Sunpreme Inc. v. United States

Slip Op. 16-97
UNITED STATES COURT OF INTERNATIONAL TRADE
SUNPREME INC.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
SOLARWORLD AMERICAS INC.,
Defendant-Intervenor.
Before: Claire R. Kelly, Judge
Court No. 15-00315
PUBLIC VERSION
OPINION
[Granting Plaintiff’s motion for judgment on the agency record and entering judgment for
Plaintiff.]
Dated: October 11, 2016
John Marshall Gurley and Nancy Aileen Noonan, Arent Fox LLP, of Washington, DC,
argued for plaintiff. With them on the brief was Diana Dimitriuc-Quaia.
Tara Kathleen Hogan, Trial Counsel, Commercial Litigation Branch – Civil Division, U.S.
Department of Justice, of Washington, DC, argued for defendant. 	With her on the brief
were Justin Reinhart Miller, Senior Trial Counsel, International Trade Field Office, Civil
Division, U.S. Department of Justice, of New York, NY, Benjamin C. Mizer, Principal
Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T.
Blades, Assistant Director. 	Of counsel on the brief was Paula Smith, Senior Attorney,
Office of the Assistant Chief Counsel, International Trade Litigation, United States
Customs and Border Protection of New York, NY.
Timothy C. Brightbill and Maureen Elizabeth Thorson, Wiley Rein, LLP, of Washington
DC, argued for defendant-intervenor. With them on the brief was Usha Neelakantan.
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Kelly, Judge: This action is before the court on Plaintiff’s USCIT Rule 56.1 motion
for judgment on the agency record challenging United States Customs and Border
Protection’s (“Customs” or “CBP”) determination to require that Plaintiff file its entries as
type “03” entries subject to antidumping and countervailing duty (“AD/CVD”) orders on
crystalline silicon photovoltaic cells, whether or not assembled into modules from the
People’s Republic of China (“Orders”). 1 See Pl.’s Rule 56.1 Mot. J. Agency R., May 11,
2016, ECF No. 102 (“Pl.’s 56.1 Mot.”); CBP Notices of Action at 000001–000010, CD 1,
CBP AR 000001–000010 (Apr. 20, 2015–May 20, 2015) (“CBP Notices of Action”); 2
Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, From the
People’s Republic of China, 77 Fed. Reg. 73,018 (Dep’t Commerce Dec. 7, 2012)
(amended final determination of sales at less than fair value, and antidumping duty order)
(“AD Order”) and Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into
Modules, from the People’s Republic of China, 77 Fed. Reg. 73,017 (Dep’t Commerce
Dec. 	7, 	2012) 	(countervailing 	duty 	order) 	(“CVD 	Order”). 	As 	a 	result 	of 	CBP’s
determination, it began collecting cash deposits and suspending liquidation on Plaintiff’s
entries because it considered Plaintiff’s merchandise to fall within the scope of Orders.
See CBP Notices of Action; CVD Order, 77 Fed. Reg. 73,017; AD Order, 77 Fed. Reg.
73,018.
1 CBP’s determination was not published in the Federal Register.
2 On February 12, 2016, Defendant submitted indices to the confidential and public administrative
records, which can be found at ECF Nos. 92 and 93, respectively. All further documents from the
administrative record may be located in those appendices.
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PUBLIC VERSION
Plaintiff began depositing AD/CVD duties in order to enter its merchandise from
approximately April 20, 2015 until December 16, 2015, See Entry Documents at 000957–
001250, 	CD 	38, 	CBP 	AR 	000957–001250 	(June 	3, 	2015–Nov. 	5, 	2015) 	(“Entry
Documents”), when the court entered a temporary restraining order (“TRO”) restraining
CBP from requiring Plaintiff to pay cash deposits on its entries until December 28, 2015. 3
See Am. Mem. and TRO, Dec. 16, 2015, ECF No. 36; Sunpreme Inc. v. United States,
40 CIT __, __, 145 F. Supp.3d 1271, 1299 (2016).
Plaintiff commenced this action pursuant to § 2631 of the Customs Court Act of
1980, as amended, 28 U.S.C. § 2631(i) (2012). 	Compl., Dec. 3, 2015, ECF No. 5.
SolarWorld Americas, Inc. (“SolarWorld”) moved to intervene, see Unopposed Mot.
Intervene, Dec. 9, 2015, ECF No. 15, and the court granted that motion pursuant to USCIT
Rule 24(b) on December 10, 2015. 	See Mem. and Order, Dec. 10, 2015, ECF No. 21.
3 On December 28, 2015, the court extended its initial TRO to January 11, 2016 unless extended
by further. See Order Extending TRO Confidential Version 2, Dec. 28, 2015, ECF No. 48. On
January 8, 2016, the court granted Plaintiff’s motion for a preliminary injunction. See Sunpreme
Inc. v. United States, 40 CIT __, __, 145 F. Supp. 3d 1271, 1299 (2016). 	The preliminary
injunction expired upon the issuance of a preliminary or final scope determination by the U.S.
Department of Commerce (“Commerce”) “to the effect that entries of solar modules containing bi-
facial thin film cells made with amorphous silicon from the People’s Republic of China that are the
subject of this action are included within the scope of” the Orders. See Sunpreme, 40 CIT __, __,
145 F. Supp.3d at 1299.
On July 29, 2016, Commerce issued an affirmative final scope determination. See Letter
from Plaintiff Notifying the Court of Scope Decision at Att., Aug. 5, 2016, ECF No. 109; see also
AD Order, 77 Fed. Reg. at 73,018, CVD Order, 77 Fed. Reg. at 73,017. Since the preliminary
injunction expired upon Commerce’s issuance of an affirmative scope determination, Commerce
is no longer enjoined from collecting cash deposits on Plaintiff’s imports. See Sunpreme, 40 CIT
at __, 145 F. Supp.3d at 1299. As a result of Commerce’s affirmative scope ruling, Commerce’s
regulations provide any suspension of liquidation will continue and that Commerce will instruct
CBP “to suspend liquidation and to require a cash deposit of estimated duties, at the applicable
rate, for each unliquidated entry on or after the date of initiation of the scope inquiry.” 19 C.F.R.
§ 351.225(l)(3) (2015).
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Plaintiff filed a motion for judgment on the agency record pursuant to USCIT Rule 56.1.
Pl.’s 56.1 Mot. 	Defendant and Defendant-Intervenors filed responses to the Plaintiff’s
motion. 	See Def.’s Mem. Resp. Pl.’s Mot. J. Agency R. Confidential Version, Aug. 19,
2016, ECF No. 112 (“Def.’s Resp. Br.”); Resp. Br. Def.-Intervenor SolarWorld Americas,
Inc. Confidential Version, Aug. 19, 2016, ECF No. 113; Resp. Br. Def.-Intervenor
SolarWorld Americas, Inc. Revised Confidential Version, Aug. 26, 2016, ECF No. 117
(“SolarWorld Resp. Br.”). Briefing concluded on September 16, 2016, when Plaintiff filed
its reply brief. See Reply Br. of Pl. Sunpreme Inc. Confidential Version, Sept. 16, 2016,
ECF No. 123 (“Sunpreme Reply Br.”). The court held oral argument on October 7, 2016.
See Confidential Oral Arg., Oct. 7, 2016, ECF No. 133.
BACKGROUND
Plaintiff is a U.S. company that imports solar modules produced by Jiawei
Solarchina (Shenzhen) Co., Ltd. that are composed of solar cells Plaintiff designs,
develops, and tests at its facility in California. 	Compl. ¶1; Def.’s Answer ¶1, Feb. 12,
2016; ECF No. 95 (“Answer”); ACE Inquiry # [[ 	]] at 000244, CD 14, CBP AR 000244
(May 13, 2015) (“ACE Inquiry # [[ 	]]”); see also Sunpreme Letter to CBP re:
Sunpreme at 000174–000175, 000181–000201, CD 12, CBP AR 000173–000236 (May
6, 2015). 	Neither party disputes that the frameless double tempered-glass constructed
solar modules imported by Plaintiff are “bifacial solar modules made using its Hybrid Cell
Technology.” Compl. ¶¶10–11; Answer ¶¶10–11.
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On 	December 	7, 	2012, 	the 	U.S. 	Department 	of 	Commerce 	(“Commerce”)
published the Orders. See CVD Order, 77 Fed. Reg. at 73,017; AD Order, 77 Fed. Reg.
at 73,018. The scope language of the AD/CVD orders is identical. It provides:
The 	merchandise 	covered 	by 	this 	order 	is 	crystalline 	silicon
photovoltaic cells, and modules, laminates, and panels, consisting of
crystalline 	silicon 	photovoltaic 	cells, 	whether 	or 	not 	partially 	or 	fully
assembled into other products, including, but not limited to, modules,
laminates, panels and building integrated materials.
This order covers crystalline silicon photovoltaic cells of thickness
equal to or greater than 20 micrometers, having a p/n junction formed by
any means, whether or not the cell has undergone other processing,
including, but not limited to, cleaning, etching, coating, and/or addition of
materials (including, but not limited to, metallization and conductor patterns)
to collect and forward the electricity that is generated by the cell.
. . .
Excluded from the scope of this order are thin film photovoltaic
products 	produced 	from 	amorphous 	silicon 	(a-Si), 	cadmium 	telluride
(CdTe), or copper indium gallium selenide (CIGS).
CVD Order, 77 Fed. Reg. at 73,017; AD Order, 77 Fed. Reg. at 73,018. On December
11, 2012 and December 21, 2012, Commerce issued liquidation instructions, which
incorporated the scope language common to the Orders, and instructed CBP to require
cash deposits equal to the rates in effect at the time of entry. See Message No. 2346303
at 000011–000019, PD 2, CBP AR 000011–000019 (Dec. 11, 2012); Message No.
2356306 at 000020–000033, PD 3, CBP AR 000020–000033 (Dec. 21, 2012) (collectively
“Liquidation Instructions”).
Neither party contests that, prior to April 20, 2015, Plaintiff was entering its
merchandise as entry type “01.” See CBP Notices of Action at 000001–000010; Request
for Information to Sunpreme Inc. at 000036–000037, CD 4, CBP AR 000034–000044
(Jan.8, 2015) (“Request for Information”); see also Pl.’s Mem. Supp. Mot. J. Agency R.
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Confidential Version 1, 3, May 10, 2016, ECF No. 100 (“Sunpreme Br.”); Def.’s Resp. Br.
4. Before April 20, 2015, CBP was also not requiring Plaintiff to pay cash deposits or to
enter its merchandise as type “03.”. See Sunpreme Br. 1, 3; Def.’s Resp. Br. 4.
In early 2015, CBP began to consider whether Plaintiff’s entries matched the
description of merchandise covered by the Orders and the Liquidation Instructions by
requesting supporting documentation. 4 See Request for Information at 000034. Plaintiff
cooperated with CBP’s request. 5 Id. at 000035. In March 2015, CBP examined a sample
of Plaintiff’s modules from one of its shipments by sending that sample to a CBP
4 CBP requested that Plaintiff provide [[
]]. Request for Information at 000034.
5 In response, Plaintiff indicated that [[
]]. Request for Information at 000035. Plaintiff indicated its solar cells are
[[ 	]]. 	Id. at 000039. 	In describing its
fabrication process, Plaintiff indicated that “[[
]].”
Plaintiff then referenced its patent, which it argued states that ‘[[
]].’”
Id.
Plaintiff further explained that:
[[
]]
Id.
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laboratory for analysis. 6 See Laboratory Report No. SF20150252 at 000045, CD 5, CBP
AR 000045–000073 (Mar. 26, 2015) (“Laboratory Report No. SF20150252”). 	CBP’s
laboratory confirmed the cells contain crystalline silicon. Id. On April 17, 2015, the same
laboratory issued a supplemental report further confirming the presence of crystalline
silicon in the sample. 7 	Supplemental Laboratory Report No. SF20150252S at 000076,
CD 8, CBP AR 000076–000093 (Apr. 17, 2015) (“Supplemental Laboratory Report No.
SF20150252S”). 8
On April 7, 2015, CBP [[
]]. 	See CBP Letter to Sunpreme, CD 6, CBP AR 000074 (Apr. 7,
2015); CBP Letter to Sunpreme, CD 7, CBP AR 000075 (Apr. 8, 2015). 	Beginning on
April 20, 2015, CBP began sending Plaintiff Notices of Action requiring that it file those
entries as type “03” entries subject to AD/CVD duties and pay cash deposits in order for
6 On March 26, 2015, CBP’s laboratory found that a sample from entry # 32212346070 is a solar
panel consisting of “[[
 	 	 	 	 	 	 	 	 	 	 	 	 	]].”
Laboratory Report No. SF20150252 at 000045, CD 5, AR 000045–000073 (Mar. 26, 2015).
7 CBP’s laboratory specifically found that “[[
]].” Supplemental Laboratory Report No.
SF20150252S at 000076, CD 8, CBP AR 000076–000093 (Apr. 17, 2015).
8 Neither of these two initial CBP laboratory reports indicates CBP [[
]].
See Laboratory Report No. SF20150252 at 000045–000073; Supplemental Laboratory Report
No. SF20150252S at 000076–000093.
E-mail communications between CBP’s Electronics Center of Excellence and Expertise
(“ECEE”) and CBP’s laboratory, which were annexed to Supplemental Laboratory Report No.
SF20150252S, indicated that ECEE [[
]]. 	Supplemental Laboratory Report No.
SF20150252S at 000092–000093. 	No response to these inquiries was included with the
laboratory report filed with the administrative record. See id.
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PUBLIC VERSION
its shipments to be released from the port warehouse. 9 	See CBP Notices of Action at
000001–000010. As a result, the liquidation of Plaintiff’s entries became suspended by
operation of law. 10 	In May 2015, Plaintiff submitted several letters to CBP’s Electronics
Center for Excellence and Expertise (“ECEE”) in Long Beach, California, arguing that its
products were not subject to the Orders. 11 See Letter from Sunpreme re: Sunpreme, CD
9 One effect of CBP requiring Plaintiff to file its entries as type “03” entries is to require Plaintiff to
post cash deposits for its merchandise in order to withdraw the merchandise for consumption or
risk exposing itself to penalties. See Sections 484 and 592 of the Tariff Act of 1930, as amended,
19 U.S.C. §§ 1484, 1592 (2012); see also 19 C.F.R. § 144.38(d)–(e) (2015).
10 Although liability to pay duties accrues upon entry of subject merchandise into “the Customs
territory of the United States,” see 19 C.F.R. § 141.1(a) (2015), because the United States
employs a retrospective duty assessment system, the amount of actual liability may not be known
for some time after entry occurs. See Parkdale Int’l v. United States, 475 F.3d 1375, 1376–77
(Fed. Cir. 2007). Commerce clarifies the implications of retroactivity in its regulations, explaining
that under the system:
final 	liability for 	antidumping 	and countervailing 	duties is 	determined 	after
merchandise is imported. 	Generally, the amount of duties to be assessed is
determined in a review of the order covering a discrete period of time. If a review
is not requested, duties are assessed at the rate established in the completed
review covering the most recent prior period or, if no review has been completed,
the cash deposit rate applicable at the time merchandise was entered.
19 C.F.R. § 351.212(a) (2015). When merchandise is imported, the importer deposits with CBP
an amount equal to the prospective duties on each item being entered or withdrawn that the port
director estimates will be owed when the entries of merchandise are “liquidated.” See 19 C.F.R.
§§ 141.101, 141.103 (2015). “Liquidation” is defined as “the final computation or ascertainment
of duties on entries for consumption or drawback entries.” 19 C.F.R. § 159.1 (2015).
Commerce’s regulations provide that liquidation shall be suspended on merchandise
entered or withdrawn from warehouse for consumption subject to AD/CVD orders on or after the
date of publication of the notice of affirmative AD/CVD determination. 	See 19 C.F.R.
§§ 159.58(a)–(b) (2015). 	This suspension of liquidation enables Commerce to calculate
assessment rates for subject entries, see Section 751 of the Tariff Act of 1930, as amended, 19
U.S.C. § 1675(a)(2) (2012), which are applied by Customs pursuant to liquidation instructions
received from Commerce after completion of the administrative review. See Section 751 of the
Tariff Act of 1930, as amended, 19 U.S.C. § 1675(a)(3)(B) (2012).
11 Plaintiff argued that CBP’s [[
]]” Letter from Sunpreme re: Sunpreme Modules – Exclusion from the AD/CVD Orders
(footnote continued)
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PUBLIC VERSION
12, CBP AR 000173–000236 (May 6, 2015); Letter from Sunpreme re: Sunpreme
Retention Notices, CD 13, CBP AR 000237–000243 (May 12, 2015); Letter from
Sunpreme re: Sunpreme Modules – Exclusion from the AD/CVD Orders on Crystalline
Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From China, CD 15,
CBP AR 000245–000434 (May 14, 2015); Letter from Sunpreme re: Sunpreme, CD 16,
CBP 000435–000457 (May 19, 2015).
On June 3, 2015, CBP contacted Commerce seeking guidance on whether
Plaintiff’s products are included within the scope of the Orders. 	See ACE Inquiry #
[[ 	]], CD 18, CBP AR 000479 (June 3, 2015) (“ACE Inquiry # [[ 	]]”). Commerce
responded that “a determination as to whether this product is covered by antidumping
duty order A-570-979 and countervailing duty order C-570-980 would need to be made
by the Department of Commerce in a scope ruling which can be requested by the importer
or exporter.” 	Id. 	Defendant avers that CBP “conveyed to Sunpreme verbally that, if
on Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From China
at 000246, CD 15, CBP AR 000245–000434 (May 14, 2015). Plaintiff further argued that its
[[
]]
Id. Plaintiff’s letter cited the U.S. International Trade Commission’s (“ITC”) definition of thin-film
products for its AD/CVD injury investigations, which it indicated provides that
[[
]]
Id. at 000255 (citations omitted). Plaintiff contended that “[[
]]” Id. Finally, Plaintiff claimed that “[[
]]” Id. at 000256.
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Sunpreme believed that its products were not covered by the scope description or were
described by the exclusionary language, it would need to seek a scope ruling from
Commerce.” Def.’s Resp. Br. 7.
Thereafter, CBP continued to test and analyze samples of Plaintiff’s imported
products. 12 See Laboratory Report # LA20150736 at 000534–000535, CD 21, CBP AR
000534–000657 (Aug. 13, 2015); Laboratory Report # SF20151545 at 000658, CD 22,
CBP AR 000658-000700 (Sept. 30, 2015). 	Plaintiff continued to submit additional
information to CBP, including its own independent laboratory testing, to assist CBP in its
further investigation. 	See Letter from Sunpreme re: Sunpreme – Five-Step Production
12 On August 13, 2015, another CBP laboratory issued a report confirming
[[
]]
Laboratory Report # LA20150736 at 000534–000535, CD 21, CBP AR 000534–000657 (Aug. 13,
2015). Following further laboratory testing, CBP found that
[[
 	 	 	 	 	 	 	 	 	 	]]

Laboratory Report # SF20151545 at 000658, CD 22, CBP AR 000658-000700 (Sept. 30, 2015).
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Process of Thin Film Cells and Characterization of the Solar Cell By Independent
Laboratory Testing, CD 19–20, CBP AR 000480–000533 (July 6, 2015).
On November 16, 2015, Plaintiff filed a request for a scope ruling with Commerce
under 19 C.F.R. § 351.225 (2012). 13 Request for a Scope Ruling on Solar Modules with
Bi-Facial Thin Film Cells Public Version, PD 25, CBP AR 000767-000828 (Nov. 16, 2015).
On December 30, 2015, Commerce initiated a formal scope inquiry pursuant to 19 C.F.R.
§ 351.225(e). 	See Letter from Plaintiff Notifying the Court of Scope Decision Att. at 2,
Aug. 5, 2016, ECF No. 109 (“Final Scope Determination”). On July 29, 2016, Commerce
issued its final determination concluding that Plaintiff’s products fall within the scope of
the Orders. Final Scope Determination at 18.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction over Plaintiff’s claim under 28 U.S.C. § 1581(i)(2) and
(i)(4). 14 The court reviews an action brought under 28 U.S.C. § 1581(i) under the same
13 Further citations to the Code of Federal Regulations are to the 2015 edition.
14 On December 17, 2015, Defendant moved to dismiss Plaintiff’s cause of action, arguing that:
(1) Plaintiff may not invoke the Court’s residual jurisdiction because it could challenge CBP’s
determination under 28 U.S.C. § 1581(a) (2012) or by the U.S. Department of Commerce under
28 U.S.C. § 1581(c); and (2) in the alternative, that Plaintiff failed to state a claim upon which
relief can be granted. See Mot. Dismiss 8–25, Dec. 18, 2015, ECF No. 40. After full briefing by
the parties, the court denied Defendant’s motion to dismiss because Plaintiff demonstrated judicial
review under either 28 U.S.C. § 1581(a) or 28 U.S.C. § 1581(c) was unavailable and Plaintiff has
identified final agency action subject to challenge that is reviewable under the Administrative
Procedure Act, as amended, 5 U.S.C. § 704 (2012). See Sunpreme, 40 CIT at __, 145 F. Supp.
3d at 1283–1294.
Defendant-Intervenor argues that the court’s decision is in tension with Sandvik Steel Co.
v. United States, 164 F.3d 596 (Fed. Cir. 1998). 	SolarWorld Resp. Br. 11–12, 11 n. 5 (citing
Sandvik Steel Co. v. United States, 164 F.3d 596, 599–602 (Fed. Cir. 1998)). Defendant-
Intervenor contends that, in Sandvik, CBP interpreted the antidumping orders at issue yet the
(footnote continued)
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standards as provided under § 706 of the Administrative Procedure Act (“APA”), as
amended. 15 See 28 U.S.C. § 2640(e) (2012). Under the statute,
[t]he reviewing court shall--
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings and conclusions
found to be--
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law; . . . [or]
(C) in excess of statutory jurisdiction, authority, or limitations, or short
of statutory right.
Court of Appeals for the Federal Circuit did not perceive CBP as having acted ultra vires. 	Id.
(citing Sandvik Steel Co. v. United States, 164 F.3d 596, 599–602 (Fed. Cir. 1998)).
Sandvik is inapposite, and Defendant-Intervenor’s reading misstates the holding. In the
two cases that were consolidated in Sandvik, CBP concluded based upon the plain language that
plaintiff’s goods fell within the scope of the antidumping order. See Sandvik, 164 F.3d at 598. In
each case, the importer had forgone a scope ruling, waited for the goods to liquidate and then
protested the liquidation. Id. The Court of Appeals for the Federal Circuit held that an importer
cannot challenge the applicability of antidumping duty orders by challenging CBP’s denial of a
protest under 19 U.S.C. § 1581(a). 	Id. at 601–2. 	The Court of Appeals held to bring a suit
challenging the applicability of antidumping duty orders to a party’s imports the party must seek
a scope determination from Commerce, which can be reviewed in under 19 U.S.C. § 1581(c).
See id. at 602. In Sunpreme, the court held CBP failed to give effect to all of the scope language
and could not have found Plaintiff’s products fell within the scope, including exclusions, without
engaging in an interpretive act. Sunpreme, 40 CIT at __, 145 F. Supp. 3d at 1286.
Defendant-Intervenor also argues that, in Xerox Corp. v. United States, 289 F.3d 792
(Fed. Cir. 2002), the Court of Appeals for the Federal Circuit left room for CBP to interpret an
antidumping order while still acting within its ministerial role. SolarWorld Br. 13 (citing Xerox Corp.
v. United States, 289 F.3d 792, 795 (Fed. Cir. 2002)). 	SolarWorld misconstrues the holding in
Xerox as implying that CBP does not act ultra vires by interpreting an antidumping order. Id. at
12–13 (citing Xerox, 289 F.3d at 795). In Xerox, the Court of Appeals held that the scope of the
antidumping duty order unambiguously did not cover plaintiff’s merchandise, but CBP made a
factual error in finding the merchandise subject to the antidumping order. Xerox, 289 F.3d at 795.
Therefore, the court held that the misapplication of an unambiguous antidumping order, as
opposed to the erroneous interpretation of an ambiguous order, is a protestable decision under
19 U.S.C. § 1514(a)(2). 	Id. 	Nothing in Xerox implies, as SolarWorld suggests, that CBP acts
within its authority where it interprets an ambiguous antidumping order.
15 Further references to the Administrative Procedure Act, as amended, are to the relevant
provisions of Title 5 of the United States Code, 2012 edition.
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5 U.S.C. § 706(2)(A), (C). 	Under the arbitrary and capricious standard, courts consider
whether the agency “‘entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the evidence before the agency,
or [the decision] is so implausible that it could not be ascribed to a difference in view or
the product of agency expertise.’” Alabama Aircraft Indus., Inc. v. United States, 586 F.3d
1372, 1376 (Fed. Cir. 2009) (quoting Motor Vehicle Ass’n v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983)).
DISCUSSION
I. 	CBP Acted Beyond the Scope of Its Authority
Plaintiff contends that CBP acted contrary to law because it interpreted ambiguous
scope language in the Orders to decide that Plaintiff’s merchandise fell within the scope
of the Orders. Sunpreme Br. 14. Defendant counters that CBP preliminarily determined,
based solely upon its review and testing of the merchandise, that Sunpreme’s products
possess the physical characteristics of the merchandise described by the plain language
of the Orders. 16 Def.’s Resp. Br. 13. The Orders exclude “thin film photovoltaic products.”
16 Defendant repeatedly characterizes CBP’s determination as preliminary. Def.’s Resp. Br. 1, 2,
8, 10, 11, 13, 22, 23. 	For purposes of the court’s review under 5 U.S.C. § 706 (2012), CBP’s
action is a final agency action. Agency action is final where it is neither tentative nor interlocutory
and marks the consummation of the agency’s process and where as a result “‘legal consequences
will flow.’” Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (citations omitted).
As the court previously held in deciding Defendant’s motion to dismiss, CBP has limited
decision-making responsibilities in order to administer AD/CVD Orders. Sunpreme, 40 CIT at __,
145 F. Supp. 3d 1292. Congress has charged CBP only with deciding whether the language of
the 	Orders, 	as 	explained 	in 	Commerce’s 	instructions, 	includes 	merchandise 	with 	the
characteristics implicated by the plain language of the Orders. See Xerox Corp. v. United States,
289 F.3d 792, 794–95 (Fed. Cir. 2002). CBP’s decision to require Plaintiff to enter its goods as
subject to the Orders or otherwise be denied entry left nothing for CBP to decide to administer
(footnote continued)
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See CVD Order, 77 Fed. Reg. at 73,017; AD Order, 77 Fed. Reg. at 73,018. Nothing in
the common sense meaning of the exclusionary language suggests that it is meant to
cover certain thin film products. See CVD Order, 77 Fed. Reg. at 73,017; AD Order, 77
Fed. Reg. at 73,018. Defendant does not contest the presence of a thin film of amorphous
silicon in Plaintiff’s products. Def.’s Resp. Br. 13. CBP could not place the goods within
the scope of the Orders without interpreting the Orders to exclude certain photovoltaic
products with thin films of amorphous silicon. 	Therefore, CBP acted in excess of its
authority by requiring Plaintiff to enter its goods as subject to the Orders.
Only Commerce has the power to interpret antidumping and countervailing duty
orders. 	See Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1096—97 (Fed. Cir.
2002); Xerox Corp. v. United States, 289 F.3d 792, 794–95 (Fed. Cir. 2002) (discussing
Sandvik Steel Co. v. United States, 164 F.3d 596, 600 (Fed. Cir. 1998)); see also Section
516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(2)(B)(vi); 17 19 U.S.C.
§ 1677(25); 19 C.F.R. § 351.225. 	Congress made clarifications of the scope of an
AD/CVD order by Commerce reviewable. 18 See 19 U.S.C. § 1516a(2)(B)(vi); 19 U.S.C.
the orders. In addition, discernible consequences flowed from CBP’s determination for Plaintiff.
CBP cannot evade review of a determination from which legal consequences flow for Plaintiff
while subjecting Plaintiff to cash deposit requirements during its investigative process. If CBP’s
investigation of the nature of the merchandise is ongoing, then CBP has yet to determine that the
merchandise possesses the physical characteristics of merchandise covered by the Orders. If
CBP has not determined that the goods possess the physical characteristics of subject
merchandise, then CBP lacks authority to require cash deposits. See Xerox, 289 F.3d at 794–
95; see also 19 C.F.R. § 144.38(d)–(e).
17 Further citations to the Tariff Act of 1930, as amended, are to the relevant provision of the U.S.
Code, 2012 edition.
18 Congress has empowered Commerce to provide the scope of antidumping and countervailing
duty orders. See 19 U.S.C. § 1516a(2)(B)(vi); 19 U.S.C. § 1677(25). “The 1979 Act transferred
(footnote continued)
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§ 1677(25). 	Therefore, if there is a question as to the meaning of the language of an
AD/CVD order, it is for Commerce to answer that question.
CBP, incident to its function of fixing the amount of duties chargeable, must make
factual findings to determine “what the merchandise is, and whether it is described in an
order.” 	See Xerox, 289 F.3d at 794. 	CBP has no authority to modify the scope of the
Orders. Cf. Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994)
(CBP follows Commerce’s instructions in assessing and collecting duties, and its “merely
ministerial role in liquidating antidumping duties” does not allow it to modify Commerce’s
determinations, their underlying facts, or their enforcement). 	CBP’s role is relegated to
implementing Commerce’s instructions. 	Cf. Mitsubishi, 44 F.3d at 977, Koyo Corp. of
U.S.A. v. United States, 497 F.3d 1231, 1242 (Fed. Cir. 2007).
CBP’s 	laboratory 	testing 	indicated 	the 	presence 	of 	thin 	films 	in 	Plaintiff’s
merchandise. 	See Laboratory Report # LA20150736 at 000534–000535, CD 21, CBP
AR 000534–000657; Laboratory Report # SF20151545 at 000658, CD 22, CBP AR
000658-000700 (Sept. 30, 2015). 	Plaintiff brought the potential applicability of the thin
film exclusion to the attention of CBP on September 19, 2014 in its response to CBP’s
request for information. See Request for Information at 000039.
the administration of the antidumping laws from the United States Treasury Department to
Commerce.” J.S. Stone, Inc. v. United States, 27 CIT 1688, 1691 (2003) aff'd, 111 F. App'x 611
(Fed. Cir. 2004) (citing Comm. To Preserve Am. Color Television v. United States, 706 F.2d 1574,
1577 (Fed.Cir.1983); Reorg. Plan No. 3 of 1979, § 5(a)(1)(c), 44 Fed. Reg. 69,273, 69,275 (Dec.
3, 1979)). Commerce has also been given the power to interpret and clarify those orders. See
Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1096—97 (Fed. Cir. 2002). 	Commerce
instructs CBP to carry out those orders. Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973,
977 (Fed. Cir. 1994).
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CBP determined that Plaintiff’s merchandise was included in the scope of the
Orders by interpreting the exclusion to apply only to certain photovoltaic products with
thin films produced from amorphous silicon. 	The scope language does not define the
term thin film products. 19 See CVD Order, 77 Fed. Reg. 73,017, AD Order, 77 Fed. Reg.
73,018. 	Defendant does not contest the presence of a thin film of amorphous silicon in
Plaintiff’s products. 	Def.’s Resp. Br. 13. 	Thus, CBP cannot have given effect to the
exclusion without concluding that the Orders are meant to include at least some
photovoltaic 	cells 	with 	thin 	films 	produced 	from 	amorphous 	silicon. 	Any 	such
interpretation must be set aside under 5 U.S.C. § 706(2)(C) as contrary to law. 20
19 Defendant-Intervenors argue that CBP’s finding that Plaintiff’s merchandise is subject to the
Orders is wholly supported by Commerce’s final ruling in the scope proceeding. SolarWorld Br.
20–21. 	First, whether or not CBP interpreted the language of the Orders correctly does not
excuse the fact that CBP lacks the authority to interpret the Orders. 	Cf. Mitsubishi, 44 F.3d at
977. Second, although Defendant-Intervenors imply that Commerce interpreted the exclusion to
mean that the presence of thin film layers is insufficient to make photovoltaic cells thin film
products in prior scope determinations, see id. (citing SolarWorld Br. Att 1 (“Triex Scope Ruling”),
that interpretation by Commerce occurred well after CBP’s determination on June 17, 2016. See
Triex Scope Ruling at 1. Therefore, CBP cannot have relied upon Commerce’s determination to
support the inapplicability of the exclusion for thin film products produced from amorphous silicon
to Plaintiff’s products.
20 Defendant argues that CBP had good reason to conclude that Plaintiff’s products exhibited
physical characteristics that are described by the Orders because CBP sought clarification from
Commerce on the meaning of the scope language and followed Commerce’s advice. Def.’s Resp.
Br. 15 (citing ACE Inquiry # [[ 	]]). As an initial matter, CBP made its determination to begin
requiring Plaintiff to file its entries as type “03” entries more than seven weeks prior to these
communications with Commerce. 	See Notices of Action at 00001; ACE Inquiry # [[ 	]].
Moreover, Commerce’s guidance to CBP did not indicate that Plaintiff’s product is covered by the
Orders. 	See ACE Inquiry # [[ 	]]. 	Commerce advised CBP that “a determination as to
whether this product is covered by [the Orders] would need to be made by the Department of
Commerce in a scope ruling which can be requested by the importer or exporter.” Id. CBP cannot
have given effect to the exclusionary language in the orders without interpreting the Orders to
cover only certain thin film products, which is not indicated by the common import of the plain
terms of the exclusion. See CVD Order, 77 Fed. Reg. 73,017, AD Order, 77 Fed. Reg. 73,018.
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In order to act within its designated role, CBP must be able to point to clear
language in the scope of the Orders, including any exclusions, that places goods within
the scope based upon observable facts. See Xerox, 289 F.3d at 794–95. Where factual
determinations alone do not permit CBP to determine that a good falls within exclusionary
language in an order, the good must be considered outside of the scope until Commerce
interprets the order and clarifies that the merchandise should be included. 21 	See id. (to
protect Commerce’s administrative authority, Customs should not decide whether an
antidumping order covers particular products in the first instance).
Defendant argues that “CBP’s preliminary determination to apply the Orders to
Sunpreme’s merchandise was based on the fact that the merchandise possessed the
physical characteristics that are described by the plain terms of the scope of the order,
notwithstanding the presence of the thin film.” Def.’s Resp. Br. 13. Defendant contends
that the presence of a layer of amorphous silicon does not
necessarily preclude the application of the orders because the description
clearly states that crystalline photovoltaic cells are included whether or not
the cell “has undergone other processing, . . . and/or the addition of
21 Commerce’s regulations do not permit it to impose antidumping cash deposits where the scope
of an AD/CVD order is ambiguous until Commerce has acted to resolve that ambiguity. See 19
C.F.R. § 351.225(l)(1)(3); AMS Assocs., Inc. v. United States, 737 F.3d 1338, 1344 (Fed. Cir.
2013) (holding that where Commerce clarifies the scope of an existing AD duty order that has an
unclear scope, Commerce may not act on a retrospective basis to impose cash deposits before
Commerce has resolved that ambiguity). In its scope determination, Commerce determined that
“the mere existence of thin film in a solar module does not constitute an excluded thin film
product.” Scope Determination at 17. Commerce further relied upon the petitions under 19 C.F.R.
§ 351.225(k)(1) to find that “thin film products do not use crystalline silicon.” 	Id. 	Commerce
therefore interpreted the term “thin film products” not to include products having an amorphous
silicon thin film element in a product containing a doped (i.e., active) silicon wafer. Id. Commerce
attached greater significance to the crystalline silicon component of Sunpreme’s cells over the
thin film component. Id. Without discussing the reasonableness of Commerce’s determination,
nothing in the common import of the language of the Orders attaches any such meaning to the
term “thin film products.”
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materials . . . to collect and forward the electricity that is generated by the
cell.”
Def.’s Resp. Br. 13–14 (quoting Message No. 2346303 at 000012, CD 2, CBP AR
000011–000019 (Dec. 11, 2012); Message No. 2356306 at 000021, CD 3, CBP AR
000020–000033 (Dec. 21, 2012)). However, Defendant’s attempt to characterize the thin
films in Plaintiff’s product as “an addition of materials . . . to collect and forward the
electricity that is generated by the cell” is misplaced. 	Even if the layers of amorphous
silicon identified were additional materials used to “collect and forward the electricity that
is generated by” Plaintiff’s cell, thin film photovoltaic products produced from amorphous
silicon are nonetheless excluded by the scope language. See CVD Order, 77 Fed. Reg.
73,017, AD Order, 77 Fed. Reg. 73,018. 	In order to conclude that the thin films in
Plaintiff’s merchandise were not thin film products, CBP had to act beyond its authority
by interpreting the term “thin film products.” 	Commerce must clarify whether the words
of the Orders reach these products. See Duferco, 296 F.3d at 1096—97.
Defendant also argues that CBP may act to protect the revenue of the United
States and collect cash deposits until all ambiguities in the Orders are resolved. 	Def.’s
Resp. Br. 17–18. The court disagrees. As the court observed in Sunpreme, “CBP cannot
interpret ambiguous words to place goods within the scope of an antidumping or
countervailing duty order.” 22 Sunpreme, 40 CIT at __, 145 F. Supp. at 1289. At the point
22 The court explained that several points support this reading of antidumping and countervailing
duty regime:
First, the statutory scheme supports this view. 	After Commerce and the
ITC make the requisite affirmative dumping and injury findings, Commerce “shall
(footnote continued)
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CBP realized the exclusionary language of the Orders would on its face exclude Plaintiff’s
goods, it could not place the goods within the scope of the Orders until Commerce clarified
issue an antidumping duty order under section 1673e(a) of this title.” 	19 U.S.C.
§ 	1673d(c)(2). 	Commerce 	is 	charged 	with 	writing 	the 	antidumping 	or
countervailing duty order to include “a description of the subject merchandise, in
such 	detail 	as the administering 	authority deems 	necessary.” 	19 U.S.C.
§ 1673d(c)(2). If Commerce writes the words in an antidumping or countervailing
duty order in such general terms such that CBP is unable to determine whether
goods are included or excluded from the scope on the basis of clear facts
implicated by the plain language of the Orders, then it is up to Commerce to clarify
the meaning of its scope language. Cf. 19 C.F.R. § 351.225(a) (stating that issues
will arise “because the descriptions of subject merchandise . . . must be written in
general terms” and noting that when such issues arise “the Department issues
‘scope rulings’ that clarify the scope of an order or suspended investigation with
respect to particular products.”). 	Given Commerce’s role in crafting the scope
language and in scope determinations, see 19 U.S.C. §1673d(c)(2); 19 C.F.R.
§ 351.225, where the language contained in the Orders is insufficient to permit
CBP to determine if goods are in or out of the Orders based upon factual
determinations alone, CBP cannot interpret goods as falling within the scope of the
Orders until Commerce says they do.
Second, . . . Commerce’s regulations charge it with the responsibility of
interpreting ambiguous scope language when a question arises as to whether a
particular product is included within the scope of an antidumping or countervailing
duty order. 	See 19 C.F.R. § 351.225(a). 	Likewise, since the regulations permit
Commerce to act quickly to interpret the scope, see id. at §§ 351.225(d), (k)(1), it
stands to reason that goods should only be considered to fall within the scope of
antidumping and countervailing duty orders once the agency with the capacity to
interpret them has done so.
Finally, this principle is entirely consistent with the controlling precedent of
the Court of Appeals for the Federal Circuit. . . . in [AMS Assocs., Inc. v. United
States, 737 F.3d 1338, 1344 (Fed. Cir. 2013)], the Court of Appeals for the Federal
Circuit held that where there was ambiguous scope language, Commerce can only
suspend liquidation and impose cash deposits prospectively after the initiation of
a formal scope ruling. See [AMS Assocs., Inc. v. United States, 737 F.3d 1338,
1344 (Fed. Cir. 2013)]. 	Both Commerce and the Government, however, are
protected from unmeritorious claims that scope language is ambiguous because
Commerce may, where it considers scope language unambiguous, avoid initiating
a formal scope ruling under 19 C.F.R. § 351.225(d). See id. (“[i]mporters cannot
circumvent antidumping orders by contending that their products are outside the
scope of existing orders when such orders are clear as to their scope”). Commerce
need not “initiate a formal scope inquiry when the meaning and scope of an existing
antidumping order is clear.” Id. (citing Huayin Foreign Trade Corp (30) v. United
States, 322 F.3d 1369, 1378–79 (Fed. Cir. 2003)).
Sunpreme, 40 CIT at __, 145 F. Supp. 2d at 1289.
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the Orders. Only Commerce may clarify and interpret its antidumping and countervailing
orders. See Duferco, 296 F.3d at 1096—97; Xerox, 289 F.3d at 794; Koyo, 497 F.3d at
1241–42. Defendant’s position would render CBP’s ultra vires interpretation of the scope
language unreviewable. See Sunpreme, 40 CIT at __, 145 F. Supp. 3d at 1286. It would
also allow CBP to subject Plaintiff’s entries to cash deposits before Commerce may do
so. 23 See AMS Assocs., Inc. v. United States, 737 F.3d 1338, 1344 (Fed. Cir. 2013). It
is inconceivable that the regulatory scheme would permit CBP, which should defer to
Commerce to determine the scope in the first instance and which is charged with
implementing Commerce’s instructions, to suspend liquidation and collect cash deposits
prior to a scope determination when Commerce itself cannot do so.
Defendant also argues that, where the scope of an AD/CVD order is unclear, the
importer has the burden to seek clarification on the scope of the Orders to determine
whether its products may be excluded. Def.’s Resp. Br. 18–22. Defendant grounds this
assignment of responsibility in an importer’s statutory obligation to use reasonable care
in providing information necessary to enable CBP to properly assess duties on the
23 When a question over whether a particular product is included within the scope of an
antidumping or countervailing duty order arises, Commerce “issues ‘scope rulings’ that clarify the
scope of an order or suspended investigation with respect to particular products.” 	19 C.F.R.
§ 351.225(a). If Commerce cannot determine that a product falls within the scope language of
antidumping or countervailing duty orders “based solely upon the application,” under 19 C.F.R.
§ 351.225(d), Commerce will proceed with a formal scope inquiry, see 19 C.F.R. §§ 351.225(e).
Where Commerce initiates a formal scope inquiry, as it has did here, see Final Scope
Determination at 5, Commerce will not suspend liquidation or order the collection of cash deposits
until Commerce issues a preliminary or final scope ruling, whichever occurs earlier, that the
antidumping or countervailing duty order includes the goods. See 19 C.F.R. § 351.225(l)(2); id.
at § 351.225(l)(3); AMS Assocs., Inc. v. United States, 737 F.3d 1338, 1344 (Fed. Cir. 2013)
(holding that under 19 C.F.R. § 351.225(l)(2), where Commerce clarifies existing scope language
that is unclear, the imposition of cash deposits can only take effect on or after the initiation of the
scope inquiry).
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merchandise, collect accurate statistics with respect to the merchandise, and determine
whether any other requirement of law is met. See Def.’s Resp. Br. 19 (citing 19 U.S.C.
§ 1484(a)(1)). Nothing in the statute provides that importers must seek clarification where
the language of the order prima facie excludes their products. 	See 19 U.S.C. § 1484.
Moreover, Commerce’s regulations allow any interested party to apply for a scope ruling.
19 C.F.R. § 351.225(c)(1). 	Commerce’s advice to CBP recognized this fact when it
advised CBP that “a determination as to whether this product is covered by antidumping
duty order A-570-979 and countervailing duty order C-570-980 would need to be made
by the Department of Commerce in a scope ruling which can be requested by the importer
or exporter.” ACE Inquiry # [[ 	]].
Defendant also grounds its assignment of responsibility to an importer to seek
clarification of any scope language ambiguity in Sandvik and Xerox. See Def.’s Resp. Br.
21 (citing Sandvik, 164 F.3d at 598–600; Xerox, 289 F.3d at 795). 	Neither case holds
that an importer must seek clarification where the language of the order prima facie
excludes their products. In Xerox, the Court of Appeals for the Federal Circuit held that
a scope determination by Commerce was unnecessary because plaintiff’s merchandise
was facially outside the scope of the antidumping order. 	Xerox, 289 F.3d. at 795. 	It
follows from the holding in Xerox that, where factual determinations alone do not permit
CBP to determine whether a good is within the scope or outside the scope of the Orders,
goods must be considered outside of the scope until Commerce clarifies or interprets the
Orders. Cf. Xerox, 289 F.3d at 795. Where, as here, CBP lacks authority to determine
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goods to be subject to an order, it follows that the domestic party, not the importer, would
have a greater interest in seeking a scope ruling.
Sandvik 	is 	inapposite. 	In 	Sandvik, 	plaintiffs 	failed 	to 	challenge 	CBP’s
determination that its goods were subject to antidumping orders until after liquidation.
Sandvik, 164 F.3d at 598. 	The question confronted by the Court of Appeals for the
Federal Circuit was whether this Court had jurisdiction under 28 U.S.C. § 1581(a) to
review CBP’s decision to include the merchandise in the scope of the antidumping order
where the plaintiffs failed to seek timely scope determinations. Sandvik, 164 F.3d at 601.
In Sandvik, the Court of Appeals in fact affirmed that it is Commerce that makes scope
determinations, and the mechanism to review those determinations is an action under 28
U.S.C. § 1581(c). See id. In Sandvik, the court’s holding did not assign responsibility to
an importer to seek a scope ruling where the language of the order prima facie excludes
their products. In fact, in Xerox, the Court of Appeals for the Federal Circuit clarified its
holding in Sandvik. See Xerox, 289 F.3d at 795. In Xerox, the Court of Appeals held that
Customs should not make a determination as to whether goods are covered in the first
instance where the common import of the scope language does not permit CBP to place
the goods within the scope based upon observable physical characteristics of the
products. See id. (discussing Sandvik, 164 F.3d 600). It follows that, where CBP cannot
place goods within the plain terms of an order, Commerce must interpret the ambiguous
terms before CBP can demand cash deposits.
Defendant believes the court’s standard leaves it unclear when CBP can determine
goods are in scope where an interested party contends there is ambiguity in an AD/CVD
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order. 	Here, the Orders contained an exclusion for thin film photovoltaic products.
Defendant does not deny the exclusion exists, and CBP did not point to observable
physical characteristics of Plaintiff’s products that rendered them outside the scope of the
exclusionary language. 	CBP’s determination that Plaintiff’s merchandise were not thin
film photovoltaic products was therefore the result of an interpretation that thin film
photovoltaic 	products 	are 	not 	equivalent 	to 	photovoltaic 	products 	with 	thin 	films.
Defendant points to no language in the statute or in the regulations that militates a
different outcome. None of the policy issues raised by Defendant is convincing.
Defendant and Defendant-Intervenor oversimplify the court’s holding in Sunpreme,
implying that any conceivable ambiguity identified by an importer would prevent CBP from
collecting cash deposits on its merchandise. 24 	See Def.’s Resp. Br. 23; SolarWorld Br.
16. Where merchandise is prima facie covered by both the inclusive and exclusive words
of the order, CBP may suspend liquidation and collect cash deposits even in a case where
an importer claims there is ambiguity in an order. In this case, even if the merchandise
was prima facie a crystalline silicon photovoltaic cell, it also had thin films. See Laboratory
Report # LA20150736 at 000534–000535, CD 21, CBP AR 000534–000657. Without a
definition of the term “thin film products,” CBP could not have given effect to the
exclusionary language without concluding some products with thin films were not thin film
24 On a related note, Defendant and Defendant-Intervenor also raise concerns that removing
CBP’s ability to collect cash deposits and giving an importer an avenue to challenge CBP’s
determinations under 28 U.S.C. § 1581(i) would give the importer no incentive to seek a scope
ruling to resolve ambiguities in scope language and would stand to encourage importers to delay
or forgo scope rulings. See Def.’s Resp. Br. 23; SolarWorld Br. 16–17.
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products. It is this interpretation of the exclusion, not its prima facie meaning, that allowed
CBP to conclude Plaintiff’s merchandise fell outside of the exclusion.
Defendant worries that this standard would leave certain scope issues unresolved
because “CBP does not have the regulatory ability or statutory burden to seek a scope
ruling from Commerce when it is presented with issues involving the scope of an order.”
Def.’s Resp. Br. 24. 	Yet, nothing prevents CBP from bringing scope issues to the
attention 	of 	Commerce, 	which 	can 	self-initiate 	a 	scope 	inquiry. 	See 	19 	C.F.R.
§ 351.225(b). 	Moreover, Commerce’s regulations permit it to act quickly to determine
that a product falls within the scope of an order based solely upon the application or based
on the (k)(1) factors where the ambiguity in scope language may be easily resolved. See
19 C.F.R. § 351.225(d). 25
Defendant-Intervenor argues domestic interested parties are not in a position to
police importers’ attempts to skirt the otherwise proper application of orders by relying
upon subjective ambiguities. 	SolarWorld Br. 16. 	Therefore, Defendant-Intervenor
believes that CBP should have the power to err on the side of protecting revenue by
placing merchandise within the scope of the order. Id. The burden, and the incentive, to
seek a scope ruling would then shift to the importer. 	See id. 	Yet, any interested party
and Commerce itself, may request a scope ruling. 	See 19 C.F.R. §§ 351.225(b), (c).
Defendant and Defendant-Intervenor point to nothing in the statute or in Commerce’s
25 Finally, if the scope regime as set forth in the statute and the regulations is less than ideal, then
it is for Congress or the agencies to remedy those shortcomings. It is not for the court to speculate
on a mechanism for the agencies to resolve such shortcomings. The court reviews the statutory
and regulatory framework as it exists.
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regulations regarding scope rulings that indicates the burden must always fall on
importers. 	Moreover, 	in 	this 	case 	the 	prima 	facie 	language 	excludes 	Plaintiff’s
merchandise, and therefore the burden should not fall upon the importer to clarify the
Orders.
Defendant contends that deciding whether scope language is ambiguous is
subjective. Def.’s Resp. Br. 24. Admittedly, parties can always make a subjective claim
that the language is ambiguous, but doing so does not make unambiguous language
ambiguous. More importantly, the scope language here did not contain a mere ambiguity.
It contained exclusionary language that prima facie excluded thin film photovoltaic
products. 	Although it is possible that this term could have been clarified to include
Plaintiff’s goods, it is Commerce’s job to clarify, not CBP’s. 	Commerce’s regulations
specifically provide for Commerce to clarify the meaning of scope language without
initiating a “formal scope inquiry when the meaning and scope of an existing antidumping
order is clear.” 	See 19 C.F.R. § 351.225(d); see also AMS Assocs., 737 F.3d at 1344
(citing Huayin Foreign Trade Corp (30) v. United States, 322 F.3d 1369, 1378–79 (Fed.
Cir. 2003)). Where CBP can match physical characteristics of the merchandise with the
common import of the language of an order, CBP may act within its authority to collect
cash deposits. See Xerox, 289 F.3d at 795. Where CBP cannot, Commerce must resolve
the ambiguity before CBP can collect cash deposits. 	See Xerox, 289 F.3d at 795; cf.
Mitsubishi, 44 F.3d at 977.
Defendant argues that if the scope is ambiguous, it is equally unclear whether
imported merchandise is in scope or out of scope. 	Def.’s Resp. Br. 25. 	Defendant
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contends that, by allowing merchandise to enter as type “01” where the scope language
is ambiguous, CBP would implicitly be concluding that merchandise is not covered by an
order. Defendant’s argument is contradicted by the statutory scheme. The court stated
in Sunpreme:
Commerce is charged with writing the antidumping or countervailing
duty order to include “a description of the subject merchandise, in such
detail 	as 	the 	administering 	authority 	deems 	necessary.” 	19 	U.S.C.
§ 1673d(c)(2). 	If Commerce writes the words in an antidumping or
countervailing duty order in such general terms such that CBP is unable to
determine whether goods are included or excluded from the scope on the
basis of clear facts implicated by the plain language of the Orders, then it is
up to Commerce to clarify the meaning of its scope language. Cf. 19 C.F.R.
§ 351.225(a) (stating that issues will arise “because the descriptions of
subject merchandise . . . must be written in general terms” and noting that
when such issues arise “the Department issues ‘scope rulings’ that clarify
the scope of an order or suspended investigation with respect to particular
products.”)
Sunpreme, 40 CIT at __, 145 F. Supp. 3d at 1288. Therefore, merchandise only comes
within the scope of an order when Commerce, either in the language of the order or in a
subsequent scope ruling interpreting ambiguous language, says the merchandise comes
within the scope of an order.
Defendant implies that Plaintiff, in filing its action under 28 U.S.C. § 1581(i),
effectively seeks a preemptive review of Commerce’s scope determination before
Commerce acted. 26 	See Def.’s Resp. Br. 25. 	Defendant’s objection misses the mark.
26 On a related note, Defendant-Intervenor argues that the court’s holding would lead to a
significant increase in litigation under 28 U.S.C. § 1581(i). SolarWorld Br. 17 n.10. As an initial
matter, 	the 	court 	believes 	this 	assessment 	depends 	upon 	Defendant-Intervenor’s
oversimplification of the court’s holding here. Where merchandise is prima facie covered by an
order, and not excluded by the plain meaning of any exclusionary language, CBP may suspend
(footnote continued)
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The court has not reviewed Commerce’s interpretation of the scope language, but rather
CBP’s determination to begin collecting cash deposits. 	As already discussed, CBP’s
determination as to whether Plaintiff’s merchandise is subject to the Orders was final, and
thus reviewable under 5 U.S.C. § 706, when it required Plaintiff to post cash deposits.
On a related note, Defendant argues that CBP could not know whether it is acting
beyond the scope of its authority until Commerce decides to initiate a scope inquiry. See
Def.’s Resp. Br. 25. 	However, where CBP can conclude that a product falls within the
words of the order, both the affirmative scope language and any exclusions, CBP properly
requires an importer to enter its goods as subject to an order. 	See Xerox, 289 F.3d at
794–95. 	In such a case, the burden falls upon the importer to show that the language
requires clarification to properly reflect the scope of the orders. The language of an order
either clearly instructs CBP or it does not. 	Whether it does so comes down to whether
CBP can determine that merchandise falls within the common meaning of the scope
language based upon observable physical characteristics.
liquidation and collect cash deposits even in a case where an importer claims there is ambiguity
in an order. Under such circumstances, an importer would have no available avenue for review
under § 1581(i). 	Moreover, Defendant-Intervenor’s conception of the regulatory regime would
effectively deny importers an avenue to review any interpretation of scope language by CBP, no
matter how wrong-headed, and subject the importer to cash deposits while the matter is
adjudicated. 	That would also permit CBP to subject imports to cash deposits under scope
language before Commerce may do so. 	See 19 C.F.R. § 351.225(l)(3); AMS Assocs., Inc. v.
United States, 737 F.3d 1338, 1344 (Fed. Cir. 2013) (holding that under 19 C.F.R. § 351.225(l)(2),
where Commerce clarifies existing scope language that is unclear, the imposition of cash deposits
can only take effect on or after the initiation of the scope inquiry).
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II. 	CBP Lacked Authority to Suspend Liquidation and Order the Collection of
Cash Deposits Prior to Commerce’s Initiation of a Scope Inquiry
Plaintiff argues that CBP lacked authority to suspend liquidation and order the
collection of its cash deposits prior to the initiation of a scope inquiry by Commerce.
Sunpreme Br. 16–17 (citing AMS Assocs., 737 F.3d at 1344). Specifically, Plaintiff argues
Commerce’s regulation prevents suspension of liquidation and collection of cash deposits
prior to the initiation of a scope inquiry where CBP must interpret ambiguous scope
language to determine a product falls within the scope. Sunpreme Br. 16–17 (citing AMS
Assocs., 737 F.3d at 1344). Defendant argues that, when entries are already suspended,
“Commerce has the authority to order that suspension continue, regardless of when the
scope inquiry was initiated.” Def.’s Resp. Br. 27 (citing 19 C.F.R. §§ 351.225(l)(1), (3)).
The court concludes that CBP acted in excess of its authority in suspending liquidation
on Plaintiff’s entries prior to initiation of Commerce’s scope inquiry. 	Commerce’s
regulations 	must 	presume 	suspension 	of 	liquidation 	is 	lawful. 	See 	19 	C.F.R.
§§ 351.225(l)(1), (3). 	Commerce’s regulation cannot reasonably be read to permit an
ultra vires suspension of liquidation to continue.
When Commerce conducts a scope inquiry,
and the product in question is already subject to suspension of liquidation,
that suspension of liquidation will be continued, pending a preliminary or
final scope ruling, at the cash deposit rate that would apply if the product
were ruled to be included within the scope of the order.
19 C.F.R. § 351.225(l)(1). Once Commerce issues a final scope ruling to the effect that
the product is included within the scope of the order,
Any suspension of liquidation under paragraph (l)(1) . . . of this section will
continue. Where there has been no suspension of liquidation, [Commerce]
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will instruct [CBP] to suspend liquidation and to require a cash deposit of
estimated duties, at the applicable rate, for each unliquidated entry of the
product entered, or withdrawn from the warehouse, for consumption on or
after the date of initiation of the scope inquiry.
19 C.F.R. § 351.225(l)(3). In AMS Assocs., the Court of Appeals for the Federal Circuit
held that, where an unclear order renders a product not subject to an existing order and
Commerce clarifies ambiguous scope language to determine that the merchandise is
subject to the antidumping order, “the suspension of liquidation and imposition of
antidumping cash deposits may not be retroactive but can only take effect ‘on or after the
date of the initiation of the scope inquiry.’” AMS Assocs., 737 F.3d at 1344 (citing identical
language in 19 C.F.R. § 351.225(l)(2), as the language quoted above in 19 C.F.R.
§ 351.225(l)(3)). 	Although in AMS Assocs., Commerce issued corrected liquidation
instructions explicitly instructing CBP to suspend liquidation retroactively, see AMS
Assocs., 737 F.3d at 1341, the Court of Appeals’ holding barring retroactive application
of Commerce’s findings did not depend upon Commerce taking such additional action.
See id. at 1344.
Here, CBP could not determine whether Plaintiff’s merchandise was within the
scope of the Orders based solely upon the words or the Orders and the physical
characteristics of the merchandise. Therefore, Plaintiff’s goods were outside of the scope
of the Orders until Commerce interpreted the ambiguous scope language to the effect
that Plaintiff’s products were subject to the Orders because CBP lacks the authority to
interpret ambiguous scope language. 	See Xerox, 289 F.3d at 794–95; see also Final
Scope Determination at 18. Since Commerce initiated its scope inquiry on December 30,
2015, see Final Scope Determination at 2, Commerce’s regulations only permitted
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Commerce to suspend liquidation and collect cash deposits prospectively from the date
of initiation of the scope inquiry. 	19 C.F.R. § 351.225(l)(3); AMS Assocs., 737 F.3d at
1344.
Defendant points to no authority other than CBP’s determination to require Plaintiff
to enter its merchandise as subject to the orders for the collection of cash deposits and
suspension of liquidation on Plaintiff’s entries. 	Defendant and Defendant-Intervenor
argue that, unlike in AMS Assocs., here Sunpreme’s entries were already suspended
prior to the date Commerce initiated its scope inquiry. 	Def.’s Resp. Br. 26; SolarWorld
Resp. Br. 26–27. 	Therefore, Defendant and Defendant-Intervenor interpret 19 C.F.R.
§§ 351.225(l)(1) and (3) to permit the suspension of liquidation to continue and the
collection of cash deposits on all entries for which liquidation was suspended. 	Def.’s
Resp. Br. 26 (citing 19 C.F.R. §§ 351.225(l)(1), (3)); SolarWorld Resp. Br. 24–27. (citing
19 C.F.R. §§ 351.225(l)(1), (3)). However, Commerce’s regulation cannot reasonably be
interpreted to permit the suspension of liquidation and collection of cash deposits to
continue where they resulted from an ultra vires interpretation of the scope language. To
do so would be to permit CBP to collect cash deposits and suspend cash deposits where
Commerce cannot. See 19 C.F.R. §§ 351.225(l)(1), (3); AMS Assocs., 737 F.3d at 1344.
Such an interpretation is unreasonable because it would validate CBP’s ultra vires
interpretation and permit the circumvention of Commerce’s regulations by allowing CBP
to require a party to enter goods as subject to the Orders before Commerce has
interpreted ambiguous scope language. Nor can either portion of Commerce’s regulation
reasonably be interpreted to permit Commerce to require cash deposits prior to the date
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of initiation of the scope inquiry merely because CBP suspended liquidation before that
date without authority to do so. 	CBP’s purported suspension of liquidation was void ab
initio. Commerce could not extend the suspension of liquidation on entries that were not
administratively suspended.
Defendant argues that it may liquidate all unliquidated entries pursuant to its final
scope ruling regardless of when Commerce issued its final scope ruling. See Def.’s Resp.
Br. 27–28 (citing Ugine & ALZ Belgium v. United States, 551 F.3d 1339, 1349 (Fed. Cir.
2009)). Ugine is inapposite, and Defendant misconstrues its holding. In Ugine, the Court
of Appeals for the Federal Circuit held, on narrow grounds, that Commerce may not
impose antidumping duties on unliquidated entries it were not subject to an antidumping
duty order merely because no objection was raised during the course of a subsequent
administrative review. 27 See id. at 1349. In Ugine, the Court of Appeals did not confront
an ultra vires interpretation of an order by CBP nor did it interpret Commerce’s scope
27 In Ugine, the AD/CVD orders in question covered stainless steel plate in coils from Belgium,
and the importers entries were entered as subject to those orders because the importer made
what it characterized as a mistake in its invoice by designating some SSPC of German origin as
being Belgian in origin. See Ugine, 551 F.3d at 1344. Suspension of liquidation occurred because
plaintiff appealed the results of Commerce’s CVD administrative review, claiming it erroneously
believed at the time that all of its goods were subject to the orders, not because of a pending
scope inquiry. See id. Plaintiff did not recognize that the company had mis-designated certain
products as Belgian in origin that it believed should have been treated as German in origin until
sometime before the fourth administrative review. See id. at 1344. During the course of the fourth
administrative review, Commerce interpreted the orders to the effect that plaintiff’s imports were
not subject to the orders because steel hot rolled in Germany and not further cold rolled in Belgium
is not Belgian in origin. 	Id. at 1345. 	Consequently, Commerce initially issued liquidation
instructions that entries entered on or after the initiation of the fourth antidumping administrate
review should be liquidated without regard to antidumping duties. 	Id. 	However, despite its
determination that products hot rolled in Germany and not further cold rolled in Belgium are not
subject to the orders, Commerce issued liquidation instructions to the effect that entries covered
by the first administrative review were subject to duties. Id.
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regulations to permit retroactive suspension of liquidation and collection of cash deposits
on entries that were suspended by CBP acting contrary to law. See id. at 1349. Plaintiff
cites no other authority allowing the collection of cash deposits and suspension of
liquidation on entries prior to the initiation of a scope inquiry on merchandise that CBP
could not determine fell within the unambiguous scope language based solely upon the
words of the orders and physical characteristics. Therefore, CBP’s purported suspension
of liquidation is void ab initio, and there is no suspension of liquidation to continue under
Commerce’s regulation.
CONCLUSION
CBP lacked authority to require Plaintiff to enter its merchandise as subject to the
Orders 	because 	its 	determination 	depended 	upon 	an 	interpretation 	of 	the 	scope
language. 	Therefore, CBP’s collection of cash deposits and suspension of liquidation
before Commerce interpreted the Orders to include Plaintiff’s merchandise was contrary
to law. As a result, there was no valid suspension of liquidation for Commerce to continue
under 19 C.F.R. §§ 351.225(l)(1) and (3). Therefore, Commerce lacks authority to order
the collection of cash deposits on entries prior to the initiation of the scope inquiry. 	All
cash deposits collected on entries prior to the initiation of the scope inquiry must be
returned to Plaintiff. Judgment will enter accordingly.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: October 11, 2016
New York, New York
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