Court Opinion

ID: 2765182
Source: CourtListenerOpinion
Date Created: 2014-12-30 15:01:11.340706+00
Date Added: 2024-06-11T10:45:16.725245
License: Public Domain

Slip Op. 14-159
                   UNITED STATES COURT OF INTERNATIONAL TRADE

SINCE HARDWARE (GUANGZHOU)
CO., LTD.,

                            Plaintiff,
                                                      Before: Leo M. Gordon, Judge
              v.
                                                      Consol. Court No. 11-00106
UNITED STATES,

                            Defendant.

                                  OPINION and ORDER

[Motion for reconsideration denied; order on second remand results vacated in part;
third remand results sustained.]

                                                               Dated: December 30, 2014

         William E. Perry and Emily Lawson, Dorsey & Whitney LLP of Seattle, Washington for
Plaintiff Since Hardware (Guangzhou) Co., Ltd.

      Gregory S. Menegaz, J. Kevin Horgan, and John J. Kenkel, DeKieffer & Horgan of
Washington, DC for Plaintiff-Intervenor Foshan Shunde.

       Michael D. Snyder, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice for Defendant United States. With him on the brief were Stuart F.
Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy,
Assistant Director. Of counsel on the brief were Nathanial J. Halvorson and Aman Kakar,
Office of the Chief Counsel for Import Administration, U. S. Department of Commerce of
Washington, DC.

      Frederick L. Ikenson, Larry Hampel, and Kierstan L. Carlson, Blank Rome LLP of
Washington, DC for Defendant-Intervenor Home Products International, Inc.

       Gordon, Judge: This consolidated action involves the U.S. Department of

Commerce’s (“Commerce”) fifth administrative review of the antidumping duty order

covering Floor-Standing, Metal-Top Ironing Tables from China. See Floor-Standing,

Metal-Top Ironing Tables and Certain Parts Thereof from the People’s Republic of
Consol. Court No. 11-00106                                                           Page 2

China, 76 Fed. Reg. 15,297 (Dep’t of Commerce Mar. 21, 2011) (final results admin.

review), as amended by 76 Fed. Reg. 23,543 (Dep’t of Commerce Apr. 27, 2011)

(amended final results admin. review); see also Issues and Decision Memorandum for

Ironing   Tables    from    China,    A-570-888      (Mar.   22,    2011),    available   at

http://ia.ita.doc.gov/frn/summary/PRC/2011-6558-1.pdf (last visited this date) (“Decision

Memorandum”). Before the court are the Final Results of Redetermination (July 8,

2014), ECF No. 162 (“Third Remand Results”) filed by Commerce pursuant to Since

Hardware (Guangzhou) Co. v. United States, 38 CIT ___, 977 F. Supp. 2d 1347 (2014)

(“Since Hardware III”); see also Final Results of Redetermination (Aug. 14, 2013),

ECF No. 113 (“Second Remand Results”); Since Hardware (Guangzhou) Co. v. United

States, 37 CIT ___, 911 F. Supp. 2d 1362 (2013) (“Since Hardware II”); Final Results of

Redetermination (Dec. 17, 2012), ECF No. 85 (“First Remand Results”); Since

Hardware (Guangzhou) Co. v. United States, Consol. Court No. 11-106, ECF No. 81

(CIT Aug. 14, 2012) (“Since Hardware I”) (order remanding to Commerce). The court

has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as

amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),1 and 28 U.S.C. § 1581(c) (2012).

Familiarity with the prior judicial and administrative decisions in this action is presumed.

       Before the court are Foshan Shunde, and Since Hardware, and Home Products’

comments on the Third Remand Results. Pl. Foshan Shunde’s Comments on the U.S.

1
  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.
Consol. Court No. 11-00106                                                        Page 3

Dep’t of Commerce’s Third Remand Redetermination (July 24, 2014), ECF No. 168

(“Foshan Comments”); Since Hardware (Guangzhou) Co. Objection to the Dep’t of

Commerce’s Third Remand Results (July 24, 2014), ECF No. 170; Comments of Home

Prods. Int’l, Inc. on the Final Results of Redetermination by the U.S. Dep’t of Commerce

(July 24, 2014), ECF No. 169 (“Home Products Comments”); see also Def.’s Resp. to

Comments to the Remand Redetermination (Aug. 21, 2014), ECF No. 179.

      Home Products has also moved for reconsideration of Since Hardware III. Mot.

of Home Prods. Int’l, Inc. for Reh’g of Slip Op. 14-44, Insofar as it Relates to the Issue

of Brokerage and Handling (May 15, 2014), ECF No. 153 (“Home Products Mot. for

Reh’g”); see also Pls. Foshan Shunde and Since Hardware Joint Opp’n to Def.-

Intervenor Home Prods. Int’l’s Mot. for Recons. (June 23, 2014), ECF No. 158 (“Joint

Reh’g Resp.”); Def.’s Resp. to Def.-Intervenor’s Mot. for Recons. (June 23, 2014), ECF

No. 159; Reply of Home Prods. Int’l, Inc. to the Resps. to its Mot. for Reh’g (July 14,

2014), ECF No. 166.

      For the reasons that follow, the court denies Home Products’ motion to

reconsider, and sustains the Third Remand Results.

                                 I. Standard of Review

      For administrative reviews of antidumping duty orders, 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
Consol. Court No. 11-00106                                                     Page 4

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 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 the evidence,

and the possibility of drawing two inconsistent conclusions from the evidence does not

prevent an administrative agency's finding 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

reasonableness review.     3 Charles H. Koch, Jr., Administrative Law and Practice

§ 9.24[1] (3d ed. 2014).   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.” Edward D. Re,

Bernard J. Babb, and Susan M. Koplin, 8 West's Fed. Forms, National Courts § 13342

(2d ed. 2014).

      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 antidumping statute. See United States v. Eurodif

S.A., 555 U.S. 305, 316 (2009) (Commerce's “interpretation governs in the absence of

unambiguous statutory language to the contrary or unreasonable resolution of language

that is ambiguous.”).
Consol. Court No. 11-00106                                                     Page 5

                                   II. Discussion

       In its comments on the Third Remand Results, Foshan Shunde challenges

Commerce’s failure to adjust its brokerage and handling (“B&H”) valuation for document

preparation and customs clearance costs as unreasonable and Commerce’s zeroing

methodology in the non-market economy context as inconsistent with law.       Foshan

Comments at 7-19. In its comments on the Third Remand Results, Since Hardware

also challenges Commerce’s surrogate valuation for B&H as unreasonable, though the

court in its first decision in this action deemed the issue waived due to the

incompleteness of Since Hardware’s opening brief. Since Hardware I at 7. One portion

of Commerce’s remand results has been submitted under protest: Commerce’s use of

the $473.94 baseline for B&H that the court directed Commerce to use as the best

available information. See Since Hardware III, 38 CIT at ___, 977 F. Supp. 2d at 1358-

59, 1364. Commerce avers that its original choice of $645 remains reasonable on the

administrative record.   Third Remand Results at 6-9.    Home Products agrees and

argues that the court should remand to Commerce to calculate Foshan Shunde’s

surrogate B&H value using the $645 data point. Home Products Comments at 2. For

the reasons that follow, the court sustains the Third Remand Results with the $473.94

baseline calculation as the “best available information.”   The court also sustains

Commerce’s other B&H determinations, vacates that portion of Since Hardware II

addressing the container size conversion factor, and sustains Commerce’s justification

for zeroing.
Consol. Court No. 11-00106                                                       Page 6

                                A. B&H Baseline Cost

      In Since Hardware III the court reviewed Foshan Shunde’s challenge to

Commerce’s calculation of its B&H costs. Commerce originally chose $645 as the best

available information to value respondents’ B&H costs, a number derived from the

World Bank’s Doing Business in India: 2010 publication. Commerce and the parties

appear to have believed that number was an average derived from costs in 17 cities

across India, which for Commerce represented a “broad market average.”              First

Remand Results at 18; see Decision Memorandum at 19 (describing the World Bank

data point as, inter alia, a “broad market average” that is “a more credible and

representative source than the data provided by Foshan Shunde that are limited to

select Indian companies and ports”).      Commerce and the parties, however, were

incorrect about the $645 data point. That number was not a “broad market average” of

multiple port city data points, but instead, a Mumbai-only data point.      This was a

somewhat surprising fundamental error with the administrative record because

Commerce and the parties had been litigating the B&H issue since at least 2010 over

the course of three administrative and three judicial proceedings. The complexity of

surrogate valuations and margin calculations normally means that Commerce and the

interested parties have a better command of the administrative record than the court.

      Here, however, to help with closure on the B&H issue, the court in Since

Hardware III provided a thorough explanation of the various B&H data as the record

grew during successive remand proceedings. Since Hardware III, 38 CIT at ___, 977 F.
Consol. Court No. 11-00106                                                         Page 7

Supp. 2d at 1354-55.       As the court explained, only during the second remand

proceedings when individual data points for all 17 Indian cities were on the record did

Commerce and the parties appear to understand that the World Bank’s $645 figure was

in fact a Mumbai-only data point as opposed to a 17-city average. Id. The court also

observed that the $645 Mumbai-only data point, the second highest value for any

individual city on the record, was significantly higher than the $473.94 average for all 17

cities on the record. See id. at ___, 977 F. Supp. 2d at 1354-59.

       Recall that when Commerce selected the $645 data point, it did so in the belief

that the $645 data point was “publicly available, specific to the costs in question,

represents a broad market average, and [was] contemporaneous to the POR.” Decision

Memorandum at 19; see First Remand Results at 17-18; see 19 U.S.C. § 1677b(c)(1).

Applying those very same selection criteria to the properly interpreted surrogate B&H

data, the court in Since Hardware III concluded that a reasonable mind would only

choose the $473.94 17-city average as the “best available” baseline B&H surrogate

value. The court reasoned that the only difference between the Mumbai-only data point

and the 17-city average under Commerce’s own selection criteria was that the 17-city

average represented a broader “market average” for B&H, and directed Commerce to

use that figure. Since Hardware III, 38 CIT at ___, 977 F. Supp. 2d at 1358-59, 1364.

       On remand, Commerce used that data point, but has done so under protest.

Commerce now explains that it has concerns about the reliability of the data from the

other Indian cities and that the Mumbai-only data point is the best available information.

Commerce’s reasons include the frequency at which the Mumbai-only data point is
Consol. Court No. 11-00106                                                       Page 8

updated in comparison to the 16 other data points, the high level of population and

container traffic in Mumbai as compared to the remaining 16 cities, and Foshan

Shunde’s location in a large urban area in China that is more comparable to Mumbai

than the 16 other Indian cities. Third Remand Results at 6-7.

      Standing alone, without any consideration of the prior substantive and procedural

posture of this action, Commerce’s explanation and choice of the $645 baseline might

pass as reasonable. The Third Remand Results, however, do not stand alone, but

represent the fourth opportunity for Commerce to reasonably explain Foshan Shunde’s

surrogate B&H calculation. The $645 data point has always been a surrogate value

selection in search of a reasoned basis.         The prior administrative and judicial

proceedings necessarily inform Commerce’s decision-making, and in the Third Remand

Results Commerce has arbitrarily altered the application of its surrogate value selection

criteria. Had Commerce been concerned about the reliability of the World Bank’s data

for the 16 smaller cities or the importance of selecting B&H data from an individually

comparable city, it could have articulated those concerns in any of the three prior

administrative determinations.2 Instead, what Commerce continually emphasized was

the importance of selecting “surrogate values which are . . . representative of a broad

market average.” First Remand Results at 17-18 (citing Certain Polyester Staple Fiber

from the People’s Republic of China, 75 Fed. Reg. 1336 (Dep’t of Commerce Jan. 11,

2
  Foshan Shunde first placed the subnational reports for four seaport cities on the
record on October 18, 2010, well before Commerce issued its Final Determination.
Third Remand Results at 7 n.29. Commerce and Foshan Shunde placed the remaining
subnational report data on the record during the second remand proceedings.
Consol. Court No. 11-00106                                                          Page 9

2010) (final results admin. review)).       In those prior administrative proceedings,

Commerce did not distinguish the Mumbai-only data point from the 16 other ports, and

“reliability” was not mentioned or analyzed as a significant concern. Compare Third

Remand Results at 6-9, 21-22 (explaining preference for the Mumbai-only data point

due to concerns over the reliability of the subnational data for the 16 other Indian cities

and the level of port traffic in Mumbai as compared to Foshan Shunde’s home city with

reference to new evidence added to the record), with Decision Memorandum at 18-19

(no similar discussion), First Remand Results at 15-22, 38-41 (no similar discussion),

and Second Remand Results at 12-14, 31-35 (explaining preference for the Mumbai-

only data point but omitting any reference to the relative reliability of the data points or

the importance of selecting data from a particular city that is more comparable to

Foshan Shunde’s home city).

       In the Third Remand Results, therefore, Commerce altered its selection criteria

by suddenly shifting its emphasis away from identifying a “broad market average” to a

focus on reliability and single-city comparability. Commerce apparently derived this new

thinking from Home Products’ motion to reconsider, which was filed with the court one

month before Commerce circulated its draft remand results.          Turning briefly to the

merits of Home Products’ motion, disposition of a Rule 59 motion is “within the sound

discretion of the court.” USEC, Inc. v. United States, 25 CIT 229, 230, 138 F. Supp. 2d
1335, 1336 (2001). Such motions do not permit an unsuccessful party to re-litigate a

case, but are supposed “to address a fundamental or significant flaw in the original

proceeding.” Id. To that end, “a court's previous decision will not be disturbed unless it
Consol. Court No. 11-00106                                                      Page 10

is ‘manifestly erroneous.’” Id. at 230, 138 F. Supp. 2d at 1337. Home Products’ motion

does not identify manifest error in Since Hardware III, but instead, as Foshan Shunde

points out, raises arguments that Home Products could have made earlier in the

litigation either before the court or Commerce. See Joint Reh’g Resp. at 3-16. The

court does not entertain afterthought arguments in a motion for reconsideration. See

Donguan Sunrise v. United States, 38 CIT ___, ___, Slip. Op. 14-117 at 4 (2014)

(“Because AFMC had ample opportunity to raise its concerns about the general context

of Commerce’s choice previously but failed to do so, the court will not entertain them

now.”); see also United States v. Matthews, 32 CIT 1087, 1089, 580 F. Supp. 2d 1347,

1349 (2008) (arguments raised for first time on rehearing not properly before the court

when prior opportunity existed for moving party to make its position known).

      Apart from creating a tactical annoyance for Foshan Shunde (which had to

simultaneously answer the motion and file comments on the remand), the real

motivation behind the motion may have been, as Foshan Shunde alleges, Joint Reh’g

Resp. at 2-3, to communicate to Commerce a dispositional path for the Third Remand

Results. In addition to the timing between Home Products’ motion and Commerce’s

draft remand results described above (with the motion filed one month before issuance

of the draft remand results), Foshan Shunde identifies a substantive similarity between

the two. Id.; Foshan Comments at 4-5. Compare, e.g., Home Products Mot. for Reh’g

at 8-9 (discussing the frequency of publication of the subnational reports, citing to the

World Bank’s website), and id. at 12-14 (discussing Mumbai’s population and port

volume as compared to other Indian cities and citing to Wikipedia entries), with Third
Consol. Court No. 11-00106                                                      Page 11

Remand Results at 7-8 & n.30 (discussing the frequency of publication of the

subnational reports, citing to printouts of pages from the World Bank’s website that no

party had submitted as evidence or cited to at any earlier proceeding), and id. at 8-9

(discussing Mumbai’s population and port volume as compared to other Indian cities

and citing to printouts of pages from Indian internet sources that no party had submitted

as evidence or cited to at any earlier proceeding).

      There is nothing inherently wrong or improper with Commerce adopting the

arguments of a party in its findings, conclusions, and determinations.     The problem

here, as noted above, is that Commerce’s choice of the $645 B&H baseline measure

has, from the outset of the litigation, been in search of a reasoned basis. By co-opting

Home Products’ belated justification for the $645 measure, Commerce arbitrarily shifts

the application of its selection criteria away from a desire to obtain a “broad market

average” toward a sudden emphasis on “reliability” and single-city comparability. Had

Commerce consistently applied that focus earlier in the proceeding, it may have

provided a reasonable justification for the $645 measure. Coming as it does, however,

so late in the game, Commerce’s change in emphasis reads like an arbitrary effort to

reach a desired outcome rather than a reasonable attempt to identify the best available

information to value Foshan Shunde’s B&H costs. The court will therefore sustain the

Third Remand Results in which Commerce used the court-directed $473.94 baseline

measure for Foshan Shunde’s B&H costs.
Consol. Court No. 11-00106                                                     Page 12

        B. Document Preparation and Customs Clearance Cost Component

      Foshan Shunde has consistently argued that Commerce should alter its B&H

calculation to reflect evidence suggesting that Foshan Shunde may have incurred

document preparation and customs clearance fees only once every 6.2 containers it

shipped.   In the Second Remand Results, Commerce declined to address this

argument, indicating that it was “not part of the Foshan Shunde surrogate value

information identified by the court in Since Hardware II . . . at issue in this

redetermination.” Second Remand Results at 31-32. The court in Since Hardware III

disagreed, and remanded to Commerce with instructions to “address Foshan Shunde’s

arguments regarding document preparation and customs clearance costs,” and “in

particular record evidence appearing to demonstrate that Foshan Shunde actually

incurred such costs only once per 6.2 containers it shipped.” Since Hardware III, 38 CIT

at ___, 977 F. Supp. 2d at 1361. Commerce in the Third Remand Results considered

and rejected Foshan Shunde’s argument, explaining that the World Bank data is not

specific enough to adjust bill of lading costs in the way Foshan Shunde requests, and

that Foshan Shunde’s bill of lading evidence is drawn from too small and unreliable a

data set to conclude that Foshan Shunde actually incurred bill of lading costs once per

6.2 containers.

      Foshan Shunde now argues that “[t]he World Bank materials on the record of this

case preclude any consideration of reported costs accounting for multiple shipments or

multiple containers with one shipment” due to the “rigidity with which the World Bank

has set its parameters.” Foshan Comments at 7-8. Foshan Shunde explains that the
Consol. Court No. 11-00106                                                          Page 13

World Bank surveyed producers seeking “one quote for a one-time shipment of one

container.” Id. at 8 (quoting Foshan Shunde Surrogate Values for the Final Results Ex.

8 at 91-92 (Dep’t of Commerce Oct. 18, 2010)). According to Foshan Shunde, this

parameter “renders the World Bank study inappropriate for calculating Foshan Shunde’s

[B&H] expenses without important adjustments, including accounting for the fact that

Foshan Shunde shipped multiple containers included on one bill of lading with one set

of export documentation considered together for a single customs clearance.” Id. at 8-

9. In response to Commerce’s finding that the bill of lading evidence may not accurately

reflect Foshan Shunde’s experience, Foshan Shunde maintains that Commerce’s

selection is unreasonable because the record demonstrates at minimum that Foshan

Shunde did ship multiple containers per bill of lading. Id. at 9-10.

       The court understands Foshan Shunde’s logical assumption that a “one quote for

a one-time shipment of one container” could imply that the World Bank’s survey

accounts for the full cost of issuing exactly one bill of lading for exactly one container of

goods. Commerce, however, reasonably concluded that the record here supports a

different finding. As Commerce explains, the World Bank study “seeks to prescribe the

total time and cost of exporting without specifying the specific number of bills of lading

that are issued with each shipment,” and does not itemize bill of lading costs

independently from the broader document preparation and customs clearance metric.

Third Remand Results at 12-14. The record, in other words, does not foreclose the

possibility that the World Bank’s document preparation and customs clearance figure

may instead incorporate the average bill of lading cost for shipping one container, as
Consol. Court No. 11-00106                                                        Page 14

opposed to the cost of exactly one bill of lading per container. Moreover, as Commerce

explains, Foshan Shunde derived its “6.2” figure from an “examination of nine U.S.

sales traces examined at verification, which themselves were culled from a U.S.

database that is approximately 70 times larger than the sample base used by Foshan

Shunde.” Id. at 14 (emphasis added). With such concerns over the accuracy of Foshan

Shunde’s proposed figure and its relevance to the World Bank’s data, Commerce

reasonably found that using the unadjusted World Bank document preparation and

customs clearance cost component was the “best available” means of estimating that

portion of Foshan Shunde’s overall B&H costs.

                                       C. Zeroing

       In accordance with a prior order lifting a stay on consideration of the zeroing

issue, the court in Since Hardware III remanded for Commerce to address Foshan

Shunde’s arguments about zeroing in the non-market economy context.                  Since

Hardware III, 38 CIT at ___, 977 F. Supp. 2d at 1364. In the Third Remand Results,

Commerce continued to apply zeroing and justified its approach largely by reference to

Union Steel v. United States, 713 F.3d 1101 (Fed. Cir. 2013), a Court of Appeals for the

Federal Circuit (“Federal Circuit”) decision affirming Commerce’s justification for zeroing

in administrative reviews but not in investigations as a reasonable interpretation of an

ambiguous statute under Chevron step two. Third Remand Results at 26-30 (citing

Union Steel 713 F.3d at 1108).

       Foshan Shunde argues that Union Steel does not apply to administrative reviews

of non-market economies, and that Commerce’s justification for zeroing in such reviews
Consol. Court No. 11-00106                                                      Page 15

is unreasonable.   Foshan Shunde explains that the Federal Circuit in Union Steel

upheld Commerce’s practice of zeroing in market economies as reasonable because of

the “greater specificity” zeroing provided when conducting an average-to-transaction

(“A-to-T”) comparison in administrative reviews than the average-to-average (“A-to-A”)

comparison employed in investigations.      Specifically, according to Foshan Shunde,

Union Steel determined that Commerce’s practice of zeroing in administrative reviews

but not investigations “was only justified by the greater accuracy resulting from the use

of monthly normal values (calculated from actual invoiced sales prices).”        Foshan

Shunde Comments at 18 (emphasis added); see Union Steel, 713 F.3d at 1108 (citing

Union Steel v. United States, 36 CIT ___, ___, 823 F. Supp. 2d 1346, 1359 (2012)).

Because Commerce uses a yearly average normal value instead of monthly average

normal values in non-market economy administrative reviews, Foshan Shunde argues

that Union Steel does not apply.     Id.   Foshan Shunde requests the court to hold

Commerce’s justification for zeroing here to be unreasonable because it, among other

things, “tends to artificially drive some sales below fair value and others above fair

value” and “unfairly disadvantages NME [non-market economy] respondents.” Id. at 19.

      The main focus of Foshan Shunde’s argument is on the normal value side of the

antidumping duty margin equation. Foshan Shunde does not examine or consider the

export or constructed export price side of the equation. Problematically for Foshan

Shunde, Union Steel did not uphold zeroing as reasonable “only” because of the greater

specificity Commerce attains by using monthly average normal values in market

economy reviews.     See Foshan Shunde Comments at 18.            Instead, Union Steel
Consol. Court No. 11-00106                                                        Page 16

consistently emphasized that zeroing in combination with the A-to-T methodology can

increase accuracy and reveal masked dumping because Commerce compares normal

value to transaction-specific export prices as opposed to average export prices under

the A-to-A methodology used in investigations. As the Federal Circuit explained:

      When using average-to-average comparisons, transactions are divided
      into “averaging groups.” Remand Results at 11. Transactions are divided
      into averaging groups on the basis of physical characteristics and level of
      trade for the purpose of price comparison. Id. When calculating the
      average export price or constructed export price, Commerce calculates a
      comparison result for each averaging group, and averages together high
      and low export prices within the group. Thus, those export prices above
      normal value offset those below normal value within the averaging group.
      Commerce then aggregates the results of the comparison for each
      averaging group to calculate a weighted average dumping margin. Id. at
      11–12. Accordingly, this comparison methodology masks individual
      transaction prices below normal value with other above normal value
      prices within the same averaging group.

      In contrast, when Commerce uses the average-to-transaction comparison
      method, as it did in this administrative review, Commerce compares the
      export price (or constructed export price) for a particular export transaction
      with an average normal value for the comparable sales of foreign like
      products within the averaging group. Id. at 12. For specific export
      transactions, Commerce calculates a comparison result which establishes
      the amount that transaction is priced at less than its normal value. Id.
      Using this methodology, Commerce does not average export transaction
      prices before comparing the export price (or constructed export price) to
      normal value. Instead, Commerce uses a single export transaction price
      and aggregates the transaction-specific comparison result. The average-
      to-transaction comparison methodology thus reveals individual dumping.

      Commerce's decision to use or not use the zeroing methodology
      reasonably reflects unique goals in differing comparison methodologies.
      In average-to-average comparisons, as used in investigations, Commerce
      examines average export prices; zeroing is not necessary because high
      prices offset low prices within each averaging group. When examining
      individual export transactions, using the average-to-transaction
      comparison methodology, prices are not averaged and zeroing reveals
      masked dumping. This ensures the amount of antidumping duties
Consol. Court No. 11-00106                                                      Page 17

       assessed better reflect the results of each average-to-transaction
       comparison. Commerce's differing interpretation is reasonable because
       the comparison methodologies compute dumping margins in different
       ways and are used for different reasons.

Id. at 1108-09. The Federal Circuit agreed that using “the export price (or constructed

export price) for a particular export transaction” under the A-to-T methodology

reasonably justified zeroing because it enabled Commerce to “reveal[] individual

dumping.” Id. In its comments on the Third Remand Results, Foshan Shunde does not

address the export price side of the equation, perhaps in recognition that Commerce’s

use of transaction-specific export prices in both non-market and market economy

administrative reviews weakens Foshan Shunde’s argument.          See Foshan Shunde

Comments at 12-19. For example, Foshan Shunde makes no effort to explain why

using individual export transaction prices with zeroing does not “reveal individual

dumping” in non-market economy reviews like it does in market economy reviews, or

why it believes the accuracy of monthly average normal values is more important to

revealing individual dumping than using individual export prices. See id. By leaving off

one side of the ledger, Foshan Shunde has not provided the court with a sufficient basis

to distinguish Union Steel.

       Consistent with Union Steel, Commerce explained below that “the examination of

individual export transactions, as opposed to averaging the export transactions, allows

[Commerce] to further its recognized interest in greater specificity to determine pricing

behavior for individual transactions and to identify masked dumping in administrative

reviews,” even when comparing that export price to a single average normal value.
Consol. Court No. 11-00106                                                     Page 18

Third Remand Results at 29 (emphasis added). As the Federal Circuit explained, “[n]o

rule of law precludes Commerce from interpreting 19 U.S.C. § 1677(35) differently in

different circumstances as long as it provides an adequate explanation.” Id. at 1110.

Here, Commerce’s explanation is consistent with that sustained as reasonable in Union

Steel and other market and non-market economy cases. See, e.g., id. at 1108-11;

Dongguan Sunrise Furniture Co. v. United States, 37 CIT ___, ___, 904 F. Supp. 2d
1359, 1367 (2013); Xiamen Int’l Trade & Indus. Co. v. United States, 37 CIT ___, ___,

953 F. Supp. 2d 1307, 1310 n.1 (2013); Grobest, 36 CIT at ___, 853 F. Supp. 2d at

1356-62. That explanation rests on fundamental differences between A-to-A and A-to-T

comparison methodologies and the purposes of conducting reviews as opposed to

investigations that are applicable in non-market economy contexts as well as market

economy contexts. See 19 U.S.C. §§ 1677(35), 1677f-1(d); 19 C.F.R. § 351.414. The

court therefore must sustain Commerce’s use of zeroing in this administrative review.

                     D. Container Size Cost Conversion Factor

      Foshan Shunde has now voluntarily abandoned its claim that the 20-foot to 40-

foot container cost conversion factor should be lower than a 50% increase. Joint Reh’g

Resp. at 9. The court accordingly will vacate the portion of Since Hardware III that

deals with this issue, and sustain Commerce’s selection of a 50% increase in the Third

Remand Results. See Since Hardware III, 38 CIT at ___, 977 F. Supp. 2d at 1359-60.

                              E. Since Hardware’s B&H

      In its first decision in this action the court deemed Since Hardware’s B&H issue

waived because of incompleteness, Since Hardware (Guangzhou) Co. v. United States,
Consol. Court No. 11-00106                                                     Page 19

No. 11-00106 (Aug. 14, 2012), ECF. No. 81 (order), just as it did in the immediate prior

action. Home Prods. Int'l, Inc. v. United States, No. 11–00104 (Jan. 3, 2012), ECF No.

62 (order deeming challenge to B & H calculation waived), as amended, ECF No.

63; Home Prods. Int'l, Inc. v. United States, 36 CIT ___, ___, 837 F. Supp. 2d 1294,

1300-02 (2012); opinion after remand, Home Prods. Int'l, Inc. v. United States, 36 CIT

___, 853 F. Supp. 2d 1257 (2012).

      Missing from Since Hardware’s brief was any effort at identifying standards

against which the court could evaluate the reasonableness of Commerce’s findings and

conclusions for Since Hardware’s surrogate B&H calculation (e.g., how Commerce

typically calculates B&H in the non-market economy context, etc.). Since Hardware’s R.

56.2 Mem. in Supp. of Mot. for J. upon Agency Rec. at 9-10, ECF. No. 42. In marked

contrast to Since Hardware’s approach is the well-developed argumentation of Foshan

Shunde. See Foshan Shunde’s R. 56.2 Mem. in Supp. of Mot. for J. upon Agency Rec.

at 16-33, ECF No. 44.

      It is just not possible to read the B&H section of Since Hardware’s opening brief

and understand what is being argued, challenged or contested. Since Hardware cites

no statutes, regulations, or administrative or judicial precedents. The court could not

understand this section of Since Hardware’s brief. The court could not rightly review

Since Hardware’s B&H issue without assuming the role of co-plaintiff and framing the

issue against the operative standard of review. This is not the role of the court. See

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
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may be deemed waived.”); MTZ Polyfilms, Ltd. v. United States, 33 CIT 1575, 1578,

659 F. Supp. 2d 1303, 1308 (2009) (“‘[I]ssues adverted to in a perfunctory manner,

unaccompanied by some effort at developed argumentation, are deemed waived. It is

not enough merely to mention a possible argument in the most skeletal way, leaving the

court to do counsel's work, create the ossature for the argument, and put flesh on its

bones.’” (quoting United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)).

       Since Hardware suggests that it nevertheless is entitled to the same adjustments

to B&H that Foshan Shunde received. Since Hardware though does not understand the

posture of the litigation. When the court deemed the issue waived for Since Hardware,

it sustained Commerce’s B&H determination for Since Hardware. There is, therefore, a

real consequence for Since Hardware inadequately briefing the issue.

                                       III. Conclusion

       In accordance with the foregoing, it is hereby

       ORDERED that the portion of the court’s decision in Since Hardware III dealing

with the reasonableness of Commerce’s use of a 50% increase to convert prices for 20-

foot containers into prices for 40-foot containers, Since Hardware III, 38 CIT at ___, 977

F. Supp. 2d at 1359-60, is vacated; it is further

       ORDERED that the portion of the Second Remand Results pertaining to

Commerce’s application of a 50% increase for converting 20-foot container costs to 40-

foot container costs is sustained; it is further

       ORDERED that HPI’s motion for reconsideration of Since Hardware III is denied;

and it is further
Consol. Court No. 11-00106                                                Page 21

         ORDERED that Commerce’s Third Remand Results are sustained.

         Judgment will issue separately.

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

Dated:      December 30, 2014
            New York, New York