Gpx Intern. Tire Corp. v. U.S., Slip Op. 09-103.

• Decision Date: 18 September 2009
• Docket Number: Court No. 08-00285.,Slip Op. 09-103.
• Citation: 645 F.Supp.2d 1231
• Parties: GPX INTERNATIONAL TIRE CORPORATION and Hebei Starbright Tire Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Bridgestone Americas, Inc., Bridgestone Americas Tire Operations, LLC, Titan Tire Corporation, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC, Defendant-Intervenors.
• Court: U.S. Court of International Trade

645 F.Supp.2d 1231

GPX INTERNATIONAL TIRE CORPORATION and Hebei Starbright Tire Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Bridgestone Americas, Inc., Bridgestone Americas Tire Operations, LLC, Titan Tire Corporation, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC, Defendant-Intervenors.

Slip Op. 09-103.

Court No. 08-00285.

United States Court of International Trade.

September 18, 2009.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Winston & Strawn LLP (Daniel L. Porter, James P. Durling, Matthew P. McCullough, Ross E. Bidlingmaier, and Valerie S. Ellis), Washington, DC, for Plaintiffs.

Greenberg Traurig, LLP (Philippe M. Bruno and Rosa S. Jeong), Washington, DC, for consolidated Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (John J. Todor and Loren M. Preheim); John D. McInerney, Chief Counsel for Import Administration, Irene H. Chen, Carrie L. Owens, Matthew D. Walden, David Richardson, and Ahran Kang McCloskey, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel, for the defendant.

King & Spalding, LLP (Joseph W. Dorn, Christopher T. Cloutier, Daniel L. Schneiderman, J. Michael Taylor, Jeffrey M. Telep, Kevin M. Dinan, and Prentiss L. Smith); Stewart and Stewart (Geert M. De Prest, Elizabeth A. Argenti, Elizabeth J. Drake, Eric P. Salonen, Terence P. Stewart, Wesley K. Caine, and William A. Fennell), Washington, DC, for Defendant-Intervenors.

OPINION

RESTANI, Chief Judge.

These consolidated court actions challenge the Department of Commerce's ("Commerce") final determinations rendered in concurrent antidumping duty ("AD") and countervailing duty ("CVD") investigations of certain pneumatic off-the-road ("OTR") tires from the People's Republic of China ("PRC" or "China"). Motions for judgment on the agency record were filed by GPX International Tire Corporation ("GPX") and Hebei Starbright Tire Co., Ltd. ("Starbright"), Titan Tire Corporation and the United Steel, Paper and Forestry, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC (collectively, "Titan"), Bridgestone Americas, Inc. and Bridgestone America Tire Operations, LLC (collectively, "Bridgestone"), and Tianjin United Tire & Rubber International Co., Ltd. ("TUTRIC"). Pursuant to court order, motions for judgment on the agency record were divided into three key issues: (1) CVD applicability and non-market economy ("NME") AD coordination issues; (2) all other AD issues; and (3) all other CVD issues.

For the reasons stated below, the court finds that Commerce is not barred by statutory language from applying the CVD law to imports from the PRC, but that Commerce's current interpretation of the NME AD statute in relation to the CVD statute here was unreasonable. If Commerce is to apply CVD remedies where it also utilizes NME AD methodology, Commerce must adopt additional policies and procedures for its NME AD and CVD methodologies to account for the imposition of the CVD law to products from an NME country and avoid to the extent possible double counting of duties. In the absence of designation as a market economy ("ME"), to identify and measure subsidies in the PRC, Commerce must also determine the type of subsidy and whether the subsidy is measurable at a particular time in the PRC, rather than imposing a bright-line cut-off date.

Accordingly, GPX and Starbright's motion for summary judgment on the CVD and NME AD coordination issues is granted in part and denied in part, and GPX and Starbright's motions for summary judgment on all other AD and CVD issues are granted in part and denied in part. Titan and Bridgestone's motions for judgment on the agency record on all other AD and CVD issues are granted in part and denied in part.¹

BACKGROUND

On June 18, 2007, Titan filed petitions seeking imposition of ADs and CVDs for certain pneumatic OTR tires from the PRC. (See App. to Brs. Filed by Titan ("Titan App.") Tab CVD PR Doc. 1.) Commerce initiated AD and CVD investigations for the subject merchandise for the period of October 1, 2006 through March 31, 2007. See Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Initiation of Countervailing Duty Investigation, 72 Fed.Reg. 44,122 (Dep't Commerce Aug. 7, 2007) ("CVD Notice"); Initiation of Antidumping Duty Investigation: Certain New Pneumatic Off-the-Road Tires From the People's Republic of China, 72 Fed.Reg. 43,591 (Dep't Commerce Aug. 6, 2007). Commerce selected three Chinese producers/exporters of pneumatic OTR tires as mandatory respondents for both the AD and CVD investigations: Starbright, TUTRIC, and Guizhou Tyre Co., Ltd. ("Guizhou").² See Final AD Determination, 73 Fed.Reg. at 51,625; Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Final Affirmative Countervailing Duty Determination and Final Negative Determination of Critical Circumstances, 73 Fed.Reg. 40,480, 40,483 (Dep't Commerce July 15, 2008) ("Final CVD Determination"). GPX is a domestic importer of OTR tires and wholly owns Chinese producer Starbright. See Verification of the Factors Response of Starbright in the Antidumping Duty Investigation of Certain New Pneumatic Off-The-Road Tires from the People's Republic of China, A-570-912, at 3-4 (May 5, 2008) ("AD Verification Report") available at Pls.' App. Tab 11. Titan and Bridgestone are manufacturers of OTR tires in the United States. See Final AD Determination, 73 Fed.Reg. at 51,625; (Br. of Titan in Opp'n to GPX & Starbright's Mot. for J. Upon the Agency R. as to AD/CVD "Coordination" Issue 2).

Using NME methodologies, Commerce calculated an AD margin of 29.93% for Starbright, 8.44% for TUTRIC, and 5.25% for Guizhou. See Final AD Determination, 73 Fed.Reg. at 51,625. Commerce also calculated a CVD margin of 14% for Starbright, 6.85% for TUTRIC, and 2.45% for Guizhou. See Final CVD Determination, 73 Fed.Reg. at 40,483. The International Trade Commission ("ITC") published its affirmative injury determination on September 5, 2008. See Certain Off-the-Road Tires From China; Determination, 73 Fed.Reg. 51,842 (ITC Sept. 5, 2008).

On September 9, 2008, GPX filed three complaints with the court, contesting the CVD determination, the AD determination, and the ITC's injury determination.³ On November 12, 2008, the court denied GPX's motion for a temporary restraining order and a preliminary injunction to prevent the imposition of the approximate 44% cash deposit requirement while the merits of the underlying actions were decided. GPX Int'l Tire Corp. v. United States, 587 F.Supp.2d 1278, 1291-92 (CIT 2008), reh'g denied, 593 F.Supp.2d 1389 (CIT 2008). On February 12, 2009, the court also denied the Ministry of Commerce, People's Republic of China's motion to intervene, as good cause was not established for the untimely motion. GPX Int'l Tire Corp. v. United States, Slip Op. 09-11, 2009 WL 362136 (CIT Feb. 12, 2009). On January 20, 2009, the court consolidated herewith all actions challenging the final AD and CVD determinations, except for the matter involving Xugong. Order (Jan. 20, 2009).⁴

STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will uphold Commerce's final determinations in AD and CVD investigations unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. CVD Applicability and NME AD Coordination

A. The unfair trade statutes are ambiguous regarding the application of CVD remedies to products from the PRC.

Prior to 2007, Commerce did not apply CVD law to any type of NME country, finding that the centrally controlled economies in NME countries made it difficult to "disaggregate government actions in such a way as to identify the exceptional action that is a subsidy." Carbon Steel Wire Rod from Czechoslovakia: Final Negative Countervailing Duty Determination, 49 Fed.Reg. 19,370, 19372 (Dep't Commerce May 7, 1984) ("CSW from Czechoslovakia"); see also Countervailing Duties, 63 Fed.Reg. 65,348, 65,360 (Dep't Commerce Nov. 25, 1998) (Where "[Commerce] determines that a change in status from non-market to market is warranted, subsidies bestowed by that country after the change in status would become subject to the CVD law."). Commerce effected a sea change in 2007, however, when it determined that although the PRC remained designated as an NME country, Commerce could apply the CVD law to products from the PRC. See Coated Free Sheet Paper From the People's Republic of China: Amended Preliminary Affirmative Countervailing Duty Determination, 72 Fed.Reg. 17,484 (Dep't Commerce Apr. 9, 2007) ("CFS Paper Preliminary Determination"); Coated Free Sheet Paper from the People's Republic of China: Final Affirmative Countervailing Duty Determination, 72 Fed.Reg. 60,645 (Dep't Commerce Oct. 25, 2007); Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Coated Free Sheet from the People's Republic of China, C-570-907, at 19-23 (Oct. 17, 2007), available at http://ia.i ta.doc.gov/frn/summary/PRC/E7-21046-1.pdf. Commerce reasoned that the PRC had enacted significant and sustained economic reforms, which allowed the PRC's economy to sufficiently advance beyond the Soviet-style command economy so that Commerce could now determine the transfer of a specific financial contribution and benefit from the government to a producer in China. See Countervailing Duty Investigation of Coated Free Sheet Paper from the People's Republic of China—Whether the Analytical Elements of the Georgetown Steel Opinion are Applicable to China's Present-Day Economy, C-570-907, at 10 (Mar. 29, 2007) ("Georgetown Steel...