Gleason Industrial Products, Inc. v. United States

Slip Op. 07-40

UNITED STATES COURT OF INTERNATIONAL TRADE

GLEASON INDUSTRIAL PRODUCTS,
INC. and PRECISION PRODUCTS,
INC.,

Plaintiffs, Before: Richard W. Goldberg,
Senior Judge
v.

UNITED STATES, Court No. 06-00089

Defendant,

and

CENTRAL PURCHASING, LLC,

Defendant-
Intervenor.

OPINION

[Commerce’s motion for voluntary remand is granted. Plaintiff’s
USCIT Rule 56.2 motion denied as moot.]

Dated: March 16, 2007

Crowell & Moring, LLP (Matthew P. Jaffe) for Plaintiffs Gleason
Industrial Products, Inc. and Precision Products, Inc.

Adduci, Mastriani & Schaumberg, LLP (Louis S. Mastriani, William
C. Sjoberg) for Defendant-Intervenor Central Purchasing, LLC.

Peter D. Keisler, Assistant Attorney General; Patricia M.
McCarthy, Assistant Director, Commercial Litigation Branch,
Civil Division, U.S. Department of Justice (Stephen C. Tosini);
Office of the Chief Counsel, U.S. Department of Commerce (Carrie
Lee Owens), of counsel, for Defendant United States.

GOLDBERG, Senior Judge: Plaintiffs Gleason Industrial Products,

Inc. and Precision Products, Inc. (collectively “Gleason”) move
Court No. 06-0089 Page 2

the Court to enter judgment on the agency record pursuant to

USCIT Rule 56.2. Defendant U.S. Department of Commerce

(“Commerce”) moves the Court on its own accord to remand the

matter back to the agency. Defendant-Intervenor Central

Purchasing, LLC (“CP”) opposes both motions. For the reasons

that follow, the Court grants Commerce’s request for a voluntary

remand.

I. BACKGROUND

On December 2, 2004, Commerce entered an antidumping duty

order relating to hand trucks produced in China. See Hand

Trucks and Certain Parts Thereof from the People’s Republic of

China, 69 Fed. Reg. 70122 (Dep’t Commerce Dec. 2, 2004) (Notice

of Antidumping Duty Order) (“Antidumping Duty Order”). The

notice defined the scope of the antidumping duty order as

follows:

The merchandise subject to this antidumping duty order
consists of hand trucks manufactured from any
material, whether assembled or unassembled, complete
or incomplete, suitable for any use, and certain parts
thereof, namely the vertical frame, the handling area,
and the projecting edges or toe plate, and any
combination thereof.

A complete or fully assembled hand truck is a hand-
propelled barrow consisting of a vertically disposed
frame having a handle or more than one handle at or
near the upper section of the vertical frame; at least
two wheels at or near the lower section of the
vertical frame; and a horizontal projecting edge or
edges, or toe plate, perpendicular or angled to the
vertical frame, at or near the lower section of the
vertical frame. The projecting edge or edges, or toe
Court No. 06-0089 Page 3

plate, slides under a load for purposes of lifting
and/or moving the load.

That the vertical frame can be converted from a
vertical setting to a horizontal setting, then
operated in that horizontal setting as a platform, is
not a basis for exclusion of the hand truck from the
scope of this petition. That the vertical frame,
handling area, wheels, projecting edges or other parts
of the hand truck can be collapsed or folded is not a
basis for exclusion of the hand truck from the scope
of the petition. That other wheels may be connected
to the vertical frame, handling area, projecting
edges, or other parts of the hand truck, in addition
to the two or more wheels located at or near the lower
section of the vertical frame, is not a basis for
exclusion of the hand truck from the scope of the
petition. Finally, that the hand truck may exhibit
physical characteristics in addition to the vertical
frame, the handling area, the projecting edges or toe
plate, and the two wheels at or near the lower section
of the vertical frame, is not a basis for exclusion of
the hand truck from the scope of the petition.

Examples of names commonly used to reference hand
trucks are hand truck, convertible hand truck,
appliance hand truck, cylinder hand truck, bag truck,
dolly, or hand trolley. They are typically imported
under heading 8716.80.50.10 of the Harmonized Tariff
Schedule of the United States (“HTSUS”) although they
may also be imported under heading 8716.80.50.90.
Specific parts of a hand truck, namely the vertical
frame, the handling area and the projecting edges or
toe plate, or any combination thereof, are typically
imported under heading 8716.90.50.60 of the HTSUS.
Although the HTSUS subheadings are provided for
convenience and customs purposes, [Commerce’s] written
description of the scope is dispositive.

Excluded from the scope are small two-wheel or four-
wheel utility carts specifically designed for carrying
loads like personal bags or luggage in which the frame
is made from telescoping tubular material measuring
less than 5/8 inch in diameter; hand trucks that use
motorized operations either to move the hand truck
from one location to the next or to assist in the
lifting of items placed on the hand truck; vertical
Court No. 06-0089 Page 4

carriers designed specifically to transport golf bags;
and wheels and tires used in the manufacture of hand
trucks.

Id. On December 19, 2005, CP sent a letter to Commerce seeking

a scope ruling that excluded its welding carts from the scope of

the antidumping duty order. The letter provided the following

description of the two models at issue here:

Both carts are made in China, don’t have projected
edges and are designed to carry welding machines only.
. . . Please consider in your ruling that both have a
specialized purpose which can not be utilized as a
standard hand truck for which the original order is
written and neither cart has projecting edges.

Letter from Heidar Nuristani, Compliance Specialist, Central

Purchasing, LLC, to Secretary of Commerce at 1, 3 (Dec. 19,

2005). CP included several photographs of the welding carts at

issue with their letter.

Gleason opposed CP’s request on three grounds. First,

Gleason argued the CP welding carts fell squarely within the

description of hand carts contained in the antidumping duty

order. See Letter from Matthew P. Jaffe, Counsel for Gleason,

to Secretary of Commerce at 2 (Jan. 4, 2006) (“Gleason Letter”).

Second, Gleason claimed CP’s functional argument (i.e., the

carts are not covered because they are “designed to carry

welding machines only”) lacked any relevance to the legal

question of the applicability vel non of the antidumping duty

order to the CP carts. See id. at 3. Lastly, Gleason posited
Court No. 06-0089 Page 5

that because its original antidumping petition included

pictorial representations of “cylinder hand trucks” similar to

the CP welding carts, such trucks were, in effect, incorporated

into the scope of the antidumping order. See id. at 3-4.

Commerce responded by granting CP’s request. See Final

Scope Ruling for Central Purchasing, LLC’s Two Models of Welding

Carts (Feb. 15, 2006). In its scope ruling, Commerce explained

its rationale:

From the description and pictures Central Purchasing
provided, the welding carts do not have a toe plate
that could slide under a load, an essential
characteristic as described in the scope of this
order. Generally, a toe plate is positioned on the
hand truck perpendicular to the vertical frame and
flush with the ground to facilitate movement of an
object onto the cart. The projected edges on the
welding carts rise at least a half inch above the
ground. At this height the projected edges on these
welding carts are not able to slide under a load. In
addition, the toe plates are supported by two bars
that restrict the width of objects that can be loaded
and carried on the carts. Thus, the welding carts
possess only two of the three key physical
characteristics as the subject hand trucks defined in
the scope of the order. Therefore, we determine that
the welding carts do not possess all of the
characteristics of a hand truck as described in the
scope of this order.

Id. at 5 (citation omitted). In response to Gleason’s third

argument, Commerce found that “the written description, not the

pictures, is dispositive of what is included in the scope of the

order.” Id. Though it acknowledged the importance of pictorial

representations during the administrative investigation,
Court No. 06-0089 Page 6

Commerce claimed that they were ultimately assistive and

illustrative, and that the verbal description controlled. See

id. at 5-6.

Gleason then timely commenced an action pursuant to 19

U.S.C. § 1516a, seeking to challenge Commerce’s scope ruling.

Gleason filed a motion for judgment on the agency record on

August 25, 2006. Three months later, Commerce shifted gears,

and requested a voluntary remand so as to “reconsider its

previous position in light of arguments made by plaintiffs . . .

.” Def.’s Resp. Pl.’s Mot. J. Agency R. and Req. Vol. Remand 1

(“Def.’s Mot.”). In its reply brief, Gleason has consented to

the voluntary remand. CP, however, objects not only to

Gleason’s motion for judgment on the agency record, but also to

Commerce’s remand request.

II. STANDARD OF REVIEW

Where an agency requests remand without confessing error in

order to reconsider its previous position, “the reviewing court

has discretion over whether to remand.” SKF USA, Inc. v. United

States, 254 F.3d 1022, 1029 (Fed. Cir. 2001); see also

Shakeproof Assembly Components Div. of Ill. Tool Works, Inc. v.

United States, 29 CIT ___, ___, 412 F. Supp. 2d 1330, 1335

(2005). “The SKF court further noted that remand is generally

appropriate ‘if the agency’s concern is substantial and

legitimate[,]’ but may be refused ‘if the agency’s request is
Court No. 06-0089 Page 7

frivolous or in bad faith.’” Shakeproof, 29 CIT at ___, 412 F.

Supp. 2d at 1335 (quoting SKF, 254 F.3d at 1029). A reviewing

court’s function is to screen out those frivolous and bad faith

remand requests that compromise litigants’ legitimate concerns

for finality. See Corus Staal, BV v. U.S. Dep’t of Commerce, 27

CIT 388, 391, 259 F. Supp. 2d 1253, 1257 (2003) (suggesting that

“merely a change in policy” will not justify a voluntary remand

over an interested party’s objection). When, however, the

agency requests remand to correct a mistake or address some

other substantial and legitimate concern, it is far more

sensible for a court to defer to the agency whose expertise,

after all, consists of administering the statute.

III. DISCUSSION

It is first necessary to establish why Commerce is

acquiescing to remand. In its motion seeking voluntary remand,

Commerce “respectfully request[s] that the Court issue the

attached order granting Commerce a voluntary remand to allow it

to reconsider its determination.” Def.’s Mot. 4. According to

Commerce, such reconsideration is necessary because “Gleason has

elaborated upon certain arguments and raises issues that should

be further reviewed by the agency.” Id. Specifically, Commerce

claims that two issues require reconsideration: (1) whether the

CP welding carts have a projecting edge that easily slides under

a load; and (2) whether CP’s welding carts are “cylinder hand
Court No. 06-0089 Page 8

trucks,” which are specifically included within the scope of the

order. Id. 5-6.

As for the projecting edge of the CP welding carts,

Commerce was impressed by Gleason’s explanation in its scope

request of how the carts’ projecting edges can slide under a

load despite not being flush with the ground. Id. 5. In

particular, Commerce cited Gleason’s claim that the half-inch

elevation of the toe plate “can actually ‘assist individuals as

they slide the toe plate of a hand truck under a cylinder

especially where the bottom surface of the cylinder is curved.’”

Def.’s Mot. 6 (quoting Pl.’s Mot. J. Agency R. 12). Thus,

Commerce’s first reason is to engage in a more searching

examination of the role played by the elevated toe plate.

Regarding the inclusion of the pictorial representation of

cylinder hand trucks, Commerce seeks leave to explore further

Gleason’s argument that the carts represented in the pictorial

exhibits are examples of “cylinder hand trucks,” which are

specifically referenced in the scope description of the

underlying antidumping duty order. Id. 7 (citing Antidumping

Duty Order, 69 Fed. Reg. at 70122).

In response to Commerce’s first reason, CP contends that

the Vertex International, Inc. v. United States decision

forecloses any further consideration of the applicability vel

non of the antidumping duty order to the CP welding carts. See
Court No. 06-0089 Page 9

Def.-Int.’s Mem. Opp. Def.’s Req. Vol. Remand and Pl.’s Mot. J.

Agency R. 12-14. In response to Commerce’s second reason, CP

argues that the inclusion of “cylinder hand trucks” as an

example of a hand truck within the scope of the antidumping

order is “meaningless,” and that the Court should focus

exclusively on the “three essential elements” of a hand truck.

Id. 15.

Commerce is entitled to a remand on both grounds because

the concerns raised are substantial and legitimate, and free

from any semblance of bad faith. The Vertex International court

was faced with a similar question to that posed in this

litigation: whether a variety of cart could slide under a load.

See Vertex Int’l, Inc. v. United States, 30 CIT ___, ___, Slip

Op. 06-10 at 10-12 (Jan. 19, 2006). The Vertex International

court found that the Antidumping Duty Order did not apply to a

specific variety of garden carts. Id. at 12. The projecting

edge of that garden cart was made of round steel wire. Id.

Significantly, the operation instructions for the garden carts

warned that pushing the cart could damage the product or even

cause bodily injury to the operator. Id. at 11. Since the toe

plates of the hand trucks covered by the antidumping duty order

had to be pushed in order to slide under a load, see Antidumping

Duty Order, 69 Fed. Reg. at 70122, the garden carts fell outside
Court No. 06-0089 Page 10

the order’s scope. See Vertex Int’l, 30 CIT at ___, Slip Op.

06-10 at 12-14.

CP’s reliance on Vertex International is misplaced. CP’s

welding carts are drastically different than the Vertex

International plaintiff’s garden carts. Vertex International

does focus the attention of the agency and reviewing courts on

the requirement that a hand truck must be able to slide under a

load in order to fall within the purview of the Antidumping Duty

Order, but it does not purport to answer that question for any

product other than the garden cart at issue in the case. Vertex

International frames the issue for this Court, but it hardly

decides it. In this case, Commerce seeks remand to conduct a

more searching factual examination of whether the elevated toe

plates of the CP welding carts help to slide the carts under

loads. In other words, Commerce is seeking leave to conduct

precisely the sort of inquiry that the Vertex International

decision demands.

CP’s second argument is equally unavailing. It is of

course true that the explicit terms of the Antidumping Duty

Order must control the agency’s subsequent decisions in scope

rulings. See Duferco Steel, Inc. v. United States, 296 F.3d

1087, 1096-97 (Fed. Cir. 2002). Commerce’s remand request in no

way controverts that plain principle. Instead, Commerce is

seeking to determine if the CP welding carts are
Court No. 06-0089 Page 11

”cylinder hand trucks.” The designation is crucial to a

complete and correct resolution to the scope litigation in this

case because the Antidumping Duty Order specifically lists

“cylinder hand truck” as a name “commonly used to reference hand

trucks.” Antidumping Duty Order, 69 Fed. Reg. at 70122. As

such, if Commerce makes the factual finding that the CP welding

carts are cylinder hand trucks, then the Antidumping Duty

Order’s express terms may require an assessment of antidumping

duties on those carts. Gleason itself did not clearly express

this argument at the administrative level, and it persuaded

Commerce only after presenting a more compelling argument in its

Rule 56.2 brief. Compare Gleason Letter at 3-4 (arguing

pictorial exhibits to petition necessarily formed part of the

order’s scope) with Pl.’s Mot. J. Agency R. 14-16 (arguing that

“the pictorial exhibits that form part of the petition impart

material substance to the written scope description,

specifically what is meant by the term ‘cylinder hand truck’”).

Reconsidering that designation is a substantial and legitimate

concern that the agency should be permitted to make on its own

before the judiciary passes its judgment on the matter.

IV. CONCLUSION

Because Commerce’s request for a voluntary remand aims to

address substantial and legitimate concerns, and because there

are no indicia of bad faith, the Court will grant Commerce’s
Court No. 06-0089 Page 12

motion. In light of the remand, Gleason’s motion for judgment

on the agency record is denied as moot.

/s/ Richard W. Goldberg__
Richard W. Goldberg
Senior Judge
Dated: March 16, 2007
New York, New York
 UNITED STATES COURT OF INTERNATIONAL TRADE

GLEASON INDUSTRIAL PRODUCTS,
INC., and PRECISION PRODUCTS,
INC.,

Plaintiffs, Before: Richard W. Goldberg,
Senior Judge
v.
Court No. 06-00089
UNITED STATES,

Defendant,

and

CENTRAL PURCHASING, LLC,

Defendant-
Intervenor.

ORDER

Upon consideration of defendant’s partial consent motion
for voluntary remand and all other pertinent papers, and upon
due deliberation, it is hereby

ORDERED that defendant’s motion is GRANTED; and it is
further

ORDERED that plaintiff’s motion for judgment on the agency
record is DENIED as moot; and it is further

ORDERED that this case is remanded to defendant for
reconsideration of (1) whether CP’s welding carts have a
projecting edge that easily slides under a load and (2) whether
welding carts are specifically included within the scope of the
order due to the mention of “cylinder hand trucks”; and it is
further

ORDERED that defendant shall file its remand results with
the Court by June 14, 2007; and it is further

ORDERED that parties shall have until July 16, 2007 to file
comments on the remand results; and it is further
 ORDERED that parties shall have until July 31, 2007 to file
any responses to the comments.

SO ORDERED.

/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: March 16, 2007
New York, New York