Court Opinion

ID: 2713719
Source: CourtListenerOpinion
Date Created: 2014-08-05 20:59:06.825852+00
Date Added: 2024-06-11T13:16:37.710744
License: Public Domain

Slip Op. 13-151

               UNITED STATES COURT OF INTERNATIONAL TRADE

                                            :
CHANG CHUN PETROCHEMICAL                    :
CO. LTD.,                                   :
                                            :
              Plaintiff,                    :
                                            :
                      v.                    :
                                            :      Before: Gregory W. Carman, Judge
UNITED STATES,                              :
                                            :      Court No. 11-00095
              Defendant,                    :
                                            :
                      and                   :
                                            :
SEKISUI SPECIALTY CHEMICALS                 :
AMERICA, LLC,                               :
                                            :
              Defendant-Intervenor.         :
                                            :

                                      OPINION & ORDER

[Commerce’s Remand Results are sustained]

                                                                    Dated: December 18, 2013

       Kelly A. Slater, Edmund W. Sim, and Jay Y. Nee, Appleton Luff Pte Ltd., of Washington,
DC, for Plaintiff.

       Alexander V. Sverdlov and Loren M. Preheim, Trial Attorneys, Commercial Litigation
Branch, Civil Division, United States Department of Justice, of Washington, DC, for Defendant.
With them on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson,
Director, and Claudia Burke, Assistant Director. Of counsel on the brief was Melissa M.
Brewer, Attorney-International, Office of the Chief Counsel for Trade Enforcement and
Compliance, United States Department of Commerce.

      Daniel J. Plaine, Thomas M. Johnson, Jr., Andrea F. Farr, and James F. Doody, Gibson
Dunn & Crutcher, LLP, of Washington, DC, for Defendant-Intervenor.
Court No. 11-00095                                                                          Page 2

         CARMAN, JUDGE: Defendant-Intervenor Sekisui Specialty Chemicals America, LLC

(“Defendant-Intervenor” or “Sekisui”) partially challenges the Results of Redetermination

Pursuant to Court Remand (“Remand Results”), dated July 12, 2013 (ECF No. 47-1), by

Defendant U.S. Department of Commerce (“Defendant” or “Commerce”) in the investigation of

an antidumping duty order on polyvinyl alcohol (“PVA”) from Taiwan. See Polyvinyl Alcohol

from Taiwan, 76 Fed. Reg. 5,562 (Dep’t of Commerce Feb. 1, 2011) (final determination of sales

at less than fair value) (“Final Determination”), P.R. 1 157, and accompanying Issues and

Decision Memorandum, A-583-841 (Jan. 26, 2011), P.R. 153. Plaintiff Chang Chun

Petrochemical Company Limited (“Plaintiff” or “CCPC”) supports the Remand Results. Upon

review of the Remand Results and parties’ comments, the Court holds that Commerce fully

complied with the Court’s remand order and thus sustains the Remand Results.

                                         PROCEDURAL HISTORY

         The procedural history of this case was detailed in Slip Opinion 13-49 (“Slip Op. 13-49”)

(ECF No. 42). Familiarity with the procedural history is presumed and only the essential events

will be reproduced, as relevant, in this opinion. At the heart of this case was whether Commerce

applied the proper regulation and whether Commerce properly applied that regulation.

1
    “P.R.” stands for “Public Record.”
Court No. 11-00095                                                                            Page 3

       In 1997, Commerce promulgated a targeted dumping regulation which supplemented the

targeted dumping statute. See 19 C.F.R. § 351.414(f) (2004) 2 (hereinafter referred to as the

“targeted dumping regulation”). 3

       In September of 2004, Celanese Chemicals America, LLC—now known as Sekisui

Specialty Chemicals America, LLC, Defendant-Intervenor in this case and a domestic producer

of PVA—filed a petition against PVA from Taiwan that is the underlying administrative

proceeding at issue. Celanese alleged all three types of targeted dumping—for customer, region

and time period—against CCPC, Plaintiff in this case and the only known producer of PVA in

Taiwan during the period of investigation from July 2003 to June 2004. On October 4, 2004,

Commerce initiated a less than fair value investigation on PVA from Taiwan. Polyvinyl Alcohol

2
 All references to Title 19 of the Code of Federal Regulations refer to the 2004 edition, unless
otherwise stated. The provision at issue in the instant case, 19 C.F.R. § 351.414(f), did not
change between its promulgation in 1997 and the initiation of this investigation in 2004.
3
 The targeted dumping regulation, codified at 19 C.F.R. § 351.414(f) in 1997 and revoked in
2008, stated, in pertinent part:

                (f) Targeted dumping—(1) In general. Notwithstanding paragraph (c)(1) of
       this section, the Secretary may apply the average-to-transaction method, as
       described in paragraph (e) of this section, in an antidumping investigation if:
                ....
                (ii) The Secretary determines that such differences cannot be taken into
                account using the average-to-average method or the transaction-to-
                transaction method and explains the basis for that determination.
          (2) Limitation of average-to-transaction method to targeted dumping. Where the
       criteria for identifying targeted dumping under paragraph (f)(1) of this section are
       satisfied, the Secretary normally will limit the application of the average-to-
       transaction method to those sales that constitute targeted dumping under paragraph
       (f)(1)(i) of this section.
Court No. 11-00095                                                                            Page 4

from Taiwan, 69 Fed. Reg. 59,204 (Dep’t of Commerce Oct. 4, 2004) (initiation of antidumping

duty investigation), P.R. 28.

       Due to extensive litigation regarding the injury determination made by the International

Trade Commission, the antidumping duty investigation was interrupted for six years. See Slip

Op. 13-49 at 5-6. In September of 2010, Commerce issued its preliminary determination of

dumping, Polyvinyl Alcohol from Taiwan, 75 Fed. Reg. 55,552 (Dep’t of Commerce Sept. 13,

2010) (preliminary determination of sales at less than fair value and postponement of final

determination), P.R. 127, and five months later its final determination with a weighted-average

dumping margin of 3.08 percent, Final Determination, 76 Fed. Reg. at 5,563. Commerce

determined that CCPC engaged in targeted dumping which warranted the application of the

average-to-transaction method to all sales. The antidumping order was published in March.

Polyvinyl Alcohol from Taiwan, 76 Fed. Reg. 13,982 (Dep’t of Commerce Mar. 15, 2011)

(antidumping duty order), P.R. 162.

       In December of 2008, during the time that the injury determination was being litigated

and the antidumping investigation was on hold, Commerce issued an interim final rule 4 which

removed the targeted dumping regulation—19 C.F.R. § 351.414(f)— that had been in effect at

the time the PVA investigation was initiated in 2004.

4
  Withdrawal of the Regulatory Provisions Governing Targeted Dumping in Antidumping Duty
Investigations, 73 Fed. Reg. 74,930 (Dep’t of Commerce Dec. 10, 2008) (interim final rule)
(hereinafter referred to as “Withdrawal Notice”). The legality of the Withdrawal Notice was
subsequently challenged, and a new withdrawal is under review at Commerce. See Gold East
Paper (Jiangsu) Co., Ltd. v. United States, 37 C.I.T. __, 918 F. Supp. 2d. 1317 (2013).
However, the current legal challenge does not affect the outcome of this case because the
targeted dumping regulation was unequivocally in effect during the period of review of the
underlying proceeding.
Court No. 11-00095                                                                             Page 5

       Plaintiff brought this action challenging Commerce’s decision to apply the targeted

dumping methodology to CCPC’s sales. See Pl.’s Mot. for J. on the Agency Record 56.2 (ECF

No. 23). Defendant-Intervenor fully supported Commerce’s Final Determination. Resp. Br. of

Sekisui Specialty Chemicals America, LLC in Opp’n to Pl.’s Mot. for J. on the Agency Record

(ECF No. 30). In the first slip opinion, the Court found that Commerce (1) properly applied the

targeted dumping regulation in the underlying investigation and (2) has the discretion to shift

policy because an agency’s policy is not binding on itself. Slip Op. 13-49 at 17-19, 25-27.

However, the Court remanded the case to Commerce (1) “to provide an explanation, pursuant to

19 C.F.R. § 351.414(f)(1)(ii), as to why the transaction-to-transaction method cannot account for

the differences in Plaintiff’s U.S. sales prices” and (2) “to provide a reasoned analysis or

explanation, pursuant to 19 C.F.R. § 351.414(f)(2), as to why the specific circumstances of this

case are such that the normal limitation on application of the average-to-transaction method is

inappropriate to employ.” Id. at 28.

       On May 23, 2013, Commerce released the draft results of its remand redetermination to

interested parties and provided parties the opportunity to comment. Remand Results at 2. Both

Plaintiff and Defendant-Intervenor provided comments. Id. On July 12, 2013, Commerce filed

its Remand Results, where it redetermined a weighted-average dumping margin of zero percent

for CCPC. Id. Defendant-Intervenor challenges Commerce’s Remand Results.
Court No. 11-00095                                                                             Page 6

                                        STANDARD OF REVIEW

          The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2006). 5 The Court sustains

determinations, findings or conclusions of an agency 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).

Substantial evidence is “more than a mere scintilla. It means such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v.

Nat’l Labor Relations Bd., 340 U.S. 474, 477 (1951) (internal quotation omitted). Courts “look

for a reasoned analysis or explanation for an agency’s decision as a way to determine whether a

particular decision is arbitrary, capricious, or an abuse of discretion.” Wheatland Tube Co. v.

United States, 161 F.3d 1365, 1369 (Fed. Cir. 1998).

                                              DISCUSSION

          I.      Remand Results

          On remand, Commerce redetermined CCPC’s weighted-average dumping margin at zero

percent. Remand Results at 2. Commerce “provided an explanation, pursuant to 19 C.F.R. §

351.414(f)(1)(ii), as to why the transaction-to-transaction method cannot account for the

differences in the U.S. sales prices” of CCPC and “reconsidered its position regarding the

application of the average-to-transaction method to CCPC’s sales because there is no meaningful

difference between applying the average-to-average method and the average-to-transaction

5
    All references to the United States Code refer to the 2006 edition, unless otherwise stated.
Court No. 11-00095                                                                          Page 7

method when the average-to-transaction method is applied to only those sales found to be

targeted pursuant to 19 C.F.R. § 351.414(f)(2).” Id. at 1-2 (footnote omitted).

       Upon analysis, Commerce found that “use of the transaction-to-transaction method is

inappropriate in this investigation.” Id. at 2. Commerce noted that “Congress intended that

[Commerce] would employ the transaction-to-transaction method in limited situations,”

specifically in the “unusual situations” where “there are a substantial number of sales,” the

product is “custom made,” or the prices are volatile. Id. at 4. Commerce concluded that none of

those circumstances were “present with respect to CCPC sales” and thus the use of transaction-

to-transaction method was not warranted. Id. at 4-5.

       Commerce further found that “it is neither impracticable to segregate CCPC’s targeted

sales nor that the targeting by CCPC was extensive,” thus not justifying departure from the

“normal” limitation of applying the average-to-transaction method to only CCPC’s targeted

sales. Id. at 6. Upon remand, Commerce employed the limitation found in the targeted dumping

regulation at 19 C.F.R. § 351.414(f)(2). Accordingly, “in accordance with the regulatory

language applicable to this investigation, [Commerce has] limited the application of the average-

to-transaction method to only CCPC’s targeted sales and recalculated CCPC’s weighted-average

dumping margin.” Id.

       CCPC agrees with Commerce, stating that the entirety of the Remand Results presents “a

reasoned basis for examining whether . . . a departure [from the normal limitation on application

of the average-to-transaction method] is appropriate in the case of CCPC” and properly analyzes

“CCPC’s reported sales data.” Comments of Pl. Chang Chun Petrochemical Co. Ltd. on Results

of Redetermination Pursuant to Court Remand (“Pl.’s Comments”) at 3-4 (ECF No. 50).
Court No. 11-00095                                                                               Page 8

       Defendant-Intervenor Sekisui partially challenges the Remand Results. Sekisui agrees

with Commerce’s explanation regarding the first remand basis, as to “why the transaction-to-

transaction comparison methodology cannot account for the differences in U.S. sales prices,” but

challenges Commerce’s analysis regarding the second remand basis, as to why the “specific

circumstances of this case are such that the normal limitation on application of the average-to-

transaction method is inappropriate.” Comments of Sekisui Specialty Chemicals America, LLC

Regarding Final Results of Redetermination Pursuant to Court Remand (“Def.-Int.’s

Comments”) at 3 (ECF No. 55). Sekisui asserts that Commerce erred in its targeted sales

analysis, neither properly defining nor quantifying the targeted sales, and urges the Court to issue

an order instructing Commerce “to revise its dumping margin calculation accordingly.” Id. at 4-

5.

       II.     Remand Instructions

       As previously stated, the Court remanded two issues to Commerce: (1) “to provide an

explanation . . . as to why the transaction-to-transaction method cannot account for the

differences in Plaintiff’s U.S. sales prices” and (2) “to provide a reasoned analysis or explanation

. . . as to why the specific circumstances of this case are such that the normal limitation on

application of the average-to-transaction method is inappropriate to employ.” Slip Op. 13-49 at

28.

               A.       Transaction-to-Transaction Comparison Method

       The targeted dumping regulation required Commerce to provide an explanation of why

the transaction-to-transaction method should not be applied. 19 C.F.R. § 351.414(f)(1)(ii). The

Court found that Commerce’s Final Determination was not in accordance with law because it
Court No. 11-00095                                                                           Page 9

lacked “an explanation regarding the insufficiency of using the transaction-to-transaction method

in this investigation.” Slip Op. 13-49 at 20-21. Accordingly, the Court remanded this issue to

Commerce to provide an explanation of why the transaction-to-transaction method could not be

used in this case. Id. at 28.

                B.      The Limiting Clause

        The targeted dumping regulation contained a clause that “normally” limited the

application of the average-to-transaction method to only targeted sales. 19 C.F.R. §

351.414(f)(2). The Court found that Commerce’s Final Determination was not in accordance

with law because it lacked a “reasoned analysis or explanation regarding why this investigation

does not constitute a normal situation” thereby requiring a departure from the norm. Slip Op. 13-

49 at 24. Accordingly, the Court remanded this issue to Commerce to provide a reasoned

analysis or explanation of why the normal limitation on the application of the average-to-

transaction should not be employed in this case. Id. at 28.

        III.    Analysis

                A.      Transaction-to-Transaction Comparison Method

        Consistent with Congressional intent, Commerce noted that the transaction-to-transaction

method “will be employed only in unusual situations.” Remand Results at 3 (internal quotation

omitted). Commerce cited the SAA for what constitutes an “unusual situation,” where “there are

very few sales and the merchandise sold in each market is identical or very similar or is custom

made.” Id. at 4 (quoting Uruguay Round Agreements Act, Statement of Administrative Action,

H.R. Doc. No. 103-316, vol. 1, at 842 (1994) reprinted in 1994 U.S.C.C.A.N. 4040, 4178

(“SAA”)). Commerce reasoned that neither of these unique circumstances is present in the
Court No. 11-00095                                                                             Page 10

instant case. Def.’s Resp. to Comments upon the Remand Determination (“Def.’s Resp.”) at 3.

“Nor were there unique facts about Chang Chun’s sales, such as price volatility” to give

Commerce reason to consider applying the less favored comparison method. Id. Thus,

Commerce determined that the “use of the transaction-to-transaction method is inappropriate.”

Remand Results at 5. No party challenges this redetermination. See generally Pl.’s Comments,

Def.-Int.’s Comments at 3.

       The Court holds that Commerce provided a sufficient explanation for its determination

not to employ the transaction-to-transaction method that is consistent with the record evidence

and in accordance with law. Therefore, Court sustains Commerce’s determination not to employ

the transaction-to-transaction method in this case.

               B.        The Limiting Clause

       Consistent with its targeted dumping policy in effect at the time of the investigation,

Commerce noted that the average-to-transaction method would only be applied “to all sales

when it was impracticable to segregate the targeted sales or when the targeting was extensive.”

Remand Results at 6. On remand, Commerce found “that it is neither impracticable to segregate

CCPC’s targeted sales nor that the targeting by CCPC was extensive.” Id.; see also Confidential

Calculation Memo at 3 (ECF No. 48-2). Neither the regulation nor the policy defines the words

extensive or widespread. While Sekisui offers its opinion on how Commerce should employ

these terms, interpretation of a regulation and pertinent policy is left to the expertise of

Commerce. The Court finds that Commerce’s decision that Plaintiff’s targeted dumping was

neither extensive nor widespread is not arbitrary or capricious, well within its discretion, and

entitled to deference.
Court No. 11-00095                                                                         Page 11

       Commerce looked at samples of sales to the alleged targeted types. Remand Results at 7-

8. The use of samples is statutorily authorized pursuant to 19 U.S.C. § 1677f-1. While no party

challenges the use of samples, Defendant-Intervenor Sekisui asserts that all sales should have

been considered targeted based on the samples. Def.-Int.’s Comments at 9, 13-14. Sekisui

challenges Commerce’s determination to apply the average-to-transaction method to only

CCPC’s targeted sales and argues that the average-to-transaction method should be applied to all

of CCPC’s U.S. sales. Id. Sekisui alleges that Commerce “abruptly and without notice changed

its initial position.” Id. at 3-4. Sekisui purports that Commerce came up with the wrong

conclusion because Commerce did not properly define or quantify the targeted sales. Id. at 5.

Further, Sekisui asserts that Commerce should have used a two part test to calculate targeted

dumping in this case. Def.-Int.’s Comments at 7-10. In April 2008, Commerce introduced a

new methodology for targeted dumping applying the above-referenced two part test. 6 Sekisui

requests as relief that the Court direct Commerce to use a methodology established in 2008 in

this 2004 case. This the Court will not do.

       Commerce considered and analyzed Sekisui’s claims in a draft remand sent to interested

parties on May 23, 2013. Remand Results at 2. Contrary to Sekisui’s contention that Commerce

“abruptly and without notice changed its initial position, now concluding that it should only

apply the average-to-transaction methodology in its margin calculation to ‘targeted’ sales,” Def.-

Int.’s Comments at 3-4, Commerce did precisely what the Court instructed: Commerce analyzed

6
 See Proposed Methodology for Identifying and Analyzing Targeted Dumping in Antidumping
Investigations; Request for Comment, 73 Fed. Reg. 26,371 (Dep’t of Commerce May 9, 2008);
Mid Continent Nail Corp. v. United States, 34 C.I.T. __, 712 F. Supp. 1370 (2010).
Court No. 11-00095                                                                        Page 12

and provided a reasoned explanation whether to limit the application of the average-to-

transaction method, Remand Results at 5-11. The Court agrees with Defendant that Sekisui’s

contentions lack merit. See Def.’s Resp. at 2.

       Commerce further reasoned that it could “discern no other distinguishing facts or features

of CCPC’s U.S. sales (targeted or otherwise) such that the normal limitation of applying the

average-to-transaction method to only CCPC’s targeted sales is inappropriate.” Remand Results

at 6 (internal quotation omitted). Commerce thus determined to limit “the application of the

average-to-transaction method to only CCPC’s targeted sales and recalculated CCPC’s weighted-

average dumping margin.” Id.

       After deciding to limit the application of the average-to-transaction method to only

Plaintiff’s targeted sales, Commerce realized that “there [is] no meaningful difference between

applying the average-to-average method and the average-to-transaction method.” Remand

Results at 1. Using the average-to-average method resulted in a zero percent margin while using

the average-to-transaction method resulted in a de minimis margin. Remand Results at 10. The

targeted dumping regulation unequivocally showed a preference for using the average-to-average

comparison method and allowed use of the other methods only if differences in export prices

could not be taken into account using the average-to-average method. 19 C.F.R. § 351.414(f).

Commerce explained that it “compared the margin calculated by applying the average-to-

transaction comparison only to targeted sales with the margin calculated using the average-to-

average method” and “found that the differences were not significant.” Def.’s Resp. at 10.

Thus, Commerce decided to use the average-to-average method in the Remand Results. Id. at 5.
Court No. 11-00095                                                                        Page 13

The Court finds Commerce’s decision to use the average-to-average method to calculate

Plaintiff’s dumping margin is not arbitrary or capricious and within the agency’s discretion.

       The Court holds that Commerce provided reasoned explanations for its determinations to

limit the application of the average-to-transaction method and to ultimately use the average-to-

average method. Those explanations are supported by the record and in accordance with law.

Therefore, the Court sustains Commerce’s redetermination in this case.

                                          CONCLUSION

       For the foregoing reasons, it is hereby

       ORDERED that Defendant’s Remand Results are sustained; and it is further

       ORDERED that Defendant-Intervenor’s motion for oral argument (ECF No. 62) is denied.

       Judgment to enter accordingly.

                                                               /s/ Gregory W. Carman
                                                              Gregory W. Carman, Judge

Dated: December 18, 2013
       New York, NY