Dongguan Sunrise Furniture Co. v. United States, Slip Op. 13–46.

Citation904 F.Supp.2d 1359
Decision Date05 April 2013
Docket NumberSlip Op. 13–46.,Court No. 10–00254.
PartiesDONGGUAN SUNRISE FURNITURE CO., LTD., Taicang Sunrise Wood Industry Co., Ltd., Taicang Fairmont Designs Furniture Co., Ltd., and Meizhou Sunrise Furniture Co., Ltd., Plaintiffs, Longrange Furniture Co., Ltd., Consolidated Plaintiff, Coaster Company of America, COE Ltd., Langfang Tiancheng Furniture Co., Ltd., and Trade Masters of Texas, Inc., Intervenor Plaintiffs, v. UNITED STATES, Defendant, American Furniture Manufacturers Committee for Legal Trade, and Vaughan–Bassett Furniture Company, Inc., Intervenor Defendants.
CourtU.S. Court of International Trade

OPINION TEXT STARTS HERE

Peter J. Koenig and Christine J. Sohar Henter, Squire Sanders (US) LLP, of Washington, DC, for the plaintiffs.

Lizbeth R. Levinson and Ronald M. Wisla, Kutak Rock LLP, of Washington, DC, for consolidated plaintiff.

Susan L. Brooks, Jill A. Cramer, Jeffrey S. Grimson, Kristin H. Mowry, and

Sarah M. Wyss, Mowry & Grimson, PLLC, of Washington, DC, for the intervenor plaintiffs.

Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. Of counsel on the brief was Rebecca Cantu and Scott D. McBride, Attorneys, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce.

Joseph W. Dorn, Daniel L. Schneiderman, J. Michael Taylor, and Mark T. Wasden, King & Spalding, LLP, of Washington, DC, for intervenor defendants.

OPINION AND ORDER

RESTANI, Judge:

This matter comes before the court following the court's decision in Dongguan Sunrise Furniture Co. v. United States, 865 F.Supp.2d 1216, 1223 (CIT 2012) (“Dongguan ”), in which the court remanded Wooden Bedroom Furniture From the People's Republic of China: Final Results and Final Rescission in Part, 75 Fed. Reg. 50,992, 50,992 (Dep't Commerce Aug. 18, 2010) (“ Final Results ”) to the U.S. Department of Commerce (“Commerce”). For the reasons stated below, the court finds that Commerce complied with the court's remand instructions with regard to the calculation of the wage rate and has provided a reasonable explanation for its zeroing methodology. See Amended Final Results of Redetermination Pursuant to Court Order (Dep't Commerce Oct. 26, 2012) (Docket No. 125) (“ Remand Results ”). Commerce has not provided substantial evidence for its calculation of the partial adverse facts available (“AFA”) rates or the use of Insular Rattan and Native Products Corp.'s (“Insular Rattan”) financial statement. Thus, Commerce's Remand Results are sustained in part and remanded in part.

BACKGROUND

The facts of this case have been documented in the court's previous opinion. See Dongguan, 865 F.Supp.2d at 1224–25. The court presumes familiarity with that decision but briefly summarizes the facts relevant to this opinion.

Plaintiffs Dongguan Sunrise Furniture Co., Ltd., Taicang Sunrise Wood Industry Co., Ltd., Taicang Fairmont Designs Furniture Co., Ltd., and Meizhou Sunrise Furniture Co., Ltd. (collectively Fairmont); Intervenor Plaintiffs Coaster Company of America, COE Ltd., Langfang Tiancheng Furniture Co., Ltd., and Trade Masters of Texas, Inc. (collectively Coaster); and Intervenor Defendants American Furniture Manufacturers Committee for Legal Trade and Vaughan–Bassett Furniture Company, Inc. (collectively AFMC) challenged the Final Results of the administrative review of the antidumping duty (“AD”) order on wooden bedroom furniture from the People's Republic of China. SeeDongguan, 865 F.Supp.2d at 1223 & n. 1. Upon consideration of the parties' motions for judgment on the agency record, the court held, inter alia, that substantial evidence did not support Fairmont's assigned partial AFA rate of 216.01%. Id. at 1232–34. The court remanded for Commerce to reconsider: (1) Fairmont's partial AFA rate; (2) the calculation of the wage rate; (3) the use of Insular Rattan's financial statement; and (4) Commerce's zeroing methodology. See id. at 1253.

On remand, Commerce: (1) calculated four new partial AFA rates for Fairmont based on data from Fairmont's reported sales; (2) calculated the wage rate using industry-specific data; 1 (3) continued to rely on Insular Rattan's financial statement; and (4) provided an explanation for its zeroing methodology. Remand Results at 2. To calculate the partial AFA rates, Commerce grouped the unreported sales into four categories based on product type: armoires, dressers without mirrors, nightstands, and drawer chests/other chests. Id. at 5. Commerce then determined a margin for each product type by selecting the single highest CONNUM-specific margin below 216.01% for a corresponding reported product type. Id. at 5, Chart A. The resulting AFA dumping margin rates are 182.15% for armoires, 215.51% for chests, 134.42% for nightstands, and 183.52% for dressers. Id. at 31 n. 61.

Fairmont challenges the selected partial AFA rates and requests that the court stay proceedings until the Federal Circuit addresses Commerce's zeroing methodology. Corrected Pl. Fairmont Comment on Remand Results (“Fairmont Cmts.”). AFMC challenges Commerce's continued use of Insular Rattan's financial statements. AFMC's Comments Concerning Commerce's Final Results of Redetermination Pursuant to Court Remand (“AFMC Cmts.”). Defendant United States asks the court to sustain the Remand Results. Def.'s Resp. to AFMC's and Fairmont's Remand Comments (“Def.'s Resp.”).

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will not uphold Commerce's final determination in an AD review if it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law....” 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION
I. Fairmont's AFA Rates

Fairmont argues that the partial AFA rates are not supported by substantial evidence because they are aberrantly high, they are based on sales with unusually low prices and high freight costs, and they are based on a de minimis quantity of sales. Fairmont Cmts. 2–5. Defendant argues that the partial AFA rates are supported by substantial evidence because they are based on Fairmont's own data, they were calculated with a larger percentage of total sales than were used in Ta Chen and PAM,2 and some of Fairmont's reported sales were dumped at margins above the selected margins. Def.'s Resp. 4–5. Fairmont's claim has merit.

If an interested party has failed to cooperate in not providing valid data from which Commerce can calculate an AD rate, Commerce may calculate a rate using inferenceswhich are “adverse to the interests of that party in selecting from among the facts otherwise available.” 19 U.S.C. § 1677e(b). In doing so, Commerce may rely on information derived from the petition, a final determination in the investigation, any previous review, or any other information placed on the record. Id. Because Commerce has selected AFA rates based on data obtained during the course of the current review, strict corroboration pursuant to 19 U.S.C. § 1677e(c) may not be required. In any case, the rate selected by Commerce must be supported by substantial evidence.

“An AFA rate 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.’ Gallant Ocean (Thai.) Co. v. United States, 602 F.3d 1319, 1323 (Fed.Cir.2010) (emphasis in original) (quoting F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027, 1032 (Fed.Cir.2000)). “Commerce may not select unreasonably high rates having no relationship to the respondent's actual dumping margin.” Id. An AFA rate must not be aberrant or punitive, and it should bear a rational relationship to respondent's commercial reality. See KYD, Inc. v. United States, 607 F.3d 760, 767–68 (Fed.Cir.2010).

Here, Commerce has based Fairmont's AFA rates on impermissibly small percentages of sales.3 Some of the margins Commerce selected were based on one or two transactions and some were based on a percentage of sales smaller than the percentages accepted in Ta Chen and PAM.4Compare Final Analysis Memorandum at Attach. 4 (selected rate of 183.52% for dressers based on 0.007% (by quantity) of total dresser sales) withTa Chen, 298 F.3d at 1339 (finding that 0.04% of respondent's sales reflected a partial AFA rate of 30.95% where actual sales data was “reflective of some, albeit a small portion, of [respondent's] actual sales”) andPAM, 582 F.3d at 1340 (finding that 0.5% of non-cooperative respondent's sales supported AFA rate of 45.49%). The use of Fairmont's own data and Commerce's reliance on case law does not obviate the necessity of Commerce to provide substantial evidence to demonstrate a rational relationship between the AFA rates chosen and a reasonably accurate estimate of Fairmont's actual rate. See Gallant Ocean, 602 F.3d at 1325 (“Substantial evidence requires Commerce to show some relationship between the AFA rate and the actual dumping margin.”). Cases such as Ta Chen and PAM lie at the outer reach of an acceptable percentage of sales upon which to base an AFA rate and did not involve margins ranging from 130% to over 200%. See Gallant Ocean, 602 F.3d at 1324 (finding transaction-specific margins insufficient for corroboration where “Commerce did not identify any relationship between the small number of unusually high dumping transactions with [respondent's] actual rate”); F.lli De Cecco, 216 F.3d at 1032 (invalidating the 46.67% AFA rate imposed by Commerce because, inter alia, it “was many times higher than [respondent's] actual dumping margin”). Generally, a larger percentage of a party's sales is needed to support a very high margin in order for Commerce to be able to demonstrate that the sales relied on are representative of the respondent's commercial...

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