2005-1550 | Omnilex

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United States Court of Appeals for the Federal Circuit
05-1550
UGINE AND ALZ BELGIUM, ARCELOR STAINLESS USA, LLC,
and ARCELOR TRADING USA, LLC,
Plaintiffs-Appellants,
v.
UNITED STATES,
Defendant-Appellee,
and
ALLEGHENY LUDLUM, AK STEEL CORP.,
BUTLER ARMCO INDEPENDENT UNION, UNITED STEELWORKERS OF AMERICA,
AFL-CIO/CLC, and ZANESVILLE ARMCO INDEPENDENT ORGANIZATION,
Defendants-Appellees.
Wendy E. Ackerman, Shearman & Sterling LLP, of Washington, DC, argued for
plaintiffs-appellants. With her on the brief were Stephen J. Marzen, Robert S. LaRussa,
Jonathan R. DeFosse, and Ryan A. T. Trapani.
Michael D. Panzera, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-appellee
United States. With him on the brief were Peter D. Keisler, Assistant Attorney General;
David M. Cohen, Director; and Patricia M. McCarthy, Assistant Director. Of counsel on
the brief were Ada L. Loo and Arthur Sidney, Attorneys International, Office of Chief
Counsel for Import Administration, United States Department of Commerce, of
Washington, DC; and Christopher Chen, Attorney, United States Customs and Border
Protection, of Washington, DC.
Adam H. Gordon, Collier Shannon Scott, PLLC, of Washington, DC, argued for
defendants-appellees Allegheny Ludlum, et al. With him on the brief were R Alan
Luberda and David A. Hartquist.
Charles H. Bayar, of Scarsdale, New York, for amicus curiae.
Appealed from: United States Court of International Trade
Senior Judge Thomas J. Aquilino, Jr.

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I
Arcelor imports stainless steel plate in coils (“SSPC”). In 1998, Commerce
initiated antidumping and countervailing duty investigations of SSPC from Belgium. The
investigations resulted in the entry of antidumping and countervailing duty orders on
Belgian SSPC. Between September 4, 1998, and April 30, 2002, Arcelor imported
SSPC for which it declared the country of origin to be Belgium.
Arcelor thereafter determined that it had mistakenly declared Belgium to be the
country of origin of its SSPC, whereas it should have declared the country of origin to be
Germany. Realizing its mistake, Arcelor filed disclosures and timely protests with
Customs under 19 U.S.C. § 1514 to correct the country of origin designation.
During the fourth administrative review of the antidumping order, Arcelor
represented that the SSPC that it had imported during the fourth period of review was
from Germany. Based on that representation, Commerce determined that Arcelor’s
entries during that fourth period of review were not subject to the antidumping duty
order on SSPC from Belgium. Commerce explained:
For merchandise hot-rolled in Germany, then pickled and annealed in
Belgium, the question for purposes of country of origin is whether the
process at issue constitutes substantial transformation. In this case, we
determine that because hot rolling constitutes substantial transformation,
the country of origin of [Arcelor’s] merchandise which is hot-rolled in
Germany, and not further cold-rolled in Belgium, is Germany.
Commerce issued draft liquidation instructions and subsequently responded to
comments from the parties. In its response, Commerce explained that its antidumping
calculations for the fourth administrative review did not include Arcelor’s sales of
German SSPC. Commerce also stated that during the fourth administrative review
“neither the Petitioners nor the Respondent raised this country of origin issue with

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respect to any specific sales reviewed during prior administrative reviews of this order or
the effect of the country of origin decision on unliquidated entries from prior closed
reviews.” Commerce therefore ruled that Arcelor’s country-of-origin representation
would apply to entries covered by the fourth review and future entries, i.e., to entries
made on or after May 1, 2002, but not to entries made prior to that date.
Commerce then issued liquidation instructions, directing Customs to liquidate
entries that had been the subject of the fourth administrative review “without regard to
antidumping duties.” Commerce further instructed Customs to liquidate prior Arcelor
entries at the respective antidumping and countervailing duty rates for imports from
Belgium, even if those entries were in fact hot-rolled in Germany and not further cold-
rolled in Belgium.
Arcelor filed administrative protests with Customs for those entries that had
already been liquidated. With respect to the entries that had not yet been liquidated,
Arcelor filed a complaint in the Court of International Trade challenging Commerce’s
liquidation instructions. Arcelor requested, and was granted, a temporary restraining
order. It then sought a preliminary injunction to prevent Customs from liquidating any of
Arcelor’s remaining unliquidated entries while the court considered the case. Both the
government and the appellees, representing the domestic industry, consented to the
entry of a preliminary injunction. The court, however, denied Arcelor’s motion and
refused to grant an injunction.
In its order denying the injunction, the court rejected Arcelor’s argument that it
would suffer irreparable harm from the denial of preliminary injunctive relief. In
response to Arcelor’s contention that liquidation by Customs would render its cause of

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action moot and thus deprive Arcelor of its right to judicial review, the court stated that
“jurisdiction of the court is not necessarily in jeopardy” because “the plaintiffs claim to
have filed timely protests with Customs pursuant to 19 U.S.C. § 1514 which, one could
assume, provide them with some current protective comfort.” The court also cited
Xerox Corp. v. United States, 289 F.3d 792, 795 (Fed. Cir. 2002), for the proposition
that, for entries yet to be liquidated, “misapplication of an antidumping order or the
erroneous imposition of antidumping duties by Customs may be protested and suit
brought before the court pursuant to § 1581(a).” For that reason, the court stated, “it [is]
now difficult to conclude that plaintiffs’ procedural posture herein amounts to
unequivocal irreparable harm.”
In addition, the trial court concluded that Arcelor was not likely to succeed on the
merits. Arcelor had contended that because the entries at issue were not yet liquidated,
the principle of administrative finality did not prevent Arcelor from correcting the country
of origin. Arcelor asserted that its argument in that regard is supported by the decision
in Timken Co. v. United States, 972 F. Supp. 702 (Ct. Int’l Trade 1997), aff’d sub nom.
Koyo Seiko Co. v. United States, 155 F.3d 574 (Fed. Cir. 1998) (table). The trial court,
however, concluded that the Timken case did not support Arcelor’s position and that a
later order of the Court of International Trade in Torrington Co. v. United States, 24 Ct.
Int’l Trade 306 (2000), stood for the opposite proposition. According to the trial court,
the Torrington case established that the principle of administrative finality precludes
applying a scope determination to unliquidated entries covered by an administrative
review that was already closed when the scope issue was first raised. Based on its

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conclusion that Arcelor had failed to make a persuasive case of irreparable harm or
likelihood of success on the merits, the trial court denied the preliminary injunction.
II
In deciding whether to grant or deny a motion for a preliminary injunction, the
court must consider the following four factors:
1) that the movant is likely to succeed on the merits at trial; 2) that it will
suffer irreparable harm if preliminary relief is not granted; 3) that the
balance of the hardships tips in the movant's favor; and 4) that a
preliminary injunction will not be contrary to the public interest.
U.S. Ass’n of Importers of Textiles & Apparel v. U.S. Dep’t of Commerce, 413 F.3d
1344, 1346 (Fed. Cir. 2005). Whether to grant a preliminary injunction is a matter within
the trial court’s discretion. Asociacion Colombiana de Exportadores de Flores v. United
States, 916 F.2d 1571, 1578 (Fed. Cir. 1990).
In international trade cases, the Court of International Trade is authorized to
grant preliminary injunctions barring liquidation in order to preserve the importer’s right
to challenge the assessed duties. See Yancheng Baolong Biochemical Prods. Co., Ltd.
v. United States, 406 F.3d 1377, 1380-81 (Fed. Cir. 2005); Zenith Radio Corp. v. United
States, 710 F.2d 806, 809-11 (Fed. Cir. 1983); 19 U.S.C. § 1516a(c)(2). In such cases,
we have held that when a court considers whether to grant or deny a preliminary
injunction, “[n]o one factor, taken individually, is necessarily dispositive,” because “the
weakness of the showing regarding one factor may be overborne by the strength of the
others.” FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993). Moreover, as
the Court of International Trade has explained, the “greater the potential harm to the
plaintiff, the lesser the burden on Plaintiffs to make the required showing of likelihood of
success on the merits.” SKF USA Inc. v. United States, 316 F. Supp. 2d 1322, 1329

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(Ct. Int’l Trade 2004); see also Ugine-Savoie Imphy v. United States, 121 F. Supp. 2d
684, 689 (Ct. Int’l Trade 2000) (“Where it is clear that the moving party will suffer
substantially greater harm by the denial of the preliminary injunction than the non-
moving party would by its grant, it will ordinarily be sufficient that the movant has raised
‘serious, substantial, difficult and doubtful’ questions that are the proper subject of
litigation.”); Corus Group PLC v. Bush, 217 F. Supp. 2d 1347, 1353-54 (Ct Int’l Trade
2002) (“In reviewing the factors, the court employs a ‘sliding scale.’ Consequently, the
factors do not necessarily carry equal weight. The crucial factor is irreparable injury.”).
On appeal, Arcelor first challenges the trial court’s conclusion that Arcelor did not
show that it was likely to succeed on the merits of its claim. Specifically, Arcelor
disputes the government’s contention, alluded to by the trial court, that the Timken case
requires Commerce to “apply [a] scope determination only as far back as the principle of
administrative finality warrants” and “that the principle of administrative finality prohibits
Arcelor from reopening the record of the three previous reviews to apply the later-
determined country of origin retroactively.” Arcelor contends that it is entitled to correct
its country-of-origin designations for entries that have not been liquidated because,
according to Arcelor, the application of a scope determination to entries that have not
yet been liquidated does not constitute a reopening of closed proceedings.
In the cited Timken case, Commerce sought to apply a scope determination in an
antidumping proceeding only to entries pertaining to proceedings initiated, but not
completed, prior to the date of the scope determination. The Court of International
Trade agreed that Commerce was not required to apply its scope determination
retroactively to entries all the way back to the beginning of the first period of review.

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However, the court ruled that the scope determination should apply to all entries not yet
liquidated, even those from an earlier period of review. The court therefore remanded
the case to Commerce for further proceedings with respect to the unliquidated entries.
The court added, however, that the remand “should in no way be construed as a re-
opening or re-review of closed proceedings, as it solely encompasses [entries] not yet
liquidated.” 972 F. Supp. at 704. Arcelor argues that in light of the analysis in Timken,
Commerce must treat all unliquidated entries of SSPC (from whatever period of review)
as German, not Belgian, and that the trial court was therefore wrong to hold that Arcelor
was unlikely to succeed on the merits of its claim.
In rejecting Arcelor’s argument, Commerce relied not on Timken, but on a
subsequent administrative proceeding in the Torrington case on which the trial court
relied. See Final Results of Redetermination on Remand Final Scope Ruling—
Antidumping Duty Order on Cylindrical Roller Bearings and Parts Thereof from Japan—
Regarding a Certain Cylindrical Roller Bearing Produced by Koyo Seiko Co., Ltd., and
Imported by Koyo Corporation of U.S.A., available at http://ia.ita.doc.gov/remands/98-
09-02903.htm. In that administrative proceeding, Commerce construed Timken as
permitting Commerce to apply a scope determination “only as far back as the principle
of administrative finality permits.” Commerce interpreted that term to mean that the
scope determination should be applied “back to the first administrative review period
open at the time the scope issue was first raised,” and to “the subsequent administrative
review periods.” The Court of International Trade affirmed that decision by Commerce
in a summary order, without discussion, in the order cited by the trial court. Torrington
Co. v. United States, 24 Ct. Int’l Trade 306 (2000).

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In this case, Commerce relied on the Torrington administrative proceedings to
define the operation of the principle of administrative finality as applied to unliquidated
entries from a closed period of review. Commerce concluded that Arcelor’s country-of-
origin designations were applicable only to entries in the fourth administrative review
period and later. The fact that entries from earlier administrative review periods were
still unliquidated was not, according to Commerce, sufficient to warrant treating those
entries in the same fashion as entries during the fourth administrative review period and
later.
The trial court seems to have accepted Commerce’s interpretation of the Timken
and Torrington cases, referring to the Torrington case as a “further refinement of the
import of subsequent rulings as to the precise scope of an antidumping or
countervailing-duty order.” Based at least in part on that characterization of Torrington,
the trial court concluded that Arcelor had failed to show that it was likely to succeed on
its claim that, under Timken, the corrected country-of-origin designations should be
applied to all unliquidated entries, regardless of when they may have been imported.
The government and the domestic industry representatives argue that the trial
court was correct to view the Torrington case as stating the governing rule for
proceedings such as this one—that the principle of administrative finality does not
permit reopening of antidumping and countervailing duty determinations for a closed
period of review, even for unliquidated entries. However, we are not prepared to
conclude, in this interlocutory setting, that Commerce’s administrative proceeding or the
trial court’s summary order in Torrington establishes the governing law for cases such
as this one.

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On review of the denial of a preliminary injunction, our judgment as to the merits
of the plaintiff’s case is necessarily tentative. See Univ. of Tex. v. Camenisch, 451 U.S.
390, 395 (1981) (“[T]he findings of fact and conclusions of law made by a court granting
a preliminary injunction are not binding at trial on the merits [and] it is generally
inappropriate for a federal court at the preliminary-injunction stage to give a final
judgment on the merits.”); Purdue Pharma L.P. v. Boehringer Ingelheim GmbH, 237
F.3d 1359, 1363 (Fed. Cir. 2001) (“all findings of fact and conclusions of law at the
preliminary injunction stage are subject to change”). If we were confident of the
correctness of the agency’s analysis of the “administrative finality” issue, we would be
prepared to agree with the trial court that the likelihood of Arcelor’s succeeding on the
merits is sufficiently low that denial of preliminary injunctive relief would be called for,
even if the consequence of denying an injunction would be to render Arcelor’s claim
moot before it could be finally decided. However, while the trial court’s decision as to
administrative finality may ultimately be sustained, we are not persuaded that the matter
is so clear-cut as to warrant disposing of this appeal based on Arcelor’s failure to show
a likelihood of success. Accordingly, we look also to factors other than the likelihood of
success in determining whether a preliminary injunction should have been granted.
With respect to the balance of hardships, the trial court found in favor of Arcelor,
explaining that “whatever harm is actually at bar . . . weighs more on the plaintiffs”
because the “government holds cash deposits” and the “interested parties are fully
secured.” With respect to the public interest, the trial court stated simply that “it is not
clear from the record . . . that the public’s interest compels entry now of a preliminary
injunction in favor of the plaintiffs.” The court thus did not find any strong public interest

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cutting in favor of denying injunctive relief. Accordingly, the balance of hardships and
public interest factors either weigh in favor of Arcelor or are essentially neutral. We
therefore turn to the issue of irreparable harm.
Before the trial court, Arcelor argued that it would suffer irreparable harm in the
absence of a preliminary injunction because liquidation of the relevant entries would
deprive Arcelor of its right to judicial review. Arcelor argued that liquidation during the
course of litigation would render the case moot and thus negate any opportunity for
Arcelor to challenge Commerce’s actions. See Zenith Radio Corp. v. United States,
710 F.2d 806, 810 (Fed. Cir. 1983) (concluding that “the consequences of liquidation do
constitute irreparable injury” because Section 516A of the Trade Agreements Act
“permits liquidation in accordance with a favorable decision of the trial court . . . only on
merchandise entered after the court decision is published or on entries ‘the liquidation of
which was enjoined’”).
The trial court responded that “jurisdiction of the court is not necessarily in
jeopardy,” because Arcelor’s timely filed protests under 19 U.S.C. § 1514 might “provide
them with some current protective comfort.” Section 1514, however, relates only to
protests of Customs decisions for liquidated entries, see 19 U.S.C. § 1514 (entitled
“Protest against Decisions of the Customs Service”). It does not provide a basis for an
importer to challenge the lawfulness of a liquidation instruction of the Department of
Commerce, as opposed to the lawfulness of an action of Customs. When the importer
is challenging instructions given by Commerce, as in this case, this court in Zenith has
held that “[o]nce liquidation occurs, a subsequent decision by the trial court on the
merits . . . can have no effect on the dumping duties assessed.” 710 F.2d at 810.

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The trial court referred to this court’s decision in Xerox Corp. v. United States,
289 F.3d 792 (Fed. Cir. 2002), and reasoned that Arcelor might bring suit under 28
U.S.C. § 1581(a) for “misapplication of an antidumping order or the erroneous
imposition of antidumping duties by Customs.” As noted by both Arcelor and the
domestic industry representatives, however, Xerox is inapplicable to the circumstances
presented here because Xerox involved a “ministerial error [by Customs] in
administering [Commerce’s] order,” 289 F.3d at 793, whereas Arcelor is challenging
Commerce’s liquidation instructions themselves. Thus, for Arcelor to be assured of a
judicial remedy, Xerox would have to be extended to include challenges to liquidation
instructions given by Commerce. Yet, as we have noted, the actions of Commerce and
the actions of Customs are distinct for purposes of review, see Mitsubishi Elecs. Am.,
Inc. v. United States, 44 F.3d 973, 977 (“Customs merely follows Commerce’s
instructions in assessing and collecting duties. . . . Customs has a merely ministerial
role in liquidating antidumping duties.”), and Xerox applies to challenges to actions by
Customs in applying Commerce’s instructions, not to challenges to the instructions
themselves.
The domestic industry representatives point out, and Arcelor acknowledges, that
this court has held that reliquidation of entries is available “in actions brought under the
[Administrative Procedure Act] seeking corrected instructions pursuant to section
1675(a)(2)(C).” See Shinyei Corp. of Am. v. United States, 355 F.3d 1297, 1312 (Fed.
Cir. 2004). It is unclear, however, whether the rule of Shinyei would apply to a case
such as this one. In that case, the importer, Shinyei, complained that Commerce’s
instructions were inconsistent with rates set forth in the “amended review” that allegedly

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covered Shinyei’s entries. The Court of International Trade found that “liquidation of the
subject entries mooted Shinyei’s cause of action,” and it dismissed the complaint for
lack of subject matter jurisdiction. Id. at 1299. This court reversed. We stated that 28
U.S.C. § 1581(i) provides the trial court with jurisdiction in such a case, because “an
action challenging Commerce’s liquidation instructions is not a challenge to the final
results, but a challenge to the ‘administration and enforcement’ of those final results,”
and thus falls squarely within 28 U.S.C. § 1581(i)(4). Shinyei, 355 F.3d at 1305 (quoting
Consol. Bearings Co. v. United States, 348 F.3d 997, 1002 (Fed. Cir. 2003)). In
addition, we explained that our ruling in Zenith was not applicable to Shinyei’s cause of
action because “liquidation instructions . . . are not ‘determinations’ under section 1675,
and are thus not reviewable under section 516A.” Id. at 1309.
At first blush, Shinyei appears to provide Arcelor with an avenue for seeking a
judicial remedy even if liquidation occurs, because Arcelor, like Shinyei, challenges only
Commerce’s liquidation instructions. Yet in Shinyei we noted that Shinyei’s complaint
alleged a violation of 19 U.S.C. § 1675(a)(2)(C), which provides that the determination
resulting from a particular administrative review “shall be the basis for the assessment
of countervailing or antidumping duties on entries of merchandise covered by the
determination.” We thus focused on the fact that Shinyei was complaining that
Commerce’s instructions for Shinyei’s entries did not reflect the results of the
administrative review that covered those entries. See Shinyei, 355 F.3d at 1306; see
also id. at 1299, 1309, 1312. Arcelor makes a different argument. In its complaint,
Arcelor did not cite section 1675(a)(2)(C), but instead contended that Commerce’s
instructions for entries imported prior to the fourth administrative review are inconsistent

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with Commerce’s determination in the subsequent fourth administrative review.
Arcelor’s challenge to Commerce’s instructions can thus be distinguished from the
challenge at issue in Shinyei. The difference between the two cases—and the
possibility that Shinyei will not be interpreted to encompass the sort of claim at issue
here—raises doubt whether Arcelor will have the opportunity to obtain reliquidation once
its entries are liquidated, even if it is ultimately found to have a strong case on the
merits.
The trial court did not address the question whether Shinyei would provide
Arcelor with a procedural vehicle for litigating the merits of its claims, and Arcelor did not
address that issue in its opening brief. The government, both in its brief and at oral
argument, was unwilling to take a position on that issue. The possibility thus arises that
Arcelor could be denied a preliminary injunction to bar liquidation of its entries, only to
be met at a later stage with a government argument that its claim has been rendered
moot because Shinyei does not permit review of a reliquidation request under the
circumstances of this case. Moreover, as has been made clear by the intervening
decision of the Court of International Trade in Mukand International, Inc. v. United
States, 412 F. Supp. 2d 1312 (2005), the question of the scope of Shinyei is a difficult
one, for which the resolution is not obvious. In sum, it is not clear at this juncture that
Shinyei would provide an adequate vehicle for Arcelor to litigate its claims before the
Court of International Trade. Rather than deciding the scope of Shinyei in a preliminary
injunction context, without a decision by the trial court or briefing by two of the three
parties, we conclude that the issue is sufficiently complex that we should resolve it only
in a setting in which it has been litigated by the parties and decided by the trial court.

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Because we conclude that the denial of a preliminary injunction could result in
denying Arcelor its opportunity for a decision on the merits of its claim regarding the
duties for merchandise imported before May 1, 2002, we hold that Arcelor has made a
strong showing of irreparable harm. Based on that showing, we conclude that Arcelor is
entitled to a preliminary injunction to maintain the status quo pending the disposition of
Arcelor’s claims regarding the merchandise imported before May 2002. See Univ. of
Tex. v. Camenisch, 451 U.S. at 395 (“[T]he purpose of a preliminary injunction is to
preserve the relative positions of the parties until a trial on the merits can be held.”).
Weighing heavily in our consideration is the fact that all parties consented to entry of a
preliminary injunction prior to the trial court’s ruling (although we do not hold that the
trial court was required to grant a preliminary injunction just because the parties
consented to one). We therefore conclude that the proper course of action under these
circumstances is to reverse the trial court’s order and remand for entry of a preliminary
injunction and for further proceedings on the merits.
Each party shall bear its own costs for this appeal.
REVERSED and REMANDED.

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UGINE AND ALZ BELGIUM, ARCELOR STAINLESS USA, LLC, and ARCELOR TRADING USA, LLC v. United States

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