Taian Ziyang Food Co. v. United States

• Decision Date: 22 July 2011
• Docket Number: Slip Op. 11–88.Court No. 05–00399.
• Parties: TAIAN ZIYANG FOOD COMPANY, LTD., et al., Plaintiffs,v.UNITED STATES, Defendant,andFresh Garlic Producers Association, et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

783 F.Supp.2d 1292

TAIAN ZIYANG FOOD COMPANY, LTD., et al., Plaintiffs,

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

Slip Op. 11–88.Court No. 05–00399.

United States Court of International Trade.

July 22, 2011.

OPINION TEXT STARTS HEREWest CodenotesRecognized as Invalid19 C.F.R. § 351.408(c)(3).

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Mark E. Pardo), Washington, DC, for Plaintiffs Zhengzhou Harmoni Spice Co., Ltd., Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import & Export Co., Ltd.Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, (Jane C. Dempsey and Richard P. Schroeder); Reid Swayze, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Of Counsel, for Defendant.

OPINION

RIDGWAY, Judge:

In this consolidated action, the plaintiff Chinese producers and exporters of fresh garlic (“the Chinese Producers”) challenged the final results of the U.S. Department of Commerce's ninth administrative review of the antidumping duty order covering fresh garlic from the People's Republic of China. See generally Taian Ziyang Food Co. v. United States, 33 CIT ––––, 637 F.Supp.2d 1093 (2009). Taian Ziyang analyzed each of the 10 issues that the Chinese Producers raised, sustaining Commerce's determination as to three of the issues, and remanding the remaining seven to the agency for further consideration. See generally id., 33 CIT at ––––, ––––, 637 F.Supp.2d at 1100–02, 1166.

Now pending before the court is Commerce's Second Remand Determination, filed pursuant to Taian Ziyang. See generally Final Results of Redetermination Pursuant to Court Remand (“Second Remand Determination”).¹ Although they raise no objections to Commerce's redeterminations as to four of the issues addressed in the Second Remand Determination, Plaintiffs Zhengzhou Harmoni Spice Co., Ltd. (“Harmoni”), Jinan Yipin Corporation, Ltd. (“Jinan Yipin”), Linshu Dading Private Agricultural Products Co., Ltd. (“Linshu Dading”), and Sunny Import & Export Co., Ltd. (“Sunny”)—collectively referred to as the “GDLSK Plaintiffs”—continue to contest the agency's treatment of three issues. See generally GDLSK Plaintiffs' Comments Regarding the Department's Remand Redetermination (“GDLSK Comments”); GDLSK Plaintiffs' Reply Comments Regarding the Department's Remand Redetermination (“GDLSK Reply Comments”). The Government seeks a voluntary remand to allow Commerce to recalculate the surrogate value for the Chinese Producers' labor costs, but contends that the Second Remand Determination should be sustained in all other respects. See Defendant's Response to Comments Upon the Remand Redetermination (“Def. Response”) at 1–2, 19.

Jurisdiction lies under 28 U.S.C. § 1581(c) (2000).² For the reasons detailed below, Commerce's Second Remand Determination is sustained in part, and this matter is remanded to the agency for further consideration not inconsistent with this opinion.

I. Background

Seven Chinese producers and exporters of fresh garlic (the “Chinese Producers”) brought this action to contest various aspects of the Final Results of Commerce's ninth administrative review of the antidumping duty order on fresh garlic from China, which covered the period from November 1, 2002 through October 31, 2003. See generally Taian Ziyang, 33 CIT ––––, 637 F.Supp.2d 1093; Fresh Garlic from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 70 Fed.Reg. 34,082 (June 13, 2005) (“Final Results”); Notice of Amended Final Results of Antidumping Duty Administrative Review: Garlic from the People's Republic of China, 70 Fed.Reg. 56,639 (Sept. 28, 2005) (“Amended Final Results”); Final Results of Redetermination Pursuant to Court Remand (Dec. 5, 2005) (First Remand Pub. Doc. 10) (“First Remand Determination”).³

Taian Ziyang sustained Commerce's use of “adverse facts available” in calculating the dumping margins for Taian Ziyang Food Company, Ltd. (“Ziyang”) and Taian Fook Huat Tong Kee Foodstuffs Co., Ltd. (“FHTK”). See Taian Ziyang, 33 CIT at ––––, ––––, 637 F.Supp.2d at 1124, 1166. Taian Ziyang similarly sustained Commerce's valuation of cold storage (challenged by the GDLSK Plaintiffs), as well as Commerce's calculation of surrogate financial ratios (challenged by Jinxiang Dong Yun Freezing Storage Co., Ltd. (“Dong Yun”)). See id., 33 CIT at ––––, ––––, 637 F.Supp.2d at 1144, 1166. In contrast, Taian Ziyang remanded for further consideration Commerce's valuation of certain “factors of production” necessary for the cultivation and export of fresh garlic—specifically, (1) garlic seed, (2) irrigation water, (3) labor, (4) leased land, (5) cardboard cartons, (6) plastic jars and lids, and (7) ocean freight. See id., 33 CIT at ––––, ––––, ––––, ––––, 637, ––––, ––––, ––––, 637 F.Supp.2d at 1127, 1133, 1138, 1141, 1151–52, 1157, 1162, 1166.

In its Second Remand Determination, Commerce revalued irrigation expenses, leased land, ocean freight, and labor. See Second Remand Determination at 1–2, 11–16, 16–40, 40–41, 50–53, 60–73, 78–79. On the other hand, Commerce continued to value garlic seed, cardboard cartons, and plastic jars and lids as it did in the Final Results. See id. at 1–2, 4–11, 41–46, 46–50, 54–60, 73–76, 76–78.

As a result of its reconsideration in the course of the second remand, Commerce recalculated the weighted-average antidumping duty margin for Harmoni as 0.00% (down from 8.79%), for Jinan Yipin as 1.04% (down from 13.21 %), for Linshu Dading as 4.34% (down from 7.97%), for Sunny as 4.22% (down from 9.17%), and for Dong Yun as 15.49% (down from 31.26%). See Second Remand Determination at 79; Final Results, 70 Fed.Reg. at 34,085; First Remand Determination at 19. FHTK's margin remains unchanged at 15.75%. See Second Remand Determination at 79; First Remand Determination at 19.⁴

The GDLSK Plaintiffs contend that Commerce's wage rate calculation and its valuation of cardboard cartons and plastic jars and lids do not comply with the instructions in Taian Ziyang. See generally GDLSK Comments; GDLSK Reply Comments. The GDLSK Plaintiffs maintain that this matter therefore should be remanded to the agency for further consideration. See GDLSK Comments at 2–3, 9, 14; GDLSK Reply Comments at 7. The Government seeks a voluntary remand to allow Commerce to recalculate the labor wage rate, but maintains that the Second Remand Determination otherwise should be sustained. See Def. Response at 1–2, 19.⁵

II. Standard of Review

In an action reviewing an antidumping determination by Commerce, the agency's determination must be upheld except to the extent that it is found to be “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i); see also NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed.Cir.2009). Substantial evidence is “more than a mere scintilla”; rather, it is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. Nat'l Labor Relations Bd., 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consol. Edison Co. v. Nat'l Labor Relations Bd., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)); see also Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1380 (Fed.Cir.2008) (same). Moreover, any evaluation of the substantiality of evidence “must take into account whatever in the record fairly detracts from its weight,” including “contradictory evidence or evidence from which conflicting inferences could be drawn.” Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 985 (Fed.Cir.1994) ( quoting Universal Camera Corp., 340 U.S. at 487–88, 71 S.Ct. 456); see also Mittal Steel, 548 F.3d at 1380–81 (same). That said, the mere fact that it may be possible to draw two inconsistent conclusions from the record does not prevent Commerce's determination from being supported by substantial evidence. Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir.2001); see also Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).

Finally, while Commerce must explain the bases for its decisions, “its explanations do not have to be perfect.” NMB Singapore, 557 F.3d at 1319. Nevertheless, “the path of Commerce's decision must be reasonably discernable,” to support judicial review. Id. ( citing Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)); see also Timken U.S. Corp. v. United States, 421 F.3d 1350, 1355 (Fed.Cir.2005) (explaining that “it is well settled that an agency must explain its action with sufficient clarity to permit ‘effective judicial review,’ ” and that “[f]ailure to provide the necessary clarity requires the agency action be vacated”) ( quoting Camp v. Pitts, 411 U.S. 138, 142–43, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973)); see generally 19 U.S.C. § 1677f(i)(3)(A) (requiring Commerce to “include in a final determination ... an explanation of the basis for its determination”).

III. Analysis

Dumping occurs when goods are imported into the United States and sold at a price lower than their “normal value,” resulting in material injury (or the threat of material injury) to the U.S. industry. See 19 U.S.C. §§ 1673, 1677(34), 1677b(a). The difference between the normal value of the goods and the U.S. price is the “dumping margin.” See 19 U.S.C. § 1677(35). When normal value is compared to the U.S. price and dumping is found, antidumping duties equal to the dumping margin are imposed to offset the dumping. See 19 U.S.C. § 1673.

Normal value is typically calculated using either the price in the exporting market ( i.e., the price in the “home market” where the goods are produced)...