Slip Op. 25-48
UNITED STATES COURT OF INTERNATIONAL TRADE
RH PETERSON CO.,
Plaintiff, Before: Jennifer Choe-Groves, Judge v. Court No. 20-00099 UNITED STATES,
Defendant.
OPINION AND ORDER
[Granting in part and denying in part Plaintiff’s Motion for Summary Judgment and granting in part and denying in part Defendant’s Cross-Motion for Summary Judgment and Response in Partial Opposition to Plaintiff’s Motion for Summary Judgment.] Date: April 21, 2025
Elon Abram Pollack and Christopher J. Duncan, Stein Shostak Shostak Pollack & O’Hara, LLP, of Los Angeles, CA, for Plaintiff RH Peterson Co.
Justin R. Miller, Attorney-in-Charge, and Guy R. Eddon and Nico Gurian, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With them on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, and Patricia M. McCarthy, Director. Of counsel on the brief was Valerie Sorensen-Clark, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.
Choe-Groves, Judge: This case concerns stainless steel sink kits from the
People’s Republic of China (“China”) that are subject to antidumping and
countervailing duty orders and whether U.S. Customs and Border Protection Court No. 20-00099 Page 2
(“Customs”) properly assessed duties on the entered value of the imported goods
when certain components were not within the express scope of the applicable
antidumping duty and countervailing duty orders and certain components and work
were contributed in the Republic of China (“Taiwan”). Compl., ECF No. 13; see
Drawn Stainless Steel Sinks from the People’s Republic of China (“Antidumping
Duty Order”), 78 Fed. Reg. 21,592 (Dep’t of Commerce Apr. 11, 2013) (amended
final determination of sales at less than fair value and antidumping duty order);
Drawn Stainless Steel Sinks from the People’s Republic of China (“Countervailing
Duty Order”), 78 Fed. Reg. 21,596 (Dep’t of Commerce Apr. 11, 2013)
(countervailing duty order) (collectively, “Orders”). Before the Court are cross-
motions for summary judgment and responses. Pl.’s Mot. Summ. J. (“Pl.’s Br.”),
ECF Nos. 50, 51; Def.’s Cross-Mot. Summ. J. & Resp. Part. Opp’n Pl.’s Mot.
Summ. J. (“Def.’s Br.”), ECF Nos. 53, 54; Pl.’s Resp. Def.’s Cross-Mot. Summ. J.
& Reply Def.’s Part. Opp’n Pl.’s Mot. Summ. J. (“Pl.’s Resp.”), ECF Nos. 57, 59;
Def.’s Reply Further Supp. Def.’s Cross-Mot. Summ. J. (“Def.’s Reply”), ECF No.
61.
Plaintiff RH Peterson Co. (“Plaintiff” or “RH Peterson”) asserts that the
Orders apply only to sink bowls, sealing rings/gaskets, bracket kits, and dampening
pads that were produced in China. Pl.’s Br. at 15. Plaintiff contends that drainer
pipes, drainers, shipping cartons, and instruction manuals included with the sink Court No. 20-00099 Page 3
kits are not within the scope of the Orders and their values should be excluded
from the entered values of the subject merchandise. Id. at 15–16. Plaintiff also
argues that brackets produced in Taiwan and affixed to the sinks in Taiwan and
other work performed in Taiwan are beyond the scope of the Orders. Id. at 16.
Plaintiff requests the Court to find the litigation position of Defendant United
States (“Defendant” or “the Government”) to not be substantially justified but does
not provide a reason for why it seeks this relief. Id. at 20–21.
Defendant counters that because the subject merchandise were not
substantially transformed by the work performed in Taiwan, the merchandise were
properly considered to be “from China” when entering the United States, and
Customs correctly assessed antidumping and countervailing duties on the full
entered value of the subject merchandise, including the value of the instruction
manual and shipping carton, as required by statute. Def.’s Br. at 11–13, 17–19.
Defendant further argues that the components and work contributed in Taiwan
constituted added value to the covered sinks, not additional components that might
fall outside of the scope of the applicable orders. Id. at 13–17. Because Customs
partially granted RH Peterson’s protest concerning one of the subject entries, Entry
No. D14-1430362-2, and reliquidated the entered value to exclude the value of the
drainer pipe, drainer, instruction manual, and carton, Defendant argues that Court No. 20-00099 Page 4
Plaintiff has already received the relief it requested under Count One of the
Complaint for Entry No. D14-1430362-2. Id. at 19–20.
UNDISPUTED FACTS
Pursuant to USCIT Rule 56.3, Plaintiff and Defendant submitted separate
statements of material facts and responses. Pl.’s Statement Undisputed Material
Facts (“Pl.’s Facts”), ECF Nos. 50-2, 51-1; Def.’s Statement Additional
Undisputed Material Facts (“Def.’s Facts”), ECF Nos. 53-1, 54-1; Def.’s Resps.
Pl.’s Statement Undisputed Facts (“Def.’s Fact Resp.”), ECF Nos. 53-2, 54-2; Pl.’s
Resp. Def.’s Additional Undisputed Facts (“Pl.’s Fact Resp.”), ECF Nos. 57-3, 59-
3, 60. Plaintiff responded to only three of the 40 undisputed material facts offered
by Defendant. Pl.’s Fact Resp.; see also Def.’s Facts. Plaintiff also filed an
unsolicited reply to Defendant’s response. Pl.’s Replies Def.’s Resps. Pl.’s
Statement Undisputed Facts, ECF Nos. 57-2, 59-2. Because USCIT Rule 56.3
does not provide for replies to statements of uncontested facts and the Court did
not grant leave for Plaintiff to make this additional submission, the Court
disregards Plaintiff’s Replies to Defendant’s Responses to Plaintiff’s Statement of
Undisputed Facts. See USCIT R. 56.3. The Court finds the following facts are not
in dispute:
RH Peterson purchased sink kits from UIMCO, Ltd., a company located in
Taiwan. Pl.’s Facts ¶ 3; Def.’s Fact Resp. at 2. UIMCO purchased unfinished sink Court No. 20-00099 Page 5
bowls and sink kit parts from a Chinese company, Wenzhou Wolon Kitchen and
Bath Sanitary Wares, Co., Ltd. Pl.’s Facts ¶ 4; Def.’s Fact Resp. at 2; Def.’s Facts
¶ 20; see Pl.’s Fact Resp. UIMCO shipped the unfinished sink bowls and parts
from China to Hung Ting Metals in Taiwan, which machined the unfinished sink
bowls into finished sinks and repackaged the finished sink kits for shipment to the
United States. Pl.’s Facts ¶ 5; Def.’s Fact Resp. at 2; Def.’s Facts ¶¶ 21–23; see
Pl.’s Fact Resp. The finishing of each sink included: (1) stamping a brand logo
onto the side of the sink; (2) stamping a hole into the sink to be used for a drainer;
(3) stamping a hole into the sink to be used for a faucet; (4) affixing a dampening
pad to the sink; (5) attaching brackets to the sink; and (6) cleaning the surface of
the sink. Def.’s Facts ¶¶ 11, 24–25; see Pl.’s Fact Resp. UIMCO charged RH
Peterson for services described as “quality control, shipping, and profit” that
occurred in Taiwan. Pl.’s Facts ¶ 11; Def.’s Fact Resp. at 5–7.
Plaintiff imported stainless steel sink kits. Pl.’s Facts ¶ 1; Def.’s Fact Resp.
at 1; Def.’s Facts ¶¶ 1, 10; see Pl.’s Fact Resp. At the time of importation to the
United States, the sink kits included a finished sink and additional components,
including a drainer, drainer pipe, sealing ring/gasket, and an instruction manual.
Def.’s Facts ¶ 12; see Pl.’s Fact Resp. The kits were packed into the same carton
boxes that were used to ship the unfinished sinks and components from China to
Taiwan. Def.’s Facts ¶¶ 13–14; see Pl.’s Fact Resp. The sink bowls, sealing Court No. 20-00099 Page 6
rings/gaskets, bracket kits, and dampening pads were produced in China. Pl.’s
Facts ¶ 12; Def.’s Fact Resp. at 7–8; Def.’s Facts ¶¶ 15, 38; see Pl.’s Fact Resp.
The brackets used by UIMCO in finishing the sinks were produced in Taiwan.
Pl.’s Facts ¶ 11; Def.’s Fact Resp. at 5–7; Def.’s Facts ¶ 16; see Pl.’s Fact Resp.
RH Peterson imported the subject merchandise under cover of four entries:
Entry No. D14-1430362-2, entered November 9, 2016; Entry No. D14-1432445-3,
entered February 15, 2017; Entry No. D14-1434025-1, entered April 26, 2017; and
Entry No. D14-1435146-4, entered June 13, 2017. Pl.’s Facts ¶ 15; Def.’s Fact
Resp. at 11; Def.’s Facts ¶ 2; see Pl.’s Fact Resp. Each entry contained 500 sink
kits. Pl.’s Facts ¶ 15; Def.’s Fact Resp. at 11; Def.’s Facts ¶ 3; see Pl.’s Fact Resp.
The subject merchandise were initially entered as Type 01, with Taiwan identified
as the country of origin. Pl.’s Facts ¶ 15; Def.’s Fact Resp. at 11; Def.’s Facts ¶ 5;
see Pl.’s Fact Resp. Customs determined the country of origin for the subject
goods to be China and changed the entries to Type 03. Pl.’s Facts ¶ 16; Def.’s Fact
Resp. at 11; Pl.’s Br. at Ex. 16. At liquidation, Customs assessed antidumping and
countervailing duties on the total entered value of the subject merchandise. Pl.’s
Facts ¶ 16; Def.’s Fact Resp. at 11.
RH Peterson timely filed Protest No. 270418100444 on February 16, 2018,
challenging Customs’ assessment of antidumping and countervailing duties on
Entry No. D14-1430362-2. Pl.’s Facts ¶ 17; Def.’s Fact Resp. at 12–13; Def.’s Court No. 20-00099 Page 7
Facts ¶ 32; see Pl.’s Fact Resp.; Pl.’s Br. at Ex. 8 (“Protest No. 270418100444”).
On November 29, 2018, RH Peterson timely filed Protect No. 270418101857
challenging Customs’ assessment of antidumping and countervailing duties on
Entry Nos. D14-1432445-3, D14-1434025-1, and D14-1435146-4. Pl.’s Facts
¶ 18; Def.’s Fact Resp. at 13–14; Def.’s Facts ¶ 32, see Pl.’s Fact Resp.; Pl.’s Br. at
Ex. 9 (“Protest No. 270418101857”). On November 3, 2019, Customs denied
Protest No. 270418101857 in full. Pl.’s Facts ¶ 19; Def.’s Fact Resp. at 14; Pl.’s
Br. at Ex. 10. Customs denied in part and granted in part Protest No.
270418100444 on November 6, 2019. Pl.’s Facts ¶ 21; Def.’s Fact Resp. at 15–16;
Def.’s Facts ¶ 35; see Pl.’s Fact Resp.; Pl.’s Br. at Ex. 11. Plaintiff filed requests
to void Customs’ denials of its protests. Pl.’s Facts ¶¶ 23–24; Def.’s Fact Resp. at
16–17; Pl.’s Br. at Ex. 15. Customs denied both requests. Pl.’s Facts ¶ 25; Def.’s
Fact Resp. at 18; Pl.’s Br. at Ex. 15. Customs reliquidated Entry No. D14-
1430362-2 and removed the value of the drainer, drainer pipe, carton, and
instruction manual from the entered value. Def.’s Facts ¶ 36; see Pl.’s Fact Resp.
at 1–2.
RH Peterson filed the Summons in this action on May 1, 2020 and the
Complaint on November 29, 2022. Pl.’s Facts ¶¶ 27–28; Def.’s Fact Resp. at 18;
Summons, ECF No. 1; Compl. Defendant filed a motion to dismiss alleging a lack
of jurisdiction. Pl.’s Facts ¶ 29; Def.’s Fact Resp. at 18–19; Def.’s MTD, ECF Court No. 20-00099 Page 8
Nos. 29, 30. RH Peterson provided Defendant with a draft motion for sanctions
under USCIT Rule 11. Pl.’s Facts ¶ 30; Def.’s Fact Resp. at 19. The Government
withdrew its motion to dismiss. Pl.’s Facts ¶ 30; Def.’s Fact Resp. at 19; Def.’s
Consent Mot. Withdraw Def.’s MTD, ECF No. 34; Order (June 3, 2023), ECF No.
35.
JURISDICTION AND STANDARD OF REVIEW
The U.S. Court of International Trade has jurisdiction pursuant to 28 U.S.C.
§ 1581(a), which grants the Court authority over claims contesting a denial of a
protest under 19 U.S.C. § 1514 by Customs. The Court reviews the agency’s
determination de novo based on the record made before the Court. 28 U.S.C.
§ 2640(a).
The Court will grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law. USCIT R. 56(a). To raise a genuine issue of material fact, a party
cannot rest upon mere allegations or denials and must point to sufficient supporting
evidence for the claimed factual dispute to require resolution of the differing
versions of the truth at trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248–49 (1986); Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731
F.2d 831, 835–36 (Fed. Cir. 1984). Court No. 20-00099 Page 9
DISCUSSION
Plaintiff’s protests before the agency challenged whether antidumping and
countervailing duties were properly assessed on certain components of the
imported sink kits that Plaintiff contends are not subject to the Orders. Protest No.
270418100444; Protest No. 270418101857. Plaintiff did not request a scope ruling
before the agency concerning the challenged components. Plaintiff filed this case
under the Court’s 28 U.S.C. § 1581(a) jurisdiction, challenging Customs’ denial of
Plaintiff’s protests. Compl. at 1; 28 U.S.C. § 1581(a). The issue before the Court
is one of valuation, but that cannot be divorced from the question of what
specifically falls within the scope of the Orders.
Plaintiff’s Complaint asserts two counts. Compl. Count One asserts that
Customs incorrectly assessed antidumping and countervailing duties on
components produced in China that are allegedly not subject to the Orders. Id. ¶¶
19–21. Count Two asserts that Customs incorrectly assessed antidumping and
countervailing duties on components produced in Taiwan and work that was
performed in Taiwan. Id. ¶¶ 22–24.
In assessing antidumping duties and countervailing duties, Customs is
directed to determine the appropriate duty based on the “entered value” of the
subject merchandise. 19 C.F.R. § 351.212(b)(1)(i) (“[T]he Secretary will then
instruct U.S. Customs and Border Protection to assess antidumping duties by Court No. 20-00099 Page 10
applying the assessment rate to the entered value of the merchandise.”); id.
§ 351.212(b)(2) (“[T]he Secretary normally will instruct U.S. Customs and Border
Protection to assess countervailing duties by applying the rates included in the final
results of the review to the entered value of the merchandise.”). Customs primarily
bases its assessment of duties on the “transaction value” of the subject
merchandise. Meyer Corp., U.S. v. United States, 43 F.4th 1325, 1332 (Fed. Cir.
2022); 19 U.S.C. § 1401a(a)(1). Transaction value “is the price actually paid or
payable for the merchandise when sold for exportation to the United States,” plus
adjustments provided by statute. 19 U.S.C. §§ 1401a(1)(a), (b)(1).
Antidumping duty and countervailing duty orders only encompass the
merchandise identified in their scope language. Bell Supply Co., LLC v. United
States, 888 F.3d 1222, 1228 (Fed. Cir. 2018) (citing Duferco Steel, Inc. v. United
States, 296 F.3d 1087, 1089 (Fed. Cir. 2002)). Commerce may clarify the scope of
an order, but “the scope language cannot be interpreted or ‘changed in a way
contrary to its terms.’” Saha Thai Steel Pipe Pub. Co. v. United States, 101 F.4th
1310, 1323–24 (Fed. Cir. 2024) (quoting Duferco Steel, 296 F.3d at 1097)). The
Orders cover:
drawn stainless steel sinks with single or multiple drawn bowls, with or without drain boards, whether finished or unfinished, regardless of type of finish, gauge, or grade of stainless steel. Mounting clips, fasteners, seals, and sound-deadening pads are also covered by the scope of this order if they are included within the sales price of the drawn stainless Court No. 20-00099 Page 11
steel sinks. For purposes of this scope definition, the term “drawn” refers to a manufacturing process using metal forming technology to produce a smooth basin with seamless, smooth, and rounded corners. Drawn stainless steel sinks are available in various shapes and configurations and may be described in a number of ways including flush mount, top mount, or undermount (to indicate the attachment relative to the countertop). Stainless steel sinks with multiple drawn bowls that are joined through a welding operation to form one unit are covered by the scope of the order. Drawn stainless steel sinks are covered by the scope of the order whether or not they are sold in conjunction with non-subject accessories such as faucets (whether attached or unattached), strainers, strainer sets, rinsing baskets, bottom grids, or other accessories.
Excluded from the scope of the order are stainless steel sinks with fabricated bowls. Fabricated bowls do not have seamless corners, but rather are made by notching and bending the stainless steel, and then welding and finishing the vertical corners to form the bowls. Stainless steel sinks with fabricated bowls may sometimes be referred to as “zero radius” or “near zero radius” sinks.
The products covered by this order are currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under statistical reporting number 7324.10.0000 and 7324.10.00.10. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope is dispositive.
Antidumping Duty Order, 78 Fed. Reg. at 21,592–93; Countervailing Duty Order,
78 Fed. Reg. at 21,596.
Plaintiff challenges the inclusion of costs and values for: (I) components
produced in China, including the drainer, drainer pipe, instruction manual, and
shipping carton; and (II) mounting brackets produced in Taiwan, work performed
in Taiwan, and other costs incurred in Taiwan. Compl. at 4–5; Pl.’s Br. at 10, 15– Court No. 20-00099 Page 12
19. Plaintiff also asks the Court to find Defendant’s litigation position to be not
substantially justified. Pl.’s Br. at 20–21. Defendant contends that Plaintiff’s
Count One should be dismissed as it relates to Entry No. D14-1430362-2 because
the requested relief has already been granted. Def.’s Br. at 19–20.
I. Components Produced in China
Count One of Plaintiff’s Complaint asserts that Customs incorrectly assessed
antidumping and countervailing duties on components of the subject sinks that
were produced in China but are not within the scope of the Orders. Compl. ¶¶ 19–
21. Plaintiff’s protests identify four components produced in China that Plaintiff
contends should have been excluded from the dutiable value of the subject sinks:
the drainer, drainer pipe, shipping carton, and instruction manual. Protest No.
270418100444; Protest No. 270418101857; see also Pl.’s Br. at 9–10, 15–16; Pl.’s
Facts ¶¶ 10–13.
Unfinished sink bowls and parts were shipped from China to Taiwan for
finishing. Pl.’s Facts ¶ 5; Def.’s Fact Resp. at 2; Def.’s Facts ¶¶ 21–23; see Pl.’s
Fact Resp. The Orders expressly cover unfinished sinks from China.
Antidumping Duty Order, 78 Fed. Reg. at 21,592–93; Countervailing Duty Order,
78 Fed. Reg. at 21,596. The Orders are silent as to the four specific components
challenged by Plaintiff. See Antidumping Duty Order, 78 Fed. Reg. at 21,592–93;
Countervailing Duty Order, 78 Fed. Reg. at 21,596. Court No. 20-00099 Page 13
After granting Protest No. 270418100444 in part, Customs reliquidated
Entry No. D14-1430362-2 and excluded the value of the drainer, drainer pipe,
carton, and instruction manual from its duty assessment. Def.’s Facts ¶ 36; Pl.’s
Fact Resp. at 1–2. The Government now contests Customs’ exclusion of the value
of the carton and instruction manual from the entered value of the subject
merchandise as not in accordance with law. Def.’s Br. at 17–19; see also Def.’s
Fact Resp. at 8–10. This is an unusual situation because the Government is
arguing on appeal before this Court that Customs erred and asks the Court to
conclude that Customs’ determination was not in accordance with law.
Normally the U.S. Department of Justice defends the actions of its client
agencies. Because the Court reviews the denied protests of customs duties de
novo, the Government cannot request a voluntary remand in this case to allow
Customs to reconsider Protest No. 270418100444 and potentially reliquidate Entry
No. D14-1430362-2. 28 U.S.C. § 2640(a)(1). The Court concludes that the
Government is not precluded in this circumstance from adopting a litigation
position inconsistent with that taken by Customs in the administrative proceeding.
A. Drainer and Drainer Pipe
Plaintiff identified the value of the drainer and drainer pipe produced in
China among the components that it contends should be excluded from the entered
value of the subject merchandise. Pl.’s Facts ¶¶ 10, 13; Pl.’s Br. at 14–16, 20. In a Court No. 20-00099 Page 14
recent scope ruling, Commerce determined that the drainer and drainer pipe are not
within the scope of the Orders. Pl.’s Br. at Ex. 6 (Final Scope Ruling on Simpli
Home’s Laundry Cabinets) at 5; see also Pl.’s Br. at 15–16; Def.’s Br. at 10.
Customs excluded the value of the drainer and drainer pipe from its duty
assessment when it reliquidated Entry No. D14-1430362-2. Def.’s Facts ¶ 36; Pl.’s
Fact Resp. at 1–2. The Court agrees with the Parties that Customs properly
excluded the value of the drainer and drainer pipe from the entered value of the
merchandise when it reliquidated Entry No. D14-1430362-2. Pl.’s Br. at 17–18;
Def.’s Br. at 10–11, 19–20. There remain no questions of material fact as to
whether the value of the drainer and drainer pipe should be included in the entered
value of the subject merchandise. The Court concludes that Plaintiff and
Defendant are both entitled to judgment on this issue as a matter of law.
B. Instruction Manual
Plaintiff identified the value of the instruction manual produced in China
among the components that it contends should be excluded from the entered value
of the subject merchandise. Pl.’s Facts ¶¶ 10, 13; Pl.’s Br. at 14–16, 20. The value
of the instruction manual was included in the price charged by UIMCO for the
subject sinks. See Def.’s Facts ¶ 27; see Pl.’s Fact Resp. In reliquidating Entry
No. D14-1430362-2, Customs excluded the value of the instruction manual from
its duty assessment. Def.’s Facts ¶ 36; Pl.’s Fact Resp. at 1–2. Court No. 20-00099 Page 15
Instruction manuals are not mentioned, and nothing in the scope language
suggests that instruction manuals or the value of such manuals should be covered
by the Orders. Antidumping Duty Order, 78 Fed. Reg. at 21,592–93;
Countervailing Duty Order, 78 Fed. Reg. at 21,596. The Court concludes that
Customs’ determination to exclude the value of the instruction manual on
reliquidation of Entry No. D14-1430362-2 was in accordance with law because the
value of the instruction manual should not be included in the entered value of the
subject sinks. 19 C.F.R. § 351.212(b)(1), (2); id. § 1401a(b). Plaintiff is entitled to
judgment on this issue as a matter of law.
C. Shipping Carton
Plaintiff identified the value of the shipping carton produced in China among
the components that it contends should be excluded from the entered value of the
subject merchandise. Pl.’s Facts ¶¶ 10, 13; Pl.’s Br. at 14–16, 20. The
Government asserts that “the carton is the packing material into which the sink and
accessories are placed for shipment,” Def.’s Br. at 17, and thus the transaction
value of imported merchandise should include “the packing costs incurred by the
buyer with respect to the imported merchandise” under 19 U.S.C.
§ 1401a(b)(1)(A). As with the instruction manual, Customs excluded the value of
the carton from its duty assessment when it reliquidated Entry No. D14-1430362-2.
Def.’s Facts ¶ 36; Pl.’s Fact Resp. at 1–2. Court No. 20-00099 Page 16
19 U.S.C. § 1401a(b)(1) expressly provides that “the packing costs incurred
by the buyer with respect to the imported merchandise” are to be included in
Customs’ calculation of transaction value. 19 U.S.C. § 1401a(b)(1)(A). The
cartons in which the subject sinks were shipped to the United States were the same
cartons used to ship the unfinished sinks from China to Taiwan. Def.’s Facts
¶¶ 13–14; see Pl.’s Fact Resp. The value of the carton was included in the price
charged by UIMCO for the subject sinks. See Def.’s Facts ¶ 27; see Pl.’s Fact
Resp. The Court concludes that Customs’ determination to exclude the value of
the carton on reliquidation of Entry No. D14-1430362-2 was not in accordance
with law because the value of the carton should be included in the entered value of
the subject sinks under the applicable statutes. Defendant is entitled to judgment
on this issue as a matter of law.
II. Costs Incurred in Taiwan
Prior to entering the United States, the unfinished sinks were shipped from
China to Taiwan. Pl.’s Facts ¶ 5; Def.’s Fact Resp. at 2; Def.’s Facts ¶¶ 21–23; see
Pl.’s Fact Resp. While in Taiwan, Hung Ting Metals performed finishing work on
the unfinished sinks, including: (1) stamping brand logos onto the sides of the
sinks; (2) stamping holes into the sinks to be used for drainers; (3) stamping holes
into the sinks to be used for faucets; (4) affixing dampening pads to the sinks;
(5) attaching brackets to the sinks; and (6) cleaning the surfaces of the sinks. Court No. 20-00099 Page 17
Def.’s Facts ¶¶ 11, 24–25; see Pl.’s Fact Resp. The brackets affixed during the
finishing process were manufactured in Taiwan. Pl.’s Facts ¶ 11; Def.’s Fact Resp.
at 5–7; Def.’s Facts ¶ 16; see Pl.’s Fact Resp. All other physical components of the
sinks and sink kits were originally produced in China. Pl.’s Facts ¶¶ 11–12; Def.’s
Fact Resp. at 5–8; Def.’s Facts ¶¶ 15–16, 38; see Pl.’s Fact Resp.
Plaintiff argues that the costs incurred in Taiwan, including machining and
finishing work, “quality control, shipping, and profit,” the addition of brackets
produced in Taiwan, and freight are outside of the scope of the Orders and should
have been excluded from the entered value for purposes of calculating antidumping
and countervailing duties. Compl. at 5; Pl.’s Br. at 16–18. Defendant contends
that work performed and components added in Taiwan did not substantially
transform the subject sinks from unfinished sinks manufactured in China and that
the associated costs should be treated as value added. Def.’s Br. at 11–17.
Antidumping duty orders and countervailing duty orders cover a specified
“class or kind of foreign merchandise” from specified countries. 19 U.S.C.
§§ 1671(a), 1673(1), 1677(25); see Appleton Papers Inc. v. United States, 37 CIT
1034, 1038, 929 F. Supp. 2d 1329, 1335 (2013) (“[Antidumping] and
[countervailing duty] orders cover a particular class or kind of merchandise from a
particular country”). The Orders only cover drawn stainless steel sinks from
China, and do not cover components added or finishing work performed in a third- Court No. 20-00099 Page 18
country such as Taiwan. See Antidumping Duty Order, 78 Fed. Reg. at 21,592–
93; Countervailing Duty Order, 78 Fed. Reg. at 21,596.
A. Work Performed in Taiwan
The costs incurred in Taiwan that Plaintiff contends should be excluded
from the dutiable value of the subject sinks include “Machining/Labor” and
“Quality Control, Shipping and Profit.” Pl.’s Br. at 10. There is nothing in the
scope language of the Orders to suggest that the value of the work performed in
Taiwan should be included in the dutiable value of the subject goods.
Antidumping Duty Order, 78 Fed. Reg. at 21,592–93; Countervailing Duty Order,
78 Fed. Reg. at 21,596. The Court concludes that inclusion of the cost of work
performed in Taiwan was not in accordance with law. Plaintiff is entitled to
B. Taiwanese-Produced Brackets
Plaintiff challenges the inclusion of “brackets originating from Taiwan” as
not within the scope of the Orders. Pl.’s Br. at 15–16. Defendant counters that the
brackets should not be treated as non-covered components, but as value added to
the covered sinks. Def.’s Br. at 13–17.
The Taiwanese-produced brackets were affixed to the unfinished sinks in
Taiwan. Def.’s Facts ¶ 25; see Pl.’s Fact Resp. The brackets work in conjunction
with the Chinese-produced bracket kit, which was separately included in the sink Court No. 20-00099 Page 19
kits, to allow the sink to be installed into a countertop. Def.’s Facts ¶ 25; see Pl.’s
Fact Resp. The brackets became part of the subject sink and were not shipped
separately in the sink kit. See Def.’s Facts ¶ 25; see Pl.’s Fact Resp.
Regardless of whether the brackets were affixed to the subject sinks, there is
no suggestion in the scope language of the Orders that components manufactured
and added in a third-country such as Taiwan should be included in the value of the
subject merchandise. See Antidumping Duty Order, 78 Fed. Reg. at 21,592–93;
Countervailing Duty Order, 78 Fed. Reg. at 21,596. The Court concludes that
inclusion of the value of the Taiwanese-produced brackets, affixed in Taiwan, was
not in accordance with law and grants summary judgment in favor of Plaintiff on
this issue.
C. Freight
Plaintiff identifies the value of freight as among the costs incurred in Taiwan
that it contends should be excluded from the dutiable value of the subject sinks.
Pl.’s Br. at 10, 15; Pl.’s Resp. at 1, 7. For purposes of calculating transaction
value, “price actually paid” is defined as the “total payment (whether direct or
indirect, and exclusive of any costs, charges, or expenses incurred for
transportation, insurance, and related services incident to the international
shipment of the merchandise from the country of exportation to the place of
importation in the United States) made, or to be made, for imported merchandise Court No. 20-00099 Page 20
by the buyer to, or for the benefit of, the seller.” 19 U.S.C § 1401a(b)(4)(A).
Pursuant to this language, if the price of the subject sinks paid by Plaintiff either
directly or indirectly included the cost of international freight to the United States,
that cost should be deducted from the dutiable value. Id.
The price UIMCO charged Plaintiff for the subject sinks included the cost of
freight. Pl.’s Facts ¶ 13; Def.’s Fact Resp. at 9–10; Def.’s Facts ¶¶ 29–31; see Pl.’s
Fact Resp.; Def.’s Br. at 5. In a declaration provided in support of Plaintiff’s
motion, UIMCO’s sales manager Chang Cheng Kang explains that UIMCO
arranged and paid for shipping from China to Taiwan for the unfinished sinks and
that the cost was passed to Plaintiff. Pl.’s Br. at Ex. 3 (“Kang Decl.”) at 2–3.
Kang further states that the price charged to Plaintiff for the sink kits included
“Taiwan shipping, Taiwan processing and U.S. delivery.” Id. The cost of freight
is also reflected in the price quotation and cost breakdown provided with Kang’s
declaration. See id. Exs. 3 & 5.
The subject sinks were exported from China to Taiwan, then Taiwan to the
United States. The cost of freight was included in the price paid to UIMCO by
Plaintiff for the subject sinks. The Court concludes that inclusion of the cost of
freight for international shipment of the merchandise from the country of
exportation (China) through Taiwan to the place of importation in the United Court No. 20-00099 Page 21
States was not in accordance with law under Section 1401a(b)(4)(A). Summary
judgment will be granted for Plaintiff on this issue.
III. Count One for Entry No. D14-1430362-2
The Government argues that Plaintiff’s Count One should be dismissed as it
relates to Entry No. D14-1430362-2 because the relief requested by Plaintiff was
granted when Customs granted Protest No. 2704-18-100444 in part and
reliquidated the entry. Def.’s Br. at 19–20. Plaintiff counters that it has not
received its requested relief through the partial grant of its protest. Pl.’s Resp. at
7–8. Plaintiff specifically alleges that Count One also covers freight costs from
China and that no refund has been provided for the duties assessed on the drainer,
drainer pipe, instruction manual, and carton. Id.
Count One of Plaintiff’s Complaint concerns “China components of the
imported finished sinks and kits.” Compl. at 4–5. In Plaintiff’s Statement of
Undisputed Material Facts, Plaintiff identified the Chinese components that it is
contesting as not within the scope of the Orders as the drainer pipe, drainer, carton,
and instruction manual. Pl.’s Facts ¶ 13. Each of these values was excluded from
the value of the entry when Customs reliquidated Entry No. D14-1430362-2.
Def.’s Facts ¶ 36; Pl.’s Fact Resp. at 1–2.
As discussed above, the Court concludes that the value of the drainer pipe,
drainer, and instruction manual should be excluded from the entered value of the Court No. 20-00099 Page 22
subject merchandise, but the value of the carton should be included in the value of
the subject sinks. The Court instructs Customs to reliquidate the subject entries in
accordance with this Opinion.
IV. Defendant’s Litigation Position
Plaintiff asks the Court to find Defendant’s litigation position that duties
should be assessed on the value of Chinese components beyond the scope of the
Orders, Taiwanese brackets, and other costs incurred in Taiwan to be not
substantially justified. Pl.’s Br. at 20–21. Plaintiff points to Customs’ denial of its
protests and requests to void the denials. Id. at 20.
Plaintiff fails to articulate why it seeks a declaration that Defendant’s
litigation position is unjustified and the Court will not speculate as to Plaintiff’s
litigation strategy or motive.
CONCLUSION
For the foregoing reasons, the Court finds that no issue of material fact
remains in dispute regarding how Customs should treat the value of the drainer,
drainer pipe, instruction manual, and shipping carton in calculating the entered
value of the subject merchandise and whether Customs may assess duties on costs
incurred in Taiwan, including finishing work, the addition of Taiwanese-produced
brackets, and freight. No issue of material fact remains in dispute regarding Court No. 20-00099 Page 23
whether Plaintiff has received the relief it seeks through Count One with regard to
Entry No. D14-1430362-2.
Accordingly, it is hereby
ORDERED that Plaintiff’s Motion for Summary Judgment, ECF Nos. 50,
51, is granted in part and denied in part in accordance with this Opinion and Order;
and it is further
ORDERED that Defendant’s Cross-Motion for Summary Judgment and
Response in Partial Opposition to Plaintiff’s Motion for Summary Judgment, ECF
Nos. 53, 54, is granted in part and denied in part in accordance with this Opinion
and Order; and it is further
ORDERED that the values of the drainer, drainer pipe, instruction manual,
“Machining/Labor” and “Quality Control, Shipping and Profit” incurred in
Taiwan, Taiwanese-produced brackets, and freight are to be excluded from the
dutiable value of the subject sinks; and it is further
ORDERED that the value of the shipping carton is to be included in the
dutiable value of the subject sinks; and it is further Court No. 20-00099 Page 24
ORDERED that Customs shall reliquidate the subject entries in accordance
with this Opinion and Order.
Judgment will be entered accordingly.
/s/ Jennifer Choe-Groves Jennifer Choe-Groves, Judge
Dated: April 21, 2025 New York, New York