Gifts v. United States

• Decision Date: 20 May 2013
• Docket Number: No. 2012–1312.,2012–1312.
• Citation: 716 F.3d 1370
• Court: U.S. Court of Appeals — Federal Circuit
• Parties: YANGZHOU BESTPAK GIFTS & CRAFTS CO., LTD., Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee, and Berwick Offray LLC, Defendant–Appellee.

716 F.3d 1370

YANGZHOU BESTPAK GIFTS & CRAFTS CO., LTD., Plaintiff–Appellant,

v.UNITED STATES, Defendant–Appellee,andBerwick Offray LLC, Defendant–Appellee.

No. 2012–1312.

United States Court of Appeals,Federal Circuit.

May 20, 2013.

Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, of New York, NY, argued for plaintiff-appellant. With him on the brief were Bruce M. Mitchell, Mark E. Pardo and Andrew T. Schutz.

Renee Gerber, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee, United States. With her on the brief was Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.

Gregory C. Dorris, Pepper Hamilton LLP, of Washington, DC, argued for defendant-appellee, Berwick Offray LLC.

Before RADER, Chief Judge, MAYER, and PROST, Circuit Judges.

RADER, Chief Judge.

Yangzhou Bestpak Gifts & Crafts Co., Ltd. (Bestpak) appeals from a final judgment of the United States Court of International Trade concerning its importation of narrow woven ribbons with woven selvedge from China. Yangzhou Bestpak Gifts & Crafts Co. v. United States, 825 F.Supp.2d 1346 (Ct. Int'l Trade 2012)( Bestpak II ). The Court of International Trade sustained the United States Department of Commerce's (Commerce) calculation of Bestpak's separate rate margin using a simple average of a de minimis and an adverse facts available margin, yielding a rate of 123.83%. Because substantial evidence does not support the 123.83% rate, this court vacates and remands.

I.

Commerce imposes antidumping duties upon imported products that it determines have been “dumped,” or sold in the United States at less than fair value. See19 U.S.C. § 1673. An antidumping duty reflects the amount by which the normal value exceeds the export price of a foreign exporter's merchandise. §§ 1673e(a)(1), 1677(35). This excess amount becomes the “dumping margin.”

Commerce must determine individual dumping margins for each known exporter or producer of the subject merchandise within a twelve-month period. §§ 1675, 1677f–1(c)(1). Commerce calculates a dumping margin specific to each respondent based upon analysis of sales and cost data collected from the respondent via an antidumping questionnaire that may total thousands of pages of extensive narrations and exhibits. Appellee United States' Br. at 22. However, if this process is not practicable because of the large number of respondents involved in the investigation, Commerce may select a more reasonable number of mandatory respondents for these individual investigations. § 1677f–1(c)(2). Commerce often limits mandatory respondents to those with the largest volume of exports and/or shipments of subject merchandise during the period of investigation, or a statistically valid sample among all known respondents. § 1677f–1(c)(2)(A)–(B). For the remaining non-mandatory respondents, Commerce calculates an “all others” rate, usually by taking the weighted average of all mandatory respondents' rates, excluding any zero or de minimis rates and rates based entirely on adverse facts available (AFA). However, when all dumping margins established are only either de minimis or AFA rates, Commerce applies the exception found in § 1673d(c)(5)(B). In such cases, Commerce “may use any reasonable method to establish the estimated all others rate for exporters and producers not individually investigated, including averaging the estimated weighted average dumping margins determined for the exporters and producers individually investigated.” 19 U.S.C. § 1673d(c)(5)(B).

The Statement of Administrative Action (SAA), recognized by Congress as an authoritative expression concerning the interpretation and application of the Tariff Act under 19 U.S.C. § 3512(d), provides more guidance on the methodology Commerce should apply under the exception to the general rule:

In such situation, Commerce may use any reasonable method to calculate the all others rate. The expected method in such cases will be to weight average the zero and de minimis margins and margins determined pursuant to the facts available, provided that volume data is available. However, if this method is not feasible, or if it results in an average that would not be reasonably reflective of potential dumping margins for non-investigated exporter or producers, Commerce may use other reasonable methods.

SAA, accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103–316, at 873 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4200.

Non-mandatory respondents also have the option of voluntarily completing the antidumping questionnaire to seek individual investigation. However, even after the voluntary respondent timely submits its response to Commerce's questionnaire, Commerce may decline to fully investigate the voluntary respondent. This occurs when Commerce determines that the number of exporters or producers who have submitted such information is so large that individual examination of such exporters or producers would be unduly burdensome and inhibit the timely completion of the investigation. § 1677m(a)(2).

Proceedings involving a nonmarket economy, such as China, are slightly different. Although Commerce selects mandatory respondents to individually investigate, Commerce begins with a rebuttable presumption that all respondents in the investigation are under foreign government control and thus should receive a single countrywide dumping rate. Sigma Corp. v. United States, 117 F.3d 1401, 1405 (Fed.Cir.1997). In many cases, the country-wide rate is based on AFA. 1 Antidumping & Countervailing Duty Laws Appendix B. Commerce may use adverse inferences when calculating a rate if an investigated respondent refuses to cooperate by impeding the investigation or not properly providing information. Commerce typically concludes that some part of the country-wide entity has not cooperated in the proceeding because those that have responded do not account for all imports of the subject merchandise. § 1677e(b). Commerce is required to corroborate chosen AFA rates to ensure that they fall within the purportedly acceptable range of margins determined. § 1677e(c).

In order to secure a separate rate from the countrywide rate, respondents in a nonmarket economy must establish an absence of de jure and de facto government control. Id. The mandatory respondents' antidumping questionnaire allows a respondent to assert independence from the country-wide entity. All other respondents seeking eligibility for a separate rate must complete a separate rate application that is about thirty pages of responses and attached exhibits. Appellee United States' Br. at 22.

The separate rate for eligible non-mandatory respondents is generally calculated following the statutory method for determining the “all others rate” under § 1673d(c)(5)(A). Transcom, Inc. v. United States, 294 F.3d 1371, 1374 (Fed.Cir.2002); Amanda Foods (Vietnam) Ltd. v. United States, 647 F.Supp.2d 1368, 1379 (Ct. Int'l Trade 2009). As such, Commerce will typically use the weighted average of all mandatory respondents' rates, excluding any de minimis and AFA rates. Appellee Berwick's Br. at 15. If all dumping margins established are only either de minimis or AFA rates, Commerce accordingly applies the exception found in § 1673d(c)(5)(B).

II.

Bestpak is a Chinese exporter of narrow woven ribbons. These are woven ribbons with a width that is less than or equal to 12 centimeters and have finished edges that keep the fabric from unraveling or fraying. On August 6, 2009, Commerce initiated an antidumping investigation of narrow woven ribbons from China and Taiwan for the period spanning January 1 to June 30, 2009. See Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China and Taiwan, 74 Fed. Reg. 39,291, 39,292 (Aug. 6, 2009).

Commerce began its investigation by issuing quantity and value data (Q & V) questionnaires to all known Chinese exporters of this product for the purpose of selecting mandatory respondents to review. Id. at 39,296. Nineteen companies responded, including Bestpak, and Commerce determined that it was impractical to individually review all of them. Resp't Selection Mem. (Sept. 11, 2009), Pub. Doc. 94 at 4 (“After careful consideration ... we find that we can reasonably examine no more than two producers and/or exporters.”). Notably, Bestpak fully cooperated.

On September 11, 2009, Commerce selected the two largest exporters as mandatory respondents for individual investigation: Ningbo Jintian Import & Export Co., Ltd. (Jintian) and Yama Ribbons & Bows Co., Ltd. (Yama). Pub. Doc. 94 at 3. Yama exported 135,000 kg of subject merchandise to the United States during the period of investigation, while Jintian exported 100,000 kg. No other Chinese respondent exported more than 48,000 kg, and Bestpak exported 21,000 kg, ranking seventh of the nineteen exporters submitting Q & V information.

Between September and November of 2009, Commerce received responses from Yama, but nothing from Jintian. Commerce also received separate rate applications from twelve exporters, including Bestpak. As part of those applications, each applicant provided a photocopy of an invoice of a U.S. commercial transaction during the period of investigation. No exporter requested voluntary investigation, and Commerce did not choose a replacement mandatory respondent for Jintian even though Commerce, in the past, has chosen a replacement respondent when it was clear that a mandatory company would not participate. See, e.g., Prestressed Concrete Steel Wire Strand from the People's Republic of China, 74 Fed. Reg. 61,104 (Nov. 23, 2009). In sum, Commerce's investigation was left with...