Gold E. Paper (Jiangsu) Co. v. United States

• Decision Date: 02 July 2014
• Docket Number: Slip Op. 14–79.,Court No. 10–00371.
• Citation: 991 F.Supp.2d 1357
• Parties: GOLD EAST PAPER (JIANGSU) CO., LTD., Ningbo Zhonghua Paper Co., Ltd., and Global Paper Solutions, Plaintiffs, v. UNITED STATES, Defendant, and Appleton Coated LLC, NewPage Corp., S.D. Warren Company d/b/a Sappi Fine Paper North America, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO–CLC, Defendant–Intervenors.
• Court: U.S. Court of International Trade

991 F.Supp.2d 1357

GOLD EAST PAPER (JIANGSU) CO., LTD., Ningbo Zhonghua Paper Co., Ltd., and Global Paper Solutions, Plaintiffs,

v.UNITED STATES, Defendant,andAppleton Coated LLC, NewPage Corp., S.D. Warren Company d/b/a Sappi Fine Paper North America, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO–CLC, Defendant–Intervenors.

Slip Op. 14–79.

Court No. 10–00371.

United States Court of

International Trade.

July 2, 2014.

Daniel L. Porter and Ross E. Bidlingmaier, Curtis, Mallet–Prevost, Colt & Mosle LLP, of Washington, DC, for the plaintiffs.

Alexander V. Sverdlov, 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 Claudia Burke, Assistant Director. Of Counsel on the brief was Mykhaylo A. Gryzlov, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Terence P. Stewart and William A. Fennell, Stewart and Stewart, of Washington, DC, and Gilbert B. Kaplan, Christopher T. Cloutier, and Daniel L. Schneiderman, King & Spalding, LLP, of Washington, DC, for the defendant-intervenors.

OPINION AND ORDER

MUSGRAVE, Senior Judge:

This opinion addresses the Final Results of Redetermination Pursuant to Court Remand (“ Redetermination ”) that concern the antidumping duty investigation on Certain Coated Paper from the PRC (“ Final Determination ”).¹ Familiarity with the prior opinion on the case, 38 CIT ––––, 918 F.Supp.2d 1317 (2013), is here presumed.

Pursuant to the order of remand, the International Trade Administration, U.S. Department of Commerce (“Commerce”) undertook to (1) calculate the value of certain inputs using only market economy purchase prices, (2) use the purchase prices from South Korea and Thailand for the inputs therefrom, (3) correct certain programming errors in the targeted dumping calculation, (4) reconsider the classification of certain sales of the Gold East Companies ² as export price sales, resulting in no change of that classification, and (5) employ average-to-average comparison methodology in the targeted dumping analysis after finding that, as a result of the revisions with respect to the remanded issues, that method adequately accounted for pricing differences.

Commerce contends the Redetermination complies with the remand order. Two issues remain in dispute here, however. The domestic industry petitioners ³ arguethat Commerce's original determinations in the Final Determination of not treating the reported input prices from Thailand and South Korea as market economy purchases and of using average-to-transaction methodology as the targeting-dumping remedy for the Gold East Companies were proper and correct. Responding, the plaintiffs argue the results of remand should be sustained as is. Considering those results and comments thereon, the court concludes remand is again required.

Discussion

I. Inputs from South Korea and Thailand

The issue concerning the claimed market economy purchase (“MEP”) prices for the inputs from Thailand and South Korea was previously remanded because the record provided insufficient support for believing or suspecting the prices in question had been distorted by subsidies. See 38 CIT at ––––, 918 F.Supp.2d at 1324; see also19 U.S.C. § 1677b(c)(1) (2006); 19 C.F.R. § 351.408(c)(1) (2008). Commerce disagrees with the order either to reopen the record and make particularized findings to support the conclusion of distorted input prices or to reverse the decision not to use the input price data and concomitant recalculation of the margin. It opted for the latter under protest. Redetermination at 16.

Having reversed its prior decision, Commerce reiterates that if a country maintains broadly available, non-industry specific export subsidies, its practice has been to find the existence of such subsidies a sufficient reason to exclude the affected input from the factors of production values. Its stated position on not reopening the record is based on its inference of “the existence” of such subsidies, from which it presumes the relevant inputs to have benefitted, and it maintains it is “longstanding practice to not obtain further evidence or conduct a formal investigation to determine whether such prices are subsidized, but instead to base [the] decision only on information available to it at the time it makes its determination.” Id. (bracketing added), referencing inter alia Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China, 69 Fed.Reg. 20594 (Apr. 16, 2004), and accompanying I & D Memo (“ CCTR ”) at comment 7.

The petitioners requested during remand that Commerce reopen the administrative record. Petitioners' Letter to the Department of Commerce dated July 26, 2013, Remand Public Document (“RPDoc”) 1. Commerce declined. Commenting on the draft remand results, the petitioners raised the substance of Memorandum from the Office of Policy to DAS and Office Directors, “NME investigations: procedures for disregarding subsidized factor input prices” (Feb. 2002), which advised that all factor inputs from inter alia South Korea and Thailand should be disregarded. The petitioners pointed out that: (1) it has been Commerce's consistent position since the memorandum's publication to infer that the prices of inputs purchased from those countries are likely distorted; (2) Commerce has identified a number of subsidy programs that benefit exporters from Thailand, including the Royal Thai Government's Tax Coupon Program (“TCP”) and the Investment Promotion Act (“IPA”) (“in existence” they claim since 1977), as recently discussed in Commerce's 2013 determination on warmwater shrimp from Thailand, covering a period of investigation in 2011 that would have obviously post-dated the POI here ⁴; (3) the TCP was specifically available for the type of input in question here, and the IPA identified producers of that input as a favored industry; and (4) the court has found that the agency's determination that a company supplying an NME producer was listed as approved for promotion by the Thai Board of Investment under the IPA constituted a showing “by specific and objective evidence” that there was “reason to believe or suspect” that the supplier received subsidies in Fuyao Glass Indus. Group Co. v. United States, 29 CIT 109, 117–18, 2005 WL 280437 (2005).⁵See Petitioners' Comments on Prelim. Remand at 6–7, Remand Confidential Document (“RCDoc”) 10; RPDoc 10.

The petitioners further criticize the remand results as simply a recalculation of the margin using the MEP values on remand. They argue that without any analysis of whether those values are the best available information leading to the calculation of the most accurate margin, Commerce has given the remand order an interpretation that renders it legally erroneous. Petitioners' Comments at 9, referencing Borlem S.A.–Empreedimentos Industriais v. United States, 13 CIT 231, 234, 710 F.Supp. 797, 799 (1989) (when issuing remand orders courts must be “mindful of the doctrine of primary jurisdiction” whose “central purpose ... is to permit courts to give effect to legislative intent underlying the established regulatory scheme by referring matters involving agency expertise back to the agency so that it may, in the first instance, pass upon the issue from its unique administrative perspective”).⁶ More precisely, they contend that the record to date is devoid as to any information that would indicate the South Korean or Thai companies that supplied the Gold East Companies with inputs were not subsidized, that Commerce has not determined that the pricing data from these countries is the best available, that Fuyao Glass rejected this same approach, 30 CIT 165, 168–69, 2006 WL 345004 (2006), and that Commerce's attempt to distinguish Fuyao Glass on the basis that it ordered Commerce to “concur” or reopen the record, in contrast to the remand order in this case to “reverse” or reopen the record, does not render Fuyao Glass 's finding of inadequate explanation inapplicable. Id. at 8–9.

On the argument that the record is devoid as to information that the inputs were not subsidized, the contention assumes the validity of Commerce's presumption that they were. On that aspect, the plaintiffs argue that the question as addressed by the court is that the record lacked positive evidence of subsidization. That characterization is not entirely accurate, however. Based on the standard pursuant to which Congress directed Commerce to operate, the question to be answered was whether there was positive evidence on the record for “the belief or suspicion of” subsidization relevant to the POI, a standard that requires sufficient ( i.e., substantial) evidence on the record to give rise, prima facie, to that presumption.

On the argument that Commerce did not determine that the claimed MEP values represented the best information available, the argument has some merit,⁷ but on the more precise argument that the agency's interpretation of the remand order renders the order legally erroneous, the court does not fault an administrative attempt to follow a remand order's literal terms unless the intention thereby would be to produce a reversible result. Cf. Redetermination at 16 (“The Department does not believe that in this case the [c]ourt requires the agency to concur with its decision and thereby possibly undermine its options with respect to any potential appeal.”), citing Viraj Group, Ltd. v. United States, 343 F.3d 1371 (Fed.Cir.2003), & cf.343 F.3d at 1376 (technicality of prevailing-party status would not preclude appeal by Commerce when it “adopted under protest a contrary position forced...