Slip Op. 04-162
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: HONORABLE RICHARD W. GOLDBERG, SENIOR JUDGE
U.S. ASSOCIATION OF IMPORTERS
OF TEXTILES AND APPAREL,
Plaintiff,
v.
UNITED STATES, U.S. DEPARTMENT
OF COMMERCE, SECRETARY OF
COMMERCE DONALD EVANS, U.S. PUBLIC VERSION
DEPARTMENT OF STATE, SECRETARY
OF STATE COLIN L. POWELL, U.S.
DEPARTMENT OF THE TREASURY, Court No. 04-00598
SECRETARY OF THE TREASURY JOHN
W. SNOW, OFFICE OF THE U.S.
TRADE REPRESENTATIVE, U.S.
TRADE REPRESENTATIVE ROBERT B.
ZOELLICK, U.S. DEPARTMENT OF
LABOR, SECRETARY OF LABOR
ELAINE L. CHAO, and THE
COMMITTEE FOR THE
IMPLEMENTATION OF TEXTILE
AGREEMENTS,
Defendants.
[Plaintiff’s motion for a preliminary injunction granted.]
Date: December 30, 2004
Brenda Ann Jacobs, David J. Ludlow, and Sharon H. Yuan (Sidley,
Austin, Brown & Wood, LLP) for plaintiff U.S. Association of
Importers of Textiles and Apparel.
Stuart E. Schiffer, Deputy Assistant Attorney General, David M.
Cohen, Director, Jeanne E. Davidson, Deputy Director, and Michael
David Panzera, Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice; John Veroneau and Jason
Kearns, Of Counsel, Office of the U.S. Trade Representative; Anne
Talbot, Linda Chang, and Ada Bosque, Of Counsel, U.S. Department
Court No. 04-00598 Page 2
of Commerce; Howard M. Radzely, Katherine E. Bissell, and Tambra
A. Leonard, Of Counsel, U.S. Department of Labor; William H.
Taft, IV, Of Counsel, U.S. Department of State; Arnold I. Havens
and John G. Murphy, Jr., Of Counsel, U.S. Department of the
Treasury, for defendant United States.
OPINION
Before the Court is a Motion for a Preliminary Injunction
from plaintiff U.S. Association of Importers of Textiles and
Apparel, dated December 1, 2004. Plaintiff requests that the
Court enjoin defendant, during the pendency of this action, from
accepting, considering, or taking any further action on requests
filed under the procedures issued by the Committee for the
Implementation of Textile Agreements (“CITA”) in 68 Fed. Reg.
27787 (May 21, 2003) that are based on the threat of market
disruption upon the elimination of quotas or safeguards on
textile or textile products from the People’s Republic of China
(“China”). Defendant United States opposes the Motion and also
moves to dismiss.1 A hearing was held on Monday, December 20,
2004 concerning plaintiff’s Motion for a Preliminary Injunction.
As conceded by both parties at the hearing and in their briefs,
the Court has subject matter jurisdiction pursuant to 28 U.S.C. §
1581(i)(3).
Background
On January 1, 2005, all quotas on the importation of textile
and apparel products made in World Trade Organization (“WTO”)
1
The Court reserves judgment on defendant’s motion to
dismiss until briefing on the issues raised therein is complete.
Court No. 04-00598 Page 3
member countries will be eliminated, pursuant to the Uruguay
Round Agreements. See Agreement on Textiles and Clothing
(“ATC”), Apr. 15, 1994, Agreement Establishing the World Trade
Organization, Annex 1A; see also 19 U.S.C. § 3511 (codifying
approval of and general provisions relating to the Uruguay Round
Agreements). Although China is entitled to the benefits of the
ATC, under the terms of China’s accession to the WTO, the United
States may impose temporary textile-specific safeguard measures
on Chinese imports of textile and apparel products under certain
circumstances (“textile-specific safeguards”). See Protocol on
the Accession of the People’s Republic of China, § 1.2, WT/L/432
(Nov. 23, 2001); Report of the Working Party on the Accession of
China, paras. 241-42, 342, WT/MIN(01)/3 (Nov. 10, 2001) (together
“China’s Accession Agreement”).
On behalf of defendant, CITA has assumed the administration
of the textile-specific safeguards based on its general authority
to “supervise the implementation of all textile trade
agreements.” Exec. Order 11651, 37 Fed. Reg. 4699 (Mar. 3,
1972), as amended by Exec. Order 11951, 42 Fed. Reg. 1453 (Jan.
6, 1977), as further amended by Exec. Order 12188, 45 Fed. Reg.
989 (Jan. 2, 1980); see also 7 U.S.C. § 1854 (delegating
authority to executive branch to negotiate agreements with
foreign governments limiting the exportation of textiles and
textile products to the United States and to promulgate
Court No. 04-00598 Page 4
regulations to carry out such agreements). CITA is an
interagency committee that includes representatives of the Office
of the U.S. Trade Representative, the U.S. Department of
Commerce, the U.S. Department of Labor, the U.S. Department of
State, and the U.S. Department of the Treasury.
In May 2003, CITA published in the Federal Register a Notice
of Procedures describing the rules that would govern CITA’s
consideration of requests from the public for textile-specific
safeguards on Chinese imports (the “China Textile Safeguard
Regulations”). See Procedures for Considering Requests from the
Public for Textile and Apparel Safeguard Actions on Imports from
China, 68 Fed. Reg. 27787 (May 21, 2003). As a procedural
matter, CITA explained that it had determined that its Notice of
Procedures was not subject to the Administrative Procedure Act
(“APA”) requirements to provide prior notice and opportunity for
public comment, pursuant to 5 U.S.C. § 553(a)(1) (foreign affairs
exception) and 5 U.S.C. § 553(b)(A) (exception for interpretative
rules, general statements of policy, or rules of agency
organization, procedure, or practice). Id. at 27788. CITA
further stated that it believed that any of its actions under the
textile-specific safeguards were not subject to the APA
rulemaking provisions under the foreign affairs exception. Id.
Substantively, in describing the scope of the China Textile
Safeguard Regulations, the Notice of Procedures directed that:
Court No. 04-00598 Page 5
A request [for a textile-specific safeguard] will only
be considered if the request includes the specific
information set forth below in support of a claim that
the Chinese origin textile or apparel product is, due
to market disruption, threatening to impede the orderly
development of trade in like or directly competitive
products.
Id. (emphasis added). Supporting information was specified as:
(A) a product description; (B) import data, which “should
demonstrate that imports of Chinese origin textile and apparel
products . . . are increasing rapidly in absolute terms”; (C)
production data; and (D) market share data. Id. at 27788-89.
Further, the Notice of Procedures specified a three-tier
process for CITA’s consideration of requests under the China
Textile Safeguard Regulations. Id. at 27789. First, upon
receipt of a safeguard request from the public, CITA determines
within 15 days whether the request falls within the scope of the
China Textile Safeguard Regulations. Id. Second, if CITA
determines that a request meets the necessary requirements, CITA
publishes a Notice Seeking Public Comments in the Federal
Register and opens a 30-day public comment period. Id. Third,
within 60 days of the close of the public comment period, CITA
determines whether to impose the safeguard. Id. In case of an
affirmative determination, CITA simultaneously imposes the
safeguard (calculated pursuant to the terms of China’s Accession
Court No. 04-00598 Page 6
Agreement) and initiates negotiations with China “with a view to
easing or avoiding market disruption.” Id. (emphasis added).2
Beginning in July 2003, domestic textile producers filed
four safeguard requests on a variety of textiles, including
Chinese gloves that were still under quota. See 68 Fed. Reg.
49440 (Aug. 18, 2003). In August 2003, CITA agreed to consider
three requests. See id. at 49441, 49445, 49449. However, CITA
rejected consideration of the fourth request concerning Chinese
gloves still under quota. In a letter to the National Textile
Association, CITA’s Chairman indicated that the request was
rejected because CITA would not accept requests for safeguards on
products still under quota. See Plaintiff’s Memorandum of Points
and Authorities in Support of Plaintiff’s Motion for a
Preliminary Injunction (“Pl.’s Br.”) at Ex. 4 (Letter from James
C. Leonard III to National Textile Association of 8/13/03).
However, in June 2004, CITA accepted for consideration a request
for safeguards on several merged categories of Chinese socks,
including cotton socks that were still under quota. Thereafter,
CITA decided to act on the merged request for safeguards because
it determined that “imports of socks from China play a
2
CITA issued a clarification of its rules in August 2003
indicating that it would also maintain an official record for
each safeguard request made pursuant to the China Textile
Safeguard Regulations. See Clarification of Procedures for
Considering Requests from the Public for Textile and Apparel
Safeguard Actions on Imports from the People's Republic of China,
68 Fed. Reg. 49440 (Aug. 18, 2003).
Court No. 04-00598 Page 7
significant role in the existence of and threat of market
disruption.” 69 Fed. Reg. 63371, 63372 (Nov. 1, 2004) (emphasis
added). CITA imposed quotas on the merged categories of Chinese
socks, resulting in a double quota on Chinese cotton socks for
the remainder of 2004, and initiated negotiations with the
Chinese government. Id.
From July to August 2004, CITA and U.S. Department of
Commerce officials made statements to various publications
indicating that the China Textile Safeguard Regulations “were
intended for cases of actual market disruption rather than the
threat of such disruption.” BNA Daily Report for Executives, No.
141, China Textile Safeguards to Focus on Market Disruption
Cases, Official Says, at A-28 (July 23, 2004). Then, in
September 2004, CITA announced that “existing US regulations
would allow safeguards based on threat of a possible surge in
imports, rather than an actual surge.” China Trade Extra,
Aldonas Insists China Textile Regs Can Handle Import Threat Cases
(Sept. 3, 2004). None of these statements were made in the
Federal Register.
Since October 2004, CITA has accepted for consideration 12
requests for safeguards under the China Textile Safeguard
Regulations which allege threat of market disruption (rather than
actual market disruption) by Chinese textile imports (“threat-
based requests”). See 69 Fed. Reg. 64034 (Nov. 3, 2004); 69 Fed.
Court No. 04-00598 Page 8
Reg. 64911 (Nov. 9, 2004); 69 Fed. Reg. 64912 (Nov. 9, 2004); 69
Fed. Reg. 64913 (Nov. 9, 2004); 69 Fed. Reg. 64914 (Nov. 9,
2004); 69 Fed. Reg. 64915 (Nov. 9, 2004); 69 Fed. Reg. 68133
(Nov. 23, 2004); 69 Fed. Reg. 70661 (Dec. 7, 2004); 69 Fed. Reg.
71781 (Dec. 10, 2004); 69 Fed. Reg. 75516 (Dec. 17, 2004); 69
Fed. Reg. 77232 (Dec. 27, 2004); 69 Fed. Reg. 77998 (Dec. 29,
2004). CITA has not yet acted on any of these requests.
Plaintiff commenced this action by filing a complaint on
December 1, 2004. In its complaint, plaintiff alleges that its
members made their business plans for 2005 in reliance on CITA’s
rules and public representations that it would not consider
threat-based requests. However, given CITA’s recent acceptance
of threat-based requests, plaintiff’s members have felt compelled
to reconfigure their sourcing plans for 2005, since they fear
that China will be subject to extremely tight quota restrictions
earlier than they had anticipated. As a result, plaintiff asks
the Court to enjoin CITA from further accepting, considering, or
otherwise proceeding with requests for safeguard measures based
on a threat of market disruption.
Discussion
To prevail on its Motion for a Preliminary Injunction,
plaintiff must show: (1) that it will be immediately and
irreparably injured; (2) that the balance of hardship on all the
parties favors the petitioner; (3) that there is a likelihood of
Court No. 04-00598 Page 9
success on the merits; and (4) that the public interest would be
better served by the relief requested. Zenith Radio Corp. v.
United States, 710 F.2d 806, 809 (Fed. Cir. 1983).
The Court agrees with plaintiff in both its Motion for a
Preliminary Injunction and arguments made at the hearing.
Accordingly, the Court finds that plaintiff is entitled to
injunctive relief.
1. Immediate and Irreparable Injury
To demonstrate immediate and irreparable injury, “plaintiff
must prove that unless the injunction is awarded, some harm will
result to it that cannot be reasonably redressed in a court of
law.” Am. Customs Brokers Co. v. United States Customs Serv., 10
CIT 385, 386, 637 F. Supp. 218, 220 (1986).
Plaintiff alleges that, unless a preliminary injunction is
issued, its members have been and will continue to be irreparably
harmed by CITA’s consideration of threat-based requests under the
China Textile Safeguard Regulations. Pl.’s Br. at 9. Plaintiff
contends that CITA’s consideration of these requests is
unsupported by the text of the China Textile Safeguard
Regulations and represents an impermissible departure from CITA’s
precedent and public statements. Id. at 10. Plaintiff alleges
that its members reasonably relied on CITA’s rules and precedent
with regard to the textile-specific safeguards in designing 2005
business plans. Id. As a result of CITA’s insupportable
Court No. 04-00598 Page 10
actions, plaintiff alleges that its members’ operations have been
and will continue to be disrupted, and its members are being
forced to make sub-optimal business decisions that cannot be
undone or reimbursed if plaintiff ultimately succeeds on the
merits of the case. Id. at 10-11.
The Court finds that several of plaintiff’s irreparable harm
allegations involve pure economic loss, see, e.g., Declaration of
[ ] (“[ ] Decl.”) ¶ 6 (describing the company’s
“substantial economic harm”); Declaration of [ ] (“[
] Decl.”) ¶ 8 (discussing increased shipping costs). As noted
by defendant in its Response in Opposition to Declarations Filed
by USA-ITA in Support of its Motion for a Preliminary Injunction
(“Def.’s Opp’n”) at 19, economic loss alone is insufficient to
justify preliminary injunctive relief. See, e.g., Wis. Gas Co.
v. Fed. Energy Regulatory Comm’n, 758 F.2d 669, 674 (D.C. Cir.
1985). However, the Court also finds that plaintiff has shown
much more than just economic loss. Because of CITA’s mere
acceptance of threat-based requests, plaintiff’s members have
found it prudent to cancel or consider canceling orders in China
and move them to other countries where possible. [ ] Decl. ¶
7; [ ] Decl. ¶¶ 4, 8; Declaration of [ ] (“[
] Decl.”) ¶ 9. However, it has been difficult for plaintiff’s
members to find suitable substitute factories because other
importers are also scrambling to secure alternative production
Court No. 04-00598 Page 11
facilities.3 See [ ] Decl. ¶ 4. This difficulty is
exacerbated by the unrefuted fact that Chinese factories
generally have fewer audit failures, ensure more on-time
deliveries, employ highly skilled workers, and operate as some of
the most efficient production facilities in the world. [ ]
Decl. ¶ 7. By being forced to move production to less efficient
factories in other countries, id. ¶ 11, plaintiff’s members face
the real possibility that they may not be able to deliver
products to their customers in a timely manner, which will impair
their goodwill and business reputation.4 See [ ] Decl. ¶ 9; [
] Decl. ¶ 7. This constitutes irreparable injury. See Zurn
Constructors, Inc. v. B.F. Goodrich Co., 685 F. Supp. 1172, 1181
(D. Kan. 1988) (“Numerous cases support the conclusion that loss
of customers [and] loss of goodwill . . . can constitute
irreparable harm.”); Am. Customs Brokers, 10 CIT at 387, 637 F.
Supp. at 221 (finding irreparable injury where plaintiff
3
Indeed, as discussed more fully infra, for some products
that can be produced only in China, reallocation of production is
a virtual impossibility. [ ] Decl. ¶ 9. This is because some
of plaintiff’s members produce [ ] products that
require [
]. Id. ¶¶ 5, 9.
4
By moving orders to other countries, plaintiff’s members
also risk jeopardizing the longstanding business relationships
they have developed with several of the major garment factories
in China. [ ] Decl. ¶¶ 6, 8; [ ] Decl. ¶¶ 7, 10. These
relationships are of the utmost importance to plaintiff’s
members, [ ] Decl. ¶ 6, and their impairment constitutes
another form of irreparable injury.
Court No. 04-00598 Page 12
demonstrated substantial harm to business goodwill, business
reputation, and a significant loss of new business).
In addition, plaintiff’s members’ inability to stock shelves
in a timely manner will create an unquantifiable ripple effect,
as shortages of merchandise in one category can affect sales in
other categories. [ ] Decl. ¶ 5; [ ] Decl. ¶ 4.
Moreover, because of the slower production and transit times from
countries other than China,5 plaintiff’s members are finding it
necessary to place orders earlier than they normally would. [
] Decl. ¶ 15. This, in turn, inhibits the member companies’
ability to respond to trend-specific demand, thereby creating an
unquantifiable inventory risk. Id.; [ ] Decl. ¶ 7. The slow
production and transit times also mean that plaintiff’s members
will be impeded in reordering and timely delivering high-demand
items. [ ] Decl. ¶ 15. All of this constitutes
irreparable injury as well. See Lois Jeans & Jackets, U.S.A.,
Inc. v. United States, 5 CIT 238, 241-42, 566 F. Supp. 1523,
1526-27 (1983) (finding irreparable injury where plaintiff
demonstrated an inability to fill its customers’ orders, injury
to its reputation as a reliable supplier, potential
unquantifiable costs required for altering its production
5
For example, the transit times from several of the
countries to which plaintiff’s members have moved their
production are typically 25 to 30 days, whereas transit times
from China are as few as 11 days. [ ] Decl. ¶ 14.
Court No. 04-00598 Page 13
methods, and a loss of past and future sales); Am. Air Parcel
Forwarding Co. v. United States, 1 CIT 293, 300, 515 F. Supp. 47,
54 (1981) (finding irreparable injury where plaintiff
demonstrated significant disruption of its business operations).
Finally, plaintiff provided affidavits indicating that China
is the only country from which some of its members are able to
obtain certain goods. [ ] Decl. ¶ 17; [ ] Decl. ¶ 9.
For instance, one of plaintiff’s members is only able to obtain
fine gauge knit sweaters from China. [ ] Decl. ¶ 17.
However, these sweaters are the subject of threat-based requests
that CITA has already accepted for consideration. Id.;
Defendant’s Memorandum in Support of its Motion to Dismiss and
Opposition to Plaintiffs’ Motion for a Preliminary Injunction
(“Def.’s Br.”) at Schedule A. Thus, the member company has been
unable to place its full commitment of orders in China for fear
that a quota may be filled before it receives the sweaters. [
] Decl. ¶ 17. This inability of plaintiff’s members to obtain
certain specialized products from countries other than China
constitutes yet another type of irreparable harm. See Green
Stripe, Inc. v. Berny’s Internacionale, 159 F. Supp. 2d 51, 57
(E.D. Pa. 2001) (finding irreparable harm where defendant’s
violation of an exclusivity clause in a sales contract prevented
plaintiff from being able to sell a unique, perishable product
for which there was no available substitute on the market);
Court No. 04-00598 Page 14
Reuters Ltd. v. United Press Int’l, Inc., 903 F.2d 904, 907-08
(2d Cir. 1990) (finding that termination of the delivery of a
unique product results in irreparable harm that is nearly
impossible to value).
Defendant argues that plaintiff’s assertions of irreparable
injury are purely speculative because it is unknown whether CITA
will actually impose safeguards. Def.’s Br. at 60; Def.’s Opp’n
at 20. The Court disagrees. The irreparable harm suffered by
plaintiff arises directly from CITA’s mere acceptance of threat-
based requests, since such acceptance makes it necessary for
plaintiff’s members to detrimentally alter their 2005 business
plans. Moreover, contrary to defendant’s assertion, Def.’s Opp’n
at 3, this irreparable harm is ongoing because plaintiff’s
members typically place about 30 percent of their orders for the
second half of 2005 by January 2005. Pl.’s Br. at Ex. 1
(Declaration of Laura E. Jones) ¶ 18; see also [ ] Decl. ¶ 3.
Thus, a full 70 percent of plaintiff’s members’ orders for this
period remain in limbo as a result of CITA’s actions. Id.
For all these reasons, the Court finds that plaintiff has
suffered, and will continue to suffer, irreparable injury if the
Court does not enjoin CITA from accepting, considering, or taking
any further action on threat-based requests.
Court No. 04-00598 Page 15
2. Balance of Hardships
Before granting the requested injunctive relief, the Court
must also evaluate the balance of hardships in this case, i.e.,
“determine which party will suffer the greatest adverse effects
as a result of the grant or denial of the preliminary
injunction.” Ugine-Savoie Imphy v. United States, 24 CIT 1246,
1250, 121 F. Supp. 2d 684, 688 (2000).
The balance of hardships favors granting the requested
relief. As discussed above, plaintiff will suffer irreparable
injury if an injunction is not issued enjoining CITA’s
consideration of threat-based requests under the China Textile
Safeguard Regulations. In contrast, defendant will not suffer
any cognizable harm by issuance of the requested injunction.
Contrary to defendant’s contention, Def.’s Br. at 67, defendant
will still be able to effectively administer the textile-specific
safeguards guaranteed by China’s Accession Agreement. For
example, under the China Textile Safeguard Regulations, CITA may
still consider safeguard requests from the public based on actual
market disruption caused by Chinese products. 68 Fed. Reg. at
27789. As conceded by defendant, Def.’s Opp’n at 16, CITA may
also self-initiate such an inquiry. 68 Fed. Reg. at 27789.
Further, since the commencement of this action, CITA has
exercised its authority to deny immediate entry into the United
States of any products (including Chinese products) shipped in
Court No. 04-00598 Page 16
2004, in excess of 2004 quota limits, for importation in January
2005. See Entry of Shipments of Cotton, Wool, Man-Made Fiber,
Silk Blend and Other Vegetable Fiber Textiles and Apparel in
Excess of 2004 Agreement Limits or Certain China Safeguard
Limits, 69 Fed. Reg. 72181, 72181-82 (Dec. 13, 2004). This
measure will certainly enable CITA to limit the volume of Chinese
products entering the United States in early 2005. As such,
defendant has failed to show that the requested injunctive relief
would adversely affect the ability of the United States to
implement the terms of China’s Accession Agreement or protect the
domestic textile industry from a surge of Chinese imports. See
Associated Dry Goods Corp. v. United States, 1 CIT 306, 311, 515
F. Supp. 775, 779-80 (1981) (denying preliminary injunction where
CITA’s ability to conduct foreign policy, implement trade
agreements, and protect domestic industry would be impeded).
Where “‘little if any harm will befall other interested
persons,’” the balance of hardships test favors granting
injunctive relief. Id. at 312, 515 F. Supp. at 780 (quoting
Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d
841, 844 (D.C. Cir. 1977)). However, as argued by defendant,
Def.’s Opp’n at 15, even where the balance of hardships favors
the movant, injunctive relief is nonetheless inappropriate where
it would effectively grant the relief ultimately requested. Id.
at 311, 515 F. Supp. at 780 (citing Selchow & Righter Co. v. W.
Court No. 04-00598 Page 17
Printing & Lithographic Co., 112 F.2d 430, 431 (7th Cir. 1940))
(denying preliminary injunction against imposition of quotas by
CITA in part because interlocutory injunction would achieve
ultimate relief sought). The rationale for this rule is that
“[a] court should not grant temporary relief in the form of a
preliminary injunction which will dispose of the case on the
merits.” Manhattan Shirt Co. v. United States, 2 CIT 270, 274
(1981) (denying preliminary injunction against enforcement of
CITA-embargoed merchandise in part because injunction would
dispose of the case on the merits). Here, the scope of
plaintiff’s complaint clearly exceeds that of the requested
preliminary injunction. In its complaint, plaintiff has raised
an important question as to whether CITA’s delegated authority to
administer textile agreements includes the authority to issue
regulations pursuant to China’s Accession Agreement. Whether a
WTO accession agreement is a “textile agreement” within the
meaning of 7 U.S.C. § 1854 is a question of first impression. If
plaintiff is fully successful on the merits of the case, CITA’s
China Textile Safeguard Regulations will be invalidated in toto.
Such an order would far exceed the more limited scope of the
requested preliminary injunction. As such, the balance of the
hardships tips in favor of granting preliminary injunctive
relief.
Court No. 04-00598 Page 18
3. Likelihood of Success on the Merits
The Court must also consider whether plaintiff has
demonstrated a likelihood of success on the merits of its case
before a preliminary injunction may be issued. Sanho
Collections, Ltd. v. Chasen, 1 CIT 6, 12, 505 F. Supp. 204, 208
(1980). To satisfy this requirement, it is ordinarily sufficient
for the party requesting the preliminary injunction to raise
“‘serious, substantial, difficult and doubtful’ questions that
are the proper subject of litigation” where it is clear that “the
moving party will suffer substantially greater harm by the denial
of the preliminary injunction than the non-moving party would by
its grant.” Ugine-Savoie Imphy, 24 CIT at 1251, 121 F. Supp. 2d
at 689 (quoting PPG Indus., Inc. v. United States, 11 CIT 5, 8
(1987)).
In this case, plaintiff has raised sufficiently serious and
difficult questions regarding the propriety of CITA’s actions to
warrant issuance of the preliminary injunction. Specifically,
plaintiff’s complaint alleges that CITA’s acceptance of threat-
based requests violates its own regulations and the APA. This
allegation raises questions as to the applicability of APA
rulemaking procedures to CITA’s consideration of public requests
for safeguards made pursuant to CITA’s own published regulations.
This important issue was not addressed by the Court’s opinion in
Mast Industries, Inc. v. Regan, 8 CIT 214, 596 F. Supp. 1567
Court No. 04-00598 Page 19
(1984) (finding APA rulemaking procedures inapplicable to
regulations that define or alter quantitative limitations imposed
pursuant to a bilateral trade agreement or unilateral action).
In addition, plaintiff’s complaint alleges that CITA has exceeded
its delegated authority by assuming administration of the
textile-specific safeguards without a clear Congressional mandate
to do so. CITA’s ability to administer the terms of a WTO
accession agreement is a novel question – both as a matter of
first impression and in light of express Congressional action to
delegate the administration of other aspects of China’s Accession
Agreement to the International Trade Commission. See 19 U.S.C. §
2451. Given the seriousness of these questions presented, a
preliminary injunction is justified in this case.
4. Public Interest
Finally, “[a]ssuming plaintiff has overcome the burden of
showing the probability of irreparable harm and the likelihood of
success on the merits, or alternatively, that the parties have
presented serious questions of law and that the balance of the
hardships tips in favor of the plaintiff, the court must still
protect the public interest.” Associated Dry Goods Corp., 1 CIT
at 311, 515 F. Supp. at 779.
In this case, the public interest would be served by
granting the requested relief. It is clearly in the public
interest that the trade laws be properly administered. PPG
Court No. 04-00598 Page 20
Indus., Inc. v. United States, 14 CIT 18, 22-23, 729 F. Supp.
859, 863 (1990) (finding preliminary injunction against
liquidation of entries ordered by the International Trade
Administration appropriate to ensure fair interpretation of trade
laws). Plaintiff, as the representative of multiple interested
parties, has the right to participate in the judicial review
process to challenge serious perceived errors in CITA’s
administration of those laws. See Ceramica Regiomontana, S.A. v.
United States, 7 CIT 390, 397, 590 F. Supp. 1260, 1265 (1984)
(granting preliminary injunction where plaintiff raised serious
concerns about the International Trade Administration’s
methodology and findings affecting the public interest). Here,
plaintiff has raised substantial questions bearing upon the
propriety of CITA’s actions when considering requests for
textile-specific safeguards from the general public. An
injunction will “preserve plaintiff's rights until the merits and
the issue of compliance with the law are fully considered. It
will provide interim relief until those doubts that have been
raised are eliminated.” PPG Indus., 11 CIT at 10 (finding
preliminary injunction against liquidation of entries ordered by
the International Trade Administration to be in public interest).
Moreover, although there is a “valid public interest in a policy
of quantitative import restrictions on textile products[,]”
Sanho, 1 CIT at 12, 505 F. Supp. at 208, injunctive relief in
Court No. 04-00598 Page 21
this case will not impede CITA’s ability to impose textile-
specific safeguards. Accordingly, the public interest will be
served by issuance of the requested injunction.
For the foregoing reasons, the Court grants plaintiff’s
Motion for a Preliminary Injunction. A separate order will be
issued accordingly.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: December 30, 2004
New York, New York