Cooper (Kunshan) Tire Co. v. United States

• Decision Date: 12 October 2021
• Docket Number: Slip Op. 21-141,Consol. Court No. 20-00113
• Citation: 539 F.Supp.3d 1316
• Parties: COOPER (KUNSHAN) TIRE CO., LTD. and Cooper Tire & Rubber Co., Plaintiffs, ITG Voma Corp., Plaintiff-Intervenor, and Vogue Tyre & Rubber Co., Consolidated-Plaintiff, v. UNITED STATES, Defendant, and The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers Int'l Union, AFL-CIO, CLC, Defendant-Intervenor.
• Court: U.S. Court of International Trade

539 F.Supp.3d 1316

COOPER (KUNSHAN) TIRE CO., LTD. and Cooper Tire & Rubber Co., Plaintiffs,ITG Voma Corp., Plaintiff-Intervenor,andVogue Tyre & Rubber Co., Consolidated-Plaintiff,

v. UNITED STATES, Defendant,andThe United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers Int'l Union, AFL-CIO, CLC, Defendant-Intervenor.

Slip Op. 21-141

Consol. Court No. 20-00113

United States Court of International Trade.

October 12, 2021

Gregory C. Dorris, Troutman Pepper Hamilton Sanders LLP, of Washington, D.C., argued for plaintiffs Cooper (Kunshan) Tire Company, Ltd. and Cooper Tire & Rubber Company.

Andrew T. Schutz, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, D.C., argued for consolidated-plaintiff Vogue Tyre & Rubber Company. On the brief was Jordan C. Kahn.

Nicholas R. Sparks, Hogan Lovells US LLP, of Washington, D.C., argued for plaintiff-intervenor ITG Voma Corporation. With him on the brief was Jonathan T. Stoel.

Ashley Akers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Natalie M. Zink, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Roger B. Schagrin, Schagrin Associates, of Washington, D.C., argued for defendant-intervenor the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC. With him on the brief were Geert De Prest and Nicholas J. Birch.

OPINION AND ORDER

Reif, Judge:

This action involves the final determination of the U.S. Department of Commerce ("Commerce") in the administrative review of the countervailing duty ("CVD") order on certain passenger vehicle and light truck tires from the People's Republic of China for the period of review ("POR") January 1, 2017, through December 31, 2017. See Countervailing Duty Order on Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China: Final Results of Countervailing Duty Administrative Review; 2017 ("Final Determination"), 85 Fed. Reg. 22,718 (Dep't of Commerce Apr. 23, 2020) (final determination) and accompanying Issues and Decision Memorandum (Apr. 15, 2020) ("IDM"). Before the court is a United States Court of International Trade ("USCIT") Rule 56.2 motion for judgment on the agency record filed by plaintiffs Cooper (Kunshan) Tire Co., Ltd. ("Cooper Tire") and Cooper Tire & Rubber Co. Plaintiffs argue that the determination by Commerce that, based on the application of adverse facts available ("AFA"), Cooper Tire and Shandong Longyue Rubber Co., Ltd. ("Longyue") used and benefited from the Export Buyer's Credit Program ("EBCP"), is not supported by substantial evidence. Mem. of Law in Supp. of Pls.’ and Pl.-Intervenor's Mot. for J. on Agency R. ("Pls. Br.") at 3-4, ECF No. 38. This 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) (2018), and 28 U.S.C. § 1581(c) (2018).¹ The court remands the Final Determination to Commerce to take the actions as set forth infra , Section I.B.3.

BACKGROUND

Commerce initiated the administrative review on October 4, 2018, and selected two Chinese tire producers, Cooper Tire, subsidiary of Cooper Tire & Rubber Co., and Longyue, as mandatory respondents. Resp't Selection Mem. (Feb. 8, 2019), CR 4, PR 49.²

Plaintiffs Cooper Tire, Cooper Tire & Rubber Co., Vogue Tyre & Rubber Co. and plaintiff-intervenor ITG Voma Corp. (collectively "plaintiffs") now challenge Commerce's finding that, based on AFA, the mandatory respondents used and benefited from the EBCP. The EBCP, which is administered by the Export-Import Bank of the People's Republic of China ("China Export-Import Bank"), "provides loans at preferential rates for the purchase of exported goods from China." Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China: Countervailing Duty Administrative Review, Correction of Notification of Rescission, in Part, 2017 ("Preliminary Determination"), 84 Fed. Reg. 58,685 (Dep't of Commerce Nov. 1, 2019) (preliminary determination) and accompanying Preliminary Decision Memorandum (Oct. 10, 2019) ("PDM") at 25.

On March 1, 2019, Commerce issued its initial questionnaire for the administrative review to both the GOC and the respondent companies. Commerce asked several questions regarding whether the respondent companies and their respective customers had applied for or used the EBCP. Specifically, the questionnaire requested: (1) a list of the U.S. customers to whom the respondents exported during the POR; (2) information on the application process for the EBCP; and (3) details on the type and extent of assistance provided by the EBCP to each customer. See generally Initial Questionnaire (Mar. 1, 2019), PR 52. If, in response to the questionnaire, the GOC or the respondent companies asserted non-use of the program, Commerce in the questionnaire asked that the GOC and the mandatory respondents detail the steps that each took to determine that no U.S customers used the EBCP. Id.

On April 18, 2019, the GOC and the mandatory respondents submitted their initial questionnaire responses. GOC Initial Questionnaire Resp. (Apr. 18, 2019), CR 9-29, PR 73-87; Cooper Tire Questionnaire Resp. (Apr. 18, 2019), CR 30-45, PR 88-96; Longyue Questionnaire Resp. (Apr. 18, 2019), CR 46-77, PR 97-98. The GOC, Cooper Tire and Longyue all stated in their responses that neither the respondent companies nor their customers had used or benefited from the EBCP during the POR. See GOC Initial Questionnaire Resp. at 129; Cooper Tire Questionnaire Resp. at III-31-III-32; Longyue Questionnaire Resp. at 25-26.

Specifically, Cooper Tire stated in its questionnaire response that it "did not apply for, use, or benefit from [the EBCP] during the POR, and did not have any outstanding financing under this program." Cooper Tire Questionnaire Resp. at III-32. In response to Commerce's request that Cooper Tire discuss the role it played in assisting customers to obtain buyer credits and to provide documentation, Cooper Tire responded that it

[was] not aware that any of its customers applied for, used or benefited from this alleged program during the POR, and [Cooper Tire] did not provide any assistance to its customers for receiving the export buyer's credit. [Cooper Tire] did not perform any acts that in any way would permit these customers to receive any export buyer credits on its sales to these customers.

Id.

In response to Commerce's request that Cooper Tire "explain in detail the steps you took to determine that no customer used the Buyer Credit Facility," Cooper Tire responded that it "was never contacted by any of its customers to provide any information required to obtain an export buyer's credit from any Buyer Credit Facility. Accordingly, [Cooper Tire] believes that it is impossible that any of its customers could have possibly received export buyer's credit." Id. To support its claims of non-use, Cooper Tire provided Commerce with a list of its customers. Id ., Ex. 18, CR 36, PR 89.

The GOC, in response to Commerce's request for details on the type and extent of assistance provided to each U.S. customer, said that the request was "not applicable" because none of the respondent companies’ customers had used the program during the POR. GOC Initial Questionnaire Resp. at 129. The GOC, to bolster its claims of non-use, maintained that it had conducted a search of the China Export-Import Bank system and found that the EBCP was not used by the respondents or any of the respondent companies’ U.S. customers. Id. at 129-130. The GOC provided screenshots of the search queries purported to be from the China Export-Import Bank system. Id. , Ex. F.1, CR 29, PR 87. In addition, the GOC specified that these screenshots would have shown any record of U.S customer use of the EBCP, irrespective of the customer's underlying contract value. Id. at 129-130. The GOC claimed further that the screenshots demonstrated that "no disbursement was made through a correspondent or partner bank." Id. at 130.

On June 24, 2019, Commerce issued a supplemental questionnaire to the GOC.

GOC Suppl. Questionnaire (June 24, 2019), PR 129. In the questionnaire, Commerce requested that the GOC provide (1) any documents pertaining to the alleged 2013 EBCP revisions, including those related to the potential elimination of the USD 2 million threshold loan requirement, and (2) a list of partner/correspondent banks involved in the administration of the EBCP. Id. at 2-3.³ In requesting information on the threshold requirement, Commerce explained that the record indicated that the administrative measures related to the EBCP were revised in 2013. Id. at 2; see also IDM at 18. Specifically, Commerce outlined that record information suggesting that the 2013 revisions eliminated the USD 2 million threshold requirement. GOC Suppl. Questionnaire at 2; see also IDM at 17. In addition, Commerce noted that it was requesting the list of partner/correspondent banks because of record information indicating that EBCP credits could be distributed directly through those partner/correspondent banks. GOC Suppl. Questionnaire at 2-3; see also IDM at 19.

On July 8, 2019, the GOC responded to Commerce's supplemental questionnaire. Pls. Br. at 7; GOC Suppl. Questionnaire Resp. (July 8, 2019) ("SQR"), PR 135-136. However, the GOC declined still to provide information on the 2013 revisions, stating that the guidelines were "internal to the bank, not public, and not available for release." SQR at 9. Instead, the GOC provided a copy of the 2000 Administrative Measures of Export Buyer's Credit of Ex-Im Bank ("200...