Slip Op. 12-
UNITED STAT ES COURT OF INTERNATIONAL TRADE

_________________________________________ : L I FESTYL E ENTERPRI SE, I NC., TRADE : MASTERS OF TEXAS, I NC., EMERAL D HOME : FURNI SHI

NGS, L L C, RON’S W AREHOUSE : FURNI TURE D/B/A V I

NEYARD F URNI TURE : I NTERNATI ONAL

L L C, : : Plaintiffs, : : and : : DREAM ROOMS FURNI TURE (SHANGH AI ) : CO., L TD., GUA

NGDON G YI HUA TIMBER : I NDUSTRY CO., L TD., : : Consolidated Plainti ffs, : : ORI ENT I

NTERNATI ONAL

HOL DI NG : SHANGHAI

FOREI GN TRADE CO., L TD., : : Interve nor Plaintiff, : : v. : Be fore : J ane A . Restani, J udg e : UNI TED STATES, UNI TED STATES : Consol. C ourt No. 09-00378 DEPARTMENT OF COMMERCE : : P ubl ic Ver sion Def endants, : : and : : AMERI CAN FU RNI TURE MANUF ACTURERS : COMMI TTEE F OR L EGAL TRADE, : VAUGH AN-B ASSETT FURNI TURE : COMPANY, I

NC. : : Interve nor De fenda

nts. :

_________________________________________ :Consol. C t. No. 09-00378 Pag e 2

OP INION AND ORDER [C ommerce ’s Remand Results rema nded in par

t and sustained in par

t.] Dated: Septembe r 7, 2012
J ill A. Cramer, Kristin H. Mowry , J eff rey S. Grimson, Sarah M. Wy ss, and Susan L . Br ooks, Mowry

& Grimson, PL L C, of Washington, DC, and John D. Gree nwald, Cassidy L evy Kent (U SA) L L P, of Washington, DC, for pla intiffs. 1

Wil liam E. Perry , Gar

vey Schubert B are r, of Washing ton, DC, for consolidated plaintiff, Dre am Rooms Furniture ( Shang hai) Co., Ltd.

J ohn D. Gre enwa ld, Cassidy L evy Kent (U SA) L L P, of Washington, DC, and Patrick J. M cL ain, Wilm er, Cutler, Picke ring , Hale & Dorr, L L P, of Washington, DC, for consolidated plaintiff, Guang dongYihua Timber I ndustry Co., L td.
Nanc y A. Noonan a

nd Matthew L . Kanna , Are nt Fox L L P, of Washington, DC, for inter venor pla intiff.
Stuart F. De lery , Assistant Attorney Gene ral, Jeanne E. D avidson, Direc tor, Patricia M. McCar

thy , Assistant Director , Stephen C. Tosini, S enior Tr ial Counsel, Carrie A

. Dunsmore, Tr ial Attorney , Commercial L itigation B ranc h, Civil Division, U.S. Department of J ustice, of Washing ton, DC, for def endants. Of

counsel on the br ief wa s Shana Hofste tter, Off ice of Chief Counsel for

Import Administration, U.S. Department of Commerc e, for the def endants.
J . Michae l Taylor, J oseph W. Dorn, Danie l L . Schneider man, and Pre ntiss L

. Smit h, King& Spalding , L L P, of Washington, DC, for inter venor de fenda

nts. Restani, J udg e: This matter c omes befor e the c ourt followingthe cour t’s decisions in L ifestyle Enterpr ise, Inc. v. United States, 768 F . Supp. 2d 1286 (CI T 2011) (“ L ifestyle I ”), in which the c ourt rema

nded Wooden B edroom F urniture f rom the People’s Republic of China: Final Results of Antidumping D uty Administrative Review a nd New Shipper

Reviews, 74 F ed. Reg . 41,374 (De p’t Commerce Aug . 17, 2009) (“ Final Results”) to the U .S. Depar tment of

Mowrey & Grimson, PL L C withdrew as c ounsel for Ron’s Ware house F urniture on 1 J anuar y 6, 2011. The c ourt g ave Ron’s Ware house F urniture thirty day s to retain counse l. I t has not done so as of the date of this opini on.Consol. Ct. No. 09-00378 Page 3

Commerce (“Commerce” or the “Department”) and Lifestyle Enterprise, Inc. v. United States, 844 F. Supp. 2d 1283 (CIT 2012) (“Lifestyle II”), in which the court remanded Final Results of Redetermination Pursuant to Remand (Dep’t Commerce Aug. 26, 2011) (Docket No. 132) (“First Remand Results”) to Commerce. For the reasons stated below, the court finds that Commerce complied with the court’s remand instructions with regard to the selection of the surrogate value for wood input, but Commerce has not complied with the court’s remand instructions regarding Orient’s AFA rate. Thus, Commerce’s Second Remand Results are sustained in part and remanded in part. See Final Results of Redetermination Pursuant to Second Remand (Dep’t Commerce June 11, 2012) (Docket No. 183) (“Second Remand Results”).
BACKGROUND The facts of this case have been well-documented in the court’s previous opinions. See Lifestyle I, 768 F. Supp. 2d at 1293 95; Lifestyle II, 844 F. Supp. 2d at 1286 87. The court presumes familiarity with these decisions but briefly summarizes the facts relevant to this opinion. The plaintiffs, Lifestyle Enterprise, Inc. (“Lifestyle”), Orient International Holding Shanghai Foreign Trade Co., Ltd. (“Orient”), Guangdong Yihua Timber Industry Co., Ltd. (“Yihua Timber”), Dream Rooms Furniture (Shanghai) Co., Ltd., Ron’s Warehouse Furniture, Emerald Home Furnishings, LLC, and Trade Masters of Texas, Inc., and intervnor defendants American Furniture Manufacturers Committee for Legal Trade and Vaughan-Bassett Furniture Company, Inc. (collectively “AFMC”) challenged the Final Results of an administrative review of the antidumping (“AD”) duty order on wooden bedroom furniture from the People’s RepublicConsol. Ct. No. 09-00378 Page 4

of China (“PRC” or “China”), which assigned Orient a weighted average dumping margin of 2 216.01% as part of the PRC-wide entity and Yihua Timber the dumping margin of 29.89%. See Final Results, 74 Fed. Reg. at 41,380; Wooden Bedroom Furniture from the People’s Republic of China: Amended Final Results of Antidumping Duty Administrative Review and New Shipper Reviews, 74 Fed. Reg. 55,810, 55,811 (Dep’t Commerce Oct. 29, 2009). Upon considering the parties’ motions for judgment on the agency record, the court held, inter alia, that substantial evidence did not support denial of a separate rate for Orient and that the rate of 216.01% assigned to Orient was not corroborated. Lifestyle I, 768 F. Supp. 2d at 1296 99. The court also held that substantial evidence did not support Commerce’s decision on the data set for wood inputs. Id. at 1301 02. The court remanded for reconsideration or further explanation. Id. at 1314 15. On remand, Commerce 1) found “that the information on the record corroborates the rate of 216.01 percent, as it relates to Orient,” based on total adverse facts available (“AFA”), and 2) “continue[d] to find that it is appropriate to value wood inputs using [World Trade Atlas (“WTA”)] import data.” First Remand Results 8, 31. Despite Commerce’s explanation, the court found that Commerce had not presented substantial evidence linking the source of the
A dumping margin is the difference between the normal value (“NV”) of merchandise 2 and the price for sale in the United States. See 19 U.S.C. § 1673e(a)(1); 19 U.S.C. § 1677(35). Unless nonmarket economy methodology is used, NV is either the price of the merchandise when sold for consumption in the exporting country or the price of the merchandise when sold for consumption in a similar country. 19 U.S.C. § 1677b(a)(1). An export price or constructed export price is the price that the merchandise is sold for in the United States. 19 U.S.C. § 1677a(a)-(b). Under its nonmarket economy AD methodology, Commerce calculates NV “on the basis of the value of the factors of production utilized in producing the merchandise and to which shall be added an amount for general expenses and profit plus the cost of containers, coverings, and other expenses.” 19 U.S.C. § 1677b(c)(1). Surrogate values from market economy countries are used as a measure of these costs. See id.; GPX Int’l Tire Corp. v. United States, 715 F. Supp. 2d 1337, 1347 (CIT 2010), aff’d, 666 F.3d 732 (Fed. Cir. 2011).Consol. Ct. No. 09-00378 Page 5

216.01% AFA rate to Orient and therefore “Commerce ha[d] failed to show some relationship between the AFA rate and the actual dumping margin.” Lifestyle II, 844 F. Supp. 2d at 1291 (internal quotation marks and citations omitted). The court also found that Commerce had “failed to support its rejection of a volume-based approach,” and instructed Commerce that “unless it chooses to reopen the record to gather more evidence, to use the volume data set for wood inputs.” Id. at 1297 98. 3

In the Second Remand Results, Commerce chose not to reopen the record and recalculated the valuation of wood inputs using NSO volume-based data. Second Remand Results 1, 7. Commerce also calculated a new AFA rate of 130.81% for Orient. Id. at 9. Plaintiff Lifestyle challenges Commerce’s determination regarding Orient’s AFA rate. Cmts. of Lifestyle Enterprise, Inc., Trade Masters of Texas, Inc. and Emerald Home Furnishings, LLC on Department of Commerce June 11, 2012 Final Results of Redetermination Pursuant to SecondRemand 12 (“Lifestyle Cmts.”). Yihua Timber challenges Commerce’s use of NSO volumebased data to value wood inputs. Yihua’s Cmts. on Commerce’s Final Results of 4 Redetermination Pursuant to Second Remand 1 (“Yihua Timber Cmts.”). The Government and AFMC ask the court to sustain the Second Remand Results. Def.’s Resp. to Pls.’ Remand Cmts. 1 (“Def.’s Resp.”); AFMC’s Cmts. Concerning Commerce’s Final Results of Redetermination

Commerce also “decided not to rely on the financial statements of Diretso Design[.]” 3 First Remand Results 18. The court sustained Commerce’s determination on that issue. Lifestyle II, 844 F. Supp. 2d at 1298. Lifestyle adopts Yihua Timber’s arguments. Lifestyle Cmts. 17. 4Consol. Ct. No. 09-00378 Page 6

Pursuant to Second Remand 1 (“AFMC Cmts.”). 5

JURISDICTION AND STANDARD OF REVIEW The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will not uphold Commerce’s final determination in an AD review if it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law . . . .” 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
I. Orient’s AFA Rate

Lifestyle argues that Orient’s AFA rate was not reasonably reflective of Orient’s commercial reality, punitive, and “aberrantly high and egregiously out of line with the rate calculated for Yihua [Timber], a comparable company.” Lifestyle Cmts. 8 9, 11. Specifically, Lifestyle contends that Commerce used an insufficient percentage of Yihua Timber’s sales, yielding an excessively high AFA rate. Id. at 9 10. This claim has merit. 6

Yihua Timber also filed a motion for leave to file an additional motion for judgment on 5 the agency record. Yihua’s Motion for Leave to File an Additional Motion for J. on the Agency R. Under Rule 56.2, Consol. Ct. No. 09-00378, Docket No. 186, at 1 (“Yihua Timber’s Mot. for Leave to File”); Consolidated Pl. Guangdong Yihua Timber Indus. Co., Ltd.’s Mem. in Support of Additional Mot. for J. on the Agency R. Under Rule 56.2 at 1. The court denied the motion and instructed the parties to “follow the comment procedures as previously ordered by the court.” Order, Consol. Ct. No. 09-00378, Docket No. 187, at 1. Lifestyle offers its own methodology, which reflects Commerce’s methodology in all 6 respects except it uses 30% of Yihua Timber sales, as opposed to [[ ]] used by Commerce. Lifestyle Cmts. 13. Lifestyle’s proposed methodology yields a rate of 62.94%. Id. The court need not consider plaintiffs’ methodological proposals as the statute tasks Commerce with such efforts. Confidential Information DeletedConsol. Ct. No. 09-00378 Page 7
If an interested party has failed to cooperate in not providing valid data upon which Commerce can calculate an AD rate, Commerce may calculate a rate using inferences which are “adverse to the interests of that party in selecting from among the facts otherwise available.” 19 U.S.C. § 1677e(b). In doing so, Commerce may rely on information derived from the petition, a final determination in the investigation, any previous review, or any other information placed on the record. Id. “An AFA rate must be ‘a reasonably accurate estimate ofthe respondent’s actual rate, albeit with some built-in increase intended as a deterrent to noncompliance.’” Gallant Ocean (Thai.) Co. v. United States, 602 F.3d 1319, 1323 (Fed. Cir. 2010) (quoting F.lli de Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000)). “Commerce may not select unreasonably high rates having no relationship to the respondent’s actual dumping margin.” Id. Although the exact limits of the corroboration requirement are not clear here, corroboration pursuant to 19 U.S.C. § 1677e(c) is not sought because Commerce selected a margin based on information from the current POR. The AFA rate selected by Commerce nevertheless must be supported by substantial evidence. Selection of an AFA rate based on minuscule data will not suffice. An AFA rate must not be aberrant or punitive, and should bear a rational relationship to respondent’s commercial reality. See KYD, 7 Inc. v. United States, 607 F.3d 760, 767 68 (Fed. Cir. 2010) (Commerce’s determination is not punitive where it is in accordance with statutory requirements); Essar Steel Ltd. v. United States, 678 F.3d 1268, 1276 (Fed. Cir. 2012) (“The imposition of adverse facts can be inappropriate if it
Rare, if not impossible, are the facts such that a rate would reflect a respondent’s 7 commercial reality but be punitive or aberrant, or vice versa. Commerce’s compliance with the statute, by supporting its determination with substantial evidence, often fulfills all of the various formulations of the hurdles established heretofore by case law.Consol. C t. No. 09-00378 Pag e 8

is overly punitive.”). 8
In the dra ft Second Remand Re sults, C ommerce calc ulated a ne w AF A ra te for Orient ba sed on Yihua Timber ’s re vised dumping ma rg in of 40.74% and “ added a n additional
amount to ensure c ompliance by only selec ting Yihua

Timber’s sa les transa ctions that produce d positive marg ins,” there by assigning O rient an A FA r ate of 46.53%. Second Rema

nd Results 1, 8. After the dra ft results, Commerce “dete rmined that the 46.53 pe rce nt rate [was] not sufficie ntly

adver se to provide r espondents with an ince ntive to cooper ate.” I d. at 8 (interna l quotation marks and f

ootnote omitted). Commerce is likely not incorre ct in this reg ard. The
next s tep is more proble matic. In the final Sec ond Remand Results, Comm erc e examined an invoice fr om Orient’s sec tion A questionnaire r esponse, whic h Orient ha d not withdrawn. I d. Commerce the n selec ted CONNUM- specific marg ins for Yihua Timber ’s sales of the same product ty

pes sold by

Orient a s ref

lected in the invoice , selec ted the highest specif ic marg in for

eac h of Yihua Timber ’s produc ts (excluding marg ins over 216%) , and then avera g ed those
marg ins toge ther for

an AF A rate of 130.81%. I d. 9

AFArate case s are fac t-specif ic and attempts to reduce pr ece dent to a ca lculated r ate or 8 perc entag e of sa les are likely oversimplifications. See Qing dao Ta ifa Gr p., Co. v. United States, 780 F. Supp. 2d 1342, 1350 n.8 (CI T 2011) (“ Taifa IV”)

. Commerce use d the followingmarg ins (with quantity and produc t): [[ 9 ]] Analy sis Memorandum f

or the F inal Redeter

mination Pursuant to R emand: Or ient Int’l (J une 11, 2012), App. to AFMC’s Cmts. ConcerningCommerce’ s Final Results of Redete rmination Pursuant to Second Remand ( “AF MC App.”), Ta b 5, Attach. I I , at 6. The AF A rate is based on [[ ] ] of Yihua Timber’s sa les by value a nd [[ ]] of (continued...) Confidential

Information DeletedConsol. C t. No. 09-00378 Pag e 9

Her e, Commerce has base d Orient’s A FA r ate on a n impermissibly

small
perc entag e of the sales of a differ ent but cooper atingresponde nt. In L ifestyle I I , the cour t cautioned that “[s] pecif

ic transa ctions are g ener ally uninformative.” 844 F. Supp. 2d at 1291 n.9;
see K YD, 607 F .3d at 767 (statingthat Commerce ha d validated a n AFArate in the prior re view throug h “hig h-volume transa ction-spec ific marg ins for coope rative c ompanies”) . Cases such a s Ta Chen a

nd PAM lie at the outer r eac h of an a cce ptable per centa g e of sa les upon which to base
an AF A rate and ha

ve additional fa cts that make the small perce ntag es less troublingthere . See Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F .3d 1330, 1339 (F ed. Cir. 2002) (findingthat 0.04% of r espondent’s sa les ref lected a partial AF A rate of 30.95% where actua l sales data was “ ref lective of some, albeit a small portion, of [responde nt’s] actual sales” ); PAM, S.p.A. v. United States, 582 F.3d 1336, 1340 (F ed. Cir. 2009) (f inding that 0.5% of noncooper atingresponde nt’s sales supported a n AFArate of 45.49%) . Some of the produc t-specif ic
marg ins Comm erc e re lied upon here wer e base d on a sing le transa ction wher e the pe rce ntag e of product-spe cific sa les was e ven smaller tha n the per centa g es ac cepte d in Ta Chen and PAM.
Gene rally , a lar g er pe rce ntag e of a party ’s sales data is neede d to support a ver y high ma rg in.
See Ta ifa IV, 780 F. Supp. 2d at 1350 ( findingCommerce pr ovided substantial evidenc e for an
(...continued) 9 Yihua Timber’ s sales by

quantity . L ifestyle Cmts. Ex . 1, at 3. Products yielded diffe rent proportions. For

example, [ [
]] sales by quantity . See Ana ly sis Memorandum f

or the F inal Redeter

mination Pursuant to R emand: Or ient Int’l (J une 11, 2012), AFMC App., Ta

b 5, Attach. I I . at 6. Confidential Information DeletedConsol. Ct. No. 09-00378 Page 10

AFA rate of 145.90% where Commerce relied on 36% of the non-cooperating respondent’s verified sales data from the last year in which it cooperated); Mid Continent Nail Corp. v. United States, 712 F. Supp. 2d 1370, 1378 (CIT 2010) (providing that, in the context of targeted dumping, 33% is considered reasonable for establishing a pattern of activity); iScholar, Inc. v. United States, Slip Op. 11-4, 2011 WL 109014, at *2 3 (CIT Jan. 13, 2011) (sustaining a rate of 72.03% based on a single transaction of around 50 units by a cooperating respondent because the transaction was “within the mainstream”). The transactions selected by Commerce, the very highest CONNUM-specific margins under 216.01%, were clearly outside the mainstream. 10

Lifestyle also alleges that Commerce engaged in a “closed-door session with counsel to the AFMC,” “gave no warning to the parties” prior to the final results, “did an about face,” and “did not provide parties with an opportunity to file” comments after the final Second Remand Results. Lifestyle Cmts. 5 6. Although Lifestyle does not make any legal claims based on these actions, Commerce’s methodology was new to the plaintiffs. In the draft Second Remand Results, Commerce discussed only an AFA rate of 46.53%, comprised of Yihua

AFMC cites KYD, Inc. v. United States, which sustained Commerce’s methodology of 10 using the highest product-specific margins of a cooperating respondent as the basis for an AFA rate of a non-cooperating respondent. 807 F. Supp. 2d 1372, 1378 (CIT 2012). The principalissue in KYD was whether Commerce was required to use a modified version of the noncooperating respondent’s data. Id. at 1376 77. The court found that Commerce was not. Id. at 1378. Instead, the court held that “because [the non-cooperating respondents] did not provide sufficient usable information for the record, Commerce’s transaction-specific margin for an adverse rate does not conflict with statutory requirements, and Commerce’s selection is based on substantial evidence, the Second Remand Results will be sustained.” Id. at 1378 (finding an AFA rate of 94.62% supported by substantial evidence). The final AFA rate in KYD was substantially lower than the rate in the instant case. Additionally, the court did not find that the product-specific margins used by Commerce were outside the mainstream of the cooperating respondent’s normal transactions, as they are in the instant case.Consol. Ct. No. 09-00378 Page 11

Timber’s calculated rate of 40.74% plus an additional amount to encourage compliance. Draft Results of Redetermination Pursuant to Second Remand, Conf. App. to Cmts. of Lifestyle Enter., Inc., Trade Masters of Texas, Inc. and Emerald Home Furnishings, LLC on Dep’t of Commerce June 11, 2012 Final Results of Redetermination Pursuant to Second Remand (“Lifestyle App.”), Tab 1, at 10. In the final Second Remand Results, Commerce considered AFA rates of 216.01%, 130.81%, 100%, and 69%. Commerce would be well-served by giving parties an equal 11 opportunity to respond to as well as providing adequate time to comment on significant changes in methodology.

Lastly, Commerce has ignored the court’s remand instructions in Lifestyle I and Lifestyle II. Commerce failed to comply with the court’s remand order because Commerce did not follow the court’s direction that Commerce “should start with the highest rate calculated for a comparable respondent or respondents and then add an additional amount to ensure compliance.” Lifestyle II, 844 F. Supp. 2d at 1291 n.13. Additionally, Commerce still has not explained why Orient’s rate increased so dramatically from its prior margin. See Lifestyle I, 768 F. Supp. 2d at 1299; Lifestyle II, 844 F. Supp. 2d at 1290. “When rates are in multiples of 100%, one might assume that a bit more corroboration or record support is warranted.” Qingdao Taifa Grp., Co. v. United States, 760 F. Supp. 2d 1379, 1386 n.7 (CIT 2010) (“Taifa III”). Commerce explained that “some relationship between the AFA rate and the actual dumping margin,” Lifestyle II, 844 F. Supp. 2d at 1291, was shown because “it is: a) contemporaneous (i.e., from the instant

The methodology and the resulting rate of 130.81% were proposed by AFMC. 11 Excerpts from Petitioners’ Cmts. on the Draft Results of Remand (May 31, 2012), AFMC App., Tab 4, at 8.Consol. C t. No. 09-00378 Pag e 12

revie w), b) f

rom a ‘c ompara

ble’ re spondent based on the information on the re cord, a nd c) ba sed on sales of the same ty

pes of mer chandise sold by Orient duringthe same pe riod.” Sec ond Remand Results at 16. I f this was all the c ourt requir ed, then the pe rce ntag e of sa les and those sales’ r elationship to commercia l rea lity for this responde nt would be wholly irrele vant. B ut this is not the case a

nd Commerce must show more . The use of contempora

neous data , particula

rly wher e data

are cher ry -picke d and manipulated, doe s not obviate the nec essity of Commerce to provide substantial evide nce of a rational relationship betwee n the AF A rate chose n and the

commerc ial rea lity

of the non-c ooperating r espondent. On the fac ts of this case, a distorted rate based on a

very small perce ntag e of a

compar able c ompany ’s like-produc t sales does not mee t this threshold.
Be cause Commerce’ s task is to identify the amount nec essar

yto deter noncompliance , Commerce must look at the re lationship between the AFArate g rante d in the curr ent administrative re view and the rate of past and pr esent c ooperating r espondents of c ompara ble siz e. Ga llant, 602 F.3d at 1324. Abse nt rec ord evide nce to the c ontrary , the diffe renc e betwe en these rates and the A FA r ate is the de terre nt. Where the AF A rate is multi ples of the ba seline, this indi cate s that the rate may not be supported by

substantial evidence . See De Cecc o, 216 F.3d
at 1032. An AF A rate over 100% may

be some e vidence that the ra te is punitive. Taifa I I I , 760 F. Supp. 2d at 1386 n.7. Unlike c ases in which the rate and amount of de terre nt were fac ially within the bounds of commerc ial rea lity , see, e .g ., Ta Chen, 298 F .3d at 1339; PAM, 582 F.3d at 1340, here , Commerce must provide substantial e vidence for suc h a high AFArate by using, in

some manner , data in the mainstre am of norma l transac tions of cooper atingresponde nts orConsol. Ct. No. 09-00378 Page 13

otherwise relying upon data reflecting commercial reality.

“Commerce need not select, as the AFA rate, a rate that represents the typical dumping margin for the industry in question.” KYD, 607 F.3d at 765 66. But Commerce must select an AFA rate that has not been artificially constructed for the sole purpose of punishing a non-compliant respondent. By selecting a very small number of the highest product-specific margins from a different respondent, Commerce appears to have done just that. Thus Commerce’s determination that Orient should receive an AFA rate of 130.81% is not supported by substantial evidence. II. Wood Input Valuation

Yihua Timber argues that Commerce erred when it did not consider two alternatives to NSO volume-based data to value certain wood inputs. Yihua Timber Cmts. 2. Noother party challenges Commerce’s decision to use NSO volume-based data over WTA weightbased data in the Second Remand Results, and Yihua Timber’s challenge is too late. Therefore, the court sustains Commerce’s determination on this issue.

A party has waived an argument where it does not present the argument “until after it ha[s] filed its principal summary judgment brief . . . [because] parties must give a trial court a fair opportunity to rule on an issue . . . .” Novosteel SA v. United States, 284 F.3d 1261, 1274 (Fed. Cir. 2002); KYD, Inc. v. United States, 836 F. Supp. 2d 1410, 1414 n.2 (CIT 2012). “[A]ll claims, arguments, and objections that [a plaintiff has] elected not to address in its post-remand briefs must be deemed waived.” Bond Street, Ltd. v. United States, 774 F. Supp. 2d 1251, 1261 n.4 (CIT 2011).Consol. Ct. No. 09-00378 Page 14
In 2009, prior to the Final Results, Yihua Timber argued that Commerce should not rely on NSO volume-based data to calculate the surrogate values for various wood inputs, as Commerce had done in the Preliminary Results. Issues and Decision Memorandum for the Antidumping Duty Administrative and New Shipper Reviews of Wooden Bedroom Furniture from the People's Republic of China, A 570 890, POR 1/1/07-12/31/07, at 7 (Aug. 10, 2009) (“Issues and Decision Memorandum”), available at http://ia.ita.doc.gov/frn/summary/prc/E9- 19666-1.pdf (last visited Aug. 27, 2012). Yihua Timber also argued that Commerce should not use Philippine Harmonized Tariff Schedule (“HTS”) codes to value lumber and plywood. Id. Instead, Yihua Timber proposed that Commerce use domestic market data from the Philippines Forest and Management Bureau, export data from the United States to the Philippines, or export data from the United States to the PRC. Id. Yihua Timber had placed WTA weight-based data on the record in 2008 and also proposed using NSO weight-based data which it considered “substantially the same as the Philippine import data published in the World Trade Atlas . . . .” Case Br. of Guangdong Yihua Timber Indus. Co., Ltd. (May 28, 2009), P.R. 557, at 12; Yihua Timber’s Submission of Surrogate Factor Values (Nov. 4, 2008), P.R. 403, Ex. 1, at 1. Commerce rejected NSO volume-based data and also declined to use any of Yihua Timber’s proposed alternatives. Issues and Decision Memorandum 8 9. Instead, Commerce relied on WTA weight-based data. Id. at 6 7. In its complaint before this court, Yihua Timber contested Commerce’s use of WTA weight-based data as a surrogate value for poplar, ash, and plywood on the basis that reliable domestic market price data existed. Complaint, Consol. Ct. No. 09-00398, Docket No. 15 at 12. Yihua Timber neither moved for summary judgment on this issue norConsol. Ct. No. 09-00378 Page 15

argued against AFMC’s claims regarding NSO volume-based data. Consol Court. No. 09-00398, Docket No. 62; Consol Court No. 09-00398, Docket No. 94. Fellow plaintiff Lifestyle argued that Commerce’s adoption of WTA weight-based data was supported by substantial evidence. Consol. Ct. No. 09-00398, Docket No. 83, at 25 26. The court questioned Commerce’s use of WTA weight-based data in Lifestyle I before rejecting it in Lifestyle II. Lifestyle I, 768 F. Supp. 2d at 1301 02; Lifestyle II, 844 F. Supp. 2d at 1292 97. When the court reviewed Commerce’s First Remand Results, Yihua Timber filed a one-page brief asking the court to sustain Commerce’s determination and declined to participate in oral argument. After significant questioning during two lengthy oral arguments, the court found that “[t]he parties agree that these are the two potentially applicable data sets.” Lifestyle II, 844 F. Supp. 2d at 1293 n.16. At the very least Yihua Timber could have advised the court that it was maintaining an alternate argument regarding data sets.

Yihua Timber now argues that Commerce should adopt Philippine volume-based domestic market data based on species indigenous to the Philippines or export prices from the United States to the Philippines. Yihua Timber Cmts. 2. Specifically, Yihua Timber argues that NSO volume-based data are inferior to domestic data and export data because NSO data relies on HTS basket categories and reflects the use of a standard conversion ratio. Id. at 2 3. Yihua Timber argues that domestic data are superior in particular because Commerce has a preference for domestic over import data. Id. at 2. First, the domestic data for which Yihua Timber nowConsol. Ct. No. 09-00378 Page 16

argues were likely more favorable to the plaintiffs than WTA weight-based data. Thus, Yihua 12 Timber did not receive a completely favorable result and its claim was ripe after the Final Results. Second, whether Commerce should rely on HTS import data or domestic data is an entirely separate issue from the issue of whether Commerce should rely on weight-based or volume-based data. Yihua Timber did have an opportunity to raise this claim on a motion for summary judgment and chose not to do so there or before the court at any time before Commerce chose between the two data set options available to it. By not preserving its claim for orderly consideration by the court, Yihua Timber has waived it. Third, the court rejects Yihua Timber’s arguments regarding standard conversion ratio for the same reasons the court did so in its prior opinion. See Lifestyle II, 844 F. Supp. 2d at 1296 97. Yihua Timber was aware of challenges to the valuation of wood inputs in 2009. After hours of oral argument and hundreds of pages of briefs, Yihua Timber cannot appear at the eleventh hour with a claim it set aside more than two years ago that was clearly related to an open issue.

Additionally, Commerce has addressed the merits of Yihua Timber’s arguments regarding domestic data and export data. See Issues and Decision Memorandum 7 9; Second Remand Results 10 13. Commerce found that the domestic data were comprised entirely of tropical lumber not used by Yihua Timber. Issues and Decision Memorandum 12. Despite

The vast majority of domestic volume data for lumber were [[ ]] than import 12 values reported by the NSO or the WTA, regardless of whether the values were derived from weight-based or volume-based data. See Yihua’s Revised Case Br. to Commerce (June 1, 2009), C.R. 190, at 9, 16 17; Analysis Memorandum for the Final Results (Aug. 26, 2011), C.R. 13, at Attach. III. Confidential Information DeletedConsol. Ct. No. 09-00378 Page 17

Yihua Timber’s efforts to create a parallel between tropical hardwood lumber (species of Gmelina, Bagras, Binuang, Philippine Mahogany, Lauan, Narra, Apitong, Tanguile, Kalantas, and Yakal) and the relevant wood inputs, the tropical woods are simply not the same as poplar and ash. Even if the court accepts the principle that Commerce can rely on species of wood indigenous to a surrogate country as surrogate values for species of wood indigenous to China, Yihua Timber must put forth more than an article from 1907. Much has changed, even the literature of botany, over the past 100 years. Commerce also found that using U.S. export data would impermissibly treat the United States as a surrogate country for the PRC. Issues and Decision Memorandum 7 9. Assuming arguendo Yihua Timber’s claim is not waived, Commerce’s determination is supported by substantial evidence.

For reasons stated in its prior opinion, Lifestyle II, 844 F. Supp. 2d at 1292 97, the court sustains Commerce’s decision to value wood inputs using NSO volume-based data. 13

The court recognizes that Commerce used NSO volume-based data under protest. 13 Second Remand Results 1.Consol. C t. No. 09-00378 Pag e 18

CONCLUSION
For the fore g oing r easons, Commerc e’s de termination to value c erta in wood inputs using NSO volume-ba sed data is sustained. Commerce’ s decision to g rant a n AFArate of 130.81% to Orient is re manded.

Commerce sha ll file its remand dete rmination with the court within 60 day s of this date. The pa

rties have 30 day s therea fter to f ile objections, and the G overnme nt will have 15 day s therea fter to f

ile its response.

/s/ J ane A . Restani J ane A . Restani J udg e Dated: This 7th day

of September , 2012. New Y ork, Ne w York.