Agilent Techs. v. United States , 335 F. Supp. 3d 1347 ( 2018 )

Slip Op. 18- 131
UNITED STATES COURT OF INTERNATIONAL TRADE
AGILENT TECHNOLOGIES,
Plaintiff,
v.
UNITED STATES,
Before: Jennifer Choe-Groves, Judge
Defendant,
Court No. 16-00183
and
ALUMINUM EXTRUSIONS FAIR
TRADE COMMITTEE,
Defendant-Intervenor.
OPINION AND ORDER
[Remanding the U.S. Department of Commerce’s redetermination on remand scope ruling on
Agilent Technologies’ mass filter radiator.]
Dated: October 1, 2018
George R. Tuttle, III, Law Offices of George R. Tuttle, A.P.C., of Larkspur, CA, and Melanie A
Frank, The Global Trade Group, PLLC, of Arlington, VA, for Plaintiff Agilent Technologies.
Aimee Lee, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of New York, N.Y., for Defendant United States. With her 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 Jessica R. DiPietro,
Attorney, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of
Commerce, of Washington, D.C.
Alan H. Price, Derick G. Holt, and Robert E. DeFrancesco, III, Wiley Rein, LLP, of Washington,
D.C., for Defendant-Intervenor Aluminum Extrusions Fair Trade Committee. Laura El-Sabaawi
also appeared.
Court No. 16-00183 Page 2
Choe-Groves, Judge: Plaintiff Agilent Technologies (“Agilent”), a manufacturer of
electronic and bio-analytical measurement instruments, challenges a scope ruling on Agilent’s
mass filter radiator issued by the U.S. Department of Commerce (“Department” or
“Commerce”). Before the court are the results of redetermination on remand filed by Commerce
pursuant to the court’s prior opinion, Agilent Techs. v. United States, 41 CIT __, 256 F. Supp. 3d
1338 (2017) (“Agilent I”). See Results Redetermination Pursuant Court Remand, Dec. 15, 2017,
ECF No. 40-1 (“Remand Results”).
In its initial scope ruling, Commerce determined that the mass filter radiator is covered
by the scope of the antidumping and countervailing duty orders (collectively, “Orders”) on
aluminum extrusions from the People’s Republic of China (“China”). See Final Scope Ruling on
Agilent Technologies, Inc.’s Mass Filter Radiator, A-570-967 and C-570-968, (Aug. 10, 2016),
available at http://enforcement.trade.gov/download/prc-ae/scope/97-mass-filter-radiator-
10aug16.pdf (last visited Sept. 26, 2018) (“Final Scope Ruling”); see also Aluminum Extrusions
from the People’s Republic of China, 76 Fed. Reg. 30,650 (Dep’t Commerce May 26, 2011)
(antidumping duty order) (“Antidumping Duty Order”); Aluminum Extrusions from the People’s
Republic of China, 76 Fed. Reg. 30,653 (Dep’t Commerce May 26, 2011) (countervailing duty
order) (“Countervailing Duty Order”). Plaintiff filed a Rule 56.2 motion for judgment on the
agency record, and the court remanded Commerce’s Final Scope Ruling with instructions for
Commerce to fully address the evidence on the record relating to the applicability of the finished
heat sink exclusion. See Agilent I, 41 CIT at __, 256 F. Supp. 3d at 1345. Commerce issued its
Results of Redetermination Pursuant to Court Remand on December 15, 2017. See Remand
Results. Agilent contests the Remand Results. See Pl.’s Comments Def.’s Redetermination
Court No. 16-00183 Page 3
Remand, Jan. 16, 2018, ECF No. 42 (“Pl.’s Comments”). Defendant United States
(“Government”) and Defendant-Intervenor Aluminum Extrusions Fair Trade Committee support
Commerce’s Remand Results. See Def.’s Resp. Comments Department Commerce’s Remand
Results, Jan. 29, 2018, ECF No. 43 (“Def.’s Comments”); Def.-Intervenor Aluminum Extrusions
Fair Trade Committee’s Reply Comments Final Results Redetermination Pursuant Ct. Remand,
Jan. 30, 2018, ECF No. 46 (“Def.-Intervenor’s Comments”).
ISSUE PRESENTED
The court considers whether Commerce’s scope redetermination on remand regarding
Plaintiff’s mass filter radiator is supported by substantial evidence.
For the reasons set forth below, the court concludes that Commerce’s redetermination
results are not supported by substantial evidence and remands this matter for further proceedings
consistent with this opinion.
BACKGROUND
The court presumes familiarity with the facts of this case. See Agilent I, 41 CIT at __,
256 F. Supp. 3d at 1340–41. Commerce issued two Orders on aluminum extrusions from China
on May 26, 2011. See Antidumping Duty Order, 76 Fed. Reg. at 30,650; Countervailing Duty
Order, 76 Fed. Reg. at 30,653. Both Orders have identical scope language, which provide the
following description of the subject merchandise:
The merchandise covered by this order is aluminum extrusions which are shapes
and forms, produced by an extrusion process, made from aluminum alloys having
metallic elements corresponding to the alloy series designations published by The
Aluminum Association commencing with the numbers 1, 3, and 6 (or proprietary
equivalents or other certifying body equivalents).
Court No. 16-00183 Page 4
Antidumping Duty Order, 76 Fed. Reg. at 30,650; Countervailing Duty Order, 76 Fed. Reg. at
30,653.
The Orders explicitly exclude “finished heat sinks.” See Antidumping Duty Order, 76
Fed. Reg. at 30,651; Countervailing Duty Order, 76 Fed. Reg. at 30,654. “Finished heat sinks”
are defined as follows:
Finished heat sinks are fabricated heat sinks made from aluminum
extrusions the design and production of which are organized around
meeting certain specified thermal performance requirements and which
have been fully, albeit not necessarily individually, tested to comply with
such requirements.
Antidumping Duty Order, 76 Fed. Reg. at 30,651; Countervailing Duty Order, 76 Fed. Reg. at
30,654.
Plaintiff manufactures a mass filter radiator, which houses the central components of a
mass spectrometer and plays an important role in transferring heat from critical components. See
Scope Inquiry on Certain Finished Aluminum Components from the People’s Republic of China
(Case Nos. A-570-967 and C-570-968): Mass Filter Radiator at 5, PD 1, bar code 3245192-01
(Dec. 3, 2014) (“Agilent’s Scope Ruling Request”). Agilent asserts that its mass filter radiator
should be excluded from the scope of the Orders because it is a finished heat sink designed,
produced, and tested to meet specified thermal resistance properties to remove damaging heat
from electronic equipment. See id. at 5–12.
The court remanded the Final Scope Ruling after determining that Commerce failed to
consider certain record evidence in support of Agilent’s position that the mass filter radiator is
covered by the finished heat sink exclusion. Agilent I, 41 CIT at __, 256 F. Supp. 3d at 1345.
The court instructed Commerce to consider Agilent’s R&D Declaration, scope ruling request,
Court No. 16-00183 Page 5
questionnaire response, presentation slides, responses to Petitioner’s comments, and two
supplemental questionnaire responses. Id.
On December 15, 2017, Commerce issued its Remand Results, finding that Agilent’s
mass filter radiator is covered by the scope of the Orders and does not qualify for the finished
heat sink exclusion. See Remand Results 2. Agilent submitted comments to the court arguing
that the Remand Results were not supported by substantial evidence on the record and were
contrary to the law. See Pl.’s Comments 6. Defendant argues that Commerce was reasonable in
determining that the mass filter radiator does not meet the finished heat sink exclusion. See
Def.’s Comments 28. The court held oral argument on June 5, 2018. See Oral Argument, Jun. 5,
2018, ECF No. 53.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction to review Commerce’s scope determination pursuant to 28
U.S.C. § 1581(c) (2012). Commerce’s final scope determination will be upheld unless it is
unsupported by substantial evidence on the record, or otherwise not in accordance with the law.
19 U.S.C. § 1516a(b)(1)(B)(i).
ANALYSIS
In determining whether a product is within scope of the Orders, “the scope of a final
order may be clarified, [but] it can not be changed in a way contrary to its terms.” Duferco Steel,
Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002) (quoting Smith Corona Corp. v.
United States, 915 F.2d 683, 686 (Fed. Cir. 1990)). Because the descriptions of subject
merchandise contained in Commerce’s determinations must be written in general terms, it is
often difficult to determine whether a particular product is included within the scope of an
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antidumping or countervailing duty order. See 19 C.F.R. § 351.225(a) (2016); Duferco Steel,
296 F.3d at 1096.
Antidumping and countervailing duty orders “may be interpreted as including subject
merchandise only if they contain language that specifically includes the subject merchandise or
may be reasonably interpreted to include it.” Duferco Steel, 296 F.3d at 1089. Generally,
Commerce “enjoys substantial freedom to interpret and clarify its antidumping orders.” Id.
(quoting Novosteel SA v. United States, 284 F.3d 1261, 1269 (Fed. Cir 2002)). Commerce is
given “substantial deference” to interpret its own antidumping duty and countervailing duty
orders. King Supply Co. v. United States, 674 F.3d 1343, 1348 (Fed. Cir. 2012). If the
Department fails “to consider or discuss record evidence which, on its face, provides significant
support for an alternative conclusion[,] [the Department’s determination is] unsupported by
substantial evidence.” Ceramark Tech., Inc. v. United States, 38 CIT __, __, 11 F. Supp. 3d
1317, 1323 (2014) (quoting Allegheny Ludlum Corp. v. United States, 24 C.I.T. 452, 479, 112 F.
Supp. 2d 1141, 1165 (2000)). Although Commerce’s “explanations do not have to be perfect,
the path of Commerce’s decision must be reasonably discernable to a reviewing court.” NMB
Singapore Ltd. v. United States, 557 F.3d 1316, 1319–20 (Fed. Cir. 2009) (citing Motor Vehicle
Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
Agilent argues that Commerce’s Remand Results are unsupported by substantial evidence
and are contrary to the law. See Pl.’s Comments 6. Plaintiff argues that the mass filter radiator
meets all of the criteria identified by Commerce to qualify as a finished heat sink and should be
excluded from the scope of the Orders. See id. at 25–28. The Government counters that
Commerce’s determination is supported by substantial evidence because the record demonstrates
Court No. 16-00183 Page 7
that the mass filter radiator does not qualify for the finished heat sink exclusion. See Def.’s
Comments 11–24. Commerce focuses on its assertion that Agilent’s mass filter radiator does not
meet the definition of a finished heat sink because it was not designed and produced to meet
specified thermal performance requirements and was not tested for compliance with specified
design requirements. See id.
When interpreting the antidumping duty order’s scope, Commerce first examines the
scope of the Order to determine if that language “is ambiguous and open to interpretation.”
Kirovo-Chepetsky Khimichesky Kombinat, JSC v. United States, 39 CIT __, __, 58 F. Supp. 3d
1397, 1402 (2015) (citing Mid Continent Nail Corp. v. United States, 725 F.3d 1295, 1302 (Fed.
Cir. 2013)); see also Duferco Steel, 296 F.3d at 1097 (“[A] predicate for the interpretative
process is language in the order that is subject to interpretation.”). If Commerce finds that scope
language is subject to interpretation, Commerce may turn to the (k)(1) factors, i.e., “[t]he
descriptions of the merchandise contained in the petition, the initial investigation, and the
determinations of [Commerce] (including prior scope determinations) and the [U.S. International
Trade] Commission” for clarification. 19 C.F.R. § 351.225(k)(1); see also Tak Fat Trading Co.
v. United States, 396 F.3d 1378, 1382 (Fed. Cir. 2005). While these (k)(1) sources may provide
valuable guidance as to the interpretation of the final order, “they cannot substitute for language
in the order itself.” Duferco Steel, 296 F.3d at 1097.
Pursuant to its regulation, if Commerce is able to interpret the scope of the Order after
examination of the (k)(1) factors—that is, if Commerce finds that the (k)(1) factors are
dispositive—then its inquiry ends, and Commerce will issue a final scope ruling regarding
whether the subject merchandise is covered by the Order. See 19 C.F.R. § 351.225(d). For a
Court No. 16-00183 Page 8
(k)(1) determination “to be dispositive, the permissible sources examined by Commerce ‘must be
controlling of the scope inquiry in the sense that they definitely answer the scope question.’”
OTR Wheel Eng’g, Inc. v. United States, 36 CIT __, __, 853 F. Supp. 2d 1281, 1287–88 (2012)
(quoting Sango Int’l L.P. v. United States, 484 F.3d 1371, 1379 (Fed. Cir. 2007)) (emphasis
added). Should Commerce find that the (k)(1) factors are not dispositive, however, it must
further consider the (1) “physical characteristics of the product”; (2) “expectations of the
ultimate purchasers”; (3) “ultimate use of the product”; (4) “channels of trade in which the
product is sold”; and (5) “manner in which the product is advertised and displayed” (i.e., the
(k)(2) factors). 19 C.F.R. § 351.225(k)(2). Where a scope determination is challenged, the
Court’s purpose is to determine whether the scope of the Order “contain[s] language that
specifically includes the subject merchandise or may be reasonably interpreted to include it.”
Duferco Steel, 296 F.3d at 1089.
Commerce’s Final Scope Ruling found that the mass filter radiator was covered by the
scope of the Orders. Remand Results 9. Commerce determined that the mass filter radiator
“consisted entirely of a single piece of extruded aluminum which is further processed, including
being [computerized numerical control] machined and plated with a proprietary material, in a
manner consistent with the scope of the Orders.” Id. Commerce continued to find that the mass
filter radiator does not meet the requirements of the heat sink exclusion. Id. at 49–50.
To determine whether Plaintiff’s product is included within the scope of the Order,
Commerce first looks to the plain language of the Order. The scope of the Orders includes
“aluminum extrusions which are shapes and forms, produced by an extrusion process, made from
aluminum alloys having metallic elements corresponding to the alloy series designations
Court No. 16-00183 Page 9
published by The Aluminum Association commencing with the numbers 1, 3, and 6 (or
proprietary equivalents or other certifying body equivalents).” Antidumping Duty Order, 76
Fed. Reg. at 30,651; Countervailing Duty Order, 76 Fed. Reg. at 30,654. Agilent’s mass filter
radiator is created by machining and plating a single piece extruded aluminum tube. See
Agilent’s Scope Ruling Request at 3. Based on Agilent’s Scope Ruling Request, Commerce
determined that Agilent’s mass filter radiator is covered by the plain language of the Orders. See
Final Scope Ruling at 17. Commerce concluded that unless otherwise excluded as “finished
merchandise” or a “finished heat sink,” the mass filter radiator is covered by the scope of the
Orders. See id.
Commerce continued its analysis by examining the exclusion language for “finished heat
sink” to determine whether the mass filter radiator was expressly excluded from the scope of the
Orders. See Remand Results 11. In the Remand Results, Commerce identified five
requirements that must be present for a product to qualify for the “finished heat sink” exclusion:
1) the product must be a “fabricated heat sink{} made from aluminum extrusions;”
2) specified thermal performance requirements must exist; 3) the product’s design
must have been organized around meeting those specified thermal performance
requirements; 4) the product’s production must be organized around meeting the
specified thermal performance requirements; and 5) the product must have been
fully, albeit not necessarily individually, tested to comply with the specified thermal
performance requirements. We have determined that in accordance with the
language of the scope, all five of these elements must be present for the [mass filter
radiator] to be a finished heat sink.
Id.; see also Final Scope Ruling at 21.
Pursuant to a (k)(1) analysis, Commerce considers the descriptions of the merchandise
contained in the petition, the initial investigation, and the determinations of Commerce and the
Commission, including prior scope determinations, when analyzing whether a particular product
Court No. 16-00183 Page 10
is included within the scope of an Order. 19 C.F.R. § 351.225(k)(1). Only when a (k)(1)
analysis is not dispositive will Commerce “further consider: (i) The physical characteristics of
the product; (ii) The expectations of the ultimate purchasers; (iii) The ultimate use of the
product; (iv) The channels of trade in which the product is sold; and (v) The manner in which the
product is advertised and displayed.” Id. § 351.225(k)(2).
In its Remand Results, Commerce concluded that Agilent did not provide evidence of any
specified thermal performance requirements, particularly related to the design, production, and
testing of its products to meet the specified thermal performance requirements. See Remand
Results 42–43. Commerce determined that “dimensional tolerances, regardless of precision, and
regardless of documentation, even those established pursuant to enhancing thermal performance,
are not ‘specified thermal performance requirements,’ and do not turn . . . [products] into
finished heat sinks for purposes of the scope exclusion at issue.” Id. at 25. The Department
noted that the use of computer controlled milling machine processing to produce a product also
does not make it a finished heat sink. Id. at 24–25. Commerce disregarded much of the
evidence submitted by Agilent regarding the existence of specified thermal performance
requirements. Id. at 25–35. Based on this perceived lack of evidence, Commerce concluded that
Agilent’s mass filter radiator did not meet the finished heat sink exclusion requirements and was
included in the scope of the Orders. Id. at 32–37.
Agilent argues that its mass filter radiator is designed, produced, and tested around a
specified 200 degrees Celsius thermal performance requirement that must be met in order to
absorb a specific amount of heat and to function properly as a finished heat sink. See Pl.’s
Comments 15–28; see also Oral Argument at 19:56–20:01, 21:26–21:40, 22:08–22:26, 40:27–
Court No. 16-00183 Page 11
40:46, 1:26:31–1:26:55, 1:29:00–1:29:11. Agilent asserts that its product was developed decades
ago, and that the specified thermal performance requirements remain the same today as when the
product was developed originally. See Pl.’s Comments 16–17, 23. Agilent states that the
quadrupole temperature must be 200 degrees Celsius for the thermal absorption and heat transfer
properties of the mass filter radiator to function properly as designed. See id. at 22–23. Plaintiff
explained that it uses specific dimensional tolerances in order to achieve the required thermal
absorption of its mass filter radiator. See id. at 19–20. Agilent contends that it provided
documents to support its position. See id. at 31. Commerce largely ignored Agilent’s arguments
and evidence regarding the specified thermal performance requirements of its mass filter
radiator.
For a (k)(1) determination “to be dispositive, the permissible sources examined by
Commerce must be controlling of the scope inquiry in the sense that they definitely answer the
scope question.” OTR Wheel Eng’g, 36 CIT __, __, 853 F. Supp. 2d at 1287–88 (quoting Sango
Int’l, 484 F.3d at 1379). The exclusionary provision of the Orders does not unambiguously
define “the design and production of which are organized around meeting certain specified
thermal performance requirements,” Antidumping Duty Order, 76 Fed. Reg. at 30,651;
Countervailing Duty Order, 76 Fed. Reg. at 30,654. Commerce conducted a (k)(1) analysis, but
discounted most of Plaintiff’s evidence regarding specified thermal performance requirements
and related physical design properties of the mass filter radiator. Commerce did not reach the 19
C.F.R. § 351.225(k)(2) factors.
Both parties discuss at length the meaning of the exclusion term “specified thermal
performance requirements.” The Parties differ in their understanding of how the thermal
Court No. 16-00183 Page 12
performance requirements may be met, and it is unclear how the industry views “specified
thermal performance requirements.” Commerce concludes merely that “dimensional tolerances,
regardless of precision, and regardless of documentation, even those established pursuant to
enhancing thermal performance, are not ‘specified thermal performance requirements,’ and do
not turn . . . [products] into finished heat sinks for purposes of the scope exclusion at issue.”
Remand Results 25.
Commerce relies heavily on the prior Final ECCO Light Bars Scope Ruling for support
that “dimensional or other physical tolerances” are not specified thermal performance
requirements “even if such physical tolerances are specifically identified, are precise, and are
established explicitly to enhance thermal performance.” Id. at 24 (citing Final ECCO Light Bars
Scope Ruling at 17–21, PD 35, bar code 3523146-02 (Nov. 24, 2014) (“ECCO”)). Commerce’s
reliance on ECCO is misplaced. In ECCO, Commerce found that “ECCO fail[ed] to demonstrate
how these identified specifications translate into ECCO’s product meeting specified thermal
performance requirements.” Id. The key element is apparently the need for a “translation” or
explanation of how the physical design meets specified thermal performance requirements. See
id. ECCO supports an analysis of specific facts to determine whether physical design
requirements can establish the existence of specified thermal performance requirements. A
company must provide information explaining how the physical elements lead to specified
thermal performance requirements—a “translation”—something that ECCO failed to do, but the
possibility is not precluded. See id. at 19–24.
The court concludes that Commerce was unreasonable when it discounted Agilent’s
evidence of a target quadrupole temperature of 200 degrees Celsius for the mass filter radiator to
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pass user-selected tests, and evidence of dimensional or other physical tolerances that were
designed to meet specified thermal performance requirements. Commerce’s determination lacks
substantial evidence that Agilent did not meet the specified thermal performance requirement of
the finished heat sink exclusion. The sources used by Commerce, including the Department’s
reliance on the prior ECCO scope ruling, do not definitively answer the question of whether
Agilent’s mass filter radiator is excluded from the scope of the Orders. It seems quite unlikely
that Commerce can confine itself to a limited 19 C.F.R. § 351.225(k)(1) analysis here and reach
a supported conclusion for the question of whether Agilent’s products are designed and produced
around meeting specified thermal performance requirements. Numerous questions remain. For
example: What are specified thermal performance requirements? How does the industry view
products that are designed and produced around meeting specified thermal performance
requirements? What are the expectations of the ultimate purchasers? What is the ultimate use of
the mass filter radiator? These are the types of questions that would appear to require a more
complete (k)(2) analysis. Commerce should revisit its analysis and provide other substantial
evidence supporting a definitive answer, or it should proceed with a full inquiry pursuant to 19
C.F.R. § 351.225(k)(2).
CONCLUSION
The court remands the matter to Commerce for further evaluation pursuant to 19
C.F.R. § 351.225(k). For the reasons set forth above, and in accordance with the foregoing, it is
hereby
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ORDERED that Commerce’s Remand Results regarding Agilent’s mass filter radiator
are remanded for Commerce to conduct an additional evaluation pursuant to 19 C.F.R.
§ 351.225(k); and it is further
ORDERED that Commerce shall file its second remand redetermination on or before
December 7, 2018; and it is further
ORDERED that Commerce shall file the administrative record on the second remand
redetermination on or before December 21, 2018; and it is further
ORDERED that the Parties shall file any comments on the second remand determination
on or before January 7, 2019; and it is further
ORDERED that the Parties shall file any replies to the comments on or before February
6, 2019; and it is further
ORDERED that the joint appendix shall be filed on or before February 13, 2019.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated: October 1, 2018
New York, New York