2016 CIT 59
Ct. Int'l Trade2016Background
- Commerce conducted antidumping investigations of crystalline silicon photovoltaic products (solar cells and panels) from Taiwan (Solar II Taiwan) and from China (Solar II PRC); plaintiffs are U.S. importers and a foreign assembler using Taiwanese cells (SunEdison; Kyocera).
- Commerce's Solar II Taiwan scope treated all solar cells manufactured in Taiwan as subject merchandise regardless of where assembled into panels, except panels assembled in China (which were covered under Solar II PRC).
- Commerce previously (Solar I PRC) had treated module assembly as not substantially transforming cells, so origin was the cell-production country. After trade shifts, Commerce opened Solar II proceedings to capture panels assembled in China from non-Chinese cells and to address cells from Taiwan.
- Plaintiffs challenged Commerce on multiple grounds: late scope modification and due process; mismatch between databases used for dumping calculations and final scope; statutory/regulatory violations; unlawful departure from precedent; substantial-transformation findings for Mexican assembly; and assessing duties on full panel value.
- The court remanded Commerce’s Solar II Taiwan scope decision for consistency with its Solar II PRC reasoning, finding Commerce had established inconsistent origin rules (dependent on country of assembly) without adequate explanation; other arguments were deferred or found premature pending remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Late scope modification / due process | Kyocera/SunEdison: Commerce changed scope late, depriving parties of opportunity to respond and skewing databases | Commerce: scope choices were within agency discretion; adjustments were responsive to trade shifts | Mooted by remand — court declined to decide due process because remand on other grounds would resolve scope questions |
| Statutory/regulatory validity of scope rule | SunEdison: Commerce created inconsistent meanings for "class or kind" and violated 19 U.S.C. §§1673, 1677b, 1677(16) | Commerce: statute ambiguous on origin test; agency has discretion to choose reasonable origin methodology | Deferred in part; court found no clear statutory violation but remanded for agency explanation consistent with Solar II PRC |
| Substantial-transformation (country-of-origin) for third-country assembly | Kyocera: cells assembled into panels in Mexico are substantially transformed there; origin should be assembly country | Commerce: applies its established substantial-transformation test and concluded assembly does not substantially transform cells; cells remain origin | Court upheld Commerce's factual application of its substantial-transformation test (no basis to disturb findings) |
| Assessment of duties on full panel value vs. cell-only value | Plaintiffs: duties should be limited to value of Taiwanese cells, not full panel value | Commerce: statute assesses duties on the merchandise (finished product) and historically assessed full value, coupled with calculating normal value where most production occurs | Court sustained rationale for assessing full value generally but remanded because Commerce treated China-assembled panels differently without reconciling prior policy on where normal value is calculated |
| Treatment of third-country sales / databases | SunEdison: Commerce's scope change altered databases used throughout investigation, creating mismatch between dumping calculations and final scope | Commerce: scope distinctions trace to related proceedings and tradeflow concerns; some issues overlap Solar II PRC | Court deferred resolution until remand outcome clarifies scope; remand likely affects database and third-country-sales treatment |
Key Cases Cited
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agencies must provide reasoned explanation when changing policy)
- British Steel PLC v. United States, 127 F.3d 1471 (Fed. Cir. 1997) (agency must explain departures from precedent)
- SKF USA, Inc. v. United States, 537 F.3d 1373 (Fed. Cir. 2008) (substantial-evidence standard described)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006) (substantial evidence / review standard)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (agencies must address continued relevance of prior factual findings when changing policy)