Zhejiang Zhaofeng Mech. & Elec. Co. v. United States

• Citation: 416 F.Supp.3d 1395
• Decision Date: 18 December 2019
• Docket Number: Court No. 18-00004,Slip Op 19-167
• Parties: ZHEJIANG ZHAOFENG MECHANICAL AND ELECTRONIC CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor.
• Court: U.S. Court of International Trade

416 F.Supp.3d 1395

ZHEJIANG ZHAOFENG MECHANICAL AND ELECTRONIC CO., LTD., Plaintiff,
v.
UNITED STATES, Defendant,
and
The Timken Company, Defendant-Intervenor.

Slip Op 19-167
Court No. 18-00004

United States Court of International Trade.

Dated: December 18, 2019

416 F.Supp.3d 1396

Adams C. Lee, Harris Bricken McVay Sliwoski, LLP, of Seattle, WA, for Plaintiff Zhejiang Zhaofeng Mechanical and Electronic Co., Ltd.

Kelly A. Krystyniak, Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel was James H. Ahrens, II, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Geert M. De Prest, Schagrin Associates, of Washington, D.C., and William A. Fennell, Stewart and Stewart, of Washington, D.C., for Defendant-Intervenor The Timken Company. With them on the briefs were Terence P. Stewart, Patrick J. McDonough, Lane S. Hurewitz, and Shahrzad Noorbaloochi. Nicholas J. Birch also appeared.

Choe-Groves, Judge:

416 F.Supp.3d 1397

This action arises from the U.S. Department of Commerce's ("Commerce") administrative review of the antidumping order on tapered roller bearings from the People's Republic of China. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China, 83 Fed. Reg. 1,238 (Dep't Commerce Jan. 10, 2018) (final results of antidumping duty administrative review and rescission of new shipper review; 2015–2016) ("Final Results"). Before the court are the Final Results of Redetermination Pursuant to Court Remand, April 25, 2019, ECF No. 58 ("Remand Results"). For the following reasons, the court sustains the Remand Results.

ISSUES PRESENTED

The court reviews the following issues:

1. Whether Commerce's determination to grant Zhaofeng a separate rate is supported by substantial evidence; and

2. Whether Commerce's decision to use an inference adverse to the interests of Zhaofeng in selecting from facts otherwise available is supported by substantial evidence and is in accordance with the law.

BACKGROUND

The court presumes familiarity with the facts and procedural history and discusses only those facts relevant to the review of the Remand Results. Zhejiang Zhaofeng Mech. and Elec. Co., Ltd. v. United States, 42 CIT ––––, 355 F. Supp. 3d 1329 (2018) (" Zhaofeng I").

In the underlying administrative proceeding, Commerce became aware of irregularities in Zhaofeng's submissions when The Timken Company ("Timken" or "Defendant-Intervenor") submitted comments identifying discrepancies in a verification exhibit. Pet'r's Pre-Preliminary Cmts. 1–3, PD 181, bar code 3576832-01 (May 31, 2019). Zhaofeng acknowledged the discrepancies, but averred that they were the result of clerical errors and that a review of Zhaofeng's U.S. sales invoice would resolve the discrepancies. Remand Results at 3 & nn.6–7 (citing Zhaofeng's Case Br. 3–4, PD 184, bar code 3604752-01 (Aug. 17, 2017)); see also Zhaofeng Cmts. at 4. Commerce obtained the corresponding entry documentation from U.S. Customs and Border Protection ("CBP") and set a schedule for submitting rebuttal factual information. Remand Results at 3; see also Entry Documents Placed on the Record, Opportunity to Submit Rebuttal Factual Information and Final Date for Rebuttal Br., bar code 3617066-01 (Sept. 7, 2017). When Commerce compared the entry documents to Zhaofeng's verification

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exhibit, Commerce identified several differences, including that "the number of line items, all product codes, and most individual quantities did not match," although "the invoice number, customer name, and total sales value were the same for each set of records." Remand Results at 3–4 & n.8; see also Final Analysis Mem., bar code 3659982-01 (Jan. 2, 2018) ("Final Analysis Mem.") (comparing Zhaofeng's verification exhibit with the invoice filed by the importer).

In Zhaofeng I, the court concluded that Commerce could not disregard a respondent's separate rate information as "tainted" just because there were deficiencies in the respondent's sales or factors of production data. 42 CIT at ––––, 355 F. Supp. 3d at 1333–34. The court remanded to Commerce for reconsideration of Zhaofeng's separate rate status. Id. at 1335.

On remand, Commerce granted Zhaofeng a separate rate. Remand Results at 5. In determining Zhaofeng's dumping margin, Commerce reassessed the discrepancies between Zhaofeng's reconciliation worksheet and the invoice in the entry documents. See id. at 2–4, 6–22. In addition to the differences in the identification of goods as subject merchandise or non-subject merchandise, Commerce noted that the invoice in the entry documents contained a greater number of product codes and pieces, but the invoice reflected the same total value that was reported in the corresponding verification exhibit. Id. at 7. Commerce recognized that the discrepancies involved a single sale, but assessed that the sale represented a significant quantity and value relative to Zhaofeng's reported sales of subject merchandise. Id. at 2–4, 7, n. 20. As a result, Commerce found that "Zhaofeng withheld information from Commerce, ... failed to provide information in the form and manner requested, by failing to report a significant quantity of its U.S. sales, ... that Zhaofeng significantly impeded the proceeding by withholding sales information and misleading Commerce at verification, and then by providing additional false information to dismiss the inconsistencies found subsequent to verification." Id. at 8. Because Commerce determined that Zhaofeng failed to cooperate to the best of its ability, Commerce calculated a rate using an adverse inference to facts otherwise available ("adverse facts available" or "AFA"). Id. at 9; 19 U.S.C. § 1677e. Commerce assigned Zhaofeng a dumping margin of 92.84 percent, which was the AFA rate previously assigned in the June 1, 2006 through May 31, 2007 review of this proceeding. Remand Results at 10; see Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China, 74 F.R. 3,987, 3,988 –89 (Dep't Commerce Jan. 22, 2009) (final results of antidumping duty administrative review).

Timken filed comments in support of the Remand Results. Timken's Cmts. on Final Results of Redetermination Pursuant to Court Remand, May 13, 2019, ECF No. 62 ("Timken Cmts."). Zhaofeng filed comments in opposition. Pl.'s Reply Cmts. on DOC Remand Redetermination, June 10, 2019, ECF No. 63 ("Zhaofeng Cmts."). Defendant and Timken filed reply comments. Def.'s Resp. to Pl.'s Cmts. on Remand Redetermination, Aug. 5, 2019, ECF No. 79 ("Def.'s Resp."); Reply Br. of Def.-Intervenor Timken, Aug. 5, 2019, ECF No. 80. The Parties filed a joint appendix. J.A., Aug. 19, 2019, ECF No. 84.

JURISDICTION AND STANDARD OF REVIEW

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