Tennessee Court Says Importer Didn't Show Exporter's Failure to Certify COO Violated Deal

The U.S. District Court for the Middle District of Tennessee ruled that importer Cabinets to Go didn't demonstrate that Chinese manufacturer Haiyan's failure to certify its products' country of origin violated any material term of an agreement between the two companies (Cabinets to Go v. Qingdao Haiyan Real Estate Group Co., M.D. Tenn. # 3:21-00711).

Rejecting Cabinets to Go's motion for judgment in an Aug. 7 opinion, Judge Waverly Crenshaw said that Cabinets to Go didn't show that the "absence of a genuine dispute of material fact" concerning whether certification of the goods' country of origin was needed as part of any agreement or warranty between the importer and Haiyan. The case will now head to trial.

Haiyan and Cabinets to Go began doing business together in 2011, though the U.S. began imposing antidumping and countervailing duties on Chinese cabinets in 2019. In response, Cabinets to Go stopped buying Chinese cabinets, telling Haiyan that "a material term of any agreement" for the company to buy Haiyan's goods was that they could not be made in China. The importer began buying various product lines from Haiyan's newly acquired mill in Malaysia. The company bought over $700,000 worth of goods from Haiyan every month.

In 2021, Cabinets to Go inspectors at the mill found evidence that allegedly shows that goods in 13 shipping containers were made in China. Haiyan said it could not certify whether the goods had been made in China or not. Cabinets to Go imported the goods, declared they were made in China and paid an additional $931,526 in tariffs and related costs in the process. The importer sued Haiyan, claiming the exporter breached their contract by misrepresenting the COO of the cabinets.

The Tennessee court rejected Cabinets to Go's claim for judgment. The importer said the only material term of the contract references the goods' COO, and it said the products had to be made outside of China. The judge said the difference between a failure to certify a product's COO and failure to supply products made in a specific country "is self-evident." Without more evidence, the question of whether Haiyan needed to certify the COO of the goods "persists," the judge said.