Zhejiang Native Produce & Animal By-Products Import & Export Group Corp. v. United States, 060117 USCIT, 04-00268

Court:Court of International Trade
Attorney:Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, NY, argued for plaintiff. With him on the brief were Bruce M. Mitchell and Andrew T. Schutz. Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washi...
Opinion Judge:Richard K. Eaton, Judge.
Party Name:ZHEJIANG NATIVE PRODUCE & ANIMAL BY-PRODUCTS IMPORT & EXPORT GROUP CORP., Plaintiff, v. UNITED STATES, Defendant, and THE AMERICAN HONEY PRODUCERS ASSOCIATION and THE SIOUX HONEY ASSOCIATION, Defendant-Intervenors. Slip Op. 17-65
Case Date:June 01, 2017
Docket Nº:04-00268
 
FREE EXCERPT

ZHEJIANG NATIVE PRODUCE & ANIMAL BY-PRODUCTS IMPORT & EXPORT GROUP CORP., Plaintiff,

v.

UNITED STATES, Defendant,

and

THE AMERICAN HONEY PRODUCERS ASSOCIATION and THE SIOUX HONEY ASSOCIATION, Defendant-Intervenors.

Slip Op. 17-65

No. 04-00268

Court of Appeals of International Trade

June 1, 2017

          Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of New York, NY, argued for plaintiff. With him on the brief were Bruce M. Mitchell and Andrew T. Schutz.

          Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General; Jeanne E. Davidson, Director; Reginald T. Blades, Jr., Assistant Director; and Nanda Srikantaiah, Of Counsel, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

          Michael J. Coursey and Joshua R. Morey, Kelley Drye & Warren LLP, of Washington, DC, argued for defendant-intervenors. With them on the brief was R Alan Luberda.

          OPINION

          Richard K. Eaton, Judge.

         Eaton, Judge: This case involves the final results of the first administrative review of the antidumping duty order on honey from the People's Republic of China ("PRC"). Honey From the PRC, 69 Fed. Reg. 25, 060 (Dep't Commerce May 5, 2004) (final results), PR 113 and accompanying Issues and Decision Mem. (Apr. 28, 2004), PR 107 ("Decision Mem."), as amended by 69 Fed. Reg. 32, 494 (Dep't Commerce June 10, 2004), PR 118, ECF No. 100 (collectively, "Final Results"). Before the court are the United States Department of Commerce's ("Commerce" or the "Department") Final Results of Redetermination after remand. See Final Results of Redetermination Pursuant to Remand (Feb. 10, 2016), ECF No. 83 ("Remand Results").

         Plaintiff Zhejiang Native Produce & Animal By-Products Import & Export Group Corp. ("plaintiff or "Zhejiang") challenges Commerce's determination of the normal value of honey exported to the United States by Zhejiang during the period covered by the review. Plaintiff argues that Commerce unreasonably failed to use the best available information on the record to calculate the surrogate value of Zhejiang's raw honey input. Plaintiff also contests Commerce's adjustment of the raw honey price to account for inflation during the covered period. Finally, plaintiff maintains that Commerce unreasonably failed to average the 2001-2002 and 2002-2003 financial statements of an Indian honey cooperative when calculating surrogate financial ratios. See PL's Cmts. Remand Results, ECF No. 90 ("PL's Cmts.") at 1-3.

         The United States Government ("defendant" or the "Government"), on behalf of Commerce, argues that the Remand Results are reasonable, supported by the record, and should be sustained. See Defi's Reply Cmts. Remand Results, ECF No. 99 ("Defi's Reply"). Defendant-intervenors the American Honey Producers Association and the Sioux Honey Association (collectively, "defendant-intervenors") join the defendant in urging the court to sustain the Remand Results. See Def.-Ints.' Cmts. Remand Results, ECF No. 89; Def.-Ints.' Reply PL's Cmts. Remand Results, ECF No. 97.

         The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012) and 19 U.S.C. § l5l6a(a)(2)(B)(i) (2012).1 For the reasons set forth below, the court sustains the Remand Results.

         BACKGROUND

         In January 2003, Commerce initiated the first administrative review of the antidumping duty order on honey from the PRC. See Initiation of Antidumping and Countervailing Duty Admin. Revs, and Req. for Revocation in Part, 68 Fed. Reg. 3009 (Dep't Commerce Jan. 22, 2003) (notice). The period of review covered the period of February 10, 2001, though November 30, 2002 ("Original POR"). Decision Mem. at 3.

         Because the PRC is a nonmarket economy country, Commerce determined normal value for Zhejiang's sales during the Original POR using the factors of production methodology provided for in 19 U.S.C. § l677b(c). Commerce selected India as the source of surrogate data to value Zhejiang's factors of production, including raw honey, and to calculate financial ratios.

         To value raw honey, Commerce used an average of raw honey prices from a March 2000 article entitled "Apiculture, a major foreign exchange earner" that was published in the Tribune of India, an English language daily newspaper headquartered in Chandigarh, India (the "March 2000 Tribune article" or the "2000 article"). Decision Mem. at 9. The 2000 article indicated that the sale price of honey in India ranged from Rs. 25 to Rs. 45 per kilogram. See Final FOP Mem. for Zhejiang (Apr. 28, 2004), PR 1288, ECF No. 92 (citing Prelim. FOP Mem. for Zhejiang (Dec. 10, 2003), Attach. 3, PR 858, ECF No. 92 ("Prelim. FOP Mem.")). Commerce chose the 2000 article as the source of surrogate data instead of another article from the Tribune of India, proposed by plaintiff, which was published in March 2001 (the "March 2001 Tribune article" or the "2001 article"). Decision Mem. at 21. The 2001 article, titled "Honey no longer a sweet business, " indicated that the production cost of honey in India was approximately Rs. 23 per kilogram, and the procurement price was Rs. 24 per kilogram-i.e., lower than the range of prices in the March 2000

Tribune article. See Decision Mem. at 6. Commerce determined that the 2000 article was the best information available because it was public, specific to the Indian honey industry, and representative of the honey industry throughout India. Decision Mem. at 10. Using the prices in that article, Commerce calculated an average raw honey price of Rs. 35 per kilogram. See Prelim. FOP Mem. at 2.

         Next, Commerce adjusted the average raw honey price (Rs. 35 per kilogram) to reflect what the price would have been during the Original POR, applying its inflation methodology. See Prelim. FOP Mem. at 2-3. Under this methodology, the Department adjusted the price using information in the record, including wholesale price indices ("WPI") for India published in selected issues of the International Monetary Fund's International Financial Statistics and the raw honey purchase prices paid by two Indian honey processors, Jallowal Bee Farm and Tiwana Bee Farm. Prelim. FOP Mem. at 2; Decision Mem. at 16. Commerce found that the Jallowal and Tiwana pricing information demonstrated that there were price increases during a portion of the

         Original POR, i.e., December 2001 to May 2002, that exceeded the general rate of inflation.2 See Decision Mem. at 16. Accordingly, Commerce used the Jallowal and Tiwana pricing information to account for the observed price increases. Decision Mem. at 16 ("[I]n order to account for these significant raw honey price increases and consistent with our finding in Wuhan's Final Results, we find it appropriate and necessary to inflate the average raw honey price derived from pricing information in the March 2000 Tribune article, using [the Jallowal and Tiwana] documented purchase prices.").

         To calculate surrogate financial ratios, Commerce used Mahabaleshwar Honey Production Cooperative Society, Ltd.'s ("MHPC") 2001-2002 financial statement as a source of data regarding factory overhead, selling, general, and administrative expenses ("SG&A"), and profit. Decision Mem. at 19. In doing so, it declined to use MHPC's 2002-2003 financial statement, as proposed by Zhejiang, because Commerce found that the 2001-2002 financial statement was more specific, reliable, and contemporaneous with the Original POR than MHPC's 2002-2003 financial statement. Decision Mem. at 19. Based on its findings in the Final Results, Commerce assigned Zhejiang an antidumping duty margin of 67.70 percent. Honey From the PRC, 69 Fed. Reg. at 32, 495.

         After the publication of the Final Results, Commerce amended the record to add eleven public documents received in response to a Freedom of Information Act request ("New Information"). See Amendment to Admin. R. in Ct. No. 04-00268 (Nov. 19, 2004), ECF No. 28 ("Amended Record"). The documents, which were not part of the underlying administrative record, included correspondence between Commerce and the authors of articles published in the Tribune of India, as well as communications with Indian agricultural and honey specialists.

         In July 2004, plaintiff commenced suit in this Court contesting the Final Results. In February 2005, defendant-intervenors filed a motion to dismiss plaintiffs action for lack of jurisdiction, which the court denied. See Zhejiang Native Produce & Animal By-Prods. Imp. & Exp. Group Corp. v. United States, 29 CIT 1300, 400 F.Supp.2d 1374 (2005). Subsequently, the court stayed this action pending the final disposition of Court No. 02-00057, a case in which Zhejiang challenged, among other things,...

To continue reading

FREE SIGN UP