Plaintiffs in Vietnamese Lumber Case Look to Loper Bright

A number of plaintiffs in a large case opposing a scope inquiry and finding of circumvention for hardwood plywood raised Sept. 30 the new Loper Bright standard of deference. They said that the whole point of the now-defunct Chevron standard was to delegate authority to agencies in deference to agency expertise for technical issues; the U.S. can’t make the same argument now that that exact argument has been explicitly overturned, they said (Shelter Forest International Acquisition v. U.S., CIT Consol. # 23-00144).

Plaintiffs led by American Woodmark Corporation responded to opposition by the U.S. and a petitioner (see 2408220047) to their motion for judgment (see 2402020054). In their Sept. 30 filing, they said that “Commerce’s methodology to compare Vietnamese plywood production operations with an integrated operation that includes the forestry and logging industries is not only not the ‘best’ methodology, it is unreasonable.”

Commerce found that large Chinese producers were involved in the production of logs and management of forest resources in Vietnam, but the record doesn’t support this, they said, because the plywood industry doesn’t include forestry or logging.

“Commerce did not investigate any of the participating respondents as to whether they fulfilled the statutory circumvention criteria,” they claimed.

They also attacked the department’s “surrogate value approach ... for calculating added value for purposes of determining circumvention.”

Surrogate values are supposed to be used to determine the value of products manufactured in non-market economies and compared to export prices, the plaintiffs said. But, in this case, the value-added analysis should concern “the Vietnamese producer’s actual cost of veneer from China and the additional value of the producer’s actual costs of production performed in Vietnam,” they said. And they alleged that Commerce forgot to include selling, general, and administrative costs, plus overhead expenses, in its calculation of the exporter’s costs.

Finally, the plaintiffs again attacked the department’s investigation, including its verification process, as insufficient. The arguments have been raised in prior briefings by themselves and other parties (see 2404020054).