637 F.Supp.2d 1183 (CIT 2009), 04-00240, Jinan Yipin Corp., Ltd. v. United States

Docket Nº:Court 04-00240.
Citation:637 F.Supp.2d 1183
Opinion Judge:STANCEU, Judge.
Party Name:JINAN YIPIN CORPORATION, LTD. and Shandong Heze International Trade and Developing Company, Plaintiffs, v. UNITED STATES, Defendant, and Fresh Garlic Producers Association, Christopher Ranch, L.L.C., the Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant-Intervenors. Slip Op. 09-70.
Attorney:Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (Bruce M. Mitchell and Mark E. Pardo) for plaintiff Jinan Yipin Corporation, Ltd. Lee & Xiao (Yingchao Xiao) for plaintiff Shandong Heze International Trade and Developing Company. Tony West, Assistant Attorney General, Jeanne...
Case Date:July 02, 2009
Court:Court of International Trade
 
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Page 1183

637 F.Supp.2d 1183 (CIT 2009)

JINAN YIPIN CORPORATION, LTD. and Shandong Heze International Trade and Developing Company, Plaintiffs,

v.

UNITED STATES, Defendant,

and

Fresh Garlic Producers Association, Christopher Ranch, L.L.C., the Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant-Intervenors.

Slip Op. 09-70.

Court No. 04-00240.

United States Court of International Trade.

July 2, 2009

Page 1184

          Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (Bruce M. Mitchell and Mark E. Pardo) for plaintiff Jinan Yipin Corporation, Ltd.

          Lee & Xiao (Yingchao Xiao) for plaintiff Shandong Heze International Trade and Developing Company.

          Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Richard P. Schroeder and Mark T. Pittman); Evangeline D. Keenan, Scott D. McBride, and Amanda L. Blaurock, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

          Kelley Drye & Warren LLP (Michael J. Coursey and John M. Herrmann) for defendant-intervenors Fresh Garlic Producers Association, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc.

          OPINION AND ORDER

          STANCEU, Judge.

         Before the court is the redetermination made by the International Trade Administration, United States Department of Commerce (" Commerce" or the " Department" ) in response to the court's remand order in Jinan Yipin Corp. v. United States, 31 CIT __, 526 F.Supp.2d 1347 (2007) (" Jinan Yipin I " ). Final Results of Redetermination Pursuant to Ct. Remand (" Remand Redetermination" ). Because the Remand Redetermination does not comply in all respects with the court's order in Jinan Yipin I, the court issues a second remand order with specific instructions.

          I. BACKGROUND

         The background of this litigation is discussed in the court's opinion in Jinan Yipin I . See 31 CIT at __, 526 F.Supp.2d. at 1349-51. Additional background is presented below to address events that have occurred since Jinan Yipin I was decided.

          Jinan Yipin I ruled on plaintiffs' several challenges to the final results that Commerce issued in the eighth administrative review (" Final Results" ) of the antidumping duty order on fresh garlic (" subject merchandise" ) imported from the People's Republic of China (" China" or the " PRC" ). Jinan Yipin I, 31 CIT __, 526 F.Supp.2d 1347; see

Page 1185

Fresh Garlic From the People's Republic of China: Final Results of Antidumping Duty Admin. Review and New Shipper Reviews, 69 Fed.Reg. 33,626 (Jun. 16, 2004) (" Final Results " ). In the Final Results, Commerce assigned plaintiff Jinan Yipin Corporation, Ltd. (" Jinan Yipin" ), a Chinese producer and exporter of the subject merchandise, a weighted average antidumping duty margin of 115.81%. Final Results, 69 Fed.Reg. at 33,627, 33,629; see Summons 1. Commerce assigned plaintiff Shandong Heze International Trade and Developing Company (" Shandong" ), a Chinese exporter of the subject merchandise, a margin of 43.30% in the Final Results. Final Results, 69 Fed.Reg. at 33,627, 33,629.

         Based on the conclusions the court reached on the various issues plaintiffs raised in contesting the Final Results, Jinan Yipin I ordered Commerce to redetermine the weighted average antidumping duty margins assigned to each of the plaintiffs. Jinan Yipin I, 31 CIT at __, 526 F.Supp.2d at 1382-83. The Remand Redetermination assigns a 9.70% margin to Jinan Yipin. Remand Redetermination 26. Because Commerce, in the Remand Redetermination, did not make any changes in response to the court's conclusions on the issues on which Shandong contested the Final Results, the Remand Redetermination assigns to Shandong an unchanged margin of 43.30%. Id. at 26-27.

          II. DISCUSSION

          The court will sustain the Department's determination upon remand if it complies with the court's remand order, is supported by substantial evidence on the record, and is otherwise in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B)(i) (2000). Substantial evidence is " such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). In considering whether substantial record evidence supports the Department's findings, the court considers " the record as a whole, including evidence that supports as well as evidence that ‘ fairly detracts from the substantiality of the evidence.’ " Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984)).

          A. The Court Affirms the Department's Resolution in the Remand Redetermination of the " Affiliation" and " Indirect Selling Expense" Issues Affecting Jinan Yipin

         In Jinan Yipin I, the court concluded that Commerce acted unlawfully in assigning a 376.67% antidumping duty rate to the sales of subject merchandise that Jinan Yipin's U.S. sales affiliate, American Yipin, made to " Houston Seafood," one of its customers in the United States. Jinan Yipin I, 31 CIT at __, 526 F.Supp.2d at 1351. Commerce based this rate on the " facts otherwise available" and " adverse inferences" provisions of 19 U.S.C. § 1677e. See 19 U.S.C. § 1677e(a)-(b) (2000). Commerce found that Jinan Yipin failed to cooperate to the best of its ability in providing, in response to the Department's questionnaires, information pertaining to Jinan Yipin's affiliates during the period of review. See Jinan Yipin I, 31 CIT at __, 526 F.Supp.2d at 1353-54. The court concluded that the Final Results, which presented vague and inconsistent conclusions on the issue of whether an affiliation existed between Jinan Yipin, through American Yipin, and Houston Seafood, could not be sustained upon a finding that Jinan Yipin withheld information on the affiliation issue or substantially impeded the Department's access to information needed to resolve that issue. Id. at __, __, 526 F.Supp.2d at 1354, 1358-61.

Page 1186

          After reopening the record, Commerce found on remand that Jinan Yipin and Houston Seafood were not affiliated at any point from November 1, 2001 to October 31, 2002 (the " period of review" ), which is the time period covered by the administrative review at issue in this proceeding. Remand Redetermination 2, 4. Based on this new finding, the Remand Redetermination treats all sales between American Yipin and Houston Seafood during the period of review as unaffiliated sales and does not apply to the sales to Houston Seafood a rate based on facts otherwise available or adverse inferences. Id. at 4-5. Jinan Yipin makes no objection to the Department's resolution of this issue. See Jinan Yipin's Comments Regarding the Dep't's Remand Redetermination (" Jinan Yipin's Comments" ). The court affirms the Department's conclusion, in the Remand Redetermination, that American Yipin and Houston Seafood were not affiliated for the period of review and its decision not to apply facts otherwise available and adverse inferences to American Yipin's sales of Jinan Yipin's merchandise to Houston Seafood during the period of review. Remand Redetermination 4-5.

          Jinan Yipin I concluded that Commerce also erred in calculating Jinan Yipin's indirect selling expenses for purposes of determining constructed export price. Jinan Yipin I, 31 CIT at __, 526 F.Supp.2d at 1366. Commerce found at verification that American Yipin shared certain employees with Bayou Dock, a company located near the business location of American Yipin that did not sell the subject merchandise. See id. at __, 526 F.Supp.2d at 1363. Commerce concluded that American Yipin did not properly record salary expenses for these shared employees for its first three months of operation in its Westwego, Louisiana location. See id. In the Final Results, Commerce, invoking its authority to use facts otherwise available and adverse inferences under 19 U.S.C. § 1677e, added all twelve months of Bayou Dock's salary and benefit expenses to Jinan Yipin's reported indirect selling expense. Id. at __, 526 F.Supp.2d at 1364. The court concluded in Jinan Yipin I that substantial record evidence supported a finding that some of American Yipin's indirect selling expenses were under-reported or irregularly reported but also concluded that the Final Results did not contain a satisfactory explanation of why adding Bayou Dock's salary and expenses for all twelve months of the period of review was a reasonable exercise of the authority provided by § 1677e. Id. at __, 526 F.Supp.2d at 1365-66.

         On remand, Commerce applied to American Yipin's indirect selling expenses the equivalent of three full months of salary and benefit expenses for the shared employees. Remand Redetermination 7. According to Commerce, this added amount " continues to represent adverse facts available because it includes the full salaries of the shared employees which were incurred while performing work for both American Yipin and Bayou Dock." Id. In its comments on the Remand Redetermination, Jinan Yipin does not object to this method of recalculating its indirect selling expenses. See Jinan Yipin's Comments. The court affirms the Remand Redetermination with respect to the recalculation of the indirect selling expenses.

          B. The Department's Surrogate Values for Garlic Seed, Water, and Cardboard Cartons Are Not in Accordance with Law

          The statute, 19 U.S.C. § 1677b(c) (2000), establishes...

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