Trade Updates for Week of October 26, 2016

United States Court of International Trade


Motion for Preliminary Injunction Granted in Part and Denied in Part

In Sunpreme, Inc. v. United States, Court No. 16-00171, Slip Op. 16-93, the court considered a motion for a preliminary injunction (“PI”) seeking to enjoin defendant, together with its delegates, officers, agents, servants and employees of the United States Customs and Border Protection (“Customs” or “CBP”) from requiring plaintiff to pay cash deposits and enter its solar modules as subject to antidumping and countervailing duty orders on crystalline silicon photovoltaic (“CSPV”) cells from the People’s Republic of China. Moreover, plaintiff argued that Commerce lacked authority to issue instructions to CBP that permit the collection of cash deposits and suspension of liquidation on entries entered prior to the initiation of the scope inquiry and that Commerce’s instructions to CBP were contrary to law.

Plaintiff, a U.S. based importer of solar modules imported from PRC, describes its solar modules as containing bi-facial solar cells with “an innovative thin film technology, the Hybrid Cell Technology, developed and owned by Sunpreme.” Plaintiff alleged that its cells were “made of several layers of amorphous silicon less than one micron in thickness, deposited on both sides of a substrate consisting of a crystalline silicon wafer,” and that that “the junction is made by the layers of p/i and i/n amorphous silicon on both the front and the back of the substrate, such that the junction is formed on the wafer and inside the thin film layers.” Slip Op. pg. 5Plaintiff argued that Plaintiff uses a “blank crystalline silicon wafer as a substrate for the thin films in order to improve the mechanical reliability of the modules. “That wafer is not processed by doping, does not contain a p/n junction, nor is it otherwise processed to become a[ ] CSPV cell.”  See id.

The court granted the injunction in part, because plaintiff provided sufficient documentation to show that plaintiff would suffer irreparable harm or serious disruption of its business.  However, it denied the motion in part because in regards to the merits of success portion of the motion, Commerce found that Sunpreme’s cells rely on the crystalline silicon to generate electricity and that the crystalline silicon is slightly doped. Commerce relied upon descriptions of the product contained in the application, the petition, and prior scope determinations to conclude that the crystalline silicon played an active role in the cell’s electricity generating function. Plaintiff had not shown how Commerce’s determination in this regard was not reasonable.

Likewise, plaintiff failed to raise a significant question as to the reasonableness of Commerce’s determination that Sunpreme’s cells are 20 micrometers thick as per the scope of the orders. Moreover, while Commerce acknowledged the differences highlighted by Plaintiff regarding the p/n junction, those differences did not undercut the formation of a p/n junction because the electrical field generating function or nature of the p/n junction in the cell is unchanged by the addition of an insulating material.

However, plaintiff demonstrated that it was likely that Commerce acted contrary to law because Commerce’s regulation may not be interpreted to permit the suspension of liquidation and collection of cash deposits to continue where they resulted from CBP’s ultra vires interpretation of the scope language. Plaintiff demonstrated that all four factors were in its favor granting a preliminary injunction preventing Commerce from collecting cash deposits on entries prior to initiation of the scope inquiry. Thus, the court granted this portion of the motion, but denied enjoining suspension of liquidation as to all entries whose liquidation occurred after Commerce’s scope inquiry.


Plaintiff’s Motion for Judgment on the Agency Record was Granted

In Sunpreme, Inc. v. United States, Court No. 15-315, Slip Op. 16-97, the court decided Plaintiff’s USCIT Rule 56.1 motion for judgment on the agency record challenging United States Customs and Border Protection’s (“Customs” or “CBP”) determination to require that Plaintiff file its entries as type “03” entries subject to antidumping and countervailing duty (“AD/CVD”) orders on crystalline silicon photovoltaic cells, whether or not assembled into modules from the People’s Republic of China (“Orders”). Because CBP considered plaintiff’s merchandise as falling within the Orders, it began collecting cash deposits and suspending liquidation on plaintiff’s entries. Plaintiff is a U.S. company that imports solar modules produced by Jiawei Solarchina (Shenzhen) Co., Ltd. that are composed of solar cells Plaintiff designs, develops, and tests at its facility in California. The subject frameless double tempered-glass constructed solar modules imported by Plaintiff are “bifacial solar modules made using its Hybrid Cell Technology.”

Because the Orders exclude thin film products, plaintiff asserted that CBP acted without authority in considering the subject merchandise within the scope of the Orders when the merchandise contained a thin amorphous silicon film. The court held that the CBP acted in “excess of its authority when it interpreted the Orders to exclude certain photovoltaic products with thin films of amorphous silicon.” Commerce must clarify whether the words of the Orders reach these products.

Moreover, CBP’s collection of cash deposits and suspension of liquidation before Commerce interpreted the Orders to include Plaintiff’s merchandise was contrary to law. As a result, there was no valid suspension of liquidation for Commerce to continue under 19 C.F.R. §§ 351.225(l)(1) and (3), and all duties were to be returned to plaintiff.


Denial of Motion for Reconsideration

In Capella Sales & Services, Ltd. v. United States, Court No. 14-304, Slip Op. 16-102 (October 25, 2016), the court considered a motion for reconsideration, where plaintiff believes the court did not consider “material points of law” raised by Capella, and that, had the court so considered, “it likely would have reached a different conclusion.” Plaintiff’s motion was premised on the assertion that the term “entries” in 19 U.S.C. §§ 1516a(c)(1), (e) was ambiguous.  The court did not agree and denied the motion.


Motion to Dismiss Granted

In ThyssenKrupp Steel North America, Inc. v. United States, Court No. 15-72, Slip Op. 16-101 (October 25, 2016), plaintiff ThyssenKrupp Steel North America (“Plaintiff”), challenged United States Customs and Border Protection’s (“CBP”) rejection of its protests regarding CBP’s refusal to reliquidate Plaintiff’s entries. In the alternative, Plaintiff challenged the lawfulness of liquidation instructions issued by the United States Department of Commerce (“Commerce”).   Defendant moved for dismissal of plaintiff claims and for judgment on the pleadings with respect to plaintiff’s alternative claim.  The court granted defendant’s motions because (1) protests were untimely, (2) certain entries protested were not liquidated, and (3) the decision protested was not protestable where Commerce merely follows Commerce’s instructions in assessing and collecting duties.