Crawfish Processors Alliance v. U.S.

• Citation: 477 F.3d 1375
• Decision Date: 27 February 2007
• Docket Number: No. 2006-1269.,2006-1269.
• Parties: CRAWFISH PROCESSORS ALLIANCE, Louisiana Department of Agriculture and Forestry, and Bob Odom, Commissioner, Plaintiffs, v. UNITED STATES, Defendant-Appellee, v. Hontex Enterprises, Inc. (doing business as Louisiana Packing Company), Defendant, and Qingdao Rirong Foodstuff Co., Ltd. and Yancheng Haiteng Aquatic Products & Foods Co., Ltd., Defendants, and Bo Asia, Inc., Defendant, and Grand Nova International, Inc., Qingdao Zhengri Seafood Co., Inc., and Yangcheng Yaou Seafood Co., Defendants, and Pacific Coast Fisheries Corp., and Fujian Pelagic Fishery Group Co., Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

477 F.3d 1375

CRAWFISH PROCESSORS ALLIANCE, Louisiana Department of Agriculture and Forestry, and Bob Odom, Commissioner, Plaintiffs, v. UNITED STATES, Defendant-Appellee, v. Hontex Enterprises, Inc. (doing business as Louisiana Packing Company), Defendant, and Qingdao Rirong Foodstuff Co., Ltd. and Yancheng Haiteng Aquatic Products & Foods Co., Ltd., Defendants, and Bo Asia, Inc., Defendant, and Grand Nova International, Inc., Qingdao Zhengri Seafood Co., Inc., and Yangcheng Yaou Seafood Co., Defendants, and

Pacific Coast Fisheries Corp., and Fujian Pelagic Fishery Group Co., Defendants-Appellants.

No. 2006-1269.

United States Court of Appeals, Federal Circuit.

February 27, 2007.

Will E. Leonard, Jr., Adduci, Mastriani & Schaumberg, LLP, Washington, DC, John C. Steinberger, for Plaintiffs-Appellees.

Ronald M. Wisla, Garvey, Schubert & Barer, David Silverbrand, Jeanne E. Davidson, David M. Cohen, Department of Justice, Berniece A. Browne, John D. McInerney, Marisa Goldstein, Department of Commerce, Washington, DC, for Defendants-Appellants.

Before RADER, Circuit Judge, ARCHER, Senior Circuit Judge, and MOORE, Circuit Judge.

RADER, Circuit Judge.

The United States Court of International Trade dismissed Crawfish Processors Alliance v. United States, Consol. Court No. 02-00376, a challenge to the United States Department of Commerce's (Commerce's) final results set out in Notice of Final Results of Antidumping Duty Administrative Review, and Final Partial Recission of Antidumping Duty Administrative Review of Freshwater Crawfish Tail Meat from the People's Republic of China, 67 Fed.Reg. 19,546 (Apr. 22, 2002) (Final Results). Crawfish Processors Alliance v. United States, No. 02-00376, 2005 WL 3578035, at *1 (Dec. 29, 2005) (Dismissal Order). In dismissing the case, among other rulings not appealed to this court, the Court of International Trade sustained Commerce's determination that Fujian Pelagic Fishery Group Co. (Fujian) and Pacific Coast Fisheries Corp. (Pacific Coast) are not affiliated entities under 19 U.S.C. § 1677(33)(E). Crawfish Processors Alliance v. United States, 343 F.Supp.2d 1242, 1267-68 (Ct. Int'l Trade 2004) (Remand Order). Because Title 19 cannot sustain the Court of International Trade's determination, this court reverses.

I

Fujian, Pacific Coast (incorporated under the laws of the State of Washington), and eight other interested parties initiated a civil action to contest Commerce's antidumping decision in Final Results. The United States assesses antidumping duties on the basis of the "dumping margin." "The term `dumping margin' means the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise." 19 U.S.C. § 1677(35)(A) (2000). Commerce assesses the "normal value" by using the exporting (home) market price, an appropriate third-country market price, or the constructed value. 19 U.S.C. § 1677b (2000). Commerce assesses the United States price, depending upon the relationships and the location of the sales, according to two alternative statutory methodologies. 19 U.S.C. § 1677a (2000). The "export price" method considers

the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States.

19 U.S.C. § 1677a(a) (2000) (emphases added). The "constructed export price" method considers

the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter.

19 U.S.C. § 1677a(b) (2000) (emphases added). In choosing between these methods, Commerce must consider any affiliation between the parties. The determination of affiliation is the central issue of this appeal.

II

Commerce determined that Fujian and Pacific Coast were not affiliated. The record shows that Fujian owned and exercised more than 5% of Pacific Coast's public shares during the period of review, an amount sufficient to establish affiliation. Remand Order at 1267. Pacific Coast issued the public shares to Fujian under the laws of the State of Washington. Nonetheless, Commerce discounted the evidence of ownership because the record showed no evidence of Fujian making a transfer of cash or merchandise into Pacific Coast. In response to Commerce's request for documentation, Fujian submitted a promissory note committing it to pay the stock price in merchandise and documents showing satisfaction of approximately half of that price in a single transaction with a seafood broker, MISB, Inc. According to Commerce, Fujian's documentation did not show that the merchandise, which was to serve as Fujian's investment in Pacific Coast, originated from Fujian. The documentation also did not indicate when the merchandise at issue entered into the United States. Alternatively, Commerce also determined that if Fujian did acquire a portion of Pacific Coast's equity during the review period, it was less than 5%.

Without a finding of affiliation, Fujian received an antidumping margin of 173.60% on sales to Pacific Coast. This antidumping margin reflected a price from Fujian to Pacific Coast at a rate below the market rate per pound. Fujian and Pacific Coast assert that if Pacific Coast's sales price to United States buyers had been considered the first unaffiliated sale (and not the sales price from Fujian to Pacific Coast), that the starting point transfer price would have been more in line with market rates. Thus, Fujian and Pacific Coast initiated a civil action in the Court of International Trade to challenge Commerce's affiliation determination.

The Court of International Trade affirmed Commerce's decision that Fujian and Pacific Coast were not affiliated. Remand Order at 1267-68. In its Remand Order, the Court of International Trade held that "Commerce properly determined that Fujian and Pacific Coast are not affiliated parties under the relevant statutes" because "Fujian had not made an investment, whether in cash or in the form of a promissory note, in Pacific Coast" and because "Fujian did not exercise control over Pacific Coast." Id. at 1269. The Court of International Trade agreed with Commerce that "Fujian's submissions . . . do not sufficiently demonstrate that the merchandise sold by Pacific Coast originated from Fujian." Id. at 1268.

However, the Court of International Trade did not enter a final order at that time, but remanded the case for further consideration on issues not appealed to this court. Again, in September of 2005, the Court of International Trade affirmed Commerce's first remand results, but remanded a second time. Crawfish Processors Alliance v. United States, 395 F.Supp.2d 1330 (Ct. Int'l Trade 2005). On December 29, 2005, the Court of International Trade affirmed Commerce's second remand results. Dismissal Order, 2005 WL 3578035, at *1. Fujian and Pacific Coast filed a timely appeal to this court.

III

The standard for affiliation involves a question of statutory interpretation. In interpreting the statute, this court seeks first the unambiguous meaning of the language. Int'l Bus. Mach. Corp. v. United States, 201 F.3d 1367, 1372 (Fed. Cir.2000) (citing Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)) ("Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and `the statutory scheme is coherent and consistent.'" (quoting United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989))). To detect any ambiguity, this court looks at "the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Robinson, 519 U.S. at 341, 117 S.Ct. 843. The statute defines "affiliated":

The following persons shall be considered to be "affiliated" or "affiliated persons":

* * * *

(E) Any person directly or indirectly owning, controlling, or holding with power to vote, 5 percent or more of the outstanding voting stock or shares of any organization and such organization.

* * * *

For purposes of this paragraph, a person shall be considered to control another person if the person is legally or operationally in a position to exercise restraint or direction over the other person.

19 U.S.C. § 1677(33) (2000) (emphasis added). Commerce regulations provide further information about affiliated parties:

"Affiliated persons" and "affiliated parties" have the same meaning as in section 771(33) of the Act. In determining whether control over another person exists, within the meaning of section 771(33) of the Act, the Secretary will consider the following factors, among others: corporate or family groupings; franchise or joint venture agreements; debt financing; and close supplier relationships. . . . The Secretary will consider the temporal aspect of a relationship in determining whether control exists; normally, temporary circumstances will not suffice as evidence of control.

19 C.F.R. § 351.102(b) (2006) (emphasis added). While aspects of this regulation do not speak directly to subparagraph (E) of section 1677(33), this court views its language as instructive on the meaning of "control" and "affiliated parties" under the statute. In fact, the Government has argued the applicability of 19 C.F.R. § 351.102(b) to this court.

The statute clarifies, in quite broad terms, that owning, controlling, or holding, "directly or indirectly," over 5% of an entity's stock...