Papierfabrik August Koehler SE v. United States

Slip Op. 14-89
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
PAPIERFABRIK AUGUST KOEHLER SE, :
:
Plaintiff, 	:
: 	Before: Nicholas Tsoucalas,
v. 	: 	Senior Judge
:
UNITED STATES, 	: 	Court No.: 13-00163
:
Defendant, 	:
:
and 	:
:
APPLETON PAPERS INC., 	:
:
Defendant-Intervenor. :
OPINION and ORDER
[Defendant-intervenor’s motions to strike are denied.]
Dated: July 28, 2014
F. Amanda DeBusk, Matthew R. Nicely, John F. Wood, Eric S. Parnes,
Lynn G. Kamarck, and Alexandra B. Hess, Hughes Hubbard & Reed LLP,
of Washington, DC, for plaintiff.
Joshua 	E. 	Kurland, 	Trial 	Attorney, 	Commercial 	Litigation 	Branch,
Civil Division, U.S. Department of Justice, of Washington, DC, for
defendant. 	With him on the brief were Stuart F. Delery, Assistant
Attorney 	General, 	Jeanne 	E. 	Davidson, 	Director, 	and 	Reginald 	T.
Blades, 	Jr., 	Assistant 	Director. 	Of 	counsel 	on 	the 	brief 	was
Jessica M. Forton, Attorney, Office of the Chief Counsel for Trade
Enforcement 	and 	Compliance, 	U.S. 	Department 	of 	Commerce, 	of
Washington, DC.
Daniel L. Schneiderman and Gilbert B. Kaplan, King & Spalding LLP,
of Washington, DC, for defendant-intervenor.
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Court No. 13-00163 	Page 2
Tsoucalas, 	Senior 	Judge: 	Before 	the 	court 	are 	two
motions 	to 	strike 	filed 	by 	defendant-intervenor 	Appvion, 	Inc. 1
(“Appvion”). 	Appvion moves pursuant to USCIT Rule 12(f) to strike
certain information in plaintiff Papierfabrik August Koehler SE’s
(“Koehler”) 	reply 	brief 	and 	to 	strike 	the 	Notice 	of 	Supplemental
Authority Koehler filed on July 2, 2014, arguing that the contested
information in both documents was not on the administrative record
before defendant United States Department of Commerce (“Commerce”)
during 	the 	third 	administrative 	review 	(“AR3”) 	of 	lightweight
thermal 	paper 	(“LWTP”) 	from 	Germany. 2 	See 	Def.-Int.’s 	Mot. 	to
Strike Information in Pl.’s Reply Br., ECF No. 106 (June 24, 2014)
(“First Motion to Strike”); Def.-Int.’s Mot. to Strike Pl.’s Notice
of Supplemental Auth., ECF No. 111 (July 7, 2014) (“Second Motion
to 	Strike”). 	Commerce 	supports 	Appvion’s 	motions. 	See 	Def.’s
Consolidated 	Resp. 	to 	Appvion’s 	Mot. 	to 	Strike 	and 	to 	Koehler’s
Notices of Supplemental Auth., ECF No. 114 at 1–2 (July 10, 2014).
Koehler opposes both of Appvion’s motions to strike. 	See Resp. to
Def.-Int.’s Mot. to Strike Information in Pl.’s Reply Br., ECF No.
108 at 1 (July 2, 2014); Resp. to Def.-Int.’s Mot. to Strike Pl.’s
Notice of Supplemental Auth., ECF No. 112 at 1–2 (July 9, 2014).
1 	In 	May 	2013, 	Appleton 	Papers 	Inc. 	changed 	its 	name 	to 	Appvion,
Inc. 	See Letter to Clerk of the Court, ECF No. 25 (June 21, 2013).
2 	Koehler 	initiated 	the 	underlying 	case, 	Court 	No. 	13-163, 	to
contest 	Commerce’s 	determination 	in 	AR3. 	See 	Complaint, 	ECF 	No.
6 (Apr. 24, 2013).
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Appvion’s First Motion to Strike concerns Koehler’s use
in its reply brief of home market sales data that Commerce rejected
as 	untimely 	during 	AR3 	to 	estimate 	its 	dumping 	margin. 3 	ECF 	No.
106 	at 	1. 	In 	the 	reply 	brief, 	Koehler 	argued 	that 	the 	adverse
facts 	available 	(“AFA”) 	rate 	Commerce 	selected 	was 	punitive 	and
supported 	its 	claim 	by 	comparing 	the 	AFA 	rate 	to 	the 	margin 	it
estimated using the rejected sales data. 	See Pl.’s Reply Br., ECF
No. 100 at 32–33 (June 13, 2014). 	Appvion insists that the court
must strike this information because Koehler “well knows” that the
home 	market 	data 	was 	not 	on 	the 	record 	of 	AR3 	and, 	therefore,
Koehler’s repeated use of this information “can only be viewed as
an 	effort 	to 	confuse 	or 	mislead 	the 	[c]ourt.” 	ECF 	No. 	106 	at 	1,
2. 	Koehler 	responds 	that 	its 	reliance 	on 	this 	information 	was
proper because it presented the home market sales data to Commerce
and 	Commerce 	retained 	that 	information 	on 	the 	record, 	despite
rejecting it as untimely. 	ECF No. 108 at 2.
Appvion’s 	Second 	Motion 	to 	Strike 	concerns 	Koehler’s
submission 	to 	the 	Court 	of 	the 	remand 	results 	of 	the 	second
administrative 	review 	of 	LWTP 	from 	Germany 	(“AR2 	Remand”) 	as
3 	Commerce 	rejected 	the 	home 	market 	sales 	data 	as 	untimely, 	but
retained 	it 	on 	the 	record 	in 	accordance 	with 	19 	C.F.R. 	§
351.104(a)(2). 	See 	Rejection 	of 	Factual 	Information 	Submission
Filed 	by 	Koehler 	at 	1–2 	(July 	5, 	2012). 	Section 	351.104(a)(2)
provides that, in certain situations, Commerce will retain a copy
of 	a 	rejected 	document 	on 	the 	record 	“solely 	for 	purposes 	of
establishing 	and 	documenting 	the 	basis 	for 	rejecting 	the
document.” 	19 C.F.R. § 351.104(a)(2)(ii).
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supplemental authority. 	ECF No. 111 at 1. 	Koehler submitted AR2
Remand 	because 	Commerce 	found 	that 	all 	of 	Koehler’s 	data 	on 	the
record 	of 	the 	second 	administrative 	review 	was 	unreliable 	and
applied total AFA. 	See Notice of Supplemental Auth., ECF No. 109
at 1 (July 2, 2014). 	According to Koehler, AR2 Remand undermines
Commerce’s 	use 	of 	transaction-specific 	dumping 	margins 	from 	the
second 	administrative 	review 	to 	corroborate 	the 	AFA 	rate 	in 	AR3.
Id. 	at 	2. 	Appvion 	argues 	that 	striking 	this 	submission 	is
appropriate because Koehler introduces a new legal theory and new
information that was not on the record for AR3. 	ECF No. 111 at 2–
3. 	Koehler 	insists 	that 	the 	court 	should 	accept 	AR2 	Remand 	as
supplemental 	authority 	because 	it 	supports 	its 	argument 	that
Commerce 	insufficiently 	corroborated 	the 	AFA 	rate 	and 	because
courts 	have 	taken 	judicial 	notice 	of 	subsequent 	agency 	decisions
in the past. 	See ECF No. 112 at 2–4.
“[M]otions 	to 	strike 	are 	generally 	disfavored 	or
extraordinary 	remedies.” 	Hynix 	Semiconductor, 	Inc. 	v. 	United
States, 	27 	CIT 	1469, 	1470 	(2003) 	(internal 	quotation 	marks
omitted). 	“Nevertheless, 	this 	Court 	has 	broad 	discretion 	in
evaluating motions to strike . . . .” 	Id. 	The Court should grant
motions 	to 	strike 	“only 	in 	cases 	where 	there 	has 	been 	a 	flagrant
disregard 	of 	the 	rules 	of 	court[,]” 	and 	should 	deny 	motions 	to
strike 	“unless 	the 	brief 	demonstrates 	a 	lack 	of 	good 	faith, 	or
that the [C]ourt would be prejudiced or misled by the inclusion in
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Court No. 13-00163 	Page 5
the brief of the improper material.” 	Fla. Tomato Exch. v. United
States, 38 CIT __, __, 973 F. Supp. 2d 1334, 1338 (2014) (internal
citations omitted).
The court finds that it is unnecessary to strike either
the portions of Koehler’s reply brief relying on the rejected home
market 	sales 	data 	or 	the 	Notice 	of 	Supplemental 	Authority. 	As
noted above, motions to strike are “disfavored” remedies. 	Hynix,
27 	CIT 	at 	1470. 	Despite 	Appvion’s 	claims 	that 	Koehler 	included
the 	contested 	information 	to 	confuse 	or 	mislead 	the 	court, 	its
sole 	argument 	appears 	to 	be 	that 	the 	court 	cannot 	consider 	this
information 	because 	it 	was 	not 	on 	the 	record 	of 	AR3. 	This 	Court
has held, however, that “there is no occasion for a party to move
to 	strike 	portions 	of 	an 	opponent’s 	brief 	(unless 	they 	be
scandalous 	or 	defamatory) 	merely 	because 	he 	thinks 	they 	contain
material 	that 	is 	incorrect, 	inappropriate, 	or 	not 	a 	part 	of 	the
record.” 	Hynix, 	27 	CIT 	at 	1470 	(quoting 	Acciai 	Speciali 	Terni
S.P.A. v. United States, 24 CIT 1211, 1217, 120 F. Supp. 2d 1101,
1106 (2000)). 	Rather, “[t]he proper method of raising those issues
is 	by 	so 	arguing, 	either 	in 	the 	brief 	or 	in 	a 	supplemental
memorandum, 	but 	not 	by 	filing 	a 	motion 	to 	strike.” 	Id. 	(quoting
Acciai 	Speciali, 	24 	CIT 	at 	1217, 	120 	F. 	Supp. 	2d 	at 	1106). 	The
court can address the issues on the merits as part of its decision
on Koehler’s motion for judgment on the agency record.
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Ultimately, 	Appvion’s 	conclusory 	statements 	that
Koehler’s 	reliance 	on 	the 	contested 	information 	demonstrates 	bad
faith, a flagrant disregard for the rules of court, or an attempt
to 	mislead 	the 	court 	are 	insufficient 	to 	warrant 	striking 	that
information. 	See Fla. Tomato Exch., 38 CIT at __, 973 F. Supp. 2d
at 	1338. 	Appvion 	had 	less 	extreme 	means 	by 	which 	to 	contest
Koehler’s reliance on the information at issue. 	See Hynix, 27 CIT
at 1470. 	Accordingly, Appvion’s motions to strike are denied.
ORDER
Upon 	consideration 	of 	Defendant-Intervenor’s 	Motion 	to
Strike 	information 	in 	Plaintiff’s 	Reply 	Brief 	(ECF 	No. 	106) 	and
Defendant-Intervenor’s 	Motion 	to 	Strike 	Plaintiff’s 	Notice 	of
Supplemental 	Authority 	(ECF 	No. 	111), 	the 	responses 	to 	those
motions, and the papers and proceedings herein, it is hereby
ORDERED 	that 	Defendant-Intervenor’s 	Motion 	to 	Strike
Information 	in 	Plaintiff’s 	Reply 	Brief 	(ECF 	No. 	106) 	is 	DENIED;
and it is further
ORDERED 	that 	Defendant-Intervenor’s 	Motion 	to 	Strike
Plaintiff’s 	Notice 	of 	Supplemental 	Authority 	(ECF 	No. 	111) 	is
DENIED.
SO ORDERED.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: July 28, 2014
New York, New York
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