CALGON CARBON CORPORATION, and Cabot Norit Americas, Inc., Plaintiffs, v. UNITED STATES, Defendant, Albemarle Corporation, Ningxia Huahui Activated Carbon Co., Ltd., Ningxia Guanghua Cherishmet Activated Carbon Company, Ltd., Carbon Activated Corporation, Jacobi Carbons AB, and Jacobi Carbons, Inc., Defendant-Intervenors.
Consol. Court No. 14-00326
United States Court of International Trade
January 20, 2016
Slip Op. 16-4
Restani, Judge
As to Plaintiffs’ preferred allocation methodology, Commerce verified that RFAI assigned lot numbers to bulk shipments of ferroalloy (not just ferrosilicon) from the third country to the United States and generated new lot numbers once the ferroalloy products (including ferrosilicon) reached the United States port, such that the lot numbers created in the third country are no longer relevant for the final sale to the U.S. customer. Consequently, as Commerce explained, the four movement expenses at issue “do not correspond, by discrete lot number, to the quantity of merchandise that shipped from the intermediary warehouse[e] during the [period of investigation].” Decision Memorandum at 36, 41. Put more simply, RFAI‘s books and records did not tie these four movement expenses to the quantity shipped during the period of investigation. Commerce also explained that Plaintiffs’ preferred methodology would itself cause inaccuracies and distortions because RFAI shipped its ferrosilicon along with non-subject ferroalloy products. Decision Memorandum at 41. Because Plaintiffs’ methodology did not tie to RFAI‘s books and records and had the potential to cause inaccuracies and distortions, Commerce reasonably concluded that RFAI‘s allocation was “as specific as RFAI was able to provide.” See id. at 36-37, 41-42.
The court therefore sustains Commerce‘s decision to accept RFAI‘s movement expense allocation methodology.
III. Conclusion
In accordance with the foregoing, it is hereby
ORDERED that Commerce‘s Final Determination is sustained with respect to the date of sale, model matching, and inbound movement expense issues; it is further
ORDERED that this action is remanded to Commerce to clarify or reconsider, as appropriate, the warehousing expense and imputed credit expense issues; it is further
ORDERED that Commerce shall file its remand results on or before March 14, 2016; and it is further
ORDERED that, if applicable, the parties shall file a proposed scheduling order with page limits for comments on the remand results no later than seven days after Commerce files its remand results with the court.
John M. Herrmann II, Kelley Drye & Warren, LLP, of Washington, DC, argued for plaintiffs. With him on the brief were R. Alan Luberda and David A. Hartquist.
Melissa M. Devine, 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 Claudia Burke, Assistant Director. Of counsel on the brief was Michael T. Gagain, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
Jeffrey S. Grimson, Mowry & Grimson, PLLC, of Washington, DC, argued for defendant-intervenors Albemarle Corporation and Ningxia Huahui Activated Carbon Co., Ltd. With him on the brief were Kristin H. Mowry, Jill A. Cramer, Sarah M. Wyss, and Daniel R. Wilson.
Francis J. Sailer, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, argued for defendant-intervenor Ningxia Guanghua Cherishmet Activated Carbon Company, Ltd. With him on brief were Kavita Mohan and Dharmendra N. Choudhary.
Gregory S. Menegaz, deKieffer & Horgan PLLC, of Washington, DC, argued for defendant-intervenor Carbon Activated
Claudia D. Hartleben, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, argued for defendant-intervenors Jacobi Carbons AB and Jacobi Carbons, Inc. With her on brief was Daniel L. Porter.
OPINION
Restani, Judge:
This action challenges the Department of Commerce‘s (“Commerce“) final results of the sixth administrative review of the antidumping (“AD“) duty order on certain activated carbon from the People‘s Republic of China (“PRC“), covering the period of review (“POR“) of April 1, 2012 through March 31, 2013. Certain Activated Carbon from the People‘s Republic of China: Final Results of Antidumping Duty Administrative Review; 2012-2013, 79 Fed. Reg. 70,163, 70,163 (Dep‘t Commerce Nov. 25, 2014) (“Final Results“). Before the court is a motion for judgment on the agency record pursuant to U.S. Court of International Trade (“USCIT” or “CIT“) Rule 56.2 filed by Calgon Carbon Corporation (“Calgon“) and Cabot Norit Americas, Inc. (“Cabot“) (collectively, “petitioners” or “domestic industry“). Pls.’ Mot. for J. on the Agency R., ECF No. 52. Also before the court is a motion for judgment on the agency record pursuant to USCIT Rule 56.2 filed by importer Carbon Activated Corporation (“CAC“). Pl.‘s Mot. for J. on the Agency R., ECF No. 53. For the reasons stated below, Commerce‘s Final Results are remanded.
BACKGROUND
Commerce initiated the sixth administrative review of certain activated carbon from the PRC, which it considers a nonmarket economy (“NME“). Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 78 Fed. Reg. 33,052, 33,054-56 (Dep‘t Commerce June 3, 2013) (“Initiation Notice“). In the Initiation Notice, Commerce stated its policy that, when dealing with an NME, Commerce “begins with a rebuttable presumption that all companies within the country are subject to government control ... [and] assign[s] all exporters in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate.” Id. at 33,053. Commerce also clarified that all companies seeking separate rate status “must complete, as appropriate, either a separate rate application or certification,” and Commerce included Shanxi DMD Corporation (“Shanxi DMD“) as one of the firms required to follow this procedure. Id. at 33,053, 33,056. Commerce limited its review to the two largest exporters/producers by volume of certain activated carbon, Jacobi Carbons AB (“Jacobi“) and Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd. (“Cherishmet“), basing its selection on U.S. Customs and Border Protection (“Customs“) entry data. Decision Memorandum for the Preliminary Results of Antidumping Duty Administrative Review: Certain Activated Carbon from the People‘s Republic of China at 3-4, A-570-904, (May 16, 2014), available at http://enforcement.trade.gov/frn/summary/prc/2014-11892-1.pdf (last visited Jan. 6, 2016) (“Preliminary I & D Memo“).
In calculating a dumping margin for products from an NME country, Commerce compares the goods’ normal value,1 quantities and in the ordinary course of trade and, to the extent practicable, at the same level of trade as the export price or constructed export price,
On May 22, 2014, Commerce published its preliminary results. Certain Activated Carbon from the People‘s Republic of China: Preliminary Results of Antidumping Duty Administrative Review; 2012-2013, 79 Fed. Reg. 29,419, 29,419 (Dep‘t Commerce May 22, 2014) (“Preliminary Results“). In calculating normal value, Commerce selected the Philippines as the primary surrogate country.3 Preliminary I & D Memo at 17. Commerce relied on Global Trade Atlas (“GTA“) data to value certain FOPs, disregarding prices from NME countries, prices that may have been dumped or subsidized, and imports originating from unspecified countries. Id. at 24. Based on this methodology, Commerce calculated a surrogate value (“SV“) of $1.19 per kilogram for anthracite coal (the main input), relying on contemporaneous with the present sixth POR (“POR6-contemporaneous“) GTA data from the Philippines under HTS number 2701.11 (“Anthracite Coal, Whether or and “at a time reasonably corresponding to the time of the sale used to determine the export price or constructed export price.” See
Not Pulverized, But Not Agglomerated“). Surrogate Values for the Preliminary Results at 4, PD 266-67 (May 16, 2014) (“Preliminary SV Memo“); see also Pet‘rs’ Surrogate Values for the Preliminary Results at Ex. 2A, PD 161-65 (Nov. 20, 2013) (“Pet‘rs SV Cmts.“).
In the Final Results, Commerce departed from its decision in the Preliminary Results to value anthracite coal at $1.19 per kilogram based on POR6-contemporaneous Philippine GTA data. Certain Activated Carbon from the People‘s Republic of China: Issues and Decision Memorandum for the Final Results of the Sixth Antidumping Duty Administrative Review at 37-38, A-570-904, (Nov. 18, 2014), available at http://enforcement.trade.gov/frn/summary/prc/2014-27926-1.pdf (last visited Jan. 6, 2016) (“I & D Memo“). Instead, Commerce relied on the SV derived from Philippine GTA data used in the fifth administrative review, which is data that was contemporaneous with the fifth POR (“POR5-contemporaneous“), rather than on an SV derived from data contemporaneous with the present POR. Id. Commerce noted that “no parties contested that SV in the previous review.” Id. The new SV relied upon in the Final Results was $0.05 per kilogram, Surrogate Values for the Final Results at Attach. 1, PD 314 (Nov. 18, 2014), which was then “inflated to the current POR using Philippine producer price index information[,]” I & D Memo at 38. In so doing, Commerce rejected petitioners’ arguments that the POR6-contemporaneous Philippine GTA purchaser for exportation to the United States.”
As a result, on November 25, 2014, Commerce published its Final Results, assigning AD duty rates of $0.04 per kilogram to Jacobi, $0.04 per kilogram to Cherishmet, $0.04 per kilogram to exporters separate from the PRC-wide entity (the “all-others rate“), and $2.42 per kilogram to the PRC-wide entity: Final Results, 79 Fed. Reg. at 70,165. Those rates represented a change from the Preliminary Results, in which Commerce assigned AD duty rates of $3.77 per kilogram to Jacobi, $2.05 per kilogram to Cherishmet, $3.13 per kilogram as the all-others rate, and $2.42 per kilogram to the PRC-wide entity.4 Preliminary Results, 79 Fed. Reg. at 29,420. With regard to the separate rate status of certain respondents, Commerce stated in the Final Results that it “ha[d] received no comments or argument since the issuance of the Preliminary Results that provides a basis for reconsideration.” Id. at 70,164. As a result, it continued to find that “[t]he PRC-wide entity includes Shanxi DMD Corporation and Tangshan Solid Carbon Co., Ltd.” Id. at 70,164 n.26; see also Preliminary Results, 79 Fed. Reg. at 29,420 n.5.
In the present appeal, CAC challenges Commerce‘s Final Results on several grounds. First, CAC argues that Commerce‘s policy in AD proceedings to presume that all exporters in the PRC are under state control is arbitrary and capricious in the light of its treatment of the PRC in countervailing duty (“CVD“) cases and that Commerce‘s presumption of state control was unsupported by substantial evidence in this review. Consol. Pl. Carbon Activated Corp. Mem. in Supp. of Mot. for J. on the Agency R. 8-14, ECF No. 53-2 (“CAC Br.“). Second, CAC challenges the AD duty rate, which was the PRC-wide rate, assigned to Shanxi DMD as not supported by substantial evidence because Shanxi DMD is entitled to the all-others rate.5 Id. at 14-16. Third, CAC argues
The government and petitioners respond that CAC failed to exhaust the entirety of its arguments at the administrative level. Def.‘s Opp‘n to Mots. For J. upon the Agency R. 11-23, ECF No. 66 (“Gov.Br.“); Domestic Industry‘s Resp. in Opp‘n to Consol. Pl.‘s Mot. for J. on the Agency R. 1-7, ECF No. 65 (“Pet‘rs Resp. Br.“). CAC contends that it cannot be charged with failure to exhaust its arguments because of the change to the all-others rate from $3.13 per kilogram in the Preliminary Results, which would have been adverse for CAC, to $0.04 per kilogram in the Final Results, which would have been advantageous. Reply of Carbon Activated Corp. 1-6, ECF No. 79 (“CAC Reply Br.“).
Petitioners challenge Commerce‘s Final Results based on Commerce‘s selection of the SV derived from POR5-contemporaneous Philippine GTA data for anthracite coal, arguing that the resulting value is aberrantly low and that the POR6-contemporaneous Philippine GTA data or data from another economically comparable country should have been used. Mem. of Law in Supp. of Pls.’ Mot. for J. on the Agency R. 18-37, ECF No. 52-1 (“Pet‘rs Br.“). The government, supported by defendant-intervenors, responds that the selection of the SV for anthracite coal derived from POR5-contemporaneous Philippine GTA data was proper because that resulting value is not aberrational, the POR6-contemporaneous Philippine GTA data were not specific to the anthracite coal used by the mandatory respondents, and the decision aligned with Commerce‘s policy of selecting SVs from one primary surrogate country. Gov. Br. at 28-42; Def.-Intvnr. Jacobi Carbons’ Resp. to Calgon Carbon Corp. and Cabot Norit Americas’ Br. in Supp. of Their Mot. for J. on the Agency R. 1-13, ECF No. 67 (“Jacobi Resp. Br.“); Cherishmet‘s Opp‘n to Pls.’ Rule 56.2 Mot. for J. upon the Agency R. 9-30, ECF No. 68 (“Cherishmet Resp. Br.“); Resp. Br. of Def.-Intvnrs. in Opp‘n to Pls.’ Rule 56.2 Mot. for J. upon the Agency R. 12-26, 30-37, ECF No. 64 (“Albemarle and Huahui Resp. Br.“).
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to
DISCUSSION
I. Exhaustion of Administrative Remedies and CAC‘s Appeal
The government and petitioners argue that CAC was required to exhaust the entirety of its arguments at the administrative level, failed to do so, and that none of the recognized exceptions to the exhaustion requirement excuse CAC‘s actions in this case. Gov. Br. at 9-26; Pet‘rs Resp. Br. at 1-7.7 The government and different, its argument is underdeveloped and unexplained.
Congress has granted the court discretion to “where appropriate, require the exhaustion of administrative remedies.”
The government incorrectly believes that CAC had a full opportunity to challenge the PRC-wide rate at the administrative level because the rate was The argument is without merit. As CAC correctly notes, before this court exhaustion is a defense that should be raised by the defendant. CAC Reply Br. at 12-13. The government‘s citation, to a situation where an appellant at unchanged from the Preliminary Results to the Final Results. See Gov. Br. at 19. The government looks to the PRC-wide rate in a vacuum and fails to consider the actual context (i.e., the other rates) in which CAC determined whether it was appropriate for it to challenge the rate assigned in the Preliminary Results. It was reasonable for CAC to rely on the rates assigned in the Preliminary Results to determine what arguments to include in its administrative case brief. See Qingdao Taifa Grp. Co. v. United States, 33 C.I.T. 1090, 1093, 637 F. Supp. 2d 1231, 1236-37 (2009). For instance, in Qingdao Taifa, Taifa‘s rate increased from 3.82% in the preliminary results to 383.60% in the final results, because Commerce applied adverse facts available. Id. The court held that Taifa did not fail to exhaust because it was able to rely on Commerce‘s preliminary results. See id. at 1092-93, 637 F. Supp. 2d at 1236-37 (“Taifa is not required to predict that Commerce would accept other parties’ arguments and change its decision.“). There is no support for the contention that an interested party in CAC‘s position is required to challenge the application of a more favorable rate and make arguments that it should have a less favorable rate. Indeed, CAC was not required to anticipate that Commerce would accept certain arguments resulting in a drastic decrease in other companies’ rates. See Boomerang Tube LLC v. United States, 125 F. Supp. 3d 1357, 1362-63 (C.I.T. 2015) (refusing “to conclude that plaintiffs should have predicted that Commerce might accept [an interested party‘s constructed value profit argument] ... and should have raised, in their case the Court of Appeals for the Federal Circuit failed to raise a new exception to the exhaustion doctrine in its reply brief, is not applicable here. See Corus Staal, 502 F.3d at 1378 n. 4.
CIT Rule 56.2 states that “the briefs submitted on the motion ... [including those] supporting the agency determination, must include ... the issues of law presented together with the reasons for ... supporting the administrative determination ... [and] must include the authorities relied on and the conclusions of law deemed warranted by the authorities.” USCIT R. 56.2(c)(1)-(2). The government and petitioners, in their response briefs, chose not to address the merits of CAC‘s arguments, which were raised by CAC in its opening brief supporting its CIT Rule 56.2 motion. Any argument, therefore, defending Commerce‘s selection of a $2.42 per kilogram rate to Shanxi DMD, is waived, as CAC claimed in its reply brief. See United States v. Great Am. Ins. Co. of New York, 738 F.3d 1320, 1328 (Fed. Cir. 2013) (“It is well established that arguments that are not appropriately developed in a party‘s briefing may be deemed waived.“); cf. Abogados v. AT & T, Inc., 223 F.3d 932, 937 (9th Cir. 2000) (affirming a grant of summary judgment based on waiver and recognizing that the non-moving party failed to make certain arguments in its opposition brief). The government and petitioners had ample opportunity to address the arguments CAC made in its opening brief, but they made a decision not to do so.9 It would not be proper to allow these parties, after full briefing and oral argument, the belated opportunity to defend their position or address CAC‘s arguments on the merits. Further, Commerce and petitioners do not seem to desire that
Here, CAC‘s opening brief successfully argues that the presumption of state control was unsupported by substantial evidence in this case, pointing to Commerce‘s inconsistent practice in CVD cases involving the PRC and an internal Commerce memorandum noting in part that “market forces now determine the prices of more than 90 percent of products traded in China.” CAC Br. at 8-14 (quoting Countervailing Duty Investigation of Coated Free Sheet Paper from the People‘s Republic of China—Whether the Analytical Elements of the Georgetown Steel Opinion are Applicable to China‘s Present-Day Economy at 5, C-570-907, (Mar. 29, 2007), available at http://enforcement.trade.gov/download/nme-sep-rates/prc-cfsp/china-cfs-georgetown-applicability.pdf (last visited Jan. 7, 2016)). The government and petitioners, alternatively, have not provided the court with any merits-based argument, legal or factual, to review, thereby abandoning any such arguments. The record is devoid of any evidence, let alone substantial evidence, supporting Commerce‘s presumption of state control in this case, and the government further does not even attempt to remedy this deficiency by requesting a remand to supplement the record or to address CAC‘s claims. Thus, not only did CAC not have an opportunity to exhaust administrative remedies, but also CAC is correct that Commerce‘s Final Results are not supported by substantial evidence. This is not to say that, in a future review or in another case, Commerce could not make the proper showing to justify its continued presumption of state control even in contemporary circumstances, such as by placing the necessary evidence on the record or offering appropriate argument. The government simply chose not to seek the opportunity to do so here.10
Commerce, on remand, shall assign Shanxi DMD the all-others rate. Such treatment of Shanxi DMD is not inequitable or unreasonable, given that in the fifth and seventh reviews (i.e., the reviews immediately preceding and following the present review) Shanxi DMD was treated as separate from the PRC-wide entity and was assigned the all-others rate.11 See Certain Activated Carbon from the People‘s Republic of China: Final Results of Antidumping Duty Administrative Review; 2013-2014, 80 Fed. Reg. 61,172, 61,174 (Dep‘t Commerce Oct. 9, 2015); Certain Activated Carbon from the People‘s
II. Commerce‘s Selection of a Surrogate Value for Anthracite Coal
Petitioners challenge Commerce‘s selection of the $0.05 per kilogram value for anthracite coal derived from the POR5-contemporaneous Philippine GTA data, arguing that Commerce improperly disregarded the $1.19 per kilogram value derived from POR6-contemporaneous Philippine GTA data as not product specific, that Commerce should have used a contemporaneous value, and that the $0.05 per kilogram value was aberrational. Pet‘rs Br. 18-37. The government and defendant-intervenors refute each of petitioner‘s arguments, contending that Commerce properly rejected the value derived from the POR6-contemporaneous Philippine GTA data and selected the value derived from POR5-contemporaneous Philippine GTA data. Gov. Br. at 28-42; Jacobi Resp. Br. at 2-13; Cherishmet Resp. Br. at 10-30; Albemarle and Huahui at 12-37.
When valuing FOPs, Commerce is required to use the “best available information” from, to the extent possible, “one or more” surrogate ME countries.
Commerce‘s practice is, to the extent practicable, to select SVs that are (1) publicly available, (2) specific to the input to be valued, (3) reflective of broad market averages, (4) contemporaneous with the POR, and (5) tax and duty exclusive. Qingdao Sea-Line, 766 F.3d at 1386; QVD Food Co. v. United States, 34 C.I.T. 1166, 1168, 721 F. Supp. 2d 1311, 1315 (2010), aff‘d, 658 F.3d 1318 (Fed. Cir. 2011); see also I & D Memo at 34. Commerce‘s stated preference is “to satisfy the breadth of the aforementioned selection criteria.” I & D Memo at 34. On review, the court evaluates “whether a reasonable mind could conclude that Commerce chose the best available information.” Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333, 1341 (Fed. Cir. 2011) (quoting Goldlink Indus. Co. v. United States, 30 C.I.T. 616, 619, 431 F. Supp. 2d 1323, 1327 (2006)).
A. Product Specificity
Petitioners contend that the filtration anthracite, on which the POR6-contemporaneous Philippine GTA data is based, is the type of anthracite coal consumed by the mandatory respondents, both of which are crushed and sorted. Pet‘rs Br. at 27-28; Reply Br. of Pls. at 3-11, ECF No. 80 (“Pet‘rs Reply Br.“). Petitioners argue that the two products are physically similar, that Commerce‘s conclusory finding that the filtration anthracite is “processed” is insufficient to differentiate the two, and that Commerce‘s reliance on end-use applications is improper. Pet‘rs Br. at 29-31.
The government and Cherishmet respond that the POR6-contemporaneous Philippine value was based on two entries and the PIERS and ZEPOL data confirmed that 94 percent of the entries were filtration anthracite coal, which is not the
As a preliminary matter, Commerce properly determined, after consulting the PIERS and ZEPOL data, that 94 percent (i.e., 87,090 kilograms) of POR6-contemporaneous Philippine GTA data consisted of one entry of Leopold Underdrain, produced by Xylem. Compare Preliminary SV Memo at Attach. 2a, with Jacobi‘s Surrogate Value Cmts. Ex. SV-3 at 71, PD 135-51. (Nov. 20, 2013)12 (“Jacobi‘s SV Cmts.“), and Cherishmet‘s Surrogate Value Ex. 3B, PD 152-60 (Nov. 20, 2013) (“Cherishmet‘s SV Cmts.“). It was reasonable for Commerce in this case to rely on the PIERS and ZEPOL data to identify the specific entry because both sets of data identified the exact same quantity as the POR6-contemporaneous Philippine GTA data for the single entry by Xylem. See I & D Memo at 35.
Commerce‘s decision to reject the POR6-contemporaneous Philippine GTA data, as “not bulk anthracite coal used by the respondents, but a processed anthracite product,” was supported by substantial evidence on the record. I & D Memo at 35. In determining that filtration anthracite is a different product, Commerce explained that the
information placed on the record by Cherishmet and Jacobi indicates that this [Leopold] product has no relation to the production of activated carbon and is a different product than the bulk anthracite coal used by respondents. Specifically, information on the record indicates that the Leopold product is produced from anthracite coal which has been processed to produce a “low-uniformity coefficient” to extend the life and efficiency of water filters.... Further, record evidence demonstrates that the Leopold product is unrelated to the production of activated carbon.
Id. at 35-36 (footnotes omitted). Jacobi and Cherishmet submitted information from Xylem “where product information explains that Leopold Underdrain is used to improve water drainage, water filtering and is manufactured to specific utility coefficients.” I & D Memo at 35 & n.139 (citing Jacobi‘s SV Cmts. Ex. SV-3; Cher-
The record supports Commerce‘s determination that the mandatory respondents used raw or bulk anthracite coal as an input in the production of activated carbon. Jacobi‘s certified questionnaire demonstrates that one of its suppliers starts with “raw lump anthracite coal from the mine,” which then undergoes the following stages: carbonization, activation, sieving/crushing, and acid washing/impregnation. Jacobi‘s Resp. to the Department‘s Suppl. Sec. D Quest. for Ningxia Huahui Activated Carbon Co., Ltd. 2-3, PD 233 (Feb. 12, 2014) (“Jacobi‘s Suppl. Sec. D Resp.“). That supplier indicated that “products destined for Jacobi do not have complex packing materials. Instead they are simply poured into bulk sacks and shipped to Jacobi in Tianjin.” Id. at 3. Jacobi‘s other supplier, similarly, starts with “anthracite and energy (lump) coal,” continues “by crushing the coal,” which is then “mixed with tar and water and pressed into pellets ... [and] placed in a kiln and heated to produce carbonized material,” before being activated. Jacobi‘s Resp. to the Department‘s Sec. D Quest. D-4, PD 104 (Aug. 23, 2013) (“Jacobi Sec. D. Resp.“). Depending on customer specifications, the final activated carbon may be “sieved into different granular or pellet sized products,” “washed by acid solution or impregnated with chemicals,” and packaged. Id. at D-5. Cherishmet, the other mandatory respondent, also reported that “[n]ormally” its activated carbon “is processed from anthracite coal through grinding, mixing/extruding, carbonization, activation and screening.” Cherishmet Resp. to Sec. C & D Quest. 3-4, PD 114 (Sept. 3, 2013) (“Cherishmet‘s Sec. C & D Resp.“).13
The record also supports Commerce‘s determination that the Xylem filtration anthracite media is a more processed product, designed for end-use, rather than the raw material used by the respondents. The PIERS and ZEPOL data provide that Xylem exported Leopold Underdrain, specifically “64 Pkgs of Filter Anthracite,” from the United States into the Philippines. Jacobi‘s SV Cmts. Ex. SV-3 at 71; Cherishmet‘s SV Cmts. Ex. 3B. Xylem‘s own product information states that “Leopold Engineered Filter Media anthracite is produced from the highest quality anthracite available to assure the physical characteristics of hardness, durability, and performance. We purchase our feedstock directly from select mines chosen for the quality of their anthracite.” Jacobi‘s SV Cmts. Ex. SV-3 at 81. Then, the filter anthracite is “processed in a unique, state-of-the-art facility specifically designed to produce low-UC [uniformity coefficient] filter media.” Id. Xylem even “[r]educe[s] the moisture in the raw feedstock ... to produce ten distinct anthracite media sizes.” Id. Xylem undergoes this process so that its filter anthracite media may achieve “[s]uperior filtration qualities, [i]ncreased filter run volumes, and [r]equires less water to thoroughly backwash.” Cherishmet‘s SV Cmts. Ex. 3C at 9. In fact, Xylem‘s Leopold product is designed to meet or exceed the American Water Works Association (“AWWA“) requirements for granular filter products. Jacobi SV Cmts. Ex. SV-3 at 81. Therefore, it is clear from the record that Xylem‘s product is of a highgrade and is processed to be ready to achieve certain filtration-specific results. It was reasonable, then, for Commerce to infer from this record evidence that such a processed product is not the same as the
The petitioners argue that consideration of applications in which the Xylem product is used is “irrelevant to the physical comparability” of the two products and should be disregarded. Pet‘rs Br. at 31. Consideration of applications in which the two products are used is relevant, in so far as it speaks to whether one product is the type of product that a foreign producer of activated carbon would use in its production process. A product too far downstream in the production process, as appears to be the case here, may not be substitutable for a raw material, e.g., due to a prohibitively high cost of the input. Petitioners argue only that the products are physically comparable because “both ... involve crushed anthracite coal that has been sorted to size.” Pet‘rs Reply Br. at 10. The record does not indicate that the respondents’ lump coal undergoes a crushing or sorting process similar to Xylem‘s, which is specifically designed to achieve a low-uniformity coefficient. See Jacobi‘s SV Cmts. Ex. SV-3 at 81. Regardless, petitioner‘s argument is insufficient, in this case, to conclude that Commerce‘s decision is unsupported by substantial evidence as there is ample record evidence supporting Commerce‘s determination that the Xylem product is a downstream processed product and not the input product at issue here.
B. Anthracite Coal Value from the Fifth Period of Review
Petitioners also argue that Commerce should have relied on POR6-contemporaneous data from the other countries found to be economically comparable to the PRC, challenging Commerce‘s seemingly unyielding preference for selecting SVs from a single, primary surrogate country. Pet‘rs Br. at 31-36. Petitioners contend that because the average unit value of anthracite coal undergoes “significant fluctuations” year-to-year, it is even more important for Commerce to select a POR-contemporaneous value rather than trying to select all SVs from the same surrogate ME country, the Philippines. Id. at 33-36.
The government responds that Commerce is not required to select a POR-contemporaneous value over its preferred method of selecting SVs from the same primary surrogate country. Gov. Br. at 39-42; see also Albemarle and Huahui Resp Br. at 22-26. The government also contends that Commerce‘s use of an inflator to the POR5-contemporaneous Philippine GTA data was sufficient to address the petitioners’ concerns regarding yearly fluctuations and the fluctuations are likely due to the fact that the values are based on different types of coal. Gov. Br. at 40-42. Moreover, Cherishmet, as well as Albemarle and Huahui, submit that the Indonesian, Thai, and Colombian GTA data, which are all POR6-contemporaneous, are all unreliable. Cherishmet Resp. Br. at 27-30; Albemarle and Huahui Resp. Br. at 18-22. Albemarle and Huahui also argue that Commerce‘s rejection of the POR6-contemporaneous data from the other economically comparable countries was proper because it determined that the SV derived from the POR5-contemporaneous Philippine GTA data was reliable. Albemarle and Huahui Resp. Br. at 17-18.
Commerce has promulgated a regulation providing that “the Secretary normally will value all factors in a single surrogate country.”
Commerce, by relying on its single surrogate country preference and nothing more, improperly rejected other SVs for anthracite coal derived from POR6-contemporaneous data from other countries. First, the POR5-contemporaneous Philippine GTA data cannot be said on this record to be “fairly equal” to the POR6-contemporaneous GTA data from these other countries because it is not contemporaneous with the POR. Even Commerce has acknowledged that one of the five factors that helps determine the best available information to factor FOPs is whether the data are contemporaneous with the POR. See I & D Memo at 38; Qingdao, 766 F.3d at 1386. The need for Commerce to apply an inflator to the POR5-contemporaneous Philippine GTA data to adjust the old data to reflect POR6 prices demonstrates that non-contemporaneous data is not ipso facto equal to contemporaneous data. Second, the POR5-contemporaneous Philippine GTA data may not be as reliable as some of the POR6-contemporaneous GTA data from other countries. There is no supporting data on the record of this review for the POR5-contemporaneous Philippine value. Commerce simply imported the SV wholesale from the earlier review. Effectively, the selection is unreviewable. Publically available information, however, shows that the POR5-contemporaneous Philippine value of $0.05 per kilogram was derived from just slightly more than 160,000 kilograms of imports. See Fifth Administrative Review of Certain Activated Carbon from the People‘s Republic of China: Surrogate Values for the Preliminary Results at 4 & Attachs. 1, 2a-2b, A-570-904, (May 2, 2013) (ACCESS bar code 3135971-01). Some of the other values on the record, such as the values for South Africa (over 80,000,000 kilograms) and the Ukraine (nearly 15,000,000 kilograms), are based on much higher quantities of imports and thereby likely provide more reliable data upon which to calculate an SV. Cherishmet‘s SV Cmts. at Exs. 3D-3E. As indicated, Commerce did not place information on the record relating to the POR5-contemporaneous Philippine GTA data.
Because it relied on a single country surrogate, Commerce never addressed the reliability of the POR6-contemporaneous record GTA data for anthracite coal from Indonesia, Colombia, Thailand, or South Africa, all four of which were determined by Commerce to be at a comparable level of economic development as the PRC. See Commerce‘s Letter re: Deadlines for Surrogate Country and Surrogate Value Cmts. at 1-3, PD 73 (Aug. 2, 2013); see also Pet‘rs SV Cmts. at Ex. 2A (Indonesia); Pet‘rs’ Final Submission of Surrogate Value Data at Attach., PD 258 (Apr. 21, 2014) (Thailand and Colombia); Cherishmet‘s SV Cmts. at Ex. 3E (South Africa).14 Commerce also did not address the reliability of POR6-contemporaneous Ukrainian data, which was on the record, Cherishmet‘s SV Cmts. at Exs. 3D, 3G, along with information comparing Ukraine‘s level of economic development to the PRC‘s, id. at Ex. 3J.15 Commerce rejected these
Although the government asserts that using a methodology, in which Commerce selects SVs from different surrogate countries, may cause distortion in constructing normal value, it is hard to believe that such a distortion, if any at all, would be equal to or more significant than the distortion caused by not using contemporaneous SVs here.16 Thus, Commerce improperly selected the SV derived from the POR5-contemporaneous Philippine GTA data (1) without placing any of the underlying data on the record to support the value and (2) without addressing contemporaneous surrogate data on the record from non-primary surrogate country sources.17
CONCLUSION
For the foregoing reasons, Commerce‘s Final Results are remanded for Commerce to assign Shanxi DMD the all-others rate. In addition, Commerce shall reconsider its selection of an SV for anthracite coal, in accordance with this opinion. Commerce shall have until March 21, 2016, to file its remand results. The parties shall have until April 20, 2016, to file objections, and the govern-pending on what other information is usable, Commerce may have to address this issue.
JANE A. RESTANI
Judge