Stanley Works (Langfang) Fastening Sys. Co. v. United States

• Decision Date: 03 September 2013
• Docket Number: Slip Op. 13–118.,Court No. 11–00102.
• Citation: 964 F.Supp.2d 1311
• Parties: The STANLEY WORKS (LANGFANG) FASTENING SYSTEMS CO., LTD. and The Stanley Works/Stanley Fastening Systems, LP, Plaintiffs, v. UNITED STATES, Defendant, and Mid Continent Nail Corporation, Defendant–Intervenor. Mid Continent Nail Corporation, Plaintiff, v. United States, Defendant, and The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP, Defendant–Intervenors.
• Court: U.S. Court of International Trade

964 F.Supp.2d 1311

The STANLEY WORKS (LANGFANG) FASTENING SYSTEMS CO., LTD. and The Stanley Works/Stanley Fastening Systems, LP, Plaintiffs,

v.UNITED STATES, Defendant,andMid Continent Nail Corporation, Defendant–Intervenor.

Mid Continent Nail Corporation, Plaintiff,

v.United States, Defendant,andThe Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP, Defendant–Intervenors.

Slip Op. 13–118.

Court No. 11–00102.

United States Court of

International Trade.

Sept. 3, 2013.

Lawrence J. Bogard, Neville Peterson LLP, of Washington, D.C., argued for The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP. With him on the brief was Meredith A. Dement.

Carrie A. Dunsmore, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant. With her on the brief were Stuart F. Delery, Assistant Attorney General, Civil Division, and Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director, Commercial Litigation Branch. Of counsel on the brief was Nathaniel J. Halvorson, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, D.C.

Adam H. Gordon, Wiley Rein LLP, of Washington, D.C., argued for Mid Continent Nail Corporation. With him on the brief were Robert E. DeFrancesco, III and Lori E. Scheetz.

OPINION

RIDGWAY, Judge:

In this consolidated action, foreign exporters of steel nails The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP (collectively “Stanley”) and domestic producer of steel nails Mid Continent Nail Corporation (“Mid Continent”) contest the final results, as amended, of the U.S. Department of Commerce's first administrative review ¹ of the antidumping duty order covering steel nails from the People's Republic of China (“PRC”). SeeCertain Steel Nails from the People's Republic of China: Final Results of the First Antidumping Duty Administrative Review, 76 Fed.Reg. 16,379 (March 23, 2011) (“Final Results”); Certain Steel Nails from the People's Republic of China: Amended Final Results of the First Antidumping Duty Administrative Review, 76 Fed.Reg. 23,279 (April 26, 2011) (“Amended Final Results”).²

Pending before the court are three separate motions: Mid Continent's Motion for Judgment on the Agency Record, Stanley's Motion for Judgment on the Agency Record, and Defendant United States' Motion for Partial Voluntary Remand.

Mid Continent contests four aspects of Commerce's Final Results specifically, Commerce's decision not to use the intermediate input methodology when calculating Stanley's normal value, Commerce's decision not to apply adverse facts available to missing factors of production data, Commerce's selection of sources for surrogate financial ratios, and Commerce's selection of data for surrogate electricity values. See generally Amended Memorandum in Support of Mid Continent Nail Corporation's Rule 56.2 Amended Motion for Judgment on the Agency Record (“Mid Continent Brief”); Reply Brief of Mid Continent Nail Corporation (“Mid Continent Reply Brief”).³ Stanley and the Government oppose Mid Continent's motion. See generally Memorandum of Plaintiffs The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP in Opposition to Mid Continent's Rule 56.2 Motion for Judgment Upon the Administrative Record (“Stanley Response Brief”); Defendant's Memorandum in Opposition to Plaintiffs' Rule 56.2 Motions for Judgment Upon the Agency Record (“Def.'s Brief”).

Stanley, in turn, challenges Commerce's refusal to correct what Stanley maintains is a “ministerial error” relating to the calculation of normal value for Stanley's nails. See generally Memorandum of Plaintiffs The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems LP in Support of Their Rule 56.2 Motion for Judgment Upon the Agency Record (“Stanley Brief”); Plaintiffs' Memorandum in Reply to Defendant's and Defendant–Intervenor's Opposition to Plaintiffs' Motion for Judgment on the Agency Record (“Stanley Reply Brief”).⁴ Mid Continent and the Government oppose Stanley's motion. See generally Response Brief of Mid Continent Nail Corporation (“Mid Continent Response Brief”); Def.'s Brief.

The Government maintains that the Final Results should be sustained in all respects, save one. See Def.'s Brief; Defendant's Motion for Partial Voluntary Remand (“Def.'s Remand Motion”). Specifically, the Government requests a partial voluntary remand to permit Commerce to reconsider the selection of financial statements used for Stanley's surrogate financial ratios in the Final Results. See generally Def.'s Remand Motion. Mid Continent supports the Government's motion; Stanley opposes it. See generally Response of Mid Continent Nail Corporation to Defendant United States' Motion for Partial Voluntary Remand (“Mid Continent Response to Def.'s Remand Motion”); Plaintiffs' Opposition to Defendant's Motion for Partial Voluntary Remand (“Stanley Response to Def.'s Remand Motion”).

Jurisdiction lies under 28 U.S.C. § 1581(c) (2006).⁵ For the reasons set forth below, Stanley's Motion for Judgment on the Agency Record must be denied, and Mid Continent's Motion for Judgment on the Agency Record must be granted in part and denied in part. In addition, the Government's Motion for Partial Voluntary Remand must be granted.

I. Background

In September 2009, Commerce initiated its first administrative review of the antidumping duty order on certain steel nails from the People's Republic of China (“PRC”), covering the period of review January 23, 2008 to July 31, 2009. SeeInitiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 Fed.Reg. 48,224 (Sept. 22, 2009). Pursuant to its standard practice, Commerce issued questionnaires to the selected respondents, including Stanley, requesting information from Stanley, among others, about the factors of production consumed in the production of one kilogram of the subject merchandise i.e., finished nails that may be collated (strung together) into strips or coils using materials such as plastic, paper, or wire, to form strips or coils that can be loaded into a nail gun. See Response of Stanley to the Commerce Department's Antidumping Duty Questionnaire, Response to Section C (Pub.Doc. No. 159) (“Stanley's Response to Section C Questionnaire”); Response of Stanley to the Commerce Department's Antidumping Duty Questionnaire, Response to Section D (Pub.Doc. No. 160) (“Stanley's Response to Section D Questionnaire”).⁶ Stanley reportedthat all of its nails were collated, the style of collation used in each sale, and the collating material for each style. See Stanley's Response to Section C Questionnaire. Stanley then reported the quantities of each factor of production used in producing one kilogram of nails. Id.

The primary factor of production for nails is wire rod. See generally Surrogate Values for the Preliminary Results (Pub.Doc. No. 287) (“Surrogate Valuation Memorandum for the Preliminary Results”). To make nails, wire rod is drawn so that it becomes wire. Id. Nail manufacturers either draw the wire rod into wire in their own facilities or contract with companies (“tollers”) who draw wire rod into wire as needed. Id. In this case, Stanley explained that, as an integrated producer, it contracts with wire drawers to draw a portion of its wire rod into wire rather than itself drawing all of the wire rod that it requires. See Stanley's Response to Section D Questionnaire. In addition, Stanley stated that, although it was able to provide data for the “substantial majority” of its subcontractors, it was unable to obtain information from certain of these wire drawers about how much wire rod they consumed to produce the amount of wire supplied to Stanley. See Stanley's Response to Section D Questionnaire; Issues & Decision Memorandum at 33 n. 90 (comment 17).

Commerce also requested that Stanley report how much wire it used to produce its nails. See Supplemental Questionnaire for Section D (Pub.Doc. No. 233). Wire, in contrast to wire rod, is not a factor of production, but, rather, an “intermediate input.” ⁷See generally Surrogate Valuation Memorandum for the Preliminary Results. Stanley provided complete data for its wire consumption. See Part 2 of Supplemental Section D Questionnaire Response of Stanley (Pub.Doc. No. 253).

Commerce subsequently published its Preliminary Results. See generallyCertain Steel Nails From the People's Republic of China: Notice of Preliminary Results and Preliminary Rescission, in Part, of the Antidumping Duty Administrative Review, 75 Fed.Reg. 56,070 (Sept. 15, 2010) (“Preliminary Results”). In the Preliminary Results, Commerce calculated a preliminary dumping margin for Stanley at 6.48% using “facts otherwise available” (or “neutral facts”) to fill the gaps in Stanley's wire rod data. SeePreliminary Results, 75 Fed.Reg. at 56,077.⁸

In addition to wire rod, the Preliminary Results also analyzed Stanley's other factors of production. Electricity, for example, plays a major role in the production of nails. See Surrogate Valuation Memorandum for the Preliminary Results at 11. As a surrogate value for electricity in calculating the Preliminary Results, Commerce used historical data published by India's Central Electricity Authority in March 2008. See Surrogate Valuation Memorandum for the Preliminary Results at 11; Issues & Decision Memorandum at 15 (comment 5). Those data reflected “tax-exclusive electricity rates charged to small, medium, and large industries in India.” See Surrogate Valuation Memorandum for the Preliminary Results at 11.

Further, because valuing product-specific factors of production does not capture certain overall “general expenses and profits,” Commerce must separately reflect...