Am. Alliance for Hardwood Plywood v. United States, Slip Op. 19-76

• Decision Date: 19 June 2019
• Docket Number: Slip Op. 19-76,Consol. Court No. 18-00013
• Citation: 392 F.Supp.3d 1298
• Parties: AMERICAN ALLIANCE FOR HARDWOOD PLYWOOD et al., Plaintiffs and Consolidated Plaintiffs, v. UNITED STATES and United States International Trade Commission, Defendants, and Coalition for Fair Trade of Hardwood Plywood, Defendant-Intervenor and Consolidated Defendant-Intervenor.
• Court: U.S. Court of International Trade

392 F.Supp.3d 1298

AMERICAN ALLIANCE FOR HARDWOOD PLYWOOD et al., Plaintiffs and Consolidated Plaintiffs,

v. UNITED STATES and United States International Trade Commission, Defendants,andCoalition for Fair Trade of Hardwood Plywood, Defendant-Intervenor and Consolidated Defendant-Intervenor.

Slip Op. 19-76

Consol. Court No. 18-00013

United States Court of International Trade.

June 19, 2019

Jeffrey Sheldon Grimson and James Corscaden Beaty, Mowry & Grimson, PLLC, of Washington D.C., argued for plaintiffs American Alliance for Hardwood Plywood, Far East American, Inc., Northwest Hardwoods, Inc., Concannon Lumber and Plywood (Concannon Corp. d/b/a Concannon Lumber Company), American Pacific Plywood, Inc., Canusa Wood Products Ltd., Fabuwood Cabinetry Corp., Hardwoods Specialty Products USLP, Holland Southwest International Inc., Liberty Woods International, Inc., McCorry & Co. Ltd., MJB Wood Group, Inc., Patriot Timber Products, Inc., Richmond International Forest Products, LLC, Taraca Pacific, Inc., USPly Trading Co. (USPly LLC) and Wood Brokerage International d/b/a Red Tide International, LLC. With them on the brief were Jill A. Cramer and Yuzhe PengLing.

Stephen William Brophy, Husch Blackwell LLP, of Washington D.C., argued for consolidated plaintiffs Zhejiang Dehua TB Import & Export Co., Ltd. et al. With him on the brief was Jeffrey S. Neeley.

Karl Stuart von Schriltz, Attorney-Advisor, Office of the General Counsel, U.S. International Trade Commission, and Andrea C. Casson, Assistant General Counsel for Litigation, argued for defendant. With them on the brief was Dominic L. Bianchi, General Counsel.

Timothy C. Brightbill, Wiley Rein, LLP, of Washington D.C., argued for defendant-intervenor, the Coalition for Fair Trade of Hardwood Plywood. With him on the brief was Stephanie Manaker Bell.

OPINION AND ORDER

Kelly, Judge:

Before the court are several motions for judgment on the agency record challenging various aspects of the U.S. International Trade Commission's ("ITC" or "Commission") final affirmative injury determination in its antidumping and countervailing duty ("ADD" and "CVD") investigations of hardwood plywood ("HWPW") from the People's Republic of China ("PRC"). See [HWPW] from China, 82 Fed. Reg. 61,325 (Int'l Trade Comm'n Dec. 27, 2017) ; Mem. P. & A. Supp. Rule 56.2 Mot. J. Agency R. of American Alliance for Hardwood Plywood et al., Sept. 17, 2018, ECF No. 61 ("AAHP's Br."); Mem. Supp. Rule 56.2 Mot. J. Agency R. of Consol. Pls. Zhejiang Dehua TB Import & Export Co., Ltd. et al., Sept. 17, 2018, ECF No. 58 ("Zhejiang's Br.").

For the reasons that follow, the court sustains the ITC's final affirmative injury determination.

BACKGROUND

The ADD and CVD investigations at issue covered the period of January 1, 2014, to June 30, 2017, and involved imports of HWPW from the PRC. See Final Consol. Staff Report and Views at 4, Dec. 21, 2017, ECF No. 47-1.¹ HWPW is a wood panel product made from gluing two or more layers of wood veneer to a core.² See Views at 10. The core itself may be composed of veneers or other types of wood material. See id. HWPW products are differentiated by species, quality of veneer, overall thickness, number of plies, type of core, and type of adhesive used. See id.

On November 18, 2016, the Coalition for Fair Trade of Hardwood Plywood (the "Coalition"),³ filed an ADD and CVD petition with the U.S. Department of Commerce ("Commerce") and the ITC. See Petition for the Imposition of Antidumping & Countervailing Duties, Inv. Nos. 701-TA-565 and 731–TA–1341, CD 1 (Nov. 18, 2016) ("Petition"). Commerce and the ITC initiated ADD and CVD investigations into imports of HWPW from the PRC in response to this petition. See [HWPW] From China, 81 Fed. Reg. 85,639 (Int'l Trade Comm'n Nov. 28, 2016) (institution of ADD and CVD investigations, and scheduling of prelim. phase investigations); Certain [HWPW] Products From the [PRC], 81 Fed. Reg. 91,125 (Dep't Commerce Dec. 16, 2016) (initiation of less-than-fair-value investigation); Certain [HWPW] Products From the [PRC], 81 Fed. Reg. 91,131 (Dep't Commerce Dec. 16, 2016) (initiation of CVD investigation).

In its preliminary determinations, Commerce found that HWPW from the PRC was being sold at less than fair value and the PRC-industry was receiving countervailable subsidies. See Certain [HWPW] Products from the [PRC], 82 Fed. Reg. 28,629 (Dep't Commerce June 23, 2017) (prelim. affirmative determination of sales at less than fair value, prelim. affirmative determination of critical circumstances, in part); Certain [HWPW] Products from the [PRC], 82 Fed. Reg. 19,022 (Dep't Commerce Apr. 25, 2017) (prelim. affirmative CVD determination, prelim. affirmative critical circumstances determination, in part, and alignment of final determination with final ADD determination). Commerce sustained these findings in its final determinations. See Certain [HWPW] Products From the [PRC], 82 Fed. Reg. 53,460, 53,470 (Dep't Commerce Nov. 16, 2017) (final determination of sales at less than fair value, and final affirmative determination of critical circumstances, in part); [CVD] Investigation of Certain [HWPW] Products From the [PRC], 82 Fed. Reg. 53,473, 53,476 (Dep't Commerce Nov. 16, 2017) (final affirmative determination, and final affirmative critical circumstances determination, in part); see also Certain [HWPW] Products From the [PRC], 82 Fed. Red. 32,683 (Dep't Commerce July 17, 2017) (amending ministerial errors in prelim. determination of sales at less than fair value).

Concurrent with Commerce's proceedings, the ITC investigated whether domestic industry was materially injured or threatened with material injury by reason of imports of the subject merchandise. See [HWPW] From China, 81 Fed. Reg. 85,639 (Int'l Trade Comm'n Nov. 28, 2016). The ITC received questionnaire responses from nine domestic producers which accounted for nearly all domestic production of HWPW in 2016. Views at 4. Import data was based on questionnaire responses of 74 U.S. importers of HWPW from the PRC, which accounted for 94% of subject imports from the PRC in 2016. Id. The ITC defined the domestic like product to be a single product co-extensive with the scope Commerce's investigations. See id. at 11–12; see also Hardwood Plywood from China at 9, USITC Pub. 4661, Inv. Nos. 701-TA-565 and 731-TA-1341 (Prelim.), (Jan. 2017). No domestic producers of the domestic like product were excluded from the domestic industry. See Views at 12. The ITC issued a preliminary determination finding that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of HWPW from the PRC. See [HWPW] Products from China, 82 Fed. Reg. 2,393 (Int'l Trade Comm'n Jan. 9, 2017). Prior to making its final material injury determination, the ITC held a public hearing on October 26, 2017, and the interested parties submitted pre- and post- hearing briefs.

In its final determination, the ITC concluded that an industry in the United States is materially injured by reason of imports of HWPW from the PRC that Commerce had found to be subsidized and sold in the United States at less than fair value. See Hardwood Plywood from China, 82 Fed. Reg. 61,325 (Int'l Trade Comm'n Dec. 27, 2017). ADD and CVD duty orders were then issued by Commerce. See Certain [HWPW] Products From the [PRC], 83 Fed. Reg. 504 (Dep't Commerce Jan. 4, 2018) (amended final determination of sales at less than fair value and ADD order); Certain [HWPW] Products From the [PRC], 83 Fed. Reg. 513 (Dep't Commerce Jan. 4, 2018) (CVD order).

Plaintiffs American Alliance for Hardwood Plywood et al. (collectively "AAHP"),⁴ filed a complaint on March 2, 2018. See AAHP's Compl., Mar. 2, 2018, ECF No. 10. Consolidated Plaintiffs Zhejiang Dehua TB Import & Export Co., Ltd. et al. ("Zhejiang"),⁵ separately filed a complaint on the same day. See Zhejiang's Compl., Mar. 2, 2018, ECF No. 8, Zhejiang Dehua TB Import & Export Co., Ltd. et al v. United States, Ct. No. 18-00021 (USCIT filed Feb. 2, 2018). The proceedings initiated by Zhejiang were later consolidated into the present action. See Order, May 10, 2018, ECF No. 52.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012)⁶ and 28 U.S.C. § 1581(c) (2012), which grant the court authority to review actions contesting a final affirmative injury determination. "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

AAHP and Zhejiang together challenge five aspects of the ITC's final affirmative injury determination. First, they challenge the ITC's conditions of competition analysis, arguing the ITC's finding that subject imports are moderately substitutable with domestic like product is unsupported by substantial evidence. See AAHP's Br. at 1–2, 4–19; Zhejiang's Br. at 1–2, 10–16. Second, they argue the ITC's finding that the volume of subject imports was significant is unsupported by substantial evidence and is not in accordance with law. See AAHP's Br. at 2, 19–25; Zhejiang's Br. at 1–2, 16–18. Third, they argue the ITC's finding that subject imports undersold domestic like product during the period of investigation, and resulted in price suppression, is unsupported by substantial evidence and is not in accordance with law. See AAHP's Br. at 2, 25–37; Zhejiang's Br. at 2, 18–23. Fourth, they argue the ITC's finding that subject imports significantly impacted the domestic industry is unsupported by substantial evidence. See AAHP's Br. at 2, 37–39, Zhejiang's Br. at 2, 23. Finally, they argue the ITC's conclusion that non-subject imports could not account for the price effects and impact on the domestic industry identified in its analysis was unsupported by substantial evidence and...