Slip Op. 03-33 UNITED STATES COURT OF INTERNATIONAL TRADE BEFORE: RIC HARD K. EATO N, JUDGE

____________________________________ : YANTAI ORIENTAL JUICE CO., : ET AL. , : : Plaintiff s, :

: v. : Court No. 00-00309 : UNITED STATE S , : : Defend ant, :

: and : : COLOMA FROZEN FOODS, INC., : ET AL. , : : Defend ant- : Inte rvenors . : ____________________________________:
[Antidumping determination remanded to Commerce.]

Decided: March 21, 2003 Grunfe ld, Deside

rio, L ebowitz, Sil

verman &

Klestadt L.L .P. ( Bruce

M. Mitche ll , Jeffrey S. Grimson and Mark E. Pardo ), for Pla intiffs. Robert D. McCallum Jr. , Assistant Attorney Gene ral, Civil Division, United States Department of Justic e; David M. Cohen , Director, Civil Division, Commercial Litigation Branc h, United Sta

tes Depa rtment of Justice; Lucius B. L au , Assistant Director, International Tr ade Section, Civil Division, Commercial Litigation Branch, United States Depa rtment of Justice; Scott D. McBride , Office of the Chief Counsel for I mport Administration, United States Department of Commerce, o f counse l, for De fendant

. The Law Firm of C. Micha el Hathaway

( C. Michael Hathaway

), for De fendant

Inte rvenors .Court No. 00-00309 Page 2 MEMORAN

DUM OP INION ANDORDER EATON , Jud ge : This matter is before the court on the motion of Yantai Oriental Juice Co. (“Yantai Oriental”), Qingdao N annan Foods Co. (“Nannan”), Sanmenxia L akeside Fruit Juice Co., L td. (“L akeside ”), Shaa

nxi Haishen

g Fre sh Fruit Juic e Co. (“H aisheng ”), Shandong Z honglu Juice Group Co. (“Zhonglu”), Xiany ang Fuan Juice Co., Ltd. (“Fuan”), Xian Asia Qin Fruit Co., Ltd. (“Asia”), Chang sha Industrial Products & Minera ls Import & Export Corp. (“Changsha Industrial”), and Shandong Foodstuffs Import & Export Corp. (“Shandong Foodstuffs”) (collectiv ely “Plaintiffs”) f or judgment u pon the agency record pursu ant to USC IT R. 56.2. By their motion, Plaintiffs contest certain aspects of the determination of the United States Department of Commerce (“Commerce” or the “Department”) resulting from its antidumping investigation of non-frozen apple juice concentra te (“AJC”) from the People’s Republic of China (“PRC”), see Certain N on-Fro zen Apple Juice Conce

ntrate f rom the P.R. C. , 65 Fed. Reg. 19,873 (Dep’t Commerce Apr. 13, 2000) (final determination) ( “ Final Determination ”), amended by Certain N on-Fro zen Apple Juice Conce

ntrate F rom the P.R. C. , 65 Fed. Reg. 35,606 (Dep’t Commerce June 5, 2000) (am. final determination) (“ Am. Final Determination ”), covering the period of investigation (“POI ”) of October 1, 1998, through Marc h 31, 1999. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(A)(i)( I). For the

reasons set forth below, th e court a

gain re mands this matter to C ommerce with instru

ctions to conduct further proceedings in conf ormity with this opinion.Court No. 00-00309 Page 3 BACKGROUND On June 18, 2002, the court remanded this matter and directed Commerce to re examine its surrogate country

selection, and the various factors of production, used to calc ulate the antidumping duty marg

ins for PRC AJC producers/exporters in the Final Determination

. See Yantai Oriental Juice Co. v. United States , 26 CIT __, Slip Op. 02-56 (June 18, 2002) (“ Remand Order ”). Familiarity

with this opinion is presumed.

On November 15, 2002, Commerce released the r esults of its remand determination. See Yantai Oriental Juice Co. v. United States, 00-00309 (Dep’t Commerce Nov. 15, 2002) (redetermination pursuant to court remand) (“ Remand Determination ”). Upon remand Commerce determined that: (1) Turkey, not India, was the proper sur rogate country ; (2) in light of its selection of Turkey

as the surrogate country

and the resultant reevaluation of the various factor s of produ

ction, Ya ntai Orie ntal, Nan nan, L akeside , Haishe

ng, and Zhong lu (colle ctively the “Fu lly- Inve stigate d Responde nts”) we re “excl uded” fr om the ant

idumping order a nd, thus, their antidumping duty mar gins were zero percent; and (3) because the Fully

-Investigated Respondents’ antidumping duty mar gins were lowered to zero perce nt, and because the antidumping duty marg

in for Fuan, Asia, Changsa I ndustrial, and Shandong Foodstuffs (i.e., companies that fully re sponded to Commerce’s antidumping questionnaire but were not selec ted fo r i nv es ti ga ti on ) ( co ll ec ti ve ly t he “C oo pe ra ti ve Re sp on de nt s” ) w as ca lc ul at ed fr om th e F ul lyInvestigated Responde

nts’ antidumping duty marg ins in the Final Determination , it was
necessary to recalculate the Cooperative Respondents’ antidumping duty margin for the Remand Determination . As a re sult of this recalc ulation the

Coopera tive Respondents’ a

ntidumping

dutyCourt No. 00-00309 Page 4

margin increa sed from

14.88 per

cent to 28 .33 perc ent.

DISCUSSION When reviewing the Remand Determination pursuant to 28 U.S.C. § 1581(c), the court will sustain Commerce’s determinations unless they a re “unsupported by

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

. Substantial evidence consists of “such relevant evidence a s a reasonable mind might accept as adequate to support a conclusion.” Consol. Edi son Co. v. N LRB , 305 U.S. 197, 229 (1938); Daewoo Elecs. Co. v. United States , 6 F.3 d 1511 , 1520 (Fed. C ir. 19 93) (q uoti ng Matsushita Elec. Indus. Co. v. United States , 750 F.2d 927, 932 n.10 (Fed. Cir. 1984)). However, “Commerce must articulate a ‘rational connection between the facts found and the choice made.’” Rhodia, Inc. v. United States , 25 CIT __, __, 185 F. Supp. 2d 1343, 1348 (2001) (quot ing Burlington Truck L ines, Inc. v. United States , 371 U.S. 156, 168 (1962)).

A. Surrogate Country/Factors of Production To determine whether subject merchandise is being , or is likely to be, sold in the United States at less than fair value, Commerce must make “a fair comparison . . . between the export price or constructed export price and normal value.” 19 U.S.C. § 1677b(a); 19 C.F.R. § 351.401(a) (2002). Where, as here, the subject merchandise is exported from a nonmarket economy country

(“NME”), Commerce is directed by statute to calculate normal value “on the basis of the value of the factors of production utilized in producing the mer chandise . . . .” 19 U.S.C. § 167 7b(c)( 1); 19 C.F .R. § 351.4 08(a). Wh en valuin g fact ors of pr oduction i

n NMECourt No. 00-00309 Page 5

circumst ances, s ubsection 1677b(c ) direc ts Commerc e to gat her surr ogate p rices fr om “the be st available information . . . in a market economy country . . . consider

ed to be appropriate by

the administe ring au thority .” 19 U.S. C. § 1677b( c)(1); see Nation Ford Chem. Co. v. United States , 166 F.3d 1 373, 1377 (

Fed. Cir . 1999) (“

Whether s

uch ana logous information from the surrog ate country is ‘best’ will nec essarily depe nd on the circumstances, including the relationship between the mark et struct ure of th e surrog ate coun

try and a hy pothetic al free -market structur e of the N ME producer under investigation.”). This being the case, “the process of constructing foreign market value for a producer in [an NME] is difficult and necessarily imprecise . . . .” Sigma Corp. v. United States , 117 F.3d

1401, 1408 (Fed. Ci

r. 1997). Commerce

enjoys wide disc

retion in valuing factors of production. See Lasko Metal Prods., I nc. v. United States , 43 F.3d 1442, 1446 (Fed. Ci r. 1994); see also Sigma , 117 F .3d at 1405 ( citi ng Torrington Co. v. United States , 68 F.3d 1347, 1351 (Fed. Cir. 1995)) (“Commerce . . . ha s broad authority to interpre t the antidumpin

g statut e . . . .”) . Howeve

r, Commer

ce’s dis cretion

in calcu lating s urroga te price s is not limitless. See Omnibus Trade and Competitiveness Act of 1988, H.R. Conf. Rep. No. 100- 576, at 590 (1988), reprinte d in 1988 U.S.C.C.A.N. 1547, 1623 (“Commerce shall avoid using
any prices w hich it ha s reason

to believ e or suspe ct may be . . . sub sidized pri ces.”) ; see also Shakeproof Assembly Components, Div. of I ll. Toolworks, Inc. v. United States , 268 F.3d 1376, 1382 (Fed. Cir. 2001) (“I

n determining the valuation of the factors of produc tion, the critical question i s whethe

r the methodology

used by Commerce

is based on the best

availab le information and establishes antidumping margins as acc urately as possible.” ).

Commerce, in accordance with the Remand Order , reexamined various aspects of theCourt No. 00-00309 Page 6

1 The Defendant-I

ntervenors in this action, Coloma Frozen Foods, Inc ., Green Valley Packe

rs, Knouse Foods Cooperative, I nc., Mason Country Fr

uit Packers, and Tree Top, Inc., were the

petitioners at the administrative level. See Certain Non-Frozen Apple Juice Concentr ate From the PRC , 64 Fed. Reg. 36,330, 36,330 (Dep’t Commerce July 6, 1999) (initiation of investigation). Final Determination

including: (1) the selection of I ndia as the surrogate country ; (2) the valuatio n of I

ndian juic e apples

and, spe cifical ly, how a governmen t market i nterven tion sche me (“MIS”) may

have affected the price of such apples; (3) the valuation of domestic steam coal; (4) the use of certain financial data from a n Indian growe

r of apples; and (5) the calculation of certain freig ht rates.

1. Surrogate Country In the Final Determination Commerce

selecte d Ind

ia as the surrog ate coun

try for PRC AJC product

ion. The c ourt foun

d Commerc e’s sele ction, ba sed on the determination tha

t Indi a was a “s ignific ant produ

cer of A JC,” to be un supporte d by substantia

l evidenc e and othe

rwise not in accordance with law. See Remand Order at 11. Comme

rce’s d etermina tion was f ound to be not in accordance with law because it was based on uncorroborated secondary information—a market st udy commissioned by

the petiti oners. 1 Id. Commerce’s determination was found to be
unsuppor ted by substantia

l evidenc e becau se Commer ce mere ly a

dopted the

conclusi ons found

in the petiti oners’ market stu dy b ut did not “ articula

te a ‘ra tional co nnection

betwee n the facts found and the choice made.’” Remand Order at 12 ( citi ng Rhodia , 25 CIT at __, 185 F. Supp. 2d at 1348). On reman

d, Commerc e reexam

ined its se lection o f Ind

ia as the proper s urroga te country for PRC AJC production and stated that it had

concluded that the record does not support our determination in theCourt No. 00-00309 Page 7 investigation that India was a sig nificant producer of [AJC]. Instead, the Depar

tment has determined that Turkey is a more appropriate surrogate country for the [PRC] because it is the country most economica

lly comparable to the PRC that is also a significant producer of AJC. Therefore, the D epartment has amended its calcu lations usi

ng Turk ish data to

value jui ce apple s, [selling, general and administrative] expenses, overhead, and profit. Remand Determination

at 1 (citations omitted). In support of its selection of Turkey as the appropriate surrogate country , Commerce explained: Section 773 (c)(4) of the Act directs the Depa rtment to value the [NME] produc ers’ fa

ctors of producti on in a mar

ket econ omy country that is both (1) ec onomically compara ble to the NME and (2) a significant producer of c omparable merchandise, to the extent possible. Thus, it is the Depar tment’s po licy

to selec t a surro gate country that meet s both of th ese req uiremen ts, when it

is possible to do so. In the underly

ing investigation, the Department concluded that India was both economically comparable to the PRC and a significant producer of compara ble merchandise. Hence, the Department sele cted I

ndia as its primary surrog ate in this procee ding. In response to the conce

rns raised by the

Court in its remand order, the Department reexamined closely the investigation record. Based on its reexamination, the Department reasoned that I ndia could be a signi ficant produ cer of c ompar able m erchan dise gi ven it s high level of apple production. However, the Depa rtment concluded that it lacked appropriate benchmarks for de termining what constitutes significant production. Thus, the Department proposed two measu

res of sig nifican t product ion and at tempted to

apply them using the information in the investigation record. Unfortunately, the

record did not contain sufficient information pertaining to alternative surroga te possibilities because once the Dep art men t had ac cep ted

In dia as a n ap propri ate sur rog ate for AJC production in the investigation, there was no need or ca use for parties to supply further

comments on the record regarding other potentia l surrog ate coun

tries.Court No. 00-00309 Page 8 Consequently, as a re sult of the Court’s underlying determination and analysis, the De

partment developed two measures of significant production: Whether India ( or any other country economic ally

compara ble to the PRC) was a

signific ant netexporter of AJC and w

hether a ny w as a majo r exporte

r of AJC to the United States. . . . The only source

of information [among those examined by the Department] that consistently provided export and import information for India and the other comparable economies identifie d by

the Depa rtment in t

he invest igation (as well as all other worldwide exporters of AJC) was [the United Nations Food and Agriculture Orga

nization (“FAOSTAT”)]. . . . As the [data from FAOSTAT] shows, neither India nor any other country identified by

the Department in the investigation as being economically c omparable to the PRC is a significant net-exporter or a major exporter to the United States. In fa ct, during the releva nt period , Ind

ia was a net importe

r of AJC. Remand Determination

at 4–5. Th

us, Commer

ce dete rmined tha

t Turkey was the a ppropria te surrogate country

for valuing factors of production. Id. at 7.

2. Juice Apple Valuation In the Final Determination Commerce determined that the price paid for I ndian juice apples was a factor of production. The cour t found Commerce’s determination to be unsupported by substantial evidenc e on the record as Commerce had not adequa tely explained why the MI S administered by the national and loc al Indian gover nments—which administration included subsidizing Indian apple gr owers and controlling an entity that further “administered the MIS to [the governments’] detriment”—did not affec t the valuation of apples. Remand Order at 18. On remand, Commerce determined that any possible effects of the MIS on the pric e of India n juice a pples to be

a “moot” issue as “

the Depa rtment is u sing Tur

kish juice appleCourt No. 00-00309 Page 9

2 Althoug

h Commerc e did not us e Turkish prices f or the va luation of domestic steam coal, no argument is made that the use of alter native Indian data for this fa ctor was prices . . . .” Remand Determination at 10.

3. Steam Coal Valuation In the Final Determination “the Department calculated the value f or steam coal using Indian import statistics because the Depa rtment concluded that the import statistics were the ‘best available information.’” Remand Determination at 10. Commerce reasoned that the import statistics it relied on were the “best available information” bec ause they we re “more contemporaneous with the POI than the da ta submitted by plaintiffs . . . .” Id. The court questione d Commerc e’s sele ction of im port stati stics for

valuing domestic I

ndian coa l becaus e there was no indication that (1) the prices for domestic I ndian steam coal were distorted or (2) tha t the “us e of importe d va

lue s ‘b est app roxi mat e[d ] the

cos t inc urr ed’ for In dia n AJC production.” Remand Order at 24. Af

ter reviewing

the rec ord, Comme

rce det ermined that it would use the “domestic price in India to value steam coal.” Remand Determination at 1 0. In support of its use of domestic Indian steam coal pr ices Commerce stated: While we continue to believe that contemporaneity is an important consideration in selecting valuation data, we have reviewed the information in this case and have concluded that both the import statistics and the domestic prices preceded the POI , and hence, neither was contemporaneous with the POI . Moreover, there is no evidence suggesting

that the domestic Indian prices we re distorted. Id. (citi ng Creatine

Monohy drate f rom the P.R. C. , 67 Fed. Reg. 10,892 (Dep’t Commerce Ma r. 11, 2002)(final r

esults); Certain Pr

eserve d Mushroom s from the P.R.C. , 67 Fed. Reg. 46,173 (Dep’t Commerce July 12, 2002) (f inal results and partial rescission of antidumping rev.)). 2Court No. 00-00309 Page 10

improper in the instant investigation.

4. Valuation o f Selling, Ge neral, and A dministr ative Expe nses, and Overhead Ratios In the Final Determination Commerce relied on financial data for selling , general, and administrative expenses (“SG&A”), and overhea d ratios based on generalized I ndian financial data from the Reserve

Bank of India Bulletin

. Remand Order at 24. The court questioned the use of such data as there was publically available audited financial information from an I ndian producer of AJC, Himachal Pradesh Horticultural Produce Marke ting and Processing Corporation. Id. at 26. On r emand, Co mmerce d

etermine d that this i ssue was “moot” be cause “the Department is using information from a Turkish company to determine the factory

overhead, SG&A and profit ratios . . . .” Remand Determination at 11.

5. East Coast Surrogate Freight Rates Calculation In the Final Determination Commerce

“include d freig

ht to Detr oit in calc ulating the East Coast average freig

ht rate.” Remand Determination at 11. The court found that neither Commerce

nor the G overnme

nt had add

ressed a dequate ly the issue of

how inclu

ding the Detroit shipment in the East Coast freight rate was appropriate g iven that there was no “weighting” of this rate in Commerce’s calculation of the East Coast rate. See Remand Order at 29–30. On remand, Commerce

stated tha

t it agrees with the Court that Detroit should not be included in the calculation of the East Coast average freight rate in this case, given that the record evidence does not show that Detroit shippers we re transporting goods by

way of the E ast Coast. Therefore, the Department has calculated an East Coast rate, a West Coast rate, and a separate Detroit rate. B ecause we have calculate d differentCourt No. 00-00309 Page 11

3 While Commer

ce does n ot specif ically state tha t it used the

“all-others” methodolo gy

of 19 U.S.C . § 1673d( c)(5)( A) to cal culate the Cooper ative Res pondents’ antidumping duty marg

in in the Final Determination , Commerce’s methodology is consistent with that subsection. See Final Determination , 64 Fed. Reg. at 19,874 (citi ng Bicyc les from the P.R.C. , 61 Fed. Reg. 19, 026 (Dep ’t Commerc e Apr. 30 , 1996) (f inal dete rmination )) (“F or those PRC producers/exporters that responded to our separate rates questionnaire . . . but did not rates for the different destinations, the weig hting issue raised by

the Court does not arise. Remand Determination

at 11.

6. Conclusion The court finds that Commerce has complied with its remand order with respe ct to the selection of the proper surrogate c ountry and the var ious factors of production. Moreover, as Plaintiffs do not take issue with Commerce’s selection of Turkey as the proper surrogate country or other wise cha llenge Commerce ’s selection of the proper f actors o f production used t o calculate the Fully

-Investigated Re spondents’ antidumping duty mar gins, the court, therefore, finds Commerce’s determination in this regard to be supported by substantial evidence and

ot he rw is e i n a cc or da nc e w it h l aw , a nd su st ai ns Co mm er ce ’s de te rm in at io n t ha t t he Fu ll yInve stigate d Responde

nts should r

eceive antidumpin

g duty margin s of zero p ercent

.

B. Cooperat

ive Respo ndents’ Ant

idumping Dut

y Margin In the original investig ation the Cooperative Respondents’ antidumping duty margin was calculated to be 14.88 percent. See Am. Final Determination , 65 Fed. Reg. at 35,607. Th

is antidumping duty marg

in was based on the weighted avera ge of the Fully

-Investigated Responde nts’ antid umping du

ty ma rgins. 3 See Final Determination , 65 Fed. Reg. at 19,874; seeCourt No. 00-00309 Page 12

respond t o the full a

ntidumping

questionnaire . . . we have calcula ted a we ighted- averag e marg in based on the rate s calcul ated for

the fully -examined

respondi ng comp anies, except that we did not include rates which were zero . . . [or] based entirely on facts available (i.e., the PRC-wide rate) . . . .”).

4 This subse ction pro vides: (A) Genera

l rule For pur poses of t his subsection . . . the

estimate d all-othe

rs rate shall be an amount equal to the weighted avera ge of the estimated weighted average

dumping margins established for exporters and producers individually investig ated, excluding any zero and de minimis mar

gins, an d any margin s determi

ned entir ely [on facts avai lable ]. (B) Exception If the estimated weig

hted average dumping mar gins established for all exporters and producers individually investigated are zero or de minimis mar

gins , or a re de term ined entir ely [on fa cts a vaila ble], the admin istering authority may use any reasona ble metho d to establish the estimated all-others rate for exporters and produce rs not individually investigated, including averaging the estimated weighted average

dumping margins determined for the exporters and producers individually inve stigated. 19 U.S.C. § 1673d(c)(5)(A)–(B). also 19 U.S.C. § 1673d(c)(5) 4 ; Coalition for the Pres. of Am. Brake Drum & Rotor After market Mfrs. v. United States , 23 CIT 88, 109, 44 F. Supp. 2d 229, 249 (1999). I n the Remand Determination , howeve

r, beca use the Fully -Inv estiga

ted Respo ndents re ceived a ntidumping

duty margins of zero percent, Commerce dec ided that a new methodology was needed to calculate that margin. See Remand Determination at 14. Comme

rce det ermined that it wou

ld continu

e to calcula te the Coop erative

Responde

nts’ marg in followi ng the “ all-othe

rs” metho dology

found in 19 U.S.C. § 1673d(c)(5). See id. However, because all of the marg ins in the investigation wereCourt No. 00-00309 Page 13

5 The SAA stat es that 19 U. S.C. § 16 73d(c)(5)(B) provides an exception to [19 U.S.C. § 1673d(c)(5)(A)] if the dumping margins for all of the exporters and produce rs that are either (1) zero, i.e., the Fully -Investigated Re spondents’ margins, or (2) based on facts available, i.e., the PRC-wide margin, Commerce did not follow the methodology of 19 U.S.C. § 1673d(c)(5)(A) but, instead, looked to 19 U.S.C. § 1673d(c)(5)(B ). See Remand Determination at 14. In support of this determination Commerce explained that

[a]s all the dumping rates in this redetermination on remand are now either . . . zero or based entirely on facts available, we have applied t he method

ology of section [1673d(c )(5)(B )] which is consistent with that used in determining the “all-others” rate ( i.e. , the rate applied to companies not individually investigated) in a market economy

case under the same circumstances. Sec tion [1673d(c)(5)(B)] states that in situations where the estimated weighted-averag e dumping margins established for all exporters and producers individually inve stigated are zero or de minimis , or are determined entirely

[on facts available] under section 776, “the administe ring au thority may use any reasona ble metho d to establish the estimated all-others rate for exporters and produce rs not individually investigated, including averaging the weig

htedaverage dumping marg

ins determined for the exporters and producers individually investig ated.” The Statement of Administrative Action states that in using any reasonable method to calculate the all-others rate, “[t]he expected method in such cases will be to weight-averag e the zero and de minimis margins and margins determined pursuant to the facts ava ilable, provided that volume data is available.” Thus, consistent with section [1673d(c) (5)(B) ], we have determined the se

parate rates fo r these companie s which we

re not ind ividually investig ated by

weight

averag ing the ze ro marg ins and ma

rgins de termined pursuant to facts available. Id. (citing Statemen t of Admini strative

Action ac company

ing the U rugua y Ro und Agr eements Act, H.R. Doc. No. 103-826(I) , at 873 (1994), reprinte d in 1994 U.S.C.C.A.N. 4040, 4201 (“SAA”)). 5 Using what it calls the “expected” method, Commerce ca lculated the CooperativeCourt No. 00-00309 Page 14

individually investigated ar e determined entirely

on the basis of the facts available or are zero or de minimis . In s uch situa tions, Commerce

may use any reasona ble metho d to calc

ulate the all others r ate. The expected method in s

uch case s will be to

weight

average the zero and de minimis margins and margins determined pursuant to the facts available, provided volume data is available. Howev er, if

this metho d is n ot feas ible, or if i t resu lts i n an av erage that would not be reasonably reflective of potential dumping margins for non-investigated exporters or produc ers, Commerce may use other reasona ble metho ds. 1994 U.S.C.C.A.N. at 4201 (emphasis added). Respondents’ “weighted averag e” margin based on the PRC-wide marg in of 51.74 percent and the Fully-I

nvestigated Respondents’ margins of zero per cent. Id. In its original investigation Commerce had determined the 51.74 percent PRC-wide marg in by selecting

“the higher of: (1) The highest margin stated in the notice of initiation; or (2) the hig hest margin calculated for any respondent in this investigation.” See Final Determination , 65 Fed. Reg. at 19,874 (citing Stainless Steel Wire Rod from Japan , 63 Fed. Reg. 40,434 (Dep’t Commerce July 29, 1998) (final de terminat ion)). Th us, using this method

ology Commerce

assigne d a PRC-wid

e marg in using data contained in the petition, which was “highe r than the margin calculated for a ny respondent in this investigation.” Id. It is worth notin g that c alculati on of this PRC -wide ma rgin of 51.74 percent was based, in part, on financia l data from India that is no longe r relevant to the instant investigation. See, e .g. , Antidumpin g I nvestig ation I

nitiation Checklist , Conf. R. Doc. 6 at 10– 11, 15 (citi ng Pet. for t he I mposition of

Antidumpin

g Dutie s: Certain

Non-Fr ozen Apple Juice Concentrate from China , Conf. R. Doc. 1 Ex. 12 Attach. M, at 29 (schedule 16)).

Plaintiffs object to Commerce’s methodology for recalculating the CooperativeCourt No. 00-00309 Page 15

Respondents’ antidumping duty mar gin arguing that [w]hile Comme

rce may have a c ertain a

mount of di scretion

in devising its methodologies in NME cases, the appellate cour t has stated that “the critical question is whether the methodology used by Commerce is base d on the best available information and establishes antidumping margins as accura tely as possible.” It is immediately appare

nt that Commerce’s new methodology does not calculate margins as accur ately as possible for the

[Cooperative Responden

ts]. Pls.’ Comments Regarding Commerce’s Final Remand Dete rmination (Dec. 16, 2002) (citation omitted) (“ Pls.’ Comme

nts ”) at 2–3 (emphasis removed). Plaintiffs contend that Commerce’s methodolo gy

was impro

per bec ause [t]he [Cooper

ative Res pondents’ ] rate is me ant to re present a dumping margin that reasonably reflects the potential margin for the [Cooper

ative Res pondents] had they

been ask ed to submi

t complete sales and factors of production data. I t is therefore bey ond compr

ehension that Comme

rce wou ld conside

r it reasona ble or fa ir that the [Cooperat

ive Respo ndents’] r

ate shoul d double when the margin for every single cooperative respondent had been reduced to zero. Id. at 3 (emphasis removed).

The United States (“Government”), on behalf of Commerc e, counters that Commerce’s methodolo gy

was prop er beca

use [t]he statute

does not im

pose a re quireme

nt upon Comme

rce to examine all producers and exporters of merchandise that is subject to its investigation. Rather, the statute specifically provides for at least two methodologies to be applied to all other ( i.e. , noninvestigated) producers and exporters. The incr ease in the rate for the non-selected respondents occurred be cause Commerce originally f

ollowed the methodology contained in 19 U.S.C. § 1677d(c)(5)(A) and, because compliance with this Court’s Order of Remand re sulted in ma

rgins th at were

either ze ro or bas ed entir

elyCourt No. 00-00309 Page 16 on facts available, subsequently followed the “expected method” pursuant to 19 U.S.C. § 1677d(c)(5)(B). [Plaintiffs have] not demonstr ated tha t the 28.33 percen

t rate se lected by Co mmerce i s not “reasonably

reflective” of the potential dumping margins of the non-selected respondents. Nor does the mere f act that the selected respondents all received margins of zero c ompel a finding that the potential dumping margin of the non-selected re spondents must be zero. Def.’s Resp. to Pls.’ Comments Concerning the Remand Determination Filed by the United States Dep’t of Commerce at 3–4 (Jan. 16, 2003) (“ Def.’s C omments ”).

The cour t does not a

gree t hat Commer

ce’s ca lculation of the Coo

perativ e Respond

ents’ antidumping duty marg

in in the instant investigation was proper. First, the record shows that the Cooperative Respondents fully a nd completely complied with all of Commerce ’s requests for informat ion. I ndeed, the only

appare nt differ ence be tween the Fully -Inv estiga ted Respo ndents and the Cooperative Respondents is that Commerce did not select them for full investigations. Second, while it is not inconceivable that individual margins for each Coopera tive Respondent could hav e incre ased had they been ful ly in

vestiga ted, this o utcome se ems unlike ly g

iven that all of the Fully-I

nvestigated Respondents’ antidumping duty margins were reduced to zero percent—including that respondent origina lly assigned a

n antidumping duty marg in of 27.57 percent. See Am. Final Determination , 65 Fed. Reg. at 35,607. Given these facts it appears that Commerce

strained to reach its resul

t. This is pa

rticular ly p uzzling g iven that

in reaching its result Commerce abandoned the methodology used in the Final Determination (i.e., w eightaveragi ng the e stim ated d umpi ng margi ns of t he Ful ly-Investi gated R espon dents ) even t hough that method is specifically provide d for in the statutory subsection it purported to follow. SeeCourt No. 00-00309 Page 17

Remand Determination

at 14 (citing 19 U.S.C. § 1673d(c)(5)(B)). Mor e importantly, in doing so, Commerce failed to justify the use of its new methodology

other than by re ference to the SAA. The SAA, however, takes into account the possibility that, under certain facts, the “expected” method should not be used. See SAA, 1994 U.S.C.C.A.N. at 4201 (However, if [the “expecte d”] method

is not fea sible, or

if it resu lts in an av erage

that would

not be re asonably reflective of potential dumping margins for non-investigated exporters or producers, Commerce may use other r

easonable methods.”). As the SAA indicates, when choosing a methodology

for assigni ng antid umping du

ty ma rgins Co mmerce c annot simp ly r ely on a metho dology

found to be acce ptable in other inv estiga

tions. Rath er, Comme

rce must i nsure tha t any methodolo gy

it employs in any

particular investigation “is based on the best available infor mation and establishes antidumping margins as accura tely as possible.” Shakeproof , 26 8 F. 3d a t 1 382 . In addition, when selecting a methodology Commerce must “articulate a ‘rational connection between the facts found and the choice ma de.’” Rhodia , 25 CIT at __, 185 F. Supp. 2d at 1348. The pl ain la nguage o f the s tatut e allo ws Co mmerc e the fl exib ilit y to formu late a metho dolo gy that permits it to best comply with these injunctions, and specifically allows for the averaging

of the zero percent antidumping duty margins. See 19 U.S.C. § 1673d(c)(5)(B) (“[T]he administe ring au thority may use any reasona ble metho d to estab lish the es timated a ll-other s rate for exporters and producers not individually investigated, including averaging the estimated weight ed aver age du mping ma

rgins de termined for the e xporters a nd produc ers individually investigated .” (emphasis added)). I n the Remand Determination , however, Commerce nowhere explains how its choice of methodology e stablished the Cooperative Respondents’ antidumping duty marg in “as accurately as possible” or makes a “rational connection betwe en the facts foundCourt No. 00-00309 Page 18

and the choice made.” Shakeproof , 268 F.3d at 1382; Rhodia , 25 CIT at __, 185 F. Supp. 2d at 1348. Thus, the court finds that, with respect to the recalculation of the Coopera tive Respondents’ antidumping duty mar gin, Commerce’s determination on remand is neither base d on substantial evidence nor otherwise in accordanc e with law.

CONCLUSION For the reasons set forth above, the cour t remands this matter to Commerce. On remand, Commerce

shall rev isit the issu

e of the proper c alculati on of the C ooperat ive Respo ndents’ antidumping duty marg

in and shall either: (1) use the methodology set forth in 19 U.S.C. § 1673d(c )(5)(B ); or (2)set out another methodolog y. I n either event, Co mmerce shall explai n in clear and specific terms why its selected methodology “is based on the best available information and establishes antidumping margins as accur ately as possible.” Shakeproof , 268 F.3 at 1382.

Such rema

nd deter mination is

due within

45 days of the da

te of this o

pinion, comments are due thirt y days thereaft er, and repli es to s uch co mment s 11 da ys from th eir fi ling.

______________________________ Richa rd K. E aton, Judge Dated: March 21, 2003 New York, New York