Camau Frozen Seafood Processing Import Export Corp. v. United States

• Decision Date: 15 November 2012
• Citation: 880 F.Supp.2d 1348
• Parties: CAMAU FROZEN SEAFOOD PROCESSING IMPORT EXPORT CORPORATION, et al., Plaintiffs, v. UNITED STATES, Defendant, and Ad Hoc Shrimp Trade Action Committee and American Shrimp Processors Association, Defendant–Intervenors.
• Court: U.S. Court of International Trade

880 F.Supp.2d 1348

CAMAU FROZEN SEAFOOD PROCESSING IMPORT EXPORT CORPORATION, et al., Plaintiffs,

v. UNITED STATES, Defendant,andAd Hoc Shrimp Trade Action Committee and American Shrimp Processors Association, Defendant–Intervenors.

United States Court of

International Trade.

Slip Op. 12–137.

Court No. 11–00399.¹

Nov. 15, 2012.

Recognized as Invalid

19 C.F.R. § 351.408(c)(3).

Matthew R. Nicely, David S. Christy, and David J. Townsend, Thompson Hine LLP, of Washington, DC, on behalf of Plaintiffs Camau Frozen Seafood Processing Import Export Corp.; Minh Phu Seafood Corp.; Minh Phat Seafood Co., Ltd.; Minh Qui Seafood Co., Ltd.; and Viet I–Mei Frozen Foods Co., Ltd.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division,U.S. Department of Justice, of Washington, DC, on behalf of Defendant. With him on the briefs were Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director; and Patricia M. McCarthy, Assistant Director. Of counsel on the briefs was Jonathan Zielinski, Senior Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Andrew W. Kentz, Jordan C. Kahn, and Nathaniel M. Rickard, Picard Kentz & Rowe LLP, of Washington, DC, for the Defendant–Intervenor Ad Hoc Shrimp Trade Action Committee.

Terence P. Steward, Geert M. De Prest, Elizabeth J. Drake, Jumana M. Misleh, and Stephanie R. Manaker, Stewart and Stewart, of Washington, DC, and Edward T. Hayes, Leake & Andersson, LLP, of New Orleans, LA, for the Defendant–Intervenor American Shrimp Processors Association.

OPINION

POGUE, Chief Judge:

This is a consolidated action seeking review of determinations made by the United States Department of Commerce (“Commerce”) in the fifth administrative review of the antidumping duty order covering certain frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”).² Currently before the court are motions for judgment on the agency record submitted by Respondents Camau Frozen Seafood Processing Import Export Corp., et al., (collectively “Respondents”) and Petitioner Ad Hoc Shrimp Trade Action Committee (“AHSTAC”). Respondents challenge Commerce's decision to zero in this administrative review after it ceased zeroing in investigations; AHSTAC challenges Commerce's choice of Bangladesh as the primary surrogate country and Commerce's decision to value labor using only data from the Bangladesh Bureau of Statistics.

As explained below, the court (1) affirms Commerce's explanation for continuing to zero in reviews but not in investigations; (2) does not reach Commerce's choice of Bangladesh as the primary surrogate country; and (3) remands Commerce's decision to value labor using only data from the Bangladesh Bureau of Statistics.

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006)³ and 28 U.S.C. § 1581(c) (2006).

BACKGROUND

Commerce has designated Vietnam as a non-market economy country (“NME”). When investigating potentially dumped merchandise from an NME, Commerce considers the NME data for measuring normal value ⁴ to be unreliable. Therefore, Commerce calculates normal value for merchandise from an NME using surrogate values for factors of production drawn from a market economy country. 19 U.S.C. § 1677b(c)(1). In general, Commerce prefers to draw all surrogate values from a single surrogate country (the “primary surrogate country”). Import Administration Policy Bulletin No. 04.1, Non–Market Economy Surrogate Country Selection Process (Mar. 1, 2004), available at http:// ia. ita. doc. gov/ policy/ bull 04– 1. html (last visited Nov. 15, 2012) (“Policy Bulletin 04.1”). In this review, Commerce chose Bangladesh as the primary surrogate country and rejected AHSTAC's preferred choice, the Philippines. I & D Mem. cmt. 1 at 3–5.

In the past, Commerce has deviated from its general surrogate value policy when choosing surrogate values for labor. Rather than drawing surrogate labor values from the primary surrogate country, Commerce historically valued labor by averaging labor values from multiple countries. While this review was pending, Commerce changed its policy to value labor solely on the basis of data from the primary surrogate country. Antidumping Methodologies in Proceedings Involving Non–Market Economies: Valuing the Factor of Production: Labor, 76 Fed. Reg. 36,092 (Dep't Commerce June 21, 2011) (“ New Labor Methodology ”). In light of its new policy, Commerce sought additional comments from interested parties on how to value labor in the instant review. I & D Mem. at 2. After reviewing the comments, Commerce chose to value labor consistent with the New Labor Methodology by using data solely from the primary surrogate country, Bangladesh. Id. at cmt. 2.I at 21–24.

Furthermore, when calculating the weighted average dumping margin in this review, Commerce chose to zero dumping margins with negative values. Id. at cmt. 3 at 32.⁵ At the time of this review, Commerce's practice of zeroing in administrative reviews differed from its practice of offsetting in antidumping investigations, where it allowed dumping margins with negative and positive values to offset each other when calculating the weighted average dumping margin. Id. at 30–32.⁶ However, in February of this year, Commerce published a new policy regarding the use of zeroing in administrative reviews. Antidumping Proceedings: Calculation of the Weighted–Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification, 77 Fed. Reg. 8101 (Feb. 14, 2012) (“ Final Modification ”). In the Final Modification, Commerce stated that

the Department is adopting the proposed changes to its methodology for calculating weighted-average margins of dumping and antidumping duty assessment rates to provide offsets for non-dumped comparisons when using monthly [average-to-average] comparisons in reviews, in a manner that parallels the WTO-consistent methodology the Department currently applies in original antidumping duty investigations.

Id. at 8102. Therefore, as of April 16, 2012, Commerce ceased zeroing, in general, consistent with the policy announced in the Final Modification.

STANDARD OF REVIEW

When reviewing Commerce's decisions in administrative reviews of antidumping duty orders, the Court “shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Zeroing

Turning first to the issue of zeroing, Respondents challenge Commerce's decision to employ zeroing in administrative reviews but not in investigations. But the explanation Commerce provided in this review is the same as that previously held to be both reasonable and consistent with the Court of Appeals for the Federal Circuit's decisions in Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed.Cir.2011) and JTEKT Corp. v. United States, 642 F.3d 1378 (Fed.Cir.2011). See Grobest II, 36 CIT at ––––, 853 F.Supp.2d at 1356–62;see also Far E. New Century Corp. v. United States, 36 CIT ––––, 867 F.Supp.2d 1309, 1311–12 (2012). In Grobest II, the court found the relevant statute ambiguous and Commerce's rationale for employing differing methodologies in investigations and reviews to be a reasonable interpretation of the statute. Grobest II, 36 CIT at ––––, 853 F.Supp.2d at 1358–62.

Respondents also raise an issue in this case that was not decided in Grobest II. Specifically, Respondents challenge Commerce's reliance on the goal of identifying masked dumping as a basis for Commerce's continued use of zeroing in administrative reviews. Respondents argue that it is inappropriate for Commerce to rely on this rationale in light of Commerce's new policy of not zeroing in administrative reviews.⁷ Mem. of Law Supp. Pls.' Rule 56.2 Mot. J. Agency R. at 15, ECF No. 40 (“Resp'ts' Br.”).

Respondents focus on language in the Final Modification where Commerce states that “the Department disagrees with those comments that suggest it is not capturing 100 percent of the dumping” and that “the Department does not agree that the potential for masked dumping means that [average-to-average] comparisons are unsuitable as the default basis for determining the weighted-average dumping margins ... in reviews.” Final Modification, 77 Fed. Reg. at 8106, 8104; Resp'ts' Br. at 15–16.⁸ Taken together, Respondents argue, these statements show that Commerce concedes it can capture 100 percent of dumping without zeroing; therefore, masked dumping is not a reasonable concern that can support alternative methodologies in investigations and reviews.

Respondents, however, do not recognize the full extent of Commerce's reasoning in the Final Modification. First, Commerce does not argue that it can capture 100 percent of dumping with its new average-to-average offsetting methodology for reviews; rather, Commerce argues that it “will capture 100 percent of the dumping that is determined to exist pursuant to this methodology.” Final Modification, 77 Fed. Reg. at 8106 (emphasis added). Furthermore, Commerce has not abandoned its concern about masked dumping. On the contrary, Commerce has changed its approach to masked dumping by deciding to pursue masked dumping on a case-by-case basis. Id. at 8104 (“Similar to the conduct of original investigations, when conducting reviews under the modified methodology, the Department will determine, on a case-by-case basis, whether it is appropriate to use an alternative comparison methodology....”).

When examined in full, Commerce's reasoning in the Final Modification does not indict the rationale behind its prior policy of zeroing in reviews but not in investigations. Commerce has made a change in policy and priority. The new policy announced in the Final Modification responds to a series of adverse World Trade Organization (“WTO...