348 F. Supp. 3d 1297
Ct. Int'l Trade2018Background
- Midwest Fastener imported four-component "strike pin anchors" (steel pin, threaded body, nut, washer) and requested a Commerce scope ruling (June 8, 2017) that they are excluded from the antidumping duty (ADD) order on certain steel nails from the PRC.
- Commerce issued a final scope ruling (Aug. 2, 2017) concluding the anchors are "nails constructed of two or more pieces," directing CBP to continue suspension of liquidation and collection of cash deposits.
- Midwest challenged Commerce’s determination in the Court of International Trade under 19 U.S.C. § 1516a, arguing the order language does not unambiguously cover its anchors, that Commerce should have conducted a (k)(2) analysis, and that Commerce unlawfully retroactively suspended liquidation/collection.
- Commerce relied on the plain language of the PRC Nails Order and (k)(1) sources (prior scope rulings and the ITC report) to find the product in scope without performing a (k)(2) factors analysis.
- The court found the phrase "nails... constructed of two or more pieces" ambiguous as applied to multi-component anchors and concluded Commerce lacked substantial record support for treating the entire anchor as a nail merely because one component resembles a nail.
- The court upheld Commerce’s liquidation instructions because suspension of liquidation here predated the scope inquiry, distinguishing situations where Commerce attempted to suspend liquidation retroactively.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce properly found Midwest's strike pin anchors are within the PRC Nails Order (plain language/(k)(1) analysis) | The order language does not unambiguously include multi-component anchors; Commerce erred by treating a multi-piece anchor as a nail because one component is nail-like and by not doing (k)(2) analysis | The physical description and prior (k)(1) determinations/ITC report show the anchors are "nails constructed of two or more pieces," so (k)(2) was unnecessary | Commerce's scope determination is unsupported by substantial evidence; remanded for a formal scope inquiry and (k)(2) analysis (may reopen record) |
| Whether Commerce lawfully instructed CBP to suspend liquidation and collect cash deposits | Commerce's liquidation instructions are retroactive/ unlawful under precedent (AMS, etc.) | Regulations permit continuing suspension of liquidation for entries already suspended; AMS and cases cited are distinguishable | Liquidation instructions lawful here because suspension predated the scope inquiry; regulations authorize continued suspension |
Key Cases Cited
- Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir. 2002) (scope of an antidumping order is dictated by its language and Commerce examines that language first)
- Ericsson GE Mobile Commc’ns, Inc. v. United States, 60 F.3d 778 (Fed. Cir. 1995) (Commerce has authority to interpret and clarify its antidumping orders)
- King Supply Co., LLC v. United States, 674 F.3d 1343 (Fed. Cir. 2012) (Commerce's interpretations of its own orders warrant deference)
- Eckstrom Indus., Inc. v. United States, 254 F.3d 1068 (Fed. Cir. 2001) (Commerce cannot interpret an order to change its scope or contrary to its terms)
- AMS Assocs., Inc. v. United States, 737 F.3d 1338 (Fed. Cir. 2013) (Commerce may only suspend liquidation prospectively where no prior suspension existed)
- Sunpreme Inc. v. United States, 892 F.3d 1186 (Fed. Cir. 2018) (jurisdictional holding recognizing CBP may suspend liquidation pre-scope inquiry and scope remedy lies with Commerce)