Meridian Prods., LLC v. United States

• Decision Date: 22 May 2018
• Docket Number: 2016-2657
• Citation: 890 F.3d 1272
• Parties: MERIDIAN PRODUCTS, LLC, Plaintiff–Appellee Whirlpool Corporation, Plaintiff v. UNITED STATES, Defendant Aluminum Extrusions Fair Trade Committee, Defendant–Appellant
• Court: U.S. Court of Appeals — Federal Circuit

890 F.3d 1272

MERIDIAN PRODUCTS, LLC, Plaintiff–AppelleeWhirlpool Corporation, Plaintiff

v. UNITED STATES, DefendantAluminum Extrusions Fair Trade Committee, Defendant–Appellant

2016-2657

United States Court of Appeals, Federal Circuit.

Decided: May 22, 2018

Frances Pierson Hadfield, Crowell & Moring, LLP, New York, NY, argued for plaintiff-appellee. Also represented by Alexander Schaefer, Washington, DC.

Robert E. DeFrancesco, III, Wiley Rein, LLP, Washington, DC, argued for defendant-appellant. Also represented by Alan H. Price, Tessa V. Capeloto, Derick Holt.

Before Newman, O'Malley, and Reyna, Circuit Judges.

Reyna, Circuit Judge.

Aluminum Extrusions Fair Trade Committee appeals the decision of the United States Court of International Trade affirming a remand determination of the United States Department of Commerce. Commerce originally determined that imports of certain extruded aluminum door handles for kitchen appliances that are packaged for importation with two plastic end caps and two screws are within the scope of relevant antidumping and countervailing duty orders. On appeal, the Court of International Trade concluded that Commerce's original scope ruling was unreasonable and unsupported by substantial evidence and remanded to Commerce for reconsideration. On remand, Commerce determined, under protest, that the subject products are not included in the scope of the relevant orders. The Court of International Trade affirmed Commerce's redetermination. We reverse and remand .

BACKGROUND

I. Antidumping and Countervailing Duty Orders

On March 31, 2010, the Aluminum Extrusions Fair Trade Committee ("AEFTC") and the United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy Allied Industrial and Service Workers International Union filed petitions with Commerce requesting initiation of antidumping and countervailing duty investigations on imports of certain aluminum extrusions from the People's Republic of China. On April 27, 2010, Commerce initiated antidumping and countervailing duty investigations based on those petitions. On May 26, 2011, Commerce issued antidumping and countervailing duty orders on aluminum extrusions from China. See Aluminum Extrusions from the People's Republic of China ("Antidumping Duty Order "), 76 Fed. Reg. 30,650 (Dep't of Commerce May 26, 2011) ; Aluminum Extrusions from the People's Republic of China ("Countervailing Duty Order "), 76 Fed. Reg. 30,653 (Dep't of Commerce May 26, 2011).¹ The antidumping duty order describes the scope of the duty order as covering imports from China of aluminum extrusions that are shapes and forms, produced by an extrusion process, made from specified aluminum alloys. Antidumping Duty Order , 76 Fed. Reg. at 30,650. The extrusions possess "a wide variety of shapes and forms" in "a variety of finishes." Id. The following is a relevant excerpt of the scope language:

Subject aluminum extrusions may be described at the time of importation as parts for final finished products that are assembled after importation, including, but not limited to, window frames, door frames, solar panels, curtain walls, or furniture. Such parts that otherwise meet the definition of aluminum extrusions are included in the scope. The scope includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled merchandise unless imported as part of the finished goods ‘kit’ defined further below. The scope does not include the non-aluminum extrusion components of subassemblies or subject kits.

Id. at 30,650 –51. The scope also contains several exclusions:

The scope also excludes 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 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.

Id. at 30,651.

II. Scope Ruling Request

The scope of an antidumping duty order may be challenged upon a request for a ruling on the scope of the order, i.e., whether particular merchandise is covered by the scope of the order. 19 C.F.R. § 351.225(c)(1). On January 11, 2013, Meridian requested that Commerce review the scope of the antidumping duty order to confirm whether three types of imported aluminum extruded kitchen appliance door handles are within the scope of the antidumping duty order. Meridian described the three types of door handles as follows:

(1) Type A handles are for attachment to oven doors. They are made of aluminum extrusions, which are brushed and anodized. Holes are drilled in the handles.

(2) Type B handles are for attachment to oven doors. The handles are made of aluminum extrusions, plus two plastic injection molded end caps at each end. The end caps are used to fasten the handle to the door. Holes are drilled in the handles.²

(3) Type C handles are for attachment to freezer doors. They are made of aluminum extrusions and include an allen wrench and installation instructions. Holes are drilled in the handles.

J.A. 540.

Meridian argued that the door handles meet the "finished goods kit" exclusion and are therefore not within the scope of the order. J.A. 112, 131. Commerce initiated a formal scope inquiry on February 25, 2013, and solicited additional information from interested parties.

III. Procedural History

On June 21, 2013, Commerce issued its final scope ruling based on its consideration of submissions by the parties, the "description of the products in the Scope Request, the scope language, and the Department's previous scope rulings concerning the Orders." J.A. 550. Commerce found that all of Meridian's handles are covered by the scope of the antidumping duty order. J.A. 550–53.

With respect to the Type B handles, the only handle subject to this appeal, Commerce determined that Meridian's products, with the exception of the fasteners, consist entirely of aluminum extrusions covered by the scope of the antidumping duty order. Commerce found that the Type B handles were not "finished goods kits" because the "scope of the Orders indicates that the inclusion of fasteners in the packaging will not transform an aluminum extrusion product into a finished goods kit." J.A. 550. In addition, Commerce found that the "scope expressly includes aluminum extrusions which are identified by reference to their end use."

Id . Commerce concluded that Meridian's Type B handles were identified by their end use (handles for kitchen oven doors), and that they otherwise met the general scope definitions. Based on these findings, Commerce determined that the Type B handles were within the scope of the Orders. Commerce concluded that the 19 C.F.R. § 351.225(k)(1) factors, specifically the "scope of the Orders and prior scope rulings" were dispositive, and that it was unnecessary to consider the 19 C.F.R. § 351.225(k)(2) factors. J.A. 550.

A. Meridian I

Meridian appealed Commerce's final scope ruling to the United States Court of International Trade ("CIT"). The CIT affirmed Commerce's scope ruling that Type A and Type C door handles consisting of a single extruded handle (and fasteners etc.) are within the scope of the orders. Meridian Prods., LLC v. United States , 125 F.Supp.3d 1306, 1310–12 (Ct. Int'l Trade 2015) (" Meridian I "). Meridian does not challenge or appeal before the court the Type A and Type C rulings.

The CIT, however, determined the Type B handles are "assemblies" not within the scope because the extruded aluminum handles are packaged with two plastic injection molded end caps, and two screws. The CIT explained that the plastic end caps are not fasteners but "specialized parts, molded to a shape necessary to their function as components of a complete handle assembly, in which they are fitted to the ends of the extruded aluminum component." Id. at 1314. Based on these conclusions, the CIT held that the Type B handles are not within the general scope of the antidumping duty order.

The CIT further concluded that even if the Type B handles are within the scope, they would be excluded under the "finished merchandise" exclusion because the Type B handles are ready for use "as is" at the time of importation. Id. at 1315–16. Because the CIT identified record evidence that the Type B handles were assembled at the time of entry, it faulted Commerce for "not analyz[ing] the Type B handles separately with respect to the finished merchandise exclusion," but rather "address[ing] all three handle types simultaneously." Id .

The CIT remanded to Commerce instructing Commerce to provide clarification on its scope ruling in view of the CIT's decision that "Type B handles are not included within the general scope of the antidumping duty order." Id . at 1312–16.

B. Meridian II

On remand, Commerce affirmed that its original scope ruling was correct. In its Final Result of Redetermination, Commerce determined that "the Type B door handles are covered by the general scope language and are not excluded under either the ‘finished merchandise’ or ‘finished goods kit’ exclusions." J.A. 34 (Commerce's Remand Redetermination dated March 23, 2016). Commerce specifically found that both the scope language and record evidence supported its finding that the plastic end caps of the Type B handles should be treated as fasteners....