Shenyang Yuanda Aluminum Indus. Eng'g Co. v. United States

• Decision Date: 09 February 2016
• Docket Number: Slip Op. 16–11,Consol. Court No. 14–001061
• Citation: 146 F.Supp.3d 1331
• Parties: Shenyang Yuanda Aluminum Industry Engineering Co., Plaintiff, v. United States, Defendant.
• Court: U.S. Court of International Trade

146 F.Supp.3d 1331

Shenyang Yuanda Aluminum Industry Engineering Co., Plaintiff,

v.United States, Defendant.

Slip Op. 16–11

Consol. Court No. 14–001061

United States Court of International Trade.

February 9, 2016

James R. Cannon, Jr., John D. Greenwald, and Thomas M. Beline, Cassidy Levy

Kent, LLP, of Washington, DC, for Plaintiff Yuanda.

Kristen Smith, Arthur K. Purcell, and Michelle L. Mejia, Sandler, Travis, & Rosenberg, P.A., of Washington, DC, for Consolidated Plaintiff Jangho.

William E. Perry, Emily Lawson, and Kate Kennedy, Dorsey & Whitney LLP, of Seattle, WA, for Consolidated Plaintiff Permasteelisa.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the Defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

David M. Spooner and Christine J. Sohar Henter, Barnes & Thornburg, LLP, of Washington, DC, for Defendant–Intervenor, the Curtain Wall Coalition.

OPINION and ORDER

Pogue

, Senior Judge:

In this action, Plaintiffs Shenyang Yuanda Aluminum Industry Engineering Co., Ltd. and Yuanda USA Corporation (collectively “Yuanda”); Jango Curtain Wall Americas Co. (“Jangho”); and Permasteelisa North America Corp., Permasteelisa South China Factory, and Permasteelisa Hong Kong Ltd. (collectively “Permasteelisa”), challenge the decision,² made by Defendant, the U.S. Department of Commerce (“Commerce”), that Yuanda's unitized curtain wall, i.e., a complete curtain wall, unitized and imported in phases pursuant to a sales contract, is within the scope of the antidumping and countervailing duty orders (the “AD & CVD Orders” or the “Orders”) on aluminum extrusions from the People's Republic of China (“PRC”).³

Currently before the court are Plaintiffs' renewed motions for judgment on the agency record pursuant to USCIT Rule 56.2

, arguing that Commerce's affirmative scope ruling is not in accordance with law, unsupported by substantial evidence, and arbitrary and capricious.⁴ Defendant opposes Plaintiffs' motions.⁵ Defendant–Intervenors, Walters & Wolf, Architectural Glass & Aluminum Company, and Bagatelos Architectural Glass Systems, Inc. (collectively the “Curtain Wall Coalition” or “CWC”) join in opposition to the motions.⁶

The court has jurisdiction pursuant to § 516A(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(vi)

and 28 U.S.C. § 1581(c) (2012).⁷

Because Commerce's scope ruling redefines key terms contrary to the plain language of the AD & CVD Orders, it is not in accordance with law; because it does not reasonably consider the characteristics of Plaintiffs' merchandise and the evidence that weighs against the agency's determination, it is unsupported by substantial evidence; because it offers insufficient reasons for treating similar products differently, it is arbitrary and capricious. Accordingly, the court remands to Commerce for further consideration in accordance with this opinion.

BACKGROUND

I. The Antidumping and Countervailing Duty Orders on Aluminum Extrusions

The issues presented here arise from Commerce's AD & CVD Orders on aluminum extrusions from the PRC.⁸ The AD & CVD Orders followed a March 31, 2010, petition by the Aluminum Extrusions Fair Trade Committee and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (collectively, “Petitioners”), alleging that “[certain] aluminum extrusions imported from the [PRC] are being subsidized and sold at less than normal value.”⁹ Commerce made final affirmative determinations of subsidization and sales at less than fair value¹⁰ ; the International Trade Commission similarly made a final affirmative determination of material injury to U.S. industry.¹¹ Commerce then issued the AD & CVD Orders.¹²

II. The Language of the Order

The AD & CVD Orders on aluminum extrusions were “written in general terms,”¹³ to cover “aluminum extrusions,” which are defined as “shapes and forms,¹⁴ produced by an extrusion process, made from [certain] aluminum alloys.”¹⁵ They may have a variety of finishes, “both coatings and surface treatments,”¹⁶ and may be “fabricated, i.e., prepared for assembly.”¹⁷

Aluminum extrusions “described at the time of importation as parts for final finished products” such as “window frames, door frames, solar panels, curtain walls, or furniture,” to be “assembled after importation,” are subject to the order if such parts “otherwise meet the definition of aluminum extrusions,”¹⁸ that is, they are shapes or forms made from the covered aluminum alloys and made by an extrusion process.¹⁹ The AD & CVD Orders also cover “aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled merchandise.”²⁰

The AD & CVD Orders exclude “finished merchandise containing aluminum extrusions as parts” so long as such merchandise is “fully and permanently assembled and completed at the time of entry, such as finished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels.”²¹ The AD & CVD Orders also exclude “finished goods containing aluminum extrusions that are entered unassembled in a ‘finished goods kit.’ ”²² A finished goods kit is “a packaged combination of parts that contains, at the time of importation, all of the necessary parts to fully assemble a final finished good and requires no further finishing or fabrication, such as cutting or punching, and is assembled ‘as is' into a finished product.”²³ Subassemblies may be excluded as well, provided that they enter the United States as part of or as “finished goods” or “finished goods kits.”²⁴

III. Interpreting the Scope of an Order

Where, as here, there is a question as to “whether a particular product is included within the scope of an antidumping or countervailing duty order,” Commerce follows an interpretive framework, provided in the agency's regulations, to determine the answer.²⁵ First, relying on the description of the product contained in the scope-ruling request, Commerce looks to the plain language of the underlying order.²⁶ If the terms of the order are dispositive, then the order governs.²⁷

Second, if the order is ambiguous, Commerce “consider[s] the regulatory history, as contained in the so-called ‘(k)(1) materials' ”—named for the regulatory subsection in which they appear.²⁸ Specifically, Commerce considers “[t]he descriptions of the merchandise contained in the petition, the initial investigation, and the determinations of [Commerce] (including prior scope determinations) and the [International Trade] Commission.”²⁹ If the (k)(1) materials disambiguate the language of the order, then Commerce will issue its scope ruling.³⁰

Third, if the (k)(1) materials “are not dispositive,” Commerce will initiate a scope inquiry.³¹ Specifically, Commerce “will further consider: (i) [t]he physical characteristics of the product; (ii) [t]he expectations of the ultimate purchasers; (iii) [t]he ultimate use of the product; (iv) [t]he channels of trade in which the product is sold; and (v) [t]he manner in which the product is advertised and displayed.”³²

Commerce's interpretations of its own scope rulings are given “significant deference,”³³ however, “Commerce cannot ‘interpret’ an antidumping order so as to change the scope of that order, nor can Commerce interpret an order in a manner contrary to its terms.”³⁴

IV. The Scope Ruling on Curtain Wall Units and Other Parts of a Curtain Wall System from the PRC

The Yuanda Scope Ruling challenged in this case is the second scope ruling Commerce has issued relevant to unitized curtain wall.³⁵ Prior to the Yuanda Scope Ruling, on October 11, 2012, Defendant–Intervenors, the CWC, applied for a ruling from Commerce, pursuant 19 C.F.R. § 351.225

, to confirm that “parts of curtain wall[s],”³⁶ defined as “curtain wall sections, falling short of the final finished curtain wall that envelopes an entire building structure,” including, but not limited to individual curtain wall units (i.e., “unitized ... modules that are designed to be interlocked with each other, like pieces of a puzzle”).³⁷ Both Yuanda and Jangho submitted comments in opposition.³⁸

In the CWC Scope Ruling, Commerce determined, based on the description of the product in CWC's application,³⁹ that the language of the AD & CVD Orders and the “descriptions of the merchandise in the investigation” are “dispositive”: curtain wall parts, as defined in the CWC's Scope Request, fell within the scope of the Orders.⁴⁰ While Yuanda and Jangho argued that “a complete curtain wall unit” could be excluded from the scope of the AD & CVD Orders under the “finished goods kit” exclusion, Commerce declined to rule on the application of this exclusion because the CWC's scope request “[did] not seek a scope ruling on complete curtain walls units, but rather ‘parts of curtain walls,’ and [its] scope ruling [was] limited to the products discussed in the CWC's Amended Scope Request.”⁴¹

Yuanda and Jango challenged the CWC Scope Ruling before the Court of International Trade (“CIT”), but the CIT affirmed Commerce's finding that “curtain wall units and other parts of curtain wall systems fall within the scope of the [AD & CVD] Orders.”⁴² The plaintiffs appealed this decision to the Federal Circuit, but the Federal Circuit affirmed.⁴³

V. The Scope Ruling on Curtain Wall Units that are Produced and Imported Pursuant to a Contract to Supply Curtain Wall

On March 26, 2013, while Yuanda I

was still pending before the CIT, Yuanda filed its own scope ruling request, pursuant to 19 C.F.R. § 351.225, to confirm that complete curtain wall units sold “pursuant to [a] c...