Mid Continent Nail Corp. v. United States, 725 F.3d 1295

Mid Continent petitioned for an antidumping order on certain steel nails from China; Commerce issued an order describing the nails by physical characteristics but said nothing about mixed-media items.
Target imported six household tool kits each containing assorted non-subject tools and ~50 one-inch brass-coated steel nails; nails constituted 0.8–3.3% of kit cost.
Target requested a Commerce scope ruling asking whether the nails in the kits were covered by the antidumping order; Commerce initially excluded the kits after applying ad hoc mixed-media factors.
The Court of International Trade vacated Commerce’s first ruling for lack of a consistent test and legal justification; Commerce then announced a four-factor mixed-media test on remand and again excluded the kits.
The Trade Court later held Commerce lacked authority to exclude merchandise within the literal scope of the order absent explicit order language; Commerce revised its ruling to include the nails and the Trade Court affirmed.
The Federal Circuit vacated the Trade Court’s judgment and remanded, holding Commerce may conduct mixed-media inquiries but must base any exclusion of literally covered merchandise on preexisting, public guidance or other reasonable interpretive sources and must provide a reasoned interpretation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce may, consistent with the antidumping order, exclude otherwise-literal subject merchandise when it is imported as part of a mixed-media product	Mid Continent: Absent clear order language, Commerce cannot exclude merchandise that falls within the literal scope; exclusion would change scope and deny notice	Target/United States: Commerce has authority to conduct mixed-media inquiries and exclude covered items based on interpretive factors	Court: Commerce has authority to conduct mixed-media inquiries and may exclude literally covered merchandise only if its interpretation is reasonable and consistent with the order and preexisting public guidance
Whether Commerce’s post-order, ad hoc four‑factor test (announced after the order issued) adequately justified excluding the nails in Target’s kits	Mid Continent: Commerce’s reliance on newly announced factors post‑order lacks preexisting, public basis and fails to provide regulated parties fair notice; thus the exclusion is unreasonable	Target/United States: The four-factor test reasonably assesses whether included merchandise should be treated as unitary or merely aggregated items	Court: Commerce’s original and post‑remand explanations were insufficient; remand required so Commerce can base any exclusion on preexisting public sources or provide a reasoned interpretation consistent with the order

Walgreen Co. v. United States, 620 F.3d 1350 (Fed. Cir.) (upholding Commerce inclusion of literally covered merchandise in mixed‑media sets where order language and regulatory history supported it)
Novosteel SA v. United States, 284 F.3d 1261 (Fed. Cir.) (agency may interpret but not change antidumping orders)
Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir.) (language of the order is the primary predicate for scope determinations)
Crawfish Processors Alliance v. United States, 483 F.3d 1358 (Fed. Cir.) (substantial transformation can remove merchandise from an order’s scope)
Tak Fat Trading Co. v. United States, 396 F.3d 1378 (Fed. Cir.) (steps for resolving ambiguity in an order include examining (k)(1) materials)
Global Commodity Grp. LLC v. United States, 709 F.3d 1134 (Fed. Cir.) (standard of review and deference principles for Commerce scope rulings)
Fuji Photo Film Co. v. Int’l Trade Comm’n, 474 F.3d 1281 (Fed. Cir.) (agency must give regulated parties adequate notice of what is regulated)