Slip Op. 03 - 134

 UNITED STATES COURT OF INTERNATIONAL TRADE

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TAK FAT TRADING CO., MEI WEI FOODS :

INDUSTRY CO., LTD., LEUNG MI INTERNATIONAL, TAK YUEN CORP. and GENEX INTER- :

NATIONAL CORP.,

:

Plaintiffs,

:

 v.

 :

UNITED STATES, Court No. 00-07-00360

 :

Defendant,

 :

 -and-

 :

COALITION FOR FAIR PRESERVED MUSHROOM 

TRADE, :

 Intervenor-Defendant. :

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Opinion 

[Plaintiffs' motion for judgment on the agency 

 record, vacating antidumping-duty-order scope

 determination, granted.]

Decided: October 17, 2003

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Max

F. Schutzman, Erik D. Smithweiss and Mark E. Pardo) for the

plaintiffs.

Peter D. Keisler, Assistant Attorney General; David M. Cohen,

Director, and Velta A. Melnbrencis, Assistant Director, Commercial

Litigation Branch, Civil Division, U.S. Department of Justice; and

Office of Chief Counsel for Import Administration, U.S. Department

of Commerce (John F. Koeppen), of counsel, for the defendant.

Collier Shannon Scott, PLLC (Michael J. Coursey and Adam H.

Gordon) for the intervenor-defendant.

AQUILINO, Judge: Before the court is plaintiffs' USCIT

Rule 56.2 motion for judgment on the administrative record wherein
Court No. 00-07-00360 Page 2

1 This determination has not been published in the Federal

Register but is presented in Appendix to Plaintiff's Brief in Support of Their Rule 56.2 Motion [hereinafter referred to as

"Plaintiffs' Appendix"], tab 13.

Background of this case is set forth in Tak Fat Trading Co. v.

United States, 24 CIT 1376 (2000), and Tak Fat Trading Co. v. 

United States, 26 CIT , 185 F.Supp.2d 1358 (2002).

they seek vacation of the determination1 by the International Trade

Administration, U.S. Department of Commerce ("ITA") that their

product is within the scope of the Notice of Amendment of Final

Determination of Sales at Less Than Fair Value and Antidumping Duty

Order: Certain Preserved Mushrooms From the People's Republic of

China, 64 Fed.Reg. 8,308 (Feb. 19, 1999).

I

This antidumping-duty order was precipitated by

petition(s) filed by domestic U.S. mushroom producers requesting

investigation of certain preserved mushrooms imported from Chile,

China, India and Indonesia. The petitioners sought to exclude from

the investigation "'marinated', 'acidified' or 'pickled' mushrooms,

which are packed with solutions such as oil, vinegar or acetic acid

(HTS heading 2001.90.39)." Plaintiffs' Appendix, tab 1, p. 13. In

a letter supplementing the petition(s), they stated that marinated,

acidified and pickled mushrooms are all "prepared or preserved by

means of vinegar or acetic acid" and are therefore "covered under

HTS heading 2001.90.39". Plaintiffs' Appendix, tab 2, p. 4. The

petition also contained a footnote stating that its "scope . . .

comports with the Food and Drug Administration's ('FDA') standards
Court No. 00-07-00360 Page 3

of identity for canned mushrooms. 21 C.F.R. §155.201." Plaintiffs' Appendix, tab 1, p. 12. 

A

Despite those particular references to the Harmonized

Tariff Schedule of the United States ("HTSUS") and the FDA's

standards of identity, neither the ITA's preliminary nor its

amended final determination of sales at less than fair value

includes them. Rather, the latter is stated to encompass

certain preserved mushrooms whether imported whole,

sliced, diced, or as stems and pieces. The preserved

mushrooms covered under this order are the species

Agaricus bisporus and Agaricus bitorquis. "Preserved

mushrooms" . . . have been prepared or preserved by

cleaning, blanching, and sometimes slicing or cutting.

These mushrooms are then packed and heated in containers

including but not limited to cans or glass jars in a

suitable liquid medium, including but not limited to

water, brine, butter or butter sauce. Preserved mushrooms

may be imported whole, sliced, diced, or as stems and

pieces. Included within the scope of the investigation

are "brined" mushrooms, which are presalted and packed in

a heavy salt solution to provisionally preserve them for

further processing. 

Excluded from the scope of this investigation are

the following: (1) all other species of mushroom,

including straw mushrooms; (2) all fresh and chilled

mushrooms, including "refrigerated" or "quick blanched

mushrooms"; (3) dried mushrooms; (4) frozen mushrooms;

and (5) "marinated," "acidified" or "pickled" mushrooms,

which are prepared or preserved by means of vinegar or

acetic acid, but may contain oil or other additives. 

The merchandise subject to this investigation is

classifiable under subheadings 2003.10.0027, 2003.10.00-

31, 2003.10.0037, 2003.10.0043, 2003.10.0047, 2003.10.00-

53, and 0711.90.4000 of . . . HTS[US]. Although the[se]

subheadings are provided for convenience and Customs

purposes, the Department's written description of the

merchandise under the order is dispositive. 

64 Fed.Reg. at 8,309. 
Court No. 00-07-00360 Page 4

2 Certain Preserved Mushrooms From China, India, and Indonesia, ITC Pub. No. 3159, p. 5 (Feb. 1999).

B

In its preliminary determination of material injury, the

International Trade Commission ("ITC") concluded that, although

there are some physical and manufacturing-process similarities between marinated, acidified or pickled mushrooms and the preserved

mushrooms under investigation,

on the whole there is little interchangeability, with

consumers perceiving the two products differently. There

are also differences in physical characteristics,

particularly taste, between the two products. Consequently, for purposes of these preliminary determinations

we find that marinated, acidified and pickled mushrooms

are not within the like product subject to these investigations.

Certain Preserved Mushrooms From Chile, China, India, and Indonesia, ITC Pub. No. 3086, p. 10 (Feb. 1998). Its final determination

in this matter adopted, for like-product2, the reasoning of Certain

Preserved Mushrooms From Chile, ITC Pub. No. 3144, p. 6 (Nov.

1998), which stated that,

[a]lthough preserved mushrooms and marinated mushrooms

share some common channels of distribution and production

facilities, they have different tastes that limit

marinated mushrooms' end uses, very limited interchangeability, are perceived to be different products by

both producers and customers, and sell in different price

ranges. We believe that the distinctions between

preserved and marinated mushrooms establish a "clear

dividing line." We consequently do not include marinated

mushrooms in the domestic like product.
Court No. 00-07-00360 Page 5

3 Defendant's Appendix, Exhibit 1, p. 2.

4 See 21 C.F.R. §155.201(a)(3) (2000). Canned mushrooms are

defined as

food properly prepared from the caps and stems of

succulent mushrooms conforming to the characteristics of

the species Agaricus (Psalliota) bisporus or A. bitorquis, . . . ; and may contain one or more safe and suitable optional ingredients specified in paragraph (a)(3)

of this section. The food is sealed in a container and,

before or after sealing, is so processed by heat as to

prevent spoilage. 

(footnote continued)

C

The plaintiffs herein are a producer, an exporter, and

importers of

marinated or acidified mushrooms of the species agaricus

bisporus that are . . . washed, blanched in water . . .

and then placed in . . . cans [that] are then filled with

a marinade consisting of . . . water[,] salt [ ], sugar

[ ], vinegar [ ], acetic acid [ ], yeast extract [ ],

citric acid [ ], MSG [ ], vitamin C [ ], flavorings [ ],

and spices [ ]. . . . The finished equilibrium pH of

the mushrooms is controlled at or below 4.6.4

Defendant's Appendix, Exhibit 1, p. 2 (footnotes 2 and 3 omitted;

brackets in original). The footnote 4 to the foregoing product

description states: 

If an acidified food is found to have a pH above

4.6, it must be subjected to further thermal processing

as a low acid food for safety reasons. 21 C.F.R. §114.-

89. The manufacturer of the subject product both acidifies and thermally processes its mushrooms.

Id. The plaintiffs requested the scope determination by the ITA,

pointing out that the petition(s) "excluded marinated and acidified

mushrooms not meeting the [FDA's] standard for canned mushrooms"3,

which does not provide for vinegar or acetic acid.4 Whereupon 
Court No. 00-07-00360 Page 6

21 C.F.R. §155.201(a)(1) (2000). Those optional ingredients are:

(i) Salt.

(ii) Monosodium glutamate.

(iii) Disodium inosinate complying with the provisions

 of Sec. 172.535 of this chapter.

(iv) Disodium guanylate complying with the provisions 

 of Sec. 172.530 of this chapter. 

(v) Hydrolyzed vegetable protein.

(vi) Autolyzed yeast extract. 

(vii) Ascorbic acid (vitamin C) in a quantity not to

 exceed 132 milligrams for each 100 grams (37.5

 milligrams for each ounce) of drained weight of

 mushrooms.

(viii) Organic acids (except no vinegar is permitted),

 only where the inside metal of the container is

 fully enamel-lined and in glass containers with

 fully enamel-lined caps. Ascorbic acid as provid- 

 ed for in paragraph (a)(3)(vii) of this section.

(ix) Calcium disodium ethylenediaminetetraacetate

 (CaNa2 EDTA) in a quantity not to exceed 200 parts

 per million for use to promote color retention.

Ibid.

their position was and is, "[b]ecause the subject marinated mushrooms . . . do not meet that FDA standard, they are outside the

scope of the antidumping duty order." Id.

After a preliminary ruling and considering comments

thereon, the ITA issued its final determination that 

the "marinated or acidified" mushrooms produced, exported

or imported by [the plaintiffs] are within the scope of

the antidumping duty order on [certain preserved mushrooms] from the PRC based on their acetic acid content

level.

Plaintiffs' Appendix, tab 13, second page. It is based on the petitioners' use of HTSUS subheading 2001.90.39 to define the

products they intended to exclude from this matter and the agency's
Court No. 00-07-00360 Page 7

"appropriat[ion of] the phrase 'prepared or preserved with vinegar

or acetic acid' directly from the HTS heading". Id., seventh page.

The ITA read that phrase as having been interpreted by Customs to

require a minimum 0.5 percent acetic-acid level. See id., ninth

page. As plaintiffs' product, admittedly, does not contain that

much, the agency determined it to be within the ambit of its antidumping-duty order. See id., second and fifth pages.

II

Jurisdiction over this case is pursuant to 28 U.S.C.

§§ 1581(c) and 2631(c). The standard of review is whether the

determination is unsupported by substantial evidence on the record

or otherwise not in accordance with law. See 19 U.S.C.

§§ 1516a(a)(2)(B)(vi), 1516a(b)(1)(B)(i). Substantial evidence is

"such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion." Consolidated Edison Co. v.

NLRB, 305 U.S. 197, 229 (1938). It must also be noted that, on

questions of scope, the ITA has "broad authority to interpret its

own antidumping duty orders". INA Walzlager Schaeffler KG v. United States, 108 F.3d 301, 307 (Fed.Cir. 1997). Such determinations

are made pursuant to 19 C.F.R. §351.225, which states that, in

considering whether a particular product is included

within the scope of an order . . . , the Secretary will

take into account the following:

(1) The descriptions of the merchandise contained in

the petition, the initial investigation, and the determinations of the Secretary (including prior scope determinations) and the Commission.
Court No. 00-07-00360 Page 8

5 Indeed, as noted by the ITA in its preliminary ruling, the

FDA standard of identity

is not controlling of the scope of the order . . . ,

which contains intentionally broad text so as to include

all preserved mushrooms, with some very specific

exceptions.

Plaintiffs' Appendix, tab 12, numbered pages 8-9.

6 Plaintiffs' Brief, pp. 16-17. However, as they explained in

a letter supplementing the petition, the petitioners were 

concerned about circumvention by the placing of preserved

mushrooms in containers other than cans, such as jars or

tubs, and therefore . . . have defined the scope as

"certain preserved mushrooms."

Plaintiffs' Appendix, tab 2, numbered page 5. 

(2) When the above criteria are not dispositive, the

Secretary will further consider:

(i) The physical characteristics of the product;

(ii) The expectations of the ultimate purchasers;

(iii) The ultimate use of the product;

(iv) The channels of trade in which the product

 is sold; and

(v) The manner in which the product is adver-

 tised and displayed.

19 C.F.R. §351.225(k) (2000). 

A

None of the parties suggests resort to these enumerated

criteria.5 Rather, each side argues for a different interpretation

of the petition language and the agency determination(s). See,

e.g., Plaintiffs' Brief, pp. 12-13; Defendant's Memorandum, p. 31;

Response Brief of Defendant-Intervenor, pp. 15-16. 

The plaintiffs reiterate that the "petitioners intended

the dumping order to cover only products meeting the 'standard of

identity' for 'canned mushrooms'".6 They further argue that nei-
Court No. 00-07-00360 Page 9

7 63 Fed.Reg. at 5,361; at 41,795; at 72,256; 64 Fed.Reg. at

8,309. The language in the petition differed somewhat from that of

the ITA, excluding

"marinated", "acidified" or "pickled" mushrooms, which

are packed with solutions such as oil, vinegar or acetic

acid (HTS heading 2001.90.39).

Plaintiffs' Appendix, tab 1, numbered page 13.

ther the plain language of the order nor the record support use of

the 0.5 percent acetic-acid-level test to determine whether their

product is within the scope of the order. 

The defendant maintains that the order

reflected the petitioners' intent to exclude from the

scope only such mushrooms that are "prepared and preserved by means of vinegar or acetic acid," even though

it omitted the reference to HTS subheading 2001.90.39.

Defendant's Memorandum, pp. 30-31. The intervenor-defendant also

contends that the exclusionary language should be interpreted in

conformity with the HTS subheading. See Response Brief of Defendant-Intervenor, pp. 15-16.

B

The merchandise specifically excluded from this matter

was described in the ITA's notices of initiation of investigation

and of the preliminary, final, and amended final determinations

with identical language, to wit:

"marinated," "acidified" or "pickled" mushrooms, which

are prepared or preserved by means of vinegar or acetic

acid, but may contain oil or other additives.7

The ITC also excluded from its preliminary and final determinations

"marinated, acidified and pickled mushrooms", stating that they
Court No. 00-07-00360 Page 10

"defined the domestic like product to encompass only the types of

preserved mushrooms within Commerce's scope definition." ITC Pub.

No. 3086, pp. 5, 10; ITC Pub. No. 3159, p. 5.

On its face, this administrative exclusion is clear, and

the court so finds. After review of the agency record developed in

connection herewith, the court also concludes that plaintiffs'

product is just as clearly within the ambit of the exclusion. The

record does not support a description of that product other than as

posited by the plaintiffs, supra, to wit, mushrooms marinated or

acidified, packed in cans with water, salt, sugar, vinegar, acetic

acid, yeast extract, citric acid, MSG, vitamin C, flavorings, and

spices, the finished equilibrium pH of which is controlled at or

below 4.6.

Indeed, the defendant does not argue otherwise. Rather,

it explains in the exercise of its broad discretion that the 

petitioners clearly referred to the HTS number in the

petition, and cited to specific descriptive language of

the HTS heading in the Petition Supplement when clarifying for the Department the scope of the excluded merchandise. Although we omitted from the exclusion clause of

the scope language the HTS headings provided by the

petitioners, we appropriated the phrase "prepared or

preserved with vinegar or acetic acid" directly from the

HTS heading for products classified under HTS heading

2001. . . .

Regarding Tak Fat's arguments with respect to the FDA

standards for acetic acid content, we reiterate that we

have considered all of the evidence on the record, and we

continue to find more compelling the evidence that the

petitioners relied upon the language which was taken from

the HTS subheading and which had an established meaning

to describe the excluded merchandise.

Plaintiffs' Appendix, tab 13, numbered pages 6-7.
Court No. 00-07-00360 Page 11

This being the case, it is necessary to consider that

part of the HTSUS referred to by the agency, namely:

2001 Vegetables, fruit, nuts and other edible parts 

of plants, prepared or preserved by vinegar or 

acetic acid:

Other:

Other:

Vegetables:

2001.90.39 Other[.]

The "established meaning" of this subheading to which they also

refer and rely emanates from a 1983 ruling letter (069121) of the

U.S. Customs Service which this court has examined. It reflects

thorough reasoning, but that analysis necessarily focused on

interpretation of item 141.77 of the Tariff Schedules of the United

States ("TSUS") (1980), the heading for which encompassed "Vegetables (whether or not reduced in size), packed in salt, in brine,

pickled, or otherwise prepared or preserved". And note 1(b) to

that heading provided that

the term "pickled" means prepared or preserved in vinegar or acetic acid whether or not packed in oil or

containing sugar, salt, or spices.

Underscoring in original. Hence, the issue for consideration and

resolution by Customs was refinement of that term, not the above

phrase of the HTSUS "appropriated" by the ITA covering vegetables
Court No. 00-07-00360 Page 12

8 Cf. HQ 957041 (Nov. 10, 1998); HQ 959313 (Feb. 20, 1997); HQ

956850 (March 22, 1996); HQ 952738 (Jan. 27, 1993); HQ 085838 (Dec.

21, 1989).

"prepared or preserved by vinegar or acetic acid". Resolution of

that issue led to the following holding by the Service:

Based on trade, technical, and common understanding of

the term "pickled," the obvious intent of Congress in its

use thereof was to require more than a mere minimal

amount of acetic acid in order to result in a "pickled"

product for tariff purposes. The requirement of Customs

that such a product contain a minimum of 0.5 percent

acetic acid (subject to allowable tolerances) in the

equilibrated product comports with these bases of [w]ellsettled principles of Customs law interpreting the scope

of various terms . . ..

HQ 069121, p. 10, para. 1. See id., p. 4.

This quantitative holding may still be of some moment for

pickled products8, but Congress has left that organoleptic term out

of the HTSUS relevant to this case with no indication that the 1983

approach to enforcement of the TSUS continue now.

Here, there is no claim or showing on the record that

plaintiffs' product is pickled in accordance with the Customs

concept of acidity, but this void cannot be dispositive since the

ITA's language of exclusion is in the disjunctive, viz., marinated,

acidified, or pickled mushrooms. On the other hand, the record

does support the fact that plaintiffs' product is both marinated

and acidified.

Finally, the HTSUS subheadings referred to by the agency

in its amended final determination of sales at less than fair
Court No. 00-07-00360 Page 13

value, supra, 64 Fed.Reg. at 8,309, as genuinely encompassing the

merchandise subject thereto are headed by the following descriptions:

2003 Mushrooms and truffles, prepared or pre-

 served otherwise than by vinegar or acet-

 ic acid[.]

0711 Vegetables provisionally preserved (for 

 example, by sulfur dioxide gas, in brine,

 in sulfur water or in other preservative 

 solutions), but unsuitable in that state 

 for immediate consumption[.]

The record developed does not place plaintiffs' product under

either heading. There is no showing, for example, that those

mushrooms are prepared or preserved "otherwise" than by vinegar or

acetic acid.

III

Given the lack of substantial evidence in support of the

ITA's scope determination contested herein and the inapposite

standard of law exclusively relied on by the agency in connection

therewith, plaintiffs' motion for judgment upon the record must be

granted.

Decided: New York, New York

 October 17, 2003

 

Judge