HQ 224650 - Protest 2002-92-101740; Antidumping Duties; Effective Date of Public Law 94-410, section 209(a); "Absurd Consequences" Doctrine of Statutory Interpretation; Laches; 19 U.S.C. 1514 - United States International Trade Commision Rulings

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HQ 224650

November 25, 1994

LIQ-4-01-CO:R:C:E 224650 PH

CATEGORY: LIQUIDATION

District Director of Customs
423 Canal Street
New Orleans, Louisiana 70130

RE: Protest 2002-92-101740; Antidumping Duties; Effective Date of Public Law 94-410, section 209(a); "Absurd Consequences" Doctrine of Statutory Interpretation; Laches; 19 U.S.C. 1514

Dear Sir:

The above-referenced protest was forwarded to this office for further review. At the request of the protestant, action on the protest was suspended to given the protestant the opportunity to submit additional materials. Also at the request of the protestant, a meeting was held on October 14, 1994, between officials of this office and the representative of the protestant. At that meeting it was agreed that the protestant would be given 30 days from the date of the meeting to submit additional materials, after which the protest would be analyzed and ruled upon based on the materials/arguments then available. No additional materials were submitted after this meeting. Copies of all materials submitted by the protestant which you may not have are enclosed for your file.

Our decision follows.

FACTS:

According to the file and Customs records, between December of 1973 and May of 1974, the protestant entered certain merchandise (DL Methionine) from Japan. The merchandise was entered in four entries, which are the entries protested in this protest. The merchandise under consideration was the subject of an antidumping finding (Treasury Decision (T.D.) 73-188). T.D. 73-188 made public determinations constituting a finding of dumping with respect to synthetic methionine from Japan and added that finding of dumping to the list of dumping findings in 19 CFR 153.43. Previous notices in the Federal Register had given notice of an antidumping proceeding (37 F.R. 17768, August 31, 1972); notice of withholding of appraisement (38 F.R. 4525, February 15, 1973); notice of investigation and hearing (38 F.R. 5212, February 26, 1973; 38 F.R. 6242, March 7, 1973); and notice of determination of injury (38 F.R. 13065, May 18, 1973).

In a March 28, 1980, Federal Register notice (45 F.R. 20511), the International Trade Administration (ITA) of the Department of Commerce gave notice that it was conducting an administrative review of findings of dumping, including the finding of dumping in T.D. 73-188. In an August 13, 1981, Federal Register notice (46 F.R. 40913), the ITA gave notice that it had conducted an administrative review of the dumping finding under consideration covering "separate time periods for each of the firms through June 30, 1980." For the firm under consideration during the period "2/12/73-6/30/80" the dumping margin of 48% was found to exist. In the notice it was stated that Customs shall assess dumping duties on all entries made with purchase dates or export dates, as appropriate, during the time periods involved and that the ITA would issue appraisement instructions separately on each exporter directly to Customs.

In Customs Information Exchange (C.I.E.) 394/72, Supplement 36, dated March 5, 1982, notification of specific action for the merchandise under consideration exported by the corporation under consideration was published. According to this C.I.E., all shipments of the merchandise exported to the United States by the corporation and purchased during the period February 12, 1973, through June 30, 1980, were to be assessed a dumping liability equal to 48 percent. Also according to the C.I.E., liquidation of the subject entries was to be suspended. The C.I.E. required the filing of a "reimbursement statement", and provided that each entry on which duty was to be assessed must be covered by such a statement prior to appraisement and liquidation. In Telex 06815, dated April 6, 1982, instructions were issued stating "this telex constitutes the lifting of suspension of liquidation (as of April 12, 1982) for all entries of synthetic DL methionine with purchase or export dates, as appropriate, included in the time periods in 2 above [2/12/73-06/30/80 for the corporation under consideration]."

Each of the four protested entries was liquidated on September 25, 1992, with anti-dumping duties in the total amount of $48,617. A "reimbursement statement" (see above), dated August 18, 1992, had been sent to the Customs office which liquidated the protested entries and is included in the file.

On December 22, 1992, the protestant filed the protest under consideration. The basis for the protest was stated to be: "Excessive dumping duties were illegally assessed on the DL Methionine in the subject four entries. The statement of claims and argument are attached hereto, which establish that the subject entries should be liquidated 'as entered.'"

In a Memorandum in Support of Application for Further Review, the protestant contends that the assessment of dumping duties on the DL Methionine in the protested entries was void because the entries should have been deemed liquidated with the duty rate assessments required to be made as at the time of entry. The protestant also claims that the assessments were in violation of the instructions issued by Customs in T.D. 73-188 and by the International Trade Administration in 1982. The protestant contends that the delays involved in this case "demonstrate administrative laches and nonfeasance that negate the purported liquidations [since] [m]ore than six years elapsed from entry to the review begun in 1981 ... and more than ten additional years went by before the instructions of April 1982 were followed."

The protestant cites Ambassador Division of Florsheim Shoe v. United States, 3 Fed. Cir. (T) 28, 748 F. 2d 1560 (1984); Rector, Etc., of Church of the Holy Trinity v. United States, 143 U.S. 457, 12 S. Ct. 511 (1892); and Pagoda Trading Corp., v. United States, 5 Fed. Cir. (T) 10, 804 F. 2d 665 (1986). Based on these cases, the protestant argues that under the "absurd consequences" doctrine in the Church of the Holy Trinity case, "it would demonstrably be an erroneous construction to conclude that Congress intended to leave all entries made prior to the effective date of that provision [i.e., 19 U.S.C. 1504(d)] open to perpetual ambiguity and uncertainty."

In a Supplement to the Memorandum in Support of Application for Further Review, repeats the arguments made in the Memorandum in Support of Application for Further Review. The protestant makes the additional argument that "[t]he excessive administrative delay here, a genuine paradigm of laches, even more dramatically [i.e., than in Pagoda Trading Corp, supra] abuses the due process rights of this importer. The protestant cites American Permac, Inc. v. United States, 10 CIT 535, 642 F. Supp. 1187 (1986), and argues that in this case the importer does not have available to it the remedies described in that case. The protestant concludes: "If the absurd consequences of sanctioning delays of 18 and 19 years is not to be imputed as intended by Congress, in the face of [19 U.S.C. 1504(d)], this protest should be allowed."

Further review was requested and granted.

ISSUE:

May the protest in this case be granted?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed (i.e., within 90 days of the date of liquidation; see 19 U.S.C. 1514(c)(2)). The decisions protested are protestable under 19 U.S.C. 1514 (the exception in 19 U.S.C. 1514(b) (see, Nichimen America, Inc. v. United States, 938 F. 2d 1286 (1991 Fed. Cir.)) is not applicable because Customs implementation of the ITA instructions for assessing antidumping duties is protested, not the antidumping determination itself).

In regard to the contention that the dumping duties were assessed in violation of the instructions issued by Customs in T.D. 73-188 (published in the Federal Register on July 10, 1973 (38 F.R. 18382)) and by the International Trade Administration in 1982, the protestant has not provided any evidence to establish this contention. In each of the entries under consideration, the antidumping duties assessed were equal to 48 percent. This was the dumping margin found to exist by the ITA for the merchandise under consideration for the corporation under consideration and instructed to be applied to shipments of merchandise during the period covering the entries under consideration. Thus, based on the evidence available to us, dumping duties were assessed in accordance with the applicable instructions. The protest must be DENIED in this regard.

The protestant also contends that the entry should have been deemed liquidated as entered. The protestant cites 19 U.S.C. 1504(d) in this regard. At the time of the liquidation under consideration, that provision provided that for merchandise the liquidation of which continues, at the expiration of four years from the date of entry, to be suspended as required by statute or court order, the entry shall be liquidated within 90 days after the suspension of liquidation is removed (the provision has since been amended by section 641, Title VI, NAFTA Implementation Act, Public Law 103-182, 107 Stat. 2057, 2204). The "deemed liquidation" provisions were enacted by Public Law 94-410, section 209(a), 92 Stat. 902. These provisions were made effective "to the entry or withdrawal of merchandise for consumption on or after 180 days after the enactment of this Act [October 3, 1978]" (Section 209(b), Pub.L. 95-410). See F.W. Myers & Co., Inc. v. United States, 9 CIT 64, 607 F. Supp. 1470 (1985); and Peugeot Motors of America, Inc. v. United States, 8 CIT 167, 595 F. Supp. 1154 (1984), applying this effective date to section 1504.

In the F.W. Myers case merchandise was entered in 1975 and 1976 and liquidated in 1983. In response to the plaintiff's arguments that the "deemed liquidation" provisions of section 1504 applied to the entries on the basis of the legislative history thereof, the Court stated:

Resort to legislative history, however, is unwarranted where a statute is unambiguous on its face. ... As this Court previously noted, entries made prior to the effective date of the statute are not subject to the time constraints of 19 U.S.C. ? 1504. ... The entries involved herein were made well before the effective date of the statute, in this case, April 1, 1979. The requirements of 19 U.S.C. ? 1504 do not apply to entries made prior to that date. A plain reading of the involved provisions discloses no mention of their retroactive application, as asserted by plaintiff. [9 CIT at 64]

The protestant attempts to circumvent the fact that the "deemed liquidation" provision was not effective to the entries under consideration (i.e., the statute was made effective to the entry or withdrawal of merchandise for consumption on or after April 1, 1979, and the merchandise under consideration was entered in 1973 and 1974) by use of the "absurd consequences" doctrine. That is, the protestant contends that it would be absurd "to conclude that Congress intended to leave all entries made prior to the effective date ... open to perpetual ambiguity and uncertainty."

The protestant cites Church of the Holy Trinity, supra, and Ambassador Division of Florsheim Shoe, supra, in this regard. The latter case cited the former as "[a] classic case, still often cited" for the application of this doctrine, and described the doctrine as follows, quoting from Church of the Holy Trinity:

It is a familiar rule, that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers. [3 Fed. Cir. (T) at 32, quoting from 143 U.S. at 459]

Subsequent to the Church of the Holy Trinity decision, the Supreme Court addressed the doctrine in Crooks v. Harrelson, 282 U.S. 55, 60, 51 S. Ct. 49, 50 (1930). In the Crooks case, the Supreme Court stated:

... a consideration of what is there [i.e., in Church of the Holy Trinity] said will disclose that the principle is to be applied to override the literal terms of a statute only under rare and exceptional circumstances. The illustrative cases cited in the opinion demonstrate that, to justify a departure from the letter of the law upon that ground, the absurdity must be so gross as to shock the general moral or common sense. ... And there must be something to make plain the intent of Congress that the letter of the statute is not to prevail. [See also, Sturges v. Crowninshield, 4 Wheat. 122, 202-203 (1819), "But if, in any case, the plain meaning of a provision, not contradicted by any other provision in the same instrument, is to be disregarded, because we believe the framers of that instrument could not intend what they say, it must be one in which the absurdity and injustice of applying the provision to the case, would be so monstrous, that all mankind would, without hesitation, unite in rejecting the application"; and Tennessee Valley Authority v. Hill, 437 U.S. 153, 98 S. Ct. 2279 (1978); De Ruiz v. De Ruiz, 88 F. 2d 752, 754 (D.C. Cir. 1936); Hart v. United States, 585 F. 2d 1025, 1033 (Ct. Cl. 1978).]

Clearly, in this case, there is no absurdity "so gross as to shock the general moral or common sense" or "so monstrous, that all mankind would, without hesitation, unite in rejecting the application", nor is there anything making "plain the intent of Congress that the letter of the statute is not to prevail." Indeed, the consequence that the protestant argues is absurd (i.e., to conclude that Congress intended to leave all entries made prior to the effective date of section 1504(d) open to perpetual ambiguity and uncertainty) is not, in fact, at all absurd. Before enactment of the provision under consideration, "[t]here [was] no ... law requiring liquidation to be completed within a specific time period", as recognized in the legislative history to Public Law 95-410 (Senate Report (Finance Committee) 95-778, 95th Cong., 2d Sess., 31, reprinted in 1978 U.S.C.C.A.N. 2211, 2242; see also Ambassador Division of Florsheim Shoe, supra ("[t]he prior law had been that Customs might delay liquidation as long as it pleased ...", 3 Fed. Cir. (T) at 30)). In Public Law 95-410, Congress changed this rule. In enacting this change, Congress specifically provided that the change "applie[d] to the entry or withdrawal of merchandise for consumption on or after 180 days after the enactment of [the] Act" (Public Law 95-410, section 209(b), 92 Stat. 903). The primary purpose for the legislation was to "increase certainty in the customs process ... (Senate Report 95-778, supra, 1978 U.S.C.C.A.N. at 2243); see also Ambassador Division of Florsheim Shoe, supra, 3 Fed. Cir.

That is, Congress recognized the prior law and then changed that law, effective on a date certain. Not only is this not absurd, it is consistent with the presumption against retroactivity in the interpretation of statutes (see Bowen v. Georgetown University Hospital, 488 U.S. 204, 208, 109 S. Ct. 468, 471 (1988)), which was resoundingly confirmed in the 1994 Supreme Court case of Landgraf v. USI Film Products, 114 S. Ct. 1483. To adopt the protestant's position in this regard would result in the retroactive application of the statute under consideration to transactions which occurred more than four years prior to the effective date of the statute. Furthermore, accepting the clearly stated effective date of the provision under consideration is consistent with the purpose of the provision, to provide certainty in Customs transactions (i.e., because the retroactive application of a statute, by its very nature, increases uncertainty in the transactions to which the statute applies (see, Landgraf, supra, 114 S. Ct. at 1500)).

The application of the statutory provision under consideration in the situation under consideration is not an absurdity "so gross as to shock the general moral or common sense" justifying the application of the doctrine in the Church of the Holy Trinity case. Rather, as was held in F.W. Myers, supra (see quotation above), this is a matter governed by the primary rule of statutory construction, i.e.: "[w]hen interpreting a statute a court first must examine the statutory language [and] [i]f the language of the statute is clear and unambiguous, judicial inquiry is complete and that language controls absent rare and exceptional circumstances (In re Perroton v. Gray, 958 F. 2d 889, 893 (9th Cir. 1992), and cases cited therein). In this case, the statute clearly and unambiguously provides that the provision under consideration is effective to entries or withdrawals of merchandise for consumption on or after April 1, 1979, well before the entries under consideration. The protest is DENIED in this regard.

In regard to the argument by the protestant that relief should be granted on the basis of laches, we note that laches is an equitable doctrine (see, e.g., A.C. Aukerman Co. v. R. L. Chaides Const. Co., 960 F. 2d 1020, 1030-1031 (Fed. Cir. 1992); Robins Island Preservation Fund v. Southold Dev., 959 F. 2d 409, 423-424 (2nd Cir. 1992)). Equitable principles do not operate against the Government in cases involving the collection or refund of duties on imports (Air-Sea Brokers, Inc. v. United States, 66 CCPA 64, 67-68, C.A.D. 1222, 596 F. 2d 1008 (1979); see also Mitsubishi Electronics America, Inc. v. United States, CIT Slip Op. 94-155, printed in the October 26, 1994, Customs Bulletin and Decisions, Vol. 28, No. 43, p. 69). Since this is a case involving the collection or refund of duties on imports, the doctrine of laches is not available in this case.

Even if the doctrine of laches were available in a case such as this, the protestant has not established that the doctrine is applicable in this case. That is, "[t]he imposition of laches requires both unreasonable delay by the petitioner, and prejudice to the respondent because of the delay [and furthermore,] [l]aches is an affirmative defense, and the burden of proving both elements rests with the party raising it" (Hoover v. Department of Navy, 957 F. 2d 861, 863 (Fed. Cir. 1992), emphasis added; see also, Costello v. United States, 365 U.S. 265, 282, 81 St. Ct. 534, 543 (1961)). In this case, the protestant has not established prejudice (i.e., according to all information available, the entries under consideration were subject to an antidumping margin of 48% and that was the margin which was applied).

On the basis of the foregoing (i.e., because laches is not available in a case involving the collection or refund of duties on imports and, even if it were available, in this case the protestant has not met the requirements for application of laches) the protest must be DENIED in regard to this issue.

HOLDING:

The protest is DENIED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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