Gerber Food (Yunnan) Co., Ltd. v. U.S., Slip Op. 05-84.

• Citation: 387 F.Supp.2d 1270
• Decision Date: 18 July 2005
• Docket Number: Court No. 03-00544.,Slip Op. 05-84.
• Parties: GERBER FOOD (YUNNAN) CO., LTD. and Green Fresh (Zhangzhou) Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Coalition for Fair Preserved Mushroom Trade, Defendent-Intervenor.
• Court: U.S. Court of International Trade

387 F.Supp.2d 1270

GERBER FOOD (YUNNAN) CO., LTD. and Green Fresh (Zhangzhou) Co., Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Coalition for Fair Preserved Mushroom Trade, Defendent-Intervenor.

Slip Op. 05-84.

Court No. 03-00544.

United States Court of International Trade.

July 18, 2005.

Garvey Schubert Barer (William E. Perry, Lizbeth R. Levinson and Ronald M. Wisla) for plaintiffs.

Peter D. Keisler, Assistant Attorney General, Barbara S. Williams, Attorney-in-Charge, International Trade Field Office, David M. Cohen, Director, Commercial Litigation Branch, Jeanne E. Davidson, Deputy Director, Commercial Litigation Branch, Richard P. Schroeder, Trial Attorney, United States Department of Justice; Scott D. McBride, Office of Chief Counsel, United States Department of Commerce, for defendant, of counsel.

Collier Shannon Scott, PLLC (Michael J. Coursey and Adam H. Gordon) for defendant-intervenor.

OPINION AND ORDER

STANCEU, Judge.

Plaintiffs Gerber Food (Yunnan) Co., Ltd. ("Gerber") and Green Fresh (Zhangzhou) Co., Ltd. ("Green Fresh") challenge certain aspects of a decision issued in July 2003 by the International Trade Administration, U.S. Department of Commerce ("Commerce," or the "Department") in an antidumping proceeding. The challenged decision was the culmination of an administrative review of an order, issued in 1999, imposing antidumping duties on imports of preserved mushrooms imported from the People's Republic of China ("China" or the "PRC"). Final Results and Partial Rescission of the New Shipper Review and Final Results and Partial Rescission of the Third Antidumping Duty Administrative Review for Certain Preserved Mushrooms From the People's Republic of China, 68 Fed.Reg. 41,304 (July 11, 2003) ("Final Results"). The administrative review pertained to imported preserved mushrooms from China that were subject to the antidumping duty order and that were entered for consumption during the period of February 1, 2001 through January 31, 2002 ("period of review").

Plaintiffs contend that Commerce exceeded its statutory authority, and failed to support its decision with substantial evidence on the record, in resorting to what Commerce terms "total adverse facts available" to determine the antidumping duty rate Commerce would assess on imports of subject mushrooms associated with Gerber and Green Fresh for the period of review. Relying on statutory provisions allowing it to "use an inference that is adverse to the interests of" a party that "has failed to cooperate by not acting to the best of its ability to comply with a request for information" in the review proceeding, Commerce rejected all data relevant to antidumping duty assessment rates that Gerber and Green Fresh had submitted in response to its information requests. 19 U.S.C. § 1677e(b) (2000); see 19 U.S.C. §§ 1677e(a), 1677m(d)-(e) (2000). Although it had calculated preliminary antidumping duty assessment rates for Gerber and Green Fresh of 1.17 percent and 46.61 percent, respectively, Commerce refused to calculate final antidumping duty assessment rates for Gerber and Green Fresh based on the information the two companies had submitted, and Commerce had verified, during the administrative review. Instead, Commerce assigned Gerber and Green Fresh an antidumping duty assessment rate of 198.63 percent, which was the highest rate assigned to any producer or exporter in the challenged review and the previous administrative review. In addition, this rate was the rate assigned to producers and exporters who could not establish freedom from control of the government of the PRC. Commerce applied this rate to Gerber and Green Fresh even though it previously had found as a fact that both plaintiffs were free of government control.

In the Final Results, Commerce gave as a justification for invoking "total adverse facts available" its finding that Gerber and Green Fresh had made misrepresentations to Commerce in claiming that Green Fresh, for some of the mushroom shipments to the United States occurring during the period of review, had acted as Gerber's agent and exporter in return for payment of a commission. Commerce concluded that Green Fresh's role was largely limited to providing blank sales invoices to Gerber and, accordingly, that Green Fresh did not have sufficient involvement in the international sales transactions to justify a claim that it had acted as exporter of Gerber's merchandise. Commerce further concluded that Green Fresh's participation as an agent in Gerber's transactions was a means to allow Gerber to circumvent the cash deposit requirements Commerce had applied to Gerber. Citing to the alleged misrepresentations, Commerce claimed it was justified in rejecting all the responses of both respondents to its inquiries during the entire review proceeding.

The court exercises jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(A) (2000) and 28 U.S.C. § 1581(c) (2000). Gerber and Green Fresh participated as respondents in the administrative review proceeding that resulted in the decision being challenged. Therefore, plaintiffs are "interested parties" within the meaning of 19 U.S.C. § 1677(9)(A) (2000) and, pursuant to 28 U.S.C. § 2631(c) (2000), have standing to challenge the Commerce determination.

The court concludes, for the reasons discussed herein, that Commerce exceeded its statutory authority by rejecting all the data relevant to antidumping duty assessment rates submitted by Gerber and Green Fresh and refusing to calculate specific assessment rates for the two plaintiffs. The court also concludes that certain factual determinations relied upon by Commerce in its invoking of "total adverse facts available" are not supported by substantial evidence. The court remands this matter to Commerce with instructions to conduct further proceedings in conformity with this opinion.

I. BACKGROUND

A. Commerce's Initiation of the Third Administrative Review

Commerce issued its antidumping duty order on preserved mushrooms from the PRC in early 1999. See Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order for Certain Preserved Mushrooms From the People's Republic of China, 64 Fed.Reg. 8,308 (Feb. 19, 1999). Approximately three years later, the Department announced the opportunity to request the administrative review at issue in this case, which was the third such administrative review of the antidumping duty order. See Opportunity To Request Administrative Review for Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation, 67 Fed.Reg. 4,945 (Feb. 1, 2002). Gerber and Green Fresh requested this review on February 28, 2002. On that same day, the petitioner in the antidumping investigation, the Coalition for Fair Preserved Mushroom Trade, also requested an administrative review, asking that Commerce review the mushroom import transactions of seven companies, including those of Gerber and Green Fresh. The Coalition for Fair Preserved Mushroom Trade has defendant-intervenor status in this proceeding, having satisfied the requirements for intervention set forth by 28 U.S.C. § 2631(j) and USCIT Rule 24(a). Commerce initiated the administrative review in response to the requests. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocations in Part, 67 Fed.Reg. 14,696, 14,696-97 (Mar. 27, 2002).

B. Cash Deposit Rates for Gerber and Green Fresh During the Period of Review

Under the antidumping statute and regulations, importers who enter merchandise that is within the scope of an antidumping duty order must make a cash deposit of estimated antidumping duties. See 19 U.S.C. § 1673d(c)(1)(B)(ii) (requiring the posting of a cash deposit, bond, or other security, as Commerce deems appropriate, in the final antidumping determination Commerce makes in the investigation); 19 C.F.R. § 351.211(b)(2) (requiring cash deposits of estimated antidumping duties at rates Commerce determined in the final antidumping determination, once an antidumping order is in effect); see also 19 C.F.R. § 351.221(b)(7) (establishing new cash deposit requirement during an administrative review). Commerce issues instructions to the Bureau of Customs and Border Protection ("Customs") directing the collection of the cash deposits. Actual antidumping duties are determined later, upon liquidation of the entry, which also is performed according to instructions from Commerce to Customs.

Entries of Green Fresh's and Gerber's mushrooms made during the period of review each were subject to changing cash deposit rates. From the beginning of the period of review on February 1, 2001 through July 5, 2001, the cash deposit rate in effect for importations of Gerber's mushrooms was 142.11 percent, the antidumping duty margin established for Gerber in the antidumping investigation concluded in 1999. Gerber's cash deposit rate subsequently was adjusted downward, to 121.33 percent, which was the antidumping duty assessment rate Commerce determined to apply to Gerber's mushrooms that were entered during the period covered by the first administrative review. See Amended Final Results of First New Shipper Review and First Antidumping Duty Administrative Review for Certain Preserved Mushrooms From the People's Republic of China, 66 Fed.Reg. 35,595, 35,596 (July 6, 2001). On July 6, 2001, the 121.33 percent rate became the new cash deposit rate for future entries of Gerber's mushrooms, which cash deposit rate remained in effect for the remainder of the period of review, which ended on January 31, 2002. Green Fresh obtained a cash deposit rate of 29.87 percent as a result of its requesting and obtaining a new shipper review. That cash deposit rate went into effect on August 27, 2001. See Final Results of New Shipper Review for Certain Preserved Mushrooms From the People's Republic of China, 66 Fed.Reg. 45,006, 45,007 (Aug. 27, 2001).

Gerber's and Green Fresh's cash deposit...