Tianjin Magnesium Int'l Co. v. United States

836 F.Supp.2d 1377

34 ITRD 1453

TIANJIN MAGNESIUM INTERNATIONAL CO., LTD., Plaintiff,

v. UNITED STATES, Defendant,andU.S. Magnesium, LLC, Defendant–Intervenor.

United States Court of International Trade.

Slip Op. 12–54.

Court No.: 09–00012.

April 25, 2012.

Riggle & Craven, (David A. Riggle), Chicago, IL, for Tianjin Magnesium International Co., Ltd., Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Washington, DC, Claudia Burke, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, (Renee Gerber); Thomas M. Beline, Office of Chief Counsel for Import Administration, United States Department of Commerce, Of Counsel, for the United States, Defendant.

King & Spalding, LLP, (Stephen A. Jones and Jeffery B. Denning), Washington, DC, for U.S. Magnesium, LLC, Defendant–Intervenor.

OPINION

TSOUCALAS, Senior Judge:

This matter comes before the Court upon the Final Results of Redetermination Pursuant to Voluntary Remand: Pure Magnesium from the People's Republic of China (“Second Redetermination”) issued by the Department of Commerce (“Commerce”) on October 31, 2011. Plaintiff, Tianjin Magnesium International Co., Ltd. (“Tianjin”) filed Comments asserting that the Second Redetermination was without support and requesting that the Court remand this matter to Commerce for further proceedings. Defendant–Intervenor, U.S. Magnesium, LLC (“U.S. Magnesium”) filed Comments stating that Commerce's decision was well supported, and urging the Court to affirm the Second Redetermination without modification. For the reasons set forth below, the Court concludes that the Second Redetermination is supported by substantial evidence and otherwise in accord with the law and affirms Commerce's decision.

BACKGROUND

This case involves an administrative review of the antidumping order on pure magnesium from the People's Republic of China for the period from May 1, 2006, through April 30, 2007. See Pure Magnesium from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 73 Fed.Reg. 76,336 (Dec. 16, 2008) (“ 2006–2007 Final Results ”). At the conclusion of the administrative review, Tianjin, a seller of pure magnesium for export, was assigned a rate of 0.63%, and appeals were filed by both Tianjin and U.S. Magnesium. On August 9, 2010, the Court remanded the case for further proceedings after concluding that not all of the surrogate values relied on in the 2006–2007 Final Results were supported. See Tianjin Magnesium Int'l Co., Ltd. v. United States, 34 CIT ––––, 722 F.Supp.2d 1322 (2010) (“Tianjin I ”). On February 11, 2011, Commerce issued its Final Results of Redetermination Pursuant to Court Remand Pure Magnesium from the People's Republic of China (“First Redetermination”). While this Court's review of that First Redetermination was pending, Commerce requested that the matter again be remanded so it could determine whether to reopen the 2006–2007 administrative review based on the factors announced by the United States Court of Appeals for the Federal Circuit in Home Prods. Int'l, Inc. v. United States, 633 F.3d 1369 (Fed.Cir.2011). The Court granted Commerce's request.

To best understand the issues weighed by Commerce in this most recent remand, attention must be given to events that occurred during the first remand. The Court first remanded this case, in part, based on its conclusion that the record contained inadequate support for the valuation given to waste magnesium, a manufacturing process byproduct the sale of which could offset the normal value. Tianjin I, 34 CIT at ––––, 722 F.Supp.2d at 1336. Whether Tianjin was entitled to the offset was not in question when this matter was first remanded.

Following the Court's remand in August, 2010, Commerce concluded that there was not adequate evidence in the record to properly value the waste magnesium, and it issued to Tianjin a supplemental questionnaire. Second Redetermination at 4. In its response to that supplemental questionnaire, Tianjin continued to claim entitlement to the waste magnesium byproduct offset, and it provided documentation supporting that claim such as sales invoices, sales ledger entries, and other accounting records. See Response to the Supplemental By-product Questionnaire by Tianjin Magnesium International, Co., Ltd. (Oct. 19, 2010), Public Rec. 6, Confidential Rec. 2 (“Supplemental Response”).¹

On November 2, 2010, U.S. Magnesium filed its Rebuttal Factual Information and Petitioner's Comments On TMI's Supplemental Byproduct Response (Nov. 2, 2010), PR 10 (“Rebuttal”). U.S. Magnesium's Rebuttal included a copy of Commerce's verification report from the administrative review for the 2007–2008 period of review. See Verification of the Sales and Factors Responses of Tianjin Magnesium International, Ltd. in the 2007–2008 Administrative Review of the Antidumping Duty Order on Pure Magnesium from the People's Republic of China (Nov. 4, 2009), Rebuttal, Exhibit 1 (“2007–2008 Verification Report”). In the 2007–2008 Verification Report, Commerce stated that it was notified by Tianjin's suppliers that there had been no byproduct sales prior to April 2007. In other words, there were no byproduct sales during the 2006–2007 period of review at issue in this case. Commerce stated that this disclosure was made in Tianjin's presence. Second Redetermination at 14.

Based on this information, U.S. Magnesium argued that Tianjin was not entitled to the byproduct offset. In support, U.S. Magnesium pointed out that Tianjin's Supplemental Response, in which it asserted its entitlement to a byproduct offset, was filed more than a year after the 2007–2008 Verification Report was issued, and therefore Tianjin must have been aware that there were no sales entitling it to an offset. See Rebuttal at 9. Commerce decided, however, that it could not consider the 2007–2008 Verification Report, because it did not exist at the time Commerce made its initial determination in the 2006–2007 Final Results. First Redetermination at 17. In the First Redetermination, Commerce still considered Tianjin eligible for the byproduct offset.

Review of this First Redetermination was pending when Commerce sought another remand to consider reopening the 2006–2007 administrative review pursuant to the factors in Home Products, which is the remand currently at issue. On remand, Commerce determined that there existed clear and convincing evidence sufficient to make a prima facie case that the 2006–2007 administrative review was taintedby fraud. Commerce specifically relied on the information set forth above that there had, in fact, been no byproduct sales during the 2006–2007 period, as well as evidence that the vouchers submitted to show such sales were fabricated. Second Redetermination at 9–10. This evidence led Commerce to conclude that Tianjin intentionally misrepresented its entitlement to a byproduct offset, and that it did so to lower its margin. Id. at 10. Commerce also stated that although it normally considers its administrative reviews final and conclusive, this case presented circumstances weighing in favor of reopening the review. Commerce noted that Tianjin's misrepresentations were material because when relied on by Commerce, they resulted in a lower margin for Tianjin. Id. at 14–15. Commerce also concluded that Tianjin's fraud was discovered within a reasonable time, and noted that Tianjin's entries from the 2006–2007 period of review remained unliquidated because of an injunction. Id. at 15–16.

Based on this evidence, Commerce determined that it was appropriate to reopen the record of the 2006–2007 administrative review. Commerce prepared draft results wherein it concluded that Tianjin was not entitled to the byproduct offset and calculated Tianjin's margin to be 21.24%. Id. at 18. However, after receiving comments from the parties, Commerce revised its determination and concluded that Tianjin's behavior significantly impeded the review pursuant to Section 766(a)(2)(C) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677e (a)(2)(C) (2006).² Second Redetermination at 27. Pursuant to 19 U.S.C. § 1677e(b), Commerce further concluded that Tianjin failed to cooperate to the best of its ability, and applied an adverse facts available rate of 111.73%, which rate had already been calculated for a respondent other than Tianjin in the 2006–2007 review.

STANDARD OF REVIEW

As stated in Tianjin I, the Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(iii). Additionally, the Court will uphold Commerce's determinations in administrative reviews unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

ANALYSIS

Whether Commerce was justified in reopening the 2006–2007 review turns on an interpretation of the Home Products decision. In that decision, the Court of Appeals dealt with the question of whether remand is required when evidence is presented that the proceedings below were tainted by material fraud. Stating that the Court of International Trade's discretion on whether to remand is not unlimited, the Court of Appeals held that

where a party brings to light clear and convincing new evidence sufficient to make a...