Dorbest Ltd. v. U.S.
| Decision Date | 07 January 2009 |
| Docket Number | Court No. 05-00003.,Slip Op. 09-2. |
| Citation | 602 F.Supp.2d 1287 |
| Parties | DORBEST LTD.; Rui Feng Woodwork (Dongguan) Co. Ltd.; Rui Feng Lumber Dev. (Shenzhen) Co. Ltd., and Am. Furniture Mfrs. Comm. for Legal Trade; Vaughan-Bassett Furniture Co. Inc.; Cabinet Makers, Millmen, & Indus. Carpenters Local 721; UBC S. Council of Indus. Workers Local 2305; United Steel Workers of Am. Local 193u; Carpenters Indus. Union Local 2093; Teamsters, Chauffeurs, Warehousemen & Helpers Local 991; IUE Indus. Div. of CWA Local 82472, Plaintiffs/Defendant-Intervenors, v. UNITED STATES, Defendant, Dongguan Lung Dong/Don He Art Heritage Int'l, Ltd./Super Art Furniture Co./Artwork Metal & Plastic Co./Jibson Indus. Ltd./Always Loyal Int'l; Fortune Glory Ltd. (HK Ltd.)/ Nanhai Jiantai Woodwork Co.; Fine Furniture (Shanghai) Ltd.; Coaster Co. of Am.; Collezione Europa, USA, Inc.; Fine Furniture Design & Mktg. LLC; Global Furniture, Inc., Hillsdale Furniture, LLC; Klaussner Int'l, LLC; Magnussen Home Furnishings Inc.; L. Powell Co.; Riversedge Furniture Co.; Woodstuff Mfg. Inc., d/b/a Samuel Lawrence; Schnadig Corp.; Good Cos.; Standard Furniture Mfg. Co., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Gregory G. Katsas, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Brian A. Mizoguchi); Rachel E. Wenthold, Senior Attorney, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, for the United States Department of Commerce.
Mowry International Group, LLC (Jill Cramer and Kristin H. Mowry) and Howe & Russell, PC (Kevin Russell) on behalf of Art Heritage International, Limited et al.
Trade Pacific, PLLC (Robert G. Gosselink) on behalf of Dongguan Lung Dong/Dong He et al.
Before: Pogue, Judge.
This matter returns to court after a second partial remand following the court's most recent decision, Dorbest Ltd. v. United States, 547 F.Supp.2d 1321 (CIT 2008) ("Dorbest II"). Dorbest II remanded the matter to the Department of Commerce ("Commerce") so that it could: (1) determine the correct heading of the Harmonized Tariff Schedule of India ("HTS[I]") for the valuation of Dorbest's cardboard input, id. at 1337, (2) provide adequate support or explanation for its selection of surrogate companies for use in the calculation of SG & A financial ratios, id. at 1344, (3) explain its reasoning in calculating offsets to SG & A and interest expenses with short-term interest income earned on working capital accounts or current assets, id. at 1347-8, and (4) calculate the separate rate for non-mandatory respondents without creating or using data known to be invalid, id. at 1351. Also before the court is Petitioner AFMC's contention that Commerce must correct a ministerial error with respect to the valuation of rubberwood.
The court reviews remand determinations for compliance with the court's remand order. See NMB Sing. Ltd. v. United States, 28 CIT 1252, 1259-60, 341 F.Supp.2d 1327, 1333-34 (2004) (); see also Olympia Indus., Inc. v. United States, 23 CIT 80, 82-83, 36 F.Supp.2d 414, 416 (1999) (). In addition, any factual findings on remand must be supported by substantial evidence and the agency's legal determinations must be in accordance with law. 19 U.S.C. § 1516a(b)(1)(B); see, e.g., Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003); AG der Dillinger Huttenwerke v. United States, 28 CIT 94, 95, 310 F.Supp.2d 1347, 1349 (2004) ().
The court considers each issue in turn:
1. Valuation of Cardboard
Dorbest II granted Commerce's request for a voluntary remand to "determine under which subheading Dorbest's [cardboard] input would properly be classified," and further directed Commerce to "determine whether the data put forth by Dorbest regarding distortion to data in subheading 4808.1000 necessitates alteration of the data used or the selection of a different subheading." Dorbest II, 547 F.Supp.2d at 1338.
On remand, Commerce determined that HTS[I] subheading 4808.1000 provided the better classification for Dorbest's cardboard input. Final Results of Redetermination Pursuant to Court Remand, Dorbest Ltd.; Rui Feng Woodwork (Dongguan) Co. Ltd.; Rui Feng Lumber Dev. (Shenzhen) Co. Ltd. v. United States, Consol. Court No. 05-00003 (July 15, 2008) ("Final Results") at 4. In support of this determination, Commerce compared Dorbest's own description of its input with the subheadings at issue, noting that Dorbest described its cardboard input as "paper cardboard." Id. at 4 (quoting Dorbest Response to HTS Request, Attachment 1, May 26, 2004, P.R. 1152, fr.7).
HTS[I] heading 4808 covers "Paper and paperboard, corrugated (with or without glued flat surface sheets), creped, crinkled, embossed or perforated, in rolls or sheets, other than paper of the kind described in 4803." Subheading 4808.1000 in turn covers "Corrugated paper and paperboard, whether or not perforated." Commerce also considered Subheading 4808.9000, which is a residual or basket category, "other", covering items not covered by the first three subheadings of heading 4808. Generally, such basket categories should be used only when no more specific category is appropriate. See Witex, U.S.A., Inc. v. United States, 28 CIT 1907, 1916-17 & n. 16, 353 F.Supp.2d 1310, 1319 & n. 16 (2004). Furthermore, because Dorbest's own description of its product seems to fit under subsection 4808.1000, there is a good reason to favor this heading unless it is unreasonable, for some other reason, to do so.
Dorbest claims, however, that information from Infodrive India demonstrates that 4808.1000 is not an appropriate heading for two reasons. First, Dorbest claims that Infodrive data show that many items in 4808.1000 are "misclassified", and second, a large percentage of the items classified under 4808.1000 are finished cardboard boxes, a value-added product that differs from Dorbest's product.
In response, Commerce contends that the data from Infodrive are, at least in this case, unreliable, as they are significantly incomplete, because they do not cover or include at least 40% of all imports classified under 4808.1000. Furthermore because the information in Infodrive is presented in a large number of different units of measurement, many of which are incommensurable, Commerce contends that it is not able to use this data to check its otherwise reasonable determination to use subheading 4808.1000. Final Results at 5-6.
Dorbest's arguments on this point are essentially similar to those that the court previously rejected when made with regard to Dorbest's resin input. Dorbest II, 547 F.Supp.2d at 1333. Here the court notes, once again, that when Commerce weighs or evaluates the evidence and chooses between imperfect alternatives, so long as its decision is supported by substantial evidence, the court must affirm. As in the earlier decision regarding resin, here Commerce has evaluated the evidence and chosen between imperfect alternatives for valuing Dorbests' cardboard input. As there is substantial evidence supporting its decision, that decision is affirmed. See also, Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350-52 (Fed.Cir.2006) ().
Dorbest also argues that Commerce's valuation of cardboard in its remand determination is unfair because other respondents received different values during the investigation. This claim is without merit. As no other parties contested the original value selected by Commerce, Commerce did not have occasion to reexamine the cardboard valuations assigned to the other respondents. Therefore, because these other cardboard valuations were not at issue here, they were not part of the court's remand order to Commerce, and Commerce therefore had no duty to consider them.
2. SG & A Financial Ratios
In its initial remand to Commerce, Dorbest Ltd. v. United States, 30 CIT ___, 462 F.Supp.2d 1262 (2006)("Dorbest I"), the court noted that Commerce generally considers quality, specificity, contemporaneity and representativeness when judging the appropriateness of surrogate values for use in the calculation of financial ratios. Id. at 1301. The court emphasized "that Commerce must apply its selection criterion in a consistent and uniform manner, otherwise its selection could become arbitrary and capricious." Id.
In Dorbest II the court again remanded this issue with instructions to Commerce that it must support its conclusion that including data from four companies much smaller than Dorbest—Fusion Design Private Ltd., DnD's Fine Furniture Ltd., Nizamuddin Furniture Ltd., and Swaran Furniture Ltd.—did not distort the calculated financial ratios, given the apparent correlation between company size and financial ratios. Dorbest II, 547 F.Supp.2d at 1343-44. Dorbest II specifically noted that ...
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