United States Court of International Trade

Slip Op. 21-130

Before the Court in M S International, Inc., et. al., v. United States, et. al., Consol. Court No. 19-00140, Slip Op. 21-130 (September 24, 2021) was Plaintiff’s motion for judgment on the agency record in a challenge to Commerce’s final determination in its antidumping investigation of certain quartz surface products from China. Id. at 2. The Court focused only on the respondent-specific challenges raised by Plaintiff Foshan Yixin. Id. at 3. Yixin argued that its 333.09% margin is “an absurd, commercially and economically unrealistic figure,” and “the inevitable consequence of the Department’s use of aberrational Surrogate Values to calculate Yixin’s Cost of Production under U.S. Non-Market Economy (“NME”) antidumping methodology.” Id. at 8. Yixin contended that in calculating the margin, Commerce “has not satisfied its legal requirements if it simply ‘conducted its surrogate value determinations in accordance with the relevant legal authorities and supported its determinations with substantial evidence’ because under the law, assigned surrogate values must still be within ‘limits of permissible approximation.’” Id. at 8-9. Yixin requested that the court instruct Commerce “to reevaluate its selections in order to calculate a margin which is commercially and economically feasible.” Id. at 9. In its Final Determination, Commerce “disagree[d] with Yixin Stone that the margin [wa]s unreasonable or inaccurate or that it fail[ed] to reflect commercial reality,” and “disagree[d] that Commerce should recalculate Yixin Stone’s margin.” Id. at 11. Commerce disagreed with Yixin’s contention that “its profitability proves that its margin is commercially impossible.” Id. Commerce concluded that its calculations were proper because they were “1) in accordance with [its] normal NME practice; 2) factually and mathematically correct; and 3) supported by information on the record and in accordance with the law.” Id. at 12. For the following reasons, the Court sustained Commerce’s Final Determination. Id. at 3.

The court sustains Commerce’s “determinations, findings, or conclusions” 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). Id. at 3. “[W]hen reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole.” Id. “[T]he two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842–45 (1984), governs judicial review of Commerce’s interpretation of the antidumping statute.” Id. at 4. “In an AD duty investigation, Commerce determines whether subject merchandise is being, or is likely to be, sold at less than fair value in the United States by comparing the export price and the normal value of the merchandise. See 19 U.S.C. §§ 1675(a)(2)(A), 1677b(a).” Id. at 4. “In the non-market economy context, Commerce calculates normal value using data from surrogate market economy countries to value the factors of production. See 19 U.S.C. § 1677b(c)(1)(B). Commerce must use the “best available information” in selecting surrogate data from “one or more” surrogate countries. See 19 U.S.C. § 1677b(c)(1)(B), (c)(4).” Id. at 5. In this case, the Plaintiff maintained that Commerce “has a statutory and legal mandate to ‘calculate margins as accurately as possible’ in a way that is ‘fair and equitable,’” and that here Commerce “has not satisfied its legal requirements” by conducting its determinations “in accordance with the relevant legal authorities” and by supporting them with substantial evidence. Id. at 15. However, the court explained that “Plaintiff does not cite, however, any statutory provision that Commerce may have violated.” Id. “Plaintiff does not even cite to the foundational decision in Chevron, which provides the framework necessary for the court’s analysis of legal arguments.” Id. “Furthermore, the term “commercial reality” does not appear in the statute, and “the statute, or Commerce’s permissible interpretation of it, provided the backdrop against which [a court] must review the agency’s determination.” Id. at 16. Here, the court concluded that Commerce reasonably found Mexico to be a significant producer of identical merchandise. Id. at 22. The court sustained Commerce’s calculation of transportation costs because “Plaintiff’s preference for an alternative basis for valuing transportation expenses at a lower rate” was “insufficient to demonstrate that Commerce’s decision was unreasonable,” and Plaintiff pointed to nothing in the record to require a contrary outcome. Id. at 34. Additionally, the court sustained Commerce’s selection of Mexican financial statements for the calculation of surrogate financial values. Id. at 37. Moreover, the court was not persuaded by Plaintiff’s challenge to Commerce’s practice of rejecting financial statements showing a loss as unreasonable. Id. at 39. As such, the Court denied Yixin’s motion for judgment on the agency record and sustained the Final Determination as to Commerce’s determinations on Yixin’s respondent-specific issues. Id. at 40.