Grobest & I-Mei Indus. (Vietnam) Co. v. United States

• Decision Date: 18 January 2012
• Docket Number: Slip Op. 12–9.Court No. 10–00238.
• Parties: GROBEST & I–MEI INDUSTRIAL (VIETNAM) CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant,Ad Hoc Shrimp Trade Action Committee, et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

34 ITRD 1090

815 F.Supp.2d 1342

GROBEST & I–MEI INDUSTRIAL (VIETNAM) CO., LTD., et al., Plaintiffs,

v.UNITED STATES, Defendant,Ad Hoc Shrimp Trade Action Committee, et al., Defendant–Intervenors.

Slip Op. 12–9.Court No. 10–00238.

United States Court of International Trade.

Jan. 18, 2012.

Recognized as Invalid

19 C.F.R. § 351.408(c)(3)David S. Christy and Matthew R. Nicely, Thompson Hine LLP, of Washington, D.C., for the Plaintiff Grobest & I–Mei Industrial (Vietnam) Co., Ltd.Robert G. Gosselink and Jonathan M. Freed, Trade Pacific, PLLC, of Washington, D.C., for the Consolidated Plaintiffs Cam Ranh Seafoods Processing Enterprise Co.; Contessa Premium Foods Inc.; and H & N Foods International.Adams Chi–Peng Lee, Jay C. Campbell, and Walter J. Spak, White & Case, LLP, Washington, D.C., for the Consolidated Plaintiff Amanda Foods (Vietnam) Ltd.Matthew R. Nicely, Thompson Hine LLP, of Washington, D.C., for the Consolidated Plaintiffs Nha Trang Fisheries Joint Stock Co.; Nha Trang Seaproduct Co.; Minh Phu Seafood Corp.; Minh Qui Seafood Co., Ltd.; Bac Lieu Fisheries Joint Stock Co.; Camau Frozen Seafood Processing Import Export Corp.; Ca Mau Seafood Joint Stock Co.; Cadovimex Seafood Import–Export and Processing Joint–Stock Co.; Cafatex Fishery Joint Stock Corp.; Cantho Import Export Fishery Ltd. Co.; C.P. Vietnam Livestock Corp.; Cuulong Seaproducts Co.; Danang Seaproducts Import Export Corp.; Investment Commerce Fisheries Corp.; Minh Hai Export Frozen Seafood Processing Joint–Stock Co.; Minh Hai Joint–Stock Seafoods Processing Co.; Ngoc Sinh Private Enterprise; Phu Cuong Seafood Processing & Import–Export Co., Ltd.; Phuong Nam Co. Ltd.; Sao Ta Foods Joint Stock Co.; Soc Trang Seafood Joint Stock Co.; Thuan Phuoc Seafoods and Trading Corp.; UTXI Aquatic Products Processing Corp.; Viet Foods Co., Ltd.; and Minh Phat Seafood Co., Ltd.Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director.Nathaniel J. Maandig Rickard, Andrew W. Kentz, Jordan C. Kahn, and Kevin M. O'Connor, Picard, Kentz & Rowe, LLP, of Washington D.C., for Defendant–Intervenor Ad Hoc Shrimp Trade Action Committee.Robert G. Gosselink and Jonathan M. Freed, Trade Pacific, PLLC, of Washington, D.C., for Defendant–Intervenors Cam Ranh Seafoods Processing Enterprise Co.; Contessa Premium Foods Inc.; and H & N Foods International.

Matthew R. Nicely and David S. Christy, Thompson Hine LLP, of Washington, D.C., for Defendant–Intervenors Minh Phu Seafood Corp.; Minh Phat Seafood Co., Ltd.; Minh Qui Seafood Co., Ltd.; and Nha Trang Seaproduct Co.Geert M. De Prest and Elizabeth J. Drake, Stewart and Stewart, of Washington D.C., and Edward T. Hayes, Leake & Anderson, LLP, of New Orleans, LA, for the Defendant–Intervenor American Shrimp Processors Association.

OPINION AND ORDER

POGUE, Chief Judge:

This is a consolidated action seeking review of determinations made by the United States Department of Commerce (“Commerce” or “the Department”) in the fourth administrative review of the antidumping duty order covering certain frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”). ¹ Plaintiffs Grobest & I–Mei Industrial (Vietnam) Co., Ltd. (“Grobest”), Nha Trang Seaproduct Company, et al. (“Nha Trang”), and Cam Ranh Seafoods Processing Enterprise Company, et al. (“Cam Ranh”); Consolidated Plaintiff Amanda Foods (Vietnam) Ltd. (“Amanda Foods”); and Defendant–Intervenor Ad Hoc Shrimp Trade Action Committee (“AHSTAC”) now seek judgment on the agency record, see USCIT R. 56.2, raising for review seven of Commerce's determinations, findings, or conclusions.

Specifically, Plaintiffs Grobest, Nha Trang, and Cam Ranh collectively challenge Commerce's decision to use zeroing in calculating dumping margins during reviews but not during investigations. These Plaintiffs also challenge the exclusion of Bangladesh–to–Bangladesh import data from surrogate value calculations and the use of multi-country averaging in determining surrogate labor wage rates.

Defendant–Intervenor AHSTAC challenges Commerce's exclusion of Fine Foods Ltd.'s 2008–2009 financial statement and Gemini Sea Food Ltd.'s loading and unloading expenses when calculating surrogate financial ratios.

Plaintiff Grobest also challenges Commerce's denial of its request for revocation, and Consolidated Plaintiff Amanda Foods challenges Commerce's rejection of its separate rate certification on the basis of untimely filing.

The court has jurisdiction pursuant to § 516A(a)(2)(b)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006) ² and 28 U.S.C. § 1581(c) (2006).

The court discusses below each of the seven issues raised for review. The court concludes, using the following outline, that: (I) Commerce must provide further explanation for its use of zeroing in antidumping reviews but not investigations, consistent with recent decisions of the Court of Appeals for the Federal Circuit; (II) Commerce's decisions to exclude the Bangladesh–to–Bangladesh data from surrogate value calculations, to employ multi-country averaging to determine surrogate labor wage rates, and to exclude both Fine Foods' 2008–2009 financial statement and Gemini's loading and unloading expenses from surrogate financial ratio calculations are reasonable and will, therefore, be affirmed; (III) Commerce's decision not to review voluntary respondents under 19 U.S.C. § 1677m(a) is based on an impermissible construction of the relevant statutory provisions; and (IV) Commerce's decision to reject Amanda Foods' untimely submitted separate rate certification was an abuse of discretion.

Accordingly, the court will remand the Final Results to Commerce for reconsideration and redetermination consistent with this opinion.

BACKGROUND

The following background information is relevant to the seven issues before the court.³ On March 26, 2009, Commerce, at the request of the domestic producers and certain Vietnamese respondents, initiated the fourth administrative review ⁴ of the 2005 antidumping duty order on certain frozen warmwater shrimp from Vietnam ⁵ (the “Order”). Commerce issued the preliminary results of its review on March 15, 2010, assigning preliminary dumping margins of 3.27% to mandatory respondent Minh Phu; 2.5% to mandatory respondent Nha Trang; 2.89% to the non-selected, separate rate respondents; and as the Vietnam-wide rate, 25.76%.⁶ After taking comments from interested parties, Commerce released the final results of the review on August 9, 2010. Final Results, 75 Fed.Reg. at 47,771. In the Final Results, Commerce assigned Minh Phu a 2.96% rate, Nha Trang a 5.58% rate, the separate rate respondents a 4.27% rate, and a rate of 25.76% as the Vietnam-wide rate. Id. at 47,774–75.⁷

STANDARD OF REVIEW

When reviewing the Department's decisions made in administrative reviews of antidumping duty orders, the Court “shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Commerce's Use of Zeroing in Investigations but Not Reviews

Where, as here, Commerce and the International Trade Commission determine that imported goods are being sold at less than fair value in the United States to the detriment of domestic industry, the statute directs Commerce to impose an antidumping duty on those imported goods “equal to the amount by which the normal value⁸ exceeds the export price (or the constructed export price) for the merchandise.” 19 U.S.C. § 1673.⁹ Commerce calculates dumping duties by first determining a dumping margin, or “the amount by which the normal value exceeds the export price or constructed export price,” 19 U.S.C. § 1677(35)(A), and then establishing a weighted average dumping margin, which is “the percentage determined by dividing the aggregate dumping margins determined for a specific exporter or producer by the aggregate export prices and constructed export prices of such exporter or producer,” § 1677(35)(B).

When calculating weighted average dumping margins, Commerce may, under the statute, employ either of two methodologies: zeroing or offsetting. Timken Co. v. United States, 354 F.3d 1334, 1341–45 (Fed.Cir.2004) (holding that 19 U.S.C. § 1677(35) is ambiguous and that zeroing is a reasonable interpretation); U.S. Steel Corp. v. United States, 621 F.3d 1351, 1360–63 (Fed.Cir.2010) (holding that 19 U.S.C. § 1677(35) is ambiguous and that offsetting is also a reasonable interpretation). Zeroing is the practice of “treat[ing] transactions [or sales] that generate ‘negative’ dumping margins (i.e., a dumping margin with a value less than zero) as if they were zero.” Timken, 354 F.3d at 1338. Under this approach, only sales at less than normal value contribute to the calculation of the dumping margin. In contrast, when using offsetting, “sales made at less than fair value are offset by those made above fair value. This means that some of the dumping margins used to calculate a weighted-average dumping margin will be negative.” U.S. Steel, 621 F.3d at 1355.

Historically, Commerce has employed zeroing methodology in both antidumping duty investigations and reviews. See Timken, 354 F.3d at 1338 (reviewing use of zeroing in an antidumping duty administrative review); Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343 (Fed.Cir.2005) (reviewing use of zeroing in an antidumping duty investigation). However, in 2005, the European Community successfully challenged Commerce's use of zeroing, in investigations, before the World Trade Organization (“WTO”), a decision upheld by the WTO's Appellate Body in 2006. U.S. Steel, 621 F.3d at 1354 (citations omitted). In response to the adverse ruling before the WTO,...