Sunpreme Inc. v. United States

• Decision Date: 11 October 2016
• Docket Number: Slip Op. 16–97,Court No. 15–00315
• Parties: Sunpreme Inc., Plaintiff, v. United States, Defendant, and SolarWorld Americas Inc., Defendant–Intervenor.
• Court: U.S. Court of International Trade

190 F.Supp.3d 1185

Sunpreme Inc., Plaintiff,

v. United States, Defendant,andSolarWorld Americas Inc., Defendant–Intervenor.

Slip Op. 16–97

Court No. 15–00315

United States Court of International Trade.

October 11, 2016

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

Tara Kathleen Hogan , Trial Counsel, Commercial Litigation Branch—Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Justin Reinhart Miller , Senior Trial Counsel, International Trade Field Office, Civil Division, U.S. Department of Justice, of New York, NY, Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Reginald T. Blades, Assistant Director. Of counsel on the brief was Paula Smith , Senior Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection of New York, NY.

Timothy C. Brightbill and Maureen Elizabeth Thorson , Wiley Rein, LLP, of Washington DC, argued for defendant-intervenor. With them on the brief was Usha Neelakantan .

OPINION

Kelly, Judge:

This action is before the court on Plaintiff's USCIT Rule 56.1 motion for judgment on the agency record challenging United States Customs and Border Protection's ("Customs" or "CBP") determination to require that Plaintiff file its entries as type "03" entries subject to antidumping and countervailing duty ("AD/CVD") orders on crystalline silicon photovoltaic cells, whether or not assembled into modules from the People's Republic of China ("Orders").¹ See Pl.'s Rule 56.1 Mot. J. Agency R., May 11, 2016, ECF No. 102 ("Pl.'s 56.1 Mot."); CBP Notices of Action at 000001–000010, CD 1, CBP AR 000001–000010 (Apr. 20, 2015–May 20, 2015) ("CBP Notices of Action");² 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) ("AD Order") and 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"). As a result of CBP's determination, it began collecting cash deposits and suspending liquidation on Plaintiff's entries because it considered Plaintiff's merchandise to fall within the scope of Orders. See CBP Notices of Action; CVDOrder, 77 Fed. Reg. 73,017 ; ADOrder, 77 Fed. Reg. 73,018.

Plaintiff began depositing AD/CVD duties in order to enter its merchandise from approximately April 20, 2015 until December 16, 2015, See Entry Documents at 000957–001250, CD 38, CBP AR 000957–001250 (June 3, 2015–Nov. 5, 2015) ("Entry Documents"), when the court entered a temporary restraining order ("TRO") restraining CBP from requiring Plaintiff to pay cash deposits on its entries until December 28, 2015.³ See Am. Mem. and TRO, Dec. 16, 2015, ECF No. 36; Sunpreme Inc. v. United States, 40 CIT ––––, ––––, 145 F.Supp.3d 1271, 1299 (2016).

Plaintiff commenced this action pursuant to § 2631 of the Customs Court Act of 1980, as amended, 28 U.S.C. § 2631(i) (2012). Compl., Dec. 3, 2015, ECF No. 5. SolarWorld Americas, Inc. ("SolarWorld") moved to intervene, see Unopposed Mot. Intervene, Dec. 9, 2015, ECF No. 15, and the court granted that motion pursuant to USCIT Rule 24(b) on December 10, 2015. See Mem. and Order, Dec. 10, 2015, ECF No. 21. Plaintiff filed a motion for judgment on the agency record pursuant to USCIT Rule 56.1. Pl.'s 56.1 Mot. Defendant and Defendant–Intervenors filed responses to the Plaintiff's motion. See Def.'s Mem. Resp. Pl.'s Mot. J. Agency R. Confidential Version, Aug. 19, 2016, ECF No. 112 ("Def.'s Resp. Br."); Resp. Br. Def.–Intervenor SolarWorld Americas, Inc. Confidential Version, Aug. 19, 2016, ECF No. 113; Resp. Br. Def.–Intervenor SolarWorld Americas, Inc. Revised Confidential Version, Aug. 26, 2016, ECF No. 117 ("SolarWorld Resp. Br."). Briefing concluded on September 16, 2016, when Plaintiff filed its reply brief. See Reply Br. of Pl. Sunpreme Inc. Confidential Version, Sept. 16, 2016, ECF No. 123 ("Sunpreme Reply Br."). The court held oral argument on October 7, 2016. See Confidential Oral Arg., Oct. 7, 2016, ECF No. 133.

BACKGROUND

Plaintiff is a U.S. company that imports solar modules produced by Jiawei Solarchina (Shenzhen) Co., Ltd. that are composed of solar cells Plaintiff designs, develops, and tests at its facility in California. Compl. ¶ 1; Def.'s Answer ¶ 1, Feb. 12, 2016; ECF No. 95 ("Answer"); ACE Inquiry # [[ ]] at 000244, CD 14, CBP AR 000244 (May 13, 2015) ("ACE Inquiry # [[ ]]"); see also Sunpreme Letter to CBP re: Sunpreme at 000174–000175, 000181–000201, CD 12, CBP AR 000173–000236 (May 6, 2015). Neither party disputes that the frameless double tempered-glass constructed solar modules imported by Plaintiff are "bifacial solar modules made using its Hybrid Cell Technology." Compl. ¶¶ 10–11; Answer ¶¶ 10–11.

On December 7, 2012, the U.S. Department of Commerce ("Commerce") published the Orders. See CVD Order, 77 Fed. Reg. at 73,017 ; ADOrder, 77 Fed. Reg. at 73,018. The scope language of the AD/CVD orders is identical. It provides:

The merchandise covered by this order is crystalline silicon photovoltaic cells, and modules, laminates, and panels, consisting of crystalline silicon photovoltaic 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 crystalline silicon photovoltaic 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 ; ADOrder, 77 Fed. Reg. at 73,018. On December 11, 2012 and December 21, 2012, Commerce issued liquidation instructions, which incorporated the scope language common to the Orders, and instructed CBP to require cash deposits equal to the rates in effect at the time of entry. See Message No. 2346303 at 000011–000019, PD 2, CBP AR 000011–000019 (Dec. 11, 2012); Message No. 2356306 at 000020–000033, PD 3, CBP AR 000020–000033 (Dec. 21, 2012) (collectively "Liquidation Instructions").

Neither party contests that, prior to April 20, 2015, Plaintiff was entering its merchandise as entry type "01." See CBP Notices of Action at 000001–000010; Request for Information to Sunpreme Inc. at 000036–000037, CD 4, CBP AR 000034–000044 (Jan.8, 2015) ("Request for Information"); see also Pl.'s Mem. Supp. Mot. J. Agency R. Confidential Version 1, 3, May 10, 2016, ECF No. 100 ("Sunpreme Br."); Def.'s Resp. Br. 4. Before April 20, 2015, CBP was also not requiring Plaintiff to pay cash deposits or to enter its merchandise as type "03.". See Sunpreme Br. 1, 3; Def.'s Resp. Br. 4.

In early 2015, CBP began to consider whether Plaintiff's entries matched the description of merchandise covered by the Orders and the Liquidation Instructions by requesting supporting documentation.⁴ See Request for Information at 000034. Plaintiff cooperated with CBP's request.⁵ Id. at 000035. In March 2015, CBP examined a sample of Plaintiff's modules from one of its shipments by sending that sample to a CBP laboratory for analysis.⁶ See Laboratory Report No. SF20150252 at 000045, CD 5, CBP AR 000045–000073 (Mar. 26, 2015) ("Laboratory Report No. SF20150252"). CBP's laboratory confirmed the cells contain crystalline silicon. Id. On April 17, 2015, the same laboratory issued a supplemental report further confirming the presence of crystalline silicon in the sample.⁷ Supplemental Laboratory Report No. SF20150252S at 000076, CD 8, CBP AR 000076–000093 (Apr. 17, 2015) ("Supplemental Laboratory Report No. SF20150252S").⁸

On April 7, 2015, CBP [[ ]]. See CBP Letter to Sunpreme, CD 6, CBP AR 000074 (Apr. 7, 2015); CBP Letter to Sunpreme, CD 7, CBP AR 000075 (Apr. 8, 2015). Beginning on April 20, 2015, CBP began sending Plaintiff Notices of Action requiring that it file those entries as type "03" entries subject to AD/CVD duties and pay cash deposits in order for its shipments to be released from the port warehouse.⁹ See CBP Notices of Action at 000001–000010. As a result, the liquidation of Plaintiff's entries became suspended by operation of law.¹⁰ In May 2015, Plaintiff submitted several letters to CBP's Electronics Center for Excellence and Expertise ("ECEE") in Long Beach, California, arguing that its products were not subject to the Orders.¹¹ See Letter from Sunpreme re: Sunpreme, CD 12, CBP AR 000173–000236 (May 6, 2015); Letter from Sunpreme re: Sunpreme Retention Notices, CD 13, CBP AR 000237–000243 (May 12, 2015); Letter from Sunpreme re: Sunpreme Modules—Exclusion from the AD/CVD Orders on Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From China , CD 15, CBP AR 000245–000434 (May 14, 2015); Letter from Sunpreme re: Sunpreme, CD 16, CBP 000435–000457 (May 19, 2015).

On June 3, 2015, CBP contacted Commerce seeking guidance on whether Plaintiff's products are included within the scope of the Orders. See ACE Inquiry # [[ ]], CD 18, CBP AR 000479 (June 3, 2015) ("ACE Inquiry # [[ ]]"). Commerce responded that "a determination as to whether this product is covered by antidumping duty order A–570–979 and countervailing duty order C–570–980 would need to be made by the Department of Commerce in a...