Ningbo Dafa Chemical Fiber Co. v. U.S.
| Decision Date | 02 September 2008 |
| Docket Number | Slip Op. 08-89.,Court No. 07-00236. |
| Parties | NINGBO DAFA CHEMICAL FIBER CO., LTD.; Consolidated Fibers, Inc.; Fibertex Corporation; and Stein Fibers, Ltd., Plaintiffs, v. UNITED STATES of America, Defendant, and Dak Americas LLC; Nan Ya Plastics Corp. America; and Wellman Inc., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Gregory G. Katsas, Assistant Attorney General, Commercial Litigation Branch, Civil Division, United States Department of Justice, Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Reginald T. Blades, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Stephen C. Tosini, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice; Of Counsel: Ahran Kang, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, for the United States, Defendant.
Kelley Drye Collier Shannon, Washington, DC (Paul C. Rosenthal and David C. Smith, Jr.) for DAK Americas LLC, Nan Ya Plastics Corp. America, and Wellman, Inc., Defendant-Intervenors.
This matter is before the Court on a motion for judgment upon the agency record brought by plaintiffs Ningbo Dafa Chemical Fiber Co., Ltd.; Consolidated Fibers, Inc.; Fibertex Corporation; and Stein Fibers, Ltd. ("Plaintiffs" or "Ningbo") pursuant to USCIT Rule 56.2. Plaintiffs challenge certain aspects of the final determination of the U.S. Department of Commerce ("Commerce" or "Defendant") in the antidumping duty investigation of polyester staple fiber ("PSF") from the People's Republic of China. Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances: Certain Polyester Staple Fiber from the People's Republic of China, 72 Fed.Reg. 19,690 (Apr. 19, 2007) ("Final Determination"). Domestic industry companies DAK Americas LLC, Nan Ya Plastics Corp. America, and Wellman, Inc. join as Defendant-Intervenors.
For the reasons set forth below, the United States Department of Commerce's determination is affirmed.
The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a (a) (2000) and 28 U.S.C. § 1581(c) (2000).
When reviewing the final results in antidumping administrative reviews, the Court will uphold Commerce's determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i) (2000). Substantial evidence is Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)).
Substantial evidence "is 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. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted).
A petition seeking initiation of an antidumping duty' investigation of Certain Polyester Staple Fiber from the People's Republic of China was filed with Commerce on June 23, 2006. Public Record ("PR") Doc. No. 1. Commerce published a Notice of Initiation in the Federal Register on July 20, 2006. PR Doc. No. 12.
Ningbo Dafa, a privately held company organized under the laws of China, recycles Polyethylene terephthalate ("PET") bottle flake1 into white, green and browncolored PSF for sale domestically and for export throughout the world.2 See Pls.' Rule 56.2 Mem. in Supp. of Mot. for J. upon the Agency R. ( ) at 2; Def.'s Resp. to Pls.' Mot. for J. upon the Administrative R. ("Commerce Br.") at 4.3 PET flake is purchased by Ningbo in a variety of colors, and the color (or colors) of PET flake used in the production of PSF determines the PSF's ultimate color.4 See Commerce Br. at 4.
The parties agree that white PET flake is more expensive to purchase than green PET flake, while green is more expensive to purchase than brown PET flake. See PR Doc. No. 261; Commerce Br. at 4. Similar to the PET flake cost hierarchy, once PET flake is processed into PSF, white PSF is sold at higher prices than green PSF, while green PSF is sold at higher prices than brown PSF. Id.
On September 18, 2006, Commerce recommended that in selecting respondents in this investigation it is most appropriate to choose the exporters or producers that account for the largest volume of subject merchandise during the period of investigation ("POI"), based on volume of total metric tons shipped.5 The three exporters or producers thus selected were Ningbo, Cixi Jiangnan Chemical Fiber Co., Ltd., and Far Eastern Industries Ltd. See PR Doc. No. 77.
On September 20, 2006, Commerce sent its antidumping duty questionnaire to Ningbo Dafa, requiring the company to report its factors of production and any market economy purchases made by the company during the POI. See Investigation of Certain Polyester Staple Fiber from the People's Republic of China: Issues and Decision Memorandum ("I & D Memo") at 58 (April 10, 2007). In its November 8, 2006 response, Ningbo Dafa reported on its market-economy purchases ("MEPs") of PET bottle flake, but did not include a breakdown by color. PR Doc. No. 120; Confidential Record ("CR") Doc. No. 57.
On November 11, 2006, Commerce issued Ningbo Dafa a supplemental questionnaire that requested MEP worksheets for each product type sold in the United States during the POI. PR Doc. No. 129. On December 6, 2006, Ningbo Dafa submitted its supplemental questionnaire response, including an MEP worksheet that did not provide a breakdown by color of PET flake purchases, and stated that for PSF, the finished "color is a simple function of the color of the material input used, not the quantity of material used." PR Doc. No. 153; CR Doc. No. 69. Commerce relied on Ningbo's numbers in this response for its preliminary determination. See Preliminary Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances: Certain Polyester Staple Fiber from the People's Republic of China, 71 Fed.Reg. 77,373 (Dec. 26, 2006) ("Preliminary Determination").
On January 31, 2007, Commerce sent Ningbo a MEP supplemental questionnaire asking again for Ningbo Dafa to specifically identify the "quantities, values and average-unit values of your market economy purchases of gross flake, segregated by color."6 PR Doc. No. 208. Ningbo's response stated that "since the raw material purchase invoices do not always specify the colors and since the company does not track inventory by specific colors in its raw material inventory ledgers, it is not possible to complete the MEP spreadsheet by segregating MEP purchases by color." PR Doc. No. 218.
Commerce conducted an on-site verification of Ningbo Dafa during February 2007. During this visit company officials informed Commerce that Ningbo Dafa needs to be able to make all colors of PSF at anytime and that in order to do so Ningbo maintains a large inventory of flake (two to three months) at all times to ensure the proper colors of gross flake are available. PR Doc. No. 232.
In its Final Determination Commerce determined that PSF from the PRC is being, or is likely to be, sold in the United States at less than fair value ("LTFV") as provided in section 735 of the Tariff Act of 1930, as amended ("the Act"). Commerce assigned Ningbo a weighted-average dumping margin rate of 4.86%, up from the rate of 4.39% assigned Ningbo in the Preliminary Determination.7
Oral argument for this case was held before this Court on April 14, 2008.
As referenced above PET flake constitutes the main raw material used by Ningbo in production of recycled PSF. Commerce determined that because color-specific PET flake purchases had a direct effect upon the price of the finished PSF, that therefore this information was necessary to calculate normal value accurately. Commerce Br. at 11. With the exception of a few MEP invoices which identified color, Ningbo did not (Ningbo argues that it could not) report color-specific PET flake costs.8 Pls.' Br. at 14.
Plaintiffs argue that color-specific PET flake valuation was not necessary for an accurate calculation of Ningbo's normal value, and therefore cannot be the basis for Commerce using "facts available." See Id. at 23. The Court will address initially the premise of Plaintiffs' argument (i.e., whether Commerce reasonably determined that color-specific flake valuation was necessary for an accurate calculation of Ningbo's normal value).9
The crux of Plaintiffs' argument as to this issue is that Commerce "disregarded [the color-specific] requirement" for other PET raw materials used by the other mandatory respondents manufacturing colored PSF in this investigation. Id. at 23-24. The implication by Ningbo seems to be therefore that color-specific valuation is not necessary for an accurate calculation of normal value in its case. By way of example, Ningbo notes that Far Eastern Textiles and Cixi Jiangnan both reported consumption of various types of PET fiber waste and Commerce valued these materials according to a single average rupee per kilogram value of such fiber imports reported in the Indian Import Statistics of the World Trade Atlas ("WTA"), irrespective of color. See Id. at 24; I & D Memo (Comment 7)....
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