CAFC Questions Importer's Bid to Exclude T-Series Aluminum Sheet From AD/CVD Orders
The U.S. Court of Appeals for the Federal Circuit on May 5 sharply questioned importer Valeo North America's argument that the Commerce Department improperly included its T-series aluminum sheet in the scope of the antidumping and countervailing duty orders on common alloy aluminum sheet from China. During a May 5 oral argument, Judges Todd Hughes, Richard Taranto and Kara Stoll pressed Valeo on its claim that Commerce distorted the scope language (Valeo North America v. United States, Fed. Cir. # 24-1189).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The AD/CVD orders cover 3XXX-series alloy "as designated by the Aluminum Association." The importer said the inclusion of this phrase in the orders' scope makes the numerical designation system for wrought aluminum and wrought aluminum alloys published by the Aluminum Association, dubbed the "Teal Sheets," a definitional (k)(0) source (see 2401290037). The U.S. considered the Teal Sheets a (k)(1) source, which the Court of International Trade upheld as valid, after the agency declared the scope of the orders to be ambiguous (see 2311090034).
Valeo is arguing that the Teal Sheets establish that the orders are unambiguous and only include aluminum and aluminum alloys registered by the Aluminum Association. The Teal Sheets designate aluminum grades by four numbers and group them into "series." Registered aluminum and aluminum alloys are given a number for the first digit followed by three X's. The importer said its T-series sheet is "unregistered and not designated by the Aluminum Association," noted by the lack of a number assigned to its sheet.
At oral argument, Pierce Lee, counsel for Valeo, argued that Commerce "severed the term 'designated' from the surrounding language and interpreted it outside the industry context." The judges asked if Lee is saying the word "designated" in the scope is equivalent to the term "registered," also asking that if Commerce meant "registered," why wouldn't it use that word. Judge Stoll noted that the Teal Sheets themselves use the words "designate" and "register" differently.
Hughes told Lee that he "lose[s] on plain language," asking if he then loses because Commerce's determinations under (k)(1) and (k)(2) are correct and backed by substantial evidence. From there, Lee argued that Commerce used a separate rate determination as an "impermissible" (k)(1) source, which Hughes repeatedly questioned, claiming that the agency's determination is a proper (k)(1) source. Lee insisted that it wasn't, since it didn't include a description of the subject merchandise.
During a later exchange with DOJ attorney Kyle Beckrich, Hughes said he agrees with the government that the separate rate determination is a (k)(1) source.
Hughes then pressed Lee on why Commerce would have limited the scope of the orders only to include registered articles rather than all goods being dumped in the U.S. market, even if it's not registered. The judge said Valeo's interpretation of the scope would "allow for distortion in the market" and would even cut against the Aluminum Association's goal of getting industry parties to register their aluminum and aluminum alloy. Lee responded that "Commerce could clearly do exactly what they are claiming to have done in the past by simply just naming the prime, major alloying element."
The judges then pressed Beckrich on whether the Teal Sheets are properly considered to be a definitional (k)(0) source or a (k)(1) source, faulting the trade court for not making a clear ruling on the issue. Hughes asked if the Teal Sheets were hypothetically "really, really clear" and said that "designated and registered are different," could it come in as a (k)(0) source. Bekcrich said it could in theory, but a problem might exist that the Teal Sheets "monopolize the use of the word designate so that it is unequivocally an industry-understood" term. Hughes replied that this is what the scope says.
Hughes also questioned if the Teal Sheets could then be used as both (k)(0) and (k)(1) sources. Beckrich said they could, since the appellate court has said recently that Commerce can consider trade usage in its (k)(0) analysis.
Taranto then pressed Beckrich on the concept of ambiguity, asking whether recent jurisprudence on the interpretation of agency regulations changes how much and what kind of work is done in interpreting AD/CVD scopes. The DOJ attorney said this sort of discussion isn't at issue in the case.