Guizhou Tyre Co. v. United States

2019 CIT 155
Procedural entryThis page is a short order in Guizhou Tyre Co. v. United States. Read the opinion of the Court — 348 F. Supp. 3d 1261
United States Court of International Trade·Decided December 10, 2019·No. Consol. 18-00100·Published

Opinion

Slip Op. 19- UNITED STATES COURT OF INTERNATIONAL TRADE

GUIZHOU TYRE CO., LTD.; GUIZHOU TYRE IMPORT & EXPORT CO., LTD.,

Plaintiffs,

and

TIANJIN UNITED TIRE & RUBBER Before: Richard W. Goldberg, Senior Judge INTERNATIONAL CO., LTD.; WEIHAI Consolidated Court No. 18-00100 ZHONGWEI RUBBER CO., LTD.;

Consolidated Plaintiffs,

v.

UNITED STATES,

Defendant.

OPINION AND ORDER

[The court remands to Commerce for a further analysis of the Export Buyer’s Credit Program. All other determinations made by the Department are sustained.] Dated: December 10, 2019

Matthew P. McCullough, Tung Nguyen, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for plaintiffs Guizhou Tyre Co., Ltd., and Guizhou Tyre Import & Export Co., Ltd.

John Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the brief was Orga Cadet, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C. Consol. Ct. No. 18-00100 Page 2

Goldberg, Senior Judge: Now before the court are the Final Results of Redetermination

Pursuant to Court Remand, ECF 46-1 (Aug. 27, 2019) (“Remand Results”), of the Department of

Commerce (“the Department” or “Commerce”) in the countervailing duty (“CVD”) investigation

of off-the-road tires from the People’s Republic of China (“PRC”) during the period of review

between January 1, 2015 and December 31, 2015. Certain New Pneumatic Off-the-Road Tires

from the People’s Republic of China, 83 Fed. Reg. 16,055 (Dep’t Commerce Apr. 13, 2018)

(final results), amended by Certain New Pneumatic Off-the-Road Tires from the People’s

Republic of China, 83 Fed. Reg. 32,078 (Dep’t Commerce July 11, 2018) (am. final results)

(“Amended Final Results”) and accompanying Issues & Decision Mem. (“I&D Mem.”).

Following the court’s remand back to Commerce, Guizhou Tyre Co. v. United States, 43 CIT __,

389 F. Supp. 3d 1315 (2019) (“Guizhou II”), the Department reviewed its determination on the

Export Buyer’s Credit Program (“EBCP” or “the Program”) and provided additional support for

its findings on distortion in the synthetic rubber market in 2015. See generally Remand Results.

Specifically, the Department affirmed its findings regarding the EBCP and doubled down on its

decision to apply an adverse inference that Plaintiffs used and benefited from the Program. Id. at

3í14. Additionally, the Department further explained its finding that the synthetic market was

not distorted in 2015. Id. at 14í16. This additional explanation demonstrated that the

composition of the synthetic rubber market in China changed significantly between 2014 and

2015. Id. at 15. Plaintiffs Guizhou Tyre Co. and Guizhou Tyre Import and Export Co.,

(collectively “Guizhou” or “Plaintiffs”) oppose Commerce’s Remand Results in its entirety. See

Pls.’ Comments on the Department of Commerce’s Remand Redetermination, ECF No. 48 (Sept.

26, 2019) (“Pls.’ Comments”). Consol. Ct. No. 18-00100 Page 3

The Department has provided adequate support for its finding distortion in the synthetic

rubber market. The evidence provided by Commerce indicates that market conditions in 2015

were not “nearly identical” to those in 2014, as Plaintiffs claim. For example, pursuant to

Commerce’s explanation, the synthetic rubber market underwent a significant increase in import

penetration. Therefore, the court sustains Commerce’s remand results as to the distortion

analysis. However, the court is not satisfied with Commerce’s remand results relating to the

EBCP. Once again, substantial evidence does not support the requisite threshold finding that

there is a gap in the record warranting the use of adverse facts available (“AFA”). The court

remands this issue back to Commerce for reconsideration in accordance with this opinion.

DISCUSSION

The court exercises jurisdiction under 28 U.S.C. § 1581(c). The court must hold

unlawful any determination, finding, or conclusion found “to be unsupported by substantial

evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

Further, “[t]he results of a redetermination pursuant to court remand are also reviewed ‘for

compliance with the court’s remand order.’” SolarWorld Ams., Inc. v. United States, 41 CIT __,

__, 229 F. Supp. 3d 1362, 1365 (2017) (quoting Xinjiamei Furniture (Zhangzhou) Co. v. United

States, 38 CIT __, __, 968 F.Supp.2d 1255, 1259 (2014)).

The Department has failed to “compl[y] with the court’s remand order,” id., as it relates

to Commerce’s application of the AFA statute to the EBCP. Therefore, the court remands that

portion of the Department’s determination back to Commerce for reconsideration consistent with

this opinion. As for the Department’s market distortion analysis, the court upholds Commerce’s

redetermination as now supported by substantial evidence on the record, in light of the reasoned

explanation now available to the court. Consol. Ct. No. 18-00100 Page 4

I. Synthetic Rubber Market Distortion Analysis

The Department determined that the 2015 synthetic rubber market was not distorted

during the period of review because state-owned producers accounted for 23.97 percent of

market consumption for synthetic rubber. Remand Results at 14. Therefore, Commerce used

Tier 1 benchmarks for imports to measure the adequacy of remuneration for this input. Plaintiffs

challenged this determination, arguing that the results were inconsistent with the Department’s

distortion findings in 2014 because similar market conditions existed in the two years. The court

agreed, noting that the evidence in the record demonstrated that the synthetic rubber market

between 2014 and 2015 was distinguished by only a few percentage points. Guizhou II, 43 CIT

at __, 389 F. Supp. 3d at 1324. And so, the court concluded, the Department would be

hard-pressed to justify a change in its distortion analysis, especially where it failed to provide

much additional insight into its ultimate determination. Id. See also Hussey Copper. v. United

States, 17 CIT 993, 997, 834 F. Supp. 413, 418 (1993) (“It is ‘a general rule that an agency must

either conform itself to its prior decisions or explain the reasons for its departure . . . . This rule is

not designed to restrict an agency’s consideration of the facts from one case to the next, but

rather it is to insure [sic] consistency in an agency’s administration of a statute.’”) (citing

Citrosuco Paulista, S.A. v. United States, 12 CIT 1196, 1209, 704 F. Supp. 1075, 1088 (1988)).

On remand, the court ordered Commerce to “specifically explain how the market for

synthetic rubber in the PRC changed between 2014 and 2015 and what aspects of those changes

caused Commerce to find that the market was not distorted in 2015.” Guizhou II, 43 CIT at __,

389 F. Supp. 3d at 1325.

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