Pirelli Tyre Co. v. United States

• Docket Number: 20-00115,Slip Op. 23-86
• Decision Date: 09 June 2023
• Parties: PIRELLI TYRE CO., LTD., PIRELLI TYRE S.P.A., and PIRELLI TIRE LLC, Plaintiffs, v. UNITED STATES, Defendant, and SHANDONG NEW CONTINENT TIRE CO., LTD., Plaintiff-Intervenor, and THE UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO, CLC, Defendant-Intervenor.
• Court: U.S. Court of International Trade

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PIRELLI TYRE CO., LTD., PIRELLI TYRE S.P.A., and PIRELLI TIRE LLC, Plaintiffs, and SHANDONG NEW CONTINENT TIRE CO., LTD., Plaintiff-Intervenor,
v.
UNITED STATES, Defendant,

and THE UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO, CLC, Defendant-Intervenor.

No. 20-00115

Slip Op. 23-86

Court of Appeals of International Trade

June 9, 2023

Sustaining the U.S. Department of Commerce's remand results and final results in the antidumping duty administrative review of certain passenger vehicle and light truck tires from the People's Republic of China.

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Daniel L. Porter, James P. Durling, James C. Beaty, and Ana M. Amador Gil, Curtis, Mallet-Prevost, Colt & Mosle, LLP, of Washington, D.C., for Plaintiffs Pirelli Tyre Co., Ltd., Pirelli Tyre S.p.A., and Pirelli Tire LLC.

Ned H. Marshak, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, N.Y., and Andrew T. Schutz, Brandon M. Petelin, and Jordan C. Kahn, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, D.C., for Plaintiff-Intervenor Shandong New Continent Tire Co., Ltd.

Sosun Bae, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, and Patricia M. McCarthy, Director. Of Counsel on the brief was Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Nicholas J. Birch and Roger B. Schagrin, Schragrin Associates, of Washington, D.C., for Defendant-Intervenors United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC.

Before: Jennifer Choe-Groves, Judge.

AMENDED OPINION AND ORDER

JENNIFER CHOE-GROVES, JUDGE.

This action arises from the results of the U.S. Department of Commerce ("Commerce") in the antidumping administrative review of certain passenger vehicle and light truck tires from the People's Republic of China ("China") for the period of August 1, 2017 through July 31, 2018 ("Period of Review 3"). Compl. at 1, ECF No. 6. Plaintiffs Pirelli Tyre Co., Ltd. ("Pirelli

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China"), Pirelli Tyre S.p.A., and Pirelli Tire LLC ("Pirelli USA") (collectively, "Plaintiffs" or "Pirelli") filed this action pursuant to 28 U.S.C. § 1581(c) contesting Commerce's final results in Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China ("Final Results"), 85 Fed.Reg. 22,396 (Dep't of Commerce Apr. 22, 2020) (final results of antidumping duty admin. review; 2017- 2018). See id. Plaintiffs bring this suit to challenge: (1) whether Commerce had statutory authority to issue a China-wide entity rate; (2) whether Commerce properly applied the applicable legal criteria for analyzing Plaintiffs' separate rate eligibility; and (3) Commerce's determination that Plaintiffs were controlled by the Chinese government through the ownership of China National Chemical Corporation ("Chem China"). See id. at 5-7.

Before the Court is Plaintiffs' Rule 56.2 Motion for Judgment on the Agency Record. Pls.' R. 56 Mot. J. Agency R. ("Plaintiffs' Motion" or "Pls.' Mot."), ECF Nos. 65, 66. Defendant United States ("Defendant") and Defendant-Intervenor the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC ("Defendant-Intervenor" or "Def.-Interv.") filed Defendant's Response to Plaintiffs' Rule 56.2 Motion for Judgment on the Agency Record and the Response Brief of Defendant-Intervenor. Def.-Interv.'s Resp. Br. ("Def.-Interv.'s Resp."), ECF Nos. 71, 72; Def.'s Resp. Pls.' R. 56.2 Mot. J. Agency R. ("Def.'s Resp."), ECF Nos. 74, 75.

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Plaintiffs filed Plaintiffs' Reply Brief in Support of Motion for Judgment on the Agency Record. Pls.' Reply Br. Supp. Mot. J. Agency R. ("Pls.' Reply"), ECF Nos. 79, 80.

Also before the Court are Defendant-Intervenor's Comments in Opposition to Remand Results. Def.-Interv.'s Cmts. Opp'n Remand Results ("Defendant-Intervenor's Comments" or "Def.-Interv.'s Cmts."), ECF Nos. 62, 63. Defendant-Intervenor opposes Commerce's redetermination on remand in the Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF Nos. 55-1, 56-1, determining that the sole mandatory respondent in Commerce's review, Shandong New Continent Tire Co., Ltd. ("New Continent"), reported sales information accurately and was not involved in fraud. Id. at 18-26. Defendant and Plaintiff-Intervenor New Continent filed Defendant's Response to Comments on Remand Redetermination and Plaintiff-Intervenor's Comments in Support of Remand Redetermination supporting the Remand Results. Def.'s Resp. Cmts. Remand Redetermination ("Defendant's Comments" or "Def.'s Cmts."), ECF Nos. 69, 70; Pl.-Interv.'s Cmts. Remand Results ("Plaintiff-Intervenor's Comments" or "Pl.-Interv.'s Cmts."), ECF Nos. 73, 76.

The Court entered an Opinion and Order on March 20, 2023 sustaining Commerce's Remand Results and Final Results. Slip Op. 23-38, ECF No. 88. Plaintiffs have filed Plaintiffs' Motion to Alter or Amend Judgment asking the

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Court to address arguments raised based on provisions of Italian law. Pls.' Mot. Alter Amend J., ECF No. 90. The Court grants Plaintiffs' Motion to Alter or Amend Judgment and sets aside Slip Opinion 23-38, ECF No. 88, and the accompanying Judgment, ECF No. 89. This Amended Opinion and Order more thoroughly addresses Plaintiffs' arguments concerning Italian law. All other sections remain substantively unchanged from Slip Opinion 23-38. For the following reasons, the Court sustains Commerce's Final Results and Remand Results.

ISSUES PRESENTED

The Court reviews the following issues:

1. Whether Commerce's determination that New Continent provided accurate information during the administrative review was supported by substantial evidence;

2. Whether Plaintiffs have waived their challenge to Commerce's authority to impose a China-wide entity antidumping duty rate by not raising the issue in Plaintiffs' Motion;

3. Whether Commerce's determination that Pirelli failed to rebut the presumption of de facto government control was in accordance with the law and supported by substantial evidence; and

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4. Whether provisions of Italian law concerning the independence of directors and the influence of shareholders rebut the presumption of de facto government control.

BACKGROUND

In June 2015, Commerce issued an antidumping duty order covering certain passenger vehicle and light truck tires from China. See Antidumping Duty Investigation of Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China, 80 Fed.Reg. 34,893 (Dep't of Commerce Jun. 18, 2015) (final determination of sales at less than fair value and final affirmative determination of critical circumstances, in part). Commerce initiated an administrative review on October 4, 2018 of multiple companies, including Pirelli China. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 83 Fed.Reg. 50,077, 50,081 (Dep't of Commerce Oct. 4, 2018).

Pirelli China and Pirelli USA filed a separate rate application with Commerce. Pls.' Separate Rate App., PJA 3, CJA 1.^[1] In its Preliminary Results, Commerce determined that Pirelli China had not demonstrated an absence of de jure and de facto government control and denied Pirelli's Separate Rate

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Application. See Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China ("Prelim. Results"), 84 Fed.Reg. 55,909, 55,912 (Dep't of Commerce Oct. 18, 2019) (preliminary results of antidumping duty admin. review and rescission, in part; 2017-2018), and accompanying Issues and Decisions Memorandum ("Preliminary IDM" or "Prelim. IDM") at 13, 15, PJA 13. Pirelli China was assigned the China-wide antidumping margin of 87.99 percent. Prelim. IDM at 13. Pirelli China and Pirelli USA filed an administrative case brief ("Pirelli's Administrative Case Brief") with Commerce requesting that Commerce reverse the Preliminary Results and grant Pirelli China separate rate status. Pls.' Admin. Case Br., PJA 15, CJA 10.

Commerce published on April 15, 2020 the Final Results and accompanying Issues and Decision Memorandum ("Final IDM"), PJA 17. In the Final Results, Commerce assigned mandatory respondent New Continent a zero percent weighted-average dumping margin, which was used as the basis for assigning dumping margins to non-individually examined respondents that qualified for separate rate status. Final Results, 85 Fed.Reg. at 22,397. Commerce also continued to determine that Pirelli China had not rebutted the presumption of de facto government control and was not entitled to a separate rate. Id. at 22,399; Final IDM at 13. Commerce determined that Pirelli China did not establish its

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"autonomy from the [Chinese] government in making decisions regarding the selection of management." Final IDM at 14-18.

Pirelli commenced this action on May 21, 2020. Summons, ECF No. 1; Compl. After initiating this case, Plaintiffs filed Plaintiffs' Unopposed Motion to Stay the Proceedings pending the final determination by the United States Court of Appeals for the Federal Circuit ("CAFC") in China Manufacturers Alliance, LLC v. United States, 1 F.4th 1028 (Fed. Cir. 2021). Pls.' Unopposed Mot. Stay Proceedings, ECF No. 23. The Court granted the motion and stayed the case. Order (Aug. 6, 2020), ECF No. 25.

On May 20, 2021, prior to the CAFC's decision in China Manufacturers Alliance, U.S. Customs and Border Protection ("Customs") notified Commerce that it had observed inconsistencies between the Section A Questionnaire Responses submitted by New Continent to Commerce and the corresponding prices reported to Customs...