No Duty to Notify a Company Commerce Ruling Will Be Adverse to Its Interests: CIT Scope Case

AA Metals claimed that it wasn't given a chance to remedy a deficiency on the record which led the agency to include its imports under the orders. But Restani said that there were no such deficiencies in AA Metals' answers and that the agency's ruling merely went against the exporter's interests.

"AA Metals appears to read 'deficient' to mean 'in conflict with the desires of the company under investigation,'" the judge said. "Such an understanding would twist the meaning of the statute beyond recognition. In addition to the textual argument, to assume that Commerce has a duty to inform and allow for correction every time the agency makes a decision that is in conflict with the position of a party would render Commerce’s duty to implement EAPA completely unadministrable. It is not Commerce’s duty to notify a company that there will be a ruling adverse to its interests."

The scope ruling comes as part of an Enforce and Protect Act investigation on a potential transshipment scheme by AA Metals using Chinese-origin aluminum entered through Turkey. CBP asked for a scope ruling after being unable to find whether certain products in two different scenarios were in the scope of the orders. The goods in "Scenario 2" are defined as "Chinese-origin aluminum sheet of a thickness covered by the scope re-rolled in Turkey to a thickness covered by the scope."

AA Metals argued that Commerce illegally failed to address (k)(1) factors in its scope finding since the language of the scope is not clear. While Commerce said the scope language itself was dispositive, Restani also held that the agency referred to various (k)(1) factors including language in the petition and past scope decisions.

AA Metals "has not made it clear how further examination of the initial investigation would change the result here," the opinion said. "Although under the applicable regulation every (k)(1) factor must be considered in some way, the amount of reliance on each factor differs from case to case, as facts change, as analyses differ, and as different arguments are presented. If an error did occur, as is by no means clear," AA Metals "has not demonstrated how remanding this matter for correction of the alleged error would alter the outcome of the antidumping or countervailing proceedings for the parties involved."

The court also held that the Scenario 2 merchandise falls within the scope of the orders, leaning on a 2021 determination from Commerce in which it addressed claims against F-tempered products' inclusion under the orders. The agency said that petitioners are "uniquely situated to opine on the definition of merchandise" under investigations. "The 2021 Final Determination is highly persuasive, as it clearly addressed a (k)(1) scope factor and as it effectively responded to the allegation that F-tempers were not covered by the ITC injury determination," the judge said. "Therefore, if the F-temper re-roll stock meets the definition of aluminum sheet in the first paragraph of the scope language, it is within the scope of the Orders."

Restani concluded that an additional substantial transformation analysis, as demanded by AA Metals, was not needed. The exporter said the test was required to find if the sheet product was a product of Turkey or China. "Commerce, however, is not required to apply this traditional test if it has administrative reasons to proceed differently," the opinion said.

(AA Metals v. United States, Slip Op. 23-29, CIT # 22-00051, dated 03/10/23, Judge Jane Restani. Attorneys: Kristen Smith of Sandler Travis for plaintiff AA Metals; Eric Laufgraben for defendant U.S. government; Peter Koenig of Squire Patton for defendant-intervenor Texarkana Aluminum)