[Sustaining results of redetermination of first administrative review antidumping duty order on diamond sawblades and parts thereof from the People's Republic of China.]
R. KENTON MUSGRAVE, Senior Judge.
Musgrave, Senior Judge Diamond Sawblades and Parts Thereof from the People's Republic of China ("PRC"), 78 Fed. Reg. 11143 (Feb. 15, 2013), and accompanying issues and decision memorandum (Feb. 8, 2013) ("IDM"), PDoc 353, which concerns the first administrative review of subject merchandise covering the 2009-2010 period, was previously remanded for further proceedings consistent with Slip Op. 14-50 (Apr. 29, 2014), familiarity with which is here presumed. Before the court are the final results of remand ("Redetermination" or "RR") and the parties' comments thereon. As a result of remand, the contentions in this case now center on Commerce's reduction of the "PRC-wide" rate of antidumping duty from 194.09% to 82.12%, which appears to be an issue of first impression. For the following reasons, the court sustains the Redetermination.
The matter was voluntary remanded in part, at the request of the defendant International Trade Administration, U.S. Department of Commerce ("Commerce"), in order to reconsider the determination to grant a separate rate to the "ATM entity," a "collapsed" respondent in the underlying administrative review.
Due to finding that the ATM entity is not entitled to a separate rate, Commerce considered the issue of whether CISRI should be included in the ATM entity as moot. See RR at 2. The plaintiff, Diamond Sawblades Manufacturers' Coalition ("DSMC") contests that conclusion due to the following.
The Redetermination satisfies neither party.
ATM argues the results of remand are unlawful because Commerce has found "full cooperation" by the ATM entity and all elements of the PRC-wide entity in this review and because the statute does not allow use of a partial adverse inference if there has been full cooperation. See, e.g., Def-Int's Cmts at 1. ATM further argues the adverse portion of the final margin determined for the PRC-wide entity is based on information not on the record of this review nor has that information been corroborated as required by 19 U.S.C. § 1677e(c). ATM contends Commerce was and is aware of the precise rate of 0.15% that is applicable to it, a cooperative respondent, and that Commerce must use this rate as the rate that is applicable to it. Def-Int's Cmts. at 6. ATM thus continues to argue that it is somehow entitled to separate consideration notwithstanding. See, e.g., id. at 11 ("[i]ndeed, a fairly obvious approach here would have been to use the actual factual information on the record of this review and apply the 0.15 percent here as the assessment rate for [ATM], but continue to apply a different and higher rate as the rate for those who failed to respond or cooperate"). Admitting the possibility of a "higher rate" for other members of the PRC-wide entity, ATM does not appear go so far, however, as to argue that the PRC-wide rate should be 0.15%.
The DSMC argue that Commerce's adjustment of the PRC-wide rate is contrary to agency practice and policy, and that the ATM entity should receive the PRC-wide rate that was calculated during the investigation. Allowing the conduct of a single member of the PRC-wide entity to affect the PRC-wide entity rate, the DSMC argue, "would allow for the PRC-wide entity to potentially manipulate AD results by selectively providing data on the record and dictating what data can be verified." DSMC Resp. to Def-Int's Cmts. at 3, quoting issues and decision memorandum accompanying Galvanized Steel Wire from the PRC, 77 Fed. Reg. 17430 (Mar. 26, 2012) (final LTFV determ.) at cmt. 1.C ("Galvanized Steel Wire").
The DSMC also argue the agency's downward adjustment of the PRC-wide rate is premised on the fact that no PRC-wide entity member has failed to cooperate. Id. at 9. CISRI is a member of the ATM entity, the DSMC contend; therefore the record "may indeed indicate that the [ATM e]ntity as a whole did not cooperate and . . ., thus, there are uncooperative members of the PRC-wide entity." DSMC Cmts at 8 n.6. Although the DSMC do not elaborate further on that proposition, they also contend Commerce's "Solomonesque" determination is speculative, arbitrary, and capricious, that the record does not support finding, in essence, that the ATM entity accounted for half of exports of subject merchandise to the U.S., and that if the PRC-wide rate is to be adjusted at all, which the DSMC do not concede, then a more logical approach would be based on the number of potential respondents comprising the PRC-wide entity, which the DSMC calculate as 22, i.e., a "weighting" of the ATM entity's rate in the PRC-wide rate amounting to 1/22nd. In any case, the DSMC argue, Commerce does not explain whether it is changing its longstanding position or practice regarding non-market economies and the PRC-wide rate and, if so, on what basis
Id. at 8.
Addressing the parties' comments, Commerce defends its position as follows
Def's Resp. to Remand Cmts at 4-9 (footnotes omitted; court's bracketing in part).
The question on remand for Commerce was the ATM entity's eligibility for a separate rate, consistent with Advanced Tech. As mentioned, in redetermining the ATM entity to have been part of the PRC-wide entity, Commerce concluded that it had to reconsider what impact that had on the PRC-wide rate.
Commerce's address of the ATM entity's comments, above, is not unreasonable. Commerce has a well-established practice of assigning the PRC-wide entity rate to individually investigated respondents who participated in an investigation or review but do not qualify for a separate rate. See, e.g., Certain Pneumatic Off-the-Road Tires from the PRC, 80 Fed. Reg. 20197 (Apr. 15, 2015) (final 2012-2013 rev. results) and accompanying issues and decision memorandum at cmt. 1; Certain Activated Carbon From the PRC, 78 Fed. Reg. 26748 (May 8, 2013) (prelim. 2011-2012 rev. results) and PDM at 10-11, unchanged in final results, 78 Fed. Reg. 70533 (Nov. 26, 2013). Research indicates that prior to December 4, 2013, whenever a respondent failed to establish its eligibility for a separate rate Commerce's practice was to conditionally "review" the PRC-wide entity rate.
Commerce's overall response to the DSMC's comments is also reasonable, although further clarification would have been helpful.
The DSMC also argued the matter at bar resembles the type of situation Commerce confronted during litigation of the original investigation, in which Commerce did not alter the PRC-wide entity rate but rather in the final analysis assigned the existing PRC-wide rate to the ATM entity without regard for the originally-calculated individual margin. See Advanced Tech, 938 F. Supp. 2d at 1342. The DSMC's proposition is valid, but only to a certain extent, because the rate established at the investigation is only intended to be an estimate, whereas it is at the administrative review stage that the actual and "precise" assessment and future cash deposit rate is established. See, e.g., AK Steel Corp. v. United States, 21 CIT 1204, 1215 (1997). On the other hand, as the DSMC imply, there is no reason to suppose that consideration of the impact the ATM entity's inclusion in the PRC-wide entity, as confirmed through litigation, was precluded during the LTFV investigation.
Commerce's response to the DSMC's arguments also elides over what transpired in Brake Rotors from the PRC, in which the respondent in question, Huanri General, was first examined in the fifth new shipper review of that subject merchandise and granted a separate rate. Brake Rotors From the PRC, 66 Fed. Reg. 29080 (May 29, 2001) (prelim. results and partial rescission of new shipper rev.). During the seventh administrative review of the merchandise, Huanri General, apparently cooperative, was denied a separate rate based on information obtained at verification. 70 Fed. Reg. at 24389. And it is notable that such circumstance did not cause Commerce to consider altering the PRC-wide rate based on Huanri General's margin calculation. Cf. 70 Fed. Reg. at 24392 (unchanged in final results, 70 Fed. Reg. 69937) with Brake Rotors From the PRC, 69 Fed. Reg. 42039, 42040 (inter alia final sixth rev. results). Commerce's expressed position here — that it is not precluded from considering what it actually knows about portions of the country-wide entity when reexamining the country-wide margin — may be legally correct, but the DSMC are also correct that Commerce's position is at odds with Brake Rotors from the PRC. Nonetheless, the court cannot conclude Commerce's position unreasonable, as it would indeed be "strange" were Commerce so precluded as a matter of law.
The DSMC also argue Porcelain-on-Steel Cooking Ware from the PRC, supra, is analogous. That administrative review, however, does not support the proposition that the conduct of individual members of the PRC-wide entity is meaningless to the determination of the appropriate rate for that PRC-wide entity — in fact, quite the opposite. The only respondent in that proceeding, Watex, had been determined ineligible for a separate rate. 70 Fed. Reg. at 76028-29. "As a result," Commerce determined "that it is necessary to review the single PRC entity, including Watex, in this segment of the proceeding." Id. at 76029. The "reviewed" PRC-entity received an adverse inference and adverse facts available because Watex had failed to comply to the best of its ability with repeated requests for information, and Commerce therefore assigned the PRC-entity "the highest rate determined in any previous segment of this proceeding." Id.
The status quo of the matter at bar, by contrast, is a record of the PRC-wide entity that was previously determined uncooperative during the investigation but which now includes the cooperative ATM entity as part of the PRC-wide entity. The particular portion of the Redetermination addressing that circumstance provides "unlike the [LTFV] investigation, no part of the PRC-wide entity failed to cooperate to the best of its ability." RR at 9. As mentioned, the ATM entity characterizes this as a determination of "full" cooperation by the PRC-wide entity. Def-Int's Cmts. on RR at 1. That characterization, however, depends on the extent to which the ATM entity's cooperation may reasonably be imputed to the remainder of the PRC entity, and substantial evidence of record does not support imputation to that extent. The record does not reveal "cooperation" of the PRC-wide entity beyond that of the ATM entity; the only other individually examined company in the review at bar, besides the ATM entity, was Weihai Xiangguang Mechanical Industrial Co., Ltd., which was presumed to be part of the PRC-entity until it demonstrated an absence of de jure and de facto control by the PRC government and entitlement to a separate rate, and because it established that entitlement, its cooperativeness cannot be imputed to the PRC-wide entity. At best, the record can be construed as only a "review" of the PRC-wide rate, within the meaning of 19 U.S.C. § 1675(a), but not the PRC-wide entity itself, i.e., as and of the consequence of the ATM entity's ineligibility for a separate rate, since it does not appear that Commerce queried information from the remainder of the PRC-wide entity apart from the ATM entity, to which a response would have been required, and from which "full" cooperation could be inferred. Hence, the court agrees with the DSMC that more is required from the record than, for example, the various (but not all) parties' submissions of requests for administrative review and the various voluntary submissions of comments in order to support the implication of "full" cooperation in the context of a review of a country-wide rate that is based in part on information from the investigation and in part on information obtained during review of an entity that had originally been deemed eligible for a separate rate until that determination was reversed in consequence of appeal.
In short, whatever else its expressed policy or practice may indicate on the general subject, to the extent Commerce reexamined ("reviewed") the PRC-wide rate, it was only, as Commerce explains, for the purpose of incorporating a "cooperative" part of the PRC-wide entity as a consequence of Advanced Tech, nothing more. However, the DSMC also argue that the implication in the Redetermination of a "cooperative" PRC-wide entity including the ATM entity was expressed without a determination on whether CISRI should also be collapsed as a part of the ATM entity. Considering the point, the court notes that CISRI was listed in the notice of initiation of this review, but it does not appear, from the administrative list of record documents, that CISRI requested either administrative review or "separate rate" consideration, unlike other PRC companies listed in the notice of initiation. Cf. Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 75 Fed. Reg. 81565 (Dec. 28, 2010) with, e.g., PDocs 1-15. In light of the fact that the ATM entity's ineligibility for a separate rate caused Commerce to re-examine the PRC-wide margin and consider "cooperation" in that re-examination, consideration of CISRI's "cooperation" (as a part of whichever entity, ATM or PRC) was not irrelevant, but the DSMC do not elaborate upon the evidence of record that would support determining non-cooperation, or upon what impact that would have on Commerce's "review" of the PRC-wide rate within the meaning of 19 U.S.C. § 1675(a), given that at the time in question it was Commerce's apparent policy to undertake such a re-examination once it determined that an entity requesting a separate rate (the ATM entity in this instance) was ineligible for that status.
In the final analysis of the record at bar, the court is not persuaded that Commerce's final results of redetermination and the revised PRC-wide rate, based on a simple average of the PRC-wide rate from the investigation and the information Commerce had with respect to the ATM entity, were unreasonable, unsupported by substantial evidence, or otherwise not in accordance with law. Cf. Yangzhou Bestpak Gifts & Crafts Co., Ltd. v. United States, 716 F.3d 1370, 1378 (Fed. Cir. 2013) (noting that 19 U.S.C. § 1673d(c)(5)(B) and the Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103 316 (1994), both "explicitly allow Commerce to factor both de minimis and AFA rates into its calculation methodology" and there is "no legal error in Commerce's use of a simple average rather than a weighted average"). The court can agree that adjustment of a country-wide rate based on a weighted average, for example the number of entities comprising the PRC-wide entity or U.S. market share, would better account for cooperative respondents determined ineligible for a separate rate, however judicial review does not involve displacement of the agency's reasonable resolution of "fairly conflicting views" on this record. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
In view of the foregoing, Commerce's results of redetermination will be sustained and judgment entered accordingly.
