Guizhou Tyre Co. v. United States

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GUIZHOU TYRE CO., LTD. AND GUIZHOU TYRE IMPORT AND EXPORT CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant.

No. 18-00099

Slip Op. No. 23-80

Court of Appeals of International Trade

May 22, 2023

[Sustaining an agency decision responding to court order in an action contesting the results of an administrative review of an antidumping duty order on off-the-road tires from the People's Republic of China]

Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for plaintiffs Guizhou Tyre Co., Ltd. Guizhou Tyre Import and Export Co., Ltd., and GTC North America, Inc. With him on the briefs were James C. Beaty and James P. Durling.

Richard P. Ferrin, Faegre Drinker Biddle & Reath LLP, of Washington, D.C., for plaintiff Valmont Industries, Inc. With him on the brief was Douglas J. Heffner.

John J. Todor, Senior Trial Counsel, Commercial Litigation Branch Civil Division, U.S. Department of Justice, of Washington D.C., for defendant. With him on the briefs were Brian M. Boynton, Principal Deputy Assistant Attorney General, Jeanne D. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the briefs was Paul K. Keith, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, D.C.

Before: Timothy C. Stanceu, Judge

OPINION

TIMOTHY C. STANCEU, JUDGE

In this litigation, plaintiffs contested an administrative determination (the "Final Results") that the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") issued in an antidumping duty proceeding. Before the court is the decision (the "Remand Redetermination") Commerce submitted to the court in response to the court's opinion and order in Guizhou Tyre Co. v. United States, 44 CIT ___, 469 F.Supp.3d 1338 (2020) ("Guizhou I"). Redetermination Pursuant to Ct. Remand Order in Guizhou Tyre Co., Ltd. v. United States, Consol. Ct. No. 18-00099 (Jan. 6, 2021), ECF Nos. 56 (Conf.), 57 (Public) ("Remand Redetermination"). The court sustains the Remand Redetermination.

I. Background

Background on this case is presented in the court's prior opinion and is summarized and supplemented herein. See Guizhou I, 44 CIT at ___, 469 F.Supp.3d at 1340-43.

The determination contested in this action concluded the eighth periodic administrative review ("eighth review") of an antidumping duty ("AD") order (the "Order") on certain off-the-road ("OTR") tires from the People's Republic of China ("China" or the "PRC"). See Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Final Results of Antidumping Duty Administrative Review and New Shipper Review; 2015-2016, 83 Fed.Reg. 16,829 (Int'l Trade Admin. Apr. 17, 2018) ("Final Results"). Commerce incorporated by reference into the Final Results an "Issues and Decision Memorandum" as an explanatory document. Issues and Decision Memorandum for the Antidumping Duty Administrative Review and New Shipper Review: Certain New Pneumatic Off-the-Road Tires from the People's Republic of China; 2015-2016 (Int'l Trade Admin. Apr. 11, 2018) (P.R. Doc. 300) ("Final I&D Mem.").^[1]

Guizhou Tyre Co., Ltd., a Chinese producer of OTR tires, and its wholly-owned subsidiary, Guizhou Tyre Import and Export Co., Ltd., are plaintiffs in this consolidated action. In this Opinion, the court refers to Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. collectively as "GTC." For the eighth review, Commerce decided to treat these two companies as a single entity (an "exporter-producer"), a decision not contested here. GTC North America, Inc., an importer of OTR tires exported by GTC and a wholly-owned affiliate of Guizhou Tyre Import and Export Co., Ltd., is also a plaintiff, as is Valmont Industries, Inc. ("Valmont"), an unaffiliated importer of tires produced by Guizhou Tyre Co., Ltd.

Commerce issued the Order 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 eighth review in November 2016, covering entries of Chinese OTR tires made during the period of review ("POR") of September 1, 2015 through August 31, 2016. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 81 Fed.Reg. 78,778, 78,783 (Int'l Trade Admin. Nov. 9, 2016). Commerce designated GTC as a "mandatory respondent," i.e., a respondent Commerce selected for individual examination in the eighth review. Id. Also selected as a mandatory respondent was Weihai Zhongwei Rubber Co., Ltd. ("Zhongwei"). Id.

In the Final Results, Commerce concluded that GTC and two other exporter-producers failed to demonstrate independence from the PRC government and, for that reason, assigned GTC and these other two companies an AD rate of 105.31%. Final Results, 83 Fed.Reg. at 16,831. This was the rate Commerce assigned to the "PRC-wide entity" (or "China-wide entity"), which Commerce designated as a single entity comprised of those Chinese exporters of OTR tires that failed to rebut the Department's presumption of control by the PRC government. Under the Department's practice, such companies are ineligible to receive a "separate rate," i.e., a rate separate from the rate Commerce assigns to the PRC-wide entity. Id. at 16,830-31.

Concluding that Zhongwei had rebutted its presumption of government control, Commerce assigned Zhongwei an individually determined weighted average dumping margin of 11.87%. Id. at 16,830. Based on the margin it assigned to Zhongwei, Commerce assigned a rate of 11.87% to two respondents it also found to have rebutted the presumption of government control but did not select for individual examination in the review, Qingdao Qihang Tyre Co., Ltd. and Shandong Zhentai Group Co., Ltd. Id.

In contesting the Final Results, plaintiffs moved for judgment on the agency record. Mot. for J. on the Agency R. & Br. of Pls. Guizhou Tyre Co. Ltd., Guizhou Tyre Import and Export Co., Ltd. and GTC North America, Inc. in Supp. of Mot. for J. on the Agency R. (Sept. 17, 2018), ECF Nos. 22 (Conf.), 23 (Public) ("GTC's Br."); Mot. of Consol. Pl. Valmont Indus., Inc. for J. on the Agency R. under Rule 56.2 (Sept. 17, 2018), ECF No. 24 (adopting in full the arguments in GTC's Br.).

Following two requests by defendant for remands to allow Commerce to address certain issues raised by plaintiffs' claims, and after oral argument, the court issued Guizhou I, remanding the Final Results to Commerce for reconsideration. 44 CIT at ___, 469 F.Supp.3d at 1358-59. In response, Commerce, on January 6, 2021, filed the Remand Redetermination, in which it made no change to the 105.31% rate it assigned to GTC in the Final Results but changed the rationale for its decision. Remand Redetermination at 31. GTC and its affiliated importer filed a comment submission in opposition. Comments on Final Remand Redetermination Results Pursuant to Ct. Remand (Feb. 5, 2021), ECF Nos. 62 (Conf.), 63 (Public) ("GTC's Comments"). Valmont did not comment on the Remand Redetermination. Defendant responded to the comments, arguing that the Remand Redetermination should be sustained. Def.'s Resp. to Comments on Remand Results (Mar. 4, 2021), ECF Nos. 66 (Conf.), 67 (Public).

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, as amended, 19 U.S.C. § 1516a (the "Tariff Act"), including an action contesting a final determination that Commerce issues to conclude an administrative review of an antidumping duty order.^[2]

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 (1938)).

B. Plaintiffs' Claims Contesting the Final Results

Plaintiffs' challenge to the Final Results involved four claims, which are summarized below.

1. Plaintiffs' Challenge to the Legal Basis for Assigning a Rate to the PRC-Wide Entity

Plaintiffs challenged the practice Commerce applies when the subject merchandise is exported from a non-market economy ("NME") country, such as China. As the court in Guizhou I described the first claim, "[p]laintiffs, in effect, challenge the legal basis for the Department's practice of determining and assigning a rate for the PRC-wide entity as applied in the eighth review." 44 CIT at ___, 469 F.Supp.3d at 1344. Plaintiffs relied on Section 735(c)(1)(B)(i) of the Tariff Act, 19 U.S.C. § 1673d(c)(1)(B)(i), in arguing that the Tariff Act "does not empower Commerce to write a whole new type of AD margin from scratch for non-market economies." Id. (citation omitted). Plaintiffs maintain that "in an antidumping duty proceeding (as opposed, specifically, to a countervailing duty proceeding), the statute confines Commerce to assigning respondents either an individually determined margin or an 'all-others' rate, and that the rate Commerce determined for the PRC-wide entity and assigned to GTC falls into neither of these categories." Id. (citation omitted).

Defendant asked for a remand "for Commerce to reconsider its explanation of its statutory authority...