Slip Op. 08-101 

UNITED STATES COURT OF INTERNATIONAL TRADE 

Before: Leo M. Gordon, Judge 

Consol. Court No. 06-00383 

OPINION AND ORDER 

[Commerce’s anticircumvention determination remanded.] 

 Dated: September 18, 2008 

Jochum Shore & Trossevin, P.C. (Marguerite E. Trossevin) for Plaintiff Target 

Corporation. 

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Bruce M. Mitchell, Max F. 

Schutzman, William F. Marshall, Andrew T. Schutz) for Plaintiffs Qingdao Kingking Applied 

Chemistry Co., Ltd., Dalian Talent Gift Co., Ltd., Shanghai Autumn Light Enterprise Co., Ltd., 

Home Accent International (Honghzhou) Co., Ltd., Zhongshan Zhongnam Candle 

Manufacturer Co., Ltd., Nantucket Distributing Co., Inc., Shonfeld’s (USA), Inc., Amstar 

Business Company Limited and Jiaxing Moonlight Candle Art Co., Ltd. 

Greenberg Traurig, LLP (Jeffrey S. Neeley, David R. Amerine) for Plaintiff Specialty 

Merchandise Corporation, Inc. 

 

 Gregory G. Katsas, Assistant Attorney General; Jeanne E. Davidson, Director, 

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, 

U.S. Department of Justice (David S. Silverbrand, Michael J. Dierberg); and Office of 

Chief Counsel for Import Administration, U.S. Department of Commerce (Arthur D. 

Sidney), of counsel, for Defendant United States. 

 Barnes & Thornburg LLP (Randolph J. Stayin, Karen A. McGee) for DefendantIntervenor National Candle Association. 

TARGET CORPORATION, 

 

Plaintiff, 

 

 v. 

UNITED STATES, 

Defendant. 
Court No. 06-00383 Page 2

Gordon, Judge: Plaintiffs Target Corporation (“Target”), Qingdao Kingking 

Applied Chemistry Co., Ltd., et al. (“Qingdao”), and Specialty Merchandise Corporation, 

Inc. (“SMC”) challenge the U.S. Department of Commerce’s (“Commerce”) 

determination that petroleum wax candles with 50 percent or more palm or other 

vegetable-oil based waxes (“mixed-wax”) are later-developed merchandise 

circumventing the antidumping duty order covering petroleum wax candles from China. 

See Petroleum Wax Candles from the People’s Republic of China, 71 Fed. Reg. 59,075 

(Dep’t Commerce Oct. 6, 2006) (final determ. anticircumvention inquiry) 

(“Final Determination”), amended by Final Results Pursuant to Voluntary Remand, 

Target Corp. v. United States, Consol. Court No. 06-00383 (May 16, 2008) 

(“Voluntary Remand”). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(vi) 

of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(vi) (2000)1 and 

28 U.S.C. § 1581(c) (2000). As discussed below, this action is remanded to Commerce 

for further consideration. 

I. Standard of Review 

When reviewing an anticircumvention determination under 19 U.S.C. 

§ 1516a(a)(2)(B)(vi) and 28 U.S.C. § 1581(c) (2000), the U.S. Court of International 

Trade sustains Commerce’s determinations, findings, or conclusions unless they are 

“unsupported by substantial evidence on the record, or otherwise not in accordance with 

law.” 19 U.S.C. § 1516a(b)(1)(B)(i). When reviewing whether Commerce’s actions are 

unsupported by substantial evidence, the Court assesses whether the agency action is 

 

1 Further citations to the Tariff Act of 1930 are to the relevant provisions of Title 19 of the 

U.S. Code, 2000 edition. 
Court No. 06-00383 Page 3

reasonable given the record as a whole. See Nippon Steel Corp. v. United States, 

458 F.3d 1345, 1350-51 (Fed. Cir. 2006). Additionally, the two-step framework provided 

in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-45 (1984), 

governs judicial review of Commerce's interpretation of the antidumping statute. 

Dupont Teijin Films USA, LP v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005). 

II. Background 

Commerce issued an antidumping duty order on petroleum wax candles from 

China in 1986. Petroleum Wax Candles from the People’s Republic of China, 51 Fed. 

Reg. 30,686 (Dep’t Commerce Aug. 28, 1986) (antidumping duty order) (“Petroleum 

Wax Candle Order” or “Order”). In the less than fair value (“LTFV”) proceeding 

Commerce defined the subject merchandise, in relevant part, as “petroleum wax 

candles made from petroleum wax.” Petroleum Wax Candles from the People’s 

Republic of China, 51 Fed. Reg. 25,085 (Dep’t Commerce July 10, 1986) (final less than 

fair value determination). For the corresponding injury investigation, the 

U.S. International Trade Commission (“ITC”) defined the domestic like product, 

in relevant part, as candles “composed of over 50 percent petroleum wax.” Candles 

from the People’s Republic of China, USITC Pub. 1888 at 5, Inv. No. 731-TA-282 

(Aug. 1986) (final injury determination) (“Original Injury Determination”). 

subject merchandise 

(COMMERCE) 

“petroleum wax candles 

made from petroleum wax”

domestic like product 

(ITC) 

“candles composed of over 

50 percent petroleum wax” 
Court No. 06-00383 Page 4

The ITC therefore interpreted Commerce’s redundant qualifier “made from 

petroleum wax” to mean “composed of more than 50 percent petroleum wax.” See id. 

This percentage benchmark proved dispositive in subsequent Commerce scope 

determinations involving mixed-wax candles. Commerce ruled at least seven times in a 

seven-year period that the ITC’s percentage-based like product definition mandated that 

mixed-wax candles (containing less than 50 percent petroleum wax) be excluded from 

the scope of the Petroleum Wax Candle Order.2

Central to these prior scope rulings is the unstated but fundamental tenet of 

antidumping law that the domestic like product must encompass the subject 

 

2 See Petroleum Wax Candles from the People’s Republic of China, Final Scope Ruling, 

A-570-504, “Costco Wholesale” (Dec. 10, 1998) (candles composed of 19% petroleum 

wax and 81% beeswax excluded from Order for not satisfying Commission’s like 

product definition of petroleum wax candles); Petroleum Wax Candles from the People’s 

Republic of China, Final Scope Ruling, A-570-504, “Et Al Imports, Inc.” (Dec. 11, 1998) 

(candles composed of 20% paraffin wax and 80% beeswax excluded from Order based 

upon the Commission’s definition of the domestic like product); Petroleum Wax Candles 

from the People’s Republic of China, Final Scope Ruling, A-570-504, “Ocean State 

Jobbers, Inc.” (Dec. 18, 1998) (candles composed of 20% petroleum wax and 80% 

beeswax excluded from Order based upon the Commission’s definition of the domestic 

like product); Petroleum Wax Candles from the People’s Republic of China, Final Scope 

Ruling, A-570-504, “JC Penny Purchasing, Corp.” (May 21, 2001) (candles composed of 

42% petroleum wax and 58% palm oil excluded from Order for not satisfying the 

Commission’s definition of domestic like product); Petroleum Wax Candles from the 

People’s Republic of China, Final Scope Ruling, A-570-504, “Leader Light, Inc.” (Dec. 

12, 2002) (candles containing less than 50% petroleum wax excluded from Order for not 

satisfying the Commission’s definition of domestic like product); Petroleum Wax 

Candles from the People’s Republic of China, Final Scope Ruling, A-570-504, “Avon 

Products, Inc.” (Nov. 17, 2003) (candles containing less than 50% petroleum wax 

excluded from Order for not satisfying the Commission’s definition of domestic like 

product); Petroleum Wax Candles from the People’s Republic of China, Final Scope 

Ruling, A-570-504, “Pier 1 Imports, Inc.” (May 13, 2005) (candles with petroleum-based 

wax content less than 50 percent excluded from the Order pursuant to the 

Commission’s like product definition and Commerce’s treatment in prior scope rulings). 

All scope rulings for the Petroleum Wax Candle Order are available at 

http://ia.ita.doc.gov/download/candles-prc-scope/index.html.
Court No. 06-00383 Page 5

merchandise: “an antidumping duty order must be supported by an ITC determination of 

material injury covering the merchandise in question.” Wheatland Tube Co. v. 

United States, 21 CIT 808, 819, 973 F. Supp. 149, 158 (1997) (citing 19 U.S.C. § 1673), 

aff’d, 161 F.3d 1365 (Fed. Cir. 1998). 

Rather than have Commerce repeat another conventional scope proceeding, the 

domestic interested party, National Candle Association (“NCA”), tried a different 

approach in 2004. NCA petitioned Commerce to initiate a later-developed merchandise 

anticircumvention inquiry and determine whether mixed-wax candles were 

circumventing the Order. Commerce initiated the inquiry. Petroleum Wax Candles from 

the People’s Republic of China, 70 Fed. Reg. 10,962, 10,963 (Dep’t Commerce 

Mar. 7, 2005) (notice of initiation anticircumvention inquiry) (“Notice of Initiation”). 

A later-developed merchandise anticircumvention inquiry is a specific type of scope 

inquiry governed by its own statutory provision, 19 U.S.C. § 1677j(d), which codified 

Commerce’s administrative practice for analyzing whether later-developed merchandise 

fell within the scope of an antidumping duty order. H.R. REP. NO. 100-576, at 601 

(1988) (Conf. Rep.), reprinted in 1988 U.S.C.C.A.N. 1547, 1634 (“This provision is 

intended to clarify and codify current Commerce Department authority, which has been 

recognized by the courts.”) 

As Commerce was commencing the later-developed merchandise 

anticircumvention inquiry, the ITC was coincidentally concluding a second five-year 

sunset review of the Petroleum Wax Candle Order. See Petroleum Wax Candles from 

China, USITC Pub. 3790, Inv. No. 731-TA-282 (July 2005) (second sunset review) 
Court No. 06-00383 Page 6

(“Second Sunset Review”). The lone participant in the Second Sunset Review, 

NCA, urged the ITC to re-examine the domestic like product definition from the Original 

Injury Determination and include “all blended candles” regardless of the proportion of 

petroleum wax. Second Sunset Review at 7. The ITC obliged and redefined the 

domestic like product “to include all blended candles,” or more simply, candles 

“containing any amount of petroleum wax.” Id. at 9. In addition, the ITC concluded that 

revocation of the Petroleum Wax Candle Order “would be likely to lead to continuation 

or recurrence of material injury to an industry in the United States within a reasonably 

foreseeable time.” Id. at 3. No party challenged the Second Sunset Review. 

Subsequently, Commerce completed the anticircumvention inquiry and 

determined that mixed-wax candles containing “any amount” of petroleum wax are 

within the scope of the Petroleum Wax Candle Order. Final Determination, 71 Fed. 

Reg. at 59,077-78. Plaintiffs then commenced this action. Commerce, in turn, sought a 

voluntary remand which the court granted. In the Voluntary Remand Commerce slightly 

modified its legal analysis but did not change its determination. See discussion infra at 

pp. 12-13. Plaintiffs raise a number of challenges to Commerce’s determination, 

including: 

(1) that Commerce’s interpretation of the phrase “later-developed merchandise” 

to cover merchandise that was in existence but commercially unavailable during the 

original investigation is contrary to the plain meaning of 19 U.S.C. § 1677j(d), and 

further, that Commerce’s finding that mixed-waxed candles were commercially 

unavailable at the time of the original investigation is unsupported by substantial 

evidence; 
Court No. 06-00383 Page 7

(2) that Commerce’s initiation of the anticircumvention inquiry on mixed-wax 

candles was contrary to Commerce’s scope regulation, 19 C.F.R. § 351.225 (2004),3

the prior mixed-wax candle scope rulings, and case law governing the initiation of scope 

inquiries; and 

(3) that Commerce’s inclusion of mixed-wax candles within the scope of the 

Order is a legally impermissible expansion of the Petroleum Wax Candle Order contrary 

to the domestic like product definition.4

As explained more fully below, the court is not persuaded by these arguments; 

nevertheless, the court cannot sustain Commerce’s later-developed merchandise 

anticircumvention determination and therefore remands the matter to Commerce for 

further consideration. 

III. Discussion 

A. Later-Developed Merchandise 

1. Commercial Availability Standard 

A critical legal issue for Commerce during the administrative proceeding was 

whether mixed-wax candles were “later-developed merchandise.” This issue arose 

because record evidence indicated that mixed-wax candles may have existed at the 

 

3 Further citations to Title 19 of the Code of Federal Regulations are to the relevant 

provisions of the 2004 edition.

4 Plaintiffs also challenge (1) Commerce’s finding that mixed-wax candles are the same 

class or kind of merchandise as petroleum wax candles (the subject merchandise) and 

specifically that four of Commerce’s findings in applying the statutory factors — the 

physical characteristics of the product, the expectations of the ultimate purchasers, the 

channels of trade in which the product is sold, and the manner in which the product is 

advertised and displayed — are unsupported by substantial evidence; and Plaintiffs also 

argue that (2) Commerce’s assessment of antidumping duties, pursuant to 19 C.F.R. § 

351.225(l)(3), on Plaintiffs’ entries made after the initiation of the anticircumvention 

inquiry is an impermissible retroactive application of the law. The court does not resolve 

these issues in this decision. 
Court No. 06-00383 Page 8

time of the original investigation. Section 1677j(d)(1) defines “later-developed 

merchandise” as “merchandise developed after an [antidumping] investigation is 

initiated.” 19 U.S.C. § 1677j(d)(1) (emphasis added). The question for Commerce was 

whether mixed-wax candles were “developed” by the time of the initiation of the 

investigation or “developed” sometime thereafter. 

Commerce touched upon the meaning of “developed” in several prior 

anticircumvention proceedings. “In each case, [Commerce] addressed the ‘commercial 

availability’ of the later-developed merchandise in some capacity, such as the product’s 

presence in the commercial market or whether the product was fully ‘developed,’ 

i.e., tested and ready for commercial production.” Final Determination, 71 Fed. Reg. at 

59,076-77 (citing Portable Electronic Typewriters from Japan, 55 Fed. Reg. 47,358 

(Dep’t Commerce Nov. 13, 1990) (final scope ruling), Electrolytic Manganese Dioxide 

from Japan, 57 Fed. Reg. 395 (Dep’t Commerce Jan. 6, 1992) (final scope ruling), and 

Erasable Programmable Read Only Memories from Japan, 57 Fed. Reg. 11,599 

(Dep’t Commerce Apr. 6, 1992) (final scope ruling)). From these prior administrative 

precedents Commerce derived a commercial availability standard for the term 

“developed.” Simply stated, to be “developed” a product must be commercially 

available—present in the commercial market or tested and ready for commercial 

production. Commerce offered a straightforward rationale for the standard: “[T]he 

product’s actual presence in the market at the time of the LTFV investigation is a 

necessary predicate of its inclusion or exclusion from the scope of an antidumping duty 

order.” Issues and Decision Memorandum for the Later-Developed Merchandise 
Court No. 06-00383 Page 9

Anticircumvention Inquiry of the Antidumping Duty Order on Petroleum Wax Candles 

from the People’s Republic of China, at 23, A-570-504 (Sept. 29, 2006), available at

http://ia.ita.doc.gov/frn/summary/prc/E6-16613-1.pdf (“Decision Memorandum”). 

Plaintiffs challenge the commercial availability standard, arguing that “developed” 

has one and only one meaning: created. Target Mot. J. Agency R. at 15; Qingdao Mot. 

J. Agency R. at 25-26. It is an understandable position; if developed means created, 

and mixed-wax candles existed at the time of the initiation of the investigation, they 

cannot be “later-developed.” 

The two-step framework provided in Chevron, 467 U.S. at 842-45, governs 

judicial review of Commerce's interpretation of the antidumping statute. Dupont Teijin 

Films USA, LP, 407 F.3d at 1215. The court first considers whether Congressional 

intent on the issue is clear, and if not, the court next considers whether Commerce's 

interpretation is reasonable. Id. The word “developed” has many meanings. See

"developed." The American Heritage® Dictionary of the English Language, Fourth 

Edition. Houghton Mifflin Company, 2004; Dictionary.com entry, 

http://dictionary.reference.com/browse/developed (last visited Sept. 18, 2008). 

Although Plaintiffs’ proposed interpretation represents one possibility, Commerce’s 

represents another. Therefore, this is not a matter of giving effect to one, clear, 

Congressional intent (Chevron step one), but instead of reviewing the reasonableness 

of Commerce’s proposed interpretation (Chevron step two). To determine whether 

Commerce's interpretation is reasonable, the court “may look to ‘the express terms of 

the provisions at issue, the objectives of those provisions, and the objectives of the 
Court No. 06-00383 Page 10

antidumping scheme as a whole.’” Wheatland Tube Co. v. United States, 495 F.3d 

1355, 1361 (Fed. Cir. 2007) (citing NSK Ltd. v. United States, 26 CIT 650, 654, 

217 F. Supp. 2d 1291, 1296-97 (2002)). 

Commerce’s commercial availability standard is reasonable. As Commerce 

explained, “the product’s actual presence in the market at the time of the LTFV 

investigation is a necessary predicate of its inclusion or exclusion from the scope of an 

antidumping duty order.” Decision Memorandum at 23. The later-developed 

merchandise provision is designed to prevent circumvention of an antidumping order by 

a comparable product (as determined by the Diversified Products5

 analysis) for the 

subject merchandise. Commerce’s interpretation, which reaches products that emerge 

in the market after imposition of the antidumping order, accomplishes this objective. 

2. Commerce’s Finding of Commercial Unavailability 

Qingdao challenges Commerce’s determination that mixed-wax candles were 

commercially unavailable during the LTFV investigation. Qingdao Mot. J. Agency R. at 

37-44. Implicit in Qingdao’s challenge is an assumption that Commerce made a finding 

of commercial unavailability for mixed-wax candles, which it did in some vague sense: 

[H]aving received no information either through relevant product 

brochures, annual sales data, or any other information from any party 

demonstrating that mixed-wax candles were commercially available prior 

to the LTFV investigation, [Commerce] finds that it cannot definitively 

conclude that mixed-wax candles were available in the market at the time 

of the LTFV investigation. 

 

5 The factors set forth in 19 U.S.C. § 1677j(d)(1) to determine whether later-developed 

merchandise is within the scope of an outstanding antidumping duty order are derived 

from the court’s decision in Diversified Prods. Corp. v. United States, 6 CIT 155, 162, 

572 F. Supp. 883, 889 (1983). They are commonly referred to as the Diversified 

Products criteria.
Court No. 06-00383 Page 11

Decision Memorandum at 26 (emphasis added). 

Note that Commerce “cannot definitively conclude.” Id. This language creates 

confusion, at least for purposes of judicial review. Rather than make a straightforward 

finding that mixed-wax candles were commercially unavailable at the time of the LTFV, 

Commerce introduced an unexplained, subjective, evidentiary standard—definitive 

conclusiveness—and found this standard had not been met. It is a puzzling turn of 

phrase; it almost bespeaks an administrative presumption of commercial 

unavailability—rebuttable by definitively conclusive evidence (whatever that may be) 

of commercial availability. Commerce, though, directly contradicted such notions: 

[B]oth Respondents and Petitioners had the burden to establish whether 

mixed-wax candles were commercially available at the time of the LTFV 

investigation. All parties were given the opportunity to submit evidence 

that mixed-wax candles were available or evidence that mixed-wax 

candles were not available in the market. Accordingly, the burden did not 

rest on any single party. 

 Id. at 25. The net effect of all this is that the court cannot review Commerce’s new, 

subjective, evidentiary standard and the associated “finding” in its present posture, and 

therefore must remand to Commerce for further consideration. 

On remand Commerce has two choices: (1) Commerce may make a 

straightforward finding of commercial unavailability at the time of the LTFV, which the 

court can then review for reasonableness (substantial evidence review); or 

(2) Commerce may further explain its proposed evidentiary standard as a reasonable 

application and interpretation of the later-developed merchandise anticircumvention 

provision. Once completed, Commerce must share it with the parties and provide an 
Court No. 06-00383 Page 12

opportunity to address that standard as it applies to the record evidence. Commerce 

can then make a factual finding based on the proposed standard. The court will then 

review the proposed standard for reasonableness under Chevron step two, and 

evaluate whether Commerce’s factual finding is supported by substantial evidence 

(or more simply, for reasonableness). 

3. Significant Technological Advance or Significant Alteration 

of the Merchandise Involving Commercially Significant Changes 

 During the anticircumvention proceeding, Commerce referred to the legislative 

history for the ITC consultation requirement of § 1677j(e) and discovered what it thought 

was an additional definitional requirement for “later-developed merchandise.” According 

to Commerce, “[t]he only other source of guidance available [for the definition of ‘laterdeveloped merchandise’] is the brief discussion of later-developed products in the 

legislative history for section 781(d) of the Act, which although addressing laterdeveloped products with respect to the ITC's injury analysis, we find is also relevant to 

[Commerce]'s analysis.” Final Determination, 71 Fed. Reg. at 59,076. Commerce then 

selectively quoted the legislative history, mistakenly representing that the history 

defined “a later-developed product as a product that has been produced as a result of a 

‘significant technological advancement [sic] or a significant alteration of the 

merchandise involving commercially significant changes.’'' Id. (emphasis omitted)

(quoting H.R. REP. NO. 100-576, at 603 (1988) (Conf. Rep.), reprinted in 1988 

U.S.C.C.A.N. 1547, 1636). Commerce purportedly abandoned its reliance on the 

legislative history of the ITC consultation requirement after reconsidering its 

interpretation of later-developed merchandise pursuant to the voluntary remand in this 
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matter. Voluntary Remand at 5. Commerce, though, did not abandon the additional 

definitional requirements. Commerce maintained that later-developed merchandise 

must have resulted from a significant technological advance or significant alteration to 

an earlier product. Id.

 Not much need be said here other than that Commerce misread the ITC 

consultation provision and its legislative history. The full passage from which 

Commerce selectively quoted in the Final Determination reads: 

With respect to later-developed products, a significant injury issue can 

arise if there is a significant technological development or a significant 

alteration of the merchandise involving commercially significant changes 

in the characteristics and uses of the product. In providing such advice, 

the ITC should not focus narrowly on the product’s features at the time the 

order was issued, but should analyze its general characteristics and uses 

in light of its prior determination. Thus, a later-developed product 

incorporating a new technology that provides additional capability, speed, 

or functions would be covered by the order as long as it has the same 

basic characteristics and uses. 

H.R. REP. NO. 100-576, at 603 (1988) (Conf. Rep.), reprinted in 1988 U.S.C.C.A.N. 

1547, 1636 (emphasis added). Likewise, the ITC consultation provision reads: 

(e) Commission advice 

(1) Notification to Commission of proposed action 

Before making a determination-- 

. . . 

(C) under subsection (d) of this section with respect to any laterdeveloped merchandise which incorporates a significant 

technological advance or significant alteration of an earlier product, 

with respect to any antidumping or countervailing duty order or finding 

as to which the Commission has made an affirmative injury 

determination, the administering authority shall notify the Commission 

of the proposed inclusion of such merchandise in such countervailing 
Court No. 06-00383 Page 14

or antidumping order or finding. Notwithstanding any other provision of 

law, a decision by the administering authority regarding whether any 

merchandise is within a category for which notice is required under this 

paragraph is not subject to judicial review. 

19 U.S.C. § 1677j(e) (emphasis added). 

The ITC consultation provision does not define or limit the meaning of laterdeveloped merchandise. What it does is identify specific types of later-developed 

merchandise that may raise “significant injury issue[s]” and require Commerce to 

consult with the ITC before including those specific types of later-developed 

merchandise within the scope of an order. H.R. REP. NO. 100-576, at 603 (1988) 

(Conf. Rep.), reprinted in 1988 U.S.C.C.A.N. 1547, 1636. Simply put, it does not limit 

the universe of “later-developed merchandise” to products that involve a significant 

technological advance or significant alteration as Commerce suggests; it identifies a 

subset of “later-developed merchandise” that requires consultation with the ITC. 

Commerce, therefore, erred by inferring from § 1677j(e) that “later-developed 

merchandise” under § 1677j(d) must in every instance involve a significant technological 

advance or significant alteration of subject merchandise. Ironically, by defining “laterdeveloped merchandise” to require a significant alteration of the subject merchandise 

and then making a factual finding that mixed-wax candles involve a significant alteration 

of petroleum wax candles, Commerce may have created a “significant injury issue” 

where none otherwise exists. 

In any event Commerce’s interpretation is contrary to the clear Congressional 

intent of § 1677j(e), and correspondingly, is one to which the court cannot defer. The 

court must therefore remand the matter to Commerce to correct its erroneous 
Court No. 06-00383 Page 15

interpretation of the statute. On remand Commerce may, of course, continue to limit 

what constitutes “later-developed merchandise,” so long as whatever limitation 

Commerce divines is a reasonable interpretation of the statute. 

B. Initiation of the Anticircumvention Inquiry 

 Qingdao challenges the initiation of the anticircumvention inquiry as contrary to 

(1) Commerce’s regulation for scope determinations, 19 C.F.R. § 351.225, and the prior 

mixed-wax candle scope rulings, and (2) Wheatland Tube, 161 F.3d at 1371. Qingdao 

Mot. J. Agency R. at 10-22. 

Commerce’s procedures for conventional scope inquiries are governed by 

19 C.F.R. § 351.225. In determining whether a product is included within the scope of 

an antidumping duty order, Commerce examines the scope application and the 

descriptions of the merchandise set forth in the antidumping petition, the initial 

investigation, and all prior determinations (including prior scope determinations) of 

Commerce and the ITC. 19 C.F.R. § 351.225(d) & (k)(1); Crawfish Processors Alliance 

v. United States, 483 F.3d 1358, 1362-63 (Fed. Cir. 2007). If these descriptions 

conclusively determine whether disputed merchandise is subject to the scope of an 

order, Commerce issues a final determination that the merchandise is covered, or not 

covered, by the order. Id. If these descriptions are not dispositive, Commerce initiates 

a scope inquiry and considers the Diversified Products criteria: the physical 

characteristics of the product, the expectations of the ultimate purchasers, the ultimate 

use of the product, the channels of trade in which the product is sold, and the manner in 
Court No. 06-00383 Page 16

which the product is advertised and displayed. 19 C.F.R. § 351.225(e) & (k)(2); 

Crawfish Processors Alliance, 483 F. 3d at 1362. 

In at least seven prior conventional scope determinations involving mixed-wax 

candles, Commerce found the ITC’s like product definition—candles composed of over 

50 percent petroleum wax—to be dispositive of whether mixed-wax candles were 

subject to the scope of the Petroleum Wax Candle Order. See final scope rulings 

supra note 2. In each instance, rather than initiating a scope inquiry, Commerce issued 

a final ruling excluding mixed-wax candles from the Order pursuant to 19 C.F.R. 

§ 351.225(d) and (k)(1). Qingdao wants similar treatment here. Qingdao Mot. J. 

Agency R. at 12-13. Qingdao argues that Commerce should not have initiated the 

anticircumvention inquiry, but rather should have issued a final ruling excluding mixedwax candles on the basis of the ITC’s original domestic like product definition, which the 

ITC had not yet redefined in the Second Sunset Review. Id.

Commerce, though, determined that the threshold determination of 19 C.F.R. 

§ 351.225(d) and (k)(1) for conventional scope inquiries did not apply to NCA’s petition 

for a later-developed merchandise anticircumvention inquiry. See Petroleum Wax 

Candles from the People’s Republic of China, 71 Fed. Reg. 32,033, 32,036-37 

(Dep’t Commerce June 2, 2006) (prelim. determ. anticircumvention inquiry) 

(“Preliminary Determination”); see also Decision Memorandum at 11-12. Commerce 

instead noted that the later-developed merchandise anticircumvention provision 

requires that Commerce shall consider the Diversified Products criteria enumerated in 

19 U.S.C. § 1677j(d)(1)(A)-(E). Preliminary Determination, 71 Fed. Reg. at 32,036-37. 
Court No. 06-00383 Page 17

Commerce distinguished conventional scope proceedings from later-developed 

merchandise anticircumvention inquiries: 

[Commerce] considered its prior scope ruling finding certain mixed-wax 

candles outside the scope of the Order. While [Commerce] recognizes 

that it made previous such scope rulings, [Commerce] notes that the 

factors that govern [Commerce]’s analysis of whether a product is within 

the scope of the Order differ for anticircumvention inquiries and other 

scope determinations. In scope rulings under section 351.225(k)(1) of 

[Commerce]’s regulations, [Commerce] relies upon relevant documents 

. . . in determining whether a particular product is included within the 

scope of an antidumping order. If [Commerce] finds that the descriptions 

are dispositive, [Commerce] will issue a final scope ruling of whether the 

product is within the scope of the antidumping duty order. But when the 

descriptions are not dispositive, [Commerce] will further consider the 

additional five factors, as stipulated in section 351.225(k)(2) of 

[Commerce]’s regulations. 

* * * 

Later-developed merchandise anticircumvention inquiries are governed by 

[19 U.S.C. § 1677j(d)], which instructs [Commerce] to determine whether 

the product in question was developed after the investigation was initiated, 

and, if so, whether it is within the scope of the order. If [Commerce] finds 

that the product subject to the inquiry is later-developed, then [19 U.S.C. 

§1677j(d)(1)] instructs [Commerce] to consider [the Diversified Products

factors]. In contrast to the prior scope rulings, in the present inquiry, 

[Commerce] is obligated, pursuant to [19 U.S.C. § 1677j(d)], to make a 

determination by explicitly analyzing these additional factors. 

Preliminary Determination, 71 Fed. Reg. at 32,036-37 (citations omitted). 

Plaintiffs argue that 19 C.F.R. § 351.225 “make[s] no distinction in the preliminary 

inquiry Commerce is required to make whether dealing with a conventional scope 

application or a scope application based upon alleged circumvention. In either case, 

the agency is first required to determine if the language of the order, etc. is dispositive 

[of scope].” Qingdao Mot. J. Agency R. at 16 (emphasis omitted). 
Court No. 06-00383 Page 18

When reviewing Commerce’s interpretations of its own regulations, the court 

does not “decide which among several competing interpretations best serves the 

regulatory purpose.” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). 

Rather, the court must accord Commerce’s interpretation of its own regulation 

“‘controlling weight unless it is plainly erroneous or inconsistent with the regulation.’” Id.

(quoting Udall v. Tallman, 380 U.S. 1, 16-17 (1965)); see also Viraj Group v.

United States, 476 F.3d 1349, 1355 (Fed. Cir. 2007). 

Commerce’s interpretation of 19 C.F.R. § 351.225 is not plainly erroneous or 

inconsistent with the regulation. Paragraph (j), the scope provision governing “laterdeveloped merchandise,” states that “in determining whether later-developed 

merchandise is within the scope of an antidumping . . . duty order, the Secretary will 

apply [19 U.S.C. § 1677j(d)].” 19 C.F.R. § 351.225(j). Commerce followed this 

directive. Rather than applying 19 C.F.R. § 351.225 (d), (e), and (k), Commerce applied 

19 U.S.C. § 1677j(d). 

Section 351.225(k), in turn, exempts later-developed merchandise proceedings 

from the conventional scope procedures set forth in subparagraphs (k)(1) and (k)(2). 

19 C.F.R. § 351.225(k) (Paragraph (k) is limited to “those scope determinations that are 

not covered under paragraphs (g) through (j).”). Since paragraph (d) incorporates the 

criteria of paragraph (k)(1), the exemption language of paragraph (k) renders paragraph 

(d) equally inapplicable. 19 C.F.R. § 351.225(d). Thus, later-developed merchandise 

anticircumvention inquiries fall outside the purview of the threshold inquiry of 
Court No. 06-00383 Page 19

paragraphs (d) and (k)(1). Commerce’s construction of the scope regulation is therefore 

not plainly erroneous or inconsistent with the terms of 19 C.F.R. § 351.225. 

As a practical matter, Commerce does survey the petition, the investigation, and 

all prior proceedings at the onset of a later-developed merchandise anticircumvention 

inquiry to assess whether a product is in fact later-developed, which common sense 

dictates is the more pertinent threshold issue: 

In determining whether [the merchandise] is appropriately considered a 

later-developed product under 19 U.S.C. 1677j(d), we evaluated the 

arguments raised by interested parties in light of the language of the 

statute, regulations, and the applicable legislative history . . . . A product 

developed after the petition and investigation cannot have been 

specifically excluded from the scope of the original investigation. 

Accordingly, if [the merchandise] is later-developed, the descriptions of the 

merchandise contained in the petition, the initial investigation, and the 

determinations of the Secretary and the [ITC] cannot be dispositive. 

However, if a product is developed before an antidumping case is initiated, 

the later-developed product provision is clearly inapplicable. 

Electrolytic Manganese Dioxide From Japan, 56 Fed. Reg. 56,977, 56,979-80 

(Dep’t Commerce Nov. 7, 1991) (prelim. scope ruling). See also Erasable 

Programmable Read Only Memories From Japan, 57 Fed. Reg. 11,599, 11,602 

(Dep’t Commerce Apr. 6, 1992) (final scope ruling). 

When considering whether to initiate the anticircumvention inquiry on mixed-wax 

candles, Commerce reviewed the antidumping duty petition, the Petroleum Wax Candle 

Order, and the ITC’s Original Injury Determination and found “no clear basis for 

[Commerce] to make a conclusive determination that candles with non-petroleum waxes 

in a different proportion are not later-developed merchandise.” See Notice of Initiation, 

70 Fed. Reg. at 10,964-65. 
Court No. 06-00383 Page 20

Plaintiffs challenge this finding. Relying on Wheatland Tube, 161 F.3d at 1371, 

Qingdao contends that the description of the merchandise subject to the Petroleum Wax 

Candle Order “unequivocally” excludes mixed-wax candles, and thus initiation of the 

inquiry was legally impermissible. Qingdao Mot. J. Agency R. at 18-22. In Wheatland 

Tube the antidumping duty order expressly excluded “line pipe” and “standard pipe that 

is dual or triple certified/stenciled that enters the U.S. as line pipe of a kind used for oil 

or gas pipelines,” Wheatland Tube, 161 F.3d at 1367 (emphasis omitted), which were 

known products with specific applications in the circular welded non-alloy steel pipe 

markets. On that basis the U.S. Court of International Trade precluded Commerce from 

conducting a minor alterations inquiry for the excluded products because, as a matter of 

law, no alteration had been made to the subject merchandise. Wheatland Tube, 21 CIT 

at 824-26, 973 F. Supp. at 162-64 (“[T]he statute is unambiguous and applies only to 

merchandise arguably within the scope of the antidumping duty order which is altered to 

be outside the order, the minor alterations provision does not apply to the present 

case.”), aff’d, 161 F.3d at 1370-71. 

The facts here are different. The Order covers “petroleum wax candles made 

from petroleum wax.” Petroleum Wax Candle Order, 51 Fed. Reg. at 30,686. 

Commerce found that this phrase did not definitively resolve the issue of whether 

mixed-wax candles could be later-developed merchandise. For Commerce, that was an 

open question for the anticircumvention inquiry, which is a reasonable threshold 

determination. See, e.g., Nippon Steel Corp. v. United States, 219 F.3d 1348, 1356 

(Fed. Cir. 2000) (The statement in Wheatland Tube that the minor alterations provision 
Court No. 06-00383 Page 21

does not apply to products unequivocally excluded from the order “cannot be read as 

barring Commerce from conducting an inquiry to determine whether the addition of a 

small amount of boron constituted a minor alteration that still left the product subject to 

the antidumping duty order.”). 

C. Whether Commerce’s inclusion of mixed-wax candles within the Order 

impermissibly expands the Order contrary to the domestic like product 

definition 

Plaintiffs also argue that Commerce’s inclusion of mixed-wax candles within the 

scope of the Order represents an impermissible expansion of the Order contrary to the 

domestic like product definition. Plaintiffs correctly note that the original like product 

definition, candles “composed of over 50 percent petroleum wax,” Original Injury 

Determination at 5, did not cover mixed-wax candles, a fact repeatedly reinforced by 

Commerce’s subsequent scope determinations involving mixed-wax candles. The ITC, 

however, changed the like product definition during the Second Sunset Review to 

include candles “containing any amount of petroleum wax,” a change that ostensibly 

cured any potential like product issues. Second Sunset Review at 9. 

Although the ITC’s expansion of the like product definition 19 years after the 

Original Injury Determination may raise interesting issues, see, e.g., Ad Hoc Shrimp 

Trade Action Comm. v. United States, 515 F.3d 1372, 1384 (Fed. Cir. 2008) (“the ITC 

has no independent authority to expand the scope of an antidumping investigation”), 

no one challenged the Second Sunset Review. That decision is final and conclusive 

(as well as the domestic like product definition that it contains) and the court may not 

entertain a collateral attack to the Second Sunset Review within this proceeding 
Court No. 06-00383 Page 22

because the jurisdictional predicates for judicial review of the Second Sunset Review

have not been satisfied. See 19 U.S.C. § 1516a(a)(2)(A). As the domestic like product 

now covers candles “containing any amount of petroleum wax,” Commerce’s inclusion 

of mixed-wax candles within the scope of the Order does not impermissibly expand the 

scope of the Order contrary to the domestic like product definition. 

IV. Conclusion 

The court concludes that (1) Commerce’s commercial availability standard is 

reasonable, but Commerce’s finding that it could not “definitively conclude” that mixedwax candles were commercially available during the LTFV investigation cannot be 

reviewed in its present posture; (2) Commerce’s requirement that “later-developed 

merchandise” must in every instance involve a significant technological advance or 

significant alteration of the subject merchandise is not in accordance with 19 U.S.C. 

§ 1677j(e); (3) Commerce’s initiation of the anticircumvention inquiry was in accordance 

with law; and (4) Commerce’s inclusion of mixed-wax candles within the scope of the 

Order does not impermissibly expand the scope of the Order contrary to the domestic 

like product definition. 

Accordingly, it is hereby 

ORDERED that this action is remanded to the U.S. Department of Commerce 

(“Commerce”) to reconsider its finding that it “cannot definitively conclude that mixedwax candles were available in the market at the time of the LTFV investigation.” On 

remand Commerce may (a) make a straightforward finding of commercial unavailability 

at the time of the LTFV, or (b) further explain its proposed “definitive conclusiveness” 
Court No. 06-00383 Page 23

evidentiary standard as a reasonable application and interpretation of the “laterdeveloped merchandise” anticircumvention provision. Commerce must share the new 

proposed standard and accompanying explanation with the parties and provide them 

with an opportunity to address that standard as it applies to the record evidence. 

Commerce can then make a factual finding based on the proposed standard; and it is 

further 

ORDERED that Commerce’s requirement that “later-developed merchandise” 

must in every instance involve a significant technological advance or significant 

alteration of the subject merchandise is not in accordance with 19 U.S.C. § 1677j(e), 

and Commerce must therefore reconsider this aspect of its definition of later-developed 

merchandise; and it is further 

ORDERED that Commerce is to file the remand results on or before 

November 12, 2008; and it is further 

ORDERED that the parties are to file a proposed scheduling order on or before 

November 25, 2008, for the submission of comments with page limits on the remand 

results.

 /s/ Leo M. Gordon 

 Judge Leo M. Gordon 

 

Dated: September 18, 2008 

 New York, New York