Ethan Allen Operations, Inc. v. United States

• Decision Date: 01 December 2015
• Docket Number: Slip Op. 15–134,Court No. 14–00147
• Citation: 121 F.Supp.3d 1342
• Parties: Ethan Allen Operations, Inc., Plaintiff, Ashley Furniture Industries, Inc., Home Meridian International, Inc., City Furniture, Inc., Hooker Furniture Corporation, and Stein World Operating Company, Plaintiff–Intervenors, v. United States, Defendant, American Furniture Manufacturers Committee for Legal Trade and Vaughan–Bassett Furniture Company, Inc., Defendant–Intervenors.
• Court: U.S. Court of International Trade

121 F.Supp.3d 1342

Ethan Allen Operations, Inc., Plaintiff,

Ashley Furniture Industries, Inc., Home Meridian International, Inc., City Furniture, Inc., Hooker Furniture Corporation, and Stein World Operating Company, Plaintiff–Intervenors,

v.United States, Defendant,American Furniture Manufacturers Committee for Legal Trade and Vaughan–Bassett Furniture Company, Inc., Defendant–Intervenors.

Slip Op. 15–134

Court No. 14–00147

United States Court of International Trade.

December 1, 2015

Yohai Baisburd, Dentons U.S. LLP, of Washington, DC, argued for plaintiff. With him on the brief were Daniel Morris, Dentons U.S. LLP, of Washington, DC, and Gregory J. Spak, White & Case, LLP, of Washington, DC.

Kristin H. Mowry, Daniel R. Wilson, Jeffrey S. Grimson, Jill A. Cramer, and Sarah M. Wyss, Mowry & Grimson, PLLC, of Washington, DC for plaintiff-intervenors.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

J. Michael Taylor, King & Spalding, LLP, of Washington, DC, argued for defendant-intervenors. With him on the brief were Joseph W. Dorn and Daniel L. Schneiderman.

OPINION

Restani, Judge:

This matter is before the court on plaintiff Ethan Allen Operations, Inc.'s ("Ethan Allen") motion for judgment upon the agency record pursuant to USCIT Rule 56.2. See Mem. of P. & A. in Supp. of Pl. Ethan Allen Operations, Inc.'s CIT Rule 56.2 Mot. for J. on the Agency R., ECF No. 29–2 ("Ethan Allen Br."). Ethan Allen challenges the United States Department of Commerce's ("Commerce") determination that certain chests imported by Ethan Allen fall within the antidumping duty order covering certain wooden bedroom furniture ("WBF") from the People's Republic of China ("PRC"). Id. at 11; see Commerce's Scope Ruling on Ethan Allen Operations Inc.'s Chests, PD 14 (May 27, 2014) ("Scope Ruling "); Final Results of Voluntary Redetermination Pursuant to Court Order, ECF No. 24 ("Remand Results "). Ethan Allen additionally challenges Commerce's instructions to U.S. Customs and Border Protection ("Customs") to "continue" to suspend liquidation of entries of the four chests. Ethan Allen Br. at 11–12. For the reasons stated below, Commerce's Scope Ruling and Remand Results are remanded.

BACKGROUND

Commerce issued an antidumping duty order on certain WBF from the PRC in January 2005.See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Wooden Bedroom Furniture from the People's Republic of China¸ 70 Fed.Reg. 329, 329 (Dep't Commerce Jan. 4, 2005) ("WBF Order "). The scope of the order described the covered merchandise as follows:

The product covered by the order is wooden bedroom furniture. Wooden bedroom furniture is generally, but not exclusively, designed, manufactured, and offered for sale in coordinated groups, or bedrooms, in which all of the individual pieces are of approximately the same style and approximately the same material and/or finish. The subject merchandise is made substantially of wood products....

Id. at 332. The WBF Order stated that the subject merchandise included the following items:

(1) Wooden beds such as loft beds, bunk beds, and other beds; (2) wooden headboards for beds (whether stand-alone or attached to side rails), wooden footboards for beds, wooden side rails for beds, and wooden canopies for beds; (3) night tables, night stands, dressers, commodes, bureaus, mule chests, gentlemen's chests, bachelor's chests, lingerie chests, wardrobes, vanities, chessers, chifforobes, and wardrobe-type cabinets; (4) dressers with framed glass mirrors that are attached to, incorporated in, sit on, or hang over the dresser; (5) chests-on-chests, highboys, lowboys, chests of drawers, chests, door chests, chiffoniers, hutches, and armoires; (6) desks, computer stands, filing cabinets, book cases, or writing tables that are attached to or incorporated in the subject merchandise; and (7) other bedroom furniture consistent with the above list.

Id. (footnotes omitted). The WBF Order defined a "chest of drawers" as "typically a case containing drawers for storing clothing." Id. at 332 n.4. The WBF Order also contained a lengthy list of items that were specifically excluded from the scope of the order, including "other non-bedroom furniture, such as television cabinets, cocktail tables, end tables, occasional tables, wall systems, book cases, and entertainment systems." Id. at 332–33.

On February 19, 2014, Ethan Allen filed a scope ruling request, asking that Commerce determine that four models of wooden chests imported by Ethan Allen from the PRC are outside the scope of the WBF Order. Scope Ruling Request at 1, PD 1 (Feb. 19, 2014). Ethan Allen described the four models as follows:

• Vivica Chest. The Vivica Chest is designed, manufactured and marketed for use in a living room or hallway setting, and is part of a three piece living room group consisting of a coffee table ... and a sofa table ... all of which share common design elements, such as antiquated mirrored glass surfaces, angled framing and wood molded top frames with distinctive mitered molding surrounding the top....

• The Nadine Chest . The Nadine Chest is a "stand alone" accent piece, designed and marketed by Ethan Allen for use in a living room or hallway setting, and predominantly marketed in such settings....

• The Marlene Chest. The Marlene Chest is a "stand alone" accent piece, designed and marketed for use in a living room, hallway or dining room setting....

• The Serpentine Chest. The Serpentine Chest is a "stand alone" accent piece, designed and marketed for use in a living room, hallway or dining room setting rather than in a bedroom....

Id. at 2–3. Ethan Allen further explained that none of the chests "is of the same style, material and/or finish as any coordinated bedroom group designed, manufactured or offered for sale by Ethan Allen."Id. at 3. Ethan Allen argued that the chests were outside of the order because they were not designed, manufactured, or offered for sale in coordinated bedroom sets in which all of the individual pieces of furniture are approximately the same style, finish, and/or material. See id. at 3–6. On March 11, 2014, defendant-intervenors American Furniture Manufacturers Committee for Legal Trade and Vaughan–Bassett Furniture Company, Inc. (collectively "AFMC") filed a letter with Commerce stating that they had no objection to Commerce finding the four chests to be outside of the scope of the WBF Order . AFMC's Comments on Ethan Allen's Scope Ruling Request at 1, PD 5 (Mar. 11, 2014).

On April 15, 2014, Commerce placed on the record pictures from Ethan Allen's website that displayed the Vivica sofa table—one piece from the three-part Vivica coordinated living room set that includes the Vivica chest—in a bedroom setting. Information from Ethan Allen's Website at Attach. 1, PD 9 (Apr. 15, 2014). Ethan Allen responded that that particular picture came from Ethan Allen's New Eclecticism campaign, in which the company promotes the versatility of furniture and encourages consumers to use pieces of furniture in different rooms from the rooms for which the piece was originally designed. Letter Re: Ethan Allen's Chests at 2–4, PD 10 (Apr. 17, 2014).

In its Scope Ruling, Commerce determined that for all four chests "the fundamental elements of their design and dimensions ... is entirely consistent with chests of drawers subject to the WBF Order ." Scope Ruling at 6. In making this determination, Commerce analyzed the Marlene, Nadine, and Serpentine chests separately from the Vivica chest. Id. at 7. Commerce did so because Ethan Allen supposedly had argued that the first three chests had wooden finishes similar to that of bedroom furniture, but were sold as stand-alone accent pieces, whereas the Vivica chest had a mirrored surface and was marketed as part of a coordinated living room group. Id. Commerce concluded that these distinctions were relevant under the text of the WBF Order and warranted a separate analysis of the Vivica chest. Id.

Commerce concluded that the Marlene, Nadine, and Serpentine chests were covered by the WBF Order after analyzing the criteria listed in 19 C.F.R. § 351.225(k)(1) (2014) ("(k)(1) factors"). Id. at 8–9. Commerce reasoned that although the chests contained certain decorative aspects, they were made substantially of wood and that "the fundamental elements of their design and dimensions—three or four parallel horizontal drawers stacked one above another in a frame, providing, ... adequate storage space for clothing—is entirely consistent with chests of drawers subject to the WBF Order ." Scope Ruling at 6. Commerce explained that because of the "generally, but not exclusively" language of the scope and as evidenced by prior scope rulings, the chests did not have to be designed, manufactured, and sold as part of a coordinated bedroom in order to be covered by the order. Id. at 7–8. Commerce noted that the scope specifically identified wooden chests and chests of drawers as within the scope of the order, and that the Marlene, Nadine, and Serpentine chests were "physically consistent with chests of drawers and similar items of wooden bedroom furniture identified in the scope." Id. at 8.

Commerce concluded that the Vivica chest was covered by the order after analyzing the criteria listed in 19 C.F.R. § 351.225(k)(2) ("(k)(2) factors"). Commerce concluded that an analysis of the (k)(2) factors was necessary because the sources listed in the (k)(1) factors, specifically the International Trade Commission's ("Commission") investigation and Commerce's prior scope...