Ajinomoto N. Am., Inc. v. United States

AJINOMOTO NORTH AMERICA, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 17 - 48 Court No. 14-00351

UNITED STATES COURT OF INTERNATIONAL TRADE

April 25, 2017

Opinion & Order

[Plaintiff's motion for judgment on the agency record, contesting surrogate-value determinations based thereon, granted in part; remanded to the International Trade Administration.]

Iain R. McPhie, Peter J. Koenig, and Nicholas Galbraith, Squire Patton Boggs (US) LLP, Washington, D.C., for the plaintiff.

Alexander O. Canizares, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C.; Aman Kakar, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of counsel; for the defendant.

AQUILINO, Senior Judge: This action challenges determinations of the International Trade Administration, U.S. Department of Commerce ("ITA") sub nom. Monosodium Glutamate From the People's Republic of China: Final Determination of Sales at Less Than Fair Value and the Final Affirmative Determination of Critical Circumstances, 79 Fed.Reg. 58326 (Sept. 29, 2014), Public Record Document ("PDoc") 279 ("Final Determination"); Monosodium Glutamate From the People's Republic of China . . . : Antidumping Duty Orders; and . . . Amended Final Determination of Sales at Less Than Fair Value, 79 Fed.Reg. 70505 (Nov. 26, 2014), PDoc 270; and Monosodium Glutamate From the People's Republic of China: Second Amended Final Determination of Sales at Less Than Fair Value and Amended Antidumping Duty Order, 80 Fed.Reg. 487 (Jan. 6, 2015). The plaintiff U.S. manufacturer of monosodium glutamate ("MSG") and petitioner below has interposed a motion for judgment on the agency record in accordance with USCIT Rule 56.2 on its complaint, confirming jurisdiction of this court pursuant to 19 U.S.C. §§ 1516a(a)(2)(A)(i)(II) and (2)(B)(i) and 28 U.S.C. §1581(c).

ITA is directed by statute, 19 U.S.C. §1677b(c)(1), to seek surrogate values for the factors of production ("FOPs") for subject merchandise produced in or exported from a non-market economy a la the People's Republic of China ("PRC"). The plaintiff alleges error in such valuations herein of corn, lignite, high-protein scrap from sugar manufacture, and inland freight (including alleged error in ITA's rejection of factual information relating thereto).

I

With regard to the corn FOP, ITA's preliminary determination based it upon the actual weight of corn consumption by "Meihua"¹, the proceeding's mandatory respondent. See Prelim. Analysis Memo (May 7, 2014), CDoc 109, at 7-8, 303. For the Final Determination, the agency used Meihua's standard weight of corn consumption rather than the actual weight. See Meihua Analysis Memo for the Final Determination (Sept. 22, 2014), PDoc 257, at 5. See also Allegation of Ministerial Errors Memo (Nov. 20, 2014), PDoc 266, at 2. The plaintiff argues this amounted to deviation from ITA's policy of calculating surrogate values based upon producers' actual production experiences.

Without conceding error, the defendant requests voluntary remand in order to consider this argument in the first instance. As its "concern" appears "substantial and legitimate", see SKF USA Inc. v. United States, 254 F.3d 1022, 1029 (Fed.Cir. 2001), the request for that purpose can be, and it hereby is, granted.

II

The plaintiff challenges ITA's reliance upon "coalspot.com" to value the lignite FOP by Meihua. It argues that those data are flawed because they (1) reflect "estimated prices, not the required real prices"; (2) are derived from "Indonesian coal reference prices"; (3) are export prices "while [agency] precedent is to use domestic or import prices", and (4) are not clearly exclusive of taxes. The plaintiff also argues ITA should have used Indonesian import price data under HTS 2702.10 or similar import data from other countries.

Substantial evidence supports ITA's decision to rely upon coalspot.com, however. It found that those data met each of the factors of reliability it generally considers: they reflected a broad market average, were publicly available, were product specific, were exclusive of duties, and were contemporaneous with the period of investigation.² Issues and decision memorandum accompanying Final Determination ("IDM"), p. 25. ITA consideredthe lack of clarity as to whether the data excluded taxes and determined that they were nevertheless the best available record information, based upon its consideration of all of the factors. See id.

The plaintiff argues that the coalspot.com data are "estimates", contending they are "based not on real prices". However, ITA found a notation on the coalspot.com printout in the record to indicate that the prices therein "constitute coal prices for spot sales", i.e., prices based on actual sales in March 2014. See Meihua's Surrogate Country and Surrogate Value Cmts (April 7, 2014), PDoc 126, at Ex. 9, p. 5.

Plaintiff's position focuses primarily on ITA's contrary analysis in Certain Polyester Staple Fiber from the People's Republic of China, 78 Fed.Reg. 2366 (Jan. 11, 2013), I&D Memo (Jan. 4, 2013) at cmt. 1 ("Polyester Staple Fiber"), a previous antidumping-duty investigation, asserting that using coalspot.com is contrary to its valuation of Indonesian steam coal therein. In that matter, the agency calculated a surrogate value for steam coal used to produce synthetic staple fibers. See PDoc 145. Noting that it prefers actual transaction prices, ITA declined to use prices sourced from the Indonesia Minister of Energy and Mineral Resources of the Republic of Indonesia (ESDM), which "contains information from international benchmark steam coal indexes and certain brand name prices, rather than actual transactions involving parties in Indonesia . . . and some of the ESDM values appear to be derived from government indexes based on non-Indonesian reference values". Id. at 5-6. ITA thereupon concluded that Global Trade Atlas data were the best information available. Id.

Here, the defendant responds that the agency did not specifically consider coalspot.com in Polyester Staple Fiber and that, although those data regarding lignite were sourced from Indonesia's Director General of Mineral and Coal, it is unclear whether they are substantively equivalent to the ESDM data related to steam coal in Polyester Staple Fiber. The defendant thus contends there is no clear basis to assume that ITA's concerns about the ESDM data would or should extend to the coalspot.com data at bar.

The plaintiff considers this dissembling, arguing that the coalspot.com data suffer from precisely the same flaws as did the pricing data ITA rejected in Polyester Staple Fiber, to wit, the reported price is calculated "based on January 2013 HBA/HPB Index", the source is identified as "The Directorate General of Mineral, Coal and Geothermal, Ministry of Energy and Mineral Resources" (i.e., ESDM), and HBA is defined as an average of "four international coal indices" (i.e., non-Indonesian reference values), including ICI 1, Platts 5900, New Castle Export Index, and Global Coal New Castle Index.

Be that as it may, notwithstanding the disadvantages of the ESDM data identified in Polyester Staple Fiber as compared with actual transactions, ITA did not declare that it would never use international indexes and company-specific brand prices. Suffice it to state here that there are imperfections in the available data of record, and it was not unreasonable for the agency to prefer coalspot.com as sufficiently reliable when compared to other data. The plaintiff suggests that ITA always prefers import prices, however there is administrative precedent for using export prices as the "best" information available, and the use of export prices here was within its discretion. See, e.g., Certain Cut-to-Length Carbon Steel Plate from Romania, 70 Fed.Reg. 12651 (March 15, 2005) (final admin. review), and accompanying I&D Memo at cmt. 3.

Similarly, ITA's rationale as to why it did not use the 2012 Indonesian import data for HTS 2702.10 urged by the plaintiff is supported by substantial evidence. It noted that those data were not contemporaneous with the period of investigation (indeed, Indonesia apparently had no imports under HTS 2702.10 in 2013). The defendant notes that, although not dispositive, contemporaneity of data is an important factor when evaluating surrogate values. Def's Resp. at 19, referencing Certain Polyester Staple Fiber From The People's Republic of China, 75 Fed.Reg. 1336 (Jan. 11, 2010) and accompanying I&D Memo at cmt. 1.

Perhaps more tellingly, the lignite imported into Indonesia in 2012 under HTS 2702.10 consisted in total volume to the equivalent of a single shipment³ of 3.28 metric tons (MT), see IDM at 26, which low volume is consistent with the fact that Indonesia is a large domestic producer of that coal. See Meihua's Resubmission of Rebuttal Surrogate Country and Surrogate Value Comments (April 30, 2014), PDoc 188, Ex. 8 (Indonesia is the second largest producer of lignite). Given record evidence that that nation produces approximately 160 million MT of lignite a year, it was not unreasonable for ITA to rely upon broad and contemporaneous data instead of a single shipment of 3.28 MT of coal made before the period of investigation.

The plaintiff suggests that ITA "could have" used coal import data from other countries such as Thailand, Colombia, South Africa, or Ecuador. It contends that such secondary surrogate country data may be used "where an input cannot be valued in the selected surrogate country." Pl's Br. at 15. The court, however, cannot supplant a reasonable determination on the sufficiency of the coalspot.com data that comports with the agency's practice of preferring to value all FOPs from a single primary surrogate country whenever possible in accordance with 19 C.F.R. §351.408(c)(2). IDM at 26. See Jiaxing Bro. Fastener Co. v. United States, 38 CIT ___, ___, 11 F.Supp.3d 1326, 1332-33 (20...