Hontex Enterprises, Inc. v. U.S.

342 F.Supp.2d 1225

HONTEX ENTERPRISES, INC., d/b/a/Louisiana Packing Co., Plaintiff, v. UNITED STATES, Defendant, and Crawfish Processors Alliance, The Louisiana Department of Agriculture and Forestry, and Bob Odom, Commissioner, Defendant-Intervenors.

Slip Op. 04-55.

Court No. 00-00223.

United States Court of International Trade.

May 21, 2004.

Coudert Brothers LLP (John M. Gurley and Matthew J. McConkey), for Plaintiff Hontex Enterprises, Inc.

Peter D. Keisler, Assistant Attorney General, Civil Division, United States Department of Justice; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Jeanne E. Davidson, Deputy Director, International Trade Section, Commercial Litigation Branch, Civil Division, United State Department of Justice (David S. Silverbrand); Marisa Beth Goldstein, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for Defendant United States, of counsel.

Adduci, Mastriani & Schaumberg, L.L.P. (James Taylor, Jr. and Will E. Leonard), John C. Steinberger, for Defendant-Intervenors Crawfish Processors Alliance, the Louisiana Department of Agriculture and Forestry, and Bob Odom, Commissioner, of counsel.

OPINION AND ORDER

EATON, Judge.

[United States Department of Commerce's final antidumping duty determination remanded to Commerce a second time.]

This matter is before the court following remand to the United States Department of Commerce ("Commerce"). In Hontex Enterprises, Inc. v. United States, 248 F.Supp.2d 1323 (2003) ("Hontex I"), this court remanded Commerce's determination contained in Freshwater Crawfish Tail Meat From the P.R.C., 65 Fed. Reg. 20,948 (ITA Apr. 19, 2000) (final results admin. rev.; rescission of new shipper rev.) ("Final Results"). Plaintiff Hontex Enterprises, Inc. ("Hontex")¹ had challenged certain aspects of that determination with respect to Ningbo Nanlian Frozen Foods Company ("NNL"),² covering its imports of freshwater crawfish tail meat from the People's Republic of China ("PRC"). The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2000). For the reasons set forth below, this matter is remanded to Commerce with instructions to conduct further proceedings in conformity with this opinion.

BACKGROUND

The relevant facts and procedural history in this case are set forth in Hontex I. A brief summary of those facts is included here. Commerce conducted its original investigation of the subject merchandise for the period of review of March 1, 1996, through August 31, 1996. See Freshwater Crawfish Tail Meat From the PRC, 62 Fed. Reg. 41,347 (ITA Aug. 1, 1997) (final determination). As a result of this investigation, Commerce issued an antidumping duty order pursuant to which several exporters received company-specific anti-dumping duty margins, several received "cooperative" margins, and the remainder received the "PRC-wide" margin, which was set at 201.63%. See id. at 41,358. One of the exporters investigated was Huaiyin Foreign Trade Corporation (5) ("HFTC5"). See Final Results, 65 Fed. Reg. at 20,949.

On March 27, 1998, NNL requested a new shipper review. See Freshwater Crawfish Tail Meat From the PRC, 63 Fed. Reg. 25,449 (ITA May 8, 1998) (initiation of new shipper rev.). This review covered the period of September 1, 1997 (the anniversary date of the original investigation), through March 31, 1998.³ Id. at 25,449. Following this review Commerce determined that for this period NNL's antidumping duty margin was 0.0%. See Freshwater Crawfish Tail Meat From the PRC, 64 Fed. Reg. 27,961, 27,966 (ITA May 24, 1999) (final results of new shipper rev.).

Subsequently, pursuant to a request for administrative review, Commerce initiated a review of HFTC5 and NNL. See Initiation of Antidumping and Countervailing Duty Admin. Rev., 63 Fed. Reg. at 59,010 (ITA Oct. 29, 1998). In response to the antidumping questionnaires sent by Commerce, both NNL and HFTC5 claimed that they did not share managers or owners, or share common control with other crawfish tail meat exporters. See NNL Sec. A Resp., Pub. R. Doc. 19, at 3 ("NNL Sec. A Resp."); HFTC5 Section A Resp., Pub. R. Doc. 24, at 4 ("HFTC5 Sec. A. Resp.").

Prior to verification, however, questions arose as to the relationship between NNL and HFTC5 with respect to possible affiliation. Despite the companies' representations that they did not share managers, a "Mr. Wei"⁴ was listed on NNL's business license as its "Vice G. Manager," and this name also appeared on a HFTC5 sales invoice dated during NNL's POR. See NNL Sec. A Resp., Ex. 4; HFTC5 Sec. A Resp., Ex. 7. In order to clarify this relationship, Commerce sent NNL⁵ a letter asking it to "explain the contradiction between Ningbo Nanlian's claim [in its original questionnaire response] not to share managers with other Chinese crawfish exporters and the evidence on the record of this review that shows Mr. Wei Wei was a manager at both Ningbo Nanlian and [HFTC5] in 1998." Letter from Commerce to Arent Fox of 1/12/00, Pub. R. Doc. 141, at 1. NNL responded to this letter and claimed that Mr. Wei was not a manager of HFTC5 during NNL's POR but was, since his resignation from HFTC5 on October 26, 1997, "a part-time independent consultant" to that company. See Letter from Arent Fox to Commerce of 1/31/00, Pub. R. Doc. 146 at 4. NNL also stated that during its POR, Mr. Wei "was not an officer or manager of Ningbo Nanlian either. He was a consultant." Id. at 2 n. 1.

Commerce then published the results of its investigation. Based on evidence contained in the antidumping duty questionnaires and gathered at NNL's verification (including Mr. Wei's responses to questions about his relationships with NNL, HFTC5, and HFTC5's customers), Commerce determined that the companies were "affiliated" and that their operations were "intertwined." Final Results, 65 Fed. Reg. at 20,949. As a result, Commerce concluded that NNL did not merit a separate rate from HFTC5, and assigned to it HFTC5's antidumping duty margin of 201.63%. See id. (adopting reasoning set forth in Issues and Decision Mem. for the Admin. Rev. of the Antidumping Duty Order on Freshwater Crawfish Tail Meat from the P.R.C. — March 26, 1997 through August 31, 1998, Pub. R. Doc. 214 (Apr. 7, 2000)). Subsequently Hontex filed a motion for judgment upon the agency record, and the court in Hontex I remanded the matter to Commerce.

Pursuant to the court's instructions, Commerce conducted remand proceedings and ultimately sustained its earlier finding that there was evidence that NNL and HFTC5 were affiliated and that their operations were intertwined, and that NNL therefore did not merit a separate antidumping duty rate from HFTC5. See Final Results of Determination Pursuant to Court Remand ("Remand Results") at 2. Hontex argues here that the Remand Results do not clearly explain Commerce's collapsing methodology and fail to identify the existence of substantial evidence to support Commerce's decision to collapse the companies. See Comments on Def.'s Resp. to Remand at 4 ("Comments on Def.'s Resp.").

STANDARD OF REVIEW

When reviewing a final determination in an antidumping or countervailing duty investigation, "[t]he 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 is `such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1374 (Fed.Cir.2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). It is "more than a mere scintilla." Consol. Edison, 305 U.S. at 229, 59 S.Ct. 206. The existence of substantial evidence is determined "by considering the record as a whole, including evidence that supports as well as evidence that `fairly detracts from the substantiality of the evidence.'" Huaiyin, 322 F.3d at 1374 (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984)).

DISCUSSION

I. Exhaustion of Administrative Remedies

Commerce issued its Draft Remand Results ("Draft Results") on August 4, 2003. Hontex was instructed to provide comments on the Draft Results by August 6, 2003 (i.e., in less than two business days), but did not do so, on the grounds that it had no new information or arguments that were not already addressed in its administrative and court briefs. See Pl.'s Surreply in Opp'n to Def.'s Comments on Pl.'s Resp. to Remand ("Pl.'s Surreply") at 5. In its Response in Opposition to Plaintiff's Comments upon Commerce's Final Results of Redetermination ("Def.'s Resp."), Commerce argues that because Hontex failed to respond to the Draft Results, it "frustrated the congressional goal of resolving disputes, where possible, at the agency level." Further, by this failure to respond, Hontex did not allow Commerce "to address the argument[s] [that Hontex now raises before the court] and thus prepare the issue for judicial review." Def.'s Resp. at 5 (internal quotation omitted).

For its part, Hontex maintains that

[f]irst, ... by issuing the draft results on August 4, 2003, and requesting comments by August 6, 2003 (less than two business days), the Department deprived Plaintiff of any meaningful chance to provide the Department with comments on the draft results.

Second, after the exhaustive briefing and oral argument that has occurred in this case, this Court is quite familiar with the facts and law at issue. Even a cursory review of the Department's Remand Response reveals that it in fact points to no new facts or law to support the Department's determination. It is, in fact, a mere reorganization of facts and argument relied upon by the Department throughout these proceedings (administrative and judicial). Accordingly,...