Foshan Nanhai Jiujiang Quan Li Spring Hardware Factory v. United States

920 F. Supp. 2d 1350, 2013 CIT 86, 2013 WL 3306410, 35 I.T.R.D. (BNA) 1724, 2013 Ct. Intl. Trade LEXIS 87
CourtUnited States Court of International Trade
DecidedJuly 1, 2013
DocketSlip Op. 13-86; Court 12-00025
StatusPublished
Cited by4 cases

This text of 920 F. Supp. 2d 1350 (Foshan Nanhai Jiujiang Quan Li Spring Hardware Factory 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
Foshan Nanhai Jiujiang Quan Li Spring Hardware Factory v. United States, 920 F. Supp. 2d 1350, 2013 CIT 86, 2013 WL 3306410, 35 I.T.R.D. (BNA) 1724, 2013 Ct. Intl. Trade LEXIS 87 (cit 2013).

Opinion

OPINION AND ORDER

CARMAN, Judge:

Plaintiffs Foshan Nanhai Jiujiang Quan Li Spring Hardware Factory and Foshan Yongnuo Import & Export Co., Ltd. (collectively, “Plaintiffs” or “the Foshan companies”) are producers of uncovered innerspring units from the People’s Republic of China which are subject to antidumping duties. Plaintiffs requested that the Department of Commerce (“Commerce” or “the government”) conduct a new shipper review under section 751(a)(2)(B) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675(a), and under 19 C.F.R. § 351.214(c). New Shipper Review Request, Pis.’ App’x Tab 1, CR 275, PR 276. 1 At the conclusion of the administrative proceedings, Commerce determined that Plaintiffs’ relevant sale of goods was not a bona fide commercial transaction and rescinded the new shipper review. Uncovered Innerspring Units From the People’s Republic of China: Rescission of Anti-dumping Duty New Shipper Review, 76 Fed.Reg. 80,337 (Dec. 23, 2011) (“Final Results”) and accompanying Issues and Decision Memorandum (Pis.’ App’x Tab 15, PR INT_046327 (“I & D Memo”)). Plaintiffs bring this suit under 28 U.S.C. § 1581(c) to challenge the Final Results, and have moved for judgment on the agency record pursuant to USCIT Rule 56.2. After considering the administrative record and the arguments of the parties, the Court concludes that Commerce based its determination on substantial evidence in the record and did not act contrary to law or in an arbitrary and capricious manner. The Final Results will therefore be upheld and Plaintiffs’ motion will be denied. Judgement will issue for Defendant.

Background

Under certain circumstances, Commerce imposes antidumping duty orders (“ADD orders”) on goods found to be imported into the United States at less than fair value. The duty imposed is designed to remedy unfair trade and level the economic playing field, rather than punish the dumping exporter. In setting the rate of the duties, Commerce generally establishes company-specific rates for exporters Commerce has been able to individually investigate, and establishes an estimated “all-others” rate which is applied to shipments originating with other exporters. The “all-others” rate is typically much higher than the rates imposed on individually-investigated companies. If a producer or exporter of subject merchandise did not export its goods to the United States during the period of investigation leading to the ADD order, and is not affiliated with a company that did so, the company that now exports subject merchandise to the United States may request that Commerce conduct a “new shipper review” to establish a company-specific individual ADD rate for its exports. Pursuant to statute and regulation, Commerce will investigate the details of the company’s shipments to *1353 the United States. If Commerce determines from its investigation that the company’s United States sales are not bona fide market transactions, Commerce will rescind the new shipper review and the “all-others” ADD rate will apply to the company’s shipments to the U.S.

I. Plaintiffs Request and Receive a New Shipper Review

The ADD order was published in 2009. Uncovered Innerspring Units from the People’s Republic of China: Notice of Antidumping Duty Order, 74 Fed.Reg. 7,661 (Feb. 19, 2009). Approximately one year later, the Foshan companies sold a shipment of subject merchandise to an unaffiliated U.S. importer. Pis.’ App’x Tab 8, CR 395 at 3 (“Preliminary Bona Fides Memo”). On August 20, 2010, Plaintiffs requested, and Commerce initiated, this new shipper review based on the sale. See Uncovered Innerspring Units From the People’s Republic of China: Initiation of Antidumping Duty New Shipper Review, 75 Fed.Reg. 62,107 (Oct. 7, 2010) (“Initiation Notice”).

After initiation, the Foshan companies timely responded to several questionnaires from Commerce. Mem. of Law in Supp. of Pis.’ Mot. for J. on the Agency R. under USCIT R. 56.2 (“Pis.’ Mem.”) at 3. The deadline imposed by 19 C.F.R. § 351.301(b)(4) for submitting new factual information into the record passed on January 18, 2011. Id. Thereafter, Commerce issued several supplemental questionnaires, and the Foshan companies responded without Commerce indicating any deficiencies in those responses. Id. Plaintiffs provided information in these responses about the U.S. importer that purchased the sale forming the basis of. the new shipper review, and Commerce used this information to examine the characteristics of the sale to determine whether it was a commercially reasonable transaction likely to be representative of Plaintiffs’ future exports to the U.S. Def.’s Resp. to Pis.’ Mot. for J. upon the Agency R. (“Def.’s Opp.”) at 3.

II. Commerce Rescinds the New Shipper Review

On August 4, 2011, the Department of Commerce published its preliminary determination to rescind the new shipper review because it found that the Foshan companies’ U.S. sale was not a bona fide transaction. Uncovered Innerspring Units From the People’s Republic of China: Preliminary Intent To Rescind New Shipper Review, 76 Fed.Reg. 47,151 (Aug. 4, 2011) (“Preliminary Results”). In determining whether a company’s sales are bona fide, Commerce weighs “the totality of circumstances,” including “such factors as (a) [t]he timing of the sale, (b) the price and quantity, (c) the expenses arising from the transaction, (d) whether the goods were resold at a profit, and (e) whether the transaction was made on an arm’s length basis.” Id. at 47,152.

A. Preliminary Results

Commerce obtained data about sale of subject merchandise from U.S. Customs and Border Protection (“CBP data”) for comparison when analyzing the commercial reasonableness of the Foshan companies’ sale. Preliminary Bona Fides Memo at 4. Examining that data, Commerce determined that the quantity and price of U.S. sales during the period of review (“POR”) were not normal and therefore “would not provide an adequate basis for comparison.” Id. Consequently, Commerce chose to base its bona fides analysis *1354 on a comparison of Plaintiffs’ “third-country sales data, as well as post-POR CBP data.” Id. at 5.

Commerce’s comparison showed that Plaintiffs’ sale was of a quantity “88% smaller than [Plaintiffs’] average third-country sale” and smaller than any other single sale. Id. at 6. Plaintiffs’ sale quantity was also “147% smaller than the average post-POR sale” in the CBP data. Id.

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920 F. Supp. 2d 1350, 2013 CIT 86, 2013 WL 3306410, 35 I.T.R.D. (BNA) 1724, 2013 Ct. Intl. Trade LEXIS 87, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foshan-nanhai-jiujiang-quan-li-spring-hardware-factory-v-united-states-cit-2013.