Slip Op. 03-159
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
ELKEM METALS COMPANY and :
GLOBE METALLURGICAL INC., :
:
Plaintiffs, :
:
v. :
:
UNITED STATES, : Court No. 02-00232
:
Defendant, :
:
and :
:
RIMA INDUSTRIAL S/A, :
:
Defendant-Intervenor. :
________________________________________:
The United States moves to dismiss the action brought by
plaintiffs, Elkem Metals Company and Globe Metallurgical Inc.
(collectively “Elkem Metals”), pursuant to USCIT R. 12(b)(1). The
United States further requests that, if its motion is denied, the
Court extend the time in which responses are due to plaintiffs’
motion for judgment upon the agency record. Defendant-intervenor,
RIMA Industrial S/A (“RIMA”), subsequently moves to strike portions
of plaintiffs’ opposition to defendant’s motion to dismiss pursuant
to USCIT R. 12(f).
Held: For reasons stated below, defendant-intervenor’s
motion to strike is denied. Defendant’s motion to dismiss is
denied. Defendant and defendant-intervenor have thirty (30) days
from the issue date of this opinion to respond to plaintiffs’ R.
56.2 motion.
December 9, 2003
Piper Rudnick LLP (William D. Kramer) for plaintiffs, Elkem
Metals Company and Globe Metallurgical Inc.
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Reginald T. Blades, Jr.); of counsel:
Court No. 02-00232 Page 2
Barbara J. Tsai, Office of Chief Counsel for Import Administration,
United States Department of Commerce, for the United States,
defendant.
Greenberg Traurig, LLP (Philippe M. Bruno) for defendant-
intervenor, RIMA Industrial S/A.
MEMORANDUM OPINION
TSOUCALAS, Senior Judge: The United States moves to dismiss
the action brought by plaintiffs, Elkem Metals Company and Globe
Metallurgical Inc. (collectively “Elkem Metals”), pursuant to USCIT
R. 12(b)(1). The United States further requests that, if its
motion is denied, the Court extend the time in which responses are
due to plaintiffs’ motion for judgment upon the agency record.
Defendant-intervenor, RIMA Industrial S/A (“RIMA”), subsequently
moves to strike portions of plaintiffs’ opposition to defendant’s
motion to dismiss pursuant to USCIT R. 12(f).
DISCUSSION
The United States Department of Commerce (“Commerce”) contends
that this Court lacks subject matter jurisdiction to hear this
action because the case is moot. See Def.’s Mot. Dismiss Lack of
Jurisdiction as Moot & Mot. Suspend Briefing Upon the Merits
Pending Decision Upon the Mot. Dismiss (“Def.’s Mot.”) at 1.
Specifically, Commerce argues that the relief requested by
plaintiffs in their 56.2 motion for judgment upon the agency record
Court No. 02-00232 Page 3
“would have no practical effect upon the outcome of the
administrative review.” Id. at 4. According to Commerce, “a
recalculation of [constructed value (“CV”)] to include RIMA’s
[value-added taxes (“VAT”)] input costs in accordance with Elkem’s
worksheet will not result in any change to the final margin.” Id.
at 3. In support of its contention, Commerce offers an affidavit
from the Import Administration certifying that a recalculation of
RIMA’s CV, which includes the VAT paid by RIMA for certain
production units as calculated by plaintiffs, would not result in
an above de minimis margin. See Def.’s Mot at 5; App. Def.’s Mot.
Dismiss at App. 1. Accordingly, any decision rendered by this
Court on the merits would constitute an advisory opinion. See
Def.’s Mot. at 4. To support its argument, Commerce cites a string
of cases this Court dismissed when the challenge presented could
not be redressed in any meaningful way by a Court ruling. See id.
at 8-9.
Plaintiffs respond that certain calculations made by RIMA,
which effect Commerce’s calculations regarding CV, are inaccurate.
See Pls.’ Opp’n Def.’s Mot. To Dismiss for Lack of Jurisdiction as
Moot (“Pls.’ Opp’n Def.’s Mot.”) at 7. Specifically, plaintiffs
point to three deficiencies. First, plaintiffs challenge the
information contained in one of RIMA’s exhibits dealing with two
types of Brazilian VAT that contain mathematical errors.
Court No. 02-00232 Page 4
Plaintiffs maintain that correcting such errors would result in a
calculated dumping margin of 0.49 percent, just 0.01 percent below
the de minimis threshold. See id. Second, plaintiffs argue that
RIMA’s reported values for production inputs, such as electricity
and carbon electrodes, are inaccurate, thereby resulting in an
understatement of the reported taxes paid on such inputs. See id.
Third, plaintiffs contend that RIMA failed to report all of the
taxes paid on certain inputs for each month covered by the period
of review. See id. at 8. Plaintiffs argue that if RIMA’s tax
calculations are adjusted to eliminate all these errors, Commerce
would calculate a dumping margin in excess of the 0.50 percent de
minimis threshold. See id. at 8-9.1
Plaintiffs also argue that Commerce’s
refusal to include the VAT paid on inputs in CV was not
based on the issue it is now raising--whether the VAT
amount that must be included in CV generates a dumping
margin. Instead, [Commerce’s] decision was based on a
policy under which it includes VAT in CV only if the
amount of VAT paid on inputs exceeds the amount of VAT
collected on domestic sales of the final product.
1
Plaintiffs also note that Commerce was notified of these
deficiencies during the administrative review, but that Commerce
took no steps to verify the information reported by RIMA. See Pls.’
Opp’n Def.’s Mot. at 9. In its reply brief, Commerce argues that
Elkem Metals did not raise this issue during the administrative
review. See Def.’s Reply Pls.’ Opp’n Def.’s Mot. Dismiss Lack of
Jurisdiction as Moot (“Def.’s Reply”) at 4. The Court refers
Commerce to the administrative record, which documents written
comments to Commerce regarding fundamental problems in the VAT
amount reported by RIMA. See Confidential App. Pls.’ Br. Supp.
Mot. J. Upon the Agency R. (“Pls.’ App.”) at App. 6.
Court No. 02-00232 Page 5
Id. at 13. Plaintiffs point out that this policy was central to
Commerce’s decision not to include the VAT paid on inputs in the
calculation of CV in both the preliminary and final results.
According to plaintiffs, this policy has been rejected by the Court
of Appeals for the Federal Circuit (“CAFC”) in Aimcor v. United
States, 141 F.3d 1098, 1109 (Fed. Cir. 1998), and Camargo Correa
Metais, S.A. v. United States, 200 F.3d 771, 774 (Fed. Cir. 1999).
Finally, plaintiffs alternatively argue that this case is not
moot because the issue is capable of repetition, yet evades review
and, therefore, fits the mootness exception doctrine. See Pls.’
Opp’n Def.’s Mot. at 15. Plaintiffs note that “the issue has
already arisen in at least four segments of the antidumping
proceeding on silicon metal from Brazil (the original investigation
and the 1996-97, 1997-98, and 1999-2000 administrative reviews).”
Id. at 16. Moreover, since Commerce revoked the order on silicon
metal from Brazil on December 17, 2002, see Final Results of
Antidumping Duty Administrative Review and Revocation of Order in
Part of Silicon Metal from Brazil, 67 Fed. Reg. 77,225, based on a
calculation of zero dumping margin for three consecutive reviews,
this issue evades review.2 See Pls.’ Opp’n Def.’s Mot. at 16.
2
This Court agrees with Commerce that the exception to the
mootness doctrine applies to the legal issue being litigated, that
is whether Commerce must include the VAT paid on inputs in its CV
calculation, and not to the narrow effect the issue has on a
particular party. See Verson v. United States, 22 CIT 151, 153-55,
Court No. 02-00232 Page 6
A. RIMA’s Motion to Strike Portions of Plaintiffs’ Opposition to
Defendant’s Motion to Dismiss this Action as Moot
The Court must first address RIMA’s motion to strike the
pleadings before it proceeds to consider defendant’s motion to
dismiss. Generally, motions to strike are considered “disfavored”
or “extraordinary” remedies. See Acciai Speciali Terni S.p.A. v.
United States, 24 CIT 1211, 1212-13, 120 F. Supp. 2d 1101, 1106
(2000); Hynix Semiconductor, Inc. v. United States, 2003 Ct. Intl.
Trade LEXIS 127, Slip Op. 03-128, at *3 (CIT Sept. 30, 2003). The
Court will grant a motion to strike only when there is a “flagrant
disregard of the rules of court.” Jimlar Corp. v. United States,
10 CIT 671, 673, 647 F. Supp. 932, 934 (1986). Accordingly, the
court “will not grant motions to strike unless the brief
demonstrates a lack of good faith, or that the court would be
prejudiced or misled by the inclusion in the brief of the improper
material.” Id. Plaintiffs did not demonstrate bad faith nor is
the Court prejudiced or misled by the brief supporting plaintiffs’
motion for judgment upon the agency record. Therefore, the Court
denies RIMA’s motion.
B. Defendant’s Motion to Dismiss this Case as Moot
The defendant’s USCIT R. 12(b)(1) motion to dismiss focuses
5 F. Supp. 2d 963, 965-66 (1998) (stating that “[a]n antidumping
determination is not of too short a duration to prevent complete
judicial review” and holding that “the issue raised is likely to be
subject to agency action in the future”).
Court No. 02-00232 Page 7
on whether the Court has subject matter jurisdiction to hear this
case. The Court must determine “whether the moving party
challenges the sufficiency of the pleadings or the factual basis
underlying the pleadings.” Corrpro Cos. v. United States, 2003 Ct.
Intl. Trade LEXIS 60, Slip Op. 03-59, at *4 (CIT June 4, 2003).
Since the defendant challenges the sufficiency of the pleadings,
the Court must construe such pleadings in a light most favorable to
plaintiffs. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)
(stating that “it is well established that, in passing on a motion
to dismiss . . . on the ground of lack of jurisdiction over the
subject matter[,] . . . the allegations of the complaint should be
construed favorably to the pleader”). Although the plaintiffs bear
the burden of establishing jurisdiction because they seek to invoke
this Court’s jurisdiction, see Old Republic Ins. Co. v. United
States, 14 CIT 377, 379, 741 F. Supp. 1570, 1573 (1990) (citations
omitted), the Court’s role in determining whether to dismiss this
case is simply to decide whether the “plaintiff has sufficiently
alleged a basis of subject matter jurisdiction.” Nippon Steel
Corp. v. United States, 2001 Ct. Intl. Trade LEXIS 161, Slip Op.
01-153, at *5-*6 (CIT Dec. 28, 2001)(quotation and citation
omitted).
The issue raised in plaintiffs’ 56.2 motion is whether
Commerce erred in excluding the Brazilian VAT paid by RIMA on
Court No. 02-00232 Page 8
inputs used to produce exported silicon metal from Commerce’s
calculation of CV. See Mot. J. Upon the Agency R. at 1; “Pls.’
Opp’n Def.’s Mot.” at 2-4; Pls.’ Opp’n Def.-Intervenor’s Mot.
Strike R. Portions Pls.’ Opp’n Def.’s Mot. Dismiss at 3. The
administrative review challenged by plaintiffs encompasses imports
of silicon metal from Brazil during the period of review (“POR”)
from July 1, 1999, through June 30, 2000. See Final Results of
Antidumping Duty Administrative Review of Silicon Metal from Brazil
(“Final Results”), 67 Fed. Reg. 6,488 (Feb. 12, 2002). On August
6, 2001, Commerce published the preliminary results of the instant
reviews and found that the silicon metal being produced by RIMA was
not being sold at less than fair value. See Preliminary Results of
Antidumping Duty Administrative Review and Notice of Intent Not To
Revoke Order in Part on Silicon Metal From Brazil (“Preliminary
Results”), 66 Fed. Reg. 40,980. During the preliminary review,
Elkem Metals first raised the issue presented in plaintiffs’ motion
for judgment upon the agency record. See Pls.’ App. at App. 6
(proprietary version). On February 12, 2002, Commerce published
the Final Results finding again that silicon metal from Brazil
produced by RIMA was not being sold at less than fair value.
Section 1677b(e) of Title 19 of the United States Code reads,
in pertinent part, that in the calculation of CV, “the cost of
materials shall be determined without regard to any internal tax in
Court No. 02-00232 Page 9
the exporting country imposed on such materials or their
disposition which are remitted or refunded upon exportation of the
subject merchandise produced from such materials.” 19 U.S.C. §
1677b(e) (2000). The CAFC first touched upon this issue in Aimcor,
141 F.3d at 1109 n.19, and held that “the Brazilian system of
keeping a running total of taxes paid and collected and then
‘settling up’ monthly with the Brazilian government does not seem[]
to meet the literal requirements of the statute in terms of refund
and remittance.” Subsequently, in Camargo, 200 F.3d at 774, the
CAFC held that under the plain meaning of 19 U.S.C. § 1677b(e), the
VAT must be included in the calculation of the CV of exported
products unless such taxes are “remitted or refunded” upon
exportation. In light of these holdings, the Court agrees with
plaintiffs that Commerce’s motion to dismiss is merely an attempt
to avoid responding to plaintiffs’ arguments on the merits.
Commerce’s arguments in support of the motion to dismiss rest
on a single reference in plaintiffs’ moving papers. Mainly,
Commerce focuses on plaintiffs’ summary of the VAT that plaintiffs
allege should have been used in Commerce’s calculation of CV that
is attached to plaintiffs’ moving brief as a worksheet. Although
plaintiffs represent that this worksheet reflects the amount of
the VAT that should have been included in the calculation of RIMA’s
CV, the Court is not restricted from considering plaintiffs’
Court No. 02-00232 Page 10
argument from subsequent papers. When this exhibit was challenged
by Commerce, plaintiffs clarified that the figures provided in the
worksheet represented only an “estimate.” The arguments
subsequently raised by plaintiffs regarding the above de minimis
dumping margin that would result from Commerce’s correction of
certain additional errors sufficiently fulfill plaintiffs’ burden
of establishing jurisdiction. Commerce does not submit one bit of
evidence to rebut plaintiffs’ allegations with regard to such
errors, and since the allegations of the complaint should be
construed in a light most favorably to the pleader, defendant’s
motion to dismiss is denied.
CONCLUSION
RIMA’s motion to strike portions of plaintiffs’ opposition to
defendant’s motion to dismiss is denied. Since plaintiffs
sufficiently met their burden to prove this Court has jurisdiction
to hear this case, defendant’s motion to dismiss is also denied.
____________________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: December 9, 2003
New York, New York