En Banc: Power of Customs & Border Protection

by Dennis Crouch

Sunpreme Inc. v. US (Fed. Cir. 2020) (en banc)

The Federal Circuit has issued an en banc decision in Supreme v. US, a case involving Customs & Border Protection (CBP) and antidumping / countervailing duty orders.  The particular question presented was as follows:

When merchandise enters the United States, whether CBP may preliminarily apply an antidumping or countervailing duty order and implement certain measures to protect the public revenue, regardless of the clarity of the order.

Here, the particular duty order comes from two Dep’t of Commerce regulations that cover crystalline silicon photovoltaic cells but expressly exclude “thin film photovoltaic products produced from amorphous silicon (a-Si).”  Products that fall within the order are subject to additional tariffs.

Sunpreme claims its products fall within the exclusion (and thus outside the Order), but CBP disagreed.  Eventually the case went before the Court of International Trade (CIT) who characterized the DOC Orders as “ambiguous” with respect to Sunpreme’s modules. In its initial decision, the Federal Circuit agreed with regard to ambiguity:

This is not a close case. The Orders in this case cover certain solar modules and expressly exclude others, without providing a definition of the class expressly excluded. Sunpreme’s solar modules are hybrid products, mixing characteristics of the included and excluded solar cells.

Fed. Cir. Vacated Opinion (2019).

The ambiguity was important because CBP enforcement is seen as a ministerial action — CBP is not authorized to interpret or fill gaps in ambiguous orders.  The court explained in its original opinion: “Ambiguity is the line that separates lawful ministerial acts from unlawful ultra vires acts by Customs.”

In its new en banc decision, the Federal Circuit has changed course — now holding that CBP has “authority to preliminarily suspend liquidation of goods based on an ambiguous antidumping or countervailing duty order, such that the suspension may be continued following a scope inquiry by Commerce.”  In its decision, the full court found confirmed that CBP’s role is “ministerial” but found that its authorized ministerial acts include interpreting ambiguous orders from the CBP. In particular, CBP can make “individual product-by-product application decisions.”

Customs is tasked with determining, for every imported product, whether the product falls within the scope of an antidumping or countervailing duty order. 19 U.S.C. § 1500(c). That necessarily entails evaluating both the product and the order. In each instance, Customs is statutorily tasked with answering a yes-or-no question as to whether the order applies, in order to fix the duty owed. When the order is ambiguous, Customs is nonetheless called upon to answer the question. . . . Answering that question does not transform Customs’s yes-or-no question into an interpretive act that would “modify Commerce’s determinations” or otherwise impinge upon Commerce’s authority to issue and set the scope of duty orders.

En Banc Decision.  The policy behind antidumping or countervailing duty orders is to protect US industry — and the Gov’t argued that the original opinion frustrated that policy by creating a likely procedural delay.

= = = = =

The issues in this case remind me of what happens with claim construction and infringement analysis in district court litigation.  The Judge decides claim construction while the jury decides whether the product infringes those claims (as interpreted).  When a judge fully construes a claim, a jury is left with almost nothing to do except the ministerial act of finding infringement.  For tough infringement questions, there is always a tendency to argue that the claims should have been more fully construed.  However, I believe that approach drains too much power from the finder of fact – the Jury.

Here, we have a similar situation in the Commerce case where the Orders are not ambiguous on their face, but do not fully define all potential situations.  You might conclude that a new situation reveals ambiguity inherent in the order; Alternatively, you might instead conclude that the ambiguity is in how the situation applies to the order.

 

21 thoughts on “En Banc: Power of Customs & Border Protection

  1. 6

    I had forgotten how fun the comments are here! Thanks for making my Monday all! One real question – what in the order was supposedly ambiguous? The parts quoted didn’t seem ambiguous to me. Either it is a thin film photovoltaic produced with amorphous silicon or it is not. Surely the industry has a definition of what a photovoltaic is and produced with amorphous silicon seems pretty obvious.

    But as a member of the federalist society – I do like this decision since it puts delegation back on the department where it currently belongs. Congress putting in definitions for all technical words it uses would of course be preferable.

  2. 5

    Re: “When a judge fully construes a claim, a jury is left with almost nothing to do except the ministerial act of finding infringement. ”
    ? I believe that statistically when the D.C. judge finally construes a claim [in a Markman hearing] the more common outcome these days is granting a summary judgement of non-infringement, or going on to a full trial on all asserted issues if the case does not settle?

  3. 4

    Thin film PV is a term of the art. It does not mean any cell that contains a thin film. It means cells where the absorber is a thin film deposited on a substrate.

    HIT cells, which are a heterojunction between amorphous silicon and crystalline silicon, in which the latter is the absorber, are not thin film cells, despite containing a thin film of amorphous silicon, because it is not the absorber.

    There is no ambiguity here. Sunpreme is misrepresenting the facts.

    1. 4.1

      If they made that arguement, because they want that claim construction, then then can show some evidenciaries and probably get it. While you are correct about the term being somewhat used as a term of art, it is also a term used routinely in patenting and may not generally be used in that manner. Esp if they happen to be using the BRI (not sure if those guys are or not).

  4. 3

    If this gets to the Supremes I wonder if some of them might treat this as a “separation of powers” issue, with Congress dumping its authority to set import customs duties onto the executive branch to be arbitrarily and ambiguously applied?

    1. 3.1

      … I wonder if the Supreme would recognize what a Separation of Powers issue is (and that such may occur between any and all of the three branches).

    2. 3.2

      Good point. The Federalist Society is clearly gunning for the nondelegation doctrine’s revival. Customs duty cases are present ripe instances where an ambitious court could revive that doctrine (or at least move the ball down the field in that direction).

  5. 2

    First post into the George Carlin filter…

    There is an immediate patent parallel that comes to mind:

    Examiners most certainly are NOT “authorized to interpret or fill gaps in ambiguous [Common Law (re)written case law].”

    Given that all three branches of the government has observed the fact that the Supreme Court directives (using Common Law (re)writing of Statutory Law) is a Gordian Knot mess of critically self-conflicting case law, it might appear that the only time that examiners may use case law to reject under 35 USC 101 is when the facts (and that means the claims) are exactly the same as adjudicated claims (which of course, is never).

    1. 2.1

      … and now released below…

  6. 1

    There is a patent parallel that immediately comes to mind in regards to the fact that the Common Law (re)written law of 35 USC 101 is fata11y flawed with ambiguity (the case law IS a Gordian Knot mess of conflictions).

    Examiners are most certainly not “authorized to interpret or fill gaps in ambiguous [Common Law case law].”

    1. 1.1

      “Examiners are most certainly not ‘authorized to interpret or fill gaps in ambiguous [Common Law case law].”

      Cite?

      1. 1.1.1

        Hi Shifty – you need a cite for Separation of Powers?

        What line of work are you in?

        1. 1.1.1.1

          Seems like either MM has multiple monikers or he has followers. Seems to have gotten worse over the last few years.

          1. 1.1.1.1.1

            Our pal Shifty** is certainly a sycophant of Malcolm’s, but his “style and tone” are distinct.

            If anything, the “getting worse” in this particular instance is that Shifty simply is not clever at all (while thinking himself to be so).

            ** “Shifty” is my shortcut reference to the current trope of this particular poster who selects any of (I think at least three) historical persons as his moniker. This seems to be the same person that “tr011ed” me awhile back that would at least provide some funny gifs with his “tr011ing.” Those at least provided some amusement. The current version provides very little amusement, but some minor diversion may yet still be found with a passing effort.

            1. 1.1.1.1.1.1

              Per usual, Snowflake, a shoddy attempt at deflection from the actual substance when you have no answer. But you pose interesting, compelling theories from the perspective of a person paid to make stuff up.

              1. 1.1.1.1.1.1.1

                Shoddy attempt at deflection…?

                Hmm, what is it that you think that I was deflecting in my response to Night Writer?

                Methinks that my post hits the mark more than you would like to admit, with the mindlessness attempts of yours to cobble together a list of your ad hominem like retorts that clearly have nothing to do with the posts at hand.

                As I noted, you are just not that clever though, and your reply only confirms my points.

          2. 1.1.1.1.2

            Night Writer,

            Additionally on a past thread, our pal Shifty was busted for the game-playing of posting merely in order to have another person reach their “Count Filter” limit.

        2. 1.1.1.2

          No. I’m not asking for a cite for “Separation of Powers.” [BTW, do you have one?] I’m showing that you do not have a cite for the above-quoted statement.

          1. 1.1.1.2.1

            Is that what you are whining about? That I have a statement in quotation marks unaccompanied by a citation?

            You really are rather dull. Quotation marks are used for more than merely cited material.

            What is your line of work?

            1. 1.1.1.2.1.1

              Shown.

              1. 1.1.1.2.1.1.1

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