Dorbest Ltd. v. United States

755 F. Supp. 2d 1291, 33 I.T.R.D. (BNA) 1137, 2011 Ct. Intl. Trade LEXIS 15, 2011 WL 565617
CourtUnited States Court of International Trade
DecidedFebruary 9, 2011
DocketConsol. 05-00003
StatusPublished
Cited by11 cases

This text of 755 F. Supp. 2d 1291 (Dorbest Ltd. v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dorbest Ltd. v. United States, 755 F. Supp. 2d 1291, 33 I.T.R.D. (BNA) 1137, 2011 Ct. Intl. Trade LEXIS 15, 2011 WL 565617 (cit 2011).

Opinion

OPINION AND ORDER

POGUE, Chief Judge.

In prior proceedings in this matter, the Court of Appeals for the Federal Circuit (“CAFC”) held that when calculating surrogate labor rates for the valuation of goods from a nonmarket economy (“NME”), the Department of Commerce (“Commerce”) must use data from countries that are both economically comparable to the NME and significant producers of comparable merchandise. Dorbest Ltd. v. United States, 604 F.3d 1363, 1372-73 (Fed.Cir.2010)(“Dorbest IV”). Dorbest IV thus required Commerce to redetermine, on remand, the labor rate applicable here. See Final Results of Redetermination Pursuant to Remand, Dorbest Ltd. v. United States, (Nov. 10, 2010)(“Remand Results”).

In its remand determination, choosing data from the record, Commerce calculated a labor wage rate by averaging industry-specific earnings and/or wages from three countries — India, Indonesia and Pakistan — that it found to be both economically comparable to China and significant producers of wooden bedroom furniture. Based on these calculations, Commerce identified an average wage rate of 0.23 USD/hour and found that using that average wage rate as a surrogate for the cost of labor in the production of Plaintiff/Respondent Dorbest’s merchandise, Dorbest has a de minimis dumping margin. Remand Results at 17, 42.

Plaintifi/Petitioner American Furniture Manufacturers Committee for Legal Trade (“AFMC”) now seeks review of Commerce’s data choices in that redetermination on remand. 1 AFMC challenges four of Commerce’s specific choices: 1) Commerce’s initial selection of two “bookend” countries — the Philippines and Pakistan— to limit its consideration of countries with economies comparable to China, the NME at issue; 2) Commerce’s exclusion of data not available during the original investiga *1294 tion; 3) Commerce’s use of wage rate data from India alleged to be “capped” or limited to wages of workers making 1600 Rupees (“Rs.”) per month or less; and 4) Commerce’s calculation of an average surrogate wage rate using only countries for which industry-specific data was available.

After a brief review of the relevant procedural history, the agency’s methodology, and the applicable standard of review, the court will explain why it concludes that, given the record as a whole, the first of Commerce’s choices must be remanded but the other three data choices were reasonable and therefore must be sustained.

BACKGROUND

Procedural history

This matter arises from Commerce’s investigation of whether wooden bedroom furniture from China was being dumped in the United States domestic market during the time period between April 1, 2003 and September 30, 2003. Wooden Bedroom Furniture from the People’s Republic of China, 68 Fed.Reg. 70,228 (Dep’t Commerce Dec. 17, 2003)(Notiee of Initiation of Antidumping Investigation). Commerce’s final determination in the original investigation was subsequently challenged and remanded three times before it was appealed to the CAFC.

In Dorbest IV, the CAFC invalidated Commerce’s wage rate calculation regulation. 2 This court then remanded for further proceedings in accordance with the CAFC decision. Specifically, as noted above, the CAFC held that, contrary to Commerce’s regulation, the governing statute, 19 U.S.C. § 1677b(c)(4), 3 requires that when calculating surrogate labor wage rates, Commerce shall “to the extent possible,” use factors of production from market economies that are both economically comparable to the non-market economy country and significant producers of the subject merchandise. Dorbest IV, 604 F.3d at 1372 (citing 19 U.S.C. § 1677b(c)(4)(A)).

After Dorbest IV, Commerce acknowledged that the data on the record was insufficient to comply with the court’s remand order and re-opened the administrative record to admit new wage data. Request for Comment Regarding Wage Rate Data, A-570-890, Remand Redetermination Investigation (“RRI”) 4/1/03 — 9/30/03 (Aug. 11, 2010), Remand Admin. R. Pub. Doc. 1. Commerce also invited interested parties to submit comments and new factual information with regards to the sole issue of labor wage valuation. Id. at 2. AFMC and Dorbest each submitted comments and wage rate data for Commerce’s consideration.

Methodology

Selecting from the record data, Commerce, in its remand determination, specified five steps for calculating labor wage rates (“the 5-step methodology”). 4

*1295 First, Commerce created a list of economically comparable surrogate countries based on gross national income (“GNI”). 5 In doing so, Commerce relied on its original surrogate country memorandum, 6 which provided five economically comparable countries for consideration as the primary surrogate country for this investigation. 7 Remand Results at 12; Surrogate country memorandum. The countries on the list in the surrogate country memorandum are India, Pakistan, Indonesia, Sri Lanka and the Philippines. Remand Results at 12. Using, as “bookends,” the high and low-income countries from that list, i.e., the Philippines and Pakistan, Commerce then added all countries with World-Bank reported per capita GNIs that fell within the “bookend” range. Remand Results at 12-13. This resulted in a list of 24 countries.

Second, Commerce proceeded to identify which of the 24 listed countries had exports of comparable merchandise between 2001 and 2003. Remand Results at 12. At this step, Commerce identified 13 countries from the list that were both economically comparable to China and significant producers of comparable merchandise.

Third, Commerce identified which of the 13 countries reported wage data between 1997 and 2002. Remand Results at 13. In doing so, Commerce relied on the International Labor Organization (“ILO”) wage data from the base year and five years prior. See AFMC Br. at 8. After applying this step, six countries remained.

Commerce then added a fourth step to its methodology: It identified which countries reported an industry-specific classification within the ILO wage rate data. Remand Results at 13-14. In doing so, Commerce looked to data that was reported according to the International Standard Industrial Classification of all Economic Activities (“ISIC”) code. 8 Remand Results at 14.

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755 F. Supp. 2d 1291, 33 I.T.R.D. (BNA) 1137, 2011 Ct. Intl. Trade LEXIS 15, 2011 WL 565617, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dorbest-ltd-v-united-states-cit-2011.