Crawfish Processors Alliance v. United States

United States Court of Appeals for the Federal Circuit

2006-1501

CRAWFISH PROCESSORS ALLIANCE,
LOUISIANA DEPARTMENT OF AGRICULTURE & FORESTRY,
and BOB ODOM, COMMISSIONER,

Plaintiffs-Appellants,

v.

UNITED STATES,

Defendant-Appellee.

John C. Steinberger, Adduci, Mastriani & Schaumberg, L.L.P., of Washington,
DC, argued for plaintiffs-appellants. With him on the brief was Will E. Leonard.

David S. Silverbrand, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General,
David M. Cohen, Director, and Jeanne E. Davidson, Deputy Director. Of counsel were
Berniece A. Browne, Marisa Goldstein, and John D. McInerney, United States
Department of Commerce, of Washington, DC.

Appealed from: United States Court of International Trade

Judge Evan J. Wallach
 United States Court of Appeals for the Federal Circuit

2006-1501

CRAWFISH PROCESSORS ALLIANCE,
LOUISIANA DEPARTMENT OF AGRICULTURE & FORESTRY,
and BOB ODOM, COMMISSIONER,

Plaintiffs-Appellants,

v.

UNITED STATES,

Defendant-Appellee.

____________________

DECIDED: April 20, 2007
____________________

Before LOURIE, RADER, and BRYSON, Circuit Judges.
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Opinion for the court filed by Circuit Judge LOURIE. Concurring opinion filed by Circuit
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Judge RADER.
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LOURIE, Circuit Judge.
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Crawfish Processors Alliance, Louisiana Department of Agriculture and Forestry,

and Bob Odom, Commissioner, (collectively “CPA”) appeal from the decision of the

United States Court of International Trade sustaining the scope ruling by the United

States Department of Commerce (“Commerce”) that crawfish etouffee is not included

within the scope of an antidumping duty order covering freshwater crawfish tail meat.
Crawfish Processors Alliance v. United States, 431 F. Supp. 2d 1342 (Ct. Int’l Trade
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2006). Because substantial evidence supports Commerce’s determination that etouffee

is not included within the scope of the antidumping duty order, we affirm.

BACKGROUND

This appeal involves an Antidumping Duty Order imposed against freshwater

crawfish tail meat imported from the People’s Republic of China, effective September

15, 1997. 62 Fed. Reg. 48218-02. The product covered by that order is “freshwater

crawfish tail meat, in all its forms (whether washed or with fat on, whether purged or

unpurged), grades, and sizes; whether frozen, fresh, or chilled; and regardless of how it

is packed, preserved, or prepared.” Id.
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On June 4, 2004, Coastal Foods, LLC (“Coastal”), an importer of crawfish

etouffee, requested a scope ruling from Commerce to determine whether crawfish

etouffee was included within the scope of that antidumping duty order. Coastal

described crawfish etouffee as “a product made by combining and integrating flour,

cooking oil, onions, bell peppers, tomatoes (paste, puree or other form), celery or other

vegetables, garlic, pepper, salt, other seasonings, water, thickeners (starches), oleo or

butter, and crawfish tailmeat.” Coastal further elaborated that the process of making

crawfish etouffee involved “a complex cooking procedure at temperatures ranging from

200°F to 350°F over a considerable time period” and resulted in the complete blending

and integration of the ingredients. Coastal characterized its etouffee product as a fully

cooked and ready-to-heat-and-serve “stew” comprised mostly of gravy. Coastal

asserted in its scope request that crawfish tail meat is only one of many ingredients

used in making etouffee and that once the tail meat has been blended and integrated

2006-1501 2
with other ingredients, it cannot be “unblended and un-integrated.” Accordingly, Coastal

argued that etouffee was not included within the scope of the antidumping duty order

covering freshwater crawfish tail meat.

On July 29, 2004, following Coastal’s request, Commerce informed all interested

parties that it was initiating a scope inquiry to determine whether etouffee was included

within the scope of the antidumping duty order on freshwater crawfish tail meat imported

from the People’s Republic of China. On August 30, 2004, the Crawfish Processors

Alliance, an organization representing domestic producers of crawfish tail meat,

submitted comments regarding Coastal’s scope request and sought that etouffee be

included within the scope of the antidumping duty order.

As required under § 351.225(k)(1) of its regulations, in deciding on the scope of

an antidumping duty order, Commerce must consider the descriptions of the

merchandise contained in the petition, the initial investigation, and the determinations of

the Secretary and the Commission. Commerce considered those factors and found that

they were not dispositive of whether crawfish etouffee is included within the scope of the

relevant antidumping duty order. Commerce focused on the descriptions of etouffee in

light of the language of the order that states that the product covered by the order is

“freshwater crawfish tail meat, in all its forms (whether washed or with fat on, whether

purged or unpurged), grades, and sizes; whether frozen, fresh, or chilled; and

regardless of how it is packed, preserved, or prepared.”
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(emphasis added). Commerce observed that despite the different interpretations of

what constitutes “preserved” or “prepared,” the proper inquiry is not whether the tail

meat in etouffee was “prepared” but rather whether “etouffee is still considered tail

2006-1501 3
meat, or whether the tail meat has been transformed into a different product.”

Commerce found that the descriptions of etouffee in light of the scope order language

did not resolve this inquiry.

Because the criteria set forth in 19 C.F.R. § 351.225(k)(1) were not dispositive of

whether etouffee is included within the scope of the antidumping duty order,

Commerce considered the additional Diversified Products factors, 1 as set forth in
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§ 351.225(k)(2). Those factors include the physical 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. Commerce determined that no single factor is dispositive. However,

Commerce found that the overall physical characteristics of tail meat, when included in

etouffee, were altered from the physical characteristics of tail meat by itself.

Accordingly, Commerce found that etouffee, when cooked in the manner described by

Coastal, had undergone a substantial transformation into a new and different product.

Commerce further found that the expectations of the ultimate users of etouffee differ

from the expectations of the ultimate users of crawfish tail meat because etouffee is

suitable only for heating and serving, whereas freshwater crawfish tail meat could be

used in a variety of meals. Based on consideration of the various criteria, Commerce

ruled that etouffee is not included within the scope of the antidumping duty order on

freshwater crawfish tail meat.

1
TP Prior to codification of the regulations, the factors set forth in 19 C.F.R.
PT

§ 351.225(k)(2) were identified by the Court of International Trade in Diversified U

Products Corp. v. United States, 572 F. Supp. 883 (Ct. Int’l Trade 1983).
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2006-1501 4
 The Court of International Trade sustained Commerce’s scope ruling. Crawfish U

Processors Alliance, 431 F. Supp. 2d at 1342.
U The court first determined that

Commerce acted appropriately under its regulations when it initiated a scope inquiry.

The court next found that Commerce considered the initial criteria set forth in

§ 351.225(k)(1) and determined that those criteria do not resolve whether etouffee is

included within the scope of the order. Accordingly, Commerce was correct to further

consider the Diversified Products factors set forth in § 351.225(k)(2). The court found
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that Commerce carefully considered the Diversified Products factors and that
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substantial evidence supported Commerce’s determination that etouffee is not within

the scope of the order. The court noted that etouffee is something more than merely

“preserved” or “prepared” crawfish tail meat and that the essential character of crawfish

tail meat is fundamentally changed when it becomes etouffee. Accordingly, the court

granted judgment sustaining Commerce’s scope ruling.

CPA timely appealed, and we have jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(5).

DISCUSSION

“[W]e use the same standard of review that the Court of International Trade uses

when reviewing scope determinations by the Commerce Department: whether

substantial evidence supports Commerce’s determination and whether that

determination accords with law.” Novosteel SA v. United States, 284 F.3d 1261, 1269
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(Fed. Cir. 2002). “Substantial evidence” means “such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.” Consol. Edison U

Co. v. NLRB, 305 U.S. 197, 229 (1938).
U Moreover, we have held that Commerce

2006-1501 5
“enjoys substantial freedom to interpret and clarify its antidumping duty orders.”

Ericsson GE Mobile Commc’n, Inc. v. United States, 60 F.3d 778, 782 (Fed. Cir. 1995).
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On appeal, CPA argues that Commerce should not have considered the

Diversified Products factors set forth in § 331.225(k)(2) because the scope language in
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the antidumping duty order is dispositive of the issue. According to CPA, etouffee is

“preserved” and “prepared” crawfish tail meat and is therefore clearly within the scope of

the antidumping duty order. CPA relies on Orlando Food Corp. v. United States, 140
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F.3d 1437 (Fed. Cir. 1998), for its argument that a product can be “prepared” even

when the product is significantly changed by the addition of other ingredients. CPA

further argues that it was improper for the Court of International Trade to have

considered whether the “essential character” of the crawfish tail meat in etouffee had

been changed.

The government responds that although etouffee is “preserved and prepared,” it

cannot be considered “preserved or prepared crawfish tail meat” because the tail meat

has undergone a substantial transformation. The government contends that etouffee is

not properly considered as crawfish tail meat because etouffee is a new and different

product. The government argues that Orlando Food is distinguishable on its facts
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because that case involved a prepared product that was not the final and finished

product, whereas this case does involve a final and finished product. Moreover, the

government asserts that Orlando Food actually supports its position that a product can
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be significantly altered such that the final product may be considered as an entirely new

product. Therefore, the government asserts that substantial evidence supports

2006-1501 6
Commerce’s determination that etouffee is not preserved or prepared crawfish tail meat

and hence is not clearly included within the scope of the antidumping duty order.

We agree with the government that the Court of International Trade properly

sustained Commerce’s scope ruling. Commerce’s procedures for scope inquiries are

set forth in 19 C.F.R. § 351.225. In determining whether a particular product is included

within the scope of an antidumping duty order, Commerce considers the criteria set

forth in 19 C.F.R. § 351.225(k). That regulation reads as follows:

(k) Other scope determinations. With respect to those scope
determinations that are not covered under paragraphs (g) through (j) of
this section, in considering whether a particular product is included within
the scope of an order or a suspended investigation, the Secretary will take
into account the following:

(1) The descriptions of the merchandise contained in the petition, the
initial investigation, and the determinations of the Secretary
(including prior scope determinations) and the Commission.

(2) When the above criteria are not dispositive, the Secretary will
further consider:

(i) The physical characteristics of the product;
(ii) The expectations of the ultimate purchasers;
(iii) The ultimate use of the product;
(iv) The channels of trade in which the product is sold; and
(v) The manner in which the product is advertised and displayed.

19 C.F.R. § 351.225(k). As plainly stated in the regulations, when the criteria set forth

in § 351.225(k)(1) do not resolve whether the product at issue is within the scope of the

order, Commerce then considers the additional criteria set forth in § 351.225(k)(2), also

known as the Diversified Products criteria.
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CPA first argues that the scope order language includes etouffee, and therefore

that Commerce did not need to consider the Diversified Products criteria.
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2006-1501 7
specifically, CPA argues that etouffee is “prepared” or “preserved” crawfish tail meat as

provided for in the scope order language. The scope order language states that “the

product covered by this investigation and order is freshwater crawfish tail meat, in all its

forms (whether washed or with fat on, whether purged or unpurged), grades, and sizes;

whether frozen, fresh, or chilled; and regardless of how it is packed, preserved, or U

prepared.” 2 62 Fed. Reg. 48218-02 (emphasis added).
U TPF FPT According to CPA, crawfish

etouffee includes “preserved” and “prepared” crawfish tail meat and thus falls within the

scope of the order. However, as Commerce noted, CPA focuses on the wrong inquiry.

The scope order states that crawfish tail meat, whether preserved or prepared, is
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included within the scope of the order, but is silent on whether etouffee, which may very

well include prepared or preserved crawfish tail meat, is included within the scope of the

order. As Commerce determined, the proper inquiry is whether the product etouffee is

still properly considered freshwater crawfish tail meat, or whether the tail meat has been

transformed into a different product, such that it can no longer be considered crawfish

tail meat. The express language of the scope order does not clearly resolve that

inquiry.

Because Commerce determined that the language of the scope order, as well as

the other factors set forth in § 351.225(k)(1), are not dispositive of whether etouffee is

included within the scope order, Commerce properly considered the additional criteria in

§ 351.225(k)(2). Commerce found that the crawfish tail meat in etouffee has undergone

a “substantial transformation” such that etouffee can no longer be considered

freshwater crawfish tail meat. Substantial evidence supports that finding. According to

2
TP The scope order was based upon language provided by the CPA in its
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September 26, 1996 petition.

2006-1501 8
Coastal’s description of etouffee, that product is considered to be a stew with many

ingredients in addition to crawfish tail meat. The stew only needs to be heated and

served before being consumed. Commerce found that the ingredients have penetrated

the tail meat and have permanently altered its original flavor. Moreover, Commerce

determined, and the record supports, that etouffee is intended and expected to be

served as such after heating, whereas crawfish tail meat can be used as an ingredient

in a variety of meals. As a mixture of many ingredients in addition to crawfish tail meat,

Commerce could reasonably have determined that etouffee is not freshwater tail meat

and therefore is not included within the scope of the order.

CPA relies on Orlando Food for support for its argument that the addition of other
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ingredients does not fundamentally change an underlying product. But the facts are

different in Orlando Food and therefore that case does not aid CPA.
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decision in Orlando Food provides further support for Commerce’s scope ruling. That
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case concerned whether a specific product should be classified under the heading of

the Harmonized Tariff Schedule of the United States (“HTSUS”) of “Tomatoes prepared

or preserved” or “Sauces and preparations therefor.” Orlando Food, 140 F.3d at 1440.
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The product at issue was a canned tomato product consisting of approximately sixty

percent whole, peeled tomatoes, and forty percent tomato puree by weight, as well as

salt, citric acid, and basil leaf. Id. at 1349. Orlando sold the product to the Nestle
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Company, which used the product to produce finished tomato sauces. Id.
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determined that Orlando’s product could be classified under the “Tomatoes prepared or

preserved” heading “despite the presence of incidental spices.” Id. We further
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determined that, “although the addition of seasonings sets the product apart from

2006-1501 9
unseasoned canned tomatoes, it hardly changes the essential tomato character of the

product.” Id.
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In contrast with the product in Orlando Food, which consisted mainly of whole
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tomatoes with the addition of “incidental” spices and was not a final product, Commerce

found that etouffee is a final product ready to be served, consisting of many ingredients

in addition to crawfish tail meat. Thus, etouffee bears a different relationship to crawfish

tail meat than canned whole tomatoes does to prepared tomatoes. Accordingly, the

Court of International Trade correctly relied on Orlando Food for support for its
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conclusion that because the essential character of the crawfish tail meat in etouffee was

altered or “substantially transformed” by its preparation process, Commerce could

properly have determined that etouffee is not freshwater crawfish tail meat as

contemplated by the scope order.

CONCLUSION

For the foregoing reasons, the decision by the Court of International Trade

sustaining Commerce’s determination that etouffee is not included within the scope of

the antidumping duty order is affirmed.

AFFIRMED.
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2006-1501 10
 United States Court of Appeals for the Federal Circuit
2006-1501

CRAWFISH PROCESSORS ALLIANCE,
LOUISIANA DEPARTMENT OF AGRICULTURE AND FORESTRY,
and BOB ODOM, COMMISSIONER,

Plaintiffs-Appellees,

v.

UNITED STATES,

Defendant-Appellee.

RADER, Circuit Judge, concurring.

This court again applies the Atlantic Sugar standard of review to duplicate the

review already given by the Court of International Trade. See Atl. Sugar, Ltd. v. United

States, 744 F.2d 1556 (Fed. Cir. 1984). In this case, substantial record evidence

supports Commerce's determination and I concur in the result. However, as I have

previously stated in Zenith v. United States, 99 F.3d 1576, 1579-85 (Fed. Cir. 1996)

(Rader, J. concurring), this court might more wisely key its standard of review to give

deference to the work already performed by the Court of International Trade. Such a

standard is consistent with statute, id. at 1580, and as I see it, is the proper standard

this court should adopt.