Tianjin Wanhua Co. v. United States
| Decision Date | 24 July 2017 |
| Docket Number | Court No. 15-00190, Slip Op. 17-91. |
| Citation | 253 F.Supp.3d 1318 |
| Parties | TIANJIN WANHUA CO., LTD., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
David J. Craven, Sandler, Travis & Rosenberg of Chicago, Illinois, for Plaintiff Tianjin Wanhua Co., Ltd.
Tara K. Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice of Washington, DC for Defendant United States. On the brief with her were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Nanda Srikantaiah, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce of Washington, DC.
J. Michael Taylor, Stephen A. Jones, and Mark T. Wasden, King & Spalding of Washington, DC for Defendant–Intervenor Terphane, Inc.
Jeffrey I. Kessler, Ronald I. Meltzer, Patrick J. McLain, and David M. Horn, Wilmer, Cutler, Pickering, Hale & Dorr, LLP of Washington, DC for Defendant–Intervenors Mitsubishi Polyester Film, Inc. and SKC, Inc.
This action involves the fifth administrative review conducted by the U.S. Department of Commerce ("Commerce") of the antidumping duty order covering polyethylene terephthalate film, sheet, and strip from the People's Republic of China ("PRC"). See Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic of China, 80 Fed. Reg. 33,241 (Dep't of Commerce June 11, 2015) (final results admin. review) ("Final Results") and accompanying Issues and Decision Mem. for Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic of China, A–570–924 (Dep't of Commerce June 3, 2015), ECF No. 33–3 ("Decision Memorandum").
Before the court are the Final Results of Redetermination ("Remand Results"), ECF No. 71, filed by Commerce pursuant to Tianjin Wanhua Co. v. United States, 40 CIT ––––, 182 F.Supp.3d 1301 (2016), as well as the comments of Plaintiff Tianjin Wanhua Co., Ltd. ("Plaintiff" or "Wanhua"). See Pl.'s Comments on the U.S. Dep't of Commerce's First Remand Redetermination, ECF No. 78 ("Pl.'s Cmts."); see also Def.'s Resp. to Comments to the Remand Redetermination, ECF No. 82 ( ); Pl.'s Reply to Def.'s Resp. to Remand Comments, ECF No. 88 ("Pl.'s Reply Cmts."). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012)1 and 28 U.S.C. § 1581(c) (2012). The court sustains Commerce's "determinations, findings, or conclusions" unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i). Familiarity with the prior judicial and administrative decisions in this action is presumed.
For administrative reviews of antidumping duty orders, the court sustains Commerce's "determinations, findings, or conclusions" unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law."
19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006) ; see also Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (). Substantial evidence has been described as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). Substantial evidence has also been described as "something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence 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, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). Fundamentally, though, "substantial evidence" is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] (3d ed. 2017). Therefore, when addressing a substantial evidence issue raised by a party, the court analyzes whether the challenged agency action "was reasonable given the circumstances presented by the whole record." 8A West's Fed. Forms, National Courts § 3.6 (5th ed. 2017).
In an antidumping duty administrative review, Commerce determines whether subject merchandise is being, or is likely to be, sold at less than fair value in the United States by comparing the export price and the normal value of the merchandise. 19 U.S.C. §§ 1675(a)(2)(A), 1677b(a). In the non-market economy ("NME") context, Commerce calculates normal value using data from surrogate countries to value the factors of production ("FOPs"). 19 U.S.C. § 1677b(c)(1)(B). Commerce must use the "best available information" in selecting surrogate data from "one or more" surrogate market economy countries. 19 U.S.C. § 1677b(c)(1)(B), (c)(4). Commerce has a stated regulatory preference to "normally ... value all factors in a single surrogate country." 19 C.F.R. § 351.408(c)(2) (2015).
The antidumping statute requires that surrogate data must "to the extent possible" be from a market economy country or countries that are (1) "at a level of economic development comparable to that of the [NME] country" and (2) "significant producers of comparable merchandise." 19 U.S.C. § 1677b(c)(4). The statute does not define the phrase "level of economic development comparable to that of the [NME] country," nor does it require Commerce to use any particular methodology in determining whether that criterion is satisfied. To partially fill the statutory gap, Commerce promulgated 19 C.F.R. § 351.408(b), which emphasizes per capita Gross Domestic Product ("GDP") as a measure of economic comparability:
In determining whether a country is at a level of economic development comparable to the non-market economy under [ 19 U.S.C. § 1677b(c)(1)(B) ] or [ 19 U.S.C. § 1677b(c)(4)(A) ] of the Act, the Secretary will place primary emphasis on per capita GDP as the measure of economic comparability.
19 C.F.R. § 351.408(b). Commerce has since explained that it "now uses per capita [Gross National Income, or "GNI"], rather than per capita GDP, because while the two measures are very similar, per capita GNI is reported across almost all countries by an authoritative source (the World Bank), and because [Commerce] believes that the per capita GNI represents the single best measure of a country's level of total income and thus level of economic development." Antidumping Methodologies in Proceedings Involving Non–Market Economy Countries: Surrogate Country Selection and Separate Rates, 72 Fed. Reg. 13,246, 13,246 n.2 (Dep't of Commerce Mar. 21, 2007) (req. for comments).
Commerce uses GNI data "as reported in the most current annual issue of the World Development Report (World Bank)" to identify potential surrogate countries that are economically comparable to the NME country. Import Admin., U.S. Dep't of Commerce, Non–Market Economy Surrogate Country Selection Process, Policy Bulletin 04.1 at 2 (2004), http://enforcement.trade.gov/policy/bull04–1.html (last visited this date) ("Policy Bulletin"). The identification of potential surrogate countries occurs early in a dumping proceeding, id., and is the first step in Commerce's four-step process to select a surrogate country:
(1) the Office of Policy ("OP") assembles a list of potential surrogate countries that are at a comparable level of economic development to the NME 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.
Vinh Hoan Corp. v. United States, 39 CIT ––––, ––––, 49 F.Supp.3d 1285, 1292 (2015) (internal quotation marks omitted) (quoting the Policy Bulletin ).
In conducting the fifth administrative review, as it did in the fourth administrative review, Commerce again selected Indonesia as the primary surrogate country for calculating the normal value of polyethylene terephthalate film, sheet, and strip from the PRC, an NME country. Wanhua challenges that selection and contends that Commerce should have instead selected South Africa. See Pl.'s Mem. Supp. Mot. J. Agency R., ECF No. 41 ("Pl.'s 56.2 Br."). The issue of the surrogate country selection turned into something of a mess during the proceeding, a mess that has carried forward into the litigation before the court. Wanhua created that mess by untimely attempting to introduce GNI data for surrogate country selection in a submission for FOP data. Much of Wanhua's briefing and argument concerns alleged unfairness during the proceeding, but the court believes that it was Wanhua that acted inequitably by failing to identify that it was seeking a waiver of the applicable deadline in its untimely submission of GNI data. More on that after the court explains what transpired below.
Early in the proceeding Commerce issued a "Request for Surrogate Country and Surrogate Value Comments and Information" that solicited from all interested parties submissions of comments and factual information to aid in Commerce's selection of an "appropriate surrogate market economy country." See Fifth Antidumping...
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