Dalian Meisen Woodworking Co., Ltd. v. United States

Slip Op. 21-158
UNITED STATES
COURT OF INTERNATIONAL TRADE
Court No. 20-00109
DALIAN MEISEN WOODWORKING CO, LTD.,
Plaintiff,
and
CABINETS TO GO, LLC,
Plaintiff-Intervenor,
v.
UNITED STATES,
Defendant,
and
AMERICAN KITCHEN CABINET ALLIANCE,
Defendant-Intervenor.
Before: M. Miller Baker, Judge
OPINION
[Granting 	Plaintiff’s 	motion 	for 	judgment 	on 	the
agency record and remanding for further administra-
tive proceedings.]
Dated: November 18, 2021
Stephen W. Brophy, Husch Blackwell, LLP, of Wash-
ington, DC, for Plaintiff. With him on the briefs were
Jeffrey S. Neeley and Nithya Nagarajan.
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Mark Ludwikowski, Clark Hill PLC of Washington,
DC, for Plaintiff-Intervenor. With him on Plaintiff-In-
tervenor’s written submission were Courtney Gayle
Taylor, R. Kevin Williams, and William Sjoberg.
Ioana Cristei, Trial Attorney, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice of
Washington, DC, for Defendant. With her on the brief
were Bryan M. Boynton, Assistant Attorney General,
Jeanne E. Davidson, Director, and Tara K. Hogan, As-
sistant Director. Of counsel on the brief was W. Mitch
Purdy, Attorney, Office of Chief Counsel for Trade En-
forcement & Compliance, U.S. Department of Com-
merce of Washington, DC.
Luke A. Meisner, Schagrin Associates of Washington,
DC, for Defendant-Intervenor. With him on the brief
was Roger B. Schagrin.
Baker, Judge: It’s often said that bad facts make
bad law. This case, which involves the Department of
Commerce’s imposition of hefty antidumping duties on
ersatz maple cabinets imported from China, certainly
has bad facts.
Commerce’s investigation revealed that a Chinese
producer markets and sells its wooden cabinets in the
United States as maple even though they are made of
birch, a less costly grade of wood. To borrow a meta-
phor that could have been written for this case, the
producer’s advertising in the United States is a “com-
plete fraud from bark to core.” Aptix Corp. v. Quick-
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turn Design Sys., Inc., 269 F.3d 1369, 1373 (Fed. Cir.
2001).
Less than amused, the Department applied “total
adverse facts available”—trade law jargon for impos-
ing the steepest possible antidumping duties because
a producer has not been forthcoming in an investiga-
tion. Here, however, the producer did exactly what it
was supposed to do: truthfully respond to Commerce’s
questions and otherwise fully cooperate. That the pro-
ducer defrauded consumers is of no moment for anti-
dumping purposes, as the Department lacks jurisdic-
tion to police false advertising violations.
The court accordingly remands so that Commerce
can rethink this one. In the meantime, the Federal
Trade Commission, state Attorneys General, and the
plaintiffs’ class action bar may wish to take a close look
at the producer’s swindling of its U.S. customers.
Statutory and Regulatory Background
The Tariff Act of 1930, as amended, provides a
mechanism to combat dumping—the sale of imported
merchandise in the United States at “less than its fair
value.” 19 U.S.C. § 1673(1). Under that statute, domes-
tic producers and other affected entities can petition
Commerce and the International Trade Commission to
investigate alleged dumping and its effects on U.S. in-
dustry. 	Hung 	Vuong 	Corp. 	v. 	United 	States, 	483
F. Supp. 3d 1321, 1334 (CIT 2020). If the Department
determines that dumping is occurring, and the ITC
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determines that the dumping harms domestic indus-
try, Commerce can impose antidumping duties on top
of any other applicable duties. 19 U.S.C. §1673. These
duties are “in an amount equal to the amount by which
the normal value exceeds the export price (or the con-
structed export price) for the merchandise.” Id.
To determine whether dumping is occurring, the
Tariff Act requires the Department to make “a fair
comparison . . . between the export price or constructed
export price and normal value.” Id. § 1677b(a). Thus,
Commerce’s dumping determination also establishes
the amount of the applicable duty so long as other stat-
utory conditions are satisfied.
A. Normal value
“Normal value” is generally “the price a producer
charges in its home market.” U.S. Steel Corp. v. United
States, 621 F.3d 1351, 1353 (Fed. Cir. 2010); see also
19 U.S.C. § 1677b(a)(1)(B)(i) (defining normal value by
reference to home market sales “in the ordinary course
of trade”). In cases (such as this) involving imports
from nonmarket economies, 1 the statute generally re-
quires Commerce to determine normal value based on
“the 	value 	of 	the 	factors 	of production 	utilized 	in
1 A “nonmarket economy” is “any foreign country that
[Commerce] determines does not operate on market princi-
ples of cost or pricing structures, so that sales of merchan-
dise in such country do not reflect the fair value of the mer-
chandise.” 19 U.S.C. § 1677(18)(A).
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producing the merchandise,” combined with general
overhead costs, profit, and certain other costs and ex-
penses. See 19 U.S.C. § 1677b(c)(1). “Factors of produc-
tion” include, but are not limited to, labor, raw mate-
rial inputs, energy, and capital costs. Id. § 1677b(c)(3).
B. Export 	price 	and 	constructed 	export
price
The “export price” to which Commerce compares
the import’s “normal value” is the foreign producer/ex-
porter’s price for unaffiliated U.S. customers. See id.
§ 1677a(a). The “constructed export price” that the De-
partment alternatively uses for this comparison is the
price that the foreign producer/exporter’s affiliated
seller 	in 	turn 	charges 	U.S. 	customers. 	See 	id.
§ 1677a(b); see also U.S. Steel Corp., 621 F.3d at 1353;
Hung Vuong, 483 F. Supp. 3d at 1353 n.34 (citing Mid
Continent Steel & Wire, Inc. v. United States, 203
F. Supp. 3d 1295, 1298–99 (CIT 2017)). 2 This case in-
volves a constructed export price—the price the for-
eign producer’s affiliate first charged U.S. purchasers.
2 Commerce makes certain statutory adjustments to the
price of goods to reflect various costs involved in preparing
them for sale in the United States, and the adjustments to
constructed export price are more extensive than the ad-
justments to export price. See 19 U.S.C. § 1677a(c) (listing
adjustments to both), (d) (listing additional adjustments to
constructed export price).
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C. Control numbers
To ensure that the normal value can accurately be
compared to the export price or constructed export
price for the same product, Commerce assigns what it
calls “control numbers” to products based on “specified
physical characteristics determined in each antidump-
ing proceeding.” Hung Vuong, 483 F. Supp. 3d at 1340
(quoting GODACO Seafood Joint Stock Co. v. United
States, 435 F. Supp. 3d 1342, 1348 n.1 (CIT 2020)). “All
products whose product hierarchy characteristics are
identical are deemed to be part of the same control
number and are regarded as identical merchandise for
the purposes of comparing export prices to normal
value.” Id. (cleaned up) (quoting Am. Tubular Prods.,
LLC v. United States, Slip Op. 15-98, at 5 n.1, 2015 WL
5236010, at *2 n.1 (CIT Aug. 28, 2015)).
The Department insists that respondents tie their
factors of production to control numbers because it
uses them to calculate the value of the imported prod-
uct “to ensure that a fair comparison is made between
the U.S. price and normal value.” Thuan An Prod.
Trading & Serv. Co. v. United States, 348 F. Supp. 3d
1340, 1353 (CIT 2018) (cleaned up). The use of a con-
trol number thus allows the Department to add up the
cost of the particular factors of production used to
manufacture a particular imported product and to
then compare the sum of those costs to the U.S. price
(export price or constructed export price) for that prod-
uct.
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D. “Adverse facts available”
In certain circumstances, Commerce must supply
facts not in the administrative record to complete its
antidumping investigation. If “necessary information
is not available on the record,” 19 U.S.C. § 1677e(a)(1),
“or” if
(2) an interested party or any other person—
(A) withholds information that has been
requested by [Commerce] . . . under this
subtitle,
(B) fails to provide such information by the
deadlines 	for 	submission 	of 	the 	infor-
mation or in the form and manner re-
quested, subject to subsections (c)(1) and
(e) of section 1677m of this title,
(C) significantly impedes a proceeding un-
der this subtitle, or
(D) provides such information but the in-
formation cannot be verified as provided
in section 1677m(i) of this title,
[Commerce] 	. 	. 	. 	shall, 	subject 	to 	section
1677m(d) of this title, use the facts otherwise
available in reaching the applicable determina-
tion under this subtitle.
Id. § 1677e(a)(2) (emphasis added).
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Because the use of “facts otherwise available” is a
means for filling in gaps in the record, see Bebitz
Flanges 	Works 	Private 	Ltd. 	v. 	United 	States, 	433
F. Supp. 3d 1309, 1316–17 (CIT 2020), Commerce
sometimes refers to using “total” or “partial” facts oth-
erwise available. The distinction relates to whether
portions of the respondent’s data are usable. “Depend-
ing on the severity of a party’s failure to respond to a
request for information . . . , Commerce may select ei-
ther partial or total [facts otherwise available].” Fresh
Garlic Producers Ass’n v. United States, 121 F. Supp.
3d 1313, 1324 (CIT 2015).
Once Commerce finds it necessary to resort to facts
otherwise 	available—whether 	partial 	or 	total—the
Department may (but need not) take the second step
of determining whether the respondent “failed to coop-
erate by not acting to the best of its ability to comply”
with Commerce’s “request for information.” 19 U.S.C.
§ 1677e(b). If the Department affirmatively deter-
mines that the respondent has failed to cooperate, it
may then apply an “adverse inference” by selecting
“facts otherwise available” that are most unfavorable
to the respondent. See id.; see also Hung Vuong, 483
F. Supp. 3d at 1336.
The statute, however, allows the use of an adverse
inference only for purposes of “selecting from among
the 	facts 	otherwise 	available.” 	19 	U.S.C.
§ 1677e(b)(1)(A). This means that Commerce’s use of
an adverse inference in any matter is limited by how
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Commerce employs facts otherwise available. If Com-
merce 	applies 	“total” 	facts 	otherwise 	available,
though, it may apply a correspondingly “total” adverse
inference if it also determines that the respondent
failed to cooperate. If the Department does this, the
result is “total adverse facts available,” or “total AFA.”
E. Verification
Under the statute, Commerce “shall verify all infor-
mation relied upon in making . . . a final determination
in an investigation.” Id. § 1677m(i)(1). Commerce’s
regulations provide for on-site visits to producers and
exporters “in order to verify the accuracy and com-
pleteness of submitted factual information.” 19 C.F.R.
§ 351.307(d)(1)–(3). “Verification is like an audit, the
purpose of which is to test information provided by a
party for accuracy and completeness.” Bomont Indus.
v. United States, 733 F. Supp. 1507, 1508 (CIT 1990)
(cleaned up).
Factual and Procedural Background
A.
This case stems from an antidumping investigation
that Commerce undertook at the request of the Amer-
ican Kitchen Cabinet Alliance, which describes itself
as a group “of domestic producers of wooden cabinets
and vanities.” ECF 18, at 2. The Alliance’s petition al-
leged that Chinese producers were dumping wooden
cabinets 	and 	vanities 	in 	the 	U.S. 	market 	to 	the
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detriment of domestic industry. Wooden Cabinets and
Vanities and Components Thereof from the People’s Re-
public of China: Initiation of Less-Than-Fair-Value In-
vestigation, 84 Fed. Reg. 12,587, 12,587 (Dep’t Com-
merce Apr. 2, 2019).
In response, the Department began an antidump-
ing investigation covering the period from July 1,
2018, through December 30, 2018. Id. Commerce se-
lected the three largest Chinese producers/exporters of
wooden cabinets and vanities as mandatory respond-
ents, including Plaintiff Dalian Meisen Woodworking
Co., Ltd. Appx001123.
As a mandatory respondent, Meisen had to respond
to questionnaires and other informational requests
from Commerce. As relevant here, those question-
naires included three separate areas of inquiry.
Commerce’s Section C questionnaire, seeking infor-
mation necessary for the Department to establish the
export price or constructed export price, asked Meisen
to provide its U.S. sales database with prices. Argu-
ment at 8:30–9:15. Meisen reported the dollar value of
each U.S. sale, and its database coded each U.S. sale
with the control number “4” for a birch product. 3 Id.;
3 Commerce’s questionnaire instructed Meisen to code its
products by type of wood used in the manufacturing. As
relevant here, Commerce required Meisen to assign “Code
4” to products manufactured with birch (considered a “com-
mon-grade hardwood”) and “Code 5” to products manufac-
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see also Appx082808–082816 (Exhibit C-1 to Schedule
C questionnaire); ECF 55, at 15 (the Alliance’s ac-
knowledgment that Meisen used the control number
for birch in its sales database).
Commerce’s Section D questionnaire, seeking infor-
mation on the factors of production, asked Meisen
what type of wood the company used. See Appx082664
(questionnaire request to “[r]eport each raw material
used to produce a unit of the merchandise under con-
sideration”). Meisen responded that it used birch for
the face of its cabinets. Appx082707; see also ECF 55,
at 15 (the Alliance’s acknowledgment that Meisen “re-
ported that all of its cabinets were produced from birch
wood”). 4
Commerce’s Section A questionnaire asked Meisen
to report general company information, including price
lists 	and 	promotional 	and 	advertising 	materials.
Appx080038; 	Appx080041. 	Meisen’s 	responses 	re-
vealed that much, if not all, of its promotional, adver-
tising, and sales materials characterized its products
tured with maple (considered a “middle-grade hardwood”).
Appx001195 (citing the questionnaire).
4 Meisen’s Schedule D questionnaire response apparently
also included the control number “Code 4” for birch, but the
relevant pages are not included in the parties’ Joint Appen-
dix. See also ECF 57, at 3–4 (Meisen brief explaining that
the company reported “that it only used birch wood in its
production”).
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as manufactured with maple, a higher-grade wood
than birch. 5
Because Meisen’s Section C (sales database with
prices) and D (factors of production) questionnaire re-
sponses said the company’s cabinets were birch, but its
Section A (customer-facing advertising, sales, and pro-
motional materials) questionnaire responses charac-
terized those same products as maple, the Alliance
“conducted a factual investigation” that it provided to
the Department. Appx086547. That investigation re-
vealed (consistent with Meisen’s own submission) that
the company’s promotional and advertising materials
represented its products as made of maple, which is
much 	more 	expensive 	than 	birch. 	Id.; 	see 	also
Appx086276, Appx086281, Appx086286, Appx086349.
In view of the representations in Meisen’s advertis-
ing, promotional, and sales materials, Commerce pre-
liminarily determined that Meisen sold maple rather
than birch cabinets in the United States. Appx001049.
The 	Department 	further 	preliminarily 	determined
that the company “did not accurately report its [factors
of production]” because its submission “only includ[ed
factors of production] data for the consumption of birch
5 A catalog from J&K Cabinetry, for example, described the
first step in the production process for Meisen’s cabinets:
“The finest solid maple wood is sanded until smooth and
vacuumed.” Appx084945; ECF 46, at 15–16 (Alliance citing
Appx084945); ECF 58, at 8 (Meisen quoting the same state-
ment and citing Appx084967).
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wood.” Appx001049–001050. Commerce declared that
it would not rely on any of the company’s factors-of-
production data because the data all related solely to
birch wood:
A complete and accurate accounting of all [fac-
tors of production] used in the production of the
merchandise under consideration is required for
the calculation of [normal value], and so we can-
not calculate [normal value]. Because [normal
value] is in turn required for the calculation of
an [antidumping] margin, we also cannot calcu-
late Meisen’s weighted-average dumping mar-
gin using the data it reported.
Appx001050.
Commerce therefore found that “Meisen failed to
provide complete and accurate information regarding
its 	production 	process 	and 	[factors 	of 	production],
withheld information, failed to provide information in
the form or manner requested, and significantly im-
peded this investigation” for purposes of 19 U.S.C.
§ 1677e(a)(2)(A), (B), and (C). The Department also de-
termined that these failures required applying total
facts otherwise available. Appx001049.
Commerce then chose to apply a total adverse in-
ference 	under 	19 	U.S.C. 	§ 	1677e(b), 	finding 	that
Meisen failed to cooperate by not acting to the best of
its ability to comply with the Department’s “requests
for information regarding its inputs.” Appx001049. As
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a result, rather than calculating the company’s dump-
ing margin based on its factual submissions, Com-
merce preliminarily assigned Meisen a dumping mar-
gin 	of 	262.18 	percent, 	the 	highest 	possible 	rate.
Appx001050.
Even so, the Department stated that it would “con-
tinue to consider the application of [adverse facts
available] to Meisen based on any rebuttal factual in-
formation provided by Meisen and, if appropriate, any
further information requested by Commerce after this
preliminary determination.” Appx001050.
B.
After Commerce issued its preliminary determina-
tion, it suspended verification and issued two “post-
preliminary” questionnaires to Meisen probing the dis-
crepancy between the company’s representations to
the Department (“we sell birch cabinets”) and its rep-
resentations to its customers (“we sell maple cabi-
nets”). 	Appx086551 	(first 	post-preliminary 	supple-
mental questionnaire); Appx087931 (second post-pre-
liminary 	questionnaire). 	Meisen’s 	responses 	con-
firmed that the company’s original submissions were
correct: the company manufactures its cabinets using
birch but (falsely) markets and promotes them as ma-
ple. See Appx086572; Appx087951.
After 	receiving 	these 	responses, 	Commerce 	in-
formed Meisen that the Department would not verify
of any of the company’s questionnaire responses and
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would continue to apply total facts otherwise available
with an adverse inference. Commerce referred to “[t]he
dissonance between what Meisen marketed to its cus-
tomers and what Meisen reported to Commerce” and
asserted that the company should have flagged its
false advertising to the Department early in the inves-
tigation. Appx001107.
Commerce 	then 	issued 	an 	“issues 	and 	decision
memorandum” affirming the bottom-line result of its
preliminary determination—application of total ad-
verse facts available with a 262.18 percent dumping
margin, 	Appx001193—but 	its 	factual 	conclusion
changed dramatically. Whereas the preliminary deter-
mination found that Meisen lied to the Department,
see 	Appx001049–001050, Commerce belatedly real-
ized—after reviewing the company’s post-preliminary
questionnaire responses—that the company’s original
questionnaire 	responses 	were 	truthful 	after 	all.
Meisen didn’t lie to the Department—it lied to its U.S.
customers: “[T]here can be no question that [the com-
pany] is intentionally misleading its customers into
believing that they are purchasing maple cabinets and
that [the company’s] customers believe that they are
paying 	for 	products 	made 	of 	maple 	wood.”
Appx001196.
Reflecting its changed understanding of the back-
ground facts, Commerce offered completely different
reasons 	for 	applying 	total 	adverse 	facts 	available
against Meisen.
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First, the Department asserted that through false
advertising, the company created the “potential of
masking dumped sales.” Appx001197. Because the
company sold its birch products as maple cabinets,
“the degree to which Meisen may be selling at [less-
than-fair value] is effectively obscured.” Id. “[B]y mis-
representing 	the 	product 	being 	sold,” 	the 	company
“subverted 	Commerce’s 	intent 	and 	process” 	and
“thereby distort[ed] the comparison [the Department]
is tasked with making.” Id. (emphasis added). As a re-
sult, Commerce could not “calculate an accurate mar-
gin with the data reported by Meisen,” id., and “verifi-
cation of the accuracy of the [company]’s reported
data” would not “resolve the discrepancy.” Id. The De-
partment accordingly rejected any use of Meisen’s data
“for this final determination.” Id.
Second, Meisen’s “U.S. sales database is comprised
of sales of merchandise priced under [control numbers]
[for maple] that are not included in its [factors-of-pro-
duction] database,” Appx001197, and “Meisen’s U.S.
[control numbers] do not represent the maple cabinets
it purported to sell and the record does not contain
[factors of production] data for the products Meisen
represented selling in the U.S. market,” id. Because of
this discrepancy, Commerce asserted that it could not
“calculate an accurate dumping margin with the data
reported by Meisen,” id., and “verification of [the com-
pany’s] reported data” would not “resolve the discrep-
ancy.” Id. This provided another reason for the Depart-
ment to reject Meisen’s data. Id.
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Third, the Department faulted the company for not
flagging and explaining in its initial questionnaire re-
sponses “the discrepancy between its wood consump-
tion and marketing materials that appeared to directly
contradict its consumption claims.” Appx010199. Be-
cause Meisen failed to do so, Commerce “was forced to
delay verification and issue two supplemental ques-
tionnaires before [the company] directly addressed the
issue.” Id.
Finally, the company “gave conflicting and uncon-
vincing reasons as to why its marketing materials mis-
represented the species of wood used in its cabinets.”
Appx001200.
Commerce then found that Meisen withheld infor-
mation, failed to report information on time, and sig-
nificantly impeded the investigation, such that Com-
merce had to resort to facts otherwise available pursu-
ant 	to 	19 	U.S.C. 	§ 	1677e(a)(2)(A), 	(B), 	and 	(C).
Appx001200. Commerce did not, however, directly ex-
plain the applicability of these provisions to its four
reasons set forth above.
Commerce also found that Meisen’s failure to af-
firmatively flag its false advertising for the Depart-
ment’s attention reflected a failure to cooperate justi-
fying 	an 	adverse 	inference 	pursuant 	to 	19 	U.S.C.
§ 1677e(b)(1)(A). Appx001200. Commerce thus applied
“total AFA,” or total adverse facts available. That
meant that rather than using the company’s infor-
mation 	to 	calculate 	Meisen’s 	dumping 	margin,
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Commerce supplied other information, and in so doing
selected from “adverse” information in a way that
maximized the company’s duties at 262.18 percent.
Appx001116–001117. 6 	The 	Department 	later 	pub-
lished this result in the Federal Register. See Wooden
Cabinets and Vanities and Components Thereof from
the People’s Republic of China: Corrected Notice of Fi-
nal Affirmative Determination of Sales at Less Than
Fair Value, 85 Fed. Reg. 17,855 (Dep’t Commerce
Mar. 31, 2020).
C.
Meisen 	timely 	sued 	under 	19 	U.S.C.
§§ 1516a(a)(2)(A)(i)(II) and 1516a(a)(2)(B)(i) to contest
Commerce’s final determination. ECF 12. The com-
plaint asserted that the Department’s decisions not to
verify the company’s data and “to assign Meisen a
margin based on total adverse facts available” were
not supported by substantial evidence and were not in
accordance with law. Id. ¶¶ 10, 12. The company asked
the court to remand this case with instructions to ver-
ify Meisen’s data and recalculate the antidumping
margin. Id. at 5.
6 Commerce also stated that it “shared relevant public in-
formation” about Meisen’s “untruthful [advertising] to con-
sumers in the United States” with the Federal Trade Com-
mission for “further investigation, and if appropriate, en-
forcement action.” Appx001200.
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Cabinets to Go, LLC, intervened as a matter of
right as a plaintiff. ECF 17. It described itself as an
importer of subject merchandise that participated in
the proceedings before Commerce, ECF 13, at 1, and
stated that the antidumping rate for its suppliers is
based on the rates assigned to the mandatory respond-
ents, including Meisen, so any change in the latter’s
rate could affect the rate for those suppliers. ECF 13,
at 2. 7 Although Cabinets to Go stated that it intended
7 The Tariff Act requires that importers of record pay du-
ties assessed, 19 U.S.C. § 1505, and by regulation Com-
merce prohibits exporters from reimbursing their import-
ers. 19 C.F.R. § 351.402(f)(1)(i); see also Ad Hoc Shrimp
Trade Action Comm. v. United States, 925 F. Supp. 2d
1367, 1375 (CIT 2013) (explaining that “the non-reim-
bursement regulation exists to ensure that the antidump-
ing duty order’s incentive for importers to buy at non-
dumped prices is not negated by exporters who sell at
dumped prices while removing the importer’s exposure to
antidumping liability”).
In this case, that means Cabinets to Go, as importer of
record, must pay the duties assessed on its exporter suppli-
ers, who were successful separate-rate applicants that
were not individually investigated. Their rate was based on
the weighted average of the rate assigned to investigated
mandatory respondents, excluding entities with zero and
de minimis margins and margins (such as Meisen’s here)
based entirely on facts otherwise available. See 19 U.S.C.
§ 1673d(c)(5)(A); see also New Am. Keg v. United States,
Slip Op. 21-30, at 7–9 (CIT 2021) (discussing how Com-
merce calculates the rate of successful separate-rate appli-
cants that are not individually investigated). Thus, if the
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Ct. No. 20-00109 	Page 20
to support Meisen’s challenge “to certain aspects of
Commerce’s final results in this investigation,” id., its
intervention motion failed to identify what relief, if
any, it seeks from the court.
Finally, the Alliance (whose petition sparked the
Department’s investigation) intervened as of statutory
right to support Commerce’s decision. ECF 22.
Meisen then filed the pending Rule 56.2 motion for
judgment on the agency record. ECF 57 (confidential);
ECF 58 (public); see USCIT R. 56.2. Cabinets to Go
stated that it would neither file a Rule 56.2 motion nor
take any position on Meisen’s motion for judgment.
ECF 32, at 1. The government (ECF 54) and the Alli-
ance (ECF 55, public; ECF 56, confidential) oppose
Meisen’s motion. Meisen replied, ECF 59, and the
court heard oral argument.
Jurisdiction and Standard of Review
The court has subject-matter jurisdiction under
28 U.S.C. § 1581(c).
court were to remand for recalculation of Meisen’s rate as
the company requests, the court could also order the De-
partment to recalculate the rate for Cabinets to Go’s sup-
pliers as long as Meisen’s new rate did not fall within one
of the exceptions discussed above. That recalculation, in
turn, might affect the rate ultimately paid by Cabinets to
Go as importer of record.
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Ct. No. 20-00109 	Page 21
In actions such as this brought under 19 U.S.C.
§ 1516a(a)(2)(A)(i)(II), “[t]he court shall hold unlawful
any determination, finding, or conclusion found . . . to
be unsupported by substantial evidence on the record,
or otherwise not in accordance with law . . . .” 19 U.S.C.
§ 1516a(b)(1)(B)(i).
As 	to 	evidentiary 	issues, 	the 	question 	is 	not
whether the court would have reached the same deci-
sion on the same record, but rather whether the ad-
ministrative record as a whole permits Commerce’s
conclusion—even if the court might have weighed the
evidence differently:
Substantial evidence has been defined as more
than a mere scintilla, as such relevant evidence
as a reasonable mind might accept as adequate
to support a conclusion. To determine if substan-
tial evidence exists, we review the record as a
whole, including evidence that supports as well
as evidence that fairly detracts from the sub-
stantiality of the evidence.
Nippon Steel Corp. v. United States, 337 F.3d 1373,
1379 (Fed. Cir. 2003) (cleaned up).
As to legal questions, the familiar framework of
Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842–45 (1984), governs ju-
dicial review of Commerce’s interpretation of the anti-
dumping statute. See United States v. Eurodif S.A.,
555 U.S. 305, 316 (2009) (Commerce’s “interpretation
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Ct. No. 20-00109 	Page 22
governs in the absence of unambiguous statutory lan-
guage to the contrary or unreasonable resolution of
language that is ambiguous”).
Discussion
I.
Commerce concluded that Meisen withheld infor-
mation, failed to timely report information, and signif-
icantly impeded the investigation such that the De-
partment 	was 	compelled 	to 	apply 	facts 	otherwise
available under 19 U.S.C. § 1677e(a)(2)(A), (B), and
(C). The court considers each provision in turn.
A.
Commerce must apply facts otherwise available
when it determines that a respondent “withholds in-
formation that has been requested by [the Depart-
ment] 	. 	. 	. 	under 	this 	subtitle.” 	19 	U.S.C.
§ 1677e(a)(2)(A). Of the four grounds the Department
articulated for its decision, only the last—Meisen’s
“conflicting and unconvincing reasons as to why its
marketing materials misrepresented the species of
wood used in its cabinets,” Appx001200—might consti-
tute “withholding of information” from Commerce. 8
8 For example, Commerce’s faulting of Meisen for not af-
firmatively flagging its false advertising for the Depart-
ment’s attention could hardly be characterized as “with-
hold[ing] 	information 	that 	has 	been 	requested 	by
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Ct. No. 20-00109 	Page 23
The Department cited three passages in Meisen’s
post-preliminary questionnaire response as evidence
of “conflicting and unconvincing” reasons:
The marketing materials are not a reflection of
the actual material used in the production of the
wooden cabinets during the POI but rather a re-
flection of the “look” of the cabinets. They have
been marketed as maple.
The J&K companies advertise their cabinets as
solid maple wood as there is no optical difference
in the finished good between maple and birch
once the cabinet is finished.
[A]ll our cabinets are made of solid maple wood
door and frames with plywood constructed box .
. . solid maple wood is the main wood species we
use for cabinet door, frames, molding decoration
parts, and drawers.
Appx001200 n.496.
The final cited passage is easily disposed of, be-
cause it appears in the company’s (false) advertising
disclosed to the Department. See Appx087953. As a re-
sult, the Department could not reasonably character-
ize it as evidence of Meisen’s withholding of infor-
mation. Cf. Ad Hoc Shrimp Trade Action Comm. v.
[Commerce] 	. 	. 	. 	under 	this 	subtitle.” 	19 	U.S.C.
§ 1677e(a)(2)(A) (emphasis added).
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Ct. No. 20-00109 	Page 24
United States, 70 F. Supp. 3d 1328, 1335 (CIT 2015)
(“Substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support
a conclusion, and the substantial evidence standard of
review can be translated roughly to mean is the deter-
mination unreasonable?”) (cleaned up) (quoting Con-
sol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938), and
Nippon Steel Corp. v. United States, 458 F.3d 1345,
1351 (Fed. Cir. 2006)).
The first two passages cited by the Department
were responses, respectively, to these questions:
Please directly address why your marketing ma-
terials state that “the finest solid maple wood is
sanded until smooth and vacuumed” if the cabi-
nets sold during the period of investigation were,
in fact, made of birch.
Please explain why you only advertise cabinets
made of solid maple wood in the catalog used by
all of your U.S. affiliates when maple is not the
“type of wood that comprise [sic] the construc-
tion” and “the products were in fact made of
birch with a maple look and are not maple.”
Appx087951. Commerce essentially asked Meisen why
it lied to customers, and the Department found the
company’s responses “evasive and conflicting.”
Even accepting Commerce’s characterization, the
Department lacks any authority to investigate why
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Ct. No. 20-00109 	Page 25
antidumping respondents engage in false advertising,
just as it lacks the authority to ask respondents why
they violate environmental or antitrust laws, or why
their executives are disreputable people. Commerce’s
authority is circumscribed by statute, which permits
the Department to apply facts otherwise available
when a respondent “withholds information . . . re-
quested by [Commerce] under this subtitle.” 19 U.S.C.
§ 1677e(a)(2)(A) (emphasis added). “[T]his subtitle” re-
fers 	to 	Subtitle 	IV 	of 	the 	Tariff 	Act 	of 	1930, 	as
amended, which authorizes the Department to levy
countervailing 	and 	antidumping 	duties. 	In 	asking
Meisen why it lied to its customers, a subject the stat-
ute does not address, Commerce exceeded its regula-
tory 	writ. 	The 	Department’s 	invocation 	of
§ 1677e(a)(2)(A) was therefore contrary to law.
B.
Subject to a qualification not relevant here, Com-
merce must apply facts otherwise available when it de-
termines that a respondent “fails to provide such in-
formation [requested by the Department] by the dead-
lines for submission of the information or in the form
and manner requested.” Id. § 1677e(a)(2)(B). Although
Commerce also invoked this provision, it did so unrea-
sonably, as Meisen timely responded and provided in-
formation in the “form and manner requested.” There-
fore, Commerce’s invocation of facts otherwise availa-
ble under 19 U.S.C. § 1677e(a)(2)(B) is both unsup-
ported by substantial evidence and contrary to law.
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Ct. No. 20-00109 	Page 26
C.
The final statutory basis Commerce invoked for ap-
plying facts otherwise available is § 1677e(a)(2)(C),
which requires the Department to apply facts other-
wise available when a respondent “significantly im-
pedes 	a 	proceeding 	under 	this 	subtitle.” 	Id.
§ 	1677e(a)(2)(C) 	(emphasis 	added). 	The 	court 	pre-
sumes that in citing this provision Commerce relied on
three of its reasons.
First, Commerce faulted Meisen for not flagging its
false advertising in the company’s original question-
naire 	responses, 	which 	caused 	the 	Department 	to
waste 	time 	and 	resources 	ascertaining 	whether
Meisen lied to Commerce or lied to its customers.
Appx010199. The Department appears to have rea-
soned that by so causing this delay and expense,
Meisen “significantly impeded” its work.
The problem with this reasoning, however, is that
Commerce acknowledges that Meisen fully and truth-
fully complied with the Department’s original ques-
tionnaires. In Section D of the company’s original
questionnaire 	responses, 	Meisen 	certified 9 	that 	it
9 Meisen certified that its questionnaire responses were
truthful. Appx001004; see also 19 C.F.R. § 351.303(g) (re-
quiring parties submitting factual information to Com-
merce to certify the accuracy of such submissions using a
form acknowledging that “U.S. law . . . imposes criminal
sanctions on individuals who knowingly and willfully make
material false statements to the U.S. Government”).
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Ct. No. 20-00109 	Page 27
manufactured its cabinets using birch. In section C of
those responses, Meisen certified that it sold birch cab-
inets at certain prices. And in Section A of its respon-
ses, which Meisen also certified, the company pro-
duced promotional and marketing materials and sale
invoices in which it told its customers that the cabinets
were maple.
Meisen’s responses established prima facie that the
company lied to its customers, a point the Department
emphasized: “[T]here can be no question that [the com-
pany] is intentionally misleading its customers into
believing that they are purchasing maple cabinets and
that [the company’s] customers believe that they are
paying 	for 	products 	made 	of 	maple 	wood.”
Appx001196. That point is critical. It’s not that the
Commerce 	couldn’t 	make 	sense 	of 	Meisen’s 	infor-
mation because of the discrepancy between what the
company told the Department and what it told its cus-
tomers. To the contrary, after reviewing the company’s
post-preliminary questionnaire responses, the Depart-
ment fully understood the implications of the discrep-
ancy, and was (understandably) appalled.
But when a respondent fully and truthfully com-
plies with Commerce’s information requests on sub-
jects that the Department is allowed to investigate un-
der the Tariff Act—and here no party seriously dis-
putes that Meisen truthfully complied and that its re-
sponses were not materially misleading—as a matter
of law a respondent does not “significantly impede[ ] a
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Ct. No. 20-00109 	Page 28
proceeding 	under 	this 	subtitle.” 	19 	U.S.C.
§ 1677e(a)(2)(C) (emphasis added). Insofar as Com-
merce relied on Meisen’s failure to flag its false adver-
tising to determine that the company “significantly
impede[d]” the Department’s work, that determina-
tion was contrary to law.
Of course, the discrepancy between what Meisen
told Commerce (“we make birch cabinets”) and what it
told its customers (“we make maple cabinets”) was a
legitimate area of inquiry for the Department. After
all, if the company lied to Commerce (rather than its
customers), then Meisen’s factors of production and
sales databases (which used the control number for
birch) would not have been correct, and any dumping
margin based on such data would be understated. The
Department appropriately probed the issue with post-
preliminary 	questionnaires 	and 	concluded 	that
Meisen’s advertising was false, not its responses to
Commerce. That should have resolved the issue.
Commerce, 	though, 	complained 	that 	because 	of
Meisen’s failure to flag the discrepancy, the Depart-
ment “was forced to delay verification and issue two
[post-preliminary] 	questionnaires 	before 	[the 	com-
pany] directly addressed the issue.” Appx010199 (em-
phasis added). But Commerce was not “forced to delay”
anything; the Department chose not to verify. Verifi-
cation seeks to confirm the accuracy of respondents’
information submissions, which Commerce may not
take on faith. See 19 U.S.C. § 1677m(i)(1). Had the
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Ct. No. 20-00109 	Page 29
Department verified Meisen’s initial questionnaire re-
sponses, it could have confirmed that Meisen’s repre-
sentations to Commerce were true (and conversely,
that its representations to its customers were false). In
effect, the Department substituted its post-prelimi-
nary questionnaires for verification, and any resulting
delay was Commerce’s fault, not Meisen’s.
It appears that the second basis for Commerce’s
conclusion that Meisen “significantly impeded” the in-
vestigation was the Department’s finding that the
company’s false advertising “effectively obscured” the
“degree to which” the company might have been “sell-
ing at [less than fair value].” Appx001197. Because an-
tidumping duties are based on the difference between
the U.S. export price or constructed export price and
the home market price, artificially raising the U.S.
price would mitigate, if not entirely eliminate, the ef-
fect of such duties.
In calculating an antidumping margin based on the
export price or constructed export price, however, the
statute requires (as relevant here) Commerce to use
the “price at which the subject merchandise is first sold
(or agreed to be sold) in the United States.” 19 U.S.C.
§ 1677a(1), (b) (emphasis added). The statute also al-
lows the Department to adjust that price in various
specified circumstances, see id. § 1677a(c), (d), none of
which include a respondent’s manipulation of the price
through otherwise illegal activity. Contrary to the gov-
ernment’s argument, see ECF 54, at 22 (“Commerce
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Ct. No. 20-00109 	Page 30
reasonably concluded that Meisen’s U.S. sales price
does not represent the U.S. sales price of birch cabi-
nets”), a respondent’s otherwise illegal manipulation
of the U.S. sales price of its products is statutorily ir-
relevant for antidumping purposes.
A respondent might illegally manipulate the U.S.
sales price of its products in any number of ways. It
might fix prices in violation of the antitrust laws. Or it
might constrain supply by hiring cyber hackers to dis-
able its competitors’ production operations. Or, as
here, it might increase demand by falsely advertising
the nature of its product. In all these contexts, the law
provides remedies for illegal conduct that manipulates
prices, but they are outside the Tariff Act and beyond
the Department’s antidumping jurisdiction. Insofar as
Commerce relied on Meisen’s illegal manipulation of
the U.S. sales price for its products to determine that
the company “significantly impede[d]” the investiga-
tion, that determination was contrary to law.
Finally, the court presumes that the third and final
basis for Commerce’s conclusion that Meisen “signifi-
cantly impeded” the investigation was the Depart-
ment’s finding that the company’s lies to its customers
prevented Commerce from using the proper control
number to match the raw material used in production
(birch) with the products actually marketed by the
company (maple). See Appx001197.
At argument, however, the parties clarified that
Meisen’s responses to Commerce’s Section C (sales
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Ct. No. 20-00109 	Page 31
database) and D (factors of production) questionnaires
both proffered the control number for birch. That is,
Meisen’s control numbers for its sales database and
factors of production matched. Counsel for the govern-
ment candidly explained that the Department still de-
clined to accept the control number for birch in the
sales database because Meisen marketed its cabinets
as maple. Argument at 31:30–34:20.
In view of this concession about the record, Com-
merce’s finding that Meisen’s questionnaire responses
prevented 	the 	Department 	from 	matching 	control
numbers in the sales database with the reported fac-
tors of production is not supported by substantial evi-
dence. Rather than accepting the company’s truthful
information, the Department instead refused to use
that information because Meisen lied to its customers,
a subject beyond Commerce’s statutory authority. As
a result, Commerce’s assertion that it could not use the
control number for birch to match the company’s raw
material input with its product sales is unsupported
by substantial evidence because no evidence on the
record supports it. 10 The Department’s assertion is
10 Not only is Commerce’s position devoid of any support in
the record, it conflicts with the Department’s position in
the 	parallel 	countervailing 	duty 	proceeding, 	where 	it
stated that “Meisen purchased only birch sawn wood . . . .
Regardless of Meisen’s representations to its customers, we
obtained verifiable data” from the company. Issues and De-
cision Memorandum, Comment 9, Wooden Cabinets and
Vanities 	and 	Components 	Thereof 	from 	the 	People’s
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Ct. No. 20-00109 	Page 32
also contrary to law because the Department rejected
Meisen’s birch control numbers based on the com-
pany’s false advertising, a subject beyond Commerce’s
regulatory authority.
* * *
Commerce’s reasons for rejecting Meisen’s infor-
mation and supplying facts otherwise available do not
withstand scrutiny. The court therefore remands for
the Department to reconsider whether and to what ex-
tent it will use the company’s information in its anti-
dumping 	calculations. 	Insofar 	as 	the 	Department
chooses to use Meisen’s information, it must then un-
dertake verification. See 19 U.S.C. § 1677m(i)(1).
II.
Commerce also found that Meisen’s failure to af-
firmatively flag its false advertising for the Depart-
ment’s attention reflected a failure to cooperate war-
ranting 	an 	adverse 	inference 	under 	19 	U.S.C.
§ 1677e(b)(1)(A). Appx001200. A necessary (but not
sufficient) condition to Commerce so applying an ad-
verse inference, however, is the Department’s lawful
determination to apply facts otherwise available. See
19 U.S.C. § 1677e(b). Because the court finds that
Commerce’s application of facts otherwise available is
contrary 	to 	law 	and 	unsupported 	by 	substantial
Republic of China, 85 Fed. Reg. 11,962 (Dep’t Commerce
Feb. 28, 2020), quoted in ECF 57, at 42–43 (emphasis
added).
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Ct. No. 20-00109 	Page 33
evidence, the court also remands for the Department
to reconsider its application of an adverse inference.
III.
As noted above, Plaintiff-Intervenor Cabinets to Go
failed to request any relief in its intervention motion
or at the merits stage. In view of this failure, the court
ordered the company to explain why it should not be
dismissed from the case. ECF 66. In response, Cabi-
nets to Go belatedly clarified that it requests relief af-
ter all in the form of an order directing Commerce, if
ordered to recalculate Meisen’s rate, to also recalculate
the rate for Cabinets to Go’s suppliers. ECF 67, at 1;
see also above note 7.
Because Cabinets to Go, an intervenor, seeks relief
different from the relief sought by Meisen, it must pos-
sess independent constitutional standing. See Prime-
Source Bldg. Prods., Inc. v. United States, 494 F. Supp.
3d 1307, 1319–20 (CIT 2021) (Baker, J., concurring)
(discussing Town of Chester, N.Y. v. Laroe Estates, 137
S. Ct. 1645 (2017), and Little Sisters of the Poor Saints
Peter & Paul Home v. Pennsylvania, 140 S. Ct. 2367
(2020)). Although Cabinets to Go plainly suffers in-
jury-in-fact (it pays the import duties charged to its
suppliers), the company acknowledges it is unknowa-
ble whether Commerce’s recalculation of its suppliers’
rates would reduce those rates (and thus what Cabi-
nets to Go ultimately pays). See ECF 67.
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Ct. No. 20-00109 	Page 34
Such uncertainty over the efficacy of the relief
sought ordinarily defeats standing for lack of redress-
ability. See, e.g., Consumer Watchdog v. Wis. Alumni
Rsch. Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014) (for
constitutional standing, a “party must show that it is
likely, rather than merely speculative, that a favorable
judicial decision will redress the injury”).
Nevertheless, where “Congress has accorded a pro-
cedural right to a litigant, such as the right to appeal
an administrative decision, certain requirements of
standing—namely immediacy and redressability, as
well as prudential aspects that are not part of Article
III—may be relaxed.” Id. For example, “one living ad-
jacent to the site for proposed construction of a feder-
ally licensed dam has standing to challenge the licens-
ing agency’s failure to prepare an environmental im-
pact statement, even though he cannot establish with
any certainty that the statement will cause the license
to be withheld or altered, and even though the dam
will not be completed for many years.” Lujan v. Defs.
of Wildlife, 504 U.S. 555, 573 n.7 (1992).
Thus, 	the 	uncertainty 	over 	whether 	the 	relief
sought by Cabinets to Go will redress its injury does
not defeat its standing, because Congress granted the
company a procedural right to seek that relief. See
19 U.S.C. § 1516a(a)(2)(A) (authorizing any “inter-
ested party who [was] a party” in an antidumping pro-
ceeding before Commerce to challenge the result in the
CIT); id. § 1516a(d) (granting any “interested party” in
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Ct. No. 20-00109 	Page 35
an 	antidumping 	proceeding 	before 	Commerce 	“the
right to appear and be heard as a party in interest”
before the CIT).
* * *
On remand, Commerce may decide to use some or
all of Meisen’s information. If it does, and if it recalcu-
lates Meisen’s rate, it must also as necessary recalcu-
late the rate for Cabinets to Go’s suppliers accordingly.
See above note 7.
Conclusion
For the reasons explained above, the court grants
Meisen’s motion for judgment on the agency record
and also grants Cabinets to Go the relief it seeks. A
separate remand order will issue requiring Commerce
to reconsider whether it will use Meisen’s information
and, insofar as it recalculates Meisen’s rate, to also re-
calculate the rate for Cabinets to Go’s suppliers.
Dated: November 18, 2021 	/s/ M. Miller Baker
New York, NY 	M. Miller Baker, Judge
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