Aluminum Ex-trusions Fair Trade Committee v. STATES appellee United States
Oral Argument — 10/05/2020 · Case 19-2129 · 28:05
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Appellee Attorney
United States Court of Appeals for the Federal Circuit is now open and in session.
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God save the United States and this Honorable Court.
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Judge Lourie
Good morning, ladies and gentlemen.
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We have five cases on the calendar this morning, three patent cases,
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a case from the Court of Federal Claims, a case from the Court of International Trade.
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Two cases are being argued.
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The first is defectless aluminum versus the United States, 19-21-29.
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Mr. Beamer, is it?
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Appellant Attorney (Thomas Steven Biemer)
Yes, Your Honor.
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Judge Lourie
Please proceed.
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Appellant Attorney (Thomas Steven Biemer)
May it please the Court, good morning.
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My name is Tom Beamer, and I represent the appellant Perfectus Aluminum.
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This appeal hinges on the interpretation of an anti-dumping order.
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Here, Commerce and the CIT interpreted that order to apply to finished merchandise,
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in this case aluminum pallets, that are fully and finally assembled
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as a defectless aluminum.
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At the time of importation.
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In doing so, they both expanded the scope of the order
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and explicitly modified the exclusion in the order.
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Judge Lourie
But tell us, isn't the order pretty clear?
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Contained to aluminum extrusions and excluded finished merchandise
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containing aluminum extrusion as parts.
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But if the extrusions are all aluminum, then they're not as parts.
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And therefore, they're not excluded.
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Why isn't that clear?
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Appellant Attorney (Thomas Steven Biemer)
Your Honor, there are two things in that question.
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The order makes absolutely clear that there's a fundamental split
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between aluminum extrusions that are imported into the United States as parts
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that become a component of some other merchandise after importation.
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And aluminum extrusions that are contained as parts merchandise
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that are assembled at the time of importation.
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Aluminum pallets are questioned.
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Extrusions as assembled at the time of import.
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Just like an aluminum chair or aluminum ladder.
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The fact that the quote and the additional requirement
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that's not found anywhere in the language of the order itself.
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And that requirement is that you have to have a non-aluminum extrusion as a part.
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There's nothing about the language as part.
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It's about the material composition of the part.
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And for that reason,
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Judge Lourie
if there's nothing else there, the aluminum isn't the part, it's the totality.
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Appellant Attorney (Thomas Steven Biemer)
Your Honor, respectfully, that's incorrect.
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I mean, a ladder is made up of a number of parts that can be all aluminum
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extrusions or it can be all plastic or it can be all steel.
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The critical issue is whether or not they're separate aluminum
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extrusions as part.
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And when you look at the language that talks time of importation for final or
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assembled after importation, that's right from the language of the order.
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And there's nothing, nothing,
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something else after it's imported into the United States.
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In fact, in the whirlpool of, excuse me.
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Judge Stoll
Hi, thank you for stopping.
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I just wanted to ask you a question.
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I understand the point you're making.
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One question I wanted to ask you that goes directly to that point is I wanted
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to ask you about what I thought was decent reasoning by the Commerce Department
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at page J32.
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And it said,
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an interpretation which would allow products which consist entirely of aluminum
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extrusions to be excluded from the scope of orders would allow the finished
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merchandise exclusion to swallow the role embodied by the scope.
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And so the additional reason in support of Commerce's as parts interpretation
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that Judge Rory was asking you about, what is your response to that,
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that point about how your interpretation would swallow the rule embodied by the
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scope?
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Appellant Attorney (Thomas Steven Biemer)
Thank you, Your Honor.
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One, it wouldn't swallow the rule because it still requires that the product have
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multiple parts.
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The language as parts talks about more than one components of a product.
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Just like an aluminum ladder has many parts, they may all be made of aluminum.
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A pallet has multiple parts.
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They may all be made of aluminum.
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The distinction the order makes is between finished merchandise,
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which is finally and completely assembled that contains aluminum extrusion,
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as parts, which the pallet does, the ladder does, the chair does, and an aluminum extrusion
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that's going to be incorporated into some other product after importation, which is
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the language I just read from the order.
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And it's beyond dispute that the pallet is not incorporated into something else after
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importation.
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And, Your Honor, the second point I want to make about your question, because it's a
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question I thought about, is that that issue was specifically addressed and rejected by the
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world pool case.
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In the world pool case, on page 1306, which is after the meridian case, which deals with
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a separate exception that dealt with the finished kit exception, world pool distinguished meridian.
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And what world pool said is that, in that case, commerce found unconvincing the notion
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product made entirely of aluminum extrusion that is unassembled and contains fasteners
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would be within the scope of the order.
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And the second point I want to make is that, in the world pool case, commerce found unconvincing
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the same product completely assembled at the time of importation would be outside the scope
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of the order.
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The exact same argument that they're making here.
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And this court, in world pool, rejected that argument.
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And what the court said is that there's a good reason to treat finished merchandise
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differently than kits.
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And what the court said, and this is on page 1310, and I think it directly addresses and
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rejects the argument that they're making.
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And I'm going to...
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Excuse me, I'm sorry.
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I'm going to quote this because I think the language is so important.
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And this is found on page 1310 of world pool.
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We therefore agree with CIT that if commerce had actually intended to sweep into the scope
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all finished merchandise consisting solely of aluminum extrusion components and fasteners,
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it would have done so in the scope language rather than expressly confining its fastener
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exception to the finished goods kit exclusion, close quote.
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And so that's the argument commerce is making here, that the scope of this order was intended
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to encompass items made up entirely of aluminum extrusions and fasteners, whether they're
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fully assembled or not.
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And that is the exact same argument, Your Honor, that world pool rejected.
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And what world pool said is that...
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Judge Stoll
Can I ask you a question?
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I just wanted to ask you a question about world pool.
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Can you remind...
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I mean, is that a case that involved a product made exclusively of extruded aluminum components?
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Appellant Attorney (Thomas Steven Biemer)
Your Honor, that was a case that involved a handle and a fastener at the top of the
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handle.
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And it was a sub-assembly that became part of a refrigerator.
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And it was a handle that would go on certain appliances.
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And so this exact argument was made and rejected...
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Judge Stoll
The question is whether it included non...
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That's my question.
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The question is whether it includes non-extruded aluminum.
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Appellant Attorney (Thomas Steven Biemer)
As a fastener, Your Honor.
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Judge Stoll
Okay, thank you.
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Appellant Attorney (Thomas Steven Biemer)
And so...
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But the language that I just read from is indicative of why the argument that is being
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made by commerce in this case is incorrect.
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Because what that language says is that if commerce wanted to include items made up entirely
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of aluminum extrusions and fasteners, here an aluminum pallet welded together with...
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It's a fastener.
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It would have done so in the scope section.
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Rather than limiting it to the exclusion for finished kits.
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Finished kits has a separate exclusion that has no analog in the finished merchandise section.
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And that is that it doesn't get outside the scope just because it has all aluminum extrusions
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and you include fasteners.
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And so what the court said in Whirlpool is there's a good reason between distinguishing
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between products which are fully and finally assembled.
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At the time of importation and kits.
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Because when the kit comes in, it's easy just to take the extrusion and throw the fastener
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out.
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But if it's fully and finally assembled at the time of importation, you've got to go
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backwards in the manufacturing chain.
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So that's what Whirlpool specifically addressed and rejected.
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And here, I just want to emphasize again, there is nothing about the language as parts
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that talks about what the composition of the part is going to be.
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Is going to be.
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And in the Rubbermaid case, which I understand it's not binding on this court.
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But in the Rubbermaid case, they made that exact point.
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And they said a product can be made entirely of plastic and it's still finished merchandise.
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Language of the order says, finished merchandise containing aluminum extrusions and finally
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assembled at the time of importation.
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An aluminum pallet, an aluminum chair, an aluminum ladder, check off those boxes.
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And under the plain language.
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Of the order, they're excluded and the requirement, the additional requirement that commerce is
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added here, that it has to have a non aluminum excluded piece as a part was rejected in the
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Whirlpool logic that I just read to your honor.
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And so when you apply the plain language of this order, when you look at the scope language,
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which specifically distinguishes between finished merchandise.
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And parts which become a component of something else after it arrives in the United States.
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It's absolutely clear under that plain logic, that plain language, that an aluminum ladder and aluminum pallet and aluminum chair and aluminum table are final finished merchandise.
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They don't become part of something else as long as they're completely and fully assembled at the time of importation.
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And.
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It doesn't, it doesn't matter, excuse me, add an additional requirement to that because it's not found in the plain language of the order.
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The fundamental distinction that set out in the order, which is reinforced in the exclusion, which only requires two things that it be fully and finally assembled at the time of importation.
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And that it have aluminum extrusions as parts, meaning multiple more than one.
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But this way that does make sense because that.
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It includes someone when saying, well, look, the full itself is a final completed product.
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No, the fence pole becomes part of the fence.
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The window sill becomes part of the window.
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The aluminum frame becomes part of the frame.
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But the pallet, the chair, the ladder don't become part of anything else.
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They're final and complete at the time of importation.
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As a result, not within the scope and they're within the exclusion.
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And the only way commerce could get there.
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By adding this requirement that it has to have something other than an aluminum extrusion component, which again, on page 1310 of Whirlpool, after Meridian, dealt with the express exclusion that's before the court today, the court rejected the logic of that principle.
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And I'll reserve the rest of my time.
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Judge Lourie
Right on time, counsel, we'll save it for you.
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Ms. Lee.
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Appellee Attorney (Robert E. Defrancesco)
Good morning, Your Honors.
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May it please the court.
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Perfect.
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Perfect.
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Perfect.
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Perfect.
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The pallets are made solely from extruded aluminum and fit squarely within the aluminum extruded anti-dumping and countervailing duty orders.
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Professors as goods, despite what it may say, meets the plain language of the orders.
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The pallets are made from series six alloy produced from an extrusion process in the shape and form of profiles and the aluminum extrusion were cut to length and welded together in the form of a pallet.
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And the pallets meet all of these physical characteristics, which are provided for explicitly under the orders.
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In addition, the orders also state that subject extrusions may be referred to by their end use.
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Here, Perfectus' product is referred to by its end use as a pallet,
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and such products are within the orders if they otherwise meet the scope definition,
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which they do, regardless of whether they are ready for use at importation.
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So aluminum products referred to by their end use can be finished goods.
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Just because an aluminum extruder product may be characterized as having a particular use
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doesn't deny the fact that it is still aluminum subject to the orders.
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Now, Council was saying, and finds significant, that its pallets are only made of parts,
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and I would submit that Council has not read the entirety of the orders,
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because subject aluminum extrusions may be described as parts for final finished products
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that are assembled after importation,
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but they also may be described as partially assembled goods or subassemblies,
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and they may be identified with,
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as a reference to their end use, like pallets.
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So the significant point here is that the order covers aluminum extrusions,
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and we shouldn't forget that.
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But Perfectus takes issue with the straightforward analysis
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to argue that its pallets are not subject to the orders.
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And specifically, Perfectus claims that its pallets are not subject to the orders
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because they fall outside of the finished merchandise,
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or, sorry, they fall within the finished merchandise exclusion.
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But again, Perfectus' pallets are comprised solely and exclusively of subject aluminum extrusions.
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The exclusion defines merchandise as containing aluminum extrusions as parts
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that are fully and permanently assembled and completed at the time of entry,
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such as finished windows with glass, doors with glass or vinyl,
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picture frames with glass pane and backing material, and solar panels.
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So to fall within the finished merchandise exclusion,
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the product must have both aluminum extruded parts as well as non-aluminum extruded parts.
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And we know this by looking at the language.
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In order to give significance,
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to the as-parts language as an exclusion,
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the parts have to refer to both aluminum extruded parts as well as non-aluminum extruded parts.
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Otherwise, we would be looking at something that would contain aluminum extrusions
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that are fully and permanently assembled.
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And as Your Honor recognized, such a reading would be overbroad,
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and the exclusion would swallow the rule embodied by the order.
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The words containing, assembled, and as-parts, read in context,
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necessitates a construction that encompasses both aluminum extrusions and non-aluminum extruded parts.
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And the reading also comports with the exemplars of the finished merchandise exclusion.
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Doors with glass or vinyl, picture frames with glass pane and backing material,
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windows with glass and solar panels.
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The commonality among these examples is that they are finished products
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that obviously contain an extruded aluminum piece along with significant non-aluminum extruded components.
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And Perfectus' pallets, it cannot be denied, are unlike the exemplars.
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There are no non-extruded aluminum parts.
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The product is solely and exclusively comprised of aluminum extrusions.
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Now, counsel dismisses the case where this court in Meridian Products analyzed and considered the companion finished goods kit exclusion.
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But it's significant because the analysis applies here.
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The court recognized that the exclusions involved both aluminum extrusions and non-aluminum extrusions as parts,
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and finished merchandise that is excluded from the order.
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In fact, it said that the basic device, the product, that is excluded from the order, is the product.
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So, the difference between the products that contain non-aluminum extrusion parts are excluded
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versus products that contain only aluminum extruded parts, which are not excluded.
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And that's significant.
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With regard to Whirlpool, the Whirlpool case that is referred to,
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it's like the Whirlpool case involved a piece of aluminum along with non-extruded aluminum pieces,
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two plastic end caps along with some fasteners to attach those end caps.
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It's an MD issue.
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So, the question there was whether or not the fasteners language from the finished goods kit exclusion
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could be applied to the finished merchandise exclusion.
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And the court concluded that it could not.
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So, the quote that counsel refers to at page 1310 merely refers to that.
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What it's saying is that the fasteners language would have been put into the finished merchandise exclusion
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if they wanted the fasteners language to be there.
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It doesn't say anything else about it.
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It only being finished merchandise and without regard to what the material of the parts is.
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Getting back to the finished merchandise exclusion,
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there's also additional support found in Exhibit I-5 to the petitions.
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It's similar to the orders in that it identifies non-subject merchandise as fully assembled finished goods
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containing aluminum extrusions and lists, windows, doors, and solar panels,
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which is very much like the exemplars in the exclusion.
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And additionally, Commerce's scope rulings also support this information.
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It shows that Commerce has been consistent in applying the finished merchandise exclusion
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to products that have some components besides aluminum extrusions.
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So, in plain language, as counsel says, it's like where it claims that it does not encompass its pallets,
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absolutely does.
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In fact, again, we have to remember that this is an aluminum extrusion order.
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And so, it's going to encompass aluminum extrusions.
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And it encompasses not only parts but partially assembled merchandise
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as well as goods that could be described by their end use,
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which absolutely include finished merchandise.
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So, in conclusion, Perfectus's pallets are constructed only of in-scope aluminum extrusions,
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which are covered by the plain terms of the orders.
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And we ask that the court uphold the trial court's decision affirming Commerce's determination.
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Judge Lourie
Your Honors have no other questions.
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Appellee Attorney (Robert E. Defrancesco)
Pardon?
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Judge Lourie
What about the fact that the ruling covers products not in production?
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Appellee Attorney (Robert E. Defrancesco)
So, the ruling, first of all, they are, the reading of in production, currently in production,
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is taken by counsel as being a literal in production.
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So, Commerce has a practice of not issuing advisory opinions on hypothetical products.
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However, this is neither of those.
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It's not a hypothetical product.
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It has been imported.
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It has been produced.
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It's like the fact that it isn't actually in production at the moment that the scope ruling is issued is of no consequence.
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Because we are looking at actual products.
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And there is, it would be burdensome and overbroad and it would be untenable for Commerce to have to constantly monitor
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exactly a point in time.
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At which a company, besides Perfectus, because this scope ruling applies to all exporters and producers,
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of whether or not they are actually producing something.
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Judge Lourie
So, the key here is...
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Presumably, they wouldn't be arguing about it if it were purely hypothetical.
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Appellee Attorney (Robert E. Defrancesco)
Presumably, Your Honor.
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It's like, but here we absolutely know that they have imported it.
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It's like they, it's like the record shows that in 2000, a couple of entries in 2012, they absolutely imported it.
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Their predecessor company did do that.
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And they themselves have admitted that they've imported it.
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So, it is absolutely not a hypothetical product.
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And so, Commerce absolutely was correct in issuing the scope ruling.
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I hope that answers your question, Your Honor.
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Judge Lourie
Yes, thank you.
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Appellee Attorney (Robert E. Defrancesco)
So, again, Perfectus' pallets have, are comprised solely and exclusively of in-scope aluminum extrusions.
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They clearly fall within the order.
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It's a...
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And we ask that the Court uphold the Trial Court and Commerce's determination.
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If Your Honors do not have any further questions, I'll end it here.
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Judge Lourie
Thank you, Counsel.
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Mr. DeFrancesco has a couple of minutes representing the Committee, I gather.
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Appellee Attorney
Yes, Your Honor.
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Thank you.
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And Your Honors, may it please the Court, Robert DeFrancesco, on behalf of the defendant,
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Appellee's Aluminum Extrusions Fair Trade Committee.
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I just want to make two quick points.
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First, with respect to the Whirlpool case, an earlier question from Judge Stoll asked
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whether those appliance handles contained non-extruded parts.
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The answer, I believe, that was given was incorrect.
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So, there were two appliance handle cases that were before the Court at that time.
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The Whirlpool case that we just talked about and the Meridian Products 830F3-1272.
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In that Meridian case, Counsel for Meridian and Meridian itself had conceded that those
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end caps for its product functioned as fasteners.
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And Commerce based its decision on that case.
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In the Whirlpool case that we're discussing now, Counsel for Whirlpool never conceded
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that its end caps were, in fact, fasteners.
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In fact, they said it functioned as something other than a fastener.
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And the Court, in that opinion, never actually expressly reaches the conclusion that the
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end caps were, in fact, fasteners.
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And as you just heard from Ms. Lee, what the Court was doing was addressing whether that
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fastener exception that existed in the kit language existed in the finished merchandise
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exception.
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And it concluded it did not.
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But it never explicitly determined that those end caps were, in fact, fasteners.
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So, point number one.
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Point number two, I'd like to go back to the Meridian, the other Meridian case that we've
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been talking about, which is the Trim Kit case.
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And if the Court were to interpret the language that Perfectus, the finished merchandise exception
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that Perfectus is advocating for, you would have a scenario where the Trim Kits that this
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Court found to be included, which were pieces of extruded aluminum, a wrench to attach the
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extruded aluminum to the appliance frame, and then instructions would be included if
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it came in kit form and unassembled.
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But if the frames were completely assembled and entered, and the only thing that happens
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to those frames is that they're attached to the frame that the appliance goes into,
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it's like their pallet that they're describing would be excluded.
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And you'd wind up with this logical inconsistency, which is why the Court in that case talked
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about where you have products that are purely extruded aluminum components that enter, they're
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covered by the order just as these pallets are.
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And the fact of the matter is, we're not even sure that these are, in fact, legitimate
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pallets.
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But putting that aside, I think the language of the order is clear that this product is
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subject for all the reasons you heard from Ms. Lee.
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So with that, I'm happy to answer any questions the Court has, but we'll conclude our presentation.
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Judge Lourie
Thank you, Counsel.
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Mr. Beaver has some rebuttal time.
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Appellant Attorney (Thomas Steven Biemer)
Yes, thank you, Your Honor.
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I'll make three quick points.
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And while Counsel is correct.
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That in the Whirlpool case, the Court did not reach the issue as to whether or not the
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caps were fasteners or not.
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Commerce took the position that they were, in fact, fasteners.
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And Counsel had both ignored the predatory language to the exemplars.
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That language, which I'll read again, says subject aluminum extrusions may be described
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at the time of importation as parts of the product.
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All finished products that are assembled after importation.
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All of the exemplars that are then listed.
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That fundamental time of importation and they do not become part of the Council committee
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made solely on the fact that one is imported, completely assembled.
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Exactly what this Court in Whirlpool said the order sets up.
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The order, the case in Whirlpool rejected that exact argument and they said specifically
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on page 1310.
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To include within the scope of these orders, finished merchandise made just a balloon of
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extrusion and fasteners.
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It would have done so in the scope and it did not do so.
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That rejects the argument that finished merchandise should be treated exactly the same as finished
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kits, which is the Meridian logic and the lower Court relied on, which was rejected
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by Whirlpool.
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And again, this Court said specifically.
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Finished merchandise differently is fully and finally assembled than kits.
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There's a logical rationale for it because if it's fully and finally assembled at the
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time of importation, in order for it to go back to extrusions as a part, it would have
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to go backwards in the manufacturing site.
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He rejects the argument that everyone here, including Commerce, is relying on.
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It's not within the scope if it's made entirely of aluminum extrusions.
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If it's become a component of anything else, like a picture frame, a window frame, a solar
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panel is the end product.
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That's the distinction.
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Judge Lourie
Thank you, counsel.
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We have the arguments cases taken under submission.