Worldwide Door Components, Inc. v. United States

U.S. Court of Appeals for the Federal Circuit
Worldwide Door Components, Inc. v. United States, 119 F.4th 959 (Fed. Cir. 2024)

Worldwide Door Components, Inc. v. United States

Opinion

Case: 23-1532 Document: 64 Page: 1 Filed: 10/08/2024

United States Court of Appeals for the Federal Circuit ______________________

WORLDWIDE DOOR COMPONENTS, INC., Plaintiff-Appellee

v.

UNITED STATES, ENDURA PRODUCTS, INC., Defendants

ALUMINUM EXTRUSIONS FAIR TRADE COMMITTEE, Defendant-Appellant ______________________

2023-1532 ______________________

Appeal from the United States Court of International Trade in No. 1:19-cv-00012-TCS, Senior Judge Timothy C. Stanceu.

-------------------------------------------------

COLUMBIA ALUMINUM PRODUCTS, LLC, Plaintiff-Appellee

v.

UNITED STATES, ENDURA PRODUCTS, INC., Defendants

ALUMINUM EXTRUSIONS FAIR TRADE Case: 23-1532 Document: 64 Page: 2 Filed: 10/08/2024

2 WORLDWIDE DOOR COMPONENTS, INC. v. US

COMMITTEE, Defendant-Appellant ______________________

2023-1534 ______________________

Appeal from the United States Court of International Trade in No. 1:19-cv-00013-TCS, Senior Judge Timothy C. Stanceu. ______________________

Decided: October 8, 2024 ______________________

JOHN FOOTE, Kelley Drye & Warren, LLP, Washington, DC, argued for plaintiff-appellee Worldwide Door Compo- nents, Inc. Also represented by MELISSA M. BREWER.

JEREMY WILLIAM DUTRA, Squire Patton Boggs (US) LLP, Washington, DC, argued for plaintiff-appellee Colum- bia Aluminum Products, LLC. Also represented by PETER JOHN KOENIG.

ENBAR TOLEDANO, Wiley Rein, LLP, Washington, DC, argued for defendant-appellant. Also represented by ROBERT E. DEFRANCESCO, III, DERICK HOLT, ELIZABETH S. LEE, ALAN H. PRICE, ADAM MILAN TESLIK.

CLAUDIA BURKE, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washing- ton, DC, argued for amicus curiae United States. Also rep- resented by BRIAN M. BOYNTON, TARA K. HOGAN, AIMEE LEE, PATRICIA M. MCCARTHY; JONZACHARY FORBES, Office of the Chief Counsel for Trade Enforcement and Compli- ance, United States Department of Commerce, Washing- ton, DC. ______________________ Case: 23-1532 Document: 64 Page: 3 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 3

Before PROST, LINN, and HUGHES, Circuit Judges. HUGHES, Circuit Judge. In this consolidated appeal, Aluminum Extrusions Fair Trade Committee (AEFTC) appeals two decisions from the United States Court of International Trade (trial court). In those decisions, the trial court affirmed scope rulings is- sued under protest by the Department of Commerce (the agency). The scope rulings held that door thresholds im- ported by Appellees do not fall within the scope of the anti- dumping and countervailing duty orders on aluminum extrusions from the People’s Republic of China. For the reasons explained below, we reverse the trial court’s second remand order and vacate all subsequent opinions. I The current appeal addresses whether the products im- ported by Appellees Worldwide Door Components, Inc. and Columbia Aluminum Products, LLC fall within the scope of existing antidumping and countervailing duty orders. 1

1 We note at the outset that, for the purposes of this appeal, we treat Appellees’ products as interchangeable. Neither of the two Appellees opposed AEFTC’s motion for consolidation, see ECF 13 (motion to consolidate); ECF 15 (order granting motion), and the consolidated Appellees submitted a single brief, which nowhere argued that the two companies should be treated differently with respect to the disposition of this case. See generally Appellees’ Br. Even so, counsel for Columbia seemed to argue for the first time at oral argument that Appellees should be treated dif- ferently, asserting that the agency’s first remand redeter- mination considered Worldwide products but failed to consider Columbia products. Oral Arg. at 46:38–48:19, https://oralarguments.cafc.uscourts.gov/default.aspx?fl=2 Case: 23-1532 Document: 64 Page: 4 Filed: 10/08/2024

4 WORLDWIDE DOOR COMPONENTS, INC. v. US

We begin with a brief explanation of the scope language and the products at issue in this case. We then summarize this case’s extensive procedural history before turning to the merits. A In 2011, the Department of Commerce issued anti- dumping and countervailing duty orders on aluminum ex- trusions from China. See Aluminum Extrusions from the People’s Republic of China: Antidumping Duty Order, 76 Fed. Reg. 30,650 (Dep’t of Commerce May 26, 2011); Alu- minum Extrusions from the People’s Republic of China: Countervailing Duty Order, 76 Fed. Reg. 30,653 (Dep’t of Commerce May 26, 2011) (collectively, the Orders). The scope of the Orders describes the subject merchandise as “aluminum extrusions” that “are shapes and forms, pro- duced by an extrusion process, made from” specified alumi- num alloys. Antidumping Duty Order, 76 Fed. Reg. at 30,650. 2 Relevant here, the scope language explains what goods may be considered “subject merchandise:” Subject aluminum extrusions may be described at the time of importation as parts for final finished products that are assembled after importation,

3-1532_07112024.mp3. We conclude that, by raising the is- sue for the first time at oral argument, Columbia failed to preserve this argument and, like previous panels of this court, “we exercise our discretion to find forfeiture.” ABS Glob., Inc. v. Cytonome/ST, LLC, 984 F.3d 1017, 1027 (Fed. Cir. 2021) (collecting cases). 2 The Orders recite the same scope. See Meridian Prod., LLC v. United States, 851 F.3d 1375, 1379 n.4 (Fed. Cir. 2017). Compare Antidumping Duty Order, 76 Fed. Reg. at 30,650–51, with Countervailing Duty Order, 76 Fed. Reg. at 30,653–54. For ease of reference, we cite only to the scope in the Antidumping Duty Order. Case: 23-1532 Document: 64 Page: 5 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 5

including, but not limited to, window frames, door frames, solar panels, curtain walls, or furniture. Such parts that otherwise meet the definition of aluminum extrusions are included in the scope. The scope includes the aluminum extrusion compo- nents that are attached (e.g., by welding or fasten- ers) to form subassemblies, i.e., partially assembled merchandise unless imported as part of the finished goods ‘kit’ defined further below. The scope does not include the non-aluminum extrusion components of subassemblies or subject kits. Subject extrusions may be identified with reference to their end use, such as fence posts, electrical con- duits, door thresholds, carpet trim, or heat sinks (that do not meet the finished heat sink exclusion- ary language below). Such goods are subject mer- chandise if they otherwise meet the scope definition, regardless of whether they are ready for use at the time of importation. Id. at 30,650–51. In addition to the stated inclusions, “[t]he scope also excludes finished merchandise containing alu- minum extrusions as parts that are fully and permanently assembled and completed at the time of entry, such as fin- ished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels.” Id. at 30,651. Under agency regulations, “[a]n interested party may submit a scope ruling application requesting that the Sec- retary conduct a scope inquiry to determine whether a product . . . is covered by the scope of an order.” 19 C.F.R. § 351.225(c)(1). In August 2017 and March 2018, respec- tively, Worldwide and Columbia each submitted Scope Rul- ing Requests to the agency, seeking determinations that their imported door thresholds are not subject to the Or- ders. J.A. 969. Worldwide argued that its door thresholds are exempt from the Orders under the finished Case: 23-1532 Document: 64 Page: 6 Filed: 10/08/2024

6 WORLDWIDE DOOR COMPONENTS, INC. v. US

merchandise exclusion because they (1) are assemblies, containing both extruded aluminum components and non- aluminum components, and (2) are imported fully assem- bled and ready “for installation within a door frame, or res- idential or commercial building, without requiring any further finishing or fabrication.” J.A. 976; J.A. 988. Like- wise, Columbia argued that its door thresholds are exempt from the Orders under the finished merchandise exception because the thresholds are composed of both extruded alu- minum components and non-aluminum components and are “ready for use at the time of import and require no fur- ther processing or manufacturing.” J.A. 996. Appellant AEFTC was the petitioner in the underlying antidumping and countervailing duty investigations for Appellees’ thresholds and submitted comments as a domes- tic party in the scope ruling proceedings. See J.A. 970 n.6. AEFTC subsequently became a party to the case when it intervened in the trial court proceedings to defend the agency’s in-scope ruling. B 1 On December 19, 2018, the agency resolved both Scope Ruling Requests in a single determination. See Antidump- ing and Countervailing Duty Orders on Aluminum Extru- sions from the People’s Republic of China: Final Scope Rulings on Worldwide Door Components Inc., MJB Wood Group Inc., and Columbia Aluminum Products Door Thresholds (Dep’t of Commerce Dec. 19, 2018) (hereinafter, Original Scope Ruling); J.A. 969–1006. Pursuant to 19 C.F.R. § 351.225(k)(1), the agency determined that Appel- lees’ door thresholds were covered by the scope of the Or- ders. After an extensive recitation of Appellees’ arguments and a discussion of relevant prior scope rulings, the agency provided three alternative bases for its determination, finding that the thresholds qualified as subject merchan- dise as either “parts for final finished products,” Case: 23-1532 Document: 64 Page: 7 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 7

“subassemblies,” or “extrusions that may be identified with reference to their end-use.” J.A. 1000–02. The agency also rejected Appellees’ position that the door thresholds were excluded from the Orders under the finished merchandise exception. First, with respect to “parts for final finished products,” the agency found that “that the aluminum extruded com- ponents of [Appellees’] door thresholds may be described as parts for final finished products, i.e., parts for doors, which are assembled after importation (with additional compo- nents) to create the final finished product, and otherwise meet the definition of in-scope merchandise.” J.A. 1001. Next, with respect to subassemblies, the agency found that “the door thresholds, which constitute aluminum extrusion components attached to non-aluminum extrusion compo- nents, may also be described as subassemblies pursuant to the scope of the Orders.” J.A. 1002. Based on the subassem- blies conclusion, the agency noted that the non-aluminum extrusion components of the thresholds would not be in- cluded in the scope of the Orders. Finally, the agency con- cluded that Appellees’ products were subject merchandise because the “scope of the Orders also expressly covers alu- minum extrusions that may be identified with reference to their end-use, such as door thresholds,” “regardless of whether they are ready for use at the time of importation.” J.A. 1002. The agency then found that Appellees’ reliance on the finished merchandise exception was “inapposite,” reasoning that to hold otherwise “would render the express inclusion of ‘door thresholds’ meaningless.” J.A. 1003–04. 2 Appellees appealed the Original Scope Ruling to the trial court. On September 14, 2021, the trial court issued opinions for both Worldwide and Columbia, remanding the case back to the agency for further consideration. See Worldwide Door Components, Inc. v. United States, 537 F.Supp.3d 1403 (Ct. Int’l Trade 2021) (hereinafter, First Case: 23-1532 Document: 64 Page: 8 Filed: 10/08/2024

8 WORLDWIDE DOOR COMPONENTS, INC. v. US

Remand Order); J.A. 1–17. 3 In the First Remand Order, the trial court held that the agency misinterpreted the lan- guage of the scope and therefore erred in finding Appellees’ door thresholds were covered by the Orders. In the trial court’s view, the agency erred when it relied on the scope language stating “[s]ubject aluminum extrusions may be described at the time of importation as parts for final fin- ished products” and “[s]ubject extrusions may be identified with reference to their end use.” J.A. 6–8. According to the trial court, “[Appellees’] door thresholds are not ‘aluminum extrusions’ at the time of importation; rather, they are door thresholds that contain an aluminum extrusion as a com- ponent in an assembly.” J.A. 7. Therefore, based on its in- terpretation of the general scope language as excluding assembled goods, the trial court held that such language was “inapplicable to the issues presented by [Appellees’] imported products” and could not be used as the basis for finding the products to be subject merchandise. J.A. 7. Dur- ing its analysis of the scope language, the trial court acknowledged that the agency made a finding on subas- semblies but did not discuss the implications or accuracy of this finding. The trial court also held that the agency erred in refus- ing to consider whether Appellees’ thresholds satisfied the finished merchandise exception. Because the agency had relied on its interpretation of the “end use” provision to make its finding that the finished merchandise exception

3 For simplicity, we cite only the agency scope orders and trial court decisions where Worldwide appears as the captioned party. Although the agency and the trial court formally issued separate decisions for both parties in most instances, the pairs of decisions are substantively identical. See, e.g., J.A. 1–17 (trial court’s First Remand Order for Worldwide); J.A. 104–27 (trial court’s First Remand Order for Columbia). Case: 23-1532 Document: 64 Page: 9 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 9

was inapplicable, the trial court reasoned that this conclu- sion must also fail. On remand, the trial court instructed the agency to “give full and fair consideration to the issue of whether this exclusion applies.” J.A. 16. 3 On remand, the agency again found that Appellees’ door thresholds were subject merchandise under the Or- ders. Final Results of Redetermination Pursuant to Court Remand; Worldwide Door Components, Inc. v. United States (Dep’t of Commerce Dec 23, 2020) (hereinafter, First Remand Redetermination); J.A. 1437–74. At the outset, the agency noted that it disagreed with the trial court’s inter- pretation of the Orders. However, in order to comply with the trial court’s order, and “under respectful protest,” the agency did not consider whether Appellees’ door thresholds were covered by the general scope language as “parts for final finished products” or as “subject aluminum extrusions identified with reference to their end use.” J.A. 1450. The agency also disagreed, under respectful protest, with the trial court’s conclusion that certain Federal Circuit rulings discussing subassemblies were inapplicable in this case. Because the trial court did not rule on the agency’s de- termination in the Original Scope Ruling that Appellees’ door thresholds are subassemblies, the agency once again considered the language’s applicability to the merchandise at hand. Like the Original Scope Ruling, the agency again found that Appellees’ door thresholds can be classified as subassemblies. The agency explained that a subassembly is broadly defined as “partially assembled merchandise,” and noted that, “[i]n other words, a subassembly could also be described as an intermediate product or any other par- tially assembled product that is something less than the full, permanent, and completed final finished product that would satisfy the finished merchandise exclusion.” J.A. 1453. In the context of Appellees’ door thresholds, the agency found that the thresholds “do not function on their Case: 23-1532 Document: 64 Page: 10 Filed: 10/08/2024

10 WORLDWIDE DOOR COMPONENTS, INC. v. US

own, but rather are incorporated into a larger downstream product.” J.A. 1459 (explaining that “Worldwide stated that its door thresholds contain all the necessary compo- nents for installation within a door frame or residential or commercial building, and provided a report from a testing laboratory documenting how the door thresholds are mounted within door frames and permanent building structures”). With respect to the trial court’s order to consider the finished merchandise exception, the agency found that be- cause the door thresholds were subassemblies, they could not also qualify as finished merchandise, since subassem- blies and finished merchandise are mutually exclusive cat- egories. 4 Appellees again sought review in the trial court, and the trial court once more remanded for further considera- tion by the agency. Worldwide Door Components, Inc. v. United States, 537 F.Supp.3d 1403 (Ct. Int’l Trade 2021) (hereinafter, Second Remand Order); J.A. 19–44. In this opinion, the trial court held that the agency’s “new decision impermissibly relies on a factual finding or inference per- taining to [Appellees’] door thresholds that is contradicted by certain evidence on the record and unsupported by any specific evidence that Commerce cited.” J.A. 20. Further, the trial court disagreed with the agency’s analysis of our precedent and its conclusion that subassemblies and fin- ished merchandise were mutually exclusive categories. J.A. 36 n.5 (“These decisions by the Court of Appeals for the Federal Circuit do not support the Department’s posi- tion that it need not consider the finished merchandise ex- clusion if it deems the good at issue to be a ‘subassembly.’”). In reviewing the First Remand Redetermination, the trial court focused on a passage from the decision where the agency examined record evidence indicating that door units are highly customizable, which might require Case: 23-1532 Document: 64 Page: 11 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 11

additional cutting and machining of the door threshold. The agency determined that this information was con- sistent with and supported its prior determination that Ap- pellees’ door thresholds were not final finished products, but rather an intermediate product that is meant to be in- corporated into a larger downstream product. Upon review, the trial court held that this evidence was “contrary to cer- tain record evidence,” J.A. 38, including Appellees’ descrip- tion of the door thresholds as “fully assembled at the time of entry, complete with all of the necessary components to be ready for installation within a door frame, or residential or commercial building without any further finishing or fabrication,” J.A. 38 (quoting Worldwide’s Scope Ruling Re- quest, emphasis added by trial court). The trial court held that the record evidence “d[id] not constitute substantial evidence to support a conclusion or inference that [Appel- lees’] door thresholds are so designed and manufactured.” J.A. 39. The trial court further explained: [B]ecause Commerce relied, at least in part, on this evidence to conclude that the finished merchandise exclusion was not applicable to [Appellees’] door thresholds, the court must remand the agency’s de- cision once again. The issue to which this evidence pertains, i.e., whether [Appellees’] door thresholds are designed and manufactured so as to require cutting or machining prior to use, is directly rele- vant to the applicability of the finished merchan- dise exclusion, which pertains to “finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry.” J.A. 39–40 (quoting Antidumping Duty Order, 76 Fed. Reg. at 30,651, emphasis added by trial court). The trial court also held that the agency did not offer a “plausible explanation of why the articles mentioned in the ‘door’ and ‘window’ exemplars of the finished merchandise Case: 23-1532 Document: 64 Page: 12 Filed: 10/08/2024

12 WORLDWIDE DOOR COMPONENTS, INC. v. US

exclusion satisfy that exclusion but that [Appellees’] door thresholds, as described in the Scope Ruling Request, do not.” J.A. 43. Accordingly, the trial court held that “Com- merce did not comply fully with the court’s instruction in [the First Remand Order] with respect to the finished mer- chandise exclusion.” J.A. 43. The trial court instructed: On remand, Commerce must undertake this task again. After reaching a finding from the record ev- idence that the door thresholds at issue in this case either are, or are not, so designed and produced as to require cutting or machining prior to use, Com- merce must consider that finding in deciding anew whether the finished merchandise exclusion ap- plies to the specific door thresholds at issue in this litigation. J.A. 43–44. 5 Following the Second Remand Order, the agency con- sidered, for the third time, whether Appellees’ door thresh- olds meet the definition of finished merchandise. Final Results of Redetermination Pursuant to Court Remand; Worldwide Door Components, Inc. v. United States (Dep’t of Commerce Sept. 14, 2021) (hereinafter, Second Remand Redetermination); J.A. 1589–1604. In the Second Remand Redetermination, the agency found, under respectful pro- test, that Appellees’ door thresholds were excluded from the scope of the Orders under the finished merchandise ex- ception. The agency noted its disagreement with nearly all of the Second Remand Order’s analysis, but ultimately stated that its new determination was “consistent with the [trial court’s] opinion and analysis.” J.A 1604. The agency concluded its opinion stating, “[s]hould the Court sustain these Final Results of Redetermination, we will issue a re- vised scope ruling accordingly.” J.A. 1604. Case: 23-1532 Document: 64 Page: 13 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 13

6 Upon review, the trial court remanded the case back to the agency for the third and final time, finding both proce- dural and substantive error. Worldwide Door Components, Inc. v. United States, 589 F.Supp.3d 1185 (Ct. Int’l Trade 2022) (hereinafter, Third Remand Order); J.A. 45–67. With respect to the procedural error, the trial court held that the Second Remand Redetermination was “not a decision in a form the court may sustain” due to its phrasing at the end stating “[s]hould the Court sustain these Final Results of Redetermination, we will issue a revised scope ruling ac- cordingly,” because such a determination would not be self- effectuating if the trial court were to affirm the agency. J.A. 60–61 (citing Second Remand Redetermination, J.A. 1604). The trial court instructed the agency that it must “issue a third remand redetermination that . . . is a scope ruling or determination for the court’s review, and it must be in a form that would go into effect if sustained upon judicial re- view.” J.A. 61. Next, the trial court held that the Second Remand Redetermination was substantively flawed be- cause it presented no reasoning for its scope ruling, “other than its incorrect conclusion that the court ordered Com- merce to do so.” J.A. 61–62. The trial court explained the various ways that it thought the agency had misinter- preted its Second Remand Order and identified issues that needed further analysis to be legally sustainable. 7 The agency issued its final redetermination, again finding, under protest, that Appellees’ door thresholds are finished merchandise and therefore excluded from the Or- ders. Final Results of Redetermination Pursuant to Court Remand; Worldwide Door Components, Inc. v. United States (Dep’t of Commerce Aug. 10, 2022) (hereinafter, Third Remand Redetermination); J.A. 1698–1717. The agency noted that, consistent with the Third Remand Or- der, it provided additional explanation for the basis of its Case: 23-1532 Document: 64 Page: 14 Filed: 10/08/2024

14 WORLDWIDE DOOR COMPONENTS, INC. v. US

finding. After further discussion of the record, the agency stated, “because we conclude that [Appellees’] door thresh- olds are: (1) fully assembled and completed at the time of entry; and (2) contain extruded aluminum and nonex- truded aluminum components, we find that [Appellees’] door thresholds satisfy the criteria for the finished mer- chandise exclusion.” J.A. 1712. The agency also noted that “[i]f the [trial court] sustains this redetermination, a Fed- eral Register notice will be published stating that [Appel- lees’] door thresholds are excluded from the scope of the Orders based on the finished merchandise exclusion” and “instructions will be issued to [Customs and Border Patrol], directing [it] to give effect to this determination as appro- priate.” J.A. 1717. 8 On appeal for the fourth time, the trial court sustained the agency’s scope determination. Worldwide Door Compo- nents, Inc. v. United States, 606 F.Supp.3d 1363 (Ct. Int’l Trade 2022) (hereinafter, Final Opinion); J.A. 68–84. In its Final Opinion, the trial court concluded that the agency had complied with the Third Remand Order and had “ma[d]e a decision on whether the goods are within the scope of the Orders based on the record as a whole” and “done so . . . in a form the court is able to sustain.” J.A. 81. The trial court rejected arguments AEFTC raised on ap- peal. AEFTC appeals. We have jurisdiction under 28 U.S.C. § 1581(c). II We review the trial court’s decisions de novo and apply anew the same standard it used. Sunpreme Inc. v. United States, 946 F.3d 1300, 1308 (Fed. Cir. 2020) (en banc). Un- der that standard, this court must uphold the agency’s de- terminations unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with Case: 23-1532 Document: 64 Page: 15 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 15

law.” 19 U.S.C. § 1516a(b)(1)(B)(i); see also Sunpreme, 946 F.3d at 1308. The plain meaning of an antidumping or countervailing duty order, including whether an ambiguity exists with respect to the scope of the order, is a question of law reviewed de novo. Meridian Products, LLC v. United States, 851 F.3d 1375, 1382 (Fed. Cir. 2017). In contrast, “[t]he question of whether a product meets the unambigu- ous scope terms presents a question of fact reviewed for substantial evidence.” Id. Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” In re Gartside, 203 F.3d 1305, 1312 (Fed. Cir. 2000) (quoting Consol. Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 229 (1938)). Our review “is limited to the rec- ord before Commerce in the particular proceeding at issue and includes all evidence that supports and detracts from Commerce’s conclusion.” Ad Hoc Shrimp Trade Action Comm. v. United States, 802 F.3d 1339, 1348 (Fed. Cir. 2015). Further, the agency’s findings “may still be sup- ported by substantial evidence even if two inconsistent con- clusions can be drawn from the evidence.” Id. III On appeal, AEFTC challenges the trial court’s remand orders, arguing that the agency’s Original Scope Ruling was supported by substantial evidence and otherwise in ac- cordance with law. Appellees disagree, asserting instead that the Original Scope Ruling is incompatible with our precedent, whereas the Third Remand Redetermination is consistent with prior court decisions. The parties present argument with respect to all three bases that the agency considered in the Original Scope Ruling, namely, whether Appellees’ door thresholds can be considered subject mer- chandise as (1) “parts for final finished products,” (2) prod- ucts “identified with reference to their end use,” or (3) “subassemblies.” We begin our discussion with the sub- assemblies provision of the Orders. Case: 23-1532 Document: 64 Page: 16 Filed: 10/08/2024

16 WORLDWIDE DOOR COMPONENTS, INC. v. US

A In the Original Scope Ruling, the agency unquestiona- bly made a finding that Appellees’ door thresholds could be considered subassemblies. See J.A. 1002 (“Additionally, we find that the door thresholds, which constitute aluminum extrusion components attached to non-aluminum extru- sion components, may also be described as subassemblies pursuant to the scope of the Orders.”). However, the agency did not go further with its subassemblies analysis. Perhaps understandably so, because the primary focus of the Origi- nal Scope Ruling was the agency’s finding that the door thresholds were included within the scope of the Orders under the “end use” provision. Aside from noting that the agency did make a finding about subassemblies, the trial court did not address the ac- curacy or the sufficiency of the agency’s subassembly find- ing, instead holding that the agency committed reversible error with its interpretation of the other two at-issue pro- visions of the Orders. J.A. 8 (trial court stating “[a]fter con- cluding that the ‘subassemblies’ provision applied to the aluminum extrusion component of each of [Appellees’] door thresholds, the Scope Ruling again misinterpreted a provi- sion within the scope language. . .”). In reviewing the agency’s Original Scope Ruling anew, we hold that its in-scope determination relying on the sub- assemblies portion of the Orders is not supported by sub- stantial evidence. The analysis section of the Original Scope Ruling dedicated only two sentences to the subas- sembly finding, neither of which discussed Appellees’ door thresholds specifically or explained why they should be cat- egorized as subassemblies. Additionally, even though the agency discussed prior relevant scope determinations— some of which resulted in a determination that the mer- chandise was a subassembly—the agency does not explain why Appellees’ door thresholds might be similar to or dif- ferent from those examples. Further, to the extent that the Case: 23-1532 Document: 64 Page: 17 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 17

agency does discuss Appellees’ products, see J.A. 1002 (quoting the antidumping and countervailing duty peti- tioner’s argument that “aluminum extrusions are incorpo- rated into window and door frames and sills, curtain walls, thresholds, and gutters” (emphasis in original)); J.A. 1004 (stating “we find that a door threshold may be described as a part for a door”), it is unclear whether this finding is re- lated to the subassemblies determination, or is a rebuttal to Appellees’ arguments about the finished merchandise exception. While the substantial evidence standard of re- view does not impose a high bar, there must be at least some citation and analysis of the record evidence. B Nevertheless, any defect in the agency’s subassemblies analysis was cured in the First Remand Redetermination, where the agency’s analysis was substantially more ful- some. In the First Remand Redetermination, the agency be- gan with an analysis of the scope language, focusing on the interplay between the “subassemblies” portion of the gen- eral scope language and the “finished merchandise” excep- tion. The agency noted three particular points: (1) the subassemblies language “is broad enough to cover single aluminum extrusion components that are attached to other aluminum extrusion components, or attached to non-alu- minum extrusion components, or some combination thereof, at the time of importation;” (2) “a subassembly could also be described as an intermediate product or any other partially assembled product that is something less than the full, permanent, and completed final finished product that would satisfy the finished merchandise exclu- sion;” and (3) the subassemblies provision contains a spe- cific reference to the finished goods kit exclusion, “which means that products which satisfy the subassemblies lan- guage may, nonetheless, be excluded under the finished goods kit exclusion,” however, the subassemblies provision Case: 23-1532 Document: 64 Page: 18 Filed: 10/08/2024

18 WORLDWIDE DOOR COMPONENTS, INC. v. US

contains no similar exception for finished merchandise. J.A. 1453–54. Ultimately, the agency concluded that “prod- ucts that are included in the scope because they satisfy the subassemblies language cannot also be excluded as fin- ished merchandise under the finished merchandise exclu- sion.” J.A. 1454. Next, the agency turned to the facts of this case. There, the agency found that “the door thresholds constitute ‘par- tially assembled merchandise,’ or an intermediate product, and therefore, they are not the fully and permanently as- sembled and completed final finished product, that would satisfy the finished merchandise exclusion.” J.A. 1459. The agency cited record evidence from Appellees, stating that their “door thresholds contain all the necessary compo- nents for installation within a door frame or residential or commercial building,” and noting that Appellees “provided a report from a testing laboratory documenting how the door thresholds are mounted within door frames and per- manent building structures.” J.A. 1459. To the agency, this evidence indicated that the “door thresholds do not func- tion on their own, but rather are incorporated into a larger downstream product.” J.A. 1459. The agency also noted other record evidence explaining that the door thresholds are “designed for use in ‘single or double exterior doors,’” and that “the door thresholds at issue are designed to fit standard door sizes in the United States.” J.A. 1459–60. The First Remand Redetermination also addressed Ap- pellees’ arguments that the door thresholds should be cat- egorized as finished merchandise because, “according to [Appellees], they are ‘finished merchandise’ that are ‘fully and permanently assembled and completed at the time of entry’ and do not require ‘further finishing, fabrication or cutting, or repackaging after importation.’” J.A. 1460. Ulti- mately, the agency rejected Appellees’ argument, stating that Appellees’ “description of its door thresholds as ‘ready for use at the time of import’ and requiring ‘no further pro- cessing or manufacturing’ at the time of entry does not Case: 23-1532 Document: 64 Page: 19 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 19

mean that such thresholds constitute finished merchandise under the exclusion.” J.A. 1461. The agency found that one of our cases was instructive here, noting that we have af- firmed the agency’s finding that certain “curtain wall units did not fall within the finished merchandise exclusion be- cause the curtain wall units at issue were subassemblies meant to be fastened together to form a completed curtain wall.” J.A. 1460 (citing Shenyang Yuanda Aluminum In- dus. Engr. Co., Ltd. v. United States, 776 F.3d 1351, 1358 (Fed. Cir. 2015)). Next, the agency determined that its analysis was consistent with a previous agency determina- tion where it found that certain door handles were “‘subas- semblies’ that were intended to ‘become part of a larger whole’ and that therefore, they were not finished merchan- dise containing extrusions.” J.A. 1460–61. Following the agency’s main analysis section of the First Remand Redetermination, where it conclusively found that Appellees’ door thresholds should be categorized as subassemblies and not finished merchandise, the agency recited and responded to the “Interested Party Comments on Draft Results of Redetermination.” See J.A. 1463–71. Relevant here, AEFTC and another interested party, En- dura Products, Inc., cited additional record evidence, which allegedly constituted substantial evidence for the agency’s subassembly finding: The petitioner and Endura also submitted infor- mation in the underlying scope proceeding demon- strating that door thresholds are highly customizable and generally require further finish- ing and fabrication before assembly into a finished door unit. Although door thresholds are available in standard lengths, they are generally manufac- tured to a longer length that is cut or machined ac- cording to order-specific requirement. Because of the need to customize door thresholds to meet the requirements of a specific door assembly, Case: 23-1532 Document: 64 Page: 20 Filed: 10/08/2024

20 WORLDWIDE DOOR COMPONENTS, INC. v. US

it would not make economic sense to finish custom- ization of a threshold prior to importation, and it is likely that imported door thresholds are further cut to size at the importers’ domestic facilities or at pre-hangers’ facilities. J.A.1470. The agency noted that AEFTC’s evidence “indi- cates that the completed door unit is highly customizable, and may require additional cutting and machining of the door threshold.” J.A. 1472. The agency ultimately con- cluded that “the information submitted by [AEFTC] and Endura is consistent with and supports our determination that [Appellees’] door thresholds are not, in and of them- selves, final finished products, but are, rather, an interme- diate product that is meant to be incorporated into a larger downstream product, which is the finished merchandise.” J.A. 1473. As discussed, supra I.B.4., the trial court’s Second Re- mand order held that the agency’s First Remand Redeter- mination relied on improper inferences or factual findings not supported by the record and that the agency had erred in failing to consider the finished merchandise exception. J.A. 20. For both issues, we disagree. We begin with the question of whether the agency’s subassemblies finding was supported by substantial evi- dence, and we answer that question in the affirmative. First, the agency engaged in a thorough analysis of the scope language, explaining precisely how it defined a sub- assembly. Then, based on that discussion, the agency re- viewed record evidence—including statements made by Appellees themselves that described the door thresholds as parts that are incorporated into finished door frames—to conclude that the goods at issue meet the definition of a subassembly. The agency even took the additional step of analogizing the door thresholds to other products that had been previously categorized as subassemblies, including curtain wall units and door handles. This is “such relevant Case: 23-1532 Document: 64 Page: 21 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 21

evidence as a reasonable mind might accept as adequate to support a conclusion.” See In re Gartside, 203 F.3d at 1312. That the trial court may be able to point to certain rec- ord evidence that is less persuasive or could support a con- trary finding does not make the agency’s decision unsupported by substantial evidence. See Ad Hoc Shrimp Trade Action Comm., 802 F.3d at 1348. The trial court seemed to focus on the agency’s citation of AEFTC and En- dura’s record evidence indicating that door units are highly customizable and might require additional cutting and ma- chining of the door threshold. The trial court found that this statement by the agency was contrary to the record ev- idence where Appellees asserted that the door thresholds are “fully assembled at the time of entry, complete with all of the necessary components to be ready for installation within a door frame, or residential or commercial building without any further finishing or fabrication.” J.A. 38. We first note that, to us, it does not appear that the agency actually relied on this evidence in making its subassem- blies determination. Rather, the agency found that the ev- idence was “consistent with and supports our determination” that the door thresholds are subassemblies. J.A. 1473. Further, the agency decision acknowledged, and subsequently rejected, Appellees’ argument that their door thresholds are finished merchandise because they are “ready for use at the time of import.” J.A. 1461. Because the agency found that the door thresholds “must be at- tached to other components after importation to become part of the downstream product,” it concluded that the door thresholds could qualify as subassemblies even if they did not require any further finishing after importation. J.A. 1461. The trial court also took issue with the agency’s failure to discuss particular exemplars listed in the finished mer- chandise exception of the Orders: “[t]he Remand Redeter- mination does not offer a plausible explanation of why the articles mentioned in the ‘door’ and ‘window’ exemplars of Case: 23-1532 Document: 64 Page: 22 Filed: 10/08/2024

22 WORLDWIDE DOOR COMPONENTS, INC. v. US

the finished merchandise exclusion satisfy that exclusion but that [Appellees’] door thresholds, as described in the Scope Ruling Request, do not.” J.A. 43; see also Antidump- ing Duty Order, 76 Fed. Reg. at 30,651 (listing examples of finished merchandise such as “finished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels”). We acknowledge the trial court’s concern with line-drawing in the context of these Orders and agree that a discussion dis- tinguishing the categories could have been a helpful addi- tion to the agency’s decision. Nevertheless, such an omission does not constitute reversible error. As explained earlier, “whether a product meets the unambiguous scope terms presents a question of fact reviewed for substantial evidence.” Meridian, 851 F.3d at 1382. Finally, we disagree with the trial court’s assertion that the agency was required to consider the finished mer- chandise exception, notwithstanding its finding that the door thresholds were subassemblies. J.A. 36 n.5 (trial court stating that the agency’s cited opinions “do not support the Department’s position that it need not consider the fin- ished merchandise exclusion if it deems the good at issue to be a ‘subassembly’”). In a recent opinion, we firmly fore- closed that position, making clear that “parts or subassem- blies are not finished products and thus cannot qualify for the finished merchandise exclusion.” China Custom Mfg. Inc. v. United States, 61 F.4th 956, 960 (Fed. Cir. 2023); see also Shenyang Yuanda Aluminum, 776 F.3d at 1358 (“A part or subassembly, here a curtain wall unit, cannot be a finished product.”). Because subassemblies and finished merchandise are mutually exclusive categories for the pur- pose of the Orders, it was error for the trial court to remand the case back to the agency for failure to consider the fin- ished merchandise exception in light of its subassembly finding. In sum, to the extent that the agency’s in-scope deter- mination relies on the subassemblies provision of the Case: 23-1532 Document: 64 Page: 23 Filed: 10/08/2024

WORLDWIDE DOOR COMPONENTS, INC. v. US 23

Orders, we hold that the agency’s Original Scope Ruling was deficient with respect to its analysis of record evidence. The subassembly determination was therefore not sup- ported by substantial evidence and remand for further con- sideration was appropriate. The agency subsequently cured any defect with respect to its subassembly findings in the First Remand Redetermination by supporting its de- cision with substantial record evidence. Accordingly, the trial court’s second remand order holding otherwise was er- roneous. IV The agency’s finding that Appellees’ door thresholds are subassemblies is an independent basis for sustaining its in-scope determination. Therefore, we need not reach the alternative bases for an in-scope determination that were at issue in the prior proceedings, namely, the “parts for final finished products” and goods “identified with ref- erence to their end use” provisions of the Orders. For the reasons explained above, we reverse the trial court’s Second Remand Order, reinstate the non-protested portions of the agency’s First Remand Redetermination, and vacate the trial court’s subsequent opinions and orders in this case. REVERSED-IN-PART AND VACATED-IN-PART COSTS No costs.

Reference

Cited By
3 cases
Status
Published