Inner Mong. Jianlong Biochemical Co. v. United States
| Decision Date | 25 September 2018 |
| Docket Number | Slip Op. 18-127,Court No. 16-00187 |
| Citation | 337 F.Supp.3d 1329 |
| Parties | INNER MONGOLIA JIANLONG BIOCHEMICAL CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and CP Kelco U.S., Inc., Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Robert G. Gosselink, Jonathan M. Freed, Jarrod M. Goldfeder, Trade Pacific PLLC, of Washington, D.C., for plaintiff.
Kelly A. Krystyniak, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With her on the brief were Chad A. Readier, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel on the brief was Catherine D. Miller, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Nancy A. Noonan, Matthew L. Kanna, Friederike S. Goergens, Arent Fox LLP, of Washington, D.C., for defendant-intervenor.
Before the court are the Final Results of Redetermination Pursuant to CIT Order, ECF No. 63 (May 21, 2018) ("Final Remand Results"), of the U.S. Department of Commerce ("Commerce" or "the Department") in its review of the request for a new shipper review ("NSR") by Inner Mongolia Jianlong Biochemical Co., Ltd. ("Jianlong"). As part of its antidumping duty investigation of xanthan gum from the People's Republic of China, Jianlong had requested a NSR, which was ultimately rescinded by Commerce. Xanthan Gum from the People's Republic of China , 81 Fed. Reg. 56,586 (Dep't Commerce Aug. 22, 2016) (rescission of NSR) and accompanying Issues & Decision Mem ("I & D Mem."). The court remanded to Commerce for reconsideration of that rescission, as well as other findings made by the Department in its rescission decision. See Inner Mongolia Jianlong Biochemical Co. v. United States , 41 CIT ––––, 279 F.Supp.3d 1332 (2017) (" Jianlong I "). On remand, Commerce continues to find support for its decision to rescind Jianlong's NSR, albeit on separate, alternative grounds. See generally Final Remand Results. The court now sustains Commerce's findings as to the atypicality of certain aspects of the sale in question. However, without substantial evidence supporting its selection of input sales, the court is powerless to sustain Commerce's ultimate bona fide finding. Therefore, the court remands to Commerce: 1) for further consideration of the sales price, with reference to the entire Fufeng AR2 dataset, and 2) for a finding as to the bona fide nature of the NSR transaction that incorporates Commerce's additional sales price analysis.
The appeal previously presented to the court arose out of Commerce's review of Jianlong's NSR, the rescission of which was found to be unsupported by substantial evidence. Jianlong I , 279 F.Supp.3d at 1342. That order faulted the Department for: 1) determining that Jianlong had failed to meet the regulatory requirements for requesting a NSR, 19 C.F.R. § 351.214(b)(2)(iv)(A) ; 2) failing to support with substantial evidence its finding that the sole transaction reported in the period of review ("POR") was non-bona fide ; and 3) rejecting certain documents (Exhibits 1, 2, and 3 submitted in response to new factual information placed on the record in the Department's Preliminary Bona Fide Sales Analysis ("Exhibits 1, 2, and 3") ) without considering the stated purposes for which the exhibits were offered. The court ordered that Commerce reconsider each issue. Id.
In reexamining its decision to rescind Jianlong's NSR on the basis of Jianlong's failure to report its sample shipments, Commerce has now determined that it lacks substantial evidence to support that determination. Final Remand Results at 6-7. As such, Commerce does "not, in this instance, consider Jianlong's failure to report the[ ] sample shipments ... as a failure to meet" the regulatory requirements for requesting a NSR. Id. at 7.
The Department therefore has permitted the NSR to proceed under 19 C.F.R. § 351.214(b)(2)(iv)(A), but now bases its rescission on its prior, alternative basis: that Jianlong's only sale during the POR was non-bona fide. See id. at 12-23, 36-52. Id. at 36. Specifically, the Department determined that four factors support this conclusion: 1) the establishment of Jianlong's U.S. affiliate, Jianlong USA; 2) the timing of the sale in the context of the POR; 3) the sales price; and 4) a new additional factor, namely the actions of [ [ ] ] after the sale was completed. Final Remand Results at 12-23. Commerce compared Jianlong's one reported sale to those the Department selected from sales reported by Neimenggu Fufeng Biotechnologies Co., Ltd. ("Fufeng") in the second administrative review ("AR2") of the antidumping duty order on xanthan gum from China.1 Commerce used only a subset ("input sales" or "Fufeng subset") of the complete dataset of sales reported by Fufeng ("Fufeng AR2 dataset"). The comparison done by Commerce indicated that Jianlong's sales price was high. The evidence, "when considered with the high price" of the transaction in question, indicates to Commerce that Jianlong's normal sales process was not followed, which in turn, suggests to Commerce that the sale in question is non-bona fide. Id. at 52.
Last, Commerce continues to reject Exhibits 1, 2, and 3 offered by Jianlong as clarifying information. Id. at 25-28, 52-56. Commerce has "considered the power of Jianlong's new factual information to rebut, clarify or correct existing factual information and [finds] that [it is rejected because] it does not serve any of these functions." Id. at 55.
In the instant appeal, Jianlong does not contest Commerce's change of position as to the reporting of sample shipments, but now argues that the Department's other determinations are unsupported by substantial evidence. Pl.'s Comments on Final Results of Redetermination Pursuant to Remand, ECF No. 66 (June 20, 2018) ("Pl.'s Comments"). Accordingly, Jianlong asks the court for a remand so that Commerce can further consider whether the sale to [ [ ] ] was bona fide as well as whether the Department has improperly rejected Jianlong's clarifying documents. Because Commerce's selection of the Fufeng subset lacks substantial evidence, the court remands for further consideration in accordance with this opinion. All other determinations as to the atypicality of the sole NSR transaction are sustained.
Having reviewed the Department's findings and conclusions of law, the court grants Jianlong's motion in part, remanding to Commerce for the limited basis of conducting a further sales price comparison analysis and a corresponding finding as to the bona fide nature of the transaction in question.
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and will sustain Commerce's determinations 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). "Substantial evidence requires ‘more than a mere scintilla,’ but is satisfied by ‘something less than the weight of the evidence.’ " Altx, Inc. v. United States , 370 F.3d 1108, 1116 (Fed. Cir. 2004) (citations omitted). If "a reasonable mind might accept the evidence as sufficient to support the finding," Maverick Tube Corp. v. United States , 857 F.3d 1353, 1359 (Fed. Cir. 2017), the substantial evidence threshold is likely met so long as the Department has provided a reasoned basis for its decision. See Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). Commerce's consideration should reflect a sound decision-making process, see Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962), taking into account all evidence on the record, including that which may detract from the ultimate conclusion, CS Wind Vietnam Co. v. United States , 832 F.3d 1367, 1373 (Fed. Cir. 2016). But, whatever the result, the agency's rationale must not be arbitrary, capricious, or an abuse of discretion. Wheatland Tube Co. v. United States , 161 F.3d 1365, 1369 (Fed. Cir. 1998).
For the reasons outlined below, the court sustains Commerce's determinations regarding: 1) Jianlong's reporting of sample shipments and 2) the individual findings of typicality pursuant to 19 U.S.C. § 1675(a)(2)(B)(iv) (II-VII). Yet, the court remands for a further consideration of Jianlong's sales price that considers the entirety of the Fufeng AR2 dataset, as well as an ultimate bona fide finding that accounts for the price comparison to be done on remand. It is recommended that, on remand, the Department admit Exhibits 1, 2, and 3 submitted by Jianlong so as to provide for a proper determination, supported by substantial evidence, that Commerce has selected all relevant input sales for its sales price analysis.
In the court's prior decision, it ordered Commerce to conduct "a more fulsome consideration of Jianlong's sample shipments as entries for consumption." Jianlong I , 279 F.Supp.3d at 1339. Having now acknowledged that there is not substantial evidence on the record to support its prior rescission of Jianlong's NSR under 19 C.F.R. § 351.214(b)(iv)(A), the Department "will not, in this instance, consider Jianlong's failure to report these sample shipments in its NSR request as a failure to meet the requirements of 19 C.F.R. § 351.214(b)(iv)(A)."2 Jianlong agrees that "the final remand results correctly confirm that Jianlong did not fail to meet the regulatory requirements of 19 C.F.R. § 35l.214(b)(2)(iv)(A)." Pl.'s Comments at 4. As this finding is no...
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