Guizhou Tyre Co. v. United States

• Decision Date: 24 January 2022
• Docket Number: Slip Op. No. 22-6,Consol. Court No. 19-00031
• Parties: GUIZHOU TYRE CO., LTD. and Guizhou Tyre Import and Export Co., Ltd., et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

557 F.Supp.3d 1302

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

v.UNITED STATES, Defendant.

Slip Op. No. 22-6

Consol. Court No. 19-00031

United States Court of International Trade.

January 24, 2022

Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, N.Y. and Washington, D.C., for plaintiffs Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. With him on the brief were Jordan C. Kahn, Elaine F. Wang, and Brandon M. Petelin.

Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle, LLP, of Washington, D.C., for consolidated plaintiffs Shanghai Huayi Grp. Corp. Ltd., formerly known as Double Coin Holdings Ltd., and China Manufacturers Alliance LLC. With him on the brief were James P. Durling and Kimberly Reynolds.

L. Misha Preheim, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With him on the brief were Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., and Kara M. Westercamp, Trial Attorney. Of counsel on the brief was Elio Gonzalez, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

OPINION AND ORDER

Stanceu, Judge:

Plaintiffs contest a final affirmative less-than-fair-value determination of the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") in an antidumping duty investigation of certain truck and bus tires from the People's Republic of China ("China" or the "PRC") and the resulting antidumping duty order. Before the court are plaintiffs’ motions for judgment on the agency record. Concluding that the less-than-fair-value determination is contrary to law in certain respects, the court remands this determination to Commerce for reconsideration.

I. BACKGROUND

A. The Parties to this Consolidated Case

There are two groups of plaintiffs in this consolidated action. One group, to which the court refers collectively as "Guizhou Tyre," consists of Guizhou Tyre Co., Ltd. ("GTC"), a Chinese producer of truck and bus tires, and its affiliated exporter, Guizhou Tyre Import and Export Co., Ltd. ("GTCIE"), a Chinese exporter of this merchandise. Compl. ¶ 3 (Apr. 15, 2019), ECF No. 7. The other group of plaintiffs consists of a Chinese producer and exporter of truck and bus tires, Shanghai Huayi Group Corporation Ltd., to which its counsel refers by its former name, Double Coin Holdings Ltd., and its affiliated U.S. importer, China Manufacturers Alliance LLC ("CMA"). Compl. ¶ 3 (Mar. 18, 2019), Ct. No. 19-00034, ECF No. 7. The court refers to these two plaintiffs collectively as "Double Coin." Defendant is the United States.¹

B. The Antidumping Duty Investigation and the Contested Determinations

Two related agency decisions stemming from an antidumping duty investigation are contested in this consolidated action.² They are a Final "Less-Than-Fair Value (‘LTFV’)" Determination, Truck and Bus Tires From the People's Republic of China: Final Affirmative Determinations of Sales at Less Than Fair Value and Critical Circumstances , 82 Fed. Reg. 8,599 (Int'l Trade Admin. Jan. 27, 2017) (the "Final LTFV Determination "), and the subsequently-issued antidumping duty order ("Order"), Truck and Bus Tires From the People's Republic of China: Antidumping Duty Order , 84 Fed. Reg. 4,436 (Int'l Trade Admin. Feb. 15, 2019) (the "Order "). Incorporated by reference in the Final LTFV Determination is an "Issues and Decision Memorandum" containing specific findings and explanatory discussion. Truck and Bus Tires from the People's Republic of China: Issues and Decision Memorandum for the Final Affirmative Determinations of Sales at Less Than Fair Value and Critical Circumstances (Int'l Trade Admin. Jan. 19, 2017) (P.R. Doc. 855) (" Final I &D Mem. ").³

Commerce initiated the antidumping duty investigation of certain truck and bus tires from the PRC (the "subject merchandise") in early 2016, Truck and Bus Tires From the People's Republic of China: Initiation of Antidumping Duty Investigation , 81 Fed. Reg. 9,434 (Int'l Trade Admin. Feb. 25, 2016), with a period of investigation ("POI") of July 1, 2015 through December 31, 2015, id. at 9,435. Commerce published a Preliminary Affirmative LTFV Determination later that year, Truck and Bus Tires From the People's Republic of China: Preliminary Affirmative Determinations of Sales at Less Than Fair Value and Critical Circumstances, and Postponement of Final Determination , 81 Fed. Reg. 61,186 (Int'l Trade Admin. Sept. 6, 2016), which incorporated by reference the " Preliminary Decision Memorandum." Truck and Bus Tires from the People's Republic of China: Decision Memorandum for the Preliminary Affirmative Determinations of Sales at Less Than Fair Value and Critical Circumstances, and Postponement of Final Determination (Int'l Trade Admin. Aug. 26, 2016) (P.R. Doc. 716) ("Prelim. Decision Mem." ). Commerce also published an Amended Preliminary LTFV Determination. Truck and Bus Tires From the People's Republic of China: Amended Preliminary Affirmative Determination of Sales at Less Than Fair Value , 81 Fed. Reg. 71,051 (Int'l Trade Admin. Oct. 14, 2016).

In the Final LTFV Determination, Commerce calculated an estimated weighted average dumping margin of 22.57% for what it considered to be a nationwide entity (the "PRC-wide" or "China-wide" entity) consisting of all exporters of the subject merchandise that it determined not to have rebutted its presumption of control by the PRC government. Final LTFV Determination , 82 Fed. Reg. at 8,604. Commerce included in the China-wide entity 102 companies that did not respond to the Department's requests for information during the preliminary phase of the antidumping duty investigation, Prelim. Decision Mem. at 4, and ten other companies that responded but were determined by Commerce to have failed to rebut its presumption of government control, Prelim Decision Mem. at 16–17; Final I&D Mem. at 6–8. Among the ten companies were Double Coin, Prelim. Decision Mem. at 16; Final I&D Mem. at 11–13, and GTCIE, Prelim Decision Mem. at 16; Final I&D Mem. at 24–28. Commerce calculated an individually determined estimated weighted average dumping margin of 9.00% for Prinx Chengshan (Shandong) Tire Co., Ltd., the other mandatory respondent, which Commerce considered to have rebutted its presumption of government control and thus was a "separate rate" respondent, i.e., a respondent entitled to receive a margin separate from the rate assigned to the PRC-wide entity. Final I&D Mem. at 6–7. Commerce assigned the 9.00% rate to the numerous other companies that Commerce also determined to have rebutted the presumption of government control and therefore qualified for a separate rate but, not having been individually investigated, did not receive an individually determined margin. Final LTFV Determination , 82 Fed. Reg. at 8,600 –04; Final I&D Mem. at 6–7.

C. Proceedings Before the Court

Guizhou Tyre and Double Coin commenced their respective actions on March 15, 2019. Summons, Ct. No. 19-00031, ECF No. 1; Compl. (Apr. 15, 2019), Ct. No. 19-00031, ECF No. 7; Summons, Ct. No. 19-00034, ECF No. 1; Compl. (Mar. 18, 2019), Ct. No. 19-00034, ECF No. 7. The actions were consolidated on June 7, 2019. Order, Ct. No. 19-00031, ECF No. 24.

Before the court are the Rule 56.2 motions for judgment on the agency record of Guizhou Tyre, see Mot. for J. on the Agency R. of Pls. [GTC] and [GTCIE] (Oct. 2, 2019), ECF Nos. 39 (conf.), 40 (public) ("Guizhou Tyre's Br."), and Double Coin, see Consolidated Pls.’ Br. in Supp. of Rule 56.2 Mot. for J. on the Agency R. (Oct. 2, 2019), ECF No. 41-1 ("Double Coin's Br."). Defendant opposes both motions in all respects. Def.’s Resp. to Pls.’ Rule 56.2 Mots. for J. on the Admin. R. (Feb. 7, 2020), ECF Nos. 48 (conf.), 49 (public) ("Def.’s Br."). Plaintiffs filed their replies to defendant's opposition on March 16, 2020. Reply of Pls. [GTC] & [GTCIE], ECF Nos. 50 (conf.), 51 (public) ("Guizhou Tyre's Reply"); Consolidated Pls.’ Reply Br., ECF No. 52 ("Double Coin's Reply").

Guizhou Tyre submitted a Notice of Supplemental Authority in April 2021. Notice of Suppl. Authority (Apr. 30, 2021), ECF No. 61. Defendant filed a Notice of Supplemental Authority in June 2021. Notice of Suppl. Authority (June 28, 2021), ECF No. 62.

II. DISCUSSION

A. Jurisdiction and Standard of Review

The court exercises jurisdiction under section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), pursuant to which the court reviews actions commenced under section 516A of the Tariff Act of 1930 (the "Tariff Act"), as amended 19 U.S.C. § 1516a, including an action contesting a final determination that Commerce issues to conclude an antidumping duty investigation.⁴

In reviewing a final determination, the court "shall 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). Substantial evidence refers to "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." SKF USA, Inc. v. United States , 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. Nat'l Labor Relations Bd. , 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ).

B. Plaintiffs’ Motions for Judgment on the Agency Record

Guizhou Tyre raises three claims in contesting the Final LTFV Determination. One of its claims contests the legal basis for the Order: it asserts that the Order was invalid when issued because no affirmative finding of injury or threat by the U.S. International Trade Commission ("ITC" or "Commission") was in effect at that time. Guizhou Tyre's Br. 39–41. Guizhou Tyre claims, second, that the denial of its separate rate application was contrary to law because...