Jacobi Carbons AB v. United States

• Decision Date: 04 March 2019
• Docket Number: Slip Op. 19-27,Consol. Court No. 15-00286
• Citation: 365 F.Supp.3d 1323
• Parties: JACOBI CARBONS AB and Jacobi Carbons, Inc., Plaintiffs, and Ningxia Huahui Activated Carbon Co., Ltd., et al., Plaintiff-Intervenors, v. UNITED STATES, Defendant, and Calgon Carbon Corp. and Cabot Norit Am., Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

365 F.Supp.3d 1323

JACOBI CARBONS AB and Jacobi Carbons, Inc., Plaintiffs,

and

Ningxia Huahui Activated Carbon Co., Ltd., et al., Plaintiff-Intervenors,

v.UNITED STATES, Defendant,andCalgon Carbon Corp. and Cabot Norit Am., Inc., Defendant-Intervenors.

Slip Op. 19-27

Consol. Court No. 15-00286

United States Court of International Trade.

March 4, 2019

Daniel L. Porter and Tung A. Nguyen, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc.

Gregory S. Menegaz, J. Kevin Horgan, and Alexandra H. Salzman, DeKieffer & Horgan, PLLC, of Washington, DC, for Plaintiff-Intervenors Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Co., Ltd., Ningxia Mineral and Chemical Ltd., Shanxi DMD Corp., Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd.

Antonia R. Soares, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Emma T. Hunter, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

David A. Hartquist, R. Alan Luberda, John M. Herrmann, Melissa M. Brewer, and Kathleen M. Cusack, Kelley Drye & Warren LLP, of Washington, DC, for Defendant-Intervenors Calgon Carbon Corp. and Cabot Norit Americas, Inc.

OPINION AND ORDER

Barnett, Judge:

This matter is before the court following the U.S. Department of Commerce's ("Commerce" or "the agency") second redetermination upon remand in this case. See Final Results of Redetermination Pursuant to Court Remand ("2nd Remand Results"), ECF No. 133-1.

Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc. (together, "Jacobi") and Plaintiff-Intervenors¹ (collectively, with Jacobi, "Plaintiffs") initiated these consolidated cases challenging several aspects of Commerce's final results in the seventh administrative review ("AR7") of the antidumping duty order on certain activated carbon from the People's Republic of China ("PRC" or "China"). See Certain Activated Carbon from the People's Republic of China , 80 Fed. Reg. 61,172 (Dep't Commerce Oct. 9, 2015) (final results of antidumping duty admin. review; 2013-2014) (" Final Results "), ECF No. 37-3, and accompanying Issues and Decision Mem., A-570-904 (Oct. 2, 2015) ("I & D Mem."), ECF No. 37-4.² Plaintiffs challenged Commerce's (1) selection of Thailand as the primary surrogate country, (2) selection of Thai surrogate values to value financial ratios and carbonized material, and (3) reduction of Jacobi's constructed export price ("CEP") by an amount for irrecoverable value added tax ("VAT"). See, e.g. , Confidential Pls. Jacobi Carbons AB and Jacobi Carbons, Inc.'s Mot. for J. on the Agency R. and Pls.' Br. in Supp. of their Mot. for J. on the Agency R. ("Jacobi Rule 56.2 Mem."), ECF No. 51.

On April 7, 2017, the court remanded Commerce's surrogate country selection (specifically, its determinations regarding economic comparability generally and significant production of comparable merchandise by Thailand in particular); sustained Commerce's authority to deduct irrecoverable VAT from CEP while remanding its calculation methodology as lacking substantial evidence; and deferred resolving Plaintiffs' arguments regarding Thai surrogate values pending the results of Commerce's remand redetermination. See Jacobi Carbons AB v. United States ("Jacobi (AR7) I "), 41 CIT ––––, 222 F.Supp.3d 1159 (2017).

On August 10, 2017, Commerce filed its first remand redetermination. See Final Results of Redetermination Pursuant to Court Remand ("1st Remand Results"), ECF No. 105–1. Following briefing and oral argument, on April 19, 2018, the court sustained Commerce's economic comparability determination but again remanded the agency's determination that Thailand is a significant producer of comparable merchandise and irrecoverable VAT adjustment, as well as its surrogate value selections for financial ratios and carbonized material. See Jacobi Carbons AB v. United States ("Jacobi (AR7) II "), 42 CIT ––––, 313 F.Supp.3d 1308 (2018).³

On October 24, 2018, Commerce filed its second remand redetermination. Therein, Commerce affirmed its determination that Thailand is a significant producer of comparable merchandise and its selection of Thai import data as the surrogate value for carbonized material. 2nd Remand Results at 3-8, 15-20. Commerce selected a different Thai source to value financial ratios and reconsidered the basis for its VAT adjustment while continuing to adjust Jacobi's constructed export price for VAT. See id. at 9-15, 20-32. Commerce's redetermination increased Jacobi's weighted-average dumping margin from $ 1.05 per kilogram to $ 1.76 per kilogram. See id. at 53-54; Final Results , 80 Fed. Reg. at 61,174. Commerce assigned Jacobi's rate to the non-individually-examined respondents eligible for a separate rate. See 2nd Remand Results 53-54.

Jacobi and CATC filed comments opposing the 2nd Remand Results. See Pls.' Comments on Commerce's Second Remand Determination ("Jacobi's Opp'n Cmts."), ECF No. 138 ; Consol. Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Comments in Opp'n to U.S. Department of Commerce's Second Remand Redetermination ("CATC's Opp'n Cmts."), ECF No. 137. Defendant United States ("the Government") and Defendant–Intervenors Calgon Carbon Corp. and Cabot Norit Americas, Inc. ("Calgon") filed comments in support of the 2nd Remand Results. See Def.'s Reply to Pls.' and Consol. Pls.' Respective Comments on the Second Remand Redetermination ("Def.'s Reply Cmts."), ECF No. 140 ; Def.–Ints.' Comments in Supp. of the Department of Commerce's Remand Redetermination ("Def–Ints.' Reply Cmts."), ECF No. 139.

For the following reasons, the court remands Commerce's determination that Thailand is a significant producer of comparable merchandise and directs Commerce to reconsider its selection of a primary surrogate country. Because Commerce relied on its preference to use data from the primary surrogate country as a basis for selecting the challenged surrogate values, see 2nd Remand Results at 13, 19, the court also remands Commerce's surrogate value selections.

The court sustains Commerce's VAT adjustment.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),⁴ and 28 U.S.C. § 1581(c).

The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). The court's review of Commerce's interpretation and implementation of a statutory scheme is guided by Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Apex Frozen Foods Private Ltd. v. United States, 862 F.3d 1322, 1329 (Fed. Cir. 2017). First, the court must determine "whether Congress has directly spoken to the precise question at issue." Id. (quoting Chevron, 467 U.S. at 842, 104 S.Ct. 2778 ). If Congress's intent is clear, "that is the end of the matter," and the court "must give effect to the unambiguously expressed intent of Congress." Id. (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778 ). Only "if the statute is silent or ambiguous," must the court determine whether the agency's action "is based on a permissible construction of the statute." Id. (quoting Chevron, 467 U.S. at 843, 104 S.Ct. 2778 ). Additionally, "[t]he results of a redetermination pursuant to court remand are also reviewed for compliance with the court's remand order." SolarWorld Ams., Inc. v. United States , 41 CIT ––––, ––––, 273 F.Supp.3d 1314, 1317 (2017) (internal quotation marks and citation omitted).

DISCUSSION

I. Significant Producer of Comparable Merchandise

A. Legal Framework

An antidumping duty is "the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise." 19 U.S.C. § 1673. When an antidumping duty proceeding involves a nonmarket economy country, Commerce determines normal value by valuing the factors of production⁵ in a surrogate country, see id. § 1677b(c)(1), and those values are referred to as "surrogate values." In selecting surrogate values, Commerce must use "the best available information" that is, "to the extent possible," from a market economy country or countries that are economically comparable to the nonmarket economy country and are "significant producers of comparable merchandise." Id. § 1677b(c)(1), (4). Commerce generally values all factors of production in a single surrogate country.⁶

Commerce has adopted a four-step approach to selecting a primary surrogate country. Pursuant thereto:

(1) the Office of Policy ("OP") assembles a list of potential surrogate countries that are at a comparable level of economic development to the [non-market economy] country; (2) Commerce identifies countries from the list with producers of comparable merchandise; (3) Commerce determines whether any of the countries which produce comparable merchandise are significant producers of that comparable merchandise; and (4) if more than one country satisfies steps (1)–(3), Commerce will select the country with the best factors data.

Jiaxing Brother Fastener Co., Ltd. v. United States , 822 F.3d 1289, 1293 (Fed. Cir. 2016) (citation omitted); see also Import Admin., U.S. Dep't of Commerce, Non-Market Economy Surrogate Country...