GROBEST & I-MEI INDUSTRIAL (VIETNAM) CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant, Ad Hoc Shrimp Trade Action Committee, et al., Defendant-Intervenors.
Court No. 10-00238
United States Court of International Trade
July 31, 2012
Slip Op. 12-100
POGUE, Chief Judge
Consolidated with Court Nos. 10-00253, 10-00257, 10-00265, 10-00272, and 10-00273
This Court is directed by statute to require the exhaustion of administrative remedies where appropriate. Customs Courts Act,
Exceptions to the exhaustion requirement have been judicially recognized, most notably in situations where exhaustion would have been futile or where a pure legal question is involved. See Corus Staal BV v. United States, 502 F.3d 1370, 1378-79 & n. 4 (Fed.Cir.2007). However, the court has no basis to conclude that Atar‘s raising its objection in its comments to Commerce would have been futile. Commerce did not state in the draft version of its determination that it would be unreceptive to that objection. Moreover, the objection is not grounded purely in a question of law. Applying an exception to exhaustion is a matter for the court‘s discretion. Id. at 1379. The circumstances of this case do not justify the court‘s excusing the failure of Atar to press its objection before the agency that had the responsibility for issuing the determination now before the court.
III. CONCLUSION
The Third Remand Redetermination complies with the court‘s order in lawfully determining a profit cap and applying it as a limitation on the constructed value profit determination. The Department‘s determination of an underlying profit rate is not validly contested by any party and is sustained on that basis. Commerce determined an ISE rate according to a reasonable method, as required by statute. Finally, the court rejects, for failure to exhaust administrative remedies, Atar‘s challenge to the Third Remand Redetermination based on the Corticella data. Accordingly, the court will enter judgment affirming the Third Remand Redetermination.
Robert G. Gosselink and Jonathan M. Freed, Trade Pacific PLLC, of Washington, DC, for the Consolidated Plaintiffs Cam Ranh Seafoods Processing Enterprise Co.; Contessa Premium Foods Inc.; H & N Foods International.
Adams C. Lee, Walter J. Spak, and Jay C. Campbell, White & Case, LLP, of Washington, DC, for the Consolidated Plaintiff Amanda Foods (Vietnam) Ltd.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the briefs were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director. Of counsel on the briefs was Jonathan Zielinski, Senior Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.
Andrew W. Kentz, Jordan C. Kahn, Nathaniel M. Rickard, and Kevin M. O‘Connor, Picard Kentz & Rowe LLP, of Washington, DC, for Defendant-Intervenor Ad Hoc Shrimp Trade Action Committee.
Geert M. De Prest and Elizabeth J. Drake, Stewart & Stewart, of Washington, DC, and Edward T. Hayes, Leake & Andersson, LLP, of New Orleans, LA, for the Defendant-Intervenor American Shrimp Processors Association.
OPINION AND ORDER
POGUE, Chief Judge:
This case returns to court following remand, by Grobest & I-Mei Indus. (Vietnam) Co. v. United States, 36 CIT —, 815 F.Supp.2d 1342 (2012) (“Grobest I“), of the final results of the fourth administrative review of the antidumping duty order on certain frozen warmwater shrimp from the Socialist Republic of Vietnam.2 Specifically, Grobest I remanded the Final Results for the Department of Commerce (“Commerce” or “the Department“) to (1) provide further explanation or reconsider its policy of zeroing in administrative reviews but not in investigations consistent with recent case law from the Court of Appeals for the Federal Circuit; (2) reconsider the request of Plaintiff Grobest & I-Mei Industrial (Vietnam) Co., Ltd. (“Grobest“) for individual review as a voluntary respondent consistent with
The court has jurisdiction pursuant to
STANDARD OF REVIEW
“The court will sustain the Department‘s determination upon remand if it complies with the court‘s remand order, is supported by substantial evidence on the record, and is otherwise in accordance with law.” Jinan Yipin Corp. v. United States, 33 CIT —, 637 F.Supp.2d 1183, 1185 (2009) (citing
DISCUSSION4
I. Commerce‘s Policy of Zeroing in Administrative Reviews but Not in Investigations
A. Background
In Grobest I, Plaintiffs challenged Commerce‘s policy of employing zeroing in administrative reviews but not in investigations.5 The court remanded the Final Results to Commerce for reconsideration and redetermination consistent with the Court of Appeals’ holdings in Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir.2011) and JTEKT Corp. v. United States, 642 F.3d 1378 (Fed.Cir.2011). Grobest I, 36 CIT at —, 815 F.Supp.2d at 1350. In Dongbu, the Court of Appeals held that “the government has not pointed to any basis in the statute for reading
While Commerce did point to differences between investigations and administrative reviews, it failed to address the relevant question—why is it a reasonable interpretation of the statute to zero in administrative reviews, but not in investigations? It is not illuminating to the continued practice of zeroing to know that one phase uses average-to-average comparisons while the other uses average-to-transaction comparisons.
JTEKT, 642 F.3d at 1384. The issue now before the court is whether Commerce‘s further explanation, as provided in the Remand Results, is sufficient to satisfy the Court of Appeals’ concerns in Dongbu and JTEKT.
In the Remand Results, Commerce puts forward three arguments to support its use of zeroing in reviews but not in investigations. First, Commerce argues that the courts have previously affirmed the reasonableness of Commerce‘s current review and investigation methodologies. Second, Commerce argues that the change of methodology in investigations was a reasonable implementation of an adverse World Trade Organization (“WTO“) decision. Finally, Commerce argues that its inconsistent interpretations reasonably account for inherent differences between investigations and reviews.
Commerce contends that its first and second arguments “sufficiently justify and explain why the Department reasonably interpreted section [1677(35)] differently in average-to-average comparisons in antidumping duty investigations relative to all other contexts.” Remand Results at 11. However, contrary to Commerce‘s assertion, in Dongbu the Court of Appeals held both of these arguments insufficient to justify the inconsistent interpretations.
The Court of Appeals made clear in Dongbu that the question before it—and therefore currently before this court—was novel: “Although we have considered Commerce‘s zeroing policy in administrative reviews on numerous occasions ... we agree with [plaintiff] that this court has never addressed the reasonableness of Commerce‘s interpretation of
Nor does Commerce‘s proper implementation of an adverse WTO ruling resolve the question. Rather, recognizing that the Court of Appeals has upheld the new investigation methodology as a reasonable implementation of an adverse WTO ruling, U.S. Steel, 621 F.3d at 1360-63, Commerce must now show that its decision “compl[ies] with domestic law including reasonably interpreting statutes.” Dongbu, 635 F.3d at 1372. A proper and reasonable implementation of an adverse WTO ruling may be contrary to law if it leads to an unreasonably inconsistent interpretation of statutory language. Id. (“[T]he government‘s decision to implement an adverse WTO report standing alone does not provide sufficient justification for the inconsistent statutory interpretations.“). While implementation of an adverse WTO ruling may be a partial justification, it is not sufficient to resolve the matter. Union Steel, 36 CIT at —, 823 F.Supp.2d at 1357-58.
Therefore, the court turns to Commerce‘s third argument, that the Department‘s interpretations of
When considering whether Commerce‘s interpretation is reasonable, the court looks first, but not exclusively, to the language of the statute. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 n. 9 (1984); see also Wheatland Tube Co. v. United States, 495 F.3d 1355, 1361 (Fed.Cir.2007) (“To determine whether Commerce‘s interpretation ... is reasonable, we may look to ‘the express terms of the provisions at issue, the objectives of those provisions, and the objectives of the antidumping scheme as a whole.‘” (quoting NSK Ltd. v. United States, 26 CIT 650, 654, 217 F.Supp.2d 1291, 1297 (2002))). But, as the court pointed out in Union Steel, this issue cannot be decided solely on the basis of the statutory language found at
To begin answering this question, we note that the statute distinguishes between “the amount by which normal value exceeds the export price or constructed export price,” i.e., the dumping margin, and the manner in which this margin becomes the basis for the antidumping duty.
However, the process by which a dumping margin becomes an antidumping duty is not provided by statute. See U.S. Steel, 621 F.3d at 1360. What the statute does provide is the basis for an antidumping duty. In some instances, the statute simply requires that the antidumping duty be based on the amount by which normal value exceeds export price. See
Prescribing that the dumping margin be the basis of the antidumping duty does not tell Commerce how to translate a dumping margin into an antidumping duty. Commerce has reasonably interpreted the various provisions to involve a three-step calculation: (1) calculation of a dumping margin; (2) calculation of a weighted average dumping margin; and (3) application of the weighted average dumping margin to sales or entries to determine the cash deposit or antidumping duty.8 See Union Steel, 36 CIT at —, 823 F.Supp.2d at 1349-50, app. Therefore, the
Where, then, does zeroing come into the calculation methodology? As the Court of Appeals has held, the statute neither requires nor forbids it at any step in the process. U.S. Steel, 621 F.3d at 1361 (“[Section] 1677(35)(A) does not unambiguously preclude—or require—Commerce to use zeroing methodology.“). Commerce explains in the Remand Results:
When using an average-to-average comparison methodology, the Department usually divides the export transactions into groups, by model and level of trade (averaging groups), and compares an average export price or constructed export price of transactions within one averaging group to an average normal value for the comparable model of the foreign like product at the same or most similar level of trade.... The Department then compares the average export price or constructed export price for the averaging group with the average normal value for the comparable merchandise. This comparison yields an average amount of dumping for the particular averaging group because the high and low prices within the group have been averaged together prior to the comparison. Importantly, under this comparison methodology, the Department does not calculate the extent to which an exporter or producer dumped a particular sale ... but rather makes the determination “on average” for the averaging group within which higher prices and lower prices offset each other. The Department then aggregates the results from each of the averaging groups to determine the aggregate dumping margins for a specific producer or exporter. At this aggregation stage, negative averaging group comparison results offset positive averaging group comparison results....
... Under the average-to-transaction comparison methodology, the Department compares the export price or constructed export price for a particular U.S. transaction with the average normal value for the comparable model of foreign like product.... The result of such a comparison evinces the amount, if any, by which the exporter or producer sold the merchandise at an export price less than its normal value. The Department then aggregates the results of these comparisons—i.e., the amount of dumping found for each individual sale—to calculate the weighted-average dumping margin for the period of review. To the extent the average normal value does not exceed the individual export price or constructed export price of a particular U.S. sale, the Department does not calculate a dumping margin for that sale or include an amount of dumping for that sale in its aggregation of transaction-specific dumping margins.
Remand Results at 12-14.
Pursuant to both methodologies, Commerce calculates the
Rather than reading “exceeds” in
Commerce has offered a reasonable basis for treating investigations and reviews differently. See Nat‘l Org. of Veterans’ Advocates, Inc. v. Sec‘y of Veterans Affairs, 260 F.3d 1365, 1379-80 (Fed.Cir.2001) (requiring agency to provide reasonable explanation for treating the same language in two statutory provisions differently). This reasoning is based in part on the antidumping statute‘s objective of determining margins as accurately as possible, Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed.Cir.1990), in order to remedy the effect of unfair trading practices, Chaparral Steel Co. v. United States, 901 F.2d 1097, 1103-04 (Fed.Cir.1990). Such is the basis behind seeking accuracy through zeroing in administrative reviews. Commerce‘s reasoning is also based on its decision to implement an adverse WTO decision regarding investigations, which was properly done consistent with Commerce‘s authority and has been upheld as reasonable by the Court of Appeals. While implementation of an adverse WTO determination is not a sufficient basis for an inconsistent interpretation of a statute, as noted above, it is a reasonable basis for the Department to reconsider the purpose, and therefore methodology, of an antidumping investigation, i.e., a reasonable basis for departing from its prior position.
Thus, the court agrees with the recent decision in Union Steel that “when it comes to reviews, which are intended to more accurately reflect commercial reality, Commerce is permitted to unmask dumping behavior in a way that is not necessary at the investigation stage.” Union Steel, 36 CIT at —, 823 F.Supp.2d at 1359. Commerce‘s decision to adjust its methodology to seek overall pricing behavior in investigations and more accurate duties in
II. Individual Review of Grobest as a Voluntary Respondent
A. Background
In the Final Results, Commerce denied a revocation request from Plaintiff Grobest because Grobest was not individually reviewed. In Grobest I, Grobest challenged this determination, arguing, inter alia, that it should have been reviewed as a voluntary respondent pursuant to
B. Analysis
In the Remand Results, Commerce again rejected Grobest‘s request for voluntary respondent status. On remand, Commerce determined that individual review of Grobest “would have been unduly burdensome and inhibited the timely completion of the review.” Remand Results at 15. Commerce first contends that the workload in this case along with the workload in other antidumping and countervailing duty cases handled by the office in charge of this case made individual review of Grobest unduly burdensome. Second, Commerce contends that having fully extended the time for the preliminary results and partially extended the time for the final results, it could not individually review Grobest without rendering completion of the administrative review untimely.
Grobest challenges the Remand Results as an unreasonable interpretation of
It is not the role of the court to second guess Commerce‘s allocation of its resources. See Longkou Haimeng Mach. Co. v. United States, 32 CIT 1142, 1151, 581 F.Supp.2d 1344, 1353 (2008). “[A]ny assessment of Commerce‘s operational ca
Insofar as Grobest challenges Commerce‘s interpretation of the statute pursuant to the initial step in the Chevron framework, its argument is unavailing. Contrary to Grobest‘s assertion, the statute does not unambiguously define “a number so large.” Rather, the statute conditions consideration of “a number so large” on whether review of such a number of respondents would be unduly burdensome and inhibit the timely completion of the review. The fact that the statute sets out a standard for interpreting “a number so large” means that there is no definitive number contemplated under the statute. Rather, “number” and “large” are ambiguous statutory terms; thus, the court must consider whether Commerce‘s interpretation is reasonable. Chevron, 467 U.S. at 842-45.
In the Remand Results, Commerce chose to examine the burden imposed and the effect upon the timeliness of the review posed by individual investigation of one voluntary respondent. In doing so, Commerce interpreted the statute not to set a floor for the number of voluntary respondents to be reviewed; rather, Commerce interpreted the statute to render every voluntary respondent request subject to an undue burden and timely completion analysis. Such interpretation is reasonable as it contemplates the standard set forth by the statute itself—whether the number of respondents is so large as to be unduly burdensome and inhibit the timely completion of the review. Cf. F.C.C. v. AT & T Inc., — U.S. —, 131 S.Ct. 1177, 1184 (2011) (“[S]tatutory interpretation turns on the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.” (quoting Nken v. Holder, 556 U.S. 418, 426 (2009))). In contrast, Grobest‘s argument that the number of voluntary respondents must reach some arbitrary threshold of largeness fails to consider the relative burdens that may be imposed by review of any one respondent, thereby disregarding the statutorily established standard.
Having considered whether Commerce‘s statutory interpretation is reasonable, we must now consider whether Commerce‘s decision amounted to an abuse of discretion. The Court of Appeals has stated that “an agency abuses its discretion where its ‘decision (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) follows from a record that contains no evidence on which the [agency] could rationally base its decision.‘” Sterling Fed. Sys., Inc. v. Goldin, 16 F.3d 1177, 1182 (Fed.Cir.1994) (quoting Gerritsen v. Shirai, 979 F.2d 1524, 1529 (Fed.Cir.1992)); see also Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1148-49 (Fed.Cir.2011) (noting that a clear error of judgment occurs when an action is “arbitrary, fanciful or clearly unreasonable“). When
As we explained in Grobest I,
In this case Commerce has failed to show undue burden and has exercised its discretion in a way that renders the statute meaningless. On remand, Commerce found individual review of one voluntary respondent to be unduly burdensome. However, the facts that Commerce put forward to support that conclusion do not distinguish this case from the paradigmatic review of an antidumping or countervailing duty order.12 Rather, the burdens Commerce names in the Remand Results are the same burdens that occur in every review. In this regard, Commerce‘s decision that the burden in this case is undue sets the bar for undue burden too low because it would make individual review of voluntary respondents in any typical antidumping or countervailing duty review unduly burdensome, and such a determination renders
When Commerce can show that the burden of reviewing a voluntary respondent would exceed that presented in the typical antidumping or countervailing duty review, the court will not second guess Commerce‘s decision on how to allocate its resources. See Longkou Haimeng Mach., 32 CIT at 1151, 581 F.Supp.2d at 1353. However, Commerce‘s failure to make such a showing in this case, thereby rendering
CONCLUSION
In light of the foregoing opinion, the Final Results, 75 Fed.Reg. at 47,771, as explained by the Remand Results, are affirmed in part and remanded in part. Commerce‘s explanation for why it continued to zero in this review after ceasing zeroing in investigations is affirmed. Commerce‘s assignment of the separate rate to Amanda Foods is also affirmed. Commerce‘s rejection of Grobest‘s request for voluntary respondent status is remanded to Commerce to conduct an individual review of Grobest as a voluntary respondent and to reconsider Grobest‘s revocation request in light of the results of that review.
It is SO ORDERED.
DONALD C. POGUE
CHIEF JUDGE