755 F.Supp.2d 1330 (CIT 2011), 09-00349, PSC VSMPO-AVISMA Corp. v. United States
| Citation | 755 F.Supp.2d 1330 |
| Opinion Judge | RESTANI, Judge. |
| Party Name | PSC VSMPO-AVISMA CORPORATION and VSMPO-Tirus, U.S., Inc., Plaintiffs, v. UNITED STATES, Defendant and US Magnesium LLC, Intervenor Defendant. Slip Op. 11-25. |
| Attorney | Arent Fox LLP, Washington, DC (John M. Gurley, Mark P. Lunn, and Diana Dimitriuc-Quaia) for the plaintiffs. Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Davi... |
| Case Date | March 07, 2011 |
| Court | Court of International Trade |
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OPINION AND ORDER
This court action challenges the Department of Commerce's (" Commerce" ) final results rendered in an antidumping duty review of magnesium metal from Russian Federation (" Russia" ). See Magnesium Metal From the Russian Federation: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 Fed.Reg. 39,919 (Dep't Commerce Aug. 10, 2000). The plaintiffs, PSC VSMPO-AVISMA Corporation and VSMPO-Tirus, U.S., Inc. (collectively " AVISMA" ), submitted a motion for judgment on the agency record pursuant to USCIT Rule 56. For the reasons stated below, the court denies the plaintiffs' motion in part and remands to Commerce so that it may reconsider the AFA rate.
BACKGROUND
In February 2004, multiple U.S. companies, representing the domestic producers of magnesium metal (" the domestic industry" ),1 filed a petition with Commerce concerning
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magnesium metal from Russia and the People's Republic of China. Initiation, 69 Fed.Reg. at 15,293. In March 2004, Commerce initiated an antidumping investigation of magnesium metal from Russia for the period of January 1, 2003 through December 31, 2003, id. at 15,295, and selected AVISMA and Solikamsk Magnesium Works (" SMW" ) as the mandatory respondents, Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Magnesium Metal From the Russian Federation, 69 Fed.Reg. 59,197, 59,198 (Dep't Commerce Oct. 4, 2004). In March 2005, Commerce determined that AVISMA and SMW, during the period of investigation, sold the subject merchandise in the United States with antidumping duty (AD) margins of 21.71% and 18.65% respectively.2 Magnesium Metal From the Russian Federation: Notice of Amended Final Determination of Sales at Less Than Fair Value, 70 Fed.Reg. 15,837, 15,837 (Dep't Commerce Mar. 29, 2005).
In September 2007, Commerce completed an administrative review of this order for the period of October 4, 2004, through March 31, 2006, and calculated A.D. margins of .41% (de minimis) for AVISMA and 3.77% for SMW. Magnesium Metal from the Russian Federal: Final Results of Antidumping Duty Administrative Review, 72 Fed.Reg. 51,791, 51,792 (Dep't Commerce Sept. 11, 2007). In September 2008, Commerce published the results of the administrative review (" 2006/07 review" ) for the period of April 1, 2006, through March 31, 2007, and calculated an A.D. margin of 15.77% for AVISMA. Magnesium Metal from the Russian Federation: Final Results of Antidumping Duty Administrative Review, 73 Fed.Reg. 52,642, 52,643 (Dep't Commerce Sept. 10, 2008) (" Final Results 2008 " ). Commerce, however, selected an adverse facts available (" AFA" ) rate of 21.71% for SMW.3 Id.
In June 2008, Commerce initiated the administrative review (" 2007/08 review" ) of the A.D. duty order regarding magnesium metal from Russia for the period of April 1, 2007, through March 31, 2008. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 73 Fed.Reg. 31,813, 31,813 (Dep't Commerce June 4, 2008). In January 2009, however, AVISMA informed Commerce that it would no longer participate in the administrative review because of " the administrative burdens required to pursue this review further, including multiple verifications of AVISMA and VSMPO-Tirus, a change in AVISMA's product focus, as well as other matters affecting the respondents' business." Pls.' Confidential App. Tab 2, 1. In April 2009, Commerce published the preliminary
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results of its review and assigned AVISMA an AFA rate of 43.58%, " the highest transaction-specific rate [it] calculated in the 2006/07 administrative review of the order with respect to AVISMA." Magnesium Metal From the Russian Federation: Preliminary Results of Antidumping Duty Administrative Review and Intent To Rescind in Part, 74 Fed.Reg. 15,435, 15,437 (Dep't Commerce Apr. 6, 2009). In response to this AFA rate, AVISMA submitted a case brief urging Commerce to select the lower rate of 21.71%, the highest weighted-average margin from the original A.D. investigation. Pls.' Confidential App. Tab 11, 29-34. Nevertheless, Commerce published its final results in August 2009, and selected an AFA rate of 43.58% for AVISMA. Magnesium Metal From the Russian Federation: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 Fed.Reg. 39,919, 39,920 (Dep't Commerce Aug. 10, 2009) (" Final Results " ).
In August 2009, the plaintiffs commenced this action contesting the AFA rate of 43.58%. In March 2010, the plaintiffs filed a motion for judgment on the agency record pursuant to USCIT Rule 56.2.
STANDARD OF REVIEW
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will uphold Commerce's final results in A.D. reviews unless they are " unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
During an A.D. review, when " an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority ... the administering authority ... may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available." 19 U.S.C. § 1677e(b). The A.D. duty rate under such circumstances is known as an AFA rate and may be based on information obtained from: " (1) the petition, (2) a final determination in the investigation under this title, (3) any previous review under ... [19 U.S.C. § 1675] or determination under ... [19 U.S.C. § 1675b], or (4) any other information placed on the record." Id. For this reason, the United States Court of Appeals for the Federal Circuit has repeatedly acknowledged that " Commerce's discretion in applying an AFA margin is particularly great." PAM S.p.A. v. United States, 582 F.3d 1336, 1340 (Fed.Cir.2009).
A. AVISMA's AFA Rate is Uncorroborated
AVISMA challenges the Final Results on the grounds that the selected AFA rate of 43.58% violates 19 U.S.C. § 1677e(c) because it is not corroborated. Pls. PSC VSMPO-AVISMA Corporation and VSMPO-TIRUS, U.S. Inc.'s Mem. Law Supp. Mot. J. on the Agency R. Pursuant to Rule 56.2 (" Pls.' Br." ) 8, 17. This claim has merit.
Although " the possibility of a high AFA margin creates a powerful incentive to avoid dumping and to cooperate in investigations, there is a limit to Commerce's discretion." PAM S.p.A., 582 F.3d at 1340. Pursuant to 19 U.S.C. § 1677e(c), " [w]hen the administering authority ... relies on secondary information rather than on information obtained in the course of an investigation or review, the administering authority ... shall, to the extent practicable, corroborate that information
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from independent sources that are reasonably at their disposal." 19 U.S.C. § 1677e(c). " Secondary information includes [i]nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under [19 U.S.C. § 1675] concerning the subject merchandise." KYD, Inc. v. United States, 607 F.3d 760, 765 (Fed.Cir.2010) (internal quotation marks and citation omitted). Here, the AFA rate of 43.58% was based on the highest transaction-specific margin calculated for AVISMA during the previous administrative review, and thus, is secondary information. Commerce must, therefore, corroborate this information " to the extent practicable." 19 U.S.C. § 1677e(c); see also Gallant Ocean (Thai.) Co., Ltd. v. United States, 602 F.3d 1319, 1324 (Fed.Cir.2010).
In order to corroborate an AFA rate, Commerce must show that it used " reliable facts" that had " some grounding in commercial reality." Gallant, 602 F.3d a 1324. Here, Commerce reasoned that the AFA rate of 43.58% was relevant and reliable and therefore, " corroborated to the extent practicable," as a result of it being " based on AVISMA's questionnaire responses and accompanying data from the immediately preceding administrative review that are uncontradicted by any record evidence." Issues and Decision Memorandum for the Antidumping Duty Administrative Review of Magnesium Metal from the Russian Federation for the Period of Review April 1, 2007, through March 31, 2008, A-821-819, at 14 (Aug. 10, 2009) (" Issues and Decision Memorandum " ), available at Pls.' Confidential App. Tab 8. Commerce's apparent understanding of reliability, however, is misplaced. The mere fact that specific-transaction data is accurate and verified does not ipso facto render it reliable for these purposes.4 See PAM, S.p.A., 582 F.3d at 1340 (providing that " one sale by itself" will not " always rise to the level of substantial evidence" ); JTEKT Corp. v. United States, 675 F.Supp.2d 1206, 1256 (CIT 2009); Ferro Union, Inc. v. United States, 44 F.Supp.2d 1310, 1334 (CIT...
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