1988 through April 30, 1990 at the deposit rate required at the
time of entry. E-mail from Dir., Imp. Operations, Commerce, to
CMC Dirs. and Port Dirs., Customs, Liquidation Instructions for
AFBS and Parts Thereof From Germany For the Period 11/9/88
Through 4/30/90 (A-428-201, 203, 205) (Aug. 4, 1998) (on file
with the Court). On November 4, 1999, Commerce issued the same
instructions for suspended bearings entries for the period May 1,
1990 to April 30, 1991. E-mail from Dir., Trade Enforcement &
Consol. Court No. 97-01777 Page No. 18
Teleconf. Mem.”)).15

Jabsco responds that the rate determined in the administrative

reviews for its manufacturer, SKF, applies because SKF was aware

that the bearings sold to Jabsco UK were destined for the United

Control, Commerce, to Dirs. of Field Operations and Port Dirs.,
Customs, Liquidation Instructions for AFBS, Other Than Tapered
Roller Bearings, and Parts Thereof From Germany (A-428-201, 203,
205) (November 4, 1999) (on file with the Court).
Jabsco contends that all of the liquidation instructions
upon which Plaintiff relies, including those discussed
immediately above, are inapplicable because Jabsco’s entries were
liquidated and consequently final. Def.’s Mem. at 11. Jabsco
argues that the entries were therefore out of the reach of
Commerce’s ability to assess antidumping duties. Id. Jabsco,
however, is wrong. The instructions dated prior to Customs’
assessment of the antidumping duties on December 22, 1993 are
probative of the decisions Commerce would have made but-for
Jabsco’s violation of § 1592(a), and “Commerce, not Customs,
calculates antidumping duties.” Mitsubishi Elecs. Am., Inc. v.
United States, 44 F.3d 973, 976 (Fed. Cir. 1994); see 19 U.S.C. §
1675(a)(2).
The later instructions described immediately above, however,
hold no probative value because those instructions came after
December 22, 1993, the date Customs’ assessed the antidumping
duties Jabsco owed, and after August 9, 1996, the date Customs
confirmed on that the amount assessed was properly calculated.
In other words, these later instructions did not exist at the
time Customs determined how Commerce would have assessed the
antidumping duties but-for Jabsco’s negligent violation of §
1592(a). Customs’ reliance on the later instructions is
therefore misplaced. Consequently, the Court will not consider
the instructions described immediately above in support of
Customs’ motion for summary judgment.
15
Plaintiff’s Response Memorandum to Defendant’s Motion for
Summary Judgment incorporates by reference all arguments
contained in a previously submitted memorandum entitled
Plaintiff’s Memorandum in Response to Questions Raised by the
Court of International Trade, per the Honorable Donald C. Pogue,
Judge, During the July 2, 2002, Teleconference, filed on July 22,
2002. Pl.’s Resp. at 8 n.3.
Consol. Court No. 97-01777 Page No. 19
States. See Def.’s Resp. at 4 (citing Gill Aff., Def.’s Ex. 2;16

Assessment Notice, 68 Fed. Reg. at 23,954). Jabsco claims that,

because SKF possessed such knowledge, Commerce would have concluded

that SKF was the source of the dumping activity and applied that

company’s rates against Jabsco’s entries. Id. at 5-6 (citing

Antifriction Bearings (Other Than Tapered Roller Bearings) and

Parts Thereof From the Federal Republic of Germany, 56 Fed. Reg.

31,692, 31,747 (Dep’t Commerce July 11, 1991) (final results of

antidumping duty administrative review) (“First Review Determ.”)).

In response to Jabsco’s arguments, Customs contends Jabsco has

failed to present any evidence demonstrating that the SKF companies

possessed such knowledge for two reasons. First, the Court should

disregard the Gill affidavit because the affiant attests to facts

beyond his personal knowledge in violation of USCIT R. 56(e),

thereby rendering the affidavit inadmissible. See Pl.’s Resp. at

4-6.17 Second, Commerce previously concluded in the administrative

reviews that SKF did not know that its sales to Jabsco UK were used

other than for home market consumption during the relevant periods

of review and therefore did not include such sales in those

16
Jabsco submitted the affidavit of Michael Gill (“Gill
affidavit”), Managing Director of Jabsco UK, in support of its
knowledge contention.
17
The Court will not reach Customs’s contention that the
Court should also disregard Jabsco’s exhibit 3, containing an
affidavit of Larry K. Dart, because Jabsco does not specifically
rely on or cite to that evidence for support of any of its
contentions.
Consol. Court No. 97-01777 Page No. 20
reviews. See id. at 10-12 (citing First Review Determ., 56 Fed.

Reg. at 31,741).

In its motion for summary judgment, Jabsco argues that SFK’s

cash deposit rates are the applicable rates for assessing the

actual loss of antidumping duties. Jabsco contends it was

Commerce’s policy at the time the bearings entered the United

States to apply the manufacturer’s cash deposit rates to any

reseller importing such merchandise regardless of the importer’s

participation in the review, even though that policy was unclear,

inconsistent, and confusing. See Def.’s Mem. at 18-21 (citing

Consol. Bearings Co., 348 F.3d at 1005-06; ABC Int’l Traders, Inc.

v. United States, 19 CIT 787, 790 (1995); Nissei Sangyo Am., Ltd.

v. United States, slip. op. 03-105 (CIT Aug. 18, 2003); Renesas

Tech. Am., Inc. v. United States, slip. op. 03-106 (CIT Aug. 18,

2003); Assessment Notice, 68 Fed. Reg. at 23,955).18

18
Jabsco sets forth a second argument in support of its
contention that the rates determined in the administrative
reviews for SKF should apply in this case. Because SKF’s annual
administrative review rates are more accurate than the cash
deposit rates, see Def.’s Mem. at 26, because Customs held the
“sole responsibility” for properly classifying the bearings at
the time of entry, id. at 28, and because bearings were commonly
misidentified as “pump parts” between November 1988 and April
1990, id. at 13 (citing Riedl Aff., Def.’s Ex. 4), Jabsco urges
the Court to apply its equity powers and calculate the
antidumping duties under SKF’s first and second administrative
review rates. Id. at 29-30; see also Def.’s Reply to Pl.’s Resp.
to Mot. Summ. J. at 2, 11. The Court does not reach this
argument, because an equitable determination of what rate should
apply requires the Court to weigh the factual circumstances
presented and make credibility determinations. The Court simply
cannot perform that analysis on summary judgment. McKesson HBOC,
Consol. Court No. 97-01777 Page No. 21
With respect to the penalty assessed, Plaintiff argues that

Customs calculated an appropriate penalty under 19 U.S.C. §

1592(c)(4)(B). See Pl.’s Mem. at 25. Plaintiff claims that the

penalty here consists of the amount of interest accrued from the

dates of liquidation of Jabsco’s entries to the date of Jabsco’s

Inc. v. Islamic Republic of Iran, 271 F.3d 1101, 1110 (D.C. Cir.
2001) (“[T]he role of the court at summary judgment is not to
resolve the issue, but to determine whether the available
evidence creates a genuine issue of fact for trial.”) (internal
citation omitted); Gallo v. Prudential Residential Servs., Ltd.,
22 F.3d 1219, 1224 (2d Cir. 1994) (noting that a trial court’s
role on a motion for summary judgment “in short, is confined . .
. to issue-finding; it does not extend to issue-resolution”).
“Credibility determinations, the weighing of evidence, and the
drawing of legitimate inferences from the facts are jury
functions, not those of a judge, whe[n] he is ruling on a motion
for summary judgment . . . .” Anderson, 477 U.S. at 255; see
also Beachcombers, Int’l, Inc. v. Wildewood Creative Prods.,
Inc., 31 F.3d 1154, 1160 (Fed. Cir. 1994) (explaining that the
jury’s function is to weigh the evidence before it and make
credibility determinations therefrom, and that the court cannot
usurp this role). At the summary judgment stage, the court’s
function is to determine whether there is sufficient evidence for
a reasonable fact finder to return a verdict in the nonmovant’s
favor and warrant a trial. See Anderson, 477 U.S. at 249
(internal citation omitted). Because the Court does not reach
Jabsco’s argument, it also need not discuss Plaintiff’s
responses.
The issue is also not appropriate for trial because the
penalty statute mandates the imposition of duties that would have
been assessed but-for the § 1592 violation; the Court simply has
no discretion where, as here, the amount of lawful antidumping
duties which should have been collected is determined as a matter
of law. See infra pp. 23-24; see Porter v. Warner Holding Co.,
328 U.S. 395, 398 (1946) (stating that a federal court’s
equitable jurisdiction is only limited when a “clear and valid
legislative command” exists, and that “[u]nless a statute in so
many words, or by a necessary or inescapable inference, restricts
the court’s jurisdiction in equity, the full scope of that
jurisdiction is to be recognized and applied”) (internal citation
omitted).
Consol. Court No. 97-01777 Page No. 22
disclosure letter on October 30, 1991, rather than, as statutorily

permissible, the date Jabsco actually tendered the antidumping

duties on August 6, 1996. Id. at 26. Moreover, Plaintiff claims

that no penalty was assessed on the customs duties which Jabsco

remitted in 1993. For these reasons, Plaintiff contends the amount

of penalty assessed here was “substantially less than the actual

maximum penalty afforded under § 1592(c)(4)(B).” Id. at 27.

In response, although Jabsco contends that the penalty amount

is the maximum penalty statutorily permitted, Jabsco also asserts

that Customs failed to consider the numerous factors set forth in

United States v. Yuchius Morality Co., slip. op. 02-124, at 23 (CIT

Oct. 18, 2002) (citing United States v. Complex Mach. Works, Co.,

23 CIT 942, 949-50, 83 F. Supp. 2d 1307, 1315 (1999)) in assessing

the penalty, and therefore, the penalty amount is inappropriate.

See Def.’s Resp. at 10, 13. Jabsco further argues that Customs did

not extend any special treatment to it in calculating the penalty

amount, but rather, assessed the penalty consistent with its prior

disclosure practice. See id. at 12-13 (citing Customs Mem. from

Charles D. Ressin, Chief, Penalties Branch, to Office of Fines,

Penalties and Forfeitures, Customs, Jabsco Products: Los Angeles

Port Case No. 94-2704-20283, Def.’s Resp. Ex. 1 para. 2 (July 18,

1996)).
Consol. Court No. 97-01777 Page No. 23
Discussion

A. Calculation of Antidumping Duties

Neither party disputes that, in accordance with 19 C.F.R. §

162.74(a), Jabsco voluntarily disclosed the circumstances of its

negligent violation of 19 U.S.C. § 1592(a) to Customs on October

30, 1991. Jt. Stat., Def.’s Ex. 1 para. 46. Subsection 1592(a)

states, among other things, that no person may negligently enter

merchandise into the United States and deprive the United States of

any lawful duty thereon. See 19 U.S.C. § 1592(a); see also United

States v. Blum, 858 F.2d 1566, 1568 (Fed. Cir. 1988).

Specifically, 19 U.S.C. § 1592(a) provides, in pertinent part:

Without regard to whether the United States is or may be
deprived of all or a portion of any lawful duty thereby
no person, by . . . negligence —-
(A) may enter, introduce, or attempt to enter or
introduce any merchandise into the commerce of the United
States by means of –-
(i) any document, written or oral statement, or act
which is material and false, or
(ii) any omission which is material . . . .

19 U.S.C. § 1592(a). Once Customs determines that a violation of

§ 1592(a) has occurred, it must restore all lost lawful duties

resulting from such violation of subsection (a) and issue a written

penalty claim. 19 U.S.C. § 1592(b)(2), (d).19 The Federal Circuit

19
Subsection (b) describes the procedures Customs follows in
pursuing a claim for a monetary penalty resulting from a
violation of subsection (a). 19 U.S.C. § 1592(b). Subsection
(d) states in part:

[I]f the United States has been deprived of lawful
duties as a result of a violation of subsection (a) of
Consol. Court No. 97-01777 Page No. 24
has defined the phrase “lawful duties” as including “those [duties]

that would have been collected by the United States but[-]for the

violation of [§ 1592(a)].” United States v. Blum, 858 F.2d at

1569. Thus, Customs must restore all lost duties which would have

been collected but-for the party’s negligent entry of merchandise.

19 U.S.C. § 1592(a), (d); see also Pentax Corp. v. Robison, 125

F.3d 1457, 1463 (Fed. Cir. 1997) (stating that § 1592(d) requires

“nothing less than but-for causation”); Blum, 858 F.2d at 1570

(“Subsection (d) allows the United States to recover duties that

would have been paid but-for conduct that violates subsection

(a).”); United States v. Menard, Inc., 16 CIT 410, 416, 795 F.

Supp. 1182, 1187 (1992) (“[T]he purpose of § 1592(d) is to make the

government whole for revenue lost as a result of submission of

false statements to Customs.”).

At the time of entry, the parties agree that the bearings

should have been subject to antidumping duties.20 Because Jabsco

negligently misidentified the bearings, Customs did not collect any

antidumping duties. But-for Jabsco’s negligent misidentification,

this section, the appropriate customs officer shall
require that such lawful duties be restored, whether or
not a monetary penalty is assessed.

19 U.S.C. § 1592(d).
20
The parties also agree that the bearings were subject to
customs duties. Jt. Stat., Def.’s Ex. 1 para. 51. Jabsco has
not presented any legal objections to the assessment of those
duties.
Consol. Court No. 97-01777 Page No. 25
Customs would have collected antidumping duties at the cash deposit

rates in effect at the time Jabsco made the bearings entries. The

parties do not dispute these points; instead, the parties dispute

the applicable rates at which the entries would have been

liquidated after the completion of the administrative reviews.

Neither the penalty nor the antidumping statutory provisions

explain how Customs should calculate the lost antidumping duties in

this case. Rather, but-for Jabsco’s negligent violation of §

1592(a), Commerce, as statutorily mandated, would have determined

the applicable duty rates during the first and second

administrative review proceedings. See 19 U.S.C. § 1675(a)(2);

Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973, 976

(Fed. Cir. 1994) (“Commerce, not Customs, calculates antidumping

duties.”); J.S. Stone, Inc. v. United States, 27 CIT at __, 297 F.

Supp. 2d at 1338 (“Customs’ role in liquidating antidumping duties

is ministerial. Customs has no authority to modify Commerce’s

determination and may liquidate entries only at the rate set by

Commerce.”) (citing Royal Business Machs., Inc. v. United States,

1 CIT 80, 87 & n.18, 507 F. Supp. 1007, 1014 & n.18 (1980)). Over

the course of such review proceedings, Commerce would have examined

data related to the manufacturer and any third-party resellers

exporting the subject merchandise to the United States and rendered

final results identifying the applicable antidumping duties.

Subsequently, Commerce would have issued liquidation instructions
Consol. Court No. 97-01777 Page No. 26
implementing those final results to Customs.

In the instant case, Customs argues that, but-for Jabsco’s

violation of § 1592(a), the “all others” cash deposit rate would

have been assessed against the bearing entries for two independent

reasons. First, Plaintiff argues that the “all others” cash

deposit rate applies because Commerce’s liquidation instructions

direct the application of that rate against OEMs like Jabsco and

Jabsco UK. To support that contention, Customs points to Jabsco’s

concession that it was an OEM,21 and Commerce’s characterizations

of OEMs in both the Preamble to the 1997 Rule and an e-mail

transmitted after the first and second administrative reviews from

Commerce to Customs. Pl.’s Teleconf. Mem. at 2-4 (quoting 1997

Rule, 62 Fed. Reg. at 27,303; E-mail from Dir., Imp. Specialist

Div., Commerce, to Reg’l Dirs., Commercial Operations Dist., Area

and Port Dirs. of Customs, Customs, Bond and Cash Deposit Rates to

be Used for Exporters/Manufacturers of Antifriction Bearings

Subject to Antidumping, Pl.’s Orig’l Ex. 5d para. 2 (Feb. 3, 1993)

(“Feb. 3 Instruction”)). Jabsco, in response, denies that it was

an OEM in its purchase transactions of bearings because neither

Jabsco nor Jabsco UK manufacture antifriction bearings. It does

however concede that it may be an OEM with respect to its

21
As both parties concede, the Court has previously
indicated that it does not view Plaintiff’s statement as an
admission for litigation purposes. Def.’s Mem. at 14 n.2; Pl.’s
Teleconf. Mem. at 2. Accordingly, Jabsco’s statement does not
support Plaintiff’s claim.
Consol. Court No. 97-01777 Page No. 27
transactions of marine and other liquid pumps. Jabsco further

argues that Customs has failed to clearly define what constitutes

an OEM for purposes of this litigation.

Commerce’s liquidation instructions, as conceded by Customs,

do not define what constitutes an OEM.22 The Preamble describes

OEMs as “nonproducing exporters.” Pl.’s Teleconf. Mem. at 3

(quoting 1997 Rule, 62 Fed. Reg. at 27,303). Commerce’s e-mail

describes an OEM as a “related party transaction in which either

party produces goods for sale to unrelated concerns.” Pl.’s

Teleconf. Mem. at 4 (quoting Feb. 3 Instruction, Pl.’s Orig’l Ex.

5d para. 2). The message goes further to state that “[w]hile both

parent and subsidiary may jointly produce an end product, the

normal configuration is for the parent to manufacture the article

and the subsidiary to either sell and/or service those products.

It is not necessary for the domestic importer to be the

manufacturing operation.” Id.

In this case, Jabsco UK served as the exporter of the bearings

to Jabsco. Jabsco UK did not produce those bearings. Accordingly,

the record supports Customs’ contention that Jabsco UK is an OEM

under the Preamble’s description. Jabsco and Jabsco UK are related

parties and both produce marine and other liquid pumps for sale to

unrelated parties. Neither party, however, produces the bearings

22
The Court notes that Commerce’s descriptions of OEMs, upon
which Plaintiff relies, do not appear to fit the plain meaning of
the term OEMs itself.
Consol. Court No. 97-01777 Page No. 28
at issue here. Although the e-mail’s description does not limit

the manufacturing requirement to the subject merchandise of the

review, it seems inconsistent for Plaintiff to argue that Jabsco UK

constitutes an OEM under the Preamble’s characterization of that

term because Jabsco UK does not produce the subject merchandise,

antifriction bearings, and in turn, contend that the e-mail

description is satisfied because both Jabsco and Jabsco UK produce

“goods,” i.e., marine and other liquid pumps, but not antifriction

bearings. Under a plain reading of the two descriptions, it seems

that the “goods” produced should be the same in each description in

order that the descriptions may be interpreted consistently.

Consequently, without further evidence to support its claim that

Jabsco and Jabsco UK constitute OEMs, the Court cannot find that

Customs has adequately supported that claim on the record here. As

Customs has failed to produce evidence sufficient to establish the

existence of an essential element to its case, Anderson v. Liberty

Lobby, Inc., 477 U.S. at 252 (“The mere existence of a scintilla of

evidence in support of the plaintiff’s position will be

insufficient; there must be evidence on which the jury could

reasonably find for the plaintiff.”); Celotex Corp. v. Catrett, 477

U.S. at 322-23, the Court finds Customs has failed to shoulder its

initial burden demonstrating prima facie entitlement to summary

judgment with regard to its claim that the “all others” cash

deposit rate should have applied to Jabsco or Jabsco UK as an OEM.
Consol. Court No. 97-01777 Page No. 29
Alternatively, Plaintiff argues that the “all others” cash

deposit rate still applies because Jabsco did not participate in

the administrative reviews and because SKF did not include those

entries in either administrative review. Jabsco responds that the

rate determined in the administrative reviews for its manufacturer,

SKF, applies because SKF was aware that the bearings sold to Jabsco

UK were destined for the United States. Jabsco claims that because

SKF possessed such knowledge, Commerce would have concluded that

SKF was the source of the dumping activity and applied that

company’s cash deposit rates against Jabsco’s entries. Customs

makes two arguments in response: first, the Court should disregard

the Gill affidavit because that evidence contains statements beyond

the personal knowledge of the affiant, and second, Commerce

determined in the administrative reviews that SKF did not possess

such knowledge.23 Therefore, Plaintiff contends that Jabsco has

failed to present any evidence demonstrating that the SKF companies

knew the bearings in question here were destined for the United

23
Customs also cites to a comment response that Commerce
issued during the first administrative review to demonstrate both
that Jabsco cannot prove SKF knew the subject bearings were
destined for the United States and also that the bearings were
not included within the administrative reviews. Pl.’s Resp. at
10-12 (citing First Review Determ., 56 Fed. Reg. at 31,741).
Because that comment focuses on sales transactions by respondents
like SKF to OEMs in the home market, and Customs has failed to
present sufficient evidence supporting its claim that either
Jabsco UK or Jabsco were OEMs, supra pp. 27-28, the Court
concludes Commerce’s response also cannot support Customs’
contention.
Consol. Court No. 97-01777 Page No. 30
States; consequently, those entries were excluded from the

administrative review proceedings. The Court first will discuss

Customs’ contention that because Jabsco did not participate in the

administrative reviews, the “all others” cash deposit rate would

have applied, as this contention is well established in the law.

Section 1675 sets forth the framework for administrative

reviews of antidumping duty orders. Under 19 U.S.C. § 1675(a)(2),

the final results of an administrative review are “the basis for

the assessment of antidumping duties on entries of merchandise

included within the determination and for deposits of estimated

duties.” Id. This subsection, however, explicitly limits the

application of the final results of an administrative review to

those entries covered by the review. “If the review did not

examine a particular importer’s transaction, then that importer’s

entries enjoy no statutory entitlement to the rates established by

the review.” Consol. Bearings Co., 348 F.3d at 1005-06. Put

simply, the “entries” must be “covered by the determination” for

the importer to gain statutory entitlement to the review’s results

as the “basis for the assessment” of duties. Id. at 1006 (internal

citation omitted).

While Commerce is statutorily required to apply the final

results to those transactions covered in the administrative review,

subsection 1675(a)(2) does not compel or prevent Commerce from

applying the results to entries outside the review. See Consol.
Consol. Court No. 97-01777 Page No. 31
Bearings Co., 348 F.3d at 1006. Commerce’s regulations, however,

state that if the agency does not receive a timely request for an

administrative review, Commerce will assess the subject merchandise

at the cash deposit rates of estimated antidumping duties required

at the time of entry. 19 C.F.R. § 353.53a(d)(1). Often referred

to as the “automatic assessment regulation,” it reads:

[I]f [Commerce] does not receive a timely request [for an
administrative review], [Commerce] . . . will instruct
[Customs] to assess antidumping duties on the merchandise
. . . at rates equal to the cash deposit of (or bond for)
estimated antidumping duties required on that merchandise
at the time of entry, or withdrawal from warehouse, for
consumption. . . .

19 C.F.R. § 353.53a(d)(1); see also Mitsubishi Elecs. Am., Inc., 44

F.3d at 976-77 (“[A]n interested party [wanting] Commerce to assess

duties at the actual, rather than the estimated, rate of dumping .

. . may request administrative review of the duties . . . . If no

party makes such a request, Commerce instructs Customs

automatically to assess duties at the estimated rate.”); see

generally Floral Trade Council v. United States, 17 CIT 392, 394-

98, 822 F. Supp. 766, 768-71 (1993). Thus, regardless of the

structure of a sales transaction, at the time in question here,

Commerce applied the “all others” cash deposit rate to importers

who failed to participate in a review, provided the importer was

not assigned an individual rate in an earlier proceeding. See 19

C.F.R. § 353.53a(d)(1); Antidumping Duties, 54 Fed. Reg. 12,742,

12,757 (Dep’t Commerce Mar. 28, 1989) (final rule) (stating that
Consol. Court No. 97-01777 Page No. 32
“when no interested party requests an administrative review,

[Commerce] will instruct Customs to liquidate the entries for that

review period at the rate deposited at the time of entry”); see

1997 Rule, 62 Fed. Reg. at 27,313-14 (Commerce “has decided to

continue its current practice with respect to automatic assessment;

i.e., if an entry is not subject to a request for a review,

[Commerce] will instruct [Customs] to liquidate that entry and

assess duties at the rate in effect at the time of entry.”)

(emphasis supplied);24 see Assessment Notice, 68 Fed. Reg. at 23,959

(“Based on [Commerce’s] prior practice, when an entity has not been

assigned a rate from a previously completed segment of a proceeding

and that entity does not participate in a current review, that

entity is subject to the all-others rate and its imports of subject

merchandise are assessed at that rate.”);25 see also Consol.

24
During the promulgation of the 1997 Rule, Commerce
considered changing the automatic assessment regulation to assess
duties on entries for which there was no review request at the
rates determined in the most recent review. 1997 Rule, 62 Fed.
Reg. at 27,313. “In light of the comments received,” Commerce
declined to make such a change and declared that it would
continue its practice of applying automatic assessment to
unreviewed entries. Id. at 27,313-14.
25
Recently, Commerce finalized the Assessment Notice, which
clarified its automatic assessment regulation, 19 C.F.R. §
351.212(c), regarding automatic liquidation where a reseller
exports the subject merchandise. Assessment Notice, 68 Fed. Reg.
at 23,954. According to that notice, Commerce will not
automatically liquidate merchandise imported from a reseller and
produced by a manufacturer covered by an administrative review at
the existing cash deposit rates. Id. Instead, Commerce will
determine whether the manufacturer had knowledge that the
merchandise sold to the reseller was destined for the United
Consol. Court No. 97-01777 Page No. 33
Bearings Co., 348 F.3d at 1006-07 (finding that the importer who

purchased the merchandise through a reseller and did not

participate in the manufacturer’s administrative review was not

statutorily entitled to that manufacturer’s dumping rates over the

cash deposit rates, but remanding the matter to determine whether

Commerce’s actions were consistent with its practice in effect

during the years 1997-1998); J.S. Stone, Inc., 27 CIT at __, 297 F.

Supp. 2d at 1345 (affirming Commerce’s application of the “all

others” cash deposit rate to an importer whose manufacturer failed

to identify its sales in the administrative review where the

importer did not participate in that review proceeding).26,27

States. Id. If the manufacturer possessed such knowledge,
Commerce will apply the manufacturer’s rate to the importer in
question. Id. On the other hand, if the manufacturer did not
possess such knowledge, Commerce will apply the “all others”
rate. This pronouncement applies to all administrative reviews
as of May 1, 2003. Id. at 23,956. Contrary to Jabsco’s
contention, and as argued by Customs, the Assessment Notice does
not support Jabsco’s arguments for summary judgment. Because
Commerce conducted the first and second administrative reviews in
1990 and 1991 respectively, the notice does not apply to the
instant case. Consol. Bearings Co., 348 F.3d at 1006-07 (finding
the Assessment Notice inapplicable for determining Commerce’s
practice at the time of that case). “At most, Commerce’s recent
policy statements . . . help identify Commerce’s consistent past-
practice.” See id. at 1007.
26
Even though Jabsco argues that Plaintiff’s reliance on
J.S. Stone, Inc., 27 CIT at ___, 297 F. Supp. 2d at 1333, is
misplaced because that case did not involve a reseller
transaction, and is therefore, factually distinguishable, Def.’s
Resp. at 8, the Court finds that factual distinction
insignificant. J.S. Stone, Inc. stands for the legal proposition
that a party must seek administrative review of its merchandise
to avoid Commerce’s application of the automatic assessment
regulation or the “all others” cash deposit rate. See 27 CIT at
Consol. Court No. 97-01777 Page No. 34
In the instant case, Jabsco imported the bearings from its

___, 297 F. Supp. 2d at 1345. Consequently, that case legally
supports Customs’ argument here that a party must participate in
a review proceeding to gain entitlement to the manufacturer’s
specific cash deposit rate.
27
Commerce has on occasion ignored its regulation and
instructed Customs to liquidate an importer’s entries of
merchandise at the manufacturer’s rate established in an
administrative review where two factors, neither applicable here,
existed. First, the entries were made by an importer who
purchased the merchandise from an unrelated reseller and the
importer did not participate in the administrative review.
Second, Commerce did not assess in the review proceeding any
rates other than the manufacturer’s specific rate; put
differently, Commerce did not assess an “all others” cash deposit
rate. See e.g., ABC Int’l Traders, Inc. v. United States, 19 CIT
787, 790 (1995) (finding Commerce’s application of the
manufacturer’s rate to the plaintiff-importer appropriate because
the importer should have known that the manufacturer’s rate, the
only existing rate, would be assessed against it, and Commerce
was “compelled” in that instance to apply the manufacturer’s cash
deposit rate “because no reseller rates exist[ed]”); see Nissei
Sangyo Am., Ltd. v. United States, slip. op. 03-105, at 5, 9-10,
15 (CIT Aug. 18, 2003) (holding Commerce’s liquidation
instructions directing Customs to assess antidumping duties at
the manufacturer’s cash deposit rate arbitrary and capricious
because those instructions contradicted prior instructions
directing Customs to assess the duties at the rate determined in
the administrative review for the importer’s manufacturer and no
other rate was assessed in the review proceedings); see Renesas
Tech. Am., Inc. v. United States, slip. op. 03-106, at 5, 9-10,
15 (CIT Aug. 18, 2003) (same).
Commerce’s Assessment Notice also identifies two other
instances in which it has applied the manufacturer’s rates
calculated in the administrative review over the importer-
specific assessment rates. Assessment Notice, 68 Fed. Reg. at
23,958-59. Those instances include circumstances in which the
reviewed manufacturer failed to produce any information from
which Commerce could analyze its sales, leading Commerce to apply
adverse facts available to the entries, or lengthy litigation
caused significant time to pass and, in the interest of avoiding
additional delay or possible errors, Commerce applied the
weighted-average margins of the final results. Id. (internal
citations omitted). Because neither party suggests that either
circumstance exists in the instant case, the Court makes no
express holding relating thereto.
Consol. Court No. 97-01777 Page No. 35
reseller, Jabsco UK. The bearings were entered, classified, and

liquidated as “pump parts” or “needle roller bearings.” But-for

Jabsco’s negligent misidentification of the bearings, i.e., its

violation of § 1592(a), those entries would have been suspended at

the time of entry and Jabsco would have been required to make cash

deposits of estimated antidumping duties. Because neither Jabsco

UK nor Jabsco participated in the administrative reviews, Jabsco

UK’s exports were not covered by the two administrative review

proceedings, and more importantly, Jabsco’s imports were not

included within the scope of the administrative reviews. Consol.

Bearings Co., 348 F.3d at 1005-06. In other words, Jabsco simply

has no entitlement under subsection 1675(a)(2) to the manufacturer-

specific antidumping rates assessed in the review proceedings as

opposed to the “all others” cash deposit rates. Id. at 1006.

Moreover, Commerce’s automatic assessment regulation, that

regulation’s history and case law support Plaintiff’s contention

that Jabsco’s failure to participate in the administrative review

proceedings would have led to the application of the “all others”

cash deposit rate as a matter of law.

Jabsco, however, claims that actual participation in the

administrative proceedings here was not necessary for the

application of its manufacturer’s cash deposit rates, because SKF

knew that the bearings sold to Jabsco UK were destined for the

United States. Jabsco relies on the affidavit of Michael Gill,
Consol. Court No. 97-01777 Page No. 36
Jabsco UK’s Managing Director, to support its contention. Customs

objects to the admissibility of that evidence.28

Gill attests that Jabsco UK purchases bearings from various

SKF companies without a “preference as to where . . . SKF

manufactures particular [bearing] models.” Gill Aff., Def.’s Ex.

2. He asserts that SKF’s sales representative visited Jabsco UK’s

office regularly between the years 1988 and 1991, and that the

representative was fully aware of Jabsco and Jabsco UK’s sales

arrangement, which sales caused SKF bearings to enter the United

States. Id. In particular, Gill states:

Jabsco’s practice of consolidating orders for the United
Kingdom and the United States has always been well known
to the SKF representative who has been fully aware of the
practice of consolidation and the reasons for it. Thus,
SKF has long been well aware that a large portion of the
merchandise which Jabsco UK purchases from SKF is
destined for the United States and was so aware during
the period 1989-1991. SKF is also fully aware that we do
this as an accommodation for our United States sister
business and not to make a profit. Thus, SKF is aware
that we resell their bearings to the United States at
cost, effectively at the prices which SKF charges.

Id.

28
Although Customs has not filed a formal motion to strike
the affidavit, it has clearly, succinctly, and timely presented
its USCIT R. 56(e) objections to the affidavit in its Response
Memorandum to Defendant’s Motion for Summary Judgment. As such,
Customs has not waived its objections. 11 James Wm. Moore et.
al., Moore’s Federal Practice § 56.14(4)(a) (3d ed. 2004) (“A
party is not required to make a formal motion to strike exhibits
that do not conform to Rule 56(e) in order to remove documents
from a court’s consideration of a summary judgment motion.”).
Consequently, the Court must determine whether Jabsco’s affidavit
presents admissible evidence at trial in order for the Court to
consider it here. See id.
Consol. Court No. 97-01777 Page No. 37
While Gill is presumed to have personal knowledge of the acts

of his corporation, Jabsco UK, see FDIC v. Patel, 46 F.3d 482, 484

(5th Cir. 1995) (finding that a former bank employee and bank loan

officer had sufficient personal knowledge of bank procedures and

computer record keeping information that their affidavits were

admissible under the business records exception and admissible as

proper summary judgment evidence); 11 Moore et. al., Moore’s

Federal Practice § 56.14(1)(c) (stating that “corporate officers

are presumed to have personal knowledge of acts of their

corporation”), that presumption does not extend to the acts and

knowledge of another company, SFK. See id. Jabsco’s affidavit

therefore contains testimony that goes beyond the personal

knowledge of the affiant. As such evidence is inadmissible at

trial, the Court must disregard it here as well. USCIT R. 56(e)

(“Supporting . . . affidavits shall be made on personal knowledge,

[and] shall set forth such facts as would be admissible in evidence

. . . .”); Glaverbel Societe Anonyme v. Northlake Mktg. & Supply,

Inc., 45 F.3d 1550, 1561 n.5 (Fed. Cir. 1995) (same); 11 Moore et.

al., Moore’s Federal Practice § 56.14(1)(d) (“[A]n affidavit that

only contains . . . statements made without personal knowledge

should not be admitted at the summary judgment stage.”) (footnote

citations omitted).

As the nonmovant, Jabsco bears the burden of demonstrating

with specific facts that a genuine issue of material fact exists,
Consol. Court No. 97-01777 Page No. 38
and that trial is warranted. Matsushita Elec. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 587 (1986). Although the Court views

the evidence in the light most favorable to Jabsco, Jabsco

nonetheless must come forward with “significant probative evidence”

to supports its claims. Anderson v. Liberty Lobby, Inc., 477 U.S.

at 249 (internal citation omitted). Jabsco does not present any

other evidence supporting its contention that SKF knew the subject

bearings were destined for the United States, an essential element

to its claim that Commerce would have applied the rate determined

in the administrative reviews for SKF. Accordingly, Customs has

satisfactorily demonstrated the absence of evidence on the record

to support Jabsco’s contention. Conroy v. Reebok Int’l, Ltd., 14

F.3d 1570, 1575 (Fed. Cir. 1994) (“The moving party . . . need not

produce evidence showing the absence of a genuine issue of material

fact but rather may discharge its burden by showing the district

court that there is an absence of evidence to support the nonmoving

party’s case.”) (citing Copelands’ Enters., Inc. v. CNV, Inc., 945

F.2d 1563, 1565 (Fed. Cir. 1991) (citing Celotex Corp. v. Catrett,

477 U.S. at 325)).29 With respect to its alternative argument,

29
Jabsco also cites the Assessment Notice to support its
contention that because SKF knew the subject bearings were
destined for the United States, Commerce would have applied SKF’s
rates in the instant case. That claim cannot stand for two
reasons. First, as previously determined above, in light of the
effective dates of the Assessment Notice, that notice’s
pronouncement of Commerce’s current reseller policy provides no
evidentiary support for Jabsco’s contentions on summary judgment.
Second, as Plaintiff points out, because Jabsco has failed to
Consol. Court No. 97-01777 Page No. 39
Customs has met its burden of production.

Jabsco, however, vehemently argues in its motion that it was

Commerce’s policy at the time the bearings entered the United

States to apply the manufacturer’s cash deposit rates to any

reseller importing such merchandise regardless of the importer’s

participation in the review, even though that policy was confusing,

unclear, and inconsistent. Jabsco relies on Consol. Bearings Co.,

ABC Int’l Traders, Inc. v. United States, Nissei Sangyo Am., Ltd.

v. United States, Renesas Tech. Am., Inc. v. United States, and the

Assessment Notice to evidence Commerce’s policy. The Court will

discuss each citation reference in turn.

In Consol. Bearings Co., the Federal Circuit Court of Appeals

was asked to determine whether Commerce’s liquidation instructions,

ordering Customs to assess antidumping duties at the cash deposit

rates against an importer who purchased the merchandise through a

reseller where that importer did not participate in the

administrative review, were inconsistent with Commerce’s past

practice, and therefore, arbitrary and capricious. 348 F.3d at

present any evidence showing that SKF possessed such knowledge,
Commerce’s current reseller policy, as described in the
Assessment Notice, indicates that the agency would have applied
the “all others” rate. Pl.’s Resp. at 13; Assessment Notice, 68
Fed. Reg. at 23,954 (stating that if Commerce determined during
the review that the producer did not know the merchandise it sold
to the reseller was destined for the United States and the
reseller did not participate in that review, the reseller’s
entries of merchandise shall be liquidated at the “all others”
rate).
Consol. Court No. 97-01777 Page No. 40
1006. While Consol. Bearings Co. presents an issue somewhat

similar to that at bar, the court there did not find Commerce’s

actions inconsistent. Rather, the circuit court remanded the

matter for further consideration. 348 F.3d at 1007. Moreover, the

actions of Commerce in question there took place over six years

after Jabsco entered its bearings, lending little support to what

Commerce would have done at the time in question here. Cf. id.

(indicating that Commerce issued the liquidation instructions in

question there during the years 1997 and 1998), with supra p. 6

(indicating that Jabsco entered the bearings between the years 1988

and 1991). Accordingly, that case does not support Jabsco’s

contention.

Jabsco has also failed to demonstrate how the circumstances

presented are similar to ABC Int’l Traders, Inc. v. United States,

Nissei Sangyo Am., Ltd. v. United States and Renesas Tech. Am.,

Inc. v. United States as a matter of law. Unlike these three

cases, supra note 27, Commerce did indeed assess an “all others”

cash deposit rate in the administrative review proceedings here.

More importantly, dissimilar from the importers’ there, Jabsco

misidentified the bearings; it simply could not have expected that

its entries would be liquidated at any other rates than those which

applied to “pump parts” or “needle roller bearings.” Accordingly,

Jabsco could not have expected its bearings to receive the rates

assessed for SKF in the administrative review proceedings. Those
Consol. Court No. 97-01777 Page No. 41
three cases therefore fail to support Jabsco’s contention.

Finally, Jabsco’s reliance on the Assessment Notice is also

misplaced. Commerce’s notice unequivocally states its policy

involving reseller transactions; Commerce assessed antidumping

duties against importers who did not participate in the review at

the “all others” rate.

Based on [Commerce’s] prior practice, when an entity has
not been assigned a rate from a previously completed
segment of a proceeding and that entity does not
participate in a current review, that entity is subject
to the all-others rate and its imports of subject
merchandise are assessed at that rate.

Assessment Notice, 68 Fed. Reg. at 23,959. Although the Court

acknowledges that the words “prior practice” do not clearly

identify the time frame in which Commerce endorsed such a practice,

Commerce’s statement directly contradicts Jabsco’s contention that

Commerce’s policy was unclear and inconsistent. Id. Despite the

fact that Commerce recognized its reseller policy generally has

“generated confusion” among importers, id. at 23,958, 23,954-55

(“In various proceedings parties have claimed that entries should

be liquidated at many different rates in cases where entries

involving resellers have not been reviewed. Parties have claimed

. . . that the results of [Commerce’s] review of the producer

should apply, that the rate in effect at the time of entry should

apply, or, even, that the all-others rate should apply.”), nothing

in the Assessment Notice indicates that Commerce applied that

policy arbitrarily or inconsistently at the time the bearings here
Consol. Court No. 97-01777 Page No. 42
entered the United States. The Assessment Notice simply does not

support Jabsco’s contention that it was Commerce’s policy at the

time Jabsco entered the bearings to assess the manufacturer’s rate

to reseller transactions. Instead, the notice suggests Commerce

would have directed Customs to assess the “all others” rate against

Jabsco’s entries. Therefore, the Assessment Notice fails to

support Jabsco’s contention.

Jabsco again fails to present any evidence supporting its

contention that it was Commerce’s policy to apply the

manufacturer’s rate to any reseller importing such merchandise at

the time the bearings entered the United States. Because Jabsco

bears the burden of demonstrating Commerce’s policy, the Court

finds Jabsco has failed to establish entitlement to summary

judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. at 252 (“The

mere existence of a scintilla of evidence in support of the

[movant’s] position will be insufficient; there must be evidence on

which the jury could reasonably find for th[at party].”); Celotex

Corp. v. Catrett, 477 U.S. at 322-23. Customs has however

adequately supported its contention that because Jabsco failed to

participate in the administrative reviews, or to present any

affirmative evidence indicating SKF knew that its sales of bearings

were destined for the United States, but-for Jabsco’s violation of

1592(a), Commerce would have directed the application of the “all

others” cash deposit rate as a matter of law. Jabsco produces no
Consol. Court No. 97-01777 Page No. 43
evidence to the contrary. The Court therefore concludes that

Customs properly calculated the actual loss of antidumping duties

Jabsco owed using the “all others” cash deposit rates in effect at

the time Jabsco made its entries of bearings. Summary judgment is

proper in Customs favor on this issue.

B. Penalty Assessment

Customs argues that it properly assessed an appropriate

penalty amount pursuant to 19 U.S.C. § 1592(c)(4)(B). Plaintiff

claims that the penalty here consists of the amount of interest

accrued from the dates of liquidation of Jabsco’s entries to the

date of Jabsco’s disclosure letter on October 30, 1991, rather

than, as statutorily permissible, the date Jabsco actually tendered

the antidumping duties, August 6, 1996. Moreover, Customs claims

that no penalty was assessed on the customs duties which Jabsco

remitted in 1993. For these reasons, Plaintiff contends the amount

of penalty assessed here was “substantially less than the actual

maximum penalty afforded under § 1592(c)(4)(B).” Pl.’s Mem. at 27.

In response, although Jabsco contends that the penalty amount

is the maximum penalty statutorily permitted, Jabsco also asserts

that Customs did not consider the numerous factors set forth in

United States v. Yuchius Morality Co., slip. op. 02-124, at 23

(citing United States v. Complex Mach. Works Co., 23 CIT at 949-50,

83 F. Supp. 2d at 1315) in calculating the penalty, and therefore,
Consol. Court No. 97-01777 Page No. 44
the amount assessed is not appropriate. Jabsco further argues that

Customs did not extend any special treatment to it in calculating

the penalty, but rather, assessed the penalty consistent with its

prior disclosure practice.

Congress set forth the maximum penalty amount for negligent

violations of § 1592(a) in 19 U.S.C. § 1592(c)(3).30 Parties who

voluntarily disclose violations of subsection (a), however, are

assessed penalties in accordance with 19 U.S.C. § 1592(c)(4), which

states that the maximum monetary penalty assessed shall not exceed

the interest, computed from the date of liquidation, on the amount

of lawful duties of which the United States is deprived.31 19

30
Title 19 U.S.C. § 1592(c)(3) provides:

A negligent violation of subsection (a) of this
section is punishable by a civil penalty in an amount
not to exceed --
(A) the lesser of --
(i) the domestic value of the merchandise, or
(ii) two times the lawful duties of which the United
States is or may be deprived, or
(B) if the violation did not affect the assessment of
duties, [twenty] percent of the dutiable value of the
merchandise.

19 U.S.C § 1592(c)(3).
31
Title 19 U.S.C. § 1592(c)(4) provides in relevant part:

If the person concerned discloses the
circumstances of a violation of subsection (a) of this
section before, or without knowledge of, the
commencement of a formal investigation of such
violation, . . . any monetary penalty to be assessed
under subsection (c) . . . shall not exceed —-
. . .
(B) if such violation resulted from negligence . .
Consol. Court No. 97-01777 Page No. 45
U.S.C. § 1592(c)(4); see also United States v. Yuchius Morality

Co., slip. op. 02-124, at 22 (“Congress has chosen to adopt only

maximums, as opposed to prescribing precise penalties, for proven

violations under 19 U.S.C. § 1592 . . . .”). These provisions were

enacted as part of the Customs Procedure Reform and Simplification

Act of 1978, and for the first time, granted judicial review to

this Court to determine the “appropriate[] . . . penalty amount.”

S. Rep. No. 95-778, pt. 10. at 20 (1978), reprinted in 1978

U.S.C.C.A.N. 2211, 2231; United States v. Menard, Inc., 17 CIT

1229, 1229, 838 F. Supp. 615, 616 (1993) (“The penalty statute

provides for a trial de novo on all issues, leaving the amount of

the penalty to the sound discretion of the [C]ourt.”) (citing

United States v. Valley Steel Prods. Co., 14 CIT 14, 17, 729 F.

Supp. 1356, 1359 (1990)), aff’d in part, vacated and remanded in

part on other grounds, 64 F.3d 678 (Fed. Cir. 1995); United States

v. Modes, Inc., 17 CIT 627, 636, 826 F. Supp. 504, 512 (1993) (“It

is settled . . . that the [C]ourt possesses the discretion to

. the interest (computed from the date of liquidation
at the prevailing rate of interest applied under
section 6621 of title 26) on the amount of lawful
duties of which the United States is or may be deprived
so long as such person tenders the unpaid amount of the
lawful duties at the time of disclosure or within
[thirty] days, or such longer period as . . . [C]ustoms
. . . may provide, after notice by the appropriate
customs officer of his calculation of such unpaid
amount.

19 U.S.C. § 1592(c)(4).
Consol. Court No. 97-01777 Page No. 46
determine a penalty within the parameters set by the statute.”)

(internal citation omitted). In other words, the law requires “the

[C]ourt to begin its reasoning on a clean slate. It does not start

from any presumption that the maximum penalty is the most

appropriate or that the penalty assessed or sought by the

government has any special weight.” United States v. Menard, Inc.,

17 CIT at 1229, 838 F. Supp. at 616 (internal citation omitted).

In Complex Mach. Works Co., the Court identified the following

fourteen factors relevant to its penalty determination: (1)

defendant’s good faith effort to comply with the statute; (2)

defendant’s degree of culpability; (3) defendant’s history of

previous violations; (4) the nature of the public interest in

ensuring compliance with the applicable law; (5) the nature and

circumstances of the violation; (6) the gravity of the violation;

(7) defendant’s ability to pay; (8) the appropriateness of the size

of the penalty vis-a-vis defendant’s business; (9) whether the

penalty shocks the conscience of the court; (10) the economic

benefit gained by defendant as a result of the violation; (11) the

degree of harm to the public; (12) the value of vindicating agency

authority; (13) whether the party sought to be protected by the

statute has been adequately compensated for the harm; and (14) such

other matters as justice may require. Complex Mach. Works Co., 23

CIT at 949-50, 83 F. Supp. 2d at 1314-15 (stating that the Court

will now apply these factors to analyze cases arising under §
Consol. Court No. 97-01777 Page No. 47
1592(c)); see also United States v. New-Form Mfg. Co., 27 CIT __,

__, 277 F. Supp. 2d 1313, 1327-32 (2003) (applying the factors)

Yuchius Morality Co., slip. op. 02-124, at 23-25 (stating that the

factors “might apply in a given case,” yet considering them in

assessing the appropriate penalty). Moreover, here the Court must

also determine the weight to be given to the imposition of

antidumping duties, the self-inflicted consequence of Jabsco’s

negligence.

The Court cannot undertake this analysis on summary judgment.

Because the Court has discretion to determine the appropriate

penalty amount, and is cognizant of the fourteen Complex Mach.

Works Co. factors, in making that determination, the Court is

required to weigh evidence, make credibility determinations, and

draw inferences from the facts, functions strictly delegated to a

fact-finder or jury. Supra note 18. As the Court cannot properly

perform these functions on summary judgment, the Court must deny

the parties’ motions on this particular issue and order a trial.

Conclusion

For the foregoing reasons, the Court grants Customs’ motion

for summary judgment with respect to the antidumping duties

assessed. The Court denies, however, Customs’ motion for summary

judgment with respect to the penalty assessed. The Court also

denies Jabsco’s motion for summary judgment in full. Trial is
Consol. Court No. 97-01777 Page No. 48
ordered on the penalty issue. The parties are directed to prepare

a proposed order governing preparation for trial and to file said

proposed order by August 1, 2004.

/s/ Donald C. Pogue

Donald C. Pogue

Judge

Dated: July 8, 2004

New York, New York