Slip Op. 03 - 134
UNITED STATES COURT OF INTERNATIONAL TRADE
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TAK FAT TRADING CO., MEI WEI FOODS :
INDUSTRY CO., LTD., LEUNG MI INTERNA-
TIONAL, TAK YUEN CORP. and GENEX INTER- :
NATIONAL CORP.,
:
Plaintiffs,
:
v.
:
UNITED STATES, Court No. 00-07-00360
:
Defendant,
:
-and-
:
COALITION FOR FAIR PRESERVED MUSHROOM
TRADE, :
Intervenor-Defendant. :
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Opinion
[Plaintiffs' motion for judgment on the agency
record, vacating antidumping-duty-order scope
determination, granted.]
Decided: October 17, 2003
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Max
F. Schutzman, Erik D. Smithweiss and Mark E. Pardo) for the
plaintiffs.
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, and Velta A. Melnbrencis, Assistant Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice; and
Office of Chief Counsel for Import Administration, U.S. Department
of Commerce (John F. Koeppen), of counsel, for the defendant.
Collier Shannon Scott, PLLC (Michael J. Coursey and Adam H.
Gordon) for the intervenor-defendant.
AQUILINO, Judge: Before the court is plaintiffs' USCIT
Rule 56.2 motion for judgment on the administrative record wherein
Court No. 00-07-00360 Page 2
they seek vacation of the determination1 by the International Trade
Administration, U.S. Department of Commerce ("ITA") that their
product is within the scope of the Notice of Amendment of Final
Determination of Sales at Less Than Fair Value and Antidumping Duty
Order: Certain Preserved Mushrooms From the People's Republic of
China, 64 Fed.Reg. 8,308 (Feb. 19, 1999).
I
This antidumping-duty order was precipitated by
petition(s) filed by domestic U.S. mushroom producers requesting
investigation of certain preserved mushrooms imported from Chile,
China, India and Indonesia. The petitioners sought to exclude from
the investigation "'marinated', 'acidified' or 'pickled' mushrooms,
which are packed with solutions such as oil, vinegar or acetic acid
(HTS heading 2001.90.39)." Plaintiffs' Appendix, tab 1, p. 13. In
a letter supplementing the petition(s), they stated that marinated,
acidified and pickled mushrooms are all "prepared or preserved by
means of vinegar or acetic acid" and are therefore "covered under
HTS heading 2001.90.39". Plaintiffs' Appendix, tab 2, p. 4. The
petition also contained a footnote stating that its "scope . . .
comports with the Food and Drug Administration's ('FDA') standards
1
This determination has not been published in the Federal
Register but is presented in Appendix to Plaintiff's Brief in Sup-
port of Their Rule 56.2 Motion [hereinafter referred to as
"Plaintiffs' Appendix"], tab 13.
Background of this case is set forth in Tak Fat Trading Co. v.
United States, 24 CIT 1376 (2000), and Tak Fat Trading Co. v.
United States, 26 CIT , 185 F.Supp.2d 1358 (2002).
Court No. 00-07-00360 Page 3
of identity for canned mushrooms. 21 C.F.R. §155.201." Plain-
tiffs' Appendix, tab 1, p. 12.
A
Despite those particular references to the Harmonized
Tariff Schedule of the United States ("HTSUS") and the FDA's
standards of identity, neither the ITA's preliminary nor its
amended final determination of sales at less than fair value
includes them. Rather, the latter is stated to encompass
certain preserved mushrooms whether imported whole,
sliced, diced, or as stems and pieces. The preserved
mushrooms covered under this order are the species
Agaricus bisporus and Agaricus bitorquis. "Preserved
mushrooms" . . . have been prepared or preserved by
cleaning, blanching, and sometimes slicing or cutting.
These mushrooms are then packed and heated in containers
including but not limited to cans or glass jars in a
suitable liquid medium, including but not limited to
water, brine, butter or butter sauce. Preserved mushrooms
may be imported whole, sliced, diced, or as stems and
pieces. Included within the scope of the investigation
are "brined" mushrooms, which are presalted and packed in
a heavy salt solution to provisionally preserve them for
further processing.
Excluded from the scope of this investigation are
the following: (1) all other species of mushroom,
including straw mushrooms; (2) all fresh and chilled
mushrooms, including "refrigerated" or "quick blanched
mushrooms"; (3) dried mushrooms; (4) frozen mushrooms;
and (5) "marinated," "acidified" or "pickled" mushrooms,
which are prepared or preserved by means of vinegar or
acetic acid, but may contain oil or other additives.
The merchandise subject to this investigation is
classifiable under subheadings 2003.10.0027, 2003.10.00-
31, 2003.10.0037, 2003.10.0043, 2003.10.0047, 2003.10.00-
53, and 0711.90.4000 of . . . HTS[US]. Although the[se]
subheadings are provided for convenience and Customs
purposes, the Department's written description of the
merchandise under the order is dispositive.
64 Fed.Reg. at 8,309.
Court No. 00-07-00360 Page 4
B
In its preliminary determination of material injury, the
International Trade Commission ("ITC") concluded that, although
there are some physical and manufacturing-process similarities be-
tween marinated, acidified or pickled mushrooms and the preserved
mushrooms under investigation,
on the whole there is little interchangeability, with
consumers perceiving the two products differently. There
are also differences in physical characteristics,
particularly taste, between the two products. Conse-
quently, for purposes of these preliminary determinations
we find that marinated, acidified and pickled mushrooms
are not within the like product subject to these investi-
gations.
Certain Preserved Mushrooms From Chile, China, India, and Indone-
sia, ITC Pub. No. 3086, p. 10 (Feb. 1998). Its final determination
in this matter adopted, for like-product2, the reasoning of Certain
Preserved Mushrooms From Chile, ITC Pub. No. 3144, p. 6 (Nov.
1998), which stated that,
[a]lthough preserved mushrooms and marinated mushrooms
share some common channels of distribution and production
facilities, they have different tastes that limit
marinated mushrooms' end uses, very limited inter-
changeability, are perceived to be different products by
both producers and customers, and sell in different price
ranges. We believe that the distinctions between
preserved and marinated mushrooms establish a "clear
dividing line." We consequently do not include marinated
mushrooms in the domestic like product.
2
Certain Preserved Mushrooms From China, India, and Indo-
nesia, ITC Pub. No. 3159, p. 5 (Feb. 1999).
Court No. 00-07-00360 Page 5
C
The plaintiffs herein are a producer, an exporter, and
importers of
marinated or acidified mushrooms of the species agaricus
bisporus that are . . . washed, blanched in water . . .
and then placed in . . . cans [that] are then filled with
a marinade consisting of . . . water[,] salt [ ], sugar
[ ], vinegar [ ], acetic acid [ ], yeast extract [ ],
citric acid [ ], MSG [ ], vitamin C [ ], flavorings [ ],
and spices [ ]. . . . The finished equilibrium pH of
the mushrooms is controlled at or below 4.6.4
Defendant's Appendix, Exhibit 1, p. 2 (footnotes 2 and 3 omitted;
brackets in original). The footnote 4 to the foregoing product
description states:
If an acidified food is found to have a pH above
4.6, it must be subjected to further thermal processing
as a low acid food for safety reasons. 21 C.F.R. §114.-
89. The manufacturer of the subject product both acidi-
fies and thermally processes its mushrooms.
Id. The plaintiffs requested the scope determination by the ITA,
pointing out that the petition(s) "excluded marinated and acidified
mushrooms not meeting the [FDA's] standard for canned mushrooms"3,
which does not provide for vinegar or acetic acid.4 Whereupon
3
Defendant's Appendix, Exhibit 1, p. 2.
4
See 21 C.F.R. §155.201(a)(3) (2000). Canned mushrooms are
defined as
food properly prepared from the caps and stems of
succulent mushrooms conforming to the characteristics of
the species Agaricus (Psalliota) bisporus or A. bitor-
quis, . . . ; and may contain one or more safe and suit-
able optional ingredients specified in paragraph (a)(3)
of this section. The food is sealed in a container and,
before or after sealing, is so processed by heat as to
prevent spoilage.
(footnote continued)
Court No. 00-07-00360 Page 6
their position was and is, "[b]ecause the subject marinated mush-
rooms . . . do not meet that FDA standard, they are outside the
scope of the antidumping duty order." Id.
After a preliminary ruling and considering comments
thereon, the ITA issued its final determination that
the "marinated or acidified" mushrooms produced, exported
or imported by [the plaintiffs] are within the scope of
the antidumping duty order on [certain preserved mush-
rooms] from the PRC based on their acetic acid content
level.
Plaintiffs' Appendix, tab 13, second page. It is based on the pe-
titioners' use of HTSUS subheading 2001.90.39 to define the
products they intended to exclude from this matter and the agency's
21 C.F.R. §155.201(a)(1) (2000). Those optional ingredients are:
(i) Salt.
(ii) Monosodium glutamate.
(iii) Disodium inosinate complying with the provisions
of Sec. 172.535 of this chapter.
(iv) Disodium guanylate complying with the provisions
of Sec. 172.530 of this chapter.
(v) Hydrolyzed vegetable protein.
(vi) Autolyzed yeast extract.
(vii) Ascorbic acid (vitamin C) in a quantity not to
exceed 132 milligrams for each 100 grams (37.5
milligrams for each ounce) of drained weight of
mushrooms.
(viii) Organic acids (except no vinegar is permitted),
only where the inside metal of the container is
fully enamel-lined and in glass containers with
fully enamel-lined caps. Ascorbic acid as provid-
ed for in paragraph (a)(3)(vii) of this section.
(ix) Calcium disodium ethylenediaminetetraacetate
(CaNa2 EDTA) in a quantity not to exceed 200 parts
per million for use to promote color retention.
Ibid.
Court No. 00-07-00360 Page 7
"appropriat[ion of] the phrase 'prepared or preserved with vinegar
or acetic acid' directly from the HTS heading". Id., seventh page.
The ITA read that phrase as having been interpreted by Customs to
require a minimum 0.5 percent acetic-acid level. See id., ninth
page. As plaintiffs' product, admittedly, does not contain that
much, the agency determined it to be within the ambit of its anti-
dumping-duty order. See id., second and fifth pages.
II
Jurisdiction over this case is pursuant to 28 U.S.C.
§§ 1581(c) and 2631(c). The standard of review is whether the
determination is unsupported by substantial evidence on the record
or otherwise not in accordance with law. See 19 U.S.C.
§§ 1516a(a)(2)(B)(vi), 1516a(b)(1)(B)(i). Substantial evidence is
"such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion." Consolidated Edison Co. v.
NLRB, 305 U.S. 197, 229 (1938). It must also be noted that, on
questions of scope, the ITA has "broad authority to interpret its
own antidumping duty orders". INA Walzlager Schaeffler KG v. Unit-
ed States, 108 F.3d 301, 307 (Fed.Cir. 1997). Such determinations
are made pursuant to 19 C.F.R. §351.225, which states that, in
considering whether a particular product is included
within the scope of an order . . . , the Secretary will
take into account the following:
(1) The descriptions of the merchandise contained in
the petition, the initial investigation, and the determi-
nations of the Secretary (including prior scope determi-
nations) and the Commission.
Court No. 00-07-00360 Page 8
(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 adver-
tised and displayed.
19 C.F.R. §351.225(k) (2000).
A
None of the parties suggests resort to these enumerated
criteria.5 Rather, each side argues for a different interpretation
of the petition language and the agency determination(s). See,
e.g., Plaintiffs' Brief, pp. 12-13; Defendant's Memorandum, p. 31;
Response Brief of Defendant-Intervenor, pp. 15-16.
The plaintiffs reiterate that the "petitioners intended
the dumping order to cover only products meeting the 'standard of
identity' for 'canned mushrooms'".6 They further argue that nei-
5
Indeed, as noted by the ITA in its preliminary ruling, the
FDA standard of identity
is not controlling of the scope of the order . . . ,
which contains intentionally broad text so as to include
all preserved mushrooms, with some very specific
exceptions.
Plaintiffs' Appendix, tab 12, numbered pages 8-9.
6
Plaintiffs' Brief, pp. 16-17. However, as they explained in
a letter supplementing the petition, the petitioners were
concerned about circumvention by the placing of preserved
mushrooms in containers other than cans, such as jars or
tubs, and therefore . . . have defined the scope as
"certain preserved mushrooms."
Plaintiffs' Appendix, tab 2, numbered page 5.
Court No. 00-07-00360 Page 9
ther the plain language of the order nor the record support use of
the 0.5 percent acetic-acid-level test to determine whether their
product is within the scope of the order.
The defendant maintains that the order
reflected the petitioners' intent to exclude from the
scope only such mushrooms that are "prepared and pre-
served by means of vinegar or acetic acid," even though
it omitted the reference to HTS subheading 2001.90.39.
Defendant's Memorandum, pp. 30-31. The intervenor-defendant also
contends that the exclusionary language should be interpreted in
conformity with the HTS subheading. See Response Brief of Defend-
ant-Intervenor, pp. 15-16.
B
The merchandise specifically excluded from this matter
was described in the ITA's notices of initiation of investigation
and of the preliminary, final, and amended final determinations
with identical language, to wit:
"marinated," "acidified" or "pickled" mushrooms, which
are prepared or preserved by means of vinegar or acetic
acid, but may contain oil or other additives.7
The ITC also excluded from its preliminary and final determinations
"marinated, acidified and pickled mushrooms", stating that they
7
63 Fed.Reg. at 5,361; at 41,795; at 72,256; 64 Fed.Reg. at
8,309. The language in the petition differed somewhat from that of
the ITA, excluding
"marinated", "acidified" or "pickled" mushrooms, which
are packed with solutions such as oil, vinegar or acetic
acid (HTS heading 2001.90.39).
Plaintiffs' Appendix, tab 1, numbered page 13.
Court No. 00-07-00360 Page 10
"defined the domestic like product to encompass only the types of
preserved mushrooms within Commerce's scope definition." ITC Pub.
No. 3086, pp. 5, 10; ITC Pub. No. 3159, p. 5.
On its face, this administrative exclusion is clear, and
the court so finds. After review of the agency record developed in
connection herewith, the court also concludes that plaintiffs'
product is just as clearly within the ambit of the exclusion. The
record does not support a description of that product other than as
posited by the plaintiffs, supra, to wit, mushrooms marinated or
acidified, packed in cans with water, salt, sugar, vinegar, acetic
acid, yeast extract, citric acid, MSG, vitamin C, flavorings, and
spices, the finished equilibrium pH of which is controlled at or
below 4.6.
Indeed, the defendant does not argue otherwise. Rather,
it explains in the exercise of its broad discretion that the
petitioners clearly referred to the HTS number in the
petition, and cited to specific descriptive language of
the HTS heading in the Petition Supplement when clarify-
ing for the Department the scope of the excluded merchan-
dise. Although we omitted from the exclusion clause of
the scope language the HTS headings provided by the
petitioners, we appropriated the phrase "prepared or
preserved with vinegar or acetic acid" directly from the
HTS heading for products classified under HTS heading
2001. . . .
Regarding Tak Fat's arguments with respect to the FDA
standards for acetic acid content, we reiterate that we
have considered all of the evidence on the record, and we
continue to find more compelling the evidence that the
petitioners relied upon the language which was taken from
the HTS subheading and which had an established meaning
to describe the excluded merchandise.
Plaintiffs' Appendix, tab 13, numbered pages 6-7.
Court No. 00-07-00360 Page 11
This being the case, it is necessary to consider that
part of the HTSUS referred to by the agency, namely:
2001 Vegetables, fruit, nuts and other edible parts
of plants, prepared or preserved by vinegar or
acetic acid:
Other:
Other:
Vegetables:
2001.90.39 Other[.]
The "established meaning" of this subheading to which they also
refer and rely emanates from a 1983 ruling letter (069121) of the
U.S. Customs Service which this court has examined. It reflects
thorough reasoning, but that analysis necessarily focused on
interpretation of item 141.77 of the Tariff Schedules of the United
States ("TSUS") (1980), the heading for which encompassed "Vegeta-
bles (whether or not reduced in size), packed in salt, in brine,
pickled, or otherwise prepared or preserved". And note 1(b) to
that heading provided that
the term "pickled" means prepared or preserved in vine-
gar or acetic acid whether or not packed in oil or
containing sugar, salt, or spices.
Underscoring in original. Hence, the issue for consideration and
resolution by Customs was refinement of that term, not the above
phrase of the HTSUS "appropriated" by the ITA covering vegetables
Court No. 00-07-00360 Page 12
"prepared or preserved by vinegar or acetic acid". Resolution of
that issue led to the following holding by the Service:
Based on trade, technical, and common understanding of
the term "pickled," the obvious intent of Congress in its
use thereof was to require more than a mere minimal
amount of acetic acid in order to result in a "pickled"
product for tariff purposes. The requirement of Customs
that such a product contain a minimum of 0.5 percent
acetic acid (subject to allowable tolerances) in the
equilibrated product comports with these bases of [w]ell-
settled principles of Customs law interpreting the scope
of various terms . . ..
HQ 069121, p. 10, para. 1. See id., p. 4.
This quantitative holding may still be of some moment for
pickled products8, but Congress has left that organoleptic term out
of the HTSUS relevant to this case with no indication that the 1983
approach to enforcement of the TSUS continue now.
Here, there is no claim or showing on the record that
plaintiffs' product is pickled in accordance with the Customs
concept of acidity, but this void cannot be dispositive since the
ITA's language of exclusion is in the disjunctive, viz., marinated,
acidified, or pickled mushrooms. On the other hand, the record
does support the fact that plaintiffs' product is both marinated
and acidified.
Finally, the HTSUS subheadings referred to by the agency
in its amended final determination of sales at less than fair
8
Cf. HQ 957041 (Nov. 10, 1998); HQ 959313 (Feb. 20, 1997); HQ
956850 (March 22, 1996); HQ 952738 (Jan. 27, 1993); HQ 085838 (Dec.
21, 1989).
Court No. 00-07-00360 Page 13
value, supra, 64 Fed.Reg. at 8,309, as genuinely encompassing the
merchandise subject thereto are headed by the following descrip-
tions:
2003 Mushrooms and truffles, prepared or pre-
served otherwise than by vinegar or acet-
ic acid[.]
0711 Vegetables provisionally preserved (for
example, by sulfur dioxide gas, in brine,
in sulfur water or in other preservative
solutions), but unsuitable in that state
for immediate consumption[.]
The record developed does not place plaintiffs' product under
either heading. There is no showing, for example, that those
mushrooms are prepared or preserved "otherwise" than by vinegar or
acetic acid.
III
Given the lack of substantial evidence in support of the
ITA's scope determination contested herein and the inapposite
standard of law exclusively relied on by the agency in connection
therewith, plaintiffs' motion for judgment upon the record must be
granted.
Decided: New York, New York
October 17, 2003
Judge