Qingdao Sea-Line Int'l Trading Co. v. United States

• Decision Date: 16 April 2021
• Docket Number: Court No. 19-00145,Slip Op. 21-44
• Citation: 503 F.Supp.3d 1355
• Parties: QINGDAO SEA-LINE INTERNATIONAL TRADING CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and Fresh Garlic Producers Association, and Its Individual Members Christopher Ranch, L.L.C., the Garlic Company, and Valley Garlic, Defendant-Intervenors.
• Court: U.S. Court of International Trade

503 F.Supp.3d 1355

QINGDAO SEA-LINE INTERNATIONAL TRADING CO., LTD., Plaintiff,

v. UNITED STATES, Defendant,andFresh Garlic Producers Association, and Its Individual Members Christopher Ranch, L.L.C., the Garlic Company, and Valley Garlic, Defendant-Intervenors.

Slip Op. 21-44

Court No. 19-00145

United States Court of International Trade.

April 16, 2021

Irene H. Chen, Chen Law Group LLC, of Rockville, MD, argued for plaintiff.

Meen Geu Oh, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald Blades, Jr., Assistant Director. Of Counsel Brendan Saslow, Attorney, Office of Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce. With them on the post argument submission was Jeffrey Bossert Clark, Acting Assistant Attorney General.

Joshua R. Morey, Kelley Drye & Warren LLP, of Washington, DC, argued for defendant-intervenors. With him on the brief was Michael J. Coursey and John M. Herrmann.

OPINION

Katzmann, Judge:

This case concerns the reliance on facts otherwise available ("FA") and application of an adverse inference ("AFA") in an antidumping ("AD") review by the U.S. Department of Commerce ("Commerce"), resulting in a higher tariff, where respondent submitted inconsistent and unreliable information regarding its U.S. sales price. At issue is Commerce's twenty-third administrative review of AD duties on fresh garlic from China. Fresh Garlic from the People's Republic of China: Final Results of the 23rd Antidumping Duty Administrative Review; 2016–2017, 84 Fed. Reg. 35,601 (Dep't Commerce July 24, 2019) ("Final Results"); Issues and Decision Mem. for the Final Results of the AD Duty Administrative Review: Fresh Garlic from the People's Republic of China; 2016–2017 (July 19, 2019), P.R. 282 ("IDM"); Final Analysis Mem. for Qingdao Sea-Line Int'l Trading Co., Ltd. (July 25, 2019), P.R. 284, C.R. 159 ("Final Analysis Memo"). Plaintiff Qingdao Sea-Line International Trading Co., Ltd. ("Sea-Line"), an exporter of fresh garlic from China, brought this suit against Defendant the United States ("Government") to challenge the Final Results, specifically Commerce's application of AFA to its own dumping margin and, assuming that AFA was incorrectly applied, Commerce's selection of a surrogate country in its calculation of a dumping margin for all other respondents to Commerce's review. See Mem. in Supp. of Pl.’s Rule 56.2 Mot. for Summ. J. at 1, Feb. 18, 2020, ECF No. 26 ("Pl.’s Br."). The Government and Defendant-Intervenor Fresh Garlic Producers Association, including its individual members Christopher Ranch L.L.C., The Garlic Company, and Valley Garlic, (collectively, "FGPA"), ask the court to sustain Commerce's determination. Def.’s Resp. to Pl.’s Mot. for J. Upon the Agency R., May 8, 2020, ECF No. 29 ("Def.’s Br."); Def.-Inters.’ Resp. in Opp'n to Pl.’s Mot. for J. on the Agency R., May 27, 2020, ECF No. 30 ("Def.-Inter.’s Br.").¹

The court sustains Commerce's Final Results as to Sea-Line and denies Sea-Line's motion.

BACKGROUND

I. Legal Framework

Congress's AD statute empowers Commerce to impose remedial duties on imported goods when those goods are sold in the United States for less than their fair market value, and when the International Trade Commission determines that the domestic industry is thereby "materially injured, or ... is threatened with material injury." See 19 U.S.C. § 1673(2)(A)(i)–(ii) ; Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304, 1306 (Fed. Cir. 2017). Dumping constitutes unfair competition because it permits foreign producers to undercut domestic companies by selling products below their fair market value. Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1046 (Fed. Cir. 2012). To address the harmful impact of such unfair competition, Congress enacted the Tariff Act of 1930, which empowers Commerce to investigate potential dumping and if necessary to issue orders instituting duties on subject merchandise. Id. at 1047. In these instances, "the amount of the [AD] duty is ‘the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise.’ " Shandong Rongxin Imp. & Exp. Co. v. United States, 42 CIT ––––, ––––, 331 F. Supp. 3d 1390, 1394 (2018) (quoting 19 U.S.C. § 1673 ), aff'd, 779 F. App'x 744 (Fed. Cir. 2019). If the exporting country is a non-market economy that provides insufficient information to determine the normal value, Commerce may use surrogate values from market economy countries for "the factors of production utilized in producing the merchandise and ... for general expenses and profit plus the cost of containers, coverings, and other expenses." 19 U.S.C. § 1677b(c)(1). Upon request, Commerce may conduct an administrative review of its AD duty determination and recalculate the applicable rate. Id. § 1675(a)(1)–(2); see Shandong Rongxin, 331 F. Supp. 3d at 1394.

In determining or reviewing whether a good is being sold in the United States at less than fair value, Commerce may issue questionnaires to selected mandatory respondents² in order to gather information. See 19 U.S.C. § 1677f-1(c)(2)(A)–(B). Where Commerce's request is unambiguous and pertinent to an investigation or review, 19 U.S.C. § 1677m requires that a respondent "prepare an accurate and complete record in response to questions plainly asked by Commerce" in a timely fashion. Tung Mung Dev. Co. v. United States, 25 C.I.T. 752, 758, 23 ITRD 1775, 2001 WL 844484 (2001) (citing Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1571–72 (Fed. Cir. 1990) ). If Commerce deems a response to its request deficient, then Commerce "shall promptly inform the person submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that person with an opportunity to remedy or explain the deficiency in light of the time limits established for the completion of investigations or reviews under this subtitle." 19 U.S.C. § 1677m(d). Commerce may provide this notice and the opportunity to remedy deficiencies through issuance of a supplemental questionnaire. Commerce will verify information relied upon in the final results of an administrative review if: (1) a domestic interested party timely requests verification and no verification under the relevant paragraph occurred during either of the two immediately preceding administrative reviews, or (2) the Secretary of Commerce determines that "good cause" for verification exists. See 19 U.S.C. § 1677m(i)(1)–(3) ; 19 C.F.R. § 351.307(b)(1)(iv)–(v).

A. Reliance on FA and AFA

Pursuant to 19 U.S.C. § 1677e, if a party fails to satisfactorily respond to Commerce's requests for "necessary information" to calculate a dumping margin by (1) withholding requested information, (2) failing to provide information by the submission deadlines or in the form or manner requested, (3) significantly impeding a proceeding, or (4) providing information that cannot be verified, Commerce shall use FA to calculate the margin. Id. § 1677e(a)(1)–(2). "The use of facts otherwise available ... is only appropriate to fill gaps when Commerce must rely on other sources of information to complete the factual record." Zhejiang Dunan Hetian Metal Co. v. United States, 652 F.3d 1333, 1346 (Fed. Cir. 2011) (citing Nippon Steel Corp. v. United States, 337 F.3d 1373, 1381 (Fed. Cir. 2003) ).

Furthermore, Commerce may make a separate determination that the respondent failed to cooperate "to the best of its ability" and apply AFA. 19 U.S.C. § 1677e(b)(1)(A). A respondent does not cooperate to the "best of its ability" when it fails to "put forth its maximum effort to provide Commerce with full and complete answers to all inquiries." Nippon Steel, 337 F.3d at 1382. The Federal Circuit in Nippon Steel explained that Commerce must make an objective and subjective determination regarding respondent's efforts in assessing whether it acted to the best of its ability. Id. at 1382–83. The Federal Circuit clarified that this test applies "regardless of motivation or intent" on the part of the respondent, and that it "does not condone inattentiveness, carelessness, or inadequate record keeping." Id.

In applying AFA, Commerce may rely on information from the initial petition, a final determination in the investigation, a previous administrative review, or any other portion of the administrative record. 19 U.S.C. § 1677e(b)(2) ; 19 C.F.R. § 351.308(c). Although Commerce may choose to supplement the administrative record of its own accord, the burden of creating an adequate record, and therefore of avoiding AFA, lies with the respondent. Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1337 (Fed. Cir. 2016) (quoting QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011) ). "[W]here there is useable information of record but the record is incomplete," Commerce applies partial AFA. Wash. Int'l Ins. Co. v. United States, 33 C.I.T. 1023, 1035 n.18, 31 ITRD 1803, 2009 WL 2460824 (2009) (citing Yantai Timken Co. v. United States, 31 C.I.T. 1741, 1746–48, 521 F. Supp. 2d 1356, 1364–65 (2007), aff'd, 300 Fed. Appx. 934 (Fed. Cir. 2008) ). However, Commerce applies total AFA when "none of the reported data is reliable or usable," Mukand, Ltd. v. United States, 767 F.3d 1300, 1305 (Fed. Cir. 2014), or where "the bulk of it is determined to be flawed and unverifiable" because of "pervasive and persistent deficiencies that cut across all aspects of the data." Zhejiang DunAn Hetian Metal, 652 F.3d at 1348 (discussing Steel Authority of India, Ltd. v. United States, 25 C.I.T. 482, 149 F. Supp. 2d 921 (2001) ). After making a finding that AFA is appropriate, Commerce may then select an AD rate using the adverse inferences against the respondent. See 19 U.S.C. § 1677e(d). The statute explicitly provides Commerce with...