Zhaoqing Tifo New Fibre Co. v. United States
2017 CIT 118
| Ct. Intl. Trade | 2017Background
- Zhaoqing Tifo, a Chinese polyester staple fiber exporter, challenged Commerce’s Final Results for the 2010–2011 administrative review alleging Commerce double-counted energy costs (embedded in surrogate financial ratios and again as a coal FOP), inflating its dumping margin.
- Commerce’s Final Determination used Indonesian producer P.T. Tifico’s financial statements to derive surrogate financial ratios, placed electricity and water into overhead (removing them from the FOP database) but left coal in the FOP database; Zhaoqing Tifo argued that left coal double-counted.
- The Court (Zhaoqing Tifo I) remanded, directing Commerce to analyze whether energy costs are embedded in the surrogate ratios derived from P.T. Tifico and whether inclusion of coal in the FOP database caused double-counting; the remand did not direct Commerce to change its selection of financial statements.
- On remand Commerce reopened the selection issue, switched back to P.T. Asia Pacific’s more detailed financials (which break out energy), excluded energy from surrogate ratios, valued energy separately in the FOP database, and raised Zhaoqing Tifo’s margin from 9.98% to 25.56%.
- Zhaoqing Tifo argued Commerce exceeded the scope of both the complaint (no timely challenge to selection of financial statements) and the remand; the Government and intervenor argued Commerce acted within remand scope because the issues are intertwined.
- The Court concluded Commerce exceeded the remand’s scope by reopening the settled selection-of-financial-statements issue and therefore ordered a second remand requiring Commerce to address the double-counting question using P.T. Tifico’s statements and to explain its reasoning with record support.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce could revisit selection of financial statements on remand when the complaint did not challenge that selection | Zhaoqing: selection was final; no party timely challenged it; reopening violates finality and is beyond the complaint/scope of litigation | Gov/Intervenor: remand language and the nature of the double-counting issue permitted reexamination; issues are intertwined | Court: plaintiff correct — Commerce exceeded scope; selection was settled and not before the court |
| Whether the remand instructions authorized Commerce to reselect financial statements | Zhaoqing: remand required analysis limited to P.T. Tifico statements and whether coal inclusion double-counted energy; did not permit re-selection | Gov/Intervenor: remand was not limited; Commerce may fully analyze and collect data on contested issues | Court: remand required Commerce to analyze double-counting with P.T. Tifico’s statements; reopening selection exceeded remand |
| Whether Commerce’s change on remand was a permissible in-depth analysis to avoid double-counting | Zhaoqing: Commerce should have either shown energy not embedded in P.T. Tifico ratios or removed coal from FOP; switching records is impermissible here | Gov/Intervenor: switching to more detailed statements was reasonable to avoid double-counting and permissible on remand | Court: Commerce could have used other means (explain, reopen record re: P.T. Tifico, or remove coal); but switching statements exceeded remand and was not allowed |
| Remedy: appropriate judicial response to Commerce’s remand results | Zhaoqing: vacate and remand for Commerce to analyze double-counting using P.T. Tifico records and explain decision | Gov/Intervenor: sustain remand results or defer to Commerce’s remedial choice | Court: second remand ordered — Commerce must reconsider coal inclusion using P.T. Tifico’s statements and provide reasoned, record-supported explanation |
Key Cases Cited
- DuPont Teijin Films China Ltd. v. United States, 7 F. Supp. 3d 1338 (Ct. Int’l Trade 2014) (double counting should be avoided)
- Geum Poong Corp. v. United States, 193 F. Supp. 2d 1363 (Ct. Int’l Trade 2002) (remanding for reconsideration to avoid double counting of profit rates)
- Holmes Prods. Corp. v. United States, 795 F. Supp. 1205 (Ct. Int’l Trade 1992) (double-counting is to be avoided)
- Changzhou Wujin Fine Chem. Factory Co. v. United States, 701 F.3d 1367 (Fed. Cir. 2012) (trial court’s scope-of-remand determinations entitled to great deference)
- NMB Singapore Ltd. v. United States, 557 F.3d 1316 (Fed. Cir. 2009) (standard for reviewing Commerce remand determinations)
- Hangzhou Yingqing Material Co. v. United States, 195 F. Supp. 3d 1299 (Ct. Int’l Trade 2016) (policy of avoiding double-counting in surrogate financial ratios)