                         Slip Op. 03-106

            UNITED STATES COURT OF INTERNATIONAL TRADE

             BEFORE: RICHARD W. GOLDBERG, SENIOR JUDGE


RENESAS TECHNOLOGY AMERICA,
INC.,

        Plaintiff,

   v.
                                           Court No. 00-00114
UNITED STATES,

        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

     McDermott, Will & Emery (David J. Levine) for plaintiff
Renesas Technology America, Inc.

     Peter D. Keisler, Assistant Attorney General, David M.
Cohen, Director, Patricia M. 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: Plaintiff Renesas Technology America,
Court No. 00-00114                                           Page 2

Inc.1 (“Renesas”), moves for summary judgment upon the agency

record pursuant to USCIT R. 56.1, contesting the issuance of

liquidation instructions contained in message numbers 9305211 and

9305212 (“Liquidation Instructions”) by the U.S. Department of

Commerce (“Commerce”) to the U.S. Customs Service2 (“Customs”),

dated November 1, 1999.   The Liquidation Instructions ordered the

liquidation of Renesas’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).




     1
        Plaintiff, formerly known as Hitachi Semiconductor
(America), Inc., has changed its name to Renesas Technology
America, Inc.   See Certificate of Amendment to the Certificate
of Incorporation of Hitachi Semiconductor (America) Inc. (Mar.
31, 2003).
     2
        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. 00-00114                                           Page 3


                           I. BACKGROUND

     Renesas is an importer of Korean DRAMs manufactured by LG

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

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

Goldstar from a reseller, and entered numerous shipments in 1993,

1994, and 1995.   At the time of entry, an antidumping duty order

was in effect covering DRAMs imported by Renesas.     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 Renesas

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
Court No. 00-00114                                           Page 4

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).

     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,
Court No. 00-00114                                           Page 5

Commerce issued its 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 the identity of the importer.

     Upon conclusion of the Micron cases, Commerce instructed

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

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

Commerce did not instruct Customs to liquidate Renesas’s entries

at the rates determined for POR 1 or POR 2.

     Renesas 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 Renesas.   Commerce argues that the Court lacks subject matter

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

argues that Renesas 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
Court No. 00-00114                                           Page 6

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,

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 Renesas had an alternative remedy under § 1581(c).

It claims that Renesas 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.

      Renesas 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, Renesas 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).
Court No. 00-00114                                         Page 7

Additionally, Renesas 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) (“Assessment Policy Notice”); “Antidumping or

Countervailing Duty Order, Finding, or Suspended Investigation;

Amendment to Notice of Opportunity To Request Administrative

Review,” 68 Fed. Reg. 26,288 (May 15, 2003) (“Review Amendment

Notice”).   Renesas 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 Renesas 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
Court No. 00-00114                                           Page 8

(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

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.
Court No. 00-00114                                           Page 9

     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

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 Renesas 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).   Renesas, 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
Court No. 00-00114                                           Page 10

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


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

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 Renesas 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
     Renesas’s claim.

     Commerce argues that the exhaustion doctrine applies since

Commerce never had an opportunity to properly consider Renesas’s

argument.    This was allegedly because Renesas never presented the

issue to Commerce in the appropriate administrative proceeding.

Renesas asserts that the exhaustion doctrine does not apply to
Court No. 00-00114                                           Page 11

the instant case because its circumstances qualify it as an

exception.    Specifically, Renesas maintains that it had no reason

to expect that Commerce would refuse to apply the manufacturer’s

rates to its entries.   Alternatively, Renesas claims that the

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

further agency involvement.

     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 133, 135, 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
Court No. 00-00114                                          Page 12

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

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) Renesas’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.
Court No. 00-00114                                             Page 13


     Renesas argues that the Liquidation Instructions are

arbitrary, capricious, and contrary to law, and were issued

without advance notice to Renesas.   Commerce contends that the

Liquidation Instructions are rational and in accordance with law,

and were issued within the scope of its authority.

     Commerce argues that since Renesas did not argue that LG

Semicon knew its goods were destined for export to the United

States, Renesas 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, Renesas.    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
Court No. 00-00114                                          Page 14

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

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.
Court No. 00-00114                                           Page 15

     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

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

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

without notice to Renesas, 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 Renesas 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 Assessment Policy Notice and

Review Amendment Notice appear to acknowledge Commerce’s past

liquidation practice.    See 68 Fed. Reg. 23,954; 68 Fed. Reg.

26,288.   Renesas 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 Renesas 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.
Court No. 00-00114                                          Page 16


                            IV. CONCLUSION

     For the aforementioned reasons, the Court finds that

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

Renesas’s claim is not precluded by the exhaustion doctrine.    In

addition, 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

Renesas’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
