CAFC Upholds Inclusion of T-Series Sheet in Scope of AD/CVD Orders on Aluminum Sheet
The Commerce Department properly included importer Valeo North America's T-series aluminum sheet in the scope of the antidumping duty and countervailing duty orders on common alloy aluminum sheet from China, the U.S. Court of Appeals for the Federal Circuit held on Aug. 12. Judges Richard Taranto, Todd Hughes and Kara Stoll disagreed with the importer as to the ambiguity in the orders' scope and on whether its aluminum sheet falls outside the orders' scope, since it's heat-treated.
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Stoll, writing for the court, also held that Commerce didn't need to revoke its instructions to CBP suspending liquidation of Valeo's entries after the agency began a (k)(2) analysis on remand at the Court of International Trade.
In large part, the appeal centered on a term from the AD/CVD orders, which say they 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).
The Federal Circuit agreed with the trade court over Valeo's objections, finding the term "as designated by the Aluminum Association" to be ambiguous. While Valeo said the scope language itself, read in conjunction with the Teal Sheets, defines the term as only referring to alloys registered with the Aluminum Association, the court said it disagrees. The orders don't define what is meant by the phrase, nor do the Teal Sheets "unambiguously define what is meant by 'as designated' because the Teal Sheets refers both to designated alloys as well as registered alloys," Stoll said.
Guided by the principle that the "same term usually has the same meaning and different terms usually have different meanings," Stoll said a "strong argument can be made that the Teal Sheets uses the phrase 'designated' to mean something different from 'registration,' undermining Valeo's argument that 'designated' unambiguously means registered." In addition, the term "designated" could either refer to specific registrations made by the Aluminum Association or stand as a "general term that may be used in the common vernacular," the court noted.
Valeo then challenged Commerce's reliance on a confidential separate determination as a (k)(1) source, arguing that (k)(1) sources must be public and that the prior scope ruling "lacks any discussion about a scope ruling." In dismissing Valeo's gripe, Stoll noted that Commerce barely considered the ruling. Since the agency said the (k)(1) sources are "not dispositive," any "alleged error is likely harmless," the court said.
The Federal Circuit then addressed Valeo's claim that its aluminum sheet is excluded from the orders, since it's heat-treated. The importer noted that the scope specifically covers 3XXX-series alloys as designated by the Aluminum Association, and that the Aluminum Association classifies 3XXX-series alloys as non-heat-treatable. Valeo argued that its T-series products are heat-treated, precluding them from being classified as 3XXX-series alloys.
Commerce said that Valeo's sheet doesn't undergo "solution heat-treatment, and that the tempering process used on Valeo’s T-series sheet are inconsistent with those of a heat-treatable alloy.”
The court said that while Valeo points to evidence supporting a "broader definition of heat-treatment and evidence that the 3XXX-series alloys are non-heat-treatable," the company failed to explain why the evidence Commerce used in reaching its conclusion isn't "substantial evidence." The agency adequately explained that it adopted the "narrower definition of heat-treatment to mean a synonym for solution heat-treatment," since the broader definition of the term is "inconsistent with the statement in Aluminum Alloys 101 that only certain series of aluminum are heat-treatable," the court said.
Lastly, Valeo argued that Commerce had to revoke its instructions to CBP suspending liquidation of its entries. The importer said that under its regulations, 19 C.F.R. 351.225, Commerce may only issue CBP instructions suspending liquidation when a (k)(2) scope inquiry has been initiated. Valeo said that since Commerce only opened the (k)(2) inquiry on remand at CIT, the agency had to revoke its suspension instructions it issued when it opened the initial scope proceeding.
Stoll held that this claim is "belied by the language of subsection (l)" to Commerce's regulations, which says that when a (k)(2) scope ruling proceeds, and the product in question is already subject to suspension of liquidation, "that suspension of liquidation will be continued, pending a preliminary or a 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." Thus, the regulations clearly provide that the suspension of liquidation should be continued, the court said.
(Valeo North America v. United States, Fed. Cir. # 24-1189, dated 08/12/25; Judges: Richard Taranto, Todd Hughes, Kara Stoll; Attorneys: Pierce Lee of Crowell & Moring for plaintiff-appellant Valeo North America; Kyle Beckrich for defendant-appellee U.S. government; John Herrmann of Kelley Drye for defendants-appellees led by Aleris Rolled Products)