Court Opinion

ID: 4312927
Source: CourtListenerOpinion
Date Created: 2018-09-17 16:01:37.394047+00
Date Added: 2024-06-11T14:44:42.240663
License: Public Domain

Consol. Court No. 13-00288                                                                   Page 2

Gum from the People’s Republic of China, 78 Fed. Reg. 33,351 (Dep’t Commerce June 4, 2013)

(final determ.) (“Final Determination”) and accompanying Issues & Decision Mem. (“I&D

Mem.”), amended by Xanthan Gum from the People’s Republic of China, 78 Fed. Reg. 43,143

(Dep’t Commerce July 19, 2013) (am. final determ.). The four prior opinions of this court

thoroughly set forth the facts underlying this appeal. CP Kelco US, Inc. v. United States, Slip

Op. 15-27, 2015 WL 1544714 (CIT Mar. 31, 2015) (“CP Kelco I”); CP Kelco US, Inc. v. United

States, Slip Op. 16-36, 2016 WL 1403657 (CIT Apr. 8, 2016) (“CP Kelco II”); CP Kelco US,

Inc. v. United States, 41 CIT __, 211 F. Supp. 3d 1338 (2017) (“CP Kelco III”); CP Kelco US,

Inc. v. United States, Slip Op. 18-36, 2018 WL 1703143 (CIT Apr. 5, 2018) (“CP Kelco IV”).

The court presumes familiarity with those opinions. For the reasons discussed below, the court

sustains Commerce’s Remand Results.

                                        BACKGROUND

       In its Final Determination, Commerce concluded that the Thai Ajinomoto financial

statements constituted a better source for calculating surrogate financial ratios than the Thai

Fermentation financial statements. I&D Mem. at cmt. 2. Commerce first disregarded the Thai

Fermentation statements on the basis that the record did not contain a full English translation,

without making a finding that the untranslated portions were crucial to Commerce’s calculations.

Id. Commerce then selected the only remaining statements, those of Thai Ajinomoto, despite the

fact that the Thai Ajinomoto statements “show evidence of the receipt of countervailable

subsidies.” Id. Defendant-Intervenors Neimenggu Fufeng Biotechnologies, Co., Ltd. and

Shandong Fufeng Fermentation Co., Ltd. (collectively, “Fufeng”) challenged this determination,

arguing that Commerce failed to properly justify its disregard of the Thai Fermentation

statements. Def.-Intervenor Rule 56.2 Mot. for J. on the Agency R. 13–22, ECF No. 28 (Mar. 7,
Consol. Court No. 13-00288                                                                     Page 3

2014). The court agreed, remanding for Commerce to provide a more robust explanation for its

choice of financial statements. CP Kelco I, 2015 WL 1544714, at *7.

       Commerce then submitted its Final Results of Redetermination Pursuant to Ct. Remand,

ECF No. 83 (July 28, 2015) (“First Remand Results”). Commerce again chose the Thai

Ajinomoto statements over the Thai Fermentation statements, justifying its selection by

explaining the issues presented by the incompleteness of financial statements generally. Id. at

10–12. However, the court again remanded the issue, finding that Commerce still gave short

shrift to the issues presented by the countervailable subsidies reflected in the Thai Ajinomoto

statements. CP Kelco II, 2016 WL 1403657, at *5.

       Commerce, as it did in its Final Determination and in its First Remand Results, again

found that the Thai Ajinomoto statements were the better surrogate financial ratio source. Final

Results of Redetermination Pursuant to Ct. Order 8, ECF No. 109 (Aug. 22, 2016) (“Second

Remand Results”). Commerce based its determination on what it described as a new practice of

“rejecting from use financial statements that are incomplete . . . unless there are no other

financial statements left on the record.” Id. at 7. The court again remanded, explaining that “the

practice Commerce advance[d] [was] not reasonable and that it result[ed] in an unsupported

determination.” CP Kelco III, 41 CIT at __, 211 F. Supp. 3d at 1340. The court gave Commerce

the option of doing a faithful comparison of the two statements or of making a “fact-sensitive

finding” that the untranslated information in the Thai Fermentation statements was “vital,” such

that Commerce could not discern the reliability of those statements. Id., 41 CIT at __, 211 F.

Supp. 3d at 1345.

       Commerce opted for the second alternative, explaining that “Thai Fermentation’s

financial statements are missing complete translations for two paragraphs of the property plant
Consol. Court No. 13-00288                                                                     Page 4

and equipment (i.e., fixed asset) footnote” which are central to calculating depreciation expense.

Final Results of Third Redetermination Pursuant to Ct. Order 7, ECF No. 157 (Sept. 18, 2017)

(“Third Remand Results”). Commerce further explained that:

        [I]n the instant proceeding, depreciation expense comprises . . . a majority of the
        overhead costs for Thai Fermentation. [And] by virtue of comprising all or most
        of a company’s overhead costs, depreciation expense is an integral component of
        the denominator of the selling, general and administrative (SG&A) expense and
        profit ratios. Thus, depreciation can significantly impact the surrogate financial
        ratios . . . .

Id. at 8 (footnotes omitted). Commerce further provided that “the narrative portions of a

company’s footnotes can provide vital information regarding asset impairments, changes in

useful lives of fixed assets, revaluations of fixed assets and the capitalization of production costs,

among other things that are not shown on the numeric fixed asset schedule.” Id. at 10.

        The court remanded once more, stating that, “[u]nlike the prior proceedings cited by

Commerce, here the Department has not identified a particular depreciation methodology, class

of fixed assets, or statement by the auditor in the Thai Fermentation statements that is

questionable or unreliable.” CP Kelco IV, 2018 WL 1703143, at *3. The court found that

“Commerce’s general discussion about depreciation does not comply with the court’s instruction

to make ‘a fact-sensitive finding that the Thai Fermentation statements are missing “vital”

information.’” Id. (citing CP Kelco III, 41 CIT at __, 211 F. Supp. 3d at 1345). Therefore, the

court ordered that Commerce may “either translate the two paragraphs or leave them as is” but

must, in any event, “use the Thai Fermentation statements to calculate surrogate financial ratios.”

Id. at 4.
Consol. Court No. 13-00288                                                                  Page 5

                      JURISDICTION AND STANDARD OF REVIEW

       The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court must sustain

Commerce’s remand redetermination if it is supported by substantial record evidence, is

otherwise in accordance with law, and is consistent with the court’s remand order. See Ad Hoc

Shrimp Trade Action Comm. v. United States, 38 CIT __, __, 992 F. Supp. 2d 1285, 1290 (2014);

see also 19 U.S.C. § 1516a(b)(1)(B)(i).

                                          DISCUSSION

       In its latest remand results, “Commerce has relied upon the Thai Fermentation financial

statements to recalculate Fufeng’s weighted-average dumping margins for these final remand

results.” Final Results of Fourth Redetermination Pursuant to Ct. Order 9, ECF No. 169 (July 5,

2018) (“Remand Results”). As Commerce explains, “the weighted-average dumping margin for

Fufeng changes from 8.69 percent to 0.00 percent.” Id. at 12. For reasons discussed at length in

the court’s four opinions in this action, the court finds that the Remand Results are supported by

substantial evidence and, in all respects, are in accordance with the law. The Remand Results

also comply with the terms of CP Kelco IV.1

1
  CP Kelco now urges the court to “remand the case to Commerce with instructions clarifying that
Commerce has the discretion to calculate Fufeng’s weighted-average dumping margin using the
simple average methodology so long as Commerce includes financial ratios derived from the Thai
Fermentation financial statements in its calculation.” CP Kelco’s Comments on Final Results of
Fourth Remand Redetermination 2, ECF No. 173 (Aug. 6, 2018). This suggestion arises out of its
view “that a simple average of both the Thai Ajinomoto and Thai Fermentation financial
statements would yield a more accurate rate.” Id. at 4–5. However, this court’s standard of review
demands that it consider only the soundness of the decision before it. Because the court finds that
Commerce’s determination here is supported by substantial evidence and in accordance with law,
it does not reach either whether CP Kelco’s preferred methodology is more reasonable or if that
argument was waived, as per Fufeng’s suggestion, Fufeng’s Comments on Commerce’s Fourth
Remand 5–6, ECF No. 172 (Aug. 6, 2018).
Consol. Court No. 13-00288                                                       Page 6

                                   CONCLUSION

       For the foregoing reasons, Commerce’s Remand Results are SUSTAINED. Judgment

will enter accordingly.

                                                                /s/ Richard W. Goldberg
                                                                    Richard W. Goldberg
                                                                            Senior Judge

Dated: 4FQUFNCFS

New York, New York