Commerce's Denial of Scope Ruling Request Not Reviewable, DOJ Tells Trade Court

The Commerce Department's decision to deny a scope ruling request is not a judicially reviewable action, the Department of Justice said in its motion to dismiss a case brought by three companies at the Court of International Trade. CIT jurisdiction will instead be established at the end of a changed circumstances review requested by the plaintiffs, DOJ said (Zhejiang Yuhua Timber Co. v. United States, CIT #21-00502).

The three companies, Zhejiang Yhua Timber Co., A-Timber Flooring Company and Mullican Flooring Co., challenge Commerce's decision to not undertake a scope inquiry as part of the antidumping duty investigation into multilayered wood flooring from China (see 2109210059). In the investigation, Commerce found a zero percent dumping margin for Yuhua, excluding it from the order. Nevertheless, the respondent had requested the scope ruling from Commerce to confirm that its wood flooring products imported by A-Timber are excluded from the order. After the request was denied, the plaintiffs then requested a changed circumstances review seeking the same result. The agency then initiated the review. Proceedings are ongoing.

DOJ moved to dismiss the scope ruling denial challenge, arguing that Commerce's move to deny the scope ruling request is not a reviewable decision. "A decision not to initiate a scope ruling is not enumerated as a reviewable determination under 19 U.S.C. § 1516a," the brief said.

DOJ also argued that the "true nature" of the plaintiffs' request is whether A-Timber should benefit from Yuhua's exclusion of the order and not truly a matter of whether a product is subject to the order. "Although citing Commerce’s scope regulations, the request did not focus on the description of the scope of multilayered wood flooring; indeed, the narrative of Yuhua’s request did not even discuss language from the scope of the Order," the brief said. "Rather, Yuhua’s request involved the nature of the sales channel between Zhejiang Yuhua Timber Co. Ltd and A-Timber to support its assertion that such entries should be excluded from the order."

Jurisdiction will instead be available once Commerce has completed its changed circumstances review, DOJ said. At that point, Yuhua can obtain relief through the CCR, and is currently doing so. This makes the plaintiffs' claims under Section 1581(i) inadequate since relief exists elsewhere, DOJ argued.

"Commerce determined that, because the basis of Yuhua’s request does not concern whether a particular product is included within the scope of the order, but rather a sales distribution channel, there was no lawful basis upon which to initiate a scope inquiry," the brief said. "Accordingly, Yuhua has not identified any wrongful agency action enabling 'the court to draw the reasonable inference that the defendant is liable for the misconduct alleged', and there is no apparent basis for Yuhua’s claims."