Vicentin S.A.I.C. v. United States

466 F.Supp.3d 1227

VICENTIN S.A.I.C. et al., Plaintiffs and Consolidated Plaintiff,

v. UNITED STATES, Defendant,andNational Biodiesel Board Fair Trade Coalition, Defendant-Intervenor and Consolidated Defendant-Intervenor.

Slip Op. 20-91

Consol. Court No. 18-00111

United States Court of International Trade.

July 1, 2020

Daniel L. Porter, Christopher A. Dunn, and Valerie S. Ellis, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for plaintiffs Vicentin S.A.I.C., Oleaginosa Morenos Hermanos S.A., and Molinos Agro S.A. With them on the brief was Kimberly A. Reynolds.

Gregory J. Spak and Jessica Lynd, White & Case LLP, of Washington, DC, for consolidated plaintiff LDC Argentina S.A.

Ann C. Motto, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of Counsel was Emma T. Hunter, Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Myles S. Getlan, Jack A. Levy, Thomas M. Beline, and Chase J. Dunn, Cassidy Levy Kent (USA) LLP, of Washington, DC, for defendant-intervenor and consolidated defendant-intervenor National Biodiesel Board Fair Trade Coalition.

OPINION AND ORDER

Kelly, Judge:

Before the court for review is the U.S. Department of Commerce's ("Commerce") remand redetermination pursuant to the court's order in Vicentin S.A.I.C. v. United States, 43 CIT ––––, 404 F. Supp. 3d 1323, 1343 (2019) (" Vicentin I"). See Final Results of Redetermination Pursuant to Ct. Remand, Jan. 31, 2020, ECF No. 79-1 ("Remand Results"). In Vicentin I, the court remanded for further consideration or explanation Commerce's final determination in the antidumping duty ("ADD") investigation of biodiesel from Argentina. See Vicentin I, 43 CIT at ––––, 404 F. Supp. 3d at 1327, 1334, 1343 ; see also Biodiesel from Argentina, 83 Fed. Reg. 8,837 (Dep't Commerce Mar. 1, 2020) (final determination of sales at less than fair value and final affirmative determination of critical circumstances, in part) ("Final Results") and accompanying Issues and Decisions Memo. for the [Fina Results ], A-357-820, Feb. 20, 2018, ECF No. 16-5 ("Final Decision Memo"). Specifically, the court ordered Commerce to further consider or explain its adjustment of constructed value by an estimated value for U.S. revenue related to the sale of renewable identification numbers ("RIN"), as well as its finding of a particular market situation ("PMS") that would justify disregarding soybean costs in Argentina. Vicentin I, 43 CIT at ––––, 404 F. Supp. 3d at 1343.

On remand, Commerce reconsidered its decision to account for RINs by increasing normal value (in this case constructed value), and instead, accounted for RINs by decreasing export and constructed export price ("U.S. Price"). See Remand Results at 3–16. Commerce further explained its PMS determination, maintaining that it is not obliged to demonstrate whether the distortion giving rise to the PMS was remedied by a countervailing duty ("CVD") imposed in the companion proceeding, and that there is otherwise no record evidence to support such a finding. See id. at 16–31. For the following reasons, the court sustains Commerce's decision to account for RINs by adjusting the U.S. Price, but remands Commerce's PMS determination for further explanation or reconsideration.

BACKGROUND

The court presumes familiarity with the facts of this case, as set out in the previous opinion ordering remand to Commerce, and now recounts the facts relevant to the court's review of the Remand Results. On March 1, 2018, Commerce published its final determination pursuant to its ADD investigation of biodiesel from Argentina. See Final Results, 83 Fed. Reg. at 8,837. Commerce selected Vicentin Group¹ and LDC Argentina S.A. ("LDC Argentina" or "LDC") as mandatory respondents. See Respondent Selection Memo at 3–5, PD 56, bar code 3568950-01 (May 3, 2017).² Commerce determined normal value by using constructed value after determining that a PMS in Argentina, arising from the Government of Argentina's ("GOA") regulatory control over biodiesel prices, rendered home market prices outside the ordinary course of trade. See Biodiesel From Argentina, 82 Fed. Reg. 50,391 (Dep't Commerce Oct. 31, 2017) (prelim. affirmative determination of sales at less than fair value, prelim. affirmative determination of critical circumstances, in part) ("Prelim. Results") and accompanying Decision Memo. for the [Prelim Results ] at 21–22, PD 353, bar code 3632930-01 (Oct. 19, 2017) ("Prelim. Decision Memo"). When calculating respondents' dumping margins, Commerce, relying on 19 C.F.R. § 351.401(c) (2015),³ increased the normal value (here, constructed value) of the subject merchandise to account for the estimated value of RINs.⁴ See Final Decision Memo at 11–14. Commerce viewed the estimated value of RINs as costs embedded in respondents' U.S. sales prices, and increased normal value to "neutralize" those embedded costs. See id. at 11–12. Further, when constructing normal value, Commerce determined that a PMS distorted the costs of soybeans, a primary input in biodiesel. Id. at 21–23; see also Prelim. Decision Memo at 19. Specifically, Commerce found that distortions caused by the GOA's export tax regime rendered the prices respondents paid for soybeans outside the ordinary course of trade. See Final Decision Memo at 21. Commerce thus adjusted respondents' cost of production by substituting a market-determined price for respondents' reported soybean prices. Id.

On May 15, 2018, Plaintiffs Vicentin S.A.I.C., Oleaginosa Morenos Hermanos S.A., and Molinos Agro S.A. (collectively "Vicentin") commenced the present action, which was later consolidated with an action brought by LDC Argentina.⁵ See Summons, May 15, 2018, ECF No. 1; Compl., May 16, 2018, ECF No. 7; Memorandum and Order, July 20, 2018, ECF No. 18. Vicentin and LDC Argentina challenged Commerce's decision to account for the RINs by increasing constructed value. See Pls.' Br. Supp. Mot. J. Agency R. Confidential Version at 1–2, 7–20, Oct. 29, 2018, ECF No. 26 ("Pls.' Moving Br."); Memo. of Points & Authorities Supp. Consol. Pl.'s Rule 56.2 Mot. J. Agency R. at 8, 10–21, Oct. 29, 2018, ECF No. 25-1 ("Consol. Pl.'s Moving Br."). Vicentin and LDC Argentina also challenged Commerce's methodology for determining constructed value in light of the agency's PMS finding regarding soybeans. See Pls.' Moving Br. at 20–38; Consol. Pl.'s Moving Br. at 10–21. Vicentin argued, inter alia, that Commerce's determination to disregard Vicentin's reported costs of soybeans in Argentina was unsupported by the record. Pls.' Moving Br. at 28–38.

In Vicentin I, the court remanded Commerce's final determination for further consideration or explanation. See Vicentin I, 43 CIT at ––––, 404 F. Supp. 3d at 1343. The court ruled that Commerce failed to identify its statutory authority for increasing constructed value to neutralize the value of RINs embedded in respondents' U.S. sales prices. See Vicentin I, 43 CIT at ––––, 404 F. Supp. 3d at 1329–34. The court also ruled that Commerce failed to adequately explain its determination that GOA's export tax regime caused a distortion giving rise to a PMS in light of the fact that the agency countervailed the GOA's program in the companion CVD proceeding. See id., 43 CIT at ––––, 404 F. Supp. 3d at 1340–43.

On January 31, 2020, Commerce published its remand redetermination. See generally Remand Results. On remand, Commerce reconsidered its decision to neutralize the value of RINs in respondents' U.S. sales by increasing constructed value, and instead decided to remove the value of RINs by decreasing the net U.S. Price. See Remand Results at 8–16. Commerce explained 19 U.S.C. § 1677a(a) and (b) direct the agency to determine the price at which merchandise is first sold, and that it is thus authorized to deduct the value of RINs from the invoice price for U.S. sales of biodiesel from Argentina in order to "isolate a U.S. starting price for biodiesel[.]" See id. at 9–11, 39. Additionally, Commerce restated its position that, despite having countervailed the GOA's export tax regime in the concurrent proceeding, disregarding reported costs of soybeans in Argentina in light of a PMS, without accounting for the possibility of a double remedy, is reasonable because the ADD and CVD statutes serve different purposes. See Remand Results at 22–31.⁶

Vicentin and LDC Argentina challenge Commerce's asserted authority to adjust for the value of RINs when determining U.S. Price as well as its support for its calculations. See Pls.' Cmts. on [Remand Results ] Confidential Version at 3–14, Mar. 2, 2020, ECF No. 82 ("Pls.' Br."); [Consol. Pl.'s] Cmts. on [Remand Results ] at 2–7, Mar. 2, 2020, ECF No. 81 ("Consol. Pl.'s Br."). Further, Vicentin and LDC Argentina challenge Commerce's adjustments for the value of RINs as unsupported by substantial evidence. See Pls.' Br. at 14–19; Consol. Pl.'s Br. at 7–10. Vicentin and LDC Argentina also challenge Commerce's continued determination to disregard reported costs of soybeans in Argentina to remedy a PMS. See Pls.' Br. at 20–26; Consol. Pl.'s Br. at 13–16.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to section 516a(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012)⁷ and 28 U.S.C. § 1581(c) (2012), which grant the court authority to review actions contesting the final determination in an ADD investigation. 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). "The results of a redetermination pursuant to court remand are also reviewed ‘for compliance with the...