Articles Posted in U.S. Court of Appeals for the Federal Circuit

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Schlumberger, an oil well services provider, imported bauxite proppants from China for use in providing hydraulic fracturing services to U.S. customers. The subject merchandise, when combined with other materials after importation, increased oil well productivity by preventing fractures in rock formations from closing. U.S. Customs & Border Protection classified the subject merchandise under Subheading 6909.19.50 of the Harmonized Tariff Schedule of the United States (HTSUS). That subheading, with a duty rate of four percent, covers “Ceramic wares for laboratory, chemical, or other technical uses; ceramic troughs, tubs and similar receptacles of a kind used in agriculture; ceramic pots, jars and similar articles of a kind used for the conveyance or packing of goods: Other: Other.” The Trade Court rejected that classification and entered summary judgment that the subject merchandise should enter under HTSUS 2606.00.00, as “Aluminum ores and concentrates: Bauxite, calcined: Other.” The Federal Circuit affirmed, after examining the products listed in the subheadings proposed by Customs and noting that, unlike the listed products, the subject proppants do not possess a definite form. View "Schlumberger Technology Corp. v. United States" on Justia Law

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At Appvion’s request, the Department of Commerce initiated a third administrative review of its antidumping duty order covering lightweight thermal paper from Germany. Koehler responded to Commerce’s antidumping questionnaire, including aggregate information about the quantity and value of home-market sales and a database showing individual home-market sales transactions. Commerce issued a supplemental questionnaire. Appvion filed an affidavit from a confidential source asserting that Koehler was engaged in a transshipment scheme, shipping goods destined for its home market through other markets so that those sales would not be reported as home-market sales to Commerce. After two extensions of time, Koehler’s response admitted that its employees had knowingly transshipped certain orders that should have been reported as home-market sales. It proffered an updated home-market sales database that allegedly included those sales. Commerce refused to accept the updated data, stating that the supplemental questionnaire had requested only clarification, not new data. Commerce found that Koehler had withheld information, failed to timely provide information, significantly impeded the proceeding, provided information that could not be verified, and failed to cooperate to the best of its ability. Commerce invoked its authority (19 U.S.C. 1677e) to draw adverse inferences and adopted, as Koehler’s dumping margin, the highest rate alleged in Appvion’s petition, 75.36%. The Trade Court and Federal Circuit affirmed, noting Commerce’s “considerable discretion” and that Commerce gave Koehler an opportunity to explain its conduct. View "Papierfabrik August Koehler SE v. United States" on Justia Law

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Following a request from ICP, Customs issued a Ruling Letter, classifying ICP’s white sauce as “sauces and preparations therefor” under the Harmonized Tariff Schedule of the United States (HTSUS) 2103.90.9060. Years later, Customs issued a Notice of Action reclassifying pending and future entries of white sauce as “[b]utter and . . . dairy spreads” under HTSUS 0405.20.3000, which increased the tariff by approximately 2400%. After protesting and paying duties on a single entry, ICP filed a claim in the Court of International Trade, alleging the Notice of Action improperly revoked the Ruling Letter without following the procedures required by 19 U.S.C. 1625(c). Since ICP filed its first action in 2005, the CIT has issued five separate opinions on the matter, two of which were appealed to the Federal Circuit. In awarding ICP attorney fees, the Trade Court found that “The record ... establishe[d] that the goverment position was rooted in a desire to avoid the timely revocation process” by using the Notice of Action, rather than following the procedures of 1625(c)(1). The Federal Circuit affirmed the award under the Equal Access to Justice Act, 28 U.S.C. 2412(d)(1)(A), upholding the Trade Court’s analysis of whether the government’s conduct was “substantially justified.” View "International Custom Products, Inc. v. United States" on Justia Law

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Kyocera manufactures solar panels in Mexico and imports them to the U.S. The panels incorporate crystalline silicon photovoltaic (CSPV) cells from Taiwan, which are strung together, sealed, and framed to make solar modules. CSPV cells are the main electricity-generating component of solar modules, which were subject to an antidumping duty investigation into CSPV products from China and Taiwan. The Department of Commerce defined the investigation’s scope to include cells and modules produced in Taiwan and certain modules “completed or partially manufactured” in other countries. Kyocera unsuccessfully challenged Commerce’s scope determination, requesting that it exclude solar modules produced in Mexico, including modules using CSPV cells manufactured in Taiwan. Using Commerce’s scope determination, the International Trade Commission determined that an industry within the U.S. had been materially injured by imports of CSPV products from Taiwan. The ITC declined to conduct a separate negligibility analysis under 19 U.S.C. 1677(24), stating that the Commission must defer to Commerce’s definition of the scope of the merchandise subject to these investigations. The Trade Court agreed. The Federal Circuit affirmed, rejecting an argument section 1677(24)’s definition of negligible merchandise directs the Commission to consider whether “imports from a country” are negligible so that imports from Mexico could be considered separately. View "Kyocera Solar, Inc. v. United States International Trade Commission" on Justia Law

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In 2004-2006 Tyco imported 42 models of liquid-filled glass bulbs, commonly used as a temperature-dependent trigger component of fire sprinkler heads. When the sprinkler head is exposed to fire, the bulb is heated and the liquid inside the bulb expands until the bulb shatters. When the bulb breaks, the valve of the sprinkler system opens and releases a shower of water to extinguish the fire. The bulbs can also be used in water heaters. The bulbs break at different temperatures, depending on the liquid. Tyco used 39 models in fire sprinkler systems and three models as thermal release devices in water heaters. Customs and Border Protection classified the bulbs as “other articles of glass” under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 7020.00.60, which has a 5% rate of duty. Tyco protested, asserting that the bulbs would be more properly classified under subheading 8424.90.90, which includes “Other” “Parts” of goods classified under heading 8424 and is duty-free. Customs denied Tyco’s protest. The Trade Court upheld the ruling, finding that the bulbs are “of glass.” The Federal Circuit affirmed. While the liquid component is “the brains behind the operation,” the essential character of the product is glass. View "Tyco Fire Products, L.P. v. United States" on Justia Law

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The U.S. Department of Commerce reconducted a fourth administrative review of the antidumping duty order on certain frozen warm-water shrimp from Vietnam. The Trade Court upheld Commerce’s decision to refuse Grobest’s request to terminate the individual examination of Grobest and Commerce’s decision to assign a 25.76% antidumping duty rate using adverse facts available after Grobest failed to cooperate with the examination. The Federal Circuit affirmed. Given Grobest’s failure to cooperate in the examination and the lack of any specific challenge to Commerce’s corroboration analysis, the application of the Vietnam-wide rate was amply supported by the record. Commerce was reasonable in treating Grobest as a mandatory respondent with no right to escape review once it was selected for individual examination pursuant to the Trade Court’s Final Judgment. Nor was Commerce required by any statutory or regulatory authority to rescind the court-ordered individual examination simply because Grobest no longer wished to proceed, regardless of the timing of its rescission request. View "Viet I-Mei Frozen Foods Co. v. United States" on Justia Law

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Magnesium metal is produced using the “Pidgeon” process, which involves stainless steel reaction vessels called retorts. After approximately 60 days of use in multiple cycles of manufacturing, retorts become unsuitable for the production of magnesium and are recycled; the recycled steel is used to produce new retorts. In 1995, the Commerce Department entered an antidumping order on magnesium metal from China. In 2010, Commerce provided notice of an opportunity to seek review of the order. TMI, a foreign exporter of magnesium produced in China, and USM, a domestic producer, requested review of TMI’s sales. Commerce solicited information, including TMI’s business records, surrogate value and country selection, and freight rates, then constructed a normal value for magnesium by creating surrogate values for the raw materials used in the manufacturing process. It did not include a surrogate value for steel retorts, treating retorts as indirect materials and accounting for their cost as overhead. Commerce explained that “retorts are not physically incorporated into the final product” and “are more similar to a kiln or furnace.” Retorts are reusable and “are not replaced so regularly as to represent a direct factor rather than overhead.” Following remand, Commerce affirmed its finding that retorts are properly treated as factory overhead. The Trade Court affirmed. The Federal Circuit affirmed. The relative cost of retorts provides no reason to reject Commerce’s findings as unsupported by substantial evidence. View "US Magnesium, LLC v. United States" on Justia Law

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Sigma-Tau imported two chemical products, both stabilized forms of the compound carnitine. Carnitine is a naturally occurring amino acid derivative and an important nutrient in the human body, where it serves to transport long-chain fatty acids into mitochondria, the centers for energy production within each cell. Our bodies obtain carnitine exogenously, from food, and also produce it endogenously, by breaking down and reforming protein. United States Customs and Border Protection initially classified the products under a subheading of the Harmonized Tariff Schedule of the United States (HSTUS) that carries a duty. Sigma-Tau protested, arguing that the products should be classified under HTSUS heading 2936 (which encompasses “provitamins and vitamins”), subheading 2936.29.50, a duty-free classification. The Court of International Trade concluded that Sigma-Tau’s products should be classified under a different subheading, 2923.90.00, making them ineligible for duty-free treatment. The Federal Circuit reversed, agreeing with Sigma-Tau that its carnitine products are properly classified under that heading, because carnitine is a vitamin in neonates. View "Sigma-Tau Healthscience, Inc. v. United States" on Justia Law

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OtterBox imports protective cases designed for smartphones. The Customs Department classified the cases as “similar containers” under the Harmonized Tariff Schedule (HTSUS) subheading 4202.99.00 with a duty rate of 20% ad valorem. OtterBox paid duties at the 20% rate, and the goods were liquidated. OtterBox’s protest was deemed denied. In the Court of International Trade, Otterbox cited 19 U.S.C. 1515, alleging that the merchandise should have been classified as “other articles of plastics” under HTSUS subheading 3926.90.99, at a duty rate of 5.3% ad valorem. The Trade Court agreed, and the Federal Circuit affirmed,finding that the cases are not classifiable as “similar containers” under Heading 4202, but are properly classified under Heading 3926, as other articles of plastics. To fall under the general phrase “similar containers,” the merchandise must possess the same essential characteristics or purposes that unite the exemplars and noted that four characteristics unite the exemplars of Heading 4202: organizing, storing, protecting, and carrying. The Otterbox products “allow an article to be placed inside them and/or taken out without much effort by opening or closing the receptacle” and do not organize, store, or carry. While the listed examples “are not ones which permit the use of the enclosed item,” the electronic devices enclosed by the OtterBox merchandise “retain their full, 100 percent functionality while inside an OtterBox.” View "Otter Prods, LLC v. United States" on Justia Law

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The Commerce Department determined that a Vietnamese manufacturer of wind towers was selling its products in the U.S. at about 51.5% below normal value and imposed antidumping duties under 19 U.S.C. 1673. Commerce used statutory calculation methods that apply when imported goods come from a nonmarket economy, as the wind towers at issue do. The Court of International Trade affirmed. The Federal Circuit reversed in part, with respect to Commerce’s use of packing weights rather than component weights in its calculation of surrogate values. The court affirmed Commerce’s determination not to use Korean purchase prices for flanges, welding wire, and wire flux. The court vacated and remanded Commerce’s overhead determination with respect to jobwork charges, erection expenses, and civil expenses. View "CS Wind Vietnam Co., LTD. v. United States" on Justia Law