United States Court of International Trade
Decision Remanded in Part in Multilayered Wood Flooring Case
In Fine Furniture Limited et al., v. United States, Court No. 14-135, Slip Op. 18-68 (June 13, 2018), the Court remanded several issues in a remand redetermination on multilayered wood flooring from the People’s Republic in China (PRC) including the chosen electricity rate for a factor of production utilized in producing the merchandise, which is not the best available information as it only represents industrial electricity rates for Naga City and Iriga City/Pili instead of a nationwide rate. Moreover, separate rate plaintiffs should be assigned the ultimate rate determined for Fine Furniture, as no party commenting on the Remand Redetermination objects. For these reasons, Commerce’s determination was remanded.
Remand Results Sustained in Polyester Film Case
In Mitsubishi Polyester Film, Inc. and SKC Inc. v. United States et al., Slip Op. 18-71 (June 19, 2018), Defendant-Intervenors Terphane, Inc. and Terphane, Ltda. (collectively, “Terphane”) have argued that its Copolymer Surface Films are not covered by the scope of the Order because they all “have a performance enhancing resinous layer that exceeds the thickness requirement listed in the scope exclusion.” Thus, the Department of Commerce (“Commerce”) found that, pursuant to the Second Sentence Exclusion, Terphane’s Copolymer Surface Films were outside the scope of the November 2008 antidumping duty order covering PET film, sheet, and strip from Brazil, provided Terphane could establish, to the satisfaction of United States Customs and Border Protection, that the performance-enhancing layer is greater than 0.00001 inches thick. See Polyethylene Terephthalate Film, Sheet, and Strip From Brazil, the People’s Republic of China and the United Arab Emirates: Antidumping Duty Orders and Amended Final Determination of Sales at Less Than Fair Value for the United Arab Emirates, 73 Fed. Reg. 66,595 (Dep’t Commerce Nov. 10, 2008) (“Order”). The first two sentences of the Order’s scope are the focus of the administrative proceedings and this litigation. See id. (“The products covered by each of these orders are all gauges of raw, pre-treated, primed PET film whether extruded or co-extruded. Excluded are metallized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layer more than 0.00001 inches thick.”)
On remand, Commerce continued to find that the descriptions of the merchandise in its own and the ITC’s prior determinations support the conclusion that Terphane’s Copolymer Surface Films are not within the scope of the Order. Neither Mitsubishi’s dissection of the (k)(1) factors, nor Mitsubishi’s argument that a post-processing treatment is needed to satisfy the Second Sentence Exlcusion, persuades the Court that substantial evidence does not support Commerce’s findings. Therefore, because Commerce’s Remand Results are in accordance with the Court’s remand instructions and are supported by substantial evidence, the Results are sustained.
Sustained Final Results Regarding Determinations on Steel Nails from China
In Mid Continent Steel & Wire, Inc. v. United States et. al., Slip Op. 18-72, Court No. 17-00051 (June 19, 2018) the Court heard arguments regarding Commerce’s determinations in an administrative review of an antidumping order on steel nails from China. Commerce determined Stanley Works, a mandatory respondent, was entitled to a 5.48% dumping rate, and this rate would be used as the all other rate for qualified companies. Mid Continent challenged these determinations and argued the application of Stanley’s rate as the all other rate was unlawful and not supported by substantial evidence. In addition, Mid Continent challenged Commerce’s surrogate valuation of Stanley’s adhesive tape and plastic granule inputs as not being based on the best information available. For the following reasons the Court sustained Commerce’s final results.
Mid Continent’s first argument was that using Stanley’s 5.48% dumping margin as the all other rate was unlawful. When Commerce calculates all other rates the agency is required to “base this rate on the estimated weighted-average dumping margins established for the individually examined respondents, excluding zero and de minimis margins or margins based entirely on adverse facts available (“AFA”).” Id. at 11. Mid Continent argued Commerce’s application of the statue was unlawful because there were only two mandatory respondents reviewed, one of which was based entirely on AFA, and that the dumping margin of one respondent could not accurately reflect the economic reality of the steel nail industry. The Court held Commerce’s determination was lawful because “its method comports with the statute.” Id. at 13. In addition, the Court said according to Commerce’s data Stanley was the largest exporter of subject merchandise, which “suggests an assumption that Stanley’s data can be viewed as representative of all exporters.” Id. at 15. Plaintiff’s next argument was Commerce’s input valuation of adhesive tape and plastic granule’s was not based on the best information available. “Commerce is charged with the duty of choosing the best available surrogate data on the record to value inputs, … among the criteria that the Department considers … is product specificity.” For both inputs, the Court held the proposed alternative HTS headings by Mid Continent were either basket provision or not specific enough, while the headings used by Commerce were more specific making them the best available information.
Motion to Dismiss Granted Regarding Claims in Chorinated Isocyanurates Determination
In Juancheng Kangtai Chemical Co., Ltd., NAC Group Limited v. United States, Slip Op. 18-72, Court No. 17-00257 (June 19, 2018) the Court heard arguments regarding defendants motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. Plaintiffs challenged the administration and enforcement by Customs and Border Protection (“CBP”) of the final results issued by the Commerce in an antidumping duty investigation of chlorinated isocyanurates from China. Specifically, plaintiffs challenge the decision of Commerce to instruct CBP to collect antidumping duties on goods reported to Commerce in an annual review, where Commerce determined a zero percent dumping margin for plaintiff, that were not imported into the US until a later time when a substantial antidumping margin had been imposed on plaintiff. For the following reasons the Court dismissed the case.
The government motioned to dismiss plaintiff’s counts I-III for lack of subject matter jurisdiction because plaintiff improperly relied on the Court’s jurisdiction under 28 U.S.C. § 1581(i). In order to determine if jurisdiction arises under section 1581(i), the court assesses whether another “subsection of section 1581 is or could have been available and whether that other subsection would provide” an adequate remedy. Id. at 7. The Court said this case arises not “from the erroneous administration and enforcement of Commerce’s antidumping duty determinations but rather from an allegation that Commerce imposed a liquidation rate that improperly considered already reported sales and entries. Such an action is properly brought under section 1581(c).” Id. at 7. The Court also determined had the plaintiffs challenged the antidumping order under 1581(c) “any resulting remedy could have addressed Commerce’s consideration of sales/entries.” Id. at 10. In addition the government motioned to dismiss count IV, challenging CBP’s 15 day liquidation policy, for failure to state a claim. When a case is filed plaintiffs must prove in the pleadings that they have “suffered injury in fact or the threat thereof.” Id. at 10. The Court said because the case was “directed at the rate Commerce assigned certain entries based on the Department’s distinction between sales and entries … the 15-day policy cannot be said to have imposed an injury”, therefore no relief could be granted under count IV. Id. at 11.
“ADA-Compliant Toilets Do Not Qualify For Nairobi Protocol Treatment
Extra high toilets meeting Americans With Disabilities Act (ADA) standards for use by handicapped individuals do not qualify for duty free treatment as “Articles specially designed for the blind or physically handicapped”, according to the United States Court of International Trade
In Danze Inc. v. United States, Slip Op. 18-69 (June 19, 2018), the court considered the classification of toilets having a seat height of 16-1/2”, compared to the 14” or 15” height of regular toilets. The ADA requires toilets specially designed for use by the handicapped to measure at least 17” from the floor to the top of the seat. Customs had already ruled that toilets with a 17” rim height qualified for Nairobi Protocol treatment. The importer contended, and the Court conceded, that with the addition of a seat, the toilets at bar would also meet the ADA standard, and were, in fact, ADA-certified.
Notwithstanding this fact, the Court held that just because an article met ADA standards as being specially designed for the handicapped, this did not make them so designed for Nairobi Protocol purposes. The court held that the toilets had ergonomic qualities which also made them comfortable for use by non-handicapped persons, and this fact overcame the facts of their special design. The Court also demanded that the importer show that it, individually, had engaged in special design activities – a curious position given that a mandatory government standard had already been established.
United States Court of Appeals for the Federal Circuit
President Can Disregard Certain ITC Determination in Escape Clause Cases
Law took another step further away from reality when the Court of Appeals for the Federal Circuit, in Silfab Solar Inc. v. United States, No. 18-1718 (June 5, 2018) upheld aa Court of International Trade decision which declined to enjoin the imposition of escape clause tariffs on imports or Crystalline Photovoltaic Solar Panels from Canada.
The ITC had found that the domestic industry was seriously injured by reason of increase imports of solar panels from all sources. Under the NAFTA Implementation Act, an escape clause determination is not to be imposed against products of Canada unless they account for a “substantial portion” of imports. In this case, Canadian solar panel imports accounted for less than 2% of all imports, and Canada was not among the top 5 foreign suppliers. While the ITC made an affirmative finding of injury, it split on the issue of remedy, the Commissioners offering three different remedy recommendations to the President. Two of those three recommendations found Canadian imports to be insubstantial, and recommended that Canadian products be excluded from relief.
Nonetheless, in proclaiming higher tariffs on imported solar products, the President included Canada in the assessment of additional duties.
This, the President was allowed to do, the CAFC held. The escape clause statute only requires an injury determination from the ITC. Once such a determination is received, the President is free to take whatever action he wishes, consistent with the law. Notwithstanding that Canadian imports accounted for less than 2% of all imports, and that two Commission reports had deemed these insubstantial, the President was free to disregard those reports, make his own finding, and impose the tariffs. The CIT had correctly denied the injunction application on the ground that the plaintiffs were not likely to prevail on the merits of their claims.
Importer Must Obtain Commerce Scope Ruling Before Proceeding to Court, CAFC Holds.
An importer challenging Customs decision to require cash deposits of estimated antidumping and countervailing duties on an imported product must first seek a Commerce Department Scope ruling before proceeding to court, the Court of Appeals for the Federal Circuit recently held.
In Sunpreme Inc. v. United States, No. 17-1338 (June 14, 2018) an importer of solar panels believed that its goods were exempt from the antidumping and countervailing duty orders because they were “thin film” types of solar panels. Customs disagreed, demanding that the importer deposits steep cash deposits of estimated duties, and file Type 03 antidumping entries. Faced with financial hardship, the importer challenged the deposit instructions in the Court of International Trade, and secured an injunction which prevented Customs from demanding the duty deposits. The government appealed.
Not so fast, the CAFC held. Sunpreme had failed to exercise and exhaust its administrative remedies, and could not proceed to court. The CIT lacked jurisdiction to entertain the importer’s case. The Court noted three potential bases for jurisdiction: 28 U.S.C. Section 1581(a) 1581(c) (review of scope determination) or 1581(i) (residual jurisdiction). Since there was a dispute about whether the goods were covered by the antidumping order, the Court held, protest jurisdiction under subsection (a) was not available. However, the importer should have waited until a Commerce Department Scope Determination was completed to bring its challenge to court under subsection (c). Because the liquidation of entries could be suspended while that type of inquiry takes place, the importer was required to seek a scope determination first, and proceed to court for a review of that determination if it was unfavorable.
Finding that the CIT lacked jurisdiction, the Court vacated the determination and remanded it with orders to dismiss the case.