707 F.Supp.2d 1355 (CIT 2010), 09-00217, Zhejiang Dunan Hetian Metal Co., Ltd. v. United States

• Docket Nº: Court 09-00217.
• Citation: 707 F.Supp.2d 1355
• Opinion Judge: POGUE, Judge.
• Party Name: ZHEJIANG DUNAN HETIAN METAL CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Parker-Hannifin Corp., Defendant-Intervenor. Slip Op. 10-41.
• Attorney: Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Mark E. Pardo and Andrew T. Schutz) for the Plaintiff. Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of ...
• Case Date: April 19, 2010
• Court: Court of International Trade

Page 1355

707 F.Supp.2d 1355 (CIT 2010)

ZHEJIANG DUNAN HETIAN METAL CO., LTD., Plaintiff,

v.

UNITED STATES, Defendant,

and

Parker-Hannifin Corp., Defendant-Intervenor.

Slip Op. 10-41.

Court No. 09-00217.

United States Court of International Trade.

April 19, 2010

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[Copyrighted Material Omitted]

Page 1357

[Copyrighted Material Omitted]

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Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Mark E. Pardo and Andrew T. Schutz) for the Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (L. Mischa Preheim and Carrie A. Dunsmore); and, of counsel, Joanna Theiss, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for the Defendant.

Roetzel & Andress, LPA (Donald R. Dinan and Craig A. Koenigs) for the Defendant-Intervenor.

PUBLIC VERSION

OPINION AND ORDER

POGUE, Judge.

This case involves a challenge to the United States Department of Commerce's

Page 1359

(" Commerce" or " the Department" ) data choices and adjustments in its calculation of an antidumping (" AD" ) duty on goods produced in a non-market economy (" NME" ). Specifically, Plaintiff Zhejiang DunAn Hetian Metal Co., Ltd. (" DunAn" ) challenges the Department's data selection, use of partial adverse facts available (" AFA" ), and scrap offset methodology in Commerce's final affirmative determination AD duty order regarding frontseating service valves (" FSVs" ) from the People's Republic of China (" China" ).¹

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c).

Currently before the court is DunAn's USCIT R. 56.2 Motion for Judgment Upon the Agency Record.

Standard of Review

The statutory provision which supplies the standard for review for Commerce's final determination requires that the court shall " hold unlawful any [agency] determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." Tariff Act of 1930, § 516A (b)(1)(B)(i), 19 U.S.C. § 1516a (b)(1)(B)(i) (2006).² See also 19 U.S.C. §§ 1516a (a)(2)(A)(i)(II), 1516a (a)(2)(B)(i); Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003).

Discussion

By its instant motion, DunAn seeks (1) recalculation of the Indian ³ import statistics used to value brass bar ⁴; (2) replacement of the labor wage rate-calculated in accordance with the Department's regulatory regression analysis ⁵-with an Indian labor rate of $0.21 per hour; (3) reversal of the Department's application of partial AFA to DunAn's December 2007 U.S. sales data and inventory carrying costs (" ICC" ) ⁶; and (4) revision of the Department's methodology for recognizing the value of DunAn's recycled brass scrap.

The court will, in turn, analyze each of these values.

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A. Commerce's Selection of a Value for Brass Bar

Commerce's selection of a value for brass bar is governed by 19 U.S.C. § 1677b(c), which requires that Commerce choose data that is the " best available information" on the record.⁷ Here, Commerce selected an average unit value (" AUV" ) derived from the World Trade Atlas (" WTA" ) ⁸ Indian import statistics for the POI. DunAn does not challenge Commerce's use of the WTA data set in general or the particular HTS classification used.⁹ Rather, DunAn argues that some aspects of the WTA data set are incorrect and should be eliminated. Specifically, DunAn challenges the sufficiency of the evidence to support Commerce's inclusion, in the WTA data, of brass bar values for Indian imports from France, Japan, and the United Arab Emirates (" UAE" ). ¹⁰

The relevant WTA data for HTS 7407.21.10 " Bars of Brass" are as follows:

Country Quantity (Kgs) Value (Rupees) AUV

Sri Lanka 44,720 7,990,000 178.67

Malaysia 24,262 8,031,000 331.01

UAE 8,000 3,652,000 456.50

Germany 4,526 2,581,000 570.26

Japan 3,911 1,574,000 402.45

United Kingdom 3,380 1,779,000 526.33

Denmark 1,300 541,000 416.15

Netherlands 1,042 501,000 480.81

Singapore 392 487,000 1,242.35

France 261 374,000 1,432.95

United States 90 78,000 866.67

TOTAL 91,884 27,588,000 300.25

Petitioner's Surrogate Value Comments Regarding Frontseating Service Valves from the People's Republic of China, A-570-933, POI 7/01/07-12/31/07 (Sept. 29, 2008), Admin. R. Pub. Doc. 106,¹¹ at Ex. Page 1361 1A. See also Zhejiang DunAn Heitan's First Surrogate Value Submission, A-570-933, POI 7/01/07-12/31/07 (Sept. 29, 2008), Admin. Pub. Doc. 107 (" DunAn's First Surrogate Value Submission " ), at Ex. 3A. See also Antidumping Duty Investigation of Frontseating Service Valves from the People's Republic of China: Factor Valuations for the Final Determination, A-570-933, POI 7/1/07-12/31/07 (Mar. 6, 2009), Admin. R. Pub. Doc. 227, at Attach. 3 (providing HTS classification for " Of copper-zinc base alloys (brass) ... Bars" as HTS 7407.21.10). Failing to remove imports from France, Japan, and the UAE constituted error, according to DunAn, because other record evidence, i.e., data from Infodrive India,¹² demonstrated that shipments from the above countries did not consist of brass ¹³ bar, and, thus, that WTA data as to the UAE, France, and Japan were flawed and unreliable. The Infodrive India data as to France, Japan, and the UAE ¹⁴ are as follows:

HTS Code Actual Product Description Origin Qty (Kgs) Value (Rupees) AUV

74072110 Barre B33/25 H Q1.5MM (Copper Bar) France 12.0 57091.02 4757.59

74072110 Bronze Bars (Aircraft Raw Materials for Defence Use) P.O.NO: 4160375 France 161.0 316566.20 1966.25

74072110 Beryllium Copper Flat Bar (TK46267) Japan 3589.5 1444719.91 402.49

74072110 Beryllium Copper Round Bar (TK46268) Japan 322.0 129600.17 402.49

74072110 Cupro Nickel Bar UAE 8110.0 3652206.74 450500.40

Page 1362 Second Surrogate Value Submission of Zhejiang DunAn Heitan (" DunAn" ): Investigation of Frontseating Service Valves from the People's Republic of China, A-570-933, POI 7/1/07-12/31/07 (Dec. 15, 2008), Admin. R. Pub. Doc. 189 (" DunAn's Second Surrogate Value Submission " ), at Ex. 2. DunAn stresses that copper bar, bronze ¹⁵ bar, beryllium ¹⁶copper bar, and cupronickel ¹⁷ bar are distinct from brass bar. ¹⁸ As a result, the dispute between the parties on this issue turns on Commerce's assessment of these Infodrive data. Explaining its decision not to exclude these imports, Commerce stated:

we find that the Infodrive data contain insufficient product information in the description of the line items to enable the Department to make a definitive determination that these line items are misclassified. Specifically, the product description in the Infodrive data are such that, given the dependency upon the chemical make-up of the underlying products, they could be properly classified within the Indian HTS category where they are, or in the category addressed by DunAn. Thus, the Department cannot determine, due to lack of product detail, i.e., chemical properties, the precise chemical make-up of these line items. Accordingly, without clear evidence to the contrary, the Department will not speculate that these materials have been misclassified. Therefore, ... the Department has determined to include imports from Japan, France, and the UAE in calculating the surrogate value for brass bar in the final determination because the record evidence does not demonstrate that the imports from these countries were misclassified.

Decision Mem. at 21.¹⁹ DunAn argues that Commerce should Page 1363 have accorded more weight to the Infodrive India data and that Commerce should have, based on these data, eliminated the three countries' data as unreliable. DunAn in addition contends that it is irrelevant which HTS classification applies; " [t]he issue is not whether these shipments have been properly classified within the HTS [but rather] is whether these shipments are representative of the factor input Commerce is attempting to value." (Pl.'s Br. 13.) DunAn offered record evidence to demonstrate that bronze, beryllium copper, and cupronickel have different chemical properties and have different uses than brass. ( See id. 12-13; ) DunAn's Second Surrogate Value Submission at Exs. 3A-3E. Therefore, according to DunAn, because the data from these three countries distorted the resulting brass bar surrogate value and because the Department's usage of that WTA data is not a selection of the " best available" evidence, Commerce's determination is unsupported by substantial evidence.²⁰ The government responds that the complete WTA data set under HTS category 7407.21.10 was the best available information on the record. Commerce chooses surrogate values on a case-by-case basis, and prefers to use " public, country-wide data." (Def.'s Opp'n to Pl.'s Mot. for J. Upon the Agency R. (" Def.'s Br." ) 27 (quoting Mittal Steel Galati S.A. v. United States, 31 CIT 1121, 1124, 502 F.Supp.2d 1295, 1298 (2007)).) Consequently, the government argues, Commerce used " the full WTA data set, with the exception of imports from non-market economy countries, countries known to have country-wide export subsidies, or unidentified countries. because [the data] are publicly-available, broad-based, product-specific, tax-exclusive and contemporaneous." ( Id. (citing Decision Mem. at 22-23).) In addition, the government points out that Commerce did in fact examine the Infodrive India data, but did not find them definitive, particularly because DunAn...