Huzhou Muyun Wood Co. v. United States

2017 CIT 162
CourtUnited States Court of International Trade
DecidedDecember 11, 2017
Docket16-00245
StatusPublished

This text of 2017 CIT 162 (Huzhou Muyun Wood Co. 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
Huzhou Muyun Wood Co. v. United States, 2017 CIT 162 (cit 2017).

Opinion

Slip Op. 17-

UNITED STATES COURT OF INTERNATIONAL TRADE

HUZHOU MUYUN WOOD CO., LTD., Before: Gary S. Katzmann, Judge Plaintiff, Court No. 16-00245 v. PUBLIC VERSION UNITED STATES,

Defendant.

OPINION

[Commerce’s Final Results are remanded and plaintiff’s motion for judgment on the agency record is granted in part.]

Dated:'HFHPEHU

Gregory S. Menegaz and Alexandra H. Salzman, deKieffer & Horgan PLLC, of Washington, DC, argued for plaintiff. With them on the brief was J. Kevin Horgan. With them on the reply brief were Judith L. Holdsworth.

Tara K. Hogan, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, 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 the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce of Washington, DC.

Katzmann, Judge: The Trade Facilitation and Trade Enforcement Act of 2015 (“EAPA”),

Pub. L. No. 114-125, 130 Stat. 122 (2016), which was signed into law on February 24, 2016, made

numerous amendments to the antidumping and countervailing duty laws found under Title 19 of

the United States Code. 1 Relevant here, the EAPA codified the totality of the circumstances test

1 For the purposes of clarification, and lest there be any confusion, the court notes that EAPA is not the same as the Trade Preferences Extension Act of 2015 (“TPEA”), which also made Court No. 16-00245 Page 2 PUBLIC VERSION

used by the United States Department of Commerce (“Commerce”) to determine whether a

transaction is bona fide for the purposes of a new shipper review, whereby a shipper seeks

exemption from duty liability which would be imposed under an antidumping order and seeks an

individual antidumping rate. This case raises questions of procedural fairness and substantiality

of record evidence related to the application of that test.

Plaintiff Huzhou Muyun Wood Co., Ltd. (“Muyun Wood”), a Chinese exporter and

producer of multilayered wood flooring, contests Commerce’s rescission of its new shipper review

related to the antidumping duty order on multilayered wood flooring from the People’s Republic

of China (“PRC”). Muyun Wood New Shipper Review Request (“NSR Request”) at Ex. 1, C.R.

3 (June 22, 2015). Specifically, Muyun Wood contends that Commerce abused its discretion by

placing data on the record a week before comments were due without clarifying its intended use.

Further, Muyun Wood argues Commerce’s determination that Muyun Wood’s sale was not bona

fide -- and thus that the new shipper review should be rescinded -- was not supported by substantial

record evidence. The United States (“The Government”) contends that Commerce did not abuse

its discretion and that its conclusions were supported by substantial evidence.

The court concludes that Commerce abused its discretion by adding the data to the record

in the manner it did. Further, Commerce’s conclusion that Muyun Wood’s sale was not bona fide

and its rescission of Muyun Wood’s new shipper review were not supported by substantial

evidence. The court thus remands this case to Commerce.

amendments to the antidumping and countervailing duty laws. See Ozdemir Boru San, Ve Tlc, Ltd. Sti. v. United States, 2017 WL 4651903, ___ F. Supp. 3d ___ (CIT 2017). Court No. 16-00245 Page 3 PUBLIC VERSION

BACKGROUND

I. Anti-Dumping Orders and New Shipper Reviews Generally

Dumping occurs when a foreign company sells a product in the United States for less than

fair value -- that is, for a lower price than it sells that product in its home market. Sioux Honey

Ass’n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1046 (Fed. Cir. 2012). Because such behavior can

undercut American producers selling those goods at market price, Congress enacted the Tariff Act

of 1930 2 to give Commerce a framework for detecting dumping and calculating a duty rate that

offsets the dumping. Id. Either domestic producers or Commerce may initiate an investigation

into potential dumping and, if appropriate, Commerce will issue an anti-dumping order which

contains the duty rates for the relevant products. Id.; 19 U.S.C. §§ 1671, 1673. If a producer or

exporter did not export merchandise subject to an antidumping order during the period of

investigation, it may request a new shipper review. 19 U.S.C. § 1675(a)(2)(B). Commerce will

conduct company-specific reviews of new exporters and producers that submit properly

documented requests for review. Id. The “purpose of a new shipper review is to provide an

opportunity to an exporter or producer who may be entitled to an individual antidumping rate, but

was not active during the period of investigation, to be considered for such a rate.” See Marvin

Furniture (Shanghai) v. United States, 36 CIT ___, ___, 867 F. Supp. 2d 1302, 1307 (2012). The

provisions regarding new shipper reviews were enacted as part of the Uruguay Round Agreements

Act (“URAA”) to address concerns that shippers who did not export merchandise subject to an

2 Further citations to the Tariff Act of 1930, as amended, are to the relevant provision of Title 19 of the U.S. Code, 2012 edition. Citations to 19 U.S.C. § 1675, however, are not to the U.S. Code 2012 edition, but to the unofficial U.S. Code Annotated 2017 edition. The current U.S.C.A. reflects the amendments made to 19 U.S.C. § 1675 (2012) by the Trade Facilitation and Trade Enforcement Act of 2015 (“EAPA”), Pub. L. No. 114-125, § 433, 130 Stat. 122, 171–72 (2016), which are integral to this case. Court No. 16-00245 Page 4 PUBLIC VERSION

antidumping duty order were being deprived of an opportunity to have their dumping margins

calculated individually. “During the negotiations, there was an attempt to exempt new shippers

from duty liability by requiring an entirely new antidumping investigation along with a separate

finding of injury for each new shipper.” URAA, Statement of Administrative Action, H.R. Doc.

No. 103-316, vol.1 at 875 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4203 (“SAA”). 3 Instead,

“[t]he United States agreed to a more reasonable proposal . . . to provide new shippers with an

expedited review that will establish individual dumping margins for such firms on the basis of

their own sales,” and accordingly created new shipper reviews. Id.

Commerce determines the normal value, export price, and resultant dumping margin for

each entry of subject merchandise to determine a company’s individual rate. 19 U.S.C.

§1675(a)(2)(B)(i)–(ii). However, “any weighted average dumping margin . . . shall be based solely

on the bona fide sales of an exporter or producer” to the United States. 19 U.S.C.

§1675(a)(2)(B)(iv). The factors that Commerce has historically used to determine whether a sale

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