Changzhou Hawd Flooring Co. v. United States

• Decision Date: 06 July 2015
• Docket Number: Court No. 12–00020.,Slip Op. 15–71.
• Citation: 77 F.Supp.3d 1351
• Parties: CHANGZHOU HAWD FLOORING CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

77 F.Supp.3d 1351

CHANGZHOU HAWD FLOORING CO., LTD., et al., Plaintiffs

v.UNITED STATES, Defendant.

Slip Op. 15–71.

Court No. 12–00020.

United States Court of International Trade.

July 6, 2015.

Gregory S. Menegaz and J. Kevin Horgan, deKieffer & Horgan, PLLC, of Washington, DC, for the Plaintiff, Changzhou Hawd Flooring Co., Ltd.

Alexander V. Sverdlov, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of counsel was Shana Hofstetter, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION

POGUE, Senior Judge:

This action is again before the court following a fourth remand and redetermination.¹ The only issue remaining for review is the antidumping (“AD”) duty rate assigned to one separate rate respondent—Changzhou Hawd Flooring Co., Ltd., (“Changzhou Hawd” or “Plaintiff”).²

Previously, in the second and partial third redeterminations, the Department of Commerce (“Commerce”) had, belatedly, sought to individually investigate Changzhou Hawd.³ However, this decision was challenged as⁴ and found to be arbitrary and capricious. Changzhou Hawd Flooring Co. v. United States, ––– CIT ––––, 44 F.Supp.3d 1376, 1388–90 (2015). On remand, Commerce determined that the separate rate, and therefore Changzhou Hawd's rate, was more than de minimis. Rather than then calculate a rate for Changzhou Hawd, however, Commerce decided to continue applying the company's current cash deposit rate, as established in the original final determination,⁵ pending the final results of the Second Administrative Review, where Changzhou Hawd is again a separate rate respondent.⁶ Final Results of Redetermination Pursuant to Ct. Order, ECF No. 130 (“Fourth Redetermination ”). Plaintiff challenges this determination as not in accordance with law, not supported by substantial evidence, and not compliant with the court's previous remand order.⁷

Because Commerce's decision is based on a reasonable reading of the law and of the evidentiary record, satisfying the court's previous remand instructions, the determination is affirmed.

BACKGROUND

Previous litigation of the separate rate in this investigation has produced two court opinions⁸ and two corresponding redeterminations by Commerce,⁹ a voluntary remand and redetermination,¹⁰ a third court opinion,¹¹ and now a fourth redetermination by Commerce.¹² While the court presumes familiarity with the progression of this case, the immediately pertinent facts are summarized below.

In the second and supplementing partial third redeterminations, Commerce inferred that, because there were 110 non-cooperative respondents in the investigation, the separate rate was more than de minimis. Second Redetermination, ECF No. 52, at 3–7. Commerce, however, declined to calculate a specific separate rate. Id. at 7–8. Instead, the agency assigned seven of the Plaintiffs¹³ the rate calculated for them in the First Administrative Review (which had already, by that time, been completed),¹⁴ as limited by the provisional measures deposit cap.¹⁵ Id. Changzhou Hawd, however, did not have a rate from the First Administrative Review.¹⁶ Commerce, concluding that it did not have enough data on the record to calculate a rate reflective of Changzhou Hawd's economic reality, belatedly initiated an individual investigation of the company. Id. at 8–9; Third Redetermination, ECF No. 107.¹⁷ While the court affirmed as reasonable Commerce's inference of a more than de minimis separate rate and use of rates from the First Administrative Review, Changzhou Hawd, ––– CIT at ––––, 44 F.Supp.3d at 1385–88, it found Commerce's decision to individually investigate Changzhou Hawd at such a late date in the proceeding—and after repeatedly refusing to investigate a would-be voluntary respondent, claiming lack of administrative resources—to be arbitrary and capricious, and remanded accordingly. Id. at 1388–91.

On remand, Commerce again inferred that the separate rate was more than de minimis, but declined, as it did previously, to calculate a separate rate. Fourth Redetermination, ECF No. 130, at 4–5. Instead, because of “the limited time for which Changzhou Hawd's specific margin will be effective, and in the continued interest of conserving administrative resources,”¹⁸ Commerce has proposed to continue applying the 3.30 percent cash deposit rate as calculated in the Inv. Amended Final Determination, 76 Fed.Reg. at 76,691 –92,¹⁹ until the Second Administrative Review, where Changzhou Hawd is again a separate rate respondent, sets Changzhou Hawd's assessed rate.²⁰

Fourth Redetermination, ECF No. 130, at 5–6. Commerce's deadline for the completion of the Second Administrative Review is July 8, 2015. Id. at 5.

STANDARD OF REVIEW

The court will sustain Commerce's determination on remand if it is accordance with law, supported by substantial evidence on the record, and complies with the court's remand order. 19 U.S.C. § 1516a(b)(1)(B)(i) ; Jinan Yipin Corp., Ltd. v. United States, 33 CIT 934, 936, 637 F.Supp.2d 1183, 1185 (2009).

DISCUSSION

I. Commerce's Methodology

Lacking more specific statutory guidance, Commerce follows 19 U.S.C. § 1673d(c)(5) (the “[m]ethod for determining [the] estimated all-others rate”) to establish the separate rate. See Fourth Redetermination, ECF No. 130, at 4. Generally, the separate rate is equal to the weighted average of the rates calculated for individually investigated respondents, “excluding any zero and de minimis margins, and any margins [based entirely on facts otherwise available].” 19 U.S.C. § 1673d(c)(5)(A). However, where, as here, all individually investigated rates are zero, de minimis, or based entirely on facts otherwise available, the statute allows Commerce to use “any reasonable method to establish the estimated [separate rate].” 19 U.S.C. § 1673d(c)(5)(B).

“[A]ny reasonable method” is a “lenient standard” that leaves much to Commerce's discretion. Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370, 1378 (Fed.Cir.2013).²¹ It is expected to mean a weighted average of the rates calculated for individually investigated respondents. 19 U.S.C. § 1673d(c)(5)(B) ; Uruguay Round Agreements Act, Statement of Administrative Action (“SAA”), H.R. Doc. No. 103–316 (1994) at 873, reprinted in 1994 U.S.C.C.A.N. 4040, 4201.²² 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 exporters or producers,” i.e., is not reasonable in context, then “Commerce may use other reasonable methods.” SAA at 873, reprinted in 1994 U.S.C.C.A.N. at 4201.

Here, Commerce has determined that the expected method results in a separate rate that is not reasonably reflective of respondents' potential dumping margins. Fourth Redetermination, ECF No. 130, at 4–5; Second Redetermination, ECF No. 52, at 4–5.²³ Instead, citing to the Second Redetermination (and the court's affirmance thereof), Commerce has inferred that the separate rate (and therefore Changzhou Hawd's rate) is more than de minimis. Fourth Redetermination, ECF No. 130, at 4–5; see Second Redetermination, ECF No. 52, at 3–6. Rather than calculate a specific separate rate, however, Commerce decided to continue applying Changzhou Hawd's current 3.30 percent cash deposit rate, as calculated in the Inv. Amended Final Determination, 76 Fed.Reg. at 76,691 –92, in the brief interim until the Second Administrative Review sets the assessed rate for Changzhou Hawd's entries (i.e., until July 8, 2015). Fourth Redetermination, ECF No. 130, at 5–6. Accordingly, having inferred from the record that the separate rate is more than de minimis and applied a (more than de minimis ) rate calculated for Changzhou Hawd, Commerce may be said to have established a rate “reasonably reflective” of Changzhou Hawd's “potential dumping margin[ ].” See SAA at 873, reprinted in 1994 U.S.C.C.A.N. at 4201. Accordingly, Commerce's methodology is within a reasonable construction of the statute. Cf. Changzhou Hawd, –––CIT at ––––, 44 F.Supp.3d at 1383–85 (holding the same for the other separate rate plaintiffs in this action).²⁴

II. Commerce's Methodology in the Context of the Record

A. Commerce's Inference that the Separate Rate is More Than De Minimis

As in the Second Redetermination, Commerce has inferred that the separate rate is more than de minimis because 110 companies did not respond to Commerce's quantity and value questionnaire. Fourth Redetermination, ECF No. 130, at 4; see Second Redetermination, ECF No. 52, at 4. Commerce again corroborates its inference with the non-de minimis rates calculated for separate rate respondents in subsequent administrative reviews. Fourth Redetermination, ECF No. 130, at 6–7; Second Redetermination, ECF No. 52, at 7, 30.²⁵

Commerce's inference of a more than de minimis separate rate was reasonable in the Second Redetermination, and remains reasonable here.²⁶ Commerce has made the same rational connection between the facts found (110 non-cooperating respondents) and the choices made (the inference of a more than de minimis separate rate for the investigation).²⁷ See Changzhou Hawd, ––– CIT at ––––, 44 F.Supp.3d at 1385–87 (holding that the same inference on the same record as that here was supported by substantial evidence).²⁸ This redetermination is only distinct in that now Commerce also has the preliminary results from the Second Administrative Review to corroborate its conclusion that “the separate rate respondents' economic reality is more varied and complicated than the mandatory respondent de minimis rates [in the investigation] suggest” and to “confirm [ ] that the separate rate respondents merit the closer consideration that keeping them subject to the order...