TRI UNION FROZEN PRODUCTS, INC. еt al., Plaintiffs and Consolidated Plaintiffs, v. UNITED STATES, Defendant, and Ad Hoc Shrimp Trade Action Committee, Defendant-Intervenor.
Consol. Court No. 14-00249
United States Court of International Trade
June 13, 2017
Slip Op. 17-71 | 1387
Kelly, Judge
Plaintiff challenges neither Commerce‘s practice nor the quality and reliability of the 2001-2002 statement, but rather argues that Commerce acted arbitrarily by “ignor[ing] the essential similarity of the two statements.” Pl.‘s Cmts. 30. Moreover, plaintiff contends that “there was [a] dramatic difference in profit realized by MHPC on its resale of processed honey in FY 2002/03 fiscal year ... compared [to] FY 2001/02 ... leading to an even more dramatic difference in overall financial ratios,” and Commerce‘s failure to account for this difference was to ignore commercial reality. Pl.‘s Cmts. 29-30.
To the extent plaintiff argues that Commerce failed to consider MHPC‘s 2002-2003 financial statement, it is evident in the Remand Results that Commerce compared the statements in terms of their contemporaneity, representativeness, and specificity and found the 2001-2002 statement to be superior in quality. Remand Results at 27 (“We continue to find that there are two principal problems with Zhejiang‘s proposal: non-contemporaneity and the lack of representativeness of the data.“). As the defendant observes, plaintiff‘s argument “fails to demonstrate that [the 2002-2003 financial statement was] the best available data, other than to argue that that the differences in profits ... [led] to a ‘dramatic difference’ in overall financial ratios.” Def.‘s Reply 19. Plaintiff points to no legal authority to support its claim that Commerce erred here in following its established practice regarding averaging statements from the same company. Moreover, plaintiff does not deny that the 2001-2002 statement satisfies the criteria Commerce traditionally considers in evaluating sources of surrogate data. See Qingdao, 766 F.3d at 1386 (Commerce considers whether surrogate data “are publicly available, are product-specific, reflect a broad market average, and are contemporaneous with the period of review“). Commerce reasonably determined that MHPC‘s 2001-2002 financial statement met the criteria for quality and reliability and justified its decision not to average the two financial statements based on its established practice. Accordingly, Commerce‘s selection of MHPC‘s 2001-2002 financial statement was reasonable.
CONCLUSION
In the end, plaintiff has failed to show that the information it prefers for determining its rate is superior to that used by Commerce. Thus, for the foregoing reasons, the court sustains the Remand Results as supported by substantial evidence and otherwise in accordance with law. Judgment will be entered accordingly.
William Henry Barringer, Matthew Paul McCullough, and Matthew Robert Nicely, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for Consolidated Plaintiffs Vietnam Association of Seafood Exporters and Producers and certain of its individual member companies.
Nathaniel Jude Maandig Rickard and Roop Kiran Bhatti, Picard, Kentz & Rowe, LLP, of Washington, DC, for Consolidated Plaintiff and Defendant-Intervenor Ad Hoc Shrimp Trade Action Committee.
Kara Marie Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of Counsel on the brief was James H. Ahrens II, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
OPINION AND ORDER
Kelly, Judge:
Before the court for review is the U.S. Department of Commerce‘s (“Commerce” or “the Department“) remand determination filed pursuant to the court‘s order in
In Tri Union I, the court granted Defendant‘s request to remand “for Commerce to reconsider [Ad Hoc Shrimp Trade Action Committee]‘s arguments concerning Commerce‘s reliance on Bangladeshi labor wage rate data” from the Bangladesh Bureau of Statistics (“BBS data“), a government source, to value the labor factor of production in this review. Tri Union I, 40 CIT at ___, 163 F.Supp.3d at 1312-13. On remand, Commerce continued to use BBS data to value the labor factor of production (“FOP“) in this review, providing further explanation of its decision to do so in light of Ad Hoc Shrimp Trade Action Committee‘s (“Ad Hoc Shrimp“) arguments that the Bangladeshi wage rate data is aberrational and unreliable due to systemic labor abuses in the Bangladeshi shrimp industry. Remand Results 5-42. For the reasons that follow, the court remands again to Commerce for further consideration of Ad Hoc Shrimp‘s argument that record evidence of alleged labor abuses in the Bangladeshi shrimp industry renders the BBS data aberrational, unreliable, and not reflective of actual labor conditions in a market economy at comparable economic development to the Socialist Republic of Vietnam.
BACKGROUND
On March 29, 2013, Commerce initiated the eighth administrative review of the antidumping duty (“ADD“) order covering certain frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam“) for the period of February 1, 2012 through January 31, 2013. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part,
Prior to publication of the preliminary results, petitioner Ad Hoc Shrimp submitted comments regarding the primary surrogate country selection. Comments on Surrogate Country Selection, PD 133-137, bar codes 3152484-01-04 (Aug. 30, 2013) (“Ad Hoc Shrimp Surrogate Country Comments“).1 In this submission, Ad Hoc Shrimp argued that Commerce should not select Bangladesh as a primary surrogate country because, “as a consequence of the pervasive labor abuses in Bangladesh[,] the two countries are not economically comparable.” Id. at 2. Ad Hoc Shrimp placed evidence on the record documenting alleged “aberrational labor conditions—comprised of severe abuse of labor and disregard for workers’ rights—permeating the entire supply chain of the Bangladesh shrimp industry.” Id.
On March 24, 2014, Commerce published its preliminary results. See Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam,
Fоllowing publication of the preliminary results, Ad Hoc Shrimp placed on the record additional documentation of alleged labor abuses in the shrimp industry in Bangladesh and ILO data for five countries (Guyana, India, Indonesia, Nicaragua, and Philippines)3 that Ad Hoc Shrimp contended are economically comparable to Vietnam. Post-Prelim Evidentiary Submission Regarding Surrogate Country and Value Selection at Attach. 8, PD 221-222, bar code 3198211-01 (Apr. 28, 2014) (“Ad Hoc Shrimp Post-Prelim. Comments“). Ad Hoc Shrimp subsequently submitted a case brief to Commerce continuing to challenge the use of the BBS data, again arguing that the BBS data is aberrational and unreliable and highlighting the usable ILO data already on the record for economically comparable countries. Case Br. on Behalf of the Ad Hoc Shrimp Trade Action Committee 8-25, PD 234, bar code 3204785-01 (May 28, 2014) (“Ad Hoc Shrimp Agency Case Br.“). Ad Hoc Shrimp argued to Commerce that, notwithstanding the primary surrogate country selection, the BBS data should not be used to value the labor FOP.4 Id. at 2, 24.
On Septеmber 19, 2014, Commerce issued its final determination in the eighth administrative review of the ADD order covering certain frozen warmwater shrimp from Vietnam for the period of February 1, 2012 through January 31, 2013. See
Plaintiffs Tri Union Frozen Products, Inc., Mazzetta Company LLC, Ore-Cal Corporation, Consolidated Plaintiff Quoc Viet Seaproducts Processing Trading and Import-Export Co., Consolidated Plaintiffs Vietnam Association of Seafood Exporters and Producers (including certain of its individual member companies), and Consolidated Plaintiff Ad Hoc Shrimp respectively moved for judgment on the agency record challenging various aspects of Commerce‘s final determination. See Mem. Supp. Mot. Tri Union Frozen Products, Inc. J. Agency R., Mar. 30, 2015, ECF No. 48; Mem. Supp. Mot. Quoc Viet Seaproducts Processing Trading and Import-Export Co., Ltd. J. Agency R., Mar. 30, 2015, ECF No. 46; Resp‘t Pls. VASEP and Individual VASEP Members’ Br. Supp. Mot. J. Agency R., Mar. 30, 2015, ECF No. 50; Mot. Ad Hoc Shrimp Trade Action Committee for J. Agency R. Under USCIT Rule 56.2, Mar. 30, 2015, ECF No. 49-3 (“Ad Hoc Shrimp Br.“).5 Ad Hoc Shrimp challenged as unsupported by substantial evidence Commerce‘s use of the BBS data to value the labor factor of production in this review, arguing that the BBS data is aberrational and unreliable and renders the finаl results of the review unsupported by substantial evidence. Ad Hoc Shrimp Br. 15-30. Additionally, Ad Hoc Shrimp argued that Commerce failed to explain why the BBS data was reliable and non-distortive. See id. at 23-24. In response, Defendant requested remand for Commerce to consider Ad Hoc Shrimp‘s arguments that the BBS wage rate data is aberrational. See Def.‘s Resp. in Opp‘n to Pls.’ Mots. J. Agency R. 88-89, Sept. 10, 2015, ECF No. 73. In Tri Union I, the court sustained Commerce‘s final determination in all respects other than its use of Bangladeshi labor wage rate data to value the labor factor of production, granting Defendant‘s request for remand to Commerce on that issue. Tri Union I, 40 CIT at ___, 163 F.Supp.3d at 1312-13.
On September 1, 2016, Commerce issued the Remand Results. See generally Remand Results. On remand, Commerce continued to rely on the BBS data to value the labor FOP in this review. Id. at 5-42. Commerce continued to find that the BBS data provided the best available information for valuing the labor FOP as it re-
Following remand, Ad Hoc Shrimp continues to challenge the BBS data as aberrational, unreliable, and therefore not the best available information with which to value the labor factor of production in this review. See Consolidated Pl. Ad Hoc Shrimp Trade Action Committee‘s Comments on Final Results of Redetermination to Court Remand 6-30, Dec. 2, 2016, ECF No. 125 (“Ad Hoc Shrimp Remand Comments“). Ad Hoc Shrimp also argues that Commerсe has failed to explain why the data is reliable and non-aberrational in light of the record evidence. See id. Defendant argues that substantial evidence supports Commerce‘s selection of the Bangladeshi data as the best available surrogate value data, contending that Ad Hoc Shrimp has not demonstrated the data to be aberrational or unreliable. See Def.‘s Resp. to Comments on Remand Results 7-25, Mar. 23, 2017, ECF No. 133 (“Def.‘s Remand Comments“).
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to
DISCUSSION
Ad Hoc Shrimp argues on remand, as it did before the agency and before this court prior to remand, that the BBS data is unreliable and aberrational, and that Commerce has failed to explain why the data is reliable and non-aberrational in light of the record evidence. See Ad Hoc Shrimp Remand Comments 6-30; see also Ad Hoc Shrimp Br. 13-31; Ad Hoc Shrimp Agency Case Br. at 8-25. Defendant contends that Commerce‘s selection of the BBS data is supported by substantial evidence as Commerce found that it is the best available information on the record to value the labor FOP. Def.‘s Remand Comments 10-25. Defendant also contends that Commerce reasonably determined Ad Hoc Shrimp cannot undermine Commerce‘s finding without demonstrating quantitatively that the BBS data are aberrational or unreliable. Id. at 12-25.
In antidumping cases, when the exporting country is a nonmarket economy
Commerce endeavors to use data that is non-aberrational and reliable. See Antidumping Duties; Countervailing Duties,
One of the FOPs that Commerce values is labor, i.e., the wage rate for the industry in which the subject merchandise is produced. See
In this review, Commerce did not choose labor data from ILO Chapter 6A for the primary surrogate country, Labor Methodologies,
Commerce‘s reasons for dismissing the record evidence put forth by the Plaintiff without further investigation and analysis are inadequate given the substantial evidence standard. Commerce‘s ultimate determination must be supported by substantial evidence and “[t]he substantiality of evidence must take into account whatever in the record fairly detracts from its weight.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951); Tudor v. Dep‘t of Treasury, 639 F.3d 1362, 1366 (Fed. Cir. 2011) (same). The substantial evidence standard of review essentially asks whether, given the evidence on the record as a whole, the agency‘s conclusion was reasonable. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir. 2006). Plaintiff‘s evidence leads to the reasonable inference that the data is aberrational and not reliable and therefore fairly detracts from Commerce‘s finding that the BBS data is the best information available. Therefore, Commerce must explain why the BBS data is nonetheless a reasonable choice for the best available information.
First, Commerce explains that, to determine whether a surrogate value is aberrational, it conducts “a quantitative, measureable analysis,” Remand Results 12, and that, in “its well established practice” for determining aberration, the agency “compares a dataset to a meaningful benchmark to determine whether a particular dataset is an outlier.”13 Id. at 31-32. Plaintiff placed on the record evidence of the ILO Chapter 6A labor data from Guyana, India, Nicaragua, and Philippines, and Chapter 5B labor data from Indonesia, with which to compare the BBS data.14 See Ad Hoc
Second, Commerce suggests that Plaintiff must not only compare the BBS data to benchmarks but also indicate how the labor abuses affected the wage rates.16 Remand Results 39. It is unclear to the court what exactly Commerce wishes to see or how a party should endeavor to supply this information. Without more direction from Commerce, such a broad demand is unreasonable given the record evidence in this case.17 It is Commerce‘s practice not to use
Equally problematic in Commerce‘s response to Plaintiff‘s record evidence in this case is its failure to articulate a standard with respect to labor data. Despite stating its preference to avoid aberrational or unreliable data, see Antidumping Duties; Countervailing Duties,
Further, here, Commerce does not adequately explain what it means by “reliable” with respect to labor data, although it implies that aberrational data would be unreliable. See Remand Results 23 n.90. Even when Commerce recounts what it has found to be “not unreliable,” the agency offers no insight into how a standard might be applied in this case. See Remand Results 16 (discussing Steel Wire Garment Hangers From the People‘s Republic of China,
Commerce also does not explain why, given this record, it finds the data to be an appropriate proxy for Vietnam, reflective of a hypothetical Vietnamese market economy. Surrogate values are used as proxies with which to create a hypothetical market economy price. See Nation Ford, 166 F.3d at 1378. Evidence of systemic abuse, including forced and child labor, specific to the Bangladeshi shrimp industry detracts from the representativeness of the BBS data and therefore undermines the market-based approach that Congress sought by requiring that Commerce use surrogate values when calculating normal value for subject merchandise from NME countries.18 See Antidumping Duties; Countervailing Duties,
Commerce‘s reticence to accept Ad Hoc Shrimp‘s arguments seems to stem from its “strong preference” to select data from the primary surrogate country.19 See Remand Results 10. Commerce states that the BBS data is the only available wage rate data from Bangladesh. Id. at 8-10 (noting that Labor Methodologies indicates that the best methodology is to use “industry specific data from the primary surrogate country,” and that using the BBS data “results in the use of a uniform basis
Defendant contends that Commerce cannot determine whether the BBS data is aberrational or unreliable because the Plaintiff has failed in its burden to make an adequate record so that Commerce can perform the quantitative analysis it wishes to perform. Def.‘s Remand Comments 16, citing QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011); see also Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1337-38 (Fed. Cir. 2016). Although the burden lies with the parties to populate an adequate record, see QVD Food Co., 658 F.3d at 1324, here Plaintiff has provided the record evidence that undermines the agency‘s determination and that must therefore be explained. Universal Camera Corp., 340 U.S. at 488, 71 S.Ct. 456. Commerce‘s argument that the Plaintiff has not populated the record with necessary data suggests that Commerce rejects the inference that systemic labor abuses (including forced and child labor) detract from the reliability of BBS data as representative of Bangladeshi labor costs and/or labor costs in a hypothetical market economy which is economically comparable
Commerce contends that is not required “to conduct an analysis of working conditions when determining whether a particular set of data, like the BBS, is aberrational.” Remand Results 12. According to Commerce, socio-political factors are inapposite to its determination under
Commerce also contends that the record evidence submitted by Ad Hoc Shrimp is not measurable, “specific evidence” that “the BBS data itself, as a dataset, is distorted.” Remand Results 18, citing Camau Frozen Seafood Processing Import Export Corp. v. United States, 35 CIT ___, ___, 929 F.Supp.2d 1352, 1356 (2013) (finding no evidence of aberration where the record demonstrated only that the Bangladeshi data was “the lowest price in a range of prices.“). The evidence submitted by Ad Hoc Shrimp details workers in the Bangladeshi shrimp industry who are not paid or are underpaid for their work. See, e.g., Ad Hoc Shrimp Surrogate Country Comments at Attach. 3; Ad Hoc Shrimp Agency Case Br. at 10-13, citing Research on Indicators of Forced Labor. This evidence makes the wage rates unreliable, as they cannot be trusted to fully reflect compensation for the labor under market principles.
On second remand, Commerce must either reconsider its choice of the BBS data to value labor or it must address the record evidence of widespread labor abuses in the Bangladeshi shrimp industry that undermines Commerce‘s implicit findings that the BBS data is non-aberrational, reliable, and thus the best information available. Further, Commerce must articulate a reasonable method by which a petitioner can demonstrate aberration or unreliability where, as here, there is a claim of widespread, systemic labor abuse.
CONCLUSION
In accordance with the foregoing, it is hereby
ORDERED that Commerce‘s remand determination is remanded for further consideration consistent with this opinion. Specifically, upon remand, Commerce must:
(1) articulate a reasonable method by which a petitioner can demonstrate aberration or unreliability where, as here, there is a claim of widespread, systemic labor abuse; and
(2) address the record evidence of widespread labor abuses in the Bangladeshi shrimp industry that
(3) explain why the Bangladeshi wage rate data is reliable and not aberrational, in light of the record evidence of systemic labor abuses; or
(4) if the data is aberrational and unreliable, explain why it is nonetheless the best available information; or
(5) reconsider its determination that the Bangladeshi data is the best available information; and it is further
ORDERED that Commerce shall file its second remand determination with the cоurt within 45 days of this date; and it is further
ORDERED that Plaintiff shall have 30 days thereafter to file comments on the second remand determination; and it is further
ORDERED that Defendant shall have 15 days thereafter to file a reply to comments on the second remand determination.