Court Opinion

ID: 2752534
Source: CourtListenerOpinion
Date Created: 2014-11-18 17:01:51.383277+00
Date Added: 2024-06-11T10:05:08.761275
License: Public Domain

Slip Op. 14-132

            UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
MARK DAVID, A DIVISION OF        :
BAKER, KNAPP & TUBBS, INC.,      :
                                 :
          Plaintiff,             : Before: Nicholas Tsoucalas,
                                 :          Senior Judge
      and                        :
                                 : Consol. Court No.: 13-00233
BRYAN ASHLEY INTERNATIONAL,     :
METROPOLIS MANUFACTURING, INC. :
(DBA VAUGHAN BENZ), AND         :
MGM RESORTS INTERNATIONAL       :
DESIGN,                          :
                                 :
          Consolidated           :
          Plaintiffs,            :
                                 :
      v.                         :
                                 :
UNITED STATES,                   :
                                 :
          Defendant,             :
                                 :
          and                    :
                                 :
AMERICAN FURNITURE MANUFACTURERS:
COMMITTEE FOR LEGAL TRADE and    :
VAUGHAN-BASSETT FURNITURE CO., :
INC.,                            :
                                 :
          Defendant-Intervenors.:

                             OPINION

[Plaintiff’s motion for judgment on the agency record is denied]

                                           Dated: November 18, 2014

Alexander H. Schaefer and Hea J. Koh, Crowell & Moring LLP, of
Washington, DC, for Mark David, a division of Baker, Knapp & Tubbs,
Inc., plaintiff.
Court No. 13-00233                                                            Page 2

Peter Koenig, Squire Patton Boggs LLP, of Washington, DC, for Bryan
Ashley International, Metropolis Manufacturing, Inc., and MGM
Resorts International Design, consolidated plaintiffs.

Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson,
Director, Patricia M. McCarthy, Assistant Director, and Douglas G.
Edelschick, Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, DC, for
defendant.   Of counsel on the brief was Shana A. Hofstetter,
Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.

Joseph W. Dorn, J. Michael Taylor and P. Lee Smith, King & Spalding
LLP, of Washington, DC, for American Furniture Manufacturers
Committee for Legal Trade and Vaughan-Bassett Furniture Company,
Inc., defendant-intervenors.

           TSOUCALAS,        Senior    Judge:     Plaintiff,      Mark     David,    a

division   of     Baker,   Knapp,      and    Tubbs,   Inc.    (“Mark      David”   or

“Plaintiff”), moves for judgment on the agency record contesting

defendant United States Department of Commerce’s (“Commerce”)

determination      in   Wooden   Bedroom        Furniture     From   the    People’s

Republic     of     China:     Final         Results   of     Antidumping       Duty

Administrative Review; 2011, 78 Fed. Reg. 35,249 (June 12, 2013).

Consolidated Plaintiffs, Bryan Ashley International, Metropolis

Manufacturing, Inc., and MGM Resorts International Design, join

and supplement Plaintiff’s motion.               See Pls. Adoption of Pl. Br.

at 1–3.    Commerce and defendant-intervenors, American Furniture

Manufacturers      Committee     for    Legal     Trade     and   Vaughan-Bassett

Furniture Company, Inc., oppose Plaintiff’s motion.                  Def.’s Resp.

to Pl.’s and Consolidated Pls.’ Rule 56.2 Mot. for J. on the Agency

R. at 1–2.      The AFMC’s Resp. in Opp’n to Mark David’s Rule 56.2
Court No. 13-00233                                            Page 3

Mot. for J. on the Agency R. at 1.        For the following reasons,

Plaintiff’s motion is denied.

                             Background

            In January 2005, Commerce issued an antidumping duty

order covering wooden bedroom furniture (“WBF”) from the People’s

Republic of China (“PRC”).   Notice of Amended Final Determination

of Sales at Less Than Fair Value and Antidumping Duty Order: WBF

From the PRC, 70 Fed. Reg. 329, 330 (Jan. 4, 2005).         Commerce

acknowledged Shanghai Maoji Imp And Exp Co., Ltd. (“Maoji”) as

qualifying for a separate rate status and assigned a dumping margin

of 6.68%.     WBF From the PRC: Corrected Notice of Court Decision

Not in Harmony With the Final Determination of Sales at Less Than

Fair Value and Notice of Amended Final Determination of Sales at

Less Than Fair Value and Antidumping Duty Order Pursuant to Court

Decision, 76 Fed. Reg. 53,409, 53,411–53,412 (Aug. 26, 2011).

            Commerce initiated the seventh administrative review

during the period of review beginning on January 1, 2011 through

December 31, 2011.   WBF From the PRC: Initiation of Administrative

Review, 77 Fed. Reg. 12,235, 12,237 (Feb. 29, 2012).      During the

seventh administrative review, Commerce named Maoji as a mandatory

respondent.    WBF From the PRC: Preliminary Results of Antidumping

Duty Administrative Review; 2011, 78 Fed. Reg. 8493, 8494 (Feb. 6,

2013) (“Preliminary Results”).      Maoji responded to Commerce’s

antidumping questionnaire and supplemental questionnaires between
Court No. 13-00233                                             Page 4

July and October 2012. Decision Memorandum for Preliminary Results

of Antidumping Duty Administrative Review: WBF from the PRC, at 3

(February 1, 2013) (“Preliminary Decision Memorandum”).        During

the review Maoji notified Commerce that it was not practicable for

it to provide a response to the Section D questionnaire or the

supplemental Section A questionnaire.      See Letter from Maoji to

Commerce re: WBF from PRC (Aug. 3, 2012), Pub. Rec. 325, Attach.

1 at 1. 1

             Commerce issued its preliminary results on February 6,

2013.       Preliminary Results, 78 Fed. Reg. at 8493.       Commerce

preliminarily determined that Maoji failed to answer all sections

of Commerce’s questionnaire, and thus failed to establish its

eligibility for a separate rate status.    Id. at 8494.   As a result,

Commerce treated Maoji as part of the PRC-wide entity.         Id. at

8494.

             Commerce also preliminarily determined that the PRC-wide

entity, including Maoji, did not cooperate to the best of its

ability during the review.       Id. at 8494.    Therefore, Commerce

relied on adverse facts available (“AFA”) to determine the dumping

margin for the PRC-wide entity.     Id. at 8494.   Commerce assigned

an AFA rate of 216.01 percent to the PRC-wide entity, including

Maoji, which was calculated based on a 2004-2005 New Shipper

1 Hereinafter, documents in the public record will be designated
“PR” without further specification except where relevant.
Court No. 13-00233                                                    Page 5

Review.     WBF From The PRC: Final Results of the 2004-2005 Semi-

Annual New Shipper Reviews, 71 Fed. Reg. 70,739, 70,741 (December

6, 2006).    Commerce stated that the rate had been corroborated in

previously completed administrative reviews in which it found that

the 216.01% rate for the PRC-wide entity was within “the range of

the calculated margins on the record of the [fifth] administrative

review.” Preliminary Results at 15.

            On     March     8,   2013,    Plaintiff,     Mark   David   USA

(“Plaintiff”), an importer of WBF, filed case briefs with Commerce.

WBF from the PRC: Issues and Decision Memorandum for the Final

Results of Review, at 1 (June 5, 2013) (“Decision Memorandum”).

Mark David contests whether the 216.01% margin, as assigned to

Maoji as part of the PRC-wide entity was reasonable.

            Commerce maintained its preliminary findings in its

Final Results.         WBF From the PRC: Final Results of Antidumping

Duty Administrative Review; 2011, 78 Fed. Reg. 35,249, 35,249 (June

12, 2013) (“Final Results”).

                   JURISDICTION and STANDARD OF REVIEW

            This Court has jurisdiction pursuant to 28 U.S.C. §

1581(c) (2006) and Section 516A(a)(2)(B)(iii) of the Tariff Act of

1930 as amended, 19 U.S.C. §1516a(a)(2)(B)(iii)(2006).

            This Court will uphold Commerce’s determination unless

it is “unsupported by substantial evidence on the record, or

otherwise        not    in    accordance     with       law.”    19   U.S.C.
Court No. 13-00233                                                      Page 6

§1516a(b)(1)(B)(i).       Substantial   evidence   “means      such   relevant

evidence as a reasonable mind might accept as adequate to support

a conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477

(1951).

           Additionally, “courts look for a reasoned analysis or

explanation for an agency’s decision as a way to determine whether

a particular decision is arbitrary, capricious, or an abuse of

discretion.” Wheatland Tube Co. v. United States, 161 F.3d 1365,

1369 (Fed. Cir. 1998). “An abuse of discretion occurs where the

decision is based on an erroneous interpretation of the law, on

factual findings that are not supported by substantial evidence,

or   represent     an   unreasonable    judgment   in    weighing     relevant

factors.” Welcom Prods., Inc. v. United States, 36 CIT ____, 865
F. Supp. 2d 1340, 1344 (2012) (citing Star Fruits S.N.C. v. United

States, 393 F.3d 1277, 1281 (Fed. Cir. 2005). “An agency action is

arbitrary when the agency offers insufficient reasons for treating

similar situations differently.” SKF USA Inc. v. United States,

263 F.3d 1369, 1382 (Fed. Cir. 2001).

                                DISCUSSION

           Maoji does not dispute that they failed to participate

fully in the review, and that they therefor can be subjected to an

AFA rate. The issue before the court is instead whether Commerce’s

application   of    the   216.01%   PRC-wide   AFA      rate   to   Maoji   was

reasonable.      Plaintiff argues that the 216.01% PRC-wide AFA rate
Court No. 13-00233                                                     Page 7

was neither reliable nor relevant. See Pl.’s Mem. Supp. R. 56.2 J.

Agency R. at 5–10 (“Pl.’s Mem.”). According to Plaintiff, Commerce

applied an “outdated” and “unsupported” margin that did not reflect

Maoji’s commercial reality.       Id.

           In antidumping duty proceedings involving merchandise

from a non-market economy (“NME”), as is the case here, Commerce

presumes   that    all   respondents     are   government   controlled     and

therefore subject to the country-wide rate.            See Sigma Corp. v.

United States, 117 F.3d 1401, 1405 (Fed. Cir. 1997).               Commerce

does allow respondents to rebut this presumption, however, by

establishing the absence of both de jure and de facto government

control.   Id.    Respondents who make this showing are eligible for

a separate rate. Id. When a company fails to rebut the presumption

of   government   control,    Commerce    employs   that    presumption    and

applies the country-wide rate to its merchandise.            See id.

           Plaintiff does not appear to dispute Commerce’s finding

that Maoji failed to rebut the presumption of government control

in the Final Results.        During the review Maoji notified Commerce

that it was not practicable for it to provide a response to the

Section    D     questionnaire    or     the    supplemental     Section     A

questionnaire.     See PR 325 attach. 1 at 1.         Commerce determined

that Maoji was a part of the PRC-wide entity.          See Shandong Mach.

Imp. & Exp. Co. v. United States, 33 CIT 810, 815 (2009).           Because

Maoji failed to respond to Commerce’s questionnaires regarding its
Court No. 13-00233                                                       Page 8

separate rate eligibility during the review, Commerce reasonably

concluded      that    Maoji    failed    to   demonstrate   its    absence   of

government control.          See Sigma Corp., 117 F.3d at 1405.

            The main issue for the court to evaluate is therefor

whether Commerce’s application of the 216.01% PRC-wide AFA rate to

Maoji, which has not demonstrated its independence from the PRC-

wide entity, was reasonable.             A margin based upon AFA must be “a

reasonably accurate estimate of the respondent’s actual rate,

albeit with some built-in increase intended as a deterrent to non-

compliance.”      F.Lli de Cecco di Filippo Fara S. Martino S.p.A. v.

United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000).                “[A]lthough

a higher AFA rate creates a stronger deterrent, Commerce may not

select unreasonably high rates having no relationship to the

respondent’s actual dumping margin.”            Gallant Ocean (Thai.) Co. v.

United States, 602 F.3d 1319, 1323 (Fed. Cir. 2010) (citing de

Cecco, 216 F.3d    at     1032).     “Commerce   must   select   secondary

information that has some grounding in commercial reality.”                   Id.

at 1324.

            These standards grow out of 19 U.S.C. § 1677e(c), which

provides that when Commerce relies on secondary information, it

“shall, to the extent practicable, corroborate that information

from independent sources that are reasonably at [its] disposal.”

19 U.S.C. § 1677e(c).             To corroborate secondary information,

Commerce must find that it has “probative value.”                  KYD, Inc. v.
Court No. 13-00233                                                           Page 9

United States, 607 F.3d 760, 765 (Fed. Cir. 2010).                     Secondary

information has “probative value” if it is both reliable and

relevant to the respondent.            Mittal Steel Galati S.A. v. United

States, 31 CIT 730, 734, 491 F. Supp. 2d 1273, 1278 (2007).

             Plaintiff relies heavily on Lifestyle Enter., Inc. v.

United States to support its argument that the 216.01% rate was

unreasonable.      Lifestyle Enterprise, Inc. v. United States, 35 CIT

___, ___, 768 F. Supp. 2d 1286 (2011) (“Lifestyle I”), after

remand, 36 CIT ___, 844 F. Supp. 2d 1283 (2012) (“Lifestyle II”),

after   second    remand,      36   CIT   ___,    865 F. Supp. 2d 1284    (2012)

(“Lifestyle III”), after third remand, 37 CIT ___, 896 F. Supp. 2d
1297 (2013) (“Lifestyle IV”).             Pl’s Mem. at 7–9.         Specifically,

Plaintiff contends that this Court previously discredited the

application of the 216.01% PRC-wide AFA in Lifestyle I.                 The court

disagrees.        In   Lifestyle     I,   importers     challenged     the    third

administrative review of WBF from the PRC.                See Lifestyle I, 768

F.   Supp.   2d   at   1292.        Orient,   a   mandatory   respondent,       was

originally subject to an antidumping margin of 216.01%.                     See id.

at 1297.     However, in Lifestyle I, Orient was not assigned the

PRC-wide rate because “Orient had affirmatively demonstrated an

absence of de jure or de facto control.”                 See id. at 1296–1297,

1298 n. 12 (“Commerce did not assign the PRC-wide rate per se, but

rather selected the same rate based on separate considerations.”).

Furthermore, the Court found in Lifestyle I that Commerce failed
Court No. 13-00233                                                          Page 10

to address the “dramatic increase in Orient’s rate from 7.68% to

216.01%.”     Id. at 1299.         Because Orient qualified for separate

rate status, the Court in Lifestyle I held that Commerce was

required    to    either      explain    its    determination    or     corroborate

Orient’s AFA rate so that it relates to Orient’s commercial

reality.     Id. at 1298–1299.           Contrary to Plaintiff’s assertion,

the Court in Lifestyle I did not hold that the PRC-wide rate is

uncorroborated.

             Following     three      subsequent    remands     where    the   Court

instructed Commerce to calculate an AFA rate which has some

grounding in Orient’s commercial reality, the Court in Lifestyle

IV sustained Commerce’s findings in its Third Remand Results of

WBF from the PRC, applying a rate of 83.55% to Orient’s exports of

WBF.   Lifestyle IV, 896 F. Supp. 2d at 1301-1302.                       The Court

determined       that   the    rate     was    sufficiently   corroborated      and

reflected Orient’s commercial reality.              Id.

             Unlike Orient in Lifestyle I, here, Maoji failed to

qualify for separate rate status.                As a result it received the

PRC-wide AFA rate.       Because Maoji was part of the PRC-wide entity,

Commerce was not required to calculate a separate AFA rate relevant

to Maoji’s commercial reality.            See Peer Bearing, 32 CIT at 1313,

587 F. Supp. 2d at 1327 (“[T]here is no requirement that the PRC-

wide entity rate based on AFA relate specifically to the individual

company.”).      Commerce was only required to corroborate the rate to
Court No. 13-00233                                                     Page 11

the PRC-wide entity.      See id.   Therefore, Plaintiff’s reliance on

Lifestyle I is misplaced.       Lifestyle I does not call into question

the PRC-wide rate as applied to the PRC-wide entity, rather it

only discredits its application to Orient, which successfully

established the absence of both de jure and de facto government

control.    Id.

            Plaintiff    also   argues     that   Commerce    has   previously

applied significantly lower rates to cooperating respondents in

nine   other   administrative    reviews     of   WBF   in   support   of   its

contention that the rate is unreliable.            Pl.’s Mem. at 8–9.       The

court does not find that these rates support Plaintiff’s argument.

The rates that Plaintiff relies on were assigned to cooperating

separate rate respondents.       See id.      The rates were not assigned

to respondents who were considered to be a part of the PRC-wide

entity.    Plaintiff does not show how these rates conflict with a

rate applied to a respondent who fails to qualify for separate

rate status.      In the instant case, as discussed above, unlike the

nine cooperating respondents, Maoji is an uncooperative respondent

that was found to be a part of the PRC-wide entity.

            Additionally, Plaintiff insists that the “continued use”

of the 216.01% margin in the Final Results is “contrary to this

Court’s    precedent    and   disregards    information      that   decisively

rejects the reliability or relevance of the PRC-wide entity rate.”

Pl.’s Mem. at 9. Plaintiff’s argument is unpersuasive. This Court
Court No. 13-00233                                                      Page 12

has noted that, “[u]nlike other sources of information, there are

no     independently   verifiable      sources     for   calculated     dumping

margins, other than previous administrative determinations.”               Peer

Bearing Co.-Changshan v. United States, 32 CIT 1307, 1314, 587 F.

Supp. 2d 1319, 1328 (2008).         Therefore, when calculating the AFA

rate for the PRC-wide entity, “the reliability of the calculation

stems from its basis in prior verified information in previous

administrative reviews,” and “[i]f Commerce chooses a calculated

dumping margin from a prior segment of the proceeding, it is not

necessary to question the reliability of the margin if it was

calculated from verified sales and cost data.”              Id., 587 F. Supp.

2d at 1328.    Here, Commerce calculated the rate based on the 2004-

2005 New Shipper Review.      Decision Memorandum at 9–10.            During a

2009    administrative   review   of    WBF,     Commerce   corroborated    the

216.01% rate for the PRC-wide entity.          Id. at 10.     Commerce deemed

this rate to be relevant to this administrative review.                 Id. at

10.    As discussed, Plaintiff failed to provide evidence indicating

that this rate was unreliable.         Because the 216.01% rate has been

corroborated for the PRC-wide entity, and the evidence Plaintiff

provided lacked probative value, Commerce’s determination was

reasonable.    See Peer Bearing, 32 CIT at 1314, 587 F. Supp. 2d at

1328.

            Finally, Plaintiff argues that the PRC-wide rate is

punitive. Pl.’s Mem. 10–11.            The court disagrees.           Plaintiff
Court No. 13-00233                                                Page 13

insists that Commerce failed to support Maoji’s rate increase from

6.68% in previous reviews to the present 216.01% rate applied here.

As discussed above, Maoji had previously qualified for separate

rate status, and subsequently lost it in this review, therefore

Maoji’s previous rate is irrelevant in the instant case. The court

finds that the 216.01% rate is supported by substantial evidence,

thus “an AFA dumping margin determined in accordance with the

statutory requirements is not a punitive measure.”         KYD, Inc. v.

United States, 607 F.3d 760, 768 (Fed. Cir. 2010).

                              Conclusion

          For   all   the   foregoing   reasons,   the   court   sustains

Commerce’s Final Results.     Plaintiff’s motion for judgment on the

agency record is denied.

                                           /s/ Nicholas Tsoucalas
                                             Nicholas Tsoucalas
                                                Senior Judge
Dated: November 18, 2014
       New York, New York