Xiping Opeck Food Co. v. United States

Decision Date17 December 2021
Docket NumberSlip Op. 21-169,Consol. Court No. 19-00202
Citation551 F.Supp.3d 1339
Parties XIPING OPECK FOOD CO., LTD., et al., Plaintiffs, and Yancheng Hi-King Agriculture Developing Co., Ltd., Consolidated Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Yingchao Xiao, Lee & Xiao, of San Marino, CA, argued for Plaintiffs Xiping Opeck Food Co., Ltd., et al.

Adams C. Lee, Harris Bricken McVay Sliwoski, LLP, of Seattle, WA, argued for Consolidated Plaintiff Yancheng Hi-King Agriculture Developing Co., Ltd.

Mollie L. Finnan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Brendan Saslow, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

OPINION

Eaton, Judge:

This case involves the final results of the United States Department of Commerce's ("Commerce" or the "Department") administrative review of the antidumping duty order on freshwater crawfish tail meat from the People's Republic of China ("China") covering the period of September 1, 2017, through August 31, 2018. See Freshwater Crawfish Tail Meat From the People's Republic of China , 84 Fed. Reg. 58,371 (Dep't Commerce Oct. 31, 2019) ("Final Results") and accompanying Issues and Decision Mem. (Oct. 25, 2019) ("Final IDM"), PR 106.

Xiping Opeck Food Co., Ltd. ("Xiping Opeck"), Nanjing Gemsen International Co., Ltd. ("Nanjing Gemsen"), Xuzhou Jinjiang Foodstuffs Co., Ltd. ("Xuzhou Jinjiang") (collectively, "Plaintiffs"), and Yancheng Hi-King Agriculture Developing Co., Ltd. ("Consolidated Plaintiff" or "Hi-King") are Chinese producers and exporters of freshwater crawfish tail meat that participated in the underlying review and commenced this action contesting certain aspects of the Final Results. Now before the court are motions for judgment on the agency record pursuant to U.S. Court of International Trade Rule 56.2 filed by Plaintiffs and Hi-King. See USCIT R. 56.2 ; see also Pls.’ Mem. Supp. Mot. J. Agency R., ECF No. 27-2 ("Pls.’ Br."); Pls.’ Reply, ECF No. 42; Consol. Pl.’s Mem. Supp. Mot. J. Agency R., ECF No. 26 ("Consol. Pl.’s Br."); Consol. Pl.’s Reply, ECF No. 41. For the reasons set forth below, Commerce's Final Results are sustained.

BACKGROUND

On September 11, 2018, Commerce published a notice of opportunity to request an administrative review of the antidumping duty order on freshwater crawfish tail meat from China. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Req. Admin. Rev. , 83 Fed. Reg. 45,888 (Dep't Commerce Sept. 11, 2018). Plaintiffs requested a review of their sales during the period of review. See Req. for Admin. Rev. (Sept. 18, 2018), PR 2.

The Crawfish Processors Alliance also requested a review of Plaintiffs, as well as Hi-King and others. See Crawfish Processors All.’s Req. Admin. Rev. (Oct. 1, 2018), PR 6.

On November 15, 2018, Commerce published a notice of initiation of the administrative review. See Initiation of Antidumping and Countervailing Duty Admin. Revs. , 83 Fed. Reg. 57,411 (Dep't Commerce Nov. 15, 2018). Nanjing Gemsen together with Hubei Qianjiang Huashan Aquatic Food and Product Co., Ltd. ("Hubei Qianjiang") (collectively, "Mandatory Respondents") were selected for individual examination as mandatory respondents based on the volume of their exports during the period of review, pursuant to 19 U.S.C. § 1677f-1(c)(2)(B) (2018).1 See Respondent Selection for the 2017-2018 Antidumping Duty Admin. Rev. (Feb. 13, 2019) at 2, 6, PR 45.

Commerce preliminarily determined that dumping of the subject freshwater crawfish tail meat occurred during the period of review and calculated an antidumping duty rate of 7.92 percent for Nanjing Gemsen. See Freshwater Crawfish Tail Meat From the People's Republic of China , 84 Fed. Reg. 34,339, 34,340 (Dep't Commerce July 18, 2019) ("Preliminary Results") and accompanying Decision Mem. (July 11, 2019) ("PDM"), PR 84. As for Hubei Qianjiang, which is not a party to this action, Commerce calculated a rate of zero percent. See Preliminary Results, 84 Fed. Reg. at 34,340. The rates for the Mandatory Respondents were calculated by determining the normal value of each company's respective exports using the nonmarket economy method under 19 U.S.C. § 1677b(c)(1).2 In doing so, Commerce selected Malaysia as the surrogate country for valuing almost all of the Mandatory Respondents’ factors of production.3 For the main factor of production, live freshwater crawfish, however, the Department relied on Spanish import data classified under Integrated Tariff of the European Communities4 ("TARIC") subheading 0306.39.10, which covers live, fresh or chilled freshwater crawfish.5 See Surrogate Value Mem. (July 11, 2019) at 2, PR 85. Commerce chose Spain because the record did not contain any data from Malaysia.6 See Surrogate Country Mem. (July 11, 2019) at 5, PR 86. No party disputes the decision to use Spanish information.

Commerce also preliminarily determined that certain companies rebutted the presumption of de jure and de facto control7 by the Chinese government and were therefore eligible for a separate, "all-others" rate. See PDM at 6; see also Yangzhou Bestpak Gifts & Crafts Co. v. United States , 716 F.3d 1370, 1374 (Fed. Cir. 2013) (citations omitted) ("The separate rate for eligible non-mandatory respondents is generally calculated following the statutory method for determining the ‘all others rate’ under § 1673d(c)(5)(A)."). Relying on the general rule under the statute, Commerce excluded Hubei Qianjiang's zero percent rate and used Nanjing Gemsen's 7.92 percent rate as the all-others rate for the six other companies that qualified for a separate rate,8 but were not individually examined (the "Separate Rate Companies").9 See PDM at 7; see also 19 U.S.C. § 1673d(c)(5)(A).

In October 2019, Commerce published its Final Results which remained unchanged from the Preliminary Results. See Final Results, 84 Fed. Reg. at 58,371. Commerce continued to use Spanish import data under TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) for valuing the live freshwater crawfish factor of production. See id. Commerce also continued to use Nanjing Gemsen's calculated 7.92 percent rate as the all-others rate assigned to the Separate Rate Companies. See Final IDM at 4-5.

On November 18, 2019, Commerce issued liquidation instructions for the subject entries of freshwater crawfish tail meat. On November 29, 2019, Hi-King's period of review entries were liquidated. Hi-King timely filed its original complaint in this action on December 3, 2019. In its original complaint, Hi-King neither challenged Commerce's issuance of liquidation instructions nor stated that its entries had been liquidated. In fact, Hi-King did not learn that its entries had been liquidated until after its original complaint had been filed. See Consol. Pl.’s Br. 19.

Upon learning that its entries had been liquidated, Hi-King sought two orders from the court: one permitting Hi-King to amend its original complaint to add a claim challenging the Department's issuance of the liquidation instructions as premature and not in accordance with law; and another directing Commerce to instruct United States Customs and Border Protection ("CBP" or "Customs") to reset its entries to unliquidated status. See Hi-King's Mot. Leave Amend Compl., ECF No. 22; see also Hi-King's Mot. for Order Directing Its Entries Be Reset to Unliquidated Status, ECF No. 35. The court granted these motions, accepting Hi-King's amended complaint as filed and resetting its entries to unliquidated status. See Order dated Apr. 23, 2020, ECF No. 28; see also Order dated June 25, 2020, ECF No. 37.

Plaintiffs and Hi-King now challenge Commerce's Final Results. For their part, Plaintiffs argue that (1) Commerce's determination that TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) is the best available information for calculating surrogate value is neither supported by substantial evidence nor in accordance with law; and (2) Commerce unlawfully used Nanjing Gemsen's rate as the all-others rate for the Separate Rate Companies. See Pls.’ Br. 5, 10.

Hi-King, too, contests Commerce's calculation of surrogate value based on TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) and raises an additional claim challenging the Department's 15-day liquidation policy10 as unlawful. See Consol. Pl.’s Br. 5, 27.

Together, Plaintiffs and Hi-King ask the court to remand the Final Results to Commerce with instructions to (1) recalculate the surrogate value for the live freshwater crawfish factor of production using Spanish import data under TARIC subheading 0306.19.10 (frozen freshwater crawfish), instead of TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish); (2) recalculate the all-others rate using an average of the Mandatory Respondents’ calculated rates; and (3) provide further guidance on the legality of Commerce's 15-day liquidation policy. See Pls.’ Br. 5-13; Consol. Pl.’s Br. 36-37.

Defendant the United States (the "Government"), on behalf of Commerce, asks the court to sustain the Final Results and maintains that (1) valuing the Mandatory Respondents’ reported live freshwater crawfish factor of production using TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) is supported by substantial evidence and in accordance with law; (2) assigning Nanjing Gemsen's rate as the all-others rate was consistent with the requirements of the statute; and (3) because the court has granted Hi-King's consent motion directing Customs to reset its entries to unliquidated status, Hi-King's claim challenging Commerce's 15-day...

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