2014 in review: scope and procedural matters before the Court of International Trade.

Author:Grimson, Jeffrey S.
Position:P. 101-132
 
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  1. Introduction II. Remand Procedure and the Nippon Quagmire: A Review of the CIT's 2014 Scope Opinions A. Introduction to Scope Rulings B. CIT Review of Commerce's Scope Rulings Generally C. Remand Proceedings and the "Nippon Quagmire" D. 2014 Anti-circumvention Cases 1. Deacero S.A.P.I. de C.V. v. United States 2. Ceramark Technologies v. United States E. 2014 Scope Inquiry Cases 1. Medline Industries, Inc. v. United States 2. Trade Associates Group, Ltd. v. United States 3. Mid Continent Nail Corp. v. United States 4. Meridian Products, LLC v. United States 5. Rubbermaid Commercial Products LLC v. United States 6. Plasticoid Manufacturing Inc. v. United States F. Conclusions III. A Review of Procedural Issues Addressed by the Court in 2014 A. Motions to Enjoin Customs from Liquidating Entries Pending a Court Appeal 1. Husteel Co., Ltd. v. United States 2. Diamond Sawblades Manufacturers Coalition v. United States 3. Navneet Publications (India) Ltd. v. United States 4. Tianjin Wanhua Co. Ltd. v. United States 5. Conclusions B. Motions to Strike Information from the Record 1. Papierfabrik August Koehler SE v. United States 2. Florida Tomato Exchange v. United States 3. Conclusions I. Introduction

    This Article summarizes 2014 U.S. Court of International Trade ("CIT") cases addressing questions of whether imported products fall within the scope of antidumping/countervailing duty orders, the process of obtaining a court order enjoining U.S. Customs and Border Protection from liquidating imports during the pendency of appeals before the CIT and U.S. Court of Appeals for the Federal Circuit ("CAFC"), and the CIT's decisions disfavoring motions to strike during the normal briefing process. These three topics taken together expose unnecessary strain upon the CIT's orderly appeal process as a result of multiple rounds of remands and redeterminations where Commerce's initial agency determination was unlawful, unneeded objections to routine procedural motions to maintain the status quo as well as the CIT's jurisdiction, and ill-advised motions to strike that create obstacles to efficient resolution of appeals.

    Statistics compiled by the CIT (1) indicate that, between 2007 and 2012, of the 225 appeals filed under 28 U.S.C. [section] 1581(c) that were fully briefed and closed during that time period, 116, or 51.49%, resulted in at least one remand to the U.S. Department of Commerce ("Commerce") or the U.S. International Trade Commission ("ITC" or the "Commission"). While the ITC is included in these totals, Commerce cases make up the bulk of the CIT's docket under section 1581(c) because both investigations and multiple annual reviews contribute to the court's caseload. (2) Thus, when even the highly deferential standard of review is used by the CIT to scrutinize Commerce's decisions, the data confirm that more than half of Commerce's decisions that reach the court are unlawful in some respect. (3) In the context of the scope proceedings that are examined in this Article, Commerce's track record is much worse. In eleven substantive decisions in 2014 related to scope issues, Commerce's original decision was upheld in the first instance only one time. With such a low affirmance rate, Commerce's continued ability to assert itself as "master of the dumping laws" can reasonably be questioned, and the CIT would be justified in exerting its authority to rule on the legality of Commerce's decisions in a manner that replaces the typical cycle of remands, "do-overs," and (eventually) decisions rendered "under protest," with speedy evaluation of Commerce's original decisions, based on the reasons articulated by Commerce at the agency level. Decisions as to whether a product falls in, or out, of a scope can be binary in a way that other Commerce decisions often are not. In a "yes" or "no" question--for example, of whether a product is below five millimeters or meets other objective criteria and is therefore out of scope--the CIT should not hesitate to reverse Commerce where the agency's originally articulated decision is found to be unlawful and thus spare the court, parties, and agency from countless rounds of remands.

  2. Remand Procedure and the Nippon Quagmire: A Review of the CIT's 2014 Scope Opinions

    1. Introduction to Scope Rulings

      Consistent with the framework established by the various international trade agreements to which the United States is a party, Congress has provided a statutory scheme through which a domestic industry may seek governmental intervention in the marketplace to protect against competition from unfairly priced imports of goods. (4) The most common "trade remedy" market intervention sought by domestic goods manufacturers pursuant to this statutory scheme is the imposition of "antidumping" and/or "countervailing" import duties on "a class or kind" of competing imported foreign goods pursuant to Title VII of the Tariff Act of 1930, as amended." Specifically, the statute provides that the imposition of antidumping duties is appropriate when "a class or kind of foreign merchandise is being, or is likely to be, sold in the United States at less than its fair value...." (6) Likewise, the statute provides that countervailing duties are appropriate where a foreign country's government--or any "public entity" affiliated with that country's government--is providing a "countervailable subsidy" with respect to "the manufacture, production, or export of a class or kind of merchandise imported, or sold (or likely to be sold) for importation into the United States...." (7) Before antidumping and/or countervailing duties are imposed on a "class or kind" of imported merchandise, however, the statute further requires that subject imports are either: (1) causing or threatening material economic injury to the domestic industry; or (2) causing the establishment of an industry in the United States to be "materially retarded." (8) If a positive determination of a countervailable subsidy and/or affirmative determination of sales at less-than-fair value ("LTFV") is made and there is an affirmative material injury or "retardation" determination, antidumping and/or countervailing duties are assessed on the subject imported merchandise in an amount "equal to" the amount deemed necessary to offset the alleged dumping and/or countervailable subsidy benefit. (9)

      Congress assigned responsibility for making the above determinations and the administration of the antidumping and countervailing duty laws generally to two separate administrative agencies: Commerce and the "Commission." (10) A domestic industry seeking government intervention in the market through the imposition of antidumping and/or countervailing duties must petition both agencies simultaneously. (11) The Commission is then tasked with determining whether there exists one of the three types of economic injury specified in the statute required for the imposition of antidumping and/or countervailing duties. (12) Concurrently, Commerce evaluates the domestic industry's petition to determine whether it meets certain threshold statutory criteria necessary to initiate an antidumping and/or countervailing duty investigation. (13) If Commerce initiates the investigation, Commerce must determine whether--and, if so, to what extent--imports of the subject foreign merchandise into the United States are being sold at LTFV and/or with the benefit of a countervailable subsidy. (14)

      After the investigation has concluded, if the Commission makes an affirmative economic injury determination and Commerce makes and affirmative finding of above de minimis LTFV sales and/or countervailable subsidy, Commerce issues an antidumping and/or countervailing duty "order" directing U.S. Customs and Border protection to assess additional duties on imports of the "class or kind" of subject merchandise "equal to" the amount of net countervailable subsidy benefit or dumping margin found by Commerce. (15) The actual antidumping and/or countervailing duty rates assessed on subject imports while the order remains in effect may vary, most typically as a result of Commerce's statutorily-mandated annual administrative reviews. (16) An order issued as a result of an antidumping or countervailing duty investigation remains in place until it is revoked via various statutory mechanisms. (17)

      The statute requires Commerce to define the types of products covered by an order imposing antidumping or countervailing duties. Specifically Commerce is required to include in an order a description of the class or kind of imported merchandise subject to the order "in such detail as [Commerce] deems necessary...." (18) As a practical matter, this description of the subject merchandise, also known as the "scope" of the order, is generally defined at the time that Commerce initiates the investigation, and is derived from the description of the "class or kind" of merchandise contained in the domestic industry's petition. (19) As the CIT has recognized, however, "the responsibility for defining the scope falls on Commerce, not the petitioner." (20) Accordingly, in the normal course, Commerce consults with petitioning parties to clarify scope issues pre-initiation, and then allows all interested parties an opportunity to comment and raise issues regarding product coverage after initiating the investigation. (21) At times, scope issues remain in dispute at the administrative level until Commerce's final LTFV and/or countervailing subsidy determination leading to an order. (22) Once Commerce issues the order, however, the agency cannot "interpret an antidumping order so as to change the scope of that order, nor can Commerce interpret an order in a manner contrary to its terms." (23)

      Despite the finality of the terms of the scope language once the order is issued, Commerce recognizes in its regulations that "[i]ssues arise as to whether a particular product is included within the scope of an antidumping or countervailing...

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