Justia International Trade Opinion Summaries

Quiedan imports agricultural stakes produced in China for use in training grape vines and other plants. Each stake is made of steel concrete reinforcing bar (rebar) by cutting rebar to a length of four to five feet, then sharpening one end to a point to ease driving the stake into the ground. The Department of Commerce concluded that Quiedan’s stakes are clearly within the scope of an antidumping duty order covering rebar from China. The Court of International Trade and Federal Circuit affirmed. Under the Rebar Order as modified by the 2007 Continuation, the “product covered is all steel concrete reinforcing bars (rebar) sold in straight lengths,” but “[s]pecifically excluded are plain rounds (i.e., non-deformed or smooth bars) and rebar that has been further processed through bending or coating.” The use of the rebar is immaterial and its physical properties and fabrication fall within the scope of the order. View "Quiedan Co. v. United States" on Justia Law

In 2016, the U.S. Department of Commerce issued its final determination in its investigation into whether the Korean government had provided, to Korean producers and exporters of certain corrosion-resistant steel products (CORE), subsidies warranting the imposition of countervailing duties on the products when imported into the United States. Nucor and other U.S. CORE producers, which had requested the investigation, alleged that the Korean government had provided subsidies through its sale of electricity to Korean CORE producers. Korea Electric Power Corporation (KEPCO) as the seller of electricity to users in Korea, including the CORE producers at issue. The Korean government owns and controls KEPCO, including regulating KEPCO’s prices. Only a minimal amount of electricity is supplied directly to consumers on a localized basis by independent power producers. Commerce found no such electricity-sale subsidy while finding some other subsidies. The Court of International Trade affirmed as to electricity sales. The Federal Circuit affirmed. Commerce’s decision is with the statute because Commerce found not only that KEPCO’s pricing was non-discriminatory but also that the pricing ensured cost recovery. View "Nucor Corp. v. United States" on Justia Law

Hyosung and Diebold manufacture and sell ATMs. Diebold filed a complaint with the International Trade Commission claiming that Hyosung’s imported ATMs infringe its 616 and 631 patents and their importation violates 19 U.S.C. 1337(a)(1)(B). The 616 patent claims an ATM rollout tray that allows for easier servicing of its internal components. The 631 patent relates to a particular method for reading magnetic ink character recognition data on checks (e.g., ink used for the account and routing numbers) that are inserted into an ATM regardless of their width or orientation. The ITC concluded that Hyosung’s accused products infringed both patents; that the asserted claims were not invalid; and that the domestic industry requirement was met for both patents; it entered a limited exclusion order and cease and desist orders against Hyosung. Hyosung redesigned its products to avoid infringing the 616 patent and sought an administrative ruling by U.S. Customs and Border Protection. Customs concluded that the newly redesigned products did not infringe and were therefore not covered by the ITC’s limited exclusion order. The Federal Circuit affirmed as to the 631 patent and concluded that the appeal was moot as to the 616 patent, which has expired, so the ITC’s orders as to that patent have no prospective effect. View "Hyosung TNS Inc. v. International Trade Commission" on Justia Law

In 2011, the Commerce Department posted notice permitting interested parties to request administrative review of duty orders on ball bearings and parts thereof from France, Germany, Italy, Japan, and the United Kingdom. BMW requested administrative review of the duties on its imports from the U.K. The duty orders on ball bearings and parts thereof from Japan and the United Kingdom, first imposed in 1989, were undergoing sunset review by Commerce and the International Trade Commission (ITC), which initially decided against revocation. The ITC later determined that revocation would not likely lead to the continuation or recurrence of material injury to a U.S. industry; the Court of International Trade affirmed. Commerce published a notice that it was revoking those duty orders and discontinuing unfinished administrative reviews. In 2013, the Federal Circuit reversed. The Trade Court reinstated the ITC’s affirmative material injury determination. Commerce e-mailed counsel for all parties that had previously requested administrative review, stating only that it was“sending out a quantity-and-value-questionnaire. Commerce published notice that it was resuming the administrative reviews and noting the deadline for withdrawing requests for review. Counsel for BMW did not complete the questionnaire, withdraw from review, or otherwise respond. Finding that BMW “failed to cooperate,” Commerce employed an adverse inference in selecting a 126.44% rate (19 U.S.C. 1677e(b)) against BMW. The Federal Circuit vacated. Commerce did not set forth its reasoning in sufficient detail to allow review of whether the rate was unduly punitive. View "BMW of North America LLC v. United States" on Justia Law

Ford successfully sued in the Court of International Trade, challenging U.S. Customs and Border Protection’s classification of its model year 2012 Transit Connect 6/7 vehicles under Harmonized Tariff Schedule of the United States (HTSUS) Subheading 8704.31.00, which covers “[m]otor vehicles for the transport of goods,” and bears a duty rate of 25% ad valorem. Ford argued that its subject merchandise is properly classified under HTSUS Subheading 8703.23.00, which bears a lower duty rate of 2.5% ad valorem. The Federal Circuit reversed. The lower court erred by refusing to consider intended use as part of its analysis. Use is relevant in construing “other motor vehicles principally designed for the transport of persons” in HTSUS 8703 because this language suggests that classification is necessarily intertwined with whether an imported vehicle is chiefly intended to be used to transport persons. On balance, the structural design features, auxiliary design features, and inherent use considerations establish that the subject merchandise is not classifiable under HTSUS Heading 8703. View "Ford Motor Co. v. United States" on Justia Law

The Court of International Trade held that Sunpreme’s solar modules are covered by the scope of antidumping and countervailing duty orders on U.S. imports of certain solar cells from China and that the Department of Commerce could not instruct U.S. Customs and Border Protection to continue suspending liquidation of Sunpreme’s solar modules entered or withdrawn from warehouse for consumption before the scope inquiry was initiated. The Federal Circuit affirmed, rejecting Sunpreme’s arguments that the orders did not cover its solar modules because they do not contain crystalline silicon photovoltaic cells, do not have an additional semiconductor substrate (p/n junction), and are thin film products. Commerce cannot order the suspension of liquidation pre-scope inquiry for merchandise possibly subject to an unclear or ambiguous duty order; neither can Customs because allowing it to do so would permit Customs in the first instance to clarify or interpret the ambiguity in the duty order so as to place merchandise within its scope. Customs lacks authority to suspend liquidation under those narrow circumstances and Commerce cannot continue an ultra vires suspension of that kind. View "Sunpreme Inc. v. United States" on Justia Law

Segway filed a complaint (19 U.S.C. 337) with the International Trade Commission based on infringement of six patents and two trademarks--stylized and non-stylized SEGWAY marks, which cover “motorized, self-propelled, wheeled personal mobility devices, namely, wheelchairs, scooters, utility carts, and chariots.” The complaint alleged that Swagway’s self-balancing hoverboard products, marketed under the names SWAGWAY and SWAGTRON infringed Segway’s marks. Swagway proposed a consent order stipulating that Swagway would not sell or import “SWAGWAY-branded personal transporter products ... all components thereof, packaging and manuals.” Segway opposed the proposal as addressing only a subset of the claims and products at issue. After a hearing, the ALJ found that the accused products did not infringe certain patents and that use of the SWAGWAY designation, but not the SWAGTRON designation, infringed the trademarks. The Commission determined not to review the ALJ’s denial of Swagway’s consent order motion. The Federal Circuit upheld that determination and the trademark infringement determination based on the evidence supporting factors other than likelihood of confusion, including the degree of similarity between the two marks in appearance, the pronunciation of the words, and the strength of the SEGWAY marks. View "Swagway, LLC v. International Trade Commission" on Justia Law

The Department of Commerce imposed an antidumping duty on crystalline silicon photovoltaic cells, whether or not assembled into modules, from China. Commerce assigned Sumec Hardware a separate rate, 24.48%, assigning Sumec’s China-wide entity a margin of 249.96%. In 2015, Hardware's margin was amended to 13.18% pursuant to the U.S. Trade Representative’s decision to implement a related World Trade Organization determination. Commerce later reconsidered and assigned Hardware the China-wide rate. The Trade Court affirmed. Commerce then published a Timken notice, suspended liquidation of entries in accordance with the decision, and later instructed Customs to collect cash deposits on subject merchandise exported by Hardware at the China-wide rate of 238.95% for any entries made after October 15, 2015. In March 2016, Commerce issued liquidation instructions, ordering Customs to liquidate all Hardware entries “at the cash deposit . . . rate in effect.” Sumec sought an injunction, alleging that Commerce should have set the “date for the change in liquidation rate as the date of publication of the Timken [n]otice,” (November 23, 2015) rather than October 15, and that Hardware made entries during this 39-day period, which should have been subject to the 13.18% separate rate. The Federal Circuit affirmed the denial of Sumec’s Motion; Sumec failed to demonstrate irreparable harm. View "Sumecht NA, Inc. v. United States" on Justia Law

A Controlled Foreign Corporation’s income is not taxable to its domestic shareholders unless the income is distributed to them. CFC shareholders began taking loans either from the CFC or from third-party financial institutions using the CFC’s assets as collateral or having the CFC guarantee the loans to obtain a monetary return on their foreign investment. The Revenue Act of 1962 requires the inclusion in the domestic shareholder’s annual income of any increase in investment in U.S. properties made by a CFC it controls, 26 U.S.C. 956(c)(1)(C), and provides that a CFC shall be considered as holding an obligation of a U.S. person if such CFC is a pledgor or guarantor of such obligations. IRS regulations determine when a CFC’s pledge or guarantee results in the CFC being deemed the holder of the loan, and how much of the “obligation” a CFC pledgor or guarantor is deemed to hold, 26 C.F.R. 1.956-2(c)(1) and 1.956-1(e)(2). Through the SIH family, Appellant owns two CFCs. Another SIH affiliate, SIG, borrowed $1.5 billion from Merrill Lynch in 2007 in a loan guaranteed by over 30 SIH affiliates, including the CFCs that Appellant owns. Although the loan dwarfed the CFCs’ assets (roughly $240 million), Merrill Lynch insisted on having the CFCs guarantee. In 2011, when the CFCs distributed earnings to Appellant, their domestic shareholder, the IRS determined that Appellant should have reported the income at the time the CFCs guaranteed the SIG loan, treating each CFC as if it had made the entire loan directly, though the amount included in Appellant’s income was reduced from the $1.5 billion principal of the loan to the CFCs’ combined “applicable earnings.” This resulted in an additional tax of $378,312,576 to Appellant. The IRS applied the then-applicable 35% rate for ordinary income. The Tax Court and Third Circuit ruled in favor of the IRS, rejecting Appellant’s challenges to the validity of the regulations and the use of the ordinary income tax rate. View "SIH Partners LLLP v. Commissioner of Internal Revenue" on Justia Law

Kalle's sausage casings, imported from Germany, are comprised of a woven textile sheet that is coated with a layer of plastic on one side. The plastic coating is thin and “only fills the interstitial spaces between the textile fibers” to ensure that the casing’s “textile character remains recognizable.” The textile gives the casing its strength and shape and allows the casing to “absorb dyes and aroma substances.” The plastic coating helps prevent moisture transmission. After the textile sheet is coated in plastic, it is trimmed, folded to form a tube, and fixed with a seam for importation as flattened tubes wound around a cardboard core. The casings were liquidated by U.S. Customs and Border Protection under Harmonized Tariff Schedule of the United States (HTSUS) subheading 6307.90.98, as “[o]ther made up articles, including dress patterns,” subject to a duty of 7%. Kalle argued that the casings should be classified under subheading 3917.39.0050, which covers “[t]ubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics,” subject to a duty of 3.1%, emphasizing that Note 8 includes “sausage casings and other lay-flat tubing.” The Trade Court granted the government summary judgment. The Federal Circuit affirmed. The casings are not “completely embedded,” or entirely fixed in a surrounding mass of plastic. The court distinguished “impregnated” fabrics. View "Kalle USA, Inc. v. United States" on Justia Law