Jilin Forest Indus. Jinqiao Flooring Grp. Co. v. United States
| Decision Date | 29 April 2021 |
| Docket Number | Slip Op. 21–49,Court No. 18-00191 |
| Citation | 519 F.Supp.3d 1224 |
| Court | U.S. Court of International Trade |
| Parties | JILIN FOREST INDUSTRY JINQIAO FLOORING GROUP CO., LTD., Plaintiff, v. UNITED STATES, Defendant. |
Ronald M. Wisla, Fox Rothschild LLP, of Washington, DC, argued for Plaintiff. With him on the brief were Lizbeth R. Levinson and Brittney R. Powell.
Sonia M. Orfield, Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of Counsel on the brief was Rachel A. Bogdan, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
Plaintiff, Jilin Forest Industry Jinqiao Flooring Group Co., Ltd. ("Jilin"), is a mandatory respondent supplier of multilayered wood flooring, located in the People's Republic of China ("China"). Jilin challenges the final results of the fifth administrative review of the antidumping duty order on that flooring. See Multilayered Wood Flooring From the People's Republic of China , 83 Fed. Reg. 35,461 (Dep't Commerce July 26, 2018), P.R. 351 ("Final Results"), and accompanying Issues and Decision Mem. (July 18, 2018), P.R. 340 ("Final IDM"). The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018) and 28 U.S.C. § 1581(c) (2018).
By its motion for judgment on the agency record, Jilin disputes the Final Results in two respects: (1) that the United States Department of Commerce ("Commerce" or the "Department") unlawfully determined that Jilin was not separate from the control of the government of China; and (2) that Commerce's failure to calculate an individual rate for it as a fully cooperative mandatory respondent was contrary to law. See Pl.’s Mem. Supp. Mot. J. Agency R., ECF No. 20-1 ("Pl.’s Br."); Pl.’s Reply, ECF No. 27; see also Compl. ¶¶ 14-21, ECF No. 9.
Defendant the United States, on behalf of Commerce, urges the court to sustain the Final Results as supported by substantial evidence and otherwise in accordance with law. See Def.’s Opp'n Pl.’s Mot. J. Agency R., ECF No. 23 ("Def.’s Br.").
For the reasons set forth below, Jilin's motion for judgment on the agency record is granted, and this case is remanded to the Department for further proceedings consistent with this opinion.
The antidumping duty order on multilayered wood flooring from China dates from December 8, 2011. See Multilayered Wood Flooring From the People's Republic of China , 76 Fed. Reg. 76,690 (Dep't Commerce Dec. 8, 2011), Multilayered Wood Flooring From the People's Republic of China , 77 Fed. Reg. 5,484 (Dep't Commerce Feb. 3, 2012) ("Order"). On the 2016 anniversary month of the Order, the domestic industry petitioners Coalition for American Hardwood Parity requested review of the 2015-2016 period. See Pet'rs’ Req. for Admin. Rev. (Dec. 30, 2017), P.R. 14; Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Admin. Rev. , 81 Fed. Reg. 86,694 (Dep't Commerce Dec. 1, 2016) ; see also 19 U.S.C. § 1675(a)(1). Commerce subsequently identified 115 exporters, producers, or importers of the flooring as subjects of the review in its Initiation of Antidumping & Countervailing Duty Administrative Reviews , 82 Fed. Reg. 10,457 (Dep't Commerce Feb. 13, 2017), as corrected by Initiation of Antidumping & Countervailing Duty Administrative Reviews. , 82 Fed. Reg. 13,795 (Dep't Commerce Mar. 15, 2017). See Respondent Selection Mem. (Apr. 7, 2017), P.R. 161 ("RSM").
In the initiation notices, Commerce stated that China was a nonmarket economy country1 and therefore that it would employ its nonmarket economy policy of applying the rebuttable presumption that all respondents were subject to state control (the "NME Policy"). See 82 Fed. Reg. at 13,796. Respondents that could rebut this presumption—by providing evidence of de jure decentralized control from the state, including "an absence of restrictive stipulations associated with an individual exporter's business and export licenses" and also evidence that their "export activities"2 (or rather "export functions"3 ) are not subject de facto to Chinese governmental control—would be entitled to receive a rate that is separate from the country-wide rate assigned to all companies or entities that are presumptively considered state-controlled as part of an amalgamated "NME entity." See U.S. Dep't Commerce, Import Administration Policy Bulletin 05.1 (Apr. 5, 2005), https://enforcement.trade.gov/policy/bull05-1.pdf ("Policy Bulletin 05.1").
Jilin was among seventy-two firms that submitted a request for separate rate status. See Decision Mem. for the Preliminary Results of Antidumping Duty Admin. Rev.: Multilayered Wood Flooring from the People's Republic of China; 2015-2016 (Jan. 2, 2018), P.R. 308 ("PDM") at 10. Jilin's separate rate certification stated that it had been granted separate rate status in the previous administrative review. See Jilin Separate Rate Certification (Mar. 14, 2017), P.R. 97. Jilin had also received a separate rate (i.e. , the "all-others" rate) in the initial investigation and in each of the four preceding administrative reviews. The company reported, as required, that it was not under the control of the Chinese government de jure nor were its export functions subject to governmental control de facto , and it provided documentation to support its claim. See Jilin Separate Rate Certification.
Thereafter, relying on 19 U.S.C. § 1677f-1(c)(2), the Department selected Jilin and Jiangsu Senmao Bamboo and Wood Industry Co., Ltd. ("Jiangsu")4 as "mandatory respondents," as they accounted for the "largest" volume of subject merchandise. See RSM at 7. The Department then sent its usual antidumping questionnaires to Jilin and Jiangsu.
Between May and September 2017, Jilin timely responded to Commerce's requests for information in sections A, C, and D of the original questionnaire, which included detailed factor-of-production calculations. Jilin also provided timely responses to four lengthy supplemental questionnaires detailing its operations and ownership structure, asserting that it operated independently of the Chinese government, providing all of the other information requested regarding its operations, and submitting surrogate value information to enable Commerce to calculate an individual margin based on its factors of production. See Pl.’s Br. 28-29; see also Jilin Section A Resp. (May 16, 2017), P.R. 202-207. There is no indication on the record that Commerce ever called into question the accuracy and adequacy of Jilin's responses to the questionnaires, or that Jilin ever failed to cooperate or provided untimely responses to Commerce's requests for information. See Pl.’s Reply 10.
Commerce issued its Preliminary Decision Memorandum and accompanying Preliminary Separate Rate Analysis for Jilin on January 2, 2018. The Department preliminarily determined that Jilin was not entitled to a separate rate because it had not demonstrated an absence of de facto governmental control as to its export functions. See PDM at 12; Preliminary Separate Rate Analysis for Jilin (Jan. 2, 2018), C.R. 208, P.R. 309 ("SRM") at 1, 6. Commerce's specific finding on state control concerned ownership of Jilin's shares, and the Chinese government's ability to appoint members of Jilin's board of directors and key operational positions. See SRM at 5-6.
In its Final Results, Commerce continued to find that Jilin had not qualified for a separate rate but that sixty-nine of the seventy-two companies requesting a separate rate had qualified for one. Jiangsu, the only other mandatory respondent, was one of those that qualified for a separate rate. Commerce calculated Jiangsu's rate as de minimis (0.00 percent) and ultimately used this rate as the all-others rate for the other separate rate respondents. See Final Results, 83 Fed. Reg. at 35,462 -63. Finding that Jilin was not entitled to a separate rate, Commerce apparently halted any further examination of Jilin's individual data and selected the pre-existing 25.62 percent China-wide rate5 for Jilin. See Final IDM at 8; Final Results, 83 Fed. Reg. at 35,464. Jilin brought its objections here.
The court will sustain a determination by Commerce 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)(i).
On the issue of whether Jilin is entitled to a separate rate, the question concerns governmental control over Jilin's export functions. See Policy Bulletin 05.1. Jilin contends Commerce (1) ignored the evidence it placed on the record of the absence of government involvement, (2) made certain assertions unsupported by substantial evidence, and (3) misapplied the presumption of state control. See Pl.’s Br. 13-27. In particular, Jilin argues that Commerce's reliance late in the administrative review (not until the Final IDM), on the Aluminum Foil investigation ("Aluminum Foil "),6 which was a separate proceeding that concerned, among other issues, the status of labor unions in China, deprived the parties of the opportunity to rebut, clarify, or correct new factual material placed on the administrative record by the Department as directed by 19 C.F.R. § 351.301(c)(4). See Pl.’s Reply 8 (citing Final IDM at 8).
In the Final Results, Commerce found that Jilin was not entitled to a dumping rate separate from the China-wide entity because it had not demonstrated that its export "activities" were de facto free from government control:
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