United States Court of International Trade

Court Sustained Commerce’s Final Determination

In Apex Frozen Foods Private Limited et al. v. United States, Court No.14-226, Slip Op. 16-9(published on February 10, 2015), the court considered plaintiffs Apex Frozen Foods Private Limited, et al.’s (collectively “plaintiffs”) motion for judgment on the agency record pursuant to USCIT Rule 56.2. Plaintiffs contested various aspects of the U.S. Department of Commerce’s (“Commerce” or “Department”) final determination in the eighth administrative review of the antidumping duty order on certain frozen warmwater shrimp from India, covering the period of February 1, 2012 through January 31, 2013.

Because it was not practicable to examine each of the known exporters and producers of the subject merchandise, Commerce limited the review to the two companies that, according to U.S. Customs and Border Protection (“CBP”) import data, accounted for the largest volume of subject merchandise exported to the United States to serve as mandatory respondents for the administrative review––(1) Devi Fisheries Limited and its affiliates Satya Seafoods Private Limited and Usha Seafoods (collectively “Devi Fisheries”); and (2) Falcon Marine Exports Limited and its affiliate K.R. Enterprises (collectively “Falcon Marine”).

Plaintiffs initially argued that Commerce did not have the legal authority to engage in a targeted dumping analysis or differential pricing analysis and thereafter apply A-T (comparing weighted average of normal values to individual transaction export sales) in the context of an antidumping duty administrative review. Plaintiffs argued that while Commerce may have authority to engage in a targeted dumping analysis or differential pricing analysis, the Federal Circuit’s decision in this matter is not controlling on all issues of the case. Secondly, plaintiffs contended that Commerce violated the Administrative Procedure Act (“APA”) by not following the APA’s notice and comment rulemaking requirement before applying the differential pricing analysis. Third, Plaintiffs argued that Commerce failed to comply with the so-called “limiting rule” and “allegation requirement” as provided within its regulations.  Fourth, plaintiffs challenged certain aspects of Commerce’s differential pricing analysis.

The court sustained Commerce’s findings.  Under JBF RAK LLC v. United States, 790 F.3d 1358 (Fed. Cir. 2015) , the court heldthat Commerce has the authority to engage in its differential pricing analysis to decide which comparison methodology to use for calculating dumping margins and thereafter apply A-T in the context of an administrative review when appropriate.  Moreover the limiting and allegation requirement under the regulations do not apply to administrative reviews.

As for Administrative Procedure Act (“APA”) requirements, notice and comment only apply to legislative rules not “interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.” Slip Op., pg 18 citing 5 U.S.C. § 553(b)(A). Decisions for pricing analyses do not fall under legislative rulemaking but Commerce policies and procedures.  Thus, Commerce did not violate the APA by applying A-T methodology in finding a dumping margin.

Finally, despite plaintiff’s arguments, the court found Commerce’s methodologies were supported by substantial evidence.  As for the use of weighted-average export prices to find price differences, the court found that significant price differences between the weighted-averages of export prices reasonably indicated that export prices differ significantly because the analysis “uses all of a respondent’s reported U.S. sales of subject merchandise” and the weighted-averages were therefore representative of and accounted for all the export prices. As to limiting ratio tests to “lower priced sales,” the court agreed with Commerce that all the sales had to be evaluated to review pricing patterns. As to Commerce’s pattern determination, the court agreed that Commerce’s approach to the relative significance of the differences was what mattered, and that such a decision was supported by substantial evidence. As to A-T or mixed methodology in finding the dumping margins, the court also found substantial evidence.  For these reasons Commerce’s decisions were sustained.

Court Dismissed 1581(i) Case for Lack of Subject Matter Jurisdiction

In CP Kelco (Shandong) Biological Company Limited and CP Kelco US, Inc. v. United States, Slip Op. 16-10, Court No. 15-328 (February 9, 2016), plaintiff CP Kelco (Shandong) Biological Company Limited (“CP Kelco Shandong”) and Plaintiff CP Kelco US, Inc. (collectively “plaintiffs”) brought this action pursuant to 28 U.S.C. § 1581(i)(2) and (4) (2012)1 for judicial review of a decision by the U.S. Department of Commerce (“Commerce” or “Department”) during the second administrative review of the antidumping duty order covering xanthan gum from the People’s Republic of China.  Plaintiffs claim that Commerce’s decision to deny CP Kelco Shandong’s request for treatment as a voluntary respondent and to instead consider Deosen Biochemical Ltd. and Deosen Biochemical (Ordos) Ltd. (collectively “Deosen”) as a potential mandatory respondent in the administrative review is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law or facts.”

Because section 28 U.S.C. §1581(i) does not confer the Court jurisdiction where the plaintiffs could have brought their claim under 28 U.S.C. §1581(c), plaintiffs’ claims were dismissed for lack of jurisdiction because the harm for which they seek relief may be adequately remedied in an action under 28 U.S.C. § 1581(c).  Section 1581(c) provides plaintiffs with adequate means for judicial review of Commerce’s determination. Claims regarding whether Commerce’s decision was arbitrary or capricious are generally reviewed in a case brought pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c) once Commerce issues its final determination. The Court may set aside Commerce’s finding that it would be unduly burdensome to individually examine an additional respondent, if that finding is unsupported by substantial evidence or otherwise not in accordance with law. For these reasons plaintiffs’ claims were dismissed for lack of jurisdiction.

United States Court of Appeals for the Federal Circuit

Court Affirmed CIT’s Decision Not to Provide a Declaratory Judgment

Before the Federal Circuit, in Ford Motor Company v. United States, Court No. 2014-1726 (February 3, 2016) was the Court of International Trade’s decision declining a declaratory judgment.  Ford Motor Company filed suit in the Court of International Trade (“CIT”) to challenge Customs’ treatment of nine reconciliation entries where Customs did not properly extend the liquidation of these same entries and therefore could not have reassessed the duty. At the time of the lawsuit, because there were no liquidations to protest, as Customs did not liquidate the 9 entries, Ford sought a declaratory judgment under 19 U.S.C. §1581(i) that its entries were deemed liquidated as a matter of law, and, therefore, that it was entitled to a $6.2 million refund based on its duty calculation asserted in the reconciliation entries.

First, the Federal Circuit affirmed the CIT’s dismissal of Counts 1-4 and 6 because Ford’s action was barred by the two-year limitations period under 28 U.S.C. § 2636(i), having been commenced more than two years after Ford reasonably should have known about the existence of those claims. Furthermore, the Federal Circuit found there is nothing jurisdictional about 28 U.S.C. § 2636(i), and that it is clearly a statute of limitations, and does not restrict the court’s authority.

Second, the Federal Circuit affirmed the CIT’s decision not to provide a declaratory judgment on whether a deemed liquidation occurred because that decision would not result in the issuance of refunds, which is in actuality what plaintiff seeks. However, the protest action which Ford has before the CIT on all relevant entries will address the correctness of the liquidation decisions on those entries.  For these reasons the Federal Circuit affirmed the lower court’s decision.

Canadian International Trade Tribunal

e-Reader Covers Classified as Carrying Cases

Leather cases designed to cover the Amazon Kindle e-reader are classified as “carrying cases” in Harmonized Tariff Schedule (HTS) Heading 4202, according to a recent decision of the Canadian International Trade Tribunal (CITT).

In The Source (Bell) Electronics Inc. v. President, Canada Border Services Agency, AP-2015-002, the issue was whether the leather covers were “similar containers” to the carrying cases provided for in Heading 4202 of the HTS. The Source argued that the goods were not “similar” to the carrying cases and other holders of Heading 4202, since they are designed to remain on the e-Reader while the –Reader is being used.  Rather, e plaintiff argued that the items were more like “book covers” and should be classified under Heading 4205 of the Tariff.

The court noted that the threshold for a good to be considered a “similar container” to those identified in HTS Heading 4202 was not a high one. In additional, the Court rejected the notion that the goods of Heading 4202 required some form of carrying handle, noting that items such as spectacle cases do not come with handles for transporting. Because Heading 4202 covered the goods, and Heading 4205 was a residual provision, the Tribunal found that Heading 4202 applied.

The Tribunal also rejected the notion that e-Readers were “books” and the imported goods were “book covers”. Rather, the e-book is a digital form of content “which can be read on a computer or a specifically designed handheld device”. The articles were computer or device covers, and were classified under Heading 4202.