Slip Op. 15- 134
UNITED STATES COURT OF INTERNATIONAL TRADE
ETHAN ALLEN OPERATIONS, INC.,
Plaintiff,
ASHLEY FURNITURE INDUSTRIES, INC.,
HOME MERIDIAN INTERNATIONAL,
INC., CITY FURNITURE, INC., HOOKER
FURNITURE CORPORATION, and STEIN
WORLD OPERATING COMPANY,
Plaintiff-Intervenors,
v. Before: Jane A. Restani, Judge
UNITED STATES, Court No. 14-00147
Defendant,
AMERICAN FURNITURE
MANUFACTURERS COMMITTEE FOR
LEGAL TRADE and VAUGHAN-BASSETT
FURNITURE COMPANY, INC.,
Defendant-Intervenors.
OPINION
[Commerce’s scope determination and remand results are remanded.]
Dated: December 1, 2015
Yohai Baisburd, Dentons US LLP, of Washington, DC, argued for plaintiff. With him on
the brief were Daniel Morris, Dentons US LLP, of Washington, DC, and Gregory J. Spak, White
& Case, LLP, of Washington, DC.
Kristin H. Mowry, Daniel R. Wilson, Jeffrey S. Grimson, Jill A. Cramer, and Sarah M.
Wyss, Mowry & Grimson, PLLC, of Washington, DC for plaintiff-intervenors.
Court No. 14-00147 Page 2
Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief
were Benjamin C. Mizer, Principal Deputy Attorney General, Jeanne E. Davidson, Director, and
Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Scott D. McBride, Senior
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department
of Commerce, of Washington, DC.
J. Michael Taylor, King & Spalding, LLP, of Washington, DC, argued for defendant-
intervenors. With him on the brief were Joseph W. Dorn and Daniel L. Schneiderman.
Restani, Judge: This matter is before the court on plaintiff Ethan Allen Operations, Inc.’s
(“Ethan Allen”) motion for judgment upon the agency record pursuant to USCIT Rule 56.2. See
Mem. of P. & A. in Supp. of Pl. Ethan Allen Operations, Inc.’s CIT Rule 56.2 Mot. for J. on the
Agency R., ECF No. 29-2 (“Ethan Allen Br.”). Ethan Allen challenges the United States
Department of Commerce’s (“Commerce”) determination that certain chests imported by Ethan
Allen fall within the antidumping duty order covering certain wooden bedroom furniture
(“WBF”) from the People’s Republic of China (“PRC”). Id. at 11; see Commerce’s Scope
Ruling on Ethan Allen Operations Inc.’s Chests, PD 14 (May 27, 2014) (“Scope Ruling”); Final
Results of Voluntary Redetermination Pursuant to Court Order, ECF No. 24 (“Remand
Results”). Ethan Allen additionally challenges Commerce’s instructions to U.S. Customs and
Border Protection (“Customs”) to “continue” to suspend liquidation of entries of the four chests.
Ethan Allen Br. at 11–12. For the reasons stated below, Commerce’s Scope Ruling and Remand
Results are remanded.
BACKGROUND
Commerce issued an antidumping duty order on certain WBF from the PRC in January
2005. See Notice of Amended Final Determination of Sales at Less Than Fair Value and
Antidumping Duty Order: Wooden Bedroom Furniture from the People’s Republic of China¸70
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Fed. Reg. 329, 329 (Dep’t Commerce Jan. 4, 2005) (“WBF Order”). The scope of the order
described the covered merchandise as follows:
The product covered by the order is wooden bedroom furniture. Wooden
bedroom furniture is generally, but not exclusively, designed, manufactured, and
offered for sale in coordinated groups, or bedrooms, in which all of the individual
pieces are of approximately the same style and approximately the same material
and/or finish. The subject merchandise is made substantially of wood
products . . . .
Id. at 332. The WBF Order stated that the subject merchandise included the following items:
(1) Wooden beds such as loft beds, bunk beds, and other beds; (2) wooden
headboards for beds (whether stand-alone or attached to side rails), wooden
footboards for beds, wooden side rails for beds, and wooden canopies for beds;
(3) night tables, night stands, dressers, commodes, bureaus, mule chests,
gentlemen’s chests, bachelor’s chests, lingerie chests, wardrobes, vanities,
chessers, chifforobes, and wardrobe-type cabinets; (4) dressers with framed glass
mirrors that are attached to, incorporated in, sit on, or hang over the dresser;
(5) chests-on-chests, highboys, lowboys, chests of drawers, chests, door chests,
chiffoniers, hutches, and armoires; (6) desks, computer stands, filing cabinets,
book cases, or writing tables that are attached to or incorporated in the subject
merchandise; and (7) other bedroom furniture consistent with the above list.
Id. (footnotes omitted). The WBF Order defined a “chest of drawers” as “typically a case
containing drawers for storing clothing.” Id. at 332 n.4. The WBF Order also contained a
lengthy list of items that were specifically excluded from the scope of the order, including “other
non-bedroom furniture, such as television cabinets, cocktail tables, end tables, occasional tables,
wall systems, book cases, and entertainment systems.” Id. at 332–33.
On February 19, 2014, Ethan Allen filed a scope ruling request, asking that Commerce
determine that four models of wooden chests imported by Ethan Allen from the PRC are outside
the scope of the WBF Order. Scope Ruling Request at 1, PD 1 (Feb. 19, 2014). Ethan Allen
described the four models as follows:
x Vivica Chest. The Vivica Chest is designed, manufactured and marketed for
use in a living room or hallway setting, and is part of a three piece living room
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group consisting of a coffee table . . . and a sofa table . . . all of which share
common design elements, such as antiquated mirrored glass surfaces, angled
framing and wood molded top frames with distinctive mitered molding
surrounding the top. . . .
x The Nadine Chest. The Nadine Chest is a “stand alone” accent piece, designed
and marketed by Ethan Allen for use in a living room or hallway setting, and
predominantly marketed in such settings. . . .
x The Marlene Chest. The Marlene Chest is a “stand alone” accent piece,
designed and marketed for use in a living room, hallway or dining room
setting. . . .
x The Serpentine Chest. The Serpentine Chest is a “stand alone” accent piece,
designed and marketed for use in a living room, hallway or dining room setting
rather than in a bedroom. . . .
Id. at 2–3. Ethan Allen further explained that none of the chests “is of the same style, material
and/or finish as any coordinated bedroom group designed, manufactured or offered for sale by
Ethan Allen.” Id. at 3. Ethan Allen argued that the chests were outside of the order because they
were not designed, manufactured, or offered for sale in coordinated bedroom sets in which all of
the individual pieces of furniture are approximately the same style, finish, and/or material. See
id. at 3–6. On March 11, 2014, defendant-intervenors American Furniture Manufacturers
Committee for Legal Trade and Vaughan-Bassett Furniture Company, Inc. (collectively
“AFMC”) filed a letter with Commerce stating that they had no objection to Commerce finding
the four chests to be outside of the scope of the WBF Order. AFMC’s Comments on Ethan
Allen’s Scope Ruling Request at 1, PD 5 (Mar. 11, 2014).
On April 15, 2014, Commerce placed on the record pictures from Ethan Allen’s website
that displayed the Vivica sofa table—one piece from the three-part Vivica coordinated living
room set that includes the Vivica chest—in a bedroom setting. Information from Ethan Allen’s
Website at Attach. 1, PD 9 (Apr. 15, 2014). Ethan Allen responded that that particular picture
Court No. 14-00147 Page 5
came from Ethan Allen’s New Eclecticism campaign, in which the company promotes the
versatility of furniture and encourages consumers to use pieces of furniture in different rooms
from the rooms for which the piece was originally designed. Letter Re: Ethan Allen’s Chests at
2–4, PD 10 (Apr. 17, 2014).
In its Scope Ruling, Commerce determined that for all four chests “the fundamental
elements of their design and dimensions . . . is entirely consistent with chests of drawers subject
to the WBF Order.” Scope Ruling at 6. In making this determination, Commerce analyzed the
Marlene, Nadine, and Serpentine chests separately from the Vivica chest. Id. at 7. Commerce
did so because Ethan Allen supposedly had argued that the first three chests had wooden finishes
similar to that of bedroom furniture, but were sold as stand-alone accent pieces, whereas the
Vivica chest had a mirrored surface and was marketed as part of a coordinated living room
group. Id. Commerce concluded that these distinctions were relevant under the text of the WBF
Order and warranted a separate analysis of the Vivica chest. Id.
Commerce concluded that the Marlene, Nadine, and Serpentine chests were covered by
the WBF Order after analyzing the criteria listed in 19 C.F.R. § 351.225(k)(1) (2014) (“(k)(1)
factors”). Id. at 8–9. Commerce reasoned that although the chests contained certain decorative
aspects, they were made substantially of wood and that “the fundamental elements of their
design and dimensions—three or four parallel horizontal drawers stacked one above another in a
frame, providing, . . . adequate storage space for clothing—is entirely consistent with chests of
drawers subject to the WBF Order.” Scope Ruling at 6. Commerce explained that because of
the “generally, but not exclusively” language of the scope and as evidenced by prior scope
rulings, the chests did not have to be designed, manufactured, and sold as part of a coordinated
bedroom in order to be covered by the order. Id. at 7–8. Commerce noted that the scope
Court No. 14-00147 Page 6
specifically identified wooden chests and chests of drawers as within the scope of the order, and
that the Marlene, Nadine, and Serpentine chests were “physically consistent with chests of
drawers and similar items of wooden bedroom furniture identified in the scope.” Id. at 8.
Commerce concluded that the Vivica chest was covered by the order after analyzing the
criteria listed in 19 C.F.R. § 351.225(k)(2) (“(k)(2) factors”). Commerce concluded that an
analysis of the (k)(2) factors was necessary because the sources listed in the (k)(1) factors,
specifically the International Trade Commission’s (“Commission”) investigation and
Commerce’s prior scope determinations, “do not contain sufficient information to determine
whether a chest designed, manufactured, and marketed as part of a living room set . . . should be
considered subject to the WBF Order.” Id. at 10. Commerce ultimately concluded, under the
(k)(2) factors, that the physical characteristics, ultimate use, and customer expectations weighed
in favor of the Vivica chest falling within the scope of the WBF Order, and determined that the
channels of trade and advertising factors did not point strongly one way or the other. See id. at
10–14. Commerce therefore determined that, based on the weight of the evidence, the Vivica
chest was within the scope of the order. Id.
On June 5, 2014, Commerce instructed Customs to continue to suspend liquidation of
entries of the four chests. Customs Instructions Message No. 4156302, ECF No. 46. Ethan
Allen subsequently filed a complaint, challenging Commerce’s ruling that the four chests fall
within the scope of the WBF Order, Commerce’s reliance on the (k)(2) factors in deciding
whether the Vivica chest is within the scope of the WBF Order without initiating a proper scope
inquiry, and Commerce’s instructions to Customs to “continue” to suspend liquidation. Compl.,
ECF No. 8. Shortly thereafter, the court granted defendant the United States’s (“the
government”) consent motion for a remand so that Commerce could perform a scope inquiry
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regarding the Vivica chest in accordance with the procedures established by Commerce’s
regulations for conducting an analysis pursuant to 19 C.F.R. § 351.225(k)(2). See Order on
Consent Mot. to Remand, ECF No. 22; see also 19 C.F.R. § 351.225(e)–(f).
During the remand proceedings, Commerce placed five images taken from Ethan Allen’s
Facebook page showing the Vivica chest in three bedroom settings on the record. Remand
Results at 3. No party commented on this evidence. Id. Commerce issued its Remand Results
on November 26, 2014, again determining that the Vivica chest was within the scope of the WBF
Order, indicating that all five (k)(2) factors weighed in favor of including the Vivica chest within
the scope. See id. at 26–27. Commerce again determined that the Vivica chest “is a chest of
drawers and has a design consistent with bedroom chests that serve as storage for clothing.” Id.
at 10. Commerce cited the images from the Facebook page as supporting its conclusion,
explaining that the images were relevant to the marketing and advertising of the Vivica chest, as
well as customer expectations and ultimate use. See id. at 22–26. Commerce also rejected
arguments that it had violated its regulations by retroactively suspending liquidation of the four
chests when it instructed Customs to “continue” suspending liquidation of entries of the chests.
See id. at 15–19.
Before the court, Ethan Allen challenges Commerce’s determinations pursuant to the
(k)(1) factors that the Marlene, Nadine, and Serpentine chests are covered by the WBF Order,
Commerce’s determination pursuant to the (k)(2) factors that the Vivica chest is covered by the
WBF Order, and Commerce’s instructions to Customs to “continue” to suspend liquidation of
entries of the four chests.
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JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction over Ethan Allen’s challenge regarding the merits of the Scope
Ruling and Remand Results pursuant to 28 U.S.C. § 1581(c) (2012). In ruling on these
challenges, “[t]he court shall hold unlawful any determination, finding, or conclusion found . . .
to be unsupported by substantial evidence on the record, or otherwise not in accordance with
law . . . .” 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
I. Legal Background
In determining whether a particular product falls within the scope of an antidumping duty
order, Commerce employs a sequential analysis. At the outset, Commerce analyzes the language
of the order itself. Mid Continent Nail Corp. v. United States, 725 F.3d 1295, 1302 (Fed. Cir.
2013). The regulations recognize that the language of an order may be ambiguous because “the
description of subject merchandise contained in [the scope of an antidumping duty order] must
be written in general terms.” 19 C.F.R. § 351.225(a). If the language of the order is ambiguous
with regard to the particular product at issue, then Commerce considers the (k)(1) factors, which
include “[t]he descriptions of the merchandise contained in the petition, the initial investigation,
and the determinations of [Commerce] (including prior scope determinations) and the
Commission.” Id. § 351.225(k)(1). “When the above criteria are not dispositive,” only then will
Commerce consider the (k)(2) factors, which are “(i) [t]he physical characteristics of the product;
(ii) [t]he expectations of the ultimate purchasers; (iii) [t]he ultimate use of the product; (iv) [t]he
channels of trade in which the product is sold; and (v) [t]he manner in which the product is
advertised and displayed.” Id. § 351.225(k)(2).
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In reviewing Commerce’s scope determinations, “the court will not re-weigh the
evidence presented to Commerce” and will uphold decisions by Commerce when the agency
“chooses from among the range of possible reasonable conclusions based on the record.” OTR
Wheel Eng’g v. United States, 901 F. Supp. 2d 1375, 1380 (CIT 2013). Although the court
grants significant deference to Commerce’s interpretation of its own orders, Commerce “cannot
‘interpret’ an antidumping order so as to change the scope of that order, nor can Commerce
interpret an order in a manner contrary to its terms.” See Walgreen Co. v. United States, 620
F.3d 1350, 1354 (Fed. Cir. 2010) (quoting Duferco Steel, Inc. v. United States, 296 F.3d 1087,
1095 (Fed. Cir. 2002)).
II. The Marlene, Nadine, and Serpentine Chests
Ethan Allen argues that none of the three chests satisfies the supposed threshold
requirements for WBF, namely that they be (1) designed, (2) manufactured, and (3) offered for
sale in coordinated bedroom groups. Ethan Allen Br. at 16–20. Ethan Allen contends the three
chests are non-subject merchandise because only furniture pieces that are “intrinsically and
immutably bedroom furniture,” such as beds, can be within the scope of the WBF Order when
designed, manufactured, or offered for sale as a stand-alone piece. See id. at 17–18. Ethan Allen
also argues that Commerce misstated record evidence when it determined that the Marlene,
Nadine, and Serpentine chests should be treated differently from the Vivica Chest and that
Commerce failed to consider record evidence that the three chests were not of the same style,
material, and/or finish as any of Ethan Allen’s coordinated bedroom groups. 1 Id. at 15–16.
1
The court agrees with Ethan Allen that Commerce misstated certain pieces of record evidence.
Commerce’s decision to evaluate the Vivica chest separately, however, was reasonable because
(continued . . .)
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Finally, Ethan Allen argues that Commerce unlawfully evaluated a (k)(2) factor—the ultimate
use of the product—when conducting a (k)(1) analysis. Id. at 20–22. 2
In response, the government argues that Commerce properly concluded that the Marlene,
Nadine, and Serpentine chests are within the scope of the WBF Order pursuant to the (k)(1)
factors. Def.’s Resp. to Pl.’s Rule 56.2 Mot. for J. on the Agency R. 11–19, ECF No. 35 (“Gov.
Br.”). The government contends that Commerce reasonably interpreted the scope of the WBF
Order to include stand-alone pieces, even if they are not “intrinsically” bedroom furniture. Id. at
13–19. The government also points to language within the WBF Order describing covered
“chests of drawers” and “chests” as pieces “for storing clothing” and asserts that Commerce’s
analysis of the dimensions of the drawers and whether they were adequate for storing clothing
was consistent with this language. Id. at 11–12. The government further emphasizes that the
Marlene, Nadine, and Serpentine do not have any unique physical or decorative features that
distinguish them from subject bedroom chests. Id. at 16–17.
the Vivica chest is part of a coordinated living room set. Accordingly, the court continues to
analyze the Vivica chest separately.
2
In response to Ethan Allen’s argument, the government contends that Commerce’s inquiry into
whether the chests could store clothing was based on the plain language of the order, not a
consideration of any (k)(2) factor. Def.’s Resp. to Pl.’s Rule 56.2 Mot. for J. on the Agency R.
12–13, ECF No. 35 (“Gov. Br.”). AFMC understands Commerce to have considered the chests’
suitability for storing clothing as part of a broader analysis under (k)(1) instead of treating it as a
dispositive factor, see AFMC’s Resp. in Opp’n to Ethan Allen’s Rule 56.2 Mot. for J. on the
Agency R. 13, ECF No. 37 (“AFMC Br.”), but recognizes that whether some chests are designed
for the purposes of storing clothing may require an additional analysis of the (k)(2) factors, see
id. at 14. Ethan Allen is correct that Commerce improperly considered a (k)(2) factor in its
(k)(1) analysis. The court, when analyzing the WBF Order, has previously determined that
“purpose or use cannot be the test when conducting a § 351.225(k)(1) determination, as for
[WBF], they are factors relevant only to a § 351.225(k)(2) inquiry.” Toys “R” Us, Inc. v. United
States, 32 CIT 814, 819 (2008). Therefore, although a broad purpose when it is an essential part
of the scope definition (e.g., for use in a bedroom) may be considered, here Commerce should
have avoided considering purpose and use when re-conducting its (k)(1) analysis.
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AFMC agrees with the government that stand-alone chests may be included within the
scope of the WBF Order. See AFMC’s Resp. in Opp’n to Ethan Allen’s Rule 56.2 Mot. for J. on
the Agency R. 8–13, ECF No. 37 (“AFMC Br.”). AFMC also argues that although the ability to
hold clothing is a relevant factor (and not a dispositive factor) in Commerce’s analysis, the
proper inquiry should be the intended function of the product. Id. at 13–14.
The WBF Order does not exclude stand-alone pieces from the scope of the order. The
court has previously recognized that stand-alone pieces of furniture may be included in the scope
of the WBF Order because the order explicitly indicates that the furniture is “generally, but not
exclusively, . . . offered for sale in coordinated groups.” WBF Order, 70 Fed. Reg. at 332
(emphasis added); see, e.g., Acme Furniture Indus., Inc. v. United States, 825 F. Supp. 2d 1353,
1356 (CIT 2012). Ethan Allen’s argument improperly conflates two separate issues: whether a
stand-alone piece may be included in the WBF Order and whether the merchandise at issue must
be bedroom furniture to be included in the scope of the WBF Order. See Ethan Allen Br. at 17.
The answer to both questions is yes. The text of the WBF Order does not bear any requirement
that stand-alone pieces of furniture may be included within the order only if they are
“intrinsically and immutably bedroom furniture.” See Ethan Allen Br. at 17. Under that
interpretation, many pieces of stand-alone furniture (e.g., chests, desks, book cases, armoires)
could never be included in the scope of the WBF Order because, as a stand-alone piece of
furniture, these pieces are not “intrinsically” or “immutably” bedroom furniture. Instead, the
WBF Order can only include bedroom furniture, regardless of whether the item is stand-alone or
sold in a coordinated set. As discussed below, however, the “generally, but not exclusively”
exception language is to be construed narrowly.
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In looking to the language of the WBF Order itself, Commerce’s determination that the
(k)(1) factors are dispositive and that the three chests are within the scope of the WBF Order is
not supported by substantial record evidence. Commerce relies on the claim “that the Marlene,
Nadine, and Serpentine chests have wooden finishes similar to that of bedroom furniture” to
evaluate these three accent chests separately from the Vivica chest, but this statement is
incorrect. See Scope Ruling at 7. Although Commerce alleges that Ethan Allen made this
argument, id., Ethan Allen made precisely the opposite argument, see Scope Ruling Request at 7.
As discussed below, all three of the chests have unique, decorative features, and there is no
evidence on the record that these decorative features match that of other bedroom furniture sold
by Ethan Allen. Id. at Ex.1 (providing the declaration of Corey Whitely, which describes the
unique decorative features of each chest). Commerce’s misstatement of the record was central to
its analysis and provides a sufficient reason to remand this decision to the agency for
reconsideration.
Furthermore, the description in the petition does not support Commerce’s conclusion that
the (k)(1) factors are dispositive. The petition recognizes a difference between wooden bedroom
chests and wooden living room chests, noting that “[l]iving room chests are usually much more
decorative . . . and are typically not as deep as bedroom chests (because the primary purpose of
bedroom chests, unlike living room chests, is for storage).” AFMC’s Resp. to Ct.’s Req. 5, ECF
No. 50 (hereinafter “WBF” Petition” at 21). Commerce ultimately concluded, without providing
explanation, that the three chests “do not have any unique physical or decorative characteristics
that distinguish them from subject bedroom chests.” Scope Ruling at 8; see also Gov. Br. at 16–
17. Commerce’s analysis, which ultimately focuses on the petition’s language regarding a
chests’ ability to store clothing, either ignores, or fails to address, Ethan Allen’s argument
Court No. 14-00147 Page 13
regarding the different decorative finishes of each of the three chests. Ethan Allen Br. at 15–16
(noting that the Marlene has a “careworn, markedly textured finish,” the Nadine has “antiqued
silver-leaf or Raven black finishes,” and the Serpentine has a “black crackle canvas.”).
Moreover, as in Legacy Classic Furniture, Inc. v. United States, Commerce’s reasoning, which
inexplicably places more emphasis on the storage ability rather than the decorative aspects of the
three chests, “could be employed to opposite effect.” See 807 F. Supp. 2d 1353, 1359 (CIT
2011) (finding that Commerce unlawfully determined that a storage bench was more similar to
an in-scope bedroom chest than an out-of-scope bench, even though the storage bench had key
features of both).
The court also agrees with AFMC’s argument that the ability to hold clothing is a
relevant factor for Commerce to consider, but should not be the dispositive factor. See AFMC
Br. at 13–14. For example, simply because a wooden basket shoved under a bed is capable of
storing clothing, this fact alone does not make the basket subject WBF. Instead, as AFMC notes,
the proper inquiry should focus on the intended function of the product, i.e., whether it was
intended and designed for use in the bedroom, 3 as opposed to whether it is theoretically capable
of storing clothing. See id. at 14. Because the Marlene, Nadine, and Serpentine chests have
qualities of both a wooden bedroom chest (ability to store clothing) and of a wooden living room
chest (decorative), Commerce failed to account for record evidence that weighed against its
conclusion. On remand, because the (k)(1) factors are non-dispositive, Commerce should
evaluate the (k)(2) factors consistent with this decision.
3
In this respect, Commerce might consider the shape and dimensions of the drawers.
Court No. 14-00147 Page 14
III. The Vivica Chest
Regarding the Vivica chest, Ethan Allen again argues that it does not meet the threshold
requirements for WBF, as it was not designed, manufactured, or offered for sale as part of a
coordinated bedroom group. Ethan Allen Br. at 23. Ethan Allen urges that the record evidence
shows that it was actually designed, manufactured, and offered for sale as part of a three-piece
living room group. Id. Moreover, Ethan Allen argues that the WBF Order’s “generally, but not
exclusively” language “does not act to make the general requirements for ‘wooden bedroom
furniture’ superfluous.” Id. at 18.
The government makes the same argument regarding the “threshold” features of WBF,
asserting that Commerce reasonably interpreted the scope of the WBF Order to include pieces
that are not part of a coordinated bedroom group. See Gov. Br. at 15–18. Commerce based its
determination that the (k)(1) factors alone were not dispositive on its analysis that the Vivica
chest “is a chest of drawers [that] has a design consistent with bedroom chests that serve as
storage for clothing . . . [and is] designed with a mirrored surface and features which it shared
with other furniture in [a] living room set.” Remand Results at 10.
Commerce improperly determined that the (k)(1) factors are non-dispositive because the
(k)(1) factors show that Ethan Allen’s Vivica chest is non-bedroom furniture. Admittedly, the
WBF Order defines an in-scope chest of drawers as “typically a case containing drawers for
storing clothing.” WBF Order at 332 n.4. The sources in the (k)(1) factors also explain that
“wooden bedroom furniture is generally, but not exclusively, designed, manufactured, and
offered for sale in coordinated groups, or bedrooms, in which all of the individual pieces are of
approximately the same style and approximately the same material and/or finish.” Id. at 332.
They also provide that WBF “are, overwhelmingly, designed, manufactured, and sold as suites
Court No. 14-00147 Page 15
. . . the ultimate consumer typically sees these products as integrally-related products to be put to
integrally-related uses.” WBF Petition at 21 (emphasis added). Although the order’s “generally,
but not exclusively” language creates an exception that includes within the scope some stand-
alone furniture, the petition makes clear that this exception is narrow. Not only is the Vivica
chest not a part of a coordinated bedroom set, it is, in fact, part of a coordinated living room (i.e.,
non-bedroom) set and shares “antiquated mirrored glass surfaces, angled framing and wood
molded top frames with distinctive mitered molding surrounding the top” with a coffee table and
a sofa table. Scope Ruling Request at 2–3.
Commerce, instead, improperly relied on the Vivica chest’s potential ability to store
clothing. The WBF Order specifically excludes “other non-bedroom furniture,” WBF Order at
332–33, and the petition provides living room chests as an example of such non-bedroom
furniture, WBF Petition at 21 (noting that living room chests “are usually much more decorative
. . . and are typically not as deep as bedroom chests (because the primary purpose of bedroom
chests, unlike living room chests, is for storage)”). Commerce attempts to discredit the petition’s
language when it states that it did “not believe the Petitioner’s description of living room chests
in the Petition provided useful criteria for distinguishing living room chests from bedroom chests
such that the Petitioner’s description is dispositive of the matter.” Remand Results at 9. Even if
Commerce’s rejection of the petition language and Ethan Allen’s arguments about the decorative
aspects of the Vivica chest are proper, Commerce still fails to consider that the Vivica chest is
part of a coordinated living room set, which is designed for use in the living room. 4 Indeed, the
petition itself defines bedroom furniture with reference to its “intended use in a bedroom.” WBF
4
Fleeting advertisements suggesting a dual use are insufficient to make a decorative chest that is
part of a living room set bedroom furniture.
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Petition at 20. The Vivica chest’s coordinated design in a living room set indicates that its
intended use is in a living room, not a bedroom. Moreover, as the court has recognized,
“[u]nequivocal exclusions are not loopholes; they are argued for and intentionally omitted from
the scope.” Legacy Classic Furniture, Inc. v. United States, 867 F. Supp. 2d 1321, 1330 (CIT
2012) (citing Wheatland Tube Co. v. United States, 161 F.3d 1365, 1371 (Fed. Cir. 1998)). The
exclusion of “other non-bedroom furniture” from the scope of the WBF Order makes clear the
order’s intent to omit from the scope other non-bedroom furniture, such as living room furniture.
It is inconsistent with the WBF Order to read the narrow exception found in the “generally, but
not exclusively” language to be so broad as to include coordinated living room furniture. Thus,
because the (k)(1) factors are dispositive as to the Vivica chest and demonstrate that the Vivica
chest is not within the scope of the WBF Order, the court does not proceed to an analysis of the
(k)(2) factors and remands to Commerce to issue a ruling consistent with this opinion.
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IV. Suspension of Liquidation 5
Ethan Allen also contests Commerce’s liquidation instructions to Customs as
impermissibly having retroactive effect. Ethan Allen Br. at 27–34. To arrive at this conclusion,
Ethan Allen argues that the scope of the WBF Order is unclear and Commerce’s Scope Ruling
required an analysis of the (k)(1) and (k)(2) factors to clarify the scope. Id. at 29–34; see Reply
in Supp. of Pl. Ethan Allen Operations, Inc.’s Rule 56.2 Mot. for J. on the Agency R. 7–11, ECF
No. 41 (“Ethan Allen Reply”) (arguing that “the retroactivity issue is triggered” whenever
Commerce conducts a (k)(1) or (k)(2) analysis). Ethan Allen also argues that its accent chests
were not previously subject to suspension of liquidation under the allegedly unclear scope
contained in the WBF Order. 6 Ethan Allen Br. at 29, 34; Ethan Allen Reply at 5–6. As a result,
Ethan Allen believes that Commerce’s liquidation instructions to assess duties on in-scope
5
At the outset, the court notes that none of the parties in their briefs raised the question of
whether the court has jurisdiction over this claim. Nevertheless, “a court has an independent
obligation to determine whether subject-matter jurisdiction exists, even in the absence of a
challenge from any party.” Ford Motor Co. v. United States, 992 F. Supp. 2d 1346, 1354 (CIT
2014) (internal quotations omitted) (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 514
(2006)). Ethan Allen asserts that the court has jurisdiction over the entire appeal under 28 U.S.C.
§ 1581(c). Ethan Allen Br. at 12. Although jurisdiction over a party’s challenge to Commerce’s
liquidation instructions may sometimes be proper under 28 U.S.C. § 1581(i), jurisdiction under
§ 1581(i) is residual and may only be employed where a party has no remedies under subsections
(a) through (h) of that section. Duferco Steel, Inc. v. United States, 29 CIT 1249, 1253, 403 F.
Supp. 2d 1281, 1285 (2005). Instead, Ethan Allen’s challenge to Commerce’s liquidation
instructions directly stem from Ethan Allen’s claim that the Scope Ruling and Remand Results
were unlawful. And, Commerce’s Remand Results specifically address the issue of suspension
of liquidation, indicating that a § 1581(c) challenge may be the proper method to challenge not
only the Scope Ruling and Remand Results, but also the liquidation instructions deriving
therefrom. Accordingly, the court has, at least, a colorable claim of jurisdiction under § 1581(c).
6
The parties could not clarify at oral argument whether suspension and collection of duty
deposits actually occurred and for which set of entries. If the liquidation was not suspended, it
was likely because Ethan Allen did not declare the chests to be bedroom furniture subject to an
antidumping duty order.
Court No. 14-00147 Page 18
merchandise from a time prior to the commencement of the scope inquiry were not permissible
under 19 C.F.R. § 351.225(l)(1). 7 Ethan Allen Br. at 34–36.
The government responds that Commerce’s liquidation instructions were lawful. Gov.
Br. at 25–33. The government argues that Ethan Allen improperly relies on the Federal Circuit’s
holding in AMS Assocs., Inc. v. United States, 737 F.3d 1338 (Fed. Cir. 2013), arguing instead
that the scope of the WBF Order was sufficiently clear. Gov. Br. at 28–33. The government also
disagrees with Ethan Allen’s argument that Commerce’s Scope Ruling constituted a
“clarification” which expanded the scope of the WBF Order. Id. at 31. Instead, the government
argues Commerce simply confirmed that Ethan Allen’s chests were subject to the WBF Order.
Id. at 31–33.
AFMC asserts that “bedroom chests are unambiguously included in the scope of the
Order,” but acknowledges that whether particular chest should be classified as bedroom furniture
or living room furniture will require an analysis “of the purpose and use of the chest.” AFMC
Br. at 18. It contends that any importer of chests designed, marketed, and offered for sale might
try to argue that an ambiguity exists as to the purpose and use of such chests to avoid duties,
which is not the result intended by the Federal Circuit in AMS. Id.
7
The regulation provides:
When [Commerce] conducts a scope inquiry under paragraph (b) or (e) of this
section, and the product in question is already subject to suspension of liquidation,
that suspension of liquidation will be continued, pending a preliminary or a final
scope ruling, at the cash deposit rate that would apply if the product were ruled to
be included within the scope of the order.
19 C.F.R. § 351.225(l)(1) (emphasis added).
Court No. 14-00147 Page 19
When Commerce issues a preliminary scope ruling determining “that the product in
question is included within the scope of the order, [then] any suspension of liquidation . . . will
continue.” 19 C.F.R. § 351.225(l)(2). “If liquidation [for the product in question] has not been
suspended,” however, Commerce may only suspend liquidation and collect cash deposits from
“on or after the date of initiation of the scope inquiry.” Id. The same rules apply to the final
scope ruling at issue here. 19 C.F.R. § 351.225(l)(3).
In interpreting the lawfulness of Commerce’s liquidation instructions, both parties cite to
AMS, and Ugine & ALZ Belgium v. United States, 551 F.3d 1339 (Fed. Cir. 2009). 8 In AMS,
the laminated woven sacks (“LWS”) at issue were not already subject to suspension of
liquidation because of a prior Customs country of origin ruling, which found that sacks made of
non-Chinese-origin fabric were not Chinese. 737 F.3d at 1340. There, Commerce expanded the
scope from the previous understanding by ruling that under the substantial transformation test,
LWS made from non-Chinese-origin fabric are considered Chinese for scope purposes. Id. at
1340–41, 1344. Thus, a conscious change in governmental decisions applicable to the
antidumping duty order occurred. AMS and 19 C.F.R. § 351.225 on their face, however,
indicate without limitation that if there was not an actual suspension of liquidation in place and
Commerce determines pursuant to a formal scope proceeding under that section to include
certain merchandise in the scope of the order, the suspension and collection of duty deposits will
be retroactive only to the commencement of the scope proceeding.
8
Whether the court directly confronted the retroactivity issue in Ugine is not clear as the court
ultimately disagreed with Commerce on the merits and found the merchandise outside the scope
of the order.
Court No. 14-00147 Page 20
Whatever occurred in this case, it is fair to say there is a genuine dispute as to whether
the four chests at issue are within the scope of the order. It is possible that the retroactivity issue
will be mooted, that is, all the chests may be found to be outside the scope. Thus, the court need
not finally resolve this, but it will require further facts, including information about Customs’
treatment of Ethan Allen’s chests subsequent to entry, before it decides whether relief is
warranted.
Accordingly, Ethan Allen shall complete the record by establishing what Customs did
upon receipt of Commerce’s original instruction with respect to the merchandise. Ethan Allen,
in particular, should submit information to Commerce as to whether or not there are live entries
within a period in which there was no actual suspension of liquidation by Customs. On remand,
Commerce should consider this newly submitted entry information to help evaluate whether
Commerce’s post-scope inquiry liquidation instructions were proper.
CONCLUSION
For the foregoing reasons, Commerce’s Scope Ruling and Remand Results are remanded
for Commerce to reconsider its decision regarding Ethan Allen’s Marlene, Nadine, and
Serpentine chests pursuant to the (k)(2) factors, and for Commerce to issue a determination
consistent with this opinion regarding the Vivica chest. Commerce should reconsider its
liquidation instructions as necessary. Commerce shall have until February 1, 2016, to file its
remand results. The parties shall have until March 2, 2016, to file objections, and the
government shall have until March 16, 2016, to file its response.
/s/ Jane A. Restani
Dated: December 1, 2015 Jane A. Restani
New York, New York Judge