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Capella Sales & Services Ltd. v. United States

United States Court of Appeals, Federal Circuit

January 4, 2018

CAPELLA SALES & SERVICES LTD., Plaintiff-Appellant

         Appeals from the United States Court of International Trade in Nos. 1:14-cv-00304-DCP, 1:15-cv-00318-DCP, Judge Donald C. Pogue.

          IRENE HUEI-MIN CHEN, Chen Law Group LLC, Rockville, MD, argued for plaintiff-appellant.

          AIMEE LEE, International Trade Field Office, Appellate Section, International Trade Litigation, United States Department of Justice, New York, NY, argued for defendant-appellee United States. Also represented by CHAD A. READLER, JEANNE E. DAVIDSON, REGINALD T. BLADES, JR.; JAMES HENRY AHRENS, II, Office of the Chief Counsel for Trade Enforcement & Compliance, United States Department of Commerce, Washington, DC.

          ALAN H. PRICE, Wiley Rein, LLP, Washington, DC, for defendant-appellee Aluminum Extrusions Fair Trade Committee. Also represented by ROBERT E. DEFRANCESCO, III, LAURA EL-SABAAWI, DERICK HOLT.

          Before Lourie, O'Malley, and Chen, Circuit Judges.


         Capella Sales & Services Ltd. ("Capella") appeals from the decisions of the United States Court of International Trade (the "Trade Court"), dismissing Capella's two separate complaints under USCIT Rule 12(b)(6). Capella Sales & Servs. Ltd. v. United States, 180 F.Supp.3d 1293, 1303-04 (Ct. Int'l Trade 2016) ("Decision I"); Capella Sales & Servs. Ltd. v. United States, 181 F.Supp.3d 1255, 1263-64 (Ct. Int'l Trade 2016) ("Decision II"). Because the Trade Court did not err in dismissing Capella's complaints, we affirm.


         The United States Department of Commerce ("Commerce" or "the Secretary") has authority, in certain situations, to impose countervailing duties ("CVDs") on imported goods if it "determines that the government of a country . . . is providing, directly or indirectly, a countervailable subsidy with respect to" an imported good. 19 U.S.C. § 1671(a)(1) (2012). Capella challenges here the assessed CVD rate of 374.15% on four entries of aluminum extrusions that Capella imported into the United States from the People's Republic of China ("PRC"), arguing that it is entitled to a lower rate obtained by several other importers after they successfully challenged the 374.15% rate at the Trade Court in a separate case.

         In determining whether and at what rates to assess CVDs, Commerce may initiate an investigation. Id. § 1671a(a). Within a fixed time period following initiation of an investigation, Commerce "shall make a final determination of whether or not a countervailable subsidy is being provided with respect to the subject merchandise." Id. § 1671d(a)(1). If Commerce identifies such a countervailable subsidy, then it shall determine either "an estimated individual [CVD] rate for each exporter and producer individually investigated, " or, if permitted by § 1671d(c)(5), "an estimated all-others rate for all exporters and producers not individually investigated." Id. § 1671d(c)(1)(B)(i). If Commerce calculates an all-others rate, Commerce must then order the "posting of a cash deposit, bond, or other security . . . for each entry of the subject merchandise" at that rate. Id. § 1671d(c)(1)(B)(ii). This rate is referred to as the cash deposit rate.

         After the posting of the cash deposit or bond at the cash deposit rate, entries are "liquidated, " subject to certain limitations. See 19 U.S.C. § 1504. Liquidation is "the final computation or ascertainment of duties on entries." 19 C.F.R. § 159.1 (2017). The general rule is that "entries of merchandise . . . covered by a determination of the Secretary . . . shall be liquidated in accordance with the determination of the Secretary." 19 U.S.C. § 1516a(c)(1).

         However, the statute contemplates several situations in which subject entries might not be liquidated at the cash deposit rate calculated in the final determination. First, if an affected party challenges a final determination by Commerce covering its entries in court, and the court enjoins liquidation of the entries at Commerce's determined rate, then those entries are instead "liquidated in accordance with the final court decision in the action, " which could result in a revised cash deposit rate. Id. § 1516a(e). Second, subject entries not enjoined by the court must still be liquidated according to the final court decision if the entries are made "after the date of publication in the Federal Register . . . of a notice of the court decision." Id. § 1516a(e)(1). Such a notice is called a "Timken notice, " referring to Timken Co. v. United States, 893 F.2d 337, 341 (Fed. Cir. 1990). Commerce may also initiate administrative review of entries "if a request for such review has been received, " 19 U.S.C. § 1675(a)(1), and then calculate a new rate that forms "the basis for the assessment of [CVDs] . . . and for deposits of estimated duties, " id. § 1675(a)(2)(C).

         Commerce initiated a CVD investigation of imports of certain aluminum extrusions from the PRC in 2010. As a result of the investigation, Commerce published a final determination setting the all-others rate on entries of aluminum extrusions from the PRC at 374.15%, see Aluminum Extrusions from the [PRC]: Final Affirmative Countervailing Duty Determination, 76 Fed. Reg. 18, 521, 18, 522 (Apr. 4, 2011) (the "final determination"), and issued a CVD order on May 26, 2011, directing United States Customs and Border Protection ("CBP") to assess CVDs on subject merchandise as calculated in the final determination, see Aluminum Extrusions from the [PRC]: Countervailing Duty Order, 76 Fed. Reg. 30, 653, 30, 655 (May 26, 2011). Capella imported its four entries of subject aluminum extrusions from the PRC between November 2011 and June 2012.

         Meanwhile, several other aluminum importers challenged Commerce's final determination at the Trade Court, resulting in the MacLean-Fogg litigation. The MacLean-Fogg litigation resulted in court decisions holding the 374.15% all-others rate unlawful, MacLean-Fogg Co. v. United States, 853 F.Supp.2d 1336, 1342-43 (Ct. Int'l Trade 2012), and affirming a lower rate determined by Commerce, MacLean-Fogg Co. v. United States, 885 F.Supp.2d 1337, 1342-43 (Ct. Int'l Trade 2012). Commerce published a Timken notice, effective December 10, 2012, notifying the public that the latter MacLean-Fogg decision was "not in harmony with" Commerce's final determination. Aluminum Extrusions from the [PRC]: Notice of Court Decision Not in Harmony With Final Determination, 77 Fed. Reg. 74, 466, 74, 466-67 (Dec. 14, 2012) (the "Timken notice"). Ultimately, the MacLean-Fogg litigation ...

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