Slip Op. 10-79
UNITED STATES COURT OF INTERNATIONAL TRADE
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:
DORBEST LTD., et al. :
:
Plaintiffs, :
:
v. : Before: Pogue, Judge
: Consol. Ct. No. 05-00003
UNITED STATES, et al. :
:
Defendants. :
:
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ORDER FOR REMAND
This remand order follows the Court of Appeals for the Federal
Circuit’s opinion in Dorbest Ltd. v. United States, 604 F.3d 1363
(Fed. Cir. 2010) (“Dorbest IV”), affirming in part and vacating in
part this court’s previous determinations. See Dorbest Ltd. v.
United States, 30 CIT 1671, 462 F. Supp. 2d 1262 (2006) (“Dorbest
I”); Dorbest Ltd. v. United States, CIT , 547 F. Supp. 2d 1321
(2008) (“Dorbest II”); Dorbest Ltd. v. United States, CIT ,
602 F. Supp. 2d 1287 (2009) (“Dorbest III”).1
In Dorbest I, the court addressed Plaintiffs’ facial challenge
to the Department of Commerce’s (“Commerce”) regulation, 19 C.F.R.
1
Dorbest I, Dorbest II, and Dorbest III also addressed
other issues not raised before the Federal Circuit; these other
issues are not discussed in this order.
Consol. Court No. 05-00003 Page 2
§ 351.408(c)(3)(2003),2 mandating that a regression analysis be
utilized in calculating labor rates in order to determine the cost
of production (“COP”) for nonmarket economies pursuant to section
773 of the Tariff Act of 1930, 19 U.S.C. § 1677b(c)(2000). Dorbest
I, 30 CIT at 1705, 462 F. Supp. 2d at 1292. Specifically,
Plaintiffs argued that the regression regulation is inconsistent
with the statutory requirement to use “the prices or costs of
factors of production in one or more market economy countries that
are –- . . . (A) at a level of economic development comparable to
that of the nonmarket economy country, and . . . (B) significant
producers of comparable merchandise.” 19 U.S.C. § 1677b(c)(4). The
court rejected Plaintiff’s position on this issue. 30 CIT at 1705,
462 F. Supp. 2d at 1292. However, the court remanded as to the
issue of Commerce’s application of the challenged regulation. 30
CIT at 1706-15, 462 F. Supp. 2d at 1292-1300.
In addition, Dorbest I disapproved of Commerce’s use of data
from four surrogate country companies to derive financial ratios
for calculation of (1) factory overhead (“overhead”), (2) selling,
general, and administrative expenses (“SG&A”), and (3) profit for
the COP of the subject merchandise. 30 CIT at 1715, 1721-24, 462 F.
2
Section 351.408(c)(3) dictates that Commerce, “[f]or
labor, . . . will use regression-based wage rates reflective of
the observed relationship between wages and national income in
market economy countries. [Commerce] will calculate the wage rate
to be applied in nonmarket economy proceedings each year. The
calculation will be based on current data, and will be made
available to the public.”
Consol. Court No. 05-00003 Page 3
Supp. 2d at 1300, 1305-07. Because “a firm’s size may affect
certain of its financial ratios,” 30 CIT at 1722, 462 F. Supp. 2d
at 1306, the court found distortive the inclusion of financial
ratio data from the four smallest companies out of the data set,
and found insufficient Commerce’s explanation as to the inclusion
of these four companies, 30 CIT at 1721-24, 462 F. Supp. 2d at
1305-07. Therefore, the court remanded with instructions for
Commerce either to eliminate the four smallest companies from the
analysis or to adequately explain the inclusion. 30 CIT at 1723,
462 F. Supp. 2d at 1307.
After remand, the court affirmed Commerce’s application of its
labor wage rate calculation, Dorbest II, CIT at , 547 F. Supp.
2d at 1324-30, but the court once again remanded on the issue of
Commerce’s choice of surrogate companies used to calculate
financial ratios, CIT at , 547 F. Supp. 2d at 1338-44.3
Following the second remand, the court affirmed Commerce’s final
determination in total. Dorbest III, CIT at , 602 F. Supp. 2d
at 1294.
On appeal, the Federal Circuit vacated in part and affirmed in
part Dorbest I, Dorbest II, and Dorbest III. First, the Federal
3
The court also dismissed Dorbest’s argument for failure to
exhaust administrative remedies as to the calculation of the
surrogate value for profit for one of the surrogate companies ,
CIT at , 547 F. Supp. 2d at 1344, and determined that
another Plaintiff’s claims of a clerical error on the part of
Commerce had been waived, CIT at , 547 F. Supp. 2d at 1348.
Consol. Court No. 05-00003 Page 4
Circuit held that “Commerce’s method for calculating wage rates
uses data not permitted to be used by [19 U.S.C. § 1677b(c)].”
Dorbest IV, 604 F.3d at 1366. Accordingly, the Federal Circuit
“invalidate[d] [19 C.F.R. § 351.408(c)(3)] establishing [the wage
rate] calculation method” and vacated the court’s decision. Id.
Second, the Federal Circuit reversed the court’s holding as to
Commerce’s use of financial ratios, holding reasonable Commerce’s
use of the four smallest companies in calculating SG&A, overhead,
and profit. Id. at 1367, 1373-75.4
Therefore, in accordance with the decision of the United
States Court of Appeals for the Federal Circuit in Dorbest IV, and
upon consideration of the parties’ filings herein, it is hereby:
ORDERED that the final determination and issuance of an
antidumping duty order by Commerce in Wooden Bedroom Furniture From
the People’s Republic of China, 69 Fed. Reg. 67,313 (Dep’t Commerce
Nov. 17, 2004) (final determination of sales at less than fair
value), amended by Wooden Bedroom Furniture From the People’s
Republic of China, 70 Fed. Reg. 329 (Dep’t Commerce Jan. 4, 2005)
(notice of amended final determination of sales at less than fair
value and antidumping duty order), challenged in Consolidated Court
No. 05-00003, is remanded to Commerce for action consistent with
the decision in Dorbest IV; and it is further
4
In addition, the Federal Circuit affirmed Dorbest II on the
issues of administrative exhaustion and waiver. Id. at 1375-77.
Consol. Court No. 05-00003 Page 5
ORDERED that upon remand Commerce shall revise its final
determination and order in accordance with the decision in Dorbest
IV. Commerce shall specifically explain how its final determination
and order on remand complies with the Federal Circuit’s
interpretation of 19 U.S.C. § 1677b(c); and it is further
ORDERED that Commerce shall file its remand results in
Consolidated Court No. 05-00003 with the Court, and serve the
parties with same, by September 7, 2010. All parties may file and
serve responses thereto by September 28, 2010. All parties may
file and serve a reply to any responses by October 12, 2010; and it
is further
ORDERED that all other action in Consolidated Court No. 05-
00003 before this Court is stayed pending further notice from the
Court.
/s/ Donald C. Pogue
Donald C. Pogue, Judge
Dated: July 21, 2010
New York, New York