Camau Frozen Seafood Processing Import Export Corp. v. United States , 929 F. Supp. 2d 1352 ( 2013 )

Slip Op. 13 - 95
UNITED STATES COURT OF INTERNATIONAL TRADE
CAMAU FROZEN SEAFOOD PROCESSING
IMPORT EXPORT CORPORATION, et
al.,
Plaintiffs,
v. Before: Donald C. Pogue,
Chief Judge
UNITED STATES,
Consol. Court No. 11-003991
Defendant,
and
AD HOC SHRIMP TRADE ACTION
COMMITTEE and AMERICAN SHRIMP
PROCESSORS ASSOCIATION,
Defendant-Intervenors.
OPINION
[remanding the Final Results of Redetermination Pursuant to
Court Remand for further explanation or reconsideration]
Dated: July 31, 2013
Matthew R. Nicely, Hughes Hubbard & Reed LLP, of
Washington, DC, on behalf of Plaintiffs Camau Frozen Seafood
Processing Import Export Corp.; Minh Phu Seafood Corp.; Minh
Phat Seafood Co., Ltd.; Minh Qui Seafood Co., Ltd.; and Viet I-
Mei Frozen Foods Co., Ltd.
Joshua E. Kurland, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, on behalf of Defendant. With him on the
brief were Stuart F. Delery, Principal Deputy Assistant Attorney
1
This action is consolidated with court no. 11-00383.
Order, Dec. 20, 2011, ECF No. 30.
Consol. Court No. 11-00399 Page 2
General; Jeanne E. Davidson, Director; and Patricia M. McCarthy,
Assistant Director. Of counsel on the briefs was Mykhalo A.
Gryzlov, Senior Attorney, Office of the Chief Counsel for Import
Administration, U.S. Department of Commerce, of Washington, DC.
Andrew W. Kentz, Jordan C. Kahn, Nathaniel M.
Rickard, and Nathan W. Cunningham, Picard Kentz & Rowe LLP, of
Washington, DC, for the Defendant-Intervenor Ad Hoc Shrimp Trade
Action Committee.
Terence P. Stewart, Geert M. De Prest, and Elizabeth
J. Drake, Stewart and Stewart, of Washington, DC, and Edward T.
Hayes, Leake & Andersson, LLP, of New Orleans, LA, for the
Defendant-Intervenor American Shrimp Processors Association.
Pogue, Judge: This case returns to court following
remand by Camau Frozen Seafood Processing Import Export Corp. v.
United States, __ CIT __, 880 F. Supp. 2d 1348 (2012) (“Camau
I”). Camau I reviewed challenges to the final results of the
fifth administrative review (“AR”) of the antidumping duty order
covering certain frozen warmwater shrimp from the Socialist
Republic of Vietnam (“Vietnam”).2 Id. at 1351. Specifically,
Camau I rejected a facial challenge to Commerce’s use, in the
fifth AR, of its New Labor Methodology,3 but remanded the Final
2
Certain Frozen Warmwater Shrimp from the Socialist
Republic of Vietnam, 76 Fed. Reg. 56,158 (Dep’t Commerce Sept.
12, 2011) (final results and final partial rescission of
antidumping duty administrative review) (“Final Results”) and
accompanying Issues & Decision Memorandum, A-552-802, ARP 09–10
(Aug. 31, 2011) (“I & D Mem.”).
3
Antidumping Methodologies in Proceedings Involving Non-
Market Economies: Valuing the Factor of Production: Labor,
76 Fed. Reg. 36,092 (Dep’t Commerce June 21, 2011) (“New Labor
Methodology”).
(footnote continued)
Consol. Court No. 11-00399 Page 3
Results for Commerce to further explain or reconsider its
determination to value labor solely on the basis of data from
the Bangladesh Bureau of Statistics (“BBS”) in light of
Commerce’s prior surrogate labor policy and the apparent
discrepancy between the Bangladeshi labor data and the
Philippine labor data on the record. Id. at 1358–61. In the
Final Results of Redetermination Pursuant to Court Remand,
A-552-802, ARP 09–10 (Apr. 12, 2013), ECF No. 90 (“Remand
Results”), Commerce determined that it would continue to value
labor solely on the basis of the BBS data.
For the reasons that follow, the court will order a
second remand for Commerce to further explain or reconsider its
determination to value labor in this case solely on the basis of
the BBS data.
The court has jurisdiction pursuant to
§ 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended,
19 U.S.C. § 1516a(a)(2)(B)(iii) (2006)4 and 28 U.S.C. § 1581(c)
(2006).
4
All further citations to the Tariff Act of 1930, as
amended, are to Title 19 of the U.S. Code, 2006 edition, unless
otherwise noted.
Consol. Court No. 11-00399 Page 4
STANDARD OF REVIEW
“The court will sustain the Department’s determination
upon remand if it complies with the court’s remand order, is
supported by substantial evidence on the record, and is
otherwise in accordance with law.” Jinan Yipin Corp. v. United
States, __ CIT __, 637 F. Supp. 2d 1183, 1185 (2009) (citing
19 U.S.C. § 1516a(b)(1)(B)(i)).
DISCUSSION5
Prior to adoption of the New Labor Methodology,
Commerce used multi-country averaging to value labor because
“wage data from a single surrogate country does not constitute
the best available information for purposes of valuing the labor
input due to the variability that exists between wages and GNI.
. . . As a result, we find reliance on wage data from a single
surrogate country to be unreliable and arbitrary.”6 When
Commerce adopted the New Labor Methodology, it did not repudiate
5
The facts of this case were summarized in the court’s
prior opinion. Camau I, __ CIT at __, 880 F. Supp. 2d at 1351–
53, 1357–58. Familiarity with Camau I is presumed, and only
those facts necessary to the disposition are reiterated here.
6
Certain Frozen Warmwater Shrimp from the Socialist
Republic of Vietnam, Issues and Decision Mem., A-552-802, ARP
08–09 (July 30, 2010) (adopted in 75 Fed. Reg. 47,771, 47,772
(Dep’t Commerce Aug. 9, 2010) (final results and partial
rescission of antidumping duty administrative review)) (“AR 4
I & D Mem.”), cmt. 9 at 27.
Consol. Court No. 11-00399 Page 5
this reasoning. Rather, Commerce acknowledged in the New Labor
Methodology that “[d]ue to the variability in wage rates among
economically comparable [market economy countries], the
Department has tried to include wage data from as many countries
as possible that were also economically comparable to the [non-
market economy country (“NME”)] and significant producers of
comparable merchandise . . . .” New Labor Methodology, 76 Fed.
Reg. at 36,093; see also Camau I, 880 F. Supp. 2d at 1358–59.
But, based on its experience in light of Dorbest Ltd. v. United
States, 604 F.3d 1363 (Fed. Cir. 2010) (“Dorbest IV”) and
Shandong Rongxin Import & Export Co. v. United States, __ CIT
__, 774 F. Supp. 2d 1307 (2011),7 Commerce concluded that “the
base for an average wage calculation would be so limited that
there would be little, if any, benefit to relying on an average
of wages from multiple countries for purposes of minimizing the
variability that occurs in wages across countries.” New Labor
7
Dorbest IV invalidated the regulation, 19 C.F.R.
§ 351.408(c)(3), that Commerce relied upon to value labor using
a multi-country regression analysis, holding that the regulation
“improperly require[d] using data from both economically
comparable and economically dissimilar countries, and it
improperly use[d] data from both countries that produce
comparable merchandise and countries that do not.” Dorbest IV,
604 F.3d at 1372. Shandong Rongxin, held that Commerce was
including countries in the surrogate labor average that produced
little or no comparable merchandise in contravention of the
statutory requirement that a surrogate country be a significant
producer of comparable merchandise. Shandong Rongxin, __ CIT
at __, 774 F. Supp. 2d at 1316.
Consol. Court No. 11-00399 Page 6
Methodology, 76 Fed. Reg. at 36,093. Camau I held this to be a
reasonable basis for Commerce’s change in policy, 880 F. Supp.
2d at 1358; therefore, the decision to change the labor
valuation policy is not before the court on review of the Remand
Results. Nonetheless, insofar as Commerce maintains that (1)
valuing labor based on a single surrogate country may be
distortive given the variability in wage rates among countries
that Commerce considers to be economically comparable and (2)
the variability in wage rates corresponds to variability in GNI,
the record in this case presents the possibility of just such a
distortion.
As noted in Camau I, Commerce considered two wage rate
values in the Final Results: one from Bangladesh, based on the
BBS data, and one from the Philippines, based on Chapter 5B of
the International Labor Organization Yearbook of Labour
Statistics (“ILO Chapter 5B”). Id. at 1359–60 & n.12. The wage
rate value for the Philippines is several orders of magnitude
larger than the wage rate value for Bangladesh. See Id. at 1360
(comparing GNI and wage rates of the Philippines and
Bangladesh). In light of Commerce’s prior policy and findings,
it comes as no surprise that the Philippine GNI is also several
times larger than the Bangladeshi GNI. Id. On these facts,
Consol. Court No. 11-00399 Page 7
Commerce’s non-repudiated prior reasoning suggests that a single
surrogate country value for labor could introduce distortion.8
While an averaging system that eliminates such distortion may
not be possible, that fact alone is not a reasoned explanation
for Commerce’s choice between the two datasets. Therefore,
Camau I remanded this issue for an explanation of why, in light
of Commerce’s prior reasoning and the record evidence in this
case, valuing labor solely on the basis of the BBS data was
reasonable and the best available information. Id.
Commerce justifies its decision in the Remand Results
by invoking its policy of valuing all surrogate values from a
single surrogate country when possible. Remand Results at 7–8.
Commerce contends that using a single surrogate country to value
all FOPs “better reflects the trade-off between labor costs and
other factors’ costs, including capital, based on their relative
prices.” Id. at 8. This is the only affirmative basis Commerce
offers to support its choice of the Bangladeshi data. Thus,
Commerce argues that its policy of favoring a single surrogate
country to value all FOPs, and the reasoning supporting that
8
The court makes no judgment regarding which dataset is the
best available information. That decision is reserved to
Commerce so long as it supports its determination with a
reasoned explanation. Zhejiang DunAn Hetian Metal Co. v. United
States, 652 F.3d 1333, 1341 (Fed. Cir. 2011).
Consol. Court No. 11-00399 Page 8
policy, is sufficient to value labor solely on the basis of the
BBS data in this case.
This basis alone, however, is not sufficient to
address the remand order in Camau I. Commerce’s policy of
valuing all factors of production from a single surrogate
country when possible, see 19 C.F.R. § 351.408(c)(2) (2011), may
be reasonable because, among other reasons, it reduces surrogate
value distortions introduced by out-of-market prices, see
Clearon Corp. v. United States, Slip Op. 13-22, 2013 WL 646390,
at *6 (CIT Feb. 20, 2013); nonetheless, Commerce has the
statutory authority to use multiple surrogate countries, 19
U.S.C. § 1677b(c)(1), and has invoked that authority when it
deemed such to be appropriate – specifically as part of its
prior labor valuation methodology, see, e.g., Grobest & I-Mei
Indus. (Viet.) Co. v. United States, __ CIT __, 815 F. Supp. 2d
1342, 1356–60 (2012) (affirming Commerce’s decision to use
multi-country averaging for surrogate labor valuation); Peer
Bearing Co.-Changshan v. United States, __ CIT __, 804 F. Supp.
2d 1337, 1353 (2011) (noting Commerce’s use of Indian and Thai
data for different surrogate values in the same review).
Therefore, it is not sufficient for Commerce to cite the policy
of using a single surrogate country where, as here, there is
reason to believe that the primary surrogate country may not
provide the best available information for a particular FOP.
Consol. Court No. 11-00399 Page 9
Case law repeatedly emphasizes that “use of a single
surrogate country is justified when . . . all other factors are
fairly equal . . . .” Clearon Corp., 2013 WL 646390, at *6
(internal quotation marks omitted); Peer Bearing, __ CIT at __,
804 F. Supp. 2d at 1353 (“[T]he preference for use of data from
a single surrogate country could support a choice of data as the
best available information where the other available data ‘upon
a fair comparison, are otherwise seen to be fairly equal . . .
.’”) (quoting Peer Bearing Co.-Changshan v. United States, __
CIT __, 752 F. Supp. 2d 1353, 1373 (2011)) (second alteration in
original). In light of Commerce’s prior reasoning with regard
to labor values, however, the evidence on the record in this
case cannot, without more, be considered fairly equal.9 Thus,
9
Defendant-Intervenor Ad Hoc Shrimp Trade Action Committee
(“AHSTAC”) also argues that the BBS is not fairly equal because
the labor rate drawn from the BBS data, $0.21 USD/hour, is
aberrational. Ad Hoc Shrimp Trade Action Comm.’s Comments on
Final Results of Redetermination Pursuant to Court Remand, ECF
No. 94 (“AHSTAC’s Comments”) at 22–28. AHSTAC’s claim of
aberration is premised on the Bangladeshi labor rate being the
lowest on the record. AHSTAC cites Xinjiamei Furniture
(Zhangzhou) Co. v. United States, Slip Op. 13-30, 2013 WL 920276(CIT Mar. 11, 2013), and Mittal Steel Galati S.A. v. United
States, 31 CIT 1121, 502 F. Supp. 2d 1295 (2007), in support of
its argument that data can be found aberrational by comparison
to other data on the record. AHSTAC’s Comments at 22–25. But
Xinjiamei Furniture and Mittal Steel are distinguishable from
this case. It is true that both cases found aberrational a
surrogate value chosen by Commerce that was significantly
different from other values on the record; however, both cases
also found that the source of the aberrational surrogate value
(footnote continued)
Consol. Court No. 11-00399 Page 10
because there is reason to doubt the primary surrogate country
value, Commerce must address the conflicting evidence on the
record that may counsel against the policy of valuing all FOPs
from the primary surrogate country. Not addressing the
conflicting evidence on the record, as noted in Camau I, fails
the substantial evidence test because it does not take into
account record evidence contrary to Commerce’s determination.
See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
was of such a low volume that its reliability was questionable.
See Xinjiamei Furniture, 2013 WL 920276, at *5 (“[T]he evidence
produced by plaintiff is sufficient to cause any reasonable mind
to seek some explanation as to how such a small sample could be
non-distortive and potentially the best available information.”)
(internal quotation marks omitted); Mittal Steel, 31 CIT at
1135, 502 F. Supp. 2d at 1307–08 (“The court remands this issue
to Commerce for further explanation in light of the data placed
on the record that demonstrates that the limestone value that
Commerce selected was much higher than the value of limestone
imported in other countries and applied to a small volume of
imports.”). In this case, AHSTAC does not offer any basis for
finding the Bangladeshi labor values aberrational beyond the
fact that the Bangladeshi values are the lowest on the record.
Furthermore, unlike Xinjiamei Furniture and Mittal Steel, the
Bangladeshi labor values are not significantly different from
most or all of the other values on the record. Rather, the
prices that AHSTAC offers for comparison form a nearly straight
line continuum from the Bangladeshi data on the low end to the
Philippine ILO Chapter 6A data on the high end. AHSTAC’s
Comments at 22 (comparing the following values: $0.21 (BBS);
$0.41 (Indonesia ILO Chapter 5B); $0.70 (India ILO Chapter 6A);
$0.82 (Guyana ILO Chapter 6A); $1.02 (Nicaragua ILO Chapter 6A);
$1.91 (Philippines ILO Chapter 5B); $2.41 (Philippines ILO
Chapter 6A). On this record, the Bangladeshi data is not
aberrational, it is merely the lowest price in a range of
prices.
Consol. Court No. 11-00399 Page 11
Commerce has not, however, addressed the conflicting
evidence on the record in the Remand Results.10 While “the
possibility of drawing two inconsistent conclusions from the
evidence does not prevent an administrative agency’s finding
from being support by substantial evidence,” Consolo v. Fed.
Maritime Comm’n, 383 U.S. 607, 620 (1966), Commerce must,
nonetheless, provide a reasonable basis for its determination,
see Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351–52
(Fed. Cir. 2006); Amanda Foods (Viet.) Ltd. v. United States, __
CIT __, 647 F. Supp. 2d 1368, 1378–79 (2009). Instead, Commerce
argues that the Bangladeshi data and the Philippine data are
collected at different levels of aggregation; therefore,
Commerce asserts that the two data sets are not comparable and a
disparity in wage rates cannot be deduced from the data. Remand
Results at 8–9. Commerce’s argument is unpersuasive.
First, Commerce provides no explanation for why the
different levels of aggregation render the data incomparable.
10
AHSTAC contends that Commerce also improperly ignored
other available data on the record, including ILO Chapter 6A
data for the Philippines, Guyana, Nicaragua, and India. AHSTAC
Comments at 19–21. The court recognizes that this evidence is
on the record for Commerce’s consideration, but, as in Camau I,
the court makes no determination regarding the role this
evidence would play in an ultimately reasonable determination by
Commerce regarding the surrogate value for labor. Whether this
evidence is useful in reaching a reasonable determination is for
Commerce to decide in the first instance. See Zhejiang DunAn
Hetian, 652 F.3d at 1341.
Consol. Court No. 11-00399 Page 12
Different levels of aggregation alone do not, necessarily,
prevent two datasets from being compared. What is of
consequence is the particular factors that make the datasets
similar enough to compare or too different to compare – for
example, the relative levels of aggregation, the relationship
between the levels of aggregation, and the purpose of the
comparison. In short, Commerce must provide some reason to
justify its determination that the datasets are too different to
compare, see Amanda Foods, __ CIT at __, 647 F. Supp. 2d at1378–79, and level of aggregation is a description not a reason.
Second, Commerce’s treatment of the ILO data in other
circumstances suggests that it may, in fact, be comparable with
the BBS data. It is Commerce’s default policy to use ILO data
when valuing labor.11 Commerce considers data reported at an
International Standard Industrial Classification (“ISIC”) level
representative of the industry in question to be industry
specific. See New Labor Methodology, 76 Fed. Reg. at 36,094 &
nn. 10, 11; Surrogate Values for the Preliminary Results,
A-552-802, APR 09–10 (Feb. 28, 2011), Admin. R. Pt. 1 Pub. Doc.
11
Commerce’s preference, as expressed in the New Labor
Methodology, is to use ILO Chapter 6A data. New Labor
Methodology, 76 Fed. Reg. at 36,093. Prior to the New Labor
Methodology Commerce used ILO Chapter 5B data. Id.; see also
I & D Mem., cmt. 2.I at 22-23.
Consol. Court No. 11-00399 Page 13
144 (“Surrogate Value Mem.”) at 7. Prior to adopting the
standards from the New Labor Methodology in this case, Commerce
determined that ISIC-Revision 3, sub-classification 15,
described as “manufacture of food products and beverages,” was
industry specific because it included “processing and
preservation of fish and fishery products.” Id. The fact that
Commerce considers the ILO data to be industry specific and
would otherwise employ the ILO data but for the particular facts
of this case – i.e., no ILO data for Bangladesh and an
alternative industry-specific dataset – suggests that the ILO
data and the BBS are comparable despite the different levels of
aggregation. That is, the data sets are a least comparable
enough in Commerce’s view for them to be theoretically
interchangeable for the purpose of valuing labor.12
Thus, Commerce’s reasoning in the Remand Results
remains an insufficient explanation, and the court remains
unable to affirm Commerce’s determination in the Final Results.
Commerce’s policy of valuing all surrogate values on the basis
of the primary surrogate country is a reasonable choice insofar
as there is no reason to believe that a value from the primary
12
Arguably, the dataset comparability is more than
theoretical given that Commerce chose to value labor in the
fourth administrative review using ILO Chapter 5B data, AR 4
I & D Mem., cmt. 9 at 30, while using the BBS data in this, the
subsequent, review.
Consol. Court No. 11-00399 Page 14
surrogate country would be distortive or inaccurate. Record
evidence in this case continues to raise such a possibility, and
Commerce has not addressed that evidence in the Remand Results.
Furthermore, Commerce’s attempt to avoid the troubling
disparities between the surrogate values for labor by suggesting
that the datasets are not comparable is unpersuasive. Commerce
provides no justification for its conclusion of incomparability
other than the different levels of aggregation – a distinction
that, absent further explanation, is not a meaningful
difference.
CONCLUSION
In light of the foregoing, the Final Results are again
remanded to Commerce for further explanation or reconsideration
of the surrogate value for labor consistent with this opinion
and Camau I. Commerce shall have until September 30, 2013, to
complete and file its remand redetermination. Plaintiffs and
Defendant-Intervenors shall have until October 15, 2013, to file
comments. Plaintiffs, Defendant, and Defendant-Intervenors
shall have until October 29, 2013, to file any reply.
It is SO ORDERED.
_____/s/ Donald C. Pogue____
Donald C. Pogue, Chief Judge
Dated: July 31, 2013
New York, NY
ERRATA
Camau Frozen Seafood Processing Import Export Corp., et al., v.
United States, Court No. 11-00399, Slip Op. 13-95, dated July
31, 2013.
Page 2: Pogue, Judge should be changed to Pogue, Chief Judge
Page 2: The “footnote continued” message at the bottom of the
page should be removed.
August 1, 2013