Ashley, Ethan Allen file appeal for antidumping duties
Staff Staff -- Furniture Today, October 16, 2013
HIGH POINT — Ashley Furniture Inds. and Ethan Allen haven't given up on their fight to obtain a portion of antidumping duties they believe are legally theirs.
On Oct. 3, the two case goods and upholstery manufacturers filed an appeal with the U.S. Court of Appeals for the Federal Circuit saying they believe they should receive some of this money.
On Aug. 19, a three-judge panel of that court voted 3-1 to deny their original appeal. However, cases can be reheard by a full panel of at least 12 judges.
In filing the appeal, the companies said they believe they have a better chance at success with the full panel of judges.
"Ashley carefully reviewed the three-judge panel's split decision with counsel and concluded that a conflict with earlier court decisions coupled with unresolved issues regarding Ashley's constitutional claims are significant enough to warrant asking for a new hearing in front of all 12 judges," said Jeffrey S. Grimson, a partner in Washington-based Mowry & Grimson, a law firm representing Ashley.
Ethan Allen officials declined to comment on the matter.
At issue is whether the two companies have a right to receive a portion of duties collected in the Chinese wooden bedroom furniture case.
Under the Byrd Amendment provision of the federal Continued Dumping and Subsidy Offset Act, these duties are paid to companies - also known as petitioners - that publicly supported an antidumping investigation. Neither Ashley nor Ethan Allen were among the petitioners supporting the 2003 antidumping investigation.
In the furniture case, the petitioners argued and the government later determined that many Chinese made bedrooms were priced lower than materials costs, a violation of international trade laws.
The duties, which are applied to Chinese factories and paid by importers of record, aim to help offset this unfair pricing advantage.
Opponents of the duties say they have done little to protect or bring back jobs to the domestic wood industry because they have simply shifted bedroom production to other non-duty low cost countries such as Vietnam.
The Byrd Amendment has since been repealed and all duties collected after October 2007 are directed to the federal government. Ashley and Ethan Allen argue that they have a right to some of the duties collected before then.
Early last year, the Court of International Trade allowed $152 million in duties held up in the furniture case since around 2007 to be distributed to the petitioners. Ethan Allen and Ashley appealed this decision. While the courts did not stop the payments from being made to petitioners, the appeals were allowed to move forward.
Had the decision gone in its favor, Ashley would have received at least $32 million. Ethan Allen would receive more than $58 million, a figure based on estimates on duties U.S. Customs and Border Protection has held up from 2008-2010.
These companies argue that their position as U.S. producers entitles them to some of the duties. They claim that forcing them to take a position on the issue in order to qualify for the funds is a violation of their rights to free speech.
They also question what constitutes support in this particular case. For example, the appeal notes, former case goods producer Oakwood Interiors checked the support box in the International Trade Commission questionnaire and received distributions even though it took no further part in the proceeds.
"This issue also is of great practical importance to affected industries," attorneys wrote in the appeal. "Receiving a distribution can make the difference between operating at a profit or a loss...At the same time, being denied a distribution because of the company's speech is doubly harmful-not only is the speaker denied funding, but the money withheld is then given to the speaker's domestic competitors, who can use it for investments that secure a long-term competitive advantage."
It was not clear when the court will make a decision to hear the case. If it does, it could be several months before it gets heard, Grimson said.
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