971 F.Supp.2d 1271 (CIT 2014), 13-00102, CS Wind Vietnam Co., Ltd. v. United States
|Citation:||971 F.Supp.2d 1271|
|Opinion Judge:||Restani, Judge:|
|Party Name:||CS WIND VIETNAM CO., LTD. and CS WIND CORPORATION, Plaintiffs, v. UNITED STATES, Defendant, WIND TOWER TRADE COALITION, Defendant-Intervenor|
|Attorney:||No. 13-00102 Ned H. Marshak, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, NY, argued for the plaintiffs. With him on the brief were Bruce M. Mitchell, Andrew B. Schroth, Kavit Mohan, and Dharmendra N. Choudhary. Joshua E. Kurland, Trial Attorney, Commercial Litigation Branc...|
|Judge Panel:||Before: Jane A. Restani, Judge.|
|Case Date:||March 27, 2014|
|Court:||Court of International Trade|
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Motion for judgment on the agency record in antidumping investigation granted in part.
This action challenges the U.S. Department of Commerce's (" Commerce" ) final results rendered in the antidumping (" AD" )1 investigation of certain wind towers from Vietnam. See Utility Scale Wind Towers from the Socialist Republic of Vietnam: Final Determination of Sales at Less than Fair Value, 77 Fed. Reg. 75,984 (Dep't Commerce Dec. 26, 2012) (" Final Determination" ); Issues and Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of Utility Scale Wind Towers from the Socialist Republic of Vietnam, A-552-814, (Dec. 17, 2012), available at http://enforcement.trade.gov/frn/summary/vietnam/2012-30944-1.pdf (last visited Mar. 20, 2014) (" I& D Memo" ). Plaintiffs CS Wind Vietnam Co., Ltd. and CS Wind Corp. (collectively " CS Wind" ) seek remand of the Final Determination, contending Commerce erred in calculating its dumping margin based on the application of certain surrogate values and adjustments. Mem. of Law in Supp. of Pls.' Rule 56.2 Mot. for J. upon the Agency R., ECF No. 26 (" Pl. Br." ). Defendant United States (" the government" ) and defendant-intervenor Wind Tower Trade Coalition (" WTTC" ) argue that the Final Determination is based on substantial evidence and in accordance with law. Def.'s Mem. in Opp'n to Pls.' Mot. for J. upon the Agency R., ECF No. 32 (" Def. Br." ); Def.-Intvnr.'s Resp. to Pl.'s Mot. for J. on the Agency R., ECF No. 34 (" WTTC Br." ). For the reasons stated below, the court remands in part and sustains in part the Final Determination.
Following a petition by WTTC, Commerce initiated an A.D. investigation into certain wind towers from Vietnam. See Utility Scale Wind Towers from the People's Republic of China and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations, 77 Fed. Reg. 3440 (Dep't Commerce Jan. 24, 2012). Because Vietnam is considered by Commerce to be a non-market economy (" NME" ), much of the investigation focused
on selecting surrogate values for valuing the various factors of production (" FOPs" ) used by CS Wind in manufacturing wind towers. See 19 U.S.C. § 1677b(c)(1). These surrogate values were then used to compute the normal value, representing the cost of production for CS Wind if it had operated in a hypothetical market economy. See id. Before the agency, the parties primarily disputed the proper surrogate value to use for steel plate, as it is the main input in the production process for wind towers. See I& D Memo at 2-15. Disputes also arose over carbon dioxide costs, weight discrepancies for the reported FOPs, market economy input purchases, and brokerage and handling (" B& H" ) expenses. See id. at 28-33, 37-42, 45-46, 48-51.
After verification at CS Wind's offices in Korea and production facility in Vietnam, Commerce calculated an average weighted dumping margin of 51.50 percent in its Final Determination. 77 Fed. Reg. at 75,988. As part of that determination, Commerce selected a different financial statement to calculate surrogate financial ratios and, in doing so, modified certain offsets to those ratios in a manner different from that advanced by the parties. See I& D Memo at 15-16, 26-27. Commerce also adjusted both normal value and the U.S. sales price to account for a discrepancy between CS Wind's reported material FOP weights and the " Packed Weight" of the wind towers, as reported on packing lists. Id. at 28-33. CS Wind filed ministerial error allegations based on both of these changes, but Commerce rejected them, asserting that the adjustments were made based on intentional methodological choices. CS Wind Request to Correct Clerical Errors, bar code 3112173-01 (Dec. 26, 2012), ECF No. 27-12 (Aug. 8, 2013); Ministerial Error Memo at 2-3, bar code 3115888-01 (Jan. 18, 2013), ECF No. 28-9 (Aug. 9, 2013). CS Wind subsequently filed suit and moved for judgment on the agency record, asserting that Commerce acted contrary to law and without substantial evidence in determining CS Wind's dumping margins. See Pl. Br. 10-57.
CS Wind presents six arguments challenging Commerce's Final Determination: 1) Commerce lacked substantial evidence and acted contrary to law when it used Global Trade Atlas (" GTA" ) import data rather than Steel India data to value steel plate; 2) Commerce impermissibly valued carbon dioxide based on GTA import data; 3) Commerce improperly calculated surrogate financial ratios by failing to offset certain expenses with related income line items; 4) Commerce acted contrary to law and without substantial evidence in rejecting the market economy input prices paid for flanges, welding wire, and wire flux; 5) Commerce impermissibly adjusted normal value based on a weight discrepancy and then incorrectly adjusted the U.S. sales price; and 6) Commerce used an inflated document preparation fee in calculating B& H expenses. See id.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction of this matter pursuant to 28 U.S.C. § 1581(c). The court will uphold Commerce's final determinations in trade remedy investigations 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).
I. Valuation of Steel Plate
In NME A.D. cases, Commerce " shall determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise." 19 U.S.C. § 1677b(c)(1)(B).
Among other costs, the factors of production include " quantities of raw materials employed." Id. § 1677b(c)(3). In calculating normal value, " the valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy country or countries considered to be appropriate by the administering authority." Id. § 1677b(c)(1)(B). Furthermore, Commerce " shall utilize, to the extent possible, the prices or costs of factors of production in one or more market economy countries that are--(A) at a level of economic development comparable to that of the nonmarket economy country, and (B) significant producers of comparable merchandise." Id. § 1677b(c)(4).
" Nowhere does the statute speak directly to any methodology Commerce must employ to value the factors of production, indeed the very structure of the statute suggests Congress intended to vest discretion in Commerce by providing only a framework within which to work." Shakeproof Assembly Components Div. of Ill. Tool Works, Inc. v. United States, 23 CIT 479, 481, 59 F.Supp.2d 1354, 1357 (1999); see QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011) (recognizing that Commerce is entitled to deference in interpreting the undefined term " best available information" ). Nonetheless, selection of the best available information must be in line with the overall purpose of the antidumping statute, which the Court of Appeals for the Federal Circuit has explained to be " determining current margins as accurately as possible." Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990); see also Lasko Metal Prods., Inc. v. United States, 43 F.3d 1442, 1443 (Fed. Cir. 1994) (" [T]here is much in the statute that supports the notion that it is Commerce's duty to determine margins as accurately as possible, and to use the best information available to it in doing so." ). In calculating normal value in the NME context, the particular aim of the statute is to determine the non-distorted cost of producing such goods. See Lasko Metal Prods., Inc. v. United States, 16 CIT 1079, 1081, 810 F.Supp. 314, 316-17 (1992).
In past investigations and reviews, Commerce has articulated the standard it uses in selecting from among competing surrogate values. See I& D Memo at 9 (citing Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, from the People's Republic of China: Final Determination of Sales at Less than Fair Value, and Affirmative Final Determination of Critical Circumstances, in Part, 77 Fed. Reg. 63,791 (Dep't Commerce Oct. 17, 2012); Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results of the First Administrative Review, 71 Fed. Reg. 14,170 (Dep't Commerce...
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