MERIDIAN PRODUCTS, LLC, Plaintiff, and Whirlpool Corporation, Plaintiff-Intervenor, v. UNITED STATES, Defendant, and Aluminum Extrusions Fair Trade Committee, Defendant-Intervenor.
Court No. 13-00246
United States Court of International Trade
July 18, 2016
Slip Op. 16-71 | 1283
Donald Harrison, Gibson, Dunn & Crutcher, LLP, of Washington, D.C., for plaintiff-intervenor.
Tara K. Hogan, Senior Trial Counsel, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With her on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Jessica M. Link, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, D.C.
Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein LLP, of Washington, D.C., for defendant-intervenor.
OPINION
Stanceu, Chief Judge:
In this action, plaintiff Meridian Products, LLC (Meridian) contested a 2013 Final Scope Ruling in which the International Trade Administration, United States Department of Commerce (Commerce or the Department) construed the scope of antidumping and countervailing duty orders (the Orders) on aluminum extrusions from the Peoples Republic of China (China or the PRC) to include three types of kitchen appliance door handles.
Before the court is the decision (the Remand Redetermination) Commerce issued following the courts order remanding the Final Scope Ruling for reconsideration. Final Results of Redetermination Pursuant to Court Remand Meridian Products, LLC v. United States (Mar. 23, 2016), ECF No. 67 (Remand Redetermination). In its earlier opinion and order, the court affirmed the Departments decision that two types of handles are within the scope of the Orders but ordered reconsideration of the Departments decision as to the third. Meridian Products, LLC v. United States, 39 CIT ___, 125 F.Supp.3d 1306 (2015) (Meridian I). In response to the courts order, Commerce determined, under protest, that this third handle type was outside the scope of the Orders. The Aluminum Extrusions Fair Trade Committee (AEFTC), a trade association of U.S. producers of aluminum extrusions and a petitioner in the antidumping and countervailing duty investigations, opposes the Remand Redetermination. The court affirms the Departments conclusion that the third handle type does not fall within the scope of the Orders.
I. BACKGROUND
The courts earlier opinion contains background material on this case, which is supplemented herein. See Meridian I, 39 CIT at ___, 125 F.Supp.3d at 1308-09.
Commerce issued the antidumping and countervailing duty orders on aluminum extrusions from China in May 2011. Aluminum Extrusions from the Peoples Republic of China: Antidumping Duty Order,
Meridian commenced this action on July 10, 2013, Summons, ECF No. 1; Compl., ECF No. 4, and, on May 12, 2014, Meridian filed its motion for judgment on the agency record, claiming that Commerce erred in determining that each of the three appliance door handle types was within the scope of the Orders. Pl.s Mot. J. Agency R., ECF No. 38. The courts earlier opinion and order granted plaintiffs motion in part, and denied it in part, affirming the Departments decision as to two types of Meridians handles (the Type A and Type C handles), each of which is a one-piece article fabricated from a single aluminum extrusion, and remanding the decision as to the remaining, Type B, handles, each of which is an assembly consisting of a component fabricated from an aluminum extrusion and other, non-aluminum components. Meridian I, 39 CIT at ___, 125 F.Supp.3d at 1310-17. On February 25, 2016, Commerce provided the parties, and invited comment on, a determination in draft form, Draft Results of Redetermination Pursuant to Court Remand, (Feb. 25, 2016) (Remand.R.Doc. No. 1). On March 23, 2016, Commerce filed the Remand Redetermination now before the court. On April 22, 2016, AEFTC filed its comments opposing the Remand Redetermination. Def.-Int. the Aluminum Extrusions Fair Trade Committees Comments on Final Results of Redetermination Pursuant to Court Remand, ECF No. 69 (AEFTCs Remand Comments). On June 3, 2016, defendant replied to these comments. Def.s Resp. to Def.-Int.s Remand Comments, ECF No. 74.2
II. DISCUSSION
A. Jurisdiction and Standard of Review
The court exercises subject matter jurisdiction under section 201 of the Customs Courts Act of 1980,
B. Description of the Merchandise in Meridians Scope Ruling Request
The only remaining appliance door handle type at issue in this litigation is Meridians Type B handle. See Remand Redetermination 1. The Type B handle, which was made for installation on oven doors, is an assembly consisting of five parts: a middle handle bar extrusion piece fabricated from an aluminum extrusion, two plastic injection-molded end caps (located at each end), and two screws that attach the end caps to the handle bar. See Scope Ruling Request 2 & Attach. 1, Type B Handles, Sec. A-A. Describing all three handle types, the Scope Ruling Request stated that [a]ll of the components are fully fabricated and do not require further cutting, punching, or other processing prior to their assembly and installation to the finished oven, that the Type B handles are in a form ready to be sold directly to, and used by, the consumer/end-user, and that [t]he package contains the components such as bottom mount fasteners and allen wrench necessary for installation by the customer, id. at 3, and is shipped to the customer with assembly instructions, id. at 4.
C. The Scope Language in the Orders
The scope language of the antidumping duty order and the scope language of the countervailing duty order are essentially identical. The Orders apply to aluminum extrusions which are shapes and forms, produced by an extrusion process, made from aluminum alloys having metallic elements corresponding to the alloy series designations published by The Aluminum Association commencing with the numbers 1, 3, and 6 (or proprietary equivalents or other certifying body equivalents). AD Order,
The scope language contains an exclusion applying to certain finished merchandise, which reads as follows:
The scope . . . excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry, such as finished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels.
Id.
D. The Remand Redetermination Reached the Correct Conclusion that the Type B Handles Are Not Within the Scope of the Orders
1. The Courts Decision in Meridian I
In Meridian I, the court first analyzed what it termed the general scope lan-
The court also noted that in placing the Type B handles within the scope, Commerce did not apply the subassemblies provision in the scope language. Id. The subassemblies provision states that, except for a good satisfying a specific exclusion (the finished goods kit exclusion),4 [t]he scope includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled merchandise . . . .5 AD Order,
While deciding that the Departments misinterpretation of the general scope language was sufficient by itself to require it to remand the Final Scope Ruling, the court also found fault with the Departments conclusion that the Type B handles did not qualify for the finished merchandise exclusion. Id. The court noted that the Final Scope Ruling, in considering the finished merchandise exclusion, did not analyze the Type B handles separately but instead concluded generally that this exclusion did not apply to any of the three handle types. The court noted that the Final Scope Ruling found as to all three handle types that the record is undisputed that the aluminum extrusion parts are not fully and permanently assembled with non-aluminum extrusion parts at the time of entry, id., 39 CIT at ___, 125 F.Supp.3d at 1315 (quoting Final Scope Ruling 13), but nevertheless also found that the Type B handles are made of aluminum extrusions, plus two plastic injection molded end caps at each end that are used to fasten the handle to the door, id. (quoting Final Scope Ruling 2). The court opined that [a]lthough it did not so state, Commerce apparently concluded, first, that the presence of fasteners is to be disregarded when the question is whether a good qualifies as merchandise containing aluminum extrusions as parts for purposes of the finished merchandise exclusion and, second, again concluded that the plastic end caps present in the Type B handles are fasteners. Id. The court identified two shortcomings in this analysis. First, the court again noted the flaw in deeming the plastic end caps fasteners. Id. Second, the court identified an interpretive difficulty with the Departments apparent reasoning that the presence of fasteners is to be disregarded for purposes of applying the finished merchandise exclusion. Id., 39 CIT at ___, 125 F.Supp.3d at 1315-16. In
2. The Remand Redetermination
Commenting that the Court disagreed with the Departments interpretation that Meridians Type B door handles are covered by the plain language of the scope . . . , Commerce stated in the Remand Redetermination that [w]e find, therefore, under respectful protest, that Meridians Type B door handles are outside the scope of the Orders because, consistent with the Courts interpretation of the scope language, there is no general scope language which covers such products. Remand Redetermination 8 (footnote omitted). Commerce added that it did not need to address the issue of whether Meridians Type B door handles are excluded under the finished merchandise exclusion because, consistent with the Courts interpretation of the scope language, there is no general scope language which covers Meridians Type B door handles. Id.
The court affirms the Departments decision that the Type B handles are not within the scope of the Orders. However, the court does not affirm the Remand Redetermination in the entirety. In the portion of the Remand Redetermination that responds to AEFTCs comments on the draft version of the Remand Redetermination, Commerce misinterpreted the courts opinion in Meridian I in one respect and also appears to have misinterpreted it in a second respect, as discussed below.
The Remand Redetermination summarizes several arguments AEFTC made in commenting on the draft that pertain to the presence of the plastic end caps in the Type B handle assemblies. See Remand Redetermination 9-10. In response to these arguments, the Remand Redetermination states that [w]e agree with Petitioner that both the scope language and the record evidence support a finding that the plastic end caps in question should be treated as fasteners, and, therefore, Meridians Type B door handles consist solely of aluminum extrusions and fasteners. Id. at 10. The Remand Redetermination then explains that [h]owever, the Court has made a specific finding that, based on the scope language and this same record evidence, the plastic end caps are not fasteners. Id. at 10-11 (footnote omitted). This statement mischaracterizes the courts holding, which did not make a finding as posited by the Remand Redetermination. Although critical of the Departments deeming the end caps to be fasteners due to the unusually broad definition Commerce lent to the term, the court based its analysis on the scope language and the uncontested fact that each Type B handle is an assembly containing a component fabricated from an aluminum extrusion, two plastic end caps, and two screws. It recognized that the general scope language defines extrusions as shapes and forms, produced from an extrusion process . . . rather than define the term so broadly as to sweep into the scope all assembled articles consisting of a component fabricated from an aluminum extrusion and other,
In addition, Commerce appears to have misinterpreted the courts ruling in Meridian I with respect to the subassemblies provision in the scope language. The Remand Redetermination responds to an argument by AEFTC that general scope language, in particular the parts and subassemblies language, covers aluminum extrusions which contain non-extruded components such as Meridians Type B Door Handles. Remand Redetermination 11. The Departments response is as follows:
We agree with Petitioner that the Departments underlying scope ruling correctly determined that the Type B Door Handles are covered by the general scope language and are not excluded under either the finished merchandise or finished goods kit exclusions. However, as discussed above, the Court found that the general scope language upon which the Department relied in finding that Meridians Type B Door Handles are subject to the Orders does not support Commerces interpretation. Moreover, although the Court identified additional general scope provisions, i.e., the parts language and subassemblies language, which also could be considered relevant, the Court ultimately found that, based on the record evidence, these provisions would not support a finding that Meridians Type B Door Handles are covered by the Orders.
Remand Redetermination 13 (footnotes omitted).
The Remand Redetermination is incorrect in implying that the court reached a holding that the subassemblies provision would not support a finding that Meridians Type B Door Handles are covered by the Orders. Although the court disagreed that the parts language of the Orders supported the Departments conclusion that the Type B handles are within the scope (because this language is expressly limited to parts that otherwise meet the definition of aluminum extrusions, Meridian I, 39 CIT at ___, 125 F.Supp.3d at 1313 (citing AD Order,
3. AEFTCs Comments on the Remand Redetermination
In opposing the Remand Redetermination, AEFTC advances three arguments as to why the court should return the Remand Redetermination to Commerce for reconsideration. All three arguments are thinly disguised attempts to request reconsideration of the courts holding in Meridian I. The court declines to reconsider its holding. Even were it to do so, it would conclude that all three arguments AEFTC advances are meritless.
AEFTC argues, first, that Commerce reached a critical and unsupported conclusion that the end caps attached to Meridians Type B handles are not properly classified as fasteners. AEFTCs Remand Comments 4. Second, AEFTC raises a related argument that Commerce reached a critical and unsupported conclusion that the general language of the scope does not cover or apply to Meridians Type B handles. Id. Third, AEFTC argues that Commerce erred in declining to analyze the issue of whether the Type B handles qualify under the finished merchandise exclusion. Id. at 7.
In its argument directed to the plastic end caps, AEFTC essentially is asking the court to reconsider the conclusions the court reached in Meridian I pertaining to the interpretive flaws in the Final Scope Ruling that relate to the presence of these plastic components. Submitting that fasteners serve an attachment function and that the plastic end caps serve just such a function, much like a type of nut, id. at 5, AEFTC incorrectly states that Meridians Type B handles are comprised only of an extruded aluminum handle and fasteners (i.e., plastic end-caps and screws), and so would not qualify for exclusion from the scope, id. at 6 (citations omitted). This argument misrepresents the evidentiary record. The uncontested record facts are that two plastic end caps are components of each Type B oven door handle and are specially designed for that purpose. The record evidence refutes any contention that the component fabricated from an aluminum extrusion was designed to serve as the oven door handle by itself. See Scope Ruling Request 2 & Attach. 1, Type B Handles, Sec. A-A. Regardless of whether the end caps can be said to serve an attachment function, it was incorrect and misleading for AEFTC to characterize the Type B handle as comprised only of an aluminum extruded handle and fasteners. Contrary to AEFTCs characterizations of the record, each Type
AEFTCs second argument, which is that Commerce erred in concluding that the general language of the scope does not include Meridians Type B handles, is also an implied request for reconsideration of the holding in Meridian I. In making this argument, AEFTC relies, again, on a mischaracterization of the Type B handle as comprised only of an extruded aluminum handle and fasteners (i.e., plastic end-caps and screws) . . . , AEFTCs Remand Comments 6 (emphasis added). AEFTC also mischaracterizes the courts opinion in Meridian I, asserting incorrectly that the court specifically recognized that aluminum extrusions containing non-extruded parts are covered under the scope, albeit under the description of subassemblies. Id. In dicta, the court correctly described the subassemblies provision in narrower terms. Meridian I, 39 CIT at ___, 125 F.Supp.3d at 1314. Under the courts analysis of the scope language in Meridian I, an extrusion is defined in terms describing a single article, not an assembly. The court recognized that the express terms of the subassemblies provision place within the scope only aluminum extrusion components contained within a subassembly, not the entire subassembly, and only in the circumstance in which the imported good is partially assembled merchandise, a circumstance Commerce did not find to exist in this case. See id., 39 CIT at ___, 125 F.Supp.3d at 1313.
AEFTCs final argument is that Commerce impermissibly failed to pursue whether the handles may have been properly excluded as finished merchandise. AEFTCs Remand Comments 7. According to AEFTC, an assessment of whether Meridians Type B handles are excludable as finished merchandise is appropriate because, according to AEFTC, as Commerce reasonably concluded in its Final Scope Ruling, Meridians Type B handles are properly considered covered by the general language of the scope, as they match the physical description of the subject merchandise and consist of nothing but extruded aluminum and fasteners. Id. (citing Final Scope Ruling 12-13). The court held to the contrary in Meridian I for the reasons explained in that opinion. Having determined in response (albeit under protest) that the general scope language did not describe the Type B handles, the Department permissibly declined to address the application of the finished merchandise exclusion.
III. CONCLUSION
For the reasons discussed in the foregoing, the court affirms the Departments decision that the Type B handles are not within the scope of the Orders but does not agree with all of the statements in the Remand Redetermination that Commerce offers as an explanation for why it has chosen to reach that decision under protest. Judgment will enter accordingly.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Chief Judge
Dated: July 18, 2016
New York, New York
Notes
AD Order,The scope also excludes finished goods containing aluminum extrusions that are entered unassembled in a finished goods kit. A finished goods kit is understood to mean a packaged combination of parts that contains, at the time of importation, all of the necessary parts to fully assemble a final finished good and requires no further finishing or fabrication, such as cutting or punching, and is assembled as is into a finished product. An imported product will not be considered a finished goods kit and therefore excluded from the scope of the investigation merely by including fasteners such as screws, bolts, etc. in the packaging with an aluminum extrusion product.