CAFC Judges Question Its Standard of Review in AD/CVD Scope Case on Door Thresholds

Judges at the U.S. Court of Appeals for the Federal Circuit during a July 11 oral argument probed the government and parties to an antidumping and countervailing duty scope case on its standard of review in the scope case. Judge Sharon Prost said at the outset that the court is "being very careful" in terms of what it says on standard of review issues in "light of all of the recent opinions and litigation concerning standard of review" in administrative law issues (Worldwide Door Components v. United States, Fed. Cir. # 23-1532).

During the first portion of the argument, Prost, along with judges Richard Linn and Todd Hughes, probed DOJ attorney Claudia Burke on the court's standard of review in the scope case, given the convoluted procedural process of the suit. The Commerce Department originally said that aluminum thresholds in importers Worldwide Door Components' and Columbia Aluminum Products' door thresholds were covered by the scope of the AD/CVD orders on aluminum extrusions from China.

The Court of International Trade remanded this decision three times until Commerce said, under protest, that the companies' door thresholds are finished merchandise and excluded from the AD/CVD orders. AD/CVD petitioner Aluminum Extrusions Fair Trade Committee appealed the decision, which the government declined to join as a party.

The appellate court nevertheless asked the U.S. for a briefing on which of Commerce's decisions -- the original scope finding or three remand determinations -- the appellate court owed deference (see 2407080013). During oral argument, Prost asked if the court should show deference to a Commerce decision made under protest.

Burke told the Federal Circuit not to defer to decisions which Commerce made under protest even if the government has declined to join the appeal. The DOJ attorney said that the Federal Circuit should review questions about the meaning of scope language de novo but review fact-based issues of whether goods are subject to an AD or CVD order's scop under the "substantial evidence" standard.

Hughes said he was inquiring about which decision during the case to review because he doesn't believe that Commerce's original scope ruling was "good enough."

Litigants for Worldwide and the petitioner echoed the DOJ's understanding, though Enbar Toledano, counsel for the petitioner, said the Federal Circuit has answered the legal question in this case. The appellate court previously held that a good cannot simultaneously be a subassembly and a finished product and that the definition of subassembly -- a legal question -- has been answered. That only leaves the question of whether Worldwide's and Columbia's door thresholds are subassemblies -- a decision to be reviewed as supported by substantial evidence or not.

John Foote, counsel for Worldwide, largely echoed these points, though he said that there remains one legal issue in the case: whether Commerce, after finding that a product is a subassembly, has to look to the rest of the scope language and consider whether the product is a finished good.

Hughes, Prost and Linn repeatedly asked Foote why the agency would have to move to consideration of whether the goods were finished products if it determined they were subassemblies.

The remainder of the argument concerned the parties' arguments on whether the importers' door thresholds qualified as finished products or subassemblies, with much attention paid to the scope's orders, which Hughes called "very confusing." This confusion was highlighted when the parties discussed the court's prior ruling on solar panel mounts and the exemplar of door handles. Foote said a door threshold is more akin to a solar panel, which would be a finished product, and not like a door handle, which is not.

To this, Foote said that the door threshold is a "final article of commerce that is bought and sold, as is." Hughes said he could go to Lowe's hardware store and buy a door handle too.

Toledano said that the scope's list of finished goods and subassemblies doesn't have much "rhyme or reason." She said that line-drawing is "never easy," and that all that matters for this case is whether Commerce's scope decision doesn't contradict the plain terms of the AD or CVD order or change them.