Diamond Sawblades Mfrs.' Coal. v. United States , 2015 CIT 105 ( 2015 )

Slip Op. 15 - 105
UNITED STATES COURT OF INTERNATIONAL TRADE
:
DIAMOND SAWBLADES :
MANUFACTURERS’ COALITION, :
:
Plaintiff, :
:
v. : Before: R. Kenton Musgrave, Senior Judge
:
UNITED STATES, : Court No. 13-00078
:
Defendant, :
:
and :
:
BEIJING GANG YAN DIAMOND :
PRODUCTS COMPANY, GANG YAN :
YAN DIAMOND PRODUCTS, INC., and :
CLIFF INTERNATIONAL, LTD., :
:
Intervenor-defendants. :
:
OPINION
[Sustaining results of redetermination of first administrative review antidumping duty order on
diamond sawblades and parts thereof from the People’s Republic of China.]
Decided: September 23, 2015
Daniel B. Pickard and Maureen E. Thorson, Wiley Rein LLP, of Washington, DC, for the
plaintiff.
Alexander V. Sverdlov, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for the defendant. With him on the brief were Benjamin
C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin
E. White, Jr., Assistant Director. Of Counsel on the brief was Aman Kakar, Attorney, Office of the
Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of
Washington, DC.
Court No. 13-00078 Page 2
Jeffrey S. Neeley and Michael S. Holton, Husch Blackwell LLP, of Washington, DC, for the
defendant-intervenors.
Musgrave, Senior Judge: Diamond Sawblades and Parts Thereof from the People’s
Republic of China (“PRC”), 78 Fed. Reg. 11143 (Feb. 15, 2013), and accompanying issues and
decision memorandum (Feb. 8, 2013) (“IDM”), PDoc 353, which concerns the first administrative
review of subject merchandise covering the 2009-2010 period, was previously remanded for further
proceedings consistent with Slip Op. 14-50 (Apr. 29, 2014), familiarity with which is here presumed.
Before the court are the final results of remand (“Redetermination” or “RR”) and the parties’
comments thereon. As a result of remand, the contentions in this case now center on Commerce’s
reduction of the “PRC-wide” rate of antidumping duty from 194.09% to 82.12%, which appears to
be an issue of first impression. For the following reasons, the court sustains the Redetermination.
Background
The matter was voluntary remanded in part, at the request of the defendant
International Trade Administration, U.S. Department of Commerce (“Commerce”), in order to
reconsider the determination to grant a separate rate to the “ATM entity,” a “collapsed” respondent
in the underlying administrative review.1 Also remanded was whether collapse of the ATM entity
1
See 19 C.F.R. §351.401(f). For purposes of the administrative review, the “ATM entity”
was found to consist of the three companies found to be affiliated in the underlying investigation
(Advanced Technology & Materials Co., Ltd., Beijing Gang Yan Diamond Products Co., and
Yichang HXF Circular Saw Industrial Co., Ltd.) combined with additional affiliates AT&M
International Trading Co., Ltd., and Cliff International Ltd. RR at 1 n.1, referencing Memorandum
re Diamond Sawblades and Parts Thereof from the PRC: Determination to Include Additional
Companies in the ATM Single Entity (Nov. 30, 2011), CDoc 103, PDoc 118; see also IDM at 2. The
intervenor-defendants who participated in briefing, Beijing Gang Yan Diamond Products Co. and
Gang Yan Diamond Products, Inc., are herein referenced “ATM” for the sake of consistency; Cliff
International Ltd. did not participate in briefing.
Court No. 13-00078 Page 3
should have included the China Iron and Steel Research Institute (“CISRI”). Consistent with the
redetermination addressed by Advanced Technology & Materials Co. v. United States, Court No. 09-
00511 (“Advanced Tech”), remand results sustained, 37 CIT ___, 938 F. Supp. 2d 1342 (2013),
aff’d, 581 Fed. Appx. 900 (Fed. Cir. 2014), on remand Commerce redetermined that the ATM entity
failed to rebut the presumption of state control and demonstrate entitlement to a separate rate.
Having thus been redetermined part of the PRC-wide entity, the ATM entity is subject to the PRC-
wide antidumping duty rate. That determination is hereby sustained.
Due to finding that the ATM entity is not entitled to a separate rate, Commerce
considered the issue of whether CISRI should be included in the ATM entity as moot. See RR at 2.
The plaintiff, Diamond Sawblades Manufacturers’ Coalition (“DSMC”) contests that conclusion due
to the following.2 During the less-than-fair-value (“LTFV”) investigation, Commerce determined
the PRC-wide rate to be 164.09% based on non-cooperation from the entities comprising the PRC-
wide entity. On remand of the instant matter, however, Commerce determined that the PRC-wide
rate needed to take into account inclusion of the ATM entity in the PRC-entity. Information on the
record had previously enabled determination of the ATM entity’s rate as 0.15%. Commerce found,
however, that it did not have the necessary sales and production information to calculate that portion
of the margin that represents the remaining but unspecified portion of the PRC-wide entity, but it
also determined that no part of the PRC-wide entity had failed to cooperate to the best of its ability.
2
According to the DSMC, the agency’s draft results did not ref1ect any downward
adjustment of the PRC-wide rate, or any intent to make such an adjustment. DSMC Cmts. at 6 n.4,
referencing Draft Results of Redetermination Pursuant to Court Remand (Jan. 12, 2015), RRPDoc
2. Instead, DSMC contends, the draft results indicated that the ATM entity would be subject to the
164.09 percent rate. Id. referencing RRPDoc at 5.
Court No. 13-00078 Page 4
For its Redetermination, therefore, Commerce determined to use a simple average of the previously-
assigned PRC-wide rate and the calculated margin for the ATM entity. Commerce thus revised the
PRC-wide rate to 82.12% to account for the ATM entity’s inclusion in among the PRC-wide entity.
The Redetermination satisfies neither party.
Argument
ATM argues the results of remand are unlawful because Commerce has found “full
cooperation” by the ATM entity and all elements of the PRC-wide entity in this review and because
the statute does not allow use of a partial adverse inference if there has been full cooperation. See,
e.g., Def-Int’s Cmts at 1. ATM further argues the adverse portion of the final margin determined
for the PRC-wide entity is based on information not on the record of this review nor has that
information been corroborated as required by 19 U.S.C. §1677e(c). ATM contends Commerce was
and is aware of the precise rate of 0.15% that is applicable to it, a cooperative respondent, and that
Commerce must use this rate as the rate that is applicable to it. Def-Int’s Cmts. at 6. ATM thus
continues to argue that it is somehow entitled to separate consideration notwithstanding. See, e.g.,
id. at 11 (“[i]ndeed, a fairly obvious approach here would have been to use the actual factual
information on the record of this review and apply the 0.15 percent here as the assessment rate for
[ATM], but continue to apply a different and higher rate as the rate for those who failed to respond
or cooperate”). Admitting the possibility of a “higher rate” for other members of the PRC-wide
entity, ATM does not appear go so far, however, as to argue that the PRC-wide rate should be 0.15%.
The DSMC argue that Commerce’s adjustment of the PRC-wide rate is contrary to
agency practice and policy, and that the ATM entity should receive the PRC-wide rate that was
Court No. 13-00078 Page 5
calculated during the investigation. Allowing the conduct of a single member of the PRC-wide
entity to affect the PRC-wide entity rate, the DSMC argue, “would allow for the PRC-wide entity
to potentially manipulate AD results by selectively providing data on the record and dictating what
data can be verified.” DSMC Resp. to Def-Int’s Cmts. at 3, quoting issues and decision
memorandum accompanying Galvanized Steel Wire from the PRC, 77 Fed. Reg. 17430 (Mar. 26,
2012) (final LTFV determ.) at cmt. 1.C (“Galvanized Steel Wire”).3 “In other words, this would
allow the PRC-wide entity to manipulate the margin by having a single member of the PRC-wide
entity cooperate in an investigation or administrative review and thereby obtain a low margin for the
entire PRC-wide entity, defeating the purpose of the Department's separate rates practice.” Id.
The DSMC also argue the agency’s downward adjustment of the PRC-wide rate is
premised on the fact that no PRC-wide entity member has failed to cooperate. Id. at 9. CISRI is a
member of the ATM entity, the DSMC contend; therefore the record “may indeed indicate that the
[ATM e]ntity as a whole did not cooperate and . . . , thus, there are uncooperative members of the
PRC-wide entity.” DSMC Cmts at 8 n.6. Although the DSMC do not elaborate further on that
proposition, they also contend Commerce’s “Solomonesque” determination is speculative, arbitrary,
and capricious, that the record does not support finding, in essence, that the ATM entity accounted
for half of exports of subject merchandise to the U.S., and that if the PRC-wide rate is to be adjusted
at all, which the DSMC do not concede, then a more logical approach would be based on the number
of potential respondents comprising the PRC-wide entity, which the DSMC calculate as 22, i.e., a
3
See also issues and decision memorandum accompanying Carbon and Certain Alloy Steel
Wire Rod from the PRC, 79 Fed. Reg. 53169 (Aug. 29, 2014) (inter alia prelim. LTFV determ.) at
18, n.91 (determining not to verify mandatory respondents that had been found to be part of the
PRC-wide entity) (citing Galvanized Steel Wire at cmt. l.C).
Court No. 13-00078 Page 6
“weighting” of the ATM entity’s rate in the PRC-wide rate amounting to 1/22nd. In any case, the
DSMC argue, Commerce does not explain whether it is changing its longstanding position or
practice regarding non-market economies and the PRC-wide rate and, if so, on what basis:
For example, is the agency taking the position that application of the PRC-wide rate
is necessarily the result of adverse inferences, and thus may not be applied to the
extent that the PRC-wide entity is “cooperative”? If so, how does the agency
reconcile this view with judicial precedent from the original investigation finding that
assignment of the PRC-wide rate is not assignment of an adverse rate? . . .
Moreover, how does the agency determine whether the PRC-wide entity as a whole
has been cooperative or uncooperative? The agency’s remand results do not discuss
these questions, or otherwise elucidate the basis, in policy, fact, or past proceedings,
for its current actions.
Id. at 8.
Addressing the parties’ comments, Commerce defends its position as follows:
Typically, when Commerce determines that an exporter in a non-market
economy such as [the PRC] has failed to demonstrate independence from state
control, Commerce declines to conduct any further inquiry into the exporter’s
separate, individual business practices. Instead, Commerce assigns the exporter a
single country-wide margin that reflects the aggregate behavior of all the exporters
of subject merchandise presumed to be under state control. See generally Remand
at 7-8; 19 C.F.R. §351.107(d) (“In an antidumping proceeding involving imports
from a nonmarket economy country, ‘rates’ may consist of a single dumping margin
applicable to all exporters and producers.”); see also Watanabe Group v. United
States, . . . Slip Op. 10-139 at 8 (Ct. Int’l Trade Dec. 22, 2010) (“Commerce’s
permissible determination that [a respondent] is part of the PRC-wide entity means
that inquiring into [that respondent]’s separate sales behavior ceases to be
meaningful.”); Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F. Supp.
2d 1295, 1312 n.21 (Ct. Int’l Trade 2012) (noting that “losing all entitlement to an
individualized inquiry appears to be a necessary consequence of the way in which
Commerce applies the presumption of government control”).
Here, however, Commerce had already conducted such an individualized
inquiry of ATM earlier in its proceedings. Indeed, ATM provided information that
enabled Commerce to calculate a specific rate for ATM, based on its data and
individual circumstances: 0.15 percent. The question before Commerce was
therefore what bearing that information should have on its calculations.
Court No. 13-00078 Page 7
Contrary to ATM’s suggestion, the PRC-wide entity’s rate assigned to ATM
could not be ATM’s prior separate rate of 0.15 percent. That rate was an individual
margin that reflected ATM’s individual circumstances and individual pricing
behaviors. Once Commerce determined that ATM was ineligible for such an
individual margin, Commerce grouped ATM together with the other state controlled
companies -- as a result, the rate ATM would receive had to reflect the aggregate
behavior of the entire PRC-wide entity, not just ATM’s own behavior. See generally
Remand at 7-8 (explaining that ATM had to be subject to the single PRC-wide rate).
Because, during its investigation, Commerce had found the PRC-wide rate to be
164.09 percent, it stands to reason that the rate ATM receives as part of the
PRC-wide entity should reflect a portion of that number.
But DSMC is similarly [incorrect] to claim that the 0.15 rate should have no
bearing at all on Commerce’s calculations. See generally DSMC Br. at 6-9. By
incorporating ATM into the PRC-wide entity, Commerce changed the group of
companies that comprised that entity. Moreover, with ATM included among the
group of state-controlled companies, Commerce knew (based upon information in
the administrative record) that at least some portion of the PRC-wide entity was
dumping at 0.15 percent. Commerce reasonably determined that it should recalculate
the PRC-wide rate to account for this new information.
Commerce’s ultimate conclusion -- finding that the PRC-wide margin should
be halfway between the rate previously calculated for ATM and that previously
calculated for all of the other state-controlled companies -- reflects a reasonable
resolution of these considerations. On one hand, Commerce acknowledged that the
information ATM provided about its pricing behavior was relevant to the PRC-wide
entity because ATM was now a part of that entity; on the other hand, Commerce
recognized that there were more components to the PRC-wide entity than just ATM.
And the decision to take a simple average between the known rate for ATM
and the prior rate for all the state-controlled companies is reasonable given that
Commerce had no information about what proportion of the PRC-wide entity ATM
comprised -- and therefore could not calculate a more precise weighted average.[4]
4
Cf. 19 U.S.C. § 1673d(c)(1) (“[i]f the determination of the administering authority under
subsection (a) of this section is affirmative, then . . . (B)(i) the administering authority shall -- (I)
determine the estimated weighted average dumping margin for each exporter and producer
individually investigated, and (II) determine . . . the estimated all-others rate for all exporters and
producers not individually investigated”) with 19 C.F.R. §351.107(d) (“in an antidumping
proceeding involving imports from a nonmarket economy country, ‘rates’ may consist of a single
dumping margin applicable to all exporters and producers”).
Court No. 13-00078 Page 8
Indeed, Commerce did not have information to determine with any greater precision
what portion of the PRC-wide entity ATM represented.
ATM and DSMC present various theories to challenge Commerce’s
determination. None of these have merit. For example, ATM claims that averaging
its calculated individual rate with that of the PRC-wide entity improperly punished
it with an “adverse” rate. But a similar line of argument has already been laid to rest
by this Court’s decision in Advanced Tech, which has been upheld by the Federal
Circuit. See 938 F. Supp. 2d at 1350-51. There, this Court considered the
application of the PRC-wide rate to ATM in the context of the diamond sawblades
investigation, and concluded that applying the PRC-wide rate to ATM was not, in
itself, an application of adverse inferences. See id. Rather, it was merely the
consequence of ATM failing to rebut the presumption of state control. See id.
Further, as the Court noted, the fact that the PRC-wide rate was itself
calculated based on adverse inferences did not make applying that rate to ATM
improper. See id. As the Court explained, the PRC-wide entity rate must be
corroborated to the PRC-wide entity as a whole, and not to the individual members
of that entity. See id.; see also Peer Bearing Co.--Changshan v. United States, 587
F. Supp. 2d 1319, 1327 (2008) (“[T]here is no requirement that the PRC-wide entity
rate based on AFA relate specifically to the individual company. It is not directly
analogous to the process used in a market economy, where there is no countrywide
rate. Here, the rate must be corroborated according to its reliability and relevance to
the countrywide entity as a whole.”) (citations omitted). This reasoning defeats all
of ATM’s claims that the rate it received was not properly corroborated, or that the
rate was improperly based on certain companies’ failure to cooperate in the
investigation when there was no equivalent failure in this review. Simply put, once
Commerce established the PRC-wide rate, it was permitted to use that rate in the
manner it did in this review.
ATM’s complaint that the PRC-wide rate could not be used because it was
not part of the record of this review is similarly misguided. The PRC-wide rate from
the investigation was public information that was known to Commerce and all
interested parties. ATM presented no new evidence to suggest that the country-wide
rate was no longer applicable to the PRC-wide entity. Accordingly, the use of that
rate was proper.
For its part, DSMC claims that Commerce’s decision to recalculate the
PRC-wide rate after including ATM in the PRC-wide entity was inconsistent with
various precedent finding that an individual company’s behavior ceases to be
Court No. 13-00078 Page 9
meaningful once it is included in a country-wide entity.[5] This argument also misses
the point. Commerce was not conducting a de novo inquiry into ATM’s behavior;
rather, as a result of its decision to include ATM in the PRC-wide entity, Commerce
had new record information about the PRC-wide entity as a whole. It is not improper
for Commerce to consider such new information: DSMC certainly cites no law or
regulation that precludes Commerce from doing so. See generally DSMC Br. at 7-9.
And although DSMC is correct that cases from this Court have stated that a
company’s individual behavior becomes irrelevant once that company is incorporated
into the country-wide entity, those cases dealt with whether Commerce was required
to inquire into an individual company’s individual pricing behavior in the first
instance before assigning it a country-wide rate. See, e.g., Jiangsu, 884 F. Supp. 2d
at 1312 n.21; Advanced Tech, 938 F. Supp. 2d at 1350 51. The language of those
cases therefore does not -- and should not -- preclude Commerce from considering
what it actually knows about portions of the country-wide entity in assigning that
entity a rate. Indeed, it would be strange if Commerce were required to blind itself
to information about the circumstances of a portion of the country-wide entity to
which Commerce assigns an estimated margin.
DSMC also complains that Commerce should have recalculated the
PRC-wide rate not as a simple average of ATM’s prior rate and the rate of the other
state-controlled companies, but as a weighted average: in DSMC’s view, because
there were at least 21 other state-controlled companies, ATM’s pricing behavior
should have accounted for only 1/22 of the total. See DSMC Br. at 9-10. But there
is no reason to think that the latter approach is any better than the one Commerce
used. The record contained no information about what portion of the PRC-wide
entity ATM comprised. Assuming that each known company that made up the entity
produced and exported the same volume of goods is no more justified than assuming
5
See DSMC’s Cmts on RR (May 13, 2015) at 7-8; see also DMSC’s Resp. to Def-Int’s Cmts
at 4-6, referencing, inter alia, Brake Rotors from the PRC, 70 Fed. Reg. 24382, 24389 (May 9, 2005)
(inter alia, prelim. seventh rev. results; denying respondent a separate rate based on information
obtained at verification and not altering the PRC-wide rate based on that respondent’s margin
calculation), unchanged in final determination, 70 Fed. Reg. 69937 (Nov. 18, 2005) (inter alia, final
seventh rev. results); Porcelain-on-Steel Cooking Ware from the PRC, 70 Fed. Reg. 76027 (Dec. 22,
2005) (prelim. rev. results denying separate rate and not altering PRC-wide rate based on
respondent’s margin calculation), unchanged in final determination, 71 Fed. Reg. 24641 (Apr. 26,
2006) (final rev. results); and see also DSMC’s Cmts on RR at 6-8 acknowledging recent contra,
e.g., Certain New Pneumatic Off-the-Road Tires From the PRC, 80 Fed. Reg. 20197 (Apr. 15, 2015)
(final rev. results; 2012-2013) and accompanying issues and decision memorandum at cmt. 1
(finding respondent ineligible for separate rate and calculating final margin for PRC-wide entity,
including respondent, using a simple average of previously assigned PRC-wide rate and the
calculated final margin for respondent).
Court No. 13-00078 Page 10
that ATM comprised one half of that total. But, unlike DSMC’s methodology,
Commerce’s approach is consistent with its practice of performing a simple average
where a weighted-average is not available.
Finally, DSMC’s claim that Commerce did not adequately explain its
reasoning on these points is likewise unavailing. In its remand, Commerce explained
its decision to recalculate the PRC-wide rate and cited authority for doing so. See
generally Remand at 2-4, 7-10. If Commerce’s explanation does not refute every
argument DSMC now presents, that is because Commerce did not previously see
those arguments: Commerce only made the decision to re-calculate the PRC-wide
rate after the draft remand results. Nevertheless, Commerce’s remand provides a
reasoned explanation for its decision.
In the end, Commerce’s determination on remand was a proper resolution of
the issue facing Commerce. Accordingly, it should be sustained.
Def’s Resp. to Remand Cmts at 4-9 (footnotes omitted; court’s bracketing in part).
Discussion
The question on remand for Commerce was the ATM entity’s eligibility for a separate
rate, consistent with Advanced Tech. As mentioned, in redetermining the ATM entity to have been
part of the PRC-wide entity, Commerce concluded that it had to reconsider what impact that had on
the PRC-wide rate.
Commerce’s address of the ATM entity’s comments, above, is not unreasonable.
Commerce has a well-established practice of assigning the PRC-wide entity rate to individually
investigated respondents who participated in an investigation or review but do not qualify for a
separate rate. See, e.g., Certain Pneumatic Off-the-Road Tires from the PRC, 80 Fed. Reg. 20197
(Apr. 15, 2015) (final 2012-2013 rev. results) and accompanying issues and decision memorandum
at cmt. 1; Certain Activated Carbon From the PRC, 78 Fed. Reg. 26748 (May 8, 2013) (prelim.
2011-2012 rev. results) and PDM at 10-11, unchanged in final results, 78 Fed. Reg. 70533 (Nov. 26,
Court No. 13-00078 Page 11
2013). Research indicates that prior to December 4, 2013, whenever a respondent failed to establish
its eligibility for a separate rate Commerce’s practice was to conditionally “review” the PRC-wide
entity rate.6 See, e.g., Certain Lined Paper Products From the PRC, 78 Fed. Reg. 34640 (June 10,
2013) (inter alia prelim. 2011-2012 rev. results) and accompanying issues and decision
memorandum. Given such practice and the circumstances of this case, ATM’s arguments regarding
a lack of corroboration of the PRC-wide rate and the inapplicability of that rate (as “reviewed”) to
it are inapposite; further, the DSMC’s contention that Commerce omitted explanation of why it
considered that the PRC-entity rate had to be reexamined is also without merit.
Commerce’s overall response to the DSMC’s comments is also reasonable, although
further clarification would have been helpful.7 For example, in response to the DSMC’s case
references, Commerce distinguishes its reconsideration of the ATM entity’s eligibility for a separate
rate as “not conducting a de novo inquiry into ATM’s behavior” on remand. The court is unsure of
what Commerce means by this, as that characterization does not accurately encompass what
transpired during the proceeding. Commerce has oft-stated that it considers each segment of an
antidumping proceeding as separate (essentially a blank slate), see, e.g., Shandong Huarong
Machinery Co. v. United States, 29 CIT 484, 491 (2005), and thus whether the ATM entity was
6
See Antidumping Proceedings: Announcement of Change in Department Practice for
Respondent Selection in Antidumping Duty Proceedings and Conditional Review of the Nonmarket
Economy Entity in NME Antidumping Duty Proceedings, 78 Fed Reg. 65963, 65970 (Nov. 4, 2013)
(current administrative practice now requires an explicit request prior to initiating a review of the
NME entity).
7
See Bowman Transportation, Inc. v. Arkansas-Best Freight System Inc., 419 U.S. 281,
285-86 (1974) (a court may “uphold a decision of less than ideal clarity if the agency's path may
reasonably be discerned” ).
Court No. 13-00078 Page 12
eligible for a separate rate (a de novo question) was part and parcel of this first administrative review
proceeding. In other words, the fact that it was judicial process that has led to reconsideration of the
question would seem to be irrelevant.
The DSMC also argued the matter at bar resembles the type of situation Commerce
confronted during litigation of the original investigation, in which Commerce did not alter the
PRC-wide entity rate but rather in the final analysis assigned the existing PRC-wide rate to the ATM
entity without regard for the originally-calculated individual margin. See Advanced Tech, 938 F.
Supp. 2d at 1342. The DSMC’s proposition is valid, but only to a certain extent, because the rate
established at the investigation is only intended to be an estimate, whereas it is at the administrative
review stage that the actual and “precise” assessment and future cash deposit rate is established. See,
e.g., AK Steel Corp. v. United States, 21 CIT 1204, 1215 (1997). On the other hand, as the DSMC
imply, there is no reason to suppose that consideration of the impact the ATM entity’s inclusion in
the PRC-wide entity, as confirmed through litigation, was precluded during the LTFV investigation.
Commerce’s response to the DSMC’s arguments also elides over what transpired in
Brake Rotors from the PRC, in which the respondent in question, Huanri General, was first examined
in the fifth new shipper review of that subject merchandise and granted a separate rate. Brake Rotors
From the PRC, 66 Fed. Reg. 29080 (May 29, 2001) (prelim. results and partial rescission of new
shipper rev.). During the seventh administrative review of the merchandise, Huanri General,
apparently cooperative, was denied a separate rate based on information obtained at verification. 70
Fed. Reg. at 24389. And it is notable that such circumstance did not cause Commerce to consider
altering the PRC-wide rate based on Huanri General’s margin calculation. Cf. 70 Fed. Reg. at 24392
Court No. 13-00078 Page 13
(unchanged in final results, 70 Fed. Reg. 69937) with Brake Rotors From the PRC, 69 Fed. Reg.
42039, 42040 (inter alia final sixth rev. results). Commerce’s expressed position here -- that it is
not precluded from considering what it actually knows about portions of the country-wide entity
when reexamining the country-wide margin -- may be legally correct, but the DSMC are also correct
that Commerce’s position is at odds with Brake Rotors from the PRC. Nonetheless, the court cannot
conclude Commerce’s position unreasonable, as it would indeed be “strange” were Commerce so
precluded as a matter of law.
The DSMC also argue Porcelain-on-Steel Cooking Ware from the PRC, supra, is
analogous. That administrative review, however, does not support the proposition that the conduct
of individual members of the PRC-wide entity is meaningless to the determination of the appropriate
rate for that PRC-wide entity -- in fact, quite the opposite. The only respondent in that proceeding,
Watex, had been determined ineligible for a separate rate. 70 Fed. Reg. at 76028-29. “As a result,”
Commerce determined “that it is necessary to review the single PRC entity, including Watex, in this
segment of the proceeding.” Id. at 76029. The “reviewed” PRC-entity received an adverse inference
and adverse facts available because Watex had failed to comply to the best of its ability with repeated
requests for information, and Commerce therefore assigned the PRC-entity “the highest rate
determined in any previous segment of this proceeding.” Id.8
8
Cf. Antidumping Manual, Ch. 10 §IV.B. (“Occasionally, the NME-wide rate may be
changed through an administrative review.[ ] This happens when 1) the Department is reviewing the
NME entity because the Department is reviewing an exporter that is part of the NME entity, and 2)
one of the calculated margins for a respondent is higher than the current NME-wide rate”) (noting
that in a new shipper review, there is no change to the NME-wide rate, as a new shipper review
covers only an exporter that is eligible for a separate rate, and referencing Freshwater Crawfish Tail
Meat from the PRC, 67 Fed. Reg. 19546, 19549 (Apr. 22, 2002) (inter alia, final rev. and new
shipper results)).
Court No. 13-00078 Page 14
The status quo of the matter at bar, by contrast, is a record of the PRC-wide entity that
was previously determined uncooperative during the investigation but which now includes the
cooperative ATM entity as part of the PRC-wide entity. The particular portion of the
Redetermination addressing that circumstance provides: “unlike the [LTFV] investigation, no part
of the PRC-wide entity failed to cooperate to the best of its ability.” RR at 9. As mentioned, the
ATM entity characterizes this as a determination of “full” cooperation by the PRC-wide entity. Def-
Int’s Cmts. on RR at 1. That characterization, however, depends on the extent to which the ATM
entity’s cooperation may reasonably be imputed to the remainder of the PRC entity, and substantial
evidence of record does not support imputation to that extent. The record does not reveal
“cooperation” of the PRC-wide entity beyond that of the ATM entity; the only other individually
examined company in the review at bar, besides the ATM entity, was Weihai Xiangguang
Mechanical Industrial Co., Ltd., which was presumed to be part of the PRC-entity until it
demonstrated an absence of de jure and de facto control by the PRC government and entitlement to
a separate rate, and because it established that entitlement, its cooperativeness cannot be imputed to
the PRC-wide entity. At best, the record can be construed as only a “review” of the PRC-wide rate,
within the meaning of 19 U.S.C. §1675(a), but not the PRC-wide entity itself, i.e., as and of the
consequence of the ATM entity’s ineligibility for a separate rate, since it does not appear that
Commerce queried information from the remainder of the PRC-wide entity apart from the ATM
entity, to which a response would have been required, and from which “full” cooperation could be
inferred. Hence, the court agrees with the DSMC that more is required from the record than, for
example, the various (but not all) parties’ submissions of requests for administrative review and the
Court No. 13-00078 Page 15
various voluntary submissions of comments in order to support the implication of “full” cooperation
in the context of a review of a country-wide rate that is based in part on information from the
investigation and in part on information obtained during review of an entity that had originally been
deemed eligible for a separate rate until that determination was reversed in consequence of appeal.
In short, whatever else its expressed policy or practice may indicate on the general
subject, to the extent Commerce reexamined (“reviewed”) the PRC-wide rate, it was only, as
Commerce explains, for the purpose of incorporating a “cooperative” part of the PRC-wide entity
as a consequence of Advanced Tech, nothing more. However, the DSMC also argue that the
implication in the Redetermination of a “cooperative” PRC-wide entity including the ATM entity
was expressed without a determination on whether CISRI should also be collapsed as a part of the
ATM entity. Considering the point, the court notes that CISRI was listed in the notice of initiation
of this review, but it does not appear, from the administrative list of record documents, that CISRI
requested either administrative review or “separate rate” consideration, unlike other PRC companies
listed in the notice of initiation. Cf. Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Request for Revocation in Part, 75 Fed. Reg. 81565 (Dec. 28, 2010)
with, e.g., PDocs 1-15. In light of the fact that the ATM entity’s ineligibility for a separate rate
caused Commerce to re-examine the PRC-wide margin and consider “cooperation” in that re-
examination, consideration of CISRI’s “cooperation” (as a part of whichever entity, ATM or PRC)
was not irrelevant, but the DSMC do not elaborate upon the evidence of record that would support
determining non-cooperation, or upon what impact that would have on Commerce’s “review” of the
PRC-wide rate within the meaning of 19 U.S.C. §1675(a), given that at the time in question it was
Court No. 13-00078 Page 16
Commerce’s apparent policy to undertake such a re-examination once it determined that an entity
requesting a separate rate (the ATM entity in this instance) was ineligible for that status.9
In the final analysis of the record at bar, the court is not persuaded that Commerce’s
final results of redetermination and the revised PRC-wide rate, based on a simple average of the
PRC-wide rate from the investigation and the information Commerce had with respect to the ATM
entity, were unreasonable, unsupported by substantial evidence, or otherwise not in accordance with
law. Cf. Yangzhou Bestpak Gifts & Crafts Co., Ltd. v. United States, 716 F.3d 1370, 1378 (Fed. Cir.
2013) (noting that 19 U.S.C. §1673d(c)(5)(B) and the Statement of Administrative Action
accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103 316 (1994), both “explicitly
allow Commerce to factor both de minimis and AFA rates into its calculation methodology” and
there is “no legal error in Commerce’s use of a simple average rather than a weighted average”). The
court can agree that adjustment of a country-wide rate based on a weighted average, for example the
number of entities comprising the PRC-wide entity or U.S. market share, would better account for
cooperative respondents determined ineligible for a separate rate, however judicial review does not
involve displacement of the agency’s reasonable resolution of “fairly conflicting views” on this
record. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
9
The DSMC’s wider argument -- that Commerce’s administrative review practice has not
ordinarily resulted in decreased PRC-wide rates --expresses a valid point, as there may be sound
reasons for treading with caution when it comes to considering a downward adjustment of the PRC-
wide rate, not least of which is to avoid, as they argue, conferring upon previously or potentially
“uncooperative” elements of the PRC-wide entity (as indicated by the status quo of a particular
proceeding including the investigation phase) the benefit of categorically distinct “cooperative”
elements during a particular segment that “do not meet,” in the final analysis, the criteria for a
separate rate, and avoiding the potential for manipulation of the NME-margin. Whether such
concerns can theoretically be mitigated by random respondent selection does not appear to be the
matter before the court, at any rate, and no opinion, therefore, need here be expressed thereon.
Court No. 13-00078 Page 17
Conclusion
In view of the foregoing, Commerce’s results of redetermination will be sustained and
judgment entered accordingly.
/s/ R. Kenton Musgrave
R. Kenton Musgrave, Senior Judge
Dated: September 23, 2015
New York, New York