Hiep Thanh Seafood Joint Stock Co. v. United States

• Decision Date: 05 November 2010
• Docket Number: Slip Op. 10–125.Court No. 09–00270.
• Parties: HIEP THANH SEAFOOD JOINT STOCK CO., Plaintiff,v.UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

752 F.Supp.2d 1330

HIEP THANH SEAFOOD JOINT STOCK CO., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 10–125.Court No. 09–00270.

United States Court of International Trade.

Nov. 5, 2010.

Mayer Brown LLP, Washington, DC (Matthew J. McConkey, Jeffrey C. Lowe) for Plaintiff Hiep Thanh Seafood Joint Stock Company.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 (Richard P. Schroeder) for Defendant United States.Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC (Valerie A. Slater, Jarrod M. Goldfeder, Nicole M. D'Avanzo, Natalya D. Dobrowolsky) 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

GORDON, Judge.

This action involves a 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. See Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 74 Fed.Reg. 29,473 (Dep't of Commerce June 22, 2009) (final results third new shipper reviews), as amended, 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 for Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, A–552–801 (June 15, 2009) (“ Decision Memorandum ”), available at http:// ia. ita. doc. gov/ frn/ summary/ vietnam/ E 9– 14607– 1. pdf (last visited Nov. 5, 2010).

Before the court is the motion for judgment on the agency record filed by Hiep Thanh Seafood Joint Stock Co. (“Hiep Thanh”). Hiep Thanh challenges Commerce's inclusion within Hiep Thanh's U.S. sales database certain sales (1) that Hiep Thanh allegedly believed had an ultimate destination of Mexico, (2) that Hiep Thanh knew would be shipped through the United States, and (3) that did not in fact arrive in Mexico, but were instead entered for consumption in the United States. 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).

Background

In early 2008 Hiep Thanh requested an administrative review as a new shipper of frozen fish fillets to the United States. Request for a New Shipper Review (Feb. 25, 2008), PD 1.² Hiep Thanh claimed that it had exported and entered one shipment of subject merchandise during the appropriate period for a new shipper review and provided Commerce supporting documentation for that shipment. Id. at 1. Commerce sent Hiep Thanh a deficiency letter advising Hiep Thanh that a review of United States Customs and Border Protection (“Customs”) data indicated that Hiep Thanh had additional entries during the period of review. Deficiency Letter (Feb. 28, 2008), PD 3 at 1. Commerce requested that Hiep Thanh provide an explanation for the discrepancy. Id. In response, Hiep Thanh stated, among other things, that “it had no knowledge of any U.S. consumption entries in addition to the one presented in the new shipper request.” Resp. to Deficiency Letter at 2 (Mar. 3, 2008), PD 7; see also Supp. to New Shipper Review Request (Mar. 14, 2008), PD 9.

Commerce thereafter initiated a new shipper review for Hiep Thanh. In response to Commerce's request for the details of Hiep Thanh's United States sales, Hiep Thanh asserted that it had “directly sold some product to a U.S. customer [Company 2] during the [period of review, but] to Hiep Thanh's knowledge, all of that product was imported into Mexico and not the United States.” Sec. A Resp. at 18 (item 4(j)) (May 5, 2008), PD 17. Similarly, for United States sales data, Hiep Thanh reported only the sales associated with the single entry upon which it had requested the new shipper review and did not provide any information for the additional entries Commerce had found in Customs data. See Sec. C Resp. at 3 & Exhs. 2 & 3 (May 21, 2008), CD 8; PD 27.

In response to another questionnaire, Hiep Thanh indicated that it had made nine sales to Company 2; that the merchandise subject to these sales “was not imported into the United States;” and that merchandise “imported into Mexico is not subject to the antidumping case and thus [it] would be inappropriate to include them in the Section C database.” Hiep Thanh's 2nd Supp. Quest. Resp. at 2 (Oct. 15, 2008), CD 25; PD 60. The shipping documents provided by Hiep Thanh indicated that Hiep Thanh shipped the merchandise subject to these nine sales to the United States. Id. at Exhibit 2, Sale Nos. 1 through 9. The lab analysis and sanitary certifications for each sale indicate a final destination in Mexico. Id.

In the Final Results Commerce included in Hiep Thanh's United States sales database the sales to Company 2 that entered the United States for consumption. See Decision Memorandum at 17.

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 § 10.3[1] (2d. ed.2009). 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.2009).

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, LP v. United States, 407 F.3d 1211, 1215 (Fed.Cir.2005); Agro Dutch Indus. Ltd. 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.”).

Discussion

Commerce explained its decision to include Hiep Thanh's sales to Company 2 as follows:

Similar to our conclusion in Comment 4 above, we find that only those sales that entered the United States for consumption during the POR should be included in the margin calculation, specifically only type 3 entries. Based on documents generated in the course of the negotiation and sales process, indicating a U.S. destination, Hiep Thanh knew or should have known that the goods in question were destined for the United States at the time of the sale. Thus, such sales should be reported to the Department in accordance with section 772(a) of the Act. The Department placed information on the record that definitively shows that certain sales to Company 2 entered the United States for consumption i.e., on November 4, 2009, the Department placed import data collected by CBP on the record that demonstrated that these sales were entered for consumption. See Memorandum to the File from Tom Futtner, Customs Unit, to James C. Doyle, Director Office 9, dated November 3, 2008, Request for U.S. Entry Documents—Certain Frozen Fish Fillets from the Socialist Republic of Vietnam (A–552–801). Based on the CBP data, the Department requested Hiep Thanh to report these sales in its U.S. sales database. Consequently, for these final results, based on CBP data and Hiep Thanh's updated U.S. sales database, we will include these sales in the margin calculation. This determination is also consistent with Magnesium from Russia because we have evidence on the record that certain sales to Company 2 entered for consumption and that Hiep Thanh knew or should have known that these sales were destined for the United States. However, we will not include sales in the margin calculation where we do not have evidence that they were entered for consumption or were not type 3 entries.

Decision Memorandum at 17.

It is undisputed that Hiep Thanh manufactured and sold subject merchandise that entered the United States for consumption during the period of review. Dumping liability for those sales must reside somewhere. The question is whether Hiep Thanh or some other party in its sales...