Diamond Sawblades Manufacturers' Coal. v. United States

540 F.Supp.3d 1338

DIAMOND SAWBLADES MANUFACTURERS’ COALITION, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 21-137

Court No. 18-00134

United States Court of International Trade.

October 7, 2021

Daniel B. Pickard Wiley Rein LLP, of Washington D.C., for plaintiff. With him on brief were Maureen E. Thorson and Stephanie M. Bell.

John J. Tudor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington D.C., for defendant. With him on the brief were Jeanne E. Davidson, Director and Franklin E. White, Jr., Assistant Director. Of Counsel on the brief was Paul K. Keith, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington D.C.

OPINION

Goldberg, Senior Judge:

Before the court is the scope redetermination ("Remand Redetermination") of the U.S. Department of Commerce ("Commerce," or the "Department") filed pursuant to the court's opinion and order in Diamond Sawblades Mfrs. Coalition v. United States , 43 CIT ––––, 405 F. Supp. 3d 1345 (2019) (" Diamond Sawblades I "). Final Results of Remand Redetermination (Feb. 3, 2020), Rem. P.R. Doc. 15,¹ ECF No. 30 ("Remand Redetermination "). This litigation involves a challenge to the final scope ruling of Commerce which excludes Lyke Industrial Tools LLC ("Lyke") cupwheels from an antidumping duty order (the "Order") on diamond sawblades from the People's Republic of China ("China" or "PRC"). Diamond Sawblades and Parts Thereof From the People's Republic of China and the Republic of Korea: Antidumping Duty Orders , 74 Fed. Reg. 57,145 (Int'l Trade Admin. Nov. 4, 2009) ("Order ").

Plaintiff Diamond Sawblades Manufacturers’ Coalition ("DSMC"), an ad hoc coalition of producers of diamond sawblades domestic like products in the United States, once again challenges the Department's determination that the scope of the Order excludes certain cupwheels that Lyke imports into the United States. For the reasons stated herein, the court holds that the Departments’ scope determination adheres to the applicable regulatory framework of 19 C.F.R. § 351.225² and that there is substantial evidence supporting Commerce's conclusion that Lyke's cupwheels are not within the scope of the Order. Therefore, Commerce's Remand Redetermination is affirmed.

I. Background

The court assumes familiarity with the facts as discussed in the prior opinion.

Diamond Sawblades I , 43 CIT at ––––, 405 F. Supp. 3d at 1349–51. Commerce issued the antidumping duty order relevant to this litigation in November 2009, pursuant to a petition filed by DSMC. Order , 74 Fed. Reg. at 57,145; see also Compl. ¶ 5 (July 10, 2018), ECF No. 9 ("Compl."). Lyke submitted a scope ruling request to Commerce on February 23, 2018, requesting that Commerce determine whether two of its products, diamond sawblades and cupwheels, fell within the scope of the order. Letter from Pennington, P.A. to Sec'y of Commerce, re: Lyke Industrial Tools, LLC Scope Request: Diamond Sawblades Whose Cores Have Rockwell C Hardness Less Than 25 Prior to the Incorporation of Diamond Segments and Diamond Cupwheels - Diamond Sawblades and Parts Thereof from the People's Republic of China (A-570-900) 2 (Feb. 23, 2018), P.R. Doc. 1 ("Lyke Scope Request"). Commerce determined that Lyke's diamond sawblades are within the scope of the Order and that its cupwheels are not. Final Scope Determination for Scope Request from Lyke Industrial Tool, LLC 8–10 (May 17, 2018), P.R. Doc. 23 ("Final Scope Ruling").

On June 11, 2018, DSMC initiated litigation contesting the Department's determination that Lyke's cupwheels are outside the scope of the Order. Summons (June 11, 2018), ECF No. 1 ; Compl. 1. On November 28, 2018, DSMC moved for judgment on the agency record. Pl.’s Rule 56.2 Mot. for J. on the Agency R. (Nov. 28, 2018), ECF No. 16. In Diamond Sawblades I, the court remanded the Department's Final Scope Ruling. First, the court found that the text of the scope of the Order did not resolve the scope dispute in and of itself because the term "sawblade" was not clearly defined. Diamond Sawblades I , 43 CIT at ––––, 405 F. Supp. 3d at 1352. Second, the court stated that as the scope was susceptible to interpretation, Commerce needed to turn to sources listed in 19 C.F.R. § 351.225(k)(1), which Commerce failed to do in a way that was supported by substantial evidence because the Department's (k)(1) analysis improperly considered criteria found under 19 C.F.R. § 351.225(k)(2). Id. at ––––, 405 F. Supp. 3d at 1353–54. Third, the court held that "[t]he sources used by Commerce in its (k)(1) analysis do not ‘definitively answer’ the question of whether Lyke's cupwheels are excluded from the scope of the Order." Id. at ––––, 405 F. Supp. 3d at 1358. The court ordered Commerce to conduct an analysis under 19 C.F.R. § 351.225(k)(2) to determine whether Lyke's cupwheels are included in the scope of the Order. Id. at ––––, 405 F. Supp. 3d at 1358.

On October 15, 2019, Commerce invited both DSMC and Lyke to provide further information related to the factors listed in 19 C.F.R. § 351.225(k)(2) and parties commented and submitted rebuttal comments on October 24, 2019 and October 31, 2019. Mem. from Minoo Hatten, Program Manager, AD/CVD Operations, Off. I to Diamond Sawblades Mfrs. Coal. and Lyke Indus. Tools, LLC (Oct. 15, 2019), Rem. P.R. Doc. 1; Letter from Pennington P.A. to Sec'y Commerce, re: Diamond Sawblades and Parts Thereof from the People's Republic of China (A-570-900): Lyke's Comments on Remand (Oct. 24, 2019), Rem. P.R. Docs. 4–5 ("Lyke's Comments"); Letter from Wiley Rein LLP to Sec'y Commerce, re: Diamond Sawblades and Parts Thereof from the People's Republic of China: Comments on (k)(2) Factors (Oct. 24, 2019), Rem. P.R. Doc. 7 ("DSMC's Comments"); Letter from Pennington P.A. to Sec'y Commerce, re: Diamond Sawblades and Parts Thereof from the People's Republic of China (A-570-900): Lyke's Rebuttal to Pet'rs’ Remand Comments (Oct. 31, 2019), Rem. P.R. Doc. 8 ("Lyke's Rebuttal Comments"); Letter from Wiley Rein LLP to Sec'y Commerce, re: Diamond Sawblades and Parts Thereof from the People's Republic of China: Rebuttal Comments on (k)(2) Factors (Oct. 31, 2019), Rem. P.R. Doc. 9 ("DSMC's Rebuttal Comments").

On February 3, 2020, Commerce issued its Remand Redetermination, addressing the issue of whether Lyke's cupwheels are within the scope of the Order by conducting a 19 C.F.R. § 351.225(k)(2) analysis. After considering the five additional factors set forth in 19 C.F.R. § 351.225(k)(2), Commerce determined, once again, that Lyke's cupwheels are not within the scope of the Order. Remand Redetermination 59. On March 18, 2020, DSMC filed its public comments, maintaining that it was unnecessary for Commerce to proceed to an analysis under 19 C.F.R. § 351.225(k)(2) as "the scope language unambiguously covers cupwheels," and that if the language is ambiguous, then the 19 C.F.R. § 351.225(k)(1) factors are dispositive. Pl. Diamond Sawblades Mfrs.’ Coal.’s Comments on Final Results of Redetermination Pursuant to Remand 4 (Mar. 18, 2020), ECF No. 35 ("DSMC's Remand Comments"). DSMC also states that Commerce's determination on remand in regards to the (k)(2) factors is flawed and "inadequately explained, unsupported by substantial evidence, are inappropriately divorced from the scope language itself, and rest on an overly narrow interpretation of certain (k)(2) factors." Id . On May 8, 2020, Commerce responded to DSMC's Remand Comments and requested that the court sustain its Remand Redetermination. Def.’s Resp. to Comments on Remand Results 18 (May 8, 2020), ECF No. 38 ("Def.’s Reply").

The court now considers the Remand Redetermination.

II. Jurisdiction and Standard of Review

As in the prior opinion and order, the court exercises jurisdiction according to section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), under which the court reviews actions commenced under section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a.

The court sustains Commerce's determinations 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). Substantial evidence refers to "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion," SKF USA, Inc. v. United States , 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. Nat'l Labor Relations Bd. , 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ), and under this standard, the court will uphold a determination by Commerce provided that Commerce chooses from among the range of possible and reasonable conclusions based on the record. However, although "Commerce is entitled to substantial deference with regard to its interpretations of its own antidumping duty order," King Supply Co., LLC v. United States , 674 F.3d 1343, 1348 (Fed. Cir. 2012) (citation omitted) "[t]his broad deference is not unlimited ... ‘Commerce cannot interpret an antidumping order so as to change the scope of that order, nor can Commerce interpret an order in a manner contrary to its terms.’ " Id. (quoting Walgreen Co. v. United States , 620 F.3d 1350, 1354 (Fed. Cir. 2010) ).

III. Discussion

The court sustains the Department's scope ruling. Commerce has made the determination that Lyke's cupwheels do not fall within the scope of the Order, and this determination is supported by substantial evidence on the record. The Department correctly applied the regulatory framework of 19 C.F.R. § 351.225(k)(2) in conducting its analysis and has complied with the court's directives in Diamond Sawblades I .

To determine whether a certain product is within the scope of an order, Commerce first must consider the language of the order itself. See Arcelormittal Stainless Belgium N.V. v. United States , 694 F.3d 82, 87 (Fed. Cir. 2012). If the scope language of the order does not unambiguously cover or not cover the product in question, Commerce...