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United Steel and Fasteners, Inc. v. United States

United States Court of Appeals, Federal Circuit

January 13, 2020

UNITED STEEL AND FASTENERS, INC., Plaintiff-Cross-Appellant

          Appeals from the United States Court of International Trade in No. 1:13-cv-00270-JCG, Judge Jennifer Choe-Groves.

          Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Sil-verman & Klestadt LLP, New York, NY, argued for plaintiff-cross-appellant. Also represented by Edward B. Ackerman; Kavita Mohan, Andrew Thomas Schutz, Washington, DC.

          Michael D. Snyder, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellant. Also represented by Robert Edward Kirschman, Jr., Patricia M. McCarthy, Joseph H. Hunt; Jessica DiPietro, Nanda Srikantaiah, Office of Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

          Before Moore, Reyna, and Stoll, Circuit Judges.


         The United States Department of Commerce appeals the United States Court of International Trade's determination that Commerce lacks authority to retroactively suspend liquidation of helical spring lock washers entered on or after the issuance date of an antidumping duty order. United Steel and Fasteners, Inc., an importer of the helical spring lock washers under investigation, cross-appeals the Court of International Trade's affirmance of Commerce's determination that its washers are within the scope of the antidumping duty order. Because we conclude that Commerce's retroactivity determination was improper and substantial evidence supports Commerce's scope ruling, we affirm.


         I. The ADD Order

         Shakeproof Assembly Components Division of Illinois Tool Works Inc. ("Shakeproof") is a U.S. domestic producer of lock washers. In 1992, Shakeproof filed a petition (the "Petition") for the imposition of antidumping duties on imports of certain helical spring lock washers from China. After examining the Petition, Commerce initiated an antidumping investigation. Commerce determined that imports of certain helical spring lock washers from China were being sold at less than fair value, and on October 19, 1993, it issued the antidumping duty order at issue in this appeal. See Certain Helical Spring Lock Washers From the People's Republic of China, 58 Fed. Reg. 53, 914 (Dep't of Commerce Oct. 19, 1993), as amended, 58 Fed. Reg. 61, 859 (Dep't of Commerce Nov. 23, 1993) ("ADD Order"). Commerce's ADD Order describes the subject merchandise as follows:

[C]ertain helical spring lock washers (HSLWs) are circular washers of carbon steel, of carbon alloy steel, or of stainless steel, heat-treated or non heat-treated, plated or non-plated, with ends that are off-line. HSLWs are designed to: (1) Function as a spring to compensate for developed looseness between the component parts of a fastened assembly; (2) distribute the load over a larger area for screws or bolts; and (3) provide a hardened bearing surface. The scope does not include internal or external tooth washers, nor does it include spring lock washers made of other metals, such as copper. The lock washers subject to this investigation are currently classifiable under subheading 7318.21.0000 of the Harmonized Tariff Schedule of the United States (HTSUS).

ADD Order, 58 Fed. Reg. at 53, 914-15.

         II. Scope Ruling

         United Steel and Fasteners, Inc., ("US&F") is a U.S. importer of lock washers that meet the specifications of the American Railway Engineering and Maintenance-of-Way Association ("AREMA").[1] US&F imports the washers under HTSUS subheading 7318.21.0090, without declaring them subject to the ADD Order.

         On April 9, 2013, US&F requested an official scope ruling from the United States Department of Commerce ("Commerce") pursuant to 19 C.F.R. § 351.225(c). In its request, US&F alleged that its washers were not covered by the ADD Order. US&F explained that United States Customs and Border Protection ("CBP") was "aware of the HTSUS clarification being utilized by US&F," and that "[a]fter reviewing US&F's response to a CBP Notice of Proposed Action, CBP is allowing USF to continue making entry under heading 7318.21.0090[] with the understanding that this scope determination was being readied and shortly filed."[2] J.A. 70.

         On July 8, 2013, without initiating a scope inquiry, Commerce issued a final scope ruling that US&F's washers are within the scope of the ADD Order based on the factors listed in 19 C.F.R. § 351.225(k)(1). Commerce also instructed CBP to suspend liquidation of "all unliquidated entries of merchandise made on or after the first day merchandise subject to the [ADD] Order was suspended for antidumping purposes and collect cash deposits on all such entries." J.A. 396. Liquidation was suspended to October 19, 1993, the date the ADD Order was issued and the first day CBP originally suspended liquidation of merchandise subject to this order. US&F appealed Commerce's scope ruling and its instructions to retroactively suspend liquidation to the United States Court of International Trade ("CIT"). United Steel & Fasteners, Inc. v. United States, 203 F.Supp.3d 1235, 1241 (Ct. Int'l Trade 2017).

         The CIT affirmed Commerce's scope ruling and reversed and remanded Commerce's retroactivity determination. Id. at 1247-48. The CIT determined that Commerce exceeded its regulatory authority by ordering retroactive suspension of liquidation back to 1993 and ordered that Commerce draft new suspension of liquidation instructions. Id. at 1248, 1255. On remand, Commerce issued new instructions to suspend liquidation on or after July 8, 2013, the date when Commerce issued the final scope ruling regarding ...

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