Itochu Bldg. Prods. Co. v. United States
| Decision Date | 22 March 2018 |
| Docket Number | Slip Op. 18-24,Consol. Court No. 12-00065 |
| Parties | ITOCHU BUILDING PRODUCTS CO., INC., TIANJIN JINCHI METAL PRODUCTS CO., LTD., TIANJIN JINGHAI COUNTY HONGLI INDUSTRY & BUSINESS CO., CERTIFIED PRODUCTS INTERNATIONAL INC., CHIIEH YUNGS METAL IND. CORP., HUANGHUA JINHAI HARDWARE PRODUCTS CO., LTD., SHANGDONG DINGLONG IMPORT & EXPORT CO., LTD., TIANJIN ZHONGLIAN METALS WARE CO., LTD., HENGSHUI MINGYAO HARDWARE & MESH PRODUCTS CO., LTD., HUANGHUA XIONGHUA HARDWARE PRODUCTS CO., LTD., SHANGHAI JADE SHUTTLE HARDWARE TOOLS CO., LTD., SHANGHAI YUEDA NAILS INDUSTRY CO., LTD., SHANXI TIANLI INDUSTRIES CO., LTD., CHINA STAPLE ENTERPRISE (TIANJIN) CO., LTD., QIDONG LIANG CHYUAN METAL INDUSTRY CO., LTD., ROMP (TIANJIN) HARDWARE CO., LTD., CYM (NANJING) NINGQUAN NAIL MANUFACTURE CO., LTD. a/k/a CYM (NANJING) NAIL MANUFACTURE CO., LTD., SHANXI PIONEER HARDWARE INDUSTRIAL CO., LTD., and MINGGUANG ABUNDANT HARDWARE PRODUCTIONS CO., LTD., Plaintiffs, THE STANLEY WORKS (LANGFANG) FASTENING SYSTEMS CO., LTD., and STANLEY BLACK & DECKER, INC., Consolidated Plaintiffs, v. UNITED STATES, Defendant, MID CONTINENT NAIL CORPORATION, Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Before: Jane A. Restani, Judge
PUBLIC VERSION
OPINION[Commerce's remand redetermination results in its administrative review of an antidumping duty covering steel nails from China are sustained.]
Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for plaintiffs. With him on the brief were Bruce M. Mitchell, Mark E. Prado, and Dharmendra N. Choudhary.
Lawrence J. Bogard, Neville Peterson, LLP, of Washington, DC, for consolidated plaintiffs.
Tara K. Hogan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, and Sosun Bae, Trial Attorney. Of counsel on the brief was Jessica DiPietro, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
Adam H. Gordon, The Bristol Group PLLC, of Washington, DC, for defendant-intervenor. With him on the brief was Ping Gong.
Restani, Judge: Before the court is the U.S. Department of Commerce ("Commerce")'s Final Results of Redetermination Pursuant to Itochu Building Products Co., Inc., et al v. United States, ECF No. 163 ("Remand Results"), concerning the second administrative review, for the period August 1, 2009, through July 31, 2010 ("POR"), of the antidumping ("AD") order on certain steel nails from the People's Republic of China ("PRC"). See Certain Steel Nails From the People's Republic of China: Final Results of the Second Antidumping Duty Administrative Review, 77 Fed. Reg. 12,556 (Dep't Commerce Mar. 1, 2012) ("Final Results").1 For the reasons stated below, Commerce's Remand Results are sustained.
The court assumes that all parties are familiar with the facts of the case as discussed in Itochu Building Products Co., Inc., et al., v. United States, Slip Op. 17-73, 2017 WL 2703810, at *1-*4 (CIT June 22, 2017) ("Itochu"). For the sake of convenience, the facts relevant to this remand are summarized herein. In the Final Results, Commerce calculated the surrogate value ("SV") of steel plate using GTA India data because it found Joint Plant Committee ("JPC") data from India to be less suitable for valuing the factors of production ("FOPs") for steel plate.2 Certain Steel Nails from the People's Republic of China: Issues and Decision Memorandum for the Final Results of the Second Antidumping Duty Administrative Review, A-570-909, POR 08/01/2009-07/31/2010, at 24-25 (Dep't Commerce Feb. 23, 2012) ("I&D Memo"). Commerce also decided to use financial statements from Sundram Fasteners Limited ("Sundram"), and Bansidhar Granites ("Bansidhar"), to calculate surrogate financial ratios for steel nails because the other financial statements on record were either not contemporaneous with the POR, or wereknown to include countervailable subsidy data. Id. at 11-15. Commerce requested remand, however, to reevaluate whether Sundram's financial statements included countervailable subsidies. Itochu at *9. Lastly, Commerce applied AFA instead of neutral facts available in lieu of data sought from Jinchi's unaffiliated suppliers when Jinchi was unable to obtain the supplier's financial information requested. I&D Memo at 26-28.
On June 22, 2017, the court remanded the case to Commerce. Itochu at *17. The court ruled that: (1) Commerce's decision to use Global Trade Atlas ("GTA") India data as the surrogate value ("SV") for steel plate was unsupported by substantial evidence, id. at *8; (2) Commerce's request for remand with regard to Sundram's financial statements was justified and appropriate, and thus approved, id. at *9; and (3) Commerce erred when it applied adverse facts available ("AFA") to Tianjin Jinchi Metal Products Co., Ltd. ("Jinchi"), id. at *16. The court also directed Commerce and the defendant-intervenor, Mid-Continent Nail Corporation ("Mid-Continent"), to address whether Mid Continent affected AD margins by accepting any payments to withdraw its requests for an administrative review of 160 companies, and if so, whether this was proper. Id. at *17.
On remand, Commerce reconsidered its evaluation of certain SV data, namely GTA India data for steel plate prices and Sundram's financial statements for financial ratios. Based on the record data, Commerce decided to value steel plate using JPC data from India, Remand Results at 3-13, and found that Sundram's financial statements constitute the best record information for financial ratio purposes, id. at 14-26. In addition, Commerce revisited its application of AFA to missing FOP data for Jinchi's unaffiliated masonry nails supplier, and determined to apply neutral facts available. Id. at 26-34. Further, Commerce addressed the court's questions and Mid Continent's responses regarding Mid Continent's withdrawal of review requests in this administrative review, finding no improper conduct. Itochu at *6, *17; Remand Results at 34-39; Certain Steel Nails from the People's Republic of China: Response to Questions Posed in Court Order in Itochu Building Prods., et al. v. United States, Consol. Ct. No. 12-00065, Slip Op. 17-73 (June 22, 2017), A-570-909, POR 08/01/2009-07/31/2010, at 11 (July 14, 2017) ("Mid Continent Withdrawal Letter").
Consolidated Plaintiffs ("Plaintiffs")3 challenge Commerce's continued reliance on Sundram's financial statements as a source for calculating surrogate financial ratios for steel nail production. Plaintiffs' Comments on Final Results of Redetermination, ECF No. 169, at 8-32 ("Pl. Cmts."). Mid Continent challenges Commerce's use of JPC India data as a SV for steel plate and its application of neutral facts available to Jinchi, arguing Commerce misinterpreted of the court's instructions. Comments of Defendant-Intervenor Mid Continent Nail Corporation on Final Results of Redetermination Pursuant to Court Remand, ECF No. 166, at 3-12 ("Def.-Int. Cmts.").
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court upholds Commerce's final results in an antidumping duty review unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]" 19 U.S.C. § 1516a(b)(1)(B)(i).
In Itochu, the court expressed concerns that Mid Continent may have improperly affected antidumping margins by accepting payments in exchange for withdrawing its administrative review request vis-à-vis 160 of the original 222 companies. Itochu at *5. The court directed Mid Continent to provide a written response to Commerce addressing these concerns, specifically asking why such a broad review was initially ordered and whether payments were exchanged for the later withdrawal of the review request. Id. at *6.
In Mid Continent's written response to Commerce, Mid Continent stated as an initial matter that it acted within Commerce's regulations in withdrawing its requests for review of certain Chinese producers and/or exporters of subject merchandise. Mid Continent Withdrawal Letter at 8.4 Mid Continent indicated that its decision to withdraw the requests was based on the particular facts of the case, as it knew them. Id. at 11. Most significantly, Mid Continent asserted that: "No payments were made in exchange for the withdrawal of the requests." Id.
Commerce did not have additional evidence to contradict Mid Continent's responses and, therefore, determined that no further investigation was warranted. Remand Results at 38-39. This result is not challenged and is sustained.
In Itochu, the court found Commerce's selection of GTA India import data was unsupported by substantial evidence. Itochu at *7. The court noted that GTA India price data was not close to the levels of other data and concluded that Commerce failed to consider the reliability of GTA India data in the light of other data sources, and further failed to address evidence suggesting that price does not correlate to steel plate thickness in the range at issue. Id. at *8. Accordingly, the court instructed Commerce to: (1) consider whether other record data sources rendered GTA India import data unreliable; and (2) explain what record evidence supports Commerce's decision to disregard available surrogate data for varying thicknesses of steel plate. Id.
On remand, Commerce apparently interpreted the court's "unsupported by substantial evidence" holding to mean that GTA India data must not be used for either the SV or for benchmarking analysis. Remand Results at 11. The court stated, rather, that the reliability of Commerce's selected surrogate value was called into question, and directed Commerce...
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