Jacobi Carbons AB v. United States

313 F.Supp.3d 1308

JACOBI CARBONS AB and Jacobi Carbons, Inc., Plaintiffs,andNingxia Huahui Activated Carbon Co., Ltd., et al., Plaintiff–Intervenors,

v. UNITED STATES, Defendant,andCalgon Carbon Corp. and Cabot Norit Am., Inc., Defendant–Intervenors.

Slip Op. 18–46

Consol. Court No. 15–00286

United States Court of International Trade.

Dated: April 19, 2018

Daniel L. Porter and Tung A. Nguyen, Curtis, Mallet–Prevost, Colt & Mosle LLP, of Washington, DC, argued for Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc.

Gregory S. Menegaz and Alexandra H. Salzman DeKieffer & Horgan PLLC, of Washington, DC, argued for Plaintiff–Intervenors Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Co., Ltd., Ningxia Mineral and Chemical Ltd., Shanxi DMD Corp., Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd. With them on the brief was J. Kevin Horgan.

Jeffrey S. Grimson, Kristin H. Mowry, Jill A. Cramer, Sarah M. Wyss, Yuzhe PengLing, and James C. Beaty, Mowry & Grimson, PLLC, of Washington, DC, for Plaintiff–Intervenor Ningxia Huahui Activated Carbon Co., Ltd.

Francis J. Sailer and Dharmendra N. Choudhary, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Plaintiff–Intervenors Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd, Beijing Pacific Activated Carbon Products Co., Ltd., Datong Municipal Yunguang Activated Carbon Co., Ltd, and Cherishmet Inc.

Antonia R. Soares, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Emma T. Hunter, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

R. Alan Luberda and Melissa M. Brewer, Kelley Drye & Warren LLP, of Washington, DC, argued for Defendant–Intervenors Calgon Carbon Corp. and Cabot Norit Americas, Inc. With them on the brief were John M. Herrmann, David A. Hartquist, and Scott M. Wise.

OPINION AND ORDER

Barnett, Judge:

This matter is before the court following the U.S. Department of Commerce's ("Commerce" or the "agency") redetermination upon remand in this case. See Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 105–1.

Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc. (together, "Jacobi"), and Plaintiff–Intervenors¹ (collectively, with Jacobi, "Plaintiffs"), initiated this case challenging Commerce's final results in the seventh administrative review ("AR7") of the antidumping duty order on certain activated carbon from the People's Republic of China ("PRC" or "China").See Certain Activated Carbon from the People's Republic of China , 80 Fed. Reg. 61,172 (Dep't Commerce Oct. 9, 2015) (final results of antidumping duty admin. review; 2013–2014) (" Final Results "), ECF No. 37–3, and accompanying Issues and Decision Mem., A–570–904 (Oct. 2, 2015) ("I & D Mem."), ECF No. 37–4.² Plaintiffs challenged Commerce's (1) selection of Thailand as the primary surrogate country, (2) selection of Thai surrogate values to value financial ratios and carbonized material, and (3) reduction of Jacobi's constructed export price ("CEP") by an amount for irrecoverable value added tax ("VAT"). See generally Confidential Pls. Jacobi Carbons AB and Jacobi Carbons, Inc.'s Mot. for J. on the Agency R. and Pls.' Br. in Supp. of their Mot. for J. on the Agency R. ("Jacobi Rule 56.2 Mem."), ECF No. 51; Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mot. for J. on the Agency R., ECF No. 59; Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mem. in Supp. of Mot. for J. on the Agency R. ("CATC Rule 56.2 Mem."), ECF No. 59–2 (incorporating Jacobi's arguments and providing additional arguments on all issues); Pl.–Int. Ningxia Huahui Activated Carbon Co., Ltd.'s Rule 56.2 Mot. for J. on the Agency R., ECF No. 58 (incorporating Jacobi's arguments regarding surrogate country and surrogate value selection, adopting Jacobi's arguments regarding VAT and making additional arguments thereto); Mot. of GDLSK Pl.–Ints. for J. on the Agency R. under USCIT Rule 56.2 and Mem. of Law in Supp. of GDLSK Pls.' Rule 56.2 Mot. for J. on the Agency R., ECF No. 60 (adopting all arguments made by Jacobi and providing additional argument regarding VAT).

On April 7, 2017, the court remanded Commerce's surrogate country selection (in particular, its de terminations vis-à-vis economic comparability and significant production of comparable merchandise), and Commerce's irrecoverable VAT adjustment for further explanation or reconsideration, and deferred considering Plaintiffs' arguments regarding Thai surrogate values pending the results of Commerce's remand redetermination. See Jacobi Carbons AB v. United States ("Jacobi (AR7) I "), 41 CIT ––––, 222 F.Supp.3d 1159 (2017).³ Commerce filed its remand redetermination on August 10, 2017. See Remand Results. Therein, Commerce retained Thailand as the primary surrogate country and further explained its VAT calculation. See id.

Jacobi, CATC, and Cherishmet filed comments opposing the Remand Results. See Jacobi's Comment on Commerce's Remand Redetermination ("Jacobi Opp'n Cmts"), ECF No. 108; Consol. Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Carbon Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Comments in Opp'n to U.S. Department of Commerce's Remand Redetermination ("CATC Opp'n Cmts"), ECF No. 107; GDLSK Pls.' Comment on Commerce's Remand Redetermination, ECF No. 109 (adopting Jacobi's comments). Defendant and Defendant–Intervenors filed comments in support of the Remand Results. See Def.'s Reply to Pls.', Consol. Pls.', and Pl–Ints.' Respective Comments on the Remand Redetermination ("Gov. Supp. Cmts"), ECF No. 112; Def.–Ints.' Responsive Comments in Supp. of U.S. Department of Commerce's Remand Redetermination ("Def–Ints. Supp. Cmts"), ECF No. 113. On February 15, 2018, the court held oral argument on the irrecoverable VAT issue. See Order (Jan. 26, 2018), ECF No. 117; Docket Entry, ECF No. 121.

For the following reasons, the court sustains Commerce's economic comparability determination but remands its determinations regarding significant production of comparable merchandise, surrogate value selections, and the irrecoverable VAT adjustment.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),⁴ and 28 U.S.C. § 1581(c). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "The results of a redetermination pursuant to court remand are also reviewed for compliance with the court's remand order." SolarWorld Americas, Inc. v. United States , 41 CIT ––––, ––––, 273 F.Supp.3d 1314, 1317 (2017) (quoting Xinjiamei Furniture (Zhangzhou) Co. v. United States , 38 CIT ––––, ––––, 968 F.Supp.2d 1255, 1259 (2014) (internal quotation marks omitted).

DISCUSSION

I. Relevant Legal Framework for Nonmarket Economy Proceedings

An antidumping duty is "the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise." 19 U.S.C. § 1673. When an antidumping duty proceeding involves a nonmarket economy country, Commerce determines normal value by valuing the factors of production⁵ in a surrogate country, see 19 U.S.C. § 1677b(c)(1), and those values are referred to as "surrogate values." In selecting surrogate values, Commerce must use "the best available information" that is, "to the extent possible," from a market economy country or countries that are economically comparable to the nonmarket economy country and "significant producers of comparable merchandise." Id. § 1677b(c)(1),(4). In selecting its surrogate values, Commerce generally prefers publicly-available and "non-proprietary information from producers of identical or comparable merchandise in the surrogate country." 19 C.F.R. § 351.408(c)(1),(4). Commerce's practice "is to select, to the extent practicable, [surrogate values] which are product-specific, representative of a broad-market average, publicly available and contemporaneous with the POR ["period of review"], and tax and duty exclusive." I & D Mem. at 25.

Commerce generally values all factors of production in a single surrogate country.⁶ Commerce has adopted a four-step approach to selecting a primary surrogate country. See Import Admin., U.S. Dep't of Commerce, Non–Market Economy Surrogate Country Selection Process , Policy Bulletin 04.1 (2004), http://enforcement.trade.gov/policy/bull04-1.html (last visited April 10, 2018) (hereinafter "Policy Bulletin 04.1"). Pursuant to Policy Bulletin 04.1,

(1) the Office of Policy ("OP") assembles a list of potential surrogate countries that are at a comparable level of economic development to the [non-market economy] country; (2) Commerce identifies countries from the list with producers of comparable merchandise; (3) Commerce determines whether any

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