Ass'n Of American Sch. Paper Suppliers v. United States

• Decision Date: 27 July 2010
• Docket Number: Slip Op. 10-82.,Court No. 09-00163.
• Parties: ASSOCIATION OF AMERICAN SCHOOL PAPER SUPPLIERS, Plaintiff, v. UNITED STATES, Defendant, and Shanghai Lian Li Paper Products Co., Ltd., Defendant-Intervenor.
• Court: U.S. Court of International Trade

716 F.Supp.2d 1329

ASSOCIATION OF AMERICAN SCHOOL PAPER SUPPLIERS, Plaintiff,

v.UNITED STATES, Defendant,andShanghai Lian Li Paper Products Co., Ltd., Defendant-Intervenor.

Slip Op. 10-82.

Court No. 09-00163.

United States Court ofInternational Trade.

July 27, 2010.

Wiley Rein LLP, Washington, DC (Timothy C. Brightbill, Alan H. Price, and Maureen E. Thorson) for Plaintiff Association of American School Paper Suppliers.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (John J. Todor); and Joanna Theiss, Office of Chief Counsel for Import Administration, Department of Commerce, Of Counsel, for Defendant United States.

Dorey & Whitney LLP (William E. Perry) for Defendant-Intervenor Shanghai Lian Li Paper Products Co., Ltd.

OPINION

Wallach, Judge.

IINTRODUCTION

This action arises out of an administrative review by the U.S. Department of Commerce (“Commerce”) of an antidumping duty order covering certain lined paper products from the People's Republic of China (“PRC”). Plaintiff Association of American School Paper Suppliers (“AASPS”) challenges determinations by Commerce in Certain Lined Paper Products from the People's Republic of China: Notice of Final Results of the Antidumping Duty Administrative Review, 74 Fed.Reg. 17,160 (April 14, 2009) (“Final Results”). The court has jurisdiction pursuant to 28 U.S.C. § 1581(c).

AASPS's Motion for Judgment on the Agency Record (“AASPS's Motion”) is GRANTED IN PART and DENIED IN PART. Commerce's selection of information to calculate surrogate financial values is unsupported by substantial evidence. Commerce's other challenged determinations are supported by substantial evidence and otherwise in accordance with law.

IIBACKGROUND

In September 2006, Commerce issued an antidumping duty order on certain lined paper products from the PRC (“subject merchandise”). See Notice of Amended Final Determination of Sales at Less Than Fair Value: Certain Lined Paper Products from the People's Republic of China; Notice of Antidumping Duty Orders: Certain Lined Paper Products from India, Indonesia and the People's Republic of China; and Notice of Countervailing Duty Orders: Certain Lined Paper Products from India and Indonesia, 71 Fed.Reg. 56,949 (September 28, 2006). In October 2007, Commerce initiated the first administrative review of that order for the period of review from April 17, 2006 through August 31, 2007 (“the POR”). See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 72 Fed.Reg. 61,621, 61,621 (October 31, 2007). Commerce selected Defendant-Intervenor Shanghai Lian Li Paper Products Co., Ltd. (“Lian Li”) as a mandatory respondent. Id.

In antidumping duty proceedings concerning merchandise from the PRC, Commerce determines the normal value of that merchandise through an approach specific to non-market economy (“NME”) countries. See 19 U.S.C. § 1677b(c); 19 C.F.R. § 351.408; Department of Commerce, Antidumping Manual (October 13, 2009) (“AD Manual”), Chap. 10; Certain Lined Paper Products from the People's Republic of China: Notice of Preliminary Results of the Antidumping Duty Administrative Review, 73 Fed.Reg. 58,540, 58,542 (October 7, 2008) (“Preliminary Results”). ¹ This approach uses surrogate data from a comparable market economy country to value the factors of production (“FOPs”) (including materials, labor, and energy) and other costs of production (“non-FOP costs of production”) (including factory overhead; selling, general, and administrative expenses; and profit) for the merchandise. See Department of Commerce, Antidumping Manual (October 13, 2009) (“AD Manual”), Chap. 10 at 14-18; see also 19 CFR § 351.408(c)(4). In valuing non-FOP costs of production, Commerce calculates surrogate financial values using the publicly available financial statements of a producer of comparable merchandise from the surrogate country. See 19 CFR § 351.408(c)(4). For the instant review, Commerce chose India as the surrogate country, because India is a market economy country that (1) is “at a level of economic development comparable to that of” the PRC and (2) is a significant producer of comparable merchandise. Preliminary Results, 73 Fed.Reg. at 58,542.

In November 2007, Commerce began issuing questionnaires to Lian Li regarding, inter alia, production and sale of subject merchandise. See, e.g., Certain Lined Paper Products from the People's Republic of China Questionnaire (November 8, 2007), Public Document (“P.D.”) 11. From December 2007 through April 2008, Lian Li submitted information in response to these questionnaires. See, e.g., Lined Paper Products from China; Section A Response of Shanghai Lian Li Paper Products Co., Ltd. (December 6, 2007), P.D. 23 (“Section A Response”); Lined Paper Products from China; Fourth Supplemental Response of Shanghai Lian Li Paper Products Co., Ltd. (April 11, 2008), P.D. 69. This information included FOP databases for two of Lian Li's suppliers, Shanghai Sentian Paper Product Co., Ltd. (“Sentian”) and Shanghai Miaopanfang Paper Product Co., Ltd. (“MPF”), and 2006-2007 financial information for Sundaram Multi Pap Ltd. (“Sundaram”), an Indian paper producer. See Lined Paper Products from China; Supplemental Section D Response of Shanghai Lian Li Paper Products Co., Ltd. (January 23, 2008), P.D. 45; Letter from Garvey Schubert Barer to Carlos Gutierrez, Secretary of Commerce, Re: Certain Lined Paper Products from China; Submission of Surrogate Value Information (April 1, 2008), P.D. 63 at 5. As a domestic interested party to the proceeding, see Preliminary Results, 73 Fed.Reg. at 58,540, AASPS submitted 2006-2007 financial information for Navneet Publications (India Limited) (“Navneet”), another Indian paper producer, see Letter from Wiley Rein LLP to Carlos M. Gutierrez, Secretary of Commerce, Re: Certain Lined Paper Products from China, First Antidumping Duty Administrative Review: Comments on the Valuation of Factor Inputs (April 8, 2008), Confidential Document (“C.D.”) 16 at 7.

In October 2008, Commerce issued the Preliminary Results. See Preliminary Results, 73 Fed.Reg. 58,540. Commerce chose to use the Sundaram financial information to calculate surrogate financial values, because it found that information to be “complete, publicly available, and contemporaneous with the [POR].” Id. at 58,547. Commerce chose not to use the Sentian and MPF data, because these data were “arbitrary and inaccurate” and therefore “unreliable.” Id. at 58,543. Commerce also determined that these suppliers had failed to act to the best of their ability and therefore used “adverse facts available” to select a preliminary dumping rate of 217.23 percent for Lian Li. Id. at 58,543, 58,547. ²

In January 2009, Commerce conducted onsite verification of Lian Li's data. See Memo from Cindy Robinson and Victoria Cho, Case Analysts, U.S. Department of Commerce, to The File, Re: Verification of Factors of Production Response of Shanghai MiaoPanFang Paper Products Co., Ltd. (“MPF”) (February 26, 2009), C.D. 32 (“MPF Verification Report”); Memorandum from Cindy Robinson and Victoria Cho, Case Analysts, U.S. Department of Commerce, to The File, Re: Verification of the Sales and Factors of Production Responses of Shanghai Lian Li Paper Products Co. Ltd. (February 26, 2009), C.D. 33; Memorandum from Cindy Robinson and Victoria Cho, Case Analysts, U.S. Department of Commerce, to The File, Re: Verification of the Sales and Factors of Production Responses of Sentian Paper Products Co., Ltd. (February 26, 2009), C.D. 34 (“Sentian Verification Report”).

In April 2009, Commerce issued the Final Results. See Final Results, 74 Fed.Reg. 17,160. In the Final Results, Commerce calculated an antidumping duty rate of 22.35 percent for Lian Li. See id. at 17,161. Commerce continued to use the Sundaram financial information to calculate surrogate financial values. See id. at 17,162; Memorandum from John M. Andersen, Acting Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Ronald K. Lorentzen, Acting Assistant Secretary for Import Administration, Issues and Decisions for the Final Results of the First Administrative Review (April 6, 2009), P.D. 117 (“IDM”) at 39. Commerce used Lian Li's FOP database, see Final Results, 74 Fed.Reg. at 17,164. It also used the FOP databases for MPF and Sentian for the materials input but resorted to “adverse facts available” for the labor and electricity inputs. See id. at 17,163-64.

AASPS initiated this action on April 17, 2009, see Summons; Complaint, and Lian Li subsequently intervened as of right, see May 8, 2009 Order. AASPS moved for summary judgment, arguing that Commerce's “(1), reli[ance] on certain surrogate financial information put forth by Lian Li as the complete, contemporaneous financial statement of an Indian paper producer (2), accept [ance of] certain contradictory documents and statements proffered by Lian Li regarding production of subject merchandise in 2007; and (3), use [of] certain surrogate value information to account for respondent's use of paper” are not supported by substantial evidence or are otherwise not in accordance with law. Brief in Support of Plaintiff AASPS's Rule 56.2 Motion (“AASPS's Brief”) at 2.

IIISTANDARD OF REVIEW

In an antidumping case, the court will hold a determination by Commerce unlawful if that determination is “unsupported by substantial evidence on the record, or otherwise not in accordance with law”. 19 U.S.C. § 1516a(b)(1)(B)(i); see 19 U.S.C. § 1516a(a)(2)(B)(iii).

A determination by Commerce is supported by substantial evidence if the record contains “evidence that a reasonable mind might accept as adequate to support a conclusion.” Cleo Inc. v. United States, 501 F.3d 1291, 1296 (Fed.Cir.2007) (citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951)). While ...