Appeal from U.S. Court of International Trade, Judge Maletz.
Before FRIEDMAN, Circuit Judge, BENNETT, Senior Circuit Judge, and SMITH, Circuit Judge.
This, hopefully, is the last chapter in the lengthy saga of the unsuccessful attempt by the appellee, Zenith Radio Corporation (Zenith), to prevent the government from carrying out agreements settling claims for antidumping duties the government assessed against the importers of Japanese color television sets into the United States. In connection with a preliminary injunction that Zenith obtained, the Court of International Trade required Zenith to post a $250,000 bond. After the Court of Customs and Patent Appeals held that the Court of International Trade had no authority to enter such an injunction, the government moved in the Court of International Trade for the assessment of damages on the injunction bond. That court refused to assess damages, and the government has appealed from that ruling. We affirm.
In 1971 the Secretary of the Treasury published T.D. 71-76, a "finding of dumping" that reported the Secretary's determination "that an industry in the United States is being injured by reason of the importation of television receiving sets, monochrome and color, from Japan sold at less than fair value within the meaning of section 201(a) of the Antidumping Act of 1921, as amended [then 19 U.S.C. § 160(a), now § 1673]." 5 Cust. Bull. 151, 152, 36 Fed. Reg. 4597 (1971).
Pursuant to that finding, dumping duties were assessed from 1973 to 1979 upon importers of color television receivers from Japan. In 1980, the Secretary of Commerce (to whom the administration of the antidumping laws had been transferred) entered into agreements with those importers under which the importers agreed to pay the government $77 million in settlement of their liability for the duties.
Zenith then filed suit in the Court of International Trade challenging the settlement agreements and seeking to invalidate them. Zenith argued that (1) the agreements were not authorized by 19 U.S.C. § 1617, which authorizes the Secretary to compromise "claim[s] arising under the customs laws," and, therefore, were ultra vires, and (2) the government officials who recommended and entered into the agreements acted arbitrarily, capriciously, and in bad faith. On Zenith's motion, the court entered a preliminary injunction prohibiting the government from implementing the settlement agreements. Zenith Radio Corp. v. United States, 1 C.I.T. 53, 505 F. Supp. 216 (CIT 1980). The court ruled that Zenith had "made out a substantial case on the merits of the second alternative cause of action alleging that Government officials . . . acted arbitrarily and in bad faith." Id. at 219.
The government moved to require Zenith to post a bond to indemnify the government for the loss it would suffer if the government ultimately prevailed in the suit, resulting from the delay in the government's receipt and use of the $77 million settlement. The government sought a bond of $11.5 million, equivalent to 15 percent interest on $77 million for one year. Based upon "all the circumstances," the Court of International Trade required Zenith to post a bond of $250,000 "to indemnify the defendant should it ultimately be determined that the defendant was wrongfully enjoined or restrained by the preliminary injunction issued by this court . . . ." Zenith Radio Corp. v. United States, 2 C.I.T. 8, 518 F. Supp. 1347, 1350 (CIT 1981).
A similar action, based on the same circumstances and arguments, was brought by the Committee to Preserve American Color Television ("COMPACT") in the United States Court of Appeals for the District of Columbia Circuit. That court entered a similar injunction against the government. The COMPACT suit was transferred to the Court of International Trade, and the District of Columbia Circuit dissolved its injunction.
The Court of International Trade granted summary judgment in favor of the government on the "ultra vires" counts in both cases. Zenith Radio Corp. v. United States, 1 C.I.T. 180, 509 F. Supp. 1282 (CIT 1981); COMPACT v. United States, 2 C.I.T. 208, 527 F. Supp. 341 (CIT 1981).
In connection with the remaining claim of bad faith, the court ordered the government to respond to Zenith's discovery requests, Zenith Radio Corp. v. United States, 1 C.I.T. 59 (CIT 1980), and to file the full administrative record and certain documents not part of that record, Zenith Radio Corp. v. United States, 1 C.I.T. 289 (CIT 1981). The Court of Customs and Patent appeals reversed the latter order and remanded the case to the Court of International Trade with directions to dismiss the action for lack of jurisdiction. Montgomery Ward & Co. v. Zenith Radio Corp., 69 C.C.P.A. 96, 673 F.2d 1254 (CCPA 1982). After the Supreme Court denied certiorari, 459 U.S. 943, 103 S. Ct. 256, 74 L. Ed. 2d 200 (1982), the Court of International Trade dissolved the preliminary injunction. Zenith Radio Corp. v. United States, 4 C.I.T. 201 (CIT 1982).
The government then moved for assessment of damages against Zenith's $250,000 bond. The Court of International Trade denied the motion. The court discussed five "equitable factors" that in its view bore upon the propriety of awarding damages. It ruled that Zenith "acted in good faith when it sought injunctive relief," that "the relative resources of the parties . . . do not tip the scales strongly in favor of or against assessment of damages," that for the reasons it gave "the court will not consider the factor of mitigation of damages," and that "Zenith's failure to win the underlying suit is not a significant factor in favor of assessment of damages." 643 F. Supp. at 1137-38. The court stated that the "most significant factor in Zenith's favor and the one upon which the court relies in denying assessment of damages, is"
the change in the law that took place after the preliminary injunction was issued and thus deprived Zenith of its day in court. That change was the decision by the court of appeals in Montgomery Ward & Co. v. Zenith Radio Corp., 69 C.C.P.A. 96, 673 F.2d 1254, cert. denied, 459 U.S. 943, 74 L. Ed. 2d 200, 103 S. Ct. 256 (1982). Montgomery Ward held that neither of the relevant statutes -- 28 U.S.C. §§ 1581(c) or (i) -- conferred jurisdiction on Zenith's claim of bad faith in the antidumping settlement. 69 CCPA at 104-11, 673 F.2d at 1260-65. While Montgomery Ward did not change the law in the ...