Qingdao Sea-Line Trading Co. v. United States
| Decision Date | 08 August 2013 |
| Docket Number | Court No. 10-00304,Slip Op. 13-102 |
| Parties | QINGDAO SEA-LINE TRADING CO., LTD., Plaintiff, v. UNITED STATES, Defendant, and FRESH GARLIC PRODUCERS ASSOCIATION, CHRISTOPHER RANCH, LLC, THE GARLIC CO., VALLEY GARLIC, and VESSEY AND CO., INC., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Before: Richard K. Eaton, Judge
OPINION[The Department of Commerce's Final Results of Redetermination are sustained.]
Robert T. Hume, Hume & Associates, LLC, of Ojai, CA, argued for plaintiff. With him on the brief was Li Jasmine Zhao-King, Trade Bridge, of Elkridge, MD.
Richard P. Schroeder, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, D.C., argued for defendant. With him on the brief were Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Whitney M. Rolig, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, D.C.
John M. Herrmann, Kelley Drye & Warren, LLP, of Washington, D.C., argued for defendant-intervenors. With him on the brief was Michael J. Coursey.
Eaton, Judge: At issue are the Final Results of Redetermination, made pursuant to a remand order issued by the court on March 21, 2012, involving the final results of a new shipper review in connection with the antidumping duty order on fresh garlic from the People's Republic of China ("PRC") for the period of review ("POR") November 1, 2008 through April 30, 2009. Final Results of Redetermination Pursuant to Remand (Dep't of Commerce Sept. 6, 2012) (ECF Dkt. No. 50) ("Remand Results"); Qingdao Sea-line Trading Co. v. United States, 36 CIT _, Slip Op. 12-39 (2012) (Qingdao I); Fresh Garlic From the PRC, 75 Fed. Reg. 61,130 (Dep't of Commerce Oct. 4, 2010) (notice of final results of new shipper review) ("Final Results").
Plaintiff, Qingdao Sea-line Trading Co., Ltd. ("plaintiff" or "Sea-line"), objects to each of the Department's determinations on remand. Pl.'s Cmts. on the Remand Results (ECF Dkt. No. 57) ("Pl.'s Cmts."). Commerce, however, believes that its "remand results fully comply with the Court's remand order, are supported by substantial evidence, and should be sustained." Def.'s Resp. to Pl.'s Cmts. 2 (ECF Dkt. No. 65) ("Def.'s Resp."). Defendant-intervenors assert that the court should reject Sea-line's arguments and affirm the Department's Remand Results. Def.-Ints.' Resp. to Pl.'s Cmts. (ECF Dkt. No. 64) ( ).
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2006) and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2006).
For the reasons set forth below, the Remand Results are sustained.
In 1994, Commerce issued an antidumping order on imports of fresh garlic from the PRC. See Fresh Garlic from the PRC, 59 Fed. Reg. 59,209 (Dep't of Commerce Nov. 16, 1994) ("the Order"). In 2009, plaintiff, an exporter of fresh, whole garlic bulbs from the PRC, requested a new shipper review, which the Department initiated in June 2009. See Fresh GarlicFrom the PRC, 74 Fed. Reg. 31,241 (Dep't of Commerce June 30, 2009) (notice of initiation of new shipper review). After the review was complete, Commerce issued its Final Results in which it determined plaintiff's antidumping margin to be 155.33% and its per-unit cash deposit rate to be $1.28 per kilogram. Final Results, 75 Fed. Reg. at 61,131. For the Final Results, the Department used the Azadpur Agricultural Produce Marketing Committee's Market Information Bulletin ("APMC Bulletin") to value plaintiff's garlic bulbs. Because plaintiff reported a bulb size of over fifty-five millimeters, Commerce determined that the subject garlic was "Grade Super A." As there were no prices reported in the APMC Bulletin for this grade during the November 1, 2008 through April 30, 2009 POR, Commerce valued plaintiff's garlic bulbs using Grade Super A prices from the APMC Bulletin for the period November 1, 2007 through February 6, 2008. These prices were then adjusted for inflation using the Wholesale Price Index for India in the International Monetary Fund's International Financial Statistics. Qingdao I, 36 CIT at _, Slip Op. 12-39, at 9. In addition, to calculate the surrogate financial ratios, which are used to value selling, general and administrative expenses, overhead, and profit, the Department averaged figures from the financial statements of Tata Tea Limited ("Tata Tea") and Limtex Tea Limited ("Limtex").
In its motion for judgment on the agency record, Sea-line disputed the Department's use of the APMC Bulletin from a period before the POR and its use of the Tata Tea financial statement. In Qingdao I, the court granted plaintiff's motion, in part, and remanded the matter for Commerce to (1) "fully explain its decision to use the garlic bulb prices from the older 2007-2008 APMC Bulletin to value the whole garlic bulb, and fully explain why garlic bulb size is such an important factor that it justifies using prices outside of the POR"; (2) "revisit its use of the Tata Tea financial statement and, if it continues to use the statement, explain why it constitutes the best available information, taking into account Commerce's previous finding thatit better reflects the production of peeled garlic, as distinct from the production of Sea-line's whole garlic bulbs"; and (3) "evaluate the [Garlico Industries Limited ("Garlico")] statement submitted by plaintiff, and determine if it constitutes the best available information for use, either by itself or together with the other financial statements, to calculate the surrogate financial ratios." Qingdao I, 36 CIT at_, Slip Op. 12-39, at 47-48.
Remand Results at 1. Based on this analysis, Commerce concluded "that no changes to the margin calculated in the Final Results for [Sea-line] are warranted." Remand Results at 1.
"The court shall hold unlawful any determination, finding, or conclusion found . . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).
Upon request, Commerce conducts administrative reviews "for new exporters and producers." 19 U.S.C. § 1675(a)(2)(B). "The purpose of these new shipper reviews is to determine whether exporters or producers, whose sales have not previously been examined, are(1) entitled to their own duty rates under an antidumping order, and (2) if so, to calculate those rates." Zhengzhou Huachao Indus. Co. v. United States, 37 CIT _, _, Slip. Op. 13-61, at 5 (2013) (citing Hebei New Donghua Amino Acid Co. v. United States, 29 CIT 603, 604, 374 F. Supp. 2d 1333, 1335 (2005)). To calculate the rates, Commerce must determine the normal value, export price,1 and the antidumping duty margin2 for each entry of the subject merchandise. 19 U.S.C. § 1675(a)(2)(A).
For merchandise exported from a nonmarket economy ("NME") country,3 such as the PRC, Commerce usually determines normal value by first pricing the factors of production used to produce the merchandise using surrogate data from "one or more market economy countries that are—(A) at a level of economic development comparable to that of the [NME] country, and (B) significant producers of comparable merchandise." 19 U.S.C. § 1677b(c)(4)(A)-(B). After valuing the factors of production, the Department then adds an amount, calculated using the "surrogate financial ratios," to account for selling, general and administrative expenses,overhead, and profit. 19 U.S.C. § 1677b(c)(1)(B). Here, because China is a NME country, Commerce selected India as the surrogate country for purposes of valuing the factors of production and calculating the surrogate financial ratios.
While it usually values the individual factors of production to calculate normal value, following the ninth administrative review for garlic exported from the PRC, Commerce ceased using this methodology because it found that information about these factors of production in China were unreliable. See Jining Yongjia Trade Co. v. United States, 34 CIT _, _, Slip Op. 10-134, at 8-11 (Dec. 16, 2010). As a result, beginning with the tenth administrative review, the Department determined that, "[i]n order to eliminate the distortions in our calculation of [normal value] . . . , we have applied an intermediate-product valuation methodology to all companies," by which Commerce endeavored to capture the complete costs of producing "fresh garlic" by valuing the "fresh garlic bulb" as an intermediate product. See Fresh Garlic from the PRC, 71 Fed. Reg. 26,329, 26,331 (Dep't of Commerce May 4, 2006) (final results and partial rescission of antidumping duty administrative reviews and final results of new shipper reviews). In other words, rather than basing normal value on the sum of the surrogate values for the upstream factors of production reported by respondents, such as costs associated with leasing land, fertilizer, irrigation, labor, and the like, Commerce assumed that these costs were all contained in the price of the intermediate product: the whole garlic bulb.
Pursuant to statute, the information used by Commerce to value the factors of production (or, here, the whole garlic bulbs) must be "the best available...
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