Longkou Haimeng Machinery Co., Ltd. v. U.S.

• Decision Date: 21 October 2008
• Docket Number: Slip Op. 08-114. Court No. 07-00321.
• Parties: LONGKOU HAIMENG MACHINERY CO., LTD., Laizhou Auto Brake Equipment Company, Laizhou Hongda Auto Replacement Parts Co., Ltd., Laizhou Luqi Machinery Co., Ltd., Qingdao Gren (Group) Co., and Longkou TLC Machinery Co., Ltd., Plaintiffs, v. UNITED STATES of America, Defendant, and Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, Defendant-Intervenor.
• Court: U.S. Court of International Trade

581 F.Supp.2d 1344

LONGKOU HAIMENG MACHINERY CO., LTD., Laizhou Auto Brake Equipment Company, Laizhou Hongda Auto Replacement Parts Co., Ltd., Laizhou Luqi Machinery Co., Ltd., Qingdao Gren (Group) Co., and Longkou TLC Machinery Co., Ltd., Plaintiffs, v. UNITED STATES of America, Defendant, and Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, Defendant-Intervenor.

Slip Op. 08-114. Court No. 07-00321.

United States Court of International Trade.

October 21, 2008.

Trade Pacific PLLC, (Robert G. Gosselink; Jonathan Michael Freed) for Longkou Haimeng Machinery Co., Ltd.; Laizhou Auto Brake Equipment Company; Laizhou Hongda Auto Replacement Parts Co., Ltd.; Laizhou Luqi Machinery Co., Ltd.; and Qingdao Gren (Group) Co., Plaintiffs.

Venable LLP, (Lindsay Beardsworth Meyer) for Longkou TLC Machinery Co. Ltd., Plaintiff.

Gregory G. Katsas, Assistant Attorney General, Commercial Litigation Branch Civil Division, United States Department of Justice; Jeanne Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Patricia M. McCarthy; Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Courtney Sheehan, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice; Melanie A. Frank, Office of Chief Counsel for Import Administration, United States Department of Commerce; Stephen Carl Tosini, Commercial Litigation Branch, Civil Division, United States Department of Justice, for the United States, Defendant.

Porter, Wright, Morris & Arthur, LLP, (Renata Brandao Vasconcellos) for The Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers, Defendant-Intervenor.

Before: Nicholas Tsoucalas, Senior Judge.

OPINION

TSOUCALAS, Senior Judge.

This matter is before the Court on a motion for judgment upon the agency record brought by the Plaintiffs pursuant to USCIT Rule 56.2.

Plaintiffs challenge numerous aspects of the U.S. Department of Commerce's ("Commerce's") final determination with respect to the ninth administrative review of the antidumping order in Brake Rotors From the People's Republic of China: Final Results of Antidumping Duty Administrative and New Shipper Reviews and Partial Rescission of the 2005-2006 Administrative Review, 72 Fed.Reg. 42,386 (Aug. 2, 2007) Public Record Doc. No. 209 ("Final Results").¹ Plaintiffs contend that certain aspects of Commerce's determination is contrary to law, constitutes an abuse of discretion and is not supported by substantial evidence on the record. See Pls.' R. 56.2 Mot. J. Upon Agency Rec. ("Pls.' Brief."). For the reasons set forth below, the Court sustains the Final Results in part, and remands it in part.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a)(2) and 28 U.S.C. § 1581(c).

STANDARD OF REVIEW

When reviewing the final results in antidumping administrative reviews "[t]he 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). "Substantial evidence is more than a mere scintilla." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). "Substantial evidence is `such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) (quoting Consol. Edison Co., 305 U.S. at 229, 59 S.Ct. 206). In determining the existence of substantial evidence, a reviewing Court must consider "the record as a whole, including evidence that supports as well as evidence that `fairly detracts from the substantiality of the evidence.'" Huaiyin, 322 F.3d at 1374 (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984)). The possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence. See Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted).

BACKGROUND

Longkou Haimeng Machinery Co., Ltd. ("Haimeng"); Laizhou Auto Brake Equipment Company ("LABEC"); Laizhou Hongda Auto Replacement Parts Co., Ltd. ("Hongda"); Laizhou Luqi Machinery Co., Ltd. ("Luqi"); Qingdao Gren (Group) Co. ("Gren") (collectively "Haimeng Plaintiffs") and plaintiff Longkou TLC Machinery Co., Ltd. ("TLC") contest aspects of Commerce's final determination. Plaintiffs are producers and exporters of brake rotors subject to the antidumping duty order on Brake Rotors from the People's Republic of China ("subject merchandise") during the ninth administrative review. See Final Results, 72 Fed.Reg. 42,386.

On April 3, 2006, Commerce published a notice of opportunity to request an administrative review of the antidumping duty order of brake rotors from the People's Republic of China ("PRC") for the period April 1, 2005 through March 31, 2006 ("the period of review" or "POR"). See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 71 Fed.Reg. 16,549 (Apr. 3, 2006). In conformance with agency regulations, Commerce received timely requests for an administrative review of the antidumping duty order in question. On May 31, 2006, Commerce initiated the ninth administrative review of brake rotors from China for twenty-seven individually named firms. See Notice of Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 71 Fed.Reg. 30,864 (May 31, 2006) (PR 5).

On June 16, 2006, Commerce notified all interested parties that "[d]ue to the large number of requests for administrative review and the Department's experience regarding the resulting administrative burden to review each company for which a request has been made, the Department is considering exercising its authority to select respondents," and requested that each company subject to this administrative review submit certain company-specific information. Letter to All Interested Parties (June 16, 2006), (PR 10). In response, Commerce received timely submissions of the requested quantity and value data for all of the plaintiffs involved. See Letters from Trade Pacific PLLC, (July 6, 2006), (CR 8, 9, 10, 11, 16); Letter from Venable LLP,(June 30, 2006), (PR 19).

Of the twenty seven companies for which a review was originally initiated, Commerce received seven requests for rescission of review based on claims that the companies did not have shipments of subject merchandise during the POR. See Brake Rotors From the People's Republic of China: Preliminary Results of the 2005-2006 Administrative and New Shipper Reviews and Partial Rescission of the 2005-2006 Administrative Review, 72 Fed.Reg. 7,405 (Feb. 15, 2007) (PR 182) ("Preliminary Results"). In addition, Commerce determined that certain other separately listed companies were to be considered the same entity for purposes of this administrative review.² See Antidumping Duty Administrative Review of Brake Rotors from the People's Republic of China: Selection of Respondents, (Aug. 18, 2006) (PR 51) ("Respondent Selection Memorandum").

Two of the remaining seventeen companies, Qindao Rotec Auto Parts Co., Ltd. ("Rotec") and Xiangfen Hengtai Brake System Co. Ltd. ("Hengtai"), did not respond to Commerce's request for quantity and value information. Because these companies did not submit any information to establish their eligibility for a separate rate, Commerce determined that they did not qualify for a separate rate analysis, and were considered to be part of the PRC-wide entity. Thus, both Rotec and Hengtai were assigned the China country-wide rate.³

On August 18, 2006, based on a review of the quantity and value data for the remaining fifteen companies, Commerce issued its Respondent Selection Memorandum. Relying on section 777A(c)(2) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677f-1(c)(2), Commerce decided to exercise its statutory authority to limit its examination of respondents in calculating individual dumping margins. See Respondent Selection Memorandum, (Aug. 18, 2006) (PR 51). Commerce based its decision to restrict the respondent pool on the ground that it lacked the administrative resources to effectively examine all of the exporters-producers involved. See id. at 3.

Commerce then informed the interested parties that, pursuant to 19 U.S.C. § 1677f-1(c)(2)(B), it would employ a sampling method based on those respondents accounting for the largest volume of subject merchandise exported or produced. See id. at 4. Consequently, three companies cumulatively accounting for more than fifty two percent of the exports of brake rotors from the PRC were chosen as mandatory respondents.⁴ In addition, Commerce indicated that in the event "a mandatory respondent fails to participate, and companies that wish to be treated as voluntary respondents have submitted timely responses, we may at our discretion ... select a voluntary respondent for individual review." Id. at 4. Commerce further explained that to be selected as a voluntary respondent: (1) the respondent must have met filing deadlines for information requested (and otherwise comply with all other Department deadlines); (2) if there is more than one potential voluntary respondent, Commerce would select the respondent based on the order of each company's submission of voluntary respondent review; and (3) once selected, a voluntary respondent would be subject to the same requirements as mandatory respondents including the use of facts available under 19 U.S.C. § 1677e. See id. at 4-5.

On October 2 and October 3, 2006, respectively, both Hongda and Luqi submitted voluntary response questionnaires to Commerce, and requested...