Catfish Farmers of America v. U.S.
| Decision Date | 14 September 2009 |
| Docket Number | Slip Op. 09-96. Court No. 08-00111. |
| Parties | CATFISH FARMERS OF AMERICA, Plaintiffs, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC (Valerie A. Slater, Christopher D. Priddy, Jaehong D. Park, Jarrod M. Goldfeder, Natalya D. Dobrowolsky) for Plaintiffs Catfish Farmers of America, America's Catch, Consolidated Catfish Companies, LLC, d/b/a Country Select Fish, Delta Pride Catfish Inc., Harvest Select Catfish Inc., Heartland Catfish Company, Pride of the Pond, Simmons Farm Raised Catfish, Inc., and Southern Pride Catfish Company, LLC.
Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Richard P. Schroeder); and Office of Chief Counsel for Import Administration, U.S. Department of Commerce (David W. Richardson), of counsel, for Defendant United States.
Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, New York City (Mark E. Pardo, Andrew T. Schutz) for Defendant-Intervenors QVD Food Co., Ltd. and QVD USA, LLC.
Arent Fox LLP (John M. Gurley, Matthew L. Kanna, Diana Dimitriuc-Quaia) for Defendant-Intervenors East Seafoods Joint Venture Co., Ltd. and Piazza's Seaford World LLC.
This consolidated action involves an administrative review conducted by the U.S. Department of Commerce ("Commerce") of the antidumping duty order covering certain frozen fish fillets from the Socialist Republic of Vietnam. See Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 73 Fed.Reg. 15,479 (Dep't of Commerce Mar. 24, 2007) (final results of administrative review), as amended, 73 Fed.Reg. 47,885 (Dep't of Commerce Aug. 15, 2008) ("Final Results"); see also Issues and Decision Memorandum for Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, A-552-801 (Mar. 17, 2008), available at http://ia.ita.doc.gov/frn/ summary/vietnam/E8-5889-1.pdf (last visited Sept. 14, 2009) ("Decision Memorandum"). Before the court are motions for judgment on the agency record filed by QVD Food Co. ("QVD"), and Catfish Farmers of America, and individual U.S. catfish processors, America's Catch, Consolidated Catfish Companies, LLC, d/b/a Country Select Fish, Delta Pride Catfish Inc., Harvest Select Catfish Inc., Heartland Catfish Company, Pride of the Pond, Simmons Farm Raised Catfish, Inc., and Southern Pride Catfish Company, LLC (collectively "Catfish Farmers"). 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) (2006),1 and 28 U.S.C. § 1581(c) (2006). For the reasons set forth below, the court remands this action to Commerce to reconsider (1) QVD's international freight expense, (2) the valuation of QVD's labels, and (3) the calculation of the surrogate value for fish oil. The court sustains Commerce's determinations regarding all other issues in this action.
For administrative reviews of antidumping duty orders, the court sustains Commerce'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 substantial evidence challenges to Commerce's actions, the court assesses whether the agency action is "unreasonable" given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350-51 (Fed.Cir. 2006); see Dorbest Ltd. v. United States, 30 CIT 1671, 1675-76, 462 F.Supp.2d 1262, 1269-70 (2006) (). Often described as "such relevant evidence as a reasonable mind might accept as adequate to support [the agency's] conclusion," Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938), "substantial evidence" is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 10.3[1] (2d ed.2008). 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." Edward D. Re., Bernard J. Babb, and Susan M. Koplin, 8 West's Fed. Forms, National Courts § 13342 (2d ed.2009).
The administrative record for an antidumping duty administrative review may support two or more reasonable, though inconsistent, determinations on a given issue. Therefore, arguments (like some made in this case) that "substantial record evidence" supports an alternative determination to the one the agency reached are not responsive to the standard of review. The question the court must consider is whether the choice the agency made is reasonable, not whether some alternative may also have constituted a reasonable choice.
In the Final Results Commerce calculated the net price for QVD's U.S. sales by subtracting a gross-weight, international freight expense. See Decision Memorandum at 23. Although Commerce stated that its practice was to subtract international freight based on the manner in which it was incurred, after reviewing Catfish Farmers' arguments, Commerce agrees that it must reconsider its calculation of international freight expense and requests a remand to do so, which the court will grant. SKF USA Inc. v. United States, 254 F.3d 1022, 1029-30 (Fed.Cir. 2001) ("SKF").
In the Final Results Commerce used the average of the 2004 UN COMTRAD data covering imports of labels into Bangladesh from all over the world to value QVD's label factor of production. See Surrogate Value Mem. at 8; Decision Memorandum at 25. QVD argues that although the UN COMTRAD data is an appropriate basis upon which to derive a surrogate value for labels, there are three data points in the dataset for Japan, Hong Kong, and the Netherlands that should be excluded because they represent aberrationally high prices with low volumes. QVD Br. in Support of Pl.'s Mot. for J. Agency R. 15-19 ("QVD's Br."). Commerce agrees that the issue needs to be further explored and requests a remand to reconsider the application of its aberrational outlier policy to the label surrogate value data, a request the court will grant. SKF, 254 F.3d at 1029-30.
In the Final Results Commerce relied upon World Trade Atlas Indian Import statistics for HTS subheading 1504.20 (Fish Oil, Not Fish Liver) to value the fish oil produced as a by-product of fish processing. Decision Memorandum at 42. Catfish Farmers argue that Commerce had previously declined to use this data in the investigation and did not explain why it was appropriate to use the data in this administrative review. Catfish Farmers Mem. in Support of Pl.'s Mot. for J. Agency R. 39-40 ("Catfish Farmers Br."). Commerce acknowledges that it did not address this argument in the Final Results and requests a remand to reconsider the surrogate value for fish oil and address Catfish Farmers' argument, a request the court will grant. SKF, 254 F.3d at 1029-30.
To derive the United States price for respondent East Sea Seafoods Joint Venture Co. ("ESS"), Commerce used the price between ESS's affiliated company Piazza's Seafood World LLC ("PSW") and unaffiliated United States customers. See Decision Memorandum at 39 & n. 33, Pub. Doc. 256.2 After explaining in detail each of the arguments raised by Catfish Farmers that ESS's sales were not bona fide commercial transactions, Commerce concluded:
We have analyzed all of the information on the record with respect to the question of whether ESS's sales during the POR constitute bona fide sales. Although we have some concerns about certain aspects of the facts on the record, a review of the totality of the circumstances leads us to conclude that sales of ESS's product are bona fide transactions. In determining whether a sale is a bona fide commercial transaction, the Department examines the totality of the circumstances of the sale in question. If the weight of the evidence indicates that a sale is not typical of a company's normal business practices, the sale is not consistent with good business practices, or "the transaction has been so artificially structured as to be commercially unreasonable," the Department finds that it is not a bona fide commercial transaction and must be excluded from review. See Certain Cut-to-Length Carbon Steel Plate from Romania: Notice of Rescission of Antidumping Duty Administrative Review, 63 FR 47232, 47234 (September 4, 1998).
In particular, in determining whether a U.S. sale, in the context of a review, is a bona fide transaction, the Department considers numerous factors, with no single factor being dispositive, in order to assess the totality of the circumstances surrounding the sale in question. The Department considers such factors as (1) the timing of the sale, (2) the sales price and quantity, (3) the expenses arising from the sales transaction, (4) whether the sale was sold to the customer at a loss, and (5) whether the sales transaction between the exporter and customer was executed at arm's length. See American Silicon Technologies v. United States, 110 F.Supp.2d 992, 996 (CIT 2000) (citation omitted); see also Tianjin Tiancheng Pharmaceutical Co. Ltd. v. United States, 366 F.Supp.2d 1246, 1250 (CIT 2005). An examination of whether a sale is a bona fide transaction may include a variety of these and other factors, depending upon the unique circumstances of each case.
In examining all of the information on the record in this case, we have determined that the concerns raised by the Petitioners...
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