Haixing Jingmei Chem. Prods. Sales Co. v. United States, Slip Op. 18-181
| Decision Date | 27 December 2018 |
| Docket Number | Slip Op. 18-181,Court No. 17-00084 |
| Citation | 357 F.Supp.3d 1337 |
| 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 |
Gregory S. Menegaz, J. Kevin Horgan, and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, for Plaintiff. With them on the brief was Judith L. Holdsworth.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Natan P. Tubman, 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, for Defendant-Intervenor.
This matter is before the court following the U.S. Department of Commerce's ("Commerce" or the "agency") redetermination upon remand. See Confidential Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 46. Plaintiff, Haixing Jingmei Chemical Products Sales Co., Ltd. ("Plaintiff" or "Jingmei") initiated this action challenging Commerce's final decision to rescind the new shipper review of the countervailing duty order on calcium hypochlorite from the People's Republic of China ("PRC" or "China"). See Calcium Hypochlorite from the People's Republic of China , 82 Fed. Reg. 15,494 (Dep't Commerce Mar. 29, 2017) (final decision to rescind the countervailing duty new shipper review of Haixing Jingmei Chemical Products Sales Co., Ltd.) ("Final Rescission "), ECF No. 18-2, and accompanying Issues and Decision Mem., C-570-009 (Mar. 23, 2017) ("I & D Mem."), ECF No. 18-3.1 Plaintiff argued that Commerce's rescission of the new shipper review due to purportedly insufficient information to conduct the bona fide analysis of Plaintiff's sale during the period of review ("POR") was unsupported by substantial evidence and contrary to law.2 See Confidential Pl. Haixing Jingmei Chemical Products Sales Co., Ltd. Mem. in Supp. of Mot. for J. on the Agency R. ("Pl.'s Br.") at 1, 12-29, ECF No. 23; Pl. Haixing Jingmei Chemical Products Sales Co., Ltd. Reply Br. at 6-12, ECF No. 32. Plaintiff also argued that the agency's decision to rescind the review amounted to an adverse inference against Jingmei, a cooperating party. Pl.'s Br. at 35-36.
On April 10, 2018, the court remanded the Final Results , holding that Commerce's rescission due to insufficient information to conduct the statutory bona fide analysis of Plaintiff's sale was not supported by substantial evidence when considering the agency's statutory authority to use facts available, with or without an adverse inference, to fill any asserted gaps in the record. See Haixing Jingmei Chem. Prod. Sales Co. Ltd., v. United States ("Haixing CVD I "), 42 CIT ––––, 308 F.Supp.3d 1366 (2018).3 The court ordered Commerce "to determine whether Plaintiff's sale during the period of review was bona fide ," id. at 1373, such that the court could better "evaluate whether that redetermination is supported by substantial evidence and otherwise in accordance with law," id. at 1372 (quoting Haixing Jingmei Chem. Prod. Sales Co. Ltd., v. United States ("Haixing AD I "), 41 CIT ––––, ––––, 277 F.Supp.3d 1375, 1383 (2017) ).
In its Remand Results, Commerce used partial facts available with an adverse inference (sometimes referred to as "adverse facts available" or "AFA") to determine whether Jingmei's sale was indicative of a bona fide transaction. Remand Results at 8-9, 13-14, 30; 60-63. Specifically, Commerce used adverse inferences only in analyzing whether the sale price was indicative of a bona fide transaction and whether the subject merchandise was resold at a profit. Id. at 13-14, 30. Based on the totality of the circumstances, Commerce concluded that Jingmei's sale was not bona fide and, therefore, rescission of the new shipper review was appropriate. Id. at 1-2. Jingmei now challenges Commerce's Remand Results as unsupported by substantial evidence. See Confidential Pl. Haixing Jingmei Chem. Prods. Sales Co., Ltd. Comments in Opp'n to U.S. Dep't of Commerce's Remand Redetermination ("Pl.'s Opp'n Cmts"), ECF No. 49. The United States ("Defendant" or the "Government") and Defendant-Intervenor, Arch Chemicals Inc., support Commerce's redetermination. See Confidential Def.'s Resp. to Pl.'s Comments on the Dep't of Commerce's Remand Results ("Def.'s Supp. Cmts"), ECF No. 55; Confidential Def-Int. Arch Chems., Inc. Reply to Pl.'s Comments in Opp'n to U.S. Dep't of Commerce's Remand Redetermination, ECF No. 53 ("Def.-Int.'s Supp. Cmts"). For the following reasons, the court sustains the Remand Results.
The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),4 and 28 U.S.C. § 1581(c) (2012). The court will uphold an agency's determination that is supported by substantial evidence on the record and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "The 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 ––––, ––––, 273 F.Supp.3d 1314, 1317 (2017) (citation and internal quotation marks omitted).
Pursuant to 19 U.S.C. § 1675(a)(2)(B)(i), when Commerce receives a request from a new exporter or producer who did not export merchandise subject to a countervailing duty order to the United States during the period of investigation, and is not affiliated with any exporter or producer that did export, Commerce must conduct a review to establish an individual countervailing duty rate for that exporter or producer. Commerce must determine an individual countervailing duty rate based solely on bona fide sales to the United States during the period of review. See 19 U.S.C. § 1675(a)(2)(B)(iv). Commerce determines whether a sale is bona fide by considering, "depending on the circumstances surrounding such sales," the following factors:
(I) the prices of such sales; (II) whether such sales were made in commercial quantities; (III) the timing of such sales; (IV) the expenses arising from such sales; (V) whether the subject merchandise involved in such sales was resold in the United States at a profit; (VI) whether such sales were made on an arms-length basis; and (VII) any other factor the administering authority determines to be relevant as to whether such sales are, or are not, likely to be typical of those the exporter or producer will make after completion of the review.
19 U.S.C. § 1675(a)(2)(B)(iv).
In the absence of "an entry and sale to an unaffiliated customer in the United States of subject merchandise," Commerce may rescind the review. 19 C.F.R. § 351.214(f)(2)(i). A sale that Commerce "determines not to be a bona fide sale is, for purposes of [ § 351.214(f)(2) ], not a sale at all." Shijiazhuang Goodman Trading Co., Ltd. v. United States , 40 CIT ––––, ––––, 172 F.Supp.3d 1363, 1373 (2016). Thus, if Commerce excludes all subject sales as non-bona fide , it "necessarily must end the review, as no data will remain on the export price side of Commerce's [countervailing] duty calculation." Tianjin Tiancheng Pharm. Co., Ltd. v. United States ("TTPC") , 29 CIT 256, 259, 366 F.Supp.2d 1246, 1249 (2005).
When "necessary information is not available on the record," or an interested party "withholds information" requested by Commerce," "fails to provide" requested information by the submission deadlines, "significantly impedes a proceeding," or provides information that cannot be verified pursuant to 19 U.S.C. § 1677m(i), Commerce "shall ... use the facts otherwise available." 19 U.S.C. § 1677e(a).5 Additionally, if Commerce determines that the party "has failed to cooperate by not acting to the best of its ability to comply with a request for information," it "may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available." Id. § 1677e(b). "Compliance with the ‘best of its ability’ standard is determined by assessing whether a respondent has put forth its maximum effort to provide Commerce with full and complete answers to all inquiries in an investigation." Nippon Steel Corp. v. United States , 337 F.3d 1373, 1382 (Fed. Cir. 2003).
In the Remand Results, Commerce conducted the bona fide analysis of the sale subject to the review by evaluating the factors enumerated in 19 U.S.C. § 1675(a)(2)(B)(iv). Remand Results at 7-34.
Commerce explained that, following receipt of Jingmei's initial questionnaire responses, the agency determined it needed additional information from Jingmei, Company X, and Company Y to analyze the bona fide factors outlined in the statute. Id. at 6. Commerce issued four supplemental questionnaires requesting information it deemed necessary to conduct its analysis. Id. Commerce found that, in certain circumstances, Jingmei, Company X, and Company Y failed to cooperate to the best of their abilities in responding to Commerce's information requests. Id. at 8, 60-63. Using the available record information and relying, in part, on adverse inferences, Commerce made the following findings and offered the following explanations.
Commerce found that the price factor of section 1675(a)(2)(B)(iv)(I) weighed against a finding that Jingmei's sale was bona fide . Id. at 14. The agency explained that it typically examines the sale price to determine whether it was "based on normal commercial considerations" and is indicative of a ...
To continue reading
Request your trial