CVB, Inc. v. United States

675 F.Supp.3d 1324

CVB, INC., Plaintiff, v. UNITED STATES, Defendant,andBrooklyn Bedding, LLC, et al., Defendant-Intervenors.

Slip Op. No. 23-184 Court No. 1:21-cv-00288 (SAV)

United States Court of International Trade

December 19, 2023

Geoffrey M. Goodale, Duane Morris LLP, of Washington, DC, for Plaintiff CVB, Inc. With him on the briefs were Andrew R. Sperl, Nathan J. Heeter, and Lauren E. Wyszomierski, Duane Morris LLP, and Stephen G. Larson, Robert C. O'Brien, and Paul A. Rigali, Larson LLP, of Los Angeles, CA.

Jane C. Dempsey, Office of the General Counsel, United States International Trade Commission, of Washington, DC, for Defendant United States. With her on the briefs were Dominic Bianchi, General Counsel; Andrea C. Casson, Assistant General Counsel for Litigation; and Brian R. Soiset, Attorney-Advisor.

Mary Jane Alves, Cassidy Levy Kent (USA) LLP, of Washington, DC, for Defendant-Intervenors Brooklyn Bedding, LLC; Corsicana Mattress Company; Elite Comfort Solutions; FXI, Inc.; Innocor, Inc.; Kolcraft Enterprises, Inc.; Leggett & Platt, Inc.; the International Brotherhood of Teamsters; and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO. With her on the briefs were Yohai Baisburd and Sydney Reed.

OPINION

Vaden, Judge:

CVB, Inc. (CVB) challenges the International Trade Commission's (ITC or the Commission) final affirmative injury determination in its antidumping and countervailing duty investigations of mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam. See Compl. ¶ 1, ECF No. 8; Mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam, 86 Fed. Reg. 26,545 (ITC May 14, 2021), J.A. at 14,715, ECF No. 60; Mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam (Final Determination), Inv. Nos. 701-TA-645 and 731-TA-1495-1501 (Final), USITC Pub. No. 5,191 (May 2021), J.A. at 124,040, ECF No. 66. Defendant-Intervenors in support of the Commission's final affirmative injury determination are Brooklyn Bedding, LLC; Corsicana Mattress Co.; Elite Comfort Solutions; FXI, Inc.; Innocor, Inc.; Kolcraft Enterprises, Inc.; Leggett & Platt, Inc.; the International Brotherhood of Teamsters; and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO (collectively, Defendant-Intervenors). See Def.-Ints.' Resp. to Pl.'s Mot. for J. on the Agency R. (Def.-Ints.' Resp.) at 1, ECF No. 53. Before the Court is CVB's Motion for Judgment on the Agency Record. Pl.'s Mot. for J. on the Agency R. (Pl.'s Br.), ECF No. 48. CVB contends that the Commission's final affirmative injury determination is unsupported by substantial evidence. Id. at 1-2. For the reasons set forth below, the Court SUSTAINS the Commission's determination.

BACKGROUND

A. Procedural History

On March 31, 2020, the Defendant-Intervenors petitioned the Department of Commerce and the Commission to impose antidumping and countervailing duties on imports of mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam (the Subject Countries). See Petition: Mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam: Antidumping and Countervailing Duty Petitions, J.A. at 1,000-3,951, ECF No. 60. The Commission's period of investigation covered calendar year 2017 through September 2020. Def.'s Resp. to Pl.'s Mot. for J. on the Agency R. (Def.'s Resp.) at 6, ECF No. 51. On May 15, 2020, the Commission issued its preliminary determination. See Mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam, 85 Fed. Reg. 30,984 (ITC May 21, 2020), J.A. at 9,046, ECF No. 60; Mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam, Inv. Nos. 701-TA-645 and 731-TA-1495-1501 (Preliminary), USITC Pub. No. 5,059 (May 2020), J.A. at 9,048-373, ECF No. 60. Nearly one year later, on May 14, 2021, the Commission published its final determination. See Final Determination, J.A. at 124,040-570, ECF No. 66.

B. Prior Mattresses from China Investigation

In December 2019, three months before the underlying petition in this case, the Commission published its final affirmative injury determination in an investigation of Chinese mattress imports. Mattresses from China, Inv. No. 731-TA-1424 (Final), USITC Pub. No. 5,000 (December 2019), J.A. at 6,505-62, ECF No. 60. In 2017 and 2018, Chinese imports accounted for roughly four-fifths of cumulated subject imports. Final Determination at 39, J.A. at 124,081, ECF No. 66. In 2019, Chinese imports constituted less than one-third of all imports while subject imports from other countries rose by thousands of percent. Id. at 39-40, J.A. at 124,081-82. Between interim 2019 and interim 2020, Chinese imports declined to almost nothing; but subject imports from other countries rose a further two hundred percent. Id. at 40, J.A. at 124,082. These imports from other countries were often from companies related to Chinese producers that no longer exported their products to the United States. Id. At 39 n. 165, 40 n.168, J.A. at 124,081-82.

C. The Present Factual Record

The Commission began its material injury investigation by defining the "domestic like product." Final Determination at 7-9, J.A. at 124,049-51, ECF No. 66; see also 19 U.S.C. § 1677(10). The Commission defined the domestic like product as:

The products covered by this investigation are all types of youth and adult mattresses. The term "mattress" denotes an assembly of materials that at a minimum includes a "core," which provides the main support system of the mattress, and may consist of innersprings, foam, other resilient filling, or a combination of these materials. Mattresses may also contain (1) "upholstery," the material between the core and the top panel of the ticking on a single-sided mattress, or between the core and the top and bottom panel of the ticking on a double-sided mattress; and/or (2) "ticking," the outermost layer of fabric or other material (e.g., vinyl) that encloses the core and any upholstery, also known as a cover.

The scope of this investigation is restricted to only "adult mattresses" and "youth mattresses." [. . . .] All adult and youth mattresses are included regardless of size or size description.

The scope encompasses all types of "innerspring mattresses," "non-innerspring mattresses," and "hybrid mattresses." [. . . .]

Mattresses covered by the scope of this investigation may be imported independently, as part of furniture or furniture mechanisms (e.g., convertible sofa bed mattresses, sofa bed mattresses imported with sofa bed mechanisms, corner group mattresses, day-bed mattresses, roll-away bed mattresses, high risers, trundle bed mattresses, crib mattresses), or as part of a set in combination with a "mattress foundation." [. . . .]

Excluded from the scope of this investigation are "futon" mattresses. [. . . .]

Also excluded from the scope are airbeds (including inflatable mattresses) and waterbeds, which consist of air- or liquid-filled bladders as the core or main support system of the mattress. Also excluded is certain multifunctional furniture that is convertible from seating to sleeping [. . . .] Such furniture may, and without limitation, be commonly referred to as "convertible sofas," "sofa beds," "sofa chaise sleepers," "futons," "ottoman sleepers" or a like description. Also excluded from the scope of this investigation are any products covered by the existing antidumping duty orders on uncovered innerspring units from China or Vietnam.

Also excluded from the scope of this investigation are bassinet pads with a nominal length of less than 39 inches, a nominal width less than 25 inches, and a nominal depth of less than 2 inches. Additionally, also excluded from the scope of this investigation are "mattress toppers." [. . . .]

Final Determination at 7-9, J.A. at 124,049-51, ECF No. 66 (internal citations omitted). No party challenges the like product definition, which includes many mattress varieties. See Def.'s Resp. at 7, ECF No. 51 ("During the final phase, CVB did not argue for another domestic like product definition or against cumulation, and it does not challenge the Commission's findings on these issues."); Pl.'s Reply at 6-7, ECF No. 58 (agreeing that CVB did not challenge the domestic like product determination and distinguishing its argument from a challenge to the domestic like product determination).

Mattresses are either boxed or flat-packed. Both packaging methods are included in the domestic like product definition. See Def.'s Resp. at 6-7, ECF No. 51; Pl.'s Reply at 4, ECF No. 58. Boxed mattresses are compressed and rolled into a box for shipping, while flat-packed mattresses are boxed as-is and not compressed. Statement of Brian Adams at 143:7-13, J.A. at 7,569, ECF No. 60. Shipping boxed mattresses is typically cheaper and easier than shipping flat-packed mattresses because boxed mattresses are smaller when packaged. Id. at 144:7-17, J.A. at 7,570. Consumers can transport boxed mattresses themselves or have them delivered to their door, whereas flat-packed mattresses require specialized delivery. Id. at 144:13-45:11, J.A. at 7,571-72. CVB argued throughout the administrative proceeding that the two packaging methods represent distinct, segmented markets with little direct competition. See, e.g., Pl.'s Reply at 6, ECF No. 58 ("[C]ompetition between the [flat-packed] and [boxed mattress] segments is highly attenuated").

The Commission based its U.S. industry data on responses from fifty-three domestic producers that represented the vast majority of domestic production in 2019. Final Determination at III-1, J.A. at 124,193, ECF No. 66. It based its U.S. import data on questionnaire responses from forty-nine companies that represented the majority of...