Justia International Trade Opinion Summaries

The Thai government provides BCR program rebates to domestic manufacturers who produce and export products made from raw materials imported by domestic suppliers. TPBI manufactures polyethylene retail carrier bags in Thailand and exports them to the U.S. TPBI obtains resin from Thai domestic suppliers, who import raw materials for producing resin and pay associated import duties. To account for those duties, TPBI pays a fee to resin suppliers in exchange for certificates, which are provided to the Thai government upon export of finished products, in exchange for BCR rebates. The Department of Commerce determined that the bags were being sold in the U.S. at less than fair value and issued an antidumping duty order. Years later, Commerce conducted administrative review of that order. TPBI argued that the BCR program provided compensation for the fees paid to its suppliers and that BCR revenue should be subsumed into production costs. Commerce determined that the BCR program related to export sales rather than production costs, and declined to adjust TPBI’s cost of production. Commerce noted that BCR revenues are “somewhat analogous” to duty drawbacks, where an adjustment to the U.S. price of the product would correct for an imbalance resulting from import duties that are factored into home market prices but either rebated or not collected for exported products, but that TPBI had not claimed BCR revenue as a duty drawback. Commerce determined the antidumping margin without an offset in TPBI’s cost of production. The Court of International Trade and Federal Circuit affirmed, finding that BCR revenue was export-conditional, not relevant to the cost of production. View "Thai Plastic Bags Indus. Co., Ltd. v. United States" on Justia Law

Belimo imports devices consisting of an electric motor, gears, and circuit boards, used in HVAC systems. HVAC system sensors detect and send ambient temperature to a central controller, which compares that to a user’s desired temperature. In a traditional system, the controller sends a signal to electric motors that adjust the angle of a damper blade to let in more or less hot or cold air. If a disturbance such as a strong draft moves the blade, it may become stuck in the incorrect position. Belimo’s products incorporate a programmed Application Specific Integrated Circuit (ASIC) to continuously, independently monitor blade position and maintain it at the correct angle without controller input. ASIC can adapt to receive an AC or DC controller signal, filter out unintended signals, and use stored energy to prevent the motor spinning out of control in power failures. U.S. Customs and Border Protection liquidated the imports under the Harmonized Tariff Schedule (HTSUS) 8501.10.40 as electric motors. The Eighth Circuit affirmed, agreeing with the Court of International Trade in rejecting a claim that the products should have been classified as “automatic regulating and controlling instruments and apparatus; parts and accessories thereof” under HTSUS 9032.89.60. The devices do not automatically measure the actual value of the temperature or any variable of air, as required by that classification. View "Belimo Automation, A.G. v. United States" on Justia Law

In 2008 Motorola agreed to make a good-faith effort to purchase two percent of its cell-phone user-manual needs from Druckzentrum, a printer based in Germany. After a year, Motorola’s sales contracted sharply. Motorola consolidated its cell-phone manufacturing and distribution operations in China, buying all related print products there. Motorola notified Druckzentrum. The companies continued to do business for a few months. After losing Motorola’s business Druckzentrum entered bankruptcy and sued Motorola, alleging breach of contract and fraud in the inducement. Druckzentrum claimed that the contract gave it an exclusive right to all of Motorola’s user-manual printing business for cell phones sold in Europe, the Middle East, and Asia during the contract period. The district judge entered summary judgment for Motorola. The Seventh Circuit affirmed. The written contract contained no promise of an exclusive right and was fully integrated, so Druckzentrum cannot use parol evidence of prior understandings. Although Motorola promised to make a good-faith effort, the contract listed reasons Motorola might justifiably miss the target, including business downturns. There was no evidence of bad faith. The evidence was insufficient to create a jury issue on the claim that Motorola fraudulently induced Druckzentrum to enter into or continue the contract. View "Druckzentrum Harry Jung GmbH v. Motorola Mobility LLC" on Justia Law

Between July 30, 2003, and August 31, 2003, Sunline imported eight entries of freshwater crawfish tailmeat from Chinese producer Hubei, which were subject to a U.S. Department of Commerce antidumping duty order covering freshwater crawfish tailmeat from China. The Hubei Entries were entered following approval by Customs of eight single-entry bonds that covered the estimated antidumping duties and designated Hartford as surety. The Hubei Entries were made during the pendency of Hubei’s “new shipper review.” After Hubei’s new shipper review was rescinded, meaning Hubei did not qualify for an individual antidumping duty rate, Customs liquidated the Entries at the 223.01% country-wide rate. After Sunline failed to pay, Customs demanded payment from Hartford, which filed a complaint at the Court of International Trade, seeking to void its obligations under the bonds because Customs had been investigating Sunline for possible import law violations during the period in which the bonds were secured and did not inform Hartford of the investigation. The Trade Court dismissed. The Federal Circuit affirmed. Hartford did not allege any facts that establish a connection between the investigation and Sunline’s failure to pay its antidumping duties after liquidation. View "Hartford Fire Ins. Co. v. United States" on Justia Law

The U.S. Department of Commerce published an antidumping duty order on wooden bedroom furniture from China. AFMC requested an administrative review of certain companies exporting such furniture to the U.S. in 2009. After Commerce selected it as the mandatory respondent, Huafeng provided Commerce with data related to its 2008 purchases of wood inputs from market economy suppliers relevant to the subject merchandise. Commerce assigned Huafeng a dumping margin of 41.75% using 2009 import data from the Philippines (surrogate values), a market economy, to value the wood inputs as the “best available information” under 19 U.S.C. 1677b(c)(1) because they were contemporaneous with the Period of Review, and the purchases identified by Huafeng were not. After remand Commerce again relied on the surrogate values. On second remand, Commerce determined that it did not need to reopen the record because the “best available information” analysis focuses on the purchase of inputs, not consumption, verified that the market economy purchases were actually from market economy suppliers, and assigned a new dumping margin of 11.79%. The Court of International Trade judgment sustained that valuation. The Federal Circuit reversed, directing direct the Trade Court to reinstate the valuation in the First Redetermination. View "Home Meridian Int'l, Inc. v. United States" on Justia Law

Roche imported BetaTab, a mixture containing beta-carotene, antioxidants, gelatin, sucrose, and corn starch that can be used as a source of Vitamin A in foods, beverages, and vitamin products. Beta-carotene crystalline makes up 20 percent of the mixture and is an organic colorant with provitamin A activity. Whether used as a colorant or provitamin A, beta-carotene must first be combined with other ingredients. Customs classified BetaTab under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 2106.90.97 as “[f]ood preparations not elsewhere specified or included” and denied a protest. In the Court of International Trade,Roche argued that BetaTab was classifiable either as a “coloring matter” under HTSUS subheading 3204.19.35, and eligible for duty-free entry pursuant to the Pharmaceutical Appendix, or, alternatively, as a provitamin under HTSUS heading 2936. The Court ruled in favor of the company, reclassifying the product under HTSUS 2936. The Federal Circuit affirmed. Roche’s manufacturing process did not change BetaTab’s functionality as a provitamin or change the character of beta-carotene as a source of provitamin A. Addition of the stabilizing ingredients did not exclude the merchandise from classification under heading 2936. View "Roche Vitamins, Inc. v. United States" on Justia Law

Alcan imported Flexalcon, an aluminum-plastic laminate foil for food packaging with stringent shelf-life requirements, such as for the military’s Meals Ready to Eat. Flexalcon is a four-layer material for the base of a package and a three-layer material for the lid. Each configuration has a thin layer of aluminum foil between layers of plastic. Aluminum prevents penetration of light, water vapor, oxygen, and other contaminants that would degrade food contents. The plastic gives the packaging tensile strength and increases heat resistance to withstand sterilization and sealing; it prevents cracking and piercing. Alcan listed the material as classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 7607.20.50, which carries no duty rate and covers “[a]luminum foil (whether or not printed, or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm: Backed: Other.” Customs reclassified the Flexalcon under subheading 3921.90.40, with a 4.2% duty rate, covering “[o]ther plates, sheets, film, foil and strip, of plastics: Other: Flexible.” Alcan unsuccessfully protested under 19 U.S.C. 1514–1515. The Court of International Trade upheld the classification. The Federal Circuit affirmed, reasoning that the competing aluminum-foil heading defers to the applicable plastics heading. View "Alcan Food Packaging v. United States" on Justia Law

uPI and Richtek design and sell DC-DC controllers that convert direct current from one voltage to another, and are embodied in chips for downstream devices such as computer motherboards. uPI was founded by former Richtek employees; its chips are imported into the U.S. either directly or as incorporated in downstream devices. Richtek complained to the International Trade Commission that uPI misappropriated Richtek’s trade secrets and infringed Richtek’s U.S. patents, in violation of the Tariff Act, 19 U.S.C. 1337. uPI offered to enter into a consent order and to cease importation of products produced using or containing Richtek’s trade secrets or infringing Richtek’s patents. Over Richtek’s objection, the ALJ entered the consent order substantially as drafted by uPI. The Commission terminated the investigation. A year later Richtek filed an Enforcement Complaint. An ALJ distinguished between products that were accused in the prior investigation and products allegedly developed and produced after entry of the Consent Order, finding violations as to the formerly accused products and that the post- Consent Order products infringed two patents, but were independently developed and not produced using Richtek’s trade secrets. The Commission affirmed with respect to the formerly accused products and reversed in part with respect to the post-Order products. The Federal Circuit affirmed concerning the formerly accused products, but reversed the ruling of no violation as to the post-Consent Order products.View "UPI Semiconductor Corp. v. Int'l Trade Comm'n" on Justia Law

In 2010, at the request of domestic interested parties, the Department of Commerce initiated review under 19 U.S.C. 1675(a) on an outstanding antidumping duty order on stainless steel bar from India 2009-2010 and issued Mukand questionnaires to obtain product-specific cost information necessary to calculate Mukand’s dumping margin and ensure that comparison of similar products. Mukand’s response assigned the same production costs across all product sizes. Commerce informed Mukand that it did not consider this approach reasonable and asked that Mukand produce size-specific information, regardless of whether it normally tracked such information or to “quantify and explain” any reasons for believing that size-based cost differentials are insignificant. Mukand responded with a brief statement that where product grade and type of finishing operation are the same, direct material costs do not vary with size. After a fourth questionnaire, Mukand still declined to report size-specific costs, but never contacted Commerce for clarification or assistance. Commerce determined that Mukand’s responses were deficient, resorted to facts otherwise available, and applied an adverse inference against Mukand. The Court of International Trade and Federal Circuit affirmed. Without cost data broken down by product size, Commerce was unable to differentiate between different types of steel bar products and could not calculate an accurate constructed value for any of Mukand’s products. View "Mukand, Ltd. v. United States" on Justia Law

Trek was the importer of record for 72 entries of men’s suits in 2004. Mercantile was the consignee. Shadadpuri is president and sole shareholder of Trek, and a 40% shareholder of Mercantile. Trek and Mercantile provided fabric “assists” to manufacturers outside the U. S. (items incorporated in the imported merchandise, 19 U.S.C. 1401a(h)(1)(A)(i)). Customs determined that the entry documentation failed to include the cost of the fabric assists in the price paid for the suits which lowered the amount of duty payable by Trek. Shadadpuri had previously failed to include assists in entry declarations when acting on behalf of a corporate importer. The Court of International Trade found Shadadpuri liable for gross negligence in connection with the entry of imported merchandise and imposed penalties under 19 U.S.C. 1592(c)(2). The Federal Circuit reversed the penalty, but, on rehearing en banc, affirmed. What Shadadpuri did comes within the commonsense understanding of the “introduce” language of the statute. While suits invoiced to one company were in transit, he “caused the shipments of the imported merchandise to be transferred” to Trek. Himself and through his aides, he sent invoices to the customs broker for use in completing the entry filings to secure release of the merchandise into U.S. commerce. Applying the statute to Shadadpuri does not require piercing the corporate veil. View "United States v. Trek Leather, Inc." on Justia Law