Laminated Woven Sacks Committee v. United States

Slip Op 10-81

UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Nicholas Tsoucalas, Senior Judge
________________________________________
:
LAMINATED WOVEN SACKS COMMITTEE, :
COATING EXCELLENCE INTERNATIONAL, LLC :
and POLYTEX FIBERS CORPORATION, :
:
Plaintiffs, :
:
v. :
:
UNITED STATES, : Consolidated
: Court No. 09-00343
Defendant, :
:
and :
:
SHAPIRO PACKAGING and :
COMMERCIAL PACKAGING, :
:
Defendant-Intervenors. :
________________________________________:

OPINION

Held: Plaintiffs’ Motion for Judgment On the Agency Record is
denied. Judgment is entered for Defendant, United States. Case is
dismissed.

Dated: July 23, 2010

King & Spalding, LLP (Joseph W. Dorn, Jeffrey B. Denning,
Stephen A. Jones, Stephen R. Keener) for Plaintiffs, Laminated
Woven Sacks Committee; Coating Excellence International, LLC; and
Polytex Fibers Corporation.

Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Reginald T. Blades, Jr., Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Delisa M. Sanchez); Rebecca Cantu, Of
Counsel, Office of the Chief Counsel for Import Administration,
United States Department of Commerce (Evangeline D. Keenan), for
Defendant, the United States.
Court No. 09-00229 Page 2

Kutak Rock LLP (Ronald M Wisla and Lizbeth R. Levinson) for
Defendant-Intervenor, Shapiro Packaging.

Arent Fox LLP (John M. Gurley and Diana Dimitriuc-Quaia) for
Defendant-Intervenor, Commercial Packaging.

TSOUCALAS, Senior Judge: This matter is before the Court on a

Motion for Judgment On the Agency Record brought by Plaintiffs,

Laminated Woven Sacks Committee, Coating Excellence International,

LLC and Polytex Fibers Corporation (collectively “Plaintiffs” or

“LWSC”) pursuant to Rule 56.2 of the Rules of the United States

Court of International Trade (“USCIT”).

Plaintiffs challenge a determination by the United States

Department of Commerce (“Commerce” or “Department”) that certain

products imported by Shapiro Packaging are outside the scope of

antidumping and countervailing duty orders published as Notice of

Antidumping Duty Order: Laminated Woven Sacks From the People’s

Republic of China, 73 Fed. Reg. 45,941 (Aug. 7, 2008), and

Laminated Woven Sacks From the People’s Republic of China:

Countervailing Duty Order, 73 Fed. Reg. 45,955 (Aug. 7, 2008)

(collectively the “Orders”). Emphasizing that the Orders expressly

include laminated woven sacks that are “printed with three colors

or more in register,” Orders at 73 Fed. Reg. 45,942; 73 Fed. Reg.

45,955, and asserting that the products imported by Shapiro

Packaging in fact possess three or more printed colors, Plaintiffs

contend that Commerce should have reached an affirmative scope

determination without resort to descriptions of the merchandise
Court No. 09-00229 Page 3

contained in the petition or prior investigation. The

administrative determination under review is Final Scope Ruling:

Antidumping and Countervailing Duty Orders on Laminated Woven Sacks

from the People’s Republic of China (July 29, 2009) (“Final Scope

Ruling”). Plaintiffs’ motion is opposed by Commerce and by

Defendant-Intervenors, Shapiro Packaging and Commercial Packaging,

who maintain that Commerce’s determination in the Final Scope

Ruling is supported by substantial evidence and is otherwise in

accordance with law, and should therefore be sustained in all

respects. For the reasons set forth below, Plaintiffs’ Motion for

Judgment On the Agency Record is denied.

JURISDICTION

The Court has jurisdiction over this matter pursuant to

Section 516A(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19

U.S.C. § 1516a(a)(2)(B)(vi) (2006),1 and 28 U.S.C. § 1581(c)

(2006).

STANDARD OF REVIEW

The Court grants “significant deference” to Commerce’s scope

rulings, Allegheny Bradford Corp. v. United States, 28 CIT 830,

842, 342 F. Supp. 2d 1172, 1183 (2004), and will uphold a given

determination unless it is “unsupported by substantial evidence on

the record, or otherwise not in accordance with law,” 19 U.S.C. §

1
Further citations to the Tariff Act of 1930 are to the
relevant provisions of Title 19 of the U.S. Code, 2006 edition.
Court No. 09-00229 Page 4

1516a(b)(1)(B)(i). Substantial evidence is “‘such relevant

evidence as a reasonable mind might accept as adequate to support

a conclusion.’” Huaiyin Foreign Trade Corp. (30) v. United States,

322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co.

v. NLRB, 305 U.S. 197, 229 (1938)). There must be a “rational

connection between the facts found and the choice made” in an

agency determination if it is to be characterized as supported by

substantial evidence and otherwise in accordance with law.

Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168

(1962). The Court “must affirm a Commission determination if it is

reasonable and supported by the record as a whole, even if some

evidence detracts from the Commission’s conclusion.” Nippon Steel

Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir. 2006)

(internal citation and quotation marks omitted).

PROCEDURAL HISTORY

On August 7, 2008, Commerce published antidumping and

countervailing duty orders covering certain laminated woven sacks

from the People’s Republic of China. See Orders 73 Fed. Reg.

45,941; 73 Fed. Reg. 45,955. On March 20, 2009, Defendant-

Intervenor, Shapiro Packaging, requested a scope ruling on whether

three different laminated woven sacks the company imported fell

within the ambit of the scope language. See Letter from Garvey

Schubert Barer to the Acting Secretary of Commerce, Re: Laminated

Woven Sacks from the People’s Republic of China; Scope Ruling
Court No. 09-00229 Page 5

Request (Mar. 20, 2009) (“Scope Ruling Request”), Public Rec. 1,

Confidential Rec. 1.2 The scope of the Orders is defined as

follows:

The merchandise covered by this investigation is
laminated woven sacks. Laminated woven sacks are bags
or sacks consisting of one or more plies of fabric
consisting of woven polypropylene strip and/or woven
polyethylene strip, regardless of the width of the
strip; with or without an extrusion coating of
polypropylene and/or polyethylene on one or both sides
of the fabric; laminated by any method either to an
exterior ply of plastic film such as biaxially-oriented
polypropylene (“BOPP”) or to an exterior ply of paper
that is suitable for high quality print graphics;
printed with three colors or more in register; with or
without lining; whether or not closed on one end;
whether or not in roll form (including sheets, lay-flat
tubing, and sleeves); with or without handles; with or
without special closing features; not exceeding one
kilogram in weight. Laminated woven sacks are typically
used for retail packaging of consumer goods such as pet
foods and bird seed. . . .

73 Fed. Reg. at 45,942; 73 Fed. Reg. 45,955 (emphasis added).

In its Scope Ruling Request, Shapiro claimed that the three

laminated woven sacks at issue3 are beyond the scope of the Orders

and therefore not subject to the antidumping or countervailing

duties imposed a priori. See Scope Ruling Request at 2, CR 1.

According to Shapiro, the subject merchandise did not meet the

“printed with three colors or more in register” criterion and were

2
Hereinafter all documents in the public record will be
designated “PR,” and all documents in the confidential record
designated “CR.”
3
The three laminated woven sacks imported by Shapiro
include the Manna Pro Calf Manna sack; the Manna Pro Horse Feed
sack; and the Red Head Deer Corn sack. See Compl. at 4.
Court No. 09-00229 Page 6

in fact produced with only two colors in register. See id. at 7.

On May 12, 2009, Plaintiffs submitted comments to the Department

contesting Shapiro’s request for exclusion of the subject

merchandise from the scope of the Orders. See Letter from King &

Spalding to the Secretary of Commerce, Re: Laminated Woven Sacks

From China: Petitioners’ Reply To Shapiro Packaging’s Request For

A Scope Ruling (May 12, 2009) (“Plaintiffs’ Comments of May 12,

2009"), CR 2. Additional submissions followed,4 and on July 29,

4
On May 22, 2009, Shapiro submitted rebuttal comments. See
Letter from Garvey Schubert Barer to the Secretary of Commerce,
Re: Laminated Woven Sacks from the People’s Republic of China;
Rebuttal to Petitioners’ Comments on the Shapiro Scope Ruling
Request (May 22, 2009) (“Shapiro’s Comments of May 22, 2009"), PR
15. On May 29, 2009, Commercial Packaging submitted rebuttal
comments in support of Shapiro’s position. See Letter from Arent
Fox to the Secretary of Commerce, Re: Laminated Woven Sacks from
the People’s Republic of China: Comments On Scope Ruling Request
of Shapiro Packaging (May 29, 2009) (“Commercial Packaging’s
Comments of May 29, 2009"), PR 16. On June 10, 2009, Plaintiffs
submitted rebuttal comments. See Letter from King & Spalding to
the Secretary of Commerce, Re: Laminated Woven Sacks From China:
Petitioners’ Second Submission Concerning Shapiro Packaging’s
Request For A Scope Ruling (June 10, 2009) (“Plaintiffs’ Comments
of June 10, 2009"), PR 18. On June 15, 2009, Shapiro submitted
surrebuttal comments. See Letter from Garvey Schubert Barer to
the Secretary of Commerce, Re: Laminated Woven Sacks from the
People’s Republic of China; Response to Petitioners’ Second
Submission Concerning Shapiro Packaging’s Request for a Scope
Ruling (June 15, 2009) (“Shapiro’s Comments of June 15, 2009"),
PR 19. On June 24, 2009, Commercial Packaging submitted
surrebuttal comments. See Letter from Arent Fox to the Secretary
of Commerce, Re: Laminated Woven Sacks from the People’s Republic
of China: Second Submission of Comments On The Scope Ruling
Request of Shapiro Packaging (June 24, 2009) (“Commercial
Packaging’s Comments of June 24, 2009"), PR 21. Finally, on June
29, 2009, Plaintiffs submitted surrebuttal comments. See Letter
from King & Spalding to the Secretary of Commerce, Re: Laminated
Woven Sacks From China: Petitioners’ Third Submission Concerning
(continued...)
Court No. 09-00229 Page 7

2009, Commerce issued its Final Scope Ruling finding that the three

laminated woven sacks identified by Shapiro were printed with only

two colors in register and therefore not subject to the duties

imposed by the Orders. See Final Scope Ruling.

On September 18, 2009, Plaintiffs brought the instant action

contesting the results of Commerce’s Final Scope Ruling. Because

Commerce’s determination in this matter affected the administration

of both an antidumping and countervailing duty order separate

actions were lodged. See Compl., Court No. 09-00343; Compl., Court

No 09-00348. These two actions were subsequently consolidated,

under Consolidated Court No. 09-00343, at the parties’ request.

See Consolidation and Scheduling Order, Docket. No. 33 (Dec. 7,

2009).

DISCUSSION

I. The Scope Ruling

After publication of an antidumping or countervailing duty

order, scope rulings may be necessary to afford importers or

producers clarification as to the status of their products under

the order. In determining whether a product falls within the scope

of an antidumping or countervailing duty order, Commerce engages in

a three-step process. First, Commerce must examine the language of

the order at issue. A “predicate for the interpretive process is

4
(...continued)
Shapiro Packaging’s Request For A Scope Ruling (June 29, 2009)
(“Plaintiffs’ Comments of June 29, 2009"), PR 22.
Court No. 09-00229 Page 8

language in the order that is subject to interpretation.” Duferco

Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002).

If the terms of the order are dispositive then the order governs.

See Tak Fat Trading Co. v. United States, 396 F.3d 1378, 1382 (Fed.

Cir. 2005) (“The language of the order determines the scope of an

antidumping duty order.”). Therefore, while Commerce enjoys broad

discretion in interpreting and clarifying its antidumping duty

orders, and scope orders are necessarily written in general terms,

the interpretive process cannot substitute for language in the

order. See Duferco, 296 F.3d at 1096-97 (citing Novosteel SA v.

United States, 284 F.3d 1261, 1271 (Fed. Cir. 2002)); see also 19

C.F.R. § 351.225(a). If the order alone is not dispositive, the

interpretive process is governed by 19 C.F.R. § 351.225(d), which

directs Commerce to determine whether it can make a ruling based

upon the application for a scope ruling and the factors listed in

section 351.225(k)(1).5 If these descriptions are not dispositive,

5
In its entirety, section 351.225(k) reads as follows:

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
(continued...)
Court No. 09-00229 Page 9

the Department initiates a scope inquiry pursuant to 19 C.F.R. §

351.225(e), and applies the five factors codified in section

351.225(k)(2), commonly referred to as the Diversified Products

criteria. See Diversified Products Corp. v. United States, 6 CIT

155, 162, 572 F. Supp. 883, 889 (1983); see also 19 U.S.C. §

1677j(d)(1).

In the case at bar, Commerce determined that the three

laminated woven sacks at issue are not merchandise covered by the

scope of the Orders. See Final Scope Ruling at 1. The Department

based this conclusion on an analysis of the factors identified in

section 351.225(k)(1).

II. The Color Criterion

A. Parties’ Arguments

LWSC argues that the color criterion contained in the Orders,

“printed with three colors or more in register” can only be

interpreted as to include laminated woven sacks that display three

visible colors printed with the in register process. Pls.’ Mem. in

Supp. of Mot. for J. On the Agency Rec. (“Pls.’ Brief”) at 6.

According to Plaintiffs, the common definition of the term color,

5
(...continued)
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.
Court No. 09-00229 Page 10

as used in the Orders, “references the visual perception of

distinct colors,” and does not “equate colors with inks, which are

raw materials used to produce subject merchandise.”6 See id.

Plaintiffs maintain that the color criterion of the scope language

is based on visible colors and not the actual use of ink colors,

noting that the scope language does not include any reference to

ink, ink color, or the number of inks used in the production

process. See id. at 16. Thus, any attempt by the Department to

render an interpretation of the scope language as mandating a

requirement of a certain number of separate inks would have the

effect of improperly modifying the scope of the Orders. See id. at

18 (citing Duferco, 296 F.3d at 1098). Plaintiffs characterize, as

undisputed, the notion that Shapiro’s imports satisfy the in

register requirement embodied in the Orders.7 See id. at 11. With

6
Both LWSC and Shapiro rely on a standardized color
matching system known as the Pantone Color Matching System. See
Pls.’ Brief at 16; Scope Ruling Request at 3-4. Under the Pantone
Matching System, colors are distinguished by numbers which
catalog a library of 1,114 colors generated through the mixture
of 14 standard base pigments. See Pantone.com, http://
www.pantone.com/pages/pantone/Pantone.aspx?pg=204598&ca=1 (last
visited July 22, 2010).
7
According to LWSC, merchandise is included in the scope of
the Orders whenever: (1) the sack is made with one or more plies
of fabric consisting of woven polypropylene and/or polyethylene
strip, regardless of strip width; (2) the woven fabric is
laminated to an exterior ply of plastic film such as biaxially
oriented polypropylene or to an exterior ply of paper that is
suitable for high quality print graphics; (3) the exterior ply is
printed with three colors or more in register; and (4) the sack
weighs no more than one kilogram. See Pls.’ Brief at 10-11.
Court No. 09-00229 Page 11

regard to whether the laminated woven sacks are “printed with three

colors or more,” LWSC insists that the appropriate standard for

this assessment is the number of visual colors perceived, and not

as Defendants allege, the number of inks used.

Defendant and Defendant-Intervenors, on the other hand, take

the position that the laminated woven sacks are printed with only

two colors in register, and therefore do not meet the physical

criteria of merchandise covered by the Orders. See Def.’s Opp’n to

Pls.’ Mot. for J. On the Agency Rec. at 16 (“Def.’s Brief); Final

Scope Ruling at 2. Commerce bases this conclusion on its assertion

that the phrase “printed with three colors or more in register”

should be construed as the number of inks used in the printing

process rather than the number of colors visible on the sacks. See

Def.’s Brief at 17. According to Shapiro, the presence of multiple

colors on the subject merchandise is achieved through a screening

process which gives “the appearance of multi-colors, when in fact

only one or two color inks are being used.” Scope Ruling Request

at 4. The use of screens thus permits a variety of shades of the

same color eliminating the need for multiple inks. This, according

to Commerce, does not satisfy the “printed with three colors or

more in register” criterion. Because the words “printed with”

immediately precede “three colors or more in register,” the words

must be read together as a single requirement, and not as separate

and independent criteria. See Def.’s Brief at 6; Commercial
Court No. 09-00229 Page 12

Packaging’s Comments of May 29, 2009 at 4-5. Thus, a “bag that is

‘printed with three or more colors’ is not the equivalent of a bag

containing three or more printed colors.” Shapiro Packaging’s

Comments of May 22, 2009 at 5.

As a result, Commerce insists, the color criterion of the

Orders is ambiguous on its face, and therefore the agency properly

elected to interpret the scope language pursuant to section

351.225(k)(1). As part of its analysis, Commerce examined

submissions filed by the petitioners in the original antidumping

and countervailing duty investigations. See Laminated Woven Sacks

from the People’s Republic of China/Petitioners’ Response To The

Department’s July 2, 2007 Request For Clarification Of Certain

Items Contained In The Petition (July 9, 2007) (“Request for

Clarification”). In response to the Department’s request for

clarification of the term “printed with three colors or more in

register” petitioners explained that:

LWS sacks normally have four or more colors in
register. Many have 6 to 8 colors in register.
Petitioners intend to exclude sacks that have fewer
than three colors in register, because they do not have
high quality print graphics. Sacks meeting the other
specifications but without graphics or printing are not
LWS. The printing of multi-colored high quality print
graphics is a critical element to the description of
LWS, since the print on these bags typically serves as
point of sale advertising on the retail shelf. Thus,
the exterior ply must be printed in three colors or
more in register; it must be aligned and printed at
three or more separate print stations, each containing
a different color, creating multicolor, high quality
print graphics.
Court No. 09-00229 Page 13

Request for Clarification at 3 (emphasis added); see also Final

Scope Ruling at 13. Based upon this explanation, Commerce

determined that the color criterion of the scope language included

only those sacks that “were printed in register with three or more

colors, at three or more separate print stations, each containing

a different color.” Final Scope Ruling at 13; Def.’s Brief at 11.

With this as its reference, the Department further adduced that the

term “color” implicated a requirement for separate colored inks

printed in register at separate print stations. See Final Scope

Ruling at 13; Def.’s Brief at 11.

Plaintiffs contest Commerce’s decision to invoke the

interpretive guidelines of section 351.225(k)(1), arguing that

Commerce should have confined its analysis to the text of the scope

as set forth in the Orders. See Pls.’ Brief at 11-12. Because the

issue can be resolved by considering only the Orders, Plaintiffs

argue, Commerce is precluded from considering the other sources

cited in section 351.225(k)(1). See id. at 12. Moreover, says

LWSC, Commerce cannot interpret an antidumping duty order in a

manner contrary to its terms. See id. (citing Duferco, 296 F.3d at

1095). Relying on the Federal Circuit’s decision in Duferco, LWSC

maintains that Commerce “should have first determined whether the

scope language was clear on its face.” Pls.’ Brief at 19. If

thereafter, Commerce found ambiguity in the scope language it would

have been permitted to proceed to the interpretive steps of section
Court No. 09-00229 Page 14

351.225(k)(1). Instead, “Commerce launched into an impermissible

discussion of what the petitioners intended . . . without ever

establishing that the scope of the Orders was unclear.” Id. at 20.

Therefore, Plaintiffs claim, because “Commerce was able to resolve

Shapiro’s scope request solely by reference to the language in the

Orders, it was prohibited from looking further.” Id. at 21 (citing

Duferco, 296 F.3d. at 1096).

Not unexpectedly, Defendant and Defendant-Intervenors

challenge Plaintiffs’ interpretation of the Federal Circuit’s

holding in Duferco. The Department contends that “Duferco does not

stand for the proposition that Commerce is required to make a

finding of ambiguity before it can interpret the scope language in

accordance with 19 C.F.R. § 351.225(k)(1).” Def.’s Brief at 13.

To the contrary, says Defendant, there is nothing in the holding of

Duferco that requires Commerce to engage in a “stepped analysis” in

which it must first make an explicit determination of ambiguity.

Id. at 15. Commerce distinguishes Duferco on the grounds that the

issue for the Federal Circuit was whether the Department could find

that “a product is within the scope of an antidumping order on the

basis that there is no language in the order specifically excluding

the product at issue.” Id. at 13 (citing Duferco 296 F.3d at 1096-

97). In fact, Duferco made clear that the petition and

investigation “may provide valuable guidance as to the

interpretation of the final order.” Duferco, 296 F.3d at 1097.
Court No. 09-00229 Page 15

Thus, Defendant concludes, given that the phrase “printed with

three colors or more in register” is subject to interpretation,

Commerce properly extended its scope analysis to those factors

listed in section 351.225(k)(1). See Def.’s Brief at 15.

B. Analysis

A common issue in scope cases is whether Commerce acted

properly in determining whether a particular product is covered by

an order’s general terminology. Indeed, the Department’s

regulations themselves recognize that the agency must conduct scope

determinations in the first instance because descriptions of the

subject merchandise are “written in general terms.” 19 C.F.R. §

351.225(a). It is important to distinguish such cases, however,

from those circumstances in which an order’s relevant terms are

unambiguous. For, as LWSC correctly points out, Commerce cannot

make a scope determination that conflicts with an order’s terms,

nor can it interpret an order in a way that changes the order’s

scope. See Duferco 296 F.3d at 1089 (“Scope orders may be

interpreted as including subject merchandise only if they contain

language that specifically includes the subject merchandise or may

be reasonably interpreted to include it.”). In the case at bar,

Plaintiffs present a bifurcated scope argument. The first part

consists of the claim that Commerce’s decision to apply the

framework of section 351.225(k)(1) in its interpretive analysis was

improper - i.e., the Orders’ relevant terms were unambiguous. The
Court No. 09-00229 Page 16

second part attacks the Department’s interpretation itself, arguing

that the color criterion implicates the number of colors visible on

the sacks not the number of inks or printing stations used in their

production - i.e., the Department’s interpretation altered the

Orders’ scope. The two parts of this argument will be addressed

seriatim.

The first part of the Court’s analysis is conducted under the

controlling principle that Commerce need only meet a low threshold

to show that it justifiably found an ambiguity in scope language.

See Novosteel, 284 F.3d at 1272. While it is true that it is not

justifiable to identify an ambiguity where none exists, this is

simply not the case here. The description of the merchandise

contained in the scope language does not establish that the

laminated woven sacks at issue unambiguously fall within the

purview of the Orders. As Commercial Packaging notes, if the terms

“printed with;” “three colors;” and “in register” were meant as

unrelated requirements of the scope language, it would make no

sense to couch them in such idiomatic form (“printed with three

colors or more in register”). See Commercial Packaging’s Comments

of May 29, 2009 at 5. Thus, the phrase “printed with three colors

or more in register” cannot be read as unrelated requirements, but

rather as one complete grammatical unit. To properly construe this

term and discern its effect on other components of the scope

language, Commerce looked to the regulatory guidelines of section
Court No. 09-00229 Page 17

351.225(k)(1). LWSC’s assertion that the Department failed to

establish an ambiguity in the Orders prior to its invocation of the

interpretive guidelines of section 351.225(k)(1) is flatly

contradicted by the agency’s declaration that:

[T]he Department has examined the criteria set forth in
its regulations under section 19 C.F.R. § 351.225(k)(1)
to assist it in determining the meaning of the phrase,
“printed with three colors or more in register.”

Final Scope Ruling at 13 (emphasis added). Though this may not

rise to the level of an explicit finding of ambiguity, none is

required.8 All that is necessary before Commerce may consider

secondary documents from the original investigation is “language in

the order that is subject to interpretation.” Duferco, 296 F.3d at

1097. The circumstances present here are precisely those for which

Commerce’s interpretive regulations and the holding in Duferco both

apply; to aid in the resolution of a scope issue when reference to

the language in the order itself will not suffice. Mindful of the

low threshold requirement needed to establish ambiguity, the Court

finds that Commerce has met this standard.

The second part of Plaintiffs’ scope argument that the color

criterion of the Orders contemplates the visible perception of

distinct colors, and not the number of inks used is similarly

flawed. In seeking guidance as to the proper meaning of “printed

8
LWSC concedes that there is no judicial or regulatory
precedent for requiring an explicit determination of ambiguity.
See Pls.’ Reply Brief at 5 n.6.
Court No. 09-00229 Page 18

with three colors or more in register,” Commerce applied the

interpretive process outlined in section 351.225(k)(1). In so

doing, Commerce examined documents submitted during the underlying

investigation. One such document directly addressed the

Department’s uncertainty with regard to the scope language. In the

Department’s Request for Clarification, Commerce specifically

requested that petitioners provide further explanation of the term

“printed with three colors or more in register.” See Request for

Clarification at 2-3. The operative portion of the petitioners’

response to this question states that:

[T]he exterior ply must be printed in three colors or
more in register; it must be aligned and printed at
three or more separate print stations, each containing
a different color, creating multicolor, high quality
print graphics.

Request for Clarification at 3. Thus, the phrase “printed with

three colors or more in register” is described with greater

specificity, and provides the context of petitioners’ objectives in

formulating the scope language. For instance, “printed with three

colors or more in register” is followed by the phrase “it must be

aligned and printed at three or more print stations, each

containing a different color, creating multicolor, high quality

print graphics.” These two clauses are separated by a semicolon.

A common method of interpretation holds that an ending clause or

phrase applies to the last subject matter to which it is pertinent.

See Sero v. New York Cent. Lines, LLC, No. 07-CV-6397-CJS, 2010 WL
Court No. 09-00229 Page 19

2294440, at *3 (W.D.N.Y. June 4, 2010) (internal citations

omitted). Likewise, use of the semicolon in this manner serves to

link the two closely related independent clauses, and is indicative

of the petitioners’ intention that the second clause act as a

modifier of the first. See John C. Hodges et al., Harbrace College

Handbook 145 (12th ed. 1994). Hence, in order to adequately meet

the criterion of “printed with three colors or more in register,”

a laminated woven sack must have been “aligned and printed at three

or more separate print stations, each containing a different

color.” Request for Clarification at 3. This is because a

printing process varying from this specification would not meet

petitioners’ stated goal of including, in the scope language, only

those sacks with “high quality print graphics.” Id. (“Petitioners

intend to exclude sacks that have fewer than three colors in

register, because they do not have high quality print graphics.”).

Although LWSC complains that the Department did not revise the

scope of the Orders as a result of petitioners’ comments in the

Request for Clarification, “the absence of a reference to a

particular product in the Petition does not necessarily indicate

that the product is not subject to an order.” Novosteel, 284 F.3d

at 1269 (quoting Wirth Ltd. v. United States, 22 CIT 285, 294, 5 F.

Supp. 2d 968, 976 (1998)).

As previously noted, Commerce enjoys substantial freedom to

interpret and clarify its antidumping orders, see Duferco, 296 F.3d
Court No. 09-00229 Page 20

at 1096-97; Novosteel, 284 F.3d at 1269, thus Plaintiffs’ have

failed to overcome the high burden necessary to compel a rejection

of Commerce’s scope interpretation. In a less technical setting

LWSC’s adequation of color and shade may hold some sway, but the

descriptions of merchandise in antidumping and countervailing duty

investigations contain nomenclature specific to both product and

process. Such is the case here. Therefore, the definition of

colors, in this case, is inspired by the context of the industry in

which it is used - i.e., the production of laminated woven sacks

with high quality print graphics.

Therefore, the Court finds, the Department’s determination

with respect to the color criterion is supported by substantial

evidence and otherwise in accordance with law.

III. Administration of the Orders

A. Parties’ Arguments

LWSC complains that Commerce’s interpretation of the scope

language increases the likelihood of circumvention.9 According to

Plaintiffs, the requirement that the subject merchandise be printed

in three or more inks at three or more print stations would impede

the ability of agents from the United States Customs and Border

Protection (“Customs”) to properly determine a product’s inclusion

9
The possibility of circumvention arises when “later-
developed merchandise” frustrates the collection of antidumping
or countervailing duties on subject merchandise. See 19 U.S.C. §
1677j(d).
Court No. 09-00229 Page 21

or exclusion from the Orders. This is because Customs agents “will

be required to speculate on how a product was manufactured to

determine whether distinct visible colors are the result of a

specialized printing technique using a single ink at a single print

station or another technique using multiple inks and multiple print

stations.” Pls.’ Brief at 23. In addition, Plaintiffs resist the

arguments made in favor of the Department’s utilization of a

certification program, arguing that past reliance on such programs

has proven “burdensome” and “difficult to administer.” Id. at 24

(citing Certain New Pneumatic Off-the-Road Tires From the People’s

Republic of China: Final Affirmative Countervailing Duty

Determination and Final Negative Determination of Critical

Circumstances, 73 Fed. Reg. 40,480 (July 15, 2008). Moreover, says

Plaintiff, because Commerce has already declined implementation of

a certification program for laminated woven sacks, the Department’s

scope requirement of three or more inks at separate print stations

becomes all the more unreasonable. See id. at 25.

According to Commerce, the administration of these Orders “is

no different than the administration of other antidumping or

countervailing duty orders when the product description contains

inputs that are not readily discernible by visible inspection -

which Commerce and Customs already properly administer on a daily

basis.” Def.’s Brief at 18. Further, Commerce rejects the notion

that a certification program is warranted under the present
Court No. 09-00229 Page 22

circumstances. See Final Scope Ruling at 15. Because no party has

provided any evidence to demonstrate that an importer has attempted

to evade classification, under the Orders, of its imports of

laminated woven sacks that would otherwise meet the criteria of the

scope language, a certification program is unnecessary. See id.

B. Analysis

LWSC’s argument that Commerce somehow abdicated its

responsibility by failing to interpret the scope language in such

a manner as to prevent the likelihood of circumvention lacks merit.

This Court has previously held that a “scope ruling is not the

proper mechanism for addressing circumvention concerns.” East

Jordan Iron Works, Inc. v. United States, 32 CIT , , 556 F.

Supp. 2d 1355, 1358 (2008). The “appropriate method to resolve

such [a] concern would appear to be proceedings under the

provisions specifically designed to prevent circumvention.”

Mitsubishi Elec. Corp. v. United States, 16 CIT 730, 739, 802 F.

Supp. 455, 462-63 (1992). This is because the issues of concern

for the Department in a scope ruling do not address those

considerations that Congress has deemed relevant in the context of

circumvention. See id. An anticircumvention inquiry is a specific

type of scope inquiry governed by its own statutory provision, 19

U.S.C. § 1677j(d), which codifies Commerce’s administrative

practice. See 19 C.F.R. § 351.225(j).

Equally unconvincing is Plaintiffs’ argument that Customs
Court No. 09-00229 Page 23

requires a certification program, attesting to the number of inks

and print stations used, in order for it to properly administer

Commerce’s interpretation of the scope language. While use of a

certification program had been proposed by Commercial Packaging,

the Department rejected this proposal outright. See Final Scope

Ruling at 15. Therefore, LWSC’s characterization as

“unreasonable,” the Department’s refusal to implement a

certification program that LWSC itself opposes, strains logic.

Pls.’ Brief at 25. Moreover, like the circumvention argument LWSC

advances, certification is not part of an ordinary scope analysis.

In sum, Plaintiffs’ concerns that the Department’s scope

interpretation expands the likelihood of circumvention, and makes

impracticable the proper administration of the Orders, are not

valid. Commerce has other means at its disposal to protect against

the potential evasion of the payment of antidumping duties. In

addition, both Commerce and Customs are well-equipped to administer

the Orders without the burden of implementing a certification

program. Thus, LWSC has failed to overcome the “significant

deference” afforded Commerce in the interpretation of its own

orders. Allegheny Bradford, 28 CIT at 842, 342 F. Supp. 2d 1172,

1183. Because Commerce has articulated a satisfactory explanation

for its actions including a rational connection between the facts

found and the choices made, the Court is unable to reweigh the

record evidence even if it so desired. See Burlington Truck
Court No. 09-00229 Page 24

Lines, 371 U.S. at 168.

Accordingly, the Court finds as supported by substantial

evidence and otherwise in accordance with law, Commerce’s

determination in the Final Scope Ruling.

CONCLUSION

For the reasons set forth above, the Motion for Judgment On

the Agency Record, filed by Laminated Woven Sacks Committee, is

denied. Judgment shall be entered accordingly.

/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge

Dated: July 23, 2010
New York, New York