Whirlpool Corporation v. United StatesWhirlpool Corporation v. United States
Appeal from the United States Court of International Trade in No. 1:14-cv-00199-TCS, Chief Judge Timothy C. Stanceu.
Decided: May 23, 2018
DONALD HARRISON, Gibson, Dunn & Crutcher LLP, Washington, DC, argued for plaintiff-appellee.
ROBERT E. DEFRANCESCO, III, Wiley Rein, LLP, Washington, DC, argued for defendant-appellant. Also represented by ALAN H. PRICE, TESSA V. CAPELOTO, DERICK HOLT.
Before PROST, Chief Judge, MOORE and REYNA, Circuit Judges.
Opinion for the court filed by Chief Judge PROST.
Opinion concurring-in-part, dissenting-in-part filed by Circuit Judge REYNA.
Aluminum Extrusions Fair Trade Committee (“AEFTC“) appeals a decision from the U.S. Court of International Trade (“the CIT“) affirming a scope ruling of the U.S. Department of Commerce. The scope ruling held that Whirlpool Corporation‘s kitchen appliance door handles with end caps (“assembled handles“) do not fall within the scope of the antidumping and countervailing duty orders on aluminum extrusions from the People‘s Republic of China (“the Orders“). For the reasons stated below, we affirm-in-part, reverse-in-part, vacate-in-part, and remand.
BACKGROUND
The instant appeal addresses whether particular products fall within the scope of existing antidumping and countervailing duty orders. We examine the Orders’ scope and the procedural history before turning to the merits.
I
Commerce published the Orders in 2011. See
The Orders’ scope contains several exclusions. Meridian, 851 F.3d at 1379. For example, the scope has a finished merchandise exclusion, which “excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the
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, аt 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.
Id. The next sentence of the Orders includes, however, an exception to the finished goods kit exclusion. See Meridian, 851 F.3d at 1385. The exception states that “[a]n
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.” Id.
II
On December 20, 2013, Whirlpool submitted a rеquest for a scope ruling that its kitchen appliance door handles with end caps were not covered by the scope of the Orders. Whirlpool‘s December 2013 Scope Request was expressly based on a claim that its assembled handles were subject to the finished merchandise exclusion.
On August 4, 2014, Commerce issued its Scope Ruling for Whirlpool‘s assembled handles.2 Commerce found that “the handles at issue do not meet the exclusion criteria for ‘finished merchandise’ and, therefore, are inside the scope of the Orders.” J.A. 340. As a threshold issue, Commerce rejected Whirlpool‘s argument that the fasteners exception language in the scope only applies in the context of the finished goods kit exclusion and that it should not apply in the finished merchandise exclusion. J.A. 342. Commerce found “unconvincing the notion that an unassembled product in kit-form that consists solely of extruded aluminum, save for fasteners, would . . . fall inside the scope while the identical product, entering the
United States as an assembled good, would fall outside the scope of the Orders.” J.A. 43.
Because Commerce determined that the fasteners exception also applies to the finished merchandise exclusion, it concluded that “the mere inclusion of fasteners, in this case the plastic end caps, does not result in the extruded aluminum handles falling outside the scope of the Orders as extruded finished merchandise.” J.A. 341. Citing the dictionary definition of a washer, Commerce found that “the end caps . . . are involved in attaching the handle to the refrigerator door in a manner that allows the handle to fit tightly to the refrigerator door and relieves friction between the door and the handle,” and on that bаsis found “that the plastic end caps are analogous to a washer.” J.A. 340. Commerce, in a prior scope ruling, had considered washers to fall within the scope‘s reference to fasteners. Accordingly, Commerce found “that the handles at issue are comprised entirely of extruded aluminum and fasteners (i.e., plastic end caps).” J.A. 340.
With respect to the CIT‘s second basis for its remand order, it stated that Commerce‘s “presum[ption] that the exception for fasteners in the finished goods kit exclusiоn applies to the finished merchandise exclusion as well . . . is at odds with established principles of construction.” J.A. 47–48. According to the CIT, if “Commerce . . . had intended to sweep into the scope any assembled good consisting solely of aluminum extrusion components and fasteners, [it would have] so provide[d] in the scope language. Instead, Commerce expressly confined its ‘fasteners’ exception to the finished goods kit exclusion.” J.A. 48.
On remand, Commerce determined, “under respectful protest,” that the assembled handles were “outside the scope оf the Orders because, consistent with the [CIT]‘s interpretation of the scope language, there is no general scope language which covers such products.” J.A. 29. Commerce declined to provide any further analysis with respect to the finished merchandise exclusion, explaining that “the issue of whether Whirlpool‘s handles with end caps are subject to the exclusion for finished merchandise is rendered moot by the [CIT]‘s findings and our resulting determination, under protest, that there is no general scope language which covers these products.” J.A. 35.
In its August 2016 Opinion (Whirlpool II), the CIT affirmed Commеrce‘s April 2016 Redetermination Decision. This appeal followed. We have subject matter jurisdiction pursuant to
DISCUSSION
I
“We apply the same standard of review as the CIT when reviewing a Commerce scope ruling, though we give due respect to the CIT‘s informed opinion.” Meridian, 851 F.3d at 1380 (internal quotation marks and citations omitted). “Under that standard, we uphold a Commerce scope ruling that is supported by ‘substantial evidence on the record’ and otherwise ‘in accordance with law.‘” Id. (quoting
There is no specific statutory provision governing the interpretation of the scope of the Orders. Shenyang Yuanda Aluminum Indus. Eng‘g Co. v. United States, 776 F.3d 1351, 1354 (Fed. Cir. 2015). But Commerce has filled this statutory gap with a regulation,
Commerce‘s inquiry begins with the Orders’ scope to determine whether it contains an ambiguity and, thus, is susceptible to interpretation. Meridian, 851 F.3d at 1381. The question of whether the unambiguous terms of a scope control the inquiry, or whether some ambiguity exists, is a question of law that we review de novo. Id. at 1382. If the scope is unambiguous, thе plain meaning of the Orders’ language governs. Id. at 1381. The question of whether a product meets the unambiguous scope terms then presents a question of fact reviewed for substantial evidence. Id. at 1382.
Because the meaning and scope of the Orders are issues particularly within Commerce‘s expertise and special competence, we grant Commerce substantial deference with regard to its interpretation of its own Orders. Id. at 1381–82. While Commerce “enjoys substantial freedom to interpret and clarify its antidumping duty orders . . . , it may not change them.” Ericsson GE Mobile Commc‘ns, Inc. v. United States, 60 F.3d 778, 782 (Fed. Cir. 1995), as corrected on reh‘g (Sept. 1, 1995). Aсcordingly, a final order may not be interpreted “in a way contrary to its terms,” Smith Corona Corp. v. United States, 915 F.2d 683, 686 (Fed. Cir. 1990), nor in a way “so as to change the scope of that order,” Eckstrom Indus., 254 F.3d at 1072.
II
This appeal hinges on the interpretation of the Orders. Accordingly, we must determine whether Commerce
properly interpreted the relevant portions of the Orders and, if so, whether Commerce‘s findings as to whether the product meets the scope terms are supported by substantial evidence. We begin our discussion with the Orders’ general scope language followed by the express exclusions from that general scope.
A
According to AEFTC, the CIT erred in its interpretation оf the Orders’ general scope language because it “ignores that the scope of the order was intended to cover all aluminum extrusions produced with aluminum alloys commencing with 1, 3, and 6 unless expressly excluded.” Appellant Br. 27. AEFTC maintains that “the scope expressly includes aluminum extrusions, whether further fabricated or not, and even if incorporated into a subassembly, as well as aluminum extrusions which are identified by reference to their end use (such as kitchen appliance handles), as Commerce acknowledged in its scope ruling.” Id. We agree.
Although the CIT properly recognized that “the general scope language provides that [an aluminum extrusion] remains in the scope even though it has been subjected to one of three specified types of post-extrusion processes,” the CIT erred when it statеd that assembly processes were absent from the specified post-extrusion processes. J.A. 44. The general scope language unambiguously includes aluminum extrusions that are part of an assembly. The Orders explicitly include aluminum extrusions “that are assembled after importation” in addition to “aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies.”
B
We must nеxt determine whether Commerce, in its August 2014 Scope Ruling, applied the proper interpretation of the exclusions to the Orders and, if so, whether substantial evidence supports its finding that the exclusions do not apply.
First, with respect to the finished goods kit exclusion we agree with the CIT that “[b]ecause Whirlpool‘s assembled door handles are not imported in disassembled form, the finished goods kit exclusion is inapplicable.” J.A. 47. This exclusion is unambiguous and so the plain meaning of the language of the Orders governs. Meridian, 851 F.3d at 1381. The language of the Orders states that “[t]he scope alsо excludes finished goods containing aluminum extrusions that are entered unassembled in a ‘finished goods kit.‘”
parts to fully assemble a final finished good and requires no further finishing or fabrication.” Id. (emphasis added). Whirlpool‘s handles and end caps do not enter unassembled as a packaged combination of parts. They enter assembled. Accordingly, Whirlpool‘s assembled handles do not meet the unambiguous terms of the finished goods kit exclusion.
Second, with respect to the finished merchandise exсlusion we also agree with the CIT. The Orders define finished merchandise as “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.”
Commerce, in its August 2014 Scope Ruling, rejected Whirlpool‘s argument that this fasteners language only applies in the context of the finished goods kit exclusion and that it did not apply in the separate finished merchandise exclusion. J.A. 342–43. Commerce concluded, therefore, that “the mere inclusion of fasteners, in this case the plastic end caps, does not result in the extruded aluminum handles falling outside the scope of the Orders as extruded finished merchandise.” J.A. 341.
According to the CIT in Whirlpool I, Commеrce erred in its August 2014 Scope Ruling interpretation of the Orders’ scope because Commerce‘s “presum[ption] that the exception for fasteners in the finished goods kit exclu-sion applies to the finished merchandise exclusion as well . . . is at odds with established principles of construction.” J.A. 47–48. We agree with the CIT.
As noted above, although Commerce “enjoys substantial freedom to interpret and clarify its antidumping duty orders . . . , it may not change them.” Ericsson, 60 F.3d at 782. Commerce‘s interpretation of the fasteners exception and whether it applies to the finished merchаndise exclusion is contrary to the terms of the Orders, and is therefore incorrect. Smith, 915 F.2d at 686.
We first assess whether the plain language of the exception for fasteners is unambiguous. Meridian, 851 F.3d at 1383. As we have noted, the question of whether some ambiguity exists, is a question of law that we review de novo. Id. at 1382. We conclude that the exception for fasteners unambiguously applies only to the finished goods kit exclusion and not to the finished merchandise exclusion for at least three reasons.
First, the single sentence that describes the fasteners exception specifically refers only to a finished goods kit and does not mention finished merchandise. See
We therefore agree with the CIT that if Commerce had actually intended to sweep into the scope all finished merchandise consisting solely of aluminum extrusion components and fasteners, it would have done so in the scope language rather than expressly confining its fasteners exception to the finished goods kit exclusion.
Because we conclude that the exception for fasteners is unambiguous, the plain meaning of its language governs. Meridian, 851 F.3d at 1381. Therefore, the fasteners exception only applies to the finished goods kit exclusion and it does not apply to the finished merchandise exclusion.
Because, in Commerce‘s view, the fasteners exception applied to the finished merchandise exclusion, it did not reach a determination in its Scope Ruling as to whether Whirlpool‘s assembled handles actually meet the requirements for the finished merchandise exclusion in the first place. In its April 2016 Redetermination Decision,
Commerce also declined to address AEFTC‘s argument that Whirlpool‘s assembled handles should not fall under the finished merchandise exclusion because they are merely parts of a larger, final finished product (e.g., a refrigerator), and that it is only the larger, final finished product itself that is included under the finished merchandise exclusion. Commerce stated that the question of whether the assembled handles meet the requirements for the finished merchandise exclusion was rendered moot by the CIT‘s determination that there is no general scope language which covers these products.
Because Commerce did not reach this determination, the CIT also declined to engage in an analysis of the finished merchandise exclusion in Whirlpool II. Accordingly, we do not now, for the first time on appeal, determine whether Whirlpool‘s assembled handles meet the requirements for the finished merchandise exclusion, namely whether the assembled handles are “merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry.”
CONCLUSION
We conclude that substantial evidence supports Commerce‘s August 2014 Scope Ruling that the general scope language of the Orders describes Whirlpool‘s assembled handles. Accordingly, we reverse Whirlpool II affirming Commerce‘s April 2016 Redetermination Decision and instruct the CIT to vacate Commerce‘s April 2016 Redetermination Decision and reinstate the portion of Commerce‘s August 2014 Scope Ruling finding that the assembled handles fall within the general scope language.
We also vacate those portions of the CIT‘s Whirlpool I holding that the general scope language of the Orders did not describe Whirlpool‘s assembled handles.
With respect to the exсlusions from the Order‘s scope, we conclude that the exception for fasteners unambiguously applies only to the finished goods kit exclusion and not to the finished merchandise exclusion. Further, because the finished goods kit exclusion is inapplicable to Whirlpool‘s assembled handles, so too is the fasteners exception to the finished goods kit exclusion. Accordingly, we affirm those portions of Whirlpool I that are consistent with
Finally, the case is remanded to the CIT for further proceedings, in keeping with this opinion, to determine whether Whirlpool‘s assembled handles meet the requirements for the finished merchandise exclusion.
AFFIRMED-IN-PART, REVERSED-IN-PART VACATED-IN-PART, AND REMANDED
COSTS
The parties shall bear their own costs.
REYNA, Circuit Judge, concurring-in-part, dissenting-in-part.
I concur with the majority that “the interpretation relied on by the CIT in Whirlpool I was improper, and substantial evidence supports Commerce‘s finding in its August 2014 Scope Ruling that the general scope language includes Whirlpool‘s assembled handles.” Maj. Op. at 10.
The majority highlights a fundamental error in the CIT‘s holding that the “general scope language is not reasonably interpreted to include the assembled handles because ‘[t]he handles at issuе are not themselves “extrusions” but rather are assemblies, each of which contains an extrusion, machined and surface-treated, as the principal component.‘” Id. at 9. I agree with the majority that “[t]his conclusion is incorrect.” Id.
The court‘s holding that the general scope language is reasonably interpreted to include the Whirlpool handles drives the remainder of the scope review because a scope inquiry first begins by asking whether the good in questions is covered under the general scope language of the duty order. The answer here is yes. The next question is whether a good covered by the general scope language is excluded under an exclusion provision. Here, it is undisputed that the handles are not excluded under the finished goods kit exclusion. The majority concludes that Commerce left unanswered the question whether the finished merchandise exclusion applies, and, on this basis, remands so that Commerce may address the applicability of the finished merchandise exclusion.
The record is clear, however, that Commerce has addressed the question of whether Whirlpool‘s handles are excluded under the finished merchandise exclusion.1 In
its initial scope determination, Commerce determined that the good in question is a covered good; there are no components or parts included, whether loose or
Commerce explained in its initial scope ruling that the difference between “finished goods” and “finished goods kits” is that the former is assembled upon entry while the latter is unassembled upon entry. J.A. 342–43. Commerce found unconvincing the “notion that an unassembled product in kit-form that consists solely of extrud-
ed aluminum, save for fasteners, would, per the analysis from the Geodesic Domes Scope Ruling, fall inside the scope while the identical product entering the United States as an assembled good, would fall outside the scope of the Orders.” J.A. 343. Commerce determined that if a product that only consists of aluminum extrusions and fasteners, as in this case, satisfies the finished merchandise exclusion, the exclusion would swallow the scope “because any aluminum extrusion products, as long as it can be identified by end use, could be considered a finished product.” Id. Commerce reasoned that this cannot be the correct interpretation because it is contrary to the scope itself, which covers aluminum extrusions. Id. Commerce preserved these factual conclusions when it filed under protest its remand determination pursuant to the CIT‘s remand. See J.A. 22.
I defer to Commerce on interpreting its own antidumping duty orders and would affirm Commerce‘s August 2014 Scope Ruling on the basis that it is not unreasonable and is otherwise supported by substantial evidence. See King Supply, 674 F.3d at 1348 (“Commerce is entitled to substantial deference with regard to its interpretations of its own antidumping duty orders. This deference is appropriate because the meaning and scope of antidumping orders are issues particularly within the expertise and special competence of Commerce.” (internal citations and quotations omitted)). Therefore, I respectfully concur-in-part and dissent-in-part from the majority opinion.