532 F.Supp.3d 1301
Ct. Intl. Trade2021Background
- This is a Rule 56.2 challenge to Commerce’s final results of the 13th administrative review of the antidumping order on chlorinated isocyanurates from China; plaintiffs are Heze Huayi and Juancheng Kangtai.
- Commerce selected Mexico as the primary surrogate country (over Malaysia and others), producing margins of ~32.23% (Heze Huayi) and ~58.07% (Kangtai) in the Final Determination.
- Commerce relied on Mexican GTA import data and the financial statements of Mexican conglomerate CYDSA to calculate surrogate values and financial ratios; petitioners submitted evidence that Aqua-Clor (Mexico) exported chlorinated isos during the POR.
- Plaintiffs argued Commerce should have selected Malaysia (and Malaysian financials/TDM data) instead, and that Commerce’s adjustment of Mexican FOB import values to a CIF basis (adding international freight and marine insurance) was distorting.
- The court reviewed under the substantial-evidence standard and sustained Commerce’s Final Determination in all respects challenged by plaintiffs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Surrogate-country selection (Mexico v. Malaysia) | Malaysia was a suitable surrogate and had better/ more comparable data; Commerce failed to compare properly | Mexico was the only surrogate showing significant production of identical merchandise; Commerce reasonably preferred Mexico | Court upheld Commerce’s Mexico selection as a permissible, reasonable interpretation of the statute |
| Meaning of "significant producer" and "comparable merchandise" | "Significant" should mean ability to influence world trade and requires robust comparison | Term is ambiguous; Commerce has discretion and may reasonably prefer countries producing identical merchandise | Court found Commerce’s interpretation reasonable and entitled to deference (case-by-case analysis) |
| Selection of financial statements (CYDSA v. multiple Malaysian statements) | Malaysian companies supplied multiple, more comparable financials; CYDSA is a conglomerate and distortive | Malaysian statements were unusable or unreliable; CYDSA was contemporaneous, public, and usable; Commerce may use single statement when better alternatives lack reliability | Court sustained Commerce’s choice of CYDSA as best available information given record deficiencies in Malaysian statements |
| Database choice (GTA v. TDM) | Commerce arbitrarily rejected TDM though it previously used TDM; must explain rejecting a previously used source | Once Mexico was properly selected, use of GTA (Mexican import data) is appropriate; data-choice issue is moot after surrogate-country selection | Court held GTA use reasonable and data-choice dispute moot because Mexico was sole appropriate surrogate |
| FOB-to-CIF adjustment of Mexican import values | CIF additions (marine insurance, ocean freight) used outdated/non-specific data and overstated costs; adjustment distorted margins | Commerce followed policy to add international freight/insurance where surrogate import stats are FOB; plaintiffs failed to provide alternatives | Court upheld Commerce’s FOB-to-CIF adjustment as consistent with practice and not shown to be distortive on this record |
Key Cases Cited
- Chevron U.S.A., Inc. v. Nat'l Res. Def. Council, Inc., 467 U.S. 837 (1984) (agency interpretations of ambiguous statutes entitled to deference when reasonable)
- Dorbest Ltd. v. United States, 462 F. Supp. 2d 1262 (CIT 2006) (definition of “best available” and practice re: surrogate selection)
- Jiaxing Bro. Fastener Co. v. United States, 822 F.3d 1289 (Fed. Cir. 2016) (surrogate-value selection criteria and ‘‘best available information’’ factors)
- Seah Steel Vina Corp. v. United States, 950 F.3d 833 (Fed. Cir. 2020) (preference for financial statements of producers of identical merchandise)
- Home Meridian Int’l, Inc. v. United States, 772 F.3d 1289 (Fed. Cir. 2014) (no requirement that surrogate data be perfect; context-dependent best-available analysis)
- Jiangsu Zhongji Lamination Materials Co. v. United States, 396 F. Supp. 3d 1334 (CIT 2019) (discussion of when FOB-to-CIF adjustments may be distortive)
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (1938) (definition of substantial evidence standard)