SunEdison, Inc. v. United States
| Decision Date | 14 June 2016 |
| Docket Number | Consol. Court No. 15-000661,Slip Op. 16-59 |
| Citation | 179 F.Supp.3d 1309 |
| Parties | SunEdison, Inc., Plaintiff, v. United States, Defendant. |
| Court | U.S. Court of International Trade |
David S. Christy, Jr. , Michael P. House , and David J. Townsend , Perkins Coie LLP, of Washington, DC, for Plaintiff SunEdison, Inc.
J. Kevin Horgan and Alexandra H. Salzman , deKieffer & Horgan, PLLC, of Washington, DC, for Plaintiffs Kyocera Solar, Inc. and Kyocera Mexicana S.A. de C.V.
Joshua E. Kurland and Agatha Koprowski , Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the Defendant. Also on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Reginald T. Blades, Jr. , Assistant Director. Of counsel was Scott D. McBride , Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.
Timothy C. Brightbill and Usha Neelakantan , Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor SolarWorld Americas, Inc.
This consolidated action arises from the final affirmative determination made by the U.S. Department of Commerce (“Commerce”) in its antidumping investigation of certain crystalline silicon photovoltaic products (solar cells and panels) from Taiwan.2 Before the court are motions for judgment on the agency record, challenging Commerce's final determinations regarding the scope of these proceedings.3
The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),4 and 28 U.S.C. § 1581(c) (2012).
As explained below, Commerce's final scope definition is remanded for consistency with, and based on the same reasoning as, related proceedings concerning solar panels from the People's Republic of China (“China” or “PRC”).5 Essentially, Commerce's final scope determination, in both cases, treated solar panels differently depending on their country of assembly, and failed to consider or discuss either the proportion of production necessary to determine a solar panel's country of origin or the reasonableness of applying duties to the entire value of solar panels assembled in the PRC when only a small percentage of the cost of production actually occurs there.
After a statement of the background, arguments presented, and standard of review, the Plaintiffs' challenges to Commerce's final scope determination are discussed below.
Relevant background leading to this case is summarized in the court's prior opinion.6 Briefly, the Solar II PRC opinion addressed Commerce's scope determinations in related proceedings concerning solar panels from China that are assembled from cells manufactured outside of China,7 including specifically cells that were manufactured in Taiwan (the “Solar II PRC” proceedings).8 Commerce's final scope definition here (in the “Solar II Taiwan” proceedings) covers all solar cells manufactured in Taiwan that are assembled into panels anywhere in the world, except those covered by the Solar II PRC proceedings because they are assembled into panels in China.9 Both cases concern the rules of origin for solar panels manufactured from Taiwanese cells. For this reason, the issues here are inextricably entwined with those already addressed in the Solar II PRC opinion. Familiarity with the Solar II PRC opinion is therefore presumed.
Solar panels assembled from solar cells made in the PRC were also, and initially, the subject of separate proceedings (the “Solar I PRC” proceedings). The Solar I PRC proceedings resulted in antidumping and countervailing duty orders covering all solar cells manufactured in China, whether or not and regardless of where in the world such cells are assembled into solar panels prior to exportation to the United States.10
In the Solar I PRC proceedings, Commerce determined that “solar module assembly does not substantially transform solar cells such that it changes the country-of-origin.”11 Accordingly, Commerce concluded that “where solar cell production occurs in a different country from solar module assembly, the country-of-origin of the solar modules/panels is the country in which the solar cell was produced [and not the country of panel assembly].”12
Following the imposition of the Solar I PRC orders, however, domestic producer SolarWorld Americas Incorporated (“SolarWorld”) (now Defendant-Intervenor in this action) petitioned Commerce to initiate additional proceedings. SolarWorld alleged, inter alia , that after the Solar I PRC orders were imposed, exports of solar panels to the United States from China shifted from panels assembled from cells that were also made in China, to panels assembled from cells “completed or partially manufactured in Taiwan or other countries (i.e., cells manufactured in Taiwan from Taiwanese inputs, or cells manufactured in Taiwan or other countries from Chinese inputs, including wafers).”13
Commerce agreed that this “measurable shift in trade flows ... resulted in increased imports of non-subject modules produced in China.”14 In response, Commerce initiated (1) antidumping and countervailing duty investigations that ultimately resulted in orders covering all panels assembled in China from solar cells made outside of China, including Taiwanese cells15 (the Solar II PRC proceedings); and (2) an antidumping investigation that ultimately resulted in an order covering all solar cells produced in Taiwan, whether or not, and regardless of where, assembled into panels, except those assembled into panels in China16 (the Solar II Taiwan proceedings).
Plaintiffs here17 are U.S. importers and a foreign producer of solar panels containing solar cells manufactured in Taiwan.18 Plaintiffs now challenge Commerce's final determination regarding the scope of the Solar II Taiwan proceedings. Specifically, the Plaintiffs make the following arguments regarding Commerce's final scope determination in the Solar II Taiwan investigation.
(I) Commerce's late modification of the Solar II Taiwan scope substantially deprived interested parties—including Kyocera, a Mexican assembler of Taiwanese solar cells into panels exported to the United States—of due process.19
(II) Commerce unlawfully expanded the scope of Solar II Taiwan, after the close of factual submissions, to include merchandise that had been excluded from Commerce's unfair pricing analysis (as well as the International Trade Commission's injury analysis) throughout the investigations.20
(III) Commerce's final Solar II Taiwan scope determination was contrary to explicit statutory and regulatory requirements.21 Specifically, Plaintiffs argue that Commerce's final Solar II Taiwan scope determination was contrary to one or more of the following statutory/regulatory provisions: (A) 19 U.S.C. § 1673 ();22 (B) 19 U.S.C. §§ 1677b(a) () & 1677(16)(A)-(C) ();23 (C) 19 U.S.C. § 1677j(b) () & 19 C.F.R. § 351.225(h) ().24 SunEdison also argues that, (D) “by enacting and revising the antidumping law in 1984, 1988 and 1994, Congress bound Commerce to [continue to] use the substantial transformation test to determine the scope of antidumping duty orders ....”25
(IV) Commerce's final Solar II Taiwan scope determination unlawfully departed from prior practice without sufficient explanation.26
(V) Commerce's conclusion that, with the exception of Taiwanese cells assembled into solar panels in China, all panels assembled from Taiwanese cells are subject to the Solar II Taiwan proceedings as products of Taiwan, regardless of where they are assembled, is not supported by substantial evidence.27 Specifically, Commerce's determination that Taiwanese solar cells are not substantially transformed when assembled into panels in Mexico is unreasonable in light of the evidentiary record.28
(VI) Commerce unreasonably determined to apply antidumping duties on the full value of the panels into which Taiwanese solar cells are incorporated, rather than solely the value of the cells themselves.29
(VII) Commerce unreasonably excluded from its final dumping analysis third-country sales that the mandatory respondents reported as ultimately destined for the United States.30
Following a statement of the applicable standard of review, each group of arguments is addressed in turn below.
The court will sustain Commerce's antidumping determinations if they are supported by substantial evidence and are otherwise in accordance with law.31 Substantial evidence refers to “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,”32 considering any relevant evidence that fairly detracts from the reasonableness of the agency's determination.33 The substantial evidence standard of review can be roughly translated to mean “is the determination unreasonable?”34 The agency must “examine the relevant data and articulate a satisfactory explanation for its action,”35 including “a ‘rational connection between the facts found and the choice made.’ ”36
“[A]n agency determination that is arbitrary is ipso facto unreasonable,”37 and a determination is arbitrary when it fails to “consider an important aspect of the problem,”38 or “treat[s] similar situations in dissimilar ways.”39
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