GLYCINE & MORE, INC., Plаintiff, v. UNITED STATES, Defendant, and GEO Specialty Chemicals, Inc., Defendant-Intervenor.
Court No. 13-00167
United States Court of International Trade
Nov. 3, 2015
Slip Op. 15-124
STANCEU, Chief Judge
ORDERED that the remand results shall be due on February 24, 2016; comments to the remand results shall be due thirty (30) days following filing of the remand results; and replies to such comments shall be due fifteen (15) days following filing of the comments.
Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington D.C., argued for defendant United States. With him on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Jessica M. Forton, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
David Michael Schwartz, Thompson Hine LLP, of Washington D.C., argued for defendant-intervenor GEO Specialty Chemicals, Inc.
OPINION AND ORDER
STANCEU, Chief Judge:
Plaintiff Glycine & More, Inc. (“Glycine & More“) contests the final determination (“Final Results“) issued by the International Trade Administration of the U.S. Department of Commerce (“Commerce” or the “Department“) to conclude an administrative review of an antidumping duty order on glycine from the People‘s Republic of China (“PRC” or “China“).1 Glycine from the People‘s Republic of China: Final Results of Antidumping Duty Admin. Review; 2011-2012, 78 Fed.Reg. 20,891 (Int‘l Trade Admin. Apr. 8, 2013) (“Final Results“). The administrative review at issue in this action covered the period of review (“POR“) of March 1, 2011 to February 29, 2012. Id. Glycine & More is an affiliate of Baoding Mantong Fine Chemistry Co., Ltd. (“Baoding“), a Chinese producer and exporter of glycine and the sole respondent in the review. Compl. ¶ 1 (May 20, 2013), ECF No. 6. Glycine & More was the importer of record for some of Baoding‘s export shipments of glycine during the POR and participated in the underlying administrative proceeding. Id. ¶¶ 1, 4.
I. BACKGROUND
A. Proceedings before Commerce
Commerce issued thе antidumping duty order on glycine from China (the “Order“) in 1995. Antidumping Duty Order: Glycine From the People‘s Republic of China, 60 Fed.Reg. 16,116 (Int‘l Trade Admin. Mar. 29, 1995). On March 1, 2012, Commerce notified interested parties of the opportunity to request an administrative review of the Order. Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 77 Fed.Reg. 12,559, 12,560 (Int‘l Trade Admin. Mar. 1, 2012) (“Opportunity to Request Notice“). In response to March 30, 2012 requests from Baoding and defendant-intervenor GEO Specialty Chemicals, Inc. (“GEO“), petitioner in the antidumping investigation, Commerce initiated the administrative review at issue in this action.2 GEO Request for Admin. Review (Admin.R.Doc. No. 1) (“GEO Request for Admin. Review“); Baoding Mantong Request for Admin. Review (Admin.R.Doc. No. 2); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 77 Fed.Reg. 25,401, 25,403 (Int‘l Trade Admin. Apr. 30, 2012) (“Initiation“). GEO requested that Commerce review sales of subject merchandise by Baoding and twenty-five other producer/exporters. GEO Request for Admin. Review 2.
On July 10, 2012, Commerсe selected Baoding as one of two mandatory respondents and issued a questionnaire to Baoding. Respondent Selection Mem. (July 9, 2012) (Admin.R.Doc. No. 18) (“Respondent Selection Mem.“); Antidumping Duty Questionnaire (July 18, 2012) (Admin.R.Doc. No. 19). On July 30, 2012, GEO withdrew its administrative review request as to all twenty-six companies, including Baoding. Pet‘r‘s Letter Withdrawing All Review Requests (Admin.R.Doc. No. 37). On August 7, 2012, Baoding requested that Commerce, pursuant to
On August 22, 2012, Commerce notified Baoding that the agency was considering Baoding‘s withdrawal of its review request and that Baoding was not required to respond to questionnaires while Commerce considered whether to give effect to the withdrawal. Commerce‘s Letter Responding to Baoding‘s Withdrawal Request (Admin.R.Doc. No. 46). On September 27, 2012, Commerce notified Baoding that it had rejected the withdrawal request on the ground that Baoding had not shown an extraordinary circumstance warranting an extension of time. Rejection of Baoding‘s Withdrawal of its Admin. Review Request 1 (Admin.R.Doc. No. 47) (“Rejection of Baoding‘s Withdrawal Request“). Commerce also established a deadline for Baoding‘s questionnaire responses. Id. at 2. On October 18, 2012, Baoding notified Commerce that the company would no longer participate in the administrative review and would not respond to the questionnaire. Baoding Withdrawal from the Admin. Review (Admin.R.Doc. No. 48).
Commerce published the preliminary results of the review on December 6, 2012, preliminarily assigning Baoding a 453.79% antidumping duty margin based on facts otherwise available and an adverse inference pursuant to section 776(b) of the Tariff Act of 1930 (“Tariff Act“),
Plaintiff Glycine & More entered a notice of appearance before Commerce on December 17, 2012. Glycine & More Entry of Appearance 1 (Admin.R.Doc. No. 53). Glycine & More subsequently filed a case brief objecting to the Department‘s rejection of Baoding‘s request to withdraw the administrative review request and the application of a 453.79% dumping margin to Baoding. Glycine & More‘s Comments on the Prelim. Results 2-3, 6 (Jan. 7, 2013) (Admin.R.Doc. No. 54).
On April 8, 2013, Commerce published the Final Results, which assigned to Baoding a dumping margin of 453.79%. Final Results, 78 Fed.Reg. at 20,891. According to the Issues & Decision Memorandum incorporated into the Final Results, Commerce obtained this rate from the rate calculated for Baoding in the immediately preceding administrative review of the Order. Issues & Decision Mem. for the Final Results of the Antidumping Duty Admin. Review of Glycine from the People‘s Republic of China, A-570-836, ARP 11-12, 11-12 (Apr. 1, 2013) (Admin.R.Doc. No.
B. Proceedings before the Court of International Trade
Glycine & More initiated this action by filing a summons on April 26, 2013 and a complaint on May 20, 2013. Summons, ECF No. 1; Compl., ECF No. 6. Plaintiff filed its Motion for Judgment on the Agency Record and an accompanying brief on January 31, 2014. Def.‘s Mot.; Mem. of P. & A. in Supp. of Pl.‘s 56.2 Mot. for J. on the Agency R., ECF No. 28-1 (“Pl.‘s Br.“). Defendant and defendant-intervenor each opposed the motion, and plaintiff replied. Def.‘s Mem. in Opp‘n to Pl.‘s R. 56.2 Mot. for J. Upon the Agency R. (Apr. 25, 2014), ECF No. 32 (“Def.‘s Opp‘n“); Def.-Intervenor‘s Resp. Br. in Opp‘n to Pl. Glycine & More, Inc.‘s R. 56.2 Mot. for J. upon the Agency R. (Apr. 25, 2014), ECF No. 33 (“Def.-intervenor‘s Opp‘n“); Reply Br. of Glycine & More (May 23, 2014), ECF No. 38 (“Pl.‘s Reply“).
The court held oral argument on September 9, 2014. ECF No. 43. Following oral argument, defendant-intervenor filed a Notice of Supplemental Authority notifying the court of a decision by the U.S. Court of Appeals for the Federal Circuit (“Court of Appeals“) in Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343 (Fed. Cir. 2015), which defendant-intervenor submits is a precedent lending support to affirmance of the decision challenged in this case. Def.-Intervenor‘s Notice of Supplemental Authority (Feb. 4, 2015), ECF No. 44.
II. DISCUSSION
A. Jurisdiction and Standard of Review
The court exercises jurisdiction according to section 201 of the Customs Court Act of 1980,
B. The Contested Decision Must Be Remanded Because It Is Based on an Unreasonable Interpretation of the Department‘s Regulation
Plaintiff claims that the Department‘s decision to reject its withdrawal request was unlawful and seeks as a remedy an order directing Commerce to rescind the administrative review. Pl.‘s Br. 18. Plaintiff argues, inter alia, that in requiring Baoding to demonstrate that an extraordinary circumstance prevented a timely withdrawal of its review request, Commerce applied an unreasonable interpretation of the applicable regulation,
The antidumping statute provides for the conducting of a periodic review of an antidumping or countervailing duty order “[a]t least once during each 12-month period beginning on the date of publication” of such order “if a request for such a review has been received.”
In its regulations governing administrative reviews, Commerce has provided as follows:
The Secretary will rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review. The Secretary may extend this time limit if the Secretary decides that it is reasonable to do so.
Pursuant to
section 351.213(d)(1) of the Department‘s regulations, a party that has requested a review may withdraw that request within 90 days of the date of publication of the notice of initiation оf the requested review. The regulation provides that the Department may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when the Department will exercise its discretion to extend this 90-day deadline, interested parties are advised that, with regard to reviews requested on the basis of anniversary months on or after August 2011, the Department will not consider extending the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance has prevented it from submitting a timely withdrawal request. Determinations by the Department to extend the 90-day deadline will be made on a case-by-case basis. The Department is providing this notice on its Web site, as well as in its “Opportunity to Request Administrative Review” notices, so that interested parties will be aware of the manner in which the Department intends to exerсise its discretion in the future.
Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 76 Fed.Reg. 45,773, 45,773 (Int‘l Trade Admin. Aug. 1, 2011) (emphasis added). In the March 1, 2012, Federal Register notice Commerce issued to invite parties to request the administrative review and in the April 30, 2012, notice initiating the review, Commerce provided a nearly identical notice.5 Opportunity to Request Notice, 77 Fed. Reg. at 12,560; Initiation, 77 Fed.Reg. at 25,401.
In an August 7, 2012, letter withdrawing its administrative review request, Baoding claimed that “[e]xtraordinary circumstances exist in this case to extend the 90 day period.” Baoding‘s Withdrawal Request 2-3. Baoding elaborated as follows:
[B]oth GEO and Baoding Mantong had requested administrative reviews as to Baoding Mantong. Consequently, a unilateral withdrawal by only one party would be of no consequence—withdrawal of administrative review requests by both parties must be present to effectuate rescission of the administrative review. Given that Baoding Mantong was not aware of GEO‘s withdrawal of its administrative review request as to Baoding Mantong until service of the withdrawal request was received by counsel for Baoding Mantong via first class mail after expiration of the 90 day period, Baoding Mantong had no reason to believe that a unilateral withdrawal of its own administrative review request would have any impact. Only after Baoding Mantong received notice of the GEO withdrawal of the Baoding Mantong review request, was Baoding Mantong able to decide whether to withdraw its own administrative review request or proceed with the review.
Baoding‘s Withdrawal Request 2-3 (emphasis in original). Baoding also stated that “good reason exists” for Commerce to grant the untimely withdrawal request, explaining that Commerce would be able to preserve its limited administrative resources in this proceeding because Baoding had not yet submitted its response to the Department‘s questionnaire. Id. at 3.
In a letter denying Baoding‘s request to rescind the administrative review, issued on September 27, 2012, Commerce explained that “[w]e do not find the circumstances you describe to be extraordinary and therefore are unable to grant your request to extend the 90-day deadline.” Rejection of Baoding‘s Withdrawal Request 1. Commerce elaborated that “[p]ursuant to
In the Final Results, Commerce made no changes to its preliminary results, assigning Baoding a margin of 453.79%. Final Results, 78 Fed.Reg. at 20,891. According to the Issues & Decision Memorandum, Commerce, “[e]xercising its
In the past, extending the 90-day deadline depended on a variety of factors, such as whether the Department had devoted significant time or resources to the review and the stage of the review. To enhance certainty and fairness, the Department determined to apply the 90-day rule except where a requestor could demonstrate that an extraordinary circumstance prevented it from timely submitting a withdrawal of review request.
Id. at 7. Responding to various arguments raised by Baoding, Commerce “did not find that extraordinary circumstances existed which prevented Baoding Mantong from filing a timely withdrawal request.” Id. at 5. Specifically, Commerce found that “Baoding Mantong‘s assertion that only after it received GEO‘s withdrawal request was Baoding Mantong ‘able to decide whether to withdraw its own administrative review request or proceed with the review,’ does not present an extraordinary circumstance.” Id. at 6 (citation omitted in original). Commerсe noted that “GEO withdrew its request for review of all parties with no knowledge of whether Baoding Mantong would also withdraw its own request for review.” Id. Commerce further reasoned that “[w]hile Baoding Mantong may have known a timely withdrawal of its request for review would not guarantee that the review would be rescinded, it also knew that unless it timely withdrew its request the review would not be rescinded absent extraordinary circumstances.” Id. Commerce also stated that nothing prevented Baoding from submitting a timely withdrawal request to prepare for the possibility that GEO also submitted a withdrawal request. Id. Finally, Commerce claimed that “evidence suggests that it was the final results from the prior administrative review (i.e., the 2010–2011 administrative review) that influenced Baoding Mantong‘s ultimate decision to withdraw its participation in the instant proceeding.” Id. at 5–6. Commerce noted that “Baoding Mantong decided to no longer participate in the instant review on October 19, 2012, i.e., the day after the final results of the 2010–2011 administrative review [were] published in the Federal Register.” Id. at 6.
In response to Glycine & More‘s arguments concerning the early point in the review at which Baoding submitted its withdrawal request, Commerce reiterated its position that the appropriate consideration is whether an extraordinary circumstance prevented Baoding‘s submission of a timely withdrawal. Id. Commerce also cited an opinion of this Court, ArcelorMittal Dofasco Inc. v. United States, 602 F.Supp.2d 1330, 1336 (C.I.T.2009), for the proposition that the resources Commerce expends in conducting an administrative review are not the only consideration that reasonably could affect the Department‘s decision of whether to extend the 90-day deadline. Id. at 6–7. Commerce rejected Glycine & More‘s argument that the agency had been inconsistent with regard to the language of
2. The Department‘s Interpretation of 19 C.F.R. § 351.213(d)(1) , Being Inconsistent with the Intent Expressed at the Time of Promulgation, Does Not Qualify for “Auer” Deference
Commerce denied effect to Baoding‘s withdrawal of its review request based on its interpretation of
The applicable regulation,
The second provision in
The general rule is that an agency‘s interpretation of its own regulation is “controlling unless ‘plainly erroneous or inconsistent with the regulation.‘” Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997) (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989), in turn quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945)). However, “this general rule does not apply in all cases.” Christopher v. SmithKline Beecham, — U.S. —, 132 S.Ct. 2156, 2166, 183 L.Ed.2d 153 (2012). Deference is “unwarranted when there is reason to suspect that the agency‘s interpretation ‘does not reflect the agency‘s fair and considered judgment on the matter in question.‘” Id. (quoting Auer, 519 U.S. at 462 and citing Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 209, 131 S.Ct. 871, 178 L.Ed.2d 716 (2011)). “This might occur when the agency‘s interpretation conflicts with a prior interpretation....” Id. (citing Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994)). Analogously, Auer deference may be unwarranted if the agency‘s interpretation conflicts with the intent the agency expressed at the time of promulgation. Thomas Jefferson Univ., 512 U.S. at 512 (“[W]e must defer to the Secretary‘s interpretation unless an ‘alternative read-
Commerce promulgated the regulation in essentially its current form in 1989, to implement a 1984 amendment to the Tariff Act providing for periodic reviews of antidumping orders that would occur upon request; under the previous statute reviews invariably were conducted for each twelve-month period. See
(5) The Secretary may permit a party that requests a review under paragraph (a) of this section to withdraw the request not later than 90 days after the date of publication of notiсe of initiation of the requested review. The Secretary may extend this time limit if the Secretary decides that it is reasonable to do so.
Antidumping Duties (Final rule), 54 Fed.Reg. 12,742, 12,778 (Int‘l Trade Admin. Mar. 28, 1989). The sentence stating that “[t]he Secretary may extend this time limit if the Secretary decides that it is reasonable to do so” has been carried over, in identical form, in the current regulation. See
As it related to paragraph (5) of
In the form in which Commerce issuеd it as a proposed regulation in 1986,
If a relevant review has not been completed before the end of the anniversary month during which the new request is submitted, the party that submitted the new request may withdraw it not later than 90 days after the date of publication of notice of initiation of the requested review. The Secretary may extend the time limit if it is reasonable to do so.
Id. Thus, by adding subparagraph (5) to the regulation upon promulgation, Commerce addressed the problem in which a party is faced with the need to decide whether it wants a review before knowing the final results of the immediately preceding review. In the first sentence of the regulation, Commerce allowed the 90-day period on the premise that it would suffice to solve the stated problem in the ordinary instance. Due to the stated rationale of paragraph (5), it is difficult to see why granting at least a brief extension according to the second sentence would not presumptively be reasonable where the preceding review is still ongoing at the close of that period.
When making numerous revisions to its regulations in 1997, Commerce placed the regulation into its current form, redesignating it as
We agree that the 90-day limitation may be too rigid. However, we believe that the Department must have the final say concerning rescissions of reviews requested after 90 days in order to prevent abuse of the procedures for requesting and withdrawing a review. For example, we are concerned with the situation in which a party requests a review, the Department devotes considerable time and resources to the review, and then the party withdraws its requests once it ascertains that the results of the review are not likely to be in its favor.
Therefore, in
Id.
The regulatory history clarifies that current
The Department‘s 2011 interpretation of
3. The Department‘s Interpretation of 19 C.F.R. § 351.213(d)(1) Is Unreasonable as Applied in this Case
When viewed absent the degree of deference specified in Auer, the interpre-
Moreover, the Department‘s refusal to recognize Baoding‘s withdrawal of its review request, when viewed according to the record facts of this case, is also inconsistent with the statement Commerce offered in 1997 of its reasons for maintaining the 90-day period and retaining discretion over extensions. As discussed previously, Commerce, in responding to a comment, expressed at that time that it wished to prevent “abuse of the procedures for requesting and withdrawing a review,” such as where “a party requests a review, the Department devotes considerable time and resources to the review, and then the party withdraws its requests once it ascertains that the results of the review are not likely to be in its favor.” 1997 Regulations, 62 Fed.Reg. at 27,317. Because Baoding sought rescission of the review before submitting its initial questionnaire response, there is no evidentiary basis on this record from which Commerce could have concluded that it had devoted “considerable time and resourсes to the review.” Id. Allowing the extension in this case would have required an extension of only nine days, i.e., from July 29 to August 7, 2012.9 On these facts, Baoding cannot credibly be characterized as having committed an “abuse of the procedures for requesting and withdrawing a review.” Id.
Glycine & More‘s statements to Commerce during the administrative proceedings indicate that Baoding considered the developments in the preceding review significant to its decision whether to withdraw its request for the review at issue. Glycine & More‘s Comments on the Prelim. Results 3–4 (Jan. 7, 2013) (Admin.R.Doc. No. 54). Glycine & More told Commerce that “pervasive errors contained in the preliminary results of the 2010–2011 administrative review,” includ-
In the Issues & Decision Memorandum, Commerce criticized Baoding for deciding not to participate in the review at issue review after becoming aware of the final results of the previous (fifth) review. Commerce stated that “[e]vidence suggests that it was the final results from the prior administrative review (i.e., the 2010–2011 administrative review) that influenced Baoding Mantong‘s ultimate decision to withdraw its participation in the instant proceeding,” Issues & Decision Mem. 5–6, adding that “Baoding Mantong decided to no longer participate in the instant review on October 19, 2012, i.e., the day after the final results of the 2010–2011 administrative review [were] published in the Federal Register,” Id. at 6. In leveling this criticism, Commerce appears to have lost sight of the purpose for which it promulgated the regulation now codified as
Defendant and defendant-intervenor raise various arguments in support of the Department‘s decision to refuse to recognize Baoding‘s withdrawal request. Defendant argues, for example, that under Auer, 519 U.S. at 457, the Department‘s interpretation is controlling because it is neither plainly erroneous nor inconsistent with the governing regulation and becаuse it represented the Department‘s “fair and considered” judgment on the issue. Def.‘s Opp‘n 8. Similarly, defendant-intervenor argues that the “reasonable to do so” standard in
4. On Remand, Commerce Must Reach a New Decision on Baoding‘s Withdrawal of its Review Request that Is Based on a Reasonable Interpretation of § 351.213(d)(1)
For the reasons discussed supra, the Department‘s decision declining to give ef-
Under the circumstances shown by the record of this proceeding, it appears likely that only a decision allowing a nine-day extension, and a consequent rescission of the relevant review, could fulfill the stated purpose of
Nevertheless, out of an abundance of caution, and because the regulation imparts the discretion to decide extension requests to the Commerce Secretary, the court will issue a remand order under which Commerce is to decide anew the question of whether Baoding‘s request for a nine-day extension should be approved. The court envisions that it could sustain a decision reinstating the previous, negative decision only if the record were to support a finding of a new and compelling circumstance, not previously identified by Commerce in the Issues & Decision Memorandum or elsewhere during the review, that, despite the circumstances the court has identified, could justify disallowing Baoding‘s withdrawal. At this time, the court is not aware of any such circumstance.
Because the court is remanding the decision to reject Baoding‘s withdrawal of its request for review, the court does not adjudicate at this time Glycene & More‘s other claim in this case, which contests the Department‘s decision to assign Baoding a rate of 453.79%.
III. CONCLUSION AND ORDER
For the reasons discussed in the foregoing, the court remands the final decision (“Final Results“) of the International Trade Administration, U.S. Department of Commerce (“Commerce” or the “Department“) in the administrative review of the antidumping duty order on glycine from the People‘s Republic of China (“PRC” or “China“), published in Glycine from the People‘s Republic of China, 78 Fed.Reg. 20,891 (Int‘l Trade Admin. Apr. 8, 2013) (“Final Results“). Therefore, upon consideration of all papers and proceedings in this case, and upon due deliberation, it is hereby
ORDERED that the Final Results be, and hereby are, set aside as unlawful and remanded for further proceedings consis-
ORDERED that Commerce, within sixty (60) days of this Opinion and Order, submit for the court‘s review a Remand Redetermination that comрlies fully with this Opinion and Order; it is further
ORDERED that plaintiff Glycine & More and defendant-intervenor GEO Specialty Chemicals, Inc. each may file comments on the Remand Redetermination within thirty (30) days from the date on which the Remand Redetermination is filed with the court; and it is further
ORDERED that defendant may file a response within fifteen (15) days from the date on which the last of any such comments is filed with the court.
Notes
Opportunity to Request Notice, 77 Fed.Reg. at 12,560; see also Initiation, 77 Fed. Reg. at 25,401.Pursuant to
19 CFR 351.213(d)(1) , a party that has requested a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that the Department may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when the Department will exercise its discretion to extend this 90-day deadline, interested parties are advised that, with regard to reviews requested on the basis of anniversary months on or after March 2012, the Department does not intend to extend the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance has prevented it from submitting a timely withdrawal request. Determinations by the Department to extend the 90-day deadline will be made on a case-by-case basis.