Vietnam Finewood Co. Ltd. v. United States

Slip Op. 23-
UNITED STATES COURT OF INTERNATIONAL TRADE
VIETNAM FINEWOOD COMPANY
LIMITED, FAR EAST AMERICAN, INC.,
AND LIBERTY WOODS
INTERNATIONAL, INC.,
Plaintiffs,
and
INTERGLOBAL FOREST, LLC,
Consolidated-Plaintiff,
Before: Mark A. Barnett, Chief Judge
Consol. Court No. 22-00049
v.
UNITED STATES,
Defendant,
and
COALITION FOR FAIR TRADE IN
HARDWOOD PLYWOOD,
Defendant-Intervenor.
OPINION AND ORDER
[Remanding the U.S. Department of Commerce’s scope determination for the
antidumping duty and countervailing duty orders on certain hardwood plywood from the
People’s Republic of China; directing Commerce to correct the administrative record;
dismissing Plaintiff Vietnam Finewood Company Limited from the action.]
Dated: April 20, 2023
Gregory S. Menegaz and Vivien J. Wang, deKieffer & Horgan, PLLC, of Washington,
DC, argued for Plaintiffs. With them on the brief were J. Kevin Horgan, Judith L.
Holdsworth, and Alexandra H. Salzman.
Consol. Court No. 22-00049 Page 2
Thomas H. Cadden, Cadden & Fuller LLP, of Irvine, CA, argued for Consolidated
Plaintiff.
Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of New York, NY, argued for Defendant. With her on the brief
were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M.
McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was
Savannah R. Maxwell, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Stephanie M. Bell, Wiley Rein LLP, of Washington, DC, argued for Defendant-
Intervenor. With her on the brief were Timothy C. Brightbill and Tessa V. Capeloto.
Barnett, Chief Judge: This consolidated action involves a challenge to a U.S.
Department of Commerce (“Commerce” or “the agency”) scope determination for the
antidumping duty and countervailing duty orders on certain hardwood plywood from the
People’s Republic of China (“China”). See Compl., ECF No. 8; Confid. Final Scope
Ruling (“Final Scope Ruling”), ECF No. 34-1; see also Certain Hardwood Plywood
Products From the People’s Republic of China, 83 Fed. Reg. 504 (Dep’t Commerce
Jan. 4, 2018) (am. final determination of sales at less than fair value, and antidumping
duty order) (“Plywood AD Order”); Certain Hardwood Plywood Products From the
People’s Republic of China, 83 Fed. Reg. 513 (Dep’t Commerce Jan. 4, 2018) (CVD
order) (“Plywood CVD Order”) (together, “the Plywood Orders”). 1 The Plywood Orders
cover, inter alia,
1 The administrative record associated with Commerce’s scope determination is
contained in public and confidential administrative records filed in the antidumping and
countervailing proceedings underlying the Plywood Orders. See ECF Nos. 23-1
through 23-4. Consistent with the parties, and for ease of reference, the court cites to
documents contained in the public antidumping record (“PR”), ECF No. 23-1, and the
confidential antidumping record (“CR”), ECF No. 23-2. Plaintiffs also filed joint
Consol. Court No. 22-00049 Page 3
hardwood and decorative plywood, and certain veneered panels as
described below. For purposes of this proceeding, hardwood and
decorative plywood is defined as a generally flat, multilayered plywood or
other veneered panel, consisting of two or more layers or plies of wood
veneers and a core, with the face and/or back veneer made of non-
coniferous wood (hardwood) or bamboo.
Plywood AD Order, 83 Fed. Reg. at 512; Plywood CVD Order, 83 Fed. Reg. at 515. 2
Plaintiffs, Vietnam Finewood Company Limited (“Finewood”), Far East American,
Inc. (“FEA”), and Liberty Woods International, Inc. (“Liberty”) (collectively, “Plaintiffs”),
and Consolidated Plaintiff InterGlobal Forest, LLC (“IGF”), challenge Commerce’s
interpretation of the scope of the Plywood Orders to include two-ply panels imported
from China into Vietnam and Commerce’s determination that hardwood plywood
manufactured by Finewood in Vietnam using such Chinese two-ply remains in-scope
based on the absence of a substantial transformation. Confid. Pls. Rule 56.2 Mem. in
Supp. of Mot. for J. Upon the Agency R. (“Pls.’ Mem.”), ECF No. 31-1; Confid. Consol.
Pl. [IGF] Rule 56.2 Mem. in Supp. of Mot. for J. Upon the Agency R. (“Consol. Pl.’s
Mem.”), ECF No. 30-1. Plaintiffs also challenge Commerce’s rejection of portions of
Finewood’s initial scope comments. Pls.’ Mem. at 24–27.
Defendant United States (“the Government”) and Defendant-Intervenor Coalition
for Fair Trade in Hardwood Plywood (“the Coalition”) urge the court to sustain
appendices containing record documents cited in Parties’ briefs. See Confid. J.A.
(“CJA”), ECF Nos. 46 (Tabs 1–17), 46-1 (Tabs 18–31); Public J.A., ECF No. 47; Public
Revised J.A. Tab 19, ECF No. 54. The court references the confidential documents
unless otherwise specified.
2 When referencing specific scope language that appears in both orders, the court cites
to the antidumping duty order.
Consol. Court No. 22-00049 Page 4
Commerce’s scope ruling and deny the motions in all other respects. Confid. Def.’s
Resp. to Pls.’ Rule 56.2 Mot. for J. on the Agency R. (“Def.’s Resp.”), ECF No. 35;
Confid. Resp. to Mot. for J. on the Agency R. (“Def.-Ints.’ Resp.”), ECF No. 38. 3
For the reasons discussed herein, the court remands Commerce’s determination
that two-ply panels are covered by the scope of the Plywood Orders but sustains
Commerce’s treatment of Finewood’s initial scope comments. The court further finds
that certain of IGF’s arguments are barred by the doctrines of waiver and administrative
exhaustion, and that Finewood must be dismissed from the action.
BACKGROUND
This matter arose following U.S. Customs and Border Protection’s (“CBP”)
issuance of a covered merchandise referral to Commerce as part of EAPA 4
Investigation No. 7252 concerning possible evasion of the Plywood Orders. See
Placement of Covered Merch. Referral Docs. on the R. (Jan. 21, 2020), PR 9–11, CJA
Tab 6 (attaching CBP referral letter, dated Sept. 16, 2019 (“CBP Referral”)). Section
1517 of Title 19 grants CBP authority to investigate allegations of evasion of
antidumping duty or countervailing duty orders. 19 U.S.C. § 1517 (2018).5 “Evasion” is
defined as:
3 FEA, Liberty, and IGF are U.S. importers of hardwood plywood manufactured in
Vietnam by Finewood. See Final Scope Ruling at 2; Consol. Pl.’s Mem. at 1. The
Coalition represents domestic interests and was the petitioner in the investigation
underlying the Plywood Orders. Final Scope Ruling at 2.
4 EAPA refers to the Enforce and Protect Act, Pub. L. No. 114–125, § 421, 130 Stat.
122, 161 (2016).
5 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code and
all citations to the U.S. Code are to the 2018 edition, unless otherwise specified.
Consol. Court No. 22-00049 Page 5
entering covered merchandise into the customs territory of the United
States by means of any document or electronically transmitted data or
information, written or oral statement, or act that is material and false, or
any omission that is material, and that results in any cash deposit or other
security or any amount of applicable antidumping or countervailing duties
being reduced or not being applied with respect to the merchandise.
Id. § 1517(a)(5)(A). “Covered merchandise” means “merchandise that is subject to”
antidumping duty or countervailing duty orders issued pursuant to 19 U.S.C. § 1673e or
19 U.S.C. § 1671e, respectively. Id. § 1517(a)(3).
In the underlying proceeding, CBP was unable to determine whether Finewood’s
“[two]-ply cores of Chinese origin, which are further processed in Vietnam to include the
face and back veneers of non-coniferous wood, are within the scope of [the Plywood
Orders].” CBP Referral at 2. Under those circumstances, the statute directs CBP to
“refer the matter to [Commerce] to determine whether the merchandise is covered
merchandise pursuant to [Commerce’s authority] under subtitle IV [of the Tariff Act of
1930].” 19 U.S.C. § 1517(b)(4)(A)(i). On January 17, 2020, Commerce initiated a
scope inquiry. Certain Hardwood Plywood From the People’s Republic of China, 85
Fed. Reg. 3,024 (Dep’t Commerce Jan. 17, 2020) (notice of covered merch. Referral
and initiation of scope inquiry).
To resolve the covered merchandise referral from CBP, Commerce applied its
regulation governing the issuance of scope rulings. See Final Scope Ruling at 6–7.
That regulation recognizes that, because the descriptions of merchandise covered by
the scope of an antidumping or countervailing duty order must be written in general
terms, questions may arise as to whether a particular product is included within
Consol. Court No. 22-00049 Page 6
the scope of an order. See 19 C.F.R. § 351.225(a) (2020). 6 In order to resolve such
questions, including in the context of CBP covered merchandise referrals, Commerce
issues “scope rulings” that clarify whether the product is in-scope. See id.; Final Scope
Ruling at 6–7. Although there are no specific statutory provisions that govern
Commerce’s interpretation of the scope of an order, Commerce is guided by case law
and agency regulations. See Meridian Prods., LLC v. United States, 851 F.3d 1375,
1381 (Fed. Cir. 2017) (“Meridian 2017”); 19 C.F.R. § 351.225.
Commerce’s inquiry begins with the relevant scope language. See, e.g., OMG,
Inc. v. United States, 972 F.3d 1358, 1363 (Fed. Cir. 2020). If the scope language is
unambiguous, “the plain meaning of the language governs.” Id. Commerce further
interprets the scope “with the aid of” the sources set forth in 19 C.F.R. § 351.225(k)(1)
(referred to as a “(k)(1) analysis,” “(k)(1) sources,” or “(k)(1) materials”). Meridian 2017,
851 F.3d at 1382 (citation omitted). Subsection (k)(1) directs Commerce to consider the
descriptions of the subject merchandise in the petition, initial investigation, and prior
determinations by Commerce (including scope determinations) or the U.S. International
Trade Commission (“ITC”). 19 C.F.R. § 351.225(k)(1). If the (k)(1) sources are
dispositive, Commerce may issue its ruling based solely on the party’s application and
6Commerce recently revised its scope regulations; however, the revisions apply “to
scope inquiries for which a scope ruling application is filed . . . on or after the effective
date” of November 4, 2021. See Regs. To Improve Admin. and Enforcement of
Antidumping and Countervailing Duty Laws, 86 Fed. Reg. 52,300, 52,300, 52,327 (Dep’t
Commerce Sept. 20, 2021). Thus, the court cites to the prior scope regulations that
were in effect when Commerce initiated this scope inquiry. See Final Scope Ruling at 6
n.13.
Consol. Court No. 22-00049 Page 7
the (k)(1) sources. 19 C.F.R. § 351.225(d). 7 In all other cases, Commerce will initiate a
scope inquiry and may consider the factors enumerated in subsection (k)(2) of the
regulation. See Meridian 2017, 851 F.3d at 1382 (citing 19 C.F.R. § 351.225(k)(2)). 8
When Commerce “finds that a scope inquiry presents an issue of significant
difficulty, the [agency] will issue a preliminary scope ruling” and will allow time for initial
and rebuttal comments. 19 C.F.R. § 351.225(f)(3). Commerce issued its preliminary
scope ruling in this case on August 26, 2021. Prelim. Scope Ruling (Aug. 26, 2021), CR
128, PR 110, CJA Tab 2. After finding the scope ambiguous and consulting the (k)(1)
sources, Commerce preliminarily concluded that the Chinese two-ply panels are within
the scope of the Plywood Orders. Id. at 1. Commerce further determined that
hardwood plywood produced by Finewood in Vietnam using Chinese two-ply was not
substantially transformed in Vietnam and, thus, entered the United States as a product
of China. Id.
Commerce allowed interested parties to file comments on the preliminary scope
ruling. See Prelim. Scope Ruling at 31. Commerce subsequently rejected Finewood’s
initial comments based on the inclusion of untimely new factual information. See Letter
Re: [Finewood] Cmts. on the Prelim. Scope Ruling (Dec. 10. 2021) (“Commerce’s Dec.
7 To be dispositive, the (k)(1) factors “must be ‘controlling’ of the scope inquiry in the
sense that they definitively answer the scope question.” Sango Int’l L.P. v. United
States, 484 F.3d 1371, 1379 (Fed. Cir. 2007).
8 The (k)(2) factors include: “(i) The physical characteristics of the product; (ii) The
expectations of the ultimate purchasers; (iii) The ultimate use of the product; (iv) The
channels of trade in which the product is sold; and (v) The manner in which the
product is advertised and displayed.” 19 C.F.R. § 351.225(k)(2).
Consol. Court No. 22-00049 Page 8
10 Ltr.”), PR 136, CJA Tab 30. Finewood refiled its initial comments with those portions
omitted under protest. Resubmission of DH Respondents Cmts. on Prelim. Scope
Ruling (Dec. 14, 2021) at 3, Attach. (“Pls.’ Prelim. Scope Cmts.”), CR 134, PR 138, CJA
Tab 31.
Commerce rejected and did not retain on the record IGF’s initial comments
based on procedural errors and untimeliness. See Letter Re: [IGF’s] Cmts. on the
Prelim. Scope Ruling (Oct. 8, 2021), PR 126, CJA Tab 25; Attachments to Oct. 8, 2021
Letter (Oct. 13, 2021), PR 128–31, CJA Tab 27. Commerce rejected and removed from
the record IGF’s rebuttal comments based on the inclusion of untimely affirmative
argument. Letter Re: [IGF’s] Rebuttal Cmts. on the Prelim. Scope Ruling (Oct. 15,
2021), PR 134, CJA Tab 29.
On January 21, 2022, Commerce issued its affirmative Final Scope Ruling. Final
Scope Ruling at 1. On February 18, 2022, Plaintiffs filed a summons and complaint.
Summons, ECF No. 1; Compl. On March 17, 2022, the Coalition intervened. Order
(Mar. 17, 2022), ECF No. 20. On March 21, 2022, the court consolidated IGF’s action
under this lead case. Docket Entry, ECF No. 22. Following briefing on the merits, on
March 21, 2023, the court heard oral argument. Docket Entry, ECF No. 55; see also
Oral Arg. (recording on file with the court). 9
9 Subsequent citations to the oral argument reflect the timestamp from the recording.
Consol. Court No. 22-00049 Page 9
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516A(a)(2)(B)(vi) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(vi), and 28 U.S.C. § 1581(c). 10 The
court will uphold an agency determination that is supported by substantial evidence and
otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
“[W]hether the unambiguous terms of a scope control the inquiry, or whether
some ambiguity exists, is a question of law that [the court] review[s] de novo.” Meridian
2017, 851 F.3d at 1382. Whether a product is covered by the language of the scope is
“a question of fact reviewed for substantial evidence.” Id.; see also OMG, Inc., 972 F.3d
at 1363–64 (discussing the standard of review). “Commerce is entitled to substantial
deference with regard to its interpretations of its own antidumping duty orders.” King
Supply Co., LLC v. United States, 674 F.3d 1343, 1348 (Fed. Cir. 2012). Nevertheless,
“Commerce cannot ‘interpret’ an antidumping order so as to change the scope of th[e]
order, nor can Commerce interpret an order in a manner contrary to its terms.”
Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1072 (Fed. Cir. 2001) (citation
omitted).
10Plaintiffs also alleged jurisdiction pursuant to 28 U.S.C. § 1581(i) based on CBP’s
premature liquidation of the subject entries. Compl. ¶ 26. However, the Government
does not contest jurisdiction in this case pursuant to section 1581(c). Remote Teleconf.
(March 17, 2022) at 00:40–1:40 (time stamp from the recording, on file with the court).
Plaintiffs protested the liquidation of their entries, and CBP has suspended action on the
protests. Compl. ¶¶ 12, 16–17, 23; Compl. ¶¶ 13, 17, 23, InterGlobal Forest LLC v.
United States, Court No. 22-cv-00053 (Feb. 2, 2022), ECF No. 7.
Consol. Court No. 22-00049 Page 10
DISCUSSION
Plaintiffs and IGF challenge Commerce’s determination that the Chinese two-ply
panels imported into Vietnam are within the scope of the Plywood Orders. Because the
court finds that remand is required on that issue, the court does not reach parties’
arguments regarding substantial transformation. 11
I. Commerce’s Scope Interpretation
Commerce determined there was an ambiguity in the written scope description
requiring a (k)(1) analysis. Final Scope Ruling at 9–11. Plaintiffs and IGF challenge
Commerce’s finding of ambiguity and Commerce’s analysis of the (k)(1) sources to
include the Chinese two-ply panels within the scope of the Plywood Orders.
As previously stated, the scope of the Plywood Orders states:
The merchandise subject to this investigation is hardwood and decorative
plywood, and certain veneered panels as described below. For purposes
of this proceeding, hardwood and decorative plywood is defined as a
generally flat, multilayered plywood or other veneered panel, consisting of
two or more layers or plies of wood veneers and a core, with the face
and/or back veneer made of non-coniferous wood (hardwood) or bamboo.
Plywood AD Order, 83 Fed. Reg. at 512 (emphasis added). Upon review of this
language, Commerce found that the scope “cover[s] two general types of
merchandise”—hardwood and decorative plywood 12 and certain veneered panels—but
that the second scope sentence defines only hardwood plywood. Final Scope Ruling at
11 Parties agree that the court need not address Commerce’s substantial transformation
analysis if the court finds two-ply panels beyond the scope of the Plywood Orders. Pls.’
Mem. at 27–28; Oral Arg. 1:53:00–1:54:30.
12 For ease of reference, the court refers to “hardwood and decorative plywood” as
“hardwood plywood.”
Consol. Court No. 22-00049 Page 11
9; see also id. at 11. Commerce explained that a contrary interpretation of the second
sentence to describe certain veneered panels would render “the express inclusion of
‘certain veneered panels’ in the first sentence of the scope” superfluous. Id. at 11.
Commerce concluded that “the scope is ambiguous with regard to ‘certain veneered
panels,’” id. at 10 (footnote omitted), and thus, it is unclear “whether all in-scope
merchandise must be made of a minimum of three layers,” id. at 11.
With respect to the (k)(1) materials, Commerce first reviewed the final injury
investigation report prepared by the U.S. International Trade Commission (“ITC”) and
concluded that it provided no basis to exclude two-ply from the scope of the orders.
Final Scope Ruling at 12–14. 13 Commerce explained that investigation documents
provided to the ITC referenced “certain veneered panels”; the ITC found that the
domestic like product was coextensive with the scope; and the ITC did not expressly
exclude two-ply panels from its investigation. Id. at 13–14.
Next, Commerce considered language in the Petition and revisions to the scope
prior to initiation. Id. at 14. As part of the revisions, Commerce noted that the phrase
“veneer core platforms,” a term defined in the Petition to include two-ply, was removed
from the scope and the phrase “certain veneered panels” was added. Id. at 14–15.
Commerce explained that the record of the investigation fails to indicate the reason for
13 Relevant portions of the ITC’s report are reproduced in or appended to various record
filings. See, e.g., Final Scope Ruling at 13 & n.54 (citing two such filings). For ease of
reference, the complete citation is Hardwood Plywood from China, Inv. Nos. 701-TA-
565 and 731-TA-1341, Pub. 4747 (Dec. 2017) (final) (“ITC Report”).
Consol. Court No. 22-00049 Page 12
the change but maintained that the change was not intended to remove two-ply from the
scope. Id. at 15.
Commerce also explained that, in the preliminary scope memorandum filed in the
underlying investigation (“Preliminary Investigation Scope Memo”), the agency defined
“certain veneered panels” to mean “a veneer of hardwood which has been affixed to a
base (including the core) of inferior wood or a non-wood product.” Id. at 16 & n.81
(citing Rebuttal to Substantial Transformation Info. (May 4, 2021), Ex. 1 (Scope Cmts.
Decision Mem. for the Prelim. Determination (Apr. 17, 2017) (“Prelim. Inv. Scope
Mem.”)) at Cmt. 4, CR 126, PR 102, CJA Tab 21). Commerce further explained that an
example of a three-ply panel provided by the Coalition and referenced in the Preliminary
Investigation Scope Memo described a hardwood plywood product, not a veneered
panel. Id. at 19 & n.99 (citing, inter alia, Prelim. Inv. Scope Mem. at Cmt. 4).
Commerce stated that its “current understanding of the phrase ‘veneered panels’ means
‘a veneer of hardwood affixed to a base, usually of inferior wood, by gluing under
pressure, in accordance with the explanatory notes of the [Harmonized Tariff Schedule
(“HTS”)].’” Id. at 17 & n.85 (citing Prelim. Scope Ruling at 14).
Commerce also addressed Finewood’s argument that the product characteristics
memorandum from the investigation (“Product Characteristics Memo”) supported its
view that Commerce did not intend to capture two-ply in the scope. Id. at 19.
Commerce explained that the Product Characteristics Memo “did not instruct
respondents not to report two-ply panels.” Id. at 19 (emphasis added). Commerce
went on to explain that the Product Characteristics Memo “directed respondents to
Consol. Court No. 22-00049 Page 13
report the number of plies of the product, with the option to create their own two-digit
codes (e.g., respondents could have reported ‘02’ for a two-ply product) for any product
with a number of plies not listed.” Id. at 19 & n.100 (citing Finewood Sur-Rebuttal to
Pet’r’s May 4, 2021 Rebuttal Cmts. (May 13, 2021), Ex. SR-2 (“Prod. Characteristics
Mem.”), CR 127, PR 107, CJA Tab 22). Commerce further explained that “the number
of plies was not a physical characteristic used to define the reported products (also
known as control numbers or ‘CONNUMs’); instead, it was merely an ‘additional product
characteristic’ not included in the CONNUM.” Id. at 19 & n.101 (citing Prod.
Characteristics Mem.).
A. Parties’ Contentions
Plaintiffs contend that Commerce erred in finding the scope ambiguous with
respect to the phrase “certain veneered panels” because the scope explicitly states that
such products are “described below.” Pls.’ Mem. at 11. They are, Plaintiffs contend,
because the second scope sentence uses the phrase “other veneered panel.” Id. at 12
(emphasis omitted). Plaintiffs assert that instead of clarifying the scope, Commerce has
impermissibly expanded it. Pls.’ Reply at 1–4; see also Consol. Pl.’s Mem. at 14, 17
(advancing similar arguments). Plaintiffs further contend that record evidence
undermines Commerce’s (k)(1) analysis. Pls.’ Mem. at 14–24; Pls.’ Reply at 4–14; see
also Consol. Pl.’s Mem. at 17–19.
The Government urges the court to sustain Commerce’s ambiguity finding
based on the lack of any explicit definition of “certain veneered panels.” Def.’s Resp. at
12. Regarding Commerce’s (k)(1) analysis, the Government contends that Plaintiffs
Consol. Court No. 22-00049 Page 14
merely invite the court to reweigh the evidence and that Commerce’s findings should be
sustained. Id. at 16–20.
The Coalition contends that Commerce met the “low threshold” applicable to
ambiguity findings. Def.-Int.’s Resp. at 9–10 (discussing Laminated Woven Sacks
Comm. v. United States, 34 CIT 906, 914, 716 F. Supp. 2d 1316, 1325 (2010)). 14 In
addition to supporting the Government’s arguments, see id. at 12, the Coalition further
contends that the (k)(1) materials reflect their intent to include two-ply in the scope of
the Plywood Orders, id. at 13–17.
B. Together, the Scope Language and the (k)(1) Sources Confirm the
Unambiguous Scope of the Plywood Orders
Further background on the nature of the court’s review of Commerce’s scope
ruling is helpful to the analysis. In this case, Commerce characterized the existence of
ambiguity in the scope language as “a condition precedent” for Commerce to consider
the (k)(1) sources—effectively finding what some have inferred to be a “(k)(0)” step built
into the agency’s scope analysis (i.e., prior to (k)(1) and (k)(2)). Final Scope Ruling at
11 n.45 (citing, inter alia, Meridian 2017, 851 F.3d at 1381). Commerce’s approach
finds some support in the case law, see, e.g., OMG, 972 F.3d at 1363, but, elsewhere,
14The Coalition argues that the phrase “as described below” following “certain veneered
panels” could instead be interpreted to refer to the “14 additional paragraphs following
the first paragraph, all of which provide information regarding the covered
merchandise.” Def.-Int.’s Resp. at 11. However, like the second scope sentence,
subsequent scope paragraphs describing what is included in the scope are prefaced
with the phrase “hardwood plywood.” The Coalition’s argument that subsequent scope
paragraphs may describe certain veneered panels is entirely inconsistent with its
position that the second scope sentence does not describe certain veneered panels.
Consol. Court No. 22-00049 Page 15
courts have acknowledged that Commerce’s review of the scope language is
inseparable from consideration of the (k)(1) sources, see, e.g., Meridian Prods. v.
United States, 890 F.3d 1272, 1277 (Fed. Cir. 2018) (“Meridian 2018”) (stating that “the
plain language of an antidumping order is ‘paramount,’” but that “[i]n reviewing the plain
language of a duty order, Commerce must consider [the (k)(1) sources]”) (citation
omitted); Shenyang Yuanda Aluminum Indus. Eng’g Co. v. United States, 776 F.3d
1351, 1354 (Fed. Cir. 2015) (describing “a two-step process” in which “Commerce must
[first] consider the scope language contained in the order itself, the descriptions
contained in the petition, and how the scope was defined in the investigation and in the
determinations issued by Commerce and the ITC”); ArcelorMittal Stainless Belg. N.V. v.
United States, 694 F.3d 82, 87 (Fed. Cir. 2012) (“[T]he first step in a scope ruling
proceeding is to determine whether the governing language is in fact ambiguous, and
thus requires analysis of the regulatory factors [i.e., the (k)(1) sources] previously
outlined. If it is not ambiguous, the plain meaning of the language governs.”).
Despite what some might consider to be conflicting indications, the above-
referenced case law simply suggests there is no bright line, that Commerce’s scope
analysis (and the court’s corresponding review of that analysis) is “highly fact-intensive
and case-specific.” King Supply, 674 F.3d at 1345. Thus, in some cases, an order’s
scope, by itself, may be sufficiently plain in relationship to a particular product that no
Consol. Court No. 22-00049 Page 16
resort to the (k)(1) sources is necessary. 15 In other cases, however, it may be
necessary to consider the (k)(1) sources to confirm that the scope language plainly
speaks to the inclusion or exclusion of a particular product. See, e.g., Meridian 2017,
851 F.3d at 1383–84 (reviewing the scope language and finding that Commerce’s
interpretation of such language was supported by earlier scope rulings) (citation
omitted); ArcelorMittal, 694 F.3d at 89–90 (finding a scope unambiguous “when read in
light of industry practice” and “Commerce’s previous [scope] decision”).
Whether resort to the (k)(1) sources is necessary to interpret the scope of an
order, the court reviews Commerce’s ambiguity determination de novo. See Meridian
Prods. 2017, 851 F.3d at 1382. Thus, when the court finds that a scope is
unambiguous, Commerce may not deviate from the court’s holding in that regard. See
ArcelorMittal, 694 F.3d at 90 (stating the plain meaning of the scope language in terms
of the court’s holding). This case falls into the scenario in which the scope language,
when read together with (k)(1) sources, unambiguously establishes that the Plywood
Orders do not include Chinese two-ply panels.
Commerce rested its determination that the phrase “certain veneered panels”
was ambiguous on the agency’s view that the second scope sentence (and, thus, the
15 In a similar vein, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”)
has recognized that CBP effectively applies the scope language as it determines, “for
every imported product, whether the product falls within the scope of an antidumping or
countervailing duty order.” Sunpreme Inc. v. United States, 946 F.3d 1300, 1320 (Fed.
Cir. 2020) (en banc). In recognizing CBP’s authority to do so when an order is
ambiguous, the Federal Circuit also recognized that CBP makes such determinations
when “order[s] [are] clear and unambiguous.” Id. at 1318. Similarly, Commerce may
find an order unambiguous such that any further scope inquiry is unnecessary.
Consol. Court No. 22-00049 Page 17
remainder of the scope) defined only hardwood plywood. Final Scope Ruling at 9.
From the outset, Commerce’s interpretation of the scope to include two “distinct and
separate” products, 16 only one of which is described, is problematic in light of applicable
statutory provisions and Commerce’s regulation. Sections 1671e(a)(2) and 1673e(a)(2)
require Commerce to include in antidumping and countervailing duty orders “a
description of the subject merchandise.” 19 U.S.C. §§ 1671e(a)(2), 1673e(a)(2). While
that description need only contain “such detail as the [agency] deems necessary,” id.,
Commerce’s regulation presupposes at least a “general” description of the subject
merchandise, 19 C.F.R. § 351.225(a). 17 These provisions serve to implement “the
primary purpose” of any unfair trade order, which “is to place foreign exporters on notice
of what merchandise is subject to duties.” OMG, 972 F.3d at 1364 (quoting
ArcelorMittal, 694 F.3d at 88). 18 Commerce not only failed to address the
16 Commerce described hardwood plywood and certain veneered panels as “distinct
and separate” products in its (k)(1) analysis. Final Scope Ruling at 13.
17 For this reason, cases cited by the Coalition involving ambiguities in general scope
descriptions are inapposite. See Def.-Int.’s Resp. at 9. In Laminated Woven Sacks, for
example, the court sustained Commerce’s clarification of general scope language
covering subject merchandise “printed with three colors or more in register” to mean the
number of inks used in printing and not the number of colors visible on the
merchandise. 34 CIT at 913–15, 716 F. Supp. 2d at 1325–26. Here, however,
Commerce claimed that the ambiguity was related to the absence of any description of
certain veneered panels and sought to describe such merchandise in the first instance
in a scope ruling. See Final Scope Ruling at 11.
18 Commerce acknowledged the “fundamental principle that merchandise subject to an
order must be the type of merchandise described in the order and from the particular
country covered by the order,” Prelim. Scope Ruling at 11 (emphasis added), but then
failed to recognize the incongruity of its position that the Plywood Orders nowhere
describe “certain veneered panels,” see id. (stating that “the scope does not define
‘certain veneered panels,’” or provide examples thereof).
Consol. Court No. 22-00049 Page 18
consequences of its ambiguity determination in the context of these important
considerations but took an interpretive approach which was at odds with them.
Commerce supported its determination that the second sentence of the scope
defined only hardwood plywood by claiming that if that sentence “were intended to also
define ‘certain veneered panels,’ the express inclusion of ‘certain veneered panels’ in
the first sentence of the scope . . . would be unnecessary.” Final Scope Ruling at 11.
Accepting Commerce’s position, however, would render the phrase “as described
below” in the first sentence superfluous because certain veneered panels would not be
described below. The Government’s suggestion that “as described below” applies to
hardwood plywood, Oral Arg. 05:45–06:55, does not remedy this problem because
subsequent scope descriptions are prefaced with an identifying phrase such that this
forecast of a description is unnecessary. Thus, Commerce’s sole basis for finding that
the second scope sentence does not describe certain veneered panels is unpersuasive.
Plaintiffs, on the other hand, read the first scope sentence as prefatory—
introducing the products covered by the scope—while the second scope sentence
serves to define the totality of the products, “[f]or purposes of this proceeding,” as
plywood or other veneered panels with coextensive definitions under the umbrella term
of hardwood plywood. Pls.’ Mem. at 11–12; see also Pls.’ Reply at 1–2. The comma
placement after “plywood” in the first scope sentence supports reading the phrase “and
certain veneered panels as described below” to consist of a single independent clause
such that the certain veneered panels are the “other veneered panel[s]” that Commerce
“described below.” See Plywood AD Order, 83 Fed. Reg. at 512. However, it is not
Consol. Court No. 22-00049 Page 19
necessary to resolve this matter based on the scope language alone because the (k)(1)
sources establish the unambiguous meaning and show that Plaintiffs’ interpretation
aligns with Commerce’s intent at the time the agency issued the Plywood Orders.
Before turning to the (k)(1) sources, one additional point bears mentioning.
During oral argument, the Coalition asserted that finding the second scope sentence
unambiguously applicable to certain veneered panels does not end the inquiry. Oral
Arg. 1:54:30–2:01:10. According to the Coalition, the second scope sentence should
also be interpreted to describe a two-ply—not a three-ply—minimum requirement. 19 Id.
However, the Coalition presented this argument to Commerce during the scope inquiry,
see Final Scope Ruling at 10 (summarizing the Coalition’s arguments), 20 and
19 Commerce looked to the (k)(1) sources for guidance on whether “veneered panels”
may constitute “two-ply panels,” and resolved that question in the affirmative. Prelim.
Scope Ruling at 13; Final Scope Ruling at 11. Commerce’s singular focus on the
minimum ply requirement is problematic insofar as it ignores that all other
characteristics of certain veneered panels would remain undefined because—according
to Commerce—the scope describes only hardwood plywood. Commerce’s approach
thus leaves open the possibility of piecemeal scope rulings (and litigation) concerning
other aspects of subject veneered panels, including, for example, core composition (if
any), surface coatings, and dimension. See Plywood AD Order, 83 Fed. Reg. at 512.
20 The Coalition argued that the second scope sentence “is more reasonably read” to
define hardwood plywood as “consist[ing] of two or more layers or plies of: (1) wood
veneer; and (2) a core.” Final Scope Ruling at 10. The Coalition’s argument is,
however, premised on the omission of the plural form of “wood veneers” that Commerce
used in the scope along with the singular “core.” See Plywood AD Order, 83 Fed. Reg.
at 512 (referring to “two or more layers or plies of wood veneers and a core”) (emphasis
added). The argument is further undermined by the Coalition’s clear statement in its
petition underlying the original investigation that “[h]ardwood plywood is comprised of a
core sandwiched between two veneers,” clearly describing a three-ply product.
Finewood Suppl. Questionnaire Resp. – Part IV and Info. on Substantial Transformation
(Apr. 20, 2021) (“Finewood Suppl. Resp.”), Ex. SQ1-25 (“Petition”) at 7, CR 117–23, PR
91–92, CJA Tab 18.
Consol. Court No. 22-00049 Page 20
Commerce impliedly rejected this interpretation. Commerce’s statement that, “without a
clear definition of certain veneered panels . . . it is unclear whether all in-scope
merchandise must be made of a minimum of three layers,” id. at 11 (emphasis added),
indicates Commerce’s understanding that at least some in-scope merchandise “must be
made of a minimum of three layers.” 21 If Commerce had agreed with the Coalition that
the second scope sentence encompassed two-ply panels, Commerce’s review of the
(k)(1) sources for a definition of certain veneered panels would have been unnecessary
because there would be no distinction between the two types of subject merchandise.
But cf. Final Scope Ruling at 13. Thus, to the extent the Coalition intended to suggest
that Commerce must further address the meaning of the second scope sentence if the
court finds that “certain veneered panels” are described in that sentence, the court
disagrees that any further consideration by Commerce is necessary.
As discussed below, the (k)(1) sources show both that Commerce intended to
include subject merchandise with a minimum of three plies in the scope of the
investigations and that Commerce only intended to include such merchandise—in other
words, that the second scope sentence applies to all subject merchandise and that the
second scope sentence unambiguously covers products of three or more plies.
21Further in, Commerce referred to a product containing face and back veneers and a
core as a hardwood plywood product “as described in the scope definition of hardwood
plywood.” Final Scope Ruling at 19.
Consol. Court No. 22-00049 Page 21
1. Revisions to the Proposed Scope Language Prior to Initiation
Commerce’s review of the Coalition’s revisions to the proposed scope language
prior to initiation of the investigations were cited in the agency’s conclusion that certain
veneered panels include two-ply panels. Final Scope Ruling at 15. Commerce’s
explanation is, however, circular, and unsupported by the record.
Revisions to the proposed scope of the investigations prior to initiation show that
the Coalition added the phrase “certain veneered panels” to the first scope sentence
when it added “other veneered panel[s]” to the second scope sentence. See Finewood
Suppl. Resp., Ex. SQ1-26 (containing Exhibit 1 to the Coalition’s Dec. 6, 2016, letter to
Commerce revising the proposed scope (“Revised Proposed Scope”)). Prior to the
revisions, the proposed scope language stated, in relevant part:
The merchandise subject to this investigation is hardwood and decorative
plywood. Hardwood and decorative plywood is a flat panel composed of
an assembly of two or more layers or plies of wood veneers in
combination with a core. The veneers, along with the core, are glued or
otherwise bonded together to form a finished product. . . . For products
that are entirely composed of veneer, such as Veneer Core Platforms, the
exposed veneers are to be considered the face and back veneers . . . .
Petition at 4–5. Later in the Petition, though not in the section containing the proposed
scope language, the Coalition explained that “[v]eneer core ‘platforms’ are included in
the definition of subject merchandise” and that veneer core platforms are “defined as
two or more wood veneers that form the core of an otherwise completed hardwood
plywood product.” Id. at 7.
The Coalition’s revised proposed scope language included “certain veneered
panels” and removed all references to “veneer core platforms.” Compare Revised
Consol. Court No. 22-00049 Page 22
Proposed Scope at 1, with, e.g., Plywood AD Order, 83 Fed. Reg. at 512; see also Pls.’
Mem. at 15–16 (summarizing the changes). While Commerce did not address the fact
that the Coalition added “certain veneered panels” to the proposed scope language at
the same time it added “other veneered panel[s],” to the court it appears anomalous for
Commerce to have accepted those additions but now disclaim any relationship between
the nearly identical terms. See Final Scope Ruling at 15. Instead, Commerce focused
on the Petition’s definition of the deleted term “veneer core platforms” to include a two-
ply panel. See id. at 15 & n.70 (citing, inter alia, Petition at 7). Commerce went on to
accept the Coalition’s position that the proposed scope language therefore covered two-
ply panels. See id. at 15 (stating that, “[a]s the petitioner notes, ‘the removal of the
phrase veneer core platforms did not change the scope to remove two-ply panels’”).
Commerce believed this fact to be “confirmed” by the addition of the reference to
“certain veneered panels” and Commerce’s decision, discussed in more detail below, to
retain the phrase “certain veneered panels” in the scope over requests to delete the
term. Id.
While the Petition “may provide valuable guidance as to the interpretation of the
final order,” the Petition “cannot substitute for language in the order itself.” Duferco
Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002); see also id. at 1096–
98 (invalidating a scope ruling in which Commerce relied on language in a petition that
did not appear in the final order). Commerce’s explanation rests on finding an
equivalence between veneer core platforms and certain veneered panels. See Final
Scope Ruling at 15. However, as Commerce stated, “the record of this proceeding
Consol. Court No. 22-00049 Page 23
contains no information relating to why the reference to veneer core platforms was
removed from the scope and certain veneered panels was added.” Id. (emphasis
added). Thus, Commerce’s explanation has no basis in the record and the Petition’s
references to veneer core platforms are of little, if any, value.
Moreover, Commerce’s assumption that the original scope language proposed in
the Petition covered two-ply panels is unsupported. While the Coalition provided a
definition of veneer core platforms that included two-ply panels, see Petition at 7, the
actual scope language proposed by the Coalition specified products consisting of “two
or more layers or plies of wood veneers in combination with a core,” id. at 4 (further
stating that “[t]he veneers” (plural) are “glued or otherwise bonded” to “the core”). Thus,
while the Coalition may have defined veneer core platforms generally to consist of at
least two plies, the proposed scope language did not expressly include two-ply veneer
core platforms themselves and, instead, the scope appeared to require at least three
plies. See id. 22
22 The change from “veneers in combination with a core” to “veneers and a core” is
immaterial. While the hardwood plywood investigation was ongoing, Commerce issued
an interpretive note in the antidumping and countervailing duty proceedings concerning
multilayered wood flooring (“MLWF”) from China clarifying that the phrase “two or more
layers or plies of wood veneer(s) in combination with a core” means “wood flooring
products with a minimum of three layers.” Multilayered Wood Flooring From the
People’s Republic of China, 82 Fed. Reg. 27,799, 27,800 n.11 (Dep’t Commerce June
19, 2017) (final clarification of the scope of the antidumping and countervailing duty
orders); see also Final Scope Ruling at 24 & n.133 (citing an earlier yet substantively
identical clarification of the MLWF orders). Thus, the original scope language proposed
by the Coalition in the Petition, which incorporated the same language, reasonably must
be read to require a minimum of three plies. By their own terms, subsequent revisions
to the proposed scope language by the Coalition were intended to clarify—not change—
Consol. Court No. 22-00049 Page 24
2. Commerce’s Preliminary Investigation Scope Memo
As indicated above, in the Final Scope Ruling, Commerce also referenced its
decision during the investigations not to remove the reference to certain veneered
panels from the scope language. Final Scope Ruling at 15. By way of further
background, following initiation of the investigations, an interested party submitted
comments on the proposed scope language. Prelim. Inv. Scope Mem. at Cmt. 4. That
interested party argued that the phrase “‘certain veneered panels’ should be removed”
based on possible “confusion on covered products” given the lack of any “specific
description of the physical characteristics or uses that define ‘certain veneered panels’
as distinct from the specifically defined ‘hardwood and decorative plywood.’” Id.According to Commerce, the Coalition responded as follows:
Petitioners argue that the reference to “veneered panels” was included
because the term “veneered panels” is a term used in the HTSUS and by
the World Customs Organization (the WCO). Petitioners state that the
WCO defines plywood as being “three or more sheets of wood glued and
pressed one on the other and generally disposed so that the grains of
successive layers are at an angle.” Petitioners state that [the] WCO
defines a veneered panel, on the other hand, as a veneer of wood (in this
case a hardwood) which has been affixed to a base (including the core) of
inferior wood or a non-wood product. Petitioners state that an example of
a veneered panel could be a three-ply hardwood panel with oak front and
rear faces and with a core of particle board or a core of medium-density
fiberboard (MDF).
the scope of the investigations. See Revised Proposed Scope at 1–2; cf. Def.-Int.’s
Resp. at 13 (in reference to the revisions, stating that “[t]he Coalition did not state that it
was modifying the universe of merchandise covered nor does anything on the record
indicate that this was the Coalition’s intent”).
Consol. Court No. 22-00049 Page 25
Id. (footnotes omitted). Based on this response, Commerce retained certain veneered
panels in the scope and expressly determined that “this phrase means, in the context of
this investigation, a veneer of hardwood which has been affixed to a base (including the
core) of inferior wood or a non-wood product.” Id.Commerce’s discussion of this information from the investigation in the Final
Scope Ruling suffers from several flaws. First, Commerce’s attempt to dismiss the
Coalition’s earlier example of a three-ply panel as “a hardwood plywood product, rather
than a veneered panel,” Final Scope Ruling at 19, is unsupported by both the text and
context of the Preliminary Investigation Scope Memo. Indeed, the Government does
not defend this finding. See Def.’s Resp. at 14–17. The Coalition explicitly
characterized the example as “a veneered panel”; the example followed the Coalition’s
explanation of the WCO’s definition of a veneered panel; and the entire discussion was
intended to justify why Commerce should retain certain veneered panels in the scope.
See Prelim. Inv. Scope Mem. at Cmt. 4.
Additionally, in the Final Scope Ruling, Commerce clearly altered its definition of
certain veneered panels without explaining the basis for the changes or why the
changes should not be considered an impermissible enlargement of the scope.
Commerce explained that its altered “definition is generally consistent with the
definition” used “in the explanatory notes of the HTS.” Final Scope Ruling at 16. While
that may be true, Commerce failed to explain why its “current understanding” of certain
Consol. Court No. 22-00049 Page 26
veneered panels, id. at 17, comports with Commerce’s understanding of the phrase
during the investigation. 23
In fact, Commerce’s definition of certain veneered panels in the investigation
appears to reconcile the scope language with the WCO’s definition of relevant terms.
The WCO defines “veneered panels” as “a thin veneer of wood affixed to a base,
usually of inferior wood, by glueing [sic] under pressure.” Finewood Suppl. Resp., Ex.
SQ1-50. The WCO defines plywood as “three or more sheets of wood glued and
pressed one on the other and generally disposed so that grains of successive layers are
at an angle.” Id. Commerce’s scope, which provides for a core layer consisting of “a
range of materials, including but not limited to hardwood, softwood, particleboard, or
medium-density fiberboard,” Plywood AD Order, 83 Fed. Reg. at 512, is inconsistent
with the WCO’s definition insofar as hardwood plywood defined by Commerce in the
scope may contain a non-wood core. Any such inconsistency is remedied, however, by
the inclusion of “certain veneered panels” when such products are generally understood
to have a core of an inferior wood or non-wood layer, see Finewood Suppl. Resp., Ex.
SQ-50, and by Commerce’s use of limiting language defining hardwood plywood solely
“[f]or purposes of this proceeding,” Plywood AD Order, 83 Fed. Reg. at 512.
23 At oral argument, the Government explained that Commerce considered the meaning
of the phrase certain veneered panels “more extensively” in the context of the scope
inquiry than it apparently had during the investigation. Oral Arg. 21:07–22:30.
Regardless, counsel’s explanation does not, however, operate to tie Commerce’s
current understanding of the phrase to the Commerce’s intent when it issued the
Plywood Orders.
Consol. Court No. 22-00049 Page 27
3. Commerce’s Product Characteristics Memo
Commerce maintained that the Product Characteristics Memo from the
investigation supported the finding that certain veneered panels “include products
composed of two or more plies.” Final Scope Ruling at 19. It does not. Taken as a
whole, Commerce’s Product Characteristics Memo substantiates an intent to include
three-ply—and only three-ply—in the scope of the investigations.
In the Product Characteristics Memo, Commerce required respondents to report
a face veneer (fields 3.1 through 3.3); a back veneer (fields 3.4 through 3.5); and a core
(field 3.6). Prod. Characteristics Mem. at 1–5. Commerce considered these
characteristics necessary for CONNUM 24 purposes. See id. at 1. In field 3.6,
Commerce used the “other” option to instruct respondents to report “core layer[s] . . .
made of multiple materials,” but did not instruct respondents to use this option to report
the absence of a core layer. Id. at 5. In contrast, Commerce used the code “00” for “No
Surface Coating” in field 3.10 and “None” for “Minor Processing” in field 3.11, reserving
“Other” for reporting existent, but unspecified, information. Id. at 7–8. The Product
Characteristics Memo therefore indicates that Commerce did not contemplate
respondents reporting the absence of a core layer, as would be the case for two-ply
panels.
24 CONNUM refers to “control number,” which is a number designed to reflect the
“hierarchy of certain characteristics used to sort subject merchandise into groups” and
allow Commerce to match identical and similar products across markets. Bohler Bleche
GmbH & Co. KG v. United States, 42 CIT __, __, 324 F. Supp. 3d 1344, 1347 (2018).
Consol. Court No. 22-00049 Page 28
For the number of plies, Commerce instructed respondents to report anywhere
from three to 10 or more plies. Id. at 9. Commerce’s assertion in the Final Scope
Ruling that the Product Characteristics Memo contained “the option [for respondents] to
create their own two-digit code” for an unlisted number of plies, such as “02” for two
plies, is unsupported by the record. Final Scope Ruling at 19. The Product
Characteristics Memo listed codes for products with three to ten plies and contemplated
the creation of codes for “10-n” plies, i.e., more than 10 plies, but not for less than three
plies. Prod. Characteristics Mem. at 9. Commerce’s explanation again fails to account
for Commerce’s approach in other fields, which included “less than” options when
necessary. See id. at 3, 6, 8. While “the number of plies was not a physical
characteristic used to define the reported products,” Final Scope Ruling at 19,
Commerce offers no explanation for the lack of an explicit option to report two plies if, in
fact, as Commerce now contends, two-ply panels were always considered to be in-
scope.
4. The ITC Report
Lastly, the ITC Report indicates that the ITC understood the subject merchandise
to include three-ply products generally referenced as hardwood plywood. The ITC
Report stated:
In our preliminary determinations, we defined a single domestic like
product, coextensive with the scope of these investigations. We found
that all hardwood plywood consisted of two or more layers of wood veneer
glued to a core and was used in a range of interior applications.
***
Consol. Court No. 22-00049 Page 29
Information in the final phase of these investigations about the
characteristics of hardwood plywood is the same as that in the preliminary
phase. Accordingly, we again define a single domestic like product
corresponding to the scope.
Pls.’ Prelim. Scope Cmts. at 8–9 (quoting ITC Report at 9–10). 25 The ITC Staff Report
also described U.S. producers’ hardwood plywood production to include the pressing of
face and back veneers to a core. See Resp. to the Dep’t’s Request for Add’l Info. (Apr.
20, 2021), Ex. 2, PR 94, CJA Tab 19 (reproducing ITC Report at I-16).
Commerce dismissed Finewood’s arguments concerning the ITC’s three-ply
definition of hardwood plywood as “irrelevant” based on its theory that certain veneered
panels and hardwood plywood “are distinct and separate” products. See Final Scope
Ruling 13. Commerce also deemed it insignificant that the ITC Report contained no
references to two-ply panels. See id. Commerce explained that the scope description
provided to the ITC referenced “certain veneered panels” and the ITC found the
25While Commerce maintained that it cited only to portions of the ITC Report that
parties had placed on the record, see Final Scope Ruling at 12–13, Commerce later
acknowledged that no party placed page 9 of the ITC Report on the record, see Confid.
Def.’s Post-Arg. Submission at 1, ECF No. 56. Nevertheless, Commerce cited to page
9 of the ITC Report to support its preliminary ruling, see Prelim. Scope Ruling at 21 &
n.122; Commerce did not reject Finewood’s subsequent citations to that page or any
other page of the ITC Report, see Commerce’s Dec. 10 Ltr. at 2; and, in the Final Scope
Ruling, Commerce reiterated the ITC’s finding of a single like product coextensive with
the scope of the investigations, see Final Scope Ruling at 13 & n.57 (citing Pls.’ Prelim.
Scope Cmts. at 8–9, in turn citing ITC Report at 9–10). It is therefore clear that
Commerce considered at least this additional portion of the ITC Report that was
apparently never placed on the record. The court will therefore direct Commerce to
correct the administrative record such that it includes “all information presented to or
obtained by the [agency]” pursuant to 19 U.S.C. § 1516a(b)(2)(A)(i) and CIT Rule
73.2(a)(1) or explain why correction is inappropriate.
Consol. Court No. 22-00049 Page 30
domestic like product to be coextensive with the scope. Id. Commerce also stated that
the ITC did not expressly exclude two-ply panels from its investigation. Id. at 13–14.
The lack of an express exclusion is beside the point. The purpose of a scope
ruling is, first and foremost, to ascertain whether the scope can “reasonably be
interpreted to include” the contested merchandise. Duferco, 296 F.3d at 1905. Thus,
“Commerce cannot find authority in an order based on the theory that the order does
not deny authority” to include two-ply as a result of an express exclusion. Id. at 1096.
With respect to whether the ITC Report supports including two-ply in the scope,
Commerce’s reasoning is entirely circular. The issue is not whether the ITC referenced
“certain veneered panels” in the report but whether the ITC understood the phrase to
mean, and thus clearly investigated, two-ply panels. See Pls.’ Mem. at 21–22.
Commerce points to no affirmative record evidence that the ITC did so. In the absence
of any such affirmative evidence, either of inclusion or exclusion of two-ply panels, the
court finds that the ITC Report is inapposite to whether two-ply panels were included in
the scope of its injury investigation. 26
26The Coalition’s argument that the ITC’s definition of the domestic like product should
not be read to include the universe of covered products is not persuasive. Def.-Int.’s
Resp. at 16–17 (asserting that the ITC only referenced “gluing” when the scope
provides that subject merchandise “may be glued or otherwise bonded together”). The
ITC acknowledged that hardwood plywood products may be differentiated by, among
other things, “the type of adhesive used in the manufacturing process.” Pls.’ Prelim.
Scope Cmts. at 27 (quoting ITC Report at I-14).
Consol. Court No. 22-00049 Page 31
5. Summary and Conclusion
When read in light of the (k)(1) sources, it is clear that the scope of the Plywood
Orders unambiguously covers hardwood plywood and certain veneered panels that, for
purposes of the underlying proceeding, and from the second scope sentence onward,
are collectively described as hardwood plywood “consisting of two or more layers or
plies of wood veneers and a core,” i.e., at least three plies. Commerce’s Final Scope
Ruling is therefore not in accordance with the law and will be remanded for Commerce
to issue a ruling consistent with this opinion.
II. Commerce’s Rejection of Finewood’s Citations to (k)(1) Sources
Commerce rejected portions of Finewood’s comments on the preliminary scope
ruling. Commerce’s Dec. 10 Ltr. Commerce took issue with Finewood’s references to
sections of the Coalition’s scope comments from the investigation that were not
previously included in the factual submissions. Id. at 2.
A. Parties’ Contentions
Plaintiffs contend that “Commerce must consider [the Coalition’s] submissions
during the initial . . . investigation regardless of whether any party put portions of the
investigation materials on the record of the scope inquiry.” Pls.’ Mem. at 25; see also
Pls.’ Reply at 12–13. 27 Plaintiffs base their argument on language in the regulation
27Plaintiffs’ argument appears to be two-fold: 1) that Commerce unlawfully rejected
Finewood’s citations to the Coalition’s scope comments, and 2) that Commerce was
required to consider the complete ITC Report regardless of whether the ITC Report was
placed on the record in its entirety. See Pls.’ Mem. at 24–25; Oral Arg. 1:06:00–
1:07:05. Because Commerce did not take any adverse action with respect to
Consol. Court No. 22-00049 Page 32
stating that Commerce “will take into account” the (k)(1) sources, Pls.’ Mem. at 25
(quoting 19 C.F.R. § 351.225(k)(1)), and on case law they assert supports their position,
id. at 26 (citing Meridian 2018, 890 F.3d at 1272; TMB 440AE, Inc. v. United States, 43
CIT __, 399 F. Supp. 3d 1314 (2019); Saha Thai Steel Pipe Pub. Co. v. United States,
45 CIT __, 547 F. Supp. 3d 1278 (2021)). Plaintiffs contend that the (k)(1) sources
constitute “legal authority that Commerce must consult.” Id. at 27.
The Government argues that Commerce was within its discretion to reject the
untimely new factual information. Def.’s Resp. at 31–33. The Coalition contends that
Plaintiffs’ cited cases are inapposite. Def.-Int.’s Resp. at 29–30.
B. The Court Will Sustain Commerce’s Determination
At issue is the following language from Commerce’s scope regulation: “in
considering whether a particular product is included within the scope of an order or a
suspended investigation, [Commerce] will take into account the following [sources.]” 19
C.F.R. § 351.225(k)(1) (emphasis added). A review of the surrounding provisions and
other relevant regulations, along with case law, supports Commerce’s characterization
of the (k)(1) sources as factual information and application of corresponding deadlines.
Subsection (c) of 19 C.F.R. § 351.225 explains the process for parties to apply
for a scope ruling. That provision states that a party applying for a scope ruling must
include “[a]ny factual information supporting this position, including excerpts from
Finewood’s extra-record citations to the ITC Report and Plaintiffs do not point to any
specific parts of the ITC Report that Commerce failed to address, the court leaves open
the question whether the ITC Report, which is a public document, should be treated
differently from other (k)(1) sources.
Consol. Court No. 22-00049 Page 33
portions of [Commerce’s] or the Commission’s investigation, and relevant prior scope
rulings.” 19 C.F.R. § 351.225(c)(ii)(C) (emphases added). These sources, which
Commerce identifies as factual information, encompass those listed in subsection (k)(1).
See id. § 351.225(c)(ii)(C), (k)(1). Additionally, 19 C.F.R. § 351.102(21) defines
“[f]actual information” broadly as “[e]vidence.” The (k)(1) sources are considered
evidence of Commerce’s understanding of the scope of its order at the time it issued the
order. See, e.g., Fedmet Res. Corp. v. United States, 755 F.3d 912, 921 (Fed. Cir.
2014) (stating that “(k)(1) sources are afforded primacy in the scope analysis . . .
because interpretation of the language used in the orders must be based on the
meaning given to that language during the underlying investigations”).
Plaintiffs’ reliance on Commerce’s use of the term “will” in the regulation is not
persuasive of a different interpretation. See Pls.’ Mem. at 25. While terms such as
“will” or “shall” often “convey a command rather than a discretionary choice,” Ad Hoc
Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, 16 CIT
1008, 1012, 808 F. Supp. 841, 845 (1992), courts have recognized that, when used
“against the government, the word ‘shall,’ when used in statutes, is to be construed as
‘may,’ unless a contrary intention is manifest,” id. (quoting Barnhart v. United States, 5
CIT 201, 203, 563 F. Supp. 1387, 1389 (1983), in turn quoting Cairo & F.R. Co. v.
Hecht, 95 U.S. 168, 170 (1877)).
Further, “[a]s with a statute, the intent of a regulation may best be determined by
its language.” Id. Plaintiffs overlook Commerce’s consistent use of “will” in subsection
(k)(2) of the regulation, which states: “[w]hen the above criteria are not dispositive,
Consol. Court No. 22-00049 Page 34
[Commerce] will further consider [additional factors.]” 19 C.F.R. § 351.225(k)(2)
(emphasis added). The materials listed in subsection (k)(2) consist of factual
information. See id. (listing “physical characteristics of the product[,]” “channels of trade
in which the product is sold[,]” and the “manner in which the product is advertised and
displayed”). Consequently, the term “will” in both subsections (k)(1) and (k)(2) must be
considered and applied in light of the factual record. It would be inconsistent to
construe “will” in subsection (k)(1) to require Commerce to consider extra-record
materials while construing “will” in subsection (k)(2) to hold a more limited meaning. Cf.
Mil.-Veterans Advocacy v. Sec’y of Veterans Affairs, 7 F.4th 1110, 1147 (Fed. Cir.
2021) (“[I]t is a well-established canon of statutory construction that Congress is
presumed to have intended for ‘identical words used in different parts of the same act . .
. to have the same meaning.’) (citation omitted). 28
Lastly, Plaintiffs’ case citations are misplaced. While courts frequently recite the
regulatory steps Commerce must follow for the issuance of a scope ruling and may
direct Commerce to consider the (k)(1) sources, none of the cited cases addressed the
question whether Commerce must consider extra-record information. See Meridian
2018, 890 F.3d at 1277 (clarifying the legal framework); TMB 440AE, Inc., 399 F. Supp.
3d at 1322 (remanding for Commerce to conduct a (k)(1) analysis); Saha Thai, 547 F.
Supp. 3d at 1290 (same).
Accordingly, Commerce’s decision on this issue will be sustained.
28While this presumption may be overcome, see, e.g., Nike, Inc. v. Wal-Mart Stores,
Inc., 138 F.3d 1437, 1445 (Fed. Cir. 1998), Plaintiffs offer no arguments in this regard.
Consol. Court No. 22-00049 Page 35
III. Commerce’s Rejection of IGF’s Scope Comments
As previously stated, Commerce rejected IGF’s initial and rebuttal scope
comments. IGF did not challenge those decisions in its complaint or its moving brief. 29
In its response brief, the Government argued that Commerce’s rejection of IGF’s scope
comments meant that any arguments of IGF that differed from Plaintiffs were not
exhausted before Commerce, no exception to the exhaustion doctrine applies, and,
therefore, those arguments should not be considered by the court. Def.’s Resp. at 34
(citing Consol. Pl.’s Mem. at 16–17, 19–20, 43, 46–49); see also Def.-Int.’s Resp. at 30–
31 (advancing similar arguments).
In its reply brief, IGF purports to address the issues of waiver and exhaustion.
See Consol.-Pl.’s Reply at 1 (summarizing the issues). IGF does not, however, address
these issues. Instead, IGF presents new substantive arguments against Commerce’s
rejection of its initial and rebuttal scope comments. Id. at 2–10.
The court declines to consider IGF’s arguments. It is well-established “that
arguments not raised in the opening brief are waived.” SmithKline Beecham Corp. v.
Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006). This principle is also reflected in
the court’s rules, which require movants to include in their Rule 56.2 briefs “the
authorities relied on and the conclusions of law deemed warranted by the authorities.”
U.S. Court of International Trade (“CIT”) Rule 56.2(c)(2). Because IGF did not contest
29In its statement of the case, IGF asserted that “Commerce falsely claimed that it need
consider only information that either Commerce or the parties put on the record.”
Consol. Pl.’s Mem. at 6. IGF did not, however, support its assertions of falsehood with
substantive argument.
Consol. Court No. 22-00049 Page 36
Commerce’s rejection of IGF’s initial and rebuttal scope comments in its moving brief,
IGF waived any such arguments offered for the first time in its reply brief.
Without any basis for remanding Commerce’s rejection of IGF’s scope
comments, IGF failed to exhaust its administrative remedies with respect to arguments
raised for the first time in its moving brief. “[T]he [CIT] shall, where appropriate, require
the exhaustion of administrative remedies.” 28 U.S.C. § 2637(d). While exhaustion is
not jurisdictional, Weishan Hongda Aquatic Food Co., Ltd. v. United States, 917 F.3d
1353, 1363–64 (Fed. Cir. 2019), the statute “indicates a congressional intent that,
absent a strong contrary reason, the [CIT] should insist that parties exhaust their
remedies before the pertinent administrative agencies,” id. at 1362 (quoting Boomerang
Tube LLC v. United States, 856 F.3d 908, 912 (Fed. Cir. 2017)) (alteration in original).
IGF does not present any reasons—let alone strong reasons—why the court should
decline to apply the exhaustion doctrine here. Further, while certain exceptions to this
general rule exist, none would appear to apply in this instance. Accordingly, to the
extent IGF raises arguments not otherwise raised before Commerce by Plaintiffs and
considered herein, the court does not consider those arguments.
IV. Finewood’s Participation In This Case
In their moving brief, Plaintiffs asserted that Finewood ceased operations in
November 2018 and dissolved in September 2019. Pls. Mem. at 6. Based on that
representation, at oral argument, the court requested parties to address Finewood’s
capacity to sue in this court, whether any such challenges have been waived, and
Finewood’s standing to remain in the action. Letter to Counsel (Mar. 16, 2023) at 3,
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ECF No. 52. The court noted that Rule 17 “states that capacity to sue is determined, for
corporations, ‘by the law under which it was organized,’ and ‘for all other parties, by the
law of the appropriate state,’” id. (quoting CIT Rule 17(b)(2)–(3)), and that Rule 9
requires opposing parties to “raise any issues regarding capacity ‘by a specific denial’
and with ‘supporting facts that are peculiarly within the party’s knowledge,’” id. (quoting
CIT Rule 9(a)(2)). The court further noted that “[c]apacity to sue is distinct from
standing, which is a jurisdictional requirement that must be maintained throughout the
action.” Id.Plaintiffs chose not to provide substantive arguments supporting Finewood’s
presence in this action, explaining that the action would continue under the named
importer plaintiffs regardless of Finewood’s participation. Oral Arg. 1:32:00–1:32:25.
Noting that Finewood alleged incorporation under the laws of Vietnam, the Government
stated that it was unable to take a position based on the lack of information regarding
Finewood’s status under Vietnamese law. Id. 1:32:30–1:33:20; see also Compl. ¶ 1.
The court need not take a position on the issue of capacity (or waiver in relation
thereto) because it finds that Finewood must be dismissed for lack of standing. In order
to have standing, a “plaintiff must have suffered an ‘injury in fact’—an invasion of a
legally protected interest” that is “concrete and particularized” and “actual or imminent”;
the injury must be “fairly traceable” to the challenged action; and there must be a
substantial likelihood that the relief requested will redress or prevent the plaintiff’s injury.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–561 (1992). Additionally, “[t]he party
invoking federal jurisdiction bears the burden of establishing these elements.” Id. at
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561. Finewood failed to identify any interest that is legally protected in light of the
company’s dissolution or otherwise to establish the possibility of redress. 30 Thus,
Finewood will be dismissed from the action and the clerk will be directed to recaption
the action accordingly.
CONCLUSION AND ORDER
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Final Scope Ruling is remanded for Commerce to
issue a scope ruling concerning Finewood’s two-ply panels that is consistent with the
unambiguous meaning of the Plywood Orders discussed herein; it is further
ORDERED that Commerce’s treatment of Finewood’s initial scope comments
and its rejection of IGF’s initial and rebuttal scope comments are sustained; it is further
ORDERED that, on or before May 4, 2023, Commerce must correct the
administrative record or provide an explanation as to why correction is inappropriate,
consistent with footnote 25 of this opinion; it is further
ORDERED that Finewood is dismissed from the action and the clerk is directed
to amend the caption of this action accordingly; it is further
ORDERED that Commerce shall file its remand redetermination on or before
June 20, 2023; it is further
30 In parallel litigation challenging CBP’s affirmative EAPA determination, the court
denied Finewood’s motion to intervene on similar grounds, finding that Finewood had
failed to establish a legally protected interest in the action as required pursuant to CIT
Rule 24(a)(2). See Order, Far East Am., Inc. v. United States, Consol. Ct. No. 22-cv-
213 (Oct. 7, 2022), ECF No. 33.
Consol. Court No. 22-00049 Page 39
ORDERED that subsequent proceedings shall be governed by CIT Rule 56.2(h);
and it is further
ORDERED that any comments or responsive comments must not exceed 3,000
words.
/s/ Mark A. Barnett
Mark A. Barnett, Chief Judge
Dated: April 20, 2023
New York, New York