Zhejiang DunAn Hetian Metal Co., Ltd. v. United States, 041910 USCIT, 09-00217

Docket Nº:09-00217
Opinion Judge:Donald C. Pogue, Judge
Party Name:ZHEJIANG DUNAN HETIAN METAL CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and PARKER-HANNIFIN CORP., Defendant-Intervenor. Slip Op. 10-41
Attorney:Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, Mark E. Pardo and Andrew T. Schutz, for the Plaintiff. Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of ...
Judge Panel:Before: Pogue, Judge
Case Date:April 19, 2010
Court:Court of International Trade
 
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ZHEJIANG DUNAN HETIAN METAL CO., LTD., Plaintiff,

v.

UNITED STATES, Defendant,

and

PARKER-HANNIFIN CORP., Defendant-Intervenor.

No. 09-00217

Slip Op. 10-41

United States Court of International Trade

April 19, 2010

Plaintiff's motion for judgment upon the administrative record denied.

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, Mark E. Pardo and Andrew T. Schutz, for the Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (L. Mischa Preheim and Carrie A. Dunsmore); and, of counsel, Joanna Theiss, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for the Defendant.

Roetzel & Andress, LPA (Donald R. Dinan and Craig A. Koenigs), for the Defendant-Intervenor.

Before: Pogue, Judge

OPINION AND ORDER

Donald C. Pogue, Judge

This case involves a challenge to the United States Department of Commerce's ("Commerce" or "the Department") data choices and adjustments in its calculation of an antidumping ("AD") duty on goods produced in a non-market economy ("NME"). Specifically, Plaintiff Zhejiang DunAn Hetian Metal Co., Ltd. ("DunAn") challenges the Department's data selection, use of partial adverse facts available ("AFA"), and scrap offset methodology in Commerce's final affirmative determination AD duty order regarding frontseating service valves ("FSVs") from the People's Republic of China ("China")1

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). Currently before the court is DunAn's USCIT R. 56.2 Motion for Judgment Upon the Agency Record.

Standard of Review

The statutory provision which supplies the standard for review for Commerce's final determination requires that the court shall "hold unlawful any [agency] determination, finding, or conclusion found . . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." Tariff Act of 1930, § 516A(b) (1) (B) (i), 19 U.S.C. § 1516a (b) (1) (B) (i) (2006) .2 See also 19 U.S.C. §§ 1516a(a) (2) (A) (i) (II), 1516a(a) (2) (B) (i); Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) .

Discussion

By its instant motion, DunAn seeks (1) recalculation of the Indian3 import statistics used to value brass bar4; (2) replacement of the labor wage rate -- calculated in accordance with the Department's regulatory regression analysis5 -- with an Indian labor rate of $0.21 per hour; (3) reversal of the Department's application of partial AFA to DunAn's December 2007 U.S. sales data and inventory carrying costs ("ICC")6; and (4) revision of the Department's methodology for recognizing the value of DunAn's recycled brass scrap.

The court will, in turn, analyze each of these values.

A. Commerce's Selection of a Value for Brass Bar

Commerce's selection of a value for brass bar is governed by 19 U.S.C. § 1677b(c), which requires that Commerce choose data that is the "best available information" on the record.7 Here, Commerce selected an average unit value ("AUV") derived from the World Trade Atlas ("WTA")8 Indian import statistics for the POI. DunAn does not challenge Commerce's use of the WTA data set in general or the particular HTS classification used.9 Rather, DunAn argues that some aspects of the WTA data set are incorrect and should be eliminated. Specifically, DunAn challenges the sufficiency of the evidence to support Commerce's inclusion, in the WTA data, of brass bar values for Indian imports from France, Japan, and the United Arab Emirates ("UAE") .10

The relevant WTA data for HTS 7407.21.10 "Bars of Brass" are as follows:

Country

Quantity (Kgs)

Value (Rupees)

AUV

Sri Lanka

44, 720

7, 990, 000

178.67

Malaysia

24, 262

8, 031, 000

331.01

UAE

8, 000

3, 652, 000

456.50

Germany

4, 526

2, 581, 000

570.26

Japan

3, 911

1, 574, 000

402.45

United Kingdom

3, 380

1, 779, 000

526.33

Denmark

1, 300

541, 000

416.15

Netherlands

1, 042

501, 000

480.81

Singapore

392

487, 000

1, 242.35

France

261

374, 000

1, 432.95

United States

90

78, 000

866.67

TOTAL

91, 884

27, 588, 000

300.25

Petitioner's Surrogate Value Comments Regarding Frontseating Service Valves from the People's Republic of China, A-570-933, POI 7/01/07 - 12/31/07 (Sept. 29, 2008), Admin. R. Pub. Doc. 106, 11 at Ex. 1A. See also Zhejiang DunAn Heitan's First Surrogate Value Submission, A-570-933, POI 7/01/07 - 12/31/07 (Sept. 29, 2008), Admin. Pub. Doc. 107 ("DunAn's First Surrogate Value Submission"), at Ex. 3A. See also Antidumping Duty Investigation of Frontseating Service Valves from the People's Republic of China: Factor Valuations for the Final Determination, A-570-933, POI 7/1/07 - 12/31/07 (Mar. 6, 2009), Admin. R. Pub. Doc. 227, at Attach. 3 (providing HTS classification for "Of copper-zinc base alloys (brass) . . . Bars" as HTS 7407.21.10).

Failing to remove imports from France, Japan, and the UAE constituted error, according to DunAn, because other record evidence, i.e., data from Infodrive India, 12 demonstrated that shipments from the above countries did not consist of brass13 bar, and, thus, that WTA data as to the UAE, France, and Japan were flawed and unreliable.

The Infodrive India data as to France, Japan, and the UAE14 are as follows:

HTS Code

Actual Product Description

Origin

Qty (Kgs)

Value (Rupees)

AUV

74072110

Barre B33/25 H Q1.5MM (Copper Bar)

France

12.0

57091.02

4757.59

74072110

Bronze Bars (Aircraft Raw Materials for Defence Use) P.O.NO: 4160375

France

161.0

316566.20

1966.25

74072110

Beryllium Copper Flat Bar (TK46267)

Japan

3589.5

1444719.91

402.49

74072110

Beryllium Copper Round Bar (TK46268)

Japan

322.0

129600.17

402.49

74072110

Cupro Nickel Bar

UAE

8110.0

3652206.74

450500.40

Second Surrogate Value Submission of Zhejiang DunAn Heitan ("DunAn"): Investigation of Frontseating Service Valves from the People's Republic of China, A-570-933, POI 7/1/07 - 12/31/07 (Dec. 15, 2008), Admin. R. Pub. Doc. 189 ("DunAn's Second Surrogate Value Submission"), at Ex. 2. DunAn stresses that copper bar, bronze15 bar, beryllium16 copper bar, and cupronickel17 bar are distinct from brass bar.18

As a result, the dispute between the parties on this issue turns on Commerce's assessment of these Infodrive data. Explaining its decision not to exclude these imports, Commerce stated:

we find that the Infodrive data contain insufficient product information in the description of the line items to enable the Department to make a definitive determination that these line items are misclassified. Specifically, the product description in the Infodrive data are such that, given the dependency upon the chemical make-up of the underlying products, they could be properly classified within the Indian HTS category where they are, or in the category addressed by DunAn. Thus, the Department cannot determine, due to lack of product detail, i.e., chemical properties, the precise chemical make-up of these line items. Accordingly, without clear evidence to the contrary, the Department will not speculate that these materials have been misclassified. Therefore, . . . the Department has determined to include imports from Japan, France, and the UAE in calculating the surrogate value for brass bar in the final determination because the record evidence does not demonstrate that the imports from these countries were misclassified.

Decision Mem, at 21.19

DunAn argues that Commerce should have accorded more weight to the Infodrive India data and that Commerce should have, based on these data, eliminated the three countries' data as unreliable. DunAn in addition contends that it is irrelevant which HTS classification applies; "[t]he issue is not whether these shipments have been properly classified within the HTS [but rather] is whether these shipments are representative of the factor input Commerce is attempting to value." (Pl.'s Br. 13.) DunAn offered record evidence to demonstrate that bronze, beryllium copper, and cupronickel have different chemical properties and have different uses than brass. (See id. 12-13;) DunAn's Second Surrogate Value Submission at Exs. 3A-3E. Therefore, according to DunAn, because the data from these three countries distorted the resulting brass bar surrogate value and because the Department's usage of that WTA data is not a selection of the "best available" evidence, Commerce's determination is unsupported by substantial evidence.20

The government responds that the complete WTA data set under HTS category 7407.21.10 was the best available information on the record. Commerce chooses surrogate values on a case-by-case basis, and prefers to use "public, country-wide data." (Def.'s Opp'n to Pl's Mot. for J. Upon the Agency R. ("Def.'s Br.") 27 (quoting Mittal Steel Galati S.A. v. United States, 31 CIT 1121, 1124, 502 F.Supp.2d 1295, 1298 (2007)) .) Consequently, the government argues, Commerce used "the full WTA data set, with the exception of imports from non-market economy countries, countries known to have country-wide export subsidies, or unidentified countries because [the data] are publicly-available, broad-based, product-specific, tax-exclusive and contemporaneous." (Id. (citing Decision Mem, at 22-23) .) In addition, the government points out that Commerce did in fact examine the Infodrive India data, but did not find them definitive, particularly because...

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