In its long-awaited ruling in Union Steel v. U.S., the Court of Appeals for the Federal Circuit affirmed on April 16 the Court of International Trade’s approval of the practice of zeroing in antidumping administrative reviews, but not investigations.
The U.S. Court of Appeals for the Federal Circuit affirmed CBP’s Harmonized Tariff Schedule classification of Kahrs International’s engineered wood flooring as plywood, rather than parquet panels or builder’s joinery. The Court of International Trade had originally sustained CBP’s classification in 2009. Kahrs argued that its engineered wood flooring did not meet the commercial meaning of plywood. But CAFC said the commercial definition of a product is irrelevant for tariff provisions that describe products by name rather than use.
The Court of International Trade stayed yet another court proceeding involving zeroing, pending a ruling on the Union Steel case by the Court of Appeals for the Federal Circuit. The stayed proceeding, Dongbu v. U.S., awaits a remand order from CIT on how to implement the appeals court’s 2011 ruling, which marked the first time a court asked the International Trade Administration for an explanation of its policy to use zeroing in administrative reviews but not investigations. At issue is the scope of the remand, as well as whether Dongbu can continue to participate in the proceeding, given that it didn’t participate in the appeal to CAFC. CIT declined to decide either issue, because the appeals court’s ruling in Union Steel could control the outcome of this case.
The Court of Appeals for the Federal Circuit affirmed the Court of International Trade’s ruling against a challenge to a scope ruling for the antidumping and countervailing duty orders on citric acid from China (A-570-937 / C-570-938). Plaintiff Global Commodities Group had argued its product containing both Chinese and third-country citric acid met the scope’s exclusion for blends of citric acid with other ingredients. According to GCG, the third-country citric acid is an “other ingredient,” and met the scope’s 60% by weight threshold for exclusion. Despite finding GCG’s interpretation “not entirely frivolous,” CAFC said it owed the International Trade Administration deference on interpretation of the scope. The interpretation was reasonable, so the court let CIT’s ruling stand.
The Court of Appeals for the Federal Circuit should uphold the lower court’s dismissal of the Rack Room Shoes v. U.S. test case on gender discrimination in Harmonized Tariff Schedule provisions, because male and female provisions in the HTS rationally differentiate between products, not people, and were put in place to meet trade policy objectives, said the government in its Jan. 17 reply brief. CAFC’s ruling on the challenge will have a hand in determining the outcome of over 160 similar cases currently before the Court of International Trade.
A product does not have to be manufactured in the U.S. for the licensee of that product to have access to the International Trade Commission’s import restrictions, said the Court of Appeals for the Federal Circuit in a denial of Nokia’s request for rehearing. A U.S. patent holder’s investment in research and licensing alone satisfies the domestic industry requirement, regardless of whether actual production is performed entirely abroad. In a dissent from the ruling, Judge Pauline Newman disagreed that no domestic production need take place to satisfy the domestic industry prong. Such an interpretation ignores Congressional intent to protect U.S. industry, even in cases where the U.S. industry is comprised of licensees rather than actual patent holders.
The March 2012 law allowing countervailing duties on non-market economy (NME) countries like China and Vietnam is not unconstitutional, ruled the Court of International Trade, even though the law is retroactive in application, and creates a “special rule” allowing CV duties but not double counting adjustments for proceedings between 2006 and 2012. The law was hurriedly enacted to specifically allow imposition of CV duties on NME countries, after the Court of Appeals for the Federal Circuit upheld a 2010 CIT ruling that the law, as it existed at the time, did not allow for their imposition. Without the law, the International Trade Administration may have had to end 24 (now 26) CV duty orders on products from China and Vietnam, and refund CV duties collected.
CBP revoked a ruling that imposed duties for repairs to a cargo ship following a Nov. 9 Court of Appeals of the Federal Circuit (CAFC) decision against CBP. The original ruling, HQ H015615, found repairs made to the Horizon Crusader, a cargo ship, to be dutiable. The CAFC ruled against CBP, agreeing with the CIT that the replacement of new anti-fouling coatings on a vessel's underwater hull that was performed overseas is not a dutiable foreign repair.
The Court of Appeals for the Federal Circuit reversed and remanded the International Trade Administration’s calculation of Jiangsu Jianghai’s separate rate from the antidumping duty investigation of 1-hydroxyethylidene-1,1-diphosphonic acid (HEDP) from China (A-570-934). CAFC said the ITA acted arbitrarily when it built a penalty to deter noncompliance into Jiangsu Jinghai’s non-individual separate rate, even though the company cooperated. Judge Reyna dissented, arguing that CAFC improperly expanded Jiangsu Jianghai’s arguments and applied the wrong standard of review, and said the decision will have “grave consequences” on the application of U.S. antidumping statutes.
The Court of International Trade’s November decision in International Customs Products v. U.S. marked the culmination of an unusually contentious case, and a difficult one for the court to decide, industry lawyers said. In its ruling, CIT said a Notice of Action that reclassified International Custom Product’s entries of white sauce was an “interpretive ruling or decision” that improperly revoked an earlier ruling letter, without the notice and comment period required by 19 USC 1625. About $300 million dollars in duties were at stake, as well as CBP’s flexibility to rate advance entries through Notices of Action. The outcome could impose burdens on both CBP and importers, said a former CBP lawyer now in private practice.