MUSGRAVE, Senior Judge:
This opinion addresses the Final Results of Redetermination Pursuant to Court Remand ("Redetermination") that concern the antidumping duty investigation on Certain Coated Paper from the PRC ("Final Determination").
Pursuant to the order of remand, the International Trade Administration, U.S. Department of Commerce ("Commerce") undertook to (1) calculate the value of certain inputs using only market economy purchase prices, (2) use the purchase prices from South Korea and Thailand for the inputs therefrom, (3) correct certain programming errors in the targeted dumping calculation, (4) reconsider the classification of certain sales of the Gold East Companies
Commerce contends the Redetermination complies with the remand order. Two issues remain in dispute here, however. The domestic industry petitioners
The issue concerning the claimed market economy purchase ("MEP") prices for the inputs from Thailand and South Korea was previously remanded because the record provided insufficient support for believing or suspecting the prices in question had been distorted by subsidies. See 38 CIT at ___, 918 F.Supp.2d at 1324; see also 19 U.S.C. § 1677b(c)(1) (2006); 19 C.F.R. § 351.408(c)(1) (2008). Commerce disagrees with the order either to reopen the record and make particularized findings to support the conclusion of distorted input prices or to reverse the decision not to use the input price data and concomitant recalculation of the margin. It opted for the latter under protest. Redetermination at 16.
Having reversed its prior decision, Commerce reiterates that if a country maintains broadly available, non-industry specific export subsidies, its practice has been to find the existence of such subsidies a sufficient reason to exclude the affected input from the factors of production values. Its stated position on not reopening the record is based on its inference of "the existence" of such subsidies, from which it presumes the relevant inputs to have benefitted, and it maintains it is "longstanding practice to not obtain further evidence or conduct a formal investigation to determine whether such prices are subsidized, but instead to base [the] decision only on information available to it at the time it makes its determination." Id. (bracketing added), referencing inter alia Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China, 69 Fed. Reg. 20594 (Apr. 16, 2004), and accompanying I & D Memo ("CCTR") at comment 7.
The petitioners requested during remand that Commerce reopen the administrative record. Petitioners' Letter to the Department of Commerce dated July 26, 2013, Remand Public Document ("RPDoc") 1. Commerce declined. Commenting on the draft remand results, the petitioners raised the substance of Memorandum from the Office of Policy to DAS and Office Directors, "NME investigations: procedures for disregarding subsidized factor input prices" (Feb. 2002), which advised that all factor inputs from inter alia South Korea and Thailand should be disregarded. The petitioners pointed out that: (1) it has been Commerce's consistent position since the memorandum's publication to infer that the prices of inputs purchased from those countries are likely distorted; (2) Commerce has identified a number of subsidy programs that benefit exporters from Thailand, including the Royal Thai Government's Tax Coupon Program ("TCP") and the Investment Promotion Act ("IPA") ("in existence" they claim since 1977), as recently discussed in Commerce's 2013 determination on warmwater shrimp from Thailand, covering a period of investigation in 2011 that would have obviously post-dated
The petitioners further criticize the remand results as simply a recalculation of the margin using the MEP values on remand. They argue that without any analysis of whether those values are the best available information leading to the calculation of the most accurate margin, Commerce has given the remand order an interpretation that renders it legally erroneous. Petitioners' Comments at 9, referencing Borlem S.A.-Empreedimentos Industriais v. United States, 13 CIT 231, 234, 710 F.Supp. 797, 799 (1989) (when issuing remand orders courts must be "mindful of the doctrine of primary jurisdiction" whose "central purpose ... is to permit courts to give effect to legislative intent underlying the established regulatory scheme by referring matters involving agency expertise back to the agency so that it may, in the first instance, pass upon the issue from its unique administrative perspective").
On the argument that the record is devoid as to information that the inputs were not subsidized, the contention assumes the validity of Commerce's presumption that they were. On that aspect, the plaintiffs argue that the question as addressed by the court is that the record lacked positive evidence of subsidization. That characterization is not entirely accurate, however. Based on the standard pursuant to which Congress directed Commerce to operate, the question to be answered was whether there was positive evidence on the record for "the belief or suspicion of" subsidization relevant to the POI, a standard that requires sufficient (i.e., substantial) evidence on the record to give rise, prima facie, to that presumption.
The petitioners' other implied points are well-taken. Regarding their subtle argument that the Redetermination's resistance to "reopening" the administrative record is an implicit contest over the legality of the prior order, it is true, as Commerce implies, that where an interested party bears the burden of creating an accurate record with respect to a particular fact, courts should "declin[e] to require reopening of the record, except in the most extraordinary circumstances." Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 296, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). See, e.g., Essar Steel Ltd. v. United States, 678 F.3d 1268, 1277-78 (Fed. Cir.2012) ("[t]he decision to reopen the record is best left to the agency"). That is deferentially appropriate. But while interested parties bear the burden of proffering information to support their case, the burden is on Commerce, not interested parties, to include in the record the prima facie "information available to it at the time" that it claims as providing the reasonable basis to believe or suspect the existence of distorted input prices.
Necessarily, judicial remand in its own right "will compel the agency to reopen or reconsider its decision", Charles H. Koch, Jr. and Richard Murphy, 2 Admin. L. & Prac. § 5:71 (3d ed.), and as previously discussed, the administrative record was not found to provide sufficient support for the determination reached.
CCTR, supra, is referenced in the Redetermination as support for the proposition of not opening the record. That determination does not facially explain why inclusion in the record of the substantial, specific, and objective "information available to it at the time" that is necessary to show "the existence" during the POI of relevant "broadly available, non-industry specific export subsidies" from which input price distortion could properly be presumed is precluded.
Mere "belief or suspicion" is a thin reed to support a determination of input price distortion. Again: "in order for reasonable suspicion to exist[,] there must be `a particularized and objective basis for suspecting' the existence of certain proscribed behavior, taking into account the totality of the circumstances, the whole picture." China National Machinery, supra, 27 CIT at 266, 264 F.Supp.2d at 1239, quoting Al Tech Specialty Steel Corp. v. United States, 6 CIT 245, 247, 575 F.Supp. 1277, 1280 (1983), which discussed, inter alia, Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). Consequently, and in accordance with the substantial evidence standard of review, the first prong of the Fuyao Glass test requires specific and objective evidence showing that "subsidies" (or subsidization) of the industry in question in fact "existed". 29 CIT at 114. Detailed positive evidence of that existence — during the POI — of broadly-available, non-industry specific subsidies has been held to satisfy this prong, see CS Wind Vietnam Co., Ltd. v. United States, 38 CIT ___, ___, 971 F.Supp.2d 1271, 1292 (2014), as well as the substantial evidence standard of review, see Zhejiang Machinery, supra, 31 CIT at 164-71, 473 F.Supp.2d at 1370-76, but the "general policy" concerning "broadly available, non-industry specific subsidies" as outlined in
In this matter, Commerce again proceeded down its familiar path to prove the validity of the presumption, albeit in a rather cursory manner. In the original Final Determination, Commerce declared "the existence" of generally-available non-industry specific subsidy programs during the period of investigation to be a fact. See I & D Memo at comment 17. But given the review standard of substantial evidence (and precedent), the court could not accept such an ex-record appeal, to generalized official notice
Commerce also maintains, in the original Final Determination as well as on remand, that in other proceedings it has found it appropriate to disregard input prices from South Korea and Thailand pursuant to its "longstanding" practice of disregarding surrogate values if it has reason to believe or suspect that the source data may be subsidized. I & D Memo at comment 17. That may well be true, but flat appeal to "the past" does not inherently
CS Wind, supra, 38 CIT ___, 971 F.Supp.2d 1271, is illustrative of that sufficiency. Concerning an administrative record that also encompassed input prices that Commerce had believed or suspected had been distorted by subsidies and that Commerce had analyzed along the similar path as the matter at bar (and that of many others), CS Wind reiterated that the test of Fuyao Glass is one reasonable method for evaluating the sufficiency of the evidence upon which Commerce bases its belief or suspicion that input prices are subsidized. After analyzing the record in relation to each of the three Fuyao Glass prongs (see supra note 5), CS Wind held Commerce's analysis satisfactory because of the relevancy, contemporaneity, and particularity of the referenced proceedings to the administrative record therein considered.
The parties have not had opportunity to provide input on CS Wind, but its analysis appears sound in its own right. The matter at bar, at least with respect to the Final Determination, differs from that case as to the lack of any asserted and analyzed contemporaneity in the referenced administrative determinations and demonstrated relevance to the POI to support the belief or suspicion that prices of the relevant inputs were distorted during the POI. It also lacks particularity or specificity on what are being claimed as the "broadly-available, non-industry specific export subsidies" from South Korea and Thailand. It may well be true that those countries maintained such subsidies during the period in question. But those facts were, and are, neither apparent nor inherent in the administrative record: it requires some primary source from which it could reasonably be concluded that such programs were in fact in existence and operable during the POI, with a degree of specificity in describing the relevant program(s), before the possibility of believing or suspecting that the relevant MEPs during the POI were likely distorted by such programs could even arise.
In the final analysis, the court is not here persuaded that Commerce on remand has provided a legally correct result, as argued by the petitioners, not least because (its expressed position to the contrary notwithstanding) in the Redetermination Commerce has, in fact, supplemented the administrative record — with references to Fresh Garlic From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2010-2011, 78 Fed.Reg. 36168 (June 17, 2013) (reviewing the Nov. 1, 2010 to Oct. 31, 2011 period) and accompanying I & D Memo at comment 8, and Certain Activated Carbon From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2011-2012, 78 Fed.Reg. 70533 (Nov. 26, 2013) (reviewing the Apr. 1, 2011, through Mar. 31, 2012 period) and accompanying I & D Memo at comment 5, both of which were apparently undertaken after and covered periods subsequent to the POI. See Redetermination at 16. But beyond being claimed as support for the practice of inferring that all exporters from a country that "maintains" broadly available, non-industry specific export subsidies may be presumed to have benefitted from such subsidies, those determinations are unexplained, specifically whether they
The petitioners also challenge the Redetermination with respect to the targeted dumping methodology and remedy applied by Commerce. See 19 U.S.C. § 1677f1 (d)(1)(B) (2006); 19 C.F.R. § 351.414(f) (2008).
By way of background, it will be recalled that in the Final Determination Commerce applied its Nails test
After making the changes to the calculations in the Final Determination with respect to other issues addressed in the prior opinion, Commerce continued to find targeted dumping, in that APP-China's sales prices had a pattern of pricing that differed significantly among U.S. customers for comparable merchandise during the POI, and that the targeted sales met both the "significant deviation test" threshold and the "gap test" threshold. Redetermination at 14. However, Commerce declined to apply a targeted dumping remedy after finding that the weighted-average margin under both the A-A comparison methodology and the A-T methodology, as limited to the sales that were found to be targeted, is below the de minimis threshold. Id. Commerce thus
In their comments on the draft remand results, the petitioners argued that failure to apply alternate targeted dumping methodology to all U.S. sales of the exports of subject merchandise by APP-China constitutes error. RCDoc 10 (Oct. 28, 2013) at 11 (comments on prelim. remand); RCDoc 13 (Nov. 18, 2013) at 7 ("Comments on Disclosure"). They urge that Commerce (re)consider and find APP-China's targeted dumping to be not normal. They here argue that in promulgating the targeted dumping regulation, Commerce noted that the Limiting Rule approach would not always be "limited" in application, because there may be situations in which targeted dumping by a firm is so pervasive that the A-T method becomes the benchmark for gauging the fairness of that firm's pricing practice. See Antidumping Duties; Countervailing Duties, 62 Fed.Reg. 27296, 27375 (May 19, 1997) (final rule) ("where a firm engages extensively in the practice of targeted dumping, the only adequate yardstick available to measure such pricing behavior may be the [A-T] methodology").
The petitioners also contend that notwithstanding whatever result Commerce reaches with regard to the first issue discussed above, supra, Commerce's current record consists of legally-relevant extensive, or "widespread" or "pervasive,"
Since the other issue being remanded may impact the calculations employed for the targeted dumping analysis, the court need not opine further at this point, but upon remand Commerce is specifically requested to consider and address in greater detail the petitioners' points as raised in their confidential comments filed with the court.
This matter is hereby remanded for further proceedings not inconsistent with the foregoing. The finalized results thereof shall be due October 1, 2014; comment briefs for the court on those results to be filed October 31, 2014; and rebuttal commentary by November 17, 2014.
Id. (italics added).
The closest temporal references cited to support that proposition for the purpose of the matter at bar were Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Final Results of Countervailing Duty Administrative Review, 74 Fed.Reg. 2512 (Jan. 15, 2009), which addresses a period of events that had occurred three years prior to the POI, i.e., for that review, January 1, 2006, through December 31, 2006, and Wire Decking From the People's Republic of China, 75 Fed.Reg. 32905 (June 10, 2010) ("Wire Decking"), which justified the belief or suspicion of subsidies from South Korea with respect to inputs for that relevant subject merchandise upon Citric Acid and Certain Citrate Salts From the People's Republic of China, 74 Fed. Reg. 16838 (Apr. 13, 2009) (final less than fair value determination) ("Citric Acid"), which covered the period October 1, 2007 to March 31, 2008. The trail ends at Citric Acid, which simply states, without further citation or support, "[w]e excluded South Korea because we have reason to believe or suspect that prices of inputs from South Korea have been subsidized." Issues and decision memorandum on Citric Acid at comment 11B n. 135.
Ipse dixit declarations are not substantial evidence, and having to root through a bureaucratic matryoshka-doll of administrative determinations to get to the source of an evidentiary point does not provide ease of understanding. In this instance, it did not prove "the existence" of relevant, broadly available, non-industry-specific export subsidies for purposes of the POI at bar in any event.