RESTANI, Judge:
Previously, this matter was before the court on Plaintiff OTR Wheel Engineering, Inc.'s ("Plaintiff") motion for judgment on the agency record pursuant to USCIT Rule 56.2. See OTR Wheel Eng'g, Inc. v. United States, 853 F.Supp.2d 1281, 1283 (CIT 2012). Plaintiff, an importer of pneumatic off-the-road ("OTR") tires from the People's Republic of China ("PRC"), challenged the U.S. Department of Commerce's ("Commerce") final scope ruling regarding an antidumping duty ("AD") order
The court ruled that Commerce lacked substantial evidence for its finding in the Final Scope Ruling that Plaintiff's tires did not fall within a scope exclusion to the Tire Orders for tires designed for turf, lawn, and garden application. OTR Wheel, 853 F.Supp.2d at 1290. The court further concluded that Plaintiff's request for the court to instruct Commerce to exclude the tires from the scope of the Tire Orders was not warranted. Id. Instead, the court remanded the matter to Commerce for a more in depth evaluation pursuant to the factors laid out in 19 C.F.R. § 351.225(k)(2).
Upon remand, Commerce employed the (k)(2) factors to conclude again that Plaintiff had not demonstrated that its tires fell within the scope exclusion. Final Redetermination Pursuant to Court Remand, (Nov. 9, 2010), App. of Docs Supporting Def.'s Resp. to Pl.'s Comments on Final Redetermination Pursuant to Ct. Remand, Tab 8 ("Remand Results"). Because Commerce complied with the court's remand instructions by providing a more thorough analysis under section 351.225(k)(2) and because Plaintiff's objections are without merit, the court sustains the Remand Results.
In September 2008, Commerce imposed the Tire Orders on certain new pneumatic OTR tires from the PRC.
AD Order, 73 Fed. Reg. at 51,624-25 (footnotes with definitions omitted). The Tire Orders also excluded certain tires from the scope including, "tires of a kind designed for use on ... vehicles for turf, lawn and garden ... applications." Id. at 51,625.
In February 2011, Plaintiff filed a scope ruling request, asking Commerce to find that Trac Master and Traction Master tires imported by Plaintiff fall within this exclusion. Scope Ruling Request: OTR Wheel Engineering, Inc. Lawn & Garden Tires, (Feb. 11, 2011) Pl.'s App., Ex. A, at 4. Plaintiff argued that the plain scope language was dispositive in excluding Plaintiff's Trac Master and Traction Master tires. Id. Bridgestone Americas, Inc. and Bridgestone Americas Tire Operations, LLC (collectively "Bridgestone") filed comments opposing Plaintiff's exclusion request.
In April 2011, Commerce issued its Final Scope Ruling, finding that the tires were not excluded from the Tire Orders. Final Scope Ruling at 8. Pursuant to 19 C.F.R. § 351.225(k)(1), Commerce stated that it found the description of the merchandise contained in the petition, the initial investigation, and the determinations of the Secretary of Commerce and the ITC to be dispositive. Id. at 6. Using data from the Tire and Rim Association ("TRA") and the ITC's injury determination, Commerce decided that tires with R-1 and R-4 type treads, like Plaintiff's, are used for farming, light industrial service, and highway mowing and therefore are not excluded from the scope of the Tire Orders. Id. at 7-8. As a result, Commerce found it unnecessary to conduct further analysis considering the additional factors
Pursuant to the court's remand in OTR Wheel, Commerce conducted a more expansive analysis under 19 C.F.R. § 351.225(k)(2). See Remand Results at 12-23. After agreeing with the court's opinion that the analysis under 19 C.F.R. § 351.225(k)(1) was not dispositive of whether the Trac Master and Traction Master tires were "designed for use" on vehicles for turf, lawn, and garden applications, Commerce undertook the five-factor (k)(2) test. Remand Results at 11. Guided by new record evidence regarding the physical characteristics of the tires and the way in which Plaintiff marketed its tires and consumers used the tires, Commerce concluded that the tires do not fall within the scope exclusion. Id. at 18.
Plaintiff again challenges Commerce's findings, citing errors in Commerce's 19 C.F.R. § 351.225(k)(2) analysis and requesting reevaluation under 19 C.F.R. § 351.225(k)(1). See Comments on Final Results of Redetermination Pursuant to Court Remand ("OTR Comments") at 24. Defendant United States ("Defendant") responds that Commerce's determination was supported by substantial evidence, and the record fails to establish that Plaintiff's tires are "unambiguously designed for use on vehicles for turf, lawn, and garden appliances." Def.'s Resp. to Pl.'s Comments ("Def.'s Resp.") at 18. Defendant therefore requests that the court sustain Commerce's Remand Results. Id.
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). Commerce's final scope determination will be upheld unless it is found "to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).
Plaintiff submits that the scope question may be resolved under a (k)(1) analysis in light of the recent decision in Legacy Classic Furniture, Inc. v. United States, 867 F.Supp.2d 1321 (CIT 2012).
Plaintiff argues that the court should revisit the (k)(1) analysis in light of Legacy Classic. OTR Comments at 20-24. Plaintiff claims that because the Tire Orders' exclusion of tires for "turf, lawn, and garden" applications is unqualified, the exclusion applies to all tires designed for such use, even if those tires may also be designed
Plaintiff also points to Customs' recent classification of OTR's tires under the Harmonized Tariff Schedule to support its characterization of the tires. OTR Comments at 4-5. Plaintiff asks the court to take judicial notice of the ruling, relying on Win-Tex Prods. v. United States, 829 F.Supp. 1349, 1351-52 (CIT 1993) (taking judicial notice of an unpublished scope order interpreting the same scope language as the one challenged in that case). OTR Comments at 6. The court declines to do so. The authority to clarify the scope of AD and CVD orders rests solely with Commerce, and Customs' rulings are not within the list of factors to be considered under 19 C.F.R. § 351.225(k). See Crawfish Processors Alliance v. United States, 483 F.3d 1358, 1361 (Fed.Cir.2007). Additionally, Win-Tex involved judicial notice of a conflicting decision on essentially the same subject by the same agency. 829 F.Supp. at 1351 52. Classification decisions by Customs and scope rulings by Commerce may be in conflict without calling into question the reasonableness of either, even assuming both agencies apply the same legal standard.
In reviewing Commerce's analysis under 19 C.F.R. § 351.225(k)(2) the court will not "substitute [its] judgment for that of Commerce ... nor [will] it allow the parties to retry factual issues ... de novo." See Inland Steel Indus., Inc. v. United States, 188 F.3d 1349, 1359 (Fed. Cir.1999) (applying the substantial evidence standard of review to factual determinations by Commerce in a trade remedy case). Under this standard, the court will not re-weigh the evidence presented to Commerce, and will uphold Commerce's determination provided it chooses from among the range of possible reasonable conclusions based on the record. Commerce conducted a thorough reconsideration of the scope of the Tire Orders pursuant to the five (k)(2) factors and weighed evidence that was in conflict or inconclusive. Nonetheless, Plaintiff asserts that Commerce erred and its decision must be overturned.
The first of the (k)(2) factors instructs Commerce to review the physical characteristics of the product. 19 C.F.R. § 351.225(k)(2)(i). Commerce relied in particular on the R-1 and R-4 tread design of Plaintiff's tires, which cause turf disturbance because they are designed to dig into uneven or moist ground. Remand Results at 12-14. On the other hand, Commerce was not persuaded by the relatively small size of the tires
Although the court is not persuaded by Commerce's far-fetched conclusion that the picture on the tires could be a go-cart, one not reiterated in Defendant's brief, the court agrees with Commerce's conclusion that the image is inconclusive. Commerce, therefore, was permitted to disregard the evidence as unhelpful, as it did. Similarly, although size is certainly one consideration in classifying the tires at issue in this case, Commerce's explanation that size is not determinative is reasonable given the acknowledged range of tire sizes covered by the scope of the Tire Orders and the decision to base scope, not on the size of the tire, but on its intended use at the time of design. See AD Order, 73 Fed. Reg. at 51,624 ("OTR tires included in the scope of the order range in size (rim diameter) generally but not exclusively from 8 inches to 54 inches") (emphasis added). Commerce's decision to rely more heavily on tread type, as opposed to size or the inconclusive tire markings, was not unreasonable.
In terms of the expectations of the ultimate purchaser, Commerce addressed and discounted Plaintiff's marketing materials and its communications with its main customers during the design process.
Commerce concluded that the correspondence between Plaintiff and its customers did not reference necessarily the subject tires. This determination is dubious. Commerce also determined that Kubota's BX Series tractors, on which Plaintiff asserts its tires are standard features, are not the type of vehicles used solely for lawn, turf, and, garden applications. The court cannot say, however, that this further conclusion is unsupported. See Remand Results at 15. Commerce noted in particular that the Kubota BX series tractors are designed for "digging, earth-moving or loading, and log carrying" according to the marketing materials submitted by Plaintiff. Id. at 15. This fact rendered questions about the scope of the communications between Plaintiff and its customer less important. Accordingly, it was not unreasonable for Commerce to conclude that the type of vehicle, for which Plaintiff claims it designed the tires, falls outside the realm of the more traditional gardening applications seemingly the subject of the scope exclusion.
With respect to the ultimate use of the product, Commerce relied in part on the
Although Plaintiff is correct that this scope exclusion is based on design rather than actual use, the ultimate use factor addressed by Commerce is relevant circumstantial evidence of the likely intent of Plaintiff at the time it designed the products. Because the parties agree that the tires are in fact used for a variety of purposes that go beyond turf, lawn, and garden applications, Commerce could conclude that Plaintiff's assertion that the tires were designed primarily for lawn, turf, and garden applications is undermined. See Remand Results at 18.
Plaintiff essentially agrees with Commerce's remand determination that the channels of trade in this case "shed[] no light on the fundamental issue of whether OTR's Trac Master and Traction Master tires were `designed for use' on vehicles with turf, land and garden applications." OTR Comments at 18; see also Remand Results at 19. Therefore, neither party believes that this factor is entitled to much weight in deciding the scope question.
Commerce acknowledged that the marketing materials submitted by OTR describe the subject tires as "OTR's premium Lawn and Garden Tire." Remand Results at 19. Nonetheless, Commerce gave substantial weight to Plaintiff's website that classified the subject tires within the "farm" and "utility"
The court finds that Commerce has discretion to allocate relative weight to each piece of evidence, and the court will not entertain the invitation to re-weigh the evidence itself. As explained, supra, marketing materials are relevant circumstantial evidence of the design standard set out in the scope exclusion clause. Although Commerce was presented with marketing materials that indicated the tires were advertised for lawn and garden use, the court cannot say that Commerce erred in determining that evidence largely was negated by Plaintiff's classification of the tires on its own website as only utility and farm tires, both falling outside Commerce's reasonable
Commerce undertook the "further evaluation," pursuant to the factors set forth in 19 C.F.R. § 351.225(k)(2), as directed by OTR Wheel. The best that can be said for Plaintiff's case is that there is contradictory evidence. In such a case, Commerce may reach one supported conclusion or the other. Commerce has met its burden of making a full and complete inquiry and has undertaken a reasonable analysis. Commerce's determination that Plaintiff's tires do not fall within the scope exception is one that is supported by substantial evidence, and therefore, Commerce's Remand Results are SUSTAINED. Judgment will be entered accordingly.