Jacobi Carbons AB v. United States

• Citation: 222 F.Supp.3d 1159
• Decision Date: 07 April 2017
• Docket Number: Consol. Court No. 15–00286,Slip Op. 17–39
• Parties: JACOBI CARBONS AB and Jacobi Carbons, Inc., Plaintiffs, Ningxia Huahui Activated Carbon Co., Ltd., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd., Beijing Pacific Activated Carbon Prods. Co., Ltd., Datong Municipal Yunguang Activated Carbon Co., Ltd., Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Co., Ltd., Ningxia Mineral and Chemical Ltd., Shanxi DMD Corp., Shanxi Industry Tech. Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., Tianjin Maijin Industries Co., Ltd., and Cherishmet Inc., Plaintiff–Intervenors, v. UNITED STATES, Defendant, and Calgon Carbon Corp. and Cabot Norit Am., Inc., Defendant–Intervenors.
• Court: U.S. Court of International Trade

222 F.Supp.3d 1159

JACOBI CARBONS AB and Jacobi Carbons, Inc., Plaintiffs,

Ningxia Huahui Activated Carbon Co., Ltd., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd., Beijing Pacific Activated Carbon Prods. Co., Ltd., Datong Municipal Yunguang Activated Carbon Co., Ltd., Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Co., Ltd., Ningxia Mineral and Chemical Ltd., Shanxi DMD Corp., Shanxi Industry Tech. Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., Tianjin Maijin Industries Co., Ltd., and Cherishmet Inc., Plaintiff–Intervenors,

v.UNITED STATES, Defendant,andCalgon Carbon Corp. and Cabot Norit Am., Inc., Defendant–Intervenors.

Slip Op. 17–39

Consol. Court No. 15–00286

United States Court of International Trade.

April 7, 2017

Daniel L. Porter , Curtis, Mallet–Prevost, Colt & Mosle LLP, of Washington, DC, argued for Plaintiffs. With him on the brief were James P. Durling , Claudia D. Hartleben , and Tung Nguyen .

Gregory S. Menegaz , DeKieffer & Horgan PLLC, of Washington, DC, argued for Plaintiff–Intervenors Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Co., Ltd., Ningxia Mineral and Chemical Ltd., Shanxi DMD Corp., Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd. With him on the brief were J. Kevin Horgan , Alexandra H. Salzman , and Judith L. Holdsworth .

Jeffrey S. Grimson , Kristin H. Mowry , Jill A. Cramer , Sarah M. Wyss , Yuzhe Pengling , and James C. Beaty , Mowry & Grimson, PLLC, of Washington, DC, for Plaintiff–Intervenor Ningxia Huahui Activated Carbon Co., Ltd.

Francis J. Sailor and Dharmendra N. Choudhary , Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Plaintiff–Intervenors Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd, Beijing Pacific Activated Carbon Products Co., Ltd., Datong Municipal Yunguang Activated Carbon Co., Ltd, and Cherishmet Inc.

Antonia R. Soares , Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Reginald T. Blades, Jr ., Assistant Director. Of counsel on the brief was Heather Doherty , Attorney–International, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Melissa M. Brewer , Kelley Drye & Warren LLP, of Washington, DC, argued for Defendant–Intervenors Calgon Carbon Corp. and Cabot Norit Americas, Inc. With her on the brief were John M. Herrmann , David A. Hartquist , and R. Alan Luberda .

OPINION

Barnett, Judge:

Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc. (together, "Jacobi"), and Plaintiff–Intervenors¹ (collectively, with Jacobi, "Plaintiffs"), move, pursuant to United States Court of International Trade ("USCIT") Rule 56.2, for judgment on the agency record, challenging the United States Department of Commerce's ("Defendant" or "Commerce") Final Results in the seventh administrative review ("AR7") of the antidumping duty order on certain activated carbon from the People's Republic of China ("PRC").² See Certain Activated Carbon from the People's Republic of China , 80 Fed. Reg. 61,172 (Dep't Commerce Oct. 9, 2015) (final results of antidumping duty administrative review; 2013–2014) (" Final Results "), PJA Tab 42, PR 414, ECF No. 85–4, and accompanying Issues and Decision Memorandum , A–570–904 (Oct. 2, 2015) ("Final I & D Mem. "), PJA Tab 39, PR 407, ECF No. 85–4.

Plaintiffs argue that Commerce erred in (1) rejecting the Philippines and selecting Thailand as the primary surrogate country, (2) using Thai import data as the surrogate value for carbonized material, and (3) reducing Jacobi's constructed export price ("CEP") by an amount for Chinese value added tax ("VAT"). See generally Confidential Pls. Jacobi Carbons AB and Jacobi Carbons, Inc.'s Mot. for J. on the Agency R. and Pls.' Br. in Supp. of their Mot. for J. on the Agency R. ("Jacobi Mem."), ECF No. 51; Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mot. for J. on the Agency R., ECF No. 59; Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mem. in Supp. of Mot. for J. on the Agency R. ("CATC Mem."), ECF No. 59–2 (incorporating Jacobi's arguments and providing additional arguments on all issues); Pl.–Intervenor Ningxia Huahui Activated Carbon Co., Ltd.'s Rule 56.2 Mot. for J. on the Agency R. ("Huahui Mem."), ECF No. 58 (incorporating Jacobi's arguments regarding surrogate country and surrogate value selection, adopting Jacobi's arguments regarding VAT and making additional arguments thereto); Mot. of GDLSK Pl.–Intervenors for J. on the Agency R. under USCIT Rule 56.2 and Mem. of Law in Supp. of GDLSK Pls.' Rule 56.2 Mot. for J. on the Agency R. ("GDLSK Mem."), ECF No. 60 (adopting all arguments made by Jacobi and providing additional argument regarding the VAT).³ For the following reasons, the court remands the determination to Commerce to clarify and, if necessary, revise its findings on the issues of the economic comparability and significant production of Thailand, and the irrecoverable VAT calculation. The court defers ruling on Plaintiffs' challenges to Commerce's surrogate value selections pending the results of the redetermination.

BACKGROUND

I. Preliminary Proceedings

On May 29, 2014, Commerce initiated AR7 on certain activated carbon from China for the period of review ("POR") April 1, 2013 to March 1, 2014. Initiation of Antidumping and Countervailing Duty Administrative Reviews , 79 Fed. Reg. 30,809 (Dep't Commerce May 29, 2014), PJA Tab 6, PR 18, ECF No. 85–1.⁴ Commerce selected Jacobi and Datong Juqiang Activated Carbon Co., Ltd. ("DJAC") as mandatory respondents for individual examination for AR7 "because they constitute the PRC exporters accounting for the largest volume of U.S. imports of subject merchandise that can reasonably be examined." Selection of Respondents for Individual Review (June 26, 2014) at 1, CJA Tab 10, CR 5, ECF No. 86.

On July 25, 2014, Commerce invited interested parties to comment on surrogate country selection and surrogate value data. See Request for Surrogate Country and Surrogate Value Comments and Information (July 25, 2014) ("Commerce SC Letter"), PJA Tab 43, PR 64, ECF No. 85–4. Commerce provided interested parties with a "non-exhaustive list of countries" that, based on 2012 per capita gross national income ("GNI"), Commerce's Office of Policy ("OP") considered economically comparable to the PRC. Id. at 1; see also id. , Attach. 1 ("OP SC List for AR7") (listing South Africa, Colombia, Bulgaria, Thailand, Ecuador, and Indonesia as economically comparable countries). Commerce invited interested parties to propose additional countries. Id. at 1.

On November 12, 2014, Jacobi submitted surrogate country comments. See Jacobi's Initial Comments on Surrogate County Selection (Nov. 12, 2014) ("Jacobi SC Comments"), PJA Tab 4, PR 178, ECF No. 85–1. Jacobi urged Commerce to rely on 2013 GNI data from the World Bank's "World Development Indicators Database," and asserted that data therein demonstrates the Philippines' economic comparability to China. Id. at 3. On March 31, 2015, DJAC submitted surrogate value information proposing Thai Harmonized System ("HS") code 4402.90.1000, "Of Coconut Shell," to value carbonized material. Second Surrogate Value Submission by Datong Juqiang Activated Carbon Co., Ltd. (March 31, 2015) ("DJAC Second SV Submission"), Ex. 2A ("Thai Import Statistics"), PJA Tab 15, PR 322, ECF No. 85–3.

On May 5, 2015, Commerce published its Preliminary Results . See Certain Activated Carbon from the People's Republic of China , 80 Fed. Reg. 25,669 (Dep't Commerce May 5, 2015) (prelim. results of antidumping duty admin. review: 2013–2014) ("Prelim. Results "), PJA Tab 23, PR 351, ECF No. 85–3, and accompanying Issues and Decision Memorandum , A–570–904 (Apr. 29, 2015) ("Prelim. I & D Mem. "), PJA Tab 17, PR 335, ECF No. 85–3. Commerce selected Thailand as the primary surrogate country. Id. at 17. Commerce explained that Bulgaria, Ecuador, Romania, South Africa, Thailand, and Ukraine are economically comparable to the PRC on the basis of 2013 GNI data; the Philippines are Indonesia are not. Id. at 14–15. Of the economically comparable countries, Commerce relied on Global Trade Atlas export data to find that Ecuador, Thailand, and South Africa are significant producers of comparable merchandise. Id. at 16; see also Surrogate Values for the Preliminary Results (Apr. 29, 2015) ("Prelim. SV Mem."), Attach. 1 ("Global Trade Atlas Reporting Country Export Statistics"), PJA Tab 18, PR 336–39, ECF No. 85–3.

Interested parties had placed Indonesian, Thai, Philippine, and Ukrainian surrogate value data on the record for Commerce's consideration. Prelim. I & D Mem. at 16. Commerce rejected the Philippine and Indonesian data because it did not find those countries to be economically comparable, and it determined it had "sufficiently reliable and useable [surrogate value] data" from a comparable country, Thailand. Id. at 16–17, 27. Relevant here, Commerce selected the 2010 audited financial statement of Carbokarn Co., Ltd. ("Carbokarn"), a Thai activated carbon company, to value factory overhead, selling, general, and administrative expenses, and profit. Id. at 26.⁵ Commerce selected...