Sunpreme Inc. v. United States, Solarworld Americas, Inc.

• Citation: 892 F.3d 1186
• Decision Date: 14 June 2018
• Docket Number: 2017-1338, 2017-1351
• Parties: SUNPREME INC., Plaintiff-Appellee v. UNITED STATES, Solarworld Americas, Inc., Defendants-Appellants
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

892 F.3d 1186

SUNPREME INC., Plaintiff-Appellee

v.UNITED STATES, Solarworld Americas, Inc., Defendants-Appellants

2017-1338, 2017-1351

United States Court of Appeals, Federal Circuit.

Decided: June 14, 2018

Nancy Noonan, Arent Fox, LLP, Washington, DC, argued for plaintiff-appellee. Also represented by John M. Gurley, Diana Dimitriuc Quaia.

Justin Reinhart Miller, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for defendant-appellant United States. Also represented by Chad A. Readler, Jeanne E. Davidson, Reginald T. Blades, Jr. ; Paula S. Smith, Office of the Assistant Chief Counsel, United States Bureau of Customs and Border Protection, United States Department of Homeland Security, New York, NY.

Maureen E. Thorson, Wiley Rein, LLP, Washington, DC, argued for defendant-appellant SolarWorld Americas, Inc. Also represented by Timothy C. Brightbill, Stephanie Manaker Bell, Tessa V. Capeloto, Laura El–Sabaawi, Derick Holt, Usha Neelakantan, Adam Milan Teslik.

Before Newman, Lourie, and Reyna, Circuit Judges.

Reyna, Circuit Judge.

SolarWorld America Inc. and the United States appeal from the judgment of the United States Court of International Trade in favor of Sunpreme Inc., concluding that the United States Customs and Border Protection exceeded its authority in reaching a determination that certain products imported by Sunpreme are covered by the scope of antidumping and countervailing duty orders on U.S. imports of solar cells from the People’s Republic of China. Because the Court of International Trade lacked jurisdiction to hear Sunpreme’s claims, we reverse.

BACKGROUND

I.

U.S. trade laws provide that "American industries may petition for relief from imports that are sold in the United States at less than fair value ..., or which benefit from subsidies provided by foreign governments." Allegheny Ludlum Corp. v. United States , 287 F.3d 1365, 1368 (Fed. Cir. 2002) (citing 19 U.S.C. § 1675b (2000) ). This relief is sought by filing an antidumping or countervailing duty petition before the U.S. Department of Commerce ("Commerce") and the U.S. International Trade Commission ("Trade Commission"). Following the filing of such a petition, Commerce determines whether sales of the investigated merchandise have been made at less than fair value ("dumping") or whether a countervailable subsidy has been provided. 19 U.S.C. §§ 1673, 1671(a)(1). The Trade Commission determines whether the imported merchandise materially injures or threatens to materially injure the relevant domestic industry. Id. §§ 1673d(b)(1), 1671d(b)(1). If Commerce’s and the Trade Commission’s determinations are affirmative, Commerce issues an appropriate antidumping or countervailing duty order. Id. §§ 1673e(a), 1671e(a).

Commerce is charged with writing antidumping and countervailing duty orders that "include[ ] a description of the subject merchandise, in such detail as the administering authority deems necessary." Id. §§ 1673e(a)(2), 1671e(a)(2). The orders also provide the antidumping and countervailing duty margins that have been established in the course of the investigations. Id. §§ 1673d(c)(1)(B), 1673e(a)(1), 1671d(c)(1)(B), 1671e(a)(1).

Once Commerce issues an antidumping or countervailing duty order, the United States Customs and Border Protection ("Customs") applies and enforces the duty orders through the assessment and collection of antidumping and countervailing duties on imports of the investigated merchandise. 19 C.F.R. §§ 159.41, 159.47, 351.211. When Customs determines a duty order covers entered merchandise, it suspends liquidation and notifies the importer of "determined or estimated" duties. Id. § 159.58(a), (b). "Liquidation" is defined as "the final computation or ascertainment of duties on entries for consumption or drawback entries." Id. § 159.1.

After the publication of the duty orders, if a question arises as to whether merchandise is encompassed by an order, an interested party may request a scope inquiry by Commerce to determine if a particular type of merchandise is within the class or kind of merchandise described in an existing duty order. See 19 C.F.R. § 351.225. Commerce has the express authority to conduct a scope inquiry and to clarify the scope of an unclear order pursuant to 19 C.F.R. § 351.225(a), and "should in the first instance decide whether an antidumping order covers particular products," because "the order’s meaning and scope are issues particularly within the expertise of that agency." Xerox Corp. v. United States , 289 F.3d 792, 795 (Fed. Cir. 2002). Commerce’s scope rulings may be challenged before the Court of International Trade ("CIT"). 19 U.S.C. § 1516a(a)(2)(B)(vi).

II.

On October 19, 2011, Defendant-Appellant SolarWorld America Inc. ("SolarWorld") filed antidumping and countervailing duty petitions on imports of solar cells from the People’s Republic of China ("PRC"). On December 7, 2012, following antidumping and countervailing duty investigations by Commerce and the Trade Commission, Commerce published antidumping and countervailing duty orders on certain crystalline silicon photovoltaic cells imported from the PRC. Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, from the People’s Republic of China: Countervailing Duty Order , 77 Fed. Reg. 73,017, 73,017 (Dec. 7, 2012) ; Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, from the People’s Republic of China: Amended Final Determination of Sales at Less Than Fair Value, and Antidumping Duty Order , 77 Fed. Reg. 73,018, 73,018 (Dec. 7, 2012) (collectively, "CSPV Orders"). Commerce established antidumping duty margins at a PRC-wide rate of 249.96%, and a countervailing duty at the "all others" rate of 15.24% ad valorem. Commerce instructed Customs to require cash deposits or the posting of a bond equal to the margins and subsidy rates in effect at the time of entry on products covered by the CSPV Orders. The scope language of the CSPV Orders is identical, and provides, in relevant part:

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).

CSPV Orders, 77 Fed. Reg. at 73,017, 73,018 –19. The CSPV Orders do not specifically define "thin film photovoltaic products."

Plaintiff Sunpreme Inc. ("Sunpreme") is a U.S. company that imports solar modules produced by Jiawei Solarchina (Shenzhen) Co., Ltd. that are composed, in part, of solar cells designed, developed, and tested at Sunpreme’s California facility. Sunpreme’s modules 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." Appellee’s Br. 8. Sunpreme’s modules are bifacial, with amorphous silicon being deposited on both the top and bottom sides of a substrate, and are certified by TUV, a third-party product certification body, to be in compliance with the requirements of IEC 61646, i.e. a thin film terrestrial photovoltaic module. J.A. 1015; 1683–84. Prior to April 2015, Sunpreme’s solar modules were imported into the United States as entry type "01," the designation for ordinary consumption entries not subject to any antidumping or countervailing duties.

The United States maintains that Customs began to investigate whether Sunpreme’s imports may be subject to the CSPV orders in early 2015. See Sunpreme Inc. v. United States , 145 F.Supp.3d 1271, 1279 (Ct. Int’l Trade 2016). In April 2015, Customs requested that Sunpreme file its entries under type "03," the designation for entries subject to antidumping or countervailing duties. Customs suspended liquidation on the imports and required antidumping and countervailing duty cash deposits in conformance with the duty margins provided in the CSPV Orders. Id. at 1281 n.6.

In response, Sunpreme disputed Customs’ decision and provided information supporting its position that its solar module products were outside the scope of the CSPV Orders. Id. at 1280–81. Sunpreme provided Customs with lab results from an independent third party identifying amorphous silicon thin film layers in Sunpreme’s solar modules, and invited Customs to its California facility to observe its production process. Sunpreme , 145 F.Supp.3d at 1280–81. Customs also performed its own laboratory testing on Sunpreme’s products. Id.

Around April 20, 2015, Sunpreme began making antidumping and countervailing cash deposits on its solar modules imports. On November 16, 2015, Sunpreme filed a request with Commerce for a scope ruling, challenging Customs’ decision that its imports were covered by the CSPV Orders. On December 30, 2015, Commerce initiated a formal scope inquiry.

On December 8, 2015, twenty-two days before Commerce initiated the formal scope inquiry, Sunpreme filed a complaint with the CIT, challenging Customs’ collection of cash deposits and suspension of liquidation and seeking a preliminary injunction to prevent Customs from collecting additional cash deposits. J.A. 102. In its complaint, Sunpreme contended that Customs "wrongly require[ed] [Sunpreme]...