Importer Says Commerce Bucked Standard Scope Ruling Procedures in Decision on Aluminum Sheet

A Commerce Department scope ruling on T-series aluminum sheet "would overturn more than 10 years of black-letter law related to scope inquiries," importer Valeo North America told the U.S. Court of Appeals for the Federal Circuit on Jan. 26. Filing an opening brief at the appellate court, Valeo said that Commerce bucked the traditional framework for finding if a good is within the scope of an antidumping and countervailing duty order by extending "beyond the express scope language" to rely on improper (k)(1) factors (Valeo North America v. United States, Fed. Cir. # 24-1189).

The agency said in the scope decision, made on remand at the Court of International Trade, that Valeo's sheet was covered by the AD/CVD orders on common alloy aluminum sheet from China since it is a 3XXX-series core. The importer said that since its goods are heat-treated and not a clad product, they should be excluded from the orders. The trade court sustained the ruling and the agency's weight applied to various industry evidence along with its prior discussion of the heat-treatability of 3XXX-series alloys (see 2311090034).

On appeal, Valeo argued that Commerce's scope ruling implicates the process for issuing scope rulings. The agency's "first obligation is to examine the scope language for ambiguity, while recognizing and interpreting terms consistent with their trade usage," the brief said. As a result, Commerce erred in finding ambiguity in the goods' trade usage, since the orders' scope language "specifies the governing standards."

The orders say that the duties apply to 3XXX-series alloy "as designated by the Aluminum Association." As a result, Commerce should have used the numerical designation system for wrought aluminum and wrought aluminum alloys published by the Aluminum Association as a "definitional source," the company argued. This system, dubbed the Teal Sheets, is the "defining source for designations and chemical composition limits" for wrought aluminum and its alloys and relied on by a host of "standards and specifications globally," the importer said.

Instead of using the Teal Sheets to define the orders' unambiguous scope, the agency "abandoned the Teal Sheets and went on to inexplicably find that the term '3XXX-series' expands to include unregistered alloys when followed by the modifier 'as designated by the Aluminum Association.'" This isn't a supported conclusion since it is at odds with the orders' plain language and the clear conclusion of the Teal Sheets -- the definitional trade usage -- which say that 3XXX-series is limited to registered alloys within the four-digit designations from the Aluminum Association.

In ditching the Teal Sheets, Commerce "improperly found that the word 'designate' is a general term as opposed to an industry term" and "ignored its surrounding language to reach a belabored result inconsistent with the language of the orders," the brief said.

Valeo also challenged Commerce's use of a separate rate application from exporter Jiangsu Alcha Aluminum Co. as a (k)(1) source to "extrapolate a scope determination." The importer said the application wasn't a proper (k)(1) source since it's a ruling that wasn't publicly available at the time the order was issued and is otherwise not public, "coherent" and "contemporaneous."