Mark David, a Div. of Baker, Knapp & Tubbs, Inc. v. United States

Slip Op. 14-132
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
MARK DAVID, A DIVISION OF :
BAKER, KNAPP & TUBBS, INC., :
:
Plaintiff, : Before: Nicholas Tsoucalas,
: Senior Judge
and :
: Consol. Court No.: 13-00233
BRYAN ASHLEY INTERNATIONAL, :
METROPOLIS MANUFACTURING, INC. :
(DBA VAUGHAN BENZ), AND :
MGM RESORTS INTERNATIONAL :
DESIGN, :
:
Consolidated :
Plaintiffs, :
:
v. :
:
UNITED STATES, :
:
Defendant, :
:
and :
:
AMERICAN FURNITURE MANUFACTURERS:
COMMITTEE FOR LEGAL TRADE and :
VAUGHAN-BASSETT FURNITURE CO., :
INC., :
:
Defendant-Intervenors.:
OPINION
[Plaintiff’s motion for judgment on the agency record is denied]
Dated: November 18, 2014
Alexander H. Schaefer and Hea J. Koh, Crowell & Moring LLP, of
Washington, DC, for Mark David, a division of Baker, Knapp & Tubbs,
Inc., plaintiff.
Court No. 13-00233 Page 2
Peter Koenig, Squire Patton Boggs LLP, of Washington, DC, for Bryan
Ashley International, Metropolis Manufacturing, Inc., and MGM
Resorts International Design, consolidated plaintiffs.
Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson,
Director, Patricia M. McCarthy, Assistant Director, and Douglas G.
Edelschick, Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, DC, for
defendant. Of counsel on the brief was Shana A. Hofstetter,
Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Joseph W. Dorn, J. Michael Taylor and P. Lee Smith, King & Spalding
LLP, of Washington, DC, for American Furniture Manufacturers
Committee for Legal Trade and Vaughan-Bassett Furniture Company,
Inc., defendant-intervenors.
TSOUCALAS, Senior Judge: Plaintiff, Mark David, a
division of Baker, Knapp, and Tubbs, Inc. (“Mark David” or
“Plaintiff”), moves for judgment on the agency record contesting
defendant United States Department of Commerce’s (“Commerce”)
determination in Wooden Bedroom Furniture From the People’s
Republic of China: Final Results of Antidumping Duty
Administrative Review; 2011, 78 Fed. Reg. 35,249 (June 12, 2013).
Consolidated Plaintiffs, Bryan Ashley International, Metropolis
Manufacturing, Inc., and MGM Resorts International Design, join
and supplement Plaintiff’s motion. See Pls. Adoption of Pl. Br.
at 1–3. Commerce and defendant-intervenors, American Furniture
Manufacturers Committee for Legal Trade and Vaughan-Bassett
Furniture Company, Inc., oppose Plaintiff’s motion. Def.’s Resp.
to Pl.’s and Consolidated Pls.’ Rule 56.2 Mot. for J. on the Agency
R. at 1–2. The AFMC’s Resp. in Opp’n to Mark David’s Rule 56.2
Court No. 13-00233 Page 3
Mot. for J. on the Agency R. at 1. For the following reasons,
Plaintiff’s motion is denied.
Background
In January 2005, Commerce issued an antidumping duty
order covering wooden bedroom furniture (“WBF”) from the People’s
Republic of China (“PRC”). Notice of Amended Final Determination
of Sales at Less Than Fair Value and Antidumping Duty Order: WBF
From the PRC, 70 Fed. Reg. 329, 330 (Jan. 4, 2005). Commerce
acknowledged Shanghai Maoji Imp And Exp Co., Ltd. (“Maoji”) as
qualifying for a separate rate status and assigned a dumping margin
of 6.68%. WBF From the PRC: Corrected Notice of Court Decision
Not in Harmony With the Final Determination of Sales at Less Than
Fair Value and Notice of Amended Final Determination of Sales at
Less Than Fair Value and Antidumping Duty Order Pursuant to Court
Decision, 76 Fed. Reg. 53,409, 53,411–53,412 (Aug. 26, 2011).
Commerce initiated the seventh administrative review
during the period of review beginning on January 1, 2011 through
December 31, 2011. WBF From the PRC: Initiation of Administrative
Review, 77 Fed. Reg. 12,235, 12,237 (Feb. 29, 2012). During the
seventh administrative review, Commerce named Maoji as a mandatory
respondent. WBF From the PRC: Preliminary Results of Antidumping
Duty Administrative Review; 2011, 78 Fed. Reg. 8493, 8494 (Feb. 6,
2013) (“Preliminary Results”). Maoji responded to Commerce’s
antidumping questionnaire and supplemental questionnaires between
Court No. 13-00233 Page 4
July and October 2012. Decision Memorandum for Preliminary Results
of Antidumping Duty Administrative Review: WBF from the PRC, at 3
(February 1, 2013) (“Preliminary Decision Memorandum”). During
the review Maoji notified Commerce that it was not practicable for
it to provide a response to the Section D questionnaire or the
supplemental Section A questionnaire. See Letter from Maoji to
Commerce re: WBF from PRC (Aug. 3, 2012), Pub. Rec. 325, Attach.
1 at 1. 1
Commerce issued its preliminary results on February 6,
2013. Preliminary Results, 78 Fed. Reg. at 8493. Commerce
preliminarily determined that Maoji failed to answer all sections
of Commerce’s questionnaire, and thus failed to establish its
eligibility for a separate rate status. Id. at 8494. As a result,
Commerce treated Maoji as part of the PRC-wide entity. Id. at
8494.
Commerce also preliminarily determined that the PRC-wide
entity, including Maoji, did not cooperate to the best of its
ability during the review. Id. at 8494. Therefore, Commerce
relied on adverse facts available (“AFA”) to determine the dumping
margin for the PRC-wide entity. Id. at 8494. Commerce assigned
an AFA rate of 216.01 percent to the PRC-wide entity, including
Maoji, which was calculated based on a 2004-2005 New Shipper
1 Hereinafter, documents in the public record will be designated
“PR” without further specification except where relevant.
Court No. 13-00233 Page 5
Review. WBF From The PRC: Final Results of the 2004-2005 Semi-
Annual New Shipper Reviews, 71 Fed. Reg. 70,739, 70,741 (December
6, 2006). Commerce stated that the rate had been corroborated in
previously completed administrative reviews in which it found that
the 216.01% rate for the PRC-wide entity was within “the range of
the calculated margins on the record of the [fifth] administrative
review.” Preliminary Results at 15.
On March 8, 2013, Plaintiff, Mark David USA
(“Plaintiff”), an importer of WBF, filed case briefs with Commerce.
WBF from the PRC: Issues and Decision Memorandum for the Final
Results of Review, at 1 (June 5, 2013) (“Decision Memorandum”).
Mark David contests whether the 216.01% margin, as assigned to
Maoji as part of the PRC-wide entity was reasonable.
Commerce maintained its preliminary findings in its
Final Results. WBF From the PRC: Final Results of Antidumping
Duty Administrative Review; 2011, 78 Fed. Reg. 35,249, 35,249 (June
12, 2013) (“Final Results”).
JURISDICTION and STANDARD OF REVIEW
This Court has jurisdiction pursuant to 28 U.S.C. §
1581(c) (2006) and Section 516A(a)(2)(B)(iii) of the Tariff Act of
1930 as amended, 19 U.S.C. §1516a(a)(2)(B)(iii)(2006).
This Court will uphold Commerce’s determination unless
it is “unsupported by substantial evidence on the record, or
otherwise not in accordance with law.” 19 U.S.C.
Court No. 13-00233 Page 6
§1516a(b)(1)(B)(i). Substantial evidence “means such relevant
evidence as a reasonable mind might accept as adequate to support
a conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477
(1951).
Additionally, “courts look for a reasoned analysis or
explanation for an agency’s decision as a way to determine whether
a particular decision is arbitrary, capricious, or an abuse of
discretion.” Wheatland Tube Co. v. United States, 161 F.3d 1365,
1369 (Fed. Cir. 1998). “An abuse of discretion occurs where the
decision is based on an erroneous interpretation of the law, on
factual findings that are not supported by substantial evidence,
or represent an unreasonable judgment in weighing relevant
factors.” Welcom Prods., Inc. v. United States, 36 CIT ____, 865
F. Supp. 2d 1340, 1344 (2012) (citing Star Fruits S.N.C. v. United
States, 393 F.3d 1277, 1281 (Fed. Cir. 2005). “An agency action is
arbitrary when the agency offers insufficient reasons for treating
similar situations differently.” SKF USA Inc. v. United States,
263 F.3d 1369, 1382 (Fed. Cir. 2001).
DISCUSSION
Maoji does not dispute that they failed to participate
fully in the review, and that they therefor can be subjected to an
AFA rate. The issue before the court is instead whether Commerce’s
application of the 216.01% PRC-wide AFA rate to Maoji was
reasonable. Plaintiff argues that the 216.01% PRC-wide AFA rate
Court No. 13-00233 Page 7
was neither reliable nor relevant. See Pl.’s Mem. Supp. R. 56.2 J.
Agency R. at 5–10 (“Pl.’s Mem.”). According to Plaintiff, Commerce
applied an “outdated” and “unsupported” margin that did not reflect
Maoji’s commercial reality. Id.
In antidumping duty proceedings involving merchandise
from a non-market economy (“NME”), as is the case here, Commerce
presumes that all respondents are government controlled and
therefore subject to the country-wide rate. See Sigma Corp. v.
United States, 117 F.3d 1401, 1405 (Fed. Cir. 1997). Commerce
does allow respondents to rebut this presumption, however, by
establishing the absence of both de jure and de facto government
control. Id. Respondents who make this showing are eligible for
a separate rate. Id. When a company fails to rebut the presumption
of government control, Commerce employs that presumption and
applies the country-wide rate to its merchandise. See id.
Plaintiff does not appear to dispute Commerce’s finding
that Maoji failed to rebut the presumption of government control
in the Final Results. During the review Maoji notified Commerce
that it was not practicable for it to provide a response to the
Section D questionnaire or the supplemental Section A
questionnaire. See PR 325 attach. 1 at 1. Commerce determined
that Maoji was a part of the PRC-wide entity. See Shandong Mach.
Imp. & Exp. Co. v. United States, 33 CIT 810, 815 (2009). Because
Maoji failed to respond to Commerce’s questionnaires regarding its
Court No. 13-00233 Page 8
separate rate eligibility during the review, Commerce reasonably
concluded that Maoji failed to demonstrate its absence of
government control. See Sigma Corp., 117 F.3d at 1405.
The main issue for the court to evaluate is therefor
whether Commerce’s application of the 216.01% PRC-wide AFA rate to
Maoji, which has not demonstrated its independence from the PRC-
wide entity, was reasonable. A margin based upon AFA must be “a
reasonably accurate estimate of the respondent’s actual rate,
albeit with some built-in increase intended as a deterrent to non-
compliance.” F.Lli de Cecco di Filippo Fara S. Martino S.p.A. v.
United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000). “[A]lthough
a higher AFA rate creates a stronger deterrent, Commerce may not
select unreasonably high rates having no relationship to the
respondent’s actual dumping margin.” Gallant Ocean (Thai.) Co. v.
United States, 602 F.3d 1319, 1323 (Fed. Cir. 2010) (citing de
Cecco, 216 F.3d at 1032). “Commerce must select secondary
information that has some grounding in commercial reality.” Id.
at 1324.
These standards grow out of 19 U.S.C. § 1677e(c), which
provides that when Commerce relies on secondary information, it
“shall, to the extent practicable, corroborate that information
from independent sources that are reasonably at [its] disposal.”
19 U.S.C. § 1677e(c). To corroborate secondary information,
Commerce must find that it has “probative value.” KYD, Inc. v.
Court No. 13-00233 Page 9
United States, 607 F.3d 760, 765 (Fed. Cir. 2010). Secondary
information has “probative value” if it is both reliable and
relevant to the respondent. Mittal Steel Galati S.A. v. United
States, 31 CIT 730, 734, 491 F. Supp. 2d 1273, 1278 (2007).
Plaintiff relies heavily on Lifestyle Enter., Inc. v.
United States to support its argument that the 216.01% rate was
unreasonable. Lifestyle Enterprise, Inc. v. United States, 35 CIT
___, ___, 768 F. Supp. 2d 1286 (2011) (“Lifestyle I”), after
remand, 36 CIT ___, 844 F. Supp. 2d 1283 (2012) (“Lifestyle II”),
after second remand, 36 CIT ___, 865 F. Supp. 2d 1284 (2012)
(“Lifestyle III”), after third remand, 37 CIT ___, 896 F. Supp. 2d
1297 (2013) (“Lifestyle IV”). Pl’s Mem. at 7–9. Specifically,
Plaintiff contends that this Court previously discredited the
application of the 216.01% PRC-wide AFA in Lifestyle I. The court
disagrees. In Lifestyle I, importers challenged the third
administrative review of WBF from the PRC. See Lifestyle I, 768
F. Supp. 2d at 1292. Orient, a mandatory respondent, was
originally subject to an antidumping margin of 216.01%. See id.
at 1297. However, in Lifestyle I, Orient was not assigned the
PRC-wide rate because “Orient had affirmatively demonstrated an
absence of de jure or de facto control.” See id. at 1296–1297,
1298 n. 12 (“Commerce did not assign the PRC-wide rate per se, but
rather selected the same rate based on separate considerations.”).
Furthermore, the Court found in Lifestyle I that Commerce failed
Court No. 13-00233 Page 10
to address the “dramatic increase in Orient’s rate from 7.68% to
216.01%.” Id. at 1299. Because Orient qualified for separate
rate status, the Court in Lifestyle I held that Commerce was
required to either explain its determination or corroborate
Orient’s AFA rate so that it relates to Orient’s commercial
reality. Id. at 1298–1299. Contrary to Plaintiff’s assertion,
the Court in Lifestyle I did not hold that the PRC-wide rate is
uncorroborated.
Following three subsequent remands where the Court
instructed Commerce to calculate an AFA rate which has some
grounding in Orient’s commercial reality, the Court in Lifestyle
IV sustained Commerce’s findings in its Third Remand Results of
WBF from the PRC, applying a rate of 83.55% to Orient’s exports of
WBF. Lifestyle IV, 896 F. Supp. 2d at 1301-1302. The Court
determined that the rate was sufficiently corroborated and
reflected Orient’s commercial reality. Id.
Unlike Orient in Lifestyle I, here, Maoji failed to
qualify for separate rate status. As a result it received the
PRC-wide AFA rate. Because Maoji was part of the PRC-wide entity,
Commerce was not required to calculate a separate AFA rate relevant
to Maoji’s commercial reality. See Peer Bearing, 32 CIT at 1313,
587 F. Supp. 2d at 1327 (“[T]here is no requirement that the PRC-
wide entity rate based on AFA relate specifically to the individual
company.”). Commerce was only required to corroborate the rate to
Court No. 13-00233 Page 11
the PRC-wide entity. See id. Therefore, Plaintiff’s reliance on
Lifestyle I is misplaced. Lifestyle I does not call into question
the PRC-wide rate as applied to the PRC-wide entity, rather it
only discredits its application to Orient, which successfully
established the absence of both de jure and de facto government
control. Id.
Plaintiff also argues that Commerce has previously
applied significantly lower rates to cooperating respondents in
nine other administrative reviews of WBF in support of its
contention that the rate is unreliable. Pl.’s Mem. at 8–9. The
court does not find that these rates support Plaintiff’s argument.
The rates that Plaintiff relies on were assigned to cooperating
separate rate respondents. See id. The rates were not assigned
to respondents who were considered to be a part of the PRC-wide
entity. Plaintiff does not show how these rates conflict with a
rate applied to a respondent who fails to qualify for separate
rate status. In the instant case, as discussed above, unlike the
nine cooperating respondents, Maoji is an uncooperative respondent
that was found to be a part of the PRC-wide entity.
Additionally, Plaintiff insists that the “continued use”
of the 216.01% margin in the Final Results is “contrary to this
Court’s precedent and disregards information that decisively
rejects the reliability or relevance of the PRC-wide entity rate.”
Pl.’s Mem. at 9. Plaintiff’s argument is unpersuasive. This Court
Court No. 13-00233 Page 12
has noted that, “[u]nlike other sources of information, there are
no independently verifiable sources for calculated dumping
margins, other than previous administrative determinations.” Peer
Bearing Co.-Changshan v. United States, 32 CIT 1307, 1314, 587 F.
Supp. 2d 1319, 1328 (2008). Therefore, when calculating the AFA
rate for the PRC-wide entity, “the reliability of the calculation
stems from its basis in prior verified information in previous
administrative reviews,” and “[i]f Commerce chooses a calculated
dumping margin from a prior segment of the proceeding, it is not
necessary to question the reliability of the margin if it was
calculated from verified sales and cost data.” Id., 587 F. Supp.
2d at 1328. Here, Commerce calculated the rate based on the 2004-
2005 New Shipper Review. Decision Memorandum at 9–10. During a
2009 administrative review of WBF, Commerce corroborated the
216.01% rate for the PRC-wide entity. Id. at 10. Commerce deemed
this rate to be relevant to this administrative review. Id. at
10. As discussed, Plaintiff failed to provide evidence indicating
that this rate was unreliable. Because the 216.01% rate has been
corroborated for the PRC-wide entity, and the evidence Plaintiff
provided lacked probative value, Commerce’s determination was
reasonable. See Peer Bearing, 32 CIT at 1314, 587 F. Supp. 2d at
1328.
Finally, Plaintiff argues that the PRC-wide rate is
punitive. Pl.’s Mem. 10–11. The court disagrees. Plaintiff
Court No. 13-00233 Page 13
insists that Commerce failed to support Maoji’s rate increase from
6.68% in previous reviews to the present 216.01% rate applied here.
As discussed above, Maoji had previously qualified for separate
rate status, and subsequently lost it in this review, therefore
Maoji’s previous rate is irrelevant in the instant case. The court
finds that the 216.01% rate is supported by substantial evidence,
thus “an AFA dumping margin determined in accordance with the
statutory requirements is not a punitive measure.” KYD, Inc. v.
United States, 607 F.3d 760, 768 (Fed. Cir. 2010).
Conclusion
For all the foregoing reasons, the court sustains
Commerce’s Final Results. Plaintiff’s motion for judgment on the
agency record is denied.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: November 18, 2014
New York, New York