China Kingdom Import & Export Co. v. U.S.
| Citation | 507 F.Supp.2d 1337 |
| Decision Date | 04 September 2007 |
| Docket Number | Slip Op. 07-135.,Court No. 03-00302. |
| Parties | CHINA KINGDOM IMPORT & EXPORT CO., LTD.; Yancheng Yaou Seafood Co., Ltd.; and Qingdao Zhengri Seafood Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Garvey Schubert Barer, Washington, DC (William E. Perry, Lizbeth R. Levinson, and Ronald M. Wisla) for plaintiffs.
Peter D. Keisler, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (David S. Silverbrand); Marisa B. Goldstein, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.
Plaintiffs China Kingdom Import & Export Co., Ltd. ("China Kingdom"), Yancheng Yaou Seafood Co., Ltd. ("Yancheng"), and Qingdao Zhengri Seafood Co., Ltd. ("Qingdao") (collectively "plaintiffs") contest the April 2003 final results of an administrative review of a 1997 antidumping duty order on imported freshwater crawfish tail meat ("Final Results"). See Freshwater Crawfish Tail Meat from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 68 Fed.Reg. 19,504 (Apr. 21, 2003) ("Final Results"). The Final Results, issued by the International Trade Administration, United States Department of Commerce ("Commerce" or the "Department"), pertain to freshwater crawfish tail meat imported from the People's Republic of China ("China" or the "PRC") that was subject to the antidumping duty order (the "subject merchandise") and entered for consumption during the period of September 1, 2000 through August 31, 2001 (the "period of review" or "POR"). Id. at 19,504-05.
Plaintiffs argue that Commerce exceeded its authority, and failed to support its decision with substantial record evidence, when it applied the "facts otherwise available" and "adverse inferences" provisions of 19 U.S.C. § 1677e(a) and (b), respectively, in determining an antidumping duty assessment rate of 223.01 percent for China Kingdom and in subjecting Yancheng to the "PRC-wide" rate, which also is 223.01 percent.1 See Am. Br. in Supp. of Pls.' Rule 56.2 Mot. for J. Upon the Agency R. 2-5 ( ). Invoking these provisions, Commerce rejected all data that China Kingdom and Yancheng had submitted during the administrative review in response to the Department's information requests. See Final-Results, 68 Fed.Reg. at 19,506; 19 U.S.C. §§ 1677e(a)-(b), 1677m(d)-(e) (2000).
Commerce applied facts otherwise available and adverse inferences in determining the antidumping duty assessment rate for China Kingdom based on its finding that China Kingdom erroneously submitted, in its response to the Department's questionnaire, certain information provided to it by its crawfish tail meat producer that did not pertain to the period of review but instead pertained to a prior time period. The data affected by the error were data used in calculating the normal value of the merchandise according to procedures set forth in 19 U.S.C. § 1677b(c) (2000), which are applicable to merchandise produced in nonmarket economy countries. Specifically, the affected data were data on the producer's total production of crawfish tail meat and data pertaining to eight of the eleven factors of production. Final Results, 68 Fed.Reg. at 19,506; Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review of Freshwater Crawfish Tail Meat from the People's Republic of China: September 1, 2000 through August 31, 2001 at 22-25 (Apr. 14, 2003) (Public Admin. R. Doc. No. 259) ("Decision Mem."). When China Kingdom attempted to remedy the deficiency by providing Commerce a submission with corrected data at the outset of the phase of the verification occurring at the location of its producer, Chaohu Daxin Foodstuff Co., Ltd. ("Daxin"), Commerce terminated the verification. Decision Mem. at 20, 22-25. Commerce rejected the substitute data, considering it to be new information that was unacceptable if submitted after the deadline set forth in its regulations. Id. Commerce found, for purposes of 19 U.S.C. § 1677e(b), that China Kingdom did not act "to the best of its ability" in providing the requested information. Id. On this basis, Commerce declined to use any of the information submitted by China Kingdom relevant to the antidumping duty assessment rate and, as an adverse inference, assigned to China Kingdom the assessment rate of 223.01 percent, which was the highest rate determined for any respondent in the administrative review. Final Results, 68 Fed.Reg. at 19,506; see 19 U.S.C. § 1677e(b).
The court concludes, for the reasons discussed herein, that Commerce failed to make and support with substantial evidence findings on which to base its decision to resort to facts otherwise available under 19 U.S.C. § 1677e(a)(2) and that Commerce exceeded its authority when it rejected all data submitted by China Kingdom that were relevant to the calculation of an antidumping duty assessment rate. The court concludes that Commerce also acted contrary to law in assigning to China Kingdom, as an adverse inference pursuant to 19 U.S.C. § 1677e(b), an antidumping duty assessment rate of 223.01 percent.
Commerce also applied facts otherwise available and adverse inferences in subjecting Yancheng to the 223.01 percent rate assigned to respondents who failed to establish independence from control of the government of the PRC (the "PRC-wide rate") determined in the administrative review. Final Results, 68 Fed.Reg. at 19,-506. Commerce based its determination principally on its conclusion that Yancheng and its corporate affiliate, Qingdao, should be treated as a single entity for purposes of the review and its finding that Qingdao had failed to cooperate to the best of its ability when it refused to allow the Department to conduct a verification of its submitted information. Decision Mem. at 16-17. Although Yancheng consented to verification, Commerce refused to conduct a verification only of Yancheng, reasoning that under those circumstances Commerce was precluded from accomplishing a satisfactory verification of the single entity comprised of Yancheng and Qingdao. Id. at 17-18. In the absence of sufficient verified information, Commerce concluded that the Yancheng-Qingdao entity had not been shown to be free of control by the government of the PRC, that Commerce could not calculate for that entity a separate antidumping duty assessment rate and, accordingly, that the entries of Yancheng's subject merchandise should be subjected to the PRC-wide rate. See id. 16-20.
For the reasons discussed herein, the court concludes that Commerce acted in accordance with law in refusing to subject to the verification procedure the information submitted by Yancheng after Qingdao notified Commerce that Qingdao would not participate in verification. Yancheng and Qingdao did not contest, either in the administrative review or before the court, the Department's decision to treat them as a single entity. In the absence of verification of the business records of Qingdao, the Department's finding that it was unable to accomplish a satisfactory verification of the single entity Yancheng-Qingdao was supported by substantial evidence. Decision Mem. at 17-18. Lacking sufficient verified information pertaining to the single entity, Commerce acted in accordance with law in concluding that it was unable to determine for that single entity a separate antidumping duty assessment rate. The court, therefore, affirms the Department's determination to include Yancheng in the 223.01 percent PRC-wide rate determined for the review.
The court remands this matter to Commerce with instructions to redetermine the antidumping duty assessment rate for China Kingdom in conformity with this Opinion and Order.
Commerce issued its antidumping duty order on freshwater crawfish tail meat from China in 1997. See Notice of Amendment to Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Freshwater Crawfish Tail Meat From the People's Republic of China, 62 Fed.Reg. 48,218 (Sept. 15, 1997) ("Order"). Approximately four years later, Commerce announced the opportunity to request the administrative review at issue in this case. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 66 Fed. Reg. 46,257 (Sept. 4, 2001). China Kingdom and Qingdao, exporters of freshwater crawfish tail meat to the United States, timely requested an administrative review. Letter from Garvey Schubert Barer to Sec'y of Commerce (Sept. 28, 2001) (Public Admin. R. Doc. No. 2). Domestic interested parties also timely requested an administrative review of Yancheng and certain other producers and exporters of freshwater crawfish tail meat from China. Letter from Adduci, Mastriani & Schaumberg, L.L.P. to Sec'y of Commerce (Sept. 28, 2001) (Public Admin. R. Doc. No. 3). In response to the requests, Commerce initiated the administrative review at issue.2 See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 66 Fed.Reg. 54,195 (Oct. 26, 2001).
In the preliminary results of the administrative review ("Preliminary Results"), and again in the Final Results, Commerce invoked facts otherwise available and adverse inferences in assigning China Kingdom an antidumping duty assessment rate of 223.01 percent. Freshwater Crawfish Tail Meat from the People's Republic of China: Notice of Preliminary Results of Antidumping Duty Administrative Review, 67 Fed.Reg. 63,877, 63,880 (Oct. 16, 2002) ("Preliminary Results"); Final Results, 68 Fed.Reg. at 19,506. As a result of the Department's conclusion that Yancheng did not...
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