Shandong Yongtai Group Co., Ltd. v. Qingdao Sentury Tire Co., Ltd., 112719 USCIT, 18-00077

Docket Nº:18-00077, Slip Op. 19-150
Opinion Judge:JENNIFER CHOE-GROVES, JUDGE
Party Name:SHANDONG YONGTAI GROUP CO., LTD., Plaintiff, v. UNITED STATES, Defendant. and QINGDAO SENTURY TIRE CO., LTD., SENTURY TIRE USA INC., SENTURY (HONG KONG) TRADING CO., LIMITED, PIRELLI TYRE CO., LTD., PIRELLI TYRE S.P.A., and PIRELLI TIRE LLC, Consolidated Plaintiffs,
Attorney:Jordan C. Kahn, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, D.C., argued for Plaintiff Shandong Yongtai Group Co., Ltd. With him on the briefs were Ned H. Marshak and Brandon M. Petelin. Dharmendra N. Choudhary, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of N...
Judge Panel:Before: Jennifer Choe-Groves, Judge
Case Date:November 27, 2019
Court:Court of International Trade
 
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SHANDONG YONGTAI GROUP CO., LTD., Plaintiff,

and

QINGDAO SENTURY TIRE CO., LTD., SENTURY TIRE USA INC., SENTURY (HONG KONG) TRADING CO., LIMITED, PIRELLI TYRE CO., LTD., PIRELLI TYRE S.P.A., and PIRELLI TIRE LLC, Consolidated Plaintiffs,

v.

UNITED STATES, Defendant.

No. 18-00077

Slip Op. 19-150

Court of Appeals of International Trade

November 27, 2019

[Sustaining in part and remanding in part the U.S. Department of Commerce's Final Results in the antidumping duty administrative review of certain passenger vehicle and light truck tires from the People's Republic of China.]

Jordan C. Kahn, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, D.C., argued for Plaintiff Shandong Yongtai Group Co., Ltd. With him on the briefs were Ned H. Marshak and Brandon M. Petelin.

Dharmendra N. Choudhary, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, N.Y., argued for Consolidated Plaintiffs Qingdao Sentury Tire Co., Ltd., Sentury Tire USA Inc., and Sentury (Hong Kong) Trading Co., Limited. With him on the briefs were Andrew T. Schutz, Brandon M. Petelin, Jordan C. Kahn, and Ned H. Marshak. Elaine F. Wong also appeared.

Daniel L. Porter and James P. Durling, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., argued for Consolidated Plaintiffs Pirelli Tyre Co., Ltd., Pirelli Tyre S.p.A., and Pirelli Tire LLC. With them on the briefs were Tung A. Nguyen, Kimberly Reynolds, and Gina Colarusso.

Ashley Akers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the briefs were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel was Ayat Mujais, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce. Of counsel on the briefs were David Campbell and Jessica R. DiPietro, Attorney-Advisor, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Before: Jennifer Choe-Groves, Judge

OPINION

JENNIFER CHOE-GROVES, JUDGE

This action arises from the U.S. Department of Commerce's ("Commerce") administrative review of certain passenger vehicle and light truck tires ("PVLT") from the People's Republic of China ("China" or "PRC"). Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China, 83 Fed. Reg. 11, 690 (Dep't Commerce Mar. 16, 2018) (final results of antidumping duty administrative review and final determination of no shipments) ("Final Results"); see Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China: Issues and Decision Memorandum for the Final Results of the 2015-2016 Antidumping Duty Administrative Review, PD 502 (Mar. 9, 2018) ("Final IDM"). Before the court are the motions for judgment on the agency record of Plaintiff Shandong Yongtai Group Co., Ltd. ("Plaintiff," "Shandong Yongtai," or "Shandong Yongtai Group"), Consolidated Plaintiffs Qingdao Sentury Tire Co., Ltd., Sentury Tire USA Inc., Sentury (Hong Kong) Trading Co., Limited (collectively, "Sentury"), and Consolidated Plaintiffs Pirelli Tyre Co., Ltd., Pirelli Tyre S.p.A., Pirelli Tire LLC (collectively, "Pirelli"). For the reasons that follow, the court sustains in part and remands in part the Final Results to Commerce for further consideration.

ISSUES PRESENTED

This case presents the following issues: 1. Whether Commerce's notice and initiation of the administrative review as to Plaintiff was in accordance with the law;

2. Whether Commerce's determination not to grant a separate rate as to Shandong Yongtai Chemical Co., Ltd. was supported by substantial evidence;

3. Whether Commerce's calculation of a value-added tax ("VAT") deduction to Sentury's U.S. price was supported by substantial evidence and in accordance with the law;

4. Whether Commerce's decision not to make an adjustment for the Export Buyer's Credit Program ("EBCP"), as accounted for in the companion countervailing duty administrative review, was supported by substantial evidence and in accordance with the law; and

5. Whether Commerce's determination that Pirelli was ineligible for a separate rate and Commerce's assignment of the China-wide entity rate was supported by substantial evidence and in accordance with the law.

PROCEDURAL HISTORY

Commerce published the Final Results of the administrative review of PVLT from China on March 16, 2018. Final Results at 11, 690. Plaintiff initiated this action on April 12, 2018, challenging certain aspects of Commerce's Final Results. See Summons, Apr. 12, 2018, ECF No. 1; Compl. ¶ 1, Apr. 12, 2018, ECF No. 6 ("Compl."). The court entered a statutory injunction on April 16, 2018. See Order for Statutory Inj. Upon Consent, Apr. 16, 2018, ECF No. 10. The administrative record was filed on May 29, 2018. Ltr. from David W. Campbell, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, to Mario Toscano, Clerk of the Court, U.S. Court of International Trade, May 29, 2018, ECF No. 15. The court consolidated this case with Court Numbers 18-00079 and 18-00080 on June 14, 2018. Order, Jun. 14, 2018, ECF No. 17.

Shandong Yongtai, Sentury, and Pirelli moved for judgment on the agency record. Plaintiff's Mot. for J. on the Agency R., Oct. 2, 2018, ECF No. 20 ("Shandong Yongtai's Mot."); Consol. Pl. Sentury's Mot. for J. on the Agency R. Pursuant to Rule 56.2, Oct. 2, 2018, ECF No. 21 ("Sentury's Mot."); Mot. for J. on the Agency R., Oct. 3, 2019, ECF No. 24 ("Pirelli's Mot.").

The court stayed this case following the lapse in appropriations for the Department of Justice on January 8, 2019. Order, Jan. 8, 2019, ECF No. 32. Defendant moved to continue the stay following restoration of appropriations on January 30, 2019. Status Report and Request for Continuation of Stay, Jan. 30, 2019, ECF No. 33. The court denied Defendant's motion and lifted the stay on January 30, 2019. Second Am. Scheduling Order, Jan. 30, 2019, ECF No. 34.

Defendant responded. Def.'s Mem. in Opp'n to Pls.' Rule 56.2 Mots. for J. Upon the Agency R., Mar. 4, 2019, ECF No. 37 ("Def.'s Resp."). Shandong Yongtai, Sentury, and Pirelli replied. Reply Br. of Pl. Shandong Yongtai Group Co., Ltd. (Formerly Known as Shandong Yongtai Chemical Co., Ltd.), Apr. 19, 2019, ECF No. 44 ("Pl.'s Reply"); Reply Br. of Consol. Pl. Sentury, Apr. 19, 2019, ECF No. 45 ("Sentury's Reply"); Reply Br. of Consol. Pls. Pirelli Tyre Co., Ltd., Pirelli Tyre S.p.A., and Pirelli Tire LLC, Apr. 19, 2019, ECF No. 46 ("Pirelli's Reply"). The joint appendix was filed on May 3, 2019. Joint App'x to Opening Resp., and Reply Brs. Regarding Pls.' Mot. for J. on the Agency R. Pursuant to Rule 56.2, May 3, 2019, ECF No. 48. Sentury filed notices of supplemental authority on May 17, 2019, and May 24, 2019. Notice of Supplemental Authority, May 17, 2019, ECF No. 53; Notice of Supplemental Authority, May 24, 2019, ECF No. 54. The court heard oral arguments on June 18, 2019. Oral Argument Hr'g, Jun. 18, 2019, ECF No. 61.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012) and 19 U.S.C. §§ 1516a(a)(2)(A)(i)(I) and (B)(iii). The court will hold unlawful any determination, finding, or conclusion found to be unsupported by substantial evidence on the record, or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i).

ANALYSIS

I.

Notice and Initiation of the Administrative Review as to Shandong Yongtai

A. Background

Plaintiff was formed under the name Shandong Yongtai Chemical Group Co., Ltd. ("Shandong Yongtai Chemical Group") in August, 1995. Shandong Yongtai Mot. 5; Shandong Yongtai Separate Rate Appl., Ex. 7, Art. 1, PD 149 (Nov. 14, 2016) ("Shandong Yongtai SRA"). Plaintiff changed the company's name to Shandong Yongtai Chemical Co., Ltd. ("Shandong Yongtai Chemical") in 2012.

Commerce initiated antidumping and countervailing duty investigations into PVLT from China on July 21, 2014. Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China, 79 Fed. Reg. 42, 292 (Dep't Commerce July 21, 2014) (initiation of antidumping duty investigation); Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China, 79 Fed. Reg. 42, 285 (Dep't Commerce July 21, 2014) (initiation of countervailing duty investigation). Plaintiff participated in the investigation and sought a separate rate. See Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China, 80 Fed. Reg. 4, 250, 4, 251-52 (preliminary determination). Commerce issued an antidumping duty order as to PVLT from China on August 10...

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