Mid Continent Steel & Wire, Inc. v. United States

• Citation: 321 F.Supp.3d 1313
• Decision Date: 19 June 2018
• Docket Number: Court No. 17–00051,Slip Op. 18–73
• Parties: MID CONTINENT STEEL & WIRE, INC., Plaintiff, v. UNITED STATES, Defendant, and The Stanley Works (Langfang) Fastening Systems Co., Ltd., et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

321 F.Supp.3d 1313

MID CONTINENT STEEL & WIRE, INC., Plaintiff,

v.UNITED STATES, Defendant,andThe Stanley Works (Langfang) Fastening Systems Co., Ltd., et al., Defendant–Intervenors.

Slip Op. 18–73

Court No. 17–00051

United States Court of International Trade.

Dated: June 19, 2018

Adam H. Gordon, The Bristol Group PLLC, of Washington, DC, argued for plaintiff. With him on the brief was Ping Gong.

Sosun Bae, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of Counsel on the brief was Jessica DiPietro, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Lawrence J. Bogard, Neville Peterson LLP, of Washington, DC, argued for defendant-intervenors. With him on the brief was Peter J. Bogard.

OPINION

Eaton, Judge:

This case involves the final results of the seventh administrative review of the antidumping duty order on steel nails from the People's Republic of China, covering the period of review August 1, 2014, through July 31, 2015 ("POR"). Certain Steel Nails From the People's Rep. of China , 82 Fed. Reg. 14,344 (Dep't Commerce Mar. 20, 2017) (final results), as amended by 82 Fed. Reg. 19,217 (Dep't Commerce Apr. 26, 2017), and accompanying Issues and Decision Memorandum, P.R. 289 at bar code 3551476–01 ("Final I & D Memo") (collectively, the "Final Results").

In the Final Results, the United States Department of Commerce ("Commerce" or the "Department") found that dumping of the subject nails occurred during the POR and calculated an antidumping duty rate of 5.78 percent for The Stanley Works (Langfang) Fastening Systems Co., Ltd. and Stanley Black & Decker, Inc. (collectively, "Stanley"), a mandatory respondent in the review. See 82 Fed. Reg. at 19,218. Commerce also determined an "all-others" rate, pursuant to 19 U.S.C. § 1673d(c)(5)(A) (2012), equal to the 5.78 percent rate calculated for Stanley. Commerce applied the all-others rate to the seventeen companies that qualified for a separate rate, but were not individually examined (the "Separate Rate Companies"). See 82 Fed. Reg. at 19,218. The Department assigned the only other mandatory respondent in the review, Tianjin Lianda Group Co., Ltd. ("Lianda"), the countrywide rate (the "PRC-wide rate") of 118.04 percent because it failed to establish independence from the Chinese government. See Final I & D Memo at 29; see also 82 Fed. Reg. at 19,219.

Mid Continent Steel & Wire, Inc. ("plaintiff" or "Mid Continent"), a U.S. fastener producer, was the petitioner in the underlying review, and commenced this action to challenge certain aspects of the Final Results. Mid Continent contends that: (1) Commerce's assignment of the 5.78 percent all-others rate to the Separate Rate Companies is neither in accordance with law nor supported by substantial evidence primarily because it does not reflect the companies' "economic reality"; (2) Commerce's valuation of Stanley's sealing tape input is not based on the best available information because the surrogate import data Commerce used to value the tape, although more specific as to the base material, does not account for its adhesiveness; and (3) Commerce's valuation of Stanley's plastic granules input is not based on the best available information primarily because the granules are finished products, i.e. , ready for their ultimate use, not unfinished products "in primary form," as Commerce found. See Pl.'s Br. Supp. Mot. J. Agency R., ECF No. 29–1 ("Pl.'s Br."); see also Pl.'s Reply Br., ECF 34. Mid Continent asks the court to remand this matter to Commerce with instructions to recalculate the all-others rate and to amend its valuation of Stanley's sealing tape and plastic granules.

The United States (the "Government"), on behalf of Commerce, maintains that the Final Results are supported by substantial evidence and otherwise in accordance with law. See Def.'s Resp. Mot. J. Agency R., ECF No. 33 ("Def.'s Resp."). For its part, Stanley urges the court to find that the record supports Commerce's valuation of its sealing tape and plastic granules. See Stanley's Mem. Opp'n Mid Continent Mot. J. Admin. R., ECF No. 32 ("Stanley's Br.").

The court has jurisdiction under 28 U.S.C. § 1581(c) (2012), and, for the reasons below, sustains the Final Results.

BACKGROUND

On October 6, 2015, Commerce initiated the seventh administrative review of the subject order. See Initiation of Antidumping and Countervailing Duty Admin. Rev. , 80 Fed. Reg. 60,356 (Dep't Commerce Oct. 6, 2015). Commerce asserts that, because of the large number of exporters involved in the review (48), it limited the number of individually examined exporters to two companies. See Selection of Respondents for Individual Rev. (Dec. 16, 2015), P.R. 76 at 3, 5, bar code 3426396–01, ECF No. 30 at tab 8. Commerce selected Stanley and Lianda as mandatory respondents based on their volume of exports, pursuant to 19 U.S.C. § 1677f–1(c)(2)(B). Stanley was the largest exporter, and Lianda was the fourth largest exporter, of steel nails from China during the POR. See Third Selection of Respondent for Individual Rev. (Feb. 29, 2016), P.R. 129 at bar code 3446401–01, ECF No. 30 at tab 12.

It is worth noting that, although two companies, Tianjin Zhonglian Metals Ware Co., Ltd. ("Zhonglian"), and Suzhou Xingya Nail Co., Ltd. ("Suzhou"), exported higher volumes of subject merchandise than Lianda during the POR, neither exporter participated as a mandatory respondent, or otherwise, because (1) Mid Continent withdrew its request for review of Zhonglian, and (2) Suzhou withdrew from the review early in the proceeding, refusing to cooperate with the Department. See Third Selection of Respondent for Individual Rev. at 2–3.

During the review, Commerce issued its nonmarket economy questionnaires to Stanley and Lianda. Based on Stanley's responses, Commerce determined that the company successfully rebutted the presumption of de jure and de facto control¹ by the Chinese government and was therefore eligible for a separate, company-specific rate. See Decision Mem. for the Prelim. Results (Sept. 6, 2016), P.R. 256 at 11, ECF No. 30 at tab 6 ("Prelim. Dec. Memo"). To calculate this rate, the Department determined the normal value of Stanley's exports using the nonmarket economy method provided for in 19 U.S.C. § 1677b(c). Specifically, Commerce valued Stanley's reported factors of production using import data from Thailand, the selected surrogate market economy country. Commerce determined surrogate values for Stanley's factors of production, including sealing tape and plastic granules, using publicly available Thai import prices, as reported in the Global Trade Atlas.²

In the preliminary determination, the Department calculated a rate for Stanley of 5.90 percent. See Certain Steel Nails From the People's Rep. of China , 81 Fed. Reg. 62,710, 62,711 (Dep't Commerce Sept. 12, 2016) (prelim. results). Commerce also preliminarily assigned to the Separate Rate Companies the rate of 5.90 percent. See 81 Fed. Reg. at 62,711.

Commerce, however, found Lianda's questionnaire responses lacking in that the company failed to rebut the presumption of state control. Specifically, Lianda's responses to Commerce's Section A questionnaire and supplemental questionnaires failed to provide requested information regarding Lianda's and its parent company's corporate structure. See Final I & D Memo at 28–29. Therefore, Commerce found Lianda had not provided sufficient information to establish that it was eligible for a separate rate. Accordingly, Commerce treated Lianda as a part of the countrywide entity and preliminarily assigned Lianda the PRC-wide rate of 118.04 percent.³ See Prelim. Dec. Memo at 11.

In the Final Results, Commerce assigned Stanley the amended calculated rate of 5.78 percent, and continued to apply the PRC-wide rate of 118.04 percent to Lianda. For the companies that qualified for a separate rate, Commerce determined an all-others rate by applying the method set out in the general rule in § 1673d(c)(5)(A).⁴ Thus, in accordance with the statute, Commerce excluded Lianda's rate from the calculation because it was based on facts available with an adverse inference ("AFA") and assigned Stanley's 5.78 percent rate—the only margin assigned to an individually examined respondent that was not zero, de minimis , or based entirely on facts available or AFA—to the Separate Rate Companies. This appeal followed.

STANDARD OF REVIEW

The court will sustain a determination by Commerce unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

LEGAL FRAMEWORK

When merchandise is sold in the United States at less than fair value, Commerce is authorized by statute to impose antidumping duties in an amount equal to a "dumping margin." See 19 U.S.C. §§ 1673, 1677(35)(A). This margin reflects the amount by which the price of the merchandise in the exporting country ("normal value") exceeds the price of the merchandise in the United States ("export price" or "U.S. price"). See 19 U.S.C. §§ 1673e(a)(1), 1677b(a)(1), 1677a(a).

When the merchandise is exported from a nonmarket economy country, Commerce determines its normal value by valuing the factors of production, using data from a surrogate market economy country or countries. 19 U.S.C. § 1677b(c)(1). Commerce must use "the best available information regarding the values of such factors" in the market economy country that Commerce considers to be appropriate. Id. When choosing the "best available" surrogate data on the record, Commerce selects, to the extent practicable, surrogate data that is "publicly available, ... product-specific, reflect[s] a broad market average, and [is] contemporaneous with the period...