Albemarle Corp. & Subsidiaries v. United States

• Decision Date: 02 May 2016
• Docket Number: Nos. 2015–1288,2015–1290.,2015–1289,s. 2015–1288
• Parties: ALBEMARLE CORPORATION & SUBSIDIARIES, Ningxia Huahui Activated Carbon Company Limited, Plaintiffs–Appellants Shanxi DMD Corporation, Beijing Pacific Activated Carbon Products Co., Ltd., Cherishmet Inc., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd., Plaintiffs–Appellees v. UNITED STATES, Calgon Carbon Corporation, Norit Americas, Inc., Defendants–Cross–Appellants Calgon Carbon (Tianjin) Corporation Limited, Defendant.
• Court: U.S. Court of Appeals — Federal Circuit

821 F.3d 1345

ALBEMARLE CORPORATION & SUBSIDIARIES, Ningxia Huahui Activated Carbon Company Limited, Plaintiffs–Appellants

Shanxi DMD Corporation, Beijing Pacific Activated Carbon Products Co., Ltd., Cherishmet Inc., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd., Plaintiffs–Appellees
v.
UNITED STATES, Calgon Carbon Corporation, Norit Americas, Inc., Defendants–Cross–Appellants

Calgon Carbon (Tianjin) Corporation Limited, Defendant.

Nos. 2015–1288
2015–1289
2015–1290.

United States Court of Appeals, Federal Circuit.

May 2, 2016.

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Jill A. Cramer, Mowry & Grimson, PLLC, Washington, DC, argued for plaintiffs-appellants. Also represented by Jeffrey S. Grimson, Kristin Heim Mowry, Sarah M. Wyss.

Gregory S. Menegaz, DeKieffer & Horgan, PLLC, Washington, DC, representing plaintiff-appellee Shanxi DMD Corporation, argued for all plaintiffs-appellees.

Francis J. Sailer, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, Washington, DC, for plaintiffs-appellees Beijing Pacific Activated Carbon Products Co., Ltd., Cherishmet Inc., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd. Also represented by Kavita Mohan, Mark Pardo, Andrew Thomas Schutz.

Claudia Burke, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-cross-appellant United States. Also represented by Antonia Ramos Soares, Benjamin C. Mizer, Jeanne E. Davidson, Patricia M. McCarthy ; Shelby Anderson, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

Robert Alan Luberda, Kelley Drye & Warren, LLP, Washington, DC, argued for defendants-cross-appellants Calgon Carbon Corporation, Norit Americas, Inc. Also represented by John M. Herrmann, David A. Hartquist.

Before LOURIE, BRYSON, and DYK, Circuit Judges.

DYK, Circuit Judge.

The Department of Commerce (“Commerce”) selected two exporters, Jacobi Carbons AB (“Jacobi”) and Calgon Carbon (Tianjin) Co., Ltd. (“CCT”), to individually examine in the third administrative review of an antidumping order. Commerce assigned both exporters de minimis dumping margins. Rather than using the “expected method” of averaging those de minimis margins to calculate a separate rate for non-examined exporters Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd. (“Cherishmet”),¹ Shanxi DMD Corp. (“Shanxi”), and Ningxia Huahui Activated Carbon Company Ltd. (“Huahui”),² Commerce continued to apply the rates it had assigned those exporters in the second, immediately preceding administrative review. The Court of International Trade (“CIT”) held that Commerce's use of prior dumping margins was impermissible with respect to Cherishmet and Shanxi but permissible with respect to Huahui. We affirm with respect to Cherishmet and Shanxi and reverse and remand with respect to Huahui. In each case, Commerce has failed to justify using the rate from the prior administrative review.

Background

I

When merchandise is sold in the United States at less than fair value, Commerce is authorized by statute to impose antidumping duties. See 19 U.S.C. § 1673. These duties are equal to the dumping margin, the amount by which the price of the merchandise in the exporting country (“normal

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value”) exceeds the price of the merchandise in the United States (“export price” or “U.S. price”). See id. §§ 1673e(a)(1), 1677b(a)(1), 1677a(a);³ Changzhou Wujin Fine Chem. Factory Co., v. United States, 701 F.3d 1367, 1370 (Fed.Cir.2012). Under the statute, Commerce is generally charged with determining individual dumping margins for each known exporter. 19 U.S.C. § 1677f–1(c)(1). When it is “not practicable” to determine individual margins for each exporter, the statute provides that Commerce may limit its examination to a “reasonable number of exporters” that either constitute a statistically representative sample of all known exporters or account for the largest volume of the subject merchandise from the exporting country. Id. § 1677f–1(c)(2).

In proceedings involving non-market economy countries, including China, Commerce presumes that exporters are state-controlled, and assigns them a single statewide dumping rate. Changzhou, 701 F.3d at 1370 ; 19 C.F.R. § 351.107(d). This presumption is rebuttable; an exporter that demonstrates sufficient independence from state control may apply to Commerce for a different rate. Changzhou, 701 F.3d at 1370. A separate rate, sometimes referred to as the “all-others” rate, is assigned to all non-individually examined exporters (“separate respondents”) when Commerce limits its examination to fewer than all known exporters. 19 U.S.C. § 1673d(c)(1)(B)(i)(II) ; Changzhou, 701 F.3d at 1370.

Typically, as discussed below, this separate or all-others rate is calculated by averaging the rates of the individually examined exporters. Non-selected parties can request individual examination pursuant to 19 U.S.C. § 1677m(a), but Commerce is not obligated to grant such requests. Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103–316 (1994) [“SAA”], reprinted in 1994 U.S.C.C.A.N. 4040, 4201 (“Commerce may decline to analyze voluntary responses because it would be unduly burdensome.”); Yangzhou Bestpak Gifts & Crafts Co. v. United States (“Bestpak ”), 716 F.3d 1370, 1373 (Fed.Cir.2013). Here, Commerce determined that all of the parties to this appeal were entitled to separate rates. The central issue concerns the calculation of those separate rates for Cherishmet, Shanxi, and Huahui. As noted earlier, rather than using the average of the rates calculated for the individually examined exporters during the third administrative review, Commerce used the rates applied to Cherishmet, Shanxi, and Huahui in the previous administrative review.

II

The underlying proceedings involve an initial investigation followed by three administrative reviews of imports of “certain activated carbon” from the People's Republic of China, which encompasses “powdered, granular, or pelletized carbon product[s] obtained by ‘activating’ with heat and steam various materials containing carbon.” Notice of Antidumping Order: Certain Activated Carbon from the People's Republic of China, 72 Fed.Reg. 20,988, 20,988 (Apr. 27, 2007). In the initial investigation in 2007, Commerce individually investigated only the two largest volume exporters, Jacobi and CCT. Commerce determined that appellant Huahui and appellees Cherishmet and Shanxi were entitled to separate rates.

After receiving several requests for review of the initial antidumping order, Commerce

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conducted a series of three administrative reviews. In the first review in 2009, Jacobi and CCT were selected as individual respondents, and Commerce granted Cherishmet's request to be individually examined as a voluntary respondent. Certain Activated Carbon from the People's Republic of China: Notice of Preliminary Results of the Antidumping Duty Administrative Review and Extension of Time Limits for the Final Results, 74 Fed.Reg. 21,317, 21,318 (May 7, 2009). In the second review in 2010, Jacobi and Huahui were individually examined, while CCT, Cherishmet, and Shanxi were given separate rates. Certain Activated Carbon from the People's Republic of China: Final Results and Partial Rescission of Second Antidumping Duty Administrative Review, 75 Fed.Reg. 70,208, 70,208, 70,209 –10 (Nov. 17, 2010). Commerce assigned Jacobi a rate of $0.11/kg and Huahui a rate of $0.44/kg. It calculated the separate rate by averaging those individual margins, resulting in a separate rate of $0.28/kg, which was applied to Cherishmet and Shanxi.

In the third and final review in 2011, which is the subject of this appeal, Commerce individually examined Jacobi and CCT. Certain Activated Carbon from the People's Republic of China: Final Results and Partial Rescission of the Third Administrative Antidumping Duty Administrative Review [“Final Results ”], 76 Fed.Reg. 67,142, 67,142 (Oct. 31, 2011). Cherishmet, Shanxi, and Huahui were held entitled to a separate rate. Huahui submitted a request to be individually examined as a voluntary respondent, but Commerce denied its request. In the Final Results, Commerce determined that Jacobi and CCT, the individually examined respondents, were not dumping, and assigned them de minimis margins.⁴ The question was whether these de minimis rates should be averaged and applied to the separate respondents.

As discussed in detail below, 19 U.S.C. § 1673d(c)(5) governs Commerce's calculation of separate rates. Under the statute, when all individually examined exporters are assigned de minimis margins, the “expected method” is for Commerce to calculate the separate rate by taking the average of the de minimis margins assigned to the individually examined respondents. See SAA, at 4201. If Commerce determines that following the expected method would not be feasible or would result in margins that would “not be reasonably reflective of potential dumping margins” for the separate respondents, Commerce may use “other reasonable methods.” Id.

Rather than following the “expected method” of averaging the de minimis margins calculated for the individually examined respondents here, Commerce calculated separate...