Mitsubishi Polyester Film, Inc. v. United States, Slip Op. 18–71

• Decision Date: 19 June 2018
• Docket Number: Slip Op. 18–71,Court No. 13–00062
• Citation: 321 F.Supp.3d 1298
• Parties: MITSUBISHI POLYESTER FILM, INC. and SKC Inc., Plaintiffs, v. UNITED STATES, Defendant, and Terphane, Inc. and Terphane, Ltda., Defendant–Intervenors.
• Court: U.S. Court of International Trade

321 F.Supp.3d 1298

MITSUBISHI POLYESTER FILM, INC. and SKC Inc., Plaintiffs,

v.UNITED STATES, Defendant,andTerphane, Inc. and Terphane, Ltda., Defendant–Intervenors.

Slip Op. 18–71

Court No. 13–00062

United States Court of International Trade.

Dated: June 19, 2018

Patrick J. McLain, Wilmer, Cutler, Pickering, Hale & Dorr, LLP, of Washington, DC, argued for plaintiffs. With him on the brief were Ronald I. Meltzer 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 Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Sonia M. Orfield, Trial Attorney. Of counsel on the brief was Nanda Srikantaiah, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

J. Michael Taylor, King and Spalding LLP, of Washington, DC, argued for defendant-intervenors. With him on the brief was Stephen A. Jones.

OPINION

Katzmann, Judge:

In the college graduation party scene of an oft-referenced 1967 film, family friend Mr. McGuire famously offers "one word" to Benjamin Braddock, the 21–year old honoree: "Plastics."¹ "There's a great future in plastics," he insisted. "Think about it. Will you think about it?" The court in this opinion endeavors to do just that.

Before the court is the United States Department of Commerce's ("Commerce") Final Results of Redetermination Pursuant to Court Remand Order (Dep't Commerce Oct. 20, 2017) ("Remand Results"), ECF Nos. 108–09, which the court had ordered in Mitsubishi Polyester Film, Inc. v. United States, 41 CIT ––––, 228 F.Supp.3d 1359 (2017) (" Mitsubishi I"). Plaintiffs Mitsubishi Polyester Film, Inc. and SKC, Inc. (collectively, "Mitsubishi") contest the Remand Results and seek another remand. Mitsubishi's Comments ("Pl.'s Br."), Nov. 20, 2017, ECF No. 112. Defendant the United States, on behalf of Commerce, and Defendant–Intervenors Terphane, Inc. and Terphane, Ltda. (collectively, "Terphane") ask the court to sustain the Remand Results in their entirety. Government's Reply Comments ("Def.'s Br."), Dec. 15, 2017, ECF No. 113; Terphane's Reply Comments ("Def.–Inter.'s Br."), Dec. 15, 2017, ECF No. 114. The court sustains the Remand Results in their entirety.

BACKGROUND

The full background of this case prior to the instant remand proceedings may be found in Mitsubishi I. That opinion explained the nature of polyethylene terephthalate ("PET") film, which is the family of the products at issue, and summarized its relevant production processes:

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. 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."

Mitsubishi I, 228 F.Supp.3d at 1362–63.

I. Initial Proceedings Before Commerce.

On September 28, 2007, Mitsubishi, Dupont Teijin Films, and Toray Plastics (America), Inc. ("Petitioners"), filed an antidumping duty petition covering "all PET film imported into the United States from Brazil, China, Thailand and the UAE." Polyethylene Terephthalate Film, Sheet, and Strip From Brazil, People's Republic of China, Thailand and the United Arab Emirates, Antidumping Duty Petition ("Petition") at 9 (Sept. 28, 2007), in Terphane's Scope Ruling Request Letter ("Scope Ruling Request") at Ex. 23, PD 1–3, CD 1–4 (Feb. 22, 2012); Commerce's Ex Parte Memo Placing Petition on the Record (July 18, 2017), RPD 1–6; Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) From Brazil, the People's Republic of China, Thailand, and the United Arab Emirates: Initiation of Antidumping Duty Investigations, 72 Fed. Reg. 60,801 (Dep't Commerce Oct. 26, 2007) (initiation of investigation). In proposing the domestic like product to be investigated, Petitioners suggested the definition used by the International Trade Commission ("ITC") in its investigations into PET products from India and Taiwan:

[A]ll gauges of raw, pretreated, or primed PET film, whether extruded or coextruded. Excluded are metallized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layer more than 0.00001 inches thick.

Petition at 9; Polyethylene Terephthalate Film, Sheet and Strip From India and Taiwan, USITC Publication No. 3518, Inv. Nos. 701–TA–415 and 731–TA–933–934, 2002 WL 1558215 (June 2002) (Final) (" India and Taiwan ITC Final") at 4, in Scope Ruling Request at Ex. 27. Terphane, a Brazilian producer of PET film, was a respondent in the ensuing investigation. Mitsubishi I, 228 F.Supp.3d at 1365. Commerce made an affirmative determination of dumping of PET film from Brazil, issued Terphane a weighted-average dumping margin of 44.36%, and issued an antidumping duty order on PET Film from Brazil on November 10, 2008. Id.; see Polyethylene Terephthalate Film, Sheet, and Strip From Brazil, the People's Republic of China and the United Arab Emirates: Antidumping Duty Orders and Amended Final Determination of Sales at Less Than Fair Value for the United Arab Emirates, 73 Fed. Reg. 66,595 (Dep't Commerce Nov. 10, 2008) ("Order"). The scope of the Order, which identifies the merchandise covered, contained substantially the language proposed by Petitioners:

The products covered by each of these orders are all gauges of raw, pre-treated, or primed PET film, whether extruded or co-extruded. Excluded are metallized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layer more than 0.00001 inches thick. Also excluded is roller transport cleaning film which has at least one of its surfaces modified by application of 0.5 micrometers of SBR latex. Tracing and drafting film is also excluded. PET film is classifiable under subheading 3920.62.00.90 of the Harmonized Tariff Schedule of the United States (HTSUS). While HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of these orders is dispositive.

Id. at 66,595 –96 (emphasis added). The first two sentences of the Order's scope are at the heart of subsequent administrative proceedings and ultimately this litigation. The second sentence, containing an exclusion for certain PET films, is referred to in this opinion as the Second Sentence Exclusion.

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). 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 as a multi-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. "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 Res. Corp. v. United States, 755 F.3d 912, 920 (Fed. Cir. 2014).

If the language contains an ambiguity, 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 determinations) and the [ITC]." 19 C.F.R. § 351.225(k)(1) ("(k)(1) factors"); Whirlpool Corp. v. United States, 890 F.3d 1302, 1307–08 (Fed. Cir. 2018). If these factors are dispositive, the analysis ends, and Commerce issues a final scope ruling. See 19 C.F.R. § 351.225(k). To be dispositive, the (k)(1) factors must be controlling of the scope inquiry in the sense that they definitively answer the scope question. Meridian Prod., 851 F.3d at 1382 n.8 (citing Sango Int'l, L.P. v. United States, 484 F.3d 1371, 1379 (Fed. Cir. 2007) ).²

In February 2012, Terphane requested a scope ruling to determine whether four of the PET film products it manufactures in and imports from Brazil, and sells in the United States (collectively "Copolymer Surface Films"), are subject to the Order.³

Scope Ruling Request; see 19 C.F.R. § 351.225(c). The thrust of Terphane's argument was, and still is, that its Copolymer Surface Films are not covered by the scope of the Order because they all "have a performance-enhancing resinous layer that exceeds the thickness requirement listed in the scope exclusion." Mitsubishi I, 228 F.Supp.3d at 1366 (quoting Scope Ruling Request at 3). This resinous layer possesses chemical properties different from the core PET layer or layers to which it is conjoined through coextrusion.

Commerce issued a scope determination on January 7, 2013. Antidumping Duty Order on PET Film, Sheet, and Strip from Brazil: Final Scope...