Case: 22-1077 Document: 63 Page: 1 Filed: 01/05/2023
United States Court of Appeals
for the Federal Circuit
______________________
POKARNA ENGINEERED STONE LIMITED,
Plaintiff
M S INTERNATIONAL, INC.,
Plaintiff-Appellant
v.
UNITED STATES, CAMBRIA COMPANY LLC,
Defendants-Appellees
______________________
2022-1077
______________________
Appeal from the United States Court of International
Trade in No. 1:20-cv-00127-LMG, Senior Judge Leo M.
Gordon.
______________________
Decided: January 5, 2023
______________________
JONATHAN STOEL, Hogan Lovells US LLP, Washington,
DC, argued for plaintiff-appellant. Also represented by
MICHAEL JACOBSON, CRAIG A. LEWIS, NICHOLAS SPARKS.
JOSHUA E. KURLAND, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee United States.
Also represented by BRIAN M. BOYNTON, TARA K. HOGAN,
PATRICIA M. MCCARTHY; VANIA WANG, Office of the Chief
Case: 22-1077 Document: 63 Page: 2 Filed: 01/05/2023
2 POKARNA ENGINEERED STONE LIMITED v. US
Counsel for Trade Enforcement & Compliance, United
States Department of Commerce, Washington, DC.
LUKE A. MEISNER, Schagrin Associates, Washington,
DC, argued for defendant-appellee Cambria Company
LLC. Also represented by MICHELLE ROSE AVRUTIN,
BENJAMIN JACOB BAY, NICHOLAS J. BIRCH, CHRISTOPHER
CLOUTIER, ELIZABETH DRAKE, WILLIAM ALFRED FENNELL,
JEFFREY DAVID GERRISH, KELSEY RULE, ROGER BRIAN
SCHAGRIN.
______________________
Before MOORE, Chief Judge, LOURIE and PROST, Circuit
Judges.
LOURIE, Circuit Judge.
MS International (“MSI”) appeals from a decision of the
United States Court of International Trade (“the Trade
Court”) sustaining the United States Department of Com-
merce’s (“Commerce’s”) Final Determination in its Investi-
gation of Quartz Surface Products (“QSPs”) from India. See
Pokarna Engineered Stone Ltd. v. United States,
547
F. Supp. 3d 1300 (Ct. Int’l Trade 2021) (“Decision”); Certain
Quartz Surface Products from India: Final Determination
of Sales at Less Than Fair Value and Final Negative Deter-
mination of Critical Circumstances,
85 Fed. Reg. 25,391
(Dep’t of Commerce May 1, 2020) (“Final Determination”).
For the reasons provided below, we affirm.
BACKGROUND
MSI is a U.S. importer of QSPs. QSPs are stone com-
posite building materials that are used primarily for coun-
tertops. Production of QSPs involves (1) the creation of a
QSP slab from raw materials and (2) fabrication that trans-
forms the slab into a finished product. In 2019, Cambria,
a domestic quartz slab producer, filed a petition for impo-
sition of antidumping duties on QSPs from India. MSI
challenged Cambria’s standing to file the petition, alleging
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POKARNA ENGINEERED STONE LIMITED v. US 3
that Cambria failed to include QSP “fabricators” as domes-
tic industry “producers” in its industry support calculation.
MSI’s submission included letters that MSI had obtained
from various fabricators that opposed Cambria’s petition.
MSI alleged that, if the views of “fabricators” were included
in the industry support calculation, then there would be in-
sufficient industry support to proceed with the petition.
Commerce initiated an investigation in May 2019. Cer-
tain Quartz Surface Products from India and the Republic
of Turkey: Initiation of Less-Than-Fair-Value Investiga-
tions,
84 Fed. Reg. 25,529 (Dep’t of Commerce June 3, 2019)
(“Initiation”) and accompanying Initiation Checklist (May
29, 2019) (“Checklist”); J.A. 1002–1046. Commerce deter-
mined that the fabricators did not perform sufficient pro-
duction-related activities to be considered “producers” for
purposes of determining industry support. Commerce
stated that the information Cambria had submitted made
it “clear that there are significant differences in the level of
complexity and capital investment, employment, training
and technical expertise, production processes, and type of
equipment, between quartz surface slab producers and fab-
ricators.” Checklist, Attachment II at 14; J.A. 1030. In
particular, Commerce determined that the evidence estab-
lished that “there are seven steps in the production of
quartz surface products: (1) mixing raw materials, (2) com-
bining, (3) dispensing and molding, (4) pressing, (5) curing,
(6) cooling, and (7) polishing.” Checklist, Attachment II at
15; J.A. 1031. In contrast, Commerce found that fabrica-
tors engage in a process where they “(1) consult with cus-
tomers, (2) develop engineering diagrams, (3) perform
intricate cutting, and (4) perform various edge and surface
finishing operations.” Checklist, Attachment II at 15; J.A.
1031.
In summary, Commerce found that fabricators have far
lower capital investment, considerably less specialized
knowledge, fewer employees, and utilize broadly available
equipment compared to quartz slab production. In
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4 POKARNA ENGINEERED STONE LIMITED v. US
conclusion, Commerce found that “the fabrication process
does not change the fundamental physical characteristics
imparted during the slab production process,” Checklist,
Attachment II at 14; J.A. 1030, and that “producers” did
not include “fabricators,” Checklist, Attachment II at 16;
J.A. 1032.
MSI and Pokarna Engineered Stone Ltd., a large In-
dian exporter of QSPs, independently sought judicial re-
view by the Trade Court of Commerce’s Final
Determination. Their appeals were consolidated. The
Trade Court determined that the term “producers” is not
defined in the statute and further stated that, “[w]ithout a
definition, there is no clear statutory answer as to whether
‘producers’ is broadly defined so as to include QSP fabrica-
tors for purposes of Commerce’s industry support analy-
sis.” Decision, 547 F. Supp. 3d at 1305. The Trade Court
further held that Commerce’s interpretation of “producers”
as entities that have a stake in the domestic industry was
reasonable, and that Commerce’s reliance on the “sufficient
production-related activities test” to interpret the term
“producers” was lawful. Id. at 1305, 1306. The Trade
Court further sustained Commerce’s determination that
fabricators are not producers for industry support purposes
as having been supported by substantial evidence. Id. at
1309.
In summary, Commerce determined, and the Trade
Court sustained, that the term “producer” did not include
“fabricators” for purposes of the industry support calcula-
tion. MSI appealed. We have jurisdiction under
28 U.S.C.
§ 1295(a)(5).
DISCUSSION
Commerce must impose antidumping duties on im-
ported goods that are being sold, or are likely to be sold, in
the U.S. at “less than fair value,” which could harm the
U.S. domestic industry.
19 U.S.C. §§ 1673, 1677(34). Com-
merce initiates antidumping investigations based on a
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POKARNA ENGINEERED STONE LIMITED v. US 5
petition filed by the domestic industry alleging injury by
unfairly traded imports. To initiate the investigation,
Commerce must “determine if the petition has been filed
by or on behalf of the industry” (i.e., whether there is ade-
quate industry support). 19 U.S.C. § 1673a(c)(1)(A)(ii).
The term “industry” is defined in the statute as “the
producers . . . of a domestic like product, or those producers
whose collective output of a domestic like product consti-
tutes a major proportion of the total domestic production of
the product.”
19 U.S.C. § 1677(4)(A). To be filed on behalf
of the domestic industry, domestic producers or workers
who support the petition must account for (1) at least 25
percent of the total production of the domestic like product
and (2) more than 50 percent of the production of the do-
mestic like product produced by the portion of the industry
expressing support or opposition to the petition. 19 U.S.C.
§ 1673a(c)(4)(A). “Domestic producers or workers” is de-
fined as “interested parties who are eligible to file a peti-
tion under [19 U.S.C. § 1673a(b)(1)].” 19 U.S.C.
§ 1673a(c)(5). “Interested parties” include “a manufac-
turer, producer, or wholesaler in the United States of a do-
mestic like product.”
19 U.S.C. § 1677(9)(C). The terms
“manufacturer, producer, or wholesaler” are not defined by
the statute.
MSI raises two challenges on appeal. First, MSI ar-
gues that Commerce erred in determining that the term
“producer” in § 1677(9)(C) did not include “fabricators.”
Second, MSI contends that Commerce’s finding that “fabri-
cators” are not “producers” was not supported by substan-
tial evidence. We address each argument in turn.
We uphold a Commerce determination unless it is un-
supported by substantial record evidence or is otherwise
unlawful. Union Steel v. United States,
713 F.3d 1101,
1106 (Fed. Cir. 2013) (quoting 19 U.S.C.
§ 1516a(b)(1)(B)(i)). A finding is supported by substantial
evidence if a reasonable mind might accept the evidence as
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6 POKARNA ENGINEERED STONE LIMITED v. US
adequate to support the finding. Consol. Edison Co. v.
NLRB,
305 U.S. 197, 229 (1938). “[W]here two different,
inconsistent conclusions may reasonably be drawn from
the evidence in record, an agency’s decision to favor one
conclusion over the other is the epitome of a decision that
must be sustained upon review for substantial evidence.”
In re Jolley,
308 F.3d 1317, 1329 (Fed. Cir. 2002).
To determine whether a company engages in “sufficient
production-related activities” to be considered a “pro-
ducer,” Commerce considers six factors. The International
Trade Commission (“ITC”) originated these factors and
uses them in determining whether an entity is part of a
domestic industry. The factors are as follows: (1) the source
and extent of the entity’s capital investment; (2) the tech-
nical expertise involved in its U.S. production activities;
(3) the value added to the product in the U.S.; (4) employ-
ment levels; (5) the quantity and type of parts sourced in
the U.S.; and (6) any other costs and activities in the U.S.
directly leading to production of the like product. See, e.g.,
Checklist, Attachment II at 10; J.A. 1026.
I
We first consider MSI’s challenge to Commerce’s deter-
mination that the term “producer” in §§ 1673a and
1677(9)(C) does not include “fabricators.” MSI argues that
Commerce acknowledged that “fabricators” are “producers”
of the domestic like product and thus acted unlawfully by
excluding “fabricators” from its industry support calcula-
tions. MSI asserts that § 1673a(c)(4)(B) provides two lim-
ited exceptions excluding U.S. producers from industry
support calculations: (1) when producers are related to for-
eign producers and (2) when producers are importers. MSI
contends that neither exception applies here, so Commerce
was required under § 1673a(c)(4)(D) to gather additional
information on industry support before initiating the inves-
tigation. In the absence of such additional information,
Commerce was required to terminate the investigation.
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POKARNA ENGINEERED STONE LIMITED v. US 7
MSI further contends that under Chevron step one,
Commerce’s decision to exclude certain U.S. producers of
the domestic like product from its definition of the domestic
industry and industry support calculation violated the
clear terms of the statute. Even though “producer” is not
defined in the statute, MSI asserts, the absence of a defini-
tion does not equate to ambiguity at Chevron step one. MSI
asserts that the ordinary meaning of the term “producer”
is sufficient, and thus proceeding to step two is not re-
quired.
Cambria and the government respond that MSI’s claim
that Commerce found “fabricators” to be “producers” and
then excluded them from the industry support calculation
without meeting a statutory exception is a mischaracteri-
zation of Commerce’s findings. Cambria and the govern-
ment further respond that Commerce did not act
unlawfully by excluding QSP fabricators from its industry
support calculations. Cambria and the government agree
that the statute is silent with respect to the term “pro-
ducer” and so Commerce lawfully proceeded to Chevron
step two, filling the gap in the statute by reasonably inter-
preting “producer” to mean a company that performs suffi-
cient production-related activities in the U.S. such that it
has a stake in the domestic industry.
We first note that Cambria and the government are
correct in stating that MSI’s contention that Commerce
found “fabricators” to be “producers” is a mischaracteriza-
tion of Commerce’s findings. Commerce did not find “fab-
ricators” to be “producers.” Instead, Commerce stated that
“fabricators do not perform sufficient production-related
activities to qualify as domestic producers of [QSPs].”
Checklist, Attachment II at 16; J.A. 1032. To say that fab-
ricators do not perform sufficient production-related activ-
ities to be considered producers does not equate with MSI’s
contention that Commerce found fabricators to be produc-
ers and then excluded them from the industry support cal-
culation.
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8 POKARNA ENGINEERED STONE LIMITED v. US
It is undisputed that the term “producers” is not de-
fined in the statute. However, we need not employ a Chev-
ron analysis as urged by MSI because our precedent has
already interpreted the term “producers.” In Eurodif S.A.
v. United States, we held that Commerce’s interpretation
of the term “producer” as an entity with sufficient produc-
tion-related activities such that it has a stake in the domes-
tic industry in question was not unreasonable.
411 F.3d
1355, 1360–61 (Fed. Cir. 2005). At issue in Eurodif was
whether domestic utilities or foreign enrichers of uranium
were “producers” of low enriched uranium for purposes of
determining whether there was sufficient industry support
to begin an antidumping and countervailing duty investi-
gation.
Id. at 1358. Commerce determined that, “to be a
producer, an entity must have a ‘stake’ in the domestic in-
dustry in question,” further defining having a stake as “un-
dertaking the actual production of the domestic like
product within the United States.”
Id. at 1360 (citations
and internal quotation marks omitted). The Trade Court
sustained Commerce’s determination, and we affirmed,
holding that there was no basis to conclude that Com-
merce’s interpretation of the term “producer” was unrea-
sonable or not in accordance with the law.
Id. at 1360–61.
The question in Eurodif and the question here are the
same: was Commerce’s definition of “producer” for pur-
poses of an industry support calculation reasonable? As in
Eurodif, we answer here in the affirmative. Thus, Eurodif
controls. Accordingly, we find no error in Commerce’s de-
fining a producer as one having a stake in the industry.
To determine whether fabricators had a sufficient
“stake” in the industry to be considered producers of QSPs,
Commerce employed the sufficient production-related ac-
tivities test. In using the test, Commerce observed that
QSP producers create QSPs by “(1) mixing raw materials,
(2) combining, (3) dispensing and molding, (4) pressing,
(5) curing, (6) cooling, and (7) polishing.” Checklist, At-
tachment II at 15; J.A. 1031. In contrast, Commerce
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POKARNA ENGINEERED STONE LIMITED v. US 9
observed that QSP slab fabricators use what is already pro-
ducer-made QSPs and “(1) consult with customers, (2) de-
velop engineering diagrams, (3) perform intricate cutting,
and (4) perform various edge and surface finishing opera-
tions” on already existing QSPs. Checklist, Attachment II
at 15; J.A. 1031. Commerce concluded that the six factors
did not support the conclusion that fabricators were pro-
ducers of the domestic like product. We find no error in
Commerce’s use of the sufficient production-related activi-
ties test, and we further hold that the use of the test was
reasonable in determining the definition of “producer” and
whether fabricators had a sufficient “stake” in the U.S. in-
dustry to be considered producers.
In summary, we affirm Commerce’s interpretation of
the term “producers” as an entity that requires a stake in
the domestic industry. We further affirm Commerce’s use
of the sufficient production-related activities test to deter-
mine that the fabricators did not have a sufficient stake in
the domestic industry and thus did not qualify as “produc-
ers” for purposes of calculating industry support.
II
We next consider MSI’s challenge to the Trade Court’s
holding that Commerce’s finding that “fabricators” are not
“producers” was supported by substantial evidence.
MSI contends that, even if Commerce could lawfully
employ the sufficient production-related activities test, its
decision was not supported by substantial evidence be-
cause Commerce failed to consider evidence and to articu-
late a satisfactory explanation for its decision. MSI asserts
that none of Cambria’s exhibits reveals a rational connec-
tion between Commerce’s asserted facts and the choices it
made, and that Commerce did not conduct a critical exam-
ination of Cambria’s claims. MSI notes that the Trade
Court acknowledged that Commerce could have reached an
alternative finding.
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10 POKARNA ENGINEERED STONE LIMITED v. US
MSI further contends that Commerce’s findings are en-
titled to little deference because the ITC, which originated
the sufficient production-related activities test, reached
the opposite conclusion, determining that “fabricators”
were “producers” in a related investigation. Further, MSI
argues that the ITC issued U.S. producer questionnaires to
fabricators in related antidumping investigations, which
foreshadowed its findings that fabricators are producers.
Cambria and the government respond that MSI fails to
meet the burden for establishing that Commerce’s determi-
nation was not supported by substantial evidence. Cam-
bria and the government contend that MSI merely asks for
a reweighing of the evidence, which is not a valid basis for
overturning Commerce’s determination. Cambria and the
government assert that Commerce analyzed and addressed
all arguments and evidence and noted that Commerce is
prohibited from reconsidering industry support after an in-
vestigation is initiated.
Cambria and the government further respond that
Commerce and the ITC can reach separate determinations
on the same issue, and that the ITC had sent producer
questionnaires to fabricators in a separate investigation
does not alone imply that the ITC would find the fabrica-
tors to be producers without further information.
We agree with Cambria and the government that Com-
merce’s determination was supported by substantial evi-
dence. Commerce carefully considered the record evidence,
including Cambria’s exhibits that contain multiple exam-
ples of differences between producers and fabricators.
Commerce relied on several exhibits illustrating the differ-
ences in cost between establishing a QSP production plant
and a fabrication shop. Pet’r’s Resp. to MSI’s Comments
on Standing, Exs. 3–5; J.A. 944–968. Commerce also relied
on several exhibits discussing business operations of suc-
cessful fabrication businesses, the equipment fabrication
businesses use, and the smaller number of employees
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POKARNA ENGINEERED STONE LIMITED v. US 11
fabrication businesses have compared to production com-
panies. Pet’r’s Resp. to MSI’s Comments on Standing,
Ex. 7; J.A. 971–976. We note, as did the Trade Court, that
MSI is unable to point to anything other than Commerce’s
adverse finding that fabricators are not producers as evi-
dence of Commerce’s alleged failure to consider the evi-
dence in front of it. Decision, 547 F. Supp. 3d at 1308.
Finally, that the Trade Court stated that Commerce could
have reached an alternative finding is not sufficient to es-
tablish that Commerce’s finding was not supported by sub-
stantial evidence. Mitsubishi Heavy Indus. Ltd v. United
States,
275 F.3d 1056, 1062 (Fed. Cir. 2001) (“[T]he possi-
bility of drawing two inconsistent conclusions from the ev-
idence does not prevent an administrative agency’s finding
from being supported by substantial evidence.”). In conclu-
sion, MSI does not meet its burden in establishing that
Commerce’s determination was not based on substantial
evidence.
We further note that there is no requirement that Com-
merce and ITC reach the same conclusion on the same is-
sue. In fact, we have repeatedly held that Commerce and
the ITC can reach separate determinations on the same is-
sue. Hosiden Corp. v. Advanced Display Mfrs. of Am.,
85
F.3d 1561, 1568 (“The division of responsibility between
the [ITC] and Commerce is integral to the statutory
scheme,” and this “division of labor has been upheld even
where it has resulted in decisions which are difficult to rec-
oncile . . . .” (citations omitted)); Torrington Co. v. United
States,
747 F. Supp. 744, 748 (Ct. Int’l Trade 1990) (stating
that Commerce and the ITC reaching two different conclu-
sions is not unanticipated under the law), aff’d,
938 F.2d
1278 (Fed. Cir. 1991); Algoma Steel Corp. v. United States,
688 F. Supp. 639, 644 (Ct. Int’l Trade 1988) (“This division
of labor has been upheld even where it has resulted in de-
cisions which are difficult to reconcile.”), aff’d,
865 F.2d 240
(Fed. Cir. 1989), cert. denied,
492 U.S. 919 (1989). Con-
gress has indicated the same. Statement of Administrative
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12 POKARNA ENGINEERED STONE LIMITED v. US
Action accompanying the Uruguay Round Agreements Act,
H.R. Doc. No. 103–316, at 858 (1994) (stating that Com-
merce and the ITC could reach different decisions regard-
ing which entities should be part of the domestic industry,
“even where this may lead to somewhat different results in
individual cases”).
Commerce and the ITC perform different functions and
have different goals. Here, Commerce has interpreted the
term “producer” with the goal of determining which parties
have a stake in the domestic industry and how to calculate
that industry support. The ITC has, in contrast, inter-
preted the term “producer” to determine whether the do-
mestic industry has suffered a material injury as a result
of imports. Thus, the ITC’s determination of the meaning
of “producers” remains separate and apart from Com-
merce’s, and any differences do not change the present out-
come.
In summary, Commerce’s determination was sup-
ported by substantial evidence, and that Commerce and
the ITC may have come to different conclusions regarding
whether fabricators were producers plays no role in our de-
termination whether Commerce’s determination was based
on substantial evidence.
CONCLUSION
We have considered MSI’s remaining arguments, but
we find them unpersuasive. For the foregoing reasons, the
decision of the Trade Court is affirmed.
AFFIRMED
