917 F.Supp.2d 1331 (CIT 2013), 11-00537, Archer Daniels Midland Co. v. United States

Docket Nº:Court 11-00537.
Citation:917 F.Supp.2d 1331
Opinion Judge:BARZILAY, Senior Judge.
Party Name:ARCHER DANIELS MIDLAND COMPANY, Cargill, Incorporated, and Tate & Lyle Americas, LLC, Plaintiffs, v. UNITED STATES, Defendant, and Yixing-Union Biochemical Co., Ltd., Defendant-Intervenor. Slip Op. 13-66.
Attorney:King & Spalding LLP, Washington, DC (Joseph W. Dorn and Patrick J. Togni) for Plaintiffs Archer Daniels Midland Company, Cargill, Incorporated, and Tate & Lyle Americas LLC. Barnes, Richardson & Colburn, LLP, Washington, DC (Michael S. Holton, Jeffrey S. Neeley, and Stephen W. Brophy) for Consoli...
Case Date:May 28, 2013
Court:Court of International Trade
 
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917 F.Supp.2d 1331 (CIT 2013)

ARCHER DANIELS MIDLAND COMPANY, Cargill, Incorporated, and Tate & Lyle Americas, LLC, Plaintiffs,

v.

UNITED STATES, Defendant,

and

Yixing-Union Biochemical Co., Ltd., Defendant-Intervenor.

Slip Op. 13-66.

Court No. 11-00537.

United States Court of International Trade.

May 28, 2013

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[Copyrighted Material Omitted]

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King & Spalding LLP, Washington, DC (Joseph W. Dorn and Patrick J. Togni) for Plaintiffs Archer Daniels Midland Company, Cargill, Incorporated, and Tate & Lyle Americas LLC.

Barnes, Richardson & Colburn, LLP, Washington, DC (Michael S. Holton, Jeffrey S. Neeley, and Stephen W. Brophy) for Consolidated Plaintiffs RZBC (Juxian) Co., Ltd., RZBC Co., Ltd., and RZBC Imp. & Exp. Co., Ltd.

Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC (Carrie A. Dunsmore) for Defendant United States; Matthew D. Walden, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Counsel.

Drinker Biddle & Reath LLP, Washington, DC (Richard P. Ferrin and Douglas J. Heffner) for Defendant-Intervenor Yixing-Union Biochemical Co., Ltd.

OPINION

BARZILAY, Senior Judge.

This matter comes before the court on the motions for judgment on the agency record filed pursuant to USCIT Rule 56.2 by Plaintiffs Archer Daniels Midland Company, Cargill, Incorporated, and Tate & Lyle Americas, LLC (" Petitioners" ) and Consolidated Plaintiffs RZBC Co., Ltd. (" RZBC Co." ), RZBC Import & Export Co., Ltd., and RZBC (Juxian) Co., Ltd. (" RZBC Juxian" ) (collectively " RZBC" ). The Petitioners and RZBC seek review of the final results of the U.S. Department of Commerce's (" Commerce" ) first administrative review of the countervailing duty order on citric acid and certain citrate salts from the People's Republic of China (" PRC" ). See Citric Acid and Certain Citrate Salts from the People's Republic of China: Final Results of Countervailing Duty Administrative Review, 76 Fed.Reg. 77,206 (Dep't Commerce Dec. 12, 2011) (" Final Results " ). The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) and Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended,

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19 U.S.C. § 1516a(a)(2)(B)(iii).1 For the reasons set forth below the court remands this matter to Commerce for a clearer explanation of its conclusion regarding the countervailability of steam coal and to address the effect of different grades of sulfuric acid when calculating a world market sulfuric acid benchmark price. The court sustains Commerce's other determinations.

I. STANDARD OF REVIEW

The court will sustain the " determinations, finding, or conclusions" made by Commerce during an administrative review unless they are " 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.’ " U.S. Steel Corp. v. United States, 621 F.3d 1351, 1357 (Fed.Cir.2010) (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951)). " Even if it is possible to draw two inconsistent conclusions from evidence in the record, such a possibility does not prevent Commerce's determination from being supported by substantial evidence." Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir.2001). In other words, when substantial evidence supports Commerce's findings the court may not substitute its judgment for that of the agency. See Inland Steel Indus., Inc. v. United States, 188 F.3d 1349, 1359 (Fed.Cir.1999). For this reason the " party challenging [Commerce's] determination under the substantial evidence standard ‘ has chosen a course with a high barrier to reversal.’ " Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed.Cir.2006) (quoting Mitsubishi Heavy Indus., Ltd. v. United States, 275 F.3d 1056, 1060 (Fed.Cir.2001)).

To determine whether Commerce's actions were in accordance with law, the court applies the well-established framework set forth in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). " The first step of the Chevron analysis is to determine ‘ whether Congress has directly spoken to the precise question at issue.’ " PSC VSMPO-Avisma Corp. v. United States, 688 F.3d 751, 763 (Fed.Cir.2012) (quoting Chevron, 467 U.S. at 842, 104 S.Ct. 2778). If it has, the agency and the courts must give effect to Congress's intent. Id. If Congress has not directly spoken to the precise question at issue, the agency has authority to fill the legislative gap, and its interpretations " are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to statute." Chevron, 467 U.S. at 844, 104 S.Ct. 2778.

II. BACKGROUND

In 2009, Commerce issued a countervailing duty order on citric acid and certain citrate salts from the PRC. See Citric Acid and Certain Citrate Salts from the People's Republic of China, 74 Fed.Reg. 25,703 (Dep't Commerce May 29, 2009) (" CVD Order " ). Approximately one year later, Commerce notified interested parties of the opportunity to request a review of the CVD Order for the period September 19, 2008 through December 31, 2009. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 75 Fed.Reg. 23,236 (Dep't Commerce May 3, 2010). After receiving multiple

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responses, Commerce initiated a review of the CVD Order, see Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 75 Fed.Reg. 37,759 (Dep't Commerce June 30, 2010), and selected RZBC and Defendant-Intervenor Yixing-Union Biochemical Co., Ltd. (" Yixing" ) as respondents. See Respondent Selection Memo (Aug. 17, 2010), Public Record 21, Confidential Record 4.2

There were three subsidies addressed by Commerce that are at issue in this appeal— the provision of both steam coal and sulfuric acid 3 for less than adequate remuneration (" LTAR" ), and long-term loans to RZBC from government sources. After its initial review of the parties' submissions, Commerce issued preliminary results concluding that the respondents had received countervailable subsidies during the period of review. Citric Acid and Certain Citrate Salts from the People's Republic of China: Preliminary Results of Countervailing Duty Administrative Review, 76 Fed.Reg. 33,219 (Dep't Commerce June 8, 2011) (" Preliminary Results " ). In reaching this conclusion, Commerce determined that RZBC failed to provide the identities of all the companies that produced and supplied it with sulfuric acid. Commerce further determined that the Government of China (" GOC" ) failed to provide ownership information for the companies producing and supplying sulfuric acid and steam coal. This information would have allowed Commerce to determine whether these producers were " authorities" within the meaning of 19 U.S.C. § 1677(5)(B). Concluding that RZBC and the GOC had failed to cooperate and that an adverse inference was warranted, Commerce assumed that the producers were, in fact, " authorities" who provided a financial contribution in the form of a provision of a good. Id. at 33,222-23, 33,231.

Next, Commerce compared the price paid for these GOC-supplied inputs with benchmarks derived from world market prices and concluded that the steam coal and sulfuric acid were provided for less than adequate remuneration. Id. at 33,232, 33,233-34. Finally, addressing the final requirement of a countervailable subsidy, Commerce determined that these benefits were specific under 19 U.S.C. § 1677(5A)(D) because they were conferred on a limited number of industries. Id. at 33,232, 33,234.

Commerce did not address loans received by RZBC in the Preliminary Results but subsequently issued a Preliminary Creditworthiness Determination (Dep't Commerce Sept. 29, 2011), PR 52, CR 42. In alleging that RZBC received loans as a subsidy, the Petitioners asserted that RZBC was uncreditworthy during the years of 2006 through 2009. See Petitioner's Allegations of RZBC's Uncreditworthiness (Apr. 26, 2011), PR 135, CR 43. In the Preliminary Creditworthiness Determination, Commerce first stated that due to ownership changes during the relevant period, it would treat all of the RZBC companies as separate entities for 2006 and 2007 and as a collective entity for 2008 and 2009. Turning to the merits of the Petitioners' allegations, Commerce concluded that, due to " unprofitability, illiquidity, and relatively high leverage," RZBC Juxian was uncreditworthy in 2006. Preliminary Creditworthiness Determination at 4-5. Next, Commerce concluded

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that RZBC Co. was uncreditworthy in 2007 " due to its [[ Confidential Data Deleted ]]." Id. at 6. Finally, while finding that the financial health of the combined RZBC entities was improving in 2008 and 2009, Commerce ultimately determined that RZBC was uncreditworthy in those years because it " was [[ Confidential Data Deleted ]] and [[ Confidential Data Deleted ]]...." Id. at 8.

Commerce subsequently received additional comments and submissions from the parties and ultimately issued the Final Results, which incorporated by reference a corrected Issues and Decision Memorandum for the Final Results in the First Administrative Review of the Countervailing Duty Order on Citric Acid and Certain...

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