Slip Op. 00-149
UNITED STATES COURT OF INTERNATIONAL TRADE
__________________________________________
SHANDONG HUARONG GENERAL GROUP :
CORPORATION, LIAONING MACHINERY :
IMPORT & EXPORT CORPORATION, :
:
Plaintiffs, :
:
v. :
:
UNITED STATES, :
: Court No. 00-08-00393
Defendant, :
:
and :
:
O. AMES COMPANY, :
:
Defendant-Intervenor :
__________________________________________:
[Plaintiff’s motion for preliminary injunction is denied.]
Hume & Associates (Robert T. Hume), Washington, D.C., for Plaintiffs.
David W. Odgen, Assistant Attorney General; Kenneth S. Kessler, United States
Department of Justice, Civil Division, Commercial Litigation Branch; John F. Koeppen, United
States Department of Commerce, Office of Chief Counsel, for Defendant.
Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Eileen P. Bradner, Timothy Brightbill,
Nicholas A. Kessler), Washington, D.C., for Defendant-Intervenor.
Dated: November 13, 2000
Court No. 00-08-00393 Page 2
MEMORANDUM OPINION
CARMAN, Chief Judge:
Shandong Huarong General Group Corporation (SHGC or Plaintiff)1, moves this Court
for a preliminary injunction to enjoin the collection of estimated antidumping duty cash deposits
at either the 23.99% rate established by the United States Department of Commerce (Commerce)
in Notice of Final Results and Partial Recission of Antidumping Administrative Reviews: Heavy
Forged Hand Tools from the People’s Republic of China, 65 Fed. Reg. 43,290 (July 13, 2000)
(1998-1999 Final Results) or the 28.96% rate established in Amended Final Results of
Antidumping Duty Administrative Reviews: Heavy Forged Hand Tools from the People’s
Republic of China, 65 Fed. Reg. 50,499 (August 18, 2000) (Amended Results). This injunction
would cover future imports of bars over 18 inches in length, track tools and wedges exported by
Plaintiff that are classified under the Harmonized Tariff Schedules of the United States
subheading 8205.59.30., and would remain in effect until final judicial review of Plaintiff’s
underlying legal challenge. Defendant and Defendant-Intervenor object to the issuance of a
preliminary injunction.
BACKGROUND
On February 19, 1991, Commerce imposed antidumping duty orders on heavy forged
hand tools, finished or unfinished, with or without handles, from the People’s Republic of China.
See Heavy Forged Hand Tools from the People’s Republic of China, 56 Fed. Reg. 6,622 (Feb.
19, 1991). On February 11, 1999, Commerce published notice of opportunity to request an
administrative review of imports of merchandise entered between February 8, 1998 and January
1
Although there are two parties to the underlying litigation, Plaintiff SHGC is the only party seeking the preliminary
injunction.
Court No. 00-08-00393 Page 3
31, 1999 subject to the relevant antidumping orders. (1998-1999 Administrative Review). See
Opportunity to Request Administrative Review, 64 Fed. Reg. 6,878 (Feb. 11, 1999). Plaintiff and
three other exporters of subject merchandise responded to Commerce’s notice and requested that
Commerce review their exports entered into the United States during the relevant time period.2
In addition, Defendant-Intervenor responded and requested that Commerce conduct
administrative reviews of each class of subject merchandise exported by the four respondents.
On March 29, 1999, Commerce formally initiated an administrative review. See Heavy Forged
Hand Tools from the People’s Republic of China, 64 Fed. Reg. 14,860 (Mar. 29, 1999).
On July 13, 2000, Commerce published notice of its final results of the 1998-1999
Administrative Review applying a 23.99% antidumping duty deposit rate on Plaintiff’s exports
of subject merchandise. See 1998-1999 Final Results, 65 Fed. Reg. at 43,290. On July 17, 2000,
pursuant to 19 C.F.R. §351.224(e), Plaintiff requested that Commerce adjust its final results to
correct a ministerial error caused by Commerce’s failure to use surrogate value data for billets
during the entire period of review. On August 18, 2000, Commerce corrected this error, altered
Plaintiff’s antidumping duty deposit rate to 28.96% and published notice of its amended results.
See Amended Results, 65 Fed. Reg. at 50,500. Prior to the 1998-1999 Administrative Review,
Plaintiff’s exports were subject to an antidumping duty deposit rate of 1.27 percent.
On August 25, 2000, both of the Plaintiffs filed a complaint with this Court challenging
Commerce’s 1998-1999 Administrative Review final results.3 This complaint was followed by a
2
Fujian Machinery & Equipment Import & Export Corporation (FMEC) requested that commerce review its exports
of: (1) axes/adzes; (2) hammers/sledges; and (3) picks/mattocks. Shandong Huarong General Group Corporation
(Shandong Huarong) requested that Commerce review its exports of bars and wedges. Liaoning Machinery Import
& Export Corporation (LMC) requested that Commerce review its exports of: (1) bars/wedges; (2)
hammers/sledges; and (3) picks/mattocks. Shandong Machinery Import & Export Corporation (SMC) requested that
Commerce review its exports of: (1) axes/adzes; (2) bars/wedges; (3) hammers/sledges; and (4) picks/mattocks.
3
In the underlying proceeding the Plaintiffs do not appear to have challenged the administrative review
determination as amended. Both of the Plaintiffs have joined with Shandong Machinery Import & Export
Court No. 00-08-00393 Page 4
consent motion for preliminary injunction to enjoin the liquidation of all entries of subject
merchandise covered by the 1998-1999 Administrative Review final results. On September 5,
2000, this Court granted Plaintiffs’ consent motion enjoining liquidation of all covered entries
during the pendancy of Plaintiffs’ legal challenge and any remand actions that might be
necessary. Plaintiff SHGC now moves this Court for a preliminary injunction enjoining the
United States from collecting estimated antidumping duty cash deposits at the rate established by
Commerce during the 1998-1999 Administrative Review. Plaintiff SHGC seeks, during the
pendancy of this litigation, to continue depositing estimated antidumping duties at the rate
established by the seventh administrative review. Defendant and Defendant-Intervenor object.
DISCUSSION
This Court has jurisdiction over the Plaintiff’s underlying litigation pursuant to 28 U.S.C.
§1581(c) and sections 516A(a)(2)(A)(i)(I) and (B)(iii) of the Tariff Act of 1930, as amended by
19 U.S.C. §§1516a(a)(2)(A)(i)(I) and (B)(iii). The Plaintiff’s motion is properly before this
Court pursuant to 28 U.S.C. §2643(c)(1). See also 28 U.S.C. §1585 (“The Court of International
Trade shall possess all the powers in law and equity of, or as conferred by statute upon, a district
court of the United States.”)
The events precipitating this motion are clear. As a result of the 1998-1999
Administrative Review, Commerce adjusted the estimated antidumping duty deposit rates
applicable to Plaintiff’s exports of subject merchandise. This adjustment increased the deposit
rate from 1.27% to 28.96% resulting, Plaintiff contends, in the cancellation of all existing and
future orders by Plaintiff’s “major” United States customer. Plaintiff initiated a lawsuit
Corporation and Tianjin Machinery Import & Export Corporation and have brought a separate proceeding (00-08-
00431) challenging the legality of Commerce’s amended final determination.
Court No. 00-08-00393 Page 5
challenging Commerce’s final determination in the 1998-1999 Administrative Review, and now
seeks to preliminarily enjoin the collection of cash deposits at the challenged rate.
It is well settled that a preliminary injunction is an extraordinary remedy. Therefore,
before the Plaintiff can be granted such relief it must establish: (1) in the absence of a
preliminary injunction, it will suffer immediate and irreparable injury; (2) the balance of
hardships tilts in its favor; (3) there is a likelihood of success on the merits; and (4) the grant of a
preliminary injunction is not contrary to public interest. See FMC Corp. v. United States, 3 F.3d
424, 427 (Fed. Cir. 1993); Zenith Ratio Corp. v. United States, 710 F.2d 806, 809 (Fed. Cir.
1983). If Plaintiff fails to prove any one of these factors, its motion must fail. See Shree Rama
Enterprises v. United States, 983 F. Supp. 192, 194 (Ct. Int’l Trade 1997). For the reasons
stated below, this Court finds that Plaintiff has failed to establish it will be immediately and
irreparably injured in the absence of a preliminary injunction. Plaintiff’s motion, therefore, fails.
Plaintiff argues it will suffer immediate and irreparable injury if it is required to make
anticipated antidumping duty deposits at the “exorbitant” deposit rate established by Commerce
in the 1998-1999 Administrative Review. Specifically, Plaintiff argues that the imposition of
this antidumping duty deposit rate will result in the cancellation of existing and future orders by
its “major” United States customer, thereby causing Plaintiff to go out of business. Plaintiff
asserts that the “exhorbitant[ly]” high antidumping duty rates were imposed as a result of severe
factual, legal, and procedural errors committed by Commerce during the 1998-1999
Administrative Review. These errors are alleged to have deprived Plaintiff of the procedural
safeguards designed to ensure the fair and equitable administration of the antidumping laws.
Plaintiff argues that if it is forced out of business as a result of these errors, it will suffer
Court No. 00-08-00393 Page 6
irreparable economic injury and will be deprived of its right to meaningful and effective judicial
review.
To establish irreparable injury, Plaintiff bears an extremely heavy burden. See Queen’s
Flowers de Colombia v. United States, 947 F. Supp. 503, 506 (Ct. Int’l Trade 1996). Irreparable
injury is a type of injury that is “serious” and “cannot be undone.” Zenith, 710 F.2d at 809,
quoting, S.J. Stile Assoc. Ltd. v. Snyder, 646 F.2d 522, 525 (CCPA 1981). It is not enough
merely to establish a “possibility of injury, even where prospective injury is great. A presently
existing, actual threat must be shown.” Id.
As stated, Plaintiff alleges that, in the absence of a preliminary injunction, it will be
forced out of business and will lose its right to effective and meaningful judicial review by the
imposition of the challenged antidumping duty deposit rates. Courts have long recognized the
irreparable injury that is attendant to the loss of effective and meaningful judicial review. See
Zenith 710 F.2d at 810 (holding that liquidation of entries during the pendancy of litigation
challenging an administrative review negates a plaintiff’s right to meaningful judicial review
and, thus, constitutes per se irreparable harm); NMB Singapore Ltd. v. United States, No. 00-144,
slip op. at 9, (Ct. Int’l Trade, Nov. 3, 2000) (extending the Zenith rule to cases in which a party
challenges an affirmative sunset review determination.) Nevertheless, Plaintiff has failed to
establish that it would suffer irreparable injury by being forced out of business and thereby lose
its ability to obtain effective and meaningful judicial review.
To support its argument, Plaintiff provides an affidavit from its “major” United States
customer stating that it would be unable to continue importing Plaintiff’s products as a result of
the antidumping duty deposit rates and that all existing and future orders were to be immediately
cancelled. This affidavit, however, proves little other than Plaintiff has lost one of its customers
Court No. 00-08-00393 Page 7
in the United States. Although Plaintiff alludes to the “major” role held by this customer,
Plaintiff provides no evidence demonstrating how sales to this customer fit within its total sales
figures; nor how the loss of these sales will impact its overall financial position. Rather, Plaintiff
merely asserts that a substantial percentage4 of its business is “involved” in the production and
sale of subject merchandise and that a significant portion of its business is “linked” to the export
of subject merchandise to the United States. This assertion, on its face, provides little support for
Plaintiff’s argument. Even a cursory examination of Plaintiff’s offering indicates that, although
a substantial percentage of Plaintiff’s business is “involved” with or “linked” to the production
and sale of subject merchandise, Plaintiff is not wholly committed to manufacturing subject
merchandise for export to the United States. A significant amount of Plaintiff’s business
apparently is directed toward other outlets. Evidently, based upon current production rates, a
substantial percentage of subject merchandise either has been sold or could be sold to customers
that have not cancelled their orders. Plaintiff fails to demonstrate how the loss of its major
customer will adversely affect its total sales outlook in light of the availability of alternative
consumer markets. Accordingly, not only does Plaintiff’s evidence fail to illustrate how the loss
of a single customer would result in the end of its business life, this evidence appears to establish
that Plaintiff has viable alternative markets in which to sell its products. Thus, even accepting
that Plaintiff will lose the percentage of sales alleged in its brief, the presence of alternative
markets for a substantial amount of its current production weighs heavily against the conclusion
that Plaintiff will be forced out of business.
As stated, Plaintiff’s evidence consists solely of an affidavit from its “major customer.”
Although informative, this Court has held that “affidavits submitted by interested parties are
4
Because of the proprietary nature of much of Plaintiffs’ supporting materials, the Court declines to provide specific
percentages and numerical information.
Court No. 00-08-00393 Page 8
weak evidence, unlikely to justify a preliminary injunction.” Shree Rama Enterprises v. United
States, 983 F. Supp. 192, 195 (Ct. Int’l Trade 1995). Plaintiff has not bolstered these affidavits
through independent evidence indicating exactly how and when these lost sales would force it
out of business. See Companhia Brasileira Carbureto de Calcio v. United States, 18 CIT 215,
217 (1994) (“No hard evidence was submitted to the court indicating what specific effect loss of
such sales would have upon [plaintiff].”). For example, Plaintiff has offered no proof that it
would be unable to obtain outside financing to cover the costs of the higher antidumping duty
deposit rate and thereby sustain its business throughout the course of this litigation. See Chilean
Nitrate Corp. v. United States, 11 CIT 538, 541 (1987). Similarly, no financial statements have
been proffered indicating that Plaintiff does not possess the capital reserves necessary to remain
viable during this litigation. See id.
Plaintiff SHGC has failed to provide “marketing studies, written financial data or other
hard evidence of the serious permanent harm which would result from denial of the
injunction….” Shree Rama Enterprises, 983 F. Supp. at 195, quoting, Chilean Nitrate, 11 CIT at
541. In light of the deposit rates in effect through virtually the entire life of the antidumping
order at issue, it would seem Plaintiff SHGC would be unable to meet this burden of proof.
Between 1983 and 1996, Plaintiff SHGC did not directly import subject merchandise into the
United States, but conducted its sales through a separate company licensed to export to the
United States – Shandong Machinery Import & Export Corporation (SMC). It was only after
1996 that Plaintiff SHGC directly exported subject merchandise to the United States and
participated in any of the relevant administrative reviews. Accordingly, prior to 1996 Plaintiff’s
sales would have been subject to the country-wide rate applicable to the People’s Republic of
China (PRC) or the company-specific rate applicable to SMC. Between the date the
Court No. 00-08-00393 Page 9
antidumping duty order was originally imposed and 1996, the average antidumping duty rate on
subject merchandise applicable to SMC was 32.92 percent. During the same time period, the
average PRC country-wide antidumping duty rate was 49.04 percent. Although acknowledging
that the difference between an antidumping duty deposit rate of 1.26% and 28.96% is significant,
the Court notes that the current 28.96% deposit rate is substantially less than the average rate that
was in effect throughout virtually the entire course of the antidumping order. Plaintiff was
clearly able to make sales in the United States and to remain in business despite these significant
antidumping duty rates. Plaintiff fails to adequately explain why now, in the face of lower
antidumping duty rates, it is incapable of maintaining a viable business.
The present case is readily distinguishable from another decision that has granted
injunctive relief against the collection of estimated antidumping duty deposits. In Queen’s
Flowers de Colombia v. United States, 947 F. Supp. at 509, this Court granted certain plaintiffs a
preliminary injunction enjoining the collection of estimated antidumping duty deposits during
the course of their litigation challenging an administrative review determination. Crucial to the
Court’s decision was the fact that the subject merchandise was a highly “perishable good tailored
to the unique demands of the United States flower market.” Id. at 506. Because of this,
“alternative markets [did] not exist in which the companies [could] sell their excess capacity to
stay in business.” Id. at 506-507. The Court further emphasized that the “new deposit rate is…
very high, relative to the rates set in the prior administrative review.” Id. at 507. In the present
case, the subject merchandise is not perishable. Although, Plaintiff asserts that the merchandise
produced for its “major” customer conformed to specific design requirements, was subject to the
customer’s patents and, therefore, could not be re-sold, this Court was not presented any
evidence substantiating this claim. Similarly, Plaintiff has not produced any evidence
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establishing that it would go out of business during the year 2000, thereby negating the
possibility of selling its excess inventory in the future. This is significant because on the
anniversary date of the 1998-1999 administrative review, Plaintiff could petition Commerce for a
new administrative review and potentially lower its antidumping duty deposit rate. It is unclear
why Plaintiff could not simply store the non-perishable subject merchandise that would have
been sold to its “major” customer pending either the successful outcome of this litigation or a
new administrative review determination in 2001.
In sum, this Court finds that Plaintiff has failed to prove that it would suffer irreparable
harm by being forced out of business through the imposition of the challenged antidumping duty
deposit rates. Although the Court acknowledges that Plaintiff may suffer some economic injury
as a result of the higher deposit rates, there is no proof that this injury would be irreparable.
Accordingly, this Court finds that Plaintiff would not suffer irreparable injury if its motion for
injunctive relief were denied.
Because this Court finds that in the absence of a preliminary injunction Plaintiff would
not suffer irreparable injury, it is not necessary to examine the remaining three factors in depth.
“[T]he absence of an adequate showing with regard to any one factor may be sufficient, given
the weight or lack of it assigned the other factors, to justify the denial [of a preliminary
injunction].” FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993). A brief discussion
of these factors, however, will further establish that Plaintiff is not entitled to preliminary
injunctive relief. As to the likelihood of success on the merits, the Court acknowledges that the
Plaintiff has raised “serious, substantial, difficult and doubtful” legal questions that are
appropriate for litigation. The failure, however, to establish irreparable harm significantly raises
the burden imposed on Plaintiff to prove a likelihood of success on the merits. By statute,
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Commerce’s administrative review determinations are presumed to be correct and the burden of
proving otherwise rests exclusively upon the party challenging such decision. See 28 U.S.C.
§2639(a)(1). On the papers before this Court, it is unclear whether Plaintiff can surmount this
burden. Plaintiff, therefore, has failed to satisfy this requirement. Finally, this Court finds that
neither the public interest, nor the balance of hardships weighs significantly in favor of granting
the preliminary injunction. The government possesses an interest in protecting itself against
default. See Shree Rama 983 F. Supp. at 196. To this end, Commerce directed “a cash deposit,
bond, or other security” be deposited for every entry of merchandise subject to an antidumping
order. See 19 U.S.C. §1671d(c)(1)(B)(ii) (1994). Thus, paying deposits pending Court review is
an ordinary consequence of the statutory scheme. The public has an interest in ensuring the fair
application of the antidumping laws while simultaneously guaranteeing foreign exporters will
not default in the satisfaction of their import obligations.
CONCLUSION
For the reasons stated above, this Court finds that the Plaintiff has failed to satisfy the
prerequisites necessary to obtain a preliminary injunction. Accordingly, Plaintiff’s motion is
hereby DENIED.
____________________________
Gregory W. Carman,
Chief Judge
Dated: November _____, 2000
New York, NY