Meridian Prods., LLC v. United States

• Decision Date: 29 December 2014
• Docket Number: Court No. 13–00018.,Slip Op. 14–158.
• Citation: 37 F.Supp.3d 1342
• Parties: MERIDIAN PRODUCTS, LLC, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

37 F.Supp.3d 1342

MERIDIAN PRODUCTS, LLC, Plaintiff

v.UNITED STATES, Defendant.

Slip Op. 14–158.

Court No. 13–00018.

United States Court of International Trade.

Dec. 29, 2014.

Daniel Cannistra and Richard P. Massony, Crowell & Moring LLP, of Washington, DC, for the plaintiff.

Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the defendant. On the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Jessica M. Forton, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION

MUSGRAVE, Senior Judge:

This opinion addresses the Final Results of Redetermination Pursuant to Court Remand, Meridian Products, LLC v. United States, Court No. 13–0018, PDoc 29 (June 17, 2014) (“Second Remand”) of the International Trade Administration of the U.S. Department of Commerce (“Commerce”) pursuant to Meridian Products, LLC v. United States, 38 CIT ––––, 971 F.Supp.2d 1259 (2014) (“Meridian II ”).

The plaintiff, Meridian Products LLC, a U.S. importer of refrigerator/freezer trim kits, moves for a third remand of this action challenging various aspects of the Second Remand. Meridian's Motion for Remand and accompanying Cmts in Resp. to Second Redetermination Upon Remand, PDoc 35 (July 15, 2014) (“Pl's Mot.”). The defendant asks that the court sustain the Second Remand results, claiming that it complied with the court's order and that its determination is both supported by substantial evidence and is in accordance with law. Def's Resp. to Cmts Regarding the Second Remand Redetermination, PDoc 38 (Aug. 8, 2014) (“Def's Resp.”).

Upon review of the Second Remand results, the court finds that the redetermination complies with the judicial orders in Meridian II and sustains the results.

I. Background

Familiarity with the facts of this case as provided in the court's prior opinions is presumed, but background is supplemented herein for ease of understanding.See Meridian II; see also Meridian Products, LLC v. United States, 37 CIT ––––, Slip Op. 13–75, 2013 WL 2996233 (June 17, 2013) (“Meridian I ”). In Meridian I , the court remanded to Commerce, directing it to reconsider if the plaintiff's trim kits fell within finished goods scope exclusion of the antidumping and countervailing duty orders on aluminum extrusions from the People's Republic of China¹ as applied in the Side Mount Valve Controls Scope Ruling, the Drapery Rail Kits Remand, and the Auto Parts Remand.² In Meridian II , the court remanded to Commerce a second time, directing it to “proceed from a clean slate on the question of whether the [t]rim [k]its fall within the scope of the Orders, fully taking into account the prior relevant scope rulings”, including evaluating the trim kits under the finished goods exclusion methodology in the Drapery Rail Kits Remand and Solar Panel Mounting Ruling.³

The relevant scope language, which Commerce must first examine in any scope determination to determine whether merchandise falls within the scope of an antidumping duty order,⁴ is as follows:

The scope also excludes [1] finished merchandise containing aluminum extrusions as parts that are 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. The scope also excludes [2] finished goods containing aluminum extrusions that are entered unassembled in a “finished goods kit. ” A finished goods kit is understood to mean 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. An imported product will not be considered a “finished goods kit” and therefore excluded from the scope of the [Orders] merely by including fasteners such as screws, bolts, etc. in the packaging with an aluminum extrusion product.

Orders, 76 Fed.Reg. at 30651 and 30654 (italics and bracketing added).

In the Second Remand, Commerce again determined that the plaintiff's trim kits fell within the scope of the Orders as subject aluminum extrusions identified by reference to their end use: as “frames” for major appliances.⁵ Commerce first determined that the trim kits did not qualify for the “finished merchandise” exclusion. It found that the kits consisted entirely of aluminum extrusions, fasteners, and extraneous materials. Based on the plaintiff's own description of its trim kits as consisting of a package of finished parts which, when assembled, will make up a customized frame around a single freezer unit or single refrigerator unit, Commerce found that the kits were included with the scope language of the Orders and did not meet the “finished merchandise” exclusion because they entered the U.S. unassembled. See Second Remand at 5–6, referencing “Aluminum Extrusions from the People's Republic of China: Request for Scope Ruling for Refrigerator/Freezer Trim Kits” (Nov. 13, 2012) (“Trim Kits Scope Ruling Request”) at 1–2; see also id. at 12–14, 22–24.

Commerce next determined that the plaintiff's trim kits did not qualify as an excluded “finished goods kit” on the ground that, again, they consisted entirely of aluminum extrusions, fasteners, and extraneous materials and fell within the express limitation to the exclusion. Id. at 12–14, 23–25. Commerce distinguished the trim kits from the goods in the Drapery Rail Kits Remand and in the Solar Panel Mounting Ruling by first determining that unlike the trim kits, the goods in the Drapery Rail Kits Remand and Solar Panel Mounting Ruling were eligible for the “finished goods kit” exclusion because those goods “do not consist entirely of aluminum extrusions” and did not fall within the “limitation” to the exclusion.⁶ Pursuant to the court's instruction, Commerce then analyzed the trim kits ability to “display” or “work with” an appliance. See Second Remand at 15, referencing Meridian II at 1268; see also id. at 25–27, referencing Meridian II at 1269. Commerce determined that the trim kits “merely frame the space into which the refrigerator is placed” and were therefore unlike the goods in those rulings, because in those rulings the subject goods were designed to “display” or “work with” a missing non-essential interchangeable component by the functional means of holding the component. Second Remand at 15–20, 25–26.

The plaintiff filed with the court its comments in response to Commerce's Second Remand objecting to the findings of the Second Remand. In its filing, the plaintiff claims in the Second Remand Commerce did not comply with the court's order because it did not sufficiently explain why the trim kits do not meet the criteria for the finished goods exclusion and did not distinguish between goods that “incorporate” and goods that “display”. Pl's Mot. at 1.

The defendant responds that it complied with the court's remand order, maintaining that its finding that the trim kits consist solely of subject aluminum extrusions, fasteners, and extraneous materials and do not satisfy the two finished goods exclusions is supported by the scope language and prior scope rulings. Def's Resp. at 1, 10–19, 22. The defendant further argues it provided a reasonable explanation of why the Drapery Rail Kits Remand and Solar Panel Mounting Ruling did not apply to the plaintiff's trim kits that is supported by substantial evidence. Id. at 1922.

II. Discussion

1. Exhaustion of Administrative Remedies

At the outset, the defendant claims that the plaintiff raised certain arguments in its comments before the court with respect to both the “finished goods kit” and “finished merchandise” exclusions⁷ that the plaintiff did not raise in its draft comments on the Second Remand, and that the plaintiff has accordingly failed to exhaust its administrative remedies concerning those issues. See Def's Resp. at 13–15, referencing Pl's Mot. at 4; see also id. at 17, referencing Pl's Mot. at 5; id. at 17–18, referencing Pl's Mot. at 6–10. Specifically, the defendant contends the following are precluded by failure to exhaust: the argument opposing the determination that the trim kits were not eligible for the “finished goods kit” exclusion because Commerce found that they consist solely of aluminum extrusions, fasteners, and extraneous materials;⁸ the argument that Commerce erroneously applied an “aluminum content limitation” with the effect of disqualifying goods consisting entirely of aluminum extrusions from ever satisfying either the “finished merchandise” or “finished goods kit” exclusions;⁹ and the argument that Commerce is inconsistent in the test(s) it applies in order to determine if the non-aluminum components of a good qualify it for the exclusions. Def's Resp. at 17, referencing Pl's Mot. at 5, citing Memorandum to Christian Marsh, “Final Scope Ruling on Titan's Scaffolding Planks” (July 8, 2014) (“Scaffolding Planks Scope Ruling ”).

The court tends to take a strict approach to the doctrine of administrative exhaustion in accordance with its statutory mandate. See SeAH Steel Corp. v. United States, 35 CIT ––––, 764 F.Supp.2d 1322, 1325 (2011), referencing Jiaxing Brother Fastener Co., Ltd. v. United States, 34 CIT ––––, 751 F.Supp.2d 1345, 1355–57 (2010) ; see also 28 U.S.C. § 2637(d) (stating that in trade cases the court “shall, where appropriate, require the exhaustion of administrative remedies”). Exhaustion is generally appropriate in antidumping proceedings as it protects the administrative agency's authority and promotes judicial efficiency by permitting the agency to apply its expertise, correct its own administrative mistakes, and create an adequate record for judicial review. See Woodford v....