Yantai Oriental Juice Co. v. United States , 27 Ct. Int'l Trade 477 ( 2003 )

Slip Op. 03-33
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: RICHARD K. EATON, JUDGE
____________________________________
:
YANTAI ORIENTAL JUICE CO., :
ET AL., :
:
Plaintiffs, :
:
v. : Court No. 00-00309
:
UNITED STATES, :
:
Defendant, :
:
and :
:
COLOMA FROZEN FOODS, INC., :
ET AL., :
:
Defendant- :
Intervenors. :
____________________________________:
[Antidumping determination remanded to Commerce.]
Decided: March 21, 2003
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt L.L.P. (Bruce M. Mitchell, Jeffrey
S. Grimson and Mark E. Pardo), for Plaintiffs.
Robert D. McCallum Jr., Assistant Attorney General, Civil Division, United States
Department of Justice; David M. Cohen, Director, Civil Division, Commercial Litigation Branch,
United States Department of Justice; Lucius B. Lau, Assistant Director, International Trade
Section, Civil Division, Commercial Litigation Branch, United States Department of Justice;
Scott D. McBride, Office of the Chief Counsel for Import Administration, United States
Department of Commerce, of counsel, for Defendant.
The Law Firm of C. Michael Hathaway (C. Michael Hathaway), for Defendant-
Intervenors.
Court No. 00-00309 Page 2
MEMORANDUM OPINION AND ORDER
EATON, Judge: This matter is before the court on the motion of Yantai Oriental Juice Co.
(“Yantai Oriental”), Qingdao Nannan Foods Co. (“Nannan”), Sanmenxia Lakeside Fruit Juice
Co., Ltd. (“Lakeside”), Shaanxi Haisheng Fresh Fruit Juice Co. (“Haisheng”), Shandong Zhonglu
Juice Group Co. (“Zhonglu”), Xianyang Fuan Juice Co., Ltd. (“Fuan”), Xian Asia Qin Fruit Co.,
Ltd. (“Asia”), Changsha Industrial Products & Minerals Import & Export Corp. (“Changsha
Industrial”), and Shandong Foodstuffs Import & Export Corp. (“Shandong Foodstuffs”)
(collectively “Plaintiffs”) for judgment upon the agency record pursuant to USCIT R. 56.2. By
their motion, Plaintiffs contest certain aspects of the determination of the United States
Department of Commerce (“Commerce” or the “Department”) resulting from its antidumping
investigation of non-frozen apple juice concentrate (“AJC”) from the People’s Republic of China
(“PRC”), see Certain Non-Frozen Apple Juice Concentrate from the P.R.C., 65 Fed. Reg. 19,873(Dep’t Commerce Apr. 13, 2000) (final determination) (“Final Determination”), amended by
Certain Non-Frozen Apple Juice Concentrate From the P.R.C., 65 Fed. Reg. 35,606 (Dep’t
Commerce June 5, 2000) (am. final determination) (“Am. Final Determination”), covering the
period of investigation (“POI”) of October 1, 1998, through March 31, 1999. The court has
jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(A)(i)(I). For the
reasons set forth below, the court again remands this matter to Commerce with instructions to
conduct further proceedings in conformity with this opinion.
Court No. 00-00309 Page 3
BACKGROUND
On June 18, 2002, the court remanded this matter and directed Commerce to reexamine
its surrogate country selection, and the various factors of production, used to calculate the
antidumping duty margins for PRC AJC producers/exporters in the Final Determination. See
Yantai Oriental Juice Co. v. United States, 26 CIT __, Slip Op. 02-56 (June 18, 2002) (“Remand
Order”). Familiarity with this opinion is presumed.
On November 15, 2002, Commerce released the results of its remand determination. See
Yantai Oriental Juice Co. v. United States, 00-00309 (Dep’t Commerce Nov. 15, 2002)
(redetermination pursuant to court remand) (“Remand Determination”). Upon remand
Commerce determined that: (1) Turkey, not India, was the proper surrogate country; (2) in light
of its selection of Turkey as the surrogate country and the resultant reevaluation of the various
factors of production, Yantai Oriental, Nannan, Lakeside, Haisheng, and Zhonglu (collectively
the “Fully-Investigated Respondents”) were “excluded” from the antidumping order and, thus,
their antidumping duty margins were zero percent; and (3) because the Fully-Investigated
Respondents’ antidumping duty margins were lowered to zero percent, and because the
antidumping duty margin for Fuan, Asia, Changsa Industrial, and Shandong Foodstuffs (i.e.,
companies that fully responded to Commerce’s antidumping questionnaire but were not selected
for investigation) (collectively the “Cooperative Respondents”) was calculated from the Fully-
Investigated Respondents’ antidumping duty margins in the Final Determination, it was
necessary to recalculate the Cooperative Respondents’ antidumping duty margin for the Remand
Determination. As a result of this recalculation the Cooperative Respondents’ antidumping duty
Court No. 00-00309 Page 4
margin increased from 14.88 percent to 28.33 percent.
DISCUSSION
When reviewing the Remand Determination pursuant to 28 U.S.C. § 1581(c), the court
will sustain Commerce’s determinations 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).
Substantial evidence consists of “such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938);
Daewoo Elecs. Co. v. United States, 6 F.3d 1511, 1520 (Fed. Cir. 1993) (quoting Matsushita
Elec. Indus. Co. v. United States, 750 F.2d 927, 932 n.10 (Fed. Cir. 1984)). However,
“Commerce must articulate a ‘rational connection between the facts found and the choice
made.’” Rhodia, Inc. v. United States, 25 CIT __, __, 185 F. Supp. 2d 1343, 1348 (2001)
(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).
A. Surrogate Country/Factors of Production
To determine whether subject merchandise is being, or is likely to be, sold in the United
States at less than fair value, Commerce must make “a fair comparison . . . between the export
price or constructed export price and normal value.” 19 U.S.C. § 1677b(a); 19 C.F.R. §
351.401(a) (2002). Where, as here, the subject merchandise is exported from a nonmarket
economy country (“NME”), Commerce is directed by statute to calculate normal value “on the
basis of the value of the factors of production utilized in producing the merchandise . . . .” 19
U.S.C. § 1677b(c)(1); 19 C.F.R. § 351.408(a). When valuing factors of production in NME
Court No. 00-00309 Page 5
circumstances, subsection 1677b(c) directs Commerce to gather surrogate prices from “the best
available information . . . in a market economy country . . . considered to be appropriate by the
administering authority.” 19 U.S.C. § 1677b(c)(1); see Nation Ford Chem. Co. v. United States,
166 F.3d 1373, 1377 (Fed. Cir. 1999) (“Whether such analogous information from the surrogate
country is ‘best’ will necessarily depend on the circumstances, including the relationship between
the market structure of the surrogate country and a hypothetical free-market structure of the NME
producer under investigation.”). This being the case, “the process of constructing foreign market
value for a producer in [an NME] is difficult and necessarily imprecise . . . .” Sigma Corp. v.
United States, 117 F.3d 1401, 1408 (Fed. Cir. 1997). Commerce enjoys wide discretion in
valuing factors of production. See Lasko Metal Prods., Inc. v. United States, 43 F.3d 1442, 1446
(Fed. Cir. 1994); see also Sigma, 117 F.3d at 1405 (citing Torrington Co. v. United States, 68
F.3d 1347, 1351 (Fed. Cir. 1995)) (“Commerce . . . has broad authority to interpret the
antidumping statute . . . .”). However, Commerce’s discretion in calculating surrogate prices is
not limitless. See Omnibus Trade and Competitiveness Act of 1988, H.R. Conf. Rep. No. 100-
576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623 (“Commerce shall avoid using
any prices which it has reason to believe or suspect may be . . . subsidized prices.”); see also
Shakeproof Assembly Components, Div. of Ill. Toolworks, Inc. v. United States, 268 F.3d 1376,
1382 (Fed. Cir. 2001) (“In determining the valuation of the factors of production, the critical
question is whether the methodology used by Commerce is based on the best available
information and establishes antidumping margins as accurately as possible.”).
Commerce, in accordance with the Remand Order, reexamined various aspects of the
Court No. 00-00309 Page 6
Final Determination including: (1) the selection of India as the surrogate country; (2) the
valuation of Indian juice apples and, specifically, how a government market intervention scheme
(“MIS”) may have affected the price of such apples; (3) the valuation of domestic steam coal; (4)
the use of certain financial data from an Indian grower of apples; and (5) the calculation of
certain freight rates.
1. Surrogate Country
In the Final Determination Commerce selected India as the surrogate country for PRC
AJC production. The court found Commerce’s selection, based on the determination that India
was a “significant producer of AJC,” to be unsupported by substantial evidence and otherwise
not in accordance with law. See Remand Order at 11. Commerce’s determination was found to
be not in accordance with law because it was based on uncorroborated secondary information—a
market study commissioned by the petitioners.1 Id. Commerce’s determination was found to be
unsupported by substantial evidence because Commerce merely adopted the conclusions found in
the petitioners’ market study but did not “articulate a ‘rational connection between the facts
found and the choice made.’” Remand Order at 12 (citing Rhodia, 25 CIT at __, 185 F. Supp. 2d
at 1348). On remand, Commerce reexamined its selection of India as the proper surrogate
country for PRC AJC production and stated that it had
concluded that the record does not support our determination in the
1
The Defendant-Intervenors in this action, Coloma Frozen Foods, Inc., Green
Valley Packers, Knouse Foods Cooperative, Inc., Mason Country Fruit Packers, and Tree Top,
Inc., were the petitioners at the administrative level. See Certain Non-Frozen Apple Juice
Concentrate From the PRC, 64 Fed. Reg. 36,330, 36,330 (Dep’t Commerce July 6, 1999)
(initiation of investigation).
Court No. 00-00309 Page 7
investigation that India was a significant producer of [AJC].
Instead, the Department has determined that Turkey is a more
appropriate surrogate country for the [PRC] because it is the
country most economically comparable to the PRC that is also a
significant producer of AJC. Therefore, the Department has
amended its calculations using Turkish data to value juice apples,
[selling, general and administrative] expenses, overhead, and
profit.
Remand Determination at 1 (citations omitted). In support of its selection of Turkey as the
appropriate surrogate country, Commerce explained:
Section 773 (c)(4) of the Act directs the Department to value the
[NME] producers’ factors of production in a market economy
country that is both (1) economically comparable to the NME and
(2) a significant producer of comparable merchandise, to the extent
possible. Thus, it is the Department’s policy to select a surrogate
country that meets both of these requirements, when it is possible
to do so.
In the underlying investigation, the Department concluded that
India was both economically comparable to the PRC and a
significant producer of comparable merchandise. Hence, the
Department selected India as its primary surrogate in this
proceeding.
In response to the concerns raised by the Court in its remand order,
the Department reexamined closely the investigation record. Based
on its reexamination, the Department reasoned that India could be
a significant producer of comparable merchandise given its high
level of apple production. However, the Department concluded
that it lacked appropriate benchmarks for determining what
constitutes significant production. Thus, the Department proposed
two measures of significant production and attempted to apply
them using the information in the investigation record.
Unfortunately, the record did not contain sufficient information
pertaining to alternative surrogate possibilities because once the
Department had accepted India as an appropriate surrogate for AJC
production in the investigation, there was no need or cause for
parties to supply further comments on the record regarding other
potential surrogate countries.
Court No. 00-00309 Page 8
Consequently, as a result of the Court’s underlying determination
and analysis, the Department developed two measures of
significant production: Whether India (or any other country
economically comparable to the PRC) was a significant net-
exporter of AJC and whether any was a major exporter of AJC to
the United States. . . .
The only source of information [among those examined by the
Department] that consistently provided export and import
information for India and the other comparable economies
identified by the Department in the investigation (as well as all
other worldwide exporters of AJC) was [the United Nations Food
and Agriculture Organization (“FAOSTAT”)]. . . .
As the [data from FAOSTAT] shows, neither India nor any other
country identified by the Department in the investigation as being
economically comparable to the PRC is a significant net-exporter
or a major exporter to the United States. In fact, during the
relevant period, India was a net importer of AJC.
Remand Determination at 4–5. Thus, Commerce determined that Turkey was the appropriate
surrogate country for valuing factors of production. Id. at 7.
2. Juice Apple Valuation
In the Final Determination Commerce determined that the price paid for Indian juice
apples was a factor of production. The court found Commerce’s determination to be
unsupported by substantial evidence on the record as Commerce had not adequately explained
why the MIS administered by the national and local Indian governments—which administration
included subsidizing Indian apple growers and controlling an entity that further “administered the
MIS to [the governments’] detriment”—did not affect the valuation of apples. Remand Order at
18. On remand, Commerce determined that any possible effects of the MIS on the price of
Indian juice apples to be a “moot” issue as “the Department is using Turkish juice apple
Court No. 00-00309 Page 9
prices . . . .” Remand Determination at 10.
3. Steam Coal Valuation
In the Final Determination “the Department calculated the value for steam coal using
Indian import statistics because the Department concluded that the import statistics were the
‘best available information.’” Remand Determination at 10. Commerce reasoned that the import
statistics it relied on were the “best available information” because they were “more
contemporaneous with the POI than the data submitted by plaintiffs . . . .” Id. The court
questioned Commerce’s selection of import statistics for valuing domestic Indian coal because
there was no indication that (1) the prices for domestic Indian steam coal were distorted or (2)
that the “use of imported values ‘best approximate[d] the cost incurred’ for Indian AJC
production.” Remand Order at 24. After reviewing the record, Commerce determined that it
would use the “domestic price in India to value steam coal.” Remand Determination at 10. In
support of its use of domestic Indian steam coal prices Commerce stated:
While we continue to believe that contemporaneity is an important
consideration in selecting valuation data, we have reviewed the
information in this case and have concluded that both the import
statistics and the domestic prices preceded the POI, and hence,
neither was contemporaneous with the POI. Moreover, there is no
evidence suggesting that the domestic Indian prices were distorted.
Id. (citing Creatine Monohydrate from the P.R.C., 67 Fed. Reg. 10,892 (Dep’t Commerce Mar.
11, 2002) (final results); Certain Preserved Mushrooms from the P.R.C., 67 Fed. Reg. 46,173(Dep’t Commerce July 12, 2002) (final results and partial rescission of antidumping rev.)).2
2
Although Commerce did not use Turkish prices for the valuation of domestic
steam coal, no argument is made that the use of alternative Indian data for this factor was
Court No. 00-00309 Page 10
4. Valuation of Selling, General, and Administrative Expenses, and
Overhead Ratios
In the Final Determination Commerce relied on financial data for selling, general, and
administrative expenses (“SG&A”), and overhead ratios based on generalized Indian financial
data from the Reserve Bank of India Bulletin. Remand Order at 24. The court questioned the
use of such data as there was publically available audited financial information from an Indian
producer of AJC, Himachal Pradesh Horticultural Produce Marketing and Processing
Corporation. Id. at 26. On remand, Commerce determined that this issue was “moot” because
“the Department is using information from a Turkish company to determine the factory overhead,
SG&A and profit ratios . . . .” Remand Determination at 11.
5. East Coast Surrogate Freight Rates Calculation
In the Final Determination Commerce “included freight to Detroit in calculating the East
Coast average freight rate.” Remand Determination at 11. The court found that neither
Commerce nor the Government had addressed adequately the issue of how including the Detroit
shipment in the East Coast freight rate was appropriate given that there was no “weighting” of
this rate in Commerce’s calculation of the East Coast rate. See Remand Order at 29–30. On
remand, Commerce stated that it
agrees with the Court that Detroit should not be included in the
calculation of the East Coast average freight rate in this case, given
that the record evidence does not show that Detroit shippers were
transporting goods by way of the East Coast. Therefore, the
Department has calculated an East Coast rate, a West Coast rate,
and a separate Detroit rate. Because we have calculated different
improper in the instant investigation.
Court No. 00-00309 Page 11
rates for the different destinations, the weighting issue raised by the
Court does not arise.
Remand Determination at 11.
6. Conclusion
The court finds that Commerce has complied with its remand order with respect to the
selection of the proper surrogate country and the various factors of production. Moreover, as
Plaintiffs do not take issue with Commerce’s selection of Turkey as the proper surrogate country
or otherwise challenge Commerce’s selection of the proper factors of production used to
calculate the Fully-Investigated Respondents’ antidumping duty margins, the court, therefore,
finds Commerce’s determination in this regard to be supported by substantial evidence and
otherwise in accordance with law, and sustains Commerce’s determination that the Fully-
Investigated Respondents should receive antidumping duty margins of zero percent.
B. Cooperative Respondents’ Antidumping Duty Margin
In the original investigation the Cooperative Respondents’ antidumping duty margin was
calculated to be 14.88 percent. See Am. Final Determination, 65 Fed. Reg. at 35,607. This
antidumping duty margin was based on the weighted average of the Fully-Investigated
Respondents’ antidumping duty margins.3 See Final Determination, 65 Fed. Reg. at 19,874; see
3
While Commerce does not specifically state that it used the “all-others”
methodology of 19 U.S.C. § 1673d(c)(5)(A) to calculate the Cooperative Respondents’
antidumping duty margin in the Final Determination, Commerce’s methodology is consistent
with that subsection. See Final Determination, 64 Fed. Reg. at 19,874 (citing Bicycles from the
P.R.C., 61 Fed. Reg. 19,026 (Dep’t Commerce Apr. 30, 1996) (final determination)) (“For those
PRC producers/exporters that responded to our separate rates questionnaire . . . but did not
Court No. 00-00309 Page 12
also 19 U.S.C. § 1673d(c)(5)4; Coalition for the Pres. of Am. Brake Drum & Rotor Aftermarket
Mfrs. v. United States, 23 CIT 88, 109, 44 F. Supp. 2d 229, 249 (1999). In the Remand
Determination, however, because the Fully-Investigated Respondents received antidumping duty
margins of zero percent, Commerce decided that a new methodology was needed to calculate that
margin. See Remand Determination at 14. Commerce determined that it would continue to
calculate the Cooperative Respondents’ margin following the “all-others” methodology found in
19 U.S.C. § 1673d(c)(5). See id. However, because all of the margins in the investigation were
respond to the full antidumping questionnaire . . . we have calculated a weighted-average margin
based on the rates calculated for the fully-examined responding companies, except that we did
not include rates which were zero . . . [or] based entirely on facts available (i.e., the PRC-wide
rate) . . . .”).
4
This subsection provides:
(A) General rule
For purposes of this subsection . . . the estimated all-others rate
shall be an amount equal to the weighted average of the estimated
weighted average dumping margins established for exporters and
producers individually investigated, excluding any zero and de
minimis margins, and any margins determined entirely [on facts
available].
(B) Exception
If the estimated weighted average dumping margins established for
all exporters and producers individually investigated are zero or de
minimis margins, or are determined entirely [on facts available],
the administering authority may use any reasonable method to
establish the estimated all-others rate for exporters and producers
not individually investigated, including averaging the estimated
weighted average dumping margins determined for the exporters
and producers individually investigated.
19 U.S.C. § 1673d(c)(5)(A)–(B).
Court No. 00-00309 Page 13
either (1) zero, i.e., the Fully-Investigated Respondents’ margins, or (2) based on facts available,
i.e., the PRC-wide margin, Commerce did not follow the methodology of 19 U.S.C. §
1673d(c)(5)(A) but, instead, looked to 19 U.S.C. § 1673d(c)(5)(B). See Remand Determination
at 14. In support of this determination Commerce explained that
[a]s all the dumping rates in this redetermination on remand are
now either . . . zero or based entirely on facts available, we have
applied the methodology of section [1673d(c)(5)(B)] which is
consistent with that used in determining the “all-others” rate (i.e.,
the rate applied to companies not individually investigated) in a
market economy case under the same circumstances. Section
[1673d(c)(5)(B)] states that in situations where the estimated
weighted-average dumping margins established for all exporters
and producers individually investigated are zero or de minimis, or
are determined entirely [on facts available] under section 776, “the
administering authority may use any reasonable method to
establish the estimated all-others rate for exporters and producers
not individually investigated, including averaging the weighted-
average dumping margins determined for the exporters and
producers individually investigated.” The Statement of
Administrative Action states that in using any reasonable method
to calculate the all-others rate, “[t]he expected method in such
cases will be to weight-average the zero and de minimis margins
and margins determined pursuant to the facts available, provided
that volume data is available.” Thus, consistent with section
[1673d(c)(5)(B)], we have determined the separate rates for these
companies which were not individually investigated by weight-
averaging the zero margins and margins determined pursuant to
facts available.
Id. (citing Statement of Administrative Action accompanying the Uruguay Round Agreements
Act, H.R. Doc. No. 103-826(I), at 873 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4201
(“SAA”)).5 Using what it calls the “expected” method, Commerce calculated the Cooperative
5
The SAA states that 19 U.S.C. § 1673d(c)(5)(B)
provides an exception to [19 U.S.C. § 1673d(c)(5)(A)] if the
dumping margins for all of the exporters and producers that are
Court No. 00-00309 Page 14
Respondents’ “weighted average” margin based on the PRC-wide margin of 51.74 percent and
the Fully-Investigated Respondents’ margins of zero percent. Id. In its original investigation
Commerce had determined the 51.74 percent PRC-wide margin by selecting “the higher of: (1)
The highest margin stated in the notice of initiation; or (2) the highest margin calculated for any
respondent in this investigation.” See Final Determination, 65 Fed. Reg. at 19,874 (citing
Stainless Steel Wire Rod from Japan, 63 Fed. Reg. 40,434 (Dep’t Commerce July 29, 1998)
(final determination)). Thus, using this methodology Commerce assigned a PRC-wide margin
using data contained in the petition, which was “higher than the margin calculated for any
respondent in this investigation.” Id. It is worth noting that calculation of this PRC-wide margin
of 51.74 percent was based, in part, on financial data from India that is no longer relevant to the
instant investigation. See, e.g., Antidumping Investigation Initiation Checklist, Conf. R. Doc. 6
at 10–11, 15 (citing Pet. for the Imposition of Antidumping Duties: Certain Non-Frozen Apple
Juice Concentrate from China, Conf. R. Doc. 1 Ex. 12 Attach. M, at 29 (schedule 16)).
Plaintiffs object to Commerce’s methodology for recalculating the Cooperative
individually investigated are determined entirely on the basis of the
facts available or are zero or de minimis. In such situations,
Commerce may use any reasonable method to calculate the all
others rate. The expected method in such cases will be to weight-
average the zero and de minimis margins and margins determined
pursuant to the facts available, provided volume data is available.
However, if this method is not feasible, or if it results in an average
that would not be reasonably reflective of potential dumping
margins for non-investigated exporters or producers, Commerce
may use other reasonable methods.
1994 U.S.C.C.A.N. at 4201 (emphasis added).
Court No. 00-00309 Page 15
Respondents’ antidumping duty margin arguing that
[w]hile Commerce may have a certain amount of discretion in
devising its methodologies in NME cases, the appellate court has
stated that “the critical question is whether the methodology used
by Commerce is based on the best available information and
establishes antidumping margins as accurately as possible.” It is
immediately apparent that Commerce’s new methodology does not
calculate margins as accurately as possible for the [Cooperative
Respondents].
Pls.’ Comments Regarding Commerce’s Final Remand Determination (Dec. 16, 2002) (citation
omitted) (“Pls.’ Comments”) at 2–3 (emphasis removed). Plaintiffs contend that Commerce’s
methodology was improper because
[t]he [Cooperative Respondents’] rate is meant to represent a
dumping margin that reasonably reflects the potential margin for
the [Cooperative Respondents] had they been asked to submit
complete sales and factors of production data. It is therefore
beyond comprehension that Commerce would consider it
reasonable or fair that the [Cooperative Respondents’] rate should
double when the margin for every single cooperative respondent
had been reduced to zero.
Id. at 3 (emphasis removed).
The United States (“Government”), on behalf of Commerce, counters that Commerce’s
methodology was proper because
[t]he statute does not impose a requirement upon Commerce to
examine all producers and exporters of merchandise that is subject
to its investigation. Rather, the statute specifically provides for at
least two methodologies to be applied to all other (i.e., non-
investigated) producers and exporters. The increase in the rate for
the non-selected respondents occurred because Commerce
originally followed the methodology contained in 19 U.S.C. §
1677d(c)(5)(A) and, because compliance with this Court’s Order of
Remand resulted in margins that were either zero or based entirely
Court No. 00-00309 Page 16
on facts available, subsequently followed the “expected method”
pursuant to 19 U.S.C. § 1677d(c)(5)(B). [Plaintiffs have] not
demonstrated that the 28.33 percent rate selected by Commerce is
not “reasonably reflective” of the potential dumping margins of the
non-selected respondents. Nor does the mere fact that the selected
respondents all received margins of zero compel a finding that the
potential dumping margin of the non-selected respondents must be
zero.
Def.’s Resp. to Pls.’ Comments Concerning the Remand Determination Filed by the United
States Dep’t of Commerce at 3–4 (Jan. 16, 2003) (“Def.’s Comments”).
The court does not agree that Commerce’s calculation of the Cooperative Respondents’
antidumping duty margin in the instant investigation was proper. First, the record shows that the
Cooperative Respondents fully and completely complied with all of Commerce’s requests for
information. Indeed, the only apparent difference between the Fully-Investigated Respondents
and the Cooperative Respondents is that Commerce did not select them for full investigations.
Second, while it is not inconceivable that individual margins for each Cooperative Respondent
could have increased had they been fully investigated, this outcome seems unlikely given that all
of the Fully-Investigated Respondents’ antidumping duty margins were reduced to zero
percent—including that respondent originally assigned an antidumping duty margin of 27.57
percent. See Am. Final Determination, 65 Fed. Reg. at 35,607. Given these facts it appears that
Commerce strained to reach its result. This is particularly puzzling given that in reaching its
result Commerce abandoned the methodology used in the Final Determination (i.e., weight-
averaging the estimated dumping margins of the Fully-Investigated Respondents) even though
that method is specifically provided for in the statutory subsection it purported to follow. See
Court No. 00-00309 Page 17
Remand Determination at 14 (citing 19 U.S.C. § 1673d(c)(5)(B)). More importantly, in doing
so, Commerce failed to justify the use of its new methodology other than by reference to the
SAA. The SAA, however, takes into account the possibility that, under certain facts, the
“expected” method should not be used. See SAA, 1994 U.S.C.C.A.N. at 4201 (However, if [the
“expected”] method is not feasible, or if it results in an average that would not be reasonably
reflective of potential dumping margins for non-investigated exporters or producers, Commerce
may use other reasonable methods.”). As the SAA indicates, when choosing a methodology for
assigning antidumping duty margins Commerce cannot simply rely on a methodology found to
be acceptable in other investigations. Rather, Commerce must insure that any methodology it
employs in any particular investigation “is based on the best available information and
establishes antidumping margins as accurately as possible.” Shakeproof, 268 F.3d at 1382. In
addition, when selecting a methodology Commerce must “articulate a ‘rational connection
between the facts found and the choice made.’” Rhodia, 25 CIT at __, 185 F. Supp. 2d at 1348.
The plain language of the statute allows Commerce the flexibility to formulate a methodology
that permits it to best comply with these injunctions, and specifically allows for the averaging of
the zero percent antidumping duty margins. See 19 U.S.C. § 1673d(c)(5)(B) (“[T]he
administering authority may use any reasonable method to establish the estimated all-others rate
for exporters and producers not individually investigated, including averaging the estimated
weighted average dumping margins determined for the exporters and producers individually
investigated.” (emphasis added)). In the Remand Determination, however, Commerce nowhere
explains how its choice of methodology established the Cooperative Respondents’ antidumping
duty margin “as accurately as possible” or makes a “rational connection between the facts found
Court No. 00-00309 Page 18
and the choice made.” Shakeproof, 268 F.3d at 1382; Rhodia, 25 CIT at __, 185 F. Supp. 2d at
1348. Thus, the court finds that, with respect to the recalculation of the Cooperative
Respondents’ antidumping duty margin, Commerce’s determination on remand is neither based
on substantial evidence nor otherwise in accordance with law.
CONCLUSION
For the reasons set forth above, the court remands this matter to Commerce. On remand,
Commerce shall revisit the issue of the proper calculation of the Cooperative Respondents’
antidumping duty margin and shall either: (1) use the methodology set forth in 19 U.S.C. §
1673d(c)(5)(B); or (2) set out another methodology. In either event, Commerce shall explain in
clear and specific terms why its selected methodology “is based on the best available information
and establishes antidumping margins as accurately as possible.” Shakeproof, 268 F.3 at 1382.
Such remand determination is due within 45 days of the date of this opinion, comments
are due thirty days thereafter, and replies to such comments 11 days from their filing.
______________________________
Richard K. Eaton, Judge
Dated: March 21, 2003
New York, New York