SunEdison, Inc. v. United States

Slip Op. 16 - 
UNITED STATES COURT OF INTERNATIONAL TRADE
SUNEDISON, INC.,
Plaintiff, Before: Donald C. Pogue,
Senior Judge
v.
Consol. Court No. 15-000661
UNITED STATES,
Defendant.
OPINION and ORDER
[remanding Department of Commerce’s antidumping duty scope
determination]
Dated: June 14, 2016
David S. Christy, Jr., Michael P. House, and David J.
Townsend, Perkins Coie LLP, of Washington, DC, for Plaintiff
SunEdison, Inc.
J. Kevin Horgan and Alexandra H. Salzman, deKieffer
& Horgan, PLLC, of Washington, DC, for Plaintiffs Kyocera Solar,
Inc. and Kyocera Mexicana S.A. de C.V.
Joshua E. Kurland and Agatha Koprowski, Trial
Attorneys, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for the Defendant.
Also on the brief were Benjamin C. Mizer, Principal Deputy
Assistant Attorney General, Jeanne E. Davidson, Director, and
Reginald T. Blades, Jr., Assistant Director. Of counsel was
Scott D. McBride, Senior Attorney, Office of the Chief Counsel
for Trade Enforcement & Compliance, U.S. Department of Commerce,
of Washington, DC.
Timothy C. Brightbill and Usha Neelakantan,
1 This action is consolidated with Kyocera Solar, Inc. v. United
States, Ct. No. 15-00081. Order, July 1, 2015, ECF No. 21,
at ¶ 4; Order, Apr. 28, 2016, ECF No. 64.
Consol. Ct. No. 15-00066 Page 2
Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor
SolarWorld Americas, Inc.
Pogue, Senior Judge: This consolidated action arises
from the final affirmative determination made by the U.S.
Department of Commerce (“Commerce”) in its antidumping
investigation of certain crystalline silicon photovoltaic
products (solar cells and panels) from Taiwan.2 Before the court
are motions for judgment on the agency record, challenging
Commerce’s final determinations regarding the scope of these
proceedings.3
The court has jurisdiction pursuant to Section
516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended,
19 U.S.C. § 1516a(a)(2)(B)(i) (2012),4 and 28 U.S.C. § 1581(c)
(2012).
As explained below, Commerce’s final scope definition
2 See Certain Crystalline Silicon Photovoltaic Products from
Taiwan, 79 Fed. Reg. 76,966 (Dep’t Commerce Dec. 23, 2014)
(final determination of sales at less than fair value) and
accompanying Issues & Decision Mem., A-583-853, Investigation
(Dec. 15, 2014) (“Solar II Taiwan I&D Mem.”) cmt. 1.
3 See Br. of Pl. SunEdison, Inc. in Supp. of Pl.’s Mot. for J.
Upon the Agency R., ECF Nos. 32 (conf. version) & 33 (pub.
version) (“SunEdison’s Br.”); Kyocera Solar, Inc. & Kyocera
Mexicana S.A. de C.V. Mem. in Supp. of Mot. for J. on the
Agency R., ECF Nos. 29 (conf. version) & 30 (pub. version)
(“Kyocera’s Br.”).
4 Further citations to the Tariff Act of 1930, as amended, are to
the relevant provisions of Title 19 of the U.S. Code, 2012
edition.
Consol. Ct. No. 15-00066 Page 3
is remanded for consistency with, and based on the same
reasoning as, related proceedings concerning solar panels from
the People’s Republic of China (“China” or “PRC”).5 Essentially,
Commerce’s final scope determination, in both cases, treated
solar panels differently depending on their country of assembly,
and failed to consider or discuss either the proportion of
production necessary to determine a solar panel’s country of
origin or the reasonableness of applying duties to the entire
value of solar panels assembled in the PRC when only a small
percentage of the cost of production actually occurs there.
After a statement of the background, arguments
presented, and standard of review, the Plaintiffs’ challenges to
Commerce’s final scope determination are discussed below.
BACKGROUND
Relevant background leading to this case is summarized
in the court’s prior opinion.6 Briefly, the Solar II PRC opinion
addressed Commerce’s scope determinations in related proceedings
concerning solar panels from China that are assembled from cells
5 See SunPower Corp. v. United States, Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, (June 8, 2016)
(“Solar II PRC Slip Op.” or “the Solar II opinion”);
infra Discussion Sections IV, VI, & VII.
6 Solar II PRC Slip Op., Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, at Background Sections I
& II.
Consol. Ct. No. 15-00066 Page 4
manufactured outside of China,7 including specifically cells that
were manufactured in Taiwan (the “Solar II PRC” proceedings).8
Commerce’s final scope definition here (in the “Solar II Taiwan”
proceedings) covers all solar cells manufactured in Taiwan that
are assembled into panels anywhere in the world, except those
covered by the Solar II PRC proceedings because they are
assembled into panels in China.9 Both cases concern the rules of
origin for solar panels manufactured from Taiwanese cells. For
this reason, the issues here are inextricably entwined with
those already addressed in the Solar II PRC opinion.
Familiarity with the Solar II PRC opinion is therefore presumed.
Solar panels assembled from solar cells made in the
PRC were also, and initially, the subject of separate
proceedings (the “Solar I PRC” proceedings). The Solar I PRC
proceedings resulted in antidumping and countervailing duty
orders covering all solar cells manufactured in China, whether
or not and regardless of where in the world such cells are
7 Solar panels (also referred to as modules or laminates) are
assembled from solar cells, which use crystalline silicon to
convert sunlight into electricity. Certain Crystalline Silicon
Photovoltaic Products from China and Taiwan, USITC Pub. 4519,
Inv. Nos. 701-TA-511 & 731-TA-1246-1247 (Feb. 2015) (final
determination) (“Solar II ITC Final Determination”) at 10.
8 Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at Background Section II & Discussion
Section IV.
9 See Solar II Taiwan I&D Mem. cmt. 1 at 23.
Consol. Ct. No. 15-00066 Page 5
assembled into solar panels prior to exportation to the United
States.10
In the Solar I PRC proceedings, Commerce determined
that “solar module assembly does not substantially transform
solar cells such that it changes the country-of-origin.”11
Accordingly, Commerce concluded that “where solar cell
production occurs in a different country from solar module
assembly, the country-of-origin of the solar modules/panels is
the country in which the solar cell was produced [and not the
country of panel assembly].”12
10See Crystalline Silicon Photovoltaic Cells, Whether or Not
Assembled into Modules, from the [PRC], 77 Fed. Reg. 63,791
(Dep’t Commerce Oct. 17, 2012) (final determination of sales
at less than fair value, and affirmative final determination of
critical circumstances, in part) and accompanying Issues
& Decision Mem., A-570-979, Investigation (Oct. 9, 2012)
(“Solar I PRC AD I&D Mem.”); Crystalline Silicon Photovoltaic
Cells, Whether or Not Assembled into Modules, from the [PRC],
77 Fed. Reg. 63,788 (Dep’t Commerce Oct. 17, 2012) (final
affirmative countervailing duty determination and final
affirmative critical circumstances determination) and
accompanying Issues & Decision Mem., C-570-980, Investigation
(Oct. 9, 2012); Solar II PRC Slip Op., Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, at Background Section I.
11[Commerce’s] Mem. re Scope Clarification, Crystalline Silicon
Photovoltaic Cells, Whether or Not Assembled into Modules, from
the [PRC], A-570-979 & C-570-980, Investigations (Mar. 19,
2012), reproduced in, e.g., App. to Br. of Consol. Pl. Suniva,
Inc. in Supp. of its Mot. for J. on the Agency R., Consol. Ct.
No. 15-00067, ECF No. 58-3 at Tab 1 Ex. 2 (“Solar I PRC Scope
Clarification Mem.”), at 8 (unchanged in Solar I PRC AD I&D Mem.
cmt. 1 at 6–7).
12 Id.
Consol. Ct. No. 15-00066 Page 6
Following the imposition of the Solar I PRC orders,
however, domestic producer SolarWorld Americas Incorporated
(“SolarWorld”) (now Defendant-Intervenor in this action)
petitioned Commerce to initiate additional proceedings.
SolarWorld alleged, inter alia, that after the Solar I PRC
orders were imposed, exports of solar panels to the United
States from China shifted from panels assembled from cells that
were also made in China, to panels assembled from cells
“completed or partially manufactured in Taiwan or other
countries (i.e., cells manufactured in Taiwan from Taiwanese
inputs, or cells manufactured in Taiwan or other countries from
Chinese inputs, including wafers).”13
Commerce agreed that this “measurable shift in trade
flows . . . resulted in increased imports of non-subject modules
produced in China.”14 In response, Commerce initiated
13Pet. for Imposition of Antidumping & Countervailing Duties
Pursuant to Secs. 701 & 731 of the Tariff Act of 1930, as
Amended, Certain Crystalline Silicon Photovoltaic Products from
the [PRC] and Taiwan, A-570-010, A-583-853, & C-570-011
Investigations (Dec. 31, 2013), reproduced in App. to Def.’s
Resp. in Opp’n to Pls.’ Rule 56.2 Mots. for J. on the Agency R.,
ECF Nos. 53-1 (conf. version) & 54-1 (pub. Version) at Tab 1
(“Solar II Pet.”), at 5-6.
14Solar II Taiwan I&D Mem. cmt. 1 at 21 (citing Solar II Pet.,
[ECF Nos. 53-1 & 54-1 at Tab 1], at 3, 5-6, 21, 34, 37, 53);
see also id. at 17 (“[SolarWorld’s Solar II] Petition claimed
that Chinese solar producers were ‘using cells fully or
partially manufactured in Taiwan in the modules they assembled
for export to the United States,’ which allowed the Chinese
(footnote continued)
Consol. Ct. No. 15-00066 Page 7
(1) antidumping and countervailing duty investigations that
ultimately resulted in orders covering all panels assembled in
China from solar cells made outside of China, including
Taiwanese cells15 (the Solar II PRC proceedings); and (2) an
antidumping investigation that ultimately resulted in an order
covering all solar cells produced in Taiwan, whether or not, and
regardless of where, assembled into panels, except those
assembled into panels in China16 (the Solar II Taiwan
proceedings).
Plaintiffs here17 are U.S. importers and a foreign
producer of solar panels containing solar cells manufactured in
Taiwan.18 Plaintiffs now challenge Commerce’s final
solar producers to ‘export those modules, duty-free, to the U.S.
market.’ . . . The Petition claimed that Taiwanese cell and
module imports increased by 85 percent, in large part as a
result of this alleged loophole.”) (quoting and citing,
respectively, Solar II Pet., [ECF Nos. 53-1 & 54-1 at Tab 1],
at 4, 6); id. at 21 (“[F]ollowing the implementation of the
[Solar I PRC] AD and CVD orders . . ., there has been a
measurable shift in trade flows that has resulted in increased
imports of non-subject modules produced in China.”)
(citing Solar II Pet., [ECF Nos. 53-1 & 54-1 at Tab 1], at 3,
5-6, 21, 34, 37, 53).
15See Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at Background Section II & Discussion Section
IV).
16 See Solar II Taiwan I&D Mem. cmt. 1 at 23.
17SunEdison, Inc. (“SunEdison”), and Kyocera Solar, Inc. and
Kyocera Mexicana S.A. de C.V. (collectively “Kyocera”).
18 Compl., ECF No. 11, at ¶ 5; see Compl., Ct. No. 15-00081,
(footnote continued)
Consol. Ct. No. 15-00066 Page 8
determination regarding the scope of the Solar II Taiwan
proceedings. Specifically, the Plaintiffs make the following
arguments regarding Commerce’s final scope determination in the
Solar II Taiwan investigation.
PARTIES’ ARGUMENTS
(I) Commerce’s late modification of the Solar II
Taiwan scope substantially deprived interested parties –
including Kyocera, a Mexican assembler of Taiwanese solar cells
into panels exported to the United States – of due process.19
(II) Commerce unlawfully expanded the scope of
Solar II Taiwan, after the close of factual submissions, to
include merchandise that had been excluded from Commerce’s
unfair pricing analysis (as well as the International Trade
ECF No. 6, at ¶¶ 5-6, 9, 17.
19See Kyocera’s Br., ECF Nos. 29 & 30, at 3 (describing
Kyocera’s production structure), 24-25 (arguing that Commerce’s
approach to scope definition throughout this investigation
deprived Kyocera of due process); see also SunEdison’s Br.,
ECF Nos. 32 & 33, at 28 (“[Commerce] deprived respondents of the
opportunity to comment on the novel scope adopted in the final
determination by issuing it so late in the proceeding.”);
id. at 9 (“[Commerce] did not address any of the comments
opposing [its ultimate] scope proposal . . ., even though it
adopted in its final determination virtually all of [that]
proposal with respect to Taiwan.”).
Consol. Ct. No. 15-00066 Page 9
Commission’s injury analysis) throughout the investigations.20
(III) Commerce’s final Solar II Taiwan scope
determination was contrary to explicit statutory and regulatory
requirements.21 Specifically, Plaintiffs argue that Commerce’s
final Solar II Taiwan scope determination was contrary to one or
more of the following statutory/regulatory provisions:
(A) 19 U.S.C. § 1673 (providing Commerce’s authority to impose
antidumping duties on products within “a class or kind of
foreign merchandise”);22 (B) 19 U.S.C. §§ 1677b(a) (requiring a
“fair comparison” between prices of the foreign like product
20See SunEdison’s Br., ECF Nos. 32 & 33, at 28 (“In reporting
U.S. sales in their questionnaire responses, Commerce instructed
the Taiwan respondents to follow . . . a scope definition that
Commerce totally abandoned [in the final determination,] long
after verifications of those responses were completed . . . .”);
id. at 26 (“In Allegheny Bradford, this Court explained that
‘Commerce’s discretion to define and clarify the scope of an
investigation is limited in part by concerns for the finality of
administrative action, which caution against including a product
that was understood to be excluded at the time the investigation
began.’”) (quoting Allegheny Bradford Corp. v. United States,
28 CIT 830, 342 F. Supp. 2d 1172, 1187-88 (2004) (citation
omitted)); Kyocera’s Br., ECF Nos. 29 & 30, at 7 (“[Commerce]’s
attempt to expand the [final] scope of the [Solar II Taiwan]
investigation comes too late. The [prior] scope ha[d] not only
been used in [Commerce]’s selection of mandatory respondents, it
has also defined the scope of the International Trade
Commission’s injury investigation . . . .”) (quoting Kyocera’s
administrative case brief below).
21SunEdison’s Br., ECF Nos. 32 & 33, at 14-16, 21-24; Kyocera’s
Br., ECF Nos. 29 & 30, at 11-16.
22 SunEdison’s Br., ECF Nos. 32 & 33, at 12-14; 19 U.S.C. § 1673.
Consol. Ct. No. 15-00066 Page 10
from the country under investigation (normal value) and the U.S.
export prices of the subject merchandise) & 1677(16)(A)-(C)
(requiring that the “foreign like product” must be “produced in
the same country” as the subject merchandise);23 (C) 19 U.S.C.
§ 1677j(b) (dealing with circumvention of existing antidumping
duty orders) & 19 C.F.R. § 351.225(h) (providing for Commerce’s
issuance of scope rulings, under existing antidumping duty
orders, for “products completed or assembled in other foreign
countries”).24 SunEdison also argues that, (D) “by enacting and
revising the antidumping law in 1984, 1988 and 1994, Congress
bound Commerce to [continue to] use the substantial
transformation test to determine the scope of antidumping duty
orders . . . .”25
(IV) Commerce’s final Solar II Taiwan scope
determination unlawfully departed from prior practice without
23 SunEdison’s Br., ECF Nos. 32 & 33, at 14-15.
24 Kyocera’s Br., ECF Nos. 29 & 30, at 11-16.
25SunEdison’s Br., ECF Nos. 32 & 33, at 21 (relying on GPX Int’l
Tire Corp. v. United States, 666 F.3d 732, 739 (Fed. Cir. 2011)
(“In the case of a widely known judicial decision or agency
practice, ‘Congress is presumed to be aware of an administrative
or judicial interpretation of a statute and to adopt that
interpretation when it re-enacts a statute without change.’”)
(quoting Lorillard v. Pons, 434 U.S. 575, 580 (1978));
id. at 21-25 (expanding on this argument).
Consol. Ct. No. 15-00066 Page 11
sufficient explanation.26
(V) Commerce’s conclusion that, with the exception of
Taiwanese cells assembled into solar panels in China, all panels
assembled from Taiwanese cells are subject to the Solar II
Taiwan proceedings as products of Taiwan, regardless of where
they are assembled, is not supported by substantial evidence.27
Specifically, Commerce’s determination that Taiwanese solar
cells are not substantially transformed when assembled into
panels in Mexico is unreasonable in light of the evidentiary
record.28
(VI) Commerce unreasonably determined to apply
antidumping duties on the full value of the panels into which
Taiwanese solar cells are incorporated, rather than solely the
value of the cells themselves.29
(VII) Commerce unreasonably excluded from its final
dumping analysis third-country sales that the mandatory
respondents reported as ultimately destined for the United
26 SunEdison’s Br., ECF Nos. 32 & 33, at 12-13, 21.
27 Kyocera’s Br., ECF Nos. 29 & 30, at 7, 18-23.
28See id.; infra Standard of Review Section (defining
“substantial evidence” review).
29SunEdison’s Br., ECF Nos. 32 & 33, at 10, 54-56; Kyocera’s
Br., ECF Nos. 29 & 30, at 8, 15-16, 25-26.
Consol. Ct. No. 15-00066 Page 12
States.30
Following a statement of the applicable standard of
review, each group of arguments is addressed in turn below.
STANDARD OF REVIEW
The court will sustain Commerce’s antidumping
determinations if they are supported by substantial evidence and
are otherwise in accordance with law.31 Substantial evidence
refers to “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion,”32 considering any
relevant evidence that fairly detracts from the reasonableness
of the agency’s determination.33 The substantial evidence
standard of review can be roughly translated to mean “is the
determination unreasonable?”34 The agency must “examine the
relevant data and articulate a satisfactory explanation for its
30 SunEdison’s Br., ECF Nos. 32 & 33, at 4-6, 27, 33-40.
31 See 19 U.S.C. § 1516a(b)(1)(B)(i).
32SKF USA, Inc. v. United States, 537 F.3d 1373, 1378
(Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)).
33 Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
34Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351
(Fed. Cir. 2006) (quotation and alteration marks and citation
omitted).
Consol. Ct. No. 15-00066 Page 13
action,”35 including “a ‘rational connection between the facts
found and the choice made.’”36
“[A]n agency determination that is arbitrary is ipso
facto unreasonable,”37 and a determination is arbitrary when it
fails to “consider an important aspect of the problem,”38 or
“treat[s] similar situations in dissimilar ways.”39
35Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co.,
463 U.S. 29, 43 (1983).
36Id. (quoting Burlington Truck Lines v. United States, 371 U.S.
156, 168 (1962)).
37Shenyang Yuanda Aluminum Indus. Eng’g Co. v. United States,
__ CIT __, __ F. Supp. 3d __, Slip Op. 16-11, 2016 WL 524268,
at *17 n.148 (Feb. 9, 2016) (quoting Ward v. Sternes, 334 F.3d
696, 704 (7th Cir. 2003) (“[A] decision [that] is so
inadequately supported by the record as to be arbitrary [is]
therefore objectively unreasonable.”) (quotation marks and
citations omitted)).
38 State Farm, 463 U.S. at 43.
39Anderson v. U.S. Sec’y of Agriculture, 30 CIT 1742, 1749, 462
F. Supp. 2d 1333, 1339 (2006) (“Agencies have a responsibility
to administer their statutorily accorded powers fairly and
rationally, which includes not ‘treat[ing] similar situations in
dissimilar ways.’”) (quoting Burinskas v. NLRB, 357 F.2d 822,
827 (D.C. Cir. 1966) (“[An agency] cannot act arbitrarily nor
can it treat similar situations in dissimilar ways.”) (citation
and footnote omitted)); see also id. (“Indeed, a principal
justification for the administrative state is that in ‘areas of
limitless factual variations, like cases will be treated
alike.’”) (quoting Nat’l Muffler Dealers Ass’n v. United States,
440 U.S. 472, 477 (1979) (citations omitted)) (also quoting
South Shore Hosp., Inc. v. Thompson, 308 F.3d 91, 101
(1st Cir. 2002) (“The goal of regulation is not to provide exact
uniformity of treatment, but, rather, to provide uniformity of
rules so that those similarly situated will be treated
alike.”)); Trs. in Bankruptcy of N. Am. Rubber Thread Co.
v. United States, 32 CIT 663, 665, 558 F. Supp. 2d 1367, 1370
(footnote continued)
Consol. Ct. No. 15-00066 Page 14
Where the statutory language is sufficiently broad to
permit a range of policy choices, the agency may change course
from its prior practice and adopt a new approach within its
statutory authority,40 but it must explain how the new policy is
consistent with the continued relevance (if any) of the factual
findings on which the agency’s prior policy was based.41
“[A] reasoned explanation is needed for disregarding facts and
circumstances that underlay or were engendered by the prior
(2008) (“Generally, an agency action is arbitrary when the
agency offers insufficient reasons for treating similar
situations differently.”) (quotation and alteration marks and
citation omitted).
40See, e.g., Nakornthai Strip Mill Pub. Co. v. United States,
32 CIT 1272, 1276, 587 F. Supp. 2d 1303, 1307 (2008) (“Commerce
has discretion to change its policies and practices as long as
they are reasonable and consistent with their statutory mandate
and may adapt its views and practices to the particular
circumstances at hand, so long as the agency’s decisions are
explained and supported by substantial evidence on the record.”)
(quotation and alteration marks and citation omitted).
41See British Steel PLC v. United States, 127 F.3d 1471, 1475
(Fed. Cir. 1997) (“An agency is obligated to follow [its]
precedent, and if it chooses to change, it must explain why.”)
(quotation marks and citation omitted); State Farm, 463 U.S.
at 46–48 (holding that an agency may not change course without
addressing the continued relevance of factual findings on which
the agency’s prior policy was based); FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 537 (2009) (J. Kennedy, concurring
in part and concurring in judgment) (explaining that State Farm
followed the principle that an agency “cannot simply disregard
contrary or inconvenient factual determinations that it made in
the past, any more than it can ignore inconvenient facts when it
writes on a blank slate”).
Consol. Ct. No. 15-00066 Page 15
policy.”42 Thus, “when departing from its own precedent,
Commerce must explain its departure,”43 providing a rational link
between the facts found and the conclusions reached, after
considering all important aspects of the problem.
DISCUSSION
I. Remand on Other Grounds Makes Reaching Due Process
Arguments Unnecessary.
Because remand of Commerce’s final Solar II Taiwan
scope determinations is warranted on other grounds,44 and because
the parties will therefore have ample opportunity to address the
scope issues on remand, Plaintiffs’ due process challenges to
the final scope determination are moot. The court therefore
offers no opinion in this regard.
In addition, Kyocera’s claim that, as a third-country
assembler of Taiwanese solar cells into panels, it was deprived
of its “right to participate in the investigation as a
respondent and submit information demonstrating that it was not
42 Fox, 556 U.S. at 516.
43Nakornthai, 32 CIT at 1276, 587 F. Supp. 2d at 1308 (citing
and quoting Trs. in Bankruptcy of N. Am. Rubber Thread Co.
v. United States, 31 CIT 2040, 2047, 533 F. Supp. 2d 1290, 1297
(2007) (“Commerce [must] attempt to distinguish the reasoning
set forth in [prior cases] from the present case.”) (alterations
in Nakornthai)).
44 See infra Discussion Section IV.
Consol. Ct. No. 15-00066 Page 16
dumping solar products”45 is entwined with the scope
determinations remanded here and in Solar II PRC.46 Accordingly,
this matter will be clarified once the issues remanded here are
resolved, and the scope of these proceedings is finalized.
II. Commerce’s Final Solar II Taiwan Scope Modification’s
Effect On the Databases Used Throughout the Investigation
Plaintiffs next argue that Commerce’s final Solar II
Taiwan scope determination unlawfully altered the sales
databases relied on throughout the investigation, resulting in
incongruence between the sales used to determine dumping
liability and those ultimately covered by the order.47 Because
45 Kyocera’s Br., ECF Nos. 29 & 30, at 25.
46See infra Discussion Sections IV, VI, & VII; Solar II PRC Slip
Op., Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
47See SunEdison’s Br., ECF Nos. 32 & 33, at 28 (“In reporting
U.S. sales in their questionnaire responses, Commerce instructed
the Taiwan respondents to follow . . . a scope definition that
Commerce totally abandoned long after verifications of those
responses were completed . . . .”); id. at n.14 (noting that in
Solar II PRC Commerce had emphasized that its final scope
modification “‘result[ed] in no change to [the mandatory
respondents’] reported database[s]’”) (quoting Issues & Decision
Mem., Certain Crystalline Silicon Photovoltaic Products from the
[PRC], A-570-010, Investigation (Dec. 15, 2014) (adopted in
79 Fed. Reg. 76,970 (Dep’t Commerce Dec. 23, 2014) (final
determination of sales at less than fair value)) (“Solar II PRC
AD I&D Mem.”) cmt. 1 at 19); Kyocera’s Br., ECF Nos. 29 & 30,
at 7 (quoting Kyocera’s administrative case brief below
(“[Commerce’s scope modification changed the scope from that]
used in [Commerce]’s selection of mandatory respondents [and]
. . . the International Trade Commission’s injury investigation,
which has undertaken no analysis of the impact of third-country
(footnote continued)
Consol. Ct. No. 15-00066 Page 17
this claim also implicates the specific agency decisions that
are remanded here and in Solar II PRC,48 the court also defers
consideration of this matter until the issues remanded here are
resolved, and the scope of these proceedings is finalized.
III. Commerce’s Final Solar II Taiwan Scope Determination Was
Not Contrary to Explicit Statutory and Regulatory
Requirements.
Next, Plaintiffs argue that Commerce’s final Solar II
Taiwan scope determination was contrary to one or more
statutory/regulatory provisions.49 Each argument is addressed in
turn.
solar modules on the domestic industry.”)); but see Solar II ITC
Final Determination, supra note 7, at 7 (“The [International
Trade] Commission recognized early in these [Solar II PRC and
Solar II Taiwan] investigations that changes in the scopes were
likely and took steps to ensure that it collected the
information that would allow it to fulfill its statutory
obligations. In the questionnaires issued in the final phase of
these investigations, the Commission asked U.S. producers and
importers to segregate their import data into sixteen
categories, which were designed to provide the Commission with
flexibility to adjust the data to conform to different possible
scope definitions. The manner in which the Commission collected
the data in these investigations permitted the agency and the
parties to consider and evaluate the implications of various
possible scope definitions to the Commission’s analysis.”)
(citations omitted).
48See infra Discussion Sections IV, VI, & VII; Solar II PRC
Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
49 See supra notes 21-25 and accompanying text.
Consol. Ct. No. 15-00066 Page 18
A. 19 U.S.C. § 1673
SunEdison argues that Commerce impermissibly “assigned
to [the statutory phrase] ‘a class or kind of foreign
merchandise’ different and inconsistent meanings for the same
merchandise – modules containing Taiwanese-origin cells –
depending on where the module assembly took place.”50
But as explained in the Solar II PRC opinion, it is
well-established that the scope of an antidumping order is
defined by two separate inquiries – (1) is the product within
the relevant class/kind of merchandise? and (2) did the product
originate in the country covered by the order?51 Here, the
relevant class/kind of merchandise is solar cells, whether or
not assembled into panels.52 The essence of the parties’ dispute
concerns the second inquiry – Commerce’s rule for determining
whether a given product within this class/kind of merchandise
originates in the country covered by the order. Commerce did
50SunEdison’s Br., ECF Nos. 32 & 33, at 14 (quoting 19 U.S.C.
§ 1673).
51Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at 25 (quoting and citing relevant
authorities).
52See Solar II Taiwan I&D Mem. Section III (Scope of the
Investigation) at 4 (“The merchandise covered by this
investigation is crystalline silicon photovoltaic [i.e., solar]
cells, and modules, laminates and/or panels consisting of [such]
cells, whether or not partially or fully assembled into other
products, including building integrated materials.”).
Consol. Ct. No. 15-00066 Page 19
not assign different and inconsistent meanings to the phrase
“class or kind of foreign merchandise” in 19 U.S.C. § 1673, but
rather applied two different origin rules to products within
this class or kind of merchandise, depending on where the solar
cells were assembled into panels.53 Because the statute does not
directly address this concern, Commerce’s decision in this
regard was not explicitly contrary to the plain language of
19 U.S.C. § 1673.
B. 19 U.S.C. § 1677b(a) & 1677(16)(A)-(C)
SunEdison also argues that, because “[t]he statute
defines the term ‘country’ as limited to a single country for
purposes of antidumping proceedings,”54 it therefore “compels a
uniform test to determine when the foreign like product is
‘produced in the same country’ as subject merchandise, because
multiple tests arbitrarily create a mismatch between the
universes [i.e., respective scopes] of subject merchandise and
the foreign like product.”55 Because this claim is related to
53See infra Discussion Section IV; Solar II PRC Slip Op.,
Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
54SunEdison’s Br., ECF Nos. 32 & 33, at 14-15 (quoting 19 U.S.C.
§ 1677(3)).
55Id. (quoting 19 U.S.C. § 1677(16)) (also citing and quoting
Slater Steels v. United States, 27 CIT 1786, 1788, 297 F. Supp.
2d 1362, 1364 (2003) (“Under any of these definitions [of normal
value], both the ‘foreign like product’ and the ‘subject
(footnote continued)
Consol. Ct. No. 15-00066 Page 20
one of the grounds for remand, both here and in Solar II PRC,56
the court will defer its adjudication of this issue until the
agency has had an opportunity to reconsider on remand.
C. 19 U.S.C. § 1677j(b) & 19 C.F.R. § 351.225(h)
Next, Kyocera argues that Commerce’s decision – to
include, within the scope of this order on merchandise from
Taiwan, all Taiwanese solar cells that are assembled into panels
in Taiwan or in other countries (except those that are assembled
into panels in China) – should be evaluated under 19 U.S.C.
§ 1677j(b) (dealing with circumvention of existing antidumping
duty orders) and 19 C.F.R. § 351.225(h) (providing for
Commerce’s issuance of scope rulings, under existing antidumping
duty orders, for “products completed or assembled in other
foreign countries”).57
As Kyocera acknowledges, however, these provisions
apply to circumstances where an order with a defined scope is
already in effect,58 whereas here Commerce was defining the scope
merchandise’ must be in the same country as the merchandise that
is the subject of the investigation.”) (footnote omitted).
56See infra Discussion Sections IV & VI; Solar II PRC Slip Op.,
Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
57 Kyocera’s Br., ECF Nos. 29 & 30, at 11-16.
58See id. at 14; 19 U.S.C. § 1677j(b)(1)(A)(i) (providing that
this provision applies to “merchandise imported into the United
States [that] is of the same class or kind as any merchandise
(footnote continued)
Consol. Ct. No. 15-00066 Page 21
of an order prior to its imposition. Although Kyocera argues
that this distinction is immaterial,59 the distinction is in fact
significant. Here, Commerce is fashioning the foundational
scope of a proceeding, before the imposition of the order,
rather than extending an existing order to cover new merchandise
so as to address circumvention of an order’s pre-existing scope.
19 U.S.C. § 1677j(b) and 19 C.F.R. § 351.225(h) are therefore
inapposite to the specific issues presented here.
D. Congress Did Not Bind Commerce To Always Use The
Substantial Transformation Test To Establish the
Origin of Products Manufactured in Multiple Countries.
Finally, Congress did not require Commerce to continue
to use its substantial transformation test60 when determining the
produced in a foreign country that is the subject of . . . an
antidumping duty order [that is already] issued”) (emphasis
added); 19 C.F.R. § 351.225(h) (noting that this regulatory
provision applies once an antidumping duty order “is [already]
in effect”).
59See Kyocera’s Br., ECF Nos. 29 & 30, at 14 (arguing that “the
same reasoning applies” regardless of whether Commerce is
initially establishing an origin rule for a class of merchandise
in which products are manufactured in more than one country, or
whether the agency is subsequently asked to cover additional
merchandise that was not previously covered by the origin rule
initially established).
60See infra Discussion Section V (discussing Commerce’s
substantial transformation test); Solar II Taiwan I&D Mem.
cmt. 1 at 19-23 (applying the substantial transformation test to
determine the origin of all panels assembled from solar cells
made outside the country-of-assembly, except panels assembled in
China); Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at Background Sections I & II, and
(footnote continued)
Consol. Ct. No. 15-00066 Page 22
origin of (and hence the appropriate foreign market for
calculating the comparison normal values for) merchandise
manufactured in multiple countries.61 Because the plain language
of the antidumping statute does not unambiguously prescribe any
specific approach to origin determinations, Commerce may
exercise reasonable discretion in selecting a reasonable method
for such determinations.62 Thus even if SunEdison were correct
that, by revisiting the antidumping law without explicitly
rejecting Commerce’s prior use of the substantial transformation
test to determine the origin of products made in multiple
countries, Congress ratified the agency’s use of this test,63 it
does not follow that the agency is therefore required to always
exercise its discretion in the same way. That Congress did not
reject the agency’s particular exercise of discretion is not
equivalent to a requirement that the agency must always exercise
Discussion Section IV (providing additional background and
discussion).
61See SunEdison’s Br., ECF Nos. 32 & 33, at 21-25 (making the
argument that “Congress bound Commerce to use the substantial
transformation test to determine the scope of [all] antidumping
duty orders”).
62 See supra Standard of Review Section.
63See SunEdison’s Br., ECF Nos. 32 & 33, at 21-25 (making this
argument).
Consol. Ct. No. 15-00066 Page 23
its discretion using the same method.64
IV. Commerce’s Final Solar II Taiwan Scope Determination Is
Remanded for Consistency with the Solar II PRC Proceedings.
Next, SunEdison argues that Commerce’s final Solar II
Taiwan scope determination unlawfully departed from prior
practice without sufficient explanation.65 Both here in Solar II
Taiwan and in Solar II PRC, Commerce established two different
origin rules for solar panels, depending on where they are
assembled.66 As this Court has already ruled with regard to the
64See, e.g., Nakornthai, 32 CIT at 1276, 587 F. Supp. 2d at 1307
(“Commerce has discretion to change its policies and practices
as long as they are reasonable and consistent with their
statutory mandate and may adapt its views and practices to the
particular circumstances . . . at hand, so long as the agency’s
decisions are explained and supported by substantial evidence on
the record.”) (quotation and alteration marks and citation
omitted). SunEdison’s argument regarding the Statement of
Administrative Action (“SAA”), SunEdison’s Br., ECF Nos. 32
& 33, at 24 (arguing that the SAA requires Commerce to always
use the substantial transformation test to determine the origin
of products manufactured in multiple countries) (quoting Uruguay
Round Agreements Act, SAA, H.R. Doc. No. 103–316 (1994) at 844,
reprinted in 1994 U.S.C.A.A.N. 4040 (“Outside of a situation
involving circumvention of an antidumping duty order, a
substantial transformation of a good in an intermediate country
would render the resulting merchandise a product of the
intermediate country rather than the original country of
production.”)), is unpersuasive for the same reason. That the
SAA accepts “substantial transformation” as sufficient to
determine country-of-origin does not mean that it requires this
test as necessary for that purpose.
65 See SunEdison’s Br., ECF Nos. 32 & 33, at 12-13, 21-22.
66See Solar II Taiwan I&D Mem. cmt. 1 at 23 (“[S]olar modules
assembled in the PRC using Taiwanese cells are within the scope
of, and therefore subject to, the [Solar II PRC] investigations
(footnote continued)
Consol. Ct. No. 15-00066 Page 24
Solar II PRC proceedings, in doing so, Commerce did not provide
sufficient explanation for (1) departing from the agency’s prior
practice of establishing a single consistent origin rule for all
products within a single class or kind of merchandise;
(2) treating similarly-situated products differently; and
(3) departing from the agency’s prior practice of calculating
the foreign like product’s normal value in the market where the
majority of production of the subject merchandise took place.67
Because the final Solar II Taiwan scope incorporates
the Solar II PRC exception for solar panels assembled in China –
which exempts all such panels from the otherwise generally-
applicable rule that the origin of solar panels is determined by
the origin of their constituent cells68 – these same concerns are
also implicated here.69 Accordingly, Commerce’s final Solar II
as Chinese modules . . . . This is in contrast to cells from
Taiwan which are used in the assembly of solar modules in other
countries . . ., [which] are considered Taiwanese in origin, and
are within the scope of this [Solar II Taiwan] investigation.”)
(footnote omitted); Solar II PRC Slip Op., Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, at Background Section II
& Discussion Section IV.
67Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at Discussion Section IV.
68See, e.g., Solar II Taiwan I&D Mem. cmt. 1 at 24 (“[T]he solar
cell determines the country of origin, unless manufactured into
a module, laminate or panel in the PRC.”).
69The Government’s additional reliance here on Certain Softwood
Lumber Products from Canada, 67 Fed. Reg. 15,545 (Dep’t Commerce
Apr. 2, 2002) (notice of final affirmative countervailing duty
(footnote continued)
Consol. Ct. No. 15-00066 Page 25
Taiwan scope determination must be remanded for the same reasons
as those elaborated in the court’s prior opinion,70 to ensure
that the agency’s approach in these proceedings is consistent.
determination and final negative critical circumstances
determination) (“Softwood Lumber from Canada”), in support of
the proposition that “[s]uch exclusions [as the exception from
the general origin rule for panels assembled in China] are
common,” Def.’s Resp. in Opp’n to Pls.’ Rule 56.2 Mots. for J.
on the Agency R., ECF Nos. 44 (conf. version) & 45 (pub.
version), at 33 (citing Softwood Lumber from Canada, 67 Fed.
Reg. at 15,547), is unpersuasive. In that case, Commerce
exempted softwood lumber products made in certain Canadian
Provinces (referred to as the “Maritime Provinces”) from its
countervailing duty investigation, Softwood Lumber from Canada,
67 Fed. Reg. at 15,547 (citing Certain Softwood Lumber Products
from Canada, 66 Fed. Reg. 40,228 (Dep’t Commerce Apr. 2, 2001)
(amendment to the notice of initiation of countervailing duty
investigation)), due to “unique circumstances,” 66 Fed. Reg.
at 40,228. Specifically, Commerce explained that “[t]hroughout
much of the history of this dispute, the Maritime Provinces have
been exempt from the various actions taken,” and that (unlike
here, with regard to solar panels) “[a]ll parties have generally
recognized that there are unique circumstances associated with
the Maritime Provinces and have supported those exemptions.” Id.
at 40,229. Thus not only was the exemption uncontested and
non-controversial (unlike here), the Softwood Lumber from Canada
example is in any event inapposite to the issue presented here
and in Solar II PRC with respect to the multiple origin rules
established for solar panels. Here the issue is not (as in
Softwood Lumber from Canada) that some products were exempted
from antidumping/countervailing duty liability (for whatever
political reasons), but rather that some products within the
class or kind of merchandise are treated using a different rule
than that which is otherwise generally applicable to products
within that overall class/kind. Softwood Lumber from Canada is
not an example of a case where the agency has established two
different national origin rules for products within the same
class or kind of merchandise.
70See Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at Discussion Section IV.
Consol. Ct. No. 15-00066 Page 26
V. Commerce’s Determination that Solar Cells Are Not
Substantially Transformed When Assembled Into Panels Is
Supported by Substantial Evidence.
Next, Plaintiff Kyocera argues that the Taiwanese
cells used to assemble Kyocera’s solar panels in Mexico are
substantially transformed in Mexico, such that they cannot be
assessed antidumping liability as products of Taiwan.71
Here, as in Solar I PRC, Commerce employed the
substantial transformation test that is the agency’s “usual
starting point” when deciding which country’s foreign market
should provide the basis for the antidumping liability of
products produced in multiple countries.72 Using this test,
Commerce found that (1) solar cells and panels are within the
same class or kind of merchandise; (2) solar panel assembly does
not change the nature or use of the product’s essential
component, the solar cell; and (3) solar panel assembly does not
constitute substantial or sophisticated processing of the
constituent solar cells.73 Accordingly, Commerce concluded that,
71See Kyocera’s Br., ECF Nos. 29 & 30, at 18-23; see also id.
at 7.
72Solar II Taiwan I&D Mem. cmt. 1 at 18; compare id. at 19-21,
with Solar I PRC Scope Clarification Mem., Consol. Ct.
No. 15-00067, ECF No. 58-3 at Tab 1 Ex. 2, at 8 (unchanged in
Solar I PRC AD I&D Mem. cmt. 1 at 6-7).
73Solar II Taiwan I&D Mem. cmt. 1 at 19-21 (explicitly also
relying on the analysis conducted for the same class/kind of
merchandise in Solar I PRC).
Consol. Ct. No. 15-00066 Page 27
“consistent with [the] determination in Solar I [PRC],” panel
assembly does not substantially transform the constituent solar
cells so as to change the cells’ country-of-origin.74
Kyocera argues that Commerce should have instead
concluded that solar cells are substantially transformed when
assembled into panels in Mexico, such that a solar panel’s
country-of-origin for antidumping purposes should be the country
in which the panel is assembled, rather than the country where
the constituent cells are produced.75 But Kyocera does not
directly challenge the factors that Commerce has chosen to use
for determining whether components produced in a country
different from where they are then incorporated into a finished
product are so transformed in the exporting country as to
justify an assessment of antidumping liability based on normal
values calculated in the market of ultimate assembly, rather
74See id.; see also Solar I PRC Scope Clarification Mem.,
Consol. Ct. No. 15-00067, ECF No. 58-3 at Tab 1 Ex. 2, at 8
(“[W]here solar cell production occurs in a different country
from solar module assembly, the country-of-origin of the solar
modules/panels is the country in which the solar cell was
produced.”) (unchanged in Solar I PRC AD I&D Mem. cmt. 1
at 6-7); Solar II PRC AD I&D Mem. cmt. 1 at 15 (“[Commerce]
determined in [Solar I PRC] that the solar cell [is] the
essential active component of the module, [and] that assembly of
cells into modules [does] not constitute substantial
transformation such that the assembled module could be
considered a product of the country of assembly . . . .”)
(citation omitted).
75 See Kyocera’s Br., ECF Nos. 29 & 30, at 7, 18-23.
Consol. Ct. No. 15-00066 Page 28
than the market of component production.76
Instead of making an argument about the reasonableness
of the factors of analysis that Commerce actually employed here,
Kyocera argues that Commerce should have used a different test,
analogizing this case to country-of-origin analyses undertaken
by different agencies in contexts unrelated to antidumping.77
But Customs’ country-of-origin determinations, made pursuant to
and in furtherance of entirely different statutory authority,
are inapposite to the issue presented here.78
76 See id.
77See id. at 19-21 (arguing that Commerce should have used the
country-of-origin test applied by the predecessor to U.S.
Customs & Border Protection (“Customs”) in Koru N. Am. v. United
States, 12 CIT 1120, 701 F. Supp. 229 (1998), enforcing
country-of-origin marking requirements under 19 U.S.C. § 1304
(1982), see Koru, 12 CIT at 1125-26, 701 F. Supp. at 233-34);
id. at 22-23 (arguing that Texas Instruments, Inc. v. United
States, 681 F.2d 778 (CCPA 1982), in which the court reviewed
Customs’ interpretation of 19 C.F.R. § 10.177(a) (1982),
relating to country-of-origin determinations for purposes of the
U.S. Generalized System of Preferences, see Texas Instruments,
681 F.2d at 781-82, constitutes “binding authority” in this
case).
78See Certain Cold-Rolled Carbon Steel Flat Products from
Argentina, 58 Fed. Reg. 37,062, 37,065 (Dep’t Commerce July 9,
1993) (notice of final determination of sales at less than fair
value) (“Cold-Rolled Steel from Argentina”) (explaining that the
statutory provisions governing Customs’ country-of-origin
determinations are separate from those governing Commerce’s
antidumping determinations, such that imported products may be
determined by different agencies to have different origins for
different statutory purposes); see also, e.g., Wax & Wax/Resin
Thermal Transfer Ribbon from the Republic of Korea, 69 Fed. Reg.
17,645, 17,648 (Dep’t Commerce Apr. 5, 2004) (notice of final
(footnote continued)
Consol. Ct. No. 15-00066 Page 29
Here, Commerce exercised its discretion to use the
test that it had previously established for determining which
country will be used to calculate normal values for antidumping
duty assessment when products are manufactured in multiple
countries.79 Kyocera neither addresses this particular analysis
nor makes any specific argument as to why it was not reasonable
determination of sales at not less than fair value) (“Ribbon
from Korea”) (“As [Commerce] has stated on numerous occasions,
[Customs] decisions regarding substantial transformation and
customs regulations . . . are not binding on [Commerce], because
we make these decisions with different aims in mind (e.g.,
anticircumvention).”) (citation omitted); Stainless Steel Round
Wire from Canada, 64 Fed. Reg. 17,324, 17,327 (Dep’t Commerce
Apr. 9, 1999) (notice of final determination of sales at less
than fair value) (“[W]e reiterate that the disciplines of the
[World Trade Organization] Agreement on Rules of Origin that are
currently in effect under Article 2 of the Agreement simply do
not require us to apply the country-of-origin determinations
made by the Customs Service when making determinations in
[antidumping] proceedings.”).
79See Solar II Taiwan I&D Mem. cmt. 1 at 19 (relying on Issues
& Decision Mem., Glycine from India, A-533-845, Investigation
(Mar. 28, 2008) (adopted in 73 Fed. Reg. 16,640 (Dep’t Commerce
Mar. 28, 2008) (notice of final determination of sales at less
than fair value)) (“Glycine from India”) at cmt. 5); see Glycine
from India cmt. 5 at 5-6 (“The Department applies, as
appropriate, the following criteria in determining whether
substantial transformation occurs, thereby changing a product’s
country of origin [for antidumping purposes]: 1) whether the
processed downstream product falls into a different class or
kind of product when compared to the upstream product,
2) whether the essential component of the merchandise is
substantially transformed in the country of exportation,
and 3) the extent of processing.”) (citing Ribbon from Korea,
69 Fed. Reg. at 17,647; Erasable Programmable Read Only Memories
(EPROMs) from Japan, 51 Fed. Reg. 39,680, 39,692 (Dep’t Commerce
Oct. 30, 1986) (final determination of sales at less than fair
value)).
Consol. Ct. No. 15-00066 Page 30
for the agency to apply its usual test in this case.80 Nor does
Kyocera present any argument, or point to any record evidence,
to suggest that Commerce’s conclusions in applying the three
factors of its substantial transformation test81 to the evidence
here82 do not comport with a reasonable reading of the
evidentiary record.83
80 See Kyocera’s Br., ECF Nos. 29 & 30, at 18-23.
81See supra note 79 (quoting and providing relevant citations
for Commerce’s statement of the factors employed in its
substantial transformation test).
82See supra note 73 and accompanying text (summarizing and
providing relevant citation for Commerce’s evidentiary
findings).
83See supra Standard of Review Section. Kyocera attempts to
analogize this case to Diamond Sawblades Mfrs.’ Coalition
v. United States, Slip Op. 13-130, 2013 WL 5878684 (CIT Oct. 11,
2013), Kyocera’s Br., ECF Nos. 29 & 30, at 21-22, where the
court affirmed Commerce’s determination that, with respect to
the class/kind of merchandise containing diamond sawblades, “the
essential quality of the [finished] product is not imparted
until the [components] are attached to create a finished
[diamond sawblade],” Diamond Sawblades, 2013 WL 5878684 at *10-
11. But the court’s unrelated decision that Commerce reasonably
weighed the particular evidentiary record in a different case,
concerning a different class/kind of merchandise, has no bearing
on whether Commerce’s factual determinations with respect to the
products in this case are reasonably supported by the specific
evidentiary record presented here. And to the extent that
Kyocera simply invites the court to re-weigh the evidence to
conclude that the process of panel assembly does substantially
transform the solar cells used in panel production,
see Kyocera’s Br., ECF Nos. 29 & 30, at 20-23, it is not the
court’s providence to do so. See, e.g., Jiangsu Jiasheng
Photovoltaic Tech. Co. v. United States, __ CIT __,
121 F. Supp. 3d 1263, 1272 (2015); Pakfood Pub. Co. v. United
States, 34 CIT 1122, 724 F. Supp. 2d 1327, 1348 (2010).
Consol. Ct. No. 15-00066 Page 31
Accordingly, this case presents no basis to disturb
Commerce’s factual findings that (1) solar cells and panels are
within the same class or kind of merchandise; (2) solar panel
assembly does not change the nature or use of the product’s
essential component, the solar cell; and (3) solar panel
assembly does not constitute substantial or sophisticated
processing of the constituent solar cells.84 Nor do the parties
present a basis to disturb the agency’s consequent conclusion
that the cell is not substantially transformed in the process of
panel assembly so as to change the cell’s country-of-origin,
pursuant to Commerce’s usual substantial transformation test in
the antidumping context.
VI. Assessment of Antidumping Duties Based on the Full Value of
Solar Panels Assembled in Third Countries from Taiwanese
Cells
Plaintiffs also challenge Commerce’s decision to apply
antidumping duties to the full value of solar panels assembled
in other countries from cells produced in Taiwan, rather than
only the value of the constituent Taiwanese cells.85 But as
84 Solar II Taiwan I&D Mem. cmt. 1 at 19-21.
85SunEdison’s Br., ECF Nos. 32 & 33, at 10, 54-56; Kyocera’s
Br., ECF Nos. 29 & 30, at 8, 15-16, 25-26; see Solar II Taiwan
I&D Mem. cmt. 1 at 24 n.80 (“[W]ith regard to [the] argument
that [Commerce] should take into consideration the processing
done in the country that produces the cell and the country that
produces the module, laminate or panel, and then only apply
(footnote continued)
Consol. Ct. No. 15-00066 Page 32
explained in the Solar II PRC opinion, Commerce previously had a
reasonable policy of applying antidumping duties to the full
value of merchandise that is manufactured in part in countries
other than the subject country, because the statute requires
that Commerce assess such duties “in an amount ‘equal to the
amount by which the foreign market value [now referred to as
‘normal value’] of the merchandise [i.e., the entire finished
product] exceeds the United States price of the merchandise.’”86
[antidumping] duties to the portion of the processing that was
done in Taiwan, we disagree. Solar modules assembled in third-
countries using Taiwanese solar cells are covered by the scope
of the [Solar II Taiwan] investigation, no matter the amount of
processing done in the third country. Thus the full value of
these solar modules [is] subject to . . . applicable antidumping
duties.”).
86Cold-Rolled Steel from Argentina, 58 Fed. Reg. at 37,065
(quoting predecessor to 19 U.S.C. § 1673e (requiring assessment
of antidumping duties “equal to the amount by which the normal
value of the merchandise exceeds the export price (or
constructed export price) of the merchandise”)); see also Large
Newspaper Printing Presses and Components Thereof, Whether
Assembled or Unassembled, from Germany, 61 Fed. Reg. 38,166,
38,171 (Dep’t Commerce July 23, 1996) (notice of final
determination of sales at less than fair value) (“LNPPs from
Germany”) (“[A]ny interpretation [of the law] which sought to
limit the application of antidumping duties . . . to the foreign
content [attributable solely to a particular country] would be
inconsistent with [Commerce]’s statutory mandate to assess
antidumping duties on the extent to which the normal value . . .
(previously referred to as ‘foreign market value’) exceeds the
export price (previously referred to as ‘United States price’).
Application of antidumping duties only on [a particular
country’s partial] processing or content portion of the import
might mean that the margin of dumping would not be fully
offset.”) (citing Certain Corrosion-Resistant Carbon Steel
Products from Canada, 58 Fed. Reg. 37,099 (Dep’t Commerce
(footnote continued)
Consol. Ct. No. 15-00066 Page 33
As Commerce had previously explained, because the foreign market
value of the finished foreign like product is not necessarily
subdivisible, “[a]pplication of antidumping duties only on [a
particular country’s partial] processing or content portion of
the import might mean that the margin of dumping would not be
fully offset.”87
But as also discussed in the Solar II PRC opinion,
this policy of assessing antidumping duties on the full value of
finished products was also coupled with Commerce’s policy of
calculating normal value using foreign like products in the
country where most of the essential production of the subject
merchandise took place.88 Because the statute requires a fair
comparison between the U.S. export price of the subject
merchandise and the normal value of the foreign like product,89
Commerce had, prior to its decisions in Solar II PRC and
Solar II Taiwan, reasonably assessed antidumping duties on the
July 9, 1993) (final determination of sales at less than fair
value), aff’d, In the Matter of Certain Corrosion-Resistant
Carbon Steel Products from Canada, USA-93-1904-03 (Binational
Panel under the United States-Canada Free Trade Agreement
Oct. 31, 1994)); Solar II PRC Slip Op., Slip Op. 16-56, Consol.
Ct. No. 15-00067, ECF No. 98, at 32-35, 47-48.
87 LNPPs from Germany, 61 Fed. Reg. at 38,171.
88Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at 31-33, 38-39, 42-44.
89 19 U.S.C. § 1677b(a)(1).
Consol. Ct. No. 15-00066 Page 34
full value of finished products after calculating dumping
margins using foreign normal values from the same market as that
where most of the actual manufacturing of the subject
merchandise occurred.90
Given this policy, Commerce reasonably determined to
assess antidumping duties pursuant to the Solar II Taiwan order
on the full value of the solar panels produced/imported by the
Plaintiffs here, because it is undisputed that at least fifty
percent of the production costs of Plaintiffs’ solar panels were
incurred in the production of the panels’ constituent cells in
Taiwan.91
90Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at 43-44.
91See SunEdison’s Br., ECF Nos. 32 & 33, at 10, 54-56 (arguing
that Commerce “must limit the collection of antidumping duty
deposits and assessments to the value of Taiwanese-origin
[solar] cells in the module,” without disputing that the
majority of a solar panel’s production costs are incurred in the
production of the constituent cells); Kyocera’s Br., ECF Nos. 29
& 30, at 5, 8, 15-16, 25-26 (essentially same). Kyocera makes
an argument regarding the value added by panel assembly as
compared with the market value of the individual cells,
Kyocera’s Br., ECF Nos. 29 & 30, at 5, 16, but as Commerce has
explained, the agency is concerned with where the costs of
production are incurred, rather than percentages of value added,
because “we are primarily concerned with where [most of] the
actual manufacturing is occurring.” LNPPs from Germany, 61 Fed.
Reg. at 38,168; see also Cold-Rolled Steel from Argentina,
58 Fed. Reg. at 37,065 (explaining that antidumping liability is
not susceptible to subdivision using the market values of a
finished product’s constituent parts, because “[antidumping]
duties are not an assessment against value,” but are rather
“determined by the amount of [ultimate] price discrimination
(footnote continued)
Consol. Ct. No. 15-00066 Page 35
But as the court also held in Solar II PRC, Commerce
deviated from its prior policy by determining, in Solar II PRC
and also here in Solar II Taiwan, that solar panels assembled in
China from cells produced elsewhere are to be assessed
antidumping duties based on a comparison to normal values
calculated for China, rather than the market where most of the
production of the panels (i.e., cell-production) took place.92
Because Commerce neither discussed nor reconciled this aspect of
its Solar II PRC and Solar II Taiwan scope decisions with the
agency’s prior policy and reasoning, remand is necessary for the
agency to do so.93 The outcome of these remand proceedings will
bear directly on the reasonableness of Commerce’s approach to
antidumping duty assessment here.
Commerce’s Solar II PRC exception for solar panels
assembled in China from non-Chinese cells (which is incorporated
. . ., not by the value of the good”). In any event, even the
evidence regarding the percentage of value added by panel
assembly that Kyocera relies on does not dispute that a majority
of the value of a solar panel resides in the constituent cells.
See Kyocera’s Br., ECF Nos. 29 & 30, at 5 (citing [Kyocera’s]
Req. for Scope Determination re Solar Prods. from Mexico,
Certain Crystalline Silicon Photovoltaic Products from Taiwan,
A-583-853, Investigation (Sept. 15, 2014), reproduced in App. to
Pl.’s Rule 56.2 Mem. in Supp. of J. on the Agency R., ECF Nos.
34 (conf. version) & 35 (pub. Version) at App. 2, at 4).
92Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at 38-39, 45-46.
93 Id.; see supra Discussion Section IV.
Consol. Ct. No. 15-00066 Page 36
into the Solar II Taiwan scope94) seemingly abandons the agency’s
reasonable prior policy, and thereby removes that policy’s
explanatory power with respect to Commerce’s decision here. In
the absence of such explanation, Commerce’s conclusory statement
that antidumping duties will be assessed pursuant to Solar II
Taiwan on the full value of solar panels assembled in third
countries from Taiwanese cells simply because such panels “are
covered by the scope of the [Solar II Taiwan] investigation, no
matter the amount of processing done in the third country,”95 is
by itself insufficient to address Plaintiffs’ arguments.96
Thus how Commerce addresses this concern on remand in
94 See, e.g., Solar II Taiwan I&D Mem. cmt. 1 at 23.
95 Id. at 24 n.80.
96See Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at 24-25 (noting that it is well-established
that the scope of an antidumping order is defined by two
separate inquiries – (1) is the product within the relevant
class/kind of merchandise? and (2) did the product originate in
the country covered by the order?) (relying on Cold-Rolled Steel
from Argentina, 58 Fed. Reg. at 37,065 (relied on by Commerce in
Solar II Taiwan I&D Mem. cmt. 1 at 18 n.52); 3.5” Microdisks and
Coated Media Thereof from Japan, 54 Fed. Reg. 6433 (Dep’t
Commerce Feb. 10, 1989) (final determination of sales at less
than fair value) (relied on in Cold-Rolled Steel from Argentina,
58 Fed. Reg. at 37,065); and Solar II Taiwan I&D Mem. cmt. 1
at 18 (“In determining the scope of the investigation,
[Commerce] must not only address . . . the products intended to
be covered by the scope, but also determine the country-of-
origin of the solar products at issue.”)). In the absence of
the explanatory power of its prior policy, Commerce’s
explanation here appears to conflate these two separate
inquiries.
Consol. Ct. No. 15-00066 Page 37
Solar II PRC, and here, will also have implications for the
reasonableness of its decision with respect to this issue.
VII. Commerce’s Treatment of Sales of Taiwanese Cells to Third-
Country Panel Assemblers For Export to the United States
Finally, SunEdison challenges Commerce’s treatment of
respondents’ “sales to third countries for which [the Taiwanese
solar cell producers/exporters] ha[d] knowledge that the
merchandise was ultimately destined for the United States.”97 A
significant proportion of such sales, however, appear to have
been sales of Taiwanese solar cells to panel assemblers in
China,98 which Commerce specifically excluded as non-subject
merchandise pursuant to the determinations that are remanded
here and in Solar II PRC.99 The court will therefore defer its
97SunEdison’s Br., ECF Nos. 32 & 33, at 4 (quoting [Commerce’s]
Quantity & Value Questionnaire, Certain Silicon Photovoltaic
Products from Taiwan, A-583-853, Investigation (Jan. 29, 2014),
reproduced in [Pub.] App. to Br. of Pl. [SunEdison] in Supp. of
Pl.’s Mot. for J. Upon the Agency R., ECF No. 37-1 at Tab 22,
at Attach. I (“Format for Reporting Quantity & Value of
Sales”)); see id. at 29-49 (presenting this challenge);
see also id. at 27 (“Commerce’s respondent selection was faulty
because Taiwan respondents reported indirect U.S. sales of cells
through China as ‘subject merchandise’ in accordance with
Commerce’s instructions, yet Commerce in the end removed those
transactions as ‘non-subject’ merchandise under its final scope
determination[, and t]his eliminated many of their reported
sales.”) (footnote omitted) & 49-54 (expanding this argument).
98 See SunEdison’s Br., ECF Nos. 32 & 33, at 34-36.
99Solar II Taiwan I&D Mem. cmt. 1 at 23 (“Neither Taiwanese
cells used to assemble solar modules in the PRC nor those solar
modules are covered by the scope of this investigation. Rather,
(footnote continued)
Consol. Ct. No. 15-00066 Page 38
review of Commerce’s treatment of sales of Taiwanese cells to
third-country panel assemblers that were reported as destined
for export to the United States until the issues remanded here
are resolved, and the scope of these proceedings is finalized.
CONCLUSION
For all of the foregoing reasons, the Solar II Taiwan
final scope determination is remanded to Commerce for
reconsideration in accordance with this opinion. Commerce shall
have until August 15, 2016, to complete and file its remand
results. Plaintiffs shall have until September , 2016, to
file comments, and the agency and Defendant-Intervenor shall
then have until September , 2016, to respond.
It is SO ORDERED.
_____/s/ Donald C. Pogue_____
Donald C. Pogue, Senior Judge
Dated: June 14, 2016
New York, NY
solar modules assembled in the PRC using Taiwanese cells are
within the scope of, and therefore subject to, the
[Solar II PRC] AD and CVD investigations as Chinese modules
. . . .”); Solar II PRC AD I&D Mem. cmt. 1 at 28 (“[S]olar cells
assembled in China using solar cells manufactured in Taiwan are
subject to [the Solar II PRC exception for panels assembled in
China from non-Chinese inputs] and not [Solar II Taiwan].”)
(citation omitted); see supra Discussion Sections IV & VI;
Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-00067,
ECF No. 98, at Discussion Section IV.