Meridian Products, LLC v. United States , 37 F. Supp. 3d 1342 ( 2014 )

Slip Op. 14 - 158
UNITED STATES COURT OF INTERNATIONAL TRADE
:
MERIDIAN PRODUCTS, LLC, :
:
Plaintiff, :
:
v. : Before: R. Kenton Musgrave, Senior Judge
: Court No. 13-00018
UNITED STATES, :
:
Defendant. :
:
:
OPINION
[Sustaining second results of remand on scope of antidumping and countervailing duty orders on
aluminum extrusions from the People’s Republic of China as to “trim kits”.]
Dated: December 29, 2014
Daniel Cannistra and Richard P. Massony, Crowell & Moring LLP, of Washington DC, for
the plaintiff.
Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington DC, for the defendant. 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. Forton, Attorney, Office of the Chief Counsel for
Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington DC.
Musgrave, Senior Judge: This opinion addresses the Final Results of
Redetermination Pursuant to Court Remand, Meridian Products, LLC v. United States, Court No.
13-0018, PDoc 29 (June 17, 2014) (“Second Remand”) of the International Trade Administration
of the U.S. Department of Commerce (“Commerce”) pursuant to Meridian Products, LLC v. United
States, 38 CIT ___, Slip Op. 14-32 (Mar. 26, 2014) (“Meridian II”). The plaintiff, Meridian
Products LLC, a U.S. importer of refrigerator/freezer trim kits, moves for a third remand of this
Court No. 13-00018 Page 2
action challenging various aspects of the Second Remand. Meridian’s Motion for Remand and
accompanying Cmts in Resp. to Second Redetermination Upon Remand, PDoc 35 (July 15, 2014)
(“Pl’s Mot.”). The defendant asks that the court sustain the Second Remand results, claiming that
it complied with the court’s order and that its determination is both supported by substantial
evidence and is in accordance with law. Def’s Resp. to Cmts Regarding the Second Remand
Redetermination, PDoc 38 (Aug. 8, 2014) (“Def’s Resp.”).
Upon review of the Second Remand results, the court finds that the redetermination
complies with the judicial orders in Meridian II and sustains the results.
I. Background
Familiarity with the facts of this case as provided in the court’s prior opinions is
presumed, but background is supplemented herein for ease of understanding. See Meridian II; see
also Meridian Products, LLC v. United States, 37 CIT ___, Slip Op. 13-75 (June 17, 2013)
(“Meridian I”) . In Meridian I, the court remanded to Commerce, directing it to reconsider if the
plaintiff’s trim kits fell within finished goods scope exclusion of the antidumping and countervailing
duty orders on aluminum extrusions from the People’s Republic of China1 as applied in the Side
Mount Valve Controls Scope Ruling, the Drapery Rail Kits Remand, and the Auto Parts Remand.2
1
See Aluminum Extrusions from the People’s Republic of China: Antidumping Duty Order,
76 Fed. Reg. 30650 (May 26, 2011) (“AD Order”) & Aluminum Extrusions from the People’s
Republic of China: Countervailing Duty Order, 76 Fed. Reg. 30653 (May 26, 2011) (“CVD Order”)
(collectively, “Orders”).
2
See Meridian I at 4; see also Memorandum to Christian Marsh, Deputy Assistant Secretary
for Antidumping and Countervailing Duty Operations, “Initiation and Preliminary Scope Ruling on
Side Mount Valve Controls” (Sept. 24, 2012), aff’d, Final Scope Ruling on Side Mount Valve
Controls (Oct. 26, 2012) (“Side Mount Valve Controls Scope Ruling”); Final Results of
(continued...)
Court No. 13-00018 Page 3
In Meridian II, the court remanded to Commerce a second time, directing it to “proceed from a clean
slate on the question of whether the [t]rim [k]its fall within the scope of the Orders, fully taking into
account the prior relevant scope rulings”, including evaluating the trim kits under the finished goods
exclusion methodology in the Drapery Rail Kits Remand and Solar Panel Mounting Ruling.3
The relevant scope language, which Commerce must first examine in any scope
determination to determine whether merchandise falls within the scope of an antidumping duty
order,4 is as follows:
The scope also excludes [1] 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. The scope also excludes [2]
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
2
(...continued)
Redetermination Pursuant to Court Remand, Rowley Co. v. United States, Ct. No. 12-00055 (Feb.
28, 2013) (“Drapery Rail Kits Remand”); Final Results of Redetermination Pursuant to Court
Remand Aluminum Extrusions from the People’s Republic of China, Valeo, Inc., Valeo Engine
Cooling Inc., and Valeo Control Corp. v. United States, Ct. No. 12-00381 (Feb. 13, 2013) (“Auto
Parts Remand”).
3
See Meridian II at 20; see also id. at 3, referencing Memorandum to Christian Marsh,
“Final Scope Ruling on Clenergy (Xiamen) Technology’s Solar Panel Mounting Systems” (Oct. 31,
2012) (“Solar Panel Mounting Ruling”) and Drapery Rail Kits Remand.
4
See Mid Continent Nail Corp. v. United States, 725 F.3d 1295, 1302 (Fed. Cir. 2013)
(internal citations omitted); see also Walgreen Co. of Deerfield, IL v. United States, 620 F.3d 1350,
1357 (Fed. Cir. 2010) (“it is the language of Commerce’s final order that defines the scope of the
order albeit ‘with the aid of the antidumping petition, the factual findings and legal conclusions
adduced from the administrative investigations, and the preliminary order’”) (quoting Duferco Steel,
Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002)).
Court No. 13-00018 Page 4
therefore excluded from the scope of the [Orders] merely by including fasteners such
as screws, bolts, etc. in the packaging with an aluminum extrusion product.
Orders, 76 Fed. Reg. at 30651 and 30654 (italics and bracketing added).
In the Second Remand, Commerce again determined that the plaintiff’s trim kits fell
within the scope of the Orders as subject aluminum extrusions identified by reference to their end
use: as “frames” for major appliances.5 Commere first determined that the trim kits did not qualify
for the “finished merchandise” exclusion. It found that the kits consisted entirely of aluminum
extrusions, fasteners, and extraneous materials. Based on the plaintiff’s own description of its trim
kits as consisting of a package of finished parts which, when assembled, will make up a customized
frame around a single freezer unit or single refrigerator unit, Commerce found that the kits were
included with the scope language of the Orders and did not meet the “finished merchandise”
exclusion because they entered the U.S. unassembled. See Second Remand at 5-6, referencing
“Aluminum Extrusions from the People’s Republic of China: Request for Scope Ruling for
Refrigerator/Freezer Trim Kits” (Nov. 13, 2012) (“Trim Kits Scope Ruling Request”) at 1-2; see
also id. at 12-14, 22-24.
Commerce next determined that the plaintiff’s trim kits did not qualify as an excluded
“finished goods kit” on the ground that, again, they consisted entirely of aluminum extrusions,
fasteners, and extraneous materials and fell within the express limitation to the exclusion. Id. at 12-
14, 23-25. Commerce distinguished the trim kits from the goods in the Drapery Rail Kits Remand
5
See Second Remand at 2, referencing Draft Results of Redetermination Pursuant to Court
Remand, Meridian Products, LLC v. United States, Court No. 13-0018, Slip Op. 14-32, PDoc 40-1
(May 14, 2014) (“Second Remand Draft”) at 11-19; see also id. at 6, referencing Memorandum to
Christian Marsh, “Final Scope Ruling on Refrigerator/Freezer Trim Kits” (Dec. 17, 2012) (“Trim
Kits Scope Ruling”) at 10, quoting the scope of the Orders.
Court No. 13-00018 Page 5
and in the Solar Panel Mounting Ruling by first determining that unlike the trim kits, the goods in
the Drapery Rail Kits Remand and Solar Panel Mounting Ruling were eligible for the “finished
goods kit” exclusion because those goods “do not consist entirely of aluminum extrusions” and did
not fall within the “limitation” to the exclusion.6 Pursuant to the court’s instruction, Commerce then
analyzed the trim kits ability to “display” or “work with” an appliance. See Second Remand at 15,
referencing Meridian II at 14; see also id. at 25-27, referencing Meridian II at 16. Commerce
determined that the trim kits “merely frame the space into which the refrigerator is placed” and were
therefore unlike the goods in those rulings, because in those rulings the subject goods were designed
to “display” or “work with” a missing non-essential interchangeable component by the functional
means of holding the component. Second Remand at 15-20, 25-26.
The plaintiff filed with the court its comments in response to Commerce’s Second
Remand objecting to the findings of the Second Remand. In its filing, the plaintiff claims in the
Second Remand Commerce did not comply with the court’s order because it did not sufficiently
explain why the trim kits do not meet the criteria for the finished goods exclusion and did not
distinguish between goods that “incorporate” and goods that “display”. Pl’s Mot. at 1.
The defendant responds that it complied with the court’s remand order, maintaining
that its finding that the trim kits consist solely of subject aluminum extrusions, fasteners, and
extraneous materials and do not satisfy the two finished goods exclusions is supported by the scope
6
See Second Remand at 15, referencing Second Remand Draft at 14, citing Solar Panel
Mounting Ruling at 6-7 (summarizing in the Second Remand that “the products at issue were
comprised of non-subject aluminum and steel products”) and Drapery Rail Kits Remand at 4
(summarizing in the Second Remand that “the products at issue included decorative finials and
brackets that were made of steel”); see also id. at 24-25.
Court No. 13-00018 Page 6
language and prior scope rulings. Def’s Resp. at 1, 10-19, 22. The defendant further argues it
provided a reasonable explanation of why the Drapery Rail Kits Remand and Solar Panel Mounting
Ruling did not apply to the plaintiff’s trim kits that is supported by substantial evidence. Id. at 19-
22.
II. Discussion
1. Exhaustion of Administrative Remedies
At the outset, the defendant claims that the plaintiff raised certain arguments in its
comments before the court with respect to both the “finished goods kit” and “finished merchandise”
exclusions7 that the plaintiff did not raise in its draft comments on the Second Remand, and that the
plaintiff has accordingly failed to exhaust its administrative remedies concerning those issues. See
Def’s Resp. at 13-15, referencing Pl’s Mot. at 4; see also id. at 17, referencing Pl’s Mot. at 5; id. at
17-18, referencing Pl’s Mot. at 6-10. Specifically, the defendant contends the following are
precluded by failure to exhaust: the argument opposing the determination that the trim kits were not
eligible for the “finished goods kit” exclusion because Commerce found that they consist solely of
aluminum extrusions, fasteners, and extraneous materials;8 the argument that Commerce erroneously
7
The defendant correctly points out that the “[O]rders identify the finished goods kit
exclusion and the finished merchandise exclusion as two separate exclusions”. Def’s Resp. at 12
fn.7.
8
See Id. at 13-15, referencing Second Remand at 24 (which noted that “Meridian does not
address this first criterion that [Commerce] considers in its determination as to whether a product
satisfies the exclusion for a finished goods kit, and does not appear to contest [Commerce]’s
interpretation, as discussed in the Geodesic Domes Scope Ruling and elsewhere, that, in order to
qualify for the finished goods kit exclusion, the kit must consist of merchandise other than aluminum
extrusions, fasteners and extraneous materials”) and Cmts on the Draft Results of Redetermination
Pursuant to the Remand Order of the U.S. Court of International Trade in Meridian Products, LLC
(continued...)
Court No. 13-00018 Page 7
applied an “aluminum content limitation” with the effect of disqualifying goods consisting entirely
of aluminum extrusions from ever satisfying either the “finished merchandise” or “finished goods
kit” exclusions;9 and the argument that Commerce is inconsistent in the test(s) it applies in order to
determine if the non-aluminum components of a good qualify it for the exclusions. Def’s Resp. at
17, referencing Pl’s Mot. at 5, citing Memorandum to Christian Marsh, “Final Scope Ruling on
Titan’s Scaffolding Planks” (July 8, 2014) (“Scaffolding Planks Scope Ruling”).
The court tends to take a strict approach to the doctrine of administrative exhaustion
in accordance with its statutory mandate. See SeAH Steel Corp. v. United States, 35 CIT ___, 764
F. Supp. 2d 1322, 1325 (2011), referencing Jiaxing Brother Fastener Co., Ltd. v. United States, 34
CIT ___, 751 F. Supp. 2d 1345, 1355-57 (2010); see also 28 U.S.C. §2637(d) (stating that in trade
cases the court “shall, where appropriate, require the exhaustion of administrative remedies”).
Exhaustion is generally appropriate in antidumping proceedings as it protects the administrative
agency’s authority and promotes judicial efficiency by permitting the agency to apply its expertise,
correct its own administrative mistakes, and create an adequate record for judicial review. See
Woodford v. Ngo, 548 U.S. 81, 88-89 (2006) (discussing the “two main purposes” of exhaustion of
administrative remedies); see also Sandvik Steel Co. v. United States, 164 F.3d 596, 599-600 (Fed.
8
(...continued)
v. United States, Court No. 13-00018, Slip Op. 14-32, PDoc 40-2 (May 19, 2014) (“Pl’s Cmts on
Second Remand Draft”); see also Pl’s Mot. at 3-4.
9
See Def’s Resp. at 17-19; see also Pl’s Mot. at 4-10 (arguing its trim kits consist of more
than merely “aluminum extrusions” and claiming that Commerce has erroneously created a
“aluminum content” limitation in its Second Remand not supported by the scope language, previous
rulings, or prior published guidance, by concluding that goods which consist entirely of aluminum
extrusions may not be excluded from the scope of the Orders as “finished merchandise” or a
“finished goods kit”).
Court No. 13-00018 Page 8
Cir. 1998) (internal citations omitted); Ta Chen Stainless Steel Pipe, Ltd. v. United States, 28 CIT
627, 644, 342 F. Supp. 2d 1191, 1206 (2004) (internal citations omitted).
In the Second Remand Draft, Commerce defined both the “finished merchandise” and
“finished goods kit” exclusions to the Orders. Citing previous scope rulings, Commerce discussed
its finding that a good that consists entirely of subject aluminum extrusions, fasteners, and
extraneous materials will not qualify for either exclusion10 and then, critically, Commerce found that
the trim kits consist entirely of aluminum extrusions “of various shapes and forms” within the scope
definition as well as fasteners and extraneous materials and that they did not qualify for either of the
two exclusions. Second Remand Draft at 13-14, referencing Trim Kits Scope Ruling Request at 5-6.
Although the plaintiff had the opportunity in its comments before Commerce to
challenge these factual bases for Commerce’s determinations and develop the administrative record,
it did not do so with sufficient specificity at that level to enable proper judicial review of the
arguments it now here considers relevant.11 See Dorbest Ltd. v. United States, 604 F.3d 1363, 1375
10
Second Remand Draft at 11-14 (stating that, consistent with the scope of the Orders, the
Geodesic Domes Scope Ruling and the Cutting and Marking Edges Scope Ruling determined that,
“a product may not consist entirely of aluminum extrusions and be excluded as a finished goods kit
or finished merchandise”), referencing Memorandum to Christian Marsh, “Final Scope Ruling on
J.A. Hancock Co., Inc.’s Geodesic Structures” (July 17, 2012) (“Geodesic Domes Scope Ruling”)
and Memorandum to Christopher Marsh, “Aluminum Extrusions from the People’s Republic of
China: Final Scope Ruling on Cutting and Marking Edges” (Nov. 13, 2012) (“Cutting and Marking
Edges Scope Ruling”) and Orders, 76 Fed. Reg. at 30651.
11
The plaintiff made three arguments in its comments on the Second Remand Draft before
Commerce: First, it contended that the scope definition in the Petition is clear, and that the subject
merchandise intended to be included in the scope of the Orders is parts of door frames as opposed
to excluded finished door frames, and that the trim kits are akin to final finished door frames. Pl’s
Cmts on Second Remand Draft at 1-2, referencing Petitions for the Imposition of Antidumping and
Countervailing duties: Aluminum Extrusions from the People’s Republic of China (Mar. 31, 2010)
(continued...)
Court No. 13-00018 Page 9
(Fed. Cir. 2010) (“Commerce regulations require the presentation of all issues and arguments in a
party’s administrative case brief”), citing 19 C.F.R. §351.309(c)(2)) (“The case brief must present
all arguments that continue in the submitter’s view to be relevant to the Secretary’s final
determination.”); see also Aluminum Extrusions Fair Trade Comm. v. United States, 37 CIT ___,
___, 938 F. Supp. 2d 1337, 1342 (2013) (time to object to “new discretionary policy regarding an
interpretation of a scope exclusion” is at preliminary determination). The plaintiff did not continue
to press in its comments on the Second Remand Draft those arguments it had raised during the First
Remand relating to its claim that its trim kits consisted of more than aluminum extrusions, fasteners,
and extraneous materials,12 nor, apparently, did it incorporate arguments by reference. For the court
11
(...continued)
(“Petition”) at 4. Second, it averred that Commerce did not sufficiently explain why the trim kits
are not intended to “display” an appliance simply because they do not physically hold an appliance
in place. Third, it argued that Commerce could not have arrived at its conclusion that the trim kits
do not “display” a customizable appliance based on the application of the scope language and the
descriptions of the merchandise alone without undertaking an analysis pursuant to the criteria listed
in 19 U.S.C. §351.225(k)(2) to support that finding, which Commerce expressly stated it did not do.
Id. at 2-4.
12
These arguments included: that Commerce mistakenly characterized the non-aluminum
components of its trim kits as an “exception to the finished goods exclusion” but that the addition
of fasteners is not an exception but rather “a sensible clarification that the addition of fasteners will
not automatically qualify an aluminum extrusion product as a finished good”; that many of its non-
aluminum extrusion components serve the same purpose as the non-aluminum extrusion components
at issue in the Drapery Rail Kits Remand; that Commerce did not address aluminum content in the
Drapery Rail Kits Remand but still found that the products were finished goods kits because the
products were intended to be customizable; that the trim kits are “comprised of more non-aluminum
componentry than drapery kits”; that the content of aluminum extrusions should be irrelevant to the
issue of whether the products are finished goods; that products which could consist predominantly,
or entirely, of aluminum extrusions and fasteners which are listed in the Petition were excluded from
the Orders as finished goods kits; that the excluded goods in the Auto Parts Remand consist entirely
of aluminum extrusions; that Commerce expanded its “aluminum-only” exception to encompass
products comprised of both aluminum extrusions and non-aluminum extrusion components; that the
(continued...)
Court No. 13-00018 Page 10
to address these issues properly the plaintiff needed to raise them in its arguments first before
Commerce, in order to assist Commerce in compiling an administrative record that is adequate for
judicial review. See McCarthy v. Madigan, 503 U.S. 140, 145 (1992) (“exhaustion of the
administrative procedure may produce a useful record for subsequent judicial consideration,
especially in a complex or technical [or] factual context”).
The plaintiff has not done so, and none of the apparent exceptions to exhaustion
apply. See SeAH Steel Corp., supra, 35 CIT at ___, 764 F. Supp. 2d at 1325-26 (listing the
exceptions as, “where exhaustion would be ‘a useless formality,’ intervening legal authority ‘might
have materially affected the agency’s actions,’ the issue involves ‘a pure question of law not
requiring further factual development,’ where ‘clearly applicable precedent’ should have bound the
agency, or where the party ‘had no opportunity’ to raise the issue before the agency”), referencing
Jiaxing, supra, 34 CIT at ___, 751 F. Supp. 2d at 1355-56 (internal citations omitted). Accordingly,
the court will not consider those arguments of the plaintiff’s summarized above.13
12
(...continued)
exception to the finished goods exclusion for “fasteners” and products that “otherwise do not
‘complete the kit’” are not based on the scope language, that Commerce should apply the dictionary
definition of “fasteners”; and that the plastic hinge covers and steel brackets in the trim kits are not
fasteners even if the exceptions to the finished goods exclusion were valid. Final Results of
Redetermination Pursuant to Court Remand, Meridian Products, LLC v. United States, Court No.
13-0018, Slip Op. 13-75, PDoc 17 (Aug. 15, 2013) (“First Remand”) at 16-18, referencing
“Aluminum Extrusions from the People’s Republic of China: Comment Following Remand
Regarding Refrigerator/Freezer Trim Kits” (July 1, 2013) at 6-10.
13
See Ta Chen Stainless Steel Pipe, supra, 28 CIT at 644, 342 F. Supp. 2d at 1206, quoting
JCM, Ltd. v. United States, 210 F.3d 1357, 1359 (Fed. Cir. 2000) (citing Sandvik Steel Co., supra,
164 F.3d at 599-600) (In antidumping cases “Congress has prescribed a clear, step-by-step process
for a claimant to follow, . . . the failure to do so precludes [the claimant] from obtaining review of
that issue in the Court of International Trade.”).
Court No. 13-00018 Page 11
2. “Finished Goods Kit” Exclusion
The plaintiff’s lack of exhaustion impacts the remaining arguments it raised
concerning Commerce’s determination that the trim kits did not qualify for the “finished goods kit”
exclusion. The Second Remand’s analysis clarifies that Commerce essentially interprets the
methodology applied in the Solar Panel Mounting Ruling and the Drapery Rail Kits Remand as the
latter part of a multi-step analysis it uses in examining whether the “finished goods kit” exclusion
is applicable to a given product. The first step in Commerce’s analysis is determining whether the
unassembled good under consideration overcomes the “limitation” to the “finished goods kit”
exclusion. If the good does not overcome the limitation, it is within scope; if it does, the question
is then whether the good contains all the necessary parts to fully assemble a final finished good.14
If it does contain all the necessary parts to fully assemble a final finished good and otherwise meets
the definition of a “finished goods kit”, the good is outside the scope; if it does not, the next question
the rulings address is whether the “missing” “customizable/interchangeable” component is “non-
essential” to the final finished good by determining if the good is intended to “display” or “work
14
Second Remand at 15, referencing Second Remand Draft at 14 (explaining that when
evaluating a good under the exclusion, Commerce ends its analysis if it determines a kit is comprised
entirely of aluminum extrusions, fasteners, and extraneous materials and does not therefore pass the
initial exclusionary step, but that it provided an application of the further analysis from the rulings
in the Second Remand to comply with the court’s order in Meridian II).
Court No. 13-00018 Page 12
with” the component.15 If it is, and otherwise meets the definition of a “finished goods kit”, the
product is outside scope.
Addressing that analysis in part, the plaintiff faults Commerce’s definition of
“display” as applied to the trim kits, the definition of which was applied from the Solar Panel
Mounting Ruling and the Drapery Rail Kits Remand.16 Commerce’s interpretation thereof is
15
Commerce concluded that the products expressly excluded from the scope of the Orders
and excluded in prior scope rulings (e.g., the picture frames, drapery rail kits, banner stands, and
solar panel mounting systems) “serve the functional purpose of holding a customizable/
interchangeable product in each instance” and that this functional purpose goes “beyond the
aesthetic purpose of displaying interchangeable material by virtue of proximity.” See Second
Remand at 25, referencing Second Remand Draft at 17 and Solar Panel Mounting Ruling at 9
(determining that, “like picture frames, banner stands, and backwall kits, the mounting systems are
designed to work with removable/replaceable components”); see also Second Remand at 15-16,
citing Drapery Rail Kits Remand at 8 (stating in the Second Remand that, “in the Drapery Rail Kits
Remand, the missing component was the drape which is held by the drapery rail . . . [Commerce]
found that, like those products, ‘the drapery rail kits contain all of the parts necessary to assemble
a drapery rail system, save for the decorative drapers or curtains that may be affixed at a later date,
and are designed to meet the specifications of the end customer’”).
16
The plaintiff argues that in the Second Remand Commerce has failed to comply with the
court’s remand order by not distinguishing between those goods that “incorporate” and those goods
that “display” customizable materials, that Commerce’s reasoning for defining these terms is not
coherent, that Commerce does not apply the plain meaning of the word “display” as required where
“a term with an ‘accumulated, settled meaning’ has no special meaning in antidumping law”. Pl’s
Mot. at 13-16, referencing NSK Ltd. v. United States, 115 F.3d 965, 974 (Fed. Cir. 1997) (“[w]here
Congress uses terms that have accumulated settled meaning under either equity or the common law,
a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the
established meaning of these terms”) (citing N.L.R.B. v. Amax Coal Co., 453 U.S. 322 (1981)). The
plaintiff also argues that Commerce does not support with substantial evidence its conclusion that
a good’s ability to incorporate, display, or work with customizable materials affects its ability to
qualify as a “finished goods kit”. Pl’s Mot. at 16. Furthermore, the plaintiff claims that Commerce
based its finding that the plaintiff’s trim kits are not intended to display an appliance on incorrect
facts, as the trim kits “attach to the appliance and the surrounding cabinetry”. Pl’s Mot. at 15. It
avers that Commerce could not have concluded that the trim kits are not intended to “display or
work with a customizable appliance” and that they “do not hold the appliance like a mounting
system holds a solar panel, or a drapery rail holds a drape” without evaluating the physical
(continued...)
Court No. 13-00018 Page 13
normally entitled to “significant deference”, Global Commodity Grp. LLC v. United States, 709 F.3d
1134, 1138 (Fed. Cir. 2013) (internal citations omitted) (granting Commerce “significant deference”
to interpret the scope of an antidumping order), however the court cannot reach the merits of the
contention in any event because the plaintiff’s arguments over “display” only arise in the context
of the last step of Commerce’s analysis. Further consideration here of that aspect is precluded due
to the plaintiff’s failure to press the contention with greater specificity at the administrative level,
i.e., exhaustion.
In clarifying its methodology, Commerce distinguished the trim kits from the
products in the aforementioned rulings by finding that the products in the rulings met the initial
requirement for the “finished goods kit” exclusion and that the trim kits did not. Second Remand
at 24-25. In order to analyze whether the trim kits are intended to “display” (or for that matter
“work with”) a “non-essential” “customizable/interchangeable” component, Commerce concluded
in this instance that it only needed to rely on the plaintiff’s own description of its trim kits in its
scope ruling request rather than engage in a full “(k)(2)” factors analysis.17 Commenting on the
Second Remand Draft, the plaintiff only disagreed with Commerce’s finding that its “[t]rim [k]its
16
(...continued)
characteristics of the product, expectations of the purchaser, and ultimate use of the product under
the “(k)(2)” factors. Pl’s Mot. at 10-11, 14. See 19 C.F.R. §351.225(k)(2); see also supra, footnote
11.
17
As explained by the defendant, “[f]rom Meridian’s description of the product, it is clear
that the trim kits at issue do not hold the refrigerator[; r]ather, they merely frame the space into
which the refrigerator is placed.” Second Remand at 26, referencing Trim Kits Scope Ruling
Request at 1-2; see also id. at 5 and Second Remand Draft at 4-5 (noting that “[a]s described in the
Scope Request filed by Meridian, the trim kits at issue consist of three different styles of complete
aluminum trim kit packages which are utilized as an aesthetic frame around the perimeter of (though
not attached to) a major home kitchen appliance, such as a refrigerator”).
Court No. 13-00018 Page 14
are not intended to ‘display’ an appliance simply because they do not physically hold the appliance
in place” and only argued that “Commerce cannot know if [t]rim [k]its are intended to display a
customizable appliance purely based on the application and descriptions of the merchandise”
without applying the “(k)(2)” criteria, which Commerce explicitly stated it had not done. Pl’s Cmts
on the Second Remand Draft at 3.
Thus, proceeding from a “clean slate” during the Second Remand, Meridian did not
revive its earlier arguments, raised during the First Remand, with sufficient particularity to contest
Commerce’s factual distinction or distinguishment of the trim kits from the Solar Panel Mounting
Ruling and the Drapery Rail Kits Remand on the basis of the first step of the analysis, as argued by
the defendant.18 The court is left unable to further address the plaintiff’s critique of “display”,
because “display” is only applicable in the final step of Commerce’s analysis and the plaintiff did
not exhaust its administrative remedies on the finding of whether the trim kits consisted of “more
than” aluminum extrusions, fasteners, and extraneous materials. Commerce having ended its
consideration of the issue at step one, with the kits falling within the limitation to the “finished
goods kit” exclusion, and the plaintiff having failed to exhaust its remedies on the factual predicate
underpinning that consideration, the court’s review is thus constrained.
18
Commerce found that the products at issue in the Solar Panel Mounting Ruling were
comprised of “non-subject aluminum and steel products” and that the products at issue in the
Drapery Rail Kits Remand “included decorative finials and brackets that were made of steel.”
Second Remand at 15, referencing Second Remand Draft at 14, citing Solar Panel Mounting Ruling
at 6-7 and Drapery Rail Kits Remand at 4. The court need not consider whether the trim kits consist
of more than aluminum extrusions, “fasteners”, and “extraneous materials” as the plaintiff has not
pressed the argument to this extent.
Court No. 13-00018 Page 15
In distinguishing the trim kits based on this reasoning, upon which it did not rely in
the First Remand, Commerce has facially complied with the court’s orders in Meridian II. See
Meridian II at 2-3, referencing Solar Panel Mounting Ruling and Drapery Rail Kits Remand; see
also id. at 15, 17-20. There appearing to be no further challenges to Commerce’s determination that
the trim kits do not qualify as a “finished goods kit”, the Second Remand will be sustained as to the
defendant’s “finished goods kit” exclusion findings.
3. “Finished Merchandise” Exclusion
The plaintiff also advances several arguments to support its claim that its trim kits
qualify as “finished merchandise”. Here, however, the plaintiff is now pursuing the wrong path.
The plaintiff first proposes its own interpretation of the Orders and exclusion, stating that the Orders
are only intended to cover aluminum extrusions that could be “further processed into something else
after importation” and that “once an extrusion is bent, shaped, molded, assembled, etc. it is no longer
an extrusion; it has become something else”. Pl’s Mot. at 4. It claims that its trim kits should
accordingly be excluded as they are “akin to a fully finished door frame that has been so completely
and irrevocably processed that it can never become anything other than a finished frame.”19 Id. at
6. The plaintiff points to the Petition to further advance its claim that its trim kits qualify as
“finished merchandise” that are analogous to finished door frames, and it maintains that the
19
The court notes that in its filings the plaintiff used the broader term “finished goods” to
make this particular argument but the plaintiff appears to be referring to the “finished merchandise”
exclusion. See id. at 3-4 (“[E]ach trim kit is akin to a fully finished door frame that has been so
completely and irrevocably processed that it can never become anything other than a finished frame.
As such, [the trim kits] qualify as finished goods and should be excluded from the scope of the
[O]rders. . . . Alternatively, if trim kits do not qualify as finished goods, they still meet the
exclusion criteria for finished goods kits and should therefore be excluded from the scope of the
[O]rders.”) (italics and bracketing added).
Court No. 13-00018 Page 16
petitioners made a clear distinction between parts of door frames that were to be included in the
scope of the Orders, as opposed to excluded final finished door frames, and that like final finished
door frames its kits are “completely and permanently processed to the extent that they are suitable
only for their ultimate purpose at the time of importation[,] . . . are fully fabricated[,] and do not
require further cutting, punching, or other processing prior to installation”.20
While the plaintiff’s argument might be reasonable, it is Commerce, not the plaintiff,
that is tasked with interpreting the scope of the Orders, and Commerce’s interpretation is to be
sustained so long as the interpretation reasonably clarifies the scope. See, e.g., Sandvik Steel Co.,
supra, 164 F.3d at 600 (“the order’s meaning and scope are issues particularly within the expertise
of [Commerce]”). The plaintiff’s argument does not, per se, render Commerce’s interpretation
unreasonable. Further, the argument is directed towards requirements of the “finished goods kit”
exclusion and ignores the explicit language in the “finished merchandise” exclusion of the Orders
that requires full and permanent assembly of the parts for final finished products “at the time of
importation”, as well as the language of the Petition that requires a good be “imported in finished
form, i.e., fully and permanently assembled” in order for a good to qualify for that exclusion. See
Orders, 76 Fed. Reg. at 30651; see also Petition at 5; Second Remand at 22-23.
20
See Pl’s Mot. at 3-4; see also id. at 12-13, citing Petition at 4-5 (stating the requested
scope definition for the subject merchandise includes “parts of products that are assembled or
otherwise further processed after importation, including, but not limited to, window frames, door
frames, solar panels, curtain walls, or furniture” and excludes “final finished goods containing
aluminum extrusions that are imported in finished form, i.e., fully and permanently assembled, such
as finished window frames, door frames, picture frames, and solar panels. The scope also excludes
unassembled final finished goods containing aluminum extrusions, e.g., ‘kits,’ that, at the time of
importation, contain all of the necessary parts to assemble the finished good”) (plaintiff’s italics).
Court No. 13-00018 Page 17
In the Second Remand Commerce determined that the trim kits do not qualify as
“finished merchandise” first because they exist entirely of “aluminum extrusions, fasteners and
extraneous materials”, and second because they enter the U.S. unassembled. See Second Remand
at 13-14, 22-24. As discussed supra, the plaintiff has failed to exhaust its administrative remedies
concerning Commerce’s factual determination that its trim kits consist entirely of aluminum
extrusions, fasteners, and extraneous materials and do not meet one of the two proposed
requirements of the “finished merchandise” exclusion.21 Concerning the second requirement of this
exclusion, the plaintiff does not claim that its trim kits enter the U.S. assembled; rather, it argues that
defining the trim kits as an “unfinished good simply because the product is unassembled upon entry
is absolutely nonsensical” because Commerce recognizes that a “kit” is considered a finished good
if it contains all the parts required to assemble the finished good. Pl’s Mot. at 12-13. The argument
is unpersuasive, because in advancing it the plaintiff ignores that there are two separate exclusions
for finished goods and that the exclusions each have separate requirements that a good must meet
in order to qualify. The scope language expressly supports the defendant’s second requirement for
the “finished merchandise” exclusion that a good must be “fully and permanently assembled and
21
In explaining this requirement, Commerce noted that the list of products that meet this
criteria in the scope language were “finished windows with glass, doors with glass or vinyl, picture
frames with glass pane and backing material, and solar panels” and it determined that a window
frame without the glass, a door frame without the glass or vinyl door, or a picture frame without the
glass pane or backing, would not meet the exclusion criteria. It also cited Memorandum to Christian
Marsh, “Final Scope Ruling on Window Kits” (Dec. 6, 2011) (“Window Kits Scope Ruling”), and
stated that in the ruling “[c]onsistent with [the scope language], [Commerce] determined that certain
window kits were outside the scope of the Orders provided that ‘they contain at the time of
importation all of the parts, including the glass panels, necessary to assemble a finished window or
windows’”. Second Remand at 23, also referencing scope of the Orders and Trim Kits Scope Ruling
Request at 5-6.
Court No. 13-00018 Page 18
completed at the time of entry”. Orders, 76 Fed. Reg. at 30651. The Petition also supports this
requirement stating the scope excludes “final finished goods containing aluminum extrusions that
are imported in finished form, i.e., fully and permanently assembled, such as finished window
frames, door frames, picture frames, and solar panes.”22
The plaintiff is correct in stating that a good will not be considered an unfinished
good “merely because it is unassembled upon entry”, as that trait only disqualifies the good from
the “finished merchandise” exclusion while still permitting it, possibly, to qualify as a “finished
goods kit”. However, based upon the plaintiff’s own description of its trim kits being a packaged
combination of parts that contains, at the time of importation, all of the necessary components to
assemble a complete frame to surround a refrigerator or freezer, Commerce’s determination, that
even if the trim kits when assembled after importation are akin to a “finished door frame” they still
enter the U.S. as unassembled as parts and thus do not qualify for the “finished merchandise”
exclusion, was not improper. Likewise, neither was Commerce’s determination that the trim kits
are necessarily included within the language of the scope of the Orders as “parts of final finished
products that are assembled after importation” if they do not satisfy the “finished goods kit”
exclusion. See Second Remand at 6, 23; see also Trim Kits Scope Ruling Request at 5-6.
22
See Petition at 5 (italics added) (the Petition states that the scope also excludes
“unassembled final finished goods containing aluminum extrusions, e.g., ‘kits,’ that, at the time of
importation, contain all of the necessary parts to assemble the finished goods.”); see also Ad Hoc
Shrimp Trade Action Comm. v. United States, 33 CIT 915, 924, 637 F. Supp. 2d.1166, 1174-75
(2009) (“[u]nder the statutory scheme, Commerce owes deference to the intent of the proposed scope
of an antidumping investigation as expressed in the antidumping petition”), referencing 19 U.S.C.
§§ 1673, 1673a(b) (additional internal citations omitted).
Court No. 13-00018 Page 19
There being no further challenges to Commerce’s determination that the trim kits do
not qualify as “finished merchandise”, the Second Remand will be sustained as to the defendant’s
“finished merchandise” exclusion findings.
III. Conclusion
Based upon the foregoing, the second redetermination results will be sustained and
a separate judgment to that effect entered.
/s/ R. Kenton Musgrave
R. Kenton Musgrave, Senior Judge
Dated: December 29, 2014
New York, New York