SunPower Corporation v. United States
2017 CIT 89
| Ct. Intl. Trade | 2017Background
- Commerce investigated crystalline silicon photovoltaic (solar) products in multiple proceedings: Solar I (PRC cells/modules), Solar II PRC (modules assembled in China from non-Chinese cells), and Solar II Taiwan (Taiwanese cells/modules).
- Solar I used a substantial-transformation test: the cell was the origin-conferring component, so modules assembled from non‑Chinese cells in China were not treated as Chinese-origin.
- SolarWorld petitioned again (Solar II), alleging evasion and injury from modules assembled in China using non‑Chinese (notably Taiwanese) cells; Commerce revised scope language to cover modules assembled in China from cells produced outside China and treated China as country of origin for those modules.
- SunPower challenged Commerce’s Solar II PRC scope change as unlawfully expanding the petition scope, departing from prior practice (single origin test), and violating due process; the court remanded for Commerce to explain its reasoning.
- On remand Commerce justified applying different origin rules in Solar II PRC (country of assembly) and Solar II Taiwan (substantial transformation/cell origin) based on different alleged injurious conduct and administrability concerns; the court sustained the remand results.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce impermissibly applied two different country‑of‑origin rules to the same "class or kind of merchandise" | SunPower: Commerce departed from a single‑rule practice and applied two origin rules to the same products | Commerce: Each investigation defines a distinct class/kind of merchandise by its scope; different proceedings may have different origin rules | Court: Commerce reasonably treated Solar II PRC and Solar II Taiwan as covering different classes/kinds; no impermissible double‑rule |
| Whether Commerce unlawfully abandoned substantial‑transformation analysis in Solar II PRC | SunPower: Commerce unjustifiably discarded prior substantial‑transformation finding that panel assembly is not origin‑conferring | Commerce: Unique facts (evasion, supply‑chain adaptiveness, subsidization at assembly) justified different origin rule focusing on assembly country | Court: Commerce adequately explained why Solar II PRC warranted a different origin test and the departure was supported by the record |
| Whether normal value must be based on market of majority/essential production | SunPower: Commerce should have used the market where essential production occurred (cell manufacture) for fair comparison | Commerce: Statute requires a fair comparison but does not mandate the market of majority production; origin rule determines home market for normal value | Court: Commerce permissibly based normal value on China for Solar II PRC given its origin determination and explanation |
| Whether the expanded scope applies retroactively to pre‑order entries | SunPower: If validated, scope should be applied only prospectively, not to entries before publication | Government: Commerce instructed CBP to suspend liquidation and collect deposits starting at publication dates; no retroactive collection claimed | Court: No dispute remains; Commerce applied duties prospectively as instructed and issue need not be resolved further |
Key Cases Cited
- Target Corp. v. United States, 609 F.3d 1352 (Fed. Cir. 2010) (orders determine the class or kind of merchandise covered)
- Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir. 2002) (scope and country‑of‑origin determinations are within Commerce’s discretion and tied to order language)
- Save Domestic Oil, Inc. v. United States, 357 F.3d 1278 (Fed. Cir. 2004) (Commerce must either follow routine practice or reasonably explain departures)
- Smith Corona Corp. v. United States, 915 F.2d 683 (Fed. Cir. 1990) (an order determines the class or kind of merchandise covered)