CHANGZHOU HAWD FLOORING CO., LTD., DUNHUA CITY DEXIN WOOD INDUSTRY CO., LTD., DALIAN HUILONG WOODEN PRODUCTS CO., LTD., KUNSHAN YINGYI-NATURE WOOD INDUSTRY CO., LTD., KARLY WOOD PRODUCT LIMITED, Plaintiffs-Appellants
UNITED STATES, Defendant-Appellee DUNHUA CITY JISEN WOOD INDUSTRY CO., LTD., FINE FURNITURE (SHANGHAI) LIMITED, ARMSTRONG WOOD PRODUCTS (KUNSHAN) CO., LTD. Plaintiffs-Cross-Appellees LUMBER LIQUIDATORS SERVICES, LLC, HOME LEGEND, LLC Plaintiffs COALITION FOR AMERICAN HARDWOOD PARITY, Defendant-Cross-Appellant
Appeals from the United States Court of International Trade
in No. 1:12-cv-00020-LMG, Senior Judge Leo M. Gordon.
Gregory S. Menegaz, DeKieffer & Horgan, PLLC, Washington,
DC, argued for plaintiffs-appellants and for
plaintiff-cross-appellee Dunhua City Jisen Wood Industry Co.,
Ltd. Also represented by James Kevin Horgan, Alexandra H.
Cramer, Mowry & Grimson, PLLC, Washington, DC, argued for
plaintiff-cross-appellee Fine Furniture (Shanghai) Limited.
Also represented by Kristin Heim Mowry, Bryan Cenko, Jeffrey
S. Grimson, Sarah M. Wyss, James Beaty.
Deen Kaplan, Hogan Lovells U.S. LLP, Washington, DC, for
plaintiff-cross-appellee Armstrong Wood Products (Kunshan)
Co., Ltd. Also represented by Craig A. Lewis.
Claudia Burke, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, DC, argued
for defendant-appellee. Also represented by Joseph H. Hunt,
Jeanne Davidson; Mercedes Morno, Office of the Chief Counsel
for Trade Enforcement and Compliance, United States
Department of Commerce, Washington, DC.
Timothy C. Brightbill, Wiley Rein, LLP, Washington, DC,
argued for defendant-cross-appellant. Also represented by
Stephanie Manaker Bell, Tessa V. Capeloto, Jeffrey Owen
Frank, Maureen E. Thorson.
Moore, Taranto, and Chen, Circuit Judges.
TARANTO, CIRCUIT JUDGE.
appeals involve the United States Department of
Commerce's investigation, under 19 U.S.C. §§
1673-1673h, of dumping into the United States of multilayered
wood flooring from the People's Republic of China (the
"subject merchandise" or "merchandise").
The investigation was before us in Changzhou Hawd
Flooring Co. v. United States, 848 F.3d 1006 (Fed. Cir.
2017) (Changzhou CAFC 2017). Commerce individually
investigated the dumping margins of three firms-the largest
exporters of the subject merchandise by volume. Id.
at 1009. Commerce also identified what the parties have
called "separate-rate firms"-Chinese exporters and
producers whose dumping margins Commerce did not individually
investigate but that Commerce found to be independent from
the government of China (a nonmarket economy) and so should
be assigned an antidumping-duty rate separate from the
"China-wide rate" ultimately assigned to firms
lacking such independence. Id. Two subsets of such
(non-individually investigated) separate-rate firms are
before us: appellants, which did not even ask Commerce for
individual review of their dumping margins; and
cross-appellees ("voluntary-review firms"), which
asked Commerce for such review but were denied. Before us are
questions about Commerce's ultimate treatment of those
two subsets of separate-rate firms.
eventually found dumping and issued an antidumping duty order
for the merchandise under 19 U.S.C. §§ 1673d(c)(2),
1673e. It is undisputed that Commerce properly decided not to
terminate the investigation, but instead to issue an order,
upon finding a non-de minimis positive dumping
margin for the exporters and producers that were part of the
China-wide entity, even though Commerce also found,
ultimately, that all three individually investigated firms
had zero dumping margins and freed those firms from further
obligations relating to the order. It is also undisputed
before us that Commerce properly applied the zero rate for
the three individually investigated firms to the
non-individually investigated separate-rate firms.
disputed is Commerce's decision not to free the
non-individually investigated separate-rate firms from all
obligations accompanying issuance of the order. Specifically,
Commerce ruled that, although (because of the zero rate) such
firms' merchandise initially would not be subject to cash
deposits upon entry, the merchandise would remain subject to
other obligations-notably, suspension of liquidation of
entries, with the ultimate duty to be determined later,
generally in an administrative review under 19 U.S.C. §
1675, in which such firms would have to participate and in
which the duty might increase above the de minimis
level, thereafter requiring cash deposits. The appeal and
cross-appeal before us involve disputes about that ruling,
which the parties have referred to as disputes about
"including" these firms within "the
order" (or keeping them "subject to" it)
versus "excluding" them from it-terminology we will
Commerce's ruling was challenged before the Court of
International Trade (Trade Court), that court affirmed in
part and reversed in part. It affirmed inclusion of
appellants in the order, but it held that Commerce had not
justified inclusion of the voluntary-review firms in the
order. Changzhou Hawd Flooring Co. v. United States,
324 F.Supp.3d 1317, 1321 (Ct. Int'l Trade 2018)
(Changzhou CIT 2018). Appellants challenge the first
of those holdings, while a domestic industry coalition
(cross-appellant) challenges the second of those holdings
(which cross-appellees defend). We affirm the judgment of the
Changzhou CAFC 2017, we ordered a remand for
Commerce to reconsider whether there was an adequate reason
for assigning the non-individually investigated separate-rate
firms a rate different from the zero rate Commerce had
assigned to the individually investigated firms. 848 F.3d at
1012-13. Acting pursuant to our remand, Commerce determined
that there was no such reason and therefore assigned a zero
rate to the non-individually investigated separate-rate
firms. Final Results of Redetermination Pursuant to Court
Order, at 8 (issued Feb. 15, 2017) (Redetermination);
J.A. 453. That determination is not challenged now. But
Commerce also ruled that those firms should be kept subject
to, not excluded from, the order. Re-determination at 10-14,
19-27; J.A. 455-59, 464-72. That ruling is now before us.
support of the no-exclusion ruling, Commerce reasoned
"that there is generally a key distinction in the
statutory scheme between" two groups of producers and
exporters: those "who have been individually
investigated and which receive individual weighted average
dumping margins that are zero or de minimis";
and those "who have not been individually investigated,
and are, therefore, subject to the all others rate, which is
based upon the individual weighted-average dumping margins
which are zero or de minimis." Redetermination
at 11; J.A. 456. Commerce also relied on a regulation,
adopted to implement the Uruguay Round Agreements Act, Pub.
L. No. 103-465, 108 Stat. 4809 (1994), that says that
Commerce "will exclude from an affirmative final
determination . . . any exporter or producer for which
[Commerce] determines an individual weighted-average
dumping margin . . . of zero or de minimis." 19
C.F.R. § 351.204(e)(1) (emphasis added); see
Redetermination at 12-13; J.A. 457-58 (also relying on
Commerce's explanations in promulgating the regulation in
1996-1997). Commerce further stated its policy judgment
supporting its position: "policy considerations weigh in
favor of treating exclusion as an extraordinary measure, and
one that should only be available in limited circumstances to
companies that have been subject to individual investigation
and all that entails (i.e., providing full and
complete questionnaire responses, cooperating with the
Department, subject to verification, etc.)."
Redetermination at 25; J.A. 470. Finally, while noting that
firms can ask to be individually investigated as voluntary
respondents, Redetermination at 13; J.A. 458, Commerce
declared, without further policy explanation, that its
position-"that companies that have not been individually
examined are not eligible for exclusion" from an
order-applies even to a firm that "requested to be a
voluntary respondent" and supplied "full
questionnaire responses" in the investigation,
Redetermination at 24, 16; J.A. 469, 461.
Trade Court reviewed Commerce's ruling in cases properly
brought to it under 19 U.S.C. § 1516a and 28 U.S.C.
§ 1581(c). The court generally upheld Commerce's
decision to keep subject to the antidumping order those
separate-rate firms with a zero rate that were not
individually investigated. Changzhou CIT 2018, 324
F.Supp.3d at 1321. The Trade Court concluded that the
statutory scheme does not unambiguously resolve this
exclusion issue and that Commerce's policy requiring
individual examination before exclusion was generally
reasonable and was not at odds with the statutory framework.
Id. at 1325-26. But the Trade Court drew a different
conclusion as to one subset of separate-rate firms with a
zero rate: the voluntary-review firms. The court concluded
that Commerce had not adequately justified keeping under the
order a zero-rate firm that had supplied full questionnaire
responses and sought, but was denied, the opportunity to
provide evidence that it was not engaged in dumping.
Id. at 1326-27. On that basis, the Trade Court
reversed the denial of exclusion as to voluntary-review firms
before it. Id.
appeal the Trade Court's upholding of their continuing
inclusion in the antidumping duty order. Cross-appellant
Coalition for American Hardwood Parity cross-appeals the
Trade Court's judgment requiring exclusion of the
voluntary-review firms on the present record. Commerce has
not taken a position on the voluntary-review-firm issue