United States Court of International Trade

Motion to Stay Liquidation Granted

In Sunpreme, Inc. v. United States, Slip Op. 17-1, Court No. 15-315 (January 5, 2017), the court granted defendant’s motion to stay liquidation pending defendant’s appeal where defendant would have no recourse to challenge the court’s decision that CBP’s determination to suspend liquidation and collect deposits on Plaintiff’s entries was unlawful.  The Court granted plaintiff’s motion for judgment on the agency record pursuant to USCIT Rule 56.1 challenging United States Customs and Border Protection’s (“Customs” or “CBP”) determination to require that Plaintiff file its entries as subject to antidumping and countervailing duty (“AD/CVD”) orders on crystalline silicon photovoltaic cells, whether or not assembled into modules from the People’s Republic of China (collectively “Orders”).  See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, from the People’s Republic of China, 77 Fed. Reg. 73,018 (Dep’t Commerce Dec. 7, 2012).  Specifically, the court set aside CBP’s interpretation of the Orders to the effect that Plaintiff’s imports are subject to the Orders as contrary to law under Section 706 of the Administrative Procedure Act, as amended, 5 U.S.C. § 706 (2012), and that Customs had the power to suspend liquidation and collect cash deposits prior to the scope inquiry.

Despite the likelihood of success on the merits prong of the motion to stay, the Court granted the motion because of the overwhelming irreparable harm posed if plaintiff’s pre-initiation entries liquidated, which would essentially moot defendant’s appeal.

Commerce’s Determination Remanded in Part

In United States Steel and Fasteners, Inc. v. United States, Court No. 13-270, Slip Op. 17-2 (January 11, 2017), the Court was asked to determine whether Commerce acted in accordance with the law when it issued retroactive suspension of liquidation instructions. 

On July 10, 2013, Commerce issued a final scope ruling determining that AREMA washers were included within the scope of the Order because the “evidence in the Scope Request as well as in the Petition, the record of the initial investigation, and the determinations of the Department and the ITC, demonstrates that the design of AREMA washers facilitates the same functionality characteristics of helical spring lock washers as described by the scope of the Order.” Plaintiff sought a remand of the final scope ruling with instructions for Commerce to determine that AREMA washers are excluded from the scope of the Order, or alternatively, to initiate a scope inquiry under 19 C.F.R. § 351.225(e) and withdraw the suspension instructions which asked for retroactive suspension of liquidation of AREMA washer entries. Defendant argued that Commerce’s final scope ruling was supported by substantial evidence and in accordance with the law.

Because Commerce found that the scope covers a wide variety of washers of various steel qualities, including coated and no-coated washers, used on installation of railroad tracks, and AREMA washers were used exclusively on railroad tracks, the Court found that there was substantial of evidence to support this finding. 

Though the court affirmed Commerce’s interpretation of the scope, Commerce’s instruction to Customs to retroactively suspend liquidation of AREMA washers was contrary to law because the instruction exceeds Commerce’s regulatory authority under subsection (l) of 19 C.F.R. § 351.225. Under the regulation, suspension of entries should only have occurred on or after the date of the initiation of a scope inquiry.   Here Customs had not been collecting deposits of antidumping duties on Plaintiff’s entries of AREMA washers, suggesting that the scope of the Order was not clear with respect to such merchandise. Customs’ failure to assess antidumping duties on Plaintiff’s entries ostensibly showed that Customs did not view Plaintiff’s merchandise within the scope of the Order.  Thus, the Court held that any retroactive suspension of liquidation was unlawful. Commerce’s instructions were remanded for Commerce to draft new suspension of liquidation instructions to be consistent with the Court’s opinion. 

United States Court of Appeals for the Federal Circuit

Federal Circuit Upholds CIT Classification of “Propants” for Fracking

The Court of Appeals for the Federal Circuit has issued a decision upholding a decision of the United States Court of International Trade that “proppants”, granular bauxite materials designed to prevent fissure sealing during hydrofracking operations are classified in Heading 2606 of the Harmonized Tariff Schedule, as Aluminum ores and concentrates. 

In Schlumberger Technologies Inc. v. United States, No. 2015-2076   (January 9, 2017), the Circuit Court upheld a decision by CIT Chief Judge Timothy Stanceu which rejected Customs’ contention that the granular proppants were either classified under HTS subheading 6909.19.50 as “ceramic wares for laboratory, chemical or technical uses, or alternatively under HTS subheading 6914.90.80, as “ceramic articles”. Looking to the Explanatory Notes to the HTS for guidance, the Federal Circuit determined that “ceramic wares” were goods which had been “shaped after firing” and had a definite finished shape. It rejected the government’s contention that the granulation process imparted a finished shape to the proppant granules, noting that the granules had a permissible 100% size variance. It also rejected the notion that the granules were “ceramic articles”, noting that they were not of a kind of merchandise typically treated as “articles”.