Meridian Prods., LLC v. United States

• Decision Date: 26 March 2014
• Docket Number: Slip Op. 14–32.,Court No. 13–00018.
• Parties: MERIDIAN PRODUCTS, LLC, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

971 F.Supp.2d 1259

MERIDIAN PRODUCTS, LLC, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 14–32. Court No. 13–00018.

United States Court of International Trade.

March 26, 2014.

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

Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, for 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 Joanna Theiss, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Washington, DC.

OPINION AND ORDER

MUSGRAVE, Senior Judge:

The plaintiff Meridian Products LLC, a U.S. importer of refrigerator/freezer trim kits (“Trim Kits”), challenges the Final Results of the Redetermination Pursuant to Court Remand, Meridian Products, LLC v. United States, Ct. No. 13–00018 (Aug. 15, 2013) of the International Trade Administration of the U.S. Department of Commerce (“Commerce”). See Meridian Products, LLC v. United States, Court No. 13–00018, Slip Op. 13–75, 2013 WL 2996233 (2013) (“Opinion”). In the Opinion, the court ordered Commerce to reconsider the Trim Kits under the finished goods scope exclusion of the anti-dumping and countervailing duty orders (“Orders”) on aluminum extrusions from the People's Republic of China,¹ as applied in the Valves Ruling, Auto Parts Remand and Drapery Rail Kits Remand.²

The plaintiff now moves for a second remand of this action, claiming that Commerce failed to apply the “revised test for finished goods” to the Trim Kits and that Commerce's remand analysis of the Trim Kits was unlawful. Plaintiff's Comments in Response to Redetermination upon Remand (“Pl's Comm. in Resp.”) at 1, 10–11. Commerce asks the court to affirm the results of the remand, arguing that it complied with the court's orders in the Opinion and that its remand determination is both supported by substantial evidence and otherwise in accordance with law. Defendant's Response to Comments Regarding the Remand Redetermination (“Def's Reply to Comm.”) at 2, 14.

Upon review of the remand results, the court finds that although Commerce reasonably defined the “finished goods kit” exclusion methodology, as applied in the Drapery Rail Kits Remand and Solar Panel Mounting Ruling,³ its conclusion that the Trim Kits do not qualify as goods intended to “display customizable materials” or “work with removable/replaceable parts” and do not merit application of the methodology from the rulings is not supported by substantial evidence. The court remands to Commerce to evaluate the Trim Kits under the revised finished goods exclusion methodology announced in the Drapery Rail Kits Remand and Solar Panel Mounting Ruling.

I. Background

A. Scope Ruling on Trim Kits

Commerce published the Orders that covered “[a]luminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys ...”. The Orders contain an exclusion for otherwise subject merchandise that is considered “finished merchandise” or a “finished goods kit.” That exclusion is as follows:

The scope also excludes certain 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 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 processing or fabrication, such as cutting or punching, and is assembled ‘as is' into a finished product.

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

The scope language also clarifies that an imported product

[w]ill not be considered a “ finished goods kit ” and therefore excluded from the scope of the investigation merely by including fasteners such as screws, bolts, etc. in the packaging with an aluminum extrusion product.

Id. (italics added). The plaintiff requested a scope ruling ⁴ on its Trim Kits, which it describes as

consist[ing] of three different styles of complete aluminum trim kit packages which are utilized as an aesthetic frame around the perimeter of (though not attached to) a major home kitchen appliance. Trim kits enhance the appearance of the cabinetry surrounding the appliance in the consumer's home and lends a customized, “built-in” look. The major appliance units for which the trim packages apply are stand alone freezers, stand alone refrigerators and freezer plus refrigerators.

Trim kits are sold as a package of finished parts which when assembled will make up a customized frame to fit around a single freezer unit or a single refrigerator unit. Each trim kit consists of extruded aluminum forms, made from aluminum alloy having elements corresponding to the alloy series designation published by the Aluminum Association commencing with the number 6. Trim kits include a customer installation kit, consisting of a hexagonal wrench and fasteners used by the user during assembly. A set of instructions written in English, Spanish, and French is also included in the installation kit.

See Complaint at ¶¶ 20–21.⁵

In the Scope Ruling Request, the plaintiff argued that Commerce should find that its Trim Kits were excluded from the scope of the Orders as “finished goods kits.” Id. ¶ 22, referencing Scope Ruling Request.

In its final scope determination, Commerce rejected the plaintiff's arguments and found that the Trim Kits were unambiguously included in the scope of the Orders as subject aluminum extrusions identified by reference to their end use. ⁶ Commerce concluded that the Trim Kits are like the geodesic dome frame kits in a previous ruling ⁷ and met the initial requirements for the finished good kits exclusion, but it also found that the Trim Kits consisted entirely of aluminum extrusions, fasteners, and extraneous materials and accordingly did not qualify for the exclusion.⁸

B. Remand Request and Results

The plaintiff challenged Commerce's Scope Ruling before this court, and moved for immediate remand pursuant to USCIT Rule 7, arguing that

Commerce has admittedly changed the way it determines whether a product qualifies for the finished goods exclusion. This change is explicitly stated in Commerce's final scope ruling on side mount valve controls ..., and it is also apparent in Commerce's redetermination regarding drapery rail kits.

Plaintiff's Motion for Remand (Mar. 12, 2013) (“Pl's Mot. for Remand”) at 1, referencing Valves Ruling, Drapery Rail Kits Remand.SeeOpinion at 2–3. Commerce opposed the motion as premature, lacking ground for deviation from USCIT Rule 56.2 procedure, and substantively failing the plaintiff's obligation to exhaust administrative remedy. At the time, however, since the issue simply seemed to involve proper, legal administrative interpretation of the scope issue and no third-party interests,⁹ and USCIT Rule 1 requires the “just, speedy, and inexpensive determination of every action and proceeding”, the court granted the plaintiff's motion and ordered Commerce on remand to “reopen the record and permit the plaintiff to submit arguments ... as to why the trim kits satisfy the finished goods exclusion under the Valves Ruling and the remands in the Drapery Rail Kits and Auto Parts cases”. ¹⁰

On remand, Commerce determined that the “revised” finished goods exclusion analysis from the three referenced rulings was not applicable to the Trim Kits because they are not analogous to the goods considered in those rulings.¹¹ Commerce continued to find that the Trim Kits are included in the scope of the Orders as subject aluminum extrusions identified by reference to their end use, and that they did not qualify under the finished goods exclusion.¹²

The plaintiff requests further remand, arguing that Commerce did not apply the revised test in the rulings as ordered but instead created new limitations for the “finished goods exclusion.” ¹³ The plaintiff contends that even if these limitations exist, the Trim Kits are analogous to the products covered under the limitations.¹⁴ The plaintiff also argues on several grounds that the remand was unlawful.¹⁵ Commerce filed its reply to the plaintiff's comments and argues that the remand results should be confirmed in all respects. Commerce argues that it fully complied with the courts instructions in the Opinion, and that its determinations are otherwise in accordance with law and supported by substantial evidence. Def's Reply to Comm. at 2, 14.

II. Jurisdiction and Standard of Review

Jurisdiction is proper pursuant to 28 U.S.C. § 1581(c) (2006). The court sustains Commerce's determination upon remand if it “complies with the court's remand order, is supported by substantial evidence on the record, and is otherwise in accordance with law.” Jinan Yipin Corp. v. United States, 33 CIT 934, 637 F.Supp.2d 1183, 1185 (2009), citing 19 U.S.C. § 1516a(b)(1)(B)(i) (2000). Substantial evidence “is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938), see also Micron Tech., Inc. v. United States, 117 F.3d 1386, 1393 (Fed.Cir.1997). To support judicial review, “the path of Commerce's decision must be reasonably discernable”. Jinan Yipin Corp., Ltd. v. United States, 35 CIT ––––, 800 F.Supp.2d 1226, 1233 (2011), quoting NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed.Cir.2009), citing Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103...