Acquisition 362, LLC v. United States

Slip Op. No. 21-46
UNITED STATES COURT OF INTERNATIONAL TRADE
ACQUISITION 362, LLC DBA
STRATEGIC IMPORT SUPPLY,
Plaintiff,
v.
UNITED STATES,
Defendant.
Before: Stephen Alexander Vaden,
Judge
Court No. 1:20-cv-03762
OPINION
[Granting Defendant’s motion to dismiss for lack of subject matter jurisdiction.]
Dated: April 21, 2021
Heather L. Marx, Cozen O’Connor, of Minneapolis, MN, for Plaintiff Acquisition 362,
LLC DBA Strategic Import Supply. With her on the brief were Thomas G. Wallrich
and Cassandra M. Jacobsen.
Hardeep K. Josan, Trial Attorney, International Trade Field Office, Civil Division,
Commercial Litigation Branch, U.S. Department of Justice, of New York, NY for
Defendant United States. With him on the brief were Jeffrey Bossert Clark, Acting
Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation
Branch and Offices of Foreign Litigation and International Legal Assistance, Aimee
Lee, 	Assistant 	Director, 	Commercial 	Litigation 	Branch 	and 	Offices 	of 	Foreign
Litigation and International Legal Assistance, and Justin R. Miller, Attorney-In-
Charge, International Trade Field Office. Of Counsel was Paula S. Smith, Office of
the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and
Border Protection.
Vaden, Judge: Plaintiff Acquisition 362, LLC, doing business as Strategic
Import Supply, filed this case under Section 515 of the Tariff Act of 1930, as amended,
contesting the denial of its protests over countervailing duties. Specifically, Plaintiff
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challenges a decision by U.S. Customs and Border Protection (Customs) to assess
countervailing duties on the importation from the People’s Republic of China (China)
of certain passenger vehicle and light truck tires over the course of multiple entries
throughout 2016. Compl., ECF No. 5. Before the Court is the Government’s motion to
dismiss for lack of subject matter jurisdiction. Def.’s Mot. to Dismiss (Def.’s Mot.),
ECF No. 25. For the reasons set forth below, this Court finds that it lacks subject
matter jurisdiction and grants the Government’s motion.
BACKGROUND
On August 10, 2015, the U.S. Department of Commerce (Commerce) issued a
countervailing duty order regarding tires from China. See Certain Passenger Vehicle
and Light Truck Tires from the People's Republic of China, 80 Fed. Reg. 47902 (Aug.
10, 2015). Commerce’s order included tire imports from Zhongyi Rubber Company
Ltd. (Zhongyi). See Compl. ¶ 4, ECF No. 5; 80 Fed. Reg. at 47905. Plaintiff, an
importer of tires, imported tires from Zhongyi on several occasions in 2016. Compl. ¶
7, ECF No. 5; Pl.’s Mem. of Law in Opp’n to Def.’s Mot. to Dismiss (Pl.’s Mem.) at 2,
ECF No. 27. Because Plaintiff’s tire imports were subject to the duties established in
Commerce’s 2015 order, it “deposited payment of the assessed countervailing duties
at a rate of 30.61%, the rate assigned…at the time entries were made.” Pl.’s Mem. at
2, ECF No. 27.
Zhongyi and other interested parties requested that Commerce initiate an
administrative review of its 2015 order. Id. at 7; Protests and Entries from the Port
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of Wilmington, NC., ECF No. 11-1 at 8 (Protest NC). Commerce agreed and published
a notice in the Federal Register on October 16, 2017. Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 82 Fed. Reg. 48051 (Oct. 16, 2017).
Zhongyi would later withdraw its individual request for administrative review and
therefore “Commerce rescinded this review of the [countervailing duty] Order
on…tires from China with regard to Zhongyi.”1 Protest NC, ECF No. 11-1 at 8.
If 	an 	interested 	party, 	domestic 	or 	otherwise, 	does 	not 	request 	an
administrative review of the applicability of a countervailing duty order to it, the
regulations require the Secretary of Commerce to instruct Customs to assess
countervailing duties on merchandise described by the order. 19 C.F.R. § 351.212(c).
As such, Customs liquidated Plaintiff’s entries between October 19, 2018 and
November 9, 2018, at the 30.61% countervailing duty rate. Compl. ¶ 11, ECF No. 5;
Summons ECF No. 1-1. Plaintiff did not file a protest of the liquidation within 180
days of its completion. Cf. 19 U.S.C. § 1514(c)(3).
On June 17, 2019, Commerce issued its Amended Final Results following its
administrative review of the Countervailing Duty Order. See Countervailing Duty
Order on Certain Passenger Vehicle and Light Truck Tires from the People’s Republic
of China: Amended Final Results of Countervailing Duty Administrative Review;
1 Plaintiff submits Zhongyi withdrew its request for review because it was a
non-selected company under review under an alternative company name, Dongying
Zhongyi Rubber Co., Ltd. Plaintiff further submits “Zhongyi and Dongying Zhongyi
are one in the same company.” Protest NC, ECF No. 11-1 at 8.
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2016, 84 Fed. Reg. 28011 (June 17, 2019) (Amended Final Results); Pl.’s Mem. at 2,
ECF No. 27. The Amended Final Results concluded that the applicable countervailing
duty amount should be nearly cut in half — from 30.61% to 15.56%. 	Id. at 28012.
The International Trade Administration (ITA) issued Message No. 9184301 to
Customs on July 3, 2019, instructing Customs to liquidate the relevant entries at the
newly calculated rate. 2 Pl.’s Mem. at 3, ECF No. 27; Liquidation instructions for
passenger vehicle and light truck tires from the People’s Republic of China for the
period of 01/01/2016 through 12/31/2016, ITA Message No. 9184301 (July 3, 2019)
available at https://aceservices.cbp.dhs.gov/adcvdweb/#9184301 (last visited Apr. 16,
2021).
Plaintiff filed protests on December 12 and December 13, 2019, for each
already liquidated entry for its 2016 tire imports. Pl.’s Mem. at 4. Customs denied
Plaintiff’s protests as untimely and emailed the rejection notices to Plaintiff on April
24, 2020. Protests, ECF Nos. 11 to 21, 24. Plaintiff argues the protests were timely
as they were filed within 180 days of Customs’ decision not to apply an amended
countervailing duty rate after receipt of instructions from the ITA to assess amended
2 Commerce normally determines the rates for non-selected companies in
reviews in a manner that is consistent with section 705(c)(5) of the Tariff Act of 1930,
which provides instructions for calculating the all-others rate in an investigation. For
non-selected companies subject to review by Commerce’s administrative review, the
ITA calculates the appropriate countervailing duty rate. This non-selected rate is the
catch-all rate that would apply to companies not selected for individual examination
by Commerce in an administrative review. 19 U.S.C. § 1671d(c)(1)(B)(i)(I). Plaintiff
has not challenged Commerce’s rate determination.
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duty rates. Plaintiff subsequently commenced this action on October 15, 2020, to
challenge the denial of the protests. Summons, ECF No. 1.
The Government moves to dismiss Plaintiff’s Complaint. It argues that 19
U.S.C. 	§ 	1514(a) 	enumerates 	the 	Customs 	decisions 	that 	are 	protestable, 	a
prerequisite to asserting jurisdiction under 28 U.S.C. § 1581(a). Unless a party files
a protest of those enumerated actions within the required time limits, Customs’
decision becomes final and conclusive. See 19 U.S.C. § 1514. The Government claims
that 	Plaintiff’s 	challenge 	to 	Customs’ 	“decision” 	not 	to 	apply 	the 	amended
countervailing duty rates to Plaintiff’s already liquidated entries is not a valid claim
under section 1514 because Customs made no decision that may now be challenged.
See Def.’s Reply in Supp. of Mot. to Dismiss (Def.’s Reply) at 9, ECF No. 28. To the
Government, it is simple: 	Because Plaintiff’s protests arrived more than 180 days
after the liquidations, Plaintiff is precluded from challenging the denial of its
untimely protests now that Commerce has agreed the duty rate should be less. See
Def.’s Mot. at 12, ECF No. 25. Accordingly, the Government argues that this Court
lacks subject-matter jurisdiction to hear Plaintiff’s case.
STANDARD OF REVIEW
“[A] 	court’s 	subject-matter 	jurisdiction 	defines 	its 	power 	to 	hear 	cases.”
Lightfoot v. Cendant Mortgage Corp., 137 S. Ct. 553, 560 (2017). To adjudicate a case,
a court must have subject-matter jurisdiction over the claim presented. See Steel Co.
v. Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998). Even where the parties
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themselves fail to raise the issue, “federal courts have a duty to consider their subject
matter jurisdiction in regard to every case and may raise the issue sua sponte.”
Answers in Genesis of Kentucky, Inc. v. Creation Ministries Int'l., Ltd., 556 F.3d 459,
465 (6th Cir. 2009); see also Capron v. Van Noorden, 6 U.S. (2 Cranch) 126, 127 (1804)
(“[I]t [is] the duty of the Court to see that they had jurisdiction, for the consent of the
parties could not give it.”). “[W]hen a federal court concludes that it lacks subject-
matter jurisdiction, the court must dismiss the [claim] in its entirety.” Arbaugh v. Y
& H Corp., 546 U.S. 500, 514 (2006).
This Court’s jurisdiction under 28 U.S.C. § 1581(a) provides for “exclusive
jurisdiction of any civil action commenced to contest the denial of a protest, in whole
or in part, under section 515 of the Tariff Act of 1930.” Section 1581(a) grants this
Court jurisdiction over Customs’ denial of protests and “‘provides no jurisdiction for
protests outside the [ ] exclusive categories’ listed in 19 U.S.C. § 1514(a).” Sunpreme
Inc. v. United States, 892 F.3d 1186, 1191 (Fed. Cir. 2018) (quoting Mitsubishi Elecs.
Am., Inc. v. United States, 44 F.3d 973, 976 (Fed. Cir. 1994)) (brackets in original). A
plaintiff bears the burden of establishing subject-matter jurisdiction. Kokkonen v.
Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). In resolving disputed predicate
jurisdictional facts, this Court may review evidence extrinsic to the pleadings.
Shoshone Indian Tribe of Wind River Reservation, Wyo. v. United States, 672 F.3d
1021, 1030 (Fed. Cir. 2012).
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This Court’s jurisdiction is limited furthermore to cases in which the United
States has waived sovereign immunity and consented to suit. United States v.
Mitchell, 	445 	U.S. 	535, 	538 	(1980). 	Consent 	cannot 	be 	implied 	“but 	must 	be
unequivocally expressed.” Id. Without jurisdictional statutes enacted by Congress
authorizing suit against the United States, there would be no jurisdiction to entertain
claims against the United States. Id. Plaintiff must demonstrate that its claims come
within the confines of the statutory conditions set by Congress. Ruckelshaus v. Sierra
Club, 463 U.S. 680 (1983) (holding that waivers of immunity authorized by statute
must be construed strictly in favor of the sovereign and not enlarged beyond what the
language requires).
DISCUSSION
Plaintiff 	claims 	jurisdiction 	under 	28 	U.S.C. 	§ 	1581(a), 	asserting 	it 	“is
protesting the decision by U.S. Customs and Border Protection…to ignore the
mandate 	of 	the 	Amended 	Final 	Results 	issued 	by 	the 	U.S. 	Department 	of
Commerce…and instructions from the International Trade Administration.” Pl.’s
Mem. at 1, ECF No. 27; Compl. ¶ 2, ECF No. 5. Although Plaintiff acknowledges it
filed the protests with Customs later than 180 days after liquidation, it argues the
180-day clock should not have begun at the time of liquidation. See Pl.’s Mem. at 7,
ECF No. 27. Instead, Plaintiff argues its protests were timely because they were filed
within 180 days of Customs’ receipt of instructions from Commerce. Id. at 7. The
Government responds that, because Plaintiff’s protests were filed more than 180 days
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after liquidation, the protests are untimely and fail to meet the requirements
necessary to establish jurisdiction before this Court. See Def.’s Mot. at 6, ECF No. 25;
Def.’s Reply at 4, ECF No. 28. As both sides acknowledge the jurisdiction-robbing 180-
day deadline to file a valid protest, the dispute here is over when that 180-day time
period begins.
I
Although 28 U.S.C. § 1581(a) provides for exclusive jurisdiction to contest the
denial of a protest under 19 U.S.C. § 1515, there are procedural prerequisites to
obtaining that jurisdiction. Section 1514 provides those prerequisites necessary to
establish a valid challenge of a protest denial. 19 U.S.C. § 1514. It provides that all
Customs decisions, including liquidation, become final unless a party files a protest.
19 U.S.C. § 1514(a). The section then identifies the decisions that are subject to
protest:
[D]ecisions of the Customs Service, including the legality of all
orders and findings entering into the same, as to
(1) the appraised value of merchandise;
(2) 	the 	classification 	and 	rate 	and 	amount 	of 	duties
chargeable;
(3) all charges or exactions of whatever character within
the jurisdiction of the Secretary of the Treasury;
(4) the exclusion of merchandise from entry or delivery or
a demand for redelivery to customs custody under any
provision of the customs laws, except a determination
appealable under section 1337 of this title;
(5) 	the 	liquidation 	or 	reliquidation 	of 	an 	entry, 	or
reconciliation as to the issues contained therein, or any
modification thereof;
(6) the refusal to pay a claim for drawback; or
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(7) the refusal to reliquidate an entry under section 1520(c)
of this title;
shall be final and conclusive upon all persons...unless a protest is
filed in accordance with this section, or unless a civil action
contesting 	the 	denial 	of 	a 	protest, 	in 	whole 	or 	in 	part, 	is
commenced in the United States Court of International Trade....
19 U.S.C § 1514(a) (emphasis added to identify the Customs decisions relevant to the
present matter). The same section establishes time limits for protesting a Customs
decision. 19 U.S.C. § 1514(c). A valid protest must be filed within 180 days of the
Customs decision. Id. Taken together, these two sections mean “a protest must have
been timely filed under 19 U.S.C. § 1514(c)(3) for this Court to obtain jurisdiction over
a suit that contests its denial.” US JVC Corp. v. United States, 15 F. Supp. 2d 906,
909 (CIT 1998); accord Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973 (Fed.
Cir. 1994).
Plaintiff urges the Court to consider the protests timely “because they were
filed within 180 days following the issuance of the decision to implement the
Amended Final Results” supplied by Commerce to Customs. Pl.’s Mem. at 7, ECF No.
27. Herein lies the problem with Plaintiff’s argument that Customs’ receipt of
amended countervailing duty rates from Commerce is a Customs decision that
triggers the 180-day time period. This Court has held, and the Federal Circuit has
affirmed, that determinations of countervailing duty and antidumping duty rates are
not Customs decisions but rather Commerce decisions. See, e.g., Mitsubishi Elecs,
Am., 44 F.3d at 977 (holding that decisions about the rate of an antidumping duty
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are made by Commerce and Customs’ role is to apply Commerce’s instructions).
Customs holds but a ministerial role in implementation once these rate decisions are
shared with it. Id. Therefore, the Plaintiff cannot carry its burden because it cannot
(and has not) identified a Customs decision that it timely protested. See Sunpreme,
892 F.3d at 1192–94; Mitsubishi Elecs. Am., 44 F.3d at 975, 977-78. If the Plaintiff
sought 	to 	challenge 	Commerce’s 	imposition 	of 	countervailing 	duties 	or 	its
determination of a countervailing duty rate, an action should have been brought
before this Court under its 28 U.S.C. § 1581(c) jurisdiction and not its § 1581(a)
jurisdiction, as Plaintiff has done here.3 See 19 U.S.C. § 1516a.
II
The 	application 	of 	the 	allegedly 	improper 	countervailing 	duty 	rates 	to
Plaintiff’s entries occurred from October 19 through November 9, 2018, when
Customs liquidated Plaintiff’s entries. Summons at 4, ECF No. 1; Def.’s Mot. at 2,
ECF No. 25. A timely protest of Customs’ liquidation had to be filed within 180 days
of that liquidation. 19 U.S.C. § 1514. Plaintiff acknowledges filing outside the 180-
3 Because Zhongyi withdrew its request to Commerce to review the countervailing
duty order, Customs assessed the countervailing duties on these non-reviewed entries
in accordance with the final determination in effect at the time of entry. See Capella
Sales & Servs. Ltd. v. United States, Aluminum Extrusions Fair Trade Comm., 878
F.3d 1329, 1335 (Fed. Cir. 2018) (“We do not question the authority of [Commerce],
pursuant to its regulation, to liquidate entries…at the rate set in the original
antidumping duty order when there has been no challenge to the validity of that order
and no request for annual review.”) (quoting Asociacion Colombiana de Exportadores
de Flores v. United States, 916 F.2d 1571, 1577 (Fed. Cir. 1990)) (omission and
alteration in original).
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day post-liquidation time period. See Pl.’s Mem. at 9, ECF No. 27. Therefore, even if
the Court were to assume that the protests Plaintiff filed were valid, this Court lacks
jurisdiction over the denial of Plaintiff’s protests because of their untimeliness.
CONCLUSION
Plaintiff’s challenge before this Court fails for two separate reasons. First, by
using a protest against Customs to dispute a determination made by Commerce,
Plaintiff has invoked the wrong jurisdictional statute. Compare 28 U.S.C. § 1581(a)
(providing jurisdiction over denials of Customs protests) with 28 U.S.C. § 1581(c)
(providing jurisdiction for challenges to determinations of countervailing duty rates
by Commerce). Second, Plaintiff’s admission that it filed its protests more than 180
days after Customs liquidated its entries also proves fatal. Were Plaintiff’s protests
permissible, they would be untimely and thus deprive the Court of jurisdiction. Either
reason 	is 	sufficient 	to 	require 	dismissal; 	and 	for 	both 	the 	foregoing 	reasons,
Defendant’s motion to dismiss is GRANTED.
/s/ 	Stephen Alexander Vaden
Stephen Alexander Vaden, Judge
Dated: April 21, 2021
New York, New York
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