United States Court of International Trade

Remanding in Part the Fourth Administrative Review

In Hangzhou Yingqing Material Co. and Hangzhou Qingqing Mechanical Co. v. United States, Court No. 14-133 (December 21, 2016), the Court reviewed the fourth administrative review (and aligned new shipper review) conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty order covering steel wire garment hangers from the People’s Republic of China (“PRC”). See Steel Wire Garment Hangers from the PRC, 73 Fed. Reg. 58,111 (Dep’t Commerce Oct. 6, 2008) (antidumping order) (“Order”); Steel Wire Garment Hangers from the PRC, 78 Fed. Reg. 70,271 (Dep’t Commerce Nov. 25, 2013) (prelim. results admin. rev. and new shipper rev.) (“Preliminary Results”).  Plaintiffs challenged (1) Commerce’s selection of Thailand as the primary surrogate country, (2) Commerce’s valuation of several of Yingqing’s factors of production (“FOPs”), i.e., paint, thinner, and corrugated paperboard, (3) Commerce’s rejection, as untimely, of factual information submitted by Yingqing, (4) Commerce’s allocation of labor costs in determining surrogate financial ratios, and (5) Commerce’s valuation of Yingqing’s brokerage and handling (“B&H”) costs.  The Court sustained Commerce’s determinations with respect to the first three issues but remands Commerce’s allocation of labor costs and its valuation of Yingqing’s B&H costs.

As for allocation of labor costs, plaintiffs maintained that Commerce acted unreasonably by failing to adjust surrogate financial ratios in accordance with its prior practice. Commerce cited Certain Steel Nails from the PRC, 79 Fed. Reg. 19,316 (Dep’t Commerce Apr. 8, 2014) (final results) (“Nails”) and Drawn Stainless Steel Sinks from the PRC, 78 Fed. Reg. 13,019 (Dep’t Commerce Feb. 26, 2013) (final determ.)). In Nails, Commerce adjusted the surrogate financial ratios to account for certain indirect labor expenses.  According to the Court, Commerce failed to explain why it did not make that same adjustment as in Nails where there was similar information on the record.

For purposes of B&H costs, while the Court affirmed Commerce’s use of World Bank data as a reliable and accurate source to value B&H, it did not agree with Commerce’s refusal to deduct costs of obtaining a letter of credit from B&H costs. Specifically, “the record contained email correspondence with the World Bank’s Doing Business Unit, International Finance Corporation, “confirm[ing] that the cost of a letter of credit has always been and continues to be included in the reported figures for [B&H] under the subdivision for ‘document preparation’ fees,” and that “[t]he cost to obtain the export letter of credit for . . . Thailand 2013 = $60.””  Slip Op. pg. 22.

The Court therefore remanded in part Commerce’s decisions regarding labor costs and its refusal to deduct costs for obtaining a letter of credit. 

Cross Motions for Summary Judgment Denied

In United States v. Univar USA, Inc., Court No. 15-215 (December 22, 2016), plaintiff, United States, sought to recover unpaid antidumping duties and a monetary penalty pursuant to 19 U.S.C. § 1592, stemming from 36 entries of saccharin, allegedly transshipped from China through Taiwan, which Defendant, Univar USA, Inc. (“Defendant” or “Univar”), entered into the commerce of the United States between 2007 and 2012. Before the Court were cross motions for partial summary judgment.

Following investigations by both the Department of Commerce and the International Trade Commission, on July 2, 2003, the Department of Commerce issued an antidumping duty order on imports of saccharin from the PRC. AD Order, 68 Fed. Reg. 40,906. That order imposed cash deposits of estimated antidumping duties at the rate of 329.94 percent on imports of saccharin from the PRC. Id. at 40,907. Thereafter, Univar sought other sources of saccharin and, as of 2004, was importing saccharin from Taiwan. After a qui tam action brought by Kinectic Industries, Inc. and CBP’s own investigations, CBP concluded that there was a sufficient correlation between imports into Taiwan from China and exports from Taiwan to Univar to indicate that Univar’s imports were simply being transshipped from China, through Taiwan, to the United States.

Because a penalty case was brought to the Court to be tried de novo, plaintiff was not barred from introducing evidence developed during discovery solely because it was not before CBP during the administrative proceeding.  While defendant argued that plaintiff provided no evidence supporting transshipment prior to March 2010, discovery is still on-going until January 25, 2017.  Furthermore, the Court issued letters rogatory for the testimony of two Taiwanese representatives, and plaintiff is in the process of procuring certified statements from Taiwanese authorities pertaining to saccharin production, manufacture or repackaging in Taiwan during the relevant period, data on saccharin imports into Taiwan during the relevant period, and import/export data relating to Lung Huang during the relevant period.

Thus, because plaintiff has not provided sufficient evidence to show transshipment from China to Taiwan, and because further discovery is being conducted, the cross motions for partial summary judgment were denied.

Motion for Preliminary Injunction Granted

In Fine Furniture, Amstrong Wood Products (Kunshan) Co., Ltd. et al. v. United States, Court No. 16-145, Slip Op. 16-120 (December 28, 2016), plaintiff-intervenor Armstrong Wood Products (Kunshan) Co., Ltd.’s (“plaintiff-intervenor” or “Armstrong”) moved with partial consent  (consent was provided by plaintiff) for a preliminary injunction to enjoin defendant, the United States (“defendant” or “the Government”), from liquidating its entries of multilayered wood flooring from the People’s Republic of China (“PRC”) during the pendency of the action.  Plaintiff-intervenor asked that liquidation be enjoined for all of its unliquidated entries of multilayered wood flooring from the PRC that “were entered, or withdrawn from warehouse, for consumption during the period December 1, 2013 through November 30, 2014, inclusive;” and were subject to the Department of Commerce’s (“the Department” or “Commerce”) multilayered wood flooring from the PRC December 1, 2013 through November 30, 2014 administrative review of the corresponding antidumping duty order. Multilayered Wood Flooring From the PRC, 81 Fed. Reg. 46,899, 46,901–02 (Dep’t of Commerce July 19, 2016) (final results of antidumping duty administrative review; 2013–2014) (“Final Results”) (determining that the weighted average dumping margins for the POR from December 1, 2013 through November 30, 2014 are 17.37 percent); Multilayered Wood Flooring From the PRC, 76 Fed. Reg. 64,318, 64,318 (Dep’t of Commerce Oct. 18, 2011) (final determination of sales at less than fair value).

In regards to defendant’s objections, plaintiff-intervenor maintains that it is not enlarging the case set out in plaintiff’s Complaint by introducing new substantive issues or theories but insists that it would hope to obtain the same benefit plaintiff would receive if plaintiff won this litigation. According to plaintiff-intervenor, were its entries to be liquidated before the case’s

conclusion, it could lose the relief that plaintiff would get for its entries.  The Court agreed that without a preliminary injunction, plaintiff-intervenor would indeed lose any relief awarded to plaintiff.  The Court found that because plaintiff-intervenor timely intervened, granting a preliminary injunction to prevent liquidation of its entries is proper.  According to the Court, the Court’s Rules contemplate that a plaintiff-intervenor may seek a preliminary injunction to protect its entries where it timely intervenes in an action before this Court; and these Rules contain no suggestion that any motion is required within the time the intervenor could have sued as a plaintiff.  Finally, plaintiff-intervenor met all the requisite requirements for a preliminary injunction: irreparable injury, likelihood of success, public interest, and balance of hardships.  For all these reasons, the Court granted plaintiff-intervenor’s motion for preliminary injunction.