Kompass Food Trading International v. United States , 24 Ct. Int'l Trade 678 ( 2000 )

Slip Op. 00-90
UNITED STATES COURT OF INTERNATIONAL TRADE
___________________________________________
KOMPASS FOOD TRADING INTERNATIONAL, :
HEARTLAND FOODS INC., NORTH :
EAST MARKETING CO., PORT ROYAL SALES, LTD. :
and UNIPRO FOODSERVICE INCORPORATED, :
:
Plaintiffs, :
:
J.A. KIRSCH CORP., MANDI FOODS, INC. and :
SUMMIT IMPORT CORP., :
:
Plaintiff-Intervenors :
:
v. :
:
THE UNITED STATES, : Court No.
: 98-09-02848
Defendant, :
:
and :
:
MAUI PINEAPPLE CO., LTD. and THE :
INTERNATIONAL LONGSHOREMEN’S AND :
WAREHOUSEMEN’S UNION, :
:
Defendant-Intervenors. :
___________________________________________:
[ITA’s determination affirmed.]
Dated: July 31, 2000
Harris Ellsworth & Levin (Herbert E. Harris II and
Jeffrey S. Levin) for plaintiffs Kompass Food Trading
International, Heartland Foods Inc., North East Marketing Co.,
Port Royal Sales, Ltd. and Unipro Foodservice Incorporated.
Harris Ellsworth & Levin (Herbert E. Harris II and
Jeffrey S. Levin) for plaintiff-intervenors J.A. Kirsch Corp.,
Mandi Foods, Inc. and Summit Import Corp.
David W. Ogden, Acting Assistant Attorney General, David
M. Cohen, Director, Attorney, Commercial Litigation Branch,
CT. NO. 98-09-02848 PAGE 2
Civil Division, United States Department of Justice (Michele
D. Lynch), Cindy G. Buys, Attorney, Office of Chief Counsel
for Import Administration, for defendant.
Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal,
David C. Smith, Jr. and Adam H. Gordon) for defendant-
intervenors Maui Pineapple Co., Ltd. and the International
Longshoremen’s and Warehousemen’s Union.
Opinion
RESTANI, Judge: This matter is before the court on a
Motion for Judgment Upon the Agency Record, pursuant to USCIT
Rule 56.2, brought by plaintiffs Kompass Food Trading
International, Heartland Foods Inc., North East Marketing Co.,
Port Royal Sales, Ltd. and UniPro Foodservice Incorporated
(collectively referred to herein as the “Kompass Group”) and
plaintiff-intervenors J.A. Kirsch Corp., Mandi Foods, Inc. and
Summit Import Corp. (collectively referred to herein as the
“Kirsch Group”).
Under review are the results of the U.S. Department of
Commerce’s (“Commerce”) administrative review of the
antidumping duty order on Canned Pineapple Fruit from
Thailand, 63 Fed. Reg. 43,661 (Dep’t Commerce 1998) (notice of
final results and partial rescission of antidumping duty
admin. rev.) [hereinafter “Final Results”]. The Final Results
covered the period from July 1, 1996 through June 30, 1997.
Id.CT. NO. 98-09-02848 PAGE 3
Both the Kompass and Kirsch Groups contest Commerce’s use
of adverse facts available to Vita Food Factory Ltd. (“Vita”),
the Thai producer and exporter. They further contend that
Commerce did not corroborate properly the margin it assigned
to Vita. Commerce responds that it selected a margin based on
the adverse facts available in accordance with law.
Jurisdiction and Standard of Review
The court has jurisdiction pursuant to 28 U.S.C. §
1581(c) (1994). In reviewing Commerce’s determination in
administrative reviews, the court will hold unlawful those
agency determinations which are unsupported by substantial
evidence on the record, or otherwise not in accordance with
law. 19 U.S.C. § 1516a(b)(1)(B) (1994).
I. Application of Total Adverse Facts Available to Vita
Background
Both the Kompass and Kirsch Groups import canned
pineapple fruit (“CPF”) from Vita, a producer and exporter of
CPF from Thailand. Final Results, 63 Fed. Reg. at 43,663.
Because Vita did not participate in the underlying less than
fair value (“LTFV”) investigation of CPF from Thailand,
Commerce originally assigned it the “all others” rate of 24.64
percent. See Canned Pineapple Fruit from Thailand, 60 Fed.
Reg. 36,775, 36,776 (Dep’t Commerce 1995) (notice of
CT. NO. 98-09-02848 PAGE 4
antidumping duty order and amended final det.)
[hereinafter“Final Determination”]. In this review, Maui
Pineapple Co. Ltd. and the International Longshoremen’s and
Warehousemen’s Union specifically requested an administrative
review of Vita. Letter from Maui Pineapple Co. to Commerce
(July 31, 1997), at 2, P.R. Doc 6, Pl.’s App., Ex. 6, at 2.
On August 29, 1997, Commerce sent Vita an antidumping
questionnaire and asked that it respond to parts A, B and C.
Letter from Commerce to Vita (Aug. 29, 1997), at 1, P.R. Doc
10, Pl.’s App., Ex. 10, at 1. On January 2, 1998, Commerce
requested a supplemental questionnaire response to section A.
Letter from Commerce to Vita (Jan. 2, 1998), at 1, P.R. Doc.
87, Pl.’s App., Ex. 12, at 1. Soon thereafter, Vita’s counsel
informed Commerce that it was withdrawing its representation
of Vita. Letter from Willkie, Farr & Gallagher to Commerce
(Jan. 8, 1998), at 1, P.R. Doc. 90, Pl.’s App., Ex. 13, at 1.
Only after Commerce inquired as to whether Vita would continue
to participate in the review did Vita respond to Commerce.
Letter from Vita to Commerce (Jan. 12, 1998), at 1, P.R. Doc.
239, Def.’s App., Ex. 4, at 1. Vita explained, without
specificity, that the difficult economic situation in Thailand
had adversely affected its ability to participate in the
review process. Id. Nevertheless, Vita indicated that it
CT. NO. 98-09-02848 PAGE 5
would attempt to answer Commerce’s requests without the
assistance of counsel. Id.; Final Results, 63 Fed. Reg. at
43,664.
Commerce sent Vita another request asking it to respond
to section D of the antidumping questionnaire because Commerce
had reasonable grounds to believe Vita made sales of the
subject merchandise below the cost of production (“COP”) in
Germany. Letter from Commerce to Vita (Jan. 13, 1998), at 1,
P.R. Doc. 95, Pl.’s App., Ex. 15, at 1. Commerce next sent a
letter requesting supplemental information for sections B and
C. Letter from Commerce to Vita (Jan. 27, 1998), at 1, P.R.
Doc. 107, Pl.’s App., Ex. 16, at 1. On the same day, Commerce
sent Vita a letter detailing the requirements for documents to
be submitted in this review because Vita no longer had
counsel. Letter from Commerce to Vita (Jan. 27, 1998), at 1,
P.R. Doc. 114, Pl.’s App., Ex. 17, at 1. Commerce also re-
sent its supplemental questionnaire for Section A and extended
the deadline for Vita to respond to it. Id. Finally,
Commerce sent a letter to Vita reminding it of the approaching
deadlines for all of the questionnaire responses. Letter from
Commerce to Vita (Feb. 5, 1998), at 1, P.R. Doc. 125, Pl.’s
App., Ex. 18, at 1. Vita never responded to any of these
CT. NO. 98-09-02848 PAGE 6
letters from Commerce.1 Final Results, 63 Fed. Reg. at
43,665.
In the Final Results, Commerce used the adverse facts
available rate of 51.16 percent because Vita did not respond
to Commerce’s repeated requests for information. Id. at
43,665, 43,673. Both the Kompass and Kirsch Groups object to
Commerce’s use of adverse facts available as to Vita.
Discussion
The Kompass and Kirsch Groups claim that Commerce should
have made a separate determination as to whether Vita
cooperated to the best of its ability in accordance with
Borden Inc. v. United States. 4 F. Supp.2d 1221, 1246 (Ct.
Int’l Trade 1998), aff’d sub nom. F. LLI de Cecco di Filippo
Fara S. Martino S.p.A. v. United States, 2000 U.S. App. LEXIS
14148 (Fed. Cir. 2000). Commerce argues that it made an
adverse inference based on specific factual findings.
1 Vita’s cooperation ended and it never responded after
Commerce wrote Vita that it had received a verified allegation
of third party sales at less than fair value. See Commerce’s
Memorandum to File (Jan. 8, 1998), at 1-3, P.R. Doc. 92, Pl.’s
App., Ex. 14, at 1-3 (using Vita’s Section B and C responses
to calculate COP for each product sold in Germany and finding
it likely that Vita sold similar product at prices below COP).
Before Commerce informed Vita of the COP investigation, Vita
had responded to Commerce’s queries. It even invited Commerce
to come to Thailand and inspect the documents in its Bangkok
office. Letter from Vita to Commerce, at 2, Def.’s App., Ex.
4, at 2. After Commerce informed Vita of the COP
investigation, however, Vita ceased communicating.
CT. NO. 98-09-02848 PAGE 7
Commerce repeatedly contacted Vita to send supplemental
responses, attempted to accommodate Vita’s pro se status and
provided additional instructions to Vita, all without a single
response from Vita. Commerce contends that this evidence
supports its determination that Vita did not act to the best
of its ability and that adverse inferences were warranted. The
court agrees.
The statutory scheme requires that Commerce first decide
whether the use of facts available is appropriate under 19
U.S.C. § 1677e(a) and then decide whether to apply adverse
inferences under 1677e(b). See 19 U.S.C. § 1677e (1994).
Commerce correctly decided to use facts available based on the
requirements set forth in § 1677e(a)(2)(B).2 Next, Commerce
had to make a separate finding, supported by substantial
evidence, under 19 U.S.C. § 1677e(b) that Vita did not act to
the best of its ability to comply with Commerce’s requests.
See 19 U.S.C. § 1677e(b).3 The court has held that a “mere
2 19 U.S.C. § 1677e(a)(2)(B) provides for use of facts
available if:
(2) an interested party or any other person . . .
(B) fails to provide such information by the
deadlines for submission of the information or in
the form and manner requested[.]
3 19 U.S.C. § 1677e(b) states in relevant part:
If the administering authority or the Commission (as the
(continued...)
CT. NO. 98-09-02848 PAGE 8
recitation of the relevant standard is not enough for Commerce
to satisfy its obligation under the statute.” Ferro Union,
Inc. v. United States, 44 F. Supp.2d 1310, 1330 (Ct. Int’l
Trade 1999)(citation omitted). Moreover, Commerce “must be
explicit in its reasoning” when applying adverse facts
available. Id. at 1331.
In five separate letters, Commerce made efforts to
accommodate Vita’s alleged difficulties and attempted to
elicit a response from Vita. Final Results, 63 Fed. Reg. at
43,664. Commerce extended a deadline, provided instructions
for submitting responses and even sent Vita a reminder notice
that the submissions were due. Id. at 43,664-665. Vita did
not respond and did not provide any explanation as to why it
was unable to do so. Id.
The Kompass and Kirsch Groups attempt a post hoc
rationalization of Vita’s conduct. They argue that the severe
economic crisis in Thailand crippled Vita and prevented it
from responding. The Thai economic crisis, however, likely
(...continued)
case may be) finds that an interested party has failed to
cooperate by not acting to the best of its ability to comply
with a request for information from the administering
authority or the Commission, the administering authority or
the Commission (as the case may be), in reaching the
applicable determination under this subtitle, may use an
inference that is adverse to the interests of that party in
selecting from among the facts otherwise available.
CT. NO. 98-09-02848 PAGE 9
would have affected all respondents in the review. Commerce
emphasizes that two other respondents were not represented by
counsel but managed to respond to the questionnaires. See,
e.g., Siam Fruit Canning Co. Supplemental Questionnaire
Response (Feb. 12, 1998), at 1, P.R. Doc. 139 (submitted to
Commerce without counsel); Prachuab Fruit Canning Co.
Supplemental Questionnaire Response (Feb. 3, 1998), at 1, P.R.
Doc. 118 (submitted to Commerce without counsel). Vita, too,
had informed Commerce it would continue to participate despite
the economic difficulties. If the situation worsened, Vita
should have informed Commerce and provided a proper
explanation. See, e.g., 19 U.S.C. § 1677m(c)(1) (1994)
(requiring respondent to notify Commerce if it is unable to
submit information requested).
The Kompass and Kirsch Groups also argue that Vita was a
first-time participant and Commerce should have made it clear
that ceasing communication would result in the use of adverse
inferences. Commerce, however, repeatedly warned Vita that a
failure to provide information would result in the use of
facts available. See Letter from Commerce to Vita (Jan. 2,
1998), at 2, Pl.’s App., Ex. 12, at 2 (notifying Vita that
facts available would be used if Vita did not respond to
supplemental questionnaire for section A); Letter from
CT. NO. 98-09-02848 PAGE 10
Commerce to Vita (Jan. 13, 1998), at 1, Pl.’s App., Ex. 15, at
1 (notifying Vita that failure to respond to Section D of
questionnaire would lead to use of facts available as set
forth in Section 776(b) of Act); Letter from Commerce to Vita
(Jan. 27, 1998), at 2, Pl.’s App., Ex. 17, at 2 (notifying
Vita that failure to respond to supplemental questionnaires
for sections B and C would result in use of facts available as
defined in glossary of original questionnaire). Contrary to
the Kompass and Kirsch Groups’ assertions, Commerce attempted
to assist Vita as well as warn Vita of the consequences. With
no response from Vita forthcoming, further assistance from
Commerce was not warranted.
Accordingly, the court sustains Commerce’s finding that
Vita did not act to the best of its ability.
II. Corroboration of Adverse Facts Available Rate
Background
In the underlying LTFV investigation, Commerce assigned
Vita the “all-others” rate of 24.64 percent. Final
Determination, 60 Fed. Reg. at 36,776. In the Final Results
of this administrative review, Commerce assigned Vita a margin
of 51.16 percent. Final Results, 63 Fed. Reg. at 43,673.
This margin represents the highest calculated margin from a
cooperative respondent, Siam Agro Industry Pineapple and
CT. NO. 98-09-02848 PAGE 11
Others Company (“SAICO”), in the original LTFV investigation.
Id. at 43,665.
Discussion
The Kompass and Kirsch Groups contest the use of the
highest calculated margin in the underlying LTFV
investigation. They assert that the margin is not relevant
because it does not reflect the difficulties of Vita's
situation. Commerce responds that the rate assigned to Vita
is both corroborated and relevant. It argues that it has used
a margin properly calculated from a fully cooperative
respondent from the underlying LTFV investigation.
Additionally, Commerce contends SAICO's business practices are
representative of the Thai pineapple industry. The court
agrees.
Pursuant to 19 U.S.C. § 1677e(c), Commerce must
corroborate any secondary information it relies on from
independent sources reasonably at its disposal. 19 U.S.C. §
1677e(c).4 According to the Statement of Administrative
4 19 U.S.C. § 1677e(c) states:
When the administering authority or the Commission
relies on secondary information rather than on information
obtained in the course of an investigation or review, the
(continued...)
CT. NO. 98-09-02848 PAGE 12
Action ("SAA"), “[c]orroborate means that the agencies will
satisfy themselves that the secondary information to be used
has probative value." SAA accompanying the Uruguay Round
Agreements Act (“URAA”), H.R. Rep. No. 103-826(I) at 870
(1994), reprinted in 1994 U.S.C.C.A.N. 3773, 4199.
In Ferro Union, this court instructed Commerce that the
margin selected has to be reliable and relevant. 44 F.
Supp.2d at 1335. Furthermore, Commerce must use a margin that
bears a rational relationship to the respondent or the past
practices of the industry. Id. at 1334-35 (citations
omitted).
The Kompass and Kirsch Groups challenge Commerce’s use of
SAICO’s margin because it is not an attempt to find Vita’s
“true” dumping margin. Once a respondent refuses to respond
to a questionnaire or does not supply Commerce with an
adequate explanation for refusing to respond, Commerce no
longer focuses on calculating the “true” margin but instead
must focus on determining an adverse margin that will induce
4
(...continued)
administering authority or the Commission, as the case may be,
shall, to the extent practicable, corroborate that information
from independent sources that are reasonably at their
disposal.
CT. NO. 98-09-02848 PAGE 13
cooperation in the future.
Under the pre-URAA law, the Federal Circuit Court of
Appeals approved Commerce’s use of the highest margin from
prior proceedings as best information available (“BIA”).
Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190
(Fed. Cir. 1990) (affirming use of highest calculated margin
from prior administrative reviews as BIA for respondent who
provided deficient submissions); see also Mitsuboshi Belting
Ltd. v. United States, No. 93-09-00640, 1997 WL 118397, at *3
(Ct. Int’l Trade Mar. 12, 1997). This court has recognized
that an uncooperative respondent cannot control the results of
the administrative process via its own unresponsiveness.
Mitsuboshi, 1997 WL 118397, at *3. Moreover, the agency
relies on the common sense inference that the highest margins
are the most probative because the respondent did not provide
information to rebut this inference. Id.The Kompass and Kirsch Groups next attempt to cast doubt
upon Commerce’s choice of SAICO’s margin by claiming that
depreciation of the baht is an indicator that Vita was less
likely to engage in LTFV pricing. The record does not reveal
any evidence in support of this contention nor do the Kompass
and Kirsch Groups indicate that any record evidence supports
CT. NO. 98-09-02848 PAGE 14
their assertion. On the contrary, record evidence indicates
that Vita may have engaged in LTFV pricing in Germany.
Commerce’s Memorandum to File, at 1-4, Pl.’s App., Ex. 14, at
1-4.
Commerce also asserts that SAICO was a fully cooperative
respondent, representative of the Thai pineapple industry.
See Final Results, 63 Fed. Reg. at 43,665. Commerce justifies
its finding based on two facts. First, no record evidence
indicates that SAICO’s practices differed from the rest of the
Thai pineapple industry. Id. Second, the inclusion of
SAICO’s rate5 in the calculation of the “all others” rate in
the original LTFV investigation also supports the position
that SAICO was representative of the industry.6 Id.
5
The Kompass and Kirsch Groups challenge Commerce’s cost
of production methodology for calculating SAICO’s margin. The
Federal Circuit, however, affirmed Commerce’s cost of
production methodology. See Thai Pineapple Public Co. v.
United States, 187 F.3d 1362, 1369 (Fed. Cir. 1999).
6
Given that SAICO’s margin is rational and relevant, the
mere fact that it is three years old is an insufficient basis
to invalidate the margin. The cases that the Kompass and
Kirsch Groups cite for support to invalidate SAICO’s margin
contain facts that differentiate them from this case. In
Manifattura Emmepi S.p.A. v. United States, the court
invalidated the use of an eight year old calculated margin
that bore no relationship to respondent because respondent was
not in the market at the time and, after participating in the
prior review, had received a zero calculated margin. 16 CIT
619, 623-24, 799 F. Supp. 110, 114-15 (1992). In contrast,
Vita had received the “all others” rate of 24.64 percent in
(continued...)
CT. NO. 98-09-02848 PAGE 15
Finally, the Kompass and Kirsch Groups argue that Vita,
like Madhya in Stainless Steel from India, should receive the
“all-others” rate and not the highest calculated margin from
the original LTFV investigation. See Stainless Steel Bar from
India, 64 Fed. Reg. 13,771, 13,774-776 (Dep’t Commerce 1999)
(giving Madhya the “all-others” rate because it responded to
Commerce’s questionnaires, but in an untimely fashion). The
crucial difference between Madhya and Vita is that Madhya
responded to Commerce’s questionnaires and never ceased
communicating. See id. at 13,774. Vita, on the other hand,
never responded to Commerce’s five separate attempts to elicit
a response from Vita.
Commerce gave Vita ample opportunity to demonstrate that
the all-others rate was still the appropriate rate. Vita
either should have supplied Commerce with the information
requested or it should have provided a proper explanation for
its failure to participate further in the review.
6
(...continued)
the original LTFV investigation and its marked lack of
cooperation would have required a margin higher than the “all
others” rate to induce cooperation in subsequent reviews. In
Ferro Union, Commerce tried to rely on a margin that was eight
years old and most of the information used to calculate that
margin was based on best information available. 44 F. Supp.2d
at 1335. In this case, Commerce used a properly calculated
margin and the record did not reveal any evidence undercutting
its validity for this review.
CT. NO. 98-09-02848 PAGE 16
Conclusion
For the foregoing reasons, the court affirms Commerce’s
use of adverse facts available and the margin Commerce
assigned to Vita.
___________________
Jane A. Restani
Date: New York, New York
This 31st day of July, 2000.