Guangzhou Maria Yee Furnishings v. U.S., Slip Op. 05-158. Court No. 05-00065.

• Decision Date: 14 December 2005
• Docket Number: Slip Op. 05-158. Court No. 05-00065.
• Citation: 412 F.Supp.2d 1301
• Parties: GUANGZHOU MARIA YEE FURNISHINGS, LTD., et al. Plaintiffs, v. UNITED STATES, Defendant, American Furniture Manufacturers Committee for Fair Trade, et al. Defendant-Intervenors.
• Court: U.S. Court of International Trade

412 F.Supp.2d 1301

GUANGZHOU MARIA YEE FURNISHINGS, LTD., et al. Plaintiffs, v. UNITED STATES, Defendant, American Furniture Manufacturers Committee for Fair Trade, et al. Defendant-Intervenors.

Slip Op. 05-158. Court No. 05-00065.

United States Court of International Trade.

December 14, 2005.

Arent Fox Kintner Plotkin & Kahn, PLLC (Nancy A. Noonan and Patricia P. Yeh) for the Plaintiff.

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 (Michael D. Panzera), Rachel Wenthold, International Attorney-Advisor, Office of Chief Counsel for Import Administration, Office of the General Commerce, U.S. Department of Commerce, for the Defendant, of counsel.

King & Spalding LLP (Joseph W. Dorn, Stephen A. Jones, and Jeffrey M. Telep) for Defendant-Intervenor.

OPINION

POGUE, Judge.

This case involves a challenge by Guangzhou Maria Yee Furnishings, Ltd., et.al. ("Maria Yee") to the Department of Commerce's ("Commerce" or "Defendant") determination in Wooden Bedroom Furniture from the People's Republic of China, 69 Fed.Reg. 67,313, 67,317 (Dept. Commerce Nov. 17, 2004) (final determination of sales at less than fair value) ("Final Determination"). Plaintiff asserts that Commerce denied it separate rate status because Commerce improperly rejected as untimely evidence of Maria Yee's independence from the Chinese government's control.

In light of the court's decision in Decca Hospitality Furnishings LLC, v. United States, 29 CIT ___, 391 F.Supp.2d 1298 (2005) ("Decca"), and the principles examined therein, the court remands this case for further consideration consistent with this opinion.

BACKGROUND

The procedural history of this matter is detailed in the court's decision in Decca. For ease of reference, the court summarizes the key facts here.

As in Decca, this case arises from the Department of Commerce's antidumping investigation of wooden bedroom furniture exporters/producers from the People's Republic of China ("PRC"). See Wooden Bedroom Furniture from the People's Republic of China, 68 Fed.Reg. 70,228, 70,228 (Dept. Commerce Dec. 17, 2003) (initiation of antidumping duty investigation) ("Notice of Initiation").

Because the PRC is a non-market economy ("NME"), in investigations of PRC exporters/producers, Commerce presumes that all companies operating in the PRC are state-controlled. Based on this presumption, in this investigation, Commerce applied the PRC antidumping rate of 198.08% to all companies that did not sufficiently demonstrate their independence from the Chinese government. Final Determination, 69 Fed.Reg. at 67,317. Those companies that were able to demonstrate both de facto and de jure independence from government control, Wooden Bedroom Furniture from the People's Republic of China, 69 Fed.Reg. 35,312, 35,319-20 (Dept. Commerce June 24, 2004) (notice of preliminary determination and postponement of final determination) ("Preliminary Determination") were assigned an antidumping margin of 6.65%. Wooden Bedroom Furniture from the People's Republic of China, 70 Fed.Reg. 329, 330 (Dept. Commerce Jan. 4, 2005) (notice of amended final determination of sales at less than fair value and antidumping duty order). Commerce evaluated a company's independence from government control on the basis of information timely submitted by companies in response to Commerce's Section A Questionnaire. Final Determination, 69 Fed.Reg. at 67,315; Preliminary Determination, 69 Fed.Reg. at 35, 319-20; Section A Questionnaire, P.R. Doc 297 at A-1 ("Section A Questionnaire"). Commerce solicited responses to its Section A Questionnaire by sending the Section A Questionnaire to "mandatory respondents"¹ and to the Chinese Ministry of Commerce ("MOFCOM") on February 2, 2004, accompanied by a cover letter. Letter from Robert Bolling, Program Manager AD/CVD Enforcement III to Liu Danyang, Director Bureau of Fair Trade for Imports and Exports, Pl.'s Exh. 12, P.R. Doc. No. 297; see also Decision Memorandum, P.R. Doc 1933 at 345. Pursuant to 19 C.F.R. § 351.301(c)(2),² the February 2 letter established February 23, 2004 as the deadline for responses to the Section A Questionnaire from "all parties" and the mandatory respondents. February 2 Letter, P.R. Doc. No. 297 at 2.

Like the plaintiff in Decca, Maria Yee was not selected as a mandatory respondent and asserts that it did not receive any requests for information from Commerce. Pl.'s Mem. Supp. Mot. J. Agency R. Pursuant to Rule 56.2 at 6 ("Pl.Br"); Pl. Reply Def.'s and Def. Int.'s Mem. Opp. Pl.'s Rule 56.2 Mot. J. Agency R. at 2; Decision Memorandum, P.R. Doc 1933 at 321. Because Maria Yee did not timely respond to the Section A Questionnaire, Commerce found that Maria Yee was state-controlled and therefore applied the PRC-wide antidumping rate of 198.08% to Maria Yee.

On June 24, 2004, the Department of Commerce published its Preliminary Determination and therein made explicit its reliance on responses to the Section A Questionnaire for the determination of separate rates for non-mandatory respondents. Preliminary Determination, 69 Fed.Reg. at 35,319-20. Maria Yee asserts that this was the first public statement by Commerce about the use of Section A Questionnaires for separate rate applications in this investigation. Pl. Br. at 15. After the publication of the Preliminary Determination, on July 2, 2004, Maria Yee filed its response to the Section A Questionnaire. Pl. Br. at 9; see also Maria Yee's Section A Response in Wooden Bedroom Furniture from the People's Republic of China, Letter from Jerome J. Zaucha & Nancy A. Noonan, Arent Fox, to Donald L. Evans, Sec'y of Commerce, Attn: Imp. Admin, Int'l Trade Admin, Re: Submission of Section A Response by Maria Yee in Wooden Bedroom Furniture from the People's Republic of China (July 2, 2004), Pl.'s Exh. 9.

Commerce rejected Maria Yee's Section A submission asserting that it was untimely because it was received after the February 23, 2004 deadline. Decision Memorandum, P.R. Doc.1933 at 324. Commerce based its rejection of the information on the fact that its "consistent past practice has been to require companies to respond to the Department's Section A questionnaire, regardless of whether wholly owned by a market-economy entity." Decision Memorandum, P.R. Doc.1933 at 337. Moreover, Commerce reasoned that its February 2, 2004 letter to MOFCOM and the mandatory respondents provided "sufficient notice and opportunity to respond to the Department's Section A questionnaire." Id. at 345.

Maria Yee contends that it is a Hong Kong-based producer of wooden bedroom furniture that is independent from the Chinese government, and further contends that it had no notice from Commerce of the Section A Questionnaire, or of any deadlines associated with the Questionnaire. Maria Yee brings this action under USCIT R. 56.2 seeking a restoration of its July 2, 2004 submissions to the record, and asking the court to order the Department of Commerce to grant Maria Yee the 6.65% separate rate.

Commerce asserts that Maria Yee was unknown to Commerce. Moreover, Commerce argues that Maria Yee was not entitled to rely on or expect that Commerce would provide it with notice of the Section A filing deadline. Rather, Commerce argues that because it did not have knowledge of Maria Yee's status as a producer of wooden bedroom furniture, it was appropriate for Commerce to provide notice by means of its letter to MOFCOM, as Commerce could not have provided personal service.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction under 28 U.S.C. § 1581(c). The court must sustain Commerce's determination in an anti-dumping investigation unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B).

To act in accordance with law, an agency, may not refuse to recognize its own rules or regulations where it may prejudice a party. Steen v. United States, 29 CIT ___, 395 F.Supp.2d 1345, 1347 (CIT 2005) (citing Ariz. Grocery Co. v. Atchison, Topeka & Sante Fe Ry. Co., 284 U.S. 370, 389, 52 S.Ct. 183, 76 L.Ed. 348 (1932)); but cf. Kemira Fibres Oy v. United States 61 F.3d 866, 875-76 (Fed. Cir.1995) (as a general rule an agency is required to comply with its own regulations, however, if no prejudice is shown by such default, a plaintiff cannot benefit from failure to adhere to its own regulations, when Commerce has missed its own deadline). At the same time, an agency's interpretation of its governing statute is due deference, and must be upheld unless it is unreasonable. United States v. Haggar Apparel Co., 526 U.S. 380, 386-90, 119 S.Ct. 1392, 143 L.Ed.2d 480 (1999) (discussing Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)).

Here, if Commerce, contrary to its own regulations, improperly rejected Maria Yee's submissions it thereby improperly presumed Maria Yee's place of incorporation (not to be Hong Kong), in which case Commerce's findings are unsupported by substantial evidence and the case must be remanded for Commerce to enter a factual finding. Fl. Power & Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985) ("If the record before the agency does not support the agency action, if the agency has not considered all relevant factors . . . the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation.").

DISCUSSION

A.

The timelines set out in Commerce's regulations provide a final deadline, as established by 19 C.F.R. § 351.301(b)(2),³ and a deadline for specific submissions, established by 19 C.F.R § 351.301(c)(2)(ii). See n. 2 supra. Commerce rejected Maria Yee's information as untimely even though it was submitted before the deadline established by § 351.301(b)(2),⁴ claiming the controlling...