Importers', Petitioners' and Government Counsel Talk Scope Rulings, Loper Bright

The panel, moderated by Polsinelli lawyer and former Commerce Department senior attorney Lydia Pardini, also canvassed the growing complexity of antidumping and countervailing duty scopes as they more regularly cover inputs and downstream products, as well as that complexity’s impact on importers and petitioners.

Panelists disagreed on the influence of Loper Bright on judicial scope ruling interpretation. DOJ's Joshua Kurland said he didn’t think Loper Bright would change anything; Faegre Drinker lawyer Carrie Connolly said that the decision creates an argument about the reach of scope rulings “ripe” for judicial review.

“As a formal matter, Loper Bright doesn’t apply in the scope context,” Kurland said. “But I think it would be fair to say that the ethos of Loper Bright is that it is a court, rather than an administrative agency, that is in the first instance the forum for legal determinations. So that ethos may extend beyond the realm of merely statutory interpretation to potentially regulatory interpretation.”

Nevertheless, he said that he didn’t think that ethos would have a significant impact in the scope ruling context. First, he said, scope rulings appear to be a “good candidate” for the kind of agency Loper Bright considered to have been granted “broad discretion” by Congress. Language in the 1930 Tariff Act supported this, as does the fact that there is not much specific statutory guidance in this area, he said. Further, scope rulings are not governmental regulations, he noted.

Kurland and Joshua Morey, a lawyer at Kelley Drye, also cited the recent U.S. Court of Appeals for the Federal Circuit decision in Vandewater International v. United States (see 2503060073). The court dealt with whether the scope term “butt-weld” was ambiguous, and, as it did so, it appeared to offer the same sort of deference to Commerce’s decisions, relying on the same precedent, as it had prior to Loper Bright, Morey said.

Morey cited the language of the decision: “It is a ‘low threshold’ for showing that Commerce justifiably found an ambiguity.”

Overall, Vandewater seems to follow prior cases in holding that scope rulings’ initial (k)(0) inquiries are questions of law, considered de novo, while all the subsequent determinations by Commerce are questions of fact, granted deference, Kurland said.

Connolly disagreed. By statute, Commerce has the authority to impose antidumping and countervailing duty orders on “imports.” This doesn’t necessarily include inputs or downstream products, she said, but Commerce’s interpretation of the law as such has been respected under Chevron.

This argument has been raised administratively recently, but it hasn’t yet reached the courts, she said.

Kurland argued that CAFC has previously ruled the statute grants Commerce the ability to define the term “subject merchandise.”

Connolly also discussed the difficulty importers experience complying with more complex, expansive AD/CVD scopes, particularly when they have to predict the results of Commerce’s substantial transformation analyses.

Another issue that hasn’t yet reached the Court of International Trade -- ITC injury determinations, she said, rendered it temporarily moot -- is that importers sometimes must enter products that contain different components subject to different AD/CVD orders. CBP’s computer system can’t handle it, she said.

That complexity is a result of larger, more interconnected supply chains, the panel said. Kurland and Morey also cited Commerce’s concern about the increasing number of circumvention or evasion claims; the department, he said, has chosen in a few recent investigations to adjust an order’s language relatively late in the process “to promote better coverage and administrability.” For example, it did so during an investigation of quartz countertops, he said, because the petitioners were simultaneously bringing an evasion claim.