Kyd, Inc. v. U.S.

• Decision Date: 26 March 2009
• Docket Number: Slip Op. 09-22. Court No. 07-00456.
• Citation: 613 F.Supp.2d 1371
• Parties: KYD, INC., Plaintiff, v. UNITED STATES, Defendant, and Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

613 F.Supp.2d 1371

KYD, INC., Plaintiff, v. UNITED STATES, Defendant, and Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation, Defendant-Intervenors.

Slip Op. 09-22. Court No. 07-00456.

United States Court of International Trade.

March 26, 2009.

Riggle & Craven (David J. Craven and David A. Riggle) for Plaintiff KYD, Inc.

Michael F. Hertz, Acting Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (David S. Silverbrand); and Mark B. Lehnardt, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Counsel, for Defendant United States.

King & Spalding LLP, Washington, DC (Joseph W. Dorn, Stephen A. Jones, Daniel

L. Schneiderman, and Elizabeth E. Duall) for Defendant-Intervenors Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation.

OPINION

WALLACH, Judge.

I INTRODUCTION

This action arises out of the administrative review of an antidumping duty order conducted by the United States Department of Commerce ("Commerce"). Plaintiff KYD, Inc. ("KYD") challenges two decisions made by Commerce during the course of the challenged review. First, KYD contends that Commerce erred when it selected King Pac Industrial Co., Ltd. ("King Pac") as a mandatory respondent. Second, KYD contends that Commerce erred when it assigned, based on the application of adverse facts available,¹ a 122.88% assessment rate for importations by KYD, a domestic entity, from King Pac, an unrelated foreign producer of the subject merchandise.²

This court has jurisdiction pursuant to 28 U.S.C. § 1581(c). Because Commerce's decisions are supported by substantial evidence and otherwise in accordance with law, Commerce's determination in Polyethylene Retail Carrier Bags from Thailand: Final Results of Antidumping Duty Administrative Review and Partial Rescission of Antidumping Duty Administrative Review, 72 Fed.Reg. 64,580 (November 16, 2007) ("Final Results") is affirmed.

II BACKGROUND

Commerce entered an antidumping duty order on certain polyethylene retail carrier bags from Thailand in 2004. Antidumping Duty Order: Polyethylene Retail Carrier Bags from Thailand, 69 Fed. Reg. 48,204 (August 9, 2004) ("AD Order"). In 2006, Commerce published notice of the opportunity to request an administrative review of the AD Order for the period of review beginning August 1, 2005 and ending July 31, 2006. Antidumping or Countervailing Duty Order, Finding or Suspended Investigation; Opportunity to Request Administrative Review, 71 Fed.Reg. 43,441, 43,442 (August 1, 2006). In response to this notice, domestic interested parties, and Defendant-Intervenors in the instant action, the Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation (collectively, "Defendant-Intervenors"), requested administrative review of 17 producers and/or exporters of polyethylene retail carrier bags from Thailand. Letter from Stephen A. Jones, King & Spalding LLP, to Hon. Carlos Gutierrez, Secretary of Commerce, U.S. Department of Commerce (August 31, 2006), Public Record ("P.R.") 3, Defendant's Public Appendix, Tab 1.

In September 2006, Commerce undertook the administrative review for all 17 companies for which a review was requested. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 71 Fed.Reg. 57,465, 57,466 (September 29, 2006). Commerce requested that these companies provide information regarding the quantity and value of their sales to the United States during the applicable period of review. Memorandum from Laurie Parkhill, Office Director, to Thomas Schauer, Senior Import Trade Compliance Analyst, U.S. Department of Commerce, AD/CVD Operations, Office 5, Re: Polyethylene Retail Carrier Bags from Thailand—Respondent Selection (November 9, 2006), Confidential Record ("C.R.") 11, Defendant's Confidential Appendix, Tab 1 ("Respondent Selection Memo") at 1. After receiving responses from all 17 companies, Commerce determined that it did not have sufficient resources to complete an administrative review for each of the companies for which a review was requested. Id. at 1-3. Thereafter, Commerce selected as mandatory respondents the four companies that it determined represented the greatest possible export volume. Id. at 4-5.

King Pac was among the four mandatory respondents selected. Id. Commerce then sent an antidumping duty questionnaire to King Pac. Letter from Laurie Parkhill, Office Director, AD/CVD Enforcement, U.S. Department of Commerce, to James R. Simoes, Esq., Hunton & Williams (November 9, 2006), P.R. 31, Defendant's Public Appendix, Tab 5. Six weeks later, Commerce advised King Pac by letter that it had not received a response and offered to extend the deadline for submission of the requested information. Letter from Laurie Parkhill, Office Director, AD/CVD Enforcement, U.S. Department of Commerce, to Pattida Julasaksrisakul, King Pac Industrial Co., Ltd. (December 21, 2006), P.R. 46, Defendant's Public Appendix, Tab 6. In July 2007, Commerce placed in the Administrative Record for the challenged review a memorandum to the file incorporating two documents: (1) a memorandum dated January 16, 2004, explaining Commerce's determination to assign an 122.88% adverse facts available ("AFA") rate to Zippac Co., Ltd. ("Zippac") in the initial investigation³; and (2) a memorandum dated August 31, 2006, explaining its decision to assign that same AFA rate to King Pac in the first administrative review of the AD Order.⁴ Memorandum from Hermes Pinilla, International Trade Compliance Analyst, AD/CVD Operations, Office 5, U.S. Department of Commerce, to The File, and attachments thereto (July 2, 2007), C.R. 48, Defendant's Confidential Appendix, Tab 2, P.R. 98, Defendant's Public Appendix, Tab 7 (collectively, "AFA Memo").

Subsequently, Commerce published the preliminary results of this second administrative review. Polyethylene Retail Carrier Bags from Thailand: Preliminary Results of Antidumping Duty Administrative Review and Intent to Rescind in Part, 72 Fed.Reg. 37,718 (July 11, 2007) ("Preliminary Results"). In the Preliminary Results, Commerce stated that it would assign an AFA rate to King Pac because it never responded to the antidumping questionnaire. Id. at 37,720. Commerce selected the rate of 122.88% which had been assigned to Zippac in the initial investigation and to King Pac after the first administrative review. Id. Commerce determined that the AFA rate remained both reliable and relevant. Id.

KYD filed a case brief challenging Commerce's selection of King Pac as a mandatory respondent as well as Commerce's corroboration, and ultimate imposition, of the AFA rate. Case Brief of KYD, Inc. before the U.S. Department of Commerce, Case No. A-549-821, Administrative Review of Polyethylene Retail Carrier Bags from Thailand for the period August 1, 2005 to July 31, 2006 (August 10, 2007), C.R. 49, Defendant's Confidential Appendix, Tab 3, P.R. 110, Defendant's Public Appendix, Tab 9 ("KYD Administrative Case Brief"). Commerce rejected KYD's arguments. See Memorandum from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, U.S. Department of Commerce, Re: Issues and Decision Memorandum for the Antidumping Duty Administrative Review of Polyethylene Retail Carrier Bags from Thailand for the Period of Review August 1, 2005, through July 31, 2006 (November 8, 2007), P.R. 122, Defendant's Public Appendix, Tab 11 ("Final Decision Memo") cmt. 1, at 2-4 (selection of mandatory respondents), and cmt. 2, at 3-7 (imposition of AFA rate). King Pac was assigned a final AFA rate of 122.88%. Final Results, 72 Fed.Reg. at 64,581.

III STANDARD OF REVIEW

The court must uphold a determination by Commerce resulting from an administrative review of an antidumping duty order 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); Carpenter Tech. Corp. v. United States, 510 F.3d 1370, 1373 (Fed. Cir.2007).

The substantial evidence test "requires only that there be evidence that a reasonable mind might accept as adequate to support a conclusion." Cleo Inc. v. United States, 501 F.3d 1291, 1296 (Fed.Cir.2007) (citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951)). While the court must consider contradictory evidence, "the substantial evidence test does not require that there be an absence of evidence detracting from the agency's conclusion, nor is there an absence of substantial evidence simply because the reviewing court would have reached a different conclusion based on the same record." Id. (citing Universal Camera Corp., 340 U.S. at 487-88, 71 S.Ct. 456); see also Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir. 2001); U.S. Steel Group v. United States, 96 F.3d 1352, 1357 (Fed.Cir.1996).

To determine whether Commerce's interpretation and application of the antidumping statute at issue "is in accordance with the law," the court must conduct the two-step analysis articulated by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first step of the Chevron analysis, the court must ascertain "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Wheatland Tube Co. v. United States, 495 F.3d 1355, 1359 (Fed.Cir.2007) (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778).

The court reaches the second step of the Chevron analysis only "if the statute is silent or ambiguous with respect to the specific...