Yantai CMC Bearing Co. v. United States, Slip Op. 17–7

• Decision Date: 30 January 2017
• Docket Number: Slip Op. 17–7,Court No. 16–00011
• Citation: 203 F.Supp.3d 1317
• Parties: YANTAI CMC BEARING CO. LTD., Plaintiff, v. UNITED STATES, Defendant, The Timken Company, Defendant–Intervenor.
• Court: U.S. Court of International Trade

203 F.Supp.3d 1317

YANTAI CMC BEARING CO. LTD., Plaintiff,

v.UNITED STATES, Defendant,The Timken Company, Defendant–Intervenor.

Slip Op. 17–7

Court No. 16–00011

United States Court of International Trade.

January 30, 2017

Edmund W. Sim , Kelly A. Slater , and Jay Y. Nee , Appleton Luff Pte Ltd., of Washington DC, for plaintiff.

Tara K. Hogan , Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Claudia Burke , Assistant Director. Of Counsel on the brief was Shelby M. Anderson , Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

William A. Fennell , Terence P. Stewart and Patrick J. McDonough , Stewart and Stewart, of Washington DC, for defendant-intervenor.

OPINION

Barnett, Judge:

In this action Yantai CMC Bearing Co. Ltd. ("Yantai CMC" or Plaintiff") challenges the final results of the U.S. Department of Commerce ("Commerce") in its administrative review of the antidumping duty order on tapered roller bearings from the People's Republic of China ("PRC" or "China") for the June 1, 2013, to May 31, 2014, period of review ("POR"). Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China, 81 Fed. Reg. 1,396 (Dep't Commerce Jan. 12, 2016) (final results of the antidumping duty admin. review; 2013–2014) ("Final Results"), Public Joint Appendix ("PJA") Tab 17, ECF No. 39; Public Admin. R. ("PR") 235, ECF No. 21–1, and accompanying Issues and Decision Mem. , A–570–601 (Jan. 4, 2016) ("I & D Mem."), PJA Tab 16, PR 227.¹ Plaintiff argues that Commerce erred by denying Yantai CMC a separate rate and, in the alternative, that Commerce erred in assigning to Yantai CMC an antidumping duty rate based on "adverse facts available" ("AFA"). Mem. of P. & A. in Supp. of Pl. Yantai CMC Bearing Co. Ltd.'s Rule 56.2 Mot. J. on the Agency R. ("Pl.'s Mem.") at 5–15, ECF No. 28; see also Rule 56.2 Mot. for J. Upon The Agency on Behalf of Pl. Yantai CMC Bearing Co. Ltd., ECF No. 27. Defendant responds that Commerce's decision to deny Yantai CMC separate rate status is supported by substantial evidence and that assigning Yantai CMC the countrywide antidumping rate does not constitute an unlawful application of AFA. See generally Confidential Def.'s Resp. to Mot.[ ] for J. Upon the Agency R. ("Def.'s Resp."), ECF No. 30.² For the reasons detailed below, the Court denies Yantai CMC's Motion for Judgment on the Agency Record.

BACKGROUND

On February 3, 2014, Commerce initiated an administrative review of the antidumping duty order on tapered roller bearings for the June 1, 2013 to May 31, 2014, POR. Initiation of Antidumping and Countervailing Duty Admin. Reviews , 79 Fed. Reg. 44,390 (Dep't Commerce July 31, 2014), PJA Tab 1, PR 12. Yantai CMC was selected as a mandatory respondent. Respondent Selection Mem. at 8, PJA Tab 2; PR 19; Confidential Joint Appendix ("CJA") Tab 1, ECF No. 38; Confidential Admin. R. ("CR") 6, ECF No. 21–2.³

Commerce preliminarily determined that Yantai CMC had failed to rebut the presumption of government control. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China , 80 Fed. Reg. 38,665, 38,666 (Dep't Commerce July 7, 2015) (prelim. results of antidumping duty admin. review), PJA Tab 12, PR 213. Commerce, therefore, assigned Yantai CMC the countrywide rate of 92.84 percent. Id. at 38,666. In the final results, Commerce confirmed this finding. Final Results, 81 Fed. Reg. at 1,396 –97. In its Issues & Decision Memorandum , Commerce explained that Yantai CMC had "demonstrated a lack of de jure control" but it "[did] not satisfy the criteria demonstrating an absence of de facto government control over export activities."⁴ I & D Mem. at 32–33; see also Separate Rate Analysis for Yantai CMC Bearing Co., Ltd. ("Separate Rate Mem."), CJA Tab 9, CR 452.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),⁵ and 28 U.S.C. § 1581(c).

The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ "

Huaiyin Foreign Trade Corp. (30) v. United States , 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB , 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). It " ‘requires more than a mere scintilla," but "less than the weight of the evidence." Nucor Corp. v. United States , 34 C.I.T. 70, 72, 675 F.Supp.2d 1340, 1345 (2010) (quoting Altx, Inc. v. United States , 370 F.3d 1108, 1116 (Fed. Cir. 2004) ). The fact that a plaintiff can point to evidence that detracts from the agency's conclusion or that there is a possibility of drawing two inconsistent conclusions from the evidence does not preclude the agency's finding from being supported by substantial evidence. Matsushita Elec. Indus. Co. v. United States , 750 F.2d 927, 933 (Fed. Cir. 1984) (citing Consolo v. Fed. Mar. Comm'n , 383 U.S. 607, 619–20, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) ). The court may not "reweigh the evidence or ... reconsider questions of fact anew." Downhole Pipe & Equip., L.P. v. United States , 776 F.3d 1369, 1377 (Fed. Cir. 2015) (quoting Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB , 975 F.2d 807, 815 (Fed. Cir. 1992) ); see also Usinor v. United States , 28 C.I.T. 1107, 1111, 342 F.Supp.2d 1267, 1272 (2004) (citation omitted) (the court "may not reweigh the evidence or substitute its own judgment for that of the agency").

DISCUSSION

I. Legal Framework for Separate Rate Status in Proceedings Involving Non–Market Economy Countries

In antidumping duty proceedings involving a country that Commerce considers to have a nonmarket economy ("NME"), including China, Commerce employs a rebuttable presumption that all enterprises operating within the NME country are controlled by the government. Jiangsu Jiasheng Photovoltaic Tech. Co., Ltd. v. United States ("Jiangsu Jiasheng II "), 39 CIT ––––, ––––, 121 F.Supp.3d 1263, 1266 (2015) ; see also Huaiyin Foreign Trade Corp., 322 F.3d at 1372 ("[A]s it has done in previous investigations, the Department adopted in this proceeding a presumption that the PRC was an [NME] country pursuant to 19 U.S.C. § 1677(18)(A), requiring companies desiring an individualized antidumping duty margin to so request and to demonstrate an absence of state control."); Sigma Corp. v. United States, 117 F.3d 1401, 1405 (Fed. Cir. 1997) (reviewing and affirming Commerce's use of the NME presumption). Commerce assigns each exporter of subject merchandise a single countrywide rate, unless the "exporter can affirmatively demonstrate an absence of government control, both in law (de jure ) and in fact (de facto )" over its export-related activities. Jiangsu Jiasheng II , 39 CIT at ––––, 121 F.Supp.3d at 1266 ; see also Sigma Corp. 117 F.3d at 1405 ("no manufacturer would receive a separate antidumping duty rate unless it could demonstrate that it enjoyed both de jure and de facto independence from the central government"). The exporter of subject merchandise bears the burden of showing it is autonomous of government control. AMS Assoc., Inc. v. United States , 719 F.3d 1376, 1379–80 (Fed. Cir. 2013) ; see also Sigma Corp. , 117 F.3d at 1405–06 (Commerce's decision to place burden on exporters is justified because exporters have best access to information) (citing Zenith Elecs. Corp. v. United States , 988 F.2d 1573, 1583 (Fed. Cir. 1993) ).

To establish whether an exporter is eligible for a separate rate, Commerce applies a test it first set forth in Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China , 56 Fed. Reg. 20,588, 20,589 (Dep't Commerce May 6, 1991), and modified in Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China , 59 Fed. Reg. 22,585, 22,586 –87 (Dep't Commerce May 2, 1994); see also Policy Bulletin on the Topic of Separate–Rates Practice and Application of Combination Rates in Antidumping Investigations involving Non–Market Economy Countries (April 5, 2005) ("Policy Bulletin 05.1") at 1–2, available at http://enforcement.trade.gov/policy/bull05–1.pdf (last visited January 23, 2017) (restating the de jure and de facto criteria). Only Commerce's finding pursuant to the de facto test is challenged here.⁶

To determine whether an exporter is free of de facto government control, Commerce considers four factors: (i) whether export prices are set by or subject to the approval of a governmental authority; (ii) whether the exporter has authority to negotiate and sign contracts and other agreements; (iii) whether the exporter has autonomy from the government in making decisions regarding the selection of its management; and (iv) whether the exporter retains the proceeds of its export sales and makes independent decisions regarding the disposition of profits or financing of losses. See Policy Bulletin 05.1 at 2; see also Jiangsu Jiasheng Photovoltaic Technology Co., Ltd. v. United States ("Jiangsu Jiasheng I "), 38 CIT ––––, ––––, 28 F.Supp.3d 1317, 1349 (2014).

II. Commerce's Finding that Yantai Did Not Rebut the Presumption of State Control is Supported by Substantial Evidence

The court will uphold a Commerce determination provided it is based on substantial evidence. 19 U.S.C. § 1516a(b)(1)(B)(i). Plaintiff argues that Commerce's denial of separate rate status ignored record evidence of Yantai CMC's autonomy from Chinese government control and that Commerce, in effect, applied an irrebuttable presumption of control when...