Lifestyle Enterprise, Inc. v. United States
2012 Ct. Intl. Trade LEXIS 118
| Ct. Intl. Trade | 2012Background
- This court reviews Commerce's Final Results for wooden bedroom furniture from PRC, including Orient's 216.01% AD rate and Yihua Timber's 29.89% rate.
- Lifestyle and consolidated plaintiffs challenged the Final Results and subsequent remands, with prior rulings in Lifestyle I and Lifestyle II remanding issues to Commerce.
- On remand, Commerce valued wood inputs using NSO volume-based data and calculated a new Orient AFA rate of 130.81%.
- Plaintiffs argued the 130.81% AFA rate is not reasonably reflective of Orient's commercial reality and is punitive; they emphasized reliance on a small portion of margins from a cooperating respondent.
- The court sustains Commerce’s NSO-based wood input valuation but remands Orient’s AFA rate, finding the basis for 130.81% not supported by substantial evidence.
- The court also notes procedural concerns, including failure to follow remand directives to start with the highest rate and add a deterrent, and lack of opportunity for timely comments on significant methodological changes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Orient's AFA rate is reasonably tied to commercial reality | Lifestyle: rate is punitive and aberrant, not tied to Orient's actual margins. | Commerce: AFA rate is an admissible adverse inference using record data to deter noncooperation. | No; the 130.81% rate is not supported by substantial evidence. |
| Whether NSO volume-based data for wood inputs is supported | Lifestyle and Yihua Timber contend NSO volume data are inferior or waived; Yihua Timber argues for alternative data. | Commerce: NSO volume-based data upheld; alternatives were adequately waived or rejected. | Yes; NSO volume-based valuation is sustained. |
| Whether Commerce complied with remand instructions | Lifestyle: Commerce failed to start from the highest rate and add deterrence as remand required. | Commerce: methodologically consistent with remand guidance and contemporaneous data rationale. | No; remand instructions not fully followed; partial remand sustained. |
Key Cases Cited
- Gallant Ocean (Thai.) Co. v. United States, 602 F.3d 1319 (Fed. Cir. 2010) (AFA rate must be a reasonably accurate estimate tied to commercial reality)
- KYD, Inc. v. United States, 607 F.3d 760 (Fed. Cir. 2010) (AFA rate must not be punitive; corroboration context varies)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir. 2012) (Adverse facts can be inappropriate if overly punitive)
- Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330 (Fed. Cir. 2002) (0.04% of sales example; high margins must have mainstream support)
- PAM, S.p.A. v. United States, 582 F.3d 1336 (Fed. Cir. 2009) (Small data sets used to justify high AD margins require scrutiny)
- Qingdao Taifa Grp., Co. v. United States, 780 F. Supp. 2d 1342 (CIT 2011) (Taifa IV; nuances of data selection for AFA rates)
- Qingdao Taifa Grp., Co. v. United States (Taifa III), 760 F. Supp. 2d 1379 (CIT 2010) (need for corroboration and proper data mainstreams in AFA)