Spring Newsletter - Federal Circuit and CIT Case Summaries
Spring Newsletter - Federal Circuit and CIT Case Summaries
Thursday, April 7, 2022
Section: Federal Circuit and CIT Case Summaries

U.S. Court of Appeals for the Federal Circuit
21-1748 Hyundai Steel Company v. United States 12/10/2021 O’Malley, Bryson, and Hughes
On December 10, 2021, the CAFC upheld the CIT’s reversal of Commerce’s determination that a  Particular Market Situation existed in Korea when calculating the cost of production in the administrative review on welded pipe. The CAFC agreed with the CIT that the antidumping statute does not give Commerce the authority to use a PMS analysis to then adjust the costs of production to determine whether home market sales were made below cost.
21-1434 Canadian Solar, Inc. et al. v. United States 1/28/2022 Moore, Clevenger and Chen
On January 28, 2022, the CAFC affirmed the CIT’s decision.  At issue in this appeal was whether regionally specific electricity subsidies that Canadian Solar received from the Chinese government could be countervailed.  Throughout the investigation, the government of China did not cooperate with Commerce.  As a result, Commerce applied adverse facts available to determine that the electricity program was a regionally specific subsidy.  Canadian Solar argued that the price differentiation between the provinces of China was due to commercial or market considerations.  Commerce disagreed and found that the differences in prices by province were for development purposes and set by the government in Beijing.  The CIT found that Commerce’s decision that Canadian Solar received electricity subsidies was supported by substantial evidence and in accordance with law.  The CAFC affirmed.
U.S. Court of International Trade
21-159 Pasta Zara S.P.A. v. United States 11/30/2021 Consol. 20-00023 Eaton 1581(c)
Ghigi 1870 S.P.A (“Ghigi”) and Pasta Zara S.P.A (“Zara”) challenged Commerce’s administrative review on pasta from Italy asserting that Commerce improperly applied adverse facts available and dismissed arguments against Commerce’s protein measuring method. Commerce applied adverse facts available to Ghigi after it submitted a revised document that contained errors. However, the Court determined that the payment dates in the original document were still “perfectly usable” and nothing showed that Ghigi failed to cooperate to the best of its abilities. Additionally, Plaintiffs went against Commerce’s instructions when reporting its percentage of protein in the pasta and when reporting the shape of the pasta.  In reviewing the administrative record, the Court found that Plaintiff’s arguments supporting its reporting methodology were presented outside of the fact-finding time period, ultimately preventing Commerce and the Court from considering them. Therefore, the case was remanded for further explanation with respect to whether Commerce had a sufficient basis to apply adverse facts available.
21-160 BlueScope Steel Ltd. v. United States 11/30/2021 19-00057 Eaton 1581(c)
The Court of International Trade remanded the Commerce Department's final results in the antidumping duty administrative review of hot-rolled steel flat products from Australia covering entries during the 2016-2017 period of review.  BlueScope Steel Ltd. challenged Commerce’s decision to apply total adverse facts available. At issue in the case was Commerce’s determination that BlueScope had not adequately supported its reported quantity and value of U.S. sales or provided adequate home market and U.S. sales reconciliations, which are part of Commerce’s information gathering process.  The Court found that Commerce’s decision was not supported by substantial evidence and remanded the case to Commerce with instructions to support its decision based upon the fact that Commerce had not demonstrated that there was a gap in the record, nor did it provide BlueScope with an opportunity to cure deficiencies as required by the statute. 
21-161 Colakoglu Metalurji A.S. v. United States 12/02/2021 20-00153 Kelly 1581(c)
The CIT affirmed Commerce’s final results of review and found that Commerce had accurately assigned a non-de minimis CVD rate for non-mandatory respondent Colakoglu.  The appeal stems from the 4th administrative review of the CVD order on concrete reinforcing bar from Turkey.  Colakoglu had participated in prior reviews but was not selected as a mandatory respondent in the 4th administrative review, and Commerce assigned the previously calculated rate of 1.82% to it.  The Court held that the “expected method” of calculating an average rate based upon the mandatory respondents’ rates only applies to AD cases, not to CVD cases. The Court stated that while “Congress could have easily included the same language in both sections or even combined the sections into one if it had intended to place the exact same restrictions on Commerce in both contexts” but “instead, Congress chose to elucidate an expected method of calculating an all-others rate when all mandatory respondents receive de minimis rates only in the ADD context.”  The Court also found that the record demonstrated that Commerce had adequately supported its decision given that the mandatory respondents did not purchase gas from the state-run company and therefore using the mandatory respondents’ rates as an average would not be a reasonable reflection of Plaintiff’s rate.  Given that Colakoglu did not submit any additional new information for Commerce’s review, it was correct in assigning the previously calculated rate.
21-162 NLMK Pennsylvania, LLC v. United States 12/03/2021 21-00507 Kelly 1581(i)
The Court denied proposed defendant-intervenor U.S. Steel Corporation’s motion to intervene and to stay the proceeding pending appeal to the Federal Circuit of the Court’s denial of U.S. Steel’s motion to intervene in a similar but unrelated action (Slip Op. 21-66).  Plaintiff NLMK challenged the Government’s denial of its requests for exclusion from the Section 232 duties on steel imports.  U.S. Steel opposed NLMK’s exclusion requests during the proceedings before Commerce, and contended it had a right to intervene in the ensuing litigation under CIT Rule 24(a) and, alternatively, it should be permitted to intervene under CIT Rule 24(b). 
Regarding intervention by right under CIT rule 24(a), the Court held that U.S. Steel’s asserted interest amounted to a speculative and indirect economic harm should the Court rule in favor of NLMK and that it lacked a statutory right to participate in the exclusion request process.  The Court further held that separate litigation between U.S. Steel and NLMK arising from U.S. Steel’s statements in its objections to NLMK’s exclusion request was insufficient to provide U.S. Steel with a right to intervene.  The Court therefore concluded U.S. steel lacked a legally protectable interest that would be directly affected by the outcome of this litigation and give a right to intervention.  The Court further declined to grant permissive intervention under CIT Rule 24(b), opining that U.S. Steel will not be aggrieved or adversely affected by any decision in this action because NLMK merely sought a refund of duties already paid on a limited number of entries.  Finally, the Court found NLMK would be prejudiced by a stay in the proceeding inasmuch as, if it were to succeed in the action, it would not have access to duties paid to which it was legally entitled during the duration of the stay.
21-163 China Custom Manufacturing, Inc. and Greentec Engineering LLC v. United States and Aluminum Extrusions Fair Trade Committee 12/06/2021 20-00121 Vaden 1581(c)
On December 6, 2021, the CIT affirmed Commerce’s scope ruling in which Commerce ruled that ROCK-IT 3.0 solar roof mountings (the “solar mounts”) produced by Plaintiffs China Custom Manufacturing, Inc. and Greentec Engineering, LLC were within the scope of the AD and CVD orders on aluminum extrusions from the People’s Republic of China.  The Plaintiffs conceded the solar mounts are within the Orders’ scope but argued the solar mounts should be excluded as finished merchandise.  Further, Plaintiffs contended that Commerce impermissibly changed its interpretation of the finished merchandise exclusion since the Orders were issued and argued that Commerce’s resulting determination to include the solar mounts within the scope was arbitrary, capricious, and contrary to law.  The CIT recognized that Commerce reevaluated its interpretation of the finished merchandise exclusion in 2015 following a series of rulings in Shenyang Yuanda Aluminum Industry Engineering Co. v. U.S.  However, the CIT found Commerce’s scope ruling was supported by substantial evidence because Commerce permissibly updated its interpretation of the finished merchandise exclusion to ensure conformity with multiple Federal Circuit rulings, and therefore Commerce ruled on the Plaintiffs’ scope request consistent with that updated interpretation. 
21-164 Aireko Constr., LLC v. United States 12/07/2021 20-00128 Kelly 1581(a)
The Court granted in part Plaintiff’s motion for summary judgment and granted in full Defendant’s motion for summary judgment arising from the AD/CVD duties assessed on plaintiff Aireko Construction’s imports of crystalline silicon photovoltaic (“CSPV”) products.  Between the preliminary and final determinations in the underlying investigation, the language defining the scope of the investigation was revised.  Plaintiff protested CBP’s liquidation of three entries subject to AD/CVD duties, contending the entries preceding Commerce’s final AD/CVD determinations (when the scope language was clarified) should have been liquidated without regard to AD/CVD duties because duties could not be retroactively collected.  It instigated the underlying litigation following CBP’s denial of its protest. 
In litigation, the government conceded that CBP assessed AD/CVD duties contrary to Commerce’s liquidation instructions, which directed assessment of AD duties at a different rate, and liquidation without regard to CVD duties.  Concluding that CBP failed to follow Commerce’s liquidation instructions, the Court granted summary judgment for the Government in full, and for Plaintiff in part (with regard to the CVD duties).  With respect to the application of the AD duties, however, the Court held Plaintiff was essentially protesting the content of Commerce’s instructions rather than CBP’s application of them—and that a protest was not the appropriate avenue to challenge the content of Commerce’s liquidation instructions under Shinyei, 355 F.3d at 1304 (Fed. Cir. 2004), and Belgium, 551 F.3d at 1343 (Fed. Cir. 2009).  Accordingly, the Court ordered assessment of duties on Plaintiff’s entries as directed by Commerce. 
SolarWorld Americas, Inc. v. United States; Canadian Solar Int’l Ltd. v. United States 12/8/2021 Consol. 16-00134
Consol. 17-00173
Kelly 1581(c)
On December 8, 2021, in two parallel cases, the CIT sustained Commerce’s fourth remand redetermination in its third administrative review of the AD order on crystalline silicon photovoltaic cells from China. Under protest, Commerce reconsidered its surrogate country selection and used Mexican import data to value nitrogen, as opposed to Thai import data. Commerce did not use Thai data because the record did not have sufficient evidence to support the use of the Thai data to value Canadian Solar’s nitrogen input. The CIT found that the Mexican import data was supported by substantial evidence because Mexico had the highest import volume during the period of review. The CIT also sustained Commerce’s decision to use Bulgarian import data to value Trina’s nitrogen input because Bulgaria had the highest import volume during the period of review.
21-167 Dongkuk S&C Co., Ltd. v. United States and Wind Tower Trade Coalition 12/13/2021 20-03686 Gordon 1581(c)
On December 13, 2021, the CIT remanded Commerce’s determination regarding a cost adjustment for steel plates used in the construction of wind towers following Plaintiff Dongkuk S&C Co., Ltd.’s (“DKSC”) motion for judgment on the agency record. The action involved Commerce’s final affirmative determination in the antidumping duty investigation of utility scale wind towers from the Republic of Korea.  DKSC challenged both Commerce’s determination that DKSC’s normal books and records did not reflect the cost to produce the subject merchandise based on the physical characteristics and Commerce’s subsequent decision to adjust those costs by weight-averaging to “smooth” costs to address distortions attributable to non-physical characteristics. DKSC also asserted that Commerce did not conduct a cost comparison against all eleven enumerated physical characteristics as Commerce said it did in its Decision Memorandum. The CIT agreed with DKSC and rejected Commerce’s argument that the analysis nonetheless supported the determination as post hoc rationalization by agency counsel.  The CIT remanded the case for further consideration, stating the record failed to demonstrate how Commerce’s analysis could lead a reasonable mind to conclude that DKSC’s reported costs did not reflect the cost to produce and sell the subject merchandise.  The CIT declined to take up the question of whether Commerce’s selection of surrogate data for the calculation of constructed value was proper because the CIT’s remand on the cost calculation issue could impact the surrogate data issue.
21-168 Optima Steel International, LLC and Tokyo Steel Manufacturing Co., Ltd. v. United States 12/17/2021 21-00327 Barnett 1581(i)
On December 17, 2021, the CIT sustained Commerce’s Remand Results revising the liquidation instructions in a case challenging those instructions, which were issued pursuant to an administrative review of the antidumping duty order covering hot-rolled steel from Japan.  Plaintiffs Optima Steel International, LLC (the importer of record) and Tokyo Steel Manufacturing Co., Ltd. (the producer) had several entries of subject merchandise liquidated at a higher rate, allegedly because Commerce’s liquidation instructions failed to correctly list an unaffiliated Japanese trading company that exported the subject merchandise from Japan.  After the Government filed a motion consenting to the voluntary remand, which the CIT granted, Commerce revised the liquidation instructions and indicated it would issue those instructions to CBP.  With no objections from either side, the CIT sustained Commerce’s Remand Results.
21-169 Xiping Opeck Food Co., Ltd. et al. & Yancheng Hi-King Agriculture Developing Co., Ltd. v. United States 12/17/2021 Consol. 19-00202 Eaton 1581(c)
On December 17, 2021, the CIT sustained Commerce’s final results of its administrative review of an antidumping duty order on freshwater crawfish tail meet from People’s Republic of China. Plaintiffs asked the Court to remand Commerce’s Final Results with instructions to (1) recalculate the surrogate value for live freshwater crawfish using different import data, (2) recalculate the all-others rate using an average of the mandatory respondent’s calculated rates, and (3) provide further guidance on the legality of Commerce’s 15-day liquidation policy. Commerce asked the Court to find (1) that it used the correct import data in its calculations, (2) that assigning the all-others rate was consistent with law, and (3) that, because Commerce had previously granted a consent motion to reset Hi King’s entries to unliquidated status, the challenge against the 15-day liquidation policy is moot.  The Court found that Commerce’s calculation of surrogate values was supported by substantial evidence, that the applied all-others rate was reasonable and in accordance with law, and that the 15-day liquidation challenge is moot since Commerce no longer employs that policy and it already agreed to not liquidate the products at issue.
21-170 Productos Laminadoes de Monterrey S.A. DE C.V. v. United States 12/17/2021 20-00166 Stanceu 1581(c)
On December 17, 2021 the CIT remanded Commerce’s Final Results in the second administrative review of the antidumping duty order of heavy walled rectangular welded carbon steel pipes and tubes from Mexico as not supported by substantial evidence.  Plaintiff contended that its products were sold at two different levels of trade (LOT), and Commerce argued that plaintiff’s product only is sold at one LOT.  Commerce concluded in its Preliminary Results that plaintiff had sold its products at two different levels of trade and therefore used those two different levels to calculate the dumping margin. However, after the Preliminary Results were published, defendant-intervenor submitted case briefs arguing that plaintiff did not have two LOTs and therefore its rate should be solely based on one category. Commerce agreed and reversed its decision finding that was only one LOT in its Final Results. Plaintiffs appealed the decision to only utilize one LOT, and the Court found that Commerce’s decision was not supported by substantial evidence. The Court remanded with instructions to reconsider Commerce’s decision that all home market sales occurred at a single LOT and rejection of plaintiff’s request for a LOT adjustment.
21-171 Deacero S.A.P.I. de C.V. & Deacero USA, Inc. v. United States & Rebar Trade Action Coalition 12/20/2021 20-03924 Restani 1581(c)
On December 20, 2021, the CIT sustained Commerce’s decision that constructed export price and export price may be reduced by Section 232 duties paid. Plaintiff argued that the duties should not be deducted because they were “special,” similar to duties under section 201 of the Tariff Act, not “United States import duties” within the meaning of 19 U.S.C. § 1677a(c). The Court agreed with Commerce that the language of the statute did not create a situation in which duties would be double-counted by deducting Section 232 duties in the calculation of antidumping duties and therefore, the calculation was permissible.
21-172 Mid Continent Steel & Wire, Inc. v. United States 12/22/2021 Consol. 15-00214 Barnett 1581(c)
The Court of International Trade (CIT) remanded Commerce’s determination once again based on specific instructions from the Federal Circuit that further explanation was needed regarding Commerce’s reliance on a third-country company’s financial statement to calculate a respondent’s constructed value (CV) profit. The decision stems from an antidumping duty investigation of steel nails from the Sultanate of Oman. Previously, the U.S Court of Appeals for the Federal Circuit determined that Commerce had not sufficiently explained why it relied on Hitech Fastener Manufacturer’s (“Hitech”) financial statements to calculate CV profit in light of evidence that the company was a recipient of countervailable subsidies. In its remand determination, Commerce continued to rely on Hitech’s financial statement, arguing that the record was insufficient to demonstrate that the company received a countervailable subsidy and its financial statement constituted the best source for calculating CV profit. The Court found that Commerce again failed to support its determination in light of the fact that it had declined to use Hitech’s financial statement due to evidence of subsidies other proceedings that had not been distinguished and the agency undertook only a cursory comparison of the suitability of Hitech’s statement compared to the other financial statements on the record.
21-173 Power Steel Co. v. United States 12/23/2021 20-03771 Restani 1581(c)
In 2019, Commerce initiated an administrative review of the AD order on rebar from Taiwan, resulting in 3.27% dumping margin for Power Steel. With the mandated 25% tariffs on steel pursuant to the section 232 duties, Commerce treated the 232 duties as import duties, thus deducting the 232 duties from Power Steel’s export price.
Power Steel argued that 232 duties were special duties because they are temporary and remedial and enacted through the President rather than Congress’s exclusive power to enact “normal Customs duties.” However, the CIT determine that 232 duties may in fact be deducted from the United States price because import duties encompassed “all import duties except antidumping duties,” giving deference to Commerce’s interpretation. However, the Court remanded to Commerce to consider if the sales invoice submitted by Power Steel was sufficient to demonstrate non-payment of 232 duties for the disputed transaction. If so, the 232 duties would not have been part of the sales price used to establish the export price.
21-174 Borusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States 12/28/2021 Consol. 19-00056 Restani 1581(c)
The CIT affirmed Commerce’s remand results in the antidumping duty investigation of large diameter welded pipe from Turkey.  Commerce on remand recalculated Plaintiff’s antidumping duty margin without a particular market situation adjustment; recalculated a post-sale price adjustment; and did not address the issue of the appropriate date of sale as the issue was moot as a result of the zero margin on remand.  The Court explicitly stated that Commerce cannot make a PMS adjustment to a respondent’s cost of production in the sales below cost test.  The primary issue of the case, until this decision affirming the remand results, was whether or not Borusan was entitled to a post-sale price adjustment. The Federal Circuit had previously reversed the CIT's finding that Borusan was entitled to a full post-sale adjustment and instead found in its de novo review that Commerce should only grant a third of the adjustment.  The CIT then remanded this case to Commerce to comply with the Federal Circuit’s decision and instructed Commerce to determine what the appropriate date of sale was.  The CIT affirmed the partial post-sale price adjustment and agreed that the date of sale issue was moot. 
21-175 PT. Kenertec Power Sys. V. United States 12/28/2021 Consol. 20-03687 Restani 1581(c)
The CIT sustained Commerce’s final negative determination as amended on remand in the CVD investigation of utility scale wind towers from Indonesia.  At issue was whether or not PT. Krakatau POSCO was an authority or directed by an authority such that the cut-to-length plate purchased by Plaintiff would be obtained at less than adequate remuneration.  Commerce found that Krakatau POSCO was not an authority nor directed by an authority and thus could not provide countervailable benefits.  The CIT affirmed this finding resulting in a zero margin for Plaintiff and consequently a final negative determination.
21-176 Porsche Motorsport N. Am. v. United States 12/30/2021 16-00182 Vaden 1581(a)
The Court granted summary judgment for the Government in a classification matter arising from the exportation to Canada and return of a trailer stocked with automotive parts.  Plaintiff contended the articles were temporarily exported to provide trackside assistance at motor racing events in Canada.  Plaintiff did not engage in repair services, but instead sold inventoried automotive parts to racing teams for their use in repairing and racing Porsche automobiles during the events (these parts were not returned to the United States when the trailer returned).  Plaintiff also purchased additional inventory while in Canada.  Upon re-entry, CBP classified the articles pursuant to multiple tariff provisions outside of Chapter 98. 
The Court agreed, rejecting Plaintiff’s arguments for classification of the articles instead under subheading 9801.00.8500, HTSUS, which provides duty-free treatment of “{p}rofessional books, implements, instruments, and tools of trade, occupation, or employment, when returned to the United States after having been exported for use temporarily abroad, if imported by or for the account of the person who exported such items.”  The Court construed this provision to require three elements be met:  (1) the type of article, (2) that it be returned to the U.S. following temporary use abroad, and (3) that it be imported “by or for the account of the person who exported such items.” 
First analyzing the automotive parts at issue, the Court found that they were not “{p}rofessional books, implements, instruments, and tools of trade, occupation, or employment” satisfying the first element.  The Court construed the descriptor “professional” to modify the following nouns—including “implements” and “instruments”—and then considered the nouns themselves, concluding that defined articles were “fashioned for a specific purpose for which they are used.”  The Court held the commodity inventory automotive parts were neither “professional” nor “instruments” or “implements.”  Considering the second half of the phrase, the Court considered prior uses of “tools of trade” to specifically exclude goods meant for sale, and therefore Plaintiff’s saleable automotive parts.
The Court further expressed concern that the second element was unmet, noting “considerable evidence against the proposition” that the parts were “returned to the United States after having been exported for use temporarily abroad.”  But having already concluded the parts failed to satisfy the first element, the Court declined to reach a holding interpreting that language or its application to Plaintiff’s circumstances.
Nonetheless, the Court concluded by setting forth the “three-part analysis” that “CBP should undertake” to determine the applicability of heading 9801.00.8500 in future circumstances. 
22-01 Husteel Co. v. United States 01/03/2022 Consol. 19-00112 Kelly 1581(c)
On January 3, the CIT sustained Commerce’s second remand redetermination in the review of the antidumping duty order on welded line pipe from the Republic of Korea. Commerce recalculated consolidated plaintiff NEXTEEL’s constructed value to use the actual costs reflected in NEXTEEL’s books and records, rather than estimated sales value. The Court found that this calculation was supported by substantial evidence and was in accordance with the law.
22-03 POSCO v. United States 01/13/2022 Consol. 17-00137 Katzmann 1581(c)
On January 13, 2022, the CIT sustained Commerce’s Remand Results in the countervailing duty investigation of certain CTL plate from Korea that were ordered following the Federal Circuit’s decision in POSCO v. United States. Commerce determined that POSCO did not receive electricity for less than adequate remuneration by analyzing KEPCO’s standard pricing and costing and whether it exercised preferential pricing. The CIT found this was in accordance with law. The CIT found that Commerce’s cost recovery analysis was supported by substantial evidence and was in accordance with the law when Commerce reasonably relied on data outside the POI and adequately considered the role of the Korean Power Exchange on the Korean electricity market. 
22-04 POSCO v. United States 01/21/2022 Consol. 16-00225 Barnett 1581(c)
The CIT sustained Commerce’s remand redetermination in the countervailing duty investigation on cold-rolled steel from South Korea.  The primary issue in the case was whether Plaintiff received electricity for less than adequate remuneration (“LTAR”) from the government of Korea.  The CIT had previously affirmed Commerce’s finding that the Government of Korea did not confer a benefit on Korean producers of cold-rolled steel through the provision of electricity for LTAR.  On appeal, the Federal Circuit reversed, vacated, and remanded Commerce’s determination as being contrary to law and unsupported by substantial evidence.  Commerce on remand further explained its LTAR decision and further clarified its analysis and continued to find that there was no benefit conferred on POSCO.
22-06 Guizhou Tyre Co., Ltd. v. United States 01/24/2022 Consol. 19-00031 Stanceu 1581(c)
On January 24, 2022, the CIT remanded Commerce’s less-than-fair-value affirmative determination of the antidumping duty investigation of certain truck and bus tires from China. The CIT ordered Commerce to reconsider its decision to not grant separate rate status to the two groups of plaintiffs and its decision that Guizhou did not rebut the presumption of government control.
22-08 Bonney Forge Corp. v. United States 02/02/2022 20-03837 Vaden 1581(c)
The Court on February 2, 2022, found that Commerce must conduct verification either in person or virtually or more fully explain why it did not or could not conduct a virtual verification when requested to do so by petitioners.  The Court cited to other agency and senior officials having recently conducted “mission-critical” trips to India and remanded the case with instructions to Commerce for it to either “do its job and perform some type of verification,” or “explain why its decision to fail to verify is both legal and not an abuse of discretion."
22-10 Both-Well (Taizhou) Steel Fittings, Co. v. United States 02/08/2022 21-00166 Kelly 1581(c)
On February 8, 2022, the CIT once again struck down Commerce’s adverse facts available determination on the grounds that Commerce had not shown why certain information is required by the Chinese government, exporters, and U.S. importers to demonstrate that it did not use the Export Buyers Credit Program.  Commerce in the underlying proceeding insisted that the Chinese government provide two specific pieces of information to verify non-use of the program.  When the Chinese government did not provide the information, Commerce assigned an adverse facts available rate of 10.54% for the use of the EBCP.  The CIT had already ruled against the practice, which Commerce did not appeal to the Federal Circuit.  The Court instructed Commerce that it must devise “some other alternative means of verifying the non-use certifications.”
Celik Halat ve Tel Sanayi A.S. v. United States 02/15/2022 21-00045
Stanceu 1581(c)
On February 15, 2022, the CIT issued a pair of opinions finding that Commerce abused its discretion by rejecting responses in antidumping and countervailing duty investigations on prestressed concrete steel wire strand from Turkey.  The filings in question were submitted 21 and 87 minutes late on Commerce’s electronic filing platform ACCESS due to filing difficulties experienced by respondent’s counsel.  The Court called Commerce’s rejection of the submissions coupled with a total facts available determination as a “draconian penalty” resulting from an “inadvertent technical error by its counsel that had no appreciable effect” on Commerce’s ability to conduct the investigations.  The Court was very clear that “not every failure to comply with a filing deadline will result in authority to use an adverse infer­ence against an interested party,” and that Commerce needs to “be mindful of the limitations on the exercise of its statutory and regulatory powers.”  In the Court’s view this was a “technical violation could not conceivably have impeded the investigation,” because Commerce had in its possession the timely filed BPI Not Final version, which was permitted under the regulations and the only missing information for Commerce’s analysis was what information was bracketed and what was not. 
22-14 Taizhou United Imp. & Exp. Co. v. United States 02/18/2022 Consol. 16-00009 Gordon 1581(c)
On February 18, 2022, the CIT rejected plaintiff’s arguments that Commerce could not countervail subsidies received on non-subject material inputs used to manufacture aluminum extrusions.  The Court found that plaintiff’s arguments were mainly conclusory and not supported by evidence and affirmed Commerce’s remand determination where it continued to find that the glass inputs were countervailable.  The Court found that it was plaintiff’s burden to demonstrate and prove that the inputs were used for the production of non-subject merchandise, which it determined was not met. 
22-15 Amcor Flexible Kreuzlingen AG v. United States 2/22/22 Katzmann
The CIT granted Plaintiff’s motion for summary judgment in finding that Formpack, a flexible packaging material intended for use in pharmaceutical product and medical device packaging, was properly classified under subheading 7607.20.50, HTSUS.  Plaintiff entered the subject goods under subheading 3921.90.40, HTSUS. CBP classified the shipments of Formpack under subheading 7607.20.10 as “covered or decorated with a character, design, fancy effect or pattern” backed aluminum foil. Plaintiff subsequently filed 7 protests challenging the classification and contending that the proper classification was under duty-free subheading 7607.20.50. In the present case, Plaintiff argued that Formpack should be classified under 4911.99.80 or 7607.20.50, both of which are duty-free headings.
The CIT analyzed whether the flexible packaging materials at issue are “covered or decorated with a character, design, fancy effect or pattern.” The Court found that the printed component cannot be described as a character, design, fancy effect or pattern because the printed component is intended to convey essential information, not to ornament the foil. Furthermore, the Court determined that the information printed on the subject merchandise is repeated to facilitate efficient production, and not to create a design or pattern.  The Court was also unpersuaded by the Government’s argument that the repeating blocks of informative text constitute “character or characters” under subheading 7607.20.10.  Instead, the CIT determined that subheading 7607.20.10 refers to a “single, repeating, decorative character, and not to a series of characters comprising informative text.” Lastly, the Court found that any printed material must be designed before it is printed, however having been designed is not the same as being “a design” as contemplated by subheading 7607.20.10. 
The Court ultimately agreed that Formpack should be classified under 7607.20.50 as “other” backed foil and accordingly granted Plaintiff’s motion for summary judgment and denied the Government’s cross motion. The CIT concluded that the printing on the Formpack materials neither defined its essential nature and use, nor excludes it from classification as backed aluminum foil and therefore the printed Formpack is properly classified under heading 7607. The Court rejected Plaintiff’s classification under heading 4911.
22-17 Cyber Power Sys. (USA) Inc. v. United States 2/24/22 Gordon
In this case, the CIT determined that the traditional “substantial transformation” rule is the appropriate rule of origin for determining where goods originate, for both marking and Section 301 tariff purposes.  In so ruling, the CIT rejected several theories of origin argued by Customs – for example, that a good originates in the country where most of their component parts come from, or the country where their “essential component” was made.
The Court emphasized that that disclosure of the origin of an article, rather than the article’s parts or components, is the goal of the marking statute,  19 U.S.C. §1304(a). Where Congress wants a company to disclose the origin of materials and components it knows how to do so, the Court said, citing the American Automotive Labeling Act and laws requiring disclosure of corporate use of “conflict minerals.”  The CIT noted that, in the face of Federal government guidance urging countries to de-couple from China, Cyber Power did so, moving some of its Chinese production to a newly established Philippines facility. The Court agreed with Cyber Power that “disregarding this investment, the extensive manufacturing operations being conducted in the Philippines and the creation of new articles of commerce in the Philippines, and focusing solely on the source of parts, rather than the place where the finished article is produced, sets the Section 301 policy on its ear, and would produce enormous trade distortions.” Ultimately, the Court remanded the parties to trial to resolve some outstanding factual issues.