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U.S. Customs and Border Protection

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Slip Op. 13–68

EDMET RESOURCES CORPORATION, Plaintiff, v. UNITED STATES,

Defendant, and ANH R

EFRACTORIES COMPANY,RESCO PRODUCTS,INC.,

and MAGNESITA REFRACTORIES COMPANY, Defendants.

Before: Nicholas Tsoucalas, Senior Judge

Court No.: 12–00215

Held: Plaintiff Fedmet Resources Corporation’s motion for judgment on the agency

record is denied.

Dated: May 30, 2013

Morris, Manning & Martin LLP,(Jeffrey O. Frank, Brady W. Mills, Donald B.

Cameron, Julie C. Mendoza, Mary S. Hodgins, and R. Will Planert) for Fedmet Re-

sources Corporation, Plaintiff.

Stuart F. Delery, Principal Deputy Assistant Attorney General; Jeanne E. Davidson,

Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch,

Civil Division, United States Department of Justice (Antonia R. Soares); Office of Chief

Counsel for Import Administration, United States Department of Commerce, Devin S.

Sikes, Of Counsel, for the United States, Defendant.

Jochum, Shore & Trossevin, PC,(Marguerite Ellen Trossevin, Andrew M. Shore,

James J. Jochum, and Reza Karamloo) for ANH Refractories Company, Defendant-

Intervenor.

Doyle, Barlow & Mazard PLLC,(Camelia C. Mazard) for Resco Products, Inc., and

Magnesita Refractories Company, Defendant- Intervenors.

OPINION

TSOUCALAS, Senior Judge:

Before the court is Fedmet Resources Corporation’s (“Fedmet”) US-

CIT Rule 56.2 motion for judgment on the agency record appealing

the United States Department of Commerce’s (“Commerce”) final

scope ruling regarding antidumping and countervailing duty orders

on magnesia carbon bricks (“MCBs”). Pl.’s Mot. J. Agency R. at 1–2

(“Pl.’s Br.”); see Certain Magnesia Carbon Bricks from the People’s

Republic of China and Mexico: Final Scope Ruling — Fedmet Re-

sources Corporation, Case Nos. A-201–837, A-570–954 and C-570–955

(July 3, 2012), Pub. R. 2d 74 at 1–2 (“Final Scope Ruling”).

Fedmet

imports “Bastion”-trademarked magnesia alumina carbon bricks

(“MACBs”), which contain alumina in addition to magnesia and car-

bon. Pl.’s Br. at 6. In its Final Scope Ruling, Commerce determined

that Fedmet’s Bastion bricks are within the scope of the antidumping

and countervailing duty orders. Final Scope Ruling at 1–2. Fedmet

argues that Commerce’s ruling is not based on substantial evidence or

otherwise in accordance with the law because MACBs have distinct

physical and commercial characteristics from in-scope MCBs, and

because the International Trade Commission (“ITC”) did not consider

MACBs in its injury determination. Pl.’s Br. at 9–11; see Certain

Magnesia Carbon Bricks from China and Mexico (Final), USITC Pub.

4182, Inv. Nos. 701-TA-468 and 731-TA-1166–1167 at 3–6 (Sept. 2010)

(“ITC Final Determination”). Commerce and defendant-intervenors

Resco Products, Inc. (“Resco”), ANH Refractories Company, and Mag-

nesita Refractories Company (collectively, “defendant-intervenors”)

oppose the motion. See Commerce’s Resp. Pl.’s Br. at 7–8 (“Commerce

Resp.”); ANH’s Resp. Pl.’s Br. at 2–5 (“ANH Resp.”); Magnesita’s &

Resco’s Resp. Pl.’s Br. at 4–5 (“M&R Resp.”).

BACKGROUND

In September 2010, Commerce published antidumping duty orders

on MCBs from Mexico and the People’s Republic of China (“PRC”),

and a separate countervailing duty order on MCBs from the PRC.

Certain MCBs From Mexico and the PRC: Antidumping Duty Orders,

75 Fed. Reg. 57,257, at 57,257 (Sept. 20, 2010) (“AD Orders”); Certain

MCBs from the PRC: Countervailing Duty Order, 75 Fed. Reg. 57,442,

at 57,442 (Sept. 21, 2010) (“CVD Order,” and collectively, “the Or-

ders”). MCBs are a type of “refractory brick” necessary for certain

applications in the steelmaking industry. R.3d 3 Ex. 1 at 6–7. Steel-

makers use refractory bricks as lining for the inside of ladles that

transport and pour molten steel and as lining for the inside of met-

allurgy furnaces. Id. & Ex. 2 at 5–7. Refractory bricks undergo re-

peated exposure to extreme temperatures and caustic substances in

these roles, meaning each brick has a limited useful life. Id. Ex.2at

5–6. Bricks used in certain locations — particularly at the “slag line

and at the top of the steel melt[,] where active chemical processes are

taking place and impurities and waste tend to aggregate” — experi-

Commerce implemented its new electronic filing system during the course of the proceed-

ings below, causing the administrative record to be subdivided into four parts. Unless

otherwise noted, all documents in the first, second, third, and fourth divisions of the record

hereinafter will be designated “R.1st,” “R.2d,” “R.3d,” and “R.4th,” respectively. The first

and second portions of the record contain public documents, while the third and fourth

portions contain confidential documents.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

ence more wear than bricks in other locations. Id. at 5. Consequently,

producers offer a wide range of refractory bricks with finely tuned

chemistries for use in different parts of the ladle or furnace. Id. at

5–6. Steelmakers arrange these specialized bricks to achieve uniform

deterioration and to lower costs, although the exact arrangement

“may be quite different from shop to shop.” Id. at 5–7.

MCBs are a particularly strong variety of refractory brick composed

of magnesia (MgO) and added carbon. Id. Ex. 1 at 10–12 & Ex. 2 at

5–7. MCBs exhibit high thermal conductivity, low porosity, and high

corrosion resistance. R.2d 18 at 5 (citing R.3d 3 Ex. 1 at 10–11).

Consequently, MCBs are used where corrosion is most severe — the

slag line, the lower sidewall, the upper sidewall, the roofs of ladles,

and the wall lining of high-temperature furnaces. R.3d 3 Ex. 1 at 6–7.

The scope of the Orders covers “certain chemically-bonded . . .

magnesia carbon bricks with a magnesia component of at least 70

percent magnesia...byweight,...with carbon levels ranging from

trace amounts to 30 percent by weight, regardless of enhancements

. . . and regardless of whether or not antioxidants are present.” Pl.’s

Br. at 6 (quoting AD Orders, 75 Fed. Reg. at 57,257; CVD Order,75

Fed. Reg. at 57,443).

On May 3, 2011, Fedmet filed a scope ruling request to determine

whether its Bastion MACB product is covered under the Orders.

Certain Magnesia Carbon Bricks from the PRC and Mexico: Prelimi-

nary Scope Ruling — Fedmet Resources Corporation, Case Nos.

A-201–837, A-570–954, and C-570–955 at 1 (Mar. 30, 2012) (“Prelimi-

nary Scope Ruling”). Fedmet’s Bastion bricks contain 70–90% mag-

nesia and 3–15% carbon, levels well within the scope’s technical

parameters. Pl.’s Br. at 6–7. However, Fedmet argues that the 8–15%

alumina (Al

) content of its Bastion bricks distinguish them from

in-scope MCBs. Id. at 3. Specifically, the alumina reacts with mag-

nesia in the brick at steelmaking temperatures to form a mineral

called spinel. Id. “The spinel improves the performance of the brick in

certain applications by promoting permanent expansion of the brick

when it is heated, which hinders the formation of cracks, and main-

tains that expansion when the ladle cools between uses.” Id.

All parties agree there is no standard chemical definition for bricks

marketed as MACBs. Final Scope Ruling at 9; see Pl.’s Reply at 6.

Evidence on the record demonstrates that the term “MACB” can refer

to bricks with more than 70% magnesia (“low-alumina bricks”), as

well as bricks with less than 70% magnesia (“high-alumina bricks”).

As the amount of magnesia in an MACB increases, the amount of room left for added

alumina decreases. Hence, a low-alumina brick with 70% magnesia cannot contain more

than 30% alumina, whereas a high-alumina brick with less than 70% magnesia can have up

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Preliminary Scope Ruling Ex. 2 at 3 (online description of products

marketed as MACBs with less than 70% magnesia content); R.2d 18

Ex.1 at 3 (in reference to MACBs, “carbon-bonded bricks with 50–90%

[magnesia] or 40–50% [alumina] are used in the Asian region”); R.4th

2 at 3–10 (discussing industry naming conventions indicating that

any brick with a majority magnesia content and added alumina and

carbon can be called an MACB). Fedmet stated at oral argument that

the minimum level of alumina required to form spinel is about 5%,

Hr’g Tr. at 17, Fedmet Res. Corp. v. United States, No. 12–00215 (Ct.

Int’l Trade Mar. 26, 2013), but there is little evidence in the admin-

istrative record to support this claim. See Preliminary Scope Ruling

Ex. 1 at 100–01 (showing that bricks with 4% added alumina exhibit

characteristics similar to bricks with 5–7% added alumina, but noting

that bricks with 4% alumina “show[] less expansion[,] which may not

be optimal” for preventing slag penetration).

In its preliminary determination, Commerce ruled that Fedmet’s

Bastion low-alumina MACB is within the scope of the Orders. Pre-

liminary Scope Ruling at 1–2. Commerce first found that “[b]ased on

the magnesia and carbon content alone, it appears that Fedmet’s

Bastion[] [MACBs] fall within the scope of the Orders” because they

contain more than 70% magnesia and have some added carbon. Id. at

26. Nevertheless, Commerce found “it necessary to look beyond the

language of the scope of the Orders because of the potential ambiguity

regarding whether the plain language of the scope covers MCBs with

alumina.” Id. Commerce then determined that conflicting language in

the petition and in the investigations before it and the ITC “pre-

vent[ed] a definitive conclusion on these sources alone.” Id. at 26–27.

Upon consideration of the physical characteristics, purchaser expec-

tations, end use, channels of trade, price, and manner of advertising,

however, Commerce concluded that Fedmet’s Bastion bricks did fall

within the scope of the Orders. Id. at 27–32. Commerce later affirmed

each of these determinations in its Final Scope Ruling. Final Scope

Ruling at 1–12.

Fedmet alleges that the Final Scope Ruling is unsupported by

substantial evidence and contrary to law because the steel industry

considers MACBs to be distinct products from MCBs. Specifically,

Fedmet argues: (1) language in the petition, questionnaire responses,

and investigations indicates the scope should be interpreted to ex-

clude MACBs; (2) MACBs are distinguishable from in-scope MCBs on

the basis of their distinct physical properties; and (3) Commerce acted

to nearly 50% alumina. Bricks with more alumina than magnesia are called alumina

magnesia carbon bricks (“AMCBs”). R.4th 2 at 3.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

contrary to law by interpreting the scope as covering MACBs even

though the ITC excluded them from its injury determination. Pl.’s Br.

at 12–38.

JURISDICTION

The court has jurisdiction over this matter pursuant to section

516(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19 U.S.C. §

1516a(a)(2)(B)(vi) (2006).

STANDARD OF REVIEW

The court must uphold Commerce’s scope determination unless it is

“unsupported by substantial evidence on the record, or not otherwise

in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). “Substantial

evidence is ‘such relevant evidence as a reasonable mind might accept

as adequate to support a conclusion,’” Huaiyin Foreign Trade Corp.

(30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting

Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)), “taking into

account the entire record, including whatever fairly detracts from the

substantiality of the evidence.” Atl. Sugar, Ltd. v. United States, 744

F.2d 1556, 1562 (Fed. Cir. 1984).

“[T]he plain language of the . . . order is paramount” in determining

whether particular products are included in the scope. King Supply

Co. v. United States, 674 F.3d 1343, 1345 (Fed. Cir. 2012); see Wal-

green Co. v. United States, 620 F.3d 1350, 1354 (Fed. Cir. 2010).

Nevertheless, antidumping and countervailing duty orders “some-

times employ general language,” which “can render the...scope

ambiguous.” See Mid Continent Nail Corp. v. United States,35CIT

__, __, 770 F. Supp. 2d 1372, 1378 (2011); 19 C.F.R. § 351.225(a)

(2013). A scope ruling “is a highly fact-intensive and case-specific

determination,” King Supply Co., 674 F.3d at 1345, that is “particu-

larly within the expertise of [Commerce].” Sandvik Steel Co. v. United

States, 164 F.3d 596, 600 (Fed. Cir. 1998). Thus, challenging a scope

ruling is “a course with a high barrier to reversal.” Nippon Steel Corp.

v. United States, 458 F.3d 1345, 1352 (Fed. Cir. 2006) (quoting Mit-

subishi Heavy Indus., Ltd. v. United States, 275 F.3d 1056, 1060 (Fed.

Cir. 2001)) (internal quotation marks omitted).

ANALYSIS

If a scope contains language “that is subject to interpretation,”

Commerce will resolve the ambiguity using the interpretive tools

All further citations to the Tariff Act of 1930 are to the relevant provisions of Title 19 of

the United States Code, 2006 edition, and all applicable supplements thereto.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

contained in 19 C.F.R. § 351.225. Duferco Steel, Inc. v. United States,

296 F.3d 1087, 1096–97 (Fed. Cir. 2007). Fedmet concedes “the scope

language alone is not dispositive of the treatment of [MACBs] under

the [O]rders.” Pl.’s Reply at 2–3; see Def.’s Br. at 13–14.

Under 19 C.F.R. § 351.225(k)(1), Commerce must first consider

“[t]he descriptions of the merchandise contained in the petition, the

initial investigation, and the determinations of [Commerce]...and

the [ITC].” Id. If those “criteria are not dispositive,” Commerce must

then consider the factors listed in paragraph (k)(2): “(i) [t]he physical

characteristics of the product; (ii) [t]he expectations of the ultimate

purchasers; (iii) [t]he ultimate use of the product; (iv) [t]he channels

of trade in which the product is sold; and (v) [t]he manner in which

the product is advertised and displayed.” Id. § 351.225(k)(2).

I. Commerce’s 19 C.F.R. § 351.225(k)(1) Analysis

Commerce determined that “at no point in either the petition, the

. . . pre-initiation stage, or the [ITC’s determination] did [Resco]

identify the chemical composition and technical specifications of each

type of refractory brick, or expressly state that [MACBs] with a

chemical composition like [Fedmet’s Bastion brick] fall outside the

scope.” Final Scope Ruling at 5. In other words, Commerce found each

reference to “MACBs” in the (k)(1) evidence to be ambiguous with

respect to whether it actually identified low-alumina bricks like the

Bastion brick. In light of this ambiguity, Commerce determined that

the (k)(1) evidence was inconclusive and further analysis under the

(k)(2) factors was necessary to determine to whether Fedmet’s Bas-

tion MACBs were within the scope. Id.; Preliminary Scope Ruling at

26–27.

Fedmet insists that Commerce’s analysis is not supported by sub-

stantial evidence because MACBs are simply understood to be dis-

tinct from MCBs. See Pl.’s Br. at 13–24. Claiming that “MCBs do not

contain added alumina,” Fedmet argues that each reference to

MACBs in the (k)(1) evidence demonstrates that MACBs like its

Bastion brick were never intended to be included in the scope. Id. at

24. For example, Fedmet notes that Resco named “magnesite, fired

bauxite, magnesia dolomite and [MACBs]” as products that “are not

generally substitutable [for in-scope MCBs], in a technical sense, due

to varying chemical and physical properties and wear characteris-

tics.” R.3d 3 Ex. 1 at 10. Based on this statement, Fedmet concludes

that Resco “express[ly]” excluded low-alumina MACBs like Fedmet’s

Bastion brick from the scope. Pl.’s Br. at 13–14. Fedmet also identifies

a questionnaire response where Resco stated that “[t]he scope of our

petition focuses only on MCB” and that “[t]hese other products [in-

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

cluding MACBs] do not provide the same performance where MCB

are used in steelmaking and steel handling applications.” R.3d 3 Ex.

2 at 4. Fedmet argues this response “can only be read as confirmation

that the scope language defining MCBs was adequate to clearly

exclude [MACBs].” Pl.’s Br. at 16.

Fedmet’s approach obscures two critical facts supported by the

record that instill the term “MACB” with considerable ambiguity.

First, advertisements and other record evidence indicate that the

term “MACB” can refer to low-alumina bricks as well as high-

alumina bricks. Preliminary Scope Ruling, at Ex. 2; R.2d 18 Ex. 1 at

3; R.4th 2 at 3–10. Second, record evidence of industry naming con-

ventions reasonably suggests that so long as the magnesia content of

a brick with added alumina remains above 70%, it can be called either

an MCB or an MACB. R.2d 19 at Ex. 2 (advertisements describing the

“Vesuvius”-trademarked product as an MCB even though it contains

levels of added alumina comparable to the Bastion MACB product);

Preliminary Scope Ruling at Ex. 2 (several online marketing sources

describing products as MCBs even though they contain added alu-

mina). Consequently, without further specification, “MACB” may re-

fer to only high-alumina MACBs in some contexts, to high- and

low-alumina MACBs in others, or to MCBs with added alumina in

others still. R.2d 19 at Ex. 2; Preliminary Scope Ruling at Ex. 2.

Commerce recognized this ambiguity throughout its analysis, id. at

19, 26–27; Final Scope Ruling at 5, and reasonably concluded it could

not determine whether low-alumina MACBs like Fedmet’s Bastion

bricks were outside the scope based on the (k)(1) evidence alone. See

ArcelorMittal Stainless Belg. N.V. v. United States, 694 F.3d 82, 88

(Fed. Cir. 2012) (“[A]ntidumping orders should not be interpreted in

a vacuum devoid of any consideration of the way the language of the

order is used in the relevant industry.”).

Because Resco’s use of the term “MACB” does not differentiate

between high-alumina and low-alumina MACBs, the petition and

questionnaire response language Fedmet identifies is plainly am-

biguous. See Preliminary Scope Ruling at 26–27. MACBs “generally”

are not substitutable for MCBs, but record evidence shows that low-

alumina MACBs specifically are often substituted for MCBs due to

their similar or even enhanced performance in MCB applications. Id.

atExs.1&2;R.2d 19 at 8–13 & Exs. 2, 5. In a later response, Resco

went on to describe how products it excluded by name from the

proposed scope always fall outside of the scope’s plain language, while

making no similar claim elsewhere about MACBs. See R.3d 3 Ex. 3 at

1. As Commerce reasonably determined, without further chemical

specification, these references to MACBs indicate that Resco may

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

have intended to exclude only some MACBs, namely, high-alumina

MACBs that can never meet the scope’s plain language. See Prelimi-

nary Scope Ruling at 26–27.

Fedmet’s remaining arguments are similarly unpersuasive. Fedmet

avers that Commerce failed “to meaningfully address the repeated,

express statements by Resco that it did not intend to cover [MACBs].”

Pl.’s Br. at 18. Fedmet argues further that Commerce “chose[] to

accept” Resco’s explicit statements excluding MACBs from the scope,

and that Commerce cannot now change its position. Pl.’s Br. at 20.

Fedmet also insists that Commerce and Resco never offered a “plau-

sible alternative interpretation” of the references to MACBs in the

petition and the questionnaire responses. Pl.’s Br. at 22. In fact, Resco

never expressly stated that MACBs with in-scope quantities of mag-

nesia and carbon should be excluded from the Orders. See R.3d 3 Exs.

1–3; Preliminary Scope Ruling at 26–27; Pl.’s Br. at 29 (quoting

testimony before the ITC where counsel for Resco listed MACBs

alongside other excluded bricks, but did not distinguish between

high- and low-alumina MACBs). Furthermore, Fedmet’s refusal to

consider the difference between high- and low-alumina varieties of

MACB does not eliminate the inherent linguistic ambiguity support-

ing multiple reasonable interpretations of the (k)(1) evidence. See

Preliminary Scope Ruling at 19, 26–27; Final Scope Ruling at 5.

As every piece of (k)(1) evidence is ambiguous as to whether it is

referring to MCBs with added alumina or to all bricks with more than

50% magnesia, some carbon, and some alumina, Commerce’s deter-

mination that the (k)(1) factors were not dispositive was reasonable.

See Preliminary Scope Ruling at 4–27; Final Scope Ruling at 3–5.

II. Commerce’s 19 C.F.R. § 351.225(k)(2) Analysis

Fedmet contends that “even if the [c]ourt were to find that Com-

merce was lawfully permitted to consider the factors in 19 C.F.R. §

351.225(k)(2), Commerce’s findings under those factors are also un-

supported by substantial evidence.” Pl.’s Br. at 11. Fedmet argues

that Commerce made four general errors in finding that the physical

characteristics of its Bastion brick are similar to those of in-scope

MCBs.

Pl.’s Br. at 33–38.

Fedmet includes two additional paragraph-long sections titled “Channels of Trade and

Price and Manner of Sale and Advertising” and “Expectations of the Ultimate Purchaser

and Ultimate Use of the Product.” Pl.’s Br. at 37–38. In those sections, Fedmet argues that

Commerce improperly based its finding that “MCBs and [MACBs] are ‘interchangable’” on

“certain product advertisements it pulled off the internet...byentities who were not

parties to Commerce’s scope inquiry,” Pl.’s Br. at 37 (quoting Final Scope Ruling at 10), and

“ignore[d] detailed evidence provided by Fedmet on the different specific uses of [MACBs].”

Pl.’s Br. at 38. It is not the court’s role to reweigh evidence before Commerce, see Laminated

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

First, Fedmet claims “Commerce’s finding is contrary to the ITC’s

final injury determination,” wherein “the [ITC] found that ‘other

refractory bricks, such as fired magnesite, fired bauxite, magnesia

dolomite, and [MACBs]...donothave the same physical character-

istics of MCB, are easily differentiated by price, and their uses are not

perceived by the steel producers as substitutable.’” Pl.’s Br. at 33

(quoting ITC Final Determination, at I-8). Fedmet again fails to

acknowledge the difference between high-alumina and low-alumina

MACBs. Therefore, Fedmet has not demonstrated how this reference

to MACBs definitively identifies all MACBs instead of only those

high-alumina MACBs that are not interchangeable with MCBs. See

id.

Second, Fedmet argues that Commerce “ignore[d] the extensive and

detailed evidence” demonstrating that Bastion MACBs are distinct

from in-scope MCBs due to their spinel-producing alumina content

“in favor of a single article that Commerce found on the internet” in

a publication called Millennium Steel. Pl.’s Br. at 33–34. Fedmet

challenges “the bona fides of this publication” and “the credentials of

the authors of this study,” while simultaneously insisting that the

Millennium study supports its own conclusion that MACBs are dis-

tinguishable from MCBs. Pl.’s Br. at 34–35.

Fedmet has not demonstrated that Commerce’s reliance on the

Millennium study was unreasonable. The court’s role is not to re-

weigh evidence, see Laminated Woven Sacks, 716 F. Supp. 2d at 1328

(citing Burlington Truck Lines, 371 U.S. at 168), and it will not accept

Fedmet’s invitation to do so here, especially in the complete absence

of evidence questioning the study’s credibility. In any event, Com-

merce used the Millennium study to “confirm[] that MCBs with added

alumina are widely used” in the same applications and have similar

physical properties as in-scope MCBs. Preliminary Scope Ruling at

28 & Ex. 1 (internal quotation marks omitted). The study concludes

that some MACBs may offer better performance than non-alumina

MCBs in areas where MCBs are generally used. Id. Ex. 1 at 101–02.

Nevertheless, according to the Millennium study, “[e]xcessive expan-

sion” caused by spinel formation in high-alumina MACBs “may lead

to development of stresses which causes structural spalling.” See id.

at 100–02. Consequently, the Millennium study is consistent with

other record evidence demonstrating a physical distinction between

high-alumina and low-alumina MACBs — that spinel formation in

Woven Sacks Comm. v. United States, 716 F. Supp. 2d 1316, 1328 (2010) (citing Burlington

Truck Lines Inc. v. United States, 371 U.S. 156, 168 (1962)), and there is substantial

additional evidence on the record indicating that low-alumina MACBs like Fedmet’s Bas-

tion brick are in fact interchangeable with MCBs. See Preliminary Determination Exs. 1 &

2; ITC Final Determination at I-9; R.2d 19 at Exs.3&5.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

low-alumina MACBs provides the same physical properties that set

in-scope MCBs apart from other refractory bricks, whereas spinel

formation in high-alumina MACBs causes those bricks to behave like

other out-of-scope refractory products. See Preliminary Scope Ruling

at 28–29.

Third, Fedmet contends that Commerce improperly “dismissed the

information” contained in the Pocket Manual on the basis that it

contains ambiguous language as to the chemical content of MACBs.

Pl.’s Br. at 36. Appearing directly below a table titled “Classification

of the [AMCBs] according to ISO/DIS 10081–4,” the Pocket Manual

notes: “Regarding the magnesia side of the variation range of MgO

and Al

at the moment carbon-bonded bricks with 50–90% MgO or

40–50% Al

are used in the Asian region. bricks are designated as

[MACBs].” R.2d 18 Ex. 1 at 108. The remainder of the article makes

conclusions regarding the difference between AMCBs and MCBs,

without further specifying the nature of MACBs. Id. at 108–11. Com-

merce argues that it “reasonably found the reference to MACBs in the

Pocket Manual ambiguous as to the chemical composition of [MACBs]

because it is unclear whether the focus of the paragraph is MACBs or

[AMCBs], which contain a higher alumina content than [MACBs],”

and is unclear as to whether that “standard” applies outside of Asia.

Def.’s Resp. at 33.

Extending to Commerce the appropriate deference in analyzing the

record before it, King Supply Co., 674 F.3d at 1348, Commerce’s

treatment of this passage as ambiguous was reasonable. In context,

the Pocket Manual can reasonably be considered ambiguous as to

which bricks “are designated as [MACBs],” and by whom. See R.2d 18

Ex. 1 at 107–11. For example, the quote does not illuminate whether

a brick with 91% magnesia, 8% alumina, and 1% carbon can be

considered an MACB, or whether it would be called something else

outside of Asia. See id. at 108. Furthermore, even if Commerce de-

termined MACBs can contain “up to 50%” alumina as Fedmet insists

it should have, the Pocket Manual would not undermine the Final

Determination. The Pocket Manual simply does not identify any

physical characteristics or uses that distinguish low-alumina MACBs

like Fedmet’s Bastion bricks from MCBs. See id. at 107–11. Moreover,

several pieces of record evidence otherwise support Commerce’s find-

ing that there is substantial physical and functional overlap between

low-alumina MACBs like Fedmet’s Bastion brick and in-scope MCBs.

See Preliminary Determination Exs.1&2;ITC Final Determination

at I-9; R.2d 19 at Exs.3&5.

Lastly, Fedmet argues that Commerce improperly relied on state-

ments in the ITCs determination indicating that carbon — not alu-

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

mina — is the most important additive in preventing slag penetration

in bricks with greater than 70% magnesia. Pl.’s Br. at 46–47. Fedmet

insists that “the significance of spinel formation is that it promotes

permanent expansion of the bricks, which, in turn, reduces slag

penetration of the joints between the bricks.” Pl.’s Br. at 37. However,

Fedmet does not cite any record evidence that contravenes the ITC’s

conclusion that “[t]he carbon in MCBs” also “prevents liquid slag from

penetrating and eroding bricks.” ITC Final Determination at I-9; see

Pl.’s Br. at 46–47. Further, as the Millennium study noted, too much

alumina can cause cracks that lead to excessive slag penetration,

meaning that the relevance of Fedmet’s claims are limited by their

lack of chemical specificity. Preliminary Scope Ruling Ex. 1 at 100.

Put simply, the record shows that the low alumina content in an

MACB like Fedmet’s Bastion brick promotes the same physical char-

acteristics that set in-scope MCBs apart from other refractory prod-

ucts — slag resistance and low porosity. Id. ; ITC Final Determination

at I-9; R.2d 19 Ex. 3 at 176.

For the foregoing reasons, and on balance with Commerce’s analy-

sis of the remaining (k)(2) factors including the manner of advertise-

ment and ultimate use of low-alumina MACBs, Commerce’s interpre-

tation of the scope using the (k)(2) factors was reasonable. See

Preliminary Scope Ruling at 27–29; Final Scope Ruling at 8–10.

III. ITC Injury Determination

According to Fedmet, “[t]he antidumping statute provides that in

order to impose antidumping duties on imported merchandise, there

must be affirmative determinations by both Commerce and the ITC.”

Pl.’s Br. at 30 (citing 19 U.S.C. § 1673). Consequently, “the failure of

the ITC to have investigated or reached an affirmative determination

with respect to [MACBs] is itself sufficient grounds for holding that

the scope of the Orders does not cover [MACBs].” Id. Although there

is no controlling authority explicitly supporting Fedmet’s legal posi-

tion, see Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1075

n.3 (Fed. Cir. 2001) (declining to reach the question of whether the

exclusion of a product from the ITC investigation, by itself, could

establish that the product is not covered under the scope); Wheatland

Tube Co. v. United States, 161 F.3d 1365, 1371 (Fed. Cir. 1998) (stat-

ing in dicta that scope inconsistencies between the ITC’s investiga-

tion and Commerce’s investigation would “frustrate the purpose of

antidumping laws”), no party offers an alternative interpretation of

the Act. See Commerce Resp. at 23–26; ANH Resp. at 26; M&R Resp.

at 8–9. Commerce and defendant-intervenors argue instead that the

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

ITC did include an MACB in its injury determination. Commerce

Resp. at 23–26; ANH Resp. at 26; M&R Resp. at 8–9.

Even assuming that Fedmet’s interpretation of the law is correct,

see Wheatland Tube, 161 F.3d at 1371, Commerce’s determination

was not contrary to law. Because there is substantial evidence on the

record demonstrating that low-alumina MACBs are interchangeable

with in-scope MCBs, the question of whether or not the ITC consid-

ered an MACB is irrelevant. See Preliminary Determination Exs. 1 &

2; ITC Final Determination at I9; R.2d 19 at Exs.3&5.Even so, the

record indicates that the ITC did include a low-alumina MACB in its

injury determination. See Final Scope Ruling at 5. Specifically, as

Commerce explained in the Final Scope Ruling, “the ITC included

[Resco’s] Maxline 10 AFX trademarked product, an MCB with added

alumina, in its pricing analysis.” Id. at 5; see Pl.’s Br. at 24 (“MCBs do

not contain added alumina.”).

In its Reply brief, Fedmet argues that the Maxline 10 AFX brick is

not an MACB because the ITC record does not describe it as contain-

ing alumina and because Resco has not provided any evidence that

the Maxline brick promotes the formation of spinel. Pl.’s Reply at

16–18. However, Fedmet fails to address record evidence indicating

that any MCB with added alumina can be called an MACB. See R.4th

2 at 3–10 (discussing naming conventions); Preliminary Scope Ruling

at Ex. 2; R.2d 19 at Ex. 2. In the absence of a standard technical

definition for MACBs based on spinel formation that readily distin-

guishes Resco’s Maxline brick from other low-alumina MACBs, Com-

merce’s determination was justified and in accordance with the law.

See R.4th 2 at 3–10; Preliminary Scope Ruling at Ex. 2; R.2d 19 at Ex.

CONCLUSION

The record demonstrates a physical distinction between low-

alumina MACBs and high-alumina MACBs, imparting an ambiguity

into the phrase “MACB” in each (k)(1) source. Commerce therefore

acted reasonably in moving on to the (k)(2) factors to determine

whether Fedmet’s Bastion brick is covered under the scope of the

Orders. Although Fedmet is able to identify evidence showing that

low-alumina MACBs exhibit certain characteristics as a result of

spinel formation, it does not and cannot refute evidence demonstrat-

ing that these characteristics are the same as those that set in-scope

MCBs apart from other refractory products, namely, slag resistance

and low porosity. As there is substantial evidence in the record show-

ing that low-alumina MACBs like Fedmet’s Bastion brick meet the

scope’s plain language and are interchangeable with in-scope MCBs,

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Fedmet’s motion for judgment on the agency record must be denied.

Judgment will be entered accordingly.

Dated: May 30, 2013

New York, New York

/s/NICHOLAS TSOUCALAS

ICHOLAS TSOUCALAS

SENIOR JUDGE

◆

Slip Op. 13–69

INCE HARDWARE (GUANGZHOU)CO., LTD., Plaintiff, v. UNITED STATES,

Defendant.

Before: Leo M. Gordon, Judge

Consol. Court No. 11–00106

[Final results of administrative review sustained in part and remanded in part.]

Dated: May 30, 2013

William E. Perry and Emily Lawson, Dorsey & Whitney LLP of Seattle, Washington

for Plaintiff Since Hardware (Guangzhou) Co., Ltd.

Gregory S. Menegaz, J. Kevin Horgan, and John J. Kenkel, DeKieffer & Horgan of

Washington, DC for Plaintiff-Intervenor Foshan Shunde.

Carrie A. Dunsmore, Trial Attorney, Commercial Litigation Branch, Civil Division,

U.S. Department of Justice for Defendant United States. With her on the brief were

Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson,

Director, Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Thomas

M. Beline, Office of the Chief Counsel for Import Administration of Washington, DC.

Frederick L. Ikenson, Peggy A. Clarke, and Larry Hampel, Blank Rome LLP of

Washington, DC for Defendant-Intervenor Home Products International, Inc.

OPINION AND ORDER

Gordon, Judge:

This consolidated action involves the U.S. Department of Com-

merce’s (“Commerce”) fifth administrative review of the antidumping

duty order covering Floor-Standing, Metal-Top Ironing Tables from

China. See Floor-Standing, Metal-Top Ironing Tables and Certain

Parts Thereof from the People’s Republic of China, 76 Fed. Reg. 15,297

(Dep’t of Commerce Mar. 21, 2011) (final results admin. review), as

amended by 76 Fed. Reg. 23,543 (Dep’t of Commerce Apr. 27, 2011)

(amended final results admin. review) (collectively, “Final Results”);

see also Issues and Decision Memorandum for Ironing Tables from

China, A-570–888 (March 22, 2011), available at http://ia.ita.doc.gov/

frn/summary/PRC/2011–6558–1.pdf (last visited this date) (“Decision

Memorandum”). Before the court are the Final Results of Redetermi-

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

nation, ECF No. 85 (“Remand Results”) filed by Commerce pursuant

to Since Hardware (Guangzhou) Co. v. United States, Consol. Court

No. 11–106, ECF No. 81 (Aug. 14, 2012) (“Since Hardware”) (order

remanding to Commerce). The court has jurisdiction pursuant to

Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19

U.S.C. § 1516a(a)(2)(B)(iii) (2006),

and 28 U.S.C. § 1581(c) (2006).

Plaintiffs Since Hardware (Guangzhou) Co., Ltd. (“Since Hard-

ware”) and Foshan Shunde Yongjian Housewares & Hardwares Co.,

Ltd. (“Foshan Shunde”) both challenge Commerce’s financial state-

ment selection; Foshan Shunde challenges Commerce’s brokerage

and handling surrogate valuation; and Since Hardware challenges

Commerce’s cotton fabric surrogate valuation and labor wage rate

surrogate valuation.

See Since Hardware Comments to Remand

Results, ECF No. 90 (“SH Remand Br.”); Foshan Shunde Comments

to Remand Results, ECF No. 89 (“FS Remand Br.”). The court sus-

tains Commerce’s labor wage rate valuation and cotton fabric valua-

tion, but remands the issues of financial statements, and brokerage

and handling to Commerce for further consideration.

I. Standard of Review

When reviewing Commerce’s antidumping determinations under

19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), the U.S. Court

of International Trade sustains Commerce’s “determinations, find-

ings, or conclusions” unless they are “unsupported by substantial

evidence on the record, or otherwise not in accordance with law.” 19

U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing agency

determinations, findings, or conclusions for substantial evidence, the

court assesses whether the agency action is reasonable given the

record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345,

1350–51 (Fed. Cir. 2006). Substantial evidence has been described as

“such relevant evidence as a reasonable mind might accept as ad-

equate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S.

197, 229 (1938). Substantial evidence has also been described as

“something less than the weight of the evidence, and the possibility of

drawing two inconsistent conclusions from the evidence does not

prevent an administrative agency’s finding from being supported by

Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of

Title 19 of the U.S. Code, 2006 edition.

Since Hardware also attempted to challenge Commerce’s brokerage and handling (“B&H”)

valuation, but the court had to deem the issue waived for failure to adequately brief the

argument. Since Hardware at 7; see also Home Prods. Int’l, Inc. v. United States, No.

11–00104 (Jan. 3, 2012), ECF No. 62 (order waiving challenge to B&H calculation), as

amended, ECF No. 63; Home Prods Int’l, Inc. v. United States, 36 CIT ___, ___, 837 F. Supp.

2d 1294, 1300–1302 (2012); opinion after remand, Home Prods. Int’l, Inc. v. United States,

36 CIT ___, 853 F. Supp. 2d 1257 (2012).

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607,

620 (1966).Fundamentally, though, “substantial evidence” is best un-

derstood as a word formula connoting reasonableness review. 3

Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d.

ed. 2013). Therefore, when addressing a substantial evidence issue

raised by a party, the court analyzes whether the challenged agency

action “was reasonable given the circumstances presented by the

whole record.” Edward D. Re, Bernard J. Babb, and Susan M. Koplin,

8 West’s Fed. Forms, National Courts § 13342 (2d ed. 2013).

Separately, the two-step framework provided in Chevron, U.S.A.,

Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45 (1984),

governs judicial review of Commerce’s interpretation of the anti-

dumping statute. See United States v. Eurodif S.A., 555 U.S. 305, 316

(2009) (Commerce’s “interpretation governs in the absence of unam-

biguous statutory language to the contrary or unreasonable resolu-

tion of language that is ambiguous.”).

II. Discussion

A. Financial Statement Selection

Commerce’s selection of financial statements to calculate the finan-

cial ratios for respondents’ margins is an oft-litigated issue in non-

market economy antidumping cases. Commerce is guided by a gen-

eral regulatory preference for publicly available, non-proprietary

information. 19 C.F.R. § 351.408(c)(1), (4) (2009). Beyond that, Com-

merce generally considers the quality, specificity, and contemporane-

ity of the available financial statements. See Fresh Garlic from the

People’s Republic of China, 67 Fed. Reg. 72,139 (Dep’t of Commerce

Dec. 4, 2002) (final results new shipper review).

During the administrative review, Commerce had a choice from

among four Indian financial statements: ‘06-‘07 Infiniti Modules Pri-

vate Ltd. (“Infiniti Modules”); ‘08 ‘09 Omax Autos Ltd. (“Omax”); and

‘07-‘08 and ‘08-‘09 Maximaa Systems Ltd. (“Maximaa”). In the Final

Results Commerce chose the ‘06-‘07 Infiniti Modules’ financial state-

ments alone as the best available information from which to calculate

the financial ratios. Foshan Shunde and Since Hardware challenged

this decision, arguing that the statements were not publicly available

and that Omax’s and Maximaa’s financial statements represented the

best available information to calculate the financial ratios. Since

Hardware Mot. for J. upon the Agency R., ECF No. 43 (SH 56.2 Br.”);

Foshan Shunde Mot. for J. upon the Agency R., ECF No. 44 (FS 56.2

Br.”). In its initial consideration of the issue, the court agreed that

Commerce’s choice may not have been reasonable and remanded for

Commerce to “reconsider[] the issue of the public availability of the

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Infiniti Modules financial statement,...[and to] review and recon-

sider whether the more contemporaneous statements of Omax or

Maximaa might be useful additional data points, either in place of, or

in addition to, Infiniti Modules.” Since Hardware at 6. On remand

Commerce again solely selected the ‘06-‘07 Infiniti Modules’ financial

statements and found them to be publicly available. See Remand

Results at 7,15.

1. Public Availability

When first reviewing the issue of the public availability of the

‘06-‘07 Infiniti Modules’ financial statements, the court could not

sustain Commerce’s determination as reasonable. Since Hardware at

6. Although Commerce found that the statements were available

through the Indian Ministry of Corporate Affairs’ (“MCA”) website,

Decision Memorandum at 10, there was more than a “fair amount of

record information demonstrating that the Infiniti Modules financial

statements may not have been publicly available[,]” as evidenced by

Since Hardware and Foshan Shunde’s unsuccessful attempts to ob-

tain the financial statements or other Infiniti Modules’ financial in-

formation. Since Hardware at 4.

On remand Commerce acknowledges that it erred in the Final

Results when it concluded that the Infiniti Modules’ financial state-

ments were available through the MCA website; they are not. Re-

mand Results at 7. Commerce nevertheless clarifies that it still be-

lieves they are publicly available. Id. at 29. In the Remand Results

Commerce reasons that the Infiniti Modules’ financial statements are

publicly available because they were used in a prior administrative

review and available on the public administrative record of that

review are publicly available. Id. at 29. Commerce explains that

Commerce and all interested parties have significant experience with

Infiniti Modules as a surrogate company. Id. at 5–6. In each of the

four prior administrative reviews, Commerce calculated financial ra-

tios using a single year of Infiniti Modules’ financial statements. See

Floor-Standing, Metal-Top Ironing Tables and Certain Parts Thereof

from the People’s Republic of China, 72 Fed. Reg. 13,239 (Dep’t of

Commerce Mar. 21, 2007) (final results 1

admin. review) (selected

Infiniti Modules’ ‘04-‘05 statement); Floor-Standing, Metal-Top Iron-

ing Tables and Certain Parts Thereof from the People’s Republic of

China, 73 Fed. Reg. 14,437 (Dep’t of Commerce Mar. 18, 2008) (final

results 2

admin. review) (selected Infiniti Modules’ ‘04-‘05 state-

ment); Floor-Standing, Metal-Top Ironing Tables and Certain Parts

Thereof from the People’s Republic of China, 74 Fed. Reg. 11,085

(Dep’t of Commerce Mar. 16, 2009) (final results 3

admin. review)

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

(selected Infiniti Modules’ ‘06-‘07 statement); Floor-Standing, Metal-

Top Ironing Tables and Certain Parts Thereof from the People’s Re-

public of China, 75 Fed. Reg. 55,759 (Sept. 14, 2010) (prelim. results

admin. review) (selected Infiniti Modules’ ‘05-‘06 statement). In

prior administrative reviews both Since Hardware and Foshan

Shunde accepted Infiniti Modules’ financial statements as publicly

available and argued about the specific substantive application of the

financial statements:

Specifically, Infiniti Modules’ 2006–2007 financial statements

were obtained by Petitioner and placed on the record of the third

administrative review along with the 2005–2006 financial state-

ments of Infiniti Modules. [Commerce] used the 2006–2007 fi-

nancial statements of Infiniti Modules in the calculations set

forth in the final results of the third administrative review. More

importantly, Since Hardware acknowledged the existence of and

was given the opportunity to comment on both Infiniti Modules’

20052006 and Infiniti Modules’ 2006–2007 financial statements

in that review. Specifically, during that review, Since Hardware

asserted that regardless of whether [Commerce] selected the

2005–2006 financial statements of Infiniti Modules or the

2006–2007 financial statements of Infiniti Modules, [Commerce]

should make certain adjustments to the financial ratios derived

from those financial statements. Similarly, Foshan Shunde en-

gaged in argument over certain aspects of using Infiniti’s finan-

cial statements in the fourth administrative review, though it

did not dispute that the information was publicly available.

Remand Results at 5–6 (citations omitted). Noting that its regulatory

preference for publicly available information addresses “the concern

that a lack of transparency about the source of the data could lead to

proposed data sources that lack integrity or reliability,” Commerce

found that nothing had “transpired to undermine the integrity or

reliability” of the ‘06-‘07 Infiniti Modules’ financial statements. Id. at

This though is not really a determination of “public availability”

made against measurable objective criteria. It is instead a determi-

nation that the Infiniti Modules’ data remains among the best avail-

able information because of its reliability (notwithstanding that it

may not be publicly available). The court understands Commerce’s

desire to use information with which it is familiar from a surrogate

company that it knows well. It makes good, practical, efficient sense.

The ‘06-‘07 Infiniti Modules’ financial statements were apparently

obtained directly from the company by petitioner, Home Products

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

International, Inc. (“HPI”), in the third administrative review. The

public availability of that document was not challenged. Financial

statements from Infiniti Modules were also used in the fourth admin-

istrative review, and again the public availability of that data was not

challenged. In both instances respondents accepted the data and

made substantive arguments about its proper use. Commerce and the

interested parties have invested significant time and energy over the

course of the prior reviews vetting and refining the Infiniti Modules’

financial statements for use in the financial ratio calculations. The

court fully understands Commerce’s reluctance to abandon otherwise

reliable data on a technicality that it has become publicly unavailable

(or perhaps never was when measured against objective criteria).

The court, though, cannot sustain Commerce’s determination that

these financial statements are publicly available. In the Remand

Results Commerce cites to Catfish Farmers of Am. v. United States,33

CIT ___, ___, 641 F. Supp. 2d 1362, 1377 (2009), as an example of “the

standard for public availability established in our practice.” Remand

Results at 29. One searches Catfish Farmers in vain for an explana-

tion of the “standard for public availability established in [Com-

merce’s] practice.” Remand Results at 29. That explanation does not

appear in Catfish Farmers because it did not involve Commerce’s

administrative practice for determining public availability. Instead,

Catfish Farmers involved a challenge to Commerce’s use of a propri-

etary auditors’ report to supplement a publicly available financial

statement. Catfish Farmers, 33 CIT at ___, 641 F. Supp. 2d at 1377.

Unlike here, Commerce did not determine that the proprietary audi-

tors’ report was publicly available. Commerce, instead reasoned that

because everyone had fair and open access to it during the proceed-

ing, it was appropriate to supplement an otherwise publicly available

financial statement as among the best available information. Id. The

court, in turn, sustained as reasonable Commerce’s use of the non-

public, confidential, auditors’ report to supplement a publicly avail-

able financial statement. Id.

Further, Catfish Farmers does not identify or explain Commerce’s

standards or criteria for public availability. Instead, it more modestly

demonstrates that Commerce’s regulatory preference for public avail-

ability is not absolute, offering an instance in which Commerce’s use

of proprietary surrogate information was reasonable. Catfish Farm-

ers does not provide support for Commerce’s conclusion that the

Infiniti Modules’ financial statements are publicly available. Catfish

Farmers would instead appear to lend support for the conclusion that

although the ‘06-‘07 financial statements are no longer publicly avail-

able, they may still merit consideration as among the best available

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

information to calculate surrogate financial ratios because all parties

had full and fair access to otherwise reliable data.

As for the missing public availability criteria necessary to evaluate

Commerce’s decision here, Foshan Shunde directs the court to an-

other administrative proceeding, contemporaneous with the Remand

Results, where Commerce applied what appears to be fairly rigorous

standards for public availability. See Yantai Xinke Steel Structure Co.

v. United States, Court No. 10–00240, Final Results of Redetermina-

tion Pursuant to Court Remand, ECF No. 83 at 18–23 (“Steel Grating

Remand Results”); see also Certain Steel Grating from the People’s

Republic of China, 75 Fed. Reg. 32,366 (Dep’t of Commerce June 8,

2010) (final LTFV determ.). In that proceeding Commerce

sought clarification by issuing a supplemental questionnaire

....Inthis supplemental questionnaire, the Department re-

quested that Petitioners provide a detailed step-by-step expla-

nation of how they obtained Greatweld’s 2008–09 financial

statements, and that the steps provided should be of sufficient

detail so that any party would be able to replicate these steps to

acquire Greatweld’s 2008–09 financial statements. If such a

step-by-step explanation could not be provided, the Department

requested that Petitioners provide a detailed explanation of why

they could not provide such information. In addition, the De-

partment also asked Petitioners to provide a detailed explana-

tion as to the reason they believed Greatweld’s 2008–09 finan-

cial statements were properly described as publicly available

and, in providing their response, to indicate if Greatweld was

required under Indian law to publicly file its 2008–09 financial

statements with any governmental authority.

Steel Grating Remand Results at 19–20. Petitioners there provided

the step-by-step process of obtaining the “1) annual return; 2) balance

sheet; 3) schedules; 4) auditor’s report; 5) director’s report; and 6)

notice,” but did not provide the step-by-step process of receiving the

income statements. Commerce determined Greatweld’s financial

statements were not publicly available “[b]ecause the other inter-

ested parties to the proceeding, as well as the Department itself, do

not know the steps necessary to acquire Greatweld’s 2008–09 income

statement, and, therefore, could not acquire that data themselves

....”Id. at 22.

In contrast, Commerce here was satisfied that Infiniti Modules’

statements were publicly available because “Petitioner was able to

get them directly from the company simply by requesting them,”

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Remand Results at 7, even though respondents were apparently un-

successful with similar requests. Under the standards Commerce

enunciated in the Steel Grating Remand Results, respondents’ inabil-

ity to obtain the data from the same source and in the same manner

does seem to establish that Infiniti Modules’ statements are now

publicly unavailable. In the Remand Results Commerce casts a skep-

tical eye on respondents’ efforts to obtain the data from Infiniti Mod-

ules, noting that respondents never specifically requested the ‘06-‘07

data. Id. at 6–7. The court was somewhat surprised by this interpre-

tation of the record. Although it may be technically correct, the court

was under the impression that the record made clear that respon-

dents had made a good faith effort to obtain general financial infor-

mation from Infiniti Modules (including more contemporaneous fi-

nancial statements), but were completely rebuffed, which then

instigated their arguments about public availability.

The court will remand the issue of public availability for Commerce

to reconcile its approach here with the Steel Grating Remand Results,

as well as to reconsider its determination in light of the court’s

explanation of Catfish Farmers. Commerce’s determination that In-

finiti Modules financial statements are publicly available remains

unreasonable (unsupported by substantial evidence), and therefore

cannot be sustained.

2. Other Financial Statements

In Since Hardware the court also remanded for Commerce to “re-

view and reconsider whether the more contemporaneous statements

of Omax or Maximaa might be useful additional points, either in

place of, or in addition to, Infinit[i] Modules” and to “explain its

choices in this administrative review against the choices made in

Folding Metal Tables and Chairs ....”Since Hardware at 6. On

remand Commerce again selected the ’06-’07 Infiniti Modules’ finan-

cial statements. Since Hardware and Foshan Shunde argue that

Commerce’s selection was unreasonable and that it should have se-

lected Omax or Maximaa. As previously discussed, Infiniti Modules’

data has certain advantages. It has been used in every review under

the order, and Commerce and the parties know it well. The ‘06-‘07

Infiniti Modules’ financial statements, however, are less contempora-

neous than the other choices, and have this nagging problem with

public availability. The court, for its part, remains unconvinced that

Commerce’s sole selection of the ’06-’07 Infiniti Modules’ financial

statements alone is a reasonable choice on this administrative record.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

a. Maximaa

Compared to the ‘06-‘07 Infiniti Modules financial statements, the

‘07-‘08 Maximaa financial statements are more contemporaneous,

and the ‘08-‘09 Maximaa financial statements cover the exact period

of review. Unlike Infiniti Modules’ financial statements, Maximaa’s

public availability is not in dispute. Commerce, nevertheless, contin-

ues to reject Maximaa’s financial statements for the following rea-

sons:

We...dispute Foshan Shunde’s assertion that Maximaa’s fi-

nancial statements represent the best available information.

Foshan Shunde argues that the Department’s selection of Maxi-

maa’s financial statements in Folding Metal Tables and Chairs

undercuts the rejection of Maximaa’s 2007–2008 financial state-

ments in the instant proceeding. However, in the proceeding at

issue in this remand, the Department declined to use the

2008 and 2009 financial statements of Maximaa based on

record evidence that was submitted by interested parties

on the record of this case, not the record of the case

Foshan cites. The record evidence in this proceeding is sepa-

rate and distinct from the information that comprised the record

in Folding Metal Tables and Chairs and relates to a different

product. Necessarily, our comments about the nature of finan-

cial statements in that case were made in the context of com-

paring them to folding metal tables and chairs, not ironing

tables. In Folding Metal Tables and Chairs, we based our selec-

tion of Maximaa on the fact that, based on the evidence in

that proceeding, “a greater proportion of Maximaa’s pro-

duction appears to consist of comparable merchandise

(i.e., metal furniture),” and “because it has a similar pro-

duction process to that of the respondent.” The record in

this case does not support the same conclusions. Rather,

Maximaa’s business activities and production processes

do not resemble that of respondent in this case and with

respect to this product. . . .[T]he Department’s review of the

information submitted by Petitioner concerning Maximaa’s fi-

nancial statements indicated that Maximaa had increasingly

become an assembler rather than a manufacturer of the

merchandise. Thus, notwithstanding the conclusion

reached in Folding Tables and Chairs that Maximaa was

an integrated producer of steel furniture, we continue to

maintain that facts on the record in this case demonstrate that

the use of Maximaa’s financial statements inappropriate in this

proceeding.

Remand Results at 12–13 (citations omitted) (emphasis added).

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Commerce fails to reasonably distinguish its financial statement

selection here from its financial statement selection in Folding Metal

Tables and Chairs from the People’s Republic of China, 74 Fed. Reg.

68,568 (Dep’t of Commerce Dec. 28, 2009) (final results admin. re-

view) (“Folding Metal Tables and Chairs”); see also Issues and Deci-

sion Memorandum for Folding Metal Tables and Chairs from China,

A-570–868 (Dec. 18, 2009), available at http://ia.ita.doc.gov/frn/

summary/prc/E9–30695–1.pdf (last visited this date) (“FMTC Deci-

sion Memorandum”). Folding Metal Tables and Chairs involved mer-

chandise similar to metal ironing boards and a choice among similar

financial statements, Maximaa’s ‘07-‘08 and Infiniti Modules’ ‘06-‘07.

In that review, Commerce selected the Maximaa financial statement

because it found that Maximaa produced a greater proportion of

comparable merchandise--metal furniture--than Infiniti Modules,

and because Maximaa was an integrated producer while Infiniti was

an assembler. FMTC Decision Memorandum at 4–5.

Commerce distinguished Folding Metal Tables and Chairs by ex-

plaining that, in this review, Maximaa had “increasingly become an

assembler.” Remand Results at 13. Commerce rejected Maximaa’s

financial statement because of this critical finding. Id. However, In-

finiti Modules was “evermore a 100% assembler.” FS Remand Br. at

10. Therefore, the court does not understand the basis for rejecting

Maximaa’s financial statements because it was becoming an assem-

bler, while accepting the financial statements of Infiniti Modules, who

was an assembler. The simple fact is that both were assemblers.

Commerce’s distinction appears to be one without a difference, and is

accordingly unreasonable.

Turning to Commerce’s remaining criteria for selecting the best

available information, Maximaa remains more contemporaneous, has

more comparable metal merchandise, and its public availability is not

in dispute. On this administrative record, it is difficult to imagine a

reasonable mind concluding that Maximaa’s financial statement is

not at least as useful, if not better, than the Infiniti Modules data.

Further, Commerce has a “preference...tousemore than one

financial statement where more than one representative financial

statement is available.” Remand Results at 14. The court, therefore,

remands this issue to Commerce to reconsider its financial statement

selection.

b. Omax

Since Hardware and Foshan Shunde argue that Commerce also

unreasonably excluded the ‘08-‘09 Omax financial statements. In

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

selecting financial statements, Commerce is driven by a statutory

preference for selecting financial statements from producers of com-

parable merchandise. 19 U.S.C. § 1677b(c)(4)(B); see also 19 C.F.R. §

351.408(c)(4) (“For manufacturing overhead, general expenses, and

profit, the Secretary normally will use non-proprietary information

gathered from producers of identical or comparable merchandise in

the surrogate country.”). In the final results Commerce declined to

use Omax’s financial statements because it determined that Omax

was primarily an auto producer and therefore not an appropriate

surrogate. Final Results; see Decision Memorandum at 10–11. Re-

spondents challenged Commerce’s findings and argued that they had

supplied evidence of Omax’s production of home furnishings. The

court, therefore, directed Commerce to address the evidence of Omax

as a manufacturer and supplier of ironing tables. Since Hardware at

On remand, Commerce determined that Omax was not a producer

of ironing tables:

[T]here is no record evidence that suggests Omax sold ironing

tables to either Ikea or Polder during either the POR or the

period covered by Omax’s 2008–2009 annual report. We thus

conclude that while Omax may have been in a position to supply

ironing tables to Polder subsequent to the end of the POR, there

is insufficient evidence to conclude that Omax was a producer of

ironing tables during the POR.

Remand Results at 12. This finding is unreasonable on an adminis-

trative record in which the Omax ‘08-‘09 financial statements actu-

ally contain a picture of an ironing table. Id. at 31. Although Com-

merce tries to explain the picture away, id. at 31, the court is not

persuaded that a company not producing ironing tables would include

a picture of an ironing table in its financial statements as a repre-

sentative product. Additionally, Polder, Inc., a company that imported

ironing tables from Omax, stated in a letter that Omax “has supplied

global behemoth Ikea with ironing tables and other steel housewares

for the last two years.” Since Hardware SV Submission, PD 98, App.

1 at 1–2 (emphasis added).

Because Polder’s letter was dated, Octo-

ber 15, 2010, the “last two years” references October 2008 through

October 2010. Id. This period overlaps this 2008–2009 administrative

review. Therefore, Commerce unreasonably concluded that “there is

no record evidence that suggests Omax sold ironing tables to either

Ikea or Polder during the POR or the period covered by Omax’s

2008–2009 annual report.” Remand Results at 12.

“PD” refers to a document in the public administrative record.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

This error though is ultimately harmless because Commerce’s over-

all decision to exclude the Omax financial statements remains rea-

sonable. The administrative record supports Commerce’s determina-

tion that Omax is not a suitable surrogate because it is primarily an

auto producer:

. . . [T]he record in this case establishes that during the period

of review (POR), Omax’s principle business comprised automo-

tive products. Ironing tables constituted, at most, a very small

portion of Omax’s business during Omax’s 2008–2009 financial

reporting period.

As a fundamental matter, Omax’s 2008–2009 annual report

establishes that during the 2008–2009 fiscal reporting period,

Omax was principally a manufacturer of automobile parts.

First, we note that Omax’s official name is “Omax Autos Lim-

ited.” More importantly, we note that at page 13 of its financial

statements, Omax lists 29 of its customers. Of those 29 cus-

tomers, only one customer (Ikea) seems to be involved in the

business that Omax describes as “home furnishings.” The rest of

the customers listed by Omax in that section of the report

appear to be involved in the automotive business based upon a

simple examination of the company names. The importance of

the automotive business to Omax is further highlighted in the

account from Jatender Mehta, the Managing Director of Omax,

which can be found in Omax’s 2008–2009 annual report....In

that account, Mr. Mehta discusses Omax’s financial perfor-

mance during the fiscal year. In discussing the challenges that

Omax faced during the 2008–2009 fiscal reporting period, Mr.

Mehta cites to a decline from “World Giants like GM,

Chrysler and Ford.” Mr. Mahta [sic] also notes a downturn

that was experienced by Toyota. While Mr. Mehta indicates

elsewhere in this account that Omax intends to expand the

company’s “product profile to Home Furnishings, Commercial

Vehicles and the Indian Railway,” Mr. Mehta merely indicates

that “[I]nvestments for creating manufacturing facilities have

been earmarked.” However, Omax’s “foray” into the home fur-

nishings business, is primarily described as a business segment

from which Omax expects to derive future, rather than current,

business. Mr. Mehta discusses no specific sales volume for

“home furnishings” during the POR. Additionally, Mr. Mehta

indicates that;

. . . the company has made a foray into the Home Furnish-

ings segment. The strategy has been to tie up with the

biggest international brand—Ikea. This would include the

desired level of quality, delivery and cost awareness within

the Company. The company has started exports of various

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

items under the division. We are putting up a new 10 Acre

plant facility at Bawai Haryana. This plant will be opera-

tional in the 3

quarter of FY 09–10.

From our review of the customers identified by Omax, in its

20082009 Annual Report, and the account of Omax’s business

that is set forth by Mr. Mehta, we continue to conclude that

Omax’s primary business during the period captured by

its 2008–2009 financial statements was the production of

automotive products.

***

Because automotive products are less similar to ironing tables

than is furniture, we conclude that data from Infiniti Modules

represents a higher quality of data within the meaning of sec-

tion 773(c)(l) of the Act.

Id. at 10–12 (emphasis added). Commerce, therefore, determined

Omax was primarily an auto producer based on its name, customers,

and the statements of its Managing Director.

The name of the company, Omax Autos Limited, pretty much says

it all. It communicates that the company is primarily involved in the

automotive business. Similarly, all but one of Omax’s 29 customers is

in the automotive business. Admittedly, that one customer in the

home furnishings business is the “global behemoth” Ikea. Since Hard-

ware SV Submission, PD 98 at App. 1. And although that does count

for something, a reasonable mind could conclude on this administra-

tive record that Omax concentrates the bulk of its operations on the

automotive sector and is therefore not a suitable surrogate for the

general financial ratio calculations of a metal ironing board manu-

facturer. Accordingly, the court must sustain Commerce’s decision to

exclude the Omax financial statements.

B. Brokerage and Handling

In the final results Commerce determined the World Bank’s Doing

Business 2010: India is “the best available source for valuing Foshan

Shunde’s brokerage and handling expenses.” Final Results ; see De-

cision Memorandum at cmt. 3. Commerce used the World Bank data

to calculate Foshan Shunde and Since Hardware’s brokerage and

handling (“B&H”) expenses based on their respective container sizes.

Id. Foshan Shunde challenged Commerce’s reliance on the World

Bank data and the specific B&H calculations. Commerce requested a

voluntary remand to correct Foshan Shunde’s container weight and

to address Foshan Shunde’s requested letter of credit deduction. The

court granted Commerce’s voluntary request for remand and further

remanded the issue for Commerce to (1) prepare a clear and complete

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

public summary of its calculations of Foshan Shunde’s B&H expense;

(2) explain why its chosen surrogate data source and calculation is

reasonably the best choice by comparing the advantages and disad-

vantages of each; and (3) respond to Foshan Shunde’s arguments with

respect to Commerce adjusting Foshan Shunde’s actual shipped

weight and actual shipping mode. Since Hardware at 8–9.

On remand Commerce affirmed its selection of the World Bank data

and its B&H calculation. Remand Results at 15–22, Attach. 1. Com-

merce also detailed the mechanics of its calculation for public sum-

mary:

This details [Commerce’s] calculation of brokerage and handling

expense. In Doing Business India, total brokerage and handling

expenses are listed as follows: [See Doing Business in India -

Doing Business - The World Bank Group (Doing Business

India—2010) at 37 and 84; see also HPI November 15, 2010 Case

Brief at 17–18.]

1) Document Preparation: $350

2) Customs Clearance and technical control $120

3) Ports and Terminal Handling $175

Total charges $645

Moreover, as noted in the Doing Business India—2010 study, the

container size assumed in the study is for a 20 foot full container

load. However, both Since Hardware and Foshan Shunde

shipped in 40 foot containers. Therefore, using the formulae set

forth, we estimated the shipment weight that would be incurred

in a 20 foot container as follows: [This calculation is also ex-

plained at HPI November 15, 2010 Case Brief at 17–18.]

D= (A*B)/C

E= $645/D

A represents the cubic capacity of a 20 foot container which is 33

cubic meters

B represents the weight of product shipped in 40 foot containers

which is{}kgofproduct

C represents the cubic capacity of a 40 foot container (the size in

which both respondents shipped merchandise) which is 67.3.

D represents the estimated weight of product shipped in 20 foot

containers

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

E represents the calculated, per kilogram amount for brokerage

and handling.

In this case D yields an estimated weight of { } kilograms for

product shipped in a 20 foot container

D= 33*{ }/67.3= { }.

Therefore, to derive the { } per unit brokerage and handling

amount utilized in the Final Results, we divided the total bro-

kerage and handling amount of $645 by the { } estimated weight

of product shipped in 20 foot containers.

E=$645/{ }={ }

Public Summary of Calculation

This calculation can also be illustrated publicly through the use

of hypothetical numbers. In this hypothetical example, we con-

tinue to allocate the total pool of brokerage and handling ex-

penses ($645) from the Doing Business India—2010 study. We

assume that this respondent shipped in a 40 foot container. We,

thus adjust the calculated shipment weight for this hypothetical

respondent to adjust for shipments in a 20 foot container instead

of in a 40 foot container. We also continue to assume the same

cubic capacity for both the 20 foot and 40 foot containers that we

utilized in the Final Results of this review.

In our hypothetical example, we assume that the respondent

shipped 5000 kg of product in a 40 foot container. In such an

instance

A (the cubic capacity of a 20 foot container) would continue to

equal 33 cubic meters.

B (the weight of product shipped in 40 foot container) would

equal 5000 kilograms.

C (the cubic capacity of a 40 foot container) would continue to

equal 67.3 cubic meters.

D represents the estimated weight of product shipped in 20 foot

container which would be

D= 33*5000/67.3= 2,451.71

E represents the calculated, per kilogram amount for brokerage

and handling which would equal $0.2631 or

E= $645/2451.71=.2631

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Remand Results at Attach. 1. Commerce further explained:

[W]e have determined that brokerage and handling expenses

were properly calculated in the Final Results for the following

reasons. The Department’s practice when selecting the best

available information for valuing FOPs, in accordance with sec-

tion 773(c)(1) of the Act, is to select surrogate values which are

product-specific, representative of a broad-market average, pub-

licly available, contemporaneous with the POR, and free of taxes

and duties. The Doing Business 2010: India data from the World

Bank reflect the experience of a broad number of companies, are

publicly available, specific to the costs in question, represent a

broad market average, and are contemporaneous to the POR.

***

[T]he Department has utilized such World Bank data in a

number of cases including Wooden Bedroom Furniture from the

People’s Republic of China, Stainless Steel Sinks from China,

and Wooden Bedroom Furniture from the People‘s Republic of

China, consistently finding the World Bank data to be a reliable

and accurate source of surrogate value information. World Bank

data represent a reputable source of information for valuing

brokerage and handling because those data are prepared by an

independent organization and are based upon a survey derived

from a broad number of producers. In contrast, the import data

offered by Foshan Shunde were limited to two freight forward-

ers (Samsora[sic] and Hapang[sic] Lloyd). While Foshan Shunde

has argued that the import data of Samsora and Hapang[sic]

Lloyd also relate somehow to exports, the facts on the record

of this proceeding do not substantiate the quantification

of any such export experience. As previously noted, the

business of exporting is fundamentally different than the busi-

ness of importing and the data from these activities cannot be

considered interchangeable.

Further, the data provided by Foshan Shunde to link broker-

age and handling expenses to Foshan Shunde’s specific business

situation fail to substantiate its claims with regard to the ex-

penses associated with the preparation of letters of credit. As

Petitioner has demonstrated, the World Bank data upon which

the Department relied constituted $350 and are comprised of

eight items: 1) bill of lading, 2) certificate of origin, 3) commer-

cial invoice, 4) custom’s export declaration, 5) inspection report,

6) packing list, 7) technical standard/health certificate, and 8)

terminal handling receipts. Nowhere in this schedule of eight

items are letter of credit expenses mentioned. More to the point,

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

...Foshan Shunde has claimed a constructed letter of

credit cost of $390 which exceeds the total amount of

brokerage and handling expenses calculated by the

World Bank. Applying the $390 letter of credit expense, to

the $350 of charges set forth in the Doing Business report

would thus result in the nonsensical calculation of a

negative expense amount for Foshan Shunde’s brokerage

and handling expenses. ....

Foshan Shunde’s fails to substantiate its assertions that as a

“rational producer” it would never incur expenses as high as

those enumerated in the Doing Business report or that distance

from seaport is a determining factor in brokerage and handling

expenses. As Petitioner has noted, because “inland transpor-

tation and handling” are calculated elsewhere in NV cal-

culations, distance from a seaport is an irrelevant factor

for purposes of calculating brokerage and handling ex-

penses. These expenses are by definition incurred at the

port of export.

***

...While Foshan Shunde asserts that exporters close to a

seaport incur lower brokerage and handling costs than

do inland manufacturers, there is no evidence on the

record that permits the Department to quantify that sug-

gested difference. Similarly, there is no information on the

record of this proceeding that would permit the Department to

tailor any publicly-available surrogate value data to the specific

business situation experienced by Foshan Shunde or to remove

elements of brokerage and handling expense which Foshan

Shunde claims not to have incurred....Foshan Shunde’s claim

that it does not incur letter of credit expenses invites an inquiry

that is beyond the scope of the issue here. The relevant question

is whether the World Bank data are a reliable source for general

brokerage and handling expenses, not whether the World Bank

report reflects Foshan Shunde’s line-by-line experience....

Without knowing the exact breakdown of the data in-

cluded in the World Bank report, the Department can no

more deduct a letter of credit expense than add extra

expenses which Foshan Shunde incurred but are not re-

flected by the World Bank data. In other words, the averaged

data in the World Bank report is a reasonable surrogate value

because a line-by-line analysis is simply not possible.....

Foshan Shunde has also challenged the Department’s adjust-

ment from the 40 foot container size in which it shipped to the 20

foot container sizes that are reflected in the Doing Business

2010: India data. This issue was also reviewed by the Court in

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Dongguan Sunrise. . . . In sustaining the Department’s conver-

sion from a 40 foot to a 20 foot container size, the Court rejected

Fairmont’s argument indicating:

This argument fails because Fairmont has not presented

evidence that brokerage costs are based on value, not vol-

ume, and do not increase proportionately with the number of

cubic feet.

The methodology employed in this review is consistent with

that employed in Dongguan Sunrise. Foshan Shunde has failed

to demonstrate which, if any, of the costs included within the

Doing Business 2010: India data do not increase proportionately

with volume. Accordingly,...wecontinue to maintain that our

adjustment for container size is supported by record evidence in

this proceeding.

Remand Results at 17–21, 38–40 (citations omitted) (emphasis

added).

Foshan Shunde first argues that Commerce’s B&H calculations are

unreasonable because Commerce should not have relied on the World

Bank data but should have instead used the data from Indian freight

forwarders: Samsara and Hapag-Lloyd. FS Remand Br. at 11–20.

Foshan Shunde challenges the World Bank data as not reflecting the

experience of any Indian producers at all, but being based on a survey

completed by “[l]ocal freight forwarders, shipping lines, customs bro-

kers, port officials, and banks.” Id. at 13 (citing Foshan Shunde SV

Submission for Final Results, PD 96 at Ex. 6). Foshan Shunde adds

that Commerce is generally reluctant to use the results of a survey as

source documentation when “none of the actual responses or data

collected from these questionnaires were provided in the report” and

that therefore, Commerce “had no way to evaluate whether the in-

formation collected in the questionnaire responses was complete or

properly analyzed, much less whether the responses can be consid-

ered representative....”Id. at 13 (quoting Fresh Garlic from China,

77 Fed. Reg. 34,346 (Dep’t of Commerce June 11, 2012) (final results

admin. review)). The court disagrees.

Commerce explained that its practice when selecting the best avail-

able information for valuing factors of production, in accordance with

19 U.S.C. § 1677b(c)(1), is to “select surrogate values which are

product-specific, representative of a broad-market average, publicly

available, contemporaneous...andfree of taxes and duties.” Remand

Results at 17–18 (citing Certain Polyester Staple Fiber from the Peo-

ple’s Republic of China, 75 Fed. Reg. 1336 (Dep’t of Commerce Jan. 11,

2010) (final results admin. review). Accordingly, Commerce calculated

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Foshan Shunde’s B&H costs using the World Bank’s Doing Business

2010: India which “reflect[s] the experience of a broad number of

companies, [is] publicly available, specific to the costs in question,

represent a broad market average, and are contemporaneous.” Re-

mand Results at 17–18. In contrast, Foshan Shunde’s data are lim-

ited to two sources, Samsara and Hapag-Lloyd. Commerce explained

that while the World Bank data largely satisfy Commerce’s surrogate

value criteria, Foshan Shunde’s two sources are deficient in several

respects. See id. at 18–19. First, they fail to represent a broad market

average because they are from only two companies. Id. at 18. Second,

the experience of two freight forwarders is not specific to the expenses

in question because the expenses reported in these data sources

represent import expenses—not export expenses. Id. at 19 (“[T]here is

no documentation on the record of this proceeding to suggest that the

costs for importing merchandise parallel the costs that are related to

exporting merchandise.”). Commerce further explained that “the

business of exporting is fundamentally different than the business of

importing and the data from these activities cannot be considered

interchangeable.” Id. at 39. In response, Foshan Shunde contends

that Commerce’s finding “is simply incorrect” and that it submitted

“prices for all port activities – for both importers and exporters.” FS

Remand Br. at 16. However, the Samsara and Hapag-Lloyd data that

Foshan Shunde submitted are both labeled as import data. See Fos-

han Shunde SV Submission for Prelim. Results, PD 77 at Ex. 2.

Further, when arguing that it submitted export data, Foshan Shunde

cites to its submission of the Indian port schedules, Foshan Shunde

SV Submission for Prelim. Results, PD 77 Ex. 1, and not the Samsara

and Hapag-Lloyd data, Foshan Shunde SV Submission for Prelim.

Results, PD 77 Ex. 2. Therefore, Commerce reasonably concluded

that the Samsara and Hapag-Lloyd data reflect only import data. See

Foshan Shunde SV Submission for Prelim. Results, PD 77 at Ex. 2.

Additionally, although Foshan Shunde claims that consistent with

Commerce practice, Commerce “must reject the World Bank Doing

Business Report as unrepresentative, unreliable, and unverifiable,”

FS Remand Br. at 13, Commerce reasonably found the World Bank

data to be a “reliable and accurate source.” Remand Results at 38.

Commerce explained that the “World Bank data represent a repu-

table source of information for valuing brokerage and handling be-

cause those data are prepared by an independent organization and

are based upon a survey derived from a broad number of producers.”

Id. at 38–39. Commerce has also previously relied on the World Bank

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

data to calculate surrogate B&H values. See e.g., Wooden Bedroom

Furniture from the People’s Republic of China, 76 Fed. Reg. 9,747

(Dep’t of Commerce Feb. 22, 2011) (new shipper review final results);

Drawn Stainless Steel Sinks from the People’s Republic of China,78

Fed. Reg. 13,019 (Dep’t of Commerce Feb. 26, 2013) (final results

admin. review); Wooden Bedroom Furniture from the People’s Repub-

lic of China, 75 Fed. Reg. 50,992 (Dep’t of Commerce Aug. 18, 2010)

(final results admin. review); see also Dongguan Sunrise Furniture

Co. v. United States, 36 CIT ___, ___, 865 F. Supp. 2d 1216, 1246

(2012) (affirming Commerce’s reliance on the World Bank data and

noting that “Commerce has consistently found the World Bank to be

a reliable source for data”). Therefore, Commerce reasonably relied

on the World Bank data.

Foshan Shunde next argues that Commerce should have altered

the World Bank data to reflect Foshan Shunde’s actual expenses. FS

Remand Br. at 12. First, Foshan Shunde argues that Commerce

should remove a specific expense from the aggregate data, specifi-

cally, the expense for preparing a letter of credit. Id. at 17. Foshan

Shunde contends that because it did not incur a letter of credit

expense, Commerce should adjust the B&H by deducting amounts for

letter of credit expenses. Id. at 17. Foshan Shunde explains that “the

World Bank data includes costs for procuring an export letter of

credit,” id. at 17, and that “the L/C costs are embedded in the “docu-

ments required to export and import” and greatly inflate the docu-

ment preparation costs.” FS 56.2 Br. at Ex. 1, 31. Foshan Shunde lists

the price of an export letter of credit as $390. FS Remand Br. at 17

(citing FS’ Br. 56.2 at 26). Commerce, however, responds that it will

not adjust the B&H because the listed items composing the B&H do

not include a letter of credit expense. Remand Results at 39 (“No-

where in this schedule of eight items are letter of credit expenses

mentioned.”). Moreover, Defendant argues that Foshan Shunde’s

$390 letter of credit cost “exceeds [$350,] the total amount of [the

document preparation costs of the] brokerage and handling expenses

calculated by the World Bank. Applying the $390 letter of credit

expense, to the $350...charges...would result in the nonsensical

calculation of a negative expense.” Id. at 39 (citations omitted) (origi-

nal emphasis).

The B&H costs from the Word Bank data are composed of three

categories of expenses: (1) document preparation; (2) customs clear-

ance and technical control; and (3) ports and terminal handling. Id. at

Attach. 1. The document preparation fee is composed of eight items:

(1) bill of lading; (2) certificate of origin; (3) commercial invoice; (4)

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

custom’s export declaration; (5) inspection report; (6) packing list; (7)

technical standard/health certificate; and (8) terminal handling re-

ceipts. Id. at 39. Letters of credit are not included in the eight listed

expenses for document preparation. Even if the letter of credit ex-

penses are embedded, as Foshan Shunde argues, the court agrees

that, “without knowing the exact breakdown of the data included in

the World Bank Report, [Commerce] can no more deduct a letter of

credit expense than add extra expenses which Foshan Shunde in-

curred but are not reflected by the World Bank data.” Id. at 19–20.

Therefore, Commerce’s refusal to adjust the B&H costs for possible

letter of credit expenses was reasonable.

Next, Foshan Shunde argues that Commerce should have adjusted

its B&H calculations to reflect Foshan Shunde’s proximity to China’s

seaports. Foshan Shunde argues that “proximity to a major seaport is

a key factor in the World Bank’s determination of the cost of trading

across borders in India” and that companies near ports bear lower

B&H expenses. FS 56.2 Br. at Ex. 1, 28; FS Remand Br. at 16.

Commerce responds that “because ‘inland transportation and han-

dling’ are calculated elsewhere in NV calculations, distance from a

seaport is an irrelevant factor for purposes of calculating brokerage

and handling expenses. These expenses are by definition incurred at

the port of export.” Remand Results at 40. Commerce further adds

that “[w]hile Foshan Shunde asserts that exporters close to a seaport

incur lower brokerage and handling costs than do inland manufac-

turers, there is no evidence on the record that permits [Commerce] to

quantify that suggested difference.” Id. at 19. The court does not

believe this conclusion is reasonable on this administrative record.

Foshan Shunde placed on the administrative record the World

Bank’s Doing Business Subnational Report that includes the specific

B&H costs for Indian seaports: Chennai, Kochi, Kolkata, and Mum-

bai. Foshan Shunde SV Submission for Final Results, PD 96 at Ex. 4.

The data that Commerce relied on, the World Bank’s Doing Business

in India: 2010, is composed of the B&H costs of 17 Indian

cities/regions including the four above mentioned port cities. Id. at

Ex. 3–4. Four of the 17 cities are seaports, and the remaining 13 are

inland. Id. at Ex. 4. The Doing Business Subnational Report contains

the following categories of expenses for each seaport: (1) document

preparation; (2) customs clearance and technical control; (3) ports

and terminal handling; and (4) inland transportation and handling.

Id. Commerce explained that it did not include inland transportation

and handling in its B&H calculations. Remand Results at 40. Com-

merce instead calculated B&H from the other three categories of

costs: (1) document preparation; (2) customs clearance and technical

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

control; and (3) ports and terminal handling. Id. at Attach. 1. There-

fore, in arguing the proper B&H calculation for each seaport, Foshan

Shunde also omitted inland transportation and handling costs from

the Business Subnational Report data. FS 56.2 Br. at 28. The Busi-

ness Subnational Report, excluding inland transportation and han-

dling fees, provides the following B&H costs for the four seaports:

Chennai: $439; Kochi: $375; Kolkata: $462; and Mumbai $645. Fos-

han Shunde SV Submission for Final Results, PD 96 at Ex. 4.; see also

id. The average B&H costs for the four seaports are $480. In contrast,

based on the aggregate data of all 17 cities, Commerce calculated

$645 in B&H costs. Remand Results at Attach. 1. Therefore, even

excluding inland transportation costs, there is a $165 difference be-

tween the combined data for all 17 Indian cities and the data from the

seaports. This evidence directly contradicts Commerce’s conclusion

that “distance from a seaport is an irrelevant factor” and that there is

no evidence to “quantify that suggested difference.” Id. at 19, 40.

Further, the court agrees with Foshan Shunde that Commerce “of-

fered no explanation why the World Bank report including export

costs from 17 Indian cities, most of which lie far inland, was a more

appropriate data set than the regional reports of four Indian cities

geographically located near major ports, when Foshan Shunde itself

is located near major Chinese ports.” FS 56.2 Br. at 26. Commerce’s

determination appears unreasonable. The court must therefore re-

mand this issue to Commerce to consider the World Bank data from

the seaports or to provide a reasonable explanation as to why that is

not appropriate.

Finally, Foshan Shunde argues that Commerce’s adjustment of the

World Bank data from 20-foot to 40-foot containers is unreasonable

because B&H costs do not increase proportionally from 20-foot to

40-foot containers. FS Remand Br. at 19–20. Foshan Shunde con-

tends that the per-kilogram B&H costs of a 40-foot container is lower

than that of a 20-foot container. Id. Commerce calculated the B&H

costs by first determining the per-kilogram B&H costs of a 20-foot

container, and then applied that value to the weight of a 40-foot

container. This type of calculation assumes that B&H costs increase

proportionally from 20-foot to 40-foot containers. From this calcula-

tion, Commerce determined B&H costs to be $645. Remand Results at

Attach. 1. Defendant and HPI respond to Foshan Shunde’s argument,

explaining that Commerce “merely converted the data, such that the

World Bank data would reflect the ways in which Foshan Shunde

actually ships its goods” and that, “Commerce made a straightfor-

ward mathematical adjustment from the 40-foot container size in

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

which it shipped to the 20-foot container size that are reflected in the

World Bank data.” Defendant’s Resp. to Plaintiffs’ Comm. Concerning

Remand Results, ECF No. 100 at 19–20 (“Def. Remand Br.”); see also

Reply of HPI to Comm. Concerning Remand Results, ECF No. 101 at

19 (“HPI Remand Br.”). Defendant also argues that this same issue

was addressed in Dongguan Sunrise v. United States, 36 CIT ___, ___,

865 F. Supp. 2d 1216, 1247 (2012), in which the court held Com-

merce’s conversion from a 20-foot to a 40-foot container reasonable.

Def. Remand Br. at 20. HPI also relies on Utility Scale Wind Towers

from the People’s Republic of China, 77 Fed. Reg. 75,992 (Dep’t of

Commerce Dec. 26, 2012) (final determ.), in arguing that total B&H

costs increase proportionally with container capacity. HPI Remand

Br. at 19. On remand, Commerce explained that “Foshan Shunde has

failed to demonstrate which, if any, of the costs included within the

Doing Business 2010: India data do not increase proportionately with

[container size].” Remand Results at 21. Defendant and HPI, there-

fore, argue that Commerce’s conversion of the data was reasonable

(supported by substantial evidence).

In Dongguan Sunrise the court sustained Commerce’s adjustment

of the World Bank data from a 20-foot to a 40-foot container “because

[Respondent] ha[d] not presented evidence that brokerage costs are

based on value, not volume, and do not increase proportionally with

the number of cubic feet.” Dongguan Sunrise, 36 CIT at ___, 865 F.

Supp. 2d at 1247. Similarly, in Utility Scale Wind Towers from the

People’s Republic of China, Commerce stated, “absent record evidence

to the contrary, total brokerage and handling costs increase propor-

tionally with a container’s capacity and, therefore, per-unit brokerage

and handling rates do not change as a container’s capacity increases.”

Utility Scale Wind Towers from the People’s Republic of China,77

Fed. Reg. 75,992, 75,997 (Dep’t of Commerce Dec. 26, 2012) (final

determ.) (emphasis added). If B&H costs increased proportionally

from 20-foot to 40-foot containers, as Commerce calculated, then

there would be a 100% increase in B&H costs from a 20-foot to a

40-foot container. Foshan Shunde, however, points to evidence in the

record that shows only a 30–50% increase in costs from 20-foot to

40-foot containers. Foshan Shunde SV Submission for Prelim., PD 77,

Ex. 1 at 3–6, 14–16, 37, 64–65, Ex. 2; see also FS 56.2 Br. at 33.

Therefore, Foshan Shunde has demonstrated that B&H costs do not

increase proportionally from 20-foot to 40-foot containers. Accord-

ingly, Commerce unreasonably concluded that, “Foshan Shunde has

failed to demonstrate, which if any, of the costs...donotincrease

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

proportionately with volume.” Remand Results at 21. The court re-

mands this issue to Commerce to consider Foshan Shunde’s evidence

regarding B&H costs in 20-foot versus 40-foot containers.

C. Cotton Fabric Surrogate Valuation

In Since Hardware the court granted Commerce’s voluntary re-

mand request to reconsider Since Hardware’s cotton fabric weight

and recalculate the conversion factor. Since Hardware at 2. On re-

mand, Commerce changed the conversion factor from 5.0 to 7.5 and

explained:

Since Hardware has demonstrated that the weight of its cotton

fabric was between 100 grams and 200 grams per square meter.

The precise conversion factor for Since Hardware’s cotton inputs

would therefore range between 5 and 10. Therefore, based upon

the information on record, the Department has based its deter-

mination on a reasonable inference that the conversion factor is

7.5.

Remand Redetermination at 23. In challenging the cotton fabric con-

version factor, Since Hardware presents a hollow argument. Since

Hardware’s entire argument consists of the following: “[t]his Court

should find that Commerce should use the record information verified

for Since Hardware and apply the 5.49 conversion factor instead of

the 7.5 as it is more specific to Since Hardware Draft Remand Com-

ments at 2–6[sic].” SH Br. at 20. Missing is any effort to develop an

argument as to how the 5.49 conversion factor is “more specific to

Since Hardware” and to identify standards against which the court

can evaluate the reasonableness of Commerce’s cotton fabric valua-

tion. Id. Since Hardware’s “argument” is all the more difficult to

countenance because the Scheduling Order specifically cautioned

against just such a submission:

Please be advised that the court will not permit the plaintiff to

shift to the court and the other parties the burden of establish-

ing the ossature of plaintiff’s arguments against the standard of

review the court applies to resolve them. Instead, the court will

summarily sustain Commerce’s action.

Scheduling Order at 5, ECF No. 36. Rule 56.2(c)(2) requires that

briefs “must include the authorities relied on and the conclusions of

law deemed warranted by the authorities.” USCIT R. 56.2(c)(2). As

Since Hardware has failed to satisfy this basic requirement, and

abide by the express instructions of the Scheduling Order, the court

deems this issue waived and sustains Commerce’s cotton fabric sur-

rogate valuation. See MTZ Polyfilms, Ltd. v. United States, 33 CIT

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

___, ___, 659 F. Supp. 2d 1303, 130809 (2009); Fujian Lianfu Forestry

Co. v. United States, 33 CIT ___, ___, 638 F. Supp. 2d 1325, 1350

(2009); United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (“[I]s-

sues adverted to in a perfunctory manner, unaccompanied by some

effort at developed argumentation, are deemed waived. It is not

enough merely to mention a possible argument in the most skeletal

way, leaving the court to do counsel’s work, create the ossature for the

argument, and put flesh on its bones.”) (citations omitted).

D. Labor Wage Rate Surrogate Valuation

In the final results Commerce calculated the surrogate labor wage

rate using data from the International Standard Classification of all

Economic Activities (“ISIC”) Revision 3 rather than ISIC Revision 2.

Final Results; see Decision Memorandum at 16. The court in Since

Hardware remanded the issue to have Commerce conform its results

with the prior review, Home Prods., 36 CIT ___, ___, 837 F. Supp. 2d

1294, 1296–97, and to include Indian data under ISIC Revision 2, as

well as any other appropriate country in that data set. Since Hard-

ware at 9–11. The court rejected Since Hardware and Foshan Shun-

de’s argument that Commerce must use data from India because “the

statute does not mandate Commerce must, as a matter of law, use

Indian data alone.” Since Hardware at 10. The court also deemed

waived any argument by Since Hardware and Foshan Shunde that,

as a factual matter, India alone was both economically comparable to

China and a significant producer of comparable merchandise, be-

cause neither party identified even one country included in Com-

merce’s analysis that failed either standard, leaving that work to the

court or the other interested parties. Id. Consequently, the court did

not “require Defendant or HPI to expend any more energy on this

issue” other than for Commerce to conform its decision to its Remand

Redetermination from the prior administrative review. Id. at 11.

On remand Commerce followed the court’s instructions and recal-

culated the labor wage rate “rely[ing] on labor data reported by

countries either under the International Standard Industrial Classi-

fication (ISIC) Revision 3, or, as discussed below, ISIC Revision 2,”

including “data from India and Nicaragua.” Remand Results at

22–22. Since Hardware again argues that Commerce should have

selected India alone to calculate the surrogate wage rate. SH Br. at

19–20. The court previously rejected this argument in Since Hard-

ware, and Commerce’s labor wage rate surrogate valuation is there-

fore sustained. See Since Hardware at 10–11; see also Home Prods.

Int’l, Inc. v. United States, 36 CIT ___, ___, 810 F. Supp. 2d 1373, 1380

(2012); opinion after remand, Home Prods. Int’l, Inc. v. United States,

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

36 CIT ___, ___, 837 F. Supp. 2d 1294, 1297 (2012); opinion after

remand, Home Prods. Int’l, Inc. v. United States, 36 CIT ___, 853 F.

Supp. 2d 1257 (2012), aff’d, Home Prods. Int’l, Inc. v. United States,

501 Fed. Appx. 981 (Fed. Cir. Apr. 11, 2013).

III. Conclusion

Accordingly, it is hereby

ORDERED that Commerce’s financial statement selection is re-

manded to reconsider the exclusion of the Maximaa financial state-

ments; it is further

ORDERED that Commerce’s brokerage and handling calculations

are remanded for Commerce to reconsider its treatment of container

sizes and proximity to seaports; it is further

ORDERED that Commerce’s labor wage rate surrogate valuation

is sustained; it is further

ORDERED that Commerce’s cotton fabric surrogate valuation is

sustained; it is further

ORDERED that Commerce shall file its remand results on or

before July 30, 2013; and it is further

ORDERED that, if applicable, the parties shall file a proposed

scheduling order with page limits for comments on the remand re-

sults no later than seven days after Commerce files its remand re-

sults with the court.

Dated: May 30, 2013

New York, New York

/s/ Leo M. Gordon

UDGE LEO M. GORDON

◆

Slip Op. 13–70

EDLINE INDUSTRIES,INC., Plaintiff, v. UNITED STATES, Defendant,

Before: Nicholas Tsoucalas, Senior Judge

Court No.: 13–00031

Held: Defendant’s motion to dismiss is granted and plaintiff’s cross-motions to stay

and to consolidate are denied.

Dated: May 30, 2013

Hodes Keating & Pilon (Lawrence R. Pilon and Michael G. Hodes) for Medline

Industries, Inc., Plaintiff.

Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director,

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Divi-

sion, United States Department of Justice (Douglas G. Edelschick); Office of the Chief

Counsel for Import Administration, United States Department of Commerce, Scott D.

McBride, Of Counsel, for the United States, Defendant.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

OPINION AND ORDER

TSOUCALAS, Senior Judge:

This case comes before the court on defendant United States De-

partment of Commerce’s (“Commerce”) motion to dismiss plaintiff

Medline Industries, Inc.’s (“Medline”) complaint, Def.’s Mot. Dismiss,

No. 13–00031, Dkt. No. 13 at 1 (“Def.’s Mot.”), and Medline’s cross-

motions to stay Commerce’s motion and consolidate the instant case

(“Medline I”) with Medline Industries, Inc. v. United States, No.

13–00070 (Ct. Int’l Trade filed Feb. 18, 2013) (“Medline II”). See Pl.’s

Resp. Mot. Dismiss, No. 13–00031, Dkt. No. 17 at 1 (“Pl.’s Resp.”). See

also Pl.’ s Mot. Consolidate, No. 13–00031, Dkt. No. 18; Pl.’s Mot. Stay

Proceedings, No. 13–00031, Dkt. No. 19. Commerce argues that Med-

line I “was filed prematurely and is duplicative of Medline’s identical

challenge in [Medline II].” Def.’s Mot. at 1. Medline argues that at

least one of its cases is jurisdictionally proper, and therefore asks this

court to stay Commerce’s motion and to consolidate Medline I with

Medline II to “avoid the necessity of Medline being whipsawed on the

jurisdictional issue and forced into appealing a dismissal now to

protect itself from a successful jurisdictional challenge in [Medline

II].” Pl.’s Resp. at 3. For the following reasons, the court grants

Commerce’s motion and denies Medline’s cross-motions.

BACKGROUND

On November 14, 2012, Medline filed a scope ruling request asking

Commerce to determine that its hospital bed end panel components

are outside the scope of the antidumping duty order on wooden

bedroom furniture from the People’s Republic of China (“PRC”). See

Complaint, No. 13–00031, Dkt. No. 10 at 7 (“Compl.”). See also

Wooden Bedroom Furniture From the PRC: Final Results and Final

Rescission in Part, 77 Fed. Reg. 51,754 (Aug. 27, 2012) (the “Order”).

In a determination dated December 21, 2012, Commerce found that

the merchandise in question was within the scope of the Order. See

Wooden Bedroom Furniture from the PRC: Scope Ruling on Medline

Industries, Inc.’s Hospital Bed End Panel Components, Inv. No.

A-570–890 (Dec. 21, 2012) (“Scope Ruling”).

On December 27, 2012, Commerce emailed a copy of the Scope

Ruling to Medline’s counsel. See Compl. at 2. Medline insists that

Commerce “confirmed to [Medline’s] legal counsel that there would be

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

no mailing other than the emailing on December 27, 2012.”

Id.

Relying on Commerce’s representations regarding the December 27

email, Medline commenced this action on January 18, 2013 to appeal

the results of the Scope Ruling. See id. at 3; Pl.’s Resp. at 2; Summons,

No. 13–00031, Dkt. No. 1 at 1.

On January 28, 2013, Commerce mailed a copy of the Scope Ruling

to Medline’s counsel. See Compl. at 2–3. In response to this mailing,

Medline also commenced Medline II to appeal the results of the Scope

Ruling.

See Summons, No. 13–00070, Dkt. No. 1 at 1.

Commerce now moves to dismiss Medline I for lack of subject

matter jurisdiction or, alternatively, for failure to state a claim. See

Def.’s Mot. at 1. Specifically, Commerce argues that this Court lacks

jurisdiction because Medline filed Medline I before commencement of

the thirty-day window for filing an appeal of a scope determination

under section 516A(a)(2)(A)(ii) of the Tariff Act of 1930.

See id. at

3–4. Commerce also argues that Medline I should be dismissed be-

cause Medline’s complaint is “duplicative” of the complaint in Medline

II. Id. at 2.

STANDARD OF REVIEW

“Subject matter jurisdiction constitutes a ‘threshold matter’ in all

cases, such that without it, a case must be dismissed without pro-

ceeding to the merits.” Demos v. United States, 31 CIT 789, 789 (2007)

(not reported in the Federal Supplement) (citing Steel Co. v. Citizens

for a Better Env’t, 523 U.S. 83, 94 (1998)). “The burden of establishing

jurisdiction lies with the party seeking to invoke th[e] Court’s juris-

diction.” Bhullar v. United States, 27 CIT 532, 535, 259 F. Supp. 2d

1332, 1334 (2003) (citing Old Republic Ins. Co. v. United States,14

CIT 377, 379, 741 F. Supp. 1570, 1573 (1990)).

“To survive a motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “For

the purposes of a motion to dismiss, the material allegations of a

complaint are taken as admitted and are to be liberally construed in

favor of the plaintiff(s).” Humane Soc’y of the U.S. v. Brown,19CIT

Commerce asserts that it did not mail the Scope Ruling at that time “due to an apparent

misunderstanding.” Def.’s Mot. at 2.

In its motion to dismiss Medline I, Commerce states multiple times that Medline filed

Medline II in a timely fashion following the mailing of the Scope Ruling. See Def.’s Mot. at

2, 3.

All further references to the Tariff Act of 1930 will be to the relevant provisions of Title 19

of the United States Code, 2006 edition, and all applicable supplements thereto.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

1104, 1104, 901 F. Supp. 338 , 340 (1995) (citing Jenkins v. McKeithen,

395 U.S. 411, 421–22 (1969)).

DISCUSSION

An action challenging a final scope ruling by Commerce must be

filed “[w]ithin thirty days after...thedate of mailing” of that scope

ruling. 19 U.S.C. § 1516a(a)(2)(A)(ii). If a party does not satisfy the

terms of section 1516a(a)(2)(A)(ii), this Court lacks jurisdiction over

that party’s claim. See NEC Corp. v. United States, 806 F.2d 247, 248

(Fed. Cir. 1986) (“The proper filing of a summons to initiate an action

in the Court of International Trade is a jurisdictional requirement.”).

“Since section 1516a(a)(2)(A) specifies the terms and conditions upon

which the United States has waived its sovereign immunity in con-

senting to be sued in the Court of International Trade, those limita-

tions must be strictly observed and are not subject to implied excep-

tions.” Georgetown Steel Corp. v. United States, 801 F.2d 1308, 1312

(Fed. Cir. 1986). The Court’s jurisdiction over this action turns on

whether the email to Medline’s counsel on December 27, 2012 consti-

tuted a “mailing” within the meaning of section 1516a(a)(2)(A)(ii).

Medline argues that “th[is] Court has jurisdiction over at least one

of [Medline I and Medline II ].” Pl.’s Resp. at 3. Medline states that it

“is unaware of any court decision holding that email notification does

or does not satisfy 19 U.S.C. § 1516a(a)(2)(A)(ii).” Id. at 3–4. Given

this fact and in light of Commerce’s representations concerning the

legal effect of the December 27, 2012 email, Medline asks the court to

stay Commerce’s motion and consolidate Medline I with Medline II.

Id. at 4. Medline insists that this result “spares Medline the necessity

of filing a costly and unnecessary appeal of an adverse jurisdictional

ruling in [Medline I ], just to protect itself from possible jurisdictional

challenges in [Medline II ].” Id.

Medline has not met the burden of establishing this Court’s juris-

diction over Medline I. In light of its obligation to construe the terms

of section 1516a(a)(2)(A) strictly, see Georgetown Steel, 801 F.2d at

1312, the court refuses to extend the definition of “mailing” to include

email messages. See Bond St., Ltd. v. United States, 31 CIT 1691,

1695, 521 F. Supp. 2d 1377, 1381 (2007) (holding that a fax was not a

“mailing” within the meaning of 19 U.S.C. § 1516a(a)(2)(A)(ii)); cf.

Tyler v. Donovan, 3 CIT 62, 65–66, 535 F. Supp. 691, 693–94 (1982)

(mailed notification of a final determination was insufficient to trig-

ger filing period when statute required publication in the Federal

Medline has not demonstrated that an email is sufficient to com-

mence the filing period under section 1516a(a)(2)(A)(ii). Accordingly,

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

the thirty-day period for Medline to appeal the results of the Scope

Ruling was triggered by the January 28, 2013 mailing of the Scope

Ruling to Medline’s counsel. See 19 U.S.C. § 1516a(a)(2)(A)(ii). Be-

cause Medline filed Medline I prematurely, the court must dismiss for

lack of subject matter jurisdiction.

See W. Union Tel. Co. v. FCC, 773

F.2d 375, 381 (D.C. Cir. 1985) (dismissing for lack of jurisdiction

where plaintiff filed petition for review before the 28 U.S.C. § 2344

filing window opened); Bond St., 31 CIT at 1695, 521 F. Supp. 2d at

1381. Although the court is wary of granting Commerce’s motion

given the alleged misrepresentations to Medline’s counsel, this con-

cern is tempered by the fact that Medline initiated Medline II in a

timely fashion following the January 28, 2013 mailing of the Scope

Ruling. See Def.’s Mot. at 2, 3.

Also before the court are Medline’s cross-motions to stay Com-

merce’s motion to dismiss, see Pl.’s Mot. Stay, No. 13–00031, Dkt. No.

19 at 1, and to consolidate Medline I with Medline II. See Pl.’s Mot.

Consolidate, No. 13–00031, Dkt. No. 18 at 1. In light of the court’s

decision to dismiss Medline I for lack of subject matter jurisdiction,

these motions are denied as moot. See Hitachi Home Elecs. (Am.), Inc.

v. United States, 34 CIT __, __, 704 F. Supp. 2d 1315, 1322 (2010),

aff’d 661 F.3d 1343 (Fed. Cir. 2011) (denying plaintiff’s cross-motion

for consolidation as moot when dismissing for lack of subject matter

jurisdiction).

CONCLUSION

For the foregoing reasons, Medline’s complaint is dismissed without

prejudice due to lack of subject matter jurisdiction, and Medline’s

cross-motions to stay and to consolidate are denied as moot.

ORDER

In accordance with the above, it is hereby

ORDERED that defendant’s motion to dismiss is GRANTED ; and

it is further

ORDERED that plaintiff’s complaint (Dkt. No. 10) in this action is

dismissed without prejudice; and it is further

ORDERED that plaintiff’s cross-motion to consolidate (Dkt. No.

18) is DENIED; and it is further

ORDERED that plaintiff ’s cross-motion to stay (Dkt. No. 19) is

DENIED.

Because the court does not have subject matter jurisdiction over Medline I, the court will

not rule on whether Medline stated a claim in its complaint.

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013

Dated: May 30, 2013

New York, New York

/s/ Nicholas Tsoucalas

ICHOLAS TSOUCALAS

SENIOR JUDGE

CUSTOMS BULLETIN AND DECISIONS, VOL. 47, NO. 26, JUNE 19, 2013