Jiangsu Senmao Bamboo & Wood Indus. Co. v. United States , 2020 CIT 178 ( 2020 )

Slip Op. 20-178
UNITED STATES COURT OF INTERNATIONAL TRADE
JIANGSU SENMAO BAMBOO AND
WOOD INDUSTRY CO., LTD., et al.,
Plaintiffs,
and
GUANGDONG YIHUA TIMBER
INDUSTRY CO., LTD., et al.,
Plaintiff-Intervenors, Before:
Timothy C. Stanceu, Chief Judge
v.
Consol. Court No. 15-00225
UNITED STATES,
Defendant,
and
COALITION FOR AMERICAN
HARDWOOD PARITY, et al.,
Defendant-Intervenors.
OPINION
[Sustaining an agency determination issued in response to the court’s order in an
antidumping duty proceeding.]
Dated: December 10, 2020
Jeffrey S. Neeley, Husch Blackwell, LLP, of Washington, D.C., for plaintiffs and
defendant-intervenors Jiangsu Senmao Bamboo and Wood Industry Co., Ltd., Baishan
Huafeng Wooden Product Co., Ltd., Changbai Mountain Development and Protection
Zone Hongtu Wood Industrial Co., Ltd., Chinafloors Timber (China) Co., Ltd., Dalian
Consol. Court No. 15-00225 Page 2
Kemian Wood Industry Co., Ltd., Dalian Qianqiu Wooden Product Co., Ltd., Dasso
Industrial Group Co., Ltd., Dongtai Fuan Universal Dynamics, LLC., Dun Hua Sen Tai
Wood Co., Ltd., Dunhua City Wanrong Wood Industry Co., Ltd., Fusong Jinlong
Wooden Group Co., Ltd., Fusong Jinqiu Wooden Product Co., Ltd., Fusong Qianqiu
Wooden Product Co., Ltd., Guangzhou Panyu Kangda Board Co., Ltd., Hunchun Forest
Wolf Wooden Industry Co., Ltd., Jiafeng Wood (Suzhou) Co., Ltd., Jiangsu Guyu
International Trading Co., Ltd., Jiangsu Kentier Wood Co., Ltd., Jiangsu Mingle
Flooring Co., Ltd., Jiangsu Simba Flooring Co., Ltd., Jiashan HuiJiaLe Decoration
Material Co., Ltd., Jilin Forest Industry Jinqiao Flooring Group Co., Ltd., Kemian Wood
Industry (Kunshan) Co., Ltd., Nanjing Minglin Wooden Industry Co., Ltd., Puli Trading
Limited, Shanghai Lizhong Wood Products Co., Ltd./The Lizhong Wood Industry
Limited Company of Shanghai/Linyi Youyou Wood Co., Ltd., Suzhou Dongda Wood
Co., Ltd., Tongxiang Jisheng Import And Export Co., Ltd., Zhejiang Fudeli Timber
Industry Co., Ltd., and Zhejiang Shiyou Timber Co., Ltd.
Gregory S. Menegaz, Alexandra H. Salzman, James K. Horgan, and Judith L.
Holdsworth, deKieffer & Horgan, PLLC, of Washington, D.C., for plaintiffs Dunhua City
Jisen Wood Industry Co., Ltd. and Yingyi-Nature (Kunshan) Wood Industry Co., Ltd.
Jill A. Cramer, Kristin H. Mowry, Jeffrey S. Grimson, and Sarah M. Wyss, Mowry &
Grimson, PLLC, of Washington, D.C., argued for plaintiff, plaintiff-intervenor, and
defendant-intervenor Fine Furniture (Shanghai) Limited.
Harold D. Kaplan and Craig A. Lewis, Hogan Lovells US LLP, of Washington, D.C.,
for plaintiffs Armstrong Wood Products (Kunshan) Co., Ltd. and Armstrong Flooring,
Inc.
Mark R. Ludwikowski, Clark Hill PLC, of Washington, D.C., for plaintiff and
plaintiff-intervenor Lumber Liquidators Services, LLC.
Ronald M. Wisla and Lizbeth R. Levinson, Fox Rothschild LLP, of Washington,
D.C., for plaintiffs, plaintiff-intervenors, and defendant-intervenors BR Custom Surface,
CDC Distributors, Inc., CLBY Inc. doing business as D&M Flooring, Custom Wholesale
Floors, Inc., Dalian Penghong Floor Products Co., Ltd., Doma Source LLC, Dunhua City
Hongyuan Wooden Products Co., Ltd., Galleher Corporation, HaiLin LinJing Wooden
Products, Ltd., Hangzhou Hanje Tec Co., Ltd., Hangzhou Zhengtian Industrial Co.,
Ltd., Huzhou Chenghang Wood Co., Ltd., Huzhou Fulinmen Imp. & Exp. Co., Ltd.,
Metropolitan Hardwood Floors, Inc., Mudanjiang Bosen Wood Industry Co., Ltd.,
Nakahiro Jyou Sei Furniture (Dalian) Co., Ltd., Pinnacle Interior Elements, Ltd., Real
Consol. Court No. 15-00225 Page 3
Wood Floors, LLC, Shanghai Eswell Timber Co., Ltd., Shanghai Shenlin Corporation,
Shenyang Haobainian Wooden Co., Ltd., Shenzhenshi Huanwei Woods Co., Ltd., Swiff
Train Co., Timeless Design Import LCC, V.A.L. Floors, Inc., Wego Chemical & Mineral
Corp., Xuzhou Shenghe Wood Co., Ltd., Zhejiang Dadongwu Greenhome Wood Co.,
Ltd., Zhejiang Fuma Warm Technology Co., Ltd., Zhejiang Longsen Lumbering Co.,
Ltd., and Zhejiang Tianzhen Bamboo & Wood Development Co., Ltd.
John R. Magnus and Sheridan S. McKinney, Tradewins LLC, of Washington, D.C.,
for plaintiff, plaintiff-intervenor, and defendant-intervenor Old Master Products, Inc.
Kristin H. Mowry, Jill A. Cramer, and Sarah M. Wyss, Mowry & Grimson, PLLC, of
Washington, D.C., for plaintiff-intervenor Guangdong Yihua Timber Industry Co., Ltd.
Timothy C. Brightbill, Tessa V. Capeloto, and Stephanie M. Bell, Wiley Rein, LLP, of
Washington, D.C., for defendant-intervenor Coalition for American Hardwood Parity.
Tara K. Hogan, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice, of Washington D.C., for defendant United States. With her on the brief were
Joseph H. Hunt, Assistant Attorney General and Jeanne E. Davidson, Director. Of counsel
on the brief was Rachel Bogdan, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce.
Stanceu, Chief Judge: The plaintiffs in this consolidated action contested the
final determination of the International Trade Administration, U.S. Department of
Commerce (“Commerce” or the “Department”), which concluded the second periodic
administrative review of an antidumping duty order on multilayered wood flooring
from the People’s Republic of China (“China”). Multilayered Wood Flooring From the
People’s Republic of China: Final Results of Antidumping Duty Administrative Review and
Final Results of New Shipper Review; 2012-2013, 80 Fed. Reg. 41,476 (Int’l Trade Admin.
July 15, 2015) (“Final Results”).
Consol. Court No. 15-00225 Page 4
Before the court is the “Second Remand Redetermination” submitted by the
Department in response to the order of the court in Jiangsu Senmao Bamboo & Wood Ind.
Co., Ltd. v. United States, 44 CIT __, 435 F. Supp. 3d 1278 (2020) (“Senmao II”). Final
Results of Redetermination Pursuant to Court Order (May 8, 2020), ECF No. 161-1
(“Second Remand Redetermination”). Also before the court are three comment
submissions on the Second Remand Redetermination: (1) a submission made on behalf
of various plaintiffs (the “Senmao Plaintiffs”), Senmao Pls.’ Comments on Results of
Redetermination pursuant to Ct. Order from Slip Op. 20-31 (Mar. 11, 2020) (June 8,
2020), ECF No. 164 (“Senmao Pls.’ Comments”); (2) a submission by Guangdong Yihua
Timber Indus. Co., Ltd. (“Yihua”), Pl.-Int. Guangdong Yihua Timber Indus. Co., Ltd.’s
Comments in Support of May 8, 2020 Final Results of Redetermination pursuant to Ct.
Order (June 8, 2020), ECF No. 166 (“Yihua’s Comments”); and (3) a submission by the
Coalition for American Hardwood Parity (the “Coalition”), Coalition for American
Hardwood Parity’s Comments on the Results of Remand Redetermination (June 8,
2020), ECF No. 165 (“Def.-Int.’s Comments”). Defendant submitted a reply to these
comment submissions. Def.’s Reply to Comments on Second Remand Redetermination
(June 23, 2020), ECF No. 167.
The Senmao Plaintiffs and Yihua comment that the Second Remand
Redetermination complies with the court’s order in Senmao II and must be sustained.
Senmao Pls.’ Comments 2; Yihua’s Comments 2. The Coalition, although expressing
Consol. Court No. 15-00225 Page 5
disagreement with a ruling reached in Senmao II, agrees that the Second Remand
Redetermination is consistent with the court’s order. Def.-Int.’s Comments 1–2. There is
no objection to the Second Remand Redetermination from any party. The court sustains
the Second Remand Redetermination.
I. BACKGROUND
Background on this litigation is presented in Senmao II, 435 F. Supp. 3d at 1281
and in Jiangsu Senmao Bamboo & Wood Ind. Co., Ltd. v. United States, 42 CIT __, 322
F. Supp. 3d 1308, 1313–16 (2018) (“Senmao I”), and is supplemented briefly herein.
In the Final Results, Commerce assigned individual weighted-average dumping
margins to two respondent exporter/producers: Dalian Dajen Wood Co., Ltd. was
assigned a zero margin, and Jiangsu Senmao Bamboo and Wood Industry Co., Ltd.
(“Senmao”) was assigned a margin of 13.74%. Final Results, 80 Fed. Reg. at 41,478.
Commerce assigned the 13.74% margin determined for Senmao to the numerous
respondents Commerce considered to have established independence from the
government of China but that were not selected for individual examination (the “non-
selected” companies). Id. Responding to the court’s decision in Senmao I, Commerce
redetermined Senmao’s margin, reducing it from 13.74% to 6.55%, and assigned the
6.55% margin to 46 non-selected companies. Senmao II, 435 F. Supp. 3d at 1281 (citing
Final Results of Redetermination Pursuant to Ct. Order (June 3, 2019), ECF No. 145-1).
Consol. Court No. 15-00225 Page 6
The only issue remaining in this litigation is the effectuation of the court’s order
in Senmao II directing Commerce to reverse its decision to adjust downward the export
prices of subject merchandise to account for what the Department considered
irrecoverable value-added tax (the “VAT adjustment”). In Senmao I, 322 F. Supp. 3d at
1345, and Senmao II, 435 F. Supp. 3d at 1300, the court held that the Department’s VAT
adjustment was contrary to law. The court held in Senmao II that “[t]he Department’s
decision in the First Remand Redetermination to maintain its adjustments under
19 U.S.C. § 1677 a(c)(2)(B) to the starting prices used to determine export price was
contrary to law in relying upon an invalid interpretation of the Tariff Act, which does
not permit those deductions.” 435 F. Supp. 3d at 1300. The court ordered Commerce to
“issue a new determination that does not commit this error.” Id.
In the process of responding to the court’s order in Senmao II, the Department
circulated a draft remand redetermination to the parties that did not modify the 6.55%
margins assigned to Senmao and the non-selected respondents. Second Remand
Redetermination 5. Certain plaintiffs commented that Commerce, while stating in the
draft an intention to remove its VAT adjustment, did not calculate a redetermined
margin that accomplished this. The Department acknowledged that it “inadvertently
did not exclude the downward VAT adjustment in our margin calculation in the Draft
Remand.” Id. at 7. Stating in the Second Remand Redetermination that it had corrected
this error, Commerce recalculated Senmao’s margin, reducing it by 2.63%, from 6.55%
Consol. Court No. 15-00225 Page 7
to 3.92%. Id. at 8. Commerce assigned the 3.92% rate to non-selected companies not
previously excluded from the antidumping duty order. Id.
II. DISCUSSION
Commerce states in the Second Remand Redetermination that “[i]n light of the
Court’s decision, we have reviewed our calculations for Senmao and have excluded any
downward adjustment for irrecoverable VAT that may have been applied to Senmao.”
Id. at 3. Concluding in the draft version of the Second Remand Redetermination that it
had made no such downward adjustment and therefore did not exclude one, Commerce
stated in the final version that in response to comments and “upon further review of the
record” it concluded that it had adjusted Senmao’s “U.S. Net Price by 92 percent,
making an eight percent irrecoverable VAT adjustment” and that “consistent with the
Court’s remand order, we have removed the irrecoverable VAT downward adjustment
to Senmao’s export price.” Id. at 7.
Commerce added that “we respectfully disagree with the Court’s finding that
Commerce impermissibly construed section 772(c)(2)(B) of the [Tariff] Act [19 U.S.C.
§ 1677a(c)(2)(B)] with respect to irrecoverable VAT, and maintain that our current
practice is consistent with the statute and thus in accordance with law. For this reason,
we are conducting this remand under respectful protest.” Id. at 8. In their comments,
defendant-intervenors also take issue with the court’s interpretation of this statutory
provision. Def.-Int.’s Comments 1–2. While stating its objection, neither party provides
Consol. Court No. 15-00225 Page 8
any analysis to explain its disagreement with the court’s holding that the Department’s
VAT deductions were prohibited by the Tariff Act.
The court notes, additionally, that Commerce, in the Second Remand Redeter-
mination, does not explain its recalculation of Senmao’s margin in a way allowing the
court to ascertain whether the elimination of the 8% downward adjustment to U.S. price
correctly resulted in a margin reduction of 2.63%. Nevertheless, the court also notes
that no party contests this recalculation. Any objection to the calculation, therefore, is
waived.
III. CONCLUSION
For the reasons stated above, the court concludes that the Second Remand
Redetermination must be sustained. Judgment will enter accordingly.
_____________________________
/s/ Timothy C. Stanceu
Timothy C. Stanceu, Chief Judge
Dated: December 10, 2020
New York, New York