Artisan Mfg. Corp. v. United States, Slip Op. 14–52.

• Citation: 978 F.Supp.2d 1334
• Decision Date: 05 May 2014
• Docket Number: Court No. 13–00169.,Slip Op. 14–52.
• Parties: ARTISAN MANUFACTURING CORP. and Shenzen Kehuaxing Industrial Ltd., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

978 F.Supp.2d 1334

ARTISAN MANUFACTURING CORP. and Shenzen Kehuaxing Industrial Ltd., Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 14–52.

Court No. 13–00169.

United States Court of

International Trade.

May 5, 2014.

Daniel L. Porter and Ross Bidlingmaier, Curtis, Mallet–Prevost, Colt & Mosle LLP, Washington, D.C., for plaintiffs.

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

OPINION AND ORDER

STANCEU, Judge:

Plaintiffs Artisan Manufacturing Corporation (“Artisan”) and Shenzen Kehuaxing Industrial Ltd. (“Kehuaxing”) contest a determination that the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department”) issued upon concluding an antidumping duty investigation of drawn stainless steel sinks from the People's Republic of China (“China” or the “PRC”). Plaintiffs claim that Commerce unreasonably rejected as untimely a submission—specifically, a response to the Department's “quantity and value,” or “Q & V,” questionnaire—that Kehuaxing and Artisan filed the day after the due date and accompanied with a request for a one-day extension. Plaintiffs seek reversal of the Department's decision, made in response to the untimely filing, to assign Kehuaxing a margin at the 76.53% rate selected by Commerce for application to producer/exporters that had not shown independence from the government of China. The court holds that Commerce abused its discretion in assigning Kehuaxing this rate as a sanction for missing the filing date for the response to the Q & V questionnaire.

I. Background

Plaintiffs contest the decision (the “Final Determination”) in Drawn Stainless Steel Sinks From the People's Republic of China: Investigation, Final Determination, 78 Fed.Reg. 13,019 (Int'l Trade Admin. Feb. 26, 2013) (“ Final Determination ”). Based on a period of investigation of July 1, 2011 through December 11, 2011, Commerce found in the Final Determination that drawn stainless steel sinks from China are being, or are likely to be, sold in the United States at less than fair value. Id. at 13,019.

Plaintiff Kehuaxing is a Chinese producer and exporter of drawn stainless steel sinks and plaintiff Artisan is a U.S. importer of Kehuaxing's products. Compl. ¶ 3 (May 1, 2013), ECF No. 6. Both plaintiffs participated as parties in the antidumping duty investigation. Id.

A. General Background on the Final Determination

Commerce selected for individual investigation as “mandatory respondents” two Chinese producer/exporters, Guangdong Dongyuan Kitchenware Industrial Co., Ltd. (“Dongyuan”) and a combined entity Commerce identified as consisting of Zhongshan Superte Kitchenware Co., Ltd. and a related invoicing company, Foshan Zhaoshun Trade Co., Ltd. (collectively referred to as “Superte/Zhaoshun”). Final Determination, 78 Fed.Reg. at 13,019 n. 2. Commerce assigned weighted average dumping margins of 27.14% to Dongyuan and 39.87% to Superte/Zhaoshun, respectively. Id. at 13,023. Following its practice for antidumping duty (“AD”) investigationsinvolving nonmarket economy (“NME”) countries, Commerce assigned a simple average of those two margins, 33.51%, as an antidumping duty rate to nineteen non-investigated producer/exporters that, like the mandatory respondents, had demonstrated “both de jure and de facto absence” of Chinese government control and had cooperated in the investigation by responding to the Department's requests for information. Id. at 13,021, 13,023. Commerce referred to the nineteen producer/exporters and the mandatory respondents collectively as the “Separate Rate Companies.” Id. at 13,020.

In the Final Determination, Commerce stated that “[b]ecause the Department begins with the presumption that all companies within an NME country are subject to government control, and because only the mandatory respondents and certain Separate Rate Applicants have overcome that presumption, the Department is applying a single AD rate to all other exporters of subject merchandise from the PRC.” Id. at 13,022. In selecting this rate, Commerce invoked its authority to apply “adverse facts available” (“AFA”) under section 776(b) of the Tariff Act of 1930 (“Tariff Act”), 19 U.S.C. § 1677e(b), according to which Commerce, in selecting from among the “facts otherwise available,” may use an inference adverse to the interests of a party that has failed to cooperate by not acting to the best of its ability in responding to a request for information.¹Final Determination, 78 Fed.Reg. at 13,022. “In determining a rate for AFA, the Department's practice is to select a rate that is sufficiently adverse ‘as to effectuate the purpose of the adverse facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.’ ” Id. (citation omitted).

Commerce selected as its AFA rate “the highest petition AD margin,” 76.53%, which it designated the “PRC-wide rate” for application to all Chinese producer/exporters Commerce determined not to have established independence from control of the government of China. Id. Commerce took this action based on its findings that “the Department has found that these PRC exporters and/or producers are part of the PRC-wide entity,” that “the PRC-wide entity did not provide the Department with requested information,” and that “the PRC-wide entity has failed to cooperate to the best of its ability.” Id. Commerce listed Kehuaxing among the companies subject to the 76.53% PRC-wide rate. Id.

B. Circumstances of the Department's Assigning the 76.53% PRC–Wide Rate to Kehuaxing

The notice initiating the antidumping duty investigation (“Initiation Notice”) announced that “[t]he Department will request quantity and value information from all known exporters and producers identified with complete contact information in the Petition.” Drawn Stainless Steel Sinks from the People's Republic of China: Initiation of Antidumping Duty Investigation, 77 Fed.Reg. 18,207, 18,210 (Int'l Trade Admin. Mar. 27, 2012) (“ Initiation Notice ”). Commerce explained in the Initiation Notice that “[t]he quantity and value data received from Chinese exporters/producers will be used as the basis for selecting the mandatory respondents.” Id. The notice instructed that “[t]he Department requires that the respondents submit a response to both the quantity and value questionnaire and the separate-rate application by the respective deadlines, as discussedbelow and in the Separate Rate section, in order to receive consideration for separate-rate status,” id., and specified that “[t]he quantity and value questionnaire must be submitted by all Chinese exporters/producers no later than April 11, 2012, 21 days after the signature date of this Federal Register notice,” id. (emphasis in original). The Initiation Notice announced that the separate-rate application (to which the notice also referred as a “separate-rate status application”) would be available on a Department website as of the date of publication of the Initiation Notice. Id.

Commerce sent Kehuaxing a Q & V questionnaire accompanied by a cover letter dated March 22, 2012. See Excerpts of Q & V Questionnaire & Instructions (“ Q & V Questionnaire ”), in Resp't Pls.' App. to their Mot. for J. on the Agency R., tab 8 (Sept. 18, 2013), ECF No. 18 (“Pls.' App.”). Plaintiffs submitted their response to the Q & V questionnaire on April 12, 2012, the day following the due date. Artisan & Kehuaxing's Q & V Submission 1 (“ Artisan & Kehuaxing's Q & V Submission ”), in Pls.' App., tab 2. In a cover letter accompanying their questionnaire response, Artisan and Kehuaxing acknowledged the April 11, 2012 due date and explained that “[d]ue to an inadvertent error, this response is being filed before 9:00 a.m. on April 12, 2012, the day after the deadline.” Id. at 2. The letter included the following request:

We respectfully request that the Department accept the quantity and value questionnaire as filed. While recognizing that it has been filed after the deadline, the response is being filed before business hours on the following day, meaning that no additional burden or undue delay is being imposed on the Department. We regret the inadvertent error and urge the Department to include Artisan Manufacturing Corporation and Shenzen Kehuaxing Industrial Ltd. in the quantity and value analysis.

Id. In a letter dated April 20, 2012, Commerce responded that “[a]fter considering Artisan's and Kehuaxing's explanation, we find that it would not be appropriate to accept this late filing because the deadline for filing a Q & V with the Department had already passed.” ²Letter Rejecting

Artisan & Kehuaxing's Submission

1 (Admin.R.Doc. No. 92). The letter further notified Artisan and Kehuaxing that “[n]o copy of the document will remain on the record because, pursuant to 19 CFR 351.104(a)(2)(iii), the official record of the proceeding should not include any document that the Department returns to the submitter as untimely filed.” Id.

Commerce later notified Kehuaxing that it also was rejecting Kehuaxing's timely-filed separate-rate application. As the reason for this rejection, Commerce explained that “[b]ecause a timely response to the Q & V Questionnaire is necessary to be considered for receipt of a separate rate, we have not accepted Kehuaxing's separate rate questionnaire response,” adding that “[w]e have removed it from the record and will not rely upon it in our investigation.” Letter Rejecting Kehuaxing's Separate Rate Appl. 2 (June 6, 2012) (Admin.R.Doc. No. 186).

In a letter dated June 11, 2012, Kehuaxing requested that Commerce reconsider the decision to reject Kehuaxing's...