Slip Op. 11–47
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________ : SHANDONG MACHINERY IMPORT & : EXPORT COMPANY., : : Plaintiff, : : Before: Richard K. Eaton, Judge v. : : Court No. 07-00355 UNITED STATES, : : Defendant, : : and : : AMES TRUE TEMPER and COUNCIL : TOOL COMPANY, INC., : : Defendant-Intervenors. : ______________________________:
MEMORANDUM OPINION
[United States Department of Commerce’s Results of Redetermination Pursuant to Remand affirmed.]
Dated: April 26, 2011
Hume & Associates LLC (Robert T. Hume), for plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Department of Justice, Commercial Litigation Branch, Civil Division (Michael D. Panzera); Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Shana Hofstetter), of counsel, for defendant.
Wiley Rein LLP (Alan H. Price, Timothy C. Brightbill, Maureen E. Thorson), for defendant-intervenor Ames True Temper.
Kelley Drye & Warren (Eric McClafferty), for defendant- intervenor Council Tool Company, Inc.
Eaton, Judge: This matter is before the court following a 07-00355 Page 2
second remand to the Department of Commerce (the “Department” or
“Commerce”). See Final Results of Redetermination Pursuant to
Court Remand (Dep’t of Commerce Dec. 2, 2010) (“Remand Results”).
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19
U.S.C. § 1516a(a)(2)(B)(iii) (2006). For the reasons set forth
below, the Remand Results are sustained.
STANDARD OF REVIEW
When reviewing Commerce’s final antidumping determinations,
the court “shall 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).
BACKGROUND
The case arises out of the Department’s fifteenth
administrative review of the antidumping duty orders covering
heavy forged hand tools (“HFHTs”) from the People’s Republic of
China (the “PRC”) for the period of review February 1, 2005
through January 30, 2006. See HFHTs, Finished or Unfinished,
With or Without Handles, From the PRC, 72 Fed. Reg. 51,787 (Dep’t
of Commerce Sept. 11, 2007) (final results). The relevant facts
are set forth fully in the court’s previous opinions in this
case, familiarity with which is presumed. See Shandong Mach. 07-00355 Page 3
Imp. & Exp. Co. v. United States, 32 CIT __, Slip Op. 09-64 (June
24, 2009) (not reported in Federal Supplement) (“Shandong I”);
Shandong Mach. Imp. & Exp. Co. v. United States, 33 CIT __, Slip
Op. 10-88 (Aug. 11, 2010) (not reported in Federal Supplement)
(“Shandong II”).
In Shandong I, the court held that the adverse facts
available (“AFA”) rate of 45.25 percent Commerce assigned to the
PRC-wide entity, including plaintiff Shandong Machinery Import
and Export Company (“SMC”), was not corroborated, as required by
19 U.S.C. § 1677e(c). Shandong I, Slip Op. 09-64 at 19-20.
Accordingly, the court remanded the matter to the Department to
select a corroborated AFA rate, in accordance with § 1677e(c).
On remand, Commerce noted that it could corroborate the 45.25
percent AFA rate using SMC’s sales data from the previous
administrative review. Final Results of Redeterm. Pursuant to
Court Remand (Dep’t of Commerce Jan. 7, 2010) (“Shandong I Remand
Results”) at 9. Because the court in Shandong I instructed
Commerce to select a “different” rate, however, the Department
determined that it could not apply the 45.25 percent rate, and
selected a new PRC-wide rate of 109.16 percent. Shandong I
Remand Results 9-10. According to Commerce, the 109.16 percent
rate was based on SMC’s single transaction margin from the
previous administrative review that was closest to the 45.25
percent rate. See Shandong II, Slip Op. 10-88 at 5. 07-00355 Page 4
In Shandong II, the court found that the 109.16 percent AFA
rate was punitive, and remanded the matter to Commerce to
calculate a new AFA rate. In remanding the matter to Commerce,
the court noted that:
If Commerce is capable of corroborating the 45.25 percent rate, then it may endeavor to do so on remand. The Department shall be mindful, however, that whatever rate it finds must be in accord with its previous finding that the rate of 45.25 percent is sufficient to ensure compliance. Should the Department wish, it may reopen the record and calculate an AFA rate to be applied to the PRC-wide entity for sales of hammers/sledges, with an additional amount to deter future non-compliance.
Shandong II, Slip Op. 10-88 at 11.
On remand, Commerce selected the 45.25 percent AFA rate.
Remand Results at 12. Commerce found that the highest weighted-
average dumping margin for any respondent under the order on
HFHTs was 34.56 percent, which was also SMC’s own rate in the
fourteenth administrative review. The Department determined that
45.25 percent was, therefore, an appropriate rate because
[t]his rate complies both with the order of the Court to assign a non-punitive rate to hammers/sledges that has been ‘corroborated according to its reliability and relevance to the country-wide entity as a whole’ and the requirement that we ensure the PRC-wide entity (and SMC as a part of it) does not obtain a more favorable result by failing to cooperate than if it had cooperated fully. This was a calculated rate reflecting the commercial activities of SMC just one year prior to the administrative review currently at issue here.
Remand Results at 11.
Neither SMC nor the defendant-intervenors challenge
Commerce’s Remand Results. 07-00355 Page 5
DISCUSSION
I. Legal Framework
Where, as here, Commerce determines that a respondent in an
antidumping investigation has failed to cooperate to “the best of
its ability,” it may calculate the dumping margin for that
respondent based on AFA. See 19 U.S.C. § 1677e(b). In
determining a PRC-wide rate based on AFA, Commerce may use
information from a source identified in 19 U.S.C. § 1677e(b),
which includes information derived from the petition, a final
determination in the investigation, any prior administrative
review, or any other information placed on the record. If
Commerce relies on secondary information such as calculated rates
from previous reviews, it must “to the extent practicable,
corroborate that information from independent sources that are
reasonably at [its] disposal.” Id. at § 1677e(c).
To corroborate secondary information means to “examine
whether the secondary information to be used has probative
value.” See 19 C.F.R. § 351.308(d) (2010). A rate has probative
value when it is both reliable and relevant. See Ferro Union,
Inc. v.
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Slip Op. 11–47
UNITED STATES COURT OF INTERNATIONAL TRADE
______________________________ : SHANDONG MACHINERY IMPORT & : EXPORT COMPANY., : : Plaintiff, : : Before: Richard K. Eaton, Judge v. : : Court No. 07-00355 UNITED STATES, : : Defendant, : : and : : AMES TRUE TEMPER and COUNCIL : TOOL COMPANY, INC., : : Defendant-Intervenors. : ______________________________:
MEMORANDUM OPINION
[United States Department of Commerce’s Results of Redetermination Pursuant to Remand affirmed.]
Dated: April 26, 2011
Hume & Associates LLC (Robert T. Hume), for plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Department of Justice, Commercial Litigation Branch, Civil Division (Michael D. Panzera); Office of Chief Counsel for Import Administration, U.S. Department of Commerce (Shana Hofstetter), of counsel, for defendant.
Wiley Rein LLP (Alan H. Price, Timothy C. Brightbill, Maureen E. Thorson), for defendant-intervenor Ames True Temper.
Kelley Drye & Warren (Eric McClafferty), for defendant- intervenor Council Tool Company, Inc.
Eaton, Judge: This matter is before the court following a 07-00355 Page 2
second remand to the Department of Commerce (the “Department” or
“Commerce”). See Final Results of Redetermination Pursuant to
Court Remand (Dep’t of Commerce Dec. 2, 2010) (“Remand Results”).
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19
U.S.C. § 1516a(a)(2)(B)(iii) (2006). For the reasons set forth
below, the Remand Results are sustained.
STANDARD OF REVIEW
When reviewing Commerce’s final antidumping determinations,
the court “shall 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).
BACKGROUND
The case arises out of the Department’s fifteenth
administrative review of the antidumping duty orders covering
heavy forged hand tools (“HFHTs”) from the People’s Republic of
China (the “PRC”) for the period of review February 1, 2005
through January 30, 2006. See HFHTs, Finished or Unfinished,
With or Without Handles, From the PRC, 72 Fed. Reg. 51,787 (Dep’t
of Commerce Sept. 11, 2007) (final results). The relevant facts
are set forth fully in the court’s previous opinions in this
case, familiarity with which is presumed. See Shandong Mach. 07-00355 Page 3
Imp. & Exp. Co. v. United States, 32 CIT __, Slip Op. 09-64 (June
24, 2009) (not reported in Federal Supplement) (“Shandong I”);
Shandong Mach. Imp. & Exp. Co. v. United States, 33 CIT __, Slip
Op. 10-88 (Aug. 11, 2010) (not reported in Federal Supplement)
(“Shandong II”).
In Shandong I, the court held that the adverse facts
available (“AFA”) rate of 45.25 percent Commerce assigned to the
PRC-wide entity, including plaintiff Shandong Machinery Import
and Export Company (“SMC”), was not corroborated, as required by
19 U.S.C. § 1677e(c). Shandong I, Slip Op. 09-64 at 19-20.
Accordingly, the court remanded the matter to the Department to
select a corroborated AFA rate, in accordance with § 1677e(c).
On remand, Commerce noted that it could corroborate the 45.25
percent AFA rate using SMC’s sales data from the previous
administrative review. Final Results of Redeterm. Pursuant to
Court Remand (Dep’t of Commerce Jan. 7, 2010) (“Shandong I Remand
Results”) at 9. Because the court in Shandong I instructed
Commerce to select a “different” rate, however, the Department
determined that it could not apply the 45.25 percent rate, and
selected a new PRC-wide rate of 109.16 percent. Shandong I
Remand Results 9-10. According to Commerce, the 109.16 percent
rate was based on SMC’s single transaction margin from the
previous administrative review that was closest to the 45.25
percent rate. See Shandong II, Slip Op. 10-88 at 5. 07-00355 Page 4
In Shandong II, the court found that the 109.16 percent AFA
rate was punitive, and remanded the matter to Commerce to
calculate a new AFA rate. In remanding the matter to Commerce,
the court noted that:
If Commerce is capable of corroborating the 45.25 percent rate, then it may endeavor to do so on remand. The Department shall be mindful, however, that whatever rate it finds must be in accord with its previous finding that the rate of 45.25 percent is sufficient to ensure compliance. Should the Department wish, it may reopen the record and calculate an AFA rate to be applied to the PRC-wide entity for sales of hammers/sledges, with an additional amount to deter future non-compliance.
Shandong II, Slip Op. 10-88 at 11.
On remand, Commerce selected the 45.25 percent AFA rate.
Remand Results at 12. Commerce found that the highest weighted-
average dumping margin for any respondent under the order on
HFHTs was 34.56 percent, which was also SMC’s own rate in the
fourteenth administrative review. The Department determined that
45.25 percent was, therefore, an appropriate rate because
[t]his rate complies both with the order of the Court to assign a non-punitive rate to hammers/sledges that has been ‘corroborated according to its reliability and relevance to the country-wide entity as a whole’ and the requirement that we ensure the PRC-wide entity (and SMC as a part of it) does not obtain a more favorable result by failing to cooperate than if it had cooperated fully. This was a calculated rate reflecting the commercial activities of SMC just one year prior to the administrative review currently at issue here.
Remand Results at 11.
Neither SMC nor the defendant-intervenors challenge
Commerce’s Remand Results. 07-00355 Page 5
DISCUSSION
I. Legal Framework
Where, as here, Commerce determines that a respondent in an
antidumping investigation has failed to cooperate to “the best of
its ability,” it may calculate the dumping margin for that
respondent based on AFA. See 19 U.S.C. § 1677e(b). In
determining a PRC-wide rate based on AFA, Commerce may use
information from a source identified in 19 U.S.C. § 1677e(b),
which includes information derived from the petition, a final
determination in the investigation, any prior administrative
review, or any other information placed on the record. If
Commerce relies on secondary information such as calculated rates
from previous reviews, it must “to the extent practicable,
corroborate that information from independent sources that are
reasonably at [its] disposal.” Id. at § 1677e(c).
To corroborate secondary information means to “examine
whether the secondary information to be used has probative
value.” See 19 C.F.R. § 351.308(d) (2010). A rate has probative
value when it is both reliable and relevant. See Ferro Union,
Inc. v. United States, 23 CIT 178, 202, 44 F. Supp. 2d 1310, 1333
(1999). Thus, “[i]n order to corroborate an AFA rate, Commerce
must show that it used ‘reliable facts’ that had ‘some grounding
in commercial reality.’” PSC VSMPO-AVISMA Corp. v. United 07-00355 Page 6
States, 34 CIT __, Slip Op. 2011-25, at 6 (2011) (quoting Gallant
Ocean (Thail.) Co. v. United States, 602 F.3d 1319, 1324 (Fed.
Cir. 2010)).
Although Commerce is given broad discretion in selecting an
AFA rate, this discretion is “not unbounded.” See F.Lii de Cecco
di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d
1027, 1032 (Fed. Cir. 2000). As the Federal Circuit has
explained:
the purpose of section 1677e(b) is to provide respondents with an incentive to cooperate, not to impose punitive, aberrational, or uncorroborated margins. It is clear from Congress's imposition of the corroboration requirement in 19 U.S.C. § 1677e(c) that it intended for an adverse facts available rate to be a reasonably accurate estimate of the respondent's actual rate, albeit with some built-in increase intended as a deterrent to non-compliance. Congress could not have intended for Commerce's discretion to include the ability to select unreasonably high rates with no relationship to the respondent's actual dumping margin. Obviously a higher adverse margin creates a stronger deterrent, but Congress tempered deterrent value with the corroboration requirement.
Id.
II. The Department’s Application of the 45.42 Percent AFA Rate
The 45.42 percent rate was originally derived from the
petition in connection with the original less-than-fair-value
investigation in 1991. The Department, however, demonstrated the
reliability and relevance of that rate by using transaction
specific rates for SMC during the immediately preceding 07-00355 Page 7
fourteenth administrative review. Remand Results at 10. In
doing so, Commerce found that “the majority of positive
individual transaction margins from the [fourteenth
administrative review] are higher than 45.42 percent.” Remand
Results at 11. Therefore, 45.42 percent represents a reasonable
AFA rate, which is reflective of the PRC-wide entity’s, including
SMC’s, actual commercial activity.
CONCLUSION
For the foregoing reasons, the court finds that Commerce’s
selection of 45.42 percent as the AFA rate for the PRC-wide
entity, including plaintiff SMC, is supported by substantial
evidence and in accordance with law. Therefore, the Remand
Results are sustained, and judgment will be entered accordingly.
/s/ Richard K. Eaton Richard K. Eaton
Dated: April 26, 2011 New York, New York