OTR Wheel Engineering, Inc. v. United States , 853 F. Supp. 2d 1281 ( 2012 )

Slip Op. 12- 89
UNITED STATES COURT OF INTERNATIONAL TRADE
OTR WHEEL ENGINEERING, INC.,
Plaintiff,
.v. Before: Jane A. Restani, Judge
UNITED STATES, Court No. 11-00166
Defendant,
BRIDGESTONE AMERICAS, INC., and
BRIDGESTONE AMERICAS TIRE
OPERATIONS, LLC,
Intervenor Defendants.
OPINION AND ORDER
[Commerce scope inquiry determination remanded.]
Dated: June 27, 2012
Arthur K. Purcell, Sandler, Travis & Rosenberg, PA, of New York, NY, argued
for plaintiff. With him on the brief were Donna L. Bade, Mark R. Ludwikowski, and Mark J.
Segrist.
Alexander V. Sverdlov, Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on
brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director,
and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Matthew D. Walden,
Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of
Washington, DC.
Christopher T. Cloutier, Joseph W. Dorn, Prentiss Lee Smith, and J. Michael
Taylor, King & Spalding, LLP, of Washington, DC for intervenor defendants.
Restani, Judge: This matter is before the court on plaintiff OTR Wheel
Engineering, Inc.’s (“OTR Wheel” or “Plaintiff”) motion for judgment upon the agency record
Court No. 11-00166 Page 2
pursuant to USCIT Rule 56.2. Plaintiff, an importer of certain pneumatic off-the-road (“OTR”)
tires from the People’s Republic of China (“PRC”), challenges the U.S. Department of
Commerce’s (“Commerce” or “Secretary”) final scope ruling regarding an antidumping (“AD”)
duty order and countervailing duty order covering certain pneumatic OTR tires from the PRC.
Antidumping Duty and Countervailing Duty Orders (“CVD”) on Certain New Pneumatic
Off-The-Road Tires from the People’s Republic of China: Final Scope Ruling – OTR Wheel
Engineering, Inc., available at Pl.’s Rule 56.2(c)(3) App. of Admin. R. (“Pl.’s App.”), Ex. F
(Apr. 26, 2011) (“Final Scope Ruling”). For the reasons stated below, the court remands
Commerce’s findings for further proceedings consistent with this opinion.
BACKGROUND
In September 2008, Commerce placed antidumping and countervailing duty
orders on certain new pneumatic OTR tires from the PRC.1 Certain New Pneumatic
Off-the-Road Tires From the People’s Republic of China: Countervailing Duty Order, 73 Fed.
Reg. 51,627, 51,627 (Dep’t Commerce Sept. 4, 2008) (“CVD Order”); Certain New Pneumatic
Off-the-Road Tires From the People’s Republic of China: Antidumping Duty Order: Notice of
Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping
1
“Generally, whenever domestic producers of a particular product believe that imports of
certain competing goods are being sold in the United States at less than fair market value (i.e.,
being ‘dumped’), they may petition Commerce to impose antidumping duties on the imports of
the goods.” King Supply Co. v. United States, 674 F.3d 1343, 1345 (Fed. Cir. 2012). After
investigations by Commerce and the U.S. International Trade Commission (“ITC”), Commerce
may issue “an AD order imposing antidumping duties on the appropriate imported merchandise.”
Id. (citing 19 U.S.C. § 1673d(c)(2)). “After an AD order is issued, Commerce is often called
upon to issue ‘scope rulings’ to clarify the scope of the AD order and determine whether
particular products are included within its scope.” Id.
Court No. 11-00166 Page 3
Duty Order, 73 Fed. Reg. 51,624, 51,624 (Dep’t Commerce Sept. 4, 2008) (“AD Order”)
(collectively “the orders”). The scope of these orders2 was stated as follows:
The products covered by the order are new pneumatic tires designed for off-the-road
(OTR) and off-highway use, subject to exceptions identified below. Certain OTR tires
are generally designed, manufactured and offered for sale for use on off-road or
off-highway surfaces, including but not limited to, agricultural fields, forests,
construction sites, factory and warehouse interiors, airport tarmacs, ports and harbors,
mines, quarries, gravel yards, and steel mills. The vehicles and equipment for which
certain OTR tires are designed for use include, but are not limited to: (1) Agricultural and
forestry vehicles and equipment, including agricultural tractors, combine harvesters,
agricultural high clearance sprayers, industrial tractors, log-skidders, agricultural
implements, highway-towed implements, agricultural logging, and agricultural,
industrial, skid-steers/mini-loaders; (2) construction vehicles and equipment, including
earthmover articulated dump products, rigid frame haul trucks, front end loaders, dozers,
lift trucks, straddle carriers, graders, mobile cranes, compactors; and (3) industrial
vehicles and equipment, including smooth floor, industrial, mining, counterbalanced lift
trucks, industrial and mining vehicles other than smooth floor, skid-steers/mini-loaders,
and smooth floor off-the-road counterbalanced lift trucks. The foregoing list of vehicles
and equipment generally have in common that they are used for hauling, towing, lifting,
and/or loading a wide variety of equipment and materials in agricultural, construction and
industrial settings. Such vehicles and equipment, and the descriptions contained in the
footnotes are illustrative of the types of vehicles and equipment that use certain OTR
tires, but are not necessarily all-inclusive. While the physical characteristics of certain
OTR tires will vary depending on the specific applications and conditions for which the
tires are designed (e.g., tread pattern and depth), all of the tires within the scope have in
common that they are designed for off-road and off-highway use. Except as discussed
below, OTR tires included in the scope of the order range in size (rim diameter) generally
but not exclusively from 8 inches to 54 inches. The tires may be either tube-type or
tubeless, radial or non-radial, and intended for sale either to original equipment
manufacturers or the replacement market. The subject merchandise is currently
classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”)
subheadings: 4011.20.10.25, 4011.20.10.35, 4011.20.50.30, 4011.20.50.50,
4011.61.00.00, 4011.62.00.00, 4011.63.00.00, 4011.69.00.00, 4011.92.00.00,
4011.93.40.00, 4011.93.80.00, 4011.94.40.00, and 4011.94.80.00. While HTSUS
subheadings are provided for convenience and customs purposes, our written description
of the scope is dispositive.
2
Although the AD Order and CVD Order differ in some respects, the two orders are
identical for the purpose of defining the scope of the orders.
Court No. 11-00166 Page 4
AD Order, 73 Fed. Reg. at 51,624–25 (footnotes with definitions omitted). The orders also listed
types of tires which were excluded from the scope:
[P]neumatic tires that are not new, including recycled or retreaded tires and used tires;
non-pneumatic tires, including solid rubber tires; tires of a kind designed for use on
aircraft, all-terrain vehicles, and vehicles for turf, lawn and garden, golf and trailer
applications. Also excluded from the scope are radial and bias tires of a kind designed
for use in mining and construction vehicles and equipment that have a rim diameter equal
to or exceeding 39 inches. Such tires may be distinguished from other tires of similar
size by the number of plies that the construction and mining tires contain (minimum of
16) and the weight of such tires (minimum 1500 pounds).
Id. at 51,625. In February 2011, OTR Wheel filed a scope ruling request, asking that Commerce
find Trac Master and Traction Master tires imported by OTR Wheel fall within the scope
exclusion for “tires of a kind used on . . . vehicles for turf, lawn and garden . . . applications.”
Scope Ruling Request: OTR Wheel Engineering, Inc. – Lawn & Garden Tires, available at Pl.’s
App., Ex. A, at 4 (Feb. 11, 2011) (quoting AD Order, 73 Fed. Reg. at 51,625). OTR Wheel
argued that the plain language of the scope was dispositive in excluding OTR Wheel’s Trac
Master and Traction Master tires. Id. Bridgestone Americas, Inc. and Bridgestone Americas
Tire Operations, LLC (collectively “Bridgestone”) filed comments opposing OTR Wheel’s
exclusion request.
In April 2011, Commerce released its Final Scope Ruling, finding that the tires
were not excluded from the orders. Final Scope Ruling at 8. Pursuant to 19 C.F.R.
§ 351.225(k)(1), Commerce stated that it found the description of the merchandise contained in
the petition, the initial investigation, and the determinations of the Secretary of Commerce and
the ITC to be dispositive. Id. at 6. By drafting the scope orders during the original investigation
to replace the word “use” with the phrase “designed for use,” Commerce made clear that end-use
Court No. 11-00166 Page 5
was not determinative. Id. Commerce then looked at data from the Tire and Rim Association
(“TRA”) and the ITC’s injury determinations to determine the general purpose of the tires.
Commerce found that tires with R-1 and R-4 type treads were used for farming, light industrial
service, and highway mowing. Id. at 7. Because the tires in question had R-1 and R-4 type
treads, Commerce determined that such tires were not excluded from the scope of the order. Id.at 7–8. Commerce found it unnecessary to conduct a formal proceeding to consider the
additional factors contained in 19 C.F.R. § 351.225(k)(2). Id. at 5.3 For its part, OTR Wheel
does not argue that its tires fall outside the general scope of the orders, merely that they are
within an exclusion for turf, lawn, and garden applications.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2). Commerce’s final
scope determination is upheld unless it is found “to be unsupported by substantial evidence on
the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
In determining if a product is within the scope of an order, “‘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)). “[B]ecause the descriptions of subject
merchandise contained in [Commerce’s] determinations must be written in general terms,” it is
3
Although Bridgestone participated in the proceedings before Commerce, Bridgestone
has chosen not to file briefs, appear at oral argument, or otherwise participate in the proceedings
before this court.
Court No. 11-00166 Page 6
often difficult to determine “whether a particular product is included within the scope of an
antidumping or countervailing duty order.” 19 C.F.R. § 351.225(a); see also Duferco Steel, 296
F.3d at 1096.
OTR Wheel argues that if the exclusionary language in the orders does not clearly
exclude its merchandise, it is at least ambiguous as to whether it excludes OTR Wheel’s Trac
Master and Traction Master tires from the scope.4 It argues further that Commerce improperly
determined that the tires were not excluded based on industry descriptions of tires, which
Commerce found dispositive under 19 C.F.R. § 351.225(k)(1). Pl.’s Rule 56.2 Mot. for J. on the
Agency R. (“Pl.’s Mot.”) 11. Specifically, OTR Wheel argues that Commerce erred because it
gave improper weight to tread type, failed to consider tire size, and took statements made in the
ITC injury determinations out of context. Id. at 11–14.
Pursuant to 19 C.F.R. § 351.225(d),5 “in considering whether a particular product
is included within the scope of an order or a suspended investigation, [Commerce] will take into
account . . . [t]he descriptions of the merchandise contained in the petition, the initial
4
The Government contends that although the plain scope language itself is not
dispositive, when understood in the context of the controlling documents it becomes clear that
the merchandise is not excluded.
5
Section 351.225(d) states that:
If the Secretary can determine, based solely upon the application and the descriptions of
the merchandise referred to in paragraph (k)(1) of this section, whether a product is
included within the scope of an order or a suspended investigation, the Secretary will
issue a final ruling as to whether the product is included within the order or suspended
investigation.
19 C.F.R. § 351.225(d).
Court No. 11-00166 Page 7
investigation, and the determinations of [Commerce] (including prior scope determinations) and
the [ITC].” 19 C.F.R. § 351.225(k)(1). Only “[w]hen the above criteria are 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.” 19 C.F.R. § 351.225(k)(2).
In its Final Scope Ruling, Commerce determined that the record evidence
demonstrated that OTR Wheel’s Trac Master and Traction Master tires were not specifically
designed for turf, lawn, and garden applications because of the tread types of the tires. Final
Scope Ruling at 7. All OTR Wheel tires at issue have R-1 and R-4 type treads.6 Commerce
reviewed the “TRA’s 2011 Yearbook regarding agricultural and industrial tires, and lawn and
garden tires, and found no instance where the TRA designated R-1 and R-4 [tread type] tires for
service for lawn and garden applications.” Id. After noting that the orders covered tires ranging
from eight to fifty-four inches in rim diameter and that the tires at issue were from eight to
twelve inches in rim diameter, Commerce turned to the ITC’s Preliminary Injury Determination
Pricing Data, which referenced Hi-Traction Lug R-1 tread type tires stating:
R-1 tires are identified as:
. . . a typical farm tractor rear wheel having a regular depth ‘lug-type’ R-1 tread
used for general farming, as defined by the Tire Rim Association ‘TRA.’ A farm
tractor tire of this nature would typically have a herringbone (criss-cross) tread
6
OTR Wheel’s tires were classified under HTSUS 4011.61.0000: “Other, having a
‘herring-bone’ or similar tread: Of a kind used on agricultural or forestry vehicles and
machines.” This subheading is mentioned in the orders. OTR Wheel proposed HTSUS
4011.69.00: “New pneumatic tires, of rubber: Other, having a ‘herring-bone’ or similar tread:
Other.” This subheading is also mentioned in the orders.
Court No. 11-00166 Page 8
design of medium depth. The tread types for rear wheels of agricultural tractors
are variable by the industry as ‘lug’ or ‘bar tread.’ The ‘bar tread’ is a lug tread
usually running at an approximate 23 degree angle around the tire [sic] directional
circumference which helps power the equipment through the soil.
Final Scope Ruling at 7 (quoting Certain Off-the-Road Tires From China, USITC Pub. No. 3943,
Inv. Nos. 701-TA-448, 731-TA-117 (Aug. 2007) at V-3, available at
http://www.usitc.gov/publications/701_731/pub3943.pdf (last visited June 19, 2012)
(“Preliminary Injury Determination”)).7 As to ITC’s statements about Industrial Tractor Lug R-
4 tread type tires in ITC’s pricing data Commerce noted:
With respect to R-4 tire types, the ITC stated:
An R-4 herringbone-type lug tread has an intermediate tread depth. Tires of this
type are commonly found on the rear wheel of ‘backhoe loaders’ which, for
example, may be used in a stationary, braced position to dig holes and trenches
with the backhoe; for example, to tie into an underground water main or power
supply in light construction areas. The front blade attachment may be used to
scoop up and lift dirt. TRA recommends this type tire for light industrial service
and highway mowing.
Final Scope Ruling at 7 (quoting Preliminary Injury Determination at V-3). OTR Wheel states
that “R-4 tires are traditionally, but not universally, designed for use on tractors, light industrial
equipment or on vehicles with highway mowing capabilities,” Pl.’s Mot. 3–4, 17, but Commerce
discounted OTR Wheel’s evidence that its products are advertised for use on lawn and garden
7
Commerce in the Final Scope Ruling claims that the Preliminary Injury Determination
was “unchanged in final determination.” Final Scope Ruling at 7 n.38. This is incorrect.
Although the Final Injury Determination references some of the same types of tires, the Final
Injury Determination does not contain the two footnotes explaining the use of the R-1 and R-4
tread type tires referenced there, upon which Commerce relied in its Final Scope Ruling. See
Certain Off-The-Road Tires From China, USITC Pub. No. 4031, Inv. Nos. 701-TA-448, 731-
TA-1117 (Aug. 2008) at V-4, available at
http://www.usitc.gov/publications/701_731/pub4031.pdf (last visited June 19, 2012) (“Final
Injury Determination”).
Court No. 11-00166 Page 9
vehicles as relevant to end-use, not design.8 The petition was not included in the record before
Commerce or the record before this court. Commerce did not provide an analysis of descriptions
of merchandise in the petition9 or of other statements in the determinations of the Secretary or
the ITC.10
“If the determination can be made based on section (k)(1), a scope ruling will
issue without a full evaluation of the criteria in (k)(2).” Tak Fat Trading Co. v. United States,
396 F.3d 1378, 1382 (Fed. Cir. 2005). 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 definitively answer the scope question.” Sango Int’l L.P. v. United States, 484
F.3d 1371, 1379 (Fed. Cir. 2007) (internal quotation marks omitted). “[A]ntidumping and
countervailing duty orders are specific to a particular kind or class of merchandise and, therefore,
unless otherwise specified, they must necessarily be interpreted in the context of the industry in
which the merchandise at issue is manufactured, bought and sold.” Arcelormittal Stainless Belg.
8
As the Government concedes, evidence of end-use is relevant to the general inquiry into
what the product is designed for. Ultimate use is to be considered under 19 C.F.R.
§ 351.225(k)(2). End-use, however, is not dispositive unless scope is clearly limited by end-use.
King Supply Co., 674 F.3d at 1348–49 (finding that when Commerce intends to impose an
end-use exception it uses the terms “only” or “solely”).
9
Additionally, no party contends that the petition contains information defining the
exclusion clause in the order. The court notes that 19 C.F.R. § 351.225(k)(1) requires
Commerce to consider the petition. Here, Commerce made no reference to the petition in its
Final Scope Ruling, except for a formulaic mention of it.
10
The court also notes that in a limited inquiry under 19 C.F.R. § 351.225(k)(1)
Commerce may not rely on Bridgestone’s ex-petition comments regarding usage of R-1 and R-4
tread type tires. See Def.’s Resp. to Pl.’s Rule 56.2 Mot. for J. Upon the Admin. R. and App.
(“Def.’s Resp.”) at 13. In such a limited inquiry Commerce may decline to review newly
submitted advertising materials, such as that of OTR Wheel.
Court No. 11-00166 Page 10
N.V. v. United States, Slip Op. 11-82, 2011 WL 2713872, at *1 (CIT July 12, 2011) (finding that
“4.75 mm” is not one definite measurement because, in the context of the industry, purchasers
routinely accept variance in measurement).11 Because the exclusionary provision of the orders
does not unambiguously define “tires of a kind designed for use on . . . vehicles for turf, lawn
and garden . . . applications,” AD Order, 73 Fed. Reg. at 51,625, Commerce relied on external
documents to try to determine if OTR Wheel products were excluded, but it did not limit itself to
the documents listed in 19 C.F.R. § 351.225(k)(1). Neither did Commerce formally reach the 19
C.F.R. § 351.225(k)(2) factors. In any case, the documents Commerce cited do not provide
substantial evidence for its scope determination.
Both parties rely on the TRA 2011 Yearbook, yet it is unclear what it says about
industry understanding of the tires at issue. OTR Wheel identifies evidence in the TRA 2011
Yearbook as an indication that “Trac Master and Traction Master tires are tires of a kind
designed for use on vehicles with turf, lawn and garden applications.” Pl.’s Mot. at 11 (internal
quotation marks omitted). OTR Wheel alleges that its tires fall within the size of “Lawn and
Garden” tires in TRA 2011 Yearbook Section 6 (“Industrial Section”) and are smaller than some
of the tires in TRA 2011 Yearbook Section 5 (“Agricultural Section”). Id. at 11 (citing Pl.’s
App. Ex. E at 6-24–6-31). OTR Wheel contends that Commerce “inexplicably disregarded or
ignored” this evidence, and “accord[ed] disproportionate weight to the fact that Plaintiff’s tires
happen to share a common ‘R-1’and ‘R-4’ tread type with some of the tires covered by the”
11
The Government relies on this case to expand its ability to look beyond (k)(1) criteria
or to avoid formal proceedings, but it is one thing to look at accepted industry understandings of
particular terms used in an order. It is another matter to look at industry publications to
determine if particular products fit within undefined terms.
Court No. 11-00166 Page 11
orders. Pl.’s Mot. at 11, 13, 16–18. The Industrial Section of the TRA 2011 Yearbook contains
a sub-section defining “Tires for Utility Vehicles and Lawn and Garden Tractors.” All of OTR
Wheel’s tires fall within the tire size designations of this section,12 but the sub-section does not
specify whether tires under this section contain either an R-1 or R-4 type tread. Pl.’s App. Ex. E,
at 6-24–27.
The Agricultural Section of the TRA 2011 Yearbook does not contain a sub-
section on lawn and garden tires and, unlike the Industrial Section, which does not address tire
tread type, lists R-1 or R-4 tread type tires as for service on “agricultural tractor[s],” combine
harvester[s],” “agricultural high clearance sprayer[s],” and “industrial tractor[s].” Pl.’s App. Ex.
E, at 5-01. Although the TRA 2011 Yearbook might support a conclusion that some tires
containing R-1 and R-4 tread types have been designed for use on other than turf, lawn and
garden vehicles, the Yearbook also provides some evidence that tires of the size (and possibly
the tread type) created by OTR Wheel are designed for use on turf, lawn, and garden vehicles.
Taken as a whole and without further context, the TRA 2011 Yearbook does not provide
substantial support for a scope decision as to OTR Wheel’s tires.
OTR Wheel contends that “Commerce’s reference to the ITC Final [Injury
Determination] is misleading because that particular ITC reference to tread types was taken
12
OTR Wheel alleges that all its tires fall within the tire size designations of this section.
OTR Wheel’s tires range from 16 inches (nominal overall diameter) by 7.50 inches (nominal
section width) to 26 inches by 12.00 inches. Pl.’s Mot. at 11. Tires under the “Utility Vehicles
and Lawn and Garden Tractors” sub-section range from 11 inches by 4.00 inches to 27 inches by
12 inches. Pl.’s App. Ex. E, at 6-24–31. Thus, OTR Wheel’s tires all fall within the tire size
designations of the “Tires for Utility Vehicles and Lawn and Garden Tractors” section.
Court No. 11-00166 Page 12
entirely out of context.”13 Pl.’s Mot. at 14. OTR Wheel asserts that the ITC’s discussion focused
on the pricing of in-scope product categories to the exclusion of product categories excluded
from the scope. Pl.’s Mot. at 14–15. Commerce counters that the ITC references are merely
descriptions of R-1 and R-4 tread type tires generally and that such definitions were not limited
to certain R-1 and R-4 tread type tires included within the scope of the orders. Def.’s Resp. at
17.
Preliminarily, Commerce has not explained if the absence of the explanatory
footnotes regarding R-1 and R-4 tread type tires from the Final Injury Determination has any
significance. Next, the Preliminary Injury Determination focuses on “Hi-Traction Lug R-1” and
“Industrial Tractor Lug R-4” tires of certain sizes. Preliminary Injury Determination at V-3.
The referenced “Industrial Tractor Lug R-4" size tire does not seem consistent with the
dimensions of OTR Wheel’s tires. That is, the descriptions of these tires seem applicable to tires
of specific usage, size, and tread type, rather than generally fitting to all R-1 and R-4 tread type
tires. Thus, the materials cited from ITC’s injury investigation fail to provide useful evidence
that all R-1 and R-4 tread type tires of a size imported by OTR Wheel are not excluded from the
scope of the orders by the turf, lawn, and garden exception.14
13
The ITC Final Injury Determination at V-4 lists some specific R-1 and R-4 tires,
without definition. As noted by OTR Wheel, these lists are in the pricing section of the Final
Injury Determination, as they were in the Preliminary. It is unclear what the ITC determinations
add to the inquiry.
14
Commerce argues that OTR Wheel “has not provided information to substantiate that
claim [that OTR Wheel’s Trac Master and Traction Master tires are specifically designed for use
on vehicles with turf, lawn, and garden applications] (e.g., designs, schematics, internal
memoranda, etc.).” Final Scope Ruling at 8; see Def.’s Resp. at 14. Such documents are
(continued...)
Court No. 11-00166 Page 13
It is not enough that OTR Wheel’s tires are agricultural or industrial tires
generally within the scope of the order: OTR Wheel’s tires must not be designed for use on turf,
lawn, and garden vehicles in order to be included. Although evidence cited by Commerce may
indicate that some tires containing R-1 and R-4 tread types are designed for general agricultural
and industrial use, Commerce’s evidence does not indicate that other R-1 and R-4 tread type tires
are not designed more specifically for use on turf, lawn, and garden vehicles. Commerce’s
determination lacks substantial evidence that all tires with R-1 and R-4 tread types are included
within the scope of the order. The sources used by Commerce under its purported (k)(1) analysis
are not “‘controlling’ of the scope inquiry in the sense that they definitively answer the scope
question.” Sango Int’l, 484 F.3d at 1379. The industry standards and ITC injury investigation
materials relied upon by Commerce do not provide substantial support for determining whether
tires of this particular size and tread type are excluded as turf, lawn, or garden tires.15 It seems
quite unlikely that Commerce can confine itself to a limited § 351.225(k)(1) analysis here and
reach a supported conclusion for the question of whether Plaintiff’s products are designed for use
in vehicles for turf, lawn, or garden applications. What are turf, lawn, and garden applications?
How does the industry view tires that are relatively small, but have somewhat aggressive treads?
14
(...continued)
typically evidence of the physical characteristics of the product, which are considered by
Commerce as part of its formal 19 C.F.R. § 351.225(k)(2) analysis. Normally, Commerce
cannot consider these types of materials under a (k)(1) analysis, no matter who submits them.
The issue here is whether a full inquiry should be undertaken.
15
As the documents Commerce relied on do not clarify scope, we need not analyze all the
documents that Commerce may consider at the (k)(1) stage in order to determine if the materials
Commerce did consider were somehow incorporated into permitted documents.
Court No. 11-00166 Page 14
These seem to be the types of questions that require a more reaching (k)(2) analysis. Thus,
unless there is some dispositive feature of the petition and prior determinations that were
overlooked by Commerce, it shall proceed with a full inquiry.16
CONCLUSION
Although OTR Wheel has asked this court to “remand this matter to Commerce
with instructions to exclude Plaintiff’s ‘Trac Master’ and ‘Traction Master’ tires from the scope
of the subject Tires Orders,” Pl.’s Mot. 24, Commerce has not yet properly completed its
analysis under 19 C.F.R. § 351.225(k). The court hereby remands the matter to Commerce for
further evaluation pursuant to the procedures set forth in 19 C.F.R. § 351.225(k).
/s/ Jane A. Restani
Jane A. Restani
Judge
Dated: This 27th day of June, 2012.
New York, New York.
16
The Government contends that OTR Wheel has not exhausted its administrative
remedies as to § 351.225(k)(2) because it initially contended that either the plain scope language
or the § 351.225(k)(1) materials were dispositive of the issue in its favor. If Commerce’s
conclusion, which is properly before this court, is not supported by substantial evidence, the
Government may not prevail. That OTR Wheel properly challenged Commerce’s
§ 351.225(k)(1) analysis is sufficient. If Commerce cannot make a proper (k)(1) decision, it
must proceed with a (k)(2) analysis and permit the parties to submit the full range of evidence.
What it may not do is reject (k)(2) evidence from one party and accept it from another.