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Lifestyle Enterprise, Inc. v. United States

United States Court of Appeals, Federal Circuit

June 2, 2014

LIFESTYLE ENTERPRISE, INC., Plaintiff, AND TRADE MASTERS OF TEXAS, INC., EMERALD HOME FURNISHINGS, LLC, AND RONS WAREHOUSE FURNITURE (doing business as Vineyard Furniture International LLC), Plaintiffs, AND DREAM ROOMS FURNITURE (Shanghai) CO., LTD., Plaintiff, AND ORIENT INTERNATIONAL HOLDING SHANGHAI FOREIGN TRADE CO., LTD., Plaintiff, AND GUANGDONG YIHUA TIMBER INDUSTRY CO., LTD., Plaintiff-Appellant,
v.
UNITED STATES, Defendant-Appellee,
v.
AMERICAN FURNITURE MANUFACTURERS COMMITTEE FOR LEGAL TRADE AND VAUGHAN-BASSETT FURNITURE COMPANY, INC., Defendants-Cross Appellants

Page 1372

Appeals from the United States Court of International Trade in Nos. 09-CV-0378, 09-CV-0379, 09-CV-0394, 09-CV-0395, 09-CV-0398, and 09-CV-0399, Judge Jane A. Restani.

THOMAS M. BELINE, Cassidy Levy Kent (USA) LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were JOHN D. GREENWALD and JONATHAN M. ZIELINSKI.

STEPHEN C. TOSINI, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were STUART F. DELERY, Assistant Attorney General, JEANNE E. DAVIDSON, Director, and PATRICIA M. MCCARTHY, Assistant Director. Of counsel were REBECCA CANTU and SHANA ANN HOFSTETTER, attorneys, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.

J. MICHAEL TAYLOR, King & Spalding LLP, of Washington, DC, argued for defendants-cross appellants. With him on the brief were JOSEPH W. DORN and DANIEL L. SCHNEIDERMAN. Of counsel was PRENTISS LEE SMITH, JR.

Before RADER[*], LINN, and TARANTO, Circuit Judges.

OPINION

Page 1373

Taranto, Circuit Judge .

Guangdong Yihua Timber Industry Co., Ltd. (Yihua), appeals a final judgment of the Court of International Trade that sustained the latest results (following three previous remands) reached by the United States Department of Commerce in a review of antidumping duties imposed on wooden bedroom furniture imported from the People's Republic of China. The American Furniture Manufacturers Committee for Legal Trade and Vaughan-Bassett Furniture Company, Inc. (together, AFMC), cross-appeal. For the reasons set out below, we affirm in part, reverse in part, and remand.

Background

In 2005, Commerce issued an order imposing anti-dumping duties on wooden bedroom furniture from the People's Republic of China. Wooden Bedroom Furniture from the People's Republic of China, 70 Fed. Reg. 329 (Dep't Commerce Jan. 4, 2005). On March 7, 2008, acting under 19 U.S.C. § 1675(a), Commerce initiated its third administrative review of the duties. Wooden Bedroom Furniture from the People's Republic of China, 73 Fed. Reg. 12,387 (Dep't Commerce Mar. 7, 2008) (notice of administrative review). The review covered imports during 2007. Commerce published its preliminary results on February 9, 2009. Wooden Bedroom Furniture from the People's Republic of China, 74 Fed. Reg. 6,372 (Dep't Commerce Feb. 9, 2009) (preliminary results).

As authorized by the statute in the case of China, Commerce, in calculating dumping margins, sought to estimate production costs of the merchandise at issue by using surrogate values from a comparable market economy. 19 U.S.C. § 1675(a)(2)(A)(i) (in review of antidumping duty, Commerce must determine normal value of the merchandise at issue); 19 U.S.C. § 1677b(c)(1) (for a nonmarket economy country, Commerce may determine normal value based on factors of production in a comparable market economy country). In its preliminary results, Commerce determined the value for wood inputs into the furniture, including lumber, by using data from the Philippines National Statistics Office (NSO), which listed imports of wood into the Philippines by volume (in cubic decimeters) and value, resulting in dollars-per-volume-unit figures for various kinds of wood. Preliminary Results, 74 Fed. Reg. at 6,383. Commerce relied on financial statements from five Philippine companies, including Diretso Design Furniture, Inc., to determine values for overhead, for selling, general, and administrative expenses, and for profit. Id. at 6,384.

Page 1374

Yihua, a Chinese company that manufactures wooden furniture imported into the United States, filed comments on the preliminary results, challenging Commerce's reliance on the NSO's volume-based data and on Diretso Design's financial statements. With respect to the NSO's volume-based data for wood inputs, Yihua contended that certain anomalies rendered the data unreliable, and it proposed that Commerce use data on imports into the Philippines available from the World Trade Atlas (WTA), which gave weight-based (per-kilogram) figures. With respect to Diretso Design, Yihua contended that there were multiple " Diretso" entities and that the Diretso company whose financial statements Commerce used was not the same company as the Diretso company that Commerce found to be comparable to Yihua.

In its Final Results, Commerce agreed with Yihua regarding the wood-input issue but not the Diretso issue. Wooden Bedroom Furniture from the People's Republic of China, 74 Fed. Reg. 41,374 (Dep't Commerce Aug. 17, 2009) (final results), amended by 74 Fed. Reg. 55,810 (Oct. 29, 2009). Commerce agreed with Yihua that the NSO's volume-based figures were unreliable, and it adopted the WTA's weight-based figures in their place. Final Results, 74 Fed. Reg. at 41,377; Wooden Bedroom Furniture from the People's Republic of China, Issue and Decision Memorandum for the Final Results of the 2007 Antidumping Duty Administrative and New Shipper Reviews, 5-8 (Dep't Commerce Aug. 10, 2009). As to Diretso, Commerce relied on the financial statements of the same five companies it had used for the preliminary results (including Diretso Design), but also included the financial statements of three additional companies. Final Results, 74 Fed. Reg. at 41,377.

Interested parties brought six separate challenges in the Trade Court, which consolidated them for convenience. Lifestyle Enter., Inc. v. United States, Case No. 09-378 (Ct. Int'l Trade Nov. 9, 2009) (ECF No. 34) (consolidation order). Upon plaintiffs' and defendants' motions for judgment on the agency record, the Trade Court remanded the case for Commerce to explain why it used the WTA's weight-based data, rather than the NSO's volume-based data, citing " patent complications with using gross weight data with wood inputs." Lifestyle Enter., Inc. v. United States, 768 F.Supp.2d 1286, 1301 (Ct. Int'l Trade 2011) ( Lifestyle I ). The Trade Court also directed Commerce to redetermine on remand whether the financial statements of Diretso Design were from the correct company. Id. at 1308.

On remand, in its First Redetermination results, Commerce continued use of the WTA's weight-based data, as in the Final Results, but discontinued use of Diretso Design's financial statements. Final Results of Redetermination Pursuant to Remand, 8, 18 (Dep't Commerce Aug. 26, 2011) (ECF No. 132). Commerce explained that it found the NSO's volume-based import data to be unreliable because importers (into the Philippines) were required to report weight and value, but not necessarily volume, and when an importer did not report volume, the Philippine NSO filled in a volume figure using a standard conversion factor (a number stated with three decimal places) based on an assumed wood density of 848 kilograms per cubic meter. Id. at 10-11. Commerce found that " the record demonstrate[d] that a significant portion of [the volume-based] data were based on standard conversions from gross weight data . . . regardless ...


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