OPINION and ORDER
This consolidated action involves an administrative review conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty order covering Floor-Standing, Metal-Top Ironing Tables from China. See Floor-Standing, Metal-Top Ironing Tables and Certain Parts Thereof from the People’s Republic of China, 76 Fed.Reg. 15,295 (Dep’t of Commerce Mar. 21, 2011) (final results admin, review) {“Final Results ”); see also Issues and Decision Memorandum for Ironing Tables from China, A-570-888 (Mar. 14, 2011), available at http://ia.ita.doc.gov/frn/ summary/PRC/2011-6560-l.pdf (last visited May 3, 2012) {“Decision Memorandum ”).
Before the court are the Final Results of Redetermination
{“Remand Results
”), Mar. 14, 2012, ECF No. 83, filed by Commerce pursuant to
Home Products Int'l, Inc. v. United States,
36 CIT -,
The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006), 1 and 28 U.S.C. § 1581(c) (2006). For the reasons set forth below, the Remand Results are sustained, Since Hardware’s motion for reconsideration is denied, and HPI’s motion for reconsideration is granted.
I. Remand Results
In the
Final Results
Commerce calculated the surrogate hourly wage rate using ISIC Revision 3 data from Ecuador, Egypt, Indonesia, Jordan, the Philippines, Peru, Thailand, and the Ukraine. ISIC Revision 3, however, did not contain data from India, the primary surrogate country. It was this specific issue — Commerce’s decision to use only ISIC Revision 3 data and thereby exclude labor data from the primary surrogate country — that the court remanded to Commerce.
Home Products,
36 CIT at -,
On remand, Commerce included Indian data in its surrogate labor calculation, using data from ISIC Revisions 2 & 3 (Commerce also included labor data from Nicaragua, as well as from the eight countries used in the
Final
Results).
Remand Results
at 3-4. As a result, Since Hardware’s margin changed from 67.37 percent to 66.06 percent.
Id.
at 12. Since Hardware challenges two aspects of the
Remand Results:
First, that
Commerce
erred by limiting the remand proceeding to one issue raised in
Shandong
(ISIC Revision 3 and the exclusion of Indian data); and second, that Commerce should have applied its new labor wage rate policy,
Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production:
Since Hardware contends that the Remand Results are in error because Commerce did not address all of the issues raised and addressed by the court in Shandong. Since Hardware's Comments on Remand Results at 3-5, Consol. Court No. 11-00104, Apr. 4.2012, ECF No. 90 ("Since Hardware's Comments"). Since Hardware, however, has misread Home Products and the scope of the remand order. The remand was directed to the limited question of whether Commerce properly excluded labor data from countries that reported under ISIC Revision 2. Home Products, 36 CIT at -,
Since Hardware also argues that on remand Commerce should have applied its New Labor Wage Rate Policy-a methodology not in effect at the time of the Final Results. Since Hardware's Comments at 5-8. Although the court understands Since Hardware's desire to obtain the benefit of this new policy, the court cannot direct Commerce by affirmative injunction to apply that policy retroactively to this proceeding. See, e.g., Laizou Auto Brake Equip. Co. v. United States,
II. Since Hardware Motion for Reconsideration
Since Hardware has also filed a motion for reconsideration pursuant to USCIT Rule 59 seeking vacatur of (1) this court's order in Home Products sustaining Commerce's selection of surrogate financial statements (because Since Hardware failed to timely file an administrative case brief and exhaust administrative remedies), Home Products, 36 CIT at -,
A. Surrogate Country Financial Statements
Shortly after Since Hardware commenced its action (Court No. 11-00105, consolidated with Court No. 11-00104), HPI filed a motion to dismiss Since Hardware’s complaint pursuant to USCIT Rule 12(b)(5). See HPI Mot. to Dismiss, Court No. 11-00105, May 26, 2011, ECF No. 27 (“HPI Mot. to Dismiss”). Count One of Since Hardware’s complaint challenges Commerce’s selection and use of financial statements used to derive financial ratios to value overhead, SG & A, and profit. See Since Hardware Compl. ¶ 12, Court No. 11-00105, Apr. 28, 2011, ECF No. 9 (“Since Hardware Compl.”). In its motion to dismiss, HPI explained that Since Hardware failed to timely file its administrative case brief, which Commerce therefore did not consider in its deliberations. HPI Mot. to Dismiss at 2 (citing Decision Memorandum at 2, n. 1). HPI further explained that HPI in its administrative case brief did not challenge or even mention Commerce’s surrogate financial ratios (for factory overhead, SG & A expenses, and profit), and that Since Hardware therefore said nothing at all on this subject in its rebuttal brief because Since Hardware “had nothing to rebut.” Id. at 3.
HPI then argued that Count One must be dismissed because Since Hardware had failed to raise the issue at the administrative level when it had the opportunity. Id. at 6-9 (“[Since Hardware] did not file a Case Brief. Its failure deprived HPI of the opportunity to respond to [Since Hardware’s] arguments; it failed to permit the development of a record suitable for administrative review let alone judicial review. It failed to present an issue for [Commerce] to decide and yet it now urges the Court, in Count One of its Complaint, to conclude that [Commerce’s] decision, although not challenged administratively, should be set aside as being unsupported by substantial evidence or otherwise not in accordance with law.”). During a conference call with the parties, the court denied HPI’s motion without prejudice because it created an unusual procedural posture for trade actions under 28 U.S.C. § 1581(c) and USCIT Rule 56.2 (which typically do not involve USCIT Rule 12(b)(5) motions). See Order, Court No. 11-00105, June 21, 2011, ECF No. 33. The court then circulated a proposed scheduling order that, among other things, sought to confirm “that plaintiff has appropriately exhausted its administrative remedies by presenting its arguments to the agency in the first instance.” See Letter and draft Scheduling Order at 2, Consol. Court No. 11-00104, June 23, 2011, ECF No. 20. Without objection, the court entered the scheduling order. Scheduling Order, Consol. Court No. 11-00104, June 28, 2011, ECF No. 22 (“Scheduling Order”).
When Since Hardware filed its opening brief, it disregarded the exhaustion problem, plunging right into the merits of Commerce’s financial statement selection.
See
Since Hardware’s Mem. in Supp. of R. 56.2 Mot. 12-16, Aug. 18, 2011, ECF No. 30 (“Since Hardware Br.”). Since Hardware committed this omission despite knowing it had an exhaustion problem (carefully detailed in HPI’s motion to dismiss), and contrary to the clear direction in the Scheduling Order that Plaintiff have “ap
Needless to say, the court sustained Commerce’s financial statement selection:
Since Hardware only filed a rebuttal brief during the administrative proceeding and did not challenge Commerce’s selection of surrogate financial statements. See November 17, 2010 Letter from Since Hardware to Commerce, PR 83. In its brief before the court, Since Hardware raises for the first time issues relating to the selection of surrogate financial statements, issues that it could have raised before the agency in its case brief. Since Hardware has therefore failed to exhaust its administrative remedies. See 28 U.S.C. § 2637(d); Carpenter Tech. Corp. v. United States,30 CIT 1373 , 1374-75,452 F.Supp.2d 1344 , 1346 (2006) (citing Woodford v. Ngo,548 U.S. 81 , 88-90 [126 S.Ct. 2378 ,165 L.Ed.2d 368 ] (2006)); see also 19 C.F.R. § 351.309(c)(2). Accordingly, Commerce’s selection of financial statements is sustained.
Home Products,
36 CIT at -,
During the administrative review Commerce notified interested parties that administrative case briefs were due on November 15, 2010.
See
Memorandum from Analyst to File, Nov. 3, 2010, P.R. 80.
2
Since Hardware failed to meet that deadline. Commerce considered Since Hardware’s explanation for its tardiness, was not persuaded, and rejected its submission.
See
Letter from Law Firm of Dorsey Whitney to Commerce, Nov. 17, 2010, P.R. 83; Letter from Program Manager/IA to Law Firm of Dorsey Whitney Rejecting Submission, Nov. 22, 2010, P.R. 85. Before the court Since Hardware did not challenge Commerce’s rejection of its untimely-filed case brief.
See
Since Hardware Compl., Court No. 11-00105; Since Hardware Br., Consol. Court No. 11-00104, Aug. 18, 2001, ECF No. 30. Since Hardware waited until after the decision in
Home Products
to complain about this aspect of the administrative process. This is
Since Hardware offers no excuse for its failure to raise this issue in the normal course of the litigation. Instead, Since Hardware requests reconsideration because of an “intervening change in the controlling law,____” Since Hardware Mot. for Reconsideration at 3, Consol. Court No. 11-00104, Feb. 2, 2012, ECF No. 71 (citing
Grobest & I-Mei Indus. v. United States,
36 CIT -, -,
For the foregoing reasons Since Hardware’s motion to reconsider this court’s order in
Home Products
sustaining Commerce’s selection of surrogate financial statements (because Since Hardware failed to timely file an administrative case brief and exhaust administrative remedies),
Home Products,
36 CIT at -,
B. Brokerage and Handling
Since Hardware also moves for reconsideration of this court’s order deeming waived Since Hardware’s challenge to Commerce’s surrogate value determination for brokerage and handling (“B & H”). In that order the court had to deem waived Since Hardware’s challenge to Commerce’s brokerage and handling calculation because it was too cursory to warrant the court’s consideration:
Although Since Hardware challenges Commerce’s B & H calculation, it does so in a threadbare manner, without citation to any authority:
DOC’s B & H calculation is unsupported and is in error. As HPI recognized in its comment, “there is no direct evidence as to the packed, cubic volume of product (and corresponding weight).” Use by DOC of the HPI’s weight cannot be supported. DOC has not established a correlation between the cost for B & H with the decreased shipment weight. The B & H costs are to be based on the product being shipped. The surrogatecost utilized by DOC is linked to that surrogate weight shipped, not HPI’s constructed weight. Failure to utilize the accompanying surrogate shipped weight impermissibly distorts the B & H calculation.
Since Hardware Br. at 11-12. Missing is any effort at identifying standards against which the court can evaluate the reasonableness of Commerce’s B & H calculation (e.g., how Commerce typically calculates B & H in the non-market economy context, etc.). Since Hardware’s “argument” is all the more difficult to countenance because the Scheduling Order specifically cautioned against just such a submission:
Be advised that the court will not permit plaintiff to shift to the court and the other parties the burden of establishing the ossature for plaintiffs arguments against the standard of review the court applies to resolve them. Instead, the court will summarily sustain Commerce’s action.
Scheduling Order at 4, ECF No. 22. Rule 56.2(c)(2) requires that briefs “must include the authorities relied on and the conclusions of law deemed warranted by the authorities.” USCIT R. 56.2(c)(2). As Since Hardware has failed to satisfy this basic requirement, and abide by the express instructions of the Scheduling Order, the court deems this issue waived and sustains Commerce’s B & H calculation. See MTZ Polyfilms, Ltd. v. United States, 33 CIT -, -,659 F.Supp.2d 1303 , 1308-09 (2009); Fujian Lianfu Forestry Co. v. United States, 33 CIT -, -,638 F.Supp.2d 1325 , 1350 (2009); United States v. Zannino,895 F.2d 1 , 17 (1st Cir.1990) (“[Ijssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived. It is not enough merely to mention a possible argument in the most skeletal way, leaving the court to do counsel’s work, create the ossature for the argument, and put flesh on its bones.”) (internal citations omitted).
Memorandum and Order 1-3. In its motion for reconsideration Since Hardware concedes that its argument for brokerage and handling was inadequate, but blames the page limits contained in the Scheduling Order as the cause. This apologia rings hollow. On June 23, 2011, the court sent a letter to the parties with a draft scheduling order. Letter to Parties, Consol. Court No. 11-00104, June 23, 2011, ECF No. 20. That letter asked the parties to confer with one another on “proposed dates and page limits set forth in the attached draft scheduling order.” Id. (emphasis added). It also advised the parties to notify the court’s case manager if they had any requested revisions to the draft scheduling order. Id. Since Hardware offered no changes to the proposed page limits. The Scheduling Order also contained the following proviso: “3. Page Limits. If the parties are unable to brief this matter within the page limits set forth above, they are encouraged to file a motion for additional time (preferably on consent) rather than for additional pages.” Scheduling Order at 4. Since Hardware did not file a motion for additional time, or a motion for additional pages.
A separate revelation from a related case also casts serious doubt upon Since Hardware’s “page limits” excuse. In a case involving the subsequent administrative review (commenced shortly after this action), the court entered a scheduling order with
no
specific page limits. In that action Since Hardware filed the identical brokerage and handling argument, verbatim (except for one word).
See
Since Hardware Mem. of Points and Authorities in Supp. of R. 56.2 Mot. at 11, Consol. Court No. 11-00106, Sept. 8, 2011, ECF No. 42. Whatever the cause of Since
There being no manifest error in the court’s order deeming Since Hardware’s brokerage and handling argument waived, the court must deny Since Hardware’s motion for reconsideration.
III. HPI Motion for Reconsideration
HPI has also filed a motion for reconsideration of the court’s order sustaining Commerce’s decision to value Since Hardware’s carton input using market economy prices,
Home Products,
36 CIT at -,
Having a somewhat more complete understanding of HPI’s argument, the court agrees that this issue needs to be remanded to Commerce for further explanation. What makes this issue challenging is the carton input’s two-component nature, cartons and corrugated paper, each with their own prices and weights, each being sourced from market and non-market economy suppliers. Adding to the complexity is Since Hardware’s accounting treatment for the input, resulting in “pieces” of carton (which may be either carton or corrugated paper). Further complicating matters is the “conversion factor” that Since Hardware applied to calculate the market economy threshold, for which a detailed public explanation is not possible without divulging Since Hardware’s confidential business proprietary information.
Although Commerce concluded in the
Decision Memorandum
that “there is nothing on the record to suggest that Since Hardware’s reported conversion factor is unreasonable,”
Decision Memorandum
at 11, HPI appears to raise a legitimate concern that may test the reasonableness of the conversion factor. HPI questions whether Since Hardware’s carton accounting is suitable for Commerce’s market economy test, explaining that because a “piece” may have different weights or costs from other “pieces,” a “piece” cannot constitute a constant variable to measure the “volume” or “amount” of cartons under Commerce’s market economy test. The upshot is that unless Commerce applies a constant variable when measuring the “volume” or “amount” of cartons from each of the market and non-market sources, the resulting percentage of market economy
Under Since Hardware’s technique ... if there were a universe of three items— two pieces of ME-originating corrugated paper, each weighing ten grams, and one NME-originating carton weighing 400 grams, Since Hardware would contend that [Commerce’s] 33 percent threshold has been met: since each of the three items would have an assigned weight of 140 grams (420/3), the two pieces of ME-originating corrugated paper would constitute 66 percent of all POR purchases, thereby satisfying the Department’s 33 percent test. Indeed, even a single 10-gram piece of ME-originating corrugated paper would suffice to satisfy that test[.]
HPI Br. at 5.
HPI’s explanation does seem to test the reasonableness of Since Hardware’s conversion factor, and by extension, Commerce’s conclusion that Since Hardware satisfied the 33 percent market economy threshold. The court, though, cannot evaluate the reasonableness of Commerce’s decision-making reflected in one conclusory sentence in the Decision Memorandum. To adequately review this issue, the court needs Commerce to further elucidate its conclusion that Since Hardware’s market economy carton purchases do indeed exceed 33 percent of the total volume of Since Hardware’s carton purchases during the period of review. The court will therefore remand this issue to Commerce to provide that explanation.
IV. Conclusion
For the foregoing reasons, it is hereby
ORDERED that the Remand Results are sustained; it is further
ORDERED that Since Hardware’s Motion for Reconsideration, ECF No. 71, is denied; it is further
ORDERED that HPI’s Motion for Reconsideration, ECF No. 65, is granted, and this action is remanded to Commerce to further explain its conclusion that Since Hardware’s market economy carton purchases exceed 33 percent of the total volume of Since Hardware’s carton purchases during the period of review; it is further
ORDERED that Commerce shall file its remand results on or before June 19, 2012; and it is further
ORDERED that, if applicable, the parties shall file a proposed scheduling order with page limits for comments on the remand results no later than seven days after Commerce files its remand results with the court.
