Am. Mfrs. of Multilayered Wood Flooring v. United States , 2024 CIT 13 ( 2024 )

Slip Op. 24-13
UNITED STATES
COURT OF INTERNATIONAL TRADE
Court No. 21-00595
AMERICAN MANUFACTURERS OF
MULTILAYERED WOOD FLOORING,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
JIANGSU GUYU INTERNATIONAL
TRADING CO., LTD., et al.,
Defendant-Intervenors.
Before: M. Miller Baker, Judge
OPINION
[The court sustains the Department of Commerce’s re-
mand redetermination.]
Dated: February 8, 2024
Mark Ludwikowski, Kelsey Christensen, and Sally Al-
ghazali, Clark Hill PLC of Washington, DC, on the
comments for Defendant-Intervenors.
Brian M. Boynton, Principal Deputy Assistant Attor-
ney General; Patricia M. McCarthy, Director; Tara K.
Ct. No. 21-00595 Page 2
Hogan, Assistant Director; and Brendan Jordan, Trial
Attorney, Commercial Litigation Branch, Civil Divi-
sion, U.S. Department of Justice of Washington, DC,
on the comments for Defendant. Of counsel on the com-
ments was Alexander Fried, Office of the Chief Coun-
sel for Trade Enforcement and Compliance, U.S. De-
partment of Commerce of Washington, DC.
Timothy C. Brightbill, Maureen E. Thorson, Stephanie
M. Bell, Tessa V. Capeloto, and Theodore P.
Brackemyre, Wiley Rein LLP of Washington, DC, on
the comments for Plaintiff.
Baker, Judge: This matter returns following a re-
mand for the Department of Commerce to reconsider
its determination that a mandatory respondent in an
administrative review of an antidumping order on Chi-
nese wood flooring was ineligible for a separate rate. If
the company were so eligible, Commerce then would
have to recalculate the duty for separate-rate produc-
ers not selected as respondents.
On remand, Commerce concluded under protest
that the mandatory respondent is eligible and accord-
ingly recalculated the margin for non-investigated
separate-rate companies. Finding that determination
supported by substantial evidence, the court sustains
it.
I
This case involves the 2018–2019 review of an an-
tidumping order on multilayered wood flooring from
Ct. No. 21-00595 Page 3
China. 1 In the preceding review, Commerce found that
the Fusong Jinlong Group (Jinlong) had shown inde-
pendence from the Chinese government and was
therefore eligible for a separate rate. See Multilayered
Wood Flooring from the People’s Republic of China: Fi-
nal Results of Antidumping Duty Administrative Re-
view and New Shipper Review and Final Determina-
tion of No Shipments: 2017–2018, 85 Fed. Reg. 78,118,
78,119 (Dep’t Commerce Dec. 3, 2020).
When the Department opened the review at issue
here, it stated that companies “selected as mandatory
respondents . . . will no longer be eligible for separate
rate status unless they respond” to a questionnaire.
Initiation of Antidumping and Countervailing Duty
Administrative Reviews, 85 Fed. Reg. 6896, 6897
(Dep’t Commerce Feb. 6, 2020), Appx1156.
Jinlong filed a “certification”—essentially, a form
allowing for a streamlined renewal of its separate rate.
Appx1075. The Department then selected it as a man-
datory respondent and issued a questionnaire. In April
2020, the company advised that it was “unable to re-
spond . . . for reasons associated with the ongoing
COVID-19 health crisis.” Appx1268.
1 See Multilayered Wood Flooring from the People’s Repub-
lic of China: Final Determination of Sales at Less Than
Fair Value, 76 Fed. Reg. 64,318, 64,321 (Dep’t Commerce
Oct. 18, 2011).
Ct. No. 21-00595 Page 4
Commerce denied the company’s certification be-
cause of this failure. Appx1055–1056. 2 As a result, the
Department calculated the separate rate for non-in-
vestigated entities based entirely on the zero percent
duty assigned to the other mandatory respondent
(which did receive a separate rate). Appx1057–1058. 3
A group of domestic wood flooring producers then
brought this suit challenging the Department’s denial
of Jinlong’s certification and, relatedly, the calculation
2 Jinlong instead received the 85.13 percent China-wide
rate that applies by default to producers not eligible for a
separate rate. Appx1013–1014.
3 Neither the Tariff Act of 1930, as amended, nor Com-
merce’s regulations address how the Department should
establish the separate rate for companies not individually
examined in an antidumping investigation or review of im-
ports from a country with a nonmarket economy. In a case
involving a market-economy country, the statute requires
the Department to calculate an “all others” rate for non–
individually investigated exporters and producers; that
margin is to be “an amount equal to the weighted average
of the estimated weighted average dumping margins estab-
lished for exporters and producers individually investi-
gated.” 19 U.S.C. § 1673d(c)(5)(A). For a nonmarket-econ-
omy country such as China, Commerce uses the “all-others”
mechanism to determine the separate rate. See Changzhou
Hawd Flooring Co. v. United States, 848 F.3d 1006, 1011
(Fed. Cir. 2017); see also New Am. Keg v. United States, Ct.
No. 20-00008, Slip Op. 21-30, at 9 n.6, 2021 WL 1206153,
at *3 n.6 (CIT Mar. 23, 2021) (explaining that “the ‘sepa-
rate rate’ applied to eligible producers and exporters . . . is
analogous to the ‘all-others rate’ applied to non-investi-
gated companies from market economy countries”). The
Department’s final determination here cited that mecha-
nism. Appx1034–1035.
Ct. No. 21-00595 Page 5
method used for the non-investigated separate-rate
companies. If Jinlong were certified, its duty—if
greater than zero—would have the domino effect of
raising the separate-rate companies’ margins. In ef-
fect, the battle over Jinlong’s eligibility is a proxy war
waged by the domestic producers against non-investi-
gated Chinese producers eligible for a separate rate,
several of whom intervened to defend Commerce’s de-
cision. 4
Following briefing and argument, the court found
from the bench that the Department’s denial of
Jinlong’s certification was unlawful. ECF 52, at 32:5–
33:22 (transcript). “This is, by [the court’s] lights, ar-
bitrary and capricious under the [Administrative Pro-
cedure Act] because Commerce is treating similarly
situated [entities 5] differently” and because the De-
partment failed to address the company’s separate-
rate certification on the merits. Id. at 33:13–18. “Ra-
ther[,] Commerce viewed it as inadequate . . . solely
because [the company] had the bad luck to be chosen
as [a] mandatory respondent and regardless of
whether the certification would have been adequate
had the company not been so chosen.” Id. at 33:18–22.
The court expressed concern that certification was suf-
ficient for some companies but not for others: “Without
a rational explanation, the [c]ourt cannot sustain
Commerce’s determination here.” Id. at 34:3–9.
4 Jinlong, however, did not intervene.
5 The court misspoke when it used the term “respondents”
rather than “entities.”
Ct. No. 21-00595 Page 6
II
On remand, the Department reevaluated Jinlong’s
separate-rate eligibility under protest, 6 found it so eli-
gible, and set a duty based on facts otherwise available
with an adverse inference. Appx1300. 7 Commerce as-
signed the company a margin of 85.13 percent, the
highest calculated rate for any respondent from a com-
pleted segment of the proceeding. Appx1307. 8
The Department then had to calculate a margin for
the companies that received separate rates without be-
ing individually investigated. The problem was that of
the two mandatory respondents, one received a zero
duty and the other (Jinlong) received a rate based en-
tirely on facts otherwise available. Commerce noted
that in such a circumstance, the statute allows it to
“use any reasonable method . . . , including averaging
the estimated weighted dumping margins determined
for the exporters and producers individually in-
6 “[W]hen Commerce advocates a position zealously and
must abandon that position in order to comply with a rul-
ing of the U.S. Court of International Trade, Commerce
preserves its right to appeal if it adopts a complying posi-
tion under protest.” Saha Thai Steel Pipe Pub. Co. v.
United States, 583 F. Supp. 3d 1350, 1353 (CIT 2021) (cit-
ing Viraj Grp., Ltd. v. United States, 343 F.3d 1371, 1376
(Fed. Cir. 2003)).
7 For an explanation of facts otherwise available with an
adverse inference, see Hung Vuong Corp. v. United States,
483 F. Supp. 3d 1321, 1336–39 (CIT 2020).
8 This was the same rate assigned to the China-wide entity,
see above note 2, so the net result for Jinlong remained un-
changed.
Ct. No. 21-00595 Page 7
vestigated.” Appx1308–1309 (quoting 19 U.S.C.
§ 1673d(c)(5)(B)). The Department added that the
Statement of Administrative Action accompanying the
Uruguay Round Agreements Act (SAA) 9 states that
the “expected method” in such cases “will be to weight-
average” the zero, de minimis, and facts-otherwise-
available margins, “provided that volume data is
available.” Appx1309 (quoting SAA, H.R. Doc. 103–
316, vol. 1, at 873, 1994 U.S.C.C.A.N. 4040, 4201). If
the “expected method” is not feasible, or results in a
figure that is not reasonably reflective of potential
dumping margins for non-investigated companies, the
SAA allows the use of “other reasonable methods.”
SAA, H.R. Doc. 103–316, vol. 1, at 873, 1994
U.S.C.C.A.N. at 4201.
Because Jinlong did not answer the questionnaire,
Commerce could not calculate a weighted average of
the two rates. Appx1309. It therefore assigned the sim-
ple average—42.57 percent—as the separate rate for
all eligible non-examined producers. Id.
In this litigation round, the private litigants have
traded places. The domestic producers, who opposed
the original determination, support the remand re-
9 The SAA “shall be regarded as an authoritative expres-
sion by the United States concerning the interpretation
and application of the Uruguay Round Agreements and
this Act in any judicial proceeding in which a question
arises concerning such interpretation or application.”
Comm. Overseeing Action for Lumber Int’l Trade Investiga-
tions or Negots. v. United States, 66 F.4th 968, 972 (Fed.
Cir. 2023) (quoting 19 U.S.C. § 3512(d)).
Ct. No. 21-00595 Page 8
sults, while Defendant-Intervenors, who supported
that determination, now oppose them.
III
The domestic producers brought this suit under 19
U.S.C. § 1516a(a)(2)(A)(i)(I) and (B)(iii). Subject-mat-
ter jurisdiction is conferred by 28 U.S.C. § 1581(c).
The standard of review for a remand redetermina-
tion is the same as that on previous review. Bethlehem
Steel Corp. v. United States, 223 F. Supp. 2d 1372,
1375 (CIT 2002). In § 1516a(a)(2) actions, “[t]he court
shall hold unlawful any determination, finding, or con-
clusion found . . . to be unsupported by substantial ev-
idence on the record, or otherwise not in accordance
with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). That is, the
question is not whether the court would have reached
the same decision on the same record—rather, it is
whether the administrative record as a whole permits
Commerce’s conclusion.
Substantial evidence has been defined as more
than a mere scintilla, as such relevant evidence
as a reasonable mind might accept as adequate
to support a conclusion. To determine if substan-
tial evidence exists, we review the record as a
whole, including evidence that supports as well
as evidence that fairly detracts from the sub-
stantiality of the evidence.
Nippon Steel Corp. v. United States, 337 F.3d 1373,
1379 (Fed. Cir. 2003) (cleaned up).
Ct. No. 21-00595 Page 9
IV
Defendant-Intervenors argue that Commerce did
not act arbitrarily and capriciously in the first in-
stance by denying Jinlong a separate rate. ECF 65, at
5–6. The court, however, declines to reconsider its
prior ruling to the contrary.
Defendant-Intervenors do not challenge the De-
partment’s decision to accept the company’s certifica-
tion on its own merits. They instead argue that even if
Commerce properly assigned Jinlong a separate rate,
the agency improperly calculated their margins by av-
eraging the company’s rate with the other mandatory
respondent’s. Id. at 7. Despite raising several theoret-
ical policy concerns, id. at 8–10, they fail to address
Congress’s mandate (in the market-economy context)
that Commerce apply the methodology used here 10
where all mandatory respondents eligible for a sepa-
rate rate receive duties that are zero, de minimis, or
based entirely on facts otherwise available. See above
note 3. Defendant-Intervenors thus “cannot contend
that methodology employing [such] margins is disfa-
10 Commerce’s only deviation from the “expected method”
was that it used the simple average, rather than the
weighted average, of the two rates assigned to the manda-
tory respondents. Appx1309. The Department explained
that it did so because the lack of sales quantity and value
data from Jinlong made calculating a weighted average im-
possible. Id. The SAA envisions this possibility by condi-
tioning use of the “expected method” on whether “volume
data is available.” H.R. Doc. 103–316, vol. 1, at 873, 1994
U.S.C.C.A.N. at 4201. Commerce’s reasoning therefore suf-
fices to explain why the use of a simple average is a “rea-
sonable method.”
Ct. No. 21-00595 Page 10
vored when Congress has unmistakably explained
that it is, in fact, preferred.” Albemarle Corp. v. United
States, 821 F.3d 1345, 1354 (Fed. Cir. 2016). 11 As
Plaintiffs explain, “While Intervenors argue that it
was inherently unfair for Commerce to rely in part on
an adverse rate in determining the non-examined com-
panies’ margins, such a position cannot be squared
with Congress’s expressed expectation that [the De-
partment] do just that.” ECF 66, at 6.
The government correctly observes that Defendant-
Intervenors make “no arguments outside of critiquing
the expected method itself.” ECF 67, at 14. In that re-
spect, their avenue for relief lies with Congress, not
with this court. See Wyeth v. Kappos, 591 F.3d 1364,
1370 (Fed. Cir. 2010) (“[T]his court does not take upon
itself the role of correcting all statutory inequities,
even if it could. In the end, the law has put a policy in
effect that this court must enforce, not criticize or cor-
rect.”).
11 The court also approvingly cited a case reasoning that
because the statute specifically refers to averaging the
zero, de minimis, and facts-otherwise-available rates “as
the sole provided example of a ‘reasonable method[,] . . .’
[i]t is impermissible to interpret this provision as express-
ing a preference against the use of such methodology in
such situations. This must particularly be the case when
the SAA expressly states that the allegedly disfavored
methodology is in fact the expected method in such cases.”
Id. at 1354 n.8 (cleaned up) (quoting Amanda Foods (Vi-
etnam) Ltd. v. United States, 714 F. Supp. 2d 1282, 1291
(CIT 2010)).
Ct. No. 21-00595 Page 11
* * *
For the reasons outlined above, the court sustains
Commerce’s redetermination. A separate judgment
will issue. See USCIT R. 58(a).
Dated: February 8, 2024 /s/ M. Miller Baker
New York, NY Judge