SAN FRANCISCO CANDLE COMPANY, INC., Plaintiff,

v. UNITED STATES, Defendant,

and NATIONAL CANDLE ASSOCIATION,

Defendant-Intervenor.

Slip Op. 02-47 United States Court of International Trade

Before: Pogue, Judge Court No. 01-00088

[Plaintiff’s motion for judgment on the agency record denied. Remandedto the Department of Commerce for further p roce edings consistent with this opinion.] Decided: May 30, 2002 Sandler, Travis , & Rosenberg, P.A. ( Philip S. Gallas , Gregory S. Menegaz ) for Plaintiff. Robert D. McCallum, Jr. , Assistant Attorney General, David M. Cohen , Director, Reginald T. Blades, Jr. , Senior Trial Counsel, Commercial Litigation Branch, Ci vil Division, U.S. Department of Justice, John F. Koeppen , Of Counsel, Office of the Chief Counsel f or Import Administration, U.S. Department of Commerce, fo r Defendant. Barnes & Thornburg ( Randolph J. Stayin , Karen A. McGee ) for Defendant-Intervenor. OPINION Pogue, Judge: Plaintiff San Francisco Candle Company (“SFCC”) moves for judgment upon the agency record pursuant to USCIT Rule 56.2,Court No. 01-00088 Page 2

challenging a determination by the U.S. De part ment of Commerce (" Com merce") that certain candles are within the scope of an antid umping duty order. This Court has jurisdiction under 28 U.S.C. § 1581(c) (2000) and19 U.S.C. § 1516a(a)(2)(B)(vi) (2000).

Background In August 1986, Commerce issue d an antidumping duty order covering “[c]ertain scented or unscented petroleum wax candles made frompetroleum wax and having fiber or paper-cored wicks . . . sold in the following shapes: tapers, spirals, and straight-sided dinner candles; rounds, columns, pillars, votives; and various wax-filled

c ontainers.” Antidumping Duty Order: Petroleum Wax Candles fro m the People’s Republic of China , 51 Fed. Reg. 30,686, 30,686 (Dep't Commerce 1986) (“Candles Order” or “Order”). A subsequent notice indicated that certain novelty candles would be excluded from the Order’s scope: The Department of Commerce has determined that cer tain novelty candles, such as Christmas novelty candles, are n ot within the scope of the antidumping orde r o n petroleumwax candles from the People’s Republic of China (PRC). Christmas novelty candles are specially designed for use only in connection with the Christmas holiday season. This use is clearly indicated by Christmas scenes or symbols depicted in the candle design. Other noveltycandles not within the scope of the order include c andles having scenes or symbols of other occasio n s (e.g., religious holidays or special events) depicted in their desig ns, figurine candles, and candles shaped in the form of identifiable objects (e.g., animal s or numerals). Dep’t of Commerce, Scope Clarification Notice, Petroleum-WaxCourt No. 01-00088 Page 3

1 SFCC submitted the following twelve candles for review in its Scope Ruling Request: 1. Christmas Holly Leaf with Berries Candy Cane Pillar (Item No. 03433) 2. Santa Claus Motif Candy Cane Pillar (Item. No. 13403) 3. Christmas Tree with Star Candy Cane Pillar (Item. No. 73633) 4. Christmas Holly Leaf Pillar (Item No. 83136) 5. Christmas Sock Pillar (Item No. 83036) 6. Santa Claus Pillar (Item No. 82936) 7. Carved Christmas Tree with Star Pillar (Item No. 64904) 8. Santa Claus Candy Cane Column (Item No. 00016) 9. Christmas Holly Leaf with Berries Candy Cane Column (Item No. 00016) 10. Christmas Tree with Star Candy Cane Column (Item No. 00016) 11. Christmas Holly Leaf with Berries Pillar (Item No. 166406) 12. Christmas Patchwork Pillar and Christmas Patchwork Square (Item No. 15736) The opinion will refer to the candles by the assigned numbers 1- 12.

2 Commerce found Candle 7, the Carved Christmas Tree with Star Pillar (Item No. 64904), to be outside the scope of the Order. This is a white candle decorated with gold images of Christmas Candles from the People’s Republic of China - Case Number A-570- 504 , Pl.’s Ex. 4 at 1 (“Scope Clarification”); Customs Info. Exch. Notification, Petroleum Wax Candles from the People’s Republic of China - Antidumping - A-570-504 , CIE N–212/85 (Sept. 21, 1987). In November 2000, SFCC requested that Commerce issue a scope ruling as to twelve candles. 1 See Letter fromSan Francisco Candle Company to Se an Carey, Dep’t of Commerce, Int’l Trade Admin., Antidumping and Countervailing Enforcement Group III (Nov . 17, 2000), Compl. App. I (“Scope Ruling Request”). Commerce found eleven of the twelve candles to be within the scope of the Candles Order. 2 See Fi nal Scope Ruling; Antidumping Duty Order onCourt No. 01-00088 Page 4

trees. Commerce held that the image is clearly identifiable as a Christmas tree, which is specific to the Christmas holiday; that the design is viewable from most angles; and that its removal would cause significant damage to the candle. This candle is not at issue here.

3 The twelfth candle listed in the Scope Ruling Request is a Christmas Patchwork design available as a 3 in. x 6 in. pillar and a 3 in. x 3 in. cube. In its Final Scope Ruling, Commerce addressed the Christmas Patchwork Pillar but made no determination as to the Christmas Patchwork Square. See Scope Ruling Request, Compl. App. I ¶ 12; Final Scope Ruling at 7, Compl. App. III.

4 These are the Moonlite Candy Cane candles (Item No. 213649), available in two color combinations: red, white, and green, or red and white. PetroleumWax Candles from the People’s Republic of China, (A-570- 504); SFCC at 4-7 (Feb. 12, 2001) (“Final Scope Ruling”), Compl. App. III. SFCC appeals the results of the Final Scope Ruling pursuant to 28 U.S.C. § 1581(c), claiming that all of the candles submitted in the Scope Ruling Request are novelty candles that fall outside the scope of the Candles Order. SFCC also submits for review the Christmas Patchwork Square, which Commerce did not address in its Final Scope Ruling, 3 and two c andl es that were not presented to Commerce in th e Scope Ruling Request. 4 See Pl.’s Mem. Supp. Mot. J. Agency R. at 32 (“Pl.’s Mem.”); Scope Ruling Request, Compl. App. I. Defendant asserts that candles 2, 3, 5, 6, 8, and 10 were

corr ectly found to be within the scope of the Candles Order, and requests that candles 1, 4, 9, 1 1, and 12 be remanded for reconsideration by Commerce. See Def.’s Resp. Pl.’s Mot. J. AgencyCourt No. 01-00088 Page 5

R. at 2-3 (“Def.’s Resp.”). Standard of Review This Court will upholdan ag ency determination unless it is “unsupportedby substantial evidence on the record or otherwise not in acco rda nce with law.” 19 U.S.C. § 1516a(b)(1)(B)(I) (2000). Substantial evidence is “something less than the weight of the evidence,” Consolo v. Fed. Mar. Comm’n , 383 U.S. 607, 620 (1966), but is “more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. NLRB , 340 U.S. 474, 477 (1951) (quoting Consol. Edison Co. v. NLRB , 305 U.S. 197, 229 (1938)). The possibility of drawing two inconsistent conclusions from the same evidence does not mean that the agency’s finding is unsupportedby substantial evidence, see Consolo , 383 U.S. at 620, andt his court “may not substitute its judgment for that of the [agency] when the choice is ‘between two fairly conflicting views,

even though the court woul d just ifiably have made a different choice had the matter been before it de novo .’” Timken Co . v . UnitedStates , slip op. 02-38 at 5-6 (CIT Apr. 22, 2002) (internal citations omitted). Discussion I. Scope Determinations Comme rce has inherent authority to define and clarify the scope of an antidumping duty investigation. See Koyo Seiko Co.,Court No. 01-00088 Page 6

5 If a determination cannot be made using only the descriptions, Commerce initiates a scope inquiry and considers the following five factors: “(i) [t]he physical characteristics of the product; (ii) [t]he expectations of the ultimate purchasers; (iii) [t]he ultimate use of the product; (iv) [t]he channels of trade in which the product is sold; and (v) [t]he manner in which the product is advertised and displayed.” 19 C.F.R. § 351.225(k)(2); see also Diversified Prods. Corp. v. United States , 6 CIT 155, 162, 572 F. Supp. 883, 889 (1983). In the instant case, the criteria of 19 C.F.R. § 351.225(k)(1) are dispositive. As Commerce concluded, no consideration of the criteria 19 C.F.R. § 351.225(k)(2) was required. Ltd. v. United States , 17 CIT 1076, 1078, 834 F. Supp. 1401, 1403 (1993), aff’d , 31 F.3d 1177 (Fed. Cir. 1994). However, “while [Comme rce ] may interpret those orders, it may not change them.” Erics son GE Mobile Communication, Inc. v. United States , 60 F. 3 d 778, 782 (Fed. Cir. 1995) (citing Smith Corona Corp. v. United States , 915 F.2d 683, 686 (Fed. Cir. 1990)). In determining whether a product falls within the scope of an order, Commerce looks to “[t]he descriptions of the merchandise containedin the petition, the initial investigation, and the determinations of the Secretary (including prior scope determinations) and the Commission.” 19 C.F.R. § 351.225(k)(1) (2000). If the descriptions are dispositive, Commerce must issue the scope ruling based on this information alone. See id. at § 351.225(k)(2); Nitta Indus. Corp. v. United States , 997 F.2d1459, 1461 (Fed. Cir. 1993). 5

II. The Candles OrderCourt No. 01-00088 Page 7

6 As noted earlier, the Candles Order excludes the following as novelty candles: a) “Christmas novelty candles . . . specially designed for use only in connection with the Christmas holiday season. This use is clearly indicated by Christmas scenes or symbols depicted in the candle design;” b) “Candles having scenes or symbols of other occasions (e.g., religious holidays or special events) depicted in their designs;” c) “Figurine candles;” and d) “Candles shaped in the form of identifiable objects, (e.g. animals or numerals).” Scope Clarification, Pl.’s Ex. 4 at 1. In making a scope determination under the Candles Order, Commerce first determines whether the candle is in a shape covered by the Order. If so, Commerce then cons iders whether the candle maybe excluded from the Order as a novelty candle. 6 Among the excluded novelty candles are holiday candles, including Christmas candles. In analyzing holiday novelty candles, including Christmas candles, Commerce asks whether the candle is specially designedfor

use only in connection with a specific holiday or event. Under the Scope Clarification, Christmas candles must be “specially designed for use only in connection with the Christmas holiday season,” and this use must be “clearly indicated by Christmas scenes or symbols depicted in the candle design.” Scope Clarification, Pl.’s Ex. 4 at 1. Prior scope rulings indicate that in order to qualify a candle for exclusion, a holiday design must be easily recognizable as a specific holiday image.Court No. 01-00088 Page 8

If a candle is found to be specially designed for use only in

conn ection with a specific holiday or event, Commerce then determines whether the decorations can be removed without damaging the candle. See Final Scope Ruling, Endar Corp. at 4 (July 7, 2000) (explaining Commerce’s three-step analysis of holiday novelty candles); see also Final Scope Ruling, Am. Greetings Corp. at 6 (May 4, 2000) (stating that Commerce will analyze whether a decoration may be easily removed only after first determining that the candle qualifies as a holiday novelty candle); Final Scope Ruling, Hallmark Cards, Inc. at 2 (Sept. 30, 1993) (finding a candle outside the scope of the Order because an engraved poem entitled“Our Wedding” limited its use to weddings and could not be removedwithout damaging the candle). If a candle’s design is specific to a particular holiday or event but is not easily

reco gnizable or is easily removed without damaging the candle, Commerce may still find the candle to be within the scope of the Order. The holiday novelty exclusion is defined narrowly. See Russ Berrie & Co., Inc. v. United States , 23 CIT 429, 440, 57 F. Supp. 2d1184, 1194 (1999); Final Scope Ruling, Endar Corp. at 5 (July 7, 2000). Decorative images must be specific to the holiday; generic andseasonal designs are not grounds for exclusion. See, e.g. , Final Scope Ruling, Endar Corp. at 4 (July 7, 2000) (“Candles bearing designs or symbols of a g eneral seasonal nature, forCourt No. 01-00088 Page 9

example, hav e not warranted exclusion as holiday novelty candles.”); Final Scope Ruling, Am. Greetings Corp. at 8 (May 4, 2000) (candles decorated with snowflakes are seasonal and therefore do not qualify as holiday novel ty candles); Final Scope Ruling, Kohl’s Dep’t Stores, Inc. , Def.-Int.’s Ex. 14 at 4 (Aug. 24, 1998) (candle decorated with cherubs, rope, flowers, and vines was within the scope of the Order because these decorations did not symbolize anyparticular holiday). Nor will colors alone qualify a candle for exclusion. See, e.g. , Springwater Cookie & Confections, Inc. v. United States , 20 CIT 1192, 1197 (1996) (“[C]olors per se will not exempt a candle from the scope of the antidumping order.”); Final Scope Ruling, Institutional Financing Services and Hallmark Cards, Inc . , Def.-Int.’s Ex. 12 at 3-4 (Apr. 9, 1997) (red and white rounds resembling a peppermint candy were within the scope of the Order). However, Commerce considers all of the characteristics of the cand le in combination, and colors and designs that may be insufficient bases for exclusion when considered individually may qualify a candle for exclusion when considered together. See, e.g. , Springwater , 20 CIT at 11 95-96; Final Scope Ruling, Endar Corp. , Def.-Int.’s Ex. 9 at 4 (Apr. 7, 1999) (“[B]ecause the design andcolor combination of this candle (pine cones bunched in the center of green pine branches against a red ba ckgrou nd) is associatedwith Christmas, we find that [this candle] qualifies for the holiday novelty candle exclusion.”); see also Final ScopeCourt No. 01-00088 Page 10

7 The following candles are included in Defendant’s remand request: 1. Christmas Holly Leaf Candle with Berries Candy Cane Pillar (Item No. 03433) This candle has red and white diagonal stripes on its sides and a holly leaf and berry design imprinted into its flat top surface. Commerce found this candle to be within the scope of the Order, maintaining that (a) the holly leaf and berry pattern is “generic to the winter season” and is not specific to Christmas; (b) the design on the top surface would quickly melt; and (c) red and white striped “candy cane” candles are not eligible for the holiday novelty exception (citing Final Scope Ruling, Institutional Financing Services and Hallmark Cards , Def.-Int.’s Ex. 12 at 4 (Apr. 9, 1997)). Final Scope Ruling at 4 ¶ 1, Compl. App. III. Ruling, Success Sales, Inc. , Pl.’s Ex. 6 at 3-5 (July 27, 1994) (A packagedset of three candles was found to b e a holida y novelty item where two of the three candles were holiday novelty candles, the packaging was labeled “Holiday Pillar Candles,” and the set was marketedduring the Christmas season); Final Scope Ruling, Cherrydale Farms Confections at 2-4 (Sept. 9, 1993) (A packaged set of two candles was found to be an excluded holiday no velty item where the candles used bayberry scent and red coloring, one candle

was a holiday novelty candle, the non-novelty candle depicted a winter scene, and the packaging was labeled “Holiday Candles.”).

III. The Scope Ruling A. Defendant’s Remand Request As a preliminary matter, the Court notes Defendant’s request for the remandof candles 1, 4, 9, 11, and 12 to the Department of Commerce for reconsideration. 7 See Def.’s Re sp. at 3. TheCourt No. 01-00088 Page 11

4. Christmas Holly Leaf Pillar (Item No. 83136) This dark green candle has a holly leaf and berry design drawn in white on one side. Commerce found this candle to be within the scope of the Candles Order, ruling that the holly leaf and berry design is “generic to the winter season” and “does not meet the specificity requirements to render a particular candle exempt under of the holiday novelty exemption.” Id. at 5 ¶ 4. 9. Christmas Holly Leaf with Berries Candy Cane Column (Item No. 00016) This candle is decorated with red, white and green diagonal stripes along its length and a small holly leaf and berry image on one side. Commerce ruled that this candle was within the scope of the Candles Order on the sole ground that the holly leaf and berry motif is not specific to Christmas. Id. at 6 ¶ 9. 11. Christmas Holly Leaf with Berries Pillar (Item No. 166406) The body of this red candle is covered with a raised holly leaf and berry design. Commerce found this candle to be within the scope of the Order on the ground that the holly leaf and berry design is “generic to the winter season” and not specific to the Christmas holiday. Id. at 6 ¶ 11. 12. Christmas Patchwork Pillar (Item No. 15736) This candle is decorated with a variety of small images, including holly leaves and berries, candy canes, evergreen trees, snow-covered houses, cardinals, stars, reindeer, and multicolored patchwork designs. Commerce ruled that none of the images were “solely specific to the Christmas holiday” and found the candle to be within the scope of the Order. Id. at 7 ¶ 12. decorative patterns on these candles include holly leaf and berry designs that Commerce determined to be “g eneric to the winter season” and therefore ineligible for exclusion from the Candles Order as holiday novelty candles. See Final Scope Ruling at 4-7 ¶¶ 1, 4, 9, 11, 12, Compl. App. III. This determination is contrary to Springwater , 20 CIT at 1195-96, which stated that holly sprigs

are “symbols associated with Christmas,” and to Candles Order rulings in which Comme rce, following Springwater , concluded thatCourt No. 01-00088 Page 12

the holly lea f and berry design is a symbol of Christmas that qualifies a candle for the holiday novelty exception. See Final Scope Ruling, Avon Products, Inc. , Def.-Int.’s Ex. 6 at 4 (May 8, 2001); Final Scope Ruling, Dollar Tree Stores, Inc. at 2-3 (Apr. 9, 1997). Although Commerce is authorized to alter its prior practice, it must demonstrate that a decision to do so is supp ort ed by substantial evidence a nd in accordance with law. See Asociacion Colombiana de Exportadores de Flores v. United States , 22 CIT 173, 184-85, 6 F. Supp. 2d 865, 879-80 (1998) (“Commerce has the flexibilityto change it s posi tion providing that it explain the basis for its change and providing that the explanation is in accordance w ith law and supported by substantial evidence.”) . Therefore, the Court will grant the defendant’s request andremand candles 1, 4, 9, 11, and 12 to Commerce for reconsideration. The Court further directs Commerce to consider both the cube and pillar versions of candle 12, the Christmas Patchwork candle, in its remand determination. B. SFCC’s Moonlite Candles Pl aint iff includes in its motion two Moonlite Candles (Item No. 213649) that were not submitted to Commerce in the Scope Ruling Request. See Compl. at 8 ¶ 31; Scope Ruling Request, Compl. App. I; Pl.’s Mem. at 32. Absent an agency determination, there is no basis for this Court to exercise jurisdiction in this matter. SeeCourt No. 01-00088 Page 13

19 U.S.C. § 1516a(a)(2)(B)(vi); Ericsson GE Mobile Comm., Inc. , 60 F.3da t 783 (“As the agency charged with administering the antidumping duty program, the Commerce D epar tment is responsible for interpreting the antidumping duty order and determining whether

ce rta in products fall within the scope of the order as interpreted.”). As Commerce has not had the opportunity to determine whether these candles fall within the scope of the Order, review in this Court is unavailable. C. Commerce’s Determinations in the SFCC Final Scope Ruling Candles 2, 3, 5, 6, 8, and 10 remain to be considered by the Court. All are formed in shapes covered by the Order. Plaintiff claims that they should be excluded from the scope of the Order as Christmas novelty candles. As the agency acknowledged, these candles are decorated with Christmas-specific images, including Santa Claus, Christmas trees, and Christmas stockings. Commerce nevertheless found the candles to be within the scope of the Order, reaso ning that: (1) designs

were not visible from most or all angles; (2) designs would quickly burn away when the candle was lit; (3) designs were “minimally decorative;” and (4) designs wer e not easily recognizable as ho lida y images. See Final Scope Ruling at 5-6 ¶¶ 2, 3, 5, 6, 8, 10, Compl. App. III. The Court will address Commerce’s analysis of each of these candles. 1. Candles 2 and 3Court No. 01-00088 Page 14

Candle 2, the Santa Claus Motif Candy Cane Pillar (Item No. 13403), is decorated with red and white diagonal stripes on its sides and an image of Santa Claus imprinted into the top surface. Similarly, candle 3, the Christmas Tree with Star Candy Cane Pillar (ItemNo. 73633), has red, white, and green diagonal stripes on its sides and an image of a Christmas tree with a star imprinted into the top surface. Commerce ruled that although the Santa Claus and Christmas tree images are sp ecific to Christmas, the designs are “onlydiscernable when viewedfrom above,” rather than visible from multiple angles, and “would soon melt away once the candle is lit.” Id. at 5 ¶¶ 2, 3. In both instances, Commerce further asserted that “a minimally decorative design that does not make the product easilyidentifiable as a novelty c andle is not grounds for excluding an item fromthe Order.” Id. (citing Final Scope Ruling, Endar Corp. at 6 (Jan. 10, 2000)). The Court will consider each of these reasons in turn. a. The Design Is Not Visible from Multiple Angles Whether a design may be seen from multiple angles has been a regular feature of rulings involving candles formed in the shape of identifiable objects. Commerce has determined that candles are within t he scope of the Order where a shape is not clearly identifiable as that of a particular object, or is not identifiable when viewed from multiple angles. See, e.g. , Final Scope Ruling, Meijer, Inc. , Def.-Int.’s Ex. 8 at 6-7 (Sept. 30, 1999) (“StarCourt No. 01-00088 Page 15

Candle” was within the scope of the Order because it was not clearly identifiable as a star or other object when viewedfromall sides); Final Scope Ruling, Endar Corp. , Def.-Int.’s Ex. 9 at 3-4, 6 (A pr. 7, 1999) (“Gold 5" High Holiday Candle” found within t h e scop e of the Order because it was not clearly identifiab le as a star or other object; however, the “Christmas Star Candle” was outside the scope of the Order because it was clearly identifiable as a star when viewed from all sides). Rulings addressing holiday novelty candles, however, have not previouslyrequiredthat a design be visible frommultiple angles. See Final Scope Ruling, Meijer Inc. at 4 (Dec. 15, 1997) (finding

a candle embossed with the word “Noel” to be a Chri stmas novelty candle without addressing the issue of visibility from multiple angles); Final Scope Ruling, Enesco Corp. at 3 (Oct. 30. 1996) (finding four candles decorated with raised Christmas scenes to be outside the scope of the Order without addressing visibility of the design); Final Scope Ruling, Watk ins, Inc. at 2 (Feb. 14, 1995) (ruling that a raised relief Christmas design “clearly limit[s] this candle for use in connection with t he Christmas holiday season,” without addressing visibility frommultiple angles); Final Scope Ruling, Hallmark Cards, Inc. at 2 (Sept. 30, 1993) (finding

a candle engraved with a poem entitled “Our Wedding” outside the scope of the Order because the poem limited its use to weddings and couldnot be removed without damaging the candle. The design’sCourt No. 01-00088 Page 16

v isibility from multiple angles was not addressed.). Commer ce’ s holiday novelty an alys is, explained in Final Scope Ruling, Endar Corp. at 4 (July 7, 2000), does not address the issue of the design’s visibility from multiple angles. Furthermore, a requirement of visibility from multiple angles conflicts with several earlier Candles Order rulings in which Commerce concluded that holiday designs on the lids of wax-filled conta i ners qualified candles for the holiday novelty exception. See Final Scope Ruling, Kohl’s Dep’t Stores, Inc. , Def.-Int.’s Ex. 14 at 6 (Aug. 24, 1998) (ruling that a wax-filled container with a Christmas print on the lid was a Christmas novelty candle and was outside the scope of the Order); Final Sco pe Ruling, Cherrydale Farm s Con fections at 3 (Sept. 3, 1993) (ruling that a wax filled container with a print titled “Bringing Home the Christmas Tree” on its lid was “limit[ed] . . . to use for Christmas” and was therefore a novelty candle excluded from the scope of the Order); Final Scope Ruling, Primark Int’l § 3 (June 9, 1993) (ruling that

a wax-filledcontainer with an image of Santa Claus and reindeer on the lid was a Christmas novelty candle and was excluded from the scope of the Order). A container lid is on top of the candle and must be removed entirely prior to use. Adesign on the lidis not visible either from multiple angles or when the candle is used. Thus, a requirement that a design be visible from multiple anglesCourt No. 01-00088 Page 17

appears inconsistent with the determination that a design on top of a container lid may exclude a candle from the scope of the Order. In another context, Commerce has found that designs molded on top of candles anddesigns that are recognizable only fromthe top

are not grounds for exclusion from the scope of the Order. See, e.g., Final Scope Ruling, Cherrydale Farms at 4 (Oct. 5, 2000) (finding that an insect shape molded o n top of a candle was insufficient to exclude it from the scope of the Order); Final Scope Ruling, Endar Corp. , Def.-Int.’s Ex. 11 at 5 (Jan. 10, 2000) (suggesting that impression of a dragonfly, visible only from the top, would not be sufficient to grant exclusion as a novelty candle. The candle was nevertheless excluded because it was formed in a s hape not covered by the Order.). These rulings involved candles formed in the shapes of identifiable objects, however, and Commerce has not previously applied this reasoning to holiday novelty candles. Moreover, like the requirement of visibility from multiple angles, a determination that a holiday design on top of a candle is an insufficient basis for exclusi on als o appears to conflict wit h the earlier determinations that holiday designs on the lids of wa x-fi lled containers are sufficient grounds for exclusion. See Final Scope Ruling, Kohl’s Dep’t Stores, Inc. , Def.-Int.’s Ex. 14 at 6 (Aug. 24, 1998); Final Scope Ruling, Cherrydale Farms Confections at 3 (Sept. 3, 1993); Final Scope Ruling, Primark Int’l § 3 (June 9, 1993).Court No. 01-00088 Page 18

An interpretation of the Scope Clarificatio n to require a Christmas design t o be v isible from multiple angles represents a change from Commerce’s prior practice. Yet here, Commerce offered

no explanation as to why the interpretation is correct or why Commerce altered its practice. Accordingly, the determination is not in accordance with law. b. The Design Would Quickly Burn or Melt Away As noted above, Commerce based its determination partly on the conclusion that the Santa Claus and Christmas tr ee d esigns im print edinto the top surfaces of candles 2 and 3 would quickly melt away when the candles were lit. See Final Scope Ruling at 5 ¶¶ 2,3, Compl. App. III. Commerce has consist ently ruled that a novelty candle may still fall within the scope of the Order if the figurine or other decoration that qualifies the candle for novelty status may be easily removed without damaging the candle. See, e.g. , Final Scope Ruling, Meijer, Inc. at 5 (June 11, 1998) (candle foundoutside the scope of the Order where an attached chick figurine could not be removed without damaging the candle); Final Scope Ruling, Two’s Company, Inc. , Def.-Int.’s Ex. 5 at 4 (Jan. 13, 1995) (candle with attached gold angel figurine was o uts ide the scope of the Order because the figurine could not be removed without damaging the candle). However, Commerce has not previously determined that a candle is within the scope of the Order beca use a design would quicklyCourt No. 01-00088 Page 19

burn or melt away. Moreover, the burning or melting of a design is not equivalent to the easy removal of a figurine or decoration. First , burn ing or melting a design cannot be achieved without damage to the candle. Second, the question of burning or melting the design requires consideration of the candle’s characteristics after consumption, while the question of eas y remo val of a decoration considers the candle’s characteristics prior to consumption. Prior ru ling s indicate that in determining whether merchandise falls within the scope of an antidumping order, Commerce looks to the condition of merchandise at the time of importation or purchase by the consumer, not at the time of consumption. See, e.g. , Final Scope Ruling, Russ Berrie, Inc. at 4 (Sept. 25, 1997) (“The issue before the Department . . . is not the disposition of the container after the candle is consumed but, rather, the wax-filled container en toto as it is importedinto the UnitedStates.”); Final Scope Ruling, Candles by Finesse at 3 (Mar. 18, 1992) (Spiral candle whi ch le ft behind a wax sculpture as it burnedwas within the scope of the Order because “at the time of purchase , [t he candle] is not distinguishable in appearance from other spiral candles subject t o the Order.”). Accordingly, this basis for Commerce’s decision is not in accordance with law. c. The “Minimally Decorative” Standard Commerce characterized the d esi gns on candles 2 and 3, and others discussed infra , as “minimally decorative.” See Final ScopeCourt No. 01-00088 Page 20

Ruling at 5 ¶¶ 2, 3, Compl. App. III. The term “minimally decorati ve” is taken from Commerce’s Final Scope Ruling, Endar Corp. , Def.-Int.’s Ex. 11 (Jan. 10, 2000), in which Commerce ruled that a candle with a bamboo design that incorporated only one characteristic knot andribbedjoint was not formed in the shape of an identifiable object, and was therefore within the scope of the Order. Commerce stated that “the center joint is only slightly raisedand not easily discernable, and the single knot is not visible from all sides. Therefore, . . . th e min imal decorative de sign d oes not make this candle easily identifiable as bamboo.” Final Scope Ruling, Endar Corp. , Def.-Int.’s Ex. 11 at 6 (Jan. 10, 2000). Endar may be interpretedto promulgate a two-prong standard which asks, first, whether the d esign is easily discernable, and second, whether it is visible from all sides. The first element of this “ mini mally decorative” standard appears to correspond to an inquiry used in the holiday novelty analysis: whether the design is easilyrecognizable as a holiday image. See Final Scope Ruling, Endar Corp. at 4-5 (July 7, 2000); Final Scope Ruling, Midwest of Cannon Falls, Inc. at 3 (Oct. 30, 1996); Final Scope Ruling, Enesco Corp. at 3 (Oct. 30, 1996); Final Scope Ruling, Kohl’s Dep’t Stores, Inc. , Def.-Int.’s Ex. 14 at 6 (Aug. 24, 1998). The second element, however, asks whether the decoration is visible from multiple a ngles. As discussed above, this inquiry has notCourt No. 01-00088 Page 21

8 The standard was similarly applied with respect to candles 2, 3, 5, 6, 8, and 10. The analysis discussed here is applicable to all of these candles. previouslybeen applied to holiday novelty candles. See supra text at pp. 14-18. Absent further explanation, this Court is unable to determine that its use is supported by substantial evidence and in

accor dance with law. Commerce is therefore directed to evalua t e the applicability of this standard to holiday novelty candles. Assuming, arguendo , that the Endar ruling promulgates a twopart st andardthat may be applied to holiday novelty candles, Commerce’s application of that standard in the instant case is flawed. In Endar , Commerce drew its conclusion that the candle was minimallydecorated after a two-step in quiry. In the instant ruling, in contra st, the statement that the design is minimally decorative is simply an assertion, rather than a conclusion derived fromexamination of the candle’s characteristics. 8 In addressing candle 2, the Santa Claus Motif Candy Cane Pillar, Commerce stated, While the Santa Claus image is specific to the Christmas holiday, it is only discernable when viewed from above andwould soon melt away once the candle is lit. In a previous scope ruling, the Departme nt fou nd that a minimallydecorative design that does not make t he product eas ily identifiable as a novelty candle is not grounds for excluding an item from the Order.

Final Scope Ruling at 5 ¶ 2, Compl. App. III. This statement does not demonstrate a clear analysis under the two criteria of Endar . Although the mention of the Santa Claus image implies that theCourt No. 01-00088 Page 22

design is recognizable, and the statement notes that the design is visible only from above, rather than from multiple angles, the decision that the design is minimally decorative, if it is based on anyanalysis at all, is based partly on a third criterion not found in Endar : whether the design will quickly melt. S imil arly, in its analysis of another candle, Commerce said that “[w]hile the image of Santa Claus is specific to the Christmas holiday, this particular ornamentation is only minimallydecorative andnot viewable from most angles, and therefore is not grounds for excluding this item from the scope of the Order.” Id. at 6 ¶ 8. Here, the vi sibili ty of the design is mentioned only after describing the candle’s design as “minim ally decorative.” The description of the candle as “minimally decorative” is itself merely an assertion. In summary, Commerce must determine whether the term “minimallydecorative” refers to a two-element standard that is applicable to holiday novelty candles. If so, Commerce must apply the standard in an appropriate manner, “articulat[ing a] rational

conn ection between the facts found and the choice made.” Burlington Truck Lines, Inc. v. United States , 371 U.S. 156, 168 (1962). d. The Combined Effect of Colors and Holiday Design The Court notes that Commerce omitted any discussion of whether the combination of color patterns andholiday images mightCourt No. 01-00088 Page 23

brin g thes e candles within the holiday novelty exception. As previouslydiscussed, see supra text at pp. 9-10, decorations that provide insufficient grounds for exclusion when considered individually may be sufficient to exclude a candle from the scope of the Order when considered in combination. See Springwater , 20 CIT at 1195-96; Final Scope Ruling, Endar Corp. , Def.-Int.’s Ex. 9 at 4 (Apr. 7, 1999). Here, Commerce should evaluate whether the combination of red, white, and green colors, the pattern of diagonal stripes, and the holiday-specific de sign s may be sufficient to find that these candles are “specially designed for use only in connection with the Christmas holiday season.” Scope Clarification, Pl.’s Ex. 4 at 1. e. Conclusion In accordance with the comments above, Co mmerce should evaluate whether the requirement of visibility from multiple angles and t he related “minimally decorative” standard are proper l y applicable to candles 2 and 3. Absent some further explanation, Commerce should omit consideration of whether a design would easily burn or melt away, as this is not in accordance with law. Finally, if Commerce determines that the individual decorative characteristics of these candles do not qualify for the holiday novelty ex clus ion, the agency should assess whether the combined effect of the decorations removes these candles from the scope of the Candles Order.Court No. 01-00088 Page 24

2. Candles 5, 8, and 10 Candle 5, the Christmas Sock Pillar (Item No. 83036) is a white candle with an image of a stocking drawn in red on one side. Candle 8, the Santa Claus Candy Cane Column (Item No. 00016), has red and white diagonal stripes along the body of the candle and a small image of Santa Claus visible on one side. Similarly, candle 10, the Christmas Tree with Star Candy Cane Column (Item No. 00016), has red, white and green diagonal stripes along the body of the candle anda small image of a Christmas tree with a star on one side. Although Commerce ruled th a t the Christmas stocking, Santa Claus, and Christmas tree images are specific to the Christmas holiday, all three of these candles were foundwithin the scope of the Order on the grounds that the designs w ere not vi sible from most angles and were minimally decorative. See Final Scope Ruling at 5-6 ¶¶ 5, 8, 10, Compl. App. III. As with candles 2 and 3, Commerce must evaluate whether the requirement of visibility from multiple angles and the “minimally d ecorative” standard are properly applied to holiday n ovelt y candles. Additionally, Commerce should assess whether the combinations of colors, patterns, and Christmas images render these candles “specially designed for use only in connection wi th the Christmas holiday season.” Scope Clarification, Pl.’s Ex. 4 at 1.Court No. 01-00088 Page 25

3. Candle 6 Candle 6, the Santa Claus Pillar (Item No. 8 2936) , is a red candle with a silhouette drawn in white on one side. As with the previous three candles, Commerce held that the design was “mi nimallydecorative” and was not easily viewable from mo s t perspectives. Here, however, Co m merce’s determination that the candle falls within the scope of the Order rested primarily on the finding that the Santa Claus image is not easily recognizable. Commerce has previouslywithheld novelty candle status on the grounds that the decor ative design is not identifiable or easily recognizable as a holiday image. See, e.g. , Final Scope Ruling, Endar Corp. at 6 (July 7, 2000) (ruling that candle decorations that were not recognizable as Christmas trees or holly bushes did not qualify for holiday novelty exception); Final Scope Ruling, Midwe st of Cann on Falls, Inc. at 3 (Oct. 30, 1996) (ruling that Easter taper candle decorated with Easter eggs was within the scope of the Order because the decoration was not readily identifiable as eggs); cf. Final Sco pe Ruling, Kohl’s Dep’t Stores, Inc. , Def.- Int.’s Ex. 14 at 6 (Aug. 24, 1998) (finding a wax-filledcontainer to be outside the scope of the Order because the print on the

co ntaine r’s lid was “clearly intended to represent Christmas carolers”); Final Scope Ruling, Enesco Corp. at 3 (Oct. 30, 1996) (ruling that four candles were outside the scope of the Order because they “are designed for use only in connection with theCourt No. 01-00088 Page 26

Christmas holiday season” an d “eac h candle’s design contains identifiable features commonly associated with the Christmas season”) . Such a requirement is in acco rdanc e with the terms of the Scope Clarification, which requires a Chr ist mas novelty candle’s holiday use to be “ clearly indicatedby Christmas scenes

or symbols depicted in the candle design.” Scop e Clarification, Pl.’s Ex. 4 at 1 [emphasis supplied]. The design on candle 6 is an undetailed sketch composed of curving lines. Commerce found the design to be “a stylized outline of what appears to be a head and shoulders.” Final Scope Ruling at 5 ¶ 6, Compl. App. III. After viewing the candle, we conclude that Commerce’s finding is a reasonable construction of the evidence. Accordingly, Commerce’s determination that the design is not easily recognizable as Santa Claus is supported by substantial evidence. As the lack of clarity in the design is sufficient to deny holiday novelty status, the Court does not reach the application of the “viewable from multiple angles” and “minimally decorative” standards in this instance. Conclusion Commerce should rec onsid er and clarify its reasoning with

re gardt o the subject candles. Pursuant to Defendant’s request, candles 1, 4, 9, 11, and 12 are remanded to Commerce for reconsider ati on. Candles 2, 3, 5, 8, and 10 are remanded to Commerce for further proceedings consistent with this opinion. TheCourt No. 01-00088 Page 27

determination of the Department of Commerce as to candle 6, the Santa Claus Pillar (Item. No. 82936), is aff irm ed. Plaintiff’s claimregarding the Moonlite Candles (Item No. 213649) is dismissed for lack of jurisdiction.

___________________________ Donald C. Pogue Judge

Dated: May ___, 2002

New York, New York