China Manufacturers Alliance, LLC v. United States, 205 F.Supp.3d 1325

Background

This consolidated appeal challenges Commerce’s Amended Final Results for the 2012–2013 administrative review of the antidumping duty order on pneumatic off‑the‑road tires from the PRC. Commerce had initiated the 5th review and selected two mandatory respondents: Double Coin (collapsed group) and Guizhou Tyre Co. (GTC).
In the Final/Amended Results Commerce (a) treated Double Coin as part of the PRC‑wide entity and assigned it a 105.31% rate (a simple average of a prior PRC‑wide AFA rate and Double Coin’s calculated de minimis margin of 0.14%), and (b) assigned GTC an individually‑determined margin based on surrogate values for inputs and various adjustments.
Plaintiffs: (1) China Manufacturers Alliance/Double Coin challenged assignment of the 105.31% PRC‑wide rate to Double Coin; (2) GTC challenged several surrogate valuations and price adjustments (VAT deductions, financial statements, coal surrogate, brokerage/handling and freight double‑counting, warehouse inflation adjustment); (3) Titan/USW challenged Commerce’s reduction of the PRC‑wide rate and certain fact findings (freight distances, inventory carrying costs, sigma cap application).
The Court of International Trade reviewed the administrative record under the substantial‑evidence/otherwise‑in‑accordance‑with‑law standard and held oral argument April 27, 2016.
Court’s principal remedial holding: Commerce acted contrary to law by assigning Double Coin the 105.31% rate instead of the individual, verified de minimis margin; the court remanded and directed Commerce to assign Double Coin the 0.14% de minimis margin. The court also remanded several GTC valuation/adjustment issues for further consideration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce lawfully assigned Double Coin the 105.31% PRC‑wide rate instead of using Double Coin’s individually calculated de minimis margin	Double Coin: Commerce must assign an individual weighted‑average dumping margin to any exporter it designates for individual examination; using a PRC‑wide/AFA‑derived rate for a cooperative, individually examined respondent contravenes 19 U.S.C. § 1677f‑1(c)	Commerce/Defendant: Department may apply a PRC‑wide rate in NME proceedings and employ prior PRC‑wide rates where record data for the PRC‑wide entity are missing; Sigma/Transcom support the approach	Held: Court remanded — Commerce acted contrary to law. Because Double Coin was a mandatory respondent and Commerce calculated a verified individual margin (0.14%), Commerce must assign that individual margin rather than apply the 105.31% rate.
Whether Commerce permissibly deducted an 8% ‘‘irrecoverable VAT’’ from GTC’s EP/CEP starting prices under 19 U.S.C. § 1677a(c)(2)(B)	GTC: Commerce made an unauthorized, presumption‑based rate deduction (8% of FOB) without finding that PRC actually imposed a tax/charge of that specific amount on GTC’s exports; Commerce unlawfully substituted a presumption for a statutorily required finding	Commerce: Methodology is reasonable and accords with its 2012 methodological guidance for NME VAT; record supports an irrecoverable VAT adjustment	Held: Court vacated the VAT deduction. Commerce failed to make the statutorily required finding of an amount of tax/charge imposed on the export sales; reliance on a formulaic presumption was contrary to § 1677a(c)(2)(B). Remand required.
Whether Commerce’s selection of surrogate financial statements (using only Goodyear Indonesia rather than also Gajah Tunggal) was supported by substantial evidence	GTC: Commerce should use multiple financial statements (better industry representation); Gajah Tunggal’s data could be adjusted/used	Commerce: Goodyear statements are audited, complete, contemporaneous and break out required cost lines; Gajah Tunggal lacked a manufacturing energy line and its annual report raised consistency issues	Held: Sustained. Commerce acted within discretion to use Goodyear only as best available information.
Whether Commerce chose the best available surrogate for steam coal (GTA Indonesia import data v. Argus Coalindo)	GTC: Argus/Coalindo is more product‑specific (UHV) and appropriate; Commerce wrongly rejected it as export‑oriented	Commerce: GTA import data reflect non‑export Indonesian prices and better satisfy surrogate criteria; Argus contains international spot/export influences and is less suitable	Held: Sustained. Commerce’s choice of GTA import data as best available was supported by substantial evidence.
Whether Commerce double‑counted brokerage & handling and ocean freight when using Doing Business (B&H) and Descartes (freight quotes) data	GTC: Specific line items on Descartes overlap Doing Business B&H components, producing double counting	Commerce: Doing Business measures export‑related procedures (not sea transport) and Descartes surcharges are additional freight fees — no overlap	Held: Remand. Court found Commerce’s no‑double‑counting finding insufficiently specific; remand to address claimed overlaps charge‑by‑charge.
Whether Commerce should have adjusted the Indonesian warehouse price quote for inflation to be contemporaneous with the POR	GTC: Quote accessed April 9, 2014; Commerce should have deflated it to POR using PPI	Commerce: No indication the April 2014 quote was not in effect during POR and no better source on the record	Held: Remand. Commerce must reconsider the contemporaneity/inflation adjustment with fuller explanation tied to record evidence.

Key Cases Cited

Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir.) (supports Department practice presuming freight‑minimizing supplier behavior in NME surrogate freight determinations)
Transcom, Inc. v. United States, 294 F.3d 1371 (Fed. Cir.) (addresses application of country‑wide rates and BIA/AFA in NME reviews)
Shakeproof Assembly Components v. United States, 268 F.3d 1376 (Fed. Cir.) (Commerce has wide discretion in selecting best available information for surrogate valuations)
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (Sup. Ct.) (agency statutory interpretation and deference framework)
Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (Sup. Ct.) (agency interpretation of its own regulation must not conflict with statute)