Court Opinion

ID: 820101
Source: CourtListenerOpinion
Date Created: 2013-02-10 19:36:09.801389+00
Date Added: 2024-06-11T09:09:55.267130
License: Public Domain

Slip Op. 12-109

            UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Nicholas Tsoucalas, Senior Judge
___________________________________
MARVIN FURNITURE (SHANGHAI) CO.     :
LTD.,                               :
                                    :
          Plaintiff,                :
                                    :
      v.                            :         Court No.: 12-00100
                                    :
UNITED STATES,                      :
                                    :
          Defendant,                :
                                    :
      and                           :
                                    :
AMERICAN FURNITURE MANUFACTURERS    :
COMMITTEE FOR LEGAL TRADE and       :
VAUGHAN-BASSETT FURNITURE           :
COMPANY, INC.,                      :
                                    :
          Defendant-Intervenors.    :
                                    :

                              OPINION

Held: The Department of Commerce’s decision to rescind a new shipper
review is affirmed.

                                              Dated: August 23, 2012

     Neville Peterson, LLP, (John M. Peterson and Richard F. O’Neill)
for Marvin Furniture (Shanghai) Co. Ltd., Plaintiff.

     Stuart F. Delery, Acting Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director, Civil
Division, United States Department of Justice, (Carrie A. Dunsmore);
Shana Hofstetter, Of Counsel, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, for the United
States, Defendant.

     King & Spalding, LLP, (Joseph W. Dorn, J. Michael Taylor, and P.
Lee Smith) for American Furniture Manufacturers Committee for Legal
Trade and Vaughan-Bassett Furniture Company, Inc., Defendant-
Intervenors.
 Court No. 12-00100                                                        Page 2

      TSOUCALAS, Senior Judge: This matter comes before the Court upon

the   Motion   for   Judgment    on   the   Agency   Record   filed      herein   by

Plaintiff, Marvin Furniture (Shanghai) Co. Ltd. (“Marvin”).                 Marvin

challenges the Department of Commerce’s (“Commerce”) decision to

rescind a new shipper review it had initiated of certain entries made

by Marvin of wooden bedroom furniture.           Marvin asserts that because

it timely requested a new shipper review for which it was otherwise

eligible, Commerce’s rescission was not supported by substantial

evidence or in accord with the law.            Defendant, United States and

Defendant-Intervenors, American Furniture Manufacturers Committee for

Legal Trade and Vaughan-Bassett Furniture Company, Inc. (collectively

“AFMC”), argue that Marvin, in fact, did not meet the prerequisites

necessary for a new shipper review, and that Commerce’s decision was

therefore supported by substantial evidence and in accord with the

law. The Court concludes that Commerce’s rescission was supported by

record   evidence    and   a    reasonable    application     of   the    relevant

statutory and regulatory provisions, and affirms the determination.

                                   BACKGROUND

      In 2005, the United States Department of Commerce (“Commerce”)

issued an antidumping duty order on wooden bedroom furniture from the

People’s Republic of China (“PRC”).             See Notice of Amended Final

Determination of Sales at Less Than Fair Value and Antidumping Duty

Order: Wooden Bedroom Furniture from the People’s Republic of China,

70 Fed. Reg. 329 (Jan. 4, 2005).            Subsequent to the entry of this
 Court No. 12-00100                                           Page 3

order, any party making entries of subject merchandise not assigned

a special rate by Commerce was required to deposit estimated duties

at the PRC-wide rate of 216.01%.

     Marvin manufactures wooden furniture in the PRC, and is owned by

a party who also owns an Australian company named Boori International

Pty. Ltd. (“Boori Int’l”).   Boori Int’l distributes a line of high-

end juvenile furniture that is popular in Australia, the United

Kingdom, Ireland, and several other countries.      In order to begin

selling goods in the United States, the owner established Boori USA,

LLC, and made entries of wooden bedroom furniture into the United

States on June 20, 2011.        Upon making these entries, Boori USA

discovered that it was required to make antidumping duty deposits at

the PRC-wide rate of 216.01%.    In an attempt to obtain a lower rate,

Marvin requested that Commerce initiate a new shipper review of its

entries.   See Letter from Neville Peterson to the Secretary of

Commerce, Re: Request for Initiation of Antidumping New Shipper

Review: Wooden Bedroom Furniture from the People’s Republic of China,

Case Number: A570-890 (July 30, 2011) (“Initiation Request”), Public

Rec. 1, Confidential Rec. 1.1      In the Initiation Request, Marvin

indicated that it had not exported subject merchandise to the United

States prior to June 2011.   Initiation Request, Ex. D.

     Per routine practice, Commerce asked the United States Customs

      1
        Hereinafter all documents in the public record will be
 designated “PR” and all documents in the confidential record
 designated “CR.”
 Court No. 12-00100                                                     Page 4

and Border Protection to confirm that Marvin had not made entries of

subject merchandise prior to the date stated in the Initiation

Request.   This search turned up two entries of goods that had been

made by Marvin in September 2010, and Commerce issued a letter

soliciting comments from the parties regarding these entries.              See

Letter from Import Administration to All Interested Parties (Aug. 19,

2011), PR 14, CR 4.        On August 24, 2011, Marvin responded to

Commerce’s letter stating that while it had made entries in September

2010, the entries were of non-subject merchandise.          See Letter from

Neville Peterson to the Secretary of Commerce, Re: Marvin Furniture

(Shanghai) Co. Ltd.; CBP Data Comments: Wooden Bedroom Furniture from

the People’s Republic of China, New Shipper Review (Aug. 24, 2011),

PR 16, CR 5.       In reliance on Marvin’s August 24, 2011 letter, a

Commerce official signed the initiation notice the following day,

August 25, 2011, and the notice was published 6 days later.                See

Wooden   Bedroom   Furniture   from    the   People’s   Republic   of   China:

Initiation of Antidumping Duty New Shipper Review, 76 Fed. Reg.

54,208 (Aug. 31, 2011).

     Marvin subsequently filed responses to a questionnaire received

from Commerce indicating for the first time that the September 2010

entries had, in fact, contained subject goods, but added that the

goods were entered subject to a provision making them exempt from

payment of antidumping duties.        See Letter from Neville Peterson to

the Secretary of Commerce, Re: Marvin Furniture (Shanghai) Co. Ltd.
 Court No. 12-00100                                              Page 5

And Boori USA Inc.: Response to Supplemental Questionnaire; Wooden

Bedroom Furniture from the People’s Republic of China, Case Number:

A570-890 (Aug. 26, 2011), PR 24, CR 10. Subsequent filings by Marvin

confirmed that the first entry date contained in the Initiation

Request was incorrect, but Marvin maintained that the date of its

first entry of subject merchandise had not occurred more than a year

prior to the filing of the Initiation Request.2      See, e.g., Letter

from Neville Peterson to the Secretary of Commerce, Re: Marvin

Furniture (Shanghai) Co. Ltd. And Boori USA Inc.: Further Response to

Supplemental   Questionnaire:   Wooden   Bedroom   Furniture   from   the

People’s Republic of China (Aug. 31, 2011), PR 29, CR 13.

     Despite Marvin’s assertions that all of its entries were made

within the year prior to filing its Initiation Request, Commerce

issued a preliminary rescission of the new shipper review, Wooden

Bedroom Furniture From the People’s Republic of China: Preliminary

Rescission of Antidumping Duty New Shipper Review, 77 Fed. Reg. 1,456

(Jan. 10, 2012), and ultimately, a final rescission.     Wooden Bedroom

Furniture From the People’s Republic of China: Final Rescission of

Antidumping Duty New Shipper Review, 77 Fed. Reg. 21,536 (Apr. 10,

2012) (“Final Rescission”).     As a basis for its decision to rescind

      2
        The Court notes that neither the Government nor AFMC point
 to evidence in the record indicating that Marvin did import
 subject merchandise into the United States more than a year
 before filing its Initiation Request. The fact that all of
 Marvin’s entries were made within a year prior to the filing of
 the Initiation Request is therefore not in dispute.
 Court No. 12-00100                                                          Page 6

the new shipper review of Marvin’s entries, Commerce stated that it

         continues to find that Marvin Furniture's request for an
         NSR does not meet the requirements for [a new shipper
         review] under 19 CFR 351.214(b)(2)(iv)(A) and (B).
         Specifically, Marvin Furniture's request for [a new
         shipper   review]   did    not   contain   documentation
         establishing the date on which its subject merchandise
         was first entered into the United States for consumption
         and the volume of that first entry.

Final Rescission, 77 Fed. Reg. at 21,537-38.

     On appeal, Marvin argues that it is entitled to a new shipper

review       because    it   complied   with    the    statutory   and   regulatory

requirements for eligibility.              Marvin asserts that even if the

information in its Initiation Request was incorrect, it quickly

notified Commerce of the error.            More importantly, Marvin relies on

the absence in the record of any evidence that it imported subject

merchandise more than an year before making its Initiation Request.

Marvin further asserts that Commerce’s decision to rescind the new

shipper review conflicts with the provisions of Section 782 of the

Tariff Act of 1930, as amended, 19 U.S.C. § 1677m3, which allows for

the correction of erroneous information submitted to Commerce.

     The Government and AFMC counter that Commerce’s decision to

rescind the new shipper review was supported by the record evidence

because, notwithstanding its communications with Commerce, Marvin

never        actually    complied   with       the    statutory    and   regulatory

         3
        All further citations to the Tariff Act of 1930 are to the
 relevant provisions of Title 19 of the United States Code, 2006
 edition.
 Court No. 12-00100                                            Page 7

requirements for initiating a new shipper review.       Specifically,

they argue that Marvin’s Initiation Request was infirm because it

did not sufficiently notify Commerce of the correct first date its

goods were entered, nor did Marvin ever properly document the nature

of its September 2010 entries.     The Government further argues that

Commerce satisfied any relevant obligation it had under § 1677m.

               JURISDICTION and STANDARD OF REVIEW

     The Court has jurisdiction over this matter pursuant to 28

U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii).      The Court

will only disturb Commerce’s determination if it is “unsupported by

substantial evidence or otherwise not in accordance with law.”    19

U.S.C. § 1516a(b)(1)(B)(i).   Substantial evidence is “such relevant

evidence as a reasonable mind might accept as adequate to support a

conclusion.” Huaiyin Foreign Trade Corp. (30) v. United States, 322

F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v.

NLRB, 305 U.S. 197, 229 (1938)).    It is important to note that when

such relevant evidence is present, the Court must always affirm the

agency determination as long as the determination is in accord with

the law.   Where two different conclusions are supported by the

evidence, the Court may not prefer its own to that of the agency.

See Matsushita Elec. Indus. Co., Ltd. v. United States, 750 F.2d

927, 933 (Fed. Cir. 1984).

     Additionally, when considering whether an agency determination

is in accord with the law, the Court must sometimes consider the
 Court No. 12-00100                                                     Page 8

agency’s interpretation of the law in question.          That consideration

is weighed under the guidelines set forth in Chevron, U.S.A., Inc.

v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).                   The

framework set forth in Chevron is well-established:

      Under Chevron, the court first asks whether Congress has
      directly spoken to the precise question at issue; if so,
      the inquiry ends and the Court must give effect to the
      unambiguously expressed intent of Congress.       If the
      statute is silent or ambiguous with respect to the issue,
      the court must ask whether Commerce's interpretation is
      based on a permissible construction of the statute.

 Sahaviriya Steel Indus. Pub. Co. Ltd. v. United States, 649 F.3d

 1371, 1375 (Fed. Cir. 2011) (quotations omitted).                Under this

 standard, “[s]tatutory interpretations articulated by Commerce

 during   its   antidumping   proceedings       are   entitled   to   judicial

 deference . . . .”     Id. at 1374.          A reviewing court “must not

 substitute its own judgment for that of the agency even if the

 court might have preferred another interpretation and even if the

 agency's   interpretation    is    not   the    only   reasonable     one.”

 Wheatland Tube Co. v. United States, 495 F.3d 1355, 1360-61 (Fed.

 Cir. 2007) (citation omitted).

                                   ANALYSIS

      The possibility for a new shipper review derives from 19

 U.S.C. § 1675:

      If the administering authority receives a request from an
      exporter or producer of the subject merchandise
      establishing that -

      (I) such exporter or producer did not export the
      merchandise that was the subject of an antidumping duty
      or countervailing duty order to the United States . . .
Court No. 12-00100                                          Page 9

     during the period of investigation, and

     (II) such exporter or producer is not affiliated (within
     the meaning of section 1677(33) of this title) with any
     exporter or producer who exported the subject merchandise
     to the United States . . . during that period,

     the administering authority shall conduct a review under
     this subsection to establish an individual weighted
     average dumping margin or an individual countervailing
     duty rate (as the case may be) for such exporter or
     producer.

19 U.S.C. § 1675(a)(2)(B)(i).   The purpose of a new shipper review

is to provide an opportunity to an exporter or producer who may be

entitled to an individual antidumping rate, but was not active

during the investigation, to be considered for such a rate.      See

Jining Yongjia Trade Co., Ltd. v. United States, 34 CIT __, __,

Slip Op. 10-134 at 3 (Dec. 16, 2010).

     In addition to this statutory baseline for new shipper review

eligibility, 19 C.F.R. § 351.214 sets forth additional requirements

for the contents of an initiation request.   First, the exporter or

producer must certify that it meets that provisions of 19 U.S.C. §

1675(a)(2)(B)(i).    See 19 C.F.R. § 351.214(b)(2)(i)-(iii).     The

party making the request must also file 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 consumption, 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 shipments; and

     (C)The date of the first sale to an unaffiliated customer in
     the United States.
Court No. 12-00100                                                    Page 10

19 C.F.R. § 351.214(b)(2)(iv)(A)-(C).             Finally, the regulations

state that an exporter or producer may request a new shipper review

within one year of the date on which they first entered subject

merchandise.    19 C.F.R. § 351.214(c).

     Upon    consideration       of    these    statutory   and   regulatory

provisions, it is clear that Marvin did not satisfy them in making

its Initiation Request.          The Initiation Request itself shows

entries made only during June 2011.            It later came to light that

Marvin made entries of subject goods in September 2010, meaning

that its Initiation Request was facially infirm under 19 C.F.R. §

351.214(b)(2)(iv)(A) and (B), which requires documentation of the

date on which subject goods were first entered, and the volume of

that and subsequent shipments.         While the parties disagree on the

effectiveness       of    Marvin’s    attempted    rehabilitation     of   its

Initiation Request, there can be no dispute that the proceedings

began with a document that falls short of compliance with the

relevant regulations. This infirmity presents a serious hurdle for

Marvin given the deference owed by this court to agency decisions

because Marvin, in essence, asks the Court to conclude that

Commerce    erred    in    applying    the     express   provisions   of   its

regulations.4

     Furthermore, contrary to Marvin’s arguments, the documentation

required in a new shipper request does not just establish that an

     4
       It is worth noting here that in its Reply supporting the
instant Motion, Marvin makes clear that it is not challenging the
validity of any part of 19 C.F.R. § 351.214.
Court No. 12-00100                                           Page 11

exporter or producer is “new.”     It also provides the basis upon

which Commerce can undertake the review and calculate an individual

antidumping rate.     See 19 C.F.R. § 351.214(b)(2)(iv)(B); Def.’s

Resp. to Pl.’s Rule 56.2 Mot. at 11; see generally, 19 U.S.C. §

1675.     If a new shipper request does not provide Commerce with

accurate information regarding an exporter or producer’s entries,

the agency is unable to engage in these calculations.

        Additionally, the Court concludes that 19 U.S.C. § 1677m is

inapplicable here.    While its provisions do allow for a party to

correct infirm filings, it applies to insufficient information that

was submitted in “response to a request for information.”        19

U.S.C. § 1677m(d). Here, Marvin’s Initiation Request was not filed

in response to a request for information made by Commerce.    Of its

own accord, Marvin sought a new shipper review after compiling the

information and documentation it believed necessary.     The Court

will not disturb Commerce’s rescission of the new shipper review

where, as here, the rescission was based on an application of the

express provisions of the relevant statutes and regulations to

facts that are undisputed in all material respects.

        Based on the foregoing, and upon the Marvin’s Motion, the

responses thereto, and all other pleadings and papers filed herein,

it is hereby

        ORDERED that the Motion for Judgment on the Agency Record
Court No. 12-00100                                        Page 12

filed herein by Marvin Furniture (Shanghai) Co. Ltd. is denied.

                                       /s/ NICHOLAS TSOUCALAS
                                            Nicholas Tsoucalas
                                               Senior Judge

Dated: August 23, 2012
       New York, New York