Shenzhen Xinboda Industrial Co., Ltd. v. United States

• Decision Date: 26 December 2018
• Docket Number: Consol. Court No. 16-00116,Slip Op. 18-179
• Citation: 357 F.Supp.3d 1295
• Parties: SHENZHEN XINBODA INDUSTRIAL CO., LTD., Plaintiff, and Qingdao Tiantaixing Foods Co., Ltd., et al., Consolidated Plaintiffs, and Jinxiang Hejia Co., Ltd., et al., Plaintiff-Intervenors, v. UNITED STATES, Defendant, and Fresh Garlic Producers Association, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

357 F.Supp.3d 1295

SHENZHEN XINBODA INDUSTRIAL CO., LTD., Plaintiff,andQingdao Tiantaixing Foods Co., Ltd., et al., Consolidated Plaintiffs,andJinxiang Hejia Co., Ltd., et al., Plaintiff-Intervenors,

v. UNITED STATES, Defendant,andFresh Garlic Producers Association, et al., Defendant-Intervenors.

Slip Op. 18-179

Consol. Court No. 16-00116

United States Court of International Trade.

Dated: December 26, 2018

Gregory S. Menegaz, J. Kevin Horgan, and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, for Plaintiff and Plaintiff-Intervenors.

Meen Geu Oh, Trial Attorney, Commercial Litigation Branch, U.S. Department of Justice, of Washington, DC, for Defendant. With him on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Natan P.L. Tubman, Attorney, Office of the Chief Counsel for Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Michael J. Coursey, John M. Herrmann, Joshua R. Morey, and Heather N. Doherty, Kelley Drye & Warren LLP, of Washington, DC, for Defendant-Intervenors.

OPINION AND ORDER

Barnett, Judge:

This matter is before the court following the U.S. Department of Commerce's ("Commerce" or the "agency") redetermination upon remand in this case. See Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 69-1.

Plaintiff Shenzhen Xinboda Industrial Co., Ltd. ("Plaintiff" or "Xinboda") initiated this action¹ challenging Commerce's final results in the 20th administrative review ("AR 20") of the antidumping duty order on fresh garlic from the People's Republic of China ("PRC" or "China").² See Summons, ECF No. 1; Fresh Garlic From the People's Republic of China , 81 Fed. Reg. 39,897 (Dep't Commerce June 20, 2016) (final results and final rescission of the 20th antidumping duty admin. review; 2013-2014) (" Final Results "), ECF No. 30-4, and accompanying Issues and Decision Mem., A-570-831 (June 10, 2016) ("I & D Mem."), ECF No. 30-5.³ Specifically, Xinboda, a mandatory respondent in this review, challenged Commerce's (1) rejection of surrogate country information demonstrating Mexico's economic comparability to China; (2) selection of Romania as the primary surrogate country; and (3) calculation of movement expenses. See Pl. Shenzhen Xinboda Industrial Co., Ltd.'s Mot. for J. on the Agency R., ECF No. 39, and Pl. Shenzhen Xinboda Industrial Co., Ltd. Mem. in Supp. of Mot. for J. on the Agency R. ("Xinboda's 56.2 Br."), ECF No. 39-2; I & D Mem. at 1. On December 18, 2017, the court remanded Commerce's rejection of surrogate country information and deferred consideration of Plaintiff's additional challenges pending the results of Commerce's remand redetermination. See Shenzhen Xinboda Indus. Co. Ltd. v. United States , Slip Op. 17-160, 2017 WL 6502727 (CIT Dec. 5, 2017).⁴

On March 9, 2018, Commerce filed its Remand Results.⁵ On remand, Commerce, under protest,⁶ permitted Xinboda to submit factual information regarding Mexico's economic comparability to China. Remand Results at 1. Upon consideration of this information and Mexican surrogate value data, Commerce affirmed its selection of Romania as the primary surrogate country. Id. at 1, 31.

Xinboda filed comments opposing the Remand Results. See Pl. Shenzhen Xinboda Industrial Co., Ltd. Comments in Opp'n to U.S. Dep't of Commerce's Remand Redetermination ("Xinboda's Remand Opp'n"), ECF No. 84.⁷ Defendant United States ("Defendant" or the "Government") and Defendant-Intervenors⁸ filed comments in support of the Remand Results. See Def.'s Resp. to Comments on Remand Results ("Def.'s Remand Reply"), ECF No. 78; Def.-Ints.' Comments in Supp. of the U.S. Dep't of Commerce's Redetermination Pursuant to Remand ("Def.-Ints.' Remand Reply"), ECF No. 77.

For the reasons discussed herein, Commerce's selection of Romania as the primary surrogate country and selection of Romanian pricing data as the surrogate value for raw garlic are sustained. However, the court remands for further consideration Commerce's addition of transportation costs to the surrogate value for raw garlic and calculation of Xinboda's brokerage and handling and inland freight expenses.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),⁹ and 28 U.S.C. § 1581(c). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "The results of a redetermination pursuant to court remand are also reviewed for compliance with the court's remand order." SolarWorld Ams., Inc. v. United States , 41 CIT ––––, ––––, 273 F.Supp.3d 1314, 1317 (2017) (quoting Xinjiamei Furniture (Zhangzhou) Co. v. United States , 38 CIT ––––, ––––, 968 F.Supp.2d 1255, 1259 (2014) (internal quotation marks omitted).

DISCUSSION

I. Surrogate Country Selection

An antidumping duty is "the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise." 19 U.S.C. § 1673. When an antidumping duty proceeding involves a nonmarket economy country, Commerce determines normal value by valuing the factors of production¹⁰ in a surrogate country, see id. § 1677b(c)(1), and those values are referred to as "surrogate values." Commerce may also rely on surrogate values, when appropriate, to adjust the export price or constructed export price to account for costs incurred in "bringing the subject merchandise from the original place of shipment in the exporting country to the place of delivery in the United States." Id. § 1677a(c)(2)(A); see also Fine Furniture (Shanghai) Ltd. v. United States , 40 CIT ––––, ––––, 182 F.Supp.3d 1350, 1368 (2016) (noting Commerce's use of a surrogate value to calculate international movement expenses). In selecting surrogate values, Commerce must use "the best available information" that is, "to the extent possible," from a market economy country or countries that are economically comparable to the nonmarket economy country and "significant producers of comparable merchandise." 19 U.S.C. § 1677b(c)(1), (4).

Commerce generally values all factors of production in a single surrogate country.¹¹ Commerce has adopted a four-step approach to selecting a primary surrogate country. See Import Admin., U.S. Dep't of Commerce, Non-Market Economy Surrogate Country Selection Process , Policy Bulletin 04.1 (2004), http://enforcement.trade.gov/policy/bull04-1.html (last visited Dec. 18, 2018) (hereinafter "Policy Bulletin 04.1"). Pursuant to Policy Bulletin 04.1,

(1) the Office of Policy ("OP") assembles a list of potential surrogate countries that are at a comparable level of economic development to the [non-market economy] country; (2) Commerce identifies countries from the list with producers of comparable merchandise; (3) Commerce determines whether any of the countries which produce comparable merchandise are significant producers of that comparable merchandise; and (4) if more than one country satisfies steps (1)–(3), Commerce will select the country with the best factors data.

Jiaxing Brother Fastener Co., Ltd. v. United States , 822 F.3d 1289, 1293 (Fed. Cir. 2016) (citation omitted); see also Policy Bulletin 04.1.

On remand, Commerce reopened the administrative record, invited Xinboda to resubmit information regarding Mexico's economic comparability to China, and set deadlines for parties to rebut, clarify, or correct the information contained therein. Remand Results at 4; see also Refiling Resubmission of Sept. 17, 2015 Additional Surrogate Country List and Surrogate Country Comments (Jan. 3, 2018) ("Xinboda's SC Comments"), RR 6, PRJA Tab 10, Suppl. CRJA Tab 2, Suppl. PRJA Tab 2; Rebuttal to Xinboda'[s] Resubmitted Sept. 17, 2015 Additional Surrogate Country List and Surrogate Country Comments (Jan. 10, 2018) ("Xinboda's Remand Rebuttal"), RR 8-10, PRJA Tab 12; Pet'rs' Submission of Rebuttal Factual Information (Jan. 10, 2018) ("Pet'rs' Remand Rebuttal"), RR 11-16, PRJA Tab 13, Suppl. CRJA Tab 1, Suppl. PRJA Tab 1. Upon review of this information, Commerce determined that Mexico and Romania are both at the same level of economic development as the PRC and significant producers of comparable merchandise. See Remand Results at 8-9, 11.¹² Pursuant to Policy Bulletin 04.1, Commerce's inquiry thus turned to which country provided the best factors data. Id. at 11.

To determine the best source of factors data, Commerce considers the degree to which the data is publicly available, contemporaneous with the period of review, tax and duty exclusive, representative of a broad-market average, and product-specific. Id. at 11-12; see also 19 C.F.R. § 351.408(c)(1), (4). Commerce's analysis of this issue is confined to the record built by interested parties. See QVD Food Co., Ltd. v. United States , 658 F.3d 1318, 1324 (Fed. Cir. 2011). Moreover, when selecting from among multiple sources, Commerce's inquiry may be a relative exercise and will rarely involve perfect data sets. When "Commerce is faced with the choice of selecting from among imperfect alternatives, it has the discretion to select the best available information for a surrogate value so long as its decision is reasonable." Catfish Farmers of Am. v. United States , 33 CIT 1258, 1273, 641 F.Supp.2d 1362, 1377 (2009). Applying the afore-mentioned criteria, Commerce weighed the information on the record and determined that the Romanian data was the best available information.

A careful review of the Remand Results indicates that Commerce's selection of Romania over Mexico was a close call. Publicly available data was available from both countries. See Remand Results at 12, 15, 30. Although roughly contemporaneous data was available from Mexico, Commerce considered the monthly data from Romania to be more contemporaneous than the annual...