The U.S. Court Of International Trade Imposes Limits On Commerce's Scope Enforcement Activities

Over the last decade, the U.S. Department of Commerce and U.S. Customs & Border Protection (CBP) have stepped up their enforcement activities. Those efforts have resulted from additional appropriations and new investigatory tools bestowed by Congress, as well as the more stringent application of existing enforcement mechanisms by the agencies themselves.

It is widely known that Commerce has conducted a record number of investigations since 2015 that have resulted in nearly 190 new antidumping and countervailing duty orders on a broad range of products from a number of countries. What is less known is that Commerce has committed significant resources in recent years to address products that are not clearly within the scope of existing orders. Commerce has increasingly taken an enforcement posture in answering whether certain products fall within the scope of such orders. That is especially true when Commerce answers whether potentially subject goods entered into the United States as part of a set or kit should be subject to an order.

Over the past month, the U.S. Court of International Trade (CIT) has issued two opinions that remind us of the limits to Commerce's scope enforcement activities. First, in MacLean Power, L.L.C. v. United States, Judge Jane A. Restani faulted Commerce for unreasonably relying on its mixed media analysis to address a fully assembled, distinct product. In Star Pipe Products v. United States, Chief Judge Stanceu concluded that Commerce failed to complete all of the steps that the relevant regulation requires. These opinions highlight a few of the boundaries within which Commerce must operate when it conducts a scope inquiry.

Background

As of March 6, 2019, there are 482 antidumping and countervailing duty orders in effect. Each order contains a “scope,” which consists of two parts. The first part describes the “class or kind” of merchandise covered by the order. The second component identifies the merchandise's “country of origin.”

After Commerce issues an order, questions understandably arise as to whether certain products fall within an order's scope. Commerce's regulations authorize the agency to conduct a scope inquiry to answer such questions. See 19 C.F.R. § 351.225.

A scope inquiry involves three steps. See Meridian Prods., LLC v. United States, 851 F.3d 1375, 1381-82 (Fed. Cir. 2017). First, Commerce must examinethe order's scope to determine whether it contains an ambiguity and, thus, is susceptible to...