Gov't of Arg. v. United States

• Decision Date: 21 September 2021
• Docket Number: Consol. Court No. 20-00119,Slip Op. 21-124
• Parties: GOVERNMENT OF ARGENTINA, Plaintiff, and LDC Argentina, S.A., Consolidated Plaintiff, v. UNITED STATES, Defendant, and National Biodiesel Board Fair Trade Coalition, Defendant-Intervenor.
• Court: U.S. Court of International Trade

542 F.Supp.3d 1380

GOVERNMENT OF ARGENTINA, Plaintiff,

and

LDC Argentina, S.A., Consolidated Plaintiff,

v.UNITED STATES, Defendant,andNational Biodiesel Board Fair Trade Coalition, Defendant-Intervenor.

Slip Op. 21-124

Consol. Court No. 20-00119

United States Court of International Trade.

September 21, 2021

Frank H. Morgan, Trade Law Defense PLLC, of Alexandria, VA, argued for Plaintiff Government of Argentina.

Jessica E. Lynd, White & Case, LLP, of Washington, D.C., argued for Consolidated Plaintiff LDC Argentina, S.A. With them on the joint brief was Gregory J. Spak.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With him on the brief were Brian M. Boyton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of Counsel Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance.

Myles S. Getlan, Cassidy Levy Kent (USA) LLP, of Washington, D.C., for Defendant-Intervenor National Biodiesel Board Fair Trade Coalition. With him on the brief were Jack A. Levy, Thomas M. Beline, and Chase J. Dunn.

OPINION

Katzmann, Judge:

This case involves a challenge to the Department of Commerce's ("Commerce") changed circumstances review ("CCR") of the countervailing duty ("CVD") order for biodiesel from Argentina. Plaintiff the Government of Argentina ("GOA") and Consolidated Plaintiff LDC Argentina S.A. ("LDC"), a processor and exporter of biodiesel from Argentina, (collectively, "Plaintiffs"), bring this action against the United States ("the Government") to appeal Commerce's Biodiesel from Argentina: Final Results of Countervailing Duty Changed Circumstances Review, 85 Fed. Reg. 27,987 (Dep't Commerce May 12, 2020) ("Final Results"). Specifically, Plaintiffs argue that Commerce's Final Results were: (1) not in accordance with law because they applied an impermissible statutory framework; (2) supported by speculation rather than substantial evidence; and (3) unlawfully issued after the regulatory deadline. Joint Mem. of Points and Auths. in Supp. of Pl.’s and Consol. Pl.’s Rule 56.2 Mot. for J. Upon the Agency R., Dec. 7, 2020, ECF No. 24 ("Pls.’ Br."). The Government and Defendant-Intervenor the National Biodiesel Board Fair Trade Coalition ("NBB") oppose Plaintiffs’ claims. Def.’s Resp. to Pls.’ Rule 56.2 Mot. For J. Upon the Agency R., ECF No. 26, Feb. 22, 2021 ("Def.’s Br."); Def.-Inter. Nat'l Biodiesel Bd. Fair Trade Coal.’s Resp. to Pl.’s Rule 56.2 Mot. for J. on the Agency R., Feb. 22, 2021, ECF No. 25 ("Def.-Inter.’s Br."). The court denies Plaintiffs’ motion for judgment on the agency record and sustains Commerce's Final Results.

BACKGROUND

I. Legal & Regulatory Framework

To empower Commerce to offset economic distortions caused by countervailable subsidies and dumping, Congress promulgated the Tariff Act of 1930. Sioux Honey Ass'n v. Hartford Fire Ins., 672 F.3d 1041, 1046–47 (Fed. Cir. 2012) ; ATC Tires Priv. Ltd. v. United States, 42 CIT ––––, ––––, 322 F. Supp. 3d 1365, 1366 (2018). That Act, "as amended, allows Commerce to impose ... duties on imports that injure domestic industries." Guangdong Wireking Housewares & Hardware Co. v. United States, 745 F.3d 1194, 1196 (Fed. Cir. 2014). "Under the Tariff Act's framework, Commerce may -- either upon petition by a domestic producer or of its own initiative -- begin an investigation into potential countervailable subsidies and, if appropriate, issue orders imposing duties on the subject merchandise." ATC Tires, 322 F. Supp. 3d at 1366–67 ; see also 19 U.S.C. §§ 1671, 1673 ; Sioux Honey, 672 F.3d at 1046–47. A subsidy is countervailable if the following elements are satisfied: (1) a government or public authority has provided a financial contribution; (2) a benefit is thereby conferred upon the recipient of the financial contribution; and (3) the subsidy is specific to a foreign enterprise or foreign industry, or a group of such enterprises or industries. 19 U.S.C. § 1677(5). If Commerce determines that the government of another country is providing, directly or indirectly, a countervailable subsidy with respect to the manufacture, production, or export of a class or kind of merchandise imported, sold, or likely to be sold for import, into the United States, and the International Trade Commission ("ITC") determines that an industry in the United States is materially injured or threatened with material injury thereby, then Commerce shall impose CVDs upon such merchandise equal to the amount of the net countervailable subsidy. See 19 U.S.C. § 1671(a).

Usually, antidumping ("AD") and CVD orders undergo periodic administrative review pursuant to 19 U.S.C. § 1675(a). CCRs, on the other hand, are authorized by 19 U.S.C. § 1675(b) and occur when Commerce "receives information concerning, or a request from an interested party for a review of ... a final affirmative determination" that "shows changed circumstances sufficient to warrant a review of such determination." 19 U.S.C. § 1675(b)(1). Under Commerce's implementing regulation, "[a]n interested party may request a changed circumstances review ... of an order" and the Secretary "will determine whether to initiate a changed circumstances review" within forty-five days after such a request is filed. 19 C.F.R. § 351.216(b). "Unless the Secretary finds that good cause exists, the Secretary will not review a final determination in an investigation ... less than 24 months after the date of publication of notice of the final determination." 19 C.F.R. § 351.216(c). On the other hand, "if the Secretary decides that changed circumstances sufficient to warrant a review exist, the Secretary will conduct a changed circumstances review." 19 C.F.R. § 351.216(d).

A changed circumstances review is conducted in accordance with 19 C.F.R. § 351.221. Id. Procedurally, that regulation provides that "after receipt of a timely request for a review, or on the Secretary's own initiative when appropriate, the Secretary will:" (1) publish the notice of review initiation in the Federal Register; (2) send questionnaires requesting factual information to appropriate interest parties; (3) conduct a verification if appropriate; (4) issue a preliminary determination and publish the notice of the preliminary determination in the Federal Register, including rates determined and an invitation for argument; (5) issue a final determination and publish the notice of the final decision in the Federal Register; and (6) instruct the Customs Service to collect cash deposits at the revised rates on future entries, if cash deposit rates were revised. 19 C.F.R. § 351.221(b). The final decision in a changed circumstances review must be issued "within 270 days after the date on which the changed circumstances review is initiated, or within 45 days if all parties to the proceeding agree to the outcome of the review." 19 C.F.R. § 351.216(e). Substantively, "a CCR may address a broad range of matters and the only limitation in the statute is the requirement that there be changed circumstances sufficient to warrant a review." Marsan Gida Sanayi Ve Ticaret A.S. v. United States, 35 CIT 222, 228, 2011 WL 546815 (2011) (" Marsan Gida"); see also Or. Steel Mills Inc. v. United States, 862 F.2d 1541, 1543–44 (Fed. Cir. 1988).

II. Factual and Procedural History

A. The Underlying CVD Investigation

On April 12, 2017, Commerce initiated a CVD investigation into imports of biodiesel from Argentina and Indonesia, based on a petition filed by NBB.

Biodiesel from Argentina and Indonesia: Initiation of Countervailing Duty Investigations, 82 Fed Reg. 18,423, 18,424 (Dep't Commerce Apr. 19, 2017). During this investigation, Commerce selected LDC as a mandatory respondent, as well as its affiliate Louis Dreyfus Claypool.¹ See Biodiesel from the Republic of Argentina: Final Affirmative Countervailing Duty Determination, 82 Fed. Reg. 53,477 (Dep't Commerce Nov. 16, 2017). On November 16, 2017, Commerce published its final determination in the CVD investigation. Id. Commerce concluded that the GOA's export tax on soybeans, which was thirty percent higher than the export tax on biodiesel, was designed to benefit biodiesel producers, since soybeans are the primary input for biodiesel. Mem. from G. Taverman to J. Maeder "Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Biodiesel from the Republic of Argentina 25–28 (Dep't Commerce Nov. 6, 2017). Consequently, Commerce determined that LDC was the beneficiary of a subsidy program and received soybeans for less-than-adequate remuneration ("LTAR") due to export taxes. Id. On January 4, 2018, Commerce published its CVD Order, setting the duty rate for biodiesel from Argentina at 72.28%. Biodiesel from the Republic of Argentina and the Republic of Indonesia: Countervailing Duty Orders, 83 Fed. Reg. 522 (Dep't Commerce Jan. 4, 2018).²

B. The CCR Investigation

On September 21, 2018, the GOA petitioned Commerce to undertake a CCR of the CVD Order. GOA's Letter re Biodiesel from Argentina: Request for Changed Circumstances Review (Sept. 21, 2018), P.R. 1. The GOA wanted Commerce to adjust the cash deposit rates on biodiesel to reflect purported changes in Argentina's export tax regime. Id. On November 13, 2018, Commerce initiated a CCR of the CVD Order. See Biodiesel from Argentina: Initiation of Changed Circumstances Reviews of the Antidumping and Countervailing Duty Orders, 83 Fed. Reg. 56,300 (Dep't Commerce Nov. 13, 2018) ("CCR Initiation"). On July 9, 2019, Commerce issued preliminary results in the CCR, stating that it had found changed circumstances warranting calculation of a new cash deposit rate.

Biodiesel from Argentina: Preliminary Results of Changed Circumstances Reviews of the Antidumping and Countervailing Duty Orders, 84 Fed. Reg. 32,714, 32,719 (Dep't Commerce July 9, 2019) ("Preliminary Results"...