China Processed Food Import & Export Co. v. U.S., Slip Op. 08-16.
| Decision Date | 31 January 2008 |
| Docket Number | Court No. 04-00503.,No. Slip Op. 08-16.,Slip Op. 08-16. |
| Citation | 536 F.Supp.2d 1347 |
| Parties | CHINA PROCESSED FOOD IMPORT & EXPORT COMPANY, Plaintiff, v. UNITED STATES, Defendant, and Coalition for Fair Preserved Mushroom Trade, Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States. Department of Justice (Richard P. Schroeder); Quentin M. Baird, Philip J. Curtin, and Jonathan M. Zielinski, Office of Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for Defendant.
Kelley Drye Collier Shannon (Michael J. Coursey and Adam H. Gordon), Washington, DC, for Defendant-Intervenor Coalition for Fair Preserved Mushroom Trade.
Before: Timothy C. Stanceu, Judge.
China Processed Food Import & Export Company ("plaintiff' or "COFCO") challenges the final administrative determination ("Final Results") that the International Trade Administration, United States Department of Commerce ("Commerce" or the "Department") issued in the fourth administrative review of an antidumping duty order entered on certain preserved mushrooms ("subject merchandise") from the People's Republic of China ("China" or the "PRC"). See Certain Preserved Mushrooms From the People's Republic of China: Final Results of Sixth Antidumping Duty New. Shipper Review and Final Results and Partial Rescission of the Fourth Antidumping Duty Admin. Review, 69 Fed.Reg. 54,635 (Sept. 9, 2004) ("Final Results"). Plaintiff moves pursuant to USCIT Rule 56.2 for judgment upon the agency record, arguing that the Final Results were unlawful because Commerce abused its discretion and acted unfairly in applying to COFCO retroactively a change in the methodology, for determining the normal value of COFCO's subject merchandise. Plaintiff, however, does not challenge the new methodology on the merits.
Under the new methodology, which Commerce applied in the fourth administrative review but not in the antidumping duty investigation or in a previous administrative review of the antidumping duty order, Commerce treated COFCO arid its affiliated producers and exporters as a single entity. When determining the normal value of COFCO's exports of subject merchandise, Commerce used not only data on the factors of production associated with the actual producer of the merchandise that COFCO exported to the United States, but also factors-of-production data of an affiliated producer that did not produce that merchandise. Coalition for Fair Preserved Mushroom Trade, the petitioner in the antidumping duty investigation resulting in the antidumping duty order ("petitioner") and the party that advocated use of the new methodology in the fourth administrative review, sought and was granted defendant-intervenor status but did not further participate in this litigation. See id. at 54,635 n. 3. Because plaintiff, in moving, for judgment upon the agency record, did not challenge on the merits the method by, which Commerce calculated the normal value of COFCO's merchandise in the fourth administrative review, and because Commerce did not exceed its discretion in deciding not to continue following the method by which it determined such normal value prior to the fourth administrative review, the court denies plaintiff's motion for judgment upon the agency record and, pursuant to, USCIT Rule 56.2(b), dismisses this action.
Commerce issued an antidumping duty order on the subject merchandise in 1999. Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Preserved Mushrooms From the People's Republic of China, 64 Fed.Reg. 8308 (Feb. 19, 1999) ("Order"). COFCO, an exporter of the subject merchandise in China, purchased the subject merchandise that it exported to the United States during the period of investigation from two mushroom producers with which it was affiliated, Zishan Cannery Canned Food Factory (now known as Fujian Zishan Group Co., Ltd. ("Fujian Zishan")) and COFCO, (Longhai) Food, Inc. ("Longhai"). Mem. of P. & A. in Supp. of COFCO's Mot. for J. upon the Agency R. 2 ("COFCO's Mem. of P. & A."). Commerce determined in the investigation that the subject merchandise COFCO exported to the United States was sold at less than fair value and applied to that, merchandise an antidumping duty margin of 121.47 percent. Order, 64 Fed. Reg. at 8310. In the final less-than-fair value determination that concluded the antidumping duty investigation, Commerce identified various affiliates of COFCO but did not, in discussing its calculation of the normal value of COFCO's merchandise or its determination of an antidumping duty margin for COFCO, discuss whether COCO and any of its affiliates should be treated as a single entity. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Preserved Mushrooms from the People's Republic of China, 63 Fed.Reg. 72,255, 72,255-56, 72,258 (Dec. 31, 1998)1; Notice of Prelim. Determination Of Sales at Less Than Fair Value and Postponement of Final Determination Certain Preserved Mushrooms From the People's Republic of China, 63 Fed.Reg. 41,794, 41,796, 41,799-800 (Aug. 5, 1998).
After issuance of the antidumping duty order, COFCO stopped purchasing subject merchandise from Fujian Zishan and Longhai, producers that processed, but did not grow, mushrooms, and began to purchase solely from another mushroom producer with which it was affiliated, Fujian Yu Xing Fruit & Vegetable Foodstuff Development Co. ("Yu Xing"), a producer that did grow mushrooms. COFCO's Mem. of P. & A. 3; Certain Preserved Mushrooms From the People's Republic of China: Prelim. Results of Sixth New Shipper Review and Prelim. Results and Partial Rescission of Fourth Antidumping Duty Admin. Review, 69 Fed.Reg. 10,410, 10,413 (Mar. 5, 2004) ("Prelim.Results"). "COFCO believed that the primary reason for its 127.47 [sic] percent antidumping margin was that Fujian Zishan's and [Longhai's] production processes did not take advantage of vertical integration, and that the production costs and normal values calculated by Commerce were higher than they otherwise might have been had Fujian Zishan and [Longhai] grown mushrooms instead of purchasing them." COFCO's Mem. of P. & A. 3.
In the first administrative review, Commerce calculated the normal value of COFCO's merchandise based on the factors-of-production data reported by COFCO's sole producer, Yu Xing, for the period August 5, 1998 through January 31, 2000. See Prelim. Results of First New Shipper Review and First Antidumping Duty Admin. Review: Certain Preserved Mushrooms From the People's Republic of China, 65 Fed.Reg. 66,703, 66,706-07 (Nov. 7, 2000) (identifying Yu Xing as COFCO's supplier). Commerce considered, and rejected petitioner's objection that Yu Xing's factors-of-production data were unreliable. See Issues and Decision Mem. for the Antidumping Duty Admin. and New Shipper Reviews on Certain Preserved Mushrooms from the People's. Republic of China — Aug. 5, 1998, through Jan. 31, 2000 at 1-2, 18-19 (May 31, 2001). Commerce determined an antidumping duty margin of 0.00 percent for entries of subject merchandise exported by COFCO during the period of August 5, 1998 through January 31, 2000. See Final Results of First New Shipper Review and First Antidumping Duty Admin. Review: Certain Preserved Mushrooms From the People's Republic of China, 66 Fed.Reg. 31,204, 31,205 (June 11, 2001). From the published decision concluding the first administrative review, it does not appear that either petitioner or Commerce considered the possibility of the Department's collecting and using data from COFCO's other affiliates in determining the normal value of COFCO's merchandise. See id. at 31,204-06.
Commerce conducted two additional administrative reviews of the antidumping duty order before the administrative review at issue in this case. However, upon petitioner's request, the second and third administrative reviews were rescinded with respect to COFCO. Certain Preserved Mushrooms From the People's Republic of China: Prelim. Results of New Shipper Review and Prelim. Results and Partial Rescission of Second Antidumping Duty Admin. Review, 67 Fed.Reg. 10,128, 10,129 (Mar. 6, 2002) (); Certain Preserved Mushrooms from the People's Republic of China: Notice of Partial Rescission of Antidumping Duty Admin. Review, 67 Fed.Reg. 53,914, 53,914 (Aug. 20, 2002) (). Accordingly, the assessment rate for entries of COFCO's merchandise made during those time periods remained at 0.00 percent, the rate determined in the first administrative review.
Commerce conducted the administrative review at issue here, i.e. the fourth administrative review, for entries of subject merchandise made by COFCO, among others, during the period February 1, 2002 through January 31, 2003 ("period of review" or "POR"). Prelim. Results, 69 Fed.Reg. at 10,412. During the fourth administrative review, in response to the Department's requests for information, COFCO reported that Yu Xing, its affiliated producer, supplied all subject merchandise that COFCO exported to the United States during the period of review, and COFCO provided Yu Xing's factors-of-production data. See, e.g., Letter from White & Case to Sec'y of Commerce A16-A17, D1-D15, Exs. D1-D6 (May 30, 2003) () (Admin.R.Doc. No. 41). Petitioner commented that Commerce should require COFCO to submit a full...
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