I.D.I. Int'l Dev. & Inv. Corp. v. United States

I.D.I. INTERNATIONAL DEVELOPMENT AND INVESTMENT CORPORATION, Plaintiff, v. UNITED STATES, Defendant,andCATFISH FARMERS OF AMERICA, et al., Defendant-Intervenors.

Slip Op. 21-82 Court No. 20-00107

UNITED STATES COURT OF INTERNATIONAL TRADE

July 6, 2021

PUBLIC VERSION

Before: M. Miller Baker, Judge

OPINION

[The court denies Plaintiff's motion for judgment on the agency record and grants judgment for Defendant and Defendant-Intervenors.]

Robert L. LaFrankie, Crowell & Moring LLP of Washington, DC, for Plaintiff.

Kara M. Westercamp, Trial Attorney, Commercial Litigation Branch, U.S. Department of Justice of Washington, DC, for Defendant. With her on the brief were Brian Boynton, Acting Assistant Attorney General; Jeanne E. Davidson, Director; and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Kirrin A. Hough, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce of Washington, DC.

Jonathan M. Zielinski, Cassidy Levy Kent (USA) LLP of Washington, DC, for Defendant-Intervenors. With him on the brief was James R. Cannon, Jr.

Baker, Judge: In this case, a Vietnamese fish exporter challenges the Department of Commerce's denial of its application for a separate antidumping rate and imposition of the far higher country-wide rate generally applicable to frozen fish imports from Vietnam. For the reasons explained below, the court sustains Commerce's decision.

Regulatory Background

When Commerce imposes antidumping duties on imports from countries with non-market economies, it presumes that all exporters in such countries are controlled by the government. Hung Vuong Corp. v. United States, 483 F. Supp. 3d 1321, 1340-41 (CIT 2020). Any exporter in a country with a non-market economy will accordingly receive that country's antidumping duty rate unless the exporter applies for a separate rate and demonstrates that it is both de jure and de facto independent of the government. Id.¹ If Commerce determines that the applicant failed to demonstrate either type of independence, Commerce denies the separate rate and the applicant receives the country-wide rate. See 53-Foot Domestic Dry Containers from the People's Republic of China: Issues and Decision Memorandum for the Final Determination of Sales at Less Than Fair Value at 53 (Dep't Commerce Apr. 15, 2015).² Thus, Commerce assigns an exporter the country-wide rate by default unless the exporter applies for, and receives, a separate rate.

A separate-rate applicant has the burden of rebutting the presumption of government control. Zhejiang Zhaofeng Mech. & Elec. Co. v. United States, 355 F. Supp. 3d 1329, 1333 (CIT 2018) (citing Sigma Corp. v. United States, 117 F.3d 1401, 1406 (Fed. Cir. 1997)). The applicant has this burden because it is the party with "the best access to information pertinent to the 'state control' issue." Sigma Corp., 117 F.3d at 1406 (citing Zenith Elecs. Corp. v. United States, 988 F.2d 1573, 1583 (Fed. Cir. 1993) ("The burden of productionshould belong to the party in possession of the necessary information.")).

Factual and Procedural Background

In 2003, Commerce issued an antidumping order applicable to frozen fish imported from Vietnam. See Notice of Antidumping Duty Order: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 Fed. Reg. 47,909 (Dep't Commerce Aug. 12, 2003). In that order, Commerce found that certain frozen fish fillets from Vietnam were being sold in the U.S. at less than normal value and imposed duties accordingly. The order imposed specific rates for certain exporters and a "Vietnam-wide" rate for exporters not specifically listed. See id. at 47,909-10. In the intervening years, that order has undergone multiple administrative reviews.³

This case stems from the 15th such administrative review, which Commerce initiated at the request of Catfish Farmers of America⁴ and several of its constituent members. See Initiation of Antidumping andCountervailing Duty Administrative Reviews, 83 Fed. Reg. 50,077, 50,080-81 (Dep't Commerce Oct. 4, 2018).

In an administrative review involving a non-market economy country such as Vietnam,⁵ Commerce does not review the country-wide rate unless either a party requests such review or Commerce initiates it. See Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Preliminary Results of the Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2017-2018, 84 Fed. Reg. 56,420, 56,421 (Dep't Commerce Oct. 22, 2019).

In the review at issue here, no party requested a review of the Vietnam-wide rate and Commerce declined to initiate such a review. Accordingly, the country-wide rate of $2.39 per kilogram that was already in effect did not change. Id. This rate therefore automatically applied to all Vietnamese exporters that did not receive separate rates.

I.D.I. International Development and Investment Corporation, a Vietnamese exporter and the plaintiffin this case, submitted a separate rate application to Commerce and subsequently submitted three supplemental applications. Appx1012-1059 (original); Appx1065-1113 (first supplemental); Appx1114-1128 (second supplemental); Appx1129-1145 (third supplemental). Catfish Farmers opposed IDI's application. Appx1151-1156.

As it was undisputed that IDI was free from de jure control of the Vietnamese government, Appx1206 & n.149, Commerce's decision focused on the de facto control test, under which a separate-rate applicant " 'must show [among other things] that the government neither actually selects management nor directly or indirectly involves itself in the day-to-day management of the company' to demonstrate independence from the government." Appx1206 (quoting An Giang, 203 F. Supp. 3d at 1289-90). Commerce determined that IDI did not meet that standard for several reasons.

First, Commerce found that a government official and Communist Party member—referred to as Mr. X⁶—represented the Vietnamese government on the boards of both IDI and its corporate parent,Company Y.⁷ Commerce cited IDI's submissions in finding that the boards "are charged with making 'important decisions of the company' as required by law" and are responsible for selecting the companies' management, "who in turn handle the day-to-day operations of the company, including setting import prices." Appx1207 (citing Appx1192 and Appx1028).⁸

Second, Commerce observed that Mr. X was also a "Deputy General Director" of Company Y, where he was "in charge of external affairs . . . and thus responsible for arranging and attending meetings with the company's investors, customers, partners[,] and visitors from other companies." Appx1207 (omission inoriginal) (quoting Appx1119-1120). Commerce concluded that this meant Mr. X—and by extension, the Vietnamese government—was involved in the day-to-day management of both Company Y and IDI. Appx1207. Commerce also noted that Mr. X's meetings with customers and external parties likely included price negotiations and discussions of export practices. Appx1207 n.156.

Third, Commerce found that Mr. X's influence on IDI's board of directors was "heightened and expanded" because [[ ]] of both IDI's and Company Y's boards were Communist Party members. Appx80388; Appx80392 (citing Appx80305-80308). (Redacted information describes extent of party membership among IDI and Company Y board members.) Although Commerce acknowledged that party membership is not the same thing as holding government office, it reasoned that " 'mere' [party] membership" is not meaningless for the government control analysis. Appx1207 (quoting Appx1189).

Specifically, Commerce determined that in a one-party state like Vietnam, party membership

signifies that an individual is not just sympathetic to the ruling Vietnamese government's goals, but is an active participant in furthering those goals. Accordingly, when a government official, such as Mr. X, is in a position of authority and power in companies such as IDI and Company Y, absent record information to the contrary, it is reasonable to presume that members of the Communist Party of Vietnam also in power in those companies will support and affirm the votes and influence of that government official to further the goals of the Vietnamese government.

Appx1207-1208. Thus, Commerce found that Mr. X's position as a government official meant that he effectively led the other party members on the two company boards.

Fourth, the influence of the Communist Party in the affairs of Company Y and IDI wasn't limited to party members [[ ]] (Redacted information provides specific examples of party involvement in the affairs of Company Y and IDI.)

Finally, Commerce noted that there was no evidence in the administrative record suggesting that any of the Communist Party members on the board of either IDI or Company Y had ever voted or acted in a way contrary to Mr. X. Appx1208. Commerce also found that the specific powers of the two companies' boards, including selection of management, as well as the "particular decisions" of the boards demonstrated the "actual impact" of Mr. X and his party colleagues on IDI's operations. Appx1208.

Based on these findings, Commerce found that the presence of Communist Party members on both companies' boards "emboldened and furthered" Mr. X's authority and control over those companies, such that his presence was representative of the government's interests. Appx1208. Commerce reasoned that "the presence of a government official on the board of IDI/Company Y, in addition to the existence of multiple associates or members of the Communist Part [sic] of Vietnam, taken together, for the reasons explained above, supports a finding of de facto control." Appx1208 n.158 (emphasis added).

Commerce concluded as follows:

To summarize, there are several avenues through which the [government of Vietnam] can and does impact the operation of IDI. A manager of IDI's parent company, i.e., Company Y, is a government official. That

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