Qingdao Sentury Tire Co. v. United States

577 F.Supp.3d 1343

QINGDAO SENTURY TIRE CO., LTD., Sentury Tire USA Inc., Sentury (Hong Kong) Trading Co., Limited, Plaintiffs,andPirelli Tyre Co., Ltd., Pirelli Tyre S.p.A., and Pirelli Tire LLC, Consolidated Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 22-48

Consol. Court No. 18-00079

United States Court of International Trade.

May 19, 2022

Plaintiffs Qingdao Sentury Tire Co., Ltd., Sentury Tire USA Inc., and Sentury (Hong Kong) Trading Co., Limited filed no comments on the remand results.

Daniel L. Porter and Ana M. Amador Gil, Curtis, Mallet-Prevost, Colt & Mosle, LLP, of Washington, D.C., for Consolidated Plaintiffs Pirelli Tyre Co., Ltd., Pirelli Tyre S.p.A., and Pirelli Tire LLC.

Ashley Akers, Trial Attorney, 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, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Ayat Mujais, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

OPINION

Choe-Groves, Judge:

This action arises from the administrative review by the U.S. Department of Commerce ("Commerce") of certain passenger vehicle and light truck tires from the People's Republic of China ("China"). Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China ("Final Results"), 83 Fed. Reg. 11,690 (Dep't of Commerce Mar. 16, 2018) (final results of antidumping duty administrative review and final determination of no shipments; 2015–2016); see also Certain Passenger Vehicle and Light Truck Tires from People's Republic of China: Issues and Decision Mem. Final Results 2015–2016 Antidumping Duty Admin. Review (Mar. 9, 2018) ("Final IDM"), ECF No. 15-5; Decision Mem. Prelim. Results Antidumping Duty Admin. Review: Certain Passenger Vehicle and Light Truck Tires from People's Republic of China (Aug. 31, 2017), PR 420.¹

Before the Court are the Final Results of Redetermination Pursuant to Court Order

("Third Remand Results"), ECF Nos. 33, 34, ordered in Qingdao Sentury Tire Co. v. United States ("Qingdao Sentury"), 45 CIT ––––, 539 F. Supp. 3d 1278 (2021) ("Remand Order").² The Third Remand Results concern only Consolidated Plaintiffs Pirelli Tyre Co., Ltd. ("Pirelli Tyre Co."), Pirelli Tire LLC, and Pirelli Tyre S.p.A. ("Consolidated Plaintiffs"), which filed comments thereon. Consol. Pls.’ Comments Supp. Remand Redetermination Results ("Consolidated Plaintiffs’ comments" or "Consol. Pls.’ Cmts."), ECF No. 36. Defendant United States ("Defendant") filed a response to Consolidated Plaintiffs’ comments. Def.’s Comments Supp. Remand Redetermination ("Def.’s Cmts."), ECF No. 37. For the following reasons, the Court sustains the Third Remand Results.

ISSUES PRESENTED

On third remand, this case presents the following issues on the question of whether Pirelli Tyre Co. was wholly foreign-owned or located in a market economy prior to the China National Chemical Corporation ("Chem China") acquisition:

1. Whether a separate rate analysis should be conducted for Pirelli Tyre Co. for the period of January 2015 to October 2015;

2. Whether the presumption of Chinese government control applies to Pirelli Tyre Co. prior to the Chem China acquisition; and

3. If so, whether there was de jure or de facto Chinese government control over Pirelli Tyre Co. prior to the Chem China acquisition.

BACKGROUND

The Court assumes familiarity with the underlying facts and procedural history of this case and recites the facts relevant to the Court's review of the Third Remand Results. See Qingdao Sentury, 45 CIT at ––––, 539 F. Supp. 3d at 1280–82 ; see also Shandong Yongtai II, 44 CIT at ––––, 487 F. Supp. 3d at 1344–46 ; Shandong Yongtai Grp. Co. v. United States ("Shandong Yongtai I"), 43 CIT ––––, ––––, 415 F. Supp. 3d 1303, 1306–07, 1312–18 (2019) ; Shandong Yongtai Severance, 45 CIT at ––––, 493 F. Supp. 3d at 1344–45.

Consolidated Plaintiffs applied for separate rate status in the administrative review, but Commerce determined that Pirelli Tyre Co. did not qualify for separate rate status because of de facto Chinese government control through Chem China's ownership of Pirelli S.p.A. Shandong Yongtai I, 43 CIT at ––––, 415 F. Supp. 3d at 1316 ; see also Final IDM at 27–28; Consolidated Plaintiffs’ Separate Rate Application (Nov. 17, 2016) ("Consol. Pls.’ SRA"), PR 192–93. Commerce also denied Pirelli Tyre Co. separate rate status for the segment of the period of review before Chem China's acquisition of Pirelli Tyre Co. in October 2015 because Commerce asserted that Consolidated Plaintiffs had not provided complete ownership information as to Pirelli Tyre Co.’s intermediate and ultimate owners from January through October 2015. Shandong Yongtai I, 43 CIT at ––––, 415 F. Supp. 3d at 1317–18 ; see also Final IDM at 28. Commerce determined that Pirelli Tyre Co.’s separate rate status claim for the period of time before Chem China's acquisition was not supported by evidence on the record. Shandong Yongtai I, 43 CIT at ––––, 415 F. Supp. 3d at 1317–18 ; see also Final IDM at 28. Commerce assigned Consolidated Plaintiffs the China-wide entity rate for the entire period of review. Shandong Yongtai I, 43 CIT at ––––, 415 F. Supp. 3d at 1318. The Court remanded Commerce's denial of Consolidated Plaintiffs’ separate rate status for Commerce to reconsider the criteria for de jure and de facto governmental control. Id. at ––––, 415 F. Supp. 3d at 1317. The Court did not reach the issue of Consolidated Plaintiffs’ request for separate rate status for the period before Chem China's acquisition. Id. at ––––, 415 F. Supp. 3d at 1318.

In the Final Results of Redetermination Pursuant to Remand ("Shandong Yongtai Remand Results"), Shandong Yongtai Docket, ECF Nos. 71, 72, Commerce maintained its determination of de facto Chinese government control and denied separate rate status to Pirelli Tyre Co. See Shandong Yongtai II, 44 CIT at ––––, 487 F. Supp. 3d at 1344–45. Commerce examined the record and noted that Chinese government-owned entities had majority ownership of Pirelli Tyre Co. Id. at ––––, 487 F. Supp. 3d at 1345; see also Shandong Yongtai Remand Results at 40. Commerce determined that Pirelli Tyre Co. failed to satisfy the third criterion of the de facto test, whether the respondent has autonomy from the government in making decisions regarding the selection of management. Shandong Yongtai II, 44 CIT at ––––, 487 F. Supp. 3d at 1345–46 ; see also Shandong Yongtai Remand Results at 28–29, 40–41. The Court sustained Commerce's determination denying separate rate status to Pirelli Tyre Co. Shandong Yongtai II, 44 CIT at ––––, 487 F. Supp. 3d at 1346. On second remand, Commerce did not address Consolidated Plaintiffs’ separate rate status before Chem China's acquisition, nor did Consolidated Plaintiffs comment on Commerce's draft remand results. Final Results of Redetermination Pursuant to Court Order ("Second Remand Results") at 2–3, ECF No. 21-1.

Consolidated Plaintiffs requested a ruling from the Court on Consolidated Plaintiffs’ alternate claim of partial separate rate status for the first ten months of the period of review prior to Chem China's acquisition of Pirelli Tyre Co. Qingdao Sentury, 45 CIT at ––––, 539 F. Supp. 3d at 1282. Consolidated Plaintiffs argued that they had provided documentation of corporate ownership prior to Pirelli Tyre Co.’s acquisition by Chem China, including a Sales and Purchase and Co-investment Agreement showing that Pirelli Tyre Co. was an Italian company prior to the Chem China acquisition in October 2015. Id. at ––––, 539 F. Supp. 3d at 1283 (citing Consol. Pls.’ Br. Supp. Mot. J. Agency R. at 50, Shandong Yongtai Docket, ECF Nos. 23, 24; Consol. Pls.’ SRA at 50–51, Attach. G(1)). For the period of review prior to Chem China's acquisition of Pirelli Tyre Co., the Court concluded that Commerce's separate rate analysis of Consolidated Plaintiffs was at odds with Commerce's stated practice regarding companies that are wholly foreign-owned or located in a market economy. Id. at ––––, 539 F. Supp. 3d at 1284. The Court remanded for Commerce to determine: (1) whether Consolidated Plaintiffs were wholly foreign-owned or located in a market economy prior to the Chem China acquisition; (2) whether a separate rate analysis should be conducted for the period from January 2015 through October 2015; (3) whether the presumption of Chinese governmental control applies to Consolidated Plaintiffs prior to Chem China's acquisition; and if so, (4) whether there was de jure or de facto Chinese governmental control over Consolidated Plaintiffs before Chem China's acquisition. Id. at ––––, 539 F. Supp. 3d at 1284.

STANDARD OF REVIEW

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii). The Court will uphold any determinations unless they are unsupported by substantial evidence on the record or are 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 727, 730, 992 F. Supp. 2d 1285, 1290 (2014), aff'd, 802 F.3d 1339 (Fed. Cir. 2015).

DISCUSSION

Commerce has statutory authority to determine if a country is a nonmarket economy pursuant to 19 U.S.C. § 1677(18). 19 U.S.C. § 1677(18) ; see also Sigma Corp. v. United States, 117 F.3d 1401, 1404–06 (Fed. Cir. 1997). In proceedings involving a nonmarket economy, such as China, Commerce employs a rebuttable presumption that all companies within the country are subject to government control and should be assigned a single, country-wide antidumping duty rate. See Sigma Corp., 117 F.3d at 1405. An exporter will receive the country-wide rate by default, unless it demonstrates affirmatively that the exporter maintains both de...