Wuhan Bee Healthy Co. v. United States , 32 Ct. Int'l Trade 604 ( 2008 )

Slip Op. 08-61
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________
:
WUHAN BEE HEALTHY CO., LTD. :
and PRESSTEK INC., :
:
Plaintiffs, :
:
v. : Before: Richard K. Eaton, Judge
:
UNITED STATES, : Court No. 05-00438
:
Defendant, :
:
and :
:
THE AMERICAN HONEY :
PRODUCERS ASSOCIATION :
and THE SIOUX HONEY :
ASSOCIATION, :
:
Def.-Ints. :
______________________________:
OPINION
[United States Department of Commerce’s final remand results
sustained.]
Dated: May 29, 2008
Kalik Lewin (Martin J. Lewin and Brenna Steinert Lenchak), for
plaintiffs.
Gregory A. Katsas, Acting Assistant Attorney General; Jeanne E.
Davidson, Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice (Jane C. Dempsey), for
defendant.
Kelley Drye Collier Shannon (Michael J. Coursey and R. Alan
Luberda), for defendant-intervenors.
Eaton, Judge: In Wuhan Bee Healthy Co. v. United States, 31
CIT __, Slip Op. 07-113 (July 20, 2007) (not reported in the
Court No. 05-00438 Page 2
Federal Supplement) (“Wuhan”), this court sustained, in part, and
remanded, in part, the final results of the United States
Department of Commerce’s (“Commerce” or the “Department”) second
administrative review of the antidumping duty order on imports of
honey from the People’s Republic of China (“PRC”) made between
December 1, 2002 and November 30, 2003. See Honey from the PRC,
70 Fed. Reg. 38,873 (Dep’t of Commerce July 6, 2005) (final
results) and the accompanying Issues and Decision Memorandum
(June 27, 2005), Pub. Doc. 341 (“Issues & Dec. Mem.”)
(collectively, “Final Results”).
Commerce has now issued remand results pursuant to the
court’s order. See Final Results of Determination Pursuant to
Court Remand, Wuhan Bee Healthy Co., Ltd. and Presstek Inc. v.
United States, Court No. 05-00438, Slip Op. 07-113 (July 20,
2007), (Oct. 16, 2007) Pub. Doc. 3378 (“Remand Results”).
In turn, the court has reviewed the Remand Results and the
filings in support thereof. See Def.-Ints.’ Comments on Remand
Results; Def.’s Reply to Comments. It is worth noting at the
outset that, although they have been afforded two opportunities
to comment on the Remand Results, plaintiffs have declined to do
so. Jurisdiction is had pursuant to 28 U.S.C. § 1581(c) (2000)
and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2000). For the reasons
discussed below, the court sustains Commerce’s remand results.
Court No. 05-00438 Page 3
STANDARD OF REVIEW
When reviewing a final antidumping determination from
Commerce, 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).
DISCUSSION
I. Wage Rate Calculation
The cost of labor (or wage rate) is a factor of production
used to construct normal value. As this Court has observed,
“Commerce treats the wage rate differently from all other factors
of production[.] [F]or [the cost of] labor, Commerce employs
regression-based wage rates reflective of the observed
relationship between wages and national income in market economy
countries.” Wuhan, 31 CIT at __, Slip Op. 07-113 at 34 (citing
Dorbest Ltd. v. United States, 30 CIT __, __, 462 F. Supp. 2d
1262, 1291 (2006)). In Wuhan, plaintiffs challenged as
unsupported by substantial evidence Commerce’s determination with
respect to the wage rate calculation. Plaintiffs have not
challenged the wage rate methodology itself. After its review,
the court directed Commerce, on remand, to explain its decisions,
(1) to include data from high-wage countries in its non-market
economy (“NME”) wage rate calculation, and (2) to exclude from
Court No. 05-00438 Page 4
that calculation data from twenty-two low-wage countries placed
on the record by plaintiffs. Wuhan, 31 CIT at __, Slip Op. 07-
113 at 40. In addition, Commerce asked for a voluntary remand.
Thus, the court also instructed Commerce to recalculate the PRC
wage rate using the data set out in its remand request. Id. at
__, Slip Op. 07-113 at 41.1
In its Remand Results, Commerce expanded the “basket of
countries” used in the determination of NME wage rates to include
“all countries for which data are available” and which “meet the
Department’s suitability requirements.” Remand Results at 5.
The suitability requirements include “the availability and
contemporaneity of the data, and earnings data [that] cover both
men and women and all reporting industries in the country.” Id.Thus, Commerce has added new data from both low-wage and high-
wage countries. This broader data set, according to Commerce,
“better ensures accuracy and fairness” for purposes of
calculating the regression. Id.For Commerce, the expansion of the data set, when combined
with an explanation of why such expansion was useful, is
sufficient to address the court’s concerns about the use of data
from high-wage countries. The Department states that
1
Commerce sought a voluntary remand “with respect to the
calculation of the wage rate because it mistakenly relied upon
income data from two different years (i.e., 2001 and 2002) in its
calculation of the surrogate wage rate.” Remand Results at 24
(quotation omitted).
Court No. 05-00438 Page 5
“restricting the basket of countries to include only countries
that are economically comparable to each NME is not feasible and
would undermine the consistency and predictability of the
Department’s regression analysis.” Remand Results at 16. A
basket of “economically comparable” countries could be extremely
small, and a regression based on an extremely small basket of
countries “would be highly dependent on each and every data
point.” Id.Relative basket size would not be such a
critical factor if there were a perfect
correlation between GNI [Gross National
Income (“GNI”)] and wage rates. If this were
the case, a precise regression line could be
derived from suitable data from only two
countries. However, as the Department has
noted repeatedly, while there is a strong
world-wide relationship between wage rates
and GNI, there is nevertheless variability in
the data. For example, in the data relied
upon for the Department’s revised 2004
calculation for purposes of this remand,
observed wage rates did not increase in
lockstep with increases in GNI in the five
countries with GNI less than [] $1000. . . .
Remand Results at 17. Therefore, according to Commerce, using a
larger basket of countries, including high-wage countries,
“minimizes the effects of any single data point, and thereby,
better captures the global relationship between wage rates and
GNI.” Remand Results at 17.
As to plaintiffs’ proposed addition of twenty-two low-wage
countries, Commerce evaluated the data from each of those
Court No. 05-00438 Page 6
countries against its new selection criteria, i.e., its
suitability requirements, and determined that twenty-one
countries should remain excluded from its analysis. Id. at 6.
Specifically, Commerce found that fourteen countries2 lacked
contemporaneous data for either 2001 or 2002. Id. at 7, 7 n. 4.
Commerce excluded five countries3 because no earnings data were
available for them. Id. at 7. Two countries4 were excluded
because no exchange rates were available in the International
Monetary Fund’s (“IMF”) International Financial Statistics.5 Id.
at 8. Commerce excluded Zimbabwe because it lacked GNI data for
2002, the base year.6 Id. at 9.
Finally, pursuant to the voluntary remand, Commerce
recalculated the NME wage rates using the most current data
available, from December 2004, and corrected its erroneous
2
Algeria, Bangladesh, Belgium, Bolivia, Gambia, Greece,
Kenya, Kuwait, the Philippines, Portugal, Rwanda,
Saudi Arabia, Swaziland, and Venezuela.
3
Cambodia, Indonesia, the Netherlands, Thailand, and
Peru.
4
Serbia and Montenegro.
5
Although plaintiffs introduced exchange rate data from
The World Fact Book, the Department found it inappropriate to
deviate from its standard practice of relying on IMF data and
“cherry-pick” data from alternative sources. See Remand Results
at 8.
6
“The ‘Base Year’ is the year upon which the regression
data are based and is two years prior to the year in which the
Department conducts its regression analysis.” Remand Results at
6.
Court No. 05-00438 Page 7
calculation of the PRC wage rate based on the non-current GNI and
wage rate data for the market economies from 2001. Id. at 28-29.
The recalculated PRC wage rate, using the revised data set,
reduced the rate from $0.93 per hour to $0.77 per hour. See
Remand Results at 29.
The court finds that Commerce has provided a reasonable
explanation for its Remand Results and supported those results
with substantial evidence. First, Commerce’s explanation that
data from high-wage countries was necessary, because the
imperfect correlation between wage rates and GNI was rendered
more accurate by the inclusion of more data, appears reasonable.
Thus, Commerce’s explanation of its expansion of the data set
used to determine NME rate is consistent with the court’s remand
instruction to explain its decision to include data from high-
wage countries in its wage rate calculation. Remand Results at
17. Including data from high-wage countries is reasonable if the
results more accurately reflect the relationship between wage
rates and GNI under Commerce’s regression methodology. Commerce
has represented that the inclusion of high-wage countries does
provide greater accuracy and no party has disputed this
representation.
Second, Commerce did a thorough analysis of the data from
the twenty-two countries plaintiffs hoped to add to those used in
the regression analysis. Commerce has thus given an adequate
Court No. 05-00438 Page 8
explanation for including or excluding each country’s data. As a
result, Commerce has complied with the court’s remand instruction
to explain why it excluded twenty-one of the twenty-two
countries’ data from its calculation.
Finally, with respect to its request for voluntary remand,
Commerce recalculated the wage rate using the correct, most
current, wage rate data. “As long as the agency’s methodology
and procedures are reasonable means of effectuating the statutory
purpose, and there is substantial evidence in the record
supporting the agency’s conclusions, the court will not impose
its own views as to the sufficiency of the agency’s investigation
or question the agency’s methodology.” Shieldalloy Metallurgical
Corp. v. United States, 20 CIT 1362, 1368, 947 F. Supp. 525, 532
(1996) (quotations and citations omitted). Commerce’s
explanation reveals its data selection on remand to be reasonable
and that it has supported its findings with substantial evidence.
See United Steel, Paper and Forestry, Rubber, Manufac., Energy,
Allied Industr. and Service Workers Int’l Union v. United States
Sec’y of Labor, 32 CIT __, __, Slip Op. 08-45, at 7 (April 30,
2008) (“A fundamental requirement of administrative law is that
an agency set forth its reasons for decision.”) (quotation and
citation omitted). Thus, Commerce’s results regarding its wage
rate calculation are sustained.
Court No. 05-00438 Page 9
II. Antidumping Duty Assessment
The court in Wuhan also directed Commerce to provide
plaintiffs “the opportunity to submit further comments on whether
Commerce should calculate assessment and cash deposit rates on an
ad valorem basis or a per kilogram basis” and allow plaintiffs to
“place evidence on the record, should it find it necessary to do
so, specifically with respect to how an ad valorem methodology
furthers, or does not further, the collection of total duties
owed.” Wuhan, 31 CIT at __, Slip Op. 07-113 at 55-56. The court
further instructed Commerce to “fully explain its decision [on
remand] to use a per kilogram or ad valorem methodology by
reference to evidence placed on the record.” Id. at _, Slip Op.
07-113 at 56.
Pursuant to the court’s remand instruction, Commerce opened
the administrative record and sought comments on whether the
Department’s change in methodology to a per kilogram basis
ensured the proper collection of total duties due. Remand
Results at 18. The Department provided the parties ten days to
submit comments. Id. Defendant-intervenors timely submitted
comments, however, plaintiffs neither submitted any comments nor
requested an extension to the ten-day period. Id. at 19.
Commerce on remand determined that “it continues to be
appropriate to assess antidumping duties on a per-kilogram basis
in this case” because “the use of a per-kilogram assessment rate
Court No. 05-00438 Page 10
is in accordance with the Department’s regulations and past
practice, and [is] based on the evidence on the record.” Remand
Results at 21. Commerce “normally [ ] calculates the assessment
rate by dividing the dumping margin . . . by the entered value of
[the] merchandise for normal customs duty purposes” and applies
this ad valorem rate to the entered value of the merchandise to
calculate total antidumping duties due. Id. at 20, 22. In this
case, however, Commerce found that plaintiffs were reporting an
entered value of $1.05 - $1.50 per kilogram, an amount that was
approximately half of the U.S. sales price at $2.20 - $2.30 per
kilogram. Id. at 23. According to Commerce, such discrepancy
translated into a potential for under-collecting duties by more
than 50 percent because the ad valorem dumping margin percentage
would be applied to the lower entered value. Id. at 23. Because
it believed that the ad valorem method would allow plaintiffs to
avoid the total duties due, Commerce concluded that “the
application of the revised [per-kilogram] methodology will result
in the more accurate collection of duties in this case.” Id. at
23.
The court finds that Commerce has complied with the court’s
instructions regarding the antidumping duty assessment
methodology. Commerce provided a ten-day comment period to all
parties and addressed the court’s concern that plaintiffs were
prejudiced by the inadequate time to fully review and comment on
Court No. 05-00438 Page 11
the Department’s duty assessment methodology change. Commerce
also provided a reasonable explanation for its decision on remand
to maintain the per-kilogram rate.
With respect to the rate itself, although Commerce normally
calculates assessment rates on an ad valorem basis, it has
discretion to revise the assessment methodology and adopt a
reasonable method for ensuring an accurate collection of total
duties due. See Koyo Seiko Co. v. United States, 258 F.3d 1340,
1346 (Fed. Cir. 2001) quoting Torrington Co. v. United States, 44
F.3d 1572, 1578 (Fed. Cir. 1995) (“[T]he antidumping statute . .
. ‘merely requires that . . . the difference between foreign
market value and United States price serves as the basis for the
assessment rate.’”).
Because Commerce’s method of determining the antidumping
duty assessment and cash deposit rates is reasonable and follows
the court’s remand instructions, Commerce’s remand results on
this issue are sustained.
III. Plaintiffs’ Failure To Raise Objections To Remand Results
Commerce revised its Final Results pursuant to the court’s
order in Wuhan and released its draft Remand Results to
interested parties for comment on September 7, 2007. Remand
Results at 2. Defendant-intervenors submitted comments in
support of the Department’s draft Remand Results, stating that
Court No. 05-00438 Page 12
the Department explained in detail why its methodology was “both
lawful and rational.” Remand Results at 2. Plaintiffs provided
no comments. Remand Results at 2. Upon the release of
Commerce’s final Remand Results, plaintiffs failed again to
provide any comments. Under such circumstances, Commerce “may
well be entitled to assume that the silent party has decided, on
reflection, that it concurs in the agency’s [remand results],”
and the court will uphold the parties’ concurrence. Al Tech
Specialty Steel Corp. v. United States, 29 CIT __, __, 366 F.
Supp. 2d 1236, 1245 (2005).
CONCLUSION
For the reasons stated, Commerce’s Remand Results are
sustained. Judgment shall be entered accordingly.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: May 29, 2008
New York, New York