Catfish Farmers American v. United States

• Decision Date: 18 December 2014
• Docket Number: Slip Op. 14 - 146,Consol. Court No. 12-00087
• Parties: CATFISH FARMERS OF AMERICA, et al., Plaintiffs, v. UNITED STATES, Defendant, and VINH HOAN CORP., QVD FOOD CO., LTD., VIETNAM ASSOCIATION OF SEAFOOD EXPORTERS AND PRODUCERS, ANVIFISH JOINT STOCK CO., BIEN DONG SEAFOOD CO., LTD., and VINH QUANG FISHERIES CORP., Defendant-Intervenors.
• Court: U.S. Court of International Trade

CATFISH FARMERS OF AMERICA, et al., Plaintiffs, v. UNITED STATES, Defendant,andVINH HOAN CORP., QVD FOOD CO., LTD., VIETNAM ASSOCIATION OF SEAFOODEXPORTERS AND PRODUCERS, ANVIFISH JOINT STOCK CO., BIEN DONG SEAFOODCO., LTD., and VINH QUANG FISHERIES CORP., Defendant-Intervenors.

Slip Op. 14 - 146 Consol. Court No. 12-00087

UNITED STATES COURT OF INTERNATIONAL TRADE

December 18, 2014

Before: R. Kenton Musgrave, Senior Judge

OPINION AND ORDER

[Remanding seventh antidumping duty administrative review of frozen fish fillets from the Socialist Republic of Vietnam.]

Valerie A. Slater, Jarrod M. Goldfeder, and Nazak Nikakhtar, Akin, Gump, Strauss, Hauer & Feld, LLP, of Washington DC, for the plaintiffs.

Ryan M. Majerus, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington DC, argued for the defendant. On the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel was Elika Eftekhari, Attorney-International, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce.

Matthew J. McConkey, Mayer Brown LLP, of Washington DC, for defendant-intervenors Vinh Hoan Corporation and QVD Food Company, Limited.

Mark E. Pardo, Andrew B. Schroth , and Andrew T. Schultz, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington DC, for the defendant-intervenor Vietnam Association of Seafood Exporters and Producers.

Robert G. Gosselink and Jonathan M. Freed, Trade Pacific, PLLC, of Washington DC, for defendant-intervenors Anvifish Joint Stock Company, Bien Dong Seafood Company Ltd., and Vinh Quang Fisheries Corporation.

Musgrave, Senior Judge: This opinion addresses consolidated lawsuits contesting the administrative review portion of Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results of the Seventh Antidumping Duty Administrative Review and Sixth New Shipper Review, 77 Fed. Reg. 15039 (Mar. 14, 2012), APDoc¹ 129 ("Final Results" or "Seventh Review"). Compiled by the defendant, International Trade Administration, United States Department of Commerce ("Commerce" or "Department"), the Seventh Review covers the period August 1, 2009 through July 31, 2010, and the administrative reasoning is in the issues and decision memorandum ("IDM") of record, A-PDoc 112 ("I&D Memo").

Previously, further proceedings here were stayed pending the results of remand of prior reviews, as those reviews implicated certain issues herein. See, e.g., Catfish Farmers of America v. United States, 37 CIT ___, Slip Op. 13-63 (May 23, 2013). Redetermination of thosereviews having been sustained in a separate slip opinion and judgments issued this date, the stay of this matter is lifted hereby, sua sponte, and the merits addressed below.

As in those prior reviews, the plaintiffs'² initial claims here concern Commerce's selection of Bangladesh as the primary surrogate country for the calculation of the respondents' margins, which determination also resulted in surrogate valuation ("SV") from Bangladesh of data for the factors of production ("FOPs") of the whole live fish input, farming inputs, labor, additives, diesel fuel, and packing materials, as well as the use of financial statements for certain Bangladesh shrimp processors to value foreign respondents' overhead, SG&A, and profit. In addition, the plaintiffs complain of the use of Indonesian import statistics rather than price quotes to value four by-products: fish waste, fish oil, fresh broken fish fillets, and frozen broken fish fillets.

For their part, the defendant-intervenors collectively challenge Commerce's use of "zeroing" methodology in this administrative review, and the defendant-intervenor Vinh Hoan Corporation challenges the determination to reject as untimely its request for company-specific revocation as well as the determination to "cap" the SV for its fresh broken fillets at the level of the SV for whole live fish.

Jurisdiction is pursuant to 28 U.S.C. §1581(c) and 19 U.S.C. §1516a(a)(2)(B)(iii). The court is required to examine whether the Final Results are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. §1516a(b)(1)(B)(i). Certain claims on this matter persuade that remand of the case is necessary.

Discussion

I. Plaintiffs' Motion for Judgment -- Selection of Primary Surrogate Country

A. Background

19 U.S.C. §1677b(c) mandates that the valuation of the factors of production ("FOPs") of a producer or exporter from a non-market economy ("NME") "shall be based on the best available information regarding the values of such factors in a market economy country or countries". Pursuant to its interpretation thereof, Commerce normally selects a "primary" surrogate country based on a four-step sequence. See Import Administration Policy Bulletin 04.1: Non-Market Economy Surrogate Country Selection Process (Mar. 1, 2004).³ Only the "Data Considerations" step in that sequence is at issue here:

[D]ata quality is a critical consideration affecting surrogate country selection. After all, a country that perfectly meets the requirements of economic comparability and significant producer is not of much use as a primary surrogate if crucial factor price data from that country are inadequate or unavailable. . . .

In assessing data and data sources, it is the Department's stated practice to use investigation or review period-wide price averages, prices specific to the input in question, prices that are net of taxes and import duties, prices that are contemporaneous with the period of investigation or review, and publicly available data.

Id.

For its preliminary determination, Commerce considered the Philippines, Indonesia, and Bangladesh to be economically comparable to Vietnam and significant producers of comparable merchandise, and it based the selection of the primary surrogate country on the record data for themain input for production of frozen fish fillets: whole live fish.⁴ See Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 76 Fed. Reg. 55872 (Sep. 9, 2011) ("Preliminary Results"), APDoc 7, at 55875-77. Commerce determined the Indonesian "FAO-FIGIS" data represented a more reliable broad market average for purposes of valuing whole live fish, having also satisfied the surrogate value criteria (according to its policy) of being publicly available, from an approved surrogate country, sufficiently specific to the input in question, tax and duty exclusive, and contemporaneous with the POR. Id. Commerce also determined to reject certain DAM-internal worksheets, of the type used to calculate the whole live fish price in the final results of the prior review, on the ground that questions remained unanswered as to the worksheets' publicly availability. Id. (citing DAM's failure to respond to Commerce's inquiries and an affidavit from a Bangladeshi attorney who, as a member of the public, had tried unsuccessfully to obtain a copy of the worksheets). See File Memorandum, "Placing Questions to Philippine and Bangladeshi Governments on the Record" (June 27, 2011), APDoc 113. Additionally, Commerce valued the fish waste, fish oil, fresh broken fish fillets, and frozen broken fish fillets by-products using SV import data for Indonesia. See Preliminary Surrogate Value Memo, APDoc 5, at 6-7.

After the Preliminary Results, the parties placed further data on the record.⁵ For the Final Results, Commerce changed its preliminary determination, and selected Bangladesh based on the updated data for valuing whole live fish. I&D Memo at cmt. I.C. See Final Surrogate Value Memo, APDoc 113, at 4-5. Commerce again found the data from all three countries for that input to be "approved", tax and duty exclusive, publicly available, specific, and contemporaneous with the POR. But Commerce rejected the Philippine BAS data, after adopting its "observations and concerns" from the previous review regarding them.⁶ Commerce also found that while the FAO-FIGIS data for Indonesian Pangasius are "meant to capture all encompassing whole country data", representative of a broad-market average, and significant in volume in the amount of 109,685MT, they are presented as a single average price for the whole country, include all four species of Pangasius (of which Pangasius hypophthalmus is the farmed majority) and evince some uncertainty as to total volume.

Such observations apparently persuaded Commerce when it considered the BAS data both as a whole and in comparison with the DAM data for Bangladesh. Considering the DAM data further, Commerce continued to reject the DAM worksheets as lacking public availability. With respect to certain DAM website data submitted after the preliminary results, see note 5, Commerce rejected the "grower" prices that consisted of two data points as being too limited to constitute a broad market average. However, as in the prior review, Commerce was not persuaded by the domestic industry's argument that the DAM data should be rejected on the ground that they represent wholesale prices and not "farm gate" prices, reasoning that "it is uncertain the extent to which such a distinction is relevant" in SV analysis, which "seeks to determine the price a respondent would pay for an input if it were to produce subject merchandise in the surrogate country, not necessarily what producers/sellers of the input in the surrogate country receive." I&D Memo at 12.

Commerce then noted that the record indicated that the whole fish processed in Vietnam range from 1-1.5 kilograms and that the DAM website data for "pangash, small" consisted of fish that included that size range, i.e., up to 1.5 kilograms. Commerce also noted that the terms "pangas" and "pangash" are used interchangeably, that "pangas" is the local name for Pangasius hypophthalmus, and that Pangasius hypophthalmus is the only species listed under "pangas" in the Fisheries Statistical Yearbook of Bangladesh 2009-2...