Fengchi Imp. & Exp. Co. v. United States

• Decision Date: 25 March 2015
• Docket Number: Slip Op. 15–23.,Court No.: 13–00186.
• Citation: 70 F.Supp.3d 1255
• Parties: FENGCHI IMP. & EXP. CO., LTD. OF HAICHENG CITY, Fengchi Refractories Co. of Haicheng City, and Fedmet Resources Corporation, Plaintiffs, v. UNITED STATES, Defendant, and Resco Products, Inc., and ANH Refractories Company, Defendant–Intervenors.
• Court: U.S. Court of International Trade

70 F.Supp.3d 1255

FENGCHI IMP. & EXP. CO., LTD. OF HAICHENG CITY, Fengchi Refractories Co. of Haicheng City, and Fedmet Resources Corporation, Plaintiffs

v. UNITED STATES, DefendantandResco Products, Inc., and ANH Refractories Company, Defendant–Intervenors.

Slip Op. 15–23.

Court No.: 13–00186.

United States Court of International Trade.

March 25, 2015.

Donald B. Cameron, Brady W. Mills, Julie C. Mendoza, Mary S. Hodgins, R. Will Planert, and Sarah S. Sprinkle, Morris Manning & Martin LLP, of Washington, DC, for plaintiffs.

Melissa M. Devine, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Whitney M. Rolig, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Camelia C. Mazard, Robert W. Doyle, Jr., and Andre P. Barlow, Doyle Barlow & Mazard PLLC of Washington, DC, for defendant-intervenor Resco Products, Inc.

Joseph W. Dorn and Brian E. McGill, King & Spalding LLP, of Washington, DC, for defendant-intervenor ANH Refractories Company.

OPINION and ORDER

TSOUCALAS, Senior Judge:

Plaintiffs Fengchi Import and Export Co., Ltd. of Haicheng City, Fengchi Refractories Co. of Haicheng City, and Fedmet Resources Corporation (collectively “Plaintiffs”), move for judgment on the agency record contesting defendant United States Department of Commerce's (“Commerce”) determination in Certain Magnesia Carbon Bricks From the People's Republic of China: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review; 2010–2011, 78 Fed. Reg. 22,230 (Apr. 15, 2013) (“Final Results ”). Commerce and defendant-intervenors, Resco Products Inc. and ANH Refractories Company, oppose Plaintiffs' motion. For the following reasons, Plaintiffs' motion is denied.

BACKGROUND

Magnesia carbon bricks (“MCBs”) from the People's Republic of China (“PRC”) are subject to an antidumping duty order. See Certain MCBs From Mexico and the PRC: Antidumping Duty Orders, 75 Fed. Reg. 57,257 (Sept. 20, 2010) (“Orders ”). On October 31, 2011, Commerce initiated an administrative review of the Orders, covering sales of subject merchandise between March 12, 2010 and August 31, 2011 (“2010–2011 Administrative Review”). See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 76 Fed. Reg. 67,133, 67,135 (Oct. 31, 2011). Commerce named Fengchi Import and Export Co., Ltd. of Haicheng City and Fengchi Refractories Co. of Haicheng City, as mandatory respondents.¹ Id. Fedmet, a domestic importer of Fengchi's merchandise, joined the review as an interested party. See Letter to Commerce re: Antidumping Duty Order on Certain MCBs from the PRC, Administrative Review (3/12/10–8/31/11): Entry of Appearance and APO Application (Oct. 31, 2012), Public Rec.² 137 at 1. On March 14, 2012, Commerce issued its standard nonmarket economy questionnaire to Fengchi, seeking information on Fengchi's factors of production and U.S. sales of subject merchandise. See MCBs from the PRC: Antidumping Duty Questionnaire, (Mar. 14, 2012) PR 62 at 1.

Concurrent with 2010–2011 Administrative Review, Commerce conducted a scope inquiry to determine whether magnesia alumina carbon bricks (“MACBs”) from the PRC were subject to the Orders. See Certain MCBs from the PRC: Issues and Decision Memorandum for the Final Results of the 2010–2011 Administrative Review, (Apr. 9, 2013) PR 148 at 1–2 (“IDM ”). On July 2, 2012, Commerce issued the final results of its scope inquiry, determining that MACBs were within the scope of the Orders. See Certain MCBs from the PRC and Mexico: Final Scope Ruling—Fedmet Resources Corporation at 1–2, Case Nos. A–201–837, A–570–954 and C–570–955 (July 2, 2012) (“MACB Scope Ruling ”).

After issuing the MACB Scope Ruling, Commerce sent a supplemental questionnaire to Fengchi indicating its intention to consider sales of MACBs as part of the 2010–2011 Administrative Review. See First Antidumping Administrative Review of Certain MCBs from the PRC: Sections C and D Supplemental Questionnaire,³ (Aug. 3, 2012) CR 46 at 3. Moreover, Commerce requested that Fengchi confirm whether it had reported all sales of subject merchandise, including MACBs, in its initial questionnaire responses, and if not, it requested that Fengchi provide such information. See id. Additionally, Commerce provided Fengchi with sales data it acquired from U.S. Customs and Border Protection (“CBP”) indicating that Fengchi made entries of MACBs during the period of review (“POR”). See id., att. 2 at 1.

Fengchi did not provide information on its MACB sales in its response to the supplemental questionnaire, but instead, submitted a series of letters to Commerce in which it insisted that Commerce's request was improper. See Letter to Commerce re: Antidumping Order on Certain MCBs from the PRC; Antidumping Duty Administrative Review (3/12/10–8/31/11), (Aug. 9, 2012) PR 104 at 1–5; Letter to Commerce re: Antidumping Order on Certain MCBs from the PRC; Antidumping Duty Administrative Review (3/12/10–8/31/11), (Aug. 14, 2012) PR 106 at 1–2; Letter to Commerce re: Antidumping Order on Certain MCBs from the PRC; Antidumping Duty Administrative Review (3/12/10–8/31/11), (Aug. 29, 2012) PR 114 at 2–4. Fengchi argued that Commerce's request was “extremely unreasonable” and “well past the 90–day deadline” under 19 C.F.R. § 351.225(l )(4), because Commerce initiated the 2010–2011 Administrative Review eight months before it issued the MACB Scope Ruling. See PR 104 at 3, 4. Commerce offered to extend the deadline for Fengchi to provide MACB sales information on multiple occasions, but Fengchi continuously declined to comply with Commerce's request for information. See Letter to Fengchi re: First Antidumping Administrative Review of Certain MCBs from the PRC, (Sept. 7, 2012) PR 125 at 1–2.

Commerce issued the Preliminary Results of the 2010–2011 Administrative Review in October 2012. See Certain MCBs From the PRC: AD Administrative Review; 2010–2011, 77 Fed. Reg. 61,394 (Oct. 9, 2012)(“Preliminary Results”). See also Decision Memorandum for Preliminary Results of Antidumping Duty Administrative Review: Certain MCBs from the PRC, PR 132 (Oct. 1, 2012) (“PRM ”). Commerce determined that Fengchi's refusal to provide information on its MACBs sales constituted a failure to cooperate with the review to the best of its ability and applied total adverse facts available (“AFA”). PRM at 8–9. It selected an AFA rate of 236%, based on the petition rate from the investigation. PRM at 10.

Commerce issued the Final Results in April 2013, upholding the Preliminary Results in their entirety. Final Results, 78 Fed. Reg. at 22,230 ; see IDM at 1.

JURISDICTION and STANDARD OF REVIEW

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012) and section 516A(a)(2)(B)(iii) of the Tariff Act of 1930,⁴ as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012). The court will uphold Commerce's final determination in an antidumping duty administrative review unless it is “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 “means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

Additionally, when reviewing an agency's interpretation of its regulations, the court must give substantial deference to the agency's interpretation, Michaels Stores, Inc. v. United States, 766 F.3d 1388, 1391 (Fed.Cir.2014) (citing Torrington Co. v. United States, 156 F.3d 1361, 1363–64 (Fed.Cir.1998) ), according it “ ‘controlling weight unless it is plainly erroneous or inconsistent with the regulation.’ ” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (citations omitted); accord Viraj Group v. United States, 476 F.3d 1349, 1355 (Fed.Cir.2007). In this context, “[d]eference to an agency's interpretation of its own regulations is broader than deference to the agency's construction of a statute, because in the latter case the agency is addressing Congress's intentions, while in the former it is addressing its own.” Viraj, 476 F.3d at 1355 (quoting Gose v. U.S. Postal Serv., 451 F.3d 831, 837 (Fed.Cir.2006) ).

DISCUSSION

Plaintiffs contests the following aspects of the Final Commerce's application of AFA; Commerce's selection of 236% as the AFA rate. See Pls.' Br. Supp. Mot. J. Agency R. at 8–23 (“Pls.' Br.”).

As an initial matter, the Court of Appeals for the Federal Circuit (“CAFC”) issued an opinion overturning the MACB

Scope Ruling

on June 20, 2014, after the completion of briefing in this case. See Fedmet Res. Corp. v. United States, 755 F.3d 912, 914 (Fed.Cir.2014). Plaintiffs argue in their brief that a reversal of the MACB Scope Ruling will resolve the issues in this case because “there would be no lawful basis for Commerce to impose antidumping duties on [MACBs] under the [Orders], and thus, no lawful basis for Commerce to have directed Fengchi to report sales of [MACBs] in the administrative review.” Id. The court must reject this argument. The Fedmet litigation concerned the MACB Scope Ruling. Fedmet, 755 F.3d at 914. In contrast, this case concerns Commerce's ability to request information on products subject to a scope ruling during an administrative review and its imposition of AFA after Fengchi declined to comply with that request. Thus, the CAFC's decision in Fedmet does not resolve the legal issues raised in the instant case.

I. Commerce's Request for Information on Fengchi's MACB Sales

The first issue before the court is whether Commerce properly requested that Fengchi provide information on its sales provide such...