Share this on

Award of $152 million in furniture duties could be decided soon

Ashley appeals to have court take another look

Thomas Russell -- Furniture Today, February 2, 2012

HIGH POINT — Ashley Furniture has appealed a court ruling in an effort to halt the federal government's distribution of $152 million in import duties to a group of its competitors.

If the appeal fails, the funds could be distributed after March 9 to about 20 U.S. furniture makers that supported the antidumping case against Chinese wood bedroom furniture producers nine years ago, sources said.

While tens of millions of dollars have already been distributed, the $152 million represents a portion of the duties that were held aside, pending challenges by Ashley and other companies that didn't support the original petition in 2003-04, but claim that they too deserve some of the funds.

Ashley, along with Furniture Brands International, Ethan Allen and Standard Furniture, have filed court cases claiming that forcing companies to take a position in support of the duties in order to get paid is, in effect, a violation of their First Amendment rights to free speech. Litigation in the case has been pending for five years.

The import duties, enacted in early 2005, aim to level the playing field for domestic producers that have been injured by Chinese bedroom imports deemed to be unfairly priced, sometimes lower than raw materials costs.

Duties collected on imports before Oct. 1, 2007, were distributed to the U.S. petitioners under a federal clause known as the Byrd Amendment. Since the amendment's repeal took effect, duties on imports shipped after that date have gone into the U.S. Treasury. The $152 million is a portion of the pre-repeal duties collected.

U.S. Customs and Border Protection, which distributes the duties, said last year that it had decided to begin disbursing the $152 million after Jan. 31, 2012.

But before the Jan. 31 deadline, Ashley filed a preliminary injunction that asked the Court of International Trade to prevent the distribution. As a result of this motion, the government said it would hold the funds until March 9 and then likely disburse them to the petitioners after that.

On Jan. 31, the court expressed an opinion that denied the preliminary injunction and also dismissed Ashley's claim that it was owed part of the $152 million.

On Wednesday, Ashley filed an appeal of that denial with the Court of Appeals for the Federal Circuit, aiming to prevent the distribution of funds before the cases are settled.

"The Constitution protects our right to express our opinion and we believe we are being unfairly punished for doing just that," Ashley said in a statement through its attorney, Mowry & Grimson. "As such, we have been actively preserving our rights in the U.S. courts and we intend to continue doing so. There is no rational reason for Customs to upset the status quo and give an enormous windfall to our competitors when the courts could ultimately decide that we are deserving of our fair share."

A legal source familiar with the case said this week that the Court of International Trade also has dismissed lawsuits by Ethan Allen and Furniture Brands seeking a share the Byrd monies. That same source indicated that the CIT has not yet ruled on Standard's case.

Another legal source said that motions similar to Ashley's injunction filed by Ethan Allen and Standard preventing the disbursement after Jan. 31 have been denied and that an injunction filed by Furniture Brands was still pending.

Ethan Allen declined to comment on the litigation, and Standard and Furniture Brands did not immediately respond to Furniture/Today's requests for comment.

Joe Dorn, an attorney representing the petitioners in the antidumping case, did not comment on the matter since it involved pending litigation.

Stanley Furniture, which has been among the largest recipients of the duties up to this point, said in its annual 10K report filed with the U.S. Securities and Exchange Commission this week, "Based on our allocation of the CDSOA funds distributed in each of the past six years, we could receive an additional $40 million of the remaining funds set aside by the government, although the extent to which and when such distributions ultimately may be received is uncertain."

Share this on

Ashley appeals to halt $152M Byrd distribution

Feb 17, 2012

Also by this author

Also by Thomas Russell

Featured Company

Brandwise Inc.

Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more