Coalition v. United States

633 F.Supp.3d 1286

WIND TOWER TRADE COALITION, Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 23-63 Court No. 20-03692

United States Court of International Trade

April 27, 2023

Derick G. Holt, Wiley Rein LLP, of Washington, D.C., argued for plaintiff Wind Tower Trade Coalition. On the brief were Alan H. Price, Robert E. DeFrancesco, III, Maureen E. Thorson and Laura El-Sabaawi.

Ashley Akers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant United States. On the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, Reginald T. Blades, Jr., Assistant Director, and Joshua E. Kurland, Senior Trial Counsel. Of counsel on the brief was Mykhaylo Gryzlov, Senior Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.

OPINION

Reif, Judge:

Before the court are the remand results of the U.S. Department of Commerce ("Commerce") pursuant to the court's order in Wind Tower Trade Coalition v. United States ("Wind Tower I"), 46 CIT —, —, 569 F. Supp. 3d 1221, 1260-61 (2022). See Final Results of Redetermination Pursuant to Ct. Remand, ECF Nos. 37-38 ("Remand Results"). In Wind Tower I, the court sustained in part and remanded in part Commerce's final determination in the countervailing duty ("CVD") investigation on utility scale wind towers from the Socialist Republic of Vietnam ("Vietnam") for the period of investigation ("POI") January 1, 2018, through December 31, 2018. See 46 CIT at —, 569 F. Supp. 3d at 1260; see also Utility Scale Wind Towers from the Socialist Republic of Vietnam: Final Affirmative Countervailing Duty Determination and Negative Determination of Critical Circumstances ("Final Determination"), 85 Fed. Reg. 40,229 (Dep't of Commerce July 6, 2020) and accompanying Issues and Decision Memorandum ("IDM"), PR 215. The court ordered Commerce to discuss evidence and arguments that Wind Tower Trade Coalition ("WTTC" or "plaintiff") raised pertaining to potential manipulation. 46 CIT at —, 569 F. Supp. 3d at 1260. In addition, the court remanded for Commerce to "substantiate its conclusion" as to the import status of the steel plate in question in light of certain evidence and arguments and to describe the significance, if any, of the most favored nation ("MFN") tariff rate listed to its determination. Id. at —, 569 F. Supp. 3d at 1260.

On remand, Commerce provided explanation and analysis as to potential manipulation related to the denominator in its subsidy calculation and provided additional explanation for its conclusion that the steel plate in question was sourced from within Vietnam. Remand Results at 2. For the following reasons, the court sustains Commerce's Remand Results.

BACKGROUND

The court presumes familiarity with the facts, as set out in Wind Tower I, and recounts only those facts relevant to the issues before the court on remand.

In its decision of March 24, 2022, the court addressed: (1) whether Commerce's use of the sales value of CS Wind Corporation ("CS Wind Korea") for wind towers produced by CS Wind Vietnam as the denominator for the subsidy rate calculation was supported by substantial evidence and was in accordance with law; and (2) whether "Commerce's acceptance of certain steel plate documentation" provided by CS Wind Vietnam Co., Ltd. ("CS Wind Vietnam") for the Import Duty Exemptions on Imports of Raw Materials for Exporting Goods program ("Import Duty Exemptions program") and determination not to apply adverse facts available ("AFA") as related to such documentation were supported by substantial evidence. Wind Tower I, 46 CIT at —, 569 F. Supp. 3d at 1225, 1232-59.

With respect to the sales value used for the denominator, the court in Wind Tower I held that the denominator was "not inconsistent with [Commerce's] regulations . . . or prior determinations." Id. at —, 569 F. Supp. 3d at 1259. However, the court also concluded that Commerce "did not discuss or address the evidence that WTTC presented or address the relevant argument on manipulation." Id. at —, 569 F. Supp. 3d at 1249-50. The court ordered Commerce to: "(1) discuss and address the evidence that WTTC presented as related to manipulation; (2) address WTTC's manipulation argument as to the denominator used in the benefit calculation; and (3) explain whether Commerce considered manipulation in reaching its determination, or if it did not, why it did not." Id. at —, 569 F. Supp. 3d at 1260.

With respect to the steel plate in question, the court concluded that Commerce did not "substantiate its conclusion that CS Wind Vietnam did not import the steel plate" considering the record as a whole. Id. at —, 569 F. Supp. 3d at 1258. The court also concluded that Commerce "did not explain the salience, if any, of the MFN zero percent rate to its determination." Id. at —, 569 F. Supp. 3d at 1257-58 (citing Memorandum from Davina Friedmann, Senior Case Analyst, AD/CVD Operations, Off. VI, to Erin Kearney, Program Manager, AD/CVD Operations, Off. VI, re: Final Determination of Countervailing Duty Investigation of Utility Scale Wind Towers from Vietnam: Calculation Memorandum for CS Wind Vietnam Co., Ltd. (June 29, 2020) ("Calculation Mem.") at attach. II, tab "Raw Materials.Rev.ATT2.BPI," CR 120-121). However, the court concluded that "Commerce's decision not to apply AFA [for the Import Duty Exemptions program] [wa]s supported by substantial evidence." Id. at —, 569 F. Supp. 3d at 1258 (citing 19 U.S.C. § 1677e(a)(2)(A), (a)(2)(C)-(D)). Accordingly, the court ordered Commerce to address arguments and evidence pertaining to the origin of the steel plate and describe the significance of the MFN rate that appears in certain places on the record:

(4) [S]ubstantiate [the] conclusion that CS Wind Vietnam did not import the steel plate in light of the evidence and arguments that detract from Commerce's conclusion that were presented by WTTC; (5) state the salience, if any, of the MFN rate to its determination that the raw material inputs in question came from Vietnam; and (6) explain why it has listed an MFN tariff rate in its calculations of the Import Duty Exemptions program for the line entries of the raw material inputs in question that also are listed as having a country of origin of Vietnam. In addressing these points, Commerce is to explain: (7)(a) if CS Wind Vietnam were the importer of record, would it be eligible to receive a benefit under the Import Duty Exemptions program; (7)(b) If CS Wind Korea were the importer of record and transferred the raw material inputs to CS Wind Vietnam, would either CS Wind Vietnam or CS Wind Korea be eligible to receive a benefit under that program; and (7)(c) if an unaffiliated third entity were the importer of record and sold the raw material inputs to CS Wind Korea for processing by CS Wind Vietnam, would CS Wind Vietnam be eligible to receive a benefit under that program.

Id. at —, 569 F. Supp. 3d at 1260.

On June 22, 2022, Commerce issued its draft redetermination ("Draft Remand Results"). Remand Results at 2 (citing Draft Results of Redetermination Pursuant to Ct. Remand (June 22, 2022), Wind Tower Trade Coal., Court No. 20-03692, 46 CIT —, 569 F.Supp.3d 1221, 1234-37 (2022)). On June 29, 2022, WTTC provided comments on the Draft Remand Results. Id. (citing Pet'rs' Letter, re: Utility Scale Wind Towers from the Socialist Republic of Vietnam: Comments on Draft Results of Redetermination (June 29, 2022) ("Pet'rs' Cmts. on Draft Remand Results")).

On July 22, 2022, Commerce filed its final Remand Results, in which Commerce responded to the court's remand order, addressed WTTC's comments and continued to apply the same CVD rates as in the Final Determination. See id. On September 7, 2022, WTTC provided comments on the Remand Results wherein WTTC argues that the "Remand Results do not fully and adequately address the [c]ourt's remand requests and are inconsistent with both the facts and law." See Pl.'s Cmts. on Remand Determination ("Pl. Br.") at 1, ECF Nos. 42-43. On October 21, 2022, defendant United States (the "Government") responded to plaintiff's comments. See Def.'s Resp. to Pl.'s Cmts. on Remand Results ("Def. Br."), ECF Nos. 46-47.

On March 1, 2023, the court heard oral argument. See Oral Arg., Mar. 1, 2023, ECF No. 55.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to sections 516A(a)(2)(A)(i)(II) and (a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(A)(i)(II) and (a)(2)(B)(i) (2018), and 28 U.S.C. § 1581(c).¹

On remand, the court will sustain Commerce's determination if it is "in accordance with the remand order, . . . supported by substantial evidence[ ] and . . . otherwise in accordance with law." Mac-Lean-Fogg Co. v. United States, 39 CIT —, —, 100 F. Supp. 3d 1349, 1355 (2015) (citing 19 U.S.C. § 1516a(b)(1)(B)(i)); see Prime Time Com. LLC v. United States, 45 CIT —, —, 495 F. Supp. 3d 1308, 1313 (2021) (quoting 19 U.S.C. § 1516a(b)(1)(B)(i); Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT 189, 190, 968 F. Supp. 2d 1255, 1259 (2014)), aff'd, No. 2021-1783, 2022 WL 2313968 (Fed. Cir. June 28, 2022); see also Jiangsu Zhongji Lamination Materials Co., (HK) v. United States, 44 CIT —, —, 435 F. Supp. 3d 1273, 1276 (2020) (quoting Xinjiamei Furniture (Zhangzhou) Co., 38 CIT at 190, 968 F. Supp. 2d at 1259).

Substantial evidence constitutes "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Substantial evidence requires "more than a mere scintilla" of evidence. Id. (quoting Consol. Edison Co., 305 U.S. at 229, 59 S.Ct. 206). In addition, "[i]t is well-established that an agency's action must be upheld, if at...