Court Opinion

ID: 820150
Source: CourtListenerOpinion
Date Created: 2013-02-10 19:36:37.610597+00
Date Added: 2024-06-11T09:03:02.796308
License: Public Domain

Slip Op. 12-60

               UNITED STATES COURT OF INTERNATIONAL TRADE

 HOME PRODUCTS INTERNATIONAL,
 INC.,

                            Plaintiff,                    Before: Leo M. Gordon, Judge

       v.                                                 Consol. Court No. 11-00104

 UNITED STATES,

                            Defendant.

                                 OPINION and ORDER

[Remand results sustained; Defendant-Intervenor’s motion for reconsideration denied;
Plaintiff’s motion for reconsideration granted.]

                                                                         Dated: May 3, 2012

        Frederick L. Ikenson, Larry Hampel, Blank Rome LLP, of Washington, DC for
Plaintiff Home Products International, Inc.

       Carrie A. Dunsmore, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, D.C. for Defendant United States. With her
on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director
and Patricia M. McCarthy, Assistant Director. Of counsel on brief was, Rachael W.
Nimmo, Office of the Chief Counsel for Import Administration, International Department
of Commerce of Washington, D.C. for Defendant United States.

      William E. Perry, Emily Lawson, Dorsey & Whitney LLP, of Seattle WA, for
Defendant-Intervenor Since Hardware (Guangzhou) Co., Ltd.

      Gordon, Judge: This consolidated action involves an administrative review

conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty

order covering Floor-Standing, Metal-Top Ironing Tables from China.              See Floor-

Standing, Metal-Top Ironing Tables and Certain Parts Thereof from the People’s

Republic of China, 76 Fed. Reg. 15,295 (Dep’t of Commerce Mar. 21, 2011) (final
Consol. Court No. 11-00104                                                     Page 2

results admin. review) (“Final Results”); see also Issues and Decision Memorandum for

Ironing   Tables   from    China,   A-570-888    (Mar.   14,   2011),   available   at

http://ia.ita.doc.gov/frn/summary/PRC/2011-6560-1.pdf (last visited May 3, 2012)

(“Decision Memorandum”).

      Before the court are the Final Results of Redetermination (“Remand Results”),

Mar. 14, 2012, ECF No. 83, filed by Commerce pursuant to Home Products Int’l, Inc. v.

United States, 36 CIT ___, 810 F. Supp. 2d 1373 (Jan. 6, 2012) (“Home Products”).

Also before the court are two motions for reconsideration, one filed by Since Hardware

(Guangzhou) Co., Ltd. (“Since Hardware”) seeking vacatur of (1) this court’s order in

Home Products sustaining Commerce’s selection of surrogate financial statements

(because Since Hardware failed to timely file an administrative case brief and exhaust

administrative remedies), Home Products, 36 CIT ___, 810 F. Supp. 2d at 1377, and (2)

this court’s order deeming waived Since Hardware’s challenge to Commerce’s

surrogate value determination for brokerage and handling, Memorandum and Order,

Jan. 3, 2012, ECF No. 62 , as amended Jan. 4, 2012, ECF No. 63 (“Memorandum and

Order”). Home Products International, Inc. (“HPI”) filed the other motion and seeks

reconsideration of the court’s order in Home Products sustaining Commerce’s decision

to value Since Hardware’s carton input using market economy prices, Home Products,

36 CIT at ___, 810 F. Supp. 2d at 1376-77.
Consol. Court No. 11-00104                                                          Page 3

      The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of

1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006),1 and 28 U.S.C. § 1581(c)

(2006). For the reasons set forth below, the Remand Results are sustained, Since

Hardware’s motion for reconsideration is denied, and HPI’s motion for reconsideration is

granted.

                                   I. Remand Results

      In the Final Results Commerce calculated the surrogate hourly wage rate using

ISIC Revision 3 data from Ecuador, Egypt, Indonesia, Jordan, the Philippines, Peru,

Thailand, and the Ukraine. ISIC Revision 3, however, did not contain data from India,

the primary surrogate country. It was this specific issue—Commerce’s decision to use

only ISIC Revision 3 data and thereby exclude labor data from the primary surrogate

country—that the court remanded to Commerce. Home Products, 36 CIT at ___, 810 F.

Supp. 2d at 1379-80. In discussing the necessity of a remand, the court noted the

persuasiveness of a block-quoted passage from Shandong Rongxin Imp. & Exp. Co. v.

United States, 35 CIT ___, ___, 774 F. Supp. 2d 1307, 1315 (2011), which addressed

an identical issue and explained the potential unreasonableness of Commerce using

only ISIC Revision 3 data and excluding Indian labor data.           The Shandong court

remanded the issue to Commerce to “explain why the need for consistency across ISIC

revisions predominates over the need for a broad basket of countries to value labor,” or

“to review which qualifying countries have reported data under a prior ISIC revision

1
 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions
of Title 19 of the U.S. Code, 2006 edition.
Consol. Court No. 11-00104                                                       Page 4

which satisfy the agency’s other requirements.” Shandong, 35 CIT at ___, 774 F. Supp.

2d at 1315.   Likewise, here, the court directed Commerce to address the “specific

issues” quoted from Shandong, “and if necessary, include Indian data in its calculation.”

Home Products, 36 CIT at ___, 810 F. Supp. 2d at 1380.

      On remand, Commerce included Indian data in its surrogate labor calculation,

using data from ISIC Revisions 2 & 3 (Commerce also included labor data from

Nicaragua, as well as from the eight countries used in the Final Results). Remand

Results at 3-4. As a result, Since Hardware’s margin changed from 67.37 percent to

66.06 percent. Id. at 12. Since Hardware challenges two aspects of the Remand

Results: First, that Commerce erred by limiting the remand proceeding to one issue

raised in Shandong (ISIC Revision 3 and the exclusion of Indian data); and second, that

Commerce should have applied its new labor wage rate policy, Antidumping

Methodologies in Proceedings Involving Non–Market Economies: Valuing the Factor of

Production: Labor, 76 Fed. Reg. 36,092 (June 21, 2011) (“New Labor Wage Rate

Policy”). Neither of these arguments is persuasive.

      Since Hardware contends that the Remand Results are in error because

Commerce did not address all of the issues raised and addressed by the court in

Shandong. Since Hardware’s Comments on Remand Results at 3-5, Consol. Court No.

11-00104, Apr. 4. 2012, ECF No. 90 (“Since Hardware’s Comments”). Since Hardware,

however, has misread Home Products and the scope of the remand order. The remand

was directed to the limited question of whether Commerce properly excluded labor data

from countries that reported under ISIC Revision 2. Home Products, 36 CIT at ___, 810
Consol. Court No. 11-00104                                                       Page 5

F. Supp. 2d at 1379 (“Since Hardware does raise one issue from Commerce’s labor

wage rate determination that merits a remand: Commerce’s selection of the industry-

specific data from [ISIC].”) (emphasis added).       The court’s block quotation from

Shandong relates exclusively to the issue of whether Commerce reasonably excluded

ISIC Revision 2 data, and addresses no other aspects of Commerce’s labor wage rate

valuation. Id. Commerce therefore was not required to address broader aspects of the

labor calculation implicated in Shandong.

      Since Hardware also argues that on remand Commerce should have applied its

New Labor Wage Rate Policy——a methodology not in effect at the time of the Final

Results. Since Hardware’s Comments at 5-8. Although the court understands Since

Hardware’s desire to obtain the benefit of this new policy, the court cannot direct

Commerce by affirmative injunction to apply that policy retroactively to this proceeding.

See, e.g., Laizou Auto Brake Equip. Co. v. United States, 32 CIT 711, 722 (2008) (“At

the time the new methodology is finalized and effective, it becomes the best available

information, but until that point, Commerce must be granted some discretion to assess

the advantages and disadvantages of applying a work-in-progress methodology in place

of an existing one.”). And because the court cannot mandate that Commerce must as a

matter of law use only Indian labor data, Home Products, 36 CIT at ___, 810 F. Supp.

2d at 1378, Since Hardware had to establish as a factual matter that “India, and India

alone, is both economically comparable to China and a significant producer of

comparable merchandise.” Id. That would have entailed an analysis (and presentment

to the court) of record information detailing the (1) economic comparability and (2)
Consol. Court No. 11-00104                                                        Page 6

production of comparable merchandise, for each country used by Commerce in its labor

analysis—demonstrating that India alone was the one, correct choice for labor data.

Since Hardware, though, did not attempt that “specific argument.” Id. With that said,

the   Remand     Results   are   thorough,   complete,    and   resolve    any   potential

unreasonableness in Commerce’s utilization of the ISIC data. The Remand Results

must therefore be sustained.

                   II. Since Hardware Motion for Reconsideration

      Since Hardware has also filed a motion for reconsideration pursuant to USCIT

Rule 59 seeking vacatur of (1) this court’s order in Home Products sustaining

Commerce’s selection of surrogate financial statements (because Since Hardware

failed to timely file an administrative case brief and exhaust administrative remedies),

Home Products, 36 CIT at ___, 810 F. Supp. 2d at 1377, and (2) this court’s order

deeming waived Since Hardware’s challenge to Commerce’s surrogate value

determination for brokerage and handling, Memorandum and Order, Consol. Court No.

11-00104, Jan. 3, 2012, ECF No. 62.

      Disposition of a Rule 59 motion is “within the sound discretion of the court.”

USEC, Inc. v. United States, 25 CIT 229, 230, 138 F. Supp. 2d 1335, 1336 (2001).

Such motions are not granted to permit an unsuccessful party to re-litigate a case, but

are granted in order “to address a fundamental or significant flaw in the original

proceeding.” Id. To that end, “a court’s previous decision will not be disturbed unless it

is ‘manifestly erroneous.’” Id., 25 CIT at 230, 138 F. Supp. 2d at 1337.
Consol. Court No. 11-00104                                                        Page 7

                     A. Surrogate Country Financial Statements

      Shortly after Since Hardware commenced its action (Court No. 11-00105,

consolidated with Court No. 11-00104), HPI filed a motion to dismiss Since Hardware’s

complaint pursuant to USCIT Rule 12(b)(5). See HPI Mot. to Dismiss, Court No. 11-

00105, May 26, 2011, ECF No. 27         (“HPI Mot. to Dismiss”).    Count One of Since

Hardware’s complaint challenges Commerce’s selection and use of financial statements

used to derive financial ratios to value overhead, SG&A, and profit.          See Since

Hardware Compl. ¶ 12, Court No. 11-00105, Apr. 28, 2011, ECF No. 9 (“Since

Hardware Compl.”). In its motion to dismiss, HPI explained that Since Hardware failed

to timely file its administrative case brief, which Commerce therefore did not consider in

its deliberations. HPI Mot. to Dismiss at 2 (citing Decision Memorandum at 2, n.1). HPI

further explained that HPI in its administrative case brief did not challenge or even

mention Commerce’s surrogate financial ratios (for factory overhead, SG&A expenses,

and profit), and that Since Hardware therefore said nothing at all on this subject in its

rebuttal brief because Since Hardware “had nothing to rebut.” Id. at 3.

      HPI then argued that Count One must be dismissed because Since Hardware

had failed to raise the issue at the administrative level when it had the opportunity. Id.

at 6-9 (“[Since Hardware] did not file a Case Brief. Its failure deprived HPI of the

opportunity to respond to [Since Hardware’s] arguments; it failed to permit the

development of a record suitable for administrative review let alone judicial review. It

failed to present an issue for [Commerce] to decide and yet it now urges the Court, in

Count One of its Complaint, to conclude that [Commerce’s] decision, although not
Consol. Court No. 11-00104                                                      Page 8

challenged administratively, should be set aside as being unsupported by substantial

evidence or otherwise not in accordance with law.”). During a conference call with the

parties, the court denied HPI’s motion without prejudice because it created an unusual

procedural posture for trade actions under 28 U.S.C. § 1581(c) and USCIT Rule 56.2

(which typically do not involve USCIT Rule 12(b)(5) motions). See Order, Court No. 11-

00105, June 21, 2011, ECF No. 33. The court then circulated a proposed scheduling

order that, among other things, sought to confirm “that [Since Hardware] has

appropriately exhausted its administrative remedies by presenting its arguments to the

agency in the first instance.” See Letter and draft Scheduling Order at 2, Consol. Court

No. 11-00104, June 23, 2011, ECF No. 20. Without objection, the court entered the

scheduling order. Scheduling Order, Consol. Court No. 11-00104, June 28, 2011, ECF

No. 22 (“Scheduling Order”).

       When Since Hardware filed its opening brief, it disregarded the exhaustion

problem, plunging right into the merits of Commerce’s financial statement selection.

See Since Hardware’s Mem. in Supp. of R. 56.2 Mot. 12-16, Aug. 18, 2011, ECF No. 30

(“Since Hardware Br.”). Since Hardware committed this omission despite knowing it

had an exhaustion problem (carefully detailed in HPI’s motion to dismiss), and contrary

to the clear direction in the Scheduling Order that Plaintiff have “appropriately

exhausted its administrative remedies by presenting its arguments to the agency in the

first instance.”   Scheduling Order at 2.   It was not until its reply brief that Since

Hardware argued that it had raised the issue with Commerce, Since Hardware Reply Br.

at 6, Nov. 17, 2011, ECF No. 51, even though it had not, as HPI explained in its motion
Consol. Court No. 11-00104                                                        Page 9

to dismiss. Since Hardware then suggested that the court “use its discretion and waive

the exhaustion requirement.” Id. Since Hardware assumed, without citation, that the

court may simply waive Commerce’s regulation establishing deadlines for case briefs,

19 C.F.R. § 351.309(c)(2), without first reviewing whether Commerce’s enforcement of

its deadlines constitutes an abuse of discretion.

       Needless to say, the court sustained Commerce’s financial statement selection:

                      Since Hardware only filed a rebuttal brief during the
               administrative proceeding and did not challenge
               Commerce's selection of surrogate financial statements.
               See November 17, 2010 Letter from Since Hardware to
               Commerce, PR 83. In its brief before the court, Since
               Hardware raises for the first time issues relating to the
               selection of surrogate financial statements, issues that it
               could have raised before the agency in its case brief. Since
               Hardware has therefore failed to exhaust its administrative
               remedies. See 28 U.S.C. § 2637(d); Carpenter Tech. Corp.
               v. United States, 30 CIT 1373, 1374–75, 452 F. Supp. 2d
               1344, 1346 (2006) (citing Woodford v. Ngo, 548 U.S. 81,
               88–90 (2006)); see also 19 C.F.R. § 351.309(c)(2).
               Accordingly, Commerce's selection of financial statements is
               sustained.

Home Products, 36 CIT at ___, 810 F. Supp. 2d at 1377. There is no manifest error in

this ruling.   Since Hardware nevertheless introduces an entirely new argument as

support for its reconsideration request.      Admitting an “administrative mistake” by

counsel that caused the late filing of its case brief, Since Hardware now argues for the

first time that “Commerce . . . abused its discretion in refusing to accept the Case Brief

of Since Hardware.” Since Hardware’s Mot. for Reconsideration 3-4, Consol. Court No.

11-00104, Feb. 2, 2012, ECF No. 71. Defendant observes in response, “With no small

amount of irony, Since Hardware attempts to resuscitate its denial that it failed to
Consol. Court No. 11-00104                                                       Page 10

exhaust its administrative remedies by raising yet another argument that it failed to

exhaust.” Def.’s Resp. to Since Hardware’s Mot. for Reconsideration 2, Consol. Court

No. 11-00104, Mar. 3, 2012, ECF No. 81.

         During the administrative review Commerce notified interested parties that

administrative case briefs were due on November 15, 2010. See Memorandum from

Analyst to File, Nov. 3, 2010, P.R. 80.2 Since Hardware failed to meet that deadline.

Commerce considered Since Hardware’s explanation for its tardiness, was not

persuaded, and rejected its submission. See Letter from Law Firm of Dorsey Whitney

to Commerce, Nov. 17, 2010, P.R. 83; Letter from Program Manager/IA to Law Firm of

Dorsey Whitney Rejecting Submission, Nov. 22, 2010, P.R. 85. Before the court Since

Hardware did not challenge Commerce’s rejection of its untimely-filed case brief. See

Since Hardware Compl., Court No. 11-00105; Since Hardware Br., Consol. Court No.

11-00104, Aug. 18, 2001, ECF No. 30. Since Hardware waited until after the decision in

Home Products to complain about this aspect of the administrative process. This is too

late. Since Hardware abandoned this claim by not raising it in its complaint and opening

brief. See USCIT R. 8 Practice Comment (“For an action described in 28 U.S.C. §

1581(c), the complaint shall contain: . . . (2) a statement of the issues presented by the

action . . . .”); see also USCIT R. 56.2(c).

         Since Hardware offers no excuse for its failure to raise this issue in the normal

course of the litigation. Instead, Since Hardware requests reconsideration because of

2
    “P.R.” refers to a document in the public administrative record.
Consol. Court No. 11-00104                                                        Page 11

an “intervening change in the controlling law, . . . .”        Since Hardware Mot. for

Reconsideration at 3, Consol. Court No. 11-00104, Feb. 2, 2012, ECF No. 71 (citing

Grobest & I-Mei Indus. v. United States, 36 CIT ___, ___, 815 F. Supp. 2d 1342, 1364

(Jan. 18, 2012)). Grobest, however, is not an intervening change in controlling law.

Grobest applied existing law to review Commerce’s enforcement of procedural

deadlines for an abuse of discretion. Grobest, 36 CIT at ___, 815 F. Supp. 2d at 1364-

67.   Like the plaintiff in Grobest, who vigorously and repeatedly contested before

Commerce the rejection of an untimely separate rate certification, and who then before

the court both pled and briefed that same issue, Since Hardware was free to (1)

challenge before Commerce the rejection of its case brief; (2) allege in its complaint that

Commerce committed an abuse of discretion by rejecting Since Hardware’s case brief;

and (3) brief that allegation with detailed legal and factual support in its motion for

judgment on the agency record pursuant to USCIT Rule 56.2. That approach would

have allowed Commerce and HPI to respond, first at the administrative level, to Since

Hardware’s arguments (perhaps resolving the issue at that point), and then again before

the court with their own legal and factual arguments. The court would then have had

ample opportunity to review the record and evaluate Since Hardware’s argument, as the

court did in Grobest. Since Hardware instead chose to abandon the issue, first at the

administrative level, and then again before the court (immediately challenging the merits

of Commerce’s financial statement selection). In so doing Since Hardware disregarded

a basic principle of judicial review of administrative decisions (despite the specific
Consol. Court No. 11-00104                                                  Page 12

reminders of that principle provided in HPI’s motion to dismiss and the Scheduling

Order).

      For the foregoing reasons Since Hardware’s motion to reconsider this court’s

order in Home Products sustaining Commerce’s selection of surrogate financial

statements (because Since Hardware failed to timely file an administrative case brief

and exhaust administrative remedies), Home Products, 36 CIT at ___, 810 F. Supp. 2d

at 1377, is denied.

                               B. Brokerage and Handling

      Since Hardware also moves for reconsideration of this court’s order deeming

waived Since Hardware’s challenge to Commerce’s surrogate value determination for

brokerage and handling (“B&H”). In that order the court had to deem waived Since

Hardware’s challenge to Commerce’s brokerage and handling calculation because it

was too cursory to warrant the court’s consideration:

                     Although Since Hardware challenges Commerce’s
             B&H calculation, it does so in a threadbare manner, without
             citation to any authority:

                      DOC’s B&H calculation is unsupported and is
                      in error. As HPI recognized in its comment,
                      “there is no direct evidence as to the packed,
                      cubic volume of product (and corresponding
                      weight).” Use by DOC of the HPI’s weight
                      cannot be supported.          DOC has not
                      established a correlation between the cost for
                      B&H with the decreased shipment weight. The
                      B&H costs are to be based on the product
                      being shipped. The surrogate cost utilized by
                      DOC is linked to that surrogate weight shipped,
                      not HPI’s constructed weight. Failure to utilize
Consol. Court No. 11-00104                                                        Page 13

                   the accompanying surrogate shipped weight
                   impermissibly distorts the B&H calculation.

            Since Hardware Br. at 11-12. Missing is any effort at
            identifying standards against which the court can evaluate
            the reasonableness of Commerce’s B&H calculation (e.g.,
            how Commerce typically calculates B&H in the non-market
            economy context, etc.). Since Hardware’s “argument” is all
            the more difficult to countenance because the Scheduling
            Order specifically cautioned against just such a submission:

            Be advised that the court will not permit plaintiff to shift to the
            court and the other parties the burden of establishing the
            ossature for plaintiff’s arguments against the standard of
            review the court applies to resolve them. Instead, the court
            will summarily sustain Commerce’s action.

            Scheduling Order at 4, ECF No. 22. Rule 56.2(c)(2) requires
            that briefs “must include the authorities relied on and the
            conclusions of law deemed warranted by the authorities.”
            USCIT R. 56.2(c)(2). As Since Hardware has failed to
            satisfy this basic requirement, and abide by the express
            instructions of the Scheduling Order, the court deems this
            issue waived and sustains Commerce’s B&H calculation.
            See MTZ Polyfilms, Ltd. v. United States, 33 CIT ___, ___,
            659 F. Supp. 2d 1303, 1308-09 (2009); Fujian Lianfu
            Forestry Co. v. United States, 33 CIT ___, ___, 638 F. Supp.
            2d 1325, 1350 (2009); United States v. Zannino, 895 F.2d 1,
            17 (1st Cir. 1990) (“[I]ssues adverted to in a perfunctory
            manner, unaccompanied by some effort at developed
            argumentation, are deemed waived. It is not enough merely
            to mention a possible argument in the most skeletal way,
            leaving the court to do counsel's work, create the ossature
            for the argument, and put flesh on its bones.”) (internal
            citations omitted).

Memorandum and Order 1-3.          In its motion for reconsideration Since Hardware

concedes that its argument for brokerage and handling was inadequate, but blames the
Consol. Court No. 11-00104                                                         Page 14

page limits contained in the Scheduling Order as the cause. This apologia rings hollow.

On June 23, 2011, the court sent a letter to the parties with a draft scheduling order.

Letter to Parties, Consol. Court No. 11-00104, June 23, 2011, ECF No. 20. That letter

asked the parties to confer with one another on “proposed dates and page limits set

forth in the attached draft scheduling order.” Id. (emphasis added). It also advised the

parties to notify the court’s case manager if they had any requested revisions to the

draft scheduling order. Id. Since Hardware offered no changes to the proposed page

limits. The Scheduling Order also contained the following proviso: “3. Page Limits. If

the parties are unable to brief this matter within the page limits set forth above, they are

encouraged to file a motion for additional time (preferably on consent) rather than for

additional pages.” Scheduling Order at 4. Since Hardware did not file a motion for

additional time, or a motion for additional pages.

       A separate revelation from a related case also casts serious doubt upon Since

Hardware’s “page limits” excuse. In a case involving the subsequent administrative

review (commenced shortly after this action), the court entered a scheduling order with

no specific page limits. In that action Since Hardware filed the identical brokerage and

handling argument, verbatim (except for one word).         See Since Hardware Mem. of

Points and Authorities in Supp. of R. 56.2 Mot. at 11, Consol. Court No. 11-00106,

Sept. 8, 2011, ECF No. 42.       Whatever the cause of Since Hardware’s inadequate

submission, “page limits” evidently were not it.
Consol. Court No. 11-00104                                                   Page 15

      There being no manifest error in the court’s order deeming Since Hardware’s

brokerage and handling argument waived, the court must deny Since Hardware’s

motion for reconsideration.

                         III. HPI Motion for Reconsideration

      HPI has also filed a motion for reconsideration of the court’s order sustaining

Commerce’s decision to value Since Hardware’s carton input using market economy

prices, Home Products, 36 CIT at ___, 810 F. Supp. 2d at 1376-77.          In its brief

challenging Commerce’s determination, HPI noted that Commerce “may have

misunderstood [its] argument.” HPI Br. in Support of Mot. for J. on Agency Rec. at 5,

Consol. Court No. 11-00104, June 18, 2011, ECF No. 29 (“HPI Br.”). To be candid, the

court did not fully grasp HPI’s argument either. The court found Defendant’s response

more understandable: “Since Hardware reported the carton input as one factor, Since

Hardware treats the input as one factor, and Commerce verified Since Hardware’s input

as one factor.” Def.’s Resp. to Pls.’ Mot. for J. on Agency R. at 18-19, Consol. Court

No. 11-00104, Oct. 20, 2011, ECF No. 43.         The court, however, misinterpreted

Defendant’s argument to mean that Since Hardware purchased its cartons as one

factor. This was an important predicate of the court’s decision in Home Products. See

Home Products, 36 CIT at ___, 810 F. Supp. 2d at 1376-77 (“the court cannot identify

any record evidence that demonstrates that Since Hardware purchased cartons as two

inputs (cartons and corrugated paper)).” That predicate, however, is incorrect. The

court now understands that Since Hardware separately purchased cartons and

corrugated paper, but accounted for them as one carton input, by piece.        HPI is
Consol. Court No. 11-00104                                                      Page 16

therefore correct in its motion that the court “overlooked our argument, or in any event

misunderstood it.” HPI Mot. for Reh’g at 3, Consol. Court No. 11-00104, Jan. 9, 2012,

ECF No. 65.

      Having a somewhat more complete understanding of HPI’s argument, the court

agrees that this issue needs to be remanded to Commerce for further explanation.

What makes this issue challenging is the carton input’s two-component nature, cartons

and corrugated paper, each with their own prices and weights, each being sourced from

market and non-market economy suppliers.          Adding to the complexity is Since

Hardware’s accounting treatment for the input, resulting in “pieces” of carton (which may

be either carton or corrugated paper). Further complicating matters is the “conversion

factor” that Since Hardware applied to calculate the market economy threshold, for

which a detailed public explanation is not possible without divulging Since Hardware’s

confidential business proprietary information.

      Although Commerce concluded in the Decision Memorandum that “there is

nothing on the record to suggest that Since Hardware’s reported conversion factor is

unreasonable,” Decision Memorandum at 11, HPI appears to raise a legitimate concern

that may test the reasonableness of the conversion factor.       HPI questions whether

Since Hardware’s carton accounting is suitable for Commerce’s market economy test,

explaining that because a “piece” may have different weights or costs from other

“pieces,” a “piece” cannot constitute a constant variable to measure the “volume” or

“amount” of cartons under Commerce’s market economy test. The upshot is that unless

Commerce applies a constant variable when measuring the “volume” or “amount” of
Consol. Court No. 11-00104                                                     Page 17

cartons from each of the market and non-market sources, the resulting percentage of

market economy purchases may likely be inaccurate (if not altogether meaningless).

HPI amplifies this explanation with a representative problem of Since Hardware’s input

accounting and conversion factor:

                Under Since Hardware’s technique . . . if there were a
                universe of three items—two pieces of ME-originating
                corrugated paper, each weighing ten grams, and one NME-
                originating carton weighing 400 grams, Since Hardware
                would contend that [Commerce’s] 33 percent threshold has
                been met: since each of the three items would have an
                assigned weight of 140 grams (420/3), the two pieces of ME-
                originating corrugated paper would constitute 66 percent of
                all POR purchases, thereby satisfying the Department’s 33
                percent test. Indeed, even a single 10-gram piece of ME-
                originating corrugated paper would suffice to satisfy that
                test[.]

HPI Br. at 5.

       HPI’s explanation does seem to test the reasonableness of Since Hardware’s

conversion factor, and by extension, Commerce’s conclusion that Since Hardware

satisfied the 33 percent market economy threshold. The court, though, cannot evaluate

the reasonableness of Commerce’s decision-making reflected in one conclusory

sentence in the Decision Memorandum. To adequately review this issue, the court

needs Commerce to further elucidate its conclusion that Since Hardware’s market

economy carton purchases do indeed exceed 33 percent of the total volume of Since

Hardware’s carton purchases during the period of review.        The court will therefore

remand this issue to Commerce to provide that explanation.
Consol. Court No. 11-00104                                                 Page 18

                                    IV. Conclusion

      For the foregoing reasons, it is hereby

            ORDERED that the Remand Results are sustained; it is further

            ORDERED that Since Hardware’s Motion for Reconsideration, ECF
      No. 71, is denied; it is further

            ORDERED that HPI’s Motion for Reconsideration, ECF No. 65, is
      granted, and this action is remanded to Commerce to further explain its
      conclusion that Since Hardware’s market economy carton purchases
      exceed 33 percent of the total volume of Since Hardware’s carton
      purchases during the period of review; it is further

            ORDERED that Commerce shall file its remand results on or before
      June 19, 2012; and it is further

              ORDERED that, if applicable, the parties shall file a proposed
      scheduling order with page limits for comments on the remand results no
      later than seven days after Commerce files its remand results with the
      court.

                                                      /s/ Leo M. Gordon
                                                     Judge Leo M. Gordon

Dated: May 3, 2012
       New York, New York
                                          ERRATA

Home Products International, Inc. v. United States., Consol. Court No. 11-00104,
Slip Op. 12-60, dated May 3, 2012.

Page 8:       In line 7, replace “[Since Hardware]” with “plaintiff”.

May 4, 2012