Sunpreme Inc. v. United States

• Citation: 256 F.Supp.3d 1265
• Decision Date: 29 August 2017
• Docket Number: Slip Op. 17-116 Court No. 16-00171.
• Parties: SUNPREME INC., Plaintiff, v. UNITED STATES, Defendant, and SolarWorld Americas, Inc., Defendant–Intervenor.
• Court: U.S. Court of International Trade

256 F.Supp.3d 1265

SUNPREME INC., Plaintiff,

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

Slip Op. 17-116 Court No. 16-00171.

United States Court of International Trade.

August 29, 2017

John Marshall Gurley and Diana Dimitriuc–Quaia, Arent Fox LLP, of Washington, DC, argued for plaintiff. With them on the brief were Nancy Aileen Noonan and Aman Kakar.

Justin Reinhart Miller, Senior Trial Counsel, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for defendant. With him on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Mercedes C. Morno, 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, argued for defendant-intervenor.

OPINION AND ORDER

Kelly, Judge:

This action is before the court on Plaintiff's USCIT Rule 56.2 motion for judgment on the agency record challenging the United States Department of Commerce's ("Commerce") determination that Plaintiff's solar modules are subject to antidumping and countervailing duty orders covering certain crystalline silicon photovoltaic ("CSPV") cells, whether or not assembled into modules, from the People's Republic of China (collectively "Orders"). See Pl.'s Mot. J. Agency R., Dec. 5, 2016, ECF No. 75–1 ("Pl.'s Mot."); see also Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules from the People's Republic of China: Final Ruling in the Scope Inquiry, Sept. 14, 2016, ECF No. 28–4 ("Final Scope Ruling"); Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, From the People's Republic of China, 77 Fed. Reg. 73,017 (Dep't Commerce Dec. 7, 2012) (countervailing duty order) ("CVD Order"); Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, From the People's Republic of China, 77 Fed. Reg. 73,018 (Dep't Commerce Dec. 7, 2012) (amended final determination of sales at less than fair value and antidumping duty order) ("ADD Order"). Additionally, Plaintiff challenges as contrary to law Commerce's liquidation instructions to U.S. Customs and Border Protection ("Customs" or "CBP"), which ordered CBP to collect cash deposits and to suspend liquidation on entries entered prior to the initiation of the scope inquiry that culminated in Commerce's issuance of the Final Scope Ruling.¹ Pl.'s Mot.; see also Message Number 6214307, AD PD 74, bar code 3505143–01 (Sept. 1, 2016), Message Number 6214307, CVD PD 80, bar code 3505146–01 (Sept. 1, 2016) (collectively "Liquidation Instructions"); Message Number 6246309, AD PD 75, bar code 3505144–01 (Sept. 2, 2016), Message Number 6246309, CVD PD 81, bar code 3505147–01 (Sept. 2, 2016) (collectively "Corrected Liquidation Instructions").² For the reasons that follow, the court denies Plaintiff's motion for judgment on the agency record and sustains Commerce's final scope determination that Plaintiff's imported solar modules are subject to the Orders. However, the court grants Plaintiff's motion for judgment on the agency record on its claim challenging as contrary to law Commerce's liquidation instructions directing CBP to continue suspension of liquidation and to collect cash deposits with respect to entries prior to the initiation of the scope inquiry. Accordingly, the court directs Commerce to issue new liquidation instructions consistent with this decision.

BACKGROUND

Plaintiff, Sunpreme Inc. ("Sunpreme"), is a U.S.-based importer of solar modules manufactured by Jiawei Solarchina (Shenzen) Co., Ltd. ("Jiawei Shenzen") in the People's Republic of China. See Pl.'s Mem. Supp. Mot. J. Agency R. 3, Dec. 5, 2016, ECF No. 75 ("Sunpreme Br.") (incorporating by reference Pl.'s Mot. Prelim. Inj. and Mem. P & A. Supp. Thereof, Sept. 8, 2016, ECF No. 21 ("Mot. PI")); Compl. ¶ 6, 20, Aug. 26, 2016, ECF No. 2 ("Compl."). Plaintiff imports solar modules, which it describes as containing bi-facial solar cells with "an innovative thin film technology, the Hybrid Cell Technology, developed and owned by Sunpreme." Compl. ¶ 22. Plaintiff designs, develops, and tests the imported solar cells that form the imported solar modules at its facility in California. Id. Plaintiff avers that all of its solar modules that are the subject of Commerce's Final Scope Ruling

consist of solar cells made with amorphous silicon thin films and are certified by an [industry certification body] as thin film modules under the international standard IEC 61646: 2008 which covers "Thin film terrestrial photovoltaic (PV) modules. Design qualification and type approval."

Compl. ¶ 21. Plaintiff alleges that its cells are "made of several layers of amorphous silicon less than one micron in thickness, deposited on both sides of a substrate consisting of a crystalline silicon wafer." Compl. ¶ 23.

Plaintiff alleges its cells have a p/i/n junction consisting of "thin film p-i-(wafer substrate)-i-n junctions, formed by four amorphous silicon thin film depositions." Compl. ¶ 24; see also Sunpreme Br. 28. Plaintiff asserts that "the junction is made by the layers of p/i and i/n amorphous silicon on both the front and the back of the substrate, such that the junction is formed on the wafer and inside the thin film layers." Compl. ¶ 25; Sunpreme Br. 28. Further, Plaintiff claims it uses a

blank crystalline silicon wafer as a substrate for the thin films in order to improve the mechanical reliability of the modules. That wafer is not processed by doping, does not contain a p/n junction, nor is it otherwise processed to become a[ ] CSPV cell. Without the amorphous silicon layers, the substrate is a blank silicon wafer, not a CSPV cell.

Compl. ¶ 26; see also Sunpreme Br. 28.

On December 7, 2012, Commerce published the Orders. See CVD Order, 77 Fed. Reg. at 73,017 ; ADD Order, 77 Fed. Reg. at 73,018. The scope language of the Orders is identical, and provides:

The merchandise covered by this order is [CSPV] cells, and modules, laminates and panels, consisting of [CSPV] cells, whether or not partially or fully assembled into other products, including but not limited to, modules, laminates, panels and building integrated materials.

This order covers [CSPV] cells of thickness equal to or greater than 20 micrometers, having a p/n junction formed by any means, whether or not the cell has undergone other processing, including, but not limited to, cleaning, etching, coating, and/or addition of materials (including, but not limited to, metallization and conductor patterns) to collect and forward the electricity that is generated by the cell.

...

Excluded from the scope of this order are thin film photovoltaic products produced from amorphous silicon (a-Si), cadmium telluride (CdTe), or copper

indium gallium selenide (CIGS).

CVD Order, 77 Fed. Reg. at 73,017 ; ADD Order, 77 Fed. Reg. at 73,018.

On December 11, 2012, Commerce notified CBP of the CVD Order and instructed CBP, effective December 6, 2012, to require cash deposits equal to the subsidy rates in effect at the time of entry. See Pl.'s Mot. Prelim. Inj. and Mem. P. & A. Supp. Thereof Exs. Ex. 7, Sept. 8, 2016, ECF No. 21–1. On December 21, 2012, Commerce notified CBP of the ADD Order and instructed CBP, effective December 7, 2012, to require a cash deposit or the posting of a bond equal to the dumping margins in effect at the time of entry. See Pl.'s Mot. Prelim. Inj. and Mem. P. & A. Supp. Thereof Exs. Ex. 6, Sept. 8, 2016, ECF No. 21–1. The instructions issued in connection with the ADD Order provided an exporter-specific antidumping duty rate of 13.94 percent for Jiawei Shenzhen, the manufacturer of the solar panels imported by Sunpreme. See id.

Prior to approximately April of 2015, Plaintiff had been entering its modules as ordinary consumption entries without depositing antidumping or countervailing duties. See Def.'s Corrected Mem. Resp. Pl.'s Mot. Prelim. Inj. 4, Sept. 27, 2016, ECF No. 42 ("Def.'s Resp. PI"); see generally Sunpreme Inc. v. United States, 40 CIT ––––, ––––, 145 F.Supp.3d 1271, 1279 (2016) ( " Sunpreme I"). CBP instructed Plaintiff to file its entries as type "03," the type of entries subject to antidumping and countervailing duties. See Def.'s Resp. PI 4; see generally Sunpreme I, 40 CIT at ––––, 145 F.Supp.3d at 1279. Plaintiff complied with CBP's instructions. See Mot. PI 12; see generally Sunpreme I, 40 CIT at ––––, 145 F.Supp.3d at 1281. As a result of Plaintiff's entry of its merchandise as type "03" CBP began collecting cash deposits, and liquidation of these entries was suspended by operation of law.³

On November 16, 2015, Plaintiff filed an application for a scope ruling requesting that Commerce find Plaintiff's solar modules outside the scope of the Orders. See Request for a Scope Ruling on Solar Modules With Bi–Facial Thin Film Cells, AD PD 1–6, bar codes 3417556–01–06 (Nov. 16, 2015); Request for a Scope Ruling on Solar Modules With Bi–Facial Thin Film Cells, CVD PD 1–6, bar codes 3417582–01–06 (Nov. 16, 2015) (collectively "Sunpreme Scope Ruling Request"). Plaintiff requested Commerce issue a scope ruling on an expedited basis due to financial difficulties the company was experiencing. Sunpreme Scope Ruling Request at 2; see also Compl. ¶28. On December 30, 2015, Commerce initiated a formal scope inquiry. See Scope Inquiry Initiation on Photovoltaic Modules Imported by Sunpreme, AD PD 9, bar code 3428728–01 (Dec. 30, 2015); Scope Inquiry Initiation on Photovoltaic Modules Imported by Sunpreme, CVD PD 15, bar code 3428730–01 (Dec. 30, 2015).

On June 17, 2016, Commerce placed a final ruling in a scope inquiry involving the applicability of the Orders to Triex photovoltaic cells manufactured by Silevo, Inc. on the record of this scope proceeding. See Memo re: Crystalline Silicon...