Error: Bad annotation destination
 United States Court of Appeals for the Federal Circuit
                                     06-1042, -1143


                           DIXON TICONDEROGA COMPANY,

                                                       Plaintiff-Appellee,

                                            v.

                                   UNITED STATES,

                                                       Defendant-Appellant,

                                           and

                            MUSGRAVE PENCIL COMPANY,
                            ROSEMOON PENCIL COMPANY
                           and GENERAL PENCIL COMPANY,

                                                       Defendants-Appellants.




       Daniel E. Traver, Gray Robinson, PA, of Orlando, Florida, argued for plaintiff-
appellee. On the brief was Guy S. Haggard.

       David S. Silverbrand, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-
appellant United States. With him on the brief were Peter D. Keisler, Assistant Attorney
General; David M. Cohen, Director; Jeanne E. Davidson, Deputy Director, of
Washington, DC. Of counsel on the brief was Charles Steuart, Attorney, Office of Chief
Counsel, United States Customs and Border Protection, of Washington, DC.

       George W. Thompson, Neville Peterson LLP, of Washington, DC, argued for
defendants-appellants Musgrave Pencil Company, et al. With him on the brief were
Curtis W. Knauss and John M. Peterson, of New York, New York.

Appealed from: United States Court of International Trade

Judge Judith M. Barzilay
United States Court of Appeals for the Federal Circuit

                                   06-1042, -1143

                        DIXON TICONDEROGA COMPANY,

                                                     Plaintiff-Appellee,

                                         v.

                                 UNITED STATES,

                                                     Defendant-Appellant,

                                        and

                         MUSGRAVE PENCIL COMPANY,
                         ROSEMOON PENCIL COMPANY
                        and GENERAL PENCIL COMPANY,

                                                    Defendants-Appellants.

                          _______________________

                          DECIDED: November 6, 2006
                          _______________________


Before MICHEL, Chief Judge, ARCHER, Senior Circuit Judge, and LINN, Circuit Judge.

ARCHER, Senior Circuit Judge.

      The government and Musgrave Pencil Company, Rosemoon Pencil Company,

and General Pencil Company (“the pencil companies”) appeal the United States Court

of International Trade’s judgment granting Dixon Ticonderoga Company’s (“Dixon”)

motion for judgment on the administrative record. Dixon Ticonderoga Co. v. United

States Customs & Border Prot., No. 04-00027 (Ct. Int’l Trade Apr. 4, 2005). Because

the record contains no evidence that Dixon was substantially prejudiced by the United
States Customs and Border Protection’s (“Customs”) failure to timely publish a notice of

intention to distribute assessed duties as required by 19 C.F.R. § 159.62(a), we reverse.

                                              I

        The Continued Dumping and Subsidy Offset Act (“CDSOA”) provides that

assessed duties received from antidumping orders, countervailing duty orders, or

findings under the Antidumping Act of 1921 be distributed to “affected domestic

producers” for certain qualifying expenditures. 19 U.S.C. § 1975c (2003). As a part of

the CDSOA distribution process, Customs is statutorily required to publish a Notice of

Intent to Distribute (“Notice”) at least 30 days before the distribution of a continued

dumping and subsidy offset and to make distributions within 60 days after the fiscal

year.   Id. § 1975c(c), (d)(2).   In implementing the statute, Customs is required by

regulation to publish the Notice at least 90 days before the end of the fiscal year.

19 C.F.R. § 159.62(a) (2003).       This is generally done in the Federal Register.

Claimants seeking a share of the distribution then have 60 days from the date of

publication of the Notice to file the certifications required to receive offset distributions.

19 C.F.R. § 159.63(a) (2003).

        In 2003, Customs published the Notice on July 14 (“the 2003 Notice”), 78 days

prior to the end of the fiscal year and twelve days after the regulatory deadline. See

Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers,

68 Fed. Reg. 471,597 (July 14, 2003). Dixon filed its application to receive a portion of

the relevant assessed duties for Fiscal Year 2003 102 days after Customs’ publication

of the 2003 Notice.     Customs denied Dixon’s application, and Dixon appealed this

denial to the Court of International Trade. Dixon argued to the Court of International




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Trade (and to us) that Customs’ failure to provide notice as required by

19 C.F.R. § 159.62(a) caused it, as well as other domestic pencil manufacturers, to file

late.

        The Court of International Trade concluded that the timing requirements of

19 C.F.R. § 159.62(a) were merely procedural aids in applying the CDSOA and thus

Customs did not lose its authority to administer the CDSOA when it failed to meet its

own regulatory timing requirements. Id. at 9. The court also held, however, that Dixon

was prejudiced by this regulatory violation.        Accordingly, the court granted Dixon’s

motion and entered judgment in favor of Dixon. Id. at 10.

        The government and the pencil companies appealed, and we have jurisdiction

pursuant to 28 U.S.C. § 1295(a)(5).

                                               II

        When reviewing decisions by the Court of International Trade pursuant to

28 U.S.C. § 1581(i), we apply the standard of review set forth in 5 U.S.C. § 706.

Consol. Bearings Co. v. United States, 348 F.3d 997, 1004 (Fed. Cir. 2003). Thus, we

“will set aside Customs’ denial of offset distributions only if it is ‘arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.’” See Candle Corp. of Am.

v. U.S. Int’l Trade Comm’n, 374 F.3d 1087, 1091 (Fed. Cir. 2004) (quoting

5 U.S.C. § 706).

                                              III

        An agency is generally required to comply with its own regulations. See Kemira

Fibers Oy v. United States, 61 F.3d 866, 871 (Fed. Cir. 1995). However, simple failure

of an agency to follow a procedural requirement does not void subsequent agency




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action.1   See id. at 868, 875 (holding that failure to timely comply with the notice

requirement of 19 C.F.R. § 353.25(d) did not deprive the Department of Commerce of

the authority to commence an administrative review where the antidumping review was

noticed by the agency after the regulatory deadline); Brock v. Pierce County, 476 U.S.

253, 260 (1986).      Rather, in order to prevail, Dixon must establish that it was

substantially prejudiced by Customs’ noncompliance with 19 C.F.R. § 159.62(a). See

Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539 (1970) (“[I]t is always

within the discretion of . . . an administrative agency to relax or modify its procedural

rules adopted for the orderly transaction of business before it when in a given case the

ends of justice require it. The action of [an agency] in such a case is not reviewable

except upon a showing of substantial prejudice to the complaining party.”).

       We recently discussed the issue of prejudice in the context of failure to comply

with a notice regulation. In PAM, S.p.A. v. United States, 463 F.3d 1345 (Fed. Cir.

Sept. 13, 2006), a domestic producer violated 19 C.F.R. § 351.303(f)(3)(ii) by failing to

give a foreign exporter, PAM, notice of a request for further administrative review of

several companies, including PAM, that were under antidumping duty orders. Following

the request for further review, the Department of Commerce (“Commerce”), as required

by statute, published notice of its initiation of this review in the Federal Register listing

the companies involved, including PAM. Id. at 1346. This was the first time PAM

learned of the request for further review. There was a 17-day lag between the time that

the domestic producer should have served notice of its request for review on PAM and



       1
              No party challenges the Court of International Trade’s determination that
the timing requirements of 19 C.F.R. § 159.62(a) are merely procedural aids in applying
the CDSOA.


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the time that Commerce published notice of the initiation of review. Id. at 1346 n.2.

Ultimately, PAM was given a 29-day extension to file its response to the questionnaires

subsequently provided by Commerce. In concluding that PAM had not demonstrated

that it was substantially prejudiced, we noted that “the total amount of additional time

Commerce granted to PAM . . . far exceeded the 17 days PAM lost due to the lack of

service” by the domestic producer. Id. at 1349. We further observed that “PAM neither

claim[ed] or attempt[ed] to show that [the domestic company’s] failure to serve it

impeded its ability to respond to and defend its interests in the administrative review.”

Id.

       The only discernable difference between the present case and PAM is that in

PAM the party asserting prejudice was ultimately given several extensions to complete

its response to Customs’ questionnaire. Here, Dixon was not given more than 60 days

from the date of the Notice to file its certification request; however, no extension was

requested. Indeed, Dixon has not asserted that this time period was insufficient either

to determine whether it wished to request a disbursement or to actually request a

disbursement.

       In fact, Dixon has provided no evidence, or even an allegation (other than

attorney argument), that the cause of its failure to file a timely application was Customs’

late publication of the Notice. Additionally, there is no indication in the record as to why

Dixon failed to monitor the Federal Register past the publication deadline of

19 C.F.R. § 159.62(a), as it had the previous year.

       Dixon argues that a statement in Intercargo Insurance Co. v. United States, 83

F.3d 391 (Fed. Cir 1996), supports the Court of International Trade’s finding of prejudice




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here. Intercargo explained that “prejudice” in this context “means injury to an interest

that the statute, regulation, or rule in question was designed to protect.” Id. at 396.

Dixon asserts that because the Antidumping Act was enacted to protect U.S. industries

from reduced-price foreign products and Dixon is a domestic producer, these facts

alone demonstrate that it was prejudiced under Intercargo. This argument ignores the

fact that the regulation violated here is one governing notice to domestic producers

regarding Customs’ intention to distribute duties under the CDSOA, not the Antidumping

Act itself. While it is true that the CDSOA is intended to protect domestic producers,

see CDSOA, Pub. L. No. 106-387, § 1(a), 114 Stat. 1549 (2000), the purpose of

19 C.F.R. § 159.62(a) is simply to provide notice to the domestic producers that

disbursements pursuant to the CDSOA are available for a given year. As discussed

above, Dixon has failed to present any evidence that such an interest was injured. The

regulation itself does not function to protect domestic producers from foreign dumped

products.

      Finally, the Court of International Trade concluded that Customs’ failure to timely

publish the 2003 Notice harmed domestic producers, such as Dixon, who assume

agency compliance with § 195.62(a) and are prejudiced by noncompliance because

they receive no other indication of Customs’ intent to distribute an offset or the deadline

within which to file for a share of the offset. Dixon, slip op. at 11. The flaw in this

analysis is that it simply assumes prejudice without requiring a showing thereof. For

example, under the Court of International Trade’s rationale, any domestic producer

eligible for disbursements under the CDSOA is prejudiced whenever Customs is late in

publishing its distribution notice regardless of whether the domestic producer actually




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seeks disbursements.     Such a result is illogical.   In fact, the Court of International

Trade’s holding would effectively eliminate the prejudice requirement. As a result, any

time an agency misses a statutory or regulatory deadline, its subsequent action could

be challenged (and voided) indefinitely.

                                           IV

      Because the administrative record contains no evidence that Dixon was

prejudiced by Customs’ late publication of the 2003 Notice, we reverse the judgment of

the Court of International Trade.

                                      REVERSED.




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