Antidumping and countervailing duty orders address unfairly priced and subsidized imports that enter the United States. Each order contains a “scope” that identifies in part the “class or kind” or merchandise covered by order.
The U.S. Department of Commerce and U.S. Customs & Border Protection (CBP) possess complimentary, yet distinct responsibilities in enforcing the scope of an order. Upon request or its own initiative, Commerce may issue a ruling that interprets a scope to determine an order’s coverage. Meridian Prods., Inc. v. United States, 851 F.3d 1375, 1381–82 (Fed. Cir. 2017). In so doing, Commerce must always follow the unambiguous terms of a scope. See id. However, if Commerce finds the scope terms ambiguous, it must consult the regulatory factors in 19 C.F.R. § 351.225(k)(1) and, under certain circumstances, 19 C.F.R. § 351.225(k)(2). If Commerce determines that an import falls within the scope of an order, it then instructs CBP to execute a ministerial function: suspend the liquidation of the import at issue and require cash deposits as security for such imports. See 19 C.F.R. § 351.225(l)(1)–(4). “Liquidation means the final computation or ascertainment of duties on entries for consumption or drawback entries.” 19 C.F.R. § 159.1.
Scope issues, however, do not always get resolved in such a linear fashion. On some occasions, CBP will treat certain entries as within the scope of an antidumping or countervailing duty order without the benefit of a Commerce scope ruling on the merchandise in question. In this scenario, questions arise as to how soon suspension of the entries’ liquidation may occur, given that Commerce has not yet spoken on the matter. In Sunpreme Inc. v. United States, the U.S. Court of Appeals for the Federal Circuit recently confirmed certain limits on the suspension of liquidation in the scenario described above.
The dispute has a complicated backstory. CBP had initially made its own independent determination that Sunpreme’s imported solar modules fall within the scope of antidumping and countervailing duty orders on certain solar products from China. The trade bar commonly refers to these orders as the Solar I Orders. Sunpreme challenged CBP’s action by filing suit at the U.S. Court of International Trade (CIT) under 28 U.S.C. § 1581(i), arguing that CBP exceeded its authority by determining whether an import fell within the scope of an order. After years of litigation, the Federal Circuit dismissed the suit, holding that Sunpreme could have an adequate remedy—i.e., a lawsuit challenging an adverse scope ruling issued by Commerce—under 28 U.S.C. § 1581(c), such that the CIT lacked subject matter jurisdiction under 28 U.S.C. § 1581(i).
As it turns out, Sunpreme had pursued parallel relief from Commerce in a scope inquiry at the same time that it filed its initial suit at the CIT. Commerce ruled against Sunpreme and instructed CBP to continue its suspension of the entries’ liquidation, including for imports that entered prior to the initiation of Commerce’s scope ruling. Sunpreme sought review before the CIT. Judge Kelly upheld Commerce’s scope ruling on the merits, but she also ruled that Commerce unlawfully instructed CBP to suspend the liquidation of imports that entered prior to the initiation of the scope...
