United States Court of International Trade

 Court Denied Motion to Amend Judgment

In Apex Frozen Foods Private Ltd. et al., v. United States et al., Court No. 13-283, Slip Op. 15-81 (published August 5, 2015), the court denied plaintiff’s motion to amend the judgment. First, the plaintiffs stated that the court applied the wrong standard when it held that the substantial evidence argument was not exhausted. Second, Apex alleged that the court avoided deciding an important legal argument.

However, the court correctly relied on precedent and still held that parties must raise their arguments with “reasonable specificity” to exhaust administrative remedies.  It is not enough to simply provide a mere suggestion of possible arguments in memoranda to the agency during administrative proceedings. 

As for avoiding legal argument  the court was baffled at this argument where in its opinion, the court dedicated a section on “Why Commerce inadequately explained why A-A could not account for dumping from targeted sales, or why Commerce had to apply A-T instead”  — the very issue that plaintiffs claim was avoided.  The court stated, “The objection that Plaintiffs advance now falls for the same reasons. Though they frame it as a legal challenge, the argument Apex suggested in the motion to amend is materially the same as its defunct substantial evidence objection.”  Slip Op., pg. 12.  The result – the court denied the motion and left it up to plaintiffs to appeal to the Federal Circuit. 

Sustained Commerce’s Final Results of Reconducted Administrative Review

In Viet I-Mei Frozen Foods Co., Ltd. v. United States, Court No. 14-92, Slip Op. 15-82 (July 30, 2015), plaintiff Viet I-Mei Frozen Foods Co., Ltd., successor in interest to Grobest & I-Mei Industrial (Vietnam) Co., Ltd. (hereinafter collectively referred to as “Grobest”), challenged the U.S. Department of Commerce’s (“Commerce”) decision not to terminate a court ordered re-examination of Grobest in the (reconducted) fourth administrative review of the antidumping duty order on certain frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”), and Commerce’s consequent determination to establish an antidumping duty rate for Grobest using adverse facts available.  The court affirmed Commerce’s final results, because Commerce reasonably determined to continue its re-examination of Grobest, and because the agency properly used adverse facts available, based on the requisite factual findings, which have not been contested. 

Grobest is a producer of frozen warmwater shrimp from Vietnam, which is subject to an antidumping duty order, and requested to be reviewed in the fourth administrative review. Commerce denied the request and issued an all-others rate.  Court held that Commerce’s refusal to review Grobest’s voluntary submissions and establish an individual weighted average dumping margin for Grobest in this review was an abuse of the agency’s discretion. In accordance with this Court’s judgment and order in Grobest II, Commerce initiated a proceeding to re-conduct its fourth administrative review of this antidumping duty order with respect to Grobest.  However, two months later, on December 12, 2012, Grobest submitted to Commerce a letter seeking “to withdraw Grobest’s request for examination as a voluntary respondent in the fourth administrative review of the order on frozen warmwater shrimp from Vietnam,” and asking Commerce to “rescind its October 17, 2012 notice announcing that it would reconduct the 2008-2009 administrative review for Grobest.” Grobest explained that it could no longer incur the administrative and legal costs to continue with being a respondent in the review. Because Grobest did not respond to requests for information and because it did not cooperated with the review, Commerce employed adverse inferences when selecting from among the facts otherwise available to establish Grobest’s individual dumping margin for this proceeding.  Commerce assigned to Grobest a rate of 25.76 percent, which represented “the highest dumping margin on the record of any segment of this proceeding.”  Commerce found that this rate “is appropriate for Grobest in that it is sufficient to ensure that Grobest does not benefit from failing to cooperate in [the reconducted] review by refusing to respond to [Commerce]’s request for complete information regarding its affiliations, sales of subject merchandise, and factors of production.

Grobest contended that “Commerce exceeded its statutory authority when it refused to permit [Grobest] to withdraw [its] individual review request,” which “resulted in an impermissibly punitive” rate for Grobest. According to the court, Commerce was correct that voluntary respondents are not entitled to unilaterally dictate their level of participation once accepted for individual examination. The court, citing defendant’s brief, warns that  if plaintiff were allowed to change its participation, the voluntary respondent process would be  subject to potential manipulation by companies seeking individual review and then declining to proceed if the review started to look unfavorable. Nor was Commerce required to end its individual review of Grobest because Grobest requested termination of the review within 90 days of the decision in Grobest II.   Commerce’s regulations provide that the agency will rescind an administrative review if the party that requested such review withdraws its request within 90 days of the date of publication of the notice of its initiation (although Commerce may extend this 90-day limit if the agency “decides that it is reasonable to do so”).  However, this regulatory provision concerns the complete rescission of an administrative review with respect to a particular respondent (where all parties who have requested the review withdraw those requests), rather than the termination of individual examination for purposes of obtaining an all others rate.

Moreover, if Grobest indeed could not deal with the costs of responding to the review, the statute provided procedures for companies experiencing difficulties with responding to Commerce’s inquiries, which Grobest neglected to follow.  For all these reasons, the court affirmed Commerce’s final results.

United States Court of Appeals for the Federal Circuit

The Federal Circuit Affirmed Carbon Material Review Findings

In Jacobi Carbons AB et al. v. United States, Court Nos. 2014-1752, 2014-1753, 2014-1754, 2014-1756 (August 3, 2015), appellants Jacobi Carbons AB and Jacobi Carbons, Inc. (collectively, “Jacobi”); Ningxia Guanghua Cherishmet Activated Carbon Co. (“GHC”), Cherishmet Inc., Beijing Pacific Activated Carbon Products Co., Datong Municipal Yunguang Activated Carbon Co. (“Datong Municipal”), and Shanxi Industry Technology Trading Co. (“Shanxi”) (collectively, Cherishmet”); and Carbon Activated Corp., Car Go Worldwide, Inc., and Tangshan Solid Carbon Co. (“Tangshan”) (collectively, “CAC”) appealed the decision of the United States Court of International Trade (“CIT”) sustaining the U.S. Department of Commerce’s (“Commerce”) Final Results in the fourth administrative review of the antidumping duty order on certain activated carbon from the People’s Republic of China (“PRC”) covering the period April 1, 2010 through March 31, 2011. 

On April 27, 2007, Commerce issued an antidumping duty order covering certain activated carbon from the PRC. Certain Activated Carbon from the People’s Republic of China, 72 Fed. Reg. 20,988 (Dep’t of Commerce Apr. 27, 2007). In the Final Results, Commerce selected the Philippines over Thailand as the primary surrogate country and used Philippine data, rather than Thai data, to calculate the surrogate values for many of the respondents’ factors of production, including carbonized material and truck freight. In light of these changes, Commerce calculated weighted-average dumping margins of $0.44 per kilogram for Jacobi Carbons AB, $2.11 per kilogram for GHC, and $1.04 per kilogram for the separate rate companies. Appellants challenged the Final Results at the CIT, arguing that Commerce did not use the best available information when it calculated the surrogate values for carbonized material and truck freight. The CIT disagreed, finding that substantial evidence supported each of Commerce’s surrogate value determinations. Jacobi Carbons, 992 F. Supp. 2d at 1374, 1377. Because the CIT found that substantial evidence supported Commerce’s surrogate value determinations, it sustained the agency’s separate rate calculation. Id. at 1377.

Carbonized material is a material input used to produce activated carbon. To determine the surrogate value for carbonized material, Commerce considered two data sources: (1) Global Trade Atlas (“GTA”) statistics for Philippine imports categorized under Harmonized Tariff Schedule (“HTS”) 4402, “Wood Charcoal (Including Shell or Nut Charcoal), Whether or NotAgglomerated,” and (2) pricing data for coconut charcoal contained in Cocommunity, a monthly publication of the Asian and Pacific Coconut Community organization. the Cocommunity data was flawed for two reasons. First, Commerce found the prices were not representative of the Philippines as a whole because the data was from the Visayas region of the Philippines. Second, Commerce found that it was not clear whether the Cocommunity prices were tax and duty exclusive. Commerce therefore used the Philippine import data from the GTA to calculate the surrogate value for carbonized material.

Appellants argued that substantial evidence did not support Commerce’s selection of the Philippine import data over the Cocommunity data. They argued the Philippine import data is flawed because it is less specific to the input in question than the Cocommunity data and because it results in an aberrationally high surrogate value compared to the surrogate value of carbonized material in prior reviews of the subject merchandise. Appellants also argued that the record did not support Commerce’s criticisms of the Cocommunity data. Finally, appellants argued that by selecting the Philippine import data over the domestic Philippine Cocommunity data, Commerce violated its preference for using domestic data.

First, appellants argued that the Philippine import data was less specific to the carbonized material used to produce the subject merchandise than the Cocommunity data. The court found as to specificity of the date, the Cocommunity data was limited to coconut shell charcoal, while the Philippine import data includes all imports to the Philippines categorized under HTS 4402, “Wood Charcoal (Including Shell or Nut Charcoal), Whether or Not Agglomerated”—a broader basket category consisting of carbonized material made from wood and coconut shell. However, appellant Jacobi argued that there was “no data available for coconut shell charcoal from the Philippines imported under HTS 4402.00.10.”  Because appellant Jacobi presented Commerce with no evidence supporting the proposition that there were no imports of coconut shell charcoal to the Philippines during the period of review, appellants’ argument failed.  Moreover, this argument was not presented below. Likewise, Commerce’s past practice did not demonstrate that coconut shell charcoal was a better match for coal-based carbonized material than the broader Philippine import data category, which included wood charcoal and coconut shell charcoal. There were no findings nor has the court been presented with record evidence that coconut shell charcoal was a better surrogate for coal-based carbonized material than wood charcoal. Thus for the bulk of the imports at issue, there was no proof that coconut shell charcoal was a better surrogate.

Second, Cherishmet disagreed that the Philippine import data was reliable because it was aberrational compared to the surrogate values for carbonized material in prior reviews of the subject merchandise. During this period of review, Commerce calculated a price of $1,203.90 per metric ton of carbonized material based on the Philippine import data, whereas the surrogate value of carbonized material was much less at 32.99-83.45 per metric ton. Cherishmet argued that at $255 per MT, the Cocommunity data more closely resembled surrogate values in prior reviews. However, past reviews were based on India data and were different economic level of development. More importantly, neither Jacobi nor Cherishmet presented any evidence or made any arguments that the Philippine import data was aberrational during the administrative review.

This is another new argument made for the first time at the CIT on judicial review of Commerce’s decision, not to Commerce itself. Because the Federal Circuit may not create a new record, it declines to reverse Commerce on this basis. Moreover substantial evidence supports Commerce’s findings that the Cocommunity date was less representative of a broad market average because it only represented coconut shell prices from the Visayas region of the Philippines.

Overall because both data sets were flawed, substantial evidence supported Commerce’s decision to use the Philippine import data.

As for truck freight data, Cherishmet and CAC argue that substantial evidence did not support Commerce’s use of the Philippine freight data instead of the Thai freight data to calculate the surrogate value for truck freight. Specifically, Cherishmet and CAC criticize the Philippine freight data as (1) unrepresentative of a broad market average; (2) nonspecific to the actual transportation costs; and (3) aberrational compared to the surrogate value for truck freight calculated during other periods of review of the subject merchandise. Although the Philippine freight data covers only a single route, it consists of data reported by multiple trucking companies. It is therefore broader than Cherishmet and CAC suggest. Furthermore, the Philippines is made up of many islands. A more representative sample would include overseas routes in addition to overland routes, and likely be less comparable to freight costs in the PRC. Cherishmet also argued that the past surrogate values were more in line with the Thai freight data, which has a surrogate value of $0.0379 per metric ton per kilometer for truck freight. But again, because this argument was not presented previously, the court will not reverse for this reason. Finally, the Thai data is flawed as it was dated August 2005 and thus was not contemporaneous with the POR. Looking at two imperfect sets of data, Commerce was reasonable to select to the Philippine data.  For all of these reasons, the majority affirmed.

Circuit Judge Bryson dissented and would have held that Commerce’s findings regarding surrogate values were unreasonable. Firstly, because arguments made by plaintiffs were not waived.  The dissent stated that plaintiffs’ failure to raise objections to the use of Philippine import data during the administrative review process was understandable, because the Commerce Department did not indicate its intention to rely on that data at any point before issuing the final results in this case, at which point it was too late for the plaintiffs to object.  Thus arguments concerning 1) that the Philippine import data did not actually contain imports of coconut shell charcoal during the review period, and (2) that the Philippine import data was aberrational compared to data used in previous administrative reviews, and should have been allowed. Moreover, the dissent disagreed that the aberrational argument may be explained away because of Commerce’s choice in previous reviews to use data from India.  At $1203 per MT, the amount was wildly aberrational from previous reviews and must be scrutinized more closely; moreover the Cocommunity data was more specific  because it covered data from coconut shell charcoal which had been considered closer to coal than wood charcoal found in the import data.  Finally, because (1) the Cocommunity data was exclusive of duties, (2) there was no record that such data included taxes, (3) there was no evidence that the Cocommunity data hailing from the Visayas region (one of the three major geographic divisions of the Philippines) was different from the national price of carbonized materials, and (4) because such data was used in subsequent reviews, the dissent found Commerce’s use of the import data unreasonable.