IKEA Supply AG v. United States

Slip Op. 21-
UNITED STATES COURT OF INTERNATIONAL TRADE
FABUWOOD CABINETRY CORP.,
Plaintiff,
and
CUBITAC CABINETRY CORP., and CNC
ASSOCIATES N.Y., INC.,
Consolidated Plaintiffs,
and
IKEA SUPPLY AG,
Plaintiff-Intervenor,
v.
UNITED STATES,
Defendant,
and
COALITION FOR FAIR TRADE IN
HARDWOOD PLYWOOD and
MASTERBRAND CABINETS INC.,
Defendant-Intervenors.
Before: Gary S. Katzmann, Judge
Consol. Court No. 18-00208
OPINION
[The court affirms Commerce’s Remand Results.]
Dated: May 27, 2021
Matthew R. Nicely and Julia K. Eppard, Akin, Gump, Strauss, Hauer & Feld, LLP, of Washington,
D.C., for plaintiff, Fabuwood Cabinetry Corp.
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E. David Smith, Smith & Associates, of Bloomfield, N.J., for consolidated plaintiff, Cubitac
Cabinetry Corp.
Andrew T. Schutz and Kavita Mohan, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP,
of Washington, D.C. and New York, N.Y., for consolidated plaintiff, CNC Associates of N.Y., Inc.
Kristen Smith and Sarah E. Yuskaitis, Sandler, Travis & Rosenberg, P.A., of Washington, D.C.,
for plaintiff-intervenor, IKEA Supply AG.
Sonia M. Orfield, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice, of Washington, DC, for defendant. 	With her on the brief were Brian M. Boynton,
Acting Assistant Attorney General, Jeanne E. Davidson, Director and Tara K. Hogan, Assistant
Director. 	Of counsel was Rachel Bogdan, Attorney, Office of the Chief Counsel for Trade
Enforcement & Compliance, U.S. Department of Commerce, of Washington, D.C.
Timothy C. Brightbill, Stephanie M. Bell, Tessa V. Capeloto, and Elizabeth S. Lee, Wiley Rein
LLP, of Washington, D.C., for defendant-intervenors, Coalition for Fair Trade in Hardwood
Plywood and Masterbrand Cabinets, Inc.
Katzmann, Judge: The court returns to a dispute over a scope ruling regarding antidumping
(“AD”) duty and countervailing duty (“CVD”) orders on certain hardwood plywood products from
China. In its original determination, Commerce accepted a scope ruling request by Coalition for
Fair Trade in Hardwood Plywood (“Coalition”) and Masterbrand Cabinets, Inc. (“Masterbrand”),
a domestic cabinets manufacturer, (collectively, “Petitioner-Masterbrand”), to confirm the
inclusion of certain products in the scope of Commerce’s orders. Before the court is Commerce’s
Final Results of Redetermination Pursuant to Court Remand (Dep’t Commerce Jan. 11, 2021),
ECF No. 82 (“Remand Results”), which the court ordered in Fabuwood Cabinetry Corp. v. United
States, 44 CIT __, 469 F. Supp. 3d 1373 (2020) (“Fabuwood I”), so that Commerce could further
explain or reconsider its decision to accept Petitioner-Masterbrand’s scope ruling request. 	On
remand, after revisiting its prior determination, Commerce reversed itself and concluded that the
scope ruling request in issue was deficient in critical respects and did not provide a sufficient basis
for Commerce to issue a scope ruling. Now, none of the litigants -- neither Plaintiff Fabuwood
Cabinetry Corp. (“Fabuwood”), Consolidated-Plaintiffs CNC Associates N.Y., Inc. (“CNC”) and
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Cubitac Cabinetry Corporation (“Cubitac”), Plaintiff-Intervenor IKEA Supply AG (“IKEA”), nor
Defendant-Intervenors Petitioner-Masterbrand -- challenge the Remand Results. 	See CNC’s
Cmts. on Final Results of Redetermination at 1–2, Feb. 10, 2021, ECF No. 85 (“CNC’s Br.”);
Def.-Inters.’ Cmts. on Remand Redetermination at 2, Feb. 10, 2021, ECF No. 86 (“Def.-Inters.’
Br.”). Defendant the United States (“Government”) requests that the court sustain Commerce’s
Remand Results. Def.’s Resp. to Cmts. on Remand Redetermination at 2, Feb. 23, 2021, ECF No.
87 (“Def.’s Br.”). 	The court affirms Commerce’s Remand Results and enters judgment for the
Government.
BACKGROUND
The court set out the relevant legal and factual background of the proceedings in further
detail in its previous opinion, Fabuwood I, 469 F. Supp. 3d at 1376–82. Information relevant to
the instant opinion is set forth below.
On January 4, 2018, Commerce issued AD and CVD orders on certain hardwood plywood
from China. Certain Hardwood Plywood Products From the People’s Republic of China, 83 Fed.
Reg. 504 (Dep’t Commerce Jan. 4, 2018) (“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”) (collectively, “Orders”). The Orders excluded certain ready to assemble (“RTA”) kitchen
cabinets “packaged for sale for ultimate purchase by an end-user that, at the time of importation”
include all components and instructions required for assembly. AD Order at 513; CVD Order at
516.
Interested parties to AD and CVD investigations may request a scope ruling to clarify the
scope of an order by Commerce as it relates to a particular product by submitting an application
including a specific description of the product and the basis for the scope ruling request “to the
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extent reasonably available to the interested party.” 19 C.F.R. § 351.225(c). On April 6, 2018,
Petitioner-Masterbrand filed an application for a scope ruling with Commerce related to certain
RTA kitchen cabinet products. See Letter from Petitioner-Masterbrand to Sec’y of Commerce Re:
Certain Hardwood Plywood Products from the People’s Republic of China: Request for Scope
Ruling, P.R. 1. 	Petitioner-Masterbrand further amended this request on July 13, 2018, at
Commerce’s request after Commerce received comments from other interested parties. See Mem.
from A. Brings to The File, re: Certain Hardwood Plywood Products from the People’s Republic
of China: Petitioner-Masterbrand 2018 Scope Ruling Request (July 17, 2018), P.R. 45; Letter from
Wiley Rein LLP to Sec’y of Commerce, Re: Certain Hardwood Plywood from the People’s
Republic of China: Amendment to Request for Scope Ruling (July 13, 2018), P.R. 43 (“Amended
Scope Ruling Request”). Commerce accepted the Amended Scope Ruling Request and issued a
final scope ruling on September 7, 2018, finding that the products as described by Petitioner-
Masterbrand in the Amended Scope Ruling Request were within the scope of the Orders. Mem.
from J. Doyle to J. Maeder, re: Final Scope Ruling For Certain Hardwood Plywood Products From
the People’s Republic of China: Request by the Coalition for Fair Trade in Hardwood Plywood
and Masterbrand Cabinets, Inc. (Sept. 7, 2018), P.R. 71 (“Final Scope Ruling”).
On October 10, 2018, Fabuwood initiated the instant litigation challenging Commerce’s
Final Scope Ruling. Summons, ECF No.1; Compl., Nov. 9, 2018, ECF No. 10. On August 19,
2020, the court concluded that “Commerce failed to address the threshold question of whether
[Petitioner-Masterbrand’s Amended Scope Ruling Request] was specific enough to provide an
adequate basis for a scope ruling.” Fabuwood I, 469 F. Supp. 3d at 1383. Thus, the court remanded
the Final Scope Ruling to “Commerce for further explanation on whether the Amended Scope
Ruling Request met the regulatory requirements.” Id. at 1385. Commerce filed its Remand Results
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on January 11, 2021, concluding that, upon reexamination, Petitioner-Masterbrand’s Amended
Scope Request Ruling did not meet regulatory requirements. Remand Results at 31. Consolidated-
Plaintiff CNC Associates and Petitioner-Masterbrand filed comments on the Remand Results on
February 10, 2021. 	CNC’s Br.; Def.-Inter.’s Br. 	Neither Fabuwood, Cubitac, nor IKEA
commented on the Remand Results before the court. 	The Government replied in support of
Commerce’s redetermination on February 23, 2021. Def.’s Br.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c). The standard
of review in this action is set forth in 19 U.S.C. § 1516a(b)(1)(B)(i): “[t]he court shall hold
unlawful any determination, finding or conclusion found . . . to be unsupported by substantial
evidence on the record, or otherwise not in accordance with law.” 	The court also reviews the
determinations pursuant to remand “for compliance with the court’s remand order.” See Beijing
Tianhai Indus. Co. v. United States, 39 CIT __, __, 106 F. Supp. 3d 1342, 1346 (2015) (citations
omitted).
DISCUSSION
In its previous opinion, the court remanded “the scope ruling to Commerce for further
explanation on whether the Amended Scope Ruling Request met the regulatory requirements” for
providing a basis for Commerce to conduct a scope inquiry. Fabuwood I, 469 F. Supp. 3d at 1385.
This order followed the court’s conclusion that Commerce did not provide a reasonably discernible
rationale for accepting the Amended Scope Ruling Request or address the comments in opposition
to that request in its Final Scope Ruling. Id. at 1383–84. On remand, Commerce “revisited the
record and reevaluated the Amended Scope Ruling Request” and determined “that the Amended
Scope Ruling Request does not meet the requirements of 19 C.F.R. § 351.225(c)(1) because it
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suffers from several deficiencies that must be remedied before Commerce is able to evaluate the
products for which the requestor seeks a scope ruling.” 	Remand Results at 2. 	First, as in the
original scope inquiry, Commerce again determined that the Amended Scope Ruling provided a
sufficiently specific definition of the merchandise subject to the scope request based on the
information 	reasonably 	available 	to 	Petitioner-Masterbrand, 	including 	specific 	HTSUS
subheadings. Id. at 8–9, 17. Commerce distinguished other instances in which it had rejected a
scope request as deficient for lack of detailed product descriptions on the basis that the cases cited
by commenters “appear[ed] to involve scope ruling requests from parties that would likely have
been in possession of the types of information available to an importer or producer of the products
subject to the request” unlike Petitioner-Masterbrand, a non-importer. 	Id. at 10. 	Second,
Commerce re-examined the sufficiency of the supporting evidence underlying the Amended Scope
Ruling Request. 	Reversing its original position, Commerce determined that “the request is
insufficiently supported because: (1) [Petitioner-Masterbrand] stated that [they] had additional,
relevant information reasonably available to them . . . which they did not supply; or (2) they failed
to supply information showing that the products in support of their allegation were in production.”
Id. at 11. 	Furthermore, Commerce explained that “when available, first-hand statements are
preferable to second-hand information and, in this case, [were] not only reasonably available but
[were] also readily available.” 	Id. at 13; see also id. at 24–25 (explaining that the source for
information provided in the second-hand statements were not discernible to Commerce and could
have been provided). Additionally, Commerce noted that Petitioner-Masterbrand did not include
the public records they cited in support of their scope request, which Commerce concluded were
“reasonably available” and “necessary to the evaluation of the sufficiency of the scope inquiry.”
Id. at 13; see also id. at 26–27. Finally, Commerce concluded that Petitioner-Masterbrand did not
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adequately support or explain their reason for the scope request as to edge-banded plywood. Id.
at 13–14, 28. For these reasons, Commerce concluded that the Amended Scope Ruling Request
was deficient and unable to be a basis for Commerce’s scope inquiry. Id. at 14. Commerce also
noted that it would allow a further amended or revised scope ruling request apart from the instant
case or to submit a new scope request to be submitted. Id. at 14, 31.
No party disputes Commerce’s Remand Results. 	In its comments, CNC noted its
disagreement with Commerce’s determination that the product descriptions were sufficient in the
scope request, but that “it agrees with and supports Commerce’s conclusion that Petitioner-
Masterbrand’s request for a scope ruling was deficient in other critical respects and therefore did
not provide a sufficient basis for Commerce to issue a Final Scope Ruling.” CNC’s Br. at 1–2.
Petitioner-Masterbrand stated that they “disagree with Commerce’s conclusion and reasoning in
its final determination and believe that the scope request complied with Commerce’s regulations.”
Def.-Inters.’ Br. at 1. However, Petitioner-Masterbrand note their position that “the most effective
and efficient way for [them] to address the scope questions raised in the scope request is to refile
any needed scope request with the agency.” 	Id. 	Furthermore, Petitioner-Masterbrand note that
since the filing of the initial scope request, AD and CVD orders have been imposed directly on
RTA kitchen cabinets and hardwood plywood that has undergone minor processing -- the subject
of Petitioner-Masterbrand’s initial scope request. Id. at 1–2 (citing Wooden Cabinets and Vanities
and Components Thereof from the People’s Republic of China, 85 Fed. Reg. 22,126 (Dep’t
Commerce Apr. 21, 2020) (AD duty order); Wooden Cabinets and Vanities and Components
Thereof from the People’s Republic of China, 85 Fed. Reg. 22,134 (Dep’t Commerce Apr. 21,
2020) (CVD order)). No other parties submitted comments on the Remand Results. In response
to the comments filed, the Government contends that Commerce’s Remand Results can be
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sustained “because Commerce complied with the [c]ourt’s remand order and its determination is
supported by substantial evidence and otherwise in accordance with law.” Def.’s Br. at 2.
The court concludes that Commerce complied with its remand order as set forth in
Fabuwood I, 469 F. Supp. 3d at 1389. Commerce addressed and adequately explained the parties’
arguments regarding the sufficiency of the Amended Scope Ruling Request. 	No party contests
Commerce’s 	Remand 	Results, 	despite 	some 	disagreement 	with 	certain 	aspects 	of 	that
determination. 1 See CNC’s Br. at 1; Def.-Inters.’ Br. at 1–2. Therefore, the court need not address
the outstanding disagreements and concludes the Remand Results should be sustained as supported
by substantial evidence and in accordance with law.
CONCLUSION
For the reasons stated, there being no challenges to the Remand Results, and those results
being otherwise lawful and supported by substantial evidence, the court sustains Commerce’s
Remand Results. Judgment will enter accordingly in favor of Defendant.
SO ORDERED.
/s/ 	Gary S. Katzmann
Judge
Dated: May 27, 2021
New York, New York
1 The court agrees with the Government that Petitioner-Masterbrand’s statement in its comments
that it “does not intend to further challenge Commerce’s remand determination” constitutes waiver
of any claim to relief. See Def.’s Br. at 9; United States v. Am. Home Assurance Co., 40 CIT __,
__, 151 F. Supp. 3d 1328, 1361 (2016) (“[W]aiver is ordinarily evidenced by an intentional
relinquishment or abandonment of a known right or privilege” (citations and internal quotation
omitted)). Similarly, the court need not address CNC’s disagreement with Commerce’s product
specificity finding because CNC has not meaningfully challenged or briefed the issue and, in any
event, concedes agreement with Commerce’s conclusion about the deficiency of the Amended
Scope Ruling Request. See Cement Kiln Recycling Coal. v. EPA, 255 F.3d 855, 869 (D.C. Cir.
2001) (“A litigant does not properly raise an issue by addressing it in a cursory fashion with only
bare-bones arguments.” (citations and internal quotations omitted)); CNC’s Br. at 1–2.
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