text:
    KEY BANK, Formerly Bankers Trust Company of Western New York v. Stuart L. CRAWFORD, et al.
    Civ. A. No. 83-1549.
    United States District Court, E.D. Pennsylvania.
    Jan. 23, 1985.
    Wilbur Greenberg, Philadelphia, Pa., for defendant Kutner Buick in interpleader action.
    Plaintiff Key Bank dismissed from inter-pleader action.
    Fred Greenberg, Philadelphia, Pa., for defendant Crawford in interpleader action.
   OPINION

JOSEPH S. LORD, III, Senior District Judge.

Findings of Fact

1. This interpleader action was brought by the Bankers Trust Company of Western New York, now called Key Bank, in the Western District of New York to determine whether Crawford or Kutner Buick, both defendants in interpleader, is entitled to the proceeds of a cashier’s check in the amount of $50,023.00. The action was transferred to the Eastern District of Pennsylvania pursuant to 28 U.S.C. § 1404(a), and the sum with interest has been deposited in the registry of the court.

2. Key Bank was dismissed as a party to this action on May 21, 1984. Chalfont Industries (“Chalfont”) was also an original party, but has submitted no claim in this proceeding.

3. Defendant Stuart Crawford (“Crawford”) is a citizen of the State of New York.

4. Defendant Kutner Buick is organized under the laws of Pennsylvania and has its principal place of business in Pennsylvania.

5. Crawford first visited Chalfont in mid-December, 1981.

6. Between mid-December, 1981 and mid-February, 1982, Crawford frequently contacted employees of Chalfont to discuss the possibility of his entering into a “Distribution Agreement” to sell its product, Stop-A-Flat, in North Carolina.

7. Between mid-December, 1981 and mid-February, 1982, various employees of Chalfont told Crawford that the company was in sound financial condition, that race car driver Bobby Unser was Chalfont’s national spokesperson, that an independent testing laboratory called the National Laboratory for Transportation Safety had tested Chalfont’s product, and that the area in which Crawford wished to distribute the product was “virgin territory”. Each of these statements was untrue at the time it was made.

8. In January, 1982, Crawford had his attorney, Martin Idzik, redraft the Distribution Agreement to clarify the “no-risk” buy-back provision which Crawford had discussed with employees of Chalfont.

9. On February 10, 1982, Crawford took the revised agreement his attorney had drafted to Chalfont’s office. While Crawford waited, Chalfont employee Dennis Mason took the agreement Crawford brought with him to Jerome Kutner, president of Chalfont. Mason then returned to Crawford with a document Kutner had signed, opened it to the signature page, and Crawford signed without reading the document although he had ample opportunity to do so. The agreement Crawford and Kutner signed was not the same one Crawford had brought with him and it did not contain a “no-risk” buy-back provision.

10. On February 10, 1982, Crawford drew a check for $42,023.00 payable to Chalfont Industries.

11. Chalfont endorsed this check over to Kutner Buick, Inc. but Crawford stopped payment on the check.

12. After further discussions with Jerome Kutner, Crawford instructed his son to send a $50,023.00 cashier’s check, dated February 17, 1982, to Chalfont by registered mail.

13. Crawford had knowledge of the character and essential terms of the instrument he instructed his son to send to Chalfont.

14. After the check was sent, Crawford had renewed misgivings about the venture. He attempted unsuccessfully to stop the check. On Monday, February 22, 1982, he went to the offices of Chalfont and informed Dennis Mason that he wanted to pick up the check when it arrived in the mail. Mason agreed to give Crawford the check, but informed him that it had not yet arrived. Crawford waited in Chalfont’s offices again on Tuesday, February 23, 1982, but was again informed that the cheek had not arrived.

15. In fact, the check had arrived at Chalfont’s offices on February 22, 1982, and Chalfont immediately endorsed it over to Kutner Buick.

16. Kutner Buick gave full and valid consideration for the cashier’s check Chalfont endorsed over to it.

17. The president of Kutner Buick was and is Jules Kutner, the father of Jerome Kutner.

18. On many occasions, Jules Kutner and/or Kutner Buick lent large sums of money to Chalfont Industries and cashed checks for Chalfont Industries.

19. On March 4, 1982, Chalfont filed a petition in the United States Bankruptcy Court for the Eastern District of Pennsylvania under Chapter 11 of the Bankruptcy Act. The proceeding was converted to a liquidation proceeding pursuant to Chapter 7 on August 8, 1982.

20. There is no evidence that Jules Kutner or any employee of Kutner Buick lacked good faith in accepting the assignment of the $50,023.00 cashier’s check.

21. There is no evidence that Jules Kutner or any employee of Kutner Buick knew or had reason to know of Crawford’s attempts to stop or reclaim the cashier’s check.

22. There is no evidence that Jules Kutner or any employee of Kutner Buick knew or had reason to know of the occurrence or substance of any conversations between Crawford and employees of Chalfont.

23. There is no evidence that the failure of Jules Kutner or any employee of Kutner Buick to make any inquiries about the cashier’s check stemmed from any desire to evade knowledge of Crawford’s efforts to stop the check.

24. There is no evidence that Jules Kutner or any employee of Kutner Buick knew or had reason to know that the redrafted agreement containing the “buy-back” clause had been altered before Crawford signed it.

Conclusions of Law

1. I have jurisdiction over the parties and the subject matter. 28 U.S.C. § 1335.

2. Kutner Buick is a holder in due course of the $50,023.00 cashier’s check dated February 17, 1982. Under 13 Pa.C.S.A. § 3302(a), a holder in due course is a holder who takes the instrument for value, in good faith, and without notice that it is overdue or has been dishonored or of any defenses against or claims to it on the part of any person.

3. The only relevant defenses that defeat the claim of a holder in due course are fraud in the factum and such illegality as would render the obligation of the party a nullity. 13 Pa.C.S.A. § 3305; Exchange International Leasing Corp. v. Consolidated Business Forms Co., 462 F.Supp. 626, 628 (W.D.Pa.1978).

4. I find no fraud in the factum. The instrument in question is the cashier’s check that Crawford sent to Chalfont Industries, not the underlying contract between Crawford and Chalfont. Crawford had knowledge of the character and terms of the cashier’s check when he secured it and when he instructed his son to mail-it.

5. I find no illegality sufficient to defeat the claim of a holder in due course. Crawford alleges the “Distribution Agreement” is a franchise agreement pursuant to 16 C.F.R. § 436.1 et seq. and that under that section, Chalfont was required to make certain disclosures to Crawford which it failed to make. Even assuming, without deciding, that the agreement is a franchise agreement, Chalfont’s failure to disclose information does not render the contract void ab initio. An agreement between parties which violates a statute is illegal, unenforceable, and void ab initio only if the subject of the agreement is specifically proscribed by statute. See O’Brien v. O’Brien Steel Construction Co., 440 Pa. 375, 379-80, 271 A.2d 254, 256 (1970); Fitzpatrick v. Shay, 314 Pa.Super. 450, 458-59, 461 A.2d 243, 247-48 (1983); Shafer v. A.I.T.S., Inc., 285 Pa.Super. 490, 494, 428 A.2d 152, 154 (1981). It may be that Crawford as victim of the illegality could unilaterally disavow the contract, but clearly Jerome Kutner, as the perpetrator of the violation, could not use his own dereliction as a defense. Ergo, while Chalfont’s failure to disclose may render the contract voidable, the contract does not require any wrongdoing and is therefore not void. {See U.C.C. § 3-305 Official Comment, II 5: “If under the local law the effect is to render the obligation of the instrument entirely null and void, the defense may be asserted against a holder in due course. If the effect is merely to render the obligation voidable at the election of the obligor, the defense is cut off.”)

6. Kutner Buick is entitled to the proceeds of the $50,023.00 cashier’s check because Crawford failed to establish any real defenses to defeat Kutner Buick’s claim as a holder in due course.

      . There is no dispute that Kutner Buick paid full value for the cashier’s check. In Pennsylvania, the proper test for determining good faith is not one of negligence or a duty to inquire, but rather one of willful dishonesty or actual knowledge. Valley Bank & Trust Co. v. American Utilities, Inc., 415 F.Supp. 298, 301 (E.D.Pa.1976); First National Bank of Blairstown v. Goldberg, 340 Pa. 337, 340, 17 A.2d 377, 378-79 (1941). A person has notice of a fact when he has reason to know that it exists, based on all the facts and circumstances known to him at that time. Federal Deposit Insurance Corp. v. Barness, 484 F.Supp. 1134, 1145 (E.D.Pa.1980). Although Jules Kutner was in frequent contact with his son and might have been privy to information about Chalfont’s disasterous financial condition and fraudulent practices, there is simply no evidence that he or his employees engaged in willful dishonesty or knew or had reason to know of the particular transactions between Crawford and Chalfont.


source: Caselaw Access Project

author: NEWMAN, Senior Judge:

license: Public Domain

text:
    SILVER REED AMERICA, INC. and Silver Seiko, Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Smith-Corona Group, Consumer Products Division, SCM Corporation, Intervenor.
    Court No. 80-6-00934.
    Slip Op. 84-137.
    United States Court of International Trade.
    Dec. 20, 1984.

      Wald, Harkrader & Ross, Washington, D.C. (Christopher Dunn, William J. Clinton and William E. Shimer, Washington, D.C., of counsel), for plaintiffs.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C., and Velta A. Melnbrencis, New York City, for defendant.
    Stewart & Stewart, Washington, D.C. (Eugene L. Stewart, Terence P. Stewart and James R. Cannon, Jr., Washington, D.C., Edwin Silverstone, New York City and Robert E. Walton, Washington, D.C., of counsel), for intervenor Smith-Corona Group, Consumer Products Division, SCM Corporation.
    Tanaka, Walders & Ritger, Washington, D.C., (H. William Tanaka and Lawrence R. Walders, Washington, D.C., of counsel) for applicants to intervene Brother Industries, Ltd. and Brother International Corporation.
   Opinion and Order on Application for Intervention

NEWMAN, Senior Judge:

Introduction

Brother Industries, Ltd. and Brother International Corporation (collectively “Brother”) seek leave to intervene in this action as a matter of right pursuant to 28 U.S.C. § 2631(j)(l)(B) and Rule 24(a)(1) of the Rules of the Court of International Trade. Attached to Brother’s motion to intervene is a proposed complaint eontesting the application by the United States Department of Commerce, International Trade Administration (“ITA”) of the exporter’s sales price (“ESP”) offset “cap” (19 CFR § 353.15(c)) in determining the foreign market value of Brother’s portable electric typewriters (“PETs”) from Japan in ITA’s antidumping investigation. Brother seeks intervention solely for the purpose of enjoining liquidation of its entries of PETs pending a final decision in this case.

The Government and Smith Corona Group, Consumer Products Division, SCM Corporation (“SCM”) oppose Brother’s motion to intervene. Silver Reed America, Inc. and Silver Seiko, Ltd. (collectively “Silver”) have filed no response to Brother’s motion.

Background

On March 21, 1980 ITA published its final affirmative determination of sales at less than fair value (“SLTFV”) with respect to PETs from Japan exported by Brother Industries, Ltd., Silver Seiko, Ltd. and Nakajima All Co., Ltd. (45 Fed.Reg. 18416). Brother participated in the anti-dumping proceedings before ITA. On May 7, 1980 the United States International Trade Commission published its' final affirmative injury determination respecting PETs from Japan (45 Fed.Reg. 30186). Subsequently, on May 9, 1980 ITA published an antidumping duty order (45 Fed.Reg. 30618).

Silver commenced this action on June 6, 1980 under section 516A(a)(2) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2), to contest ITA’s final affirmative determination of SLTFV and anti-dumping duty order respecting PETs from Japan. Silver challenges ITA’s determination primarily on the ground that the limitation upon the ESP offset or “cap” in 19 CFR § 353.15(c) is invalid, and therefore, in comparing foreign market value with the exporter’s sales prices, ITA erred in limiting the deduction of home market selling expenses in Japan to the amount of the selling expenses incurred in the United States market. SCM, the sole domestic manufacturer of PETs, has intervened in this action as a party defendant.

On February 1, 1984 this Court sustained Silver’s challenge to the March 21, 1980 LTFY determination, holding invalid the ESP offset cap in 19 CFR § 353.15(c) and remanded to ITA for redetermination of the offset adjustment in accordance with the Court’s decision. 7 CIT —, 581 F.Supp. 1290. By order of March 9, 1984, this Court granted defendant’s motion for a stay of the remand order of February 1, 1984 (581 F.Supp. 1290); and on March 16, 1984 granted SCM’s motion for certification of the question of the validity of the ESP offset cap for an immediate appeal. Thereafter, on April 5, 1984 the Court of Appeals for the Federal Circuit (“CAFC”) granted SCM permission to file an immediate appeal; and on April 17, 1984 an appeal was filed by SCM (CAFC Appeal No. 84-1118), which is now pending.

Following its successful litigation on the merits in the instant case, the stay of the remand, and pending SCM’s interlocutory appeal, Silver sought to enjoin liquidation of all its entries covered by the May 9,1980 antidumping duty order from January 4, 1980 (the date liquidation was first suspended) to the date notice of this Court’s final judgment is published or until final disposition of this case on appeal. On June 21, 1984 this Court issued an opinion and order granting Silver’s motion for injunctive relief. 7 CIT —, 590 F.Supp. 1254.

On September 27, 1984 Brother filed its motion to intervene in this action. As noted supra, Brother’s motion is opposed by the Government and SCM, but Silver has taken no position respecting Brother’s application.

Contentions

Defendant argues: first, that the Court lacks jurisdiction to consider Brother’s motion because this action is now pending before the CAFC; alternatively, defendant contends that even if this Court possesses jurisdiction, Brother’s motion should be denied because it is untimely and would prejudice existing parties by enlarging the scope of the action.

Brother maintains that the Court possesses jurisdiction to permit intervention since the appeal to the CAFC is interlocutory and no final judgment has been entered in this case. Additionally, Brother emphasizes that pursuant to 28 U.S.C. § 2631(j)(1)(B) its intervention is a matter of right and must be granted, absent prejudice to the present parties. Brother insists that intervention at this juncture will not prejudice the parties to the litigation since no new issue has been raised by its proposed complaint.

The Court agrees with Brother’s contentions, and its application to intervene is granted.

Jurisdiction

As mentioned supra, defendant contends that this Court lacks jurisdiction to consider Brother’s motion for intervention in light of the pendency of SCM’s appeal in this action. In support of that contention, defendant cites, inter alia, Avoyelles Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 927-929 (5th Cir.1983). There, the Court stated at 928:

This circuit follows the general rule that the filing of a valid notice of appeal from a final order of the district court divests that court of jurisdiction to act on the matters involved in the appeal, except to aid the appeal, correct clerical errors, or enforce its judgment so long as the judgment has not been stayed or superceded. [Emphasis added.]

A final order has not been issued in this case. SCM’s appeal was filed in conformance with 28 U.S.C. § 1292(d)(1) which gives the CAFC jurisdiction of an appeal from an interlocutory order of this Court when such order includes “a statement that a controlling question of law is involved with respect to which there is a substantial ground for difference of opinion and that an immediate appeal from that order may materially advance the ultimate termination of the litigation.” The foregoing statement was issued by this Court in response to SCM’s request, and as previously mentioned, the CAFC granted SCM permission to file an interlocutory appeal.

Section 1292(d)(3) makes it clear that an interlocutory appeal does not divest the Court of International Trade of jurisdiction over further proceedings in the action. So far as pertinent, that subsection reads:

(3) Neither the application for nor the granting of an appeal under this subsection shall stay proceedings in the Court of International Trade * * *, unless a stay is ordered by a judge of the Court of International Trade or * * * by the United States Court of Appeals for the Federal Circuit or a judge of that court.

Thus, by the terms of the statute, the granting of SCM’s interlocutory appeal did not stay proceedings in this Court or divest the Court of jurisdiction. Indeed, this Court’s stay of proceedings in its order of March 9, 1984 concerned only the remand order of February 1, 1984 (581 F.Supp. 1290). Consequently, this Court concludes that it still retains jurisdiction in this case and may consider Brother’s motion to intervene.

Timeliness

Defendant contends that even if this Court has jurisdiction to consider Brother’s motion, it should nevertheless deny the motion on the ground that it is not timely.

Initially, it should be observed that Brother has moved to intervene as a matter of right pursuant to 28 U.S.C. § 2631(j)(l)(B), and the statute imposes no definitive deadline on intervention. Nonetheless, under Rule 24(a) of the Rules of the Court, an application to intervene as of right must be “timely”, and “[timeliness is to be determined from all the circumstances”. NAACP v. New York, 413 U.S. 345, 365, 93 S.Ct. 2591, 2602, 37 L.Ed.2d 648 (1973).

In Sumitomo Metal Industries, Ltd. v. Babcock & Wilcox Co., 669 F.2d 703, 707 (CCPA 1982), Judge Nies, writing for our Appellate Court, cogently enumerated the relevant factors which must be considered in determining whether an application for intervention is “timely”:

(1) the length of time during which the would-be intervenor actually knew or reasonably should have known of his right to intervene in the case before he applied to intervene; [footnote omitted]
(2) whether the prejudice to the rights of existing parties by allowing intervention outweighs the prejudice to the would-be intervenor by denying intervention. [footnote omitted]
(3) existence of unusual circumstances militating either for or against a determination that the application is timely, [footnote omitted]

In Sumitomo, the Appellate Court further stressed that “[t]he question of timeliness is largely committed to the discretion of the trial court and will not be overturned unless it can be shown that that discretion was abused.” Id. at 707, citing NAACP v. New York, 413 U.S. at 366, 93 S.Ct. at 2603.

Regarding the first of the three factors enumerated in Sumitomo, the Appellate Court noted: “In order to determine whether an application for intervention is timely, consideration must first be given to when the right to intervene actually arose. Timeliness must be judged from that date. * * * Under Rule 24(a)(1), a person’s right to intervene arises upon institution of the proceeding”. Id. at 707, 708.

In the present case, it is clear that Brother’s statutory right to intervene has been present since the action was commenced by Silver. Brother does not dispute that it has been aware of the pendency of this action since its commencement by Silver in June 1980. As previously noted, Brother’s motion to intervene was filed more than four years after its right to intervene arose and was known, after the stay of remand, and after the filing of an interlocutory appeal. Hence, it is plain that in terms of the passage of time and the present stage of the litigation, Brother’s application comes very late indeed. “An application to intervene by a statutory right filed [more than four years] into a proceeding and after significant decisions have been rendered by the court, is not in a favorable posture to be granted. However, even without any explanation for the delay, we would have to weigh the prejudice to the parties and consider any unusual circumstances which might lead to the conclusion that the motion for intervention must be granted.” Sumitomo, supra, 669 F.2d at 708 (emphasis added).

Prejudice

The question of whether an application for intervention is timely under Fed. R.Civ.P. 24 must be answered in light of all the relevant facts and circumstances of the particular case. NAACP v. New York, 413 U.S. at 366, 93 S.Ct. at 2603. Prejudice to existing parties to the litigation is “perhaps the most important factor in determining timeliness of [an application] to intervene as of right.” Sumitomo, 669 F.2d at 708-9, quoting from Petrol Stops Northwest v. Continental Oil Co., 647 F.2d 1005, 1010 (9th Cir.1981). “Accordingly, the prejudice which existing parties to the litigation may suffer as a result of the would-be intervenor’s failure to intervene when the right to intervene arose must be balanced against the prejudice the would-be intervenor may suffer if intervention is denied.” Sumitomo, 669 F.2d at 709. Moreover, the timeliness requirement for intervention is not intended to punish an applicant for not acting more promptly, but rather is designed to insure that the original parties should not be prejudiced by the applicant’s failure to apply sooner. McDonald v. E.J. Lavino Co., 430 F.2d 1065 (5th Cir.1970). Prejudice may well be the only significant consideration when the applicant seeks intervention of right, because intervention should be granted unless it would work a hardship on any of the existing parties. McDonald v. E.J. Lavino, supra.

Defendant maintains that “granting Brothers’ motion would clearly prejudice the United States because thereby this court would be permitting Brothers to enlarge the scope of this action to encompass Brothers’ PETs.” (Brief, at 8-9). In support of its position, defendant cites Nakajima All Co., Ltd. v. United States, 2 CIT 170 (1981), and Fuji Electric Co., Ltd. v. United States, 7 CIT —, 595 F.Supp. 1152 (1984) for the proposition that “an intervenor should not be permitted to enlarge the scope of the existing action.” (Mem. at 8-9). However, defendant’s reliance upon Nakajima All and Fuji is misplaced, since those cases involved attempts by intervenors to enlarge the scope of the actions by adding new issues, and not an attempt to merely enjoin liquidation of their entries, as Brother proposes to do here.

In Nakajima All, of critical importance, the intervenor attempted to add a new issue to the case by moving to amend its answer to interpose a cross-claim contesting ITA’s failure to use the “constructed value” method of calculating foreign market value. The intervenor had raised, but subsequently abandoned, that issue in the administrative proceedings. This Court pointed out that the other parties to the action would be prejudiced if the intervenor were permitted to revive its contention respecting constructed value, which it had previously abandoned during the administrative proceedings. Additionally, this Court held that the intervenor could not circumvent the statutory time limitation for contesting an antidumping duty determination by simply making a cross-claim when the time for commencing an action had expired.

The current case, then, is readily distinguishable from Nakajima All since Brother is not seeking to litigate any issue that has not already been raised and litigated by the parties and decided by this Court. Consequently, the time limitation under section 1516a(a)(2) for contesting an antidumping duty determination, which would bar assertion of a distinctly new claim, is inapplicable to the claim made by Brother in its proposed complaint (viz., invalidity of the ESP offset cap under 19 CFR § 353.15(c)).

It should also be pointed out that the circumstances in the present case are entirely unlike those presented in Sumitomo, supra, where intervention was denied because it probably would have resulted in setting aside an agreement that had been reached between the parties. 669 F.2d at 709.

And Fuji squarely supports Brother’s contention. There, the Court refused to allow the intervenor to interpose five claims raising matters not previously set forth in the pleadings, but significantly, the Court granted the motion to intervene respecting four claims in the intervenor’s complaint that were already before the Court, even though the motion to intervene was filed seven months after the date of publication of the administrative determination under review. The Court recognized that while interested parties have a right to appear and be heard, they may not do so in contravention of the time limitation imposed by the statutory provisions; and that after the expiration of the statutory time limitation in section 1516a, an intervenor “takes the action as it has been framed by the parties therein.” 18 Cust.Bull. No. 21, at p. 40 (May 23, 1984).

The short of the matter is that in Nakajima All and Fuji the Court refused to enlarge the scope of the existing action to the extent that new issues were sought to be raised after the expiration of the time period prescribed by 19 U.S.C. § 1516a for commencing an independent action. In this case, Brother seeks merely to take the action as it has been framed by the present parties, and does not seek to raise any new issue whatever. An examination of Brother’s proposed complaint discloses that the only issue raised is the validity of the ESP offset cap. But that issue has already been decided by this Court, and Brother does not propose to relitigate that issue. Brother seeks intervention in this action solely for the purpose of enjoining liquidation of its entries pending a final decision in this case.

Since Brother does not seek intervention for the purpose of setting aside the results of this litigation or raising a new issue, this Court sees no prejudice to the present parties simply because injunctive relief would make Brother’s entries subject to liquidation in accordance with the final decision in this case. See 19 U.S.C. § 1516a(c). To the extent that intervention by Brother would simply add an additional party plaintiff to this action without raising any new claims or issues, there is no enlargement of the action in contravention of section 1516a. See Fuji, supra.

Notwithstanding Brother’s long delay in seeking intervention in this case, and the present stage of this litigation, the Court finds no prejudice to the present parties under the circumstances presented. On the other hand, Brother could be subject to substantial prejudice if its motion to intervene is denied. ITA applied the ESP offset cap to Brother’s entries of PETs as well as to Silver’s entries. If the Court of Appeals affirms this Court’s decision, the offset cap will be invalid as a matter of law. Nevertheless, all entries of Brother’s PETs that are entered or withdrawn from warehouse for consumption prior to publication of the Court of Appeals decision will be liquidated in conformance with the administrative determination unless liquidation is enjoined by this Court. 19 U.S.C. § 1516a(c). Cf. Rhone Poulenc, S.A. v. United States, 7 CIT —, 583 F.Supp. 607 (1984) (Court permitted amendment of complaint challenging ESP offset cap, expressing concern regarding the application of a possibly invalid regulation and the harm that could cause to plaintiff).

Under all the facts and circumstances in this case, it is ordered that Brother’s motion to intervene is granted.

      . Brother Industries, Ltd. is a Japanese manufacturer of portable electric typewriters and Brother International Corporation is a related firm that imports such merchandise from Japan.

      . Accompanying Brother’s motion for intervention is its motion for an injunction to prevent liquidation of all entries of Brother’s PETs from Japan covered by an antidumping duty order issued by ITA on May 9, 1980 (45 Fed.Reg. 30618), and entered or withdrawn from warehouse for consumption from January 4, 1980, when liquidation was first suspended, until and including the date of publication in the Federal Register of a notice of the final judgment in this action.

      . On September 12, 1984 the briefing by all parties was completed and argument was heard by the CAFC on November 8, 1984.

      . Brother was a party to the administrative proceeding before ITA which is under review in this action, and there is no dispute that Brother has standing {viz., is an “interested party”) to intervene pursuant to § 2631(j)(l)(B).

      . Interestingly, relative to the Court’s duty to consider whether intervention is prejudicial to the rights of the original parties, it is observed that in 28 U.S.C. § 2631(j)(2) Congress expressly referred only to "those civil actions in which intervention is by leave of court." (Emphasis added.) The statute is silent on the matter of prejudice respecting cases where intervention is a matter of right. However, under Rule 24(a) the Court must consider whether an application to intervene as of right is timely, and in that connection the Court must consider whether intervention would prejudice the rights of existing parties. Sumitomo, supra. Hence, despite the reference in section 2631(j)(2) to intervention "by leave- of Court,” we must consider the factor of prejudice to existing parties in cases where intervention is sought "as a matter of right.”

      . The distinction between intervention and institution of an independent action was clearly delineated in Ceramica Regiomontana, S.A and Industrias Intercontinental, S.A v. United States, 7 CIT —, 590 F.Supp. 1260 (1984). While an interested party to the administrative proceeding frequently has an option to commence an independent action or intervene in an existing action, the intervention route after the time has expired under 19 U.S.C. § 1516a to commence an independent action has implications respecting the issues the intervenor may raise, as is illustrated by Fuji.


author: BERNARD NEWMAN, Senior Judge:

text:
    SILVER REED AMERICA, INC. and Silver Seiko, Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Smith-Corona Group, Consumer Products Division, SCM Corporation, Intervenor.
    Court No. 83-10-01522.
    United States Court of International Trade.
    Jan. 4, 1985.

      Wald, Harkrader & Ross, Washington, D.C. (Christopher Dunn, William J. Clinton and William E. Shimer, Washington, D.C., of counsel), for plaintiffs.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C., and Velta A. Melnbrencis, New York City, for defendant.
    Stewart & Stewart, Washington, D.C. (Eugene L. Stewart, Terence P. Stewart and James R. Cannon, Jr., Washington, D.C., Edwin Silverstone, New York City, and Robert E. Walton, Washington, D.C., of counsel), for intervenor Smith-Corona Group, Consumer Products Division, SCM Corporation.
    Tanaka, Walders & Ritger, Washington, D.C. (H. William Tanaka and Lawrence R. Walders, Washington, D.C., of counsel), for applicants Brother Industries, Ltd. and Brother International Corporation.
   BERNARD NEWMAN, Senior Judge:

Introduction

Brother Industries, Ltd. and Brother International Corporation (collectively “Brother”) seek intervention as a matter of right in accordance with 28 U.S.C. § 2631(j)(1)(B) and Rule 24(a)(1) of the rules of the Court. Annexed to Brother’s motion to intervene is a proposed complaint contesting the final determination of the United States Department of Commerce, International Trade Administration (ÍTA) in its administrative review pursuant to section 751 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675 (section 751), of the anti-dumping duty order covering portable electric typewriters (PETs) from Japan. 48 Fed.Reg. 40761 (September 9, 1983). Specifically, Brother claims that ITA erred in its administrative review by applying the exporter’s sales price (ESP) “offset cap” of 19 CFR § 353.15(c) in determining the foreign market value of Brother’s PETs. Brother now seeks to intervene “for the limited purpose of obtaining an injunction against liquidation of its entries pending a final decision on the validity of the ESP offset cap and for redetermination of its [sic] foreign market value if the ESP offset cap is finally held to be invalid.” Brother’s motion at 4.

The Government and Smith-Corona Group, Consumer Products Division, SCM Corporation (SCM) oppose Brother’s application, while Silver Reed America, Inc. and Silver Seiko, Ltd. (collectively “Silver”) have not responded to Brother’s application.

Background

On September 9, 1983 ITA published the final results of its administrative review conducted pursuant to section 751 covering PETs from Japan exported to the United States by Brother Industries, Ltd., Silver Seiko, Ltd. and Nakajima All Co., Ltd. (Nakajima), 48 Fed.Reg'. 40761. Brother participated in the section 751 review proceedings before ITA.

Silver commenced an action on October 11, 1983 under Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended (“the Act”), 19 U.S.C. § 1516a(a)(2)(B)(iii), contesting the results of ITA’s section 751 review in several respects. Included in Silver’s complaint is the claim that in calculating foreign market value, ITA erred by limiting the deduction of home market selling expenses to the amount of selling expenses in the United States pursuant to the ESP “offset cap” in 19 CFR § 353.15(c). Silver contends that the offset cap prescribed by the regulation is invalid.

Silver raised the same issue respecting the validity of the offset cap in an earlier action, Court No. 80-6-00934, contesting ITA’s final affirmative determination of sales at less than fair value and the anti-dumping duty order covering PETs from Japan (Silver I). In Silver Reed America, Inc. v. United States, 7 CIT —, 581 F.Supp. 1290 (1984), CAFC Appeal No. 84-1118 pending, this Court sustained Silver’s contention finding the ESP offset cap invalid and remanded to ITA for redetermination of the offset adjustment in conformance with the Court’s decision. By order of March 9, 1984 this Court granted defendant’s motion for a stay of the remand, and on March 16, 1984 granted SCM’s motion for certification of the ESP offset cap question for immediate appeal. Thereafter, on April 5,1984 the Court of Appeals for the Federal Circuit granted SCM permission to file an immediate appeal; on April 17, 1984 SCM filed its appeal (CAFC Appeal No. 84-1118), which is now pending.

Following successful litigation on the merits in Silver I, the stay of the remand, and pending SCM’s appeal, Silver sought to enjoin liquidation of its entries covered by the May 9, 1980 antidumping duty order from January 4, 1980 (the date liquidation was first suspended) to the date notice of this Court's final judgment in that action is published or until final disposition on appeal. In due course, Silver’s motion for injunctive relief was granted by opinion and order dated June 21, 1984. 7 CIT —, 590 F.Supp. 1254. On September 27, 1984 Brother moved to intervene in Silver I for the sole purpose of seeking to enjoin liquidation of its entries — the very reason that Brother has given in its present application. Recently, on December 20, 1984, this Court granted Brother’s application to intervene in Silver I. 7 CIT —, 600 F.Supp. 846.

SCM commenced its own action, Court No. 83-10-01463, to contest the results of ITA’s section 751 review of the antidumping duty order covering PETs from Japan. The gravamen of SCM’s complaint is that ITA erred in permitting adjustments for differences in circumstances of sales notwithstanding information that differences in prices in the United States and Japanese markets were not due to the claimed differences in circumstances of sale. Consequently, it is SCM’s contention that ITA’s determination was contrary to section 773(a)(4) of the Act, 19 U.S.C. § 1677b(a)(4) and 19 CFR § 353.15(a).

On December 14, 1983 Brother moved to intervene in SCM’s action on the side of the Government to defend ITA’s final results against the allegations in SCM’s complaint to the extent that those allegtions affected Brother’s PETs. Significantly, as more fully discussed below, Brother intervened in SCM’s action well after the thirty days within which it could have challenged ITA’s final results of September 9, 1983 had it contested those results in its own case under section 516A(a)(2), 19 U.S.C. § 1516a(a)(2). Hence, in SCM’s action Brother did not — and could not — raise any issue respecting the ESP offset cap question which was not then raised by the existing parties. By order of January 5, 1984 Brother’s motion to intervene in SCM’s action was granted. Silver and Nakajima similarly intervened in SCM’s case to uphold ITA’s final results.

On November 28, 1983 Silver moved to consolidate SCM’s action, Court No. 83-10-01463, with its own action, Court No. 83-10-01522. Silver’s motion was granted on December 20, 1983 and both actions challenging the results of ITA’s section 751 review are sub judice in Consolidated Court No. 83-10-01522.

By its motion of September 27, 1984, presently before the Court, Brother now seeks intervention in Silver’s action. As noted above, Brother’s application is opposed by defendant and SCM. Silver has not responded to Brother’s application.

Contentions

Defendant argues that Brother’s motion should be denied because it is untimely and would prejudice the existing parties by enlarging the scope of the action to encompass entries of Brother’s PETs. Moreover, defendant insists that Brother’s proposed claim concerning the validity of the offset cap is barred since Brother failed to institute its own action contesting ITA’s final results within the thirty day period provided by 19 U.S.C. § 1516a(a)(2). Lastly, defendant asserts that Brother has already intervened in the consolidated action on the side of the Government in defense of ITA’s final results and must now be deemed to have waived its ground for challenging ITA’s determination.

SCM agrees with defendant that Brother’s motion should be denied to the extent that Brother seeks to extend the scope of the action to encompass entries of Brother’s PETs not currently at issue.

Brother insists that its intervention under 28 U.S.C. § 2631(j)(l)(B) is a matter of right and must be granted absent prejudice to the present parties. Further, Brother maintains that intervention at this point will not prejudice the parties since no new issues are raised by its proposed complaint and because Brother does not seek to otherwise interfere with the progress of this case.

For the reasons that follow, Brother’s motion to intervene is granted.

Discussion

As mentioned above, defendant contends that Brother’s motion should be denied as untimely. In this connection, defendant points up that Brother’s motion was brought more than an entire year after the publication of ITA’s final results that are challenged here.

Initially, it should be noted that Brother has moved to intervene as a matter of right pursuant to 28 U.S.C. § 2631(j)(1)(B) and that statute imposes no definitive deadline on intervention. Nevertheless, under Court of International Trade Rule 24(a), an application to intervene as of right must be “timely”, and “[t]imeliness is to be determined from all the circumstances”. NAACP v. New York, 413 U.S. 345, 365, 93 S.Ct. 2591, 2602, 37 L.Ed.2d 648 (1972).

Brother’s application finds support in Sumitomo Metal Industries, Ltd. v. Babcock & Wilcox Co., 669 F.2d 703 (CCPA 1982) where Judge Nies writing for our Appellate Court observed that:

[Prejudice to existing parties to the litigation is “perhaps the most important factor in determining timeliness of [an application] to intervene as of right.” Petrol Stops Northwest v. Continental Oil Co., 647 F.2d 1005, 1010 (CA 9, 1981). Accord, McDonald v. E.J. Lavino Co. [430 F.2d 1065, 1072 (CA 5, 1970) ]. Accordingly, the prejudice which existing parties to the litigation may suffer as a result of the would-be intervenor’s failure to intervene when the right to intervene arose must be balanced against the prejudice the would-be intervenor may suffer if intervention is denied.

669 F.2d at 708-9.

Moreover, the timeliness requirement for intervention is not intended to punish an applicant for not acting more promptly, but rather is designed to insure that the original parties are not prejudiced by the delay. McDonald v. E.J. Lavino Co., 430 F.2d 1065 (5th Cir.1970).

As illustrated by Sumitomo, supra, the fact that Brother seeks to intervene more than one year from the publication of ITA’s results, in and of itself, will not serve to bar Brother’s application as untimely without first considering the question of prejudice to the existing parties. Relative to that question, the rationale in this Court’s recent opinion in Silver Reed America, Inc. v. United States, 7 CIT —, 600 F.Supp. 846 (1984) is fully applicable here.

In an apparent attempt to demonstrate prejudice, defendant and SCM urge that Brother is now seeking by intervention to enlarge the scope of Silver’s action to include Brother’s own entries in contravention of the thirty day period provided by 19 U.S.C. § 1516a(a)(2) for instituting an independent action.

In essence, then, the question posed is whether Brother was required to institute an action of its own challenging ITA’s final results or whether Brother has the right to intervene in Silver’s action. The short answer is that Brother’s right under 28 U.S.C. § 2631(j)(l)(B) to intervene in Silver’s action contesting the results of the section 751 review is separate and distinct from any right it may have had to initiate its own independent action.

The distinction between intervention and the institution of an independent action was clearly delineated in Ceramica Regiomontana, S.A. and Industrias Intercontinental, S.A. v. United States, et al., 7 CIT —, 590 F.Supp. 1260 (1984) where the Court stated:

Congress, in enacting the Trade Agreements Act of 1979 and the Customs Courts Act of 1980, provided interested parties, who participated in the administrative proceeding below, with two separate and distinct rights to challenge the results of that proceeding. First, an aggrieved interested party may file a summons with this Court thereby commencing its own independent action pursuant to 19 U.S.C. § 516A(a) [sic] and 28 U.S.C. § 1581(c). Second, an aggrieved interested party may await the institution of a lawsuit by another interested party, and then seek to intervene as a matter of right under 28 U.S.C. § 2631(j)(1)(B) and Rule 24(a)(1).
7 CIT at —, 590 F.Supp. at 1264 (emphasis added).

Continuing, in Cerámica it was noted that “in view of the clear Congressional intent, this court cannot mandate that an aggrieved interested party must institute its own action rather than seek to intervene.” Id. at —, 590 F.Supp. at 1265.

Cerámica establishes that Brother was not limited to the filing of its own action under section 516A to contest ITA’s final results of its administrative review. Brother also has a separate and independent right to challenge ITA’s determination by timely intervention under 28 U.S.C. § 2631(j)(1)(B) and Rule 24(a)(1), for which there is no deadline as long as there is no prejudice to the parties already in the action.

Defendant’s reliance upon Nakajima All Co., Ltd. v. United States, et al., 2 CIT 170 (1981) and Fuji Electric Co., Ltd., et al. v. United States, 7 CIT —, 595 F.Supp. 1152 (1984) is misplaced. Unlike the intervenors in those cases, Brother does not seek to raise any issue that is not already before the court.

In Nakajima, the Court found that the existing parties to the litigation would be prejudiced if the intervenor were permitted to revive the constructed value claim it had previously abandoned during the administrative proceedings. By sharp contrast, the ESP offset cap issue is already at issue in Silver’s case.

Fuji similarly supports Brother’s position. There, the Court refused to allow the intervenor to raise five claims involving matters that had not previously been presented by the existing parties. Significantly, however, the Court granted the motion to intervene with respect to four other claims in the intervenor’s complaint which were already before the Court, even though the motion to intervene was filed seven months after the date of publication of the determination — well after the thirty day limitation of section 516. The Court held: “Accordingly, Hitachi appearing as intervenor, takes the action as it has been framed by the parties therein. It appears Hitachi may intervene as a matter of right, and accordingly that portion of said motion is granted.” 7 CIT at —, 595 F.Supp. at 1154 (emphasis added).

Here also, Brother simply seeks to take the action as it has been framed by the present parties. It bears repetition to state that Brother does not seek to raise any new issues.

Defendant’s and SCM’s contentions that Brother impermissibly seeks to extend the scope of this action to encompass entries of Brother’s PETs are plainly without merit. Unlike the circumstances in Nakajima and Fuji, where the Court refused to enlarge the scope of the existing action to the extent new issues were sought to be raised after the expiration of the time period prescribed by section 516A, Brother’s proposed complaint here raises only the ESP offset cap question which, as we have seen, is already the subject of Silver’s action. Obviously then, Brother does not seek to enlarge the scope of Silver’s action by adding new issues, but rather merely seeks to enjoin liquidation of their entries. See this Court’s recent opinion in Silver I; Silver Reed America, Inc. and Silver Seiko, Ltd. v. United States, 7 CIT —, 600 F.Supp. 846 (1984).

The present parties to this litigation would in no way be prejudiced by Brother’s intervention since Brother does not seek to raise any new issues or to otherwise interfere with the progress of the litigation. If Brother’s motion for intervention and motion for injunction are granted, the sole result would be to preserve the status quo with respect to Brother’s PETs so as to prevent the assessment of antidumping duties on the basis of a possibly invalid regulation.

Defendant argues, that by intervening in SCM’s case (Court No. 83-10-01463), Brother has already intervened in the consolidated action and is therefore barred from intervening “more than once in what has become, through consolidation, one action.” Defendant’s brief at 9. Importantly, however, defendant offers no authority for its view that SCM’s and Silver’s cases have merged into “one action” through their consolidation. On the contrary, research reveals an absence of authority in support of defendant’s contention. The teaching of the Supreme Court on this point is that consolidation “does not merge the suits into a single cause, change the rights of the parties, or make those who are parties in one suit parties in another.” Johnson v. Manhattan Ry., 289 U.S. 479, 496, 53 S.Ct. 721, 727, 77 L.Ed. 1331 (1933). The Court concludes, therefore, that Brother’s prior intervention in SCM’s action and does not bar its present application.

Turning to defendant’s waiver contention, it is true that Brother has intervened in SCM’s action (Court No. 83-10-01463) on the side of the Government in defense of ITA’s final results. But, as noted supra, SCM’s action does not concern the ESP offset cap of 19 CFR § 353(c). Since Brother’s intervention in SCM’s action came well after the thirty days within which it could have brought its own action contesting ITA’s final results under section 516A, Brother could not assert its present claim concerning the validity of the offset cap in SCM’s case. The fact that Brother previously intervened in SCM’s action to defend ITA’s final results of its section 751 review does not constitute a waiver of Brother’s right to intervene in Silver’s action challenging the validity of the ESP offset cap since consolidation does not merge the two actions. Johnson v. Manhattan Ry., supra.

Conclusion

Notwithstanding Brother’s delay in excess of one year in seeking intervention, this Court finds no prejudice to the present parties by granting Brother’s application under the circumstances presented. On the other hand, Brother could be irreparably prejudiced if its motion to intervene is denied. If the CAFC affirms this Court’s decision in Silver I, the offset cap will be invalid as a matter of lav/. Nevertheless, all entries of Brother’s PETs that are entered or withdrawn from warehouse for consumption prior to the publication of the CAFC’s decision will be liquidated in accordance with ITA’s final results unless liquidation is enjoined by this Court. 19 U.S.C. § 1516a(c). See 7 CIT at —, 600 F.Supp. at 852.

After, considering all the circumstances presented, it is ordered that Brother’s motion to intervene is granted.

      . Brother Industries, Ltd. is a Japanese manufacturer of portable electric typewriters and Brother International Corporation is a related firm that imports such merchandise from Japan.

      . In addition, Brother has filed a motion to enjoin liquidation of all entries of its PETs covered by ITA's final results until publication in the Federal Register of a notice of the final judgment in this action.

      . Silver Seiko, Ltd. is a Japanese manufacturer of PETs and Silver Reed America, Inc. is its wholly owned subsidiary in America that imports such merchandise from Japan.

      . Oral argument was heard by the CAFC on November 8, 1984.

      . Brother, as noted supra, was a party to the administrative proceeding before ITA, which is under review in this action, and Brother’s standing as an "interested party" pursuant to 28 U.S.C. § 2631(j)(1)(B) is not disputed.