SolarWorld Ams., Inc. v. United States
| Decision Date | 11 December 2015 |
| Docket Number | Court No. 13–000071,Slip Op. 15–137 |
| Citation | 125 F.Supp.3d 1318 |
| Parties | SolarWorld Americas, Inc., Plaintiff, v. United States, Defendant. |
| Court | U.S. Court of International Trade |
Timothy C. Brightbill and Laura El–Sabaawi, Wiley Rein LLP, of Washington, DC, for the Plaintiff.
Melissa M. Devine, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the Defendant. Also on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel was Lisa Wang, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.
In this case, Plaintiff SolarWorld Americas Incorporated ("SolarWorld") challenges the United States Department of Commerce's ("Commerce") determination, during the countervailing duty ("CVD") investigation of crystalline silicon photovoltaic cells ("solar cells") from the People's Republic of China ("PRC" or "China"), to defer examination of two subsidy allegations until a subsequent administrative review.2
The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),3 and 28 U.S.C. § 1581(c) (2012).
As explained below, because the challenged agency determinations are based on a reasonable reading of the record evidence and free of error of law or judgment, and are therefore not an abuse of the agency's discretion, Commerce's Final Determination in this CVD investigation is sustained.
"A countervailing duty investigation shall be initiated whenever [Commerce] determines, from information available to it, that a formal investigation is warranted into the question of whether the elements necessary for the imposition of a duty under [19 U.S.C. § 1671(a) ] exist."4 In this case, Commerce initiated a CVD proceeding based on SolarWorld's petition, which initially covered twenty-seven separate Chinese government programs that SolarWorld alleged provided countervailable subsidies to the respondents during the POI.5 Thereafter, SolarWorld submitted additional allegations regarding the aluminum extrusions and glass used to assemble solar cells into solar panels or modules. These latter two allegations are the subject of this dispute. Relevant background with respect to each of these allegations is presented below.
SolarWorld's initial petition included an allegation that the Chinese government was providing primary aluminum to producers of subject merchandise for less than adequate remuneration.6 Responding to Commerce's inquiries regarding this allegation, however, both mandatory respondents in Commerce's investigation7 stated that they purchased and used extruded aluminum, rather than primary aluminum, in producing the subject merchandise during the POI.8 SolarWorld then, on February 14, 2012 (Commerce's extended deadline for new subsidy allegations9 ), submitted a new subsidy allegation, claiming that the Chinese government was providing aluminum extrusions to respondents for less than adequate remuneration during the POI.10 Finding no support on the record for an alleged price differential or other information indicating that aluminum extrusions were being sold to respondents at less than adequate prices, however,11 Commerce determined that SolarWorld's allegation failed to satisfy the statutory requirements for initiation of a petition-based investigation pursuant to 19 U.S.C. § 1671a(b).12 Accordingly, Commerce determined not to initiate an investigation of this alleged subsidy.13
In response, on May 15, 2012, SolarWorld submitted new factual information regarding aluminum extrusion prices, to support its February 14, 2012, allegation.14 Commerce, however, determined that, at this point in the proceeding, insufficient time remained to complete the investigation of aluminum extrusions, and as such declined to initiate this additional investigation,15 noting that the decision not to initiate was "in no way a comment on the merits of [the] allegation[ ], which [SolarWorld] may resubmit at the outset of any administrative review, if an order is issued in this proceeding."16 SolarWorld now challenges Commerce's decision not to initiate an investigation into SolarWorld's aluminum extrusions subsidy allegation, and instead to defer consideration of this allegation until the next administrative review.17
Meanwhile, on December 5, 2011, SolarWorld also submitted an additional subsidy allegation claiming that the Chinese government provided glass to Chinese solar cell producers for less than adequate remuneration during the POI.18 Commerce, however, determined not to initiate an investigation of this additional allegation, finding the allegation deficient because (1) it did not provide any information regarding the specific type of glass used in the production of subject merchandise, or explain why such information was not available; (2) it was not accompanied by documentation necessary to support the claim that several Chinese glass producers are state-owned enterprises; (3) it was not accompanied by actual source documentation supporting the allegation of benefit; and (4) the allegation of specificity19 was unsupported and unexplained.20
SolarWorld then re-submitted its subsidy allegation regarding the governmental provision of glass for less than adequate remuneration.21 In this new submission, SolarWorld alleged that the type of glass used in the production of subject merchandise "is a type of flat glass called ‘float glass, ’ "22 which is "made through the ‘float process,’ in which glass is formed on a bath of molten tin."23 To support its allegation that respondents received a benefit24 from the governmental provision of glass, SolarWorld argued that "Chinese [solar cell] producers purchase float glass from [state-owned enterprises] at below-market prices,"25 and supported its claim with pricing data exclusively specific to float glass.26
Based on this re-submitted glass subsidy allegation, Commerce determined to initiate "an investigation of the allegation with respect to the [Government of China]'s provision of float glass for [less than adequate remuneration]."27 Responding to the agency's questionnaires, however, both mandatory respondents reported that "rolled glass, " as distinct from float glass, was the major input used in their solar modules.28 In reply, SolarWorld then sought to amend the scope of the investigation, "to cover all glass used by Chinese respondents in their production of subject merchandise,"29 arguing that Commerce's limitation of the investigation to float glass was "not fully reflective of Petitioner's allegation,"30 or, in the alternative, requesting permission to submit an additional allegation specific to rolled glass.31
Commerce rejected SolarWorld's contention that the subsidy allegation on which Commerce based its initiation was sufficient to cover types of glass beyond float glass, emphasizing that the "initiation memorandum stated clearly that the investigation was limited to float glass"32 because "[t]he information provided by [SolarWorld] pertained solely to float glass, which is clearly distinct from rolled glass,"33 and as such "there was no basis to expand the allegation to cover rolled glass."34
In addition, Commerce also denied SolarWorld permission to submit additional glass subsidy allegations, explaining that investigations into whether an input is being provided for less than adequate remuneration "require gathering detailed information concerning the ownership and management of numerous producers supplying the input, evaluating extensive purchase information, and conducting extensive analysis of the input market and research into possible benchmarks,"35 and as such "are particularly time consuming and would be difficult to complete at such a late stage in an investigation."36
Acknowledging that the agency may examine practices that appear to be countervailable subsidies discovered at any time during the course of an investigation, Commerce explained that it has the authority in such circumstances to "defer examination of any such practice if there is insufficient time remaining before the final determination,"37 and noted that the agency's "rejection of [SolarWorld]'s arguments is in no way a comment on the merits of those allegations, which [SolarWorld] may resubmit at the outset of any administrative review, if an order is issued in this proceeding."38
Because the value of each respondent's total purchases of float glass during the POI was less than 0.005 percent of their respective total sales, Commerce found that "any benefit from this program would have no impact on the overall subsidy rate."39 Commerce therefore determined not to include the governmental provision of float glass within the agency's net subsidy calculations in this investigation.40
SolarWorld now claims that "Commerce's interpretation of SolarWorld's allegation as solely pertaining to float glass, which respondents largely did not use, was unreasonable, and its failure to investigate the Chinese government's provision for [less than adequate remuneration] of the glass used by respondents ... was unlawful."41
Following a brief statement of the relevant standards of review, SolarWorld's claims are addressed below.
The court will sustain Commerce's countervailing duty determinations if they are supported by substantial evidence and are otherwise in accordance with law.42 Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,"43 and the substantial evidence standard of review "can be translated roughly to mean ‘is [the determination] unreasonable?’ "44
Where the statute and regulations leave the agency with some freedom to use its judgment, the court reviews such...
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