Jinan Yipin Corp. v. United States

33 ITRD 2029

800 F.Supp.2d 1226

JINAN YIPIN CORPORATION, LTD., Linshu Dading Private Agricultural Products Co., Ltd., and Sunny Import & Export Ltd., Plaintiffs,

v.UNITED STATES, Defendant,andFresh Garlic Producers Association, Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc., Defendant–Intervenors.

Slip Op. 11–119.Court No. 06–00189.

United States Court of International Trade.

Sept. 26, 2011.

Recognized as Invalid

19 C.F.R. § 351.408(c)(3) Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Mark E. Pardo and Jeffrey O. Frank), Washington, DC, for Plaintiffs.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, (Richard P. Schroeder); Reid Swayze, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Of Counsel, for Defendant.Kelley Drye & Warren LLP (Michael J. Coursey and John M. Herrmann), Washington, DC, for Defendant–Intervenors.

OPINION

RIDGWAY, Judge:

In this action, the plaintiff Chinese producers and exporters of fresh garlic challenged the final results of the U.S. Department of Commerce's tenth administrative review of the antidumping duty order covering fresh garlic from the People's Republic of China. See generally Zhengzhou Harmoni Spice Co. v. United States, 33 CIT ––––, 617 F.Supp.2d 1281 (2009) (“ Zhengzhou Harmoni I ”). Zhengzhou Harmoni I analyzed each of the seven issues that the Chinese producers raised, sustaining Commerce's determination as to two issues, and remanding the remaining five for further consideration by the agency. See generally id., 33 CIT at ––––, ––––, 617 F.Supp.2d at 1289, 1334.

Now pending before the court is Commerce's Remand Determination, filed pursuant to Zhengzhou Harmoni I. See generally Final Results of Redetermination Pursuant to Court Remand (“Remand Determination”). Plaintiffs Jinan Yipin Corporation, Ltd. (“Jinan Yipin”), Linshu Dading Private Agricultural Products Co., Ltd. (“Linshu Dading”), and Sunny Import & Export Ltd. (“Sunny”)—collectively referred to as “the Chinese Producers”—continue to dispute the agency's treatment of four of the five issues addressed in the agency's Remand Determination. See generally Plaintiffs' Comments Regarding the Department's Remand Redetermination (“Pls. Comments”); Plaintiffs' Reply to Defendant's Response Comments Regarding Remand Redetermination (“Pls. Reply Comments”).

For its part, the Government seeks a voluntary remand to allow Commerce to recalculate the surrogate value for the Chinese Producers' labor costs, but contends that the Remand Determination should be sustained in all other respects. See Defendant's Response to Comments Upon the Remand Redetermination (“Def. Response”) at 1, 31. Defendant–Intervenors the Fresh Garlic Producers Association and its individual members (Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Company, Inc.)—collectively referred to as “the Domestic Producers”—do not oppose the Government's request for a limited remand to allow the agency to recalculate labor costs, but urge that the Remand Determination be sustained as to all other issues save one, on which the Domestic Producers express no view. See Defendant–Intervenors' Reply Regarding Agency Remand Redetermination (“Def.-Ints. Reply Comments”) at 1–3.

Jurisdiction lies under 28 U.S.C. § 1581(c) (2000).¹ For the reasons detailed below, Commerce's Remand Determination is sustained in part, and this matter is remanded to the agency for further consideration not inconsistent with this opinion.

I. Background

Seven Chinese producers and exporters of fresh garlic brought this action to contest various aspects of the Final Results of Commerce's tenth administrative review of the antidumping duty order on fresh garlic from China, which covered the period from November 1, 2003 through October 31, 2004. See generally Zhengzhou Harmoni I, 33 CIT ––––, 617 F.Supp.2d 1281; Fresh Garlic from the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review and Final Results of New Shipper Reviews, 71 Fed.Reg. 26,329 (May 4, 2006) (“Final Results”).²

Zhengzhou Harmoni I sustained Commerce's use of its “intermediate input methodology” to value the raw garlic bulb grown by the Chinese Producers, as well as the agency's inclusion of certain labor-related expenses as part of manufacturing overhead. See Zhengzhou Harmoni I, 33 CIT at ––––, ––––, ––––, 617 F.Supp.2d at 1289, 1295, 1333–34. In contrast, Zhengzhou Harmoni I remanded for further consideration Commerce's surrogate valuation of certain “factors of production” necessary for the cultivation and export of fresh garlic—specifically (1) raw garlic bulb, (2) labor, (3) ocean freight, (4) cardboard cartons, and (5) plastic jars and lids. See id., 33 CIT at ––––, ––––, ––––, ––––, 617, ––––, 617 F.Supp.2d at 1289, 1301, 1311–12, 1321, 1327, 1334.

Following Zhengzhou Harmoni I but before issuance of Commerce's Remand Determination, four of the seven Chinese producers that filed the complaint in this action moved for voluntary dismissal. See generally Zhengzhou Harmoni Spice Co. v. United States, 34 CIT ––––, 675 F.Supp.2d 1320 (2010) ( “ Zhengzhou Harmoni II ”).³ Zhengzhou Harmoni II granted the motion and dismissed the four Plaintiffs from this action with prejudice, leaving Jinan Yipin, Linshu Dading, and Sunny (collectively “the Chinese Producers”) as the remaining Plaintiffs and the only subjects of Commerce's Remand Determination. See id., 34 CIT at ––––, ––––, 675 F.Supp.2d at 1324, 1339–40.⁴

Commerce thereafter issued its Remand Determination. In the Remand Determination, Commerce revalued raw garlic bulb, labor, and ocean freight. See Remand Determination at 5–15, 15–38, 38–41, 51–59, 59–68. On the other hand, Commerce continued to value cardboard cartons and plastic jars as it had in the Final Results. See id. at 41–46, 46–50, 68–71, 71–74. As a result of its reconsideration in the course of the remand, Commerce recalculated the weighted-average antidumping duty margin for Jinan Yipin as 55.18% (up from 29.52%), for Linshu Dading as 39.51% (up from 22.47%), and for Sunny as 26.67% (up from 10.52%). See id. at 74–75; Final Results, 71 Fed.Reg. at 26,332.

The Chinese Producers contend that Commerce's wage rate calculation and its valuation of raw garlic bulb, cardboard cartons, and plastic jars do not comply with the instructions in Zhengzhou Harmoni I. See generally Pls. Comments; Pls. Reply Comments. The Chinese Producers maintain that these matters therefore should be remanded to the agency for further consideration. See Pls. Comments at 1–2, 18–19, 26, 30, 31; Pls. Reply Comments at 12, 17.

The Government seeks a voluntary remand to allow Commerce to recalculate the surrogate value for the Chinese Producers' labor costs in light of the Court of Appeals' decision in Dorbest, but maintains that the Remand Determination should be otherwise sustained. See Def. Response at 1, 31; Dorbest Ltd. v. United States, 604 F.3d 1363, 1366, 1369–73 (Fed.Cir.2010). The Domestic Producers do not oppose the Government's request for a voluntary remand on labor costs, but contend that the Remand Determination should be sustained as to the surrogate valuation of garlic bulb, cardboard cartons, and plastic jars and lids. See Def.-Ints. Reply Comments at 1, 3. The Domestic Producers express no view concerning the Remand Determination on ocean freight expenses. See id. at 1–3.

II. Standard of Review

In an action reviewing an antidumping determination by Commerce, the agency's determination must be upheld except to the extent that it is 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); see also NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed.Cir.2009). Substantial evidence is “more than a mere scintilla”; rather, it is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. Nat'l Labor Relations Bd., 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) ( quoting Consol. Edison Co. v. Nat'l Labor Relations Bd., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)); see also Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1380 (Fed.Cir.2008) (same). Moreover, any evaluation of the substantiality of evidence “must take into account whatever in the record fairly detracts from its weight,” including “contradictory evidence or evidence from which conflicting inferences could be drawn.” Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 985 (Fed.Cir.1994) ( quoting Universal Camera Corp., 340 U.S. at 487–88, 71 S.Ct. 456); see also Mittal Steel, 548 F.3d at 1380–81 (same).

That said, the mere fact that it may be possible to draw two inconsistent conclusions from the record does not prevent Commerce's determination from being supported by substantial evidence. Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir.2001); see also Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966). Finally, while Commerce must explain the bases for its decisions, “its explanations do not have to be perfect.” NMB Singapore, 557 F.3d at 1319. Nevertheless, “the path of Commerce's decision must be reasonably discernable,” to support judicial review. Id. ( citing Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)); see also Timken U.S. Corp. v. United States, 421 F.3d 1350, 1355 (Fed.Cir.2005) (explaining that “it is well settled that an agency must explain its action with sufficient clarity to permit ‘effective judicial review,’ ” and that “[f]ailure to provide the necessary clarity requires the agency action...