Fuwei Films (Shandong) Co., Ltd. v. United States

Slip Op 11-114
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Leo M. Gordon, Judge
Consol. Court No. 11-00061
MEMORANDUM and ORDER
[Motion to amend complaint denied.]
Dated: September 8, 2011
Riggle and Craven (David J. Craven and David A. Riggle) for Plaintiff Fuwei Films
(Shandong) Co., Ltd.
Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Franklin
E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice (David F. D’Alessandris); and Office of the Chief Counsel for
Import Administration, U.S. Department of Commerce (Whitney Rolig), of counsel, for
Defendant United States for Defendant United States.
Wilmer, Cutler, Pickering, Hale & Dorr LLP (Patrick J. McLain, David Moses
Horn, and Ronald I. Meltzer) for Defendant-Intervenors’ DuPont Teijin Films, Mitsubishi
Polyester Film, Inc., and SKC, Inc.
Gordon, Judge: Before the court is a motion by Plaintiff, Fuwei Films (Shandong)
Co., Ltd. (“Fuwei”), to amend its complaint to add an additional claim challenging
Commerce’s zeroing methodology within administrative reviews, a request that Fuwei
explains is motivated by two recent Federal Circuit decisions addressing Commerce’s
FUWEI FILMS (SHANGDONG) CO.,
Plaintiff,
v.
UNITED STATES,
Defendant.
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zeroing methodology, Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir.
2011) and JTEKT Corp. v. United States, 642 F.3d 1378, 1383-84 (Fed. Cir. 2011).
USCIT Rule 15(a) provides that “a party may amend the party’s own pleading
only by leave of court or by written consent of the adverse party; and leave shall be
freely given when justice so requires.” USCIT R. 15(a). It is within the court’s discretion
to 	determine 	whether 	to 	grant 	leave 	to 	amend. 	Former 	Employees 	of 	Quality
Fabricating, Inc. v. United States, 28 CIT 1061, 1065, 353 F. Supp. 2d 1284, 1288-89
(2004). “In the absence of any apparent or declared reason-such as undue delay, bad
faith or dilatory motive on the part of the movant, . . . the leave sought should, as the
rules require, be ‘freely given.’” Foman v. Davis, 371 U.S. 178, 182 (1962).
The 	issue 	presented 	by 	Fuwei’s 	motion, 	however, 	is 	less 	about 	the
appropriateness of an amended complaint, and more about the issue of exhaustion of
administrative remedies. 	Fuwei acknowledges that it did not challenge Commerce’s
zeroing 	methodology 	during 	the 	administrative 	proceeding. 	When 	reviewing
Commerce's antidumping determinations, the U.S. Court of International Trade requires
litigants to exhaust administrative remedies “where appropriate.” 	28 U.S.C. § 2637(d)
(2006). 	“This form of non-jurisdictional exhaustion is generally appropriate in the
antidumping 	context 	because 	it 	allows 	the 	agency 	to 	apply 	its 	expertise, 	rectify
administrative mistakes, and compile a record adequate for judicial review-advancing
the twin purposes of protecting administrative agency authority and promoting judicial
efficiency.” 	Carpenter Tech. Corp. v. United States, 30 CIT 1373, 1374-75, 452 F.
Supp. 2d 1344, 1346 (2006) (citing Woodford v. Ngo, 548 U.S. 81, 88-90 (2006)). 	The
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court “generally takes a ‘strict view’ of the requirement that parties exhaust their
administrative remedies before the Department of Commerce in trade cases.” 	Corus
Staal BV v. United States, 502 F.3d 1370, 1379 (Fed. Cir. 2007).
An important corollary requirement to exhaustion of administrative remedies is
Commerce’s 	own 	regulatory 	requirement 	that 	parties 	raise 	all 	issues 	within 	their
administrative case briefs. 	19 C.F.R. § 351.309(c)(2) (2010) (“The case brief must
present all arguments that continue in the submitter’s view to be relevant to the final
determination.”); Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1383
(Fed. 	Cir. 	2008) 	(parties 	are 	“procedurally 	required 	to 	raise 	the{ir} 	issue 	before
Commerce at the time Commerce {is} addressing the issue”); see also 19 U.S.C. §
1677f(i)(3)(A) (2006) (“the administering authority shall include . . . an explanation of the
basis for its determination that addresses relevant arguments, made by interested
parties”). 	This requirement works in tandem with the exhaustion requirement and
promotes the same twin purposes of protecting administrative agency authority and
promoting judicial efficiency.
As noted, Plaintiff concedes that it 	did not raise the zeroing issue before
Commerce. 	Plaintiff nevertheless argues that at least one of two exceptions to the
exhaustion requirement applies. 	Plaintiff posits that the zeroing issue involves a “pure
question of law.” 	That exception, however, only might apply for a clear statutory
mandate that does not implicate Commerce’s interpretation of the statute under the
second step of Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837,
842-45 (1984). 	See, e.g., Agro Dutch Indus. Ltd. v. United States, 508 F.3d 1024,
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1032 (Fed. Cir. 2007) (applying pure question of law exception to Chevron step 1
issue). 	Even when the statute is clear, however, it is always preferable to have the
agency’s interpretation of the statute it is entrusted to administer set forth on the
administrative record. See 2 Richard J. Pierce, Jr., ADMINISTRATIVE LAW T REATISE § 14.3
(5th ed. 2010) (describing the primary jurisdiction doctrine and its relationship to
Chevron); see also Agro Dutch, 508 F.3d at 1029 n.4 (noting that Commerce had
opportunity to, and did, put forth its interpretation on administrative record in two
instances). 	In this case the statute does not speak to the precise question of zeroing,
but instead requires some interpretation to fill this statutory gap. The court cannot on its
own resolve the issue. 	It is a Chevron step 2 issue; it requires the input of Commerce.
To address the problem, the court would first have to remand the issue to Commerce,
an inefficiency occasioned solely by Plaintiff’s inaction. 	The pure question of law
exception, 	therefore, 	cannot 	apply 	in 	this 	instance 	because 	its 	application 	would
undermine the very purposes the exhaustion requirement is designed to promote.
Fuwei also argues that the futility exception should apply. 	Fuwei, though, ignores
Commerce’s 	regulatory 	requirement 	that 	parties 	raise 	all 	issues 	within 	their
administrative case briefs. 	19 C.F.R. § 351.309(c)(2). 	That provision carries the force
of law and the court cannot simply ignore it. 	“The mere fact that an adverse decision
may have been likely does not excuse a party from satisfying statutory or regulatory
requirements to exhaust administrative remedies.” 	Tianjin Magnesium Int’l Co. v.
United States, 34 CIT ____, ____, 722 F. Supp. 2d 1322, 1330 (2010) (citing Commc’ns
Workers of Am. v. Am. Tel. & Tel. Co., 40 F.3d 426, 433 (D.C. Cir. 1994)). Fuwei could
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have raised its arguments about potential unreasonable inconsistencies in Commerce’s
zeroing practice in its administrative case brief. 	There was nothing preventing Fuwei
from asserting its rights at the administrative level.
Consider, for example, the plaintiff in Dongbu. 	Commerce introduced its zeroing
methodology change after the time for the submission for case briefs had passed.
Plaintiff nevertheless submitted a letter challenging Commerce’s zeroing practice as an
unreasonable interpretation of the dumping statute. 	Had Fuwei asserted its rights with
equal vigor (as the regulations, and statute require), it would have created a record
suitable for judicial review. 	Some form of perceived administrative obstinacy is no
excuse. 	In fact, any intransigence on the agency’s part would only aid the litigant in
demonstrating to the court the unreasonableness of the agency’s position.
Unfortunately, Fuwei’s failure to challenge zeroing before Commerce has left the
court without a record to review on this issue. 	The court is therefore not inclined to
excuse the requirement that Fuwei have exhausted its administrative remedies in this
instance.
Accordingly, it is hereby
ORDERED that Plaintiff’s motion for leave to amend its complaint is denied.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: 	September 8, 2011
New York, New York
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