Weishan Hongda Aquatic Food Co., Ltd. v. United States, 2017 CIT 145

Background

Plaintiffs (Weishan, China Kingdom, Ocean Flavor, Deyan) challenged Commerce’s 2013–2014 final antidumping and new‑shipper results for freshwater crawfish tail meat from the PRC, contesting Commerce’s use of a South African annual report (the “Oceana Report”) to derive surrogate financial ratios instead of Thai financial statements.
Commerce initially relied on 2012 Thai financial statements in the preliminary results but switched in the final results to the Oceana Report after finding the Thai statements showed evidence of countervailable export subsidies and because the Oceana Report was contemporaneous and from a country Commerce found economically comparable and a significant producer of comparable merchandise.
Plaintiffs argued the Oceana Report was insufficiently disaggregated (a basket "cost of sales" line) and that Commerce failed adequately to compare Thai vs. South African data or explain that the Oceana Report supplied necessary detail. Plaintiffs also raised other technical allocation and comparability critiques to the court that were not fully presented to Commerce.
The Court remanded for Commerce to reconsider whether South Africa is a “significant producer”; Commerce reaffirmed that finding on remand, and Plaintiffs then withdrew their challenge to that particular determination but preserved other challenges to Commerce’s reliance on Oceana.
The Court sustained Commerce’s Final Results (as amended) — holding that Commerce’s decision to use the Oceana Report to calculate financial ratios was supported by substantial evidence and that many Plaintiff arguments were unexhausted administratively.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce reasonably relied on the Oceana Report (South Africa) to value surrogate financial ratios instead of Thai financials	Oceana is too aggregated ("cost of sales" basket), lacks disaggregation for raw materials/labor, may misallocate overhead, and Oceana’s business is not comparable to Chinese crawfish producers; Thai statements are "vastly superior."	Commerce reasonably rejected Thai statements because they showed evidence of countervailable subsidies; Oceana is contemporaneous and Commerce could segregate necessary costs from Oceana to compute ratios.	Held: Commerce’s reliance on Oceana was supported by substantial evidence. Commerce explained it could allocate materials, labor, and energy from Oceana and that subsidy‑taint on Thai statements justified using Oceana.
Whether Plaintiffs preserved (exhausted) all their arguments about Oceana before Commerce	Plaintiffs contend Commerce failed to compare statements adequately and that additional technical defects defeat Oceana’s use.	Government: parties must exhaust arguments at the agency so Commerce has an opportunity to address them.	Held: Many of Plaintiffs’ detailed allocation and comparability arguments were not raised before Commerce and thus are exhausted; the court declined to consider those unexhausted claims.
Whether separate but aligned administrative and new‑shipper review records affect exhaustion	Plaintiffs had rebuttal briefing in the new‑shipper review but not in the administrative review; they argue alignment means arguments were preserved.	CPA argued administrative‑review Plaintiffs failed to exhaust because they did not file briefs on that segment.	Held: Court did not decide exhaustions across aligned records because outcome on merits made it unnecessary; it advised Commerce to clarify procedures when aligning segments.
Whether South Africa is a "significant producer of comparable merchandise" (issue remanded)	Plaintiffs originally disputed South Africa’s significance.	Commerce reexamined and reaffirmed that South Africa is a significant producer based on export revenue data.	Held: On remand Commerce’s finding was affirmed; Plaintiffs then abandoned this challenge.

Key Cases Cited

Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 (Fed. Cir. 2003) (defines substantial‑evidence standard)
Boomerang Tube LLC v. United States, 856 F.3d 908 (Fed. Cir. 2017) (affirms exhaustion requirement for raising issues to the agency)
CS Wind Vietnam Co. v. United States, 832 F.3d 1367 (Fed. Cir. 2016) (sustains Commerce’s rejection of potentially subsidized market prices)
Dorbest Ltd. v. United States, 604 F.3d 1363 (Fed. Cir. 2010) (explains requirement to present arguments in agency case and rebuttal briefs)
NMB Sing. Ltd. v. United States, 557 F.3d 1316 (Fed. Cir. 2009) (agency must explain basis of decision sufficiently so path of reasoning is discernable)