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

503 F.Supp.3d 1255

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. 21-33

Consol. Court No. 18-00111

United States Court of International Trade.

March 25, 2021

Daniel L. Porter, Christopher A. Dunn, James P. Durling, 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.

Gregory J. Spak, White & Case LLP, of Washington, DC, for consolidated plaintiff LDC Argentina S.A. Also on the brief was Jessica Lynd.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. Also on the brief were Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of Counsel was Daniel J. Calhoun, Assistant Chief Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

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

Claire R. Kelly, Judge

Before the court for review are the final results of the U.S. Department of Commerce's ("Commerce") second remand redetermination pursuant to the court's order in Vicentin S.A.I.C. v. United States, 44 CIT ––––, 466 F. Supp. 3d 1227 (2020) (" Vicentin II"). See Final Results of Redetermination Pursuant to Ct. Remand [in Vicentin II ] Confidential Version, Nov. 12, 2020, ECF No. 107-1 ("Second Remand Results"). In Vicentin II, the court remanded for further explanation or reconsideration Commerce's decision—when determining the normal value (here, constructed value) of biodiesel from Argentina—to disregard reported costs for soybeans in Argentina, and to instead use world market prices for soybeans as a means of correcting for a cost distortion caused by a particular market situation ("PMS"). See 44 CIT at ––––, 466 F. Supp. 3d at 1242–46. Since Commerce countervailed the export tax regime giving rise to the PMS in a concurrent countervailing duty ("CVD") proceeding, the court instructed Commerce to either reconsider its PMS adjustment or further explain why the adjustment is necessary given that the distortion caused by the subsidy may have already been cured by the CVD. See id. On remand, Commerce, under respectful protest,¹ conducts a "pass-through" analysis of prices for U.S. sales of subject Argentine biodiesel to demonstrate that the countervailed export tax regime did not affect the difference between the constructed value of the merchandise and U.S. prices in this instance. See Second Remand Results at 4–17. According to Commerce, a showing that the subsidy at issue did not affect U.S. prices assuages the court's concerns that the CVDs remedying those subsidies also cures the same harm addressed by the PMS adjustment here. See id. For the following reasons, Commerce's second remand redetermination is sustained.

BACKGROUND

The court presumes familiarity with the facts as set out in its previous opinions ordering remand to Commerce, and now recounts the facts relevant to the court's review of the Second Remand Results. See Vicentin II, 44 CIT at ––––, 466 F. Supp. 3d at 1230–33 ; see also Vicentin S.A.I.C. v. United States, 43 CIT ––––, ––––, 404 F. Supp. 3d 1323, 1327–29 (2019) (" Vicentin I"). On March 1, 2018, Commerce published its final determination pursuant to its less-than-fair-value ("LTFV") investigation of biodiesel from Argentina. See Biodiesel from Argentina, 83 Fed. Reg. 8,837 (Dep't Commerce Mar. 1, 2020) (final determination of sales at [LTFV] and final affirmative determination of critical circumstances, in part) ("Final Results") and accompanying Issues and Decisions Memo. for the [Final Results ], A-357-820, Feb. 20, 2018, ECF No. 16-5 ("Final Decision Memo"). Commerce calculated estimated weighted-average dumping margins of 60.44 and 86.41 percent for mandatory respondents LDC Argentina S.A. ("LDC Argentina" or "LDC") and Vicentin S.A.I.C.,² respectively, and an estimated all-others margin of 74.73 percent. Final Results, 83 Fed. Reg. at 8,838. Pursuant to U.S. Court of International Trade Rule 56.2, Vicentin S.A.I.C., Oleaginosa Morenos Hermanos S.A., and Molinos Agro S.A. (collectively "Vicentin") as well as LDC Argentina, commenced this consolidated action challenging Commerce's final determination. See generally [Vicentin's] Mot. J. Agency R., Oct. 29, 2018, ECF No. 26; Rule 56.2 Mot. J. Agency R. on Behalf of Consol. Pl. [LDC Argentina], Oct. 29, 2018, ECF No. 25.

Vicentin I remanded Commerce's final determination for further explanation or reconsideration. See 43 CIT at ––––, 404 F. Supp. 3d at 1343. The court held that Commerce's adjustment to constructed value to neutralize the value of renewable identification numbers ("RINs")³ reflected in prices for U.S. sales of biodiesel was unlawful. See Vicentin I, 43 CIT at ––––, 404 F. Supp. 3d at 1329–35. Moreover, although the court held that Commerce's finding that a PMS arising from the Government of Argentina's ("GOA") export tax regime distorted the reported costs of soybeans (a primary input in the production of biodiesel), as well as Commerce's consequent reliance on market-determined prices for soybeans to determine the constructed value of biodiesel, were not precluded by statute, see id. at ––––, 404 F. Supp. 3d at 1334–37, and that the PMS finding was lawful, see id. at ––––, 404 F. Supp 3d at 1337–40, the court held that Commerce's determination was unsupported by substantial evidence because Commerce failed to reasonably explain how the purported market-distortion was not already cured by CVDs imposed on the export tax regime in a concurrent CVD case. See id. at ––––, 404 F. Supp. 3d at 1340–43.

Vicentin II sustained in part and remanded in part Commerce's first remand redetermination. See 44 CIT at ––––, 466 F. Supp. 3d at 1233–46. The court sustained Commerce's decision to neutralize the difference in value between U.S. sales of biodiesel and foreign market sales of biodiesel owing to premiums placed on RIN-eligible U.S. sales by reducing U.S. prices by an estimated value for RINs—as well as Commerce's methodology for calculating the adjustment. See id. at ––––, 466 F. Supp. 3d at 1233–42. However, the court remanded for further explanation or reconsideration Commerce's refusal to explain why an unadjusted cost-based PMS remedy in this case was necessary even though the export tax regime giving rise to the cost distortion was countervailed by duties imposed pursuant to a concurrent CVD proceeding. See id. at ––––, 466 F. Supp. 3d at 1242–46. The court observed that Commerce's explication of the different purposes of the ADD and CVD regimes did not address the court's concerns regarding the reasonableness of Commerce remedying the effects of a domestic subsidy that may have already been cured in the concurrent CVD proceeding. See id. at ––––, 466 F. Supp. 3d at 1244.

On November 13, 2020, Commerce filed its second remand redetermination. See generally Second Remand Results. Commerce, under protest, sought to comply with the court's remand order in Vicentin II by conducting a pass-through analysis of U.S. prices. See id. at 8–17. On December 14, 2020, LDC Argentina filed comments challenging the final results of Commerce's second remand redetermination. See Cmts. on [Second Remand Results ], Dec. 14, 2020, ECF No. 112 ("LDC's Br."). On January 13, 2021, Defendant and Defendant-Intervenor National Biodiesel Board Fair Trade Coalition filed their replies to LDC's comments. Def.’s Resp. Cmts. on [Second Remand Results ], Jan. 13, 2021, ECF No. 114 ("Def.’s Br."); Def.-Intervenor's Cmts. on [Second Remand Results ], Jan. 13, 2021, ECF No. 113 ("Def.-Intervenor's Br.").

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) (2018)⁴ and 28 U.S.C. § 1581(c) (2018), 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 court's remand order.’ " Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT ––––, ––––, 968 F. Supp. 2d 1255, 1259 (2014) (quoting Nakornthai Strip Mill Public Co. v. United States, 32 C.I.T. 1272, 1274, 587 F. Supp. 2d 1303, 1306 (2008) ).

DISCUSSION

I. Commerce's Pass-Through Analysis is Reasonable

LDC submits that Commerce's focus on a "pass-through" analysis of U.S. prices is "misguided" and does not address the court's concerns that Commerce's cost-based PMS adjustment may remedy a distortion that was already cured by the concurrent CVD proceeding. See LDC's Br. at 1–13. Defendant and Defendant-Intervenor counter that Commerce's methodology is a reasonable means of addressing the court's concerns. See Def.’s Br. at 12–24; Def.-Intervenor's Br. at 9–11. For the following reasons, Commerce's pass-through analysis demonstrates that the PMS remedy is reasonable.

When investigating whether merchandise is (or is likely to be) sold in the U.S. at LTFV, Commerce makes a comparison between the export price (or constructed export price) of sales of the merchandise into the U.S. and its normal value. See 19 U.S.C. § 1677b(a). The "normal value" of the merchandise may be based upon home market or third-country sales that are made in...