Rubberflex Sdn. Bhd. v. U.S.
| Decision Date | 23 July 1999 |
| Docket Number | Court No. 97-12-02180.,Slip Op. 99-68. |
| Citation | 59 F.Supp.2d 1338 |
| Parties | RUBBERFLEX SDN. BHD. and Rubfil Sdn. Bhd., Plaintiffs, v. UNITED STATES of America, Defendant. |
| Court | U.S. Court of International Trade |
White & Case LLP, (Walter J. Spak, David E. Bond, Richard G. King, and Edward Meyers), Washington, DC, for plaintiffs Rubberflex Sdn. Bhd. and Rubfil Sdn. Bhd.
David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Office of the Chief Counsel for Import Administration, United States Department of Commerce (Mildred E. Steward), Washington, DC, for defendant.
In this action, the Court reviews challenges to the Department of Commerce's ("Commerce") final determination for the second administrative review of an antidumping duty order covering extruded rubber thread from Malaysia. Extruded Rubber Thread From Malaysia; Final Results of Antidumping Duty Administrative Review, 62 Fed.Reg. 62,547 (Nov. 24, 1997) ("Final Results"). Plaintiff Rubberflex Sdn. Bhd. ("Rubberflex") argues that (1) the manner in which Commerce conducted the second administrative review, particularly verification, prejudiced Rubberflex; (2) Commerce was able to verify most of Rubberflex's responses and therefore should not have used total "best information available" ("BIA") to assign Rubberflex a dumping margin; and (3) the duty rate of 29.83% assigned to Rubberflex in the second review was arbitrary in light of the 20.38% rate assigned to Rubberflex in the third review. The Court addresses these arguments in Section I.
Plaintiff Rubfil Sdn. Bhd. ("Rubfil") argues that, in calculating the net price for Rubfil's U.S. sales, Commerce erroneously failed to convert Rubfil's ocean freight expenses from Malaysian ringgits to U.S. dollars. The Court addresses this argument in Section II.
The Court exercises jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) (1994). The Court remands the Final Results.
On October 7, 1992, Commerce published an antidumping order covering extruded rubber thread from Malaysia. See Antidumping Duty Order and Amendment of Final Determination of Sales at Less Than Fair Value: Extruded Rubber Thread from Malaysia, 57 Fed.Reg. 46,150 (Oct. 7, 1992). Rubberflex was one of the two respondents in the underlying antidumping investigation. See id. at 46, 151. During the second anniversary month of the order, Rubberflex, three other Malaysian producers and exporters of extruded rubber thread, and petitioner North American Rubber Thread requested an administrative review of the order, which Commerce agreed to undertake. See Initiation of Antidumping and Countervailing Duty Administration Reviews, 59 Fed.Reg. 56,459 (Nov. 14, 1994) ().1
Commerce issued Rubberflex a questionnaire for the second review on or around February 8, 1995.2 See Letter from APO Specialist to White & Case Transmitting Questionnaire (Feb. 8, 1995), Pub. Admin. R., Fiche 2, Frame 25. On April 17, 1995, Rubberflex timely submitted its response to Commerce's questionnaire. See Letter from White & Case to Secretary of Commerce (Apr. 17, 1995), Conf. Admin. R., Fiche 30 — 37, Frame 1.
On or around September 3, 1996, Commerce issued Rubberflex a supplemental questionnaire3 for the second administrative review.4 Rubberflex requested an extension of time in which to file its response to the supplemental questionnaire. See Letter from White & Case to Secretary of Commerce Requesting Extension to File Supplemental Questionnaire Response (Sept. 11, 1996), Pub. Admin. R., Fiche 19, Frames 69-71. Commerce granted the request and allowed Rubberflex two additional business days to file. See Letter from Program Manager/IA to White & Case Granting Extension of Time (Sept. 13, 1996), Pub. Admin. R., Fiche 19, Frame 72. On September 17, 1996, Rubberflex timely filed its response to Commerce's supplemental questionnaire. See Letter from White & Case to Secretary of Commerce Transmitting Rubberflex Supplemental Questionnaire Response (Sept. 17, 1996), Pub. Admin. R., Fiche 20, Frame 1, Conf. Admin. R., Fiche 51-52, Frame 1.
On Wednesday, September 18, 1996, the day after receiving Rubberflex's supplemental response, Commerce issued Rubberflex a verification outline. See Letter from Program Manager/IA to White & Case Transmitting Verification Outline for Rubberflex (Sept. 18, 1996) ("Verification Outline"), Pub. Admin. R., Fiche 20, Frame 67. And on Monday, September 23, 1996, Commerce began verification of Rubberflex's sales and cost data in Malaysia. Commerce completed verification on October 5, 1996. Commerce also conducted verification of U.S. sales data in North Carolina at Rubberflex's affiliated reseller, Flexfil Corporation, from October 16 through October 18, 1996.
On December 12, 1996, Commerce issued an internal memorandum concluding that Rubberflex had failed verification. See Memo From Office DIR/IA to DAS/IA; Rubberflex—Reasons for Failed Verification —Recommendation Memo for Using Facts Available (Dec. 12, 1996), Pub. Admin. R., Fiche 25, Frame 30. In response to the memo, Rubberflex complained that the case handlers had confused issues between the second and the third reviews in making their determination. Consequently, Commerce agreed to separate its findings by review period. See Verification Memo, Pub. Admin. R., Fiche 25, Frame 62.
On February 13, 1997, Commerce published its preliminary determination for the second administrative review. Because Commerce "found that responses provided by Rubberflex could not be verified," it resorted to total BIA and assigned Rubberflex a dumping margin of 29.83%.5 Notice of Preliminary Results of Anti-dumping Duty Administrative Review: Extruded Rubber Thread from Malaysia, 62 Fed.Reg. 6758, 6759 (Feb. 13, 1997) ("Preliminary Results").
On March 10, 1997, Rubberflex submitted a case brief challenging various aspects of the Preliminary Results. See Brief from White & Case to Secretary of Commerce Regarding Rubberflex (Mar. 10, 1997) ("Case Brief"), Pub. Admin. R., Fiche 27, Frame 1, Conf. Admin. R., Fiche 61, Frame 1. Rubberflex argued that (1) despite Commerce's claims to the contrary, Commerce was able to verify Rubberflex's responses at verification; (2) Commerce had no legal basis for using total BIA to determine Rubberflex's dumping margin and, at most, should have used BIA for specific responses ("partial BIA"); and (3) the preliminary results, the verification report, and other Commerce documents contained numerous errors and inconsistencies. See id. passim. Rubberflex emphasized in its Case Brief that it had cooperated to the best of its ability throughout a difficult and disorganized review process, and argued that Commerce should bear primary responsibility for any problems that arose in connection with verification. See Pub. Admin. R., Fiche 27, Frames 42-45, Conf. Admin. R., Fiche 61, Frames 42-45.
To further air its concerns, Rubberflex scheduled a meeting with the Commerce officials responsible for the second administrative review.6 The meeting was held on April 14, 1997, and included Mr. Jeffrey P. Bialos, Principle Deputy Assistant Secretary for Import Administration, and the case handlers responsible for the second and third reviews. See Pl.'s Br. in Supp. of Mot. For J. Upon the Agency R. ("Pl.'s Br."), at 8.
On November 12, 1997, Commerce issued a memo to file that analyzed the business proprietary information in Rubberflex's Case Brief. See Memo from Analyst/IA to File: Final Results of Administrative Review (Nov. 12, 1997), Pub. Admin. R., Fiche 28, Frame 34, Conf. Admin. R., Fiche 62, Frame 18. A portion of the analysis compared Rubberflex's questionnaire responses to the revised information Rubberflex attempted to submit at verification. Finally, on November 24, 1997, Commerce issued the Final Results. As in the Preliminary Results, Commerce relied on total BIA and assigned Rubberflex a margin of 29.83%. See Final Results, 62 Fed.Reg. at 62,548, 62,558.
Rubberflex offers, in addition, its own view of the facts relevant to this suit. Specifically, Rubberflex alleges that (1) Commerce conducted the entire second administrative review in an extremely disorganized, irresponsible, and prejudicial manner; (2) Commerce denied Rubberflex's request to reschedule verification to a mutually convenient time; (3) Commerce gave Rubberflex only two business days to prepare for verification; (4) at verification, Commerce tacitly accepted Rubberflex's proposal to submit all corrections at the conclusion of verification and then refused to accept such submissions; (5) Commerce case handlers conducted verification according to an undisclosed methodology; (6) Commerce case handlers were not adequately prepared for verification, thereby causing delay; and that (7) despite such delays, Commerce case handlers refused to work past 5:00 p.m. or on weekends.
Rubberflex first notes that after initiating the second review and issuing the questionnaire, Commerce did nothing for 18 months; then, when Commerce resumed work on the review, it compressed all remaining activities for two periods of review into a 45-day period. By Rubberflex's account, it contacted the case handler assigned to the second review several times during the 18-month period of inactivity to determine when Commerce planned to issue a supplemental questionnaire and conduct verification. Rubberflex alleges it was told that "it was unclear who would be handling the review and, therefore, no work was being performed on the Responses." Case Brief, Pub. Admin. R., Fiche 27, Frame 42, Conf. Admin. R., Fiche...
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