Mitsubishi Polyester Film, Inc. v. United States, Court No. 13–00062

CourtU.S. Court of International Trade
Writing for the CourtGary S. Katzmann, Judge
Citation228 F.Supp.3d 1359
Parties MITSUBISHI POLYESTER FILM, INC. and SKC, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Terphane, Inc. and Terphane, Ltda., Defendant–Intervenors.
Decision Date08 June 2017
Docket NumberCourt No. 13–00062,Slip Op. 17–70

228 F.Supp.3d 1359

MITSUBISHI POLYESTER FILM, INC. and SKC, Inc., Plaintiffs,
v.
UNITED STATES, Defendant,
and
Terphane, Inc. and Terphane, Ltda., Defendant–Intervenors.

Court No. 13–00062
Slip Op. 17–70

United States Court of International Trade.

June 8, 2017


228 F.Supp.3d 1362

Jeffrey I. Kessler , Wilmer, Cutler, Pickering, Hale and Dorr, LLP, of Washington, DC, argued for Plaintiff. With him on the brief were Ronald I. Meltzer , Patrick J. McLain , and David M. Horn .

Patricia M. McCarthy , Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Stuart F. Delery , Assistant Attorney General, Jeanne E. Davidson , Director, Jane C. Dempsey , Trial Attorney, and Mykhaylo Gryzlov , Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, Washington, DC.

J. Michael Taylor and Stephen A. Jones , King & Spalding, LLP, of Washington, DC, argued for Defendant–Intervenors. With them on the brief was Shannon M. Doyle .

OPINION AND ORDER

Gary S. Katzmann, Judge

Polyethylene terephthalate ("PET") is all around us. PET is a polymer with a great number of uses—for instance, PET film could be found in tamper-evident food packaging such as potato chip bags and safety seals, in frozen and refrigerated food packaging, in laminated materials such as traffic signs, in printable products used in graphical media, in the scratch-resistant coverings of smartphones, and in protective coverings that shield sensitive equipment from UV radiation, to name but a few applications. In this case the court considers whether a particular set of PET products manufactured abroad by Terphane, Ltda. and imported by Terphane Inc. (collectively "Terphane"), falls within the scope of a duly issued antidumping duty order on imports of certain PET products. The basic question is whether the Department of Commerce's ("Commerce") determination that Terphane's products were not within the scope of the antidumping duty order was supported by substantial evidence and in accordance with law. The court concludes that Commerce reasonably determined that the language of the order was ambiguous with respect to whether it includes films like Terphane's. The court also concludes that Commerce's analysis in determining that Terphane's films are not dispositively in scope is deficient and unsupported by substantial evidence. Accordingly, the case is remanded for further proceedings.

Generally speaking, PET film production begins with the polymerization process, in which the combination of certain chemicals and additives, heated in multiple rounds and then cooled, forms PET pellets or "chips." The next phase is extrusion.

228 F.Supp.3d 1363

The PET chips are melted and then squeezed through a die, cooled, heated, and manipulated to a specified length or width. "Co-extrusion" by contrast involves the simultaneous extrusion of polymer from multiple lines through a single die; in other words, extrusion involves only one stream of polymer, whereas co-extrusion involves multiple streams of polymer that may differ in their chemical makeup and physical properties. At the time of co-extrusion, these multiple outputs may be stacked or alternated to form a single, layered, co-extruded PET product. After extrusion or co-extrusion, the molten polymer substance is cooled, and then stretched to form a film. The PET product may still be altered or treated in some way, such as through the addition of another layer or coating to a side of the PET; this may occur "in-line," as part of the manufacturing process, or "off-line." Thereafter it is trimmed and bound as necessary. The many variables in these procedures permit the customizability in performance characteristics necessary to vend PET to a broad and highly diverse market.

This matter comes before the court on the Motion of Plaintiffs Mitsubishi Polyester Film, Inc. and SKC, Inc. (collectively "Mitsubishi") for Judgment on the Agency Record, pursuant to USCIT Rule 56.2, with regard to the determination by Commerce issued in the "Antidumping Duty Order on PET Film, Sheet, and Strip from Brazil: Final Scope Ruling, Terphane, Inc. and Terphane Ltda." (Jan. 7, 2013), PD 35 ("Terphane Scope Ruling " or "Scope Ruling "). Mitsubishi argues that a number of legal and factual determinations in the Scope Ruling , in which Commerce found that certain of Terphane's PET film products are outside of the scope of the underlying antidumping duty order, are contrary to law and, alternately, unsupported by substantial evidence on the record pursuant to Section 516A(b)(1)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(b)(1)(B)(i).1 Pl.'s Mot. for J. on the Agency R. and Br. in Supp., Aug. 2, 2013, ECF No. 22 ("Pl.'s Br."); Pl.'s Reply, Feb. 3, 2014, ECF No. 38 ("Pl.'s Reply"); Pl.'s Compl., Mar. 8, 2013, ECF No. 13 ¶ 11 ("Pl.'s Compl."). Mitsubishi thus seeks remand.2 Pl.'s Compl. ¶ 28. Defendant United States (or "the Government") and defendant-intervenors Terphane oppose plaintiffs' motion. Def.'s Opp'n, Dec. 4, 2013, ECF No. 29 ("Def.'s Opp'n"); Def.–Inter.'s Opp'n, Dec. 4, 2013, ECF No. 31 ("Def.–Inter.'s Opp'n").

BACKGROUND

I. Legal Framework

Under the antidumping statute, Commerce imposes duties on imported merchandise that "is being, or is likely to be, sold in the United States at less than fair value," i.e. "dumped," and harms domestic industry. 19 U.S.C. §§ 1673, 1677(34). An industry, which "means the producers as a whole of a domestic like product,"3 19 U.S.C. § 1677(4)(A), may petition Commerce to initiate a dumping investigation pursuant to § 1673a(b). A petition must be filed "by or on behalf of the industry," and

228 F.Supp.3d 1364

must "allege [ ] the elements necessary for the imposition of the duty ... accompanied by information reasonably available to the petitioner supporting those allegations." 19 U.S.C. § 1673a(b)(1), (c)(1)(A), (c)(4)(A).

If Commerce determines that a petition meets these requirements, it initiates an investigation. 19 U.S.C. § 1673a(a)(1). Commerce then collects information from foreign producers and makes a preliminary determination as to the extent of alleged dumping. 19 U.S.C. § 1673b(b). The International Trade Commission ("ITC") meanwhile collects information from the affected domestic industry and makes a preliminary determination as to whether material injury or a threat thereof exists. 19 U.S.C. § 1673b(a). Within seventy-five days of its own preliminary determination, Commerce shall make a final determination regarding the existence and extent of dumping. 19 U.S.C. § 1673d(a). If that determination is affirmative, the ITC will make a final determination as to material injury or threat thereof to the affected domestic industry. 19 U.S.C. § 1673d(b). If the ITC's determination is also affirmative, then Commerce shall publish an antidumping duty order that "includes a description of the subject merchandise, in such detail as the administering authority deems necessary." 19 U.S.C. § 1673e(a)(2).

When a question arises as to whether a particular product is included in an antidumping duty order, an interested party may apply for a scope ruling from Commerce. 19 C.F.R. § 351.225(a), (c) (2012) ; see 19 U.S.C. § 1516a(a)(2)(B)(vi). While no specific statutory provision governs the interpretation of the scope of antidumping duty orders, Commerce has filled the statutory gap with a regulatory framework, which has been interpreted by the Federal Circuit and this Court into a three-step process. See Meridian Prod., LLC v. United States , 851 F.3d 1375, 1381 (Fed. Cir. 2017) (citing Shenyang Yuanda Aluminum Indus. Eng'g Co. v. United States , 776 F.3d 1351, 1354 (Fed. Cir. 2015) ); 19 C.F.R. § 351.225.

The plain language of the antidumping duty order is "paramount" in determining whether particular products are included within its scope. Fedmet Res. Corp. v. United States , 755 F.3d 912, 918 (Fed. Cir. 2014) (citing King Supply Co. LLC v. United States , 674 F.3d 1343, 1345 (Fed. Cir. 2012) ). Thus "Commerce's inquiry must begin with the order's scope to determine whether it contains an ambiguity and, thus, is susceptible to interpretation." Meridian Prod. , 851 F.3d at 1381 ; see Fedmet , 755 F.3d at 923–24 ("[T]he first step of a scope ruling proceeding is to determine whether the governing language is in fact ambiguous." (citing ArcelorMittal Stainless Belg. N.V. v. United States , 694 F.3d 82, 87 (Fed. Cir. 2012) )). "[B]ecause the meaning and scope of ... orders are issues particularly within [Commerce's] expertise and special competence," Commerce is entitled to "substantial deference" with regard to interpretation of its own antidumping duty orders. Meridian Prod. , 851 F.3d at 1381–82 (citing King Supply , 674 F.3d at 1348 ). If the language of the order is unambiguous, its plain meaning governs, and the analysis ends. ArcelorMittal , 694 F.3d at 87.

If the language is ambiguous, Commerce must review it in light of "[t]he descriptions of the merchandise contained in the petition, the initial investigation, and the determinations of [Commerce] (including prior scope...

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6 practice notes
  • Hartford Fire Ins. Co. v. United States, Slip Op. 17-103
    • United States
    • U.S. Court of International Trade
    • August 10, 2017
    ...render them mandatory in that sense. See infra; see also, e.g., Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ___, ___, 228 F. Supp. 3d 1359, 1382 (2017) ([I]nvalidation is not warranted because the time period in [19 C.F.R. § 351.225(c)(2)] is directory, not mandatory, as it doe......
  • Hartford Fire Ins. Co. v. United States, Consol. Court No. 09-00122 Slip Op. 17-103.
    • United States
    • U.S. Court of International Trade
    • August 10, 2017
    ...render them mandatory in that sense. See infra; see also, e.g., Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, ––––, 228 F.Supp.3d 1359, 1382 (2017) ( [I]nvalidation is not warranted because the time period in [19 C.F.R. § 351.225(c)(2) ] is directory, not mandatory, as it d......
  • Jiangsu Zhongji Lamination Materials Co. v. United States, Slip Op. 19-111
    • United States
    • U.S. Court of International Trade
    • August 15, 2019
    ...within the statutory timeframe." Id. at 1625 ; see also Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, ––––, 228 F. Supp. 3d 1359, 1382 (2017) (finding that a time period provision was "directory, not mandatory, as it [did] not specify a consequence for failure to comply"). ......
  • Fabuwood Cabinetry Corp. v. United States, Slip Op. 20-121
    • United States
    • U.S. Court of International Trade
    • August 19, 2020
    ...invalid." Def.-Inter.'s Resp. to Questions at 5–6 (citing Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, ––––, 228 F. Supp. 3d 1359, 1381 (2017) ; Suntec Indus. Co. v. United States, 37 C.I.T. 1670, ––––, 951 F. Supp. 2d 1341, 1352 (2013) ). The court is unpersuaded by this ......
  • Request a trial to view additional results
6 cases
  • Hartford Fire Ins. Co. v. United States, Slip Op. 17-103
    • United States
    • U.S. Court of International Trade
    • August 10, 2017
    ...render them mandatory in that sense. See infra; see also, e.g., Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ___, ___, 228 F. Supp. 3d 1359, 1382 (2017) ([I]nvalidation is not warranted because the time period in [19 C.F.R. § 351.225(c)(2)] is directory, not mandatory, as it doe......
  • Hartford Fire Ins. Co. v. United States, Consol. Court No. 09-00122 Slip Op. 17-103.
    • United States
    • U.S. Court of International Trade
    • August 10, 2017
    ...render them mandatory in that sense. See infra; see also, e.g., Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, ––––, 228 F.Supp.3d 1359, 1382 (2017) ( [I]nvalidation is not warranted because the time period in [19 C.F.R. § 351.225(c)(2) ] is directory, not mandatory, as it d......
  • Jiangsu Zhongji Lamination Materials Co. v. United States, Slip Op. 19-111
    • United States
    • U.S. Court of International Trade
    • August 15, 2019
    ...within the statutory timeframe." Id. at 1625 ; see also Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, ––––, 228 F. Supp. 3d 1359, 1382 (2017) (finding that a time period provision was "directory, not mandatory, as it [did] not specify a consequence for failure to comply"). ......
  • Fabuwood Cabinetry Corp. v. United States, Slip Op. 20-121
    • United States
    • U.S. Court of International Trade
    • August 19, 2020
    ...invalid." Def.-Inter.'s Resp. to Questions at 5–6 (citing Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, ––––, 228 F. Supp. 3d 1359, 1381 (2017) ; Suntec Indus. Co. v. United States, 37 C.I.T. 1670, ––––, 951 F. Supp. 2d 1341, 1352 (2013) ). The court is unpersuaded by this ......
  • Request a trial to view additional results

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