Dorbest Ltd. v. U.S., Slip-Op. 06-160. Court No. 05-00003.

CourtU.S. Court of International Trade
Writing for the CourtPogue
PartiesDORBEST 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./Artowrk 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.
Decision Date31 October 2006
Docket NumberSlip-Op. 06-160. Court No. 05-00003.
462 F.Supp.2d 1262
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./Artowrk 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.
Slip-Op. 06-160. Court No. 05-00003.
United States Court of International Trade.
October 31, 2006.

Page 1263

COPYRIGHT MATERIAL OMITTED

Page 1264

Kaye Scholer, LLP, Washington, DC (Jeffrey S. Grimson, Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Jahna M. Hartwig) for Dorbest Limited et al.

King & Spalding, LLP, Washington, DC (Joseph W. Dorn, Stephen A. Jones, Jeffrey M. Telep, J. Michael Taylor) for the American Furniture Manufacturers Committee for Legal Trade et al.

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 (Brian A. Mizoguchi, Michael D. Panzera); Rachel Wenthold and Carrie L. Owens, Attorneys, Of Counsel, 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) on behalf of Art Heritage International, Limited et al.

Trade Pacific, PLLC, Washington, DC (Robert G. Gosselink) on behalf of Dongguan Lung Dong/Dong He et al.

Page 1265

OPINION

POGUE, Judge.


This matter arises from an affirmative antidumping duty determination by the Department of Commerce ("Commerce") in its investigation of wooden bedroom furniture from the People's Republic of China ("PRO"). Plaintiffs challenge numerous aspects of that determination here. Before the court are USCIT R. 56.2 Motions for Judgment on the Agency Record filed by the parties, specifically by Dorbest Limited et al ("Dorbest" also known as "Respondents"), the American Furniture Manufacturers Committee for Legal Trade et al. ("AFMC" also the "Petitioners" in the investigation), and Commerce. For the reasons set forth below, the court grants in part each of these motions and denies in part each of these motions; the court also reserves decision on several issues pending the results on remand.

BACKGROUND
A.

On December 17, 2003, Commerce commenced an antidumping investigation of wooden bedroom furniture from the PRO 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).1 The investigation covered more than 211 Chinese exporters/producers of wooden bedroom furniture making this one of the largest investigations involving PRC companies. See Wooden Bedroom Furniture from the People's Republic of China, 69 Fed.Reg. 35,312, 35,313 (Dep't Commerce June 24, 2004) (notice of preliminary determination and postponement of final determination) ("Preliminary Determination"). The period of investigation ("Period of Investigation" or "POI") encompassed imports of the subject merchandise from April 1, 2003 through September 30, 2003. Commerce rendered an affirmative less than fair value determination for the subject merchandise and imposed the antidumping duty order and dumping margins that are at issue here. Wooden Bedroom Furniture from the People's Republic of China, 69 Fed.Reg. 67,313, 67,317 (Dep't Commerce Nov. 17, 2004)(notice of final determination of sales at less than fair value) ("Final Determination") amended by Wooden Bedroom Furniture from the

Page 1266

People's Republic of China, 70 Fed.Reg. 329, 330 (Dep't Commerce Jan. 4, 2005) (notice of amended final determination of sales at less than fair market value and antidumping duty order) ("Amended Final Determination").

More specifically, Commerce determined that the PRO is an NME country and that available information did no':, permit the foreign market value of the merchandise to be determined as it would in a market economy. See Preliminary Determination, 69 Fed.Reg. at 35,318. Consequently, Commerce derived the respondent's normal value through aggregating the surrogate costs of the factors of production required to produce the product. See id. at 35,324.

Because of the large number of companies under investigation, pursuant to 19 U.S.C. § 1677f-1 (c)(2)(3), Commerce limited its investigation to the seven largest manufacturers of wooden bedroom furniture from the PRC.2 Among these seven was Respondent Dorbest. See Preliminary Determination, 69 Fed.Reg. at 35,318.

In the investigation, Commerce chose India as the surrogate country and chiefly relied on a data set referred to as the Monthly Statistics of Foreign Trade in India ("MSFTI") to value the factors of production (numbering over 500). Id.; Id. at 35,324; Memorandum from James H. Jochum to " Jeffrey A. May, Issues and Decision Memorandum for the Less-Than-Fair-Value Investigation of Wooden Bedroom Furniture from the People's Republic of China, at 41 (Cmt.2), Dep't of Commerce (November 8, 2004), P.R. Doc.1933, available at http://ia.i ta.doc.gov/frn/summary/prc/04-25507-1.pdf ("Issues & Decision Mem."). Likewise, Commerce used nine financial statements from Indian companies to calculate profit, overhead, and general expenses. Id. at 23. For its calculation of the wage rate, Commerce ran a regression to determine the relationship between nations' per capita Gross National Product and their wage rates; Commerce then multiplied the resulting coefficient by the PRC's per capita gross national product to derive China's wage rate. See Wooden Bedroom Furniture from the People's Republic of China: Final Results of Redetermination Pursuant to Court Remand Orders (Dep't Commerce Aug. 1, 2005) ("Remand Determination").

B.

The court must sustain a final determination in an antidumping duty investigation if that determination is supported by substantial evidence on the record and is otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i) (2000); Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed.Cir.2002).

The parties here have collectively alleged more than a score of issues requiring review, some with multiple subparts. To issue a coherent opinion, the court has grouped the issues as follows: (1) Commerce's selection of data sets, specifically, (a) Commerce's use of Indian surrogate data to value the factors of production, (b)Commerce's use of the MSFTI, (c) Commerce's calculation of the wage rate, and (d) Commerce's selection of surrogate companies for the calculation of profit, overhead, and selling, general and administrative expenses (collectively "financial ratios"); (2) Commerce's valuation of certain specific factors of production; (3) other individual company-specific protests; and (4) the application (or lack thereof) of

Page 1267

adverse inferences in Commerce's selection of facts otherwise available.

For ease of reference, the discussion is organized as follows:

 I. DATA SETS ......................................................................... 1267
                 A. Selection of Surrogate Countries .............................................. 1270
                 (1) Evaluation of Indonesian Data ............................................ 1272
                 (2) Commerce's finding that India was a producer of the comparable
                 merchandise ............................................................. 1273
                 (3) Commerce's finding that India was a significant producer of subject
                 merchandise ............................................................. 1274
                 (4) Weighing the choice between Indonesia and India .......................... 1274
                 B. Monthly Statistics of Foreign Trade in India .................................. 1276
                 (1) In general ............................................................... 1276
                 (2) MSFTI as a primary data set .............................................. 1276
                 (3) MSFTI as applied to individual factors ................................... 1278
                 (a) Mirrors ............................................................. 1279
                 (i) Imported Mirrors As Inputs ................................... 1279
                 (ii) Glass Yug .................................................... 1280
                 (iii) Tarun Vadehra, Highland House and Goldfindo .................. 1282
                 (iv) The MSFTI data is either non-inclusive or distortive of
                 mirror inputs ............................................... 1283
                 (v) Infodrive India .............................................. 1284
                 (vi) Commerce's evaluation ........................................ 1286
                 (b) Paints .............................................................. 1288
                 (c) Cardboard ........................................................... 1290
                 C. Wage rate ..................................................................... 1291
                 (1) Facial Challenge ......................................................... 1292
                 (2) As Applied Invalidity .................................................... 1292
                 (a) Creation of the Regression Model .................................... 1294
                 (i) Notice and Comment Rulemaking
...

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    ...a case-specific determination based on the "totality of the circumstances." See Dorbest Ltd. v. United States , 30 C.I.T. 1671, 1683, 462 F.Supp.2d 1262, 1274 (2006) ; Policy Bulletin 04.1 at 3.2. Commerce's Determination that Thailand is a Significant Producer Lacks Substantial Evidence In......
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    ...determination based on the "totality of the circumstances." See Dorbest Ltd. v. United States , 30 C.I.T. 1671, 1683, 462 F.Supp.2d 1262, 1274 (2006) ; Policy Bulletin 04.1 at 3.2. Commerce's Determination that Thailand is a Significant Producer Lacks Substantial Evidence In the I......
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