Perfectus Aluminum, Inc. v. United States, 2019-2129

• Decision Date: 06 November 2020
• Docket Number: 2019-2129
• Parties: PERFECTUS ALUMINUM, INC., Plaintiff-Appellant v. UNITED STATES, ALUMINUM EXTRUSIONS FAIR TRADE COMMITTEE, Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

PERFECTUS ALUMINUM, INC., Plaintiff-Appellant v. UNITED STATES, ALUMINUM EXTRUSIONS FAIR TRADE COMMITTEE, Defendants-Appellees

2019-2129

United States Court of Appeals for the Federal Circuit

November 6, 2020

NOTE: This disposition is nonprecedential.

Appeal from the United States Court of International Trade in No. 1:18-cv-00085-GSK, Judge Gary S. Katzmann.

THOMAS STEVEN BIEMER, Dilworth Paxson LLP, Philadelphia, PA, argued for plaintiff-appellant. Also represented by JAMES KEVIN HORGAN, ALEXANDRA H. SALZMAN, DeKieffer & Horgan, PLLC, Washington, DC; DAVID JOHN CREAGAN, White & Williams LLP, Philadelphia, PA.

AIMEE LEE, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for defendant- appellee United States. Also represented by JEFFREY B. CLARK, JEANNE DAVIDSON, LOREN MISHA PREHEIM, Washington, DC; DANIEL CALHOUN, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

ROBERT E. DEFRANCESCO, III, Wiley Rein, LLP, Washington, DC, argued for defendant-appellee Aluminum Extrusions Fair Trade Committee. Also represented by ALAN H. PRICE, TESSA V. CAPELOTO, CYNTHIA CRISTINA GALVEZ, DERICK HOLT, ADAM MILAN TESLIK, ELIZABETH V. BALTZAN, ELIZABETH S. LEE.

Before LOURIE, HUGHES, and STOLL, Circuit Judges.

LOURIE, Circuit Judge.

Perfectus Aluminum, Inc. ("Perfectus") appeals from a decision by the United States Court of International Trade ("Trade Court") sustaining a final scope ruling issued by the United States Department of Commerce ("Commerce"). See Perfectus Aluminum, Inc. v. United States, 391 F. Supp. 3d 1341 (Ct. Int'l Trade 2019) ("Trade Court Decision"). Commerce held in its final scope ruling that certain aluminum pallets fall within the scope of Commerce's May 2011 antidumping and countervailing duty orders on aluminum extrusions from the People's Republic of China. See Antidumping and Countervailing Duty Orders on Aluminum Extrusions from the People's Republic of China: Final Scope Ruling on Certain Aluminum Pallets (Dep't of Commerce June 13, 2017) ("Final Scope Ruling") (J.A. 19-34). For the reasons stated below, we affirm.

BACKGROUND

In 2011, Commerce issued an antidumping duty order and a countervailing duty order (the "AD/CVD Orders") on aluminum extrusions from the People's Republic of China. See Aluminum Extrusions from the People's Republic of China: Antidumping Duty Order, 76 Fed. Reg. 30650 (Dep't of Commerce May 26, 2011); Aluminum Extrusions from the People's Republic of China: Countervailing Duty Order, 76 Fed. Reg. 30653 (Dep't of Commerce May 26, 2011). The scope of the AD/CVD Orders reads, in relevant part:

The merchandise covered by the order[s] is aluminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys having metallic elements corresponding to the alloy series designations published by The Aluminum Association commencing with the numbers 1, 3, and 6 . . . .

AD/CVD Orders, 76 Fed. Reg. at 30650.¹ Also relevant here, the AD/CVD Orders set forth a specific exclusion from their scope, referred to as the "finished merchandise exclusion," which provides:

The scope . . . 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.

Id. at 30651 (emphasis added).

In March 2017, the Aluminum Extrusions Fair Trade Committee ("AEFTC") filed a request asking Commerce to issue a scope ruling finding that 6xxx series extruded aluminum profiles, which are cut-to-length and welded together in the form of pallets, are within the scope of theAD/CVD Orders.² In June 2017, Commerce issued its final scope ruling, in which it determined that the Series 6xxx Pallets are within the scope of the AD/CVD Orders. Final Scope Ruling, J.A. 19-34.

In its scope ruling, Commerce found that the Series 6xxx Pallets "satisfy the definition of the scope of the [AD/CVD] Orders because they are extruded aluminum profiles consisting of series 6xxx aluminum alloy which are cut-to-length and welded together." Id., J.A. 31. Commerce further explained that, "although the products are identified and referenced by their alleged end use, regardless of whether they are ready for use at the time of importation, this does not remove the products from the scope of the [AD/CVD] Orders." Id. Thus, Commerce found that the Series 6xxx Pallets are "included in the [AD/CVD] Orders based on the plain language of the scope." Id.

Commerce also considered whether the Series 6xxx Pallets qualify for the finished merchandise exclusion. Commerce determined that, to avoid reading the term "as parts" completely out of the language of the finished merchandise exclusion, that term must mean that "excluded 'finished merchandise' must contain both aluminum extrusions 'as parts' as well as an additional non-extruded aluminum component." Id. Moreover, Commerce explained that "an interpretation which would allow products which consist entirely of aluminum extrusions to be excluded from the scope of the [AD/CVD] Orders would allow the finished merchandise exclusion to swallow the rule embodied by the scope." Id., J.A. 32. Commerce concluded that "because the products at issue are only composed of aluminum extrusions, they do not meet the requirements for the finished merchandise exclusion." Id.

Perfectus sought judicial review of the final scope ruling by the Trade Court. In July 2019, the Trade Court issued its final judgment sustaining Commerce's final scope ruling. The Trade Court agreed with Commerce's reasoning that the Series 6xxx Pallets fit within the plain language of the AD/CVD Orders and do not qualify for the finished merchandise exclusion. Trade Court Decision, 391 F. Supp. 3d at 1353-55. The Trade Court further held that Commerce acted properly under the regulations set forth in 19 C.F.R. § 351.225 when it issued a scope ruling without initiating a formal scope inquiry. Id. at 1355-56. Finally, the Trade Court found that Commerce properly issued a scope ruling because the Series 6xxx Pallets were in existence and were not hypothetical products. Id. at 1356-57.

Perfectus appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

DISCUSSION

Upon receipt of an application for a scope ruling, Commerce's inquiry proceeds in steps. Commerce begins its inquiry by determining whether the scope of the order contains an ambiguity. Meridian Prods., LLC v. United States, 851 F.3d 1375, 1381 (Fed. Cir. 2017). If the scope is unambiguous, it governs. Id. "Because the meaning and scope of the Orders are issues particularly within Commerce's expertise and special competence, we grant Commerce substantial deference with regard to its interpretation of its own Orders." Whirlpool Corp. v. United States, 890 F.3d 1302, 1308 (Fed. Cir. 2018) (citing Meridian, 851 F.3d at 1381-82). "[Commerce] enjoys substantial freedom to interpret and clarify its antidumping orders." Novosteel SA v. United States, 284 F.3d 1261, 1269 (Fed. Cir. 2002) (quoting Ericsson GE Mobile Commc'ns, Inc. v. United States, 60 F.3d 778, 782 (Fed. Cir. 1995)). "We therefore afford 'significant deference to Commerce's interpretation of a scope order,' so long as Commerce's interpretation is not 'contrary to the order's terms' and does not 'change the scope of the order.'" Mid Continent Nail Corp. v. United States, 725 F.3d 1295, 1300 (Fed. Cir. 2013) (quoting Global Commodity Grp. LLC v. United States, 709 F.3d 1134, 1138 (Fed. Cir. 2013)).

After determining whether the scope of the order is unambiguous, Commerce proceeds to the two-step test set forth in 19 C.F.R. § 351.225(k) to determine whether the product at issue is within the scope. First, Commerce considers the scope language contained in the order, as well as the sources identified in § 351.225(k)(1), which are the descriptions contained in the petition and how the scope was defined in the investigation and in determinations issued by Commerce and the International Trade Commission (collectively, the "(k)(1) sources"). See Whirlpool, 890 F.3d at 1308 (citing Shenyang Yuanda Aluminum Indus. Eng'g Co. v. United States, 776 F.3d 1351, 1354 (Fed. Cir. 2015)). If the analysis of the (k)(1) sources is dispositive, Commerce issues a final scope ruling. Id.; see also 19 C.F.R. § 351.225(d) ("If the Secretary can determine, based solely upon the application and the descriptions of the merchandise referred to in paragraph (k)(1) of this section, whether a product is included within the scope of an order . . . , the Secretary will issue a final ruling as to whether the product is included within the order . . . .").

If Commerce's analysis of the (k)(1) sources is not dispositive, then Commerce must initiate a formal scope inquiry. See 19 C.F.R. § 351.225(e) ("If the Secretary finds that the issue of whether a product is included within the scope of an order . . . cannot be determined based solely upon the application and the descriptions of the merchandise referred to in paragraph (k)(1) of this section, the Secretary will notify by mail all parties on the Department's scope service list of the initiation of a scope inquiry."); see also 19 C.F.R. § 351.225(c)(2) ("Within 45 days of the date of receipt of an application for a scope ruling, the Secretary will issue a final ruling under paragraph (d) of this section or will initiate a scope inquiry under paragraph (e) of this section."). During any such formal scope inquiry, Commerce will consider the additional factors set forth in 19 C.F.R. § 351.225(k)(2).

When reviewing a Commerce scope ruling, "[w]e apply the same standard of review as the [Trade Court] . . . , though we give due respect to the [Trade Court]'s informed opinion." Meridian, 851 F.3d at 1380-81 (internal quotation marks and...