Trade Courts Update for Week of April 27, 2016

United States Court of International Trade


Court Denied Plaintiff’s Motion for Summary Judgment

In Suntec Industries Co., Ltd. v. United States and Mid Continent Nail Coporation, Court No. 13-157, Slip Op. 16-40 (April 22, 2016) Suntec Industries Co., Ltd. (“Suntec”) repeatedly argued that it did not have actual notice of the third administrative review until March 9, 2013 after an importer notified it by email of the release of the Certain Steel Nails from the People’s Republic of China; Final Results of Third Antidumping Administrative Review; 2010-2011, 78 Fed. Reg. 16651 (Mar. 18, 2013) (“AR3 Final”) naming Suntec as subject to the PRC-wide rate. This matter was before the court on the plaintiff’s motion for summary judgment and the defendant’s cross-motion for judgment on the agency record or, in the alternative, summary judgment, regarding AR3 Final that such results be rescinded as to Suntec.  

Yet, Suntec had constructive notice of the review as of the date of publication of the Notice of Initiation (i.e., Oct. 3, 2011). Suntec I, 37 CIT at ___, 951 F. Supp. 2d at 1350-52.  Because of this constructive notice, Suntec was asked to demonstrate how it was substantially prejudiced during the 34-day delay in notification.  However Suntec presented little in evidence that it was prejudiced.  First it argued that it lost substantial preparation time to present its case or defend its interest.  Second, it argued that it lost is separate rate status when it was included in the China-wide rate. However, the court found that any harm apparently accruing to Suntec because of its failure to participate in the review or to present evidence related to separate rate status did not result from the lack of notice during the aforementioned 34-day delay, because it was aware that it had 60 days from the Notice of Initiation to file the necessary certifications. Because Suntec has not shown how it was prejudiced, by the 34-day delay, the court denied plaintiff’s motion for summary judgment and granted defendant’s motion for summary judgment.


U.S. Court of Appeals for the Federal Circuit

Federal Circuit Affirmed CIT Decision to Sustain Commerce Decision on Steel Threaded Rod

In Jiaxing Brother Fastener Co., Ltd.  v. United States, Court No. 2015-1161 (April 21, 2016) appellants appealed from a decision of the U.S. Court of International Trade where it affirmed a U.S. Department of Commerce (“Commerce”)  determination to select Thailand as the surrogate country for China in the second administrative review of an antidumping duty order on certain steel threaded rod from China.   According to the Federal Circuit, Commerce’s decision to use surrogate values from Thailand to value certain factors of production in calculating normal value for the subject merchandise was in accordance with law, and was not arbitrary or capricious. Commerce considered various surrogate value data, and chose Thailand as the primary surrogate country because the Thai information on record was “complete,” allowing Commerce to value material inputs, energy, movement expenses, and financial ratios.

According to the Court, nothing in the antidumping duty statute requires a particular country like India, even it has previously been applied as a surrogate, to be considered as the primary surrogate country for the steel threaded rod reviews. Moreover, Commerce provided a reasoned analysis for using the Thai information.  Commerce used the Thai data over the Philippine information, because only three of the financial statements were relevant where the one company produced steel wire mesh not drawn from wire rod. Likewise, Capital Engineering Network Public Company Limited (“CEN”), a Thai company, drew close to 50% of its income from wire industries, and presented financial ratios similar to Jiaxing.  Despite appellant’s claims, there was no record evidence that CEN received any concessionary tax treatment that would skew data or that the CEN statements were interpreted incorrectly.  Finally, Commerce’s decision to emphasize the steel inputwhich was the main input of the subject merchandise, was reasonable and supported by substantial evidence, and there was no error in using the Thai imports to value HCl. For all these reasons, the Federal Circuit affirmed the lower court’s decision to sustain Commerce’s determination.



Furniture Retailer to Pay $15 Million to Settle Dumping Fraud Allegations

Z Gallerie, LLC, a California-based importer and retailer of furniture, will pay $15 million to settle charges that it evaded antidumping duties on imports of Wooden Bedroom Furniture from China, the United States Department of Justice announced.

The settlement resulted from a whistleblower suit filed under the False Claims Act by Kitty Wells, an online furniture retailer. The case charges that, from 2007 through 2014, Z Gallerie evaded antidumping duties by falsely describing bedroom furniture as non-bedroom articles, on invoices submitted to Customs and Border Protection at the Port of Atlanta.  The Department of Justice took up the complaint, and the importer agreed to pay $15 million in restored duties and penalties. Of that amount, $2.4 million will be paid as compensation to the whistleblower who brought the allegations.