Maclean-Fogg Co. v. United States

Decision Date11 August 2015
Docket NumberSlip Op. 15–85.,Court No. 11–00209.1
Citation100 F.Supp.3d 1349
PartiesMACLEAN–FOGG CO., et al., Plaintiffs, v. UNITED STATES, Defendant, and Aluminum Extrusions Fair Trade Committee, Defendant–Intervenor.
CourtU.S. Court of International Trade

Thomas M. Keating, Hoes Keating & Pilon, of Chicago, IL, for Plaintiffs MacLean–Fogg Co. and Fiskars Brands, Inc.

Craig A. Lewis and T. Clark Weymouth, Hogan Lovells U.S. LLP, of Washington, DC, for Plaintiff Evergreen Solar, Inc.

Mark B. Lehnardt, Lehnardt & Lehnardt LLC, of Liberty, MO, for Plaintiffs Eagle Metal Distributors, Inc. and Ningbo Yili Import & Export Co., Ltd.

Tara K. Hogan, Senior Trial Counsel, and Douglas Edelschick, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the Defendant. Also on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.

Alan H. Price and Robert DeFrancesco, Wiley Rein LLP, of Washington, DC, for the Aluminum Extrusions Fair Trade Committee.

OPINION and ORDER

POGUE, Senior Judge:

This consolidated action arises from the U.S. Department of Commerce's (“Commerce”) countervailing duty (“CVD”) investigation of aluminum extrusions from the People's Republic of China (“China”).2 Before the court are the results of Commerce's redetermination on remand of the “all-others” CVD rate, pursuant to the Court of Appeals' decision in MacLean–Fogg Co. v. United States, 753 F.3d 1237, 1246 (Fed.Cir.2014) (“MacLean–Fogg V ”).3

The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012)4 and 28 U.S.C. § 1581(c) (2012).

As explained below, because Commerce's decision to rely on simple averaging when calculating the “all-others” rate in this case was an unreasonable judgment in the application of 19 U.S.C. § 1671d(c)(5)(A)(i), this determination is remanded for reconsideration.

BACKGROUND

Where, as here, a countervailing duty investigation involves a large number of exporters and/or producers as potential respondents, Commerce is authorized to select a sample of these exporters and producers for individual examination (the “mandatory” respondents).5 In addition, the remaining exporters and producers may request an individualized examination as “voluntary” respondents.6 Companies not selected as mandatory or voluntary respondents receive a CVD rate that is calculated for “all-other” companies (the “all-others” rate),7 which must equal the weighted average of all “individually investigated” companies' rates,8 unless all such rates are zero/ de minimis or entirely based on “facts otherwise available,” rather than the respondents' own submissions.9 Consequently, Commerce generally constructs the all-others rates by using the weighted average of the mandatory respondents' rates.10

Following this statutory scheme, in the CVD investigation at issue here, Commerce selected the three companies exporting the largest volume of subject imports during the period of investigation as the mandatory respondents.11 However, none of these three companies responded to Commerce's requests for information.12 Commerce therefore found that the mandatory respondents “withheld requested information and significantly impeded [the] proceeding,”13 and failed to act to the best of their abilities to cooperate in the investigation.14 Accordingly Commerce established CVD rates for the mandatory respondents based entirely on adverse facts available (“AFA”).15 Meanwhile, two companies had requested and were granted individualized examinations as voluntary respondents, each ultimately receiving a non-zero, non-de minimis, non-AFA CVD rate.16

With regard to the all-others rate, agency regulations in force at the time of the investigation prohibited Commerce from including the voluntary respondents' CVD rates in the all-others rate calculation.17 As this Court explained when upholding this regulation in Maclean–Fogg I , Commerce's basis for excluding the voluntary respondents' rates from the all-others rate calculation was the concern that voluntary respondents are unrepresentative of the remaining companies (particularly where, as here, the three largest exporters/producers did not respond to Commerce's inquiries at all).18 The agency considered the voluntary respondents to be unrepresentative because, unlike the mandatory or the all-other respondents, the voluntary respondents are those that willingly submit their sales data of their own accord, presumably because their commercial practices are such that they have good reason to believe that their CVD rates will be lower than those set for the mandatory respondents (regardless of whether those mandatory respondents are cooperative or not), such that including the rates established for this self-selected group threatens distortion of the weighted-average of the more representative rates.19 But the Court of Appeals reversed this decision,20 invalidated 19 C.F.R. § 351.204(d)(3), and ordered this court to remand Commerce's all-others rate calculation, requiring the agency to include the two voluntary respondents' rates when determining the all-others rate in this case “under the general rule, [19 U.S.C.] § 1671d(c)(5)(A)(i).”21

On remand, Commerce applied 19 U.S.C. § 1671d(c)(5)(A)(i), as interpreted by MacLean–Fogg V , excluding the three mandatory respondents' AFA-based rates from the all-others calculation, but including the two non-zero, non-de minimis, non-AFA based voluntary respondents' rates.22 Considering the two voluntary respondents' rates, however, Commerce found that it could not weight-average these rates without impermissibly revealing the two companies' business proprietary information (“BPI”) to each other.23 Normally, in such situations Commerce “would calculate a weighted-average countervailing duty rate using the publicly available, ranged values of the [individually examined] respondents' exports of subject merchandise to the United States, compare both this weighted-average rate and a simple average of [these] respondents' countervailing duty rates to the actual weighted-average rate (calculated using the proprietary export values) and assign to All Others the amount closer to the actual weighted-average countervailable subsidy rate.”24 But in this case, although agency regulations require that all BPI submissions, including numerical data, be accompanied by publicly available summaries,25 the two voluntary respondents did not submit public, “ranged” versions of their BPI.26 During its investigation, Commerce chose not to enforce this requirement because the agency's regulations then expressly prohibited using the voluntary respondents' countervailable subsidy rates to calculate the all-others rate.27 Commerce therefore “did not find that it was necessary during the underlying investigation to request the publicly-ranged or indexed numerical data from the voluntary respondents.”28

Thereafter, however, as noted above, the Court of Appeals for the Federal Circuit held that countervailable subsidy rates calculated for voluntary respondents in CVD investigations unambiguously fall within the meaning of “countervailable subsidy rates established for exporters and producers individually investigated,” as used in 19 U.S.C. § 1671d(c)(5)(A)(i), and therefore that such rates must be used in the calculation of an all-others rate, so long as they are not zero/de minimis or based entirely on facts otherwise available or AFA.29 On remand, finding that “the publicly ranged sales data that could be used to calculate a weighted average all others rate based on publicly available data [were] not on the administrative record,” Commerce therefore “based the revised all others rate on a simple average of the two voluntary respondents' calculated net subsidy rates.”30

In commenting on the remand results below, the Aluminum Extrusions Fair Trade Committee (“AEFTC”)—a petitioner in the underlying countervailing duty investigation and an intervenor in this action31 —argued, inter alia, that Commerce should have calculated the all-others rate using a weighted average of the two voluntary respondents' rates, contending that 19 C.F.R. § 351.304(c)(1) requires parties to submit publicly ranged versions of their BPI data, and that Commerce should therefore “reopen the record to obtain the publicly ranged data that is necessary for [Commerce] to calculate a weighted average all others rate.”32 Commerce, however, declined to reopen the record.33 Rather, Commerce found that the voluntary respondents' publicly ranged sales data was neither “necessary [nor] warranted” because “the use of a simple average of the two voluntary respondents' net subsidy rates to calculate the all others rate is consistent with [Commerce's] practice in cases in which the publicly available ranged sales data are not on the record.”34 AEFTC now challenges this determination.35 Alternatively, AEFTC also argues that Commerce should have established a single subsidy rate for both voluntary respondents, because the companies are affiliated.36

STANDARD OF REVIEW

The court will sustain Commerce's countervailing duty determinations on remand if they are in accordance with the remand order, are supported by substantial evidence, and are otherwise in accordance with law.37 Where the statute and regulations leave the agency with a measure of discretion, the court reviews such decisions for abuse of discretion.38 “An abuse of discretion occurs where the decision is based on an erroneous interpretation of the law, on factual findings that are not supported by substantial evidence, or represent an unreasonable judgment in weighing relevant factors.”39 Moreover, Commerce's discretion “is bounded at the outer limits...

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