Commerce Flips Scope Ruling on Modified Vertical Shaft Engines on Remand at CIT

The Commerce Department reversed its scope ruling on modified vertical shaft engines with horizontal crankshafts on remand at the Court of International Trade, now finding that the engines don't fit under the scope of the antidumping and countervailing duty orders on vertical shaft engines between 99cc and up to 225cc from China (Zhejiang Amerisun Technology Co. v. U.S., CIT # 23-00011).

The trade court had rejected the agency's scope ruling in February, finding that Commerce's interpretation of the scope language cut against "well-established legal precedent regarding scope rulings" (see 2402200080). Judge Jennifer Choe-Groves criticized the agency for using Wikipedia articles as evidence, finding that it exposed the weakness of the scope ruling.

Exporter Zhejiang Amerisun Technology Co. requested the scope ruling for the R210-S engines it imports from manufacturer Chongqing Rato Technology Co. Commerce's scope ruling looked at modified vertical shaft engines, like the R210-S, which are "single-cylinder, air-cooled, spark-ignited, non-road, internal combustion" engines used to power lawn mowers with a "horizontal crankshaft connected to a right-angle gearbox."

The scope of the orders covers "spark-ignited, non-road, vertical shaft engines, whether finished or unfinished, whether assembled or unassembled, whether mounted or unmounted, primarily for walk-behind lawn mowers." Commerce said in its scope ruling that while the modified engines have a horizontal crankshaft, they have a "vertical" power take-off shaft and that nothing in the scope language bars a gearbox linked to a shaft from being considered an integrated part of an engine.

The agency added that "primary interpretive sources," including a Penn State article on vertical engines, also backed the finding that the engines have a "vertical" orientation via its vertical power take-off shaft.

The court ruled that because "the scope doesn't specify that a right-angle gearbox connected to a horizontal crankshaft may be part of the engine, Commerce's finding that the scope does not contain an exhaustive list of components that may comprise an engine is unsupported by substantial evidence." Choe-Groves also said the Wikipedia articles and the academic article used by Commerce are "irrelevant" since they didn't address walk-behind lawn mowers or address secondary drive shafts.

On remand, Commerce said it "respectfully disagrees with the Court that" the scope language must say that a gearbox linked to a shaft is part of an engine for Commerce to find that this mechanism is an integrated part of a vertical shaft engine and that the agency may not rely on academic publications that "speak to engine structure" even if they aren't specific to lawn mowers.

"Nonetheless," Commerce said, it's excluding the R-210s engines from the orders' scope to comply with the court's ruling.