CIT Spurns AD/CVD Scope Ruling on Horizontal Shaft Engine, Blasts Use of Wikipedia as Evidence

The Court of International Trade on Feb. 20 rejected a Commerce Department scope ruling finding R210-S engines made by Chonging Rato Technology Co. fall within the scope of the antidumping and countervailing duty orders on vertical shaft engines between 99cc and up to 225cc and parts thereof from China.

Judge Jennifer Choe-Groves excoriated Commerce for its interpretation of the orders' scope language, finding it to be "inconsistent with well-established legal precedent regarding scope rulings," along with the agency's use of Wikipedia articles as evidence, noting that it exposes the weakness of the agency's claims. Commerce had attempted to justify its conclusion that the "power take off shaft" in the R210-S engine was "modified vertical" rather than horizontal by citing Wikipedia articles.

The court said that it rejects the "reliability of Wikipedia articles as authoritative evidence deserving of judicial notice," adding that the articles don't have the "editorial controls of other published work and may be manipulated by anyone." Choe-Groves cited various other judicial rebukes of Wikipedia articles and noted that Commerce itself "has even rejected Wikipedia as evidence" in CIT cases.

"It is remarkable that Commerce has rejected Wikipedia as a reliable source of evidence for over a decade, and here Commerce cites Wikipedia as evidence before this Court," the judge said. "The Court views Commerce’s heavy reliance on Wikipedia articles as an indication of the weakness of Commerce’s scope determination.”

Alexander Keyser, counsel for exporter and plaintiff Zhejiang Amerisun, said that while Choe-Groves discussed "the issue of Commerce relying on Wikipedia articles" during oral argument, he is "surprised how much she truly went after Commerce for it. I would have expected something, but maybe not to the degree that she went. Glad that she did though."

As for the engine itself, exporter Zhejiang Amerisun Technology said the R210-S engines have a newly designed horizontal shaft engine that falls outside the orders' scope. The court noted that since the item is new to the market, it was not contemplated when the orders were drafted to cover vertical shaft engines. In its scope ruling, Commerce considered the product's horizontal engine plus its vertical gearbox together as one single engine to say that there was a vertical component of the product that was covered by the orders.

Choe-Groves first addressed whether the R210-S engine included the gearbox and vertical drive shaft, ultimately finding for Zhejiang Amerisun on this issue. The item's manual clearly delineates that the product is made of a horizontal shaft engine and a vertical gearbox, supporting the exporter's position that the gearbox is separate from the horizontal engine.

Commerce argued that since the orders don't include an exhaustive list for the parts needed for an engine to be covered by the orders, the scope language doesn't preclude a gearbox linked to a shaft from being considered an integrated part of the R210-S engine. Choe-Groves found this take to cut against "well-established" precedent on scope rulings.

In Duferco Steel v. U.S., the U.S. Court of Appeals for the Federal Circuit established that an order's scope can be interpreted as including subject merchandise only if it has language that specifically includes the subject goods or may be reasonably interpreted to include the product. "Significantly, Commerce's position that the scope language's silence permits Commerce to interpret the subject merchandise within the scope of the Orders is the opposite of the principle set forth in Duferco," the opinion said.

Since the scope language doesn't specify that a gearbox linked to a shaft is part of the engine or any language that "reasonably suggests such a result," and Commerce's interpretation goes against well-established precedent, the scope decision is neither backed by substantial evidence nor correct as a matter of law, the judge said.

Zhejiang Amerisun also said the orders only cover engines with a vertical "power take off shaft," arguing that its product has a horizontal power take off shaft. Commerce defined a power take off shaft as the "mechanism through which power is transmitted from the engine to an attached implement (such as a blade), and it can be a secondary drive shaft (i.e., a shaft connected via a gearbox (or transmission) to the crankshaft).”

The exporter challenged the second part of this definition, arguing that the evidence Commerce used in drafting it, which included the Wikipedia articles and an article from Pennsylvania State University, was unreliable. Choe-Groves agreed, finding them unreliable and also irrelevant because none of them discuss a power take off shaft in the context of a walk-behind lawn mower or provide information to show how a power take off shaft can be a secondary drive shaft such as a shaft connected via a gearbox to the crankshaft.

On the prospect of Commerce going back to find additional evidence to make its point in relation to the power take off shaft, Keyser said that "it would be difficult for Commerce to find that the take-off shaft was vertical given that determination by the Court. I do not think it's impossible that Commerce tries to find a way, but I am not sure how they could determine the engine to have a vertical power take off shaft if that gearbox is not a part of the engine."

(Zhejiang Amerisun Technology Co. v. United States, Slip Op. 24-20, CIT # 23-00011, dated 02/20/24; Judge: Jennifer Choe-Groves; Attorneys: Brittney Powell of Fox Rothschild for plaintiff Zhejiang Amerisun; Claudia Burke for defendant U.S. government; Daniel Schneiderman of King & Spalding for defendant-intervenor Briggs & Stratton)