Hiep Thanh Seafood Joint Stock Co. v. United States

• Citation: 781 F.Supp.2d 1366,33 ITRD 1616
• Decision Date: 23 June 2011
• Docket Number: Slip Op. 11–74.Court No. 09–00270.
• Parties: HIEP THANH SEAFOOD JOINT STOCK CO., Plaintiff,v.UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

781 F.Supp.2d 1366

33 ITRD 1616

HIEP THANH SEAFOOD JOINT STOCK CO., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 11–74.Court No. 09–00270.

United States Court of International Trade.

June 23, 2011.

Mayer Brown LLP (Matthew J. McConkey, Jeffery C. Lowe), Washington, DC, for Plaintiff Hiep Thanh Seafood Joint Stock Co.Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, (Richard P. Schroeder); and Office of the Chief Counsel for Import Administration, U.S. Department of Commerce (David Richardson), senior counsel, for Defendant United States.Akin, Gump, Strauss, Hauer & Feld, LLP (Valerie A. Slater, Jarrod M. Goldfeder, Nicole M. D'Avanzo, Natalya D. Dobrowolsky), Washington, DC, for Defendant–Intervenors Catfish Farmers of America, America's Catch, Consolidated Catfish Companies, LLC, d/b/a Country Select Fish, Delta Pride Catfish Inc., Harvest Select Catfish Inc., Heartland Catfish Company, Pride of the Pond, Simmons Farm Raised Catfish, Inc., and Southern Pride Catfish Company, LLC.

OPINION and ORDER

GORDON, Judge:

This action involves the third new shipper review conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty order covering certain frozen fish fillets from the Socialist Republic of Vietnam. Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 74 Fed.Reg. 37,188 (Dep't of Commerce July 28, 2009) (amended final results admin. review) (“ Final Results ”); see also Issues and Decision Memorandum, A–552–801 (June 15, 2009), available at http:// ia. ita. doc. gov/ frn/ summary/ VIETNAM/ E 9– 14607– 1. pdf (last visited June 23, 2011) (“ Decision Memorandum ”). Before the court are the Final Results of Redetermination (Jan. 31, 2011) (“ Remand Results ”) filed by Commerce pursuant to Hiep Thanh Seafood Joint Stock Co. v. United States, 34 CIT ––––, 752 F.Supp.2d 1330 (2010) (“ Hiep Thanh ”) (order remanding to Commerce). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006),¹ and 28 U.S.C. § 1581(c) (2006). For the reasons set forth below, the court remands this matter to Commerce for further consideration.

Standard of Review

When reviewing Commerce's antidumping determinations under 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), the U.S. Court of International Trade sustains Commerce's “determinations, findings, or conclusions” unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed.Cir.2006). Substantial evidence has been described as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). Substantial evidence has also been described as “something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.” Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). Fundamentally, though, “substantial evidence” is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d ed. 2011). Therefore, when addressing a substantial evidence issue raised by a party, the court analyzes whether the challenged agency action “was reasonable given the circumstances presented by the whole record.” Edward D. Re, Bernard J. Babb, and Susan M. Koplin, 8 West's Fed. Forms , National Courts § 13342 (2d ed. 2010).

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), governs judicial review of Commerce's interpretation of the antidumping statute. Dupont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.Cir.2005); Agro Dutch Indus. v. United States, 508 F.3d 1024, 1030 (Fed.Cir.2007). “[S]tatutory interpretations articulated by Commerce during its antidumping proceedings are entitled to judicial deference under Chevron.” Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1382 (Fed.Cir.2001); see also Wheatland Tube Co. v. United States, 495 F.3d 1355, 1359 (Fed.Cir.2007) ( “[W]e determine whether Commerce's statutory interpretation is entitled to deference pursuant to Chevron.”).

Background

This case involves the proper treatment of sales of subject merchandise made by respondent/producer Hiep Thanh Seafood Joint Stock Co. (“Hiep Thanh”) to an unaffiliated Mexican customer who entered the merchandise for U.S. consumption. The issue is whether these sales should be included within Hiep Thanh's margin calculation as part of Hiep Thanh's U.S. sales database, or accounted for elsewhere within the new shipper review. In the Final Results Commerce included the sales within Hiep Thanh's U.S. sales database. Decision Memorandum at cmt 5. Hiep Thanh then commenced this action, arguing that Commerce erred because Hiep Thanh had no knowledge, actual or constructive, that those sales were destined for U.S. customers. Hiep Thanh, 34 CIT at ––––, 752 F.Supp.2d at 1332, 1334. The court remanded the matter for further consideration by Commerce because it was unclear from the Decision Memorandum whether Commerce (1) applied its standard “knowledge test” to analyze the sales in question, or (2) may have applied a different framework that did not depend on Hiep Thanh's knowledge of the “ultimate destination” of the merchandise, but rather Hiep Thanh's more limited knowledge that the merchandise was destined in some form for the United States (as a transshipment) coupled with actual consumption entries that Hiep Thanh may not have known about. Id. at 1335.

In the Remand Results Commerce has provided a more detailed explanation of its decision to include the sales within Hiep Thanh's U.S. sales database. Nevertheless, for the reasons that follow, the court cannot sustain the Remand Results, and again remands the matter to Commerce for further consideration. Familiarity with the Remand Results is presumed.

Discussion

Hiep Thanh contends that this is a simple case that turns on the meaning of the phrase—“for exportation to the United States”—in the antidumping statute's U.S. price provision, which defines export price, in relevant part, as “the price at which the subject merchandise is first sold ... to an unaffiliated purchaser for exportation to the United States.” 19 U.S.C. § 1677a(a). There is no dispute that Hiep Thanh's Mexican customer was the first unaffiliated purchaser of the subject merchandise or that Hiep Thanh shipped the subject merchandise to the United States. The only question is whether that shipment constitutes “exportation” within the meaning of the statute. In the Remand Results Commerce concludes that it does:

[T]he sales at issue meet the definition of a U.S. sale under 19 U.S.C. § 1677(a) as these sales were made to an unaffiliated purchaser for exportation to the United States.... A review of the evidence on the record shows that in the commercial invoices Hiep Thanh indicated shipment was to be made to a United States port.... The accompanying bills of lading for these shipments indicated that the port of discharge for these sales at issue was in the United States. In other words, the product was exported to the United States and delivered to the United States. Upon arrival, the entries were classified as type 3 entries (consumption). Hiep Thanh essentially asks the Department to ignore these record facts which ultimately satisfy 19 U.S.C. § 1677(a). Hiep Thanh's knowledge of whether the subject merchandise would be re-exported to a third country is a mere assumption, when compared to the action taken—shipped to the United States and purchased from an unaffiliated customer. As such, Hiep Thanh was in a position to price discriminate between the U.S. market and other markets as they sold the merchandise to an unaffiliated customer for delivery in the United States. As the merchandise was entered into the United States for consumption subject to AD/CVD duties, those sales provide the appropriate prices to be included in the antidumping duty calculation.

Remand Results at 7–8.

The above excerpt from the Remand Results makes it appear that this is indeed a simple case, one in which Hiep Thanh's sales to the Mexican customer fit squarely within the purview of 19 U.S.C. § 1677a. Nevertheless, the court cannot sustain this determination in its present posture because the Remand Results are wanting in two respects: First, Commerce does not adequately summarize the sales in issue, which prevents Commerce from reasonably addressing the record evidence that suggests that Hiep Thanh's sales to the Mexican customer, at least from Hiep Thanh's perspective, were for exportation to Mexico and not the United States. Second, to the extent that Commerce's determination interprets the phrase “exportation to the United States,” the Remand Results have too many internal inconsistencies and unexplained conclusions to constitute a reasonable construction of the statute.

Commerce correctly notes that Hiep Thanh delivered the subject merchandise to the Mexican customer at a U.S. port, and that the U.S. port was noted on the commercial invoices. The record, though, reveals much more about the full context of these sales. Hiep Thanh made the sales to the Mexican customer by first using an...