Kwo Lee, Inc. v. United States

KWO LEE, INC.
Plaintiff,
v.
UNITED STATES,
Defendant.
Slip Op. 14
UNITED STATES COURT OF INTERNATIONAL TRADE
OPINION and ORDER
[preliminary injunction granted]
Dated: October 16, 2014
Robert T. Hume and Carol Wyzinski, Hume & Associates,
LLC, of Ojai, CA, for the Plaintiff.
Tara K. Hogan, Senior Trial Counsel, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for the Defendant. 	Also on the brief were
Joyce R. Branda, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Patricia M. McCarthy, Assistant
Director. 	Of counsel was Chi Choy, Attorney, Office of
Assistant Chief Counsel, U.S. Customs and Border Protection, of
New York, NY.
Pogue, Senior Judge: Plaintiff, Kwo Lee, Inc.
(Shuzhang “Steven” Li, owner), moves to enjoin U.S. Customs and
Border Protection (“Customs” or “CBP”) from imposing a single
transaction bond requirement on Plaintiff’s entries of fresh
garlic from the People’s Republic of China (“PRC”). Pl.’s Appl.
for a TRO & Mot. for a Prelim. Inj., ECF No. 7 (“Pl.’s Br.”),
PUBLIC VERSION
Before: Donald C. Pogue,
Senior Judge
Court No. 14-00212
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 1 of 21

Court No. 14-00212 	Page 2
at 1. 	Plaintiff’s entries are subject to an antidumping duty
order (A-570-831). 	Customs enhanced bond requirement would
equal Plaintiff’s total potential antidumping duty liability as
calculated at the PRC-wide rate ($4.71/kg), rather than the
expected $0.35/kg cash deposit rate otherwise applicable to
Plaintiff’s exporter/producer (Qingdao Tiantaixing Foods Co.,
Ltd. (“QTF”)). Id.; Am. Compl., ECF No.19, at ¶ 1. 	Because
Plaintiff has established his entitlement to a preliminary
injunction, his motion is granted.
BACKGROUND
This action has its origins in a nearly twenty-year-
old antidumping duty order on fresh garlic from the PRC. Fresh
Garlic from the [PRC], 59 Fed. Reg. 59,209 (Dep’t Commerce Nov.
16, 1994) (antidumping duty order). 	This order set a PRC-wide
rate at 376.67 percent (which translates to a cash deposit rate
of $4.71/kg of garlic). Id. at 59,210; Ex. 3 to Pl.’s Br.
(Undated Port of San Francisco Information Notice), ECF No. 7-2
at Ex. 3 (“Information Notice”).
QTF did not begin shipping fresh garlic to the United
States until 2006, at which point it requested and, following
investigation, was granted a new shipper rate (“NSR”) by the
U.S. Department of Commerce (“Commerce”). Fresh Garlic from the
[PRC], 73 Fed. Reg. 56,550, 56,552 (Dep’t Commerce Sept. 29,
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 2 of 21

Court No. 14-00212 	Page 3
2008) (final results and rescission, in part, of twelfth new
shipper reviews) (“Twelfth NSR”). 	QTF’s NSR is 32.78 percent
(which translates to a cash deposit rate of $0.352/kg of
garlic). Id.; App. to Mem. Supp. Def.’s Opp’n to Pls.’ Appl. for
TRO & Mots. for Prelim. Inj. (“Def.’s App.”), (CBP Cash Deposit
Instructions for Fresh Garlic from China, A-570-831 (Oct. 15,
2008)), ECF No. 25-1 (“CBP Cash Deposit Instructions”), at A3. 1
QTF made no subsequent shipments of the subject garlic to the
United States until 2014, 2 when Plaintiff attempted to import
some of QTF’s fresh garlic. Ex. 5 to Pl.’s Br. (Decl. of Steven
1 See also Ex. 1 to Pl.’s Br. (July 3, 2014 letter from QTF to
Customs), ECF No. 7-1 at 3 (requesting verification of $0.352/kg
rate); Pl.’s Br., ECF No. 7, at 2 n.3 (Plaintiff receiving oral
confirmation of $0.352/kg rate from Customs).
2 For administrative reviews in which QTF timely certified it had
no shipments during the period of review, see Fresh Garlic from
the [PRC], Issues & Decision Memorandum, A-570-831, ARP 07-08
(June 14, 2010) (adopted in 75 Fed. Reg. 34,976, 34,980 (Dep’t
Commerce June 21, 2010) (final results and partial rescission of
the 14th antidumping duty administrative review)) Issue 3 at 11
n.7 (noting that Customs issued a no-shipment inquiry for QTF,
and will only do so when the company has submitted a timely and
properly filed no shipment certification); Fresh Garlic from the
[PRC], 76 Fed. Reg. 37,321, 37,323 (Dep’t Commerce June 27,
2011) (final results and final rescission, in part, of the 2008-
2009 antidumping duty administrative review); Fresh Garlic from
the [PRC], 77 Fed. Reg. 11,486, 11,489 (Dep’t Commerce February
27, 2012) (partial final results and partial final rescission of
the 2009-2010 administrative review); Fresh Garlic from the
[PRC], 78 Fed. Reg. 36,168, 36,170 (Dep’t Commerce June 17 3013)
(final results of antidumping administrative review; 2010-2011);
and, Fresh Garlic from the [PRC], 79 Fed. Reg. 36,721, 36,724
(Dep’t Commerce June 30, 2014) (final results and partial
rescission of the 18th antidumping duty administrative review;
2011-2012).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 3 of 21

Court No. 14-00212 	Page 4
[Li] (Owner)), ECF No. 7-2 (“Li Decl.”), at ¶ 10. 	Customs
denied entry, conducted import specialist review of entry
documents, and, ultimately, denied release of the entries. Def’s
App. (Edert Decl.), ECF No 25-1 (“Edert Decl.”), at A10-A11
¶¶ 6, 11. 	Customs provided Plaintiff with notice that “[t]o
ensure entries are filed correctly and to protect [the] revenue
[of the United States]” it would require that he provide an
“additional single transaction bond [for each entry] to cover
antidumping duties” at the PRC-wide rate of $4.71/kg. See
Information Notice, ECF No. 7-2 at Ex. 3. 	Plaintiff challenges
this determination as arbitrary and capricious under 28 U.S.C. §
1581(i) (2012). 3 See Am. Compl., ECF No. 19, at ¶ 2; Pl.’s Br.,
ECF No. 7, at 1.
Plaintiff sought a temporary restraining order (“TRO”)
and preliminary injunction to prevent Customs from imposing the
heightened bonding requirement, Pl.’s Br., ECF No. 7, at 1. 	The
court held an evidentiary hearing on October 1, 2014, see Hr’g,
ECF No. 29, and subsequently granted Plaintiff’s request for a
TRO. See TRO, Oct. 2, 2014, ECF Nos. 35 (conf. version) & 36
(pub. version). 	This TRO, effective through midnight on October
16, 2014, enjoined Customs from imposing the heightened bond
requirement on the subject entries, and required instead that
3 All further citations to the U.S. Code are to the 2012 edition.
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 4 of 21

Court No. 14-00212 	Page 5
the Plaintiff provide security to this Court in the amount of
one million dollars ($1,000,000.00), “to pay the costs or
damages as may be incurred or suffered by the Defendant in the
event of a finding that the Defendant has been wrongfully
enjoined or restrained.” Id. at 2.
DISCUSSION
“A preliminary injunction is an extraordinary remedy
never awarded as of right.” Winter v. Natural Res. Def. Council,
Inc., 555 U.S. 7, 24 (2008) (citation omitted). 	To obtain a
preliminary injunction, Plaintiff must establish: “[1] that he
is likely to succeed on the merits, [2] that he is likely to
suffer irreparable harm in the absence of preliminary relief,
[3] that the balance of equities tips in his favor, and [4] that
an injunction is in the public interest.” Id. at 20 (citations
omitted). 	No one factor is dispositive, FMC Corp. v. United
States, 3 F.3d 424, 427 (Fed. Cir. 1993), but “[c]entral to the
movant’s burden are the likelihood of success and irreparable
harm factors.” Sofamor Danek Grp., Inc. v. DePuy-Motech, Inc.,
74 F.3d 1216, 1219 (Fed. Cir. 1996). 	The court evaluates a
request for a preliminary injunction on a “sliding scale,” where
“the more the balance of irreparable harm inclines in the
plaintiff’s favor, the smaller the likelihood of prevailing on
the merits he need show in order to get the injunction.” Qingdao
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 5 of 21

Court No. 14-00212 	Page 6
Taifa Grp. Co. v. United States, 581 F.3d 1375, 1378-79 (Fed.
Cir. 2009) (citing Kowalski v. Chi. Tribune Co., 854 F.2d 168,
170 (7th Cir. 1988)). 	Because of this “sliding scale,” we begin
our analysis with discussion of irreparable harm.
I. 	Plaintiff Has Shown a Viable and Immediate Threat of
Irreparable Harm.
Plaintiff must establish that, in the absence of a
preliminary injunction, he will suffer irreparable harm. Winter,
555 U.S. at 20. 	Harm is irreparable when “no damages payment,
however great,” can address it, Celsis In Vitro, Inc. v.
CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012) (citations
omitted); see also Morales v. Trans World Airlines, Inc., 504
U.S. 374, 381 (1992) (holding that equitable relief is only
appropriate where legal remedies are inadequate). 	The threat of
irreparable harm must be immediate and viable — “[a] preliminary
injunction will not issue simply to prevent a mere possibility
of injury, even where prospective injury is great.” Zenith Radio
Corp. v. United States, 710 F.2d 806, 809 (Fed. Cir. 1983)
(quotation marks and citations omitted). 4
4 See also Winter, 555 U.S. at 22 (holding that movant must
“demonstrate that irreparable injury is likely in the absence of
an injunction”) (emphasis in original) (citing Los Angeles v.
Lyons, 461 U.S. 95, 103 (1983)); Granny Goose Foods, Inc. v.
Teamsters, 415 U.S. 423, 441 (1974); O'Shea v. Littleton, 414
U.S. 488, 502 (1974) (additional citation to treatise omitted)).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 6 of 21

Court No. 14-00212 	Page 7
Financial loss alone – compensable with monetary
damages — is not irreparable. Sampson v. Murray, 415 U.S. 61, 90
(1974). 	However, “the simple fact that one could, if pressed,
compute a money damages award does not always preclude a finding
of irreparable harm.” Celsis In Vitro, 664 F.3d at 930.
Irreparable harm may take the form of “[p]rice erosion, loss of
goodwill, damage to reputation, and loss of business
opportunities.” Id. (citing Abbott Labs. v. Sandoz, Inc., 544
F.3d 1341, 1362 (Fed. Cir. 2008); Sanofi–Synthelabo v. Apotex,
Inc., 470 F.3d 1368, 1382–83 (Fed. Cir. 2006)). 5 	Bankruptcy is
an irreparable harm because, in addition to the obvious economic
injury, loss of business renders a final judgment useless,
5 See also Corus Grp. PLC v. Bush, 26 CIT 937, 943, 217 F. Supp.
2d 1347, 1354 (2002) (“Generally, where a party is required to
fundamentally alter its business operations during litigation in
order to comply with a challenged Government action, that party
suffers irreparable harm.”), aff’d in part sub nom. Corus Grp.
PLC. v. Int’l Trade Comm'n, 352 F.3d 1351 (Fed. Cir. 2003);
Decca Hospitality Furnishings, LLC v. United States, 30 CIT 357,
365-66, 427 F. Supp. 2d 1249, 1257-58 (2006) (importer may
suffer irreparable harm when “unable to secure the necessary
credit to cover the erroneous cash deposit rate pending a final
and conclusive court decision”); CPC Int'l, Inc. v. United
States, 19 CIT 978, 979, 896 F. Supp. 1240, 1243 (1995)
(Irreparable harm occurs where “compliance with a ruling of
Customs . . . would cause the importer to incur costs,
expenditures, business disruption or other financial losses, for
which the importer has no legal redress to recover in court,
even if the importer ultimately prevails on the merits in
contesting the ruling.”).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 7 of 21

Court No. 14-00212 	Page 8
depriving the movant of effective and meaningful judicial
review. Doran v. Salem Inn, Inc., 422 U.S. 922, 932 (1975). 6
Here, Customs seeks to impose single transaction bond
requirements on Plaintiff’s entries of fresh garlic from the PRC
equal to Plaintiff’s total potential antidumping duty liability
if calculated at the PRC-wide rate ($4.71/kg), see Information
Notice, ECF No. 7-2 at Ex. 3, rather than the expected $0.35/kg
cash deposit rate otherwise applicable to Plaintiff’s
exporter/producer, QTF. See Twelfth NSR, 73 Fed. Reg. at 56,552
(setting the antidumping duty rate); CBP Cash Deposit
Instructions, ECF No. 25-1, at A3 (setting cash deposit rate);
Ex. 1 to Pl.’s Br. (July 3, 2014 letter from QTF to Customs),
ECF No. 7-1 at 3 (requesting verification of $0.352/kg rate);
Pl.’s Br., ECF No. 7, at 2 n.3 (Plaintiff receiving oral
confirmation of $0.352/kg rate from Customs). 	For the
Plaintiff, this means more than $10 million in additional
bonding (i.e., 129 containers at an average of $117,500
additional bonding per container). See Li Decl., ECF No. 7-2 at
6 See also Queen's Flowers de Colombia v. United States, 20 CIT
1122, 1127, 947 F. Supp. 503, 507 (1996); Am. Parcel Forwarding
Co. v. United States, 4 CIT 94, 98 (1982) (not reported in F.
Supp.); McAfee v. U.S., 3 CIT 20, 24, 531 F. Supp. 177, 179
(1982) (“It is difficult for this court to envision any
irreparable damage to a plaintiff and his business more
deserving of equitable relief than the [very] loss of the
business itself.”).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 8 of 21

Court No. 14-00212 	Page 9
Ex. 5, at ¶ 10; Attach. to [Pl.’s] Resp. to Ct.’s Req., Oct. 2,
2012, ECF No. 34-1. 7
Normally, an importer could obtain such single
transaction bonds from a surety for a fraction of the bond
value, see Mem. Supp. Def.’s Opp’n to Pls.’ Appl. for TRO &
Mots. for Prelim. Inj., ECF Nos. 17 (pub. version) & 25 (conf.
version) (“Def.’s Br.”) at 16; [Def.’s] Resp. to Ct.’s Req.,
Sept. 30, 2014, ECF No. 26, at ¶ 1. 	But Plaintiff does not
present a normal case. 	Rather, obtaining a bond at this time,
in this industry would require full collateral for the millions
of dollars at issue. Pl.’s Resp. to Ct.’s Req., Oct. 2, 2012,
ECF No. 30; see also Conf. Tr. of Hr’g Held on Oct. 1, 2014
(“Tr. TRO Hr’g”)(test. Of Mr. Shuzhang “Steven” Li), ECF No. 40
(“Li Test.”), at 8:20-9:8, 17:21-18:17. 8 	Plaintiff represents
that he cannot provide this collateral any more than he can post
the full amount as a cash deposit. Li Test., ECF No. 40, at
15:1-4, 17:8-11; Tr. TRO Hr’g (Pl.’s Ex. 4), ECF No. 40 (bank
statements). 	While he has paid the additional bonding for two
entries himself, see Attach. to [Pl.’s] Resp. to Ct.’s Req.,
Oct. 2, 2012, ECF No. 34-1 at 1 (listing two entries as released
7 Defendant places total additional bonding required at $[[ 	]]
million. [Def.’s] Resp. to Ct.’s Order, Oct. 2, 2014, ECF
Nos. 32 (conf. version) & 33 (pub. version), at 2.
8 Cf. Decca Hospitality, 30 CIT at 366, 427 F. Supp. 2d at 1257-
58.
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 9 of 21

Court No. 14-00212 	Page 10
with payment of full collateral ($116,572.50)); Tr. TRO Hr’g
(Pl.’s Exs. 1 & 2), ECF No. 40 (providing Customs bonds and
collection receipts noting that cash was provided in lieu of
bond for two entries)), the vast majority of the garlic has
remained in limbo, accruing demurrage charges 9 and spoiling. Li
Decl., ECF No. 7-2 at Ex. 5, at ¶ 11. 	Plaintiff also suffers
loss of goodwill and damage to his reputation from his domestic
customers due to his failure to deliver because of his inability
to pay the fully collateralized bond amount. Li Test., ECF No.
40, at 12:6-13:15; Tr. TRO Hr’g (Pl.’s Ex. 3), ECF No. 40
(letter from domestic customer to Plaintiff). 	Unable to meet
either Customs’ or his customers’ demands, Plaintiff faces
imminent and immediate bankruptcy, loss of business, and,
therefore, loss of access to meaningful judicial review.
Accordingly, Plaintiff has sufficiently established irreparable
harm for a preliminary injunction.
II. 	Plaintiff Has Established a Fair Chance of Success on the
Merits.
Where, as here, the Plaintiff has made a strong
showing of irreparable harm, “the burden to show a likelihood of
9That is, money owed to the shipping container company for use
of the containers beyond the agreed time. See id.; Black’s Law
Dictionary 526 (10th ed. 2014) (defining demurrage as, inter
alia, “[a] charge due for the late return of ocean containers or
other equipment”).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 10 of 21

Court No. 14-00212 	Page 11
success is necessarily lower.” Qingdao Taifa, 581 F.3d at 1381.
He need only establish a “fair chance of success on the merits,”
U.S. Ass’n of Imps. of Textiles & Apparel v. U.S. Dep’t of
Commerce, 413 F.3d 1344, 1347 (Fed. Cir. 2005) (internal
quotation marks and citations omitted), by raising “questions
which are ‘serious, substantial, difficult and doubtful.’”
Timken Co. v. United States, 6 CIT 76, 80, 569 F. Supp. 65, 70
(1983) (quoting Cnty. of Alameda v. Weinberger, 520 F.2d 344,
349-50 n.12 (9th Cir. 1975)). 10
On the merits, Plaintiff challenges Customs’
determination that he must provide enhanced bonding. Am. Compl.,
ECF No. 19, at ¶ 1. 	He faces a high burden: Customs has broad
authority to protect the revenue of the United States. See 19
U.S.C. §§ 66, 1623. 	Further, Customs has promulgated extensive
bonding regulations, following notice-and-comment rulemaking,
pursuant to that authority. 11 This includes 19 C.F.R. § 113.13(d)
(2014) under which Customs makes enhanced bonding
determinations. 	However, while Customs’ “interpretation of its
own regulations is entitled to broad deference from the courts,”
Cathedral Candle Co. v. U.S. Int’l Trade Comm’n, 400 F.3d 1352,
10 See also Ugine & Alz Belgium v. United States, 452 F.3d 1289,
1295 (Fed. Cir. 2006) (finding sufficient likelihood of success
where matter was not “so clear cut” as to deny appeal).
11 See Customs Bond Structure; Revision, 49 Fed. Reg. 41,152
(Oct. 19, 1984).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 11 of 21

Court No. 14-00212 	Page 12
1363 (Fed. Cir. 2005) (citations omitted), the court must “hold
unlawful and set aside agency action, findings, and conclusions
found to be[] arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). 12
The arbitrary and capricious standard of review is
narrow and deferential. Citizens to Pres. Overton Park, Inc. v.
Volpe, 401 U.S. 402, 416 (1971). 	Nonetheless, the court’s
inquiry must still be “searching and careful.” Id. 	Customs must
have “articulate[d] a rational connection between the facts
found and the choice made.” Bowman Transp., Inc. v. Ark.-Best
Freight Sys., Inc., 419 U.S. 281, 285 (1974) (internal quotation
marks and citation omitted). 	Customs cannot have “relied on
factors [that] Congress has not intended it to consider,
entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the
evidence before [it], or is so implausible that it could not be
ascribed to a difference in view or the product of agency
expertise.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). 	“While we may
not supply a reasoned basis for the agency’s action that the
agency itself has not given, we will uphold a decision of less
12 The court reviews actions brought under 19 U.S.C. § 1581(i)
(such as here) as provided in the Administrative Procedures Act,
5 U.S.C. § 706. See 28 U.S.C. § 2640(e).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 12 of 21

Court No. 14-00212 	Page 13
than ideal clarity if the agency’s path may reasonably be
discerned.” Bowman Transp., 419 U.S. at 285-86 (citing SEC v.
Chenery Corp., 332 U.S. 194, 196 (1947); Colo. Interstate Gas
Co. v. FPC, 324 U.S. 581, 595 (1945).
On the present record, while the court has not reached
a final decision as to the reasonableness of Customs’ actions,
the Plaintiff has established sufficient likelihood of success
on the merits by raising “serious, substantial, difficult and
doubtful” questions about the reasonableness of Customs’
actions. See Timken, 6 CIT at 80, 569 F. Supp. at 70.
In making its enhanced bonding determination, Customs
primarily relies on an alleged deficiency in Plaintiff’s entry
documents. 	Specifically, Customs asserts that Plaintiff’s
documents included incomplete or discrepant phytosanitary
certificates. Def.’s Br, ECF No. 17, at 8-9; Edert Decl., ECF
No. 25-1, at A11 ¶ 8-11; Def.’s App. (Pilipavicius Decl.), ECF
No. 25-1 (“Pilipavicius Decl.”), at A15-A16 ¶¶ 6, 9-10; Def.’s
App. (Djeng Decl.), ECF No. 25-1 (“Djeng Decl.”), at A22-A24 ¶¶
3-9. 	According to Customs, the phytosanitary certificate is
issued by the Chinese government and acts as a “birth
certificate” of sorts for Plaintiff’s garlic: 	It is a reliable
way to know the identity of the producer, the facility in which
the garlic was produced, and when it was produced. Pilipavicius
Decl., ECF No. 25-1, at A15 ¶ 8; Djeng Decl., ECF No. 25-1, at
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 13 of 21

Court No. 14-00212 	Page 14
A23 ¶ 4. 	To Customs, flaws in the certificate suggest
fraudulent entry documents. Def.’s Br., ECF No. 17, at 26-27;
Edert Decl., ECF No. 25-1, at A11 ¶ 8-11; Pilipavicius Decl.,
ECF No. 25-1, at A16 ¶ 9-11.
However, Plaintiff has produced evidence that
indicates that the phytosanitary certificates provided by the
Chinese government are unreliable at best, being routinely
imperfect and incomplete. Tr. TRO Hr’g, ECF No. 40, at 37:5-8;
Add. Decl. of Shuzhang Li (Owner), ECF No. 12, at ¶ 4; Decl.
Zhao Zhenqing, ECF No. 31 (“Zhao Decl.”), at ¶¶ 5-6. 	Further,
even when complete, they do not provide the information Customs
expects: 	Phytosanitary certificates indicate storage location
and inspection site, not producer. Tr. TRO Hr’g, ECF No. 40, at
30:4-10, 35:24-36:9; Zhao Decl., ECF No. 31, at ¶¶ 2-4
(explaining that provenance data on phytosanitary certificates
is based on site of inspection (warehouse or factory), not the
companies that use the facility). 	If true, such evidentiary
unreliability could corrupt any rational connection between the
facts found (producer identity) and choices made (enhanced
bonding), rendering Customs’ reliance on the certificates
arbitrary and capricious. 	Moreover, if incomplete and
discrepant phytosanitary certificates are as pervasive as
Plaintiff would argue, see Tr. TRO Hr’g, ECF No. 40, at 36:4-9;
Zhao Decl., ECF No. 31, at ¶¶ 2-4; Attach. 1 to Zhao Decl., ECF
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 14 of 21

Court No. 14-00212 	Page 15
No. 31-1 (providing a sampling of incomplete and imperfect
phytosanitary certificates from various companies), it would be
discriminatory (i.e., arbitrary and capricious) for Customs to
single out Plaintiff for heightened bonding requirements on this
basis and not do the same for similarly situated companies with
comparably imperfect phytosanitary certificates.
Further, Plaintiff raises doubts about the secondary
“red flags” Customs relied upon in its enhanced bonding
determination. 	Specifically, Plaintiff’s sudden high volume of
garlic imports was not indicative of planned antidumping duty
fraud. 	See Edert Decl., ECF No 25-1, at A9-A10 ¶¶ 4, 7. 	Rather
the Plaintiff was acting on a perceived business opportunity
after an increase in the antidumping duty rates for other garlic
importers made importation of QTF-produced garlic financially
reasonable. See Tr. TRO Hr’g, ECF No. 40, at 39:1-14 (offering
market opportunity as a possible explanation); Li. Decl., ECF
No. 7-2 at Ex. 5, at ¶ 4 (explaining that QTF did not import
garlic until 2014 due to “business issues”); see also Djeng
Decl., ECF No 25-1, at A24 ¶¶ 8-9 (discussing the recent change
in antidumping rates for Plaintiff’s competitors). 	Moreover,
contrary to Customs’ allegations, QTF’s garlic shipments were
not too large for the time of year and their number of
employees, as it was the harvest season when there is an influx
of garlic on the market and workers work around the clock,
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 15 of 21

Court No. 14-00212 	Page 16
taking multiple shifts to process this garlic. Edert Decl., ECF
No 25-1, at A10 ¶ 7; Tr. TRO Hr’g, ECF No. 40, at 34:12-22. 	It
follows that Plaintiff has established that Customs, by failing
to consider important aspects of the problem before it, may have
offered an explanation for its decision that runs counter to the
evidence.
Plaintiff has also raised concerns about the adequacy
of the process accorded by Customs in requiring heightened
bonding, particularly the insufficiency of the Information
Notice, ECF No. 7-2 at Ex. 3, see Tr. TRO Hr’g, ECF No. 40, at
53:8-11, and Customs’ failure to provide a reasoned decision
(rendering it arbitrary and capricious). 	The present record
suggests Customs did not provide much, if any process outside
the generalized and terse statements in the Information Notice,
i.e., that heightened bonding was required “[d]ue to
discrepancies found with entry documents, concerns with bond
sufficiency[,] and the financial risk associated with the entry
of fresh garlic from the PRC.” Information Notice, ECF No. 7-2
at Ex. 3. 	Customs’ bond determinations are reviewable and
Customs is required to provide “sufficient information as to the
basis for the change [in bonding requirements] to allow it to be
challenged in court.” Hera Shipping, Inc. v. Carnes, 10 CIT 493,
496, 640 F. Supp. 266, 269 (1986); see Nat’l Fisheries Inst.,
Inc. v. U.S. Bureau of Customs & Border Prot., 33 CIT 1137,
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 16 of 21

Court No. 14-00212 	Page 17
1151-52, 637 F. Supp. 2d 1270, 1284-85 (2009). 	It is unclear,
based on the current record, whether Customs has done so here.
Accordingly, Plaintiff has raised serious and
substantial questions as to whether Customs’ decision to require
enhanced bonding was arbitrary and capricious, and these
questions are sufficient to establish a fair chance of success
of the merits.
III. 	The Balance of the Equities Favors the Plaintiff.
Before granting a preliminary injunction, the court
“must balance the competing claims of injury and must consider
the effect” that granting or denying relief will have on each
party. Winter, 555 U.S. at 24 (internal quotation marks and
citation omitted). 	Here, Plaintiff faces the immediate threat
of bankruptcy. 	In the absence of a preliminary injunction, he
will suffer the irreparable harms of loss of business and loss
of access to meaningful judicial review. 13 	Customs, meanwhile,
faces the possible loss of millions of dollars in revenue to the
United States, see Def.’s Br., ECF No. 16, at 31; 19 U.S.C.
§ 1623 (directing Customs to protect the revenue of the United
States), in an industry that has already posed significant
antidumping duty collection problems. Edert Decl., ECF No. 25-1,
at A9 ¶¶ 2-3; Pilipavicius Decl., ECF No. 25-1, at A14-A15 ¶¶ 3-
13 See discussion supra Section I.
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 17 of 21

Court No. 14-00212 	Page 18
4. 	If a preliminary injunction is granted, Customs must risk
that, even if it succeeds on the merits, it will not collect the
duties owed (given their sheer magnitude and resultant financial
impossibility for the Plaintiff). See Def.’s Br., ECF No. 17,
at 31-32; see also Queen’s Flowers, 20 CIT at 1128, 947 F. Supp.
at 508.
But the record reveals that Commerce has previously
determined that the Plaintiff’s producer/exporter is not subject
to the PRC-wide rate. Twelfth NSR, 73 Fed. Reg. at 56,552.
Accordingly, there is a possibility that enhanced bonding is
unnecessary and that there will be no harm to the revenue of the
United States. 	Moreover, Plaintiff’s exporter will be subject
to administrative review and collection of any actual
antidumping duties owed. 14 	It follows that the balance of the
equities favors the Plaintiff in that he faces imminent,
irreparable injury while Customs faces only possible, if
substantial, injury that is susceptible to both legal remedy and
14 “[T]he United States uses a ‘retrospective’ assessment system
under which final liability for antidumping and countervailing
duties is determined after merchandise is imported.” 19 C.F.R. §
351.212. 	At entry, importers make a cash deposit of the
estimated antidumping duties, id. at 351.211(b)(2), but if, as
here, the antidumping duty rate is challenged by an interested
party, the final antidumping duty rate (and thus amount owed)
will be assessed pursuant to an administrative review, id. at
§§ 351.213, 351.211(b)(1), or, if appealed to this Court,
assessed according to the final decision in the action.
19 U.S.C. § 1516a(e)(2).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 18 of 21

Court No. 14-00212 	Page 19
present mitigation (through requiring future cash deposits from
the Plaintiff, thereby limiting Customs’ exposure for unpaid
duties and through requiring that a bond be filed with the
court). 15
IV. 	The Public Interest will be Served by Granting the
Plaintiff a Preliminary Injunction.
The court “should pay particular regard for the public
consequences” when “employing the extraordinary remedy of
injunction.” Winter, 555 U.S. at 24 (quoting Weinberger v.
Romero-Barcelo, 456 U.S. 305, 312 (1982)). 	While Customs has a
public interest in protecting the revenue of the United States,
there is also a strong public interest in the proper execution
of and compliance with the law. 19 U.S.C. §§ 66, 1623. 	The
public interest is served by the accurate and effective, uniform
and fair enforcement of trade laws. Union Steel v. United
States, 33 CIT 614, 622, 617 F. Supp. 2d 1373, 1381 (2009);
Ceramica Regiomontana, S.A. v. United States, 7 CIT 390, 397,
590 F. Supp. 1260, 1265 (1984). 	While “maintaining a maximum
level of security for the unliquidated entries would serve
broadly the public interest of revenue collection,” this cannot
be done “at the cost of continuing to subject [a plaintiff] to
an unlawful, and discriminatory bonding requirement.” Nat’l
15 See Queen’s Flowers, 20 CIT at 1128, 947 F. Supp. at 508
(similarly favoring movant in balance of the equities).
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 19 of 21

Court No. 14-00212 	Page 20
Fisheries Inst., Inc. v. U.S. Bureau of Customs & Border Prot.,
__ CIT __, 751 F. Supp. 2d 1318, 1325 (2010). 	Preserving
Plaintiff’s access to meaningful judicial review, a public
interest in itself, protects against unchecked and unchallenged
enforcement by preserving Plaintiff’s opportunity to litigate a
potentially meritorious claim. See Ugine-Savoie Imphy v. United
States, 24 CIT 1246, 1252, 121 F. Supp. 2d 684, 690 (2000);
Queen’s Flowers, 20 CIT at 1127, 947 F. Supp. at 508.
Accordingly, the public interest will be served by granting the
Plaintiff a preliminary injunction.
CONCLUSION
Plaintiff has demonstrated entitlement to a
preliminary injunction against Customs’ requirement of enhanced
bonding at the PRC-wide rate. 	Accordingly, Plaintiff’s motion
is GRANTED, and it is hereby
ORDERED that Defendant, its officers, delegates,
agents, servants, and employees, are enjoined for the pendency
of this litigation, including all relevant appeals and remands,
until such time as a final court decision is rendered within the
meaning of 19 U.S.C. § 1516a(e), from imposing single
transaction bond requirements on the entries by Plaintiff, Kwo
Lee, Inc., of garlic from the PRC exported by QTF as listed in
Appendix A to the TRO, ECF No. 35 (“subject entries”); it is
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 20 of 21

Court No. 14-00212 	Page 21
further
ORDERED that Defendant, its officers, delegates,
agents, servants, and employees, shall immediately rescind all
single transaction bond requirements imposed on the subject
entries; it is further
ORDERED that Plaintiff shall continue to provide
security in the amount of one million dollars ($1,000,000.00),
as required by the TRO, to indemnify the costs or damages of a
finding that the Defendant has been wrongfully enjoined or
restrained as a result of this preliminary injunction; it is
further
ORDERED that the TRO entered on October 2, 2014,
ECF Nos. 35 & 36, is vacated; and it is further
ORDERED that the joint status report and briefing
schedule for this action shall be filed with the court by
November 7, 2014.
/s/ Donald C. Pogue
Donald C. Pogue, Senior Judge
Dated: October 16, 2014
New York, NY
Case 1:14-cv-00212-DCP Document 45 Filed 10/21/14 Page 21 of 21