Guizhou Tyre Co. v. United States

• Decision Date: 14 May 2021
• Docket Number: Consol. Court No. 17-00100,Slip Op. No. 21-60
• Citation: 519 F.Supp.3d 1248
• Court: U.S. Court of International Trade
• Parties: GUIZHOU TYRE CO., LTD. and Guizhou Tyre Import and Export Co., Ltd., et al., Plaintiffs, v. UNITED STATES, Defendant.

519 F.Supp.3d 1248

GUIZHOU TYRE CO., LTD. and Guizhou Tyre Import and Export Co., Ltd., et al., Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. No. 21-60

Consol. Court No. 17-00100

United States Court of International Trade.

May 14, 2021

Ned H. Marshak and Brandon M. Petelin, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, NY, argued for plaintiffs Guizhou Tyre Co., Ltd., Guizhou Tyre Import and Export Co., Ltd., Aeolus Tyre Co., Ltd., Qingdao Free Trade Zone Full-World International Trading Co., Ltd., and Qingdao Qihang Tyre Co., Ltd. With them on the brief were Jordan C. Kahn and Elaine F. Wang.

Douglas J. Heffner and Richard P. Ferrin, Drinker Biddle & Reath, LLP, of Washington, D.C., for plaintiffs Trelleborg Wheel Systems (Xingtai) Co., Ltd. and Xuzhou Xugong Tyres Co., Ltd.

Robert K. Williams and Lara A. Austrins, Clark Hill PLC, of Chicago, IL, for plaintiff Weihai Zhongwei Rubber Co., Ltd.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant. With him on the brief were Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Paul K. Keith, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.

OPINION AND ORDER

Stanceu, Judge:

Before the court is a decision the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") issued in response to the court's opinion and order in Guizhou Tyre Co., Ltd. v. United States , 43 CIT ––––, 389 F. Supp. 3d 1350 (2019) (" Guizhou I "). The court sustains this decision in part and remands it in part.

I. BACKGROUND

Before the court are the Final Results of Redetermination Pursuant to Court Remand (Sept. 23, 2019), ECF No. 74 (conf.); (Oct. 10, 2019), ECF No. 81 (public) (the "Remand Redetermination "). Background on this litigation is presented in Guizhou I , 43 CIT at ––––, 389 F. Supp. 3d at 1353–55, and summarized and supplemented below.

Following an investigation, Commerce in 2008 issued an antidumping duty order (the "Order") on certain off-the-road tires from the People's Republic of China ("China" or the "PRC") under the authority of 19 U.S.C. § 1673d(a).¹ Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Notice of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping Duty Order , 73 Fed. Reg. 51,624 (Int'l Trade Admin. Sept. 4, 2008) (the "Order ").

In 2017, Commerce, under 19 U.S.C. § 1675(a), published the final results of the seventh periodic administrative review of the Order (the "Final Results"), which is the administrative decision plaintiffs contested in commencing this litigation according to the judicial review provisions of 19 U.S.C. § 1516a. Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2014-2015 , 82 Fed. Reg. 18,733 (Int'l Trade Admin. Apr. 21, 2017) (P.R. Doc. 312) ("Final Results ").² To correct certain ministerial errors (which are not at issue in this litigation), the Department later amended the Final Results. Certain New Pneumatic Off-the-Road Tires from the People's Republic of China: Amended Final Results of Antidumping Duty Administrative Review; 2014-2015 , 82 Fed. Reg. 27,224 (Int'l Trade Admin. June 14, 2017) ("Amended Final Results ").

Commerce incorporated by reference in the Final Results a final "Issues and Decision Memorandum" ("Final I&D Memorandum") that contains explanatory discussion. Issues and Decision Memorandum for Final Results of Antidumping Duty Administrative Review: Certain New Pneumatic Off-the-Road Tires from the People's Republic of China; 2014-2015 (Int'l Trade Admin. Apr. 12, 2017) (P.R. Doc. 308) (" Final I &D Mem. ").

The seven plaintiffs in this consolidated case, all of which are respondents in the administrative proceeding below, include two "mandatory" respondents, i.e., respondents Commerce selected for individual examination in the seventh review. They were: (1) Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. (collectively, "GTC"), which Commerce treated as a single entity; and (2) Xuzhou Xugong Tyres Co., Ltd., Armour Rubber Co. Ltd., and Xuzhou Hanbang Tyre Co., Ltd. (collectively, "Xugong"), which Commerce also treated as a single entity during the seventh review. Final Results , 82 Fed. Reg. at 18,733 –34. In the Final Results, Commerce assigned Xugong an individual weighted-average dumping margin rate of 33.08%. Id. at 18,735. Commerce assigned GTC the rate that, under its practice, Commerce assigns to an exporter it considers to be part of an entity consisting of all exporters of the subject merchandise that it determines not to have rebutted its presumption of government control of export functions. Commerce referred to this entity in the Final Results as the "PRC-wide entity." Id. For the Final Results, Commerce applied a "PRC-wide" rate of 105.31% to this entity and, thus, to GTC, id. , a rate Commerce carried over from prior reviews, id. at 18,735 n.16.

Plaintiff Aeolus Tyre Co., Ltd. ("Aeolus"), (Ct. No. 17-00102), another respondent Commerce determined not to have rebutted its presumption of government control over export functions, also was assigned the PRC-wide rate of 105.31% in the Final Results. Id.

Plaintiffs Qingdao Qihang Tyre Co., Ltd. ("Qingdao Qihang"), Qingdao Free Trade Zone Full-World International Trading Co., Ltd. ("Full World"), Trelleborg Wheel Systems (Xingtai) China, Co., Ltd. ("Trelleborg"), and Weihai Zhongwei Rubber Co., Ltd. ("Zhongwei"), are entities that Commerce determined in the seventh review to have rebutted its presumption of government control and therefore to have qualified for a "separate rate," i.e., a rate separate from the rate assigned to the PRC-wide entity. Id. Commerce did not examine these entities individually and, therefore, did not calculate an individually-determined rate for any of them. Instead, Commerce assigned a rate of 33.08% to Qingdao Qihang, Full World, Trelleborg, and Zhongwei based on the margin it determined for mandatory respondent Xugong. Id.

Commerce later corrected a ministerial error and amended Xugong's separate individual weighted-average dumping margin to 33.14%. Amended Final Results , 82 Fed. Reg. at 27,225. Commerce then applied Xugong's revised rate to Qingdao Qihang, Full World, Trelleborg, and Zhongwei. Id. Commerce made no change in the 105.31% rate it applied to the companies it determined to be part of the PRC-wide entity. Id.

On January 30, 2018, six plaintiffs—mandatory respondents Xugong and GTC, and separate rate respondents Aeolus, Qingdao Qihang, Full World, and Trelleborg—moved for judgment on the agency record under USCIT Rule 56.2. Mots. for J. on Agency R., ECF Nos. 48–56 (conf. & public).³ In response to GTC's motion, defendant requested a remand to allow Commerce to reconsider GTC's eligibility for separate rate status. Def.’s Resp. to Mots. for J. on the Agency R. 1-2 (June 1, 2018), ECF No. 58. Defendant opposed the motions in all other respects. Id.

In Guizhou I , the court granted defendant's request for a remand to allow Commerce to reconsider its separate rate determination as to GTC. Guizhou I , 43 CIT at ––––, 389 F. Supp. 3d at 1360. The court concluded that Commerce's determination that Aeolus did not qualify for a separate rate was unsupported by substantial evidence and remanded that determination to Commerce for reconsideration in light of all record evidence. Id. at ––––, 389 F. Supp. 3d at 1359. The court noted, in particular, that Commerce did not mention a "Rectification Report" that Aeolus claimed demonstrated its independence from government control. Id. at ––––, 389 F. Supp. 3d at 1358. Additionally, the court held that Commerce acted contrary to law in effecting reductions to Xugong's "U.S. price" (export price or constructed export price) for Chinese value-added tax ("VAT"), id. at ––––, 389 F. Supp. 3d at 1361, and directed Commerce to redetermine Xugong's weighted average dumping margin without making deductions for VAT, id. at ––––, 389 F. Supp. 3d at 1370. Finally, because Full World, Qingdao, Trelleborg, and Zhongwei timely contested the Final Results as plaintiffs, the court ruled that these plaintiffs would be entitled to any relief that resulted from the recalculation of Xugong's individually-determined rate. Id. at ––––, 389 F. Supp. 3d at 1370.

Following the court's decision in Guizhou I , Commerce prepared a draft remand redetermination and released it to the parties on August 9, 2019. Remand Redetermination 2 (citing Draft Results of Redetermination Pursuant to Ct. Remand (Aug. 9, 2019) ("Draft Results ")), upon which GTC and Aeolus commented before the agency. GTC and Aeolus’ Comments on the Department's Draft Remand Redetermination (Aug. 23, 2019) (Remand P.R. Doc. 5).

In the instant Remand Redetermination, submitted on September 23, 2019, Commerce, under protest, redetermined Xugong's margin by eliminating the Department's previous VAT deductions from U.S. price, resulting in a recalculated margin of 16.78%. Remand Redetermination 3–4, 43. Based on Xugong's redetermined margin, Commerce assigned rates of 16.78% to Full World, Qingdao Qihang, Trelleborg, and Zhongwei. Id. at 43. Commerce again determined that Aeolus failed to rebut its presumption of government control. Id. at 14 ("... there remains de facto government control over Aeolus ..."). Commerce reached the same conclusion as to GTC. Id. at 16 ("... we continue to find that GTC is ineligible for a separate rate in the underlying review because it is not free from de facto government control over its export activities.").

Six plaintiffs filed comments on the Remand Redetermination. Comments of Consol. Pl[s]. Xuzhou Xugong Tyres Co., Ltd. and Trelleborg Wheel Systems (Xingtai) Co., Ltd. on Final Results of...