Sunpreme Inc. v. United States, 38 I.T.R.D. (BNA) 1853

Background

Sunpreme, a U.S. importer of frameless bifacial solar modules containing crystalline silicon wafers plus an amorphous silicon thin film, began entering merchandise as type "01" but CBP later issued Notices of Action (Apr–May 2015) requiring entries as type "03" and collection of AD/CVD cash deposits under Commerce's 2012 orders on crystalline silicon photovoltaic cells from China.
CBP laboratory testing confirmed crystalline silicon and the presence of thin-film amorphous silicon layers; CBP nonetheless treated the products as within the Orders and suspended liquidation, prompting Sunpreme to pay deposits from Apr–Dec 2015 until a TRO/PI issued.
Sunpreme filed for a Commerce scope ruling (Nov 16, 2015); Commerce initiated a formal scope inquiry on Dec 30, 2015 and ultimately concluded (July 29, 2016) Sunpreme's products fall within the Orders.
Sunpreme sued in the Court of International Trade under 28 U.S.C. § 1581(i) / APA review, challenging CBP's requirement that entries be filed as subject to the Orders and the pre-inquiry collection of cash deposits and suspension of liquidation.
The central dispute: whether CBP exceeded its authority by interpreting ambiguous scope language (notably the "thin film" exclusion) to place Sunpreme's products within the Orders and by collecting deposits/suspending liquidation before Commerce acted.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CBP may interpret ambiguous AD/CVD scope language to place goods within an order	CBP acted beyond its authority by interpreting the Orders' thin-film exclusion and thus could not lawfully classify Sunpreme's goods as in-scope	CBP made a factual determination that Sunpreme's goods possessed the physical characteristics described by the Orders and may preliminarily treat goods as in-scope	Held: CBP exceeded its authority; only Commerce may interpret ambiguous scope language and CBP may not give effect to an exclusion by interpreting it
Whether suspension of liquidation and cash-deposit collection were lawful before Commerce initiated a scope inquiry	Suspension and deposit collection prior to Commerce's initiation were unlawful because CBP's action depended on interpreting ambiguous scope language	CBP may protect revenue by suspending liquidation and collecting deposits; if entries are suspended, Commerce can continue that suspension	Held: CBP's pre-inquiry suspension and deposits were ultra vires and void ab initio; Commerce regulations permit prospective suspension only from the date Commerce initiates a scope inquiry
Whether importers bear the burden to seek a Commerce scope ruling when Orders' language prima facie excludes their products	Sunpreme: statute/regulations do not require importers to seek clarification where the order's exclusion appears to cover their goods; burden should not shift to importer here	Government: importers must seek clarification and exercise reasonable care; precedent supports importer responsibility	Held: No categorical duty on importer where the order's plain language prima facie excludes the goods; when CBP cannot determine scope by observable facts, Commerce must resolve ambiguity
Whether CBP's action was final and reviewable under the APA / whether §1581(i) jurisdiction exists	Sunpreme: CBP's demand for deposits and suspension produced concrete legal consequences and was final agency action reviewable under APA	Government: CBP action was preliminary and not properly reviewed in §1581(i) because Commerce/other statutory remedies exist	Held: CBP's determination was final for APA review; §1581(i) jurisdiction proper because court reviewed CBP's final action (deposit requirement)

Key Cases Cited

Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir.) (Commerce, not CBP, has authority to interpret AD/CVD orders)
Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir.) (CBP limited to factual matching of merchandise to unambiguous scope language; should not resolve ambiguous scope language)
Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973 (Fed. Cir.) (CBP implements Commerce's instructions and may not modify Commerce determinations)
Sandvik Steel Co. v. United States, 164 F.3d 596 (Fed. Cir.) (procedural posture on scope rulings and reviewability; importers who forgo scope rulings face limits on protest remedies)
AMS Assocs., Inc. v. United States, 737 F.3d 1338 (Fed. Cir.) (where Commerce clarifies ambiguous scope language, suspension and cash deposits may only take effect on/after scope-inquiry initiation)
Ugine & ALZ Belgium v. United States, 551 F.3d 1339 (Fed. Cir.) (narrow holding on liquidation and administrative review; not a basis to validate retroactive deposits here)
Bennett v. Spear, 520 U.S. 154 (U.S.) (agency action is final where it marks consummation of the agency’s decision and produces legal consequences)
Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (U.S.) (standard for arbitrary and capricious review under the APA)