Shandong Jinxiang Zhengyang Imp. & Exp. Co. v. United States , 2020 CIT 18 ( 2020 )

Slip Op. 20-
UNITED STATES COURT OF INTERNATIONAL TRADE
SHANDONG JINXIANG ZHENGYANG
IMPORT & EXPORT CO., LTD. AND
JINING SHUNCHANG IMPORT &
EXPORT CO. LTD.,
Plaintiffs,
and
QINGDAO SEA-LINE INTERNATIONAL
TRADING CO., LTD. AND SHENZHEN
BAINONG CO., LTD.,
Before: Mark A. Barnett, Judge
Plaintiff-Intervenors, Court No. 18-00156
v.
UNITED STATES,
Defendant,
and
FRESH GARLIC PRODUCERS
ASSOCIATION, ET AL.,
Defendant-Intervenors.
OPINION
[Denying Plaintiffs’ motion for judgment on the agency record.]
Dated: February 11, 2020
John J. Kenkel, J. Kevin Horgan, Gregory S. Menegaz, and Alexandra H. Salzman,
deKieffer & Horgan, of Washington, DC, for Plaintiffs Shandong Jinxiang Zhengyang
Import & Export Co., Ltd. and Jining Shunchang Import & Export Co. Ltd. With them on
the brief was Judith L. Holdsworth.
Court No. 18-00156 Page 2
Irene H. Chen, Chen Law Group LLC, of Rockville, MD, for Plaintiff-Intervenor Qingdao
Sea-Line International Trading Co., Ltd.
Meen Geu Oh, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for Defendant United States. With him on
the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson,
Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was
Emma T. Hunter, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Michael J. Coursey, John M. Herrmann, and Joshua R. Morey, Kelley Drye & Warren
LLP, of Washington, DC, for Defendant Intervenors Fresh Garlic Producers Association,
Christopher Ranch L.L.C., The Garlic Company, Valley Garlic, and Vessey and Co., Inc.
Barnett, Judge: Plaintiffs Shandong Jinxiang Zhengyang Import & Export Co.,
Ltd. and Jining Shunchang Import & Export Co. Ltd. (together, “Zhengyang”)
commenced this action to challenge certain aspects of the U.S. Department of
Commerce’s (“Commerce” or “the agency”) final results and partial rescission of the
twenty-second administrative review (“AR22”) of the antidumping duty order on fresh
garlic from the People’s Republic of China (“China”). See Summons, ECF No. 1;
Compl. ECF No. 6; Fresh Garlic From the People’s Republic of China, 83 Fed. Reg.
27,949 (Dep’t Commerce June 15, 2018) (final results and partial rescission of the 22nd
antidumping duty admin. review and final result and rescission, in part, of the new
shipper reviews; 2015–2016) (“Final Results”). Qingdao Sea-Line International Trading
Co., Ltd. (“Sea-Line”) and Shenzhen Bainong Co., Ltd. timely intervened as Plaintiff-
Intervenors in this case. Order (July 25, 2018), ECF No. 23; Order (July 31, 2018), ECF
No. 29. 1 Fresh Garlic Producers Association and its individual members (collectively,
1
Shenzhen Bainong Co., Ltd. did not participate further in this case.
Court No. 18-00156 Page 3
“the FGPA”) timely intervened as Defendant-Intervenors. Order (July 13, 2018), ECF
No. 15. Thereafter, the court consolidated this action under lead Court No. 18-00137,
which also addresses a challenge to the Final Results. Order (July 31, 2018), ECF No.
31. Upon subsequent review, however, in accordance with U.S. Court of International
Trade Rule 21 and following consideration of the relevant factors, the court severed this
action from lead Court No. 18-00137. Order (Feb. 10, 2020), ECF No. 32. 2
This matter is now before the court on Zhengyang’s motion for judgment on the
agency record pursuant to USCIT Rule 56.2. 3 Consol. Pls. [Zhengyang’s] Rule 56.2
Mot. For J. Upon the Agency R., ECF No. 32, and Consol. Pls. [Zhengyang’s] Mem. in
Supp. of Mot. For J. (“Zhengyang’s Mem.”), ECF No. 32-1; Reply by Consol. Pls.
[Zhengyang], to the Resps. by the United States and Def.-Ints. in Opp’n to Consol. Pl.’s
Rule 56.2 Mot. For J. Upon the Admin. R. (“Zhengyang’s Reply”), ECF No. 53; see also
Pl.-Int. [Sea-Line’s] Br. in Supp. of Consol. Pls. [Zhengyang] Rule 56.2 Mot. For J.
(“Sea-Line’s Br.”), ECF No. 33; Pl.-Int. [Sea-Line’s] Br. in Supp. of Reply by Consol. Pls.
[Zhengyang], to the Resps. by the United States and Def.-Ints. in Opp’n to Consol. Pl.’s
2
Following consolidation, the parties and the court docketed all relevant filings in the
lead action. Thus, hereinafter, citations to filings in CM/ECF refer to documents filed in
Coalition for Fair Trade in Garlic, et al. v. United States, et al., Court No. 18-cv-00137.
3
The administrative record for this case is divided into a Public Administrative Record
(“PR”), ECF No. 24-4, and a Confidential Administrative Record, ECF Nos. 24-5,
24-6. Parties submitted joint appendices containing record documents cited in their
briefs. See Public J.A. (“PJA”), ECF Nos. 61 (Vol. I), 62 (Vol. II), 63 (Vol. III), 64 (Vol.
IV), 65 (Vol. V); Confidential J.A., ECF No. 66.
Court No. 18-00156 Page 4
Rule 56.2 Mot. For J. Upon the Admin. R., ECF No. 54. 4 Zhengyang contests
Commerce’s (1) rejection of its case brief from the record of the administrative review;
(2) selection of Romania over Mexico as the primary surrogate country for valuing its
factors of production; and (3) selection of Romanian data to value its garlic bulbs.
Zhengyang’s Mem. at 11–47. Defendant United States (“the Government”) and the
FGPA argue, in supplemental briefing, that Zhengyang failed to exhaust its
administrative remedies with respect to its arguments concerning surrogate country and
surrogate value selection and, thus, the court should not reach the merits of those
arguments. Def.’s Suppl. Br. in Resp. to the Court’s Aug. 30, 2019 Request for Further
Briefing from the Parties (“Gov’t’s Suppl. Br.”), ECF No. 91; FGPA’s Suppl. Resp. Br.
(“FGPA’s Suppl. Br.”), ECF No. 94. 5
For the reasons discussed herein, the court finds that Zhengyang failed to
exhaust its administrative remedies with respect to all arguments it seeks to present to
4
Sea-Line adopts Zhengyang’s arguments and does not present additional substantive
arguments. Sea-Line’s Br. at 1. Accordingly, the court does not reference Sea-Line’s
filings.
5
The Government initially urged the court to sustain the Final Results on the merits.
Def.’s Corrected Resp. in Opp’n to Pl.’s, Consol. Pls.’, and Pl.-Ints’ Rule 56.2 Mots. For
J. on the Agency R. (“Gov’t’s Resp.”) at 10–27, ECF No. 74. The FGPA argued that
Zhengyang failed to exhaust its administrative remedies and, alternatively, that the court
should sustain the Final Results on the merits. [FGPA’s] Resp. in Opp’n to Pls.’ Mot.
For J. on the Agency R. at 5–18, ECF No. 47. The court ordered additional briefing on
whether Commerce’s rejection of Zhengyang’s case brief means that Zhengyang failed
to exhaust its administrative remedies with respect to the arguments it has presented to
the court. Order (Aug. 30, 2019), ECF No. 86. Parties timely responded to the Order.
See Def.’s Suppl. Br.; FGPA’s Suppl. Br.; Consol.-Pl. Jingxiang Zhengyang Imp. & Exp.
Co., Ltd.’s Suppl. Br. in Resp. to the Court’s Request for Suppl. Briefing of Aug. 30,
2019 (“Zhengyang’s Suppl. Br.”), ECF No. 95.
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the court. Thus, the court denies Zhengyang’s and Sea-Line’s motions for judgment on
the agency record.
BACKGROUND
In 1994, Commerce issued an order imposing antidumping duties on fresh garlic
from China. See Antidumping Duty Order: Fresh Garlic From the People’s Republic
of China, 59 Fed. Reg. 59,209 (Dep’t Commerce Nov. 16, 1994) (“AD Order”). On
November 4, 2016, Commerce published a notice informing interested parties of the
opportunity to request an administrative review of the AD Order for the period of review
(“POR”) November 1, 2015, through October 31, 2016. Antidumping or Countervailing
Duty Order, Finding, or Suspended Investigation; Opportunity to Request Admin.
Review, 81 Fed. Reg. 76,920 (Dep’t Commerce Nov. 4, 2016), PR 2, PJA Vol. I.
Zhengyang requested to be included in the review. Request for Review (Nov. 9, 2016),
PR 4, PJA Vol. I. Zhengzhou Harmoni Spice Co., Ltd (“Harmoni”), the FGPA, and the
Coalition for Fair Trade in Garlic (“the CFTG”) each requested a review of Harmoni.
See Request for Admin. Review of the Antidumping Duty Order on Fresh Garlic from
the People’s Republic of China (Nov. 7, 2016), PR 1, PJA Vol. I; CFTG’s Request for
22nd Antidumping Admin. Review of Fresh Garlic from the People’s Republic of China
(Nov. 28, 2016), PR 8, PJA Vol. I; Pet’rs’ Requests for Admin. Review (Nov. 30, 2016),
PR 12, PJA Vol. I.
On January 13, 2017, Commerce initiated AR22. See Initiation of Antidumping
and Countervailing Duty Admin. Reviews, 82 Fed. Reg. 4,294, 4,296–97 (Dep’t
Commerce Jan. 13, 2017), PR 22, PJA Vol. I. The review covered 35 exporters and
Court No. 18-00156 Page 6
producers. Selection of Respondents for Individual Examination (Mar. 7, 2017) at 3, PR
82, PJA Vol. I. After finding that it would be impracticable to review every named
exporter or producer, Commerce selected Zhengyang and Harmoni—“the two
exporters/producers with the largest volume of imports during the POR”—as mandatory
respondents in the review. Id. at 4. After Commerce initiated AR22 but before it
published its preliminary results, Harmoni and the FGPA withdrew their requests for a
review of Harmoni. Harmoni Withdrawal of Review Request (Apr. 13, 2017), PR 123,
PJA Vol. I; Pet’rs’ Withdrawal of Certain Requests for Admin. Review (Apr. 13, 2017) at
2, PR 124, PJA Vol. I.
On May 12, 2017, Zhengyang submitted surrogate country and surrogate value
comments for Commerce’s consideration. See Surrogate Country Comments and
Surrogate Values for the Prelim. Results (May 12, 2017) (“Zhengyang’s SC/SV Cmts.”)
at 1–2, PR 173–178, PJA Vols. II–III. As part of its submission, Zhengyang provided
information regarding garlic grown in Mexico. Id. at 2, Ex. SV-6. The information
consisted of two articles in English 6 and several more in Spanish accompanied by
English translations. See id., Ex. SV-6. The translations, at least some of which were
prepared using an online translation generator, suffered from errors that rendered them
substantially illegible. See id., Ex. SV-6 (ECF No. 62 at ECF pp. 587–97, 607–15, 627–
37; ECF No. 63 at ECF pp. 74–113, 145–77, 187–95, 210–27).
6
One of those articles, “Garlic Productivity and Profitability as Affected by Seed Clove
Size, Planting Density and Planting Method,” was included twice. See Zhengyang’s
SC/SV Cmts., Ex. SV-6 (ECF No. 62 at ECF pp. 569, 638).
Court No. 18-00156 Page 7
On June 28, 2017, Commerce aligned concurrent new shipper reviews
associated with the AD Order with AR22. Decision Mem. for the Prelim. Results.,
Prelim. Rescission, and Final Rescission, in Part, of the 2015–2016 Antidumping Duty
Admin. Review and Prelim. Results of the New Shipper Reviews (Nov. 28, 2017)
(“Prelim. Mem.”) at 6 & n.42, PR 315, PJA Vol. IV (citation omitted). 7
Commerce published its preliminary results on December 7, 2017. Fresh Garlic
From the People’s Republic of China, 82 Fed. Reg. 57,718 (Dep’t Commerce Dec. 7,
2017) (prelim. results, prelim. rescission, and final rescission, in part, of the 22nd
antidumping duty admin. review and prelim. results of the new shipper reviews; 2015–
2016) (“Prelim. Results”). Commerce “preliminarily rescind[ed] the review with respect
to seven companies,” including Harmoni. 8 Prelim. Mem. at 7 & n.48. Additionally,
Commerce preliminarily selected Romania as the primary surrogate country. Id. at 32.
Commerce concluded that although Mexico and Romania were both economically
comparable to China and significant producers of comparable merchandise, id. at 24–
28, the quality of the available data favored selecting Romania, id. at 28, 31–32.
Commerce selected data from the National Institute of Statistics of Romania (“NISR”) to
7
Commerce had initiated new shipper reviews in accordance with requests from
Qingdao Joinseafoods Co. Ltd., Join Food Ingredient Inc., and Zhengzhou Yudi
Shengjin Agricultural Trade Co. Ltd. (“Yudi”). Prelim. Mem. at 1, 5.
8
Commerce determined that the CFTG’s review request was invalid ab initio and, thus,
rescinded the review with respect to companies for which another valid review request
was not made or maintained. Prelim. Mem. at 7–13. Commerce’s treatment of the
CFTG’s review request is the subject of the complaint filed in Coalition for Fair Trade in
Garlic, et al. v. United States, et al., Court No. 18-cv-00137. Any reference to that
proceeding or the review of Harmoni is without prejudice to the court’s resolution of the
motion for judgment on the agency record pending in that case.
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value Zhengyang’s garlic bulbs. Id. at 38. Commerce preliminarily calculated a
weighted-average dumping margin for Zhengyang in the amount of 2.69 percent.
Prelim. Results, 82 Fed. Reg. at 57,719.
On April 25, 2018, Zhengyang filed its administrative case brief. Case Br. (Apr.
25, 2018), PR 419, PJA Vol. V. Zhengyang’s case brief contained tables that
Zhengyang claims were excerpted for Commerce’s convenience from earlier filed
articles. Id. at 18–21. Commerce subsequently rejected the case brief on the basis that
it contained “untimely new factual information” that “re-translates and revises
information originally in Spanish and submitted to Commerce on May 12, 2017.”
Request for Removal of Untimely New Factual Information (May 15, 2018) (“1st
Rejection Mem.”), PR 429, PJA Vol. V. Commerce permitted Zhengyang to submit a
revised case brief by May 17, 2018. Id. Commerce directed Zhengyang to resubmit its
case brief “without new factual information” or “modified, re-translated, or reorganized
exhibits/tables with new headings or titles.” Id.
Zhengyang timely submitted a revised case brief that “conformed certain English
translations to those in the original documents on the record,” Revised Case Br. (May
17, 2018) (“Rev. Case Br.”) at cover page, PR 433, PJA Vol. V, but retained modified
and re-translated tables, id. at 19–21. Commerce rejected the revised case brief in its
entirety on the basis that it contained “untimely new factual information” and Commerce
did not allow Zhengyang another opportunity to revise its brief given the impending
deadline for issuance of the final results. Request for Removal of Untimely New Factual
Information (May 21, 2018) (“2nd Rejection Mem.”), PR 435, PJA Vol. V. No other
Court No. 18-00156 Page 9
interested party filed an affirmative case brief on the AR22 record. See Issues and
Decision Mem., A-570-831 (June 8, 2018) (“I&D Mem.”) at 4 n.15, ECF No. 24-3
(declining to consider rebuttal arguments placed on the AR22 record because the AR22
record lacked “affirmative arguments . . . concerning surrogate values”).
Commerce issued its Final Results on June 15, 2018. Commerce affirmed its
preliminary decision to rescind Harmoni’s review and made no changes to Zhengyang’s
margin. Final Results, 83 Fed. Reg. at 27,949–50. Commerce continued to select
Romania as the primary surrogate country and Romanian data as the surrogate value
for the respondents’ garlic bulbs. I&D Mem. at 34, 40–42. Because Commerce had
rejected Zhengyang’s case brief, Commerce analyzed arguments submitted in
affirmative and rebuttal briefs on the record of the new shipper review—not the
administrative review—in connection with its selection of a primary surrogate country
and surrogate values. See id. at 34–42. 9 This appeal followed. See Summons.
9
Yudi, one of the respondents in the new shipper review, challenged Commerce’s
surrogate country and surrogate value selections. I&D Mem. at 34–35, 38–39.
Commerce found that “fresh garlic produced in Romania is more physically similar than
the garlic produced in Mexico, to the subject merchandise, garlic produced in China.”
Id. at 37. Commerce further found that wholesale Romanian NISR data are
representative of the prices paid by Yudi because “Yudi purchases its garlic in the latter
part of the POR” and Yudi’s price includes further processing, such as cold storage or
costs associated with controlled atmosphere facilities. Id. at 41. Commerce rejected
Yudi’s arguments that the Romanian NISR data are tainted by tariff quotas imposed by
the European Union or the smuggling of garlic into Romania. Id. at 42. Although Yudi
commenced an action challenging Commerce’s determination in the new shipper
review, shortly thereafter, Yudi voluntarily dismissed the action. See Zhengzhou Yudi
Shengjin Agricultural Trade Co., Ltd. v. United States, et al., Court No. 18-cv-00158
(USCIT July 25, 2018). The agency record currently before the court pertains solely to
the administrative review. See Decl. of Alexander Cipolla, ECF No. 24-1 (averring that
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JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii)(2012), 10 and 28 U.S.C. § 1581(c).
The court will uphold an agency determination that is supported by substantial evidence
and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
I. Commerce’s Rejection of Zhengyang’s Case Brief is Sustained
Zhengyang challenges Commerce’s rejection of its revised case brief in its
entirety as arbitrary, capricious, and an abuse of discretion. Zhengyang’s Mem. at 45–
47; Zhengyang’s Reply at 4–6. However, Commerce’s determination that Zhengyang’s
revised case brief contained untimely new factual information on pages 19 through 21 is
supported by substantial evidence; thus, Commerce acted within its discretion when it
rejected the case brief.
The burden of creating an adequate record before Commerce lies with interested
parties. QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011).
Compiling an adequate record requires interested parties to submit English translations
of documents written in a foreign language within the timeframe allowed for the
submission of factual information. 19 C.F.R. § 351.301(c)(3)(ii) (setting the deadline for
all documents pertaining to “the administrative review of the antidumping duty order on
fresh garlic from [China]” are contained in the administrative record submitted to the
court) (emphasis added).
10
All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code,
and references to the U.S. Code are to the 2012 edition, unless otherwise stated.
Court No. 18-00156 Page 11
the submission of factual information to value a respondent’s factors of production); id.
§ 351.303(e) (requiring translations). Filing an administrative case brief affords
interested parties an opportunity to present relevant arguments but is not an opportunity
to correct factual information for Commerce’s renewed consideration. See id.
§§ 351.309(c)(2), 351.302(d)(1)(i). Substantial record evidence demonstrates that
Zhengyang failed to provide legible translations of its surrogate value information before
the deadline for submission of factual information and instead attempted to make an
untimely submission of factual information “in the form of modified, re-translated, or
reorganized exhibits and tables” in its revised administrative case brief. 2nd Rejection
Mem. 11
On page 19 of its revised case brief, Zhengyang presented a table of garlic size
specifications. Rev. Case Br. at 19. The table is not contained in Zhengyang’s factual
submissions in the form submitted in the revised case brief; rather, Zhengyang appears
to have placed the English headings originally appended to the translated (but
unformatted) version on the original, formatted Spanish version. Compare id., with
Zhengyang’s SC/SV Cmts., Ex. SV-6 (ECF No. 63 at ECF pp. 205 (Spanish), 221
(English)). Page 20 of the revised case brief contains two tables, the second of which
Zhengyang altered by inserting the English headings in place of the Spanish
11
In accordance with Commerce’s regulation governing the composition of the
administrative record, Commerce retained a copy of the rejected case brief on the
record “for purposes of establishing and documenting the basis for rejecting the
document.” 19 C.F.R. § 351.104(a)(2)(ii)(A).
Court No. 18-00156 Page 12
counterparts. 12 Compare Rev. Case Br. at 20, with Zhengyang’s SC/SV Cmts., Ex. SV-
6 (ECF No. 62 at ECF pp. 580 (Spanish), 591 (English)). Page 21 contains one table
and one bar graph. Rev. Case Br. at 21. Regarding the table, Zhengyang altered the
formatted Spanish version to include English headings and added new English
translations of the Spanish garlic categories for both bulbs and bulbils. Compare id.,
with Zhengyang’s SC/SV Cmts., Ex. SV-6 (ECF No. 62 at ECF pp. 600 (Spanish), 609
(English)). Regarding the bar graph, Zhengyang replaced the Spanish label with an
English label that does not appear in the English version of the source article, which
instead contains an illegible jumble of letters where the label (and bar graph) should be.
Compare Rev. Case Br. at 21, with Zhengyang’s SC/SV Cmts., Ex. SV-6 (ECF No. 62
at ECF pp. 621 (Spanish), 632 (English)).
Zhengyang cites no authority specifically supporting its argument that Commerce
should have excised or otherwise disregarded the offending portions of the revised case
brief and accepted the remaining parts. See Zhengyang’s Mem. at 46 (citing cases
discussing the substantial evidence standard generally). As the Government points out,
Gov’t’s Resp. at 25 n. 12, Commerce provided Zhengyang an opportunity to correct its
first case brief, 1st Rejection Mem., and Zhengyang failed to do so. Accordingly,
Commerce was within its discretion to reject Zhengyang’s revised case brief in its
entirety. See 19 C.F.R. § 351.302(d)(1)(i).
12
Regarding the first table, Zhengyang omitted the title of the table indicating that the
garlic classifications listed therein pertain solely to the “Tacatzcaro” garlic variety and
not Mexican garlic generally. Compare Rev. Case Br. at 20, with Zhengyang’s SC/SV
Cmts., Ex. SV-6 (ECF No. 62 at ECF p. 569).
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II. Zhengyang Failed to Exhaust Its Administrative Remedies
The court next addresses whether Commerce’s rejection of Zhengyang’s case
brief means that Zhengyang failed to exhaust its administrative remedies with respect to
its arguments concerning surrogate country and surrogate value selection, and, if so,
whether any exception applies to excuse this failure.
“[T]he Court of International Trade shall, where appropriate, require
the exhaustion of administrative remedies.” 28 U.S.C. § 2637(d). While exhaustion is
not a jurisdictional requirement, Weishan Hongda Aquatic Food Co. v. United States,
917 F.3d 1353, 1363–64 (Fed. Cir. 2019), the statute “indicates a congressional intent
that, absent a strong contrary reason, the [USCIT] should insist that parties exhaust
their remedies before the pertinent administrative agencies,” id. at 1362 (quoting
Boomerang Tube LLC v. United States, 856 F.3d 908, 912 (Fed. Cir. 2017)) (emphasis
added). Administrative exhaustion generally requires a party to present all arguments in
its administrative case brief before raising those issues before this court. See 19 C.F.R.
§ 351.309(c)–(d); Zhongce Rubber Grp. Co. v. United States, 42 CIT ___, ___, 352 F.
Supp. 3d 1276, 1280 (2018) (finding a failure to exhaust administrative remedies when
the plaintiff did not file an administrative case brief); Home Prods. Int’l, Inc. v. United
States, 36 CIT 33, 36, 810 F. Supp. 2d 1373, 1377 (2012) (same). There are
exceptions to the exhaustion requirement, such as when “the record indicates that—
either as a result of other parties’ arguments or the agency’s decision-making process—
the agency in fact thoroughly considered the issue in question.” Pakfood Public Co. v.
United States, 34 CIT 1122, 1145, 724 F. Supp. 2d 1327, 1351 (2010) (citations
Court No. 18-00156 Page 14
omitted); see also Jacobi Carbons AB v. United States, 42 CIT ___, ___, 313 F. Supp.
3d 1308, 1330–31 (2018).
The Government argues that exhaustion should be required because Commerce
never considered competing arguments concerning surrogate country and surrogate
value selection in light of evidence on the AR22 record. Gov’t’s Suppl. Br. at 6–8.
Instead, the Government contends, Commerce considered competing arguments in
relation to evidence placed on the record of the new shipper review that was, at least in
part, specific to Yudi’s factors of production. Id. at 6. The Government also argues that
permitting Zhengyang to litigate arguments contained in its stricken case brief would
override “Commerce’s enforcement prerogative” and “encourage misconduct.” Id. at 10.
The FGPA argues likewise that Commerce’s selection of surrogate values “is
necessarily company- and segment-specific” and Commerce did not address
Zhengyang’s arguments “in light of the specific factors reported by Zhengyang, or the
company’s specific production process.” FGPA’s Suppl. Br. at 5. Addressing
Zhengyang’s arguments, the FGPA argues, would place the court in the position of
deciding certain issues before Commerce had the opportunity to do so. Id. at 6.
Zhengyang argues that Commerce erred in rejecting its case brief and, thus,
“exhaustion of the remedies is not an issue to be addressed.” Zhengyang’s Suppl. Br.
at 3. 13
13
Zhengyang’s failure to present substantive arguments on this issue means that it has
impliedly waived its right to contest this issue. See, e.g., United States v. Great Am.
Ins. Co. of New York, 738 F.3d 1320, 1328 (Fed. Cir. 2013) (“It is well established that
Court No. 18-00156 Page 15
The court has no trouble concluding that Commerce’s rejection of Zhengyang’s
case brief means that Zhengyang failed to exhaust its administrative remedies with
respect to its arguments concerning surrogate country and surrogate value selection
and is thereby precluded from presenting those arguments to the court. See Zhongce
Rubber, 352 F. Supp. 3d at 1280; Home Prods. Int’l, 36 CIT at 36, 810 F. Supp. 2d at
1377. The doctrine of administrative exhaustion serves the twin purposes of “protecting
administrative agency authority and promoting judicial efficiency.” Corus Staal BV v.
United States, 502 F.3d 1370, 1379 (Fed. Cir. 2007) (quoting McCarthy v. Madigan, 503
U.S. 140, 145 (1992)). Zhengyang’s failure to submit a compliant case brief to
Commerce and obtain an agency decision on the merits of its arguments has left the
court without a decision to review. It is not the court’s role to consider Zhengyang’s
arguments based on AR22 record evidence in the first instance—that is Commerce’s
province. See Boomerang Tube, 856 F.3d at 913 (holding that “an argument [that] was
not exhausted before Commerce [] should not have been considered by the Trade
Court”).
Commerce’s consideration of the issues of surrogate country and surrogate
value selection based on arguments and evidence on the record of the new shipper
review does not excuse Zhengyang’s failure to exhaust its administrative remedies. “An
administrative review and new shipper review are separate and independent segments
of a proceeding,” Weishan Hongda, 917 F.3d at 1361 (citations omitted), with separate
arguments that are not appropriately developed in a party’s briefing may be deemed
waived.”). Nevertheless, the court considers the issue in full.
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administrative records, Cerro Flow Prods., LLC v. United States, Slip Op. 14-84, 2014
WL 3539386, at *6 (CIT July 18, 2014). Simply put, the evidentiary record before the
court is not the record that was considered by Commerce when it rendered its decisions
on surrogate country and surrogate value selection in response to arguments made by
Yudi in the new shipper review. I&D Mem. at 34–42; see also Prelim. Mem. at 21 &
n.128 (noting differences in the factors of production used by Zhengyang as compared
to Yudi). 14 This fact distinguishes this case from others where the court has not
required administrative exhaustion on the basis that Commerce nevertheless
14
Zhengyang argues that the AR22 record is incomplete “because it does not include all
submissions made by [counsel for Zhengyang and Yudi] on behalf of Yudi, including its
surrogate value comments, case brief and revised case brief, etc.” Zhengyang’s Mem.
at 10 (emphasis added). According to Zhengyang, “the administrative record for
[Zhengyang and Yudi] should be combined” so that if the court sustains Commerce’s
rejection of Zhengyang’s case brief, Yudi’s arguments may be “applied to Zhengyang.”
Id. at 47.
“Except in very limited circumstances, this court’s review of Commerce’s
determination is limited to the record before it.” Assoc. of Am. School Paper Suppliers
v. United States, 34 CIT 31, 33, 683 F. Supp. 2d 1317, 1320 (2010) (citing 19 U.S.C.
§ 1516a(b)(2)(A) (describing the contents of the record)); see also 19 U.S.C.
§ 1516a(b)(1)(B)(i) (providing for record review). The rule is intended to prevent courts
from conducting what would amount to a de novo review. Assoc. of Am. School Paper
Suppliers, 34 CIT at 34, 683 F. Supp. 2d at 1321 (citation omitted). Supplementation
may, however, be permitted “when at the time that supplementation of the record is
sought, there is new, changed, or extraordinary information available that was not
available during the investigation,” or “when the party makes a strong showing of bad
faith or improper behavior by agency decision makers.” Id. at 36, 683 F. Supp. 2d at
1322–23 (citations omitted). Zhengyang has not shown (or, for that matter, attempted
to show) that any of the requirements for supplementation have been met. Rather,
Zhengyang’s attempt to supplement the administrative record with documents placed on
the record of the new shipper review “is tantamount to seeking de novo review through
the back door.” Beker Indus. v. United States, 7 CIT 313, 317 (1984) (denying
supplementation of the record with evidence submitted on the record of a separate
administrative review of the same antidumping duty order).
Court No. 18-00156 Page 17
considered an issue and supplied a judicially reviewable determination. Cf., e.g., Jacobi
Carbons AB, 313 F. Supp. 3d at 1330–31 (declining to require exhaustion when the
respondent presented arguments to Commerce regarding the agency’s use of a 2010
financial statement to value financial ratios, Commerce addressed those arguments in
relation to 2010 and 2011 financial statements, and the respondent subsequently
appealed Commerce’s use of the 2011 financial statement to the court).
The only way for the court to sensibly apply its standard of review to the merits of
Zhengyang’s arguments would be to remand the matter to the agency. A remand,
however, would undermine the interest in judicial efficiency that administrative
exhaustion is intended to protect and nullify the court’s conclusion that Commerce was
within its discretion to reject Zhengyang’s case brief. See Corus Staal BV, 502 F.3d at
1379. A remand, therefore, is inappropriate.
In sum, Commerce acted within its discretion when it rejected Zhengyang’s
revised case brief and did not consider it in the Final Results of AR22. Accordingly,
Zhengyang failed to exhaust its administrative remedies with respect to the arguments it
seeks to present to the court and that failure is not excused.
Court No. 18-00156 Page 18
CONCLUSION
For the foregoing reasons, Zhengyang’s motion for judgment on the agency
record is denied. Judgment will enter accordingly.
/s/ Mark A. Barnett
Mark A. Barnett, Judge
Dated: February 11, 2020
New York, New York