Fresh Garlic Producers Ass'n v. United States

• Decision Date: 16 July 2015
• Docket Number: Slip Op. 15–77.,Court No. 13–00236.
• Citation: 83 F.Supp.3d 1330
• Parties: FRESH GARLIC PRODUCERS ASSOCIATION, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Shenzhen Xinboda Industrial Co., Ltd. and Hebei Golden Bird Trading Co., Ltd., Defendant–Intervenors.
• Court: U.S. Court of International Trade

83 F.Supp.3d 1330

FRESH GARLIC PRODUCERS ASSOCIATION, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Plaintiffs

v.UNITED STATES, DefendantandShenzhen Xinboda Industrial Co., Ltd. and Hebei Golden Bird Trading Co., Ltd., Defendant–Intervenors.

Slip Op. 15–77.

Court No. 13–00236.

United States Court of International Trade.

July 16, 2015.

John M. Herrmann, Kelley Drye & Warren LLP, of Washington, DC, argued for plaintiffs. With him on the brief was Michael J. Coursey.

Richard P. Schroeder, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Justin Ross Becker, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, United States Department of Commerce, of Washington, DC.

Gregory S. Menegaz, deKieffer & Horgan, PLLC, of Washington, DC, argued for defendant-intervenor Shenzhen Xinboda Industrial Co., Ltd. With him on the brief was J. Kevin Horgan.

Robert T. Hume, Hume & Associates LLC, of Ojai, CA, argued for defendant-intervenor Hebei Golden Bird Trading Co., Ltd.

OPINION

EATON, Judge:

Before the court is the USCIT Rule 56.2 motion for judgment on the agency record of plaintiffs Fresh Garlic Producers Association and several of its individual members, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc. (collectively, “plaintiffs”). Pls.' Mot. for J. on the Agency R. (ECF Dkt. No. 35). By their motion, plaintiffs challenge the United States Department of Commerce's (“Commerce” or the “Department”) final results of the seventeenth annual administrative review of the antidumping duty order on fresh garlic from the People's Republic of China (“PRC”). Fresh Garlic From the PRC, 78 Fed.Reg. 36,168 (Dep't of Commerce June 17, 2013) (final results of antidumping duty administrative review; 2010–2011), and accompanying Issues and Decision Memorandum, PD 297 at bar code 3139858–01 (June 10, 2013), ECF Dkt. No. 28 (“Issues & Dec. Mem.”) (collectively, “Final Results”).

Defendant-intervenors Shenzhen Xinboda Industrial Co., Ltd. (“Xinboda”) and Hebei Golden Bird Trading Co., Ltd. (“Golden Bird”) (together, “mandatory respondents” or “respondents”) are the two largest exporters of Chinese fresh garlic by volume and were the two mandatory respondents selected by Commerce for individual examination in the administrative review. Mem. from Christian Marsh to Ronald K. Lorentzen at 3, PD 189 at bar code 3108743–01 (Dec. 3, 2012), ECF Dkt. No. 28.

Plaintiffs argue that the source Commerce selected to establish the price for the surrogate value of the raw garlic bulbs was less specific to the level of trade at which respondents purchased their garlic bulbs than other record evidence. See Mem. of Law in Supp. of Pls.' Mot. for J. on the Agency R. 25 (ECF Dkt. No. 35–1) (“Pls.' Br.”). Thus, according to plaintiffs, the value was not based on the best available information as to the surrogate price for the raw garlic bulbs. Defendant United States and mandatory respondents maintain, among other things, that, because the selected source used to price the garlic bulbs was based on a broad market average, it represented the best available information. See Def.'s Resp. to Pls.' Mot. for J. upon the Agency R. 1–2, 5 (ECF Dkt. No. 39); Def.-int. Shenzhen Xinboda Industrial Co., Ltd.'s Resp. to Pls.' Mot. for J. upon the Agency R. 1 (ECF Dkt. No. 41); Resp. of Def.-int. Hebei Golden Bird Trading Co., Ltd. to Pls.' Mot. for J. on the Agency R. 2 (ECF Dkt. No. 40). The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii).

For the reasons set forth below, the Final Results are sustained.

BACKGROUND

In 1994, Commerce issued an antidumping duty order on imports of fresh garlic from the PRC. Fresh Garlic From the PRC, 59 Fed.Reg. 59,209 (Dep't of Commerce Nov. 16, 1994) (antidumping duty order) (the “Order”).¹ On November 30, 2011, plaintiffs asked Commerce to conduct an administrative review of the Order. Letter from Michael J. Coursey & John M. Herrmann, Kelley Drye & Warren LLP, to Secretary of Commerce, U.S. Department of Commerce at 1, PD 12 at bar code 3043695–01 (Nov. 30, 2011), ECF Dkt. No. 28. Commerce then began its seventeenth annual administrative review of the Order for the period of review November 1, 2010 through October 31, 2011 (“POR”), choosing Golden Bird and Xinboda as mandatory respondents. See Issues & Dec. Mem. 1, 4.

During the review, as proposed sources from which to calculate the surrogate value for the raw garlic bulbs, the primary input for the subject merchandise, the parties placed on the record several sets of data from various sources, including (1) 2009 Ukrainian garlic producer prices provided by the United Nations' Food and Agricultural Organization's Statistical Division (“FAO”)² and (2) daily garlic prices from eight regional markets in Ukraine during the POR, published by Fruit–Inform³ (“FI”). See Mem. from David Lindgren, International Trade Compliance Analyst, to The File at 4, PD 193 at bar code 3108863–02 (Dec. 3, 2012), ECF Dkt. No. 28 (“Prelim. Surrogate Values Mem.”).

In the Final Results, Commerce found that the FAO price “represent[ed] the broadest market average” because it was “a single annual price intended to represent all Ukrainian garlic production.” Issues & Dec. Mem. at 15. Commerce concluded that the FAO price represented a broader market average than the FI data because “while the FI price data represent[ed] 18 percent of all Ukrainian production, the [FAO] price [was] intended to represent all Ukrainian-produced garlic.” Issues & Dec. Mem. at 15.

Commerce also found that, although the FAO price was “intended to be a farmgate price,” i.e., a price that includes the costs of production, but not additional costs such as processing, it “may reflect some other measures as well,” i.e., could reflect some shipping, processing, or storage of the garlic bulbs.⁴ See Issues & Dec. Mem. at 14.

As to the FI prices, Commerce characterized these as being closer to wholesale prices, because the garlic had gone through “some level of preparation, transport and possibly storage” prior to sale. See Issues & Dec. Mem. at 14.

As to the level of trade at which mandatory respondents acquired their garlic bulbs, Commerce found “that the raw garlic purchased by both Golden Bird and Xinboda [was] not farmgate in nature.” Issues & Dec. Mem. at 15. As shall be seen, this conclusion was based on the Department's finding that the raw garlic had undergone at least some processing. When it tried to match the level of trade of mandatory respondents' purchases to the surrogate value on the record, therefore, Commerce concluded that both the FAO and FI prices were at a different level of trade than those purchases and the Department did not have enough information to determine which one was more similar to respondents' purchases. See Issues & Dec. Mem. at 15. In other words, for Commerce, neither source represented data at precisely the level of trade at which the respondents bought their garlic.

Relying on the FI data, in the Preliminary Results, Commerce calculated weighted average margins of $1.96/kg for Xinboda and $1.65/kg for Golden Bird. Fresh Garlic From the PRC, 77 Fed.Reg. 73,980, 73,981 (Dep't of Commerce Dec. 12, 2012) (preliminary results of antidumping duty administrative review; 2010–2011) (“Preliminary Results”). In the Final Results, however, Commerce relied on the FAO data for garlic bulb input prices and calculated dumping margins of zero for both mandatory respondents. Final Results, 78 Fed.Reg. at 36,169.

STANDARD OF REVIEW

“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). “Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). “The existence of substantial evidence is determined ‘by considering the record as a whole, including evidence that supports as well as evidence that fairly detracts from the substantiality of the evidence.’ ” Fuyao Glass Indus. Grp. Co. v. United States, 30 CIT 165, 167, 2006 WL 345004 (2006) (quoting Huaiyin, 322 F.3d at 1374 ) (internal quotation marks omitted). The court's function, however, “is not to reweigh the evidence but rather to ascertain ‘whether there was evidence which could reasonably lead to the [agency's] conclusion.’ ” See Am. Bearing Mfrs. Ass'n v. United States, 28 CIT 1698, 1700, 350 F.Supp.2d 1100, 1104 (2004) (quoting Matsushita Elec. Indus. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984) ). Moreover, “[t]he possibility of drawing two equally justifiable, yet inconsistent conclusions from the record does not prevent the agency's determination from being supported by substantial evidence.” Zhejiang Native Produce & Animal By–Products Imp. & Exp. Grp. Corp. v. United States, 32 CIT 673, 674, 2008 WL 2410210 (2008) (citing Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) ; Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed.Cir.2004) ).

DISCUSSION

I. Legal Framework

As part of its unfair trade regime, “[t]he United States imposes duties on foreign-produced goods that are sold in the United States at less-than-fair value.” Clearon Corp. v. United States, 37 CIT ––––, ––––, Slip Op. 13–22, at 4, 2013 WL 646390 at *2 (2013). Under 19 U.S.C. § 1675(a)(1)(B), once an antidumping duty order has been issued, “[a]t least once during each...