Court Opinion

ID: 3212984
Source: CourtListenerOpinion
Date Created: 2016-06-14 21:03:36.191437+00
Date Added: 2024-06-11T07:39:29.651382
License: Public Domain

Slip Op. 16 - 

              UNITED STATES COURT OF INTERNATIONAL TRADE

    SUNEDISON, INC.,

                          Plaintiff,     Before: Donald C. Pogue,
                                                 Senior Judge
                     v.
                                         Consol. Court No. 15-000661
    UNITED STATES,

                          Defendant.

                            OPINION and ORDER

[remanding Department of Commerce’s antidumping duty scope
determination]

                                                 Dated: June 14, 2016

          David S. Christy, Jr., Michael P. House, and David J.
Townsend, Perkins Coie LLP, of Washington, DC, for Plaintiff
SunEdison, Inc.

          J. Kevin Horgan and Alexandra H. Salzman, deKieffer
& Horgan, PLLC, of Washington, DC, for Plaintiffs Kyocera Solar,
Inc. and Kyocera Mexicana S.A. de C.V.

          Joshua E. Kurland and Agatha Koprowski, Trial
Attorneys, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for the Defendant.
Also on the brief were Benjamin C. Mizer, Principal Deputy
Assistant Attorney General, Jeanne E. Davidson, Director, and
Reginald T. Blades, Jr., Assistant Director. Of counsel was
Scott D. McBride, Senior Attorney, Office of the Chief Counsel
for Trade Enforcement & Compliance, U.S. Department of Commerce,
of Washington, DC.

            Timothy C. Brightbill and Usha Neelakantan,

1 This action is consolidated with Kyocera Solar, Inc. v. United
States, Ct. No. 15-00081. Order, July 1, 2015, ECF No. 21,
at ¶ 4; Order, Apr. 28, 2016, ECF No. 64.
Consol. Ct. No. 15-00066                                      Page 2

Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor
SolarWorld Americas, Inc.

          Pogue, Senior Judge:   This consolidated action arises

from the final affirmative determination made by the U.S.

Department of Commerce (“Commerce”) in its antidumping

investigation of certain crystalline silicon photovoltaic

products (solar cells and panels) from Taiwan.2   Before the court

are motions for judgment on the agency record, challenging

Commerce’s final determinations regarding the scope of these

proceedings.3

          The court has jurisdiction pursuant to Section

516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended,

19 U.S.C. § 1516a(a)(2)(B)(i) (2012),4 and 28 U.S.C. § 1581(c)

(2012).

          As explained below, Commerce’s final scope definition

2 See Certain Crystalline Silicon Photovoltaic Products from
Taiwan, 79 Fed. Reg. 76,966 (Dep’t Commerce Dec. 23, 2014)
(final determination of sales at less than fair value) and
accompanying Issues & Decision Mem., A-583-853, Investigation
(Dec. 15, 2014) (“Solar II Taiwan I&D Mem.”) cmt. 1.
3 See Br. of Pl. SunEdison, Inc. in Supp. of Pl.’s Mot. for J.
Upon the Agency R., ECF Nos. 32 (conf. version) & 33 (pub.
version) (“SunEdison’s Br.”); Kyocera Solar, Inc. & Kyocera
Mexicana S.A. de C.V. Mem. in Supp. of Mot. for J. on the
Agency R., ECF Nos. 29 (conf. version) & 30 (pub. version)
(“Kyocera’s Br.”).
4 Further citations to the Tariff Act of 1930, as amended, are to
the relevant provisions of Title 19 of the U.S. Code, 2012
edition.
Consol. Ct. No. 15-00066                                      Page 3

is remanded for consistency with, and based on the same

reasoning as, related proceedings concerning solar panels from

the People’s Republic of China (“China” or “PRC”).5   Essentially,

Commerce’s final scope determination, in both cases, treated

solar panels differently depending on their country of assembly,

and failed to consider or discuss either the proportion of

production necessary to determine a solar panel’s country of

origin or the reasonableness of applying duties to the entire

value of solar panels assembled in the PRC when only a small

percentage of the cost of production actually occurs there.

          After a statement of the background, arguments

presented, and standard of review, the Plaintiffs’ challenges to

Commerce’s final scope determination are discussed below.

                           BACKGROUND

          Relevant background leading to this case is summarized

in the court’s prior opinion.6   Briefly, the Solar II PRC opinion

addressed Commerce’s scope determinations in related proceedings

concerning solar panels from China that are assembled from cells

5 See SunPower Corp. v. United States, Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, (June 8, 2016)
(“Solar II PRC Slip Op.” or “the Solar II opinion”);
infra Discussion Sections IV, VI, & VII.
6 Solar II PRC Slip Op., Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, at Background Sections I
& II.
Consol. Ct. No. 15-00066                                      Page 4

manufactured outside of China,7 including specifically cells that

were manufactured in Taiwan (the “Solar II PRC” proceedings).8

Commerce’s final scope definition here (in the “Solar II Taiwan”

proceedings) covers all solar cells manufactured in Taiwan that

are assembled into panels anywhere in the world, except those

covered by the Solar II PRC proceedings because they are

assembled into panels in China.9    Both cases concern the rules of

origin for solar panels manufactured from Taiwanese cells.     For

this reason, the issues here are inextricably entwined with

those already addressed in the Solar II PRC opinion.

Familiarity with the Solar II PRC opinion is therefore presumed.

            Solar panels assembled from solar cells made in the

PRC were also, and initially, the subject of separate

proceedings (the “Solar I PRC” proceedings).     The Solar I PRC

proceedings resulted in antidumping and countervailing duty

orders covering all solar cells manufactured in China, whether

or not and regardless of where in the world such cells are

7 Solar panels (also referred to as modules or laminates) are
assembled from solar cells, which use crystalline silicon to
convert sunlight into electricity. Certain Crystalline Silicon
Photovoltaic Products from China and Taiwan, USITC Pub. 4519,
Inv. Nos. 701-TA-511 & 731-TA-1246-1247 (Feb. 2015) (final
determination) (“Solar II ITC Final Determination”) at 10.
8 Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at Background Section II & Discussion
Section IV.
9   See Solar II Taiwan I&D Mem. cmt. 1 at 23.
Consol. Ct. No. 15-00066                                     Page 5

assembled into solar panels prior to exportation to the United

States.10

            In the Solar I PRC proceedings, Commerce determined

that “solar module assembly does not substantially transform

solar cells such that it changes the country-of-origin.”11

Accordingly, Commerce concluded that “where solar cell

production occurs in a different country from solar module

assembly, the country-of-origin of the solar modules/panels is

the country in which the solar cell was produced [and not the

country of panel assembly].”12

10See Crystalline Silicon Photovoltaic Cells, Whether or Not
Assembled into Modules, from the [PRC], 77 Fed. Reg. 63,791
(Dep’t Commerce Oct. 17, 2012) (final determination of sales
at less than fair value, and affirmative final determination of
critical circumstances, in part) and accompanying Issues
& Decision Mem., A-570-979, Investigation (Oct. 9, 2012)
(“Solar I PRC AD I&D Mem.”); Crystalline Silicon Photovoltaic
Cells, Whether or Not Assembled into Modules, from the [PRC],
77 Fed. Reg. 63,788 (Dep’t Commerce Oct. 17, 2012) (final
affirmative countervailing duty determination and final
affirmative critical circumstances determination) and
accompanying Issues & Decision Mem., C-570-980, Investigation
(Oct. 9, 2012); Solar II PRC Slip Op., Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, at Background Section I.
11[Commerce’s] Mem. re Scope Clarification, Crystalline Silicon
Photovoltaic Cells, Whether or Not Assembled into Modules, from
the [PRC], A-570-979 & C-570-980, Investigations (Mar. 19,
2012), reproduced in, e.g., App. to Br. of Consol. Pl. Suniva,
Inc. in Supp. of its Mot. for J. on the Agency R., Consol. Ct.
No. 15-00067, ECF No. 58-3 at Tab 1 Ex. 2 (“Solar I PRC Scope
Clarification Mem.”), at 8 (unchanged in Solar I PRC AD I&D Mem.
cmt. 1 at 6–7).
12   Id.
Consol. Ct. No. 15-00066                                      Page 6

          Following the imposition of the Solar I PRC orders,

however, domestic producer SolarWorld Americas Incorporated

(“SolarWorld”) (now Defendant-Intervenor in this action)

petitioned Commerce to initiate additional proceedings.

SolarWorld alleged, inter alia, that after the Solar I PRC

orders were imposed, exports of solar panels to the United

States from China shifted from panels assembled from cells that

were also made in China, to panels assembled from cells

“completed or partially manufactured in Taiwan or other

countries (i.e., cells manufactured in Taiwan from Taiwanese

inputs, or cells manufactured in Taiwan or other countries from

Chinese inputs, including wafers).”13

          Commerce agreed that this “measurable shift in trade

flows . . . resulted in increased imports of non-subject modules

produced in China.”14   In response, Commerce initiated

13Pet. for Imposition of Antidumping & Countervailing Duties
Pursuant to Secs. 701 & 731 of the Tariff Act of 1930, as
Amended, Certain Crystalline Silicon Photovoltaic Products from
the [PRC] and Taiwan, A-570-010, A-583-853, & C-570-011
Investigations (Dec. 31, 2013), reproduced in App. to Def.’s
Resp. in Opp’n to Pls.’ Rule 56.2 Mots. for J. on the Agency R.,
ECF Nos. 53-1 (conf. version) & 54-1 (pub. Version) at Tab 1
(“Solar II Pet.”), at 5-6.
14Solar II Taiwan I&D Mem. cmt. 1 at 21 (citing Solar II Pet.,
[ECF Nos. 53-1 & 54-1 at Tab 1], at 3, 5-6, 21, 34, 37, 53);
see also id. at 17 (“[SolarWorld’s Solar II] Petition claimed
that Chinese solar producers were ‘using cells fully or
partially manufactured in Taiwan in the modules they assembled
for export to the United States,’ which allowed the Chinese
                                             (footnote continued)
Consol. Ct. No. 15-00066                                      Page 7

(1) antidumping and countervailing duty investigations that

ultimately resulted in orders covering all panels assembled in

China from solar cells made outside of China, including

Taiwanese cells15 (the Solar II PRC proceedings); and (2) an

antidumping investigation that ultimately resulted in an order

covering all solar cells produced in Taiwan, whether or not, and

regardless of where, assembled into panels, except those

assembled into panels in China16 (the Solar II Taiwan

proceedings).

            Plaintiffs here17 are U.S. importers and a foreign

producer of solar panels containing solar cells manufactured in

Taiwan.18    Plaintiffs now challenge Commerce’s final

solar producers to ‘export those modules, duty-free, to the U.S.
market.’ . . . The Petition claimed that Taiwanese cell and
module imports increased by 85 percent, in large part as a
result of this alleged loophole.”) (quoting and citing,
respectively, Solar II Pet., [ECF Nos. 53-1 & 54-1 at Tab 1],
at 4, 6); id. at 21 (“[F]ollowing the implementation of the
[Solar I PRC] AD and CVD orders . . ., there has been a
measurable shift in trade flows that has resulted in increased
imports of non-subject modules produced in China.”)
(citing Solar II Pet., [ECF Nos. 53-1 & 54-1 at Tab 1], at 3,
5-6, 21, 34, 37, 53).
15See Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at Background Section II & Discussion Section
IV).
16   See Solar II Taiwan I&D Mem. cmt. 1 at 23.
17SunEdison, Inc. (“SunEdison”), and Kyocera Solar, Inc. and
Kyocera Mexicana S.A. de C.V. (collectively “Kyocera”).
18   Compl., ECF No. 11, at ¶ 5; see Compl., Ct. No. 15-00081,
                                                (footnote continued)
Consol. Ct. No. 15-00066                                      Page 8

determination regarding the scope of the Solar II Taiwan

proceedings.   Specifically, the Plaintiffs make the following

arguments regarding Commerce’s final scope determination in the

Solar II Taiwan investigation.

                        PARTIES’ ARGUMENTS

           (I) Commerce’s late modification of the Solar II

Taiwan scope substantially deprived interested parties –

including Kyocera, a Mexican assembler of Taiwanese solar cells

into panels exported to the United States – of due process.19

          (II) Commerce unlawfully expanded the scope of

Solar II Taiwan, after the close of factual submissions, to

include merchandise that had been excluded from Commerce’s

unfair pricing analysis (as well as the International Trade

ECF No. 6, at ¶¶ 5-6, 9, 17.
19See Kyocera’s Br., ECF Nos. 29 & 30, at 3 (describing
Kyocera’s production structure), 24-25 (arguing that Commerce’s
approach to scope definition throughout this investigation
deprived Kyocera of due process); see also SunEdison’s Br.,
ECF Nos. 32 & 33, at 28 (“[Commerce] deprived respondents of the
opportunity to comment on the novel scope adopted in the final
determination by issuing it so late in the proceeding.”);
id. at 9 (“[Commerce] did not address any of the comments
opposing [its ultimate] scope proposal . . ., even though it
adopted in its final determination virtually all of [that]
proposal with respect to Taiwan.”).
Consol. Ct. No. 15-00066                                     Page 9

Commission’s injury analysis) throughout the investigations.20

            (III) Commerce’s final Solar II Taiwan scope

determination was contrary to explicit statutory and regulatory

requirements.21    Specifically, Plaintiffs argue that Commerce’s

final Solar II Taiwan scope determination was contrary to one or

more of the following statutory/regulatory provisions:

(A) 19 U.S.C. § 1673 (providing Commerce’s authority to impose

antidumping duties on products within “a class or kind of

foreign merchandise”);22 (B) 19 U.S.C. §§ 1677b(a) (requiring a

“fair comparison” between prices of the foreign like product

20See SunEdison’s Br., ECF Nos. 32 & 33, at 28 (“In reporting
U.S. sales in their questionnaire responses, Commerce instructed
the Taiwan respondents to follow . . . a scope definition that
Commerce totally abandoned [in the final determination,] long
after verifications of those responses were completed . . . .”);
id. at 26 (“In Allegheny Bradford, this Court explained that
‘Commerce’s discretion to define and clarify the scope of an
investigation is limited in part by concerns for the finality of
administrative action, which caution against including a product
that was understood to be excluded at the time the investigation
began.’”) (quoting Allegheny Bradford Corp. v. United States,
28 CIT 830, 342 F. Supp. 2d 1172, 1187-88 (2004) (citation
omitted)); Kyocera’s Br., ECF Nos. 29 & 30, at 7 (“[Commerce]’s
attempt to expand the [final] scope of the [Solar II Taiwan]
investigation comes too late. The [prior] scope ha[d] not only
been used in [Commerce]’s selection of mandatory respondents, it
has also defined the scope of the International Trade
Commission’s injury investigation . . . .”) (quoting Kyocera’s
administrative case brief below).
21SunEdison’s Br., ECF Nos. 32 & 33, at 14-16, 21-24; Kyocera’s
Br., ECF Nos. 29 & 30, at 11-16.
22   SunEdison’s Br., ECF Nos. 32 & 33, at 12-14; 19 U.S.C. § 1673.
Consol. Ct. No. 15-00066                                     Page 10

from the country under investigation (normal value) and the U.S.

export prices of the subject merchandise) & 1677(16)(A)-(C)

(requiring that the “foreign like product” must be “produced in

the same country” as the subject merchandise);23 (C) 19 U.S.C.

§ 1677j(b) (dealing with circumvention of existing antidumping

duty orders) & 19 C.F.R. § 351.225(h) (providing for Commerce’s

issuance of scope rulings, under existing antidumping duty

orders, for “products completed or assembled in other foreign

countries”).24    SunEdison also argues that, (D) “by enacting and

revising the antidumping law in 1984, 1988 and 1994, Congress

bound Commerce to [continue to] use the substantial

transformation test to determine the scope of antidumping duty

orders . . . .”25

            (IV) Commerce’s final Solar II Taiwan scope

determination unlawfully departed from prior practice without

23   SunEdison’s Br., ECF Nos. 32 & 33, at 14-15.
24   Kyocera’s Br., ECF Nos. 29 & 30, at 11-16.
25SunEdison’s Br., ECF Nos. 32 & 33, at 21 (relying on GPX Int’l
Tire Corp. v. United States, 666 F.3d 732, 739 (Fed. Cir. 2011)
(“In the case of a widely known judicial decision or agency
practice, ‘Congress is presumed to be aware of an administrative
or judicial interpretation of a statute and to adopt that
interpretation when it re-enacts a statute without change.’”)
(quoting Lorillard v. Pons, 434 U.S. 575, 580 (1978));
id. at 21-25 (expanding on this argument).
Consol. Ct. No. 15-00066                                     Page 11

sufficient explanation.26

             (V) Commerce’s conclusion that, with the exception of

Taiwanese cells assembled into solar panels in China, all panels

assembled from Taiwanese cells are subject to the Solar II

Taiwan proceedings as products of Taiwan, regardless of where

they are assembled, is not supported by substantial evidence.27

Specifically, Commerce’s determination that Taiwanese solar

cells are not substantially transformed when assembled into

panels in Mexico is unreasonable in light of the evidentiary

record.28

            (VI) Commerce unreasonably determined to apply

antidumping duties on the full value of the panels into which

Taiwanese solar cells are incorporated, rather than solely the

value of the cells themselves.29

            (VII) Commerce unreasonably excluded from its final

dumping analysis third-country sales that the mandatory

respondents reported as ultimately destined for the United

26   SunEdison’s Br., ECF Nos. 32 & 33, at 12-13, 21.
27   Kyocera’s Br., ECF Nos. 29 & 30, at 7, 18-23.
28See id.; infra Standard of Review Section (defining
“substantial evidence” review).
29SunEdison’s Br., ECF Nos. 32 & 33, at 10, 54-56; Kyocera’s
Br., ECF Nos. 29 & 30, at 8, 15-16, 25-26.
Consol. Ct. No. 15-00066                                        Page 12

States.30

            Following a statement of the applicable standard of

review, each group of arguments is addressed in turn below.

                          STANDARD OF REVIEW

            The court will sustain Commerce’s antidumping

determinations if they are supported by substantial evidence and

are otherwise in accordance with law.31     Substantial evidence

refers to “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion,”32 considering any

relevant evidence that fairly detracts from the reasonableness

of the agency’s determination.33     The substantial evidence

standard of review can be roughly translated to mean “is the

determination unreasonable?”34     The agency must “examine the

relevant data and articulate a satisfactory explanation for its

30   SunEdison’s Br., ECF Nos. 32 & 33, at 4-6, 27, 33-40.
31   See 19 U.S.C. § 1516a(b)(1)(B)(i).
32SKF USA, Inc. v. United States, 537 F.3d 1373, 1378
(Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)).
33   Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
34Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351
(Fed. Cir. 2006) (quotation and alteration marks and citation
omitted).
Consol. Ct. No. 15-00066                                   Page 13

action,”35 including “a ‘rational connection between the facts

found and the choice made.’”36

            “[A]n agency determination that is arbitrary is ipso

facto unreasonable,”37 and a determination is arbitrary when it

fails to “consider an important aspect of the problem,”38 or

“treat[s] similar situations in dissimilar ways.”39

35Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co.,
463 U.S. 29, 43 (1983).
36Id. (quoting Burlington Truck Lines v. United States, 371 U.S.
156, 168 (1962)).
37Shenyang Yuanda Aluminum Indus. Eng’g Co. v. United States,
__ CIT __, __ F. Supp. 3d __, Slip Op. 16-11, 2016 WL 524268,
at *17 n.148 (Feb. 9, 2016) (quoting Ward v. Sternes, 334 F.3d
696, 704 (7th Cir. 2003) (“[A] decision [that] is so
inadequately supported by the record as to be arbitrary [is]
therefore objectively unreasonable.”) (quotation marks and
citations omitted)).
38   State Farm, 463 U.S. at 43.
39Anderson v. U.S. Sec’y of Agriculture, 30 CIT 1742, 1749, 462
F. Supp. 2d 1333, 1339 (2006) (“Agencies have a responsibility
to administer their statutorily accorded powers fairly and
rationally, which includes not ‘treat[ing] similar situations in
dissimilar ways.’”) (quoting Burinskas v. NLRB, 357 F.2d 822,
827 (D.C. Cir. 1966) (“[An agency] cannot act arbitrarily nor
can it treat similar situations in dissimilar ways.”) (citation
and footnote omitted)); see also id. (“Indeed, a principal
justification for the administrative state is that in ‘areas of
limitless factual variations, like cases will be treated
alike.’”) (quoting Nat’l Muffler Dealers Ass’n v. United States,
440 U.S. 472, 477 (1979) (citations omitted)) (also quoting
South Shore Hosp., Inc. v. Thompson, 308 F.3d 91, 101
(1st Cir. 2002) (“The goal of regulation is not to provide exact
uniformity of treatment, but, rather, to provide uniformity of
rules so that those similarly situated will be treated
alike.”)); Trs. in Bankruptcy of N. Am. Rubber Thread Co.
v. United States, 32 CIT 663, 665, 558 F. Supp. 2d 1367, 1370
                                             (footnote continued)
Consol. Ct. No. 15-00066                                   Page 14

          Where the statutory language is sufficiently broad to

permit a range of policy choices, the agency may change course

from its prior practice and adopt a new approach within its

statutory authority,40 but it must explain how the new policy is

consistent with the continued relevance (if any) of the factual

findings on which the agency’s prior policy was based.41

“[A] reasoned explanation is needed for disregarding facts and

circumstances that underlay or were engendered by the prior

(2008) (“Generally, an agency action is arbitrary when the
agency offers insufficient reasons for treating similar
situations differently.”) (quotation and alteration marks and
citation omitted).
40See, e.g., Nakornthai Strip Mill Pub. Co. v. United States,
32 CIT 1272, 1276, 587 F. Supp. 2d 1303, 1307 (2008) (“Commerce
has discretion to change its policies and practices as long as
they are reasonable and consistent with their statutory mandate
and may adapt its views and practices to the particular
circumstances at hand, so long as the agency’s decisions are
explained and supported by substantial evidence on the record.”)
(quotation and alteration marks and citation omitted).
41See British Steel PLC v. United States, 127 F.3d 1471, 1475
(Fed. Cir. 1997) (“An agency is obligated to follow [its]
precedent, and if it chooses to change, it must explain why.”)
(quotation marks and citation omitted); State Farm, 463 U.S.
at 46–48 (holding that an agency may not change course without
addressing the continued relevance of factual findings on which
the agency’s prior policy was based); FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 537 (2009) (J. Kennedy, concurring
in part and concurring in judgment) (explaining that State Farm
followed the principle that an agency “cannot simply disregard
contrary or inconvenient factual determinations that it made in
the past, any more than it can ignore inconvenient facts when it
writes on a blank slate”).
Consol. Ct. No. 15-00066                                      Page 15

policy.”42    Thus, “when departing from its own precedent,

Commerce must explain its departure,”43 providing a rational link

between the facts found and the conclusions reached, after

considering all important aspects of the problem.

                              DISCUSSION

I.     Remand on Other Grounds Makes Reaching Due Process
       Arguments Unnecessary.

             Because remand of Commerce’s final Solar II Taiwan

scope determinations is warranted on other grounds,44 and because

the parties will therefore have ample opportunity to address the

scope issues on remand, Plaintiffs’ due process challenges to

the final scope determination are moot.    The court therefore

offers no opinion in this regard.

             In addition, Kyocera’s claim that, as a third-country

assembler of Taiwanese solar cells into panels, it was deprived

of its “right to participate in the investigation as a

respondent and submit information demonstrating that it was not

42   Fox, 556 U.S. at 516.
43Nakornthai, 32 CIT at 1276, 587 F. Supp. 2d at 1308 (citing
and quoting Trs. in Bankruptcy of N. Am. Rubber Thread Co.
v. United States, 31 CIT 2040, 2047, 533 F. Supp. 2d 1290, 1297
(2007) (“Commerce [must] attempt to distinguish the reasoning
set forth in [prior cases] from the present case.”) (alterations
in Nakornthai)).
44   See infra Discussion Section IV.
Consol. Ct. No. 15-00066                                     Page 16

dumping solar products”45 is entwined with the scope

determinations remanded here and in Solar II PRC.46    Accordingly,

this matter will be clarified once the issues remanded here are

resolved, and the scope of these proceedings is finalized.

II.    Commerce’s Final Solar II Taiwan Scope Modification’s
       Effect On the Databases Used Throughout the Investigation

            Plaintiffs next argue that Commerce’s final Solar II

Taiwan scope determination unlawfully altered the sales

databases relied on throughout the investigation, resulting in

incongruence between the sales used to determine dumping

liability and those ultimately covered by the order.47    Because

45   Kyocera’s Br., ECF Nos. 29 & 30, at 25.
46See infra Discussion Sections IV, VI, & VII; Solar II PRC Slip
Op., Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
47See SunEdison’s Br., ECF Nos. 32 & 33, at 28 (“In reporting
U.S. sales in their questionnaire responses, Commerce instructed
the Taiwan respondents to follow . . . a scope definition that
Commerce totally abandoned long after verifications of those
responses were completed . . . .”); id. at n.14 (noting that in
Solar II PRC Commerce had emphasized that its final scope
modification “‘result[ed] in no change to [the mandatory
respondents’] reported database[s]’”) (quoting Issues & Decision
Mem., Certain Crystalline Silicon Photovoltaic Products from the
[PRC], A-570-010, Investigation (Dec. 15, 2014) (adopted in
79 Fed. Reg. 76,970 (Dep’t Commerce Dec. 23, 2014) (final
determination of sales at less than fair value)) (“Solar II PRC
AD I&D Mem.”) cmt. 1 at 19); Kyocera’s Br., ECF Nos. 29 & 30,
at 7 (quoting Kyocera’s administrative case brief below
(“[Commerce’s scope modification changed the scope from that]
used in [Commerce]’s selection of mandatory respondents [and]
. . . the International Trade Commission’s injury investigation,
which has undertaken no analysis of the impact of third-country
                                             (footnote continued)
Consol. Ct. No. 15-00066                                     Page 17

this claim also implicates the specific agency decisions that

are remanded here and in Solar II PRC,48 the court also defers

consideration of this matter until the issues remanded here are

resolved, and the scope of these proceedings is finalized.

III. Commerce’s Final Solar II Taiwan Scope Determination Was
     Not Contrary to Explicit Statutory and Regulatory
     Requirements.

            Next, Plaintiffs argue that Commerce’s final Solar II

Taiwan scope determination was contrary to one or more

statutory/regulatory provisions.49    Each argument is addressed in

turn.

solar modules on the domestic industry.”)); but see Solar II ITC
Final Determination, supra note 7, at 7 (“The [International
Trade] Commission recognized early in these [Solar II PRC and
Solar II Taiwan] investigations that changes in the scopes were
likely and took steps to ensure that it collected the
information that would allow it to fulfill its statutory
obligations. In the questionnaires issued in the final phase of
these investigations, the Commission asked U.S. producers and
importers to segregate their import data into sixteen
categories, which were designed to provide the Commission with
flexibility to adjust the data to conform to different possible
scope definitions. The manner in which the Commission collected
the data in these investigations permitted the agency and the
parties to consider and evaluate the implications of various
possible scope definitions to the Commission’s analysis.”)
(citations omitted).
48See infra Discussion Sections IV, VI, & VII; Solar II PRC
Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
49   See supra notes 21-25 and accompanying text.
Consol. Ct. No. 15-00066                                     Page 18
A. 19 U.S.C. § 1673

          SunEdison argues that Commerce impermissibly “assigned

to [the statutory phrase] ‘a class or kind of foreign

merchandise’ different and inconsistent meanings for the same

merchandise – modules containing Taiwanese-origin cells –

depending on where the module assembly took place.”50

          But as explained in the Solar II PRC opinion, it is

well-established that the scope of an antidumping order is

defined by two separate inquiries – (1) is the product within

the relevant class/kind of merchandise? and (2) did the product

originate in the country covered by the order?51   Here, the

relevant class/kind of merchandise is solar cells, whether or

not assembled into panels.52   The essence of the parties’ dispute

concerns the second inquiry – Commerce’s rule for determining

whether a given product within this class/kind of merchandise

originates in the country covered by the order.    Commerce did

50SunEdison’s Br., ECF Nos. 32 & 33, at 14 (quoting 19 U.S.C.
§ 1673).
51Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at 25 (quoting and citing relevant
authorities).
52See Solar II Taiwan I&D Mem. Section III (Scope of the
Investigation) at 4 (“The merchandise covered by this
investigation is crystalline silicon photovoltaic [i.e., solar]
cells, and modules, laminates and/or panels consisting of [such]
cells, whether or not partially or fully assembled into other
products, including building integrated materials.”).
Consol. Ct. No. 15-00066                                     Page 19

not assign different and inconsistent meanings to the phrase

“class or kind of foreign merchandise” in 19 U.S.C. § 1673, but

rather applied two different origin rules to products within

this class or kind of merchandise, depending on where the solar

cells were assembled into panels.53   Because the statute does not

directly address this concern, Commerce’s decision in this

regard was not explicitly contrary to the plain language of

19 U.S.C. § 1673.

     B.   19 U.S.C. § 1677b(a) & 1677(16)(A)-(C)

          SunEdison also argues that, because “[t]he statute

defines the term ‘country’ as limited to a single country for

purposes of antidumping proceedings,”54 it therefore “compels a

uniform test to determine when the foreign like product is

‘produced in the same country’ as subject merchandise, because

multiple tests arbitrarily create a mismatch between the

universes [i.e., respective scopes] of subject merchandise and

the foreign like product.”55   Because this claim is related to

53See infra Discussion Section IV; Solar II PRC Slip Op.,
Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
54SunEdison’s Br., ECF Nos. 32 & 33, at 14-15 (quoting 19 U.S.C.
§ 1677(3)).
55Id. (quoting 19 U.S.C. § 1677(16)) (also citing and quoting
Slater Steels v. United States, 27 CIT 1786, 1788, 297 F. Supp.
2d 1362, 1364 (2003) (“Under any of these definitions [of normal
value], both the ‘foreign like product’ and the ‘subject
                                             (footnote continued)
Consol. Ct. No. 15-00066                                     Page 20

one of the grounds for remand, both here and in Solar II PRC,56

the court will defer its adjudication of this issue until the

agency has had an opportunity to reconsider on remand.

       C.   19 U.S.C. § 1677j(b) & 19 C.F.R. § 351.225(h)

            Next, Kyocera argues that Commerce’s decision – to

include, within the scope of this order on merchandise from

Taiwan, all Taiwanese solar cells that are assembled into panels

in Taiwan or in other countries (except those that are assembled

into panels in China) – should be evaluated under 19 U.S.C.

§ 1677j(b) (dealing with circumvention of existing antidumping

duty orders) and 19 C.F.R. § 351.225(h) (providing for

Commerce’s issuance of scope rulings, under existing antidumping

duty orders, for “products completed or assembled in other

foreign countries”).57

            As Kyocera acknowledges, however, these provisions

apply to circumstances where an order with a defined scope is

already in effect,58 whereas here Commerce was defining the scope

merchandise’ must be in the same country as the merchandise that
is the subject of the investigation.”) (footnote omitted).
56See infra Discussion Sections IV & VI; Solar II PRC Slip Op.,
Slip Op. 16-56, Consol. Ct. No. 15-00067, ECF No. 98,
at Discussion Section IV.
57   Kyocera’s Br., ECF Nos. 29 & 30, at 11-16.
58See id. at 14; 19 U.S.C. § 1677j(b)(1)(A)(i) (providing that
this provision applies to “merchandise imported into the United
States [that] is of the same class or kind as any merchandise
                                             (footnote continued)
Consol. Ct. No. 15-00066                                     Page 21

of an order prior to its imposition.   Although Kyocera argues

that this distinction is immaterial,59 the distinction is in fact

significant.   Here, Commerce is fashioning the foundational

scope of a proceeding, before the imposition of the order,

rather than extending an existing order to cover new merchandise

so as to address circumvention of an order’s pre-existing scope.

19 U.S.C. § 1677j(b) and 19 C.F.R. § 351.225(h) are therefore

inapposite to the specific issues presented here.

     D.   Congress Did Not Bind Commerce To Always Use The
          Substantial Transformation Test To Establish the
          Origin of Products Manufactured in Multiple Countries.

          Finally, Congress did not require Commerce to continue

to use its substantial transformation test60 when determining the

produced in a foreign country that is the subject of . . . an
antidumping duty order [that is already] issued”) (emphasis
added); 19 C.F.R. § 351.225(h) (noting that this regulatory
provision applies once an antidumping duty order “is [already]
in effect”).
59See Kyocera’s Br., ECF Nos. 29 & 30, at 14 (arguing that “the
same reasoning applies” regardless of whether Commerce is
initially establishing an origin rule for a class of merchandise
in which products are manufactured in more than one country, or
whether the agency is subsequently asked to cover additional
merchandise that was not previously covered by the origin rule
initially established).
60See infra Discussion Section V (discussing Commerce’s
substantial transformation test); Solar II Taiwan I&D Mem.
cmt. 1 at 19-23 (applying the substantial transformation test to
determine the origin of all panels assembled from solar cells
made outside the country-of-assembly, except panels assembled in
China); Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at Background Sections I & II, and
                                             (footnote continued)
Consol. Ct. No. 15-00066                                     Page 22

origin of (and hence the appropriate foreign market for

calculating the comparison normal values for) merchandise

manufactured in multiple countries.61    Because the plain language

of the antidumping statute does not unambiguously prescribe any

specific approach to origin determinations, Commerce may

exercise reasonable discretion in selecting a reasonable method

for such determinations.62    Thus even if SunEdison were correct

that, by revisiting the antidumping law without explicitly

rejecting Commerce’s prior use of the substantial transformation

test to determine the origin of products made in multiple

countries, Congress ratified the agency’s use of this test,63 it

does not follow that the agency is therefore required to always

exercise its discretion in the same way.     That Congress did not

reject the agency’s particular exercise of discretion is not

equivalent to a requirement that the agency must always exercise

Discussion Section IV (providing additional background and
discussion).
61See SunEdison’s Br., ECF Nos. 32 & 33, at 21-25 (making the
argument that “Congress bound Commerce to use the substantial
transformation test to determine the scope of [all] antidumping
duty orders”).
62   See supra Standard of Review Section.
63See SunEdison’s Br., ECF Nos. 32 & 33, at 21-25 (making this
argument).
Consol. Ct. No. 15-00066                                       Page 23

its discretion using the same method.64

IV.    Commerce’s Final Solar II Taiwan Scope Determination Is
       Remanded for Consistency with the Solar II PRC Proceedings.

            Next, SunEdison argues that Commerce’s final Solar II

Taiwan scope determination unlawfully departed from prior

practice without sufficient explanation.65    Both here in Solar II

Taiwan and in Solar II PRC, Commerce established two different

origin rules for solar panels, depending on where they are

assembled.66    As this Court has already ruled with regard to the

64See, e.g., Nakornthai, 32 CIT at 1276, 587 F. Supp. 2d at 1307
(“Commerce has discretion to change its policies and practices
as long as they are reasonable and consistent with their
statutory mandate and may adapt its views and practices to the
particular circumstances . . . at hand, so long as the agency’s
decisions are explained and supported by substantial evidence on
the record.”) (quotation and alteration marks and citation
omitted). SunEdison’s argument regarding the Statement of
Administrative Action (“SAA”), SunEdison’s Br., ECF Nos. 32
& 33, at 24 (arguing that the SAA requires Commerce to always
use the substantial transformation test to determine the origin
of products manufactured in multiple countries) (quoting Uruguay
Round Agreements Act, SAA, H.R. Doc. No. 103–316 (1994) at 844,
reprinted in 1994 U.S.C.A.A.N. 4040 (“Outside of a situation
involving circumvention of an antidumping duty order, a
substantial transformation of a good in an intermediate country
would render the resulting merchandise a product of the
intermediate country rather than the original country of
production.”)), is unpersuasive for the same reason. That the
SAA accepts “substantial transformation” as sufficient to
determine country-of-origin does not mean that it requires this
test as necessary for that purpose.
65   See SunEdison’s Br., ECF Nos. 32 & 33, at 12-13, 21-22.
66See Solar II Taiwan I&D Mem. cmt. 1 at 23 (“[S]olar modules
assembled in the PRC using Taiwanese cells are within the scope
of, and therefore subject to, the [Solar II PRC] investigations
                                             (footnote continued)
Consol. Ct. No. 15-00066                                    Page 24

Solar II PRC proceedings, in doing so, Commerce did not provide

sufficient explanation for (1) departing from the agency’s prior

practice of establishing a single consistent origin rule for all

products within a single class or kind of merchandise;

(2) treating similarly-situated products differently; and

(3) departing from the agency’s prior practice of calculating

the foreign like product’s normal value in the market where the

majority of production of the subject merchandise took place.67

          Because the final Solar II Taiwan scope incorporates

the Solar II PRC exception for solar panels assembled in China –

which exempts all such panels from the otherwise generally-

applicable rule that the origin of solar panels is determined by

the origin of their constituent cells68 – these same concerns are

also implicated here.69    Accordingly, Commerce’s final Solar II

as Chinese modules . . . . This is in contrast to cells from
Taiwan which are used in the assembly of solar modules in other
countries . . ., [which] are considered Taiwanese in origin, and
are within the scope of this [Solar II Taiwan] investigation.”)
(footnote omitted); Solar II PRC Slip Op., Slip Op. 16-56,
Consol. Ct. No. 15-00067, ECF No. 98, at Background Section II
& Discussion Section IV.
67Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at Discussion Section IV.
68See, e.g., Solar II Taiwan I&D Mem. cmt. 1 at 24 (“[T]he solar
cell determines the country of origin, unless manufactured into
a module, laminate or panel in the PRC.”).
69The Government’s additional reliance here on Certain Softwood
Lumber Products from Canada, 67 Fed. Reg. 15,545 (Dep’t Commerce
Apr. 2, 2002) (notice of final affirmative countervailing duty
                                             (footnote continued)
Consol. Ct. No. 15-00066                                  Page 25

Taiwan scope determination must be remanded for the same reasons

as those elaborated in the court’s prior opinion,70 to ensure

that the agency’s approach in these proceedings is consistent.

determination and final negative critical circumstances
determination) (“Softwood Lumber from Canada”), in support of
the proposition that “[s]uch exclusions [as the exception from
the general origin rule for panels assembled in China] are
common,” Def.’s Resp. in Opp’n to Pls.’ Rule 56.2 Mots. for J.
on the Agency R., ECF Nos. 44 (conf. version) & 45 (pub.
version), at 33 (citing Softwood Lumber from Canada, 67 Fed.
Reg. at 15,547), is unpersuasive. In that case, Commerce
exempted softwood lumber products made in certain Canadian
Provinces (referred to as the “Maritime Provinces”) from its
countervailing duty investigation, Softwood Lumber from Canada,
67 Fed. Reg. at 15,547 (citing Certain Softwood Lumber Products
from Canada, 66 Fed. Reg. 40,228 (Dep’t Commerce Apr. 2, 2001)
(amendment to the notice of initiation of countervailing duty
investigation)), due to “unique circumstances,” 66 Fed. Reg.
at 40,228. Specifically, Commerce explained that “[t]hroughout
much of the history of this dispute, the Maritime Provinces have
been exempt from the various actions taken,” and that (unlike
here, with regard to solar panels) “[a]ll parties have generally
recognized that there are unique circumstances associated with
the Maritime Provinces and have supported those exemptions.” Id.
at 40,229. Thus not only was the exemption uncontested and
non-controversial (unlike here), the Softwood Lumber from Canada
example is in any event inapposite to the issue presented here
and in Solar II PRC with respect to the multiple origin rules
established for solar panels. Here the issue is not (as in
Softwood Lumber from Canada) that some products were exempted
from antidumping/countervailing duty liability (for whatever
political reasons), but rather that some products within the
class or kind of merchandise are treated using a different rule
than that which is otherwise generally applicable to products
within that overall class/kind. Softwood Lumber from Canada is
not an example of a case where the agency has established two
different national origin rules for products within the same
class or kind of merchandise.
70See Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at Discussion Section IV.
Consol. Ct. No. 15-00066                                    Page 26

V.   Commerce’s Determination that Solar Cells Are Not
     Substantially Transformed When Assembled Into Panels Is
     Supported by Substantial Evidence.

          Next, Plaintiff Kyocera argues that the Taiwanese

cells used to assemble Kyocera’s solar panels in Mexico are

substantially transformed in Mexico, such that they cannot be

assessed antidumping liability as products of Taiwan.71

          Here, as in Solar I PRC, Commerce employed the

substantial transformation test that is the agency’s “usual

starting point” when deciding which country’s foreign market

should provide the basis for the antidumping liability of

products produced in multiple countries.72   Using this test,

Commerce found that (1) solar cells and panels are within the

same class or kind of merchandise; (2) solar panel assembly does

not change the nature or use of the product’s essential

component, the solar cell; and (3) solar panel assembly does not

constitute substantial or sophisticated processing of the

constituent solar cells.73   Accordingly, Commerce concluded that,

71See Kyocera’s Br., ECF Nos. 29 & 30, at 18-23; see also id.
at 7.
72Solar II Taiwan I&D Mem. cmt. 1 at 18; compare id. at 19-21,
with Solar I PRC Scope Clarification Mem., Consol. Ct.
No. 15-00067, ECF No. 58-3 at Tab 1 Ex. 2, at 8 (unchanged in
Solar I PRC AD I&D Mem. cmt. 1 at 6-7).
73Solar II Taiwan I&D Mem. cmt. 1 at 19-21 (explicitly also
relying on the analysis conducted for the same class/kind of
merchandise in Solar I PRC).
Consol. Ct. No. 15-00066                                       Page 27

“consistent with [the] determination in Solar I [PRC],” panel

assembly does not substantially transform the constituent solar

cells so as to change the cells’ country-of-origin.74

            Kyocera argues that Commerce should have instead

concluded that solar cells are substantially transformed when

assembled into panels in Mexico, such that a solar panel’s

country-of-origin for antidumping purposes should be the country

in which the panel is assembled, rather than the country where

the constituent cells are produced.75    But Kyocera does not

directly challenge the factors that Commerce has chosen to use

for determining whether components produced in a country

different from where they are then incorporated into a finished

product are so transformed in the exporting country as to

justify an assessment of antidumping liability based on normal

values calculated in the market of ultimate assembly, rather

74See id.; see also Solar I PRC Scope Clarification Mem.,
Consol. Ct. No. 15-00067, ECF No. 58-3 at Tab 1 Ex. 2, at 8
(“[W]here solar cell production occurs in a different country
from solar module assembly, the country-of-origin of the solar
modules/panels is the country in which the solar cell was
produced.”) (unchanged in Solar I PRC AD I&D Mem. cmt. 1
at 6-7); Solar II PRC AD I&D Mem. cmt. 1 at 15 (“[Commerce]
determined in [Solar I PRC] that the solar cell [is] the
essential active component of the module, [and] that assembly of
cells into modules [does] not constitute substantial
transformation such that the assembled module could be
considered a product of the country of assembly . . . .”)
(citation omitted).
75   See Kyocera’s Br., ECF Nos. 29 & 30, at 7, 18-23.
Consol. Ct. No. 15-00066                                       Page 28

than the market of component production.76

               Instead of making an argument about the reasonableness

of the factors of analysis that Commerce actually employed here,

Kyocera argues that Commerce should have used a different test,

analogizing this case to country-of-origin analyses undertaken

by different agencies in contexts unrelated to antidumping.77

But Customs’ country-of-origin determinations, made pursuant to

and in furtherance of entirely different statutory authority,

are inapposite to the issue presented here.78

76   See id.
77See id. at 19-21 (arguing that Commerce should have used the
country-of-origin test applied by the predecessor to U.S.
Customs & Border Protection (“Customs”) in Koru N. Am. v. United
States, 12 CIT 1120, 701 F. Supp. 229 (1998), enforcing
country-of-origin marking requirements under 19 U.S.C. § 1304
(1982), see Koru, 12 CIT at 1125-26, 701 F. Supp. at 233-34);
id. at 22-23 (arguing that Texas Instruments, Inc. v. United
States, 681 F.2d 778 (CCPA 1982), in which the court reviewed
Customs’ interpretation of 19 C.F.R. § 10.177(a) (1982),
relating to country-of-origin determinations for purposes of the
U.S. Generalized System of Preferences, see Texas Instruments,
681 F.2d at 781-82, constitutes “binding authority” in this
case).
78See Certain Cold-Rolled Carbon Steel Flat Products from
Argentina, 58 Fed. Reg. 37,062, 37,065 (Dep’t Commerce July 9,
1993) (notice of final determination of sales at less than fair
value) (“Cold-Rolled Steel from Argentina”) (explaining that the
statutory provisions governing Customs’ country-of-origin
determinations are separate from those governing Commerce’s
antidumping determinations, such that imported products may be
determined by different agencies to have different origins for
different statutory purposes); see also, e.g., Wax & Wax/Resin
Thermal Transfer Ribbon from the Republic of Korea, 69 Fed. Reg.
17,645, 17,648 (Dep’t Commerce Apr. 5, 2004) (notice of final
                                             (footnote continued)
Consol. Ct. No. 15-00066                                     Page 29

          Here, Commerce exercised its discretion to use the

test that it had previously established for determining which

country will be used to calculate normal values for antidumping

duty assessment when products are manufactured in multiple

countries.79   Kyocera neither addresses this particular analysis

nor makes any specific argument as to why it was not reasonable

determination of sales at not less than fair value) (“Ribbon
from Korea”) (“As [Commerce] has stated on numerous occasions,
[Customs] decisions regarding substantial transformation and
customs regulations . . . are not binding on [Commerce], because
we make these decisions with different aims in mind (e.g.,
anticircumvention).”) (citation omitted); Stainless Steel Round
Wire from Canada, 64 Fed. Reg. 17,324, 17,327 (Dep’t Commerce
Apr. 9, 1999) (notice of final determination of sales at less
than fair value) (“[W]e reiterate that the disciplines of the
[World Trade Organization] Agreement on Rules of Origin that are
currently in effect under Article 2 of the Agreement simply do
not require us to apply the country-of-origin determinations
made by the Customs Service when making determinations in
[antidumping] proceedings.”).
79See Solar II Taiwan I&D Mem. cmt. 1 at 19 (relying on Issues
& Decision Mem., Glycine from India, A-533-845, Investigation
(Mar. 28, 2008) (adopted in 73 Fed. Reg. 16,640 (Dep’t Commerce
Mar. 28, 2008) (notice of final determination of sales at less
than fair value)) (“Glycine from India”) at cmt. 5); see Glycine
from India cmt. 5 at 5-6 (“The Department applies, as
appropriate, the following criteria in determining whether
substantial transformation occurs, thereby changing a product’s
country of origin [for antidumping purposes]: 1) whether the
processed downstream product falls into a different class or
kind of product when compared to the upstream product,
2) whether the essential component of the merchandise is
substantially transformed in the country of exportation,
and 3) the extent of processing.”) (citing Ribbon from Korea,
69 Fed. Reg. at 17,647; Erasable Programmable Read Only Memories
(EPROMs) from Japan, 51 Fed. Reg. 39,680, 39,692 (Dep’t Commerce
Oct. 30, 1986) (final determination of sales at less than fair
value)).
Consol. Ct. No. 15-00066                                   Page 30

for the agency to apply its usual test in this case.80   Nor does

Kyocera present any argument, or point to any record evidence,

to suggest that Commerce’s conclusions in applying the three

factors of its substantial transformation test81 to the evidence

here82 do not comport with a reasonable reading of the

evidentiary record.83

80   See Kyocera’s Br., ECF Nos. 29 & 30, at 18-23.
81See supra note 79 (quoting and providing relevant citations
for Commerce’s statement of the factors employed in its
substantial transformation test).
82See supra note 73 and accompanying text (summarizing and
providing relevant citation for Commerce’s evidentiary
findings).
83See supra Standard of Review Section. Kyocera attempts to
analogize this case to Diamond Sawblades Mfrs.’ Coalition
v. United States, Slip Op. 13-130, 2013 WL 5878684 (CIT Oct. 11,
2013), Kyocera’s Br., ECF Nos. 29 & 30, at 21-22, where the
court affirmed Commerce’s determination that, with respect to
the class/kind of merchandise containing diamond sawblades, “the
essential quality of the [finished] product is not imparted
until the [components] are attached to create a finished
[diamond sawblade],” Diamond Sawblades, 2013 WL 5878684 at *10-
11. But the court’s unrelated decision that Commerce reasonably
weighed the particular evidentiary record in a different case,
concerning a different class/kind of merchandise, has no bearing
on whether Commerce’s factual determinations with respect to the
products in this case are reasonably supported by the specific
evidentiary record presented here. And to the extent that
Kyocera simply invites the court to re-weigh the evidence to
conclude that the process of panel assembly does substantially
transform the solar cells used in panel production,
see Kyocera’s Br., ECF Nos. 29 & 30, at 20-23, it is not the
court’s providence to do so. See, e.g., Jiangsu Jiasheng
Photovoltaic Tech. Co. v. United States, __ CIT __,
121 F. Supp. 3d 1263, 1272 (2015); Pakfood Pub. Co. v. United
States, 34 CIT 1122, 724 F. Supp. 2d 1327, 1348 (2010).
Consol. Ct. No. 15-00066                                     Page 31

            Accordingly, this case presents no basis to disturb

Commerce’s factual findings that (1) solar cells and panels are

within the same class or kind of merchandise; (2) solar panel

assembly does not change the nature or use of the product’s

essential component, the solar cell; and (3) solar panel

assembly does not constitute substantial or sophisticated

processing of the constituent solar cells.84     Nor do the parties

present a basis to disturb the agency’s consequent conclusion

that the cell is not substantially transformed in the process of

panel assembly so as to change the cell’s country-of-origin,

pursuant to Commerce’s usual substantial transformation test in

the antidumping context.

VI.    Assessment of Antidumping Duties Based on the Full Value of
       Solar Panels Assembled in Third Countries from Taiwanese
       Cells

            Plaintiffs also challenge Commerce’s decision to apply

antidumping duties to the full value of solar panels assembled

in other countries from cells produced in Taiwan, rather than

only the value of the constituent Taiwanese cells.85     But as

84   Solar II Taiwan I&D Mem. cmt. 1 at 19-21.
85SunEdison’s Br., ECF Nos. 32 & 33, at 10, 54-56; Kyocera’s
Br., ECF Nos. 29 & 30, at 8, 15-16, 25-26; see Solar II Taiwan
I&D Mem. cmt. 1 at 24 n.80 (“[W]ith regard to [the] argument
that [Commerce] should take into consideration the processing
done in the country that produces the cell and the country that
produces the module, laminate or panel, and then only apply
                                             (footnote continued)
Consol. Ct. No. 15-00066                                  Page 32

explained in the Solar II PRC opinion, Commerce previously had a

reasonable policy of applying antidumping duties to the full

value of merchandise that is manufactured in part in countries

other than the subject country, because the statute requires

that Commerce assess such duties “in an amount ‘equal to the

amount by which the foreign market value [now referred to as

‘normal value’] of the merchandise [i.e., the entire finished

product] exceeds the United States price of the merchandise.’”86

[antidumping] duties to the portion of the processing that was
done in Taiwan, we disagree. Solar modules assembled in third-
countries using Taiwanese solar cells are covered by the scope
of the [Solar II Taiwan] investigation, no matter the amount of
processing done in the third country. Thus the full value of
these solar modules [is] subject to . . . applicable antidumping
duties.”).
86Cold-Rolled Steel from Argentina, 58 Fed. Reg. at 37,065
(quoting predecessor to 19 U.S.C. § 1673e (requiring assessment
of antidumping duties “equal to the amount by which the normal
value of the merchandise exceeds the export price (or
constructed export price) of the merchandise”)); see also Large
Newspaper Printing Presses and Components Thereof, Whether
Assembled or Unassembled, from Germany, 61 Fed. Reg. 38,166,
38,171 (Dep’t Commerce July 23, 1996) (notice of final
determination of sales at less than fair value) (“LNPPs from
Germany”) (“[A]ny interpretation [of the law] which sought to
limit the application of antidumping duties . . . to the foreign
content [attributable solely to a particular country] would be
inconsistent with [Commerce]’s statutory mandate to assess
antidumping duties on the extent to which the normal value . . .
(previously referred to as ‘foreign market value’) exceeds the
export price (previously referred to as ‘United States price’).
Application of antidumping duties only on [a particular
country’s partial] processing or content portion of the import
might mean that the margin of dumping would not be fully
offset.”) (citing Certain Corrosion-Resistant Carbon Steel
Products from Canada, 58 Fed. Reg. 37,099 (Dep’t Commerce
                                             (footnote continued)
Consol. Ct. No. 15-00066                                       Page 33

As Commerce had previously explained, because the foreign market

value of the finished foreign like product is not necessarily

subdivisible, “[a]pplication of antidumping duties only on [a

particular country’s partial] processing or content portion of

the import might mean that the margin of dumping would not be

fully offset.”87

            But as also discussed in the Solar II PRC opinion,

this policy of assessing antidumping duties on the full value of

finished products was also coupled with Commerce’s policy of

calculating normal value using foreign like products in the

country where most of the essential production of the subject

merchandise took place.88       Because the statute requires a fair

comparison between the U.S. export price of the subject

merchandise and the normal value of the foreign like product,89

Commerce had, prior to its decisions in Solar II PRC and

Solar II Taiwan, reasonably assessed antidumping duties on the

July 9, 1993) (final determination of sales at less than fair
value), aff’d, In the Matter of Certain Corrosion-Resistant
Carbon Steel Products from Canada, USA-93-1904-03 (Binational
Panel under the United States-Canada Free Trade Agreement
Oct. 31, 1994)); Solar II PRC Slip Op., Slip Op. 16-56, Consol.
Ct. No. 15-00067, ECF No. 98, at 32-35, 47-48.
87   LNPPs from Germany, 61 Fed. Reg. at 38,171.
88Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at 31-33, 38-39, 42-44.
89   19 U.S.C. § 1677b(a)(1).
Consol. Ct. No. 15-00066                                    Page 34

full value of finished products after calculating dumping

margins using foreign normal values from the same market as that

where most of the actual manufacturing of the subject

merchandise occurred.90

            Given this policy, Commerce reasonably determined to

assess antidumping duties pursuant to the Solar II Taiwan order

on the full value of the solar panels produced/imported by the

Plaintiffs here, because it is undisputed that at least fifty

percent of the production costs of Plaintiffs’ solar panels were

incurred in the production of the panels’ constituent cells in

Taiwan.91

90Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at 43-44.
91See SunEdison’s Br., ECF Nos. 32 & 33, at 10, 54-56 (arguing
that Commerce “must limit the collection of antidumping duty
deposits and assessments to the value of Taiwanese-origin
[solar] cells in the module,” without disputing that the
majority of a solar panel’s production costs are incurred in the
production of the constituent cells); Kyocera’s Br., ECF Nos. 29
& 30, at 5, 8, 15-16, 25-26 (essentially same). Kyocera makes
an argument regarding the value added by panel assembly as
compared with the market value of the individual cells,
Kyocera’s Br., ECF Nos. 29 & 30, at 5, 16, but as Commerce has
explained, the agency is concerned with where the costs of
production are incurred, rather than percentages of value added,
because “we are primarily concerned with where [most of] the
actual manufacturing is occurring.” LNPPs from Germany, 61 Fed.
Reg. at 38,168; see also Cold-Rolled Steel from Argentina,
58 Fed. Reg. at 37,065 (explaining that antidumping liability is
not susceptible to subdivision using the market values of a
finished product’s constituent parts, because “[antidumping]
duties are not an assessment against value,” but are rather
“determined by the amount of [ultimate] price discrimination
                                             (footnote continued)
Consol. Ct. No. 15-00066                                    Page 35

            But as the court also held in Solar II PRC, Commerce

deviated from its prior policy by determining, in Solar II PRC

and also here in Solar II Taiwan, that solar panels assembled in

China from cells produced elsewhere are to be assessed

antidumping duties based on a comparison to normal values

calculated for China, rather than the market where most of the

production of the panels (i.e., cell-production) took place.92

Because Commerce neither discussed nor reconciled this aspect of

its Solar II PRC and Solar II Taiwan scope decisions with the

agency’s prior policy and reasoning, remand is necessary for the

agency to do so.93    The outcome of these remand proceedings will

bear directly on the reasonableness of Commerce’s approach to

antidumping duty assessment here.

            Commerce’s Solar II PRC exception for solar panels

assembled in China from non-Chinese cells (which is incorporated

. . ., not by the value of the good”). In any event, even the
evidence regarding the percentage of value added by panel
assembly that Kyocera relies on does not dispute that a majority
of the value of a solar panel resides in the constituent cells.
See Kyocera’s Br., ECF Nos. 29 & 30, at 5 (citing [Kyocera’s]
Req. for Scope Determination re Solar Prods. from Mexico,
Certain Crystalline Silicon Photovoltaic Products from Taiwan,
A-583-853, Investigation (Sept. 15, 2014), reproduced in App. to
Pl.’s Rule 56.2 Mem. in Supp. of J. on the Agency R., ECF Nos.
34 (conf. version) & 35 (pub. Version) at App. 2, at 4).
92Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct.
No. 15-00067, ECF No. 98, at 38-39, 45-46.
93   Id.; see supra Discussion Section IV.
Consol. Ct. No. 15-00066                                     Page 36

into the Solar II Taiwan scope94) seemingly abandons the agency’s

reasonable prior policy, and thereby removes that policy’s

explanatory power with respect to Commerce’s decision here.    In

the absence of such explanation, Commerce’s conclusory statement

that antidumping duties will be assessed pursuant to Solar II

Taiwan on the full value of solar panels assembled in third

countries from Taiwanese cells simply because such panels “are

covered by the scope of the [Solar II Taiwan] investigation, no

matter the amount of processing done in the third country,”95 is

by itself insufficient to address Plaintiffs’ arguments.96

            Thus how Commerce addresses this concern on remand in

94   See, e.g., Solar II Taiwan I&D Mem. cmt. 1 at 23.
95   Id. at 24 n.80.
96See Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-
00067, ECF No. 98, at 24-25 (noting that it is well-established
that the scope of an antidumping order is defined by two
separate inquiries – (1) is the product within the relevant
class/kind of merchandise? and (2) did the product originate in
the country covered by the order?) (relying on Cold-Rolled Steel
from Argentina, 58 Fed. Reg. at 37,065 (relied on by Commerce in
Solar II Taiwan I&D Mem. cmt. 1 at 18 n.52); 3.5” Microdisks and
Coated Media Thereof from Japan, 54 Fed. Reg. 6433 (Dep’t
Commerce Feb. 10, 1989) (final determination of sales at less
than fair value) (relied on in Cold-Rolled Steel from Argentina,
58 Fed. Reg. at 37,065); and Solar II Taiwan I&D Mem. cmt. 1
at 18 (“In determining the scope of the investigation,
[Commerce] must not only address . . . the products intended to
be covered by the scope, but also determine the country-of-
origin of the solar products at issue.”)). In the absence of
the explanatory power of its prior policy, Commerce’s
explanation here appears to conflate these two separate
inquiries.
Consol. Ct. No. 15-00066                                     Page 37

Solar II PRC, and here, will also have implications for the

reasonableness of its decision with respect to this issue.

VII. Commerce’s Treatment of Sales of Taiwanese Cells to Third-
     Country Panel Assemblers For Export to the United States

            Finally, SunEdison challenges Commerce’s treatment of

respondents’ “sales to third countries for which [the Taiwanese

solar cell producers/exporters] ha[d] knowledge that the

merchandise was ultimately destined for the United States.”97       A

significant proportion of such sales, however, appear to have

been sales of Taiwanese solar cells to panel assemblers in

China,98 which Commerce specifically excluded as non-subject

merchandise pursuant to the determinations that are remanded

here and in Solar II PRC.99    The court will therefore defer its

97SunEdison’s Br., ECF Nos. 32 & 33, at 4 (quoting [Commerce’s]
Quantity & Value Questionnaire, Certain Silicon Photovoltaic
Products from Taiwan, A-583-853, Investigation (Jan. 29, 2014),
reproduced in [Pub.] App. to Br. of Pl. [SunEdison] in Supp. of
Pl.’s Mot. for J. Upon the Agency R., ECF No. 37-1 at Tab 22,
at Attach. I (“Format for Reporting Quantity & Value of
Sales”)); see id. at 29-49 (presenting this challenge);
see also id. at 27 (“Commerce’s respondent selection was faulty
because Taiwan respondents reported indirect U.S. sales of cells
through China as ‘subject merchandise’ in accordance with
Commerce’s instructions, yet Commerce in the end removed those
transactions as ‘non-subject’ merchandise under its final scope
determination[, and t]his eliminated many of their reported
sales.”) (footnote omitted) & 49-54 (expanding this argument).
98   See SunEdison’s Br., ECF Nos. 32 & 33, at 34-36.
99Solar II Taiwan I&D Mem. cmt. 1 at 23 (“Neither Taiwanese
cells used to assemble solar modules in the PRC nor those solar
modules are covered by the scope of this investigation. Rather,
                                             (footnote continued)
Consol. Ct. No. 15-00066                                    Page 38

review of Commerce’s treatment of sales of Taiwanese cells to

third-country panel assemblers that were reported as destined

for export to the United States until the issues remanded here

are resolved, and the scope of these proceedings is finalized.

                               CONCLUSION

           For all of the foregoing reasons, the Solar II Taiwan

final scope determination is remanded to Commerce for

reconsideration in accordance with this opinion.    Commerce shall

have until August 15, 2016, to complete and file its remand

results.   Plaintiffs shall have until September , 2016, to

file comments, and the agency and Defendant-Intervenor shall

then have until September , 2016, to respond.

           It is SO ORDERED.

                                       _____/s/ Donald C. Pogue_____
                                       Donald C. Pogue, Senior Judge

Dated: June 14, 2016
       New York, NY

solar modules assembled in the PRC using Taiwanese cells are
within the scope of, and therefore subject to, the
[Solar II PRC] AD and CVD investigations as Chinese modules
. . . .”); Solar II PRC AD I&D Mem. cmt. 1 at 28 (“[S]olar cells
assembled in China using solar cells manufactured in Taiwan are
subject to [the Solar II PRC exception for panels assembled in
China from non-Chinese inputs] and not [Solar II Taiwan].”)
(citation omitted); see supra Discussion Sections IV & VI;
Solar II PRC Slip Op., Slip Op. 16-56, Consol. Ct. No. 15-00067,
ECF No. 98, at Discussion Section IV.