547 F.Supp.3d 1310
Ct. Intl. Trade2021Background
- Plaintiffs (Chinese activated carbon producers) challenged Commerce's AR11 antidumping determinations (POR Apr.1, 2017–Mar.31, 2018) on: primary surrogate country selection, surrogate values for bituminous coal and coal tar pitch, and surrogate financial ratios.
- The Court remanded Commerce's choice of Malaysia as primary surrogate and its coal valuation reasoning, and asked Commerce to reconsider certain financial-ratio adjustments.
- On remand Commerce: retained Malaysia as the primary surrogate country; treated bituminous coal with unknown calorific value using Romanian HS 2701.12 data; used Malaysian HS 2701.19 import data for bituminous coal documented as <5,833 kcal/kg; and adjusted financial ratios (offsetting certain gains but keeping Social Contributions and Meal Tickets in SG&A).
- Plaintiffs argued Commerce should have used Romanian data more broadly (including averaging HS categories) and reallocated certain labor-related line items into labor rather than SG&A.
- The Court sustained Commerce's Remand Results, finding its surrogate-country choice, coal valuations, and financial-ratio allocations supported by substantial evidence and reasonable explanations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Primary surrogate country selection | Romania has superior, less-distorted data and better overall data quality; Malaysia's data (some HS subheadings) are aberrant | Malaysia was reasonably chosen because both countries are comparable/significant producers and Malaysian data are more specific and more contemporaneous for some inputs | Commerce's selection of Malaysia sustained — decision supported by substantial evidence (data specificity and contemporaneity justified choice) |
| Valuation of bituminous coal with unknown calorific value | All unknown-coal should be valued using Romanian HS 2701.12 and 2701.19 average; Commerce should have sought calorific tests from Supplier C | No record evidence of low calorific value; plain HS 2701.12 description matches respondents' input; Commerce need not re-open the record | Sustained — using Romanian HS 2701.12 for unknown coal was reasonable given lack of calorific data; agency's choice not speculative given record |
| Valuation of bituminous coal with known calorific value (<5,833 kcal/kg) | If Malaysian HS 2701.12 was aberrant, MH 2701.19 should also be suspect; Romania should be used to avoid multi-country distortion | Malaysian HS 2701.19 data were not shown to be aberrant; Commerce may prefer single surrogate country and use Malaysia for specific low-cal data | Sustained — Commerce reasonably used Malaysian HS 2701.19 for documented low-cal coal; plaintiffs failed to show aberration |
| Allocation of "Social Contributions" and "Meal Tickets" in financial ratios | These items should be allocated to labor (likely embedded in labor surrogates) rather than SG&A absent evidence they were excluded from labor surrogate | No record evidence that labor surrogate includes those items; to avoid double-counting, Commerce allocates to SG&A when inclusion in labor surrogate is unclear | Sustained — Commerce reasonably left these items in SG&A because record did not show the labor surrogate included them |
Key Cases Cited
- Jianxing Brother Fastener Co. v. United States, 822 F.3d 1289 (Fed. Cir. 2016) (articulates Commerce’s multi-step surrogate-country selection approach)
- QVD Food Co. v. United States, 658 F.3d 1318 (Fed. Cir. 2011) (Commerce has broad discretion to choose the "best available information" for surrogate values)
- Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 (Fed. Cir. 2003) (standard for reviewing Commerce determinations)
- Mid Continent Steel & Wire, Inc. v. United States, 321 F. Supp. 3d 1313 (Ct. Int’l Trade 2018) (Commerce may rely on plain HS description to choose surrogate values)
- Tri Union Frozen Prods., Inc. v. United States, 227 F. Supp. 3d 1387 (Ct. Int’l Trade 2017) (Commerce’s preference to value factors in a single surrogate country to minimize distortion)
- Elkay Mfg. Co. v. United States, 180 F. Supp. 3d 1245 (Ct. Int’l Trade 2016) (permitted financial-ratio adjustments to avoid double-counting)