Ad Hoc Shrimp Trade Action Committee v. United States

• Decision Date: 29 May 2014
• Docket Number: Court No. 12–00314.,Slip Op. 14–59.
• Citation: 986 F.Supp.2d 1362
• Parties: AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff, v. UNITED STATES, Defendant, and Minh Phu Seafood Corp., et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

986 F.Supp.2d 1362

AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff,

v. UNITED STATES, Defendant,andMinh Phu Seafood Corp., et al., Defendant–Intervenors.

Slip Op. 14–59. Court No. 12–00314.¹

United States Court of International Trade.

May 29, 2014.

Andrew W. Kentz, Jordan C. Kahn, and Nathaniel Maandig Rickard, Picard Kentz & Rowe LLP, of Washington, DC, for the Plaintiff.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the Defendant. With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Mykhaylo Gryzlov, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Matthew R. Nicely and Alexandra B. Hess, Hughes Hubbard & Reed LLP, of Washington, DC, for the Defendant–Intervenors.

OPINION

POGUE, Chief Judge:

This action arises from the sixth administrative review of the antidumping duty order covering certain frozen warmwater shrimp (the “subject merchandise”) from the Socialist Republic of Vietnam (“Vietnam”). ² Plaintiff Ad Hoc Shrimp Trade Action Committee (“AHSTAC”) ³ challenges the final results of this review, claiming that the United States Department of Commerce (“Commerce”) made unreasonable determinations when calculating the home market or “normal” comparison values that the agency used to determine whether and to what extent the subject merchandise was dumped in the U.S. market during the relevant time period.⁴ Specifically, AHSTAC contends that 1) Commerce unreasonably based its valuation of respondents' factors of production on surrogate market-economy data from Bangladesh, rather than the Philippines ⁵; and 2) Commerce unreasonably valued the relevant labor wage rates using data from a single surrogate market economy.

The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006), ⁶ and 28 U.S.C. § 1581(c) (2006).

As explained below, because Commerce's well-reasoned selection of Bangladesh as an appropriate market economy surrogate for Vietnam was supported by a reasonable reading of the record evidence, Commerce's reliance on data from Bangladesh to construct normal values in this review is affirmed. Additionally, because Commerce reasonably applied its lawful new policy when calculating surrogate labor rates in this proceeding, Commerce's labor rate valuation is also affirmed.

STANDARD OF REVIEW

The court will sustain Commerce's antidumping determinations if they are supported by substantial evidence and otherwise in accordance with law. See19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence refers to “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,” SKF USA, Inc. v. United States, 537 F.3d 1373, 1378 (Fed.Cir.2008) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) (defining “substantial evidence”)), and the substantial evidence standard of review can be roughly translated to mean “is the determination unreasonable?” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.Cir.2006) (internal quotation and alteration marks and citation omitted).

DISCUSSION

I. Surrogate Country Selection

First, AHSTAC claims that Commerce's determination to estimate respondents' market-value cost of producing the subject merchandise by relying on data from Bangladesh, rather than the Philippines, is unreasonable. AHSTAC's Br. at 9, 13–18.

A. Background

Because Commerce treats Vietnam as a non-market economy (“NME”) country, the agency determines the normal value of merchandise from Vietnam by using surrogate market economy data to calculate production costs and profit. See19 U.S.C. § 1677b(c)(1). In doing so, Commerce's valuation of the factors of production (“FOPs”) must 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 [agency].” Id. “[T]o the extent possible,” Commerce is required to use data from countries that are both economically comparable to the NME and significant producers of comparable merchandise. Id. at § 1677b(c)(4).

When choosing appropriate surrogate market economy countries, Commerce first creates a list of potential surrogates whose per capita gross national income (“GNI”) falls within a range of comparability to the GNI of the NME country (the “potential surrogates list”).⁷ Next, Commerce identifies which countries on the potential surrogates list produce merchandise comparable to the merchandise subject to the antidumping duty order.⁸ After that, the agency determines “whether any of the countries which produce comparable merchandise are ‘significant’ producers of that comparable merchandise.” ⁹ Finally, “if more than one country has survived the selection process to this point, the country with the best [FOP] data is selected as the primary surrogate country.” ¹⁰

Because Commerce's policy is to treat all of the countries that were initially placed on the potential surrogates list as “equivalent in terms of economic comparability [to the NME country],” regardless of their relative GNI proximity thereto,¹¹ a literal application of Policy 4.1 implies that Commerce will choose from among the potential surrogates that satisfy its selection criteria (i.e., economic comparability, significant production of comparable merchandise, and data availability) based solely on considerations of relative data quality.¹² This means that even very slight differences in data quality between the potential surrogates may become dispositive and automatically outweigh comparatively large differences among the candidates in terms of their economic comparability to the NME country and the magnitude of their production of comparable merchandise.¹³

In prior opinions, this Court has remanded Commerce's surrogate country selections where the agency applies Policy 4.1 in a way that arbitrarily discounts the value of relative GNI proximity (i.e., relative economic comparability) to the NME country when choosing among potential surrogates for whom quality data is available and who are significant producers of comparable merchandise. See China Shrimp AR5, ––– CIT at ––––, 882 F.Supp.2d at 1374–76;Amanda Foods (Vietnam) Ltd. v. United States, 33 CIT 1407, 1413, 647 F.Supp.2d 1368, 1376 (2009) (“Vietnam Shrimp AR2 ”).

B. Analysis

Here, AHSTAC challenges Commerce's selection of Bangladesh as the primary surrogate market economy country for Vietnam in this review. AHSTAC's Br. at 13–18. Specifically, AHSTAC contends that Commerce erred by applying Policy 4.1 in such a way that “the GNI differential between Vietnam and the potential surrogate countries was completely excluded from consideration when Commerce selected Bangladesh [in this review].” Id. at 16. Accordingly, AHSTAC argues that Commerce's surrogate country selection should be remanded on the same grounds as those supporting remand in China Shrimp AR5 and Vietnam Shrimp AR2. Id. at 16–18.

But AHSTAC mischaracterizes the record in this case. Commerce has not “completely excluded from consideration” the potential surrogates' relative GNI proximity to the GNI of Vietnam when selecting the primary surrogate country from the potential surrogates list. On the contrary, Commerce explicitly acknowledged that “India's [GNI ¹⁴] is closer to that of Vietnam” than “the relatively less similar [GNI] of the Philippines and Bangladesh.” I & D Mem. cmt. 1 at 4.¹⁵ Commerce then determined that, on the record of this review, the accuracy-enhancing value of Bangladesh's significantly superior FOP data quality outweighed the accuracy-enhancing value of India's relative GNI proximity. See id. at 5.¹⁶

Specifically, Commerce determined that the available Philippine data on shrimp (the FOP accounting for the largest portion of normal value) omitted “substantial portions of the range of sizes of shrimp sold by the respondents,” while the available Indian data on shrimp was 1) limited to a sole company within India, and thus did not “represent the broad market average [that Commerce] prefers,” and 2) provided values that were publicly ranged, and thus values that did not “represent actual, exact prices for shrimp in the Indian market.” I & D Mem. cmt. 1 at 5. The available Bangladeshi data, on the other hand, represented a broad-market average, were product-specific, contemporaneous with the POR, and represented actual transaction prices. Id. Accordingly, Commerce determined that, notwithstanding Bangladesh's lesser GNI proximity to Vietnam than that of the other two potential surrogates, “the superiority of the Bangladeshi surrogate value data compared to the Philippine and Indian surrogate value data” outweighed the benefits of using data from a country with a relatively closer GNI to that of Vietnam. ¹⁷See id. at 4–5.

Thus Commerce specifically weighed the relative GNI proximity of each potential surrogate to Vietnam's GNI against the significant differences in the quality of the relevant surrogate value data available from each of these countries. See I & D Mem. cmt. 1 at 4–5. Accordingly, contrary to AHSTAC's contentions, Commerce did in fact consider the differences in GNI among the potential surrogates. For this reason, the grounds supporting the remand orders in China Shrimp AR5 and Vietnam Shrimp AR2 are not present in this case.¹⁸

Moreover, Commerce's explanation for why the agency chose to give more weight to the superiority of the Bangladeshi surrogate value data than to India's relatively closer GNI is reasonable.¹⁹ Specifically, Commerce explained that, although India's GNI was closer to that of Vietnam's—implying a more accurate estimate for the FOP values that tend to be linearly correlated with GNI, such as wage...