Tianjin Machinery Import & Export Corp. v. US
| Decision Date | 23 October 1992 |
| Docket Number | Court No. 91-03-00223. |
| Citation | 16 CIT 931,806 F. Supp. 1008 |
| Parties | TIANJIN MACHINERY IMPORT & EXPORT CORP. and Shandong Machinery Import & Export Corp., Plaintiffs, v. UNITED STATES of America and United States Department of Commerce, Defendants, and Woodings-Verona Tool Works, Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
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Skadden, Arps, Slate, Meagher & Flom, Rodney O. Thorson, John J. Burke, Washington, D.C., for plaintiffs.
Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, Marc E. Montalbine, Joan L. Mackenzie, of counsel, Atty. Advisor, Office of Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., for defendants.
Wiley, Rein & Fielding, Charles Owen Verrill, Jr., Alan H. Price, Willis S. Martyn III, Washington, D.C., for defendant-intervenor.
This action comes before the court on plaintiffs' motion for judgment upon the agency record and request for remand. Plaintiffs challenge the Department of Commerce, International Trade Administration's ("Commerce's") determination in Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China. 56 Fed.Reg. 241 (1991) (final determination). The court sustains Commerce's determination in part. The court also finds that Commerce's determination, in part, was not based upon substantial evidence or in accordance with law, and grants plaintiffs' request for a remand as to that part.
Defendant-Intervenor Woodings-Verona Tool Works ("Woodings-Verona"), a United States importer of heavy forged hand tools, filed an antidumping duty petition on behalf of the United States industry on April 4, 1990 ("Petition"). The Petition alleged that imports of hammers/sledges, bars/wedges, picks/mattocks, and axes/ adzes from the People's Republic of China ("PRC") were being sold in the United States at less than fair value. It noted that the PRC had a nonmarket economy, and so calculated dumping margins using the factors of production analysis specified in 19 U.S.C. § 1677b(c)(1) (1988).1
Plaintiffs, Tianjin Machinery Import and Export Corporation ("Tianjin") and Shandong Machinery Import and Export Corporation ("Shandong"), along with Henan Machinery Import & Export Corporation ("Henan"), are the only three PRC companies that export the subject merchandise.
On April 27, 1990, counsel for China National Machinery Import and Export Corporation ("China National") filed a notice of appearance in connection with the Petition.
Commerce issued its questionnaire to China National in June, 1990. The questionnaire requested a consolidated response from China National, with information included from Tianjin, Shandong, and Henan. By statute, China National was also required to provide its responses on computer diskette.
China National informed Commerce that pursuant to a confidential PRC 1988 State Council Directive ("Directive"), plaintiffs and Henan were independent legal entities, and no longer affiliated branches of China National. Although Commerce subsequently requested a copy of the Directive along with official supporting documentation, China National only provided a certified statement by the China Council for the Promotion of International Trade which affirmed that the division had previously occurred.
Tianjin and Shandong submitted separate replies to section A of Commerce's questionnaire in mid-July, 1990. In July, 1990, China National requested several extensions of time in which to respond to the remainder of the questionnaire. Commerce granted the extensions and advised China National, both in writing and orally, to file a consolidated response since China National had not yet sufficiently shown that plaintiffs' were independent corporations.
In August, 1990, individual responses were submitted by Tianjin and Shandong to sections C and D of the questionnaire. No information whatsoever was submitted on behalf of Henan.
In September, 1990, Commerce issued two deficiency letters to China National. The first highlighted China National's failure to file a consolidated response and sufficiently support its claim of plaintiffs' independence. In addition to reiterating the points already made, the second notice also discussed missing or unclear information in China National's responses to sections A, C, and D of the questionnaire.
During this period, Commerce also agreed that China National's submissions could be in Lotus 1-2-3 personal computer software. Accordingly, on September 19, 1990 Shandong and Tianjin submitted separate responses on diskette. Without obtaining an extension of time, China National resubmitted a second diskette after the deadline for submissions passed, claiming that the first disk contained technical errors.
On October 19, 1990, Commerce issued its preliminary determination. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China, 55 Fed. Reg. 42420 (Dep't Comm.1990) (prelim. determination). In it, Commerce stated that China National failed to provide diskettes formatted to allowed manipulation of information. It determined that the improperly formatted diskettes and the lack of accurate and complete technical data regarding Shandong and Tianjin, in conjunction with the total disregard of sales information concerning Henan constituted fatal deficiencies. Consequently, Commerce used best information available ("BIA") to calculate China National's dumping margins. As BIA, Commerce used an average of the dumping margins for each class or kind of merchandise contained in the Petition. Because Commerce utilized BIA, it indicated it would not verify China National's responses.
On October 25, 1990, China National provided Commerce with an unusable "macro" computer formula designed to correct the computer formatting flaw. On November 9, 1990, China National submitted re-formatted diskettes. Commerce rejected the diskettes as untimely. China National also requested a postponement of Commerce's final determination to permit Commerce time to verify China National's recent submissions and to consider its other legal arguments. China National's request was denied.
On December 14, 1990, Mann Edge Tool Company ("Mann Edge"), a domestic producer of heavy striking tools, forwarded a letter to Commerce opposing the Petition. Mann Edge stated that it represented 27 percent of the United States market.
Commerce subsequently issued its final determination on January 3, 1991. See Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China, 56 Fed.Reg. 241 (Dep't Comm.1991) (final determination). It again noted that because China National's incomplete and unconsolidated responses were unusable, it utilized an adjusted average of dumping margins listed in the Petition as BIA.
Plaintiffs now challenge several aspects of Commerce's final determination. First, they assert Commerce improperly used BIA, and that sufficient data supported a finding that Tianjin and Shandong were separate legal entities. Secondly, the Petition contained several technical errors in its calculation of dumping margins. Next, Commerce improperly denied China National's request for a postponement of the final determination. Finally, they contend that Woodings-Verona did not have standing to initiate the Petition.
An antidumping determination will be overturned only if it is not supported by substantial evidence on the record or otherwise not in accordance with law. 19 U.S.C. 1516a(b)(1)(B) (1988). N.A.R. v. United States, 14 C.I.T. ___, 741 F.Supp. 936, 939 (1990) (quoting Gold Star Co. v. United States, 12 C.I.T. 707, 708-709, 692 F.Supp. 1382 (1988) aff'd, 8 Fed.Cir. (T) ___, 873 F.2d 1427 (1989)).
Commerce is given "considerable deference in its interpretation of its statutory authority and the methodology employed in the administration of the antidumping law." Tehnoimportexport v. United States, 15 C.I.T. ___, 766 F.Supp. 1169, 1173 (1991) (citations omitted). Commerce's determination will not be overturned merely because the plaintiff can produce evidence in support of its own contentions and in opposition to the evidence supporting the agency's determination. Tehnoimportexport, 766 F.Supp. at 1173.
Plaintiffs first challenge Commerce's reliance upon BIA. Plaintiffs initially argue that the "pretexts" upon which Commerce justified its use of BIA were "illusory" and unsupported by substantial evidence. Plaintiffs also contend that the information chosen by Commerce as BIA was improper.
Title 19 United States Code, Section 1677e(c) (1988) provides that Commerce shall:
whenever a party or any other person refuses or is unable to produce information requested in a timely manner and in the form required, or otherwise significantly impedes an investigation, use the best information otherwise available.
In this case, Commerce based its decision to use an average of the dumping margins contained in the Petition as BIA upon China National's failure to submit a consolidated response with information concerning Henan, its lack of accurate and complete technical data regarding Shandong and Tianjin, and its submission of defective computer diskettes.
Plaintiffs assert that China National was excused from submitting a consolidated response including Henan sales data because Tianjin, Shandong, and Henan were separate legal entities, and data related to Henan was unavailable to plaintiffs. Consequently, Commerce should not have resorted to BIA when...
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