322 F. Supp. 3d 1308
Ct. Intl. Trade2018Background
- Commerce completed the 2012–2013 administrative review of the antidumping duty order on multilayered wood flooring (MLWF) from the PRC and issued Final Results assigning margins: 0% to Dalian Dajen and 13.74% to mandatory respondent Jiangsu Senmao; the 13.74% rate was applied to separate-rate respondents.
- Commerce used Thailand as the surrogate country for valuing NME factors of production and relied on Thai GTA import data and Thai financial statements (Eiwlee) to calculate surrogate values and surrogate financial ratios.
- Multiple respondents and interested parties filed lawsuits in the U.S. Court of International Trade challenging various aspects of Commerce’s determinations (surrogate values for plywood and overlaying glue, foreign inland freight surrogate, selection of surrogate financial statements, denial of voluntary respondent status for Fine Furniture, VAT deduction from export price, assignment of separate-rate margin, and timeliness of a review request).
- The court reviewed the administrative record under 19 U.S.C. § 1516a(b)(1)(B)(i), asking whether Commerce’s findings were supported by substantial evidence and in accordance with law.
- The court found several agency determinations unsupported or unlawful in part and remanded for reconsideration: plywood surrogate value (limited failure to address a Coalition argument), overlaying-glue classification and valuation, foreign inland freight surrogate cost (relied on non-record assumptions), denial of Fine Furniture’s voluntary-respondent request (statutory misinterpretation), and the VAT deduction from Senmao’s EP starting price (unsupported factual finding).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Surrogate value for plywood (Thai GTA data) | Coalition: Commerce should have excluded implausibly low imports from Taiwan and U.S.; record shows those AUVs are aberrational. | Commerce: used Thai import AUV excluding subsidized/NME sources; methodology appropriate. | Remanded: Commerce failed to address Coalition’s chips/sawdust comparison argument in final memo; must reconsider plywood SV. |
| Surrogate value for overlaying glue (HTS classification 3506 v. 3909) | Senmao et al.: Glue is properly classifiable under HTS 3909 (resins); Commerce misapplied tariff-classification rules and selected 3506 without record support. | Commerce: selected HTS 3506 subheading as best available data under SV criteria. | Remanded: Commerce’s choice unsupported by substantial evidence and misapplied GIRs; must determine correct heading (or reopen record) before selecting subheading. |
| Foreign inland freight surrogate cost (World Bank Doing Business) | Senmao et al.: Commerce relied on Doing Business $210 but used non-record assumptions for container weight and distance and improperly prorated handling cost by distance. | Commerce: methodology consistent with prior practice; assumptions reasonable. | Remanded: Parts of the freight calculation rest on non-record assumptions; Commerce must base any new surrogate cost on record-supported factual findings (may consider other record evidence). |
| Selection of surrogate financial statements (Eiwlee) | Plaintiffs: Neotech (plywood producer) or other statements are more comparable; Eiwlee statements may reflect subsidies or audit-qualified data. | Commerce: Eiwlee produces MLWF and its statements are best available; the audit qualification concerned 2013 retirement disclosures and did not taint 2012 data; no record evidence of government packing-credit subsidy. | Sustained: Court upheld Commerce’s selection of Eiwlee and its use of 2012 figures in 2013 statements; record did not compel rejection for subsidy or auditor qualification. |
| Denial of voluntary respondent status (Fine Furniture) | Fine Furniture: Commerce improperly denied request under pre-TPEA statutory standard; Commerce interpreted “so large” unreasonably to deny even a single volunteer. | Commerce: denial was within its discretion given resource constraints and complexity. | Remanded: Court rejected Commerce’s statutory construction (number of requesters cannot be a single request being “so large”); Commerce must reconsider under correct interpretation. |
| Deduction for irrecoverable VAT from EP starting price | Respondents: Commerce’s 8% deduction is unsupported; record (Senmao’s VAT submissions) shows input VAT treatment applies to domestic and export sales and Commerce’s finding that irrecoverable input VAT is an export-only charge is unsupported. | Commerce: applied prior methodology to reach tax-neutral comparison and treated unrefunded input VAT as an export charge. | Remanded: Court found the critical factual finding (that irrecoverable input VAT is imposed only on exports) contradicted by Senmao’s record evidence; deduction unlawful as applied here. |
| Assignment of 13.74% separate-rate (all-others) based on one non-zero respondent | Old Master: rate is non-representative and untethered to commercial reality because based on only one mandatory respondent (Senmao). | Commerce: uses investigation-style all-others method; statute and precedent permit using rates from individually examined respondents. | Sustained: Court upheld Commerce’s practice and found no statutory violation; Old Master may benefit from remand outcomes. |
| Timeliness of review request for Shenyang Haobainian Wooden Co. | Penghong Plaintiffs: petitioner’s review request was untimely; Commerce unlawfully accepted a late amendment and reviewed the company. | Commerce: accepted the later request; preliminary results proceeded and issue was not raised in respondents’ case brief. | Denied (in part): Court dismissed claims by co‑plaintiffs for lack of standing and denied relief for Shenyang Haobainian Wooden Co. for failure to exhaust administrative remedies (argument not raised in case brief). |
Key Cases Cited
- SKF USA Inc. v. United States, 630 F.3d 1365 (Fed. Cir. 2011) (agency must address important arguments raised by parties)
- Degussa Corp. v. United States, 508 F.3d 1044 (Fed. Cir. 2007) (WCO Explanatory Notes generally indicative of proper tariff interpretation)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency actions must be upheld on the basis articulated by the agency)
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) (deference to reasonable agency statutory interpretation)
- Gozlon-Peretz v. United States, 498 U.S. 395 (1991) (statutes take effect on enactment absent contrary indication)
- Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345 (Fed. Cir. 2016) (procedural framework supports Commerce using investigation all‑others method in reviews)