Slip Op. 17-25
UNITED STATES COURT OF INTERNATIONAL TRADE
AMERICAN FURNITURE
MANUFACTURERS COMMITTEE FOR
LEGAL TRADE, and VAUGHAN-BASSETT
FURNITURE COMPANY, INC.,
Plaintiffs,
Before: Jane A. Restani, Judge
v.
Court No. 16-00070
UNITED STATES,
Defendant.
OPINION
[Defendant’s motion to dismiss action under 28 U.S.C. § 1581(c) is granted.]
Dated: March 13, 2017
J. Michael Taylor, King & Spalding LLP, of Washington, DC, argued for plaintiffs. With
him on the brief were Daniel L. Schneiderman and P. Lee Smith.
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 Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Heather N.
Doherty, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, DC.
Restani, Judge: This matter is before the court on defendant United States (“the
government”)’s motion to dismiss a complaint filed by plaintiffs American Furniture
Manufacturers Committee for Legal Trade and Vaughan-Bassett Furniture Company, Inc.
(collectively, “AFMC”), for lack of subject-matter jurisdiction pursuant to U.S. Court of
International Trade Rule 12(b)(1). Def.’s Mot. to Dismiss for Lack of Jurisdiction 1, ECF No.
28 (“Mot. to Dismiss”). AFMC challenges the final results of the tenth administrative review of
Court No. 16-00070 Page 2
the antidumping (“AD”) duty order on certain wooden bedroom furniture (“WBF”) from the
People’s Republic of China (“PRC”), covering the period of review (“POR”) of January 1, 2014,
through December 31, 2014. See Wooden Bedroom Furniture from the People’s Republic of
China: Final Results and Final Determination of No Administrative Review, in Part: 2014
Administrative Review, 81 Fed. Reg. 21,319, 21,319 (Dep’t Commerce Apr. 11, 2016) (“Final
Results”). It asserts jurisdiction under 28 U.S.C. § 1581(c) over a challenge to a final reviewable
determination of the U.S. Department of Commerce (“Commerce”) under 19 U.S.C. § 1516a.
For the reasons stated below, the court grants the government’s motion.
BACKGROUND
On March 2, 2015, Commerce initiated the instant tenth administrative review of WBF
from the PRC. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 80
Fed. Reg. 11,166, 11,168–70 (Dep’t Commerce Mar. 2, 2015); see also 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 Fed. Reg. 329, 329 (Dep’t
Commerce Jan. 4, 2005). Commerce selected Shanghai Jian Pu Import & Export Co., Ltd. (“Jian
Pu”) as the sole mandatory respondent because it was the only respondent for which a request for
review had not been withdrawn and it also had provided the information required by Commerce
to be considered for status separate from the PRC-wide entity. Decision Memorandum for
Preliminary Results of Antidumping Duty Administrative Review: Wooden Bedroom Furniture
from the People’s Republic of China at 5, PD 203 (Dec. 2, 2015) (“Preliminary I&D Memo”).
On December 14, 2015, Commerce published its preliminary results. Wooden Bedroom
Furniture from the People’s Republic of China: Preliminary Results of Antidumping Duty
Court No. 16-00070 Page 3
Administrative Review; 2014, 80 Fed. Reg. 77,321, 77,321 (Dep’t Commerce Dec. 14, 2015)
(“Preliminary Results”). After reviewing the information submitted by Jian Pu, Commerce
determined that it was part of the PRC-wide entity because it did “not satisfy the criteria
demonstrating an absence of de facto government control over export activities” as the
government of the PRC has a “significant ownership interest in Jian Pu.” Preliminary I&D
Memo at 8. Commerce, therefore, applied a PRC-wide rate of 216.01% to Jian Pu’s exports.
Preliminary Results, 80 Fed. Reg. at 77,322. Commerce also dismissed AFMC’s duty evasion
allegations, reasoning that producers that are part of the PRC-wide entity would be unable to
continue to evade AD duties by funneling subject merchandise through Jian Pu both because Jian
Pu’s past entries would be liquidated at the PRC-wide rate and because future entries would be
subject to a higher cash deposit rate reflective of the PRC-wide rate. Preliminary I&D Memo at
10. At AFMC’s request, Commerce indicated it would “forward [AFMC’s] allegations to [U.S.
Customs and Border Protection (“Customs”)] for further investigation.” Id.
Commerce’s Final Results left unchanged its Preliminary Results. Wooden Bedroom
Furniture from the People’s Republic of China: Issues and Decision Memorandum for the Final
Results of the 2014 Administrative Review at 1, PD 212 (Apr. 1, 2016) (“I&D Memo”).
Because Commerce continued to find that Jian Pu was part of the PRC-wide entity subject to the
216.01% rate, it determined that AFMC’s additional arguments regarding Jian Pu’s failure to
cooperate and the application of adverse facts available (“AFA”) 1 were “moot.” Final Results, 81
Fed. Reg. at 21,319; I&D Memo at 5.
1
Although the term “AFA” is not referenced in either the statute or the agency’s regulations, it
can be understood, within the context of this case, as referring to Commerce’s application of the
“facts otherwise available” and “adverse inferences” provisions of 19 U.S.C. § 1677e to arrive at
(continued . . .)
Court No. 16-00070 Page 4
On April 26, 2016, AFMC filed its summons and complaint before the court. Summons,
ECF No. 1; Compl., ECF No. 7. In the operative amended complaint, AFMC contests the Final
Results and claims that: (1) Commerce failed to fully investigate AFMC’s evasion allegations
and send the information to Customs (Count One); (2) Commerce did not address AFMC’s
arguments regarding Jian Pu’s failure to cooperate and make an AFA determination (Count
Two); (3) Commerce erred by refusing to find that Jian Pu was not the price discriminator for at
least some of the subject merchandise claimed to be exported by Jian Pu (Count Three); and
(4) the court should remand to allow Commerce to reopen the record in light of new evidence
demonstrating that Commerce’s proceedings were tainted by fraud (Count Four). Am. Compl.
¶¶ 12–21, ECF No. 16. Thereafter, Commerce referred the matter to Customs by letter, which
outlined AFMC’s fraudulent funneling allegations and attached the relevant documents
containing the allegations. Commerce Evasion Letter to Customs at 1–2, PD 218 (May 12,
2016) (“Evasion Letter”).
The government moves to dismiss the amended complaint and argues that AFMC cannot
satisfy Article III of the U.S. Constitution’s standing requirement because it has not “suffered a
concrete, particularized, and actual injury that is fairly traceable to the challenged decision by
Commerce.” Mot. to Dismiss at 4–6. AFMC responds that it has standing in part because it is
injured by Commerce’s failure to take certain steps to prevent duty evasion. Pls.’ Resp. in Opp’n
to Def.’s Mot. to Dismiss for Lack of Jurisdiction 5–6, ECF No. 30 (“AFMC Resp.”). AFMC
argues that Commerce’s ability to make findings regarding evasion can be a type of relief,
a replacement margin. By statute, Commerce may use “facts otherwise available” in the
particular situations set forth in § 1677e(a), and it may apply “adverse inferences” pursuant to
§ 1677e(b) when “an interested party has failed to cooperate by not acting to the best of its
ability to comply with a request for information . . . .”
Court No. 16-00070 Page 5
beyond simply setting a margin, as doing so would necessarily require Customs to assess
penalties in addition to AD duties. Id. at 7–11.
DISCUSSION
A plaintiff bears the burden of establishing that federal jurisdiction is proper, a burden
that includes satisfying Article III’s standing requirement. Simon v. E. Ky. Welfare Rights Org.,
426 U.S. 26, 37–38 (1976); Canadian Lumber Trade All. v. United States, 517 F.3d 1319, 1331
(Fed. Cir. 2008). Accordingly, the plaintiff must (1) “have suffered an ‘injury in fact,’” which is
an injury that is both “concrete and particularized” and also “actual or imminent,” rather than
conjectural or hypothetical, (2) establish a causal connection by showing that the injury is fairly
traceable to the defendant’s challenged conduct, and (3) demonstrate that the injury is likely to
be “redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61
(1992) (first quoting Allen v. Wright, 468 U.S. 737, 756 (1984); then quoting Simon, 426 U.S. at
38, 41). Although causal connection typically is not “th[e] result [of] the independent action of
some third party not before the court,” id. (alterations in original) (quoting Simon, 426 U.S. at
42), the requirement “does not exclude injury produced by determinative or coercive effect upon
the action of someone else,” Bennett v. Spear, 520 U.S. 154, 169 (1997).
AFMC’s alleged injuries are not “fairly traceable” to an action by Commerce, nor may
they be redressed by a decision of this court in this case on this cause of action challenging
Commerce’s Final Results. Here, no action by Commerce gives rise to AFMC’s alleged injury
of lost sales due to duty evasion. 2 AFMC’s injury is not fairly traceable to Commerce’s failure
2
AFMC alleges that “various Chinese producers subject to the 216.01% PRC-wide rate, along
with importers and in coordination with Jian Pu, were evading the [AD] order via a scheme to
(continued . . .)
Court No. 16-00070 Page 6
to “fully investigate” the allegations or make explicit factual findings regarding the evasion
scheme and Jian Pu’s role in it. See Allied Pacific Food (Dalian) Co. v. United States, 32 CIT
1328, 1361–62, 587 F. Supp. 2d 1330, 1365 (2008) (finding the injury to the mandatory
respondent was not fairly traceable to Commerce’s failure to recalculate the separate rate as that
rate did not affect the assessment of the mandatory respondent’s duties). Instead, Commerce
found in its Final Results that Jian Pu is part of the PRC-wide entity and assigned the 216.01%
PRC-wide rate to Jian Pu. Thus, any PRC company selling through Jian Pu will get the rate it
merits as part of the PRC-wide entity. Commerce, therefore, satisfied its obligation under the
statute to assess an AD rate for the individually reviewed respondent, pursuant to 19 U.S.C.
§ 1675(a)(1)(B). 3 Indeed, AFMC received the exact relief that it sought before Commerce: for
Jian Pu to receive the PRC-wide rate, an AFA rate, of 216.01% and anyone using Jian Pu as a
front to receive the same rate. Under the United States’s retrospective system, not only does that
assessment rate apply to entries made during the POR, but it also applies prospectively to cash
deposits for entries of subject merchandise made by Jian Pu or entities using Jian Pu’s identifiers.
provide for the underpayment of duties using Jian Pu’s much lower 6.65% cash deposit rate.”
Am. Compl. ¶ 19. AFMC explains in its briefing that it has suffered an injury in fact because it
has “suffer[ed] lost sales and lost revenues as a result of the circumvention and evasion schemes”
by “which importers avoid paying the full antidumping duties owed” and thus “enable larger
quantities of WBF to be imported, and at lower prices, than would otherwise exist if antidumping
cash deposits and duties were properly collected.” AFMC Resp. at 5. This may be an injury but
it cannot be redressed by an action seeking to change Commerce’s final determination here.
3
To the extent that Count One of AFMC’s amended complaint identifies “Commerce’s apparent
failure to forward relevant information to [Customs] for further investigation,” Am. Compl. ¶ 14,
that claim is mooted by Commerce’s May 12, 2016, letter in which Commerce did forward
AFMC’s allegations to Customs. Evasion Letter at 1–2. Regardless, given the assertion of
jurisdiction under 28 U.S.C. § 1581(c), there is no relief the court can afford on this claim.
Court No. 16-00070 Page 7
Despite AFMC’s charge that Commerce should have made additional factual findings,
the “court has repeatedly held that a party lacks standing to challenge a subsidiary finding in an
administrative determination in which it prevailed on the merits.” Cámara Nacional de las
Industrias Azucarera y Alcoholera v. United States, 118 F. Supp. 3d 1360, 1365 (CIT 2015). It
does not appear that there is any other remedy Commerce could have afforded AFMC. See, e.g.,
Royal Thai Gov’t v. United States, 978 F. Supp. 2d 1330, 1332, 1333 (CIT 2014) (explaining
that, where a foreign government challenged certain findings in Commerce’s negative
determination in a countervailing duty investigation, “no remedy would be available as
Commerce’s existing negative determination is all that plaintiff could hope to obtain on appeal”).
The “determinative or coercive effect” of Commerce investigating the allegations is not
the issuance of penalties by Customs. (Commerce does not impose penalties on importers or
exporters. See, e.g., 19 U.S.C. § 1592 (authorizing Customs, not Commerce, to assess
penalties).) 4 According to AFMC, its requested relief “is for Commerce to make the findings
necessary to enable [Customs] to do its job.” AFMC Resp. at 11. Even if the court remanded
the case to Commerce to fully investigate AFMC’s allegations, a favorable decision by the court
would only require Commerce to consider the allegations, and would not ensure Commerce
would make the desired findings. And, assuming Commerce, an entity without subpoena power,
see Allegheny Ludlum Corp. v. United States, 287 F.3d 1365, 1372 (Fed. Cir. 2002), did make
the desired findings, Customs would not then be required to initiate the investigation that AFMC
seeks, and the investigation might not result in an enforcement action or penalties. Penalties
4
Instead, as the Court of Appeals for the Federal Circuit has explained, “[t]he antidumping laws
‘are remedial not punitive[.]’” KYD, Inc. v. United States, 607 F.3d 760, 767 (Fed. Cir. 2010)
(quoting NTN Bearing Corp. v. United States, 74 F.3d 1204, 1208 (Fed. Cir. 1995)).
Court No. 16-00070 Page 8
would be enforced under 19 U.S.C. § 1592 on importers shown to have committed fraud, gross
negligence, or negligence. Findings about which exporting entity was the “price discriminator”
would not be sufficient. Redressability in this case, therefore, is speculative. See Defenders of
Wildlife, 468 U.S. at 561 (setting forth that redressability that is “speculative” does not satisfy
Article III); see also Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 86–87, 105–09 (1998)
(holding the plaintiff lacked standing as it had not demonstrated redressability of injuries from
defendant’s violations of an environmental reporting statute because none of the forms of relief
requested would reimburse the plaintiff or mitigate the effects of defendant’s actions).
For example, in Ontario Forest Indus. Assoc. v. United States, the court held that
plaintiff’s injury was not redressable where the plaintiff sought the court to compel the United
States to appoint a member to a particular committee created by the North America Free Trade
Agreement so that the committee could conduct proceedings. 30 CIT 1117, 1133, 444 F. Supp.
2d 1309, 1324 (2006). The court explained that Canada would still need to take the
“independent action” of selecting a member to the committee to allow the committee’s
proceedings to commence. Id. There, the United States’ appointment of a member was a
necessary but not sufficient step to redress the plaintiff’s injury of delayed committee
proceedings. This case presents an even weaker theory of redressability as requiring Commerce
to investigate the allegations and make factual findings is not a prerequisite for Customs to
initiate a 19 U.S.C. § 1592 investigation. Even absent Commerce’s Evasion Letter forwarding
AFMC’s allegations to Customs, AFMC could itself have sent its allegations to Customs and
requested that Customs look into potential duty evasion. It would be pure speculation that
granting AFMC’s request for relief would lead to the ultimate redress AFMC desires, i.e., the
issuance of penalties by Customs.
Court No. 16-00070 Page 9
Bennett v. Spear is readily distinguishable. 520 U.S. at 168. There, a petitioner
challenged a biological opinion of the Fish and Wildlife Service (“FWS”). Id. The court held
that the petitioner met the fairly traceable and redressability requirements because, even though
the proximate cause of the injury was a decision by the Bureau of Reclamation and not FWS,
FWS’s biological opinion had a “powerful coercive effect on the” Bureau of Reclamation. Id. at
169–70. This was so because the FWS’s opinion could subject the Bureau to “substantial civil
and criminal penalties” pursuant to the Endangered Species Act. Id. Clearly, no comparable
powerful coercive effect exists here to require Customs to act in the light of particular findings
by Commerce. See Defenders of Wildlife, 504 U.S. at 562 (explaining that in cases where an
“injury arises from the government’s allegedly unlawful regulation” of a third party over which
the court does not have control, the burden is on the plaintiff to provide facts showing the third
party will act “in such a manner as to produce causation and permit redressability of injury”).
AFMC, therefore, has failed to establish that it has standing to bring any of the counts set forth in
its amended complaint. 5
CONCLUSION
AFMC achieved everything that it could obtain in the proceeding at issue after it
withdrew its requests for review of over one hundred companies. The sole mandatory
respondent left was found to be part of the PRC-wide entity, which was subject to an AFA rate
of 216.01%. No challenge was made to that rate in the administrative proceeding and none is
5
Although AFMC admits it considered action under 28 U.S.C. § 1581(i) jurisdiction, it chose to
proceed under § 1581(c). For the reasons set forth in the text, it is highly unlikely that a viable
action based on similar allegations under § 1581(i) challenging Commerce’s administration and
enforcement of the unfair trade laws could withstand a motion to dismiss.
Court No. 16-00070 Page 10
made here. Essentially, the Final Results are not challenged. For the foregoing reasons, the
court lacks subject-matter jurisdiction over AFMC’s amended complaint. The government’s
motion is granted. Judgment will enter accordingly.
/s/ Jane A. Restani
Jane A. Restani
Judge
Dated: March 13, 2017
New York, New York