Stanley Works (Langfang) Fastening Sys. Co. v. United States

348 F.Supp.3d 1243

The STANLEY WORKS (LANGFANG) FASTENING SYSTEMS CO., LTD. and Stanley Black & Decker, Inc., Plaintiffs,

v.UNITED STATES, Defendant.

Slip Op. 18–135

Court No. 16-00053

United States Court of International Trade.

Dated: October 10, 2018

Lawrence J. Bogard, Neville Peterson LLP of Washington, DC, argued for plaintiff. With him on the brief was Peter J. Bogard.

Sosun Bae, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Zachary Simmons, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION

Eaton, Judge:

Before the court is The Stanley Works (Langfang) Fastening Systems Co., Ltd. and Stanley Black & Decker, Inc.'s (collectively, "Stanley" or "plaintiff") motion for judgment on the administrative record challenging the final results of the United States Department of Commerce ("Commerce" or the "Department") in Certain Steel Nails From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2013-2014 , 81 Fed. Reg. 14,092 (Dep't Commerce Mar. 16, 2016) ("Final Results"). This case is a complement to Stanley Works (Langfang) Fastening Sys. Co. v. United States , 42 CIT ––––, 333 F.Supp.3d 1329, Slip Op. 18-99, 2018 WL 3870110 (Aug. 13, 2018) (" Stanley I "), by which were decided each of the substantive issues raised here. In Stanley I , the Court had the benefit of, and cited to, some of the scholarly materials Stanley seeks to have introduced on the record here.¹

Stanley objects to the Final Results generally as not conforming to the statute or Commerce's regulations. Stanley also claims that Commerce unlawfully rejected portions of its original case brief. See Pl.'s Br. 18-49. Defendant, the United States (the "government" or "defendant"), on behalf of Commerce, argues that (1) Commerce lawfully rejected Stanley's original case brief; (2) that 19 C.F.R. § 351.414(f) (2007) does not apply to administrative reviews; and (3) Commerce reasonably interpreted the relevant statute and regulations when conducting its "differential pricing" analysis to conclude that Stanley had engaged in targeted dumping. Def.'s Br. 4-6.

This court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012). For the reasons set forth below, Commerce's Final Results are sustained.

BACKGROUND

In August 2008, Commerce issued an antidumping duty order covering certain steel nails from the People's Republic of China. See Certain Steel Nails From the People's Republic of China , 73 Fed. Reg. 44,961 (Dep't Commerce Aug. 1, 2008) (order). On September 30, 2014, Commerce initiated the sixth administrative review of the order, which covered the period August 1, 2013 to July 31, 2014. See Initiation of Antidumping and Countervailing Duty Administrative Reviews , 79 Fed. Reg. 58,729 (Dep't Commerce Sept. 30, 2014). Stanley was named as one of two mandatory respondents for individual review. P.R. Doc. 27.

Commerce published notice of the Preliminary Results on September 4, 2015. See Certain Steel Nails From the People's Republic of China , 80 Fed. Reg. 53,490 (Dep't Commerce Sept. 4, 2015) P.D. 216, and accompanying Preliminary Decision Memorandum, P.D. 217 ("Preliminary Results"). In its Preliminary Results, Commerce, using its differential pricing analysis,² found that 76.8 percent of Stanley's U.S. sales passed Commerce's Cohen's d test, and therefore, concluded that there was a pattern of export prices for comparable merchandise that differed significantly among purchasers, regions, or periods of time. Preliminary I & D Memo at 32-35.

Moreover, Commerce preliminarily found that a comparison of the weighted-average of an exporter's normal values to the weighted-average of its export prices for comparable merchandise (the "A-A" method) could not account for the price difference because Stanley's weighted-average dumping margin crossed the de minimis threshold when calculated under an "alternative" comparison method (i.e., the A-T method). See Preliminary Results Analysis Mem., P.R. 218 at 13-14. Thus, because the total value of Stanley's "passing" sales represented 66 percent or more of the total value of its total U.S. sales, Commerce compared the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions (the "A-T" method), and, applying the A-T method to all of Stanley's sales, preliminarily calculated a weighted-average dumping margin of 12.51 percent for Stanley.

On October 30, 2015, following the issuance of the Preliminary Results, Stanley submitted its case brief to Commerce, largely disputing the legality of Commerce's differential pricing analysis. See Rejected and Retained Case Br., C.R. 203. Stanley supported these arguments with, among other things, citations to various academic sources. On November 18, 2015, Commerce rejected Stanley's brief because "it reference[d] new factual information," which, "[p]ursuant to 19 CFR 351.301(c)(5)" was due "no later than July 29, 2015, 30 days before the preliminary results of th[e] review." As a result, Commerce instructed Stanley to re-file the brief without the rejected material. On November 20, 2015, Stanley resubmitted a redacted case brief. See Redacted Case Brief, P.R. 205.

On March 16, 2016, Commerce published its final results. See Final Results, 81 Fed. Reg. at 14,092. On April 4, 2016, Commerce published a notice to correct certain errors in the Final Results margin chart. 81 Fed. Reg. 19,136 (Dep't Commerce Apr. 4, 2016). In the Final Results, Commerce, again using its differential pricing analysis, found that 76.8 percent of Stanley's sales passed the Cohen's d test, and, using the A-T method, calculated a weighted-average dumping margin of 11.95 percent. See Corrections Notice, 81 Fed. Reg. at 19,136 ; see also Final Results Analysis Memo at 2, C.R. 210. Had Commerce used the A-A method, Stanley's margin would have been zero.

STANDARD OF REVIEW

"The court shall hold unlawful any determination, finding, or conclusion 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) (2012). Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB , 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

DISCUSSION

I. Commerce's Rejection of Stanley's Case Brief

As a procedural matter, Stanley first argues that Commerce unlawfully rejected its original case brief. Pls.' Br. 10. Stanley maintains that when Commerce rejects factual information pursuant to its regulations, it must "provide written notice stating the reasons for rejection," and that Commerce failed to do so here. Pls.' Br. 10 ("Commerce did not explain its basis for rejecting Stanley's Case Brief. [Commerce] did not articulate any standard for determining that the authorities were ‘factual information.’ " (citing 19 C.F.R. § 351.301(c)(5)(i)³ ) ). Thus, for plaintiff, Commerce's "unsubstantiated assertion" that the rejected material constituted "factual information" fails the regulation's requirement, and was therefore unlawful. Pls.' Br. 10.

Next, plaintiff argues that, even if the court accepts Commerce's rejection notice as lawful, the rejected authorities themselves do not meet any definition of "factual information" under the regulations. Pls.' Br. 10 (citing 19 C.F.R. § 351.102(b)(21) ). Plaintiff claims that the intended definition of "factual information" is "information of a respondent-specific nature," as evidenced by the 2013 promulgation of the current regulation. Pls.' Reply Br. 5 ("[The regulatory] deadline reflects Commerce's interest in ensuring that it has sufficient time to confirm the accuracy of the information submitted, i.e. , information of a respondent-specific nature." (citing Definition of Factual Information and Time Limits for Submission of Factual Information, 78 Fed. Reg. 21,246, 21,247 (Dep't Commerce April 10, 2013) ) ). Thus, for plaintiff, because the rejected sources are not respondent-specific, they should be treated like administrative determinations or judicial decisions (i.e. , "matter[s] of public record and publically available") and be accepted without physical copies on the record. Pls.' Br. 11; see also Pls.' Reply Br. 5.

Finally, plaintiff claims that Commerce's rejection here conflicts with its own past practice. Pls.' Br. 11 ("Commerce has relied on and/or responded to the bulk of these authorities in other proceedings without physical copies being present on the administrative record." (citing Certain Steel Nails From the People's Republic of China: Final Results of Fourth Antidumping Administrative Review , 79 Fed. Reg. 19,316 (Dep't Commerce Apr. 8, 2014) ("Fourth Review"); Certain Steel Nails From the People's Republic of China; Final Results of Antidumping Administrative Review 2012-2013, 80 Fed. Reg. 18,816 (Dep't Commerce Apr. 8, 2015) ("Fifth Review") ) ).⁴

For the court, the materials Stanley hoped to put on the record were closer to being part of its legal argument than factual information as defined in 19 C.F.R. § 351.102(b)(2). That is, these articles are referenced by Stanley to support its argument that Commerce's differential pricing analysis did not conform to the statute. Nonetheless, because of the recent decision in Stanley I , the court need not determine the lawfulness of Commerce's rejection letter and its finding that the rejected sources constitute "factual information" under the regulations. Stanley I involved the same arguments with respect to Commerce's differential pricing analysis as those presented here. Unlike here, however, plaintiff timely submitted physical...