Meridian Products, LLC v. United States , 125 F. Supp. 3d 1306 ( 2015 )

Slip Op. 15-135
UNITED STATES COURT OF INTERNATIONAL TRADE
MERIDIAN PRODUCTS, LLC,
Plaintiff,
and
WHIRLPOOL CORPORATION
Plaintiff-Intervenor
Before: Timothy C. Stanceu, Chief Judge
v.
Court No. 13-00246
UNITED STATES,
Defendant,
and
ALUMINUM EXTRUSIONS FAIR
TRADE COMMITTEE,
Defendant-Intervenor.
OPINION AND ORDER
[Affirming in part, and remanding in part, a final scope ruling of the International Trade
Administration, U.S. Department of Commerce, interpreting the scope of antidumping and
countervailing duty orders on certain aluminum extrusions from the People’s Republic of China]
Dated:December 7, 2015
Daniel J. Cannistra, Crowell & Moring, LLP, of Washington, D.C., for plaintiff. With
him on the brief was Alexander Schaefer.
Donald Harrison, Gibson, Dunn & Crutcher, LLP, of Washington, D.C., for plaintiff-
intervenor.
Tara K. Hogan, Senior Trial Counsel, Civil Division, U.S. Department of Justice, of
Washington, D.C., for defendant. With her on the brief were Stuart F. Delery, Assistant
Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director.
Of counsel on the brief was Jessica M. Link, Office of the Chief Counsel for Trade Enforcement
& Compliance, U.S. Department of Commerce, of Washington, D.C.
Court No. 13-00246 Page 2
Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein LLP, of Washington, D.C.,
for defendant-intervenor.
Stanceu, Chief Judge: Plaintiff Meridian Products, LLC (“Meridian”) contests a 2013
“Final Scope Ruling” in which the International Trade Administration, United States Department
of Commerce (“Commerce” or “the Department”) construed the scope of antidumping and
countervailing duty orders (the “Orders”) on aluminum extrusions from the People’s Republic of
China (“China” or the “PRC”) to include three types of kitchen appliance door handles.
Before the court is Meridian’s motion for judgment on the agency record, in which
Meridian argues that the Final Scope Ruling is contrary to law and that Commerce should have
excluded all three types of door handles from the scope of the Orders. Defendant and
defendant-intervenor Aluminum Extrusions Fair Trade Committee, a trade association of U.S.
producers of aluminum extrusions and a petitioner in the antidumping and countervailing duty
investigations, oppose plaintiff’s motion. The court affirms the Department’s determinations as
to two of the product types. The court remands the Final Scope Ruling for reconsideration as to
the third, concluding that Commerce did not base this determination on a reasonable
interpretation of the scope language of the Orders.
I. BACKGROUND
Commerce issued the antidumping and countervailing duty orders on aluminum
extrusions from China in May 2011. Aluminum Extrusions from the People's Republic of China:
Antidumping Duty Order, 76 Fed. Reg. 30,650 (Int’l Trade Admin. May 26, 2011) (“AD
Order”); Aluminum Extrusions from the People’s Republic of China: Countervailing Duty
Order, 76 Fed. Reg. 30,653 (Int’l Trade Admin. May 26, 2011) (“CVD Order”). Meridian filed
with Commerce a request for a scope ruling (“Scope Ruling Request”) on January 11, 2013, in
which it sought a ruling excluding from the scope of the Orders the three types of appliance door
Court No. 13-00246 Page 3
handles. Letter Requesting a Scope Ruling Regarding Kitchen Appliance Door Handles
(Jan. 11, 2013) (Admin.R.Doc. No. 1) (“Scope Ruling Request”). After conducting an
administrative proceeding, Commerce issued the Final Scope Ruling on June 21, 2013, in which
it ruled that all three types of appliance door handles are within the scope of the Orders. Final
Scope Ruling on Meridian Kitchen Appliance Door Handles, C-570-968, A-570-967
(June 21, 2013) (Admin.R.Doc. No. 34), available at http://enforcement.trade.gov/download/prc-
ae/scope/32-Meridian-kitchen-door-handles-21jun13.pdf (last visited ___) (“Final Scope
Ruling”).
Meredian commenced this action on July 10, 2013. Summons, ECF No. 1; Compl., ECF
No. 4. Prior to any briefing of substantive issues, Meridan filed a motion for an expedited
remand on Sepetember 23, 2013. Meridian’s Mot. Remand, ECF No. 29. On February 19, 2014,
the court denied this motion on the ground that an expedited proceeding such as that proposed by
plaintiff would prejudice the other parties to the action. Meridian Products LLC v. United States,
38 CIT __, Slip. Op. 14-20 (Feb. 19, 2014). On May 12, 2014, Meridian filed its motion for
judgment on the agency record. Pl.’s Mot. J. Agency R., ECF No. 38 (“Pl.’s Br.”). 1 Defendant
and defendant-intervenor responded on September 9, 2014. Def.’s Opp’n to Pl.’s Mot. J. Agency
R., ECF No. 46 (“Def.’s Opp’n”); Def.-Int.’s Resp. Pl.’s Mot. J. Agency R., ECF No. 45 (“Def.-
Int.’s Opp’n”). On October 14, 2014, Meridian filed a reply. Pl.’s Reply Br. to Def.’s Opp’n to
Pl.’s Mot. J. Agency R., ECF No. 48 (“Pl.’s Reply”). The court held oral argument on
February 12, 2015. ECF No. 60.
1
Plaintiff-intevenor Whirlpool Corporation has not submitted briefing in this litigation.
Court No. 13-00246 Page 4
II. DISCUSSION
A. Jurisdiction and Standard of Review
The court exercises subject matter jurisdiction under section 201 of the Customs Courts
Act of 1980, 28 U.S.C. § 1581(c), which grants jurisdiction over civil actions brought under
section 516A of the Tariff Act of 1930 (“Tariff Act”). 2 19 U.S.C. § 1516a(a)(2)(B)(vi).
Section 516A provides for judicial review of a determination of “whether a particular type of
merchandise is within the class or kind of merchandise described in an . . . antidumping or
countervailing duty order.” Id. In conducting the review, the court must set aside “any
determination, finding, or conclusion found . . . to be unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” Id. § 1516a(b)(1)(B)(i).
B. Description of the Merchandise in Meridian’s Scope Ruling Request
Meridian’s Scope Ruling Request specified that each of the three types of appliance door
handles at issue contains extruded aluminum of “6063-T5 material.” Scope Ruling Request 2.
Commerce determined in the Final Scope Ruling, and plaintiff does not contest, that this is a
“6000 series aluminum alloy” that is among those identified by the scope language of the Orders.
See Final Scope Ruling 12.
According to the Scope Ruling Request, “[t]he Type A handles” are “finished handles”
that “are for oven door assemblies.” Scope Ruling Request 2. They “have a radius arc and
distinctive bow tie look” and “are brushed and anodized with mounting hole area that fits over a
shoulder bolt on the oven doors.” Id.
Type B handles are also for “oven door assemblies.” Id. The Scope Ruling Request
described a Type B handle as “an assembly of the middle handle bar extrusion piece plus two
2
All statutory citations herein are to the 2012 edition of the United States Code and all
regulatory citations herein are to the 2012 edition of the Code of Federal Regulations.
Court No. 13-00246 Page 5
plastic injection molded end caps at each end.” Id. It added that “[t]he end caps are attached at
each end of the handle to serve as the finished end and the mechanism for attaching to the oven
door” and that “[h]oles are drilled and aligned to match the door holes on the oven door for final
assembly.” Id.
The “Type C Handle Kit” is “a boxed consumer-installed freezer handle kits [sic]” that
“contain one handle, one allen wrench, and installation instructions.” Id. “The handle . . . has an
arc radius and drilled holes on the back to match the door holes for assembly” and “has the
appearance of a bow tie.” Id.
The Scope Ruling Request further provided that “[a]ll of the components are fully
fabricated and do not require further cutting, punching, or other processing prior to their
assembly and installation to the finished oven, refrigerator, or freezer unit.” Id. at 3. It also
stated that “the kitchen appliance door handles are in a form ready to be sold directly to, and
used by, the consumer/end-user,” that “[t]he package contains the components such as bottom
mount fasteners and allen wrench necessary for installation by the consumer,” and that “the
handle kit is shipped to the customer with assembly instructions.” Id. at 3-4.
C. The Scope Language in the Orders
The scope language of the antidumping duty order and the scope language of the
countervailing duty order are essentially identical. The Orders apply to “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).” AD Order, 76 Fed. Reg. at 30,650; CVD Order, 76 Fed.
Reg. at 30,653. The scope includes aluminum extrusions that are “anodized” and also includes
aluminum extrusions that are “fabricated (i.e., prepared for assembly)” by “operations” that
Court No. 13-00246 Page 6
“would include, but are not limited to, extrusions that are cut-to-length, machined, drilled,
punched, notched, bent, strectched, knurled, swedged, mitered, chamfered, threaded, and spun.”
AD Order, 76 Fed. Reg. at 30,650; CVD Order, 76 Fed. Reg. at 30,654. The scope also includes
such aluminum extrusions even if they are “described at the time of importation as parts for final
finished products that are assembled after importation . . .” or “identified with reference to their
end use . . . .” AD Order, 76 Fed. Reg. at 30,650-51; CVD Order, 76 Fed. Reg. at 30,654.
The scope language contains an exclusion applying to certain “finished merchandise,”
which reads as follows:
The scope . . . excludes finished merchandise containing aluminum extrusions as
parts that are fully and permanently assembled and completed at the time of entry,
such as finished windows with glass, doors with glass or vinyl, picture frames
with glass pane and backing material, and solar panels.
AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654. The scope
language also contains an exclusion for “finished good kits,” as follows:
The scope also excludes finished goods containing aluminum extrusions that are
entered unassembled in a “finished goods kit.” A finished goods kit is understood
to mean a packaged combination of parts that contains, at the time of importation,
all of the necessary parts to fully assemble a final finished good and requires no
further finishing or fabrication, such as cutting or punching, and is assembled “as
is” into a finished product. An imported product will not be considered a
“finished goods kit” and therefore excluded from the scope of the investigation
merely by including fasteners such as screws, bolts, etc. in the packaging with an
aluminum extrusion product.
AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654.
D. The Court Affirms the Department’s Determination that the Type A and Type C Appliance
Door Handles Are Within the Scope of the Orders
The Court of Appeals for the Federal Circuit has instructed that “just as orders cannot be
extended to include merchandise that is not within the scope of the order as reasonably
interpreted, merchandise facially covered by an order may not be excluded from the scope of the
order unless the order can reasonably be interpreted so as to exclude it.” Mid Continent Nail
Court No. 13-00246 Page 7
Corp. v. United States, 725 F.3d 1295, 1301 (Fed. Cir. 2013) (emphasis in original). In this case,
the Type A and Type C appliance handles are facially covered by the scope language, which
cannot reasonably be interpreted to exclude them. As shown by Meridian’s Scope Ruling
Request, each Type A and each Type C handle is produced by fabrication that is performed on an
extrusion consisting of an aluminum alloy covered by the Orders. Scope Ruling Request 2. The
general scope language, i.e., the language not including the exclusions, therefore describes these
two handle types, and no exclusion within the scope language applies to either of them.
The finished merchandise exclusion does not describe the Type A or Type C handles. By
its plain terms, this exclusion is limited to assemblies: it pertains only to “finished merchandise
containing aluminum extrusions as parts that are fully and permanently assembled and completed
at the time of entry.” AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654.
As the Scope Ruling Request concedes, the Type A and Type C appliance door handles are one-
piece articles, not assemblies of parts. See Scope Ruling Request 2. The aluminum extrusion is
not a “part” of a Type A or Type C handle and instead is the entire article.
The finished goods kit exclusion is also inapplicable to the Type A and Type C handles.
This exclusion applies only to articles imported unassembled in the form of a kit containing all
parts necessary to assemble the completed good. See AD Order, 76 Fed. Reg. at 30,651; CVD
Order, 76 Fed. Reg. at 30,654. The Type A handles are imported as completed articles. See
Scope Ruling Request 2. Although the Scope Ruling Request describes a “Type C Handle Kit,”
id., it clarifies that the Type C handles, like the Type A handles, are imported in finished form.
Id. (“The kits contain one handle, one allen wrench, and installation instructions.”).
In contesting the Final Scope Ruling, plaintiff raises arguments directed to the Final
Scope Ruling as a whole. As applied to the Type A and Type C handles, these arguments are
unconvincing.
Court No. 13-00246 Page 8
Relying on § 351.225(k) of the Department’s regulations (19 C.F.R. § 351.225(k)) and
Walgreen Co. v. United States, 620 F.3d 1350, 1352 (Fed. Cir. 2010), Meridian argues that “the
initiation of a formal scope inquiry reflects a judgment that the (k)(1) criteria are not dispositive”
and that “the regulations further state that when the (k)(1) criteria are not dispositive, Commerce
must consider the criteria in paragraph (k)(2).” Pl.’s Br. 5 (emphasis in original). This argument
is unavailing. Having crafted scope language that cannot reasonably be interpreted to exclude
the Type A and Type C handles, Commerce lacked the authority to place these two handle types
outside the scope of the Orders. Neither the holding of Walgreen Co. nor 19 C.F.R. § 351.225(k)
requires a contrary result. Moreover, although § 351.225(e) provides that the Secretary will
initiate a scope inquiry “[i]f the Secretary finds that the issue of whether a product is included
within the scope of an order or a suspended investigation cannot be determined based solely
upon the application and the descriptions of the merchandise referred to in paragraph (k)(1) of
this section,” 19 C.F.R. § 351.225(e), it does not necessarily follow that, having initiated a scope
inquiry, Commerce is precluded from subsequently resolving a scope issue without resorting to
the factors of § 351.225(k)(2).
Plaintiff argues, next, that the Final Scope Ruling is inconsistent with a prior scope ruling
by Commerce. Pl.’s Br. 7 (citing, inter alia, Final Scope Ruling on Side Mount Valve Controls,
A-570-967, C-570-968 (Oct. 26, 2012), Attach. in App. to Mem. in Supp. of Meridian’s Mot. J.
Agency R. (May 19, 2014), ECF No. 39). The cited ruling, which pertains to an unassembled
good imported as a kit, id. at 2, does not address the issue posed by the Type A and Type C
handles.
Finally, Meridian maintains that the Final Scope Ruling is contrary to law because,
according to Meridian, Commerce imposed, as a condition for satisfying the finished
merchandise exclusion or the finished goods kit exclusion, an “aluminum content” requirement
Court No. 13-00246 Page 9
under which the good under consideration cannot qualify if it consists entirely of aluminum
extrusions. Pl.’s Br 10-19. This argument, which Meridian directs to all three handle types, does
not address the specific issues posed by the Type A and Type C handles, which cannot satisfy the
requirements of either exclusion.
E. The Court Remands for Reconsideration the Department’s Determination that the
Type B Handles Are Within the Scope of the Orders
In a leading case, the Court of Appeals for the Federal Circuit has held that “[s]cope
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, Inc. v. United States, 296 F.3d 1087, 1089 (Fed. Cir. 2002) (“Duferco”). This
case presents the issue of whether Commerce based its conclusion that the Type B handles are
subject merchandise on a reasonable interpretation of the scope language. The court concludes
that it did not and, therefore, remands this issue for redetermination.
1. Commerce Did Not Base its Determination that the Type B Handles Are Within the Scope on
a Reasonable Interpretation of the General Scope Language
The threshold question presented is whether Commerce, in placing the Type B handles
within the scope of the Orders, based that determination on a reasonable interpretation of the
general scope language, i.e., the scope language considered apart from the exclusions. The
Type B handles, in contrast to the Type A and Type C handles, are not one-piece articles but
instead are assemblies comprised of an extruded aluminum “middle handle bar extrusion piece”
and “two plastic injection molded end caps.” Scope Ruling Request 2. According to record
documents, including a document containing detailed illustrations of the Type B handles, the
assembly also includes two screws that attach the end caps to the “extrusion piece.” Id. at
Attachment 1, “Type B Handles,” “Sec. A-A.” Thus, the record shows that a Type B handle is
Court No. 13-00246 Page 10
an assembled article consisting of five parts: the extrusion piece, the two end caps, and the two
screws attaching the end caps to the extruded aluminum component.
The general scope language provides that the subject merchandise is “aluminum
extrusions.” AD Order, 76 Fed. Reg. at 30,650; CVD Order, 76 Fed. Reg. at 30,653. An
“extrusion,” according to the general scope language, is a shape or form produced by an
extrusion process. Id. As so defined, the term “extrusion” does not describe the Type B handles.
Moreover, no scope language in the Orders is so open-ended as to sweep into the scope all
assembled goods that contain one or more aluminum extrusions as parts.
Certain language in the scope description of the Orders refers to “parts,” but this
language is limited in such a way that it does not describe the Type B handles. The Orders
provide that “[s]ubject aluminum extrusions may be described at the time of importation as parts
for final finished products that are assembled after importation, including, but not limited to,
window frames, door frames, solar panels, curtain walls, or furniture.” AD Order, 76 Fed. Reg.
at 30,650-51; CVD Order, 76 Fed. Reg. at 30,654. According to plain meaning, this sentence
clarifies that an aluminum extrusion generally is within the scope even though it may have been
fabricated so as to make it suitable for use as a part of a “final finished product.” The sentence is
addressing an “extrusion,” i.e., a shape or form produced by an extrusion process, not a good
which, when imported, is an assembled good containing an extrusion. As the scope language
states in the following sentence, “[s]uch parts that otherwise meet the definition of aluminum
extrusions are included in the scope.” AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed.
Reg. at 30,654 (emphasis added).
In the next sentence, the scope language provides that “[t]he scope includes the aluminum
extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e.,
partially assembled merchandise unless imported as part of the finished goods ‘kit’ defined
Court No. 13-00246 Page 11
further below.” Id. This is the only scope language that arguably could be read to expand the
scope beyond products that fit within the plain meaning of the definition of “extrusion” provided
by the first sentence of the scope language. In the Final Scope Ruling, Commerce did not
conclude that the Type B handles are “partially assembled merchandise” and did not conclude
that these handles fall within the “subassemblies” provision of the general scope language. This
is understandable, as there is record evidence in this case that the Type B handles, which are the
“merchandise” under consideration, are imported in fully assembled, not “partially assembled,”
form. Further, as to all three handle types, Commerce found that “the products at issue are ready
for use ‘as is’ at the time of importation.” Final Scope Ruling 13. This finding appears
inconsistent with a finding or inference that the Type B handles are “partially assembled
merchandise.”
Making no mention of the “subassemblies” provision, Commerce found that the Type B
handles are themselves “extrusions” within the meaning of the general scope language,
including, in particular, the definition of the term set forth in the first sentence of the scope
language. Id. at 12 (“We find that Meridian’s products are ‘aluminum extrusions which are
shapes and forms,’ made of an aluminum alloy that is covered by the scope of the Orders”; “the
products at issue meet the description of subject extrusions”; “Meridian’s products are merely
aluminum extrusions that meet the physical description of subject merchandise, referred to by
their end use: as door handles for kitchen appliances, such as refrigerators and ovens.”). The
conclusion that the Type B handles fall within the general scope language is unsupported by the
wording of the general scope language as applied to the uncontradicted record evidence, which is
that a Type B handle is not an extrusion but rather is an assembly containing an extrusion,
produced by assembling an aluminum extrusion, two plastic end caps, and two screws.
According to the general scope language, an “extrusion” is a shape or a form produced by an
Court No. 13-00246 Page 12
extrusion process, not by an assembly process performed upon an extrusion and other
components.
In concluding that the Type B handles are described by the general scope language,
Commerce appears to have disregarded the presence of the parts of the Type B handle—other
than the part that is an aluminum extrusion—on the premise that these other parts are “fasteners.”
To this end, Commerce stated in the Final Scope Ruling that “[a]side from the inclusion of
fasteners for Type B handles, the products at issue consist of aluminum extrusions extrusion [sic]
made of 6000 series aluminum alloy.” Id. Commerce proceeded to a conclusion that
“Meridian’s products consist entirely of aluminum extrusions, with the exception of fasteners,
which, by the language of the scope, do not remove the aluminum extrusion product from the
scope.” Id. at 13 (emphasis added). Because the “language of the scope” does not support the
interpretation Commerce places upon it, the Department’s logic is flawed.
The only reference to “fasteners” in the general scope language occurs in the
aforementioned provision addressing “subassemblies.” See AD Order, 76 Fed. Reg. at 30,651;
CVD Order, 76 Fed. Reg. at 30,654 (“The scope includes the aluminum extrusion components
that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled
merchandise unless imported as part of the finished goods ‘kit’ defined further below.”
(emphasis added)). As noted above, Commerce based its reasoning on a conclusion that each of
the three handle types, including the Type B handle, constitutes an “extrusion” as defined in the
general scope language, not on the subassemblies provision. The second use of the term
“fasteners” in the scope language occurs in the description of the finished goods kit exclusion,
which states that “[a]n imported product will not be considered a ‘finished goods kit’ and
therefore excluded from the scope of the investigation merely by including fasteners such as
Court No. 13-00246 Page 13
screws, bolts, etc. in the packaging with an aluminum extrusion product.” Id. This language
limits the finished goods kit exclusion. It does not expand the general scope of the Orders.
A second flaw in the Department’s logic is the interpreting of the term “fasteners” so
broadly as to encompass the plastic end caps. Illustrations of the Type B handles in the record
demonstrate that the plastic end caps are specialized parts, molded to a shape necessary to their
function as components of a complete handle assembly, in which they are fitted to the ends of the
extruded aluminum component. See Scope Ruling Request, Attachment 1, “Type B Handles,”
“Sec. A-A.” The scope language contains no definition of the term “fastener,” and nothing in the
scope language suggests that the term should be given a meaning broad enough to include the
plastic parts. To the contrary, the absence of a definition connotes that the term was intended to
be accorded its common and ordinary meaning; i.e., absent a contrary indication of intent the
term should be construed to have a meaning consistent with its use in common and commercial
parlance. The reference to “fasteners” in the finished good kit exclusion, by referring to
“fasteners such as screws, bolts, etc.,” AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed.
Reg. at 30,654, further connotes an intention that the term be given its common and commercial
meaning rather than the unusually broad meaning required by the Department’s implicit
reasoning.
In summary, the Department failed to base its conclusion that the Type B handles are
described by the general scope language on a reasonable interpretation of that language. This
flaw, considered by itself, requires a remand. But even were the court to assume, arguendo, that
the general scope language reasonably could be interpreted to include the Type B handles, it still
would conclude that the Department’s reasoning is flawed in the interpretation of one of the
specific exclusions set forth in the scope language.
Court No. 13-00246 Page 14
2. Commerce Employed Flawed Logic in Concluding that the Finished Merchandise Exclusion
Did Not Apply to the Type B Handles
As discussed previously in this Opinion and Order, the scope contains an exclusion that is
limited to goods imported in assembled form. Excluded from the scope is “finished merchandise
containing aluminum extrusions as parts that are fully and permanently assembled and completed
at the time of entry, such as finished windows with glass, doors with glass or vinyl, picture
frames with glass pane and backing material, and solar panels.” Id.
The first issue posed by the language of the exclusion is whether the Type B handles are
“finished merchandise.” According to the Scope Ruling Request, these handles are imported in a
form ready for their intended use, i.e., they are complete handles ready for attachment to oven
doors. See, e.g., Scope Ruling Request 3 (“In addition, the kitchen appliance door handles are in
a form ready to be sold directly to, and used by, the consumer/end user.”). They appear to fall
within the meaning of the term “finished merchandise” as used in the scope language. The Final
Scope Ruling does not find to the contrary and includes the aforementioned finding that “the
products at issue are ready for use ‘as is’ at the time of importation.” Final Scope Ruling 13. In
the context of the term “merchandise” when read in the plural, these handles also appear to be
described by the term “merchandise containing aluminum extrusions as parts.” 3 Finally, there is
record evidence that the Type B handles are “permanently assembled and completed at the time
of entry.” Scope Ruling Request 2 (“The handle is an assembly of the middle handle bar
extrusion piece plus two plastic injection molded end caps at each end.” (emphasis added)),
Attachment 1, “Type B Handles,” “Sec. A-A.”
3
Only a strained, and paradoxical, reading of the language of the finished merchandise
exclusion would lead to a conclusion that an assembled article, among its multiple assembled
parts, must contain more than one extruded aluminum part to qualify for exclusion from the
scope thereunder, and in the Final Scope Ruling Commerce did not so interpret the language.
Court No. 13-00246 Page 15
The Final Scope Ruling does not analyze the Type B handles separately with respect to
the finished merchandise exclusion. Instead, its analysis addresses all three handle types
simultaneously, concluding that the handles do not qualify for either the “finished merchandise”
or the “finished goods kit” exclusion. Discussing the finished merchandise exclusion,
Commerce found that “the record is undisputed that the aluminum extrusion parts are not fully
and permanently assembled with non-aluminum extrusion parts at the time of entry.” 4 Final
Scope Ruling 13. Commerce also found, however, that the Type B handles “are made of
aluminum extrusions, plus two plastic injection molded end caps at each end” that “are used to
fasten the handle to the door.” Id. at 2. Although it did not so state, Commerce apparently
concluded, first, that the presence of “fasteners” is to be disregarded when the question is
whether a good qualifies as “merchandise containing aluminum extrusions as parts” for purposes
of the finished merchandise exclusion and, second, again concluded that the plastic end caps
present in the Type B handles are “fasteners.”
The conclusion that the plastic end caps are “fasteners” suffers from the flaw the court
discussed above with respect to the general scope language. But there is also an interpretive
difficulty with the Department’s apparent reasoning that the presence of fasteners is to be
disregarded for purposes of applying the finished merchandise exclusion. The difficulty is that
the finished merchandise exclusion contains no reference to fasteners. This contrasts with the
finished goods kit exclusion, under which express language instructs that the presence of
4
Commerce implicitly interpreted the finished merchandise exclusion to require that an
assembled good, in order to qualify, must contain at least one part that is not an aluminum
extrusion. The plain language of the finished merchandise exclusion does not so require, and
any support for such an interpretation could be found only by reading the examples as limiting
the express language. At this time, the court need not decide whether this is a reasonable
interpretation of the language in question.
Court No. 13-00246 Page 16
fasteners in the packaging is to be disregarded. AD Order, 76 Fed. Reg. at 30,651; CVD Order,
76 Fed. Reg. at 30,654.
In summary, the Final Scope Ruling fails to demonstrate the reasonableness of the
Department’s conclusion that the Type B handles do not satisfy the requirments of the finished
merchandise exclusion when the scope language setting forth that exclusion is interpreted
according to plain meaning.
3. Commerce Must Reconsider Its Determination that the Type B Handles Are Within the Scope
In summary, the Department’s determination in the Final Scope Ruling that the Type B
handles are within the scope of the Orders is not based on reasonable interpretations of the
general scope language and the finished merchandise exclusion. Commerce, therefore, must
reconsider its determination that the Type B handles are within the scope and in so doing must be
mindful that its responsibility is to interpret, and not to enlarge, the scope language it previously
placed in final form upon promulgation of the Orders. See Duferco, 296 F.3d at 1097-98.
4. Defendant’s and Defendant-Intervenor’s Arguments Fail to Confront the Problems in the
Department’s Determination that the Type B Handles Are Within the Scope
Defendant and defendant-intervenor, in opposing plaintiff’s motion for judgment on the
agency record, raise several arguments in advocating affirmance of the Final Scope Ruling in the
entirety. The arguments are unconvincing when considered in the context of the issues presented
by the Type B handles.
Defendant argues that the Department’s determination is supported by the plain language
of the orders, Def.’s Br. 7, but defendant’s arguments do not overcome the errors in the
Department’s analysis. Defendant argues, for example, that “[t]he record is undisputed that
Meridian’s kitchen appliance door handles consist entirely of aluminum extrusions and
fasteners,” id., but as to the Type B handles, this characterization of the record is incorrect: the
Court No. 13-00246 Page 17
record contains documentary evidence that a Type B handle is an assembly and that the plastic
end caps do not resemble a product described by the term “fastener” as that term is commonly
and commercially used. Further, defendant does not explain why it was reasonable for
Commerce to conclude that an assembly such as a Type B handle falls within the general scope
language or that the presence of fasteners within an assembly is ignored for purposes of the
general scope language or the finished merchandise exclusion.
Defendant next argues that “Commerce determined that Meridian’s door handles consist
entirely of aluminum extrusions matching the physical description of subject merchandise” and
that “Meridian does not challenge this conclusion.” Id. at 8. In making this argument, defendant
cites the finding in the Final Scope Ruling that “Meridian’s products are ‘aluminum extrusions
which are shapes and forms,’ made of an aluminum alloy that is covered by the scope of the
orders.” Id. (citing Final Scope Ruling 12). In a footnote to its statement that “Meridian does
not challenge this conclusion,” defendant adds an argument that “Meridian also does not
challenge Commerce’s determination that the ‘finished merchandise’ exclusion did not apply
because ‘the record is undisputed that the aluminum extrusion parts are not fully and
permanently assembled with non-aluminum extrusion parts at the time of entry’ as required by
the exclusionary language in the orders.” Id. at 8 n.4. (citing Final Scope Ruling 13). Defendant
appears to advocate that the court should refuse on grounds of waiver to consider whether the
handles, and the Type B handles in particular, are described by the general scope language or
qualify under the finished merchandise exclusion. If that actually is defendant’s argument, the
court rejects it. In support of its Rule 56.2 motion, plaintiff argues, inter alia, that the
Department’s determination “impermissibly expanded the scope of the orders by interpreting the
scope language in a manner inconsistent with its terms . . . .” Pl.’s Br. 1. As to the finished
merchandise exclusion, plaintiff maintains that its handles fall within what it terms the “finished
Court No. 13-00246 Page 18
goods exclusion,” which the court interprets as a reference to the “finished merchandise”
exclusion. Id. at 7, 9-10. That plaintiff also argues, unconvincingly, that its handles meet the
requirements of the finished goods kit exclusion does not defeat its claim. The court declines
defendant’s invitation to decide this case without reaching the merits.
Defendant-intervenor argues as to all three handle types that “Commerce’s ultimate
conclusion that the kitchen appliance handles are within the scope was correct.” Def.-Int.’s
Br. 5. Defendant-intervenor’s arguments, like defendant’s arguments, fail to confront the
problems the plain meaning of the scope language poses for the Department’s interpretation as
applied to the Type B handles.
Directing the court’s attention to the provision in the scope language addressing
“subassemblies,” defendant-intervenor argues that “[b]ecause the kitchen appliance handles are
subassemblies, or parts, of a final finished product, (i.e., a kitchen appliance), which are
explicitly covered by the scope language, the handles cannot fall within the scope exclusion for
‘finished good kits’ from which a ‘final finished good’ is assembled.” Id. at 2. Defendant-
intervenor elaborates that “[t]he combination of the subassembly language, which indicates that
the aluminum extrusions within a subassembly remain subject even when the subassembly
includes non-extruded parts, and the use of the word ‘final’ in the finished goods exclusion
clearly shows that subassemblies of larger products are not themselves ‘final finished products.’”
Id. at 6-7. Defendant-intervenor adds that “subassemblies, or parts, of larger, final finished
products are within the scope of the orders, as they cannot fall under the exclusion for ‘final
finished goods [sic].’” 5 Id. at 7. Defendant-intervenor’s argument attempts to supply a rationale
5
Defendant-intervenor’s argument appears to conflate the finished goods kit exclusion,
which uses the word “final,” and the finished merchandise exclusion, which does not.
Court No. 13-00246 Page 19
for the Final Scope Ruling different from that upon which Commerce based the Final Scope
Ruling. Commerce did not rely upon the subassemblies language in concluding that the handles
are subject merchandise. See Final Scope Ruling 12-15. The court must review the
Department’s determination on the reasoning Commerce put forth. Moreover, as the court has
discussed, the “subassemblies” language in the scope applies to “partially assembled
merchandise,” AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654;
defendant-intervenor fails to reconcile its argument with record evidence that the Type B handle
is imported in fully assembled form and with the Department’s finding that the handles “are
ready for use ‘as is’ at the time of importation,” Final Scope Ruling 13.
The remaining arguments of defendant and defendant-intervenor address issues that are
not relevant to a resolution of the issues raised by the Type B handles.
III. CONCLUSION AND ORDER
The court denies relief on plaintiff’s claim as to the Type A and Type C appliance door
handles at issue in this case and remands for reconsideration the Department’s determination that
the Type B handles are within the scope of the Orders.
Therefore, upon consideration of the Final Scope Ruling and all papers and proceedings
had herein, and upon due deliberation, it is hereby
ORDERED that the Final Scope Ruling is affirmed in its determination that the Type A
and Type C appliance door handles are within the scope of the Orders; it is further
ORDERED that the Final Scope Ruling be, and hereby is, remanded for reconsideration,
in accordance with this Opinion and Order, of the Department’s determination that the Type B
appliance door handles are within the scope of the Orders; it is further
ORDERED that Commerce shall have ninety (90) days from the date of this Opinion and
Order to file a remand redetermination comprising a new scope ruling addressing the Type B
handles that complies with this Opinion and Order; it is further
Court No. 13-00246 Page 20
ORDERED that plaintiff, plaintiff-intervenor, and defendant-intervenor shall have thirty
(30) days from the date of the Department’s filing of the remand redetermination in which to file
comments on the remand redetermination; and it is further
ORDERED that defendant shall have fifteen (15) days after the filing of the last
comment by plaintiff, plaintiff-intervenor, or defendant-intervenor in which to file a reply to the
comments of the other parties.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Chief Judge
Dated: December 7, 2015
New York, New York