Shanghai Taoen Intern. Trading Co., Ltd. v. U.S.

• Decision Date: 17 February 2005
• Docket Number: Slip Op. 05-22.,Court No. 04-00125.
• Citation: 360 F.Supp.2d 1339
• Parties: SHANGHAI TAOEN INTERNATIONAL TRADING CO., LTD., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

360 F.Supp.2d 1339

SHANGHAI TAOEN INTERNATIONAL TRADING CO., LTD., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 05-22.

Court No. 04-00125.

United States Court of International Trade.

February 17, 2005.

Lee & Xiao (Yingchao Xiao, San Marino, CA, Bub-Joo S. Lee, and Jay J. Chung, Los Angeles, CA), for plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Jeanne E. Davidson, Deputy Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, (David S. Silverbrand), Linda S. Chang, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for defendant, of counsel.

OPINION

RESTANI, Chief Judge.

Plaintiff Shanghai Taoen International Trading Co. ("Taoen") appears before the court on a motion for judgment upon the agency record pursuant to USCIT Rule 56.2, challenging the determination issued by the United States Department of Commerce ("Commerce") in the antidumping duty administrative review of freshwater crawfish tail meat ("crawfish tail meat") from the People's Republic of China ("PRC") for the period of review September 1, 2001 through August 31, 2002 (the "POR").

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000). In accordance with 19 U.S.C. § 1516a(b)(1)(B) (2000), the court shall hold unlawful any determination "unsupported by substantial evidence on the record, or otherwise not in accordance with law."

FACTUAL AND PROCEDURAL BACKGROUND

On August 1, 1997, Commerce published in the Federal Register the final determination of its sales-at-less-than-fair-value ("LTFV") investigation of crawfish tail meat from the PRC, covering the period March 1, 1996 through August 31, 1996. Freshwater Crawfish Tail Meat From the People's Republic of China, 62 Fed.Reg. 41,347 (Dep't Commerce August 1, 1997) (amended by Freshwater Crawfish Tail Meat from the People's Republic of China, 62 Fed.Reg. 48,218 (Dep't Commerce Sept. 15, 1997)). Based on timely requests from interested parties pursuant to 19 CFR 351.213(b) (2002), Commerce initiated an administrative review of the antidumping duty order on crawfish tail meat from the PRC for the POR, including the initiation of a review of Taoen's exports of crawfish tail meat. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 67 Fed.Reg. 65,336 (Dep't Commerce Oct. 24, 2002).

In its initial questionnaire response, Taoen stated that it did not produce any of the crawfish tail meat that it exported during the POR. Questionnaire Response (Dec. 10, 2002), at 3, Pl.'s App., Tab A. Instead, Taoen indicated that all of the crawfish tail meat was produced by Lianyungang Yuzhu Aquatic Products Processing Co. ("Yuzhu"). Id. at 5, Pl.'s App., Tab A. On January 23, 2003, Commerce requested more information about Taoen's producers, to which Taoen affirmed that Yuzhu was the only company that supplied Taoen with crawfish tail meat. Questionnaire Response (March 7, 2003), at 22, Pl.'s App., Tab C. Subsequently, Commerce issued a supplemental questionnaire on May 2, 2003, in which it requested that Taoen provide all information as to "Shanghai Taoen's and Yuzhu's relationship(s) with any entities or individuals in any way involved in the production, processing, exportation, shipment, importation, distribution, or sale of crawfish tail meat." Questionnaire Response (May 15, 2003), at 45, Pl.'s App., Tab E. Taoen replied that "Shanghai Taoen and Yuzhu have no relationship with any entities or individuals in any way involved in the production, processing, exportation, shipment, importation, distribution, or sale of crawfish tail meat." Id. at 45, Pl.'s App., Tab E.

For the purpose of its preliminary results, Commerce relied on these responses, and calculated a preliminary margin of 57.73%, based on factors of production for Taoen's one reported producer, Yuzhu. Freshwater Crawfish Tail Meat from the People's Republic of China, 68 Fed.Reg. 58,064 (Dep't Commerce October 8, 2003) (preliminary results). During Commerce's verification research, the U.S. Customs and Border Protection ("Customs") provided Commerce with copies of all entry documents related to Taoen's sales of crawfish tail meat during the POR. Commerce determined that Taoen's questionnaire responses were inconsistent with Customs' entry documents.¹ Supplemental Request for Information (Dec. 5, 2003), at 109, Pl.'s App., Tab J. On December 5, 2003, Commerce alerted Taoen to these inconsistencies and asked it to explain and provide documentation demonstrating that Yuzhu was the only producer of Taoen's crawfish tail meat. Id. at 110, Pl.'s App., Tab J. In its December 15, 2003 response, Taoen reiterated that Yuzhu was the only producer of the crawfish tail meat and explained that the inconsistency was caused by a backlog for receiving inspection results in Lianyungang.² Response to the Department's Dec. 5, 2003 Letter (Dec. 15, 2003), at 113, Pl.'s App., Tab K.

On February 13, 2004, Commerce released its administrative determination and accompanying issues and decisions memorandum, in which it determined that Taoen's explanation for the inconsistencies between its questionnaire responses and Customs' entry documents was not credible,³ and even if it was, Taoen withheld information from Commerce throughout the administrative review. Id. at 162, Pl's App., Tab M. To determine the appropriate margin, Commerce applied total facts available pursuant to 19 U.S.C. § 1677e(a), and concluded that an adverse inference was warranted pursuant to 19 U.S.C. § 1677e(b). Id. at 162, 164, Pl.'s App., Tab M. As the total adverse facts available rate, Commerce assigned the highest margin from any segment of the proceeding. Id. at 164 — 65, Pl.'s App., Tab M. This resulted in Taoen being assigned a rate of 223.01% — a rate calculated in the 1999 — 2000 administrative review of the antidumping duty order on crawfish tail meat from the PRC, for the exporter Huaiyin 30. Id. at 164 — 65, Pl.'s App., Tab M.

On appeal to this court, Taoen challenges Commerce's (1) decision to apply total adverse facts available to determine its antidumping duty margin, and (2) assignment of the highest margin from any segment of the proceeding as the total adverse facts available rate.

DISCUSSION

I. Commerce's Application of Total Adverse Facts Available is Supported by Substantial Evidence and is Otherwise in Accordance with the Law.

Taoen contests the application of total adverse facts available to determine its dumping margin, arguing that (1) Taoen did not withhold information, (2) even if information was initially withheld, it was supplied within the relevant deadlines, and (3) any information not submitted was neither significant nor fundamental to Commerce's calculation of an accurate dumping margin. Taoen contends that it initially misunderstood Commerce's questions about its business relationships, and that it accurately answered Commerce's questions about its producer relationships at every stage of Commerce's review. Taoen asserts that before Commerce applies facts otherwise available, 19 U.S.C. § 1677m(d) requires that Commerce provide Taoen with an opportunity to remedy or explain deficiencies in its submission.⁴

Commerce provided an opportunity to explain in its December 5, 2003, questionnaire, and Taoen contends that it responded with credible information showing that the inconsistencies between its questionnaire responses and Customs' entry documents merely reflect undisclosed, insubstantial business relationships that would have had little bearing on the calculation of Taoen's antidumping margin.⁵ Therefore, Taoen argues that, even if its initial failure to respond warrants the application of facts otherwise available, 19 U.S.C. § 1677m(e) requires Commerce to apply partial facts available regarding the specific information that Taoen allegedly failed to report.⁶ Moreover, Taoen argues that Commerce failed to adequately explain its rationale for using an adverse inference in selecting among facts otherwise available.

Pursuant to 19 U.S.C. § 1677e(a), Commerce may use facts otherwise available to determine an antidumping duty if,

(1) necessary information is not available on the record, or

(2) an interested party or any other person —

(A) withholds information that has been requested by the administering authority or the Commission under this subtitle,

(B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested (C) significantly impedes a proceeding under this subtitle, or

(D) provides such information but the information cannot be verified as provided as provided in section 1677m(i) of this title.

19 U.S.C. § 1677e(a). If the use of facts otherwise available is warranted, Commerce may draw adverse inferences in selecting among such facts:

If the administering authority ... finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority ..., the administering authority..., in reaching the applicable determination under this subtitle, may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available.

19 U.S.C. § 1677e(b). The statute does not provide an express definition of "the best of its ability," although the Federal Circuit has determined that "the statutory mandate that a respondent act to `the best of its ability' requires the respondent to do the maximum it is able to do." Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed.Cir.2003). To meet this standard, Commerce "needs to articulate why it concluded that a party failed to act to the best of its ability, and explain why the absence of this information is of significance...."...