Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01904/USCOURTS-ca13-15-01904-0/pdf.json

Parties Involved:
Armstrong Wood Products (Kunshan) Co., Ltd.
Appellant
Changzhou Hawd Flooring Co., Ltd.
Not party
Coalition for American Hardwood Parity
Appellee
Dalian Huilong Wooden Products Co., Ltd.
Not party
Dunhua City Dexin Wood Industry Co., Ltd.
Not party
Dunhua City Jisen Wood Industry Co., Ltd.
Not party
Fine Furniture (Shanghai) Limited
Not party
Home Legend, LLC
Not party
Karly Wood Product Limited
Not party
Kunshan Yingyi-Nature Wood Industry Co., Ltd.
Not party
Lumber Liquidators Services, LLC
Not party
United States
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

CHANGZHOU HAWD FLOORING CO., LTD., 

DUNHUA CITY JISEN WOOD INDUSTRY CO., 

LTD., DUNHUA CITY DEXIN WOOD INDUSTRY 

CO., LTD., DALIAN HUILONG WOODEN 

PRODUCTS CO., LTD., KUNSHAN YINGYINATURE WOOD INDUSTRY CO., LTD., KARLY 

WOOD PRODUCT LIMITED, FINE FURNITURE 

(SHANGHAI) LIMITED, LUMBER LIQUIDATORS 

SERVICES, LLC, ARMSTRONG WOOD PRODUCTS 

(KUNSHAN) CO., LTD.,

Plaintiffs-Appellants

HOME LEGEND, LLC,

Plaintiff

v.

UNITED STATES, THE COALITION FOR 

AMERICAN HARDWOOD PARITY,

Defendants-Appellees

______________________ 

2015-1899, 2015-1901, 2015-1903, 2015-1904

______________________ 

Appeals from the United States Court of International 

Trade in No. 1:12-cv-00020-DCP, Judge Donald C. Pogue.

______________________ 

Decided: February 15, 2017 

______________________ 

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2 CHANGZHOU HAWD FLOORING CO. v. US

JEFFREY S. GRIMSON, Mowry & Grimson, PLLC, 

Washington, DC, argued for all plaintiffs-appellants. 

Plaintiff-appellant Fine Furniture (Shanghai) Limited 

also represented by KRISTIN HEIM MOWRY, JILL A.

CRAMER, SARAH M. WYSS. 

GREGORY S. MENEGAZ, DeKieffer & Horgan, PLLC, 

Washington, DC, for plaintiffs-appellants Changzhou 

Hawd Flooring Co., Ltd., Dunhua City Jisen Wood Industry Co., Ltd., Dunhua City Dexin Wood Industry Co., Ltd., 

Dalian Huilong Wooden Products Co., Ltd., Kunshan 

Yingyi-Nature Wood Industry Co., Ltd., Karly Wood 

Product Limited. Also represented by JAMES KEVIN 

HORGAN, ALEXANDRA H. SALZMAN. 

ARTHUR K. PURCELL, Sandler Travis & Rosenberg, 

P.A., New York, NY, for plaintiff-appellant Lumber Liquidators Services, LLC. Also represented by MARK 

LUDWIKOWSKI, KRISTEN SMITH, Washington, DC; 

MICHELLE L. MEJIA, Chicago, IL.

HAROLD DEEN KAPLAN, Hogan Lovells US LLP, Washington, DC, for plaintiff-appellant Armstrong Wood Products (Kunshan) Co., Ltd. Also represented by CRAIG 

ANDERSON LEWIS.

TARA K. HOGAN, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. 

Also represented by BENJAMIN C. MIZER, JEANNE E.

DAVIDSON, CLAUDIA BURKE; SHELBY ANDERSON, Office of 

Chief Counsel for Trade Enforcement and Compliance, 

United States Department of Commerce, Washington, 

DC.

JEFFREY STEVEN LEVIN, Levin Trade Law PC, Bethesda, MD, for defendant-appellee The Coalition for American Hardwood Parity. 

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CHANGZHOU HAWD FLOORING CO. v. US 3

______________________ 

Before LOURIE, TARANTO, and CHEN, Circuit Judges.

TARANTO, Circuit Judge. 

This case arises from the U.S. Department of Commerce’s antidumping-duty investigation of multilayered 

wood flooring imports from the People’s Republic of China. The appellants here are Chinese entities that Commerce found had demonstrated their independence from 

the Chinese government and so deserved a “separate” 

antidumping-duty rate, not the so-called China-wide rate

that applies to entities that had not shown their independence from the Chinese government. Commerce did 

not individually investigate appellants to determine firmspecific dumping margins. Instead, it assigned them a 

rate that, though not specified numerically, was declared 

to be more than de minimis, even though it found zero or 

de minimis dumping margins for all three of the Chinese 

firms that it had individually investigated. The Court of 

International Trade affirmed that determination. 

Appellants contend that they are entitled to a de minimis rate. After the Court of International Trade rendered its decision in this case, our court made clear that 

the “separate rate” method used by Commerce here is a 

departure from the congressionally approved “expected 

method” applicable when all of the individually investigated firms have a zero or de minimis rate, which is the 

case here, and that certain findings are necessary to 

justify such a departure. Albemarle Corp. & Subsidiaries 

v. United States, 821 F.3d 1345, 1348 (Fed. Cir. 2016). 

Under the “expected method,” appellants would be entitled to a de minimis rate. Because Commerce did not 

make the findings needed to justify departing from the 

expected method, we vacate the Court of International 

Trade’s judgment, and we remand. 

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4 CHANGZHOU HAWD FLOORING CO. v. US

I 

In 2010, the Department of Commerce initiated an 

antidumping-duty investigation of multilayered wood 

flooring from China, based on a petition filed by the 

Coalition for American Hardwood Parity under 19 

U.S.C. § 1673a(b). Multilayered Wood Flooring from the 

People’s Republic of China: Initiation of Antidumping 

Duty Investigation, 75 Fed. Reg. 70,714 (Dep’t of Commerce Nov. 18, 2010). In order to select particular Chinese firms to be individually investigated as mandatory 

respondents, Commerce sent questionnaires to the Chinese exporters and producers identified in the petition, 

asking about the quantities and value of the goods at 

issue sent to the United States. Id. at 70,717–18. Of the 

190 recipients of the questionnaire, 80 timely responded. 

Multilayered Wood Flooring from the People’s Republic of 

China: Preliminary Determination of Sales at Less Than 

Fair Value, 76 Fed. Reg. 30,656, 30,657 (Dep’t of Commerce May 26, 2011). Commerce selected “the three 

largest exporters (by volume)” as mandatory respondents. 

Id. at 30,658. Although several firms offered to be individually investigated as voluntary respondents, id., the 

three mandatory respondents are the only firms that 

Commerce individually investigated in this investigation. 

See Changzhou Hawd Flooring Co. v. United States, 44 F. 

Supp. 3d 1376, 1389 n.31, 1390 (Ct. Int’l Trade 2015).

Commerce deems China to be a nonmarket economy, 

and it presumes that each Chinese exporter and producer

is state-controlled, and thus covered by a single Chinawide antidumping-duty rate, but a firm may rebut the 

presumption. See Changzhou Wujin Fine Chem. Factory 

Co. v. United States, 701 F.3d 1367, 1370 (Fed. Cir. 2012). 

Here, Commerce determined that 74 firms established 

their independence from the Chinese government. See 

Multilayered Wood Flooring from the People’s Republic of 

China: Final Determination of Sales at Less Than Fair 

Value, 76 Fed. Reg. 64,318, 64,321–22 (Dep’t of Commerce 

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CHANGZHOU HAWD FLOORING CO. v. US 5

Oct. 18, 2011). For those 74 firms—not individually 

investigated, but not covered by the China-wide rate—

Commerce had to calculate a “separate rate.”

Commerce published its Final Determination on October 18, 2011, finding that the subject merchandise was 

being sold at less than fair value (dumped) in the United 

States. Id. at 64,318. Commerce determined that one of 

the three mandatory respondents had a de minimis

dumping margin, but it assigned margins of 3.98% and 

2.63% to the other two mandatory respondents. See id. at 

64,323. After a voluntary remand from the Court of 

International Trade, Commerce revised the mandatory 

respondents’ dumping margins, finding all three to be

zero or de minimis. J.A. 101941. Commerce calculated 

the “separate rate,” not by simply using the zero/de minimis rates for the three mandatory respondents, but by 

averaging those three zero figures with the 25.62% rate it 

adopted as the China-wide rate—yielding a separate rate 

of 6.41%. J.A. 101942. 

On review, the Court of International Trade affirmed 

the dumping margins for the mandatory respondents but 

remanded for further explanation of how the separate 

rate related to economic reality. Baroque Timber Indus. 

(Zhongshan) Co. v. United States, 971 F. Supp. 2d 1333, 

1336 (Ct. Int’l Trade 2014). On remand, Commerce 

reasoned that the separate rate for the period of investigation should not be drawn entirely from the three mandatory respondents, all having a de minimis rate. 

Commerce gave two reasons. First, Commerce said, “if 

[any of] the 110 companies [that did not respond to the 

quantity-and-value questionnaires] had chosen to cooperate, the examined company’s rate would have been above 

de minimis . . . and would have been assigned to the 

separate rate plaintiffs as a separate rate in the Final 

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6 CHANGZHOU HAWD FLOORING CO. v. US

Determination.” J.A. 102099.1 Second, merely as confirmation, Commerce pointed to the recent results of its first 

administrative review under 19 U.S.C. § 1675, in which 

Commerce found dumping even for imports made after 

the announcement of the antidumping-duty order, notwithstanding that “the discipline of an antidumping order 

often results in lower or no margins . . . as companies may 

change their pricing practices to eliminate the price 

discrimination found in the period of investigation.” J.A. 

102100. That result, Commerce said, confirmed the 

likelihood that it would have found above-de minimis

dumping had it investigated more individual firms during 

the investigation. Id. On that basis, although Commerce 

did not reaffirm its 6.41% rate for the “separate rate” (not 

individually investigated) Chinese entities, it declared 

that they would be subject to a rate that it did not specify 

but declared to be more than de minimis.2

Appellants challenged that determination in the 

Court of International Trade. That court affirmed, con-

 

1

 Of the 110 entities that did not respond to the 

quantity-and-value questionnaires, Commerce removed 

one, located in Taiwan, from the investigation. J.A. 

101424.

2 Commerce also determined that it need not calculate a specific separate rate for all but one of the separaterate litigants (appellant Changzhou Hawd Flooring 

Company) because “the rate determined in the first 

administrative review supersedes the cash deposit rate 

established in the final determination of the investigation.” J.A. 102100. As to Changzhou Hawd Flooring, 

Commerce announced that it would conduct an individual 

investigation, J.A. 102102, but it decided to delay the 

actual investigation until after the Court of International 

Trade reviewed the remand determination. See Changzhou Hawd Flooring, 44 F. Supp. 3d at 1382 & n.13. 

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CHANGZHOU HAWD FLOORING CO. v. US 7

cluding that “Commerce’s determination regarding the 

group . . . is based on a reasonable reading of the law and 

record evidence.” Changzhou Hawd Flooring, 44 F. Supp. 

3d at 1380. The court held that Commerce’s methodology

was permissible because the statute allows “any reasonable method.” Id. at 1384. After one further remand, 

which brought Changzhou Hawd Flooring within the 

“separate rate” applicable to government-independent but 

not individually investigated firms, the Court of International Trade entered a final judgment. Changzhou Hawd 

Flooring Co. v. United States, 77 F. Supp. 3d 1351, 1359–

60 (Ct. Int’l Trade 2015).3 

Appellants, who are separate-rate entities, have timely appealed the above-de minimis separate rate, arguing 

for a de minimis separate rate. They assert that, although no rate was numerically specified, the assignment 

of an above-de minimis rate harms them because it subjects them to the antidumping-duty order and its continuing consequences, including subsequent periodic reviews 

under 19 U.S.C. § 1675, whereas assigning them a de 

minimis rate in this investigation would remove them 

from the order and relieve them from its consequences. 

See 19 C.F.R. § 351.204(e)(1) (excluding from final determination “any exporter or producer for which the Secre-

 

3 In Changzhou Hawd Flooring, 44 F. Supp. 3d at 

1390, the court held to be arbitrary and capricious Commerce’s decision to conduct a full individual investigation 

of Changzhou Hawd Flooring so late in the investigation. 

On remand, Commerce applied the same above-de minimis but unspecified separate rate to Changzhou Hawd 

Flooring that it applied to the other separate-rate firms. 

The Court of International Trade approved that decision. 

Changzhou Hawd Flooring, 77 F. Supp. 3d at 1359. 

Commerce does not challenge the rejection of its attempt 

to individually investigate Changzhou Hawd Flooring. 

Case: 15-1904 Document: 2-2 Page: 7 Filed: 02/15/2017
8 CHANGZHOU HAWD FLOORING CO. v. US

tary determines an individual weighted-average dumping 

margin . . . rate of zero or de minimis”); Dupont Teijin 

Films USA, LP v. United States, 407 F.3d 1211, 1216 

(Fed. Cir. 2005); Tung Mung Dev. Co. v. United States, 

354 F.3d 1371, 1375 n.3 (Fed. Cir. 2004); see also 19 

U.S.C. §§ 1673b(b)(3), 1673d(a)(4) (disregarding weighted 

dumping margin that is de minimis). Commerce does not 

disagree that appellants have a stake in challenging the 

above-de minimis rate. We have jurisdiction under 28 

U.S.C. § 1295(a)(5).

II

“Commerce’s determination will be sustained unless it 

is unsupported by substantial evidence on the record, or 

otherwise not in accordance with law.” Yangzhou Bestpak 

Gifts & Crafts Co. v. United States, 716 F.3d 1370, 1377 

(Fed. Cir. 2013); 19 U.S.C. § 1516a(b)(1)(B)(i). Appellants 

argue that Commerce erred by not relying on the three 

mandatory respondents’ zero/de minimis rates to generate 

a de minimis “separate rate.” We agree that Commerce 

has not justified its departure from that method.

In investigations involving exporters from market 

economies, 19 U.S.C. § 1673d(c)(5) establishes the method 

for determining the rate for entities that are not individually investigated, the so-called all-others rate. Commerce 

has relied on that statutory provision in determining the 

separate rate for exporters and producers from nonmarket 

economies that demonstrate their independence from the 

government but that are not individually investigated. 

See Albemarle, 821 F.3d at 1348. 

The statute says that where the “estimated weighted 

average dumping margins established for all exporters 

and producers individually investigated are zero or de 

minimis margins, or are determined entirely under [19 

U.S.C. § 1677e],” Commerce “may use any reasonable 

method to establish the estimated all-others rate for 

exporters and producers not individually investigated, 

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CHANGZHOU HAWD FLOORING CO. v. US 9

including averaging the estimated weighted average 

dumping margins determined for the exporters and 

producers individually investigated.” 19 U.S.C. 

§ 1673d(c)(5)(B). But the Statement of Administrative 

Action accompanying the Uruguay Round Agreements 

Act—which Congress has deemed “authoritative,” 19 

U.S.C. § 3512(d)—states that the “expected method” is to 

“weight-average the zero and de minimis margins and 

margins determined pursuant to the facts available, 

provided that volume data is available.” Uruguay Round 

Agreements Act, Statement of Administrative Action, 

H.R. Rep. No. 103-316, vol. 1, at 873 (1994), reprinted in

1994 U.S.C.C.A.N. 4040, 4201 (quoted in Albemarle, 821 

F.3d at 1352 & n.5).4 If Commerce reasonably concludes 

that “this method is not feasible” or would result “in an 

average that would not be reasonably reflective of poten-

 

4 The language of “margins determined pursuant to 

the facts available” refers to margins determined under 

19 U.S.C. § 1677e. The statutory context, 19 U.S.C. 

§ 1673d(c)(5)(B), makes clear that the language refers to 

margins so determined for firms that are individually 

investigated. Commerce has not suggested that, in the 

present case, there are any such § 1677e-based margins to 

be included in the average. Thus, only “zero and de 

minimis margins” are part of the average here.

In this respect, the case is unlike Yangzhou Bestpak 

Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. 

Cir. 2013), where Commerce calculated a “separate rate” 

by averaging the two individually investigated firms’ 

rates—one de minimis, the other a high § 1677e-based 

rate. This court held Commerce’s result to be unreasonably high on the record in the particular case. Id. at 1377–

81. Here, in contrast, there is no issue of an unreasonably 

high average of the individually investigated firms’ rates;

as in Albemarle, 821 F.3d at 1349, the average in this case 

is zero or de minimis. 

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10 CHANGZHOU HAWD FLOORING CO. v. US

tial dumping margins for non-investigated exporters or 

producers,” it “may use other reasonable methods.” Id.

Albemarle explains that Congress thus expressed a 

preference for the expected method, 821 F.3d at 1351–54, 

a preference reflecting how Commerce selects mandatory 

respondents, id. at 1353. Here, Commerce chose the 

exporters whose quantity-and-value questionnaires 

indicated that they were the largest exporters by volume, 

as expressly authorized by 19 U.S.C. § 1677f-1(c)(2)

(2010).5 Albemarle explains: “The very fact that the 

statute contemplates using data from the largest volume 

exporters suggests an assumption that those data can be 

viewed as representative of all exporters.” 821 F.3d at 

1353. “The statute assumes that, absent [evidence that 

the largest exporters are not representative], reviewing 

only a limited number of exporters will enable Commerce 

to reasonably approximate the margins of all known 

exporters.” Id. “[T]he representativeness of the investigated exporters is the essential characteristic that justifies an ‘all others’ rate based on a weighted average for 

such respondents.” Id. (quoting Nat’l Knitwear & Sportswear Ass’n v. United States, 779 F. Supp. 1364, 1373–74 

(Ct. Int’l Trade 1991)). And, recognizing that the presumption of representativeness may be overcome, Albemarle holds that, in order to depart from the expected 

method, “Commerce must find based on substantial 

evidence that there is a reasonable basis for concluding 

that the separate respondents’ dumping is different.” Id.

Pointing to Albermarle’s observation that the mandatory respondents in that case accounted for “a majority of 

the market,” id. at 1353, Commerce argues that Albemarle’s requirement of a showing of unrepresentativeness 

for departing from the expected method does not apply

 

5 The section was amended in 2012, but the relevant language is unchanged. 19 U.S.C. § 1677f-1(c)(2).

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CHANGZHOU HAWD FLOORING CO. v. US 11

where the mandatory respondents do not account for “a 

majority of the market.” Appellee’s Br. 22. But that 

argument takes too narrow a view of Albemarle. The 

court did not rely for its statutory analysis on the observation that the particular respondents accounted for a 

“majority of the market.” It relied on the statutory standards for selecting mandatory respondents under § 1677f1(c)(2), which, the court held, make the mandatory respondents representative unless evidence shows otherwise. Albemarle, 821 F.3d at 1353. The statutory 

standards—involving either a statistical sample, 19 

U.S.C. § 1677f-1(c)(2)(A), or the largest exporters by 

volume, id. § 1677f-1(c)(2)(B)—are not tied to a “majority” 

share of a “market,” of the imports at issue, or any other 

class or collection. 

Thus, the mandatory respondents in this matter are 

assumed to be representative. Under Albemarle, Commerce could not deviate from the expected method unless 

it found, based on substantial evidence, that the separaterate firms’ dumping is different from that of the mandatory respondents. But it has not done so.

Commerce did articulate a reason addressing firms 

that did not respond to the quantity-and-value questionnaires: it said that those firms likely “would have cooperated with the Department’s investigation if they could 

have obtained a low rate.” J.A. 102119. But that rationale does not suggest the needed inference about the 

separate-rate firms, all of which did respond to the questionnaires. Indeed, under Commerce’s reasoning, the 

separate-rate firms’ decisions to respond to the questionnaires might suggest that they are more similar to other 

firms, like the mandatory respondents, that responded. 

And Commerce may have suggested the same when, in its 

first “final determination,” it calculated the separate rate 

by averaging the rates of the two mandatory respondents 

that had margins above de minimis. Multilayered Wood 

Flooring from the People’s Republic of China: Final DeCase: 15-1904 Document: 2-2 Page: 11 Filed: 02/15/2017
12 CHANGZHOU HAWD FLOORING CO. v. US

termination of Sales at Less Than Fair Value, 76 Fed. 

Reg. at 64,322.

III

Because Commerce has not made the findings necessary to justify departing from the “expected method” here, 

we vacate the judgment of the Court of International 

Trade, and we remand with instructions to remand to 

Commerce for it to reconsider its separate-rate determination. We find it unnecessary to address appellants’ 

other challenges to the separate-rate determination. 

Costs awarded to appellants.

VACATED AND REMANDED

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