Authored by: Jeremy J. Gustrowsky
The Federal Circuit recently affirmed that plastic shelf dividers containing magnets are not subject to antidumping and countervailing duty orders covering “raw flexible magnets” from China. The case centered on whether magnets that have been permanently bonded to rigid plastic components—making them functionally inflexible—still qualify as “flexible magnets” under the scope of existing trade orders.
Siffron, a U.S. retailer, imports shelf dividers composed of flexible magnets bonded to a plastic base. In 2022, Siffron requested a scope ruling from the Department of Commerce to determine whether its products were covered by duty orders originally issued in 2008. Commerce concluded that Siffron’s shelf dividers fell outside the scope of the orders because, once bonded to the plastic, the magnets could no longer bend or twist without being damaged. Magnum Magnetics, the original petitioner that sought the duty orders, challenged this determination.
A central dispute was whether Commerce properly relied on interpretive sources—specifically prior scope rulings and investigation materials—when the language of the duty orders appeared to plainly cover Siffron’s products. Magnum argued that Commerce should not have consulted these additional sources if the text was unambiguous. The Federal Circuit disagreed, explaining that under 2021 amendments to the governing regulations, Commerce has discretion to consider these interpretive sources at any time, not only when the scope language is unclear on its face. The court emphasized that these sources help Commerce understand what the original scope language meant, especially since terms that were plain when drafted might be interpreted differently years later.
The court also upheld Commerce’s reliance on a prior scope ruling known as InterDesign, which established that “flexible magnets” excludes magnets rendered inflexible by attached materials. Siffron provided video evidence demonstrating that its shelf dividers lose their shape and cannot function properly once bent. The Federal Circuit found this constituted substantial evidence supporting Commerce’s conclusion that the shelf dividers are functionally inflexible and therefore not covered by the duty orders.
Importantly, the court clarified that while Commerce may use interpretive sources to understand the meaning of scope language, it cannot use them to rewrite or change the scope of a duty order. In this case, Commerce permissibly interpreted “flexible magnets” rather than improperly expanding or contracting the order’s coverage. The decision reinforces that scope determinations are highly fact-intensive and that Commerce retains significant discretion in analyzing whether specific products fall within existing trade orders.