Xiping Opeck Food Co. v. United States

• Decision Date: 11 December 2014
• Docket Number: Court No. 12–00112.,Slip Op. 14–142.
• Citation: 34 F.Supp.3d 1331
• Parties: XIPING OPECK FOOD CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Crawfish Processors Alliance, Defendant–Intervenor.
• Court: U.S. Court of International Trade

34 F.Supp.3d 1331

XIPING OPECK FOOD CO., LTD., Plaintiff

v. UNITED STATES, DefendantandCrawfish Processors Alliance, Defendant–Intervenor.

Slip Op. 14–142.

Court No. 12–00112.

United States Court of International Trade.

Dec. 11, 2014.

Yingchao Xiao, Lee & Xiao, of San Marino, CA, argued for plaintiff.

Antonia R. Soares, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant. With her on the brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Rebecca Cantu, Attorney, International Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, D.C.

John C. Steinberger, Adduci, Mastriani & Schaumberg, LLP of Washington, D.C., argued for defendant-intervenor. With him on the brief was Will E. Leonard.

OPINION and ORDER

EATON, Senior Judge:

This matter is before the court on plaintiff Xiping Opeck Food Co., Ltd.'s (“Xiping” or “plaintiff”) motion for judgment on the agency record pursuant to USCIT Rule 56.2. By its motion, Xiping, an exporter of freshwater crawfish tail meat from the People's Republic of China (“PRC”), challenges the United States Department of Commerce's (“Commerce” or the “Department”) Final Results in the 2009–2010 administrative review of the antidumping duty order on crawfish tail meat from the PRC. Freshwater Crawfish Tail Meat From the PRC, 77 Fed.Reg. 21,529, 21,529 (Dep't of Commerce Apr. 10, 2012) (final results of antidumping duty administrative review and rescission of review in part), and accompanying Issues and Decision Memorandum (“Issues & Dec. Mem.”) (collectively, “Final Results”). In the Final Results, Commerce determined a rate of 70.12 percent for plaintiff's crawfish tail meat based on the application of adverse facts available (“AFA”). Issues & Dec. Mem. at 4.

Defendant United States (“defendant”) opposes plaintiff's motion and asks that Commerce's Final Results be sustained. See Def.'s Resp. in Opp'n to Pl.'s Rule 56.2 Mot. for J. upon the Agency R. (ECF Dkt. No. 34) (“Def.'s Br.”). Defendant-intervenor, the Crawfish Processors Alliance (“Crawfish Processors Alliance” or “defendant-intervenor”), a trade association composed of members that manufacture, produce, or sell freshwater crawfish tail meat in the United States, joins in opposition to plaintiff's motion. See Br. of Def.-int., the Crawfish Processors Alliance, in Opp'n to Pl.'s Rule 56.2 Mot. for J. upon the Agency R. (ECF Dkt. No. 37); Consent Mot. of the Crawfish Processors Alliance to Intervene as of Right as Def.-int. ¶ 6 (ECF Dkt. No. 14). For the reasons set forth below, Commerce's Final Results are remanded.

BACKGROUND

On September 15, 1997, the Department issued an antidumping duty order on crawfish tail meat from the PRC.¹

Freshwater Crawfish Tail Meat From the PRC, 62 Fed.Reg. 48,218 (Dep't of Commerce, Sept. 15, 1997) (notice of amendment to final determination of sales at less than fair value and antidumping duty order) (the “Order”). On October 28, 2010, following the receipt of a petition filed by the Crawfish Processors Alliance, the Department initiated an administrative review of the Order for the period of review (“POR”) of September 1, 2009 through August 31, 2010. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 75 Fed.Reg. 66,349, 66,350 (Dep't of Commerce Oct. 28, 2010). After initially selecting Xiping and Yancheng Hi–King Agriculture Developing Co., Ltd. (“Hi–King”) for individual examination, the Department rescinded the review with respect to Hi–King, leaving Xiping as the sole mandatory respondent.² See Freshwater Crawfish Tail Meat From the PRC, 76 Fed.Reg. 10,879, 10,879 –80 (Dep't of Commerce Feb. 28, 2011) (rescission of antidumping duty administrative review in part).

During the course of the review, the Crawfish Processors Alliance submitted a letter to the Department alleging that Xiping was involved in middleman dumping³ during the POR. Letter from John C. Steinberger, Counsel for the Crawfish Processors Alliance, to The Honorable Gary Locke, Secretary of Commerce, U.S. Department of Commerce at 2, CD 27 (June 6, 2011), ECF Dkt. No. 21 (“Middleman Dumping Allegation Letter”). In support of its middleman dumping allegation, defendant-intervenor referred to evidence of Xiping's sales to the importer of record, GB Imports & Exports, Inc. (“GBIE”), and of GBIE's subsequent sales to its customer, Company A,⁴ a foreign entity.⁵ See Middleman Dumping Allegation Letter at 2, 3, 6. Defendant-intervenor claimed that the sales between Xiping and GBIE, and the sales between GBIE and Company A, were conducted at artificially inflated prices. See Middleman Dumping Allegation Letter at 6. Further, according to defendant-intervenor, Company A resold Xiping's merchandise to U.S. wholesalers at prices below Company A's artificially inflated acquisition cost. See Middleman Dumping Allegation Letter at 6. Thus, defendant-intervenor maintained that Company A sold Xiping's merchandise to U.S. wholesalers at dumped prices.

Following the receipt of comments concerning the middleman dumping allegation, Commerce determined that, although a middleman dumping analysis was not warranted, “an inquiry into [Company A's] selling practices” was. Mem. from Laurie Parkhill, Office Director, for Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations at 6, CD 12 (Sept. 30, 2011), ECF Dkt. No. 21 (“Transactions Mem.”). In reaching this conclusion, Commerce stated “that [Company A] plays a central, but as yet unexplained, role in the U.S. pricing associated with entries of crawfish tail meat subject to this review” and that Company A “appears to be an exporter that has made, or has participated in making, the first sales to unaffiliated U.S. purchasers.”⁶ Transactions Mem. at 15–16.

On October 7, 2011, after “receiv[ing] a complete response to the antidumping questionnaire from Xiping,” Commerce published its Preliminary Results, calculating a weighted-average dumping margin of zero percent for Xiping. Preliminary Results Freshwater Crawfish Tail Meat From the PRC, 76 Fed.Reg. 62,349, 62,349, 62,351, 62,355 (Dep't of Commerce Oct. 7, 2011) (of antidumping duty administrative review and intent to rescind review in part) (“Preliminary Results”). Thus, Commerce preliminarily determined that Xiping's sales had not been made below normal value,⁷ and therefore that its merchandise had not been dumped.

Nonetheless, based on the observations in its Transactions Memorandum, Commerce sent multiple nonmarket economy⁸ questionnaires to Xiping and its importer, GBIE, which both companies fully answered. In addition, the Department twice sent Company A nonmarket economy questionnaires seeking to learn whether it was an “entity properly subject to a dumping inquiry as an exporter of subject merchandise and ultimately responsible for the pricing of entries of crawfish tail meat into the United States.” See Mem. from Susan H. Kuhbach, Office Director, for Paul Piquado, Assistant Secretary for Import Administration at 2, CD 20 (Feb. 13, 2012), ECF Dkt. No. 21 (“AFA Mem.”). Company A responded to both of Commerce's requests with letters stating that it was not an exporter of crawfish tail meat because its purchases and sales were made after the merchandise had entered the United States and, as a result, Company A was not an “interested party” under the statute. AFA Mem. at 2. In other words, Company A insisted that, despite its status as a foreign company, its purchases and sales of the crawfish tail meat took place within the borders of the United States, and thus it neither produced nor exported Xiping's product, and therefore was not required to respond to the Department's nonmarket economy questionnaires.

Following the receipt of the questionnaire responses, the Department produced a Post–Preliminary Analysis Memorandum. See AFA Mem. In this memorandum, the Department found, based on Company A's lack of cooperation, that “the limited information provided by Xiping ... c[ould not] serve as a reliable basis for reaching an accurate dumping determination with respect to Xiping.” AFA Mem. at 4 (citing 19 U.S.C. § 1677m(e)(3) ). Furthermore, Commerce determined that Company A was an exporter and “interested party by virtue of its involvement in the relevant U.S. sales and pricing of the entries under review” and that Company A's failure to cooperate with the review warranted use of an adverse inference⁹ with respect to the facts used to determine an antidumping margin for Xiping. See AFA Mem. at 5–6; 19 U.S.C. § 1677e(b).

Importantly, in reaching its conclusion, Commerce found (1) that Xiping and GBIE fully cooperated with the review, (2) no affiliation among any of Xiping, GBIE, Company A, or the U.S. wholesalers, and (3) no collusion among any of the participants in the transactions. See AFA Mem. at 6; Transactions Mem. at 5–6, 12.

In the Final Results, Commerce confirmed its findings and determined a rate of 70.12 percent to Xiping's merchandise that had been calculated in the Post–Preliminary Analysis Memorandum using AFA. See Final Results, 77 Fed.Reg. at 21,531.

STANDARD OF 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).

DISCUSSION

I. The Crawfish Processors Alliance's Middleman Dumping Allegation

In its Middleman Dumping Allegation Letter, the Crawfish Processors Alliance described a chain of transactions from Xiping to the U.S. wholesalers, and asked Commerce to initiate a middleman dumping investigation of Xiping, GBIE, and Company A. See Middleman Dumping Allegation Letter at 2. Defendant-intervenor claimed, in its submission, that Xiping's U.S. sales were made consecutively through...