AD HOC SHRIMP TRADE ACTION COMMITTEE, Plaintiff, v. UNITED STATES, Defendant.
Court No. 15-00279
United States Court of International Trade.
March 16, 2017
Slip Op. 17-27
Kelly, Judge:
In addition, WTTC fails to explain the extent of any inaccuracy caused by Commerce‘s refusal to reconsider its original surrogate value data for steel plate in the original investigation in the light of the new Steel India data from the first administrative review. The mere fact that Commerce uses different data in different proceedings is insufficient for the court to disturb Commerce‘s continued use of the original Steel India data in the original investigation. See Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378, 1387 (Fed. Cir. 2014) (“[E]ach administrative review is a separate exercise of Commerce‘s authority that allows for different conclusions based on different facts in the record.“). In view of the lack of evidence of “material misstatements” by CS Wind or significant inaccuracies, and recognizing the need for finality in administrative proceedings, the court concludes that Commerce did not abuse its discretion in rejecting WTTC‘s unsolicited comment.
Furthermore, WTTC forewent opportunities to challenge the original Steel India data used by Commerce in the original investigation. CS Wind submitted the new Steel India data cited by WTTC in a separate proceeding in January of 2015. Gov‘t Resp. at 17; First AR I & D Memo at 9 n.25. In February of 2015, WTTC filed comments to Commerce‘s Second Remand Results in this matter following the court‘s affirmance in CS Wind II of Commerce‘s use of the original Steel India data, but did not raise the issue of new Steel India data. See generally WTTC Second Remand Results Cmts. Neither did WTTC note any concerns raised by the new data before this court in CS Wind III, nor did it do so before the Federal Circuit in CS Wind IV. It is far too late to resurrect this abandoned issue. Thus, Commerce did not abuse its discretion in rejecting WTTC‘s unsolicited submission in the latest remand proceedings.
CONCLUSION
For the foregoing reasons, Commerce‘s Third Remand Results are sustained. Judgment will enter accordingly.
Kara Marie Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of Counsel on the brief was James H. Ahrens, II, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
OPINION
Kelly, Judge:
This action comes before the court on Plaintiff‘s motion for judgment on the
For the reasons that follow, Commerce‘s final determination is remanded for Commerce to clarify or reconsider its practice for determining whether a surrogate country‘s labor data is aberrational and to clarify or reconsider its use of Bangladeshi labor data in this review, despite record evidence that the data is from an industry affected by alleged labor abuses.
BACKGROUND
In April 2014, Commerce initiated the ninth administrative review of the Order for the period February 1, 2013 through January 31, 2014. See Initiation of Antidumping Duty Administrative Review and Request for Revocation in Part, 79 Fed. Reg. 18,262 (Dep‘t of Commerce Apr. 1, 2014) (initiation notice); see generally Order, 70 Fed. Reg. at 5,152. As Commerce does when conducting an antidumping duty (“ADD“) administrative review of a nonmarket economy (“NME“) country,1 Commerce invited interested parties to comment on the six potential surrogate countries Commerce had identified from which it would select the primary surrogate country and the data to value the factors of production (“FOP“) used to produce the subject imports. Certain Warmwater Shrimp from the Socialist Republic of Vietnam: Request for Surrogate Country and Surrogate Value Comments and Information, PD 272, bar code 3233128-01 (Oct. 3, 2014), ECF No. 60-1.
On March 9, 2015, Commerce published its preliminary results. See Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam, 80 Fed. Reg. 12,441 (Dep‘t Commerce Mar. 9, 2015) (preliminary results of ADD administrative review; 2013-2014) (“Prelim. Results“) and accompanying Decision Memorandum for Preliminary Results of Antidumping Duty Administrative Review, A-552-802, (Mar. 2, 2015), available at http://ia.ita.doc.gov/
On September 15, 2015, Commerce published its final determination. Final Results, 80 Fed. Reg. at 55,328. Commerce continued to use Bangladesh as the primary surrogate country, see id. at 55,330; Final Decision Memo at 46-48, and, over objections by Ad Hoc Shrimp, continued to use Bangladeshi shrimp industry labor wage rate data to value the labor factor of production. Final Decision Memo at 46-55; Antidumping Duty Administrative of Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Surrogate Values for the Final Results, A-552-802, PD 574, bar code 3303461-01 (Sept. 8, 2015), ECF No. 56-15; see Ad Hoc Shrimp Trade Action Committee Case Brief at 1-37, Jun. 8, 2015, PD 563, bar code 3282504-01 (“Ad Hoc Shrimp Admin. Case Br.“).
Plaintiff challenges Commerce‘s decision to use Bangladeshi shrimp industry labor wage rate data to value the labor FOP. It contends that the Bangladeshi data is aberrational as it is influenced by labor abuses, including forced and child labor, throughout the Bangladeshi shrimp industry and is therefore an unreliable basis for valuing the labor FOP. See Pl.‘s Br. 15-35; Pl. Ad Hoc Shrimp Trade Action Committee‘s Reply Mem. R. 56.2 Mot. J. Agency R. 4, 14, Oct. 28, 2016, ECF No. 43 (“Pl.‘s Reply“). Plaintiff argues that the use of this data renders the final results of the review unsupported by substantial evidence. See Pl.‘s Br. 15-35; Pl.‘s Reply 11-21. Defendant United States responds that the court should sustain Commerce‘s determinations in the final results, including Commerce‘s decision to use Bangladeshi
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to
DISCUSSION
Plaintiff argues that Commerce‘s use of labor wage rate data from the Bangladeshi shrimp industry to value the labor FOP is unsupported by substantial evidence, an abuse of discretion, and arbitrary and capricious due to alleged widespread labor abuses in the Bangladeshi shrimp industry that render the data aberrational and unreliable. Pl. Br. 14-38. Defendant responds that Commerce‘s use of the Bangladeshi labor wage rate data to value the labor FOP is supported by substantial evidence and contends that Commerce reasonably determined that the Bangladeshi data is the best available information on the record, as the Bangladeshi data is neither aberrational nor unreliable. Def.‘s Resp. 10. For the reasons that follow, the matter is remanded to Commerce to further explain, or reconsider, its decisions: 1) to forgo any comparison of Bangladeshi labor wage rate data to other labor wage rate data on the record, and 2) to use labor wage rate data from Bangladesh despite record evidence that such data was aberrational because of widespread labor abuses in the Bangladeshi shrimp industry.
Commerce determines the existence of dumping by comparing the normal value of the subject merchandise with the actual or constructed export price of the merchandise.
Commerce has a regulatory preference to value all FOPs using data from a single surrogate country,
For all FOPs, including labor, Commerce seeks the best available information due to its statutory directive and as part of its mandate to determine dumping margins as accurately as possible. Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990). Commerce has acknowledged that aberrational values should not be used. Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,366 (May 19, 1997). Where there is evidence that data is aberrational, Commerce must address that evidence in order to demonstrate that the data is nonetheless the best information available. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951) (noting that “[t]he substantiality of evidence must take into account whatever
Commerce claims that, to assess whether data is aberrational, it does a quantitative assessment. Final Decision Memo at 49. According to Commerce, its “practice in analyzing whether a given value is aberrational or distortive, is to compare the prices for an input from all countries found to be at a level of economic development comparable to the NME whose products are under review from the [period of review] and prior years.” Id. Commerce states that its practice requires that the record “contain specific quantitative evidence showing the value is aberrational.” Id. Nonetheless, Commerce‘s stated practice is not to view data as aberrational simply because the data is of low value or the lowest value. Id. at 48-49 (citing Commerce‘s determination in the eighth administrative review of the Order and Camau Frozen Seafood Processing Import Export Corp. v. United States, 37 CIT —, —, 929 F.Supp.2d 1352, 1356 (2013)).
Commerce‘s selection of Bangladeshi labor wage rate data is not supported by substantial evidence because Commerce failed to (i) quantitatively assess Plaintiff‘s claims that the Bangladeshi labor wage rate data was aberrational, and (ii) address record evidence that the Bangladeshi data was the product of abusive labor practices9 and therefore could not be the best available information to value the merchandise. In this proceeding, Commerce selected Bangladesh as the primary surrogate country. See Final Decision Memo at 46-48. Commerce used labor wage rate data for the Bangladeshi shrimp industry published by the BBS,10 despite Plaintiff‘s claims that the data was aberrational. Id. at 48. Commerce determined that the BBS data was the best information available because it was from the primary surrogate country, id., and emphasized that the BBS data was public, more contemporaneous to the period of review than other data on the record, and specific to the shrimp industry. Id. at 53. Commerce also emphasized that using non-ILO data from the primary surrogate country was consistent with its practice in previous similar circumstances. Id.
Despite Commerce‘s stated practice of quantitatively assessing labor wage rate data to determine whether that data is aberrational, Commerce did not perform a quantitative assessment of the BBS data with the labor wage rate data presented by Plaintiff. Commerce states that “Petitioner has not argued that the Bangladeshi wage rate from BBS is aberrational compared to the other wage data from those countries.” Id. at 50. Yet, as Commerce acknowledged, Plaintiff did place labor wage rate data on
Moreover, even if Commerce did not have sufficient labor wage rate data to comparatively assess the aberration claim, Commerce subsequently indicated that it could not perform a quantitative analysis because of the uniqueness of the labor FOP. See Final Decision Memo at 50. Shortly after stating that its practice was to make a quantitative assessment with respect to claims of aberrational data, id. at 49 (“Our practice in analyzing whether a given value is aberrational or distortive, is to compare the prices for an input from all countries found to be at a level of economic development comparable to the NME whose products are under review from the [period of review] and prior years“), Commerce cites a recent proceeding for the proposition that quantitative cross country comparisons cannot be made for labor wage rate data, stating that,
while there is a strong global relationship between wage rates and GNI, significant variation exists among the wage rates of comparable market economies. There are many socio-economic, political and institutional factors, such as labor laws and policies unrelated to the size or strength of an economy, that cause sig-
nificant variances in wage levels between countries. For these reasons, and because labor is not traded internationally as other commodities are, the variability in labor rates that exists among otherwise economically comparable countries is a characteristic unique to the labor input.
Id. at 50 (quoting Issues and Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules, from the People‘s Republic of China, A-570-979, at 23 (October 9, 2012), available at http://ia.ita.doc.gov/frn/summary/prc/2012-25580-1.pdf (last visited March 13, 2017)). Commerce specifically rejected the notion that a comparison could be made in this case amongst labor wage rate data from different countries. Final Decision Memo at 50 (“Here, the Department does not find that wage data from other countries are necessarily appropriate benchmarks with which to compare the Bangladeshi BBS wage data as there are other variables that affect the labor rates across countries.“). Commerce appears to be saying that Plaintiff must show that a quantitative comparison of labor wage rate data must be made, but that the comparison cannot be made using labor wage rate data from different countries. Logically, Commerce leaves only one path by which a Plaintiff can demonstrate aberration, which is by a comparison of a country‘s current data to that country‘s historic wage rate data. Although Commerce never clearly states its practice, if this is Commerce‘s practice, it is unreasonable in an instance where, such as here, Plaintiff claims that the aberrational labor wage rate data results from widespread labor abuses in the surrogate country. See generally Ad Hoc Shrimp Admin. Case Br. at 8-26. To ask Plaintiff to demonstrate that labor wage rate data is aberrational solely through a historical quantitative analysis within one country when the claim is that there are labor abuses in that one country leading to the low wages makes no sense. As a matter of common sense, it is possible, if not likely, that the abuses complained of have been in existence for some time, making a historical analysis useless. Upon remand Commerce must clarify or reconsider its practice with regard to how parties can demonstrate that labor wage rate data is aberrational where the claim of aberration stems from alleged widespread labor abuses in the industry. If Commerce allows cross country comparisons, then Commerce should address the record data and thus confront the important aspect of the problem presented by the Plaintiff. See Motor Vehicle Mfrs. Ass‘n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 48-49 (1983) (“[A]n agency must cogently explain why it has exercised its discretion in a given manner.“).
Relatedly, Commerce fails to address Plaintiff‘s arguments and record evidence that the low labor wage rate data is the function of abusive labor practices, making Bangladeshi labor wage rate data aberrational, unreliable, and not the best information available. Plaintiff placed on the record extensive evidence of alleged widespread labor abuse within the Bangladeshi shrimp industry. See Ad Hoc Shrimp Comments on Surrogate Values, PD 370-374, bar code 3247044-01 (Dec. 15, 2014) (“Ad Hoc Shrimp Surrogate Value Comments“); Factual Information to Value FOPs; Ad Hoc Shrimp Pre-Prelim. Comments; Ad Hoc Shrimp Admin. Case Br. at 8-26. In addition to its administrative case brief, Plaintiff made three pre-preliminary filings on the record before Commerce to present and support its position that Bangladeshi labor wage rate data is aberrational due to widespread labor abuses in
First, on December 15, 2014, Ad Hoc Shrimp submitted to Commerce publicly available information documenting widespread labor abuses “permeating the entire supply chain of the Bangladesh shrimp industry.” Ad Hoc Shrimp Surrogate Value Comments at 2. In this filing, Ad Hoc Shrimp presented evidence, published by a myriad of news, governmental, intergovernmental, and NGO sources detailing exploitive labor conditions in the Bangladeshi shrimp industry, including forced and child labor and conditions with a logical link to wage rates, such as significant underpayment, excessive working hours, non-payment for overtime, and unequal payment for women. See id.
Second, on February 2, 2015, Ad Hoc Shrimp submitted to Commerce information to assist Commerce in valuing the factors of production in this review. See Factual Information to Value FOPs. In this filing, Ad Hoc Shrimp provided additional information and recent publications regarding the conditions of the Bangladeshi shrimp industry and ILO shrimp industry labor wage rate data for Guyana, India, Nicaragua, and Philippines, “each a significant producer and exporter of shrimp, [which] provide a nonaberrational basis by which to value the labor FOP for the purposes of this proceeding.” Id. at 6.
Finally, on February 19, 2015, Ad Hoc Shrimp submitted pre-preliminary comments to Commerce, contending that labor wage rate data for the shrimp industry in Bangladesh, which Commerce had used in prior administrative reviews of the Order, are aberrational and should not be used by Commerce as the surrogate values by which to value the labor factor of production for mandatory respondents in this review. See Ad Hoc Shrimp Pre-Prelim. Comments at 2-4. Ad Hoc Shrimp stated that
The record of this review does not include any of the wage rate data related to Bangladesh previously relied upon by the Department. Thus, unless the Department independently places such information on the record of this proceeding, there is no basis upon which to value the labor FOP with Bangladeshi data. Should the Department elect to exercise discretion to supplement the record of this review with Bangladeshi wage rate information—rather than utilize wage rate information currently on the record of this proceeding—the evidence already on the record of this proceeding requires the agency to confront a colorable claim that data that the Department would be considering is aberrational. Accordingly, the Department would be obligated to examine these data and provide a reasoned explanation as to why the data chosen is reliable and non-distortive. This obligation is all the more pertinent in a proceeding where non-aberrational values are already on the record of the review.
Id. at 4. As evidenced by these filings, Plaintiff anticipated that Commerce might consider Bangladeshi labor wage rate data
Thereafter, in its case brief before Commerce following publication of the preliminary results, Ad Hoc Shrimp objected to Commerce‘s use of the BBS labor wage rate data and again documented allegations of widespread labor abuses including forced and child labor in the Bangladeshi shrimp industry. Ad Hoc Shrimp Admin. Case Br. at 8-26. Ad Hoc Shrimp cited and included excerpts from the hundreds of pages of reports and articles it previously placed on the record detailing abuses, including forced and child labor, throughout the industry. For example, Ad Hoc Shrimp excerpted a report detailing an interview with a shrimp processing worker who reported having been “forced to work day and night without any break,” for up to 48 hour shifts, while pregnant during peak processing season. Id. at 17 (internal citations and quotation omitted). Ad Hoc Shrimp highlighted another report, based on 385 interviews of shrimp industry workers in 2009, detailing instances of induced indebtedness, wage withholding, exposure to health hazards, and child labor. Id. at 18. This source emphasized the “grossly unequal pay [for women] and rampant sexual abuse” throughout the industry. Id. at 20. Another report stated that “[m]any workers said children younger than 14 are working in their factories.” Id. at 21. This record evidence included reports from the United States Trade Representative, the ILO, various international NGOs, and various media sources.11
Commerce simply did not respond to this evidence. It is clear from Ad Hoc Shrimp‘s submissions that it claimed not only that the Bangladeshi labor wage rate data was the lowest on the record but that it was the lowest because of these widespread labor abuses and therefore that the data could not be used as a surrogate for Vietnamese labor wage rate data. See Ad Hoc Shrimp Admin. Case Br. at 26 (“The record of this proceeding ... demonstrates that such conditions [in the Bangladeshi shrimp industry] are not only different from major shrimp producing countries at similar levels of economic development, they are also different from conditions in which Vietnam‘s shrimp industry operates.“); Ad Hoc Shrimp Surrogate Value Comments at 8-9 (noting that the circumstances in the Bangladeshi shrimp industry “are distinguishable from those that are present in the labor market in Vietnam.... [I]n Vietnam, labor costs continue to rise, as the Government grants greater and greater levels of protection to Vietnam‘s working force, including social security and safety measures. No similar trend is apparent in Bangladesh.“).
Instead of addressing these claims, Commerce argued that prior opinions of this Court had affirmed its prior findings that simply having the lowest value data is not sufficient to show that data is unreliable. Final Decision Memo at 49. Commerce‘s explanation is nonresponsive. Commerce‘s obligation to secure the best information is meant to foster accuracy. Shakeproof Assembly Components, 268 F.3d at 1382. Evidence that the labor wage rates do not reflect the true cost of labor
Further, in enacting
Defendant contends that Plaintiff insufficiently made its argument to Commerce, because Plaintiff “never actually tied any of that data, such as the alleged labor abuse practices, to why the Bangladeshi labor rate is the way it is.” Oral Argument 00:20:17-00:20:27; Def.‘s Resp. 18. This argument is unpersuasive. As discussed above, through a series of filings, even prior to the preliminary determination, Plaintiff stressed to Commerce its concerns with the potential use of Bangladeshi labor wage rate data. Specifically, Plaintiff sought to emphasize that Bangladeshi labor wage rate data would not only be low value data but would be low value data because of serious and ongoing labor abuses in the Bangladeshi shrimp industry. See, e.g., Ad Hoc Shrimp Surrogate Value Comments at 8 (highlighting evidence to demonstrate that the “oppressive conditions that exist for shrimp processing workers in Bangladesh [result] in an aberrational labor wage rate that would only be fairly representative of conditions in countries with shrimp processing sectors that tolerate similar levels of grotesque human rights abuses.“); Ad Hoc Shrimp Pre-Prelim. Comments at 3 (noting that Ad Hoc Shrimp “present[ed] specific record evidence demonstrating both that (1) labor values reported in Bangladesh are aberrationally low; and (2) specific reasons why such values are aberrationally low and, as such, cannot constitute the best available information to determine the labor FOP.“). Commerce was clearly able to connect the dots between Plaintiff‘s evidence and its argument against using Bangladeshi data, as in its preliminary results, Commerce stated that Ad Hoc Shrimp “contends that the Department cannot select Bangladesh as the primary surrogate country because of alleged labor abuses and alleged oppressive conditions in the shrimp industry [that] result in [an] aberrational labor
Commerce contends that it “has no authority, under the antidumping duty statute, to make socio-political determinations, or analyze socio-political factors and their potential impact on the valuation of [FOPs].” Final Decision Memo at 55. Commerce further specified that it does not base surrogate value determinations “on any criteria other than specificity, contemporaneity, whether the value is a broad market average, publicly available, or tax/duty exclusive.” Id. at 54-55. According to Commerce, socio-political factors are inapposite to its determination under
Commerce claims that Plaintiff is “confusing the question of labor conditions with the question of data accuracy.” Final Decision Memo at 52. Commerce reiterates that its practice is to “conside[r] several factors including whether the [surrogate value] is publicly available, contemporaneous with the [period of review], represents a broad market average, is tax- and duty-exclusive, and is specific to the input,” and argues that its mandate “does not include remediation of socio-political or socio-economic issues.” Id. Nonetheless, it is also Commerce‘s stated practice not to use aberrational data. Antidumping Duties; Countervailing Duties, 62 Fed. Reg. at 27,366. Plaintiff is not arguing for Commerce to remediate the labor conditions in Bangladesh; Plaintiff is simply arguing that Commerce consider whether those labor conditions and the fact that the Bangladeshi labor wage rate data is the lowest on the record demonstrate that the data is aberrational.
Commerce states that Plaintiff must provide “specific quantitative evidence that these socio-political issues in Bangladesh had a distortive impact on the BBS data on the record.” Final Decision Memo at 52. However, as stated above, if Commerce will not consider cross country labor wage rate data comparisons, as Commerce indicated in its Final Decision Memo, id. at 50 (“the Department does not find that wage data from other countries are necessarily appropriate benchmarks with which to compare the Bangladeshi BBS wage data
CONCLUSION
In accordance with the foregoing, it is hereby
ORDERED that Commerce‘s determination is remanded for further consideration consistent with this opinion. Specifically, upon remand, Commerce must:
- Clarify or reconsider its practice with regard to how Plaintiff can demonstrate quantitatively that data is aberrational given its claims stem from alleged systemic labor abuses; and
- Explain why the Bangladeshi wage rate data is not aberrational in light of record evidence of systemic labor abuses; or if the data is aberrational why, it is nonetheless the best available information, or reconsider its determination that the Bangladeshi data is the best available information; and it is further
ORDERED that Commerce shall file its remand determination with the court within 45 days of this date; and it is further
ORDERED that Plaintiff shall have 30 days thereafter to file comments on the remand determination; and it is further
ORDERED that Defendant shall have 15 days thereafter to file a reply to comments on the remand determination.
Consol. Court No. 14-00263
United States Court of International Trade.
Dated: March 16, 2017
Slip Op. 17-28