STANCEU, Judge:
Plaintiff Trade Associates Group, Ltd. ("Trade Associates"), a U.S. importer of candles, contests a 2011 "Final Scope Ruling" in which the International Trade Administration, U.S. Department of Commerce ("Commerce" or "the Department") construed the scope of an antidumping duty order (the "Order") on certain petroleum wax candles from the People's Republic of China ("China" or the "PRC"). Final Scope Ruling: Antidumping Duty Order on Petroleum Wax Candles from the People's Republic of China ("PRC"), Admin.R.Doc. No. 3649 (Aug. 5, 2011), available at http://ia.ita.doc.gov/download/ candles-prc-scope/candles/20110805-requestors.pdf (last visited Jan. 24, 2014) ("Final Scope Ruling"). In the Final Scope Ruling, Commerce rejected the position, expressed by Trade Associates in a 2009 request ("Scope Ruling Request"), that Commerce should determine a number of specially-shaped or holiday-themed candles to be outside the scope of the
Before the court is plaintiff's USCIT Rule 56.2 motion for judgment on the agency record. Pl.'s Mot. for J. on the Agency R., ECF No. 26 (July 25, 2012) ("Pl.'s Mot."). Defendant and defendant-intervenor National Candle Association ("NCA"), a trade association of U.S. candle manufacturers and the petitioner in the original antidumping investigation, oppose plaintiff's motion. The court remands the Final Scope Ruling for reconsideration, concluding that Commerce unreasonably interpreted the Order when placing within the scope a large number of candles made in the shapes of identifiable objects.
On September 4, 1985, NCA petitioned Commerce and the U.S. International Trade Commission ("ITC" or the "Commission") to impose antidumping duties on petroleum wax candles from China. Antidumping Pet. on Behalf of the National Candle Ass'n in the Matter of: Petroleum Wax Candles from China (Sept. 3, 1985) (Admin.R.Doc. No. 3598) ("Petition"). On August 28, 1986, following the Department's final affirmative less-than-fair value ("LTFV") determination and the ITC's affirmative material injury determination, the Department issued a final antidumping duty order. Antidumping Duty Order: Petroleum Wax Candles from China, 51 Fed.Reg. 30,686 (Aug. 28, 1986) ("Antidumping Duty Order").
Trade Associates filed the Scope Ruling Request on June 11, 2009, in which it identified 261 Chinese-origin petroleum wax candles that Trade Associates described as having the shape of identifiable objects or as being associated with Christmas or other holidays. Scope Ruling Request 2. Commerce initiated an administrative proceeding to respond directly to the Scope Ruling Request and published a notice seeking "comments from the interested parties on the best method to consider whether novelty candles should or should not be included within the scope of the Order given the extremely large number of scope determinations requested by outside parties." Petroleum Wax Candles from China: Request for Comments on the Scope of the Antidumping Duty Order & the Impact on Scope Determinations, 74 Fed.Reg. 42,230, 42,230 (Aug. 21, 2009) ("Request for Comments"). This notice used the term "novelty candles" to refer to "candles in the shape of an identifiable object or with holiday-specific design both being discernable from multiple angles." Id.
In August 2010, Commerce issued the preliminary results of the request for comments ("Preliminary Results") in which it adopted a position favorable to Trade Associates and requested further comment. Petroleum Wax Candles From the People's Republic of China: Prelim. Results of Request for Comments on the Scope of the Petroleum Wax Candles From the People's Republic of China Antidumping Duty Order, 75 Fed.Reg. 49,475 (Aug. 13, 2010) ("Prelim. Results"). On August 9, 2010 and October 13, 2010,
In the final results of its public comment proceeding ("Final Results"), issued on August 2, 2011, Commerce reversed its earlier position. Petroleum Wax Candles From the People's Republic of China: Final Results of Request for Comments on the Scope of the Antidumping Duty Order, 76 Fed.Reg. 46,277, 46,278 (Aug. 2, 2011) ("Final Results"). The Final Results incorporated by reference an "Issues and Decision Memorandum." Issues & Decision Mem. for Final Results of Request for Comments on the Scope of the Petroleum Wax Candles from China Antidumping Duty Order (July 26, 2011), A-570-504, ARP 5-10, available at http://ia.ita. doc.gov/frn/summary/prc/2011-19529-1.pdf (last visited Jan. 24, 2014) ("Decision Mem."). Commerce incorporated the Final Results by reference in the Final Scope Ruling, which it issued on August 5, 2011.
In late 2011, Trade Associates commenced this action to contest the Final Scope Ruling. Summons (Oct. 5, 2011), ECF No. 1; Compl. (Nov. 2, 2011), ECF No. 13. Plaintiff filed its motion for judgment on the agency record on July 25, 2012, Pl.'s Mot. 1, to which defendant and defendant-intervenor responded on February 19, 2013, Def.'s Resp. to Pl.'s Mot. for J. on the Agency R. (Feb. 19, 2013), ECF No. 41 ("Def.'s Resp."); Def.-Intervenor's Resp. in Opp'n to Pl.'s Mot. for J. on the Agency R., ECF No. 40 ("Def.-Intervenor's Resp."). On April 3, 2013, plaintiff filed replies. Pl.'s Reply to Def.'s Resp. in Opp'n to Pl.'s Mot. for J. on the Agency R., ECF No. 44; Pl.'s Reply to Def.-Intervenor's Resp. in Opp'n to Pl.'s Mot. for J. on the Agency R., ECF No. 46.
With leave of the court, defendant and defendant-intervenor each submitted supplemental briefs on October 31, 2013 and October 7, 2013, respectively. Def.'s Supplemental Br., ECF No. 61 ("Def.'s Supplemental Br."); Def.-Intervenor's Supplemental Br., ECF No. 58 ("Def.-Intervenor's Supplemental Br.").
The court exercises subject matter jurisdiction under section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), which grants jurisdiction over civil actions brought under section 516A of the Tariff Act of 1930 ("Tariff Act").
This case presents the question of whether the Final Scope Ruling, in placing within the scope various candles made in the shapes of identifiable objects, is based on a permissible interpretation of the scope language in the Order. Plaintiff claims on various grounds that the Final Scope Ruling is contrary to law. First, plaintiff argues that the Final Scope Ruling contravenes the Order, which plaintiff reads to exclude all candles in shapes not expressly mentioned in the pertinent Order language. Mem. of Law in Supp. of Pl.'s Mot. for J. on the Agency R. 14-22 (July 25, 2012), ECF No. 26 ("Pl.'s Mem."). Second, plaintiff argues that secondary sources examined in the Department's LTFV investigation, including the petition, confirm that the scope of the Order excludes candles other than those in the identified shapes. Id. at 22-34. Third, plaintiff submits that the Final Scope Ruling abandons the Department's twenty-five year practice of excluding candles in shapes of identifiable objects from the Order, undermining needed finality and certainty in the administration of antidumping duty orders. Id. at 38-40. In the alternative, plaintiff argues that even if the court determines that the Department's interpretation of the pertinent Order language is reasonable, the court still should determine that the Final Scope Ruling is unreasonable because the candles discussed in the petition "clearly fall" within an exception Commerce established for "figurine" candles. Id. at 34-38.
As provided in section 731 of the Tariff Act, Commerce conducts an antidumping investigation to determine whether "a class or kind of foreign merchandise is being, or is likely to be, sold in the United States at less than its fair value." 19 U.S.C. § 1673(1). The statute directs Commerce to include in an antidumping duty order "a description of the subject merchandise, in such detail as the administering authority deems necessary." Id. § 1673e(a)(2). In section 351.225 of its regulations, Commerce established a method for conducting scope inquiries and issuing scope rulings, explaining therein that issues "as to whether a particular product is included within the scope of an antidumping... duty order ... can arise because the descriptions of subject merchandise contained in the Department's determinations must be written in general terms." 19 C.F.R. § 351.225(a). Antidumping duty orders "may be interpreted as including subject merchandise only if they contain language that specifically includes the subject merchandise or may be reasonably interpreted to include it." Duferco Steel, Inc. v. United States, 296 F.3d 1087,
The scope language at issue in this case has remained essentially unchanged since the Order originally was published in 1986. The 1986 Order contained the following scope language:
Antidumping Duty Order, 51 Fed.Reg. at 30,686. The Order contains no other language defining the scope. When specifying the scope of the Order in subsequent issuances, Commerce has left essentially unchanged the first two sentences quoted above. Although Commerce made some modifications and additions in subsequent issuances, these changes solely concern the conversion of the Tariff Schedules of the United States ("TSUS") to the nomenclature of the Harmonized Tariff Schedule of the United States ("HTS" or "HTSUS"), which took effect on January 1, 1989.
Plaintiff sought, and Commerce denied, exclusions for candles in the shapes of acorns, beach balls, caramel apples, cupcakes, flip flops, floating leaves, flowers, fruits, garden birdhouses, haunted houses, metallic balls, pears, snowmen, trees, vegetables, witches' hats, and woodies with surfboards, among many others. Scope Ruling Request, Ex. 1; Final Scope Ruling 6-35. The candles for which plaintiff sought exclusion are types of object-shaped candles not specifically identified in the second sentence of the scope language, i.e., these are candles other than "tapers, spirals, and straight-sided dinner candles; rounds, columns, pillars, votives; and various wax-filled containers." Antidumping Duty Order, 51 Fed.Reg. at 30,686.
Expressed according to the principle set forth in Duferco, 296 F.3d at 1089, the question presented in this case is whether the scope language of the Order "may be reasonably interpreted to include" candles in the shapes of identifiable objects that Commerce determined to fall outside the Department's "figurine" exception. The court concludes that the Order cannot reasonably be so interpreted.
Commerce presented its interpretation in the Decision Memorandum, addressing both the first and second sentences of the scope language. As to the word "certain" in the first sentence ("The products covered by this investigation are certain scented or unscented petroleum wax candles made from petroleum wax and having fiber or paper-cored wicks"), Commerce reasoned that "[t]hough the word `certain' indicates that the Order does not include all petroleum wax candles, the phrase is ambiguous and cannot itself define what types of petroleum wax candles are excluded." Decision Mem. 7. Rejecting the argument of Trade Associates that the word "certain" in the first sentence must be read to refer to the specific candle shapes identified in the second sentence ("... tapers, spirals, and straight-sided dinner candles; rounds, columns, pillars, votives; and various wax-filled containers"), Commerce explained that "the Department has given effect to the word `certain' by excluding those types of candles for which there is record evidence that the NCA intended their [sic ] exclusion from the Order." Id. Regarding the second sentence, Commerce further reasoned that "the shapes listed in the scope of the Order" do not constitute "an exhaustive list of shapes, but simply an illustrative list of common candle shapes." Final Results, 76 Fed.Reg. at 46,278.
The Department's interpretation of the scope language is unreasonable in several respects and therefore is unsustainable under the Duferco standard. The Department's construction of the scope language begins with the proposition that the scope of the Order includes, as a general matter, candles of any shape. For this proposition to withstand scrutiny under Duferco, the scope language on its face must be capable of being reasonably interpreted so as to include candles generally without regard to shape. But nothing in the scope language reasonably supports this interpretation. The first sentence cannot be so interpreted, for it provides that not all, but only "certain," i.e., unspecified, petroleum wax candles with fiber or paper-cored wicks are included in the scope. The most
A second flaw in the Department's interpretation is the suggestion that the word "certain" in the first sentence of the scope language should be read without reference to the second sentence. Because the relevant scope language consists of only the two sentences, any reasonable construction of the term "certain ... petroleum wax candles" as used in the first sentence must find meaning in the second sentence. If, instead, the scope language is read, as Commerce does, to mean that as a general matter candles made in any shape fall within the scope of the Order, then the second sentence is rendered meaningless and superfluous as it would do nothing to define the scope. Such a construction is impermissible not only in failing to give effect to one of the two sentences that comprise the scope language but also in leaving only the first sentence to function as the entire operative scope language. The first sentence, however, which provides that "certain," i.e., unspecified, petroleum wax candles with fiber or paper-cored wicks are within the scope, cannot by itself function as a scope definition, as Commerce itself recognized. See Decision Mem. 7 ("Though the word `certain' indicates that the Order does not include all petroleum wax candles, the phrase is ambiguous and cannot itself define what types of petroleum wax candles are excluded.") (emphasis in original). In this way, the Final Scope Ruling adopts an interpretation resulting in "scope" language that makes no meaningful attempt to define the scope. Commerce could not have intended to promulgate an antidumping duty order that leaves the scope of that order essentially undefined.
A third flaw is the Department's grounding its construction of the word "certain" on matters entirely outside of the scope language. According to the Decision Memorandum, this word must depend for its meaning on "record evidence" from which Commerce concludes that the petitioner intended that certain candle types would be outside the scope of the investigation. Decision Mem. 7. This analysis is contrary to the governing statutory provisions, under which the responsibility for defining the scope falls on Commerce, not the petitioner. See 19 U.S.C. §§ 1673(1), 1673e(a)(2). As the Court of Appeals recognized in Duferco, 296 F.3d at 1096, "[t]he critical question is not whether the petition covered the merchandise or whether it was at some point within the scope of the investigation." While "[t]he purpose of the petition is to propose an investigation, ... [it is] Commerce's final determination [that] reflects the decision that has been made as to which merchandise is within the final scope of the investigation and is subject to the order." Id.
Because the scope language of the Order cannot reasonably be interpreted to include many of the candles identified in the Scope Ruling Request, the court decides that the Final Scope Ruling is contrary to law and must be remanded to Commerce for reconsideration. Defendant and defendant-intervenor put forth numerous arguments to the contrary, arguing that the court should affirm the Final Scope Ruling. As the court discusses below, none of these arguments has merit.
Defendant first raises several arguments that it grounds in the principle of judicial
The purpose of judicial estoppel is to prevent a party who assumed a certain position in a legal proceeding, and who succeeded in maintaining that position, from subsequently assuming a contrary position simply because its interests have changed. See Trustees in Bankr. of N. Am. Rubber Thread Co. v. United States, 593 F.3d 1346, 1353-54 (Fed.Cir.2010) (citing New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001)). The judicial estoppel principle is based in equity and is a matter for the court's discretion. Id. at 1351.
Defendant's judicial estoppel arguments fail because Trade Associates argued, both in the Scope Ruling Request and in its rebuttal comments following the Preliminary Results, that the Order should be interpreted, based on plain meaning, to pertain only to the candle shapes specifically identified in the scope language of the Order. See Scope Ruling Request 21 ("[T]he items are not within the scope of the Order because they are not in the shape or size of any of the exemplars in the language of the scope."); Rebuttal Comments by Trade Assocs. Grp., Ltd. on Prelim. Results of Request for Comments on the Scope of the Petroleum Wax Candles from China Antidumping Duty Order 3-4 (Sept. 29, 2010) (Admin.R.Doc. No. 3612) ("The plain language of the Order clearly limits the scope to [the identified shapes] ....") (footnote omitted). Commerce itself acknowledged in the Decision Memorandum that Trade Associates had made the plain meaning argument during the scope inquiry. Decision Mem. 7 ("[Trade Associates] contend[s] that the phrase in the scope text `certain petroleum wax candles' indicates that the scope covers only those enumerated shapes/types in the Order.") (emphasis in original).
It is true that Trade Associates made at least one argument during the scope inquiry premised on the presence or possible presence of ambiguity in the scope language of the Order. For instance, in its case brief to the Department, Trade Associates argued that the scope interpretation Commerce preliminarily adopted in the Preliminary Results "resolves any ambiguity concerning the scope of the Order with respect to candle shapes not specifically mentioned." Comments by Trade Assocs. Grp., Ltd. on Prelim. Results of Request for Comments on the Scope of the Petroleum Wax Candles from China Antidumping Duty Order 3 (Sept. 10, 2010) (Admin.R.Doc. No. 3608) (citing Prelim. Results, 74 Fed.Reg. at 42,231). But this statement was in addition to the plain meaning argument Trade Associates also advanced during the scope inquiry.
In summary, it was permissible for Trade Associates to present arguments in the alternative during the scope inquiry and then advance before the court one of those arguments, which is grounded in the plain meaning of the scope language at
Defendant next argues that "Commerce reasonably determined that the scope language is ambiguous based on the broad language of the first sentence and the language of limitation reflected in the second sentence." Def.'s Resp. 11. According to defendant, this ambiguity permits Commerce to interpret the Order broadly to include candles made in shapes not mentioned in the second sentence and, in so doing, to take into consideration the sources identified in section 351.225(k)(1) of its regulations, including the petition, initial investigation, and prior scope determinations.
Defendant's argument is unavailing. The premise that the scope language is in some way ambiguous is insufficient to support a conclusion that the Final Scope Ruling is a reasonable interpretation of the scope language of the Order. Under Duferco, the inquiry that is controlling in this case is whether the scope language "may be reasonably interpreted to include," Duferco, 296 F.3d at 1089, candles that are made in the shape of specific objects but that do not fall within the Department's figurine candle exception. For the several reasons the court discussed above, the scope language cannot be so interpreted.
The second sentence could have avoided any ambiguity were it to have stated expressly that the scope includes only candles of the specified shapes and types. One could argue that the second sentence, read in context, is ambiguous in that it could be construed either as "an illustrative list of common candle shapes," as Commerce considered it to be, Final Results, 76 Fed.Reg. at 46,278, or as an exhaustive list of the candle shapes and types that fall within the scope of the Order.
In short, the scope language is not ambiguous in a way that makes it susceptible to a reasonable construction under which Commerce may hold candles in the shapes of identifiable objects to be within the scope of the Order. The court, therefore, rejects the arguments defendant premises on the presence of ambiguity in the scope language. For the same reason, the court also rejects defendant-intervenor's similar arguments that the second sentence of the scope language "is language of inclusion, not exclusion" and that "[i]f all shapes were to be excluded other than those listed, then the language would say `are only sold in the following shapes.'" Def. Intervenor's Resp. 17 (emphasis in original).
Defendant argues that the mere presence of any form of ambiguity in the scope language is sufficient under Duferco to justify reliance on the sources identified in § 351.225(k)(1) and, if those sources are not dispositive, the criteria listed in § 351.225(k)(2). Def.'s Supplemental Br. 8. Defendant's argument is correct in one respect: the opinion in Duferco does not expressly state that Commerce is in some instances legally precluded from considering the § 351.225(k) factors. It does not follow, however, that the Department's interpretation of the scope language is sustainable in this case. Again, Duferco holds that Commerce may not place merchandise within the scope of an order where the scope language of that order may not reasonably be interpreted to include that merchandise. Duferco, 296 F.3d at 1089. That is precisely what Commerce did in the Final Scope Ruling. As the Court of Appeals reasoned in Duferco, the petition and the investigation "may provide valuable guidance" but "cannot substitute for language in the order itself." Id. at 1097. The court, therefore, need not reach the question of whether the Final Scope Ruling erred in considering the § 351.225(k)(1) factors. It is sufficient here to conclude, as the court does, that there is no reasonable construction of the scope language under which the Order could include those plaintiff's candles that were made in shapes that resemble identifiable objects.
Defendant also argues that "the nature of the parties' contentions during the administrative process (that is, debating the content of the section 351.225(k)(1) sources) indicates that the parties agreed that the scope language is ambiguous." Id. This argument fails because the question of ambiguity of scope language, even were it determinative in this case, is not an
The court disagrees with defendant's argument that Novosteel is controlling on the issue this case presents. The scope-related issues in Novosteel, which affirmed a decision of this Court to uphold a challenged scope determination, concerned whether Commerce reached a valid finding that the product at issue in the case was "flat-rolled" within the meaning of that term in the scope language of an antidumping order and whether Commerce correctly included the product within the scope even though the tariff classification of the product was not among those expressly listed in the scope language. See Novosteel, 284 F.3d at 1268-69. Rather than Novosteel, the court considers Duferco to be the precedent establishing a rule of law controlling the outcome of this case. In Novosteel, the Court of Appeals reached its determination of a rule of law as a matter of first impression. Id. at 1095 ("This case presents an issue of first impression — whether the scope orders can be interpreted to cover subject merchandise even if there is no language in the orders that includes or can be reasonably interpreted to include the merchandise."). The holding of Novosteel, a decision that preceded Duferco, does not compel a conclusion that Commerce reasonably construed the scope language at issue here. To the contrary, the Court of Appeals drew a contrast in Duferco where it cited Novosteel as recognizing that "scope orders must necessarily be written in general terms, 19 C.F.R. § 351.225(a)(2001), and [that] the `Commerce Department enjoys substantial freedom to interpret and clarify its antidumping orders,'" under 19 C.F.R. § 351.225(k)(1). Duferco, 296 F.3d at 1096-97 (quoting Novosteel, 284 F.3d at 1269). Again, the critical point is that review of the petition and the investigation "may provide valuable guidance" but "cannot substitute for language in the order itself." Id. at 1097.
Further alluding to the "general terms" language of 19 C.F.R. § 351.225(a), defendant argues that Commerce intentionally, and permissibly, could have written openended scope language in the Order in anticipation of candle shapes or types not in existence when the Order was promulgated. Oral Tr. 33-34. Defendant submits that Court of Appeals precedent does not "dictate how Commerce is to craft scope language." Def.'s Supplemental Br. 7. Concerning the question of whether the interpretation adopted in the Final Scope Ruling would construe scope language in a matter too open-ended to define the scope, Defendant argues that Duferco does not "hold that this Court is authorized to determine whether scope language `fails' as scope language." Id. These arguments miss the point of the inquiry the court must conduct in this case.
The question of whether Commerce had the discretion to leave the scope as open-ended as defendant suggests is not before the court. Nor is the question of whether the court permissibly may, in defendant's words, "determin[e] the sufficiency of the scope language as scope language." Id. at 8. As the court has emphasized, the relevant question is whether the scope language reasonably may be interpreted to include the object-shaped candles that the Final Scope Ruling held to be subject to the Order. In answering that question, the court concludes that the Department's interpretation of the scope language is
Both defendant and defendant-intervenor rely on King Supply Co., LLC v. United States, 674 F.3d 1343 (Fed.Cir.2012) ("King Supply") in support of the Final Scope Ruling. Defendant posits that the second sentence of scope language at issue in King Supply is analogous to the second sentence of the scope language at issue in this case. Def.'s Supplemental Br. 9. Defendant notes that in King Supply, the Court of Appeals "rejected this Court's finding that the scope should have used direct qualifiers, such as `for example' or `principally used,' if the second sentence was to be only exemplary." Id. Defendant-intervenor makes a similar argument, maintaining that "[t]he absence of such qualifying language does not preclude an inclusive interpretation of the scope language." Def.-Intervenor's Resp. 18. These arguments do not convince the court that the Final Scope Ruling is sustainable upon judicial review. The court need not decide, and does not decide, whether the second sentence of the scope language at issue in this case expressly limits the scope of the Order to the specified candle shapes and types. As the court discussed herein, the second sentence might be construed as expressly limiting the scope, or alternatively, as listing examples of the common candle shapes that the Order includes. However, even under the latter construction, the Order is not reasonably susceptible to an interpretation under which the Order includes candles in the shapes of identifiable objects that are not in common candle shapes.
Moreover, the holding in King Supply sheds no light on the issue this case presents. King Supply concerned carbon steel butt-weld pipe fittings that Commerce ruled to be subject the following scope language: "These formed or forged pipe
Defendant-intervenor points to the sources identified in 19 C.F.R. § 351.225(k)(1) to argue that substantial evidence supports the Department's interpretation of the scope language in the Order. Defendant-intervenor argues that the Petition sought an antidumping investigation that generally included all shapes of candles, with only a few exceptions, and that the Commission's injury determination construed the scope of the investigation in this way. Def.-Intervenor's Resp. 14-17. But under Duferco, the language of the Order must take precedence over the guidance provided in the sources identified in § 351.225(k), including the petition and the ITC's injury determinations. Duferco, 296 F.3d at 1097. Defendant-intervenor correctly points out that the ITC construed the scope of the investigation to include petroleum wax candles "`in various shapes and sizes, including tapers, spirals, straight-sided dinner candles, rounds, columns, pillars, votives, and various wax-filled containers ..." and excluding "birthday, birthday numeral, and figurine candles." Def.-Intervenor's Resp. 9 (quoting Petroleum Wax Candles from the People's Republic of China, Inv. No. 731-TA-282 (Final), USITC Pub. 1888 (August 1986)) (emphasis added in original). But Congress gave Commerce, not the ITC, the responsibility to define the scope of an antidumping duty order. 19 U.S.C. § 1673e(a)(2).
Defendant-intervenor argues that its petition "did not exclude any candles made of petroleum wax from the scope of the investigation requested." Id. at 15 (citation omitted). This argument fails on two grounds. First, the language defendant-intervenor chose in its petition does not establish that defendant-intervenor intended to request an investigation of petroleum wax candles of any shape. Under the heading "Description of the Imported Merchandise," the petition stated as follows:
Petition, at 6-7. The first sentence of NCA's proposal, read in isolation, might be read to suggest a scope not limited to the enumerated candle shapes. But the second sentence, which Commerce adopted verbatim in the Order, can be read to indicate that the petition sought an investigation limited to the listed candle shapes. It is difficult to reconcile the inclusion of that sentence in the petition with defendant-intervenor's contention that the petition sought an investigation of candles of all shapes.
In response to the court's inquiry as to whether the interpretation of the scope language adopted in the Final Scope Ruling would result in an undefined scope, defendant-intervenor argues that "[c]riteria defining which candles are in and outside the scope of the Candles Order are found in its first sentence." Def.-Intervenor's Supplemental Br. 2. Defendant-intervenor adds that "Commerce's interpretation of the second sentence of the scope language as providing an illustrative, rather than an exhaustive or exclusive, listing of the shapes in which such candles are typically sold in no way negates the defining criteria contained in the first sentence of the scope language, and does not leave importers and exporters without guidance as to which candles are in and outside the scope of the Candles Order." Id. As "defining criteria" in the first sentence, defendant-intervenor points to the presence of petroleum wax and the type of wick. Id.
Defendant-intervenor's argument overlooks the effect of the word "certain" in the first sentence. That word must be read to indicate that some, but not all, PRC-origin petroleum wax candles with paperboard or fiber wicks are within the scope of the Order. Defendant-intervenor's statement that "[c]riteria defining which candles are in and outside the scope of the Candles Order are found in the first sentence," id. 2, is correct only insofar as it refers to composition of the wax and type of wick — two criteria not at issue in this case. It is not correct as to the sole criterion that is at issue in this case, i.e., the shape of the candle. Defendant-intervenor concedes that "the scope language must be read in its entirety," id., maintaining that importers and exporters may consult the scope language for guidance as to what is inside and outside of the scope.
Regarding the word "certain" in the first sentence of the scope language, defendant-intervenor argues that this word need not necessarily be read to refer to the second sentence and that it is "equally plausible that `certain' refers to the presence and/or nature of the wick." Def.-Intervenor's Supplemental. Br. 6. Such a construction is at variance with the one Commerce expressed in the Decision Memorandum, which grounded the meaning of the term in matters outside the language of the Order. More important, though, is that defendant-intervenor's proposed construction would distort the first sentence well beyond common meaning and render the adjective "certain" superfluous.
The same must be said of defendant-intervenor's argument that "[u]se of `scented or unscented' indicates that the Order broadly encompasses all candles, provided they have some petroleum wax and a fiber or paper-cored wick." Id. at 7. Somewhat inconsistently with that argument, defendant-intervenor also argues that while use of the word "certain" in the first sentence of the scope language "confirms that there are some limitations on the Order's scope, the language of the first sentence confirms that the Order is meant to be inclusive and encompass most petroleum wax candles." Id. To conclude that the first sentence connotes that the Order is meant to include most petroleum wax candles is to read something into the sentence that is not there. Moreover, the question is not whether the scope includes most petroleum wax candles but whether the scope language reasonably can be read to include the object-shaped candles that Commerce ruled not to qualify for its figurine exception.
Defendant-intervenor argues that "nothing in the Federal Circuit's holding in Duferco mandates that Commerce's interpretation of the Candles Order is unsupported at law." Id. at 8. Defendant-intervenor would distinguish Duferco, and certain other Court of Appeals decisions rejecting Commerce scope decisions, from this case because Duferco and the other decisions involved antidumping duty order scope language that unambiguously excluded the merchandise at issue, whereas, according to defendant-intervenor, in this case "Commerce's interpretation is not contrary to the express language of the order." Id. at 11. This argument overlooks the breadth of the rule of law established in Duferco, under which a court may uphold a determination that merchandise is included within the scope of an order only where the scope language specifically includes it or may be reasonably interpreted to include it. Duferco, 296 F.3d at 1089. The logic of the rule in Duferco is straightforward: were Commerce empowered in a scope ruling to place merchandise within the scope of an order that cannot reasonably be interpreted to include that merchandise, Commerce would be altering the scope, not interpreting it. See id. at 1097 ("Repeatedly, decisions of this court confirm that `[a]lthough the scope of a final order may be clarified, it can not be changed in a way contrary to its terms.'"
Finally, defendant-intervenor argues that "[p]laintiff's hyper-strict interpretation of Duferco would require that antidumping duty contain a heightened degree of specificity far beyond that required under the law" and that under this interpretation "no resort to secondary sources under 19 C.F.R. § 351.225(k)(1) may be had," leading to "the result that candles Commerce has long-recognized as excluded from the scope of the Candles Order, such as birthday candles and utility candles, would no longer be excluded." Id. at 14. Defendant-intervenor describes birthday candles as tapers and spirals and utility candles as pillars or columns and asserts that "Commerce could not rely on secondary sources to establish such exclusions because the plain language of the Order clearly encompasses those candle shapes. Id. (citing Mid Continent Nail Corp. v. United States, 725 F.3d 1295, 1301 (Fed. Cir.2013), reh'g denied (Nov. 7, 2013) ("[J]ust as orders cannot be extended to include merchandise that is not within the scope of the order as reasonably interpreted, merchandise facially covered by an order may not be excluded from the scope of the order unless the order can reasonably be interpreted so as to exclude it.") (emphasis in original)). The court is unpersuaded by this argument. The court does not hold that the scope language in the Order fails for lack of specificity. Rather, the court holds, for the various reasons discussed herein, that Commerce unreasonably interpreted the scope language in the Order to include candles in the shapes of identifiable objects. This conclusion of law is not altered by the findings Commerce made in the Scope Ruling according to § 351.225(k)(1). As an ancillary matter, the validity of the exclusions for birthday and utility candles that Commerce has recognized are not at issue in this case.
In placing within the scope of the Order various candles made to resemble identifiable objects, the Final Scope Ruling applied an impermissible interpretation of the scope language in the Order.
Therefore, upon consideration of the Final Scope Ruling: Antidumping Duty Order on Petroleum Wax Candles from the People's Republic of China ("PRC"), A-570-504, ARP 5-10 (Aug. 5, 2011), available at http://ia.ita.doc.gov/download/ candles-prc-scope/candles/20110805-requestors.pdf (last visited Jan. 21, 2014) ("Final Scope Ruling"), the Petroleum Wax Candles From the People's Republic of China: Final Results of Request for Comments on the Scope of the Antidumping Duty Order, 76 Fed.Reg. 46,277, 46,278 (Aug. 2, 2011) ("Final Results"), and all papers and proceedings had herein, it is hereby
Id. Commerce has maintained this scope language in subsequent reviews of the Order.
