N.M. Garlic Growers Coal. v. United States

• Decision Date: 26 November 2018
• Docket Number: Slip Op. 18-162,Consol. Court No. 17-00146
• Citation: 352 F.Supp.3d 1281
• Parties: NEW MEXICO GARLIC GROWERS COALITION and El Bosque Farm, Plaintiffs, Qingdao Tiantaixing Food Co., Ltd., Consolidated Plaintiff, and Shandong Jinxiang Zhengyang Import & Export Co., Ltd. and Jining Alpha Food Co., Ltd., Plaintiff-Intervenors, v. UNITED STATES, Defendant, and Zhengzhou Harmoni Spice Co., Ltd., Harmoni International Spice, Inc., Fresh Garlic Producers Association, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

352 F.Supp.3d 1281

NEW MEXICO GARLIC GROWERS COALITION and El Bosque Farm, Plaintiffs,Qingdao Tiantaixing Food Co., Ltd., Consolidated Plaintiff,andShandong Jinxiang Zhengyang Import & Export Co., Ltd. and Jining Alpha Food Co., Ltd., Plaintiff-Intervenors,

v. UNITED STATES, Defendant,andZhengzhou Harmoni Spice Co., Ltd., Harmoni International Spice, Inc., Fresh Garlic Producers Association, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant-Intervenors.

Slip Op. 18-162

Consol. Court No. 17-00146

United States Court of International Trade.

November 26, 2018

Robert T. Hume, Hume & Associates LLC, of Taos, NM, argued for Plaintiffs New Mexico Garlic Growers Coalition and El Bosque Farm.

Yingchao Xiao, Lee & Xiao, of San Marino, CA, argued for Consolidated Plaintiff Qingdao Tiantaixing Foods Co., Ltd.

John J. Kenkel, deKieffer & Horgan, PLLC, of Washington, DC, argued for Plaintiff-Intervenors Shandong Jinxiang Zhengyang Import & Export Co., Ltd. and Jining Alpha Food Co., Ltd. With him on the brief were Gregory S. Menegaz, J. Kevin Horgan, and Alexandra H. Salzman.

Meen Geu Oh, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant United States. With him on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Emma T. Hunter, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Ned H. Marshak, Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP, of New York, NY, argued for Defendant-Intervenors Zhengzhou Harmoni Spice Co., Ltd. and Harmoni International Spice Inc. With him on the brief were Bruce M. Mitchell, Alan G. Lebowitz, Jordan C. Kahn, and Jamie L. Maguire.

Michael J. Coursey, Kelley Drye & Warren LLP, of Washington, DC, argued for Defendant-Intervenor Fresh Garlic Producers Association. With him on the brief were John M. Herrmann and Joshua R. Morey.

OPINION

Barnett, Judge:

In this consolidated action, Plaintiffs New Mexico Garlic Growers Coalition and El Bosque Farms (collectively "NMGGC"), Consolidated Plaintiff, Qingdao Tiantaixing Foods Co., Ltd. ("QTF"), and Plaintiff-Intervenors, Shandong Jinxiang Zhengyang Import & Export Co., Ltd. ("Zhengyang") and Jining Alpha Food Co., Ltd. ("Alpha") (together with Zhengyang, "separate rate respondents"), challenge the U.S. Department of Commerce's ("Commerce" or the "agency") final results and partial rescission of the 21st administrative review ("AR 21") of the antidumping duty order on fresh garlic from the People's Republic of China ("PRC" or "China"). See Fresh Garlic from the People's Republic of China , 82 Fed. Reg. 27,230 (Dep't Commerce June 14, 2017) (final results and partial rescission of the 21st antidumping duty admin. review; 2014-2015) (" Final Results "), ECF No. 23-5, and accompanying Issues and Decision Mem., A-570-831 (June 7, 2017) ("I & D Mem."), ECF No. 23-6.¹ For the reasons discussed below, the Final Results are sustained.

BACKGROUND

In 1994, Commerce issued an order imposing antidumping duties on fresh garlic from the PRC. See Antidumping Duty Order: Fresh Garlic from the People's Republic of China , 59 Fed. Reg. 59,209 (Dep't of Commerce Nov. 16, 1994) (AD Order ). Commerce calculated a weighted-average duty margin for the PRC-wide entity of 376.67 percent. AD Order , 59 Fed. Reg. at 59,210.

In November 2015, Commerce published a notice informing interested parties of the opportunity to request an administrative review of the AD Order for the period of review ("POR") November 1, 2014, through October 31, 2015. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation ; Opportunity to Req. Admin. Review , 80 Fed. Reg 67,706, 67,707 (Dep't Commerce Nov. 3, 2015). In response, Commerce received requests from multiple entities; three of those entities, Zhengzhou Harmoni Spice Co., Ltd. ("Harmoni"), Fresh Garlic Producers Association and its individual members (collectively, "FGPA"),² and NMGGC, requested a review of Harmoni. See Req. for Admin. Review of the Antidumping Duty Order on Fresh Garlic from the PRC (Nov. 30, 2015), PR 6, CJA Vol. I, PJA Vol. I; Pet'rs' Review Req.; Req. for Antidumping Review of Zhenghou [sic] Harmoni Spice Co., Ltd. and Affiliates (Nov. 28, 2015) ("NMGGC Review Req."), PR 4, CJA Vol. I, PJA Vol. I; Respondent Selection Mem. (March 1, 2016) ("Selection Mem.") at 2, CR 15, PR 47, CJA Vol. I, PJA Vol. I (noting that the agency received requests for review of 44 Chinese exporters).

Commerce initiated AR 21 on January 7, 2016. Initiation of Antidumping and Countervailing Duty Admin. Reviews , 81 Fed. Reg. 736 (Dep't Commerce Jan. 7, 2016) ("Initiation Notice "). Due to the large number of producers and exporters involved, Commerce selected Harmoni and QTF, the two producers and exporters "with the largest volume of imports of subject merchandise during the POR," as mandatory respondents.³ Selection Mem. at 4. After Commerce initiated AR 21 but before it published its preliminary results, FGPA and Harmoni withdrew their review requests with respect to Harmoni. Harmoni Withdrawal of Review Req. (Mar. 4, 2016), PR 49, CJA Vol. I PJA Vol. I; Pet'rs' Withdrawal of Certain Reqs. for Admin. Review (Mar. 11, 2016), PR 71, CJA Vol. I, PJA Vol. I.

Commerce published its preliminary results on December 9, 2016. Fresh Garlic from the People's Republic of China , 81 Fed. Reg. 89,050 (Dep't Commerce Dec. 9, 2016) (prelim. results and partial rescission of the 21st antidumping duty admin. review; 2014-2015), PR 401, CJA Vol. IV, PJA Vol. IV, and accompanying Decision Mem., A-570-831 (Dec. 5, 2016) ("Prelim. Mem."), PR 389, CJA Vol. III, PJA Vol. III. Commerce preliminarily determined that QTF timely submitted a separate rate certification and demonstrated its eligibility for a separate rate. Prelim. Mem. at 2 & n.9 (citation omitted); id. at 13. Commerce found, however, that QTF failed to cooperate to the best of its ability and significantly impeded the proceeding because it provided false or incomplete information regarding its affiliations. Id. at 10-11, 17. The agency used facts available with an adverse inference (referred to as "adverse facts available" or "AFA") to find that QTF and four other companies should be collapsed into a single entity, termed the "QTF-entity." Id. at 17. Using AFA, Commerce assigned the QTF-entity a rate of $4.71 per kilogram, which was the highest margin on the record of this proceeding.⁴ Id.

Commerce likewise found that Harmoni withheld information requested by the agency, failed to provide information within the established deadlines, and significantly impeded the proceeding. Id. at 16. Commerce determined that Harmoni was not eligible for a separate rate, and considered Harmoni part of the PRC-wide entity. Id. at 16-17.

Commerce issued its final results in June 2017. See Final Results ; I & D Mem. Commerce continued to find that QTF provided false or incomplete information regarding its affiliations and failed to act to the best of its ability. I & D Mem. at 31. Commerce found that QTF was affiliated with two additional entities beyond the four addressed in the preliminary results, including Hebei Golden Bird Trading Co., Ltd. ("Golden Bird"). Id. Commerce determined that some of the six companies with which QTF was affiliated were part of the PRC-wide entity and, therefore, denied the QTF-entity a separate rate, finding that it was part of the PRC-wide entity and subject to the China-wide rate of $4.71 per kilogram. Id. at 30-36, 37. Commerce rescinded the review of Harmoni because it found that NMGGC's review request—the only remaining review request with respect to Harmoni—"was illegitimate ab initio ."⁵ Id. at 18.

Before the court, QTF and the separate rate respondents challenge Commerce's decisions to collapse QTF with six other entities, deny it a separate rate, and apply to QTF the PRC-wide rate. See generally Consol. Pl. Mem. in Supp. of Rule 56.2 Mot. for J. Upon the Agency R. ("QTF Br."), ECF No. 38; Pl.'s Reply Br. ("QTF Reply"), ECF No. 64; Pl.-Int. Shandong Jinxiang Zhengyang Import & Export Co., Ltd. et al.'s Rule 56.2 Mot. for J. Upon the Agency R., ECF No. 36, and Mem. of Law in Supp. of Mot. for J. Upon the Agency R. ("Z & A Br."), ECF No. 36-1. NMGGC challenges Commerce's decision to rescind its review of Harmoni. See generally Mot. of Pls. New Mexico Garlic Growers Coalition and El Bosque Farm for J. on the Agency R. and Revised Mem. in Supp. of the Mot. of Pls. New Mexico Garlic Growers Coalition and El Bosque Farm for J. on the Agency R. ("NMGGC Br."), ECF No. 42. The court heard oral argument on September 25, 2018. See Docket Entry, ECF No. 86; Oral Arg. Tr., ECF No. 89.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930,⁶ as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), and 28 U.S.C. § 1581(c). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. QTF's and the Separate Rate Respondents' Motions

A. Relevant Legal Framework

1. Separate Rate Status in Non-Market Economy Proceedings

In antidumping duty proceedings involving a nonmarket economy country, such as China, "Commerce presumes all respondents are government-controlled and therefore subject to a single country-wide rate." Ad Hoc Shrimp Trade Action Comm. v. United States , 802 F.3d 1339, 1353 (Fed. Cir. 2015). A respondent may rebut that presumption and obtain a "separate" antidumping duty rate by demonstrating the absence of both de jure (in law) and de facto (in fact) government control over its export activities. See id. at 1353.

An entity wishing to secure a separate rate must submit to the agency a separate rate...