Longkou Haimeng Machinery Co., Ltd. v. U.S.

• Decision Date: 18 May 2009
• Docket Number: Slip Op. 09-46. Court No. 07-00321.
• Parties: LONGKOU HAIMENG MACHINERY CO., LTD., Laizhou Auto Brake Equipment Company, Laizhou Hongda Auto Replacement Parts Co., Ltd., Laizhou Luqi Machinery Co., Ltd., Qingdao Gren (Group) Co., and Longkou TLC Machinery Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, Defendant-Intervenor.
• Court: U.S. Court of International Trade

617 F.Supp.2d 1363

LONGKOU HAIMENG MACHINERY CO., LTD., Laizhou Auto Brake Equipment Company, Laizhou Hongda Auto Replacement Parts Co., Ltd., Laizhou Luqi Machinery Co., Ltd., Qingdao Gren (Group) Co., and Longkou TLC Machinery Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, Defendant-Intervenor.

Slip Op. 09-46. Court No. 07-00321.

United States Court of International Trade.

May 18, 2009.

COPYRIGHT MATERIAL OMITTED

Trade Pacific PLLC, (Robert G. Gosselink; Jonathan Michael Freed) for Longkou Haimeng Machinery Co., Ltd.; Laizhou Auto Brake Equipment Company; Laizhou Hongda Auto Replacement Parts Co., Ltd.; Laizhou Luqi Machinery Co., Ltd.; and Qingdao Gren (Group) Co., Plaintiffs.

Venable LLP, (Lindsay Beardsworth Meyer), for Longkou TLC Machinery Co., Ltd., Plaintiff.

Michael F. Hertz, Deputy Assistant Attorney General, Commercial Litigation Branch, Civil Division, United States Department of Justice; Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Patricia M. McCarthy; Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Courtney E. Sheehan and Stephen C. Tosini); Evangeline D. Keenan, Office of Chief Counsel for Import Administration, United States Department of Commerce, for the United States, Defendant.

Porter, Wright, Morris & Arthur, LLP, (Leslie A. Glick) for The Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, Defendant-Intervenor.

OPINION

TSOUCALAS, Senior Judge.

This matter comes before the Court following its decision in Longkou Haimeng Mach. Co., Ltd. v. United States ("Longkou"), 32 CIT ___, 581 F.Supp.2d 1344 (2008), in which the Court remanded the administrative determination in Brake Rotors From the People's Republic of China: Final Results of Antidumping Duty Administrative and New Shipper Reviews and Partial Rescission of the 2005-2006 Administrative Review, 72 Fed.Reg. 42,386 (Aug. 2, 2007) ("Final Results") to the United States Department of Commerce, International Trade Administration ("Commerce" or "Department"). Longkou arose from Plaintiffs' challenge to Commerce's Final Results, and ensuing motion for judgment on the agency record under USCIT Rule 56.2. In their motion, Plaintiffs alleged, inter alia, that Commerce failed to adhere to the statutory requirement to value factors of production using the best available information. Because Commerce valued pig iron using Indian import data, despite record evidence indicating that the imported pig iron (Sorelmetal) was not specific to the pig iron used by Plaintiffs, the Department's valuation of this input was not based on the best available information. In Longkou, the Court instructed Commerce to specifically address: (1) whether Sorelmetal is fundamentally different from the pig iron consumed by respondents and cannot be used in the production of subject brake rotors; or alternately (2) whether pig iron imports into India under HTS 7201.1000 are the best available information for valuing the pig iron consumed by Plaintiffs in the production of subject brake rotors. See Longkou, 32 CIT at ___, 581 F.Supp.2d 1344, 1364. The Court now reviews the Final Results of Redetermination Pursuant to Court Remand (Feb. 18, 2009) ("Final Remand Redetermination"), in which the surrogate value for pig iron, and hence Plaintiffs' margin, remains unchanged from the Final Results.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a)(2) and 28 U.S.C. § 1581(c).

STANDARD OF REVIEW

The Court reviews the agency's redetermination pursuant to the Court's remand under the substantial evidence and in accordance with law standard, which is set forth in 19 U.S.C. § 1516a (b)(1)(B)(i) (2000) ("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 ...."). Substantial evidence is "`such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). "Substantial evidence requires more than a mere scintilla, but is satisfied by something less than the weight of the evidence." Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed.Cir.2004) (internal citations and quotation marks omitted). The existence of substantial evidence is determined "by considering the record as a whole, including evidence that supports as well as evidence that `fairly detracts from the substantiality of the evidence.'" Huaiyin, 322 F.3d at 1374 (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir.1984)). The Court "must affirm [Commerce's] determination if it is reasonable and supported by the record as a whole, even if some evidence detracts from the [Department's] conclusion." Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed.Cir.2006) (internal citations and quotation marks omitted).

BACKGROUND

The Court presumes familiarity with its decision in Longkou, which provides background discussion on the less-than-fair-value determination that Plaintiffs contest in this judicial proceeding. See Longkou, 32 CIT ___, 581 F.Supp.2d 1344. Below, the Court provides additional background information specific to the Final Remand Redetermination now before the Court.

In making the determination of whether imported merchandise is being sold at less-than-fair-value in the United States, Commerce must first quantify the term "normal value." Whereas normal value typically equals the domestic price of the product in the exporting country, see 19 U.S.C. § 1677b(a)(1), if the exporting country is a non-market economy ("NME"), domestic sales of subject merchandise may not be a reliable indicator of market value, see id. § 1677b (c)(1). In such instances, Commerce must "determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise and to which shall be added an amount for general expenses and profit plus the cost of containers, coverings and other expense." Id. Section 1677b(c)(1) further provides that "the valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy country or countries considered to be appropriate by the administering authority." Id.

In the Final Results, Commerce calculated the value of each input in the production process, using information from a market economy surrogate country.¹ The Department rejected alternative data submitted by Plaintiffs which included the financial statements of Indian Steel producer, Steel Authority of India Limited ("SAIL"). See Def.'s Resp. in Opp'n to Pls.' Mot. J. Upon the Agency R. ("Def.'s Brief") at 28. Plaintiffs contested the Department's refusal to consider this alternative data, and argued that its reliance on what Plaintiffs consider less representative data to value pig iron, was unsupported by substantial evidence. See Mem. of P. & A. in Supp. of Pls.' Mot. J. Upon the Agency R. ("Pls.' Brief") at 26. Specifically, Plaintiffs pointed to record evidence indicating that "approximately seventy percent of the pig iron imported into India during the POR was Sorelmetal."² Id. at 25. Sorelmetal, Plaintiffs argued, is a high-purity ductile iron that is dissimilar to the type of pig iron consumed by Plaintiffs in the production of subject merchandise. See id. Therefore, Plaintiffs concluded, the data Commerce relied on did not constitute the best available information for valuing pig iron. In defense of its position, Commerce pointed to the fact that the imports comprised primarily of Sorelmetal had the same range of average unit values ("AUVs") as those pig iron imports from the other six countries recorded in the WTA, and that "the respondents failed to place anything on the record of the review that indicated that Sorelmetal is different from the pig iron used by respondents." Def.'s Brief at 30.

The Court, in Longkou, concluded that Commerce failed to adequately explain whether the Indian imports under HTS 7201.1000 were the best available information for valuing the pig iron used by Plaintiffs. See 581 F.Supp.2d at 1363. Therefore, the Court remanded the matter back to Commerce with instructions to specifically address (i) Plaintiffs' argument that Sorelmetal is fundamentally different from the pig iron consumed by respondents and cannot be used in the production of subject brake rotors; or alternately (ii) whether pig iron imports into India under HTS 7201.1000 are the best available information for valuing the pig iron consumed by Plaintiffs in the production of subject brake rotors. See id. at 1364.

The Department issued its draft results of redetermination on January 15, 2009. See Draft Results of Redetermination Pursuant to Court Remand. Plaintiffs filed comments objecting to the draft results on January 22, 2009, and Commerce issued its Final Remand Redetermination on February 18, 2009. See Letter From Trade Pacific Respondents (Jan. 22, 2008 [sic]) ("Draft Comments"); Final Remand Redetermination. Consistent with the time parameters set forth on remand, Plaintiffs submitted their comments to the Final Remand Redetermination on March 20, 2009, and the Department filed its response to those comments on May 8, 2009. See Plaintiffs' Comments On Remand Redetermination (March 20, 2009) ("Final Comments"); Defendant's Response to Plaintiffs' Comments Regarding the Remand Redetermination (May 8, 2009). In the Final Remand Redetermination, Commerce undertook a more extensive examination of the record with regard to pig iron...