CVD Respondent Selection Process Should Not Look Like 'Russian Roulette,' Plaintiffs Argue

The Commerce Department's mandatory respondent selection process in a countervailing duty case on wood flooring resembled "Russian roulette" due to fundamental errors in the CBP data used to make the respondent picks, plaintiffs in a case at the Court of International Trade said in four briefs (Jiangsu Senmao Bamboo and Wood Industry Co., Ltd., et al. v. United States, CIT Consol. #20-03885).

The dispute arises from Commerce's 2017 CV duty administrative review on multilayered wood flooring from China. In the review, Commerce allegedly used faulty CBP data to pick Baroque Timber Industries and Jiangsu Guyu as the mandatory respondents since they were the two largest exporters of multilayered wood flooring. While not contesting Baroque Timber's selection, the plaintiffs took issue with Guyu's presence as a mandatory respondent. After consolidating cases challenging the review in CIT, the proceedings involve 30 plaintiffs. The plaintiffs moved for judgment in May, challenging the respondent selection process, among other things (see 2105170029).

In replying to the motions for judgment, the petitioner in the case, the American Manufacturers of Multilayered Wood Flooring (AMMWF), said that the plaintiffs do not argue that Guyu was not in fact unrepresentative of Chinese producers and exporters of the wood flooring.

"Whether Guyu is representative becomes irrelevant when the process of selecting it as representative is fundamentally flawed at the outset," eight of the plaintiffs said in one brief. "Respondent selection should not resemble 'Russian roulette' when the statute directs the agency to select 'exporters and producers accounting for the largest volume of the subject merchandise from the exporting country that can be reasonably examined' unless it is doing sampling [as opposed to largest producers]."

Both the Department of Justice and AMMWF also claimed that no party gave evidence that the CBP data was faulty. This is not true, the plaintiffs responded. "This claim also completely misses the forest for the trees (while missing the trees too)," one of the briefs said. "CBP data is confidential by its nature and Commerce treats it as such. The public does not have ready access to the particulars of CBP’s data collection for specific products and timeframe under normal circumstances, let alone within a short deadline set for comments by Commerce. ... It is akin to having one’s hand held through a maze while blindfolded," the brief said

AMMWF also argued that Guyu was in fact representative of the Chinese wood flooring industry. Another brief, filed by Fine Furniture (Shanghai) Limited and Double F Limited, posed a simple question toward this line of thinking: "How can Fine Furniture or any other party assess the representativeness of Guyu with flawed data?" The petitioner "does not explain," the brief said.

"Further, even if there were evidence that Guyu is somehow representative of the Chinese industry, that does not excuse Commerce of the obligation to rely on accurate CBP data and to account for the CBP data flaws brought to Commerce’s attention in a timely manner by numerous parties," the brief said.

The plaintiffs also litigated a host of remaining issues in the case, including Commerce's application of adverse facts available relating to China's Export Buyer's Credit Program and the agency's inclusion of Harmonized Tariff Schedule subheading 4412.99 data in the plywood benchmark price. On the latter point, Fine Furniture argues that it concretely established that 4412.99 covers laminated wood and certified that respondent Baroque Timber does not use laminated plywood in its production of subject merchandise.