Trustees in Bankruptcy of North American Rubber Thread Co. v. United States

United States Court of Appeals for the Federal Circuit

2009-1191

TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC.,

Plaintiff,

and

FILMAX SDN. BHD., HEVEAFIL USA INC.,
and HEVEAFIL SDN. BHD.,

Plaintiffs-Appellees,

v.

UNITED STATES,

Defendant-Appellant.

Jay C. Campbell, White & Case LLP, of Washington, DC, argued for plaintiffs-
appellees. With him on the brief was Walter J. Spak.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of Washington, DC, argued for
defendant-appellant. With her on the brief were Michael F. Hertz, Acting Assistant
Attorney General, Jeanne E. Davidson, Director, and Stephen C. Tosini, Trial Attorney.

Appealed from: United States Court of International Trade

Senior Judge Richard W. Goldberg
 United States Court of Appeals for the Federal Circuit

2009-1191

TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC.,

Plaintiff,

and

FILMAX SDN. BHD., HEVEAFIL USA INC.,
and HEVEAFIL SDN. BHD.,

Plaintiffs-Appellees,

v.

UNITED STATES,

Defendant-Appellant.

Appeal from the United States Court of International Trade in
consolidated case nos. 05-00539 and 05-00659,
Senior Judge Richard W. Goldberg.

__________________________

DECIDED: February 1, 2010
__________________________

Before MICHEL, Chief Judge, FRIEDMAN and GAJARSA, Circuit Judges.

Opinion for the court filed by Chief Judge MICHEL. Dissenting opinion filed by Circuit
Judge GAJARSA.

MICHEL, Chief Judge.

The Department of Commerce (Commerce) entered an antidumping duty order in

1992 covering extruded rubber thread from Malaysia. In 2004, the foreign industry

(Heveafil) asked Commerce to conduct a changed circumstances review, arguing that
the duty order should be revoked with the revocation effective October 1, 1995,

because the domestic industry (North American Rubber Thread) had declared

bankruptcy and ceased operations. The Trustees in Bankruptcy of North American

Rubber Thread (NART) agreed that circumstances had changed and the duty order

should be revoked, but they argued during the changed circumstances review that the

effective date of October 1, 1995, was incorrect, and the revocation should be effective

only as of October 1, 2003. Commerce conducted the changed circumstances review

and agreed with NART. As such, the duty order was revoked effective October 1, 2003.

In 2005, NART and Heveafil asked Commerce to conduct a second changed

circumstances review, arguing that, because NART had changed its mind about the

proper effective date, the duty order should be re-revoked effective October 1, 1995,

instead of October 1, 2003. Commerce declined to undertake the second changed

circumstances review, holding that, because the order had already been revoked, there

was no longer an order that could be reviewed. In the Court of International Trade

(CIT), NART and Heveafil challenged Commerce’s refusal to conduct the second

changed circumstances review, but the United States opposed the CIT litigation on two

grounds. First, the United States argued that the CIT did not have jurisdiction to hear

NART’s or Heveafil’s challenge to Commerce’s refusal to conduct a changed

circumstances review. Second, the United States argued that NART was judicially

estopped from offering an argument in the CIT contrary to the argument it offered at

Commerce during the first changed circumstances review. The CIT found that it had

jurisdiction over the challenges under 28 U.S.C. § 1581(i)(4) and that NART was not

precluded by the doctrine of judicial estoppel from bringing its challenge. Because we

2009-1191 2
find that the CIT had jurisdiction over NART’s challenge but not Heveafil’s challenge,

and because we find that NART was judicially estopped from challenging the October 1,

1995 effective date, we affirm in part, reverse in part, and vacate in part.

I. BACKGROUND

Commerce administers the antidumping duty law, under which the United States

imposes duties on imports of merchandise sold below its fair value. In order for duties

to be imposed on imported merchandise, an antidumping duty order relating to that

merchandise must first be entered. After entry of an antidumping duty order,

Commerce can—at the request of any party affected by the order—undertake a

“changed circumstances” review of the order. 19 U.S.C. § 1675(b)(1). This review can

result in the revocation of the order as of an effective date that is determined by

Commerce. 19 U.S.C. § 1675(d).

Here, in 1992, Commerce entered an antidumping duty order covering extruded

rubber thread from Malaysia. Extruded Rubber Thread from Malaysia, 57 Fed. Reg.

46,150 (Oct. 7, 1992). In 2004, Heveafil, as a foreign producer whose merchandise

was subject to the duty order, asked Commerce to conduct a changed circumstances

review of the order, arguing that North American Rubber Thread, the sole domestic

producer of rubber thread, had filed for bankruptcy and ceased operations, warranting

revocation of the antidumping duty order. Heveafil asked for the order to be revoked

retroactive to October 1, 1995, because this would cover all unliquidated entries still

controlled by Customs and Border Protection. During the 2004 changed circumstances

review, NART (the successor-in-interest to North American Rubber Thread) argued

against Heveafil, agreeing with Heveafil that the order should be revoked, but urging

2009-1191 3
Commerce to make the effective date of the revocation October 1, 2003, covering only

the unliquidated entries that had not yet been the subject of an annual administrative

review of the order. NART contends that it was in its best interest to argue in 2004 that

the effective date of the revocation should be 2003. Commerce agreed with NART and

revoked the order retroactive only to October 1, 2003.

Heveafil brought an action in the CIT under 28 U.S.C. § 1581(c), challenging the

effective date of the revocation. That action is not at issue in this appeal, but it remains

pending and is stayed awaiting resolution of this case. During the pendency of that

action, though, Heveafil and NART reached a settlement agreement resolving their

dispute over the antidumping duty order. As a result of the settlement agreement,

NART believed it was in its best interest to argue that the order should have been

revoked with an effective date of 1995.

Thus, despite NART’s argument against the October 1, 1995 revocation date in

the 2004 changed circumstances review, and despite NART’s having prevailed on this

issue, NART asked Commerce in 2005 to conduct a second changed circumstances

review, now urging Commerce to re-revoke the antidumping duty order effective

October 1, 1995. NART argued that its failure to possess any interest in the

enforcement or existence of the order after October 1, 1995, warranted revocation of

the order as of that date. On June 15, 2005, Commerce notified NART that it was

refusing to initiate the second changed circumstances review, arguing that it was unable

to revoke “an order to cover entries subject to a completed administrative review.” Trs.

in Bankr. of N. Am. Rubber Thread Co., Inc. v. United States, 464 F. Supp. 2d 1350,

1353 (Ct. Int’l Trade 2006) (“NART I”).

2009-1191 4
 Both Heveafil and NART challenged Commerce’s refusal to initiate the second

changed circumstances review. They invoked the CIT’s residual jurisdiction statute, 28

U.S.C. § 1581(i)(4), which grants the CIT jurisdiction over suits against the United

States arising out of administration and enforcement of the laws relating to duties on

imported merchandise. The United States brought a motion to dismiss for lack of

jurisdiction, arguing that § 1581(i) was unavailable. The CIT denied the government’s

motion to dismiss. Id. at 1364. The CIT held first that NART’s change of heart as to the

proper effective date for revocation of the order should not bar NART’s new argument,

even in light of its successful earlier argument to the contrary. Id. at 1357. The CIT

next held that, although no other portion of 28 U.S.C. § 1581 provided jurisdiction,

subject-matter jurisdiction over NART’s and Heveafil’s claims was available under 28

U.S.C. § 1581(i)(4). Id. at 1354-58. The CIT also considered and rejected the

government’s argument that a 1984 amendment to 19 U.S.C. § 1516a precluded the

CIT from exercising jurisdiction over refusals by Commerce to initiate changed

circumstances reviews. Id. at 1358-64. On appeal to this court, the government

contests each of these holdings.

After the decision in NART I, the CIT considered the merits of the challenge to

Commerce’s decision not to conduct the second changed circumstances review and

remanded to Commerce for an explanation of why Commerce’s decision did not

constitute a departure from its normal practice of initiating changed circumstances

reviews whenever the domestic industry expressed no interest in the continuation of an

antidumping duty order. Trs. in Bankr. of N. Am. Rubber Thread Co., Inc. v. United

States, 533 F. Supp. 2d 1290 (Ct. Int’l Trade 2007) (“NART II”). On remand, Commerce

2009-1191 5
once again refused to conduct the changed circumstances review, attempting to

distinguish the earlier “standard practice” reviews cited by the CIT. The CIT rejected

these remand results, ordering the second changed circumstances review to proceed.

Trs. in Bankr. of N. Am. Rubber Thread Co., Inc. v. United States, No. 05-00539, 2008

WL 2350925 (Ct. Int’l Trade Jun. 10, 2008) (“NART III”). This appeal followed, with the

United States appealing only the jurisdictional and judicial estoppel issues decided in

NART I, not the merits issues decided in NART II or NART III.

II. DISCUSSION

As with other questions of law, we review the CIT’s jurisdictional rulings without

deference. JCM, Ltd. v. United States, 210 F.3d 1357, 1359 (Fed. Cir. 2000). We

review the CIT’s decision not to apply the judicial estoppel doctrine for abuse of

discretion. Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed. Cir. 1996).

Taking first the question of jurisdiction over Heveafil’s claim, the CIT exercised

subject-matter jurisdiction under 28 U.S.C. § 1581(i)(4), the residual jurisdiction portion

of 28 U.S.C. § 1581, which provides in relevant part that

the Court of International Trade shall have exclusive jurisdiction of any
civil action commenced against the United States, its agencies, or its
officers, 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;

....

(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.

2009-1191 6
28 U.S.C. § 1581(i). We have limited this very broad language so that § 1581(i)(4)

“‘may not be invoked when jurisdiction under another subsection of § 1581 is or could

have been available, unless the remedy provided under that other subsection would be

manifestly inadequate.’” Int’l Custom Prods. v. United States, 467 F.3d 1324, 1327

(Fed. Cir. 2006) (quoting Norcal/Crosetti Foods, Inc. v. United States, 963 F.2d 356,

359 (Fed. Cir. 1992)).

Under this rule, Heveafil cannot invoke § 1581(i)(4) to gain subject-matter

jurisdiction over its claim that Commerce should have initiated the second changed

circumstances review of the extruded rubber thread antidumping duty order. Were it to

pursue this claim in the CIT, the best outcome Heveafil could obtain would be an order

compelling Commerce to undertake the changed circumstances review, and the best

outcome of that review for Heveafil would be Commerce deciding that the revocation of

the duty order should be effective October 1, 1995. But Heveafil has available to it

another route to the same ultimate outcome. Heveafil brought a CIT challenge to

Commerce’s decision in the first changed circumstances review. The remedy available

under Heveafil’s challenge to the result of the first changed circumstances review is

clearly not “manifestly inadequate.” In fact, should Heveafil prevail, the remedy in that

action would be even more favorable to Heveafil than would be the remedy in this

action; Heveafil could get an order from the CIT compelling Commerce to change the

effective date of the revocation, not just an order compelling Commerce to undertake a

review that might lead to the effective date Heveafil seeks. There is no question about

the CIT’s jurisdiction over that complaint; the CIT has jurisdiction under 28

U.S.C. § 1581(c). Thus, for Heveafil’s claim here, “jurisdiction under another subsection

2009-1191 7
of § 1581 is . . . available, [and] the remedy provided under that other subsection [is not]

manifestly inadequate,” so the rule in International Custom Products bars jurisdiction

over the present claim under § 1581(i)(4). 467 F.3d at 1327. Because the CIT lacks

jurisdiction to hear Heveafil’s challenge to Commerce’s refusal to initiate the second

changed circumstances review, we reverse the portion of the CIT’s decision in NART I

finding such jurisdiction.

There is, however, no such jurisdictional infirmity with respect to NART’s claims.

The United States argues that NART could have brought an action challenging the

result of the first changed circumstances review, as Heveafil did. Because NART chose

not to bring this action, the United States argues, International Custom Products bars

NART’s attempt to use § 1581(i)(4) now. But there was no change in circumstances

between the original issuance of the antidumping duty order and the first changed

circumstances review that would have warranted NART’s supporting the 1995

revocation date during that review. Because NART did not argue for the 1995 date

during the first changed circumstances review, it could not have brought a CIT

challenge under § 1581(c) to Commerce’s rejection of such an argument, and it could

not have joined Heveafil’s § 1581(c) challenge to the results of the first changed

circumstances review. Circumstances did change, though, between the first changed

circumstances review and the parties’ request for a second changed circumstances

review: thanks to the settlement agreement between NART and Heveafil, there was no

longer any interest on the part of the domestic industry in maintaining the antidumping

duty order for the 1995-to-2003 period.

2009-1191 8
 NART argues that a second changed circumstances review was warranted and

that it should be able to bring a judicial challenge to Commerce’s refusal to initiate such

a review. We agree. There is nothing in § 1581(i)(4) that precludes judicial review of

Commerce refusals to initiate changed circumstances reviews. We have

described § 1581(i)(4) as a “broad residual jurisdiction provision” and as a “catch-all

provision,” and we see no reason to limit that broad scope to exclude judicial review of

the type of Commerce decision being challenged by NART here. Miller & Co. v. United

States, 824 F.2d 961, 963 (Fed. Cir. 1987); Norcal/Crosetti Foods, Inc., 963 F.2d at

359. Section 1581(i)(4) provides for jurisdiction in the CIT over “any civil action

commenced against the United States . . . that arises out of any law of the United States

providing for . . . administration and enforcement with respect to” any “duties . . . on the

importation of merchandise for reasons other than the raising of revenue.” 28

U.S.C. § 1581(i). When Commerce considered and denied the parties’ request for a

second changed circumstances review of the antidumping duty order, it was

unquestionably engaged in “administration and enforcement” of a United States law

“providing for . . . duties . . . on the importation of merchandise for reasons other than

the raising of revenue.” Id. Because NART’s claim in the CIT is a “civil action

commenced against the United States . . . that arises out of” this action by

Commerce, § 1581(i)(4) gives the CIT jurisdiction to hear the claim. Id.

As discussed above, there is one important limitation on § 1581(i)(4): it is not

available to circumvent relief that is or could have been available under other portions

of § 1581. But this limitation does not apply to NART’s claim the way that it does to

Heveafil’s claim. While Heveafil can get the relief it seeks through its § 1581(c) action,

2009-1191 9
NART could not have brought its challenge under § 1581(c). That subsection grants the

CIT jurisdiction over “any civil action commenced under [19 U.S.C. § 1516a].” 28

U.S.C. § 1581(c). Section 1516a, in turn, provides for review of decisions not to initiate

changed circumstances reviews only when those decisions are published in the Federal

Register, and Commerce’s decision not to initiate the changed circumstances review in

this case was not so published. Additionally, NART will have no future opportunity to

seek judicial review under § 1581(c), because there will be no future Commerce

decisions regarding the duty order at issue here. The antidumping duty order has been

revoked (because revocation was the result of the first changed circumstances review),

so there will be no more annual administrative reviews whose results NART will be able

to challenge in the CIT. Because NART has no current or future opportunities to get

judicial review of Commerce’s decision, we see no reason that it should not be

permitted to use § 1581(i)(4) to bring its CIT action. We therefore affirm that portion of

the CIT’s decision finding subject-matter jurisdiction to hear NART’s claim.

Because we find that the CIT has jurisdiction under 28 U.S.C. § 1581(i)(4) to

hear NART’s challenge to Commerce’s refusal to initiate the second changed

circumstances review, we need not reach the issue, raised by the United States, of

whether Congress’s 1984 amendment of 19 U.S.C. § 1516a(a)(1)(B) stripped the CIT of

its § 1581(c) jurisdiction over actions challenging refusals by Commerce to initiate

changed circumstances reviews.

Turning to the remaining issue, we find that NART is precluded by the doctrine of

judicial estoppel from arguing in the CIT in favor of a revocation date of October 1,

1995, given its earlier successful argument to Commerce that a revocation date of

2009-1191 10
October 1, 1995, was inappropriate. “‘[W]here a party assumes a certain position in a

legal proceeding, and succeeds in maintaining that position, he may not thereafter,

simply because his interests have changed, assume a contrary position, especially if it

be to the prejudice of the party who has acquiesced in the position formerly taken by

him.’” New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting Davis v. Wakelee,

156 U.S. 680, 689 (1895)). The determination of whether a party’s inconsistent legal

positions constitute judicial estoppel is informed by three factors, which the Supreme

Court did not intend to be exclusive: (1) whether the “party's later position [is] ‘clearly

inconsistent’ with its earlier position”; (2) “whether the party has succeeded in

persuading a court to accept that party's earlier position, so that judicial acceptance of

an inconsistent position in a later proceeding would create ‘the perception that either the

first or the second court was misled’”; and (3) “whether the party seeking to assert an

inconsistent position would derive an unfair advantage or impose an unfair detriment on

the opposing party if not estopped.” New Hampshire, 532 U.S. at 750-51 (quoting

United States v. Hook, 195 F.3d 299, 306 (7th Cir. 1999); Edwards v. Aetna Life Ins.

Co., 690 F.2d 595, 598 (6th Cir. 1982)). Judicial estoppel applies just as much when

one of the tribunals is an administrative agency as it does when both tribunals are

courts. Lampi Corp. v. Am. Power Prods., Inc., 228 F.3d 1365, 1377 (Fed. Cir. 2000)

(“The [judicial estoppel] doctrine also applies to administrative proceedings in which a

party obtains a favorable order by making an argument that it seeks to repudiate in a

subsequent judicial proceeding.”) (applying Seventh Circuit law); accord S. Coast Air

Quality Mgmt. Dist. v. Envtl. Prot. Agency, 472 F.3d 882, 891-92 (D.C. Cir. 2006);

Simon v. Safelite Glass Corp., 128 F.3d 68, 71-74 (2d Cir. 1997); Portela-Gonzalez v.

2009-1191 11
Sec’y of the Navy, 109 F.3d 74, 77-78 (1st Cir. 1997); Risetto v. Plumbers &

Steamfitters Local 343, 94 F.3d 597, 604 (9th Cir. 1996).

Here, NART argues that none of these three factors is present. First, NART

suggests that its inconsistent positions (opposed to the 1995 revocation date in the

Commerce review and in favor of the 1995 date now) are excused because the

antidumping laws contemplate the possibility of the domestic industry’s interests

changing over time. Second, NART argues that, while it succeeded in persuading

Commerce to adopt its position in the first changed circumstances review, it has not

tried to mislead either Commerce or the CIT in presenting its inconsistent positions.

Finally, NART notes that its change in position is not unfair to Heveafil, because NART’s

and Heveafil’s interests are now aligned in favor of NART’s current position. We are not

persuaded by any of these arguments.

NART admits that its current position is inconsistent with the position it took

during Commerce’s first changed circumstances review. The United States contends

that this is enough to establish that the first New Hampshire factor is present. NART

argues, though, that its inconsistency is excused because “U.S. antidumping law

contemplates that the domestic industry’s interests with respect to enforcement of an

antidumping order may change over time in light of intervening events.” NART correctly

notes that any time a representative of the domestic industry requests revocation of an

antidumping order through a changed circumstances review, it must necessarily take a

position contrary to the position it successfully took in getting the antidumping duty order

established in the first place. Thus, argues NART, adopting the theory of judicial

estoppel proffered by the United States could create the absurd result of no domestic

2009-1191 12
industry representative ever being able to seek revocation due to changed

circumstances. But we do not find it necessary to paint so broadly with the judicial

estoppel brush. Instead, we see no problem with allowing the domestic industry to

support imposing the antidumping duty order in the first place and then to support

revoking the order later (as long as circumstances have appropriately changed). As

NART points out, this situation is explicitly contemplated by the antidumping laws. We

do, however, see a judicial estoppel problem pertaining to the narrower issue of the

proper effective date of a revocation when the domestic industry first opposes a

particular revocation date (and prevails on that point) and then later supports the very

same date of revocation it previously opposed. This is not a situation where the

domestic industry has ceased manufacturing the products at issue, warranting

revocation of a duty order that made sense when there was a domestic industry to

protect. Instead, this is a change in a party’s legal position “simply because his

interests have changed.” New Hampshire, 532 U.S. at 749. NART’s positions here are

inconsistent, so the first New Hampshire factor is present.

The second factor is also present. The Supreme Court phrased this factor as

“whether the party has succeeded in persuading a court to accept that party’s earlier

position, so that judicial acceptance of an inconsistent position in a later proceeding

would create ‘the perception that either the first or the second court was misled.’” Id. at

750 (quoting Edwards, 690 F.2d at 599). Here, the United States focuses on the first

clause, correctly pointing out that NART succeeded during the first administrative review

in getting Commerce to adopt NART’s view that October 1, 1995, was an inappropriate

effective date for revocation of the antidumping duty order. By contrast, NART focuses

2009-1191 13
on the second clause, arguing that, because antidumping law permits parties to change

their minds based on changed factual circumstances, no reasonable person could

presume that NART’s inconsistent positions were intended to mislead either Commerce

or the CIT.

In deciding whether the second factor is present, we agree with the United States

that New Hampshire places the focus on whether the party offering a new inconsistent

position succeeded in persuading the first tribunal to adopt its earlier position, not on

whether there was some intent to mislead one of the tribunals. In New Hampshire,

there had been a boundary dispute between the states of Maine and New Hampshire,

and the parties settled their dispute by having the Supreme Court enter a consent

decree establishing (among other things) that the phrase “the middle of the [Piscataqua]

River” should be interpreted to refer to the centerline of the main navigational channel of

the river. Id. at 745. Twenty-five years later, New Hampshire sought to repudiate its

consent to this definition based on its asserted new understanding of historical

documents that used the phrase “the middle of the [Piscataqua] River.” Id. at 756. The

Supreme Court held that judicial estoppel barred New Hampshire from making this

argument, because it had successfully argued to the contrary in the earlier case. Id. at

752. In so ruling, the court found that New Hampshire had been successful in getting a

court to adopt its earlier position, but the court did not discuss whether there was any

suggestion that New Hampshire had misled the earlier court. Id. Thus, the important

portion of the second New Hampshire factor seems to be whether the party was

successful in getting a court to adopt its earlier position, not whether the party misled

2009-1191 14
the courts. Here, NART succeeded in getting Commerce to adopt its earlier position, so

the second factor is present.

The third factor that informs decisions on judicial estoppel is “whether the party

seeking to assert an inconsistent position would derive an unfair advantage or impose

an unfair detriment on the opposing party if not estopped.” Id. at 751. NART points out

that the only parties to the first and second changed circumstances reviews are NART

and Heveafil, and NART argues that Heveafil cannot be prejudiced by NART’s new

argument, because NART’s and Heveafil’s interests are now aligned (by virtue of the

settlement agreement between the parties). This is true enough, but it ignores the fact

that NART is not seeking to advance its new argument solely in administrative

proceedings at Commerce to which NART and Heveafil are the only parties. NART also

seeks to advance this argument in judicial proceedings against the United States in the

CIT. In those proceedings, the United States is a party, and the interests of the United

States do not align with NART’s interests. The United States has a valid interest in not

having to review previously-revoked antidumping duty orders in perpetuity at the whim

of any interested party. At some point, the revocation of an order must be final.

Permitting NART to advance its argument here puts that finality at risk, opening up the

possibility of interested parties seeking re-revocation (or re-imposition) of already-

revoked antidumping duty orders years after the original final decisions. 1

1
While Commerce has a duty to conduct administrative reviews, changed
circumstances reviews, and sunset reviews of existing antidumping duty orders,
Congress has not charged Commerce with reviewing revoked antidumping duty orders.
We hold that the United States has a legitimate interest in not reviewing the many
previously-extant duty orders that have been terminated under the various review
schemes established by Congress. Forcing Commerce to review all these orders in

2009-1191 15
 Further, barring NART from making this new inconsistent argument does not

prejudice NART’s interests. There is still an opportunity for the CIT to review the date of

revocation in the pending litigation brought by Heveafil under 28 U.S.C. § 1581(c) to

challenge Commerce’s original decision in the first changed circumstances review.

NART’s support of Heveafil’s proposed revocation date is surely a relevant factor in that

litigation. Given that permitting NART to maintain its new position, inconsistent with its

earlier position, would cause prejudice to the United States, and given that barring

NART from maintaining its new inconsistent position would not prejudice NART, the

third New Hampshire factor is present. Because the three New Hampshire factors are

present, NART is judicially estopped from arguing in the CIT that the proper effective

date for revocation of the antidumping duty order is October 1, 1995.

In addition to the three factors expressly laid out in New Hampshire, the Supreme

Court stated:

In enumerating these factors, we do not establish inflexible prerequisites
or an exhaustive formula for determining the applicability of judicial
estoppel. Additional considerations may inform the doctrine’s application
in specific factual contexts. In this case, we simply observe that the
factors above firmly tip the balance of equities in favor of barring New
Hampshire’s present complaint.

532 U.S. at 751.

During the first changed circumstances review, in which Heveafil urged that the

antidumping order should be revoked effective 1995, NART supported revocation but

opposed that date and instead urged a 2003 effective date. Commerce adopted the

latter date. When NART and Heveafil sought a second changed circumstances review,

perpetuity could substantially increase the time and effort Commerce expends in
reviewing orders.

2009-1191 16
its sole purpose was to change the effective revocation date to 1995, as Heveafil

already had proposed and to which NART had previously objected. NART did not

argue that the original effective date was erroneous, that there were any objective

factual changes that justified such a change, or that its “prior position was based on

inadvertence or mistake.” Id. at 753. All it stated was that it had changed its mind

about the proper effective date—apparently as a result of a settlement it had reached

with Heveafil of a dispute over the antidumping order.

In our view, NART did not provide an adequate reason for its change in position

that would justify Commerce changing the effective date of the antidumping order’s

revocation. Once a party takes a position in litigation, it cannot lightly about-face and

subsequently take the opposite position in later litigation. Something more than what

NART asserted is necessary before a court or administrative body should change its

prior position, which presumably was taken only after full consideration and which a

party persuaded the tribunal to adopt. Having originally successfully urged Commerce

to adopt the 2003 revocation date, NART’s subsequent decision that an earlier effective

date was more to its liking was not sufficient to warrant it to change its position, even

though the statute implicitly recognizes that the domestic industry’s interests may

change over time. Regardless of whether this “[a]dditional consideration[]” is sufficient

on its own to warrant holding that NART’s new argument is barred by judicial estoppel, it

is certainly sufficient in combination with the three New Hampshire factors discussed

above.

Because the CIT does not have jurisdiction to hear Heveafil’s challenge to

Commerce’s refusal to initiate the second changed circumstances review, and because

2009-1191 17
NART is estopped from arguing to the CIT that Commerce should have initiated the

review in order to change the effective date of the revocation, neither party is capable of

arguing its claim in the CIT. Therefore, we vacate the portion of the CIT’s judgment

ordering Commerce to initiate the second changed circumstances review. Because

remand would be futile, we do not remand for further proceedings.

III. CONCLUSION

The portion of NART I finding that the CIT had subject-matter jurisdiction over

Heveafil’s claim is reversed. The portion of NART I finding that the CIT had subject-

matter jurisdiction over NART’s claim is affirmed. The portion of the CIT’s judgment

ordering Commerce to initiate a changed circumstances review is vacated.

IV. COSTS

No costs.

AFFIRMED-IN-PART, REVERSED-IN-PART, AND VACATED-IN-PART

2009-1191 18
 United States Court of Appeals for the Federal Circuit

2009-1191

TRUSTEES IN BANKRUPTCY OF NORTH AMERICAN RUBBER THREAD CO., INC.,

Plaintiff,

and

FILMAX SDN. BHD., HEVEAFIL USA INC.,
and HEVEAFIL SDN. BHD.,

Plaintiffs-Appellees,

v.

UNITED STATES,

Defendant-Appellant.

Appeal from the United States Court of International Trade in
consolidated case nos. 05-00539 and 05-00659,
Senior Judge Richard W. Goldberg.

GAJARSA, Circuit Judge, dissenting.

I join the majority opinion with respect to the jurisdictional issues, but I

respectfully dissent from the majority’s use of judicial estoppel. Under the doctrine of

judicial estoppel, a court “prevents a party who prevails on one ground in a lawsuit from

then repudiating that ground in order to prevail in another lawsuit.” Lampi Corp. v. Am.

Power Prods., Inc., 228 F.3d 1365, 1377 (Fed. Cir. 2000). We have applied judicial

estoppel “to administrative proceedings in which a party obtains a favorable order by

making an argument that it seeks to repudiate in a subsequent judicial proceeding.” Id.

Courts invoke judicial estoppel to guard against the “‘risk of inconsistent court
determinations,’” thereby “‘protect[ing] the integrity of the judicial process.’” New

Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting United States v. C.I.T. Constr.

Inc., 944 F.2d 253, 259 (5th Cir. 1991) and Edwards v. Aetna Life Ins. Co., 690 F.2d

595, 598 (6th Cir. 1982)). But judicial estoppel no longer serves its purpose when a

party has failed to persuade a court or agency to adopt its position and a court faces no

risk of reaching an inconsistent determination. With an appeal pending, the risk of

reaching inconsistent determinations has yet to materialize. In short, a party has yet to

successfully persuade a court or agency to adopt its position for the purposes of judicial

estoppel when a decision is pending appeal and the appeal relates directly to the party’s

original legal position.

In this case, Heveafil, USA, Inc. (Heveafil) has appealed the Department of

Commerce’s (Commerce) determination to revoke its antidumping duty order as of

October 1, 2003. The Court of International Trade (CIT) stayed Heveafil’s appeal

pending the result of this case. Because CIT could reverse Commerce’s determination

and hold that the antidumping duty order should be revoked as of October 1, 1995, the

Trustees in Bankruptcy of North American Rubber Thread Co.’s (NART) current position

may be completely consistent with CIT’s determination. The majority avoids addressing

this difficult legal issue by ignoring the consequences of CIT reversing the revocation’s

effective date. With the pending appeal in mind, the possibility that NART’s earlier

position persuades CIT, instead of its current position, is an insufficient reason to apply

judicial estoppel. Although no federal court of appeals has addressed this issue, the

Supreme Court’s reasoning in New Hampshire v. Maine suggests that judicial estoppel

is not appropriate here.

2009-1191 2
 In New Hampshire, the Court enumerated three non-exclusive factors to consider

in applying judicial estoppel. “First, a party’s later position must be clearly inconsistent

with its earlier position.” Id. at 750 (internal quotation marks omitted). “Second, courts

regularly inquire whether the party has succeeded in persuading a court to accept that

party’s earlier position, so that judicial acceptance of an inconsistent position in a later

proceeding would create ‘the perception that either the first or the second court was

misled.’” Id. (quoting Edwards, 690 F.2d at 598). Third, courts consider “whether the

party seeking to assert an inconsistent position would derive an unfair advantage or

impose an unfair detriment on the opposing party if not estopped.” Id. at 751. The

second factor relates directly to the purpose of judicial estoppel and is at issue here.

The Court’s explanation of the second factor demonstrates how reversal on

appeal can make judicial estoppel inappropriate. The Court explained, “Absent success

in a prior proceeding, a party’s later inconsistent position introduces no ‘risk of

inconsistent court determinations,’ and thus poses little threat to judicial integrity.” Id. at

750–51 (quoting C.I.T. Constr. Inc., 944 F.2d at 259). In theory, the purpose of judicial

estoppel is “‘to protect the integrity of the judicial process,’ by ‘prohibiting parties from

deliberately changing positions according to the exigencies of the moment.’” Id. at 749–

50 (quoting Edwards, 690 F.2d at 598 and United States v. McCaskey, 9 F.3d 368, 378

(5th Cir. 1993)). If an appellate court reverses a decision that relied on a party’s earlier

position, then the risk of inconsistent court determinations evaporates. In such

circumstances, a party’s later position will remain inconsistent with its earlier position,

but it will no longer contradict a court determination. Without a risk that court or agency

decisions will contradict, courts should resist muzzling a party with judicial estoppel. As

2009-1191 3
explained below, the risk of contradiction relevant for judicial estoppel ripens only after a

party exhausts the appeals process.

The federal courts of appeals’ cases that address whether judicial estoppel

applies to decisions reversed on appeal demonstrate the risk of contradiction motivating

the Court in New Hampshire. The Sixth and Seventh Circuits are split on whether a

decision reversed on appeal constitutes “success in a prior proceeding.” The Sixth

Circuit refused to apply judicial estoppel to a party who asserted inconsistent positions

in separate trials because the first trial verdict was reversed on appeal and thus did not

satisfy the success requirement. Coal Res., Inc. v. Gulf & Western Indus., Inc., 865

F.2d 761, 773 (6th Cir. 1989) (citing Edwards, 690 F.2d at 598). In contrast, the

Seventh Circuit held that a court can apply judicial estoppel when an appellate court has

reversed a court determination that relied on a party’s earlier position and that same

party takes a position inconsistent with its earlier position in a subsequent case.

Carnegie v. Household Int’l, Inc., 376 F.3d 656, 659–60 (7th Cir. 2004); see also U.S.

Philips Corp. v. Sears Roebuck & Co., 55 F.3d 592, 597 (Fed. Cir. 1995) (applying

judicial estoppel under Seventh Circuit law to a party who took a position in the first

case when that case was reversed on different grounds and who took an inconsistent

position in a subsequent case). But see McNamara v. City of Chicago, 138 F.3d 1219,

1225 (7th Cir. 1998) (suggesting that judicial estoppel does not apply to a party who

abandoned a position on appeal that it successfully litigated below because the party

did not obtain a favorable judgment on the basis of its position).

The Sixth Circuit’s interpretation of “success” better informs this court on how to

apply judicial estoppel to a party when the case adopting the party’s earlier position is

pending appeal. According to the Sixth Circuit, a decision adopting a party’s earlier

2009-1191 4
position, but that is overturned on appeal, does not impugn the integrity of the judicial

process because there is no longer a risk of inconsistent court determinations. See

Coal Res., 865 F.2d at 773 (“We reject [appellant’s] judicial estoppel argument because

[appellee] was not successful in the prior trial. Its verdict was reversed on appeal.”).

Although the Sixth Circuit briefly addressed the issue, its conclusion better serves the

purpose of judicial estoppel. Without a risk of inconsistent court decisions, judicial

estoppel ceases to serve its purpose. Of course, there is still a risk of inconsistent court

determinations and judicial estoppel may be appropriate if the appellate court reverses

on an issue that does not implicate the party’s earlier position. But as the Sixth Circuit’s

opinion implies, judicial estoppel should not apply when the appellate court reverses on

an issue that directly relates to the earlier position.

Similarly, a party who has persuaded a lower court or agency to adopt its earlier

position has not yet successfully persuaded a court to accept its position if an appeal is

pending that directly relates to the party’s earlier position. To be sure, any two courts

that consider the same issue could reach inconsistent results when the same party

advocates differing positions. But if the mere potential of inconsistent results triggered

judicial estoppel, then success would not matter at all. The better view is that the risk of

inconsistent court determinations materializes only when the party is ultimately

successful in persuading a court, including the appeal. When an appeal is pending,

there is a possibility that the appellate court’s decision will be consistent with the party’s

later position.

The consequences of a potential reversal on appeal in this case demonstrate

why the Sixth Circuit’s interpretation of “success” is more likely the type of “success”

that the Court considered in New Hampshire. If CIT reverses Commerce, holding that

2009-1191 5
the effective date of revocation is October 1, 1995, and this court estops NART from

arguing that the revocation should be effective on that same date, then NART will be

estopped from taking a position consistent with CIT’s holding—even though there will be

no risk that NART’s later position would lead to inconsistent court decisions. This

possibility demonstrates why estopping NART here does not further the purpose of

judicial estoppel because “[a]bsent success in a prior proceeding, a party’s later

inconsistent position introduces no ‘risk of inconsistent court determinations,’ and thus

poses little threat to judicial integrity.” New Hampshire, 532 U.S. at 750–51 (quoting

C.I.T. Constr. Inc., 944 F.2d at 259).

In this case, the second changed circumstances review would be moot if CIT

reverses. But another foreign market participant could revive the issue of the revocation

order’s effective date by requesting a subsequent changed circumstances review. In

such a review, NART could not take a position consistent with CIT’s reversal if we

applied judicial estoppel and CIT reversed.

Finally, the court should not apply judicial estoppel while an appeal is pending

here because doing so creates tension with this court’s holding in Biomedical Patent

Management Corp. v. California, Department of Health Services, 505 F.3d 1328 (Fed.

Cir. 2007). This tension is apparent when one compares the Seventh Circuit’s decision

in Carnegie to Biomedical Patent Management Corp. In Carnegie, the Seventh Circuit

explained that the purpose of judicial estoppel supported applying the doctrine to a party

who successfully persuaded one court of its position even when that decision was

reversed on appeal. 376 F.3d at 660. According to the Seventh Circuit, the purpose of

judicial estoppel is to deter parties from committing perjury or defrauding the court. Id.

A repeat litigant will have less incentive to commit perjury or defraud the court if the

2009-1191 6
litigant must maintain its position and accept the consequences in later cases. Id. To

be sure, “[t]he purpose of [judicial estoppel] is to ‘protect the integrity of the judicial

process,’ by ‘prevent[ing] parties from playing fast and loose with the courts to suit the

exigencies of self interest.’” In re Coastal Plains, Inc., 179 F.3d 197, 205 (5th Cir. 1999)

(quoting Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5th Cir.1988)). While the

Seventh Circuit may be correct about deterring fraud, its rule appears to require a party

to maintain a losing position in subsequent cases after it loses on appeal. Such a rule

would run counter to Biomedical Patent Management Corp. In that case, this court

held that an intervening Supreme Court decision on sovereign immunity excused the

California Department of Health Services’ inconsistent positions. See Biomedical

Patent Management Corp., 505 F.3d at 1342. In other words, we held that judicial

estoppel was inappropriate when a party changes positions to reflect a change in the

law. Id. Judicial estoppel should not be applied differently to a litigant who was a party

in the law-changing appeal. At least when the party asserts inconsistent legal

positions—as opposed to factual positions—it would be unfair to require a litigant who is

party in the law-changing case to maintain a losing legal position in subsequent

litigation. The same should be true of a party that changes positions when an appeal is

pending.

I recognize that this case may be a particularly attractive candidate in which to

apply judicial estoppel. NART’s inconsistent positions strongly suggest that it was either

misrepresenting facts during the first changed circumstances review or the second.

Moreover, Heveafil’s chances of success on appeal may be minimal. If CIT affirms

Commerce, this court should estop NART from arguing in favor of a different effective

date. But ignoring the possibility that this case or another similarly situated could be

2009-1191 7
reversed on appeal makes this case an “example of the adage that ‘bad facts make bad

law.’” Haig v. Agee, 453 U.S. 280, 319 (1981) (Brennan, J., dissenting). Therefore, I

respectfully dissent and would affirm CIT’s order directing Commerce to initiate a

changed circumstances review.

2009-1191 8