[Federal Register Volume 86, Number 45 (Wednesday, March 10, 2021)]
[Notices]
[Pages 13731-13733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04923]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-976 (Rescission)]


Certain Woven Textile Fabrics and Products Containing Same; 
Commission Decision Instituting a Rescission Proceeding and Granting a 
Petition for Rescission of a General Exclusion Order and Seizure and 
Forfeiture Orders; Termination of Rescission Proceeding

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission (``Commission'') has determined to institute a rescission 
proceeding in the above-captioned investigation and rescind the general 
exclusion order (``GEO'') and seizure and forfeiture orders (``SFOs'') 
previously issued in the investigation. The GEO and SFOs are hereby 
rescinded, and the rescission proceeding is terminated.

FOR FURTHER INFORMATION CONTACT: Sidney A. Rosenzweig, Esq., Office of 
the General Counsel, U.S. International Trade Commission, 500 E Street 
SW, Washington, DC 20436, telephone (202) 708-2532. Copies of non-
confidential documents filed in connection with this investigation may 
be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email 
[email protected]. General information concerning the Commission may 
also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on 
this matter can be obtained by contacting the Commission's TDD 
terminal, telephone (202) 205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on December 18, 2015, based on a supplemented and twice-amended 
complaint filed by AAVN, Inc. of Richardson, Texas (``AAVN''). 80 FR 
79094 (Dec. 18, 2015). The complaint alleged violations of section 337 
of the Tariff Act of 1930, as amended (19

[[Page 13732]]

U.S.C. 1337) (``section 337''), in the importation into the United 
States, the sale for importation, or the sale within the United States 
after importation of certain woven textile fabrics and products 
containing same, by reason of infringement of claims 1-7 of U.S. Patent 
No. 9,131,790 and/or by reason of false advertising. The notice of 
investigation named fifteen respondents. In the course of the 
investigation, fourteen of the named respondents were terminated from 
the investigation based upon settlement or entry of a consent order. 
See Order No. 21 at 2-3 (Nov. 10, 2016) (summarizing the procedural 
history of the investigation). The last remaining respondent was Pradip 
Overseas Ltd. of Ahmedabad, India (``Pradip''). The Office of Unfair 
Import Investigations (``OUII'') was also named as a party.
    AAVN accused Pradip of false advertising, specifically alleging 
that Pradip misrepresented the thread count of sheets manufactured in 
India, imported into the United States, and sold in United States 
department stores. Second Am. Compl. ]] 39-41, 80 (Nov. 12, 2015); id. 
at Ex. 46 (``800 Thread Count'' sheets measured at 252.7 threads). 
Although Pradip responded to the complaint, Pradip later terminated its 
relationship with its attorneys and represented that it would not 
participate in the remainder of the investigation. See Order No. 14 at 
1 (Apr. 19, 2016); see also 19 CFR 210.17 (failure to act).
    On September 2, 2016, AAVN moved for leave to file a motion for 
summary determination of violation. The summary determination motion 
that was appended argued, inter alia, that Pradip had violated section 
337 by falsely advertising the thread count of its imported sheets and 
that the false advertising was deceptive, material, and injurious to 
AAVN. AAVN sought a GEO and a 100 percent bond during the period of 
Presidential review. See 19 U.S.C. 1337(d)(2), (j)(3). Pradip did not 
respond, allowing the ALJ to draw adverse inferences against Pradip. 
See 19 CFR 210.17(c). On November 10, 2016, the ALJ issued an initial 
determination (Order No. 21) granting the motion for summary 
determination. The ID finds that AAVN had shown a violation of section 
337 by reason of false advertising under section 43 of the Lanham Act, 
15 U.S.C. 1125(a)(1)(B). Order No. 21 at 7-9, 13-15. As to remedy, 
citing section 337(d)(2), 19 U.S.C. 1337(d)(2), which sets forth the 
test for issuance of a GEO, id. at 16, the ALJ found that ``the 
evidence shows a widespread pattern of violation of Section 337,'' id. 
at 17. The ALJ also found that ``the evidence shows that it is 
difficult to identify the source and manufacturers of the falsely 
advertised products,'' because ``U.S. retailers fail to identify the 
manufacturer, importer or seller of the textile products at the point 
of sale.'' Id. at 18. Nor do import records ``reveal the names of the 
original manufacturers of the materials used to construct the imported 
products.'' Id. Accordingly, the ALJ found ``that the evidence shows 
that it is difficult, if not impossible, to identify the sources of the 
falsely advertised goods.'' Id. Based on these findings the ALJ 
recommended the issuance of a GEO. Id.
    On December 20, 2016, the Commission issued a notice of a 
determination not to review Order No. 21, resulting in a finding of a 
violation of section 337, and requesting written submissions on remedy, 
the public interest, and bonding. 81 FR 95195-96 (Dec. 27, 2016). On 
January 6, 2017, AAVN and OUII filed submissions on these issues. On 
January 13, 2017, OUII filed a reply to AAVN's submission. No other 
submissions were received.
    On March 20, 2017, the Commission issued a GEO prohibiting the 
entry of certain woven textile fabrics and products containing same 
that are falsely advertised through a misrepresentation of thread 
count. 82 FR 15,067 (Mar. 24, 2017). The Commission found that the 
statutory requirements for relief under section 337(d)(2), 19 U.S.C. 
1337(d)(2), were met and that the public interest factors enumerated in 
section 337(d)(1), 19 U.S.C. 1337(d)(1), did not preclude issuance of 
the statutory relief. 82 FR at 15068.
    Subsequent to the issuance of the GEO, the Commission issued twelve 
SFOs pursuant to section 337(i)(1), 19 U.S.C. 1337(i)(1). See EDIS Doc. 
ID Nos.: 668965; 668969; 668972; 668977; 668980; 668982; 668984; 
676164; 676169; 681551; 681554; and 728320.
    On February 3, 2021, AAVN filed a petition to rescind the GEO and 
SFOs (``AAVN Pet.''). AAVN contends that it disagrees with the testing 
protocol used by Customs and Border Protection to determine whether 
imported articles falsely advertise their thread counts. AAVN Pet. at 
2. In particular, AAVN contends that the methodology is too strict as 
compared to alleged testing conducted by independent testing 
laboratories. Id. at 2-3. AAVN further contends that the ``exclusion of 
goods, including from AAVN's licensees and customers, even after 
qualified independent testing labs have confirmed the accuracy of those 
authorized products' thread counts, harms AAVN's business and its 
standing with reputable importers.'' Id. at 3. AAVN recognizes that the 
GEO was originally issued to redress substantial injury to AAVN, 19 
U.S.C. 1337(a)(1)(A), but states that ``AAVN is ultimately in the best 
position to evaluate injury to itself,'' and that rescission of the 
Commission remedial orders (the GEO and the SFOs issued pursuant to it) 
``would be less injurious to [AAVN] than continued enforcement of the 
GEO.'' AAVN Pet. at 3. AAVN asserts that rescission of the GEO ``may in 
practice result in rescission of all SFOs in this Investigation,'' but 
that at least it seeks ``rescission of the December 17, 2020 SFO,'' 
EDIS Doc. ID 728320. AAVN Pet at 3 n.2. On February 16, 2021, the 
Office of Unfair Import Investigations (``OUII'') responded in 
opposition to the petition.
    Having reviewed the petition, the opposition thereto, and the 
record of the investigation, the Commission has determined that the 
petition complies with Commission Rule 210.76, 19 CFR 210.76. The 
Commission has determined to institute a rescission proceeding and to 
grant the petition. Pursuant to section 337(k)(1), an exclusion order 
``shall continue in effect until the Commission finds . . . that the 
conditions which led to such . . . order no longer exist.'' 19 U.S.C. 
1337(k)(1); see also 19 CFR 210.76(a)(1). AAVN's petition alleges that 
the exclusion of articles pursuant to the GEO exacerbates rather than 
redresses any injury it faces from imports. Thus, the conditions that 
led to the issuance of the GEO no longer exist, and the Commission has 
determined to rescind the GEO. Because an SFO requires a predicate 
exclusion order, there is no basis to continue enforcement of SFOs 
after rescission of the underlying GEO. See 19 U.S.C. 1337(i)(B) (``the 
article was previously denied entry into the United States by reason of 
an order issued under subsection (d)''). Accordingly, all SFOs in this 
investigation are likewise rescinded. The rescissions are effective as 
of the date of the Order issued herewith.
    The rescission proceeding is terminated. The GEO and all SFOs are 
rescinded.
    The Commission vote for this determination took place on March 4, 
2021.
    The authority for the Commission's determinations is contained in 
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and 
in part 210 of the Commission's Rules of Practice and Procedure (19 CFR 
part 210).

    By order of the Commission.


[[Page 13733]]


    Issued: March 4, 2021.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2021-04923 Filed 3-9-21; 8:45 am]
BILLING CODE 7020-02-P