Guizhou Tyre Co. v. United States

641 F.Supp.3d 1371

GUIZHOU TYRE CO., LTD. and Guizhou Tyre Importand Export Co., Ltd., et al., Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. No. 23-79 Consol. Court No. 17-00100

United States Court of International Trade

May 18, 2023

Richard P. Ferrin, Faegre Drinker Biddle & Reath, LLP, of Washington, D.C., for plaintiff Xuzhou Xugong Tyres Co., Ltd. With him on the briefs was Douglas J. Heffner.

Richard P. Ferrin, Faegre Drinker Biddle & Reath, LLP, of Washington, D.C., for plaintiff Trelleborg Wheel Systems (Xingtai) Co., Ltd. With him on the briefs was Douglas J. Heffner.

Ned H. Marshak, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, New York, argued for plaintiffs Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. With him on the briefs were Jordan C. Kahn, Elaine F. Wang, and Brandon M. Petelin.

Brandon M. Petelin, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, D.C., for plaintiff Qingdao Qihang Tyre Co., Ltd. With him on the briefs were Ned. H. Marshak, Elaine F. Wang, and Jordan C. Kahn.

Brandon M. Petelin, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, D.C., for plaintiff Qingdao Free Trade Zone Full-World International Trading Co., Ltd. With him on the briefs were Ned. H. Marshak, Elaine F. Wang, and Jordan C. Kahn.

Ned H. Marshak, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, New York, for plaintiff Aeolus Tyre Co., Ltd. With him on the briefs were Brandon M. Petelin, Elaine F. Wang, and Jordan C. Kahn.

Robert K. Williams and Lara A. Austrins, Clark Hill PLC, of Chicago, Illinois, for plaintiff Weihai Zhongwei Rubber Co., Ltd.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant. With him on the briefs were Brian M. Boynton, Acting Assistant Attorney General, Patricia M. McCarthy, 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 & Compliance, U.S. Department of Commerce, of Washington D.C.

OPINION

Stanceu, Judge:

The plaintiffs in this consolidated action contested an administrative determination the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department"), issued to conclude a periodic review of an antidumping duty order on off-the-road ("OTR") tires from the People's Republic of China ("China" or the "PRC").¹

Before the court is the "Second Remand Redetermination," which Commerce submitted in response to a previous opinion and order in this litigation, Guizhou Tyre Co. v. United States, 45 CIT —, 519 F. Supp. 3d 1248 (2021) ("Guizhou II"). Final Results of Redetermination Pursuant to Ct. Remand (Sept. 24, 2021), ECF Nos. 109 (Conf.), 110 (Public), ("Second Remand Redetermination"). The court sustains the Second Remand Redetermination.

I. BACKGROUND

A. The Contested Determination

The determination contested in this litigation (the "Final Results") is Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2014-2015, 82 Fed. Reg. 18,733 (Int'l Trade Admin. Apr. 21, 2017) ("Final Results"). See also Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Amended Final Results of Antidumping Duty Administrative Review; 2014-2015, 82 Fed. Reg. 27,224 (Int'l Trade Admin. June 14, 2017) ("Amended Final Results"). Commerce incorporated by reference in the Final Results and the Amended Final Results a final "Issues and Decision Memorandum" containing explanatory discussion. Issues and Decision Memorandum for Final Results of Antidumping Duty Administrative Review: Certain New Pneumatic Off-the-Road Tires from the People's Republic of China; 2014-2015 (Int'l Trade Admin. Apr. 12, 2017) (P.R. Doc. 308) ("Final I&D Mem.").²

B. The Seventh Review of the Antidumping Duty Order

Commerce issued an antidumping duty order (the "Order") on certain OTR tires from China (the "subject merchandise") in 2008. Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Notice of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 73 Fed. Reg. 51,624 (Int'l Trade Admin. Sept. 4, 2008). Commerce initiated the review at issue, the seventh periodic administrative review of the Order, on November 9, 2015. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 80 Fed. Reg. 69,193 (Int'l Trade Admin.). The seventh review pertained to entries of subject merchandise made during the period of review ("POR") of September 1, 2014 through August 31, 2015. Id., 80 Fed. Reg. at 69,196. Commerce published the preliminary results of the review on October 14, 2016. Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review; 2014-2015, 81 Fed. Reg. 71,068 (Int'l Trade Admin.).

For the review, Commerce selected two groups of respondents as "mandatory respondents," i.e., respondents for which it intended to conduct individual examinations. The first group of respondents consisted of Xuzhou Xugong Tyres Co., Ltd., Armour Rubber Co. Ltd., and Xuzhou Hanbang Tyre Co., Ltd. (collectively, "Xugong"), which Commerce treated as a single entity ("collapsed") for purposes of the review. The second group consisted of Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. (collectively, "GTC"), which Commerce also treated as a single entity. Final Results, 82 Fed. Reg. at 18,733-34 & nn.3-4.

Commerce concluded that Xugong established independence from the government of China by rebutting the Department's presumption of de jure and de facto government control and therefore, under its practice, qualified for a "separate rate," i.e., an antidumping duty rate other than the rate Commerce assigns to exporters and producers it considers to be part of the "PRC-wide entity," i.e., those Chinese exporters and producers of the subject merchandise that failed to rebut the Department's presumption. Id., 82 Fed. Reg. at 18,734.³ In the Final Results, Commerce assigned a weighted-average dumping margin of 33.08% to Xugong and assigned to GTC the PRC-wide rate, which in the seventh review was 105.31%. Id., 82 Fed. Reg. at 18,735.⁴ Commerce concluded that GTC, while demonstrating de jure independence from government control, had not rebutted the presumption that the government of China exercised de facto control over its export functions. Final I&D Mem. at 8-9.

Because Xugong was the only individually-examined respondent that Commerce determined to be qualified for a separate rate, Commerce assigned to all other separate rate respondents a rate of 33.08%, equivalent to the margin it calculated for Xugong. Final Results, 82 Fed. Reg. at 18,735. In addition to GTC, Commerce determined that Aeolus Tyre Co., Ltd. ("Aeolus") failed to qualify for a separate rate and therefore treated it as part of the PRC-wide entity, assigning it the rate of 105.31%. Commerce made the same determination as to Tianjin Leviathan International Trade Co., Ltd., which is not a party to this case. Id.

On June 14, 2017, Commerce issued the Amended Final Results to correct a ministerial error. Amended Final Results, 82 Fed. Reg. at 27,224. Commerce determined that the weighted-average dumping margin applicable to Xugong was 33.14% rather than 33.08%. Id., 82 Fed. Reg. at 27,225. Commerce applied this margin to the other "separate rate" respondents. Id. The 105.31% rate applied to members of the PRC-wide entity in the Final Results was unchanged. Id.

C. The Parties to this Consolidated Case

The plaintiffs in this litigation include the two mandatory respondents, Xugong (to which Commerce assigned a rate of 33.14%) and GTC (to which Commerce assigned the 105.31% PRC-wide rate). The other plaintiffs are Aeolus (to which Commerce also assigned the PRC-wide rate) and four separate rate respondents, to each of which Commerce assigned the 33.14% rate determined for Xugong in the Amended Final Results: Qingdao Free Trade Zone Full-World International Trading Co., Ltd.; Qingdao Qihang Tyre Co., Ltd.; Trelleborg Wheel Systems (Xingtai) China, Co. Ltd.; and Weihai Zhongwei Rubber Co., Ltd. Defendant is the United States.

II. DISCUSSION

A. Jurisdiction and Standard of Review

The court exercises jurisdiction under section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), pursuant to which the court reviews actions commenced under section 516A of the Tariff Act of 1930 (the "Tariff Act"), as amended 19 U.S.C. § 1516a, including an action contesting a final determination that Commerce issues to conclude an administrative review of an antidumping duty order.⁵ In reviewing a final determination, the court "shall hold unlawful any determination, finding, or conclusion 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). Substantial evidence refers to "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." SKF USA, Inc. v. United States, 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)).

B. The Court's Prior Opinions

The court remanded the Final Results to Commerce in its first decision, Guizhou Tyre Co. Ltd. v. United States, 43 CIT —, 389 F. Supp. 3d 1350 (2019) ("Guizhou I"). Commerce responded in a decision (the "First Remand Redetermination") submitted on October 10, 2019. Final Results of Redetermination Pursuant to Ct. Remand, ECF Nos. 74 (Conf.), 81 (Public) ("First Remand Redetermination").

In Guizhou I, the court held that Commerce unlawfully made deductions from the starting prices used to determine the export price and constructed export price of Xugong's subject...