United States Court of International Trade

Court Sustained Commerce’s Determination Not to Grant a Separate Rate Application

Before the Court in Shanghai Sunbeauty Trading Co. v. United States et. al., Slip Op. 19-51, Court No. 18-0002 (April 29, 2019) was a challenge to Commerce’s determination that plaintiff was not entitled to a separate rate application during an administrative review of the antidumping order on honey from China. Commerce determined that plaintiff was not entitled to a separate rate application because “the record showed that Sunbeauty’s entries of subject merchandise were reported to U.S. Customs and Border Protection as not being subject to antidumping duties, and thus, Sunbeauty had no suspended entries during the period of review.” Id. at 2. It is Commerce’s practice “to require respondents seeking a separate rate in an administrative review to show that they have a suspended entry during the period of review,” and by plaintiffs own admission no such suspended entry existed Id. at 9. The Court sustained “Commerce’s finding that Sunbeauty did not show it had a reviewable entry during the period of review as supported by substantial evidence and otherwise” supported by plaintiff’s own admission. Id. at 10.            

Court Sustained Commerce Remand Determinations Regarding use of AFA

Before the Court in POSCO et. al. v. United States et. al, Slip Op. 19-52, Court No. 16-00227 (May 1, 2019) was the remand results filed by Commerce regarding the methodology used by the agency when selecting the highest calculated rate after applying adverse facts available (“AFA”)  against plaintiff in the countervailing duty investigation of certain hot-rolled steel flat products from Korea. The Court had previously remanded the issue with directions for Commerce to explain the basis for its decision. On remand Commerce continued to apply the AFA against plaintiff but recalculated its subsidy rate. For the following reasons the Court sustained Commerce’s remand determinations.

“Commerce may apply AFA if a respondent does not cooperate to the best of its ability, regardless of motivation or intent.” Id. at 5.  “Commerce reiterated the factors that led to the application of AFA to POSCO, including POSCO’s failure to report information about its affiliated input suppliers, to provide information about its facility located in a free economic zone, and to report certain loans that its affiliated trading company received.” Id. at 6. As such, the AFA determinations were sustained. “When relying on secondary information to select an AFA rate, Commerce has a statutory duty to corroborate the selected rate to the extent practicable.” Id. at 7. Commerce must demonstrate that secondary information used to calculate a rate has probative value by showing that the selected rate is both reliable and relevant. Commerce originally applied two rates against plaintiff but on remand, decided to only apply one rate due to separate litigation involving the dropped rate. For the selected 1.05% rate, Commerce explained that it found the rate based on actual usage by Korean companies and was calculated in the context of an administrative proceeding. The Court concluded Commerce’s corroboration is supported by substantial evidence.

Court Denied International Trade Commission’s Motion to Stay

Before the Court in One World Techs., et. al. Inc.  v. United States et. al., Slip Op. 19-53, Court No. 19-00017 (May 2, 2019) was a motion by the United States International Trade Commission (ITC) to stay the preliminary injunction and all further proceedings. The litigation involves garage door openers that were redesigned to avoid infringing a registered patent. The Court previously granted a preliminary injunction “directing that the entries of redesigned garage door openers could not be seized.” Id. at 2. The ITC motioned to stay the case, pending an appeal to the Court of Appeals for the Federal Circuit, which denied the ITC’s motion for a stay pending appeal on April 17, 2019. For the following reasons, the court denied the ITC’s motion.

“The court considers four factors in evaluating a motion for a stay pending appeal: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.”  Id. at 3-4. The court found the ITC failed to meet its burden of making a strong showing of likelihood of success on the merits, and found this factor did not weigh in favor of granting a stay pending appeal. The Court said the ITC did not explain how the claimed injury would be irreparable if the ITC is able to seek relief from the Federal Circuit and found that this factor also did not weigh in favor of the agency. The Court said “seizure of the merchandise at issue would cause substantial injury to One World, a party interested in the proceeding.” Id. at 6. This factor could not support the granting a stay. In regards to the final factor, the Court found that the public interest was neutral and denied the motion overall.

U.S. Court of Appeals for the Federal Circuit

Santa Claus Costume is Not Festive but Fancy Dress

In Rubies Costume Company v. United States, Court No. 2018-1305 (April 29, 2019), the Federal Circuit affirmed the Court of International Trade’s decision regarding the classification of a Santa costume.  The Santa Claus costume is customarily worn in connection with the celebration of the Christmas holiday. The parties argue as to the implications of the “festive” nature of the costume. The merchandise, according to the Federal Circuit is excluded from classification as “festive articles” by the notes to chapter 95 of the Harmonized Tariff Schedule of the United States.

Because the costumes are considered “fancy dress” pursuant to Note 1(e) of Chapter 95, they are excluded from classification under Chapter 95.  Thus, according to the Federal Circuit, the costumes are classified under HTSUS 6110.30.30, 6103.43.15, 6116.93.94, and 4209.92.30.