Court Opinion

ID: 4547993
Source: CourtListenerOpinion
Date Created: 2020-07-13 22:01:53.742645+00
Date Added: 2024-06-11T08:26:32.392368
License: Public Domain

Slip Op. 20-89

               UNITED STATES COURT OF INTERNATIONAL TRADE

 CSC SUGAR LLC,

                     Plaintiff,
                                                 Before: Leo M. Gordon, Judge
       v.

 UNITED STATES,                                  Court No. 20-00017

                     Defendant.

                                       OPINION

[Denying Plaintiff’s motion for judgment on the agency record.]

                                                                  Dated: June 25, 2020

      Jeffrey S. Neeley, Nithya Nagarajan, Michael Klebanov, and Joseph S. Diedrich
Husch Blackwell, LLP, of Washington, DC for Plaintiff CSC Sugar LLC.

       Douglas G. Edelschick, Senior Trial Counsel, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, DC for Defendant United States.
With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E.
Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the
briefs was Paul K. Keith, Attorney, U.S. Department of Commerce, Office of the Chief
Counsel for Trade Enforcement and Compliance of Washington, DC.

       Robert C. Cassidy, Jr., Charles S. Levy, James R. Cannon, Jr., and Jonathan M.
Zielinsky, Cassidy Levy Kent (USA) LLP, of Washington, DC for Defendant-Intervenors
the American Sugar Coalition, American Sugar Cane League, American Sugarbeet
Growers Association, American Sugar Refining, Inc., Florida Sugar Cane League,
Rio Grande Valley Sugar Growers, Inc., Sugar Cane Growers Cooperative of Florida, and
the United States Beet Sugar Association.

      Rosa S. Jeong, Irwin P. Altschuler, and Sonali Dohale, Greenberg Traurig, LLP,
of Washington, DC for Defendant-Intervenor Cámara Nacional de Las Industrias
Azucarera y Alcoholera.

      Stephan E. Becker and Sahar J. Hafeez, Pillsbury Winthrop Shaw Pittman, LLP,
of Washington, DC for Defendant-Intervenor Government of Mexico.
Court No. 20-00017                                                                  Page 2

       Gordon, Judge: Before the court is the USCIT Rule 56.2 motion of Plaintiff CSC

Sugar LLC (“Plaintiff” or “CSC Sugar”) for judgment on the administrative record

challenging the U.S. Department of Commerce’s (“Commerce”) final determination in

Sugar from Mexico, 85 Fed. Reg. 3,613 (Jan. 22, 2020) (Amendment to Agreement

Suspending the Countervailing Duty Investigation) (“2020 CVD Amendment”). 1 See Pl.’s

Mot. for J. on the Agency R. under CIT Rule 56.2, ECF No. 36 (“Pl.’s Br.”); see also Def.’s

Resp. in Opp’n to Pl.’s Rule 56.2 Mot. for J. on the Agency R., ECF No. 39 (“Def.’s Resp.”);

Def.-Intervenor Gov’t of Mexico’s Resp. in Opp’n to Pl.’s ’s Mot. for J. on the Agency R.,

ECF No. 40 (“Mexico Resp.”); Resp. of Def.-Intervenor Cámara Nacional de Las

Industrias Azucarera y Alcoholera in Opp’n to Pl.’s Mot. for J. on the Agency R., ECF

No. 41, (“Cámara Resp.”); Def.-Intervenor Am. Sugar Coalition’s Resp. to Pl.’s ’s Mot. for

J. on the Agency R., ECF No. 43 (“ASC Resp.”); Reply Memorandum in Support of Pl.’s

Mot. for J. on the Agency R., ECF No. 45 (“Pl.’s Reply”). 2 The court has jurisdiction over

this matter pursuant to Section 516A(a)(2)(B)(iv) of the Tariff Act of 1930, as amended,

19 U.S.C. § 1516a(a)(2)(B)(iv) (2012), 3 and 28 U.S.C. § 1581(c) (2012). For the reasons

set forth below, the court denies Plaintiff’s motion, and sustains the 2020 CVD

Amendment.

1
  CSC Sugar also filed a parallel action, Court No. 20-00016, challenging Commerce’s
amendment to the Antidumping Duty (“AD”) Suspension Agreement (“2020 AD
Amendment”), which is addressed in this Court’s decision, Slip Op. 20-88, also issued
this date.
2
  All citations to parties' briefs and the agency record are to their confidential versions
unless otherwise noted.
3
  Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of
Title 19 of the U.S. Code, 2012 edition.
Court No. 20-00017                                                                Page 3

                                    I. Background

      In 2014, pursuant to a petition filed by the American Sugar Coalition, and its

members (collectively, “ASC”), Commerce and the U.S. International Trade Commission

conducted an investigation as to whether imports of sugar from Mexico were being

subsidized, and whether such imports were injurious to the U.S. industry. After Commerce

issued a preliminary determination that countervailable subsidies were being supplied,

Commerce, on behalf of the United States Government, and the Government of Mexico

(“Mexico”) negotiated and signed a suspension agreement. See Sugar From Mexico,

79 Fed. Reg. 78,044 (Dep’t of Commerce Dec. 29, 2014) (suspension of CVD

investigation) (“CVD Agreement”).

      In 2017, Commerce and Mexico negotiated amendments to the CVD Agreement.

See Sugar from Mexico, 82 Fed. Reg. 31,942 (Dep’t of Commerce July 11, 2017)

(amendment to CVD Suspension Agreement) (“2017 CVD Amendment”). Among other

changes, this amendment altered the definition of “refined sugar.” See id. (amending

definition of “refined sugar” to consist of sugar with polarity of 99.2 degrees and above,

instead of 99.5 degrees and above). In response, CSC Sugar commenced an action

challenging the 2017 CVD Amendment on procedural and substantive grounds.

CSC Sugar demonstrated that Commerce failed to maintain a complete record including

memoranda of ex parte meetings as required pursuant to 19 U.S.C. § 1677f(a)(3).

The court issued two decisions ultimately vacating the 2017 CVD Amendment. See CSC

Sugar v. United States, 42 CIT ___, 317 F. Supp. 3d 1322 (2018); CSC Sugar v. United
Court No. 20-00017                                                                 Page 4

States, 43 CIT ___, 413 F. Supp. 3d 1310 (2019) (“CSC Sugar II”). The court assumes

familiarity with these decisions.

       Thereafter, Commerce commenced a proceeding to consider and adopt a new

CVD amendment. See CVD Statutory Assessment Memo at 1–2, PD 4 101 (describing

negotiation, notice and comment process, and signing of 2020 CVD Amendment). CSC

Sugar now challenges the 2020 CVD Amendment arguing (1) that Commerce did not

comply with recordkeeping requirements during the negotiation of the 2020 CVD

Amendment; (2) that the record does not support the need to both revise the polarity

standards for raw and refined sugar and incorporate a bulk shipment requirement; and

(3) that Commerce did not provide a complete analysis of the public interest requirement

under 19 U.S.C. § 1673c(a)(2)(B). See generally Pl.’s Br.

                                    II. Standard of Review

       The court sustains Commerce’s “determinations, findings, or conclusions” unless

they are “unsupported by substantial evidence on the record, or otherwise not in

accordance with law.” 19 U.S.C § 1516a(b)(1)(B)(i). More specifically, when reviewing

agency determinations, findings or conclusions for substantial evidence, the court

assesses whether the agency action is reasonable given the record as a whole. Nippon

Steel Corp v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006). Substantial

evidence has been described as “such relevant evidence as a reasonable mind might

4
  “PD ___” refers to a document contained in the public administrative record, which is
found in ECF No. 34-1, unless otherwise noted. “CD ___” refers to a document contained
in the confidential administrative record, which is found in ECF No. 34-2, unless otherwise
noted.
Court No. 20-00017                                                              Page 5

accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States,

407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.

197, 229 (1938)). Substantial evidence has also been described as “something less than

the weight of evidence, and the possibility of drawing two inconsistent conclusions from

the evidence does not prevent an administrative agency’s findings from being supported

by substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).

      Fundamentally, though, “substantial evidence” is best understood as a word

formula connoting a reasonableness review. 3 Charles H. Koch, Jr., Administrative Law

and Practice § 9.24[1] (3d ed. 2020). Therefore, when addressing a substantial evidence

issue raised by a party, the court analyzes whether the challenged agency action

“was reasonable given the circumstances presented by the whole record.” 8A West’s Fed.

Forms, National Courts § 3.6 (5th ed. 2020).

      Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural

Res. Def. Council, Inc., 467 U.S. 837, 842–45 (1984), governs judicial review of

Commerce's interpretation of the countervailing duty statute. See United States v.

Eurodif S.A., 555 U.S. 305, 316 (2009) (An agency's “interpretation governs in the

absence of unambiguous statutory language to the contrary or unreasonable resolution

of language that is ambiguous.”).

                                    III. Discussion

      CSC Sugar first argues that because the 2020 CVD Amendment makes

substantively the same changes to the CVD Agreement as the 2017 CVD Amendment,

Commerce’s recordkeeping failure for the 2017 CVD Amendment “is carried over to the
Court No. 20-00017                                                                   Page 6

2020 record by reason of Commerce’s implicit reliance on this tainted record.” Pl.’s Br.

at 12. To the contrary, Commerce expressly clarified that it would rely on “only”

information placed on the record after October 18, 2019, the date of the court’s decision

vacating the 2017 CVD Amendment. See Period for Rebuttal Comments, PD 49

(“Commerce will only consider comments and factual information submitted to the official

records of these proceedings after October 18, 2019.”).

       Accepting CSC Sugar’s position that Commerce implicitly relied on information

from the 2017 proceeding would require the court to conclude that Commerce acted in

bad faith in conducting the 2020 proceeding. The law is clear that, absent “well-nigh

irrefragable proof,” government officials are presumed to act in good faith in discharging

their duties. McEachern v. Office of Personnel Management, 776 F.2d 1539, 1544

(Fed. Cir. 1985). Yet CSC Sugar appears to contend that Commerce’s procedural failure

in the negotiations over the 2017 CVD Amendment can never be remedied, maintaining

that “[e]ven if the details of those ex parte meetings were disclosed now, which Commerce

admitted it cannot do as part of the prior litigation, that would not vindicate CSC Sugar’s

right to participate in the process while the process is ongoing.” Pl.’s Br. at 13. The court

does not agree and rejects CSC Sugar’s argument that the procedural defects of the 2017

proceeding somehow carried over to the 2020 proceeding.

       As for CSC Sugar’s argument that Commerce improperly cloned the record of the

2017 proceeding for the 2020 proceeding, see Pl.’s Br. at 10–14, there is no dispute that

the changes in the 2020 CVD Amendment are substantively the same as those in the

2017 CVD Amendment. Nevertheless, Defendant argues that “CSC is incorrect that the
Court No. 20-00017                                                                 Page 7

records are substantively identical.” Def.’s Resp. at 17. CSC Sugar ignores the crucial

fact that it had the opportunity to develop the record of the 2020 proceeding through

submission of comments, rebuttal comments, and factual information. See Comments on

Suspension Agreement, PD 42; Rebuttal Comments, PD 58; Clarification of Rebuttal

Comments, PD 66; Comments on Draft Amendments to Suspension Agreement, PD 85.

This crucial fact undercuts Plaintiff’s attempt to equate the 2020 proceeding with the 2017

proceeding. Cf. CSC Sugar II, 43 CIT at ___, 413 F. Supp. 3d at 1317 (explaining

prejudice to CSC Sugar in the 2017 Amendment negotiations, noting “Commerce’s

complete failure to follow § 1677f effectively prevented CSC Sugar from commenting on

the ex parte materials and discussions Commerce engaged in during the

CVD Amendment negotiations.”).

       Although certain information in the record of the 2020 proceeding was also in the

record for the 2017 proceeding, this fact alone does not demonstrate that the procedural

irregularity the court found in the 2017 proceeding carries over to the 2020 proceeding.

CSC Sugar argues that information originally placed on the record of the 2017 proceeding

is tainted and therefore should not be placed in the record of the 2020 proceeding. See

Pl.’s Br. at 13. CSC Sugar’s argument is predicated on the view that this Court passed on

the merits of the information contained in the record of the 2017 proceeding. Plaintiff is

mistaken. The reason for the court’s order vacating the 2017 CVD Amendment was

Commerce’s failure to memorialize ex parte meetings and no more. See CSC Sugar II,

43 CIT at ___, 413 F. Supp. 3d at 1318. Given Commerce’s express commitment to

consider solely information submitted after October 2019, see Period for Rebuttal
Court No. 20-00017                                                               Page 8

Comments, as well as the fact that CSC Sugar had ample opportunity to participate and

comment on the new record, CSC Sugar has failed to demonstrate that “record supporting

the 2020 Amendment is functionally the same as the record supporting the 2017

Amendment.” See Pl.’s Br. at 10.

      Aside from contending that the procedural defects of the 2017 proceeding should

be imputed to the 2020 proceeding, Plaintiff maintains that the “2020 Amendment suffers

from procedural irregularities related to timing, which also deprived CSC Sugar of

important procedural benefits.” Id. at 14–19. Specifically, CSC Sugar argues that

Commerce rushed the 2020 proceeding, completing it in only six weeks, which left “simply

no time (or willingness by Commerce) … to consider and address new information.” Pl.’s

Br. at 15. Plaintiff’s contentions are not supported by the record. CSC Sugar does not

argue that Commerce’s swift completion of the 2020 proceeding violated any statutory or

regulatory provisions. While Plaintiff contends that the proceeding did not provide

adequate time for the submission and consideration of certain information, see Pl.’s Br.

at 18, it did not press Commerce for additional time to cure any perceived procedural

shortcomings or to submit additional information for the record, except for one instance.

And, Commerce granted CSC Sugar’s sole extension request. See Ext. for Comments

on Amendments to Draft Suspension Agreements, PD 29. CSC Sugar has thus failed to

demonstrate that it was deprived of any procedural safeguards regarding the information

on the 2020 CVD Amendment record.

      CSC Sugar also argues that “by statute and through practice, Commerce has a

duty to publish appropriate notifications and to issue instructions to Customs that puts
Court No. 20-00017                                                                   Page 9

into effect its published decisions.” Pl.’s Br. at 16. CSC Sugar notes that “Commerce held

off on issuing the instructions to vacate the 2017 Amendment by almost seven weeks.

Yet, it took only three weeks for Commerce to issue instructions to implement the 2020

Amendment.” Id. Problematically, Plaintiff does not cite any statutes, regulations, or

practice that Commerce allegedly violated. Instead, CSC Sugar’s contention appears to

be that Commerce must have acted in bad faith by delaying its instructions to Customs in

vacating the 2017 CVD Amendment. 5 Commerce’s instructions for the termination of the

2017 CVD Amendment specifically state that “as of [December 7, 2019], the CVD

Agreement . . . is in effect and applies to all contracts entered into after [December 7,

2019.]” See Termination of Customs Instructions, PD 114.

         Therefore, the delay in issuing the instructions did not impact the dates of the

contracts to which the original CVD Agreement applied. Similarly, Commerce’s

instructions for the 2020 CVD Amendment were informational and state that “[t]he 2020

5
    Plaintiff does cite to this Court’s Order of December 6, 2019, in which the Court stated:

                This discrepancy in rationales indicates that the purpose of
                the stay is not to “permit an orderly transition to compliance
                with the Court’s judgments,” but instead to delay enforcement
                of the judgment until Commerce issues a “new” suspension
                agreement and tries to force Plaintiff to start an appeal anew.
                Without attempting to discern the “true” motivation for the stay
                of enforcement, it suffices to say that the difference in
                rationales asserted by the Defendant and the Defendant-
                Intervenors gives the court pause.

CSC Sugar II, 43 CIT at ___, 413 F. Supp. 3d at 1310 (Court No. 17-00214). Although
the court did express concern about the “discrepancy” in rationales for delay asserted by
Commerce and other interested parties, Plaintiff has not met its burden in demonstrating
any factual support that Commerce’s delay was actually the result of bad faith.
Court No. 20-00017                                                              Page 10

CVD Amendment applies to all contracts for Sugar from Mexico exported from Mexico on

or after the signature date of the Amended CVD Agreement, i.e., [January 15, 2020].”

2020 CVD Amendment Customs Instructions, PD 118. Thus, even pursuant to the

Customs instructions, the original CVD Agreement applied to contracts for sugar from

Mexico from the time of the termination of the 2017 CVD Amendment to the signing of

the 2020 CVD Amendment. These facts make it difficult to accept CSC Sugar’s hoped for

inference that Commerce acted in bad faith in delaying its issuance of instructions to

Customs.

      Turning to the merits, CSC Sugar maintains that Commerce’s adoption of the 2020

CVD Amendment is unsupported by substantial evidence because “Commerce has

provided no evidence to show why the 2020 Amendment’s change in polarity standards

are necessary in addition to the amendment’s bulk-shipment requirement.” Pl.’s Br. at 20.

Plaintiff also argues that “the polarity standard adopted is contrary to law because

Commerce must explain the ‘connection between the facts found and the choice made.’”

Id. (citing Elec. Consumers Res. Council v. Fed. Energy Regulatory Comm'n, 747 F.2d

1511, 1513 (D.C. Cir.1984)).

      Plaintiff’s argument that Commerce failed to provide a “reasoned explanation” for

a change in the polarity threshold is misplaced. Commerce explained, throughout the

negotiation of the 2020 CVD Amendment, why the changes to the polarity thresholds for
Court No. 20-00017                                                                  Page 11

Refined Sugar 6 and Other Sugar 7 coupled with the inclusion of the “bulk shipment”

provision 8 for Other Sugar work in concert to “eliminate completely” the injurious effects

of Mexican sugar imported into the United States. See 19 U.S.C. § 1673c(c); see also

CVD Statutory Assessment Memo, PD 101; Sugar Comments Memo, PD 102.

Specifically, during the negotiation of the 2020 CVD Amendment, Commerce explained

that modifying the polarity thresholds and including a bulk-shipping provision would help

to address two critical issues: (1) diminished supply of raw sugar for United States cane

sugar refiners; and (2) decline in United States price of Refined Sugar caused by exports

of Mexican sugar into the United States. See CVD Statutory Assessment Memo at 5–8

(explaining that “These changes to the definitions of Refined and Other Sugar ensure to

the fullest extent possible, under the amended Agreements, the availability of supply of

input sugar for U.S. cane refiners.”); Sugar Comments Memo at 5–8 (“The change in

polarity definition, which effectively establishes a price increase for sugar with a polarity

between 99.2 and 99.5, helps prevent price suppression or undercutting. The changes

6
  “Refined Sugar” is defined as sugar at a polarity of 99.2 and above, as produced and
measured on a dry basis. See 2020 CVD Amendment.
7
  “Other Sugar” is defined as sugar at a polarity of less than 99.2, as produced and
measured on a dry basis. See 2020 CVD Amendment.
8
  The “bulk shipment” provision specifies that “Other Sugar must be exported to the United
States loaded in bulk and freely flowing (i.e., not in a container, tote, bag or otherwise
packaged) into the hold(s) of an ocean-going vessel.” See 2020 CVD Amendment. “To be
considered as Other Sugar, if Sugar leaves the Mexican mill in a container, tote, bag or
other package (i.e., is not freely flowing), it must be emptied from the container, tote, bag
or other package into the hold of the ocean-going vessel for exportation.” Id. “All other
exports of Sugar from Mexico that are not transported in bulk and freely flowing in the
hold(s) of an ocean-going vessel will be considered to be Refined Sugar for purposes of
the Export Limit or Additional U.S. Needs Sugar, regardless of the polarity of that Sugar.”
Id.
Court No. 20-00017                                                                 Page 12

contained in the 2020 CVD Amendment support both objectives through quantitative

restrictions that allow relatively more Other Sugar for U.S. refining operations and further

restrict the amount of Refined Sugar (including sugar with a polarity between 99.2 and

99.5) in the U.S. market. … The potential harm to CSC is uncertain and limited, while the

potential benefits to the domestic industry as a whole are substantial. For these reasons,

we do not find CSC’s arguments persuasive and we believe that the changes to the

polarity definitions, and other provisions of the 2020 Amendments, are justified.”).

Accordingly, Commerce reasonably explained why the polarity modification was

necessary along with the bulk-shipping provision.

       With respect to CSC Sugar’s substantial evidence challenge, to prevail on a

substantial evidence challenge to Commerce’s determination to include both the polarity

threshold modification as well as the bulk-shipping requirement, CSC Sugar needed to

demonstrate that the record supports one, and only one, reasonable outcome: that the

bulk-shipping requirement “entirely eliminated” the injurious effect of the imported sugar

and that the polarity threshold change was redundant and unnecessary. See Tianjin

Wanhua Co. v. United States, 41 CIT ___, ___, 253 F. Supp. 3d 1318, 1328 (2017)

(emphasizing that claimants challenging Commerce’s determinations that choose among

various options must demonstrate that their position is the “one and only reasonable”

option on the record); Mitsubishi Heavy Indus. Ltd. v. United States, 275 F.3d 1056, 1062

(Fed. Cir. 2001) (“‘[T]he possibility of drawing two inconsistent conclusions from the

evidence does not prevent an administrative agency's finding from being supported by

substantial evidence.’” (quoting Consolidated Edison, Co. v. NLRB, 305 U.S. 197, 229
Court No. 20-00017                                                                Page 13

(1938))). Plaintiff does not explain how its preferred outcome is the one and only

reasonable choice on the record. See Pl.’s Reply at 15 n.8. It just offers a conclusory

assertion that the bulk shipment requirement rendered the polarity modification

superfluous. Although CSC Sugar presented this argument to Commerce, other parties

(including Defendant-Intervenors) also responded with their own arguments and

information. See, e.g., ASC Rebuttal Comments at 10, PD 59, CD 13 (contending that

“[w]ithout both provisions, the likelihood that such sugar bypasses refiners at the lower

reference price increases”). Commerce directly addressed why it found both the bulk

shipment provision and polarity modification necessary, explaining:

                     In our statutory memoranda, we identified distinct
             problems with the functioning of the original agreements and
             explained how the changes contained in the 2020
             Amendments address those problems. We noted that ASC
             alleged that U.S. cane refiners were receiving a diminished
             supply of sugar for their processing operations and that
             imports of Mexican sugar were undercutting U.S. sugar
             prices. Specifically, ASC alleged that Mexican “estandar”
             sugar was being sold for direct consumption at low prices,
             thus supplanting sales of refined sugar. The shipping
             requirements in the 2020 Amendments directly increase the
             likelihood that U.S. cane refiners will receive sufficient
             amounts of sugar for their operations, and all interested
             parties, including CSC, seem to agree on this point. The
             change in polarity definition, which effectively establishes a
             price increase for sugar with a polarity between 99.2 and 99.5,
             helps prevent price suppression or undercutting. The changes
             contained in the 2020 CVD Amendment support both
             objectives through quantitative restrictions that allow relatively
             more Other Sugar for U.S. refining operations and further
             restrict the amount of Refined Sugar (including sugar with a
             polarity between 99.2 and 99.5) in the U.S. market. We also
             explained that the change in polarity definition facilitates
             monitoring and verification. The changes contained in the
             2020 Amendments work in concert with each other to ensure
Court No. 20-00017                                                                Page 14

              that, to the fullest extent possible, the 2020 Amendments
              meet the statutory requirement to “eliminate completely” the
              injurious effects of exports.

Sugar Comments Memo at 6; see also id. at 7 (“the changes to the polarity definition are

intended to address market conditions caused by Mexican sugar imports and to eliminate

completely the injury to the domestic industry caused by such imports. The changes are

not intended to ‘undercut the business model’ of CSC.”). Commerce thus explained its

determination based on information in the record. Accordingly, the court sustains the 2020

CVD Amendment (including the polarity modification) as reasonable (and therefore

supported by substantial evidence).

       Lastly, CSC Sugar contends that “Commerce failed to adequately address the

public interest as required by 19 U.S.C. § 1673c(a)(2).” See Pl.’s Br. at 23–25. The record

does not support CSC Sugar’s argument, as Commerce explained why the 2020 CVD

Amendment is in the public interest based on its analysis of the criteria in 19 U.S.C.

§ 1673c(a)(2)(B). See CVD Statutory Assessment Memo at 8–11; Sugar Comments

Memo at 9–11.

       19 U.S.C. § 1673c(a)(2)(B) provides that in evaluating whether a quantitative

restriction agreement (such as the one included in the 2020 CVD Amendment) is in the

public interest, Commerce shall consider:

              (i)    whether, based upon the relative impact on consumer
                     prices and the availability of supplies of the
                     merchandise, the agreement would have a greater
                     adverse impact on United States consumers than the
                     imposition of antidumping duties;
Court No. 20-00017                                                                 Page 15

              (ii)    the relative impact on the international economic
                      interests of the United States; and

              (iii)    the relative impact on the competitiveness of the
                      domestic industry producing the like merchandise,
                      including any such impact on employment and
                      investment in that industry.

19 U.S.C. § 1673c(a)(2)(B). CSC Sugar does not argue that the public interest is better

served by terminating the suspension agreement and issuing a countervailing duty order.

See Pl.’s Br. at 23–25; Pl.’s Reply at 17–20. Rather, it contends that the terms of the 2020

CVD Amendment (namely, the quantitative restriction agreement) are structured in a

manner that precludes the 2020 CVD Amendment from being in the public interest, unlike

the original CVD Agreement.

       As to the first factor, Commerce noted that the 2020 CVD Amendment limits the

supply of Mexican sugar and revises the export limit ratio of “Other Sugar” and “Refined

Sugar,” which helps (1) to counteract subsidies that incentivize Mexican overproduction,

and (2) to support price stability for consumers in the United States. See CVD Statutory

Assessment Memo at 9. Commerce found that “the impact of either the amended CVD

Agreement or the imposition of countervailing duties would be to bring consumer prices

for subject merchandise to fairly-traded market prices.” Id. Consequently, Commerce

determined that the 2020 CVD Amendment does not have a greater adverse impact on

United States customers than the imposition of countervailing duties. Id.

       With respect to the second criterion, the 2020 CVD Amendment helps to prevent

unfairly traded imports of sugar while also promoting trade with Mexico, one of the United
Court No. 20-00017                                                                 Page 16

States’ closest trading partners. See CVD Statutory Assessment Memo at 10.

In simultaneously eliminating injury to the United States industry caused by imports of

Mexican sugar and promoting trading relationships, Commerce found that the 2020 CVD

Amendment promotes the international economic interests of the United States. Id.

       CSC Sugar primarily challenges Commerce’s analysis with respect to the third

factor, which requires Commerce to assess “the relative impact on the competitiveness

of the domestic industry producing the like merchandise.” 19 U.S.C. § 1673c(a)(2)(B)(iii);

see Pl.’s Br. at 25–26. Plaintiff argues that “although Commerce spills much ink across

multiple memoranda under headings entitled ‘public interest,’ in substance those

discussions are really about the domestic industry’s interest—and making the largest

companies in the domestic industry more profitable (although Commerce prefers to refer

to this as being “more competitive”)—to the exclusion of the general public’s interest.” Id.

at 24. Plaintiff also maintains that “even with respect to just the domestic industry,

Commerce still failed to address the full effect on the domestic industry, including CSC

Sugar—and the 2020 Amendment’s potential consequences to it.” Id. at 25.

       CSC Sugar argues that the statute requires Commerce to examine competition

within the U.S. industry, as well as the public interest as a whole. During the proceeding,

Commerce explained that “antidumping and countervailing duty laws are primarily

concerned with the pricing behavior of foreign producers, the prices of foreign imports,

and the impact of such imports on the U.S. domestic industry.” See Sugar Comments

Memo at 10. Accordingly, Commerce interpreted the phrase “competitiveness of the
Court No. 20-00017                                                                Page 17

domestic industry” to refer to the competitiveness of the domestic industry as a whole in

relation to foreign imports and foreign producers of subject merchandise. Id.

       Plaintiff contends that “Commerce has no special expertise or knowledge in

determining what the term ‘public interest’ means as a matter of law.” Pl.’s Br. at 23.

However, Plaintiff does not challenge Commerce’s interpretation of § 1673c(a)(2)(B) with

any reference to the legal framework that the court uses to resolve challenges to

Commerce’s statutory interpretations (i.e., Chevron). See generally Pl.’s Br. To the extent

that Plaintiff seeks to challenge Commerce’s interpretation of § 1673c(a)(2)(B), the court

deems this argument waived as Plaintiff has failed to make this argument with any

reference to the proper legal framework. See Nan Ya Plastics Corp. v. United States, 810

F.3d 1333, 1347 (Fed. Cir. 2016) (observing that Plaintiff failed to make its statutory

interpretation “arguments within the operative Chevron framework. That misstep typically

warrants a finding of waiver.” (citing United States v. Great Am. Ins. Co., 738 F.3d 1320,

1328 (Fed. Cir. 2013) (“It is well established that arguments that are not appropriately

developed in a party's briefing may be deemed waived.”)); see also Zhejiang Sanhua Co.

v. United States, 39 CIT ___, ___, 61 F. Supp. 3d 1350, 1358 (2015) (citing Great

American Insurance in holding that a party waived its arguments for failing to raise them

within the operative Chevron framework); JBF RAK LLC v. United States, 38 CIT ___,

___, 991 F. Supp. 2d 1343, 1356 (2014) (same). Accordingly, the court will not address

Plaintiff’s arguments that Commerce failed to properly interpret § 1673c(a)(2)(B) in

adopting the 2020 CVD Amendment, and instead address Plaintiff’s argument that

Commerce failed to reasonably apply the statute in adopting the 2020 CVD Amendment.
Court No. 20-00017                                                                Page 18

       In applying the third factor to the instant record, Commerce found that the 2020

CVD Amendment would have a positive impact on the competitiveness of the domestic

industry, including CSC Sugar. See Sugar Comments Memo at 10–11. Specifically, the

signatory producers/exporters of the 2020 CVD Amendment have agreed to revise their

prices of subject merchandise to “eliminate completely” the injurious effect of Mexican

sugar imported into the United States. Id. Additionally, Commerce found that the

amended definitions of “Refined Sugar” and “Other Sugar” ensure an adequate supply of

input material is available to the United States industry for further processing, a crucial

benefit that Commerce determined could not be guaranteed with a countervailing duty

order. See CVD Statutory Assessment Memo at 9. As a result, Commerce found that the

public interest as a whole was served. Accordingly, the court sustains Commerce’s

determination that the 2020 CVD Amendment met the public interest criteria of

§ 1673c(a)(2)(B).

                                        IV. Conclusion

       For the foregoing reasons, Plaintiff’s motion for judgment on the agency record is

denied. Judgment will be entered accordingly.

                                                                /s/ Leo M. Gordon
                                                             Judge Leo M. Gordon

Dated: June 25, 2020
       New York, New York