Yangzhou Bestpak Gifts & Crafts Co. v. United States

• Decision Date: 26 July 2011
• Docket Number: Slip Op. 11–90.Court No. 10–00295.
• Citation: 783 F.Supp.2d 1343
• Parties: YANGZHOU BESTPAK GIFTS & CRAFTS CO., LTD., Plaintiff,v.UNITED STATES, Defendant,andBerwick Offray LLC, Defendant–Intervenor.
• Court: U.S. Court of International Trade

783 F.Supp.2d 1343

YANGZHOU BESTPAK GIFTS & CRAFTS CO., LTD., Plaintiff,

v.UNITED STATES, Defendant,andBerwick Offray LLC, Defendant–Intervenor.

Slip Op. 11–90.Court No. 10–00295.

United States Court of International Trade.

July 26, 2011.

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP (Bruce M. Mitchell, Mark E. Pardo, and Andrew T. Schutz), for Plaintiff Yangzhou Bestpak Gifts & Crafts Co., Ltd.Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Renee Gerber); and Scott D. McBride, U.S. Department of Commerce, Of Counsel, for Defendant United States.Pepper Hamilton LLP (Gregory C. Dorris), for Defendant–Intervenor Berwick–Offray LLC.

OPINION & ORDER

BARZILAY, Senior Judge:

Plaintiff Yangzhou Bestpak Gifts & Crafts Co., Ltd. (“Plaintiff” or “Bestpak”) challenges a certain methodology used by the U.S. Department of Commerce (“the Department” or “Commerce”) to calculate the separate rate margin in Narrow Woven Ribbons With Woven Selvedge From the People's Republic of China, 75 Fed.Reg. 41,808 (Dep't of Commerce July 19, 2010) (“ Final Determination”), as amended Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China, 75 Fed.Reg. 51,979 (Dep't of Commerce Aug. 24, 2010) (amended final determination). First, Plaintiff avers that the methodology used by Defendant does not accord with law. Pl.'s Br. 8–22. Bestpak next argues that Commerce did not support with substantial evidence the calculated separate rate, where the agency used a simple average of the adverse facts available rate and the de minimis rate assigned, respectively, to the two mandatory respondents. Pl.'s Br. 8–22. Defendant counters that the Department reasonably interpreted the relevant statutory provisions and that the selected methodology comports with law.¹ Def.'s Br. 8–22. For the reasons below, the court finds that Commerce's use of a simple average of a zero or de minimis rate with a rate based on adverse facts available to calculate a separate rate accords with law. Nevertheless, the court also holds that in this instance the agency did not support with substantial evidence the separate rate calculated for Bestpak.

I. Background

On August 6, 2009, Commerce initiated an antidumping duty investigation of narrow woven ribbons from the People's Republic of China and Taiwan for the period spanning January 1 to June 30, 2009. See Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China and Taiwan, 74 Fed.Reg. 39,291, 39,292 (Dep't of Commerce Aug. 6, 2009) (initiation of investigations). At that time, Commerce issued quantity and data value questionnaires to all known Chinese exporters and producers for the purpose of selecting mandatory respondents. Id. at 39,296. After Commerce received responses from nineteen companies, including Bestpak, Commerce decided that “it would not be practicable to determine individual dumping margins for each known exporter and/or producer....” Resp't Selection Mem. (Sept. 11, 2009), Pub. Doc. 94 at 3. Accordingly, Commerce selected the two largest exporters and producers of the subject merchandise as mandatory respondents: Ningbo Jintian Import & Export Co., Ltd. (“Ningbo Jintian”) and Yama Ribbons & Bows Co., Ltd. (“Yama”). Pub. Doc. 94 at 3. Ningbo Jintian's former counsel withdrew their appearance on September 17, 2009, and shortly thereafter informed Commerce that the antidumping questionnaire had been forwarded to Ningbo Jintian. Mem. to the File re: Antidumping Duty Investigation on Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China: Ningbo Jintian (Oct. 6, 2009), Pub. Doc. 109 at 1 (discussing Ningbo Jintian telephone conversation). The company “failed to submit responses to any section of the Department's antidumping questionnaires.” Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China, 75 Fed.Reg. 7,244, 7,245 (Dep't of Commerce Feb. 18, 2010) (“ Preliminary Determination ”). Yama, the other mandatory respondent, participated fully throughout the investigation. See id. Bestpak filed a separate rate application to establish its de jure and de facto independence, since Commerce presumes government control of entities in non-market economy investigations. See Bestpak Separate Rate Application (Oct. 5, 2009), Pub. Doc. 102 at 1–21. Notably, Bestpak did not apply to be a voluntary respondent at any time during the investigation. Issues and Decision Mem. (July 12, 2010), Pub. Doc. 382 at 21–22.

Commerce issued its preliminary determination on February 18, 2010. Preliminary Determination, 75 Fed.Reg. at 7,244. Commerce assigned Yama a de minimis margin and determined that Ningbo Jintian operated as part of the China-wide entity because the company “failed to demonstrate that it operates free of government control.” Id. at 7,250, 7,253. Additionally, because Ningbo Jintian failed to provide the required information, Commerce applied adverse facts available to calculate the company's dumping margin. Id. at 7,250–51. Commerce corroborated Ningbo Jintian's adverse facts available rate by comparing it to “model-specific margins” found for Yama to ensure that it fell within the purportedly acceptable range of selected weighted-average margins.² Id. at 7,251; Final Corroboration Mem. (July 12, 2010), Pub. Doc. 376 at 2, Conf. Doc. 375 at 2. With respect to the separate rate, Commerce averaged the de minimis rate of Yama and the adverse facts available rate assigned to Ningbo Jintian. Preliminary Determination, 75 Fed.Reg. at 7,249. In effect, the resulting separate rate equaled one half of the adverse facts available rate. Id.

Commerce issued its final determination on July 19, 2010. See Final Determination, 75 Fed.Reg. at 41,808. In the final results, Commerce confirmed the de minimis rate and the adverse facts available rate previously assigned to Yama and Ningbo Jintian, respectively. Id. at 41,811–12. Commerce calculated a final adverse facts available rate of 247.65% for Ningbo Jintian. Id. at 41,812. Commerce once again calculated the separate rate by averaging Ningbo Jintian's adverse facts available rate and the de minimis rate calculated for Yama, which resulted in a separate rate of 123.83% for Bestpak. Id. The Department explained its justification for assigning such a rate to Bestpak by noting that the statute and legislative history “explicitly permit[ ] such averaging.” Issues and Decision Mem., Pub. Doc. 382 at 19. Commerce also noted that it could not investigate an additional respondent due to time restraints and limited resources, and that alternative calculations suggested by Bestpak did not more accurately reflect potential dumping margins. Issues and Decision Mem., Pub. Doc. 382 at 21–23.

II. Subject Matter Jurisdiction & Standard of Review

The Court has exclusive jurisdiction over any civil action commenced under section 516A of the Tariff Act of 1930, codified and amended as 19 U.S.C. § 1516a(a)(2)(B)(i). 28 U.S.C. § 1581(c). In reviewing Commerce's antidumping duty determination, the court will hold unlawful any determination “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” § 1516a(b)(1)(B)(i).

To ascertain whether Commerce's determination accords with law, the court turns to the two-part test articulated by the Supreme Court in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). First, the court must determine whether Congress directly spoke to the precise question at issue and clearly expressed its purpose and intent in the governing statute. Id. at 842–43, 104 S.Ct. 2778. In so doing, the Court employs traditional tools of statutory construction, looking first to the plain meaning of the statutory text. See id. at 843 n. 9, 104 S.Ct. 2778. The court also may look to the statute's structure and legislative history. Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed.Cir.1998).

If the statute does not clearly answer the relevant question, then the court must turn to the second step and decide whether the agency's interpretation amounts to a permissible construction of the statute. Chevron, U.S.A., Inc., 467 U.S. at 843, 104 S.Ct. 2778. In deciding whether the agency acted within its discretionary authority to interpret the intention and purposes of the law, the court must discern whether the Department offered a “sufficiently reasonable” interpretation of the statute. Zenith Radio Corp. v. United States, 437 U.S. 443, 450–51, 98 S.Ct. 2441, 57 L.Ed.2d 337 (1978) (citing Train v. Natural Res. Def. Council, Inc., 421 U.S. 60, 75, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975)); accord Am. Lamb Co. v. United States, 785 F.2d 994, 1001 (Fed.Cir.1986) (“Though a court may reject an agency interpretation that contravenes clearly discernible legislative intent, its role when that intent is not contravened is to determine whether the agency's interpretation is ‘sufficiently reasonable.’ ” (citation omitted)). To survive judicial scrutiny, Commerce's interpretation need not be “the only reasonable interpretation or even the most reasonable interpretation.” Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994). Importantly, the Court will defer to a reasonable interpretation even where the Court might have adopted a different interpretation. Chevron, 467 U.S. at 843 n. 11, 104 S.Ct. 2778.

In deciding whether Commerce supports its determination with substantial evidence, the court must look to whether the agency offered “more than a mere scintilla” of relevant proof. Univ. Camera Corp. v. N.L.R.B., 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (citation omitted). Substantial evidence amounts to “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion” in light of the entire record, including...