Kam Kiu Aluminum Prods. Sdn. Bhd. v. United States, Slip Op. 15–101.
| Citation | 91 F.Supp.3d 1341 |
| Decision Date | 03 September 2015 |
| Docket Number | Slip Op. 15–101.,Court No. 13–00403. |
| Parties | KAM KIU ALUMINUM PRODUCTS SDN. BHD. and Taishan City Kam Kiu Aluminum Extrusion Co. Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Aluminum Extrusions Fair Trade Committee, Defendant–Intervenor. |
| Court | U.S. Court of International Trade |
William E. Perry, Dorsey & Whitney LLP, of Seattle, WA, for plaintiffs Kam Kiu Aluminum Products Sdn. Bhd. and Taishan City Kam Kiu Aluminum Extrusion Co., Ltd. With him on the brief was Emily Lawson.
Reginald T. Blades, Jr., Assistant Director, and Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant United States. With them on the brief were Stuart F. Delery, Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was David P. Lyons, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
Robert E. DeFrancesco, III, Wiley Rein LLP, of Washington, D.C., for defendant-intervenor Aluminum Extrusions Fair Trade Committee. With him on the brief was Alan H. Price.
Plaintiffs Kam Kiu Aluminum Products Sdn. Bhd. and Taishan City Kam Kiu Aluminum Extrusion Co., Ltd. (collectively, “Kam Kiu”) challenge a final determination (“Scope Ruling”) by the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) that certain merchandise exported to the United States by Kam Kiu is within the scope of antidumping and countervailing duty orders (the “Orders”) on aluminum extrusions from the People's Republic of China (“China”). Kam Kiu is a Chinese producer and exporter of the merchandise at issue in this case, which consists of aluminum-alloy articles intended for use after importation as component parts in the manufacturing of elastomeric aluminum bushings for automotive applications. Before the court is Kam Kiu's motion for judgment on the agency record, in which Kam Kiu seeks a determination that the Scope Ruling is unlawful and an order remanding the matter to Commerce. Defendant United States and defendant-intervenor Aluminum Extrusions Fair Trade Committee (“AEFTC”), petitioner in the antidumping and countervailing duty investigations, oppose Kam Kiu's motion.
Because the Scope Ruling reasonably construed the scope language of the Orders to include the merchandise at issue in this case, and because plaintiffs are unable to demonstrate the reasonableness of a contrary construction, the court denies plaintiff's motion.
Commerce published the Orders on May 26, 2011. See Aluminum Extrusions from the People's Republic of China: Antidumping Duty Order, 76 Fed.Reg. 30,650 (“AD Order ”); Aluminum Extrusions from the People's Republic of China: Countervailing Duty Order, 76 Fed.Reg. 30,653 (“CVD Order ”).
On June 25, 2013, Kam Kiu filed a request (“Scope Ruling Request”) advocating its position that the imported articles at issue (to which Kam Kiu refers as the “Subparts”) are not within the scope of the Orders.See Letter Requesting a Scope Ruling Regarding Subparts for Metal Bushings for Automotive Vehicles (Admin.R.Doc. No. 1) (“Scope Ruling Request ”). Commerce issued the contested Scope Ruling on November 21, 2013, rejecting Kam Kiu's position and ruling that the Subparts are within the scope of the Orders. Final Scope Ruling on Kam Kiu's Subparts for Metal Bushings (Admin.R.Doc. No. 12), available at http://enforcement.trade.gov/download/prc–ae/scope/34–Subparts–Metal–Bushings–23nov13.pdf (last visited Aug. 28, 2015) (“Scope Ruling ”).
Kam Kiu commenced this action on December 19, 2013. Summons (Dec. 19, 2013), ECF No. 1; Compl. (Jan. 17, 2014), ECF No. 9. Kam Kiu filed its motion for judgment on the agency record on June 10, 2014. Pls.' R. 56.2 Mot. for J. on the Agency R. and Mem. of P. & A. in Supp. of Pl.'s Mot. J. Agency R., ECF No. 25 (conf.), 26 (public) (“Pl.'s Br.”). Defendant and defendant-intervenor responded on September 12, 2014. Def.'s Resp. Pl.'s R. 56.2 Mot. J. Agency R., ECF No. 33 (“Def.'s Opp'n”); Def.-Int. Aluminum Extrusions Fair Trade Comm.'s Resp. Pl.'s R. 56.2 Mot. J. Agency R., ECF No. 34 (“Def.-intervenor's Opp'n”). On October 10, 2014, Kam Kiu filed a reply. Reply Br. in Supp. of Pl.'s R. 56.2 Mot. J. Agency R., ECF No. 36 (“Pl.'s Reply”).
The court exercises jurisdiction according to section 201 of the Customs Courts Act of 1980, under which the court has exclusive jurisdiction of any civil action “commenced under section 516A of the Tariff Act of 1930, as amended.” 28 U.S.C. § 1581(c).1 Section 516A provides for judicial review of a “determination ... as to whether a particular type of merchandise is within the class or kind of merchandise described in an existing ... antidumping or countervailing duty order.” 19 U.S.C. § 1516a(a)(2)(B)(vi) (2012). In reviewing the contested Scope Ruling, the court will hold unlawful any finding, conclusion, or determination that is not supported by substantial evidence on the record or that is otherwise not in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B)(i).
As described in the Scope Ruling Request, the elastomeric aluminum bushings produced from the imported Subparts are used in automobile suspension systems, in which they reduce vibrations and control movements of mechanical parts. Scope Ruling Request 4. The finished Subparts are manufactured “in various sizes and shapes, each designed for a particular automobile model,” id., and are produced from aluminum billets that have been subjected to an extrusion process, id. at 5, 12. After importation, the aluminum components are grit-blasted to clean the surface, coated with a paint primer, and top-coated with adhesive paint to facilitate attachment to a rubber filler that is added between the Subparts in the assembly of a finished bushing. Id. An illustration attached as an exhibit to the Scope Ruling Request shows a bushing consisting of an inner and an outer metal part, both basically of cylindrical shape, joined together by the rubber filler. Id. at Ex. 8.
The court's analysis begins, as it must, with the scope language of the Orders. Here, the antidumping duty order and the countervailing duty order contain the same scope language. The Orders apply to “aluminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys having metallic elements corresponding to the alloy series designations published by The Aluminum Association commencing with the numbers 1, 3, and 6 (or proprietary equivalents or other certifying body equivalents).” AD Order, 76 Fed.Reg. at 30,650 ; CVD Order, 76 Fed.Reg. at 30,653.
In the Scope Ruling, Commerce found as a fact that the Subparts “are produced from aluminum billets, of aluminum alloy covered by the scope, through an extrusion process.” Scope Ruling 5 (footnote omitted). The finding that the Subparts were made from aluminum extrusions is supported by the record and, in particular, by the Scope Ruling Request itself. Scope Ruling Request 5. Record evidence also supports the finding that the Subparts were made from an alloy covered by the scope language. Scope Ruling Request Ex. 4 (June 17, 2015) (Conf.Admin.R.Doc. No. 2–3); AD Order, 76 Fed.Reg. at 30,650 ; CVD Order, 76 Fed.Reg. at 30,653–54.
The Scope Ruling Request took the position that the Subparts “are not aluminum extrusions, but rather are subparts of metal bushings for automotive vehicles, a final finished good exported to the U.S. to be used only in the particular motor vehicles for which each subpart is specifically manufactured.” Id. at 6. It further argued that the Subparts “are finished components that require no further fabrication and therefore are not encompassed by the Orders.” Id. at 4. The Orders, however, define the term “aluminum extrusions” broadly. Although the phrase “aluminum extrusions which are shapes and forms” might by itself be construed to mean only extrusions manufactured in basic shapes and forms, other scope language in the Orders clarifies that such a construction was not intended. The scope language provides expressly that the covered “[a]luminum extrusions may also be fabricated, i.e., prepared for assembly,” and that “[s]uch operations would include, but are not limited to, extrusions that are cut-to-length, machined, drilled, punched, notched, bent, stretched, knurled, swedged, mitered, chamfered, threaded, and spun.” AD Order, 76 Fed.Reg. at 30,650 ; CVD Order, 76 Fed.Reg. at 30,654. The scope language further clarifies that “[s]ubject aluminum extrusions may be described at the time of importation as parts for final finished products that are assembled after importation ...” and that “[s]uch parts that otherwise meet the definition of aluminum extrusions are included in the scope.” AD Order, 76 Fed.Reg. at 30,650 –51; CVD Order, 76 Fed.Reg. at 30,654. Under the scope language construed as a whole, fabrication performed on an aluminum extrusion to produce a finished component ready for assembly does not result in the exclusion of that component from the scope of the Orders merely because no further machining or other further fabrication is required prior to assembly of the finished good. Commerce, therefore, was correct in rejecting these arguments upon issuing the Scope Ruling. Final Scope Ruling 8–9. The scope language also contains various exclusions, but none of these exclusions describes the Subparts. See AD Order, 76 Fed.Reg. at 30,651 ; CVD Order, 76 Fed.Reg. at 30,654.
As the Court of Appeals for the Federal Circuit has instructed, “[s]cope orders may be interpreted as including subject merchandise only if they contain language that specifically includes the subject merchandise or may be reasonably interpreted to include it.” Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1089 (Fed.Cir.2002) (“Duferco Steel ”). The Final...
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