Home Products International, Inc. v. United States

Slip Op. 08-39
UNITED STATES COURT OF INTERNATIONAL TRADE
HOME PRODUCTS INTERNATIONAL, INC.,
Before: Leo M. Gordon, Judge
Plaintiff,
Consol. Court No. 07-00123
v.
UNITED STATES,
Defendant.
OPINION AND ORDER
[Defendant’s request for a voluntary remand granted; Home Products’ motion for
judgment on the agency record denied in part.]
Dated: April 7, 2008
Blank Rome LLP (Frederick L. Ikenson, Larry Hampel, Roberta Kienast Daghir), for
Plaintiff Home Products International, Inc.
Jeffrey S. Bucholtz, Acting Assistant Attorney General; Jeanne E. Davidson, Director;
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice (Sean M. Dunn); and Office of Chief Counsel for Import
Administration, 	U.S. 	Department 	of 	Commerce 	(William 	G. 	Isasi), 	of 	counsel, 	for
Defendant.
Trade Pacific, PLLC (Robert G. Gosselink), for Defendant-Intervenor Since Hardware
(Guangzhou) Co., Ltd.
Gordon, Judge: 	This consolidated action arises from the first administrative
review of the antidumping duty order covering floor-standing, metal-top ironing tables
from the People’s Republic of China. 	See Floor-Standing, Metal-Top Ironing Tables
and Certain Parts Thereof from the People’s Republic of China, 72 Fed. Reg. 13,239
(Dep’t Commerce Mar. 21, 2007) (final results and partial rescission) (“Final Results”),
72 	Fed. 	Reg. 	19,689 	(Dep’t 	Commerce 	Apr. 	19, 	2007) 	(amended 	final 	results)
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(“Amended Final Results”). 	Home Products International, Inc. (“Home Products”) and
Since Hardware (Guangzhou) Co., Ltd. (“Respondent”) each move for judgment on the
agency record pursuant to USCIT R. 56.2, challenging the Final Results and Amended
Final Results. 	The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the
Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2000),1 and 28 U.S.C.
§ 1581(c) (2000).
I. Standard of Review
For 	administrative 	reviews 	of 	antidumping 	duty 	orders, 	the 	court 	sustains
determinations, 	findings, 	or 	conclusions 	of 	the 	U.S. 	Department 	of 	Commerce
(“Commerce”) unless they are “unsupported by substantial evidence on the record, or
otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically,
when reviewing whether Commerce's actions are unsupported by substantial evidence,
the court assesses whether the agency action is “unreasonable” given the record as a
whole. 	Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006);
see also Dorbest Ltd. v. United States, 30 CIT __, __, 462 F. Supp. 2d 1262, 1269
(2006) (explaining the standard of review in the nonmarket economy context).
II. Discussion
1. Respondent’s Carriage Inward Expenses
In 	the 	Final 	Results 	Commerce 	excluded 	Respondent’s 	carriage 	inward
expenses from its general expenses in the surrogate financial ratio component of
normal value. 	Respondent explains that Commerce’s practice is to treat transportation
1 Further citations to the Tariff Act of 1930 are to the relevant provisions of Title 19 of the
U.S. Code, 2000 edition.
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expenses related to raw materials as a general expense, and that the administrative
record makes clear that its carriage inward expenses are, in fact, related to raw
materials and not finished goods. 	Commerce agrees and requests a voluntary remand
to reconsider its treatment of Respondent’s carriage inward expenses, which the court
will grant.
2. Respondent’s Input Purchases from Market Economy
Supplier Owned by Nonmarket Economy Entities
During the administrative review Commerce developed a new methodology to
evaluate the reliability of Respondent’s input purchases paid to a supplier located in a
market economy but substantially owned by nonmarket economy entities. 	Commerce
established a benchmark of international market prices derived from annualized export
statistics and then compared Respondent’s input purchases against the benchmark.
The average price of Respondent’s hot-rolled steel inputs was above the benchmark,
and 	Commerce 	concluded 	that 	the 	prices 	paid 	for 	these 	inputs 	reflected 	market
economy principles and were 	therefore reliable. 	The average purchase price of
Respondent’s cold-rolled steel inputs was below the benchmark, leading Commerce to
conclude that the prices paid for these inputs did not reflect market economy principles.
As a result, Commerce derived a surrogate value for the cold-rolled steel inputs rather
than use Respondent’s actual purchase price.
Respondent and Home Products challenge Commerce’s methodology. 	Since
Hardware’s Mem. of P. & A. in Supp. of Mot. for J. on Agency R. at 10-21; Home
Products’ Br. in Supp. of Mot. for J. on Agency R. at 31-36. 	Commerce acknowledges
that interested parties did not have an opportunity to comment upon the benchmark
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information prior to the Final Results as required by 19 U.S.C. § 1677m(g). 	Commerce
also notes that it would like to consider interested parties’ comments on the new
methodology. 	Commerce therefore requests a voluntary remand, which the court will
grant.
3. Inclusion of Foshan Shunde Yongjian in the Administrative Review
During 	the 	administrative 	proceeding 	Commerce 	reviewed 	Foshan 	Shunde
Yongjian Housewares & Hardware Co., Ltd. (“Foshan Shunde Yongjian”). 	Home
Products argues that Commerce’s review of Foshan Shunde Yongjian violated the plain
text of 19 U.S.C. § 1675(a), which according to Home Products prohibits Commerce
from reviewing a company for which no review is requested. 	Home Products’ Br. in
Supp. of Mot. for J. on Agency R. at 18. 	This argument assumes a factual predicate
that Foshan Shunde Yongjian never requested a review, an assumption that is not
supported by the administrative record.
The record reveals that counsel for Shunde Yongjian Housewares Co., Ltd.
(“Shunde Yongjian”) requested an administrative review of Shunde Yongjian. 	See
Letter 	dated 	Aug. 	26, 	2005 	from 	counsel 	for 	Shunde 	Yongjian 	to 	Secretary 	of
Commerce Carlos M. Gutierrez (Pub. R. at 4.)2 A few days later the same counsel
clarified that it was also requesting an administrative 	review for Foshan Shunde
Yongjian. Counsel stated:
We clarify that our review request for Shunde Yongjian Housewares Co.
Ltd. (“Yongjian”) should also include a variation of the company name that
may have been used to export subject merchandise during the [period of
2 The public version of the administrative record is cited as “Pub. R.”
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review]. The variation is as follows: Foshan Shunde Yongjian Houseware
& Hardware Co., Ltd.
Letter dated Aug. 31, 2005 from counsel for Foshan Shunde Yongjian to the Secretary
of Commerce Carlos M. Gutierrez (Pub. R. at 6). 	In response to these requests,
Commerce initiated an administrative review for, among others, “Shunde Yongjian
Housewares Co., Ltd. (aka Foshan Shunde Yongjian Houseware & Hardware Co.,
Ltd.).” 	Initiation of Antidumping and Countervailing Duty Administrative Reviews and
Request for Revocation in Part, 70 Fed. Reg. 56,631, 56,633 (Dep’t Commerce Sept.
28, 	2005). 	Counsel’s 	review 	request 	may 	have 	been 	somewhat 	imprecise, 	but
thereafter, and at Home Products’ insistence, Commerce resolved whatever confusion
surrounded the request. 	Commerce asked counsel to confirm that it intended Foshan
Shunde Yongian to be reviewed. 	Supplemental Questionnaire for Shunde Yongjian
Housewares Co., Ltd. (aka Foshan Shunde Yongjian Houseware & Hardware Co., Ltd.)
at 1 (Feb. 14, 2006) (Pub. R. at 66). 	Counsel responded that it did. 	Supplemental
Questionnaire Resp. at 2-4 (Feb. 28, 2006) (Pub. R. at 70). 	Commerce credited this
response by reviewing Foshan Shunde Yongjian, and calculating a company-specific
dumping 	margin. 	Final 	Results, 	72 	Fed. 	Reg. 	at 	13,241; 	Issues 	and 	Decision
Memorandum for the Final Results in the First Administrative Review of Floor-Standing,
Metal-Top Ironing Tables and Certain Parts Thereof from the People’s Republic of
China, 	at 	Comment 	8, 	A-570-888 	(Mar. 	12, 	2007), 	available 	at
http://ia.ita.doc.gov/frn/summary/prc/E7-5170-1.pdf (“Issues & Decision Memo”).
Home 	Products 	contends 	that 	Commerce 	never 	explained 	its 	reasons 	for
reviewing Foshan Shunde Yongjian and that a remand is therefore necessary. 	Home
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Products’ Br. in Supp. of Mot. for J. on Agency R. at 18. 	The court does not agree that
a 	remand 	is 	necessary 	or 	appropriate 	because 	the 	agency’s 	decisional 	path 	is
reasonably discernable from the administrative record. 	See Bowman Transp., Inc. v.
Arkansas-Best Freight Sys. Inc., 419 U.S. 281, 285-86 (1974) (a court may "uphold a
decision of less than ideal clarity if the agency's path may reasonably be discerned.");
Wheatland Tube Co. v. United States, 161 F.3d 1365, 1369-70 (Fed. Cir. 1998). 	As
explained above, Commerce asked counsel for Foshan Shunde Yongjian to clarify
whether it intended to request a review for Foshan Shunde Yongjian. 	After reviewing
counsel’s response, Commerce had two choices: (1) rescind the review or (2) continue
to review Foshan Shunde Yongjian and calculate a company-specific rate. 	Commerce
opted for the latter, thereby crediting counsel’s explanation. 	No further rationale or
explanation from Commerce was necessary.
For whatever reason, Home Products has not challenged the reasonableness
(whether it was unsupported by substantial evidence) of Commerce’s acceptance of
Foshan Shunde Yongjian’s review request. 	Instead, Home Products assumes, albeit
incorrectly, that there was no administrative review request. 	Relying on the incorrect
factual predicate, Home Products then makes a straight legal argument that the plain
text of 19 U.S.C. § 1675(a) mandates only one result: rescission of Foshan Shunde
Yongjian’s review. 	Home Products’ argument fails because Foshan Shunde Yongjian
did in fact request a review.
As for Home Products’ interpretation of section 1675(a), the court simply notes
that 	the 	statute 	does 	not 	prescribe 	any 	particular 	method 	for 	requesting 	an
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administrative 	review. 	Congress 	left 	such 	procedural 	matters 	to 	be 	defined 	by
Commerce. 	By regulation Commerce has defined time limits for administrative review
requests by exporters or producers (which must be within the anniversary month of the
order), but has not defined any particular form of request other that it be in writing from
the particular exporter or producer making the request. 	See 19 C.F.R. § 351.213(b)(2)
(2005). 	Therefore, the question of what constitutes a sufficient administrative review
request remains within Commerce’s discretion to be sorted out on a case by case basis.
It suffices to say that in this case Commerce did not abuse its discretion in accepting
Foshan Shunde Yongjian’s administrative review request.
4. Commerce’s Selection of Financial Statements
During the administrative review Commerce had a choice among several Indian
financial statements to calculate surrogate financial ratios. 	Commerce’s choice is
guided by a general regulatory preference for publicly available information. 	19 C.F.R.
§ 351.408(c)(4) (2005). 	Beyond that, “Commerce generally considers the quality,
specificity, and contemporaneity of the available financial statements.” 	Dorbest Ltd.,
30 CIT at __, 462 F. Supp. 2d at 1301 (citing Fresh Garlic from the People’s Republic of
China, 67 Fed. Reg. 72,139 (Dep’t Commerce Dec. 4, 2002) (final results new shipper
review)); see also Issues & Decision Memo at 6.
Commerce ultimately settled on the financial statement of Infiniti Modules Pvt.
Ltd. 	(“Infiniti 	Modules”) 	because 	it 	was 	“wholly 	publicly 	available” 	as 	well 	as
“contemporaneous and complete, and most closely reflect[ed] merchandise comparable
to ironing tables.” 	Issues & Decision Memo at 6. 	Commerce explained that it did not
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utilize the financial statement of another company, Agew Steel Manufacturers Private
Limited (“Agew Steel”), because a portion of its financial statement—the profit and loss
statement—was not publicly available and therefore was not on the record of the
review. Id.
Home Products argues that Commerce should have used Agew Steel’s financial
statement 	and 	that 	Commerce’s 	selection 	of 	the 	Infiniti 	Modules 	statement 	was
unreasonable. Properly framed, the question for the court is whether a reasonable mind
could conclude that Commerce chose the best available information after conducting a
fair 	comparison 	of 	the 	financial 	statements 	by 	measuring 	their 	relative 	quality,
specificity, and contemporaneity against a regulatory preference for publicly available
information. 	See Dorbest Ltd., 30 CIT at __, 462 F. Supp. 2d at 1269 (explaining court
evaluation of substantial evidence challenges to Commerce’s choice of data sets as
best available information).
As noted above, Commerce found that the Infiniti Modules financial statement
was “wholly publicly available,” whereas the Agew Steel financial statement was not.
Issues & Decision Memo at 6. 	Commerce also found that the Infiniti Modules financial
statement 	was 	“contemporaneous 	and 	complete, 	and 	most 	closely 	reflect[ed]
merchandise comparable to ironing tables.” Id. Home Products argues that there is “no
substantive quantitative difference” or “qualitative difference” between the Agew Steel
and 	Infiniti 	Modules 	financial 	statements, 	and 	that 	Commerce 	therefore 	erred 	in
selecting the Agew Steel Financial Statement. 	Home Products’ Br. in Supp. of Mot. for
J. on Agency R. at 27-28 (emphasis removed). 	If there is no quantitative or qualitative
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difference between the two statements, and one is completely publicly available and the
other is not (missing a profit and loss statement), then Commerce’s choice of a
complete, publicly available financial statement consistent with its regulatory preference
is, in the court’s view, not only reasonable, but correct.
III. Conclusion
Commerce's 	request 	for 	a 	voluntary 	remand 	regarding 	the 	treatment 	of
Respondent’s 	carriage 	inward 	expenses 	is 	granted. 	Commerce's 	request 	for 	a
voluntary remand to reconsider its methodology for evaluating certain of Respondent’s
market economy input purchases from a nonmarket economy-owned supplier and to
allow parties an opportunity to comment upon information related to this methodology is
also granted. 	Home Products’ motion for judgment on the agency record regarding
(1) Commerce’s inclusion of Foshan Shunde Yongjian in the administrative review; and
(2) Commerce’s choice of the Infiniti Modules financial statement rather than the Agew
Steel financial statement is denied.
Accordingly, it is hereby
ORDERED that this action is remanded to the U.S. Department of Commerce to:
(1) Reconsider 	its 	treatment 	of 	Respondent’s 	carriage 	inward
expenses; and
(2) Reconsider 	its 	methodology 	for 	evaluating 	certain 	of
Respondent’s 	market 	economy 	input 	purchases 	from 	a
nonmarket economy-owned supplier and to allow parties an
opportunity 	to 	comment 	upon 	information 	related 	to 	this
methodology; and it is further
ORDERED that the U.S. Department of Commerce is to file its remand results on
or before June 5, 2008; and it is further
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ORDERED that the parties are to file a proposed scheduling order on or before
June 12, 2008, for the submission of comments with page limits on the remand results.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: 	April 7, 2008
New York, New York
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NOTICE OF ENTRY AND SERVICE
This is a notice that an order or judgment was entered in the docket of this action,
and was served upon the parties on the date shown below.
Service was made by depositing a copy of this order or judgment, together with any
papers required by USCIT Rule 79(c), in a securely closed envelope, proper postage
attached, in a United States mail receptacle at One Federal Plaza, New York, New York
10278 and addressed to the attorney of record for each party at the address on the official
docket in this action, except that service upon the United States was made by personally
delivering a copy to the Attorney-In-Charge, International Trade Field Office, Civil Division,
United States Department of Justice, 26 Federal Plaza, New York, New York 10278 or to
a clerical employee designated, by the Attorney-In-Charge in a writing filed with the clerk
of the court.
or
Service was made electronically, by the Court’s CM/ECF system, upon those parties
that have filed a Notice of Consent to Electronic Service.
Tina Potuto Kimble
Clerk of the Court
Date: __________________________ 	By: _____________________________
Deputy Clerk
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