Court Opinion

ID: 9383962
Source: CourtListenerOpinion
Date Created: 2023-03-31 15:01:48.519672+00
Date Added: 2024-06-11T17:17:49.283061
License: Public Domain

Case: 22-1345    Document: 67     Page: 1   Filed: 03/02/2023

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

      CHINA CUSTOM MANUFACTURING INC.,
         GREENTEC ENGINEERING LLC,
               Plaintiffs-Appellants

                             v.

 UNITED STATES, ALUMINUM EXTRUSIONS FAIR
            TRADE COMMITTEE,
             Defendants-Appellees
            ______________________

                        2022-1345
                  ______________________

    Appeal from the United States Court of International
 Trade in No. 1:20-cv-00121-SAV, Judge Stephen A. Vaden.
                  ______________________

                  Decided: March 2, 2023
                  ______________________

      GEORGE REID TUTTLE, III, Law Offices of George R. Tut-
 tle, A Professional Corporation, San Rafael, CA, argued for
 plaintiffs-appellants. Also represented by GEORGE R.
 TUTTLE.

     JAMIE SHOOKMAN, Commercial Litigation Branch, Civil
 Division, United States Department of Justice, New York,
 NY, argued for defendant-appellee United States. Also
 represented by REGINALD THOMAS BLADES, JR., BRIAN M.
 BOYNTON, PATRICIA M. MCCARTHY; SAVANNAH MAXWELL,
 Office of the Assistant Chief Counsel for Trade
Case: 22-1345    Document: 67      Page: 2    Filed: 03/02/2023

 2                   CHINA CUSTOM MANUFACTURING INC.     v. US

 Enforcement and Compliance, United States Department
 of Commerce, Washington, DC.

     ROBERT E. DEFRANCESCO, III, Wiley Rein, LLP, Wash-
 ington, DC, argued for defendant-appellee Aluminum Ex-
 trusions Fair Trade Committee. Also represented by
 DERICK HOLT, ELIZABETH S. LEE, ALAN H. PRICE, JOHN
 ALLEN RIGGINS, ENBAR TOLEDANO.
                 ______________________

 Before NEWMAN, CHEN, and CUNNINGHAM, Circuit Judges.
 CHEN, Circuit Judge.
     China Custom Manufacturing, Inc. and Greentec Engi-
 neering, LLC (collectively, CCM) appeal a decision by the
 United States Court of International Trade (trial court)
 sustaining a final scope ruling by the Department of Com-
 merce (Commerce) that found CCM’s solar panel mounts
 are subject to antidumping and countervailing duty orders
 covering aluminum extrusions from the People’s Republic
 of China. Commerce and the trial court concluded that the
 solar panel mounts are not eligible for the orders’ “finished
 merchandise” exclusion because the mounts are just one
 component of a downstream product—i.e., a solar panel
 mounting system. Because the trial court’s decision is sup-
 ported by substantial evidence and is in accordance with
 law, we affirm.
                        BACKGROUND
                               I
     In 2011, Commerce issued antidumping and counter-
 vailing duty orders covering aluminum extrusions from the
 People’s Republic of China (Orders). Aluminum Extru-
 sions from the People’s Republic of China: Antidumping
 Duty Order, 76 Fed. Reg. 30,650 (May 26, 2011); Aluminum
 Extrusions from the People’s Republic of China: Counter-
 vailing Duty Order, 76 Fed. Reg. 30,653 (May 26, 2011).
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 CHINA CUSTOM MANUFACTURING INC.    v. US                  3

 The Orders define as subject merchandise “aluminum ex-
 trusions which are shapes and forms, produced by an ex-
 trusion process, made from” specified aluminum alloys.
 Antidumping Duty Order, 76 Fed. Reg. at 30,650. 1 The Or-
 ders further provide:
    Subject aluminum extrusions may be described at
    the time of importation as parts for final finished
    products that are assembled after importation, in-
    cluding, 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.
 Id. at 30,650–51. The Orders contain several exclusions
 from their scope, and two are pertinent here. The “finished
 merchandise” exclusion states:
    The scope . . . excludes finished merchandise con-
    taining aluminum extrusions as parts that are
    fully and permanently assembled and completed at
    the time of entry, such as finished windows with

    1    The Orders recite the same scope, and the language
 of the Orders is materially the same for present purposes.
 See Shenyang Yuanda Aluminum Indus. Eng’g Co. v.
 United States, 918 F.3d 1355, 1358 (Fed. Cir. 2019); Whirl-
 pool Corp. v. United States, 890 F.3d 1302, 1305 n.1 (Fed.
 Cir. 2018) (citations omitted). Thus, for ease of reference,
 we cite to only the Antidumping Duty Order.
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 4                     CHINA CUSTOM MANUFACTURING INC.     v. US

       glass, doors with glass or vinyl, picture frames with
       glass pane and backing material, and solar panels.
 Id. at 30,651. The “finished goods kit” exclusion states:
       The scope . . . excludes finished goods containing
       aluminum extrusions that are entered unassem-
       bled 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 fin-
       ished good and requires no further finishing or fab-
       rication, such as cutting or punching, and is
       assembled “as is” into a finished product.
 Id.
                                II
     We have interpreted the Orders’ scope on multiple oc-
 casions, and two of our prior opinions are relevant here. In
 the first case, we considered the Orders’ scope as to the fin-
 ished merchandise exclusion. There, the plaintiffs argued
 that their curtain wall units qualified for the finished mer-
 chandise exclusion because each unit was fully and perma-
 nently assembled and completed upon entry into the
 United States. Shenyang Yuanda Aluminum Indus. Eng’g
 Co. v. United States, 776 F.3d 1351, 1358 (Fed. Cir. 2015)
 (Shenyang I). Commerce disagreed, finding that the cur-
 tain wall units were not a “complete product upon entry”
 and instead were “designed to be attached to other units to
 eventually form a completed curtain wall.” Id. The trial
 court sustained Commerce’s determination, explaining
 that “[c]urtain wall units are [] undeniably components
 that are fastened together to form a completed curtain
 wall. Thus, they are ‘parts for,’ and ‘subassemblies’ for,
 completed curtain walls.” Id. (alterations in original) (cita-
 tion omitted). We affirmed, holding that “[a] part or sub-
 assembly, here a curtain wall unit, cannot be a finished
 product.” Id.
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 CHINA CUSTOM MANUFACTURING INC.     v. US                   5

     In the second case, which again involved curtain wall
 units, we considered the Orders’ scope as to the finished
 goods kit exclusion. There, the “only remaining issue” was
 “whether [the curtain wall units] are excluded when
 viewed (correctly) as subassemblies.” Shenyang Yuanda
 Aluminum Indus. Eng’g Co. v. United States, 918 F.3d
 1355, 1367 (Fed. Cir. 2019) (Shenyang II). We first agreed
 with Commerce that the Orders only exclude subassem-
 blies when imported as part of a finished goods kit. Id. We
 then agreed with Commerce that the curtain wall units at
 issue were ineligible for the finished goods kit exclusion be-
 cause they were not a “packaged combination” of all the
 pieces needed to assemble the curtain wall (i.e., the final
 finished good) at the time of importation and were not
 ready for installation “as is.” Id.
     Together, these cases explain that (1) parts or subas-
 semblies are not finished products and thus cannot qualify
 for the finished merchandise exclusion, (2) subassemblies
 may be excluded from the Orders’ scope only if they are im-
 ported as part of a finished goods kit, and (3) merchandise
 qualifies for the finished goods kit exclusion only if it con-
 tains a packaged combination of all of the required compo-
 nents at the time of importation and is ready for
 installation as is.
                              III
     On October 4, 2019, CCM requested Commerce deter-
 mine whether its “Rock-it Mount 3.0” solar panel mounts
 are excluded from the Orders’ scope. J.A. 227; J.A. 495.
 CCM explained that its solar panel mounts are used with
 other parts and components in a downstream structure,
 the “EcoFasten 3.0 Rock-it System,” 2 to mount solar panels

     2   CCM’s request also refers to the solar panel mount-
 ing system as, for example, the “EcoFasten Rock-it 3.0 so-
 lar panel mounting system,” J.A. 228; the “EcoFasten
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 6                  CHINA CUSTOM MANUFACTURING INC.    v. US

 on a roof. J.A. 231–35; J.A. 495–97. CCM asserted that its
 mounts qualify for the finished merchandise exclusion be-
 cause the mounts are “fully and permanently assembled
 and complete at the time of entry [and] ready for installa-
 tion as EcoFasten Rock-It 3.0 solar panel mounting system,
 a downstream structure.” J.A. 228–31.
                             IV
     On May 14, 2020, Commerce issued a final scope ruling
 that found CCM’s solar panel mounts are composed of alu-
 minum extrusions subject to the Orders’ scope and that the
 mounts are ineligible for the finished merchandise and fin-
 ished goods kit exclusions. J.A. 36, 50, 54–55. According
 to Commerce, the solar panel mounts “would not constitute
 finished merchandise because, at the time of entry into the
 United States, the solar mounts do not constitute a fully
 and permanently assembled and completed solar panel
 mounting system.” J.A. 52. Instead, the solar mounts “are
 subassemblies comparable to the merchandise at issue in
 [Shenyang I]” because the mounts “are designed to be part
 of a downstream final product, just as curtain wall units
 were designed to be part of the final product, a curtain
 wall.” J.A. 53–54. Thus, Commerce found CCM’s solar
 panel mounts ineligible for the finished merchandise exclu-
 sion because “the solar mounts are not themselves finished
 merchandise which perform a function independent of the
 complete solar panel mounting system.” J.A. 54. Sepa-
 rately, Commerce also determined that the solar panel
 mounts “do not constitute finished goods kits because, upon
 entry into the United States, they do not include all parts

 Rock-It System 3.0,” J.A. 230; the “Eco Fasten Rock-it Sys-
 tem 3.0,” J.A. 495–96; and the “Rock-It System 3.0,”
 J.A. 496. We understand these terms to be interchangea-
 ble references to the same solar panel mounting system.
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 CHINA CUSTOM MANUFACTURING INC.     v. US                   7

 necessary to fully assemble a finished solar panel mount-
 ing system.” J.A. 52.
                               V
      CCM sought review by the trial court, arguing that its
 mounts qualify only for the finished merchandise exclusion
 and not the finished goods kit exclusion. China Custom
 Mfg., Inc. v. United States, No. 20-cv-00121, 2021 WL
 5822715, at *6 (Ct. Int’l Trade Dec. 6, 2021). The trial court
 affirmed Commerce’s final scope ruling, explaining that
 “Commerce correctly applied the litany of Federal Circuit
 precedents interpreting the Orders to the solar mounts pre-
 sented to it for review.” Id. at *10. Citing CCM’s explana-
 tion that its solar panel mounts require other components
 to form the solar panel mounting system, the court con-
 cluded that the “solar mounts themselves are not finished
 merchandise but rather [are] a part or subassembly of the
 finished merchandise — the solar panel mounting system
 — and as such do not qualify as finished merchandise ex-
 cluded from the scope of the Orders.” Id. (citing Shen-
 yang I, 776 F.3d at 1358–59).
     CCM timely appealed. We have jurisdiction pursuant
 to 28 U.S.C. § 1295(a)(5).
                         DISCUSSION
     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) (ci-
 tations omitted). Under that standard, we “must uphold
 Commerce’s determinations unless they are unsupported
 by substantial evidence on the record, or otherwise not in
 accordance with law.” Id. (internal quotation marks and
 citation omitted). Although our review repeats much of the
 trial court’s work, we do not ignore the trial court’s in-
 formed judgment. Id. (citation omitted). We also give sub-
 stantial deference to Commerce’s interpretation of its own
 duty orders “because the meaning and scope of those orders
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 8                    CHINA CUSTOM MANUFACTURING INC.       v. US

 are issues particularly within the expertise and special
 competence of Commerce.” Id. (cleaned up) (citations omit-
 ted). A decision is supported by substantial evidence if “a
 reasonable mind might accept it as adequate to support a
 conclusion.” Id. (cleaned up) (citation omitted).
      This appeal is governed squarely by our holding in
 Shenyang I that “[a] part or subassembly . . . cannot be a
 finished product.” 776 F.3d at 1358. CCM conceded to the
 trial court that its solar panel mounts are parts or subas-
 semblies of its solar panel mounting system. See J.A. 1064
 (“[T]he Eco Fasten mounts are installed with . . . other
 identified components and solar panels to function as the
 downstream solar panel mounting system. . . . The mounts
 are clearly ‘parts’ of this solar panel system . . . .”);
 J.A. 1090 (“[W]hen we refer to the Rocket 3 Solar mounts,
 we were referring to it as a subassembly, that is, as a part
 of a greater whole in which it’s used.”). CCM also conceded
 that the mounts have no use outside of the specific solar
 panel mounting system—i.e., the EcoFasten 3.0 Rock-it
 System. See J.A. 1092 (“THE COURT: Does this mount –
 is it solely for use in the Rocket 3.0 kit? . . . [COUNSEL]: I
 don’t have an answer to that. But I believe that it’s useful
 [in] only the Rocket 3 kit . . . .”). Thus, like the curtain wall
 units in Shenyang I, CCM’s solar panel mounts are “unde-
 niably components that are fastened together to form a
 completed [solar panel mounting system].” 776 F.3d
 at 1358 (citation omitted). CCM’s solar panel mounts are
 parts or subassemblies and thus cannot be a finished prod-
 uct and cannot qualify for the finished merchandise exclu-
 sion.
     CCM argues that our holding in Shenyang I was lim-
 ited to the curtain wall units at issue there and cannot be
 applied to the solar panel mounts at issue here. Appel-
 lant’s Br. 28; Appellant’s Reply Br. 12–13. We disagree.
 Our holding in Shenyang I was based on the language of
 the Orders. Indeed, the statement that CCM’s argument
 relies on—that a “part or subassembly, here a curtain wall
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 CHINA CUSTOM MANUFACTURING INC.    v. US                   9

 unit, cannot be a finished product”—is divided into the le-
 gal conclusion (“a part or subassembly . . . cannot be a fin-
 ished product”) and the application of that legal conclusion
 to the facts (“here a curtain wall unit”). 776 F.3d at 1358.
     CCM tries to reinforce its argument that Shenyang I is
 not precedential by pointing to a statement by the trial
 court in an unrelated proceeding that Shenyang I did not
 control the outcome in that specific proceeding. Appellant’s
 Br. 26–28 (citing Shenyang Yuanda Aluminum Indus.
 Eng’g Co. v. United States, 279 F. Supp. 3d 1209, 1212 n.3
 (Ct. Int’l Trade 2017)). CCM misunderstands the trial
 court’s statement. In that case, the plaintiffs argued that
 their curtain wall units qualified for the finished goods kit
 exclusion, and defendant-intervenors responded that
 Shenyang I controlled the outcome. Shenyang, 279 F.
 Supp. 3d at 1212 & n.3. The court disagreed with the de-
 fendant-intervenors because Shenyang I evaluated only
 the Orders’ finished merchandise exclusion and did not ad-
 dress the finished goods kit exclusion. Id. at 1212 n.3.
 Thus, the trial court did not state that Shenyang I is not
 precedential. It stated that the holding of Shenyang I,
 which addressed only the finished merchandise exclusion,
 did not foreclose the finished goods kit exclusion argu-
 ments before it.
     Unable to convince us that Shenyang I does not apply,
 CCM asks us to overturn its holding. CCM fails to convince
 us that we should. CCM initially contends that the holding
 of Shenyang I is “contrary to the plain language of the [fin-
 ished merchandise] exclusion,” which excludes from the
 Orders’ scope “parts” that are “fully and permanently as-
 sembled and completed at the time of importation.” Appel-
 lant’s Br. 18–21, 29; Appellant’s Reply Br. 5. Not only is
 this the same argument that the plaintiffs made and that
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 10                   CHINA CUSTOM MANUFACTURING INC.     v. US

 we rejected in Shenyang I, 776 F.3d at 1358, it also mis-
 reads the exclusion, which states:
      The scope . . . excludes finished merchandise con-
      taining 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.
 Antidumping Duty Order, 76 Fed. Reg. at 30,651 (empha-
 ses added). CCM focuses on the italicized portion and ig-
 nores the underlined portion. The Orders exclude finished
 merchandise containing aluminum extrusions as parts
 that are fully and permanently assembled, not the parts
 themselves.
     CCM also asserts that Commerce rewrote the Orders’
 plain language when Commerce found that subassemblies
 cannot be excluded under the finished merchandise exclu-
 sion. Appellant’s Br. 25; Appellant’s Reply Br. 11. CCM
 again ignores our precedent and misreads the plain lan-
 guage. In Shenyang I, we held that subassemblies cannot
 qualify for the finished merchandise exclusion. 776 F.3d at
 1358. We reiterated that holding in Shenyang II, where we
 agreed with “Commerce’s straightforward reading” that
 subassemblies can be excluded only under the finished
 goods kit exclusion. 918 F.3d at 1367. Further, the Orders’
 plain language supports our prior decisions, as it states
 that “[t]he scope includes the aluminum extrusion compo-
 nents that are attached (e.g., by welding or fasteners) to
 form subassemblies, i.e., partially assembled merchandise
 unless imported as part of the finish goods ‘kit’ defined fur-
 ther below.” Antidumping Duty Order, 76 Fed. Reg. at
 30,651 (emphasis added). A straightforward reading of the
 plain language confirms, contrary to CCM’s argument, that
 subassemblies are included in the Orders’ scope and may
 be excluded only if imported as part of a finished goods kit.
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 CHINA CUSTOM MANUFACTURING INC.     v. US                  11

     CCM next avers that Commerce’s final scope ruling
 merged the finished merchandise and finished goods kits
 exclusions by requiring all EcoFasten components to be
 fully and permanently assembled at the time of entry, thus
 requiring a complete “final finished product” for the fin-
 ished merchandise exclusion rather than a “part.” Appel-
 lant’s Br. 23–24; Appellant’s Reply Br. 5–9. First, we fail
 to see how Commerce merged the two exclusions. Com-
 merce explained that CCM’s solar panel mounts (1) were
 not eligible for the finished merchandise exclusion because
 the mounts do not constitute a fully and permanently as-
 sembled and completed solar panel mounting system, and
 (2) were not eligible for the finished goods kit exclusion be-
 cause the mounts do not include, upon entry into the
 United States, all the parts necessary to fully assemble a
 finished solar panel mounting system. J.A. 52–53. Thus,
 Commerce kept the two exclusions separate. Second, Com-
 merce did not err in using the phrase “final finished prod-
 uct” to describe finished merchandise. The Orders use that
 same phrase to explain that “parts for final finished prod-
 ucts” are included in the Orders’ scope, Antidumping Duty
 Order, 76 Fed. Reg. at 30,650–51 (emphasis added), and we
 used a similar term in Shenyang I when we explained that
 a “part or assembly . . . cannot be a finished product,” 776
 F.3d at 1358 (emphasis added). Thus, Commerce did not
 impermissibly change the word “part” to “final finished
 product” in the finished merchandise exclusion.
     Finally, CCM notes that solar panels are explicitly ex-
 cluded from the Orders’ scope and asserts that Commerce,
 contrary to the facts of record, erred in finding that solar
 panels are added after the mounting system was assem-
 bled rather than added in an intermediate step in the as-
 sembly of the EcoFasten 3.0 Rock-it System. Appellant’s
 Br. 21–23. First, solar panel mounts are undisputedly not
 solar panels, and thus whatever the Orders may say about
 solar panels is not material to whether solar panel mounts
 are excluded. Second, the sequence in which solar panels
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 12                  CHINA CUSTOM MANUFACTURING INC.    v. US

 are added to the mounting system does not affect our anal-
 ysis. The solar panel mounts at issue are parts or subas-
 semblies for a downstream product—the EcoFasten solar
 panel mounting system—and thus are not a finished prod-
 uct that qualifies for the finished merchandise exclusion.
                        CONCLUSION
     We have considered CCM’s remaining arguments and
 find them unpersuasive. For the foregoing reasons, we af-
 firm. 3
                        AFFIRMED

      3   Defendant-Appellee Aluminum Extrusions Fair
 Trade Committee (AEFTC) moved to strike portions of
 CCM’s corrected opening brief that AEFTC alleged were
 substantive corrections made without leave of the court.
 AEFTC’s Br. 44–47. At oral argument, AEFTC’s counsel
 stated that the court need not reach the motion to strike if
 it affirms on the merits. Oral Arg. 32:53–33:22. In light of
 our decision, AEFTC’s motion to strike is denied as moot.