Changzhou Hawd Flooring Co. v. United States

Slip Op. 15 - 07
UNITED STATES COURT OF INTERNATIONAL TRADE
CHANGZHOU HAWD FLOORING CO.,
LTD., et al.,
Plaintiffs,
v. Before: Donald C. Pogue,
Senior Judge
UNITED STATES,
Court No. 12-00020
Defendant.
OPINION and ORDER
[remand redetermination affirmed in part and remanded in part]
Dated: January 23, 2015
Gregory S. Menegaz and J. Kevin Horgan, deKieffer &
Horgan, PLLC, of Washington, DC, for the Plaintiffs.
Kristin H. Mowry, Jeffrey S. Grimson, Jill A. Cramer,
Sarah M. Wyss, and Daniel R. Wilson, Mowry & Grimson, PLLC, of
Washington, DC, for Plaintiff-Intervenor Fine Furniture
(Shanghai) Ltd.
H. Deen Kaplan, Craig A. Lewis, and Mark S. McConnell,
Hogan Lovells US LLP, of Washington, DC, for Plaintiff-
Intervenor Armstrong Wood Products (Kunshan) Co., Ltd.
Mark Ludwikowski, Kristen Smith, and Lana Nigro,
Sandler, Travis & Rosenberg, PA, of Washington, DC for
Plaintiff-Intervenors Lumber Liquidators Services, LLC, and Home
Legend, LLC.
Alexander V. Sverdlov, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for Defendant. With him on the brief were
Joyce R. Branda, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Claudia Burke, Assistant Director. Of
counsel was Shana Hofstetter, Attorney, Office of the Chief
Counsel for Trade Enforcement and Compliance, U.S. Department of
Commerce, of Washington, DC.
Court No. 12-00020 Page 2
Jeffrey S. Levin, Levin Trade Law, P.C., of Bethesda,
MD, for the Defendant-Intervenor Coalition for American Hardwood
Parity.
Pogue, Senior Judge: This action is again before the
court following a second redetermination and a voluntary partial
third redetermination. In the third redetermination, the
Department of Commerce (“Commerce”) reaffirmed the second
redetermination of the final results of the antidumping (“AD”)
duty investigation of multilayered wood flooring from the
People’s Republic of China (“PRC” or “China”).1
Still at issue are the AD duty rates assigned to eight
separate rate respondents – the Plaintiffs and Plaintiff-
Intervenors here (collectively, “Plaintiffs”)2 – for the
underlying AD duty investigation. Specifically, Plaintiffs
challenge Commerce’s decision to assign seven of them an
unspecified, non-de minimis AD duty rate for the investigation,

1 Multilayered Wood Flooring from the [PRC], 76 Fed. Reg. 64,318
(Dep’t Commerce Oct. 18, 2011) (final determination of sales at
less than fair value) (“Final Determination”) and accompanying
Issues & Decision Memorandum, A-570-970, POI Apr. 1, 2010 –
Sept. 30, 2010 (Oct. 11, 2011) (“Final Determination I & D
Mem.”). Commerce initiated this investigation in response to a
petition by Defendant-Intervenor (the Coalition for American
Hardwood Parity (“CAHP”)), alleging dumping of multilayered wood
flooring from the PRC on the U.S. market. Multilayered Wood
Flooring from the [PRC], 75 Fed. Reg. 70,714 (Dep’t Commerce
Nov. 18, 2010) (initiation of antidumping duty investigation).
2 Plaintiffs are cooperative, non-individually investigated
respondents in the underlying administrative investigation.
They have all established their entitlement to a separate rate
from the PRC-wide entity. See Final Determination, 76 Fed. Reg.
at 64,321-22.
Court No. 12-00020 Page 3
to provide for liquidation of their entries at the rates
established for them in the first administrative review3 (as
limited by the provisional measures deposit cap), and to
initiate a full investigation of the remaining eighth Plaintiff,
Changzhou Hawd Flooring Co. (“Changzhou Hawd”), as it has
certified no shipment of subject merchandise in the first
administrative review and therefore otherwise lacks any relevant
calculated rate. The court has jurisdiction pursuant to
§ 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended,
19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c) (2012).4
As explained below, Commerce’s determination regarding
the group of seven Plaintiffs is based on a reasonable reading
of the law and record evidence. However, the agency’s decision
to conduct, at this late date, a full investigation of Changzhou
Hawd is arbitrary and capricious. Therefore, the court remands
again for further consideration in accordance with this opinion.
3 See Multilayered Wood Flooring from the [PRC], 78 Fed. Reg.
70,267 (Dep’t Commerce Nov. 25, 2013) (preliminary results of
antidumping duty administrative review; 2011-2012) (“Preliminary
Review”); Multilayered Wood Flooring from the [PRC], 79 Fed.
Reg. 26,712 (Dep’t Commerce May 9, 2014) (final results of
antidumping duty administrative review; 2011-2012) (“Final
Review”); Multilayered Wood Flooring from the [PRC], 79 Fed.
Reg. 35,314 (Dep’t Commerce June 20, 2014) (amended final
results of antidumping duty administrative review; 2011-2012)
(“Amended Final Review”). The first administrative review is
currently at issue before this Court. See Fine Furniture
(Shanghai) Ltd. v. United States, Consol. Ct. No. 14-00135.
4 All further citations to the Tariff Act of 1930, as amended,
are to Title 19 of the U.S. Code, 2012 edition.
Court No. 12-00020 Page 4
BACKGROUND
Litigation of the separate rate5 has so far produced
two court opinions,6 two corresponding redeterminations by
Commerce,7 and, most recently, a voluntary remand and
redetermination by Commerce.8
In each successive determination, Commerce has
established the separate rate in a different way. In the Final

5 Plaintiffs’ action was previously consolidated with Court
Numbers 11-00452, 12-00007, and 12-00013, under Consolidated
Court Number 12-00007. Order, May 31, 2012, Consol. Ct. No.
12-00007, ECF No. 37. Court Number 11-00452 was ultimately
severed and dismissed. Am. Order Nov. 27, 2012, Consol. Ct. No.
12-00007, ECF No. 75; Judgment, Ct. No. 11-00452, ECF No. 68;
see Baroque Timber Indus. (Zhongshan) Co., Ltd. v. United
States, __ CIT __, 853 F. Supp. 2d 1290 (2012); Baroque Timber
Indus. (Zhongshan) Co., Ltd. v. United States, __ CIT __,
865 F. Supp. 2d 1300 (2012).
6 Baroque Timber Indus. (Zhongshan) Co., Ltd. v. United States,
___ CIT ___, 925 F. Supp. 2d 1332 (2013); Baroque Timber Indus.
(Zhongshan) Co., Ltd. v. United States, __ CIT __,
971 F. Supp. 2d 1333 (2014).
7 Final Results of Redetermination Pursuant to Ct. Order, Consol.
Ct. No. 12-00007, ECF No. 132 (“First Redetermination”), and
Final Results of Redetermination Pursuant to Ct. Order, ECF
No. 52 (“Second Redetermination”). Following the first remand
determination, Court Numbers 12-00007 and 12-00013 were severed
and final judgment entered. Order Granting Mot. to Sever,
Consol. Ct. No. 12-00007, ECF No. 162; Judgment, Ct. No. 12-
00007, ECF No. 163; Judgment, Ct. No. 12-00013, ECF No. 32.
These were appealed by Defendant-Intervenor CAHP. Notice of
Appeal, Ct. No. 12-00007, ECF No. 166; Notice of Appeal, Ct. No.
12-00013, ECF No. 33. Defendant-Intervenor moved to voluntarily
dismiss the appeal, without opposition. The motion was granted.
Zhejiang Layo Wood Indus. Co. v. United States, 576 F. App’x
1000 (Fed. Cir. 2014).
8 Final Results of Redetermination Pursuant to Ct. Order, ECF No.
107 (“Third Redetermination”).
Court No. 12-00020 Page 5
Determination, having individually investigated three fully
cooperative mandatory respondents,9 Commerce loosely followed
19 U.S.C. § 1673d(c)(5)(A) and took a simple average10 of the two
non-de minimis mandatory respondent rates (resulting in a
separate rate of 3.31 percent). Final Determination, 76 Fed.
Reg. at 64,321-22. Plaintiffs challenged the determination.
Compl., ECF No. 9 at ¶ 3. It was ultimately remanded on other
grounds. Baroque Timber, ___ CIT ___, 925 F. Supp. 2d 1332.

9 Commerce requested quantity and value (“Q&V”) data from 190
companies and received timely responses from 80. Multilayered
Wood Flooring from the [PRC], 76 Fed. Reg. 30,656, 30,657 (Dep’t
Commerce May 26, 2011) (preliminary determination of sales at
less than fair value) (“Preliminary Determination”). From
these, Commerce selected the three largest exporters (by volume)
to be mandatory respondents. Id. at 30,658; see 19 U.S.C.
§ 1677f-1(c)(2)(B). The remaining exporters and producers were
invited to submit a separate-rate status application. Commerce
received timely-filed responses from 74 companies, all of which
demonstrated eligibility for separate rate status (including the
Plaintiffs here). Final Determination, 76 Fed. Reg. at 64,321.
The 110 companies that did not respond to Commerce’s Q&V
questionnaire were treated as part of the PRC-wide entity.
Preliminary Determination, 76 Fed. Reg. at 30,661-62 (unchanged
in Final Determination, 76 Fed. Reg. at 64,322).
10Commerce declined to use the weighted average indicated in
19 U.S.C. § 1673d(c)(5)(A) because doing so would have risked
disclosure of mandatory respondents’ proprietary information.
Final Determination, 76 Fed. Reg. at 64,322.
Court No. 12-00020 Page 6
In the First Redetermination, changes to the
underlying surrogate values and calculation methodology resulted
in all three mandatory respondents receiving AD duty rates of
zero. First Redetermination, Consol. Ct. No. 12-00007, ECF
No. 132, at 2, 52. Because of this, Commerce recalculated the
separate rate under 19 U.S.C. § 1673d(c)(5)(B), and decided that
“any reasonable method” included a simple average of the three
zero mandatory rates and a rate based on adverse facts available
(“AFA”).11 This resulted in a higher separate rate of 6.41
percent. First Redetermination, Consol. Ct. No. 12-00007, ECF
No. 132, at 27. The court found that this method, while not per
se unreasonable, was unsupported by substantial evidence,
because Commerce had failed to articulate a rational connection
between Plaintiffs’ economic reality and the use of the AFA rate
in the calculation of their rate. Baroque Timber, __ CIT __,
971 F. Supp. 2d at 1344-45. The court accordingly remanded to
Commerce for a redetermination of the separate rate. Id. at
1346.

11 If Commerce finds that “an interested party has failed to
cooperate by not acting to the best of its ability to comply
with a request for information,” then, in calculating that
party’s AD duty rate, Commerce may “use an inference that is
adverse to the interests of that party in selecting from among
the facts otherwise available.” 19 U.S.C. § 1677e(b). When
Commerce “relies on secondary information [as facts otherwise
available] rather than on information obtained in the course of
an investigation or review,” it must “to the extent practicable,
corroborate that information from [reasonably available]
independent sources.” Id. at 1677e(c).
Court No. 12-00020 Page 7
Between the second remand and the corresponding
redetermination, Commerce issued the final determination in the
first administrative review following the investigation at issue
here. Final Review, 79 Fed. Reg. 26,712. Because of this, in
the Second Redetermination, rather than recalculate the separate
rate for all separate rate respondents, Commerce inferred that,
because there were 110 non-cooperative respondents in the
investigation, see Part IIA, infra, the appropriate separate
rate for the investigation was more than de minimis. It then
assigned seven of the Plaintiffs12 the rate calculated for them
in the first administrative review (as limited by the
provisional measures deposit cap). Second Redetermination, ECF
No. 52, at 6-8. The remaining eighth Plaintiff, Changzhou Hawd,
having certified no shipments, did not have a calculated rate
for the first review. Commerce concluded that it did not have
enough data on the record to calculate a rate reflective of that
company’s economic reality and initiated an individual
investigation of this eighth respondent. Id. at 8-9.13

12 Fine Furniture (Shanghai), Ltd. (“Fine Furniture”); Dunhua
City Jisen Wood Industry Co., Ltd; Dunhua City Dexin Wood
Industry Co., Ltd; Dalian Huilong Wooden Products Co.; Kunshan
Yingyi-Nature Wood Industry Co., Ltd.; Armstrong Wood Products
(Kunshan) Co., Ltd. (“Armstrong”); and Karly Wood Product Ltd.
Second Redetermination, ECF No. 52, at 1-2, 7-8.
13Changzhou Hawd subsequently filed a petition for a writ of
mandamus to compel Commerce to refrain from the individual
investigation. Pl. Changzhou Hawd Flooring Co., Ltd. Pet. for
Writ of Mandamus, ECF No. 71. Commerce agreed to suspend the
(footnote continued)
Court No. 12-00020 Page 8
The Second Redetermination was challenged in extensive
briefing before the court,14 and, at the court’s suggestion,
see Telephone Conf., ECF No. 79, Commerce requested a partial
voluntary remand “to determine whether it should conduct a
limited investigation of the eight separate rate [P]laintiffs,”
rather than a full investigation of just Changzhou Hawd.
Mot. for Voluntary Remand, ECF No. 92 at 1 (quotation marks
omitted). The court granted the voluntary remand. Changzhou
Hawd, __ CIT at __, 6 F. Supp. 3d at 1362. It was ultimately a
futile exercise. Commerce essentially decided that it was
impossible to take an approach that was both measured and fact-

deadlines for Changzhou Hawd’s individual investigation, Letter
from Commerce to Ct., ECF No. 82, and the court accordingly
denied the petition as moot. Changzhou Hawd Flooring Co. v.
United States, __ CIT __, 6 F. Supp. 3d 1358, 1360 n.9 (2014).
14See Comments of Certain Separate Rate Appellants to Second
Remand Redetermination, ECF No. 69 (“Pls. Comments”); Comments
of Def.-Intervenor Re Dep’t of Commerce Final Results of
Redetermination Pursuant to Remand, ECF No. 73; Comments of Fine
Furniture (Shanghai) Ltd. on Dep’t of Commerce May 30, 2014
Final Results of Redetermination Pursuant to Ct. Order, ECF No.
74 (“Fine Furniture Comments”); Comments in Opp’n to Dep’t of
Commerce May 29, 2014 Final Results of Redetermination Pursuant
to Ct. Remand, ECF No. 75 (“Armstrong Comments”); Resp. of
Lumber Liquidators Services, LLC in Opp’n to U.S. 2d Remand
Redetermination, ECF No. 76 (“Lumber Liquidators Comments”);
Reply to Comments of Def.-Intervenor Re Dep’t of Commerce Final
Results of Redetermination Pursuant to Remand, ECF No. 89; Reply
Comments of Lumber Liquidators Services, LLC in Opp’n to the
U.S. 2d Remand Redetermination, ECF No. 90; Reply Comments of
Fine Furniture (Shanghai) Ltd. on Dep’t of Commerce May 30, 2014
Final Results of Redetermination Pursuant to Ct. Order, ECF No.
91; Reply Comments of Def.-Intervenor Re Dep’t of Commerce Final
Results of Redetermination Pursuant to Remand, ECF No. 93.
Court No. 12-00020 Page 9
based, and reaffirmed its results and reasoning in the Second
Redetermination. See Third Redetermination, ECF No. 107, at 17.
STANDARD OF REVIEW
The court will sustain Commerce’s determinations
unless they are “unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i). The court will set aside agency actions
found to be arbitrary and capricious. Changzhou Wujin Fine Chem.
Factory Co., Ltd. v. United States, 701 F.3d 1367, 1377 (Fed.
Cir. 2012) (citing Bowman Transp., Inc. v. Arkansas-Best Freight
Sys., Inc., 419 U.S. 281, 284 (1974)).
DISCUSSION
I. Commerce’s Methodology
Commerce generally follows 19 U.S.C § 1673d(c)(5) to
establish the separate rate. Second Redetermination, ECF No. 52,
at 3; Yangzhou Bestpak Gifts & Crafts Co. v. United States,
716 F.3d 1370, 1374 (2013). Thereunder, the general rule sets
the separate rate as equal “to the weighted average of the
estimated weighted average dumping margins established for
exporters and producers individually investigated, excluding any
zero and de minimis margins, and any margins [based entirely on
facts otherwise available].” 19 U.S.C. § 1673d(c)(5)(A). The
exception to this rule, which applies only when all individually
investigated rates are zero, de minimis, or based entirely on
facts otherwise available, allows Commerce to use “any
Court No. 12-00020 Page 10
reasonable method to establish the estimated [separate rate] for
exporters and producers not individually investigated.” Id. at
§ 1673d(c)(5)(B). “Any reasonable method” is expected to mean
the average of the rates calculated for individually
investigated respondents. 19 U.S.C. § 1673d(c)(5)(B); Uruguay
Round Agreements Act, Statement of Administrative Action
(“SAA”), HR. Doc. No. 103-316 (1994) at 873, reprinted in 1994
U.S.C.C.A.N. 4040, 4201.15 However, “if [the expected] method is
not feasible, or if it results in an average that would not be
reasonably reflective of potential dumping margins for non-
investigated exporters or producers, Commerce may use other
reasonable methods.” SAA at 873, reprinted in 1994 U.S.C.C.A.N.
at 4201.
Here, all three individually investigated respondents
had AD duty rates of zero. Second Redetermination, ECF No. 52,
at 3. Commerce accordingly established the separate rate under
the exception — using “any reasonable method” — rather than the
rule. Id.; 19 U.S.C. § 1673d(c)(5)(B). Commerce elected not to
use the expected method, or even to calculate a specific
separate rate for the investigation. Rather, the agency went no
further than inferring that the separate rate, on the record
evidence, must be more than de minimis. Second Redetermination,

15 The SAA is recognized by Congress as an authoritative
expression concerning the interpretation and application of the
Tariff Act of 1930. 19 U.S.C. § 3512(d).
Court No. 12-00020 Page 11
ECF No. 52, at 4-7. Plaintiffs argue that this is not in
accordance with law, contending Commerce must calculate a de
minimis separate rate for the investigation.16
The AD statute does not speak directly to the question
at issue;17 it only requires “any reasonable method to establish”
the separate rate. See 19 U.S.C. § 1673d(c)(5)(B). “Any
reasonable method” is a “lenient standard,” Bestpak, 716 F.3d at
1378, and “establish” is a broader term than “calculate.” The
court must “leave the discretion provided by the ambiguities of
[the AD] statute with the implementing agency,” Fine Furniture
(Shanghai) Ltd. v. United States, 748 F.3d 1365, 1369 (Fed. Cir.
2014) (quoting United States v. Eurodif S.A., 555 U.S. 305, 316
(2009)), even where “the court might have preferred” a different
interpretation, Koyo Seiko, 36 F.3d at 1570 (citation omitted).
The broad language of the statute allows Commerce to tailor its

16 Pls. Comments, ECF No. 69, at 4-7, 10-13; Armstrong Comments,
ECF No. 75, at 4-8; Lumber Liquidators Comments, ECF No. 76,
at 3.
17Commerce’s methodology must be in accordance with law. See
19 U.S.C. § 1516a(b)(1)(B)(i). If the statue speaks clearly “to
the precise question at issue,” then it defines agency action;
“[i]f the statute does not clearly answer the relevant question,
then the court must . . . decide whether the agency’s
interpretation amounts to a reasonable construction of the
statute.” Bestpak, 716 F.3d at 1377 (citing Chevron, U.S.A.,
Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43
(1984)). Commerce’s interpretation “need not be the only
reasonable interpretation” nor the “most reasonable.” Koyo Seiko
Co. v. United States, 36 F.3d 1565, 1570 (Fed. Cir. 1994)
(original emphasis omitted) (citing Zenith Radio Corp. v. United
States, 437 U.S. 443, 450 (1978)).
Court No. 12-00020 Page 12
method to the record evidence before it. See Eurodif, 555 U.S.
at 317-18 (“[In reading regulatory statutes] form should be
disregarded for substance and the emphasis should be on economic
reality.” (quotation marks and citation omitted)).
Here, Commerce’s decision to infer a more than de
minimis but otherwise unspecified separate rate for the
investigation, using instead the cash deposit rates from the
first administrative review, as limited by the provisional
measures deposit cap, is within a reasonable construction of the
statute.18 That “any reasonable method” is available to
Commerce, not just the expected method, indicates the statute
contemplates the possibility of a more than de minimis separate
rate even where, as here, all individually investigated rates
are zero. See 19 U.S.C. § 1673d(c)(5)(B). Further, while in
most circumstances Commerce would need a specific separate rate
for the investigation, so that an AD duty can be assessed (or
not) with publication of an AD duty order, see 19 U.S.C. §
1673e, that is not the case here. Because Commerce has already

18 Contrary to Plaintiffs’ arguments, see Lumber Liquidators
Comments, ECF No. 76, at 1-2, this result is not barred by
Baroque Timber, __ CIT __, 971 F. Supp. 2d 1333. While a
redetermination must “compl[y] with the court’s remand order,”
Amanda Foods (Vietnam) Ltd. v. United States, __ CIT __,
837 F. Supp. 2d 1338, 1343 (2012) (quotation marks and citation
omitted), the court only remanded “for further consideration.”
Baroque Timber, __ CIT at __, 971 F. Supp. 2d at 1346. It did
not establish parameters or requirements other than that
Commerce be reasonable.
Court No. 12-00020 Page 13
calculated rates for some Plaintiffs from the first
administrative review (based on their actual sales experience,
not the assortment other companies’ de minimis and AFA rates
otherwise available in this investigation), and these rates will
apply to the period at issue regardless, see 19 U.S.C.
§ 1675(a)(2)(C)), Commerce has established rates “reasonably
reflective of potential dumping margins” for the separate rate
respondents. See SAA at 873, reprinted in 1994 U.S.C.C.A.N. at
4201. Accordingly, Commerce’s method is not per se
unreasonable.
II. Commerce’s Methodology in the Context of the Record
A. Commerce’s Inference that the Separate Rate is More Than
De Minimis
In the investigation, 110 companies did not respond to
Commerce’s Q&V questionnaire. Second Redetermination, ECF
No. 52, at 4. Commerce assumes that, when a company so
completely fails to participate, it has made “a knowing and
rational decision” not to respond “based on which choice will
result in the lower rate.” Id. at 5 (citations omitted).
Commerce is permitted to make this assumption, see Ta Chen
Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1339
(Fed. Cir. 2002) (citing Rhone Poulenc, Inc. v. United States,
899 F.2d 1185, 1190 (Fed. Cir. 1990)),19 and Plaintiffs have not

19 See Tianjin Mach. Imp. & Exp. Corp. v. United States,
__ CIT __, 752 F. Supp. 2d 1336, 1347 (2011) (“In other words,
(footnote continued)
Court No. 12-00020 Page 14
offered evidence sufficient to suggest that Commerce is wrong in
doing so here.20
This rational actor assumption is the core of the
well-worn presumption that allows Commerce to use AFA against
non-cooperating respondents, see 19 U.S.C. § 1677e(b), thereby
shifting the burden of production21 and incentivizing future
cooperation.22 Similar but distinct, this same rational actor

[Rhone Poulenc] stands for the proposition that a respondent can
be assumed to make a rational decision to either respond or not
respond to Commerce's questionnaires, based on which choice will
result in the lower rate.”).
20Instead, Plaintiffs only provide alternative speculation. See,
e.g., Pls. Comments, ECF No. 69 at 13-15; Fine Furniture
Comments, ECF No. 74, at 6.
21A presumption is “a rule of law, statutory or judicial, by
which finding of a basic fact gives rise to existence of
presumed fact, until presumption is rebutted.” Wilner v. United
States, 24 F.3d 1397, 1411 (Fed. Cir. 1994) (quoting Black’s Law
Dictionary 1185 (6th ed. 1990)). It serves “to allocate the
burden of production,” Universal Elecs. Inc. v. United States,
112 F.3d 488, 492 n.2 (Fed. Cir. 1997), ideally compelling the
party against whom the presumption operates to produce the
necessary evidence, A.C. Aukerman Co. v. R.L. Chaides Constr.
Co., 960 F.2d 1020, 1037 (Fed. Cir. 1992). “Because Commerce
lacks subpoena power, Commerce’s ability to apply [the AFA
presumption] is an important one.” Essar Steel Ltd. v. United
States, 678 F.3d 1268, 1276 (Fed. Cir. 2012) (citation omitted).
22See KYD, Inc. v. United States, 607 F.3d 760, 767 (Fed. Cir.
2010) (“[A]n antidumping rate based on AFA is designed to
provide respondents with an incentive to cooperate [. . .].”
(internal quotation marks and citation omitted)); SAA at 870,
reprinted in 1994 U.S.C.C.A.N. at 4199 (explaining that the
purpose of the AFA presumption is to encourage future
cooperation by “ensur[ing] that the party does not obtain a more
favorable result by failing to cooperate than if it had
cooperated fully”). Cf. Mueller Comercial de Mexico, S. de R.L.
de C.V. v. United States, 753 F.3d 1227, 1234-35 (Fed. Cir.
2014) (holding that Commerce “must carry out a case-specific
(footnote continued)
Court No. 12-00020 Page 15
assumption allows Commerce to infer23 from companies’
non-cooperation that “[their] dumping margins during the period
of investigation were not zero or de minimis, and that, if
[Commerce] had received complete information, [it] may have
chosen one of these companies as a mandatory respondent.” Second
Redetermination, ECF No. 52, at 4 (footnote omitted). That is,
the 110 non-cooperating respondents would have participated if
their rates were zero or de minimis, and the gap in the
evidentiary record their non-cooperation creates reflects on the
separate rate respondents only insofar as it conceals data that

analysis of the applicability of deterrence and similar
policies,” such that the AFA rationale may only be used against
a cooperating party where it has the power to “potentially
induce” non-cooperating parties to provide requested evidence)
(citation omitted); Fine Furniture, 748 F.3d at 1372-73 (“[A]n
adverse inference imposed due to [one party’s] failure to
cooperate that collaterally impacts [another party is] proper”
because it “has the potential to encourage cooperation from [the
first party], or it would at least encourage importers not to
deal with [that party] and other non-cooperating
exporters.”(citing KYD, 607 F.3d at 768)).
23See A.C. Aukerman Co., 960 F.2d at 1037 (“A factual conclusion
reached by inference is based on a process of reasoning and
experience. A presumption, however, is a method of dealing with
proof, normally to give it a greater effect than it would have
if it were handled solely by the inferential process.”)
(alteration, quotation marks and citation omitted); Changzhou
Wujin Fine Chem. Factory Co. v. United States, __ CIT __, 942
F. Supp. 2d 1333, 1340 (2013) (“[F]ailing to cooperate in an
antidumping investigation gives Commerce the discretion to draw
certain inferences about the uncooperative respondent’s pricing
practices. [. . .] This, though, is separate and distinct from
an adverse inference in which Commerce selects a rate
sufficiently adverse to deter noncompliance.” (citations
omitted)).
Court No. 12-00020 Page 16
would have applied in the calculation of the separate rate.
Where, as here, all individually investigated respondents have
received a zero rate (or de minimis rate, or AFA rate), this gap
is effectively dispositive: “if the 110 companies had chosen to
cooperate,” and one had been selected as a mandatory respondent,
“the examined company’s rate would have been above de minimis”
but below AFA, and, pursuant to 19 U.S.C. § 1673d(c)(5)(A),
“would have been assigned to the separate rate plaintiffs as
[the] separate rate in the Final Determination.” See Second
Redetermination, ECF No. 52, at 6.
Commerce corroborates its inference of a more than de
minimis separate rate for the investigation with citation to the
results of the first administrative review. Second
Redetermination, ECF No. 52, at 7, 30. There, Commerce
individually investigated three respondents, including
Plaintiffs Fine Furniture and Armstrong, and ultimately found a
more than de minimis rate for Fine Furniture and a zero rate for
Armstrong.24 Commerce views this as confirmation that dumping

24 In the preliminary results, Commerce found dumping margins of
0.00, 0.67, 8.85, and 8.87 percent for individually investigated
respondents Nanjing Minglin Wooden Industry Co. Ltd.
(“Minglin”), Fine Furniture, Zhejiang Layo Wood Industry Co.,
Ltd. (“Layo Wood”), and Armstrong, respectively. Preliminary
Review, 78 Fed. Reg. at 70,268. In the Final Review, Commerce
found dumping margins of 0.00, 5.74, and 0.00 for Minglin, Fine
Furniture, and Armstrong, respectively (Layo Wood was excluded
because of its zero rate in the investigation on remand). 79
Fed. Reg. at 26,714. Fine Furniture’s rate became the separate
rate (as the only individually investigated non-de minimis, non-
(footnote continued)
Court No. 12-00020 Page 17
occurred during the period of investigation: if dumping occurred
during the review, under the discipline of an AD order, it is
likely to have also occurred here, without the discipline of an
AD order to disincentivize such pricing behavior.25 While it is
true that “each administrative review is a separate segment of
proceedings with its own unique facts,” Peer Bearing Co.-
Changshan v. United States, 32 CIT 1307, 1310, 587 F. Supp. 2d
1319, 1325 (2008)(quotation marks and citation omitted), and
that Commerce cannot consider AD duty rates from other reviews
when those rates bear “no rational relationship to any pricing
behavior during the [period of review] or to the likely pricing
behavior of the recipients of the margin,” Albemarle Corp. v.
United States, __ CIT __, 931 F. Supp. 2d 1280, 1292 (2013),26
this does not undermine Commerce’s determination here. Commerce

AFA rate). Id. The final results were subsequently amended, to
correct a ministerial error, changing Fine Furniture’s rate to
5.92 percent (with the separate rate revised accordingly).
Amended Final Review, 79 Fed. Reg. at 35,315-16.
25Second Redetermination, ECF No. 52, at 30. This distinguishes
the instant case from Amanda Foods (Vietnam) Ltd. v. United
States, where the court held that it was unreasonable to use in
the first review, where there was an AD discipline, rates from
the investigation, where there was no AD discipline, because
there was evidence on the record that plaintiffs had “changed
their pricing behavior so as to comply with the [AD] order.” 33
CIT 1407, 1418-21, 647 F. Supp. 2d 1368, 1380-82 (2009).
26Cf. Pls. Comments, ECF No. 69, at 31-32; Fine Furniture
Comments, ECF No. 74, at 13-15; Armstrong Comments, ECF No. 75,
at 15-16; Lumber Liquidators Comments, ECF No. 76 at 9; see also
Final Review, 79 Fed. Reg. at 26,712, 26,714-15; 19 U.S.C. §
1673d(c)(5)(A).
Court No. 12-00020 Page 18
references the first review results as corroboration, not for
calculation. The first review serves to confirm that the
separate rate respondents’ economic reality is more varied and
complicated than the mandatory respondent de minimis rates here
suggest. It confirms that the separate rate respondents merit
the closer consideration that keeping them subject to the order
affords, some receiving de minimis rates and others not. The
individually investigated rates for two Plaintiffs, one of
which, as the only non-de minimis rate, defines the separate
rate for five other of the Plaintiffs, bear a rational
relationship to the pricing behavior of the recipients of the
margin. As the rates at which the entries at issue will be
liquidated (as limited by the provisional measures deposit cap),
they are also reasonably related to the time period at issue.
Because “the question here is whether the evidence and
reasonable inferences from the record support [Commerce’s]
finding,” Matsushita Electric Indus. Co. v. United States,
750 F.2d 927, 933 (Fed. Cir. 1984), “not whether some other
inference could reasonably have been drawn,” Daewoo Elecs. Co.
v. Int’l Union of Elec., Elec., Technical, Salaried & Mach.
Workers, AFL-CIO, 6 F.3d 1511, 1520 (Fed. Cir. 1993), Commerce’s
determination holds. Commerce’s conclusion that — based on the
silence of 110 respondents, the resultant gap in the record, and
the mixed results of the first administrative review — the
separate rate (and thus Plaintiffs’ rate) in this investigation
Court No. 12-00020 Page 19
is somewhat more than de minimis and less than AFA, while not
the only possible inference, is a reasonable inference from the
record, and therefore supported by substantial evidence. See
Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966).
B. Commerce’s Refusal to Calculate a Specific Separate Rate
Having reasonably inferred that the separate rate for
the period of investigation is more than de minimis, Commerce
declined to calculate a specific (higher than de minimis) rate
for seven of the eight Plaintiffs. Second Redetermination, ECF
No. 52, at 7. The agency concluded that “[w]hile it is normally
necessary to assign a specific rate to separate rate respondents
. . . in this instance, it would be an unnecessary use of
administrative and judicial resources” because specific rates
would be without consequence and without use. Id. at 7-8.
Commerce is correct that further precision would be
without consequence. In an AD investigation, Commerce
calculates dumping margins for respondents and imposes an AD
order based on those margins. Union Steel v. United States,
713 F.3d 1101, 1103 (Fed. Cir. 2013) (citing 19 U.S.C. §§ 1673a,
1673b(b), 1673b(d), 1673d(a), 1673d(c)). Respondents with de
minimis or zero margins are excluded from the order (and
therefore subsequent administrative reviews). See 19 U.S.C.
§§ 1673b(b)(3), 1673d(a)(4). This exclusion is not premised on
a specific rate, but rather whether the rate is de minimis or
not. Having reasonably inferred that the separate rate is more
Court No. 12-00020 Page 20
than de minimis, Commerce has made the determination necessary
to impose the AD order on Plaintiffs.
Commerce is also correct that a specific rate for the
seven Plaintiffs would be without use. This is because “the
rate[s] determined in the first administrative review
supersede[] the cash deposit rate established in the final
determination of the investigation.” Second Redetermination, ECF
No. 52, at 7 (citing 19 U.S.C. § 1675(a)(2)(C)). Plaintiffs’
entries would have been and will be liquidated at the rates
established in the first administrative review (as limited by
the provisional measures deposit cap)27 regardless of whatever
non-de minimis rate might be assigned to them in the
investigation.
Further, contrary to Plaintiffs’ arguments,28 any rate
calculated pursuant to this litigation would not affect the
provisional measures deposit cap. The provisional measures
deposit cap ensures that, for the interstitial period of the

27 Plaintiffs suggest that this frustrates the Bestpak
requirement that their rate be based on their economic reality,
see Armstong Comments, ECF No. 75, at 14-15, that their rate
bear “some relationship to their actual dumping margins.”
Bestpak, 716 F.3d at 1380. However, as the more than de minimis
rate is corroborated by Plaintiffs’ subsequent individually
investigated or calculated rates, and those rates will
ultimately apply to the entries at issue, see Final Review, 79
Fed. Reg. at 26,714-15; 19 U.S.C. §§ 1675(a)(2)(C),
1673d(c)(5)(A), Bestpak is satisfied.
28 See Pls. Comments, ECF No. 69, at 6-7.
Court No. 12-00020 Page 21
investigation — after the preliminary determination but prior to
the issuance of an AD order — importers are not liable for more
than the rate set for them at the time of entry. 19 U.S.C.
§ 1673f(a); 19 C.F.R. § 351.212(d) (2014). If the AD duty rate
set in the first administrative review (or subsequent
litigation) is less, the difference between it and the cash
deposit, bond, or other security provided at entry, is refunded.
If the AD duty rate is ultimately more, then the difference is
not owed. Thai Pineapple Canning Indus. Corp. v. United States,
273 F.3d 1077, 1086 (Fed. Cir. 2001). Because the cap “limits
the rate based on the deposited amount, not an amount that a
final determination indicates should have been deposited,”
Universal Polybag Co. v. United States, 32 CIT 904, 925, 577 F.
Supp. 2d 1284, 1303 (2008), this action and its results do not
affect the cap. Rather, the cap is set by the amount collected,
“[not] the amount that should have been collected.” Id., 32 CIT
at 925, 577 F. Supp. 2d at 1303-04; accord Yantai Oriental Juice
Co. v. United States, 26 CIT 605, 623 (2002) (not reported in
the Federal Supplement) (“[The cap] merely directs how the
deposit rate should be used, not how it should be calculated.”).
Accordingly, as a specific rate for the seven
Plaintiffs would be without use and without effect, in the
Court No. 12-00020 Page 22
interest of administrative and judicial economy,29 it was
reasonable for Commerce to decline to calculate a more specific
rate for this investigation.
C. Commerce’s Decision to Individually Investigate
Changzhou Hawd
Having inferred that the separate rate for the
investigation is more than de minimis, but declining to
calculate a specific separate rate in favor of rates from the
first administrative review, Commerce determined it was
necessary to conduct an individual investigation of the one
Plaintiff that did not receive a rate in the first
administrative review, Changzhou Hawd. Changzhou Hawd has
certified no shipments of subject merchandise for the period of
the first administrative review, and therefore has no calculated
rate for that period. Final Review, 79 Fed. Reg. at 26,713.
Commerce believes that “with the very limited information
currently on the record, [it] is unable to calculate a dumping
rate based on Changzhou Hawd’s own economic reality” without a
full individual investigation. Second Redetermination, ECF No.
52, at 8-9; see also Third Redetermination, ECF No. 107, at 17
(concluding that anything short of a full investigation would

29 See USCIT R. 1; Union Camp Corp. v. United States, 23 CIT 264,
280, 53 F. Supp. 2d 1310, 1325 (1999).
Court No. 12-00020 Page 23
not be practically or legally feasible). Plaintiffs challenge
this determination as arbitrary and capricious.30
While the decision to reopen the record is generally
within the agency’s discretion, see Essar Steel, 678 F.3d
at 1277-78, that discretion cannot be exercised in a manner that
is arbitrary and capricious. See Changzhou Wujin Fine Chem.,
701 F.3d at 1377 (citing Bowman Transp., 419 U.S. at 284).
Arbitrary and capricious is a “narrow” standard of review, but
still “searching and careful.” Citizens to Pres. Overton Park,
Inc. v. Volpe, 401 U.S. 402, 416 (1971). Commerce must
“articulate a rational connection between the facts found and
the choice made.” Bowman, 419 U.S. at 285 (quotation marks and
citation omitted). The agency’s decision cannot have “relied on
factors [that] Congress has not intended it to consider,
entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the
evidence before [it], or [be] so implausible that it could not
be ascribed to a difference in view or the product of agency
expertise.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
Here, Commerce has decided to conduct an individual
investigation of a single separate rate respondent in the third

30 See Pls. Comments, ECF No. 69, at 33-36; Lumber Liquidators
Comments, ECF No. 76, at 5-7.
Court No. 12-00020 Page 24
iteration of a much-contested AD determination. Second
Redetermination, ECF No. 52, at 8-9, 36-37. This, despite
Commerce’s emphatic claims of limited administrative resources.
Final Determination I & D Mem., cmt. 43 at 110 (“[T]he
Department lack[s] the resources required to examine more than
three respondents in this investigation.”); Second
Redetermination, ECF No. 52, at 7-8 (declining to calculate a
specific separate rate because of “limited administrative
resources”). Moreover, Commerce has repeatedly declined to
conduct an individual investigation of another Plaintiff in this
investigation, would-be voluntary respondent Fine Furniture,
citing lack of resources.31 Final Determination I & D Mem., cmt.
43 at 110-112; First Redetermination, Consol. Ct. No. 12-00007,
ECF No. 132, at 49; Second Redetermination, ECF No. 52, at 37-
40; Third Redetermination, ECF No. 107, at 10-11.
Commerce cannot have it both ways. It is well-
established that “[a]n agency action is arbitrary when the
agency offers insufficient reasons for treating similar
situations differently.” SKF USA Inc. v. United States, 263 F.3d
31Commerce received multiple voluntary respondent requests in
this investigation, all of which it denied. Preliminary
Determination, 76 Fed. Reg. at 30,658 (noting voluntary
respondent requests from Fine Furniture, Armstrong, Shanghai
Lizhong Wood Products Co., Ltd., and Dun Hua City Jisen Wood
Co., Ltd.); Final Determination I & D Mem., cmt. 43 at 110
(declining to individually investigate more than the three
mandatory respondents).
Court No. 12-00020 Page 25
1369, 1382 (Fed. Cir. 2001) (alteration, quotation marks and
citation omitted). An agency “must cogently explain why it has
exercised its discretion in a given manner.” State Farm,
463 U.S. at 48 (citations omitted). Internal inconsistency and
self-contradiction do not satisfy this requirement.
Commerce asserts that because the current record has
only “very limited information” on Changzhou Hawd (specifically,
only “aggregate [Q&V] data and Changzhou Hawd’s separate rate
application”), Commerce “is unable to calculate a dumping rate
based on Changzhou Hawd’s own economic reality” without a full
investigation. Second Redetermination, ECF No. 52, at 9. While
Commerce is correct that a separate rate respondent’s AD duty
rate must be reasonably related to its economic reality,
Bestpak, 716 F.3d at 1380, that cannot reasonably be said to
necessitate a full individual investigation in every instance.
If Commerce can, indeed must, tie an AFA rate to the recipient’s
actual dumping margin,32 where, by definition, Commerce cannot
conduct a meaningful, let alone full, investigation to establish
a rate,33 it cannot be impossible to do the same for a fully
cooperative separate rate respondent with the record evidence
32Gallant Ocean (Thailand) Co. v. United States, 602 F.3d 1319,
1325 (Fed. Cir. 2010).
33See 19 U.S.C. § 1677e(b) (allowing application of AFA only
when an interested party has “failed to cooperate by not acting
to the best of its ability to comply with a request for
information”).
Court No. 12-00020 Page 26
present here and Commerce’s continued ability to reasonably
reopen the record.34 Cf. Amanda Foods (Vietnam) Ltd. v. United
States, __ CIT __, 774 F. Supp. 2d 1286 (2011).
Commerce also believes that it is statutorily
impossible for it to do anything less than a full investigation.
Third Redetermination, ECF No. 107, at 8-9, 17. But this does
not comport with the plain language of the applicable statute.
Commerce is only obliged to use “any reasonable method” to
calculate a separate rate. 19 U.S.C. § 1673d(c)(5)(B).
Commerce’s internally inconsistent rationalization is “so
implausible that it could not be ascribed to a difference in
view or the product of agency expertise.” State Farm, 463 U.S.
at 43.
Commerce now has both an investigation and first
administrative review, each with three fully cooperative
individually investigated respondents. Second Redetermination,
ECF No. 52, at 3-4; Final Review, 79 Fed. Reg. at 26,713. It
has denied multiple voluntary respondent applications,
Preliminary Determination, 76 Fed. Reg. at 30,658; Final
Determination I & D Mem., cmt. 43 at 110, but still has an

34 See Bestpak, 716 F.3d at 1380 (“Even with determinations of an
AFA-rate, Commerce may not select unreasonably high rates having
no relationship to the respondent’s actual dumping margin.
Likewise, rate determinations for nonmandatory, cooperating
separate rate respondents must also bear some relationship to
their actual dumping margins.”) (citing Gallant Ocean, 602 F.3d
at 1323).
Court No. 12-00020 Page 27
evidentiary record much more robust than would be available in a
typical investigation. In this context, while Commerce retains
the discretion to reasonably reopen the record, its decision to
conduct a full individual investigation of Changzhou Hawd at
such a late date is arbitrary and capricious.
CONCLUSION
While it is reasonable on this record for Commerce to
infer that the separate rate is more than de minimis, and to
decline to calculate a specific rate in favor of those already
calculated for the first administrative review, it is arbitrary
and capricious for Commerce to now launch an individual
investigation of Changzhou Hawd.
Accordingly, this matter is affirmed in part and
remanded in part to Commerce for further consideration in
accordance with this opinion. Commerce shall have until March
24, 2015 to complete and file its remand redetermination.
Plaintiffs shall have until April 7, 2015 to file comments.
Defendant and Defendant–Intervenor shall have until April 17,
2015 to file any reply.
IT IS SO ORDERED.
/s/Donald C. Pogue___________
Donald C. Pogue, Senior Judge
Dated: January 23, 2015
New York, NY