Districargo, Inc. v. United States, 163 F. Supp. 3d 1340

Background

Districargo imported exhibition booth kits composed of aluminum extruded poles and beams plus iron buckles; components shipped together in one container/entry but like parts packaged together (poles with poles, beams with beams, buckles with buckles).
Commerce issued a final scope ruling determining the kits fell within antidumping and countervailing duty Orders on aluminum extrusions from the PRC because they were not “finished goods kits.”
“Finished goods kit” exclusion applies only to packaged combinations that, at importation, contain all necessary parts to fully assemble a final product without further finishing and are assembled “as is.”
Commerce found Districargo’s distributor (Pyramid) placed components into service inventory, unpacked/rearranged them, and assembled kits per renter specifications, making the products analogous to prior scope rulings where post-import rearrangement defeated the exclusion.
Districargo argued the kits qualified for the exclusion (relying on Commerce’s treatment of separately packaged components in prior rulings) and that Commerce lacked direct evidence of post-import rearrangement or repackaging.
The Court reviewed under the substantial-evidence standard and sustained Commerce’s ruling, concluding Commerce reasonably inferred post-import rearrangement from the record and that Districargo bore the burden to show the components remained kit-specific from importation.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Districargo’s exhibition booth components qualify as a "finished goods kit" excluded from the Orders	Kits were complete at importation despite separate packaging; therefore excluded (analogous to Trade Booth Kits)	Kits did not meet the exclusion because components are rearranged/repackaged after importation and thus fall within the Orders	Court upheld Commerce: not a finished goods kit because record supports post-import rearrangement/repackaging inference
Whether Commerce needed direct evidence that distributor rearranged/repackaged components post-import	Commerce’s conclusion is unreasonable without direct evidence of rearrangement	Commerce may reasonably infer rearrangement from documentary record; burden on importer to prove kit integrity at importation	Court held absence of direct proof did not make Commerce’s inference unreasonable; burden on Districargo to show kits remained together
Whether the exclusion’s ‘‘fastener’’ exception (including screws/bolts) applies to these kits	Exception should apply, making kits excluded despite including non-extrusion parts	Exception only applies if merchandise otherwise qualifies as a finished goods kit; here the exclusion itself is inapplicable	Court did not reach exception because kits failed to meet the exclusion’s primary definition
Whether Commerce reasonably relied on prior scope rulings (Disappearing Doors, Flag Poles) to analogize facts	Facts align more with Trade Booth Kits than with Disappearing Doors/Flag Poles; Commerce misapplied precedents	Prior rulings are analogous where post-import rearrangement occurs; Commerce reasonably analogized to Disappearing Doors/Flag Poles	Court found Commerce’s analogies reasonable given the record and sustained the ruling

Key Cases Cited

Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006) (standard for substantial-evidence review of agency determinations)
Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir. 2002) (scope language is the cornerstone of scope analysis)
DuPont Teijin Films USA v. United States, 407 F.3d 1211 (Fed. Cir. 2005) (definition of substantial evidence)
Consol. Edison Co. v. NLRB, 305 U.S. 197 (Sup. Ct. 1938) (description of substantial evidence standard)
Consolo v. Federal Maritime Comm’n, 383 U.S. 607 (Sup. Ct. 1966) (agency findings may be supported despite possibility of inconsistent inferences)
Eckstrom Indus., Inc. v. United States, 254 F.3d 1068 (Fed. Cir. 2001) (when (k)(1) factors are dispositive Commerce issues a final scope ruling)