Justia Commercial Law Opinion Summaries

Essar manufactures steel in Chhattisgarh, India and imports hot-rolled carbon steel flat products into the U.S. In 2008, Commerce initiated an investigation of whether Essar received countervailable subsidies for its iron ore products in India for a 2007 review period. Commerce investigated Essar’s receipt of benefits from nine subsidies provided under “CIP,” a program administered by the government of Chhattisgarh. Essar repeatedly denied receiving CIP subsidies based on a claim that Essar did not have any manufacturing facilities in Chhattisgarh. The Department of Commerce found that Essar’s claims were contradicted by other information that Essar had supplied. During the fifth administrative review, the governments of India and Chhattisgarh failed to respond. Commerce therefore applied adverse facts available (AFA) in its final results and concluded that Essar did benefit from CIP. The Trade Court remanded to Commerce with instructions to explain how it corroborated the AFA rate for participation in the CIP or why corroboration was not practicable. Commerce explained that it applied a hierarchical methodology in selecting an AFA rate. The Trade Court found that Commerce had corroborated Essar’s AFA rate to the extent practicable under 19 U.S.C. 1677e(c) by utilizing calculated benefits from similar subsidy programs identified in the underlying countervailing duty investigation of hot-rolled carbon steel flat products from India. The Federal Circuit affirmed. View "Essar Steel Ltd. v. United States" on Justia Law

Cubatabaco, a Cuban entity, and General, a Delaware company, manufacture and distribute cigars using the COHIBA mark. General owns trademark registrations issued in 1981 and 1995. Cubatabaco owns the mark in Cuba and uses it worldwide. Cuban Assets Control Regulations (CACR), prohibit Cubatabaco from selling cigars in the U.S.; 31 C.F.R. 515.201(b) prohibits “transfer of property rights . . . to a Cuban entity,” but a general or specific license allows Cuban entities to engage in otherwise prohibited transactions. General licenses are available for transactions “related to the registration and renewal” of U.S. trademark. Specific licenses issue from the Office of Foreign Assets Control. Cubatabaco used a general license to attempt to register the COHIBA mark in 1997, relying on 15 U.S.C. 1126(e), which allows reliance on a foreign registration if the applicant has a bona fide intent to use the mark in commerce. Cubatabaco also sought to cancel General’s registrations, which the PTO cited as a basis for likelihood of confusion. Cubatabaco obtained a special license to sue General. The district court held that General had abandoned its registration by non-use and enjoined General’s use of the COHIBA mark, finding that Cubatabaco had acquired ownership under the famous marks doctrine. The Second Circuit reversed, holding that injunctive relief would involve a prohibited transfer under CACR because Cubatabaco would acquire ownership of the mark and later affirmed denial of General’s motion concerning cancellation of its registrations. The Board then dismissed Cubatabaco’s petition, stating that it need not address preclusion because Cubatabaco lacked standing. The Federal Circuit vacated, finding that Cubatabaco has a statutory cause of action to petition to cancel the registrations and that issue and claim preclusion do not bar that petition View "Empresa Cubana del Tabaco v. General Cigar Co., Inc." on Justia Law

When the Department of Commerce conducts a countervailing duty investigation of merchandise in a market involving many exporters and producers, it may select a sample of exporters and producers for individual investigation (mandatory respondents), 19 U.S.C. 1677f-1, who can cooperate and obtain individual duty rates. Otherwise they are given rates determined under section 1677e(b) using adverse facts available. Exporters or producers who are not initially selected, but who wish to participate (voluntary respondents), may supply information for calculation of individual duty rates. “ The general rule for calculation of the “all-others rate” refers to “an amount equal to the weighted average countervailable subsidy rates established for exporters and producers individually investigated, excluding any zero and de minimis countervailable subsidy rates, and any rates determined entirely under section 1677e.” An exception applies “[i]f the countervailable subsidy rates established for all exporters and producers individually investigated are zero or de minimis rates, or are determined entirely under section 1677e.” When the exception applies, Commerce may “use any reasonable method to establish an all-others rate for exporters and producers not individually investigated.” Following investigation of aluminum extrusions from China, the Court of International Trade sustained the all-others duty rate set by Commerce. The Federal Circuit reversed and remanded for determination of that rate under the general rule, interpreting “exporters and producers individually investigated” to encompass voluntary respondents. The precondition for invoking the exception provision was not met. View "MacLean-Fogg Co. v. United States" on Justia Law

In 2005, the Department of Commerce imposed antidumping duties on wooden bedroom furniture from China. In 2008, acting under 19 U.S.C. 1675(a), Commerce initiated its third administrative review of the duties, covering 2007 imports. Commerce published its preliminary results in 2009. As authorized by statute in the case of China, Commerce sought to estimate production costs by using surrogate values from a comparable market economy. In its preliminary results, Commerce determined the value for wood inputs into the furniture, including lumber, by using data from the Philippines National Statistics Office. Commerce relied on financial statements from five Philippine companies to determine values for overhead, for selling, general, and administrative expenses, and for profit. Yihua, a Chinese company that manufactures wooden furniture imported into the U.S., challenged Commerce’s reliance on the NSO’s volume-based data and on certain financial statements. In its Final Results, Commerce agreed with Yihua on one issue but not the other. Interested parties brought six separate challenges in the Court of International Trade, which sustained the latest results. The Federal Circuit reversed the Trade Court’s decision to require the use of volume-based data in valuing the lumber inputs, affirmed the exclusion of certain financial statements, and remanded.View "Lifestyle Enter, Inc. v. United States" on Justia Law

In 2009, the Department of Commerce initiated administrative review of an antidumping duty order, issuing questionnaires to Mueller, an exporter, which purchased most of its subject merchandise from TUNA and Ternium, and to TUNA and Ternium. Although Mueller cooperated in the review, Mueller did not possess all of the necessary production cost information. TUNA’s review was rescinded because there were no direct shipments, and Ternium opted not to participate in its own margin calculation. As a result, Commerce drew an adverse inference against Ternium (19 U.S.C. 1677e(b)), assigning an adverse facts available (AFA) dumping margin of 48.33 percent. Commerce identified the three sales transactions between TUNA and Mueller made at the greatest discount, where Mueller’s acquisition cost was the furthest below TUNA’s production cost, then inferred that all Ternium pipe that was sold to Mueller involved that discount for acquisition cost. Although there were other sales that were not discounted as significantly, Commerce did not use that data in calculating a new weighted average dumping rate for Mueller of 19.81 percent. Mueller filed suit, alleging that Commerce’s application of Ternium’s AFA to its calculation of the margin for Mueller, despite Mueller’s cooperation, was improper, and that Commerce should have calculated production costs using the entire TUNA data set. The Trade Court affirmed. The Federal Circuit vacated. While Commerce from drawing adverse inferences against a non-cooperating party that have collateral consequences for a cooperating party, in this case Commerce drew two adverse inferences and there is no direct adverse effect on Ternium from using an adverse inference as facts otherwise available in computing Mueller’s dumping margin. View "Mueller Comercial de Mexico v. United States" on Justia Law

Deckers imports Teva® Sports Sandals from Hong Kong. The sandals at issue do not have fully-enclosed uppers, but have rubber or plastic soles and cloth or textile straps; the toe and heel sections are open, and the upper sections do not fully enclose the foot. The Sports Sandals are intended to be used for athletic pursuits, such as running, jogging, hiking, canyoneering, and a variety of water-based activities. U.S. Customs and Border Protection Service liquidated the sandals under subheading 6404.19.35, of the Harmonized Tariff Schedule of the U.S. as: Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile material: Footwear with outer soles of rubber or plastics: Subheading 6404.19.35 is a “basket” provision for classification if merchandise cannot be classified under a more specific subheading in heading 6404. Products so classified are subject to a duty of 37.5% ad valorem. Deckers filed a protest, requesting that the Sport Sandals be classified as either 6404.11.80, or 6404.11.90, which included “sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like.” Deckers brought a test case before the Court of International Trade, which held that the Sports Sandals should be classified under subheading 6404.19.35. The Federal Circuit affirmed. The Trade Court declined to reopen; the Federal Circuit affirmed.View "Deckers Corp. v. United States" on Justia Law

Appellee, which manufactures and distributes specialized products for use in the defense, security, and aerospace industries, entered into a consultant agreement with Appellant, under which Appellant agreed to identify buyers for Appellee’s products. Three years later, Appellee acquired the rights to manufacture and sell RH1280B field-programmable gate array (“FPGA”)s, which are semiconductor integrated circuits that are used in satellites and other space equipment. Operating under the terms of the consultant agreement, Appellant found customers for RH1280B FPGAs, accepted delivery of the PFGAs, and resold the goods to its customers. Before Appellant accepted delivery, however, Appellee warned it that the RH1280Bs failed to meet certain specifications. Appellant subsequently refused to pay an outstanding balance of $1,800,000, alleging that Appellee breached its express warranty regarding the performance characteristics of the RH1280B. Thereafter, Appellee terminated the consultant agreement. The district court granted summary judgment in Appellee’s favor. The First Circuit Court of Appeals affirmed, holding that, under the circumstances of this case, the district court correctly granted summary judgment in Appellee’s favor. View "BAE Sys. Info. & Elec. Sys. Integration, Inc. v. SpaceKey Components, Inc." on Justia Law

Corporation, which owned corporate operating accounts at Bank, took out a loan and line of credit. Corporation passed a corporate resolution providing that unless it notified Bank within fourteen days of an improperly paid item in order to recover the payment, Bank would not be held liable for any error in Corporation’s account. Corporation later discovered that its bookkeeper had been forging signatures on certain Bank documents and had embezzled approximately $386,000 over the course of two years. Corporation sued Bank to prevent Bank from forcing repayment on the loans. Bank counterclaimed to recover amounts due under the loans. Supreme Court granted summary judgment for Bank, concluding that a bank and its customer may agree to shorten from one year to fourteen days the statutory time period under N.Y. U.C.C. Law 4-406(4) within which the customer must notify its bank of an improperly paid item in order to recover the payment thereon. The Court of Appeals affirmed as modified, holding (1) a customer and bank can contractually reduce section 4-406(4)’s one-year limitations period; and (2) shortening the one-year period to fourteen days was not manifestly unreasonable under the facts of this case. View "Clemente Bros. Contracting Corp. v Hafner-Milazzo" on Justia Law

Brothers Patrick and Thomas each owned one‐third of the stock of Commercial Light, a Chicago electrical contractor. Between 1982 and the 2008 sale of the company, Thomas was the CEO, board chairman, and president. The other officers were the company’s treasurer, and its executive vice‐president. The board of directors had only two members: Thomas and a lawyer. Patrick took no part in the company’s management. Patrick sued, claiming that when Morris became executive vice‐president in 1992, he, with Thomas’s approval, started jacking up the salaries and bonuses paid so that the compensation of the three officers soared, totaling $22 million between 1993 and 2000, and that the lawyer on the board rubber‐stamped Thomas’s compensation decisions. The Seventh Circuit affirmed a jury verdict finding breach of fiduciary duty. The jury did not have to find that the compensation was excessive in order to find a breach of fiduciary duty by concealment. Illinois allows as a remedy for breach of fiduciary duty a forfeiture of all the fiduciary’s earnings during the period of breach. The court speculated on why the highly-educated Patrick did not discover the concealment until several years after the sale, but noted that the appeal only concerned jury instructions. View "Halperin v. Halperin" on Justia Law

In 2010, Microsoft filed a complaint in the U.S. International Trade Commission, alleging that Motorola had violated the Tariff Act of 1930, 19 U.S.C. 1337, by importing mobile phones and tablets that infringe several Microsoft patents. The Commission instituted an investigation and, after an evidentiary hearing, the ALJ found that the accused Motorola products did not infringe the 054, 762, 376, or 133 patents and that Microsoft had failed to prove that the mobile devices on which it relied actually implemented those patents. The Commission upheld the ALJ’s findings, finding that Microsoft failed to prove that the Microsoft-supported products on which it relied for its domestic-industry showing actually practiced the patents. The Federal Circuit reversed in part, first affirming that Motorola does not infringe the 054 patent and that Microsoft failed to prove that a domestic industry exists for products protected by the 762 and 376 patents. With respect to the 133 patent the Commission relied on incorrect claim constructions in finding no infringement, the only basis for its finding no violation, for the main group of accused products. The court affirmed the noninfringement finding for the accused alternative design. View "Microsoft Corp. v. Int'l Trade Comm'n" on Justia Law