Decca Hospitality Furnishings, LLC v. U.S.

• Decision Date: 23 August 2005
• Docket Number: Slip Op. 05-100.,Court No. 05-00002.
• Citation: 391 F.Supp.2d 1298
• Parties: DECCA HOSPITALITY FURNISHINGS, LLC, Plaintiff, Maria Yee Inc., et al., Plaintiff-Intervenors, v. UNITED STATES, Defendant, American Furniture Manufacturers Committee for Fair Trade, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

391 F.Supp.2d 1298

DECCA HOSPITALITY FURNISHINGS, LLC, Plaintiff, Maria Yee Inc., et al., Plaintiff-Intervenors, v. UNITED STATES, Defendant, American Furniture Manufacturers Committee for Fair Trade, et al., Defendant-Intervenors.

Slip Op. 05-100.

Court No. 05-00002.

United States Court of International Trade.

August 23, 2005.

Dewey Ballantine LLP, Washington, DC (Harry L. Clark, David A. Yocis, and Mayur R. Patel) for the plaintiff.

Arent Fox PLLC (Nancy A. Noonan and Patricia P. Yeh) for plaintiff-intervenors.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Michael D. Panzera); Rachel Wenthold, Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, for the defendant, of counsel.

King & Spalding LLP, Washington, DC (Joseph W. Dorn, Stephen A. Jones, and Jeffrey M. Telep) for defendant-intervenors.

OPINION

POGUE, Judge.

This case involves a challenge by Decca Hospitality Furnishings, LLC ("Decca") to the Department of Commerce's ("Commerce" or "Defendant" or "Department") determination in Wooden Bedroom Furniture from the People's Republic of China, 69 Fed.Reg. 67,313, 67,315 (Dep't Commerce Nov. 17, 2004) (final determination of sales at less than fair value) ("Final Determination"). Decca asserts that, in the Final Determination, Commerce denied Decca separate rate status because Commerce improperly rejected its evidence as untimely. Commerce avers that Decca failed to timely submit a response to Commerce's Section A Questionnaire which it required to qualify for a separate rate. Because the court agrees that Commerce impermissibly rejected Decca's evidence, it remands this case for further consideration consistent with this opinion.¹

BACKGROUND

A.

Commerce considers the PRC to have a non-market economy ("NME"). In dumping investigations of NME economies, Commerce presumes that all companies operating in a NME are state-controlled. See Silicon Carbide from the People's Republic of China, 59 Fed.Reg. 22,585, 22,586, 22,589 (Dep't Commerce May 2, 1994) (notice of final determination of sales at less than fair value); Sparklers from the People's Republic of China, 56 Fed.Reg. 20,588, 20,589 (Dep't Commerce May 6, 1991) (final determination of sales at less than fair value) ("Sparklers"). Commerce further presumes that all state-controlled companies are part of a single entity. Consequently, Commerce establishes a single rate for all state-controlled companies. While Commerce presumes that all companies are under state-control, a company may rebut this presumption, and therefore qualify for an antidumping duty rate separate from the PRC-wide rate, if it demonstrates de jure and de facto independence from government control.

Despite considering the PRC to be a NME, Commerce recognizes that companies organized outside of China are per se independent from the control of the PRC government. Once a party demonstrates that it is foreign owned, Commerce accords that company a rate separate from the PRC-wide rate. Furthermore, Hong Kong is considered to be fully autonomous from China for economic and trade matters. 22 U.S.C. § 5713(3) (2000). Accordingly, if a company doing business in the PRC demonstrates that it is organized under the laws of Hong Kong, Commerce exempts that company from the PRC-wide rate. Fresh Garlic from the People's Republic of China, 67 Fed.Reg. 51,822, 51,823 (Dep't Commerce Aug. 9, 2002) ("Garlic") (preliminary results of antidumping duty administrative review, partial rescission of administrative review, and intent to rescind administrative review in part). In large investigations, like this one, Commerce will assign individualized separate rates to certain participants in the investigation, i.e., the mandatory respondents, but will assign all other qualifying companies a rate equal to the "weighted-average margin based on the rates [Commerce] calculate[s] for the [ ] mandatory respondents, excluding any rates that are zero, de minimis, or based entirely on adverse facts available." Wooden Bedroom Furniture from the People's Republic of China, 69 Fed.Reg. 35,312, 32,323 (Dep't Commerce June 24, 2004) (notice of preliminary determination and postponement of final determination) ("Preliminary Determination").

The presumption of state-control has met with judicial approval because respondents have "the best access to information pertinent to the `state-control' issue," Sigma Corp. v. United States, 117 F.3d 1401, 1406 (Fed.Cir.1997), and a significant percentage of the companies in the PRC are controlled by the PRC government.

B.

On December 17, 2003, Commerce began an investigation of exporters/producers of wooden bedroom furniture from the PRC in response to a petition filed by the domestic industry. See Wooden Bedroom Furniture from the People's Republic of China, 68 Fed.Reg. 70,228 (Dep't Commerce Dec. 17, 2003) (initiation of antidumping duty investigation) ("Notice of Initiation"). In its Notice of Initiation, Commerce specified that it would follow its statutory and regulatory time limits. Notice of Initiation, 68 Fed.Reg. at 70,231. The Department's regulations are stated in Antidumping Duties; Countervailing Duties, 62 Fed.Reg. 27,296, 27,323 (Dep't Commerce May 19, 1997) ("Preamble"), which announced and explained Commerce's current rules as promulgated in the Code of Federal Regulations. The Notice of Initiation also included contact information for parties interested in seeking "further information." Id. at 70,228.

During the early stages of this investigation, Commerce asked for information, in the form of two questionnaires,² from exporters/producers of furniture that were within the scope of the investigation. On December 30, 2003, Commerce sent the first questionnaire, a quantity and value questionnaire ("Q & V Questionnaire"), to the Chinese Ministry of Commerce ("MOFCOM")³ and 211 known producers of wooden bedroom furniture in the PRC. Preliminary Determination, 69 Fed.Reg. at 35,313; Def.'s Mem. Opp'n Pl.'s R. 56.2 Mot. J. Agency R. 3 ("Def's Mem."). In its letter to MOFCOM, Commerce sought MOFCOM's "support in identifying and transmitting [its] request for information to any Chinese producer and/or exporter of wooden bedroom furniture that exported wooden bedroom furniture for sale to the United States during the [period of investigation]." Letter from Edward Yang, Office Director, AD/CVD Enforcement Group III to Liu Danyang, Director, Bureau of Fair Trade for Imports and Exports, Re: Antidumping Duty Investigation of Wooden Bedroom Furniture from the People's Republic of China, P.R. Doc. 140, Pl.'s Ex. 3 at 1 (Dec. 30, 2003). Additionally, the letter stated in bold print:

Please be advised that receipt of the quantity and value questionnaire by producers/exporters of the subject merchandise does not indicate that they will be chosen as a mandatory respondent or guaranteed separate rates status in this antidumping duty investigation.

Id. at 2.

The letters sent to individual producers and exporters had a virtually verbatim disclaimer noting that respondents would not be guaranteed a separate rate status by responding to the questionnaire. Letter from Robert A. Bolling, Program Manager Group III, Office IX, to All Interested Parties, P.R. Doc 139, Pl.'s Ex. 4 (Dec. 30, 2003). Commerce received 137 responses to this initial questionnaire. Preliminary Determination, 69 Fed.Reg. at 35,313. However, Commerce "did not receive any type of communication from the Government of the PRC in response to" its letter to MOFCOM. Id.

Commerce sent the second questionnaire, a Section A Questionnaire,⁴ on February 2, 2004. Unlike the Q & V Questionnaire, Commerce sent the Section A Questionnaire only to (a) MOFCOM and (b) seven companies it deemed to be mandatory respondents. The February 2, 2004 letter to MOFCOM specified that "[a]ll parties are requested to respond to section A (General Information) of the Non Market Economy (`NME') questionnaire by February 23, 2004." Letter from Robert Bolling, Program Manager AD/CVD Enforcement III to Liu Danyang, Director Bureau of Fair Trade for Imports and Exports, Pl.'s Ex. 5, P.R. Doc. 297 at 2 (emphasis in original). A generic Section A Questionnaire was also available on Commerce's website. The Section A Questionnaire itself informed parties that "[a]ll companies requesting a separate rate must respond to the following questions." Section A Questionnaire, P.R. Doc. 297 at A-1. Commerce received 126 Section A responses from parties. Preliminary Determination, 69 Fed.Reg. at 35,313-14. The PRC did not respond to this questionnaire either. Id. at 35,321.

In its preliminary determination issued on June 24, 2004, Commerce assigned a separate rate to respondent companies who timely submitted responses to the Section A Questionnaire and who demonstrated sufficient independence, i.e., both de jure and de facto independence from government control. Preliminary Determination, 69 Fed.Reg. 35,312, 35,319-20. All companies (other than the mandatory respondents), which sufficiently demonstrated that they were organized under the laws of Hong Kong, were granted a separate rate of 6.65%. Wooden Bedroom Furniture from China, 70 Fed.Reg. 329, 300 (Dep't Commerce Jan. 4, 2005) (notice of amended final determination of sales at less than fair market value and antidumping duty order). Commerce assigned all other parties a rate of 198.08%. Final Determination, 69 Fed.Reg. at 67,316.

C.

Plaintiff, Decca, asserts that it is a Hong Kong based producer and exporter of wooden bedroom furniture.⁵ Although Decca was not specifically mentioned in the Notice of Initiation Commerce sent it a Q & V Questionnaire. Letter from Edward Yang, Office Director, AD/CVD Enforcement Group III to Liu Danyang, Director, Bureau of Fair Trade for Imports and Exports, Re: Antidumping Duty...