United States Court of International Trade

Changed Circumstances Decision Remanded

In Inmax Sdn. Bhd.et. al. v. United States Slip Op. 17-158, Court No. 17-00205 (December 4, 2017) the Court reviewed Commerce’s determination to conduct a changed circumstances investigation of plaintiff, and the results of the investigation.  Plaintiff and affiliated company were respondents to an ADD investigation, and requested to be investigated as one company.  Commerce denied the request to collapse the companies and issued an ADD rate of 39.35% for Inmax and 2.66% for the affiliate. In response, Inmax sent a letter to the Taiwanese Stock Exchange stating sales to the US will take place through the affiliate company because of the high ADD rate. Commerce was requested to conduct a changed circumstances investigation of Inmax for illegally evading the ADD because of the letter. Commerce initiated the investigation and found that Inmax has stopped production of goods subject to the 39.35% ADD. The affiliate company had developed an independent product line and was legally exporting to the U.S. However, Commerce also found production could be shifted between the companies and Inmax could avoid a statutory remedy. For the following reasons, the Court remanded the changed circumstances findings in accordance with its decision.

In general, Commerce may initiate a changed circumstances investigation if good cause exists and that circumstances have changed since the last investigation.  The Court said, “it is difficult to imagine a better cause for initiating a changed circumstances review” than the evasion of an order by one company through the use of an affiliate.  Id. at 6. However, since Commerce determined that there was no evasion of the order, the dynamics of the rest of the investigation was changed. “Although the court believes Commerce had good cause to initiate the changed circumstances review—there were changed circumstances plus the possibility of evasion—the subsequent finding by Commerce that Inmax was not shipping its merchandise through Inmax Industries, does alter the dynamics of the proceeding and challenges the reasonableness of several aspects of Commerce’s subsequent decision. The court therefore must remand this matter to Commerce for further explanation.”  See Id. at 8.  The reasonableness of several aspects of Commerce’s subsequent decision” was uncertain. Id.   The Court remanded these issues to Commerce for further explanation.

Scope Ruling Sustained

In Adams Thermal Systems, Inc. v. United States and Aluminum Extrusions Fair Trade Committee, Court No. 16-128, Slip Op. No. 17-161 (December 6, 2017), plaintiff Adams Thermal Systems (“ATS”) contested the Final Scope Ruling on certain aluminum products imported by ATS.  For the reasons that follow, the Court sustained the ruling. The determination contested in this action is Antidumping and Countervailing Duty Orders on Aluminum Extrusions from the People’s Republic of China: Final Scope Ruling on Adams Thermal Systems’ Certain Fittings and Related Products for Engine Cooling Systems (July 11, 2016) (P.R. Doc. 26), available at https://enforcement.trade.gov/download/prcae/scope/96-fitting-engine-cooling-systems-12jul16.pdf (last visited Dec. 1, 2017) (“Final Scope Ruling”).

Initially, the plaintiff argued that the scope language should be confined to products that retain the general shape and form imparted by the extrusion process.  Specifically, ATS interprets the words “produced by an extrusion process” as a limitation on the meaning of the words “shapes and forms” that confines the scope to articles retaining the basic shape obtained upon extrusion. However, that is not the only interpretation and could include several conditions: that they be “shapes or forms”; that they be produced by an extrusion process in addition to being drawn, finished, or fabricated; and that they must be made from a specified alloy. All are reasonable interpretations.

Second, plaintiff has not shown how Commerce has misunderstood the scope to include articles which have “undergone fabrication that significantly altered their cross-sectional shape” or that resulted in a substantial transformation.

Finally, plaintiff has not shown how Commerce misapplied parameters in 19 C.F.R. section 351.225(k)(1) in support of an “overbroad” interpretation of the scope language.