Petitioners Contest Exclusion of In-Transit Mattresses From Quarterly Ratio Calculations

Filing a reply brief on Dec. 23 at the U.S. Court of Appeals for the Federal Circuit, the petitioners said Commerce "erroneously claimed" that "model-specific beginning inventory and in-transit sales data established as 'fact' that Zinus had a sufficient number of mattresses to support its model-specific sales when it did not."

In its brief, Brooklyn Bedding centered on two issues in the antidumping duty investigation on Indonesian mattresses: the exclusion of Zinus' in-transit mattresses from the quarterly ratio calculations and the use of Indonesian Global Trade Atlas data in applying the "transactions disregarded rule" to calculate Zinus' normal value. The Court of International Trade upheld both of these decisions following two remand proceedings (see 2502180056).

Regarding the quarterly ratio calculations, Commerce initially included Zinus' in-transit mattresses, since the respondent's total aggregate mattress sales were "greater than the number of mattresses Zinus had in its inventory," and because the respondent's records didn't show any inventory unaccounted for in the agency's calculation. However, after the second remand, the agency got new inventory data from Zinus that "definitively showed" the company had a "greater total number of mattresses in its inventory than its number of mattresses sold during the" investigation period, the U.S. said (see 2512040051).

The data also showed that none of the in-transit mattresses entered Zinus' inventory during the investigation period. The U.S. said Commerce thus reasonably excluded in-transit mattresses from the calculations, since the reason they were included in the first place, "discrepancies in aggregate mattress totals," no longer existed.

In response, Brooklyn Bedding said the U.S. "ignores" that the reason the agency focused on aggregate totals in the original investigation and first remand was because "model-specific inventory data was not on the record at the time of these determinations." Commerce clarified that it considered this model-specific information in its second remand, finding that Zinus' "model-specific beginning inventory and in-transit sales data and supporting accounting record" established that it had a "sufficient number of the Indonesian model numbers that were in common with other countries in its physical inventory to support the U.S. sale of such products reported as non-subject merchandise in its U.S. database."

Brooklyn Bedding said that, "contrary to the United States’ post-hoc assertions," Commerce didn't simply focus its findings on "aggregate totals but instead specifically cited Zinus U.S.’s model-specific inventory data, erroneously asserting that this model-specific data supported its conclusions."

The petitioner added that Commerce also failed to acknowledge that the "actual, all-country inventory and sales data placed on the record by Zinus demonstrated that it was, in fact, possible for Zinus U.S. to sell more mattresses than it physically held in its inventory." While the agency could have offered other explanations for why introducing the inventory data to the quarterly ratio calculations was reasonable, the only reason it did offer, "that it was 'impossible' for Zinus U.S. to sell more mattresses than were physically present in its inventory," is "disproven" by the record, the brief said.

Commerce additionally erred by relying on Zinus' "unverified inventory data." Neither Zinus nor the U.S. "dispute that the inventory data was not verified" or that the Court of International Trade failed to address the issue, relying only on claims that Brooklyn Bedding failed to raise the issued administratively. "Such concerns are overblown," the brief said, since the issue is a pure question of law and the petitioners did raise concerns "with Commerce’s reliance on unverified inventory data in its calculations in their comments before the U.S. Court of International Trade."