Slip Op. No. 13-53
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Nicholas Tsoucalas, Senior Judge
___________________________________
TIANJIN MAGNESIUM INTERNATIONAL :
CO., LTD., :
:
Plaintiff, :
:
v. : Consol. Court No.: 11-00006
:
UNITED STATES, :
:
Defendant, :
:
and :
:
US MAGNESIUM LLC, :
:
Defendant-Intervenor. :
:
MEMORANDUM ORDER
Held: Defendant United States is awarded $8,302.20 in combined fees
and costs, and defendant-intervenor US Magnesium LLC is awarded
$34,042.72 in combined fees and costs.
Dated: April 23, 2013
Riggle & Craven, (David A. Riggle) for Tianjin Magnesium
International Co., Ltd., Plaintiff.
Stuart F. Delery, Acting Assistant Attorney General; Jeanne E.
Davidson, Director, Claudia Burke, Assistant Director, Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Renee Gerber and Alexander v. Sverdlov); Office of Chief
Counsel for Import Administration, United States Department of
Commerce, Melissa Brewer, Of Counsel, for the United States,
Defendant.
King & Spalding, LLP, (Stephen A. Jones, Jeffrey B. Denning,
and Taryn K. Williams) for US Magnesium LLC, Defendant-Intervenor.
TSOUCALAS, Senior Judge: Before the court are defendant
United States Department of Commerce’s (“Commerce”) and defendant-
Court No. 11-00006 Page 2
intervenor US Magnesium LLC’s (“USM”) bills of costs, and plaintiff
Tianjin Magnesium International Co., Ltd.’s (“TMI”) response
thereto. By orders dated November 21, 2012 and December 21, 2012,
the court awarded fees and costs sua sponte in favor of Commerce
and USM on the basis of TMI’s frivolous argumentation and repeated
misrepresentations to the court. Tianjin Magnesium Int’l Co. v.
United States, 36 CIT __, __, 883 F. Supp. 2d 1330, 1332 (2012)
(“Tianjin III”). As explained below, the court hereby limits USM’s
requested fees and costs to those charged between October 1, 2011
and May 16, 2012, reduces fees and costs associated with the oral
argument by 60%, and adjusts downward all fees awarded to reflect
average rates for attorneys in the Washington, D.C. area. The
court awards Commerce all of its requested fees and costs.
BACKGROUND
With gall typical of its submissions in this action, TMI
mischaracterizes the court’s previous order early in its response:
“The court mentions ‘intentionally fraudulent conduct’ in another
action, but states that ‘[it] is not aware of any identical
misconduct during this appeal.’” TMI’s Resp. at 3 n.2 (quoting
Tianjin Magnesium Int’l Co. v. United States, 36 CIT __, __, 878
F. Supp. 2d 1351, 1352 (2012) (“Tianjin II”)). TMI uses this quote
to imply that the court did not identify any misconduct whatsoever.
To the contrary, as it stated in the very same sentence, the court
found “it troubling that TMI employed other tactics designed to
Court No. 11-00006 Page 3
mislead the court and the other parties to this action.” Tianjin
II, 36 CIT at __, 878 F. Supp. 2d at 1352 (emphasis added). The
docket is in fact replete with instances of TMI’s misconduct:
! TMI frivolously attempted to amend its complaint to
include a challenge to Commerce’s use of “zeroing”
despite its failure to exhaust administrative remedies.
Specifically, TMI claimed that the holding in Dongbu
Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir.
2011) overruled precedent that prevented TMI from
objecting to zeroing below, thus triggering the “legal
question” and “futility” exceptions. TMI’s Mot. Amend
Compl. at 1–2, 14–15. In reality, nothing prevented TMI
from objecting to Commerce’s use of zeroing below and
there was no factual basis to support the futility and
legal question exceptions.
! In its motion for judgment on the agency record, TMI
argued that Commerce erred in calculating the surrogate
financial ratio without being candid about its own
failure to exhaust the claim below. See Pl.’s Mot. J.
Agency R. at 13–24 (“Pl.’s MJAR”); Tianjin II, 36 CIT at
__, 878 F. Supp. 2d at 1352. Furthermore, despite
complete and “accurate refutations from both Commerce and
[USM]” in response, TMI continued the argument in its
reply brief without once acknowledging the exhaustion
issue. Tianjin II, 36 CIT at __, 878 F. Supp. 2d at
1352.
! TMI submitted supporting documents during the underlying
review knowing that they had been falsified so as to
obtain a lower dumping margin. Tianjin Magnesium Int’l
Co. v. United States, 36 CIT __, __, 844 F. Supp. 2d
1342, 1344–48 (2012) (“Tianjin I”). Nevertheless, in its
response to USM’s motion for judgment on the agency
record, TMI insisted that it “cooperated fully in the
review by submitting responses to all questions . . . and
being subject to a lengthy verification,” and that
“[t]here is no information of record showing that the
primary information relied on in calculating a margin was
misleading or unverifiable in the review.” Pl.’s Resp.
USM’s Mot. J. Agency R. at 2–6. TMI’s argument
significantly misrepresents undisputed portions of the
Court No. 11-00006 Page 4
record.1 See Tianjin I, 844 F. Supp. 2d at 1347–48.
! TMI requested an extension to respond to the remand
results, but it did not file any comments within that
time frame. After the court issued an order accepting
the remand results, TMI filed a motion for
reconsideration in which it argued, incredibly, that it
did not have an opportunity to respond. Tianjin III, 36
CIT at __, 883 F. Supp. 2d at 1331-32.
These are but the latest examples of TMI and its counsel’s
obstructive behavior in trade proceedings. See Tianjin Magnesium
Int’l Co. v. United States, 35 CIT __, __, Slip Op. 11-17 at 10–11
(Feb. 11, 2011) (not published in the Federal Supplement) (noting
TMI’s complete failure to address an “obvious problem” with its
argument despite accurate refutation from USM and Commerce);
Tianjin Magnesium Int’l Co. v. United States, 35 CIT __, __, Slip
Op. 11-100 at 2–6 (Aug. 10, 2011) (not published in the Federal
Supplement) (describing TMI’s submission of voluminous falsified
records and other intentional misrepresentations before Commerce);
Tianjin I, 36 CIT at __, 844 F. Supp. 2d at 1344–48 (describing
TMI’s submission of some of the same falsified records as those
described in Slip Op. 11-100 during the proceedings that led to the
present appeal).
In its bill of costs, Commerce itemizes the time it “devoted
to responding to [TMI]’s argument,” which it estimates to be “40
1
As TMI argues, its response does parallel Commerce’s
position on the adverse facts issue. Unlike TMI, however, Commerce
did not misrepresent the record by arguing that it was devoid of
relevant fraudulent or unverifiable filings. See Commerce’s Resp.
Pl.’s & USM’s Mots. J. Agency R. at 8–9, 25–31.
Court No. 11-00006 Page 5
percent of the fees and costs associated with [its response] brief
and related oral argument.” Gerber Aff. at 1–2. Commerce also
seeks full reimbursement for fees associated with TMI’s motion to
file an amended complaint. Id. at 2. Commerce calculates its
requested fees based on its counsel’s placement in the “Laffey
Matrix,” id. at 2–3, which “is a chart of hourly rates for
attorneys and paralegals in the Washington, D.C. area that was
prepared by the United States Attorney’s Office for the District of
Columbia to be used in fee-shifting cases.” Pickett v. Sheridan
Health Care Ctr., 664 F.3d 632, 649 (7th Cir. 2011). Accordingly,
Commerce requests an award of $8,120.00 in fees and $182.20 in
costs. Gerber Aff. at 1–3.
USM, on the other hand, bases its request on the amounts its
attorneys and support staff actually billed. Jones Aff. at 3.
These fees range from $150 per hour for a paralegal’s work to $645
per hour for a partner’s legal work. USM also requests consulting
fees and costs, including those billed by a firm called Economic
Consulting Services. Id. at 2. USM asserts that all fees and
costs listed reflect, “[t]o the extent possible, . . . [those]
incurred addressing legal issues raised by TMI’s” misconduct,
excluding “costs and fees incurred in connection with [USM’s]
surrogate financial ratio issue[,] . . . [and] TMI’s attempt to
amend its complaint.” Id. at 3–4. USM thus requests $216,020.50
in combined attorney, consultant, and paralegal fees, and $1,551.93
Court No. 11-00006 Page 6
in costs.
In response, TMI contends that the court lacks the authority
to tax fees and costs and that USM and Commerce fail to provide
“some linking to an action of TMI that justifies” the awards.
TMI’s Resp. at 7. Specifically, TMI argues that it should not be
responsible for fees and costs associated with: (1) issues TMI
raised in its own complaint, since the court declined to adjudicate
those claims; (2) the proceedings on remand, because TMI “did not
then obstruct or delay the remand finding in any way;” (3) the oral
argument, because TMI did not request the hearing; and (4) claims
USM asserted independently in member case 1:11-cv-00014. Id. at
4–7. Outside of its general request that the court decline to
award all requested fees and costs, TMI does not provide any
calculations to aid the court in adjusting the awards. See id. at
1–8.
ANALYSIS
As a preliminary matter, “an assessment of attorney’s fees is
undoubtedly within a court’s inherent power.” Chambers v. NASCO,
Inc., 501 U.S. 32, 45 (1991) (citing Roadway Express, Inc. v.
Piper, 447 U.S. 752, 765 (1980)). Contrary to TMI’s suggestions
otherwise, see TMI’s Resp. at 4, such authority exists despite
separate mechanisms for imposing sanctions contained in the United
States Code and the Federal Rules of Civil Procedure. Chambers,
501 U.S. at 45–46. “[A] court may assess attorney’s fees when a
Court No. 11-00006 Page 7
party has ‘acted in bad faith, vexatiously, wantonly, or for
oppressive reasons.’” Id. at 45 (quoting Alyeska Pipeline Serv.
Co. v. Wilderness Soc’y, 421 U.S. 240, at 257–58 (1975)); see also
TMI’s Resp. at 4 (selectively quoting Alyeska to imply that the
American Rule always prohibits assessment of attorney’s fees under
the court’s inherent power). The court also retains the discretion
to award costs in appropriate situations. See Former Emps. of Bass
Enters. Prod. Co. v. United States, 13 CIT 372, 374 (1989) (not
reported in the Federal Supplement).
TMI’s repeated efforts — through counsel — to obstruct
Commerce’s exercise of its statutory duties, to delay proceedings
through frivolous argumentation and filings, and to mislead the
court on material matters of fact and law constitute an intolerable
level of vexatiousness and bad faith. See Chambers, 501 U.S. at
45–56. Given TMI’s persistent misconduct before this Court and
before Commerce, an award of fees and costs related to its
problematic filings in this case is warranted and necessary to
deter additional costly distractions in future trade proceedings.
See id.
Turning to the substance of TMI’s response, TMI first argues
that it should not be responsible for fees related to the issues
TMI raised in its complaint because “the court has not ruled on
th[ose] issues.” TMI’s Resp. at 4–6. TMI’s argument is
unpersuasive. USM and Commerce both spent considerable time and
Court No. 11-00006 Page 8
resources attempting to respond to TMI’s frivolous and bad faith
arguments regarding its surrogate financial ratio claim. See
Commerce’s Resp. Pl.’s MJAR at 17–19; USM’s Resp. Pl.’s MJAR at
5–11. Those costs did not disappear when the court deferred
judgment on the financial ratio issue in the interest of judicial
economy.2 Therefore, there is no reason to subtract these fees and
costs from the requested awards.
Second, TMI argues that it should not be taxed the fees and
costs USM incurred on remand because TMI “did not . . . obstruct or
delay the remand finding in any way.” TMI’s Resp. at 5. The court
agrees that fees and costs on remand are not within the ambit of
the previous orders. Even though USM may have spent resources
during the remand proceedings addressing TMI’s vexatious and bad
faith conduct, the court’s intention is to capture only those fees
and costs resulting from the misconduct TMI committed before it.
See Chambers, 501 U.S. at 44–45. The same reasoning applies to
USM’s post-remand fees — as TMI did not file objections until after
USM drafted and filed its remand comments, USM’s post-remand fees
cannot be considered a direct result of TMI’s misconduct before
2
In fact, the court deferred judgment on the claim because
TMI’s previous fraudulent conduct before Commerce required the
court to remand with instructions to consider the application of
full adverse facts available against TMI. Tianjin I, 844 F. Supp.
2d at 1346–48. Granting TMI’s objection would have the perverse
effect of rewarding its behavior below with license to burden the
parties and the court with frivolous arguments on appeal so long as
those arguments become moot after remand. See id. at 1347–48.
Court No. 11-00006 Page 9
this court. Therefore, USM’s award should be limited to those fees
and costs incurred before May 16, 2012.
Third, TMI requests that the court subtract the fees and costs
USM and Commerce incurred in connection with the oral argument
because “TMI was not the party requesting [the] hearing.” TMI’s
Resp. at 7. The court agrees that USM and Commerce did not incur
fees and costs related to the oral argument solely because of TMI’s
misconduct. However, despite the fact that TMI did not request the
hearing, both USM and Commerce did incur preparation and attendance
costs to address TMI’s own frivolous arguments as presented in its
motion for judgment on the agency record and its response to USM’s
motion. Therefore, it is appropriate to assess some portion of the
fees and costs USM and Commerce incurred in January and February
2012 to prepare for and to attend the oral argument.
Commerce applies a 60% pro rata reduction to its fees and
costs related to the oral argument to reflect the portion of time
it estimates that it spent addressing TMI’s submissions. Gerber
Aff. at 1–3. TMI does not specifically object to this
apportionment, and the court sees no reason to alter it. USM, on
the other hand, does not limit its oral argument fees and costs in
a manner that identifies TMI’s problematic motion and response.
Therefore, in the interest of acting “with restraint and
discretion,” Chambers, 501 U.S. at 44–45, the court will reduce
USM’s requested oral argument fees and costs by 60% to connect the
Court No. 11-00006 Page 10
award more directly with TMI’s actions.
Fourth, TMI argues that the court should not award fees and
costs USM incurred in asserting its own adverse facts available
claim because “[f]or that issue[,] TMI was . . . standing with
[Commerce] in support of its final results,” meaning that they “are
not traceable to TMI[’s]” misconduct. TMI’s Resp. at 5. To a
limited extent, this argument is also persuasive. This action is
a consolidation of Court Nos. 11-00006, filed by TMI, and 11-00014,
filed by USM. Had 11-00006 and 11-00014 remained separate, USM
could have filed substantially the same motion for judgment on the
agency record as it did in this consolidated action. See generally
USM’s Mot. J. Agency R. (not addressing issues raised exclusively
in TMI’s submissions to the court). Even though USM incurred these
costs as a direct result of TMI’s fraudulent conduct before
Commerce, it did not expend additional resources drafting this
motion as a result of TMI’s conduct on appeal. Nevertheless, TMI
tainted USM’s adverse facts claim as soon as it filed its response
to USM’s motion for judgment on the agency record, in which TMI
repeatedly misrepresented the facts and controlling law. The fees
and costs USM incurred drafting its reply brief therefore are
connected to TMI’s misconduct before this court. Accordingly, the
court will subtract the fees and costs USM incurred up to and
including the filing and service of its own motion for judgment on
the agency record, namely, those accruing before October 1, 2011.
Court No. 11-00006 Page 11
Lastly, although TMI does not object to the fee rates Commerce
and USM applied in their bills of costs, the court declines to
award fees based on the rates counsel for USM actually billed. See
Mark Indus., Ltd v. Sea Captain’s Choice, Inc., 50 F.3d 730, 733
(9th Cir. 1995) (“[T]he amount of an inherent powers sanction is
meant to do something very different than provide a substantive
remedy to an aggrieved party. An inherent powers sanction is meant
to ‘vindicat[e] judicial authority.’” (quoting Chambers, 501 U.S.
at 55)). Other courts have determined the Laffey Matrix to be a
reasonable manner of assessing attorneys’ fees for complex federal
litigation in the Washington, D.C. area. E.g., Young v. Dist. of
Columbia, 893 F. Supp. 2d 125, 130–32 (D.D.C. 2012); Jefferson v.
Milvets Sys. Tech., Inc., 986 F. supp. 6, 10–11 (D.D.C. 1997).
Thus, consistent with its purpose in assessing fees against TMI,
the court will apply Laffey Matrix rates to USM’s requested hours
so as to most reasonably value the time USM spent addressing TMI’s
vexatious and bad faith conduct before this court.
Again in the interest of “restraint and discretion,” Chambers,
501 U.S. at 44–45, the court will assign each timekeeper to the
rate category with the lowest possible experience level
commensurate with that timekeeper’s title. In other words, the
court will assess associate and “counsel” fees under the 1–3 years’
experience row, and partner fees under the 8–10 years’ experience
row. Furthermore, the court will assess all consultant and project
Court No. 11-00006 Page 12
assistant fees at the paralegal experience row. See Gerber Aff. at
5. Adjusting costs in this manner adequately ties the sanction to
TMI’s conduct without upsetting the purpose of the court’s prior
orders.
CONCLUSION
The court is legally and factually justified in taxing TMI
with fees and costs as a deterrent against future vexatious and bad
faith conduct in trade proceedings. The court will award
Commerce’s requested fees and costs in full because they are both
reasonable and related to TMI’s misconduct in this action. Based
on TMI’s objections and the court’s duty to exercise restraint and
discretion, however, the court will adjust USM’s requested award as
follows: (1) subtract fees and costs incurred before October 1,
2011; (2) subtract fees and costs incurred after May 16, 2012; (3)
reduce fees and costs incurred in January and February 2012 by 60%;
and (4) to the extent practicable, reduce USM’s fee rates to those
listed on the Laffey Matrix. Therefore, as detailed in the tables
below, the court holds TMI and its counsel jointly and severally
liable to Commerce for $8,302.20 in combined fees and costs, and
jointly and severally liable to USM for $34,042.72 in combined fees
and costs.
Court No. 11-00006 Page 13
USM Fees Table
Timekeeper Title Hours Laffey 60% Pro Rata Reduction Amount
Rate (for hours logged (hours times
between Jan. and Feb. rate minus pro
2012) rata reduction)
Denning Counsel 139.3 $240.00 75.7 hours $22,531.20
(-$10,900.80)
Doyle Associate 0.3 $240.00 0.3 hours $28.80
(-$43.20)
Enck Paralegal 0.7 $140.00 n/a $98.00
Jones Partner 1.5 $350.00 n/a $525.00
Lutz Consultant 22.5 $140.00 n/a $3,150.00
McGregor Consultant 0.25 $140.00 n/a (time logged in $35.00
Feb. 2012 unrelated
to oral argument)
Nelson Paralegal 17.0 $140.00 0.8 hours $2,312.80
(-$67.20)
Snead Associate 22.5 $240.00 10.9 hours $3,830.40
(-$1,569.60)
Telep Partner 0.3 $350.00 n/a $105.00
Williams Associate 6.3 $240.00 5.2 hours $763.20
(-$748.80)
Total: $33,379.40
USM Costs Table
Bill Source Dates Amount 60% Pro Rata Reduction Total
Incurred (for costs incurred between
Jan. and Feb. 2012)
King & Spalding Nov. 2011 $43.99 n/a $43.99
King & Spalding Dec. 2011 $59.50 n/a $59.50
King & Spalding Feb. 2012 $720.53 (-$432.32) $288.21
Economic Feb. 2012 $679.04 (-$407.42) $271.62
Consulting
Services
Total: $663.32
Total Amounts Due
Recipient Fees Due Costs Due Total Due
Commerce $8,120.00 $182.20 $8,302.20
USM $33,379.40 $663.32 $34,042.72
Court No. 11-00006 Page 14
ORDER
In accordance with the foregoing, it is hereby
ORDERED that defendant United States is awarded a combined
$8,302.20 in fees and costs; and
ORDERED that defendant-intervenor US Magnesium LLC is awarded
a combined $34,042.72 in fees and costs; and
ORDERED that plaintiff Tianjin Magnesium International Co.,
Ltd. and plaintiff’s counsel, the law firm of Riggle and Craven,
shall be jointly and severally liable to pay both awards in full
within sixty (60) days of the filing of this order.
/s/NICHOLAS TSOUCALAS
Nicholas Tsoucalas
Senior Judge
Dated: April 23, 2013
New York, New York
Tianjin Magnesium International Co. v. United States
Court: United States Court of International Trade
Date filed: 2013-04-23
Citations: 2013 CIT 53, 922 F. Supp. 2d 1345
Copy Citations