Calcutta Seafoods Pvt. Ltd. v. United States

• Decision Date: 03 February 2021
• Docket Number: Slip Op. 21-11,Court No. 19-00201
• Citation: 495 F.Supp.3d 1318
• Parties: CALCUTTA SEAFOODS PVT. LTD., Bay Seafood Pvt. Ltd., and Elque & Co., Plaintiffs, v. UNITED STATES, Defendant, and Ad Hoc Shrimp Trade Action Committee, Defendant-Intervenor.
• Court: U.S. Court of International Trade

495 F.Supp.3d 1318

CALCUTTA SEAFOODS PVT. LTD., Bay Seafood Pvt. Ltd., and Elque & Co., Plaintiffs,

v.UNITED STATES, Defendant,andAd Hoc Shrimp Trade Action Committee, Defendant-Intervenor.

Slip Op. 21-11

Court No. 19-00201

United States Court of International Trade.

February 3, 2021

Neil R. Ellis, Law Office of Neil Ellis PLLC, of Washington, DC, argued for plaintiffs. With him on the brief were Rajib Pal and Alexandra S. Mauever of Sidley Austin LLP, of Washington, DC.

Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of Counsel Brandon J. Custard, Senior Attorney, Office of Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce. With them on the post argument submission was Jeffrey Bossert Clark, Acting Assistant Attorney General.

Zachary J. Walker, Picard Kentz & Rowe LLP, of Washington, DC, argued for defendant-intervenor. With him on the brief was Nathaniel Maandig Rickard.

OPINION

Katzmann, Judge:

This case deals with the interpretation and application of a statute, the extent to which thereunder small companies are entitled to additional assistance in antidumping ("AD") reviews or investigations, the process by which assistance can be triggered, and how the U.S. Department of Commerce ("Commerce") should account for the difficulties those small companies may encounter. At issue is Commerce's AD review of duties on certain frozen warmwater shrimp from India. Certain Frozen Warmwater Shrimp From India: Final Results of Antidumping Duty Administrative Review; 2017–2018, 84 Fed. Reg. 57,847 (Dep't Commerce Oct. 29, 2019) ("Final Results"). Plaintiffs Calcutta Seafoods Pvt. Ltd., Bay Seafood Pvt. Ltd., and Elque & Co. (collectively, "the Elque Group"), exporters of frozen warmwater shrimp from India, initiated this suit against Defendant the United States ("Government") to challenge the final results issued by Commerce in the thirteenth administrative review of the AD duty order covering certain frozen warmwater shrimp from India. Pls.’ Mot. For J. on the Agency R. at 2, Feb. 26, 2020, ECF No. 20 ("Pls.’ Br."). Commerce imposed an AD duty rate of 110.90% for Plaintiffs based on the application of facts available with adverse inferences ("AFA"). Mem. From J. Maeder to J. Kessler re: Issues and Decision Mem. for the Final Results of the 2017–2018 Antidumping Duty Administrative Review of Certain Frozen Warmwater Shrimp from India at 19 (Dep't Commerce Oct. 21, 2019), P.R. 188 ("IDM").

Plaintiffs challenge Commerce's imposition of this rate on the basis that: (1) Commerce did not provide adequate assistance to Plaintiffs as a small company subject to 19 U.S.C. § 1677m(c)(2) ; (2) Commerce improperly applied AFA neither supported by substantial evidence nor in accordance with law as required by 19 U.S.C. § 1677e(b) ; and (3) even if Commerce properly applied AFA, the selected rate was unsupported by substantial evidence and was not otherwise in accordance with the law under 19 U.S.C. § 1677e(d). Pls.’ Br. at 2–4. The Government and Defendant-Intervenor Ad Hoc Shrimp Trade Action Committee ("AHSTAC") ask the court to sustain Commerce's determination. Def.’s Resp. to Pls.’ Mot. For J. on the Agency R., May 1, 2020, ECF No. 24 ("Def.’s Br."); Def.-Inter. AHSTAC's Resp. to Pls.’ Mot. For J. on Agency R., May 1, 2020, ECF No. 23 ("Def.-Inter.’s Br."). The court holds that Commerce unlawfully applied AFA to the Elque Group without providing it adequate assistance or considering its difficulties as a small company and remands to Commerce.

BACKGROUND

I. Legal Background

Congress's AD statute empowers Commerce to impose remedial duties on imported goods when those goods are sold in the United States for less than their fair market value, and when the International Trade Commission determines that the domestic industry is thereby "materially injured, or ... is threatened with material injury." See 19 U.S.C. § 1673(2)(A)(i)–(ii) ; Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304, 1306 (Fed. Cir. 2017). Dumping constitutes unfair competition because it permits foreign producers to undercut domestic companies by selling products below their fair market value. Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1046 (Fed. Cir. 2012). To address the harmful impact of such unfair competition, Congress enacted the Tariff Act of 1930, which empowers Commerce to investigate potential dumping and, if necessary, to issue orders instituting duties on subject merchandise. Id. at 1047. In these instances, "the amount of the [AD] duty is ‘the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise.’ " Shandong Rongxin Imp. & Exp. Co. v. United States, 42 CIT ––––, ––––, 331 F. Supp. 3d 1390, 1394 (2018), aff'd, 779 F. App'x 744 (Fed. Cir. 2019) (quoting 19 U.S.C. § 1673 ). Upon request, Commerce may conduct an administrative review of its AD duty determination and recalculate the applicable rate. 19 U.S.C. § 1675(a)(1)–(2) ; see Shandong Rongxin, 331 F. Supp. 3d at 1394.

In determining whether a good is being sold in the United States at less than fair value, Commerce may issue questionnaires to selected mandatory respondents¹ in order to gather information for its review. See 19 U.S.C. § 1677f-1(c)(2)(A)–(B). If Commerce deems a response to its request deficient, then Commerce "shall promptly inform the person submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that person with an opportunity to remedy or explain the deficiency in light of the time limits established for the completion of investigations or reviews under this subtitle." Id. § 1677m(d). Commerce may provide this notice and the opportunity to remedy deficiencies through issuance of a supplemental questionnaire.

Additionally, 19 U.S.C. § 1677m(c) addresses the possibility that respondents may have difficulty fulfilling Commerce's requests for information during an investigation or review. Under section 1677m(c)(1), upon prompt notification by a party, Commerce must consider the interested party's ability to provide the requested information and modify requirements to avoid imposing an unreasonable burden. Id. § 1677m(c)(1). Under section 1677m(c)(2), Commerce must consider difficulties experienced by parties, "particularly small companies," and "provide to such interested parties any assistance that is practicable in supplying such information." Id. § 1677m(c)(2).

Pursuant to 19 U.S.C. § 1677e, if a party fails to satisfactorily respond to Commerce's requests for "necessary information" to calculate a dumping margin by (1) withholding requested information, (2) failing to provide information by the submission deadlines or in the form or manner requested, (3) significantly impeding a proceeding, or (4) providing information that cannot be verified, Commerce shall use facts otherwise available to calculate the margin. Id. § 1677e(a)(1)–(2). Furthermore, Commerce may make a separate determination that the respondent failed to cooperate and apply AFA. Id. § 1677e(b)(1)(A). A respondent does not cooperate to the "best of its ability" when it fails to "put forth its maximum effort to provide Commerce with full and complete answers to all inquiries." Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed.Cir.2003). The Federal Circuit in Nippon Steel explained that Commerce must make an objective and subjective determination regarding respondent's efforts in assessing whether it acted to the best of its ability. Id. at 1382–83. The Federal Circuit clarified that this test applies "regardless of motivation or intent" on the part of the respondent, but that it "does not condone inattentiveness, carelessness, or inadequate record keeping." Id.

After making a finding that AFA is appropriate, Commerce may then select an AD rate using the adverse inferences against respondent. See 19 U.S.C. § 1677e(d)(2). The statute explicitly provides Commerce with the discretion to select among any dumping margins "under the applicable [AD] order," including "the highest such rate or margin." Id. § 1677e(d)(1)(B)–(2). However, in selecting an AFA rate, Commerce must "consider the totality of the circumstances in selecting an AFA rate, including, if relevant, the seriousness of the conduct of the uncooperative party." BMW of N. Am. LLC v. United States, 926 F.3d 1291, 1301–02 (Fed. Cir. 2019).

II. Factual Background

A. Administrative Review of the Elque Group

On April 16, 2018, Commerce published a notice of initiation regarding its administrative review of the AD duty order covering warmwater shrimp from India. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 83 Fed. Reg. 16,298, 16,300 –04 (Dep't Commerce Apr. 16, 2018). After first selecting two of the largest exporters who subsequently withdrew their review requests, and after receiving additional withdrawals from 234 other companies, Commerce selected Calcutta Seafoods and Magnum Sea Foods as mandatory respondents. See Mem. from B. Bauer to M. Skinner, re: Selection of New Respondents for Individual Review (Aug. 7, 2018), P.R. 57.

Commerce issued an initial AD duty questionnaire to Calcutta Seafoods and Magnum Sea Foods. Letter from Commerce to Calcutta Seafoods, re: Request for Information (Aug. 9, 2018), P.R. 59 ("Section D Questionnaire"). Based on Calcutta Seafoods’ initial responses, Commerce collapsed Calcutta Seafoods, Bay Seafood, and Elque & Co. as one entity, the Elque Group, for the purpose of the administrative review. Mem. from B. Bauer to M. Skinner, re: Whether to Collapse Bay Seafood Pvt. Ltd., Calcutta Seafoods Pvt. Ltd., and Elque & Co. in the 2017–2018 Antidumping Duty Administrative Review of Certain Frozen...