Jacobi Carbons AB v. United States

• Decision Date: 05 March 2019
• Docket Number: Slip Op. 19-28,Consol. Court No. 16-00185
• Citation: 365 F.Supp.3d 1344
• 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 1344

JACOBI CARBONS AB and Jacobi Carbons, Inc., Plaintiffs,andNingxia 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. 19-28

Consol. Court No. 16-00185

United States Court of International Trade.

Dated: March 5, 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 Corporation, Ningxia Mineral and Chemical Ltd., Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tianjin Channel Filters Co. Ltd., and Tianjin Maijin Industries Co., Ltd.

Mollie L. Finnan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, 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.

R. Alan Luberda, John M. Herrmann, David A. Hartquist, Melissa M. Brewer, and Kathleen M. Cusack, Kelley Drye & Warren LLP, of Washington, DC, for Defendant-Intervenors Calgon Carbon Corporation 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. 124-1.

Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc. (together, "Jacobi") and Plaintiff-Intervenors¹ (collectively, "Plaintiffs") challenged several aspects of Commerce's final results in the eighth administrative review of the antidumping duty order ("AD 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, 81 Fed. Reg. 62,088 (Dep't of Commerce Sept. 8, 2016) (final results of antidumping duty admin. review; 2014-2015) (" Final Results "), ECF No. 44-4, and accompanying Issues and Decision Mem., A-570-904 (Aug. 31, 2016) ("I & D Mem."), ECF No. 44-5.² Specifically, Plaintiffs challenged Commerce's selection of Thailand as the primary surrogate country and Thai surrogate values for carbonized material, hydrochloric acid, coal tar, and financial ratios, and Commerce's adjustment to Jacobi's constructed export price to account for irrecoverable value-added tax ("VAT"). See, e.g. , Confidential Consol. Pls. Jacobi Carbons AB and Jacobi Carbons, Inc.'s Mot. for J. Upon the Agency R. and Br. in Supp. of Mot. for J. on the Agency R., ECF No. 48 ; Consol. Pls. Carbon Activated Corporation, Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tianjin Channel Filters Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mem. in Supp. of Mot. for J. on the Agency R., ECF No. 53.

On June 20, 2017, the court granted Commerce's request for a remand to clarify or reconsider its findings regarding economic comparability and Thailand's status as a significant producer of comparable merchandise based on its export quantity. See Order (June 20, 2017), ECF No. 77.³ On September 5, 2017, Commerce issued its first remand redetermination. See Final Results of Redetermination Pursuant to Court Order (Sept. 1, 2017) ("1st Remand Results"), ECF No. 78-1. Therein, Commerce further explained its methodology for determining which countries are at the same level of economic development as the PRC and relied on evidence of domestic production rather than exports to support its significant producer determination. Id. at 3-21. On April 19, 2018, following briefing and oral argument on the Final Results as amended by the 1st Remand Results, the court sustained Commerce's economic comparability determination while remanding the agency's determination that Thailand is a significant producer of comparable merchandise, irrecoverable VAT adjustment, and surrogate value selections. See Jacobi Carbons AB v. United States ("Jacobi (AR8) I "), 42 CIT ––––, 313 F.Supp.3d 1344 (2018).⁴

On October 24, 2018, Commerce filed the remand redetermination at issue here. See 2nd Remand Results. Therein, Commerce circled back to export quantity as its basis for finding that Thailand is a significant producer of comparable merchandise, see id. at 4-7; further explained its selection of Thai surrogate values for carbonized material and hydrochloric acid, see id. at 8-15; revised its surrogate value selections for coal tar and financial ratios using data from South Africa and Romania, respectively, see id. at 16-19, 20-24; and reconsidered the basis for its VAT adjustment while continuing to adjust Jacobi's constructed export price for VAT, see id. at 26-37. Commerce's redetermination reduced Jacobi's weighted-average dumping margin from $ 1.756 per kilogram to $ 0.44 per kilogram. Compare id. at 51, with Final Results , 81 Fed. Reg. at 62,089. The reduction in Jacobi's margin also reduced the weighted-average dumping margin assigned to the non-individually-examined respondents eligible for a separate rate from $ 1.357 per kilogram to $ 0.34 per kilogram. Compare 2nd Remand Results at 52, with Final Results , 81 Fed. Reg. at 62,089.

Jacobi and CAC filed comments opposing the 2nd Remand Results with respect to Thailand as a significant producer, the surrogate values selected for carbonized material and hydrochloric acid, and the VAT adjustment. See Pls.' Comments on Commerce's Second Remand Determination ("Jacobi's Opp'n Cmts."), ECF No. 127 ; Consol. Pls. Carbon Activated Corporation, Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tianjin Channel Filters Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Comments in Opp'n to Second Remand ("CAC's Opp'n Cmts."), ECF No. 126. No party challenged the 2nd Remand Results with respect to the surrogate values selected for coal tar or the financial ratios. 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 Comments on the Second Remand Results ("Def.'s Reply Cmts."), ECF No. 131 ; Def.–Ints.' Comments in Supp. of U.S. Department of Commerce Second Remand Redetermination ("Def–Ints.' Reply Cmts."), ECF No. 132.

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, in part, on its preference to use data from the primary surrogate country when making its surrogate value selections for carbonized material and hydrochloric acid, see 2nd Remand Results at 7, 15, 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),⁵ and 28 U.S.C. § 1581(c)(2012).

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 production⁶ 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.⁷

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

...