Marvin Furniture (Shanghai) Co. Ltd. v. United States

Slip Op. 12-109
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Nicholas Tsoucalas, Senior Judge
___________________________________
MARVIN FURNITURE (SHANGHAI) CO. :
LTD., :
:
Plaintiff, :
:
v. : Court No.: 12-00100
:
UNITED STATES, :
:
Defendant, :
:
and :
:
AMERICAN FURNITURE MANUFACTURERS :
COMMITTEE FOR LEGAL TRADE and :
VAUGHAN-BASSETT FURNITURE :
COMPANY, INC., :
:
Defendant-Intervenors. :
:
OPINION
Held: The Department of Commerce’s decision to rescind a new shipper
review is affirmed.
Dated: August 23, 2012
Neville Peterson, LLP, (John M. Peterson and Richard F. O’Neill)
for Marvin Furniture (Shanghai) Co. Ltd., Plaintiff.
Stuart F. Delery, Acting Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director, Civil
Division, United States Department of Justice, (Carrie A. Dunsmore);
Shana Hofstetter, Of Counsel, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, for the United
States, Defendant.
King & Spalding, LLP, (Joseph W. Dorn, J. Michael Taylor, and P.
Lee Smith) for American Furniture Manufacturers Committee for Legal
Trade and Vaughan-Bassett Furniture Company, Inc., Defendant-
Intervenors.
Court No. 12-00100 Page 2
TSOUCALAS, Senior Judge: This matter comes before the Court upon
the Motion for Judgment on the Agency Record filed herein by
Plaintiff, Marvin Furniture (Shanghai) Co. Ltd. (“Marvin”). Marvin
challenges the Department of Commerce’s (“Commerce”) decision to
rescind a new shipper review it had initiated of certain entries made
by Marvin of wooden bedroom furniture. Marvin asserts that because
it timely requested a new shipper review for which it was otherwise
eligible, Commerce’s rescission was not supported by substantial
evidence or in accord with the law. Defendant, United States and
Defendant-Intervenors, American Furniture Manufacturers Committee for
Legal Trade and Vaughan-Bassett Furniture Company, Inc. (collectively
“AFMC”), argue that Marvin, in fact, did not meet the prerequisites
necessary for a new shipper review, and that Commerce’s decision was
therefore supported by substantial evidence and in accord with the
law. The Court concludes that Commerce’s rescission was supported by
record evidence and a reasonable application of the relevant
statutory and regulatory provisions, and affirms the determination.
BACKGROUND
In 2005, the United States Department of Commerce (“Commerce”)
issued an antidumping duty order on wooden bedroom furniture from the
People’s Republic of China (“PRC”). 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 (Jan. 4, 2005). Subsequent to the entry of this
Court No. 12-00100 Page 3
order, any party making entries of subject merchandise not assigned
a special rate by Commerce was required to deposit estimated duties
at the PRC-wide rate of 216.01%.
Marvin manufactures wooden furniture in the PRC, and is owned by
a party who also owns an Australian company named Boori International
Pty. Ltd. (“Boori Int’l”). Boori Int’l distributes a line of high-
end juvenile furniture that is popular in Australia, the United
Kingdom, Ireland, and several other countries. In order to begin
selling goods in the United States, the owner established Boori USA,
LLC, and made entries of wooden bedroom furniture into the United
States on June 20, 2011. Upon making these entries, Boori USA
discovered that it was required to make antidumping duty deposits at
the PRC-wide rate of 216.01%. In an attempt to obtain a lower rate,
Marvin requested that Commerce initiate a new shipper review of its
entries. See Letter from Neville Peterson to the Secretary of
Commerce, Re: Request for Initiation of Antidumping New Shipper
Review: Wooden Bedroom Furniture from the People’s Republic of China,
Case Number: A570-890 (July 30, 2011) (“Initiation Request”), Public
Rec. 1, Confidential Rec. 1.1 In the Initiation Request, Marvin
indicated that it had not exported subject merchandise to the United
States prior to June 2011. Initiation Request, Ex. D.
Per routine practice, Commerce asked the United States Customs
1
Hereinafter all documents in the public record will be
designated “PR” and all documents in the confidential record
designated “CR.”
Court No. 12-00100 Page 4
and Border Protection to confirm that Marvin had not made entries of
subject merchandise prior to the date stated in the Initiation
Request. This search turned up two entries of goods that had been
made by Marvin in September 2010, and Commerce issued a letter
soliciting comments from the parties regarding these entries. See
Letter from Import Administration to All Interested Parties (Aug. 19,
2011), PR 14, CR 4. On August 24, 2011, Marvin responded to
Commerce’s letter stating that while it had made entries in September
2010, the entries were of non-subject merchandise. See Letter from
Neville Peterson to the Secretary of Commerce, Re: Marvin Furniture
(Shanghai) Co. Ltd.; CBP Data Comments: Wooden Bedroom Furniture from
the People’s Republic of China, New Shipper Review (Aug. 24, 2011),
PR 16, CR 5. In reliance on Marvin’s August 24, 2011 letter, a
Commerce official signed the initiation notice the following day,
August 25, 2011, and the notice was published 6 days later. See
Wooden Bedroom Furniture from the People’s Republic of China:
Initiation of Antidumping Duty New Shipper Review, 76 Fed. Reg.
54,208 (Aug. 31, 2011).
Marvin subsequently filed responses to a questionnaire received
from Commerce indicating for the first time that the September 2010
entries had, in fact, contained subject goods, but added that the
goods were entered subject to a provision making them exempt from
payment of antidumping duties. See Letter from Neville Peterson to
the Secretary of Commerce, Re: Marvin Furniture (Shanghai) Co. Ltd.
Court No. 12-00100 Page 5
And Boori USA Inc.: Response to Supplemental Questionnaire; Wooden
Bedroom Furniture from the People’s Republic of China, Case Number:
A570-890 (Aug. 26, 2011), PR 24, CR 10. Subsequent filings by Marvin
confirmed that the first entry date contained in the Initiation
Request was incorrect, but Marvin maintained that the date of its
first entry of subject merchandise had not occurred more than a year
prior to the filing of the Initiation Request.2 See, e.g., Letter
from Neville Peterson to the Secretary of Commerce, Re: Marvin
Furniture (Shanghai) Co. Ltd. And Boori USA Inc.: Further Response to
Supplemental Questionnaire: Wooden Bedroom Furniture from the
People’s Republic of China (Aug. 31, 2011), PR 29, CR 13.
Despite Marvin’s assertions that all of its entries were made
within the year prior to filing its Initiation Request, Commerce
issued a preliminary rescission of the new shipper review, Wooden
Bedroom Furniture From the People’s Republic of China: Preliminary
Rescission of Antidumping Duty New Shipper Review, 77 Fed. Reg. 1,456(Jan. 10, 2012), and ultimately, a final rescission. Wooden Bedroom
Furniture From the People’s Republic of China: Final Rescission of
Antidumping Duty New Shipper Review, 77 Fed. Reg. 21,536 (Apr. 10,
2012) (“Final Rescission”). As a basis for its decision to rescind
2
The Court notes that neither the Government nor AFMC point
to evidence in the record indicating that Marvin did import
subject merchandise into the United States more than a year
before filing its Initiation Request. The fact that all of
Marvin’s entries were made within a year prior to the filing of
the Initiation Request is therefore not in dispute.
Court No. 12-00100 Page 6
the new shipper review of Marvin’s entries, Commerce stated that it
continues to find that Marvin Furniture's request for an
NSR does not meet the requirements for [a new shipper
review] under 19 CFR 351.214(b)(2)(iv)(A) and (B).
Specifically, Marvin Furniture's request for [a new
shipper review] did not contain documentation
establishing the date on which its subject merchandise
was first entered into the United States for consumption
and the volume of that first entry.
Final Rescission, 77 Fed. Reg. at 21,537-38.
On appeal, Marvin argues that it is entitled to a new shipper
review because it complied with the statutory and regulatory
requirements for eligibility. Marvin asserts that even if the
information in its Initiation Request was incorrect, it quickly
notified Commerce of the error. More importantly, Marvin relies on
the absence in the record of any evidence that it imported subject
merchandise more than an year before making its Initiation Request.
Marvin further asserts that Commerce’s decision to rescind the new
shipper review conflicts with the provisions of Section 782 of the
Tariff Act of 1930, as amended, 19 U.S.C. § 1677m3, which allows for
the correction of erroneous information submitted to Commerce.
The Government and AFMC counter that Commerce’s decision to
rescind the new shipper review was supported by the record evidence
because, notwithstanding its communications with Commerce, Marvin
never actually complied with the statutory and regulatory
3
All further citations to the Tariff Act of 1930 are to the
relevant provisions of Title 19 of the United States Code, 2006
edition.
Court No. 12-00100 Page 7
requirements for initiating a new shipper review. Specifically,
they argue that Marvin’s Initiation Request was infirm because it
did not sufficiently notify Commerce of the correct first date its
goods were entered, nor did Marvin ever properly document the nature
of its September 2010 entries. The Government further argues that
Commerce satisfied any relevant obligation it had under § 1677m.
JURISDICTION and STANDARD OF REVIEW
The Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii). The Court
will only disturb Commerce’s determination if it is “unsupported by
substantial evidence or otherwise not in accordance with law.” 19
U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is “such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.” Huaiyin Foreign Trade Corp. (30) v. United States, 322
F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v.
NLRB, 305 U.S. 197, 229 (1938)). It is important to note that when
such relevant evidence is present, the Court must always affirm the
agency determination as long as the determination is in accord with
the law. Where two different conclusions are supported by the
evidence, the Court may not prefer its own to that of the agency.
See Matsushita Elec. Indus. Co., Ltd. v. United States, 750 F.2d
927, 933 (Fed. Cir. 1984).
Additionally, when considering whether an agency determination
is in accord with the law, the Court must sometimes consider the
Court No. 12-00100 Page 8
agency’s interpretation of the law in question. That consideration
is weighed under the guidelines set forth in Chevron, U.S.A., Inc.
v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). The
framework set forth in Chevron is well-established:
Under Chevron, the court first asks whether Congress has
directly spoken to the precise question at issue; if so,
the inquiry ends and the Court must give effect to the
unambiguously expressed intent of Congress. If the
statute is silent or ambiguous with respect to the issue,
the court must ask whether Commerce's interpretation is
based on a permissible construction of the statute.
Sahaviriya Steel Indus. Pub. Co. Ltd. v. United States, 649 F.3d
1371, 1375 (Fed. Cir. 2011) (quotations omitted). Under this
standard, “[s]tatutory interpretations articulated by Commerce
during its antidumping proceedings are entitled to judicial
deference . . . .” Id. at 1374. A reviewing court “must not
substitute its own judgment for that of the agency even if the
court might have preferred another interpretation and even if the
agency's interpretation is not the only reasonable one.”
Wheatland Tube Co. v. United States, 495 F.3d 1355, 1360-61 (Fed.
Cir. 2007) (citation omitted).
ANALYSIS
The possibility for a new shipper review derives from 19
U.S.C. § 1675:
If the administering authority receives a request from an
exporter or producer of the subject merchandise
establishing that -
(I) such exporter or producer did not export the
merchandise that was the subject of an antidumping duty
or countervailing duty order to the United States . . .
Court No. 12-00100 Page 9
during the period of investigation, and
(II) such exporter or producer is not affiliated (within
the meaning of section 1677(33) of this title) with any
exporter or producer who exported the subject merchandise
to the United States . . . during that period,
the administering authority shall conduct a review under
this subsection to establish an individual weighted
average dumping margin or an individual countervailing
duty rate (as the case may be) for such exporter or
producer.
19 U.S.C. § 1675(a)(2)(B)(i). The purpose of a new shipper review
is to provide an opportunity to an exporter or producer who may be
entitled to an individual antidumping rate, but was not active
during the investigation, to be considered for such a rate. See
Jining Yongjia Trade Co., Ltd. v. United States, 34 CIT __, __,
Slip Op. 10-134 at 3 (Dec. 16, 2010).
In addition to this statutory baseline for new shipper review
eligibility, 19 C.F.R. § 351.214 sets forth additional requirements
for the contents of an initiation request. First, the exporter or
producer must certify that it meets that provisions of 19 U.S.C. §
1675(a)(2)(B)(i). See 19 C.F.R. § 351.214(b)(2)(i)-(iii). The
party making the request must also file documentation establishing
(A) The date on which subject merchandise of the exporter or
producer making the request was first entered, or withdrawn
from warehouse, for consumption, or, if the exporter or
producer cannot establish the date of first entry, the date on
which the exporter or producer first shipped the subject
merchandise for export to the United States;
(B) The volume of that and subsequent shipments; and
(C)The date of the first sale to an unaffiliated customer in
the United States.
Court No. 12-00100 Page 10
19 C.F.R. § 351.214(b)(2)(iv)(A)-(C). Finally, the regulations
state that an exporter or producer may request a new shipper review
within one year of the date on which they first entered subject
merchandise. 19 C.F.R. § 351.214(c).
Upon consideration of these statutory and regulatory
provisions, it is clear that Marvin did not satisfy them in making
its Initiation Request. The Initiation Request itself shows
entries made only during June 2011. It later came to light that
Marvin made entries of subject goods in September 2010, meaning
that its Initiation Request was facially infirm under 19 C.F.R. §
351.214(b)(2)(iv)(A) and (B), which requires documentation of the
date on which subject goods were first entered, and the volume of
that and subsequent shipments. While the parties disagree on the
effectiveness of Marvin’s attempted rehabilitation of its
Initiation Request, there can be no dispute that the proceedings
began with a document that falls short of compliance with the
relevant regulations. This infirmity presents a serious hurdle for
Marvin given the deference owed by this court to agency decisions
because Marvin, in essence, asks the Court to conclude that
Commerce erred in applying the express provisions of its
regulations.4
Furthermore, contrary to Marvin’s arguments, the documentation
required in a new shipper request does not just establish that an
4
It is worth noting here that in its Reply supporting the
instant Motion, Marvin makes clear that it is not challenging the
validity of any part of 19 C.F.R. § 351.214.
Court No. 12-00100 Page 11
exporter or producer is “new.” It also provides the basis upon
which Commerce can undertake the review and calculate an individual
antidumping rate. See 19 C.F.R. § 351.214(b)(2)(iv)(B); Def.’s
Resp. to Pl.’s Rule 56.2 Mot. at 11; see generally, 19 U.S.C. §
1675. If a new shipper request does not provide Commerce with
accurate information regarding an exporter or producer’s entries,
the agency is unable to engage in these calculations.
Additionally, the Court concludes that 19 U.S.C. § 1677m is
inapplicable here. While its provisions do allow for a party to
correct infirm filings, it applies to insufficient information that
was submitted in “response to a request for information.” 19
U.S.C. § 1677m(d). Here, Marvin’s Initiation Request was not filed
in response to a request for information made by Commerce. Of its
own accord, Marvin sought a new shipper review after compiling the
information and documentation it believed necessary. The Court
will not disturb Commerce’s rescission of the new shipper review
where, as here, the rescission was based on an application of the
express provisions of the relevant statutes and regulations to
facts that are undisputed in all material respects.
Based on the foregoing, and upon the Marvin’s Motion, the
responses thereto, and all other pleadings and papers filed herein,
it is hereby
ORDERED that the Motion for Judgment on the Agency Record
Court No. 12-00100 Page 12
filed herein by Marvin Furniture (Shanghai) Co. Ltd. is denied.
/s/ NICHOLAS TSOUCALAS
Nicholas Tsoucalas
Senior Judge
Dated: August 23, 2012
New York, New York