Court Opinion

ID: 931119
Source: CourtListenerOpinion
Date Created: 2013-06-25 00:01:11.122661+00
Date Added: 2024-06-11T13:03:17.905256
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

              AMS ASSOCIATES, INC.,
       (doing business as Shapiro Packaging)
                  Plaintiff-Appellant,

                           v.

                  UNITED STATES,
                  Defendant-Appellee,

                          AND

   LAMINATED WOVEN SACKS COMMITTEE,
 COATING EXCELLENCE INTERNATIONAL, LLC,
    AND POLYTEX FIBERS CORPORATION,
             Defendants-Appellees.
            ______________________

                      2012-1688
                ______________________

   Appeal from the United States Court of International
Trade in No. 11-CV-0101, Senior Judge R. Kenton Mus-
grave.
                ______________________

                Decided: June 24, 2013
                ______________________

   RONALD M. WISLA, Kutak Rock LLP, of Washington,
DC, argued for plaintiff-appellant. With him on the brief
was LIZBETH R. LEVINSON.
2                               AMS ASSOCIATES, INC.   v. US

    TARA K. HOGAN, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for defendant-appellee
United States. With her on the brief were STUART F.
DELERY, Principal Deputy Assistant Attorney General,
JEANNE E. DAVIDSON, Director, and REGINALD T. BLADES,
JR., Assistant Director. Of counsel on the brief was
REBECCA CANTU, Office of the Chief Counsel for Import
Administration, United States Department of Commerce,
of Washington, DC.

    JEFFERY B. DENNING, King & Spalding, LLP, of Wash-
ington, DC, argued for the defendants-appellees Laminat-
ed Woven Sacks Committee, et al. With him on the brief
was JOSEPH W. DORN. Of counsel was JEFFREY MARK
TELEP.
                ______________________

Before LOURIE, O’MALLEY, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
     Acting under 19 U.S.C. § 1673 et seq., the United
States Department of Commerce found that certain
Chinese merchandise was being sold in the United States
at less than fair value, and it therefore issued an order
imposing an antidumping duty on entries of such mer-
chandise into the United States. The order applied to
Zibo Aifudi Plastic Packaging Co., Ltd., a firm making
covered merchandise in the People’s Republic of China
(PRC). As to the amount of the duty, because Aifudi had
shown that it was not subject to control by the govern-
ment of the PRC, Commerce assigned Aifudi a company-
specific rate, not the country-wide rate that otherwise
applied, as a default, to such merchandise from the PRC.
    Later, at Aifudi’s request, Commerce initiated a re-
view, under 19 U.S.C. § 1675, of the amount of the anti-
 AMS ASSOCIATES, INC.   v. US                            3
dumping duty for a defined period. In that proceeding,
Commerce considered Aifudi’s eligibility for a company-
specific rate for that period. After Commerce published
its preliminary results, which were favorable to Aifudi,
Aifudi immediately withdrew from the proceeding and
removed its confidential information from the record.
Commerce then concluded that, because Aifudi had
stopped cooperating and removed much record infor-
mation, the record no longer contained enough verifiable
information to prove that Aifudi was not subject to gov-
ernment control. Commerce therefore assigned Aifudi the
default PRC-wide rate for the review period.
    AMS Associates Inc., an American affiliate of Aifudi’s
that does business as Shapiro Packaging, appealed Com-
merce’s order to the Court of International Trade, which
sustained the application of the PRC-wide rate to Aifudi.
Because we conclude that Commerce’s decision to apply
the PRC-wide rate to Aifudi is supported by substantial
evidence and does not violate any law, we affirm.
                         BACKGROUND
     Shapiro Packaging imports into the United States
laminated woven sacks manufactured and exported by
Aifudi. Laminated woven sacks are sacks made of plastic
strips that are woven together and then laminated so that
graphics or letters can be printed on the resulting surface.
In August 2008, Commerce found that laminated woven
sacks exported from the PRC were being sold in the
United States at less than fair market value and issued
an antidumping-duty order. Laminated Woven Sacks
from the People’s Republic of China, 73 Fed. Reg. 45,941
(Dep’t of Commerce Aug. 7, 2008) (notice); see 19 U.S.C. §
1673. Aifudi participated in the proceeding, submitted
information and verified it at Commerce’s request,
demonstrated that it was not subject to government
control, and therefore was assigned a “separate rate” of
64.28 percent, not the default PRC-wide rate. Id. at
4                                  AMS ASSOCIATES, INC.   v. US
45,942; Laminated Woven Sacks from the People’s Repub-
lic of China, 73 Fed. Reg. 35,647-48 (Dep’t of Commerce
June 24, 2008) (final determination).
    On September 22, 2009, in response to requests from
Aifudi and another company, Commerce initiated an
administrative review of the order for the period January
31, 2008, through July 31, 2009. Initiation of Antidump-
ing and Countervailing Duty Administrative Reviews and
Request for Revocation in Part, 74 Fed. Reg. 48,224 (Sept.
22, 2009); see 19 U.S.C. § 1675. Naming Aifudi a “manda-
tory respondent,” Commerce sent Aifudi a questionnaire,
one section of which, Section A, concerned the respondent
company’s eligibility for a separate rate. Aifudi submitted
public and confidential versions of its Section A responses
on October 26, 2009. After realizing that it had omitted
the Chinese and English translations of its Business
License Application Process and a complete set of its 2006
and 2007 Capital Verification Reports from its initial
Section A response, Aifudi submitted public and confiden-
tial versions of those documents on November 6, 2009.
Commerce then issued a First Supplemental Question-
naire, in part directed to Aifudi’s separate-rate eligibility,
to which Aifudi submitted public and confidential re-
sponses on January 14, 2010. Later in 2010, Aifudi again
supplemented its responses to Section A.
    On September 13, 2010, Commerce issued its prelimi-
nary results. Laminated Woven Sacks from the People’s
Republic of China, 75 Fed. Reg. 55,568 (Dep’t of Com-
merce Sept. 13, 2010) (prelim. admin. review). It prelimi-
narily found that Aifudi’s evidence—which Commerce had
not yet verified (as Shapiro Packaging confirmed at oral
argument in this court)—demonstrated an absence of
control by the PRC’s government and entitled Aifudi to a
separate rate of only “.68 percent” [sic]. Id. at 55,571,
55,573. Seven days later, Aifudi withdrew from the
proceeding. In its withdrawal letter, Aifudi asked Com-
merce to remove from the record, and to destroy, all
 AMS ASSOCIATES, INC.   v. US                           5
documents containing its confidential information. Com-
merce did so. On September 20, 2010, the same day that
Aifudi withdrew, Shapiro Packaging entered the proceed-
ing.
    Commerce issued the final results of the administra-
tive review on March 18, 2011. Laminated Woven Sacks
from the People’s Republic of China, 76 Fed. Reg. 14,906
(Dep’t of Commerce Mar. 18, 2010) (final admin. review).
Commerce found that Aifudi was no longer eligible for a
separate rate, “as it ha[d] significantly impeded the
Department’s ability to conduct [the] proceeding and, by
withdrawing from the review, prevented the verification
of the information it had earlier provided.” Id. at 14,908.
Under 19 U.S.C. § 1677e(a), that finding authorized
Commerce, in making its determinations, to rely on “the
facts otherwise available,” i.e., the facts available not-
withstanding the acts that impeded the proceeding and
prevented verification. Commerce concluded that Aifudi’s
withdrawal from participation and removal of its confi-
dential information meant that Commerce did “not have
any record evidence upon which to determine whether
Zibo Aifudi [was] eligible for a separate rate for this
review period,” so Aifudi would be subjected to the coun-
try-wide rate. 76 Fed. Reg. at 14,909.
    Commerce then invoked another statutory provision
to set the country-wide rate. It found that Aifudi (and
therefore the country-wide entity of which it was a part)
had “failed to cooperate by not acting to the best of its
ability to comply with requests for information.” 76 Fed.
Reg. at 14,909. Under 19 U.S.C. § 1677e(b), that finding
authorized Commerce to “use an inference that is adverse
to the interests of that party in selecting from among the
facts otherwise available.” Doing so, Commerce adopted a
PRC-wide rate of 91.73 percent. 76 Fed. Reg. at 14,909.
   On appeal to the Court of International Trade,
Shapiro Packaging argued, among other things, that
6                                 AMS ASSOCIATES, INC.   v. US
Commerce had erred in applying the PRC-wide rate of
91.73 percent to Aifudi and requested a remand to Com-
merce for a “redetermination.” AMS Assocs. v. United
States, No. 11-00101, 2012 WL 3065277 (July 27, 2012).
The Trade Court, stating that Shapiro Packaging had not
“convinced the court that there remain[ed] sufficient
information in the record to permit Commerce to deter-
mine a separate rate for Aifudi, now that Aifudi’s confi-
dential information ha[d] been removed,” sustained
Commerce’s application of the country-wide rate to Aifudi.
Id at *8. Shapiro Packaging appeals. This court has
jurisdiction under 28 U.S.C. § 1295(a)(5).
                       DISCUSSION
    The only issue on appeal is whether Commerce
properly found that Aifudi did not carry its burden to
establish its entitlement to a separate rate. We must
uphold that determination unless it is unsupported by
substantial evidence on the record or otherwise not in
accordance with law.       19 U.S.C. § 1516a(a)(2)(B)(iii),
(b)(1)(B); see Micron Tech., Inc. v. United States, 117 F.3d
1386, 1393 (Fed. Cir. 1997). We find neither defect in
Commerce’s determination.
    Commerce presumes that all exporters from the PRC
(a designated “nonmarket economy”) are subject to gov-
ernment control and therefore should be subjected to a
single country-wide rate for the duties imposed by an
antidumping-duty order. See Sigma Corp. v. United
States, 117 F.3d 1401, 1405 (Fed. Cir. 1997). But Com-
merce allows the presumption to be overcome. An export-
er can affirmatively demonstrate its entitlement to a
separate rate by showing the absence of both de jure and
de facto government control over its export activities. Id.
The absence of de jure government control can be shown
by reference to legislation and other governmental
measures that suggest sufficient company legal freedom.
Id. The absence of de facto government control can be
 AMS ASSOCIATES, INC.   v. US                           7
shown by evidence that the exporter sets its prices inde-
pendently of the government and of other exporters,
negotiates its own contracts, keeps the proceeds of its
sales (taxation aside), and selects its management auton-
omously. Id.; Advanced Tech. & Materials Co. v. United
States, 885 F. Supp. 2d 1343, 1347 (Ct. Int’l Trade 2012).
     Accordingly, in this case, Commerce could apply a
country-wide rate to Aifudi unless the record evidence
affirmatively proved the absence of both de jure and de
facto control of Aifudi by the PRC’s government. In its
Final Determination, Commerce found that Aifudi’s
withdrawal from the investigation and the Aifudi-
requested removal of its confidential information “signifi-
cantly impeded the Department’s ability to conduct this
proceeding” and left Commerce unable to verify infor-
mation that Aifudi had earlier provided in order to estab-
lish its eligibility for a separate rate. As a result,
Commerce concluded, it was unable to make a party-
specific determination of lack of government control of
Aifudi, a matter on which Aifudi had the burden of per-
suasion, so that the default country-wide rate applied. 76
Fed. Reg. at 14,908-09.
    That is how we understand Commerce’s statement
that it did “not have any record evidence upon which to
determine whether Zibo Aifudi is eligible for a separate
rate,” id. at 14,909, which it immediately followed by the
summary, “as Zibo Aifudi has not demonstrated its enti-
tlement to a separate rate,” id. This understanding is the
most natural interpretation of Commerce’s explanation,
especially when read with the relevant background legal
principles in mind. See Hontex Enters., Inc. v. United
States, 248 F. Supp. 2d 1323, 1326 n.3 (Ct. Int’l Trade
2003) (“Because [respondent] refused verification of its
submitted information, Commerce was unable to ascer-
tain whether [respondent] had rebutted the presumption
of state control that attaches in [nonmarket economy]
investigations such that it was entitled to a separate
8                                  AMS ASSOCIATES, INC.   v. US
company-specific antidumping duty margin.”).        Our
understanding reflects our conclusion that “the agency’s
path may reasonably be discerned.” Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43
(1983).
    In disregarding information that it could not verify,
Commerce did not act contrary to law. AMS cites no
authority that requires Commerce to rely on information
that it cannot verify. Specifically, it cites no statutory
provision that forbids Commerce to disregard unverifiable
information in making its decisions. And several statuto-
ry provisions reinforce, rather than undermine, the agen-
cy’s authority to disregard unverifiable information,
although affirmative statutory authorization hardly
seems necessary. Thus, 19 U.S.C. § 1677e(a)(2)(D) speci-
fies that, when submitted “information cannot be veri-
fied,” Commerce should use “the facts otherwise
available.” (Emphasis added.) And another provision, 19
U.S.C. § 1677m(e)(2), which addresses what information
Commerce must consider even when information “does
not meet all the applicable requirements,” expressly
makes a precondition of any such obligation that “the
information can be verified.” Cf. id. § 1677m(i) (expressly
requiring verification in certain circumstances).
    There also was substantial evidence to support the
conclusion that the public information left in the record
after Aifudi withdrew did not include verifiable evidence
that would be necessary to establish Aifudi’s eligibility for
a separate rate. Specifically, although the Commerce
ruling does not provide details, Commerce and the inter-
venor supporting it here explain that the record lacks
complete and verifiable information about, e.g., (1) how
Aifudi established its United States prices, (2) the pay-
ment process for its United States sales, (3) the identity of
Aifudi’s employees conducting price negotiations, and (4)
ultimate ownership of the company. Appellee United
States’ Br. at 15-17; Appellees Laminated Woven Sacks
 AMS ASSOCIATES, INC.   v. US                           9
Committee et al. Br. at 19-21. Shapiro Packaging does
not demonstrate otherwise. Without verifiable infor-
mation on those matters, Aifudi was necessarily unable to
carry its burden of affirmatively showing a lack of de jure
and de facto control by the PRC’s government.
     In these circumstances, there is no evidentiary or le-
gal error in Commerce’s decision “to disregard the public
information” that Aifudi had submitted, i.e., to disregard
all of the public information Aifudi had submitted, which
remained in the record (as the United States describes
what Commerce did, Appellee United States’ Br. at 15).
Even if an across-the-board disregard—even of verifiable,
untainted information—might be questioned in other
circumstances, here the absence of verifiable information
that would be necessary for Aifudi to carry its burden
made any other Aifudi-submitted information immaterial
to the point in dispute. At least in these circumstances,
Commerce committed no legal error in disregarding all of
Aifudi’s remaining information. Cf. Qingdao Taifa Grp.
Co. v. United States, 637 F. Supp. 2d 1231, 1239-40 (Ct.
Int’l Trade 2009) (“Because Taifa attempted to withhold
or alter sales and production documents that Commerce
requested, Commerce properly concluded that the infor-
mation that Taifa provided was ‘incomplete and unrelia-
ble’ and that no information on the record could be used to
calculate an accurate dumping margin for Taifa. Com-
merce therefore could disregard all of the information
Taifa provided . . . .”) (internal citation omitted); Shan-
dong Huarong Mach. Co. v. United States, 435 F. Supp. 2d
1261, 1295 (Ct. Int’l Trade 2006) (upholding application of
the country-wide rate where the information on the record
necessary to calculate a separate rate was incomplete and
unverifiable); Shanghai Taoen Int’l Trading Co. v. United
States, 360 F. Supp. 2d 1339, 1348 n.13 (Ct. Int’l Trade
2005) (upholding non-reliance on entire submission where
missing information went to the core of the rate determi-
nation).
10                             AMS ASSOCIATES, INC.   v. US
                     CONCLUSION
    Because Commerce could properly apply the default
country-wide rate after concluding that, with critical
information missing or unverifiable, Aifudi could not
carry its burden to justify a separate rate, we affirm.
                     AFFIRMED