author: WALLACH, Circuit Judge.

text:
    SCHLUMBERGER TECHNOLOGY CORPORATION, Plaintiff-Appellee v. UNITED STATES, Defendant-Appellant
    2015-2076
    United States Court of Appeals, Federal Circuit.
    Decided: January 9, 2017

      Alexander Schaefer, Crowell & Mor-ing, LLP, Washington, DC, argued for plaintiff-appellee. Also represented by John Bowers Brew, David Cooper Wolff; Franoes Pierson Hadfield, New York, NY.
    Aimee Lee, Appellate Section, International Trade Litigation, United States Department of Justice, New York, NY, argued for defendant-appellant. Also represented by Amy M. Rubin, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY; Jeanne E. Davidson, Benjamin C. Mizer, Washington, DC; Michael W. Heydrich, Edward N. Maurer, Office of Assistant Chief Counsel, United States Customs and Border Protection, New York, NY.
    Before O’MALLEY, WALLACH, and TARANTO, Circuit Judges.
   WALLACH, Circuit Judge.

The instant appeal concerns the proper classification of bauxite proppants imported by Appellee Schlumberger Technology Corporation (“Schlumberger”) in 2010. U.S. Customs & Border Protection (“Customs”) classified the subject merchandise under Subheading 6909.19.50 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Schlumberger appealed Customs’s classification to the U.S. Court of International Trade (“CIT”). The CIT rejected Customs’s classification and, instead, entered summary judgment that the subject merchandise should enter under HTSUS 2606.00.00. Schlumberger Tech. Corp. v. United States, 91 F.Supp.3d 1304,1324 (Ct. Int’l Trade 2015).

Appellant, the United States (“Government”), appeals. We possess subject matter jurisdiction pursuant to 28 U.S.C. § 1295(a)(5) (2012). We affirm the CIT.

Background

The parties do not dispute the facts material to the resolution of the classification question before us. We discuss in turn the facts relevant to the subject merchandise, Customs’s classification, and the CIT’s decision before turning to the merits.

I. The Subject Merchandise

Schlumberger, an oil well services provider, J.A. 119, imported the subject bauxite proppants from the People’s Republic of China, J.A. 1729. Schlumberger used the subject merchandise in hydraulic fracturing services that it provided to customers in the United States. J.A. 126. The subject merchandise, when combined with other materials after importation, increased oil well productivity by preventing fractures in rock formations from closing. J.A. 126,129, 281.

The subject bauxite proppants consisted of two models: “S580-2040 Ceramic Prop-pant[s]” (“2040 Proppants”) and “S580-4070 Ceramic Proppant[s]” (“4070 Prop-pants”). J.A. 119-20. “S580” referred to the designation used by Schlumberger for bauxite proppants produced by a specific third-party supplier, J,A. 125, and “2040” and “4070” referred to the “size of sieves through which the proppants can fit,” J.A. 123. Each model primarily consisted of “non-metallurgical bauxite,” but the precise chemical composition of the merchandise is unknown because neither party retained a sample of the merchandise. J.A, 1729; see J.A. 498-510. Each model measured less than a millimeter in diameter and possessed specific physical characteristics with associated values for crush resistance (i,e., strength), specific density, roundness, and sphericity. J.A. 122-23.

The production of the subject merchandise involved the following steps. First, “[t]he raw materials of the subject prop-pants were milled or ground to a fine powder.” J.A. 126. Second, the resulting powder underwent a granulation process in a pan granulator, which resulted in “larger sized particles from the milled particles.” J.A. 124. Third, “the particles [were] sorted” to determine whether they met the required size specifications and, if so, the particles were dried. J.A. 124-25. Fourth, the particles that fell within the required size specifications were kiln fired. J.A. 125. Fifth, after firing, the particles were sorted anew to ensure that ninety percent of them fell within the required size specifications. J.A. 125. Finally, the particles that met the previous steps were packed in bulk in 3,200 pound bags and exported to the United States as the subject bauxite proppants. J.A. 125.

II. Procedural History

Customs classified the subject bauxite proppants under HTSUS 6909.19.50 at a duty rate of four percent ad valorem. J.A. 120-21. The subheading selected by Customs covers “Ceramic wares for laboratory, chemical, or other technical uses; ceramic troughs, tubs and similar receptacles of a kind used in agriculture; ceramic pots, jars and similar articles of a kind used for the conveyance or packing of goods: Other: Other.” HTSUS 6909.19.50. Schlumberger contested the classification in separate protests, arguing that the subject merchandise should enter duty free under HTSUS 2606.00.0060 as “Aluminum ores and concentrates: Bauxite, calcined: Other.” J.A. 109-10; see J.A. 162, 194. Customs denied the protests, and Schlumberger appealed to the CIT. J.A. 107-12.

Following cross-motions for summary judgment, the CIT rejected Customs’s classification and entered summary judgment that the subject bauxite proppants should enter under HTSUS 2606.00.00. See Schlumberger, 91 F.Supp.3d at 1323-24. In relevant part, the CIT reasoned that the applicable interpretive rules “precludefd]” classifying the subject merchandise under HTSUS 6909.19.50 “because the proppants are not ‘ceramic wares’ within the intended meaning of that term as used in [Hjeading 6909.” Id. at 1323. The CIT also found that the Government’s “alternate classification” under Subheading 6914.90.80 “is incorrect because [Hjeading 6914 ... is confined to ‘ceramic articles’ rather than substances such as the proppants at issue.” Id. at 1323-24; see HTSUS 6914.90.80 (covering “Other ceramic articles: Other: Other”). Having found these provisions inapplicable, the CIT concluded that the subject merchandise should enter under HTSUS 2606.00.00 based on Heading 2606’s terms, guidance provided in the notes accompanying HTSUS Chapter 26 and in other sources, and the undisputed material facts. See Schlumberger, 91 F.Supp.3d at 1316-22.

Discussion

I. Standard of Review

We review de novo the CIT’s decision to grant summary judgment and apply anew the standard used by the CIT to assess the subject Customs classification. See Otter Prods., LLC v. United States, 834 F.3d 1369, 1374-75 (Fed. Cir. 2016). “Although we review the decision! ] of the CIT de novo, we give great weight to the informed opinion of the CIT ... and it is nearly always the starting point of our analysis.” Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1341 (Fed. Cir. 2016) (internal quotation marks, brackets, and citation omitted). The CIT “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” U.S. CIT R. 56(a) (2015).

The classification of merchandise involves a two-step inquiry. See LeMans, 660 F.3d at 1315. We first ascertain the meaning of the terms within the relevant tariff provision and then determine whether the subject merchandise fits within those terms. See Sigma-Tau HealthSci, Inc. v. United States, 838 F.3d 1272, 1276 (Fed. Cir. 2016). The first step presents a question of law that we review de novo, whereas the second involves an issue of fact that we review for clear error. Id. When, as here, no genuine dispute exists as to the nature of the subject merchandise, the two-step inquiry “collapses into a question of law [that] we review de novo.” LeMans, 660 F.3d at 1315 (citation omitted).

II. The CIT Properly Classified the Subject Merchandise

The Government contests the CIT’s decision to classify the subject bauxite prop-pants under HTSUS 2606.00.00, arguing that the merchandise instead falls within the terms of HTSUS 6909.19.50 or, alternatively, HTSUS 6914.90.80. See Appellant’s Br. 17-85. The Government also contends that the subject merchandise does not meet the terms of HTSUS 2606.00.00. Id. at 35-43. After discussing the applicable legal framework, we address these arguments in turn.

A. Legal Framework

The HTSUS governs the classification of merchandise imported into the United States. See Wilton Indus., Inc. v. United States, 741 F.3d 1263, 1266 (Fed. Cir. 2013). The HTSUS “shall be considered to be statutory provisions of law for all purposes.” 19 U.S.C. § 3004(c)(1).

“The HTSUS scheme is organized by headings, each of which has one or more subheadings; the headings set forth general categories of merchandise, and the subheadings provide a more particularized segregation of the goods within each category.” Wilton Indus., 741 F.3d at 1266. “[T]he headings and subheadings ... are enumerated in chapters 1 through 99 of the HTSUS (each of which has its own section and chapter notes)....” R.T. Foods, Inc. v. United States, 757 F.3d 1349, 1353 (Fed. Cir. 2014) (footnote and citation omitted). The HTSUS “also contains the ‘General Notes,’ the ‘General Rules of Interpretation’ (‘GRI’), the ‘Additional [U.S.] Rules of Interpretation’ (‘ARI’),[] and various appendices for particular categories of goods.” Id. (footnote and citation omitted).

The GRI and the ARI govern the classification of goods within the HTSUS. See Otter Prods., 834 F.3d at 1375. The GRI apply in numerical order, meaning that subsequent rules are inapplicable if a preceding rule provides proper classification. See Mita Copystar Am. v. United States, 160 F.3d 710, 712 (Fed. Cir. 1998). GRI 1 provides, in relevant part, that “classification shall be determined according to the terms of the [HTSUS] headings and any relative section or chapter notes_” GRI 1 (emphasis added). Under GRI 1, “a court first construes the language of the heading, and any section or chapter notes in question, to determine whether the product at issue is classifiable under the heading.” Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed. Cir. 1998). “[T]he possible headings are to be evaluated without reference to their subheadings, which cannot be used to expand the scope of their respective headings.” R.T. Foods, 757 F.3d at 1353 (citations omitted). “Absent contrary legislative intent, HTSUS terms are to be construed according to their common and commercial meanings, which are presumed to be the same.” Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999) (citation omitted). “To discern the common meaning of a tariff term, we may consult dictionaries, scientific authorities, and other reliable information sources.” Kahrs Int'l, Inc. v. United States, 713 F.3d 640, 644 (Fed. Cir. 2013) (citation omitted).

“After consulting the headings and relevant section or chapter notes” consistent with GRI 1, we may consider the Explanatory Notes (“EN”) attendant to the relevant HTSUS headings. Fuji Am. Corp. v. United States, 519 F.3d 1355, 1357 (Fed. Cir. 2008) (citation omitted). The EN provide persuasive guidance and “are generally indicative of the proper interpretation,” though they do not constitute binding authority. Kahrs, 713 F.3d at 645 (citations omitted).

B. The Subject Merchandise Does Not Fall Within the Terms of Heading 6909 or 6914

According to the Government, the subject merchandise constitutes “ceramic wares” under Heading 6909 or, alternatively, “other ceramic articles” under Heading 6914. See Appellant’s Br. 21-35. The CIT disagreed. See Schlumberger, 91 F.Supp.3d at 1310-16. We agree with the CIT.

We first must assess whether the subject Headings constitute eo nomine or use provisions because different rules and analysis will apply depending upon the heading type. Compare Kahrs, 713 F.3d at 645-46 (eo nomine analysis), with Aromont USA, Inc. v. United States, 671 F.3d 1310, 1312-16 (Fed. Cir. 2012) (principal use analysis). An eo nomine provision “describes an article by a specific name,” whereas a use provision describes articles according to their principal or actual use. Aromont, 671 F.3d at 1312 (citation omitted); see id. at 1313. Heading 6909 covers “Ceramic wares for laboratory, chemical, or other technical uses; ceramic troughs, tubs and similar receptacles of a kind used in agriculture; ceramic pots, jars and similar articles of a kind used for the conveyance or packing of goods.” Although Heading 6909 recites the use of ceramic products for certain purposes, the operative question here asks whether the subject merchandise constitutes a “ceramic ware” under the Heading’s terms. As a result, we treat the Heading as eo nomine. See Sigma-Tau, 838 F.3d at 1278 (treating an HTSUS provision as eo nomine, despite the provision disclosing certain uses, when the interpretation centered on the terms describing an article by a specific name). Heading 6914, which recites “Other ceramic articles,” is unquestionably eo nomine because it describes the articles it covers by name. See Aromont, 671 F.3d at 1312. Because the subject Headings are eo nomine, our analysis starts with their terms. See R.T. Foods, 757 F.3d at 1354.

Neither the HTSUS nor the applicable legislative history defines “ceramic wares” under Heading 6909 or “other ceramic articles” under Heading 6914. However, the notes accompanying HTSUS Chapter 69 inform our construction of the subject Headings. Note 1 to HTSUS Chapter 69 explains that the Chapter’s provisions, including Heading 6909 and Heading 6914, “appl[y] only to ceramic products which have been fired after shaping.” HTSUS 69, Note 1. The Note does not define “shaping,” so we look to the dictionary to understand its common meaning. See Sigma-Tau, 838 F.3d at 1279. The infinitive form of the verb “shape” means “to give a particular or proper form to by or as if by molding or modeling from an undifferentiated mass” or “to give definite or finished shape to — ” Shape, Webster’s (emphases added).

The Government contends that the granulation process provides the requisite shape to the subject merchandise. Appellant’s Br. 23-25. The undisputed facts show that it does not. As the CIT observed,

[w]hen the granules emerge from th[e] granulation process, they range so substantially in size that sieving is necessary to eliminate granules that do not fall within the desired size range. Even after the proppants are sieved so that 90% of the proppants fall within the desired size range, each of the two ranges characterizing the subject merchandise still permits 100% variation in size.

Schlumberger, 91 F.Supp.3d at 1313 (citing J.A. 123-25) (internal citations omitted). The Government does not contest the CIT’s observations. See generally Appellant’s Br. Indeed, an industry authority submitted by the Government corroborates the CIT’s observations. J.A. 480 (listing “Granulation” as a step that occurs prior to “Forming”). Thus, because the subject merchandise’s size varied to such a significant degree after the granulation process, the undisputed facts counsel against finding that the merchandise possessed the requisite definite shape following the granulation process. Possessing some shape does not equate to the definite shape required to enter under HTSUS Chapter 69, and a “desired form” cannot be any form at all since it would be impossible to shape something “as nearly as possible” to an indefinite standard.

The principle of noscitur a so-ciis confirms our conclusion that the subject bauxite proppants do not fall within the terms of either Heading 6909 or Heading 6914. That principle teaches “a word is known by the company it keeps,” which “avoid[s] ascribing to one word a meaning so broad that it is inconsistent with its accompanying words.” Yates v. United States, — U.S.-, 135 S.Ct. 1074,1085, 191 L.Ed.2d 64 (2015) (internal quotation marks and citation omitted); Bilski v. Kappos, 561 U.S. 593, 604, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010) (“[A]n ambiguous term may be given more precise content by the neighboring words with which it is associated.” (internal quotation marks and citation omitted)); see also Jewelpak Corp. v. United States, 297 F.3d 1326, 1331, 1337 (Fed. Cir. 2002) (affirming the use of nos-citur a sociis to interpret an HTSUS provision). Heading 6909 covers “Ceramic wares for laboratory, chemical, or other technical uses; ceramic troughs, tubs and similar receptacles of a kind used in agriculture; ceramic pots, jars and similar articles of a kind used for the conveyance or packing of goods.” The EN provide that Heading 6909 “covers a range of very varied articles,” such as “crucibles and crucible lids,” “mortars and pestles,” “beakers,” “containers with single or double walls,” “[containers of the kinds used for the commercial transport or packing of goods,” and “[tjroughs, tubs and similar containers of the type used in agriculture.” EN 69.09. The listed “wares” and “articles” concern individual products with definite forms. See id.; see also EN 69, General (requiring products imported under HTSUS Chapter 69 to be “shaped as nearly as possible to the desired form”). As explained above, the subject merchandise does not possess a definite form. J.A. 125-26. Because the subject merchandise does not have a definite form, it cannot fall within that Heading’s terms. See Yates, 135 S.Ct. at 1085.

The inclusion of “grinding apparatus and balls, etc., for grinding mills” in the EN accompanying Heading 6909 does not require a different conclusion. But see Appellant’s Br. 30-31. The Government has not provided any evidence demonstrating that the subject bauxite proppants and “grinding apparatus and balls” vary in shape to a similar degree, such that the subject prop-pants similarly should fall within Heading 6909. The Government’s speculation cannot prevent the entry of summary judgment against it. See First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968) (finding entry of summary judgment appropriate because of “the absence of any significant probative evidence” in support of a claim).

Finally, an examination of the EN accompanying Heading 6914 yields the conclusion that the subject bauxite proppants do not fall within that Heading’s terms. Heading 6914 covers “Other ceramic articles.” The EN explain that Heading 6914 covers, inter alia, “[sjtoves and other heating apparatus,” “non-decorative flower pots,” “fittings for doors, windows, etc.,” “[Betters, numbers, sign-plates and similar motifs for shop signs and shop windows,” ceramic “[sjpring lever stoppers,” “jars and containers for laboratories,” and “other articles such as knife handles, school inkwells, humidifiers for radiators[,] and bird cage accessories.” EN 69.14. The listed examples concern individual products shaped into definite forms. See id.; see also EN 69, General (requiring products imported under HTSUS Chapter 69 to be “shaped as nearly as possible to the desired form”). Unlike the examples provided in the EN, the subject proppants are bulk substances that lack a definite form. J.A. 125-26. Because the subject proppants do not possess the requisite definite form like the products listed in Heading 6914, they cannot fall within that Heading’s terms. See Yates, 135 S.Ct. at 1085.

C. The Subject Merchandise Falls Within the Terms of Heading 2606

Having found the subject bauxite proppants outside the terms of Heading 6909 and Heading 6914, we next examine Heading 2606. The Government argues that the CIT erred by finding the subject merchandise classifiable under that Heading. Appellant’s Br. 35-43. We disagree.

Heading 2606 covers “Aluminum ores and concentrates.” The provision is eo no-mine because it describes the merchandise it covers by name. See Aromont, 671 F.3d at 1312. Neither the HTSUS nor the applicable legislative history defines “aluminum ore” under Heading 2606. The notes accompanying HTSUS Chapter 26 inform our construction of the subject Heading, providing two criteria. First, Note 2 to HTSUS Chapter 26 explains that “the term ‘ores’ means minerals of mineralogical species actually used in the metallurgical industry for the extraction of’ certain metals, “even if they are intended for non-metallurgical purposes.” HTSUS 26, Note 2. Second, the Note states that HTSUS 2606 does not “include minerals which have been submitted to processes not normal to the metallurgical industry.” Id.

The subject bauxite proppants meet each criterion. With respect to the first, the subject merchandise contains a mineral of a mineralogical species used in the metallurgical industry for the extraction of a particular metal. EN 26.06 provides that Heading 2606 “covers bauxite (hydrated aluminum oxide containing variable proportions of iron oxide, silica, etc.).” The parties agree that “[t]he subject proppants are produced from non-metallurgical grade bauxite,” meaning that the subject prop-pants contain the requisite mineral of a mineralogical species. J.A. 1729. Moreover, the undisputed facts demonstrate that the industry uses bauxite in the extraction of aluminum. J.A. 121 (“Metallurgical grade bauxite is used in the metallurgical industry for the extraction of aluminum.”), 1729 (discussing the “commercial extraction of aluminum metal from bauxite”).

The Government counters that the subject merchandise cannot meet the first criterion because Schlumberger used the subject merchandise “only for hydraulic fracturing” and not the extraction of a particular metal. Appellant’s Br. 37. However, the Government overlooks a relevant passage of Note 2 to HTSUS Chapter 26, which explains that the Chapter covers ores “even if they are intended for non-metallurgical purposes,” so long as the industry uses the ores for the extraction of metal. HTSUS 26, Note 2. As stated above, it is undisputed that the industry uses bauxite to extract aluminum. J.A. 121, 1729.

Because the subject bauxite proppants satisfy the first criterion articulated in Note 2 to HTSUS Chapter 26, we turn to the second to determine whether the subject merchandise underwent processes not normal to the metallurgical industry. Neither the HTSUS nor the applicable section and chapter notes provide guidance as to what constitutes a “normal” process in the metallurgical industry. However, the EN to Chapter 26 state that aluminum ore classifiable under Heading 2606 may undergo, inter alia, “crushing,” “grinding,” “screening,” “agglomeration of powders ... into grains, balls or briquettes,” and “drying.” EN 26, General. As stated above, the subject bauxite proppants underwent these very steps during the production process. J.A. 124-25. Thus, the CIT properly concluded that these processes “must be considered normal to the metallurgical industry and not the sort of processing that would cause exclusion from [Cjhapter 26 by operation of [N]ote 2 to [Cjhapter 26, HTSUS.” Schlumberger, 91 F.Supp.3d at 1318.

The Government contends that the CIT improperly found the processes normal to the metallurgical industry despite the fact that the processes were “not for the purpose of preparing the proppants for the extraction of metal.” Appellant’s Br. 42. Note 2 to HTSUS Chapter 26 provides only that the minerals may not be submitted to processes other than those normal to the metallurgical industry; it does not require that any processing be undertaken “for the purpose” of extracting metal. HTSUS 26, Note 2. Indeed, the Note expressly contemplates that a product imported under the Chapter can be “intended for non-metallurgical purposes.” Id.

The Government contends further that dopants were added to the bauxite powder during the proppant manufacturing process and that the addition of dopants is not normal to the metallurgical industry. Appellant’s Br. 37-40. As a result, the Government contends that the subject merchandise cannot meet the second element in Note 2 of HTSUS Chapter 26. See id.

The addition of dopants to the bauxite powder does not necessitate a different conclusion. The EN to Chapter 26 explain that a process may remain normal to the industry so long as it does “not alter the chemical composition of the basic compound which furnishes the desired metal.” EN 26, General. The Government has not offered any evidence demonstrating the extent to which the dopants changed the chemical composition of the bauxite powder; indeed, the Government was unable to state that the dopants’ underlying chemicals at the exact levels found in the subject merchandise would not themselves exist naturally in bauxite ore. Oral Argument at 12:07-14:24, http://oralarguments.cafc. uscourts.gov/default.aspx?fl=2015-2076.mp 3. Thus, the Government did not demonstrate that the basic bauxite compound changed from consisting primarily of aluminum oxide so as to offend EN 26, and its speculation may not foreclose the entry of summary judgment. See First Nat’l Bank of Aria, 391 U.S. at 290, 88 S.Ct. 1575.

Finally, the Government avers that the subject bauxite proppants do not fall within Heading 2606 because they are “finished manufactured products immediately usable upon importation” and “not a ‘material’ or naturally occurring ‘substance.’” Appellant’s Br. 35. According to the Government, Heading 2606 is limited to “primary materials which will be further processed after importation.” Id. at 1; see also id. at 17 (arguing that the CIT failed to consider the subject merchandise in its “condition as imported” (capitalization omitted)).

The terms of Heading 2606 do not support the Government’s argument. Under GRI 1, we must look to “the terms of the [HTSUS] headings and any relative section or chapter notes.” As the CIT observed, “[njothing in the terms of the heading, the section or chapter notes, or the relevant [EN] supports a conclusion that a product ready for the intended use in the condition as imported is outside the scope of the heading.” Schlumberger, 91 F.Supp.3d at 1320. That conclusion comports with the principle that “an eo no-mine provision” like Heading 2606 “includes all forms of the named article.” Kahrs, 713 F.3d at 646 (citation omitted). Thus, we decline the Government’s invitation to imbue Heading 2606 with a meaning not supported by the Heading’s text or the accompanying section and chapter notes.

Conclusion

We have considered the Government’s remaining arguments and find them unpersuasive. Accordingly, the final judgment of the U.S. Court of International Trade is

AFFIRMED

      . "All citations to the HTSUS refer to the 20[10] version, as determined by the date of importation of the merchandise.” LeMans Corp. v. United States, 660 F.3d 1311, 1314 n.2 (Fed. Cir. 2011).

      . "Bauxite” refers to "an impure mixture of earthy hydrous aluminum oxides and hydroxides that commonly contains similar compounds of iron and occasionally] of manganese ... and is the principal source of aluminum used in commerce and industry." Bauxite, Webster's Third New International Dictionary of the English Language Unabridged (1986) ("Webster’s”); J.A. 467 (similar).

      . A party may protest Customs’s classification. of merchandise under 19 U.S.C. § 1514(a)(2) (2006). The party may appeal Customs’s denial of the protest to the CIT. 28 U.S.C. § 1581(a).

      . The first four digits of an HTSUS provision constitute the heading, whereas the remaining digits reflect subheadings.

      . The ARI contain specific rules for use and textile provisions in the HTSUS. See ARI 1(a)-(d). Because the appeal involves eo nomine provisions, we find the ARI inapplicable. See infra Section II.B.

      .The World Customs Organization publishes the EN as its "official interpretation of the Harmonized Commodity Description and Coding System,” the "global system of trade nomenclature on which the HTSUS is based.” Kahrs, 713 F.3d at 644 n.2; Michael Simon Design, Inc. v. United States, 33 C.I.T. 1003, 1004-05, 637 F.Supp,2d 1218 (2009) (discussing the HTSUS’s historical backdrop).

      . The EN to Chapter 69 provide substantively similar guidance, explaining in relevant part that "[t]he manufacturing process of the ceramic products” classifiable under Chapter 69 include a "[s]haping” step whereby the material "is ... shaped as nearly as possible
        to the desired form.” EN 69, General (emphasis added).

      . A canon related to noscitur a sociis, ejusdem generis, instructs that "where general words follow an enumeration of specific items, the general words are read as applying only to other items akin to those specifically enumerated.” Harrison v. PPG Indus., Inc., 446 U.S. 578, 588, 100 S.Ct. 1889, 64 L.Ed.2d 525 (1980). We also have relied upon the principle of ejusdem generis when interpreting HTSUS provisions. See, e.g., Victoria’s Secret Direct, LLC v. United States, 769 F.3d 1102, 1107 (Fed. Cir. 2014).

      . The noun "dopant” means "an impurity added usually in minute amounts to a pure substance to alter its properties.” J.A. 79. The identity of the dopants remains proprietary. Schlumberger, 91 F.Supp,3d at 1318 n.18.


source: Caselaw Access Project

license: Public Domain

text:
    PHIGENIX, INC., Appellant v. IMMUNOGEN, INC., Appellee
    2016-1544
    United States Court of Appeals, Federal Circuit.
    Decided: January 9, 2017

      GREGORY Lawrenoe Porter, Andrews Kurth Kenyon LLP, Houston, TX, argued for appellant. Also represented by Robert Alan Gutkin, Ping Wang, Michael Ye, Washington, DC.
    EldoRa Ellison, Sterne Kessler Gold-stein & Fox, PLLC, Washington, DC, argued for appellee. Also represented by Olga A. PaRtington, Pauline Pelletier, Byron Leroy Pickard, Eric K. Stefpe.
    Before DYK, WALLACH, and HUGHES, Circuit Judges.
   WALLACH, Circuit Judge.

Appellant Phigenix, Inc. (“Phigenix”) sought inter partes review of U.S. Patent No. 8,337,856 (“the ’856 patent”), alleging that claims 1-8 (“the Asserted Claims”) of the subject patent are unpatentable as obvious over various prior art references. In its final written decision, the U.S. Patent and Trademark Office’s (“USPTO”) Patent Trial and Appeal Board (“PTAB”) found the Asserted Claims nonobvious. See generally Phigenix, Inc. v. ImmunoGen, Inc., No. IPR2014-00676, 2015 WL 6550500 (P.T.A.B. Oct. 27, 2015).

Phigenix appeals. We possess subject matter jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). Because Phigenix has not offered sufficient proof establishing that it has suffered an injury in fact, it lacks standing to bring suit in federal court. We dismiss.

BACKGROUND

The ’856 patent generally relates to “hu-Mab4D5 ANTI-ErbB2 antibody-maytansi-noid conjugates.” ’856 patent, Title. The claimed methods of treatment purport to combat a variety of cancers. See id. col. 4 11. 26-42.

The subject dispute involves three principal parties, each of whom allege to have some relation to the ’856 patent. The first party, Appellee ImmunoGen, Inc. (“ImmunoGen”), is the assignee of the ’856 patent. ImmunoGen provided the second party, Genentech Inc. (“Genentech”), with a “worldwide exclusive license” to the subject patent, which Genentech uses to produce the drug Kadcyla®TM (“Kadcyla”). Phigenix, Inc. v. ImmunoGen, Inc., No. 2016-1544, Docket No. 23 at Ex. A, ¶ 3 (Fed. Cir. Mar. 4, 2016) (ImmunoGen’s Mot. to Dismiss (“ImmunoGen’s MTD”)); see id. at Ex. A, ¶ 2. The third party, Phigenix, describes itself “as a for-profit discovery stage biotechnology, pharmaceutical, and biomedical research company” that focuses “on the use of novel molecular therapeutics” designed to fight cancer. Phigenix, Inc. v. ImmunoGen, Inc., No. 2016-1544, Docket No. 26 at Ex. 1, ¶ 4 (Fed. Cir. Mar. 14, 2016) (Phigenix’s Resp. to ImmunoGen’s MTD (“Phigenix’s Resp. to MTD”)). Phigenix does not manufacture any products, but purportedly “has developed, and is developing, an extensive intellectual property portfolio” that includes U.S. Patent No. 8,080,534 (“the ’534 patent”). Id. at Ex. 1, ¶ 5; see id. at Ex. 1, ¶ 7. Phigenix alleges that the ’534 patent covers Genentech’s “activities relating to Ka-dycla[]” and, thus, the subject matter claimed in the ’856 patent. Id. at Ex. 1,11 7; see id. at Ex. 1, ¶¶ 8-9, and Ex. 2, ¶ 14. Phigenix alleges that it “was forced” to bring litigation in various fora when Gen-entech refused its offer to license the ’534 patent. Id. at Ex. 1, ¶ 8.

In that vein, and “[t]o further its commercialization efforts with respect to its patent portfolio,” Phigenix sought inter partes review of the Asserted Claims of the ’856 patent. Id. at Ex. 1, ¶ 10. When the PTAB found the Asserted Claims non-obvious, Phigenix sought further review in this court.

Discussion

I. Phigenix Lacks Article III Standing

Before the parties fully briefed the subject appeal ImmunoGen filed a motion to dismiss, asserting that Phigenix lacked standing to appeal the PTAB’s Final Written Decision. See generally ImmunoGeris MTD. Phigenix opposed. See generally Phigenix’s Resp. to MTD. A single judge of this court denied the Motion, “deem[ing] it the better course for the parties to address the standing issue in their briefs.” Phigenix, Inc. v. ImmunoGen, Inc., No. 2016-1544 (Fed. Cir. Apr. 20, 2016) (order denying ImmunoGens MTD).

In its response brief, ImmunoGen argues anew that Phigenix lacks standing, Appellee’s Br. 29-37, and Phigenix again opposes, Appellant’s Br. 24-25 (incorporating the arguments made in Phigenix’s Resp. to MTD); Appellant’s Reply 3-16. “We have an obligation to assure ourselves of litigants’ standing under Article III” of the Constitution, DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 340, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) (internal quotation marks and citation omitted), including when a party appeals from a final agency action, see Massachusetts v. EPA, 549 U.S. 497, 505-06, 516-26, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007). As the party seeking judicial review, Phigenix bears the burden of establishing that it has standing. See DaimlerChrysler, 547 U.S. at 342, 126 S.Ct. 1854.

A. General Article III Standing Requirements

“Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy” required by Article III. Spokeo, Inc. v. Robins, — U.S.-, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016); Hollingsworth v. Perry, — U.S. -, 133 S.Ct. 2652, 2661,186 L.Ed.2d 768 (2013) (explaining that Article III discusses the powers granted to the Judicial Branch and, inter aha, “confines the judicial power of federal courts to deciding actual ‘Cases’ or ‘Controversies’ ” (quoting U.S. Const, art. Ill, § 2)). “[T]he irreducible constitutional minimum of standing” consists of “three elements.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). An appellant “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [appellee], (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, 136 S.Ct. at 1547 (citations omitted).

As to the first element, “the injury-in-fact requirement requires [an appellant] to allege an injury that is both concrete and particularized.” Id. at 1545 (internal quotation marks and citation omitted). To constitute a “concrete” injury, the harm must “actually exist,” id. at 1548 (citation omitted), or appear “imminent,” Lujan, 504 U.S. at 560, 112 S.Ct. 2130 (internal quotation marks and citation omitted)—a “conjectural or hypothetical” injury will not suffice, id. (internal quotation marks and citation omitted). And an injury is “particularized” if it affects an appellant “in a personal and individual way.” Spokeo, 136 S.Ct. at 1548 (internal quotation marks and citation omitted).

“[Although Article III standing is not necessarily a requirement to appear before an administrative agency,” Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014) (citation omitted), an appellant must nevertheless supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court, see Massachusetts, 549 U.S. at 517, 127 S.Ct. 1488 (explaining that, when a party appeals from a final agency action, it must demonstrate that it suffers an injury “that is either actual or imminent” (quoting Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130)). Indeed, the Supreme Court has recognized that not every party will have Article III standing in an appeal from a PTAB final written decision. See Cuozzo Speed Techs., LLC v. Lee, — U.S.-, 136 S.Ct. 2131, 2143-44, 195 L.Ed.2d 423 (2016) (explaining that, although a party that initiated an inter partes review “need not have a concrete stake in the outcome,” it “may lack constitutional standing” to sue in federal court).

B. The Legal Requirements to Demonstrate Standing in an Appeal from a Final Agency Action

In the nearly thirty-five years since the court’s inception, we have not established the legal standard for demonstrating standing in an appeal from a final agency action. This standard must identify the burden of production; the evidence an appellant must produce to meet that burden; and when an appellant must produce that evidence. We discuss each item in turn.

As to the burden of production, the Supreme Court has held that each element is “an indispensable part of’ an appellant’s case and “must be supported in the same way as any other matter on which the [appellant] bears the burden of proof, ie., with the manner and degree of evidence required at the successive stages of the litigation.” Lujan, 504 U.S. at 561, 112 S.Ct. 2130. Interpreting Lujan, the D.C. Circuit has held that ah appellant’s burden of production is “the same as that of a plaintiff moving for summary judgment in the district court.” Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002) (citation omitted). At least four of our sister circuits have adopted the D.C. Circuit’s standard, see Sierra Club v. EPA, 793 F.3d 656, 662-663 (6th Cir. 2015), cert. denied sub nom., Ohio v. Sierra Club, — U.S. -, 136 S.Ct. 1491, 194 L.Ed.2d 586 (2016); N. Laramie Range All. v. FERC, 733 F.3d 1030, 1034 (10th Cir. 2013); Iowa League of Cities v. EPA, 711 F.3d 844, 869-70 (8th Cir. 2013); Citizens Against Ruining the Env't v. EPA, 535 F.3d 670, 675 (7th Cir. 2008), and two others appear to have followed it, see Ass’n of Pub. Agency Customers v. Bonneville Power Admin., 733 F.3d 939, 971 n.7 (9th Cir. 2013) (Alarcon, J., dissenting) (explaining that the Ninth Circuit has appeared to follow, but not expressly adopted, the burden of production standard articulated in Sierra Club, 292 F.3d 895); Manufactured Hous. Inst. v. EPA, 467 F.3d 391, 398 (4th Cir. 2006) (similar). Our review of Lujan and the Supreme Court’s subsequent decisions leads us to conclude that the summary judgment burden of production applies in cases where an appellant seeks review of a final agency action and its standing comes into doubt. See Lujan, 504 U.S. at 561,112 S.Ct. 2130 (explaining that a party challenging government action may demonstrate its standing, inter alia, “at the summary judgment stage”); see also Massachusetts, 549 U.S. at 521-23, 127 S.Ct. 1438 (relying upon evidence typically produced at the summary judgment stage (i.e., affidavits and declarations) to find that a party possessed standing in an appeal from a final agency action).

Having established the relevant burden of production, we turn to what evidence will meet the burden. The D.C. Circuit has held that, in some cases, an appellant’s “standing to seek review of administrative action is self-evident; no evidence outside the administrative record is necessary for the court to be sure of it.” Sierra Club, 292 F.3d at 899-900. Self-evident standing typically arises when an appellant “is ‘an object of the action (or forgone action) at issue.’ ” Id. at 900 (quoting Lujan, 504 U.S. at 561-62, 112 S.Ct. 2130). “When the [appellant's standing is not self-evident, however, the [appellant] must supplement the record to the extent necessary to explain and substantiate its entitlement to judicial review.” Id. In so doing, an appellant may submit “arguments and any affidavits or other evidence” to demonstrate its standing. Id. Taken together, an appellant “must either identify ... record evidence sufficient to support its standing to seek review or, if there is none because standing was not an issue before the agency, submit additional evidence to the court of appeals,” such as “by affidavit or other evidence.” Id. at 899 (internal quotation marks and citation omitted).

Finally, we must determine when an appellant should produce the evidence establishing its standing. Because standing involves threshold questions over a court’s authority to hear a dispute, see Massachusetts, 549 U.S. at 505, 127 S.Ct. 1438, an appellant must identify the relevant evidence demonstrating its standing “at the first appropriate” time, whether in response to a motion to dismiss or in the opening brief, Sierra Club, 292 F.3d at 900; see id at 901. Imposing on an appellant the dual obligations of producing the evidence and producing the evidence early in the litigation comports with the reality that such evidence is “necessarily peculiar to” the appellant and “ordinarily within its possession.” Id. at 901. Thus, if there is no record evidence to support standing, the appellant must produce such evidence at the appellate level at the earliest possible opportunity.

C. Phigenix Has Not Demonstrated Injury in Fact

Having identified the operative standards, we turn to the question of Phige-nix’s standing. Phigenix has argued its standing in several submissions, see generally Phigenix’s Resp. to MTD; Appellant’s Br.; Appellant’s Reply, as well as put into evidence two declarations that purportedly demonstrate its standing, see Phigenix’s Resp. to MTD at Ex. 1 (“Donald Decl.”) and Ex, 2 (“Gold Decl.”). In these documents, Phigenix does not contend that it faces risk of infringing the ’856 patent, that it is an actual or prospective licensee of the patent, or that it otherwise plans to take any action that would implicate the patent. See generally Phigenix’s Resp. to MTD; Appellant’s Br.; Appellant’s Reply. Instead, Phigenix asserts that it has suffered an actual economic injury because the ’856 patent increases competition between itself and ImmunoGen, see Phige-nix’s Resp. to MTD at 6, and “ ‘[ijncreased competition represents a cognizable Article III injury,’ ” id. (quoting Liquid Carbonic Indus. Corp. v. FERC, 29 F.3d 697, 701 (D.C. Cir. 1994)).

Phigenix argues that “[t]he existence of ImmunoGen’s ’856 patent has ... encumbered] Phigenix’s licensing efforts while ImmunoGen receives millions of dollars in licensing revenue.” Id. at 9; see id. at 9-10 (citing Gold Decl. at ¶¶ 10, 15). Phigenix contends “[t]he most reasonable and commonsense conclusion is that at least a portion of that licensing revenue would inure to Phigenix if the ’856 patent were invalidated.” Appellant’s Reply 9-10. Phigenix does not substantiate these arguments with record evidence developed before the PTAB. See generally Phigenix’s Resp. to MTD; Appellant’s Br.; Appellant’s Reply. Instead, Phigenix relies principally upon the declarations accompanying its response to ImmunoGen’s Motion to Dismiss and another non-record document.

Rule 56(c)(4) explains that a “declaration used to support ... a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the ... declarant is competent to testify on the matters stated.” Fed. R. Civ. P. 56(c)(4) (emphasis added). A “conclusion[ ] of law” in a declaration “cannot be utilized [i]n a summary-judgment motion.” 10B Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. § 2738 (4th ed. 2016) (internal quotation marks and footnotes omitted); accord F.R.C. Int’l, Inc. v. United States, 278 F.3d 641, 643 (6th Cir. 2002); Schubert v. Nissan Motor Corp. in U.S.A., 148 F.3d 25, 30-31 (1st Cir. 1998); Orthopedic & Sports Injury Clinic v. Wang Labs,, Inc., 922 F.2d 220, 224 (5th Cir. 1991); Barfield v. Orange Cty., 911 F.2d 644, 650 (11th Cir. 1990); Toro Co. v. Krouse, Kern & Co., 827 F.2d 155,162 n.3 (7th Cir. 1987).

Phigenix’s documents do not have such supporting facts. As stated above, Phigenix relies upon the Gold Declaration to argue that “[t]he existence of Immuno-Gen’s ’856 patent has ... encumber[ed] Phigenix’s licensing efforts.” Phigenix’s Resp. to MTD at 9; see id. at 9-10 (citing Gold Decl. at ¶¶ 10, 15). Phigenix also alleges that a letter highlighting concerns over the ’856 patent’s validity that its attorney sent to ImmunoGen “underscores the actual, concrete controversy” between the parties. Appellant’s Br. 25. In that letter, counsel stated that Phigenix “believes that it has a strong patent portfolio” and “believes” that the ’856 patent is invalid. J.A. 6446.

The Gold Declaration and the attorney letter are insufficient to demonstrate injury in fact. It is possible that, if Phigenix had licensed the ’534 patent to the same parties to which ImmunoGen had licensed the ’856 patent, the invalidation of the ’856 patent might have increased Phigenix’s revenues. However, there is simply no allegation here that Phigenix has ever licensed the ’534 patent to anyone, much less that it licensed the ’534 patent to entities that have obtained licenses to the Immuno-Gen ’856 patent. The conclusory statements in the Gold Declaration and the letter as to the hypothetical licensing injury therefore do not satisfy the requirements of Rule 56(c)(4). See Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888,110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) (explaining that “[t]he object” of Rule 56 “is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit”).

Phigenix’s remaining arguments do not necessitate a different conclusion. Phigenix contends that it has suffered an injury in fact because 35 U.S.C. § 141(c) “provides a statutory basis for appeal,” Phigenix’s Resp. to MTD at 16, and Spokeo recognizes that “[t]he violation of a procedural right granted by statute can be sufficient in some circumstances to constitute an injury in fact,” Appellant’s Reply 16 (emphasis added) (quoting 136 S.Ct. at 1549). In relevant part, § 141(c) provides that “[a] party to an inter partes review ... who is dissatisfied with the final written decision of the [PTAB] ... may appeal the [PTAB]’s decision” to this court. Phigenix cannot base its injury in fact upon a violation of § 141(c) because it has been permitted to file its appeal, and the exercise of its right to appeal does not necessarily establish that it possesses Article III standing. See Raines v. Byrd, 521 U.S. 811, 820 n.3, 117 S.Ct, 2312, 138 L.Ed.2d 849 (1997) (“Congress cannot erase Article Ill’s standing requirements by statutorily granting the right to sue to [an appellant] who could not otherwise have standing.” (citation omitted)). As the Supreme Court has observed, statutorily “broadening the categories of injury that may be alleged in support of standing is a different matter from abandoning the requirement that the party seeking review must himself have suffered an injury.” Sierra Club v. Morton, 405 U.S. 727, 738, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); accord Massachusetts, 549 U.S. at 516-17,127 S.Ct. 1438 (discussing the need for injury in fact to pursue appeal from a final agency action); Lujan, 504 U.S. at 578, 112 S.Ct. 2130 (same).

Finally, Phigenix asserts an injury in fact based on 35 U.S.C. § 315(e), arguing that “the estoppel effect of the [PTAB]’s decision adversely impacts Phigenix’s ability to provide a contractual warranty.” Appellant’s Reply 11 (capitalization modified). If the PTAB issues a final written decision in an inter partes review on a patent claim, a petitioner “may not request or maintain a proceeding before” the USPTO, the U.S. International Trade Commission, or a federal district court “with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(1); see id. § 315(e)(2). In Consumer Watchdog, we explained that a similar estoppel provision “do[es] not constitute an injury in fact” when, as here, the appellant “is not engaged in any activity that would give rise to a possible infringement suit.” 753 F.3d at 1262 (citation omitted). We see no reason to reach a different conclusion on the facts before us.

Conclusion

Because Phigenix has not substantiated its alleged injury in fact, it lacks standing to appeal the PTAB’s Final Written Decision affirming the patentability of the Asserted Claims of the ’856 patent. We have considered Phigenix’s remaining arguments to the contrary and find them unpersuasive. Accordingly, Phigenix’s appeal is

DISMISSED

      . We recite the standing framework using the designations "appellant” and "appellee,” rather than "plaintiff” and "defendant,” because we are the court of first instance in an appeal challenging the PTAB's final written decision in an inter parties review. 35 U.S.C. § 141(c) (2012) ("A party to an inter partes review ... who is dissatisfied with the final written decision of the [PTAB] ... may appeal the [PTAB]'s decision only to the ... Federal Circuit.”).

      . An appellant's obligation to establish an injury in fact remains firm even though it need not "'meet!] all the normal standards for redressability and immediacy’ ” when, as here, a statute provides the appellant with a right to appeal. Massachusetts, 549 U.S. at 517-18, 127 S.Ct. 1438 (quoting Lujan, 504 U.S. at 572 n.7, 112 S.Ct. 2130).

      . "Burden of production” means “[a] party's duty to introduce enough evidence on an issue to have the issue decided by the fact-finder, rather than decided against the party in a peremptory ruling such as a summary judgment or a directed verdict.” Burden of Production, Black's Law Dictionary (10th ed, 2014).

      .The First, Second, Third, Fifth, and Eleventh Circuits do not appear to have addressed the precise issue before us.

      . “[W]hen the [appellant] is not himself the object of the government action or inaction he challenges, standing is not precluded, but it is ordinarily substantially more difficult to establish.” Lujan, 504 U.S. at 562, 112 S.Ct. 2130 (internal quotation marks and citations omitted).

      . Several aspects of the Declarations submitted by Phigenix also fail to lay the requisite foundation to be "admissible in evidence,” as Rule 56(c)(4) requires. See 10B Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. § 2738 (4th ed. 2016) (explaining that "the rules of evidence and their exceptions determine what allegations the affidavit may contain” (footnote omitted)); see also Fed. R. Evid. 901(a) ("To satisfy the requirement of authenticating or identifying an item of evidence, the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is.”). For example, Dr. Carlton D. Donald testified that “Phi-genix and Genentech had multiple discussions through ... telephone conversations concerning the Phigenix technology and its patent portfolio,” Donald Decl. at ¶ 8; however, Dr. Donald does not establish that (1) a particular number was dialed; (2) the number dialed was "assigned at the time” to Genentech; or (3) "the call related to business reasonably transacted over the telephone,” Fed. R, Evid. 901(b)(6).

      . To the extent Phigenix alleges that Spokeo overruled the Supreme Court’s prior decisions on standing, that argument ignores governing law. See Hohn v. United States, 524 U.S. 236, 252-53, 118 S.Ct. 1969, 141 L.Ed.2d 242 (1998) (“Our decisions remain binding precedent until we see fit to reconsider them, regardless of whether subsequent cases have raised doubts about their continuing vitality.” (citation omitted)).


author: NEWMAN, Circuit Judge.

text:
    Victoria CALHOUN, Petitioner v. DEPARTMENT OF THE ARMY, Respondent
    2016-2220
    United States Court of Appeals, Federal Circuit.
    Decided: January 12, 2017
    VICTORIA Calhoun, Severn, MD, pro se.
    Nathanael Yale, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, for respondent. Also represented by Benjamin C. Mizer, Robert E. Kirschman, Jr., Allison Kidd-Miller.
    Before NEWMAN, CHEN, and STOLL, Circuit Judges.
   NEWMAN, Circuit Judge.

Victoria Calhoun appeals the decision of the Merit Systems Protection Board (“Board”) sustaining the action of the Department of the Army imposing a six day furlough in July and August of 2013 in response to sequestration legislation. We discern no reversible error in the Board’s decision.

BACKGROUND

The Budget Control Act of 2011 established spending limits for federal agencies and required automatic spending cuts (“sequestration”) if certain deficit reduction legislation was not enacted. Pub. L. No. 112-25, §§ 101-103, 125 Stat. 240, 241-46 (2011). The American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, § 901, 126 Stat. 2313, 2370 (§ 901(e)), required the President to issue a sequestration order on March 1, 2013, near the middle of fiscal year 2013. 126 Stat. at 2370. On that date, President Obama issued a sequestration order requiring reductions in spending from most federal budget accounts for fiscal year 2013. 78 Fed.Reg. 14,633.

As a result, the 2013 budget of the Department of Defense (DOD) was cut by approximately 37 billion dollars, to be absorbed in the remaining six months of the fiscal year. The DOD took a number of steps to address the budgetary shortfall, including reprogramming funds, reducing facility maintenance, and eliminating some military training exercises. In a May 2013 memorandum, the Secretary of Defense explained that furloughs of civilian workers would be imposed to address the “historic shortfall in our budget” resulting from sequester.

Ms. Calhoun is a non-excepted civilian Doctrine Defense Specialist employed by the United States Army Cyber Command (ACC), within the Department of the Army. The Commander of the ACC, Lt. Gen. Rhett A. Hernandez, was designated as the deciding official for the furloughs of ACC employees. Lt. Gen. Hernandez delegated that authority to his Chief of Staff, Col. Scott E. Sanborn. On May 28, 2013, Ms. Calhoun was issued a Notice of Proposed Furlough, including notice of her opportunity to reply. Ms. Calhoun exercised her opportunity to reply via an oral presentation to James L. Hillborn, an official designated by Col. Sanborn to hear oral replies. Ms. Calhoun also submitted a written reply on June 5, 2013. Her replies included budget proposals she asserted would prevent furloughs.

On July 1, 2013, Ms. Calhoun received her Notice of Decision to Furlough. The Notice stated: “[y]our written and oral replies received in response to [the] notice have been reviewed and carefully considered. I have determined that the reasons for the proposed furlough, as stated in the notice of proposal, remain valid.” S.A. 89. In email responses to inquiries by Ms. Calhoun, Col. Sanborn stated on July 14, 2013 that “I read through the packet that you included,” and on July 30, 2013 that “[t]he furlough guidance we received is clear and unfortunately I cannot exempt you for the reasons you have highlighted -” S.A. 92-95. Ms. Calhoun was ultimately furloughed for six nonconsecutive days in July and August 2013.

Ms. Calhoun filed a notice of appeal with the Board, alleging the furlough did not promote the efficiency of the service. Ms. Calhoun also alleged that the agency committed harmful error by failing to consider her budget proposals. She also stated that Lt. Gen. Hernandez improperly delegated his authority as deciding official to Col. Sanborn. The administrative judge (AJ) found Lt. Gen. Hernandez’s delegation to Col. Sanborn did not violate DOD policy. Calhoun v. Dep’t of the Army, No. PH-0752-13-5389-I-1, 2015 WL 4712185 (M.S.P.B. July 30, 2015). The AJ also found that Col. Sanborn appropriately considered Ms. Calhoun's reply, and that evaluation of the merits of her budget proposals was beyond the scope of his review as deciding official. The AJ affirmed the furlough decisions as a reasonable management solution to the shortage of funds caused by sequestration and that the furloughs promoted the efficiency of the service. Id.

On appeal to the full Board, Ms. Calhoun renewed her argument that the agency erred in delegating the responsibilities of the deciding official to Col. Sanborn. Ms. Calhoun also asserted a due process violation because the deciding official did not receive a written summary of her oral reply prior to issuing the decision letter. The Board affirmed the AJ’s decision, holding that the delegation to Col. Sanborn did not violate DOD policy or introduce harmful procedural error. Final Order at ¶ 9. The Board also found no due process violation because Col. Sanborn received and considered Ms. Calhoun’s written reply and because the summary of her oral reply would not have altered the furlough decision. Final Order at ¶ 10.

Ms. Calhoun appeals.

Discussion

We review the Board’s decision to ascertain whether it was (1) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; (2) obtained without following the procedures required by law; or (3) unsupported by substantial evidence. 5 U.S.C. § 7703(c).

By statute, an agency may furlough an employee “because of lack of work or funds or other nondisciplinary reasons.” 5 U.S.C. § 7511(a)(5). Furloughs of thirty days or less are deemed adverse employment actions, 5 C.F.R. § 752.401(a)(5), and may only be taken “for such cause as will promote the efficiency of the service.” 5 U.S.C. § 7513(a). An agency satisfies the “efficiency of the service” standard by demonstrating that the furlough was “a reasonable management solution to the financial restrictions placed on the agency and that the agency determine[d] which employees to furlough in a fair and even manner.” Einboden v. Dep’t of Navy, 802 F.3d 1321, 1325 (Fed. Cir. 2015). An employee faced with an adverse action must be provided written notice that must “stat[e] the specific reasons for the proposed [adverse] action,” an opportunity to answer and to provide “documentary evidence in support of the answer”, and a “written decision.” 5 U.S.C. § 7513(b).

The Board found that Ms. Calhoun was furloughed in response to sequester legislation and that the furlough was a “reasonable management solution” to the financial restrictions faced by the agency. Although Ms. Calhoun states that the “procedural and legislative changes to fix the budgetary IT systems” she proposed would have averted furloughs, “[i]t is not our role to second guess agency decisions.” Einboden, 802 F.3d at 1325; see also Chandler v. Dep’t of the Treasury, 120 M.S.P.R. 163, 172 (M.S.P.B.2013) (“Such matters belong to the judgment of agency managers, who are in the best position to decide what allocation of funding will best allow the agency to accomplish its mission.”). The agency’s decision has not been shown to be unreasonable and the Board did not err in applying the “efficiency of the service” standard to exclude the second-guessing of agency management and spending decisions.

Ms. Calhoun also states that the Board erred in finding that the deciding official, Col. Sanborn, reviewed the presentation accompanying her written reply prior to issuing the Notice of Decision. The Board determined, based on Col. Sanborn’s sworn declaration, that Col. Sanborn did review Ms. Calhoun’s proposal. Substantial evidence supports the Board’s finding, for there was no contrary information.

Ms. Calhoun also states that the Army improperly delegated authority to Col. Sanborn in violation of internal DOD furlough policies. She states that the policies prohibited “further delegations” and that Col. Sanborn was not at the identified minimum rank. The policy memorandum Ms. Calhoun identifies states:

Relative to the review and decision on individual employee requests for exception, per guidance issued via the Principal Deputy Assistant Secretary of Defense, Readiness and Force Management, memorandum, dated March 13, 2013, activities should designate the Deciding Official. The designated Deciding Official will be no lower than a local Installation Commander, senior civilian or equivalent who would be in the best position to determine the fair and equitable application of the furlough. Deciding Official responsibilities may not be further delegated.

S.A. 37. The Board found that the memorandum contemplated that Deciding Official authority could be delegated several times, but to an official “no lower than a local Installation Commander, senior civilian or equivalent.” We discern no error in the Board’s interpretation. Substantial evidence also supports the Board’s determination that Col. Sanborn was no lower than a “local Installation Commander.”

Ms. Calhoun states that she was deprived of a “meaningful reply” because Col. Sanborn lacked the authority to review and act on her budget proposals. The Board found that Col. Sanborn’s authority as a deciding official was limited to determining whether Ms. Calhoun was within one of the DOD prescribed categories of exempted employees and whether a reduction in her furlough hours was necessary to the agency’s mission. While a deciding official must possess authority to take or recommend action, due process does not require “unfettered discretion to take any action he or she believes is appropriate” or require “consideration of] alternatives that are prohibited, impracticable, or outside of management’s purview.” Rodgers v. Dep’t of the Navy, 2015 MSPB 45 ¶ 6, 122 M.S.P.R. 559 (2015). Here the authority of the deciding official was commensurate with the nature of the furlough decisions.

Ms. Calhoun states that her Board panel was improperly constituted because it was composed of only two members, and that this contravened 5 C.F.R. § 1200.3(d) and 5 U.S.C. § 1201. Contrary to Ms. Calhoun’s assertion, the regulations contemplate that a Board may be composed of two members. See 5 C.F.R. 1200.3(e) (“This section applies only when at least two Board members are in office.”). Two-member Board panels may issue final decisions when both members are in agreement. 5 C.F.R. § 1200.3(b)-(d). No procedural error or due process violation has been shown in the implementation and review of the furlough.

Ms. Calhoun makes several other arguments on appeal, including that the implementation of the furloughs violated the non-delegation doctrine and separation of powers principles; that the furloughs amount to a bill of attainder; that the oral reply official was not properly designated; and that her written reply was a protected whistleblowing disclosure. No merit accompanies any of these arguments.

Conclusion

We discern no reversible error in the Board’s rulings that the furlough of Ms. Calhoun was in accordance with law and implemented without procedural error or due process violation.

AFFIRMED.

No costs.

      . Calhoun v. Dep’t of Army, No. PH-0752-13-5389-I-1, 2016 WL 1566603 (M.S.P.B. Apr. 19, 2016) (Final Order).

      . The record reflects that Ms. Calhoun’s proposals were ultimately considered on the merits by die ACC on August 27, 2013. The ACC recommended no action on the proposal. S.A. 111.