Court Opinion

ID: 2713703
Source: CourtListenerOpinion
Date Created: 2014-08-05 20:53:14.546077+00
Date Added: 2024-06-11T10:01:35.250104
License: Public Domain

Slip Op. 14-9

             UNITED STATES COURT OF INTERNATIONAL TRADE

MEDLINE INDUSTRIES, INC.,       :
                                :
            Plaintiff,          :    Before: Nicholas Tsoucalas,
                                :            Senior Judge
     v.                         :
                                :    Court No.: 13-00070
UNITED STATES,                  :
                                :
            Defendant.          :
                                :

                               OPINION

[Plaintiff’s motion for judgment on the agency record is denied.]

                                            Dated: January 29, 2014

          Michael G. Hodes and Lawrence R. Pilon, Hodes Keating &
Pilon, of Chicago, IL, for plaintiff.

          Douglas G. Edelschick, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, of
Washington, DC, for defendant. With him on the brief were Stuart
F. Delery, Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel
on the brief was Scott D. McBride, Attorney, Office of the Chief
Counsel for Trade Enforcement and Compliance, U.S. Department of
Commerce, of Washington, DC.

            Tsoucalas, Senior Judge: Plaintiff Medline Industries,

Inc. (“Medline”) moves for judgment on the agency record contesting

defendant Department of Commerce’s (“Commerce”) Scope Ruling on

Medline’s Hospital Bed End Panel Components (Dec. 21, 2012) (“Scope

Ruling”).    Medline insists that Commerce erroneously determined

that its wooden hospital bed end panel components were within the

scope of the antidumping duty order on wooden bedroom furniture

from the People’s Republic of China (“PRC”). Mem. Supp. Pl.’s Mot.

J. Agency R. at 7 (“Pl.’s Br.”).         Commerce opposes Medline’s
Court No. 13-00070                                             Page 2

motion.     For the following reasons, Medline’s motion is denied.

                              BACKGROUND

            In January 2005, Commerce issued an antidumping duty

order covering wooden bedroom furniture from the PRC.      See Notice

of Amended Final Determination of Sales at Less Than Fair Value and

Antidumping Duty Order, 70 Fed. Reg. 329 (Jan. 4, 2005) (the

“Order”).     Commerce has since modified the scope of the Order,

defining it during Medline’s scope inquiry as follows:

            The product covered by the order is wooden
            bedroom furniture. Wooden bedroom furniture
            is generally, but not exclusively, designed,
            manufactured,   and   offered    for   sale   in
            coordinated groups, or bedrooms, in which all
            of the individual pieces are of approximately
            the same style and approximately the same
            material   and/or   finish.        The   subject
            merchandise is made substantially of wood
            products, including both solid wood and also
            engineered wood products made from wood
            particles, fibers, or other wooden materials
            such as plywood, strand board, particle board,
            and fiberboard, with or without wood veneers,
            wood overlays, or laminates, with or without
            non-wood components or trim such as metal,
            marble, leather, glass, plastic, or other
            resins,   and   whether   or    not   assembled,
            completed, or finished.
                      The subject merchandise includes the
            following items: (1) Wooden beds such as loft
            beds, bunk beds, and other beds; (2) wooden
            headboards for beds (whether stand-alone or
            attached to side rails), wooden footboards for
            beds, wooden side rails for beds, and wooden
            canopies for beds; (3) night tables, night
            stands, dressers, commodes, bureaus, mule
            chests, gentlemen’s chests, bachelor’s chests,
            lingerie    chests,     wardrobes,     vanities,
            chessers,   chifforobes,    and    wardrobe-type
            cabinets; (4) dressers with framed glass
Court No. 13-00070                                          Page 3

           mirrors that are attached to, incorporated in,
           sit on, or hang over the dresser; (5)
           chests-on-chests, highboys, lowboys, chests of
           drawers, chests, door chests, chiffoniers,
           hutches, and armoires; (6) desks, computer
           stands, filing cabinets, book cases, or
           writing tables that are attached to or
           incorporated in the subject merchandise; and
           (7) other bedroom furniture consistent with
           the above list.
                     The scope of the order excludes the
           following items: (1) seats, chairs, benches,
           couches, sofas, sofa beds, stools, and other
           seating furniture; (2) mattresses, mattress
           supports (including box springs), infant
           cribs, water beds, and futon frames; (3)
           office furniture, such as desks, stand-up
           desks, computer cabinets, filing cabinets,
           credenzas, and bookcases; (4) dining room or
           kitchen furniture such as dining tables,
           chairs, servers, sideboards, buffets, corner
           cabinets, china cabinets, and china hutches;
           (5) other non-bedroom furniture, such as
           television cabinets, cocktail tables, end
           tables, occasional tables, wall systems, book
           cases, and entertainment systems; (6) bedroom
           furniture made primarily of wicker, cane,
           osier, bamboo or rattan; (7) side rails for
           beds made of metal if sold separately from the
           headboard and footboard; (8) bedroom furniture
           in which bentwood parts predominate; (9)
           jewelry armories; (10) cheval mirrors; (11)
           certain metal parts; (12) mirrors that do not
           attach to, incorporate in, sit on, or hang
           over a dresser if they are not designed and
           marketed to be sold in conjunction with a
           dresser as part of a dresser-mirror set; (13)
           upholstered beds and (14) toy boxes.

Scope Ruling at 2–3 (internal footnotes omitted).

           Medline imports hospital bed end panel components from

the PRC.    See Scope Ruling Request at 1 (Nov. 12, 2012).     In

November 2012, it filed a scope ruling request concerning wooden
Court No. 13-00070                                                   Page 4

headboards and footboards made for its “Alterra™ Model FCE1232

steel-framed hospital beds.”      Id. at 1–2.     In its request, Medline

argued that the end panels were outside the scope of the Order

because hospital beds are classified differently than bedroom

furniture    and   were   not   discussed    in   the   petition    or   the

investigation underlying the Order.         Id. at 5–7.

            In the Scope Ruling, Commerce determined that Medline’s

wooden end panel components were within the scope of the Order

because “the language of the scope explicitly includes wooden

headboards and footboards.”      Scope Ruling at 8.       Although it found

the language of the Order to be dispositive, Commerce noted that

its decision was consistent with previous scope rulings in which it

determined that wooden end panels for metal-framed beds were within

the scope of the Order. Id. at 6–8 (discussing Final Scope Ruling:

Sunrise Medical Inc. (Sept. 29, 2005) (“Sunrise Ruling”) and Scope

Ruling on University Loft Company’s Request (Dec. 13, 2011)).

Commerce also rejected Medline’s argument that its end panel

components were not bedroom furniture, noting that it previously

found that wooden end panels for beds made for use in long term

care facilities were within the scope of the Order because “the

scope covers all wooden bedroom furniture meeting the written

description of the merchandise, and this written description is

dispositive, regardless of tariff classifications.”                Id. at 7

(citing Sunrise Ruling at 11).
Court No. 13-00070                                                  Page 5

             Medline contests the Scope Ruling, arguing that Commerce

impermissibly expanded the scope of the Order to include non-

bedroom furniture and failed to perform an adequate analysis in

accordance     with    the    regulations   governing    scope   inquiries.

See Pl.’s Br. at 8–23.

                    JURISDICTION and STANDARD OF REVIEW

            The Court has jurisdiction pursuant to 28 U.S.C. §

1581(c) (2006) and section 516A(a)(2)(B)(vi) of the Tariff Act of

1930,1 as amended, 19 U.S.C. § 1516a(a)(2)(B)(vi) (2006).

            The Court must uphold Commerce’s scope determination

unless it is “unsupported by substantial evidence on the record, or

otherwise     not     in     accordance   with   law.”      19   U.S.C.   §

1516a(b)(1)(B)(i). When reviewing a scope ruling, the Court grants

“significant deference to Commerce’s interpretation of its own

orders.”     Allegheny Bradford Corp. v. United States, 28 CIT 830,

842, 342 F. Supp. 2d 1172, 1183 (2004).          “However, Commerce cannot

‘interpret’ an antidumping order so as to change the scope of that

order, nor can Commerce interpret an order in a manner contrary to

its terms.”     Duferco Steel, Inc. v. United States, 296 F.3d 1087,

1095 (Fed. Cir. 2002) (citing Eckstrom Indus., Inc. v. United

States, 254 F.3d 1068, 1072 (Fed. Cir. 2001)).

     1
       All further references to the Tariff Act of 1930 will be to
the relevant provisions of Title 19 of the United States Code, 2006
edition, and all applicable supplements thereto.
Court No. 13-00070                                                 Page 6

                                 DISCUSSION

             “In a scope ruling proceeding ‘a predicate for the

interpretive process is language in the order that is subject to

interpretation.’”      Arcelormittal Stainless Belg. N.V. v. United

States, 694 F.3d 82, 84 (Fed. Cir. 2012) (quoting Tak Fat Trading

Co. v. United States, 396 F.3d 1378, 1383 (Fed. Cir. 2005)).          “If

Commerce determines that the language at issue is not ambiguous, it

states what it understands to be the plain meaning of the language,

and the proceedings terminate.”      Id.; see Mid Continent Nail Corp.

v. United States, 725 F.3d 1295, 1302 (Fed. Cir. 2013).

             However, “[i]f the language is ambiguous, Commerce must

next consider the regulatory history, as contained in the so-called

‘(k)(1) materials.’”       Id.    The “(k)(1) materials” include the

“descriptions of the merchandise contained in the petition, the

initial   investigation,    and    the   determinations    of   [Commerce]

(including prior scope determinations) and the [International Trade

Commission].”    19 C.F.R. § 351.225(k)(1) (2013).        While “[r]eview

of the petition and the investigation may provide valuable guidance

as to the interpretation of the final order[,]” these materials

“cannot substitute for language in the order itself.”             Duferco

Steel, 296 F.3d at 1097.

             “If the (k)(1) materials are not dispositive, Commerce

then considers the (k)(2) criteria.”         Mid Continent Nail, 725 F.3d

at   1302.       The   (k)(2)     criteria     include:   the   “physical
Court No. 13-00070                                                       Page 7

characteristics of the product,” the “expectations of the ultimate

purchasers,” the “ultimate use of the product,” the “channels of

trade in which the product is sold,” and the “manner in which the

product is advertised and displayed.”        19 C.F.R. § 351.225(k)(2).

            As noted above, Commerce found that the language of the

Order was unambiguous — “the language of the scope explicitly

includes wooden headboards and footboards.” Scope Ruling at 8. As

Medline’s     end    panel   components   are    wooden     headboards      and

footboards, Commerce concluded that they were within the scope of

the Order.    Id.

            Medline acknowledges that its end panel components are

wooden furniture as described in the scope language, but disputes

Commerce’s interpretation of the scope language with regard to the

term “bedroom.”      See Pl.’s Br. at 8.        According to Medline, the

scope language is unambiguous: the Order covers “wooden bedroom

furniture,”    and   therefore   the   merchandise   must    be   used    in   a

bedroom.    Id. at 10–11.    Insisting that its hospital bed end panel

components are not made for use in a bedroom, Medline argues that

Commerce unreasonably expanded the scope of the Order.            Id. at 11.

Medline contends that Commerce ignored the term “bedroom” in its

analysis, and therefore failed to consider the use of the end panel

components.    Id. at 11–12.     Furthermore, Medline argues that even

if the term “bedroom” was ambiguous, Commerce’s analysis of the

(k)(1) materials focused too narrowly on prior scope determinations
Court No. 13-00070                                                       Page 8

and ignored evidence contrary to its conclusion.             Id. at 13–23.

            Medline’s     alternative      interpretation    of    the    scope

language is unpersuasive.          Although Medline repeatedly refers to

instances in which the Order mentions “bedroom” furniture, Medline

does not identify any language in the Order limiting or defining

the term “bedroom” in such a way as to unambiguously exclude the

merchandise under review.          See Pl.’s Br. at 10–13.        In fact, the

order does not further define the term “bedroom.” See Scope Ruling

at 2–4.     Rather, it explicitly identifies the types of wooden

furniture that are subject to the order, and those types that are

excluded.    Id. at 2–3.    Accordingly, Medline cannot show that its

end panel components are per se outside the scope of the Order

simply in virtue of their use in hospital rooms.

            Furthermore, contrary to Medline’s insistence, the Scope

Ruling is consistent with the plain terms of the Order.                The scope

language begins: “The product covered by the [Order] is wooden

bedroom furniture.”       Scope Ruling at 2.       As mentioned, the scope

language does not further define “bedroom,” but it does include a

list of “subject merchandise” covered by the Order as well as a

list   of   products    excluded    from   the   scope.     Id.   at    2–3.   It

specifically states that “[t]he subject merchandise includes . . .

(2) wooden headboards for beds[,] . . . wooden footboards for beds,

wooden side rails for beds, and wooden canopies for beds.”                Id. at

2.   The list of subject and non-subject merchandise indicates that
Court No. 13-00070                                                Page 9

Medline’s wooden end panels — headboards and footboards — are of a

type of merchandise the Order covers.          Moreover, the language

contradicts   Medline’s   argument   that   Commerce   was   required   to

consider the use of the merchandise in its scope inquiry.        Because

the Order specifically identifies wooden headboards and footboards

as subject merchandise, Commerce’s interpretation of the scope

language was reasonable.    See Arcelormittal, 694 F.3d at 84.

          Given that Commerce reasonably concluded that the scope

language was unambiguous, the court need not address Medline’s

claim that Commerce’s (k)(1) analysis was unreasonable.         See id.;

Mid Continent Nail, 725 F.3d at 1302.

                              CONCLUSION

          For the foregoing reasons, the Scope Ruling is supported

by substantial evidence and otherwise in accordance with law.

Judgment will be entered accordingly.

                                            /s/ Nicholas Tsoucalas
                                              Nicholas Tsoucalas
                                                 Senior Judge
Dated: January 29, 2014
       New York, New York