Yantai Xinke Steel Structure Co. v. United States

YANTAI XINKE STEEL STRUCTURE CO., LTD., Plaintiff,and NINGBO JIULONG MACHINERY CO., LTD.and NINGBO HAITIAN INTERNATIONAL CO., LTD., Plaintiff-Intervenors, v. UNITED STATES, Defendant, and ALABAMA METAL INDUS. CORP.and FISHER AND LUDLOW, Defendant-Intervenors.

Slip Op. 14-38 Court No. 10-00240

UNITED STATES COURT OF INTERNATIONAL TRADE

Dated: April 9, 2014

Before: Richard K. Eaton, Judge

OPINION

[The Department of Commerce's Final Results of Redetermination are sustained.]

David J. Craven, Riggle & Craven, of Chicago, IL, argued for plaintiff.

Michael D. Snyder, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant. With him on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Scott D. McBride, Senior Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, D.C.

Timothy C. Brightbill, Wiley Rein, LLP of Washington, D.C., argued for defendant-intervenors. With him on the brief were Alan H. Price and Christopher B. Weld.

EATON, Judge: Before the court are the Department of Commerce's ("the Department" or "Commerce") final results following remand of its antidumping investigation of certain steel grating exported from the People's Republic of China ("PRC") made pursuant to the court's order issued in Yantai Xinke Steel Structure Co. v. United States. See Yantai Xinke Steel Structure Co. v. United States, 36 CIT __, Slip Op. 12-95 (July 18, 2012) ("Yantai I"); Final Results of Redetermination Pursuant to Ct. Remand (Dep't of Commerce July 18, 2012) (ECF Dkt. No. 83) ("Remand Results").

On remand, Commerce was instructed to (1) reexamine the surrogate value data on the record, and determine a more accurate antidumping margin for separate rate respondents Yantai Xinke Steel Structure Co., Ltd. ("Xinke" or "plaintiff") and Ningbo Haitian International Co., Ltd. ("Haitian") using surrogate value information that was more contemporaneous with the period of investigation ("POI");¹ (2) "determine a separate rate for [mandatory respondent Ningbo Jiulong Machinery Manufacturing Co., Ltd. ('Jiulong')] that is corroborated as required by 19 U.S.C. § 1677e(c) [(2006)];" and (3) "explain how the discrepancies between Jiulong's supplier mill test certificates [submitted to Commerce] and those the company prepared for its customers justified using facts available or [adverse facts available ('AFA')] to determine the quantity of Jiulong's U.S. sales." Yantai I, 36 CIT at __, Slip Op. 12-95, at 12, 30. The courtalso permitted the Department to "reopen the record to solicit any information it determine[d] to be necessary to make its determination." Yantai I, 36 CIT at __, Slip Op. 12-95, at 30.

In its Final Determination, Commerce assigned a separate antidumping duty margin of 136.76 percent for Xinke and Haitian, using the average of the margins alleged in the Petition,² and assigned mandatory respondent Jiulong the PRC-wide rate of 145.18 percent utilizing AFA. Certain Steel Grating From the PRC, 75 Fed. Reg. 32,366, 32,368, 32,369 (Dep't of Commerce June 8, 2010) (final determination of sales at less than fair value), and the accompanying Issues & Dec. Mem., A-570-947 (Dep't of Commerce May 28, 2010) (P.R. Doc. 229) ("Issues & Dec. Mem.") (collectively, the "Final Determination").

In the Remand Results, the Department "complied under protest with the [c]ourt's order . . . [w]ith respect to the calculation of a separate rate for Xinke and Haitian, . . . and reviewed the [surrogate value] data placed on the administrative record after the initiation of the investigation." Remand Results at 2. As instructed by the court, Commerce used more contemporaneous surrogate values data from the record to calculate a revised weighted-average dumping margin of 38.16 percent for separate rate respondents Xinke and Haitian. Remand Results at 4, 7. Additionally, the Department determined a separate rate for Jiulong. Remand Results at 8-9. Despite assigning Jiulong a separate rate, however, the rate itself remained unchanged at "145.18 percent, the highest rate alleged from the [P]etition."³ Remand Results at 8; Final Determination, 75 Fed. Reg. at 32,369. The Department also provided additionalexplanation as to why Jiulong's defective "mill test certificates prevented [Commerce] from accurately determining the quantity of Jiulong's U.S. sales," and why this submission warranted the application of AFA to the quantity of Jiulong's U.S. sales. Remand Results at 11, 36.

Plaintiff Xinke and defendant-intervenors, Alabama Metal Industries Corporation and Fisher and Ludlow (collectively, "defendant-intervenors"),⁴ filed comments to the Remand Results. For the following reasons, the court holds that Commerce's determination of a margin for Xinke and Haitian, and the separate AFA rate for Jiulong are supported by substantial evidence and otherwise in accordance with law. In addition, Commerce has adequately explained why the lack of reliable mill test certificates prevented it from accurately determining the quantity of Jiulong's U.S. sales and warranted the use of AFA with respect to Jiulong's sales volume. Thus, the Remand Results are sustained.

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) (2006). "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 __, __, Slip Op. 14-17 (Feb. 18, 2014) (citation omitted) (internal quotation marks omitted).

DISCUSSION

I. BACKGROUND

In 2009, Commerce initiated an investigation of producers of steel grating from the PRC to determine whether the subject merchandise was being sold in the United States at less than fair value. See Notice of Initiation, 74 Fed. Reg. at 30,273-74. As part of its investigation, Commerce selected two mandatory respondents, Shanghai DAHE Grating Co., Ltd. ("Shanghai DAHE") and Jiulong. See Certain Steel Grating From the PRC, 75 Fed. Reg. 847, 847 (Dep't of Commerce Jan. 6, 2010) (prelim. determination of sales at less than fair value and postponement of final determination) ("Preliminary Determination"). Shanghai DAHE did not respond to Commerce's questionnaires, nor did it otherwise participate in the investigation. Preliminary Determination, 75 Fed. Reg. at 847. As a result, Jiulong was the sole mandatory respondent.⁵ See Preliminary Determination, 75 Fed. Reg. at 847, 851.

In the Final Determination, the Department found that Jiulong had supplied inaccurate mill test certificates to Commerce, thereby withholding requested information, impeding the less than fair value investigation, providing information that could not be verified, and failing to cooperate to the best of its ability. See Final Determination, 75 Fed. Reg. at 32,367. Commerce therefore assigned Jiulong a rate based on AFA. Final Determination, 75 Fed. Reg. at 32,367. Commerce further determined that, as a result of Jiulong's inaccurate mill test certificates, it could not rely on the information provided by Jiulong in its separate rate questionnaire and, consequently, as an adverse inference, found that Jiulong was part of the PRC-wide entity. Final Determination, 75 Fed. Reg. at 32,367. Accordingly, the Department assigned Jiulong the PRC-wide rate of 145.18 percent. Final Determination, 75 Fed. Reg. at 32,369.

Because Jiulong was the sole mandatory respondent, and its rate was determined using AFA, Commerce, pursuant to its regulations, decided to use a "reasonable method" to determine the rates of the non-mandatory respondents. Issues & Dec. Mem. at 33; see 19 U.S.C. § 1673d(c)(5)(B) (2006). Specifically, Commerce determined a rate of 136.76 percent for separate rate respondents Xinke and Haitian, based on a simple average of the five dumping margins alleged in defendant-intervenors' Petition seeking the initiation of the less than fair value investigation. Final Determination, 75 Fed. Reg. at 32,368.

Xinke, Haitian, and Jiulong, each exporters of steel grating from the PRC, challenged Commerce's actions in Yantai I. In particular, Xinke objected to Commerce's use of a simple average of the margins alleged in the Petition to determine the margins for the non-mandatory respondents. See Yantai I, 36 CIT at __, Slip Op. 12-95, at 8. Xinke "argued that the normal value [of grated steel exports from the PRC used to calculate the Petition rates] 'should be recalculated using the [surrogate values] for financial ratios, material inputs, energy, and packing materials that ha[d] been submitted for the record in this case." Id. at __, Slip Op. 12-95, at 8 (quoting Issues & Dec. Mem. at 32). Xinke claimed that Commerce ignored more contemporaneous data, specific to the POI, that Xinke had placed on the record during the investigation, from which the Department could have adjusted the Petition rates and thus, determined a more accurate antidumping margin for the non-mandatory respondents. Id. at __, Slip Op. 12-95, at 8.

In addressing this argument, the court found that the Department "had record evidence before it that may well have assisted in determining an accurate rate for the [s]eparate [r]ate [r]espondents[, Xinke and Haitian]." Id. at __, Slip Op. 12-95, at 12. The court elaborated that, "[f]or instance, it appears that Commerce relied on [P]etition rates that were calculated usingfinancial ratios for the year prior to the POI, when financials for the POI were on the record." Id. Thus, the court concluded that the Department's "decision to ignore readily available and possibly more reliable surrogate value information when assigning an antidumping duty rate...