Trust Chem Co. Ltd. v. United States

• Decision Date: 03 August 2011
• Docket Number: Slip Op. 11–97.Court No. 10–00214.
• Citation: 791 F.Supp.2d 1257
• Parties: TRUST CHEM COMPANY LIMITED, Plaintiff,v.UNITED STATES, Defendant,andNation Ford Chemical Company and Sun Chemical Corporation, Defendant–Intervenors.
• Court: U.S. Court of International Trade

791 F.Supp.2d 1257

TRUST CHEM COMPANY LIMITED, Plaintiff,

v.UNITED STATES, Defendant,andNation Ford Chemical Company and Sun Chemical Corporation, Defendant–Intervenors.

Slip Op. 11–97.Court No. 10–00214.

United States Court of International Trade.

Aug. 3, 2011.

Kutak Rock LLP (Ronald M. Wisla and Lizbeth R. Levinson), Washington, DC, for Plaintiff Trust Chem.Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC; (Patryk J. Drescher), Attorney; (Alexander V. Sverdlov), Attorney, and, of Counsel, Whitney M. Rolig, Attorney, Office of the Chief Counsel for Import Administration, Department of Commerce, for Defendant United States.Pepper Hamilton LLP (Gregory C. Dorris), Washington, DC, for Defendant–Intervenors Nation Ford Chemical and Sun Chemical Corp.

OPINION

POGUE, Chief Judge:

In this action, Plaintiff Trust Chem Co., Ltd. (“Trust Chem” or “Plaintiff”) seeks review of the final results of the U.S. Department of Commerce's (“Commerce” or “the Department”) fourth administrative review of the antidumping order covering Carbazole Violet Pigment 23 (“CVP–23”) from the People's Republic of China.¹

Specifically, Plaintiff claims that Commerce's choice of data to value the nitric acid used to produce the Plaintiff's merchandise is less specific than data Plaintiff submitted, and that Commerce's chosen data is aberrational or unrepresentative of the nitric acid used in producing Plaintiff's goods.

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2006).

As explained below, the court concludes that Commerce's determination that its data is not aberrational requires reconsideration.

BACKGROUND

This case arises out of Commerce's 2004 antidumping order on CVP–23 ² from China. Carbazole Violet Pigment 23 from the People's Republic of China, 69 Fed.Reg. 77,987 (Dep't of Commerce Dec. 29, 2004) (antidumping duty order). Commerce considers China to be a nonmarket economy (“NME”).³

In administrative proceedings involving goods from an NME, Commerce may approximate the normal value of the goods based on a “surrogate” for the value of their “factors of production” (“FOP”). 19 U.S.C. § 1677b(c); ⁴ see also 19 C.F.R. § 351.408. The statute provides, however, “that surrogate data used to calculate the value of factors of production ... must, to the extent possible, come from market economy countries with ‘a level of economic development comparable to that of the non-market economy country. [’]” Dorbest Ltd. v. United States, 604 F.3d 1363, 1371 (Fed.Cir.2010) (quoting 19 U.S.C. § 1677b(c)(4)(A)).⁵

Within these statutory limitations, Commerce selects a specific surrogate value in each individual administrative proceeding, by choosing the “best available information,” 19 U.S.C. § 1677b(c),⁶ which is selected using criteria established by regulation and practice, generally referred to as “Commerce's methodology.” Such surrogate values are at issue here.

Specifically, during the fourth administrative review of Commerce's antidumping order on CVP–23 from China, Trust Chem suggested that Commerce use a surrogate value for nitric acid, as published in the Indian periodical Chemical Weekly,⁷ of 9.00 Rupees per kilogram (“INR/Kg.”), or $215.31 per metric ton (“USD/MT”). Pl.'s Prelim. Surrogate Value Sub for Prelim. Determination 4 & Attach. 2, at 22–25 (Sept. 8, 2009) Admin. R. Pub. Doc. 22.⁸ Defendant–Intervenors Nation Ford Chemical Company and Sun Chemical Corporation (collectively “Petitioners”) proposed a surrogate value based on nitric acid data from the Indian Department of Commerce's Export Import Data Bank of 35.08 INR/Kg., or $839.44 USD/MT. Pet'rs' Surrogate Value Data Ex. 21 (Sept. 8, 2009) (PR 21).

In the preliminary results, Commerce rejected these surrogate values. Instead, it utilized data from the Indian Department of Commerce's Export Import Data Bank, compiled in the World Trade Atlas (“WTA data”),⁹ for HTSUS 2808.00.10, with a POR value of $10,474.46 USD/MT. Prelim. Surrogate Value Mem. 5–6 (Dec. 22, 2009) (PR 34) (“ Prelim. Surrogate Value Mem.”); Prelim. Results, 74 Fed.Reg. at 68,783; see also Prelim. Results at 68,782 (“In accordance with [ 19 U.S.C. § 1677b(a)(1)(C) ] we calculated [normal value (“NV”) ] based on [FOPs] reported by Trust Chem for the POR. To calculate NV, we multiplied the reported per-unit factor consumption rates by publicly-available Indian surrogate values.”). On the basis of that data, Commerce preliminarily assigned a dumping margin ¹⁰ of 29.57 percent to Trust Chem. Prelim. Results 74 Fed.Reg. at 68,785.

In the Final Results, again relying on WTA data, Commerce assigned Trust Chem a margin of 30.72 percent. Final Results, 75 Fed.Reg. at 36,632.

Trust Chem now challenges this decision, arguing that: (A) the data it proposed is more specific ¹¹ to, and hence more representative of, the nitric acid used in producing the subject CVP–23, and (B) the WTA data is aberrational or unrepresentative.

After summarizing the applicable standard of review, the court will address each of Trust Chem's arguments in turn.

STANDARD OF REVIEW

When reviewing the final results of an antidumping proceeding, the court assesses whether Commerce's decision is supported by substantial evidence on the record and in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). “ ‘Substantial evidence’ is more than a mere scintilla .... [and is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion[,]” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938),¹² “taking into account the entire record, including whatever fairly detracts from the substantiality of the evidence.” Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984); see also Universal Camera, 340 U.S. at 487, 71 S.Ct. 456. Thus, when reviewing agency determinations, findings or conclusions for substantial evidence, the court assesses whether the agency's action is reasonable. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed.Cir.2006).

“Normally, an agency rule would be arbitrary and capricious [and therefore unreasonable] if the agency has relied on factors which Congress has not intended it to consider ... [or] entirely failed to consider an important aspect of the problem.” Motor Vehicle Mfrs. Ass'n. of U.S. v. State Farm Mut. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983); SKF USA Inc. v. United States, 630 F.3d 1365, 1374 (Fed.Cir.2011) (Commerce “has an ‘obligation’ to address important factors raised by comments from petitioners and respondents.”).

DISCUSSION

A. Specificity of the Surrogate Value ¹³

First, Plaintiff claims that Commerce's price determination is not supported by substantial evidence in the record because Commerce chose the “less specific” WTA data, which has “undetermined purity[.]” Pl.'s Br. 13.

Plaintiff argues that the Chemical Weekly data is more specific to its nitric acid, because the Chemical Weekly data is for nitric acid with a purity level of 60 percent, a level that is known and thus more product-specific than the unknown purity level of the WTA data. Id. at 9–10. Plaintiff adds that this value could have been “adjusted upward to at least partially account for the full costs of the higher purity level processing[.]” Id. at 28.

Commerce noted, however, that although the purity or concentration of the nitric acid included in the WTA data was unknown, the Chemical Weekly prices were for 60 percent or “weak” strength nitric acid, as opposed to the “high” strength 98 percent nitric acid used in the production of Trust Chem's merchandise. Because a simple conversion based on concentrations would not provide an accurate value, Commerce found that the Chemical Weekly prices were not the best available information, but rather the WTA data was the best option. I & D Mem. Cmt. 4 at 16.¹⁴ Thus, Commerce argues that the WTA data is the appropriate choice, as it is “more specific” than the Chemical Weekly data. Def.'s Br. 5, 8–10.¹⁵ Commerce suggests that Plaintiff bases its specificity argument on “speculation.”

To the court, neither party can establish the precise relationship of its data to the 98 percent nitric acid used in the production of Plaintiff's merchandise. In fact, neither value is more “specific” than the other.

Nevertheless, as long as Commerce reasonably explains its choice between two appropriate but imperfect alternatives, the court will not reject the agency's determination, even if the court would have made a different one. Dorbest Ltd. v. United States, 30 CIT 1671, 1676, 462 F.Supp.2d 1262, 1269 (2006); Goldlink Indus. v. United States, 30 CIT 616, 619, 431 F.Supp.2d 1323, 1327 (2006) (The court evaluates “whether a reasonable mind could conclude that Commerce chose the best available information.”).¹⁶

B. Aberrational Price

Plaintiff also argues that Commerce's surrogate value choice, based on WTA data, was “aberrational and distortive.” Pl.'s Br. 11. As it did before the agency, Trust Chem asserts four considerations in support of this claim: (1) the extreme numerical differences between the WTA and Chemical Weekly data; (2) the low volume of nitric acid included in the WTA data; (3) the relationship between U.S. import data and the Chemical Weekly data; and (4) Commerce's decision in the original investigation and first administrative review of this order that other WTA data was aberrational. The court will consider each of these in turn.

1. Numerical Differences: First, Trust Chem avers that the fact that one surrogate value was “50 times greater” than the other should have signaled that the values needed more “careful scrutiny[.]” Id. at 8. Thus, Plaintiff argues that Commerce should have used Plaintiff's preferred surrogate value calculation, the Chemical Weekly data of $215.31, instead of the aberrational WTA data. Id....