Calgon Carbon Corp. v. United States

• Decision Date: 13 May 2020
• Docket Number: Slip Op. 20-65,Consol. Court No. 18-00232
• Citation: 443 F.Supp.3d 1334
• Parties: CALGON CARBON CORPORATION and Cabot Norit Americas, Inc., Plaintiffs, and Carbon Activated Tianjin Co., Ltd. and Carbon Activated Corporation, et al., Consolidated Plaintiffs, v. UNITED STATES, Defendant, and Carbon Activated Tianjin Co., Ltd. and Carbon Activated Corporation, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

443 F.Supp.3d 1334

CALGON CARBON CORPORATION and Cabot Norit Americas, Inc., Plaintiffs,andCarbon Activated Tianjin Co., Ltd. and Carbon Activated Corporation, et al., Consolidated Plaintiffs,

v. UNITED STATES, Defendant,andCarbon Activated Tianjin Co., Ltd. and Carbon Activated Corporation, et al., Defendant-Intervenors.

Slip Op. 20-65

Consol. Court No. 18-00232

United States Court of International Trade.

May 13, 2020

David A. Hartquist, R. Alan Luberda, John M. Herrmann, and Melissa M. Brewer, Kelley Drye & Warren LLP, of Washington, DC, for Plaintiffs/Defendant-Intervenors Calgon Carbon Corp. and Cabot Norit Americas, Inc.

Antonia R. Soares, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Francis J. Sailer, Dharmendra N. Choudhary, and Jordan C. Khan, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Consolidated Plaintiffs/ Defendant-Intervenors Carbon Activated Tianjin Co., Ltd., Carbon Activated Corporation, Datong Juqiang Activated Carbon Co., Ltd., and Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd.

OPINION AND ORDER

Barnett, Judge:

This matter is before the court following the U.S. Department of Commerce's ("Commerce" or "the agency") final results in the tenth administrative review ("AR10") of the antidumping duty order on certain activated carbon from the People's Republic of China ("the PRC" or "China") for the period of review April 1, 2016 through March 31, 2017 ("the POR"). See Certain Activated Carbon From the People's Republic of China , 83 Fed. Reg. 53,214 (Dep't Commerce Oct. 22, 2018) (final results of antidumping duty admin. review; 2016–2017) (" Final Results "), ECF No. 29-4, and accompanying Issues and Decision Mem., A-570-904 (Oct. 16, 2018) ("I&D Mem."), ECF No. 29-5, as amended by Certain Activated Carbon From the People's Republic of China , 83 Fed. Reg. 58,229 (Dep't Commerce Nov. 19, 2018) (" Amended Final Results ") (am. final results of antidumping duty admin. review; 2016–2017).¹

Plaintiffs Calgon Carbon Corporation and Cabot Norit Americas, Inc. (together, "Calgon") challenge Commerce's selection of partial adverse facts available ("partial AFA") and surrogate values for certain of Carbon Activated Tianjin Co. Ltd.’s ("Carbon Activated") factors of production ("FOP"), specifically, coal tar and financial ratios. See Pls.’ Mot. for J. on the Agency R., ECF No. 33 and Confidential Pls.’ Rule 56.2 Mem. of Law ("Calgon's Mem."), ECF No. 34. Consolidated Plaintiffs Carbon Activated Corporation ("CAC"), Carbon Activated, Datong Juqiang Activated Carbon Co., Ltd. ("DJAC"), and Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd. ("Cherishmet") (collectively, "Carbon Activated Group")² challenge Commerce's selection of surrogate values for carbonized material and hydrochloric acid; the agency's refusal to apply Carbon Activated Group's methodology to cap the coal tar surrogate value; and the agency's adjustments to the surrogate financial ratios. See Confidential Pls.’ Mot. For J. on the Agency R. Pursuant to Rule 56.2 and Confidential Mem. of Law in Supp. of Pls.’ Mot. For J. on the Agency R. Pursuant to USCIT Rule 56.2 ("Carbon Activated Group's Mem."), ECF No. 35.

Defendant United States ("the Government") filed a response supporting Commerce's determination and arguing that Carbon Activated Group failed to exhaust administrative remedies with respect to its financial-ratios argument. See Confidential Corrected Def.’s Resp. to Pls.’ and Consol. Pls.’/Def.-Ints.’ Rule 56.2 Mot[s]. For J. Upon the Agency R. ("Gov't’s Resp."), ECF No. 59. Calgon and Carbon Activated Group each filed a response as Defendant-Intervenors, see Confidential Def.-Ints.’ Carbon Activated, DJAC and Cherishmet's Resp. to [Pls.’] Rule 56.2 Mot[ ]. for J. Upon the Agency R. ("Carbon Activated Group's Resp."), ECF No. 46; Resp. Br. of Calgon Carbon Corp. and Cabot Norit Americas, Inc. ("Calgon's Resp."), ECF No. 48, and a reply in support of their respective motions, see Pls.’ Reply Br. ("Calgon's Reply"), ECF No. 49; Confidential Consol. Pls.’ Reply to Def. and Def.-Ints.’ Resp. to Consol. Pls.’ Rule 56.2 Mot. for J. on the Agency R. ("Carbon Activated Group's Reply"), ECF No. 50.

For the following reasons, the court remands Commerce's choice of surrogate value for carbonized material and the agency's adjustments to the surrogate financial ratios. The Final Results , as amended by the Amended Final Results , are otherwise sustained.

JURISDICTION AND STANDARD OF REVIEW

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)(2012),³ and 28 U.S.C. § 1581(c)(2012). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Commerce's Selection of Partial AFA

A. Legal Framework

When "necessary information is not available on the record," or an interested party "withholds information" requested by Commerce," "fails to provide" requested information by the submission deadlines, "significantly impedes a proceeding," or provides information that cannot be verified pursuant to 19 U.S.C. § 1677m(i), Commerce "shall ... use the facts otherwise available." Id. § 1677e(a). Commerce's authority to use the facts otherwise available is subject to 19 U.S.C. § 1677m(d). Id. Pursuant to § 1677m(d), if Commerce determines that a respondent has not complied with a request for information, it must promptly inform that respondent of the nature of the deficiency and, to the extent practicable in light of statutory deadlines, provide "an opportunity to remedy or explain the deficiency." Id. § 1677m(d).

If Commerce determines that the party "has failed to cooperate by not acting to the best of its ability to comply with a request for information," Commerce "may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available." Id. § 1677e(b). As AFA, Commerce may rely on any of the following sources of information: "(A) the petition, (B) a final determination in the investigation under this subtitle, (C) any previous review under section 1675 of this title or determination under section 1675b of this title, or (D) any other information placed on the record." Id. § 1677e(b)(2).

The statute "gives Commerce substantial discretion to decide which record information to use." Nan Ya Plastics Corp. v. United States , 810 F.3d 1333, 1346 (Fed. Cir. 2016). "[T]he purpose of the adverse facts statute is ‘to provide respondents with an incentive to cooperate’ with Commerce's investigation." Maverick Tube Corp. v. United States , 857 F.3d 1353, 1360 (Fed. Cir. 2017) (quoting Essar Steel Ltd. v. United States , 678 F.3d 1268, 1276 (Fed. Cir. 2012) ). Nevertheless, AFA is not intended to result in "punitive, aberrational, or uncorroborated margins." F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States , 216 F.3d 1027, 1032 (Fed. Cir. 2000). The statute does not obligate "Commerce to select facts that reflect a certain amount of sales, yield a particular margin, fall within a continuum according to the application of particular statistical methods, or align with standards articulated in other statutes and regulations." Nan Ya , 810 F.3d at 1347.

B. Background

One of Carbon Activated's suppliers ("Supplier X")⁴ purchased activated carbon from another company and sold it to Carbon Activated as subject merchandise after performing certain processing to the merchandise. I&D Mem. at 5–6. Rather than report the factors of production for the producer that sold to Supplier X as instructed by Commerce, Carbon Activated instead reported Supplier X's purchases of activated carbon as its own input material to be assigned a surrogate value. Id. at 5. Commerce did not consider Supplier X to be the producer of the activated carbon in question and found that Carbon Activated failed to provide the appropriate factors of production as requested. Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review (May 3, 2018) ("Prelim. Decision Mem.") at 17–18, PR 214, CJA (Vol. I) Tab 2. Therefore, Commerce used AFA to determine the normal value "for the sales corresponding to the FOP data for which [S]upplier X reported subject merchandise as an input." Id. at 17.

For the Preliminary Results, see generally Certain Activated Carbon From the People's Republic of China , 83 Fed. Reg. 23,254 (Dep't Commerce May 18, 2018) ("Prelim. Results ") (prelim. results of antidumping duty admin. review and prelim. determination of no shipments; 2016–2017), PR 213, CJA (Vol I) Tab 1, Commerce selected Carbon Activated's highest calculated normal value for any CONNUM⁵ as AFA, Prelim. Decision Mem. at 18. For the Final Results , Commerce agreed with some of the concerns raised by Calgon and indicated that, as AFA, it would select the highest calculated normal value for any respondent in AR10. I&D Mem. at 6. Commerce indicated that this change would resolve concerns based on Carbon Activated's perceived ability to manipulate the selection of AFA.⁶ Id.

C. Parties’ Contentions

Calgon argues that Commerce's AFA selection fails to satisfy the statutory intent to ensure that a party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully. Calgon's Mem. at 25–28. Calgon further complains that, as a result of Commerce's selection of two mandatory respondents, Commerce's AFA methodology would allow a respondent to manipulate the record to its benefit. Id. at 27. As an...