Jinan Farmlady Trading Co. v. United States

• Decision Date: 07 June 2017
• Docket Number: Court No. 12–00181,Slip Op. 17–69
• Citation: 228 F.Supp.3d 1351
• Parties: JINAN FARMLADY TRADING CO., LTD., Plaintiff, v. UNITED STATES, Defendant, v. Christopher Ranch, LLC, the Garlic Company, Valley Garlic, Vessey and Company, Inc., and Fresh Garlic Producers Association, Defendant–Intervenor.
• Court: U.S. Court of International Trade

228 F.Supp.3d 1351

JINAN FARMLADY TRADING CO., LTD., Plaintiff,

v.UNITED STATES, Defendant,

v.Christopher Ranch, LLC, the Garlic Company, Valley Garlic, Vessey and Company, Inc., and Fresh Garlic Producers Association, Defendant–Intervenor.

Slip Op. 17–69

Court No. 12–00181

United States Court of International Trade.

June 7, 2017

Robert T. Hume, Hume & Associates LLC, of Taos, New Mexico, argued for Plaintiff.

Jane C. Dempsey, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant. With her on the briefs were Stuart F. Delery, Principle Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Melissa M. Devine, Trial Attorney, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the briefs were George H. Kivork and Michele D. Lynch, Office of Chief Counselor for Import Administration, U.S. Department of Commerce, of Washington D.C.

Michael J. Coursey, Kelley Drye & Warren LLP, of Washington, D.C., argued for Defendant–Intervenors. With him on the briefs was John M. Herrmann.

OPINION AND ORDER

Goldberg, Senior Judge:

Plaintiff Jinan Farmlady Trading Co., Ltd. ("Farmlady") challenged the final determination of Defendant U.S. Department of Commerce ("Commerce") concerning its sixteenth administrative review of the antidumping duty order covering fresh garlic from the People's Republic of China. Fresh Garlic from the People's Republic of China , 77 Fed. Reg. 34,346 (Dep't Commerce June 11, 2012) (final admin. review) (" Final Results ") and accompanying Issues and Decision Memorandum ("I & D Mem."). Farmlady moved for judgment on the agency record under USCIT Rule 56.2. For the reasons discussed below, the court sustains the determinations of Commerce with regard to its calculation of surrogate values and finds unlawful Commerce's actions in announcing its intention to issue liquidation instructions 15 days after the publication of the Final Results .

BACKGROUND

When foreign exporters sell their goods in the United States at less than fair value and to the detriment of U.S. industry, the U.S. Government imposes duties on those goods. 19 U.S.C. § 1673. These "antidumping duties" are calculated by subtracting the foreign product's "export price," or the product's price in the United States, from its "normal value" ("NV"), or the product's price in the exporting country. See id. However, when that exporting country has a non-market economy ("NME"), the export-country price cannot be used because the law presumes that government intervention distorts prices in the home market. See Blue Field (Sichuan) Food Indus. Co. v. United States , 37 CIT ––––, ––––, 949 F.Supp.2d 1311, 1316–17 (2013). Therefore, to calculate NV for goods made in NME countries, Commerce assigns each of the goods' direct material inputs an artificial market price or surrogate value. 19 U.S.C. § 1677b(c)(1).

The underlying antidumping order in this case covers imports of fresh garlic from China. Fresh Garlic From the People's Republic of China , 59 Fed. Reg. 59,209 (Dep't Commerce Nov. 16, 1994) (antidumping duty order). In its sixteenth administrative review of that order, Commerce selected five separate rate respondents, including Farmlady, in addition to two mandatory respondents. See Final Results , 77 Fed. Reg. at 34,347 –38.

Commerce selected India as the primary surrogate country for purposes of this review, and relied on data from that country to calculate the surrogate values for all factors of production, including chlorine dioxide and packing materials. See Fresh Garlic from the People's Republic of China: Preliminary Results of the 2009–2010 Antidumping Duty Administration Review , 76 Fed. Reg. 76,375 (Dep't Commerce Dec. 7, 2011) ("Preliminary Results "). The Indian import data covered the period of review and consisted of the unit values of inputs that were imported to India from a range of countries.

For the Preliminary Results , Commerce derived the surrogate values for chlorine dioxide and packing materials by calculating their average unit value from the Indian import data. See Surrogate Value Mem. for the Preliminary Results 2, PD 136 (Dec. 5, 2011) ("Prelim. Surrogate Value Mem."). But Commerce excluded from these calculations any unit values for imports from NME countries. Id. In addition, Commerce excluded values of imports to India "from countries which provide generalized subsidies and "imports that were labeled as originating from an ‘unidentified’ country," because, Commerce "could not be certain that [such imports] were not from either an NME country or a country with general export subsidies." Id. At the administrative level, Farmlady raised two objections that it raises again before this court. First, Farmlady objects to Commerce's exclusion of NME imports from the Indian surrogate data. See Mem. in Supp. of Mot. for J. on the Agency R. 31, ECF No. 21 ("Farmlady Br."). Second, Farmlady claims that Commerce was required, but failed, to exclude "aberrational" imports from the Indian surrogate data. Id. at 36.

Farmlady also challenges Commerce's policy of issuing liquidation instructions to Customs and Border Protection ("CBP") 15 days after the publication of the final results of an administrative review (the "15–Day Policy"). Id. at 56.

JURISDICTION AND STANDARD OF REVIEW

This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) to hear Farmlady's challenge to Commerce's calculation of surrogate values. The court will sustain Commerce's decisions 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). This Court has jurisdiction under 28 U.S.C. § 1581(i) to consider Farmlady's challenge to Commerce's policy issuing liquidation instructions 15 days after the publication of the Final Results . See Shinyei Corp. of Am. v. United States , 355 F.3d 1297, 1304–05 (Fed. Cir. 2004). In reviewing the 15–Day Policy, this Court determines whether Commerce's attendant actions, findings, or conclusions are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706 ; 28 U.S.C. § 2640(e).

DISCUSSION

I. The Court Sustains Commerce's Selection of Data for Surrogate Values.

As discussed above, in determining the surrogate values for the chlorine dioxide and packing material inputs, Commerce excluded import data that reflected imports into India from NME countries. Prelim. Surrogate Value Mem. 2.

Farmlady argues that Commerce was required to "use all (non-aberrational) imports" from the Indian import statistics to calculate surrogate values. Farmlady Br. 19 n.52. Farmlady therefore challenges Commerce's calculations of the surrogate values on two grounds. First, Farmlady contests Commerce's decision to exclude from the import statistics any data for imports to India from NME countries. Farmlady Br. 31–36. Second, Farmlady argues that the import statistics on which Commerce relied contained "aberrational" data that distorted the surrogate values for chlorine dioxide and the packing materials. Id. at 36–38.

The Government maintains that Commerce's exclusion of Indian import data for imports from NME countries was reasonable because those data were "distorted and are, therefore, unreliable." Def. Opp. to Pl.'s Mot. for J. on the Agency R. 6, ECF No. 27 ("Gov. Br."). In addition, the Government argues that no record evidence demonstrated that any included data were "aberrant, unreliable, or unrepresentative." Id. For the following reasons, the court agrees and sustains the determinations of Commerce concerning the selection of surrogate value data.

A. Commerce Did Not Err in Excluding Import Data from NME Countries.

The relevant statute is silent on the question of how Commerce should derive surrogate values from import statistics. See 19 U.S.C. § 1677b(c)(1). The statute does not direct Commerce to either include or exclude import data on imports from NME countries. Rather, Commerce must select and apply the "best available information regarding the values of such factors" in an appropriate surrogate market economy country. Id. Because the term "best available information" is not defined by statute, Commerce has broad discretion to determine what constitutes such information. See Qingdao Sea–Line Trading Co. v. United States , 766 F.3d 1378, 1386 (Fed. Cir. 2014) (citing QVD Food Co. v. United States , 658 F.3d 1318, 1323 (Fed. Cir. 2011) ).

Here, Commerce was justified in disregarding any import data concerning imports into India from NME countries. Commerce provided a reasoned explanation for its decision, namely, that excluding data on imports to India from NME countries followed its "longstanding determination that NME prices are unreliable." I & D Mem. 37. Commerce relied on Indian import data as a means to reducing the distortion presented by China's NME. It follows that it was reasonable for Commerce to infer that any surrogate import data from NME countries are likewise unreliable. This court has previously held that, while a "blanket policy" against ever using NME data cannot be sustained, "it is reasonable for Commerce to infer that data on imports from an NME country are inferior to import data for goods from a market economy country." Jinan Yipin Corp. v. United States , 33 CIT 934, 950, 637 F.Supp.2d 1183, 1195–96 (2009). Ultimately, Commerce's decision to exclude the data was logically consistent with the antidumping statute's general requirement that the agency derive values of NME inputs using the "best available information regarding the values of such factors in a market economy country." See 19 U.S.C. § 1677b(c)(1)&(4). Thus, Commerce reasonably disregarded Indian import statistics for imports from NME countries.

Farmlady contends that Commerce's decision to exclude NME import data yielded "grossly distorted" surrogate values. Farmlady Br. 33–34; see also Farmlady Case Brief 4, PD 186 (Apr. 20, 2011) ("[T]he Department cannot exclude...