                         Slip Op. 03-105

            UNITED STATES COURT OF INTERNATIONAL TRADE

             BEFORE: RICHARD W. GOLDBERG, SENIOR JUDGE


NISSEI SANGYO AMERICA, LTD.,

        Plaintiff,

   v.

UNITED STATES,                             Court No. 00-00113

        Defendant,

   and

MICRON TECHNOLOGY, INC.,

        Defendant-Intervenor.


[Plaintiff’s motion for summary judgment is granted; liquidation
instructions issued by U.S. Department of Commerce are remanded.]

                                              Dated: August 18, 2003

     Katten Muchin Zavis Rosenman (Michael E. Roll) for plaintiff
Nissei Sangyo America, Ltd.

     Peter D. Keisler, Assistant Attorney General, David M.
Cohen, Director, Patricia McCarthy Assistant Director, Commercial
Litigation Branch, Civil Division, United States Department of
Justice; Patrick V. Gallagher, Office of the Chief Counsel for
Import Administration, United States Department of Commerce, Of
Counsel, for defendant United States.

     Hale & Dorr, LLP (Michael D. Esch) for defendant-intervenor
Micron Technology, Inc.

                                OPINION

GOLDBERG, Senior Judge: Nissei Sangyo America, Ltd. (“NSA”),

moves for summary judgment upon the agency record pursuant to

USCIT R. 56.1, contesting the issuance of liquidation
Court No. 00-00113                                           Page 2

instructions contained in message numbers 9305211 and 9305212

(“Liquidation Instructions”) by the U.S. Department of Commerce

(“Commerce”) to the U.S. Customs Service1 (“Customs”), dated

November 1, 1999.    The Liquidation Instructions ordered the

liquidation of NSA’s entries of Dynamic Random Access Memory

semiconductors of one megabit or above (“DRAMs”) at the

manufacturer’s cash deposit rate rather than the rates determined

for the manufacturer during the administrative reviews of May 6,

1996 and January 7, 1997.

     For the reasons that follow, the Court holds that the

Liquidation Instructions are arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.    The Court

has jurisdiction over this matter pursuant to 28 U.S.C. §

1581(i).


                            I. BACKGROUND

     NSA is an importer of Korean DRAMs manufactured by LG

Semicon Co., Ltd. (“LG Semicon”), formerly Goldstar Electron Co.,

Ltd. (“Goldstar”).    NSA purchased DRAMs manufactured by Goldstar

from an unnamed reseller, and entered 38 shipments between

February 17, 1994 and April 28, 1995.    At the time of entry, an


     1
        It has since become the U.S. Bureau of Customs and Border
Protection per the Homeland Security Act of 2002, § 1502, Pub. L.
No. 107-296, 116 Stat. 2135, 2308-09 (Nov. 25, 2002), and the
Reorganization Plan Modification for the Department of Homeland
Security, H.R. Doc. 108-32, p. 4 (Feb. 4, 2003).
Court No. 00-00113                                           Page 3

antidumping duty order was in effect covering DRAMs imported by

NSA.    See Dynamic Random Access Memory Semiconductors of One

Megabit and Above from the Republic of Korea, Antidumping Duty

Order and Amended Final Determination, 58 Fed. Reg. 27,520 (May

10, 1993).    Pursuant to the antidumping order of May 10, 1993,

Commerce issued suspension instructions on May 25, 1993 ordering

Customs to require NSA to post cash deposits of estimated

antidumping duties applicable to the merchandise at issue, and

such deposit was made.    These suspension instructions provided

deposit rates for all entries at the manufacturer’s rate, and did

not provide separate rates for importers or resellers.     Id. at

27,522.

       On June 15, 1994, Commerce initiated an administrative

review of imports of DRAMs manufactured by Goldstar and Hyundai

Electronics Co., Ltd. (“Hyundai”), another Korean manufacturer of

DRAMs, that were imported into the United States from October 29,

1992 through April 30, 1994 (“POR 1”).    Initiation of Antidumping

and Countervailing Duty Administrative Reviews and Request for

Revocation in Part, 59 Fed. Reg. 30,770 (June 15, 1994).     Upon

conclusion of the administrative review, Commerce determined that

the dumping margin for Goldstar was 0.00%.    Dynamic Random Access

Memory Semiconductors of One Megabit or Above from the Republic

of Korea, Final Results of Antidumping Duty Administrative

Review, 61 Fed. Reg. 20,216, 20,222 (May 6, 1996).
Court No. 00-00113                                           Page 4

     On June 15, 1995, Commerce initiated a second administrative

review of imports of DRAMs manufactured by LG Semicon and Hyundai

that were imported into the United States from May 1, 1994

through April 30, 1995 (“POR 2”).     Initiation of Antidumping and

Countervailing Duty Administrative Review, 60 Fed. Reg. 31,447

(June 15, 1995).    Commerce determined that the dumping margin for

LG Semicon was de minimis at 0.01%.     Dynamic Random Access Memory

Semiconductors of One Megabit or Above from the Republic of

Korea, Final Results of Antidumping Duty Administrative Review,

62 Fed. Reg. 965, 968 (Jan. 7, 1997).

     Subsequently, Defendant-Intervenor Micron Technology, Inc.

(“Micron”) filed an action in opposition to the rates determined

in POR 1 and POR 2 for LG Semicon.    The Court of International

Trade and the Court of Appeals for the Federal Circuit sustained

the results of the first and second administrative reviews for LG

Semicon DRAMs.     Micron Technology v. United States, 23 CIT 55, 44

F. Supp. 2d 216 (1999); Micron Technology v. United States, 23

CIT 208, 40 F. Supp. 2d 481 (1999).

     In addition, prior to the conclusion of the Micron cases,

Commerce issued final results for a third administrative review

period covering LG Semicon and Hyundai DRAMs that were imported

from May 1, 1995 though April 30, 1996 (“POR 3”).    During POR 3,

Commerce issued instructions to Customs to liquidate entries of

LG Semicon and Hyundai DRAMs during that period irrespective of
Court No. 00-00113                                          Page 5

the identity of the importer.

      Upon conclusion of the Micron cases, Commerce instructed

Customs to assess antidumping duties on NSA’s imports of LG

Semicon DRAMs at the manufacturer’s cash deposit rate upon entry.

Commerce did not instruct Customs to liquidate NSA’s entries at

the rates determined for POR 1 or POR 2.

      NSA contests the Liquidation Instructions and moves for

summary judgment on the grounds that the Liquidation Instructions

are arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law and were issued without advance notice

to NSA.   Commerce argues that the Court lacks subject matter

jurisdiction under 28 U.S.C. § 1581(i).    Alternatively, Commerce

argues that NSA has not exhausted its administrative remedies or

that otherwise the Liquidation Instructions are rational and in

accordance with law.


                       II. STANDARD OF REVIEW

      Assuming that the Court has jurisdiction pursuant to 28

U.S.C. § 1581(i), 28 U.S.C. § 2640(e) (1994) governs this case.

Section 2640(e) establishes the standard of review in an action

brought under 28 U.S.C. § 1581(i), providing that “[i]n any civil

action not specified in this section, the Court of International

Trade shall review the matter provided in section 706 of title

5.”   Accordingly, the Court “shall hold unlawful and set aside

agency action, findings, and conclusions found to be arbitrary,
Court No. 00-00113                                            Page 6

capricious, an abuse of discretion, or otherwise not in

accordance with law.”   5 U.S.C. § 706.


                          III. DISCUSSION

A.   The Court has residual jurisdiction under § 1581(i).

     As a threshold matter, Commerce argues that the Court lacks

residual jurisdiction pursuant to 28 U.S.C. § 1581(i).    Commerce

claims that NSA had an alternative remedy under § 1581(c).     It

claims that NSA could have filed an independent request for an

administrative review and/or participated in POR 1 and POR 2

under § 1581(c).   Commerce argues that this alternative remedy

renders § 1581(i) residual jurisdiction unavailable.

     NSA argues that Commerce’s prior practice dictated that the

rates determined during the administrative review periods applied

to all importers of the subject merchandise.   This was the

governing practice irrespective of whether the importer filed an

individual request for an administrative review.   In support of

this argument, NSA points to Consolidated Bearings Company v.

United States, 25 CIT __, 166 F. Supp. 2d 580 (2001) and ABC

International Traders, Inc. v. United States, 19 CIT 787 (1995).

Additionally, NSA points to two notices recently published by

Commerce.   See “Antidumping and Countervailing Duty Proceedings:

Assessment of Antidumping Duties,” 68 Fed. Reg. 23,954 (May 6,

2003) (“Final Notice”); “Antidumping or Countervailing Duty

Order, Finding, or Suspended Investigation; Amendment to Notice
Court No. 00-00113                                          Page 7

of Opportunity To Request Administrative Review,” 68 Fed. Reg.

26,288 (May 15, 2003) (“Amendment to Final Notice”).    NSA argues

that these notices constitute Commerce’s admission that the

Liquidation Instructions constituted a change from its past

practice without notice and that, prior to the issuance of the

Liquidation Instructions, entries for a given importer such as

NSA were liquidated at the rate determined for the producer of

the subject merchandise in the administrative review.

     The merits of this action and the resolution of the

jurisdictional issue are intertwined.   Pursuant to § 1581(i), the

Court does not possess jurisdiction to decide issues relating to

antidumping law if review is specifically provided for by other

subparagraphs of § 1581.   “[I]t is well established that the

residual jurisdiction of the court under [sub]section 1581(i)

‘may not be invoked when jurisdiction under another [sub]section

of § 1581 is or could have been available, unless the relief

provided under that other subsection would be manifestly

inadequate.’”   Consolidated, 25 CIT at __, 166 F. Supp. 2d at 583

(quoting Ad Hoc Comm. of Fla. Producers of Gray Portland Cement

v. United States, 22 CIT 902, 906, 25 F. Supp. 2d 352, 357 (1998)

(internal citation omitted) (emphasis in original)).

     In Consolidated, Commerce issued liquidation instructions

that required Customs to assess antidumping duties on the

plaintiff-importer’s entries of the subject merchandise at the
Court No. 00-00113                                           Page 8

cash deposit rates in effect at the time of entry instead of at

the weighted-average rates determined for the subject merchandise

in the amended final results of the administrative review.    The

plaintiff-importer contested the instructions on the grounds that

they were arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law, and requested that Customs

apply the liquidation rates determined in the administrative

review.   The court found that it “[was] appropriate to exercise

residual jurisdiction because jurisdiction under other

subsections of section 1581 [was] not available.”    Id. at 583.

The court explained that:

           Commerce’s liquidation instructions also are not
           reviewable under subsection 1581(c) because they
           were not part of the Final Results or the Amended
           Final Results. Rather, such instructions are
           issued after relevant final determinations are
           published and, accordingly, it was impossible for
           [the importer] to contest the instructions as
           required under 19 U.S.C. § 1516a(a)(2)(B)(iii)
           (1994). . . [F]inally, none of the other
           subsections of section 1581 of Title 19 provides a
           viable basis for jurisdiction. Id.


     In the instant case, Commerce did not publish the

Liquidation Instructions until November 1, 1999.    This was after

the final results of POR 1 and POR 2 were published on May 6,

1996 (61 Fed. Reg. 20,216) and January 7, 1997 (62 Fed. Reg.

965), respectively.   The Liquidation Instructions changed

Commerce’s prior instructions in message number 7128114 issued

for POR 2, dated May 8, 1997.   Those instructions ordered Customs
Court No. 00-00113                                           Page 9

to liquidate “all entries covered by the [Order] at the rates

established in the administrative reviews for the three Korean

manufacturers: Goldstar, Hyundai, and Samsung.”   In addition, the

reasoning set forth in ABC dictated that in the absence of

another or “all other” rate, all importers of the subject

merchandise were covered by the review.   Thus, it was reasonable

for NSA to assume that its entries would be liquidated at the

administrative review rates and that it need not file an

independent request for an administrative review pursuant to §

1581(c).   NSA, as an importer of DRAMs covered in POR 1 and POR

2, should have been able to rely on such assessment without

apprehension that Commerce would change its mind later and change

the properly assessed rates.   Consolidated, 25 CIT at __, 166 F.

Supp. 2d at 593.

     Likewise, in ABC, the court held that the manufacturers’

rates determined in the administrative review applied to the

plaintiff-reseller since there was no other rate that could have

applied:

           Absent an applicable reseller, or even an ‘all
           other’ rate, [the plaintiff] should have known
           that it would have been assigned the only existing
           rates, that is, the manufacturers’ duty rates
           determined in the final results of the various
           administrative reviews. The fact that no review
           was requested to establish rates for the resellers
           at issue, or for ABC individually, does not compel
           Commerce to apply the automatic assessment
           regulation in this case. In fact, Commerce is
           compelled to apply the manufacturers’ rates as
Court No. 00-00113                                            Page 10

            determined on review, because no reseller rates
            exist. ABC, 19 CIT at 790.


Similarly, at the time of entry, a § 1581(c) request by NSA was

wholly unnecessary, thereby failing to provide an adequate remedy

under the reasoning set forth in ABC.    Finally, Commerce does not

present the argument that any other subsection of § 1581 provided

NSA with an adequate remedy, and the Court finds no other

subsection of § 1581 applicable.

     Accordingly, the Court exercises jurisdiction over the

matter under 28 U.S.C. § 1581(i).


B.   The exhaustion doctrine does not dictate dismissal of NSA’s
     claim.

     Commerce argues that the exhaustion doctrine applies since

Commerce never had an opportunity to properly consider NSA’s

argument.    This was allegedly because NSA never presented the

issue to Commerce in the appropriate administrative proceeding.

NSA asserts that the exhaustion doctrine does not apply to the

instant case because its circumstances qualify it as an

exception.    Specifically, NSA maintains that it had no reason to

expect that Commerce would refuse to apply the manufacturer’s

rates to its entries.    Alternatively, NSA claims that the issue

at hand is of a purely legal nature that requires no further

agency involvement.
Court No. 00-00113                                           Page 11

     The exhaustion doctrine requires that a party present its

claims to the relevant administrative agency for the agency’s

consideration before bringing these claims to the Court.

Consolidated, 25 CIT at __, 166 F. Supp. 2d at 586 (citing

Compensation Comm’n of Alaska v. Aragon, 329 U.S. 143, 155

(1946)).   However, there is no absolute requirement of exhaustion

in the Court of International Trade in non-classification cases.

Id. (citing Alhambra Foundry Co. v. United States, 12 CIT 343,

346-47, 685 F. Supp. 1252, 1255-56 (1988)).   Thus, the Court has

the discretion to determine proper exceptions to the doctrine of

exhaustion.   Id.

     Exceptions to the requirement of exhaustion have been found

where requiring it (1) would be futile or (2) would be

“inequitable and an insistence of a useless formality.”         See

Rhone Poulenc, S.A. v. United States, 7 CIT 135, 153, 583 F.

Supp. 607, 610 (1984); United States Canes Sugar Refiners’ Ass’n

v. Block, 3 CIT 196, 201, 544 F. Supp. 883, 887 (1982).    A second

exception exists where the “question is one of law and does not

require further factual development and, therefore, the court

does not invade the province of the agency by considering the

question.”    See id.

     The circumstances in the instant case fall under the “pure

question of law” exception to the exhaustion doctrine.     In

Consolidated, the court set out the requirements for the “pure
Court No. 00-00113                                          Page 12

question of law” exception as follows: (a) plaintiff’s argument

is new; (b) this argument is of a purely legal nature; (c) the

inquiry shall require neither further agency involvement nor

additional fact finding or opening up the record; and (d) the

inquiry shall neither create undue delay nor cause expenditure of

scarce time and resources.   See Consolidated, 25 CIT at __, 166

F. Supp. 2d at 587.   This instant case presents a pure question

of law that fits squarely within this exception for the reasons

that follow: (a) NSA’s presents a new argument to the Court; (b)

the inquiry involves a question of law — namely, whether

Commerce’s liquidation instructions are arbitrary and capricious;

(c) the inquiry does not require any special expertise by

Commerce and/or the development of a special factual record

either before or after the Court’s consideration of the issue;

and (d) for the reason mentioned in part (c), judicial inquiry

here will not create undue delay or unnecessary expenditure.     Id.


C.   The Liquidation Instructions are arbitrary, capricious, an
     abuse of discretion, or otherwise not in accordance with
     law.

     NSA argues that the Liquidation Instructions are arbitrary,

capricious, and contrary to law, and were issued without advance

notice to NSA.   Commerce contends that the Liquidation

Instructions are rational and in accordance with law, and were

issued within the scope of its authority.
Court No. 00-00113                                                Page 13

     Commerce argues that since NSA did not argue that LG Semicon

knew its goods were destined for export to the United States, NSA

is not covered by the administrative reviews.      In support of its

argument, Commerce refers to the “knowledge test” upheld in NSK

Ltd. v. United States, 190 F. 3d 1321, 1334 (Fed. Cir. 1999).

Commerce’s argument is flawed.   The knowledge test that was

upheld in NSK only applies to the producer, LG Semicon, and

speaks nothing of the application of the administrative reviews

to the importer, NSA.    See generally id.    The knowledge test as

it stands in NSK is inapplicable to this case.      Therefore,

Commerce asks the Court to hold that the knowledge test stands

for the proposition that the importer is only covered by an

administrative review if the producer knew that its goods were

destined for export to the United States.       See Defendant’s

Response in Opposition to Plaintiff’s Motion for Judgment upon

the Agency Record, 20.   However, Commerce has not spoken of this

application of the knowledge test in the past.      Additionally,

Commerce failed to speak of this application of the knowledge

test in the liquidation instructions issued in POR 1 and POR 2

and, thereby, issued the contested instructions without

explaining the basis for its action.   Therefore, this application

of the knowledge test was unwarranted.       See Consolidated, 25 CIT

at __, __, 166 F. Supp. 2d at 589, 590 (“If the Department of
Court No. 00-00113                                           Page 14

Commerce fails to explain the basis for its liquidation

instructions, Commerce’s action is arbitrary and capricious.”).

     In Consolidated, the court found arbitrary and capricious

liquidation instructions that changed Commerce’s previous

practice of liquidating at the rate determined in the

administrative review but instead liquidated at the cash deposit

rate.   The court found the instructions arbitrary, in part,

because they were not clear to the plaintiff and were completely

contrary to instructions that were issued previously.     The court

saw the following problems with Commerce’s action:

           Considering that on September 9, 1997, Commerce
           already instructed Customs to liquidate certain
           entries subject to the review at certain rates, it
           is entirely unclear to this Court why, almost a
           year later, Commerce felt compelled to issue the
           liquidation instructions at issue if, as Commerce
           now contends, the conclusions contained in these
           liquidation instructions were already self-evident
           from the very same record and from the previously
           issued September 9, 1997, instructions. . . . Such
           action by Commerce shows that Commerce
           contemplated a scenario under which certain
           entries of the [subject merchandise], including
           [the merchandise] manufactured by the [plaintiff-
           importer] could have been liquidated at one rate
           prior to the issuance of the contested liquidation
           instructions and an entirely different rate after
           the issuance of [said] instructions. Id. at 592.

     The Court finds the same problem with the Liquidation

Instructions in the instant case.   Commerce issued new

instructions on November 1, 1999 and, thereby, changed its past

practice of liquidating at “the rate established for the most
Court No. 00-00113                                            Page 15

recent period for the manufacturer of the merchandise.”     61 Fed.

Reg. 20,216, 20,222.   The Liquidation Instructions were issued

without notice to NSA, which had no reason to know that Commerce

would change the instructions and require it to request a

separate and independent administrative review.    Commerce’s past

practice and the reasoning set forth in ABC and Consolidated gave

NSA a reasonable expectation that their entries were covered by

the rates established in POR 1 and POR 2, and therefore that they

would not need to file an independent request for an

administrative review.   The Final Notice and Amendment to Final

Notice appear to acknowledge Commerce’s past liquidation

practice.   See 68 Fed. Reg. 23,954; 68 Fed. Reg. 26,288.    NSA had

no reason to know that their entries were not covered by the

rates determined in POR 1 and POR 2.   Commerce failed to explain

the basis for the Liquidation Instructions at issue and failed to

provide NSA with notice of the change.     See Consolidated, 25 CIT

at __, 166 F. Supp. 2d at 590.   Therefore, the Liquidation

Instructions are arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.    Id.



                          IV. CONCLUSION

     For the aforementioned reasons, the Court finds that

jurisdiction attaches under 28 U.S.C. § 1581(i) and that NSA’s

claim is not precluded by the exhaustion doctrine.    In addition,
Court No. 00-00113                                        Page 16

for the reasons stated herein, the Court finds that the

Liquidation Instructions are arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.

     Pursuant to this opinion, this case is remanded to Commerce

to (1) rescind the Liquidation Instructions and (2) issue new

instructions ordering Customs to liquidate and/or re-liquidate

NSA’s entries at the antidumping rates determined for LG Semicon

during POR 1 and POR 2.




                               Richard W. Goldberg
                               Senior Judge



Date:     August 18, 2003
          New York, New York
