Arkema, Inc. v. United States
| Citation | 393 F.Supp.3d 1177 |
| Decision Date | 03 July 2019 |
| Docket Number | Court No. 16-00179,Slip Op. 19 - 81 |
| Parties | ARKEMA, INC., the Chemours Company FC, LLC, Honeywell International Inc., Plaintiffs, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
James R. Cannon, Jr. and Jonathan M. Zielinski, Cassidy Levy Kent (USA) LLP, of Washington, DC, for the Plaintiffs Arkema, Inc., The Chemours Company FC, LLC, Honeywell International Inc. and Plaintiff-Intervenors The American HFC Coalition, and its Members.
Patrick V. Gallagher, Jr., Attorney-Advisor, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, for Defendant United States. With him on the brief were Dominic L. Bianchi, General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.
Ned H. Marshak, Max F. Schutzman and Jordan C. Kahn, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, NY, for Defendant-Intervenors Shandong Dongyue Chemical Co. Ltd., Zhejiang Sanmei Chemical Ind. Co., Ltd., Sinochem Environmental Protection Chemicals Co., Ltd., and Zhejiang Quhua Fluor-Chemistry Co., Ltd.
Jarrod M. Goldfeder and Jonathan M. Freed, Trade Pacific PLLC, of Washington, DC, for Defendant-Intervenor National Refrigerants, Inc.
This action involves the final affirmative material injury determination by the U.S. International Trade Commission ("ITC" or the "Commission") in the antidumping duty investigation covering hydrofluorocarbon ("HFC") blends and components from the People's Republic of China ("PRC"). See Hydrofluorocarbon Blends and Components from China, 81 Fed. Reg. 53,157 (Int'l Trade Comm'n Aug. 11, 2016) ("Final Determination"); see also Views of the Commission, USITC Pub. 4629, Inv. No. 731-TA-1279 (Final) (Aug. 2016), ECF No. 33-3 ("Views"); ITC Staff Report, Inv. No. 731-TA-1279 (July 8, 2016), as revised by Mem. INV-OO-062 (July 13, 2016), ECF Nos. 33-1 & 33-2 ("Staff Report").1
Before the court are the Views of the Commission on Remand, ECF No. 98 ("Second Remand Results") filed by the ITC pursuant to Arkema, Inc. v. United States, 42 CIT ––––, 355 F. Supp. 3d 1197 (2018) (" Arkema II"), as well as the comments of Plaintiffs Arkema, Inc., The Chemours Company FC, LLC, Honeywell International Inc. and Plaintiff-Intervenors The American HFC Coalition, and its members, (collectively, "Plaintiffs"). See Pls.' & Pl.-Intervenors' Remand Comments in Opp'n to the Commission's Remand Results, ECF No. 103 ; see also Def.'s Resp. to Pls.' & Pl.-Intervenors' Remand Comments, ECF No. 107 ("Def.'s Resp."); Def.–Intervenor National Refrigerants, Inc.'s Opp'n Pls.' Cmts., ECF No. 109; Def.–Intervenors Shandong Dongyue Chemical Co. Ltd., Zhejiang Sanmei Chemical Ind. Co., Ltd., Sinochem Environmental Protection Chemicals Co., Ltd., and Zhejiang Quhua Fluor–Chemistry Co. Ltd.'s Opp'n Pls.' Cmts., ECF No. 111. The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),2 and 28 U.S.C. § 1581(c) (2012). Familiarity with the court's decisions in Arkema II and Arkema, Inc. v. United States, 42 CIT ––––, 290 F. Supp. 3d 1363 (2018) (" Arkema I"), is presumed.
In Arkema II, the court reviewed the ITC's first remand results to confirm that the agency had re-examined and provided further explanation with respect to the (1) dedicated for use and (2) differences in costs or value prongs of its semi-finished product analysis. See Arkema II, 42 CIT at ––––, 355 F. Supp. 3d at 1199. The court concluded that although the ITC had corrected certain inaccuracies identified in Arkema I, the ITC had "failed to reasonably explain its findings in the dedicated for use and differences in value prongs." Id., 42 CIT at ––––, 355 F. Supp. 3d at 1206. As a result, the court remanded the matter back to the ITC for reconsideration and further explanation of these two prongs, and if necessary, reconsideration of the agency's ultimate conclusion of its semi-finished product analysis that HFC Blends and HFC Components do not constitute a single like product. Id.
On remand, the ITC "reopened the administrative record for the purpose of requesting more precise data addressing the percentage of in-scope components that were used to produce in-scope [HFC] blends and out-of-scope refrigerant blends with respect to consideration of the ‘dedicated for use’ factor." See Second Remand Results at 3, 15–19. Additionally, the Commission provided additional explanation with respect to its analysis of the "differences in value" factor and the use of average unit values ("AUVs") in continuing to find significant "differences in value between HFC components and HFC blends." See id. at 19–20. Plaintiffs challenge the reasonableness of the ITC's findings in the Second Remand Results as to the "dedicated for use" and "differences in value" factors, as well as the reasonableness of the Commission's overarching conclusion that HFC Blends and HFC Components are distinct domestic like products.
The court sustains the Commission's "determinations, findings, or conclusions" 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). More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006) ; see also Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (). Substantial evidence has been described as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). Substantial evidence has also been described as "something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). Fundamentally, though, "substantial evidence" is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d ed. 2019). Therefore, when addressing a substantial evidence issue raised by a party, the court analyzes whether the challenged agency action "was reasonable given the circumstances presented by the whole record." 8A West's Fed. Forms, National Courts § 3.6 (5th ed. 2019).
On remand the ITC again found that the cost/value prong of its semi-finished product analysis supported treating HFC components and blends as separate like products. See Second Remand Results at 19–20. In Arkema II, the court held that the Commission's newly emphasized reliance on the ratio of the AUVs of the U.S. industry's commercial shipments of HFC components to the AUVs of the U.S. industry's commercial shipments of HFC blends as a factor in determining "differences in value" on remand may be unreasonable in light of Plaintiffs' comments. 42 CIT at ––––, 355 F. Supp. 3d at 1202. As a result, the court remanded this issue back to the agency so that the agency could address Plaintiffs' comments and provide further explanation, or if appropriate, reconsider its conclusion. Id. In the second remand, the Commission found that the value added by blending operations of the integrated producers Arkema, Chemours, and Honeywell in transforming HFC components into HFC blends ranged from [[ ]] percent to [[ ]] percent, while the percentage of value added for independent blender National was [[ ]] to [[ ]] percent. Second Remand Results at 19. The Commission also found that the AUVs of the U.S. industry's commercial shipments of HFC components to the AUVs of the U.S. industry's commercial shipments of HFC blends ranged from [[ ]] percent to [[ ]] percent. Id. at 19–20. Based on these data, the Commission determined that the record regarding the AUVs and value added by blending operations indicated that there were differences in value between HFC blends and HFC components. Id. at 20.
Plaintiffs argue that the Commission has not explained why a comparison of AUVs is superior to comparing the actual costs of producing the HFC components with the total cost of the finished product. Pls.' Cmts. at 2. In addition, Plaintiffs contend that a comparison of the AUVs of U.S. industry's commercial shipments of HFC blends and HFC components does not reflect an "apples-to-apples" comparison between the value of the components and the value of the finished HFC blends. Id. at 2–3. The court disagrees.
As the Commission explained, an underlying assumption of Plaintiffs' arguments regarding AUVs appears to be that the Commission is confined to analyzing the "differences in costs or value" factor based on the cost of goods sold ("COGS"). See Pls.' Cmts. at 2–3. Plaintiffs overlook that the Commission's approach here is consistent with that of other investigations in which it likewise examined differences in value, as well as costs, between vertically integrated products in making a finding under this factor. See, e.g., Certain Oil Country Tubular Goods from India, Korea, the Philippines, Taiwan, Thailand, Turkey, Ukraine, and Vietnam, Inv. Nos. 701-TA-499-500 and 731-TA-1215-1217 and 1219-1223 (Final), USITC Pub. 4489, at 11 (Sept. 2014), available at 2014 WL 11804767. Similarly, it was reasonable here for the Commission to consider any differences between values of HFC blends and HFC components from a revenue perspective, i.e. "differences in...
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