Imperial Sugar Co. v. United States

• Decision Date: 05 October 2016
• Docket Number: Court No. 15-00118,Slip Op. 16-91
• Citation: 181 F.Supp.3d 1284
• Parties: IMPERIAL SUGAR COMPANY, Plaintiff, v. UNITED STATES, Defendant, and Cámara Nacional de las Industrias Azucarera y Alcoholera, Government of Mexico, and American Sugar Coalition, Defendant-Intervenors.
• Court: U.S. Court of International Trade

181 F.Supp.3d 1284

IMPERIAL SUGAR COMPANY, Plaintiff,

v.UNITED STATES, Defendant,andCámara Nacional de las Industrias Azucarera y Alcoholera, Government of Mexico, and American Sugar Coalition, Defendant-Intervenors.

Slip Op. 16-91

Court No. 15-00118

United States Court of International Trade.

October 5, 2016

Gregory J. Spak, White & Case, LLP, of Washington, DC, argued for plaintiff. With him on the brief were Kristina Zissis and Ron Kendler.

Karl S. von Schriltz, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, argued for defendant. With him on the brief were Dominic L. Bianchi, General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

Philippe M. Bruno, Greenberg Traurig, LLP, of Washington, DC, argued for defendant-intervenor Cámara Nacional de las Industrias Azucarera y Alcoholera. With him on the brief were Rosa S. Jeong and Irwin P. Altschuler.

James R. Cannon, Jr., Cassidy Levy Kent (USA) LLP, of Washington, DC, appeared for defendant-intervenor American Sugar Coalition. With him on the brief were Robert C. Cassidy, Jr., Charles S. Levy, and Jonathan M. Zielinski.

Stephan E. Becker, Pillsbury Winthrop Shaw Pittman LLP, of Washington, DC, appeared for defendant-intervenor Government of Mexico. With him on the brief was Sanjay J. Mullick.

OPINION

Barnett, Judge:

Plaintiff Imperial Sugar Company ("Imperial" or "Plaintiff") moves, pursuant to United States Court of International Trade ("USCIT") Rule 56.2, for judgment on the agency record, challenging the United States International Trade Commission's ("ITC" or "Commission" or "Defendant") determination that the agreements suspending the antidumping and countervailing duty investigations concerning sugar from Mexico eliminate completely the injurious effect of subject imports. See Sugar from Mexico , 80 Fed. Reg. 16,426 (ITC Mar. 27, 2015) (determinations) ("Notice of Review Determinations"), Public Joint Appendix ("Public J.A.") Tab 1, ECF No. 62-1 (Tabs 1-10); Administrative Record ("A.R.") 1-139,¹ ECF No. 31; and accompanying Views ("Review Views"), A.R. 2-250, ECF No. 30; see also Confidential Joint Appendix² ("Conf. J.A.") Tab 16, ECF No. 61-2 (Tabs 11-21). For the reasons discussed below, the Court denies Plaintiff's motion for judgment on the agency record.

BACKGROUND

I. The Underlying Investigations

On March 28, 2014, the American Sugar Coalition ("ASC") and its members³ filed antidumping ("AD") and countervailing duty ("CVD") petitions on sugar from Mexico. Sugar from Mexico , 79 Fed. Reg. 18,697 (ITC Apr. 3, 2014) (institution of antidumping and countervailing duty investigations and scheduling of preliminary phase investigations). On May 12, 2014, the ITC preliminarily determined that there was a reasonable indication that the domestic sugar industry was materially injured by reason of imports of sugar from Mexico. Sugar from Mexico , 79 Fed. Reg. 28,550 (ITC May 16, 2014) (preliminary); Sugar from Mexico , USITC Pub. 4467, Inv. Nos. 701–TA–513 and 731–TA–1249 (May 2014) (preliminary), Public J.A. Tab 3, ECF No. 62-1 (Tabs 1-10); A.R. 1-47, ECF No. 31; see alsoSugar from Mexico , Inv. Nos. 701–TA–513 and 731–TA–1249 (May 5, 2014) (preliminary), Confidential Final Consolidated Staff Report and Views ("Prelim. Views") at 3, Conf. J.A. Tab 25, ECF No. 61-5 (Tabs 23-25); A.R. 2-10, ECF No. 66. In its preliminary determination, the Commission found that there is a reasonable indication that the domestic industry was materially injured by reason of subject imports of sugar from Mexico due to: (1) a significant volume and increase in volume of subject imports during the period of investigation⁴ ("POI"); (2) significant underselling by subject imports which, coupled with the significant increase in subject import volume, led to depressed domestic prices to a significant degree during the POI; and (3) a significant adverse impact of the subject imports during the POI. See Prelim. Views at 47-58.

The product scope of the investigations consisted of "sugar derived from sugarcane and sugar beets from Mexico, which is chemically classified as sucrose, a naturally occurring carbohydrate." Id. at 8; see also Sugar from Mexico , 79 Fed. Reg. 22,795, 22,800 (Dep't Commerce Apr. 24, 2014) (initiation of antidumping duty investigation) ("AD Initiation"); Sugar from Mexico, 79 Fed. Reg. 22,790, 22,793 (Dep't Commerce Apr. 24, 2014) (initiation of countervailing duty investigation). The scope of subject imports included

"raw" sugar (sugar with a sucrose content by weight in a dry state that corresponds to a polarimeter

reading of less than 99.5 degrees), and "estandar," or standard sugar, which is sometimes referred to as "high polarity" or "semi refined" sugar (sugar with a sucrose content by weight in a dry state that corresponds to a polarimeter reading of 99.2 to 99.6 degrees) .... Also included in the scope of the investigations [were] "refined" sugar with a sucrose content by weight in a dry state that corresponds to a polarimeter reading of at least 99.9 degrees; brown sugar; liquid sugar (sugar dissolved in water); organic raw sugar; and organic refined sugar.⁵

Prelim. Views at 8-9.

During the ITC's preliminary investigation, Imperial submitted responses to the ITC's questionnaires but, otherwise, did not submit written arguments. Def.-Intervenor Cámara Nacional de las Industrias Azucarera y Alcololera's Resp. in Opp'n to Pls.' Mot. for J. on the Agency R. ("Cámara Resp.") at 7, ECF No. 46. Imperial also did not participate in the investigative staff conference or file postconference briefs. Confidential Def. United States Int'l Trade Comm'n's Opp'n to Pls.' Mot. for J. on the Agency R. ("Def.'s Resp.") at 22, ECF No. 42. Imperial entered its appearance in the final phase of the Commission's investigation on December 9, 2014. Cámara Resp. at 7. Imperial did not participate in Commerce's AD and CVD investigations. Id. at 8.

In its preliminary determinations, the Commission defined the domestic industry "as the domestic producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product" pursuant to 19 U.S.C. § 1677(4)(A) (2012).⁶ Prelim. Views at 20 & n.87 (internal quotation marks omitted). Accordingly, the ITC based its domestic industry data on the questionnaire responses of "24 firms that accounted for the vast majority of sugar production during October 2010 through December 2013, including nine sugarcane millers, two firms that both mill and refine sugarcane, four sugarcane refiners, seven sugar beet processors, and two firms that primarily produce liquid sugar." Id . at 4.

Plaintiff represents about seven percent of the domestic sugar industry, Oral Argument ("Oral Arg.") at 7:29-7:50, and is referred to as a "destination refiner." "Destination refiners" are "refiners that use imported raw sugar as an input." Def.'s Resp. at 3. Thus, "destination refiners" produce refined sugar and are members of the domestic industry. The input to their production process, notably, is raw sugar or estandar and, when imported from Mexico, their imported input is subject merchandise in the investigations. See id. The destination refiners segment of the domestic industry constitutes about one-third of the domestic sugar industry. Oral Arg. at 27:45-28:04.

On August 25, 2014, Commerce issued its affirmative preliminary determination in the CVD investigation. Sugar from Mexico , 79 Fed. Reg. 51,956 (Dep't Commerce Sept. 2, 2014) (preliminary affirmative countervailing duty investigation and alignment of final countervailing duty determination with final antidumping duty determination). On October 24, 2014, Commerce issued its affirmative preliminary determination in the AD investigation. Sugar from Mexico , 79 Fed. Reg. 65,189 (Dep't Commerce Nov. 3, 2014) (preliminary determination of sales at less than fair value and postponement of final determination).

On October 27, 2014, three days after its AD Preliminary Determination was issued, Commerce announced that it had initialed draft AD and CVD suspension agreements (collectively, "the Agreements") with the Government of Mexico ("GOM") and Mexican exporters.⁷ Review Views at 4. Commerce provided interested parties an opportunity to comment on the draft suspension agreements. Id . On the day it initialed the Agreements, Commerce "notified and consulted with" the petitioners and its individual members, the ITC, and other interested parties pursuant to the notice and comment requirements in sections 1671c(e) and 1673c(e). Sugar from Mexico , 79 Fed. Reg. 78,039 (Dep't Commerce Dec. 29, 2014) (suspension of antidumping investigation) ("AD Suspension Notice"), Staff Report Inv. Nos. 704–TA–1 and 734–TA–1 (Review) ( "Review Staff Report") Appendix A, A.R. 2-247, ECF No. 30; Sugar from Mexico , 79 Fed. Reg. 78,044, 78,045 (Dep't Commerce Dec. 29, 2014) (suspension of countervailing duty investigation) ("CVD Suspension Notice"), Review Staff Report Appendix A, A.R. 2-247, ECF No. 30. Commerce "invited interested parties to provide written comments on the proposed suspension agreement[s]." AD Suspension Notice, 79 Fed. Reg. at 78,039 ; CVD Suspension Notice, 79 Fed. Reg. at 78,045. Numerous interested parties, including Imperial, provided comments on the draft suspension agreements. AD Suspension Notice, 79 Fed. Reg. at 78,040 ; CVD Suspension Notice, 79 Fed. Reg. at 78,045 ; see also Rule 56.2 Mot. for J. on the Agency R. on Behalf of Pl. Imperial Sugar Co., ECF No. 39, and Confidential Mem. of P. & A. in Supp. of Pl.'s Rule 56.2 Mot. for J. upon the Agency R. ("Pl.'s Mot.") at 4, ECF No. 39-1.

In its comments on the proposed suspension agreements, Imperial stated that the "draft suspension agreements—in their current form—are not in the public interest and will result in fundamental disruptions of the U.S. sugar market." Pl.'s Mot. at 4 (internal...