CAFC Broadens Scope of AD/CV Duties on Aluminum Extrusions in Decisions on Appliance Door Handles

The orders do not only cover extruded aluminum forms and parts, and undergoing an assembly process with multiple components does not mean a product is outside the scope of the AD/CV duty orders, CAFC said. The court’s position on whether fasteners are invisible for the purposes of the “finished merchandise” exemption was more mixed.

Both scope rulings involved appliance door handles made up of aluminum extrusions and plastic end caps, with one ruling issued on Whirlpool refrigerator door handles in 2014 (see 14080602), and the other on Meridian appliance door handles the previous year (see 13062703). In both, Commerce had found the door handles were subject to AD/CV duties because the “finished goods kit” and “finished merchandise” exemptions require non-fastener components besides the extrusions themselves, and the end caps counted as fasteners.

In the Whirlpool case, CIT noted that assembly is not one of the processes listed in the scope as not removing merchandise from AD/CV duties, finding in 2016 that “assemblies” therefore can’t be covered by AD/CV duties at all (see 1602020072). As for Meridian, CIT in 2015 engaged in a similar discussion, but ultimately found the company’s door handles exempt due to Commerce’s misinterpretation of the “finished merchandise” exemption. Unlike the finished goods kit exemption, the finished merchandise exemption does not require parts “beyond mere fasteners,” it said.

In a May 23 decision in the Whirlpool case, CAFC disagreed that assemblies aren’t covered by AD/CV duties. “The general scope language unambiguously includes aluminum extrusions that are part of an assembly,” it said. “The Orders explicitly include aluminum extrusions ‘that are assembled after importation’ in addition to ‘aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies,’” it said.

On the other hand, CIT was correct in its rejection of Commerce’s finished merchandise fasteners test, CAFC said in its Whirlpool opinion. The language of the scope on fasteners only refers to the finished goods kit exemption, it said. “If Commerce had actually intended to sweep into the scope all finished merchandise consisting solely of aluminum extrusion components and fasteners, it would have done so in the scope language rather than expressly confining its fasteners exception to the finished goods kit exclusion,” CAFC said.

In the Meridian case, CAFC also rejected CIT’s holding that assemblies aren’t subject to aluminum extrusions duties, but for a different reason: the trade court “impermissibly substituted its judgment for that of Commerce to conclude that the plastic end caps render the handles ‘assemblies’ and thereby exclude the [plastic-capped door] handles from the general scope language,” it said.

The courts owe Commerce deference in interpreting the scope of its own AD/CV duty orders, CAFC said. “That the CIT arrived at conclusions different from Commerce’s factual findings is immaterial to the extent that Commerce’s original scope ruling is reasonable and supported by substantial evidence,” it said. “Here, the CIT gave insufficient deference to Commerce’s interpretation of the scope of the antidumping and countervailing duty orders,” it said.

Commerce is also entitled to deference in its interpretation of the exemptions to the scope, CAFC said in the Meridian ruling. Circuit Judge Jimmie Reyna echoed that sentiment in a partial dissent he wrote on the Whirlpool decision. “Commerce found ‘unconvincing the notion that an unassembled product in kit-form that consists solely of extruded aluminum, save for fasteners, would … fall inside the scope while the identical product entering the United States as an assembled good, would fall outside the scope of the Orders,’” he said. “I defer to Commerce on interpreting its own antidumping duty orders and would affirm Commerce’s August 2014 Scope Ruling on the basis that it is not unreasonable and is otherwise supported by substantial evidence.”

(Whirlpool Corporation v. U.S., CAFC # 17-1117, dated 05/23/18, Judges Prost, Moore and Reyna)

(Meridian Products LLC v. U.S., CAFC #16-2657, dated 05/22/18, Judges Newman, O’Malley and Reyna)