Wuhu Fenglian Co., Ltd. v. United States , 836 F. Supp. 2d 1398 ( 2012 )

Slip Op. 12–__
57
UNITED STATES COURT OF INTERNATIONAL TRADE
WUHU FENGLIAN CO., LTD., and
SUZHOU SHANDING HONEY
PRODUCT CO., LTD.,
Plaintiffs,
Before: Gregory W. Carman, Judge
.v.
UNITED STATES, Court No. 11-00045
Defendant,
- and -
AMERICAN HONEY PRODUCERS
ASSOCIATION, and SIOUX HONEY
ASSOCIATION,
Defendant-Intervenors.
OPINION & ORDER
[Remanding the Department of Commerce’s Final Results and Rescission of
Antidumping Duty New Shipper Reviews to accept certain excluded evidence; denying
Plaintiffs’ motion to supplement administrative record]
Dated: April 25, 2012
Yingchao Xiao, Lee & Xiao, of San Marino, CA for Plaintiffs.
Courtney S. McNamara, Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of Washington, DC, for Defendant. With
her on the briefs were Tony West, Assistant Attorney General, Jeanne E. Davidson,
Director, Reginald T. Blades, Jr., Assistant Director, and Sapna Sharma, Attorney, United
States Department of Commerce, of Counsel.
Court No. 11-00045 Page 2
Michael J. Coursey and R. Alan Luberda, Kelley Drye & Warren LLP, of
Washington, DC for Defendant-Intervenors.
CARMAN , JUDGE: Plaintiffs Wuhu Fenglian Co., Ltd. (“Fenglian”) and Suzhou Shanding
Honey Product Co., Ltd (“Suzhou”) (collectively, “Plaintiffs”) challenge a decision
rendered by the U.S. Department of Commerce (“Commerce”) rescinding antidumping
duty new shipper reviews requested by Plaintiffs. (Brief in Supp. of Pls.’ R. 56.2 Mot.
for J. Upon the Agency R. (“Pls.’ Mot.”) 1–2.) For the reasons set forth below,
Commerce’s determination is remanded for Commerce to accept and consider certain
excluded evidence.
BACKGROUND
On February 4, 2010, Plaintiffs requested new shipper reviews on honey from the
People’s Republic of China. (Pls.’ Mot. 3.) Commerce issued questionnaires and
supplemental questionnaires to which Plaintiffs timely responded, and decided on
July 7, 2010 that because of the “extraordinarily complicated” nature of this review, the
deadline for a preliminary determination would be extended to November 2, 2010. (Id.
(citing Honey From the People’s Republic of China: Extension of Time Limit for the
Preliminary Results for New Shipper Review, 75 Fed. Reg. 38,980 (July 7, 2010)).)
Commerce published its Preliminary Determination on September 10, 2010, rescinding
the new shipper reviews on the grounds that the sales made by Fenglian and Suzhou
did not appear to be bona fide. Honey From the People’s Republic of China:
Court No. 11-00045 Page 3
Preliminary Intent to Rescind New Shipper Reviews, 75 Fed. Reg. 55,307, 55,308 (Sep.
10, 2010) (“Preliminary Determination”). Commerce’s Final Determination, which
Plaintiffs challenge by this lawsuit, “made no changes to [the] preliminary decision to
rescind the [new shipper reviews] of Suzhou and Fenglian.” Honey From the People’s
Republic of China: Final Results and Rescission of Antidumping Duty New Shipper
Reviews, 76 Fed. Reg. 4,289, 4,290 (Jan. 25, 2011) (“Final Determination”).
As a threshold matter, Plaintiffs dispute Commerce’s decision to reject as
untimely two of Plaintiffs’ submissions made during the course of the administrative
proceeding. The first was Plaintiffs’ September 18, 2010 submission consisting of
rebuttal comments to an August 24, 2010 submission from Petitioners (Defendant-
Intervenors in this action). (Pls.’ Mot. 4.) The second was Plaintiffs’ September 22, 2010
submission consisting of factual information aiming to rebut certain U.S. Customs and
Border Protection data (“CBP data”) that Commerce had placed on the record on
September 2, 2010. (Id.) In rejecting each of these submissions from Plaintiffs,
Commerce cited 19 C.F.R. § 351.301(c), which regulates the time within which interested
parties may rebut certain types of information placed on the record. 19 C.F.R.
§ 351.301(c)(1), see also Def.’s Confid. App’x in Supp. of Its Resp. in Opp. to Pls.’ Mot.
for J. Upon the Agency R. (“Def.’s App’x”) Exs. M, N (letters from Commerce rejecting
Plaintiffs’ September 18 submissions), and Confid. Exs. for Brief in Supp. of Pls.’ Rule
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56.2 Mot. for J. Upon the Agency R. (“Pls.’ App’x”) Ex. 4 (letter from Commerce
rejecting Suzhou’s September 22 submission).1
Plaintiffs also assert that Commerce failed to issue enough questionnaires to
obtain all essential data before rendering the Final Determination. In addition to the
initial and supplemental questionnaires that Commerce did issue, Plaintiffs asked
Commerce to issue two further supplemental questionnaires. On September 4, 2010,
Plaintiffs requested and received a supplemental questionnaire, but it was not
addressed to the issues Plaintiffs had wanted. (Pls.’ Mot. 4.) On September 30, 2010,
Plaintiffs made one final request for a supplemental questionnaire, which Commerce
refused. (Id. at 5; Def.’s App’x Ex. R.)
Plaintiffs now also move the Court to compel supplementation of the
administrative record to include certain factual information not previously presented to
Commerce (Mot. to Supp. Admin. R. (“Mot. to Supp.”), ECF No. 73), a motion which
Commerce opposes (Resp. in Opp. to Pls.’ Mot. to Supp. Admin. R., ECF No. 76).
JURISDICTION / STANDARD OF REVIEW
The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(c), and
19 U.S.C. §§ 1516a(1), (2)(B)(iii). In reviewing Commerce’s final determination in a new
1
Commerce also issued, on September 27, 2010, a letter rejecting a joint
September 22 submission by Fenglian and Suzhou for being untimely submitted,
although this rejection did not specifically cite 19 C.F.R. § 351.301(c). (See Def.’s App’x,
Ex. P.)
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shipper review, the Court is required to “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).
ANALYSIS
While Plaintiffs dispute Commerce’s conclusion that their sales were not bona
fide (Pls.’ Mot. 19–47), and ultimately seek reversal of Commerce’s decision to rescind
the new shipper reviews (id. 48), the threshold issues presented in this case are whether
it was proper for Commerce (1) to reject certain factual submissions Plaintiffs made
during the administrative proceeding (id. 12–17), and (2) to decline to issue
supplemental questionnaires at Plaintiffs’ behest (id. 9–10). Because the Court finds that
Commerce had no lawful basis for rejecting one of Plaintiffs’ factual submissions, the
Final Determination was based on an incomplete record. Accordingly, until this error
has been corrected on remand, the Court will not decide the ultimate question of
whether Commerce’s decision to rescind the new shipper reviews is supported by
substantial evidence on the record and otherwise in accordance with law.
Regulations issued by Commerce specify time limits within which factual
information may be placed on the record in various proceedings before the agency.
19 C.F.R. § 351.301. Generally, in the case of a new shipper review, “a submission of
factual information is due no later than . . . 100 days after the date of publication of
Court No. 11-00045 Page 6
notice of initiation of the review,” which in this case would have been May 15, 2010. Id.§ 351.301(b)(4). This regulation also specifies time limits for interested parties to
“submit factual information to rebut, clarify, or correct factual information submitted
by any other interested party[,]” and sets the time limit for such rebuttals at 10 days.
Id. § 351.301(c)(1) (emphasis added). This particular subpart is the one Commerce cited
in rejecting both Plaintiffs’ September 18 and September 22 submissions.
Plaintiffs’ September 18 submission was offered to rebut factual information
submitted by an interested party (namely, Petitioners), so 19 C.F.R. § 351.301(c)(1)
governed the time within which that submission had to be made. Because the
September 18 submission was filed more than 10 days after the factual information it
sought to rebut, Commerce’s rejection of this submission was lawful under this
regulation.
Plaintiffs’ September 22 submission, however, is different. This was not a
submission offered to rebut factual information submitted by an interested party;
rather, it was an effort to rebut the CBP Data, which had been placed on the record by
Commerce. Because Commerce is not an interested party within the meaning of the
antidumping statute or regulations2, 19 C.F.R. § 351.301(c)(1) cannot limit the time for
responding to a factual submission made by Commerce. Accordingly, although
2
The definitions of “interested party” found at 19 U.S.C. § 1677(9) and 19 C.F.R.
§ 351.102(b)(29) does not include the agency itself.
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Plaintiffs’ September 22 submission was made more than 10 days after the CBP Data
were placed on the record, 19 C.F.R. § 351.301(c)(1) does not provide Commerce with a
legal basis for rejecting Plaintiffs’ September 22 submission.
Defendant advances several arguments to justify its rejection Plaintiffs’
September 22 submission, all of which the Court finds unpersuasive.3 First, while
conceding that the first sentence of 19 C.F.R. § 351.301(c)(1) authorizes rebuttal of
factual information submitted by an interested party, Defendant argues that both the
subsection’s title and its second sentence refer to rebuttal of “any factual information
placed on the record,” without regard to who placed it there. (Def.’s Resp. in Opp. to
Pls.’ Mot. for J. Upon the Agency R. (“Def.’s Resp.”) 17–18.) Thus, the 10-day time limit,
found in the second sentence, would apply to Plaintiffs’ response to the CBP data.
Defendant would have the Court accord “substantial deference” to this interpretation of
Commerce’s regulation. (Id. at 18 (citing Cathedral Candle Co. v. U.S. Int’l Trade
Comm’n, 400 F.3d 1352, 1363–64 (Fed. Cir. 2005)).) Second, Defendant argues that if 19
C.F.R. § 351.301(c)(1) does not apply to information placed on the record by Commerce,
“there would be no regulation that would allow an interested party to respond to
factual information placed on the record by Commerce.” (Id. at 19.) Defendant claims
3
Defendant-Intervenors’ arguments with respect to the September 22 submission
are entirely duplicative of Defendants’ arguments, and are similarly unavailing. (Def.-
Intervs.’ Resp. Br. in Opp. to Pls.’ Mot. for J. Upon the Agency R. 13–18.)
Court No. 11-00045 Page 8
that this court has rejected that view, and held that 19 C.F.R. § 351.301(c)(1) permits
interested parties to respond to data placed on the record by the agency. (Id. (citing
Crawfish Processors Alliance v. United States, 28 CIT __, __, 343 F. Supp. 2d 1242, 1261
(2004)).) Third, citing the agency’s interest in finalizing the record, Defendant insists
that there is no rationale for permitting a response time of any longer than 10 days to
rebut information placed on the record by a non-interested party. (Id. at 18–19.)
Additionally, Defendant contends that Plaintiffs did not provide a compelling
justification for why they could not respond to the CBP data within a 10-day period,
and faults Plaintiffs for failing to request an extension of the 10-day period pursuant to
19 C.F.R. § 351.302(c). (Id. at 20.) The Court will deal with each of these arguments in
turn.
First, the Court cannot accept Defendant’s construal of 19 C.F.R. § 351.301(c)(1) as
applying to rebuttals of information placed on the record by Commerce, because such a
view is contradicted by the plain language of the regulation. While an agency’s
interpretation of its own regulation is, indeed, entitled to substantial deference, the
Court cannot defer to an agency’s regulatory interpretation when it is plainly
erroneous, or inconsistent with the regulation itself. Thomas Jefferson Univ. v. Shalala,
512 U.S. 504, 512 (1994); United States v. UPS Customhouse Brokerage, Inc., 575 F.3d
1376, 1382 (Fed. Cir. 2009) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410,
Court No. 11-00045 Page 9
414 (1945)). In its entirety, 19 C.F.R. § 351.301(c)(1) states
(c) Time limits for certain submissions—(1) Rebuttal, clarification, or correction of
factual information. Any interested party may submit factual information to
rebut, clarify, or correct factual information submitted by any other
interested party at any time prior to the deadline provided in this section for
submission of such factual information. If factual information is submitted
less than 10 days before, on, or after (normally only with the Department's
permission) the applicable deadline for submission of such factual
information, an interested party may submit factual information to rebut,
clarify, or correct the factual information no later than 10 days after the
date such factual information is served on the interested party or, if
appropriate, made available under APO to the authorized applicant.
19 C.F.R. § 351.301(c)(1) (italics in original, bold emphasis added). This subsection
accomplishes two goals. The first sentence authorizes any interested party to rebut,
clarify or correct factual information submitted by another interested party (which
clearly does not include Commerce), provided that it does so within normally
applicable time limits (for instance, those set out in § 351.301(b)). The second sentence
ensures that the chance to make these rebuttals, clarifications or corrections will not be
unfairly cut short (or barred altogether) by the normally applicable time limits,
guaranteeing interested parties at least 10 days in which to rebut, clarify or correct.
The Court rejects Defendant’s assertion that the second sentence should be read,
literally, out of context. The “submitted” “factual information” referred to at the start of
the second sentence clearly invokes the “factual information submitted by any other
interested party” from the first sentence. Moreover, information placed on the record
Court No. 11-00045 Page 10
sua sponte by Commerce is not, technically, “submitted.” Submitted information
denotes that which has been “present[ed] or propos[ed] to another for review,
consideration, or decision,” which is how information from an interested party makes
its way to the record. See Merriam Webster Online Dictionary, http://www.merriam-
webster.com/dictionary/submit (last visited April 23, 2012). By contrast, the CBP data is
factual information that has been “obtained by” Commerce, and which the agency is
required to “include” in the official and public records. See 19 C.F.R. § 351.104(a), (b). If
Commerce had intended for 19 C.F.R. § 351.301(c)(1) to regulate the time for rebutting,
clarifying or correcting all factual information included in the record, regardless of
source, rather than just factual information submitted by an interested party, it would
have been easy enough to do so. Absent that, however, the Court cannot interpret the
regulation contrary to its plain meaning, nor uphold Commerce’s interpretation doing
the same. Consequently, the Court holds that Commerce’s rejection of Plaintiffs’
September 22 submission pursuant to 19 C.F.R. § 351.301(c)(1) was unlawful, as that
regulation does not control the time for an interested party to rebut factual information
placed on the record by Commerce.
Defendant’s second argument—that if 19 C.F.R. § 351.301(c)(1) is inapplicable to
information Commerce places on the record, Plaintiffs would be unable to rebut it—is
based on the misguided assumption that Commerce is at liberty to reject every
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interested party submission made without explicit regulatory authorization. While
Commerce clearly has the discretion to regulate administrative filings, that discretion is
bounded at the outer limits by the obligation to carry out its statutory duty of
“determin[ing] dumping margins ‘as accurately as possible.’” NTN Bearing Corp. v.
United States, 74 F.3d 1204, 1208 (Fed. Cir. 1995) (quoting Rhone Poulenc, Inc. v. United
States, 899 F.2d 1185, 1191 (Fed Cir. 1990)). This means that on occasion, the courts have
compelled Commerce to accept interested party submissions that were made without
conformity to Commerce’s regulations. See id. Moreover, Commerce’s own
regulations acknowledge that the agency “obtains most of its factual information in
antidumping and countervailing duty proceedings from submissions made by
interested parties during the course of the proceeding.” 19 C.F.R. § 351.301(a).
Consequently, if Commerce refused to permit rebuttal of information that it had placed
on the record, for no reason other than the absence of a regulation expressly permitting
such rebuttal, Commerce would be abusing its discretion, to the extent such refusal
unduly hampered its ability to accurately determine dumping margins. In other words,
interested parties are not uniformly prohibited from rebutting factual information
Commerce places on the record simply because 19 C.F.R. § 351.301(c)(1) does not
explicitly authorize them to do so.
Contrary to Defendant’s argument, Crawfish did not hold that 19 C.F.R.
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§ 351.301(c)(1) authorizes rebuttals to information placed on the record by Commerce.
Crawfish, 343 F. Supp. 2d 1261–62. The holdings in Crawfish and this case are
harmonious. In Crawfish, Commerce had placed new factual information on the record
roughly three weeks after the initial deadline for submitting factual information (set out
in 19 C.F.R. § 351.301(b)) had passed. Id. at 1261. An interested party then attempted to
rebut and clarify Commerce’s factual information via two submissions, made seven and
eight days later, respectively. Commerce rejected these submissions, on the grounds
that they did “not clarify or rebut factual information submitted by an interested party
since Commerce” had placed the information on the record, reasoning that the
interested party rebuttal submissions were not authorized submissions under 19 C.F.R.
§ 351.301(c)(1). Id. The court held that “Commerce improperly rejected” these
submissions, noting that if it credited the government’s argument, Commerce would be
free to “place erroneous factual information on the record [that] interested parties
would not be afforded the opportunity to rebut or clarify.” Id. The court in Crawfish
did not hold that 19 C.F.R. § 351.301(c)(1) authorized the rebuttals filed in that case, but
rather simply held that Commerce’s rejection of the rebuttal submissions had been
improper. See id. at 1261–62. This Court reaches a similar result in the case at hand.
Defendant’s third argument—that Plaintiffs have provided no reason why the
time to rebut non-interested party information should be longer than the time to rebut
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interested party information—misses the point. It is not incumbent on Plaintiffs to
explain why a different time frame should apply, because the Court is not evaluating a
decision by the agency to adopt a 10-day window for rebuttals to non-interested party
information going forward. Instead, the issue is whether it was lawful for Commerce to
reject Plaintiffs’ September 22 submission, when at the time the submission was made
there existed no statute, regulation or well established agency practice limiting the time
for making such rebuttals. The answer to that question warrants careful consideration
of the specific facts of this case, and calls for the Court to strike a balance between the
interests of finality and accuracy. NTN Bearing Corp., 74 F.3d at 1208 (quoting Civil
Aeronautics Bd. v. Delta Airlines, Inc., 367 U.S. 316, 321 (1961) (“Whenever a question
concerning administrative, or judicial, reconsideration arises, two opposing policies
immediately demand recognition: the desirability of finality, on the one hand, and the
public interest in reaching what, ultimately, appears to be the right result on the
other.”)).
In this instance, where there was no applicable statute or regulation, nor even
any well known agency practice establishing a shorter window for Plaintiffs to rebut
factual information placed on the record by a non-interested party, a rebuttal submitted
20 days after the non-interested party data was placed on the record and almost four
months prior to the issuance of the final results was sufficiently timely to warrant
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acceptance and consideration from Commerce.4 Thus, in rejecting this submission
Commerce struck an unlawful balance between finality and accuracy, which the Court
is compelled to set aside. See 19 U.S.C. § 1516a(b)(1), (B)(i) (requiring the court to “hold
unlawful” any determination found to be “not in accordance with law.”) The Court of
Appeals for the Federal Circuit (the “Court of Appeals”) has noted that “preliminary
determinations are ‘preliminary’ precisely because they are subject to change,” and that
at the preliminary results stage, “the tension between finality and correctness simply
[does] not exist.” NTN Bearing Corp., 74 F.3d at 1208; see also Timken U.S. Corp. v.
United States, 434 F.3d 1345, 1353–54 (Fed. Cir. 2006) (concluding that because the
plaintiff made a submission of corrections “after Commerce issued the preliminary
results, but before it issued the final results,” this court did not err in requiring the
agency to consider that submission). Moreover, the Court of Appeals has also held
“that Commerce is free to correct any type of importer error—clerical, methodology,
substantive, or one in judgment—in the context of making an antidumping duty
determination, provided that the importer seeks correction before Commerce issues the
final results and adequately proves the need for the requested corrections.” Timken,
4
Plaintiffs were not required to seek an extension of time under 19 C.F.R.
§ 351.302(c) because, as explained supra, 19 C.F.R. § 351.301 was inapplicable.
Moreover, Defendant does not identify, and the Court is unaware of any authority
requiring Plaintiffs to provide a compelling excuse for taking as much time to file as
they did. (See Def.’s Resp. 20.)
Court No. 11-00045 Page 15
434 F.3d at 1353. In the wake of this precedent, it becomes an easy call: the Court holds
that not only was Commerce’s rejection of Plaintiffs’ September 22 submission not
compelled by any legal authority, it unlawfully favored finality over accuracy at the
preliminary results stage, and therefore must be set aside. On remand, Commerce is
directed to accept Plaintiffs’ September 22 submission, and issue a redetermination
accordingly.
Plaintiffs’ remaining argument that Commerce abused its discretion in declining
to issue each and every supplemental questionnaire that Plaintiffs had requested is
without merit. Plaintiffs identify no legal authority for their contention that Commerce
acted unlawfully in declining to issue additional post-preliminary questionnaires, and
the Court sees no reason why the agency may have abused its discretion. See Emerson
Power Transmission Corp. v. United States, 19 CIT 1154, 1160, 903 F. Supp. 48, 54 (1995)
(“While [plaintiff] is correct to assert that Commerce may request additional
information, . . . [plaintiff’s] argument that Commerce should have requested the
information is inconsistent with Commerce's broad discretion under the antidumping
laws.”).
Finally, the Court declines to grant Plaintiffs’ April 2, 2012 motion to compel
supplementation of the administrative record to include certain information not
previously presented to the agency. While Plaintiffs assert that under certain conditions
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“[t]he Court has discretion to consider matters outside the administrative record,” (Mot.
to Supp. 3), the Court declines to do so here. Instead, the Court will evaluate the
determinations, findings and conclusions of Commerce on the basis of the record that
was assembled before the agency. 28 U.S.C. § 2640(b); 19 U.S.C. § 1516a(b)(1)(B)(i).
Similarly, at this time, the Court is disinclined to obligate Commerce to accept or
consider factual information that was not presented during the underlying
administrative proceeding. Plaintiffs are, of course, free to seek Commerce’s leave to
supplement the administrative record while this case is on remand, and the Court will
evaluate Commerce’s treatment of such a request under the standard set out in 19
U.S.C. § 1516a(b)(1)(B)(i) in due course.
CONCLUSION
For the foregoing reasons, the Court remands this case to Commerce for action
consistent with this opinion, and it is hereby
ORDERED that Commerce shall file the results of its redetermination on remand
no later than Monday, June 25, 2012, and it is further
ORDERED that Plaintiffs’ comments on Commerce’s remand results shall be no
more than 30 pages, and shall be filed no later than Wednesday, July 25, 2012, and it is
further
ORDERED that Defendant and Defendant-Intervenors may file responses to
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Plaintiffs’ comments of no more than 30 pages each, and such responses shall be filed no
later than Friday, August 24, 2012, and it is further
ORDERED that Plaintiffs may file a reply to Defendant’s and Defendant-
Intervenors’ responses of no more than 10 pages total, and such reply shall be filed no
later than Monday, September 10, 2012, and it is hereby
ORDERED that Plaintiffs’ Motion to Supplement the Administrative Record is
DENIED.
/s/ Gregory W. Carman
Gregory W. Carman, Judge
Dated: April 25, 2012
New York, New York