Fujian Yinfeng Imp & Exp Trading Co. v. United States

• Decision Date: 21 December 2022
• Docket Number: 21-00087,Slip Op. 22-151
• Parties: FUJIAN YINFENG IMP & EXP TRADING CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and COALITION OF AMERICAN MILLWORK PRODUCERS, Defendant-Intervenor.
• Court: U.S. Court of International Trade

FUJIAN YINFENG IMP & EXP TRADING CO., LTD., Plaintiff,
v.
UNITED STATES, Defendant,

and COALITION OF AMERICAN MILLWORK PRODUCERS, Defendant-Intervenor.

No. 21-00087

Slip Op. 22-151

Court of Appeals of International Trade

December 21, 2022

[Plaintiff's Motion for Judgment on the Agency Record is denied and Commerce's Final Determination is sustained.]

Gregory S. Menegaz and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, D.C., argued for Plaintiff Fujian Yinfeng Imp & Exp Trading Co., Ltd. With them on the briefs were J. Kevin Horgan.

Timothy C. Brightbill and Laura El-Sabaawi, Wiley Rein, LLP, of Washington, D.C., argued for Defendant-Intervenor Coalition of American Millwork Producers. With them on the briefs were Elizabeth S. Lee.

Iona Cristei, Trial Attorney, Commercial Litigation Branch, U.S. Department of Justice, Washington, D.C., for Defendant United States. With her on the briefs and supplemental briefs were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director. Of Counsel Shelby M. Anderson, Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance.

Before: Gary S. Katzmann, Judge

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OPINION

Gary S. Katzmann, Judge

This case concerns Fujian Yinfeng Imp. & Exp. Trading Co.'s ("Yinfeng" or "Plaintiff") challenge to the Department of Commerce's ("Commerce") selection of Brazil, rather than Malaysia, as the primary surrogate country ("PSC") in its antidumping duty investigation of wood mouldings and millwork products from China, a nonmarket economy ("NME") country.^[1] See Wood Mouldings and Millwork Products from the People's Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value, 86 Fed.Reg. 63 (Dep't Commerce Jan. 4, 2021), P.R. 667 ("Final Determination"), and accompanying Issues and Dec. Mem., ECF No. 14-5, P.R. 661 ("IDM"), as amended by Wood Mouldings and Millwork Products from the People's Republic of China: Amended Final Antidumping Duty Determination and Antidumping Duty Order, 86 Fed.Reg. 9,486 (Dep't Commerce Feb. 16, 2021), P.R. 680 ("Am. Final Determination"). Yinfeng argues that where Malaysia offers better data to value its factors of production and noninput costs, among other advantages, no reasonable mind might accept Brazil as the superior PSC. The court assesses that each of Commerce's constituent determinations underpinning its overall PSC selection is supported by substantial evidence and otherwise in accordance with law, and that Yinfeng has raised no arguments sufficient to undermine Commerce's multifactorial selection of Brazil. Accordingly, Plaintiff's Motion for Judgment on the Agency Record is denied, and Commerce's Final Determination is sustained.

BACKGROUND

I. Legal and Regulatory Framework for Primary Surrogate Country Selections

The Tariff Act of 1930 empowers Commerce to investigate allegations that a product is being "dumped." Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1047 (Fed Cir. 2012)

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(discussing 19 U.S.C. § 1673). "Dumping occurs when a foreign company sells a product in the United States for less than 'fair value' -- that is, for a lower price than its [normal value]." Jiangsu Zhongji Lamination Materials Co., (HK) v. United States, 43 CIT__,__, 396 F.Supp.3d 1334, 1340 (2019) (quoting Sioux Honey, 672 F.3d at 1046). Accordingly, Commerce determines whether dumping is occurring by comparing the export price^[2] of the subject merchandise with its "normal value," typically the price at which the subject merchandise is sold for consumption in the home market. See 19 U.S.C. § 1677b(a)(1)(B)(i).

When the subject merchandise is exported from an NME country and Commerce finds that the available information is inadequate to reliably calculate normal value, Commerce values the merchandise using surrogate values derived from another market economy country -- referred to as the "primary surrogate country" ("PSC"); such surrogate values cover "the factors of production utilized in producing the merchandise" -- which include, but are not limited to, labor, raw materials, energy, and depreciation -- as well as "general expenses and profit plus the cost of containers, coverings, and other expenses." Id. § 1677b(c)(1)(A)-(B), (c)(3)(A)-(D).

Concerning "factors of production," Commerce is required by statute to use "the best available information" in selecting surrogate values. Id. § 1677b(c)(1)(B). The term "best

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available information" is not further defined, affording Commerce "broad discretion" in making such determinations. Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378, 1386 (Fed. Cir. 2014); see also QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011) (citing Ad Hoc Shrimp Trade Action Comm. v. United States, 618 F.3d 1316, 1322 (Fed. Cir. 2010)). Commerce typically selects surrogate values for factors of production that are "(1) publicly available; (2) contemporaneous with the period of investigation . . .; (3) a broad market average covering a range of prices; (4) from an approved surrogate country; (5) specific to the input in question; and (6) tax exclusive." Ancientree Cabinet Co. v. United States, 45 CIT__,__, 532 F.Supp.3d 1241, 1249 (2021) (citation omitted). There is no hierarchy among these criteria. United Steel & Fasteners, Inc v. United States, 44 CIT__,__, 469 F.Supp.3d 1390, 1397-99 (2020).

Concerning "general expenses and profit . . . and other expenses," 19 U.S.C. § 1677b(c)(1)(B), Commerce values these noninput factors of production by deriving ratios from financial statements of producers of identical or comparable merchandise in the surrogate country. See 19 C.F.R. § 351.408(c)(4); see also Ad Hoc Shrimp, 618 F.3d at 1319-20 (citing Dorbest Ltd. v. United States, 604 F.3d 1363, 1368 (Fed. Cir. 2010)). Here too, Commerce requires surrogate financial statements that provide "the best available information" and has "broad discretion," Weishan Hongda Aquatic Food Co. v. United States, 917 F.3d 1353, 1364-1365 (Fed. Cir. 2019), to evaluate financial statements based on their specificity, contemporaneity, data quality, and comparability with the NME producers' production experience, see T.T. Int'l Co. v. United States, 44 CIT__,__, 439 F.Supp.3d 1370, 1382 (2020); see also Shenzhen Xinboda Indus. Co. v. United States, 38 CIT__,__, 976 F.Supp.2d 1333, 1368 (2014). Where possible, Commerce prefers to

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use multiple financial statements to calculate surrogate financial ratios. See NTSF Seafoods Joint Stock Co. v. United States, 44 CIT__,__, 487 F.Supp.3d 1310, 1318 (2020).

Typically, Commerce derives both factors of production and noninput costs of production from one surrogate country. See 19 C.F.R. § 351.408(c)(2), (4). Although it is Commerce's general practice to "value all factors in a single surrogate country," id. § 351.408(c)(2), the agency may also "mix and match" surrogate country values where a non-primary country provides some values that are more accurate, Lasko Metal Prods., Inc. v. United States, 16 CIT 1079, 1080-82, 810 F.Supp. 314, 316-17 (1992), aff'd, 43 F.3d 1442 (Fed. Cir. 1994). Commerce will "determine the 'best available information' in a reasonable manner on a case-by-case basis." Timken Co. v. United States, 25 CIT 939, 947, 166 F.Supp.2d 608, 616 (2001) (citing Lasko Metal, 43 F.3d at 1446); see also Hardwood and Decorative Plywood from the People's Republic of China: Final Determination of Sales at Less than Fair Value, 78 Fed.Reg. 58,273 (Dep't Commerce Sept. 23, 2013), and accompanying Issues and Dec. Mem. Cmt. 7C at 60 (Sept. 16, 2013) ("Hardwood & Decorative Plywood from China IDM") ("In determining the suitability of surrogate values, [Commerce] considers the available evidence with respect to the particular facts of each case and evaluates the suitability of each source on a case-by-case basis."). While the controlling statute "does not say - anywhere -- that [surrogate values] must be ascertained in a single fashion," Lasko Metal, 43 F.3d at 1446, Commerce is at all times constrained by the statutory purpose "to facilitate the determination of dumping margins as accurately as possible," id. (quoting Allied-Signal Aerospace Co. v. United States, 996 F.2d 1185, 1191 (Fed. Cir. 1993)).

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II. Factual and Procedural Background

A. Initiation of Commerce's Less-Than-Fair-Value Investigation

On January 8, 2020, the Coalition of American Millwork Producers ("the Coalition" or "Defendant-Intervenor") filed an antidumping petition concerning imports of wood mouldings and millwork products from China. See Pets. for Imposition of Antidumping & Countervailing Duties (Jan. 8, 2020), P.R. 2. In response, on February 5, 2020, Commerce initiated a less-than-fair-value ("LTFV") investigation into wood mouldings and millwork products from China imported during the period of investigation ("POI") of July 1, 2019 through December 31, 2019. Wood Mouldings and Millwork Products from Brazil and the People's Republic of China: Initiation of Less-Than-Fair-Value Investigations, 85 Fed.Reg. 6,502, 6,503 (Dep't Commerce Feb. 5, 2020), P.R. 117. Yinfeng, a mandatory respondent^[3] in the investigation, was selected for individual examination^[4]. See Resp't Selection Mem. at 1, 5-6 (Dep't Commerce Mar. 2, 2020), P.R. 145.

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On May 8, 2020, Commerce invited all interested parties to submit information to aid Commerce's selection of a surrogate country and surrogate values. See Req. for Econ. Dev., Surrogate Country & Surrogate Value Cmts. & Info. at 1 (Dep't Commerce May 8, 2020), P.R. 333 ("Req. for SV Cmts.").^[5] In its Request for Comments, Commerce stated that it would not consider information received after June 17, 2020 or rebuttal comments received after June 29, 2020 -- except as permitted by 19 C.F.R. § 351.301(c)(3) -- in reaching its preliminary...