Zhaoqing New Zhongya Aluminum Co. v. United States

• Decision Date: 27 May 2015
• Docket Number: Slip Op. 15–50.,Court No. 14–00043.
• Citation: 70 F.Supp.3d 1298
• Parties: ZHAOQING NEW ZHONGYA ALUMINUM CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Aluminum Extrusions Fair Trade Committee, Defendant–Intervenor.
• Court: U.S. Court of International Trade

70 F.Supp.3d 1298

ZHAOQING NEW ZHONGYA ALUMINUM CO., LTD., Plaintiff

v.UNITED STATES, DefendantandAluminum Extrusions Fair Trade Committee, Defendant–Intervenor.

Slip Op. 15–50.

Court No. 14–00043.

United States Court of International Trade.

May 27, 2015.

Peter J. Koenig, Squire Patton Boggs (US), LLP, of Washington, DC, for Plaintiff.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, for Defendant. With him on the brief were Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, Department of Justice, Joyce R. Branda, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Rebecca Cantu, Senior Attorney, Office of the Chief Counsel for Enforcement and Compliance, Department of Commerce, of Washington, DC.

Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein, LLP, of Washington, DC, for Defendant–Intervenor.

OPINION

TSOUCALAS, Senior Judge:

Plaintiff, Zhaoqing New Zhongya Aluminum Co., Ltd., (“Zhongya”) moves for judgment on the agency record contesting Defendant United States Department of Commerce's (“Commerce”) determination to collapse into a single entity three affiliated exporters/producers, the Guang Ya group (“Guang Ya”), Zhongya, and Xinya, in Aluminum Extrusions From the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Rescission in Part 2010/12 (“Final Results of Administrative Review ”), 79 Fed.Reg. 96 (Jan. 2, 2014). Commerce and Defendant–Intervenor, Aluminum Extrusions Fair Trade Committee, oppose Zhongya's motion. For the following reasons, Zhongya's motion is denied and the Final Results of Administrative Review are affirmed.

JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction over this action pursuant to section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c)(2012) and section 516 of the Tariff Act of 1930, 19 U.S.C. § 1516a(a)(2) (2012).¹

In reviewing a challenge to Commerce's final determination in an antidumping administrative review, the Court will uphold Commerce's determination unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

Substantial evidence means “more than a mere scintilla” of “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456, 462 (1951) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126, 140 (1938) ). To determine if substantial evidence exists, the court reviews the record as a whole, including whatever “fairly detracts from its weight.” Id. at 488, 71 S.Ct. at 464, 95 L.Ed. at 467. The mere fact that it may be possible to draw two inconsistent conclusions from the record does not prevent Commerce's determination from being supported by substantial evidence. Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir.2001) ; see also Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131, 141 (1966).

BACKGROUND

This case concerns the first administrative review of the outstanding 2011 antidumping duty order on aluminum extrusions from the People's Republic of China (“PRC”) for the period of review covering November 12, 2010, through April 30, 2012. Final Results of Administrative Review, 79 Fed.Reg. at 96 ; Issues and Decision Memorandum for Final Results of Antidumping Duty Administrative Review: Aluminum Extrusions from PRC, A–570–967, (Jan. 2, 2014) (“Antidumping IDM ”); Aluminum Extrusions from the PRC: Antidumping Duty Order, 76 Fed.Reg. 30,650 (May 26, 2011).

On April 4, 2011, Commerce published its final determination of sales at less than fair value for Aluminum Extrusions from the PRC. Aluminum Extrusions From the PRC: Final Determination of Sales at Less Than Fair Value (“Final Determination of Sales at LTFV ”), 76 Fed.Reg. 18,524 (Apr. 4, 2011). Commerce investigated three Chinese producers of aluminum extrusions: Zhongya, Guang Ya, and Xinya. Id.

Commerce found that Guang Ya, Zhongya, and Xinya were affiliated pursuant to 19 U.S.C. 1677(A) and (F) and collapsed the three entities into a single entity based upon the claim that each entity was owned by a member of the Kwong family. Id. at 18,526 –27. Commerce determined that the single entity was eligible for a separate rate and that the use of adverse facts available (“AFA”) was warranted for both the Guang Ya, Zhongya, Xinya, entity and the PRC wide entity. Id. at 18,527 –29.

On April 4, 2011, Commerce also published the Final Determination of a countervailing duty investigation of Guang Ya, Zhongya, and Xinya. Aluminum Extrusions From the PRC: Final Affirmative Countervailing Duty Determination (“Final CVD Determination ”) 76 Fed.Reg. 18,521 (Apr. 4, 2011) ; Issues and Decision Memorandum for the Final Determination in the CVD Investigation of Aluminum Extrusions from the PRC, C–570–968, (Mar. 28, 2011) (“IDM for CVD investigation ”). In the Final CVD Determination, Commerce did not collapse Guang Ya, Zhongya, and Xinya, reasoning that there was no cross-ownership among the companies.IDM for CVD investigation at 58.

With respect to the antidumping investigation, Commerce concluded that the margin of 33.28% had probative value for the purpose of being selected as the AFA rate assigned to the Guang Ya, Zhongya, Xinya entity and the China-wide entity. Final Determination of Sales at LTFV, 76 Fed.Reg. at 18,530. In the investigation, Commerce found that a fourth company, Da Yang, owned and managed by another Kwong family sibling, was uncooperative and so subject to the China-wide rate and not collapsed with Zhongya, Guang Ya, and Xinya. Aluminum Extrusions From the PRC Notice of Preliminary Determination of Sales at Less Than Fair Value, and Preliminary Determination of Targeted Dumping (“Preliminary Determination of Sales at LTFV ”) 75 Fed.Reg. 69,403, 69,408 (Nov. 12, 2010).

This Court affirmed Commerce's decision to collapse the entities in the antidumping investigation on October 11, 2012, and Zhongya appealed to the Court of Appeals for the Federal Circuit (“CAFC”). Zhaoqing New Zhongya Aluminum Co., Ltd. v. United States, 36 CIT ––––, 887 F.Supp.2d 1301, 1311 (2012) ; Zhaoqing New Zhongya Aluminum Co., Ltd. v. United States, Appeal No. 13–1113 (Fed.Cir. June 18, 2013) (not reported in Federal Supplement). The CAFC dismissed the appeal on June 18, 2013. Id.

Commerce initiated the administrative review on July 10, 2012. Initiation of Antidumping and CVD Administrative Reviews and Request for Revocation in Part, 77 Fed.Reg. 40,565 (July 10, 2012). On January 2, 2014, Commerce published the Final Results of the Antidumping Duty Administrative Review and Rescission for Aluminum Extrusions from the PRC. Final Results of Administrative Review, 79 Fed.Reg. at 96. Commerce again collapsed Zhongya, Guang Ya Group, and Xinya into a single entity. Id. at 97. Additionally, Commerce found that the collapsed entity “failed to demonstrate that it was eligible for a separate rate and thus it is part of the PRC-wide entity.” Id. Commerce assigned the collapsed entity a 33.28% weighted average dumping margin. Id. at 100. Commerce collapsed the three companies claiming that each was owned and/or managed by a sibling or a sibling-in-law of the Kwong family. Antidumping IDM at 19.

Commerce justified collapsing the three companies in its Final Results of Administrative Review while rejecting Zhongya's arguments against collapsing. Id. at 15–21. Commerce determined that 19 C.F.R. § 351.401(f) controls the collapsing analysis and that “Zhongya/Guang Ya Group/Xinya is not eligible for a separate rate and is part of the PRC-wide entity.” Final Results of Administrative Review, 79 Fed.Reg. at 99 ; see also Antidumping IDM at 15. Commerce found that the Zhongya, Guang Ya, Xinya entity is not eligible for a separate rate, because Xinya did not answer any of Commerce's questionnaires including the quantity, value, and separate rate questionnaires, and Guang Ya did not answer the main or separate rate questionnaires. Antidumping IDM at 23.

Zhongya disputes Commerce's decision in the antidumping administrative review to collapse and treat as one entity Zhongya, Guang Ya, and Xinya. Pl.'s Mem. J. on R. at 1, Aug. 11, 2014, ECF No. 28 (“Pl.'s Br.”).

DISCUSSION

1. 19 C.F.R. § 351.401(f) controls the collapsing analysis

Zhongya argues that the antidumping statute authorizes collapsing only if producers and exporters jointly produce the same subject merchandise under 19 U.S.C. § 1677(28).² Pl.'s Br. at 5. Zhongya further contends that Zhongya, Guang Ya, and Xinya do not jointly produce the same subject merchandise; therefore, Commerce improperly collapsed the companies. Id. Zhongya relies on AK Steel Corp. v. United States to support its argument. AK Steel Corp. v. United States, 22 CIT 1070, 1080, 34 F.Supp.2d 756, 765 (1998), rev'd on other grounds, 226 F.3d 1361 (Fed.Cir.2000). Commerce maintains that the language of § 1677(28) is not intended to address collapsing issues. Def.'s Mem. in Opp'n to Pl.'s Rule 56.2 Mot. for J. on the Agency R. at 24, Feb. 13, 2015, ECF No. 39 (“Def.'s Br.”). Commerce posits instead that 19 C.F.R. § 351.401(f) controls the collapsing analysis. Id. at 25.

19 C.F.R. § 351.401(f) provides that Commerce may collapse affiliated producers where there “is a significant potential for the manipulation of price or production.” 19 C.F.R. § 351.401(f)(1) (2014). In determining whether there is a significant potential for manipulation Commerce considers the following factors: (i) the level of common ownership; (ii) the extent to which managerial employees or board members of one firm sit on the board of directors of an affiliated firm; and (iii) whether operations are intertwined, such as through the sharing of...