VIET I-MEI FROZEN FOODS CO., LTD., Plaintiff-Appellant v. UNITED STATES, Ad Hoc Shrimp Trade Action Committee, Defendants-Appellees
2016-1006
United States Court of Appeals, Federal Circuit
Decided: October 11, 2016
1099
KARA WESTERCAMP, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. Also represented by BENJAMIN C. MIZER, JEANNE E. DAVIDSON, PATRICIA M. MCCARTHY, JOSHUA E. KURLAND; MYKHAYLO GRYZLOV, Office of Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.
MEIXUAN LI, Picard Kentz & Rowe LLP, Washington, DC, argued for defendant-appellee Ad Hoc Shrimp Trade Action Committee. Also represented by NATHANIEL RICKARD, ANDREW WILLIAM KENTZ, ROOP BHATTI.
Before PROST, Chief Judge, CHEN and STOLL, Circuit Judges.
CHEN, Circuit Judge.
Viet I-Mei Frozen Foods Co., Ltd., successor in interest to Grobest & I-Mei Industrial (Vietnam) Co., Ltd. (collectively Grobest), appeals the decision of the Court of International Trade (CIT) affirming the U.S. Department of Commerce‘s final results in the reconducted fourth administrative review of the antidumping duty order on certain frozen warmwater shrimp from Vietnam. See Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam, 79 Fed. Reg. 15,309 (Dep‘t of Commerce Mar. 19, 2014) (final results of reconducted administrative review of Grobest and intent not to revoke) (Reconducted Final Results). Grobest argues that the CIT erred in sustaining Commerce‘s decision to refuse Grobest‘s request to terminate the individual examination of Grobest and also erred in sustaining Commerce‘s decision to assign a 25.76% antidumping duty rate using adverse facts available after Grobest failed to cooperate with the examination. See Viet I-Mei Frozen Foods Co. v. United States, 83 F.Supp.3d 1345 (Ct. Int‘l Trade 2015). For the reasons below, we affirm.
BACKGROUND
A.
The antidumping statute provides for the assessment of remedial duties on foreign merchandise sold in the United States at less than fair market value that materially injures or threatens to injure a domestic industry. See
In cases where a large number of exporters and producers are involved in an administrative review proceeding and it is not practical to determine individual rates for each, the antidumping duty statute allows Commerce to limit individual examination to a reasonable number of companies.
In addition, a company not selected for individual examination may voluntarily submit questionnaire responses containing all of the information requested from mandatory respondents and request individual examination under
Proceedings involving a nonmarket economy (NME) country operate slightly differently than the typical proceeding covering goods exported from a country with a market-based economy. Because an NME does not operate on market principles of cost or pricing structures, the normal value may not reflect the fair value of the merchandise. See id.
the presumption that all respondents in the investigation are under foreign government control and should receive a single countrywide dumping rate. Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1348 (Fed. Cir. 2016). This presumption is rebuttable and a company importing goods covered by the order can prove, through responses to a separate rate questionnaire, that it is not subject to government control and is entitled to a separate, individualized rate. See, e.g., Transcom, Inc. v. United States, 294 F.3d 1371, 1373 (Fed. Cir. 2002). Thus, in NME proceedings, a company that demonstrates its entitlement to separate rate status receives either an individual rate (as a mandatory or voluntary respondent) or the weighted-average separate rate (if individual examination is impractical or unduly burdensome). And a company that fails to demonstrate independence from the NME country receives the higher countrywide rate.
B.
On February 1, 2005, Commerce made a final determination that certain frozen warmwater shrimp from Vietnam were likely being sold at less than fair market value and published a duty order directing customs officers to assess antidumping duties on imports of the subject merchandise. Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam, 70 Fed. Reg. 5,152 (Dep‘t of Commerce Feb. 1, 2005) (notice of amended final determination of sales at less than fair value and antidumping duty order). Vietnam is designated as an NME country and Commerce begins with a rebuttable presumption that a company operating within Vietnam is subject to state control. See Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 Fed. Reg. 71,005 (Dep‘t of Commerce Dec. 8, 2004). Commerce presumptively applies a single countrywide antidumping rate of 25.76%—the Vietnam-wide rate—to all imports of frozen warmwater shrimp from Vietnam.
Grobest is a producer of frozen warmwater shrimp from Vietnam covered by the antidumping duty order. Although not individually examined as a mandatory or voluntary respondent during the first three administrative review periods (AR1-AR3), Grobest demonstrated its entitlement to separate rate status and was assigned—for reasons not relevant here—a separate antidumping duty rate of 0% in each review period.2 In February of 2009, Grobest and the domestic industry of warmwater shrimp producers—the Ad Hoc Shrimp Trade Action Committee (the Domestic Producers)—each submitted separate requests for review of Grobest in the fourth administrative review of the duty order (AR4), covering the period of February 1, 2008, through January 31, 2009.
In March 2009, Commerce initiated the review of nearly 200 exporters and producers for AR4. Because of the large number of companies involved in AR4, Commerce determined that individual examination of each would be impractical. Instead, as it had done in previous review periods, Commerce selected for mandatory individual examination the two largest companies by
Grobest brought suit in the CIT on August 19, 2010, challenging Commerce‘s refusal to individually examine Grobest as a voluntary respondent.3 Grobest argued the refusal was unlawful because Commerce is required to examine any company that seeks individual review unless it would be unduly burdensome pursuant to
On October 17, 2012, Commerce published a notice that it would conduct the administrative review of Grobest consistent with the CIT‘s Final Judgment. Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam, 77 Fed. Reg. 63,786 (Dep‘t of Commerce Oct. 17, 2012) (notice of court decision not in harmony with final results of administrative review, notice of re-conducted administrative review of Grobest & I-Mei Industrial (Vietnam) Co., Ltd., and notice of amended final results of administrative review). But then Grobest had a change of heart. On December 12, 2012, less than two months later, Grobest submitted a request to withdraw its participation from the individual examination that it had been fighting for years to secure. Grobest stated that its reversal of position was “due to the significant management, personnel and accounting changes that have occurred ... since the time of the period of review.” JA3275. Without any explanation, Grobest continued that “[i]n short, the administrative and legal costs of this examination are greater than the company wishes to incur at this time.” Id. Instead, Grobest requested to be given the 3.92% separate rate it previously disputed.
Commerce did not respond to Grobest‘s withdrawal request and issued a supplemental questionnaire seeking clarification of discrepancies in Grobest‘s previously reported data and further details concerning Grobest‘s affiliations. Commerce warned Grobest that failure to provide complete and accurate information by the response deadline of January 29, 2013 may result in a finding based on adverse facts available.
On February 6, 2013, Commerce indicated its intent to proceed with the individual examination of Grobest and it again sought answers to the supplemental questionnaire, extending the deadline to February 13, 2013. Commerce reiterated that failure to cooperate may result in the application of adverse facts to arrive at a rate. Once again, on the due date set by Commerce, Grobest refused to answer the questionnaire and instead submitted a third request to discontinue examination, claiming again that it no longer wished to continue with the examination because the costs of proceeding were greater than the company wished to incur.
In September 2013, Commerce issued the preliminary results of the reconducted AR4 review of Grobest (Reconducted Preliminary Results). In response to Grobest‘s requests to forgo the individual examination ordered in the CIT‘s Final Judgment, Commerce stated it “does not consider that the circumstances here warrant such a departure.” JA3313. Commerce went on to explain:
Grobest‘s principle [sic] contention is that it is unwilling to incur the administrative and legal costs associated with participating in the administrative review. However, a company may not impede an antidumping proceeding by refusing to incur administrative and legal costs associated with participating in the proceeding. Moreover, the Department has spent significant resources as a result of Grobest‘s challenge to the Department‘s original decision not to review Grobest individually.
Id. Turning next to the appropriate rate to assign Grobest, Commerce preliminarily determined that Grobest failed to cooperate by not acting to the best of its ability to comply with repeated requests for information and impeded the proceeding within the meaning of
Grobest requested that Commerce reconsider its conclusions in the Reconducted Preliminary Results. Grobest first argued that Commerce should rescind the reconducted review because the CIT‘s Final Judgment should not be considered binding on Commerce and Grobest filed a request to withdraw within the 90-day time period pursuant to
In March, 2014, Commerce published the Reconducted Final Results, in which it continued to reject Grobest‘s request to rescind the examination and affirmed its decision to apply the Vietnam-wide rate of 25.76%. Commerce reasoned that the CIT had “specifically ordered [Commerce] to conduct an individual examination of Grobest, [and] rescission would be in conflict with the CIT order and judgment.” JA3376-77. Commerce next explained that Grobest‘s reliance on
Grobest filed a complaint with the CIT, appealing Commerce‘s Reconducted Final Results. Before the CIT, Grobest argued that Commerce unlawfully refused to permit Grobest to withdraw its individual review request and that Grobest‘s assigned rate was retaliatory and impermissibly punitive. Grobest acknowledged that the statutory and regulatory framework does not expressly contemplate a voluntary respondent‘s rescission of a request for individual examination. However, it argued that the 90-day deadline found in
Commerce, for its part, stressed to the CIT that there was no regulation requiring Commerce to terminate the proceeding and the 90-day grace period contemplated by
Following briefing and oral argument, the CIT sustained Commerce‘s Reconducted Final Results. Viet I-Mei Frozen Foods Co. v. United States, 83 F.Supp.3d 1345 (Ct. Int‘l Trade 2015). The CIT found Grobest‘s professed reasons for requesting withdrawal unpersuasive, noting:
[T]his change of ownership occurred nearly two years prior to the entry of judgment, in favor of Grobest, on its initial request for individual examination. In that time, Grobest could easily have voluntarily dismissed its litigation in demand of individual examination (thereby obtaining the very result that Grobest now seeks), but chose not to do so.
Id. at 1356-57. The CIT also noted that Commerce was not required by any statutory or regulatory authority to terminate the examination. Id. at 1362. In addition, the CIT found that sound policy considerations warranted Commerce‘s treatment of voluntary respondents as mandatory respondents with no right to withdraw. Id. It went on to find Commerce‘s assignment of the Vietnam-wide rate of 25.76% was appropriate and not punitive given Grobest‘s failure to cooperate. Id. at 1363. Grobest timely appealed. We have jurisdiction under
DISCUSSION
This court reviews a CIT decision regarding Commerce‘s antidumping determinations de novo, applying the same standard used by the CIT in evaluating Commerce‘s determinations, findings, and conclusions. Apex Exports v. United States, 777 F.3d 1373, 1377 (Fed. Cir. 2015). We will uphold Commerce‘s decision unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.”
I.
We turn first to Grobest‘s argument that Commerce erred when it denied Grobest‘s request to rescind the reconducted individual examination. Grobest concedes that voluntary respondents, once selected, do not have an absolute right to determine whether an individual examination will proceed. Nevertheless, it argues that Commerce was required to terminate the individual examination of Grobest based on the circumstances here.
The foundation for Grobest‘s argument is that the administrative and policy concerns embedded in
First, Grobest contends that Commerce incorrectly believed it was bound as a matter of law by the CIT‘s earlier Final Judgment ordering Commerce to conduct an individual examination of Grobest and similarly bound by the Domestic Producers’ objection to rescinding the examination. It thus argues that Commerce improperly failed to consider the circumstances weighing in favor of rescinding the voluntary review. Next, Grobest argues that to the extent Commerce undertook any evaluation of the circumstances, Commerce‘s analysis was unreasonable given the timing of Grobest‘s request within the 90-day deadline set forth in
Like Commerce and the CIT, we reject Grobest‘s attempt to analogize its request to withdraw from the individual examination as a voluntary respondent with a withdrawal of a request for an administrative review under
If anything, Commerce‘s regulations point away from granting a voluntary respondent‘s request to cancel an individual examination it had requested. Under
We need not reach the issue of whether Commerce was in fact bound as a matter of law by the Final Judgment or the Domestic Producers’ objection (which the CIT also chose not to address) because we disagree with Grobest‘s characterization of Commerce‘s justifications for denying Grobest‘s request to rescind the individual review. Contrary to Grobest‘s allegation, Commerce explained in the Reconducted Preliminary and Final Results that multiple factors, including but not limited to the Final Judgment and the Domestic Producers’ objection, counseled against granting Grobest‘s request. Those additional considerations included Commerce‘s expenditure of resources to date and the insufficiency of Grobest‘s justification for seeking to avoid review. Thus, we reject Grobest‘s argument that Commerce somehow erred as a matter of law on that basis.
Moreover, we agree with Commerce that it was eminently reasonable for it to point to the CIT‘s Final Judgment as well as the Domestic Producers’ objections to Grobest‘s sudden desire to withdraw as legitimate reasons to maintain the individual examination. And given the nature of the supplemental questionnaire, Commerce appeared to have reasonable concerns with the veracity or completeness of Grobest‘s previously submitted data, warranting further investigation. Grobest also does not meaningfully refute Commerce‘s justification that it was not inclined to rescind the individual examination because it had already expended considerable time and resources in connection with the individual examination. Commerce‘s efforts reviewing Grobest‘s initial questionnaire responses, identifying and documenting numerous discrepancies in Grobest‘s representations (including the company‘s affiliations, the quantity and value of its sales of subject merchandise, and factors of production), and formulating supplemental questions to address those concerns cannot be readily dismissed as insignificant. These considerations all further support the reasonableness of Commerce‘s decision to continue the examination.
Conversely, Grobest‘s professed reason for withdrawing its request for review—the change in ownership—does not withstand scrutiny. The change of ownership
We also find unpersuasive Grobest‘s argument on appeal that withdrawal was necessary because it was no longer confident in its ability to provide complete and accurate data. Grobest neither voiced that concern to Commerce nor did it take advantage of the statutory procedures designed to address those concerns.4 Rather, it stated only that “the administrative and legal costs of this examination are greater than the company wishes to incur at this time.” JA3275. But, as Commerce explained in its Reconducted Preliminary Results, a respondent has no legitimate interest in impeding Commerce‘s investigations simply to avoid the costs of participating.
Accordingly, because Commerce‘s decision to continue the court-ordered individual examination was both a reasonable exercise of its authority and supported by substantial evidence, we affirm.
II.
Grobest next challenges the application of AFA and specifically the assignment of the 25.76% Vietnam-wide rate. First, Grobest argues that the application of AFA was unreasonable because its inability to cooperate in the reconducted individual examination was the direct result of
Commerce‘s prior unlawful actions and the years of litigation that ensued. Next, it argues that the specific AFA rate of 25.76%, more than five times the separate rate of 3.92%, was far beyond commercial reality and any deterrence factor warranted by the facts of this case. At most, Grobest argues, the proper adverse inference would have been to deny Grobest the benefit of voluntary examination and assign it the 3.92% separate rate it had fought for years to avoid.
During the course of an administrative review, when a respondent “withholds information that has been requested by [Commerce],” “fails to provide such information by the deadlines ... or in the form and manner requested,” “significantly impedes a proceeding,” or “provides such information but the information cannot be verified,” Commerce “shall” use “facts otherwise available” in reaching any necessary determinations.
In selecting an AFA rate, Commerce may use information from the petition, investigation, prior administrative reviews, or “any other information placed on the record.”
We first address Grobest‘s attempts to relieve itself from responsibility for Commerce‘s application of the AFA rules to derive a rate. Even if we were to accept Grobest‘s contention that it was unable to provide complete and accurate information due to the passage of time, that alone does not discharge its duty to act to the best of its ability in responding to Commerce‘s requests. Regardless of the circumstances that Grobest believed were the cause of its situation, “the statutory mandate that a respondent act to ‘the best of its ability’ requires the respondent to do the maximum it is able to do.” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003). Here, Grobest‘s rote explanation that it no longer wished to incur the costs of examination, its failure to explain the specific information it believed was missing or inaccurate, and its decision not to comply with the statutory procedures available to respondents with such concerns fall far short of Grobest‘s statutory obligation. Under these circumstances, we cannot say that Commerce‘s reliance on AFA was unreasonable.
We also reject Grobest‘s suggestion that at most an AFA rate of 3.92% would be appropriate here. That is the same rate that was received by cooperative respondents and indeed is lower than the 4.89% rate assigned to mandatory respondent Nha Trang Seafoods, who fully cooperated with Commerce and justified its entitlement to its separate rate. Thus, Grobest‘s proposal would only incentivize gamesmanship and undermine the purpose of the AFA provisions if recalcitrant respondents like Grobest were rewarded with favorable rates over those given to fully cooperative respondents. See SAA at 870 (explaining that Commerce “may employ [such] inferences ... to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully“). We find that substantial evidence supports Commerce‘s determination that the 25.76% Vietnam-wide rate was appropriate to ensure Grobest did not benefit from refusing to cooperate with Commerce‘s requests for complete information regarding its affiliations, sales of subject merchandise, and factors of production. Moreover, the selected rate was derived directly from the original investigation and corroborated by comparing the rate to the transaction-specific margins of cooperating respondents in AR4. Grobest has never meaningfully challenged this corroboration analysis or questioned the reliability of the Vietnam-wide rate. Thus, given Grobest‘s failure to cooperate in the examination and the lack of any specific challenge to Commerce‘s corroboration analysis, we find the application of the Vietnam-wide rate is amply supported by the record.
CONCLUSION
For these reasons, we find no error in Commerce‘s refusal to discontinue the individual examination of Grobest and assignment of an AFA duty rate of 25.76% after Grobest repeatedly refused to cooperate with Commerce‘s requests for information. We have considered the parties’
AFFIRMED
COSTS
No costs.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY, Children‘s Medical Center Corporation, Plaintiffs-Appellees
v.
SHIRE PHARMACEUTICALS, INC., NKA Shire Pharmaceuticals LLC, Shire Regenerative Medicine, Inc., Defendants-Appellants
2015-1881
United States Court of Appeals, Federal Circuit.
Decided: October 13, 2016