Baoding Mantong Fine Chemistry Co. v. United States
2017 CIT 44
| Ct. Intl. Trade | 2017Background
- Commerce assigned Baoding Mantong a 453.79% weighted-average dumping margin in the 2010–2011 administrative review of the antidumping order on glycine from the PRC; Baoding challenged the margin as commercially unrealistic and contested multiple surrogate values and financial ratios.
- The Court of International Trade remanded, directing Commerce to determine a margin grounded in commercial and economic reality and to reopen the record or apply statutory methods if record information were insufficient.
- On remand Commerce replaced the financial ratios (factory overhead, SG&A, profit) calculated from three Indonesian pharmaceutical companies with ratios derived from an Indonesian urea producer (Pupuk), reducing Baoding’s margin to 64.97%; Commerce left surrogate values for chlorine, ammonia, formaldehyde, and steam coal unchanged.
- GEO (domestic producer/intervenor) argued the Federal Circuit’s Nan Ya decision undermined the CIT’s remand order and challenged Commerce’s use of Pupuk financials; Baoding partly supported the Pupuk change but objected to retaining the four surrogate values.
- The court sustained Commerce’s use of Pupuk financial statements (finding substantial evidence supported Commerce’s three-part comparable-merchandise analysis) but found deficiencies in Commerce’s explanations and record support regarding (1) whether Baoding used aqueous vs. anhydrous ammonia and (2) the choice of surrogate import data for ammonia, formaldehyde, and steam coal.
- The court remanded the Remand Redetermination for Commerce to reconsider and adequately explain surrogate valuations for ammonia, formaldehyde, and steam coal and to issue a second remand redetermination within 90 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Federal Circuit’s Nan Ya decision invalidates the CIT’s prior remand directing Commerce to reconsider the 453.79% margin | Nan Ya does not affect Baoding’s challenge; the original remand was appropriate because the margin was commercially impossible on the record | Commerce (and GEO) argued Nan Ya narrowed reliance on ‘commercial reality’ and suggested Commerce could have resisted the remand | Court: Nan Ya does not invalidate the remand; differences in facts and legal posture mean Nan Ya does not control; remand stands |
| Whether Commerce permissibly replaced pharmaceutical-company financials with Pupuk (urea producer) financials to compute surrogate financial ratios | Baoding supported using Pupuk; argued pharmaceutical comparables were dissimilar | GEO argued Commerce misapplied its three-part comparable-merchandise test and should have kept pharmaceutical financials | Court: Commerce reasonably applied the three-part test (physical characteristics, end uses, production processes, production experience); substantial evidence supports use of Pupuk statements; no remand on ratios |
| Whether Commerce correctly identified and valued Baoding’s ammonia input (aqueous NH4OH v. anhydrous NH3) | Baoding argued reporting error (counsel misreported formula) and that anhydrous ammonia is the correct input and alternative surrogate data (e.g., Philippines) are superior | Commerce relied on Baoding’s questionnaire exhibit listing NH4OH and prior submissions indicating aqueous ammonia, using Indonesian GTA data | Court: Commerce’s explanation and treatment of ambiguous record evidence were inadequate; directed Commerce to review record and adequately explain/further justify the ammonia identification and surrogate choice; remand required |
| Whether Commerce’s surrogate values for formaldehyde and steam coal (Indonesian GTA data) were the best available information | Baoding argued Indonesian GTA data were aberrational or based on commercially insignificant volumes and urged use of Philippine or Indian data (e.g., Coal India) | Commerce favored single-surrogate-country preference (Indonesia) and found Indonesian AUVs within range of comparable countries | Court: For formaldehyde and steam coal, Commerce failed to justify that Indonesian GTA data were the best available given disparities in quantities and AUVs; remand to reconsider these surrogate values (chlorine upheld) |
Key Cases Cited
- Nan Ya Plastics Corp. v. United States, 810 F.3d 1333 (Fed. Cir. 2016) (clarified limits of "commercial reality" and accuracy in antidumping determinations)
- Eurodif S.A. v. United States, 555 U.S. 305 (2009) (agency must follow statutory methods in antidumping context)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (deference to reasonable agency interpretation of ambiguous statutes)
- Baoding Mantong Fine Chem. Co. v. United States, 113 F. Supp. 3d 1332 (Ct. Int’l Trade 2015) (CIT opinion directing Commerce to reconsider a margin that was commercially unrealistic)