Trade Court Upholds Evasion Finding on Cabinet, Vanity Importer

Originally, CBP's Trade Remedy Law Enforcement Division (TRLED) found that Scioto evaded the AD/CVD orders, though its decision was reversed by CBP's Office of Regulations & Rulings (OR&R). TRLED centered on Scioto's "Chinese affiliations," including the fact that its wholly owned by Chinese company Qingdao Haiyan Group; the importer's relationship with Malaysian supplier Alno Industry, which also is wholly owned by Haiyan; and Alno's non-affiliated transactions. In a separate evasion case, importer Cabinets to Go, a customer of Alno, was found to have evaded the AD/CVD orders.

OR&R reversed the initial evasion finding on the grounds that there was no evidence that wooden cabinets and vanities made in China were transshipped through Malaysia and imported by Scioto. Wang previously remanded this conclusion on the grounds that OR&R failed to consider various pieces of evidence, including "the extent of the Haiyan Group’s operational control of Scioto and Alno"; Scioto's ownership of Alno during a time Alno was found to have evaded the AD/VCD orders; and the contents of one of Alno's warehouses that held subject goods of Chinese, Malaysian and unmarked origin (see 2411250023).

On remand, OR&R reversed its negative evasion finding (see 2501310016). The agency said the contents of Alno's additional warehouse backed a finding of evasion, as did Alno's purchase and receipt of subject goods from China and the fact that neither Alno nor Scioto had sufficient systems in place to let either company confirm which customers received cabinets and vanities made in "Malaysia vs. China." OR&R also found photographs that the goods stored in the warehouse, which included cabinets and vanities of Chinese, Malaysian or unmarked origin, were "commingled." OR&R also discussed the "complete" control Haiyan exerts over Alno and Scioto.

Scioto argued that the evasion finding was legally deficient, since CBP must find that the importer actually imported covered merchandise through evasion, adding that OR&R only relied on "speculation on what might have happened." Wang rejected this claim, resting on the evasion statute's definition of the term "evasion" as entering covered merchandise via "any" false or omitted material statement. The judge said, as a result, "a finding by Customs of any information, data, or act that is material and false, or a finding by Customs of any material omission, must result in a finding of evasion under the statute."

Here, while CBP said the evidence of evasion is mixed, the agency concluded that Scioto entered covered merchandise through evasion. Wang said she "will not second-guess Customs’ findings of information, actions, and omissions by Scioto that satisfy the definition of evasion." The judge added that Scioto "confuses the burden of proof required" in evasion proceedings, since it's the "party submitting information to Customs that bears the burden of providing accurate information."

While Scioto also said CBP could have asked for production documents for other entries, the court said this claim is "contradicted by the record." Alno failed to produce documents, such as packing check lists and documentation for shipments of cabinets and vanities despite repeated requests from TRLED. This failure to produce such documents "stands in contrast" with Scioto's claim that Alno was ready and willing to provide additional documentation, the court noted. Relatedly, Wang held that the record shows that CBP gave Scioto "several opportunities to submit documentation or other evidence that its entries could be linked to specific production batches."

Wang also said that the evasion finding wasn't arbitrary and capricious. While Scioto attacked the evidentiary basis for the evasion finding and said that evidence it submitted was more reliable, the judge said the court isn't in the business of reweighing evidence.

The importer argued that CBP "should have relied on the reasonable finding that Chinese ownership is insufficient to establish transshipment," along with the production and shipment documents provided by Alno, to find that the goods imported by Scioto were made in Malaysia. Wang said the court doesn't "pick and choose among the record evidence preferred by one party." Instead, CBP's finding "needs only be reasonable for the court to uphold its determination," the court said.

The judge pointed to CBP's discussion of the facts, including Alno's involvement in a separate evasion scheme, Haiyan's degree of control over Scioto and Alno, the fulfillment of purchase orders from a warehouse that commingled Chinese and Malaysian origin goods and the failure to "demonstrate sufficient tracking controls."

"Customs provided a rational connection between these facts and its conclusion, and the cited evidence reasonably and adequately supports Customs’ findings," the court said.

Lastly, Wang rejected Scioto's claim that CBP violated its due process rights. While no party disputes that TRLED violated these rights by failing to provide the importer's counsel with access to the business proprietary information in the case, the judge held that Scioto failed to show this error wasn't remedied on remand.

Luke Meisner, counsel for the American Kitchen Cabinet Alliance, said in an email that the alliance is "thrilled that the government is holding these companies accountable for their evasion of the AD/CVD duties and ensuring that that strong relief is being provided to U.S. cabinet producers." He added that "the court played a vital role in forcing the government to examine all the evidence and reach the right decision. This result is precisely why Congress granted the right to judicial review for EAPA proceedings."

(American Kitchen Cabinet Alliance v. United States, Slip Op. 25-120, CIT # 23-00140, dated 09/12/25; Judge: Lisa Wang; Attorneys: Luke Meisner of Schagrin Associates for plaintiff American Kitchen Cabinet Alliance; Mikki Cottet for defendant U.S. government; Stephen Brophy of Husch Blackwell for defendant-intervenor Scioto Valley Woodworking, Inc.)