Grobest & I–Mei Indus. (Vietnam) Co. v. United States

• Decision Date: 31 July 2012
• Citation: 34 ITRD 1818,853 F.Supp.2d 1352
• Court: U.S. Court of International Trade
• Parties: GROBEST & I–MEI INDUSTRIAL (VIETNAM) CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, Ad Hoc Shrimp Trade Action Committee, et al., Defendant–Intervenors.

853 F.Supp.2d 1352

34 ITRD 1818

GROBEST & I–MEI INDUSTRIAL (VIETNAM) CO., LTD., et al., Plaintiffs,

v.UNITED STATES, Defendant,Ad Hoc Shrimp Trade Action Committee, et al., Defendant–Intervenors.

United States Court of

International Trade.

Slip Op. 12–100.

Court No. 10–00238.¹

July 31, 2012.

Matthew R. Nicely, David S. Christy, Jr., and David J. Townsend, Thompson Hine LLP, of Washington, DC, for the Plaintiffs Grobest & I–Mei Industrial (Vietnam) Co., Ltd.; Bac Lieu Fisheries Joint Stock Co.; C.P. Vietnam Livestock Corp.; Ca Mau Seafood Joint Stock Co.; Cadovimex Seafood Import–Export and Processing Joint–Stock Co.; Cafatex Fishery Joint Stock Corp.; Camau Frozen Seafood Processing Import Export Corp.; Cantho Import Export Fishery Ltd. Co.; Cuulong Seaproducts Co.; Danang Seaproducts Import Export Corp.; Investment Commerce Fisheries Corp.; Minh Hai Export Frozen Seafood Processing Joint–Stock Co.; Minh Hai Joint–Stock Seafoods Processing Co.; Minh Phat Seafood Co., Ltd.; Minh Phu Seafood Corp.; Minh Qui Seafood Co., Ltd.; Ngoc Sinh Private Enterprise; Nha Trang Fisheries Joint Stock Co.; Nha Trang Seaproduct Co.; Phu Cuong Seafood Processing & Import–Export Co., Ltd.; Phuong Nam Co. Ltd.; Sao Ta Foods Joint Stock Co.; Soc Trang Seafood Joint Stock Co.; Thuan Phuoc Seafoods and Trading Corp.; UTXI Aquatic Products Processing Corp.; Viet Foods Co., Ltd.

Robert G. Gosselink and Jonathan M. Freed, Trade Pacific PLLC, of Washington, DC, for the Consolidated Plaintiffs Cam Ranh Seafoods Processing Enterprise Co.; Contessa Premium Foods Inc.; H & N Foods International.

Adams C. Lee, Walter J. Spak, and Jay C. Campbell, White & Case, LLP, of Washington, DC, for the Consolidated Plaintiff Amanda Foods (Vietnam) Ltd.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the briefs were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director. Of counsel on the briefs was Jonathan Zielinski, Senior Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Andrew W. Kentz, Jordan C. Kahn, Nathaniel M. Rickard, and Kevin M. O'Connor, Picard Kentz & Rowe LLP, of Washington, DC, for Defendant–Intervenor Ad Hoc Shrimp Trade Action Committee.

Geert M. De Prest and Elizabeth J. Drake, Stewart & Stewart, of Washington, DC, and Edward T. Hayes, Leake & Andersson, LLP, of New Orleans, LA, for the Defendant–Intervenor American Shrimp Processors Association.

OPINION AND ORDER

POGUE, Chief Judge:

This case returns to court following remand, by Grobest & I–Mei Indus. (Vietnam) Co. v. United States, 36 CIT ––––, 815 F.Supp.2d 1342 (2012) ( “Grobest I ”), of the final results of the fourth administrative review of the antidumping duty order on certain frozen warmwater shrimp from the Socialist Republic of Vietnam.² Specifically, Grobest I remanded the Final Results for the Department of Commerce (“Commerce” or “the Department”) to (1) provide further explanation or reconsider its policy of zeroing in administrative reviews but not in investigations consistent with recent case law from the Court of Appeals for the Federal Circuit; (2) reconsider the request of Plaintiff Grobest & I–Mei Industrial (Vietnam) Co., Ltd. (“Grobest”) for individual review as a voluntary respondent consistent with 19 U.S.C. § 1677m(a); and (3) accept Amanda Foods' separate-rate certification and reconsider Amanda Foods' duty rate. Grobest I, 36 CIT at ––––, 815 F.Supp.2d at 1367–68. Upon remand, in the Final Results of Redetermination Pursuant to Remand, A–552–802, ARP 08–09 (Apr. 30, 2012), Remand R. Pub. Doc. 6 (“ Remand Results ”), Commerce (1) provided further explanation to support its zeroing policy; (2) declined to individually review Grobest as a voluntary respondent because such review would be unduly burdensome and inhibit the timely completion of the review; and (3) accepted Amanda Foods' separate-rate certificate and assigned it the separate rate of 3.92%. Plaintiffs challenge the first and second determinations in the Remand Results. For the reasons discussed below, the court affirms the Remand Results on the first and third determinations, but remands again on the second.

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930,³ codified, as amended, at 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006) and 28 U.S.C. § 1581(c) (2006).

STANDARD OF REVIEW

“The court will sustain the Department's determination upon remand if it complies with the court's remand order, is supported by substantial evidence on the record, and is otherwise in accordance with law.” Jinan Yipin Corp. v. United States, 33 CIT ––––, 637 F.Supp.2d 1183, 1185 (2009) (citing 19 U.S.C. § 1516a (b)(1)(B)(i)).

DISCUSSION⁴

I. Commerce's Policy of Zeroing in Administrative Reviews but Not in InvestigationsA. Background

In Grobest I, Plaintiffs challenged Commerce's policy of employing zeroing in administrative reviews but not in investigations.⁵ The court remanded the Final Results to Commerce for reconsideration and redetermination consistent with the Court of Appeals' holdings in Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed.Cir.2011) and JTEKT Corp. v. United States, 642 F.3d 1378 (Fed.Cir.2011). Grobest I, 36 CIT at ––––, 815 F.Supp.2d at 1350. In Dongbu, the Court of Appeals held that “the government has not pointed to any basis in the statute for reading 19 U.S.C. § 1677(35) differently in administrative reviews than in investigations.... In the absence of sufficient reasons for interpreting the same statutory provision inconsistently, Commerce's action is arbitrary.” Dongbu, 635 F.3d at 1372–73. In JTEKT, Commerce attempted to comply with Dongbu by pointing out that different methodologies are employed in investigations and reviews. The Court of Appeals rejected Commerce's explanation as insufficient, stating:

While Commerce did point to differences between investigations and administrative reviews, it failed to address the relevant question—why is it a reasonable interpretation of the statute to zero in administrative reviews, but not in investigations? It is not illuminating to the continued practice of zeroing to know that one phase uses average-to-average comparisons while the other uses average-to-transaction comparisons.

JTEKT, 642 F.3d at 1384. The issue now before the court is whether Commerce's further explanation, as provided in the Remand Results, is sufficient to satisfy the Court of Appeals' concerns in Dongbu and JTEKT.

B. Analysis

In the Remand Results, Commerce puts forward three arguments to support its use of zeroing in reviews but not in investigations. First, Commerce argues that the courts have previously affirmed the reasonableness of Commerce's current review and investigation methodologies. Second, Commerce argues that the change of methodology in investigations was a reasonable implementation of an adverse World Trade Organization (“WTO”) decision. Finally, Commerce argues that its inconsistent interpretations reasonably account for inherent differences between investigations and reviews.

Commerce contends that its first and second arguments “sufficiently justify and explain why the Department reasonably interpreted section [1677(35) ] differently in average-to-average comparisons in antidumping duty investigations relative to all other contexts.” Remand Results at 11. However, contrary to Commerce's assertion, in Dongbu the Court of Appeals held both of these arguments insufficient to justify the inconsistent interpretations.

The Court of Appeals made clear in Dongbu that the question before it—and therefore currently before this court—was novel: “Although we have considered Commerce's zeroing policy in administrative reviews on numerous occasions ... we agree with [plaintiff] that this court has never addressed the reasonableness of Commerce's interpretation of 19 U.S.C. § 1677(35) with respect to administrative reviews now that Commerce is no longer using a consistent interpretation.” Dongbu, 635 F.3d at 1371 (citations omitted); see also Union Steel, 36 CIT at ––––, 823 F.Supp.2d at 1355–56. While the Court of Appeals has repeatedly affirmed the use of zeroing in administrative reviews, see, e.g., Timken Co. v. United States, 354 F.3d 1334, 1341–45 (Fed.Cir.2004), and approved Commerce's decision to cease zeroing in investigations, see U.S. Steel Corp. v. United States, 621 F.3d 1351, 1360–63 (Fed.Cir.2010), it has not addressed the question of inconsistent interpretations in prior cases. Therefore, that the Court of Appeals has “upheld the reasonableness of Commerce's changed methodology does not necessarily lead to the conclusion that Commerce's use of zeroing in administrative reviews remains reasonable.” Dongbu, 635 F.3d at 1372 (responding to the claim that U.S. Steel Corp. stands for the proposition that the Court of Appeals has endorsed Commerce's divergent interpretations). Commerce cannot now rely on prior endorsements of its methodology when those cases did not address the relevant question before the court.

Nor does Commerce's proper implementation of an adverse WTO ruling resolve the question. Rather, recognizing that the Court of Appeals has upheld the new investigation methodology as a reasonable implementation of an adverse WTO ruling, U.S. Steel, 621 F.3d at 1360–63, Commerce must now show that its decision “compl[ies] with domestic law including reasonably interpreting statutes.” Dongbu, 635 F.3d at 1372. A proper and reasonable implementation of an adverse WTO ruling may be contrary to law if it leads to an unreasonably inconsistent interpretation of statutory language. Id. (“[T]he government's decision to implement an adverse WTO report standing alone does not provide sufficient justification for the inconsistent statutory interpretations.”). While...