CIT Again Faults China Wooden Bedroom Furniture Scope Inclusion

The Court of International Trade again remanded an International Trade Administration determination that Legacy Classic Furniture’s furniture that simultaneously functions as a seating bench and a storage unit is subject to the antidumping duty order on wooden bedroom furniture from China (A-570-890). This time, CIT not only ruled against the ITA’s determination that other factors supported inclusion under the AD order, as it did in the first remand, but also questioned whether the ITA should have even examined those factors in light of its reconsideration of whether the scope language was ambiguous.

At issue in this case is Legacy’s Heritage Court Bench, a backless wooden seating bench measuring 50 inches wide by 19 inches deep. The top of the bench is padded leather, is attached by hinges to the base, and has a cedar-lined interior storage area. As such, the bench also functions as a storage unit. Importantly, the item is advertised by Legacy as “seating.” While the item is listed on Legacy’s website under two tabs labeled “seating” and “bedroom,” it is not listed under the tab “bedroom chests,” but instead under “bedroom seating.” The scope of the wooden bedroom furniture order includes specified chests but specifically excludes all seating furniture, including benches.

In its first opinion, issued Dec. 15, 2011, CIT said the ITA correctly determined that the scope language of the wooden bedroom furniture order is ambiguous as to whether it includes the Heritage Court Bench. Under 19 CFR 351.225(k)(2), if the scope language is ambiguous, the ITA will consider other factors, including: (i) the physical characteristics of the product; (ii) the expectations of the ultimate purchasers; (iii) the ultimate use of the product; (iv) the channels of trade in which the product is sold; and (v) the manner in which the product is advertised and displayed. CIT found fault with the ITA’s determinations regarding these “(k)(2)” factors, however, and remanded.

In this second hearing, CIT found the ITA’s remand results “merely regurgitated its original conclusions from the final scope ruling without the requisite ‘reasoned analysis or explanation for [its] decision.’” According to CIT, the remand results were based on conjecture and assumption, not record evidence. The ITA said evidence regarding (k)(2) factors was ambiguous, but CIT found that in many cases it was not. For example, the way the product was advertised on Legacy’s website was ignored by the ITA, but could have been a determinative factor in examining expectations of ultimate purchasers, ultimate uses, channels of trade, and in particular the manner in which the product is advertised and displayed.

However, in an about-face from its first decision, CIT also reconsidered its decision to sustain the ITA’s determination that the scope language itself was ambiguous. After its reexamination, CIT said it was no longer convinced that the scope was ambiguous and that the ITA should have resorted to the (k)(2) factors.

CIT noted that the scope contains language that excluding seating furniture that explicitly excludes benches, as well as a footnote specifically including chests. In its first ruling, CIT said the product had characteristics of both a chest and a bench, rendering the scope ambiguous. Upon reconsideration, however, CIT said that “while arguably falling under a residual definition of a chest within the general scope language, the Heritage Court Bench is unambiguously a bench or seating furniture as listed in the scope exclusions.

The scope language that includes chests says “a chest is typically a case piece taller than it is wide… that …can either include drawers or be designed as a large box incorporating a lid.” CIT said Legacy’s product is instead wider than it is tall, and that the lid is actually a padded leather bench designed as seating furniture. The scope’s unqualified statement that all seating furniture is excluded trumps the qualified statement that chests are, said CIT.

In remanding both the (k)(1) determination of ambiguity and the (k)(2) determination on other factors, CIT essentially sent the entire scope determination back to the ITA for further explanation.

(See ITT’s Online Archives 11121905 for summary of CIT’s first remand.)

(Legacy Classic Furniture, Inc. v. United States, CIT Slip Op. 12-121, dated Sept. 19, Judge Carman.)

(Attorneys: Mark Pardo of Grunfeld Desiderio for plaintiff Legacy; Douglas Edelschick for defendant U.S. government)