Zinus, Inc. v. United States
Court No. 23-00272 (Ct. Int‘l Trade)
United States Court of International Trade
January 10, 2025
Case 1:23-cv-00272-MMB Document 24 Filed 01/10/25 EAPA Case No. 7718 PUBLIC DOCUMENT
I. SUMMARY
U.S. Customs and Border Protection (CBP) has prepared this remand redetermination pursuant to the remand order, dated September 11, 2024, issued by this Court.1 This remand concerns CBP‘s determination2 under the Enforce and Protect Act of 2015 (EAPA), that Zinus, Inc. (Zinus) evaded the antidumping duty order (AD Order) on certain wooden bedroom furniture (WBF) products3 from the People‘s Republic of China (China). The Court granted the Government‘s motion for voluntary remand to allow CBP to (i) reconsider its determination that the products imported into the United States by Zinus constituted covered merchandise, consistent with the Department of Commerce‘s (Commerce) scope ruling regarding Zinus’ metal and wood platform beds,4 and (ii) review the administrative record and provide Zinus with access to confidential information not previously made available during the investigation and the administrative review and an opportunity to respond to such information.
As explained below, after reviewing the information placed on the administrative record during the investigation, in light of the Zinus Scope Ruling, CBP reverses its determination of
II. BACKGROUND
On July 21, 2023, following an investigation under EAPA, the Trade Remedy Law Enforcement Directorate (TRLED) issued an affirmative determination of evasion, finding that Zinus imported covered merchandise into the customs territory of the United States through evasion.6 Based on the substantial evidence on the record, TRLED found that Zinus imported merchandise subject to the AD Order by entering wood and metal platform beds through the use of a general product description and entry as non-covered merchandise not subject to the AD Order.7 CBP determined that Zinus’ material false statements or omissions resulted in the required cash deposits not being collected on its merchandise.8
As noted by TRLED, merchandise covered by the AD Order includes “(1) [w]ooden beds such as loft beds, bunk beds, and other beds; [and] (2) wooden headboards for beds (whether stand-alone or attached to side rails), wooden footboards for beds, wooden side rails for beds.”9 TRLED determined that Zinus imported certain models of WBF that were covered merchandise during the period of investigation.10 TRLED reached this determination based on Zinus’ statement that it imported metal and wood platform beds, as well as documentation submitted by Zinus during the investigation.11 Other evidence relied upon by TRLED in reaching an affirmative finding of evasion included cargo exams and CF-28 responses that indicated certain
On November 29, 2023, the Regulations and Rulings Directorate (RR) issued its final administrative determination affirming TRLED‘s finding of evasion.13 RR concluded that products imported by Zinus fit within the plain language of the AD Order.14 In reaching its conclusion, RR applied Commerce‘s previous scope ruling on certain WBF imported by the University Loft Company.15 RR found (i) the use of wood products in the beds to be extensive, and (ii) the wood products to be integral to the composition of the beds.16
On February 15, 2023, Zinus requested a scope ruling from Commerce regarding whether seven models of metal and wood platform beds that it imports into the United States from China are covered by the scope of the AD Order. On January 11, 2024, Commerce issued a scope ruling finding that these seven models of metal and wood platform beds imported by Zinus are not covered by the scope of the AD Order.17 Commerce relied upon its prior University Loft scope ruling and determined that the use of wood products was not extensive in the beds.18 It also found that “the wood components are not integral to Zinus’ platform bed compositions to such an extent that if the wood was removed, the resulting products would be substantially different from the original product.”19
On remand, CBP advised the parties by email on September 20, 2024 that the record was reopened.26 CBP placed an Administrative Protective Order (APO) on the record and an APO Authorized Recipient List was published. The Zinus Scope Ruling was also placed on the record. CBP advised the parties that, in response to the confidential information not previously available or to the Zinus Scope Ruling, the parties may submit factual information and arguments via the EAPA Case Management System (CMS). On October 10, 2024, CBP advised the parties by email that written arguments may be submitted.27 Zinus submitted its comments on October 21, 2024.28 Zinus requested that CBP reverse its affirmative evasion determination on remand, arguing that the merchandise reviewed by CBP is not covered by the scope of the AD Order.29 Zinus did not submit any factual information. CVB made no submission to CBP on remand.
In its Determination, CBP found that Zinus imported metal and wood platform bed models by evasion.30 During its investigation, TRLED reviewed various models of such platform beds imported by Zinus, including the “Wesley“; the “Paul” (subsequently named “the Sonoma“); the “Olivia” (subsequently named the “Tuscan“); the “Therese” (subsequently named the “Horizon“); and the “Suzanne” (also known as the “Ironline“).31 Zinus indicated to CBP that some of these models were metal and wood platform beds.32 Other models were determined to be metal and wood platform beds through CF-28 responses and cargo exams.33 CBP determined that the AD Order covered all of these models.34 Given that Zinus did not enter these platform bed models as being subject to the AD Order, CBP determined that Zinus entered the merchandise into the United States through evasion.35
Under EAPA, evasion is defined as:
entering covered merchandise into the customs territory of the United States by means of any document or electronically transmitted data or information, written or oral statement, or act that is material and false, or any omission that is material, and that results in any cash deposit or other security or any amount of applicable antidumping or countervailing duties being reduced or not being applied with respect to the merchandise.36
In turn, covered merchandise is merchandise that is subject to an AD or countervailing duty (CVD) order.37 As noted above, Commerce has issued a final, unappealable38 scope ruling that found certain Zinus metal and wood platform bed models to be outside the scope of the AD
After reviewing the Zinus Scope Ruling, CBP has determined that it applies to all of the Zinus bed models that were the subject of this investigation. Specifically, the Zinus Scope Ruling directly analyzed whether the Wesley, Paul/Sonoma, Olivia/Tuscan, and Therese/Horizon models discussed above are subject to the AD Order and found that none of these models constitutes in-scope merchandise.
We also note that Zinus provided information during the EAPA proceeding indicating that the Suzanne model was being converted from wood to bamboo.44 It is unclear whether the Suzanne/Ironline models imported during the period of investigation were made from bamboo. However, to the extent they were made with wood rather than bamboo, as discussed above, the information on the record regarding the Suzanne/Ironline model demonstrates that it is very similar in appearance and construction to the models found by Commerce to be outside the scope of the AD Order. Therefore, we conclude that the Suzanne model is not covered merchandise.45
Thus, the merchandise imported by Zinus during the period of investigation did not constitute covered merchandise within the meaning of
The Determination and the Administrative Review are hereby reversed.
On December 13, 2024, CBP issued the draft of this remand redetermination and afforded the parties to the investigation an opportunity to submit comments. On December 20, 2024, Zinus submitted comments agreeing with CBP‘s reversal of its original finding of evasion.46 CVB did not submit any comments.
In its comments, Zinus noted that Commerce‘s final and unappealable scope ruling covered all of the models at issue in the underlying EAPA investigation.47 While the Suzanne/Ironline models were not directly addressed in the Zinus Scope Ruling, Zinus does not challenge that these models are very similar in appearance and construction to the models that Commerce found are outside the scope of the AD Order.48 Thus, Zinus “agree[d] with CBP‘s reversal of its affirmative evasion determination on remand on the grounds that these models are not covered by the scope of the AD Order, and consequently, could not have evaded antidumping duties imposed pursuant to this order.”49
Upon review of the entire administrative record, and in light of Commerce‘s decision in the Zinus Scope Ruling, CBP reverses its determination of evasion.
/s/ VICTORIA Y CHO
Victoria Cho
Director – Enforcement Operations Division
Trade Remedy Law Enforcement Directorate
Office of Trade
U.S. Customs and Border Protection
/s/ ALICE A KIPEL
Alice A. Kipel
Executive Director
Regulations and Rulings
Office of Trade
U.S. Customs and Border Protection