Zhaoqing Tifo New Fibre Co. v. United States

Slip Op. 18-
UNITED STATES COURT OF INTERNATIONAL TRADE
ZHAOQING TIFO NEW FIBRE CO., LTD., :
Plaintiff, :
v. :
UNITED STATES, :
Court No. 13-00044
Defendant, :
and :
DAK AMERICAS LLC, :
Defendant-Intervenor. :
[Sustaining Second Remand Results]
Dated: November , 2018
Gregory S. Menegaz, deKieffer & Horgan, PLLC, of Washington, D.C., on the brief.
Mollie L. Finnan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington D.C., on the brief, together with Chad A. Readler, Principal
Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy,
Assistant Director. Of counsel on the brief was Brandon J. Custard, Office of the Chief Counsel
for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Paul C. Rosenthal, Kelley Drye & Warren LLP, of Washington D.C., on the brief, together
with David C. Smith.
OPINION
RIDGWAY, JUDGE:
In this action, Plaintiff Zhaoqing Tifo New Fibre Co., Ltd. (“Zhaoqing Tifo”) – a Chinese
producer and exporter of polyester staple fiber – has contested the Final Determination of the U.S.
Department of Commerce (“Commerce”) in the fourth administrative review of the 2007
Court No. 13-00044 Page 2
antidumping duty order on polyester staple fiber from the People’s Republic of China. 1 See
generally Certain Polyester Staple Fiber From the People’s Republic of China: Final Results of
Antidumping Duty Administrative Review; 2010-2011, 78 Fed. Reg. 2366 (Jan. 11, 2013) (“Final
Determination”) 2; Issues and Decision Memorandum for the Final Results of the 2010-2011
Administrative Review (Jan. 4, 2013) (Pub. Doc. No. 108) (“Issues & Decision Memorandum”) 3;
1
As Zhaoqing Tifo I notes, polyester staple fiber is generally used as stuffing in sleeping
bags, mattresses, ski jackets, comforters, cushions, pillows, and furniture. See Zhaoqing Tifo New
Fibre Co. v. United States, 39 CIT ____, ____, 60 F. Supp. 3d 1328, 1334 (2015) (“Zhaoqing Tifo
I”).
2
Antidumping duty investigations (i.e., “original” investigations) determine in the first
instance whether the elements necessary for the imposition of an antidumping duty exist. The
statute also provides for periodic (typically, annual) administrative reviews of antidumping duty
orders (initiated at the request of an interested party), to update the applicable antidumping duty
rate. See generally Zhaoqing Tifo I, 39 CIT at ____ n.7, 60 F. Supp. 3d at 1334 n.7 (and authorities
cited there). This action contests specific aspects of the results of such an administrative review.
3
Because this action has been remanded to Commerce twice, three administrative records
have been compiled – the initial administrative record (comprised of the information on which the
agency’s Final Determination was based), the supplemental administrative record compiled during
the course of the first remand, and the second supplemental administrative record compiled during
the course of the most recent (second) remand.
Each of the three administrative records includes confidential (i.e., business proprietary)
information. Therefore, two versions of each of the records – a public version and a confidential
version – were filed with the court. The public versions of each of the administrative records
consist of copies of all public documents in the record, as well as public versions of confidential
documents with all confidential information redacted. The confidential versions consist of
complete, un-redacted copies of only those documents that include confidential information. The
numbering of the public versions of documents differs from the numbering of the confidential
versions.
All citations to the administrative records herein are to the public versions, which are cited
as “Pub. Doc. No. ____,” “Supp. Pub. Doc. No. ____,” or “Second Supp. Pub. Doc. No. ____,” as
appropriate.
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Zhaoqing Tifo New Fibre Co. v. United States, 39 CIT ____, 60 F. Supp. 3d 1328 (2015)
(“Zhaoqing Tifo I”); Zhaoqing Tifo New Fibre Co. v. United States, 41 CIT ____, 256 F. Supp.
3d 1314 (2017) (“Zhaoqing Tifo II”).
In the relevant counts of its Complaint, Zhaoqing Tifo charges that the dumping margin
calculated by Commerce in its Final Determination “double counts” certain energy costs. 4 The
Complaint states that those costs are reflected in the surrogate financial ratios that Commerce
derived from the financial statements of P.T. Tifico Fiber Indonesia Tbk (“P.T. Tifico”) (on which
the Final Determination relied) but then are counted again elsewhere in the agency’s calculations
(specifically, in the factors of production database (“FOP database”)). Zhaoqing Tifo contends
that its dumping margin is therefore inflated. See Complaint, Counts I-III; see also, e.g., Zhaoqing
Tifo I, 39 CIT at ____, ____ n.16, 60 F. Supp. 3d at 1333, 1339 n.16. Zhaoqing Tifo does not
contest Commerce’s selection of P.T. Tifico’s financial statements; in fact, that is the result for
4
The Second Remand Results refer repeatedly to “the Court’s concern” about double-
counting. See Second Remand Results at 2-3, 5, 6, 9. However, the issue of double-counting was
not raised sua sponte by the court. Double-counting is the very essence of the claim at issue here,
as set forth in Zhaoqing Tifo’s Complaint. Moreover, as the Second Remand Results
acknowledge, Commerce itself avoids double-counting, as a matter of sound policy. See Second
Remand Results at 6 (referring to “the Department’s . . . concern for double counting of energy
inputs”); see also Final Determination, 78 Fed. Reg. at 2367 (stating that Commerce “did not
separately value electricity and water in the final margin program because [they] are already
captured in the surrogate financial ratios”); Issues & Decision Memorandum at 11 (noting that, “in
order to prevent double counting” of water and electricity expenses, the Final Results “placed all
electricity and water costs into the [manufacturing/factory] overhead numerator” and removed
electricity and water costs from the factors of production database); First Remand Results at 2-3
(noting that proposed use of P.T. Asia’s more detailed financial statements allowed Commerce to
“avoid any potential double counting”); Zhaoqing Tifo I, 39 CIT at ____ n.6, 60 F. Supp. 3d at
1333 n.6 (and authorities cited there) (surveying caselaw and administrative policy establishing
that, as a general rule, double counting is not permitted in antidumping margin calculations);
Zhaoqing Tifo II, 41 CIT at ____ n.8, 256 F. Supp. 3d at 1339 n.8 (similar).
Court No. 13-00044 Page 4
which Zhaoqing Tifo advocated at the administrative level. The gravamen of Zhaoqing Tifo’s
claim is that – to avoid double-counting – energy expenses must be excluded from the FOP
database, because those expenses are already embedded in the financial ratios that Commerce
derived from the financial statements of P.T. Tifico.
Because the Final Determination failed to address Zhaoqing Tifo’s double counting claim,
Zhaoqing Tifo I remanded the matter to Commerce, to permit the agency to analyze whether
energy costs are already reflected in the surrogate financial ratios that the agency derived from the
financial statements of P.T. Tifico, such that the agency’s inclusion of coal in the FOP database
results in double-counting. See Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1361-65.
In the First Remand Results, filed pursuant to Zhaoqing Tifo I, Commerce reopened the
decision that it made in its Final Determination concerning the selection of financial statements,
abandoning its selection of the financial statements of P.T. Tifico. In lieu of the financial
statements of P.T. Tifico, Commerce substituted an entirely different set of financial statements –
the financial statements of P.T. Asia Pacific – because those statements are more detailed and, in
particular, break out energy costs. In the First Remand Results, using P.T. Asia Pacific’s financial
statements, Commerce excluded energy costs from the surrogate financial ratios and included them
in the FOP database, thus accounting for energy costs but avoiding double counting. See generally
Final Results of Redetermination Pursuant to Court Remand at 2, 5-10, 18 (Supp. Pub. Doc. No.
5) (“First Remand Results”).
Zhaoqing Tifo II concluded that, because the broad issue of Commerce’s selection of
financial statements was never appealed to this Court, finality attached to that aspect of
Commerce’s Final Determination, and that the agency therefore lacked the authority to revisit the
Court No. 13-00044 Page 5
issue and to select a different set of financial statements on remand. Thus, as Zhaoqing Tifo II
explained, the First Remand Results not only exceeded the scope of the remand ordered in
Zhaoqing Tifo I, but, in addition and even more fundamentally, the First Remand Results were
beyond the scope of Zhaoqing Tifo’s Complaint and, as such, beyond the scope of this litigation.
See generally Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1326-31.
Now pending are Commerce’s Second Remand Results, in which Commerce has derived
the surrogate financial ratios using the financial statements of P.T. Tifico. Commerce
acknowledges that energy costs are embedded in the surrogate financial ratios derived from those
financial statements. Commerce therefore has excluded the costs of energy (including coal) from
the FOP database, to avoid double-counting energy expenses. See generally Final Results of
Redetermination Pursuant to [Second] Court Remand at 2-3, 6-7, 8-9 (Second Supp. Pub. Doc.
No. 7) (“Second Remand Results”).
Although Commerce has filed the Second Remand Results “under protest,” no party
contests those results. See Second Remand Results at 2-3, 6, 8-9 (noting that Second Remand
Results are filed under protest); Zhaoqing Tifo Comments on Remand Redetermination II Pursuant
to Slip Op. 17-118 (“Pl.’s Brief”); Defendant-Intervenor’s Comments on the Commerce
Department’s Second Remand Determination (“Def.-Int.’s Brief”); Defendant’s Response to
Comments on the Second Remand Results (“Def.’s Brief”).
Jurisdiction lies under 28 U.S.C. § 1581(c) (2006). 5 For the reasons set forth below,
Commerce’s determination in the Second Remand Results must be sustained.
5
All citations to statutes herein are to the 2006 edition of the United States Code. The
pertinent statutory text remained the same at all relevant times.
Court No. 13-00044 Page 6
I. Background
An overview of the relevant statutory scheme, including citations to the statute and other
pertinent authorities, is set forth in Zhaoqing Tifo I. See Zhaoqing Tifo I, 39 CIT at ____, 60 F.
Supp. 3d at 1332-33. That explanation, together with other relevant background information, is
summarized below, for the sake of convenience and completeness.
As Zhaoqing Tifo I explained, in calculating dumping margins for respondents in non-
market economy countries, Commerce generally determines the normal value of the merchandise
at issue based on the value of the factors of production (“FOPs”) that are used to produce that
merchandise in a surrogate market economy country selected by Commerce (“the surrogate
country”). See Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1332 (and authorities cited
there). Under 19 U.S.C. § 1677b(c)(3), the factors of production to be valued “include, but are not
limited to – (A) hours of labor required, (B) quantities of raw materials employed, (C) amounts of
energy and other utilities consumed, and (D) representative capital cost, including depreciation.”
However, valuing the factors of production consumed in producing the merchandise at
issue does not capture certain items such as (1) manufacturing/factory overhead, (2) selling,
general, and administrative expenses (“SG&A”), and (3) profit. Commerce calculates surrogate
values for those items using ratios – known as “surrogate financial ratios” – that the agency derives
from the financial statements of one or more companies that produce identical (or at least
comparable) merchandise in the relevant surrogate market economy country. See Zhaoqing Tifo
I, 39 CIT at ____, 60 F. Supp. 3d at 1333 (and authorities cited there). This surrogate value analysis
Court No. 13-00044 Page 7
is designed to determine a producer’s costs of production as if the producer operated in a
hypothetical market economy. See id., 39 CIT at ____, 60 F. Supp. 3d at 1332-33 (and authorities
cited there).
Zhaoqing Tifo’s claim here is that there are certain energy costs that are embedded in the
surrogate financial ratios that Commerce derived from the financial statements of P.T. Tifico and
then used in the agency’s Final Determination that are also included elsewhere in the agency’s
antidumping calculations (specifically, in the FOP database). 6 Zhaoqing Tifo argues that this
results in the “double counting” of energy costs and inflates Zhaoqing Tifo’s dumping margin. 7
6
As Zhaoqing Tifo I noted, Zhaoqing Tifo consumes coal in its production of polyester
staple fiber. However, it appears that P.T. Tifico and P.T. Asia Pacific use natural gas.
Accordingly, although some of the parties’ papers have referred to the “double counting of coal,”
it is more accurate (depending on the context) to refer to the double counting of “energy inputs”
(or “energy sources” or “energy factors”). See Zhaoqing Tifo I, 39 CIT at ____ n.16, 60 F. Supp.
3d at 1339 n.16 (and authorities cited there).
7
As Zhaoqing Tifo I explained, the case law holds that, as a general rule, double counting
is not permitted in antidumping calculations, because it is distortive, rendering dumping margins
less accurate. See Zhaoqing Tifo I, 39 CIT at ____ n.6, 60 F. Supp. 3d at 1333 n.6 (and authorities
cited there).
Commerce’s administrative determinations are to the same general effect. See Zhaoqing
Tifo I, 39 CIT at ____ n.6, 60 F. Supp. 3d at 1333 n.6 (citing Issues and Decision Memorandum
for the Final Determination in the Antidumping Duty Investigation of Multilayered Wood Flooring
from the People’s Republic of China (Oct. 11, 2011) at 20 (Comment 2) (stating that “[i]t is
[Commerce’s] longstanding practice to avoid double-counting costs where the requisite data are
available to do so” (emphasis omitted) (citation omitted))).
No party contends that it would be permissible in this case for Commerce both to use the
financial ratios derived from P.T. Tifico’s financial statements (in which energy expenses are
embedded) and to also include energy expenses in the FOP database. No party contends that
double-counting the cost of energy inputs in calculating Zhaoqing Tifo’s dumping margin would
be permissible.
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As Zhaoqing Tifo I noted, in Commerce’s Preliminary Determination here, Commerce
selected Indonesia as the surrogate country and, in calculating surrogate financial ratios, relied on
the financial statements of P.T. Asia Pacific, an Indonesian producer of polyester staple fiber.
Commerce based its selection of P.T. Asia Pacific in part on its understanding at that time that P.T.
Asia Pacific “shares the same level of integration as Zhaoqing Tifo.” See Zhaoqing Tifo I, 39 CIT
at ____, 60 F. Supp. 3d at 1336 (quoting Certain Polyester Staple Fiber From the People’s Republic
of China: Preliminary Results of the Antidumping Duty Administrative Review, 77 Fed. Reg.
39,990, 39,991-93, 39,995 (July 6, 2012) (“Preliminary Determination”)).
In general, Commerce prefers to include in the FOP database the cost of energy inputs
consumed in production, when such costs can be identified and excluded from the surrogate
financial ratios derived from the financial statements that the agency selected. See, e.g., Second
Remand Results at 6, 8; Defendant’s Response to Plaintiff’s Rule 56.2 Motion for Judgment Upon
the Agency Record at 18 (and authorities cited there) (summarizing rationale for preference). P.T.
Asia Pacific’s financial statements are relatively detailed and include separate line items for that
company’s energy inputs. In Commerce’s Preliminary Determination, the agency therefore was
able to exclude all energy costs from the surrogate financial ratios that it derived from P.T. Asia
Pacific’s financial statements, and to value all of Zhaoqing Tifo’s energy inputs – coal, electricity,
and water – separately, in the FOP database, with no concerns about double counting. See
Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1336 (and authorities cited there).
In the administrative case brief that it filed with Commerce following the Preliminary
Determination, Zhaoqing Tifo argued that the operations of P.T. Asia Pacific are much more highly
integrated than those of Zhaoqing Tifo, and that it was therefore not appropriate for Commerce to
Court No. 13-00044 Page 9
rely on P.T. Asia Pacific’s financial statements in calculating surrogate financial ratios. Zhaoqing
Tifo characterized itself as more comparable to P.T. Tifico – an Indonesian producer of polyester
fiber which, according to Zhaoqing Tifo, has “less integrated, less complex, production
operations.” As such, Zhaoqing Tifo argued that Commerce should use the financial statements
of P.T. Tifico in the agency’s Final Determination. See generally Zhaoqing Tifo I, 39 CIT at ____,
60 F. Supp. 3d at 1336-37 (and authorities cited there, including, inter alia, Zhaoqing Tifo’s
Administrative Case Brief (Pub. Doc. No. 94)).
The Domestic Producer filed a rebuttal brief responding to Zhaoqing Tifo’s case brief.
There, the Domestic Producer argued that, in calculating surrogate financial ratios, Commerce’s
Final Determination should continue to rely on the financial statements of P.T. Asia Pacific that
Commerce had used in the Preliminary Determination. The Domestic Producer argued that
Zhaoqing Tifo “ha[d] not demonstrated that [the] difference in integration levels actually exists”
and that, in any event, any differences between the levels of integration of Zhaoqing Tifo and P.T.
Asia Pacific are “trivial.” See generally Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1337-
38 (and authorities cited there, including, inter alia, Domestic Producer’s Administrative Rebuttal
Brief (Pub. Doc. No. 101), quoted above).
In addition, the Domestic Producer’s rebuttal brief emphasized that the financial statements
of P.T. Tifico are less “complete and detailed” than those of P.T. Asia Pacific – a consideration
that the Domestic Producer deemed “more critical” than any differences in the levels of integration
of the companies’ operations. In particular, the Domestic Producer expressly and specifically
cautioned Commerce that, because P.T. Tifico’s financial statements “include[] no separate
breakout of [P.T. Tifico’s] energy costs,” Commerce’s use of P.T. Tifico’s financial statements in
Court No. 13-00044 Page 10
the Final Determination would require the agency to “place all potential energy costs into the
[manufacturing/factory] overhead numerator” in the surrogate financial ratios and to “turn off all
company-specific energy and water consumption factors, in order to capture all costs while also
preventing double-counting.” In short, the Domestic Producer told Commerce flatly and
unequivocally that – if Commerce used the financial statements of P.T. Tifico in the Final
Determination to derive surrogate financial ratios – Commerce would have no choice but to
remove coal from the FOP database in order to avoid double counting, because the lack of detail
in P.T. Tifico’s financial statements would make it impossible for the agency to identify and
exclude energy expenses from the surrogate financial ratios. See generally Zhaoqing Tifo I, 39
CIT at ____, 60 F. Supp. 3d at 1338 (and authorities cited there, including the Issues & Decision
Memorandum, and Domestic Producer’s Administrative Rebuttal Brief, quoted above).
In its Final Determination, Commerce reversed course. Rather than relying on P.T. Asia
Pacific’s financial statements (as Commerce had in the Preliminary Determination), Commerce
used the financial statements of P.T. Tifico to derive the surrogate financial ratios. In the words
of the Final Determination, Commerce concluded that P.T. Tifico’s “less integrated and less
complex production operations are more comparable to Zhaoqing Tifo’s than those of P.T. Asia
Pacific.” See generally Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1338 (and authorities
cited there, including the Issues & Decision Memorandum, quoted above).
The Final Determination acknowledged the Domestic Producer’s admonition regarding the
lack of detail in P.T. Tifico’s financial statements, noting that P.T. Tifico’s statements “do[] not
include a separate breakout of [P.T. Tifico’s] costs for electricity and water.” Therefore, “in order
to prevent double counting,” Commerce in its Final Determination “placed all electricity and water
Court No. 13-00044 Page 11
costs into the [manufacturing/factory] overhead numerator” (i.e., included electricity and water in
the surrogate financial ratios) and removed from the FOP database the “electricity and water
consumption factors” that the agency had included in the database for purposes of the Preliminary
Determination. See Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1338-39 (and authorities
cited there, including the Issues & Decision Memorandum, and Domestic Producer’s
Administrative Rebuttal Brief, quoted above).
However, Commerce’s Final Determination inexplicably left coal in the FOP database.
Commerce gave no rationale as to why concerns about double counting – which led the agency to
exclude water and electricity from the FOP database in the Final Determination – did not similarly
compel the exclusion of coal. Nor did Commerce address the Domestic Producer’s statement that
using P.T. Tifico’s financial statements would require Commerce to remove coal from the FOP
database, in order to avoid double-counting. See Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d
at 1339 (and authorities cited there, including the Issues & Decision Memorandum).
Zhaoqing Tifo appealed, alleging, inter alia, that Commerce’s Final Determination double-
counts certain energy expenses. Specifically, Zhaoqing Tifo contends that Commerce’s inclusion
of coal in the FOP database in the Final Determination results in double-counting, and is
unsupported by substantial evidence, contrary to law, and arbitrary and capricious, because energy
costs are already reflected in the surrogate financial ratios that Commerce derived from the
financial statements of P.T. Tifico. See Complaint, Counts I-III.
No party sought judicial review of Commerce’s selection of financial statements (i.e.,
Commerce’s decision to select the financial statements of P.T. Tifico rather than those of P.T. Asia
Pacific) for use in the Final Determination.
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Because Zhaoqing Tifo favored, and successfully advocated for, Commerce’s use of P.T.
Tifico’s financial statements in the Final Determination, Zhaoqing Tifo’s Complaint does not
contest Commerce’s selection of financial statements. Zhaoqing Tifo’s double-counting claim is
much more narrow, much more specific, and much more refined. Taking (accepting) Commerce’s
decision selecting P.T. Tifico’s financial statements in the Final Determination as a given, the
claim in Zhaoqing Tifo’s Complaint is that, if energy expenses cannot be isolated and excluded
from the surrogate financial ratios that Commerce derived from P.T. Tifico’s statements, then coal
expenses must be excluded from the FOP database in order to avoid double counting. See
Complaint, Counts I-III.
The Domestic Producer intervened in the instant action. The Domestic Producer could
have filed its own action, to challenge Commerce’s selection of financial statements in the Final
Determination – i.e., Commerce’s decision to use the financial statements of P.T. Tifico, rather
than those of P.T. Asia Pacific (which the Domestic Producer had consistently favored). As
summarized above, the Domestic Producer had pressed Commerce to use the more detailed
financial statements of P.T. Asia Pacific in the Final Determination. The Domestic Producer had
expressly cautioned Commerce that use of P.T. Tifico’s financial statements would require the
agency to exclude energy expenses (including coal) from the FOP database in order to avoid
double counting, because the agency would find it impossible to isolate and exclude energy
expenses from P.T. Tifico’s statements. Commerce failed to heed the Domestic Producer’s
warnings. Nevertheless, for whatever reason, the Domestic Producer elected not to seek judicial
review of Commerce’s selection of financial statements – i.e., Commerce’s decision to use the
financial statements of P.T. Tifico in the agency’s Final Determination, rather than the more
Court No. 13-00044 Page 13
detailed statements of P.T. Asia Pacific. The Domestic Producer thus waived the issue as
Commerce’s selection of financial statements went unchallenged.
The briefing by the Government and the Domestic Producer that preceded Zhaoqing Tifo
I focused almost exclusively on whether or not Zhaoqing Tifo had exhausted its double-counting
claim at the administrative level. Zhaoqing Tifo I concluded that – for any of a number of different
reasons -- the doctrine of exhaustion of administrative remedies does not bar Zhaoqing Tifo’s
claim. See generally Zhaoqing Tifo I, 39 CIT at ____, 60 F. Supp. 3d at 1343-59.
As to the merits of Zhaoqing Tifo’s claim, Zhaoqing Tifo I found no indication in the Final
Determination that Commerce had considered whether both using surrogate financial ratios
derived from P.T. Tifico’s financial statements and separately valuing coal in the FOP database
resulted in the double-counting of energy costs. See generally Zhaoqing Tifo I, 39 CIT at ____,
60 F. Supp. 3d at 1361-65. Nor does the Final Determination offer any explanation as to why
Commerce there excluded water and electricity from the FOP database to avoid double-counting,
but left coal in the database. Id., 39 CIT at ____, 60 F. Supp. 3d at 1364-65 (stating that “the Issues
and Decision Memorandum . . . give[s] no indication whether Commerce ever considered the
potential for double counting of energy inputs other than electricity and water, much less the
rationale for any determination on that issue. Commerce’s explanation is not merely thin; it is
non-existent.”).
Zhaoqing Tifo I therefore remanded this matter to Commerce, to allow the agency to
determine whether – as Zhaoqing Tifo contends – energy expenses are embedded in the surrogate
financial ratios derived from P.T. Tifico’s financial statements, such that Commerce’s inclusion
of coal in the FOP database results in double counting in the Final Determination, and, in addition,
Court No. 13-00044 Page 14
to allow the agency, if appropriate, to explain the disparity in its treatment of water and electricity
versus coal. Notably, Zhaoqing Tifo I encouraged Commerce to consider reopening the
administrative record on remand, observing that additional information could be placed on the
record to illuminate relevant points concerning P.T. Tifico’s financial statements. Zhaoqing Tifo
I, 39 CIT at ____, 60 F. Supp. 3d at 1365 (emphasis added). Zhaoqing Tifo I’s remand instructions
said nothing about revisiting the already-settled issue of the selection of financial statements. Nor
did those remand instructions refer to the use of any financial statements other than those of P.T.
Tifico.
Notwithstanding the remand instructions in Zhaoqing Tifo I, Commerce’s first remand did
not address Zhaoqing Tifo’s claim, which is confined to the use of P.T. Tifico’s financial
statements, the inclusion of coal in the FOP database, and the alleged resulting double-counting of
energy expenses. Instead, Commerce reopened the broad issue of the selection of financial
statements as a whole – an issue that Commerce had decided in the Final Determination and which
was not challenged by any party in this litigation. Just as Commerce used the financial statements
of P.T. Asia Pacific in its Preliminary Determination, but then used P.T. Tifico’s statements for
the Final Determination, Commerce flip-flopped once again in the First Remand Results. In the
First Remand Results, Commerce reverted back to the financial statements of P.T. Asia Pacific –
the same statements on which the agency had relied in its Preliminary Determination. See First
Remand Results at 2, 9-10.
In effect, the First Remand Results did not reconsider Commerce’s decision in the Final
Determination to leave coal in the FOP database notwithstanding the double-counting that
allegedly resulted from Commerce’s asserted inability to exclude energy expenses from the
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financial ratios that the agency derived from P.T. Tifico’s financial statements. Rather, in the First
Remand Results, Commerce reconsidered a different decision from the Final Determination: i.e.,
Commerce’s decision to select the financial statements of P.T. Tifico for the surrogate financial
ratios over those of P.T. Asia Pacific.
The First Remand Results did not directly address why Commerce on remand did not focus
specifically on P.T. Tifico’s financial statements and related surrogate financial ratios from the
Final Determination, in order to determine whether it is possible to isolate and exclude energy
expenses. Like the Final Determination, the First Remand Results also ignored the disparate
treatment of water and electricity versus coal in the Final Determination, where Commerce relied
on the financial statements of P.T. Tifico and removed water and electricity from the FOP database
for the professed purpose of avoiding double counting, but inexplicably left coal in the database.
Similarly, the First Remand Results gave no indication as to whether Commerce had conducted a
considered analysis of the matter and had concluded that using P.T. Tifico’s financial statements
while including coal in the FOP database in fact results in double-counting.
Reopening the issue of the selection of financial statements, the First Remand Results once
again reviewed the pros and cons of all of the financial statements on the administrative record,
and quickly narrowed the field to the statements of P.T. Tifico and those of P.T. Asia Pacific (much
like Commerce’s Final Determination). See First Remand Results at 5-6. As between those two,
the First Remand Results revisited Commerce’s earlier analysis of the relative levels of integration
of Zhaoqing Tifo (on the one hand) and P.T. Tifico and P.T. Asia Pacific (on the other) – another
decision made by Commerce in the Final Determination that no party challenged in litigation. The
First Remand Results attributed Commerce’s “about-face” – its selection of the financial
Court No. 13-00044 Page 16
statements of P.T. Asia Pacific, rather than those of P.T. Tifico – to an asserted error on the part
of the agency in the Final Determination’s analysis of the broad issue of the selection of financial
statements. See generally id. at 7-9.
According to the First Remand Results, “[u]pon reexamination of both financial
statements,” Commerce found that it had “erred [in the Final Determination] in evaluating the
similarities between Zhaoqing Tifo and P.T. Tifico on one hand, and the dissimilarity between
P.T. Tifico and P.T. Asia Pacific on the other hand in terms of the level of integration.” First
Remand Results at 7. In its Final Determination, Commerce had based its decision to select the
financial statements of P.T. Tifico over those of P.T. Asia Pacific in large measure on Commerce’s
conclusion that P.T. Asia Pacific is significantly more highly integrated than P.T. Tifico. See
Issues & Decision Memorandum at 10-11. However, the First Remand Results stated that
Commerce’s re-review of the record evidence in the course of the remand did not support the Final
Determination’s finding that “there is a meaningful difference in the level of integration between
these two potential surrogate companies [i.e., P.T. Tifico and P.T. Asia Pacific], such that level of
integration would be the deciding factor in determining which statement represents the best
available information.” First Remand Results at 8-9. 8
8
For a summary of Commerce’s analysis of levels of integration in the First Remand
Results, see Zhaoqing Tifo II, 41 CIT at ____ & n.10, 256 F. Supp. 3d at 1323-25 & n.10.
As Zhaoqing Tifo II observed, there can be no suggestion that Commerce was misled as to
the relevant facts in reaching its Final Determination. With respect to the errors that the agency
alleges it made in the Final Determination concerning the relative levels of integration of Zhaoqing
Tifo, P.T. Tifico, and P.T. Asia Pacific, Commerce already had all of the information before it at
the time it reached its Final Determination. No new information was submitted between
Commerce’s issuance of its Final Determination and its issuance of the First Remand Results. If
Commerce did not know the relevant facts at the time of the Final Determination, it could – and
Court No. 13-00044 Page 17
In the First Remand Results, Commerce further decided that, if the choice between the
financial statements of P.T. Tifico and P.T. Asia Pacific was no longer driven by the relative levels
of integration of the three companies, the decisive factor would be the level of detail reflected in
the financial statements. The First Remand Results noted that P.T. Tifico’s financial statements
do not include a separate breakout of the company’s energy expenses, such that – if the agency
were to select P.T. Tifico’s statements for purposes of deriving surrogate financial ratios –
Commerce would be required to exclude coal from the FOP database in order to avoid double-
counting, because energy costs would be embedded in the financial ratios. In the First Remand
Results, Commerce therefore selected P.T. Asia Pacific’s financial statements, which are more
detailed and include line item breakouts for energy expenses (among others). That level of detail
allowed Commerce to exclude energy from the surrogate financial ratios and to instead value it
separately in the FOP database, without double-counting. See generally First Remand Results at
2, 9-10.
Commerce’s use of P.T. Asia Pacific’s financial statements in the First Remand Results
significantly increased Zhaoqing Tifo’s dumping margin. The Final Determination calculated
Zhaoqing Tifo’s dumping margin as 9.98%, using the financial statements of P.T. Tifico to derive
surrogate financial ratios and removing water and electricity from the FOP database (because those
costs were subsumed in the financial ratios), but leaving coal in the database. Zhaoqing Tifo’s
dumping margin jumped to 25.56% in the First Remand Results, where Commerce used the
financial statements of P.T. Asia Pacific, rather than those of P.T. Tifico.
should – have known them. See generally Zhaoqing Tifo II, 41 CIT at ____ n.10, 256 F. Supp. 3d
at 1325 n.10.
Court No. 13-00044 Page 18
Reviewing the First Remand Results, Zhaoqing Tifo II explained that Commerce was not
permitted to use the financial statements of P.T. Asia Pacific, because the agency’s decision to use
P.T. Tifico’s financial statements in the Final Determination became final when no party sought
judicial review of that decision. Zhaoqing Tifo II therefore concluded that the First Remand
Results exceeded the scope of the remand instructions in Zhaoqing Tifo I, and more importantly,
the scope of this litigation. See Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1326-31
(analyzing the First Remand Results in the context of the scope of this litigation, in light of specific
claim set forth in Zhaoqing Tifo’s Complaint); see also id., 41 CIT at ____, 256 F. Supp. 3d at
1331-38 (analyzing the First Remand Results in the context of the scope of the remand instructions
in Zhaoqing Tifo I). This matter was remanded to Commerce for a second time “to permit the
agency to reconsider how the surrogate financial ratios that it derived from P.T. Tifico’s financial
statements account for energy sources and whether the inclusion of coal in the FOP database results
in double-counting.” Id., 41 CIT at ____, 256 F. Supp. 3d at 1338. Again, Commerce was
encouraged to reopen the administrative record to afford the agency and the parties to place
relevant evidence on the record that might help break down P.T. Tifico’s financial statements as
to energy, providing greater detail and at least conceivably permitting Commerce to exclude
energy costs from the surrogate financial ratios derived from P.T. Tifico’s financial statements,
such that energy expenses could be included in the FOP database (as Commerce and the Domestic
Producer urge). Id., 41 CIT at ____, 256 F. Supp. 3d at 1337-38.
In the pending Second Remand Results, which Commerce has filed “under protest,”
Commerce has used the financial statements of P.T. Tifico to derive surrogate financial ratios, as
it did in the Final Determination. However, because the costs of energy (including coal) are
Court No. 13-00044 Page 19
embedded in the surrogate financial ratios, Commerce has excluded those costs from the FOP
database to avoid double-counting. See Second Remand Results at 2-3. Once again, Commerce
elected not to reopen the administrative record. Id., passim. The Second Remand Results revise
Zhaoqing Tifo’s dumping margin to zero. Id. at 9.
II. Standard of Review
In reviewing a remand determination by Commerce in an antidumping duty case, the
agency’s determination must be upheld except to the extent that it is found to be “unsupported by
substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. §
1516a(b)(1)(B)(i); see also Maverick Tube Corp. v. United States, 857 F.3d 1353, 1359 (Fed. Cir.
2017); CS Wind Vietnam Co. v. United States, 832 F.3d 1367, 1376 (Fed. Cir. 2016).
In addition, the remand determination is reviewed for compliance with the court’s remand
order. Yantai Xinke Steel Structure Co. v. United States, 38 CIT ____, ____, 2014 WL 1387529
* 2 (April 9, 2014) (quoting Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT ____,
____, 968 F. Supp. 2d 1255, 1259 (2014) (internal quotation marks omitted)); Since Hardware
(Guangzhou) Co. v. United States, 39 CIT ____, ____, 49 F. Supp. 3d 1268, 1272 (2015) (same);
see also Changzhou Wujin Fine Chemical Factory Co. v. United States, 701 F.3d 1367, 1374-75
(Fed. Cir. 2012) (analyzing on review whether Commerce’s remand results were “within the scope
of the Court of International Trade’s remand order” and sustaining the Court of International
Trade’s conclusion on that point). 9
9
A trial court’s determination as to the scope of its own remand order is entitled to great
deference. See, e.g., Changzhou, 701 F.3d at 1375 (explaining that “an appellant ‘faces a very
high hurdle when it tries to convince us that, despite the remanding Court’s satisfaction, we must
Court No. 13-00044 Page 20
III. Analysis
Commerce has filed its Second Remand Results “under protest,” asserting that the use of
P.T. Tifico’s financial statements to derive surrogate financial ratios (rather than those of P.T. Asia
Pacific) renders Zhaoqing Tifo’s dumping margin “less accurate,” because P.T. Tifico’s statements
are not sufficiently detailed to permit the agency to isolate and exclude energy costs from the
financial ratios. Commerce therefore cannot include energy costs in the FOP database, because
doing so would result in the double-counting of such expenses. See Second Remand Results at 6.
Commerce states that it would “prefer” to derive the financial ratios using the “more complete and
detailed” financial statements of P.T. Asia Pacific, so that energy expenses could be excluded from
the financial ratios and the energy consumed in producing the merchandise at issue could be valued
in the FOP database, without double-counting. Id. at 8; see also id. at 6 (referring to Commerce’s
“preference to value all reported energy inputs in the FOP database”). 10
conclude that the [agency] on remand acted outside the scope of the remand directions’”) (quoting
Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 814 (Fed.
Cir. 1992)).
10
In the Second Remand Results, Commerce states that “the courts have recognized
[Commerce’s] discretion when choosing an appropriate company’s or companies’ financial
statements to calculate . . . surrogate financial ratios.” See Second Remand Results at 6. It is true
that Commerce’s decision concerning the selection of financial statements would be entitled to a
measure of deference if the Domestic Producer had timely challenged in this forum the agency’s
decision in the Final Determination to select the financial statements of P.T. Tifico over those of
P.T. Asia Pacific. However, the Domestic Producer did not do so; and Commerce’s discretion in
the selection of financial statements does nothing to remedy that fact.
Viewed differently, to the extent that this litigation focuses on the ramifications of
Commerce’s decision on the selection of financial statement in its Final Determination, the
litigation is (at least implicitly) acknowledging the discretion that Commerce exercised in selecting
the financial statements of P.T. Tifico.
Court No. 13-00044 Page 21
As explained in Zhaoqing Tifo II, however, and as summarized above and detailed below,
Commerce’s decision in the Final Determination concerning the selection of financial statements
is beyond the scope of this case, as well as the court’s jurisdiction. 11 No party sought judicial
review of Commerce’s decision to select the financial statements of P.T. Tifico as the basis for
surrogate financial ratios. The Domestic Producer could have challenged that decision by
commencing an action in this forum on or before February 11, 2013 – the last day on which the
Domestic Producer could have timely filed a summons. See 19 U.S.C. § 1516a(a)(1) (requiring
that any action challenging a final determination in an antidumping proceeding be commenced by
the filing of a summons within 30 days after Federal Register publication of the determination,
followed by a complaint within 30 days thereafter); USCIT Rule 3(a)(2) (same). But the Domestic
Producer chose not to do so. 12 Accordingly, like all other aspects of the Final Determination that
11
In the Second Remand Results, Commerce twice states that the court ruled that the broad
issue of Commerce’s selection of financial statements is beyond the scope of the remand. See
Second Remand Results at 2, 8. It is true that Zhaoqing Tifo II held that the remand instructions
in Zhaoqing Tifo I did not authorize Commerce to reconsider the decision concerning selection of
financial statements that the agency made in its Final Determination and that Commerce’s actions
in the course of the remand thus exceeded the scope of the remand order. See Zhaoqing Tifo II,
41 CIT at ____, 256 F. Supp. 3d at 1331-37. However, as explained in Zhaoqing Tifo II and
detailed more fully here, the more fundamental point is that the issue of Commerce’s selection of
financial statement is beyond the scope of Zhaoqing Tifo’s Complaint and thus beyond the scope
of this litigation. See Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1326-31; see also infra
sections III.A & III.B.
12
For what it is worth: Zhaoqing Tifo filed its Summons on January 23, 2013 and its
Complaint on January 30, 2013. Thus, the Domestic Producer was on notice of the precise nature
and the relatively narrow scope of Zhaoqing Tifo’s double-counting claim well before the last day
on which the Domestic Producer could have commenced its own action.
Court No. 13-00044 Page 22
were not timely challenged in this forum, Commerce’s decision to use the financial statements of
P.T. Tifico – rather than those of P.T. Asia Pacific – became final.
The sole claim at issue is Zhaoqing Tifo’s double-counting claim, which accepts
Commerce’s decision to use the financial statements of P.T. Tifico, but makes the point that
Commerce’s use of those statements requires the agency to exclude energy costs from the FOP
database, in order to avoid double-counting. Moreover, any assertion that the use of P.T. Asia
Pacific’s financial statements would result in a more accurate dumping margin does not depict the
full picture.
A. The Narrow Scope of This Litigation, As Defined By the Complaint
In effect, the Domestic Producer – and Commerce – are attempting to convert the discrete
“double counting” claim that Zhaoqing Tifo set forth in its Complaint into a more general
challenge to Commerce’s selection of financial statements in its Final Determination. Having
failed to file its own action asserting such a challenge, the Domestic Producer, with the support of
Commerce, now seeks to graft this broader challenge onto Zhaoqing Tifo’s claim. But, regardless
of Commerce’s support, the Domestic Producer cannot use the back door to do what it should have
done through the front door. There is no alchemy that can be used to transform Zhaoqing Tifo’s
double counting claim into the much more sweeping claim that the Domestic Producer belatedly
seeks to litigate.
As Zhaoqing Tifo II explained, the statute (together with relevant agency regulations and
the applicable Rules of the Court) strikes a balance between the significant interests in the accuracy
and completeness of Commerce’s determinations and the competing, equally compelling, need for
Court No. 13-00044 Page 23
finality. See, e.g., Southern Rambler Sales, Inc. v. American Motors Corp., 375 F.2d 932, 938
(5th Cir. 1967) (underscoring importance of finality, observing that “[a]ll things must end – even
litigation”); see generally Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1326-28.
In the interests of finality, Commerce’s final determination in any antidumping proceeding
is essentially immune to attack, except to the extent that a party commences a timely challenge of
that final determination in this Court – and, even then, only to the extent of those specific issues
that are raised in the complaint. In other words, finality attaches to all aspects of a final
determination except those that are challenged in a timely-filed complaint. Zhaoqing Tifo II, 41
CIT at ____, 256 F. Supp. 3d at 1327 (and authorities cited there).
A party that does not file its own complaint may be permitted to intervene in a case, to
participate in the briefing and argument on the issues that are raised in the plaintiff’s complaint.
See generally 28 U.S.C. § 2631(j)(1)(B) (specifying requirements applicable to motions to
intervene in antidumping cases); USCIT Rule 24(a) (setting forth timing and other requirements
applicable to motions to intervene in antidumping cases). But an intervenor is not permitted to
raise its own challenges to the final determination at issue. The scope of any litigation is confined
to the issues raised in a properly-filed complaint. An intervenor must take a case as it lies. See,
e.g., Vinson v. Washington Gas Light Co., 321 U.S. 489, 498 (1944) (explaining that an
intervening party “is admitted to a proceeding as it stands, and in respect of the pending issues, but
is not permitted to enlarge those issues”) 13; see generally Zhaoqing Tifo II, 41 CIT at ____, 256
F. Supp. 3d at 1327.
13
In Illinois Bell, for example, a trade association was seeking to obtain judicial review of
one specific aspect of FCC order, but “[r]ather than petitioning for [judicial] review of that aspect
Court No. 13-00044 Page 24
of the [FCC’s] order, . . . [the trade association] sought to intervene in [the pending court case],
which was initiated by the [plaintiff] carriers in order to review other parts of the [FCC’s]
decision.” Illinois Bell Telephone Co. v. FCC, 911 F.2d 776, 785-86 (D.C. Cir. 1990) (emphasis
added). As the U.S. Court of Appeals for the D.C. Circuit explained, there (as here), “[t]he issue
[the intervenor] tries to serve [the court] is . . . out of bounds.” Id. Quoting Vinson v. Washington
Gas Light Co., the D.C. Circuit elaborated: “An intervening party may join issue only on a matter
that has been brought before the court by another party. . . . Otherwise, the time limitations for
filing a petition for [judicial] review . . . could easily be circumvented through the device of
intervention.” Id. (emphases added). There is even greater cause for concern in a case such as
this, where the effect of expanding the issues in litigation to include Commerce’s selection of
financial statements would be not only to evade “the time limitations for filing a petition for
[judicial] review,” but – in addition – to circumvent the strict statutory time limits governing
Commerce’s completion of an administrative review.
See generally Chandler & Price Co. v. Brandtjen & Kluge, Inc., 296 U.S. 53, 59 (1935)
(holding that the “purpose for which permission to intervene may be given is that the applicant
may be put in position to assert in that suit a right of his in respect of something in dispute between
the original parties”); Lamprecht v. FCC, 958 F.2d 382, 389 (D.C. Cir. 1992) (stating general rule
that intervenors “may only join issue on a matter that has been brought before the court by another
party,” and rejecting intervenor’s attempt to inject new issues into litigation, emphasizing that
“despite having had every incentive to raise its arguments in the proper fashion, [intervenor] not
only failed to do so [i.e., by failing to seek judicial review of the agency’s action in its own right],
but fails now to proffer an excuse”); Edison Elec. Institute v. EPA, 391 F.3d 1267, 1274 (D.C. Cir.
2004) (quoting Illinois Bell for the proposition that “‘[a]n intervening party may join issue only
on a matter that has been brought before the court by another party’”); see also, e.g., Laizhou Auto
Brake Equip. Co. v. United States, 31 CIT 212, 212-15, 477 F. Supp. 2d 1298, 1299-1301 (2007)
(quoting Vinson, emphasizing that “an intervening party is admitted to a ‘proceeding as it stands,
and in respect of the pending issues, but is not permitted to enlarge those issues’”); Habas Sinai ve
Tibbi Gazlar Istihsal Endustrisi A.S. v. United States, 30 CIT 542, 548, 425 F. Supp. 2d 1374,
1380 (2006) (noting that it is “clear beyond cavil” that intervenors “must take a case as they find
it”); Siam Food Prods. Public Co. v. United States, 22 CIT 826, 830, 24 F. Supp. 2d 276, 280
(1998) (concluding that movants there were “time barred from bringing their own case and thus
even as intervenors . . . [could] not bring their own challenges to [Commerce’s] determination”)
(citation omitted); Torrington Co. v. United States, 14 CIT 56, 56-59, 731 F. Supp. 1073, 1073-76
(1990) (rejecting intervenors’ attempt to inject into litigation new claims that were “clearly beyond
the scope of the original litigation” between the plaintiff and Commerce, noting that intervenors
could have filed their own independent action raising their claims within the statutory time
limitations but failed to do so, and underscoring that “an intervenor cannot circumvent the explicit
statutory time limitations for contesting an antidumping duty determination by simply interjecting
a claim when the time for commencing an action has expired”).
Court No. 13-00044 Page 25
Further, as Zhaoqing Tifo II explained, Commerce is not permitted to attack its own final
determination; nor is a court permitted to sua sponte interject issues into litigation. Issues that are
not the subject of a timely-filed complaint cannot, as a general rule, be entertained by the court.
See generally Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1327-28; see also, e.g.,
Georgetown Steel Corp. v. United States, 801 F.2d 1308, 1309-10, 1311-13 (Fed. Cir. 1986)
(holding that Court of International Trade lacked jurisdiction over action where party failed to file
timely appeal); Laizhou Auto Brake Equip. Co. v. United States, 31 CIT 212, 214 n.4, 477 F. Supp.
2d 1298, 1301 n.4 (2007) (observing that “[i]t is well settled that an ‘intervening party may not be
permitted to contest an antidumping order in contravention of the [statutory] time limitations . . .
and the jurisdiction of the court’”) (quoting Torrington Co. v. United States, 14 CIT 56, 58, 731 F.
Supp. 1073, 1076 (1990)). As such, “finality” trumps “accuracy/completeness,” and the complaint
defines and delimits the scope of litigation and the jurisdiction of the court. See generally
Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1327-28; see generally, e.g., Civil
Aeronautics Board v. Delta Air Lines, Inc., 367 U.S. 316, 321-22 & n.5 (1961) (explaining that
“[w]henever a question concerning administrative, or judicial, reconsideration arises, two
opposing policies demand recognition: the desirability of finality, on the one hand, and the public
interest in reaching what, ultimately, appears to be the right result on the other,” and noting that
“[s]ince these policies are in tension, it is necessary to reach a compromise”); Federated
Department Stores, Inc. v. Moitie, 452 U.S. 394, 401 (1981) (stating that, in the interests of finality,
“[p]ublic policy dictates that there be an end of litigation; that those who have contested an issue
shall be bound by the result of that contest, and that matters once tried shall be considered forever
settled as between the parties”); Alloy Piping Prods., Inc. v. Kanzen Tetsu Sdn Bhd., 334 F.3d
Court No. 13-00044 Page 26
1284, 1292 (Fed. Cir. 2003) (recognizing the “strong interest in the finality of Commerce’s
decisions”); NTN Bearing Corp. v. United States, 74 F.3d 1204, 1208 (Fed. Cir. 1995)
(acknowledging, on appeal in an antidumping duty case, that “[i]n some instances, a tension may
arise between finality and [a] correct result”). 14
As Zhaoqing Tifo II emphasized, Zhaoqing Tifo’s timely-filed Complaint circumscribes
the scope of this action 15; and that Complaint does not include a challenge to Commerce’s selection
of financial statements. See, e.g., United States v. Gosselin World Wide Moving, 741 F.3d 390,
405-06 (4th Cir. 2013) (explaining that “[t]he primacy of the complaining party [in defining the
scope of an action] is reflected in the legal vernacular,” in that “[w]e often speak of the civil
plaintiff being the ‘master of his complaint’”; characterizing plaintiff’s discretion there as
“virtually unbounded”) 16; see generally Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1328.
14
See also, e.g., Comfort v. Lynn School Committee, 560 F.3d 22, 26 (1st Cir. 2009)
(observing that, in the interests of finality, “a case cannot be re-opened simply because some new
development makes it appear, in retrospect, that a judgment on the merits long since settled was
brought about by judicial error”); Oakes v. United States, 400 F.3d 92, 97 (1st Cir. 2005)
(characterizing finality as an “institutional value[] that transcends the litigants’ parochial
interests”).
15
Zhaoqing Tifo’s Complaint consists of a total of 10 specific counts. However, as
indicated above, none of those counts contests Commerce’s decision to derive the surrogate
financial ratios using the financial statements of P.T. Tifico (rather than those of P.T. Asia Pacific)
in the agency’s Final Determination. Quite to the contrary, the relevant counts of Zhaoqing Tifo’s
Complaint specifically rely on Commerce’s selection of P.T. Tifico’s financial statements, but
allege that – because energy expenses are already embedded in the financial ratios derived from
those statements – Commerce must exclude energy expenses from the FOP database. See
Zhaoqing Tifo II, 41 CIT at ____ n.15, 256 F. Supp. 3d at 1328 n.15 (summarizing the subjects
and the status of each of the 10 counts of Zhaoqing Tifo’s Complaint).
16
See also, e.g., Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826,
831 (2002) (quoting Caterpillar, noting that “the plaintiff is ‘mater of the complaint’”); Caterpillar
Inc. v. Williams, 482 U.S. 386, 394-95 (1987) (noting that, although plaintiff ex-employees could
Court No. 13-00044 Page 27
The issue of the selection of financial statements is thus beyond the scope of this litigation.
Significantly, no party contends that Zhaoqing Tifo’s Complaint includes a claim challenging
Commerce’s selection of financial statements – i.e., Commerce’s decision to rely on the financial
statements of P.T. Tifico for purposes of the agency’s Final Determination. Certainly Zhaoqing
Tifo has not sought to amend its Complaint to add such a claim; nor would it be in its interests to
do so. The Domestic Producer could have – and apparently should have – preserved its rights by
timely filing its own complaint, so as to challenge Commerce’s selection of P.T. Tifico’s financial
statements over those of P.T. Asia Pacific. 17 But it is far too late for the Domestic Producer to do
have brought claims under collective bargaining agreements, “[a]s masters of the complaint, . . .
they chose not to do so,” and, instead sought relief only under their individual employment
contracts) (emphasis added); id., 482 U.S. at 392, 398-99 (referring to well-established rule that
“the plaintiff is the master of the complaint”); Horne v. Potter, 392 F. App’x 800, 804 (11th Cir.
2010) (per curiam) (observing that “‘[t]he plaintiff is the master of the complaint’ and ‘[t]he
plaintiff selects the claims that will be alleged in the complaint’”) (quoting Danley v. Allen, 540
F.3d 1298, 1306 (11th Cir. 2008)) (emphasis added); Wells v. City of Alexandria, 178 F. App’x
430, 433 & n.4 (5th Cir. 2006) (per curiam) (noting that, in determining scope of litigation, “[t]he
allegations in [plaintiff’s] complaint control,” relying on Podell v. Citicorp Diners Club, Inc., 914
F. Supp. 1025, 1028 n.1 (S.D.N.Y. 1996), aff’d, 112 F.3d 98, 100 n.2 (2d Cir. 1997), for
proposition that “the complaint ‘frames and limits the issues’”); BP Chemicals Ltd. v. Jiangsu
Sopo Corp., 285 F.3d 677, 683-84 (8th Cir. 2002) (acknowledging that “[plaintiff] might have
chosen to pursue theft-type claims against [defendant], but [plaintiff] elected not to do so and that
strategic, legal choice is well within [plaintiff’s] discretion as the master of plaintiff’s complaint”)
(emphasis added); Boxer X v. Harris, 459 F.3d 1114, 1120 (11th Cir. 2006) (Barkett, J., dissenting
from denial of rehearing en banc) (emphasizing that “[i]n our federal system of civil justice, the
plaintiff is the ‘master of the complaint,’ see Holmes Group, Inc. v. Vornado Air Circulation Sys.,
Inc., 535 U.S. 826, 831 (2002), and, under the law [the plaintiff] is entitled to decide which and
how many claims he will assert”) (emphasis added).
17
See, e.g., Torrington Co. v. United States, 14 CIT 56, 58, 731 F. Supp. 1073, 1075 (1990)
(rejecting intervenors’ attempts to raise new issue in litigation, noting that “[s]ince Commerce
resolved [the] issue [that intervenors sought to raise] in its favor, [plaintiff] naturally did not contest
[the issue] in the instant action. [Intervenors], however, [were] not precluded from challenging
that aspect of [Commerce’s] determination independently,” in a timely fashion in accordance with
the statute).
Court No. 13-00044 Page 28
The issue of the selection of financial statements – and the respective pros and cons of the
financial statements of P.T. Tifico and P.T. Asia Pacific – was hotly contested by the parties before
Commerce’s Final Determination issued. In fact, as noted above, in arguing that Commerce should
use P.T. Asia Pacific’s financial statements, the Domestic Producer specifically warned Commerce
that the agency’s selection of the statements of P.T. Tifico would preclude the agency from
including coal in the FOP database, due to the need to avoid double-counting. Having thus
exhausted the issue at the administrative level, the Domestic Producer was perfectly positioned to
challenge Commerce’s selection of financial statements in court.
Plaintiffs routinely seek judicial review of Commerce’s selection of one set of financial
statements over another, just as the Domestic Producer could have done here. See, e.g., Jiaxing
Brother Fastener Co. v. United States, 822 F.3d 1289, 1300-01 (Fed. Cir. 2016) (affirming Court
of International Trade decision on plaintiff’s claim that Commerce erred in considering a particular
financial statement); QVD Food Co. v. United States, 658 F.3d 1318, 1322-26 (Fed. Cir. 2011)
(affirming Court of International Trade decision on plaintiff’s claim that Commerce erred in
relying on a particular financial statement); Ad Hoc Shrimp Trade Action Committee v. United
States, 618 F.3d 1316, 1320, 1321, 1322-23 (Fed. Cir. 2010) (affirming “Commerce’s decision to
exclude [the] financial statements [of a non-profitable company] in calculating the surrogate
financial ratios, in favor of using financial statements from the two profitable surrogate
companies”); Dorbest Ltd. v. United States, 604 F.3d 1363, 1369-70, 1373-75 (Fed. Cir. 2010)
(reversing Court of International Trade ruling on Commerce’s selection of financial statements).
However, such claims are fundamentally different from the claim that Zhaoqing Tifo presses,
which plainly does not challenge Commerce’s selection of financial statements – i.e., Commerce’s
decision to select the financial statements of P.T. Tifico rather than those of P.T. Asia Pacific.
Zhaoqing Tifo is quite content with that decision.
Moreover, as explained in Zhaoqing Tifo II, there is no substance to the notion that the
issue of the relative merits of the financial statements of P.T. Tifico and P.T. Asia Pacific (i.e., the
issue that the Domestic Producer and Commerce seek to raise) is inextricably intertwined with the
specific, narrow issue raised in Zhaoqing Tifo’s Complaint – i.e., the extent to which there are
energy costs that are already embedded in P.T. Tifico’s financial statements (and thus reflected in
Commerce’s surrogate financial ratios), such that Commerce’s inclusion of coal in the FOP
database results in double-counting. Although it is true that the issue that Zhaoqing Tifo has raised
is related to the issue of Commerce’s selection of financial statements, the two issues are entirely
discrete. There is – as a matter of logic – no need for Commerce to reassess the relative merits of
the financial statements of P.T. Tifico and P.T. Asia Pacific in order to address the issue that
Zhaoqing Tifo has raised, which is specific to, and strictly limited to, the financial statements of
P.T. Tifico. See generally Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1335-36.
Court No. 13-00044 Page 29
that now. See 19 U.S.C. § 1516a(a)(1); USCIT Rule 3(a)(2); see generally Zhaoqing Tifo II, 41
CIT at ____, 256 F. Supp. 3d at 1329.
Notwithstanding three rounds of briefing in this litigation (i.e., the initial briefing, the
briefing on the First Remand Results, and the briefing on the Second Remand Results), neither the
Government nor the Domestic Producer has ever made any serious effort to respond either to
Zhaoqing Tifo’s arguments concerning the narrow, precise nature of the claim at issue (including
the role of a complaint in defining the scope of litigation, and a court’s jurisdiction) or to its
arguments concerning the strict statutory time limits for filing an action challenging a final
determination. As Zhaoqing Tifo has maintained, and as has been explained previously and yet
again here), the scope of this action is determined by the claim set forth in Zhaoqing Tifo’s
Complaint, which does not contest Commerce’s decision in the Final Determination to select the
financial statements of P.T. Tifico (rather than those of P.T. Asia Pacific). Because the Domestic
Producer elected not to file its own action contesting Commerce’s decision on the selection of
financial statements, and because the “double-counting” claim asserted by Zhaoqing Tifo is laser-
focused on the implications of Commerce’s decision to select the financial statements of P.T.
Tifico – and does not challenge that decision itself – Commerce’s selection of the financial
statements of P.T. Tifico was laid to rest long ago and cannot be resurrected in this action. See
generally Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1328-29. Unlike Lazarus,
Commerce’s selection of financial statements cannot rise from the dead. 18
18
Absent extraordinary circumstances not present here, Commerce may not reopen aspects
of its final determinations that are not properly the subject of litigation – not even by invoking the
interests of accuracy. The legislative mandate to “use the best available information” in calculating
dumping margins (see 19 U.S.C. § 1677b(c)(1)) is not a license for Commerce to reopen settled
Court No. 13-00044 Page 30
aspects of its antidumping analyses after a final determination has issued merely because the
agency concludes that some decision that it made in the course of that final determination was ill-
advised or wrong.
In a routine international trade case such as this, accuracy must yield to finality for purposes
of litigation, except to the extent that an issue is properly preserved for judicial review. Practicality
and common sense compel this result. If it were otherwise, all of the many scores of decisions,
calculations, and judgment calls that go into a final determination by Commerce would remain
open to challenge long after the final determination was issued – possibly ad infinitum. Nothing
would ever really become final.
Neither Commerce nor the Domestic Producer has pointed to any special circumstances
in this case that might even conceivably justify a departure from the general rule on finality. See,
e.g., supra n.17 (explaining that P.T. Tifico’s “double-counting” claim is not inextricably
intertwined with the broad issue of Commerce’s selection of financial statements). There is no
new evidence or other information that has come to light that Commerce might at least try to use
as a basis for revisiting its earlier decision to rely on the financial statements of P.T. Tifico. See,
e.g., supra n.8 (explaining that, at the time Commerce selected the financial statements of P.T.
Tifico for use in the Final Determination, Commerce had before it the same information
concerning the relative levels of integration of Zhaoqing Tifo, P.T. Tifico, and P.T. Asia Pacific –
the exact same factual information that is on the record now). And, to be sure, there are no
allegations of fraud. See generally, e.g., Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at
1330-31 (and authorities cited there) (noting rare, extraordinary cases involving threats to the
fundamental integrity of Commerce proceedings, where – “notwithstanding the (nearly) ironclad
rule prizing finality over accuracy/completeness” – Commerce may be permitted to reopen
determinations and proceedings). The remarkable fact is that Commerce wants the equivalent of
a “do-over” in a case where it was warned expressly and in no uncertain terms (by the Domestic
Producer, no less) that – if Commerce selected P.T. Tifico’s financial statements for the Final
Determination – Commerce would be forced to exclude coal expenses from the FOP database to
avoid double-counting, because all energy expenses are already reflected in (and cannot readily be
extracted from) those statements, due to their less detailed nature.
If Commerce were permitted to reopen the issue of the selection of financial statements
here, it would be a very slippery slope. If one begins tugging at the thread, there is no telling where
the unraveling will end or what will be left. The statutory scheme plainly contemplates that
Commerce’s final determinations will be exactly that – final – except to the extent that one or more
aspects of a final determination are properly preserved for judicial review. The outcome that
Commerce and the Domestic Producer seek would set a very dangerous precedent.
Court No. 13-00044 Page 31
B. Commerce’s Decisions Not to Reopen the Administrative Record
In filing the Second Remand Results “under protest,” Commerce intimates that the court
has forced the agency to use P.T. Tifico’s financial statements and asserts that the use of those
statements (rather than the statements of P.T. Asia Pacific) results in a dumping margin that is
“less accurate.” See, e.g., Second Remand Results at 2-3 (stating that the Second Remand Results
are filed “under protest” and asserting that the use of P.T. Tifico’s financial statements is “as
instructed by the Court”); id. at 6 (asserting that using P.T. Tifico’s financial statements makes the
dumping margin “less accurate”). 19 Both of these positions miss the mark.
Nothing in Zhaoqing Tifo I or Zhaoqing Tifo II foisted on Commerce the use of P.T.
Tifico’s financial statements. It is Commerce itself that chose P.T. Tifico’s financial statements
in Commerce’s own Final Determination, reversing the position that the agency had taken in its
Preliminary Determination, which used the statements of P.T. Asia Pacific. Commerce made that
decision over the vehement objections of the Domestic Producer, which expressly and specifically
cautioned Commerce that use of P.T. Tifico’s less detailed financial statements would require
Commerce to exclude the cost of energy sources (including the cost of coal) from the FOP
database.
19
See also Second Remand Results at 6 (referring to “the Court’s instructions” and stating
that the Second Remand Results are filed “under protest”); id. at 7 (asserting that use of P.T.
Tifico’s financial statements is “as directed by the Court” and indicating that Domestic Producer’s
comments on the draft remand results argued that use of P.T. Tifico’s financial statements
“result[s] in a less accurate dumping margin”); id. at 8 (referring to “the Court’s Order,” noting
that Commerce “respectfully disagrees” with the court’s decision and stating that “the Court has
ruled” against consideration of the issue of Commerce’s selection of financial statements as
beyond the scope of litigation).
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Similarly, as noted in section III.A above, given Commerce’s decision to use the financial
statements of P.T. Tifico in the Final Determination (ignoring the Domestic Producer’s explicit
and unambiguous warnings), the Domestic Producer could have filed its own action challenging
Commerce’s selection of financial statements (i.e., the selection of P.T. Tifico’s statements over
those of P.T. Asia Pacific in Commerce’s Final Determination). Had the Domestic Producer done
so, the broad issue of Commerce’s selection of financial statements (and the relative merits of one
statement versus the other) would be a proper subject for litigation here and Commerce would
have been free to reconsider its selection of financial statements. As it is, however, the Domestic
Producer made an informed, deliberate, intentional decision not to file such an action. Therefore,
like virtually all of the scores of decisions that Commerce made in reaching its Final
Determination, Commerce’s decision as to its selection of financial statements (i.e., its selection
of P.T. Tifico’s statements over those of P.T. Asia Pacific) became final when the Domestic
Producer failed to commence an action contesting that decision on or before February 11, 2013.
The only aspects of Commerce’s Final Determination that did not become final at that time are
those that were preserved for judicial review in Zhaoqing Tifo’s Complaint.
In sum, contrary to the implications in the Second Remand Results, it is not the court that
required Commerce to use the financial statements of P.T. Tifico. The requirement to use P.T.
Tifico’s financial statements is the product of, and is directly and exclusively attributable to,
Commerce’s decision to use P.T. Tifico’s statements (rather than those of P.T. Asia Pacific) for
purposes of the agency’s Final Determination, in tandem with the Domestic Producer’s failure to
seek judicial review of that agency decision.
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Further, the filing of the Second Remand Results “under protest” evinces a decision on the
part of Commerce to rely on P.T. Tifico’s financial statements based solely on the existing
administrative record, without exhausting available avenues that might have shed light on P.T.
Tifico and matters such as the company’s energy consumption and how energy is accounted for in
the company’s financial statements, and thereby helped resolve any outstanding questions or
concerns. Specifically, although the combined actions of Commerce and the Domestic Producer
(as outlined above) preclude Commerce from using financial statements other than those of P.T.
Tifico, there was nothing that prevented Commerce from reopening the administrative record (on
the first remand and/or the most recent remand) to seek to clarify P.T. Tifico’s energy costs and
accounting practices, or for any other similar purpose. 20
Commerce could have reopened the record and sought new evidence that might have
permitted the agency to break down the energy figures in P.T. Tifico’s financial statements so as
to allow the agency to extract from those statements values for relevant production-related energy
20
Zhaoqing Tifo I and Zhaoqing Tifo II “essentially gave Commerce unfettered discretion
on remand to do whatever the agency deemed appropriate to ascertain how to properly account for
water, coal, and electricity using the financial statements of P.T. Tifico, while at the same time
avoiding double-counting.” See, Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1334.
To explain its decision not to reopen the administrative record, Commerce notes that, as a
matter of policy, it generally limits its consideration of a financial statement to the four corners of
the document itself. See First Remand Results at 6-7. But that is the agency’s own, self-imposed
constraint; and, however sound Commerce’s policy might be as a general matter, this is a
somewhat unusual situation. Because Commerce and the Domestic Producer were concerned
about the lack of detail in P.T. Tifico’s financial statements (particularly as to energy costs), and
because Commerce did not have the option of discarding P.T. Tifico’s statements, it stands to
reason that Commerce and the Domestic Producer would want to reopen the record and seek new
evidence that might assuage their concerns. There is no statute or regulation that prevented
Commerce from doing so, particularly in the circumstances of this case.
Court No. 13-00044 Page 34
inputs (as opposed to, for example, values for energy properly accounted for as overhead) and thus
to permit the agency to account for coal separately in the FOP database. Indeed, Zhaoqing Tifo I
and Zhaoqing Tifo II encouraged Commerce to do exactly that. See Zhaoqing Tifo I, 39 CIT at
____, 60 F. Supp. 3d at 1365; Zhaoqing Tifo II, 41 CIT at ____, 256 F. Supp. 3d at 1333, 1337-
38.
Because Commerce elected to forego such steps that might have permitted the agency to
clarify the manner in which P.T. Tifico’s financial statements account for energy, Commerce’s
complaints about the use (and limitations) of those financial statements – and the agency’s filing
of the Second Remand Results “under protest” – have a hollow ring.
For much the same reason, Commerce’s assertion that the use of P.T. Tifico’s financial
statements result in a “less accurate” dumping margin cannot be taken at face value. 21 Because
21
In its comments on Commerce’s draft of the most recent remand results, the Domestic
Producer assert that “relying on the financial statements of P.T. Tifico and removing coal from the
FOP database” means that Commerce’s dumping margin calculations “[do] not capture all energy
inputs.” See Second Remand Results at 7. But Commerce squarely de-bunks that contention. The
Second Remand Results state that Commerce “disagrees” with the Domestic Producer’s contention
and explain that, as standard agency practice, Commerce recognizes that, in financial statements,
“energy costs are captured in the manufacturing overhead unless the . . . financial statements
provide a detailed breakout of specific line items,” including a line item for energy expenses. Id.
at 8. Commerce thus concludes that “the [second] remand results fully account for all energy
costs.” Id. Including coal in the FOP database – as the Domestic Producer urges, and as
Commerce did in the Final Results – would “double-count” energy costs.
(Early in the Second Remand Results, there is a statement that “[r]elying on P.T. Tifico’s
financial statements to derive surrogate financial ratios requires [Commerce] to assume that all
potential energy costs are included in the factory/manufacturing overhead figure.” Second
Remand Results at 6 (emphasis added). Reading the Second Remand Results as a whole, however,
it is clear that this early statement does not accurately reflect Commerce’s position. As the Second
Remand Results later confirm, all energy costs are captured in the factory/manufacturing overhead
figure that Commerce derived from P.T. Tifico’s statements. See id. at 8.)
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Commerce elected not to reopen the administrative record to seek evidence that might have
clarified the energy values reflected in P.T. Tifico’s financial statements (and, for example, might
have allowed Commerce to account for coal separately in the FOP database), any representations
about the relative accuracy of dumping margins relying on the financial statements of P.T. Tifico
versus those of P.T. Asia Pacific must necessarily be limited by the caveat “on the existing
administrative record.” By choosing not to reopen the record, Commerce precluded any possibility
of enhancing the accuracy of the dumping margin calculated using P.T. Tifico’s financial
statements and therefore cannot now be heard to complain.
IV. Conclusion
For the foregoing reasons, Commerce’s Second Remand Results must be sustained. A
separate order will enter accordingly.
/s/ Delissa A. Ridgway
Delissa A. Ridgway
Judge
Dated: November , 2018
New York, New York
Moreover, although it may be Commerce’s preference to include production-related energy
costs in the FOP database (see Second Remand Results at 6), Zhaoqing Tifo points out that
Commerce has excluded energy costs from the FOP database in other cases where, as here, the
financial statements that Commerce selected for use in deriving surrogate financial ratios did not
separately break out energy costs – the very outcome that Commerce reaches in these Second
Remand Results. See Zhaoqing Tifo II, 41 CIT at ____ n.24, 256 F. Supp. 3d at 1336 n.24 (and
sources cited there).