Guizhou Tyre Co., Ltd. v. United States, 121019 USCIT, 18-00100

Docket Nº:18-00100
Opinion Judge:Richard W. Goldberg, Senior Judge
Party Name:GUIZHOU TYRE CO., LTD.; GUIZHOU TYRE IMPORT & EXPORT CO., LTD., Plaintiffs, v. UNITED STATES, Defendant. and TIANJIN UNITED TIRE & RUBBER INTERNATIONAL CO., LTD.; WEIHAI ZHONGWEI RUBBER CO., LTD.; Consolidated Plaintiffs,
Attorney:Matthew P. McCullough, Tung Nguyen, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for plaintiffs Guizhou Tyre Co., Ltd., and Guizhou Tyre Import & Export Co., Ltd. John Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washi...
Judge Panel:Before: Richard W. Goldberg, Senior Judge
Case Date:December 10, 2019
Court:Court of International Trade
 
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GUIZHOU TYRE CO., LTD.; GUIZHOU TYRE IMPORT & EXPORT CO., LTD., Plaintiffs,

and

TIANJIN UNITED TIRE & RUBBER INTERNATIONAL CO., LTD.; WEIHAI ZHONGWEI RUBBER CO., LTD.; Consolidated Plaintiffs,

v.

UNITED STATES, Defendant.

No. 18-00100

Court of Appeals of International Trade

December 10, 2019

The court remands to Commerce for a further analysis of the Export Buyer's Credit Program. All other determinations made by the Department are sustained.

Matthew P. McCullough, Tung Nguyen, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for plaintiffs Guizhou Tyre Co., Ltd., and Guizhou Tyre Import & Export Co., Ltd.

John Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Orga Cadet, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

Before: Richard W. Goldberg, Senior Judge

OPINION AND ORDER

Richard W. Goldberg, Senior Judge

Now before the court are the Final Results of Redetermination Pursuant to Court Remand, ECF 46-1 (Aug. 27, 2019) ("Remand Results"), of the Department of Commerce ("the Department" or "Commerce") in the countervailing duty ("CVD") investigation of off-the-road tires from the People's Republic of China ("PRC") during the period of review between January 1, 2015 and December 31, 2015. Certain New Pneumatic Off-the-Road Tires from the People's Republic of China, 83 Fed. Reg. 16, 055 (Dep't Commerce Apr. 13, 2018) (final results), amended by Certain New Pneumatic Off-the-Road Tires from the People's Republic of China, 83 Fed. Reg. 32, 078 (Dep't Commerce July 11, 2018) (am. final results) ("Amended Final Results") and accompanying Issues & Decision Mem. ("I&D Mem."). Following the court's remand back to Commerce, Guizhou Tyre Co. v. United States, 43 CIT_____, 389 F.Supp.3d 1315 (2019) ("Guizhou II "), the Department reviewed its determination on the Export Buyer's Credit Program ("EBCP" or "the Program") and provided additional support for its findings on distortion in the synthetic rubber market in 2015. See generally Remand Results. Specifically, the Department affirmed its findings regarding the EBCP and doubled down on its decision to apply an adverse inference that Plaintiffs used and benefited from the Program. Id. at 3-14. Additionally, the Department further explained its finding that the synthetic market was not distorted in 2015. Id. at 14-16. This additional explanation demonstrated that the composition of the synthetic rubber market in China changed significantly between 2014 and 2015. Id. at 15. Plaintiffs Guizhou Tyre Co. and Guizhou Tyre Import and Export Co., (collectively "Guizhou" or "Plaintiffs") oppose Commerce's Remand Results in its entirety. See Pls.' Comments on the Department of Commerce's Remand Redetermination, ECF No. 48 (Sept. 26, 2019) ("Pls.' Comments").

The Department has provided adequate support for its finding distortion in the synthetic rubber market. The evidence provided by Commerce indicates that market conditions in 2015 were not "nearly identical" to those in 2014, as Plaintiffs claim. For example, pursuant to Commerce's explanation, the synthetic rubber market underwent a significant increase in import penetration. Therefore, the court sustains Commerce's remand results as to the distortion analysis. However, the court is not satisfied with Commerce's remand results relating to the EBCP. Once again, substantial evidence does not support the requisite threshold finding that there is a gap in the record warranting the use of adverse facts available ("AFA"). The court remands this issue back to Commerce for reconsideration in accordance with this opinion.

DISCUSSION

The court exercises jurisdiction under 28 U.S.C. § 1581(c). The court must hold unlawful any determination, finding, or conclusion found "to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). Further, "[t]he results of a redetermination pursuant to court remand are also reviewed 'for compliance with the court's remand order.'" SolarWorld Ams., Inc. v. United States, 41 CIT___, ___, 229 F.Supp.3d 1362, 1365 (2017) (quoting Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT___, ___, 968 F.Supp.2d 1255, 1259 (2014)).

The Department has failed to "compl[y] with the court's remand order," id., as it relates to Commerce's application of the AFA statute to the EBCP. Therefore, the court remands that portion of the Department's determination back to Commerce for reconsideration consistent with this opinion. As for the Department's market distortion analysis, the court upholds Commerce's redetermination as now supported by substantial evidence on the record, in light of the reasoned explanation now available to the court.

I.

Synthetic Rubber Market Distortion Analysis

The Department determined that the 2015 synthetic rubber market was not distorted during the period of review because state-owned producers accounted for 23.97 percent of market consumption for synthetic rubber. Remand Results at 14. Therefore, Commerce used Tier 1 benchmarks for imports to measure the adequacy of remuneration for this input. Plaintiffs challenged this determination, arguing that the results were inconsistent with the Department's distortion findings in 2014 because similar market conditions existed in the two years. The court agreed, noting that the evidence in the record demonstrated that the synthetic rubber market between 2014 and 2015 was distinguished by only a few percentage points. Guizhou II, 43 CIT at ___, 389 F.Supp.3d at 1324. And so, the court concluded, the Department would be hard-pressed to justify a change in its distortion analysis, especially where it failed to provide much additional insight into its ultimate determination. Id. See also Hussey Copper. v. United States, 17 CIT 993, 997, 834 F.Supp. 413, 418 (1993) ("It is 'a general rule that an agency must either conform...

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