M S International, Inc. v. United States ( 2022 )

Case: 21-1679 Document: 84 Page: 1 Filed: 04/25/2022
United States Court of Appeals
for the Federal Circuit
______________________
M S INTERNATIONAL, INC., FOSHAN YIXIN
STONE COMPANY, LTD., ARIZONA TILE LLC,
Plaintiffs
BRUSKIN INTERNATIONAL, LLC,
Plaintiff-Appellant
v.
UNITED STATES, CAMBRIA COMPANY LLC,
Defendants-Appellees
______________________
2021-1679
______________________
Appeal from the United States Court of International
Trade in No. 1:19-cv-00140-LMG, Senior Judge Leo M.
Gordon.
-----------------------------------------------------
M S INTERNATIONAL, INC., ARIZONA TILE LLC,
Plaintiffs
BRUSKIN INTERNATIONAL, LLC,
Plaintiff-Appellant
v.
UNITED STATES, CAMBRIA COMPANY LLC,
Defendants-Appellees
Case: 21-1679 Document: 84 Page: 2 Filed: 04/25/2022
2 M S INTERNATIONAL, INC. v. US
______________________
2021-1680
______________________
Appeal from the United States Court of International
Trade in No. 1:19-cv-00141-LMG, Senior Judge Leo M.
Gordon.
______________________
Decided: April 25, 2022
______________________
DAVID J. CRAVEN, Craven Trade Law LLC, Chicago, IL,
argued for plaintiff-appellant.
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
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 BENJAMIN JACOB BAY, NICHOLAS
J. BIRCH, CHRISTOPHER CLOUTIER, ELIZABETH DRAKE,
WILLIAM ALFRED FENNELL, KELSEY RULE, ROGER BRIAN
SCHAGRIN.
______________________
Before HUGHES, MAYER, and STOLL, Circuit Judges.
HUGHES, Circuit Judge.
In parallel antidumping and countervailing duty inves-
tigations of quartz surface products from China, the De-
partment of Commerce amended the scope of its
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M S INTERNATIONAL, INC. v. US 3
investigations to prevent producers and exporters in China
from evading its orders by using glass in place of quartz.
Bruskin International LLC challenges Commerce’s author-
ity to modify the scope of the investigation and to do so
without a hearing. Bruskin also challenges the factual find-
ings that led Commerce to modify the scope of its investi-
gations. Because Commerce has discretion to set the scope
of its investigations, Bruskin’s hearing request was un-
timely, and substantial evidence supports Commerce’s fac-
tual findings, we affirm the Court of International Trade’s
decision upholding Commerce’s scope modification.
BACKGROUND
In 2018, Cambria Corporation filed a petition seeking
antidumping and countervailing duties on certain quartz
surface products from China. The petition requested the
following scope:
The merchandise covered by the investigation is
certain quartz surface products. Quartz surface
products consist of slabs and other surfaces created
from a mixture of materials that includes predom-
inately silica (e.g., quartz, quartz powder, cristobal-
ite) as well as a resin binder . . . .
Appx103 (Petition Scope).
Commerce asked Cambria how to determine whether a
product is “predominately silica.” In response, Cambria
clarified that “the scope of the investigation only includes
products where the silica content is greater than any other
single material, by actual weight.” Appx118. Commerce
needed further clarification. The scope expressly covered
products made from quartz, a crystalline form of silica. But
silica is also the primary ingredient in most glass, although
glass differs from quartz in that it is amorphous rather
than crystalline. Appx1186–88. Commerce asked Cambria
to clarify whether “products where the silica content is
greater than any other single material” includes “glass
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4 M S INTERNATIONAL, INC. v. US
products” and to “revise the proposed scope if necessary.”
Appx118. Cambria responded:
The quartz surface products covered by the scope of
the investigation may contain a certain quantity of
crushed glass. However, the scope is not intended
to cover products in which the crushed glass con-
tent of the product is greater than any other single
material, by actual weight. [Cambria] has revised
the scope to exclude any such crushed glass surface
products . . . .
Appx127.
Commerce adopted Cambria’s exclusion of crushed
glass, providing the following statement of scope in its no-
tices of initiation:
The merchandise covered by the investigation
is certain quartz surface products. Quartz surface
products consist of slabs and other surfaces created
from a mixture of materials that includes predom-
inately silica (e.g., quartz, quartz powder, cristobal-
ite) as well as a resin binder . . . . However, the
scope of the investigation only includes products
where the silica content is greater than any other
single material, by actual weight. . . .
....
. . . Specifically excluded from the scope of the
investigation are crushed glass surface products.
Crushed glass surface products are surface prod-
ucts in which the crushed glass content is greater
than any other single material, by actual weight.
Initiation of Less-than-Fair Value Investigation, 83 Fed.
Reg. 22,613, 22,618 (May 16, 2018) (citation omitted); Ini-
tiation of Countervailing Duty Investigation, 83 Fed. Reg.
22,618, 22,622 (May 16, 2018) (Preliminary Scope). Com-
merce reiterated this Preliminary Scope in its preliminary
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M S INTERNATIONAL, INC. v. US 5
scope determination, and in its preliminary determinations
in both investigations. Preliminary Affirmative Counter-
vailing Duty Determination, 83 Fed. Reg. 47,881, 47,882
(Sept. 21, 2018); Preliminary Determination of Sales at
Less than Fair Value, 83 Fed. Reg. 58,540, 58,542–43 (Nov.
20, 2018). In October 2018, the parties filed briefs address-
ing the Preliminary Scope.
On February 14, 2019, Cambria submitted a request
(Scope Request) asking Commerce to accept new factual in-
formation and further “clarify” the scope. Cambria ex-
plained that it had intended the crushed glass exclusion to
cover crushed glass products that “display visible pieces of
crushed glass on their surfaces, giving them a distinct aes-
thetic compared to other quartz surface products.”
Appx562–63. Cambria explained that such products “serve
a niche segment of the overall countertop market—
i.e., countertops made from recycled materials that promi-
nently display in a visible manner how they are an ‘eco-
friendly solution.’” Appx563. But in November 2018 and
January 2019, Cambria had received advertisements and
product descriptions from Chinese producers for “quartz
glass” products that are visually similar to quartz products
but contain higher amounts of glass. These producers sug-
gested that they had recently begun offering “quartz glass”
in response to high tariffs and emphasized that their
quartz glass was not covered by the tariffs due to its higher
glass content. Cambria requested that Commerce “clarify”
the scope by limiting the crushed glass exclusion to crushed
glass products with large pieces of glass visible across the
surface. Appx569.
On March 12, 2019, Bruskin and other respondents re-
quested a hearing on crushed glass scope issues. Commerce
denied the request for a hearing, ruling it untimely under
19 C.F.R. § 351.310(c) because more than 30 days had
passed since the preliminary determinations in both inves-
tigations. The parties filed factual information, case briefs,
and rebuttal comments on the issue. Commerce also held
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6 M S INTERNATIONAL, INC. v. US
an ex parte meeting with Chinese producers and U.S. im-
porters regarding scope.
Commerce then issued a decision modifying the
crushed glass exclusion to what Cambria had requested:
Specifically excluded from the scope of the investi-
gation{s} are crushed glass surface products.
Crushed glass surface products must meet each of
the following criteria to qualify for this exclusion:
(1) the crushed glass content is greater than any
other single material, by actual weight; (2) there
are pieces of crushed glass visible across the sur-
face of the product; (3) at least some of the individ-
ual pieces of crushed glass that are visible across
the surface are larger than one centimeter wide as
measured at their widest cross-section (glass
pieces); and (4) the distance between any single
glass piece and the closest separate glass piece does
not exceed three inches.
Appx1179 (Final Scope) (alteration in original). The same
exclusion appears in Commerce’s final determination and
antidumping and countervailing duty orders. Final Affirm-
ative Determination of Sales at Less than Fair Value, 84
Fed. Reg. 23,767, 23,770–71 (May 23, 2019); Final Affirm-
ative Countervailing Duty Determination, 84 Fed. Reg.
23,760, 23,763 (May 23, 2019); Antidumping and Counter-
vailing Duty Orders, 84 Fed. Reg. 33,053, 33,055–56 (July
11, 2019).
Bruskin appealed to the Court of International Trade.
Bruskin argued that Commerce’s scope modification was
procedurally defective because Commerce should have con-
sidered Cambria’s Scope Request to be a request to amend
the petition and denied it as untimely and not properly sub-
mitted to the International Trade Commission. Bruskin as-
serted that it was entitled to a hearing on the crushed glass
scope issue. Finally, Bruskin argued that Commerce erred
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M S INTERNATIONAL, INC. v. US 7
in finding that crushed glass of any kind was ever within
the scope of the investigation.
The court sustained Commerce’s scope modification.
Mem. and Order, M S Int’l, Inc. v. United States, 493 F.
Supp. 3d 1346 (Ct. Int’l Trade 2021) (No. 19-140), ECF
No. 68; Mem. and Order, M S Int’l, Inc. v. United States,
493 F. Supp. 3d 1349 (Ct. Int’l Trade 2021) (No. 19-141),
ECF No. 65. It entered partial judgment on the scope issue
under USCIT Rule 54(b). M S Int’l, 493 F. Supp. 3d 1346;
M S Int’l, 493 F. Supp. 3d 1349.
Bruskin timely appeals the trial court’s partial judg-
ment. We have jurisdiction under 28 U.S.C. § 1295(a)(5).
ANALYSIS
“We review a decision of the Court of International
Trade evaluating an antidumping determination by Com-
merce by reapplying the statutory standard of review . . . .
We will uphold Commerce’s determination unless it is un-
supported by substantial evidence on the record or other-
wise not in accordance with the law.” Peer Bearing Co.-
Changshan v. United States, 766 F.3d 1396, 1399 (Fed. Cir.
2014) (citation omitted); 19 U.S.C. § 1516a(b)(1)(B)(i).
I
Bruskin argues that Commerce erred in accepting
Cambria’s Scope Request. In Bruskin’s view, Commerce
should have treated the Scope Request as a request to
amend the petition, and thus denied it for not being sub-
mitted to the Commission under 19 U.S.C. § 1673a(b)(2)
and 19 C.F.R. § 351.202(e) and for being untimely under
Commerce’s usual practices. Commerce responds that it
changed the scope not pursuant to Cambria’s Scope Re-
quest but under its authority to set the scope of an investi-
gation in response to properly submitted information about
potential evasion.
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8 M S INTERNATIONAL, INC. v. US
While “[t]he petition initially determines the scope of
the investigation, . . . Commerce has inherent power to es-
tablish the parameters of the investigation, so that it would
not be tied to an initial scope definition that may not make
sense in light of the information available to Commerce or
subsequently obtained in the investigation.” Duferco Steel,
Inc. v. United States, 296 F.3d 1087, 1089 (Fed. Cir. 2002)
(cleaned up); see also King Supply Co., LLC v. United
States, 674 F.3d 1343, 1345 (Fed. Cir. 2012) (“While peti-
tioners and other interested parties in the investigation
may propose the scope of merchandise to be investigated,
Commerce alone defines the scope of the [antidumping] or-
der.”); NTN Bearing Corp. of Am. v. United States, 14 Ct.
Int’l Trade 623, 627 (1990).
Commerce was not bound to the Preliminary Scope in
this case. Commerce found the Preliminary Scope to be de-
fective because Chinese producers and exporters could
evade antidumping and countervailing duty orders by sell-
ing “quartz glass,” so Commerce modified the scope to cure
the defect. This reasoning is consistent with our case law.
Bruskin also argues that Commerce’s scope modifica-
tion was unlawful because it was contrary to the intent of
the petitioner. Even if this were a limitation on Com-
merce’s inherent authority to modify scope, we disagree
that Commerce departed from the petitioner’s intent here.
The Court of International Trade has held that Com-
merce owes deference to the petitioner’s intended scope. Ad
Hoc Shrimp Trade Action Comm. v. United States, 33 Ct.
Int’l Trade 915, 924 (2009) (first citing 19 U.S.C. §§ 1673,
1673a(b); and then citing NTN Bearing, 14 Ct. Int’l Trade
at 626) (ruling that a scope modification was contrary to
law where an importer requested the change and the peti-
tioner argued that the change would “open[] the door to cir-
cumvention”). Here, the Final Scope was no broader than
the Petition Scope. When “defin[ing] or clarify[ing] the
scope of an antidumping investigation” while staying
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M S INTERNATIONAL, INC. v. US 9
within the bounds of “the intent of the petition,” Commerce
“retains broad discretion.” Minebea Co. v. United States, 16
Ct. Int’l Trade 20, 22 (1992). And “Commerce . . . may de-
part from the scope as proposed by a petition if it deter-
mines that petition to be ‘overly broad, or insufficiently
specific to allow proper investigation, or in any other way
defective.’” Ad Hoc Shrimp, 33 Ct. Int’l Trade at 924 (quot-
ing NTN Bearing, 14 Ct. Int’l Trade at 627). Commerce
may set the scope “with the purpose in mind of preventing
the intentional evasion or circumvention of the antidump-
ing duty law.” Mitsubishi Elec. Corp. v. United States, 12
Ct. Int’l Trade 1025, 1046 (1988); NTN Bearing, 14 Ct. Int’l
Trade at 628 (discussing Congressional intent to prevent
evasion).
Contrary to Bruskin’s argument, Commerce gave ap-
propriate deference to the petitioner’s intent. Cambria’s
Petition Scope was ambiguous about crushed glass. While
the focus of the Petition Scope was on crystalline forms of
silica, such as quartz, it also defined the bounds of the
scope by silica content and not crystal structure: the Pre-
liminary Scope covered products made from “a mixture of
materials that includes predominately silica.” Because
these statements of Cambria’s intent are ambiguous about
crushed glass, the Final Scope is not inconsistent with
them. And although the crushed glass exclusion in the Pre-
liminary Scope applies to quartz glass, Cambria explained
in its Scope Request that it had in mind crushed glass prod-
ucts with large, visible pieces of glass and did not mean to
place quartz glass outside the scope. Cambria then pro-
vided a new statement of its intended scope. Under these
circumstances, Commerce gave appropriate deference to
the petitioner’s intent.
Bruskin argues that because Commerce is prohibited
from reconsidering industry support after initiating its in-
vestigation, it should not be allowed to modify the scope in
a way that could change the makeup of the domestic indus-
try. Commerce must find that the petition has the support
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10 M S INTERNATIONAL, INC. v. US
of a certain fraction of domestic industry producers before
initiating a countervailing duty or antidumping investiga-
tion. 19 U.S.C. §§ 1671a(c)(4)(A), 1673a(c)(4)(A). It may not
revisit that determination after initiation. 19 U.S.C.
§§ 1671a(c)(4)(E), 1673a(c)(4)(E). A scope modification or
clarification at any stage could change the makeup of the
domestic industry and reduce the fraction of the domestic
industry that supports the petition. But that possibility
does not nullify Commerce’s authority to make scope deter-
minations. See Kyocera Solar, Inc. v. United States, 253 F.
Supp. 3d 1294, 1315–16 (Ct. Int’l Trade 2017) (holding that
inclusion of additional sales was not reason to undermine
Commerce’s determination to modify scope in its final de-
termination).
Bruskin relies on cases limiting Commerce’s discretion
to modify the scope after an antidumping or countervailing
duty order has issued, whether expressly or through pur-
ported “clarifications” of the scope. See Alsthom Atlantique
v. United States, 787 F.2d 565 (Fed. Cir. 1986); Smith Co-
rona Corp. v. United States, 915 F.2d 683 (Fed. Cir. 1990);
Ericsson GE Mobile Commc’ns, Inc. v. United States, 60
F.3d 778 (Fed. Cir. 1995). Those cases do not apply here.
Commerce modified the scope before any final determina-
tion or order issued, so Commerce enjoyed greater discre-
tion. See Duferco, 296 F.3d at 1096–97 (“A purpose of the
investigation is to determine what merchandise should be
included in the final order,” but once a final order has is-
sued, “it can not be changed in a way contrary to its
terms.”).
Bruskin argues Commerce’s treatment of the Second
Scope Request differed from its treatment of the request in
another investigation, Sodium Hexametaphosphate from
the People’s Republic of China (SHMP). In that case, Com-
merce denied petitioners’ request to expand the scope of the
investigation without filing an amended petition because a
revision of scope after the preliminary determination is
only appropriate where it constitutes “a clarification of
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M S INTERNATIONAL, INC. v. US 11
language already in the scope.” See SHMP, 73 ITADOC
6,479 at cmt. 1 (Feb. 4, 2008). Commerce’s analysis in
SHMP is not binding on us and thus does not bear on
whether Commerce’s scope determination was in accord-
ance with law and supported by substantial evidence. And
unlike in SHMP, Cambria’s Second Scope Request included
new evidence of potential evasion. That evidence justified
Commerce’s decision to depart from its course in SHMP
and modify the scope pursuant to its own authority.
Because Commerce did not have to consider the Second
Scope Request to be a request to amend the petition, Com-
merce did not err in modifying the scope without requiring
Cambria to file an amended petition with the International
Trade Commission.
II
Bruskin next argues Commerce misapplied 19 C.F.R.
§ 351.310(c) and violated 19 U.S.C. § 1677c(a)(1) when
denying its hearing request as untimely.
Under 19 U.S.C. § 1677c(a)(1), Commerce must “hold a
hearing in the course of an investigation upon the request
of any party to the investigation before making a final de-
termination.” The procedure for a party to request a hear-
ing is found in 19 C.F.R. § 351.310(c):
Any interested party may request that the Secre-
tary hold a public hearing on arguments to be
raised in case or rebuttal briefs within 30 days af-
ter the date of publication of the preliminary deter-
mination or preliminary results of review, unless
the Secretary alters this time limit, or in a proceed-
ing where the Secretary will not issue a prelimi-
nary determination, not later than a date specified
by the Secretary.
Bruskin’s March 12, 2019 request for a hearing came three
months after Commerce issued its preliminary antidump-
ing determination and more than four months after
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12 M S INTERNATIONAL, INC. v. US
Commerce issued its preliminary countervailing duty de-
termination.
Bruskin argues that because Commerce’s preliminary
determinations did not address the crushed glass scope is-
sue, it was an issue “where the Secretary will not issue a
preliminary determination” under 19 C.F.R. § 351.310(c),
so the 30-day deadline to request a hearing did not apply.
But the regulation refers to “proceedings,” not issues, on
which Commerce does not issue a preliminary decision.
Commerce issued a preliminary decision in these anti-
dumping and countervailing duty proceedings, so the 30-
day deadline applied.
Bruskin notes that the statute contains no 30-day
deadline, suggesting that imposing one by regulation con-
tradicts the statute. But Commerce may set such deadlines
where the statute is silent, Dofasco Inc. v. United States,
390 F.3d 1370, 1372 (Fed. Cir. 2004), and must be permit-
ted to enforce them in order to administer the trade remedy
laws, Dongtai Peak Honey Indus. Co. v. United States, 777
F.3d 1343, 1351 (Fed. Cir. 2015); see also Vt. Yankee Nu-
clear Power Corp. v. Nat. Res. Def. Council, Inc., 435 U.S.
519, 543 (1978) (“Absent constitutional constraints or ex-
tremely compelling circumstances, the administrative
agencies should be free to fashion their own rules of proce-
dure and to pursue methods of inquiry capable of permit-
ting them to discharge their multitudinous duties.”
(cleaned up)).
Commerce’s regulations provide for exceptions to dead-
lines, see 19 C.F.R. §§ 351.302, 351.310(c), but rather than
requesting an exception, Bruskin has only argued that its
hearing request was timely. The request was untimely un-
der the clear language of 19 C.F.R. § 351.310(c), and so
Commerce’s denial was in accordance with the law.
Finally, Bruskin alludes to constitutional due process
issues but provides no analysis. In view of the ample oppor-
tunity Commerce gave respondents to submit briefing and
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M S INTERNATIONAL, INC. v. US 13
factual information on this scope issue, Bruskin has not
persuaded us that Commerce committed any due process
violation.
III
Finally, Bruskin argues that substantial evidence does
not support certain fact findings by Commerce. Commerce
explained, when modifying the scope, that “evidence on the
record demonstrates that glass is made predominantly of
silica, just as quartz is made of silica.” Appx1188. Thus,
Commerce determined it was necessary to include lan-
guage that excluded certain crushed glass. Bruskin argues
that a “product made of crushed glass is not ‘predominately
of silica’ and is thus outside the scope of any order.” Appel-
lant’s Br. 47. Bruskin argues that silica is merely an ingre-
dient in glass that “undergoes a transformation” that
makes the silica no longer “separable.” Appellant’s
Br. 45–46.
Substantial evidence supports Commerce’s finding.
Commerce cited respondent Foshan Yixin’s own test re-
sults showing that a sample of “crushed glass” purchased
in China was 71.48% silica. Appx1188 (citing Appx986–89).
And Foshan Yixin’s other factual submissions include arti-
cles explaining that “[w]hat the term ‘glass’ means to most
people . . . is a product made from silica (SiO2),” Appx872–
75, and “typical, modern soda-lime-silica glass (used to
make bottles and windows)” is made from 73.6% silica,
Appx869.
Bruskin is correct that glass can have significant non-
silica components, meaning “[t]here is no single chemical
composition that characterizes all glass.” Appx869. But
“[m]ost natural and artificial glasses are predominantly
composed of silica with variable amounts of impurities,”
Appx880, thus, Commerce’s understanding that glass
could be within the scope is justified.
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14 M S INTERNATIONAL, INC. v. US
The cited evidence does not support Bruskin’s asser-
tions that silica loses its identity as silica when made into
glass. Bruskin cites test results that it alleges show “that
crushed glass product had a higher percentage of non-silica
substances and the silica was no longer readily identifia-
ble.” Appellant’s Br. 46 (citing Appx987–89). But one test
result shows a crushed glass material found to be 71.48%
SiO2, contradicting Bruskin’s assertions. The other result
is an x-ray crystallography analysis that determined the
glass sample was 100% amorphous, which says nothing
about what molecules are present in the amorphous sam-
ple.
Bruskin also argues there is no substantial evidence of
actual evasion and no substantial evidence that quartz
glass products existed before Commerce initiated its inves-
tigation. Bruskin forfeited these arguments by failing to
raise them before the Court of International Trade. See
Mem. in Support of the Mot. for J. on the Agency R. at 14–
16, M S Int’l, 493 F. Supp. 3d 1346 (No. 19-140), ECF
No. 51 attach. 1. Further, Bruskin challenges facts that
Commerce did not find or rely on. Commerce found only a
potential for evasion—the scope modification was justified
regardless of any actual evasion. Appx1173–74. The adver-
tisements and product descriptions in Cambria’s Scope Re-
quest provide substantial evidence for a finding of potential
or likely evasion. And Commerce explained that the quartz
glass products “whether newly available or not, may allow
exporters and importers to avoid the payment of duties and
undermine the effectiveness of any potential order.”
Appx1173–74 (emphasis added).
***
For these reasons, the judgment of the Court of Inter-
national Trade is
AFFIRMED