NTSF Seafoods Joint Stock Co. v. United States

538 F.Supp.3d 1356

NTSF SEAFOODS JOINT STOCK COMPANY and Vinh Quang Fisheries Corporation, Plaintiffs,

v. UNITED STATES, Defendant,andCatfish Farmers of America, Alabama Catfish Inc., America's Catch, Consolidated Catfish Companies LLC, Delta Pride Catfish, Inc., Guidry's Catfish, Inc., Heartland Catfish Company, Magnolia Processing, Inc., and Simmons Farm Raised Catfish, Inc., Defendant-Intervenors.

Slip Op. 21-121

Court No. 19-00063

United States Court of International Trade.

September 20, 2021

Jonathan M. Freed, Trade Pacific, PLLC, of Washington, D.C., for Plaintiffs NTSF Seafoods Joint Stock Company and Vinh Quang Fisheries Corporation.

Kara M. Westercamp, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Hendricks Valenzuela, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Jonathan M. Zielinski, James R. Cannon, Jr., and Nicole Brunda, Cassidy Levy Kent (USA) LLP, of Washington, D.C., for Defendant-Intervenors Catfish Farmers of America, Alabama Catfish Inc., America's Catch, Consolidated Catfish Companies LLC, Delta Pride Catfish, Inc., Guidry's Catfish, Inc., Heartland Catfish Company, Magnolia Processing, Inc., and Simmons Farm Raised Catfish, Inc.

OPINION

Choe-Groves, Judge:

This case involves frozen fish fillets, including regular, shank, and strip fillets and portions thereof, of the species Pangasius Bocourti , Pangasius Hypophthalmus (also known as Pangasius Pangasius ) and Pangasius Micronemus. Plaintiffs NTSF Seafoods Joint Stock Company ("NTSF") and Vinh Quang Fisheries Corporation ("Vinh Quang") (collectively, "Plaintiffs") filed this action challenging the final results of the U.S. Department of Commerce ("Commerce") in the 2016–2017 administrative review of the antidumping duty order covering certain frozen fish fillets from the Socialist Republic of Vietnam. See Certain Frozen Fish Fillets from the Socialist Republic of Vietnam ("Final Results"), 84 Fed. Reg. 18,007 (Dep't of Commerce Apr. 29, 2019) (final results, and final results of no shipments of the antidumping duty administrative review; 2016–2017); see also Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Issues and Decision Mem. for the Final Results of the Fourteenth Antidumping Duty Admin. Review: 2016–2017 (Dep't of Commerce Apr. 19, 2019), ECF No. 24-3 ("Final IDM"). Before the Court are the Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 78-1, which the Court ordered in NTSF Seafoods Joint Stock Co. v. United States ("NTSF"), 44 CIT ––––, 487 F. Supp. 3d 1310 (2020). For the following reasons, the Court sustains the Remand Results.

ISSUES PRESENTED

The Court reviews the following issues:

1. Whether Commerce's determination to grant offsets for NTSF's fish oil and fish meal byproducts is supported by substantial evidence; and

2. Whether Commerce's determination that the GTA Data are the best available information to calculate a surrogate value for NTSF's fish oil and fish meal byproducts is supported by substantial evidence.

BACKGROUND

The Court presumes familiarity with the facts and procedural history set forth in its prior opinion and recounts the facts relevant to the Court's review of the Remand Results. See NTSF, 44 CIT at –––– – ––––, 487 F. Supp. 3d at 1314–16.

In the Final Results, Commerce granted offsets for fish head and bone byproducts when calculating normal value for NTSF, but denied offsets for fish oil and fish meal byproducts because Commerce determined that NTSF failed to demonstrate that NTSF actually produced and sold fish oil and fish meal byproducts during the last three months of the period of review. Final IDM at 52–53. Plaintiffs challenged Commerce's determination. The Court held in NTSF that Commerce's denial of byproduct offsets for fish oil and fish meal was unsupported by substantial evidence in light of potentially contradictory evidence on the record and viewing the record as a whole, and remanded the case for further proceedings. NTSF, 44 CIT at –––– – ––––, 487 F. Supp. 3d at 1321–23.

Commerce filed the Remand Results on March 23, 2021. On remand, Commerce reversed its Final Results determination and granted NTSF byproduct offsets for fish oil and fish meal. See Remand Results at 1. Based on Commerce's remand redetermination, Commerce calculated a revised dumping margin of $1.28 per kilogram for NTSF. Id. at 16. Commerce based the all-others rate applied to separate rate-eligible respondents not selected for individual examination on NTSF's calculated margin. Id. at 16–17; see Final Results, 84 Fed. Reg. at 18,008 ; Final IDM at 49. Commerce adjusted the all-others rate applied to Vinh Quang accordingly. Remand Results at 17.

JURISDICTION AND STANDARD OF REVIEW

The Court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c). The Court shall hold unlawful any determination found to be unsupported by substantial evidence on the record or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i). The Court also reviews determinations made on remand for compliance with the Court's remand order. Ad Hoc Shrimp Trade Action Comm. v. United States, 38 CIT ––––, ––––, 992 F. Supp. 2d 1285, 1290 (2014), aff'd, 802 F.3d 1339 (Fed. Cir. 2015).

DISCUSSION

Plaintiffs and Defendant United States ("Defendant") ask the Court to sustain the Remand Results. See Pls.’ Comments Final Results Remand Redetermination, ECF No. 85; Def.’s Resp. Supp. Remand Redetermination, ECF No. 90. Defendant-Intervenors Catfish Farmers of America, Alabama Catfish Inc., America's Catch, Consolidated Catfish Companies LLC, Delta Pride Catfish, Inc., Guidry's Catfish, Inc., Heartland Catfish Company, Magnolia Processing, Inc., and Simmons Farm Raised Catfish, Inc. (collectively, "Defendant-Intervenors" or "Def.-Intervs.") filed Defendant-Intervenors’ Comments in Opposition to Remand Results, ECF Nos. 83, 84 ("Def.-Intervs.’ Cmts.").

I. Commerce's Determination to Grant Byproduct Offsets

Commerce determined on remand that the record supported granting an offset for NTSF's sales of fish oil and fish meal byproducts during the last three months of the period of review. See Remand Results at 4–6. Defendant-Intervenors argue that NTSF failed to reconcile its byproduct data and support an offset as required and, therefore, Commerce's redetermination granting offsets for fish oil and fish meal byproducts is unsupported by substantial evidence. Def.-Intervs.’ Cmts. at 3–10.

For antidumping proceedings in which the subject merchandise is exported from a non-market economy and available information does not permit the normal value of subject merchandise to be determined using sales in the home market, normal value is based on the value of the factors of production utilized in the production of the subject merchandise. 19 U.S.C. § 1677b(c)(1). The statute provides that Commerce shall value factors of production based on the best available information from a surrogate market economy country or countries. Id.

The statute states that factors of production include, but are not limited to: hours of labor required; quantities of raw materials employed; amounts of energy and other utilities consumed; and representative capital cost, including depreciation. Id. § 1677b(c)(3). As not all raw materials are incorporated into the final product, Commerce provides offsets for byproducts generated during the production process. See Arch Chems., Inc. v. United States, 33 CIT 954, 956, 2009 WL 2018014 (2009) ; Ass'n of Am. School Paper Suppliers v. United States, 32 CIT 1196, 1205, 2008 WL 5102258 (2008) ; see also Tianjin Magnesium Int'l Co. v. United States, 34 CIT 980, 993, 722 F.Supp.2d 1322, 1336-37 (2010) (stating that the antidumping statute does not prescribe a method for calculating byproduct offsets, instead leaving the decision to Commerce). The producer bears the burden of substantiating any byproduct offsets and must present Commerce with sufficient information to support its claims for offsets. See Arch Chems., 33 CIT at 956, 2009 WL 2018014. The producer must show that the byproduct of the production of the subject merchandise "is either resold or has commercial value and re-enters the [producer's] production process." Id.; see Am. Tubular Prods., LLC v. United States, 38 CIT ––––, ––––, Slip Op. 14-116 at 17, 2014 WL 4977626 (Sept. 26, 2014).

Commerce determined on remand that NTSF reconciled its byproduct reporting properly and substantiated an offset because NTSF's reporting accounted for the byproducts generated during the period of review. Remand Results at 4–6, 10–12. Commerce cited a processing contract between NTSF and an unaffiliated third-party processor for the production of fish oil and fish meal, which was in effect during the last three months of the period of review. See id. at 5–6 (citing Frozen Fish Fillets from Vietnam – NTSF's Resp. to the Department's Suppl. Sections C & D Questionnaire at Supp CD-43, Ex. Supp CD-47, PR 370, CR 179–97 (May 15, 2018) ("NTSF Suppl. Resp.")).¹ Based on its review of NTSF's processing contract, Commerce determined that NTSF did not sell fish head and bone byproducts to the processor and that fish oil and fish meal byproducts were produced pursuant to a tolling agreement. Id. (citing NTSF Suppl. Resp. Ex. Supp CD-47). Commerce also cited NTSF's production data in support of its determination that during the last three months of the period of review, NTSF transferred fish head and bone byproducts to the unaffiliated processor for processing into fish oil and fish meal byproducts, which NTSF subsequently sold. See id. at 11 (citing Frozen Fish Fillets from Vietnam – Section D Resp. & Section D App....