Seek to claim a portion of duties collected on Chinese bedroom furniture.
Thomas Russell -- Furniture Today
WASHINGTON, May 10, 2014 - (Furniture Today) Ethan Allen and Ashley Furniture are approaching the U.S. Supreme Court in what could be their last attempt to claim a portion of duties collected by the U.S. government on Chinese-made wooden bedroom furniture.
Mowry & Grimson, a Washington–based law firm representing the companies, filed a petition on May 2 asking the U.S. Supreme Court to hear the case on appeal. This petition, also known as a Writ of Certiorari, follows a decision in January by the U.S. Court of Appeals for the Federal Circuit not to have the case heard by a full 12-judge panel.
Ashley and Ethan Allen, which manufacture furniture in the U.S., believe they should receive a portion of the millions of dollars that have been distributed to other furniture manufacturers that actively supported the antidumping case on Chinese-made wooden bedrooms.
The exact amount that Ashley and Ethan Allen are requesting is unclear. By one estimate, the amount in dispute is more than $100 million.
Starting around 2006, the government held up the distribution of the funds due to litigation from manufacturers in other industries also seeking a portion of antidumping duties in their own respective businesses. These duties are assigned to manufacturers, but typically paid by importers of record.
In early 2012, although the matter was still winding its way through the courts, the government agreed to distribute about $152 million to U.S. furniture producers that had previously supported the antidumping case on Chinese-made wooden bedrooms.
The duties, in effect since early 2005, are the U.S. government’s way of helping offset unfair competition from Chinese producers that allegedly price finished goods at or below materials costs, a violation of international trade laws.
These duties originally were distributed to domestic producers that supported antidumping cases via the Byrd Amendment provision of the federal Continued Dumping and Subsidy Offset Act.
Congress repealed the Byrd Amendment in 2005, but petitioners that supported antidumping cases were allowed to collect duties on goods shipped to the U.S. until October 2007. In some cases, the funds continue to be distributed to domestic producers because the entries are still being liquidated by U.S. Customs and Border Protection.
Ethan Allen took no position in the antidumping case, and Ashley opposed it. While they both still manufacture case goods in the U.S., the two companies import a significant amount of their product lines, largely from Asia. Supporting the case would have pitted them against major retail customers that sell imported furniture.
As with similar cases in the crawfish and ball bearing industries that have been pursued in lower courts, officials say the case essentially is about free speech.
“One of the founding principles of America is freedom of speech,” said Todd Wanek, CEO of Ashley. “This case is about defending our right to speak our mind without government coercion.”
Ashley’s lawsuit to collect a portion of the duties dates back to September 2007. Ethan Allen filed its case in September 2008.
The two companies and their legal counsel argue that domestic producers should not be required to take a position on the antidumping issue in order to receive funds set aside for an industry that the U.S. International Trade Commission determined has been injured by unfairly priced imports.
“The only distinction between petitioners who have been denied distributions under the CDSOA, and many other companies that received them, is the content of their speech on a question of public concern and political controversy,” the May 2 petition states.
“And the reality is that the single biggest beneficiary of these Byrd funds so far – Stanley – is closing down factories, while Ashley continues to invest hundreds of millions of dollars in America,” Wanek added of Stanley’s recent decision to close its Young America bedroom plant in Robbinsville, N.C. “We are only asking to be treated fairly.”
Kevin Russell is a Supreme Court expert and partner at Goldstein & Russell. He has assisted Mowry & Grimson with this case since 2010.
“The First Amendment prohibits the Government from discriminating against companies and individuals based on their views on controversial issues like questions of national trade policy,” he said. “But that is exactly what the CDSOA does and what the Federal Circuit wrongly permitted,” he said.
Joe Dorn, an attorney with King & Spalding who represents U.S. furniture manufacturers that supported the case, declined comment as the issue involves pending litigation.
Those familiar with the case agree this could be a long shot for Ashley and Ethan Allen as the Supreme Court only hears a small percentage of the cases presented each year. A similar petition – albeit one that raised different questions relating to the distribution of Byrd funds – filed by ball bearing producer SKF, was rejected, officials noted.
Kristin Mowry, a partner in Mowry & Grimson, said that the government is expected to file its response over the summer. The court would not likely decide on whether to hear the case until September, following its summer recess.
The court can either take the case, deny hearing the case or send it directly back to the U.S. Court of Appeals for the Federal Circuit, she noted.
For other recent coverage of the Ashley and Ethan Allen appeal, see “Court of Appeals nixes antidumping funds” and “Ashley, Ethan Allen file appeal.”
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