Jilin Bright Future Chemicals Co. v. United States

• Docket Number: 22-00336,Slip Op. 23-188
• Decision Date: 21 December 2023
• Parties: JILIN BRIGHT FUTURE CHEMICALS CO., LTD., Plaintiff, v. UNITED STATES, Defendant, NINGXIA GUANGHUA CHERISHMET ACTIVATED CARBON CO., LTD. AND DATONG MUNICIPAL YUNGUANG ACTIVATED CARBON CO., LTD., Plaintiff-Intervenors, and CALGON CARBON CORPORATION AND NORIT AMERICAS, INC., Defendant-Intervenors.
• Court: U.S. Court of International Trade

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JILIN BRIGHT FUTURE CHEMICALS CO., LTD., Plaintiff,

NINGXIA GUANGHUA CHERISHMET ACTIVATED CARBON CO., LTD. AND DATONG MUNICIPAL YUNGUANG ACTIVATED CARBON CO., LTD., Plaintiff-Intervenors,
v.
UNITED STATES, Defendant,

and CALGON CARBON CORPORATION AND NORIT AMERICAS, INC., Defendant-Intervenors.

No. 22-00336

Slip Op. 23-188

Court of Appeals of International Trade

December 21, 2023

[Denying Plaintiff's motion for judgment on the agency record and sustaining the U.S. Department of Commerce's final results in the fourteenth administrative review of the antidumping duty order on certain activated carbon from the People's Republic of China.]

Jonathan M. Freed, Robert G. Gosselink, and Doris Di, Trade Pacific PLLC, of Washington, DC, for Plaintiff Jilin Bright Future Chemicals Co., Ltd.

Francis J. Sailer, Jordan C. Kahn, and Kavita Mohan, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Plaintiff-Intervenors Ningxia

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Guanghua Cherishmet Activated Carbon Co., Ltd. and Datong Municipal Yunguang Activated Carbon Co., Ltd.

Emma E. Bond, 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 Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Claudia Burke, Deputy Director. Of counsel on the brief was Ruslan Klafehn, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

John M. Herrmann, R. Alan Luberda, and Melissa M. Brewer, Kelley Drye & Warren LLP, of Washington, DC, for Defendant-Intervenors Calgon Carbon Corporation and Norit Americas, Inc.

Before: Mark A. Barnett, Chief Judge

OPINION

Barnett, Chief Judge:

Jilin Bright Future Chemicals Co., Ltd. ("Jilin Bright" or "Plaintiff") challenges the final results of the U.S. Department of Commerce ("Commerce" or "the agency") in the fourteenth administrative review of the antidumping duty order on certain activated carbon from the People's Republic of China ("China") for the period of review ("POR") April 1, 2020, through March 31, 2021. See Certain Activated Carbon From the People's Republic of China, 87 Fed.Reg. 67,671 (Dep't Commerce Nov. 9, 2022) (final results of antidumping duty admin. rev.; and final determination of no shipments; 2020-2021) ("Final Results"), ECF No. 28-5, and accompanying Issues and Decision Mem., A-570-904 (Nov. 2, 2022) ("I&D Mem."), ECF No. 28-4.^[1]

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Jilin Bright challenges Commerce's selection of surrogate values for bituminous coal and coal tar pitch. Confid. Mem. in Supp. of Mot. for J. Upon the Agency R. of Pl. Jilin Bright Future Chemicals Co., Ltd. ("Pl.'s Mem."), ECF No. 37; Pl. Jilin Bright's Reply to Def.'s Resp. to Jilin Bright's Mot. for J. on the Agency R. ("Pl.'s Reply"), ECF No. 50; see also Mem. of Law in Supp. of Pl.-Ints.' Mot. for J. on the Agency R., ECF No. 39 (supporting Plaintiff's arguments); Pl.-Ints.' Reply Br., ECF No. 51 (same). Defendant United States ("Defendant" or "the Government") responds in support of Commerce's determination. Confid. Def.'s Resp. to Pl.'s and Pl.-Ints.' Mots. for J. on the Agency R. ("Def.'s Resp."), ECF No. 43; see also Def.-Ints.' Resp. in Opp'n to Pls.' Mot. for J. on the Agency R., ECF No. 45 (supporting the Government's arguments).

For the following reasons, the Final Results will be sustained.

Legal Background

The United States imposes antidumping duties on foreign-produced goods sold in the United States at less than fair value based upon certain findings by Commerce and the U.S. International Trade Commission. 19 U.S.C. § 1673 (2018).^[2] Commerce compares the "amount by which the normal value exceeds the export price or constructed export price of the subject merchandise" to determine the antidumping duty margin. Id. § 1677(35)(A).

In a nonmarket economy country, like China, Commerce generally determines the normal value by valuing "the factors of production" in a surrogate market economy

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country that is, to the extent possible, "at a level of economic development comparable to the nonmarket economy country" and a "significant producer[] of comparable merchandise." Id. § 1677b(c)(4); see also id. § 1677b(c)(1).^[3] The agency determines these surrogate values "based on the best available information." Id. § 1677b(c)(1). "Commerce has discretion to determine what constitutes the best available information" because the term is not statutorily defined. Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 1375 (Fed. Cir. 2015). The agency generally relies on "surrogate values that are publicly available, are product-specific, reflect a broad market average, and are contemporaneous with the period of review." Id. (citation omitted); see also 19 C.F.R. § 351.408(c)(1) (2021)^[4] (stating preference for "publicly available information"). Commerce prefers to use a single surrogate country to value all factors of production. 19 C.F.R. § 351.408(c)(2) (excepting labor).

Commerce may test the reasonableness of the surrogate values available to it using "benchmark" data of "a product whose price roughly correlates with the price of an input assigned a surrogate value." Blue Field (Sichuan) Food Indus. Co. v. United States, 37 CIT 1619, 1622, 949 F.Supp.2d 1311, 1317 (2013). Although benchmark

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data need not come from an economically comparable country, the data may be "less informative the greater the difference" in economic development. Id.

Procedural Background

On June 11, 2021, Commerce initiated the fourteenth administrative review of the antidumping duty order on certain activated carbon from China. Initiation of Antidumping and Countervailing Duty Admin. Revs., 86 Fed.Reg. 31,282, 31,289 (Dep't Commerce June 11, 2021), PR 12, PJA Tab 1. Commerce selected Jilin Bright and Datong Juqiang Activated Carbon Co., Ltd. ("DJAC") as the mandatory respondents. See Resp't Selection (Aug. 5, 2021) at 1, 5, CR 17, PR 50, PJA Tab 2.

On May 6, 2022, Commerce preliminarily determined that certain activated carbon from China was sold at less than fair value in the United States during the POR. Certain Activated Carbon From the People's Republic of China, 87 Fed.Reg. 27,094 (Dep't Commerce May 6, 2022) (prelim. results of antidumping duty admin. rev., prelim. determination of no shipments; 2020-2021) ("Prelim. Results"), PR 304, PJA Tab 15; Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Rev., A-570-904 (Apr. 29, 2022) ("Prelim. Mem."), PR 299, PJA Tab 13. Commerce preliminarily selected Malaysia as the primary surrogate country. Surrogate Values for the Prelim. Results (Apr. 29, 2022) at 1, PR 302, PJA Tab 14. Commerce preliminarily valued bituminous coal using Malaysian import data under Harmonized Tariff Schedule ("HTS") 2701.12 and coal tar pitch using Malaysian import data under HTS 2706. Id. at 4. With respect to its bituminous coal valuation, Commerce also requested that the parties supply information about the calculation of gross calorific value to aid its determination

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as to whether respondents' inputs meet the requirements of bituminous coal under HTS 2701.12. See Prelim. Mem. at 27.

Jilin Bright contested these two preliminary surrogate values. First, Jilin Bright disputed the surrogate value for bituminous coal, relying on its testing to argue that, because of heat value, the coal it used falls under HTS 2701.19, "other coal," rather than HTS 2701.12, "bituminous coal." Case Br. (July 8, 2022) ("Jilin Bright Case Br.") at 8-10, CR 220, PR 328, CJA Tab 8. Second, relying on the Global Coal Tar and Coal Tar Pitch Report ("UMR Coal Tar Report")^[5] as a benchmark, Jilin Bright argued that Malaysian import data under HTS 2706 for coal tar pitch was anomalous. Id. at 5-6. Jilin Bright proposed that Commerce should instead use the data from the UMR Coal Tar Report as the surrogate value because the report contained specific pricing based on pitch content and product application. Id. at 7. In the alternative, Jilin Bright proposed that Commerce use data for Russian imports under HTS 2706 as the surrogate value for coal tar pitch. Id. at 8.

For the Final Results, Commerce selected a formula to convert the heat value of Jilin Bright's bituminous coal and, based on that conversion, rejected Jilin Bright's argument that such coal did not meet the standards for HTS 2701.12. I&D Mem. at 23- 24. Commerce also continued to value coal tar pitch using the Malaysian import data

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under HTS 2706 because the UMR Coal Tar Report did not include an adequate explanation of the methodology used to obtain and report the data therein. Id. at 27-28. Jilin Bright now challenges the Final Results, arguing that Commerce's surrogate value selections for bituminous coal and coal tar pitch are not supported by substantial evidence. Pl.'s Mem. at 6, 16.

Jurisdiction and Standard of Review

The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) 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). "Substantial evidence . . . means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 217 (1938). Substantial evidence requires Commerce to "explain the basis for its decisions," and "the path of Commerce's decision must be reasonably discernable." NMB Sing. Ltd. v. United States, 557 F.3d 1316, 1319 (Fed. Cir. 2009). "The question here is not whether the information Commerce used was the best available, but rather whether a reasonable mind could conclude that Commerce chose the best available information." Jiaxing Brother Fastener Co. v. United States, 822 F.3d...