Court Opinion

ID: 9388571
Source: CourtListenerOpinion
Date Created: 2023-04-20 22:00:58.772038+00
Date Added: 2024-06-11T17:18:21.040296
License: Public Domain

Slip Op. 23-

               UNITED STATES COURT OF INTERNATIONAL TRADE

VIETNAM FINEWOOD COMPANY
LIMITED, FAR EAST AMERICAN, INC.,
AND LIBERTY WOODS
INTERNATIONAL, INC.,

           Plaintiffs,

              and

INTERGLOBAL FOREST, LLC,

          Consolidated-Plaintiff,
                                           Before: Mark A. Barnett, Chief Judge
                                           Consol. Court No. 22-00049
                 v.

UNITED STATES,

           Defendant,

                and

COALITION FOR FAIR TRADE IN
HARDWOOD PLYWOOD,

           Defendant-Intervenor.

                                OPINION AND ORDER

[Remanding the U.S. Department of Commerce’s scope determination for the
antidumping duty and countervailing duty orders on certain hardwood plywood from the
People’s Republic of China; directing Commerce to correct the administrative record;
dismissing Plaintiff Vietnam Finewood Company Limited from the action.]

                                                          Dated: April 20, 2023

Gregory S. Menegaz and Vivien J. Wang, deKieffer & Horgan, PLLC, of Washington,
DC, argued for Plaintiffs. With them on the brief were J. Kevin Horgan, Judith L.
Holdsworth, and Alexandra H. Salzman.
Consol. Court No. 22-00049                                                        Page 2

Thomas H. Cadden, Cadden & Fuller LLP, of Irvine, CA, argued for Consolidated
Plaintiff.

Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of New York, NY, argued for Defendant. With her on the brief
were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M.
McCarthy, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was
Savannah R. Maxwell, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.

Stephanie M. Bell, Wiley Rein LLP, of Washington, DC, argued for Defendant-
Intervenor. With her on the brief were Timothy C. Brightbill and Tessa V. Capeloto.

       Barnett, Chief Judge: This consolidated action involves a challenge to a U.S.

Department of Commerce (“Commerce” or “the agency”) scope determination for the

antidumping duty and countervailing duty orders on certain hardwood plywood from the

People’s Republic of China (“China”). See Compl., ECF No. 8; Confid. Final Scope

Ruling (“Final Scope Ruling”), ECF No. 34-1; see also Certain Hardwood Plywood

Products From the People’s Republic of China, 83 Fed. Reg. 504 (Dep’t Commerce

Jan. 4, 2018) (am. final determination of sales at less than fair value, and antidumping

duty order) (“Plywood 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) (“Plywood CVD Order”) (together, “the Plywood Orders”). 1 The Plywood Orders

cover, inter alia,

1 The administrative record associated with Commerce’s scope determination is
contained in public and confidential administrative records filed in the antidumping and
countervailing proceedings underlying the Plywood Orders. See ECF Nos. 23-1
through 23-4. Consistent with the parties, and for ease of reference, the court cites to
documents contained in the public antidumping record (“PR”), ECF No. 23-1, and the
confidential antidumping record (“CR”), ECF No. 23-2. Plaintiffs also filed joint
Consol. Court No. 22-00049                                                             Page 3

       hardwood and decorative plywood, and certain veneered panels as
       described below. For purposes of this proceeding, hardwood and
       decorative plywood is defined as a generally flat, multilayered plywood or
       other veneered panel, consisting of two or more layers or plies of wood
       veneers and a core, with the face and/or back veneer made of non-
       coniferous wood (hardwood) or bamboo.

Plywood AD Order, 83 Fed. Reg. at 512; Plywood CVD Order, 83 Fed. Reg. at 515. 2

       Plaintiffs, Vietnam Finewood Company Limited (“Finewood”), Far East American,

Inc. (“FEA”), and Liberty Woods International, Inc. (“Liberty”) (collectively, “Plaintiffs”),

and Consolidated Plaintiff InterGlobal Forest, LLC (“IGF”), challenge Commerce’s

interpretation of the scope of the Plywood Orders to include two-ply panels imported

from China into Vietnam and Commerce’s determination that hardwood plywood

manufactured by Finewood in Vietnam using such Chinese two-ply remains in-scope

based on the absence of a substantial transformation. Confid. Pls. Rule 56.2 Mem. in

Supp. of Mot. for J. Upon the Agency R. (“Pls.’ Mem.”), ECF No. 31-1; Confid. Consol.

Pl. [IGF] Rule 56.2 Mem. in Supp. of Mot. for J. Upon the Agency R. (“Consol. Pl.’s

Mem.”), ECF No. 30-1. Plaintiffs also challenge Commerce’s rejection of portions of

Finewood’s initial scope comments. Pls.’ Mem. at 24–27.

       Defendant United States (“the Government”) and Defendant-Intervenor Coalition

for Fair Trade in Hardwood Plywood (“the Coalition”) urge the court to sustain

appendices containing record documents cited in Parties’ briefs. See Confid. J.A.
(“CJA”), ECF Nos. 46 (Tabs 1–17), 46-1 (Tabs 18–31); Public J.A., ECF No. 47; Public
Revised J.A. Tab 19, ECF No. 54. The court references the confidential documents
unless otherwise specified.
2 When referencing specific scope language that appears in both orders, the court cites

to the antidumping duty order.
Consol. Court No. 22-00049                                                           Page 4

Commerce’s scope ruling and deny the motions in all other respects. Confid. Def.’s

Resp. to Pls.’ Rule 56.2 Mot. for J. on the Agency R. (“Def.’s Resp.”), ECF No. 35;

Confid. Resp. to Mot. for J. on the Agency R. (“Def.-Ints.’ Resp.”), ECF No. 38. 3

       For the reasons discussed herein, the court remands Commerce’s determination

that two-ply panels are covered by the scope of the Plywood Orders but sustains

Commerce’s treatment of Finewood’s initial scope comments. The court further finds

that certain of IGF’s arguments are barred by the doctrines of waiver and administrative

exhaustion, and that Finewood must be dismissed from the action.

                                      BACKGROUND

       This matter arose following U.S. Customs and Border Protection’s (“CBP”)

issuance of a covered merchandise referral to Commerce as part of EAPA 4

Investigation No. 7252 concerning possible evasion of the Plywood Orders. See

Placement of Covered Merch. Referral Docs. on the R. (Jan. 21, 2020), PR 9–11, CJA

Tab 6 (attaching CBP referral letter, dated Sept. 16, 2019 (“CBP Referral”)). Section

1517 of Title 19 grants CBP authority to investigate allegations of evasion of

antidumping duty or countervailing duty orders. 19 U.S.C. § 1517 (2018).5 “Evasion” is

defined as:

3 FEA, Liberty, and IGF are U.S. importers of hardwood plywood manufactured in
Vietnam by Finewood. See Final Scope Ruling at 2; Consol. Pl.’s Mem. at 1. The
Coalition represents domestic interests and was the petitioner in the investigation
underlying the Plywood Orders. Final Scope Ruling at 2.
4 EAPA refers to the Enforce and Protect Act, Pub. L. No. 114–125, § 421, 130 Stat.

122, 161 (2016).
5 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code and

all citations to the U.S. Code are to the 2018 edition, unless otherwise specified.
Consol. Court No. 22-00049                                                         Page 5

       entering covered merchandise into the customs territory of the United
       States by means of any document or electronically transmitted data or
       information, written or oral statement, or act that is material and false, or
       any omission that is material, and that results in any cash deposit or other
       security or any amount of applicable antidumping or countervailing duties
       being reduced or not being applied with respect to the merchandise.

Id. § 1517(a)(5)(A). “Covered merchandise” means “merchandise that is subject to”

antidumping duty or countervailing duty orders issued pursuant to 19 U.S.C. § 1673e or

19 U.S.C. § 1671e, respectively. Id. § 1517(a)(3).

       In the underlying proceeding, CBP was unable to determine whether Finewood’s

“[two]-ply cores of Chinese origin, which are further processed in Vietnam to include the

face and back veneers of non-coniferous wood, are within the scope of [the Plywood

Orders].” CBP Referral at 2. Under those circumstances, the statute directs CBP to

“refer the matter to [Commerce] to determine whether the merchandise is covered

merchandise pursuant to [Commerce’s authority] under subtitle IV [of the Tariff Act of

1930].” 19 U.S.C. § 1517(b)(4)(A)(i). On January 17, 2020, Commerce initiated a

scope inquiry. Certain Hardwood Plywood From the People’s Republic of China, 85

Fed. Reg. 3,024 (Dep’t Commerce Jan. 17, 2020) (notice of covered merch. Referral

and initiation of scope inquiry).

       To resolve the covered merchandise referral from CBP, Commerce applied its

regulation governing the issuance of scope rulings. See Final Scope Ruling at 6–7.

That regulation recognizes that, because the descriptions of merchandise covered by

the scope of an antidumping or countervailing duty order must be written in general

terms, questions may arise as to whether a particular product is included within
Consol. Court No. 22-00049                                                           Page 6

the scope of an order. See 19 C.F.R. § 351.225(a) (2020). 6 In order to resolve such

questions, including in the context of CBP covered merchandise referrals, Commerce

issues “scope rulings” that clarify whether the product is in-scope. See id.; Final Scope

Ruling at 6–7. Although there are no specific statutory provisions that govern

Commerce’s interpretation of the scope of an order, Commerce is guided by case law

and agency regulations. See Meridian Prods., LLC v. United States, 851 F.3d 1375,

1381 (Fed. Cir. 2017) (“Meridian 2017”); 19 C.F.R. § 351.225.

       Commerce’s inquiry begins with the relevant scope language. See, e.g., OMG,

Inc. v. United States, 972 F.3d 1358, 1363 (Fed. Cir. 2020). If the scope language is

unambiguous, “the plain meaning of the language governs.” Id. Commerce further

interprets the scope “with the aid of” the sources set forth in 19 C.F.R. § 351.225(k)(1)

(referred to as a “(k)(1) analysis,” “(k)(1) sources,” or “(k)(1) materials”). Meridian 2017,

851 F.3d at 1382 (citation omitted). Subsection (k)(1) directs Commerce to consider the

descriptions of the subject merchandise in the petition, initial investigation, and prior

determinations by Commerce (including scope determinations) or the U.S. International

Trade Commission (“ITC”). 19 C.F.R. § 351.225(k)(1). If the (k)(1) sources are

dispositive, Commerce may issue its ruling based solely on the party’s application and

6Commerce recently revised its scope regulations; however, the revisions apply “to
scope inquiries for which a scope ruling application is filed . . . on or after the effective
date” of November 4, 2021. See Regs. To Improve Admin. and Enforcement of
Antidumping and Countervailing Duty Laws, 86 Fed. Reg. 52,300, 52,300, 52,327 (Dep’t
Commerce Sept. 20, 2021). Thus, the court cites to the prior scope regulations that
were in effect when Commerce initiated this scope inquiry. See Final Scope Ruling at 6
n.13.
Consol. Court No. 22-00049                                                              Page 7

the (k)(1) sources. 19 C.F.R. § 351.225(d). 7 In all other cases, Commerce will initiate a

scope inquiry and may consider the factors enumerated in subsection (k)(2) of the

regulation. See Meridian 2017, 851 F.3d at 1382 (citing 19 C.F.R. § 351.225(k)(2)). 8

       When Commerce “finds that a scope inquiry presents an issue of significant

difficulty, the [agency] will issue a preliminary scope ruling” and will allow time for initial

and rebuttal comments. 19 C.F.R. § 351.225(f)(3). Commerce issued its preliminary

scope ruling in this case on August 26, 2021. Prelim. Scope Ruling (Aug. 26, 2021), CR

128, PR 110, CJA Tab 2. After finding the scope ambiguous and consulting the (k)(1)

sources, Commerce preliminarily concluded that the Chinese two-ply panels are within

the scope of the Plywood Orders. Id. at 1. Commerce further determined that

hardwood plywood produced by Finewood in Vietnam using Chinese two-ply was not

substantially transformed in Vietnam and, thus, entered the United States as a product

of China. Id.

       Commerce allowed interested parties to file comments on the preliminary scope

ruling. See Prelim. Scope Ruling at 31. Commerce subsequently rejected Finewood’s

initial comments based on the inclusion of untimely new factual information. See Letter

Re: [Finewood] Cmts. on the Prelim. Scope Ruling (Dec. 10. 2021) (“Commerce’s Dec.

7 To be dispositive, the (k)(1) factors “must be ‘controlling’ of the scope inquiry in the
sense that they definitively answer the scope question.” Sango Int’l L.P. v. United
States, 484 F.3d 1371, 1379 (Fed. Cir. 2007).
8 The (k)(2) factors include: “(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).
Consol. Court No. 22-00049                                                        Page 8

10 Ltr.”), PR 136, CJA Tab 30. Finewood refiled its initial comments with those portions

omitted under protest. Resubmission of DH Respondents Cmts. on Prelim. Scope

Ruling (Dec. 14, 2021) at 3, Attach. (“Pls.’ Prelim. Scope Cmts.”), CR 134, PR 138, CJA

Tab 31.

         Commerce rejected and did not retain on the record IGF’s initial comments

based on procedural errors and untimeliness. See Letter Re: [IGF’s] Cmts. on the

Prelim. Scope Ruling (Oct. 8, 2021), PR 126, CJA Tab 25; Attachments to Oct. 8, 2021

Letter (Oct. 13, 2021), PR 128–31, CJA Tab 27. Commerce rejected and removed from

the record IGF’s rebuttal comments based on the inclusion of untimely affirmative

argument. Letter Re: [IGF’s] Rebuttal Cmts. on the Prelim. Scope Ruling (Oct. 15,

2021), PR 134, CJA Tab 29.

         On January 21, 2022, Commerce issued its affirmative Final Scope Ruling. Final

Scope Ruling at 1. On February 18, 2022, Plaintiffs filed a summons and complaint.

Summons, ECF No. 1; Compl. On March 17, 2022, the Coalition intervened. Order

(Mar. 17, 2022), ECF No. 20. On March 21, 2022, the court consolidated IGF’s action

under this lead case. Docket Entry, ECF No. 22. Following briefing on the merits, on

March 21, 2023, the court heard oral argument. Docket Entry, ECF No. 55; see also

Oral Arg. (recording on file with the court). 9

9   Subsequent citations to the oral argument reflect the timestamp from the recording.
Consol. Court No. 22-00049                                                         Page 9

                         JURISDICTION AND STANDARD OF REVIEW

      The court has jurisdiction pursuant to section 516A(a)(2)(B)(vi) of the Tariff Act of

1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(vi), and 28 U.S.C. § 1581(c). 10 The

court will uphold an agency determination that is supported by substantial evidence and

otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

      “[W]hether the unambiguous terms of a scope control the inquiry, or whether

some ambiguity exists, is a question of law that [the court] review[s] de novo.” Meridian

2017, 851 F.3d at 1382. Whether a product is covered by the language of the scope is

“a question of fact reviewed for substantial evidence.” Id.; see also OMG, Inc., 972 F.3d

at 1363–64 (discussing the standard of review). “Commerce is entitled to substantial

deference with regard to its interpretations of its own antidumping duty orders.” King

Supply Co., LLC v. United States, 674 F.3d 1343, 1348 (Fed. Cir. 2012). Nevertheless,

“Commerce cannot ‘interpret’ an antidumping order so as to change the scope of th[e]

order, nor can Commerce interpret an order in a manner contrary to its terms.”

Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1072 (Fed. Cir. 2001) (citation

omitted).

10Plaintiffs also alleged jurisdiction pursuant to 28 U.S.C. § 1581(i) based on CBP’s
premature liquidation of the subject entries. Compl. ¶ 26. However, the Government
does not contest jurisdiction in this case pursuant to section 1581(c). Remote Teleconf.
(March 17, 2022) at 00:40–1:40 (time stamp from the recording, on file with the court).
Plaintiffs protested the liquidation of their entries, and CBP has suspended action on the
protests. Compl. ¶¶ 12, 16–17, 23; Compl. ¶¶ 13, 17, 23, InterGlobal Forest LLC v.
United States, Court No. 22-cv-00053 (Feb. 2, 2022), ECF No. 7.
Consol. Court No. 22-00049                                                       Page 10

                                       DISCUSSION

       Plaintiffs and IGF challenge Commerce’s determination that the Chinese two-ply

panels imported into Vietnam are within the scope of the Plywood Orders. Because the

court finds that remand is required on that issue, the court does not reach parties’

arguments regarding substantial transformation. 11

       I.     Commerce’s Scope Interpretation

       Commerce determined there was an ambiguity in the written scope description

requiring a (k)(1) analysis. Final Scope Ruling at 9–11. Plaintiffs and IGF challenge

Commerce’s finding of ambiguity and Commerce’s analysis of the (k)(1) sources to

include the Chinese two-ply panels within the scope of the Plywood Orders.

       As previously stated, the scope of the Plywood Orders states:

       The merchandise subject to this investigation is hardwood and decorative
       plywood, and certain veneered panels as described below. For purposes
       of this proceeding, hardwood and decorative plywood is defined as a
       generally flat, multilayered plywood or other veneered panel, consisting of
       two or more layers or plies of wood veneers and a core, with the face
       and/or back veneer made of non-coniferous wood (hardwood) or bamboo.

Plywood AD Order, 83 Fed. Reg. at 512 (emphasis added). Upon review of this

language, Commerce found that the scope “cover[s] two general types of

merchandise”—hardwood and decorative plywood 12 and certain veneered panels—but

that the second scope sentence defines only hardwood plywood. Final Scope Ruling at

11 Parties agree that the court need not address Commerce’s substantial transformation
analysis if the court finds two-ply panels beyond the scope of the Plywood Orders. Pls.’
Mem. at 27–28; Oral Arg. 1:53:00–1:54:30.
12 For ease of reference, the court refers to “hardwood and decorative plywood” as

“hardwood plywood.”
Consol. Court No. 22-00049                                                          Page 11

9; see also id. at 11. Commerce explained that a contrary interpretation of the second

sentence to describe certain veneered panels would render “the express inclusion of

‘certain veneered panels’ in the first sentence of the scope” superfluous. Id. at 11.

Commerce concluded that “the scope is ambiguous with regard to ‘certain veneered

panels,’” id. at 10 (footnote omitted), and thus, it is unclear “whether all in-scope

merchandise must be made of a minimum of three layers,” id. at 11.

       With respect to the (k)(1) materials, Commerce first reviewed the final injury

investigation report prepared by the U.S. International Trade Commission (“ITC”) and

concluded that it provided no basis to exclude two-ply from the scope of the orders.

Final Scope Ruling at 12–14. 13 Commerce explained that investigation documents

provided to the ITC referenced “certain veneered panels”; the ITC found that the

domestic like product was coextensive with the scope; and the ITC did not expressly

exclude two-ply panels from its investigation. Id. at 13–14.

       Next, Commerce considered language in the Petition and revisions to the scope

prior to initiation. Id. at 14. As part of the revisions, Commerce noted that the phrase

“veneer core platforms,” a term defined in the Petition to include two-ply, was removed

from the scope and the phrase “certain veneered panels” was added. Id. at 14–15.

Commerce explained that the record of the investigation fails to indicate the reason for

13  Relevant portions of the ITC’s report are reproduced in or appended to various record
filings. See, e.g., Final Scope Ruling at 13 & n.54 (citing two such filings). For ease of
reference, the complete citation is Hardwood Plywood from China, Inv. Nos. 701-TA-
565 and 731-TA-1341, Pub. 4747 (Dec. 2017) (final) (“ITC Report”).
Consol. Court No. 22-00049                                                         Page 12

the change but maintained that the change was not intended to remove two-ply from the

scope. Id. at 15.

       Commerce also explained that, in the preliminary scope memorandum filed in the

underlying investigation (“Preliminary Investigation Scope Memo”), the agency defined

“certain veneered panels” to mean “a veneer of hardwood which has been affixed to a

base (including the core) of inferior wood or a non-wood product.” Id. at 16 & n.81

(citing Rebuttal to Substantial Transformation Info. (May 4, 2021), Ex. 1 (Scope Cmts.

Decision Mem. for the Prelim. Determination (Apr. 17, 2017) (“Prelim. Inv. Scope

Mem.”)) at Cmt. 4, CR 126, PR 102, CJA Tab 21). Commerce further explained that an

example of a three-ply panel provided by the Coalition and referenced in the Preliminary

Investigation Scope Memo described a hardwood plywood product, not a veneered

panel. Id. at 19 & n.99 (citing, inter alia, Prelim. Inv. Scope Mem. at Cmt. 4).

Commerce stated that its “current understanding of the phrase ‘veneered panels’ means

‘a veneer of hardwood affixed to a base, usually of inferior wood, by gluing under

pressure, in accordance with the explanatory notes of the [Harmonized Tariff Schedule

(“HTS”)].’” Id. at 17 & n.85 (citing Prelim. Scope Ruling at 14).

       Commerce also addressed Finewood’s argument that the product characteristics

memorandum from the investigation (“Product Characteristics Memo”) supported its

view that Commerce did not intend to capture two-ply in the scope. Id. at 19.

Commerce explained that the Product Characteristics Memo “did not instruct

respondents not to report two-ply panels.” Id. at 19 (emphasis added). Commerce

went on to explain that the Product Characteristics Memo “directed respondents to
Consol. Court No. 22-00049                                                        Page 13

report the number of plies of the product, with the option to create their own two-digit

codes (e.g., respondents could have reported ‘02’ for a two-ply product) for any product

with a number of plies not listed.” Id. at 19 & n.100 (citing Finewood Sur-Rebuttal to

Pet’r’s May 4, 2021 Rebuttal Cmts. (May 13, 2021), Ex. SR-2 (“Prod. Characteristics

Mem.”), CR 127, PR 107, CJA Tab 22). Commerce further explained that “the number

of plies was not a physical characteristic used to define the reported products (also

known as control numbers or ‘CONNUMs’); instead, it was merely an ‘additional product

characteristic’ not included in the CONNUM.” Id. at 19 & n.101 (citing Prod.

Characteristics Mem.).

          A. Parties’ Contentions

       Plaintiffs contend that Commerce erred in finding the scope ambiguous with

respect to the phrase “certain veneered panels” because the scope explicitly states that

such products are “described below.” Pls.’ Mem. at 11. They are, Plaintiffs contend,

because the second scope sentence uses the phrase “other veneered panel.” Id. at 12

(emphasis omitted). Plaintiffs assert that instead of clarifying the scope, Commerce has

impermissibly expanded it. Pls.’ Reply at 1–4; see also Consol. Pl.’s Mem. at 14, 17

(advancing similar arguments). Plaintiffs further contend that record evidence

undermines Commerce’s (k)(1) analysis. Pls.’ Mem. at 14–24; Pls.’ Reply at 4–14; see

also Consol. Pl.’s Mem. at 17–19.

        The Government urges the court to sustain Commerce’s ambiguity finding

based on the lack of any explicit definition of “certain veneered panels.” Def.’s Resp. at

12. Regarding Commerce’s (k)(1) analysis, the Government contends that Plaintiffs
Consol. Court No. 22-00049                                                         Page 14

merely invite the court to reweigh the evidence and that Commerce’s findings should be

sustained. Id. at 16–20.

       The Coalition contends that Commerce met the “low threshold” applicable to

ambiguity findings. Def.-Int.’s Resp. at 9–10 (discussing Laminated Woven Sacks

Comm. v. United States, 34 CIT 906, 914, 716 F. Supp. 2d 1316, 1325 (2010)). 14 In

addition to supporting the Government’s arguments, see id. at 12, the Coalition further

contends that the (k)(1) materials reflect their intent to include two-ply in the scope of

the Plywood Orders, id. at 13–17.

          B. Together, the Scope Language and the (k)(1) Sources Confirm the
             Unambiguous Scope of the Plywood Orders

       Further background on the nature of the court’s review of Commerce’s scope

ruling is helpful to the analysis. In this case, Commerce characterized the existence of

ambiguity in the scope language as “a condition precedent” for Commerce to consider

the (k)(1) sources—effectively finding what some have inferred to be a “(k)(0)” step built

into the agency’s scope analysis (i.e., prior to (k)(1) and (k)(2)). Final Scope Ruling at

11 n.45 (citing, inter alia, Meridian 2017, 851 F.3d at 1381). Commerce’s approach

finds some support in the case law, see, e.g., OMG, 972 F.3d at 1363, but, elsewhere,

14The Coalition argues that the phrase “as described below” following “certain veneered
panels” could instead be interpreted to refer to the “14 additional paragraphs following
the first paragraph, all of which provide information regarding the covered
merchandise.” Def.-Int.’s Resp. at 11. However, like the second scope sentence,
subsequent scope paragraphs describing what is included in the scope are prefaced
with the phrase “hardwood plywood.” The Coalition’s argument that subsequent scope
paragraphs may describe certain veneered panels is entirely inconsistent with its
position that the second scope sentence does not describe certain veneered panels.
Consol. Court No. 22-00049                                                          Page 15

courts have acknowledged that Commerce’s review of the scope language is

inseparable from consideration of the (k)(1) sources, see, e.g., Meridian Prods. v.

United States, 890 F.3d 1272, 1277 (Fed. Cir. 2018) (“Meridian 2018”) (stating that “the

plain language of an antidumping order is ‘paramount,’” but that “[i]n reviewing the plain

language of a duty order, Commerce must consider [the (k)(1) sources]”) (citation

omitted); Shenyang Yuanda Aluminum Indus. Eng’g Co. v. United States, 776 F.3d

1351, 1354 (Fed. Cir. 2015) (describing “a two-step process” in which “Commerce must

[first] consider the scope language contained in the order itself, the descriptions

contained in the petition, and how the scope was defined in the investigation and in the

determinations issued by Commerce and the ITC”); ArcelorMittal Stainless Belg. N.V. v.

United States, 694 F.3d 82, 87 (Fed. Cir. 2012) (“[T]he first step in a scope ruling

proceeding is to determine whether the governing language is in fact ambiguous, and

thus requires analysis of the regulatory factors [i.e., the (k)(1) sources] previously

outlined. If it is not ambiguous, the plain meaning of the language governs.”).

       Despite what some might consider to be conflicting indications, the above-

referenced case law simply suggests there is no bright line, that Commerce’s scope

analysis (and the court’s corresponding review of that analysis) is “highly fact-intensive

and case-specific.” King Supply, 674 F.3d at 1345. Thus, in some cases, an order’s

scope, by itself, may be sufficiently plain in relationship to a particular product that no
Consol. Court No. 22-00049                                                         Page 16

resort to the (k)(1) sources is necessary. 15 In other cases, however, it may be

necessary to consider the (k)(1) sources to confirm that the scope language plainly

speaks to the inclusion or exclusion of a particular product. See, e.g., Meridian 2017,

851 F.3d at 1383–84 (reviewing the scope language and finding that Commerce’s

interpretation of such language was supported by earlier scope rulings) (citation

omitted); ArcelorMittal, 694 F.3d at 89–90 (finding a scope unambiguous “when read in

light of industry practice” and “Commerce’s previous [scope] decision”).

       Whether resort to the (k)(1) sources is necessary to interpret the scope of an

order, the court reviews Commerce’s ambiguity determination de novo. See Meridian

Prods. 2017, 851 F.3d at 1382. Thus, when the court finds that a scope is

unambiguous, Commerce may not deviate from the court’s holding in that regard. See

ArcelorMittal, 694 F.3d at 90 (stating the plain meaning of the scope language in terms

of the court’s holding). This case falls into the scenario in which the scope language,

when read together with (k)(1) sources, unambiguously establishes that the Plywood

Orders do not include Chinese two-ply panels.

       Commerce rested its determination that the phrase “certain veneered panels”

was ambiguous on the agency’s view that the second scope sentence (and, thus, the

15 In a similar vein, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”)
has recognized that CBP effectively applies the scope language as it determines, “for
every imported product, whether the product falls within the scope of an antidumping or
countervailing duty order.” Sunpreme Inc. v. United States, 946 F.3d 1300, 1320 (Fed.
Cir. 2020) (en banc). In recognizing CBP’s authority to do so when an order is
ambiguous, the Federal Circuit also recognized that CBP makes such determinations
when “order[s] [are] clear and unambiguous.” Id. at 1318. Similarly, Commerce may
find an order unambiguous such that any further scope inquiry is unnecessary.
Consol. Court No. 22-00049                                                        Page 17

remainder of the scope) defined only hardwood plywood. Final Scope Ruling at 9.

From the outset, Commerce’s interpretation of the scope to include two “distinct and

separate” products, 16 only one of which is described, is problematic in light of applicable

statutory provisions and Commerce’s regulation. Sections 1671e(a)(2) and 1673e(a)(2)

require Commerce to include in antidumping and countervailing duty orders “a

description of the subject merchandise.” 19 U.S.C. §§ 1671e(a)(2), 1673e(a)(2). While

that description need only contain “such detail as the [agency] deems necessary,” id.,

Commerce’s regulation presupposes at least a “general” description of the subject

merchandise, 19 C.F.R. § 351.225(a). 17 These provisions serve to implement “the

primary purpose” of any unfair trade order, which “is to place foreign exporters on notice

of what merchandise is subject to duties.” OMG, 972 F.3d at 1364 (quoting

ArcelorMittal, 694 F.3d at 88). 18 Commerce not only failed to address the

16 Commerce described hardwood plywood and certain veneered panels as “distinct
and separate” products in its (k)(1) analysis. Final Scope Ruling at 13.
17 For this reason, cases cited by the Coalition involving ambiguities in general scope

descriptions are inapposite. See Def.-Int.’s Resp. at 9. In Laminated Woven Sacks, for
example, the court sustained Commerce’s clarification of general scope language
covering subject merchandise “printed with three colors or more in register” to mean the
number of inks used in printing and not the number of colors visible on the
merchandise. 34 CIT at 913–15, 716 F. Supp. 2d at 1325–26. Here, however,
Commerce claimed that the ambiguity was related to the absence of any description of
certain veneered panels and sought to describe such merchandise in the first instance
in a scope ruling. See Final Scope Ruling at 11.
18 Commerce acknowledged the “fundamental principle that merchandise subject to an

order must be the type of merchandise described in the order and from the particular
country covered by the order,” Prelim. Scope Ruling at 11 (emphasis added), but then
failed to recognize the incongruity of its position that the Plywood Orders nowhere
describe “certain veneered panels,” see id. (stating that “the scope does not define
‘certain veneered panels,’” or provide examples thereof).
Consol. Court No. 22-00049                                                         Page 18

consequences of its ambiguity determination in the context of these important

considerations but took an interpretive approach which was at odds with them.

       Commerce supported its determination that the second sentence of the scope

defined only hardwood plywood by claiming that if that sentence “were intended to also

define ‘certain veneered panels,’ the express inclusion of ‘certain veneered panels’ in

the first sentence of the scope . . . would be unnecessary.” Final Scope Ruling at 11.

Accepting Commerce’s position, however, would render the phrase “as described

below” in the first sentence superfluous because certain veneered panels would not be

described below. The Government’s suggestion that “as described below” applies to

hardwood plywood, Oral Arg. 05:45–06:55, does not remedy this problem because

subsequent scope descriptions are prefaced with an identifying phrase such that this

forecast of a description is unnecessary. Thus, Commerce’s sole basis for finding that

the second scope sentence does not describe certain veneered panels is unpersuasive.

       Plaintiffs, on the other hand, read the first scope sentence as prefatory—

introducing the products covered by the scope—while the second scope sentence

serves to define the totality of the products, “[f]or purposes of this proceeding,” as

plywood or other veneered panels with coextensive definitions under the umbrella term

of hardwood plywood. Pls.’ Mem. at 11–12; see also Pls.’ Reply at 1–2. The comma

placement after “plywood” in the first scope sentence supports reading the phrase “and

certain veneered panels as described below” to consist of a single independent clause

such that the certain veneered panels are the “other veneered panel[s]” that Commerce

“described below.” See Plywood AD Order, 83 Fed. Reg. at 512. However, it is not
Consol. Court No. 22-00049                                                     Page 19

necessary to resolve this matter based on the scope language alone because the (k)(1)

sources establish the unambiguous meaning and show that Plaintiffs’ interpretation

aligns with Commerce’s intent at the time the agency issued the Plywood Orders.

      Before turning to the (k)(1) sources, one additional point bears mentioning.

During oral argument, the Coalition asserted that finding the second scope sentence

unambiguously applicable to certain veneered panels does not end the inquiry. Oral

Arg. 1:54:30–2:01:10. According to the Coalition, the second scope sentence should

also be interpreted to describe a two-ply—not a three-ply—minimum requirement. 19 Id.

However, the Coalition presented this argument to Commerce during the scope inquiry,

see Final Scope Ruling at 10 (summarizing the Coalition’s arguments), 20 and

19 Commerce looked to the (k)(1) sources for guidance on whether “veneered panels”
may constitute “two-ply panels,” and resolved that question in the affirmative. Prelim.
Scope Ruling at 13; Final Scope Ruling at 11. Commerce’s singular focus on the
minimum ply requirement is problematic insofar as it ignores that all other
characteristics of certain veneered panels would remain undefined because—according
to Commerce—the scope describes only hardwood plywood. Commerce’s approach
thus leaves open the possibility of piecemeal scope rulings (and litigation) concerning
other aspects of subject veneered panels, including, for example, core composition (if
any), surface coatings, and dimension. See Plywood AD Order, 83 Fed. Reg. at 512.
20 The Coalition argued that the second scope sentence “is more reasonably read” to

define hardwood plywood as “consist[ing] of two or more layers or plies of: (1) wood
veneer; and (2) a core.” Final Scope Ruling at 10. The Coalition’s argument is,
however, premised on the omission of the plural form of “wood veneers” that Commerce
used in the scope along with the singular “core.” See Plywood AD Order, 83 Fed. Reg.
at 512 (referring to “two or more layers or plies of wood veneers and a core”) (emphasis
added). The argument is further undermined by the Coalition’s clear statement in its
petition underlying the original investigation that “[h]ardwood plywood is comprised of a
core sandwiched between two veneers,” clearly describing a three-ply product.
Finewood Suppl. Questionnaire Resp. – Part IV and Info. on Substantial Transformation
(Apr. 20, 2021) (“Finewood Suppl. Resp.”), Ex. SQ1-25 (“Petition”) at 7, CR 117–23, PR
91–92, CJA Tab 18.
Consol. Court No. 22-00049                                                             Page 20

Commerce impliedly rejected this interpretation. Commerce’s statement that, “without a

clear definition of certain veneered panels . . . it is unclear whether all in-scope

merchandise must be made of a minimum of three layers,” id. at 11 (emphasis added),

indicates Commerce’s understanding that at least some in-scope merchandise “must be

made of a minimum of three layers.” 21 If Commerce had agreed with the Coalition that

the second scope sentence encompassed two-ply panels, Commerce’s review of the

(k)(1) sources for a definition of certain veneered panels would have been unnecessary

because there would be no distinction between the two types of subject merchandise.

But cf. Final Scope Ruling at 13. Thus, to the extent the Coalition intended to suggest

that Commerce must further address the meaning of the second scope sentence if the

court finds that “certain veneered panels” are described in that sentence, the court

disagrees that any further consideration by Commerce is necessary.

       As discussed below, the (k)(1) sources show both that Commerce intended to

include subject merchandise with a minimum of three plies in the scope of the

investigations and that Commerce only intended to include such merchandise—in other

words, that the second scope sentence applies to all subject merchandise and that the

second scope sentence unambiguously covers products of three or more plies.

21Further in, Commerce referred to a product containing face and back veneers and a
core as a hardwood plywood product “as described in the scope definition of hardwood
plywood.” Final Scope Ruling at 19.
Consol. Court No. 22-00049                                                          Page 21

                  1. Revisions to the Proposed Scope Language Prior to Initiation

       Commerce’s review of the Coalition’s revisions to the proposed scope language

prior to initiation of the investigations were cited in the agency’s conclusion that certain

veneered panels include two-ply panels. Final Scope Ruling at 15. Commerce’s

explanation is, however, circular, and unsupported by the record.

       Revisions to the proposed scope of the investigations prior to initiation show that

the Coalition added the phrase “certain veneered panels” to the first scope sentence

when it added “other veneered panel[s]” to the second scope sentence. See Finewood

Suppl. Resp., Ex. SQ1-26 (containing Exhibit 1 to the Coalition’s Dec. 6, 2016, letter to

Commerce revising the proposed scope (“Revised Proposed Scope”)). Prior to the

revisions, the proposed scope language stated, in relevant part:

       The merchandise subject to this investigation is hardwood and decorative
       plywood. Hardwood and decorative plywood is a flat panel composed of
       an assembly of two or more layers or plies of wood veneers in
       combination with a core. The veneers, along with the core, are glued or
       otherwise bonded together to form a finished product. . . . For products
       that are entirely composed of veneer, such as Veneer Core Platforms, the
       exposed veneers are to be considered the face and back veneers . . . .

Petition at 4–5. Later in the Petition, though not in the section containing the proposed

scope language, the Coalition explained that “[v]eneer core ‘platforms’ are included in

the definition of subject merchandise” and that veneer core platforms are “defined as

two or more wood veneers that form the core of an otherwise completed hardwood

plywood product.” Id. at 7.

       The Coalition’s revised proposed scope language included “certain veneered

panels” and removed all references to “veneer core platforms.” Compare Revised
Consol. Court No. 22-00049                                                          Page 22

Proposed Scope at 1, with, e.g., Plywood AD Order, 83 Fed. Reg. at 512; see also Pls.’

Mem. at 15–16 (summarizing the changes). While Commerce did not address the fact

that the Coalition added “certain veneered panels” to the proposed scope language at

the same time it added “other veneered panel[s],” to the court it appears anomalous for

Commerce to have accepted those additions but now disclaim any relationship between

the nearly identical terms. See Final Scope Ruling at 15. Instead, Commerce focused

on the Petition’s definition of the deleted term “veneer core platforms” to include a two-

ply panel. See id. at 15 & n.70 (citing, inter alia, Petition at 7). Commerce went on to

accept the Coalition’s position that the proposed scope language therefore covered two-

ply panels. See id. at 15 (stating that, “[a]s the petitioner notes, ‘the removal of the

phrase veneer core platforms did not change the scope to remove two-ply panels’”).

Commerce believed this fact to be “confirmed” by the addition of the reference to

“certain veneered panels” and Commerce’s decision, discussed in more detail below, to

retain the phrase “certain veneered panels” in the scope over requests to delete the

term. Id.

       While the Petition “may provide valuable guidance as to the interpretation of the

final order,” the Petition “cannot substitute for language in the order itself.” Duferco

Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002); see also id. at 1096–

98 (invalidating a scope ruling in which Commerce relied on language in a petition that

did not appear in the final order). Commerce’s explanation rests on finding an

equivalence between veneer core platforms and certain veneered panels. See Final

Scope Ruling at 15. However, as Commerce stated, “the record of this proceeding
Consol. Court No. 22-00049                                                        Page 23

contains no information relating to why the reference to veneer core platforms was

removed from the scope and certain veneered panels was added.” Id. (emphasis

added). Thus, Commerce’s explanation has no basis in the record and the Petition’s

references to veneer core platforms are of little, if any, value.

       Moreover, Commerce’s assumption that the original scope language proposed in

the Petition covered two-ply panels is unsupported. While the Coalition provided a

definition of veneer core platforms that included two-ply panels, see Petition at 7, the

actual scope language proposed by the Coalition specified products consisting of “two

or more layers or plies of wood veneers in combination with a core,” id. at 4 (further

stating that “[t]he veneers” (plural) are “glued or otherwise bonded” to “the core”). Thus,

while the Coalition may have defined veneer core platforms generally to consist of at

least two plies, the proposed scope language did not expressly include two-ply veneer

core platforms themselves and, instead, the scope appeared to require at least three

plies. See id.   22

22 The change from “veneers in combination with a core” to “veneers and a core” is
immaterial. While the hardwood plywood investigation was ongoing, Commerce issued
an interpretive note in the antidumping and countervailing duty proceedings concerning
multilayered wood flooring (“MLWF”) from China clarifying that the phrase “two or more
layers or plies of wood veneer(s) in combination with a core” means “wood flooring
products with a minimum of three layers.” Multilayered Wood Flooring From the
People’s Republic of China, 82 Fed. Reg. 27,799, 27,800 n.11 (Dep’t Commerce June
19, 2017) (final clarification of the scope of the antidumping and countervailing duty
orders); see also Final Scope Ruling at 24 & n.133 (citing an earlier yet substantively
identical clarification of the MLWF orders). Thus, the original scope language proposed
by the Coalition in the Petition, which incorporated the same language, reasonably must
be read to require a minimum of three plies. By their own terms, subsequent revisions
to the proposed scope language by the Coalition were intended to clarify—not change—
Consol. Court No. 22-00049                                                           Page 24

                  2. Commerce’s Preliminary Investigation Scope Memo

       As indicated above, in the Final Scope Ruling, Commerce also referenced its

decision during the investigations not to remove the reference to certain veneered

panels from the scope language. Final Scope Ruling at 15. By way of further

background, following initiation of the investigations, an interested party submitted

comments on the proposed scope language. Prelim. Inv. Scope Mem. at Cmt. 4. That

interested party argued that the phrase “‘certain veneered panels’ should be removed”

based on possible “confusion on covered products” given the lack of any “specific

description of the physical characteristics or uses that define ‘certain veneered panels’

as distinct from the specifically defined ‘hardwood and decorative plywood.’” Id.

According to Commerce, the Coalition responded as follows:

       Petitioners argue that the reference to “veneered panels” was included
       because the term “veneered panels” is a term used in the HTSUS and by
       the World Customs Organization (the WCO). Petitioners state that the
       WCO defines plywood as being “three or more sheets of wood glued and
       pressed one on the other and generally disposed so that the grains of
       successive layers are at an angle.” Petitioners state that [the] WCO
       defines a veneered panel, on the other hand, as a veneer of wood (in this
       case a hardwood) which has been affixed to a base (including the core) of
       inferior wood or a non-wood product. Petitioners state that an example of
       a veneered panel could be a three-ply hardwood panel with oak front and
       rear faces and with a core of particle board or a core of medium-density
       fiberboard (MDF).

the scope of the investigations. See Revised Proposed Scope at 1–2; cf. Def.-Int.’s
Resp. at 13 (in reference to the revisions, stating that “[t]he Coalition did not state that it
was modifying the universe of merchandise covered nor does anything on the record
indicate that this was the Coalition’s intent”).
Consol. Court No. 22-00049                                                         Page 25

Id. (footnotes omitted). Based on this response, Commerce retained certain veneered

panels in the scope and expressly determined that “this phrase means, in the context of

this investigation, a veneer of hardwood which has been affixed to a base (including the

core) of inferior wood or a non-wood product.” Id.

      Commerce’s discussion of this information from the investigation in the Final

Scope Ruling suffers from several flaws. First, Commerce’s attempt to dismiss the

Coalition’s earlier example of a three-ply panel as “a hardwood plywood product, rather

than a veneered panel,” Final Scope Ruling at 19, is unsupported by both the text and

context of the Preliminary Investigation Scope Memo. Indeed, the Government does

not defend this finding. See Def.’s Resp. at 14–17. The Coalition explicitly

characterized the example as “a veneered panel”; the example followed the Coalition’s

explanation of the WCO’s definition of a veneered panel; and the entire discussion was

intended to justify why Commerce should retain certain veneered panels in the scope.

See Prelim. Inv. Scope Mem. at Cmt. 4.

      Additionally, in the Final Scope Ruling, Commerce clearly altered its definition of

certain veneered panels without explaining the basis for the changes or why the

changes should not be considered an impermissible enlargement of the scope.

Commerce explained that its altered “definition is generally consistent with the

definition” used “in the explanatory notes of the HTS.” Final Scope Ruling at 16. While

that may be true, Commerce failed to explain why its “current understanding” of certain
Consol. Court No. 22-00049                                                      Page 26

veneered panels, id. at 17, comports with Commerce’s understanding of the phrase

during the investigation. 23

       In fact, Commerce’s definition of certain veneered panels in the investigation

appears to reconcile the scope language with the WCO’s definition of relevant terms.

The WCO defines “veneered panels” as “a thin veneer of wood affixed to a base,

usually of inferior wood, by glueing [sic] under pressure.” Finewood Suppl. Resp., Ex.

SQ1-50. The WCO defines plywood as “three or more sheets of wood glued and

pressed one on the other and generally disposed so that grains of successive layers are

at an angle.” Id. Commerce’s scope, which provides for a core layer consisting of “a

range of materials, including but not limited to hardwood, softwood, particleboard, or

medium-density fiberboard,” Plywood AD Order, 83 Fed. Reg. at 512, is inconsistent

with the WCO’s definition insofar as hardwood plywood defined by Commerce in the

scope may contain a non-wood core. Any such inconsistency is remedied, however, by

the inclusion of “certain veneered panels” when such products are generally understood

to have a core of an inferior wood or non-wood layer, see Finewood Suppl. Resp., Ex.

SQ-50, and by Commerce’s use of limiting language defining hardwood plywood solely

“[f]or purposes of this proceeding,” Plywood AD Order, 83 Fed. Reg. at 512.

23 At oral argument, the Government explained that Commerce considered the meaning
of the phrase certain veneered panels “more extensively” in the context of the scope
inquiry than it apparently had during the investigation. Oral Arg. 21:07–22:30.
Regardless, counsel’s explanation does not, however, operate to tie Commerce’s
current understanding of the phrase to the Commerce’s intent when it issued the
Plywood Orders.
Consol. Court No. 22-00049                                                       Page 27

                 3. Commerce’s Product Characteristics Memo

       Commerce maintained that the Product Characteristics Memo from the

investigation supported the finding that certain veneered panels “include products

composed of two or more plies.” Final Scope Ruling at 19. It does not. Taken as a

whole, Commerce’s Product Characteristics Memo substantiates an intent to include

three-ply—and only three-ply—in the scope of the investigations.

       In the Product Characteristics Memo, Commerce required respondents to report

a face veneer (fields 3.1 through 3.3); a back veneer (fields 3.4 through 3.5); and a core

(field 3.6). Prod. Characteristics Mem. at 1–5. Commerce considered these

characteristics necessary for CONNUM 24 purposes. See id. at 1. In field 3.6,

Commerce used the “other” option to instruct respondents to report “core layer[s] . . .

made of multiple materials,” but did not instruct respondents to use this option to report

the absence of a core layer. Id. at 5. In contrast, Commerce used the code “00” for “No

Surface Coating” in field 3.10 and “None” for “Minor Processing” in field 3.11, reserving

“Other” for reporting existent, but unspecified, information. Id. at 7–8. The Product

Characteristics Memo therefore indicates that Commerce did not contemplate

respondents reporting the absence of a core layer, as would be the case for two-ply

panels.

24 CONNUM refers to “control number,” which is a number designed to reflect the
“hierarchy of certain characteristics used to sort subject merchandise into groups” and
allow Commerce to match identical and similar products across markets. Bohler Bleche
GmbH & Co. KG v. United States, 42 CIT __, __, 324 F. Supp. 3d 1344, 1347 (2018).
Consol. Court No. 22-00049                                                          Page 28

         For the number of plies, Commerce instructed respondents to report anywhere

from three to 10 or more plies. Id. at 9. Commerce’s assertion in the Final Scope

Ruling that the Product Characteristics Memo contained “the option [for respondents] to

create their own two-digit code” for an unlisted number of plies, such as “02” for two

plies, is unsupported by the record. Final Scope Ruling at 19. The Product

Characteristics Memo listed codes for products with three to ten plies and contemplated

the creation of codes for “10-n” plies, i.e., more than 10 plies, but not for less than three

plies. Prod. Characteristics Mem. at 9. Commerce’s explanation again fails to account

for Commerce’s approach in other fields, which included “less than” options when

necessary. See id. at 3, 6, 8. While “the number of plies was not a physical

characteristic used to define the reported products,” Final Scope Ruling at 19,

Commerce offers no explanation for the lack of an explicit option to report two plies if, in

fact, as Commerce now contends, two-ply panels were always considered to be in-

scope.

                     4. The ITC Report

         Lastly, the ITC Report indicates that the ITC understood the subject merchandise

to include three-ply products generally referenced as hardwood plywood. The ITC

Report stated:

         In our preliminary determinations, we defined a single domestic like
         product, coextensive with the scope of these investigations. We found
         that all hardwood plywood consisted of two or more layers of wood veneer
         glued to a core and was used in a range of interior applications.

               ***
Consol. Court No. 22-00049                                                      Page 29

      Information in the final phase of these investigations about the
      characteristics of hardwood plywood is the same as that in the preliminary
      phase. Accordingly, we again define a single domestic like product
      corresponding to the scope.

Pls.’ Prelim. Scope Cmts. at 8–9 (quoting ITC Report at 9–10). 25 The ITC Staff Report

also described U.S. producers’ hardwood plywood production to include the pressing of

face and back veneers to a core. See Resp. to the Dep’t’s Request for Add’l Info. (Apr.

20, 2021), Ex. 2, PR 94, CJA Tab 19 (reproducing ITC Report at I-16).

      Commerce dismissed Finewood’s arguments concerning the ITC’s three-ply

definition of hardwood plywood as “irrelevant” based on its theory that certain veneered

panels and hardwood plywood “are distinct and separate” products. See Final Scope

Ruling 13. Commerce also deemed it insignificant that the ITC Report contained no

references to two-ply panels. See id. Commerce explained that the scope description

provided to the ITC referenced “certain veneered panels” and the ITC found the

25While Commerce maintained that it cited only to portions of the ITC Report that
parties had placed on the record, see Final Scope Ruling at 12–13, Commerce later
acknowledged that no party placed page 9 of the ITC Report on the record, see Confid.
Def.’s Post-Arg. Submission at 1, ECF No. 56. Nevertheless, Commerce cited to page
9 of the ITC Report to support its preliminary ruling, see Prelim. Scope Ruling at 21 &
n.122; Commerce did not reject Finewood’s subsequent citations to that page or any
other page of the ITC Report, see Commerce’s Dec. 10 Ltr. at 2; and, in the Final Scope
Ruling, Commerce reiterated the ITC’s finding of a single like product coextensive with
the scope of the investigations, see Final Scope Ruling at 13 & n.57 (citing Pls.’ Prelim.
Scope Cmts. at 8–9, in turn citing ITC Report at 9–10). It is therefore clear that
Commerce considered at least this additional portion of the ITC Report that was
apparently never placed on the record. The court will therefore direct Commerce to
correct the administrative record such that it includes “all information presented to or
obtained by the [agency]” pursuant to 19 U.S.C. § 1516a(b)(2)(A)(i) and CIT Rule
73.2(a)(1) or explain why correction is inappropriate.
Consol. Court No. 22-00049                                                         Page 30

domestic like product to be coextensive with the scope. Id. Commerce also stated that

the ITC did not expressly exclude two-ply panels from its investigation. Id. at 13–14.

       The lack of an express exclusion is beside the point. The purpose of a scope

ruling is, first and foremost, to ascertain whether the scope can “reasonably be

interpreted to include” the contested merchandise. Duferco, 296 F.3d at 1905. Thus,

“Commerce cannot find authority in an order based on the theory that the order does

not deny authority” to include two-ply as a result of an express exclusion. Id. at 1096.

With respect to whether the ITC Report supports including two-ply in the scope,

Commerce’s reasoning is entirely circular. The issue is not whether the ITC referenced

“certain veneered panels” in the report but whether the ITC understood the phrase to

mean, and thus clearly investigated, two-ply panels. See Pls.’ Mem. at 21–22.

Commerce points to no affirmative record evidence that the ITC did so. In the absence

of any such affirmative evidence, either of inclusion or exclusion of two-ply panels, the

court finds that the ITC Report is inapposite to whether two-ply panels were included in

the scope of its injury investigation. 26

26The Coalition’s argument that the ITC’s definition of the domestic like product should
not be read to include the universe of covered products is not persuasive. Def.-Int.’s
Resp. at 16–17 (asserting that the ITC only referenced “gluing” when the scope
provides that subject merchandise “may be glued or otherwise bonded together”). The
ITC acknowledged that hardwood plywood products may be differentiated by, among
other things, “the type of adhesive used in the manufacturing process.” Pls.’ Prelim.
Scope Cmts. at 27 (quoting ITC Report at I-14).
Consol. Court No. 22-00049                                                          Page 31

                  5. Summary and Conclusion

       When read in light of the (k)(1) sources, it is clear that the scope of the Plywood

Orders unambiguously covers hardwood plywood and certain veneered panels that, for

purposes of the underlying proceeding, and from the second scope sentence onward,

are collectively described as hardwood plywood “consisting of two or more layers or

plies of wood veneers and a core,” i.e., at least three plies. Commerce’s Final Scope

Ruling is therefore not in accordance with the law and will be remanded for Commerce

to issue a ruling consistent with this opinion.

       II.    Commerce’s Rejection of Finewood’s Citations to (k)(1) Sources

       Commerce rejected portions of Finewood’s comments on the preliminary scope

ruling. Commerce’s Dec. 10 Ltr. Commerce took issue with Finewood’s references to

sections of the Coalition’s scope comments from the investigation that were not

previously included in the factual submissions. Id. at 2.

              A. Parties’ Contentions

       Plaintiffs contend that “Commerce must consider [the Coalition’s] submissions

during the initial . . . investigation regardless of whether any party put portions of the

investigation materials on the record of the scope inquiry.” Pls.’ Mem. at 25; see also

Pls.’ Reply at 12–13. 27 Plaintiffs base their argument on language in the regulation

27Plaintiffs’ argument appears to be two-fold: 1) that Commerce unlawfully rejected
Finewood’s citations to the Coalition’s scope comments, and 2) that Commerce was
required to consider the complete ITC Report regardless of whether the ITC Report was
placed on the record in its entirety. See Pls.’ Mem. at 24–25; Oral Arg. 1:06:00–
1:07:05. Because Commerce did not take any adverse action with respect to
Consol. Court No. 22-00049                                                        Page 32

stating that Commerce “will take into account” the (k)(1) sources, Pls.’ Mem. at 25

(quoting 19 C.F.R. § 351.225(k)(1)), and on case law they assert supports their position,

id. at 26 (citing Meridian 2018, 890 F.3d at 1272; TMB 440AE, Inc. v. United States, 43

CIT __, 399 F. Supp. 3d 1314 (2019); Saha Thai Steel Pipe Pub. Co. v. United States,

45 CIT __, 547 F. Supp. 3d 1278 (2021)). Plaintiffs contend that the (k)(1) sources

constitute “legal authority that Commerce must consult.” Id. at 27.

       The Government argues that Commerce was within its discretion to reject the

untimely new factual information. Def.’s Resp. at 31–33. The Coalition contends that

Plaintiffs’ cited cases are inapposite. Def.-Int.’s Resp. at 29–30.

              B. The Court Will Sustain Commerce’s Determination

       At issue is the following language from Commerce’s scope regulation: “in

considering whether a particular product is included within the scope of an order or a

suspended investigation, [Commerce] will take into account the following [sources.]” 19

C.F.R. § 351.225(k)(1) (emphasis added). A review of the surrounding provisions and

other relevant regulations, along with case law, supports Commerce’s characterization

of the (k)(1) sources as factual information and application of corresponding deadlines.

       Subsection (c) of 19 C.F.R. § 351.225 explains the process for parties to apply

for a scope ruling. That provision states that a party applying for a scope ruling must

include “[a]ny factual information supporting this position, including excerpts from

Finewood’s extra-record citations to the ITC Report and Plaintiffs do not point to any
specific parts of the ITC Report that Commerce failed to address, the court leaves open
the question whether the ITC Report, which is a public document, should be treated
differently from other (k)(1) sources.
Consol. Court No. 22-00049                                                         Page 33

portions of [Commerce’s] or the Commission’s investigation, and relevant prior scope

rulings.” 19 C.F.R. § 351.225(c)(ii)(C) (emphases added). These sources, which

Commerce identifies as factual information, encompass those listed in subsection (k)(1).

See id. § 351.225(c)(ii)(C), (k)(1). Additionally, 19 C.F.R. § 351.102(21) defines

“[f]actual information” broadly as “[e]vidence.” The (k)(1) sources are considered

evidence of Commerce’s understanding of the scope of its order at the time it issued the

order. See, e.g., Fedmet Res. Corp. v. United States, 755 F.3d 912, 921 (Fed. Cir.

2014) (stating that “(k)(1) sources are afforded primacy in the scope analysis . . .

because interpretation of the language used in the orders must be based on the

meaning given to that language during the underlying investigations”).

       Plaintiffs’ reliance on Commerce’s use of the term “will” in the regulation is not

persuasive of a different interpretation. See Pls.’ Mem. at 25. While terms such as

“will” or “shall” often “convey a command rather than a discretionary choice,” Ad Hoc

Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, 16 CIT

1008, 1012, 808 F. Supp. 841, 845 (1992), courts have recognized that, when used

“against the government, the word ‘shall,’ when used in statutes, is to be construed as

‘may,’ unless a contrary intention is manifest,” id. (quoting Barnhart v. United States, 5

CIT 201, 203, 563 F. Supp. 1387, 1389 (1983), in turn quoting Cairo & F.R. Co. v.

Hecht, 95 U.S. 168, 170 (1877)).

       Further, “[a]s with a statute, the intent of a regulation may best be determined by

its language.” Id. Plaintiffs overlook Commerce’s consistent use of “will” in subsection

(k)(2) of the regulation, which states: “[w]hen the above criteria are not dispositive,
Consol. Court No. 22-00049                                                         Page 34

[Commerce] will further consider [additional factors.]” 19 C.F.R. § 351.225(k)(2)

(emphasis added). The materials listed in subsection (k)(2) consist of factual

information. See id. (listing “physical characteristics of the product[,]” “channels of trade

in which the product is sold[,]” and the “manner in which the product is advertised and

displayed”). Consequently, the term “will” in both subsections (k)(1) and (k)(2) must be

considered and applied in light of the factual record. It would be inconsistent to

construe “will” in subsection (k)(1) to require Commerce to consider extra-record

materials while construing “will” in subsection (k)(2) to hold a more limited meaning. Cf.

Mil.-Veterans Advocacy v. Sec’y of Veterans Affairs, 7 F.4th 1110, 1147 (Fed. Cir.

2021) (“[I]t is a well-established canon of statutory construction that Congress is

presumed to have intended for ‘identical words used in different parts of the same act . .

. to have the same meaning.’) (citation omitted). 28

       Lastly, Plaintiffs’ case citations are misplaced. While courts frequently recite the

regulatory steps Commerce must follow for the issuance of a scope ruling and may

direct Commerce to consider the (k)(1) sources, none of the cited cases addressed the

question whether Commerce must consider extra-record information. See Meridian

2018, 890 F.3d at 1277 (clarifying the legal framework); TMB 440AE, Inc., 399 F. Supp.

3d at 1322 (remanding for Commerce to conduct a (k)(1) analysis); Saha Thai, 547 F.

Supp. 3d at 1290 (same).

       Accordingly, Commerce’s decision on this issue will be sustained.

28While this presumption may be overcome, see, e.g., Nike, Inc. v. Wal-Mart Stores,
Inc., 138 F.3d 1437, 1445 (Fed. Cir. 1998), Plaintiffs offer no arguments in this regard.
Consol. Court No. 22-00049                                                           Page 35

       III.   Commerce’s Rejection of IGF’s Scope Comments

       As previously stated, Commerce rejected IGF’s initial and rebuttal scope

comments. IGF did not challenge those decisions in its complaint or its moving brief. 29

In its response brief, the Government argued that Commerce’s rejection of IGF’s scope

comments meant that any arguments of IGF that differed from Plaintiffs were not

exhausted before Commerce, no exception to the exhaustion doctrine applies, and,

therefore, those arguments should not be considered by the court. Def.’s Resp. at 34

(citing Consol. Pl.’s Mem. at 16–17, 19–20, 43, 46–49); see also Def.-Int.’s Resp. at 30–

31 (advancing similar arguments).

       In its reply brief, IGF purports to address the issues of waiver and exhaustion.

See Consol.-Pl.’s Reply at 1 (summarizing the issues). IGF does not, however, address

these issues. Instead, IGF presents new substantive arguments against Commerce’s

rejection of its initial and rebuttal scope comments. Id. at 2–10.

       The court declines to consider IGF’s arguments. It is well-established “that

arguments not raised in the opening brief are waived.” SmithKline Beecham Corp. v.

Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006). This principle is also reflected in

the court’s rules, which require movants to include in their Rule 56.2 briefs “the

authorities relied on and the conclusions of law deemed warranted by the authorities.”

U.S. Court of International Trade (“CIT”) Rule 56.2(c)(2). Because IGF did not contest

29In its statement of the case, IGF asserted that “Commerce falsely claimed that it need
consider only information that either Commerce or the parties put on the record.”
Consol. Pl.’s Mem. at 6. IGF did not, however, support its assertions of falsehood with
substantive argument.
Consol. Court No. 22-00049                                                          Page 36

Commerce’s rejection of IGF’s initial and rebuttal scope comments in its moving brief,

IGF waived any such arguments offered for the first time in its reply brief.

       Without any basis for remanding Commerce’s rejection of IGF’s scope

comments, IGF failed to exhaust its administrative remedies with respect to arguments

raised for the first time in its moving brief. “[T]he [CIT] shall, where appropriate, require

the exhaustion of administrative remedies.” 28 U.S.C. § 2637(d). While exhaustion is

not jurisdictional, Weishan Hongda Aquatic Food Co., Ltd. v. United States, 917 F.3d

1353, 1363–64 (Fed. Cir. 2019), the statute “indicates a congressional intent that,

absent a strong contrary reason, the [CIT] should insist that parties exhaust their

remedies before the pertinent administrative agencies,” id. at 1362 (quoting Boomerang

Tube LLC v. United States, 856 F.3d 908, 912 (Fed. Cir. 2017)) (alteration in original).

IGF does not present any reasons—let alone strong reasons—why the court should

decline to apply the exhaustion doctrine here. Further, while certain exceptions to this

general rule exist, none would appear to apply in this instance. Accordingly, to the

extent IGF raises arguments not otherwise raised before Commerce by Plaintiffs and

considered herein, the court does not consider those arguments.

       IV.    Finewood’s Participation In This Case

       In their moving brief, Plaintiffs asserted that Finewood ceased operations in

November 2018 and dissolved in September 2019. Pls. Mem. at 6. Based on that

representation, at oral argument, the court requested parties to address Finewood’s

capacity to sue in this court, whether any such challenges have been waived, and

Finewood’s standing to remain in the action. Letter to Counsel (Mar. 16, 2023) at 3,
Consol. Court No. 22-00049                                                            Page 37

ECF No. 52. The court noted that Rule 17 “states that capacity to sue is determined, for

corporations, ‘by the law under which it was organized,’ and ‘for all other parties, by the

law of the appropriate state,’” id. (quoting CIT Rule 17(b)(2)–(3)), and that Rule 9

requires opposing parties to “raise any issues regarding capacity ‘by a specific denial’

and with ‘supporting facts that are peculiarly within the party’s knowledge,’” id. (quoting

CIT Rule 9(a)(2)). The court further noted that “[c]apacity to sue is distinct from

standing, which is a jurisdictional requirement that must be maintained throughout the

action.” Id.

       Plaintiffs chose not to provide substantive arguments supporting Finewood’s

presence in this action, explaining that the action would continue under the named

importer plaintiffs regardless of Finewood’s participation. Oral Arg. 1:32:00–1:32:25.

Noting that Finewood alleged incorporation under the laws of Vietnam, the Government

stated that it was unable to take a position based on the lack of information regarding

Finewood’s status under Vietnamese law. Id. 1:32:30–1:33:20; see also Compl. ¶ 1.

       The court need not take a position on the issue of capacity (or waiver in relation

thereto) because it finds that Finewood must be dismissed for lack of standing. In order

to have standing, a “plaintiff must have suffered an ‘injury in fact’—an invasion of a

legally protected interest” that is “concrete and particularized” and “actual or imminent”;

the injury must be “fairly traceable” to the challenged action; and there must be a

substantial likelihood that the relief requested will redress or prevent the plaintiff’s injury.

Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–561 (1992). Additionally, “[t]he party

invoking federal jurisdiction bears the burden of establishing these elements.” Id. at
Consol. Court No. 22-00049                                                          Page 38

561. Finewood failed to identify any interest that is legally protected in light of the

company’s dissolution or otherwise to establish the possibility of redress. 30 Thus,

Finewood will be dismissed from the action and the clerk will be directed to recaption

the action accordingly.

                                  CONCLUSION AND ORDER

       In accordance with the foregoing, it is hereby

       ORDERED that Commerce’s Final Scope Ruling is remanded for Commerce to

issue a scope ruling concerning Finewood’s two-ply panels that is consistent with the

unambiguous meaning of the Plywood Orders discussed herein; it is further

       ORDERED that Commerce’s treatment of Finewood’s initial scope comments

and its rejection of IGF’s initial and rebuttal scope comments are sustained; it is further

       ORDERED that, on or before May 4, 2023, Commerce must correct the

administrative record or provide an explanation as to why correction is inappropriate,

consistent with footnote 25 of this opinion; it is further

       ORDERED that Finewood is dismissed from the action and the clerk is directed

to amend the caption of this action accordingly; it is further

       ORDERED that Commerce shall file its remand redetermination on or before

June 20, 2023; it is further

30 In parallel litigation challenging CBP’s affirmative EAPA determination, the court
denied Finewood’s motion to intervene on similar grounds, finding that Finewood had
failed to establish a legally protected interest in the action as required pursuant to CIT
Rule 24(a)(2). See Order, Far East Am., Inc. v. United States, Consol. Ct. No. 22-cv-
213 (Oct. 7, 2022), ECF No. 33.
Consol. Court No. 22-00049                                                   Page 39

         ORDERED that subsequent proceedings shall be governed by CIT Rule 56.2(h);

and it is further

         ORDERED that any comments or responsive comments must not exceed 3,000

words.

                                              /s/   Mark A. Barnett
                                              Mark A. Barnett, Chief Judge

Dated: April 20, 2023
      New York, New York