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Furniture Brands v. United States International Trade

August 15, 2011

FURNITURE BRANDS INTERNATIONAL, INC., PLAINTIFF,
v.
UNITED STATES INTERNATIONAL TRADE COMMISSION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Furniture Brands International, Inc. ("plaintiff") has brought suit against Customs and Border Protection ("Customs"), the International Trade Commission ("ITC"), and, in their official capacities, Customs Commissioner Bersin and ITC Chairperson Okun (collectively "defendants"), to recover funds it believes it is owed under the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA"), 19 U.S.C. § 1675c, repealed by Pub. L. No. 109-171, § 7601, 120 Stat. 154 (Feb. 8, 2006). Before its repeal, the CDSOA directed Customs to redistribute money that it collected pursuant to an individual antidumping duty to "affected domestic producers."*fn1 Id. § 1675c(d)(3). The ITC would provide Customs with a list of these "affected domestic producers" based on the producers' support for levying that antidumping duty. Id. § 1675c(d)(1).

Plaintiff seeks a declaration, under the Declaratory Judgment Act, 28 U.S.C. § 2201, that the CDSOA's definition of "affected domestic producer" violates the First Amendment to the extent that a producer is required to support an antidumping duty in order to receive a distribution. Furthermore, plaintiff requests that the Court order the ITC, pursuant to the Administrative Procedure Act, 5 U.S.C. § 702, to include plaintiff on its list of "affected domestic producers" and order Customs to distribute to plaintiff its share of the antidumping duty funds. Because the finite funds collected under an individual antidumping duty are divided among affected producers, the following affected furniture manufacturers have intervened in this litigation: Kincaid Furniture Co., Inc.; L. & J.G. Stickley, Inc.; Sandberg Furniture Mfg. Co., Inc.; Stanley Furniture Co., Inc.; T. Copeland & Sons, Inc.; and Vaughan-Bassett Furniture Co., Inc. (collectively "defendant-intervenors").

Defendants have filed motions to dismiss for lack of subject matter jurisdiction, contending that the Court of International Trade ("CIT") has exclusive jurisdiction pursuant to 28 U.S.C. § 1581(i). Defendant-intervenors, in addition to moving to dismiss for lack of subject matter jurisdiction, have moved to dismiss or transfer the case under the first-to-file rule. Plaintiff originally filed a virtually identical suit at the CIT in 2007. Furniture Brands Int'l, Inc. v. United States, No. 07-00026 (Ct. Int'l Trade Jan. 23, 2007). Although the parties have fully briefed the merits in that case, plaintiff has moved to dismiss its own complaint, arguing that the CIT lacks subject matter jurisdiction. Pl.'s CIT Mot. to Dismiss or Amend Compl., Furniture Brands Int'l, Inc., No. 07-00026. For the reasons detailed below, the Court will dismiss this action pursuant to the first-to-file rule in deference to the earlier action pending before the CIT.

BACKGROUND

I. Statutory Framework

Customs collects an antidumping duty when (1) the Commerce Department "determines that a class or kind of foreign merchandise is . . . sold in the United States at less than its fair value" and (2) the ITC determines that a U.S. industry is, or is threatened with being, "materially injured" because of "imports of that merchandise." 19 U.S.C. § 1673. In 2000, Congress passed the CDSOA, which directed Customs to distribute money that it has collected pursuant to an antidumping duty to certain "affected domestic producers." 19 U.S.C. § 1675c(e) (repealed in 2006). The CDSOA directed Customs to deposit funds collected pursuant to an individual antidumping duty into a segregated "special account[]." Id. § 1675c(e). The ITC would then send Customs a list of "affected domestic producers"- defined as producers who petitioned for an antidumping duty or "indicate[d] support of the petition by letter or through questionnaire response." Id. § 1675c(d)(1). Customs would distribute the funds from the special account to "affected domestic producers" based on their share of "qualifying expenditures." Id. §§ 1675c(b)(4), (d)(3). On June 1, 2006, Congress repealed the CDSOA but provided that it would continue in force for "[a]ll duties on entries of goods made and filed before October 1, 2007." Pub. L. No. 109-171, § 7601(b), 120 Stat. 154 (Feb. 8, 2006).

II. Plaintiff's Challenge to the CDSOA

In 2003, the ITC began investigating whether Chinese wooden bedroom furniture manufacturers were dumping their products on the U.S. market. Wooden Bedroom Furniture from China, 68 Fed. Reg. 63816, 63817 (Nov. 10, 2003). In relation to this investigation, plaintiff responded to the ITC's questionnaire and indicated that it was opposed to levying any antidumping duties on imports of Chinese wooden bedroom furniture. Compl. [Docket Entry 1] ¶ 31. Based on its investigation, the ITC ultimately issued an antidumping order against imported Chinese wooden bedroom furniture. Wooden Bedroom Furniture from the People's Republic of China, 70 Fed. Reg. 329 (Jan. 4, 2005). Because plaintiff opposed the imposition of this antidumping duty in its questionnaire, plaintiff was statutorily excluded from the list of "affected domestic producers." See Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers, 71 Fed. Reg. 31336 (June 1, 2006). Customs distributed funds under the wooden bedroom furniture antidumping duty in Fiscal Years 2006, 2007, and 2008. Plaintiff challenges its exclusion for each of those years.

Plaintiff filed a complaint in the CIT on January 23, 2007, claiming, like here, that it was entitled to a CDSOA distribution because the CDSOA's definition of "affected domestic producer" violates the First Amendment insofar as it requires a producer to support an antidumping duty in order to receive a distribution. CIT Compl., Furniture Brands Int'l, Inc., No. 07-00026. At that time, plaintiff asserted that the CIT had exclusive jurisdiction pursuant to 28 U.S.C. § 1581(i). Id. at 2. On June 25, 2007, the CIT stayed plaintiff's case pending the resolution of similar First Amendment challenges to the CDSOA in the Federal Circuit. After the Federal Circuit upheld the constitutionality of the CDSOA in SKF USA, Inc. v. U.S. Customs & Border Protection, 556 F.3d 1337 (Fed. Cir. 2009), the CIT ordered plaintiff to show cause why its claim should not be dismissed.

In the wake of the Federal Circuit's rejection of plaintiff's First Amendment argument, plaintiff moved to dismiss its CIT action for lack of subject matter jurisdiction and filed an identical action in this Court. Again, plaintiff asks that this Court declare that the CDSOA is unconstitutional, order the ITC to name it an "affected domestic producer," and order Customs to distribute to it a share of money from the antidumping fund. Defendants have moved to dismiss for lack of subject matter jurisdiction. Following that motion, this Court stayed briefing on the merits in order to first determine whether the Court has subject matter jurisdiction. Order [Docket Entry 18]. Defendant-intervenors then entered this litigation unopposed and, in addition to moving to dismiss for lack of subject jurisdiction, moved to dismiss or transfer the action under the first-to-file rule because of plaintiff's pending case in the CIT.

STANDARD OF REVIEW

District courts have the discretion to stay or dismiss a pending suit when confronted with parallel litigation of factually related cases filed in two separate forums. Handy v. Shaw, 325 F.3d 346, 349 (D.C. Cir. 2003). In fact, the Supreme Court has stated that "though no precise rule has evolved, the general principle is to avoid duplicative litigation" between federal district courts. Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976) (citations omitted).*fn2

Moreover, it is well-established in the D.C. Circuit that "[w]here two cases between the same parties on the same cause of action are commenced in two different Federal courts, the one which is commenced first is to be allowed to proceed to its conclusion first." Washington Metro. Area Transit Auth. v. Ragonese, 617 F.2d 828, 830 (D.C. Cir. 1980) (citations omitted). The Circuit has warned against mechanically applying the first-filed rule if the second-filed action deserves priority, see Columbia Plaza Corp. v. Sec. Nat'l Bank, 525 F.2d 620, 628 (D.C. Cir. 1975), but "[c]onsiderations of comity and orderly administration of justice dictate that two courts of equal authority should not hear the same case simultaneously," Ragonese, 617 F.2d at 830; see also Columbia, 525 F.2d at 626 ("Sound judicial administration counsels against separate proceedings, and the wasteful expenditure of energy and money incidental to separate litigation of identical issues should be avoided."); Nat'l Family Planning & Reprod. Health Ass'n ...


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