Xiamen Int'l Trade & Indus. Co. v. United States

• Decision Date: 20 December 2013
• Docket Number: Court No. 11–00411.,Slip Op. 13–152.
• Citation: 953 F.Supp.2d 1307
• Parties: XIAMEN INTERNATIONAL TRADE AND INDUSTRIAL CO., LTD., Zhejiang Iceman Group Co., Ltd., and Fujian Golden Banyan Foodstuffs Industrial Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

953 F.Supp.2d 1307

XIAMEN INTERNATIONAL TRADE AND INDUSTRIAL CO., LTD., Zhejiang Iceman Group Co., Ltd., and Fujian Golden Banyan Foodstuffs Industrial Co., Ltd., Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 13–152. Court No. 11–00411.

United States Court of International Trade.

Dec. 20, 2013.

Lizbeth R. Levinson and Ronald M. Wisla, Kutak Rock LLP, of Washington DC, for plaintiffs.

Richard P. Schroeder, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With him on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Devin S. Sikes, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

OPINION AND ORDER

GOLDBERG, Senior Judge:

Plaintiffs Xiamen International Trade & Industrial Co., Ltd. (“XITIC”), Zhejiang Iceman Group Co., Ltd. (“Iceman Group”), and Fujian Golden Banyan Foodstuffs Industrial Co., Ltd. (“Golden Banyan”) (collectively, “Plaintiffs”) challenge the U.S. Department of Commerce's (“Department” or “Commerce”) findings in the 2009–2010 administrative review of the antidumping duty order on certain preserved mushrooms from the People's Republic of China (“PRC”). See Certain Preserved Mushrooms from the People's Republic of China, 76 Fed.Reg. 56,732, 56,733 (Dep't Commerce Sept. 14, 2011) (final admin. review) (“ Final Results ”); Certain Preserved Mushrooms from the People's Republic of China, 76 Fed.Reg. 70,112 (Dep't Commerce Nov. 10, 2011) (am. final admin. review) (“ Amended Final Results ”).¹ Specifically, XITIC challenges Commerce's selection of surrogate values for XITIC's inputs of lime, fresh mushrooms, and mushroom spawn. XITIC also argues that Commerce should have applied its new surrogate labor methodology when calculating XITIC's surrogate labor rate and financial ratios. Iceman Group asserts that Commerce unlawfully assigned Iceman Group a separate rate because the company was not being reviewed. Iceman Group and Golden Banyan also allege that Commerce's separate rate calculations incorrectly included Guangxi Jisheng Foods, Inc.'s (“Jisheng”) 266.13% partial adverse facts available (“AFA”) margin. As set forth below, the court sustains in part and remands in part.

BACKGROUND

On March 30, 2010, Commerce initiated an administrative review of the antidumping duty order on certain preserved mushrooms from the PRC. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 75 Fed.Reg. 15,679, 15,681 (Dep't Commerce Mar. 30, 2010) (“ Initiation Notice ”). Commerce initiated its review at the request of petitioner Monterey Mushrooms (“Petitioner”), which asked that the Department review twenty-six PRC exporters and producers of subject merchandise. See Certain Preserved Mushrooms from the People's Republic of China, 76 Fed.Reg. 12,704, 12,704 (Dep't Commerce Mar. 8, 2011) (prelim. admin. review) (“ Preliminary Results ”). The review period ran from February 1, 2009 to January 31, 2010. Id.

Commerce determined that it could only individually examine the three largest producers or exporters of subject merchandise. Accordingly, Commerce selected XITIC, Blue Field (Sichuan) Food Industrial Co., Ltd. (“Blue Field”), and Jisheng as mandatory respondents. Resp't Selection Mem. at 5, PD I 35 (May 17, 2010), ECF No. 16 (Dec. 12, 2011) (“PD I 35”). Commerce also accorded separate rate status to certain companies, including Plaintiffs Golden Banyan and Iceman Group. Final Results, 76 Fed.Reg. at 56,733.

Using India as the primary surrogate market economy country, Commerce calculated dumping margins of 13.12% for XITIC and 84.55% for Golden Banyan and Iceman Group. Id. The Department later amended its Final Results to correct a ministerial error, which adjusted Golden Banyan's and Iceman Group's rates to 76.12%. Amended Final Results, 76 Fed.Reg. at 70,113.

SUBJECT MATTER JURISDICTION AND STANDARD OF REVIEW

This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2006) and must uphold Commerce's determination 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 is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). The Court reviews the substantiality of the evidence “by considering the record as a whole, including evidence that supports as well as evidence that ‘fairly detracts from the substantiality of the evidence.’ ” Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984)).

The Court employs a two-part analysis to determine whether Commerce's statutory construction is otherwise in accordance with law. See 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 Court first asks whether Congress has directly spoken to the question at issue in the case. Id. If it has, the Court gives effect to Congress's unambiguously expressed intent. Id. If Congress has not directly addressed the pertinent issue, the Court assesses whether Commerce's interpretation “is based on a permissible construction of the statute.” Id. at 843, 104 S.Ct. 2778. To survive scrutiny, Commerce need not provide “the only reasonable interpretation or even the most reasonable interpretation” of a statutory provision. Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994).

DISCUSSION

I. Commerce's surrogate values for lime and mushroom spawn were not based in substantial evidence, and voluntary remand is appropriate so Commerce can recalculate XITIC's surrogate labor rate and financial ratios

XITIC ² challenges Commerce's selection of surrogate values for its inputs of lime, mushroom spawn, and fresh mushrooms, as well as the methodology Commerce used to derive XITIC's surrogate labor rate and financial ratios. For the following reasons, the court sustains Commerce's selection of a surrogate value for fresh mushrooms, but remands so Commerce can reconsider its values for lime and mushroom spawn. The court also grants the United States' request for a voluntary remand to recalculate XITIC's surrogate labor rate and financial ratios.

A. Legal framework for the selection of surrogate values

A dumping margin is “the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise.” 19 U.S.C. § 1677(35)(A). In non-market economy (“NME”) proceedings, Commerce constructs normal value by valuing the inputs used to produce the merchandise (the factors of production) ³ plus “an amount for general expenses and profit plus the cost of containers, coverings, and other expenses.” ⁴Id.§ 1677b(c)(1)(B). The goal of this practice is to construct a hypothetical market value for a product, which then serves as the normal value for purposes of computing any dumping margin. See Nation Ford Chem. Co. v. United States, 166 F.3d 1373, 1375 (Fed.Cir.1999).

Commerce selects values for each factor of production—known as “surrogate values”—“based on the best available information regarding the values of such factors in a market economy country or countries.” 19 U.S.C. § 1677b(c)(1); see also id. § 1677b(c)(4) (elaborating that, to the extent possible, Commerce must use an economically comparable market economy that is a significant producer of subject merchandise). Because no statute or regulation defines the “best available information,” Commerce has established certain non-dispositive policy preferences. Namely, the Department prefers surrogates values that are contemporaneous with the period of review, publicly available, product-specific, representative of broad market average prices, and free of taxes and import duties. I & D Mem. at 7, PD II 10 (Sept. 6, 2011), ECF No. 16 (Dec. 12, 2011) (“ I & D Mem.”). Commerce has not identified a hierarchy among these factors, and the weight accorded to a factor varies depending on the facts of each case. Id.

Commerce has broad discretion to decide which data constitute the best available information regarding the value of a particular factor. QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed.Cir.2011). The role of a reviewing court is “not to evaluate whether the information Commerce used was the best available, but” to determine “whether a reasonable mind could conclude that Commerce chose the best available information.” Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333, 1341 (Fed.Cir.2011). To meet that standard, Commerce must justify its surrogate value with a reasoned explanation supported by substantial evidence. Dorbest Ltd. v. United States, 30 CIT 1671, 1677, 462 F.Supp.2d 1262, 1269 (2006). Though a reasoned explanation need not be a perfect explanation, Commerce must still fairly evaluate and compare the data sets on the record using its established analytical criteria. Id.

B. Commerce's decision to value XITIC's “lime” input using GTA import data for slaked lime was not supported by substantial evidence

With that framework in mind, the court turns to XITIC's first challenge to Commerce's surrogate values. Commerce valued one of XITIC's factors, “lime,” using Global Trade Atlas (“GTA”) import data for Indian Harmonized Tariff Schedule (“HTS”) subheading 2522. 20 (“slaked lime”). XITIC submits that this value was unsupported by substantial evidence because record evidence suggested that XITIC used calcium carbonate (identified as Indian HTS subheading 2836.50.00) in producing mushrooms. Pls.' Mot. for J. on Agency R., ECF No. 23 (“Pls.' Br.”), at 11.

i. Factual background

In its initial Section D questionnaire...