Coal. for Fair Trade in Hardwood Plywood v. United States

• Citation: 610 F.Supp.3d 1344
• Decision Date: 22 December 2022
• Docket Number: Slip Op. 22-153,Consol. Court No. 20-03930
• Parties: COALITION FOR FAIR TRADE IN HARDWOOD PLYWOOD, Plaintiff, and Richmond International Forest Products LLC, Taraca Pacific Inc., Concannon Corporation, Xuzhou Jiangheng Wood Products Co., Ltd., and Xuzhou Jiangyang Wood Industries Co., Ltd., Consolidated Plaintiffs, v. UNITED STATES, Defendant, and Richmond International Forest Products LLC, Taraca Pacific Inc., Concannon Corporation, Linyi Chengen Import and Export Co., Ltd., Xuzhou Jiangheng Wood Products Co., Ltd., and Xuzhou Jiangyang Wood Industries Co., Ltd., Defendant-Intervenors.
• Court: U.S. Court of International Trade

610 F.Supp.3d 1344

COALITION FOR FAIR TRADE IN HARDWOOD PLYWOOD, Plaintiff,

and

Richmond International Forest Products LLC, Taraca Pacific Inc., Concannon Corporation, Xuzhou Jiangheng Wood Products Co., Ltd., and Xuzhou Jiangyang Wood Industries Co., Ltd., Consolidated Plaintiffs,

v.UNITED STATES, Defendant,andRichmond International Forest Products LLC, Taraca Pacific Inc., Concannon Corporation, Linyi Chengen Import and Export Co., Ltd., Xuzhou Jiangheng Wood Products Co., Ltd., and Xuzhou Jiangyang Wood Industries Co., Ltd., Defendant-Intervenors.

Slip Op. 22-153

Consol. Court No. 20-03930

United States Court of International Trade.

December 22, 2022

Timothy C. Brightbill, Stephanie M. Bell, Tessa V. Capeloto, and Jeffrey O. Frank, Wiley Rein LLP, of Washington, D.C., for Plaintiff Coalition for Fair Trade in Hardwood Plywood.

Jeffrey S. Grimson and Jill A. Cramer, Mowry & Grimson, PLLC, of Washington, D.C., for Consolidated-Plaintiffs and Defendant-Intervenors Richmond International Forest Products LLC, Taraca Pacific Inc. and Concannon Corporation.

Gregory S. Menegaz, Alexandra H. Salzman, and J. Kevin Horgan, deKieffer & Horgan, PLLC, of Washington, D.C., for Consolidated Plaintiffs and Defendant-Intervenors Xuzhou Jiangheng Wood Products Co., Ltd. and Xuzhou Jiangyang Wood Industries Co., Ltd., and Defendant-Intervenor Linyi Chengen Import and Export Co., Ltd.

Sonia M. Orfield, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of counsel on the brief was Savannah Maxwell, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

OPINION AND ORDER

Choe-Groves, Judge:

This case involves hardwood and decorative plywood, as well as certain veneered panels. This consolidated action challenges several aspects of the final results filed by the U.S. Department of Commerce ("Commerce") in the first administrative review of the antidumping duty order covering hardwood plywood from the People's Republic of China ("China"). See Certain Hardwood Plywood Products from the People's Republic of China ("Final Results"), 85 Fed. Reg. 77,157 (Dep't of Commerce Dec. 1, 2020) (final results of antidumping duty administrative review; 2017–2018), and accompanying issues and decision memorandum dated November 23, 2020 ("Final IDM"), PR 210¹ ; see also 19 U.S.C. § 1675 (periodic review of the amount of duty).² The period of review is June 23, 2017 through December 31, 2018. Final IDM at 1. For the following reasons, the Court sustains the Final Results.

ISSUES PRESENTED

The Court reviews the following issues:

1. Whether Commerce's calculation of normal value for Linyi Chengen Import and Export Co., Ltd. ("Linyi Chengen") using Commerce's normal methodology, and not the intermediate input methodology, was based on substantial evidence;

2. Whether Commerce's selection of the surrogate value data for Linyi Chengen's log inputs and calculation of the surrogate value for logs was based on substantial evidence;

3. Whether Commerce's selection calculation of the surrogate value for labor was based on substantial evidence;

4. Whether the reply brief submitted by Linyi Chengen and Consolidated Plaintiffs and Defendant-Intervenors Xuzhou Jiangheng Wood Products Co., Ltd. and Xuzhou Jiangyang Wood Industries Co., Ltd. raises new arguments and includes new factual information that were not before Commerce;

5. Whether Commerce's selection of the surrogate value for Linyi Chengen's formaldehyde input was supported by substantial evidence; and

6. Whether Commerce's selection of financial statements and calculation of surrogate financial ratios were supported by substantial evidence.

BACKGROUND

I. Introduction

An administrative review of the dumping margin involves a comparison of the subject merchandise's U.S. export price or constructed export price with its "normal value" in the home market (or a comparable third country if there are no useable sales in the home market). 19 U.S.C. § 1675(a)(2)(A). The process resembles the determination of the margin of dumping in the antidumping duty investigation, pursuant to which Commerce determines whether imports of subject merchandise are, or are likely to be, sold in the United States at "less than fair value."³ See 19 U.S.C. § 1673d(a)(1) ; see, e.g., Certain Hardwood Plywood Products from the People's Republic of China ("Investigation"), 82 Fed. Reg. 53,460 (Dep't of Commerce Nov. 16, 2017) ("final determination of sales at less than fair value, and final affirmative determination of critical circumstances, in part") and accompanying issues and decision memorandum. The dumping margin, if any, is the amount by which the subject merchandise's normal value exceeds its U.S. price. See, e.g., 19 U.S.C. §§ 1677a(a) – (b), 1677b(a)(1), 1677(35)(A).

In April 2019, Commerce initiated the first administrative review of the antidumping duty order on certain hardwood plywood products from China to determine the dumping margins for the period of review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 84 Fed. Reg. 12,200 (Dep't of Commerce Apr. 1, 2019). The period of review was June 23, 2017 through December 31, 2018. See id. at 12,202.

Commerce selected as mandatory respondents Linyi Chengen and Lianyungang Yuantai International Trade Co. ("Lianyungang Yuantai"). See Certain Hardwood Plywood Products from the People's Republic of China ("Preliminary Results"), 85 Fed. Reg. 7270 (Dep't of Commerce Feb. 7, 2020) (preliminary results of antidumping duty administrative review; 2017–2018), and accompanying preliminary issues and decision memorandum ("Prelim. IDM"), PR 163. See also Commerce's Mem. Re: Certain Hardwood Plywood Products from the People's Republic of China: Respondent Selection (May 16, 2019), PR 69. Lianyungang Yuantai notified Commerce that it desired to withdraw from participating in the review. See Lianyungang Yuantai's Letter Withdrawing Request Admin. Rev. (Jul. 1, 2019), PR 84. Commerce subsequently rescinded the administrative review with respect to 29 companies for which all review requests were timely withdrawn, including Lianyungang Yuantai. See Certain Hardwood Plywood Products from the People's Republic of China, 84 Fed. Reg. 62,509 (Dep't of Commerce Nov. 15, 2019) (partial rescission of antidumping duty administrative review; 2017–2018).

For this proceeding, Commerce continued to consider China to be a non-market economy country, which implicated how the normal value of the subject merchandise was to be determined. See Antidumping Duty Investigation of Certain Aluminum Foil from the People's Republic of China, 82 Fed. Reg. 50,858, 50,861 (Dep't of Commerce Nov. 2, 2017) (affirmative preliminary determination of sales at less-than-fair value and postponement of final determination) (citing Commerce's China's Status Non-Market Economy Mem. (Oct. 26, 2017)), unchanged in Certain Aluminum Foil from the People's Republic of China, 83 Fed. Reg. 9282 (Dep't of Commerce Mar. 5, 2018) (final determination of sales at less than fair value); see also 19 U.S.C. § 1677b(c). When a proceeding concerns a non-market economy, the statute generally requires Commerce to determine normal value based on the factors utilized to produce the subject merchandise, including raw materials, labor, and utilities, and general expenses and profit, plus the cost of containers, coverings, and other expenses. 19 U.S.C. § 1677b(c)(1). These factors of production in non-market economy cases are based on data from a surrogate market economy country or countries. See id. § 1677b(c)(4). Pursuant to 19 C.F.R. § 351.408(c)(2), Commerce will normally value factors of production using data from a single surrogate country. 19 C.F.R. § 351.408(c)(2) ; see Non-Market Economy Surrogate Country Selection Process, Policy Bulletin 04.1 (Dep't of Commerce Mar. 1, 2004).

After granting separate-rate status to Linyi Chengen,⁴ Commerce turned to the surrogate country issue. When selecting a value for a given factor of production, § 1677b(c) requires Commerce to use the "best available information." See 19 U.S.C. § 1677b(c)(1) ; see, e.g., Nation Ford Chem. Co. v. United States ("Nation Ford"), 166 F.3d 1373, 1377 (Fed. Cir. 1999). Provided that Commerce uses the best available information and determines the antidumping duty margin as accurately as possible, Commerce has discretion over what factors of production methodology is "best" for a given situation. See Nation Ford, 166 F.3d at 1378 ( section 1677b(c) "does not require that a uniform methodology be used in the valuation of all relevant factors"); Ningbo Dafa Chem. Fiber Co. v. United States, 580 F.3d 1247, 1261 (Fed. Cir. 2009) (Commerce enjoys broad discretion in valuing factors of production). Because the proceeding involved a non-market economy country, Commerce was required to determine the subject merchandise's normal value by relying on the "best available information" from a market economy country meeting certain criteria.

For this proceeding, Commerce's list of countries that are economically comparable to China, based on 2018 gross national income data, included Brazil, Bulgaria, Malaysia, Mexico, Russia, and Turkey. See Commerce's Letter to Interested Parties Requesting Economic Development, Surrogate Country, and Surrogate Value Comments and Information (Aug. 16, 2019) at 1, Attachment at 1–2, PR 98 (containing the list of surrogate countries for antidumping investigations and reviews from China).

Linyi Chengen argued that data from Romania should be used, which was not on the surrogate country list. Linyi Chengen's Comments Surrogate Country List Primary Surrogate Country (Aug. 23, 2019) at 1–2, PR 101. The Coalition for Fair Trade in Hardwood Plywood ("Coalition") provided data for...