CIT Says Customs Properly Supported AD/CVD Evasion Finding on Plywood From Cambodia

The original evasion finding stemmed from CBP's conclusion that LB Wood couldn't have made all the plywood it claimed to make in Cambodia and that the company "commingled" locally made and Chinese made plywood for export to InterGlobal. CBP asked for a remand in the importers' lawsuit on the evasion determination following the U.S. Court of Appeals for the Federal Circuit's decision in Royal Brush Manufacturing v. U.S., which said parties in evasion cases must be given access to business proprietary information relied on by CBP.

Baker opened his consideration of CBP's remand decision, which continued to find the importers evaded the AD/CVD orders, with a discussion of the appropriate standard of review. The judge identified an ongoing dispute in the legal community about whether there truly is a difference between the "substantial evidence" and "arbitrary and capricious" standards of review.

The judge said he "confesses to agreeing with those" who argue that "fine-grained disputes over the relative intensities of supposedly different types of rationality review betray an unrealistic understanding of the real nature of judicial capacities.” However, Baker said he's bound by the Federal Circuit's ruling in In re Gartside, which said the substantial evidence standard is "less deferential" than the arbitrariness standard of review.

InterGlobal had argued that CBP's remand decision ignores the agency's previous finding that the orders only cover plywood containing at least three plies and that its imports have less than three plies. Baker held that the importer "cites no record evidence for this proposition" and also failed to raise the issue before CBP on remand "when it had the opportunity to do so."

InterGlobal also criticized CBP's June 6, 2018, visit to LB Wood's factory. The importer argued that the inspection took place a year before the start of the investigation, "there was no follow-up visit," the agency representative didn't explain her expertise, and the only evidence provided by the official who conducted the inspection was eight photographs taken during the visit.

Baker took each claim in turn, finding that they are all either incorrect or misguided. For instance, the inspection took place during the investigation, albeit one day after its start, the court noted. While InterGlobal argued that the evidence it submitted on remand, which included declarations from its COO Kurt Winn and LB Wood's manager Fu Wenjie, rebutted CBP's evasion finding, Baker said it's not his role to re-weight the evidence but merely to assess whether CBP's decision is backed by substantial evidence.

And while InterGlobal doesn't "seriously contend" CBP overlooked the Winn declaration, the importer did argue that CBP arbitrarily disregarded the Wenjie declaration. However, Baker said the agency did no such thing. Instead, CBP said the document "adds no substantive value," since it "restates information already" put on the record, and contained certain aspects calling its credibility into question. "This was reasoned decision making, not an agency run amok," the court said.

InterGlobal also argued that the Enforce and Protect Act, under which CBP made its evasion finding, requires a "degree of culpability." Baker rejected this argument, finding that EAPA must be "read as a whole," adding that the statute backs CBP's "strict liability interpretation" of the law.

The statute's definition of evasion "excludes material false statements or material omissions resulting from 'clerical error,'" and even this exception has its own exception "for any clerical error that 'is part of a pattern of negligent conduct,'" the court noted. Baker backed the trade court's ruling in Ikadan System USA v. U.S., which said all that's required for EAPA liability is an importer's entry of covered merchandise without declaring it subject to AD/CVD orders, as was the case here.

And while InterGlobal argued that it took "reasonable care" to confirm Cambodia was the appropriate country of origin of its goods, the judge said this theory of liability "fails because an importer does not use reasonable care when it enters covered goods through a material false statement or material omission that avoids antidumping and/or countervailing duties." At minimum, this type of entry stems from "negligence, because it departs from what a 'reasonably prudent careful' importer would do 'under similar circumstances,'" the court said. The only negligence excused by EAPA are clerical errors, which InterGlobal doesn't claim, Baker held.

The importer also faulted CBP for only opening its investigation based on trade data on China, Cambodia and the U.S., claiming that there is "conflicting" data the agency refused to reconcile. While CBP admitted on remand it considered this data in part, Baker said InterGlobal failed to identify where CBP relied on these "purportedly conflicting data sets to find evasion on the company's part" at any point, and, in any event, CBP's reliance on the data "was harmless error in light of the agency's extensive findings based on LB Wood's activities."

Lastly, InterGlobal asked the court to take judicial notice of a pair of cases in which the government settled two customs cases and agreed that plywood entries from a different importer but which were also made by LB Wood are of Cambodian origin. The importer argued that CBP is "judicially estopped from contradicting its concession" in these two cases that plywood exported by LB Wood was of Cambodian origin.

Baker said the doctrine of judicial estoppel, which says a party is estopped from taking a position that's "clearly inconsistent" with a position it took prior, likely doesn't apply here. The judge noted that the other two elements of the doctrine require that a party has "succeeded in persuading a court" to accept its earlier position and that the party's "assertion of an inconsistent position would give it an unfair advantage over the opposing party absent estoppel."

The judge said the doctrine doesn't fit, since CBP didn't "succeed" in persuading the court of anything in the other two cases. Instead, the agency "gave up and confessed error, either directly or by stipulated judgment." CBP's position in the other two cases "was plainly consistent with the one it asserts here -- that LB Wood did not manufacture all the plywood it exported to the U.S. -- but it then ran up the white flag."

"Just as wars are not won by surrendering, lawsuits are not won by confessing error," the judge said.

(American Pacific Plywood v. United States, Slip Op. 25-87, CIT Consol. # 20-03914, dated 07/09/25; Judge: M. Miller Baker; Attorneys: Thomas Cadden of Cadden & Fuller for InterGlobal Forest, LLC; Brian Boynton for defendant U.S. government; Timothy Brightbill of Wiley Rein for defendant-intervenor Coalition for Fair Trade in Hardwood Plywood)