Slip Op. 17-  UNITED STATES COURT OF INTERNATIONAL TRADE
MITSUBISHI POLYESTER FILM, INC. and SKC, INC., Plaintiffs,

v. UNITED STATES, Defendant, and TERPHANE, INC. and TERPHANE, LTDA., Defendant-Intervenors. Before: Gary S. Katzmann, Judge
Court No. 13-00062

OPINION AND ORDER [Plaintiff’s motion for judgment on the agency record is granted in part and denied in part. Commerce’s determination under 19 C.F.R. § 351.225(k)(1) as to Defendant-Intervenors’ Copolymer Surface Products is remanded.] Dated: -XQH Jeffrey I. Kessler, Wilmer, Cutler, Pickering, Ha le and Dorr, LLP, of Washington, DC, argued for Plaintiff. With him on the brief were Ronald I. Meltzer, Patrick J. McLain, and David M. Horn. Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, Jane C. Dempsey, Trial Attorney, and Mykhaylo Gryzlov, Senior Atto rney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Depa rtment of Commerce, Washington, DC. J. Michael Taylor and Stephen A. Jones, King & Spalding, LLP, of Washington, DC, argued for Defendant-Intervenors. With themon the brief was Shannon M. Doyle.Court No. 13-00062 Page 2
Katzmann, Judge: Polyethylene terephthalate (“PET”) is all around us. PET is a polymer with a great number of uses––for instance, PE T film could be found in tamper-evident food packaging such as potato chip bags and safety s eals, in frozen and refrigerated food packaging, in laminated materials such as traffic signs, in pr intable products used in graphical media, in the scratch-resistant coverings of smartphones, and in protective c overings that shield sensitive equipment from UV radiation, to name but a few app lications. In this case the court considers whether a particular set of PET products manufac tured abroad by Terphane, Ltda. and imported by Terphane Inc. (collectively “Terphane”), falls within the scope of a duly issued antidumping duty order on imports of certain PET products. The basic question is whether the Department of Commerce’s (“Commerce”) determination that Terphane’s products we re not within the scope of the antidumping duty order was supported by substantial evidence and in accordance with law. The court concludes that Commer ce reasonably determined that the language of the order was ambiguous with respect to whether it includes f ilms like Terphane’s. Th e court also concludes that Commerce’s analysis in determining that Terphane’s films are not dispositively in scope is deficient and unsupported by substantial evidence. Accordingly, the case is remanded for further proceedings. Generally speaking, PET film production begins with the polymerization process, in which the combination of certain chemicals and additiv es, heated in multiple rounds and then cooled, forms PET pellets or “chips.” The next phase is extrusion. The PET chips are melted and then squeezed through a die, cooled, heated, and mani pulated to a specified length or width. “Coextrusion” by contrast involves the simultaneous extrusion of pol ymer from multiple lines through a single die; in other words, extrusion involves only one stream of polymer, whereas co-extrusion involves multiple streams of polymer that may differ in their chemical makeup and physicalCourt No. 13-00062 Page 3
properties. At the time of co-extrusion, these mu ltiple outputs may be stac ked or alternated to form a single, layered, co-extruded PET product. After extrusion or co-extrusion, the molten polymer substance is cooled, and then stretched to form a film. The PET product may still be altered or treated in some way, such as through the addition of another layer or coating to a side of the PET; this may occur “in-line,” as part of the manufacturing process, or “off-line.” Thereafter it is trimmed and bound as necessary. The many variables in these procedures permit the customizability in performance characteristics necessary to vend PET to a broad and highly diverse market. This matter comes before the court on the Motion of Plaintiffs Mitsubishi Polyester Film, Inc. and SKC, Inc. (collectively “Mitsubishi”) for Judgment on the Agency Record, pursuant to USCIT Rule 56.2, with regard to the determination by Commerce issued in the “Antidumping Duty Order on PET Film, Sheet, and Strip from Brazil: Final Scope Ruling, Terphane, Inc. and Terphane Ltda.” (Jan. 7, 2013), PD 35 (“Terphane Scope Ruling” or “Scope Ruling”). Mitsubishi argues that a number of legal and factual determinations in the Scope Ruling, in which Commerce found that certain of Terphane’s PET film product s are outside of the scope of the underlying antidumping duty order, are contrary to law and, alternately, unsupported by substantial evidence on the record pursuant to Section 516A(b)(1)(B)(i ) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(b)(1)(B)(i). 1 Pl.’s Mot. for J. on the Agency R. and Br. in Supp., Aug. 2, 2013, ECF No. 22 (“Pl.’s Br.”); Pl.’s Reply, Feb. 3, 2014, ECF No. 38 (“Pl.’s Reply”); Pl.’s Compl., Mar. 8, 2013, ECF No. 13 ¶ 11 (“Pl.’s Comp l.”). Mitsubishi thus seeks remand. 2 Pl.’s Compl. ¶

1 Further citations to the Tariff Act of 1930 are to the relevant portions of Title 19 of the U.S. Code, 2012 edition, and all applicable ame ndments thereto, unless otherwise noted.

2 Mitsubishi also argues that Commerce’s failure to issue the Scope Ruling within 45 days of the submission of the scope application renders it invalid. Pl.’s Compl. ¶ 26–27.Court No. 13-00062 Page 4
28. Defendant United States (or “the Government ”) and defendant-inte rvenors Terphane oppose plaintiffs’ motion. Def.’s Opp’n, Dec. 4, 2013, ECF No. 29 (“Def.’s Opp’n”); Def.-Inter.’s Opp’n, Dec. 4, 2013, ECF No. 31 (“Def.-Inter.’s Opp’n”).
BACKGROUND I. Legal Framework Under the antidumping statute, Commerce imposes duties on imported merchandise that “is being, or is likely to be, sold in the United States at less than fair value,” i.e. “dumped,” and harms domestic industry. 19 U.S.C. §§ 1673, 1677 (34). An industry, which “means the producers as a whole of a domestic like product,” 3 19 U.S.C. § 1677(4)(A), may petition Commerce to initiate a dumping investigation pursuant to § 1673a(b). A pe tition must be filed “by or on behalf of the industry,” and must “allege[ ] the elements necessary for the imposition of the duty . . . accompanied by information reasonably available t o the petitioner supporting those allegations.” 19 U.S.C. § 1673a(b)(1), (c)(1)(A), (c)(4)(A). If Commerce determines that a petition meets these requirements, it initiates an investigation. 19 U.S.C. § 1673a(a)(1). Commer ce then collects information from foreign producers and makes a preliminary determination as to the extent of alleged dumping. 19 U.S.C. § 1673b(b). The International Trade Commission (“ITC”) meanwhile collects information from the affected domestic industry and makes a preliminary determination as to whether material injury or a threat thereof exists. 19 U.S.C. § 1673b(a) . Within seventy-five days of its own preliminary determination, Commerce sh all make a final deter mination regarding the existence and extent of

3 Domestic like product, meanwhile, is “a product which is like, or in the absence of like, most similar in characteristics and uses w ith, the article subject to an inve stigation under this subtitle.” 19 U.S.C. § 1677(10).Court No. 13-00062 Page 5
dumping. 19 U.S.C. § 1673d(a). If that determin ation is affirmative, th e ITC will make a final determination as to materi al injury or threat thereof to the affected domestic industry. 19 U.S.C. § 1673d(b). If the ITC’s determination is also affirmative, then Commerce shall publish an antidumping duty order that “includes a descripti on of the subject merchandise, in such detail as the administering authority deems necessary.” 19 U.S.C. § 1673e(a)(2). When a question arises as to whether a particular product is included in an antidumping duty order, an interested party may apply fo r a scope ruling from Commerce. 19 C.F.R. § 351.225(a), (c) (2012); see 19 U.S.C. § 1516a(a)(2)(B)(vi) . While no specific statutory provision governs the interpretation of the scope of antidumping duty orders, Commerce has filled the statutory gap with a regulatory framework, which has been interpreted by the Federal Circuit and this Court into a three-step process. See Mer idian Prod., LLC v. United States, 851 F.3d 1375, 1381 (Fed. Cir. 2017) (citing Shenyang Yuanda Aluminum Indus. Eng'g Co. v. United States, 776 F.3d 1351, 1354 (Fed. Cir. 2015)); 19 C.F.R. § 351.225. The plain language of the antidumping duty or der is “paramount” in determining whether particular products are included within its scope. Fedmet Res. Corp. v. United States, 755 F.3d 912, 918 (Fed. Cir. 2014) (citing King Supply Co. LLC v. United States, 674 F.3d 1343, 1345 (Fed. Cir. 2012)). Thus “Commerce's inquiry must begin with the order' s scope to determine whether it contains an ambiguity and, thus, is susceptible to interpre tation.” Meridian Prod., 851 F.3d at 1381; see Fedmet, 755 F.3d at 923–24 (“[T]he firs t step of a scope ruling proceeding is to determine whether the governing language is in fact ambiguous.” (citing ArcelorMittal Stainless Belg. N.V. v. United States, 694 F.3d 82, 87 (Fed. Cir. 2012))). “[B]ecause the meaning and scope of . . . orders are issues particularly within [Commerce's] expertise and special competence,” Commerce is entitled to “substantial deference” with regard to interpretation of its ownCourt No. 13-00062 Page 6
antidumping duty orders. Meridian Prod., 851 F. 3d at 1381–82 (citing King Supply, 674 F.3d at 1348). If the language of the order is unambiguous, its plain meaning governs, and the analysis ends. ArcelorMittal, 694 F.3d at 87. If the language is ambiguous, Commerce must revi ew it in light of “[t]he descriptions of the merchandise contained in the petition, the ini tial investigation, and th e determinations of [Commerce] (including prior scope determinations ) and the [ITC].” 19 C.F.R. § 351.225(k)(1) (“(k)(1) evidence” or “(k)(1) factors”); Fedm et, 755 F.3d at 918. These descriptions however “‘cannot substitute for language in the order itself’ because ‘[i]t is the responsibility of [Commerce], not those who [participated in] the pr oceedings, to determine the scope of the final orders.’” Meridian Prod., 851 F.3d at 1382 (quoting Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002)). If these factors are dis positive, the analysis ends. To be dispositive, the (k)(1) factors must be controlling of the scope i nquiry in the sense that they definitively answer the scope question. Id. at 1382 n.8 (citing Sango Int'l, L.P. v. United States, 484 F.3d 1371, 1379 (Fed. Cir. 2007)). Only if Commerce’s analysis under the (k)(1) factors is not dispositive may the agency consider those factors set forth in 19 C.F.R. § 351.225(k)(2): (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 advertised and displayed. See Meridian Prod., 851 F.3d at 1382; see generally Diversified Prod. Corp. v. United States, 6 CIT 155, 162, 572 F. Supp. 883, 889 (1983) (enunciating the (k)(2) factors prior to their codification).Court No. 13-00062 Page 7
II. The Antidumping Duty Order and Terphane’s Scope Ruling Request On September 28, 2007, Mitsubishi, along withDupont Teijin Films and Toray Plastics (America), Inc., filed an antidumping dumping duty petition covering “all PET film imported into the United States from Brazil, China, Thailand and the UAE.” 4 Polyethylene Terephthalate Film. Sheet, and Strip From Brazil, People's Republic of China, Thailand and the United Arab Emirates, Antidumping Duty Petition at 9 (Sept. 28, 2007) (“Pe tition”), in Terphane’s Scope Ruling Request Letter at Ex. 23, PD 1–3, CD 1–4 (“Scope Ruling Request”); Polyethylene T erephthalate Film, Sheet, and Strip (PET Film) from Brazil, the Peopl e 's Republic of China, Thailand, and the United Arab Emirates: Initiation of Antidumping Duty Investigations, 72 Fed. Reg. 60,801 (Dep't Commerce Oct. 26, 2007) (initiation of investiga tion). In proposing the domestic like product to be investigated, petitioners suggested the definition used by the ITC in its investigations into PET products from India and Taiwan: [A]ll gauges of raw, pretreated, or primed PET film, whether extruded or coextruded. Excluded are metallized films and other finished films that have had at least one of their surfaces modified by the application of a performanc e-enhancing resinous or inorganic layer more than 0.00001 inches thick. Petition at 9; Polyethylene Terephthalate Film, Sheet and Strip From India and Taiwan, USITC Publication No. 3518, Inv. Nos. 701-TA-415 an d 731-TA-933-934 (June 2002) (Final), at 4 in Scope Ruling Request at Ex. 27.

4 The court in this opinion refers occasionally to “petitioners” to describe the parties who filed the antidumping duty petition with Commerce. Mitsubishi, whose constituents, Mitsubishi Polyester Film, Inc. and SKC, Inc., were among the petitioners, is now plaintiff in the instant litigation.Court No. 13-00062 Page 8
The Period of Investigation was July 1, 2006 through June 30, 2007. 72 Fed. Reg. at 60,803. Petitioners identified one respondent, Terphane Ltda., 5 a Brazilian producer of PET film. Id. Commerce issued its preliminar y determination of sa les at less than fair value on May 5, 2008, and its final determination on September 24, 2008, in each maki ng an affirmative determination of dumping of PET film from Brazil. Notice of Preliminary Determination of Sales at Less Than Fair Value: Polyethylene Te rephthalate Film, Sheet, and St rip from Brazil, 73 Fed. Reg. 24,560 (Dep’t Commerce) (preliminary determination); Notice of Final Determination of Sales at Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip from Brazil, 73 Fed. Reg. 55,035 (Dep’t Commerce) (final determination). Commerce assigned Terphane a weightedaverage dumping margin of 44.36%. 73 Fed. Re g. at 55,036. Commerce issued the antidumping duty order on PET Film from Brazil on November 10 of that year. 6 Polyethylene Terephthalate Film, Sheet, and Strip from Brazil, the People’s Republic of China and the United Arab Emirates: Antidumping Duty Orders and Amended Final Deter mination of Sales at Less than Fair Value for the United Arab Emirates, 73 Fed. Reg. 66,595 (Dep’t Commerce Nov. 10, 2008) (“Order”). The scope of the Order was identical to the scope of the investigation, both cont aining substantially the

5 Terphane, Inc., also defendant-intervenor, is a U.S. domestic producer of PET Film that imports merchandise from Terphane Ltda. Def.-Inter.’s Mot. to Interv., Feb. 12, 2013, ECF No. 6, at 2; Def.-Inter.’s Opp’n at 1.

6 The ITC made a preliminary determination “that th ere is a reasonable indi cation that an industry in the United States is materially injured by reason of imports” of PET film from Brazil, China, and the United Arab Emirates. Polyethylene Terephthalate Film, Sheet, & Strip from Brazil, China, Thailand, & the United Arab Emir ates, USITC Pub. 3962, Inv. No. 731-TA-1131–1134 (Nov. 2007) (Preliminary); see 19 U.S.C. § 1673b(a). The ITC made a fina l determination “that an industry in the United States is threatened w ith material injury by reason of” such imports. Polyethylene Terephthalate Film, Sheet, & Strip from Brazil, China, Thailand, & the United Arab Emirates, USITC Pub. No. 4040, Inv. No. 731-TA-1131–1134 (Oct. 2008) (Final); see 19 U.S.C. § 1673d(b).Court No. 13-00062 Page 9
language proposed by petitioners. Id. at 66,595–96; se e 19 U.S.C. § 1673e(a)(2) (directing that an antidumping duty order “includes a description of the subject merchandise, in such detail as the administering authority deems necessary”). Specifically: The products covered by each of these orders are all gauges of raw, pre-treated, or primed PET film, whether extruded or co-extruded. Excluded are metallized films and other finished films that have had at least one of their surfaces m odified by the application of a performance-enhancing resinous or inorganic layer more than 0.00001 inches thick. Also excluded is roller transport cleaning film which has at least one of its surfaces modified by application of 0.5 micrometers of SBR latex. Tracing and drafting film is also excluded. PET film is classifiable under subheading 3920.62.00.90 of the Harmonized Tariff Schedule of the United States (HTSUS). While HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of these orders is dispositive. Order at 66,595–96. In February 2012, Terphane requested a scope ru ling to determine whether four of the PET film products it produces in and im ports from Brazil, and sells in the United States (collectively "Copolymer Surface Films”), are subject to the Order. 7 Scope Ruling Request at 1–2. Terphane asserted that its Copolymer Surface films are not covered by the scope of the Order because they all “have a performance-enhancing resinous layer th at exceeds the thickness requirement listed in the scope exclusion.” Id. at 3. This layer is a co polymer resin which Terphane refers to publicly as COEX. Id. at 5. COEX possesses chemical pr operties different from the core PET layer or layers to which it is conjoined through co-e xtrusion. Id. at 9–14. Terphane submitted evidence supporting its assertion that the COEX layer’ s physical-chemical makeup provides it with

7 These film products are: (1) 10.21132, 10.21140, 10.21148, and 10.21192 (collectively "10.21 products"); (2) 10.81148 ("10.81 product"); (3) 10.91148 ("10.91 product"); and (4) 10.96/48 ("10.96 product"). Scope Ruling Re quest at 2; Scope Ruling at 1.Court No. 13-00062 Page 10
performance-enhancing properties, and, despite variations in thickness across products, is invariably of thickness greater than 0.00001 inch es. Id. at 11–12, Ex. 10. Terphane identified its relevant products as “Equivalent PET film,” char acterizing equivalent PET film as differing from PET film by the presence of a coating of sufficient thickness on the former, regardless of whether applied in-line or otherwise. Id. at 18 (“Equivalent PET Films, like Terphane's Copolymer Surface Films, are outside of the scope of the antidumping duty order on PET film from Brazil.”), 20–23. Terphane mentioned the ITC’s 1991 investigation on PET film from Japan and Korea, wherein the Commission noted that "U.S. producers view all PET film (excluding equivalent PET film) as a continuum of PET film products . . . .” Id. at 20; Polyethylene Terephthalate Film, Sheet, and Strip from Japan and the Republic of Korea , USITC Pub. 2383, Inv. Nos. 731-TA-458 and 459 (May 1991) (Final) at 12 (“ITC Japan and Korea PET Investigation”), in Scope Ruling Request at Ex. 25. Terphane noted also the ITC’s analysis of e quivalent PET film and its discussion of two equivalent PET film produc ts, Cronar and Estar, and reiterate d the similarities between them and its own Copolymer Surface films. 8 Scope Ruling Request at 20; ITC Japan and Korea PET Investigation at 15–16. Petitioners commented on Ter phane’s request on March 23, 2012. Petitioner’s Comments on Terphane’s Scope Rulin g Request, PD 9, CD 5 (“ Pets’ Mar. 23 Comments”). 9 Terphane replied

8 For example, Terphane stated that “[l]ike the film discussed by the Commission, Terphane's Copolymer Surface Films have a performance-en hancing resinous surface layer with adhesive characteristics that generally are favored for the ease with which graphics can be printed on the films.” Scope Ruling Request at 20.

9 Petitioners therein contended inter alia that Terphane’s films fall within the order’s scope, that “equivalent PET films” only encompass films with highly specialized down-stream end uses and coatings applied through off-line or dedicatedproduction equipment, and that primed PET coextrusions are not “finished” such that they would be excluded from the order. Pets’ Mar. 23 Comments at 20–29.Court No. 13-00062 Page 11
on May 7. Terphane’s Reply to Petitioners’ Comments on Terphane’s Scope Ruling Request, PD 17, CD 9 (“Terphane’s May 7 Comments”). In April, Commerce issued questionnaires to Terphane and petitioners, the responses to which came in May. Terphane’s Questionnaire Response, PD 18, CD 10 (May 7, 2012) (“Terphane ’s QR”); Petitioners’ Questionnaire Response, PD 21–22, CD 12–14 (May 7, 2012) (“Pets’ QR”). Te rphane and petitioners commented on each other’s questionnaire responses the same m onth. Terphane’s Comments on Petitioners’ Questionnaire Responses, PD 23, CD 15 (May 1 7, 2012); Petitioners’ Response to Terphane’s Questionnaire Response, PD 24, CD 16 (May 17, 2012). On June 7, Terphane responded to petitioners’ May 17 comments, and on June 18, petitioners submitted re buttal comments to Terphane’s June 7 comments. Terphane’s June 7 Response to Petitioners’ May 17 Comments, PD 29, CD 17 (“Terphane’s June 7 Re sponse”); Petitioners’ June 18 Re buttal to Terphane’s June 7 Response, PD 30, CD 18. Commerce issued the Terphane Scope Rulin g on January 7, 2013. Scope Ruling at 1. The agency did not issue its ruling within forty-five days of Terphane’s request in accordance with 19 C.F.R. § 351.225(c)(2), 10 but instead took 320 days from the submission of the application. Relying on the 19 C.F.R. § 351.225(k)(1) cr iteria, Commerce found that “Terphane’s products are outside the scope of the order, provided that the added performance-enhancing resinous layer is greater than 0.00001 inches thick, as determined by U.S. Customs and Border Protection (CBP).” Scope Ruling at 1. Of the sc ope language, Commerce reasoned that “even though a particular product may meet the requireme nts of the first sentence . . . it may also fall

10 “Deadline for action on application. Within 45 days of the date of receipt of an application for a scope ruling, the Secretary will issue a final ruli ng under paragraph (d) of this section or will initiate a scope inquiry under paragraph (e) of this secti on.” 19 C.F.R. § 351.225(c)(2).Court No. 13-00062 Page 12
under one of the subsequent exclusions and be ex cluded from the scope of the order,” which “is consistent [sic] Department’s prior determinations.” Scope Ruling at 11. Commerce also determined that “[t]he exclusio n described in sentence two of the scope . . . refers to a specific category of products which the ITC identified as ‘equivalent PET film.’” Scope Ruling at 4. Commerce focused on the ITC’s 1991 definition, as part of the antidumping duty investigations of PET film from Japan and Korea, of DuPont Cronar and Kodak Estar films, along with “those products equivalent to Cronar and Es tar,” as “equivalent PET film.” Scope Ruling at 4; ITC Japan and Korea PET Investigation at 15. Commerce reasoned that “the scope language should not be interpreted as to render as subjectfilms identical to DuPont’s Cronar and Estar, which . . . are the paradigmatic examples of films covered by th e so-called ‘0.00001-inch exclusion.’” 11 Scope Ruling at 12. Commerce further r easoned, because Cronar and Estar are designed for further manufacturing, per evidence provided by Terphane, the first sentence of the scope parameters “should not be interpreted so broadly as to encompass all films which are designed for further manufacturing, to be more receptive to further coating, and/or to be more adhesive, which both parties agree are characteristic of primed and certain pre-treated films.” Id. In addition, Commerce concluded that while the COEX layer may provide characteristics of a primer or a pre-treatment, it also provides “additional performance-enhancing capabilities similar to those of Cronar and Estar.” Id. Commerce determined that the phrase “extruded or co-extruded” encompasses PET products regardless of which extr usion method is used, and “does not indicate that all extruded

11 As noted below, see infra p. 26, Commerce now acknowledges that it erred in stating that “Terphane has provided evidence that indicates that Cronar and Estar are co-extruded.” Terphane Scope Ruling at 12; Def.’s Opp’n at 7.Court No. 13-00062 Page 13
and/or co-extruded films are covered, regardless of the subsequent exclusions.” Scope Ruling at
12. Commerce determined Terphane’s films to be “finished films,” reasoning that the phrase “other finished films” must include some films that are also “raw, pre-treated, or primed PET films,” as reading it otherwise would obviate the word “finished.” Id. Thus, “the term ‘finished films’ should not be interpreted so narrowly as to exclude all films covered by the first sentence of the scope or so broadly that it includes all such films.” Id. Commerce considered two of its own prior scope rulings: Garware and Avery Dennison. 12 Id. In Garware, Commerce found that Garware’s tr acing and drafting film had a performanceenhancing layer more than 0.00001 inches thick, thus excluding it from the underlying antidumping and countervailing duty orders on PET from India. Garware at 1; see 67 Fed. Reg. 44,175 (Dep’t Commerce July 1, 2002) (amended antidumping duty order); 67 Fed. Reg. 44,179 (Dep’t Commerce July 1, 2002) (countervailing duty order). 13 Commerce found that Garware,

12 Antidumping and Countervailing Duty Orders on Polyethylene Terephthalate Film, Sheet, and Strip from India, Final Scope Ruling--Requested by International Packaging Films, Inc. Regarding Tracing and Drafting Film (Aug. 25, 2013) (“Ga rware”) at Scope Ruling Request at Ex. 31; Memorandum from Michael J. Heaney to Stephen J. Claeys, Antidumping Duty Investigations on Polyethylene Terephthalate Film, Sheet, and Strip (PET film) from Brazil, the People's Republic of China, Thailand, and the Un ited Arab Emirates, A-351-841, A-570-924, A-549-825, A-520-803 (investigations), Apr. 25, 2008 (“Avery Dennison”) at Pets’ Mar. 23 Comments at Ex. 9; see Polyethylene Terephthalate Film, Sheet and Strip (PET Film) from Brazil, the People's Republic of China, Thailand, and the United Ar ab Emirates, Avery Dennison's Comments on the Proposed Scope of the Investigations (N ov. 15, 2007) at Scope Ruling Request at Ex. 30.

13 The operative language in the first two sentences of the scope in these orders is identical to that of the instant case. In full, the scope reads: For purposes of this order, the products covered are all gauges of raw, pretreated, or primed PET film, whether extruded or coextruded. Excluded are metallized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layerCourt No. 13-00062 Page 14
despite involving a matte lacquer layer much diff erent than the COEX layer in Terphane’s case, was relevant insofar as both re views involved performance-enhancing resinous or inorganic layers. Scope Ruling at 13; Garware at 3–4. In regards to Avery Dennison, which arose from Commerce’s investigation on dumping of PET from Brazil, the United Arab Emirates, and the People’s Republic of China, Commerce reaffirmed its finding therein “that the scope of the order is not limited to base PET films, or PET film prior to the application of any in-line coatings.” Scope Ruling at 13; Avery Dennison at 5–6. The products at issue in that review, however, were definitely shown not to have a layer which was over 0.00001 inches. Commerce thus disagreedwith petitioners’ argument that the Department based its decision in that ruling on the in-line coextrusion production method used to create the produc ts at issue, and emphasi zed that the chemical composition of the silicon layer in that ruling is not relevant vis-à-vis the chemical composition of the co-extruded COEX layer at issue inTerphane’s ruling. Scope Ruling at 13. 14
Commerce concluded that Terphane’s copolymer surface film products, as described by Terphane, are finished films wh ich have a performance-enhancing resinous layer, and are therefore outside of the antidumping duty
of more than 0.00001 inches thick. Imports of PET film are classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item number 3920.62.00. HTSUS subheadings are provided for convenience and Customs purposes. The written description of the scope of this order is dispositive. 67 Fed. Reg. at 44,176, 44,179.

14 Commerce found the copolymer COEX layer applied to each of the Copolymer Surface films to be “‘performance-enhancing,’ ‘resinous,’ and a bona fide ‘layer,’” possessing of characteristics and capabilities similar to Cronar and Estar. Scope Ruling at 12–13. The finding that the COEX layer itself is “performance-enhancing” for the purposes of the second sentence exclusion is not challenged in the instant litigation. Terphane ma intains COEX’s physioch emical properties allow customers to print, laminate, coat, or metalize the film withoutapplying a primer or surface treatment, and allow the film to be heat sealed. Id. at 4, 12–13.Court No. 13-00062 Page 15
order on PET film, sheet, and strip from Brazil, provided Terphanecan establish, to the satisfaction of CBP, that the performanceenhancing layer is greater than 0.00001 inches thick. Id. at 14. Commerce found its consideration of the 19 C.F.R. § 351.225(k)(1) criteria to be dispositive with respect to Terphane’s Copolym er Surface films, and so did not progress to consideration of the criteria under 19 C.F.R. § 351.225(k)(2). Id. at 2–3, 14. III. The Instant Litigation Mitsubishi timely filed suit in this c ourt on February 6, 2013. ECF No. 1. The court granted Terphane status as defendant-interv enor on February 13, 2013. ECF No. 11. Mitsubishi in its complaint alleges four counts: that the Terp hane Scope Ruling contradicts the plain language of the Order, and is therefore contrary to law; that Commerce’s determination that Terphane’s films are not dispositively in-scope under 19 C. F.R. § 351.225(k)(1) is unsupported by substantial evidence; that Commerce’s determination that Terphane’s films are dispositively out-of-scope under 19 C.F.R. § 351.225(k)(1) is unsupported by substantial evidence; and that Commerce’s 273-day delay in issuing the Terphane Scope Ruling invalidates it and renders it contrary to law. Pl.’s Compl. ¶¶ 11–27; Pl.’s Br. at 3–4. Mitsubishi filed its Rule 56.2 motion for judgment on the agency record and accompanying memorandum in support on August 2, 2013. Pl.’s Br. The United States and Terphane filed their responses on December 4, 2013. Def.’s Opp’n; Def.-I nter.’s Opp’n. Mitsubish i filed its reply on February 3, 2014. Pl.’s Reply. Oral argument was held before the court on June 26, 2014. ECF No. 56. The court issued a letter requesting supplemental br iefing on a discrete issue highlighted by Mitsubishi toward the end of argument, specifically, how to correctly read from the scope language the phrase “have had” in conjunction with the word “modified.” Letter to Parties, Aug. 25, 2014, ECF No. 60. All parties filed their supplementa l briefs on November 5, 2014. Def. ’s Suppl. Br., ECF No. 66; Def.-Court No. 13-00062 Page 16
Inter.’s Suppl. Br., ECF No. 68; Pl.’s Suppl. Br., ECF No. 69. The United States filed its response to Mitsubishi’s supplemental brief on Dece mber 11, 2014. Def.’s Suppl. Opp’n, ECF No. 77. Terphane filed its response to the same on December 12, 2014. Def.-Inter.’s Suppl. Opp’n, ECF No. 78. Mitsubishi also filed its response to Th e United States’ and Te rphane’s Supplemental Briefs on December 12, 2014. Pl.’s Suppl. Reply, ECF No. 79. On March 20, 2017, the case was reassigned. Order of Reassignment, ECF No. 89. Oral argument was held before the new judge on May 9, 2017. ECF No. 99.
DISCUSSION
JURISDICTION AND STANDARD OF REVIEW The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) (2012), and 19 U.S.C. § 1516a(a)(2)(A)(ii). The Court will uphold Commerce’s determination unless the Terphane Scope Ruling is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i); Fedmet, 755 F.3d at 918. On legal issues, the Court affords significant deference to Commerce’s interpretation of its own orders, mindful that scope determinations are “highly fact-intensive and case-specific.” Fedmet, 755 F.3d at 918 (quoting King Supply, 674 F.3d at 1345). Indeed, Commerce “enjoys substantial freedom to interpret and clarify its antidumping duty orders. But while it may interpret those orders, it may not change them.” Mid Continent Nail Corp. v. United States, 725 F.3d 1295, 1300 (Fed. Cir. 2013) (quoting Ericsson GE Mobile Commc'ns, Inc. v. United States, 60 F.3d 778, 782 (Fed. Cir. 1995), as corrected on reh'g (Sept. 1, 1995)). Put another way, “orders may be interpreted as including subject merchandise only if they contain language that specifically includes the subject merchandise or may be r easonably interpreted to include it.” Id. (quotingCourt No. 13-00062 Page 17
Duferco Steel, 296 F.3d at 1089). Thus, despite this Court’s deference to Commerce’s interpretation of its orders, “the question of whether the unambiguous terms of a scope control the inquiry, or whether some ambiguity exists, is a question of law that we review de novo.” Meridian Prod., 851 F.3d at 1382. On factual issues, “[s]ubstantial evidence is such relevant evidence as a reasonable mind would accept as adequate to support the conc lusion reached.” Sango, 484 F.3d at 1378 (citing Consol. Edison v. Nat'l Labor Relations Bd. , 305 U.S. 197, 229 (1938)). “The specific factual findings on which [Commerce] relies in applying its interpretation are conclusive unless unsupported by substantial evidence.” United States v. Eurodif S.A., 555 U.S. 305, 316 n.6 (2009) (citing 5 U.S.C. § 706(2)(E)). However, that two different conclusions may be drawn from the same evidence does not preclude Commerce’s fa ctual determinations from being supported by substantial evidence. Viet I–Mei Frozen Foods Co. v. United States, 839 F.3d 1099, 1106 (Fed. Cir. 2016) (citing Consolo v. Fed. Mar. Comm' n, 383 U.S. 607, 620 (1966)). At the same time, Commerce’s analysis must reasonably demonstrate a connection between the facts in the record and the conclusions drawn. See M otor Vehicle Mfrs. Ass’n of Un ited States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Bur lington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)); Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 488 (1951). In summary, “the substantial evidence standard requires review of the entire administrative record” and asks, in light of that evidence, whether Commerce's determination was reasonable. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir. 2006). I. The Scope of the Order is Ambiguous In interpreting the scope of an order, the language therein is paramount. Fedmet, 755 F.3d at 918. The court concludes that the Order’s scope language does not on its face demand anCourt No. 13-00062 Page 18
unambiguous reading vis-à-vis the instant matter, but rather is subject to multiple reasonable interpretations. The court thus holds that Commerce has met the requisite low threshold to warrant finding ambiguity and proceeding to an analysis under the 19 C.F.R. § 351.225(k)(1) factors. See Meridian Prod., 851 F.3d at 1381 n.6. A. Parties’ Arguments Mitsubishi argues that the Order’s scope language unambiguously encompasses Terphane’s Copolymer Surface Films, and thus Co mmerce’s subsequent analysis under 19 C.F.R. § 351.225(k)(1) was unlawful. Pl.’s Br. at 22–24. In particular, Mitsubishi emphasizes that the first sentence of the Order covers “all gauges of raw, pre-treated, or primed PET film, whether extruded or co-extruded,” and argues that the fi nal clause––“whether extr uded or co-extruded”–– indicates that co-extrusion cannot produce the necessary performance-enhancing layer necessary to implicate the second sentence’s exclusion. Id . Mitsubishi adds that the subsequent exclusions do not have specific “carve-outs for certain s ubsets of co-extruded films,” and Commerce’s determination thereby impermissibly alters the terms of th e scope language. Id. at 22–23. Further, Mitsubishi argues that the second sentence’s me ntion of “performance-enhancing resinous or inorganic layer” plainly refers to post-extr usion coating, and not to co-extrusion. Id. at 24. The Government counters that the first sentence “defines the universe of products that are subject to the scope,” while the subsequent thr ee sentences “provide explicit exclusions from the universe.” Def.’s Opp’n at 10–11. The Government takes issue with Mitsubishi’s belief that the “performance-enhancing resinous or inorganic layer” of sufficient thickness to qualify for the exclusion must be applied using a process other than co-extrusion because the Order’s plain language specifies no particular process for application of that layer. Def.’s Opp’n at 11–12; Pl.’s Br. at 24. The Government argues that the langua ge is at most ambiguous. Def.’s Opp’n at 12.Court No. 13-00062 Page 19
In reply, Mitsubishi contends that the second sentence does in fact specify a production process: the exclusion covers only “metallized films and other finished films,” which necessarily excludes co-extruded PET film lacking additional processing, because “‘finished’ indicates that films covered by the second sentence have under gone some manufacturing process other than the first stage – i.e. extrusion/coextrusion.” Pl.’s Re ply at 7. Mitsubishi argues that the phrasing must mean “finished” refers to processes, like meta llization, that occur post-extrusion. Id. Mitsubishi also raises for the first time in its reply the argument that the language “finished” and “modified” in the scope’s second sentence introduce a temporal qua lification to the exclusion, to wit, that to come under the exception a PET film must be extr uded before the protective-layer of sufficient thickness is applied, render ing the scope unambiguous. 15 Id. at 5–13.

15 Mitsubishi’s reply focuses on these phrases, yet at oral argument, the court pressed parties on the same point in regards to the phrase “have had. ” As noted supra, following oral argument, the court requested supplementa l briefing on this singular point, re sulting in six supplemental briefs. Assuming arguendo that novel arguments in the suppl emental briefs as to scope language are not barred for lack of administrative exhaustion by virtue of the pure legal argument exception, the court summarizes them. The Government argues that this scope language “describe[s] products at the time of import,” rather than identifies a narrower chronol ogical production requirement. Def.’s Suppl. Br. at 8–9; Def.’s Suppl. Opp’n at 3–6. The Gove rnment supports its reading with a grammatical analysis that, in summary, depicts “have had” and “modified” as implicating only the past tense. Def.’s Suppl. Br. at 9–10; Def.’s Suppl. Op p’n at 4–6. Terphane expands this argument, inviting the court to engage in a lengthy and fairly technical exploration of the present perfect tense. Def.-Inter.’s Suppl. Br. at 5–14; Def-Inter.’s Suppl. Opp’n at 2–4. In addition to its interpretation of the second sentence of the scope as imposing a temporal requirement, Mitsubishi argues that the Govern ment’s and Terphane’s pr oposed interpretation renders much of the phraseology in the second senten ce surplusage: “that ha ve had at least one of their surfaces modified by the app lication of”; “finished” ; and “had.” Pl. Suppl. Br. at 8; see Polites v. United States, 35 CIT ___, ___, 755 F. Supp. 2d 1352, 1357 (2011) (“[Commerce] may not render parts of the Order ‘mere surplusage.’” (c iting Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1073 (Fed. Cir. 2001))). The Government reiterates that the scope language is at most ambiguous, satisfying the threshold requirement for a deeper inquiry under 19 C.F.R. § 351.225(k)(1), and that the tense styling in the second sentence can be plainly read to reference a process occurring at any time prior to import. Def.’s Suppl. Opp’n at 4–5. The potentially superfluous language that Mitsubishi alleges the Government’s reading would create is instea d grammatically and colloquially acceptable,Court No. 13-00062 Page 20
B. Analysis The scope language in the Order is ambiguous such that Commerce’ decision to perform an analysis under 19 C.F.R. § 351.225(k)(1) was warranted. Accepting that a co-extruded layer may implicate the exclusion in the second sent ence does not necessarily render superfluous the phrase “whether extruded or co-extruded” in th e first sentence, as Mitsubishi contends. The second sentence simply does not specify the producti on process that must be used to provide the sort of layer that results in a product’s exclusi on. Indeed, “whether extr uded or co-extruded” may plainly be read to indicate that the mere fact of co-extrusion doe s not save a PET film product from falling under the Order. It is not incumbent upon Commerce or this court to read the phrase as meaning that, absent a carve-out mentioning co -extrusion, a co-extruded PET film cannot possibly also qualify for the exclusion under the second se ntence unless an additional protective resinous or inorganic coating or layer of sufficient thickne ss were applied to the extruded PET film through a manner other than co-extrusion. Nothing in the scope demands that reading. Mitsubishi also cannot identify language that would command an unambiguous reading of the scope with the temporal restraints they identify, such that the second sentence exclusion covers only “films with post-extrusion coatings.” Pl.’s Suppl. Br. at 7. In regard to Mitsubishi’s argument that Commerce’s reading of the second sentence cr eates surplusage, the court is satisfied that Commerce and the defendant articul ate plausible readings of the allegedly superfluous language

maintains defendant, and was reas onably interpreted by Commerce below. Def.’s Suppl. Opp’n at 5–8. Terphane argues that the scope language does not beckon for an exclusion based on a particular manufacturing process, and thatMitsubishi’s constructi on relies on arbitrary perspectives not compelled by a plain reading. Def.-Inter.’s Suppl. Opp’n at 2–4. Terphane then argues that Mitsubishi’s reading is not mandated by any of the scope lan guage, which is instead ambiguous. Def.-Inter.’s Suppl. Opp’n at 5–11. M itsubishi reiterates much of its plain reading and surplusage arguments in its own supplemen tal reply brief. Pl.’s Suppl. Reply at 1–12.Court No. 13-00062 Page 21
such that they are useful descriptors. Se e Scope Ruling at 12; Def.’s Suppl. Opp’n at 5–8. To read the second sentence as Mitsubishi would like the court to would instill overly narrow meaning to otherwise broad language. See 19 C.F.R. § 351.225( a) (stating that descriptions of subject merchandise “must be wr itten in general terms”); see also Mid Continent Nail, 725 F.3d at 1305 (“Commerce enjoys considerable discretion in interpreting its own orders.”). No language in the scope commands that a “finished film” must “have had” one of its “surfaces” “modified by the application of” a protective resinous or inorganic layer of sufficient th ickness in a specific chronology, other than, necessarily, prior to import. 16 17

16 Mitsubishi’s reading of “finished films” may be plausible, but it is not unambiguous. As evidenced by the parties’ conflicting interpretations of the word in context, “finished” is ambiguous. Even if it were unambiguous, it would remain plausible to read the second sentence as meaning that films can become “metallized [or] . . . finished” after they have had one of their surfaces modified by the application of a perform ance-enhancing resinous or inorganic layer of sufficient thickness. See Pl.’s Suppl. Br. at 6. Further one could read “surfaces” as being “modified” at the time of co-extrusion, since there is no unambiguous language providing that a “surface” necessarily does not exist at the mo ment of extrusion or co-extrusion. See id.

17 In its supplemental brief, the Government ar gues that Mitsubishi failed to exhaust its administrative remedies before Commerce with respect to the argument that the words “have had” in the scope language indicate that the exclusionary language does not apply to co-extruded films. Def.’s Suppl. Br. at 5–7. The Government’s argument is unpersuasive in several respects. Although “[t]he exhaustion doctrine requires a party to present its claims to the relevant administrative agency for the agency's considerati on before raising these claims to the Court[,]” Shandong Huarong Mach. Co., Ltd. v. United States, 30 CIT 1269, 1305, 435 F. Supp. 2d 1261, 1292 (2006) (internal citations omitted), and “the cour t tends to take a strict stance on exhaustion, the requirement that a party exhaust its administrative remedies has been excused in trade cases ‘where . . . the issue involves a pure question of la w not requiring further f actual development.’” Meridian Prod., LLC v. United States, 39 CIT ___, ___, 77 F. Supp. 3d 1307, 1312 (2015) (quoting SeAH Steel Corp. v. United States, 35 CIT ___, ___, 764 F. Supp. 2d 1322, 1325–26 (2011)). To establish the pure question of law exception the following requirements must be met: (a) . . . plaintiff shall raise a new argument; (b) this argument shall be of purely legal nature; (c) the i nquiry shall require neither further agency involvement nor additional fact finding or opening up the record; and (d) the inquiry shall neither create undue delay nor cause expenditure of scarce party time and resources.Court No. 13-00062 Page 22
Though Mitsubishi’s construction of the plain scope language is not unreasonable, it is also not unambiguous. While “Commerce need only meet a low threshold to show that it justifiably found an ambiguity in scope language,” Alleghen y Bradford Corp. v. United States, 28 CIT 830, 843, 342 F. Supp. 2d 1172, 1184 (2004) (citing Novosteel SA v. U.S., Bethlehem Steel Corp., 284 F.3d 1261, 1272 (Fed. Cir. 2002)), Mitsubishi points out that “it is not justifiable to identify an ambiguity where none exists,” as doing so would result in an interpretation that impermissibly conflicts with an order’s terms and alters its scope. Pl.’s Br. at 24 (citing Laminated Woven Sacks Comm. v. United States, 34 CIT 906, 914, 716 F. Supp. 2d 1316, 1325 (2010)). Here, the parties’ conflicting readings of the scope language, permeating the four initial briefs and all six supplemental briefs, indicate thatthe scope language is subjec t to reasonable interpretation. 18 See Shenyang Yuanda Aluminum Indus. Eng'g Co. v. United States, 40 CIT ___, ___, 146 F. Supp. 3d

Consolidated Bearings Co. v. United States, 25 CIT 546, 553–54, 166 F. Supp. 2d 580, 587 (2001), rev’d on other grounds, 348 F.3d 997 (Fed. Cir. 2003) . Here, Mitsubishi’s argument regarding the “have had” language fits into its prior argument s regarding processes and how the scope language should be read. See supra Section I. Howeve r, even assuming arguendo that Mitsubishi’s argument did not fit within its prior arguments and that Mitsubishi had failed to exhaust its administrative remedies, the pure question of law exception applies. See Consolidated Bearings Co., 25 CIT at 553–54. In the instant case, Mitsubis hi raises a new argument of purely legal nature (the proper reading and interpretation of sc ope language); no further agency involvement, additional fact finding, or opening up the record are necessary; and the inquiry will not create undue delay nor cause expenditure of scarce party time and resources. See id.; see also Meridian Prod., 77 F. Supp. 3d at 1313 (finding that the language of the scope itself can present a pure question of law). Thus, the pure question of law exception to exhaustion is applicable.

18 The court recognizes that the Government might have made an argument that the scope language is unambiguous in the manner they might read it: that the language plainly means that co-extrusion can provide the “performance-enhancing resinous or inorganic layer more than 0.00001 inches thick” of the second sentence exclusion because noth ing in the language explicitly decrees that coextrusion may not provide that layer. Howeve r, the defendant did not make that argument. Compare SEC v. Chenery Corp., 318 U.S. 80, 95 (1943) (“[A]n administrative order cannot be upheld unless the grounds upon which the agency act ed in exercising its powers were those upon which its action can be sustained.”). In any even t, this plausible interpretation, juxtaposed with Mitsubishi’s, supports Commer ce’s determination that the language is ambiguous.Court No. 13-00062 Page 23
1331, 1336 n.27 (2016) (citing Tak Fat Trading Co. v. United States, 396 F.3d 1378, 1383 (Fed. Cir. 2005) (“[A] predicate for the interpretive process is language in the order that is subject to interpretation.”)); Laminated Woven Sacks, 716 F. Supp. 2d at 1326 (“All that is necessary before Commerce may consider secondary documents from th e original investigation is ‘language in the order that is subject to interpretation.’” (quo ting Duferco Steel, 296 F.3d at 1097)). The ambiguity does not plainly conflict with the Order’s terms. In short, Commerce therefore acted in accordance with law when it proceeded to analyze the sc ope under the factors provided by 19 C.F.R. § 351.225(k)(1). II. Commerce’s Analysis Under 19 C.F. R. § 351.225(k)(1) was Unsupported by Substantial Evidence Having affirmed Commerce’s determination regarding ambiguity, the court must now consider Commerce’s finding that the factors in 19 C.F.R. § 351.225(k)(1) dispositively place Terphane’s Copolymer Surface Pr oducts outside of the scope of the Order. Ultimately the court concludes that it cannot be said with reasona ble confidence that Commerce’s analysis and determination under (k)(1) was supported by substantial evidence. As mentioned supra an analysis under 19 C.F.R. § 351.225(k)(1) involves “the descrip tions of the merchandise contained in the petition, the initial investigation, and the determinations of the Se cretary (including prior scope determinations) and the Commission.” “Commerce's an alysis of these sources against the product in question produces factual findings reviewed for substantial evidence.” Meridian Prod., 851 F.3d at 1382. Here, the agency did not come to a reasonable conclusion in consideration of the entire administrative record, specifically in regards to relevant “descriptions of the merchandise contained in the petition [and] the initial investigat ion” such that its findings under the other (k)(1) factors “definitively answer the scope question.” Id. at 1382 n.8; see Nippon Steel, 458 F.3d atCourt No. 13-00062 Page 24
1351; Universal Camera, 340 U.S. at 488 (“The subs tantiality of the evidence must take into account whatever in the record fa irly detracts from its weight.”). A. Parties’ Arguments Mitsubishi asserts that (k)(1) evidence could reasonably indicate only that Terphane’s films are dispositively in-scope, and thus the agency’s determination that the (k)(1) criteria do not indicate dispositively that Terphane’s films are in-scope is unsupported by substantial evidence. 19 Pl.’s Br. at 24–30. Mitsubishi argues Commerce ignored that throughout the history of the Order and previous antidumping duty orders on PET film, petitioners, Commerce, the ITC, and respondents “have always regarded coextruded films . . . as being in-scope,” while “[n]o interested party or government agency” has indicated thatthey might be out-of-scope “depending on the thickness of the coextruded layer.” Id. at 26. Further, Mitsubishi argues that analyses within elements of (k)(1) evidence demonstrate a pattern of association between equivalent PET films and their possible exclusion under the second sentence, but nowhere display the same in regards to co-extruded films, or suggest that co-extruded films might qualify as equivalent PET films depending on the thickness of a co-extruded layer. Id. at 27. Mitsubishi also takes issue with Commerce’s failure to mention, addr ess, or engage with Terphane ’s questionnaire responses from the original investigation, in which Terphane st ated its belief that its co-extruded products were in-scope, and the original Petition, in which plainti ffs (as petitioners) “compla ined about lost sales due to a Terphane film that was functionally similar” to the films at issue in this case. Id. at 26–

19 In the alternative, Mitsubishi presents its argument in the negative: Commerce’s “further finding”—that the (k)(1) evidence indicates dispositively that Terphane’s films are out-of-scope, provided that the layer in question is sufficien tly thick—is unsupported by substantial evidence, because it “has no support in the history of antidumping duty orders on PET film.” Pl.’s Br. at 30.Court No. 13-00062 Page 25
28. Altogether, these analytical choices strike Mitsubishi as a failure to explain how (k)(1) evidence does not show dispositively that Terphane’s films are in-scope. Mitsubishi also characterizes Commerce’s determination as relying on the mistaken determination that Cronar and Estar, which are equivalent PET films, are in fact co-extruded. Pl.’s Br. at 28–29. Mitsubishi adds that besides this mis classified evidence, Commerce neither cited any potentially dispositive evidence related to the (k)(1) factors nor indicated that either Avery Dennison or Garware scope determinations are cont rolling in this case, as neither involved a coextruded film. Id. at 29. The Government and Terphane respond first that Mitsubishi––by identifying pieces of the record where equivalent PET is spoken of as ex cluded from the scope while co-extrusion is not–– misunderstands the regulatory requirement, wh ich is that Commerce under 19 C.F.R. § 351.225(k)(1) assesses “descriptions of the merchandi se” contained in the enumerated sources. Def.’s Opp’n at 6, 13. Rather, the scope defined in the Petition, identical to the scope in the Order, was silent on the question of whether the “perfo rmance-enhancing resinous or inorganic layer” must be applied through any particular process. Def.’s Opp’n at 13. Second, the Government and Terphane argue Mitsubishi misinterprets the relevance of the original investigation and two prior scope rulings in the same manner. Def.’s Opp’n at 14. They point out that the two prior scope determinations—Garware and Avery Dennison—likewise implicate the description of the merchandise, as the analyses therein considered the two critical factors identified above: the presence of a performance-enhancing layer, and the thickness of that layer. 20 Def.’s Opp’n at 14.

20 The Government and Terphane contend thatGarware spoke to the performance-enhancing quality of the layer in question, while Avery Dennis on spoke to thickness of the layer in question; in their view, contrary to Mitsubishi’s arguments, neither the chemical composition of the layer, nor the production method used to apply it, had any bearing upon Commerce’s determinations in both instances. Def.’s Opp’n at 14; Def-I nter.’s Opp’n at 24–27; Scope Ruling at 13.Court No. 13-00062 Page 26
As to Mitsubishi’s argument that Commerce fa iled to address questionnaire responses, the Government reiterates that 19 C.F. R. § 351.225(k)(1) directs the agency to analyze “descriptions of the merchandise” in the original investig ation. Finally, in response to Mitsubishi’s characterization of Commerce’s analysis as hinging on a mistaken determination that Cronar and Estar are co-extruded––a factual error now acknow ledged by Commerce in its briefing to the court––the Government and Ter phane emphasize once more thatthe relevance of those ITC determinations is in the physical de scription of Cronar and Estar therein. 21 Def.’s Opp’n at 7, 17– 18; Def.-Inter.’s Opp’n at 21–24. Mitsubishi replies that Avery Dennison and Garw are are merely “consistent,” rather than “controlling” or “dispositive,” and asserts that “[m]uch of Defendant and Defendant-Intervenor’s arguments” are post-hoc rationalizations. Pl.’ s Reply at 14–15; see Burlington Truck Lines, 371 U.S. at 168–69; see also Nan Ya Plastics Corp., Ltd. v. United States, 37 CIT ___, ___, 906 F. Supp. 2d 1348, 1354 (2013). Mitsubishi adds that the Government fails to identify any relevant discussion of “descriptions of the merchandise” in the “Analysis” section of Commerce’s determination; that defendant makes a logical error by relying on consistency of the scope language to come to a dispositive (k)(1) conclusion, yet finding that same language ambiguous at the preliminary stage of analysis; and that defendant is wrong to defend Commerce’s failure to address the aforementioned questionnaire responses, because they constitute part of the relevant (k)(1)

21 That these products are equivalent PET, which indisputably comes under the second sentence exception, does not detract from their relevance to Terphane’s case, the Government argues, because Terphane’s products share several physical characteristics with Cronar and Estar such that they all seem to fulfil the exclusion for the same reasons. Namely, all are designed for furthermanufacturing, are adhesive and receptive to further coating, and all possess performanceenhancing layers that provide them with additi onal capabilities not found in raw PET film or mere primed or pretreated PET film. Def.’s Opp’n at 17–18; Def.-Inter.’s Opp’n at 21–24.Court No. 13-00062 Page 27
evidence insofar as they are “descriptions of the merchandise contained in . . . the initial investigation[ ].” Pl.’s Reply at 16–17. As to Terphane’s points, Mitsubishi responds that it failed to identify how exactly the performance-enhancing characteristics of Cronar and Estar are sufficiently similar to Terphane’s Copolymer Surface Films such that the latter sh ould be excluded for the same reasons as the former. 22 Pl.’s Reply at 18. B. Analysis The court concludes that Commerce did not analyze the “descriptions of the merchandise contained in the petition, [and] the original inves tigation” on the record, including those that fairly detract from its determination, se e Universal Camera, 340 U.S. at 488, such that its entire analysis dispositively answers the scope question in accordance with the substantial evidence standard. 19 C.F.R. § 351.225(k)(1). While the Petition and origin al antidumping investigation are cited at points during the Terphane Scope Ruling, it is to the purpose of summarizing parties’ arguments; 23 nowhere in the “Analysis and Conclusions” sect ion do they appear. Compare Scope Ruling at 6 (“Petitioners argue that they intended for these films to fall within the scope of The Order . . . Terphane argues that, on the contrary, Petitioners never claimed during the investigation that Terphane should have included th ese films, despite Ter phane indicating it ma de such films.”) with Scope Ruling at 11–14 (“Analysis and Conclusions”).

22 Mitsubishi further characterizes the Scope Ruling as a finding that Terphane’s films are equivalent PET films. Pl.’s Reply at 19. This al leged finding, Mitsubishi argues, lacks support. Id.

23 Commerce twice cites the Petition at 85 to contextualize parties’ arguments before the agency. Scope Ruling at 6 nn.39–40.Court No. 13-00062 Page 28
“In making a scope determination, Commerce must‘utilize[ ] and abide[ ] by the statutory and regulatory provisions that authorize [it] to investigate [scope issues].’” Shenyang Yuanda Aluminum Indus. Eng'g Co. v. United States, 40 CIT ___, ___, 181 F. Supp. 3d 1348, 1356 n.15 (2016) (quoting AMS Associates, Inc. v. United States, 737 F.3d 1338, 1344 (Fed. Cir. 2013)). Individual pieces of (k)(1) evidence together depict the regulatory history of a type of merchandise such that Commerce may informedly determin e whether the scope covers the products under review. Mid Continent Nail, 725 F.3d at 1302 (“If the [scope] language is ambiguous, Commerce must next consider the regulatory history, as contained in the [ ] ‘(k)(1) materials.’”) (citations omitted). This Court has held that “[t]his includes an informed and meaningful assessment of the Petition.” Shenyang, 181 F. Supp. 3d at 1356. Failure to meaningfully consider the (k)(1) factors makes remand appropriate. Id.; see Mid Continent Nail Corp. v. United States, 35 CIT ___, ___, 770 F. Supp. 2d 1372, 1379 (2011) (citing Allegheny Ludlum Corp. v. United States , 24 CIT 452, 479, 112 F. Supp. 2d 1141, 1165 (2000) (“[I]t is . . . well- established that Comme rce's total failure to consider or discuss record evidence which, on its face, provides significant support for an alternative conclusion renders the Department 's determination unsupp orted by substantial evidence.”)). The Government asserts that Mitsubishi “f undamentally misunderstand[s] Commerce’s interpretive process as defined by its regulations,” which is “that ‘descriptions of the merchandise’ are the most probative and meaningful evidence to resolve scope issues under 19 C.F.R. § 351.225(k)(1).” Def.’s Opp’n at 15. The court understands this to mean that the Government perceives Mitsubishi’s argument as calling for Commerce to consider, as probative, what the parties believed were in scope at the time of, and as shown by, the Petition and original investigation. Id. (“Petitioners contend that Commerce failed to addres s certain questionnaireCourt No. 13-00062 Page 29
responses from the original investigation, in which Terphane stated its beli ef that its co-extruded films were in-scope and in whic h petitioners ‘complained about lost sales due to a Terphane film that was functionally similar’ to the films at issue . . . .”). This perspective is not elucidated in the Scope Ruling, and so constitutes a post-hoc rationalization for a sizable gap in the agency’s analysis. See Motor Vehicle Mfrs. Ass’n of Unite d States, 463 U.S. at 43 (quoting Burlington Truck Lines, 371 U.S. at 168). Regardless, Commerce nowhere justified its avoidance of the Petition and original investigation under its (k)(1) analysis, despite that they contain “descriptions of the merchandise” that Commerce is obligated to analyze thereunder. 24 Scope Ruling; 19 C.F.R. § 351.225(k)(1). Mitsubishi further invokes certain (k )(1) materials as expressing thei r intent at the time they filed the Petition and participated in the original investigation as petitioners. Pl.’s Br. at 26 (citing Petition at 10). The Government may characterize this citation as one to petitioners’ belief at the time of filing the Petition, but it is patently a “description[ ] of the merchandise” contained in the

24 Mitsubishi, in describing the relevant (k)(1 ) evidence that it argues Commerce did not sufficiently engage with, points to the Petition, quoting, inter alia, petitioners’ description that “PET film can be made with a single layer or can be coextruded with other polymers into a multilayer film” and that “the proposed domestic like product in this investigation excludes ‘equivalent’ PET film, i.e., PET f ilm with a coating of more than 0.00001 inch thick.” Pl.’s Br. at 9–10 (citing Petition at 9–11). As to elements of th e original investigation, Mitsubishi points to a letter petitioners sent to Commerce wherein they urged the agency to account for co-extruded films in its calculations of normal va lue, Pl.’s Br. at 10–11 (citing Pe ts’ QR at Ex. 8, pp. 2–3); Section A, B, and D questionnaire responses wherein Te rphane described PET film products, Id. at 11–13 (citing Pets’ QR at Ex. 4, 6, 11); and the ITC’s re port from the initial investigation, wherein the definition of “equivalent PET f ilm” was discussed, Id. at 13–15 (c iting Pets’ QR at Ex. 17). See Pl.’s Br. at 26–28 (describing additional citations to the Petition and original investigation that Mitsubishi argues are relevant). The court does not determine that Mitsubishi’s citations to the Petition and the original investigation comprise an authoritative or exhaustive list of relevant (k)(1) evidence that should affect Commerce’s determinati on, but merely that where there is a description of the merchandise in those sources that may affect the outcome, Commerce should consider it, and explain its reasoning.Court No. 13-00062 Page 30
Petition. Commerce does not analyze, rebut, or othe rwise consider these elements of the record under the Scope Ruling’s Analysis and Conclusions section. Scope Ruling at 11–14. In light of ambiguous scope language, Commerce should give consideration to petitio ners’ intended meaning when examining a petition’s description of the subject merchandise. 25 See Mid Continent Nail, 770 F. Supp. 2d at 1379 (“Commerce failed to addr ess the Petitioners' Sc ope Letter which made clear the Petitioners’ intention that their proposedscope language would include subject goods packaged with non-subject items. This failure alone renders the Final Scope Ruling unsupported by substantial evidence.”); see also Fedmet, 755 F. 3d at 921 (“[T]he reason why the (k)(1) sources are afforded primacy in the scope analysis is because interpretation of the language used in the orders must be based on the meaning given to that language during the underlying investigations.”). These materials may not be dispositive in eith er direction under a reasoned analysis, but they merit consideration. See Nippon Steel, 458 F.3d at 1351; Universal Camera, 340 U.S. at 488; Nan Ya Plastics Corp., Ltd. v. United States, 39 CIT ___, ___, 128 F. Supp. 3d 1345, 1355 (2015)

25 At the second oral argument, counsel for the Gove rnment stated that Commerce did in fact defer to petitioners’ intent in crafting the scope language––specifically in that petitioners intended for the scope language to be recycled from the earlier ITC proceedings described supra. The court notes that this articulation of petitioners’ intent does not quite capture the intent that would be more relevant to the agency’s analysis, which is what the petitioners intended the scope language would mean in context. That notwithstanding, the court is sensitive to the reality that petitioners’ subjective intent should yield to express language in the scope, to the ex tent they conflict. See ArcelorMittal, 694 F.3d at 90 (“Commerce is not at lib erty to ignore the plain terms of an order in what appears to be, in retrospect, an effort to better reflect the intent of the petitioners.”); Duferco Steel, Inc. v. United States, 25 CIT 493, 501, 146 F. Supp. 2d 913, 922 (2001) (noting that while “this Court has previously held that Commerce must give ample deference to the petitioner's intent when examining a petition's description of the subject merchandise,” the Court should “avoid subjective issues of intent and, instead, look to the petition's language to determine whether the class or kind of merchandise at issue was expr essly included”), rev'd on other grounds, 296 F.3d 1087 (Fed. Cir. 2002).Court No. 13-00062 Page 31
(quoting Suramerica de Aleaciones Laminadas, C. A. v. United States, 44 F.3d 978, 985 (Fed. Cir. 1994)). The court expresses no inclination as to th e correct outcome, but concludes that Commerce must explain how its findings were “reached by ‘reasoned decision-making,’ including . . . a reasoned explanation supported by a stated conn ection between the fact s and the choice made.” Elec. Consumers Res. Council v. Fed. Energy Regulatory Comm'n, 747 F.2d 1511, 1513 (D.C. Cir. 1984) (citing Burlington Truck Lines, 371 U. S. at 168; Memphis Light, Gas and Water Div. v. FPC, 504 F.2d 225, 230 (D.C. Cir. 1974)). Alt ogether, Commerce must provide further explanation for its decisions in regard to relevant (k)(1) materials in the record, including those in the Petition and original investigation which it did not analyze in the original determination, on remand. Because the original determination will be a focus of the remand proceeding, with respect to that original determination, the court also notes that it disagr ees with Mitsubishi’s contention that Commerce’s misclassification of Cronar and Estar as co-extr uded products was central to the Terphane Scope Ruling. See e.g. Pl.’s Br. at 28–29. Instead, the court agrees with the Government that the “descriptions of the merchandise” in those ITC determinations, which share language with the Order’s scope, should be relevant to the analys is of products in the instant case. Def.’s Opp’n
at 15–18. 26 Bedeviling Commerce, however, is its explanation that the second sentence exclusion “refers to a specific category of products which the ITC identified as ‘equivalent PET film,’” defined by the ITC as “including DuPont’s Cronar and Estar produc ts, and those products

26 The Government notes that Terphane actually pr ovided evidence that Estar is produced through an in-line process. Def.’s Opp’n at 17 n.5 (citing Terphane’s May 7 Comments at 8–11; Terphane’s June 7 Response at 7). While “[c]o-extrusion is a type of in-line process . . . there is no record evidence that the in-line process used to manufacture Estar is co-extrusion.” Id. Counsel for the Government reiterated th is point at oral argument.Court No. 13-00062 Page 32
equivalent to Cr onar and Estar,” 27 in conjunction with its later statem ent that Cronar and Estar “are the paradigmatic examples of films” covere d by the exclusion. Scope Ruling at 4, 12. A reasonable mind would understand these categorical st atements to mean that, in order to qualify for the exclusion, Terphane’s Copolymer Surface Films must also be equivalent PET films, or “equivalent to Cronar and Estar.” 28 Read together with Commerce’s mistaken belief that Terphane had provided evidence “that indicates that Crona r and Estar are co-extruded,” see Def.’s Opp’n at 17, they necessitate a finding that at least some co-extruded films, namely Cronar, Estar, and Terphane’s Copolymer Products, are also equivalent PET films, and vice versa. However, in light of Commerce’s mistake, it is unclear the extent to which Co mmerce’s identification of the second sentence exclusion specifically with equivalent PET film influences the overall determination that Terphane’s Copolymer Surface Films are disposit ively out of scope. The Government points to the physical similarities between Terphane’s C opolymer Products, Cronar, and Estar, and reiterates that “the specific process used to apply the performance-enhancing layer has no bearing upon whether the exclusion at issu e applies.” Def.’s Opp’n at 18. But if the second sentence exclusion applies only to equivalent PET films, then Commerce would also need to determine that Terphane’s Copolymer Products are equivalent PET films in or der to exclude them under the second sentence; or, if Commerce does not make that determination, then to reach the same conclusion, it would need to explain how the sec ond sentence exclusion can apply to PET films that are not equivalent. Perhaps this is what Commerce means when it refers to those films

27 Commerce supported this statement with in formation submitted by parties into the administrative record. Scope Ruling at 4 n.25 (citing Terphane’s Scope Ruling Request at 5; Pets’ Mar. 23 Comments at 3).

28 Terphane argued before the agency, and argues before this court, that its Copolymer Surface Films are equivalent PET. Terphane Scope Ruling Request at 5; Def.-Inter.’s Opp’n at 20.Court No. 13-00062 Page 33
“identical to” or “equivalent to” Cronar and Estar. Scope Ruling at 4, 12. However, it is unclear to the court what films would be identical to Cr onar and Estar without them selves being equivalent PET, and whether there is a meaningful differ ence between those categories. Commerce should also clarify whether equivalent PET refers solely to those films excluded under the second sentence exclusion, or one that is a term of art in the industry. 29 See ArcelorMittal, 694 F.3d at 88 (“[A]ntidumping orders should not be interpreted in a vacuum devoi d of any consideration of the way the language of the order is used in the re levant industry.”). Commerce must reconcile these inconsistencies on re mand and more clearly explain its reas oning without the assistance of posthoc explanations from counsel. See Changzhou Wu jin Fine Chem. Factory Co. v. United States, 701 F.3d 1367, 1377 (Fed. Cir. 2012) (“The grounds upon which an administrative order must be judged are those upon which the record discloses th at its action was based.” (quoting Chenery, 318 U.S. at 87)). In sum, to stand, the Scope Ruling must dem onstrate, based on substantial evidence on the record, that Commerce’s conclusion that its (k)(1) analysis was dispositive of the scope question. See Meridian Prod., 851 F.3d at 1382 n.8. That it does not do, for the reasons laid out above. On remand, Commerce shall consider the (k)(1) eviden ce contained in the agency record that is derived from the Petition and the original investigation, per the regulation. The court reiterates that in this opinion it expresses no inclination as to the determination Commerce should make, but

29 Mitsubishi points to the ITC’s report from the original investigation, which notes, inter alia, that “the Commission has defined equivalent PET film as PET film to which has been applied a coating of more than 0.0001 inch thick,” in support of its contention that “the ITC found that equivalent PET films do not compete with subject PET films . . . [t]his discussion of equivalent PET film did not refer to coextruded films . . . .” Pl.’s Br . at 14–15 (citing Pets’ QR at Ex. 17, pp. I-13–I-14). Mitsubishi also takes issue with Commerce’s association between co-extruded films and equivalent PET. Pl.’s Br. at 27 ("[N]o interested party or government agency has ever indicated that coextruded films might qualify as equivalent PET films, depending on the thickness of the coextruded layer.").Court No. 13-00062 Page 34
only instructs that Commerce must give a reasoned review to the entire record, per the dictates of its regulation, in the process. Accordingly, if Commerce determines that the (k)(1) factors are not dispositive, then it shall consider the factors listed in 19 C.F.R. § 351.225(k)(2) and make a determination thereunder . See generally Diversified Products, 572 F. Supp. 883. III. The Terphane Scope Ruling wa s not Invalidated by Delay Mitsubishi argues that the Terphane Scope Ru ling is invalidated by delay. Pl.’s Br. at 30. Mitsubishi points out that Commerce’s regulations require it to issue a scope determination within “45 days of the date of receipt of an applic ation for a scope ruling,” unless it initiates a scope inquiry under the Diversified Products criteria. Id . at 30; 19 C.F.R. § 351.225(c)(2). In the instant matter, Commerce neither issued a scope determination within 45 days of the receipt of Terphane’s application (submitted February 22, 2012), nor did it initiate a scope inquiry under the Diversified Products criteria. Terphane Sc ope Ruling at 1. Rather, Commer ce issued the Scope Ruling 320 days later on January 7, 2013. Id. Mitsubishi argues that Commerce “departed arbitrarily” from its policy of issuing scope determinations within 45 days, and that therefore, this departure invalidates the scope dete rmination and renders it contrary to law and uns upported by substantial evidence. Pl.’s Br. at 31 (citing Koyo Seiko Co., Ltd. v. United States, 16 CIT 366, 372, 796 F. Supp. 517, 523 (1992)); see also Amanda Foods (V iet.) Ltd. v. United States, 35 CIT ___, ___, 807 F. Supp. 2d 1332, 1343 (2011) (“When an agency changes its position suddenly and without explanation or ‘does not take ac count of legitimate re liance on prior interpretation,’ the agency's action may be ‘arbitrary, capricious [or] an abuse of discretion.’” (quoting Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 742 (1996))). Mits ubishi contends that it was harmed by the delay in that it was “subjected to 273 additional days of unfairly traded Te rphane imports.” Pl.’s Reply at 3–4.Court No. 13-00062 Page 35
Mitsubishi’s arguments miss the mark. Courts are “most reluctant to conclude that every failure of an agency to observe a procedural requirement voids subsequent agency action, especially when important public rights are at stake.” Brock v. Pierce County, 476 U.S. 253, 260 (1986); see also United States v. Great Am. Ins. Co. of NY, 738 F.3d 1320, 1329 (Fed. Cir. 2013). Commerce may, “for good cause,” extend any time limit within Part 351 of Title 19, unless expressly precluded by statute. 19 C.F.R. § 351.302(b) (2012). In addition, it is within Commerce’s discretion “to re lax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it.” Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539 (1970). Here, Commerce received voluminous submissions (approximately 700 pages) that were highly technical and complex. Def.’s Opp’n at 4. Given the size and complexity of the submissions, Comme rce had good cause to extend the time limit beyond 45 days. See 19 C.F.R. § 351.302(b). While the court need not reach the question of whether the delay here was reasonable, it is telling that that Mitsubishi did not object to the extension. See Pl.’s App. In any event, invalidation is not warranted because the time period in § 351.225(c)(2) is directory, not mandatory, as it does not specify a consequence for failure to comply with the provision. See Canadian Fur Trappers Corp. v. United States, 12 CIT 612, 615, 691 F. Supp. 364, 367 (1988), aff’d, 884 F.2d 563 (Fed. Cir. 1989). “[A ] statutory time period is not mandatory unless it both expressly requires an agency or public official to act within a particular time period and specifies a consequence for failure to comply with the provisions.” United States v. Great Am. Ins. Co. of NY, 35 CIT ___, ___, 791 F. Supp. 2d 1337, 1354 (2011) (quoting id.), aff’d, 738 F.3d 1320 (Fed. Cir. 2013). Finally, the court’s decision to remand this matter moots any issue regarding invalidation by delay, as the new dead lines set by the court will apply going forward.Court No. 13-00062 Page 36

CONCLUSION For the foregoing reasons, it is hereby
ORDERED that Mitsubishi’s motion for judgment on the agency record is granted in part and denied in par t; and it is further
ORDERED that Commerce’s determination unde r 19 C.F.R. § 351.225(k)(1) as to Terphane’s Copolymer Surface Produc ts is remanded for further cons ideration consistent with this opinion; and it is further
ORDERED that Commerce shall file its remand determination with the court within 60 days of this date; and it is further
ORDERED that the parties shall have 30 days thereafter to file comments; and it is further
ORDERED that the parties shall have 15 days thereafter to file replies to comments on the remand determination. /s/ Gary S. Katzmann Gary S. Katzmann, Judge
Dated: -XQH New York, New York