Cooper Tire & Rubber Co. v. United States
2017 CIT 32
| Ct. Intl. Trade | 2017Background
- Cooper Tire & Rubber Co. and its affiliated Chinese producers (Cooper (Kunshan) and Cooper Chengshan) were separate-rate respondents in an AD investigation of passenger vehicle and light truck tires from China; Cooper was a mandatory respondent in the parallel CVD investigation.
- Commerce assigned an all-others AD rate of 25.84% (weighted average of two mandatory AD margins). Commerce adjusted nominal cash-deposit rates downward for export subsidies and domestic subsidy pass-through when issuing cash-deposit instructions to CBP.
- For Cooper Commerce applied an export-subsidy downward adjustment of 11.13% (based on Cooper’s CVD data) and a domestic pass-through reduction of 3.59%, producing an applied AD cash-deposit rate of 11.12% (versus 8.72% applied to other AD separate-rate respondents).
- Cooper challenged only the 11.12% cash-deposit rate as arbitrary and capricious, arguing it should have received the same export-subsidy adjustment (13.53%) and pass-through adjustment as other separate-rate respondents—or, alternatively, Cooper’s own larger pass-through reduction if its 11.13% export-subsidy figure were used.
- The government defended Commerce’s hybrid methodology (using Cooper’s CVD-based export-subsidy rate for Cooper’s cash-deposit adjustment). The USW intervenor argued statutory adjustments for export subsidies support Commerce’s approach.
- The Court found Commerce’s method impermissible because the cash-deposit estimate must be rationally related to the expected future AD liability, and Commerce’s hybrid use of a Cooper-specific CVD export-subsidy rate (while relying on an all-others AD margin) is not grounded in the statutory framework for margins or future assessments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce lawfully applied a Cooper-specific export-subsidy adjustment to Cooper’s AD cash-deposit rate while using the all-others AD margin | Cooper: treating Cooper differently (11.13% export-subsidy adj.) than other separate-rate respondents (13.53%) was arbitrary; cash-deposit must match treatment of other separate-rate respondents | U.S.: Commerce reasonably used Cooper’s actual CVD-based export-subsidy rate to credit Cooper for the subsidy that will be assessed on its merchandise | Held for Cooper: Commerce acted arbitrarily and capriciously; the hybrid method was not rationally related to estimated future AD liability |
| Whether the cash-deposit rate must be based on an estimate tied to future AD liability and statutory margin procedures | Cooper: cash-deposit is security for future AD liability and must be derived by a method consistent with how future margins/adjustments will be calculated | U.S.: adjustments made in cash-deposit instructions are a permissible administrative practice in investigations | Held: Cash-deposit must be an estimate of future AD liability; Commerce’s method was inconsistent with statutory margin/adjustment procedures |
| Whether Commerce’s use of Cooper’s CVD data created an unlawful double remedy or inconsistent treatment | Cooper: Cooper’s data should not be used to increase its cash-deposit relative to other separate-rate respondents | U.S.: no double remedy; Cooper’s adjustment merely credits its export subsidy rate | Held: Court rejected government’s rationale; statutory scheme ties export-subsidy adjustments to EP/CEP calculations in margins or to rates of individually examined respondents in review, not to the hybrid cash-deposit approach used here |
| Remedy: appropriate relief and timing for remand and implementation | Cooper: order Commerce to set Cooper’s AD cash-deposit equal to other separate-rate respondents | U.S./USW: defend Commerce’s approach | Held: Court set aside cash-deposit rate, ordered expedited remand for Commerce to redetermine the cash-deposit rate consistent with opinion and to advise on timing for CBP instructions; parties may comment on remand determination |
Key Cases Cited
- Changzhou Wujin Fine Chem. Factory Co. v. United States, 701 F.3d 1367 (Fed. Cir. 2012) (APA arbitrary-and-capricious standard applies in AD proceedings)
- Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281 (U.S. 1974) (agency action subject to arbitrary-and-capricious review)
- RHP Bearings Ltd. v. United States, 288 F.3d 1334 (Fed. Cir. 2002) (agency must provide rationale for treating similar parties differently)
- Transactive Corp. v. United States, 91 F.3d 232 (D.C. Cir. 1996) (explaining arbitrary treatment of similar situations)
- Serv. Women’s Action Network v. Sec’y of Veterans Affairs, 815 F.3d 1369 (Fed. Cir. 2016) (agency must justify different standards for similarly situated claimants)