Advanced Technology & Materials Co. v. United States

Slip Op. 10-59
UNITED STATES COURT OF INTERNATIONAL TRADE
ADVANCED TECHNOLOGY & MATERIALS :
CO., LTD., BEIJING GANG YAN :
DIAMOND PRODUCTS COMPANY, and :
GANG YAN DIAMOND PRODUCTS, INC., :
:
Plaintiffs, :
:
:
v. : Before: R. Kenton Musgrave, Senior Judge
: Court No. 10-00012
UNITED STATES, :
:
Defendant, :
:
and :
:
DIAMOND SAWBLADES :
MANUFACTURERS COALITION, :
:
Defendant-Intervenor. :
:
OPINION AND ORDER
[Plaintiffs’ Motion to Supplement the Administrative Record is denied.]
Dated May 18, 2010
Barnes, Richardson & Colburn (Jeffery S. Neeley) for Plaintiffs.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, and Franklin E. White,
Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice
(Claudia Burke); Office of the Chief Counsel for Import Administration, U.S. Department of
Commerce (Hardeep K. Josan), Of Counsel, for Defendant United States.
Wiley Rein, LLP (Daniel B. Pickard) for Defendant-Intervenor.
Court No. 10-00012 Page 2
Musgrave, Senior Judge: Plaintiffs Advanced Technology & Materials Co. Ltd.,
Beijing Gang Yan Diamond Products Company, and Gang Yan Diamond Products, Inc.
(“Plaintiffs”), move to supplement the administrative record compiled by Defendant International
Trade Administration, United States Department of Commerce (“Commerce” or “the Department”)
in regard to Plaintiffs’ challenge of the Department’s December 27, 2009 decision not to conduct
a changed-circumstances review. The court has jurisdiction over this matter pursuant to 28 U.S.C.
§ 1581(i) (2006). For the reasons set forth below, Plaintiffs’ Motion to Supplement the
Administrative Record will be denied.
Background
On May 22, 2006, the Department issued a determination that imports of diamond
sawblades from the People’s Republic of China are being sold, or likely to be sold, at less-than-fair-
value (“LTFV”). See Final Determination of Sales at Less Than Fair Value and Final Partial
Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from
the People’s Republic of China, 17 Fed. Reg. 29303 (May 22, 2006) (“Final Determination”).
Although delayed by several legal challenges, the Department ultimately issued antidumping duty
orders in accordance with the Final Determination on November 4, 2009. See Diamond Sawblades
and Parts Thereof from the People’s Republic of China and the Republic of Korea: Antidumping
Duty Orders, 74 Fed. Reg. 57145 (Nov. 4, 2009).
Plaintiffs took action to dispute the Final Determination in three ways: (1) by
intervening in the petitioner’s challenge to that determination (Court No. 06-00246); (2) by filing
their own challenge to the Final Determination pursuant to 19 U.S.C. § 1516a(a)(2)(A)(i)(II) (Court
No. 09-00511); and (3) by officially requesting that the Department conduct a review of the Final
Court No. 10-00012 Page 3
Determination based on changed circumstances pursuant to 19 U.S.C. § 1675(b). In their request
for review, Plaintiffs asserted that the Department should recalculate the Final Determination
dumping margins to reflect the Department’s official policy change, announced on December 27,
2006, that it would discontinue the practice of “zeroing” in dumping-margin calculations. See
Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin During an
Antidumping Investigation; Final Modification, 71 Fed. Reg. 77722 (Dec. 27, 2006.) In a letter
dated December 14, 2009, the Department informed Plaintiffs that it would not conduct a changed-
circumstances review, stating that the policy change did not apply to Final Determination because
the diamond sawblades investigation “was not pending before the Department” on the effective date
of the policy change. Changed Circumstances Determination at 2 (internal quotes omitted).
Consequently, Plaintiffs filed the instant action in this Court seeking judicial review
of the Department’s decision not to conduct a review. As per the Court’s Rules, the Department
filed with the Clerk of the Court the administrative record for this action on March 8, 2010. The
record submitted was comprised largely of three documents: (1) Plaintiffs’ November 17, 2009
Changed Circumstances Request; (2) the Changed Circumstances Determination (a two-page letter),
and (3) a letter from the Department rejecting Plaintiffs’ prior (April 27, 2009) request for a changed-
circumstances review of the Final Determination.
Plaintiffs object to the meagerness of the Department’s submission and now move
to supplement the administrative record by admitting all materials contained in the administrative
record of Court No. 06-00246, as well as all information pertaining to the April 27, 2009 request for
a changed circumstances review (which Commerce denied as premature). Pls.’ Mot. at 4. Plaintiffs
argue, inter alia, that these materials should be part of the record because, pursuant to USCIT Rule
Court No. 10-00012 Page 4
73.2(a)(1), “the ‘administrative proceeding’ at issue includes the changed circumstances requests that
resulted from [the] order issued in the original investigation, as well as the earlier changed
circumstances request of Plaintiff[s’] putting Commerce on notice of the zeroing issue prior to the
issuance of the order.” Pls.’ Mot. at 2. Plaintiffs assert that their November 17, 2009 request for
review “did not occur in a vacuum, but [is] part and parcel of the underlying investigation and the
prior changed circumstances request,” and that Commerce cannot “arbitrarily create a narrow record
that ignores the underlying factual record that is the entire basis of the changed circumstances
request.” Id.The Department opposes the motion and asserts that the administrative record as
submitted contains all of the documents required by USCIT Rule 73.3,1 and notes further that
1
Pursuant to statute and the Court’s Rules, the administrative record must contain certain
documents. 28 U.S.C. § 2635 (2006) provides that “in actions in which judicial review is to proceed
upon the basis of the record made before the agency,” the agency must file with the Court:
(A) A copy of the contested determination and the findings or report
on which such determination was based.
(B) A copy of any reported hearings or conferences conducted by the
agency.
(C) Any documents, comments, or other papers filed by the public,
interested parties, or governments with respect to the agency’s action.
The agency must identify and file under seal any document, comment,
or other information obtained on a confidential basis, including a non-
confidential description of the nature of such confidential document,
comment or information.
(4) A certified list of all items specified in paragraphs (1), (2) and (3)
of this subdivision (a).
28 U.S.C. § 2635 (2006). Similarly, USCIT Rule 73.3 provides that “ in All Other Actions Based
Upon the Agency Record” the agency must file with the Court:
(a)(1) A copy of the contested determination and the findings or report upon which such
determination was based.
(continued...)
Court No. 10-00012 Page 5
Plaintiffs’ previous request for a changed circumstances review is already contained in the record.
Def.’s Opp’n. at 3. The Department contends further that its designation of the administrative record
is “entitled to the presumption of administrative regularity,” and that the court must presume the
current record is complete because, in the Department’s view, Plaintiffs have failed to present “clear
evidence to the contrary.” Id.Discussion
Should it reach the merits of this case, the court’s review is governed by the standards
set forth in 5 U.S.C. § 706, which provides that the agency’s decision must be upheld unless
determined to be “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with
law,” and specifies that “[i]n making the foregoing determination,” the court is limited to review
of “the whole record or those parts of it cited by a party . . . .” 5 U.S.C. § 706.
Under section 706, “the whole record” means “the full administrative record that was
before the Secretary at the time he made his decision.” Citizens to Preserve Overton Park, Inc. v.
Volpe, 401 U.S. 402, 420 (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99(1977). Lower courts have further defined “the whole record” as including “everything that was
before the agency pertaining to the merits of its decision,” Portland Audubon Soc. v. Endangered
1
(...continued)
(2) A copy of any reported hearings or conferences conducted by the agency.
(3) Any documents, comments, or other papers filed by the public, interested parties, or
governments with respect to the agency’s action. The agency shall identify and file under seal
any document, comment, or other information obtained on a confidential basis, including a
non-confidential description of the nature of such confidential document, comment or
information.
(4) A certified list of all items specified in paragraphs (1), (2) and (3) of this subdivision (a).
USCIT R. 73.3.
Court No. 10-00012 Page 6
Species Committee, 984 F.2d 1534,1548 (9th Cir. 1993), and “all documents and materials directly
or indirectly considered by agency decision-makers.” Thompson v. United States Dep’t of Labor,
885 F.2d 551, 555 (9th Cir. 1989).
Plaintiffs’ first dispute lies not with what constitutes the “whole record,” but with the
proper definition of “the administrative proceeding” as that term is used in USCIT Rule 73.2.2
Plaintiffs contend that “the administrative proceeding” encompasses far more than the single
decision under challenge, and, at the very least, must also include the original LTFV investigation,
the Final Determination, as well as Plaintiffs’ first changed-circumstances request. Plaintiffs explain
that the changed-circumstances decision currently before the court cannot be viewed in isolation but
is “part and parcel of the underlying investigation and the prior changed circumstances request.”
Pls.’ Mot at 2. This being so, Plaintiffs argue, the record from the underlying investigation and the
resulting determination (found in the record for Court No. 06-00246) as well as all records pertaining
to the prior changed-circumstances request should be included in the administrative record here.
The court finds this argument problematic for several reasons. First, this action is not
governed by Rule 73.2, but Rule 73.3, which contains no reference to “the administrative
proceeding,” but instead refers only to “the agency’s action.” Further, even if Rule 73.3 contained
terminology more amenable to the expansive interpretation Plaintiffs advocate, arguments of this
nature have been soundly rejected by this Court. In Beker Industries Corp., v. United States, the
Court determined that “the administrative proceeding” refers only to “the immediate administrative
2
Rule 73.2, which applies to “Documents in An Action Described in 28 U.S.C. § 1581(c)
or (f),” does not govern this action. This action falls under 28 U.S.C. § 1581(i), which is governed
by Rule 73.3 “Documents in All Other Actions Based Upon the Agency Record.” Cf. USCIT R.
73.2 with R. 73.3.
Court No. 10-00012 Page 7
review in dispute” and nothing more. Beker, 7 CIT 313, 315 (1984). More specifically the court
noted:
The scope of the record for purposes of judicial review is based upon
information which was “before the relevant decision-maker” and was
presented and considered “at the time the decision was rendered.” It
is obvious in this case that the relevant decision-maker was the ITA
(and not the Treasury Department). It is equally clear that plaintiff is
not challenging the original anti-dumping finding, but rather the final
decisions made relating to the administrative review at issue . . . .
Id. Although Beker involved a different Rule and a different statute, the analysis in that case was
based on fundamental principles of administrative law and applies with equal force here. In this
matter, as in Beker, it is clear that the relevant decision-maker was the Department and that Plaintiffs
are not challenging the Final Determination but rather the Department’s decision not to conduct a
changed circumstances review. See Complaint at 1.3 Hence, the administrative record in ths matter
includes only those documents that were “directly or indirectly considered” by the Department’s
decision-makers at the time that decision was rendered. Accordingly, Plaintiffs’ expansive
interpretation of “the agency action” or “the administrative proceeding” must be rejected as contrary
to the Court’s caselaw and unsupported by the language of Rule 73.3. See generally Fund for
Animals v. Williams, 245 F.Supp.2d 49, 57 (D.D.C. 2003) (finding that interpretation of the term
“‘before’ so broadly as to encompass any potentially relevant document existing within the agency
or in the hands of a third party would render judicial review meaningless.”).
3
The core function of the complaint is to “give the defendant fair notice of what the
plaintiff’s claim is and the grounds on which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957).
See DaimlerChrysler Corp. v. United States, 442 F.3d 1313, 1320 (Fed. Cir. 2006) (noting that an
“essential purpose of the [complaint], as the initial pleading, is to put the Government on notice of
what protest decisions are being contested in the Court of International Trade.”).
Court No. 10-00012 Page 8
Plaintiffs next assert that supplementation of the record is necessary: (1) because
Plaintiffs’ arguments cannot be fully reviewed by this Court on the current record, supplementation
is required to prevent frustration of judicial review; (2) in order to obtain background information
necessary for the court to make an informed decision; and (3) “to explain the existing record and
judge the adequacy of the procedures and facts considered.” Pls.’ Mot. at 3-4.
It is “black letter law” that review in federal court must be confined to the agency’s
record; consideration of information outside of the record is deemed appropriate only in “the rare
case.” See Charles H. Koch, Jr., 3 Administrative Law and Practice § 8.27 (2d ed. 2010); Walter O.
Boswell Mem’l Hosp. v. Heckler, 749 F.2d 788, 792 (D.C. Cir. 1984) (holding that “[i]f a court is
to review an agency’s action fairly, it should have before it neither more nor less information than
did the agency when it made its decision”). However, most courts have recognized several “rare
case” exceptions to the record rule, and will allow for consideration of extra-record evidence in
certain compelling, narrowly defined circumstances. These exceptions include situations (1) where
the movant has presented “a strong showing of bad faith or improper behavior by agency decision
makers,” Overton Park, 401 U.S. at 420; (2) where the court, at its discretion, wishes to obtain
background information as an aid to understanding highly technical matters, see Animal Defense
Council v. Hodel, 840 F.2d 1432, 1436 (9th Cir. 1988); or to judge the adequacy of the procedures
and facts considered, see Former Employees of Pittsburgh Logistics Sys., Inc. v. United States Sec’y
of Labor, 27 CIT 339, 343 (2003); and (3) when there is “such failure to explain administrative
action as to frustrate effective judicial review . . . .” Camp v. Pitts, 411 U.S. 138, 142-43 (1973).
The courts will also supplement the record upon a showing that the administrative
record is not complete. As noted by the government, the Department’s designation of the record is
Court No. 10-00012 Page 9
entitled to a presumption of administrative regularity, and the court must presume that all of the
materials considered in the decision-making process have been included. However, if that
presumption is rebutted—by a party’s presentation of “clear evidence” that the materials were
considered by the decision-makers— the materials may be admitted to complete the record. See Bar
MK Ranches v. Yuetter, 994 F.2d 735, 740 (10th Cir. 1993); Ammex, Inc. v. United States, 23 CIT
549, 556, 62 F. Supp.2d 1148, 1153 (1999). Although record supplementation on these grounds is
often viewed as one of the “exceptions” to the record rule described above, it is described more
accurately as “completing” the record because the material sought to be included is only that which
(allegedly) should have been a part of the record to begin with. See Pacific Shores Subdiv. Cal.
Water Dist. v. U.S. Army Corps of Engineers, 448 F. Supp.2d 1, 4 (D.C. Dist. 2006).
Plaintiffs in this matter do not allege that the Department considered the materials
they seek to admit, but instead focus on admission of the documents pursuant to the limited
exceptions for consideration of extra-record evidence. However, these arguments fail. Plaintiffs’
contentions as to the need for “background information” or for information needed to “judge the
adequacy of the procedures and facts considered” are essentially bare allegations with no reference
as to how the Department’s decision is lacking, what “procedures” could be inadequate, or which
particular documents are needed for elucidation. Moreover, judicial review is not “frustrated” by
the court’s inability to fully review Plaintiffs’ arguments: the Department’s Changed Circumstances
Determination is before the court for review, not the Plaintiffs’ arguments. It is that determination,
not Plaintiffs’ arguments, that the court must set aside if found to be “arbitrary, capricious, an abuse
of discretion or otherwise not in accordance with law.”
Court No. 10-00012 Page 10
Finally, the court notes that the record, although sparse, does not appear incomplete
on its face. The text of the decision itself indicates that Commerce rejected Plaintiffs request for
review on the single, purely legal, premise that the original investigation was not “pending” before
the Department on the effective date of the policy change. Arguments that attack the Changed
Circumstances Determination for reasons other than the narrow grounds upon which the decision
rests do not seem likely to assist the court in its merits review of this matter. The court has
considered all other arguments presented by Plaintiffs and considers them to be without merit.
Conclusion
In consideration of the foregoing, the court is unable to conclude that the materials
proffered by Plaintiffs were “before the agency decision-maker” at the time the agency rendered the
decision under review, or that the record may be otherwise supplemented pursuant to any of the
relevant exceptions that allow for the consideration of extra-record evidence. Motion denied.
SO ORDERED.
/s/ R. Kenton Musgrave
R. KENTON MUSGRAVE, Senior Judge
Dated: May 18, 2010
New York, New York