Slip Op. 24-11
UNITED STATES COURT OF INTERNATIONAL TRADE
Court No. 20-00008
NEW AMERICAN KEG, d/b/a AMERICAN KEG COMPANY, Plaintiff, v. UNITED STATES, Defendant, and NINGBO MASTER INTERNATIONAL TRADE CO., LTD., AND GUANGZHOU JINGYE MACHINERY CO, LTD., Defendant-Intervenors.
Before: M. Miller Baker, Judge
OPINION
[The court again remands to Commerce for further proceedings.]
Dated: January 31, 2024
Whitney M. Rolig, Andrew W. Kentz, and Nathaniel Maandig Rickard, Picard Kentz & Rowe LLP of Wash- ington, DC, on the comments for Plaintiff. Ct. No. 20-00008 Page 2
Brian M. Boynton, Principal Deputy Assistant Attor- ney General; Patricia M. McCarthy, Director; and Ash- ley Akers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice of Washington, DC, on the comments for Defendant. Of counsel on the comments was Vania Wang, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce of Wash- ington, DC.
Gregory S. Menegaz and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, on the comments for Defendant-Intervenors.
Baker, Judge: This antidumping case involving beer kegs imported from China returns for a third time. 1 In its most recent decision, the court remanded for the Department of Commerce to explain why it used a Mexican wage rate adjusted with Brazilian in- flation data rather than employing the latter country’s rate to calculate a surrogate labor costs value for Chi- nese producer and mandatory respondent, Ningbo Master. See Am. Keg II, Slip Op. 22–106, at 9, 2022 WL 4363320, at *3. The court also directed the agency to identify the evidence supporting a separate rate for Ulix, another Chinese producer. See id.
1 The court presumes the reader’s familiarity with its two
previous opinions in this matter. See New Am. Keg v. United States, Ct. No. 20-00008, Slip Op. 21-30, 2021 WL 1206153 (CIT Mar. 23, 2021) (Am. Keg I); New Am. Keg v. United States, Ct. No. 20-00008, Slip Op. 22-106, 2022 WL 4363320 (CIT Sept. 13, 2022) (Am. Keg II). Ct. No. 20-00008 Page 3
After reexamining the issue, Commerce acknowl- edged that adjusting Mexican wage rates with Brazil- ian inflation data was “improper.” Appx4430. The De- partment nevertheless rebuffed domestic producer American Keg’s request to use Brazilian information because unlike that country, which only makes compa- rable products, Mexico produces “identical” steel kegs. Id. Instead, the agency reopened the record and used a different data set for Mexico—one that was contem- poraneous with the period of review. Appx4430–4431. 2 It also identified evidence on the record that it charac- terized as justifying a separate rate for Ulix. Appx4431–4434.
I
American Keg contests Commerce’s decision to reo- pen the record and use new Mexican wage rate data rather than the Brazilian statistics provided by the parties. The company argues the Department abused its discretion because contrary to the latter’s stated ra- tionale, see Appx4435–4436, informational accuracy did not require any such reopening, and the agency
2 In its prior determination, the Department used non-con-
temporaneous Mexican wage rates from the Conference Board’s International Labor Comparisons (ILC) that the parties placed on the record. Appx1469. On remand, Com- merce placed on the record contemporaneous Mexican wage data from the International Labour Organization (ILO). Appx4430–4431. The Department prefers to use ILO data. See Appx4431 (citing Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, 76 Fed. Reg. 36,092 (Dep’t Commerce June 21, 2011)). Ct. No. 20-00008 Page 4
disregarded its general policy of relying on the liti- gants to create the record.
The court agrees. To begin with, “a Commerce de- termination . . . is ‘accurate’ if it is correct as a mathe- matical and factual matter . . . .” Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1344 (Fed. Cir. 2016). It’s undisputed that the Brazilian information on the record was correct as a factual matter—indeed, the Department so found in its draft redetermination re- sults. Appx1006. The agency’s reopening the record be- cause of a purported need for accurate data is not sup- ported by substantial evidence.
Insofar as the Department reopened the record be- cause of its preference for data from countries that pro- duce identical, as opposed to merely comparable, goods, that reopening was arbitrary and capricious for two related reasons. First, Commerce uses figures from countries that produce comparable products when there are “data difficulties” with countries that produce identical products. Import Administration Policy Bulletin 04.1, Non-Market Economy Surrogate Country Selection Process, at 2 n.6 (Mar. 1, 2004). On the record created by the parties, there were data dif- ficulties with the Mexican ILC wage data because it lacked an inflation adjustor, but there was no such dif- ficulty with the Brazilian information.
Second, “the burden of creating an adequate record lies with interested parties and not with Commerce.” QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011) (brackets omitted). To that end, regu- lations provide that “[t]he Department obtains most of Ct. No. 20-00008 Page 5
its factual information in antidumping . . . duty pro- ceedings from submissions by interested parties dur- ing the course of the proceeding.” 19 C.F.R. § 351.301(a). Thus, “Commerce generally does not con- sider untimely filed factual information.” Essar Steel Ltd. v. United States, 678 F.3d 1268, 1278 (Fed. Cir. 2012) (citing 19 C.F.R. § 351.302(d)(1)). Nor does the agency reopen the record to admit evidence that it pre- fers, such as ILO data, when the parties have intro- duced otherwise-acceptable evidence that allows an accurate margin calculation. See, e.g., Multilayered Wood Flooring from the People’s Republic of China, 85 Fed. Reg. 78,118 (Dep’t Commerce Dec. 3, 2020) and accompanying I&D Memo at 12 (selecting between two non-ILO sources placed on the record by interested parties and explaining that “[a]lthough Commerce stated a preference for ILO data, it did not preclude reliance on data from another source”).
As “[c]onstant reopening and supplementation of the record would lead to inefficiency and delay in final- ity,” Essar, 678 F.3d at 1277, supplementation is per- missible in “a small number of” circumstances. Id. One such circumstance is “when the underlying agency de- cision was based on ‘inaccurate data’ . . . .” Id. Because the Department made no showing that the Brazilian wage information on the record was inaccurate or oth- erwise unsuitable for calculation of Ningbo Master’s Ct. No. 20-00008 Page 6
margin, Commerce abused its discretion in reopening the record to use Mexican ILO wage data. 3
II
To qualify for separate-rate status, an applicant must provide evidence of sales to an unaffiliated U.S. customer. See Am. Keg I, Slip Op. 21–30, at 45, 2021 WL 1206153, at *17. The government acknowledges that because of the undisputed affiliation between Company A (an American company) and Ulix’s U.S. customer, if Ulix and Company A were affiliated, “that would mean [Ulix] and its U.S. customer . . . were af- filiated.” ECF 90, at 32.
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Slip Op. 24-11
UNITED STATES COURT OF INTERNATIONAL TRADE
Court No. 20-00008
NEW AMERICAN KEG, d/b/a AMERICAN KEG COMPANY, Plaintiff, v. UNITED STATES, Defendant, and NINGBO MASTER INTERNATIONAL TRADE CO., LTD., AND GUANGZHOU JINGYE MACHINERY CO, LTD., Defendant-Intervenors.
Before: M. Miller Baker, Judge
OPINION
[The court again remands to Commerce for further proceedings.]
Dated: January 31, 2024
Whitney M. Rolig, Andrew W. Kentz, and Nathaniel Maandig Rickard, Picard Kentz & Rowe LLP of Wash- ington, DC, on the comments for Plaintiff. Ct. No. 20-00008 Page 2
Brian M. Boynton, Principal Deputy Assistant Attor- ney General; Patricia M. McCarthy, Director; and Ash- ley Akers, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice of Washington, DC, on the comments for Defendant. Of counsel on the comments was Vania Wang, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce of Wash- ington, DC.
Gregory S. Menegaz and Alexandra H. Salzman, deKieffer & Horgan, PLLC, of Washington, DC, on the comments for Defendant-Intervenors.
Baker, Judge: This antidumping case involving beer kegs imported from China returns for a third time. 1 In its most recent decision, the court remanded for the Department of Commerce to explain why it used a Mexican wage rate adjusted with Brazilian in- flation data rather than employing the latter country’s rate to calculate a surrogate labor costs value for Chi- nese producer and mandatory respondent, Ningbo Master. See Am. Keg II, Slip Op. 22–106, at 9, 2022 WL 4363320, at *3. The court also directed the agency to identify the evidence supporting a separate rate for Ulix, another Chinese producer. See id.
1 The court presumes the reader’s familiarity with its two
previous opinions in this matter. See New Am. Keg v. United States, Ct. No. 20-00008, Slip Op. 21-30, 2021 WL 1206153 (CIT Mar. 23, 2021) (Am. Keg I); New Am. Keg v. United States, Ct. No. 20-00008, Slip Op. 22-106, 2022 WL 4363320 (CIT Sept. 13, 2022) (Am. Keg II). Ct. No. 20-00008 Page 3
After reexamining the issue, Commerce acknowl- edged that adjusting Mexican wage rates with Brazil- ian inflation data was “improper.” Appx4430. The De- partment nevertheless rebuffed domestic producer American Keg’s request to use Brazilian information because unlike that country, which only makes compa- rable products, Mexico produces “identical” steel kegs. Id. Instead, the agency reopened the record and used a different data set for Mexico—one that was contem- poraneous with the period of review. Appx4430–4431. 2 It also identified evidence on the record that it charac- terized as justifying a separate rate for Ulix. Appx4431–4434.
I
American Keg contests Commerce’s decision to reo- pen the record and use new Mexican wage rate data rather than the Brazilian statistics provided by the parties. The company argues the Department abused its discretion because contrary to the latter’s stated ra- tionale, see Appx4435–4436, informational accuracy did not require any such reopening, and the agency
2 In its prior determination, the Department used non-con-
temporaneous Mexican wage rates from the Conference Board’s International Labor Comparisons (ILC) that the parties placed on the record. Appx1469. On remand, Com- merce placed on the record contemporaneous Mexican wage data from the International Labour Organization (ILO). Appx4430–4431. The Department prefers to use ILO data. See Appx4431 (citing Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, 76 Fed. Reg. 36,092 (Dep’t Commerce June 21, 2011)). Ct. No. 20-00008 Page 4
disregarded its general policy of relying on the liti- gants to create the record.
The court agrees. To begin with, “a Commerce de- termination . . . is ‘accurate’ if it is correct as a mathe- matical and factual matter . . . .” Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1344 (Fed. Cir. 2016). It’s undisputed that the Brazilian information on the record was correct as a factual matter—indeed, the Department so found in its draft redetermination re- sults. Appx1006. The agency’s reopening the record be- cause of a purported need for accurate data is not sup- ported by substantial evidence.
Insofar as the Department reopened the record be- cause of its preference for data from countries that pro- duce identical, as opposed to merely comparable, goods, that reopening was arbitrary and capricious for two related reasons. First, Commerce uses figures from countries that produce comparable products when there are “data difficulties” with countries that produce identical products. Import Administration Policy Bulletin 04.1, Non-Market Economy Surrogate Country Selection Process, at 2 n.6 (Mar. 1, 2004). On the record created by the parties, there were data dif- ficulties with the Mexican ILC wage data because it lacked an inflation adjustor, but there was no such dif- ficulty with the Brazilian information.
Second, “the burden of creating an adequate record lies with interested parties and not with Commerce.” QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011) (brackets omitted). To that end, regu- lations provide that “[t]he Department obtains most of Ct. No. 20-00008 Page 5
its factual information in antidumping . . . duty pro- ceedings from submissions by interested parties dur- ing the course of the proceeding.” 19 C.F.R. § 351.301(a). Thus, “Commerce generally does not con- sider untimely filed factual information.” Essar Steel Ltd. v. United States, 678 F.3d 1268, 1278 (Fed. Cir. 2012) (citing 19 C.F.R. § 351.302(d)(1)). Nor does the agency reopen the record to admit evidence that it pre- fers, such as ILO data, when the parties have intro- duced otherwise-acceptable evidence that allows an accurate margin calculation. See, e.g., Multilayered Wood Flooring from the People’s Republic of China, 85 Fed. Reg. 78,118 (Dep’t Commerce Dec. 3, 2020) and accompanying I&D Memo at 12 (selecting between two non-ILO sources placed on the record by interested parties and explaining that “[a]lthough Commerce stated a preference for ILO data, it did not preclude reliance on data from another source”).
As “[c]onstant reopening and supplementation of the record would lead to inefficiency and delay in final- ity,” Essar, 678 F.3d at 1277, supplementation is per- missible in “a small number of” circumstances. Id. One such circumstance is “when the underlying agency de- cision was based on ‘inaccurate data’ . . . .” Id. Because the Department made no showing that the Brazilian wage information on the record was inaccurate or oth- erwise unsuitable for calculation of Ningbo Master’s Ct. No. 20-00008 Page 6
margin, Commerce abused its discretion in reopening the record to use Mexican ILO wage data. 3
II
To qualify for separate-rate status, an applicant must provide evidence of sales to an unaffiliated U.S. customer. See Am. Keg I, Slip Op. 21–30, at 45, 2021 WL 1206153, at *17. The government acknowledges that because of the undisputed affiliation between Company A (an American company) and Ulix’s U.S. customer, if Ulix and Company A were affiliated, “that would mean [Ulix] and its U.S. customer . . . were af- filiated.” ECF 90, at 32. In its previous decision, the court therefore remanded for the Department to iden- tify evidence on the record that Company A and Ulix were unaffiliated. Am. Keg II, Slip Op. 22-106, at 8–9, 2022 WL 4363320, at *3.
Commerce complied by pointing to various parts of the record, including Ulix’s separate-rate application, which represented that the company was not affiliated with any U.S. entity. Appx4432. The Department also cited the fact that the list of Ulix’s shareholders did not overlap with the owner of Company A. Id. Although American Keg challenges the sufficiency of
3 The court acknowledges that it previously declined Amer-
ican Keg’s invitation to preemptively bar the Department from reopening the record on remand because the company failed to identify “any authority for the court to so limit the Department’s discretion.” Am. Keg II, Slip Op. 22-106, at 6 n.3, 2022 WL 4363320, at *2 n.3. Whether the agency abused that discretion is a different question, and one within the court’s purview. Ct. No. 20-00008 Page 7
that evidence, reweighing the record is not for the court. Substantial evidence supports the agency’s remand determination that Ulix is eligible for a separate rate.
* * *
The court remands for further proceedings con- sistent with this opinion.
Dated: January 31, 2024 /s/ M. Miller Baker New York, NY Judge