Navigator Co., S.A. v. United States

• Decision Date: 22 November 2019
• Docket Number: Slip Op. 19-146,Consol. Court No. 18-00192
• Parties: The NAVIGATOR COMPANY, S.A., Plaintiff, Packaging Corporation of America, et al., Consolidated Plaintiffs, and Domtar Corporation, Plaintiff-Intervenor, v. UNITED STATES, Defendant, and Packaging Corporation of America, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

415 F.Supp.3d 1278

The NAVIGATOR COMPANY, S.A., Plaintiff,Packaging Corporation of America, et al., Consolidated Plaintiffs,andDomtar Corporation, Plaintiff-Intervenor,

v. UNITED STATES, Defendant,andPackaging Corporation of America, et al., Defendant-Intervenors.

Slip Op. 19-146

Consol. Court No. 18-00192

United States Court of International Trade.

November 22, 2019

Jonathan M. Zielinski, Cassidy Levy Kent (USA) LLP, of Washington, DC, argued for Plaintiff/Defendant-Intervenor The Navigator Company, S.A. With him on the brief were Thomas M. Beline and James E. Ransdell.

Geert De Prest, Schagrin Associates, of Washington, DC, argued for Plaintiff/Defendant-Intervenor Packaging Corporation of America, et al. With him on the brief were Terence P. Stewart, William A. Fennell, and Lane S. Hurewitz, Stewart and Stewart, of Washington, DC.

Stephen J. Orava and Daniel L. Schneiderman, King & Spalding LLP, of Washington, DC, for Plaintiff-Intervenor Domtar Corporation.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, Tara K. Hogan, Assistant Director, and Michael D. Snyder, Trial Attorney. Of counsel was Mykhaylo A. Gryzlov and Brendan Saslow, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION AND ORDER

Barnett, Judge:

This consolidated action is before the court on two motions for judgment on the agency record challenging the final results and amended final results of the U.S. Department of Commerce's ("Commerce" or the "agency") first administrative review of the antidumping duty order on certain uncoated paper from Portugal.¹ See Certain Uncoated Paper From Portugal , 83 Fed. Reg. 39,982 (Dep't Commerce Aug. 13, 2018) (final results of antidumping duty admin. review; 2015–2017) (" Final Results "), ECF No. 33-2, and accompanying Issues and Decision Mem., A-471-807 (Aug. 6, 2018) ("I&D Mem."), ECF No. 33-3; Certain Uncoated Paper From Portugal , 83 Fed. Reg. 52,810 (Dep't Commerce Oct. 18, 2018) ( [am.] final results of antidumping duty admin. review; 2015–2017) ("Amended Final Results "), ECF No. 33-1, and accompanying Confidential Ministerial Error Mem. (Oct. 9, 2018) ("Min. Error Mem."), ECF No. 65-1.

Consolidated Plaintiffs, Packaging Corporation of America and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC ("USW"), and Plaintiff-Intervenor Domtar Corporation (collectively, "Petitioners") challenge Commerce's decision to amend the Final Results to correct an alleged ministerial error. Specifically, Petitioners argue that in adopting the Amended Final Results , Commerce: (1) departed from its practice of using data initially rejected as unreliable when selecting the facts available with an adverse inference, (2) altered the substance of the Final Results rather than correcting a ministerial error, and (3) chose an insufficiently adverse value for Navigator's U.S. brokerage expenses. See Rule 56.2 Mot. of Consol. Pls.' Packaging Corp. of America and USW and Pl.-Int. Domtar Corp. for J. on the Agency R., ECF No. 47, and Confidential Mem. of Law in Supp. of Rule 56.2 Mot. of Consol. Pls. Packaging Corp. of America and USW and Pl.-Int. Domtar Corp. for J. on the Agency R. ("Pet'rs' Mem."), ECF No. 48.

Plaintiff, The Navigator Company, S.A. ("Navigator"), challenges the Final Results , arguing that: (1) there is no gap in the record which would allow Commerce to resort to facts available pursuant to 19 U.S.C. § 1677e(a) ; (2) Commerce failed to comply with the requirements of 19 U.S.C. § 1677m(d) by not providing Navigator with sufficient opportunity to explain any deficiencies in its response; and (3) Commerce had no basis for making an adverse inference pursuant to 19 U.S.C. § 1677e(b). The Navigator Company's Mot. for J. on the Agency R. ("Navigator's Mot."), ECF No. 50, and Mem. of Points of Law and Fact in Supp. of the Rule 56.2 Mot. for J. on the Agency R. filed by Pl., The Navigator Company ("Navigator's Mem."), ECF No. 50.

For the reasons discussed below, the court remands the Final Results and Amended Final Results for Commerce to reconsider its use of an adverse inference and selection of facts available for Navigator's allocated U.S. brokerage and handling expenses.

JURISDICTION AND STANDARD OF REVIEW

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),² 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).

BACKGROUND

On March 3, 2016, Commerce published an antidumping duty order on uncoated paper from Portugal. Certain Uncoated Paper From Australia, Brazil, Indonesia, the People's Republic of China, and Portugal , 81 Fed. Reg. 11,174 (Dep't Commerce Mar. 3, 2016) (am. final affirmative antidumping determinations and antidumping duty orders). On March 31, 2017, Navigator requested an administrative review of its imports for the period of review ("POR") of August 26, 2015 through February 28, 2017 ("POR"). Req. for Admin. Review of Antidumping Duty Order (Mar. 31, 2017), PR 1, PJA Tab 1. Commerce initiated this review on May 9, 2017. Initiation of Antidumping and Countervailing Duty Admin. Reviews , 82 Fed. Reg. 21,513 (Dep't Commerce May 9, 2017). Commerce published the preliminary results of review on April 6, 2018, preliminarily calculating a zero percent dumping margin for Navigator. Uncoated Paper From Portugal , 83 Fed. Reg. 14,844 (Dep't Commerce Apr. 6, 2018) (prelim. results of antidumping duty admin. review; 2015–2017) ("Preliminary Results ").

On August 13, 2018, Commerce published the Final Results , pursuant to which the agency found that certain U.S. brokerage and handling expenses, as reported by Navigator, were anomalous and effectively increased the net price for U.S. sales of subject merchandise during the POR. See Final Results , 83 Fed. Reg. at 39,983 ; I&D Mem. at 6–8. Commerce explained that Navigator "reported U.S. brokerage and handling in two fields, USBROKU and USBROK2U, where the amounts reported in USBROKU were actual expenses and the amounts reported in USBROK2U were allocated." I&D Mem. at 7 & n.36 (citation omitted). Regarding the allocated expenses reported in USBROK2U (or "allocated brokerage expenses"), Commerce found that Navigator "failed to cooperate to the best of its ability because it failed to provide the necessary information demonstrating that its allocation methodology ... [did] not cause inaccuracies or distortions." Id. at 8. Commerce selected the highest reported allocated brokerage expense as adverse facts available ("AFA") for Navigator's allocated brokerage and handling expenses. Id. at 8 & n.43 (citing Final Results Analysis Mem. for The Navigator Company, S.A. (Aug. 6, 2018) ("Navigator Final Analysis Mem."), CR 310, CJA Tab 8). In the Final Results , Navigator's weighted-average dumping margin increased to 37.34 percent. 83 Fed. Reg. at 39,983.

Also on August 13, 2018, Navigator timely submitted a ministerial error allegation in which it argued, in relevant part, that Commerce made a ministerial error when it selected the highest allocated brokerage expense to use as partial AFA "because it mathematically resulted in a larger brokerage expense than Commerce otherwise found to be a reliable total brokerage expense" and resulted in an unrealistically high total brokerage expense. Ministerial Error Allegation (Aug. 13, 2018) at 8, CR 320, CJA Tab 9.

On August 27, 2018, Navigator initiated this action challenging the Final Results . Summons, ECF No. 1; Compl., ECF No. 6. After consultation with interested parties, Commerce requested leave to consider Navigator's ministerial error allegations. Def.'s Consent Mot. for Leave to Consider Ministerial Error Allegation and, if Necessary, to Publish Am. Final Results or Correction Notice, ECF No. 13. The court granted such leave on September 7, 2018. Order (Sept. 7, 2018), ECF No. 14.

On October 9, 2018, Commerce issued a memorandum addressing the alleged ministerial errors. Min. Error Mem.; see also Amended Final Results , 83 Fed. Reg. 52,810. Commerce agreed that it had made a ministerial error by selecting Navigator's highest allocated brokerage expense as adverse facts available and, instead, selected the highest transaction specific U.S. brokerage expense (reported in USBROKU) to replace Navigator's allocated brokerage expense. Min. Error Mem. at 6, 7. This change reduced Navigator's weighted-average dumping margin from 37.34 to 1.75 percent. Id. at 6; Am. Final Determinations Calculations for The Navigator Company, S.A. (Oct. 9, 2018) ("Amended Calc. Mem.") at 2, CR 323, CJA Tab 12.

Commerce issued its Amended Final Results on October 18, 2018. Amended Final Results , 83 Fed. Reg. at 52,810. On October 22, 2018, Consolidated Plaintiffs initiated a separate action challenging the Amended Final Results . Packaging Corporation of America, et al. v. United States, et al. , No. 1:18-cv-00217, Summons, ECF No. 1, Compl., ECF No. 7 (CIT Oct. 22, 2018). On November 1, 2018, the court consolidated the actions under lead court number 18-00192. Docket Order, ECF No. 34.

DISCUSSION

While Navigator challenges Commerce's determination to use adverse facts available and its selection of adverse facts available in the Final Results , subsequent to the issuance of the Amended Final Results , Navigator has stated that it would waive its right to pursue its challenge if Petitioners do not prevail in their challenge to the Amended Final Results . See Navigator's Mot. at 3. In light of the contingent nature of Navigator's challenge, ...