Worldwide Door Components, Inc. v. United States

Slip Op. No. 21-115
UNITED STATES COURT OF INTERNATIONAL TRADE
WORLDWIDE DOOR COMPONENTS, INC.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
ALUMINUM EXTRUSIONS FAIR TRADE
COMMITTEE AND ENDURA PRODUCTS,
INC.,
Defendant-Intervenors
Before: Timothy C. Stanceu, Judge
Court No. 19-00012
OPINION AND ORDER
[Remanding for reconsideration an agency decision, issued in response to court
order, interpreting the scope of antidumping and countervailing duty orders on
aluminum extrusions]
Dated: September 14, 2021
John M. Foote, Kelley Drye & Warren LLP, of Washington, DC, for plaintiff.
Brian M. Boynton, Acting Assistant Attorney General, Civil Division, U.S.
Department of Justice, of New York, New York, for defendant. With him on the brief
were Jeanne E. Davidson, Director; Aimee Lee, Assistant Director; and Tara K. Hogan,
Assistant Director. Of counsel on the brief was Nikki Kalbing, Office of the Chief
Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of
Washington, D.C.
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Robert E. DeFrancesco, III, Wiley Rein, LLP, of Washington, D.C., for defendant-
intervenors. With him on the brief was Alan H. Price and Elizabeth S. Lee.
Stanceu, Judge: Plaintiff Worldwide Door Components, Inc. (“Worldwide”)
brought this action to contest a decision (the “Scope Ruling”) by the International Trade
Administration, U.S. Department of Commerce (“Commerce” or the “Department”)
that Worldwide’s imported products, “door thresholds” containing aluminum
extrusions, are within the scope of antidumping and countervailing duty orders on
aluminum extrusions from the People’s Republic of China (the “Orders”).
Before the court is the decision Commerce submitted in response to the court’s
opinion and order in Worldwide Door Components, Inc. v. United States, 44 CIT __, 466 F.
Supp. 3d 1370 (2020) (“Worldwide I”). In Worldwide I, the court remanded the contested
scope ruling to Commerce for reconsideration.
The court again issues a remand order. The court holds that the Department’s
new decision impermissibly relies on a factual finding or inference pertaining to
Worldwide’s door thresholds that is contradicted by certain evidence on the record and
unsupported by any specific evidence that Commerce cited. The court directs
Commerce to reconsider the impermissible finding or inference and then determine
anew whether Worldwide’s door thresholds qualify for a specific exclusion (the
“finished merchandise exclusion”) set forth in the Orders.
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I. BACKGROUND
Background on this litigation is presented in the court’s previous opinion and
summarized and supplemented herein. See Worldwide I, 44 CIT at __, 466 F. Supp. 3d. at
1372–73.
The decision contested in this litigation is Antidumping and Countervailing Duty
Orders on Aluminum Extrusions 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 (Int’l Trade Admin. Dec. 19, 2018) (AD Rem. P.R. Doc. 36; CVD Rem.
P.R. Doc. 37) (“Scope Ruling”). 1
Commerce issued the antidumping duty and countervailing duty orders
pertinent to this litigation (the “Orders”) in May 2011. Aluminum Extrusions from the
People’s Republic of China: Antidumping Duty Order, 76 Fed. Reg. 30,650 (Int’l Trade
Admin. May 26, 2011) (“AD Order”); Aluminum Extrusions From the People’s Republic of
China: Countervailing Duty Order, 76 Fed. Reg. 30,653 (Int’l Trade Admin. May 26, 2011)
(“CVD Order”).
1 All citations to documents from the administrative record are to public
documents. References cited as “P.R. Doc. __” are to documents on the original agency
record; references cited as “Rem. P.R. Doc. __” are to documents placed on the record
during the Department’s redetermination proceeding.
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Worldwide submitted a “Scope Ruling Request” to Commerce on August 3,
2017, describing eighteen “base models” of door thresholds. Letter from Baker &
McKenzie LLP to Sec’y of Commerce re: Request for a Scope Ruling Finding that Certain Fully
Assembled Door Thresholds from the People’s Republic of China are not Subject to the
Antidumping and Countervailing Duty Orders on Aluminum Extrusions from the People’s
Republic of China (P.R. Doc. 1) (Aug. 3, 2017) (“Scope Ruling Request”). During the scope
ruling proceeding, Worldwide submitted additional information in responses to
questionnaires from Commerce. Letter from Baker & McKenzie LLP to Sec’y of Commerce
re: Response to Supplemental Questionnaire on Scope Ruling Request for Worldwide Door
Thresholds (P.R. Doc. 10) (Nov. 7, 2017); Response from Baker & McKenzie LLP to Sec’y of
Commerce re: Response to Second Supplemental Questionnaire on Scope Ruling Request for
Worldwide Door Thresholds (P.R. Doc. 18) (Feb. 20, 2018); Letter from Baker & McKenzie LLP
to Sec’y of Commerce re: Response to Third Supplemental Questionnaire on Scope Ruling
Request for Worldwide Door Thresholds (P.R. Doc. 23) (June 18, 2018).
The Scope Ruling Request stated that each of the 18 base models “may be
imported in various lengths, colors and finishes.” Scope Ruling Request 2. It added that
these products “contain, in addition to aluminum extrusions, non-aluminum extrusion
components such as synthetic plastic polymers (e.g., polyvinyl chloride (‘PVC’),
polyethylene, polyurethane, polypropylene, and thermoplastic elastomer), wood and
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stainless steel.” Id. at 2–3. It also stated that “all contain some form of PVC, and most
contain other elements, such as steel screws and washers, plastic screw covers, wood,
and weather stripping, made from polyethylene, polyurethane, polypropylene, and
thermoplastic elastomer.” Id. at 3. The Scope Request described the 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.” Id.
Commerce issued the Scope Ruling on December 19, 2018, in response to
Worldwide’s Scope Ruling Request and the requests of Columbia Aluminum Products,
LLC and MJB Wood Group, Inc., each of which also sought a scope ruling on assembled
door thresholds. Scope Ruling 1. In the Scope Ruling, Commerce concluded that the
aluminum extrusion components within Worldwide’s door thresholds, and within
those of the other two requestors, are subject to the Orders but that the non-aluminum
components are not. Id. at 37–38.
Worldwide brought this action to contest the Scope Ruling on January 18, 2019.
Summons, ECF No. 1; Compl. (Feb. 19, 2019), ECF No. 13. The Aluminum Extrusions
Fair Trade Committee, which was the petitioner in the antidumping and countervailing
duty investigations resulting in the Orders, and Endura Products, Inc., a domestic
producer of door thresholds, are defendant-intervenors.
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In response to Worldwide’s motion for judgment on the agency record, the court
issued its Opinion and Order remanding the Scope Ruling to Commerce for
reconsideration. Worldwide I, 44 CIT at __, 466 F. Supp. 3d at 1380. Commerce filed its
decision in response to Worldwide I (the “Remand Redetermination”) on December 23,
2020. Final Results of Redetermination Pursuant to Ct. Remand (Dec. 23, 2020), ECF No.
64-1. (“Remand Redetermination”). Worldwide filed comments in opposition. Pl.’s
Comments in Opp’n to Remand Redetermination (Feb. 1, 2021), ECF No. 70
(“Worldwide’s Comments”). Defendant-intervenors filed comments supporting the
Remand Redetermination on the merits but also arguing that Worldwide failed to
exhaust administrative remedies when it did not file comments with Commerce on
draft remand results that Commerce circulated to the parties. Def.-Int.’s Comments on
Final Results of Redetermination Pursuant to Ct. Remand (Feb. 1, 2020), ECF No. 71
(“Def.-Int.’s comments”). Defendant filed a response to the comments, in which it too
argued that Worldwide failed to exhaust administrative remedies. Def.’s Resp. to
Comments on Remand Redetermination (Mar. 4, 2021), ECF No. 76 (“Def.’s Resp.”).
II. DISCUSSION
A. Jurisdiction and Standard of Review
The court exercises subject matter jurisdiction under section 201 of the Customs
Courts Act of 1980, 28 U.S.C. § 1581(c), which grants jurisdiction over civil actions
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brought under section 516A of the Tariff Act of 1930 (“Tariff Act”), 19 U.S.C. § 1516a.2
Among the decisions that may be contested according to Section 516A is a
determination of “whether a particular type of merchandise is within the class or kind
of merchandise described in an . . . antidumping or countervailing duty order.” Id.
§ 1516a(a)(2)(B)(vi). In reviewing the Scope Ruling, the court must set aside any
determination, finding, or conclusion found “to be unsupported by substantial evidence
on the record, or otherwise not in accordance with law.” Id. § 1516a(b)(1)(B)(i).
B. Exhaustion of Administrative Remedies
During the administrative proceedings following the court’s issuance of
Worldwide I, Commerce provided Worldwide and defendant-intervenors, on
November 20, 2020, draft remand results and invited the parties to submit comments
thereon by December 2, 2020. Remand Redetermination 10. Worldwide did not submit
comments to Commerce during this agency comment period.
On December 24, 2020, the day following the Department’s submission of the
Remand Redetermination, Worldwide filed a motion requesting that the court issue a
“narrow” order that would: (1) remand the Remand Redetermination back to
Commerce, (2) allow Worldwide five days to file comments on the Department’s draft
2 All citations to the United States Code are to the 2012 edition and all citations to
the Code of Federal Regulations are to the 2020 edition.
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remand results, and (3) direct Commerce to consider Worldwide’s comments in an
amended final remand redetermination. Pl.’s Mot. for Remand and Leave to File
Comments 2 (Dec. 24, 2020), ECF No. 65.
In its motion seeking a narrow remand, Worldwide explained the circumstances
under which it sought an opportunity to comment on the draft remand results.
Worldwide explained that “[o]n November 20, 2020, Plaintiff’s former counsel, Baker
McKenzie LLP, filed an appearance on behalf of Worldwide Door in the underlying
remand segment before Commerce” and that “[o]n November 30, 2020, two days prior
to the deadline for filing comments on the draft remand results, Worldwide notified
Baker McKenzie that it had retained Kelly Drye & Warren LLP to represent it in this
scope ruling litigation.” Id. at 1–2. The motion explained, further, that “owing to an
administrative oversight derivative of this transition between firms,” counsel
submitting the motion “did not enter an appearance in the remand case segment before
Commerce” and “did not receive actual or constructive notice that the draft results had
been published.” Id. at 2.
Defendant and defendant-intervenor opposed Worldwide’s motion for a narrow
remand order. Def.’s Opp’n to Pl.’s Mot. for Remand and Leave to File Comments
(Jan. 14, 2021), ECF No. 67; Def.-Int.’s Resp. to Pl.’s Mot. for Remand and Leave to File
Comments (Jan. 14, 2021), ECF No. 68. The court denied the plaintiff’s motion,
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concluding that “plaintiff’s motion does not present grounds justifying the interruption
of the orderly progression of the remand proceeding.” Order 2 (Jan. 19, 2021), ECF
No. 69. The court added that plaintiff, in its comments to the court on the Remand
Redetermination, “may present its reasons why it believes the court, in its discretion
and under the circumstances presented, should not decline to consider plaintiff’s
comments on the Final Remand Results for plaintiff’s failure to exhaust administrative
remedies.” Id. at 2–3. “Due to the substitution of counsel and the circumstances
presented in plaintiff’s motion, the court is ordering a ten-day extension of the filing
dates for the comments and the response thereto on the Final Remand Results.” Id. at 3.
In its comments on the Remand Redetermination, Worldwide raises two
arguments in support of the court’s not requiring exhaustion of administrative remedies
in these circumstances. It argues, first, that any argument raised by Worldwide would
have been futile. Worldwide’s Comments 15–16. Worldwide argues that in a remand
redetermination Commerce submitted in other litigation contesting the Scope Ruling at
issue here (“Columbia Remand Results”), Commerce rejected the “nearly identical”
concerns Worldwide is raising in this litigation. Id. at 16 (citing the Department’s
remand redetermination in response to the court’s opinion and order in Columbia
Aluminum Products, LLC v. United States, 44 CIT __, 470 F. Supp. 3d 1353 (2020)).
Plaintiff argues that “[a]s Worldwide Door raises nearly identical concerns, its
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comments before the agency would have been pretextual for the Department to reissue
the same explanations as in the Columbia Remand Results.” Id. Worldwide observes that
the Remand Redetermination Commerce filed in this proceeding “and Columbia Remand
Results are remarkably similar and, in certain sections, appear to be the same,
paragraph-by-paragraph.” Id. at 16 n.5. Plaintiff argues, second, that exhaustion of
administrative remedies should not be required when a pure legal issue is involved and
that such is the case here, where the issue is an interpretation of the scope language. Id.
at 17–18.
In its reply to comments, defendant argues, inter alia, that the futility exception
should be applied narrowly and only when the party already presented the arguments
to the agency in some form. Def.’s Resp. 10 (citations omitted). It argues, further, that
the exception should not be applied here because the arguments allegedly rejected
previously were made in a separate proceeding, not this one. Id. (citation omitted). As
to the “pure legal question” argument, defendant submits that the issue in this case, as
in all proceedings related to scope rulings, is fact-specific, involving facts associated
with Worldwide’s door thresholds. Id. at 11 (citations omitted). Defendant-intervenors,
similarly, argue that the court should require exhaustion of administrative remedies
due to Worldwide’s failure to comment on the draft remand results. Def.-Int.’s
Comments 17–19.
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The court concludes that it is appropriate to apply the doctrine of exhaustion of
administrative remedies in this circumstance. Were the court to excuse plaintiff’s
failure to exhaust administrative remedies in this situation, the court would be
considering the arguments Worldwide made in comments to the court that Worldwide
could have, and should have, allowed Commerce to consider in the first instance.
Moreover, the court declines to presume, based on comments made by a different party
in another proceeding, that it would have been futile for Worldwide to have made these
arguments to Commerce.
The next issue is the consequence the court should attach to plaintiff’s failure to
exhaust its administrative remedies. Defendant argues that “[i]n sum, Worldwide
neglected to comment during the remand proceeding and due to its failure to exhaust
administrative remedies, we request that the Court decline to consider the comments
Worldwide submitted to this Court and limit its review to whether Commerce complied
with the Remand Order.” Def.’s Resp. 12 (citation omitted). On that issue, defendant
argues that Commerce complied with the court’s remand order. Id. at 14.
The court agrees with the consequence defendant requests. Accordingly, the
court does not consider the arguments made in Worldwide’s comment submission to
the court and confines its judicial review to whether the Remand Redetermination
complies with the court’s order in Worldwide I.
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In Worldwide I, the court ruled that Commerce erred in declining to consider
whether Worldwide’s door thresholds could qualify for the finished merchandise
exclusion provided in the scope language of the Orders. The court held that in
submitting a redetermination, “Commerce now must give full and fair consideration to
the issue of whether this exclusion applies, upon making findings that are supported by
substantial record evidence.” Worldwide I, 44 CIT at __, 466 F. Supp. 3d at 1380.
For the reasons discussed below, the court rules that Commerce, although
complying with the court’s remand order in part by addressing the issue of whether the
finished merchandise exclusion applies, did not comply with it in full. As discussed in
this Opinion and Order, Commerce, contrary to the court’s direction, reached a factual
finding or inference on a material issue in this litigation that is contradicted by record
evidence. The court instructs Commerce to re-examine that factual issue and then reach
a new determination on whether the finished merchandise exclusion applies to
Worldwide’s imported door thresholds.
C. Methodology for Scope Determinations
According to the Department’s regulations, “in considering whether a particular
product is included within the scope of an order . . . the Secretary [of Commerce] will
take into account the following: (1) the descriptions of the merchandise contained in the
petition, the initial investigation, and the determinations of the Secretary (including
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prior scope determinations) and the [International Trade] Commission.” 19 C.F.R.
§ 351.225(k)(1). 3 The provision is not written so as to identify the only sources of
information Commerce is permitted to consider. As a fundamental matter, the
Department’s inquiry must center on the scope language of the antidumping or
countervailing duty order, for the Department’s role in issuing a scope ruling is to
interpret, not modify, the scope language. Duferco Steel, Inc. v. United States, 296 F.3d
1087, 1095 (Fed. Cir. 2002) (“Commerce cannot interpret an antidumping order so as to
change the scope of that order, nor can Commerce interpret an order in a manner
contrary to its terms.” (internal quotation marks and citation omitted)). Moreover, to be
sustained upon judicial review, the determination must be supported by the record
evidence considered on the whole. This necessarily requires consideration of the record
information contained in the scope ruling request, which ordinarily will include, inter
alia, “[a] detailed description of the product, including its technical characteristics and
uses.” 19 C.F.R. § 351.225(c)(1)(i).
3 If the “criteria” of § 351.225(k)(1) “are not dispositive, the Secretary will further
consider: (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).
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D. The Scope Language of the Orders and the Court’s Opinion and Order in
Worldwide I
The relevant scope language, which is the same in both Orders, applies generally
to “aluminum extrusions which are shapes and forms, produced by an extrusion
process, made from aluminum alloys having metallic elements corresponding to the
alloy series designations published by The Aluminum Association commencing with
the numbers 1, 3, and 6 (or proprietary equivalents or other certifying body
equivalents).” AD Order, 76 Fed. Reg. at 30,650; CVD Order, 76 Fed. Reg. at 30,653. Such
extrusions may be “produced and imported in a wide variety of shapes and forms,”
and, after extrusion, may be subjected to drawing and to further fabrication and
finishing. AD Order, 76 Fed. Reg. at 30,650; CVD Order, 76 Fed. Reg. at 30,654. The
scope language also provides that:
[S]ubject extrusions may be identified with reference to their end use, such
as fence posts, electrical conduits, door thresholds, carpet trim, or heat
sinks (that do not meet the finished heat sink exclusionary language
below). Such goods are subject merchandise if they otherwise meet the
scope definition, regardless of whether they are ready for use at the time
of importation.
AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654. In addition to a
good that is itself an aluminum extrusion, the scope language of the Orders, by
operation of a “subassemblies” provision, potentially brings within the scope of the
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Orders an assembled good that contains one or more aluminum extrusions as parts.
The pertinent scope language and context are as follows:
Subject aluminum extrusions may be described at the time of importation
as parts for final finished products that are assembled after importation,
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 components that are attached (e.g., by welding or
fasteners) to form subassemblies, i.e., partially assembled merchandise
unless imported as part of the finished goods “kit” defined further
below. [4] The scope does not include the non-aluminum extrusion
components of subassemblies or subject kits.
4 The “finished goods kit exclusion” reads as follows:
The scope also excludes finished goods containing aluminum extrusions
that are entered unassembled in a “finished goods kit.” A finished goods
kit is understood to mean a packaged combination of parts that contains,
at the time of importation, all of the necessary parts to fully assemble a
final finished good and requires no further finishing or fabrication, such
as cutting or punching, and is assembled “as is” into a finished product.
An imported product will not be considered a “finished goods kit” and
therefore excluded from the scope of the investigation merely by
including fasteners such as screws, bolts, etc. in the packaging with an
aluminum extrusion product.
Aluminum Extrusions from the People’s Republic of China: Antidumping Duty Order, 76 Fed.
Reg. 30,650, 30,651 (Int’l Trade Admin. May 26, 2011) (“AD Order”); Aluminum
Extrusions From the People’s Republic of China: Countervailing Duty Order, 76 Fed. Reg.
30,653, 30,654 (Int’l Trade Admin. May 26, 2011) (“CVD Order”). Worldwide does not
argue that the finished goods kit exclusion applies to its door thresholds.
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AD Order, 76 Fed. Reg. at 30,650–51; CVD Order, 76 Fed. Reg. at 30,654. The scope also
contains a “finished merchandise” exclusion for “finished merchandise containing
aluminum extrusions as parts that are fully and permanently assembled and completed
at the time of entry, such as finished windows with glass, doors with glass or vinyl,
picture frames with glass pane and backing material, and solar panels.” AD Order, 76
Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654. In the Scope Ruling, Commerce
concluded that it was unnecessary for it to consider whether Worldwide’s door
thresholds satisfied the requirements of the finished merchandise exclusion. See Scope
Ruling 33–34. Commerce reasoned that Worldwide’s door thresholds were expressly
identified in the scope language as “door thresholds” and as “parts for final finished
products that are assembled after importation, including, but not limited to . . . door
frames.” Id. at 33.
The court held in Worldwide I that Commerce misread the scope language in
concluding that the finished merchandise exclusion was irrelevant to its analysis.
Worldwide I, 44 CIT at __, 466 F. Supp. 3d at 1380. Commerce determined that each of
Worldwide’s imported door thresholds is “partially assembled merchandise” described
by the “subassemblies” provision because it contains an aluminum extrusion as a part
and because it is produced to be assembled into a door unit. Scope Ruling 33.
Commerce cited the scope language references to door thresholds and parts of doors in
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concluding that the finished merchandise exclusion was inapplicable. See id. at 33–34.
Commerce overlooked that the subject of the sentence of the scope language referring to
“door thresholds” is “subject extrusions” and, similarly, that the subject of the sentence
referring to “parts for final finished products . . . including . . . door frames” is,
similarly, “subject aluminum extrusions.” See AD Order, 76 Fed. Reg. at 30,650–51; CVD
Order, 76 Fed. Reg. at 30,654 (emphasis added). The latter sentence is confined
specifically to extrusions “described at the time of importation as parts for final finished
products,” and the following sentence clarifies that “[s]uch parts that otherwise meet the
definition of aluminum extrusions are included in the scope.” AD Order, 76 Fed. Reg. at
30,650–51; CVD Order, 76 Fed. Reg. at 30,654 (emphasis added). The scope language
defines aluminum extrusions as “shapes and forms, produced by an extrusion process.”
AD Order, 76 Fed. Reg. at 30,650; CVD Order, 76 Fed. Reg. at 30,653. The extruded
aluminum components in Worldwide’s door thresholds are described by these words,
but the assembled door thresholds are not. Logically, an article cannot be both an
“extrusion” and an assembly containing an extrusion as one part among several other
parts that are not aluminum extrusions. As Worldwide I observed, “according to the
uncontested facts, Worldwide’s door thresholds are not ‘aluminum extrusions’ at the
time of importation; rather, they are door thresholds that contain an aluminum
extrusion as a component in an assembly.” 44 CIT at __, 466 F. Supp. 3d at 1357.
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E. The Remand Redetermination Reaches a Finding or Inference that Is Unsupported
by Record Evidence
In the Remand Redetermination, Commerce disagreed that the finished
merchandise exclusion was relevant to its analysis. See Remand Redetermination 10–11.
Under protest, Commerce proceeded to address the issue of whether the finished
merchandise exclusion applied to Worldwide’s imported door thresholds. 5 Commerce
concluded that Worldwide’s door thresholds are “partially assembled merchandise”
and “intermediate products” for purposes of the subassemblies provision in the Orders.
Id. at 23. From the fact that Worldwide’s door thresholds are produced “for installation
within a door frame or residential or commercial building,” Commerce concluded that
“Worldwide’s door thresholds do not function on their own, but rather are incorporated
5 In protesting the court’s ruling, Commerce relies upon certain judicial decisions,
none of which involved the products at issue in this case. Commerce states in the
Remand Redetermination that “we believe that the Federal Circuit’s holdings in
Meridian and Whirlpool (which were not addressed by the Court in the Remand Order)
are instructive and support Commerce’s Final Scope Ruling.” Final Results of
Redetermination Pursuant to Ct. Remand 11 (Dec. 23, 2020), ECF No. 64-1 (“Remand
Redetermination”) (citing Meridian Prods., LLC v. United States, 890 F.3d 1272 (Fed. Cir.
2018) and Whirlpool Corp. v. United States, 890 F.3d 1302 (Fed. Cir. 2018)). These
decisions by the Court of Appeals for the Federal Circuit do not support the
Department’s position that it need not consider the finished merchandise exclusion if it
deems the good at issue to be a “subassembly.” See Remand Redetermination 15 (“Finally,
because we find the door thresholds are subassemblies under the general scope
language, we also find that they do not meet the exclusion criteria for ‘finished
merchandise’ and are therefore covered by the scope of the Orders.”).
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into a larger downstream product,” id., to which Commerce also referred as a
“completed door unit,” id. at 36.
In concluding that Worldwide’s door thresholds did not qualify for the finished
merchandise exclusion, Commerce also relied on certain other record evidence
submitted by the petitioner and Endura, as follows:
Moreover, the record evidence submitted by the petitioner and Endura
indicates that the completed door unit is highly customizable, and may
require additional cutting and machining of the door threshold. Door pre-
hangers may further customize door thresholds, along with other door
unit components, before final assembly of the door unit. Although door
thresholds are available in a variety of standard lengths, they are
generally manufactured to a longer length that is cut or machined to meet
the requirements of a specific order. The evidence submitted by the
petitioner and Endura also indicates that in the remodeling market
segment for door thresholds, thresholds can be sold as parts of pre-hung
door units or as replacement parts for finished door assemblies.
Thresholds sold by retailers in the remodeling segment often require
further cutting and sizing to meet the specific requirements of the door
assembly into which the thresholds are incorporated. Thus, we find that
the information submitted by the petitioner and Endura is consistent with
and supports our determination that Worldwide’s door thresholds are
not, in and of themselves, final finished products, but are, rather, an
intermediate product that is meant to be incorporated into a larger
downstream product, which is the finished merchandise.
Id. at 36–37 (footnotes omitted). The quoted language infers (but does not state
unambiguously) from the record that the particular door thresholds at issue in this
litigation, i.e., those described in Worldwide’s Scope Ruling Request, are so designed
and manufactured as to require cutting or machining prior to assembly of a door unit or
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other structure. But whether the court interprets the Department’s language to be a
finding of fact or an inference does not matter. In either case, it is contrary to certain
record evidence consisting of the description of Worldwide’s door thresholds in the
Scope Ruling Request, which described the 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.” Scope Ruling Request 3 (emphasis added). While identifying evidence
submitted by the petitioner and Endura referring generally to door thresholds,
Commerce does not bring to the court’s attention evidence that the articles actually at
issue in this litigation are so designed and manufactured as to require cutting or
machining prior to use. And if they are so designed and manufactured, then they are
not the articles described in the Scope Ruling Request.
In their comments on the Remand Redetermination, defendant-intervenors state
that “[w]hile door thresholds are available in a variety of standard lengths, they are
generally manufactured to a longer length that is cut or machined once the order-specific
requirements are known.” Def.-Int.’s Comments 10 (emphasis added) (citing their own
submissions on the record). Defendant-intervenors conclude from this statement that
“[b]ecause of the need to customize the threshold to match the many specific
requirements of the particular door assembly, it would not make economic sense as an
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import model to finish the customization of the threshold prior to importation and it is
likely that imported door threshold products generally are further cut to size either at
importers’ domestic facilities or at pre-hangers’ facilities.” Id. at 10–11 (emphasis
added) (citing their own submissions on the record). They add that “even thresholds
sold as replacement parts also generally must be cut to size to match the particular door
assembly they are going to be a part of.” Id. at 12 (emphasis added) (citing their own
submissions on the record).
Defendant-intervenors’ comments, and the evidence they cite, are not directed to
the specific issue the court identifies, which is whether Worldwide’s imported thresholds,
as identified in the Scope Ruling Request, are so designed and manufactured as to
require cutting or machining prior to use as a component in a door unit or other
structure. The evidence submitted by defendant-intervenors, as identified by
Commerce in the Remand Redetermination and by defendant-intervenors in their
comment submission, and as viewed against the record as a whole, does not constitute
substantial evidence to support a conclusion or inference that Worldwide’s door
thresholds are so designed and manufactured. But because Commerce relied, at least in
part, on this evidence to conclude that the finished merchandise exclusion was not
applicable to Worldwide’s door thresholds, the court must remand the agency’s
decision once again. The issue to which this evidence pertains, i.e., whether
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Worldwide’s door thresholds are designed and manufactured so as to require cutting or
machining prior to use, is directly relevant to the applicability of the finished
merchandise exclusion, which pertains to “finished merchandise containing aluminum
extrusions as parts that are fully and permanently assembled and completed at the time
of entry.” AD Order, 76 Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654 (emphasis
added).
F. Commerce Must Reconsider the Applicability of the Finished Merchandise
Exclusion Based on the Exemplars Stated Therein
The scope exclusion central to this case has a list of exemplars. AD Order, 76
Fed. Reg. at 30,651; CVD Order, 76 Fed. Reg. at 30,654 (listing as exemplars “finished
windows with glass, doors with glass or vinyl, picture frames with glass pane and
backing material, and solar panels”). In the Remand Redetermination, Commerce
reasoned, as to these exemplars, that “[w]e find that these product examples do not
constitute subassemblies within the meaning of the general scope language, but, rather,
are examples of fully and permanently assembled and completed products.” Remand
Redetermination 18. Commerce added that “[a]ccordingly, an assembled aluminum
extrusion door frame without glass could be considered a subassembly, and therefore
covered by the scope, thus falling short of the final finished door with glass which
would be excluded.” Id. at 18–19.
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In distinguishing Worldwide’s door thresholds from goods Commerce
considered to satisfy the finished merchandise exclusion, Commerce reasoned that “[a]
subassembly is merchandise which is designed for the sole purpose of becoming part of
a larger whole.” Id. at 24. Under the Department’s reasoning, the express mention of
the finished goods kit exclusion, but not the finished merchandise exclusion, in the
subassemblies language of the Orders supports its interpretation that a good Commerce
considers to be a “subassembly” within the meaning of the subassemblies provision
cannot qualify for the finished merchandise exclusion. Id. at 18 (“The lack of such
express language supports the conclusion that products that are included in the scope
because they satisfy the subassemblies language cannot also be excluded as finished
merchandise under the finished merchandise exclusion.”).
Commerce considered Worldwide’s door thresholds to be “subassemblies”
because they “do not function on their own, but rather are incorporated into a larger
downstream product.” Id. at 23. Commerce described that product as “an entire door
unit” and as “a completed door unit” that “requires additional parts, such as door
jambs, a door panel, glass, hinges, weatherstripping, and other hardware parts.” Id.
at 36.
The Remand Redetermination appears to overlook a critical distinction: the
exemplar in the finished merchandise exclusion explicitly refers to “doors with glass or
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Court No. 19-00012 	Page 24
vinyl,” not “finished door units” or “completed door units” consisting of assembled
combinations of a door, a door frame, and other parts such as door jambs,
weatherstripping, and necessary hardware. A “door” assembled from one or more
aluminum extrusions and components of vinyl or glass, is itself only a component of
what Commerce itself described as a finished or completed door unit. Like one of
Worldwide’s door thresholds, it is “designed for the sole purpose of becoming part of a
larger whole,” id. at 24. To interpret the words “doors with glass or vinyl” to refer only
to complete, assembled door units, i.e., those complete with doors, door frames, hinges,
weatherstripping, and all other necessary hardware and fittings, as Commerce
apparently did, is to adopt an interpretation that is contrary to the plain meaning of the
door exemplar as it appears in the scope language. The door exemplar refers to
“doors,” making no mention of door “units,” door “frames,” or complete assemblies
with hardware and other required components. The Department’s role in a scope
ruling is to interpret, not modify, the scope language, and it may not interpret an order
contrary to its terms. Duferco Steel, 296 F.3d at 1095 (Fed. Cir. 2002).
Under the Department’s analysis, only goods that are not “designed for the sole
purpose of becoming part of a larger whole,” Remand Redetermination 24, can satisfy the
finished merchandise exclusion, but this rationale is contrary to the terms by which that
exclusion is expressed in the scope language. Two of the exemplars—the
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Court No. 19-00012 	Page 25
aforementioned door exemplar and the “finished windows with glass” exemplar—are
specifically designed for the sole purpose of becoming part of a larger whole. Even the
products Commerce itself considered to satisfy the finished merchandise exclusion, i.e.,
a complete, assembled door unit, and a “final finished door with glass,” id. at 19, do not
“function on their own,” id. at 23, and cannot function until incorporated into a wall or
other part of a building. The Remand Redetermination does not offer a plausible
explanation of why the articles mentioned in the “door” and “window” exemplars of
the finished merchandise exclusion satisfy that exclusion but that Worldwide’s door
thresholds, as described in the Scope Ruling Request, do not.
III. CONCLUSION AND O RDER
In conclusion, Commerce did not comply fully with the court’s instruction in
Worldwide I with respect to the finished merchandise exclusion. Worldwide I, 44 CIT at
__, 466 F. Supp. 3d at 1380 (“Commerce now must give full and fair consideration to the
issue of whether this exclusion applies, upon making findings that are supported by
substantial record evidence.” (emphasis added)). On remand, Commerce must undertake
this task again. After reaching a finding from the record evidence 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, Commerce must consider that finding in
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deciding anew whether the finished merchandise exclusion applies to the specific door
thresholds at issue in this litigation.
Therefore, upon consideration of the Remand Redetermination and all papers
and proceedings had herein, and upon due deliberation, it is hereby
ORDERED that the Remand Redetermination is remanded to Commerce for
reconsideration in light of this Opinion and Order; it is further
ORDERED that Commerce, within 90 days from the date of issuance of this
Opinion and Order, shall submit a second redetermination upon remand (“Second
Remand Redetermination”) that complies with this Opinion and Order; it is further
ORDERED that plaintiff and defendant-intervenors shall have 30 days from the
filing of the Second Remand Redetermination in which to submit comments to the
court; and it is further
ORDERED that should plaintiff or defendant-intervenors submit comments,
defendant shall have 15 days from the date of filing of the last comment to submit a
response.
/s/ Timothy C. Stanceu
Timothy C. Stanceu, Judge
Dated: September 14, 2021
New York, New York
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