Importer Says Commerce Illicitly Extended AD/CVD Orders on Chassis to Parts

Importer Pitts Enterprises, doing business as Dorsey Intermodal, told the Court of International Trade that the Commerce Department illicitly turned the antidumping and countervailing duty orders on Chinese chassis and subassemblies thereof into orders covering parts of chassis. Filing a motion for judgment on Aug. 21, Dorsey said the entry of Chinese components in "separate, independent shipments" are "straightforwardly" not covered "unassembled subassemblies" (Pitts Enterprises v. United States, CIT # 24-00030).

Dorsey filed suit to contest Commerce's scope ruling that the company's chassis imports from Vietnam, made with Chinese-origin axles and landing gear leg components, are covered by the orders (see 2403070060). The company served as a petitioner for the original orders, but began importing chassis from Vietnam due to COVID-19-related supply constraints.

The orders say that individual components entered and sold by themselves from China aren't subject to the duties, but that parts "entered with or for further assembly with a finished or unfinished" Chinese chassis are subject to the orders. Covered goods include unfinished Chinese chassis, Dorsey conceded, though it said the Chinese-origin goods in its products "entered Vietnam alone in separate, independent shipments." The company said none of its shipments included all of the parts which would comprise subassemblies.

The importer argued that Commerce illicitly turned the orders into a "parts order." The company challenged the agency's finding that the parts entered into Vietnam constituted "unassembled subassemblies" and thus constituted "unfinished chassis," subject to the orders.

This ruling "defined covered 'unassembled subassemblies' and, therefore, 'unfinished chassis' of the scope Orders to mean separate, independent shipments of Chinese components," illegally expanding the orders, the brief said. While Commerce relied on the fact that multiple Chinese subassembly parts were imported into Vietnam, "by plain scope terms Chinese components are included within the scope of the Orders only insofar as they otherwise meet the definition of the Chinese scope Orders." By their plain wording, the orders don't cover parts, Dorsey said.

The importer said the scope ruling defies "ordinary language and common sense" as well as the "common meaning" of the term "unassembled." This term plainly "consists of the parts to put together and not a separate, independent component entered alone," the brief said. "There is no reason to depart from a straightforward, plain-meaning interpretation of the scope term 'unassembled.'"

The company added that Commerce's past practice backs the importer's read of the orders and that Commerce failed to carry out a proper (k)(1) analysis, instead making the determination solely based on the scope language.