Polyethylene Retail Carrier Bag Committee v. United States

Slip Op. 06-94
UNITED STATES COURT OF INTERNATIONAL TRADE
__________________________________________
POLYETHYLENE RETAIL CARRIER :
BAG COMMITTEE, et al.,
:
Plaintiffs and
Defendant-Intervenors, :
GLOPACK, INC., et al., :
Plaintiffs and :
Defendant-Intervenors,
:
GUANGDONG ESQUEL TEXTILES CO.,
:
Plaintiff-Intervenor,
:
v. Before: Judge Judith M. Barzilay
: Consol. Ct. No. 04-00319
UNITED STATES,
:
Defendant,
:
HANG LUNG PLASTIC MANUFACTORY, LTD.,:
Defendant-Intervenor, :
:
NANTONG HUASHENG PLASTIC
PRODUCTS CO., :
Defendant-Intervenor. :
__________________________________________
OPINION
[The United States Department of Commerce’s Remand Results are Sustained.]
Decided: June 21, 2006
Consol. Ct. No. 04-00319 Page 2
King & Spalding, (Stephen A. Jones), (Joseph W. Dorn), Jeffrey B. Denning, for the
plaintiffs Polyethylene Retail Carrier Bag Committee, et al.
Garvey Schubert Barer, William E. Perry, Ronald M. Wisla, for the plaintiffs and
defendant-intervenors Glopack, Inc., et al. and Hang Lung Plastic Manufactory Ltd.
DeKieffer & Horgan, Gregory Stephen Menegaz, for the plaintiff-intervenor Guangdong
Esquel Textiles Co.
Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; (Patricia M.
McCarthy), Assistant Director; Civil Division, Commercial Litigation Branch, U.S. Department
of Justice Stefan Shaibani, (Sameer Yerawadekar); Marisa Beth Goldstein, Peter J. Kaldes,
Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of
counsel, for the defendant.
White & Case, LLP, Adams Chi-Peng Lee, Frank H. Morgan, Kelly Alice Slater, Walter
J. Spak, for the defendant-intervenor Nantong Hausheng Plastic Products Co.
BARZILAY, JUDGE: This consolidated case concerns a challenge by the plaintiffs to
the U.S. Department of Commerce’s (“Commerce”) determination in the antidumping
investigation Final Determination of Sales at Less Than Fair Value: Polyethylene Retail Carrier
Bags from the People’s Republic of China, 69 Fed. Reg. 34,125 (June 18, 2004), amended, 69
Fed. Reg. 42,419 (July 15, 2004). The court remanded Commerce’s determination on one issue
concerning the electricity used by one of the companies under review. Commerce has now
issued its remand determination.
THE REMAND RESULTS
The court remanded Commerce’s calculation of electricity usage for Hang Lung Plastic
Manufactury Ltd. (“Hang Lung”), a Chinese manufacturer and exporter to the United States of
polyethylene retail carrier bags (“PRCBs”) and a mandatory respondent in the underlying
investigation, because the court found that Commerce’s explanation of its calculation was
Consol. Ct. No. 04-00319 Page 3
unclear. See Polyethylene Retail Carrier Bag Comm. v. United States, 29 CIT __, Slip Op. 05-
157 at 8-10 (Dec. 13, 2005) (hereinafter “PRCB I”).1 Commerce was instructed to explain its
calculation and reconcile seeming inconsistencies between its Analysis for the Final
Determination of PRCBs from the People’s Republic of China: Hang Lung, June 9, 2004,
(“Final Analysis Memorandum”) and the information contained in Commerce’s September 13,
2005, Motion for Leave to Clarify Commerce’s Electricity Calculation for Hang Lung (“Motion
to Clarify”). On February 13, 2006, Commerce issued its Results of Redetermination on Remand
(“Remand Determination”). Plaintiffs Polyethylene Retail Carrier Bag Committee and its
individual members, Vanguard Plastics, Inc., Hilex Poly Co., LLC, and Superbag Corp.
(collectively “PRCB Committee Plaintiffs”), filed Comments Regarding Commerce’s
Determination on Remand (“Pls.’ Comments”). Commerce then asked that the court allow it to
respond to those comments, and the court granted that request.
In its Remand Determination, Commerce addressed two questions: 1) how it allocated
electricity and 2) the seeming inconsistency between the Final Analysis Memorandum and the
Motion to Clarify. Commerce explained that it chose the total electricity used by Hang Lung in
production of all plastic bags, regardless of destination, as the amount of electricity in kilowatt-
hours (kwh) used during the period of investigation. See Remand Determination at 4.
Commerce then “applied that total electricity to only Hang Lung’s U.S. sales by allocating the
total kwh electricity used over the total extruded resin by the weight and concentrate Hang Lung
used to produce the bags it sold to the United States.” Id. Because it did not know the total
weight of extruded resin and concentrate used in Hang Lung’s U.S. sales, Commerce merged
1
Familiarity with PRCB I is presumed.
Consol. Ct. No. 04-00319 Page 4
Hang Lung’s factors-of-production database with its U.S. sales database. As stated in its Final
Analysis Memorandum, Commerce allocated total printing electricity usage only to printed bags
sold in the United States because only those bags would incur electricity usage for printing. Id. at
5.
Regarding the court’s query that Commerce appeared to have presented two inconsistent
positions between the Motion to Clarify and the Final Analysis Memorandum, Commerce
responded that “[the] Motion to Clarify explains how [it] arrived at the total kwh of electricity to
be allocated . . . rather than the general methodology [it] used to allocate that figure to Hang
Lung’s U.S. sales.” Remand Determination at 6. The Final Analysis Memorandum describes
how Commerce applied the total kwh of electricity to individual U.S. sales using the U.S.
factors-of-production database, which Commerce “created by merging Hang Lung’s U.S. sales
database with its factors of production database.” Remand Determination at 6. Therefore,
Commerce explained, the two positions are not inconsistent.
In their comments on the Remand Determination, PRCB Committee Plaintiffs present
three key arguments: 1) that Commerce’s electricity calculation is not supported by record
evidence; 2) that “even assuming, arguendo, that Commerce’s interpretation is supported by the
record, the electricity calculation is still not adverse to Hang Lung because it simply reallocates
the same amount of electricity that Hang Lung would have allocated had it cooperated with the
investigation”; and 3) that Commerce should not have used Hang Lung’s Verification Exhibit 11
(C.R. 164) as it is unreliable. For these reasons, they desire that the court again remand the case
as not supported by substantial evidence and otherwise contrary to law. Pls.’ Comments at 3, 9.
Consol. Ct. No. 04-00319 Page 5
JURISDICTION AND STANDARD OF REVIEW
This court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(c) (2000). In
accordance with 19 U.S.C. § 1516a(b)(1)(B), the court “must sustain ‘any determination, finding
or conclusion found’ by Commerce unless it is ‘unsupported by substantial evidence on the
record, or otherwise not in accordance with the law.’” Fujitsu Gen. Ltd. v. United States, 88 F.3d
1034, 1038 (Fed. Cir. 1996) (quoting 19 U.S.C. § 1516a(b)(1)(B)). Substantial evidence consists
of “such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.” Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984)
(quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229 (1938)) (quotations omitted).
“[T]he court affirms Commerce’s factual determinations so long as they are reasonable and
supported by the record as a whole, even if there is some evidence that detracts from the agency’s
conclusions.” Olympia Indus., Inc. v. United States, 22 CIT 387, 389, 7 F. Supp. 2d 997, 1000
(1998) (citing Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1563 (Fed. Cir. 1984)). The court
may not re-weigh the evidence or substitute its own judgment for that of the agency. See
Granges Metallverken AB v. United States, 13 CIT 471, 474-75, 716 F. Supp. 17, 21 (1989).
DISCUSSION
When Commerce “determines that it is unable to verify the respondent’s submission, it
may substitute for the information submitted by the respondents, facts otherwise available.”
Chia Far Indus. Factory Co. v. United States, 28 CIT __, __, 343 F. Supp. 2d 1344, 1362 (2004)
(citing 19 U.S.C. § 1677e(a)(2)(A), (D)). The relevant statute provides:
If the administering authority or the Commission (as the case may be) finds that
an interested party has failed to cooperate by not acting to the best of its ability to
comply with a request for information from the administering authority or the
Consol. Ct. No. 04-00319 Page 6
Commission, the administering authority or the Commission (as the case may be),
in reaching the applicable determination under this subtitle, may use an inference
that is adverse to the interests of that party in selecting from among the facts
otherwise available. Such adverse inference may include reliance on information
derived from –
(1) the petition,
(2) a final determination in the investigation under this subtitle,
(3) any previous review under section 1675 of this title or determination under
section 1675b of this title, or
(4) any other information placed on the record.
19 U.S.C. § 1677e(b) (emphasis added). Thus, Commerce is authorized to adopt an adverse
inference when selecting facts otherwise available, see Nippon Steel Corp. v. United States, 337
F.3d 1373, 1383-84 (Fed. Cir. 2003), and it is within Commerce’s discretion to choose which
adverse facts to apply, as long as such facts do not lead to “punitive, aberrational, or
uncorroborated margins.” F.LLI De Cecco Di Filippo Fara S. Martino S.p.A. v. United States,
216 F.3d 1027, 1032 (Fed. Cir. 2000); see Shangahai Taoen Int’l Trading Co. v. United States,
29 CIT __, __, 360 F. Supp. 2d 1339, 1346 (2005).
The parties concur with Commerce’s decision that Hang Lung was uncooperative and that
Commerce may apply partial adverse facts available to determine Hang Lung’s per unit
electricity consumption rates. Following the remand, Plaintiffs claim that Commerce’s
calculation of total electricity consumption for Hang Lung is not supported by substantial
evidence primarily because Commerce relied on the data provided in Hang Lung’s Verification
Exhibit 11 as the basis for its calculation. Pls.’ Comments at 4. They argue that it is unclear
what Exhibit 11 represents and that Commerce’s explanation is based on its interpretation of the
exhibit and not its face value. Specifically, for example, Plaintiffs assert that “[t]he second page
of the exhibit appears to be a worksheet for the data relating to the month of December, but . . .
Consol. Ct. No. 04-00319 Page 7
contains no information indicating that this data relates to the production of all bags.” Pls.’
Comments at 5. In addition, Plaintiffs maintain that Commerce’s explanation, even if consistent
and substantiated by the record, is not adverse and is therefore not in accordance with law. See
Pls.’ Comments at 6. Plaintiffs claim that the electricity amounts provided in Exhibit 11 are the
amounts Hang Lung originally reported. Pls.’ Comments at 6.
1. Commerce’s Methodology
Commerce in this case chose to apply adverse facts available and stated that it allocated
Hang Lung’s total verified electricity usage to Hang Lung’s reported U.S. sales. See Issues and
Decision Mem. for the Investigation of PRCBs from the People’s Republic of China (Dep’t of
Comm. June 9, 2004) at 64. Commerce verifiers considered the worksheets Hang Lung
presented to demonstrate how it attributed electricity usage to each product. Hang Lung’s
Verification Report at 7. The verifiers were able to “tie[] the electricity usage for each
department from the worksheets to meter readings that Hang Lung kept in the ordinary course of
business.” Hang Lung’s Verification Report at 7. “[F]or some printed products, [however], . . .
Hang Lung did not include the printing electricity factor.” Hang Lung’s Verification Report at 8.
Based on these data and other information collected during Hang Lung’s factory tour, the
verifiers found that they “were unable to tie the electricity usage from the consumption charts to
the [factors of production] database.” Hang Lung’s Verification Report at 8. They did, however,
find that the total electricity consumption numbers in Exhibit 11 matched the numbers from
Hang Lung’s worksheets, which do not segregate input consumption by product destination. See
Hang Lung’s Verification Report at 7-8.
Consol. Ct. No. 04-00319 Page 8
After reviewing Commerce’s explanation regarding its calculation of the total electricity
consumed during the period of review and its allocation, the court finds the methodology
employed sufficiently adverse. Plaintiffs’ challenge to Commerce’s specific calculation, while
not entirely amiss, does not overcome the deference this Court grants to Commerce’s
methodology. See, e.g., Olympia Indus., 22 CIT at 389, 7 F. Supp. 2d at 1000.
2. Commerce’s Verification
“Congress has afforded Commerce a degree of latitude in implementing its verification
procedures.” PPG Indus., Inc. v. United States, 15 CIT 615, 620, 781 F. Supp. 781, 787 (1991)
(citing Kerr-McGee Chem. Corp. v. United States, 14 CIT 344, 362, 739 F. Supp. 613, 628
(1990)); see 19 C.F.R. § 351.307(b) (requiring Commerce to verify factual information upon
which the Secretary relies). The selection of a particular verification methodology is within
Commerce’s sound discretion, and if supported by substantial evidence on the record, it will be
sustained by the court. PPG Indus., 15 CIT at 620, 781 F. Supp. at 787 (citing Hercules, Inc. v.
United States, 11 CIT 710, 726, 673 F. Supp. 454, 469 (1987)). In their comments, Plaintiffs
challenge Commerce’s calculation as based on unverified electricity data. They claim that while
Commerce stated that it allocated the total electricity rate used by Hang Lung in production of all
bags, regardless of destination, these data “are not the gross amounts of electricity taken directly
from the meters in each department. Rather, they are net figures derived by Hang Lung by
deducting amounts for electricity usage for factory overhead items such as lighting and fans.”
See Pls.’ Comments at 9. In a related argument, Plaintiffs claim that Commerce’s reliance on the
Consol. Ct. No. 04-00319 Page 9
data provided in Hang Lung’s Verification Exhibit 11 was unfounded. Aside from these claims,
Plaintiffs do not point to any record evidence showing that Commerce verifiers did not consider
and evaluate all available data.
Plaintiffs’ argument that Commerce’s explanation relies solely on its interpretation of the
exhibit and not on information provided on the face of the exhibit itself requires second-guessing
the work of Commerce verifiers under their regulatory mandate. See PPG Indus., 15 CIT at 620,
781 F. Supp. at 787. Otherwise, Plaintiffs present no evidence that Hang Lung’s Verification
Exhibit 11 should be discredited for any reason. Cf. Tung Fong Indus. Co. v. United States, 28
CIT __, __, 318 F. Supp. 2d 1321, 1334-36 (2004) (finding that evidence did not support
Commerce’s finding that manufacturer withheld cost allocation information and concluding that
Commerce verifiers “offered no justification or other explanation for their reliance on already
discredited . . . data as a basis for attempting to discredit other data.”). Without any showing
that the worksheets provided by Hang Lung are somehow inaccurate or otherwise unacceptable,
Plaintiffs fail to show that Commerce’s verification process was not supported by substantial
evidence.
CONCLUSION
Commerce’s remand determination with respect to its calculation of Hang Lung’s
electricity usage is AFFIRMED.
June 21, 2006 /s/ Judith M. Barzilay
_____________________________ ______________________________
New York, NY Judith M. Barzilay, Judge