Shenzhen Xinboda Industrial Co. Ltd. v. United States, 120517 USCIT, 16-00116

Docket Nº:16-00116, Slip Op. 17 - 160
Opinion Judge:R. Kenton Musgrave, Senior Judge.
Party Name:SHENZHEN XINBODA INDUSTRIAL CO. LTD., QINGDA6O TIANTAIXING FOODS, CO., SHENZHEN BAINONG CO., LTD., SHENZHEN YUTING FOODSTUFF CO., LTD., JINXIANG HEJIA CO., LTD., JINXIANG FEITENG IMPORT & EXPORT CO., LTD., Plaintiffs, v. UNITED STATES, Defendant, and FRESH GARLIC PRODUCERS ASSOCIATION, et al., Defendant-Intervenors.
Attorney:Gregory S. Menegaz, J. Kevin Horgan, John J. Kenkel, Judith L, Holdsworth, and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, for the plaintiffs Shenzhen Xinboda Industrial Co., Ltd., Shenzhen Bainong Co., Ltd., Shenzhen Yuting Foodstuff Co., Ltd., Jinxiang Hejia Co., Ltd., an...
Judge Panel:Before: R. Kenton Musgrave, Senior Judge.
Case Date:December 05, 2017
Court:Court of International Trade
 
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SHENZHEN XINBODA INDUSTRIAL CO. LTD., QINGDA6O TIANTAIXING FOODS, CO., SHENZHEN BAINONG CO., LTD., SHENZHEN YUTING FOODSTUFF CO., LTD., JINXIANG HEJIA CO., LTD., JINXIANG FEITENG IMPORT & EXPORT CO., LTD., Plaintiffs,

v.

UNITED STATES, Defendant,

and

FRESH GARLIC PRODUCERS ASSOCIATION, et al., Defendant-Intervenors.

No. 16-00116

Slip Op. 17 - 160

Court of Appeals of International Trade

December 5, 2017

Remanding 20th administrative review of fresh garlic from the People's Republic of China on issue of rejected economic comparability information and sustaining final results for one mandatory respondent.

Gregory S. Menegaz, J. Kevin Horgan, John J. Kenkel, Judith L, Holdsworth, and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, for the plaintiffs Shenzhen Xinboda Industrial Co., Ltd., Shenzhen Bainong Co., Ltd., Shenzhen Yuting Foodstuff Co., Ltd., Jinxiang Hejia Co., Ltd., and Jinxiang Feiteng Import & Export Co., Ltd.

Robert T. Hume, Hume & Associates LLC, of Taos, NM, for the plaintiff Qingdao Tiantaixing Foods Co., Ltd.

Emma E. Bond, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the defendant. On the brief were Chad E. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of Counsel was Emily Beline, Attorney, Office of the Chief Counsel for Enforcement and Compliance, U.S. Department of Commerce.

Michael J. Coursey, John M. Herrmann, and Joshua R. Morey, Kelley Drye & Warren, of Washington, DC, for the defendant-intervenors.

Before: R. Kenton Musgrave, Senior Judge.

OPINION

R. Kenton Musgrave, Senior Judge.

This opinion addresses three consolidated challenges to the final antidumping ("AD") duty administrative review1 Fresh Garlic from the People's Republic of China2, 81 Fed. Reg. 39897 (June 20, 2016) ("20th AR Final Results"), PDoc 442, as explained by the International Trade Administration, U.S. Department of Commerce ("Commerce"), in its issues and decision memorandum ("IDM") accompanying that public notice, PDoc 439. The period of review ("POR")3 is November 1, 2013, through October 31, 2014, and the pertinent plaintiffs here are Shenzhen Xinboda Industrial Co., Ltd. ("Xinboda") and Qingdao Tiantaixing Foods, Co. ("QTF"). Together with the others, 4 they challenge Commerce's: (1) rejection of factual information from Xinboda as untimely; (2) selection of Romania as the surrogate country; (3) calculation of Xinboda's movement expenses; (4) application to QTF of facts otherwise available with an adverse inference; and (5) disregard of QTF's separate rate information as unreliable and finding that QTF was part of the PRC-wide entity. For the following reasons, Xinboda persuades that the first issue requires remand for reconsideration, obviating further discussion here of issues (2) and (3), but QTC's arguments on (4) and (5) lack persuasiveness.

I. Overview

Commerce initiated the 20th review of the AD order towards the end of December 2014 and initially selected Xinboda and Hebei Golden Bird Trading Co., Ltd. as mandatory respondents for the POR. PDoc 138 at 4-5. The latter did not respond to its questionnaire; therefore Commerce added or substituted QTF as a mandatory respondent. PDoc 165 at 1; PDoc 302 at 3. In its preliminary results, 5 Commerce found the magnitude of dumping for Xinboda's entries to be $2.72 per kilogram. See PDoc 398 at 1; PDoc 399 at 75973. For QTF, Commerce preliminarily applied adverse facts available, found QTF ineligible for a separate rate, and included QTF in the PRC-wide entity bearing the AD duty rate of $4.71 per kilogram.6 After considering the parties' comments for the final results, Commerce affirmed that Xinboda had dumped subject merchandise by a margin of $2.75 per kilogram, applied that rate to the separate-rate-eligible respondents, and affirmed that QTF was ineligible for a separate rate. See PDoc 442 at 39898.

Xinboda and QTF filed timely challenges here to the 20th AR Final Results pursuant to 19 U.S.C. §1516a(a)(2)(A)(i)(I) and (B)(iii) and claim proper jurisdiction under 28 U.S.C. §1584(c). The standard of judicial review thereon is confined to substantial evidence on the record, see 19 U.S.C. §1516a(b)(1)(B)(i), meaning "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion", i.e., "more than a mere scintilla". PAM, S.p.A. v. United States, 582 F.3d 1336, 1339 (Fed. Cir. 2009) (citation omitted). This also means that the possibility of drawing inconsistent conclusions from the record "does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966) (citation omitted).

II. Xinboda's Challenges

Xinboda moves for judgment on the administrative record of Commerce's (1) rejection of its supplemental submission of information pertaining to the Mexican economy as potentially comparable to that of the PRC, (2) selection of Romania as the primary surrogate country, and (3) calculation of movement expenses. Xinboda Br. at 2-35.

A. Rejection of Surrogate Country Information

1. Background

For outstanding AD orders, Commerce annually reviews and determines the margin of dumping, i.e., the difference between export price or constructed export price and "normal" value ("NV"). See 19 U.S.C. §1675(a)(1)(B). NV is to be determined to "a time reasonably corresponding to the time of the sale used to determine the export price or constructed export price". 19 U.S.C. §1677b(a)(1)(A). When subject merchandise is from a non-market economy ("NME"), Commerce is required to base NV on the factors of production ("FOPs") for subject merchandise and "utilize, to the extent possible, " FOPs in one or more surrogate market economy countries that are economically comparable to the level of economic development of the NME country and significant producers of comparable merchandise. 19 U.S.C. §1677b(c). See, e.g., Jiaxing Bro. Fastener Co. v. United States, 822 F.3d 1289, 1292 (Fed. Cir. 2016). In conjunction with such "to the extent possible" utilization, and with one exception not relevant here, FOPs are to be valued on the basis of the "best available information regarding the values of such factors". 19 U.S.C. §1677b(c)(1)(B). Towards that goal, Commerce tests FOP data on the record for (1) public availability, (2) product specificity, (3) broad market average, (4) tax and duty exclusivity, and (5) contemporaneity. See IDM at 12, citing Policy Bulletin 04.1; see, e.g., Fresh Garlic Producers Ass'n v. United States, 39 CIT ___, ___, 83 F.Supp.3d 1330, 1337 (2015).

The administrative preference is to use FOPs from a single "primary" surrogate country. See,

e.g., Jiaxing Bro. Fastener, 822 F.3d at 1302, citing 19 C.F.R. § 351.408(c)(2). The selection of thereof is a four-step process: First, Commerce requests from its Office of Policy ("OP") a list of countries at a comparable level of economic development to the NME country (the "OP List"). See id. at 1293; see also NME Surrogate Country Selection Process, Policy Bulletin 04.1 (2004). The policy bulletin explains (at page 2; italics added) that "OP determines economic comparability on the basis of per capita gross national income, as reported in the most current annual issue of the World Development Report". Second, Commerce identifies countries on that list with producers of comparable merchandise. Jiaxing Bro. Fastener, 822 F.3d at 1302 (citations omitted). Third, Commerce determines whether any of those countries are "significant producers" of comparable merchandise. Id. Fourth, if more than one country remains, Commerce will select the country with the best data for FOP valuation. Id.; see also 19 U.S.C. § 1677b.

For the 20th AR, Commerce provided OP's list to interested parties via a letter-memorandum approximately four months after initiation. PDoc 153 (Apr. 20, 2015). Commerce considers that list "non-exhaustive." Id. (OP List at 1). The countries that made that list were based on the available 2013 per capita gross national income ("GNI") data from the World Bank, [7] as follows: PRC ($6, 560); Romania ($9, 060); Bulgaria ($7, 360); South Africa ($7, 190); Ecuador ($5, 760); Thailand ($5, 340); and Ukraine ($3, 960). The letter-memorandum accompanying that list also instructed: Because it is the Department's practice to determine economic comparability early in a proceeding, we are providing interested parties an opportunity to comment on the list as a starting point for surrogate country selection . . . and to propose for consideration other countries that are at a level of economic development comparable to the PRC. These comments are due by 5:00 pm Eastern Daylight...

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