Fine Furniture (Shanghai ) Ltd. v. United States

Slip Op. 18–
UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
FINE FURNITURE (SHANGHAI) :
LIMITED, ET AL., :
:
Plaintiffs, :
:
and :
:
ARMSTRONG WOOD PRODUCTS :
(KUNSHAN) CO., LTD., GUANGDONG :
YIHUA TIMBER INDUSTRY CO., LTD., :
OLD MASTER PRODUCTS, INC., :
LUMBER LIQUIDATORS SERVICES, :
LLC, SHANGHAI LAIRUNDE WOOD : Before: Richard K. Eaton, Judge
CO., LTD., CHANGZHOU HAWD :
FLOORING CO., LTD., DALIAN : Consol. Court No. 16-00145
HUILONG WOODEN PRODUCTS CO., :
LTD., DUNHUA CITY JISEN WOOD :
INDUSTRY CO., LTD., DUNHUA CITY :
DEXIN WOOD INDUSTRY CO., LTD., :
DUNHUA CITY HONGYUAN WOOD :
INDUSTRY CO., LTD., JIAXING :
HENGTONG WOOD CO., LTD., :
KARLY WOOD PRODUCT LIMITED, :
YINGYI-NATURE (KUNSHAN) WOOD :
INDUSTRY CO., LTD., XIAMEN YUNG :
DE ORNAMENT CO., LTD., ZHEJIANG :
SHUIMOJIANGNAN NEW MATERIAL :
TECHNOLOGY CO., LTD., :
:
Plaintiff-Intervenors, :
:
v. :
:
UNITED STATES, :
:
Defendant. :
____________________________________:
OPINION
[United States Department of Commerce’s Final Results are sustained.]
Consol. Ct. No. 16-00145 Page 2
Dated: /PWFNCFS



Sarah M. Wyss, Mowry & Grimson, PLLC, of Washington DC, argued for plaintiff. With
her on the brief were Kristin H. Mowry, Jeffrey S. Grimson, Jill A. Cramer, Yuzhe PengLing, and
James C. Beaty.
Gregory S. Menegaz, J. Kevin Horgan, Alexandra H. Salzman, and Judith L. Holdsworth,
of deKieffer & Horgan, PLLC, of Washington DC, for consolidated plaintiffs Changzhou Hawd
Flooring Co., Ltd., Dalian Huilong Wooden Products Co. Ltd., Dunhua City Jisen Wood Industry
Co., Ltd., Dunhua City Dexin Wood Industry Co., Ltd., Dunhua City Hongyuan Wood Industry
Co., Ltd., Jiaxing Hengtong Wood Co., Ltd., Karly Wood Product Limited, Yingyi-Nature
(Kunshan) Wood Industry Co., Ltd., Xiamen Yung De Ornament Co., Ltd., and Zhejiang
Shuimojiangnan New Material Technology Co., Ltd.
Lizbeth R. Levinson, Ronald M. Wisla and Brittney R. McClain, Kutak Rock LLP, of
Washington DC, for consolidated plaintiffs Zhejiang Dadongwu GreenHome Wood Co., Ltd.,
Johnson’s Premium Hardwood Flooring, Inc., Struxtur, Inc., Wego Chemical & Mineral Corp.,
Floor and Décor Outlets of America, Inc., Hangzhou Hanje Tec Co., Ltd., Huzhou Chenghang
Wood Co., Ltd., Jilin Forest Industry Jinqiao Flooring Group Co., Ltd., MuDanJiang Bosen Wood
Industry Co., Ltd., Nakahiro Jyou Sei Furniture (Dalian) Co., Ltd., Shenyang Haobainian Wooden
Co., Ltd., Dalian Dajen Wood Co., Ltd., and Dunhua City Wanrong Wood Industry Co., Ltd.
Francis J. Sailer and Andrew T. Schutz, Grunfeld, Desiderio, Lebowitz, Silverman &
Klestadt LLP, of Washington DC, for plaintiff-intervenor Shanghai Lairunde Wood Co., Ltd.
John R. Magnus and Sheridan S. McKinney, TradeWins LLC, of Washington DC, for
plaintiff-intervenor Old Master Products, Inc.
H. Deen Kaplan and Craig A. Lewis, Hogan Lovells US LLP, of Washington, DC, for
plaintiff-intervenor Armstrong Wood Products (Kunshan) Co. Ltd.
Mark Ludwikowski, Kristen Smith, Arthur K. Purcell, and Emi Ito Ortiz, Sandler, Travis &
Rosenberg, P.A., of Washington DC, for plaintiff-intervenor Lumber Liquidators Services, LLC.
Jonathan M. Zielinski and Thomas M. Beline, Cassidy Levy Kent (USA) LLP, of
Washington DC, for plaintiff-intervenor Guangdong Yihua Timber Industry Co., Ltd.
Tara K. Hogan, Senior Trial Counsel, U.S. Department of Justice, Commercial Litigation
Branch, of Washington DC, argued for defendant. With her on the brief were Chad A. Readler,
Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant
Director. Of Counsel on the brief was Mercedes C. Morno, Office of Trade Enforcement &
Compliance, U.S. Department of Commerce.
Consol. Ct. No. 16-00145 Page 3
Eaton, Judge: In this consolidated action, plaintiff Fine Furniture (Shanghai) Limited
(“Fine Furniture” or “plaintiff”) moves for judgment on the agency record, challenging the United
States Department of Commerce’s (“Commerce” or “Department”) final results in the third
administrative review of the antidumping duty order on multilayered wood flooring from the
People’s Republic of China. See Multilayered Wood Flooring From the People’s Rep. of China,
81 Fed. Reg. 46,899 (Dep’t Commerce July 19, 2016), as amended 81 Fed. Reg. 53,120 (Dep’t
Commerce Aug. 11, 2016) (“Final Results”); see also Final Issues & Dec. Mem. (July 12, 2016)
(“Final IDM”) (P.R. 359-361). Fine Furniture, consolidated plaintiffs, 1 and plaintiff-intervenors 2
(collectively, “plaintiffs”) contend that Commerce’s Final Results were unsupported by substantial
evidence on the record. See Fine Furniture’s Mem. Supp. Mot. J. Agency R., ECF No. 90-1 (“Fine
Furniture Br.”).
Plaintiffs are producers and/or exporters of multilayered wood flooring from China. By
their motions for judgment on the agency record, plaintiff and plaintiff-intervenors challenge
Commerce’s (1) selection of Romania as the primary surrogate country, (2) calculation of the
1
The consolidated plaintiffs are Zhejiang Dadongwu GreenHome Wood Co., Ltd.,
Johnson’s Premium Hardwood Flooring, Inc., Struxtur, Inc., Wego Chemical & Mineral Corp.,
Floor and Décor Outlets of America, Inc., Hangzhou Hanje Tec Co., Ltd., Huzhou Chenghang
Wood Co., Ltd., Jilin Forest Industry Jinqiao Flooring Group Co., Ltd., MuDanJiang Bosen Wood
Industry Co., Ltd., Nakahiro Jyou Sei Furniture (Dalian) Co., Ltd., Shenyang Haobainian Wooden
Co., Ltd., Dalian Dajen Wood Co., Ltd., and Dunhua City Wanrong Wood Industry Co., Ltd.
2
The plaintiff-intervenors are Armstrong Wood Products (Kunshan) Co., Ltd.;
Guangdong Yihua Timber Industry Co., Ltd.; Old Master Products Inc. (“Old Master”); Lumber
Liquidators Services, LLC; Shanghai Lairunde Wood Co., Ltd. (“Shanghai Lairunde”); and
consolidated plaintiffs Changzhou Hawd Flooring Co., Ltd., Dalian Huilong Wooden Products
Co. Ltd., Dunhua City Jisen Wood Industry Co., Ltd., Dunhua City Dexin Wood Industry Co.,
Ltd., Dunhua City Hongyuan Wood Industry Co., Ltd., Jiaxing Hengtong Wood Co., Ltd., Karly
Wood Product Limited, Yingyi-Nature (Kunshan) Wood Industry Co., Ltd., Xiamen Yung De
Ornament Co., Ltd., and Zhejiang Shuimojiangnan New Material Technology Co., Ltd.
(“Changzhou Hawd plaintiffs”).
Consol. Ct. No. 16-00145 Page 4
surrogate financial ratios, and (3) calculation of the surrogate value for Fine Furniture’s face
veneer. See generally Fine Furniture Br. 3 Plaintiff-Intervenor Old Master also challenges
Commerce’s (4) calculation of the antidumping duty margin assigned to the separate rate
companies who were not selected for individual examination. See Old Master’s Mem. Supp. Mot.
J. Agency R., ECF No. 92-1 (“Old Master Br.”). 4
Defendant the United States, on behalf of Commerce, maintains that the Final Results
should be sustained because they are in accordance with law and supported by substantial
evidence. See Def.’s Resp. Opp’n Mots. J. Admin. R., ECF No. 101 (“Def.’s Br.”).
The court has jurisdiction under 28 U.S.C. § 1581(c) (2012). For the reasons stated below,
the court sustains Commerce’s Final Results.
BACKGROUND
On October 18, 2011, Commerce published its final affirmative dumping determination
and an antidumping duty order on multilayered wood flooring from China. See Multilayered Wood
Flooring From the People’s Rep. of China, 76 Fed. Reg. 64,318 (Dep’t Commerce Oct. 18, 2011).
The order was amended twice and remains in effect. See Multilayered Wood Flooring From the
People’s Rep. of China, 76 Fed. Reg. 76,690 (Dep’t Commerce Dec. 8, 2011) (amended final
dumping determination and order); Multilayered Wood Flooring From the People’s Rep. of China,
3
The plaintiff-intervenors incorporate by reference the surrogate country and
surrogate value arguments made by plaintiff Fine Furniture. Accordingly, the court will generally
refer to Fine Furniture’s papers. Any arguments not specifically addressed in Fine Furniture’s
papers will be expressly noted.
4
The plaintiff-intervenors incorporate by reference the separate rate assessment
arguments made by plaintiff-intervenor Old Master. Accordingly, citations to this argument will
be made by reference to the motion filed by Old Master. Any argument on this matter not
specifically addressed in Old Master’s papers shall be expressly noted.
Consol. Ct. No. 16-00145 Page 5
77 Fed. Reg. 5484 (Dep’t Commerce Feb. 3, 2012) (amended antidumping and countervailing duty
orders).
On February 4, 2015, Commerce initiated its third administrative review of the order
covering the period of December 1, 2013, through November 30, 2014 (“POR”). See Initiation of
Antidumping and Countervailing Duty Admin. Reviews, 80 Fed. Reg. 6041 (Dep’t Commerce
Feb. 4, 2015). Fine Furniture and Dalian Penghong Floor Products Co., Ltd. (“Penghong”) were
selected as mandatory respondents. See Final Results, 81 Fed. Reg. at 46,899. Because China is
considered a nonmarket economy, Commerce was required to select a surrogate market economy
country to value the factors of production of the subject imports. 5
As part of its review, on May 15, 2015, Commerce’s Import Administration Office of
Policy issued a non-exhaustive list of countries at the same or comparable level of economic
development as China based on per capita gross national income as reported in the World Bank’s
2015 Development Report (the “OP list”). This list included Romania, Bulgaria, South Africa,
5
In antidumping proceedings involving nonmarket economy countries—such as
China—19 U.S.C. § 1677b(c)(1) requires Commerce to calculate the normal value of the subject
merchandise based on surrogate values offered in a comparable market economy country, i.e., a
surrogate country. Subsection 1677b(c)(1) provides:
[If] (A) the subject merchandise is exported from a nonmarket economy country,
and (B) . . . available information does not permit the normal value of the subject
merchandise to be determined . . . , the normal value of the subject merchandise
[shall be determined] on the basis of the value of the factors of production utilized
in producing the merchandise and to which shall be added an amount for general
expenses and profit plus the cost of containers, coverings, and other
expenses. . . . [T]he valuation of the factors of production shall be based on the best
available information regarding the values of such factors in a market economy
country or countries considered to be appropriate . . . .
19 U.S.C. § 1677b(c)(1). Subsection 1677b(c)(4) requires commerce to use the prices or costs of
factors of production in “one or more market economy countries” that are “(A) at a level of
economic development comparable to that of the nonmarket economy country” and
“(B) significant producers of comparable merchandise.” 19 U.S.C. § 1677b(c)(4)(A)-(B).
Consol. Ct. No. 16-00145 Page 6
Ecuador, Thailand, and Ukraine. 6 Commerce then set a deadline of June 15, 2015, for comments
on surrogate country selection regarding the listed countries’ (1) significant production of
comparable merchandise, (2) data availability and quality, to value factors of production, and (3)
financial statements availability and quality (i.e., whether the countries were acceptable as
surrogate countries or to propose other economically comparable countries); and a deadline of
June 29, 2015, to submit proposed surrogate values. 7 See Letter to All Interested Parties Re:
Request for Surrogate Country and Surrogate Value Comments and Information (May 15, 2015)
(P.R. 169).
In its initial response, filed on June 15, 2015, petitioner Coalition for American Hardwood
6
Commerce selects a primary surrogate country using a process that tracks the
requirements of 19 U.S.C. § 1677b(c)(1) and (4), described above. The Department’s practice in
identifying countries that are at the same level of economic development is described in the
Department’s Policy Bulletin No. 04.1. See Import Admin., U.S. Dep’t Commerce, Non-Market
Economy Surrogate Country Selection Process, Policy Bulletin 04.1 (2004) (“Policy Bulletin
04.1”), available at http://enforcement.trade.gov/policy/bull04-1.html (last visited Nov. 20, 2018).
As an initial matter,
[t]he operations team sends the Office of Policy (“OP”) a written request for a list
of potential surrogate countries. In response, OP provides a list of potential
surrogate countries that are at a comparable level of economic development to the
[nonmarket economy] country. OP determines economic comparability on the basis
of per capita gross national income, as reported in the most current annual issue of
the World Development Report (The World Bank).
Policy Bulletin 04.1 at 2.
7
The Department states that it will generally select
a surrogate country that is at the same level of economic development as the
[nonmarket economy] unless it is determined that none of the countries are viable
options because (a) they . . . are not significant producers of comparable
merchandise, (b) do not provide sufficient reliable sources of publicly available
[surrogate value] data, or (c) are not suitable for use based on other reasons.
Selection of a Surrogate Country Mem. (Dec. 31, 2015) (P.R. 294) at 4.
Consol. Ct. No. 16-00145 Page 7
Parity (“petitioner”) 8 stated that the six potential surrogate countries on Commerce’s OP list were
(1) significant producers of comparable merchandise and (2) that data of reasonable availability
and quality, for the factors of production, and financial statements were available (i.e., that all six
countries met the requirements for use as the primary surrogate country), but because “one of the
mandatory respondents [Fine Furniture] . . . was not due for submission to the Department until
June 12, 2016,” and therefore petitioner “d[id] not know the specific factors of production for that
respondent,” petitioner did not make any arguments as to which country was the most appropriate
surrogate country. See Pet. Comments on Surrogate Selection (P.R. 185) at 3. In fact, on June 15,
2015, Fine Furniture timely submitted a letter arguing that Thailand should serve as the surrogate
country. See Fine Furniture’s Surrogate Country Comments (June 15, 2015) (P.R. 186) at 2.
Thereafter, on June 29, 2015, petitioner submitted proposed surrogate values from
Romania and, for the first time, argued that Romania was the most appropriate surrogate country.
See Letter from Levin Trade Law, P.C. to Commerce (June 26, 2015) (P.R. 190-192). On
November 20, 2015, Commerce rejected a portion of this submission because it contained
“untimely filed comments on surrogate country selection” (which were due by June 15, 2015), but
allowed petitioner to resubmit the document without those comments. See Letter from Commerce
to Levin Trade Law, P.C. (Nov. 20, 2015) (P.R. 279). Petitioner resubmitted the document with
the necessary adjustments on November 24, 2015. See Letter from Levin Trade Law, P.C. to
Commerce (Nov. 24, 2015) (P.R. 281-282).
Also, on November 2, 2015, petitioner submitted additional proposed surrogate values and
commented that “these suggestions demonstrate the superiority of Romania as a surrogate country
versus Thailand.” Letter from Levin Trade Law, P.C. to Commerce (Nov. 2, 2015) (P.R. 254) at 2.
8
Petitioner is not a party to this action or any of the consolidated cases.
Consol. Ct. No. 16-00145 Page 8
On November 5, 2015, Commerce held an ex parte meeting with petitioner regarding the selection
of the appropriate surrogate country. See Memo to File Re: Ex Parte Meeting (Nov. 5, 2015) (P.R.
268). At the ex parte meeting, petitioner presented a data spreadsheet titled “Comparison of
Surrogate Values for Key Inputs,” with one column titled “Why Romanian [Surrogate Value] is
better.” Letter from Levin Trade Law, P.C. to Commerce (Nov. 6, 2015) (P.R. 269); see also
Meeting Handout (P.R. 270).
On January 8, 2016, Commerce published its preliminary results. See Multilayered Wood
Flooring From the People’s Rep. of China, 81 Fed. Reg. 903 (Dep’t Commerce Jan. 8, 2016)
(“Preliminary Results”), and accompanying Prelim. Dec. Mem. (Dec. 31, 2015) (P.R. 292-293)
(“Preliminary Decision Mem.”). In the Preliminary Results, Commerce found that “Bulgaria,
Romania, Ecuador, Ukraine, South Africa, and Thailand [were] all at the same level of economic
development as [China]” and were “all significant producers of comparable merchandise.”
Preliminary Decision Mem. at 10-11.
In the Preliminary Results, Commerce selected Romania as the primary surrogate country
based, on what it said, was the “availability and reliability” of the surrogate value data. See
Preliminary Decision Mem. at 11. Although Commerce stated that “the record of this review
contains specific, contemporaneous, and high-quality data from Thailand and Romania to value
all [factors of production],” it found that “Romania contains the best available information for
valuing respondents’ [factors of production]” because “the import data from Romania contains
greater specificity for certain major inputs (i.e., logs and lumber).” Selection of a Surrogate
Country Mem. (Dec. 31, 2015) (P.R. 294) (“Surrogate Country Mem.”) at 7. Specifically,
Commerce found that “the Romanian HTS schedule contains categories specific to [the] wood
species and thicknesses reported by the mandatory respondents,” whereas “the Thai HTS schedule
Consol. Ct. No. 16-00145 Page 9
does not contain species-specific categories.” Surrogate Country Mem. at 7. Moreover, Commerce
preliminarily found that because “the record lacks a contemporaneous labor [surrogate value] from
Thailand,” and that the “Romanian labor rates are contemporaneous with the POR,” there was
further support for a finding that Romania was the more appropriate surrogate country. Surrogate
Country Mem. at 7. Also, Fine Furniture’s arguments to the contrary notwithstanding, Commerce
preliminarily determined that “both [Romania and Thailand] provide equally specific data on non-
wood raw materials, such as [surrogate values] for glue, thinner, and other chemicals.” Surrogate
Country Mem. at 7.
Next, the record contained surrogate financial statements from Romania and Thailand. 9
Specifically, usable financial statements came from three producers: Neotech Plywood Co., Ltd
(“Neotech”) and Lampang Product Ordinary Partnership (“Lampang”), of Thailand; and SC
Sigstrat SA (“Sigstrat”), of Romania. See Preliminary Decision Mem. at 21-22. Commerce then
found that, although the financial statements of Romanian company Sigstrat, and Thai companies
Neotech, and Lampang were all “useable[,] . . . contemporaneous financial statements of producers
of comparable merchandise, contain no evidence of countervailable subsidies, and contain no
qualified opinions,” the financial statement for Romanian producer Sigstrat contained the best
available information. See Preliminary Decision Mem. at 22. Commerce stated that this decision
was, among other things, in accordance with its longstanding preference of valuing all factors of
production in a single surrogate country (with the exception of labor). Preliminary Decision Mem.
at 22. Using Romanian data to value all of the factors of production, Commerce preliminarily
assigned weighted-average dumping margins 10 of 13.34 percent and 0.00 percent for Fine
9
Commerce uses surrogate financial statements to derive the financial ratio.
10
“The term ‘weighted average dumping margin’ is the percentage determined by
Consol. Ct. No. 16-00145 Page 10
Furniture and Penghong, respectively. 11 See Preliminary Results, 81 Fed. Reg. at 905.
Subsequently, Fine Furniture, Penghong, Shanghai Lairunde, Lumber Liquidators, the
Changzhou Hawd plaintiffs, and some of the consolidated-plaintiffs submitted comments on
Commerce’s Preliminary Results. See Final Results, 81 Fed. Reg. at 46,900; see also Letter from
Fine Furniture to Commerce Re: Case Brief for Consideration Prior to the Final Results (Feb. 12,
2016) (P.R. 340) (“Fine Furniture Case Br.”). Based on a review of the record and the comments
received, Commerce made certain revisions to its margin calculations for Fine Furniture and the
separate rate respondents not selected for individual examination. See Final Results, 81 Fed Reg.
at 46,901.
On July 19, 2016, Commerce issued the Final Results in which Commerce continued to
find Romania to be “the most appropriate surrogate country.” Final IDM at 10. Commerce then
assigned weighted-average dumping rates of 17.37 percent and 0.00 percent to Fine Furniture and
Penghong, respectively. See Final Results, 81 Fed Reg. at 46,901. In calculating the separate rate,
Commerce excluded from averaging the 0.00 percent rate calculated for Penghong, resulting in a
17.37 percent rate for the separate rate respondents. See Final Results, 81 Fed Reg. at 46,901; see
dividing the aggregate dumping margins determined for a specific exporter or producer by the
aggregate export prices and constructed export prices of such exporter or producer.” 19 U.S.C.
§ 1677(35)(B).
11
Commerce determined that twenty of the plaintiffs in this case were entitled to
separate rates. See Preliminary Results, 81 Fed. Reg. at 904-05. Because Commerce calculated a
0.00 percent margin for Penghong, this rate was excluded from the average in the determination
of the separate rate margin. Accordingly, Commerce preliminarily assigned to each separate rate
company a margin of 13.34 percent based on the weighted-average of the weighted-average
dumping margin calculated for Fine Furniture. Preliminary Results, 81 Fed. Reg. at 905. The rate
was amended upward in the Final Results as a result of Fine Furniture’s rate being adjusted to
17.37 percent. See Final Results, 81 Fed. Reg. at 46,901.
Consol. Ct. No. 16-00145 Page 11
19 U.S.C. § 1673d(c)(5)(A). 12
The rate changes resulted from three adjustments to the calculations of the factors of
production valuations used by Commerce in the Preliminary Results. See Multilayered Wood
Flooring from the People’s Rep. of China: Final Surrogate Value Mem. (July 12, 2016) (P.R. 364)
(“Final Surrogate Value Mem.”). Consistent with the Preliminary Results, Commerce retained
Romania as the primary surrogate country for calculating the factors of production. See Final IDM
at 10, 23. First, Commerce revised Fine Furniture’s surrogate values for certain lumber raw
materials, including white and European oak, tigerwood lumber, and jatoba lumber, and also
corrected an error in the valuation of sapelli lumber. See Final Surrogate Value Mem. at 1. Second,
Commerce revised its calculation of the surrogate financial ratios by relying on Note 4 13 of the
Sigstrat financial statement “to calculate Fine Furniture’s and [Penghong’s] factory overhead,
selling, general, and administrative expense, and profit ratios.” Final Surrogate Value Mem. at 2.
12
In administrative reviews involving nonmarket economy countries, the statute is
silent as to how Commerce establishes a rate for unselected respondents who establish their
independence from the government (i.e., the separate rate). See, e.g., Yangzhou Bestpak Gifts &
Crafts Co. v. United States, 716 F.3d 1370, 1374 (Fed. Cir. 2013) (citation omitted) (“The separate
rate for eligible non-mandatory respondents is generally calculated following the statutory method
for determining the ‘all others rate’ under § 1673d(c)(5)(A).”). To fill the statutory gap, Commerce
generally follows the method for determining the all-others rate in market economy investigations.
See, e.g., Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s
Rep. of China, 80 Fed. Reg. 4244, 4245 (Dep’t Commerce Jan. 27, 2015) (final results).
Accordingly, Commerce looks to 19 U.S.C. § 1673d(c)(5)(A), which provides that
the estimated all-others rate shall be an amount 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 determined entirely under section 1677e of this title.
19 U.S.C. § 1673d(c)(5)(A).
13
Note 4 of the Sigstrat financial statement details various expenses in 2013 and 2014.
See Letter from Levin Trade Law, P.C. to Commerce Re: Petitioners’ Comments Prior to
Preliminary Results and Submission of Factual Information (Nov. 2, 2015) (P.R. 254-264), Ex. 4.
Consol. Ct. No. 16-00145 Page 12
Third, Commerce also “revised the calculation of B&H [(brokerage and handling)] by deducting
the cost of obtaining letters of credit, in the amount of $60.00, from the total cost of B&H reflected
in the data.” Final Surrogate Value Mem. at 2. Finally, to value the face veneer wood consumed
by Fine Furniture, Commerce used a simple average of the value of imports into Romania under
two HTS subheadings, which include a “Planed; sanded; end-jointed, whether or not planed or
sanded” category and an “Other” category. See Final IDM at 23.
On September 1, 2016, Fine Furniture filed its complaint, seeking judicial review of
Commerce’s calculation of its antidumping duty rate in the Final Results. The plaintiff-intervenors
subsequently filed their motions to intervene, which the court granted.
STANDARD OF REVIEW
In reviewing Commerce’s Final Results, “[t]he court shall hold unlawful any
determination, finding, or conclusion found . . . to be unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i) (2012).
Substantial evidence is “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) (quoting
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
LEGAL FRAMEWORK
“The United States imposes duties on foreign-produced goods that are sold in the United
States at less-than-fair value.” Clearon Corp. v. United States, 37 CIT __, __, Slip Op. 13-22 at 4
(Feb. 20, 2013). In determining “whether [the] subject merchandise is being, or is likely to be, sold
at less than fair value,” the statute requires Commerce to make “a fair comparison . . . between the
Consol. Ct. No. 16-00145 Page 13
export price[14] or constructed export price[15] and normal value.[16]” 19 U.S.C. § 1677b(a). When,
as here, the merchandise in question is exported from a nonmarket economy country, 17 “the
normal value of the subject merchandise [is based on] the value of the factors of production[18]
14
The “export price” is
the price at which the subject merchandise is first sold (or agreed to
be sold) before the date of importation by the producer or exporter
of the subject merchandise outside of the United States to an
unaffiliated purchaser in the United States or to an unaffiliated
purchaser for exportation to the United States, as adjusted under
subsection (c) of this section.
19 U.S.C. § 1677a(a).
15
The “constructed export price” is
the price at which the subject merchandise is first sold (or agreed to
be sold) in the United States before or after the date of importation
by or for the account of the producer or exporter of such
merchandise or by a seller affiliated with the producer or exporter,
to a purchaser not affiliated with the producer or exporter, as
adjusted under subsections (c) and (d) of this section.
19 U.S.C. § 1677a(b).
16
Generally, “normal value” is defined as “the price at which the foreign like product
is first sold (or, in the absence of a sale, offered for sale) for consumption in the exporting country,
in the usual commercial quantities and in the ordinary course of trade . . . .” 19 U.S.C.
§ 1677b(a)(1)(B)(i).
17
A nonmarket economy country is a “foreign country that [Commerce] determines
does not operate on market principles of cost or pricing structures, so that sales of merchandise in
such country do not reflect the fair value of the merchandise.” 19 U.S.C. § 1677(18)(A). Because
Commerce deems the PRC “to be a nonmarket economy country, Commerce generally considers
information on sales in China and financial information obtained from Chinese producers to be
unreliable for determining, under 19 U.S.C. § 1677b(a), the normal value of the subject
merchandise.” Shanghai Foreign Trade Enters. Co. v. United States, 28 CIT 480, 481, 318 F.
Supp. 2d 1339, 1341 (2004).
18
Factors of production are “the factors of production utilized in producing
merchandise [which] include, but are not limited to—(A) hours of labor required, (B) quantities of
raw materials employed, (C) amounts of energy and other utilities consumed, and
Consol. Ct. No. 16-00145 Page 14
utilized in producing the merchandise and [an] added . . . amount for general expenses and profit
plus the cost of containers, coverings, and other expenses.” Id. § 1677b(c)(1)(B). To determine the
normal value of the subject merchandise in a nonmarket economy, Commerce must calculate
surrogate values using “the best available information regarding the values of such factors in a
[comparable] market economy.” Id. In doing so, Commerce relies on one or more comparable
market economy countries that are (1) “at a level of economic development comparable to that of
the nonmarket economy country,” and (2) “significant producers of comparable merchandise.” 19
Id. § 1677b(c)(4). In other words, Commerce’s task is to “attempt to construct a hypothetical
market value” of the subject merchandise in the nonmarket economy. Nation Ford Chem. Co. v.
United States, 166 F.3d 1373, 1375 (Fed. Cir. 1999).
When Commerce finds that “there is more than one country that is at the same level of
economic development as the [nonmarket economy] country and is a significant producer of
comparable merchandise, [Commerce] will consider the quality and availability of the [surrogate
value] data.” Surrogate Country Mem. at 6; see also Fujian Lianfu Forestry Co. v. United States,
33 CIT 1056, 1079, 638 F. Supp. 2d 1325, 1350 (2009) (“Data considerations may be a
determining factor for surrogate country selection.”). In evaluating surrogate value data,
Commerce “considers several factors, including whether the [surrogate values] are publicly
(D) representative capital cost, including depreciation.” 19 U.S.C. § 1677b(c)(3). In valuing the
factors of production, the statute further provides that Commerce “shall utilize, to the extent
possible, the prices or costs of factors of production in one or more market economy countries that
are—(A) at a level of economic development comparable to that of the nonmarket economy
country, and (B) significant producers of comparable merchandise.” Id. § 1677b(c)(4).
19
“Comparability is not defined in the antidumping statute or the regulation.
Commerce’s typical practice in analyzing comparability is to consider the similarities in
production, end uses, and physical characteristics between two products.” Jiaxing Brother
Fastener Co., Ltd. v. United States, 34 CIT 1455, 1463-64, 751 F. Supp. 2d 1345, 1354 (2010).
Consol. Ct. No. 16-00145 Page 15
available, contemporaneous with the POR, representative of a broad market average, tax and duty-
exclusive, and specific to the inputs being valued.” Surrogate Country Mem. at 6 (citing Policy
Bulletin No. 04.1); see also Qingdao Sealine Trading Co. v. United States, 766 F.3d 1378, 1386
(Fed. Cir. 2014) (citing the same factors). Importantly, “[t]here is no hierarchy among these
criteria, and [Commerce] must weigh available information with respect to each [factor of
production] and make a product-specific and segment-specific decision as to what the best
[surrogate value] is for each [factor of production].” Surrogate Country Mem. at 6-7; see also
Xiamen Int’l Trade and Indus. Co. v. United States, 37 CIT __, __, 953 F. Supp. 2d 1307, 1313
(2013) (“Commerce has not identified a hierarchy among these factors, and the weight accorded
to a factor varies depending on the facts of each case.”).
Commerce’s regulatory preference is to value all factors of production with surrogate
values from a single surrogate country. 19 C.F.R. § 351.408(c)(2) (2016) (“Except for labor . . . ,
the Secretary normally will value all factors in a single surrogate country.”). This preference has
been approved by the Federal Circuit. See Jiaxing Brother Fastener Co., Ltd. v. United States, 822
F.3d 1289, 1302 (Fed. Cir. 2016) (“[W]e find no error in Commerce’s determination to use Thai
import statistics to value HCl, a conclusion in accordance with its administrative preference to
appraise surrogate values from a single surrogate country.” (citing 19 C.F.R. § 351.408(c)(2)).
After comparing the available data sets, “where there exist on the record ‘alternative sources of
data that would be equally or more reliable . . . it is within Commerce’s discretion to use either set
of data.’” Zhejiang Native Produce & Animal By-Prods. Import & Export Grp. Corp. v. United
States, 41 CIT __, __, 227 F. Supp. 3d 1375, 1381 (2017) (quoting Geum Poong Corp. v. United
States, 26 CIT 322, 326, 193 F. Supp. 2d 1363, 1369 (2002)); Jiaxing Brother Fastener Co., 822
F.3d at 1302 (finding that because “[t]he record evidence shows that the HCl import statistics from
Consol. Ct. No. 16-00145 Page 16
India and Thailand were equally usable, . . . Commerce’s choice to use the Thai import statistics
is supported by substantial evidence.”).
DISCUSSION
I. Commerce’s Selection of Romania over Thailand as the Surrogate Country Is
Supported by Substantial Evidence and Is in Accordance with Law
Plaintiff first argues that Commerce’s selection of Romania, and not Thailand, as the
primary surrogate country was unsupported by substantial evidence and contrary to law. In
particular, plaintiff maintains that (1) “the decision was improperly grounded in the Petitioner’s
untimely surrogate country comments,” and (2) “Thailand provides the highest quality [surrogate
value] data under the factors examined by Commerce.” Fine Furniture Br. 8.
A. Commerce Did Not Err in Accepting Defendant’s November 2, 2015 and
November 5, 2015 Submissions
Initially, plaintiff argues that Commerce erred as a matter of law when it permitted
petitioner to submit comments supporting the selection of Romania as the surrogate country after
the June 15, 2015 deadline. See Fine Furniture Br. 8-12 (citing 19 C.F.R. § 351.302(d) 20 ). In
particular, plaintiff maintains that “Commerce set a deadline of June 15, 2015 for comments on
surrogate country selection,” and because petitioner, in its June 15, 2015 response, “chose not to
comment on the availability and quality of [factors of production] data and financial statements,”
and instead argued “that the six potential surrogate countries on Commerce’s list were equally
significant producers,” Romania was “not placed into consideration as a potential surrogate
country for the first time until after the [surrogate value] comment stage.” Fine Furniture Br. 9, 12.
20
This regulation directs Commerce not to “consider or retain in the official record
of the proceeding . . . [u]ntimely filed factual information.” 19 C.F.R. § 351.302(d)(1)(i)
(emphasis added).
Consol. Ct. No. 16-00145 Page 17
For plaintiff, by accepting petitioner’s November 2, 2015 letter stating that Romania’s surrogate
value suggestions “demonstrate the superiority of Romania as a surrogate country versus
Thailand,” and by considering surrogate country comments in an ex parte meeting, Commerce
acted “contrary to the agency’s regulations,” and therefore, arbitrarily. Letter from Levin Trade
Law, P.C. to Commerce (Nov. 2, 2015) (P.R. 254) at 2; see also Fine Furniture Br. 11 (citing
Anderson v. U.S. Sec’y of Agric., 30 CIT 1742, 1749, 462 F. Supp. 2d 1333, 1339 (2006)), 10-11
(“Commerce determined that ‘the exhibit from the ex parte meeting and November 2, 2015
language are merely a comparison of data already on the record and do not provide any factual
information.’ This determination directly contradicts Commerce’s own rejection of [petitioner’s]
untimely surrogate country comments filed as part of [petitioner’s] June 29 surrogate submission.”
(citing Final IDM at 12)).
Plaintiff, therefore, asks the court to enforce the filing deadlines and direct Commerce to
reject petitioner’s surrogate country submissions because, it argues, “[i]t is hard to imagine that
Commerce would have come to the same conclusion if Petitioners had not submitted any
arguments alleging that Romania is the appropriate surrogate country . . . .” Fine Furniture Reply
Br. Supp. Mot. J. Agency R., ECF No. 111 (“Fine Furniture Reply Br.”) 2 (“Without the benefit
of Petitioners’ arguments, Commerce could not have reasonably supported its selection of
Romania with substantial evidence.”). Moreover, plaintiff claims that Commerce’s “disciplined
approach to enforcing filing deadlines [is] a policy upheld by this Court and the Federal Circuit.”
Fine Furniture Br. 8 (citing Juancheng Kangtai Chem. Co. v. United States, 39 CIT __, __, Slip
Op. 15-93 at 19 (Aug. 21, 2015) (upholding Commerce’s rejection of untimely surrogate country
submissions because Commerce found they would “‘create undue administrative difficulties’ and
be ‘potentially unfair to the parties’”)); see also Dongtai Peak Honey Indus. Co. v. United States,
Consol. Ct. No. 16-00145 Page 18
777 F.3d 1343, 1352-53 (Fed. Cir. 2015). Accordingly, plaintiff asks for a “remand [of the Final
Results] to Commerce with instructions to first reject [petitioner’s] untimely comments and then
re-consider its surrogate country determination without relying on these untimely comments.” Fine
Furniture Br. 12.
The court finds that Commerce’s determination to retain petitioner’s surrogate country
comments was not unlawful. Romania was on Commerce’s OP list, and petitioner, prior to the
June 15, 2015 deadline, wrote that Romania (along with the other countries) was a “significant
producer[] of merchandise comparable to the merchandise subject to this review” and that it
believed that “data of at least reasonable availability and quality are available.” Letter from Levin
Trade Law, P.C. to Commerce Re: Multilayered Wood Flooring from the People’s Rep. of China
(June 15, 2015) (P.R. 185) at 2-3. Therefore, at the outset of the administrative proceeding,
Commerce identified Romania as a viable option for primary surrogate country selection, and, by
providing its view that Romania was a significant producer of comparable merchandise, petitioner
timely placed Romania into consideration during the surrogate country selection stage. See Final
IDM at 11 (“The previous surrogate country comments supporting Romania as the surrogate
country, submitted on June 15, 2015 were submitted timely, and thus remain on the record.”).
Plaintiff’s citations to Juancheng do not persuade the court that Commerce should have rejected
petitioner’s November submissions because in Juancheng, “consideration of India as a potential
surrogate country” was not raised until the post-preliminary stage in a respondent’s brief (i.e., India
was not on Commerce’s Import Administration Office of Policy list of countries at the same or
comparable level of economic development as China). See Juancheng, 39 CIT at __, Slip
Op. 15-93 at 19.
Moreover, as Commerce noted, petitioner timely submitted “Romanian surrogate value
Consol. Ct. No. 16-00145 Page 19
data” in its June 29, 2015 submission, and that submission “remain[ed] on the record, and the
Department is duly required to consider the information.” Final IDM at 11. Indeed, as a result of
petitioner’s timely submission of the Romanian surrogate value data (which was resubmitted on
November 24, 2015 without any arguments regarding the “appropriate” surrogate country),
Commerce was required to “justify its selection of the surrogates based on substantial evidence on
the record,” including addressing the Romanian data. DuPont Teijin Films v. United States, 37
CIT __, __, 931 F. Supp. 2d 1297, 1307 (2013). Also, Commerce, having considered the surrogate
value information submitted by the petitioner, found that Romanian surrogate value data was
superior to Thailand’s. Having made this finding, Commerce had a duty to select the Romanian
information. See id.
With respect to plaintiff’s argument that Commerce would not have selected Romania as a
surrogate country but for subsequent submissions to Commerce, it is not clear that this is the case.
As Commerce stated, petitioner
added no new information to the record in the [November 5, 2015] meeting, neither
in its discussions nor in documentary form. The exhibit from the ex parte meeting
and November 2, 2015 language are merely a comparison of data already on the
record and do not provide any new factual information. As stated in the Preliminary
Results, [petitioner] timely placed information supporting Romania as the surrogate
country on the record with its June 15, 2015, submission, and, at the time of the
meeting, in its June 29, 2015, submission, as well as later in its November 24, 2015,
submission.
Final IDM at 11-12. Thus, Romania was on the OP list as of May 15, 2015, and the Romanian
surrogate value data were properly before Commerce based on the timely June 29, 2015
submission. Thus, the Department was required to compare this data with the Thai surrogate value
data timely submitted by Fine Furniture, which is precisely what it did.
Finally, plaintiff both had and took the opportunity to rebut the Romanian data. On
November 12, 2015, Fine Furniture presented arguments as to why Thailand is the superior choice
Consol. Ct. No. 16-00145 Page 20
to Romania. See Letter from Mowry & Grimson, PLLC to Commerce Re: Rebuttal Surrogate
Value Comments (P.R. 274-276); Letter from Mowry & Grimson, PLLC to Commerce Re: Pre-
Prelim. Results Comments (P.R. 286). As a result, there is no evidence that plaintiff suffered
substantial prejudice, or indeed, any prejudice at all, from Commerce’s acts. See PAM S.p.A. v.
United States, 463 F.3d 1345, 1348 (Fed. Cir. 2006). Accordingly, Commerce’s consideration of
the petitioner’s submissions was in accordance with law.
B. Commerce Did Not Fail to Consider Record Evidence Regarding the Thai Data
Next, plaintiff argues that “[e]ven if the Court does not remand Commerce’s improper
procedural selection of Romania, it must nevertheless reject Commerce’s selection as a matter of
substantial evidence review,” because Commerce “inadequately considered record evidence that
established the quality and superiority of the data from Thailand” and failed to “address
disqualifying flaws in the Romanian data as required under the best available information
standard.” Fine Furniture Br. 13. In particular, plaintiff claims that “Commerce did not adequately
weigh the strengths and weaknesses of the available data options from Romania and Thailand for
labor, financial ratios, electricity and material inputs.” Fine Furniture Br. 14. Thus, for plaintiff,
the overall weight of the evidence supports the selection of Thailand as the surrogate country
because the Thai data is more specific “across the seven categories of data: labor, financial ratios,
utilities, materials, packing, materials, freight and by-products.” Fine Furniture Br. 40-41.
Accordingly, plaintiff maintains that “Commerce’s determination . . . was unsupported by
substantial evidence and must be remanded to Commerce.” Fine Furniture Br. 40. The court will
address these arguments in turn.
1. Commerce Reasonably Determined that the Contemporaneous Romanian Labor
Data Supported the Selection of Romania as the Primary Surrogate Country
Plaintiff first argues that the “Romanian data are inferior to the Thai data with respect to
Consol. Ct. No. 16-00145 Page 21
labor” because the Thai data is more industry-specific. Fine Furniture Br. 14. In particular, plaintiff
claims that “Commerce conceded that ‘the Thai labor [surrogate values] are more specific than the
Romanian labor [surrogate values] because they are only for the ‘[m]anufacturing of veneer sheets
and wood-based panels [which are key components of Fine Furniture’s production],’ whereas the
Romanian [data] also includes [the manufacturing of] ‘articles of straw and plaiting materials
[products not produced by Fine Furniture].’” Fine Furniture Br. 14 (quoting Final IDM at 20).
Plaintiff makes this argument even though the Romanian data is more contemporaneous. Because
plaintiff maintains that specificity to the manufacturing process is more important than
contemporaneity, it argues that Commerce erred when it “concluded that the Romanian labor data
are superior because they are contemporaneous (2013) with the POR . . . .” Fine Furniture Br. 14.
Thus, plaintiff asks that the court “remand with instructions to prioritize specificity . . . .” Fine
Furniture Br. 16.
In Dorbest Limited v. United States, the Federal Circuit found that Commerce’s regression
method for determining labor surrogate values in nonmarket economy countries (by averaging
wage rate data collected from multiple countries) was not consistent with 19 U.S.C. § 1677b(c)(4),
and thus, invalidated Commerce’s regulation codifying the regression-based method (19 C.F.R.
§ 351.408(c)(3)). See Dorbest Ltd. v. United States, 604 F.3d 1363, 1372-73 (Fed. Cir. 2010).
Commerce subsequently published its New Labor Rate Policy, in which it stated that it would
begin using wage rate data found in Chapter 6A of the International Labor Organization’s (“ILO”)
Yearbook of Labor Statistics 21 from the primary surrogate country to value labor. See Antidumping
21
As Commerce stated in its New Labor Rate Policy, “[t]he ILO collects labor cost
data by country and industry, which is reported on the basis of the United Nations’ International
Standard Classification of All Economic Activities . . . . The industry-specific data is revised
periodically, and not all revisions report data for all industries.” New Labor Rate Policy, 76 Fed.
Reg. at 36,094. Chapter 6A of the ILO Yearbook of Labor Statistics covers all costs related to labor
Consol. Ct. No. 16-00145 Page 22
Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of
Production: Labor, 76 Fed. Reg. 36,092, 36,093 (Dep’t Commerce June 21, 2011) (“New Labor
Rate Policy”).
Plaintiff claims that that the notice announcing the New Labor Rate Policy states a
preference for industry-specificity over contemporaneity. Plaintiff refers to the following
language:
[Commerce] will value the [nonmarket economy] respondent’s labor input using
industry specific costs prevailing in the primary surrogate country, as reported in
Chapter 6A of the ILO Yearbook of Labor Statistics . . . [Commerce] sorts the ILO
data based on data parameters in the following order: 1. “Sub-classification,”
i.e., if there is no industry-specific data available for the surrogate country within
the primary data source, [i.e., ILO Chapter 6A data] . . .; 2. “Type of Data,” i.e.,
reported under categories compensation of employees and labor cost . . .
3. “Contemporaneity,” i.e., [Commerce] uses the most recent earnings/wage rate
data point available. 4. The unit of time for which the wage is reported . . . .
[Commerce selects from the following categories in the following hierarchy:
(1) per hour; (2) per day; (3) per week; or (4) per month.]
Fine Furniture Br. 14 (quoting New Labor Rate Policy, 76 Fed. Reg. at 36,094 n.11) (boldface as
in original; italics supplied). For plaintiff, “[t]he plain language of this statement (‘data parameters
in the following order’) unquestionably elevates the importance of industry specificity over
contemporaneity in Commerce’s choice of labor data within the selected surrogate country.” Fine
Furniture Br. 15. Plaintiff, therefore, maintains that “[t]his same policy should not be ignored when
comparing sources from two countries and based on Commerce’s own admission, the Thai data
are more industry-specific . . . .” Fine Furniture Br. 15.
Commerce’s selection of the Romanian labor data is supported by substantial evidence. As
an initial matter, the court is not convinced that the list plaintiff cites to in the New Labor Rate
including wages, benefits, housing, training, etc. (as distinct from, for example, Chapter 5B data,
which reflects only direct compensation and bonuses). New Labor Rate Policy, 76 Fed. Reg. at
36,093.
Consol. Ct. No. 16-00145 Page 23
Policy constitutes a “hierarchy” of anything other than the types of data within each “data
parameter.” The list (notably described as a list of “filters” to “determine the most appropriate
labor cost data to use”) breaks out four main categories, or “data parameters”: (1) “Sub-
Classification”; (2) “Type of Data”; (3) “Contemporaneity”; and (4) “The unit of time for which
the wage is reported.” Within each data parameter, however, is an express hierarchy:
The Department sorts the ILO data based on data parameters in the following order:
1. “Sub-classification,” i.e., If there is no industry-specific data available for the
surrogate country within the primary data source, i.e., ILO Chapter 6A data,
the Department will then look to national data for the surrogate country for
calculating the wage rate;
2. “Type of Data,” i.e., reported under categories compensation of employees and
labor cost. We use labor cost data if available and compensation of employees
where labor cost data are not available;
3. “Contemporaneity,” i.e., the Department uses the most recent earnings/wage
rate data point available;
4. The unit of time for which the wage is reported. The Department selects from
the following categories in the following hierarchy: (1) per hour; (2) per day;
(3) per week; or (4) per month. Where data is not available on a per-hour basis,
the Department converts that data to an hourly basis based on the premise that
there are 8 working hours per day, 5.5 working days a week and 24 working
days per month.
New Labor Rate Policy, 76 Fed. Reg. at 36,094 n.11 (emphasis added). Thus, the list does not
establish a hierarchy among the “data parameters” themselves, but rather, provides a way for
Commerce to prioritize different data within each category. That is, there is no indication that the
order in which the categories themselves are listed has any significance.
Indeed, as has often been noted when Commerce evaluates surrogate value data generally,
it “prefers surrogate[] values that are contemporaneous with the period of review, publicly
available, product-specific, representative of broad market average prices, and free of taxes and
import duties,” and it “has not identified a hierarchy among these factors, and the weight accorded
Consol. Ct. No. 16-00145 Page 24
to a factor varies depending on the facts of each case.” Xiamen Int’l Trade and Indus. Co., 37 CIT
at __, 953 F. Supp. 2d at 1312-13. Therefore, it is unlikely that Commerce established such a
hierarchy between contemporaneity and specificity for the labor surrogate value alone while
having no hierarchy for other factors of production.
Moreover, plaintiffs do not argue that the Romanian labor data is not industry-specific.
Rather, they argue that the Thai data is more specific. But plaintiffs have provided no reason for
the court to conclude that it was unreasonable for Commerce to find that less specific,
contemporaneous data is preferable to non-contemporaneous data that is more specific. As both
contemporaneity and specificity are generally given equal weight by Commerce, it was reasonable
for Commerce to find that the Romanian data was specific enough and to prefer contemporaneous
data in this instance. See id. Accordingly, the court finds that Commerce’s selection of the
contemporaneous Romanian labor data is supported by substantial evidence, and supports its
selection of Romania as the primary surrogate country.
2. Commerce Reasonably Determined that the Romanian Electricity Data Is More
Specific than the Thai Electricity Data
In the Final Results, Commerce valued electricity using Eurostat data for Romania,
averaging all bands (or classifications based on consumption rate) of industrial consumers for the
second half of 2013 and the first half of 2014. See Surrogate Value Mem. for the Preliminary
Results (Dec. 31, 2015) (P.R. 298) at 5; Final Surrogate Value Mem. at 1. Plaintiff argues that “the
Thai electricity rates . . . are specifically for Large General Service, which Fine Furniture selected
as the most comparable classification to its own user category in China.” Fine Furniture Br. 22-
23. Plaintiff then states that the Romanian electricity data “represent six different bands that are
differentiated by annual consumption and maximum demand,” and “represent various rates for
industrial electricity  small to large.” Fine Furniture Br. 22. Thus, plaintiff argues that because
Consol. Ct. No. 16-00145 Page 25
the “Romanian data include irrelevant industrial user categories while the Thai data are specific to
Large General Service,” the Thai electricity data is more specific. Fine Furniture Br. 23.
Fine Furniture next contends that in its submission it “used its own actual POR monthly
[electrical] consumption data along with the Thai demand charge to calculate a Demand Charge
per KWH, making this portion of the electricity [surrogate value] more specific to Fine Furniture’s
production of subject merchandise.” Fine Furniture Br. 23. Plaintiff argues that its approach is an
“established practice,” and Commerce was required to provide a reasonable explanation for
departing from this method and instead valuing the electricity input using Romanian Eurostat data
without employing Fine Furniture’s actual POR monthly electrical consumption data. 22 Plaintiff
maintains that Commerce failed to provide such an explanation. Therefore, plaintiff contends that
“Thailand provides more specific and accurate electricity [surrogate value] data than Romania and,
thus, Commerce’s reliance on Romania’s electricity [surrogate value] as part of its surrogate
country determination was unsupported by substantial evidence.” Fine Furniture Br. 23.
Fine Furniture then argues that the “Thai electricity data are also of better quality than the
Romanian data.” Fine Furniture Br. 21. In particular, plaintiff claims that the Thai electricity data
is more detailed because it “provide[s] both peak and off-peak charges that allow Commerce to
calculate a weighted-average,” which “is a more precise representation of the actual costs for an
energy consumer,” when compared to the “Romanian single-tariff electricity data.” Fine Furniture
Br. 21-22. In other words, because the Thai data provides peak and off-peak rates, plaintiff claims
that they “account for natural difference[s] in price structure” caused by varying electricity rates
22
The Romanian electricity rates were reported as biannual kilowatts per hour
(KWH), and Commerce obtained the average rate of 0.3271 Lei per kilowatt-hour. Commerce did
not inflate this electricity rate, because it was contemporaneous with the POR. See Surrogate Value
Mem. for the Preliminary Results (Dec. 31, 2015) (P.R. 298) at 5.
Consol. Ct. No. 16-00145 Page 26
during peak and off-peak hours. Fine Furniture Br. 22.
The court finds that Commerce’s selection of the Romanian single-tariff electricity data
was supported by substantial evidence. As an initial matter, Fine Furniture’s arguments that (1) the
Thai electricity rates are specifically for “Large General Service,” and therefore are more specific
to Fine Furniture, and (2) Commerce should have used Fine Furniture’s “own actual POR monthly
consumption data along with the Thai demand charge to calculate a Demand Charge per KWH,”
were not made before Commerce, and thus, have not been properly exhausted. Accordingly, the
court will not take these issues up for the first time here. See, e.g., Gerber Food (Yunnan) Co. v.
United States, 33 CIT 186, 194, 601 F. Supp. 2d 1370, 1379 (2009); Mid Continent Nail Corp. v.
United States, 37 CIT __, __, 949 F. Supp. 2d 1247, 1259-60 n.10 (2013) (“Issues that are not
addressed in an administrative case brief filed with the agency are generally deemed abandoned.”).
As to plaintiff’s claim that the Thai electricity rates are more specific because they provide
both peak and off-peak charges from which the Department could calculate a weighted average,
the court finds that Commerce’s decision to use the Romanian electricity data is supported by
substantial evidence. In the Final Results, Commerce emphasized that Fine Furniture itself did not
report different values for its own electricity consumption based on peak or off-peak hours, nor
did it provide the Department with any proposed calculations for using peak and off-peak rates.
See Final IDM at 21. Thus, because Fine Furniture never documented any difference in its
electricity consumption during peak or off-peak hours, the Thai prices do not add greater accuracy.
See Final IDM at 21 (“[T]here is only one surrogate value applied to Fine Furniture’s consumption
per CONNUM, which represents an average of the period.” (citing, inter alia, Fine Furniture’s
Sec. D Resp. (June 12, 2015), at Ex. D-15, D-15)). In addition, Commerce found that because the
Romanian electricity data “is an average of twelve data points” contemporaneous with the POR,
Consol. Ct. No. 16-00145 Page 27
whereas the Thai data would have been an average of only three data points, the Romanian data
was of better quality. See Final IDM at 21; Dorbest Ltd. v. United States, 30 CIT 1671, 1708, 462
F. Supp. 2d 1262, 1294 (2006) (“Commerce has acknowledged . . . the desirability of a broader
data set . . . .”). In other words, because the Romanian data represents a greater number of data
points regarding industrial electricity consumption, its average will be more precise. See
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,367 (Dep’t Commerce May
19, 1997) (“In general, we believe that more data is better than less data, and that averaging of
multiple data points . . . should lead to more accurate results in valuing any factor of production.”).
Thus, the court finds this decision to be supported by substantial evidence.
3. Commerce Reasonably Determined that the Romanian Data Are More Specific
for Important Raw Materials than the Thai Data
Next, plaintiff argues that “Commerce’s determination that the Romanian HTS is more
specific overall for material inputs [as distinct from labor and electricity] is unsupported by
substantial evidence as shown by a close examination of three key inputs  lumber, glue and
veneers  as well as a summary comparison of all additional inputs . . . .” Fine Furniture Br. 23.
a. Lumber
Plaintiff first claims that Commerce’s finding that “five of Fine Furniture’s seven lumber
inputs are more specifically classified using the Romanian HTS” is unsupported by substantial
evidence because it “improperly elevates the importance of lumber species over the planed
characteristic and it relies on an erroneous HTS classification for Sapelli lumber.” Fine Furniture
Br. 23-24 (citing Final IDM at 17). Plaintiff’s argument stems from Commerce’s recognition that
Fine Furniture’s lumber is “planed” because “Fine Furniture’s production process does not list the
process of ‘planing.’” Fine Furniture Br. 24 (quoting Final IDM at 24 n.70). For plaintiff, this
statement confirms that Commerce was aware that the lumber it bought was already planed.
Consol. Ct. No. 16-00145 Page 28
According to Fine Furniture, if it had purchased “rough lumber that was not planed, it would have
[had] to take an additional production step to further finish the rough lumber into a planed form to
make its finished flooring product.” Fine Furniture Br. 24. Thus, plaintiff argues that “once the
most accurate HTS [subheadings] are selected” (i.e., HTS subheadings that describe planed wood),
the Thai HTS schedule offers greater specificity for five 23 lumber inputs and equal specificity for
the rest. Fine Furniture Br. 24 (“Commerce was required to consider [surrogate values that are] as
representative of the production process in the NME country as possible.” (internal quotations and
emphasis omitted).
Relying on the planing characteristic, plaintiff claims the Thai HTS offers greater
specificity for five of the seven species it uses in its manufacturing process—tigerwood, jatoba,
santos mahogany, poplar, and sapelli lumber. The Romanian HTS description, on the other hand,
contains “rough, un-planed” lumber. Fine Furniture Br. 23-32, 26 (“The HTS descriptions show
that the Romanian HTS classifications represent non-planed lumber but the Thai classifications
specifically include ‘planed’ lumber.”). Plaintiff makes its specificity argument even though the
Thai HTS subheadings are not species-specific to most of the lumber species it used to make its
products, while the Romanian subheadings are species-specific.
Although plaintiff accepts that “species is one characteristic of Fine Furniture’s lumber
inputs,” and although the Thai subheadings plaintiff proposes are not species-specific, it
nevertheless maintains that “Commerce was wrong to elevate . . . [species] over the importance of
planing . . . because the latter is directly linked to an additional step in the production process,
which would by nature include additional equipment, materials and maintenance costs.” Fine
23
Plaintiff actually argues that the Thai HTS schedule offers greater specificity for
four of the seven lumber species, but this is because plaintiff treats tigerwood and jatoba as one
input.
Consol. Ct. No. 16-00145 Page 29
Furniture Br. 25. Therefore, given a choice between planed lumber of a different species or rough
lumber of the same species, Fine Furniture maintains that Commerce’s “only reasonable choice”
was to select the Thai HTS reflecting planed lumber. Fine Furniture Br. 26.
With regard to the remaining lumber inputs (white oak and European white oak), plaintiff
contends that the Thai and Romanian HTS schedules are equal in specificity because they are
species-specific in both countries, and both HTS classifications represent planed lumber. See Fine
Furniture Br. 24, 30.
Commerce’s selection of the Romanian HTS for lumber inputs is supported by substantial
evidence. The evidence cited by plaintiff suggests that, at best, Commerce was presented with two
permissible HTS subheadings (i.e., categories describing only planed lumber which were not
specific as to wood species and categories that did not include planed lumber, but were specific to
wood species). As Commerce states, species of wood is an important characteristic in producing
Fine Furniture’s product, as demonstrated by it being the first product characteristic in the
CONNUM for Fine Furniture’s flooring. 24 Final IDM at 18. Indeed, Fine Furniture’s final factors
of production descriptions for surrogate value purposes describe all lumber inputs by species. See
Fine Furniture’s Suppl. Sec. D Resp. (C.R. 166), at Ex. D-6, D-10.
Moreover, if an HTS subheading was both species-specific and included planed lumber,
Commerce chose that subheading (e.g., Commerce’s HTS selection for white oak 25), however,
24
Commerce collects data from each respondent to determine the cost of production
on a product-specific CONNUM basis, as defined in terms of a hierarchy of specified physical
characteristics determined in each antidumping proceeding. The hierarchy of product
characteristics defining a unique CONNUM varies from case to case depending on the nature of
the merchandise.
25
In the case of oak inputs (both white and European), Commerce chose the
Romanian HTS because it specifically excluded “blocks strips and friezes for parquet of wood
block flooring, not assembled,” and was therefore more specific than the Thai HTS subheading.
Consol. Ct. No. 16-00145 Page 30
because “no imports occurred in either country” during the period of review under certain
subheadings that were both species-specific and planed (e.g., in the case of sapelli 26 lumber), the
Department reasonably found that it had to use “an alternative classification,” which in these
circumstances, prioritized wood species over the “planed” characteristic. Final IDM at 18.
Plaintiff makes no convincing argument as to why planed wood should be found to be more
specific than a wood’s species. Although Commerce recognized the importance of planed wood
in Fine Furniture’s production process, it ultimately determined (at least in part due to Fine
Furniture’s own description of its inputs) that species specificity was of greater importance.
Plaintiff would have it otherwise, but gives no reason as to why planing should be more important
than species. Had Fine Furniture shown that planed lumber was more important to the cost of the
lumber input than its species, for instance, the court might find otherwise. Having failed to provide
a rationale for finding that Commerce’s choice was unreasonable, Fine Furniture cannot prevail.
Thus, the court finds that Commerce’s determination regarding lumber inputs is supported by
substantial evidence.
See Final IDM at 24.
26
As stated in the Final Results, Commerce was unable to use either the Thai or
Romanian HTS categories describing both species-specific and planed sapelli lumber. This was
because no imports occurred in either country under those particular subheadings during the POR.
See Final Results at 18. There were, however, imports under the species-specific, un-planed
Romanian HTS category, and therefore Commerce chose this subheading over a non-specific,
planed Thai alternative. Plaintiff’s attempt to call this a “misreading of the relevant HTS
schedules,” is puzzling. See Fine Furniture Br. 31. Commerce did not claim that there were no
Thai HTS categories that were species-specific, but simply found that there were no imports during
the relevant period under the Thai HTS category. See Final IDM at 18 (“Unlike Thailand, which
had no imports during the period under the “Sapelli” specific headings, there were imports to
Romania under the 4407.27.99 “Sapelli” specific heading. Therefore, the Department finds that
the Romanian HTS is more specific for valuation of Fine Furniture’s “Sapelli” lumber than the
Thai HTS.”).
Consol. Ct. No. 16-00145 Page 31
b. Veneers
Plaintiff also argues that “Commerce improperly determined that the Romanian HTS
[subheadings] for veneers are more specific” than the Thai HTS subheadings because Commerce
“improperly understated the face veneer specificity and failed to adequately consider the planed
characteristic.” Fine Furniture Br. 35. Thus, as with the lumber input, plaintiff maintains that Thai
HTS subheadings, which specifically include the “planed” characteristic and because they
specifically break out “face veneer sheets,” should outweigh Romanian HTS subheadings, which
are more specific in terms of veneer thickness and wood species. See Fine Furniture Br. 37. Thus,
plaintiff argues that “Thailand provides overall greater specificity on veneers.” Fine Furniture
Br. 38.
It is uncontested that the Thai subheading is more specific within the coniferous category
for face veneers. Nevertheless, defendant responds that “the Romanian HTS [subheadings]
presented greater specificity” because “[f]or all veneers, and particularly ‘face veneers,’ pricing
varies significantly based on relative thickness . . . .” Def.’s Br. 22 (emphasis added). Defendant
argues that “[t]he second product characteristic in the [product] control number [listed by Fine
Furniture] . . . is ‘Face (Veneer) Thickness,’ thus indicating its importance in the hierarchy of the
product characteristics.” Def.’s Br. 22. Therefore, the Department maintains that because “the
Romanian HTS provides greater thickness specificity for ‘tropical’ and ‘other’ face veneers” by
providing a “break down by thickness,” its decision to use the Romanian data is supported by
substantial evidence. Def.’s Br. 23.
Commerce’s decision to use the Romanian HTS subheadings to value Fine Furniture’s
veneers is indeed supported by substantial evidence. As Commerce states, “For all veneers and
particularly ‘face veneers’ pricing varies significantly based on relative thickness and whether or
Consol. Ct. No. 16-00145 Page 32
not they are planed, sanded or end jointed.” Final IDM at 19. Thus, Commerce recognized that
specificity in both thickness and in the “planed” characteristic is important in valuing Fine
Furniture’s veneers. To break the tie, however, Commerce reasonably relied on Fine Furniture’s
listing as its second product characteristic in the multilayered wood flooring CONNUM “thickness
of face veneer,” which, for Commerce, suggested the characteristic’s greater importance in the
“hierarchy of product characteristics,” and tipped Commerce in favor of preferring specificity in
wood thickness over the planed characteristic. Final IDM at 19-20. This decision is not
unreasonable. A manufacturer would normally list product characteristics in order of importance.
Therefore, because the Romanian HTS subheadings for “tropical” and “other” face veneers
provide specific breakouts for wood thickness, Commerce’s decision to use the Romanian HTS
subheadings for these inputs was supported by substantial evidence.
With regard to the “coniferous” category, although plaintiff is correct that the Thai HTS
subheading is more specific for this category as it is not only species-specific, but also provides a
breakout for Fine Furniture’s product (i.e., “face veneer sheets”), the court nevertheless finds that
Commerce’s decision to use the Romanian HTS subheading is reasonable. Specifically, based on
the observation that cost varies with thickness, the court finds Commerce reasonably determined
that greater specificity in one out of the three categories does not outweigh “the species and
thickness attribute specificity” applicable to all of the Romanian HTS subheadings for veneers. As
Commerce stated,
While there are specific break outs in the Thai HTS for “Teak Veneer” and
coniferous “Face Veneers,” the Department must determine the most specific
[surrogate value] for all veneers. Additionally, Fine Furniture has not stated why
the teak veneer HTS is applicable to its [normal value] calculation. The Department
has determined that the species and thickness attribute specificity, applicable to all
veneers, outweighs the one or two specific “face veneer” break outs that may occur
in the Thai HTS.
Consol. Ct. No. 16-00145 Page 33
Final IDM at 20. The court finds it reasonable that, overall, Commerce concluded the specificity
in thickness applicable to all veneers outweighs having specific breakouts for coniferous veneers
because using veneer thickness results in a more accurate cost. Therefore, the court finds
Commerce’s determination is supported by substantial evidence.
c. Glues
In the Final Results, Commerce selected various eight-digit Romanian HTS categories to
value Fine Furniture’s glue, which Commerce found to be “the most specific category in the
Romanian HTS.” Final IDM at 17. Plaintiff argues that “Commerce erred in relying on the 8-digit
Romanian HTS [subheadings] for numerous glues consumed by Fine Furniture in its
manufacturing process when the more specific 11-digit Thai HTS [subheadings] are available” in
the Thai data. Fine Furniture Br. 32. For plaintiff, because “all Thai 11 digit HTS
[subheadings] listed [by it] specify ‘other,’” then “by definition,” they exclude “additional
irrelevant products that Fine Furniture did not consume.” Fine Furniture at 34. Thus, for plaintiff,
the Thai HTS “other” subheadings are “more specific than the . . . Romanian codes that do not
offer the further ‘other’ description.” Fine Furniture Br. 34 (“Looking at the big picture, any time
an HTS [subheading] uses ‘other,’ it is excluding some other descriptive language. ‘Other’ can be
read as ‘other than.’”). Therefore, plaintiff argues that the additional descriptive “others” in the
Thai HTS subheadings makes the Thai data the best available information.
Plaintiff then points out that Fine Furniture provided Commerce with a surrogate value
spreadsheet containing a summary of the relevant inputs, surrogate values, and sources of the
surrogate values, including a table of suggested Thai HTS subheadings for its glue inputs, in its
June 29, 2015 surrogate value submission. Plaintiff maintains that Commerce should have relied
on this information and found the Thai data was more specific than the Romanian data on glue
Consol. Ct. No. 16-00145 Page 34
inputs. See Fine Furniture Br. 34 (“[T]he very fact that Fine Furniture selected these 11-digit [Thai]
codes in a certified factual submission establishes that these codes best represent Fine Furniture’s
glues and should have been given weight by Commerce.”) (citing Polyethylene Retail Carrier Bag
Comm. v. United States, 232 Fed. Appx. 965, 972 (Fed. Cir. 2007)). For plaintiff, “Commerce’s
own practice supports relying upon a respondent’s own representations as to the actual input used
in their production process,” Fine Furniture Br. 34 (citing Polyethylene Retail Carrier Bag Comm.
v. United States, 29 CIT 1418, 1436, Slip Op. 5-157 at 30 (Dec. 13, 2005)), and therefore,
“Commerce was required to accept Fine Furniture’s own representation of its glue inputs . . . .”
Fine Furniture Br. 34-35.
The court finds that Commerce’s selection of the Romanian HTS subheadings to value
Fine Furniture’s glue inputs is supported by substantial evidence. In making this holding, the court
first emphasizes that there is nothing on the record regarding the specific composition of Fine
Furniture’s glue, and therefore, any “claims of greater specificity of the HTS subheadings that can
be applied to them are immaterial.” Final IDM at 17. It is the parties’ obligation to create the
agency record. See Zenith Elecs. Corp. v. United States, 988 F.2d 1573, 1583 (Fed. Cir. 1993)
(citation omitted) (“The burden of production [belongs] to the party in possession of the necessary
information.”); Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1336 (Fed. Cir.
2002) (respondent has burden to create an accurate record). Indeed, where, as here, plaintiff
provided no record of the chemical composition of its glue, there is also no way to determine if
plaintiff’s claim that additional “other” descriptions afforded by an eleven-digit HTS subheading
would actually be more specific to Fine Furniture’s glue input. In other words, there is no way to
verify whether the “excluded” definitions in an eleven-digit code should be excluded or not. Thus,
Fine Furniture’s claim that the Thai data is more specific simply because Fine Furniture used Thai
Consol. Ct. No. 16-00145 Page 35
data on its surrogate value spreadsheet is unconvincing. Moreover, Commerce found that the
Romanian data matched the types of glue Fine Furniture used (i.e., glue urea, glue melamine, etc.).
See Final IDM at 17. Fine Furniture’s mere claim, with no basis in the record, that the Thai HTS
excludes “irrelevant products,” is not enough to make Commerce’s selection unreasonable.
Therefore, Commerce did not act unreasonably in selecting the Romanian data.
As to Fine Furniture’s June 29, 2015 surrogate value submission that provided a table
containing specific Thai HTS subheadings the company considered to best fit its own glue inputs,
the court notes that Fine Furniture did not provide any comparison between the HTS descriptions
and its own submitted factors of production descriptions. Although such a comparison is not
required, it would have provided Commerce with some evidence as to the accuracy of Fine
Furniture’s suggested HTS categories. Lacking any record evidence as to the composition of Fine
Furniture’s glues, and because Commerce’s preference to value all factors from the primary
surrogate country is reasonable, the court finds that Fine Furniture’s table provides no reason why
the government’s decision not to accept the suggested Thai HTS categories at face value was
unreasonable.
4. Fine Furniture Failed to Exhaust Its Administrative Remedies Regarding the
Claimed Superiority of Thai Data for Additional Inputs
Next, plaintiff argues that Thailand provides more specific surrogate value data for valuing
certain additional inputs, including chemical materials and freight. Fine Furniture Br. 39-40.
Plaintiff also claims that there is equal specificity between Romania and Thailand for purposes of
valuing water, coal, finishing materials, and by-products. See Fine Furniture Br. 39-40.
In response, defendant states that “Fine Furniture did not raise these claims before
Commerce in its administrative case brief,” and “[t]he Court should decline to address them now.”
Def.’s Br. 28.
Consol. Ct. No. 16-00145 Page 36
Plaintiff’s arguments were not properly exhausted before Commerce. Before the
Department, Fine Furniture argued that specific “key surrogate values” “demonstrate[] that the
record overwhelmingly supports the choice of Thailand as the surrogate country over Romania”:
(1) various raw materials, including oak lumber, thinner, glues, lumber, and veneers; (2) labor; and
(3) electricity. See Fine Furniture Case Br. at 26, 15-26. Although plaintiff claims it can raise
arguments regarding additional surrogate values for the first time in its brief before the court
because “Commerce revised numerous surrogate values in the Final Results and thus, a re-framing
of the overall picture of all inputs [is] necessary to the Court,” Fine Furniture Reply Br. 19, the
court is unconvinced. As the Final Surrogate Value Memorandum makes clear, “[m]any of the
factor valuations remain unchanged since the publication of the preliminary results.” Final
Surrogate Value Mem. at 1. Indeed, the Final Surrogate Value Memorandum shows that the
Department only revised surrogate values for white and European oak lumber, tigerwood lumber,
jatoba lumber, sapelli lumber, the calculation of surrogate financial ratios, and the calculation of
brokerage and handling. Final Surrogate Value Mem. at 1-2. None of these revisions involve the
“additional” surrogate values newly raised in plaintiff’s brief, and thus, it is not the case that
“plaintiff had no opportunity to raise the issue at the administrative level.” LTV Steel Co., Inc. v.
United States, 21 CIT 838, 869, 985 F. Supp. 95, 120 (1997). Therefore, because no contrary
reason exists for departing from the exhaustion requirement, the court declines to entertain these
new arguments. See, e.g., Mid Continent Nail Corp., 37 CIT at __, 949 F. Supp. 2d at 1259-60
n.10.
II. Commerce Reasonably Relied on the Sigstrat Financial Statement
In the Final Results, Commerce “concluded that the Romanian financial statement from
Sigstrat [was] [the] best available [information] on the record of th[e] proceeding.” Final IND at
Consol. Ct. No. 16-00145 Page 37
15. Plaintiff argues that Commerce’s decision to use a Romanian financial statement is
unsupported by substantial evidence because there are “more and better financial statements
available from Thailand than Romania.” Fine Furniture Br. 16.
First, plaintiff argues that the “Romanian financial statement on the record [(Sigstrat’s)] is
distorted by significant government influence,” and therefore is not usable. Fine Furniture Br. 18.
To support its position that the financial statement is distorted, plaintiff points to the Sigstrat
financial statement itself, which notes “[i]ncreasing costs of wood dictated by the state or
confirmed by the state policy” and “[i]ncreasing energy costs ‘dictated’ by the state or state
confirmed.” Fine Furniture Br. 18. Plaintiff also points to portions of the Sigstrat financial
statement stating that “[t]he company cannot increase prices by 15-20%, as the state can” and that
“‘due to state policy within the industry,’ the company ‘will have to fight bankruptcy in 2015.’”
Fine Furniture Br. 19. For plaintiff, these statements support a finding that “[g]overnment
influence severely jeopardizes Sigstrat’s financial health.” Fine Furniture Br. 19. Thus, plaintiff
maintains that Sigstrat’s financial statements cannot be used.
Plaintiff further maintains that by “acknowledg[ing] that Romsilva [(a state-owned
company)] is a domestic competitor to Sigstrat and as such has an influence on the market in
Romania,” Commerce has conceded its point. See Fine Furniture Br. 19. In other words, plaintiff
rejects Commerce’s conclusion that “the existence of a competitor that is much larger than Sigstrat
do[es] not amount to an argument of a potential distortive influence over” Sigstrat’s financial
results and that “there is no information in Sigstrat’s financial statement to support the contention
that Sigstrat is restricted with regard to its pricing or production by Romsilva’s activities.” Final
IDM at 12. Plaintiff then argues that Sigstrat “cannot be accurately classified as a market-economy
company . . . when its own financial statements show that it is operating in an industry with
Consol. Ct. No. 16-00145 Page 38
significant state control” and that the company “faced bankruptcy ‘due to state policy within the
industry.’” Fine Furniture Br. 19 (quoting Final IDM at 12). Thus, plaintiff maintains that
“Commerce’s decision to use Sigstrat in the final results, especially in the face of two other
accurate statements, must be overturned by this Court as unsupported by substantial evidence.”
Fine Furniture Br. 19-20.
Second, plaintiff argues that Commerce “failed to adequately consider evidence that
Sigstrat received countervailable subsidies in the form of investment subsidies.” Fine Furniture
Br. 20. That is, plaintiff claims that because “Commerce’s consistent practice is to disregard
financial statements that include evidence of subsidies,” Commerce should have found that the
line item in Sigstrat’s annual report listing an “investment subsidy” was enough to cause
Commerce to “believe or suspect” that Sigstrat was receiving a countervailable subsidy. Fine
Furniture Br. 20 (first citing Goldlink Indus. Co. v. United States, 30 CIT 616, 629, 431 F. Supp.
2d 1323, 1334-35 (2006) and then citing Fuyao Glass Indus. Grp. v. United States, 29 CIT 109,
119, Slip Op. 5-6 at 16-17 (Jan. 25, 2005)); see also Fine Furniture Br. 20 (“By requiring such a
high bar to even consider evidence of subsidies [(i.e., by requiring a CVD determination on the
particular program in the particular country)], Commerce goes beyond Congress’s intention in the
governing statute, which was not for Commerce to conduct a full investigation regarding subsidies
received by a surrogate producer.” (citing H.R. Conf. Rep. No. 100-576 at 590-91, reprinted in
1988 U.S.C.C.A.N. at 1623-24)).
Finally, plaintiff claims that because there are two Thai financial statements (those of
Neotech and Lampang) on the record, the Thai financial statements are necessarily “more
accurate” than the single Romanian financial statement. Fine Furniture Br. 17. For plaintiff, this is
because “‘multiple financial statements . . . eliminate distortions.’” Fine Furniture Br. 17 (quoting
Consol. Ct. No. 16-00145 Page 39
Jiaxing Brother Fastener Co. v. United States, 38 CIT __, __, 961 F. Supp. 2d 1323, 1332 (2014));
see also Fine Furniture Br. 17 (“Commerce has recognized that multiple financial statements lead
to more accurate surrogate financial ratios.” (citations omitted)).
The court finds Commerce reasonably determined the Sigstrat financial statement was
usable and not distorted by government influence or subsidies. Commerce has provided adequate
reasons why the mere presence of a large state-owned entity within the wood industry did not
render Sigstrat’s financial statement unusable. Specifically, Commerce found that “there is no
information in Sigstrat’s financial statement to support the contention that Sigstrat is restricted
with regard to its pricing or production by Romsilva’s activities, or that Sigstrat is itself directly
under the control of the Romanian Government.” Final IDM at 12 (“[P]rice increases in a non-
contemporaneous period (i.e., 2012), and the existence of a competitor that is much larger than
Sigstrat do not amount to an argument of a potential distortive influence . . . .”).
With respect to the statements cited by plaintiff concerning increasing costs, the court notes
that these statements were forward-looking, and therefore did not address the actual period of time
to be used to calculate the financial ratios. Moreover, other record evidence seems to demonstrate
that Sigstrat was not under the control of any single supplier. See Final IDM at 13 (“Sigstrat
reported in its annual report . . . that it had ‘no significant reliance on a single supplier whose loss
would affect the company’s business.’ Thus, while it is possible in theory for a government
supplier to place restrictions on an industry that influence pricing and production, the above
statement supports the Department’s determination that . . . [the Romanian government] did not
significantly impact Sigstrat’s operations.”). In other words, since Sigstrat was not restricted to
buying its wood from primarily a single source, there was no evidence that the purchases were not
market-based.
Consol. Ct. No. 16-00145 Page 40
In addition, Commerce reasonably found that the Sigstrat financial statement did not give
it “reason to believe or suspect” that the company had received a specific countervailable subsidy.
While Sigstrat’s financial statement does contain a line item titled “Investment Subsidy,” there is
no additional information on the record as to the specific nature of this line item or where it comes
from (e.g., whether the “subsidy” is conferred under a government program). Moreover, the
Department stated that it has “never found any subsidy programs in Romania to be countervailable,
and none have even been alleged to be countervailable in a petition,” which reasonably gave
Commerce even less “reason to believe or suspect” that Sigstrat was in receipt of a countervailable
subsidy. Final IDM at 14; see also Clearon Corp. v. United States, 35 CIT 1685, 1688, 800 F.
Supp. 2d 1355, 1359 (2011) (citation omitted) (“If a financial statement contains only a mere
mention that a subsidy was received, and for which there is no additional information as to the
specific nature of the subsidy, Commerce will not exclude the financial statement from
consideration.”); Catfish Farmers of Am. v. United States, 33 CIT 1258, 1275-76, 641 F. Supp. 2d
1362, 1379-80 (2009) (sustaining Commerce’s determination that the “reason to believe or
suspect” standard was not satisfied although the selected financial statement mentioning “subsidy”
was received because there was no additional substantiating evidence of countervailability).
Not all subsidies are countervailable subsidies. See Almond Bros. Lumber Co. v. United
States, 721 F.3d 1320, 1323 n.2 (Fed. Cir. 2013) (“We note that not all subsidies are
countervailable under U.S. trade laws.”); see also, e.g., Allegheny Ludlum Corp. v. United States,
24 CIT 452, 112 F. Supp. 2d 1141 (2000) (finding that Commerce reasonably determined that
loans made to the Belgian steel industry by a public credit institution were not specific, and thus,
not countervailable); PPG Indus., Inc. v United States, 978 F.2d 1232 (Fed. Cir. 1992) (finding
that substantial evidence supported the Commerce’s determination that a trust fund program
Consol. Ct. No. 16-00145 Page 41
established by the Mexican government and Bank of Mexico assisting all Mexican firms with
foreign indebtedness did not provide benefits to specific industry and therefore was not
countervailable). As a general rule, a subsidy is countervailable if a government provides a
financial contribution, a benefit is conferred, and the subsidy is specific. 27 See 19 U.S.C.
§ 1677(5). Thus, the mention of a subsidy in a financial statement does not necessarily give
Commerce a reason to believe or suspect that the subsidy is countervailable. Accordingly, the court
finds that Commerce reasonably found that it did not have “reason to believe or suspect” that
Sigstrat was receiving countervailable subsidies.
In light of evidence directly contradicting plaintiff’s theories, and an adequate explanation
for Commerce’s preference, the court finds that Commerce’s decision to use the Sigstrat financial
statement is reasonable, and supported by substantial evidence on the record. See Goldlink Indus.
Co., 30 CIT at 628-29, 431 F. Supp. 2d at 1334-35.
Finally, despite plaintiff’s arguments to the contrary, Commerce’s use of the single
Romanian financial statement is reasonable. As an initial matter, before Commerce, Fine Furniture
did not argue that using multiple financial statements would necessarily lead to more accurate
results. See Fine Furniture Case Br. at 28. Rather, it argued that “there is no basis to conclude that
the distorted financial statement of Sigstrat provides superior data, especially when the Department
itself recognizes the usability of two financial statements from Thailand.” Fine Furniture Case Br.
at 14 (emphasis in original). In other words, Fine Furniture argued that Romania had no usable
financial statements, whereas Thailand had two usable financial statements. Fine Furniture did not
mention anything, however, about multiple financial statements resulting in more accurate
27
Whether a subsidy is “specific” depends on the type of subsidy, i.e., whether it is
an “export subsidy,” an “import substitution subsidy,” or a “domestic subsidy,” all of which must
meet specific statutory requirements before being deemed “specific.” See 19 U.S.C. § 1677(5A).
Consol. Ct. No. 16-00145 Page 42
surrogate values. Therefore, plaintiff’s argument regarding the greater accuracy of multiple
financial statements is not properly before the court. See Gerber Food, 33 CIT at 194, 601 F. Supp.
2d at 1378.
Even if this argument were before the court, however, it would not carry the day. As shall
be seen, given the totality of factors supporting Romania’s selection as the primary surrogate
country, Commerce’s decision to use the Sigstrat financial statement was reasonable considering
its reasonable preference to value all factors from a single country. See Clearon Corp., 37 CIT at
__, Slip Op. 13-22 at 13 (“[T]he use of a ‘single surrogate country’ is justified when . . . all other
factors are ‘fairly equal’ because minimizing distortion supports a finding that Commerce relied
upon the best available information on the record.”); Jacobi Carbons AB v. United States, 38 CIT
__, __, 992 F. Supp. 2d 1360, 1376-77 (2014) (“This preference [(i.e., to value all factors of
production with a single surrogate country)] stems from the sensible conclusion that ‘deriving the
surrogate data from one surrogate country limits the amount of distortion introduced into [the
Department’s] calculations because a domestic producer would be more likely to purchase a
product available’ domestically.” (quoting Clearon Corp., 37 CIT at __, Slip Op. 13-22 at 13));
see also Certain Frozen Warmwater Shrimp From the Socialist Rep. of Vietnam, 76 Fed. Reg.
56,158 (Dep’t Commerce Aug. 31, 2011), and accompanying Issues and Dec. Mem., cmt. 2 ¶ J
(noting the Department’s practice “to rely upon the primary surrogate country for all surrogate
values whenever possible”). Here, unlike in Jiaxing Brother, where the single financial statement
selected by Commerce had also been rejected in a contemporaneous proceeding, none of the three
financial statements at issue had been previously rejected, and all were deemed usable. Thus,
unless the record contained evidence that the Sigstrat financial statement was unusable, which it
did not, Commerce acted in a manner consistent with its own practice by selecting the financial
Consol. Ct. No. 16-00145 Page 43
statement from the primary surrogate country, notwithstanding the fact that there were two
financial statements from an alternative country (i.e., Thailand).
III. Commerce’s Selection of Face Veneer Surrogate Values Is Supported by Substantial
Evidence and in Accordance with Law
Although, as discussed above, the court finds that Romanian data, including Romanian
HTS subheadings for face veneer inputs, supports Commerce’s selection of Romania as the
primary surrogate country, plaintiff argues that “[i]f the Court sustains Commerce’s use of
Romania as the primary surrogate country, despite superior data from Thailand, the Court should
overturn Commerce’s selection of face veneer [surrogate values] as unsupported by substantial
evidence and contrary to law.” Fine Furniture Br. 42.
A. Commerce’s Selection and Calculation of Face Veneer Surrogate Values Properly
Included End-Jointed Veneers
In its questionnaire response, Fine Furniture said it used face veneers from several different
species, but did not indicate that it purchased end-jointed veneers. Plaintiff argues that
Commerce’s selection of Romanian face veneer surrogate values improperly included end-jointed
veneers. See Fine Furniture Br. 42-43. In the Final Results, in order to value Fine Furniture’s face
veneers, Commerce first selected HTS subheadings within Romania’s three main species
categories for face veneers (i.e., “coniferous,” “tropical,” and “other”) relating to both (1) “Planed;
sanded; end-jointed, whether or not planed or sanded” face veneers (i.e., 4408.1015, 4408.3955,
and 4408.9015); and (2) “Other” face veneers (i.e., 4408.1098, 4408.3995, 4408.9095). See Final
IDM at 22. Commerce then took a simple average of imports into Romania 28 under both the
28
Commerce used the average unit values from Romanian Global Trade Atlas import
data to come up with this figure. See Final IDM at 23.
Consol. Ct. No. 16-00145 Page 44
“Planed; sanded; end-jointed, whether or not planed or sanded” HTS subheadings and the “Other”
HTS subheadings. 29 Final IDM at 23.
Fine Furniture argues that Commerce’s subheading selection “improperly included imports
of face veneers that are ‘end-jointed,’ which is not representative of Fine Furniture’s face veneer
inputs.” Fine Furniture Br. 42-43 (“The requirement that Commerce use the best available
information mandates selecting the most specific product to calculate the [surrogate values] and
thus, precludes HTS [subheadings] that represent end-jointed veneers.”).
In making its argument, plaintiff insists that under the Romanian subheadings Commerce
selected, planing or sanding is optional, but end-jointing is a requirement. Fine Furniture Br. 43
(“[T]he final descriptive element in the face veneer HTS [subheading] ‘Planed; sanded; end-
jointed, whether or not planed or sanded,’ indicates that end-jointed sheets for veneering are
explicitly included.”). That is, plaintiff argues that the “whether or not planed or sanded” language
makes the first two descriptions (“planed; sanded”) optional, but the “end-jointed” characteristic
remains the “one and only mandatory characteristic.” Fine Furniture Br. 43. Therefore, plaintiff
argues that because its veneer inputs are not end-jointed, “Commerce’s determination cannot be
upheld as supported by substantial evidence and must be remanded to Commerce to remove the
end-jointed HTS [subheadings] from the veneer [surrogate value] calculations.” Fine Furniture Br.
43-44. Plaintiff then claims that the Thai HTS subheadings are more specific. 30
29
As mentioned above, these subheadings varied depending on the face veneer input
species (i.e., coniferous, tropical, or other) and thus, the two HTS subheadings that Commerce
averaged were either 4408.1015 and 4408.1098 (for “coniferous”), 4408.3955 and 4408.3995 (for
“tropical”), or 4408.9015 and 4408.9095 (for “other”). See Final IDM at 23.
30
Plaintiff preferred the following Thai HTS subheadings for the various wood
species:
4408 Sheets for veneering (including those obtained by slicing laminated wood),
Consol. Ct. No. 16-00145 Page 45
The court finds that the Romanian HTS data that Commerce selected to calculate the
surrogate value for Fine Furniture’s face veneers is supported by substantial evidence.
Commerce’s reading of the descriptive clause (“Planed; sanded; end-jointed, whether or not planed
or sanded”) is correct. See Final IDM at 23 (“We find that ‘whether planed or sanded’ refers only
to ‘end-jointed’ because of the separation with a comma and not a semi-colon.”). That is, although
the Romanian HTS subheading includes end-jointed veneers, it also includes planed or sanded face
veneers of the types used by the Fine Furniture in its production process, and the court does not
read this description as making end-jointed veneers a “mandatory” characteristic because, as noted
by Commerce, the description is separated by a comma rather than a semicolon. Indeed, plaintiff’s
reading of the HTS subheading would render superfluous the need to describe the first two
characteristics (“planed; sanded”). 31 Accordingly, Commerce’s selection of the HTS subheading
for plywood or for similar laminated wood and other wood, sawn lengthwise, sliced
or peeled, whether or not planed, sanded, spliced or end-jointed, of a thickness not
exceeding 6 mm:
4408 10 – Coniferous:
4408.10.10.000 - - Cedar wood stats of a kind used for pencil manufactur[e], radiate
pinewood of a kind used for blockboard manufacture
4408.10.30.000 - - Face Veneer Sheets
4408.10.90.000 – Other
4408.31 – Of tropical wood specified in subheading note 2 to this chapter:
440831.00.000 - - Dark Meranti, Light Red Meranti and Meranti Bakau
4408.39 - - Other
4408.39.10.000 - - - Jelutong wood slats of a kin[d] used for pencil manufacture
4408.39.90.000 - - - Other
4408 90 – Other:
4408.90.00.010 - - Teak Veneer
4408.90.00.090 - - Other
Fine Furniture Case Br. 23 (citation omitted).
31
Thus, as noted in the Final Results, the subheading could include any of the
Consol. Ct. No. 16-00145 Page 46
to value Fine Furniture’s face veneers is sustained.
B. Commerce Properly Used a Simple Average When Calculating Fine Furniture’s Face
Veneer Surrogate Values
Plaintiff next argues that “[i]f the Court sustains Commerce’s use of the end-jointed
veneers . . . , the Court should overturn Commerce’s use of a simple average to calculate Fine
Furniture’s face veneer [surrogate values].” Fine Furniture Br. 44. For plaintiff, Commerce should
not have used a simple average of the import data from the two HTS subheadings,32 but should
have used a weighted average of the two categories. Fine Furniture Br. 46 (“Taking a weighted
average based on the import data quantities will more accurately estimate the true commercial
reality in Romania for these imports.”). Plaintiff attempts to support its position by noting that
Commerce has used the weight-averaging method in “numerous past determinations” under
similar circumstances. Fine Furniture Br. 44 (citing Xanthan Gum from the People’s Rep. of China,
80 Fed. Reg. 29,615 (Dep’t Commerce May 22, 2015)). Moreover, plaintiff claims that a weighted
average would limit the “distortive effect of including . . . a high-cost input that Fine Furniture did
not consume.” Fine Furniture Br. 5; see also Fine Furniture Reply Br. 22 (“[B]y using a simple
average, the Department is giving equal importance to each specific tariff classification, which
accords disproportionately higher weight to the data under the HTS heading reporting a lesser
following veneer types:
(1) only planed; (2) only sanded; (3) both planed and sanded; (4) only end-jointed;
(5) both planed and end-jointed; (6) both sanded and end-jointed; and finally,
(7) planed, sanded, and end-jointed.
Final IDM at 22-23.
32
That is, depending on input species, a simple average of the Romanian Global Trade
Atlas import data for the relevant “Planed; sanded; end-jointed, whether or not planed or sanded”
category (either 4408.1015, 4408.3955, or 4408.9015) and the corresponding “Other” category
(either 4408.1098, 4408.3995, or 4408.9095).
Consol. Ct. No. 16-00145 Page 47
quantity of imports.”). Accordingly, plaintiff asks the court to remand to Commerce with
instructions to “use a weighted average of data reported under the two relevant HTS codes” to
calculate Fine Furniture’s face veneer surrogate values. Fine Furniture Br. 46.
Commerce’s application of a simple average to calculate the surrogate value for Fine
Furniture’s face veneers is in accordance with law and supported by substantial evidence.
Commerce is “required to ‘articulate in what way the surrogate value chosen relates to the factor
input.’” Gleason Indus. Prods., Inc. v. United States, 32 CIT 382, 388, 559 F. Supp. 2d 1364, 1369
(2008) (quoting Dorbest, 30 CIT at 1725, 462 F. Supp. 2d at 1308). Here, plaintiff does not argue
that a weighted average would better represent Fine Furniture’s actual use of particular veneers.
Rather, plaintiff would have Commerce use a method that would more closely approximate the
“actual commercial sales happening in Romania.” Fine Furniture Reply Br. 21. As Commerce
stated, however, the “quantities used in calculation of the [average unit values] based on the
Romanian import statistics have no relation to Fine Furniture’s own consumption,” and therefore
a “weight-averaged [Global Trade Atlas]-based [surrogate value] is not a match to Fine Furniture’s
purchasing experience.” Final IDM at 23 & n.64. Thus, without any evidence tending to support
the argument that Fine Furniture’s purchasing history is similar to the import data on the record
for Romania, Commerce reasonably determined that a simple average was the better calculation
method because “the record does not inform [it] where Fine Furniture’s inputs precisely fit” within
the two selected HTS subheadings. Final IDM at 23.
IV. Commerce’s Separate Rate Method Is Supported by Substantial Evidence and in
Accordance with Law
Finally, Old Master argues that Commerce’s determination of the assessment rate for
Consol. Ct. No. 16-00145 Page 48
unexamined separate rate respondents 33 is both unlawful and unsupported by substantial evidence
because Commerce assigned “an assessment rate three to five times the deposit rate without any
evidence that the dumping of that material had grown more severe.” Old Master Br. 5. According
to Old Master, Commerce’s use of the method set out in 19 U.S.C. § 1673d(c)(5) (which is
normally used to determine the all-others rate in market economy investigations) was “plainly
unreasonable here” because the “result reflected not an average result, but analysis of a single
company,” Fine Furniture, “whose 17.37% result was assigned to all [unexamined separate rate
companies].” Old Master Br. 6. As such, Old Master claims that there was no representative sample
of exporter pricing behavior, and that Commerce “could have dealt with [the unexamined separate
rate respondents] by other reasonable means.” Old Master Br. 6 (citations omitted). Ultimately,
Old Master contends that Commerce’s determination “announced an assessment rate that was not
‘logically connected’ to the ‘commercial reality’ of the [separate rate] companies.” Old Master
Br. 6.
The court finds that Commerce’s assignment of the 17.37 percent margin calculated for
Fine Furniture to the unexamined separate rate respondents was both lawful and supported by
substantial evidence. Subsection 1673d(c)(5) provides that “the estimated all-others rate shall be
an amount 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 . . . .” 19 U.S.C. § 1673d(c)(5)(A). Here, Commerce followed its statutorily
directed approach to assigning separate rates in nonmarket economy reviews by calculating the
33
Old Master’s brief actually refers to the Department’s assignment of an assessment
rate to “Section A material.” Based on the context of Old Master’s arguments, as well as its
administrative case brief, the court considers these arguments to be challenging the Department’s
separate rate method.
Consol. Ct. No. 16-00145 Page 49
separate rate using the “all-others” method from § 1673d(c)(5). See Albemarle Corp. v. United
States, 821 F.3d 1345, 1351 (Fed. Cir. 2016) (citation omitted) (“Under the statute, Commerce
normally calculates the separate rate by averaging the ‘dumping margins established for exporters
and producers individually investigated, excluding any zero and de minimis margins.”); see also
id. at 1352 (“[T]he statutory framework contemplates that Commerce will employ the same
methods for calculating a separate rate in periodic administrative reviews as it does in initial
investigations.” (citing 19 U.S.C. § 1675(a)); see also Mid Continent Steel & Wire, Inc. v. United
States, 42 CIT __, __, Slip Op. 18-73 at 10 (June 19, 2018). Applying that framework, Commerce’s
separate rate of 17.37 percent was reasonable because it was the only rate calculated for an
individually investigated respondent (Fine Furniture) that was not zero, de minimis, or based
entirely on facts available, and generally, mandatory respondents are “representative [of the
market] at the very least in terms of aggregate volume.” Albemarle, 821 F.3d at 1353; see also
Nat’l Knitwear & Sportswear Ass’n v. United States, 15 CIT 548, 559, 779 F. Supp. 1364, 1373
(1991) (citation omitted) (“The representativeness of the investigated exporters is the essential
characteristic that justifies an ‘all others’ rate based on a weighted average for such respondents.”).
Therefore, Commerce followed the statute, which, it is worth noting, leaves little room for
discretion.
Furthermore, although the assessment rate for Old Master’s entries exceeds the amounts
deposited as estimated duties, cash deposits are estimates derived from a different time period
(here, the period of investigation), whereas Commerce’s assessment rate reflects actual duty
liabilities based on the examination of contemporaneous pricing data for the mandatory
respondents. See 19 C.F.R. § 351.212(a); see also Nan Ya Plastics Corp. v. United States, 810 F.3d
1333, 1343 (Fed. Cir. 2016) (citation omitted) (finding that although commercial reality is a
Consol. Ct. No. 16-00145 Page 50
“reliable guidepost[] for Commerce’s determinations,” that term “must be considered against what
the antidumping statutory scheme demands.”). It is difficult to see how following the statute and
using a result derived from contemporaneous information could be found unreasonable.
CONCLUSION
For the foregoing reasons, the court sustains Commerce’s Final Results. Judgment shall be
entered accordingly.
/s/ Richard K. Eaton
Richard K. Eaton, Judge
Dated: /PWFNCFS



New York, New York