Guangzhou Jangho Curtain Wall System Engineering Co. v. United States , 181 F. Supp. 3d 1265 ( 2016 )

Slip Op. 16 - 87
UNITED STATES COURT OF INTERNATIONAL TRADE
GUANGZHOU JANGHO CURTAIN WALL
SYSTEM ENGINEERING CO., LTD., Before: Donald C. Pogue,
et al., Senior Judge
Plaintiffs, Court No. 15-00023
v.
UNITED STATES,
Defendant.
GUANGZHOU JANGHO CURTAIN WALL
Before: Donald C. Pogue,
SYSTEM ENGINEERING CO., LTD.,
Senior Judge
et al.,
Court No. 15-00024
Plaintiff,
v.
UNITED STATES,
Defendant.
OPINION and ORDER
[Redetermination affirmed in part and remanded in part.]
Dated: September 19, 2016
Kristen Smith, Arthur K. Purcell, and Michelle L.
Mejia, Sandler, Travis, & Rosenberg, P.A., of Washington, DC,
for Plaintiff.
Aimee Lee, Senior Trial Counsel, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, of New York,
NY, for the Defendant. With her on the brief were Benjamin C.
Mizer, Principal Deputy Assistant Attorney General, Jeanne E.
Davidson, Director, and Patricia M. McCarthy, Assistant
Director. Of counsel were Scott D. McBride, Senior Attorney,
and Jessica M. Link, Attorney, Office of the Chief Counsel for
Page 2
Trade Enforcement and Compliance, U.S. Department of Commerce,
of Washington, DC.
Alan E. Price, Robert E. DeFrancesco, and Derick G.
Holt, Wiley Rein LLP, of Washington, DC, for Defendant-
Intervenor.
Pogue, Senior Judge: In these two actions, Guangzhou
Jangho Curtain Wall System Engineering Co. Ltd. and Jangho
Curtain Wall Hong Kong Ltd. (collectively “Jangho” or
“Plaintiff”) challenge the results of two related administrative
reviews conducted by Defendant, the U.S. Department of Commerce
(“Commerce”) – the second administrative review of the
antidumping duty (“AD”) order on aluminum extrusions from the
People’s Republic of China (“PRC”) and the second administrative
review of the countervailing duty (“CVD”) order on aluminum
extrusions from the PRC.1
Currently before the court are Plaintiff’s USCIT Rule
56.2 motions for judgment on the agency record. Pls.’ 56.2 Mot.
for J. on the Agency R., Ct. No. 15-23, ECF No. 31; Pls.’ Mot.
1 Aluminum Extrusions From the [PRC], 79 Fed. Reg. 78,784 (Dep’t
Commerce Dec. 31, 2014) (final results of antidumping duty
administrative review; 2012-2013) (“Final AD Determination”),
and accompanying Issues & Decisions Mem., A-570-967 (Dep’t
Commerce Dec. 31, 2014) (“AD I&D Mem.”); Aluminum Extrusions
from the [PRC], 79 Fed. Reg. 78,788 (Dep’t Commerce Dec. 31,
2014) (final results of countervailing duty administrative
review; 2012) (“Final CVD Determination”) and accompanying
Issues & Decision Mem., C-570-968 (Dep’t commerce Dec. 22, 2014)
(“CVD I&D Mem.”).
Page 3
for J. on the Agency R., Ct. No. 15-24, ECF No. 32.2 Plaintiff
claims that Commerce’s decision to include Plaintiff’s curtain
wall and window wall imports within the scope of the review was
neither in accordance with law nor supported by a reasonable
reading of the record evidence. Pl.’s Br., Ct. No. 15-23, ECF
No. 31-1, at 6-7; see Pl.’s Br., Ct. No. 15-24, ECF No. 32-1, at
1-2. Plaintiff further argues that Commerce’s decision to
assess antidumping and countervailing duties on Jangho’s entries
prior to the initiation of a formal scope inquiry was not in
accordance with law. Pl.’s Br., Ct. No. 15-23, ECF No. 31-1, at
18-23; Pl.’s Br., Ct. No. 15-24, ECF No. 32-1, at 6-14.
Defendant opposes Plaintiff’s motions. Def.’s Resp. to [Pls.’
Br.], Ct. No. 15-23, ECF No. 34 (“Def.’s Resp.”); Def.’s Resp.
to [Pls.’ Br.] (“Def.’s Resp.”), Ct. No. 15-24, ECF No. 34.
Defendant-Intervenor, the Aluminum Extrusions Fair Trade
Committee (“AEFTC”) concurs with and adopts by reference
Defendant’s arguments. [AEFTC]’s Resp. to [Pls.’ Br.], Ct. No.
15-23, ECF No. 36; [AEFTC]’s Resp. to [Pls.’ Br.], Ct. No. 15-
24, ECF No. 36. The court has jurisdiction pursuant to
§ 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended,
2 See also Mem. in Supp. of [Pl.’s] Mot. for J. on the Agency R.,
Ct. No. 15-23, ECF No. 31-1 (“Pl.’s Br.”); Pl.’s Mem. of P. & A.
in Supp. of Pl.’s 56.2 Mot. for J. on the Agency R., Ct. No. 15-
24, ECF No. 32-1 (“Pl.’s Br.”).
Page 4
19 U.S.C. § 1516a(a)(2)(B)(iii) (2012) and 28 U.S.C. § 1581(c)
(2012).3
The court affirms in part and remands to Commerce in
part for further consideration, holding that Commerce’s
determination to include Plaintiff’s curtain wall products
within the scope of the review was procedurally deficient, as it
was not in accordance with the methodology set forth in
Commerce’s regulations, and substantively insufficient as it was
not supported by a reasonable reading of the record evidence.
BACKGROUND
I. The Antidumping and Countervailing Duty Orders on Aluminum
Extrusions
The issues presented here stem from the language of
Commerce’s AD&CVD Orders on aluminum extrusions from the PRC.
See Aluminum Extrusions from the [PRC], 76 Fed. Reg. 30,650(Dep’t Commerce May 26, 2011) (antidumping duty order) (“AD
Order”); Aluminum Extrusions from the [PRC], 76 Fed. Reg. 30,653(Dep’t Commerce May 26, 2011) (countervailing duty order) (“CVD
Order”). The Orders impose duties on aluminum extrusions, which
are “shapes and forms” made from certain aluminum alloys,
“produced by an extrusion process.” AD Order, 76 Fed. Reg. at
30,650; CVD Order, 76 Fed. Reg. at 30,653. Aluminum extrusions
3 All further citations to the Tariff Act of 1930, as amended,
are to Title 19 of the U.S. Code, 2012 edition.
Page 5
that are “described at the time of importation as parts for
final finished products” are also “include[d] in the scope” if
they “otherwise meet [this] definition of aluminum extrusions.”
AD Order, 76 Fed. Reg. at 30,650-51; CVD Order, 76 Fed. Reg. at
30,654.4 Similarly, “aluminum extrusion components that are
attached (e.g., by welding or fasteners) to form subassemblies,
i.e., partially assembled merchandise,” are also within the
scope of the order. AD Order, 76 Fed. Reg. at 30,651; CVD Order,
76 Fed. Reg. at 30,654. In contrast, the Orders exclude
finished merchandise “containing aluminum extrusions as parts”
and “finished goods” that are “entered unassembled in a
‘finished goods kit.’” AD Order, 76 Fed. Reg. at 30,651; CVD
Order, 76 Fed. Reg. at 30,654. Subassemblies may be excluded as
well, provided that they enter the United States as part of or
as “finished goods” or “finished goods kits.” AD Order, 76 Fed.
Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654.5
4 Cf. Aluminum Extrusions Fair Trade Comm. v. United States, __
CIT __, 2016 WL 1268191, at *4 (Mar. 31, 2016) (“[T]he Orders
apply to ‘extrusions,’ a term that is defined expansively by the
Orders to include goods that have been processed in various ways
following an extrusion process. The term ‘extrusions,’ however,
is not defined in the general scope language so broadly as to
include all goods consisting of assemblies of which extrusions
are parts."
5 See [Valeo] Final Results of Redetermination Pursuant to Ct.
Remand, Ct. No. 12-00381, ECF No. 20-1, at 8 (citing Aluminum
Extrusions from the [PRC], A-570-967 & C-570-968 (Dep’t Commerce
Sept. 24, 2012) (preliminary side mount valve controls scope
ruling) at 7 (adopted unchanged in Aluminum Extrusions from the
(footnote continued)
Page 6
II. Prior Scope Rulings on Curtain Wall Products
The scope of the AD&CVD Orders has been questioned in
three previous scope rulings on curtain wall products; two are
relevant here.6
In the first, requested by the Curtain Wall Coalition
(“CWC”),7 Commerce determined that “curtain wall parts,” defined
as parts that “fall short of the final finished curtain wall
that envelopes an entire building structure,” including, but not
limited to individual curtain wall units (i.e., “modules that
are designed to be interlocked with [each other], like pieces of
a puzzle”), were within the scope of the Orders. CWC Scope
Ruling at 3, 10. Jangho, as well as Shenyang Yuanda Aluminum
Industry Engineering Co., Ltd. and Yuanda USA Corporation
[PRC], A-570-967 & C-570-968 (Dep’t of Commerce Oct. 26, 2012)
(final side mount valve controls scope ruling)).
6 The third is a scope ruling on curtain wall units with non-PRC
aluminum extrusions. See Aluminum Extrusions from the [PRC], A-
570-967 & C-570-968 (Dep’t of Commerce March 14, 2013) (final
scope ruling on Tesla curtain walls with non-PRC extrusions).
7 The CWC is a group of three domestic companies – Walters &
Wolf, Architectural Glass & Aluminum Company, and Bagatelos
Architectural Glass Systems, Inc. – each “a U.S. manufacturer,
producer or wholesaler of a domestic like product,” i.e.,
“aluminum extrusions for the production of curtain wall units
and parts of curtain wall systems in the United States.”
Aluminum Extrusions from the [PRC], A-570-967 & C-570-968 (Dep’t
of Commerce Nov. 30, 2012) (final scope ruling on curtain wall
units and other parts of a curtain wall system) (“CWC Scope
Ruling”) at 2.
Page 7
(collectively “Yuanda”)8 participated as interested parties,
submitting comments in opposition. CWC Scope Ruling at 2.
Yuanda and Jango subsequently challenged this finding before the
Court of International Trade (“CIT”); the CIT affirmed. Shenyang
Yuanda Aluminum Indus. Eng’g Co. v. United States, __ CIT __,
961 F. Supp. 2d 1291 (2014) (“Yuanda I”). The plaintiffs
appealed this decision to the Court of Appeals for the Federal
Circuit (“CAFC”); the CAFC affirmed, Shenyang Yuanda Aluminum
Indus. Eng’g Co. v. United States, 776 F.3d 1351 (Fed. Cir.
2015) (“Yuanda II”).
In the second scope ruling, requested by Yuanda while
Yuanda I was still pending before the CIT, Commerce determined,
contrary to Yuanda and Jangho’s arguments,9 that complete curtain
wall units sold “pursuant to [a] contract[] to supply [a]
complete curtain wall [system]” were within the scope of the
AD&CVD Orders. Yuanda Scope Ruling at 1 (footnote and internal
quotation marks omitted). Yuanda and Jangho appealed this
ruling to the CIT; this Court remanded twice, the first at the
8 Yuanda USA Corp. is an importer and Shenyang Yuanda Aluminum
Industry Engineering Co., Ltd. is a foreign producer and
exporter of curtain wall units. Id. at 1-2; Aluminum Extrusions
from the [PRC], A-570-967 & C-570-968 (Dep’t of Commerce March
27, 2014) (final scope ruling on curtain wall units that are
produced and imported pursuant to a contract to supply curtain
wall) (“Yuanda Scope Ruling”) at 1-2.
9 Jangho submitted comments in support of Yuanda’s application.
Yuanda Scope Ruling at 2.
Page 8
request of Commerce and the second upon a finding that
Commerce’s determination was not in accordance with law,
unsupported by substantial evidence, and arbitrary and
capricious. Shenyang Yuanda Aluminum Indus. Eng’g Co. v. United
States, __ CIT __, 146 F. Supp. 3d 1331 (2016) (“Yuanda III”).
The second redetermination on remand in the Yuanda Scope Ruling
is now pending before this Court. [2d] results of
Redetermination Pursuant to Ct. Remand, Consol. Ct. No. 14-106,
ECF Nos. 109-1 (conf. ver.) & 110-1 (pub. ver.).
III. The Second Administrative Reviews
On May 1, 2013, Commerce published notice of the
opportunity to request administrative review of the AD Order for
the period of May 1, 2012 through April 30, 2013, and the CVD
Order for the period of January 1, 2012 through December 31,
2012. Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity to Request Administrative
Review, 78 Fed. Reg. 25,423 (Dep’t Commerce May 1, 2013). At
this time, with Yuanda I pending before the CIT and the Yuanda
Scope Ruling pending before Commerce, the status of various
curtain wall products was uncertain. Amidst this uncertainty,
Page 9
Jangho requested, in accordance with 19 C.F.R. § 351.213, an
administrative review of its entries.10
A. The Antidumping Review
Jangho participated in the AD Review, filing a
separate rate application.11 Commerce selected Jangho as a
mandatory respondent and issued questionnaires.12 Jangho filed
its Section A Questionnaire Response, but noted that “for
reasons explained in detail to [Commerce] in the pending [Yuanda
Scope Ruling], Jangho’s imported finished curtain wall units,
the product manufactured by Jangho and exported to the United
States, fall outside the scope of the aluminum extrusions
orders.” [Jangho’s] Sect. A Questionnaire Resp., A-570-967 (Nov.
18, 2013) (“Jangho’s Sect. A Questionnaire Resp.”) at A-2,
reproduced in Def.’s App., Ct. No. 15-23, ECF No. 35, at Tab 4.
10Letter from [Jangho] to [Commerce] Pertaining to Jangho
Request for Admin. R., A-570-967 (May 31, 2013), reproduced in
App. of Docs. Supp. Def.’s Resp. to [Pl.’s Br.] (“Def.’s App.”),
Ct. No. 15-23, ECF No. 35, at Tab 1; Letter from [Jangho] to
[Commerce] Pertaining to Jangho Request for Admin. R., C-570-968
(May 31, 2013), reproduced in App. of Docs. Supp. Def.’s Resp.
to [Pl.’s Br.] (“Def.’s App.”), Ct. No. 15-24, ECF No. 35, at
Tab 1.
11[Jangho] Separate Rate Application, A-570-967 (Aug. 27, 2013)
reproduced in Def.’s App., Ct. No. 15-23, ECF No. 35, at Tab 3.
12Aluminum Extrusions From the [PRC], 79 Fed. Reg. 36,003,
36,003 (Dep’t Commerce June 25, 2014) (preliminary results of
antidumping duty administrative review and rescission, in part;
2012/2013) (“Prelim. AD Determination”) and accompanying Issues
& Decisions Mem., A-570-967 (Dep’t Commerce June 18, 2014) (“AD
Prelim. I&D Mem.”) at 3.
Page 10
Jangho emphasized that it was answering Commerce’s
questionnaires “[t]o show its good faith as a mandatory
respondent . . . pending . . . the as of yet undecided scope
inquiry.” Id. Jangho also filed its Section C and Section D
Questionnaire Responses. See [Jangho’s] Sect. C Questionnaire
Resp., A-570-967 (Dec. 9, 2013), reproduced in Def.’s App., Ct.
No. 15-23, ECF No. 35-2, at Tabs 23-26; [Jangho’s] Sect. D
Questionnaire Resp., A-570-967 (Dec. 12, 2013), reproduced in
Def.’s App., Ct. No. 15-23, ECF No. 35-3, at Tabs 27-29.
Following comments by Petitioner and Defendant-
Intervenor, the AEFTC, Commerce issued a supplemental
questionnaire to Jangho. AD Prelim. I&D Mem. at 3. Rather than
respond to the supplemental questionnaire, with Yuanda II
pending before the CAFC and the Yuanda Scope Ruling recently
issued, Jangho withdrew from “active participation as a
mandatory respondent” while reserving “the right to participate
in [the] review and file comments . . . where it feels
appropriate.” Letter From Jangho to Commerce, A-570-967 (Apr. 7,
2014), reproduced in Def.’s App., Ct. No. 15-23, ECF No. 35-4,
at Tab 33 at 1-2.
Commerce, in its Preliminary AD Determination, found
that Jangho was not eligible for a separate rate because it had
not responded to the supplemental questionnaire; instead,
Commerce declared Jangho a part of the PRC-wide entity and
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therefore subject to the PRC-wide rate. AD Prelim. I&D Mem. at
15. Commerce did not address Jangho’s arguments that its
merchandise should be excluded from the scope of the Orders and
that the Yuanda scope inquiry was applicable to its entries. In
response to Commerce’s Prelim. AD Determination, Jangho filed
comments, arguing again that Jangho’s curtain wall (and window
wall) imports should be excluded from the scope of the Orders,
or, in the alternative, if Commerce found Jangho’s curtain wall
products subject to the AD Order, that Commerce could not assess
duties retroactive to the initiation of the Yuanda Scope inquiry
(i.e., prior to May 10, 2013, thus excluding the entire period
of review). [Jangho] Case Br. [before Commerce], reproduced in
Def.’s App., Ct. No. 15-23, ECF No. 35-5, at Tab 36 at 1-2.
In its Final AD Determination, Commerce finally
discussed Jangho’s scope argument, finding the company’s curtain
wall imports subject to the AD Order while acknowledging that
the determination was incomplete “because Jangho ha[d] not
fulfilled the procedural and evidentiary requirements specified
in 19 C.F.R. [§] 351.225(c)” – that is, Jangho had not formally
requested and been subjected to a scope inquiry independent of
the review. AD I&D Mem., Cmt 6 at 30; see Final AD
Determination, 79 Fed. Reg. 78,784. As such, Commerce found
that Jangho’s merchandise was subject to the review, and that
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Jangho was still part of the PRC-wide entity and therefore still
subject to the PRC wide rate. Id., Cmt. 6 at 31.
Commerce further found that, because liquidation of
Jangho’s entries had been suspended prior to the initiation of
the Yuanda scope inquiry and Jangho’s entries were ultimately
“properly subject” to the Order and review – pursuant to the
findings in both the Yuanda Scope Ruling and CWC Scope Ruling
(as affirmed in Yuanda I) – 19 C.F.R. § 351.225(l)(3) “did not
prohibit[] [Commerce] from assessing duties on [Jangho’s]
entries as a result of [the] administrative review.” Id., Cmt. 5
at 26-27 (citing Yuanda Scope Ruling at 20-27; Yuanda I, __ CIT
at __, 961 F. Supp. 2d at 1302-03).13
Commerce also found that there was no evidence on the
record indicating that Jangho had imported window wall units
during the period of review, making the question of their
exclusion meaningless. AD I&D Mem., Cmt. 6 at 31.
B. Countervailing Duty Administrative Review
In the CVD Review, Jangho was not selected as a
mandatory respondent. Final CVD Determination, 79 Fed. Reg. at
78,790. As a cooperating, non-selected respondent, Jangho’s
imports were assessed the “non-selected [CVD] rate” for the
13While Commerce noted that Jangho did not request the Yuanda
scope inquiry, it did not discuss what effect this has on
Jangho’s entries. Id.
Page 13
period of review. Final CVD Determination, 79 Fed. Reg. at
78,789-90. Jangho argued, as it had in the AD Review, that its
“finished curtain wall unit imports fall outside the scope of
the aluminum extrusion orders” and that, if not, “antidumping
and countervailing duties may only be assessed on or after the
date of initiation of [Commerce’s] formal scope inquiry on
finished curtain wall units” – that is, the initiation date of
the Yuanda scope inquiry, May 10, 2013. Case Br. of [Jangho
Before Commerce], C-570-968 (Aug. 18, 2014) at 1, reproduced in
Def.’s App., Ct. No. 15-24, ECF No. 35, at Tab 6. Commerce
found that, because Jangho’s imports had been suspended prior to
the initiation of the Yuanda scope inquiry and were clearly
within the Order’s scope, Jangho’s retroactivity concerns were
unfounded, CVD I&D Mem., Cmt. 21 at 91-93, and Jangho’s imports
were subject to the non-selected CVD rate for the period of
review, Final CVD Determination, 79 Fed. Reg. at 78,790.
C. Jangho’s Appeal to the CIT
Jangho appealed both the AD and CVD Final
Determinations to this Court. Compl., Ct. No. 15-23, ECF No. 11
(challenging the Final AD Determination); Compl., Ct. No. 15-24
ECF No. 11.14 Jangho’s motions for judgment on the agency record
14Jangho’s entries during the period of review have not been
liquidated pursuant to these Final Determinations because of a
preliminary injunction on those entries in Yuanda, Consol. Ct.
(footnote continued)
Page 14
pursuant to USCIT Rule 56.2 followed. See Pl.’s Br., Ct. No. 15-
23, ECF No. 31-1; Pl.’s Br., Ct. No. 15-24 ECF No. 32-1.
STANDARD OF REVIEW
The court will sustain Commerce’s determinations
unless they are “unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C. §
1516a(b)(1)(B)(i). The court will set aside agency actions
found to be arbitrary and capricious. Changzhou Wujin Fine Chem.
Factory Co., Ltd. v. United States, 701 F.3d 1367, 1377 (Fed.
Cir. 2012) (citing Bowman Transp., Inc. v. Arkansas–Best Freight
Sys., Inc., 419 U.S. 281, 284 (1974)).
DISCUSSION
I. Jangho’s Curtain Wall Products
In making scope rulings, Commerce has “substantial
freedom to interpret and clarify” AD and CVD orders. Duferco
Steel, Inc. v. United States, 296 F.3d 1087, 1096 (Fed. Cir.
2002) (quotation marks and citations omitted). However, in so
doing, Commerce must follow “the methodology set forth in its
regulation[s].” Id.15 It cannot “interpret[] an order in a
manner contrary to the order’s terms.” Allegheny Bradford Corp.
No. 14-106. See Message No. 5026307 (Jan. 26, 2015) reproduced
in Ct. No. 15-24 ECF No. 35 at Tab 9.
15Commerce has promulgated detailed regulations governing when
and how scope rulings are made. See 19 C.F.R. § 351.225.
Page 15
v. United States, 28 CIT 830, 842, 342 F. Supp. 2d 1172, 1183
(2004) (citing Duferco Steel, 296 F.3d at 1094—95). Commerce’s
determination must also be supported by a reasonable reading of
the record evidence. 19 U.S.C. § 1516a(b)(1)(B)(i); Nippon Steel
Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir. 2006).
It must present a “rational connection between the facts found
and the choice made,” Burlington Truck Lines, Inc. v. United
States, 371 U.S. 156, 168 (1962), and it cannot be arbitrary and
capricious, Changzhou Wujin, 701 F.3d at 1377.
Commerce’s determination here is not within these
meets and bounds.
A. Commerce’s Scope Determination Failed to Follow the
Methodology Set Forth in its Own Regulations.
In the Final AD Determination, Commerce identified as
an issue “[w]hether [it] [s]hould [m]ake a [s]cope [r]uling on
Jangho’s [c]urtain [w]all [u]nits.” AD I&D Mem., Cmt. 6 at 28.
Commerce found that the administrative review was, in both
“procedural and evidentiary” terms, insufficient to make a full
scope determination. AD I&D Mem., Cmt. 6 at 30 (asserting that
Commerce could not determine whether Jangho’s merchandise was
properly excluded “as part of a ‘finished goods kit,’” without a
scope inquiry). However, because Jangho had not requested a
scope inquiry pursuant to 19 C.F.R. § 351.225(c), Commerce,
rather than conducting such an inquiry, concluded that Jangho’s
Page 16
merchandise was within the scope of the Orders. AD I&D Mem.,
Cmt. 6 at 30; see CVD I&D Mem., Cmt. 21 at 91-92 (finding that
assessment of duties prior to a scope inquiry proper because
curtain wall units “were within the scope of the order pursuant
to the unambiguous scope language covering parts for curtain
walls”). The question now is whether this determination is in
accordance with Commerce’s own regulations – specifically,
whether the onus to request a scope inquiry lay solely with
Jangho, as Commerce asserts, or whether Commerce, having found
its own determination insufficient, was obligated to self-
initiate a scope inquiry.
1. Commerce’s Obligation to Initiate a Scope Inquiry
Commerce conducts scope inquiries and “issues ‘scope
rulings’” to “clarify the scope of an [AD or CVD] order.” 19
C.F.R. § 351.225(a). Under its own regulations, if Commerce
“determines from available information that an inquiry is
warranted to determine whether a product is included within the
scope of [an order],” Commerce “will initiate an inquiry.” 19
C.F.R. § 351.225(b).
Here, Commerce has determined “from available
information that an inquiry is warranted to determine whether
[Jangho’s merchandise] is included within the scope of the
Page 17
[Order].” 19 C.F.R. § 351.225(b); AD I&D Mem., Cmt. 6 at 30.16
As such, Commerce was, by its own regulation, obligated to
initiate a scope inquiry. 19 C.F.R. § 351.225(b) (providing that
if Commerce determines “from available information” that a scope
inquiry is warranted, it “will initiate an inquiry”). The
language of the regulation is imperative, not precatory.17
Accordingly, Commerce’s failure to initiate a scope
inquiry after finding on “available evidence” that a scope
inquiry was required, was contrary to the plain language of the
regulation and therefore not in accordance with law.18
16In the Final CVD Review Commerce does not so much address the
scope issue as conclude that Jangho’s merchandise is
unambiguously subject to the Orders such that assessment of
duties prior to a scope inquiry is proper. See CVD I&D Mem.,
Cmt. 21 at 91-93; see AD I&D Mem., Cmt. 5 at 26-28 (same).
17Defendant seems to argue that 19 C.F.R. § 351.225(b) allows
Commerce to make scope determinations on “available
information,” such that Commerce’s decision to include Jangho’s
merchandise without a scope inquiry was proper. Tr. of Oral
Arg., June 15, 2016, Ct. Nos. 15-23 & 15-24, ECF Nos. 48 & 46,
at 28-30. By its plain language, as discussed above, the
regulation does not. Further, while “the burden falls on the
importer to demonstrate that its imported products should be
excluded from the scope of an antidumping investigation,” NTN
Bearing Corp. of Am. v. United States, 997 F.2d 1453, 1458 (Fed.
Cir. 1993) (citations omitted), this burden of production does
not discharge Commerce from undertaking the requisite
administrative procedures: “[D]iscretion as to the substance of
the ultimate decision does not confer discretion to ignore the
required procedures of decisionmaking.” Bennett v. Spear, 520
U.S. 154, 172 (1997).
18See Tesoro Hawaii Corp. v. United States, 405 F.3d 1339, 1347
(Fed. Cir. 2005) (“When there is no ambiguity in the meaning of
the regulation, ‘it is the duty of the courts to enforce it
(footnote continued)
Page 18
2. Jangho’s Obligation to Request a Scope Inquiry
Under the same regulation, “[a]ny interested party”
may request a scope ruling. 19 C.F.R. § 351.225(c). While 19
C.F.R. § 351.225(c) “provides a detailed process for filing
scope ruling requests,” interested parties may make “use of the
administrative review process as an avenue for challenging the
scope of [AD and CVD] orders.” Mukand Int’l, Ltd. v. United
States, 29 CIT 1526, 1535 n. 11, 412 F. Supp. 2d 1312, 1319 n.
11 (2005), aff’d, 502 F.3d 1366 (Fed. Cir. 2007) (internal
citation omitted).19 Indeed, where, as here, a scope issue
arises in the course of an administrative review, Commerce has
the express authority to “conduct [a] scope inquiry in
conjunction with that review.” 19 C.F.R. § 351.225(f)(6).
When addressing scope issues in the course of a
review, Commerce must “utilize[] and abide[] by the statutory
and regulatory provisions that authorize [it] to investigate
[scope issues].” AMS Assocs, 737 F.3d at 1344. If “the meaning
and scope of an existing antidumping order is clear,” then
according to its obvious terms and not to insert words and
phrases so as to incorporate therein a new and distinct
provision.’” (quoting Gibson v. United States, 194 U.S. 182, 185
(1904)).
19Cf. AMS Assocs., Inc. v. United States, 737 F.3d 1338, 1340
(Fed. Cir. 2013) (finding that Commerce, wrongly, “chose not to
initiate a formal scope inquiry pursuant to 19 C.F.R. § 351.225. . . despite requests by [plaintiff]” in the course of an
administrative review).
Page 19
Commerce need not “initiate a formal scope inquiry,” id., and
may make the determination in the course of the review, Huaiyin
Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1378–
79 (Fed. Cir. 2003) (holding that a formal scope inquiry and
ruling was unnecessary when Commerce’s determination “neither
changed the companies entitled to the decreased rate, nor
modified the type of products covered by the . . . order”);
Xerox Corp. v. United States, 289 F.3d 792, 795 (Fed. Cir. 2002)
(holding formal scope inquiry unnecessary where the product at
issue was “clearly outside the order” such that “the scope of
the order [was] not in question”). If, however, as Commerce has
concluded here, the agency cannot resolve the scope issue “on
the basis of the plain language of the scope description or the
clear history of the original investigation,” Antidumping
Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,328
(Dep’t of Commerce May 19, 1997) (providing the administrative
history of 19 C.F.R. § 351.225), if “the scope of the original
[] order [is] unclear,” then Commerce must conduct a formal
scope inquiry, AMS Assocs., 737 F.3d at 1344.
Here, Plaintiff has used, as it may, the
administrative review process to challenge the scope of the
Orders with regard to its own merchandise. Mukand Int’l, 29 CIT
at 1535 n. 11, 412 F. Supp. 2d at 1319 n. 11, aff’d, 502 F.3d
Page 20
1366.20 The onus was then on Commerce to address the issue,
whether in the review itself, or, if necessary, in a formal
scope inquiry. AMS Associates, 737 F.3d at 1344.
Where, as here, Commerce cannot resolve the scope
issue presented by Plaintiffs on the “plain language” or “clear
20Defendant seems to argue that (1) Jangho raised the issue only
with respect to Yuanda’s merchandise, and (2) if Jangho raised
the issue with respect to its own merchandise, it was not
sufficient – it had to expressly request its own scope inquiry.
See Tr. of Oral Arg., June 15, 2016, Ct. Nos. 15-23 & 15-24, ECF
Nos. 48 & 46, at 31-33.
The first is directly contrary to the record. See, e.g.,
Jangho’s Sect. A Questionnaire Resp., Ct. No. 15-23, ECF No. 35,
at Tab 4, at A-2. (“Please note that for reasons explained in
detail to [Commerce] in the pending [Yuanda] scope inquiry on
finished curtain wall units from China, Jangho’s imported
finished curtain wall units . . . fall outside the scope of the
aluminum extrusions orders.” (emphasis added)); [Jangho] Case
Br. [before Commerce], Ct. No. 15-23, ECF No. 35-5 at Tab 36
(arguing that Jangho’s merchandise, not Yuanda’s, is not subject
merchandise); Case Br. of [Jangho Before Commerce], Ct. No. 15-
24, ECF No. 35 at Tab 6, at 1 (“[I]t is Jangho’s view that its
finished curtain wall unit imports fall outside the scope of the
aluminum extrusions orders . . . .”), 2-4 (arguing that duties
should not be assessed on Jangho’s entries prior to the
initiation of a formal scope inquiry given the ambiguity of the
Orders). Indeed, Plaintiff has argued persistently to Commerce,
since at least November 2012, that its curtain wall imports fall
outside the scope of the Orders – not only here, but in two
formal scope determinations, CWC Scope Ruling; Yuanda Scope
Ruling, and in the resultant challenges to those determinations
both before this Court and the CAFC, Yuanda I, __ CIT __, 961 F.
Supp. 2d 1291; Yuanda II, 776 F.3d 1351; Yuanda III, __ CIT __,
146 F.Supp.3d 1331.
The second is incorrect. Specifically, interested parties
may raise and argue issues of scope during administrative
reviews, Mukand Int’l, 29 CIT at 1535 n. 11, 412 F. Supp. 2d at1319 n. 11, aff’d, 502 F.3d 1366, and Commerce must address such
issues in keeping with its statutory and regulatory obligations.
AMS Assocs., 737 F.3d at 1344.
Page 21
history” of the Orders, Antidumping Duties; Countervailing
Duties, 62 Fed. Reg. at 27,327-28, where Commerce’s own decision
“confirm[s] this lack of clarity,” AMS Associates, 737 F.3d at
1344, Commerce must “conduct a formal scope inquiry” before it
finds Plaintiff’s merchandise within the scope of the Order, id.
at 1340.21
Accordingly, by failing to adequately address the
scope issue after Plaintiff raised it in the course of an
administrative review, by failing to initiate a scope inquiry
after finding one necessary, Commerce has failed to follow “the
methodology set forth in its [own] regulation.” See Duferco
Steel, 296 F.3d at 1096.
B. Commerce’s Scope Analysis is Not Based on a Reasonable
Reading of the Record Evidence.
In addition to its procedural insufficiencies,
Commerce’s scope determination is substantively flawed.
Commerce has determined that Jangho’s merchandise is within the
21As such, Defendant’s concern that Commerce will be obligated
to initiate a scope inquiry for “everyone who’s made an
assertion that they’re not subject to the order,” Tr. of Oral
Arg., June 15, 2016, Ct. Nos. 15-23 & 15-24, ECF Nos. 48 & 46,
at 34, is unfounded. As the CAFC has already explained,
“[i]mporters cannot circumvent antidumping orders by contending
that their products are outside the scope of existing orders
when such orders are clear as to their scope. Our precedent
evinces this understanding. We have not required Commerce to
initiate a formal scope inquiry when the meaning and scope of an
existing antidumping order is clear.” AMS Assocs., 737 F.3d at
1344 (citations omitted).
Page 22
scope of and subject to the Orders. AD I&D Mem., Cmt. 6 at 30;
CVD I&D Mem., Cmt. 21 at 91 (finding Jangho’s merchandise
“properly subject to [the CVD] review”), 92 (citing to the
Yuanda Scope Ruling to establish that the Orders unambiguously
include “certain curtain wall units” under their “parts for
curtain walls” provision, rendering proper the suspension of
liquidation for Jangho’s entries prior to the initiation of that
scope inquiry). However, this determination cannot be sustained
because it is not supported by any record evidence, much less a
reasonable reading thereof. See Nippon Steel, 458 F.3d at 1351.22
Commerce asserts that Plaintiff imports “stand alone
parts of a curtain wall,” and makes its findings based on that
assertion, but the agency does not cite to any evidence or
provide any description of the actual product at issue. AD I&D
Mem., Cmt. 6 at 30-31; see CVD I&D Mem., Cmt. 21 at 91-92.
22Plaintiff attempts to “incorporate by reference the arguments”
it made about the scope of the Orders as a consolidated
plaintiff in another, related, proceeding, Shenyang Yuanda
Aluminum Industry Engineering Co. v. United States, Consol. Ct.
No. 14-00106. Pl.’s Br., Case No. 15-23, ECF No. 31-1, at 9.
Such incorporation, as Defendant argues, is improper. See United
States v. Great Am. Ins. Co. of New York, 738 F.3d 1320, 1328
(Fed. Cir. 2013) (“It is well established that arguments that
are not appropriately developed in a party's briefing may be
deemed waived.”). However, as Plaintiff points out, this is of
little relevance here because Plaintiff, in addition to
“incorporating by reference,” has raised much of these arguments
here. Pl.’s Rule 56.2 Reply Br., Ct No. 15-23, ECF No. 39, at 9-
10. Accordingly, Plaintiff’s arguments as raised and relevant
here are considered infra.
Page 23
Commerce’s analysis is not tethered in any way to the
administrative record.23 Commerce “must make findings that
support its decision, and those finding must be supported by
substantial evidence.” Burlington Truck Lines, 371 U.S. at 168(citations omitted).
C. Commerce’s determination was arbitrary and
capricious.
Commerce does not address Plaintiff’s arguments both
here and below, that inclusion of its unitized curtain wall
23Indeed, the evidence in the record seems to indicate that
Jangho imports complete curtain wall units pursuant to a
contract to supply a curtain wall, Yuanda III, __ CIT at __, 146
F.Supp.3d at 1339-40; Yuanda Scope Ruling at 1, 6-7, rather than
stand alone parts thereof, Yuanda II, 776 F.3d at 1357-58
(citing Yuanda I, __ CIT __, 961 F. Supp. 2d at 1298-99); CWC
Scope Ruling at 3, 10 . See [Jangho] Separate Rate Application,
Ct. No. 15-23, ECF No. 35, at Tab 3 at 6 (“Jangho America sells
curtain wall units and installation. The company is awarded a
bid on a particular project. Jangho America is paid based upon
the terms of contract relating to a specific project.”);
Jangho’s Sect. A Questionnaire Resp., Ct. No. 15-23, ECF No. 35,
at Tab 5 at A-8 (“The sales and negotiation process for Jangho
is as follows. Jangho Americas bids on projects to sell and
install curtain wall units. When awarded a bid, Jangho Americas
enters into a contract with the building contractor for the
project.”); Jangho’s Sect. A Questionnaire Resp., Ct. No. 15-23,
ECF No. 35, at Tab 6 at A-17-A-18 (“Jangho produces and exports
finished curtain wall units. The finished curtain wall units are
designed and manufactured to meet the needs of a specific
project. A finished curtain wall unit is an architecturally
designed product, similar to a window, used as an outer covering
of a building.”).
This uncertainty is magnified by Commerce’s discussion in
AD I&D Mem., Cmt. 5 at 27 and CVD I&D Mem., Cmt. 21 at 92, where
Commerce likens Jangho’s products to both those at issue in the
Yuanda Scope Ruling and Yuanda I to find those decisions
applicable.
Page 24
imports within the scope of the Orders is inconsistent with
Commerce’s determination that window wall imports are excluded
from that same scope24 because the products are “virtually
identical.” Pl.’s Br., Ct. No. 15-23, ECF No. 31-1, at 13-14;
see [Jangho] Case Br. [before Commerce], Ct. No. 15-23, ECF No.
35-5 at Tab 36, at 4-5. By not addressing this argument,
Commerce has “entirely failed to consider an important aspect of
the problem.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).25 Indeed, by
failing to offer any explanation for the distinction drawn
between unitized curtain walls and window walls, Commerce has
treated similarly situated products differently “without
reasonable explanation.” See Consol. Bearings Co. v. United
States, 348 F.3d 997, 1007 (Fed. Cir. 2003) (citation omitted).
This renders Commerce’s determination arbitrary and capricious.
II. The Applicability of the Yuanda Scope Ruling
Plaintiff has persistently argued that there is a
relevant scope ruling covering its merchandise, one that it
24See Aluminum Extrusions from the [PRC], Final Scope Ruling, A-
570-967 & C-570-968 (Dep’t of Commerce June 19, 2014) (final
scope ruling on finished window [wall] kits) (“NR Window
Walls”), at 1.
25See Yuanda III, __ CIT at __, 146 F.Supp.3d at 1352-54
(holding that Commerce’s determination that unitized curtain
walls are within the scope of the Orders and window walls are
not, “[drew] an arbitrary distinction between window walls and
curtain walls”).
Page 25
fully participated in as an interested party importing the same
product as the applicant, the Yuanda Scope Ruling (as modified
by subsequent litigation). Pl.’s Rule 56.2 Reply Br., Ct No. 15-
23, ECF No. 39, at 9-10. Commerce, without analysis or support,
determined below that “scope rulings” per se “apply only to
specific merchandise from a specific importer or exporter,”
faulting Jangho for not requesting a “scope ruling covering its
specific merchandise.” AD I&D Mem., Cmt. 6 at 30-31. Here, it
argues that, because the Yuanda Scope Ruling is based on facts
particular to Yuanda, the ruling cannot apply to Jangho. Def.’s
Resp., Ct. No. 15-23, ECF No. 34, at 22-23; Def.’s Resp., Ct.
No. 15-24, ECF No. 34, at 14.
A. The plain language of the regulation indicates that
scope rulings are product not party specific.
An agency is bound by the unambiguous, plain meaning
of its own regulations.26 Plain meaning is a function of
context,27 discerned from “the text of the regulation as a
whole,” Lengerich v. Dep’t of Interior, 454 F.3d 1367, 1370
(Fed. Cir. 2006) (citing Bowles v. Seminole Rock & Sand Co., 325
26Roberto v. Dep’t of Navy, 440 F.3d 1341, 1350 (Fed. Cir. 2006)
(“If the regulatory language is clear and unambiguous, the
inquiry ends with the plain meaning. However, if the regulation
is silent or ambiguous, the court then gives deference to the
agency's own interpretations.” (citation omitted)).
27See Beecham v. United States, 511 U.S. 368, 372 (1994) (“The
plain meaning that we seek to discern is the plain meaning of
the whole statute, not of isolated sentences.”).
Page 26
U.S. 410, 414–15 (1945)), with an eye to its “object and
policy.” Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d
1023, 1040 (Fed. Cir. 2016) (internal quotation marks and
citation omitted).
Here, by the plain language of the regulation, scope
rulings are issued with respect to “particular products,” 19
C.F.R. § 351.225(a),28 not particular interested parties,
producers or importers.29 When Commerce self-initiates a scope
inquiry it is because there are questions as to whether “a
product is included within the scope of an [order].” 19 C.F.R. §
351.225(b). “[A]ny interested party,” may request a scope
ruling to determine whether “a particular product” is “within
the scope of an order.” 19 C.F.R. § 351.225(c)(1). The
regulation uses the indefinite article, not the possessive: an
28See 19 C.F.R. § 351.225(b) (Commerce may self-initiate a scope
inquiry “to determine whether a product is included within the
scope of an antidumping or countervailing duty order.”); 19
C.F.R. § 351.225(c)(1) (“Any interested party may apply for a
ruling as to whether a particular product is within the scope of
an order or a suspended investigation.”); 19 C.F.R. §
351.225(c)(1)(i) (The application “must contain . . . to the
extent reasonably available to the interested party . . . [a]
detailed description of the product, including its technical
characteristics and uses, and its current U.S. Tariff
Classification number.”)
29Commerce’s product-centered language here contrasts with
Commerce’s producer or importer-focused language elsewhere. See,
e.g., 19 C.F.R. § 351.107 (providing for, in direct, clear
language, the establishment of producer and/or exporter specific
cash deposit rates).
Page 27
interested party requests a scope ruling for “a particular
product,” not “its particular product.” Indeed, “any interested
party” includes interests and entities that do not have their
own entries or merchandise,30 that is, no product particular
solely to them upon which to premise a scope ruling request.31
30Commerce defines “interested party” as “(i) [a] foreign
manufacturer, producer, or exporter of subject merchandise; (ii)
The United States importer of subject merchandise; (iii) A trade
or business association a majority of the members of which are
producers, exporters, or importers of subject merchandise; (iv)
The government of a country in which subject merchandise is
produced or manufactured or from which such merchandise is
exported; (v) A manufacturer, producer, or wholesaler in the
United States of a domestic like product; (vi) A certified union
or recognized union or group of workers which is representative
of an industry engaged in the manufacture, production, or
wholesale in the United States of a domestic like product, (vii)
A trade or business association a majority of whose members
manufacture, produce, or wholesale a domestic like product in
the United States, (viii) An association, a majority of whose
members is composed of interested parties described in
subparagraph (C), (D), or (E) of section 771(9) of the Act with
respect to a domestic like product, and (ix) A coalition or
trade association as described in section 771(9)(G) of the Act.”
19 C.F.R. § 351.102(b)(29).
31Indeed, it is unclear what purpose the CWC Scope Ruling could
possibly serve other than to apply to the products of other
parties, given that the CWC represents domestic interests that
do not import any product. See CWC Scope Ruling at 2.
In a footnote, Defendant acknowledges this conflict,
arguing that “[s]cope rulings issued to producers, exporters or
importers apply specifically to the requesting party as the
ruling is based on the particular facts and situation of that
requesting party. In contrast, rulings requested by the
domestic manufacturers apply generally to the merchandise
reviewed.” Def.’s Resp., Ct. No. 15-23, ECF No. 34, at 23 n. 4.
Defendants cites solely to the Yuanda Scope Ruling (as applying
only to Yuanda) and the CWC Scope ruling (applying to all
curtain wall imports) as examples. Id.(footnote continued)
Page 28
At no point does the regulation instruct Commerce to consider
who produced or imported the product as part of what the
regulation defines as “particular.” Rather, a scope ruling
application must include “to the extent reasonably available to
the interested party . . . [a] detailed description of the
product, including its technical characteristics and uses, and
its current U.S. Tariff Classification number.” 19 C.F.R. §
351.225(c)(1)(i). Scope rulings on the application are made on
the basis of that detailed description in conjunction with “the
descriptions of the merchandise” as contained in the regulatory
history. Mid Continent Nail Corp. v. United States, 725 F.3d
1295, 1302 (Fed. Cir. 2013) (citing 19 C.F.R. § 351.225(k)(1)).32
Given Commerce’s own lack of explanation, Defendant’s
statement is “nothing more than . . . a post hoc rationalization
advanced” by counsel in order “to defend past agency action
against attack.” Christopher v. SmithKline Beecham Corp., 132 S.
Ct. 2156, 2166-67 (2012) (internal citations, quotation marks,
and alteration marks omitted). It is therefore entitled to no
deference beyond its power to persuade. United States v. Mead
Corp., 533 U.S. 218, 228 (2001) (quoting Skidmore v. Swift &
Co., 323 U.S. 134, 140 (1944)).
“In any event, ‘[a]rguments raised only in footnotes . . .
are waived.’” Kennametal, Inc. v. Ingersoll Cutting Tool Co.,
780 F.3d 1376, 1383 (Fed. Cir. 2015) (quoting Otsuka Pharm. Co.
v. Sandoz, Inc., 678 F.3d 1280, 1294 (Fed. Cir. 2012)).
Commerce must set forth the basis of its decisions “with such
clarity as to be understandable,” as “[i]t will not do for a
court to be compelled to guess at the theory underlying the
agency’s action.” Sec. & Exch. Comm’n v. Chenery Corp., 332 U.S.
194, 196-97 (1947).
32Specifically, Commerce considers “[t]he descriptions of the
merchandise contained in the petition, [the] initial
(footnote continued)
Page 29
Further, this reading is in keeping with the purpose
of the regulation itself – clarity of scope and predictability
of administration33 – and the statutory framework in which it
operates, specifically the allocation of authority between
Commerce and CBP.34
investigation, and the determinations of [Commerce] (including
prior scope determinations) and the [International Trade]
Commission.” 19 C.F.R. § 351.225(k)(1). If these detailed
descriptions are not dispositive, Commerce will consider the
“(i) [t]he physical characteristics of the product; (ii) [t]he
expectations of the ultimate purchasers; (iii) [t]he ultimate
use of the product; (iv) [t]he channels of trade in which the
product is sold; and (v) [t]he manner in which the product is
advertised and displayed.” 19 C.F.R. § 351.225(k)(2).
33The object of scope rulings is to “clarify the scope of an
order.” 19 C.F.R. § 351.225(a). Commerce’s asserted purpose in
promulgating 19 C.F.R. § 351.225 was to “translate the
principles of the implementing legislation into specific and
predictable rules, thereby facilitating the administration of
these laws and providing greater predictability for private
parties affected by these laws.” Antidumping Duties;
Countervailing Duties, 62 Fed. Reg. at 27,296.
34Applying Commerce’s substantive determinations to the facts of
a particular entry or entries is one of Custom’s central
functions. See LDA Incorporado v. United States, __ CIT __, 79
F. Supp. 3d 1331, 1340 (2015) (“The factual analysis and
application of the scope to the goods in question are decisions
of Customs.”); see Reorganization Plan No. 3 of 1979, 44 Fed.
Reg. 69,273, 69,274-75 (Dec. 3, 1979), effective under Exec.
Order No. 12,188 of January 2, 1980, 45 Fed. Reg. 989, 993
(1980). “While Congress gave the role of determining the scope
of an antidumping or countervailing duty order to Commerce, CBP,
incident to its function of fixing the amount of duties
chargeable, must make factual findings to determine ‘what the
merchandise is, and whether it is described in an order.’”
Sunpreme Inc. v. United States, __ CIT __, 145 F. Supp. 3d 1271,
1284-85 (2016) (quoting Xerox, 289 F.3d at 794–95; citing 19
U.S.C. § 1516a(2)(B)(vi); 19 U.S.C. § 1677(25)).
Page 30
As such, Commerce’s unsupported assertion that its
“scope rulings” per se “apply only to specific merchandise from
a specific importer or exporter,” AD I&D Mem., Cmt. 6 at 31, is
contrary to the unambiguous language of the controlling
regulation, 19 C.F.R. § 351.225. Moreover, it is directly
contrary to the purpose of the regulation and undermines the
statutory allocation of authority between Commerce and Customs
for the agency to insist, as Defendant does, that interested
parties cannot rely on Commerce’s determinations, but rather
that such parties, “even CBP itself,” must take a “gamble” or “a
chance” when they “look to Commerce’s previous scope rulings for
guidance in determining whether to declare merchandise at the
border as subject, or not subject, to an antidumping order.”
Def.’s Resp., Ct. No. 15-23, ECF No. 34, at 15-17 (discussing
the applicability of a window wall scope ruling to Plaintiffs’
alleged widow wall imports, see infra).
Accordingly, Commerce’s per se restriction of its
scope ruling to a particular interested party rather than to a
particular product is contrary to the plain language of the
regulation.
B. Commerce’s Determination regarding the inapplicability
of the Yuanda Scope Ruling is Unreasonable.
While each scope ruling must be made “upon the facts
and circumstances of the specific case before it,” if the facts
and circumstances of another interested party are the same,
Page 31
Commerce “must remain consistent and any deviations must be
explained.” Mid Continent Nail Corp. v. United States, __ CIT
__, 770 F. Supp. 2d 1372, 1382 (2011) (citing SKF USA Inc. v.
United States, 630 F.3d 1365, 1373 (Fed. Cir. 2011)).
Below, Commerce did not directly address the
applicability of the Yuanda Scope Ruling.35 Before the court,
Defendant now argues that, because the Yuanda Scope Ruling is
based on “information particular to Yuanda,” it cannot apply to
Jangho, Def.’s Resp., Ct. No. 15-24, ECF No. 34, at 14 – that
is, the facts that make the product particular are particular to
Yuanda. However, because Commerce did not make any factual
findings based on the record – however limited – to define
Jangho’s merchandise, much less explain why it is substantively
different from Yuanda’s merchandise (and therefore should be
subject to substantively different treatment),36 this argument
cannot hold. “Commerce is obligated to follow prior precedent
absent some legitimate reason for departing from it.” Belgium v.
35Instead, Commerce faults Jangho for failing to request “a
scope ruling covering its specific merchandise,” AD I&D Mem.,
Cmt. 6 at 30, while also using the Yuanda Scope Ruling and this
Court’s affirmance of the CWC Scope Ruling in Yuanda I, to
support its determination that “certain curtain wall units” were
“within the scope of the [Orders] pursuant to the unambiguous
scope language,” such that suspension of (and therefore
assessment of duties on) Jangho’s entries prior to initiation of
that scope inquiry was proper under AMS Assocs., 737 F.3d 1338,
AD I&D Mem., Cmt. 5 at 27; CVD I&D Mem., Cmt. 21 at 92.
36 See supra Discussion Section I Part C.
Page 32
United States, 551 F.3d 1339, 1349 (Fed. Cir. 2009).37 Commerce
has not provided a legitimate reason – or any reason – here. If
Commerce finds that it lacks sufficient factual information, it
may reopen the record38 or even initiate a scope inquiry for
Jangho39 in keeping with its regulatory obligation,40 but it may
not assert the inapplicability of the Yuanda Scope Ruling
because of factual differences without providing a reasonable
basis on the record for such a finding.41
C. The Procedural Effect of the Yuanda Scope Ruling
While Plaintiff and Defendant both argue at length
over the issue of whether or not Jangho’s merchandise is
37Defendant goes so far as to argue that there is “simply no
basis in statute or regulation [to find that] all of Commerce’s
scope rulings are somehow binding on all physically similar
products, no matter the identity of the exporter or importer, or
unique facts particular to the sale and shipment of the
merchandise at issue.” Def.’s Resp., Ct. No. 15-23, ECF No. 34,
at 17. Defendant ignores the agency’s obligation to take
actions and render decisions that are neither arbitrary nor
capricious. Changzhou Wujin, 701 F.3d at 1377. An agency action
is “arbitrary when the agency offer[s] insufficient reasons for
treating similar situations differently.” RHP Bearings Ltd. v.
United States, 288 F.3d 1334, 1347 (Fed. Cir. 2002) (internal
quotation marks and citation omitted).
3819 C.F.R. § 351.301(c)(4) (“The Department may place factual
information on the record of the [antidumping or countervailing
duty] proceeding at any time.”).
39 See 19 C.F.R. §§ 351.225(b), (f)(6).
40 See supra Discussion Section I Part A.
41Cf. 19 C.F.R. § 351.225(k)(1) (instructing Commerce to
consider “prior scope determinations” when the scope language of
an order is unclear).
Page 33
properly suspended pursuant to 19 C.F.R. § 351.225(l),42 since
Commerce has yet to determine whether Jangho’s products may be
properly considered within the scope of the Orders, or whether
the Yuanda or CWC Scope Ruling applies, this question is not yet
ripe for consideration. See AT&T Corp. v. Iowa Utilities Bd.,
525 U.S. 366, 386 (1999).43
III. Jangho’s Window Wall Products
Plaintiff argues that its window wall imports should
also be excluded from the scope of the AD Order, and hence the
second AD administrative review, pursuant to Commerce’s decision
in NR Window Walls. Pl.’s Br., Ct. No. 15-23, ECF No. 31-1, at
15-18. In the administrative review, however, Commerce found
that there was no evidence on the record indicating that Jangho
had actually imported window wall units during the period of
review, and, as such, questions of scope were irrelevant. AD I&D
Mem., Cmt. 6 at 31.44 To counter Commerce’s finding, Plaintiff
42Pl.’s Br., Ct. No. 15-23, ECF No. 31-1, at 18-23; Pl.’s Br.,
Ct. No. 15-24, ECF No. 32-1, at 6-14; Def.’s Resp., Ct. No. 15-
23, ECF No 34, at 21-28; Def.’s Resp., Ct. No. 15-24, ECF No.
34, at 11-21.
43Indeed, if Jangho’s merchandise is found outside the scope of
the order, Commerce has no authority to assess duties on those
entries not yet liquidated. See Belgium, 551 F.3d at 1349-50.
44Commerce further concluded that, even if Jangho had imported
such units, those imports would still be subject to the order,
regardless of the existing scope ruling excluding window wall
units, because Jangho had not requested a scope ruling specific
to its products. Id.Page 34
now offers a collection of cites to the record that, it claims,
establishes that some of its entries were window wall units.
Pl.’s Br., Ct. No. 15-23, ECF No. 31-1, at 15-17.
A. Plaintiff failed to exhaust its administrative
remedies with regard to its factual arguments.
A plaintiff must exhaust administrative remedies
before seeking judicial relief. Sandvik Steel Co. v. United
States, 164 F.3d 596, 599 (Fed.Cir.1998); see 28 U.S.C. §
2637(d). This applies “with particular force” where, as here
and in trade cases more generally, “the agency [applies] its
special expertise,” Corus Staal BV v. United States, 502 F.3d
1370, 1379-80 (Fed. Cir. 2007) (internal citation and quotation
marks omitted). This “protects[s] the agency’s interest in being
the initial decision maker in implementing the statutes defining
its tasks,” and promotes the “development of an agency record
that is adequate for later court review and by giving an agency
a full opportunity to correct errors and thereby narrow or even
eliminate disputes needing judicial resolution.” Itochu Bldg.
Products v. United States, 733 F.3d 1140, 1145 (Fed. Cir. 2013)
(internal citations omitted).
Here, while Plaintiff did argue before Commerce that
its window wall units should be excluded, Plaintiff did not
establish that it had actually imported window wall units during
the period of review. [Jangho] Case Br. [before Commerce], Ct.
No. 15-23, ECF No. 35-5, at Tab 36 at 6. Even if, as Plaintiff
Page 35
now argues,45 the administrative record contains direct, but non-
obvious evidence of Jangho’s window wall imports, Plaintiff has
not developed its argument so that Commerce could be the
“initial decisionmaker” and build a record of agency decision
making adequate for judicial review. See Itochu, 733 F.3d at
1145. Plaintiff had and took the opportunity to raise its
window wall unit argument before Commerce; the onus was on the
Plaintiff to develop that argument and direct Commerce to the
pertinent facts. It did not, and, as such, it failed to exhaust
its administrative remedies, with regard to those missed or
omitted factual arguments, without valid excuse or exception. See
Corus Staal, 502 F.3d at 1380-81; Essar Steel, Ltd. v. United
States, 753 F.3d 1368, 1375 (Fed. Cir. 2014); Yangzhou Bestpak
Gifts & Crafts Co. v. United States, 716 F.3d 1370, 1380-81
(Fed. Cir. 2013).
45Plaintiff argues now that “the administrative record . . .
contains direct evidence of Jangho’s window wall imports” –
though none of that evidence is obvious because “Commerce’s
questionnaires never requested Jangho report by name the final
end product being imported into the United States.” Pl.’s Br.,
Ct. No. 15-23, ECF No. 31-1, at 15. However, Commerce did, in
clear contradiction to Plaintiff’s excuse, request that Jangho
“[p]rovide a description of the types of merchandise under
consideration produced and/or sold by [Jangho].” Jangho’s Sect.
A Questionnaire Resp., Ct. No. 15-23, ECF No. 35, at Tab 6 at A-
17. Jangho answered that it “produce[d] and export[ed] finished
curtain wall units.” Id.Page 36
B. Commerce’s finding that Jangho did not import window
wall units during the period of review was based on a
reasonable reading of the record evidence.
Commerce, lacking any record evidence to indicate
otherwise, concluded that Jangho had not produced window walls
during the period of review. AD I&D mem., Cmt 6 at 31.
Commerce’s determination is reasonable on the record evidence,
even if the court were to consider Plaintiff’s new factual
arguments. Plaintiff points to a collection of indirect
references and images that might suggest that Jangho produced
windows or window walls at some point. See Pl.’s Br., Ct. No.
15-23, ECF No. 31-1, at 15-16; Pl.’s Rule 56.2 Reply Br., Ct No.
15-23, ECF No. 39, at 5-7. In contrast, throughout its
questionnaire responses Jangho refers to its product as
“finished curtain wall units,” or some variation thereon,
without reference to window wall products.46 When asked directly
to describe the merchandise at issue, Jangho answered that it
“produces and exports finished curtain wall units,” without
mention of window wall units. Jangho’s Sect. A Questionnaire
Resp., Ct. No. 15-23, ECF No. 35, at Tab 6 at A-17. Considering
46See, e.g., [Jangho] Separate Rate Application, Ct. No. 15-23,
ECF No. 35, at Tab 3 at 6; Jangho’s Sect. A Questionnaire Resp.,
Ct. No. 15-23, ECF Nos. 35 & 35-1, at Tabs 4-6, 8, at A-2, A-8,
A-17-A-18, A-20, Ex. A-11 (Sample Transaction Documents;
[Jangho’s] Sect. C Questionnaire Resp., A-570-967 (Dec. 9, 2013)
at C-22 reproduced in Def.’s App., ECF No 35-2 at Tab 23;
[Jangho’s] Sect. D Questionnaire Resp., A-570-967 (Dec. 12,
2013) at D-7 reproduced in Def.’s App., ECF No 35-3 at Tab 28.
Page 37
the record as a whole, Commerce’s finding was reasonable, and
must be sustained. See Nippon Steel, 458 F.3d at 1351.47
CONCLUSION
For the foregoing reasoning, Commerce’s determination
is affirmed in part and remanded in part.
The court remands to Commerce for further
consideration in accordance with this opinion. Commerce shall
have until October 28, 2016 to complete and file its remand
redetermination. Plaintiffs shall have until November 10, 2016
to file comments. Defendant and Defendant-Intervenor shall have
until November 21, 2016 to file any reply.
IT IS SO ORDERED.
/s/Donald C. Pogue
Donald C. Pogue, Senior Judge
Dated: September 19, 2016
New York, NY
47Because Commerce’s determination that Jangho did not import
window wall units during the period of review was based on a
reasonable reading of the record evidence, the court does not
reach the question of whether Jangho’s window wall imports
should be excluded in keeping with NR Window Walls.