2023 CIT 126
Ct. Int'l Trade2023Background
- Administrative review of antidumping duties on multilayered wood flooring from China for Dec. 1, 2019–Nov. 30, 2020; Jiangsu Senmao was the mandatory respondent.
- Commerce preliminarily selected Brazil as the primary surrogate country, used Malaysian data for log inputs, denied Senmao a by-product offset, and calculated a 0% preliminary margin.
- In the Final Results Commerce retained Brazil as primary but continued to value logs with Malaysian data, adjusted Brazilian plywood surrogate data, revised Brazilian financial ratios, and calculated a final margin of 39.27%.
- Senmao and Lumber Liquidators challenged Commerce’s treatment of surrogate data, the plywood adjustment, the financial-ratio calculation, and the denial of a by-product offset.
- The Court sustained Commerce’s financial-ratio calculation and its denial of the by-product offset, found Lumber Liquidators waived its aberrational-data argument, and remanded Commerce’s choice/use of surrogate countries for logs and the plywood-data adjustment for further explanation or reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Selection of Brazil as primary surrogate while using Malaysian log data | Commerce unlawfully departed from its single-surrogate preference without citing record evidence showing Brazilian log data were unreliable or unavailable | Commerce relied on record GTA import data showing Malaysia distinguishes log species and thus Malaysian values better value logs | Not supported by substantial evidence or law; remanded for further explanation/reconsideration |
| Whether Lumber Liquidators may argue Malaysian data are aberrational | Malaysian data produce aberrational margin and thus should be excluded | Argument not properly exhausted administratively; waived | Waived for failure to exhaust (and raised too late at oral argument) |
| Adjustment of Brazilian plywood surrogate values (removing Spanish-import component) | Commerce deviated from its aberrational-in-the-aggregate practice without showing aggregate aberration | Commerce reasonably discarded clearly incorrect data (inconsistent units) under its authority to use best available information | Remanded: Commerce relied on an exhibit not in the record and failed to supply adequate support; needs further explanation or proper record citation |
| Calculation of Brazilian financial ratios (treatment of transport expenses; exclusion of certain interest income) | Commerce double-counted by classifying transport as overhead and improperly excluded some interest-income offsets | Transport can be an overhead distinct from outbound freight; Commerce properly excluded interest items that could be long-term or indeterminate | Sustained: Commerce’s treatment of transport and exclusion of indeterminate interest income are supported and consistent with practice |
| Denial of by-product offset for wood scrap | Senmao entitled to offset; Commerce treated Senmao inconsistently with prior reviews and should have allowed opportunity to cure | Senmao failed to substantiate production quantities during the POR; Commerce reasonably denied offset and need not reopen where respondent admits not tracking the data | Sustained: denial reasonable—lack of production records justified denial; no practicable opportunity to cure required |
Key Cases Cited
- Nation Ford Chem. Co. v. United States, 166 F.3d 1373 (Fed. Cir. 1999) (describing surrogate-value construction of hypothetical market value in NME proceedings)
- Jiaxing Brother Fastener Co. v. United States, 822 F.3d 1289 (Fed. Cir. 2016) (noting regulatory preference for a single surrogate country)
- SKF USA, Inc. v. United States, 263 F.3d 1369 (Fed. Cir. 2001) (agency must apply its established practice or adequately explain departures)
- Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir. 2013) (strict view of administrative-exhaustion requirement)
- Pakfood Pub. Co. v. United States, 724 F. Supp. 2d 1327 (Ct. Int’l Trade 2010) (standards for offsets and burden to substantiate short-term interest income)
- Peer Bearing Co.–Changshan v. United States, 752 F. Supp. 2d 1353 (Ct. Int’l Trade 2011) (when single-country preference is unreasonable due to demonstrably aberrational data)
- SolarWorld Americas, Inc. v. United States, 320 F. Supp. 3d 1341 (Ct. Int’l Trade 2018) (Commerce’s ‘‘aberrational in the aggregate’’ analysis of HTS import data)