Diamond Sawblades Manufacturers' Coal. v. United States

359 F.Supp.3d 1374

DIAMOND SAWBLADES MANUFACTURERS' COALITION, et al., Plaintiffs,

Bosun Tools, Co., Ltd., et al., Consolidated Plaintiffs,

Chengdu Hiufeng Diamond Tools Co., Ltd., et al., Consolidated Plaintiffs,

v.UNITED STATES, Defendant,Weihai Xiangguang Mechanical Industrial Co., Ltd., et al., Defendant-Intervenors

Slip Op. 19-17

Court No. 16-00124

United States Court of International Trade.

Dated: February 1, 2019

Daniel B. Pickard, Maureen E. Thorson, and Stephanie M. Bell, Wiley, Rein & Fielding, LLP, of Washington, DC, for the plaintiff/defendant intervenor Diamond Sawblades Manufacturers' Coalition.

Gregory S. Menegaz, James K. Horgan, and Alexandra H. Salzman, deKeiffer & Horgan, PLLC, of Washington, DC, for the consolidated plaintiffs Bosun Tools, Co., Ltd. and Bosun Tools Inc.

Max F. Schutzman, Andrew B. Schroth, Andrew T. Schutz, Dharmendra N. Choudhary, Elaine F. Wang, Jordan C. Kahn, and Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for the defendant-intervenor Weihai Xiangguang Mechanical Industrial Co., Ltd., Ehwa Diamond Industrial Co., Ltd., and General Tool, Inc.

Lizbeth R. Levinson, Ronald L. Wisla, and Brittney R. Powell, Fox Rothschild LLP, of Washington, DC, for the consolidated plaintiffs Chengdu Huifeng Diamond Tools Co., Ltd., Danyang Huachang Diamond Tools Manufacturing Co., Ltd., Danyang NYCL Tools Manufacturing Co., Ltd., Danyang Weiwang Tools Manufacturing Co., Ltd., Guilin Tebon Superhard Material Co., Ltd., Hangzhou Deer King Industrial and Trading Co., Ltd., Hong Kong Hao Xin International Group Limited, Jiangsu Inter-China Group Corporation, Jiangsu Youhe Tool Manufacturer Co., Ltd., Orient Gain International Limited, Pantos Logistics (HK) Company Limited, Qingyuan Shangtai DiamondTools Co., Ltd., Quanzhou Zhongzhi Diamond Tool Co., Ltd., Rizhao Hein Saw Co., Ltd., Wuhan Wanbang Laser Diamond Tools Co., Zhejiang Wanli Tools Group Co., Ltd., Jiangsu Fengtai Diamond Tool Manufacture Co., Ltd., and Jiangsu Fengtai Tools Co., Ltd.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for the defendant. With him on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of Counsel on the brief was Paul K. Keith, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION AND ORDER

Restani, Judge:

This action is a challenge to the Department of Commerce ("Commerce")'s remand redetermination of the final results of the antidumping duty order on diamond sawblades and parts thereof from the People's Republic of China ("PRC"). Redetermination Pursuant to Court Remand Order in Diamond Sawblades Manufacturers' Coalition v. United States, Consol. Court No. 16-00124, Doc. No. 82 (Aug. 7, 2018) ("Remand Redetermination"). Plaintiffs and Consolidated Plaintiffs oppose Commerce's decision on remand to rescind the administrative review with respect to exporter Weihai Xiangguang Mechanical Industrial Co., Ltd. ("Weihai") and the subsequent use of the rate for the only remaining respondent, Jiangsu Fengtai Diamond Tool Manufacturing Co., Ltd. ("Jiangsu"), as the basis for calculating the all-others rate.¹

BACKGROUND

The court assumes all parties are familiar with the facts of the case as discussed in Diamond Sawblades Mfr.'s Coalition v. United States, 301 F.Supp.3d 1326 (CIT 2018). For the sake of convenience, the facts relevant to review of Commerce's remand redetermination are summarized below.

This opinion concerns Commerce's fifth periodic review of the antidumping duty order on diamond sawblades and parts thereof from the PRC covering the period of November 1, 2013, to October 31, 2014. 81 Fed. Reg. 38,673 (June 14, 2016) ("Final Results"). In its decision ordering remand, the court directed² Commerce to reconsider its decision denying U.S. Importer Robert Bosch Tools Corporation ("Bosch")'s request for withdrawal of its request for review of Weihai.³ Diamond Sawblades, 301 F.Supp.3d at 1357–59.

In its remand redetermination, Commerce adjusted its freight calculation as instructed by the Court and accepted Bosch's late withdrawal request. Remand Redetermination at 8. As no other requests for review of Weihai remained, Commerce rescinded its review of Weihai leaving only a single mandatory respondent–Jiangsu. Jiangsu's rate was then used pursuant to 19 U.S.C. § 1677f-1(c)(2)⁴ to set the all-others rate. Because the previous all-others rate had been a weighted average of Weihai and Jiangsu's rate, the final results rate was 29.76% while the remand redetermination rate was 56.67%. Remand Redetermination at 19–20.

Sixteen non-selected separate rate respondents appealed Commerce's decision to rescind Weihai's rate in the calculation of the all-others rate. See Consolidated Plaintiffs' Opposition to Commerce's Final Remand Determination, Doc. No. 87 ("Pl. Chengdu Br."). Consolidated Plaintiffs Chengdu ("Chengdu")⁵ challenge Commerce's decision on remand to resort to the "reasonableness test" in assessing Bosch's late withdrawal rather than the "extraordinary circumstances test." Pl. Chengdu Br. at 4–8. They argue that the Court of Appeals for the Federal Circuit (CAFC)'s decision in Glycine, while factually similar, does not have the same "legal predicate" as Commerce's original determination. Id. at 4–5. They argue that Commerce misinterprets how the new regulation 19 C.F.R.§ 351.302(c), adopted since Glycine, interacts with the older regulation 19 C.F.R. 351.213(d)(1). Id. at 6–7.

Consolidated Plaintiffs Bosun ("Bosun") argue that Commerce's initial selection of only two mandatory respondents and the resulting use of only Jiangsu's rate in setting the all-others rate was unsupported by substantial evidence. Bosun's Comments in Opposition to U.S. Department of Commerce's Remand Redetermination, Doc. No. 86, 3–7 ("Pl. Bosun Br."). Bosun then proposed several alternatives to using Jiangsu's rate alone, including: use of Weihai's assessed rate despite its review having been rescinded, assigning Bosun its rate from the administrative review immediately prior to the instant review, or calculating an individual rate for Bosun on remand. Pl. Bosun Br. at 8–15. Finally, Bosun argues that an exhaustion bar does not apply as the issue now before the court did not arise until the remand redetermination. Id. at 15–17.

In response, the Government and Plaintiffs/Defendant-Intervenors Weihai and Diamond Sawblade Manufacturers' Coalition ("DSMC") argue in support of Commerce's decisions to rescind the review of Weihai and to base the all-others rate on Jiangsu's calculated dumping margin. Defendant's Response to Comments on Remand Redetermination, Doc. No. 89, 5–17 ("Def. Br."); Weihai's Comments in Support of Final Results of Redetermination Pursuant to Court Order, Doc. No 88, 5–9 ("Weihai Br.); Response on Remand of Plaintiff/Defendant-Intervenor DSMC, Doc. No. 90, 6–13 ("DSMC Br."). The Government and Defendant-Intervenors defend Commerce's choice to apply the reasonableness test found in 19 C.F.R. § 351.213(d)(1), instead of the extraordinary circumstances test found in 19 C.F.R.§ 351.302(c), to the withdrawal request as the correct interpretation of its regulations because the former provision concerns the specific instance at hand while the latter is a generally-applicable provision. Def. Br. at 6–8; see also Weihai Br. 7–9; DSMC Br. at 7–8. Further, the Government stresses that nothing in 19 C.F.R. § 351.302(c) purports to modify or supersede 19 C.F.R. § 351.213(d)(1). Def. Br. at 8–9. DSMC additionally argues that applying 19 C.F.R. § 351.302(c) to the instant case would "render[ ] the final sentence of 19 C.F.R. § 351.213(d)(1) superfluous." DSMC Br. at 7.

The Government argues that Commerce's decision to base the all-others rate on the sole remaining mandatory respondent, Jiangsu, was in accord with its practice and regulations and that Commerce was not required to use Bosun's proposed alternatives. Def. Br. 9–17. Finally, the Government argues that if Bosun wanted an individual examination, it should have sought individual review as a mandatory or voluntary respondent in the underlying administrative review and that any requests for such review now should be rejected. Id. at 16–17. DSMC further argues that Bosun failed to exhaust administrative remedies. DSMC Br. at 9–11.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. 1581(c). The court will uphold Commerce's decision in an antidumping review unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Application of the Reasonableness Test to Withdrawal of Review Requests

The legal landscape of Commerce's choice to apply a reasonableness standard begins with Glycine & More, Inc., v. United States. 880 F.3d 1335 (Fed. Cir. 2018). In that case, Baoding Moantong ("Baoding") and GEO Specialty Chemicals Inc. ("GEO") each requested review of an antidumping order on glycine from the PRC. GEO then filed a notice of withdrawal. Id. at 1341. Baoding then filed a similar request and a request for extension of time. Id. Baoding, however, submitted its notice of withdrawal after the 90-day deadline to withdraw a request for review as established in 19 C.F.R. § 351.213(d)(1).

Commerce denied Baoding's withdrawal pursuant to a 2011 guidance document (which Commerce refers to as a Notice) that stated that such untimely requests would be granted only in "extraordinary circumstances." Id. This Notice was not issued through notice and comment rulemaking but was merely an interpretation of 19 C.F.R. § 351.213. Id. at 1342, 1345. The CAFC determined that the Notice was an "incompatible departure from the clear meaning of the regulation," which states:

(d) Rescission of

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