Crawfish Processors Alliance v. U.S.

• Decision Date: 20 April 2007
• Docket Number: No. 2006-1501.,2006-1501.
• Parties: CRAWFISH PROCESSORS ALLIANCE, Louisiana Department of Agriculture & Forestry, and Bob Odom, Commissioner, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

483 F.3d 1358

CRAWFISH PROCESSORS ALLIANCE, Louisiana Department of Agriculture & Forestry, and Bob Odom, Commissioner, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.

No. 2006-1501.

United States Court of Appeals, Federal Circuit.

April 20, 2007.

John C. Steinberger, Adduci, Mastriani & Schaumberg, L.L.P., of Washington, DC, argued for plaintiffs-appellants. With him on the brief was Will E. Leonard.

David S. Silverbrand, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Jeanne E. Davidson, Deputy Director. Of counsel were Berniece A. Browne, Marisa Goldstein, and John D. McInerney, United States Department of Commerce, of Washington, DC.

Before LOURIE, RADER, and BRYSON, Circuit Judges.

LOURIE, Circuit Judge.

Crawfish Processors Alliance, Louisiana Department of Agriculture and Forestry, and Bob Odom, Commissioner, (collectively "CPA") appeal from the decision of the United States Court of International Trade sustaining the scope ruling by the United States Department of Commerce ("Commerce") that crawfish etouffee is not included within the scope of an antidumping duty order covering freshwater crawfish tail meat. Crawfish Processors Alliance v. United States, 431 F.Supp.2d 1342 (Ct. Int'l Trade 2006). Because substantial evidence supports Commerce's determination that etouffee is not included within the scope of the antidumping duty order, we affirm.

BACKGROUND

This appeal involves an Antidumping Duty Order imposed against freshwater crawfish tail meat imported from the People's Republic of China, effective September 15, 1997. 62 Fed. Reg. 48218-02. The product covered by that order is "freshwater crawfish tail meat, in all its forms (whether washed or with fat on, whether purged or unpurged), grades, and sizes; whether frozen, fresh, or chilled; and regardless of how it is packed, preserved, or prepared." Id.

On June 4, 2004, Coastal Foods, LLC ("Coastal"), an importer of crawfish etouffee requested a scope ruling from Commerce to determine whether crawfish etouffee was included within the scope of that antidumping duty order. Coastal described crawfish etouffee as "a product made by combining and integrating flour, cooking oil, onions, bell peppers, tomatoes (paste, puree or other form), celery or other vegetables, garlic, pepper, salt, other seasonings, water, thickeners (starches), oleo or butter, and crawfish tailmeat." Coastal further elaborated that the process of making crawfish etouffee involved "a complex cooking procedure at temperatures ranging from 200° F to 350° F over a considerable time period" and resulted in the complete blending and integration of the ingredients. Coastal characterized its etouffee product as a fully cooked and ready-to-heat-and-serve "stew" comprised mostly of gravy. Coastal asserted in its scope request that crawfish tail meat is only one of many ingredients used in making etouffee and that once the tail meat has been blended and integrated with other ingredients, it cannot be "unblended and un-integrated." Accordingly, Coastal argued that etouffee was not included within the scope of the antidumping duty order covering freshwater crawfish tail meat.

On July 29, 2004, following Coastal's request, Commerce informed all interested parties that it was initiating a scope inquiry to determine whether etouffee was included within the scope of the antidumping duty order on freshwater crawfish tail meat imported from the People's Republic of China. On August 30, 2004, the Crawfish Processors Alliance, an organization representing domestic producers of crawfish tail meat, submitted comments regarding Coastal's scope request and sought that etouffee be included within the scope of the antidumping duty order.

As required under § 351.225(k)(1) of its regulations, in deciding on the scope of an antidumping duty order, Commerce must consider the descriptions of the merchandise contained in the petition, the initial investigation, and the determinations of the Secretary and the Commission. Commerce considered those factors and found that they were not dispositive of whether crawfish etouffee is included within the scope of the relevant antidumping duty order. Commerce focused on the descriptions of etouffee in light of the language of the order that states that the product covered by the order is "freshwater crawfish tail meat, in all its forms (whether washed or with fat on, whether purged or unpurged), grades, and sizes; whether frozen, fresh, or chilled; and regardless of how it is packed, preserved, or prepared." 62 Fed. Reg. 48218-02 (emphasis added). Commerce observed that despite the different interpretations of what constitutes "preserved" or "prepared," the proper inquiry is not whether the tail meat in etouffee was "prepared" but rather whether "etouffee is still considered tail meat, or whether the tail meat has been transformed into a different product." Commerce found that the descriptions of etouffee in light of the scope order language did not resolve this inquiry.

Because the criteria set forth in 19 C.F.R. § 351.225(k)(1) were not dispositive of whether etouffee is included within the scope of the antidumping duty order, Commerce considered the additional Diversified Products factors,¹ as set forth in § 351.225(k)(2). Those factors include the physical characteristics of the product, the expectations of the ultimate purchasers the ultimate use of the product, the channels of trade in which the product is sold, and the manner in which the product is advertised and displayed. Commerce determined that no single factor is dispositive. However, Commerce found that the overall physical characteristics of tail meat, when included in etouffee, were altered from the physical characteristics of tail meat by itself. Accordingly, Commerce found that etouffee, when cooked in the manner described by Coastal, had undergone a substantial transformation into a new and different product. Commerce further found that the expectations of the ultimate users of etouffee differ from the expectations of the ultimate users of crawfish tail meat because etouffee is suitable only for heating and serving, whereas freshwater crawfish tail meat could be used in a variety of meals. Based on consideration of the various criteria, Commerce ruled that etouffee is not included within the scope of the antidumping duty order on freshwater crawfish tail meat.

The Court of International Trade sustained Commerce's scope ruling. Crawfish Processors Alliance, 431 F.Supp.2d at 1342. The court first determined that Commerce acted appropriately under its regulations when it initiated a scope inquiry. The court next found that Commerce considered the initial criteria set forth in § 351.225(k)(1) and determined that those criteria do not resolve whether etouffee is included within the scope of the order. Accordingly, Commerce was correct to further consider the Diversified Products factors set forth in § 351.225(k)(2). The court found that Commerce carefully considered the Diversified Products factors and that substantial evidence supported Commerce's determination that etouffee is not within the scope of the order. The court noted that etouffee is something more than merely "preserved" or "prepared" crawfish tail meat and that the essential character of crawfish tail meat is fundamentally changed when it becomes etouffee. Accordingly, the court granted judgment sustaining Commerce's scope ruling.

CPA timely appealed, and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION

"[W]e use the same standard of review that the Court of International Trade uses when reviewing scope determinations by the Commerce Department: whether substantial evidence supports Commerce's determination and whether that determination accords with law." Novosteel SA v. United States, 284 F.3d 1261, 1269 (Fed.Cir.2002). "Substantial evidence" 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). Moreover, we have held that Commerce "enjoys substantial freedom to interpret and clarify its antidumping duty orders." Ericsson GE Mobile Commc'ns, Inc. v. United States, 60 F.3d 778, 782 (Fed.Cir.1995).

On appeal, CPA argues that Commerce should not have considered the Diversified Products factors set forth in § 331.225(k)(2) because the scope language in the antidumping duty order is dispositive of the issue. According to CPA, etouffee is "preserved" and "prepared" crawfish tail meat and is therefore clearly within the scope of the antidumping duty order. CPA relies on Orlando Food Corp. v. United States, 140 F.3d 1437 (Fed.Cir. 1998), for its argument that a product can be "prepared" even when the product is significantly changed by the addition of other ingredients. CPA further argues that it was improper for the Court of International Trade to have considered whether the "essential character" of the crawfish tail meat in etouffee had been changed.

The government responds that although etouffee is "preserved and prepared," it cannot be considered "preserved or prepared crawfish tail meat" because the tail meat has undergone a substantial transformation. The government contends that etouffee is not properly considered as crawfish tail meat because etouffee is a new and different product. The government argues that Orlando Food is distinguishable on its facts because that case involved a prepared product that was not the final and finished product, whereas this case does involve a final and finished product. Moreover, the government asserts that Orlando Food actually supports its position that a product can be significantly altered such that the final product may be...