Zhengzhou Harmoni Spice Co., Ltd. v. U.S.
| Decision Date | 13 May 2009 |
| Docket Number | Slip Op. 09-39. Court No. 06-00189. |
| Citation | 617 F.Supp.2d 1281 |
| Parties | ZHENGZHOU HARMONI SPICE CO., LTD., Jinan Yipin Corporation, Ltd., Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., Linshu Dading Private Agricultural Products Co., Ltd., Shanghai LJ International Trading Co., Ltd., and Sunny Import and Export Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Fresh Garlic Producers Association, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (Bruce M. Mitchell, Mark E. Pardo, Paul G. Figueroa, and William F. Marshall), for Plaintiffs Zhengzhou Harmoni Spice Co., Ltd., Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import & Export Co., Ltd.
Michael F. Hertz, Deputy Assistant Attorney General; Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division U.S. Department of Justice (Mark T. Pittman and David S. Silverbrand); Scott D. McBride, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Of Counsel; for Defendant.
Kelley Drye Collier Shannon, Washington, DC (Michael J. Coursey and Michael R. Kershow), for Defendant-Intervenors.
In this action, Plaintiffs Zhengzhou Harmoni Spice Co., Ltd., Jinan Yipin Corporation, Ltd., Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd., Linshu Dading Private Agricultural Products Co., Ltd., Shanghai LJ International Trading Co., Ltd., and Sunny Import & Export Co., Ltd.—Chinese producers and exporters of fresh garlic—contest the final results of the U.S. Department of Commerce's tenth administrative review of the antidumping duty order covering fresh garlic from the People's Republic of China ("PRC"). See Fresh Garlic from the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review and Final Results of New Shipper Review, 71 Fed.Reg. 26,329 (May 4, 2006) ("Final Results"); Issues and Decision Memorandum for the Administrative Review and New Shipper Reviews of the Antidumping Duty Order on Fresh Garlic from the People's Republic of China (April 26, 2006) (Pub. Doc. No. 462) ("Decision Memorandum").1
Pending before the Court is the Motion for Judgment on the Agency Record filed on behalf of four of the plaintiffs in this matter—Zhengzhou Harmoni Spice Co., Ltd., Jinan Yipin Corporation, Ltd., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import & Export Co., Ltd. (collectively "the Chinese Producers").2 In their motion, the Chinese Producers challenge the methodology used in calculating "normal value," as well as various other aspects of Commerce's antidumping determination, and request that this matter be remanded to the agency for reconsideration. See generally Brief in Support of Plaintiffs' Rule 56.2 Motion for Judgment on the Agency Record ( ); Reply Brief in Support of Plaintiffs' Rule 56.2 Motion for Judgment on the Agency Record ( ).3
The Government opposes the Chinese Producers' motion. The Government maintains that Commerce's determination is supported by substantial evidence and is otherwise in accordance with law, and that it should be sustained in all respects. See generally Defendant's Memorandum in Opposition to Plaintiffs' Rule 56.2 Motion for Judgment Upon the Agency Record ("Def.'s Brief").
The Defendant-Intervenors, representing the interests of domestic producers of fresh garlic, oppose the Chinese Producers' motion as to two of the seven issues raised—i.e., Commerce's use of the agency's intermediate input methodology and the valuation of garlic bulb—and, like the Government, similarly urge that Commerce's determination should be sustained. See generally Defendant-Intervenors' Brief in Response to Plaintiffs' Motion for Judgment on the Administrative Record ( ).4
Jurisdiction lies under 28 U.S.C. § 1581(c) (2000).5 For the reasons set forth below, the Chinese Producers' Motion for Judgment on the Agency Record is granted in part.
The underlying antidumping order here at issue, covering imports of fresh garlic from the PRC, dates back to 1994. See Antidumping Duty Order: Fresh Garlic from the People's Republic of China, 59 Fed.Reg. 59,209 (Nov. 16, 1994) ("Antidumping Order").6 In December 2004, Commerce initiated its tenth administrative review of producers and exporters of fresh garlic from the PRC, including the Chinese Producers who are the plaintiffs in this action. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 69 Fed.Reg. 77,181 (Dec. 27, 2004); see also Fresh Garlic from the People's Republic of China: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review and Preliminary Results of New Shipper Reviews, 70 Fed.Reg. 69,942, 69,942-43 (Nov. 18, 2005) ("Preliminary Results").7
In the course of conducting the administrative review, Commerce issued multiple questionnaires to the respondents (i.e., various Chinese garlic producers, including Plaintiffs), requesting information concerning their organization, sales, and production costs, in order to determine the normal value of the subject merchandise. See Def.'s Brief at 4. In addition, Commerce issued supplemental questionnaires to address certain questions that had been raised in previous administrative reviews concerning the respondents' reported growing and harvesting-related "factors of production." See Decision Memorandum at 2-3; see also Issues and Decision Memorandum for the Administrative Review of the Antidumping Duty Order on Fresh Garlic from the Peoples' Republic of China (Ninth Administrative Review), 2005 WL 2290660 (June 13, 2005) ("Ninth Garlic Review Memorandum"), at comment 1 (considering, and ultimately declining, use of intermediate input methodology).8
In their responses to Commerce's questionnaires, the respondents provided the agency with suggested values for their factors of production. See Respondents' Second Surrogate Value Submission (Pub.Doc. No. 418). The Domestic Producers supplied surrogate value information for the respondents' factors of production, and requested that Commerce use the agency's intermediate input valuation methodology—as the Domestic Producers had urged in prior reviews—due to asserted "anomalies and inconsistencies in the . . . data submitted by all of the respondents." Def. Ints.' Brief at 3; see also Domestic Producers' Surrogate Value Submission (Pub. Doc. No. 82); Domestic Producers' Second Surrogate Value Submission (Pub.Doc. No. 143) (submitting information from previous reviews comparing respondents' ranged factors of production data); Ninth Garlic Review Memorandum, 2005 WL 2290660, at comment 1.9
Given the concerns expressed in prior reviews as to the reliability of respondents' records, Commerce conducted onsite "harvest verifications" of six respondents in May and June 2005, to assist the agency in determining whether to value intermediate inputs rather than factors of production. See Preliminary Results, 70 Fed.Reg. at 69,943; see also Harvest Verification Reports (Pub.Doc.Nos.386, 392, 393). Unlike typical verifications, where Commerce focuses on respondents' books and records (i.e., general ledgers, subledgers, etc.), these harvest verifications involved onsite visits to allow agency personnel to directly observe respondents' actual cultivation and harvesting procedures. See Decision Memorandum at 2-3; see also Def.'s Brief at 5.
In its Preliminary Results, Commerce concluded that "the books and records maintained by the [Chinese garlic producers] do not report or account for all of the relevant information and do not allow the respondents to identify all of the factors of production necessary to grow and harvest garlic." See Preliminary Results, 70 Fed. Reg. at 69,949. Commerce therefore used its intermediate input method of valuation for the respondents' growing and harvesting factors of production, and valued the intermediate input, raw garlic bulb (in lieu of the upstream factors of production used to produce that input), in calculating respondents' dumping margins. Commerce's Final Results similarly reflected the agency's use of its intermediate input methodology to value raw garlic bulb, after again finding respondents' data inadequate. See generally Decision Memorandum at 11-22.
While Commerce found the harvesting factors of product data insufficient, Commerce found respondents' reported data on their post-harvesting factors of production (i.e., processing, packaging, shipping) to be reliable, both in the Preliminary Results and in the Final Results. The agency therefore added the surrogate values for those factors of production to the surrogate value of the raw garlic bulb inputs. See Decision Memorandum at 14; see also generally Final Results, 71 Fed.Reg. 26,329.
In reviewing Commerce's final determination in an antidumping case, the agency's determination must be upheld, except to the extent that it is found to be "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i); see also NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed.Cir.2009). Substantial evidence is "more than a mere scintilla"; rather, it is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. Nat'l Labor Relations Bd., 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consol. Edison Co. v. Nat'l Labor Relations Bd., 305 U.S. 197, 229, 59 S.Ct. 206, 83...
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