United States Court of International Trade

Remand Determination Affirmed

In Elkay Manufacturing Company v. United States, Court No. 13-176, Slip Op. 16-169 (July 14, 2016), plaintiffs Elkay Manufacturing Company (“Elkay”) and Guangdong Dongyuan Kitchenware Industrial Company, Ltd.  (“Dongyuan”) contested an affirmative determination (“Final Determination”) that the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) issued upon concluding an antidumping duty investigation of drawn stainless steel sinks (“subject merchandise”) from the People’s Republic of China (“China” or the “PRC”).  Both plaintiffs challenged aspects of the Department’s calculation of the normal value of subject merchandise.  Before the court was the Department’s decision on remand (“Remand Redetermination”) issued in response to the court’s opinion and order in Elkay Mfg. Co. v. United States, 38 CIT __,  34 F. Supp. 3d 1369 (2014) (“Elkay I”).

In its remand determination, Commerce made no change in its surrogate selection, but changed the method in evaluating the SG&A expense ratio.  The change increased Dongyuan’s weighted-average dumping margin from 27.14% to 36.59%, increased Superte/Zhaoshun’s weighted-average dumping margin from 39.87% to 50.11%, and increased the margin for the separate rate respondents, which was the simple average of the two rates, from 33.51% to 43.35%.

The court affirmed the Thai surrogate value of $3.80 per kilogram for cold-rolled stainless steel coil because it was more specific than other alternatives. Further, the court held that Commerce could conclude that based on the record evidence any subsidization did not distort the Thai market for determining the surrogate value, nor did any manipulation of customs values would foreclose the use of the Thai import data sets. Therefore, the court held that the Thai data was the best information available.

As for the SG&A interest expense ratio, the court held that the recalculation Commerce made upon remand, which determined the subject ratio based on the full reported SG&A expenses of the three Thai producers, corrects the error the court identified in Elkay I.  Finally, the court held that Commerce had discretion to open or not open the record to consider alternative data for purposes of valuing labor hours, and therefore used the available Thailand’s National Statistics Office (NSO) data.  For all these reasons, the court affirmed Commerce’s findings. 

After Reviewing the Uses of the Subject Screws, the Court Determined them to Be “Self-Tapping Screws”

In GRK Canada, Ltd. v. United States, Court No. 9-390, Slip Op. 16-70 (July 15, 2016), the court issued a decision in response to the Court of Appeals for the Federal Circuit indicating that the court erred in refusing to consider the use of imported steel screw fastenersin its classification decision.  The Federal Circuit had vacated and remanded the court’s earlier decision granting summary judgment in favor of Plaintiff. See GRK Canada, Ltd v. United States, 37 CIT __, 884 F. Supp. 2d 1340 (2013) (“GRK I”), vacated and remanded, 761 F.3d 1354 (Fed. Cir. 2014) (“GRK II”).

After the order for remand, the court opened up discovery limited to the issues of intended use, actual use, or principal use of the subject screws. By looking at lexicographic and scientific authorities and dictionary definitions, the court determined that the subject screws are “tapping screws” as the female threads are formed by “compressing” or “cutting” of material. Further no dictionary definition limits tapping screws to use non-fibrous materials.  Thus according to the court, “the term self-tapping screw under HTSUS subheading 7318.14 refers to screws that are made of hardened steel, meet minimum torsional strength requirements, cut their own mating thread into non-fibrous materials, and are intended to be used to fasten non-fibrous materials to other materials.” Slip Op. pg. 35.  The subject screws are “self-tapping screws” HTS Subheding 7318.14.10.  The court stated, “GRK’s R4 and Trim Head screws are capable of cutting a mating thread in non-fibrous materials such as sheet metal, melamine, plastics, medium density fiberboard, cement fiberboard, particle board (also known as oriented strand board, an engineered product consisting of wood chips glued together with a bonding agent), modern composite wood decking made of recycled plastics with wood chips mixed in, capstock decking, steel studs and other man-made composite materials.” Slip Op. pg. 36. Moreover, the intended use of the GRK R4 and Trim Head screws support the self-tapping classification as they are used for fastening non-fibrous materials to other materials.

Affirming Finding that Certain Kitchen Appliance Door Handles Were Not Within Scope

In Meridian Products, LLC v. United States, Court No. 13-246, Slip Op. 16-71 (July 18, 2016), 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 People’s Republic of China (“China” or the “PRC”) to include three types of kitchen appliance door handles.  This court reviewed the decision (the “Remand Redetermination”) Commerce issued following the court’s 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 Meridian I, the court took issue with Commerce’s finding in the Scope Determination that Type B handles were not “subassemblies” but aluminum extrusions except for the fasteners, which were actually plastic end caps fitted to the ends of the aluminum- extruded components. Further, the court disagreed with the fact that Commerce did not consider the finished merchandise exclusion when reviewing Type B Handles.

Under protest, Commerce found in its Remand Redetermination, that the Type B Handles were outside the scope of the antidumping order, because, consistent with the Court’s interpretation of the scope language, “there is no general scope language which covers Meridian’s Type B door handles.”  Moreover, Commerce did not feel the need to address the finished merchandise exclusion, where the scope language does not cover the Type B door handles.  The court affirmed these findings.  Finally, the court did not agree with AluminumExtrusions Fair Trade Committee’s(“AEFTC”) arguments to reconsider the decision in Meridian I.  

Importers Who Did Not Secure Injunction Cannot Take Advantage of Lower CVD Rates

Importers who did not take action to have the liquidation of their entries suspended may not take advantage of reduced countervailing duty rates resulting from litigation by others, the United States Court of International Trade recently ruled.

In Capella Sales & Services Inc. v. United States, Slip Op. 16-72 (July 20, 2016), an importer of Aluminum Extrusions from China deposited estimated countervailing duties at an “all others” rate of 374.15% on four entries of its merchandise. Thereafter, as the result of litigation to which the importer was not a party. The “all others” rate was reduced, first to 137.65% and ultimately to 7.37%.

Capella brought suit, asserting that it was arbitrary and capricious for the government to assess duty on its entries at the 374.15% rate, when that rate was ultimately shown to be unlawful and excessive.  The Court accepted subject matter jurisdiction over the case, noting that it related to the “administration and enforcement” of the Customs laws, and arose out of a statute providing for the assessment of duties “other than for the raising of revenue”.  However, the Court dismissed the action for failure to state a claim on which relief can be granted, noting that the operation of the countervailing duty statute was quite clear – when an annual review of the CVD order is not requested by a party, that party’s entries liquidated at the rate and amount of countervailing duties deposited on entry. The assessment of the higher duties on the importer’s entries was not “arbitrary and capricious”, the court held, but rather the proper operation of clear language in the statute.