D & L Supply Co. v. U.S.
| Decision Date | 14 April 1998 |
| Docket Number | Court No. 92-06-00424.,Slip Op. 98-45. |
| Citation | 6 F.Supp.2d 914 |
| Parties | D & L SUPPLY CO. and Guangdong Metals & Minerals Import & Export Corporation; U.V. International, Sigma Corporation, Southern Star, Inc., City Pipe and Foundry, Inc., Long Beach Iron Works, Inc., and Overseas Trade Corporation, Plaintiffs, v. UNITED STATES, Defendant, Alhambra Foundry Inc., Allegheny Foundry Co., Bingham & Taylor Division, Virginia Industries, Inc., Charlotte Pipe & Foundry Co., East Jordan Iron Works, Inc., Lebaron Foundry Inc., Municipal Castings, Inc., Neenah Foundry Co., Opelika Foundry Co., Inc., Tyler Pipe Industries, Inc., U.S. Foundry & Manufacturing Co. and Vulcan Foundry, Inc., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Henry R. Felix); of counsel: Stephen J. Powell, Chief Counsel for Import Administration, U.S. Department of Commerce (Jeffrey C. Lowe), Washington, DC, for defendant.
Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal, Robin H. Gilbert and Mary T. Staley), Washington, DC, for Petitioners.
On July 8, 1997, the Court remanded this matter to the Department of Commerce, International Trade Administration ("Commerce"). See D & L Supply Co. v. United States, 21 CIT ___, Slip Op. 97-91, 1997 WL 397523 (1997). The remand was ordered pursuant to the decision (May 8, 1997) and mandate (June 30, 1997) of the Court of Appeals for the Federal Circuit ("CAFC"), directing this Court to vacate its decision to affirm the use of 92.74% as the best information available ("BIA") rate for the 1990-91 administrative review in Commerce's initial redetermination pursuant to court remand, entitled Iron Construction Castings From the People's Republic of China, Final Results of Redetermination Pursuant to Court Remand, Slip Op. 93-245 (June 6, 1994). In particular, the Court ordered Commerce to revise the 1990-91 BIA rate it applied without relying on an antidumping duty rate that has been vacated as erroneous, and in a manner consistent with 19 U.S.C. § 1677e(c) (1988). D & L, 21 CIT at ___, Slip Op. 97-91, at 2.
Commerce's established procedures allow it to use the highest calculated rate available for any company from the less than fair value ("LTFV") investigation or any previous review as BIA for uncooperative exporters. No producer or exporter of iron castings from the People's Republic of China ("PRC") responded to Commerce's questionnaires in the fourth review. Commerce therefore originally selected 92.74% as the BIA rate for the review, the rate calculated during the third review period (1989-90) for the only PRC manufacturer or exporter that responded to Commerce's questionnaire, Guangdong Metals & Minerals Import & Export Corp. See Final Results of Antidumping Duty Administrative Review: Certain Iron Construction Castings From the People's Republic of China, 57 Fed.Reg. 10,644 (Mar. 27, 1992). In the litigation covering the third review period, the 92.74% BIA rate was reduced to 31.51%. See Sigma Corp. v. United States, 19 CIT 753, 888 F.Supp. 159 (1995). This Court nevertheless upheld Commerce's decision to retain the 92.74% BIA rate for the fourth period of review. The CAFC subsequently remanded the action for Commerce to revise this BIA selection in favor of a rate that had not been invalidated while the BIA determination was still under judicial review. See D & L Supply Co. v. United States, 113 F.3d 1220, 1224 (Fed.Cir.1997). Thereafter, the CAFC invalidated the reduced third review period BIA rate, as well as reduced BIA rates for the first and second review periods, in a consolidated action. See Sigma Corp. v. United States, 117 F.3d 1401 (Fed.Cir.1997).
On September 15, 1997, Commerce released draft remand results in this action and invited interested parties to comment. After receiving comments from certain U.S. importers and from domestic industry, Commerce filed its Final Results of Redetermination Pursuant to Court Remand, D & L Supply Co. v. United States, Consol. Ct. No. 92-06-00424 ("Remand Results") (Oct. 8, 1997). In the Remand Results, Commerce relied on the 25.52% petition rate, which reflects the overall average of the margins alleged in the petition, as BIA for the fourth review period.
D & L Supply Co. ("D & L") and U.V. International, Sigma Corporation, City Pipe & Foundry, Inc. and Long Beach Iron Works, Inc. (collectively "Sigma") move for another remand, claiming that Commerce should use as BIA the 11.66% rate it calculated in the final LTFV determination because this is the only valid, accurate rate available. In particular, D & L and Sigma argue that Commerce again chose an invalidated BIA rate, in violation of the CAFC's D & L determination. D & L and Sigma further contend that using the average petition rate contravenes the antidumping statute's purpose of calculating accurate margins and fails to accomplish the basic goal of BIA — to choose a rate reasonably adverse to the interests of the uncooperative parties — at the expense of accuracy and a close relation to commercial practices. D & L's Comments on the Remand Results at 1-10; Sigma's Comments on the Remand Results at 1-8.
Alhambra Foundry Inc., Allegheny Foundry Co., Bingham & Taylor Division, Virginia Industries, Inc., Campbell Foundry Co., Charlotte Pipe & Foundry Co., East Jordan Iron Works, Inc., Lebaron Foundry Inc., Municipal Castings, Inc., Neenah Foundry Co., Opelika Foundry Co., Inc., Tyler Pipe Industries, Inc., U.S. Foundry & Manufacturing Co. and Vulcan Foundry, Inc. (collectively "Petitioners") also contest Commerce's choice of BIA in the Remand Results. Petitioners allege that, instead of using the average petition rate as BIA, Commerce should have used the highest petition rate, 50.95%, in accordance with Certain Cut-to-Length Carbon Steel Plate From Sweden: Final Results of Antidumping Duty Administrative Review ("Swedish Steel Plate"), 62 Fed.Reg. 46,947 (Sept. 5, 1997). While Petitioners recognize that the average petition rate is higher than the final rate found in the LTFV investigation, they note that this rate may be below the dumping margins found in subsequent reviews after the remand proceedings are complete. Petitioners further claim that Commerce's rejection of the highest petition rate because it was based on dumping calculations for only one type of casting is unrelated to Commerce's practice of basing BIA on the highest rate for uncooperative respondents. Petitioners' Comments on the Remand Results at 1-8.
Commerce first responds to D & L's and Sigma's complaints, stating that the 25.52% average petition rate has not been invalidated. Commerce then responds to Petitioners, asserting that it rejected the highest rate from the petition because this rate was solely based on dumping for light castings, only one of four kinds of products covered by the petition. Def.'s Rebuttal to Comments on the Remand Results at 1-25.
D & L adds that Petitioners' position is without merit because the highest petition rate is invalid. D & L's Rebuttal to Comments on the Remand Results at 2-10. D & L further responds that Swedish Steel Plate is distinguishable because the respondents in that case attempted to manipulate the "facts available" process, while the respondents here "simply chose not to respond because Commerce kept changing the methodology it used to calculate the margins," hence foreclosing them from the United States market. Id. at 3. Finally, D & L attempts to distinguish cases where this court upheld Commerce's use of the average petition rate as BIA, arguing that the respondents in those cases attempted to manipulate the review process by obtaining a low rate and then refusing to cooperate. D & L's Reply to Rebuttal Comments on the Remand Results at 1-11.
In response to D & L, Petitioners assert that case law reinforces Commerce's decision to select a petition rate for BIA even when a different rate is calculated in the final determination. Petitioners' Rebuttal to Comments on the Remand Results at 1-4.
Commerce properly declined to use the highest petition rate in this case. As a preliminary matter, the Court declines to entertain D & L's differentiation of Swedish Steel Plate on the ground that the respondents in that case attempted to manipulate the review process. The statute, regulations and case law have not carved an exception to BIA for non-respondent companies such as D & L who have become frustrated with Commerce's methodology and its adverse results.
Contrary to Petitioners' assertions, Commerce adhered to its usual practice in selecting the average petition BIA rate for uncooperative firms under the circumstances. Commerce ordinarily selects BIA from a petition in the initial LTFV investigation, not from a petition in an administrative review. In the few cases where Commerce has selected BIA from an administrative review, however, Commerce has relied upon the simple average petition rate. See Industria de Fundicao Tupy v. United States, 20 CIT ___, ___, 936 F.Supp. 1009, 1019 n. 7 (1996); Krupp Stahl A.G. v. United States, 17 CIT 450, 452, 822 F.Supp. 789, 791 (1993).
Moreover, the present situation is distinguishable from Swedish Steel Plate, where Commerce resorted to the use of the highest petition rate for BIA. The petition in that case calculated a range of dumping margins, each of which covered the entire class or kind of merchandise within the scope of investigation. Remand Results at 12-13. In contrast, the petition filed in this case calculated separate dumping margins for the three different types of heavy iron construction castings and the one type of light casting. Id....
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