Slip Op. 23-

UNITED STATES COURT OF INTERNATIONAL TRADE 

BRAL CORPORATION,

Plaintiff,

v.

UNITED STATES, 

Defendant.

Before: Jennifer Choe-Groves, Judge

Court No. 20-00154

OPINION AND ORDER

[Denying Plaintiff’s motion for summary judgment and denying Defendant’s 

cross-motion for summary judgment.]

Dated: March 20, 2023

Robert Kevin Williams, Clark Hill PLC, of Chicago, IL, for Plaintiff BRAL 

Corporation.

Justin R. Miller, Attorney-in-Charge, International Trade Field Office, Aimee Lee,

Assistant Director, and Alexander J. Vanderweide, Senior Trial Counsel,

Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New 

York, N.Y., for Defendant United States. With them on the brief were Brian M. 

Boynton, Principal Deputy Assistant Attorney General, and Patricia M. McCarthy,

Director. Of counsel on the brief was Sabahat Chaudhary, Office of the Assistant 

Chief Counsel, U.S. Customs and Border Protection. 

Choe-Groves, Judge: Plaintiff BRAL Corporation (“Plaintiff” or “BRAL”)

filed this action pursuant to 28 U.S.C. § 1581(a) contesting the denial of its protests

by U.S. Customs and Border Protection (“Customs”) concerning the assessment of 
Court No. 20-00154 Page 2

duties on twelve entries of plywood imported from the People’s Republic of China

(“China”). See Compl. at 1, ECF No. 7. Before the Court is Plaintiff’s Motion for 

Summary Judgment (“Plaintiff’s Motion”). Pl.’s Mot. Summary J., ECF No. 27. 

Also before the Court is Defendant’s Cross-Motion for Summary Judgment and 

Response in Opposition to Plaintiff’s Motion for Summary Judgment

(“Defendant’s Cross-Motion”). Def.’s Cross-Mot. Summary J. Resp. Opp’n Pl.’s 

Mot. Summary J. (“Def.’s Cross-Mot.”), ECF No. 28. Plaintiff filed Plaintiff’s 

Response in Opposition to Defendant’s Cross-Motion for Summary Judgment. 

Pl.’s Resp. Opp’n Def.’s Cross-Mot. Summary J., ECF No. 29. Defendant filed 

Defendant’s Reply to Plaintiff’s Opposition to Defendant’s Cross-Motion for 

Summary Judgment. Def.’s Reply Pl.’s Opp’n Def.’s Cross-Mot. Summary J., 

ECF No. 30. For the following reasons, the Court denies Plaintiff’s Motion for 

Summary Judgment and denies Defendant’s Cross-Motion for Summary Judgment.

PROCEDURAL BACKGROUND

The Court presumes familiarity with the procedural history and recounts 

briefly the procedural history relevant to this opinion. See BRAL Corp. v. United 

States, 45 CIT __, __, 527 F. Supp. 3d 1358, 1360 (2021). This action concerns 

twelve entries of plywood imported from China by Plaintiff between 2017 and 

2018. See Summons at 1–3, ECF No. 1; Compl. at 1. Plaintiff filed Protest No. 

4101-19-100494 challenging the liquidation of three entries. Protest No. 4101-19-
Court No. 20-00154 Page 3

100494, ECF No. 6-1. Plaintiff filed Protest No. 4101-19-100808 challenging the 

liquidation of nine entries. Protest No. 4101-19-100808, ECF No. 6-2. Both 

protests alleged that the subject plywood imported from China had a latent defect 

that caused a melamine coating to separate from the subject plywood, warranting a 

reduced value due to defective merchandise pursuant to 19 C.F.R. § 158.12(a). Id.;

Protest No. 4101-19-100494. Customs denied both protests on March 5, 2020. 

Protest No. 4101-19-100494; Protest No. 4101-19-100808; see also Summons at 3.

UNDISPUTED FACTS

The Parties have submitted separate statements of undisputed material facts. 

Pl.’s R. 56.3 Statement Material Facts Not in Dispute (“Pl.’s SMF”), ECF No 27-2;

Def.’s R. 56.3 Statement Undisputed Material Facts (“Def.’s SMF”), ECF No. 28. 

Upon review of Plaintiff’s Rule 56.3 Statement of Material Facts Not in Dispute, 

Defendant’s Rule 56.3 Statement of Undisputed Material Facts, and supporting 

exhibits, the Court finds the following undisputed material facts:

Plaintiff imported the subject plywood from a Chinese manufacturer. Pl.’s 

SMF ¶ 3 at 1; Def.’s SMF ¶¶ 12 at 12; Def.’s Resp. Pl.’s R. 56.3 Statement 

Material Facts Not in Dispute (“Def.’s SMF Resp.”) ¶ 3 at 1, ECF No. 28; Pl.’s 

Resp. Def.’s R. 56.3 Statement Material Facts Not in Dispute (“Pl.’s SMF Resp.”) 

¶¶ 12 at 1, ECF No. 29-1. The subject plywood consisted of seven-ply eucalyptus 

with the layers adhered by glue applied by heat and pressure, a hardwood face, and 
Court No. 20-00154 Page 4

a melamine coating applied to the face by an exterior glue. Pl.’s SMF ¶ 2 at 1; 

Def.’s SMF ¶ 1 at 1; Def.’s SMF Resp. ¶ 2 at 1; Pl.’s SMF Resp. ¶ 1 at 1. The 

Chinese manufacturer made, laminated, applied a hardwood face, and sanded the 

plywood to the desired dimensions. Def.’s SMF ¶ 2 at 12; Pl.’s SMF Resp. ¶ 2 at 

1. The Chinese manufacturer used a subcontractor for additional laminating and 

gluing the melamine coating to the face of the plywood. Def.’s SMF ¶ 2 at 12;

Pl.’s SMF Resp. ¶ 2 at 1. Plaintiff expected that the glue used to apply the 

melamine coating would be a waterproof phenolic resin, but the specific type of 

glue used was unknown to the Parties. Def.’s SMF ¶¶ 34 at 2; Pl.’s SMF Resp. 

¶¶ 34 at 1. The subject plywood was produced in three sizes: 48” x 98” x 3⁄4” 

(“48” sheets”), 15” x 98” x 3⁄4” (“15” panels”), and 11” x 98” x 3⁄4” (“11” panels”). 

Pl.’s SMF ¶ 1 at 1; Def.’s SMF ¶ 8 at 3; Def.’s SMF Resp. ¶ 1 at 1; Pl.’s SMF 

Resp. ¶ 8 at 1; see Pl’s SMF at Ex. A (“Sample Invoices”), ECF No. 27-2. After 

importation, Plaintiff sold the subject plywood to Transglobal Door, Inc. 

(“Transglobal”) for use in the manufacturing of aftermarket roll-up doors and door 

panels for trucks, trailers, commercial vehicles, and delivery vehicles. Pl.’s SMF 

¶¶ 35 at 1; Def.’s SMF ¶ 6 at 2; Def.’s Resp. ¶¶ 35 at 12; Pl.’s SMF Resp. ¶ 6

at 1.
Court No. 20-00154 Page 5

Development of the Chinese-made plywood began in approximately 2015 as 

a replacement for more expensive domestic plywood previously used by 

Transglobal in the manufacture of aftermarket roll-up doors and door panels. Pl.’s 

SMF ¶ 6 at 2; Def.’s SMF ¶ 12 at 3; Def.’s SMF Resp. ¶ 6 at 2; Pl.’s SMF Resp. 

¶ 12 at 2. The development process involved the testing of a variety of plywood 

samples of various components and woods, including poplar, birch, and pine, 

produced by the Chinese manufacturer. Def.’s SMF ¶ 14 at 4; Pl.’s SMF Resp. at 

¶ 14 at 2. Testing occurred over a six-month period and included subjecting the 

plywood samples to hundreds of hours in a salt-spray cabinet, hanging samples 

outside for multiple months, and manufacturing the samples into roll-up doors and 

installing the doors on trucks used by community organizations to gauge 

performance. Pl.’s SMF ¶¶ 911 at 2; Def.’s SMF ¶ 14 at 4; Def.’s Resp. ¶ 911

at 23; Pl.’s SMF Resp. ¶ 14 at 2. A sample was selected by the end of 2016 for 

production, though Plaintiff and Transglobal continued to import and test 

alternative samples of Chinese-made plywood after importation of the subject 

eucalyptus plywood began. Def.’s SMF ¶¶ 1516 at 45; Pl.’s SMF Resp. 

¶¶ 1516 at 2.

Plaintiff did not open or inspect containers of the subject plywood when the 

containers arrived in the United States and forwarded the containers to 
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Transglobal. Def.’s SMF ¶ 18 at 5; Pl.’s SMF Resp. ¶ 18 at 2. Transglobal 

inspected the subject plywood for correct thickness and size but did not test 

samples of the subject plywood in a salt-spray cabinet or for quality of glue. Def.’s 

SMF ¶ 18 at 5; Pl.’s SMF Resp. ¶ 18 at 2. Manufacturing replacement roll-up

doors and door panels required Transglobal to drill into the subject plywood’s 

laminated face and to rivet hardware onto the plywood. Def.’s SMF ¶ 19 at 5; Pl.’s 

SMF Resp. ¶ 19 at 3. Roll-up doors and door panels were measured, inspected for 

surface defects, packaged, and shipped to customers within five days of 

completion. Def.’s SMF ¶ 19 at 5; Pl.’s SMF Resp. ¶ 19 at 3. Installation was 

done by the individual customer. Def.’s SMF ¶ 19 at 5; Pl.’s SMF Resp. ¶ 19 at 3. 

Transglobal offered a warranty on the roll-up doors and door panels manufactured

with the subject plywood covering any delamination issue that occurred within one 

year of installation. Def.’s SMF ¶ 20 at 5; Pl.’s SMF Resp. ¶ 20 at 3.

Transglobal began selling roll-up doors and door panels made from Chinese 

manufactured plywood in January 2017. Def.’s SMF ¶ 21 at 6; Pl.’s SMF Resp. 

¶ 21 at 3. In approximately July 2017, Transglobal began using the subject 

plywood at issue in this litigation to manufacture roll-up doors and door panels. 

Pl.’s SMF ¶ 14 at 2; Def.’s SMF Resp. ¶ 14 at 3. In May 2017, Transglobal began 

to receive warranty claims from customers complaining that melamine faces were 

detaching from roll-up doors and door panels. Pl.’s SMF ¶ 16 at 3; Def.’s SMF 
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¶¶ 2223 at 6; Def.’s SMF Resp. ¶ 16 at 3; Pl.’s SMF Resp. ¶¶ 2223 at 3; see also

Pl.’s SMF ¶ 15 at 3; Def.’s SMF Resp. ¶ 15 at 3. Between May 9, 2017 and 

February 3, 2021, Transglobal received 161 warranty claims for delaminated doors 

and 171 warranty claims for delaminated panels. Def.’s SMF ¶ 23 at 6; Pl.’s SMF 

Resp. ¶ 23 at 3. The manufacturing of the roll-up doors and door panels associated 

with the warranty claims used 1,298 11” and 15” panels and 4322⁄3 48” sheets. 

Def.’s SMF ¶ 23 at 6; Pl.’s SMF Resp. ¶ 23 at 3. Transglobal speculated that the 

allegedly defective plywood began to arrive in the United States in May or July 

2017 and was manufactured into roll-up doors and door panels that were first sold 

in October or November 2017. Def.’s SMF ¶ 22 at 6; Pl.’s SMF Resp. ¶ 22 at 3. 

Transglobal did not become aware of problems with the subject plywood until 

March or April 2018. Def.’s SMF ¶ 24 at 6; Pl.’s SMF Resp. ¶ 24 at 3. 

Transglobal continued to manufacture and sell roll-up doors and door panels made 

with Chinese-manufactured plywood until as late as October 2018. Def.’s SMF 

¶ 25 at 6; Pl.’s SMF Resp. ¶ 25 at 3.

There were neither purchase orders for the subject plywood nor documents 

or communications from Plaintiff to the Chinese manufacturer providing the 

specific quantity and sizes or the requirements and components of the subject 

plywood. Def.’s SMF ¶ 10 at 3; Pl.’s SMF Resp. ¶ 10 at 2. The twelve entries at 

issue in this litigation included 7,889 48” sheets, 30,238 15” panels, and 5,616 11” 
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panels. Def.’s SMF ¶ 32 at 8; Pl.’s SMF Resp. ¶ 32 at 3. Transglobal used 

5,900.86 48” sheets, 10,334.44 15” panels, and 680.30 11” panels to manufacture 

roll-up doors or door panels. Def.’s SMF ¶ 32 at 8; Pl.’s SMF Resp. ¶ 32 at 3.

Plaintiff and Transglobal believed that the delamination issue was the result 

of Plaintiff’s Chinese manufacturer or its subcontractor changing to a lower quality 

glue to attach the melamine coating to the subject plywood that became ineffective 

after being subjected to the freezing temperatures of winter and the subsequent 

thaw and drying of spring. Def.’s SMF ¶ 26 at 67; Pl.’s SMF Resp. ¶ 26 at 3. An 

undated “Letter of Statement” from Linyi Feixian Plywood Factory1 to Transglobal 

conceded that Linyi Feixian Plywood Factory had determined that “the glue 

supplier” had lowered the quality of glue due to increasing costs. Pl.’s SMF ¶ 18 

at 3; Def.’s SMF ¶ 27 at 7; Def.’s SMF Resp. ¶ 18 at 4; Pl.’s SMF Resp. ¶ 27 at 3; 

Pl.’s SMF at Ex. L (“Linyi Feixian Plywood Factory’s Letter of Statement”). 

Plaintiff ceased to import plywood from China in June 2018. Def.’s SMF ¶ 28 at

7; Pl.’s SMF Resp. ¶ 28 at 3.

Though the Chinese manufacturer offered to replace the delaminated 

plywood, which is customary in the industry, neither Plaintiff nor Transglobal 

requested replacement plywood. Def.’s SMF ¶ 29 at 7–8; Pl.’s SMF Resp. ¶ 29 at

1 It is not clear from the evidence before the Court if Linyi Feixian Plywood 

Factory is the Chinese manufacturer of the plywood.
Court No. 20-00154 Page 9

3. Plaintiff and Transglobal did not recover any costs from and did not file a legal 

action against the Chinese manufacturer or the supplier of the glue. Def.’s SMF 

¶ 30 at 8; Pl.’s SMF Resp. ¶ 30 at 3. The subject plywood was not insured and 

Transglobal did not make a claim to its product liability insurer for the products 

manufactured with the subject plywood. Def.’s SMF ¶ 31 at 8; Pl.’s SMF Resp. 

¶ 31 at 3. At the direction of counsel, Plaintiff and Transglobal did not attempt to 

resell any of the unused subject plywood. Def.’s SMF ¶ 36 at 9; Pl.’s SMF Resp. 

¶ 36 at 3. Plaintiff claimed an 18 percent salvage value based on the value 

provided to Transglobal’s President, Mark Schroeder, by Transglobal’s domestic 

lumber supplier for the cost to purchase non-grade marine lumber for the making 

of crates and skids. Def.’s SMF ¶ 34 at 8–9; Pl.’s SMF Resp. ¶ 34 at 3. Schroeder 

later conceded that the wholesale or retail salvage value of the imported plywood 

would likely be 2530 percent higher today. Def.’s SMF ¶ 35 at 9; Pl.’s SMF 

Resp. ¶ 35 at 3; Def.’s Cross-Mot. at Ex. C Deposition Transcript of Mark 

Schroeder (“Schroeder Depo.”) at 166–67, ECF No. 28-3.

Customs liquidated the entries and appraised the subject plywood on the 

basis of transaction value pursuant to 19 U.S.C. § 1401a(a)(1)(A), assessing an ad

valorem duty rate. Pl.’s SMF ¶ 22 at 3; Def.’s SMF Resp. ¶ 22 at 5. Plaintiff 

protested the liquidation, arguing that the appraisal should be made with an 

allowance for the value of the defective merchandise pursuant to 19 C.F.R. 
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§ 158.12(a). Pl.’s SMF ¶ 23 at 4; Def.’s SMF Resp. ¶ 23 at 5; Protest No. 4101-

19-100494; Protest No. 4101-19-100808. Customs denied Plaintiff’s protests.

Pl.’s SMF ¶ 27 at 4; Def.’s SMF Resp. ¶ 27 at 6.

JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(a). The Court will 

grant summary judgment if the movant shows that there is no genuine dispute as to 

any material fact and the movant is entitled to judgment as a matter of law. USCIT 

R. 56(a). To raise a genuine issue of material fact, a party cannot rest upon mere 

allegations or denials and must point to sufficient supporting evidence for the 

claimed factual dispute to require resolution of the differing versions of the truth at 

trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986); Barmag 

Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 835–36 (Fed. 

Cir. 1984).

LEGAL STANDARD

Plaintiff entered the subject plywood based on transaction value pursuant to 

19 U.S.C. § 1401a(a)(1)(A). Compl. at 3. Plaintiff’s Complaint argues that 

Customs erred in denying Plaintiff’s protests and in not granting an allowance 

pursuant to 19 C.F.R. § 158.12(a) reducing the appraised value of the subject 

plywood to 18 percent of the original value. Id. at 3. 19 C.F.R. § 158.12(a) 

provides that: “[m]erchandise which is subject to ad valorem or compound duties 
Court No. 20-00154 Page 11

and found by the port director to be partially damaged at the time of importation 

shall be appraised in its condition as imported, with an allowance made in the 

value to the extent of the damage.” 19 C.F.R. § 158.12(a). The U.S. Court of 

Appeals for the Federal Circuit (“CAFC”) has recognized that latent manufacturing 

defects can qualify as “‘damage’ for purposes of the regulation.” Volkswagen of 

Am., Inc. v. United States, 540 F.3d 1324, 1331 (Fed. Cir. 2008); see also Saab 

Cars USA, Inc. v. United States, 434 F.3d 1359, 1371 (Fed. Cir. 2006). In order to 

claim an allowance under 19 C.F.R. § 158.12(a), “an importer must: (1) show that 

it contracted for ‘defect-free’ merchandise; (2) link the defective merchandise to 

specific entries; and (3) prove the amount of the allowance for each entry.” Saab 

Cars USA, Inc., 434 F.3d at 136465 (citing Samsung Elecs. Am., Inc. v. United 

States (“Samsung Electronics I”), 106 F.3d 376, 37980 (Fed. Cir. 1997) and 

Samsung Elecs. Am., Inc. v. United States (“Samsung Electronics II”), 195 F.3d 

1367, 136869 (Fed. Cir. 1999)).

DISCUSSION

Plaintiff argues that it can satisfy each of the required elements for an 

allowance under 19 C.F.R. § 158.12(a). Pl.’s Mem. Points & Auth. Supp. Pl.’s 

Mot. Summary J. (“Pl.’s Br.”) at 47, ECF No. 27-1. Defendant contends that 

Plaintiff is unable to satisfy any of the requirements for an allowance under 19 
Court No. 20-00154 Page 12

C.F.R. § 158.12(a) and that this action should be dismissed. Def.’s Mem. Supp. 

Cross-Mot. Summary J. Resp. Opp’n to Pl.’s Mot. Summary J. (“Def.’s Br.”) at 

1225, ECF No. 28.

I. Contracted for Defect-Free Merchandise

The first element of 19 C.F.R. § 158.12(a) requires Plaintiff to establish that 

it contracted for defect-free merchandise. Though no written contract has been 

provided detailing the specifications desired by Plaintiff for the subject plywood, 

Plaintiff contends that the Court can infer from the facts of the case that Plaintiff 

expected the Chinese manufacturer to provide defect-free plywood. Pl.’s Br. at 5–

6; Pl.’s Resp. Opp’n Def.’s Cross-Mot. Summary J. (“Pl.’s Resp.”) at 2, ECF No. 

29. Plaintiff argues that the process of selecting a specific Chinese manufacturer 

and plywood involved testing and the installation of roll-up doors made with the 

sample plywood on vehicles to monitor performance under actual environmental 

conditions. Pl.’s Br. at 56. Plaintiff asserts that orders of larger quantities of 

plywood from the Chinese manufacturer following these tests relied on an

expectation that subsequent plywood would meet the same standards as the 

samples. Id. at 6.

Defendant argues that no documents exist providing product specifications 

communicated between Plaintiff, Transglobal, and the Chinese manufacturer. 

Def.’s Br. at 1415. Defendant contends that even after Plaintiff and Transglobal 
Court No. 20-00154 Page 13

completed testing of the plywood samples, there was no memorialization in writing 

that future shipments would exactly match those tested in every specification. Id.

at 1516. Defendant contends that Plaintiff’s testing of plywood samples was not 

conducted under all actual environmental conditions and did not include exposure 

to a winter freeze or spring thaw. Def.’s SMF Resp. ¶ 10 at 23.

Plaintiff asserts that the Court should infer that Plaintiff contracted for 

defect-free merchandise when the samples were tested and orders were placed 

based on those tests. Plaintiff essentially asks the Court to determine if a contract 

for defect-free merchandise existed between Plaintiff and the Chinese 

manufacturer based on an implied contract not memorialized in writing. “Whether 

a contract exists is a mixed question of law and fact.” See Barron Bancshares, Inc. 

v. United States, 366 F.3d 1360, 1368 (Fed. Cir. 2004). In this case, a genuine 

issue of material fact exists regarding whether there was a contract, implied or 

otherwise, for defect-free plywood. In Samsung Electronics America, Inc. v. 

United States (“Samsung I”), 106 F.3d 376 (Fed. Cir. 1997), the CAFC noted in 

considering whether a contract for defect-free goods existed that “[i]n interpreting 

a written contract, the intent of the parties, for instance as evidenced by the written 

instruments forming the contract, is of primary concern.” Id. at 379. Giving 

similar weight to the intentions of the Plaintiff and the Chinese manufacturer in

this case and considering their actions, the facts are disputed as to whether Plaintiff 
Court No. 20-00154 Page 14

and the Chinese manufacturer intended for the subject plywood to conform to 

certain specifications, to remain unchanged throughout the term of the agreement, 

and to be defect-free. The Parties agree that the subject merchandise was 

developed according to certain specifications, was tested extensively, and was 

produced based on samples. Pl.’s SMF ¶ 9–11 at 2; Def.’s SMF ¶¶ 14–16 at 4–5;

Def.’s Resp. ¶¶ 911 at 23; Pl.’s SMF Resp. ¶¶ 14–16 at 2. The Parties disagree, 

however, as to whether an agreement existed that the subject merchandise would 

be manufactured according to certain specifications. Thus, because a genuine issue 

of material fact exists as to whether Plaintiff contracted for defect-free goods, 

summary judgment is not warranted for either Party on the first element.

II. Linking Defective Merchandise to Specific Entries

The second element of 19 C.F.R. § 158.12(a) requires Plaintiff to link the 

defective merchandise to specific entries. Plaintiff contends that it is not required 

to link specific products to specific entries because Plaintiff alleges that all 

plywood imported after May 2017 was defective. Pl.’s Br. at 6. Plaintiff claims 

that record evidence shows that the only plywood Plaintiff imported was the 

subject plywood and the quantity of that plywood remaining after production was 

halted. Id.; Pl.’s SMF at Ex. Q (“Item Stock Inquiry Reports”). Plaintiff argues 

that all of the plywood included in the protested entries was linked to the defect. 

Pl.’s Br. at 6.
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Defendant argues that Plaintiff has not connected any of the alleged defects 

to the specific entries covered by Plaintiff’s protests. Def.’s Br. at 1723. 

Defendant alleges that Plaintiff imported five shipments of plywood from China 

prior to the first entry covered by Plaintiff’s protests. Id. at 1820 (citing Item 

Stock Inquiry Reports). Defendant contends that Plaintiff received two shipments 

after the first entry covered by Plaintiff’s protests that were not included in 

Plaintiff’s protests. Id. at 20 (citing Item Stock Inquiry Reports). Defendant 

argues that Plaintiff has provided no explanation as to why allowances under 

Section 158.12(a) were not sought for these entries if all entries after May 2017 

were presumed to be defective. Id. at 20–21. Defendant asserts that the number of 

warranty claims received by Plaintiff complaining of delamination was relatively 

small in comparison to the amount of plywood covered by the protested entries. 

Id. at 2122; see Def.’s Cross-Mot. at Ex. H (“Warranty Claims”). Defendant 

notes that a small number of delamination complaints pre-dated the entries covered 

by Plaintiff’s protests or fell within a period in which it was unlikely that products 

made from the subject plywood were available for market. Id. at 22.

Section 158.12(a) requires a party seeking an allowance to show a link 

between the defective merchandise and specific entries. Saab Cars USA, Inc., 434 

F.3d at 136364. Because Customs appraises the value of entries individually at 
Court No. 20-00154 Page 16

the time of importation and assesses duties based on the appraised value before 

liquidation, establishing a link is necessary for appropriate refunds to be assigned 

to duties made. Samsung Electronics II, 195 F.3d at 1371.

In Fabil Manufacturing Co. v. United States (“Fabil”), 237 F.3d 1335 (Fed. 

Cir. 2001), the CAFC considered a similar question of whether a party alleging that 

entries were defective in their entirety must link specific defective merchandise to 

specific entries. Fabil, 237 F.3d at 1339. Fabil involved jackets bearing a 

corporate logo that were ordered to be “machine washable.” Id. at 1336. After the 

jackets were imported, Fabil discovered a latent defect that caused the logos to 

disintegrate and their colors to run when washed. Id. Because of the defect, 

Fabil’s customers returned the jackets, which were disposed of at a loss. Id. The 

CAFC held that under the facts of Fabil, there was no reason to require the plaintiff 

“to tie the allegedly defective merchandise to any entries or group of entries 

without which proof the Court (and Customs) cannot determine whether contested 

merchandise actually contained a defect at the time of ‘importation.’” Id. at 1339 

(internal quotation and edit omitted).

Similar to Fabil, Plaintiff alleges that all of the imported merchandise was 

defective. Pl.’s Br. at 6. The Parties agree that a portion of the roll-up doors and 

door panels manufactured with the subject plywood were the subject of warranty 

claims or delamination complaints. See Pl.’s SMF ¶ 16 at 3; Def.’s SMF ¶¶ 2223
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at 6; Def.’s SMF Resp. ¶ 16 at 3; Pl.’s SMF Resp. ¶¶ 2223 at 3; see Pl.’s SMF 

¶ 15 at 3; Def.’s SMF Resp. ¶ 15 at 3. The Parties dispute whether all of the 

plywood was defective. Because genuine issues of material fact exist as to 

whether all of the subject merchandise was defective, the Court cannot determine 

as a matter of law that Plaintiff connected the allegedly defective plywood to the 

subject entries. Summary judgment is not appropriate for either Party on the 

second element of Section 158.12(a).

III. Amount of Allowance for Each Entry

The third element of 19 C.F.R. § 158.12(a) requires Plaintiff to establish the 

amount of allowance for each entry. Plaintiff alleges that it is entitled to an 

allowance for all merchandise covered by the subject entries in the amount of a 

reduction in the appraised value to 18 percent of the original value of the subject 

plywood. Pl.’s Br. at 6–7; Compl. at 2–3. Plaintiff contends that 18 percent 

represents the salvage value for the plywood if used to build crates and skids. Pl.’s 

Br. at 6–7. Defendant alleges that Plaintiff has not substantiated its claim of an 18 

percent salvage value. Def.’s Br. at 23–25. Defendant also argues that even if 18 

percent were an appropriate salvage value, Plaintiff has not established that it 

should be applied to all of the imported plywood included in the subject entries. 

Id. at 25.
Court No. 20-00154 Page 18

Plaintiff’s claim for an 18 percent salvage value is based on a representation 

made by Transglobal’s domestic lumber supplier to Transglobal’s President, Mark 

Schroeder, regarding the cost to purchase non-grade marine lumber for the making 

of crates and skids. Def.’s SMF ¶ 34 at 8–9; Pl.’s SMF Resp. ¶ 34 at 3; Def.’s 

Cross-Mot. at Ex. B Deposition Transcript of Alison Dunbar (“A. Dunbar Depo.”) 

at 11, 29–33, ECF No. 28-2; Schroeder Depo. at 158–59. No other support has 

been offered for the 18 percent value and Plaintiff did not attempt to resell the 

unused plywood. Def.’s SMF ¶ 36 at 9; Pl.’s SMF Resp. ¶ 36 at 3; A. Dunbar 

Depo. at 26–27; Schroeder Depo. at 85–86, 160–61. During his deposition for this 

case, however, the Court observes that potentially contrary evidence was elicited in 

Schroeder’s statement that the value of the plywood had likely increased by 25 to 

30 percent. Schroeder Depo. at 166–67. Because there remain genuine issues of 

material fact as to the value of the subject plywood and whether an allowance 

should be applied to all subject merchandise, summary judgment is not appropriate 

for either Party on the third element.

CONCLUSION

For the foregoing reasons, the Court concludes that genuine issues of 

material fact exist and that summary judgment is not warranted. Accordingly, it is 

hereby
Court No. 20-00154 Page 19

ORDERED that Plaintiff’s Motion for Summary Judgment, ECF No. 27, is

denied; and it is further

ORDERED that Defendant’s Cross-Motion for Summary Judgment and 

Response in Opposition to Plaintiff’s Motion for Summary Judgment, ECF No. 28,

is denied; and it is further 

ORDERED that a status conference will be scheduled with the Parties to 

discuss pre-trial matters.

/s/ Jennifer Choe-Groves

Jennifer Choe-Groves, Judge

Dated: March 20 2023 

New York, New York