Commerce's Assumptions Hinge on Faulty Reasoning, Mattress Importer Argues at CIT

Commerce’s remand results involving the inclusion of in-transit mattresses in its quarterly ratio calculation did not satisfy a remand order by the Court of International Trade, antidumping duty respondent Zinus Indonesia said in its Aug. 8 remand comments. The court should remand the matter to Commerce to recalculate Zinus' dumping margin without including the mattresses in-transit, Zinus said (PT. Zinus Global Indonesia v. U.S., CIT # 21-00277).

The agency's decision not to change its margin calculations for Zinus in its June 9 remand results (see 2306120060) rests on two "unsupported" assumptions, the company said. First, that Zinus U.S. "could have sold mattresses out of U.S. inventory before the merchandise enters the United States." Second, that Zinus U.S. had no inventory at the beginning of the 2019 period of investigation (POI), the company said, noting that Commerce never asked Zinus for the quantity of mattresses in inventory.

"Rather than reach the reasonable and logical conclusion" that Zinus had the relevant types of mattresses sold during the POI in inventory at the start of the POI, Commerce concluded that mattresses still en route to the U.S. were sold from U.S. inventory during the POI, Zinus said. "At a most basic level, this is inconsistent with the obvious fact that merchandise cannot be sold out of U.S. inventory before it enters U.S. inventory."

In the remand results, Commerce said there was a lack of evidence that disproved its theories. "In doing so, Commerce turns the substantial record evidence standard on its head ... sustaining Commerce's remand would result in Commerce not needing to support its decisions with substantial evidence," the company argued. Despite all available information on the record, Commerce told the court it "perceives a gap in the record and it has decided to fill that gap with an assumption unfavorable to Zinus," Zinus said.

In their own set of remand comments, defendant-intervenors and plaintiffs in a companion case, led by Brooklyn Bedding, said the redetermination failed to comply with the CIT's instructions to explain its departure from prior practice concerning the transactions disregarded rule. On remand, Commerce continued to ignore evidence showing that Zinus failed to report all of Zinus Korea’s selling expenses associated with sales of subject merchandise in the U.S., Brooklyn Bedding said.

Zinus’ questionnaire responses showed that Zinus Korea, its parent company, "played a role in every sale Zinus made to the United States," Brooklyn said. The claim Zinus Korea was the entity making sales to an unaffiliated U.S. customer but not incurring any expenses for sales staff or administrative overhead "simply does not make commercial sense," the company said. Rather than critically evaluating Zinus' statements, Commerce simply "doubles-down on its faulty reasoning, effectively arguing that Zinus Korea did not incur any expenses because Zinus said it did not."