Hubscher Ribbon Corp. v. United States

Decision Date15 April 2014
Docket NumberSlip Op. 14–43.,Court No. 13–00071.
Citation979 F.Supp.2d 1360
PartiesHUBSCHER RIBBON CORP., LTD., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

OPINION TEXT STARTS HERE

John J. Kenkel, Gregory S. Menegaz, and J. Kevin Horgan, deKieffer & Horgan, of Washington, DC, for Plaintiff Hubscher Ribbon Corp., Ltd.

Ryan M. Majerus, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the briefs were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director. Of counsel on the briefs was Scott D. McBride, Senior Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Import Administration, of Washington, DC.

Gregory C. Dorris, Pepper Hamilton, LLP, of Washington, DC, for DefendantIntervenor Berwick Offray, LLC.

OPINION

GORDON, Judge:

This action involves an administrative review conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty order covering narrow woven ribbons with woven selvedge from the People's Republic of China. See Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China, 78 Fed.Reg. 10,130 (Dep't of Commerce Feb. 13, 2013) (final results admin. review) (“ Final Results ”); see also Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review on Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China, A–570–952 (Dep't of Commerce Feb. 5, 2013) (“ Decision Memorandum ”), available at http:// enforcement. trade. gov/ frn/ summary/ prc/ 2013– 03236– 1. pdf (last visited this date). Before the court is Plaintiff Hubscher Ribbon Corp., Ltd.'s (Hubscher) motion for judgment on the agency record challenging Commerce's assignment of a total adverse facts available (“AFA”) rate of 247.65%. See Pl.'s R. 56.2 Mem. in Supp. of Mot. for J. on the Agency R. at 3, ECF No. 33 (“Pl.'s Br.”). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(2)(B)(iii) (2006),1 and 28 U.S.C. § 1581(c) (2006). For the reasons set forth below, the court sustains the Final Results.

I. Background

During the less than fair value (“LTFV”) investigation, Commerce assigned dumping margins of 0.00% to Yama Ribbons and Bows Co., Ltd. (“Yama”), the sole cooperative mandatory respondent, 123.83% for the separate rate respondents, and 247.65% as total adverse facts available (“AFA”) for (1) the China-wide entity and (2) the uncooperative mandatory respondent Ningbo Jintian Import & Export Co., Ltd. (“Ningbo”). Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China, 75 Fed.Reg. 41,808, 41,811 (Dep't of Commerce July 19, 2010) (final determ.) (“ LTFV Final Results ”).

The separate rate of 123.83% was the subject of interesting litigation. One of the separate rate respondents, Yangzhou Bestpak Gifts & Crafts Co. (“Bestpak”), challenged the reasonableness of the 123.83% separate rate, which Commerce derived by simply averaging Yama's de minimis rate and Ningbo's total AFA rate (which was derived from the petition). The U.S. Court of International Trade (“CIT”) was initially skeptical that such a simple average constituted a “reasonable method” to derive the separate rate, assuming there might be other options from the administrative record, and remanded to Commerce for further consideration. Yangzhou Bestpak Gifts & Crafts Co. v. United States, 35 CIT ––––, ––––, 783 F.Supp.2d 1343, 1350–53 (2011), after remand,36 CIT ––––, 825 F.Supp.2d 1346 (2012), vacated by716 F.3d 1370 (Fed.Cir.2013). On remand, Commerce explained that there was very limited data upon which to determine the commercial reality of the separate rate respondents. Bestpak, 36 CIT at ––––, 825 F.Supp.2d at 1350–51. The CIT acknowledged the limited record data and sustained Commerce's explanation as reasonable (supported by substantial evidence), albeit reluctantly. It explained the challenges that limited data pose for Commerce, the interested parties, and the court, especially when drawing conclusions about what constitutes a reasonable measure for the separate rate. Id., 36 CIT at ––––, 825 F.Supp.2d at 1350–53.

On appeal the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) rejected the reasonableness of Commerce's simple average that incorporated a total AFA rate for otherwise cooperative, separate rate respondents, noting that Commerce was to blame for the limited record, having had ample time to select another mandatory respondent when Ningbo withdrew its participation. Bestpak, 716 F.3d at 1378–80. On remand Commerce chose to review Bestpak individually and calculate its actual rate. Despite Bestpak maintaining through the course of the litigation that it deserved a zero percent rate, Bestpak, 35 CIT at ––––, 825 F.Supp.2d at 1350 (“Bestpak, for its part, requests an order from the court directing Commerce to assign Bestpak a 0% rate.”), 716 F.3d at 1381–82 (“Bestpak ... argued that the sample invoice was evidence of its commercial behavior and strongly supported a determination that Bestpak was entitled to a zero dumping rate.”), Bestpak voluntarily dismissed the litigation rather than be individually reviewed, conceding that all its entries would be covered by the 123.83% separate rate. See Form 8 Notice of Dismissal, Yangzhou Bestpak Gifts & Crafts Co. v. United States, No. 10–00295 (USCIT Nov. 13, 2013), ECF No. 76 (Yangzhou Bestpak will remain subject to the antidumping duty order on narrow woven ribbonwith woven selvedge from the People's Republic of China at the antidumping duty rate of 123.83%, and all of Bestpak's entries suspended in this action will be liquidated at that rate.”). One wonders what Bestpak's actual rate and commercial reality would have been had Commerce completed the individual review. Would it have been higher than 123.83%? In any event, although seemingly struck down by the Federal Circuit as unreasonable, the 123.83% separate rate now appears to have regained some validity.

In the subsequent first administrative review Commerce selected and examined Hubscher, an exporter, as the only mandatory respondent. No other respondents were individually reviewed. Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China, 77 Fed.Reg. 47,363, 47,363–64 (Dep't of Commerce Aug. 8, 2012) (prelim. results admin. review) (“ Preliminary Results ”). Hubscher at first cooperated, reporting among its questionnaire responses that Yama produced all of the subject merchandise that Hubscher imported during the period of review. When it came time to submit its cost information, however, Hubscher withdrew from the administrative review. Hubscher Letter Re: Withdrawal from Administrative Review, at 1–2 (Dep't of Commerce May 29, 2012), PD 68.2

Commerce then applied total AFA to Hubscher. Preliminary Results, 77 Fed.Reg. at 47,367;Decision Memorandum at 2. Commerce selected 247.65%, “the highest rate alleged in the petition,” as the total AFA rate. Preliminary Results, 77 Fed.Reg. at 47,368 (“To determine the relevance of the petition margin, we placed the model-specific rates calculated for the respondents in the LTFV investigation on the record of this segment of the proceeding and compared the 247.65 percent rate with those model-specific rates.”); see also Final Results, 78 Fed.Reg. at 10,133;Decision Memorandum at 8–10 & n. 26; Comments and Departmental Position Containing Proprietary Information (Dep't of Commerce Feb. 5, 2013), CD 30 (“ Corroboration Memorandum ”). Although Hubscher admits “that it did not fully participate in the first administrative review and deserves a dumping margin based on ‘adverse facts available,’ Pl.'s Br. at 17; see19 U.S.C. § 1677e(a), Hubscher argues that Commerce unreasonably applied the highest petition rate as total AFA. Pl.'s Br. at 3, 17. For the reasons set forth below, the court sustains the Final Results.

II. Standard of Review

For administrative reviews of antidumping duty orders, the court 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.” Dupont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.Cir.2005) (quoting 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. 2014). 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. 2013).

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...

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