KYD, Inc. v. United States

• Decision Date: 18 January 2012
• Docket Number: Slip Op. 12–10.Court No. 09–00034.
• Citation: 807 F.Supp.2d 1372,34 ITRD 1108
• Parties: KYD, INC., Plaintiff, v. UNITED STATES, Defendant.Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation, Defendant–Intervenors.
• Court: U.S. Court of International Trade

34 ITRD 1108

807 F.Supp.2d 1372

KYD, INC., Plaintiff,

v.UNITED STATES, Defendant.Polyethylene Retail Carrier Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation, Defendant–Intervenors.

Slip Op. 12–10.Court No. 09–00034.

United States Court of International Trade.

Jan. 18, 2012.

David John Craven, Riggle and Craven, of Chicago, IL, for Plaintiff.

Carrie Anna Dunsmore, Renee A. Gerber, Stephen Carl Tosini and Vincent dePaul Phillips, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With them on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director. Of counsel on the brief were Rachel Elizabeth Wenthold and Scott McBride, Attorneys, U.S. Department of Commerce, of Washington, DC.

Daniel Lawrence Schneiderman and Stephen Andrew Jones, King & Spalding LLP, of Washington, DC, for Defendant–Intervenors.

OPINION

POGUE, Chief Judge:

This action returns to court following a second remand to the Department of Commerce (“Commerce” or the “Department”).¹ Plaintiff KYD, Inc. (“KYD”), an unaffiliated domestic importer, challenges these Final Remand Redetermination Results (“ Second Remand Results ”).²

Specifically, KYD challenges the dumping margin (“rate”) that Commerce selected in the Second Remand Results for KYD's entries of subject merchandise, certain retail carrier bags (“carrier bags”), imported from Thailand and exported by King Pac Industrial Co., Ltd. (“King Pac”) and Master Packaging Co., Ltd. (“Master Packaging”).

The court has jurisdiction over this matter pursuant to Section 516A(a)(2) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2) (2006) ³ and 28 U.S.C. § 1581(c).

For the reasons discussed below, the court concludes that the Second Remand Results comply with the court's remand order, are free of legal error, are based on a reasonable reading of the record evidence, and therefore are affirmed.

BACKGROUND

This matter arises from Commerce's third administrative review of its 2004 antidumping duty order on carrier bags from Thailand, Antidumping Duty Order: Polyethylene Retail Carrier Bags from Thailand, 69 Fed.Reg. 48,204 (Dep't Commerce Aug. 9, 2004) (the “Order”).⁴ KYD and PRCBC requested the third review, with respect to King Pac, and PRCBC requested review with respect to Master Packaging and three other suppliers. While KYD fully participated in the review, King Pac and Master Packaging did not. Polyethylene Retail Carrier Bags from Thailand: Preliminary Results of Antidumping Duty Administrative Review and Intent to Rescind in Part, 73 Fed.Reg. 52,288, 52,290 (Dep't Commerce Sep. 9, 2008) (“Preliminary Results”). ⁵

Because the exporter/producers did not so participate, Commerce determined that use of facts available, see 19 U.S.C. § 1677e(a),⁶ was required and that an adverse inference, see 19 U.S.C. § 1677e(b),⁷ was warranted to determine KYD's rate (an adverse facts available (“AFA”) rate). Preliminary Results at 52,290. Commerce ultimately assigned a rate of 122.88 percent, from the original investigation, for KYD's entries. Id. In doing so, Commerce declined to use information that KYD provided, including specifically its sales data, and did not calculate an importer-specific assessment rate. Id. at 52,291. The Final Results mirrored these decisions. Final Results at 2,511–12.

KYD commenced this action, challenging the application of adverse inferences with respect to the relevant entries and Commerce's selection of an antidumping duty rate for those entries. The court remanded, concluding that 19 U.S.C. § 1677m(e) ⁸ required Commerce to either consider KYD's information or explain why it declined to do so. KYD, Inc. v. United States, ––– CIT ––––, 704 F.Supp.2d 1323, 1334 (2010) (“ KYD II ”).

In response, Commerce filed its First Remand Results on September 2, 2010, explaining but not altering the 122.88 percent rate. Reviewing those results, the court concluded that the statute permitted Commerce to select a rate adverse to KYD, but that the 122.88 percent rate was neither corroborated ⁹ nor supported by substantial evidence in the record. KYD III at 1368. The court recognized that although that rate may have been reliable when first used, it was no longer relevant to KYD's imports in the third review, especially when considered in light of KYD's own data. Id. at 1381–83.

Invoking a prior opinion in an earlier review of the Order, the court explained that, in selecting an AFA rate, “Commerce is permitted to use a ‘common sense inference that the highest prior margin is the most probative evidence of current margins because, if it were not so, the importer, knowing of the rule, would have produced current information showing the margin to be less.’ ” KYD Inc. v. United States, 607 F.3d 760, 766–67 (Fed.Cir.2010) ( “ KYD I ”) (quoting Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed.Cir.1990) (“the Rhone presumption” ¹⁰)); KYD III at 1378. But the court also recognized that the Rhone presumption is both rebuttable and limited to previously examined exporters,¹¹ KYD III at 1379–81, and that “[e]ven if a party is uncooperative, Commerce is still constrained by ‘commercial reality.’ Gallant, 602 F.3d at 1323.” KYD III at 1371. Accordingly, the court again remanded to Commerce. Id. at 1384.

In its Second Remand Results, the Department reviewed KYD's submitted data and selected an AFA rate of 94.62 percent. Second Remand Results 6. That rate represented sales transactions made by two cooperative respondents reviewed in the third administrative review, but was nonetheless higher than the highest weighted-average margin of a cooperative respondent in that review. Second Remand Results 4–6.

KYD now challenges the 94.62 percent rate.

STANDARD OF REVIEW

The Department, in its remand redetermination, must comply with the terms of the court's remand order. Jinan Yipin Corp. v. United States, –––CIT ––––, 637 F.Supp.2d 1183, 1185 (2009). In addition, the court “shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i); Koyo Seiko Co. v. United States, 20 F.3d 1160, 1164 (Fed.Cir.1994).

The substantial evidence standard of review “can be translated roughly to mean ‘is [the determination] unreasonable?’ ” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.Cir.2006) (alteration in original) (quoting SSIH Equip. S.A. v. U.S. Int'l Trade Comm'n, 718 F.2d 365, 381 (Fed.Cir.1983)); Daewoo Elecs. Co. v. Int'l Union, 6 F.3d 1511, 1520 (Fed.Cir.1993) (“The specific determination we make is ‘whether the evidence and reasonable inferences from the record support’ ” Commerce's findings.). The “court reviews the record as a whole, including any evidence that ‘fairly detracts from the substantiality of the evidence,’ in determining whether substantial evidence exists.” Gallant Ocean, 602 F.3d at 1323 (Fed.Cir.2010) (quoting Micron Tech., Inc. v. United States, 117 F.3d 1386, 1393 (Fed.Cir.1997)).

DISCUSSION

Plaintiff's main argument against the Second Remand Results is that there is a more accurate method to calculate KYD's rate than Commerce's chosen methodology, and that Commerce's determination is contrary to law because KYD's data is “more than sufficient” to establish Plaintiff's rate. Pl.'s Cmts. on Second Remand Results 9, Sep. 9, 2011, ECF No. 101 (“Pl.'s Br.”).¹² KYD contends that Commerce should have selected its rate based on its own submitted data, and that any missing information could have been approximated using data from the two cooperative respondents. Pl.'s Br. 10–12.¹³

Regarding its own average price data, Plaintiff submits that the U.S. price for KYD's purchases exceeded the price paid by the two cooperative respondents by approximately a third, and that these substantial differences illustrate that the AFA rate was aberrational. Pl.'s Br. 10–11. To Plaintiff, this data indicates that Commerce's selected rate reflects a price that far exceeds the average price KYD paid and King Pac and Master Packaging received. Id. at 10. Plaintiff claims that its pricing data, while admittedly not sufficient to calculate an exact rate, is still sufficient to establish a “reasonably accurate estimate of the respondent[s'] actual rate” for KYD's imported entries. Id. at 9, 14.

Commerce disagrees, arguing that KYD's data does not take into account the differences in the products it purchased or the normal values of the merchandise King Pac or Master Packaging sold, rendering KYD's conclusions on average prices it paid versus average prices for merchandise sold by cooperative respondents “meaningless.” Second Remand Results 18.

To Commerce, because the carrier bags KYD purchased are not identical to those the cooperative respondents sold, and Commerce does not know the manufacturing costs of the merchandise KYD purchased, Commerce cannot simply make an adjustment in normal value to calculate KYD's margin. Id. at 19.¹⁴ Moreover, Commerce notes that it does not have sufficient information regarding the adjustment amounts required under 19 U.S.C. § 1677a(c), ¹⁵ nor does it have sufficient normal value information.¹⁶ Second Remand Results 4.

Plaintiff disagrees, stating that because KYD's sales were purchased on an FOB Thailand basis, international freight, marine insurance and U.S. brokerage and handling would not have been deducted from the U.S. price. Thus, Plaintiff maintains that the necessary information for these data elements was not missing. Pl.'s Br. 6.

Commerce counters that while this is correct for international freight, Commerce would still need more information such as the relative location of factories, domestic freight expenses and insurance costs, and identities of the freight companies exporters' used, rendering KYD's solutions insufficient because this...