Nan Ya Plastics Corp. v. United States

Decision Date14 August 2014
Docket NumberCourt No. 11–00535.,Slip Op. 14–94.
Citation6 F.Supp.3d 1362
PartiesNAN YA PLASTICS CORPORATION, LTD., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

OPINION TEXT STARTS HERE

Peter J. Koenig, Squire Sanders (US) LLP, of Washington, DC, for Plaintiff Nan Ya Plastics Corporation, Ltd.

David F. D'Alessandris, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the briefs were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director. Of counsel on the briefs was George Kivork, U.S. Department of Commerce, Office of the Chief Counsel for Import Administration, of Washington, DC.

Jeffrey I. Kessler, David M. Horn, Patrick J. McLain, and Ronald I. Meltzer, Wilmer, Cutler, Pickering, Hale and Dorr LLP, of Washington, DC, for DefendantIntervenors Mitsubishi Polyester Film, Inc. and SKC, Inc.

OPINION

GORDON, Judge:

This action involves an administrative review conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty order covering polyethylene terephthalate film, sheet, and strip from Taiwan. See Polyethylene Terephthalate Film, Sheet, and Strip from Taiwan, 76 Fed.Reg. 76,941 (Dep't of Commerce Dec. 9, 2011) (final results admin. review) (“Final Results ”); see also Issues and Decision Memorandum, A–583–837 (Dep't of Commerce Dec. 5, 2011), available at http:// enforcement. trade. gov/ frn/ summary/ taiwan/ 2011– 31695– 1. pdf (last visited this date) (“ Decision Memorandum ”). Before the court are the Final Results of Redetermination, ECF No. 66 (“ Remand Results ”), filed by Commerce pursuant to NanYa Plastics Corp. v. United States, 37 CIT ––––, 906 F.Supp.2d 1348 (2013) (“ Nan Ya I ”). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), 1 and 28 U.S.C. § 1581(c) (2012).

Plaintiff Nan Ya Plastics Corporation, Ltd. (Nan Ya) challenges Commerce's continued assignment of a total adverse facts available (“AFA”) rate of 74.34%. SeeNan Ya Comments on Remand Results 1, ECF No. 84 (“Pl.'s Br.”). For the reasons set forth below, the court sustains the Remand Results.

I. Standard of Review

For administrative reviews of antidumping duty orders, the court sustains Commerce's “determinations, findings, or conclusions” unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed.Cir.2006). Substantial evidence has been described as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Dupont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed.Cir.2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence has also been described as “something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.” Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). Fundamentally, though, “substantial evidence” is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d ed. 2014). Therefore, when addressing a substantial evidence issue raised by a party, the court analyzes whether the challenged agency action “was reasonable given the circumstances presented by the whole record.” Edward D. Re, Bernard J. Babb, and SusanM. Koplin, 8 West's Fed. Forms, National Courts § 13342 (2d ed. 2014).

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), governs judicial review of Commerce's interpretation of the antidumping statute. SeeUnited States v. Eurodif S.A., 555 U.S. 305, 316, 129 S.Ct. 878, 172 L.Ed.2d 679 (2009) (Commerce's “interpretation governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.”).

II. Background

As a consequence of Nan Ya's failure to cooperate during the administrative review, Commerce preliminarily assigned Nan Ya a total AFA rate of 99.31%, which it derived from two of Nan Ya's transaction-specific margins from the prior administrative review. See Polyethylene Terephthalate Film, Sheet, and Strip from Taiwan, 76 Fed.Reg. 47,540, 47,545 (Dep't of Commerce Aug. 5, 2011) (preliminary results); Decision Memorandum at 5. Nan Ya argued in its administrative case brief that Commerce should have instead used information obtained during the current administrative review, specifically, the transaction-specific data of cooperating mandatory respondent Shinkong Materials Technology Co., Ltd. (“Shinkong”). Case Br. of Nan Ya Plastics Corporation, Ltd., 7 (Dep't of Commerce Oct. 4, 2011), PD 23.2 Commerce agreed and in the Final Results selected Shinkong's highest transaction-specific margin, 74.34%, as Nan Ya's total AFA rate. Commerce reasoned “this rate is representative of Nan Ya's current business practice” because “the data from the most recent review in which Nan Ya participated show ... numerous [transaction-specific] margins for Nan Ya far above 74.34 percent.” Assignment of the Adverse Facts Available Rate for Nan Ya Plastics Corporation, Ltd. (Nan Ya), 3 (Dep't of Commerce Dec. 5, 2011), CD 27 (“AFA Assignment Memorandum”).

Nan Ya then commenced this action challenging the 74.34% total AFA rate as “an unlawful aberrant outlier” that did not reflect its “commercial reality albeit with some built in increase to induce compliance.” Nan Ya I, 37 CIT at ––––, 906 F.Supp.2d at 1351; see Nan Ya Plastics Corporation Rule 56.2 Mot. for J. on the Agency R. 3, ECF No. 3 (“Pl.'s 56.2 Br.). Among its contentions Nan Ya proffered what appeared to be several compelling statistical arguments in support of its position. See Nan Ya I, 37 CIT at ––––, 906 F.Supp.2d at 1353–55. However, because Commerce changed Nan Ya's AFA rate between the preliminary and final results, Nan Ya's first opportunity to present these arguments was in its opening brief before the court. The court therefore remanded the action for Commerce to address Nan Ya's arguments in the first instance. Id. at ––––, 906 F.Supp.2d at 1354–55.

The court also remanded to Commerce for further explanation the issue of the applicability of corroboration. Id. Although Commerce appeared, consistent with its practice, to corroborate the selected rate with Nan Ya's own transaction-specific data from a prior review, see, e.g., PAM, S.p.A. v. United States, 582 F.3d 1336, 1340 (Fed.Cir.2009); Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1339–40 (Fed.Cir.2002); Fujian Lianfu Forestry Co. v. United States, 34 CIT ––––, ––––, 700 F.Supp.2d 1361, 1363 (2010), Defendant claimed that Commerce technically was not required to do so under 19 U.S.C. § 1677e(c) because Commerce selected the AFA rate from data obtained during the current administrative review. Def.'s Resp. to Pl.'s R. 56.2 Mot. 11, ECF No. 48. This, in turn, raised an issue about the applicability of the de Cecco standard the courts use to evaluate the reasonableness of Commerce's total AFA rates, a standard that emanates from the statute's corroboration requirement. Nan Ya I, 37 CIT at ––––, 906 F.Supp.2d at 1355 (citing F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027, 1032 (Fed.Cir.2000) (“ de Cecco ”)).

On remand, Commerce assigned the same total AFA rate of 74.34% to Nan Ya. Remand Results at 2. Commerce also elaborated that the need to corroborate under 19 U.S.C. § 1677e(c) only applies to “secondary information” and not “information obtained in the course of the ... review,” like Shinkong's data. Id. at 5. Commerce noted that although the de Cecco standard does not apply, Commerce's selection of an AFA rate must nevertheless still be supported by substantial evidence. Id. at 10–13. Commerce also addressed and rejected each of Nan Ya's arguments contesting the reasonableness of the AFA rate.

In its comments on the Remand Results, Nan Ya again challenges Commerce's AFA selection as unreasonable (unsupported by substantial evidence). Pl.'s Br. at 2–3.

III. Discussion

In a total AFA scenario Commerce typically cannot calculate an antidumping rate for an uncooperative respondent because the information required for such a calculation (in this case the respondent's sales and cost information for the subject merchandise during the period of review) has not been provided. As a substitute, Commerce relies on other sources of information (the petition, the final determination from the investigation, prior administrative reviews, or any other information placed on the record), 19 U.S.C. § 1677e(b), to select a proxy that should be a “reasonably accurate estimate of the respondent's actual rate, albeit with some built-in increase intended as a deterrent to noncompliance.” de Cecco, 216 F.3d at 1032.

When selecting an appropriate total AFA proxy, “Commerce must balance the statutory objectives of finding an accurate dumping margin and inducing compliance.” Timken Co. v. United States, 354 F.3d 1334, 1345 (Fed.Cir.2004). The proxy's purpose “is to provide respondents with an incentive to cooperate, not to impose punitive, aberrational, or uncorroborated margins.” de Cecco, 216 F.3d at 1032. Although a higher AFA rate creates a stronger incentive to cooperate, “Commerce may not select unreasonably...

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