248 F.Supp.2d 1323 (CIT. 2003), 00-00223, Hontex Enterprises, Inc. v. United States

Docket Nº:Court No. 00-00223.
Citation:248 F.Supp.2d 1323
Party Name:HONTEX ENTERPRISES, INC., d/b/a/ Louisiana Packing Co., Plaintiff, v. UNITED STATES of America, Defendant, and Crawfish Processors Alliance & the Louisiana Department of Agriculture & Forestry & Bob Odom, Commissioner, Defendant-Intervenors. SLIP OP. 03-17.
Case Date:February 13, 2003
Court:Court of International Trade
 
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248 F.Supp.2d 1323 (CIT. 2003)

HONTEX ENTERPRISES, INC., d/b/a/ Louisiana Packing Co., Plaintiff,

v.

UNITED STATES of America, Defendant,

and

Crawfish Processors Alliance & the Louisiana Department of Agriculture & Forestry & Bob Odom, Commissioner, Defendant-Intervenors.

SLIP OP. 03-17.

Court No. 00-00223.

United States Court of International Trade.

Feb. 13, 2003

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        Coudert Brothers LLP (John M. Gurley and Matthew J. McConkey) for Plaintiff Hontex Enterprises, Inc.

        Robert D. McCallum, Jr., Assistant Attorney General, Civil Division, United States Department of Justice; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Lucius B. Lau, Assistant Director, International Trade Section, Commercial Litigation Branch, Civil Division, United States Department of Justice (Jeffrey A. Belkin); Arthur D. Sidney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for Defendant United States, of counsel.

        Adduci, Mastriani & Schaumberg, L.L.P. (James Taylor, Jr.), John C. Steinberger, for Defendant-Intervenors Crawfish Processors Alliance and the Louisiana Department of Agriculture and Forestry and Bob Odom, Commissioner, of counsel.

        OPINION AND ORDER

        EATON, Judge.

        This matter is before the court on the motion of Plaintiff Hontex Enterprises, Inc. ("Hontex") 1 for judgment upon the agency record pursuant to USCIT R. 56.2. Hontex challenges certain aspects of the first administrative review of the antidumping duty order, with respect to exporter Ningbo Nanlian Frozen Foods Company, Ltd. ("NNL"), 2 covering its imports of freshwater crawfish tail meat from

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the People's Republic of China ("PRC") for the period of April 1, 1998, through August 31, 1998. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(i)(I) (2000). Where a party challenges the results of an antidumping administrative review, the "court shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law...." 19 U.S.C. § 1516a(b)(1)(B)(i). For the reasons set forth below, the court remands this matter to United States Department of Commerce (the "Department" or "Commerce") with instructions to conduct further proceedings in conformity with this opinion.

        BACKGROUND

        Commerce conducted its original investigation of the subject merchandise for the period of review of March 1, 1996, through August 31, 1996. See Freshwater Crawfish Tail Meat From the PRC, 62 Fed.Reg. 41,347, 41,347 (ITA Aug. 1, 1997) (final determination). As a result of this investigation, Commerce issued an antidumping order pursuant to which several exporters received company-specific antidumping duty margins, several received "cooperative" margins, and the remainder received the "PRC-wide" duty margin-which was set at 201.63 percent. See id. at 41,358. One of the exporters investigated, which was eventually identified as Huaiyin Foreign Trade Corporation (5) ("HFTC5"), was assigned a company-specific antidumping duty margin of 91.50 percent. See Freshwater Crawfish Tail Meat From the PRC, 65 Fed.Reg. 20,948, 20,949 (ITA Apr. 19, 2000) (final results of admin. rev.; rescission of new shipper rev.) ("Final Results") ("The HFTC entity now known as HFTC5, a.k.a. Huaiyin Cereals and Oils Import and Export Corporation, is the same HFTC entity that was assigned a separate rate in the [less than fair value] investigation.").

        On March 27, 1998, NNL requested a new shipper review. See Freshwater Crawfish Tail Meat From the PRC, 63 Fed.Reg. 25,449 (ITA May 8, 1998) (initiation of new shipper rev.). This review covered the period of September 1, 1997 (the anniversary date of the original investigation), through March 31, 1998. Id. at 25,449. Following this review Commerce determined that for this period NNL's antidumping duty margin was 0.0 percent. See Freshwater Crawfish Tail Meat From the PRC, 64 Fed.Reg. 27,961, 27,966 (ITA May 24, 1999) (final results of new shipper rev.).

        Commerce then received a petition for administrative review of the antidumping duty order covering the subject merchandise. See Initiation of Antidumping and Countervailing Duty Admin. Rev., 63 Fed.Reg. 58,009 (ITA Oct. 29, 1998) (requests for revocation in part and deferral of admin. revs.). In its notice of initiation, Commerce identified HFTC5 and NNL (the "Companies") as exporters covered by the review. See id. at 58,010. The period of review ("POR") was generally identified as March 26, 1997, through August 31, 1998, id.; because NNL had participated in a new shipper review, however, NNL's POR was identified as April 1, 1998, through August 31, 1998 ("NNL's POR"). Freshwater Crawfish Tail Meat From the PRC, 64 Fed.Reg. 55,236, 55,237 (ITA Oct. 12, 1999) (prelim. results of rev.) ("Preliminary Results").

        Commerce then sent antidumping questionnaires to the Companies, responses to

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which were timely filed. In these responses both NNL and HFTC5 requested company-specific antidumping duty margins and provided evidence of their claimed de jure and de facto independence from government control. In addition, the Companies claimed that they did not share managers or owners, or share common control with other crawfish tail meat exporters. (See NNL Section A Resp., Pub. R. Doc. 19, Attach. at 3; HFTC5 Section A Resp., Pub. R. Doc. 24, Attach. at 4.) Shortly after filing its questionnaire response, HFTC5 informed Commerce that it would not submit to verification. (See letter from law firm of Arent Fox Kintner Plotkin & Khan ("Arent Fox") to Commerce of 5/4/99, Pub. R. Doc. 55.) HFTC5 stated that it was unable to further participate because it "could not persuade [its] suppliers to cooperate." (Letter from Arent Fox to Commerce of 5/21/99, Pub. R. Doc. 56 Attach.)

        Commerce then published the preliminary results of its investigation. Based on information submitted by NNL, Commerce determined that NNL had demonstrated its de facto and de jure independence from state control and, thus, NNL was assigned a preliminary company-specific antidumping duty margin of 0.0 percent. Preliminary Results, 64 Fed.Reg. at 55,240, 55,242. Because HFTC5 had contacted Commerce to state that it was refusing verification, Commerce determined that HFTC5 would receive the PRC-wide antidumping duty margin of 201.63 percent. Id. at 55,239, 55,242. In this regard Commerce stated that "[b]ecause [HFTC5] did not allow the Department to verify the information it submitted, we could not use the information. Therefore ... the use of [facts available] is required...." Id. at 55,238. 3 Commerce also stated that issues of the affiliations among several crawfish tail meat exporters were being investigated. Id. at 55,239 ("We have placed on the record of the new shipper reviews of Baolong Biochemical and Haiwang third party allegations that these companies may be affiliated with companies that exported during the investigation.").

        Prior to verification, questions arose as to the relationship between NNL and HFTC5 with respect to possible affiliation. Despite the Companies' representations that they did not share managers, a "Mr. Wei" 4 was listed on NNL's business license

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as its "Vice G. Manager," and this name also appeared on an HFTC5 sales invoice dated during NNL's POR. (See NNL Section A Resp., Pub. R. Doc. 19, Attach. Ex. 4; HFTC5 Section A Resp., Pub. R. Doc. 24, Attach. Ex. 2.) In order to clarify this relationship, Commerce sent NNL a letter asking it to "explain the contradiction between Ningbo Nanlian's claim [in its original questionnaire response] not to share managers with other Chinese crawfish exporters and the evidence on the record of this review that shows Mr. Wei Wei was a manager at both Ningbo Nanlian and HFTC[5] in 1998." (Letter from Commerce to Arent Fox of 1/12/00, Pub. R. Doc. 141.) NNL responded to this letter and claimed that Mr. Wei was not a manager of HFTC5 during NNL's POR but was, rather, "a part-time independent consultant" to that company since his resignation from HFTC5 on October 26, 1997. (See letter from Arent Fox to Commerce of 1/31/00, Pub. R. Doc. 146 at 4.) NNL also stated that Mr. Wei, during NNL's POR, "was not an officer or manager of Ningbo Nanlian either. He was a consultant." (Id. at 2 n. 2.)

        Commerce followed up its January 12 letter with a supplemental questionnaire in which it asked NNL to provide further facts concerning Mr. Wei's relationship with HFTC5. (See letter from Commerce to Arent Fox of 2/4/00, Pub. R. Doc. 147 Attach.) Specifically, Commerce asked that NNL provide information about payments Mr. Wei received from HFTC5 beginning in June of 1997, as well as information about his business relationship with HFTC5, the services he provided to HFTC5, and the nature of his involvement with HFTC5's customers following his "resignation" from that company on October 26, 1997. (See id.) NNL timely submitted responses to this supplemental questionnaire. (See letter from Arent Fox to Commerce of 2/11/00, Conf. R. Doc. 23 Attach. (question two); letter from Arent Fox to Commerce of 2/17/00, Pub. R. Doc. 169 Attach., Conf. R. Doc. 24 Attach. (question one and questions three through eight).) In these responses NNL provided the following information about HFTC5's relationship with Mr. Wei following his "resignation" from HFTC5: (1) for his services to HFTC5 Mr. Wei received a "commission" rather than a salary; (2) Mr. Wei was not a full-time employee but, rather, "a part-time consultant"; (3) due to his proficiency in English and knowledge of the subject merchandise Mr. Wei had, at the direction of HFTC5's General Manager, translated or drafted documents and telephoned customers...

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