Union Camp Corp. v. U.S., Slip Op. 99-40.

• Decision Date: 29 April 1999
• Docket Number: Court No. 97-03-00483.,Slip Op. 99-40.
• Citation: 53 F.Supp.2d 1310
• Parties: UNION CAMP CORPORATION, Plaintiff, v. The UNITED STATES, Defendant, and Dastech International, Inc., et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

53 F.Supp.2d 1310

UNION CAMP CORPORATION, Plaintiff, v. The UNITED STATES, Defendant, and Dastech International, Inc., et al., Defendant-Intervenors.

Slip Op. 99-40.

Court No. 97-03-00483.

United States Court of International Trade.

April 29, 1999.

COPYRIGHT MATERIAL OMITTED

Fenwick & West, LLP (Roger M. Golden and Phyllis E. Andes), Washington, DC, for Plaintiff.

David Ogden, Acting Assistant Attorney General, David M. Cohen, Director, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, (Lucius B. Lau); Keun Ho Bae, Office of the Chief Counsel for Washington, DC, Import Administration, U.S. Department of Commerce, of Counsel, for Defendant.

Williams, Mullen, Christian & Dobbins, P.C., (William E. Perry and W. David Snead), Richmond, VA, for Defendant-Intervenors.

OPINION

WALLACH, Judge.

I INTRODUCTION

At issue in this case is the proper surrogate value for octanol-2, a subsidiary product of the sebacic acid production process, that is to be used by the International Trade Administration of the U.S. Department of Commerce ("ITA" or "Commerce") in its first administrative review of antidumping duties on sebacic acid from the People's Republic of China ("PRC"). See Sebacic Acid from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 62 Fed. Reg. 10,530 (1997) ("First Administrative Review"). This case is before the Court for the second time, following the Court's Memorandum and Order of March 27, 1998, ("Remand Memorandum" and "Remand Order"), directing Commerce, inter alia, to "value octanol-2 based on an appropriate cost (which may be the U.S. cost but which may not be based solely on similar molecular structure without any additional evidence) of crude octanol-2, and then recalculate the by-product/co-product determination with the correct value." Union Camp Corp. v. United States, 8 F.Supp.2d 842, 853 (CIT 1998). Commerce issued its remand determination on June 25, 1998. See Remand Determination: Union Camp Corporation v. United States (Consol. Court No. 97-03-00483) ("Remand Determination"). The parties subsequently submitted their respective comments on the Remand Determination, and Defendant-Intervenors' submitted a motion asking the Court to reconsider its Remand Order ("Motion To Reconsider").

For the reasons stated herein, the Court agrees with Defendant-Intervenors and finds that its Remand Order was ambiguous, in so far as Commerce interpreted the Remand Order as preventing it from considering record evidence of market prices in valuing the octanol-2 that results from the sebacic acid production process. Accordingly, the Court grants Defendant-Intervenors' Motion To Reconsider and remands this case for further consideration consistent with this opinion. In doing so, however, the Court takes judicial notice of the fact that in its third administrative review of antidumping duties on sebacic acid from the PRC, Commerce, on the basis of a letter from the editor of the Chemical Weekly (India), reversed its previous position and found that the "octanol" quote from this publication did not refer to octanol-1. See Sebacic Acid From The People's Republic of China; Final Results of Antidumping Duty Administrative Review, 63 Fed.Reg. 43,373, 43,374-75 (1998) ("Third Administrative Review"). Having taken judicial notice of this fact, the Court directs Commerce to consider the letter from the editor of the Chemical Weekly (India) in choosing an appropriate surrogate value on remand.

Finally, the Court further instructs Commerce that it is to consider whether it should accept new evidence concerning the comparability of 2-ethylhexanol and octanol-2. Should Commerce come to the conclusion that it should accept such evidence, Commerce may do so and, if appropriate, use that evidence as a basis for justifying its use of the Chemical Weekly (India) value for "octanol" as a surrogate value.

II BACKGROUND

The relevant facts of this case are described in Union Camp Corp. v. United States, 8 F.Supp.2d 842 (CIT 1998), and familiarity with them is presumed. Only the facts relevant to the disposition of Defendant-Intervenors' Motion To Reconsider are repeated.

On March 7, 1997, Commerce issued its First Administrative Review, covering shipments of sebacic acid from the PRC to the United States during the period July 13, 1994, through June 30, 1995. First Administrative Review, 62 Fed.Reg. at 10,530. Because the PRC is a nonmarket economy, Commerce determined the "normal value" of the sebacic acid using a constructed value pursuant to 19 U.S.C. § 1677b(c)(1) (1994), which provides that, where appropriate, Commerce "shall determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise." In valuing the factors of production, Commerce is to use, where possible, "prices or costs ... in one or more market economy countries" that are at a comparable level of economic development and that are "significant producers of comparable merchandise." 19 U.S.C. § 1677b(c)(4) (1994)

For the First Administrative Review, Commerce used surrogate values from India to construct the normal value of the sebacic acid. See First Administrative Review, 62 Fed.Reg. at 10,533. In doing so, Commerce used a published price for "octanol" from the Chemical Weekly (India) to value the octanol-2 that is produced, as a subsidiary product, through the sebacic acid production process. See id. at 10,534-35. Although the "octanol" quote from the Chemical Weekly (India) does not make clear whether it refers to octanol-2 or another type of octanol, Commerce assumed that this price was for octanol-1 and concluded that octanol-1 was a comparable product to octanol-2. See id. at 10,534. Commerce's only explanation as to how the two products were comparable, however, was that they have similar molecular formulae. See id.

Before this Court, Plaintiff challenged Commerce's conclusion concerning the comparability of octanol-1 and octanol-2, arguing that the decision was not supported by substantial evidence on the record and not otherwise in accordance with law. See Brief In Support Of Union Camp Corporation's Rule 56.2 Motion For Judgment Upon The Agency Record, dated September 5, 1997, at 19-21. On March 27, 1998, the Court agreed with Plaintiff and found that Commerce's interpretation of the word "comparable" in 19 U.S.C. § 1677b(c)(4) (1994), to mean similar molecular structure, was not a reasonable interpretation of the statute. Union Camp, 8 F.Supp.2d at 849. The Court stated that Commerce "must either provide an explanation for how octanol-1 is comparable to octanol-2 based on some acceptable standard [value or use] or it must offer a reasonable explanation of why it is changing its legal standard for such determinations." Id. In regard to Commerce's conclusion also being unsupported by substantial evidence, the Court stated:

Commerce discussed its reason for selecting the Indian value of octanol-2, i.e., the similar molecular formulae. It also discussed why it rejected Union Camp's internal cost of octanol-2 based on Commerce's preference for public, published information. Commerce failed to discuss, or apparently consider, however, the U.S. value of octanol-2 placed on the record by Dastech or Union Camp's submission regarding an adjustment of that U.S. value to reflect that Dastech's submission reflected the value of refined octanol-2.... Thus, Commerce's failure here to consider the other surrogate values placed on the record results in its valuation of octanol-2 using the Indian value of octanol-1 being unsupported by substantial evidence on the record.

Id. at 850 (citation omitted).

In light of these findings, the Court remanded this case to Commerce with the following instructions:

[I]t is hereby ... ORDERED ADJUDGED AND DECREED that this case is remanded to [Commerce] with instructions to value octanol-2 based on an appropriate cost (which may be the U.S. cost but which may not be based solely on similar molecular structure without any additional evidence) of crude octanol-2, and then recalculate the by-product/co-product determination with the correct value....

Id. at 853.

On June 25, 1998, Commerce issued its Remand Determination, in which it used Union Camp's internal cost for crude octanol-2 as a surrogate for the octanol-2 produced by Defendant-Intervenors. Remand Determination at 3, 9-10. Even though Commerce identified and discussed additional record evidence that supported its use of the Chemical Weekly (India) value of refined octanol — and commented that this value "is the best available information to effectuate the Department's goal of determining the most accurate margin possible," Remand Determination at 6 — it nevertheless stated that it felt constrained by the Court's Remand Order from using or considering other possible surrogate values that were on the record. Commerce stated that:

The Department is using the U.S. cost of crude octanol-2 to recalculate the dumping margins because the court instructed us to value octanol-2 based on an appropriate "cost" of crude octanol-2 and the only value on the record for "cost" of crude octanol-2 is the petitioner's U.S. cost of crude octanol-2. The Department's use of such a value necessitates a recalculation of the dumping margins. However, the Department has also identified for the court additional record evidence that octanol-1 and octanol-2 are comparable in use. It remains the Department's position, as reflected in the determination on remand, that using the petitioner's U.S. cost of crude octanol-2 is inappropriate because it results in less accurate dumping margins. Remand Determination at 10. See also Defendant's Response To The Comments Filed By Union Camp And Dastech Regarding The Remand Determination Filed by The Department of Commerce ("Defendant's Response") at 3 ("Commerce did not utilize the data contained in Chemical...