Changzhou Hawd Flooring Co. v. United States
37 I.T.R.D. (BNA) 1671
Ct. Intl. Trade2015Background
- This case concerns the antidumping (AD) duty rate assigned to Changzhou Hawd Flooring Co., Ltd., a separate-rate respondent in the multilevel wood flooring from the PRC investigation.
- Commerce previously inferred the separate rate was more-than-de minimis after 110 respondents failed to cooperate, but declined to compute a new specific separate-rate margin because individually investigated margins were zero, de minimis, or based on facts available.
- Commerce had earlier attempted a belated individual investigation of Changzhou Hawd, which the court deemed arbitrary and capricious and remanded for a lawful method to set Changzhou Hawd’s rate.
- On fourth remand, Commerce again inferred a more-than-de-minimis separate rate but chose to continue applying the existing 3.30% cash-deposit rate from the amended final determination as an interim measure until the Second Administrative Review set the assessed rate.
- Changzhou Hawd challenged Commerce’s decision as unlawful, unsupported by substantial evidence, and noncompliant with the court’s prior remand; the Court of International Trade affirmed Commerce’s fourth redetermination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce must use the statutory "expected method" (weighted average of individually investigated margins) to set the separate rate when individually investigated margins are zero/de minimis/FA | Changzhou Hawd: Commerce has no basis to abandon the expected method and should assign a de minimis separate rate | Commerce: Statute permits "any reasonable method" when expected method is not reflective; agency discretion allows other reasonable estimates | Held: Commerce may use any reasonable method; its choice to retain 3.30% as interim cash-deposit rate is within statutory discretion |
| Whether Commerce’s inference that the separate rate is more-than-de-minimis (based on 110 noncooperating respondents and corroborating review rates) is supported by substantial evidence | Changzhou Hawd: Reliance on noncooperation and later-stage rates improperly penalizes cooperative separate-rate respondents | Commerce: Noncooperation and corroborating separate-rate results in subsequent reviews reasonably support the inference | Held: Inference is reasonable and supported by substantial evidence |
| Whether Commerce’s late individual investigation of Changzhou Hawd complied with law and remand instructions | Changzhou Hawd: Late individual investigation was arbitrary and capricious; court previously invalidated it | Commerce: Maintains discretion to investigate but defers given remand | Held: Court previously found the late investigation arbitrary; on this remand Commerce complied by not pursuing the individual investigation and using the interim rate |
| Whether applying the 3.30% cash-deposit rate (derived from the investigation amended final determination) is lawful given that its underpinning margins were later found unsupported | Changzhou Hawd: 3.30% lacks evidentiary basis and should not be applied | Commerce: 3.30% is a conservative, temporary, administratively efficient estimate until the Second Administrative Review sets the assessed rate | Held: Applying 3.30% temporarily is reasonable, conservative, supported by record context, and complies with remand instructions |
Key Cases Cited
- Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir. 2013) (interpreting "any reasonable method" for all-others rate and deferring to Commerce’s reasonable constructions)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006) (substantial-evidence standard requires rational connection between record and agency conclusions)
- Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (U.S. 1962) (agency must articulate a rational connection between facts found and choices made)
- Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330 (Fed. Cir. 2002) (discussing rational-actor assumption in Commerce margin determinations)
- Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837 (U.S. 1984) (agency’s reasonable statutory interpretations entitled to deference)
- Florida Power & Light Co. v. Lorion, 470 U.S. 729 (U.S. 1985) (courts should remand to agencies when the record does not support agency action)