CIT Says Commerce Engaged in Too Simple an Analysis on Composite Tile's Minor Processing in Scope Case
The Commerce Department again failed to support its inclusion of marble composite tile made by Elysium Tiles within the scope of the antidumping and countervailing duty orders on ceramic tile from China, the Court of International Trade held on March 11. Judge Jane Restani remanded Commerce's scope ruling for a second time, finding that the agency's focus on the tile's decorative features is irrelevant, and that Commerce engaged in a too-simple discussion on the additional processing the tile went through.
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Elysium's tile is made of a base layer of porcelain tile, an epoxy layer and a thin top layer of marble, while the scope covers ceramic tile made of a mixture of minerals that are fired, so the raw materials fuse to make a finished good less than 3.2 cm in "actual thickness." Commerce originally said the marble layer is a decorative feature, keeping the thickness of the product under 3.2 cm, while Elysium said the marble layer creates a "functionally different product."
In her first decision, Restani said the parties mistakenly rooted their claims in the word "decorative," noting that the scope language doesn't have "clear exclusionary language" (see 2407180023). On remand, the agency disagreed, urging the court to read the scope's language on decorative features with the "preceding sentence" that says all ceramic tile is subject to the scope "regardless of whether or not the tile is on a backing." Commerce said when the sentences "are read together, the plain language indicates that the scope covers all ceramic tile," including tile with "decorative features."
Restani rejected this claim, again emphasizing that the existence of a decorative layer itself is not relevant but how the decoration is applied. "Decoration is an undefined term," the court said. "All ceramic tile is essentially decorative." The judge said that without more language indicating that the "decorative features language was meant to cover composite tile with a marble top layer, the court concludes that the scope language is not dispositive."
Elysium argued on remand that Commerce ignores inconvenient scope language, which says that subject goods are "fired so the raw materials are fused to produce a finished good." On remand, the agency stuck with its position that a second firing isn't needed to keep the product in scope, meaning the gluing of the marble layer doesn't remove the product from the orders' scope.
The court held that Commerce failed to "point to anything that supports its reading" of this scope language "as only applying to the base porcelain layer of the tile.” Restani said the "meaning of this phrase is not clear," adding that the agency "was on track when it focused on process originally." The court said the "firing language, in context, too ambiguous to definitively support either party’s contention.”
Restani again emphasized that the real question at play is whether the process of applying the marble layer is "so intensive" that it goes beyond minor processing and creates an out-of-scope product. In its original ruling, Commerce said as long as each process is minor, there's no limit on combining the processing that would remove a product from the orders' scope. On remand, the agency changed course and said nothing in the scope shows that the language excludes ceramic tile that undergoes "extensive, significant, or specialized processing."
Commerce said it disagrees that "minor processing is dispositive of scope coverage" and that the "determinative question is whether Elysium's composite tile meets the physical description of the subject merchandise" and not the "impact of the level of processing."
The court said the agency misrepresented the court's prior opinion and engaged in too simple an analysis on the processing that Elysium's products went through. Elysium's tile isn't simply created by gluing on "decoration," as the agency said, Restani held. "Rather, the composite tile goes through a complicated process of splitting and gluing that 'requires specialized equipment, and must be conducted at a facility designed for the creation of composite tile,'" the court said.
And while Elysium "focuses on the proper inquiry" by discussing the operations that are undergone outside of China, the court said it couldn't resolve the question for either party. The court told Commerce to consider the five (k)(2) factors -- the good's physical characteristics, the ultimate buyer's expectations, the product's ultimate use, the channels of trade in which the good is sold and the way in which the product is advertised -- on remand.
David Craven, counsel for Elysium, said in an email that he and his client "look forward to the remand determination by the Department and are confident that they will be guided by the opinion of the Judge."
(Elysium Tiles v. United States, Slip Op. 25-25, CIT # 23-00041, dated 03/11/25; Judge: Jane Restani; Attorneys: David Craven of Craven Trade Law for plaintiff Elysium Tiles; Christopher Berridge for defendant U.S. government; David Spooner of Barnes & Thornburg for defendant-intervenor The Coalition for Fair Trade in Ceramic Tile)