Court Opinion

ID: 2656213
Source: CourtListenerOpinion
Date Created: 2014-03-11 15:32:24.744319+00
Date Added: 2024-06-11T12:59:47.793233
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

  MARVIN FURNITURE (SHANGHAI) CO., LTD.,
             Plaintiff-Appellant,

                           v.

                  UNITED STATES,
                  Defendant-Appellee,

                          AND

  AMERICAN FURNITURE MANUFACTURERS
COMMITTEE FOR LEGAL TRADE AND VAUGHAN-
    BASSETT FURNITURE COMPANY, INC.,
            Defendants-Appellees.
           ______________________

                      2013-1156
                ______________________

    Appeal from the United States Court of International
Trade in No. 12-CV-0100, Senior Judge Nicholas Tsou-
calas.
                ______________________

               Decided: March 11, 2014
               ______________________

    JOHN M. PETERSON, Neville Peterson LLP, of New
York, New York, argued for plaintiff-appellant. With him
on the brief was RICHARD F. O’NEILL.
2                        MARVIN FURNITURE (SHANGHAI)   v. US

    CLAUDIA BURKE, Assistant Director, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee United States. On the brief were STUART F.
DELERY, Acting Assistant Attorney General, JEANNE E.
DAVIDSON, Director, PATRICIA M. MCCARTHY, Assistant
Director, and CARRIE A. DUNSMORE, Trial Attorney. Of
counsel on the brief was SHANA HOFSTETTER, Attorney,
Office of the Chief Counsel for Import Administration,
United States Department of Commerce, of Washington,
DC.

    JAMES MICHAEL TAYLOR, King & Spalding, LLP, of
Washington, DC, argued for defendants-appellees Ameri-
can Furniture Manufacturers Committee for Legal Trade,
et al. With him on the brief were JOSEPH W. DORN and P.
LEE SMITH. Of counsel was DANIEL SCHNEIDERMAN.
                 ______________________

    Before RADER, Chief Judge, PROST, and REYNA, Circuit
                          Judges.
REYNA, Circuit Judge.
     Marvin Furniture (Shanghai) Co. Ltd. (“Marvin”) ap-
peals a final decision of the Court of International Trade
sustaining a rescission by the Department of Commerce
(“Commerce”) of Marvin’s new shipper review in connec-
tion with an antidumping order on wooden bedroom
furniture from the People’s Republic of China. Marvin
Furniture (Shanghai) Co., v. United States, 867 F. Supp.
2d 1302 (Ct. Int’l Trade 2012). For the reasons below, we
affirm.
                        BACKGROUND
     In 2005, Commerce issued an antidumping duty order
on wooden bedroom furniture from the People’s Republic
of China. See Wooden Bedroom Furniture from the Peo-
ple’s Republic of China, 70 Fed. Reg. 329 (Dep’t of Com-
MARVIN FURNITURE (SHANGHAI)   v. US                      3

merce Jan. 4, 2005) (“the antidumping order”). Pursuant
to the antidumping order, importers of subject merchan-
dise who were not individually investigated and assigned
an individual rate by Commerce are required to post a
cash deposit at a country-wide rate of 216.01%.
    Marvin is a Chinese producer and exporter of juvenile
furniture. Marvin did not participate in the investigation
resulting in the antidumping order and did not export
subject merchandise to the United States during the
period of investigation. On July 30, 2011, Marvin re-
quested a new shipper review in order to obtain an indi-
vidual antidumping duty rate and avoid the 216.01%
country-wide rate. In its request, Marvin indicated that it
had not exported subject merchandise into the United
States prior to June 20, 2011.
    Based on U.S. Customs and Border Protection data,
Commerce determined that exports of subject merchan-
dise manufactured by Marvin had entered the United
States on September 8 and September 22, 2010. Com-
merce requested additional information from Marvin, and
Marvin submitted a letter explaining that both entries
contained only non-subject merchandise samples for a
trade show and that no sales or offers for sale were made.
Commerce accepted Marvin’s explanation and on August
25, 2011, initiated a new shipper review covering
Marvin’s exports of subject merchandise entered during
the period from January 1 through June 30, 2011. Notice
of the initiation of the new shipper review was published
six days later in the Federal Register. See Wooden Bed-
room Furniture from the People’s Republic of China, 76
Fed. Reg. 54,208 (Dep’t of Commerce Aug. 31, 2011).
    On August 26, 2011, Marvin submitted additional in-
formation to Commerce regarding the September 2010
entries. Marvin explained that the imported goods con-
sisted “primarily” of non-subject merchandise and includ-
ed some subject merchandise.        Marvin continued to
4                        MARVIN FURNITURE (SHANGHAI)   v. US

maintain that the goods were samples not entered for
consumption or sale. On August 31, 2011, Marvin noti-
fied Commerce that it had discovered that the September
2010 imports were in fact entered for consumption. Thus,
contrary to what Marvin indicated in its initial request 1
for a new shipper review, Marvin’s first entries of subject
goods were made prior to June 20, 2011. Marvin nonethe-
less maintained that the error in its request was harmless
because the request was still timely, as it was made
within one year of the first entry of subject merchandise.
    On January 10, 2012, Commerce preliminarily re-
scinded Marvin’s new shipper review. Wooden Bedroom
Furniture from the People’s Republic of China, 77 Fed.
Reg. 1456 (Dep’t of Commerce Jan. 10, 2012). Commerce
determined that, because Marvin’s request for a new
shipper review did not report the September 2010 entries,
Marvin failed to submit a request based on the date and
volume of its first entry of subject merchandise. Com-
merce therefore concluded that Marvin’s request “did not
satisfy the regulatory requirements” of 19 C.F.R.
§§ 351.214(b)(2)(iv)(A) and (B) and that Marvin was thus
not entitled to a new shipper review. See 77 Fed. Reg. at
1458.
    In its response to the preliminary determination,
Marvin argued that the rescission was improper because
it was based on a harmless and unintentional error that
did not affect its eligibility for a new shipper review.
Commerce disagreed and made the rescission final on
April 10, 2012. See Wooden Bedroom Furniture from the
People’s Republic of China, 77 Fed. Reg. 21,536 (Dep’t of

    1   Although not dispositive to the question of the suf-
ficiency of an initial new shipper review request, it is
noteworthy that, after making its initial request, Marvin
twice submitted erroneous information concerning the
nature of its first shipment.
MARVIN FURNITURE (SHANGHAI)   v. US                       5

Commerce Apr. 10, 2012). Commerce reaffirmed that
Marvin’s request did not meet the requirements of
19 C.F.R. §§ 351.214(b)(2)(iv)(A) and (B) because it did not
include data establishing the date and volume of its first
entry of subject merchandise. 77 Fed. Reg. at 21,537-
21,538.
    Marvin filed suit in the Court of International Trade
(“Trade Court”), seeking to overturn Commerce’s final
rescission. The court affirmed Commerce’s determination,
finding that Marvin’s failure to satisfy the regulatory
requirements for a new shipper review rendered its
request     “facially    infirm”   under     19    C.F.R.
§§ 351.214(b)(2)(iv)(A) and (B). Marvin Furniture, 867 F.
Supp. 2d at 1308. Noting that Marvin was not challeng-
ing the legality of any part of § 351.214, the court con-
cluded that Commerce’s interpretation of § 351.214 was
reasonable, supported by substantial evidence, and in
accordance with law. See id. Finally, the court also held
that 19 U.S.C. § 1677m, which allows a party to correct
prior filings, was inapplicable because Marvin’s request
for a new shipper review was not filed in “response to a
request for information” as contemplated under the
statute. See 19 U.S.C. § 1677m(d).
    Marvin timely appealed. We have jurisdiction pursu-
ant to 28 U.S.C. § 1295(a)(5).
                       DISCUSSION
    We review decisions of the Trade Court without def-
erence, applying the same standard of review that it
applies in its review of Commerce’s determinations. Mid
Continent Nail Corp. v. United States, 725 F.3d 1295,
1300 (Fed. Cir. 2013). When reviewing Commerce’s
determinations in an antidumping duty investigation, the
Trade Court examines whether the determinations are
“unsupported by substantial evidence on the record, or
otherwise not in accordance with law.”        19 U.S.C.
§ 1516a(b)(1)(B)(i). We review the Trade Court’s factual
6                        MARVIN FURNITURE (SHANGHAI)   v. US

findings for clear error. Arko Foods Int’l, Inc. v. United
States, 654 F.3d 1361, 1364 (Fed. Cir. 2011).
    The antidumping duty trade statutes authorize
Commerce to impose duties on imported goods that are
sold in the United States at less than fair value. See 19
U.S.C. § 1673. Once an antidumping duty order covering
the goods subject to investigation is in place, Commerce
may conduct an administrative review for “new” exporters
or producers who did not export the subject merchandise
during the period of investigation.       See 19 U.S.C.
§ 1675(a)(2)(B). These “new shipper reviews” give export-
ers or producers whose sales have not been previously
examined by Commerce an opportunity to obtain their
own individual antidumping duty rates.
    Commerce has promulgated regulations that set out
the procedures governing new shipper reviews. Pursuant
to these regulations, an exporter or producer seeking a
new shipper review must include in its initial request
documentation establishing:
    (A) The date on which subject merchandise of the
    exporter or producer making the request was first
    entered, or withdrawn from warehouse, for con-
    sumption, or, if the exporter or producer cannot
    establish the date of first entry, the date on which
    the exporter or producer first shipped the subject
    merchandise for export to the United States;
    (B) The volume of that and subsequent ship-
    ments; and
    (C) The date of the first sale to an unaffiliated
    customer in the United States.
19 C.F.R. § 351.214(b)(2)(iv).
    Marvin argues that Commerce acted unlawfully when
it determined that Marvin was ineligible for a new ship-
per review on the basis that its initial request listed an
MARVIN FURNITURE (SHANGHAI)   v. US                      7

erroneous date of first entry. According to Marvin, not-
withstanding any deficiencies in its initial request, it
satisfied the statutory and regulatory requirements
because it did not export subject merchandise during the
period of investigation and it made its request for a new
shipper review within the one-year regulatory period.
Marvin thus contends that it was “eligible” for a new
shipper review and that Commerce’s determination to the
contrary was neither in accordance with law nor support-
ed by substantial evidence.
    We disagree that Marvin was “eligible” for a new
shipper review. The relevant regulations clearly provide
that a new shipper initial request must, among other
things, establish the date and volume of the first entry.
See 19 C.F.R. § 351.214(b)(2)(iv). It is undisputed that
Marvin’s initial request did not contain this information
because it failed to disclose the September 2010 entries
and asserted that a later date (June 20, 2011) was the
date of first entry. Although Marvin ultimately provided
correct information to Commerce, it did so after Com-
merce had instituted the new shipper review. Hence, the
late information did not operate to make Marvin “eligible”
for a new shipper review because a review had already
been initiated, for a period not covering the September
2010 entries, based on the defective initial request.
Accordingly, Commerce’s determination that Marvin was
not eligible for new shipper review is supported by sub-
stantial evidence and not contrary to law.
    Marvin argues in the alternative that “eligibility” for
a new shipper review depends solely on meeting the
conditions provided in the statute: not having exported
the subject merchandise during the investigation period
or being affiliated with someone who did. See 19 U.S.C.
§ 1675(a)(2)(B)(i)(I)-(II). According to Marvin, Com-
merce’s regulation imposing additional eligibility re-
quirements improperly limits Marvin’s statutory right to
obtain a new shipper review. In other words, we are faced
8                       MARVIN FURNITURE (SHANGHAI)   v. US

with the question of whether Commerce’s rescission of
Marvin’s new shipper review on the basis that the initial
request did not include the date and volume of the first
consumption entry was a proper interpretation of the
statute under Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837 (1984).
     Under the Chevron framework, we first must deter-
mine “whether Congress has directly spoken to the pre-
cise question at issue.” Chevron, 467 U.S. at 842. Here,
the “precise question at issue” is whether Commerce may
rescind the initiation of a new shipper review on grounds
that the initial review request failed to establish the
correct date and volume of the first entry of subject mer-
chandise. Our review of Section 1675 indicates that
Section 1675 does not address this precise issue. There-
fore, our next question is “whether the agency’s answer is
based on a permissible construction of the statute.” Id. at
843. If Commerce’s interpretation is reasonable, Chevron
requires us to accept the agency’s construction, “even if
the agency’s reading differs from what the court believes
is the best statutory interpretation.” Nat’l Cable & Tele-
comm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980
(2005). As discussed below, we hold that Commerce’s
interpretation of the statute is reasonable.
    Congress left it to Commerce to establish the proce-
dures necessary to conduct new shipper reviews. The
statute mandates that Commerce “shall” establish, within
the prescribed amount of time, an individual duty rate for
an exporter or producer who has demonstrated that it did
not export subject merchandise during the period of
investigation or was affiliated with someone who did. See
19 U.S.C. § 1675(a)(2)(B)(i)-(ii).   The only procedural
requirement imposed by the statute is that Commerce
make its preliminary and final determinations within the
time limits of § 1675(a)(2)(B)(iv). To fulfill its mandate,
Commerce exercised appropriate authority to promulgate
the procedural requirement that the request for a new
MARVIN FURNITURE (SHANGHAI)   v. US                       9

shipper review establish the date on which the goods
covered under the outstanding antidumping duty order
first entered the U.S. market for consumption. See Nat’l
Cable, 545 U.S. at 982 (“Chevron’s premise is that it is for
agencies, not courts, to fill statutory gaps.”).
     Here, given that Commerce must conduct a new ship-
per review within a determined amount of time, it is
reasonable for Commerce to require data on a new ship-
per’s first entry of subject merchandise as a prerequisite
for initiation of a new shipper review. As the Trade Court
noted, the required information “provides the basis upon
which Commerce can undertake the review and calculate
an individual dumping rate.” Marvin Furniture, 867 F.
Supp. 2d at 1308. Requiring that such fundamental
information be included in the initial request not only
assists Commerce in fulfilling its statutory obligation to
conduct a review in a timely manner, it also ensures that
a new shipper review is initiated, and that an individual
rate is accurately determined, on the basis of all relevant
entries.
     The one-year regulatory period also ensures that new
shipper reviews are granted to exporters and producers
that are entering the U.S. market for the first time.
These are the only exporters and producers that are
entitled to receive the statutory benefit of being able to
post a bond and avoid paying cash deposits during the
course of a review. See 19 U.S.C. § 1675(a)(2)(B)(iii).
Accordingly, we see no reason why this Court should
revise Commerce’s requirements for instituting new
shipper reviews. Commerce’s treatment of the documen-
tation required under 19 C.F.R. § 351.214(b)(2)(iv) as an
eligibility requirement is reasonable, and its rescission of
Marvin’s new shipper request is not contrary to law.
    Marvin argues that its failure to comply with the reg-
ulation was harmless error because the only purpose of
requiring documentation is to determine compliance with
10                      MARVIN FURNITURE (SHANGHAI)   v. US

the one-year requirement, which Marvin argues it still
met even considering the September 2010 entries. We
disagree. The error was not harmless because it led
Commerce to institute the new shipper review for a period
from January 1 through June 30, 2011. The September
2010 entries could not have been investigated because
they were outside the period of review. Regardless of
whether the error was unintentional or not, the result
was the institution of a new shipper review covering less
than all relevant entries necessary to determine an accu-
rate individual rate. We agree with the Trade Court that
Commerce did not err in applying the express provisions
of the regulation and determining that a “facially infirm”
request is proper grounds for rescinding a new shipper
review.
     Finally, we affirm the Trade Court’s determination
that 19 U.S.C. § 1677m is inapplicable because Marvin’s
request for a new shipper review was not filed in “re-
sponse to a request for information.” See 19 U.S.C.
§ 1677m(d) (providing that Commerce shall provide an
opportunity to remedy deficient submissions if “a response
to a request for information . . . does not comply with the
request”). Marvin’s defective initial request was filed of
its own accord.
                       CONCLUSION
    We hold that Commerce’s rescission of a new shipper
review based on a failure to establish in the initial re-
quest for the review the correct date and volume of first
entry of subject merchandise is a reasonable interpreta-
tion of the statute and its regulations, and a proper exer-
cise of Commerce’s regulatory authority. The Trade
Court’s decision affirming Commerce’s rescission of
Marvin’s new shipper review is
                      AFFIRMED
MARVIN FURNITURE (SHANGHAI)   v. US       11

                         COSTS
   Each party shall bear its own costs.