Sumecht NA, Inc. v. United States

• Decision Date: 06 September 2019
• Docket Number: Slip Op. 19-118,Court No. 17-00244
• Citation: 399 F.Supp.3d 1370
• Parties: SUMECHT NA, INC., d.b.a., Sumec North America, Plaintiff, v. UNITED STATES, Defendant, and SolarWorld Americas, Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

399 F.Supp.3d 1370

SUMECHT NA, INC., d.b.a., Sumec North America, Plaintiff,

v.UNITED STATES, Defendant,andSolarWorld Americas, Inc., Defendant-Intervenor.

Slip Op. 19-118

Court No. 17-00244

United States Court of International Trade.

Dated: September 6, 2019

Mark B. Lehnardt, Baker & Hostetler, LLP, of Washington, D.C., argued for Plaintiff Sumecht NA, Inc., d.b.a., Sumec North America. With him on the briefs were Michael S. Snarr, Lindita V. Ciko Torza, and Jake R. Frischknecht.

Justin R. Miller, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel was Mercedes C. Morno, Mykhaylo A. Gryzlov, Natan P.L. Tubman, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C, and Daniel J. Calhoun, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, D.C. Stephen C. Tosini, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., David W. Campbell, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C., also appeared.

Timothy C. Brightbill, Laura El-Sabaawi, and Usha Neelakantan, Wiley Rein, LLP, of Washington, D.C., appeared on the briefs for Defendant-Intervenor SolarWorld Americas, Inc. Adam M. Teslik, Cynthia C. Galvez, Maureen E. Thorson, and Tessa V. Capeloto also appeared.

Choe-Groves, Judge:

This is a case of first impression involving a challenge to the U.S. Department of Commerce's ("Commerce") late publication of a " Timken Notice" after the statutory deadline had passed, which applied a change in antidumping duty deposit rates retroactively. Plaintiff Sumecht NA, Inc., doing business as Sumec North America ("Plaintiff" or "Sumec"), imports crystalline silicon photovoltaic cells (solar panels) from the People's Republic of China ("China") and contests the retroactive application of the changed antidumping duty deposit rates.

A " Timken Notice" is a notice issued by Commerce if this Court or the U.S. Court of Appeals for the Federal Circuit renders a decision that is not in harmony with Commerce's prior determination. See 19 U.S.C. § 1516a(c)(1) (2012) ; Timken Co. v. United States, 893 F.2d 337, 341 (Fed. Cir. 1990). Following the issuance of a contrary court decision, "Commerce must publish notice of the decision within ten days of issuance (i.e., entry of judgment), regardless of the time for appeal or of whether an appeal is taken." Timken, 893 F.2d at 341 (emphasis omitted). Under 19 U.S.C. § 1516a(c)(1) and Timken, the effect of Commerce's publication in the Federal Register is to put the public on notice of a contrary court decision and that liquidation should no longer take place in accordance with Commerce's prior determination. See Timken, 893 F.2d at 342. By the publication of a Timken notice, the public is put on notice that entries made after publication are to be liquidated in accordance with the final, conclusive, court decision. Id.; see also 19 U.S.C. § 1516a(c)(1).

In the present action, Commerce did not publish the Timken Notice by October 15, 2015 (the statutorily required deadline of ten days after issuance of the court's contrary decision on October 5, 2015). Instead, Commerce published the Timken Notice in this case on November 23, 2015, forty-nine days after the court's contrary decision. Commerce set a retroactive effective date for the changed antidumping duty rate to October 15, 2015, ten days after the issuance of the court's decision. This case asks what result should be reached when Commerce missed its statutorily mandated Timken Notice deadline and yet issued a retroactive effective date for the new antidumping duty rate as if it had not missed the deadline. Plaintiff alleges that U.S. Customs and Border Protection ("Customs" or "CBP") unlawfully assessed duties at the 238.95% China-wide entity rate by the retroactive application of the China-wide entity rate to merchandise that entered after the court's decision of October 5, 2015 but before the publication of the Timken Notice in the Federal Register on November 23, 2015. See Am. Compl. ¶¶ 24–25, Oct. 10, 2017, ECF No. 15.

Before the court is Plaintiff's motion for judgment on the agency record, which presents one issue for review: whether Commerce's decision to retroactively set the effective date of the Timken Notice, amended cash deposit instructions, and automatic liquidation instructions was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law. For the following reasons, the court grants Plaintiff's motion.

PROCEDURAL HISTORY

Commerce initiated an antidumping duty investigation of certain solar cells from China on November 16, 2011. See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China, 76 Fed. Reg. 70,960 (Dep't Commerce Nov. 16, 2011) (initiation of antidumping duty investigation). During the investigation, Sumec Hardware & Tools Co., Ltd. ("Sumec Hardware") applied for a separate rate. See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China, 77 Fed. Reg. 31,309 (Dep't Commerce May 25, 2012) (preliminary determination of sales at less than fair value, postponement of the final determination and affirmative preliminary determination of critical circumstances) ("Preliminary Determination"). Sumec Hardware is Sumec's Chinese affiliate that exports subject merchandise to Sumec. Mot. Sumecht NA Inc., d.b.a. Sumec North America, J. Agency R. 3, Sept. 7, 2018, ECF No. 61–1 ("Pl.'s Br."). In the Preliminary Determination, Commerce determined that Sumec Hardware demonstrated both de jure and de facto absence of government control as to exports of the subject merchandise, and Commerce assigned a separate antidumping duty rate of 24.48 percent. See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China, 77 Fed. Reg. 73,018, 73,021 (Dep't Commerce Dec. 7, 2012) (amended final determination of sales at less than fair value and antidumping duty order) ("2012 Antidumping Duty Order"); see also Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China, 77 Fed. Reg. 63,791, 63,794 (Dep't Commerce Oct. 17, 2012) (final determination of sales at less than fair value and affirmative final determination of critical circumstances, in part). Commerce assigned a China-wide entity rate of 249.96 percent. 2012 Antidumping Duty Order, 77 Fed. Reg. at 73,021.

United States producers of the subject merchandise challenged Sumec Hardware's separate rate status and Commerce's final determination in the United States Court of International Trade. See Jiangsu Jiasheng Photovoltaic Tech. Co. v. United States, 38 CIT ––––, ––––, 28 F. Supp. 3d 1317, 1321 & n.1 (2014) (" Jiangsu Jiasheng I"). Sumec Hardware belatedly moved to intervene in Jiangsu Jiasheng, and the court denied Sumec Hardware's motion to intervene as out of time. See Jiangsu Jiasheng Photovoltaic Tech. Co. v. United States, 39 CIT ––––, ––––, 72 F. Supp. 3d 1378, 1380 (2015) (" Jiangsu Jiasheng II"). In Jiangsu Jiasheng I, the court remanded the final determination for a reexamination of the separate rates. 28 F. Supp. 3d at 1351–52. On remand, Commerce determined that three of the four respondents reviewed as part of the remand did not show that the respondents were free from government control. See Jiangsu Jiasheng Photovoltaic Tech. Co. v. United States, 39 CIT ––––, ––––, 121 F. Supp. 3d. 1263, 1265 (2015) (" Jiangsu Jiasheng III"). Commerce found that Sumec Hardware was ineligible for separate rate status and was part of the China-wide entity. Commerce assigned Sumec Hardware the China-wide entity rate of 249.96 percent. See Final Results of Redetermination Pursuant to Court Order, Jiangsu Jiasheng, Ct. No. 13-00012, 10–11, 31, Apr. 21, 2015, ECF No. 98–1.

While Commerce's remand redetermination was under review, Commerce implemented findings by the World Trade Organization dispute settlement panels and the Appellate Body pursuant to Section 129 of the Uruguay Round Agreements Act ("URAA"). See Implementation of Determinations Under Section 129 of the URAA, 80 Fed. Reg. 48,812 (Dep't Commerce Aug. 14, 2015) ("URAA Implementation"); see also 19 U.S.C. § 3538 (2012). Commerce changed Sumec Hardware's cash deposit rate to 13.18 percent for entries made on or after August 2, 2015. See URAA Implementation at 48,818. Subsequently, the court sustained Commerce's remand results in a confidential opinion and entered judgment on October 5, 2015. See Jiangsu Jiasheng III, 121 F. Supp. 3d at 1266 ; Judgment, Jiangsu Jiasheng III, Ct. No. 13-00012 (Ct. Int'l. Trade Oct. 5, 2015), ECF No. 120. Because Sumec Hardware was not allowed to intervene in that action, the court did not opine on Sumec Hardware's arguments against the remand results. Jiangsu Jiasheng III, 121 F. Supp. 3d at 1265 n.5.

Commerce published a Timken Notice on November 23, 2015, after issuance of the court's decision that was not in harmony with Commerce's final determination. See Jiangsu Jiasheng III, 121 F. Supp. 3d at 1273. The Timken Notice date of publication was forty-nine days after the issuance of the confidential opinion and judgment. See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China, 80 Fed. Reg. 72,950 (Dep't Commerce Nov. 23, 2015). Commerce stated in its Timken Notice that Commerce would continue the suspension of liquidation of the subject merchandise pending the expiration of appeal, or if appealed, pending a...