CIT Again Remands 2007 AD Review Results in China Wooden Bedroom Furniture

The Court of International Trade found that the International Trade Administration failed to comply with the CIT’s instructions in the ITA’s remand redetermination of final results of the 2007 administrative review of wooden bedroom furniture from China (A-570-890). Specifically, the CIT found that the ITA did not reconsider or further explain the China-wide rate of 216.01% assigned to Orient International Holding Shanghai Foreign Trade Co., Ltd. or the ITA's choice of weight-based data to determine the surrogate value for wood inputs. The CIT has now remanded these issues for a second time.

ITA Directed to Select “Reasonable” AFA Rate for Orient

Plaintiff Lifestyle Enterprise Inc. challenged the ITA’s remand results on the grounds that Orient’s selected AFA rate of 216.01% violates 19 USC 1677e(c) because the ITA corroborated the rate with data that were not probative and therefore the rate is not supported by substantial evidence. The CIT found that the Adverse Facts Available (AFA) rate chosen by the ITA is an extreme outlier when viewed in light of the prior new shipper reviews, administrative reviews, and the investigation, and that Orient’s commercial reality differs significantly from the commercial reality of Kunyu¹, the company from which the rate was derived, because Kunyu was a smaller and newer company than Orient.

The CIT stated that, although Orient has placed itself in a difficult position by not cooperating, the law does not permit the ITA to impose a rate for punishment purposes and it is highly unlikely, based on the record, that the CIT could sustain a rate similar to the one the ITA assigned Orient in the remand results (i.e., the 216.01% AFA rate). Therefore, the CIT instructed the ITA to select a reasonable rate for Orient.

CIT Faults ITA’s Wood Input Surrogate Value

Defendant-intervenors American Furniture Manufacturers Committee for Legal Trade and Vaughan-Basset Furniture Company, Inc. challenged the ITA’s use of weight-based data rather than volume-based data in its valuation of wood inputs in its surrogate value calculation, on the basis that the weight-based data are significantly distorted by the presence of high-moisture content wood and packing materials.

The CIT found that the ITA has failed to support its rejection of the alternative volume-based data, and that its decision to use weight-based data in lieu of volume-based data is not based on substantial evidence. According to CIT, there are only two choices, and only the selection on volume-based data for calculation of wood inputs in surrogate value is supported.

CIT Remands Orient’s Rate, Wood Input Data to ITA for Redetermination

Therefore, the CIT has again remanded the matter to the ITA to redetermine Orient’s AFA rate. The ITA’s determination not to use certain financial statements in support of its calculations was sustained. Furthermore, unless it chooses to reopen the record to gather more evidence, the CIT directed the ITA to use the volume data set for wood inputs.

¹Shenyang Kunyu Wood Industry Co., Ltd.’s (Kunyu) AFA rate of 216.01% from a previous new shipper review was relied upon to determine the China-wide rate in the administrative review at issue.

(Slip Op. 12-45, dated 03/28/12, Judge Restani)