Haixing Jingmei Chem. Prods. Sales Co., Ltd. v. United States

• Decision Date: 05 December 2017
• Docket Number: Slip. Op. 17–159,Court No. 16–00259
• Citation: 277 F.Supp.3d 1375
• Parties: HAIXING JINGMEI CHEMICAL PRODUCTS SALES CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Arch Chemicals, Inc., Defendant–Intervenor.
• Court: U.S. Court of International Trade

277 F.Supp.3d 1375

HAIXING JINGMEI CHEMICAL PRODUCTS SALES CO., LTD., Plaintiff,

v. UNITED STATES, Defendant,andArch Chemicals, Inc., Defendant–Intervenor.

Court No. 16–00259

Slip. Op. 17–159

United States Court of International Trade.

Dated: December 5, 2017

Gregory S. Menegaz, deKieffer & Horgan, PPLC, of Washington, DC, argued for Plaintiff. With him on the brief were J. Kevin Horgan and Alexandra H. Salzman.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With him on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Jessica DiPietro, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Peggy A. Clarke, Law Offices of Peggy A. Clarke, of Washington, DC, argued for Defendant–Intervenor.

OPINION AND ORDER

Barnett, Judge:

Plaintiff, Haixing Jingmei Chemical Products Sales Co., Ltd. ("Plaintiff" or "Jingmei") challenges aspects of the Department of Commerce's ("Commerce" or "the agency") final determination in the 2014–2015 antidumping new shipper review of calcium hypochlorite from the People's Republic of China ("PRC").¹ See Calcium Hypochlorite from the People's Republic of China , 81 Fed. Reg. 83,804 (Dep't Commerce Nov. 22, 2016) (final decision to rescind the new shipper review of Haixing Jingmei Chemical Products Sales Co., Ltd.; 2014–2015) ("Final Rescission "), CJA 1, PJA 1, PR 120, ECF No. 36; and the accompanying Issues and Decision Mem., A–570–008 (Nov. 14, 2016) ("I&D Mem."), CJA 2, PJA 2, PR 117, ECF No. 36. Defendant United States ("the Government") and Defendant–Intervenor Arch Chemicals, Inc. ("Arch Chemicals") filed responses in opposition, to which Plaintiff filed a reply. Confidential Def.'s Mem. in Opp'n to Pl.'s Mot. for J. upon the Agency R. ("Def.'s Opp'n"), ECF No. 31; Confidential Def.–Int. Arch Chemicals, Inc. Br. in Resp. to Pl.'s Mot. for J. on the Agency R. ("Def.–Int's Opp'n."), ECF No. 29; Reply Br. of Pl. Haixing Jingmei Chemical Products Sales Co., Ltd ("Pl.'s Reply Br."), ECF No. 35. No party requested oral argument. The court, sua sponte , held a telephone conference with counsel for Plaintiff, the Government, and Arch Chemicals on November 8, 2017. ECF No. 39. The matter is now ready for decision.

I. Background

In January 2015, Commerce issued an antidumping duty order on calcium hypochlorite from the PRC. Calcium Hypochlorite from the People's Republic of China , 80 Fed. Reg. 5,085 (Dep't Commerce Jan. 30, 2015) (antidumping duty order) ("ADD Order ").² In July 2015, Plaintiff and its affiliated producer, Haixing Eno Chemical Co., Ltd. ("Eno") filed a request for a new shipper review and identified two sales that would be subject to their review request. See Entry of Appearance and Corrected Request for New Shipper Review (July 20, 2015) ("NSR Request") at 2 and Ex. 2, CJA 5, CR 2, PJA 5, PR 2, ECF No. 36. In response, Commerce initiated the new shipper review on August 26, 2015 for the period of review ("POR") July 25, 2014 through June 30, 2015. Calcium Hypochlorite from the People's Republic of China , 80 Fed. Reg. 51,774 (Dep't Commerce Aug. 26, 2015) (initiation of antidumping duty new shipper review; 2014–2015) ("Initiation Notice "), CJA 8, PJA 8, PR 8, ECF No. 36.

Upon initiating the review, Commerce issued a standard new shipper review questionnaire to Plaintiff. See Dep't Commerce Initial Questionnaire ("IQ"), CJA 9, PJA 9, PR 9, ECF No. 36. In Appendix IX of the questionnaire, Commerce requested information specific to the importer of the subject merchandise,³ including the importer's history, organization, ownership, and affiliations; sales during the POR; other purchases of subject merchandise; and resale of the subject merchandise. IQ, App. IX. The questionnaire directed either Plaintiff or, if Plaintiff was unable, Company X to answer the questions and incorporate the answers in Plaintiff's response. Id. at 1. In responding to a question soliciting the identity of other companies from which it purchased the subject merchandise during or subsequent to the POR, and the quantity, value and date of each purchase, Company X asserted that it considers such information "to be highly confidential and sensitive." SAQR at 26. Rather than provide such information, Company X stated that it "confirmed that the prices as from Jingmei were within the normal range of [its] prices from other suppliers." Id.

Commerce issued a supplemental questionnaire to Company X requesting the same and additional information, but Company X again refused to respond due to the confidentiality of the information. Jingmei's Suppl. Section A Questionnaire Resp. (Dec. 28, 2015) ("Suppl. SAQR") at 21, CJA 13, CR 37–40, PJA 13, PR 38, ECF No. 36. Commerce also issued Appendix IX to Company Y, but did not receive a complete response. Memorandum from Kabir Archuletta, Senior Int'l Trade Analyst, to James C. Doyle, Director, titled Bona Fide Nature of the Sales in the Antidumping Duty New Shipper Review of Calcium Hypochlorite from the People's Republic of China: Haixing Jingmei Chemical Products Sales Co., Ltd. (June 20, 2016) ("Bona Fide Mem.") at 4–5, CJA 3, CR 63, PJA 3, PR 102, ECF No. 36. Specifically, Company Y withheld the identity of its downstream U.S. customers and specific details and documentation regarding any purchases of subject merchandise from Company X subsequent to the POR, asserting that it considers the requested information to be "highly confidential." Jingmei's Customer's Suppl. Questionnaire Resp. (Dec. 28, 2015) at 3, 6, CJA 14, CR 41, PJA 14, PR 39, ECF No. 36.

Commerce informed Plaintiff in a supplemental questionnaire that the information requested from Company X and Company Y is necessary for Commerce's analysis in the new shipper review. Dep't Commerce Suppl. Section A, C, and Customer Questionnaire (Mar. 28, 2016) at 6, CJA 16, CR 50, PJA 16, PR 84, ECF No. 36. It advised Plaintiff that if Commerce "do[es] not receive complete responses to [its] requests for information or [it] determine[s] that [Plaintiff's] efforts to obtain the information [were] not sufficient [it] may use adverse facts available." Id. Moreover, in supplemental questionnaires to Company X and Company Y, Commerce advised the companies that their proprietary information would be protected by an administrative protective order, and that the companies' continued failure to provide the requested information may affect Commerce's determination as to the bona fide nature of Plaintiff's sales under review. Id. at 7, 9. Following the companies' deficient responses, Commerce asked Plaintiff to describe its efforts to ensure full cooperation from Company X and Company Y, to which Plaintiff responded that it had undertaken its best efforts to ensure full cooperation, "but because these downstream customers are not affiliated with Jingmei, Jingmei has no control over them." Jingmei Suppl. Questionnaire Response (April 20, 2016) at 1, CJA 19, CR 60, PJA 19, PR 94, ECF No. 36–1. Plaintiff produced e-mail communication documenting its efforts to encourage Company X to provide the requested information; however, its efforts were futile because Company X responded by stating: "Our accounting ledgers contain other financial information not relevant to those two purchases. We will not give this kind of information to anybody, not even to the lawyers or [Commerce]." Id. , Ex. SQ8–1

On June 27, 2016, Commerce preliminarily rescinded the new shipper review based on its determination that it lacked sufficient information to conduct the bona fide analysis of Jingmei's new shipper sales. Calcium Hypochlorite from the People's Republic of China , 81 Fed. Reg. 41,522 (Dep't Commerce June 27, 2016) (prelim. intent to rescind the new shipper review of Haixing Jingmei Chemical Products Sales Co., Ltd.), CJA 22, PJA 22, PR 104, ECF No. 36–1 ("Preliminary Rescission "), and accompanying Prelim. Decision Mem., A–570–008 (June 20, 2016), CJA 21, PJA 21, PR 101, ECF No. 36–1.⁴ Information and documentation Commerce deemed necessary but missing included accounting documentation from Company X and Company Y to substantiate the information reported by Jingmei. Bona Fide Mem. at 5–8.

Following briefing by Plaintiff and Arch Chemicals, Commerce adopted its preliminary findings without change. Final Rescission , 81 Fed. Reg. at 83,805 ("Based on [Commerce's] complete analysis of all of the information and comments on the record of this review, we make no changes to the Preliminary Rescission ."). Commerce concluded that it could not substantiate the price of the sales, which parties incurred expenses and antidumping duties, whether the subject merchandise was sold at a profit, and whether the sales were typical. I&D Mem. at 6–10. Commerce did not find that the sales under review were not bona fide . See id. at 6–10, 13. Citing to Company X and Company Y's "partial responses to a number of our requests for information" and "explicit[ ] refus [al] to tie any of the reported expenses to their financial records," Commerce explained that there was insufficient information to conduct the bona fide analysis of Jingmei's sales during the POR, and thus rescinded the review. Id. at 10. Commerce did not use facts available, with or without an adverse inference, in rescinding the review. Id. at 9, 13.

Jingmei challenges Commerce's Final Rescission , arguing that it provided the information necessary for Commerce to perform the bona fide analysis and that Commerce did not need accounting records from Company X and Company Y. Pl. Haixing Jingmei Chemical Products Sales Co., Ltd Mot. for J. on the Agency R., ECF No. 22; Pl. Haixing Jingmei Chemical Products Sales Co., Ltd Mem. in Supp. of Mot. for J. on the Agency R. ("Pl.'s Br.") at 13–22. Jingmei additionally argues that it...