Attached Couplers Can't Escape Dispositive Scope of Investigation, Petitioner Says
Commerce should show broad deference to the "intent of the petitioner" when assessing scope rulings, a domestic petitioner argued to the Court of International Trade on March 3. The petitioner was supporting the U.S. in cases involving antidumping and countervailing duty investigations on freight rail couplers, saying that the case’s plaintiff, an exporter, had incorrectly argued that its goods were beyond the scope of the investigation due to a substantial transformation (Wabtec Corporation v. U.S., CIT #s 23-00160, -00161).
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The petitioner, Coalition of Freight Coupler Producers, said that 19 C.F.R. 351.225(k) creates a test to determine the limits of Commerce's ability to determine scope "only if the language of the scope is not dispositive." As the language of the scope in the present case is "explicit and dispositive," Commerce should defer to the petitioner's proposed scope during the investigations.
The coalition also said that Commerce is restricted in its ability to include products in a final scope determination by the statutory framework's checks and balances "in regard to an overly broad scope due to the parallel processes and evidentiary burdens," and that "Commerce can only modify the scope if there are essentially enforcement issues, but not if it would frustrate the relief sought by the petitioner."
Exporter Wabtec argued that the scope didn't include its products due to a substantial transformation: "The scope is improper because the attachment of freight rail couplers results in a substantial transformation into freight railcars." Wabtec had previously argued that when parts are assembled into one larger product, those products are no longer subject to AD/CVD orders, likening them to the proverbial "Ship of Theseus," which asks whether an item retains its identity even after all of its parts have been replaced (see 2404230059).
However, the petitioner said that Commerce had already addressed this line of reasoning and "reasonably concluded" that freight rail couplers aren't permanently attached to the railcars and are therefore not substantially transformed, "and, thus, meet the physical description of the merchandise in the scope of these investigations."
The coalition said Commerce's determination of scope was "consistent with the statutory framework and its own regulations" and Wabtec's attempts to argue it was not were "as unavailing as they are legally unsupported."