Bosun Tools Co., Ltd. v. United States

• Court: Court of Appeals for the Federal Circuit
• Decided: January 10, 2022
• Docket: 21-1929
• Status: Unpublished

Opinion

Case: 21-1929 Document: 52 Page: 1 Filed: 01/10/2022

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

BOSUN TOOLS CO., LTD., DANYANG NYCL TOOLS MANUFACTURING CO., LTD., DANYANG WEIWANG TOOLS MANUFACTURING CO., LTD., GUILIN TEBON SUPERHARD MATERIAL CO., LTD., HANGZHOU DEER KING INDUSTRIAL AND TRADING CO., LTD., JIANGSU YOUHE TOOL MANUFACTURER CO., LTD., QUANZHOU ZHONGZHI DIAMOND TOOL CO., LTD., RIZHAO HEIN SAW CO., LTD., ZHEJIANG WANLI TOOLS GROUP CO., LTD., Plaintiffs-Appellants

CHENGDU HUIFENG NEW MATERIAL TECHNOLOGY CO., LTD., Plaintiff

v.

UNITED STATES, DIAMOND SAWBLADES MANUFACTURERS' COALITION, Defendants-Appellees ______________________

2021-1929, 2021-1930 ______________________

Appeals from the United States Court of International Trade in No. 1:18-cv-00102-CRK, Judge Claire R. Kelly. ______________________ Case: 21-1929 Document: 52 Page: 2 Filed: 01/10/2022

Decided: January 10, 2022 ______________________

GREGORY S. MENEGAZ, DeKieffer & Horgan, PLLC, Washington, DC, argued for plaintiff-appellant Bosun Tools Co., Ltd. Also represented by JAMES KEVIN HORGAN, ALEXANDRA H. SALZMAN.

LIZBETH ROBIN LEVINSON, Fox Rothschild LLP, for plaintiffs-appellants Danyang NYCL Tools Manufacturing Co., Ltd., Danyang Weiwang Tools Manufacturing Co., Ltd., Guilin Tebon Superhard Material Co., Ltd., Hang- zhou Deer King Industrial and Trading Co., Ltd., Jiangsu Youhe Tool Manufacturer Co., Ltd., Quanzhou Zhongzhi Diamond Tool Co., Ltd., Rizhao Hein Saw Co., Ltd., Zhejiang Wanli Tools Group Co., Ltd. Also represented by BRITTNEY RENEE POWELL, RONALD MARK WISLA.

JOHN JACOB TODOR, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for defendant-appellee United States. Also represented by BRIAN M. BOYNTON, JEANNE DAVIDSON, FRANKLIN E. WHITE, JR.; PAUL KEITH, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

STEPHANIE MANAKER BELL, Wiley Rein LLP, Washing- ton, DC, argued for defendant-appellee Diamond Saw- blades Manufacturers' Coalition. Also represented by DANIEL B. PICKARD, MAUREEN E. THORSON. ______________________

Before LOURIE, HUGHES, and CUNNINGHAM, Circuit Judges. LOURIE, Circuit Judge. Case: 21-1929 Document: 52 Page: 3 Filed: 01/10/2022

BOSUN TOOLS CO., LTD. v. US 3

Bosun Tools Co., Ltd. et al. 1 (collectively “Bosun”) ap- peal from the final judgment of the United States Court of International Trade (“the Trade Court”). Bosun Tools Co. v. United States, 493 F. Supp. 3d 1351 (Ct. Int’l Trade 2021) (“Decision”). The court sustained the United States De- partment of Commerce’s (“Commerce”) calculation of a 41.025% antidumping duty rate. J.A. 176–98 (“Second Re- mand”). Because substantial evidence supports the 41.025% rate, we affirm. BACKGROUND Bosun is an exporter of diamond sawblades from China. Diamond sawblades are “circular cutting tools with a diamond-impregnated cutting surface, or blade, used pri- marily to cut materials such as cement, marble, brick, tile, and stone.” Diamond Sawblades Mfrs. Coal. v. United States, 612 F.3d 1348, 1350 (Fed. Cir. 2010). Commerce investigated Bosun and determined that it was selling its product in the United States at a price lower than its fair value (referred to as “dumping”). See 19 U.S.C. § 1677(34). As a result, it issued an order imposing an an- tidumping duty. Diamond Sawblades and Parts Thereof from the People’s Republic of China and the Republic of Ko- rea: Antidumping Duty Orders, 74 Fed. Reg 57,145 (Nov. 4, 2009). Commerce reviewed that order annually in order to reassess the antidumping duty. See 19 U.S.C. § 1675(a).

1 The following companies joined Bosun’s opening brief, requesting the same relief as Bosun: Danyang NYCL Tools Manufacturing Co., Ltd., Danyang Weiwang Tools Manufacturing Co., Ltd., Guilin Tebon Superhard Material Co., Ltd., Hangzhou Deer King Industrial and Trading Co., Ltd., Jiangsu Youhe Tool Manufacturers Co., Ltd., Quan- zhou Zhongzhi Diamond Tool Co., Ltd., Rizhao Hein Saw Co., Ltd., and Zhejiang Wanli Tools Group Co., Ltd. See Appellants’ Notice of Joinder (July 6, 2021), ECF No. 21. Case: 21-1929 Document: 52 Page: 4 Filed: 01/10/2022

This appeal concerns Commerce’s seventh administrative review of that order. Defendant-appellee Diamond Saw- blades Manufacturers’ Coalition (DSMC) was the domestic petitioner. See Appellee Gov’t Resp. Br. 10. We begin with a brief overview regarding how Com- merce determines antidumping duty rates. I. When Commerce determines that an exporter is dump- ing, it is authorized to impose an antidumping duty. 19 U.S.C. § 1673. An antidumping duty equals the amount by which the normal value of the subject merchandise exceeds its export price. §§ 1673e(a)(1), 1677(35). Commerce refers to that excess amount as the “dumping margin.” See Yang- zhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370, 1372 (Fed. Cir. 2013) (“Bestpak”). Generally, Commerce must determine an individual dumping margin for each known exporter. 19 U.S.C. § 1677f–1(c)(1). However, when it is “not practicable” for Commerce to determine individual margins for each ex- porter, it may limit its examination to a “reasonable num- ber of exporters” that either constitute (1) a statistically representative sample of all known exporters or (2) account for the largest volume of the subject merchandise from the exporting country. § 1677f–1(c)(2). Commerce refers to those selected for individual investigation as “mandatory respondents.” Bestpak, 716 F.3d at 1372. Commerce utilizes a different methodology when cal- culating antidumping rates in proceedings involving non- market economy (“NME”) countries, such as China. In such cases, Commerce presumes that the exporters are un- der foreign government control and assigns them a single countrywide rate. Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1348 (Fed. Cir. 2016) (“Albe- marle”); 19 C.F.R. § 351.107(d). The countrywide rate is often based on adverse facts available (“AFA”), which Case: 21-1929 Document: 52 Page: 5 Filed: 01/10/2022

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Commerce applies when a company does not act to the best of its ability in complying with information requests. 19 U.S.C. § 1677e(b); Bestpak, 716 F.3d at 1373. Commerce’s presumption of government control is rebuttable; an ex- porter that shows independence from government control may apply for a different rate. Albemarle, 821 F.3d at 1348. After Commerce determines the rates for the manda- tory respondents, it then assigns a separate rate to the non- individually examined respondents (i.e., the “separate rate respondents”). It calculates that separate rate by averag- ing the rates of the mandatory respondents, excluding rates that are de minimis, zero, or based entirely on AFA.2 § 1673d(c)(5)(A). However, if the mandatory respondents are all assigned de minimis, zero, or AFA rates, the excep- tion in § 1673d(c)(5)(B) applies. In that scenario, Com- merce may calculate the separate rate by averaging the de minimis, zero, or AFA rates. More specifically, § 1673d(c)(5)(B) provides that: [Commerce] may use any reasonable method to es- tablish the estimated all-others rate for exporters and producers not individually investigated, in- cluding averaging the estimated weighted average dumping margins determined for the exporters and producers individually investigated. The Statement of Administrative Action (“SAA”) ac- companying the Uruguay Round Agreements Act, which Congress deems “authoritative,” 19 U.S.C. § 3512(d), pro- vides more guidance on that calculation, referred to as the

2 To calculate the separate rate in NME proceedings, Commerce relies on the methodology in § 1673d(c)(5), which describes the calculation of the “all-others rate” as- signed to non-mandatory respondents in market economy proceedings. Decision, 493 F. Supp. 3d at 1353 n.3. Case: 21-1929 Document: 52 Page: 6 Filed: 01/10/2022

“expected method.” It states that “[t]he expected method in such cases will be to weight-average the zero and de min- imis margins and margins determined pursuant to the facts available.” SAA accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103–316 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4201. However, if Commerce concludes that the expected method is “not feasible” or “re- sults in an average that would not be reasonably reflective of potential dumping margins,” then it “may use other rea- sonable methods.” Id. II. We now turn to Commerce’s seventh administrative re- view of its antidumping duty order, covering November 1, 2015, through October 31, 2016. See Initiation of Anti- dumping & Countervailing Duty Admin. Reviews, 82 Fed. Reg. 4,294 (Dep’t Commerce Jan. 13, 2017). As relevant here, in the previous administrative reviews, Bosun’s anti- dumping rates were all above de minimis. Second Remand, at J.A. 190. When conducting the seventh administrative review, Commerce determined that it would not individually re- view every company. J.A. 84. Rather, it selected as man- datory respondents the two companies accounting for the largest volume of exports: the Jiangsu Fengtai Single En- tity (“Fengtai”) and Chengdu Huifeng New Material Co., Ltd. (“Chengdu”). J.A. 89. Commerce assigned the first exporter, Fengtai, an AFA China-wide rate of 82.05%. 3 See Diamond Sawblades and Parts Thereof from China, 83 Fed. Reg. 17,527 (Dep’t of Commerce Apr. 20, 2018); J.A. 123–128. However, it

3 Fengtai rebutted the presumption of government control. However, because it was uncooperative, Com- merce assigned Fengtai an AFA rate that equaled the China-wide rate from a prior proceeding. J.A. 127–28. Case: 21-1929 Document: 52 Page: 7 Filed: 01/10/2022

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assigned the second exporter, Chengdu, a 0% rate (follow- ing an appeal and a remand). J.A. 114–18, 128; Bosun Tools Co., Ltd. v. United States, 405 F. Supp. 3d 1359 (Ct. Int’l Trade 2019); J.A. 140–59 (“First Remand”). Commerce then calculated the rate for the remaining companies, including Bosun. Bosun asserted that it was free from government control and thus should receive a separate rate rather than the AFA China-wide rate. Com- merce agreed. J.A. 96–97, 128, 149. Accordingly, it calcu- lated a separate rate for Bosun. Because the only two antidumping rates in the review were AFA or 0%, Com- merce calculated the separate rate pursuant to the excep- tion in § 1673d(c)(5)(B). Specifically, it averaged the two mandatory respondents’ rates: (1) Chengdu’s 0% rate and (2) Fengtai’s AFA China-wide rate of 82.05%. First Re- mand, at J.A. 149, 155. The resulting separate rate for Bo- sun was 41.025%. Id. Commerce also assigned the 41.025% rate to the remaining separate-rate respondents. Id. Bosun appealed to the Trade Court. That court re- manded the case to Commerce. It held that Commerce “failed to consider evidence indicating that the 41.025[%] rate is not reasonably reflective of the separate rate re- spondents’ dumping.” Bosun Tools Co. v. United States, 463 F. Supp. 3d 1309, 1318 (Ct. Int’l Trade 2020). That evidence included antidumping rates from prior reviews. Id. at 1318–19. On remand, in accordance with the Trade Court’s or- der, Commerce considered the evidence concerning prior antidumping rates. In light of that evidence, it concluded that the 41.025% rate was reasonable. Specifically, it ex- plained that the 41.025% rate was consistent with a gen- eral trend of increasing rates. Second Remand, at J.A. 185–86. Bosun appealed again. This time, the Trade Court af- firmed. Like Commerce, the court determined that the Case: 21-1929 Document: 52 Page: 8 Filed: 01/10/2022

41.025% rate was reasonable given the general upward trend in antidumping rates over time. Decision, 493 F. Supp. 3d at 1356–57. Bosun appealed to this court. The other separate-rate respondents joined Bosun’s brief on appeal. See Appel- lants’ Notice of Joinder (July 6, 2021), ECF No. 21. Be- cause both Bosun and the separate-rate respondents make the same arguments, we address them together. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5). DISCUSSION This court reviews decisions of the Trade Court con- cerning Commerce’s antidumping determinations by ap- plying the same standard of review used by the Trade Court. See Bestpak, 716 F.3d at 1377. At the same time, “‘we give great weight to the informed opinion’ of that court, which has expertise in international trade matters.” Chemtall, Inc. v. United States, 878 F.3d 1012, 1018 (Fed. Cir. 2017) (quoting Schlumberger Tech. Corp. v. United States, 845 F.3d 1158, 1162 (Fed. Cir. 2017)). Commerce’s determination will be sustained unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). A finding is supported by substantial evidence if a reasonable mind might accept the evidence to support the finding. Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). “An agency finding may still be supported by substantial evi- dence even if two inconsistent conclusions can be drawn from the evidence.” Ad Hoc Shrimp Trade Action Comm. v. United States, 802 F.3d 1339, 1348 (Fed. Cir. 2015) (quoting Consolo v. Fed. Maritime Comm’n, 383 U.S. 607, 619–20 (1966)). Bosun raises three challenges on appeal. Specifically, Bosun argues that Commerce’s calculation of a 41.025% rate was not reasonably reflective of its potential dumping rate because it was (1) based on an AFA rate, (2) based on data that are not contemporaneous with the period of Case: 21-1929 Document: 52 Page: 9 Filed: 01/10/2022

BOSUN TOOLS CO., LTD. v. US 9

review, and (3) inconsistent with historical dumping rates. We address each argument in turn. I. Bosun first asserts that Commerce’s 41.025% rate was unreasonable because it was based in part on Fengtai’s AFA rate of 82.05%. According to Bosun, because it coop- erated throughout the review, Commerce should not have assigned it a separate rate based on AFA. The government responds that Commerce was authorized by statute to rely on the AFA rate. 4 We agree with the government. Bosun’s argument is expressly foreclosed by statute. As explained above, § 1673d(c)(5)(B) provides that Commerce may factor an AFA rate into its calculation of a separate rate. The SAA reinforces the statute. It provides that relying on an AFA rate is not only permitted, but expected. See SAA at 4201. Bosun also fails to address our approval of the method- ology in § 1673d(c)(5)(B). For example, in Albemarle Corp. v. United States, we stated that the methodology “makes sense in light of the general assumption underlying the statutory framework.” 821 F.3d 1345, 1353 (Fed. Cir. 2016). Specifically, we explained that “[t]he very fact that the statute contemplates using data from the largest vol- ume exporters suggests an assumption that those data can be viewed as representative of all exporters.” Id. We fur- ther emphasized that “Congress has unmistakably ex- plained” its preference for such “methodology.” Id. at 1354. And, although Albemarle concerned a case with de minimis rates rather than AFA rates, its reasoning is equally appli- cable here; the same statutory language in § 1673d(c)(5)(B)

4 Because DSMC and the government make substan- tially the same arguments, we treat them together. Case: 21-1929 Document: 52 Page: 10 Filed: 01/10/2022

that permits use of de minimis rates also permits use of AFA rates. Notwithstanding the language of § 1673d(c)(5)(B), Bo- sun insists that, under this court’s precedent in Bestpak, Commerce cannot rely on the AFA rate in calculating a sep- arate rate for a cooperative exporter. Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir. 2013). We disagree with Bosun’s reading of that case. Bestpak concerned an antidumping duty investigation. Id. at 1374. As here, Commerce calculated the separate rate by averaging the mandatory respondents’ de minimis and AFA rates. One cooperating separate-rate respondent ap- pealed. The Trade Court affirmed. On appeal to this court, we vacated the Trade Court’s decision. Id. at 1381. We explained that the record was “so thin” that Commerce could not have reasonably “found evidence to support [its] determination.” Id. at 1379. In so holding, we did not cre- ate a categorical rule against relying on an AFA rate. In fact, we expressly confirmed that Commerce’s separate rate calculation could include an AFA rate. See id. at 1378 (“[Section] 1673d(c)(5)(B) and the SAA explicitly allow Commerce to factor both de minimis and AFA rates into the calculation methodology.”) (emphases added). We simply found that Commerce’s methodology was unreasonable “as applied,” given the lack of data. Id. Here, in contrast, there was no such lack of data. As will be explained further be- low, Commerce confirmed the reasonableness of the sepa- rate rate in view of historical dumping trends. Accordingly, Commerce did not err in factoring Feng- tai’s AFA rate of 82.05% into its calculation. II. Bosun next asserts that Commerce’s rate was unrea- sonable because it was based on data that are not contem- poraneous with the relevant period of review. Specifically, Bosun contends that Commerce should not have relied on Fengtai’s 82.05% rate because it was a rate derived from a Case: 21-1929 Document: 52 Page: 11 Filed: 01/10/2022

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prior administrative review. See Diamond Sawblades and Parts Thereof from the People’s Republic of China, 81 Fed. Reg. 2,843, 2,844 (Dep’t of Commerce Jan. 19, 2016). Bosun’s argument is unpersuasive. Again, Bosun ig- nores that its argument is foreclosed by statute. First, as explained above, Commerce may rely on an AFA rate when calculating the separate rate. § 1673d(c)(5)(B). Second, under § 1677e(b)(2)(C), when de- termining an AFA rate, Commerce may rely on information from prior administrative reviews. Taken together, the statutory framework allows Commerce, when calculating the separate rate, to rely on an AFA rate derived from a prior administrative review. Additionally, Commerce did not rely on the 82.05% rate arbitrarily, as Bosun insinuates. Rather, Commerce fac- tored in that rate after determining that Fengtai, the man- datory respondent, failed to cooperate in the seventh administrative review, at issue here. Accordingly, Com- merce’s analysis was proper. III. Finally, Bosun asserts that Commerce’s rate was un- reasonable because it was inconsistent with historical dumping rates. According to Bosun, its rates have “gener- ally been low” and the 41.025% rate was “contrary to [its] trend of dumping.” Appellant’s Opening Br. 5–6. Bosun further emphasizes that Commerce ascribed too much weight to the 39.66% rate in the fifth administrative review and too little weight to lower rates from other administra- tive reviews. Those include the 6.19% rate from the sixth administrative review and the 0% rate from the ninth ad- ministrative review. The government responds that the 39.66% rate was reasonable given the general upward trend in dumping rates over time. A table, shown below, summarizes the rates from those reviews. Case: 21-1929 Document: 52 Page: 12 Filed: 01/10/2022

Appellant’s Rep. Br. 11–12. We agree with the government. As is clear from the record, Commerce’s 41.025% rate was supported by sub- stantial evidence. First, as Commerce explained, Bosun’s individually calculated rates were all above de minimis. Second Re- mand, at J.A. 190. Similarly, the separate rates trended upward, from 4.83% in the third administrative review, to 12.05% in the fourth administrative review, to 39.66% in the fifth administrative review (which was also assigned to Bosun). Second Remand, at J.A. 185–86. And, as Com- merce pointed out, the 39.66% rate was “almost the same” as the 41.025% rate. Id. at J.A. 186. Case: 21-1929 Document: 52 Page: 13 Filed: 01/10/2022

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Second, Commerce appropriately weighed the 39.66% rate the most heavily. The 39.66% rate was significant be- cause it was derived from the most recent review in which the “separate rate for non-selected respondents was based on calculated rates above de minimis.” Id. at J.A. 185–86. Still, Bosun emphasizes that, because it was not a manda- tory respondent in the fifth administrative review, the 39.66% rate was not representative of its dumping rates. Bosun’s assertion is misplaced. Pursuant to 19 U.S.C. § 1677f–1(c)(2), mandatory respondents are assumed to be “representative of all exporters.” Changzhou Hawd Floor- ing Co. v. United States, 848 F.3d 1006, 1012 (Fed. Cir. 2017) (quoting Albemarle, 821 F.3d at 1353). Indeed, “[t]he representativeness of the investigated exporters is the es- sential characteristic that justifies an ‘all others rate.’” Id. (quoting Nat’l Knitwear & Sportswear Ass’n v. United States, 779 F.Supp. 1364, 1373–74 (Ct. Int’l Trade 1991)). Because Bosun does not adequately explain why the 39.66% rate was nonrepresentative, its argument cannot be persuasive. Third, Commerce did not ignore Bosun’s earlier anti- dumping rates. Indeed, it expressly acknowledged the rel- atively lower rates from prior reviews. Second Remand, at J.A. 185, 197. However, it emphasized that the more con- temporaneous 39.66% rate supported an upward trend. Id. at J.A. 192. And, even more importantly, several of the lower rates that Bosun points to on appeal were hardly rel- evant to Commerce’s analysis. For example, the 6.19% rate from the sixth administrative review was no longer in ef- fect when Commerce conducted its analysis; by that point, Commerce had adjusted it upward to 82.05% (following an appeal and remand). See Second Remand, at J.A. 185. Commerce later adjusted it again to 15.91%. Diamond Sawblades Mfrs. Coalition v. United States, Ct. Int’l Tr., No. 17-167, July 13, 2021, ECF No. 74-1. Similarly, the 0% rate from the ninth administrative review was neither fi- nalized nor on the administrative record during Case: 21-1929 Document: 52 Page: 14 Filed: 01/10/2022

Commerce’s review, which the Trade Court explained and Bosun does not dispute. Decision, 493 F. Supp. 3d at 1357. Finally, although Bosun argues that Commerce’s 41.025% rate was unreasonable, its proposed alternative rate—0%—was not realistic. See Appellant’s Br. 24. In- deed, Commerce rejected Bosun’s request for a 0% rate. Commerce emphasized that the 0% rate was inconsistent with Bosun’s individually calculated rates, which were all above de minimis. Second Remand, at J.A. 186–90. More- over, according to Commerce, assigning Bosun a 0% rate would be contrary to its “practice of assigning one rate to all non-selected separate rate respondents in one segment of a proceeding.” Id. at J.A. 191. Accordingly, Commerce reasonably determined that the 41.025% rate was reflective of Bosun’s historical dump- ing rates. Bosun’s argument amounts to nothing more than a request for us to reweigh the evidence. We decline to do so on appeal. See Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 815 (Fed. Cir. 1992). In summary, we conclude that Commerce’s calculation of the 41.025% rate was supported by substantial evidence. CONCLUSION We have considered Bosun’s remaining arguments but find them unpersuasive. For the foregoing reasons, we af- firm the decision of the Trade Court. AFFIRMED