Baroque Timber Indus. (Zhongshan) Co. v. United States

• Decision Date: 31 July 2013
• Docket Number: Court No. 12–00007.,Slip Op. 13–96.
• Citation: 925 F.Supp.2d 1332
• Parties: BAROQUE TIMBER INDUSTRIES (ZHONGSHAN) COMPANY, LIMITED, et al., Plaintiffs, v. UNITED STATES, Defendant, and Coalition for American Hardwood Parity, et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

925 F.Supp.2d 1332

BAROQUE TIMBER INDUSTRIES (ZHONGSHAN) COMPANY, LIMITED, et al., Plaintiffs,

v.UNITED STATES, Defendant,andCoalition for American Hardwood Parity, et al., Defendant–Intervenors.

Slip Op. 13–96.

Court No. 12–00007.¹

United States Court of

International Trade.

July 31, 2013.

Francis J. Sailer, Mark E. Pardo, Andrew T. Schutz, and John M. Foote, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Baroque Timber Industries (Zhongshan) Co., Ltd.; Riverside Plywood Corp.; Samling Elegant Living Trading (Labuan) Ltd.; Samling Global USA, Inc.; Samling Riverside Co., Ltd.; and Suzhou Times Flooring Co., Ltd.

Gregory S. Menegaz, James K. Horgan, and John J. Kenkel, deKieffer & Horgan, PLLC, Washington, DC, for Zhejiang Layo Wood Industry Co., Ltd.; Changzhou Hawd Flooring Co., Ltd.; Dunhua City Jisen Wood Industry Co., Ltd.; Dunhua City Dexin Wood Industry Co., Ltd.; Dalian Huilong Wooden Products Co., Ltd.; Kunshan Yingyi–Nature Wood Industry Co., Ltd.; and Karly Wood Product Ltd.

Kristin H. Mowry, Jeffrey S. Grimson, Jill A. Cramer, Susan L. Brooks, Sarah M. Wyss, and Rebecca M. Janz, Mowry & Grimson, PLLC, of Washington, DC, for Fine Furniture (Shanghai) Ltd.; Great Wood (Tonghua) Ltd.; and Fine Furniture Plantation (Shishou) Ltd.

Kristen S. Smith and Mark R. Ludwikowski, Sandler, Travis & Rosenberg, PA, of Washington, DC, for Lumber Liquidators Services, LLC; Armstrong Wood Products (Kunshan) Co., Ltd.; and Home Legend, LLC.

Jeffrey S. Neeley, Michael S. Holton, and Stephen W. Brophy, Barnes, Richardson & Colburn, Washington, DC, for Zhejiang Yuhua Timber Co., Ltd.

Alexander V. Sverdlov, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, for the United States. With him on the brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Shana Hofstetter, Attorney, International Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Jeffrey S. Levin, Levin Trade Law, P.C., of Bethesda, MD, for the Coalition for American Hardwood Parity.

OPINION

POGUE, Chief Judge:

This is a consolidated action seeking review of determinations made by the Department of Commerce (“Commerce”) in the antidumping duty investigation of multilayeredwood flooring from the People's Republic of China (“China”).² Currently before the court is Respondents' Motion for Judgment on the Agency Record. Respondents ³ challenge nine aspects of Commerce's Final Determination including: (1) Commerce's decision to apply its targeted dumping method on the basis of non-dumped sales; (2) Commerce's withdrawal of the targeted dumping regulations; (3) Commerce's use of zeroing in an investigation; (4) the surrogate value of Layo's core veneer used for plywood production; (5) the surrogate value of Layo's high density fiberboard (“HDF”) input; (6) the surrogate value of Samling's HDF input; (7) the surrogate value of Layo's plywood inputs; (8) the surrogate value of brokerage and handling fees; and (9) Commerce's rejection of certain surrogate financial statements.

In response, Commerce requests voluntary remand to reconsider the valuation of Layo's plywood input and Samling's HDF input. Commerce also requests voluntary remand to reconsider the application of its method for analyzing targeted dumping in light of any changes in value that may result from reconsideration of the two surrogate values for which remand is requested and in light of its current standards for applying its targeted dumping method. Commerce contests the remaining challenges to the Final Determination.

The court has jurisdiction pursuant to § 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2006)⁴ and 28 U.S.C. § 1581(c) (2006).

As explained below, the Final Determination is affirmed in part and remanded in part: (1) Commerce's request for remand to reconsider the surrogate value determinations for Layo's plywood input and Samling's HDF input is granted; (2) Commerce's targeted dumping determination is remanded for reconsideration in light of any changes to the surrogate value determinations and in light of Commerce's current standards; (3) the surrogate value determinations for Layo's core veneer, Layo's HDF input, and the brokerage and handling fees are remanded for further explanation or reconsideration consistent with this opinion; and (4) Commerce's rejection of Respondents' late filed surrogate financial statements is affirmed.

BACKGROUND ⁵

Responding to a petition by the Coalition for American Hardwood Parity (“CAHP” or “Petitioners”), Commerce initiated an antidumping duty investigation of multilayered wood flooring from China on November 18, 2010. Multilayered Wood Flooring from the People's Republic of China, 75 Fed.Reg. 70,714 (Dep't Commerce Nov. 18, 2010) (initiation of antidumping duty investigation). As permitted by the statute, Commerce chose three mandatory respondents for the investigation: Zhejiang Yuhua Timber Co., Ltd. (“Yuhua”), Zhejiang Layo Wood Industry Co., Ltd. (“Layo”), and the Samling Group ⁶ (“Samling”). Multilayered Wood Flooring from the People's Republic of China, 76 Fed.Reg. 30,656, 30,658 (Dep't Commerce May 26, 2011) (preliminary determination of sales at less than fair value) (“ Preliminary Determination ”); see also19 U.S.C. § 1677f–1(c)(2)(B). Commerce published its Final Determination on October 18, 2011, finding that the subject merchandise was being sold at less than fair value in the United States, i.e., dumped. Final Determination, 76 Fed.Reg. at 64,323–24. Commerce determined that a de minimis dumping margin existed for Yuhua, but assigned margins of 3.98% and 2.63% to Layo and Samling respectively. Id.

STANDARD OF REVIEW

When reviewing Commerce's decisions made in antidumping investigations, the court “shall hold unlawful any determination, finding, or conclusion found ... to be 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. Voluntary Remand

Commerce requests voluntary remand to reconsider two determinations that it may have made in error: (1) the surrogate value ⁷ of Layo's plywood input and (2) the surrogate value of Samling's HDF input. Def.'s Resp. to Pls.' Consol. Mot. J. Admin. R., ECF No. 76 (“Def.'s Resp. Br.”) at 28–29. Commerce also requests remand to reconsider the application of its method for analyzing targeted dumping in light of any changes to these two surrogate values and in light of its current standards. Def.'s Resp. Br. at 29; Def.'s Supplemental Br., ECF No. 116, at 16–18.

While a reviewing court will refuse a request for voluntary remand that is frivolous or in bad faith, “if the agency's concern is substantial and legitimate, a remand is usually appropriate.” SKF USA Inc. v. United States, 254 F.3d 1022, 1029 (Fed.Cir.2001). Commerce's concerns are considered substantial and legitimate when (1) Commerce supports its request with a compelling justification, (2) the need for finality does not outweigh the justification, and (3) the scope of the request is appropriate. Ad Hoc Shrimp Trade Action Comm. v. United States, ––– CIT ––––, 882 F.Supp.2d 1377, 1381 (2013). This three-pronged test will be applied to each of Commerce's requests in turn.

A. Layo's Plywood Input

The agency justifies its first remand request on the basis that, “Commerce has discovered that there is conflicting evidence on the record as to the range of Layo Wood's plywood thicknesses.” Def.'s Resp. Br. at 28. Clarifying and correcting a potentially inaccurate determination is a compelling justification. See Parkdale Int'l v. United States, 475 F.3d 1375, 1380 (Fed.Cir.2007) (“[A]n overriding purpose of Commerce's administration of antidumping laws is to calculate dumping margins as accurately as possible....”). In the context of a routine appeal of a final determination, the need to accurately calculate margins is not outweighed by the interest in finality. See Shakeproof Assembly Components Div. of Ill. Tool Works, Inc. v. United States, 29 CIT 1516, 1523–24, 412 F.Supp.2d 1330, 1337–38 (2005). In addition, the scope of Commerce's remand request—to clarify the record evidence and revise the determination if warranted—is an appropriate response to Commerce's concern. Therefore, Commerce's request for remand to reconsider the surrogate value determination for Layo's plywood input is granted.⁸

B. Samling's HDF Input

Commerce also requests remand to reconsider the surrogate value determination for Samling's HDF input because the Harmonized Tariff Schedule (“HTS”) category used to value Samling's HDF input may not accurately represent Samling's HDF input. Def.'s Resp. Br. at 29. The voluntary remand analysis above also applies to this determination and supports granting Commerce's request. As noted above, accuracy is a compelling justification, which is not outweighed by finality in this case, and the scope of the remand request is appropriate.

CAHP objects to remand of this determination on the grounds that Samling failed to exhaust its administrative remedies.⁹ Def.-Intervenor's Resp. to Pls.' Consol. Mot. J. Admin. R., ECF No. 82 (“Def.-Intervenor's Resp. Br.”) at 6–9. But refusing Commerce's remand request on exhaustion grounds is not appropriate on the facts of this case. During verification, Layo submitted additional information to Commerce regarding the proper HTS category for the HDF input. Layo Case Br., A–570–970, POI Apr. 1, 2010–Sept. 30, 2010 (Aug. 5, 2011), Admin. R. Pt. 2 Pub. Doc. 2, at 25–26. In light of Layo's submission, Commerce altered the HTS category used to value Layo's HDF input. I & D Mem., cmt. 20 at 81–82. Although HDF is an input common to Layo and Samling, Commerce did not seek similar information from Samling or change the HTS...