BAROQUE TIMBER INDUSTRIES 

(ZHONGSHAN) COMPANY, LIMITED, et

al.,

 Plaintiffs, 

 v. 

UNITED STATES, 

 Defendant, 

 and 

COALITION FOR AMERICAN HARDWOOD 

PARITY, et al.,

 Defendant-Intervenors. 

Slip Op. 13 - 96 

UNITED STATES COURT OF INTERNATIONAL TRADE 

OPINION

[final determination of sales at less than fair value affirmed 

in part and remanded in part] 

Dated: July 31, 2013 

Francis J. Sailer, Mark E. Pardo, Andrew T. Schutz, 

and John M. Foote, Grunfeld, Desiderio, Lebowitz, Silverman & 

Klestadt LLP, of Washington, DC, for Baroque Timber Industries 

 1

 This action was consolidated with court nos. 11-00452, 12-

00013, and 12-00020. Order, May 31, 2012, ECF No. 37. The 

complaint filed by the Coalition for American Hardwood Parity in 

court no. 11-00452 was heard and decided separately in Baroque 

Timber Industries (Zhongshan) Co. v. United States, __ CIT __, 

853 F. Supp. 2d 1290 (2012), and Baroque Timber Industries 

(Zhongshan) Co. v. United States, __ CIT __, 865 F. Supp. 2d 

1300 (2012). The Coalition’s complaint was ultimately 

dismissed. Baroque Timber Indus., 865 F. Supp. 2d at 1311. 

Before: Donald C. Pogue, 

 Chief Judge 

Consol. Court No. 12-000071
Consol. Court No. 12-00007 Page 2 

(Zhongshan) Co., Ltd.; Riverside Plywood Corp.; Samling Elegant 

Living Trading (Labuan) Ltd.; Samling Global USA, Inc.; Samling 

Riverside Co., Ltd.; and Suzhou Times Flooring Co., Ltd. 

Gregory S. Menegaz, James K. Horgan, and John J. 

Kenkel, deKieffer & Horgan, PLLC, Washington, DC, for Zhejiang 

Layo Wood Industry Co., Ltd.; 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.; and Karly 

Wood Product Ltd. 

Kristin H. Mowry, Jeffrey S. Grimson, Jill A. Cramer, 

Susan L. Brooks, Sarah M. Wyss, and Rebecca M. Janz, Mowry & 

Grimson, PLLC, of Washington, DC, for Fine Furniture (Shanghai) 

Ltd.; Great Wood (Tonghua) Ltd.; and Fine Furniture Plantation 

(Shishou) Ltd. 

Kristen S. Smith and Mark R. Ludwikowski, Sandler, 

Travis & Rosenberg, PA, of Washington, DC, for Lumber 

Liquidators Services, LLC; Armstrong Wood Products (Kunshan) 

Co., Ltd.; and Home Legend, LLC. 

Jeffrey S. Neeley, Michael S. Holton, and Stephen W. 

Brophy, Barnes, Richardson & Colburn, Washington, DC, for 

Zhejiang Yuhua Timber Co., Ltd. 

Alexander V. Sverdlov, Trial Attorney, Commercial 

Litigation Branch, Civil Division, United States Department of 

Justice, of Washington, DC, for the United States. With him on 

the brief were Stuart F. Delery, Principal Deputy Assistant 

Attorney General, Jeanne E. Davidson, Director, and Claudia 

Burke, Assistant Director. Of counsel on the brief was Shana 

Hofstetter, Attorney, International Office of the Chief Counsel 

for Import Administration, U.S. Department of Commerce, of 

Washington, DC.

Jeffrey S. Levin, Levin Trade Law, P.C., of Bethesda, 

MD, for the Coalition for American Hardwood Parity. 

Pogue, Chief Judge: This is a consolidated action 

seeking review of determinations made by the Department of 

Commerce (“Commerce”) in the antidumping duty investigation of 

multilayered wood flooring from the People’s Republic of China 
Consol. Court No. 12-00007 Page 3 

(“China”).2 Currently before the court is Respondents’ Motion 

for Judgment on the Agency Record. Respondents3

 challenge nine 

aspects of Commerce’s Final Determination including: (1) 

Commerce’s decision to apply its targeted dumping method on the 

basis of non-dumped sales; (2) Commerce’s withdrawal of the 

targeted dumping regulations; (3) Commerce’s use of zeroing in 

an investigation; (4) the surrogate value of Layo’s core veneer 

used for plywood production; (5) the surrogate value of Layo’s 

high density fiberboard (“HDF”) input; (6) the surrogate value 

of Samling’s HDF input; (7) the surrogate value of Layo’s 

plywood inputs; (8) the surrogate value of brokerage and 

handling fees; and (9) Commerce’s rejection of certain surrogate 

financial statements. 

 2

 Multilayered Wood Flooring from the People’s Republic of 

China, 76 Fed. Reg. 64,318 (Dep’t Commerce Oct. 18, 2011) (final 

determination of sales at less than fair value) (“Final 

Determination”) and accompanying Issues & Decision Memorandum, 

A-570-970, POI Apr. 1, 2010 – Sept. 30, 2010 (Oct. 11, 2011) 

(“I & D Mem.”). 

3

 The Respondents who are party to this case include Baroque 

Timber Industries (Zhongshan) Co., Ltd., Riverside Plywood 

Corp., Samling Elegant Living Trading (Labuan) Ltd., Samling 

Global USA, Inc., Samling Riverside Co., Ltd., Suzhou Times 

Flooring Co., Ltd., Zhejiang Layo Wood Industry Co., Ltd., 

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 Ltd., and Fine 

Furniture (Shanghai) Ltd. Resp’ts’ Mem. L Supp. Mot. J. Agency 

R., ECF No. 63 (“Resp’ts’ Br.”) at 1 n.1.
Consol. Court No. 12-00007 Page 4 

In response, Commerce requests voluntary remand to 

reconsider the valuation of Layo’s plywood input and Samling’s 

HDF input. Commerce also requests voluntary remand to 

reconsider the application of its method for analyzing targeted 

dumping in light of any changes in value that may result from 

reconsideration of the two surrogate values for which remand is 

requested and in light of its current standards for applying its 

targeted dumping method. Commerce contests the remaining 

challenges to the Final Determination. 

The court has jurisdiction pursuant to 

§ 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 

19 U.S.C. § 1516a(a)(2)(B)(i) (2006)4

 and 28 U.S.C. § 1581(c) 

(2006).

As explained below, the Final Determination is 

affirmed in part and remanded in part: (1) Commerce’s request 

for remand to reconsider the surrogate value determinations for 

Layo’s plywood input and Samling’s HDF input is granted; (2) 

Commerce’s targeted dumping determination is remanded for 

reconsideration in light of any changes to the surrogate value 

determinations and in light of Commerce’s current standards; 

 4

 All further citations to the Tariff Act of 1930, as 

amended, are to Title 19 of the U.S. Code, 2006 edition, unless 

otherwise noted. 
Consol. Court No. 12-00007 Page 5 

(3) the surrogate value determinations for Layo’s core veneer, 

Layo’s HDF input, and the brokerage and handling fees are 

remanded for further explanation or reconsideration consistent 

with this opinion; and (4) Commerce’s rejection of Respondents’ 

late filed surrogate financial statements is affirmed.

BACKGROUND5

Responding to a petition by the Coalition for American 

Hardwood Parity (“CAHP” or “Petitioners”), Commerce initiated an 

antidumping duty investigation of multilayered wood flooring 

from China on November 18, 2010. Multilayered Wood Flooring from 

the People’s Republic of China, 75 Fed. Reg. 70,714 (Dep’t 

Commerce Nov. 18, 2010) (initiation of antidumping duty 

investigation). As permitted by the statute, Commerce chose 

three mandatory respondents for the investigation: Zhejiang 

Yuhua Timber Co., Ltd. (“Yuhua”), Zhejiang Layo Wood Industry 

Co., Ltd. (“Layo”), and the Samling Group6

 (“Samling”). 

Multilayered Wood Flooring from the People’s Republic of China, 

 5

 This is background relevant to all the issues presented; 

facts relevant only to particular issues are found in the 

discussion section.

6

 The Samling Group includes Baroque Timber Industries 

(Zhongshan) Co., Ltd., Riverside Plywood Corp., Samling Elegant 

Living Trading (Labuan) Ltd., Samling Global USA, Inc., Samling 

Riverside Co., Ltd., and Suzhou Times Flooring Co., Ltd. 

Resp’ts’ Br. at 1 n.1. 
Consol. Court No. 12-00007 Page 6 

76 Fed. Reg. 30,656, 30,658 (Dep’t Commerce May 26, 2011) 

(preliminary determination of sales at less than fair value) 

(“Preliminary Determination”); see also 19 U.S.C. 

§ 1677f-1(c)(2)(B). Commerce published its Final Determination 

on October 18, 2011, finding that the subject merchandise was 

being sold at less than fair value in the United States, i.e., 

dumped. Final Determination, 76 Fed. Reg. at 64,323–24.

Commerce determined that a de minimis dumping margin existed for 

Yuhua, but assigned margins of 3.98% and 2.63% to Layo and 

Samling respectively. Id.

STANDARD OF REVIEW 

When reviewing Commerce’s decisions made in 

antidumping investigations, the court “shall hold unlawful any 

determination, finding, or conclusion found . . . to be 

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. Voluntary Remand 

Commerce requests voluntary remand to reconsider two 

determinations that it may have made in error: (1) the surrogate 
Consol. Court No. 12-00007 Page 7 

value7 of Layo’s plywood input and (2) the surrogate value of 

Samling’s HDF input. Def.’s Resp. to Pls.’ Consol. Mot. J. 

Admin. R., ECF No. 76 (“Def.’s Resp. Br.”) at 28–29. Commerce 

also requests remand to reconsider the application of its method 

for analyzing targeted dumping in light of any changes to these 

two surrogate values and in light of its current standards. 

Def.’s Resp. Br. at 29; Def.’s Supplemental Br., ECF No. 116, at 

16–18.

While a reviewing court will refuse a request for 

voluntary remand that is frivolous or in bad faith, “if the 

agency’s concern is substantial and legitimate, a remand is 

 7

 Commerce has designated China a non-market economy 

country (“NME”). NME data for measuring normal value is 

presumed to be unreliable due to the absence of market forces in 

the country; therefore, Commerce calculates normal value for 

merchandise from an NME using surrogate values for factors of 

production drawn from a market economy country. 19 U.S.C. 

§ 1677b(c)(1); see also Shanghai Foreign Trade Enters. Co. v. 

United States, 28 CIT 480, 481, 318 F. Supp. 2d 1339, 1341 

(2004). Surrogate values must be based on the best available 

information, § 1677b(c)(1), drawn from “one or more market 

economy countries that are (A) at a level of economic 

development comparable to that of the nonmarket economy country, 

and (B) significant producers of comparable merchandise,” 

§ 1677b(c)(4). The statute does not define best available 

information, but it is Commerce’s policy to “choose a surrogate 

value that represents country-wide price averages specific to 

the input, which are contemporaneous with the [POI], net of 

taxes and import duties, and based on publicly available, nonaberrational, data from a single surrogate [market economy] 

country.” I & D Mem., cmt. 13 at 59. 
Consol. Court No. 12-00007 Page 8 

usually appropriate.” SKF USA Inc. v. United States, 254 F.3d 

1022, 1029 (Fed. Cir. 2001). Commerce’s concerns are considered 

substantial and legitimate when (1) Commerce supports its 

request with a compelling justification, (2) the need for 

finality does not outweigh the justification, and (3) the scope 

of the request is appropriate. Ad Hoc Shrimp Trade Action Comm. 

v. United States, __ CIT __, 882 F. Supp. 2d 1377, 1381 (2013).

This three-pronged test will be applied to each of Commerce’s 

requests in turn. 

A. Layo’s Plywood Input 

The agency justifies its first remand request on the 

basis that, “Commerce has discovered that there is conflicting 

evidence on the record as to the range of Layo Wood’s plywood 

thicknesses.” Def.’s Resp. Br. at 28. Clarifying and correcting 

a potentially inaccurate determination is a compelling 

justification. See Parkdale Int’l v. United States, 475 F.3d 

1375, 1380 (Fed. Cir. 2007) (“[A]n overriding purpose of 

Commerce’s administration of antidumping laws is to calculate 

dumping margins as accurately as possible . . . .”). In the 

context of a routine appeal of a final determination, the need 

to accurately calculate margins is not outweighed by the 

interest in finality. See Shakeproof Assembly Components Div. of 

Ill. Tool Works, Inc. v. United States, 29 CIT 1516, 1523–24, 

412 F. Supp. 2d 1330, 1337–38 (2005). In addition, the scope of 
Consol. Court No. 12-00007 Page 9 

Commerce’s remand request — to clarify the record evidence and 

revise the determination if warranted — is an appropriate 

response to Commerce’s concern. Therefore, Commerce’s request 

for remand to reconsider the surrogate value determination for 

Layo’s plywood input is granted.8

B. Samling’s HDF Input 

Commerce also requests remand to reconsider the 

surrogate value determination for Samling’s HDF input because 

the Harmonized Tariff Schedule (“HTS”) category used to value 

Samling’s HDF input may not accurately represent Samling’s HDF 

input. Def.’s Resp. Br. at 29. The voluntary remand analysis 

above also applies to this determination and supports granting 

Commerce’s request. As noted above, accuracy is a compelling 

 8

 The court will not, as Layo suggests, require Commerce to 

adopt Layo’s recommended procedures and calculations for valuing 

the plywood input. Resp’ts’ Reply Br., ECF No. 87, at 21. In 

matters of method, the court “defer[s] to the agency whose 

expertise, after all, consists of administering the statute.” 

Gleason Indus. Prods., Inc. v. United States, 31 CIT 393, 396 

(2007); cf. NLRB v. Enter. Ass’n of Steam, Hot Water, Hydraulic 

Sprinkler, Pneumatic Tube, Ice Mach. & Gen. Pipefitters, Local 

Union No. 638, 429 U.S. 507, 522 n.9 (1977) (“When an 

administrative agency has made an error of law, the duty of the 

Court is to correct the error of law committed by that body, and 

after doing so to remand the case to the [agency] so as to 

afford it the opportunity of examining the evidence and finding 

the facts as required by law.”) (alteration in original) 

(citation omitted) (internal quotation marks omitted).
Consol. Court No. 12-00007 Page 10 

justification, which is not outweighed by finality in this case, 

and the scope of the remand request is appropriate.

CAHP objects to remand of this determination on the 

grounds that Samling failed to exhaust its administrative 

remedies.9

 Def.-Intervenor’s Resp. to Pls.’ Consol. Mot. J. 

Admin. R., ECF No. 82 (“Def.-Intervenor’s Resp. Br.”) at 6–9.

But refusing Commerce’s remand request on exhaustion grounds is 

not appropriate on the facts of this case. During verification, 

Layo submitted additional information to Commerce regarding the 

proper HTS category for the HDF input. Layo Case Br., A-570-970, 

POI Apr. 1, 2010 – Sept. 30, 2010 (Aug. 5, 2011), Admin. R. Pt. 

 9

 When reviewing challenges to antidumping determinations, 

this court “shall, where appropriate, require the exhaustion of 

administrative remedies.” 28 U.S.C. § 2637(d) (2006). Requiring 

parties to exhaust their administrative remedies “allows the 

agency to apply its expertise, rectify administrative mistakes, 

and compile a record adequate for judicial review — advancing 

the twin purposes of protecting administrative agency authority 

and promoting judicial efficiency.” Camau Frozen Seafood 

Processing Imp. Exp. Corp. v. United States, __ CIT __, 

880 F. Supp. 2d 1348, 1355 (2012) (quoting Carpenter Tech. Corp. 

v. United States, 30 CIT 1595, 1597, 464 F. Supp. 2d 1347, 1349 

(2006)). While the “general rule [is] that courts should not 

topple over administrative decisions unless the administrative 

body not only has erred but has erred against objections made at 

the time appropriate under its practice,” Dorbest Ltd. v. United 

States, 604 F.3d 1363, 1375 (Fed. Cir. 2010) (quoting United 

States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 

(1952)), the statute permits the court discretion to decide when 

requiring exhaustion is appropriate, see Camau Frozen Seafood, 

__ CIT at __, 880 F. Supp. 2d at 1356. 
Consol. Court No. 12-00007 Page 11 

2 Pub. Doc. 2, at 25–26. In light of Layo’s submission, 

Commerce altered the HTS category used to value Layo’s HDF 

input. I & D Mem., cmt. 20 at 81–82. Although HDF is an input 

common to Layo and Samling, Commerce did not seek similar 

information from Samling or change the HTS category used to 

value Samling’s HDF input. See Id. Thus, the issue was before 

Commerce, but Commerce declined to address it with regard to 

Samling. Cf. Calgon Carbon Corp. v. United States, Slip Op. 11-

21, 2011 WL 637605, at *6 (CIT Feb. 17, 2011) (“Commerce had no 

obligation to accept additional evidence at verification. Once 

Commerce did accept such evidence, however, Commerce had an 

obligation to treat [plaintiff] fairly by giving it a similar 

opportunity.”). Moreover, because Commerce has requested 

voluntary remand there is little concern that the alleged 

failure to exhaust will “deprive[] the agency of the opportunity 

to consider these arguments in the first instance.” Carpenter 

Tech., 30 CIT at 1598, 464 F. Supp. 2d at 1349. Rather, remand 

will “allow[] the agency to apply its expertise, rectify 

administrative mistakes, and compile a record adequate for 

judicial review . . . .” Id. 

Therefore, Commerce’s request for remand to reconsider 

the proper HTS category for valuing Samling’s HDF input is 

granted.
Consol. Court No. 12-00007 Page 12 

C. Targeted Dumping 

Third, Commerce requests remand to reconsider the 

application of its targeted dumping method in light of “any 

changes in surrogate values [for Layo’s plywood input and 

Samling’s HDF input] and in accordance with its current 

standards.” Def.’s Resp. Br. at 29. Commerce contends that 

changes in surrogate values and application of updated standards 

for applying the targeted dumping method may result, on remand, 

in a determination that the targeted dumping method should not 

be applied to either Samling or Layo; therefore, Plaintiffs’ 

targeted dumping challenges may become moot. Def.’s Supplemental 

Br. at 10–18. The Government’s Response Brief did not clearly 

explain the basis for seeking remand to reconsider the 

application of the targeted dumping method; however, in 

supplemental briefing filed with leave of the court, the 

Government presented a persuasive argument explaining why the 

targeted dumping issues may become moot on remand.10

 10 The court does not reach the merits of Plaintiffs’ 

targeted dumping challenges; however, it does note the recent 

decision in Gold East Paper (Jiangsu) Co. v. United States, Slip 

Op. 13-74, 2013 WL 2996231 (CIT June 17, 2013). Gold East Paper 

decided a challenge to the withdrawal of the targeted dumping 

regulations similar to that raised by the Plaintiffs in this 

case, holding that the regulations were improperly withdrawn. 

Id. at *5–8. While the issue is not decided here, considered in 

light of Gold East Paper, the Government’s defense of the 

withdrawal does not appear strong. Specifically, it does not 

(footnote continued) 
Consol. Court No. 12-00007 Page 13 

To explain: Commerce is permitted by statute to use 

an average-to-transaction method, referred to as the targeted 

dumping method,11 to calculate the dumping margin if “(i) there 



appear persuasive to respond to the Administrative Procedure 

Act’s notice and comment requirement by providing an opportunity 

to comment in a general way on the application of the targeted 

dumping methodology. The government presents no reason to 

believe that this general notice, on a different subject, should 

be considered adequate notice of an outright withdrawal of the 

subject regulations. Nor are the cases the Government cites to 

support this method of rulemaking apposite. The withdrawal of 

the targeted dumping regulations was neither a “logical 

outgrowth” of the prior opportunities to comment, cf. Ariz. Pub. 

Serv. Co. v. EPA, 211 F.3d 1280, 1299–1300 (D.C. Cir. 2000) 

(denying notice and comment challenge where “the final rule was 

not wholly unrelated or surprisingly distant from what the 

[agency] initially suggested”), nor was the withdrawal simply an 

alteration of a previously proposed rule, see First Am. Discount 

Corp. v. Commodity Futures Trading Comm’n, 222 F.3d 1008, 1015 

(D.C. Cir. 2000); cf. Fed. Express Corp. v. Mineta, 373 F.3d 

112, 120 (D.C. Cir. 2004) (“Although perhaps [the agency] should 

not have labeled the First through Third rules as ‘final,’ the 

agency has made a compelling showing that it provided a 

meaningful opportunity to comment before the Fourth Final Rule 

became effective.”) (citations omitted) (internal quotation 

marks omitted). Finally, because Commerce had ample opportunity 

to provide notice and comment, it does not appear appropriate to 

claim that this was an “emergency situation[], or [a situation] 

where delay would result in serious harm,” Jifry v. FAA, 370 

F.3d 1174, 1179 (D.C. Cir. 2004) (citation omitted), such as 

would warrant application of the good cause exception. 

11 Commerce determines whether merchandise is sold at less 

than fair value, i.e. dumped, by comparing export price to 

normal value. 19 U.S.C. § 1677(34), (35)(A) (defining dumping 

and dumping margin). The statute provides two default methods 

for making the less than fair value determination in an 

investigation. § 1677f-1(d)(1)(A). Commerce may compare either 

(1) the weighted average normal value to the weighted average 

export price for sales of comparable merchandise, the “averageto-average” or “A-A” method, § 1677f-1(d)(1)(A)(i), or (2) the 

(footnote continued) 
Consol. Court No. 12-00007 Page 14 

is a pattern of export prices (or constructed export prices) for 

comparable merchandise that differ significantly among 

purchasers, regions, or periods of time, and (ii) [Commerce] 

explains why such differences cannot be taken into account using 

a method described in paragraph (1)(A)(i) [the commonly employed 

average-to-average method] or (ii) [the transaction-totransaction method].” § 1677f-1(d)(1)(B).

To satisfy the first element of the statutory test, “a 

pattern of export prices . . . that differ significantly among 

purchasers, regions, or periods of time,” § 1677f-1(d)(1)(B)(i), 

Commerce relies on a test first introduced in the antidumping 

investigation of Certain Steel Nails from the People’s Republic 

of China (the “Nails from China Test”).12 I & D Mem., cmt. 4 



normal values of individual transactions to the export prices of 

individual transactions, the “transaction-to-transaction” or “TT” method, § 1677f-1(d)(1)(A)(ii). If, however, Commerce makes 

the necessary findings pursuant to § 1677f-1(d)(1)(B), discussed 

below, then it may compare the weighted average of the normal 

values to the export prices of individual transactions, the 

“average-to-transaction” or “A-T” method. § 1677f-1(d)(1)(B).

12 Certain Steel Nails from the People’s Republic of China, 

73 Fed. Reg. 33,977 (Dep’t Commerce June 16, 2008) (final 

determination of sales at less than fair value and partial 

affirmative determination of critical circumstances) and 

accompanying Issues & Decision Memorandum, A-570-909, POI Oct. 

1, 2006 – Mar. 31, 2007 (June 6, 2008) cmts. 3–7 at 15–23. 

The Nails from China Test has two steps. In step one, 

Commerce “determines the share of the alleged targetedcustomer’s purchases of subject merchandise (by sales volume) 

that are at prices more than one standard deviation below the 

(footnote continued) 
Consol. Court No. 12-00007 Page 15 

at 29–31. When Commerce applied the Nails from China Test in 

this case, the test did not take into account what proportion of 

a respondent’s total sales volume consisted of targeted sales. 

Def.’s Supplemental Br. at 17. Commerce has altered its 

practice since publication of the Final Determination and now 

examines a respondent’s targeted dumping by volume as a 

component of the pattern requirement. Id. at 16–17; Certain 

Stilbenic Optical Brightening Agents from Taiwan, 76 Fed. Reg. 

68,154, 68,156 (Dep’t Commerce Nov. 3, 2011) (preliminary 

determination of sales at less than fair value and postponement 

of final determination), unchanged in Certain Stilbenic Optical 

Brightening Agents from Taiwan, 77 Fed. Reg. 17,027 (Dep’t 

Commerce Mar. 22, 2012) (final determination of sales at less 

than fair value).



weighted-average price to all customers, targeted and nontargeted,” and if such share of sales exceeds thirty-three 

percent of the total volume of a respondent’s sales of subject 

merchandise to the alleged targeted customer, then Commerce 

considers there to be a pattern of price differences. I & D 

Mem., cmt. 4 at 30. In the second step, Commerce examines all 

sales of identical merchandise by a respondent to the alleged 

targeted customer and “determines the total volume of sales for 

which the difference between the weighted-average price of sales 

to the allegedly targeted customer and the next higher weightedaverage price of sales to a non-targeted customer exceeds the 

average price gap (weighted by sales volume) for the nontargeted group,” and if such share of sales exceeds five 

percent, Commerce considers there to be a significant difference 

in prices. Id. at 30–31. 
Consol. Court No. 12-00007 Page 16 

Plaintiffs have argued that their proportion of 

targeted sales by volume is minimal. Particularly, Plaintiffs 

contend that only 2.66% of Layo’s sales were found to be 

targeted and only 7.40% of Samling’s sales were found to be 

targeted. Resp’ts’ Br. at 18; see also Def.’s Supplemental Br. 

at 18. In light of the changes to the Nails from China Test and 

the argument put forward by Plaintiffs, Commerce, on remand, may 

find that there was not a pattern of significant price 

differences pursuant to 19 U.S.C. § 1677f-1(d)(1)(B)(i).13

 13 Petitioner’s argue that permitting Commerce to apply its 

modified Nails from China Test on remand would be fundamentally 

unfair and possibly improper retroactive action. Def.-

Intervenor’s Resp. to Def.’s Supplemental Br., ECF No. 119 

at 5-9. Commerce’s request, however, falls squarely within the 

parameters for remand articulated in SKF USA: 

[T]he agency may request a remand because it believes 

that its original decision is incorrect on the merits 

and wishes to change the result. . . . The more 

complex question, however, involves a voluntary remand 

request associated with a change in agency policy or 

interpretation. . . . Where there is no step one 

Chevron issue, we believe a remand to the agency is 

required, absent the most unusual circumstances 

verging on bad faith. Under Chevron, agencies are 

entitled to formulate policy and make rules “to fill 

any gap left, implicitly or explicitly, by Congress.”

Furthermore, an agency must be allowed to assess “the 

wisdom of its policy on a continuing basis.” Under 

the Chevron regime, agency discretion to reconsider 

policies does not end once the agency action is 

appealed.

SKF USA, 254 F.3d at 1029–30 (quoting Chevron U.S.A. Inc. v. 

Natural Resources Def. Council, 467 U.S. 837, 843, 864 (1983)). 
Consol. Court No. 12-00007 Page 17 

To satisfy the second part of the statutory test, 

i.e., to show that the differences cannot be taken into account 

using the A-A method, § 1677f-1(d)(1)(B)(ii), Commerce 

calculates the dumping margin using both the A-A method and the 

A-T method. See, e.g., Bottom Mount Combination RefrigeratorFreezers from Mexico, 77 Fed. Reg. 17,422, 17,424 (Dep’t 

Commerce Mar. 26, 2012) (notice of final determination of sales 

at less than fair value and affirmative critical circumstances 

determination). If the A-A and A-T methods yield 

insignificantly different margins, then Commerce considers any 

price differences found pursuant to the Nails from China Test to 

be taken into account by the A-A method and does not apply the 

targeted dumping method. Id. Because the dumping margin is 

affected by changes in surrogate value, the request for remand 

of certain surrogate values, discussed above, and the court’s 

remand of other surrogate values, discussed below, may alter the 

relative margins produced by the A-A and A-T methods. In 

particular, Samling argues, and Commerce acknowledges, that 

changing the HTS category used to value Samling’s HDF input – 

which Commerce has requested remand to reconsider – is likely to 

result in a de minimis margin for Samling using either the A-A 

or A-T method. Resp’ts’ Br. at 64; Def.’s Supplemental Br. at 

14. Thus, because the court is remanding surrogate value 

determinations for reconsideration, Commerce may, on remand, 
Consol. Court No. 12-00007 Page 18 

determine that part two of the statutory test is unsatisfied for 

one or both Plaintiffs. 

It follows that Commerce has presented a persuasive 

argument that reconsideration upon remand may result in both 

Plaintiffs failing to meet the statutory test for application of 

the targeted dumping method. If, on remand, Commerce does not 

apply the targeted dumping method to any Plaintiff, then the 

targeted dumping arguments raised by Plaintiffs will become 

moot. The possibility that the targeted dumping method will not 

be applicable to Plaintiffs upon remand is a compelling 

justification for remand, and the possibility that any decision 

this court would make on the merits regarding the targeted 

dumping challenges will become moot diminishes concerns of 

finality. See Ad Hoc Shrimp Trade Action Comm., __ CIT at __, 

882 F. Supp. 2d at 1381. For this reason, the court grants 

Commerce’s request for voluntary remand to reconsider 

application of the targeted dumping method in light of changes 

to surrogate values and in conformity with current standards.14

 14 In light of the possibility that Plaintiffs’ substantive 

challenges to the method for analyzing targeted dumping will 

become moot on remand, it is also possible that Commerce will 

not use zeroing in this investigation, thus rendering moot 

Plaintiffs’ challenge to the use of this practice in 

investigations. Accordingly, any consideration of zeroing will 

also be deferred. 
Consol. Court No. 12-00007 Page 19 

II. Other Surrogate Values 

A. Surrogate Value of Layo’s Core Veneer 

Commerce defined MLWF for purposes of the 

investigation as wood flooring that is “composed of an assembly 

of two or more layers or plies of wood veneer(s) in combination 

with a core. The several layers, along with the core, are glued 

or otherwise bonded together to form a final assembled product.” 

Preliminary Determination, 76 Fed. Reg. at 30,657 (footnote 

omitted). Layo produces multilayered wood flooring composed of 

a face veneer, core layer, and back layer. Layo Sales & FOP 

Verification Report, A-570-970, POI Apr. 1, 2010 – Sept. 30, 

2010 (July 22, 2011), Admin. R. Pt. 1 Pub. Doc. 599 (“Layo 

Verification Report”) at 13. Layo uses core grade wood sheets 

and chips, or core veneer,15 to produce plywood for the core 

layer of its wood flooring. Layo Section C & D Questionnaire, 

A-570-970, POI Apr. 1, 2010 – Sept. 30, 2010 (Feb. 23, 2011), 

 15 The parties refer to the core-grade wood sheets and chips 

used to produce the core layer in a variety of ways, including 

core veneer, core chips and sheets, and core material.

Consistent with the Issues and Decision Memorandum in this case, 

the court will refer to the materials used to produce the core 

layer as core veneer. The core veneer, used to produce the core 

layer, is distinct from face veneer, the top-most or exterior 

layer of finished MLWF. I & D Mem., cmts. 14–16 at 66–74 

(discussing different surrogate values for face veneers and core 

veneers).
Consol. Court No. 12-00007 Page 20 

Admin. R. Pt. 1 Pub. Doc. 321 (“Layo C & D Questionnaire”) 

at 10–11.

In the Preliminary Determination, Commerce valued 

Layo’s core veneer using Philippine National Statistics Office 

(“NSO”) data, specifically values for Philippine HTS subheading 

4408.90.10, which applies to non-coniferous, non-tropical 

(“NCNT”) face veneer. I & D Mem., cmt. 16 at 73; Preliminary 

Surrogate Value Mem., A-570-970, POI Apr. 1, 2010 – Sept. 30, 

2010 (May 19, 2011), Admin. R. Pt. 1 Pub. Doc. 523, at 7. In 

comments on the Preliminary Determination, both Layo and 

Petitioners agreed that Layo’s core veneers are properly 

classified under Philippine HTS subheading 4408.90.90-06, which 

is the HTS subheading for “sheets for plywood.” I & D Mem., cmt. 

16 at 73. The parties did not, however, agree on a dataset that 

would provide a basis for valuing core veneer using the ten 

digit subheading, HTS 4408.90.90-06. Petitioners argued that 

the only data available for HTS 4408.90.90-06 reflected a low 

volume of imports from a single country during 2009, a noncontemporaneous period; therefore, Petitioners argued, Commerce 

should value core veneer using the eight digit basket subheading 

HTS 4408.90.90, which includes the ten digit subheading HTS 
Consol. Court No. 12-00007 Page 21 

4408.90.90-06 along with other ten digit subheadings.16 Id. In 

response, Layo argued that the NSO data did not provide values 

for the specific subheading at issue and Commerce should value 

core veneer on the basis of HTS 4408.90.90-06 drawn from Global 

Trade Atlas (“GTA”) data. Id. Commerce agreed with Petitioners 

and valued Layo’s core veneer using the basket category, HTS 

4408.90.90, drawn from the NSO data. Id. Layo challenges this 

determination on the grounds that HTS 4408.90.90 was not the 

best available information because it lacked specificity and was 

unreasonable because it resulted in a value for core veneer that 

exceeded the value for face veneer. Resp’ts’ Br. at 52–57. 

 16 The breakdown of the basket subheading HTS 4408.90.90 is 

as follows: 

4408.90.90: Other 

 4408.90.90-01: A. Sheets for veneering which are 

 obtained by slicing laminated wood 

 4408.90.90 B. Other 

 4408.90.90-02: Sheets for plywood, of White Lauan 

 4408.90.90-03: White Lauan, sawn lengthwise, sliced or 

 peeled 

 4408.90.90-04: Tanguile, sawn lengthwise, sliced or 

 peeled 

 4408.90.90-05: Veneer corestock 

 4408.90.90-06: Sheets for plywood 

 4408.90.90-07: Narra, sawn lengthwise, sliced or 

 peeled 

 4408.90.90-09: Other 

Philippine Standard Commodity Classification, Ex. 2 to Pet’rs’ 

Factor Data, A-570-970, POI Apr. 1, 2010 – Sept. 30, 2010 (July 

5, 2011), Admin. R. Pt. 1 Pub. Doc. 581 (asterisks omitted). 
Consol. Court No. 12-00007 Page 22 

When considering Layo’s challenges, the court will not 

substitute its judgment regarding what evidence constitutes the 

best available information for that of Commerce, so long as 

Commerce’s determination is reasonable. See Zhejiang DunAn 

Hetian Metal Co. v. United States, 652 F.3d 1333, 1341 (Fed. 

Cir. 2011). There are two aspects of Commerce’s determination, 

however, that, absent further explanation, make it unreasonable.

First, the NSO data does not reflect any imports 

specific to the input at issue. The 2010 NSO data contains no 

record of imports under HTS 4408.90.90-06, the subheading all 

parties agree is most appropriate for core veneer. Ex. 4 to 

Resp’ts’ Br.; Ex. 9 to Pet’rs’ Rebuttal Surrogate Data, A-570-

970, POI Apr. 1, 2010 – Sept. 30, 2010 (Mar. 21, 2011), Admin. 

R. Pt. 1 Pub. Doc. 374. Therefore, the basket category that 

Commerce opted to use was a basket containing no like product to 

that being valued. In other words, by valuing core veneer on 

the basis of HTS 4408.90.90 drawn from the 2010 NSO data, 

Commerce valued the core veneer on the basis of exclusively noncore veneer imports to the Philippines. The unreasonableness of 

valuing the core veneer in this way is further revealed by the 

unreasonable outcome that resulted, as discussed below. 
Consol. Court No. 12-00007 Page 23 

Valuing core veneer on the basis of HTS 4408.90.90 

results in a surrogate value for core veneer that is higher than 

the surrogate value for face veneer.17 In the Final 

Determination, Commerce valued Layo’s face veneer at 

173.41 USD/m3 and Layo’s core veneer at 300.08 USD/m3. Layo 

Final Surrogate Value Sheet, A-570-970, POI Apr. 1, 2010 – Sept. 

30, 2010, Admin. R. Pt. 2 Pub. Doc. 23. Were core veneer more 

expensive than face veneer, however, there would be no incentive 

for Layo, or any wood flooring manufacturer, to use core veneer 

 17 Commerce argues that the court should not consider Layo’s 

argument regarding the relative values of core veneer and face 

veneer because Layo did not raise this argument before Commerce 

and, therefore, did not exhaust its administrative remedies. 

Def.’s Resp. Br. at 14–17. For a summary of the exhaustion 

doctrine, see supra note 9. Commerce’s recapitulation of the 

record appears to be incorrect. A review of Layo’s Case Brief 

reveals the following passage, which the court believes 

sufficiently raised the issue to preserve it for appeal: 

[T]he value reflected in the GTA import statistics for 

HTS 4408.90.9006 is rational because it is lower than 

the value for “face veneers” under Philippine HTS 

4408.90.10 from the NSO data at USD 173.41/M3 as the 

Department found and as indicated in the above table.

In contrast, the value offered by petitioners after 

the preliminary determination is higher than the value 

determined by the Department for face veneers. Thus, 

not only is the basis for petitioners’ recommended 

surrogate value for core veneer less specific but it 

also defies the economics of MLWF manufacturing and 

costs. The core sheets are used as the primary cheap 

filler wood whereas face veneer is used precisely 

because it is more expensive. 

Layo Case Br. at 19. 
Consol. Court No. 12-00007 Page 24 

materials or invest labor costs in constructing a plywood core 

layer from core veneer – a process Layo reported performing and 

Commerce verified. Layo Supplemental Section D Questionnaire, 

A-570-970, POI Apr. 1, 2010 – Sept. 30, 2010 (Apr. 8, 2011), 

Admin. R. Pt. 1 Pub. Doc. 404 at 5; Layo Verification Report 

at 13-15. It follows that Commerce’s decision to value core 

veneer at a price higher than face veneer, when both the record 

and common sense dictate that core veneers are less valuable 

than face veneers, is unreasonable. Therefore, this 

determination is remanded to Commerce for reconsideration. 

B. Surrogate Value of Layo’s HDF Input 

Fiberboard is available in a range of densities 

measured in kilograms per meter cubed (“kg/m3”). These 

densities can be grouped into categories such as medium density 

fiberboard (“MDF”) and high density fiberboard (“HDF”). The 

Philippine NSO defines fiberboard ranging in density from 500–

800 kg/m3 as MDF, HTS 4411.21, and fiberboard with a density 

above 800 kg/m3 as HDF, HTS 4411.11. I & D Mem., cmt. 20 at 82. 

Layo reported using fiberboard that ranged in density 

from 760 kg/m3 to 880 kg/m3,18 but did not report quantities of 

 18 Commerce incorrectly identifies the range of densities as 

760 kg/m3 to 990 kg/m3 in its Response Brief. Def.’s Resp. Br. 

at 18. 
Consol. Court No. 12-00007 Page 25 

each density. Id. Therefore, Commerce used a simple average of 

the two HTS categories, HTS 4411.11 and HTS 4411.21, to 

determine the value of Layo’s fiberboard input. Id. Layo now 

argues that Commerce should have either used only HTS 4411.11, 

because Layo reported 820 kg/m3 as the most common density it 

used, or, if averaging, Commerce should not have converted the 

values for both HTS categories from USD/kg to USD/m3 using the 

same measure of density, 820 kg/m3. Resp’ts’ Br. at 60–61. 

Layo’s contention that Commerce should have used only 

HTS 4411.11 is not persuasive. Layo argues that “most of the 

fiberboard [Layo] consumed had a density of 820kg/m3.” Id. 

at 60. Layo further contends that Commerce agrees with this 

assertion based on its use of 820 kg/m3 in calculating the 

surrogate value for the Final Determination. Id. at 60; see also 

Layo Final Surrogate Value Sheet (employing 820 kg/m3 as a 

conversion factor for the HDF surrogate value). But Layo’s 

contentions are not supported by the record. Layo reported that 

it consumed fiberboard in densities ranging from 760 kg/m3 to 

880 kg/m3, but nothing in the record indicates that Layo 

reported quantities or percentages of particular densities. See 

I & D Mem., cmt. 20 at 82; Layo Case Br. at 27. The simple 

average of Layo’s reported range of densities is 820 kg/m3; 

however, because this is a simple average and not a weighted 

average, it does not indicate that 820 kg/m3 was the most common 
Consol. Court No. 12-00007 Page 26 

density consumed by Layo. Thus, there is no record evidence to 

support Layo’s contention that 820 kg/m3 is the most common 

density of fiberboard it consumes. Furthermore, even if Layo 

predominately consumed fiberboard of a density that fell within 

HTS 4411.11, it is reasonable for Commerce to account for the 

other fiberboard Layo consumes, which falls within HTS 4411.21.

Layo’s second argument regarding the conversion 

factor, however, warrants further explanation or reconsideration 

by Commerce. Commerce used a two-step calculation to derive the 

surrogate value for fiberboard. In step one, Commerce averaged 

the values of HTS 4411.11 and HTS 4411.21. In step two, the 

average value was converted from USD/kg (as reported in the NSO) 

to USD/m3 (as reported by Layo). The parties’ dispute centers 

on the proper order of these steps.

In the Final Determination, Commerce averaged the HTS 

values first, arriving at an average value of 0.54 USD/kg. See 

Layo Final Surrogate Value Sheet. Commerce then multiplied the 

average value by the average density of Layo’s fiberboard, 820 

kg/m3, to arrive at a surrogate value of 442.90 USD/m3. See Id.

Layo contends that Commerce should have first converted each HTS 

category into USD/m3, by multiplying the value by an appropriate 

average density, and then averaged the resultant values.

According to Layo, converting each HTS category to USD/m3 would 

be more accurate because HTS 4411.21, which covers 500–800 
Consol. Court No. 12-00007 Page 27 

kg/m3, would be converted using a density appropriate to that 

category rather than the average density for Layo’s input, 820 

kg/m3, which would otherwise fall into HTS 4411.11. Resp’ts’ Br. 

at 61. 

Commerce is afforded wide discretion in its selection 

and calculation of surrogate values. Grobest & I-Mei Indus. 

(Viet.) Co. v. United States, __ CIT __, 815 F. Supp. 2d 1342, 

1351 (2012). “[The] court’s duty is not to evaluate whether the 

information Commerce used was the best available, but rather 

whether a reasonable mind could conclude that Commerce chose the 

best available information.” Id. (quoting Zhejiang DunAn, 652 

F.3d at 1341 (alteration in original) (internal quotation marks 

omitted). Nonetheless, agency action that is unsupported by a 

reasoned explanation will not be affirmed. See SEC v. Chenery 

Corp., 332 U.S. 194, 196 (1947) (“[A] reviewing court, in 

dealing with a determination or judgment which an administrative 

agency alone is authorized to make, must judge the propriety of 

such action solely by the grounds invoked by the agency. If 

those grounds are inadequate or improper, the court is powerless 

to affirm the administrative action by substituting what it 

considers to be a more adequate or proper basis.”). 

Commerce has not provided any explanation for its 

decision to convert the average HTS value by the average density 

of Layo’s fiberboard input. While the court will not substitute 
Consol. Court No. 12-00007 Page 28 

its judgment for that of the agency, Layo has raised legitimate 

questions about the propriety of Commerce’s calculation. If 

Commerce had chosen to perform the calculation differently, it 

would likely have changed the surrogate value for HDF. Without 

an explanation of its decision, the court cannot affirm 

Commerce’s determination. See Id. Therefore, the surrogate 

value for Layo’s fiberboard is remanded for further explanation 

or reconsideration. 

C. Brokerage and Handling Fees 

When calculating the export price, Commerce deducts 

“the amount, if any, included in such price, attributable to any 

additional costs, charges, or expenses . . . which are incident 

to bringing the subject merchandise from the original place of 

shipment in the exporting country to the place of delivery in 

the United States,” such as brokerage and handling fees. 

19 U.S.C. § 1677a(c)(2)(A). In this case, Commerce valued 

brokerage and handling fees using data for the Philippines from 

the World Bank report Doing Business 2011: Making a Difference 

for Entrepreneurs (“Doing Business Report”). Preliminary 

Surrogate Value Mem. at 17; Doing Business Report, Ex. 9 to 

Preliminary Surrogate Value Mem. 

Layo contends that the brokerage and handling fees 

reflected in the Doing Business Report are overstated because 

they include fees for obtaining a letter of credit, which is not 
Consol. Court No. 12-00007 Page 29 

a component of Layo’s costs. Resp’ts’ Br. at 81–82. Commerce 

contends that there is no indication that letter of credit costs 

are included in the Doing Business Report and, if they are, such 

costs are generally paid by the purchaser not the exporter. I & 

D Mem., cmt. 8 at 48.

The record evidence does not support Commerce’s 

determination. The World Bank uses data from its Trading Across 

Borders Survey to compile the Doing Business Report. See Trading 

Across Borders Survey, Ex. 11 to Layo Surrogate Data, A-570-970, 

POI Apr. 1, 2010 – Sept. 30, 2010 (Mar. 15, 2011), Admin. R. Pt. 

1 Pub. Doc. 364.19 Layo points out that the survey asks 

respondents to “assume that the method of payment will be a 

Letter of Credit . . . ,” Trading Across Borders Survey at 3, 

and provides respondents an opportunity to detail the costs 

associated with an “Export Letter of Credit,” Trading Across 

Borders Survey at 5. Commerce responds that the Doing Business 

Report contains a list of documents required for export that 

does not include a letter of credit, thereby indicating that 

 19 The Trading Across Borders Survey establishes a 

hypothetical import/export scenario between the survey 

respondent and a fictional company located in a foreign market.

The survey establishes certain parameters for the hypothetical, 

including shipping method and value of goods, and asks the 

survey respondent to describe the process for importing and 

exporting the hypothetical goods into and out of his or her 

country. Trading Across Borders Survey at 3.
Consol. Court No. 12-00007 Page 30 

letters of credit are not included in the World Bank’s 

calculations. I & D Mem., cmt. 8 at 48; Doing Business Report 

at 11. 

Commerce’s argument is unpersuasive. The Trading 

Across Borders Survey not only contemplates the possibility of 

exporters using a letter of credit, it directs the respondent to 

assume use of a letter of credit, which indicates that letter of 

credit expenses are included as a cost of doing business.

Moreover, in a website discussing the methodology of the Trading 

Across Borders Survey and Doing Business Report, the World Bank 

states that “[p]ayment is made by letter of credit, and the 

time, cost and documents required for the issuance or advising 

of a letter of credit are taken into account.” Trading Across 

Borders Methodology, Ex. 12 to Layo Surrogate Data. Nor is the 

absence of a letter of credit on the list of necessary export 

documents particularly informative. First, a letter of credit 

may not be a necessary document for exporting, but it is assumed 

as part of the exercise. Furthermore, the absence of a letter 

of credit from this list does not negate the fact that survey 

respondents are told to assume the use of a letter of credit in 

constructing their survey response and asked for information 

related to acquiring a letter of credit. It is unreasonable to 

assume the non-existence in the report of that which the 

report’s authors expect the survey respondents to assume. 
Consol. Court No. 12-00007 Page 31 

Nor is Commerce’s argument that letter of credit 

expenses are born by the purchaser persuasive. Commerce asserts 

this proposition with no record evidence to support it. See 

I & D Mem., cmt. 8 at 48. Layo, in contrast, placed on the 

record a printout of a page from the CreditManagementWorld.com 

website pertaining to letter of credit fees, which states that 

some letter of credit fees are borne by the seller and lists the 

relevant fees. Export Letter of Credit Fees, Ex. 14 to Layo 

Surrogate Data. The court does not decide what, if any, weight 

to give to this evidence, but, at a minimum, Commerce has failed 

to consider record evidence that detracts from its 

determination. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 

488 (1951) (“The substantiality of evidence must take into 

account whatever in the record fairly detracts from its 

weight.”).20

 20 A recent case, Since Hardware (Guangzhou) Co. v. United 

States, __ CIT __, 911 F. Supp. 2d 1362 (2013), affirmed 

Commerce’s refusal to deduct letter of credit expenses from 

brokerage and handling fees valued using Indian data from the 

World Bank Doing Business Report. But the Since 

Hardware court was presented with a very different record than 

that at issue here. Specifically, the Since Hardware court 

concluded that “without knowing the exact breakdown of the data 

included in the World Bank Report, [Commerce] can no more deduct 

a letter of credit expense than add extra expenses which 

[plaintiff] incurred but are not reflected by the World Bank 

data.” Id. at 1378 (quoting Remand Results at 19–20) (first 

alteration in original). Although the Since Hardware court also 

(footnote continued) 
Consol. Court No. 12-00007 Page 32 

For the foregoing reasons, Commerce’s refusal to 

adjust the brokerage and handling fees to account for letter of 

credit fees is not supported by a reasonable reading of the 

record. Therefore, the determination is remanded to Commerce 

for further explanation or reconsideration. 

D. Surrogate Financial Ratios 

Respondents also challenge Commerce’s calculation of 

surrogate financial ratios. In particular, Respondents argue 

that Commerce improperly rejected, as untimely filed, certain of 

Respondents’ surrogate financial statements and, alternatively, 

that Commerce did not use the best available information when it 

declined to factor 2009 financial statements on the record into 

the surrogate financial ratio calculations. 

Commerce has established deadlines for submission of 

factual information during an investigation. Pursuant to 



noted that “[l]etters of credit are not included in the eight 

listed expenses for document preparation,” it did not draw 

any explicit conclusion from this fact. Id. As discussed above, 

the record in the case at issue here does not support a finding 

that the list of documents for export settles the matter of 

whether letter of credit expenses are part of the World Bank 

report’s brokerage and handling expenses. In addition, Commerce 

made no claim in this case regarding its inability to determine 

an amount for letter of credit expenses to deduct from the 

brokerage and handling expenses, as it did in Since 

Hardware. For these reasons, Since Hardware is distinguishable, 

and it is appropriate, on the facts of this case, to remand this 

issue to Commerce for further explanation consistent with the 

foregoing discussion. 
Consol. Court No. 12-00007 Page 33 

19 C.F.R. § 351.301(c)(3)(i) (2010), interested parties have 

forty days after the publication of the preliminary 

determination to submit surrogate value information. Any 

interested party may offer factual information to “rebut, 

clarify, or correct” another interested party’s factual 

submission within a minimum of ten days following an initial 

submission of factual information. § 351.301(c)(1).21 Commerce 

has interpreted § 351.301(c)(1) to exclude the submission of new 

surrogate value information in rebuttal. I & D Mem., cmt. 3 at 

23–24. On this basis, Commerce rejected new surrogate financial 

statements submitted by Respondents outside of the forty day 

window for surrogate data submissions but within the period 

permitted for rebuttals. Id. at 23–25. 

 21 Section 351.301(c)(1) reads in full: 

Any interested party may submit factual information to 

rebut, clarify, or correct factual information 

submitted by any other interested party at any time 

prior to the deadline provided in this section for 

submission of such factual information. If factual 

information is submitted less than 10 days before, on, 

or after (normally only with the Department’s 

permission) the applicable deadline for submission of 

such factual information, an interested party may 

submit factual information to rebut, clarify, or 

correct the factual information no later than 10 days 

after the date such factual information is served on 

the interested party or, if appropriate, made 

available under APO to the authorized applicant. 
Consol. Court No. 12-00007 Page 34 

The court defers to an agency’s interpretation of its 

own regulation unless that interpretation is “plainly erroneous 

or inconsistent with the regulation.” Amanda Foods (Viet.) Ltd. 

v. United States, __ CIT __, 807 F. Supp. 2d 1332, 1342 (2011) 

(quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 

(1994)). This deference “is broader than deference to the 

agency’s construction of a statute, because in the latter case 

the agency is addressing Congress’s intentions, while in the 

former it is addressing its own.” Cathedral Candle Co. v. United 

States Int’l Trade Comm’n, 400 F.3d 1352, 1363–64 (Fed. Cir. 

2005). Furthermore, the court owes Commerce deference in 

crafting and executing the procedures necessary to evaluate the 

record. See PSC VSMPO-Avisma Corp. v. United States, 688 F.3d 

751, 760 (Fed. Cir. 2012) (“[A]bsent [constitutional] 

constraints or [extremely compelling] circumstances, courts will 

defer to the judgment of an agency regarding the development of 

the agency record.”). As the Court of Appeals has made clear, 

it is not this court’s role to “intrude[] upon Commerce’s power 

to apply its own procedures for the timely resolution of 

antidumping [proceedings]. The role of judicial review is 

limited to determining whether the record is adequate to support 

the administrative action.” Id. at 761. 

Respondents contend that Commerce’s interpretation of 

§ 351.301(c)(1) is plainly erroneous and inconsistent with the 
Consol. Court No. 12-00007 Page 35 

regulation because (1) the regulation does not prohibit the 

submission of new factual information or surrogate values and 

(2) prohibiting submission of new surrogate values in rebuttal 

denies parties a meaningful right to respond, as contemplated by 

the regulation.22 Resp’ts’ Br. 

Respondent’s textual argument is not persuasive.

Respondents contend that “[n]owhere in Section 351.301(c)(1) 

does it limit what type of ‘factual information’ can be 

submitted to ‘rebut, clarify, or correct.’” Resp’ts’ Br. at 74.

Respondents are only partially correct. Section 351.301(c)(1) 

does not permit the submission of any new factual information; 

rather, it limits the submission to “factual information to

rebut, clarify, or correct.” § 351.301(c)(1) (emphasis added).

Thus, the type of factual information permitted under 

 22 Respondents also argue that Commerce’s interpretation of 

§ 351.301(c)(1) disadvantages NME respondents in comparison to 

market economy respondents. Resp’ts’ Br. at 75–77. Respondents’ 

argument conflates two different procedures in two different 

types of proceedings without a clear justification.

Furthermore, Commerce has discretion to order its market economy 

proceedings and NME proceedings differently, as they require 

different types of procedures. See Rhone-Poulenc, Inc. v. United 

States, 20 CIT 573, 586–87, 927 F. Supp. 451, 462–63 (1996) 

(“Commerce’s Antidumping Manual expressly provides for NMErelated investigation methods distinct from those applicable in 

market economies. The treatment of exports from market 

economies has no bearing here, whether contained in the 

[Antidumping Manual] or in a prior Federal Register Notice given 

contrary statutory language.”) (citations omitted).
Consol. Court No. 12-00007 Page 36 

§ 351.301(c)(1) is limited to information that rebuts, 

clarifies, or corrects previously submitted factual information.

This is not an unambiguous construction, but such ambiguity is 

for Commerce to interpret in the first instance. See Cathedral 

Candle Co., 400 F.3d at 1363 (“The gap between the text of the 

regulation and the Commission’s interpretation of section 777 is 

filled by the Commission’s interpretation of the regulation.”).

Commerce has interpreted “factual information to 

rebut, clarify, or correct” to exclude new surrogate value data.

Nothing in this interpretation is erroneous or inconsistent with 

the regulation itself. The regulation for rebuttal, 

clarification, or correction of factual information is part of a 

larger regulatory section setting forth time limits for 

submission of factual information. Interpreting “factual 

information to rebut, clarify, or correct” to be limited by 

comparison to the other provisions of § 351.301 is consistent 

with the creation of a distinct subsection for this purpose.

Commerce’s interpretation is also consistent with the purpose of 

the subsection, which is to respond to factual information that 

has been placed on the record, not to expand the scope of the 

record. Finally, interpreting § 351.301(c)(1) to exclude new 

surrogate value data prevents Commerce from facing a scenario in 

which either a party has no opportunity to rebut, clarify, or 

correct new surrogate values submitted in a rebuttal, or 
Consol. Court No. 12-00007 Page 37 

Commerce must accede to rolling rebuttals while also complying 

with the statutory deadlines for completing investigations and 

reviews.

Nor is Respondents’ second argument, concerning the 

meaningful right to respond, persuasive. The following facts 

are relevant to this aspect of Respondents’ argument: Prior to 

the Preliminary Determination, Petitioners argued that Indonesia 

should be the surrogate country and submitted surrogate value 

data for Indonesia. I & D Mem., cmt. 3 at 25. In the 

Preliminary Determination, Commerce chose the Philippines as the 

surrogate country. Id. Petitioners submitted their postpreliminary surrogate values on the last day of the period for 

submissions, pursuant to § 351.301(c)(3)(i), but instead of 

submitting data on Indonesian surrogate values Petitioners 

changed course and submitted surrogate value data for the 

Philippines, which included 2010 financial statements for 

Philippine plywood producers. Pet’rs’ Factor Data at 16–22. 

Respondents offered alternative 2010 financial statements of 

Philippine plywood producers in rebuttal, but these statements 

were rejected by Commerce. I & D Mem., cmt. 3 at 22–23. 

Respondents now argue that they were prejudiced by having no 

opportunity to submit new surrogate value data for the 

Philippines in response to the surrogate value data submitted by 

Petitioners.
Consol. Court No. 12-00007 Page 38 

But Respondents’ argument misconstrues the nature of 

the proceeding. Respondents were aware that Commerce selected 

the Philippines as the primary surrogate country in the 

Preliminary Determination and were on notice that Petitioners 

might choose to submit surrogate value data for the Philippines.

Respondents had access to the surrogate value data later 

rejected by Commerce and an opportunity to put that data on the 

record during the forty day window for submission of new 

surrogate value data, pursuant to § 351.301(c)(3)(i).

Furthermore, Respondents were aware that Commerce uses 

contemporaneity as one of the factors in considering which 

surrogate value data to use, see supra note 7, and that the 2009 

financial statements on the record prior to the Preliminary 

Determination were not contemporaneous with the POI. Finally, 

Commerce explicitly notified parties that it does not consider 

new surrogate value data on rebuttal. See I & D Mem., cmt. 3 at 

24. Thus, Respondents had all the notice and opportunity they 

needed to put the rejected financial statements on the record in 

the forty day window provided, pursuant to § 351.301(c)(3)(i), 

and they chose not to do so. The right to “rebut, clarify, and 

correct” is not a substitute for a party’s obligation to develop 
Consol. Court No. 12-00007 Page 39 

the record in a timely manner, nor were Respondents prejudiced 

on the facts of this case.23

Finally, Respondents argue that Commerce abused its 

discretion by not factoring the 2009 financial statements on the 

record into its surrogate financial ratio determination. 

Resp’ts’ Br. at 78–81. Commerce determined that the 2010 

financial statements submitted by Petitioners were the best 

available information because they were contemporaneous with the 

POI and that the 2009 financial statements should be rejected as 

non-contemporaneous. I & D Mem., cmt. 1 at 12. Commerce has 

provided a reasoned explanation for its determination, and the 

court will not substitute its judgment for that of the agency. 

Zhejiang DunAn, 652 F.3d at 1341. 

For these reasons, Commerce’s rejection of 

Respondents’ late filed surrogate financial statements is 

affirmed.

 23 In their briefing, Respondents raise a scenario in which 

a party submits new surrogate value data on the fortieth day of 

the § 351.301(c)(3)(i) period relating to a surrogate country 

that no party argued for prior to the preliminary determination 

and which Commerce did not choose in the preliminary 

determination. Resp’ts’ Reply Br. at 23–25. Certainly, 

Commerce’s refusal to accept alternative surrogate values in 

such a scenario would be reviewed for abuse of discretion. See 

Wuhu Fenglian Co. v. United States, __ CIT __, 836 F. Supp. 2d 

1398, 1403 (2012). The court also acknowledges, without 

deciding, that on the stated facts an opposing party may be 

prejudiced. But, those are not the facts of this case. 
Consol. Court No. 12-00007 Page 40 

CONCLUSION

In light of the foregoing: (1) the court grants 

Commerce’s request for remand to reconsider the surrogate value 

determinations for Layo’s plywood input and Samling’s HDF input; 

(2) the court grants Commerce’s request for remand of the 

targeted dumping determination for reconsideration in light of 

any changes to the surrogate value determinations and in light 

of Commerce’s current standards for applying the targeted 

dumping method; (3) the court remands the surrogate value 

determinations for Layo’s core veneer input, Layo’s HDF input, 

and the brokerage and handling fees for further explanation or 

reconsideration consistent with this opinion; and (4) the court 

affirms Commerce’s rejection of Respondents’ late filed 

surrogate financial statements.

Commerce shall have until September 30, 2013, to 

complete and file its remand redetermination. Plaintiffs and 

Defendant-Intervenors shall have until October 15, 2013, to file 

comments. Plaintiffs, Defendant, and Defendant-Intervenors 

shall have until October 29, 2013, to file any reply. 

IT IS SO ORDERED. 

______/s/ Donald C. Pogue___ 

Donald C. Pogue, Chief Judge 

Dated: July 31, 2013 

 New York, NY