Transpacific Steel LLC v. United States et al

Slip Op. 20-136
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Claire R. Kelly, Gary S.
Katzmann, and Jane A. Restani,
Judges
Court No. 19-00009
MEMORANDUM AND ORDER
[Denying Defendants’ motion to stay enforcement of the court’s judgment. 	Denying
Plaintiff and Plaintiff-Intervenors’ motion to enforce the court’s judgment.]
Dated: September 15, 2020
Matthew M. Nolan, Nancy A. Noonan, Russell A. Semmel, Diana Dimitriuc-Quaia,
Jason Rotstein, Leah Scarpelli, and Aman Kakar, Arent Fox LLP, of Washington,
DC, for plaintiff Transpacific Steel LLC.
Julie C. Mendoza, Brady W. Mills, Donald B. Cameron, Edward J. Thomas, Mary S.
Hodgins, and Rudi W. Planert, Morris, Manning, & Martin, LLP, of Washington, DC,
for plaintiff-intervenor Borusan Mannesmann Boru Sanayi ve Ticaret A.S., et. al.
Lewis E. Leibowitz, The Law Office of Lewis E. Leibowitz, of Washington, DC, for
plaintiff-intervenor The Jordan International Company.
Tara K. Hogan, Assistant Director, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, and Meen Geu Oh, Trial Attorney,
TRANSPACIFIC STEEL LLC,
Plaintiff,
and
BORUSAN MANNESMANN BORU
6$1$<,9(7,&$5(7$ûET AL.,
Plaintiff-Intervenors,
v.
UNITED STATES ET AL.,
Defendants.
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Commercial 	Litigation 	Branch, 	Civil 	Division, 	U.S. 	Department 	of 	Justice, 	of
Washington, DC, for defendants. 	Also on the briefs were Stephen C. Tosini, Senior
Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, of Washington, DC, Ethan P. Davis, Acting Assistant Attorney General,
Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Aimee Lee, Assistant Director.
Kelly, Judge: Defendants move for a stay of enforcement of the court’s
judgment in Transpacific Steel LLC v. United States pending appeal to the Court of
Appeals for the Federal Circuit (“Court of Appeals”). 	See Mot. for a Stay of
Enforcement Pending Appeal, Aug. 13, 2020, ECF No. 68 (“Defs.’ Mot.”); Transpacific
Steel LLC v. United States, 44 CIT __, Slip Op. 20-98 (July 14, 2020) (“Transpacific
II”); Notice of Appeal, Aug. 13, 2020, ECF No. 67 (“Notice of Appeal”); see also
Judgment, July 14, 2020, ECF No. 66 (“Judgment”). Plaintiff Transpacific Steel LLC
(“Transpacific”), as well as Plaintiff-Intervenors Borusan Mannesmann Boru Sanayi
ve Ticaret $û ´%0%μ  Borusan Mannesmann Pipe U.S. Inc. (“BMP”), and The
Jordan International Company (“Jordan”) (collectively, “Plaintiffs”) oppose, and,
contingent upon the court’s denial of Defendants’ motion, move for enforcement of
the court’s judgment. 	See Pl. [Transpacific] & Pl.-Intervenors [BMB] et al.’s Resp.
[Defs.’ Mot.] Aug. 19, 2020, ECF No. 71 (“Pls.’ Resp. Br.”); 1 [Pls.’] Mot. to Order Defs.’
1 On August 20, 2020, the court granted Plaintiffs’ consent motion for errata, and
deemed 	the 	following 	corrections 	made 	to 	Pls.’ 	Resp. 	Br. 	without 	physical
substitution:
1. 	Page 12, line 9 – to replace “orders on standard pipe, oil country tubular
goods, and rebar,” with “orders on standard pipe and oil country tubular
goods, 4 ”, including the footnote therein, which reads: 	“As noted in BMB’s
and BMP’s complaint, Section 232 duties paid in excess of 25 percent duties
equal over $15 million dollars. See BMB & BMP Compl. ¶ 5.”
(footnote continued)
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to Provide Status Report & Timeline on Refund of Unlawfully Collected Section 232
Tariffs, Aug. 21, 2020, ECF No. 74 (“Pls.’ Mot. for Status Report & Timeline”).
Plaintiffs specifically request that the court order Defendants to provide a status
report and timeline on the refund of unlawfully collected Section 232 tariffs. 	See
generally Pls.’ Mot. for Status Report & Timeline at 3. For the following reasons, the
court denies Defendants’ motion to stay enforcement of the court’s judgment pending
appeal of Transpacific II to the Court of Appeals and denies Plaintiffs’ motion to
enforce judgment. 	However, the court sua sponte enjoins liquidation of all subject
entries pending final and conclusive disposition of Transpacific II, including all
appeals.
BACKGROUND
The court presumes familiarity with the facts of this case, as set out in its
recent opinion, see Transpacific II, 44 CIT at __, Slip Op. 20-98 at 3–5, and now
recounts the facts relevant to the disposition of Defendants’ motion. On January 21,
2020, Plaintiffs jointly moved for judgment on the agency record to challenge the
lawfulness of Proclamation 9772, which imposed additional duties on certain steel
imports from Turkey. 	See Pl. [Transpacific] & Pl.-Intervenors [BMB], et al.’s 56.1
Mot. J. Agency R., Jan. 21, 2020, ECF No. 51; see also Proclamation 9772 of August
10, 2018, 83 Fed. Reg. 40,429 (Aug. 15, 2018) (“Proclamation 9772”). 	On July 14,
2020, the court granted Plaintiffs’ motion, holding that, in issuing Proclamation
2. 	Subsequent footnotes to be re-numbered accordingly.
Order, Aug. 20, 2020, ECF No. 73.
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9772, the President exceeded his statutory authority and violated Plaintiffs’ Fifth
Amendment guarantees. 	See Transpacific II, 44 CIT at __, Slip Op. 20-98 at 6–22.
The court thus granted Plaintiffs’ requested relief and instructed U.S. Customs and
Border Protection to issue to Plaintiffs a refund of the difference between any tariffs
collected on imports of steel articles pursuant Proclamation 9772 and the 25 percent
ad valorem tariff that would otherwise apply. 	See generally Judgment; see also
[Transpacific’s] Am. Compl. at Prayer for Relief, Apr. 2, 2020, ECF No. 19; [Pl.-
Intervenors BMB & BMP’s] Compl. at Prayer for Relief, Dec. 9, 2019, ECF No. 35-1;
[Pl.-Intervenor Jordan’s] Consent Mot. Intervene, Attached Compl. at Prayer for
Relief, Dec. 13, 2019, ECF No. 45.
On August 13, 2020, Defendants filed a notice of appeal of Transpacific II to
the Court of Appeals. See generally Notice of Appeal. Shortly thereafter, Defendants
moved to stay enforcement of the court’s judgment pending appeal. 	See generally
Defs.’ Mot. On August 20, 2020, Plaintiffs submitted their response in opposition to
Defendants’ motion, and the following day, filed a motion to enforce judgment,
requesting that the court, upon denial of Defendants’ motion, order Defendants to
provide a status report and timeline for the government’s refund of unlawfully
collected additional tariffs. 2 See generally Pls.’ Resp. Br.; Pls.’ Mot. for Status Report
& Timeline.
2 Specifically, Plaintiffs request the court instruct the government to:
[E]xplain the refund process in detail and refund collected Section 232
(footnote continued)
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JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction under 28 U.S.C. § 1581(i)(2) and (4). Although U.S.
Court of International Trade (“USCIT”) Rule 62 recognizes this court’s discretion to
stay the enforcement of a judgment pending an appeal, a stay is an “intrusion into
the ordinary processes of administration and judicial review” and is therefore “not a
matter of right.” 	See Nken v. Holder, 556 U.S. 418, 427 (Fed. Cir. 2009) (“Nken”)
(citations omitted). Additionally, the court has inherent authority to enforce its own
judgments. See B.F. Goodrich Co. v. United States, 18 CIT 35, 36, 843 F. Supp. 713,
714 (1994). 	This authority includes the “power to determine the effect of its
judgments and issue injunctions to protect against attempts to attack or evade those
judgments.” United States v. Hanover Ins. Co., 82 F.3d 1052, 1054 (Fed. Cir. 1996).
DISCUSSION
I. 	Motion to Stay
When deciding whether to grant a stay, the court considers “(1) whether the
stay applicant has made a strong showing that it is likely to succeed on the merits;
(2) whether the applicant will be irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the other parties interested in the
tariffs 	together 	with 	such 	costs 	and 	interest 	as 	provided 	by 	law
expeditiously and provide the Court with the steps it is taking to
effectuate the Court’s judgment via a status report and timeline for
refunds 	to 	be 	filed 	within 	one 	week 	of 	the 	Court’s 	decision 	on
Defendants’ motion for a stay. . .[and] to provide the Court with a status
report every two weeks after the filing of the first status report along
with a final status report once all unlawfully collected tariffs are
refunded.
Pls.’ Mot. for Status Report & Timeline at 3.
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proceeding; and (4) where the public interest lies.” 	Hilton v. Braunskill, 481 U.S.
770, 776 (1987). 	The first two considerations “are the most critical,” and the party
requesting a stay bears the burden of showing that the circumstances justify an
exercise of the court’s discretion. 	See Nken, 556 U.S. at 433–35 (Fed. Cir. 2009)
(citations omitted).
Defendants fail to persuade that they are likely to succeed on the merits. 	In
order for Defendants to prevail, the Court of Appeals would have to overrule both the
statutory 	and 	the 	constitutional 	holdings 	that 	the 	President’s 	imposition 	of
additional tariffs on certain steel articles from Turkey is unlawful. Defendants claim
that the Court of Appeals might disagree with the court’s reasoning, see Defs.’ Mot.
at 20–26, but point to no intervening authority or evidence that would raise
substantial questions as to the propriety of any of the court’s holdings.
Additionally, the balance of harms does not weigh in favor of granting a stay.
Defendants speculate about Plaintiffs’ solvency and ability to pay back the refunded
duties should the government win on appeal; yet, Defendants acknowledge that they
are “unaware of any specific financial circumstances of any of the [Plaintiffs.]” 	See
Defs.’ Mot. at 17. 	As such, Defendants’ claim that they are likely to be irreparably
harmed lacks merit. 3 	On the other hand, issuing a stay will likely injure Plaintiffs.
3 For the same reasons, Defendants’ appeal to the public interest is not persuasive.
Moreover, 	Defendants’ 	argument 	that 	denying 	the 	stay 	would 	undermine 	the
rationale behind the Section 232 not only ignores the court’s holding that the 50
percent tariffs are unlawful, but also that the tariffs have since been rescinded. See
Defs.’ Mot. at 27–28.
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By staying the refund of unlawfully paid duties, Plaintiffs would suffer the continued
denial of access to a substantial amount of capital.
Defendants’ express a concern that the unliquidated entries may liquidate
before the Court of Appeals renders its decision. See Defs.’ Mot. at 16 n.4 (“Without
a stay . . . most, if not all, entries [may liquidate] and become final . . . [and] the
recoupment of refunds would require a court order to reliquidate, issue bills, and
potentially institute collection actions for unpaid bills if we were to prevail on
appeal.”). However, liquidation is already suspended for many of the entries due to
ongoing antidumping and countervailing duty proceedings. 	See id.; see also Pls.’
Resp. 	Br. 	at 	11–12. 	Nonetheless, 	to 	alleviate 	Defendants’ 	concern 	that 	the
unliquidated entries may liquidate before the Court of Appeals renders its decision,
see Defs.’ Mot. at 16 n.4, the court will sua sponte order the suspension of liquidation
of any unliquidated entries of subject merchandise pending final and conclusive
disposition of Transpacific II, including all appeals.
Finally, contrary to Defendants’ position, USCIT Rule 62 subsections (d) and
(e) do not provide the government an automatic stay of enforcement of the judgment
pending appeal. 	USCIT Rule 62(d) states that an appellant “may obtain a stay by
supersedeas bond,” and Rule 62(e) states that the court “must not require a bond,
obligation, or other security, from the appellant when granting a stay on an appeal
by the United States, its officers, or its agencies[.]” The former allows an appellant
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to obtain a stay of enforcement, 4 and the latter prohibits the court from imposing an
obligation on the appellant when granting a stay pending appeal by the government.
See USCIT Rule 62 (d), (e). 	The two provisions on their face do not trigger an
automatic 	stay 	pending 	appeal 	where 	the 	appellant 	is 	the 	government, 	and
Defendants do not cite any authority to support their position. See Defs.’ Mot. at 14–
15, but see Nken, 556 U.S. at 433–35 (explaining that a stay is an intrusion into the
judicial and administrative process and is therefore not a matter of right). 5 	Thus,
Defendants’ motion for a stay of enforcement of the court’s judgment is denied.
II. 	Motion to Enforce Judgment
In moving for enforcement of the court’s judgment, Plaintiffs essentially urge
that the court supervise Defendants’ refund process. See Pls.’ Mot. for Status Report
& Timeline at 1–3. 	The court grants motions to enforce a judgment “when a
prevailing plaintiff demonstrates that a defendant has not complied with a judgment
entered against it, even if the noncompliance was due to misinterpretation of the
4 Defendants appeal to cases interpreting the former Federal Rules of Civil Procedure
62(d) are inapposite. See Defs.’ Mot. at 13–15 (citations omitted). Whatever practice
courts have adopted with respect to motions to stay enforcement of money judgment
where the appellant posts a supersedeas bond, Defendants again cite no authority
supporting the contention that the government is entitled to a stay as a matter of
right by combined operation of Rules 62(d) and 62(e).
5 Defendants’ cite dicta from American Grape Growers Alliance for Fair Trade as
support for the proposition that the rights of Plaintiffs to the granted judgment may
be 	adequately 	secured 	by 	the 	inherent 	and 	presumed 	creditworthiness 	of 	the
government, see Defs.’ Mot. at 14–15 (citing American Grape Growers Alliance for
Fair Trade v. United States 9 CIT 505, 506 (1985) (“American Grape Growers”)), but
whether or not such considerations weigh in favor of granting a stay, Defendants
overlook American Grape Grower’s holding that the wording of USCIT Rule 62(d)
itself affords discretion to decide whether to grant a stay. 	See American Grape
Growers, 9 CIT at 506.
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judgment.” 	GPX Int'l Tire Corp. v. United States, 39 CIT ___, ___, 70 F. Supp. 3d
1266, 1272 (2015) (quoting Heartland Hosp. v. Thompson, 328 F. Supp. 2d 8, 11
(D.D.C. 2004)). Plaintiffs fail to so demonstrate. 	Indeed, as Plaintiffs acknowledge,
the court’s judgment does not provide a deadline for compliance, and Plaintiffs do not
provide any reason to doubt that Defendants will promptly comply with the court’s
judgment should they fail to obtain a stay of enforcement from the Court of Appeals.
See generally Judgment; see also Pls.’ Mot. for Status Report & Timeline at 3; Defs.’
Resp. to [Pls.’ Mot. for Status Report & Timeline] at 2, Sept. 9, 2020, ECF No. 76
(“[S]hould the Court deny our motion, we would likely seek a stay in the appellate
court[.]”) (“Defs.’ Resp. Br.”). Further, Defendants note that they have already taken
steps to implement the court’s judgment, see Defs.’ Resp Br. at 5, and there is no
indication that supervising Defendants’ compliance would expedite the refund
process. Accordingly, Plaintiffs’ motion to enforce the judgment is denied.
CONCLUSION
For the foregoing reasons, it is
ORDERED that Defendants’ motion is denied; and it is further
ORDERED that Plaintiffs’ motion is denied; and it is further
ORDERED that Defendant, United States, together with its delegates,
officers, agents, and servants, including employees of the U.S. Customs and Border
Protection and the U.S. Department of Commerce, is enjoined during the pendency
of this litigation, including any appeals, from issuing instructions to liquidate or
making or permitting liquidation of any of Plaintiffs’ entries subject to the unlawful
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50 percent tariffs imposed on steel articles from Turkey pursuant to Proclamation
No. 9772.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
/s/ Gary S. Katzmann
Gary S. Katzmann, Judge
/s/ Jane A. Restani
Jane A. Restani, Judge
Dated: 	September 15, 2020
New York, New York
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