Cheng Shin Rubber Ind. Co. v. United States , 2023 CIT 16 ( 2023 )

Slip Op. No. 23-16
UNITED STATES COURT OF INTERNATIONAL TRADE
CHENG SHIN RUBBER IND. CO.
LTD.,
Plaintiff,
Vv.
UNITED STATES,
Defendant,
and
UNITED STEEL, PAPER AND
FORESTRY, RUBBER,
MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND SERVICE
WORKERS INTERNATIONAL
UNION, AFL-CIO, CLC,
Defendant-Intervenor.
Before: Stephen Alexander Vaden,
Judge
Court No. 21-00398
OPINION AND ORDER
[Affirming Commerce’s Final Determination. ]
Dated: February 138, 2023
Amrietha Nellan, Winton & Chapman PLLC, of Washington, DC, for Plaintiff Cheng
Shin Rubber Ind. Co. Ltd. With her on the brief were Jeffrey Michael Winton, Michael
J. Chapman, and Vi N, Mai.
Court No. 21-00398 Page 2
Elizabeth Anne Speck, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant United States. With
her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney
General, Patricia M. McCarthy, Director, Commercial Litigation Branch, Vania Y.
Wang, Of Counsel, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce.
Elizabeth J. Drake, Schagrin Associates, of Washington, DC, for Defendant-
Intervenor United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union, AFL-CIO, CLC. With her on the
brief was Roger B. Schagrin.
Vaden, Judge: Vladimir Lenin is reputed to have said, “When it comes time
to hang the capitalists, they will vie with each other for the rope contract.”! Plaintiff
Cheng Shin Rubber Industry Co. (Cheng Shin) comes before the Court to complain
that it did not receive the benefit of its bargain. It negotiated with the United
Steelworkers Union (the Union) for an exclusion for certain spare tires made for light
trucks from Taiwan under investigation by the Department of Commerce
(Commerce). Having agreed on acceptable language with the Union, Cheng Shin
expected its tires would qualify and be excluded from any duties Commerce imposed.
Instead, Commerce found that Cheng Shin’s tires did not qualify for the exclusion
i The Oxford Essential Quotations provides the following version and possible origin of the attribution:
The capitalists will sell us the rope with which to hang them.
attributed to Lenin, but not found in his published works in this form;
I. U. Annenkov, in ‘Remembrances of Lenin’ includes a manuscript
note attributed to Lenin: ‘They [capitalists] will furnish credits which
will serve us for the support of the Communist Party in their countries
and, by supplying us materials and technical equipment which we lack,
will restore our military industry necessary for our future attacks
against our suppliers. To put it in other words, they will work on the
preparation of their own suicide’, in Novyt Zhurnal/New
Review September 1961
OXFORD ESSENTIAL QUOTATIONS (Susan Ratcliffe, ed, 6th ed. 2018),
https://bit.ly/3DBtoSt.
Court No. 21-00398 Page 3
and therefore fell within the scope of the resulting antidumping order. Cheng Shin
asserts that Commerce’s determination is not supported by substantial evidence. The
Court disagrees. Commerce’s final determination is supported by the very answers
Cheng Shin gave to the questions Commerce proffered. Like Vladimir Lenin’s
apocryphal capitalists, Cheng Shin was done-in by its own hand. And given the
deferential standard of review, that Commerce may have been able to reach a
different result on this record does not allow the Court to compel the agency to do so.
Cheng Shin’s Motion for Judgment on the Agency Record will be DENIED and
Commerce’s determination will be AFFIRMED.
BACKGROUND
Cheng Shin is a Taiwanese producer and exporter of passenger vehicle and
light truck tires. Comments on CBP Data and Respondent Selection (Respondent
Selection) at 1-2 (July 2, 2020), J.A. at 82,464~-65, ECF No. 61; see Passenger Vehicle
and Light Truck Tires from the Republic of Korea, Taiwan, and Thailand:
Antidumping Duty Orders and Amended Final Affirmative Antidumping Duty
Determination for Thailand Final Determination (Final Determination), 86 Fed. Reg.
38,011, 38,012 (July 19, 2021).
The products at issue in this case are two of Cheng Shin’s tire models that
must meet the following standards to qualify for exclusion from the investigation:
(5) tires designed and marketed exclusively as temporary-
use spare tires for light trucks which, in addition, exhibit
each of the following physical characteristics:
Court No. 21-00398 Page 4
(a) The tires have a 255/80R17, 265/70R17, or
265/70R16 size designation;
(b) “Temporary-use Only” or “Spare” is molded into
the tire’s sidewall;
(c) the tread depth of the tire is no greater than 6.2
mm; and
(d) Uniform Tire Quality Grade Standards (“UTQG”)
ratings are not molded into the tire’s sidewall with
the exception of 265/70R17 and 255/80R17 which
may have UTQG molded on the tire sidewalll[.]
Final Determination, 86 Fed. Reg. at 38,013.
I. The Disputed Final Determination
The Union filed its petition with Commerce on May 13, 2020, and Commerce
began an antidumping investigation into passenger vehicle and light truck tires from
Korea, Taiwan, Thailand, and Vietnam the following month. Passenger Vehicle and
Light Truck Tires from the Republic of Korea, Taiwan, Thailand, and the Socialist
Republic of Vietnam: Initiation of Less-Than-Fair-Value Investigations (Initiation of
Investigation), 85 Fed. Reg. 38,854 (June 29, 2020). Cheng Shin requested to be
named as a mandatory respondent in the investigation on July 2, 2020. Respondent
Selection at 1-2, J.A. at 82,464-65, ECF No. 61.2 Commerce selected Cheng Shin and
another company not a party to this case as mandatory respondents. Selection of
Respondents for Individual Examination at 7 (July 28, 2020), J.A. at 82,584, ECF No.
61.
2 Cheng Shin was represented by different counsel during the investigation and proceedings before
Commerce.
Court No. 21-00398 Page 5
Commerce’s initiation notice explained that, when listing product
characteristics for control numbers (CONNUMs), it “attempts to list the most
important physical characteristics first and the least important characteristics last.”
Initiation of Investigation, 85 Fed. Reg. at 38,855.83 Here, Commerce listed tire
service type first, meaning it was the most important characteristic that Commerce
would consider in this investigation. Jd. at 38,859. On July 20, 2020, Cheng Shin
filed Characteristic Comments in which it proposed adding a fourth product
characteristic code under the tire service type field. Cheng Shin’s Product
Characteristic Comments (Characteristic Comments) at 2, J.A. at 4,347, ECF No. 60.
Tire service types are based on the Tire and Rim Association’s (TRA)4 Classifications
and included the following three categories: 01 for passenger car, 02 for light truck,
and 03 for special trailer. Jd. Cheng Shin proposed a fourth type: “O4=Light Truck
Full Size Spare (with reduce tread depth) [stc].” Jd. It wanted this fourth category
added because temporary-use light truck tires were included in the investigation but
had no distinct TRA Yearbook entry. Jd. at 3. Because its spare tires “are physically
3 The listing of characteristics in a hierarchy of importance is Commerce’s standard procedure for
constructing control numbers. See Union Steel v. United States, 823 F. Supp. 2d 1346, 1349-50 (CIT
2012) (“A ‘CONNUM is a contraction of the term ‘control number,’ and is simply Commerce[’s term]
for a unique product (defined in terms of a hierarchy of specified physical characteristics determined
in each antidumping proceeding).”) (quoting plaintiffs’ briefing).
4 The Tire and Rim Association is an American organization that establishes and promulgates
“interchangeability standards for tires, rims and allied parts for the guidance of manufacturers and
users of such products, designers and manufacturers of motor vehicles, aircraft and other wheeled
vehicles and equipment, and governmental and other regulatory bodies.” Petition for Imposition of
Antidumping and Countervailing Duties at Ex. 7, J.A. at 1,247, ECF No. 60. “The YEAR BOOK
contains all TRA Standards and related information approved by the Association for tires, rims and
allied parts for ground vehicles.” Jd. at 1248.
Court No. 21-00398 Page 6
distinct from other subject merchandise,” Cheng Shin argued that the additional
service type was necessary. Id.Cheng Shin also submitted its Scope Comments to Commerce on that same
date and suggested that Commerce create an exclusion for temporary-use light truck
tires. See Cheng Shin Scope Comments (Scope Comments) at 2-5, J.A. at 4,369-72,
ECF No. 60.5 This would complement the proposed initial scope, which contained an
exclusion for tires “designed and marketed exclusively as temporary-use spare tires
for passenger vehicles[.|” Initiation of Investigation, 85 Fed. Reg. at 38,860. Cheng
Shin attached drawings of the temporary-use light truck tires for which it sought an
exclusion and that were “[t]he tires subject to these scope comments.” Scope
Comments at 3, J.A. at 4,370, ECF No. 60. Cheng Shin proposed that Commerce add
the following exclusion: “Excluded from the scope of these investigations are light
truck spare tires that are stamped on the sidewall of the tire as temporary-use.” Id.
at 7, It argued that Commerce should create this exclusion because light truck spare
tires and light truck tires for everyday use have different physical characteristics (1.e.,
different tread depth), consumer expectations, end uses, and advertising. Id. at 7—
11.
On July 30, 2020, the Union filed a rebuttal to Cheng Shin’s proposed changes
to the product characteristics of the subject merchandise under investigation.
5 Because of a numbering error in the Joint Appendix, the page range in which this document falls is
repeated in an earlier section of the appendix such that there are two page 4,369s, 4,370s, etc.
Court No. 21-00398 Page 7
Petitioner’s Product Characteristics Comments Rebuttal (Product Characteristics
Rebuttal) at 1, J.A. at 6,088, ECF No. 60. The Union rejected Cheng Shin’s proposed
addition of a fourth service type for temporary-use light truck tires because the “only
indication of difference” between these tires and other subject tires was the tread
depth. Jd. at 10. It explained that tread depth was “already accounted for” in a later
number comprising the 15-digit CONNUM and creating a new category “would create
opportunities for manipulation.” fd. Most importantly, “[a]s service type is the first
characteristic in the hierarchy, reporting tires as different service types would
normally be determinative on matching.” Jd. at 10 n.36.
On August 5, 2020, Commerce issued its initial antidumping questionnaire to
Cheng Shin. See Request for Information Antidumping Duty Investigation Cheng
Shin (Antidumping Questionnaire), J.A. at 6,778, ECF No. 60. In its accompanying
letter, Commerce explained that it was “still evaluating the information necessary
for reporting the control number and physical characteristics,” t.e., Cheng Shin and
other respondents’ requests to modify the products characteristics of the
investigation. Letter Accompanying Antidumping Questionnaire at 2 (Aug. 5, 2020),
J.A. at 6,775, ECF No. 60 (emphasis removed). Therefore, until the product
characteristics were finalized, Commerce would not assign due dates for Sections B
(Sales in the Home Market or to Third Countries), C (Sales to the United States), and
D (Costs of Production/Constructed Value) of the questionnaire because the due dates
would depend on Commerce’s determination. Id.
Court No. 21-00398 Page 8
Thirteen days later, on August 18, 2020, Commerce rejected Cheng Shin’s
proposed fourth category. See Dep’t of Commerce Product Characteristics at Attach.,
J.A. at 6,937, ECF No. 60. The first — and most important — field of the CONNUM,
therefore, listed three possible choices for respondents: “0O1=Passenger Car,”
“0O2=Light Truck,” and “O3=Special Trailer.” Id. Tread depth was the eleventh of
fifteen total fields in the product characteristics used to construct the CONNUM. Id.
at 6,943. Commerce instructed Cheng Shin to “use these product characteristics in
any response to sections B through D of the [antidumping] questionnaires issued in
these investigations.” Id. at 6,935.
On September 25, 2020, Cheng Shin filed its Section B response addressing
sales in its home market and in third countries. Cheng Shin Section B & D
Responses, J.A. at 85,331, ECF No. 61. On September 29, 2020, Cheng Shin filed its
Section C response detailing its sales to the United States. Cheng Shin Section C
Response, J.A. at 88,652, ECF No. 61. In Cheng Shin’s sales databases that it
submitted in its Section B and C responses, it chose the number “1,” meaning
passenger car, for the TRA Yearbook service type of the tires at issue here. Id. at Ex.
C-4; Cheng Shin’s Section B Response at B-11-12, J.A. at 85,3852-53, ECF No. 61.
Commerce had not yet decided on its exclusion request for temporary-use light truck
tires, but the Union had warned two months earlier that the selection of tire service
types “would normally be determinative.” Product Characteristics Rebuttal at 10
n.36, J.A. at 6,097 ECF No, 60; Cheng Shin’s Section B Response at B-11—-12, J.A. at
Court No. 21-00398 Page 9
85,352-53, ECF No. 61. Cheng Shin later explained that it chose the designation for
passenger car because the tires were developed under the European Tyre and Rim
Technical Organization’s (ETRTO)* standards and the tires “fit into the passenger
car section of the ETRTO standard.” In Lieu of Verification Questionnaire Response
(Questionnaire Response) at VE-12, J.A. at 97,833, ECF No. 61. In its final brief
before Commerce, Cheng Shin stated that the TRA Yearbook would also classify its
tires as passenger tires. Administrative Case Brief at 6 n.10, J.A. at 100,574, ECF
No. 61
On September 25, 2020, the Union filed rebuttal comments to Cheng Shin’s
request for an exclusion for temporary-use light truck tires. Petitioner’s Response on
Light Truck Spare Tires (Petitioner’s Scope Rebuttal) at 1-2 , J.A. at 8,596-97, ECF
No. 60. The Union supported creating an exclusion but argued that Cheng Shin’s
“request should be modified to better prevent circumvention and improve
administrability[.]” Jd. Cheng Shin’s requested exclusion for temporary-use light
truck tires had only one requirement — having temporary-use stamped on the
sidewall — but the exclusion for spare passenger tires had multiple design and
marketing requirements drawn, in part, from the TRA Yearbook. Id. at 4-5. Because
there was no separate TRA Yearbook listing for temporary-use light truck tires, the
Union proposed combining the requirements of design and marketing exclusivity
6 ETRTO is the European equivalent of the TRA.
Court No. 21-00398 Page 10
from the exclusion for spare passenger tires with “some of the distinguishing
characteristics highlighted by Cheng Shin”:
(5) tires designed and marketed exclusively as temporary-
use spare tires for light trucks which, in addition, exhibit
each of the following physical characteristics:
(a) are of a 255/80R17, 265/70R17, or 265/70R16 size
designation;
(b) “Temporary-use Only” is molded into the tire’s
sidewall;
(c) the tread depth of the tire is no greater than 6.2
mm; and
(d) Uniform Tire Quality Grade Standards (“UTQG”)
ratings are not molded into the tire’s sidewall[.]
Id. at 5 (emphasis removed). The Union explained that “the first requirement of this
exclusion .. . limits the exclusion to tires that are intended and designed to be used
as temporary spares, as Cheng Shin avers the tires in its request are,” Id.
After further consultation, the parties reached agreement on draft language,
which Cheng Shin proposed to Commerce with the Union’s consent. See Cheng Shin
Revised Scope Exclusion Language (Revised Exclusion) at 1 (Dec. 10, 2020), J.A. at
12,293, ECF No. 60; Petitioner’s Response on Cheng Shin’s Scope Request at 1 (Dec.
11, 2020), J.A. at 12,800, ECF No. 60. Cheng Shin’s final proposed language largely
tracked the Union’s counterproposal:
Excluded from the scope are tires designed and marke|[te]d’?
exclusively as “temporary-use” or “spare” tires for light
trucks which, in addition, exhibit each of the following
physical characteristics:
7 Cheng Shin’s initial submission contained this erratum that Commerce corrected. See Preliminary
Scope Memorandum at 11, J.A. at 12,897, ECF No. 60.
Court No, 21-003898 Page 11
(a) are of a 265/70R17, 255/80R17, 265/70R16, 245/70R17,
245/75R17, 265/70R18, or 265/70R18 size designation;
(b) “Temporary-use Only” or “Spare” is molded into the tire’s
sidewall;
(c) the tread depth of the tire is no greater than 6.2 mm; and
(d) Uniform Tire Quality Grade Standards (“UTQG”) ratings are
not molded into the tire’s sidewall with the exception of
265/70R17 and 255/80R17 which may have UTGC molded on the
tire sidewall.
Revised Exclusion at 2, J.A. at 12,294, ECF No. 60. The Union, in agreeing to the
revised language, stated that it was agreeing to an exclusion only for “certain
specifically defined light truck spare tires[.]” Petitioner's Response on Cheng Shin’s
Scope Request at 1, J.A. at 12,300, ECF No. 60. Commerce adopted this exclusion as
proposed, following its “practice of providing ample deference to the petitioner with
respect to the products for which it seeks relief in these investigations[.]” Preliminary
Scope Memorandum at 11, J.A. at 12,897, ECF No. 60.
On December 30, 2020, Commerce issued its Preliminary Decision
Memorandum (PDM) and included Cheng Shin’s temporary-use light truck tires
within the proposed order’s scope. See PDM at 12-15, J.A. at 12,857-60, HCE No. 60.
Cheng Shin filed comments asserting this was a ministerial error on Commerce’s part
on January 5, 2021. Ministerial Error Comments at 2, J.A. at 94,700, ECF No. 61.
Cheng Shin argued that its temporary-use light truck tires should have been excluded
because they met all the parameters laid out in the agreed-upon exclusion. Id. at 3—-
5. Cheng Shin further explained that it had previously notified Commerce that the
excluded tires had been included in its sales files because Commerce had not yet
Court No. 21-00398 Page 12
decided on Cheng Shin’s exclusion request when it was required to submit this data.
Id. at 3. Commerce rejected Cheng Shin’s arguments, explaining that Cheng Shin’s
tires did not meet the exclusion’s terms because Cheng Shin’s U.S. sales database
listed them as having the tire service type “passenger car.” Ministerial Error
Memorandum at 6 (Feb. 3, 2021), J.A. at 94,789, ECF No. 61. Commerce understood
this listing to show that the tires were not “designed and marketed exclusively as
temporary-use spare tires for light trucks.” Jd. at 6.
On February 25, 2021, Commerce issued a questionnaire in lieu of on-site
verification to Cheng Shin. Questionnaire in Lieu of Verification (Questionnaire),
J.A. at 94,814, ECF No. 61. The Questionnaire investigated Cheng Shin’s ministerial
error comments and asked Cheng Shin to “provide a detailed explanation as to how
these CONNUMS [the two disputed tire models] meet the exclusionary criteria.” fd.
at 94,818-19. Chen Shin submitted its questionnaire responses on March 5, 2021.
Questionnaire Response, J.A. at 97,821, ECF No, 61. Cheng Shin explained that a
manufacturer ordered the tires as temporary-use light truck tires for specific light
truck vehicle models. Jd. at VE-10-11. It provided the purchase contracts and
technical drawings that the buyer approved before the beginning of production. Id.
at VE-11, Ex. VE-7A. Cheng Shin also provided the buyer’s email confirmation,
requested on February 24, 2021, that the tires were exclusively designed and
marketed as temporary-use light truck tires. Id. at Ex. VE-7B.
Court No. 21-00398 Page 13
Cheng Shin then explained why it had nonetheless chosen “passenger car” as
the tire service type, which was the primary reason for Commerce’s decision that the
tires were within the scope. Ministerial Error Memorandum at 6, J.A. at 94,739, ECF
No. 61. It stated that the tires were developed under the European Tyre and Rim
Technical Organization’s (ETRTO) standards; and under those standards, they were
classified as passenger car tires. Questionnaire Response at VE-12, J.A. at 97,833,
ECF No. 61. Thus, “Cheng Shin’s R&D Division assigned internal product codes to
these tire models accordingly.” fd. Cheng Shin concluded this by stating that “these
tire models meet the standards of passenger tire[s], but [the customer] ordered and
designed them exclusively as spare tire [sic] of light truck [stc].” Jd. at VE-13.
On March 24, 2021, Cheng Shin again argued for an exclusion for its tires in
its administrative case brief before Commerce. Administrative Case Brief at 4-8,
J.A. at 100,572—76, ECF No. 61. It reiterated its arguments from the Ministerial
Error Comments that it had met all the exclusion’s requirements. Id. at 5-6. Cheng
Shin also reaffirmed that the TRA Yearbook would classify its tires as passenger
tires. Id. at 6n.10 (“To clarify, if these models had been developed under the standard
33)
of TRA, they would also be classified as ‘passenger tire.””). It once again stated that
the tires met the standards of passenger tires. Jd. at 6-7 (“In short, these tire models
mect the standards of passenger tires, but [the customer] ordered and designed these
tires exclusively as spare tires of light trucks.”).
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Commerce rejected Cheng Shin’s arguments in its Issues and Decisions
Memorandum (IDM), which Commerce adopted in its Final Determination. See Final
Determination, 86 Fed. Reg. at 38,011; IDM at 19, J.A. at 15,976, ECF No. 60. It
emphasized that the exclusion required that the tires be “designed and marketed
exclusively as temporary-use spare tires for light trucks.” IDM at 19, J.A. at 15,976,
ECF No. 60 (quoting the exclusion language) (emphasis removed). Commerce found
that Cheng Shin had consistently described the tires in its submissions as not falling
under the service type for light trucks. Id. Significantly, Commerce explained that
Cheng Shin admitted that “the sizes and characteristics of these tires fit within both
service types for light truck spare tires and for the other service type as reported.”
Id. at 20.
Commerce also addressed Cheng Shin’s argument that the tires were in fact
designed and produced exclusively to meet its customer’s request for temporary-use
light truck tires. Id. It found that the purchase agreements and business proprietary
information did not show design exclusivity but further evidenced a dual-use. Id.
Cheng Shin’s customer confirmation was unpersuasive because the “email was not
generated as part of Cheng Shin’s normal course of business[.]” Final Calculation
Memorandum, J.A. at 100,653, ECF No. 61. Cheng Shin sent the email requesting
confirmation on February 24, 2021, during the pendency of the investigation and only
one day before the in-lieu of verification questionnaire was sent. Id. The technical
drawings and purchase agreements demonstrated that, under both European and
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American standards, the tires had a potential dual-use as passenger tires and
temporary-use light truck tires. Jd. The Final Calculation Memorandum cited a
load chart included in Cheng Shin’s customer contracts that listed different load
bearing figures for both passenger car tires and light truck tires in support of this
conclusion. Id. Because Commerce concluded that the tires in question had a dual
classification, it determined they are within the scope of the order. See Final
Determination, 86 Fed. Reg. at 38,012; IDM at 19, J.A. at 15,976, ECF No. 60.
Il. The Present Dispute
Plaintiff Cheng Shin filed this action on August 11, 2021, seeking to overturn
Commerce’s decision not to exclude its temporary-use light truck tires. Summons,
ECF No. 1. On February 11, 2022, Cheng Shin filed its Motion for Judgment on the
Agency Record. Pl.’s Mot. for J. on the Agency R. (Pl.’s Mot.), ECF No. 42. Cheng
Shin raises three primary arguments: (1) Its light truck spare tires were exclusively
designed and marketed as such; (2) Commerce’s conclusion to the contrary lacked
substantial evidence; and (8) Commerce’s failure to exclude the tires in question
unlawfully changed the scope of the order. Id. at 3.
Commerce and Defendant-Intervenor responded on April 13, 2022, and April
12, 2022, respectively. Def.’s Resp. to Pl.’s Mot. for J. on the Agency R. (Def.’s Resp.),
ECF No. 53; Def.-Int.’s Resp. to Pl.’s Mot. for J. on the Agency R. (Def.-Int.’s Resp.),
ECF No. 49. Commerce argues that substantial evidence supports its decision that
it did not unlawfully modify the scope of the investigation and that two of Cheng
Court No. 21-00398 . Page 16
Shin’s arguments are barred by administrative exhaustion. Def.’s Resp. at 11, 18, 21,
ECF No. 53. The Union argues that Commerce’s decision was supported by
substantial evidence taken from Cheng Shin’s own submissions to Commerce and
that the scope of the proceeding was never unlawfully modified, as Cheng Shin’s tires
did not meet the terms of the exclusion. Def.-Int.’s Resp. at 7-9, ECF No. 49.
Cheng Shin filed its reply on May 10, 2022, and raised for the first time an
alleged inconsistency between the determination at issue in this case and a
subsequent scope ruling by Commerce. It appended that subsequent scope ruling to
its brief. Pl.’s Reply at 15, ECF No. 58. Cheng Shin also argued that it was unlawful
for Commerce to use the TRA Service Type to find that the tires were not excluded
and that Commerce unlawfully modified the scope by not excluding the specific tires
for which Cheng Shin had negotiated an exclusion, Jd. at 4-6. The Court ordered
Commerce to file a sur-reply addressing Cheng Shin’s arguments regarding the
subsequent scope determination. ECF No. 64. On August 26, 2022, Commerce did
so, arguing that the alleged inconsistency between this ruling and a subsequent scope
ruling was a result of the different records in each case and that Cheng Shin bore the
burden of building the record before the agency. Def.’s Sur-Reply at 2, ECF No. 65.
At oral argument the Court asked the parties whether Cheng Shin had asked
Commerce for advice on how to report the service type for its light truck spare tires.
Oral Arg. Tr. 8:7~11, 29:11-23, ECF No. 76. The parties were unaware of Cheng
Shin’s asking Commerce for advice. Id. at 8:24-9:38, 29:24. After oral argument, the
Court No. 21-00398 Page 17
Court ordered that the parties file letter statements “regarding whether there is
record evidence that Plaintiff Cheng Shin asked Commerce for advice in answering
the question about product characteristics[.]” Minute Order, ECF No. 71. Commerce
and Plaintiff agreed that Cheng Shin never asked Commerce for advice or assistance
in designating the tire service type for the tires in question. See Commerce Resp. to
Court’s Request/Order at 1, ECF No. 73; Pl’s Resp. to Court’s Request/Order and
Def.’s Oct. 5 Letter at 2, ECF No. 74.
JURISDICTION AND STANDARD OF REVIEW
19 U.S.C. § 1516a(a)(2)(B)G) and 28 U.S.C. § 1581(c) grant the Court authority
to review actions contesting antidumping determinations. The Court must sustain
Commerce’s “determinations, findings, or conclusions” unless they are “unsupported
by substantial evidence on the record, or otherwise not in accordance with law[.]” 19
U.S.C. § 1516a(b)(1)(B)G). If they are unsupported by substantial evidence or not in
accordance with the law, the Court must “hold unlawful any determination, finding,
or conclusion found.” Jd. “[T]he question is not whether the Court would have
reached the same decision on the same record[;] rather, it is whether the
administrative record as a whole permits Commerce’s conclusion.” See New American
Keg v. United States, No. 20-00008, 2021 WL 1206153, at *6 (CIT Mar. 28, 2021).
Reviewing agency determinations, findings, or conclusions for substantial
evidence, the Court assesses whether the agency action is reasonable given the record
as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1850-51 (Fed. Cir.
Court No. 21-00398 Page 18
2006); see also Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951) (The
substantiality of evidence must take into account whatever in the record fairly
detracts from its weight.”). The Federal Circuit has described “substantial evidence”
as “such relevant evidence as a reasonable mind might accept as adequate to support
a conclusion.” DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.
Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
DISCUSSION
I, Summary
This case presents the question of whether Commerce’s determination that
Cheng Shin’s tires did not qualify for the exclusion for temporary-use light truck tires
was supported by substantial evidence. Cheng Shin argues that (1) its tires met the
terms of the exclusion, (2) Commerce unlawfully modified the scope of the exclusion,
and (8) the ruling in this case is inconsistent with a subsequent scope ruling. PL.’s
Reply at 4-6, 15, ECF No. 58. Commerce counters that (1) record evidence supports
its decision, (2) it did not unlawfully modify the scope of the exclusion, and (8) the
subsequent scope ruling is irrelevant and not on the record of this proceeding. Def.’s
Resp. at 11, 21, ECF No. 58; Def.’s Sur-Reply at 2, ECF No. 65.
First, Cheng Shin provided Commerce with the substantial evidence necessary
to find that its tires did not meet the negotiated exclusion. The exclusion required
that tires be “designed and marketed exclusively” as temporary-use light truck tires.
Cheng Shin twice affirmed to Commerce that its tires met the standards of passenger
Court No. 21-00398 Page 19
tires, including during the verification process when Cheng Shin was on full notice of
the concerns Commerce had. Cheng Shin bore the responsibility of making the record
before Commerce. Cheng Shin’s other evidentiary objections, based on the
inapplicability of the TRA Yearbook to its tires and alternative conclusions Commerce
could reach are also unavailing because they improperly request that the Court
reweigh the evidence.
Second, Cheng Shin’s claim that Commerce unlawfully modified the scope of
the exclusion fails. After placing evidence on the record that its tires were passenger
car tires under the TRA Yearbook and the ETRTO standards, Cheng Shin proceeded
to negotiate an exclusion that required exclusivity of design and marketing. During
these negotiations, the Union never stated that Cheng Shin’s tires met this
requirement. Cheng Shin found itself in an unfortunate position, having negotiated
an agreement its prior submitted evidence made it hard to satisfy. Buyer's remorse
is insufficient for the Court to overturn Commerce’s decision. Commerce did not
unlawfully modify the scope of the order.
Third, the subsequent scope ruling in which Commerce found that different
Cheng Shin tires qualified for the exclusion is irrelevant. By definition, any
subsequent scope ruling was not on the record before Commerce when it made its
decision. Commerce may only consider the record before it in making its decision. To
consider the later ruling would be legal error. Commerce’s subsequent scope ruling
— in a separate proceeding with a different record — has no bearing on the outcome
Court No. 21-00398 Page 20
here; therefore, Cheng Shin’s third argument is similarly unavailing. Because
Commerce’s decision is supported by substantial evidence on the record and is not
otherwise contrary to law, the Court AFFIRMS Commerce’s Final Determination.
Il. Analysis
A. Substantial Evidence Supports Commerce’s Decision
The first issue is whether substantial evidence supports Commerce's
determination that Cheng Shin’s tires were not exclusively designed and marketed
as temporary-use light truck tires. The first section of the parties’ agreed-upon
exclusion limits its application to “tires designed and marketed exclusively as
‘temporary-use’ or ‘spare’ tires for light trucks[.]” Preliminary Scope Memorandum
at 11, J.A. at 12,897, ECF No. 60. Cheng Shin argues that Commerce erroneously
concluded that its tires were not exclusively marketed and designed as temporary-
use light truck tires because Commerce misunderstood its submissions. Pl.’s Mot. at
20-27, ECF No. 42. Specifically, Cheng Shin claims that its selection of the passenger
car service type was because of the timing of the investigation and was not meant to
signify that the tires were designed and marketed as passenger tires. Id, at 22-23.
It also argues that Commerce erroneously interpreted a load bearing chart as
showing that the tire models had a dual-use when the chart only showed the various
load capacities of passenger and light truck tires. Jd. at 25-26. Finally, Cheng Shin
points to its customer agreements identifying the tires as spare tires for specific light
truck models in support of its position. Id. at 21. Commerce counters that Cheng
Court No. 21-00398 Page 21
Shin identified the tires during the investigation as passenger tires under both the
ETRTO standards and the TRA Yearbook. Def.’s Resp. at 12, ECF No. 53. It did so
even after the exclusion negotiations ended and Commerce had flagged the issue in
its Ministerial Error Memorandum, Ministerial Error Memorandum at 6, J.A. at
94,739, ECF No. 61. Commerce found that Cheng Shin’s tires did not meet the
requirements of the exclusion because Cheng Shin “clearly states that the sizes and
characteristics of these tires fit within both service types for light truck spare tires
and the other service type as reported.” IDM at 20, J.A. at 15,977, ECF No. 60. Thus,
the tives had a potential dual-use as passenger tires and temporary-use light truck
tires. Id. Because Commerce reasonably concluded that the tires were not “designed
and marketed exclusively” as temporary-use light truck tires, substantial evidence
supports its determination. See Administrative Case Brief at 6—7, J.A. at 100,574—
75, ECF No. 61; Questionnaire Response at VE-13, J.A. at 97,834, ECF No. 61.
Under the substantial evidence standard, “[i]t is not for this court on appeal to
reweigh the evidence or to reconsider questions of fact anew.” Trent Tube Div.,
Crucible Materials Corp. v. Avesta Sandvik Tube, 975 F.2d 807, 815 Wed. Cir. 1992);
see Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 13876 (Fed. Cir.
2015) (“While Appellants invite this court to reweigh this evidence, this court may
not do so.”). A determination is supported by substantial evidence when it rests on
“more than a mere scintilla,’ as well as evidence that a ‘reasonable mind might accept
as adequate to support a conclusion.” Dongtai Peak Honey Indus. Co., Lid. v. United
Court No. 21-00398 Page 22
States, 777 F.3d 1343, 1349 (Fed. Cir. 2015) (quoting Consol. Edison Co. v. NLAB,
305 U.S. 197, 229 (1938)). “The burden of creating an adequate record lies with the
interested parties and not with Commerce.” Qingdao Sea-Line Trading Co., Ltd. v.
United States, 766 F.8d 1378, 1886 (Fed. Cir. 2014) (citing QVD Food Co., Lid. v.
United States, 658 F.3d 1318, 13824 (Fed. Cir. 2011)).
Cheng Shin argues that it was faced with a no-win situation because it had to
report its tires under a TRA Yearbook listing even though the tires had no such
listing. Pl.’s Reply at 8-9, ECF No. 58. But this argument is inconsistent with Cheng
Shin’s own admissions during the investigation. In its administrative case brief,
Cheng Shin affirmed that the tires would accurately be classified as passenger tires
under the TRA Yearbook. Administrative Case Brief at 6 n.10, J.A. at 100,574, ECF
No. 61 (“To clarify, if these models had been developed under the standard of TRA
[sic], they would also be classified as ‘passenger tire.”). Cheng Shin further noted
that it developed the tires under a separate Kuropean standard where they were also
classified as passenger ties. Jd. at 6. It said without any qualification that “these
tires meet the standards of passenger tires.” Id. at 6-7.
Faced with these admissions during the investigation, Cheng Shin claimed at
oral argument that its own submissions to Commerce were “irrelevant information.”
Oral Arg. Tr. 53:9-18, ECF No. 76. Cheng Shin’s submissions during Commerce’s
investigation are of course relevant because “[t]he burden of creating an adequate
record lies with the interested parties, not with Commerce.” Qingdao, 766 F.3d at
Court No. 21-00398 Page 23
1386. And Commerce is statutorily required to base its decision on the record before
it. See 19 U.S.C. §§ 1516a(b)(1)—-(2). Commerce is obligated to consider all the
evidence that fairly supports or detracts from its conclusion, and Cheng Shin’s own
submissions provided support for Commerce’s conclusion in this case. See Butte
Cnty., Cal. v. Hogen, 613 F.3d 190, 194 (D.C. Cir, 2010) (noting that an agency cannot
“reufus[e] to consider evidence bearing on the issue before it”). Commerce reasonably
construed Cheng Shin’s admissions as supporting the conclusion that “these tires
have an intended dual use and, thus, could not have been designed and marketed
exclusively for light trucks.” IDM at 20, J.A. at 15,977, ECF No. 60. Indeed, it would
likely have been unreasonable had Commerce taken Cheng Shin’s suggestion and
ignored the company’s repeated claims that its tires were designed using passenger
car standards. Compare Administrative Case Brief at 6-7 n.10, J.A. at 100,574-75,
ECF No. 61 (noting that the tires “would also be classified as ‘passenger tire”), with
Allegheny Ludlum Corp. v. United States, 112 F. Supp. 2d 1141, 1165 (CIT 2000)
(noting that it would be legal error for Commerce to fail “to consider or discus record
evidence which, on its face, provides significant support for an alternative
conclusion”).
Cheng Shin’s argument in its briefs and before Commerce attempts to have it
both ways. Contrary to its statements before Commerce, Cheng Shin now asserts
that, when selecting a tire service type, “none of [them] strictly applied” to Cheng
Shin’s tires; but during the investigation, it stated that the TRA Yearbook classified
Court No. 21-00398 Page 24
the tires as passenger tires. Compare Pl.’s Reply at 9, ECF No. 58, with
Administrative Case Brief at 6 n.10, J.A. at 100,574, ECF No. 61. In its reply brief,
however, Cheng Shin concedes that it chose the designation passenger tire “based on
the physical characteristics of the tires, and not based on intended use[.]”® Pl.’s Reply
at 11, ECF No. 58. Cheng Shin thus seeks to drive a wedge between the physical
characteristics of the tires as indicated by their TRA Yearbook designation and their
“intended use.” Id.Nothing in the language of the exclusion requires Commerce to ignore the
physical characteristics of the tires that correspond to the TRA Yearbook
classification. Commerce reasonably construed the exclusive design requirement to
extend to the classification and corresponding physical characteristics of the tires in
question. Without some relation to the physical characteristics, the design
requirement would collapse into the exclusive marketing requirement and have no
independent meaning. Compare Revised Exclusion at 2, J.A. at 12,294, ECF No. 60
(“Excluded from the scope are tires designed and marke[te]d exclusively as
“temporary-use” or “spare” tires for light trucks... .”), with Williams v. Taylor, 529
U.S. 362, 404 (2000) (noting that, when interpreting legal texts, “[i]Jt is... a cardinal
eee
principle” to “give effect, if possible, to every clause and word”) (quoting Inhabitants
8 The Court also notes that Cheng Shin’s representations to Commerce with respect to the tire service
type were inconsistent. In its initial product characteristics comments, it claimed that the tires in
question did not fit under the TRA Yearbook at all and proposed a fourth category of light truck tires
with reduced tread depth. See Characteristic Comments at 3, J.A. at 4,848, ECF No. 60. Then, later
in the investigation, Cheng Shin admitted that the tires would be classified as passenger tires under
the TRA Yearbook. See Administrative Case Brief at 6n.10, J.A. at 100,574, ECF No. 61.
Court No. 21-00398 Page 25
of Montclair Tp. v. Ramsdell, 107 U.S. 147, 152 (1883)), WEBSTER’S THIRD NEW INT'L
DICTIONARY (1968) (defining “design” to include “to plan and plot out the shape and
disposition of the parts of and the structural constituents of’), and WEBSTER’S NEW
INT'L DICTIONARY (2d ed. 1956) (“[t]o sketch as a pattern or model”). Cheng Shin does
not offer an alternative interpretation of the words of the exclusion that would give
effect to the word “designed,” see Pl.’s Reply at 11-12, ECF No. 58 (equating “designed
and marketed” solely with intended use), nor does it suggest that Commerce’s
consideration of the tires’ physical characteristics was unreasonable. Cf. PL.’s Mot. at
20, ECF No. 42 (observing only that Commerce’s analysis was “not required by the
scope language,” not that it was impermissible).
Cheng Shin responds that the Union admitted temporary-use light truck tires
have no TRA Yearbook listing; hence, the listing is not relevant to the exclusion. See
PL.’s Reply at 8, ECF No. 58. Although it is true that temporary-use light truck tires
have no special heading under the TRA Yearbook, it is a non-sequitur that Cheng
Shin’s classification of its tires as passenger tires under the TRA Yearbook is
irrelevant. If excluded temporary-use light truck tires have no classification and
Cheng Shin’s tires do have a classification as passenger tires, then that is only further
evidence that they do not qualify for the exclusion.
Cheng Shin advances three other arguments in support of its contention that
Commerce’s decision was not supported by substantial evidence: (1) Commerce
misinterpreted a load chart Cheng Shin included in its customer agreements; (2) the
Court No. 21-00398 Page 26
customer agreements manifest the exclusivity that the exclusion required; and (3) the
tires do not have a dual-use. See Pl’s Mot. at 20-21, 24-26, ECF No. 42. Given
Cheng Shin’s repeated affirmations during the investigation that its tires meet the
standards of passenger tires, Cheng Shin’s other arguments are also unavailing.
Cheng Shin explains that the load capacity chart attached to its sales contracts
“reproduces the standard load capacity at different inflation pressures for tires with
the particulary size dimensions”; therefore, it did not manifest a dual-use. Jd, at 25.
Plaintiff also argues that the customer agreements clearly manifest an intent for its
customer to use the tires exclusively as temporary-use light truck tires. Jd. at 20-27.
But Commerce’s interpretation of the load capacity chart as permitting the tires to
have a dual-use was not clearly erroneous based on the record before it. The chart
shows load and capacity for both passenger and truck tires with no explanation
provided by Cheng Shin. See Questionnaire Response at Exhibit VE-7-A, J.A. at
100,352, ECF No. 61. Similarly, at oral argument, counsel for the Union pointed out
that only one of the contracts Cheng Shen submitted matched the characteristics of
a tire that it sought to have excluded; and the chart for that one contract showed only
load data for passenger cars. See Oral Arg. Tr. 34:5-16, ECF No. 76. Cheng Shin’s
counsel countered that the charts were just generic and that mismatches between the
submitted contracts and the technical drawings of the tires were a result of
discrepancies in the customer’s files. See td, 41:19-24.
Court No. 21-00398 Page 27
This back-and-forth only serves to emphasize that it was Cheng Shin’s burden
— not Commerce’s — to build the record in this case. See QVD, 658 F.3d at 1824.
Cheng Shin’s proffered best evidence fails to point unambiguously in the direction of
a finding that the subject tires “were designed .. . exclusively” as temporary use light
truck tires. Commerce must base its decisions on the record before it, and the record
in this case contains evidence pointing in different directions that Commerce had to
weigh. See 19 U.S.C. §§ 1516a(b)(1)-(2). It is not the role of the Court to reweigh the
evidence. Downhole Pipe, 776 F.3d at 1876. Even assuming that the customer
contracts unambiguously had shown an intent for Cheng Shin’s customer to use the
tires exclusively for light trucks, Cheng Shin’s admissions to Commerce that it
created the tires under a passenger car standard would still provide Commerce with
substantial evidence for its determination that the tires were not designed exclusively
as spare truck tires. Questionnaire Response at VE-12, J.A. at 97,838, ECF No. 61.
Cheng Shin’s attempt to prove now to the Court that the tires are unfit for use
as passenger tires or spare passenger tires is Inconsistent with the repeated
affirmations it made during the investigation that the tires meet the standards of
passenger tires. Cheng Shin cannot use litigation to rewrite the submissions it made
to Commerce during the investigation. Cf, e.g., @VD, 658 F.3d at 1824 CQVD is in
an awkward position to argue that Commerce abused its discretion by not relying on
evidence that QVD itself failed to introduce into the record[.]”); Linyt City Kangfa
Foodstuff Drinkable Co., Lid. v. United States, No. 15-00184, 2016 WL 5122648 at *2
Court No, 21-00398 Page 28
(CIT 2016) (“QVD Foods cannot be read as requiring Commerce to act to ferret out
‘necessary’ information for the record.”). A reasonable mind would have taken Cheng
Shin’s submissions at face value, and that is just what Commerce did. See Oral Arg.
Tr. 58:15-17, ECF No. 76 (The Court: “They put 1 [indicating passenger tire] down
and you took them at their word?” Ms. Speck: “Yes, Your Honor.”). Because “the
court may not substitute its judgment for that of the [agency] when the choice is
3
‘between two fairly conflicting views,” substantial evidence supports Commerce’s
determination. Goldlink Indus. Co. v. United States, 431 F. Supp. 2d 1323, 1326 (CIT
2006) (quoting Universal Camera Corp., 340 U.S. at 488) (alteration in original).
B. Commerce Did Not Unlawfully Modify the Scope of the Order
Cheng Shin claims that Commerce unlawfully modified the scope of the order
because the Union agreed that Cheng Shin’s tires met the requirements of the
exclusion that the two parties had negotiated and submitted to Commerce. Pl.’s Mot.
at 27-28, ECF No. 42 Cheng Shin also argues that the exclusion was specifically
designed to “exclude the . . . temporary-use light truck spare-tire models identified in
Cheng Shin’s initial scope comments.” Id. at 28. Commerce and the Union both deny
that they made any such agreement with respect to the tires in question. Def.’s Resp.
at 21-22, ECF No. 53; Def.-Int.’s Resp. at 14-15, ECF No. 49. The record does not
support Cheng Shin’s assertions. Commerce did not unlawfully modify the scope of
the order.
Court No, 21-00398 Page 29
Commerce has discretion to determine the scope of an order to remedy
unlawful dumping. See Mitsubishi Elec. Corp. v. United States, 898 F.2d 1577, 1582-
83 (Fed. Cir. 1990). Commerce, however, “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) (quoting Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1072 (Fed.
Cir, 2001)); accord Fedmet Res. Corp. v. United States, 755 F.3d 912, 921-22 (Fed.
Cir. 2014). If a question about an order’s scope is “asked and answered during the
underlying investigations,” then that answer cannot be subsequently changed by
Commerce. Fedmet Res., 755 F.3d at 920. As long as these limits are respected,
Commerce “enjoys substantial freedom to interpret and clarify its antidumping
orders.” Novosteel SA v. United States, 284 F.3d 1261, 1269 (Fed. Cir. 2002) (quoting
Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, ‘782 (Fed.
Cir. 1995)).
Cheng Shin cites Fedmet Resources in support of its argument that Commerce
unlawfully changed the scope of the order, but the case is inapposite. Pl.’s Reply at
5, ECF No. 58. In Fedmet Resources, Commerce determined that particular magnesia
alumina carbon bricks were within the scope of an antidumping order even though
the petitioner requesting the order had disclaimed that view in the initial
investigation. 755 F.3d at 914-18. The petitioner had “requested initiation of
antidumping and countervailing duty investigations on imports of certain MCBs
Court No. 21-00398 Page 30
[magnesia carbon bricks] from China and Mexico.” fd, at 914. It distinguished
magnesia carbon bricks from other types of bricks in its petition, prompting
Commerce to clarify whether the petitioner only wanted to focus on magnesia carbon
bricks. fd. The petitioner clarified that the scope of the investigation should be
confined to magnesia carbon bricks only and not extend to magnesia alumina bricks
described in generic terms. Id. at 914-15. After the initial investigation concluded,
Fedmet Resources requested a scope ruling on its magnesia alumina bricks. 755 F.3d
at 916. Despite the original petitioner’s explicitly excluding this category of bricks in
the investigation, Commerce determined that they were within the scope of the
antidumping order. Jd. at 917. The Federal Circuit reversed Commerce’s
determination because the underlying investigation “contain[ed] multiple
representations made by [the petitioner] disclaiming coverage of all [magnesia
alumina carbon] bricks in general.” Id. at 919. Therefore, the question of whether
magnesia alumina carbon bricks were within the scope of the order was “asked and
answered during the underlying investigations.” Jd. at 920.
Fedmet Resources is distinguishable because here the Union negotiated
multiple, specific requirements for the exclusion. See Petitioner Scope Rebuttal at 6,
J.A. at 8,601, ECF No. 60 (“Petitioner requests that if Commerce does grant any
exclusion for light truck temporary spare tires, it include all the requirements
explained above in that exclusion.”). It never agreed to exclude Cheng Shin’s specific
tires; only those tires that could meet each of the negotiated criteria would be
Court No. 21-003898 Page 31
excluded. See id. In Fedmet Resources, by contrast, “the Petitioner said that [it was]
disclaiming coverage of all [magnesia alumina carbon] bricks in general.” Fedmet
Res., 755 F.3d at 919 (emphasis added). It gave a blank check to exclude an entire
product category with no other requirements. [d, Cheng Shin did not find as lenient
a negotiating partner in the Union. Thus, Cheng Shin — unlike the plaintiff in
Fedmet Resources -~- had to meet the specific requirements it negotiated as opposed
to benefitting from a general exclusion for all tires used as temporary-use light truck
tires,
Cheng Shin agreed to this multi-pronged exclusion after it classified its tires
as passenger tires under the TRA Yearbook in its Section B and Section C responses
on September 25, 2020, and September 29, 2020, respectively. Cheng Shin’s Section
B Response at B-11-12, J.A. at 85,352-53, ECF No. 61; Section C Response at Exhibit
C-4, J.A. at 88,770—72, ECF No. 61. It placed this information on the record despite
having been warned “reporting tires as different service types would normally be
determinative on matching.” Product Characteristics Rebuttal at 10 n.36, J.A. 6,097,
ECF No. 60. Months later, Cheng Shin agreed to the Union’s revised scope exclusion
language that added the “designed and marketed exclusively” requirement. See
Revised Exclusion (Dec. 10, 2020), J.A. at 12,293-94, ECF No. 60. Cheng Shin agreed
to a narrow exclusion that was in tension with the information it had already placed
on the record. Then, after agreeing to language requiring exclusivity of design, it
twice again affirmed that its tires met the standards of passenger tires.
Court No. 21-00398 Page 32
Administrative Case Brief at 6-7, J.A. at 100,574-75, ECF No. 61; Questionnaire
Response at VE-13, J.A. at 97,834, ECF No. 61.
The Union was careful to state in its rebuttal comments to Cheng Shin’s
exclusion request that Cheng Shin “avers” that its tires meet the exclusivity
requirements. Petitioner's Scope Rebuttal at 5, J.A. at 8,600, ECF No. 60. In its
agreement to the final revised exclusion, the Union stated that “it does not oppose
the request for the exclusion of light truck spare tires if the full language Cheng Shin
has proposed is used.” Petitioner's Response on Cheng Shin’s Scope Request, at 1-2,
J.A. at 12,300-01, ECF No. 60. The Union, therefore, only agreed to the specific
language of the exclusion for light truck spare tires and never the application of that
language to exclude Cheng Shin’s tires. Unlike in Fedmet Resources, the question of
whether the exclusion covered Cheng Shin’s tires was never “asked and answered
during the underlying investigation.” 755 F.3d at 920. Commerce did not unlawfully
modify the scope. Cheng Shin negotiated an exclusion for which its tires did not
qualify based on the record it built before the agency. There is no legal error.
C. The Subsequent Scope Ruling Is Irrelevant
Finally, the Court must address whether to remand so that Commerce can
reconsider its determination based on a subsequent scope ruling. See Pl.’s Reply at
15, ECF No. 58. Cheng Shin appended the results of a subsequent scope ruling to its
reply brief and asserts that Commerce acted unlawfully in this case because the later
ruling granted an exclusion to allegedly similar tire models. Id. at 14-15, 21. Cheng
Court No. 21-00398 Page 33
Shin states that neither Commerce nor the Union objected to Cheng Shin’s failure to
provide a TRA Yearbook classification for the tires in the subsequent scope ruling.
Thus, it claims that the Union’s objections in this case “based on the reported TRA
tire service type... are without merit.” Jd. at 21. Commerce counters that Cheng
Shin placed the TRA Yearbook service type onto the record in this investigation and
did not do so in the subsequent scope ruling. Def.’s Sur-Reply at 2, ECF No. 665.
Commerce also argues that prior administrative decisions do not bind it, and the
different conclusions are by virtue of the different records before the agency in each
investigation. fd. at 3. Because the subsequent decision is not on the record here,
the Court holds Commerce need not have considered it.
Prior scope rulings do not bind Commerce because “each administrative review
is a separate exercise of Commerce’s authority that allows for different conclusions
based on different facts in the record.” Qingdao, 766 F.3d at 1387. However, an
agency must give sufficient reasons for treating similar situations differently. SAF
USA, Inc. v. United States, 263 F.3d 1369, 1382 (Fed. Cir. 2001); accord Torrington
Co. v. United States, 881 F. Supp. 622, 648 (CIT 1995), affd, 127 F.8d 1077 (Fed. Cir.
1997). Commerce’s obligation to explain its different treatment of similar situations
only arises, however, if the inconsistency is on the record and was presented to
Commerce when it made its decision. See Unicatch Indus. Co. v. United States, 539
F. Supp. 8d 1229, 1249 (CIT 2021) (“Without any basis for comparing Commerce’s
purportedly inconsistent decisions, the court finds no reason to remand the issue in
Court No. 21-00398 Page 34
this proceeding.”), “Plaintiffs generally may not supplement th[e] record on judicial
review” with materials from a subsequent administrative action. Hoogovens Staal
BV v. United States, 4 F. Supp. 2d 1218, 1218 (CIT 1998); accord Luoyang Bearing
Factory v. United States, 240 F, Supp. 2d 1268, 1300 n.28 (CIT 2002) (citing
Hoogovens Staal). As such, “potentially inconsistent administrative action in
successive administrative reviews (if challenged), arises in the latter of the two
proceedings, not the former.” Home Prods. Intl, Inc. v. United States, 662 F. Supp.
2d 1360, 1364 (CIT 2009).
A few points quickly illustrate that the subsequent ruling is not relevant to the
resolution of this case. First, the subsequent scope ruling was not on the record before
Commerce when it made its initial decision, and “the issue was not presented to
Commerce in that segment of the proceeding for the agency to explain its
determination.” Unicatch, 539 F. Supp. 3d at 1248-49. Consequently, the
subsequent ruling does not speak to the question of whether substantial evidence
supports the prior ruling because the subsequent ruling was not before the agency
when it made the decision challenged here.
Second, the purported inconsistency is “not a prior administrative precedent”
of the challenged action. Home Prods., 662 F. Supp. 2d at 1864. Cheng Shin can only
challenge the purported inconsistency in the subsequent proceeding because the
inconsistency is created by the subsequent decision. Jd. The purported inconsistency,
therefore, is irrelevant to the challenged decision before the Court. See Hoogovens
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Staal, 4 F. Supp. 2d at 1218 (“The Court can not [sic] consider evidence presented in
the second administrative review when it reviews the first administrative review.”).
Third, even if the challenged decision was relevant, it is undisputed that the
record in the initial investigation and the subsequent scope rulings differed in
significant respects. See Pl.’s Reply at 21, ECF No. 58 (stating that the TRA service
type was not part of the record in the subsequent ruling); Def.’s Sur-Reply at 2, ECF
No, 65 [T]he TRA was not on the record in the [subsequent] scope proceeding, but it
was on the record in this [initial] investigation.”). It is hardly surprising that, given
the multiple unforced errors Cheng Shin committed in the underlying proceedings, it
changed tactics in subsequent proceedings. That it wisely chose to do so does not save
it from the consequences of the answers it gave here.
CONCLUSION
Cheng Shin negotiated for an exclusion whose plain language required that any
excluded tires must be “designed and marketed exclusively” as temporary-use light
truck tires. It then proceeded to submit information to Commerce explaining how
much like passenger car tires its truck tires were. It is not the job of the Court to
save Cheng Shin from itself. That Commerce could have perhaps taken a more
lenient view does not compel Commerce to do so. Accord Universal Camera Corp.,
340 U.S. at 488 (holding that a court cannot “displace the [agency’s] choice between
two fairly conflicting views”). Having given Commerce and the Union the rope with
which to hang it, Cheng Shin may not now complain about the sentence. The decision
Court No. 21-003898 Page 36
of the Commerce Department is AFFIRMED as supported by substantial evidence
and in accordance with the law. See 19 U.S.C. § 1516a(b)(1)(B)@). Plaintiffs Motion
for Judgment on the Agency Record is DENIED.
Ay Uh,
Stephen Alexander Vaden, Judge
ae
Dated: Lrg /3 2023
New York, New York