658 F.3d 1318 (Fed. Cir. 2011), 2010-1541, QVD Food Co., Ltd. v. United States

Docket Nº:2010-1541.
Citation:658 F.3d 1318
Opinion Judge:BRYSON, Circuit Judge.
Party Name:QVD FOOD CO., LTD., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Catfish Farmers of America, America's Catch, Country Select Catfish, Delta Pride Catfish, Inc., Harvest Select Catfish, Inc., Heartland Catfish Company, Pride of the Pond, and Simmons Farm Raised Catfish, Inc., Defendants.
Attorney:Mark E. Pardo, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Ned H. Marshak and Andrew T. Schutz. Melissa Devine, Trial Attorney, Civil Division, Commercial Litigation Branch, United States Department of Just...
Judge Panel:Before NEWMAN, BRYSON, and LINN, Circuit Judges. Opinion for the court filed by Circuit Judge BRYSON. Dissenting opinion filed by Circuit Judge NEWMAN. NEWMAN, Circuit Judge, dissenting.
Case Date:September 12, 2011
 
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Page 1318

658 F.3d 1318 (Fed. Cir. 2011)

QVD FOOD CO., LTD., Plaintiff-Appellant,

v.

UNITED STATES, Defendant-Appellee,

and

Catfish Farmers of America, America's Catch, Country Select Catfish, Delta Pride Catfish, Inc., Harvest Select Catfish, Inc., Heartland Catfish Company, Pride of the Pond, and Simmons Farm Raised Catfish, Inc., Defendants.

No. 2010-1541.

United States Court of Appeals, Federal Circuit.

September 12, 2011

Page 1319

Mark E. Pardo, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Ned H. Marshak and Andrew T. Schutz.

Melissa Devine, Trial Attorney, Civil Division, Commercial Litigation Branch, United States Department of Justice, of Washington, DC, argued for defendant-appellee. On the brief were Tony West,

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Assistant Attorney General, Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, and Richard P. Schroeder, Trial Attorney. Of counsel on the brief was David W. Richardson, United States Department of Commerce, Office of Chief Counsel for Import Administration, of Washington, DC.

Before NEWMAN, BRYSON, and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge BRYSON. Dissenting opinion filed by Circuit Judge NEWMAN.

OPINION

BRYSON, Circuit Judge.

I

This case concerns the fourth administrative review of an antidumping duty order on imports of frozen fish fillets from Vietnam. The fish that are the subject of the order are of the genus pangasius (" pangas fish" ), which compete with domestic catfish in the retail fish market in this country. The period of review covered August 2006 through July 2007 and resulted in the assessment of duties against several Vietnamese manufacturers, including appellant QVD Food Company, Ltd.

The Department of Commerce calculates antidumping duty margins by comparing the " normal value" of the goods in question with their actual or constructed export price. 19 U.S.C. § 1677b(a). If the normal value exceeds the export price, Commerce imposes an antidumping duty on imports equivalent to the percentage difference between those two values, i.e., the dumping margin. Id. §§ 1673, 1677(35)(A).

Commerce treats Vietnam as a " nonmarket economy" country. See 19 U.S.C. § 1677(18). Because it is not always possible to determine the normal value of goods from nonmarket economy countries in the manner outlined in 19 U.S.C. § 1677b(a)(1), Congress allows Commerce to value the factors of production for such goods by looking to the best available information from appropriate market economy countries, referred to as " surrogate countries." See id. § 1677b(c)(1); Dorbest Ltd. v. United States, 604 F.3d 1363, 1367 (Fed.Cir.2010). For the fourth administrative review of the antidumping order in this case, Commerce chose Bangladesh as the primary surrogate market economy country to use in valuing the factors of production. Commerce used information gathered from producers in Bangladesh to determine the value of whole pangas fish.

In the preliminary results of the fourth administrative review, Commerce valued whole pangas fish at 45 Takas/kilogram (" Tk/kg" ). That figure was based on the financial statement of Bangladeshi pangas fish producer Gachihata for the 2006-2007 fiscal year (" FY2006-07" ). Commerce determined that Gachihata's financial statement for that year contained the best available information in the record as to the price of the fish. Commerce used the FY2006-07 financial statements of two other Bangladeshi seafood producers to calculate financial ratios for " general expenses" to ascribe to Vietnamese exporters. See 19 C.F.R. § 351.408(c)(4). Based on those values, Commerce preliminarily found that QVD should be assigned a de minimis dumping margin.

After publishing its preliminary results on September 8, 2008, Commerce gave all parties until September 28, 2008, to place information relevant to the valuation of factors of production in the administrative record. See 19 C.F.R. § 351.301(c)(3)(ii). Commerce also gave the parties an opportunity to file comments and respond to comments submitted by others. Commerce was statutorily required to issue final results of the fourth administrative review within six months of the publication

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of the preliminary results, i.e., by March 9, 2009. See 19 U.S.C. § 1675(a)(3)(A).

In February 2009, both QVD and appellees Catfish Farmers of America et al. (" CFA" ) submitted written comments addressing the preliminary results. CFA argued that the FY2006-07 Gachihata financial statement was an unreliable source for valuing whole pangas fish. CFA pointed in particular to the Gachihata Board of Directors' Report for FY2006-07, which painted a grim picture of the company's financial condition. The Directors' Report described Gachihata as being " in dire need of fund[s]" and " dying day by day." QVD argued in a rebuttal brief that the FY2006-07 Gachihata data continued to constitute the best available information in the record for valuing whole pangas fish. Following the briefing, Commerce held an administrative hearing at which the parties addressed the issue of fish valuation.

On March 3, 2009, six days before the deadline to issue final results, Commerce placed in the administrative record a 2007 report by the United Nations Food and Agriculture Organization (" the FAO report" ). When offering the report into the record, Commerce explained that it might be an appropriate source of information for valuing whole pangas fish. The report cited an average price of 42 Tk/kg based on a survey of 60 Bangladeshi fish farms between October 2005 and February 2006. Commerce invited the parties to comment within two days on " the appropriateness of basing the surrogate value of the whole live fish input" on the FAO report.

QVD and CFA both commented on the FAO report two days later. QVD argued that Commerce should adopt the whole pangas fish price quoted in the report as the best available information as to the surrogate value of the fish. CFA, on the other hand, argued that the FAO report should be removed from the administrative record because Commerce had not given the parties the same amount of time to comment that would normally be available after new factual information was placed in the record. CFA also argued that there were significant questions as to the reliability of the FAO report, noting several difficulties encountered by the surveyors. CFA further contended that the data in the report may have been based on anecdotal evidence and that it was unclear whether the reported prices were contemporaneous with the survey that was conducted for the report.

On March 10, 2009, two business days after the parties submitted comments, Commerce publicly announced the final results of the fourth administrative review. Commerce valued whole pangas fish using an inflation-adjusted value from the FY2000-01 Gachihata financial statement. The FY2000-01 statement priced pangas fish at 68 Tk/kg, and Commerce adjusted that price upward for inflation to 98 Tk/kg. Commerce calculated the inflator by dividing the average Bangladeshi consumer price index (" CPI" ) for the months encompassing the period of review by the average CPI for the months encompassing Gachihata's 2000-01 fiscal year. Commerce did not alter the financial ratios used in the preliminary results. As a result of those calculations, Commerce assigned QVD an antidumping duty margin of 0.52%.

Commerce explained the differences between the preliminary and final results in a decision memorandum. It stated that it had attempted to locate new data relevant to whole pangas fish pricing after the parties expressed concerns about each of the potential data sources in the record. The last-minute introduction of the FAO report into the administrative record was the result of that research effort. The decision memorandum went on to explain that, while the FAO report might be deserving

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of consideration in subsequent proceedings, it was not an appropriate data source for the fourth administrative review because of its late addition to the record and the lack of time to assess the reliability of the information in the report. Commerce highlighted the concerns raised by CFA regarding the data in the report, " including the timing of the data and supporting documentation." The agency concluded that " additional time is necessary for both the interested parties and the Department to consider the merits and detailed information contained within the FAO report."

Turning to the FY2006-07 Gachihata financial statement, Commerce determined that the Gachihata Directors' Report for that year " cast considerable doubt on the reliability of using [that statement] as the basis for calculating a whole fish input surrogate value." Commerce raised several concerns about the data in the FY2006-07 statement and concluded that it was an unreliable source for valuing whole pangas fish. Once the FY2006-07 statement was deemed unreliable, Commerce determined that the market price quoted in the FY2000-01 Gachihata financial statement was the best available information in the record to value whole pangas fish. Commerce's decision to use the price in the FY2000-01 statement echoed its decision to use that same price in the initial antidumping duty determination and the first two administrative reviews. Commerce had chosen to use the FY2006-07...

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