Stanley Works (Langfang) Fastening Sys. Co. v. United States
| Decision Date | 05 October 2018 |
| Docket Number | Slip Op. 18-134,Consol. Court No. 11-00102 |
| Parties | THE STANLEY WORKS (LANGFANG) FASTENING SYSTEMS CO., LTD. AND THE STANLEY WORKS/STANLEY FASTENING SYSTEMS, LP, Plaintiffs, MID CONTINENT NAIL CORP., Consolidated Plaintiff v. UNITED STATES, Defendant. MID CONTINENT NAIL CORP., ITOCHU BUILDING CORP., INC., CERTIFIED PRODUCTS INTERNATIONAL INC., CHIIEH YUNG METAL IND. CORP., HUANGHUA JINHAI HARDWARE PRODUCTS CO., LTD., TIANJIN JINGHAI COUNTY HONGLI INDUSTRY & BUSINESS CO., LTD., TIANJIN JINCHI METAL PRODUCTS CO., LTD., SHANDONG DINGLONG IMPORT & EXPORT CO., LTD., TIANJIN ZHONGLIAN METALS WARE CO., LTD., HENGSHUI MINGYAO HARDWARE & MESH PRODUCTS CO., LTD., HUANGHUA XIONGHUA HARDWARE PRODUCTS CO., LTD., WINTIME IMPORT & EXPORT CORPORATION LIMITED OF ZHONGSHAN, SHANGHAI JADE SHUTTLE HARDWARE TOOLS CO., LTD., ROMP (TIANJIN) HARDWARE CO., LTD., CHINA STAPLE ENTERPRISE (TIANJIN) CO., LTD., AND QIDONG LIANG CHYUAN METAL INDUSTRY CO., LTD. Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Before: Jane A. Restani, Judge
OPINION[Commerce's final determinations on remand in its administrative review of an antidumping duty covering steel nails from China are sustained.]
Lawrence J. Bogard, Neville Peterson LLP, of Washington, D.C., for Plaintiffs The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP.
Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington D.C., for the defendant. With them on the briefs were Tara K. Hogan, Senior Trial Counsel Stuart F. Delery, Assistant Attorney General, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the briefs was Zachary Simmons, Attorney, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Adam H. Gordon, The Bristol Group PLLC, of Washington, D.C., for Consolidated Plaintiff, Defendant-Intervenor Mid Continent Nail Corporation. With him on the brief was Ping Gong, of Washington, D.C.
Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, D.C., for consolidated Defendant-Intervenors Itochu Building Products Co., Inc., et al. With him on the brief were Bruce M. Mitchell and Kavita Mohan, of New York, N.Y., and Elaine F. Wang, of Washington, D.C.
Restani, Judge: Before the court are the U.S. Department of Commerce ("Commerce")'s Final Results of Redetermination Pursuant to Court Remand Order in The Stanley Works (Langfang) Fastening Systems Co. v. United States, Ct. No. 11-102, Doc. No. 108 (Mar. 5, 2014) ("Stanley Remand Results"), Commerce's Final Results of Redetermination Pursuant to Partial Remand Order in The Stanley Works (Langfang) Fastening Systems Co. v. United States, Ct. No. 11-102, Doc. No. 151 ("Partial Remand Results") (Apr. 16, 2015), and Redetermination Pursuant to Court Order Granting Defendant's Motion for Voluntary Remand in Mid Continent Nail Corporation v. United States, Ct. No. 11-119, Doc. No. 158 (Nov. 13, 2015) ("Second Mid Continent Remand Results")1 concerning the first administrative review, as amended, for the period January 23, 2008, through July 31, 2009 ("POR"), of the antidumping ("AD")2 order on certain steel nails from the People's Republic of China ("PRC").3 See also Certain Steel Nails from the People's Republic of China: Final Results of the First Antidumping Duty Administrative Review, 76 Fed. Reg. 16,379 (Mar. 23, 2011) ("Final Results"); Certain Steel Nails from the People's Republic of China: Amended Final Results of the First Antidumping Duty Administrative Review, 76 Fed. Reg. 23,279 (Apr. 26, 2011) ("Amended Final Results").4 For the reasons stated below, Commerce's final remand results are sustained.
The court assumes that all parties are familiar with the facts of this consolidated action as discussed in two previous court opinions issued prior to remand. The Stanley Works (Langfang) Fastening Systems Co. v. United States, 964 F. Supp. 2d 1311 (CIT Sept. 3, 2013) ("Stanley I"); Mid Continent Nail Corp. v. United States, 949 F. Supp. 2d 1247 (CIT Aug. 30, 2013) ("MidContinent I"); see also Order of Remand, Doc. No. 156 (Sept. 30, 2015). For the sake of convenience, the facts relevant to the remaining consolidated issues arising from Commerce's multiple remand results are summarized here.5
To calculate the final dumping margin, Commerce elected to use financial data from three surrogate companies, Bansidhar Granites Private Limited ("Bansidhar"), J&K Wire & Steel Industries ("J&K"), and Nasco Steels Private Ltd. ("Nasco"), because those companies produced steel nails, an "identical" product, rather than products comparable to the subject merchandise. See Certain Steel Nails from the People's Republic of China: Issues and Decision Memorandum for the Final Results of the First Antidumping Duty Administrative Review, A-570-909, POR 01/23/08-07/31/09, at cmt. 2 (Dep't Commerce Mar. 14, 2011) ("I&D Memo"). By contrast, Commerce did not use financial statements from Sundram Fasteners Ltd. ("Sundram") because it found that Sundram did not manufacture steel nails or products comparable to the subject merchandise. See id. In its determination, Commerce emphasized that Bansidhar, J&K, and Nasco invested in equipment required to produce nails and consume steel wire rod ("SWR") as their main input. Id. at cmt. 3. Accordingly, using the data from these three companies, Commerce determined that the weighted average dumping margin was 10.63 percent. See 76 Fed. Reg. at 23,280.
Commerce, however, in the second administrative review for the period August 1, 2009, through July 31, 2010, of the AD order on certain steel nails from the PRC, refined its practice for determining whether a company is reasonably considered a producer of "identical" or"comparable" merchandise. See Certain Steel Nails from the People's Republic of China: Final Results and Final Partial Rescission of the Second Antidumping Duty Administrative Review, 77 Fed. Reg. 12,556 (Dep't Commerce Mar.1, 2012) ("AR2 Final Results"); Certain Steel Nails from the People's Republic of China: Issues and Decision Memorandum for the Final Results of the Second Antidumping Duty Administrative Review, A-570-909, POR 08/01/09-07/31/10, at cmt. 2 (Dep't Commerce Mar. 1, 2012) ("AR2 I&D Memo"). Commerce determined that, where "detailed evidence is available in the record of the proceeding," it will analyze a company's "product mix," drawing a "link between the amount of identical merchandise and the resulting ratios." AR2 I&D Memo at cmt. 2. In the light of Commerce's refined practice, the court granted the Government's remand request for Commerce to reevaluate its determination concerning surrogate financial ratios. See Stanley I, 964 F. Supp. 2d at 1342.
On March 5, 2014, Commerce issued the Stanley Remand Results. Commerce applied its "refined practice" and reclassified Nasco and Bansidhar as producers of comparable merchandise. Stanley Remand Results at 3. It also found Sundram a producer of comparable merchandise but excluded J&K as a producer of non-comparable merchandise. Id. at 4, 5. Accordingly, Commerce revised the margin for Stanley, the sole mandatory respondent, and that of the separate rate companies from 10.63 percent to 15.43 percent. See id. at 14. Commerce also found that all four companies showed no receipt of countervailable subsidies, that the differences in the companies' scale of production did not render the use of the data unreasonable, that the consumption of SWR is not determinative where a company is a producer of comparable merchandise, and that Sundram's financial ratios were not aberrational. Id. at 3-5, 13.
The Stanley Works (Langfang) Fastening Systems Co., Ltd. and The Stanley Works/Stanley Fastening Systems, LP. (collectively "Stanley") challenge Commerce's inclusion of Sundram's financial statements in calculating surrogate financial ratios. Plaintiffs' Comments on First Final Results of Redetermination, Doc. No. 115, at 5-37 ("Pl. Cmts."). Stanley first argues that Commerce improperly found no reason to believe or suspect that Sundram may have received countervailable subsidies because record evidence established that Sundram received subsidies through interest free sales tax loans from the state government of Tamil Nadu,6 deferred government grants, a plant location in a Special Economic Zone (SEZ), and a deduction through Section 35(2AB) of India's Income Tax Act. Pl. Cmts. at 11-23. Stanley claims that Commerce incorrectly applied the "reason to believe or suspect standard" and that "generally available information," including a determination by the European Union ("EU"), demonstrated that Sundram received subsidies. Pl. Cmts. at 6-11, 19-23. Stanley then argues that Sundram's manufacturing overhead ratio is aberrational and distortive because its ratio is seven times higher than that of the other surrogate companies. Plaintiffs' Comments on the Final Results of Redetermination Pursuant to Partial Remand Order, Doc. No. 154, at 8-15 ("Pl. Opp. Cmts."). Finally, Stanley challenges Commerce's exclusion of J&K as unreasonable and unsupported by substantial evidence because J&K manufactured nails using SWR and had invested in equipment necessary to produce nails, while Sundram produced no nails. Pl. Cmts. at 37-40. Stanley requests a third remand to address these issues. Pl. Opp. Cmts. at 18.
Mid Continent Nail Corporation ("Mid Continent") and the Government argue that Commerce properly applied its refined practice and reasonably included Sundram's financial statements while excluding J&K's. Comment of Defendant United States on First Final Results of Redetermination, Doc. No. 118, at 16-19 ("Def. Cmts."); Comments of Defendant-Intervenor Mid Continent Nails Corporation on First Final...
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