Court Opinion

ID: 2803555
Source: CourtListenerOpinion
Date Created: 2015-05-27 15:04:37.345685+00
Date Added: 2024-06-11T11:50:33.629771
License: Public Domain

Slip Op. 15-50

           UNITED STATES COURT OF INTERNATIONAL TRADE

________________________________
ZHAOQING NEW ZHONGYA ALUMINUM    :
CO., LTD.,                       :
                                 :
           Plaintiff,            :   Before: Nicholas Tsoucalas,
                                 :           Senior Judge
     v.                          :
                                 :   Court No.: 14-00043
UNITED STATES,                   :
                                 :   PUBLIC VERSION
           Defendant,            :
                                 :
     And                         :
                                 :
ALUMINUM EXTRUSIONS FAIR TRADE :
COMMITTEE,                       :
                                 :
           Defendant-Intervenor. :
_____________________            :

                             OPINION

[Plaintiff’s Motion for Judgment on the Agency Record is DENIED.
Commerce’s Final Results of the Administrative Review are
AFFIRMED.]

                                          Dated:________________
                                                 May 27, 2015

Peter J. Koenig, Squire Patton Boggs (US), LLP, of Washington, DC,
for Plaintiff.

Douglas G. Edelschick, Trial Attorney, Commercial Litigation
Branch, Civil Division, Department of Justice, of Washington DC,
for Defendant. With him on the brief were Tara K. Hogan, Senior
Trial Counsel, Commercial Litigation Branch, Civil Division,
Department of Justice, Joyce R. Branda, Acting Assistant Attorney
General, Jeanne E. Davidson, Director, and Reginald T. Blades,
Jr., Assistant Director.    Of counsel on the brief was Rebecca
Cantu, Senior Attorney, Office of the Chief Counsel for Enforcement
and Compliance, Department of Commerce, of Washington, DC.
Court No.   14-00043                                                   Page 2

Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein, LLP, of
Washington, DC, for Defendant-Intervenor.

            Tsoucalas,    Senior    Judge:       Plaintiff,    Zhaoqing   New

Zhongya Aluminum Co., Ltd., (“Zhongya”) moves for judgment on the

agency record contesting Defendant United States Department of

Commerce’s (“Commerce”) determination to collapse into a single

entity three affiliated exporters/producers, the Guang Ya group

(“Guang Ya”), Zhongya, and Xinya, in Aluminum Extrusions From the

People’s Republic of China:          Final Results of Antidumping Duty

Administrative   Review    and     Rescission    in   Part   2010/12   (“Final

Results of Administrative Review”), 79 Fed. Reg. 96 (Jan. 2, 2014).

Commerce and Defendant-Intervenor, Aluminum Extrusions Fair Trade

Committee, oppose Zhongya’s motion.             For the following reasons,

Zhongya’s motion is denied and the Final Results of Administrative

Review are affirmed.

                 JURISDICTION AND STANDARD OF REVIEW

            The Court has jurisdiction over this action pursuant to

section 201 of the Customs Courts Act of 1980, 28 U.S.C. §

1581(c)(2012) and section 516 of the Tariff Act of 1930, 19 U.S.C.

§ 1516a(a)(2) (2012). 1

1
 Further citations to the Tariff Act of 1930 are to the relevant
portions of Title 19 of the U.S. Code, 2012 edition, and all
applicable amendments thereto.
Court No.    14-00043                                                Page 3

             In   reviewing    a   challenge      to   Commerce's     final

determination in an antidumping administrative review, the Court

will uphold Commerce's determination unless it is “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 means “more than a mere scintilla”

of “such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.” Universal Camera Corp. v. NLRB,

340 U.S. 474, 477, 71 S. Ct. 456, 459, 95 L. Ed. 456, 462 (1951)

(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S. Ct.
206, 217, 83 L. Ed. 126, 140 (1938)).          To determine if substantial

evidence exists, the court reviews the record as a whole, including

whatever “fairly detracts from its weight.” Id. at 488, 71 S.Ct.

at 464, 95 L. Ed. at 467.      The mere fact that it may be possible to

draw two inconsistent conclusions from the record does not prevent

Commerce's    determination    from   being    supported   by   substantial

evidence.     Am. Silicon Techs. v. United States, 261 F.3d 1371,

1376 (Fed. Cir. 2001); see also Consolo v. Fed. Mar. Comm'n, 383
U.S. 607, 620, 86 S. Ct. 1018, 1026, 16 L. Ed. 2d 131, 141 (1966).

                                BACKGROUND

             This case concerns the first administrative review of

the outstanding 2011 antidumping duty order on aluminum extrusions

from the People’s Republic of China (“PRC”) for the period of

review covering November 12, 2010, through April 30, 2012.
Court No.   14-00043                                                       Page 4

Final Results of Administrative Review, 79 Fed. Reg. at 96; Issues

and Decision Memorandum for Final Results of Antidumping Duty

Administrative Review: Aluminum Extrusions from PRC, A-570-967,

(Jan. 2, 2014) (“Antidumping IDM”); Aluminum Extrusions from the

PRC: Antidumping Duty Order, 76 Fed. Reg. 30,650 (May 26, 2011).

            On   April    4,     2011,    Commerce      published   its     final

determination of sales at less than fair value for Aluminum

Extrusions from the PRC.         Aluminum Extrusions From the PRC: Final

Determination     of     Sales    at     Less    Than    Fair   Value     (“Final

Determination of Sales at LTFV”), 76 Fed. Reg. 18,524 (Apr. 4,

2011).   Commerce investigated three Chinese producers of aluminum

extrusions: Zhongya, Guang Ya, and Xinya.               Id.

            Commerce found that Guang Ya, Zhongya, and Xinya were

affiliated pursuant to 19 U.S.C. 1677 (A) and (F) and collapsed

the three entities into a single entity based upon the claim that

each entity was owned by a member of the Kwong family. Id. at

18,526-27. Commerce determined that the single entity was eligible

for a separate rate and that the use of adverse facts available

(“AFA”) was warranted for both the Guang Ya, Zhongya, Xinya, entity

and the PRC wide entity. Id. at 18,527-29.

            On April 4, 2011, Commerce also published the Final

Determination of a countervailing duty investigation of Guang Ya,

Zhongya, and Xinya.         Aluminum Extrusions From the PRC: Final

Affirmative      Countervailing        Duty     Determination    (“Final      CVD
Court No.     14-00043                                                   Page 5

Determination”) 76 Fed. Reg. 18,521 (Apr. 4, 2011); Issues and

Decision    Memorandum    for    the    Final    Determination    in   the   CVD

Investigation of Aluminum Extrusions from the PRC, C-570-968,

(Mar. 28, 2011) (“IDM for CVD investigation”). In the Final CVD

Determination, Commerce did not collapse Guang Ya, Zhongya, and

Xinya, reasoning that there was no cross-ownership among the

companies.    IDM for CVD investigation at 58.

             With respect to the antidumping investigation, Commerce

concluded that the margin of 33.28% had probative value for the

purpose of being selected as the AFA rate assigned to the Guang

Ya,   Zhongya,    Xinya   entity    and    the   China-wide    entity.    Final

Determination of Sales at LTFV, 76 Fed. Reg. at 18,530.                  In the

investigation, Commerce found that a fourth company, Da Yang, owned

and managed by another Kwong family sibling, was uncooperative and

so subject to the China-wide rate and not collapsed with Zhongya,

Guang Ya, and Xinya.      Aluminum Extrusions From the PRC Notice of

Preliminary Determination of Sales at Less Than Fair Value, and

Preliminary      Determination     of     Targeted   Dumping     (“Preliminary

Determination of Sales at LTFV”) 75 Fed. Reg. 69,403, 69,408 (Nov.

12, 2010).

             This Court affirmed Commerce’s decision to collapse the

entities in the antidumping investigation on October 11, 2012, and

Zhongya appealed to the Court of Appeals for the Federal Circuit

(“CAFC”).      Zhaoqing New Zhongya Aluminum Co., Ltd. v. United
Court No.    14-00043                                        Page 6

States, 36 CIT ___, Slip Op. 12-130, 887 F. Supp. 2d 1301, 1311

(Oct. 11, 2012); Zhaoqing New Zhongya Aluminum Co., Ltd. v. United

States, Appeal No. 13-1113 (Fed. Cir. June 18, 2013) (not reported

in Federal Supplement).      The CAFC dismissed the appeal on June

18, 2013. Id.

            Commerce initiated the administrative review on July 10,

2012.     Initiation of Antidumping and CVD Administrative Reviews

and Request for Revocation in Part, 77 Fed. Reg. 40,565 (July 10,

2012).    On January 2, 2014, Commerce published the Final Results

of the Antidumping Duty Administrative Review and Rescission for

Aluminum Extrusions from the PRC.   Final Results of Administrative

Review, 79 Fed. Reg. at 96.      Commerce again collapsed Zhongya,

Guang Ya Group, and Xinya into a single entity.         Id. at 97.

Additionally, Commerce found that the collapsed entity “failed to

demonstrate that it was eligible for a separate rate and thus it

is part of the PRC-wide entity.” Id.         Commerce assigned the

collapsed entity a 33.28% weighted average dumping margin.   Id. at

100.     Commerce collapsed the three companies claiming that each

was owned and/or managed by a sibling or a sibling-in-law of the

Kwong family. Antidumping IDM at 19.

            Commerce justified collapsing the three companies in its

Final Results of Administrative Review while rejecting Zhongya’s

arguments against collapsing. Id. at 15-21. Commerce determined

that 19 C.F.R. § 351.401(f) controls the collapsing analysis and
Court No.     14-00043                                                   Page 7

that “Zhongya/Guang Ya Group/Xinya is not eligible for a separate

rate    and   is   part   of   the   PRC-wide     entity.”   Final   Results   of

Administrative Review, 79 Fed. Reg. at 99; see also Antidumping

IDM at 15. Commerce found that the Zhongya, Guang Ya, Xinya entity

is not eligible for a separate rate, because Xinya did not answer

any of Commerce’s questionnaires including the quantity, value,

and separate rate questionnaires, and Guang Ya did not answer the

main or separate rate questionnaires. Antidumping IDM at 23.

              Zhongya disputes Commerce’s decision in the antidumping

administrative review to collapse and treat as one entity Zhongya,

Guang Ya, and Xinya. Pl.’s Mem. J. on R. at 1, Aug. 11, 2014, ECF

No. 28 (“Pl.’s Br.”).

                                     DISCUSSION

     1. 19 C.F.R. § 351.401 (f) controls the collapsing analysis

              Zhongya argues that the antidumping statute authorizes

collapsing only if producers and exporters jointly produce the

same subject merchandise under 19 U.S.C. § 1677(28). 2                Pl.’s Br.

2
    19 U.S.C. § 1677(28) reads as follows:

        The term “exporter or producer” means the exporter of
        the subject merchandise, the producer of the subject
        merchandise, or both where appropriate. For purposes of
        section 1677b of this title, the term “exporter or
        producer” includes both the exporter of the subject
        merchandise and the producer of the same subject
        merchandise to the extent necessary to accurately
        calculate the total amount incurred and realized for
        costs, expenses, and profits in connection with
        production and sale of that merchandise.
Court No.    14-00043                                                  Page 8

at 5.    Zhongya further contends that Zhongya, Guang Ya, and Xinya

do not jointly produce the same subject merchandise; therefore,

Commerce improperly collapsed the companies. Id.           Zhongya relies

on AK Steel Corp. v. United States to support its argument.                AK

Steel Corp. v. United States, 22 CIT 1070, 1080, 34 F. Supp. 2d
756, 765 (1998), rev’d on other grounds, 226 F.3d 1361 (Fed. Cir.

2000).     Commerce maintains that the language of § 1677(28) is not

intended to address collapsing issues.        Def.’s Mem. in Opp’n to

Pl.’s Rule 56.2 Mot. for J. on the Agency R. at 24, Feb. 13, 2015,

ECF No. 39 (“Def.’s Br.”).    Commerce posits instead that 19 C.F.R.

§ 351.401 (f) controls the collapsing analysis. Id. at 25.

             19 C.F.R. § 351.401 (f) provides that Commerce may

collapse    affiliated   producers   where   there   “is   a    significant

potential for the manipulation of price or production.”              19 C.F.R.

§ 351.401 (f)(1) (2014).        In determining whether there is a

significant potential for manipulation Commerce considers the

following factors: (i) the level of common ownership; (ii) the

extent to which managerial employees or board members of one firm

sit on the board of directors of an affiliated firm; and (iii)

whether operations are intertwined, such as through the sharing of

sales    information,    involvement   in    production        and    pricing

decisions, the sharing of facilities or employees, or significant

transactions between the affiliated producers. 19 C.F.R. § 351.401

(f).
Court No.     14-00043                                         Page 9

            Zhongya misinterprets the Court’s holding in AK Steel

Corp., 22 CIT at 1080, 34 F. Supp.2d at 764-65.    Although the Court

in AK Steel Corp. noted that § 1677(28) leaves Commerce the

discretion to collapse, it also recognized that “there is no

explicit reference to collapsing in the legislative history [of 19

U.S.C. § 1677].”     Id.   In AK Steel Corp., the Court found that

Commerce previously published proposed rules to incorporate the

Uruguay Round Agreements Act amendments in 1996, which included a

codification of Commerce’s collapsing practice.      Id. at n.22.    The

proposed rule became codified in 19 C.F.R. § 351.401(f). Id.        This

court finds that 19 C.F.R. § 351.401(f) controls the collapsing

analysis in the instant case, because the rule regarding collapsing

is codified in 19 C.F.R. § 351.401(f).

  2. Affiliation

            Commerce may collapse entities where the entities are

affiliated.     19 C.F.R. § 351.401 (f)(1).     “‘Affiliated persons’

and ‘affiliated parties’ have the same meaning as in section

771(33) of the Act [19 U.S.C. § 1677(33)]”.         Ta Chen Stainless

Steel Pipe Ltd. v. United States, 23 CIT 804, 808 (1999) (not

reported in Federal Supplement), aff’d, 298 F.3d 1330 (Fed. Cir.

2002).   Commerce may find that “[t]wo or more persons directly or

indirectly controlling, controlled by, or under common control

with, any person” are affiliated under subsection (F) of 19 U.S.C.

§ 1677(33).    19 U.S.C. § 1677(33) (F).   Prior case law has approved
Court No.    14-00043                                                  Page 10

a finding of company affiliation on the basis of ownership by a

single family under subsection (F).           Ferro Union, Inc. v. United

States, 23 CIT 178, 194-95, 44 F. Supp. 2d 1310, 1326 (1999).                 In

cases where affiliation is found on the basis of ownership by a

single family, Commerce makes the legitimate choice to treat the

family grouping as a “person” under subsection (F).                Id. at 194-

95, 44 F. Supp. 2d at 1326.

             Zhongya argues that Commerce erroneously found that the

companies were affiliated under § 1677(33)(F), because Commerce’s

treatment of a family grouping as a person is contrary to law.

Pl.’s Br. at 27. Zhongya contends that the decision in Ferro Union

Inc. does not demonstrate that the singular “person” in the statute

needs to be interpreted in the plural to facilitate statutory

intent. Pl.’s Br. at 28; see also Ferro Union Inc. v. United

States, 23 CIT 178, 194, 44 F. Supp. 2d 1310, 1326 (1999).

             Contrary to Zhongya’s assertion, the decision in Ferro

Union Inc. supports the proposition that the singular person in

the   statute   can   be   interpreted   in    the   plural   to    facilitate

statutory intent. Ferro Union Inc., 23 CIT at 194, 44 F. Supp.2d

at 1326. As the Court noted in Ferro Union Inc., the intent of 19

U.S.C.   §   1677(33)   was   to   identify   control   exercised      through

corporate or family groupings. Id.        By interpreting “family” as a

control person, Commerce was giving effect to this intent. Id.
Court No.    14-00043                                                  Page 11

Thus, Commerce’s treatment of the Kwong family grouping as a person

is not contrary to law.         See id.

             Zhongya     next    argues    that    Commerce’s    finding     of

affiliation is not supported by substantial evidence, because

Commerce does not cite evidence showing that Zhongya, Guang Ya, or

Xinya has the potential to control any of the others. Pl.’s Br. at

31. According to 19 U.S.C. § 1677(33)(G) “a person shall be

considered to control another person if the person is legally or

operationally in a position to exercise restraint or direction

over the other person.”         19 U.S.C. § 1677(33)(G).        To determine

whether   control      exists   Commerce    may   consider   whether   “family

groupings”    are    present;    however,    Commerce   is   precluded     from

finding control “unless the relationship has the potential to

impact decisions concerning the production, pricing, or cost of

the subject merchandise or foreign like product.”                19 C.F.R. §

351.102(b)(3). Given that the Kwong family grouping owns nearly

[[       ]] of Guang Ya, Zhongya, and Xinya, the court holds that

Commerce’s finding was reasonable. See id. Since the Kwong family

grouping controls the companies, the court finds that Commerce’s

affiliation finding is supported by substantial evidence.              See id.

     3. Collapsing

             Commerce may collapse affiliated producers where there

“is a significant potential for the manipulation of price or
Court No.    14-00043                                                   Page 12

production.”       19 C.F.R. § 351.401 (f)(1).           Zhongya challenges

Commerce’s     decision    to   collapse     arguing    that    there   is   no

significant potential for the manipulation of price or production.

Pl.’s Br. at 36-46.

             In determining whether there is a significant potential

for manipulation Commerce considers the following factors: (i) the

level of common ownership; (ii) the extent to which managerial

employees or board members of one firm sit on the board of

directors of an affiliated firm; and (iii) whether operations are

intertwined, such as through the sharing of sales information,

involvement in production and pricing decisions, the sharing of

facilities or employees, or significant transactions between the

affiliated producers.       19 C.F.R. § 351.401 (f).           “These factors

are   considered    by   Commerce    in   light   of   the   totality   of   the

circumstances; no one factor is dispositive in determining whether

to collapse the producers.”         Koyo Seiko Co. Ltd. v. United States,

31 CIT 1512, 1535, 516 F. Supp. 2d 1323, 1346 (2007) aff’d, 551 F.3d
1286 (2008).    “The regulation’s list of factors is non-exhaustive

and merely suggests three factors for Commerce to examine in

establishing potential control.”           Catfish Farmers of America v.

United States, 33 CIT 1258, 1266, 641 F. Supp. 2d 1362, 1372 (2009).

Although “common family ownership alone provides an insufficient

basis to collapse entities” such ownership is a “positive indicator

of the significant potential for manipulation.”              Id. at 1265, 641
Court No.     14-00043                                              Page 13
F. Supp. 2d at 1371.      “[T]he existence of the family group, and the

significant      controlling   ownership    by   the    family     members,

reasonably supports Commerce’s collapsing decision.”         Id.

             Zhongya argues that there is no common ownership among

the collapsed companies, because a different person owns each of

the three companies.       Pl.’s Br. at 38.      Nevertheless, Commerce

found that the Kwong family grouping holds nearly [[             ]] common

ownership of Guang Ya, Zhongya, and Xinya in its Memorandum for

Preliminary Results and confirmed this finding in its Final Results

of Administrative Review.        Decision Memorandum for Preliminary

Results     of   Antidumping   Duty   Administrative   Review:     Aluminum

Extrusions from the PRC 2010/12 at 8, A-570-967, (June 3, 2013);

see also, Antidumping IDM, at 18.          The court rejects Zhongya’s

argument, because it ignores the fact that the Kwong family

grouping owns nearly [[          ]] of the three companies, Zhongya,

Guang Ya, and Xinya.       See Catfish Farmers, 33 CIT at 1265, 641

F.Supp. 2d at 1371. Such controlling ownership by the Kwong family

members is a positive indicator of the significant potential for

manipulation. See id.

             In addressing the second factor, Zhongya argues that no

managerial employees or board members of one firm sits on the board

of directors of another firm. Pl.’s Br. at 39.         Even if Zhongya is

correct in this assertion, “there is no applicable precedent that
Court No.    14-00043                                                     Page 14

requires overlapping boards of directors to support a collapsing

determination.         The      regulation’s       list   of   factors   is   non-

exhaustive. . . .” Catfish Farmers, 33 CIT at 1266, 641 F.Supp. 2d

at 1372.     Here, members of the Kwong family are managers and

members of the board of directors in all three companies.                     This

supports a conclusion that there is a significant potential for

manipulation.    See      id.      (finding   a    significant    potential    for

manipulation where a family group held senior leadership positions

in the companies at issue).            Furthermore, as Commerce points out

in its brief, members of the Kwong family group continued to serve

on   the    boards   of      the     Guang    Ya    and   Zhongya.   Preliminary

Determination Regarding Affiliation and Collapsing at 7-8, A-570-

967, (June 3, 2012).                Accordingly, the court finds that a

reasonable reading of the record supports the agency’s finding

that there is a significant potential for manipulation with regards

to the second § 351.401(f)(2) factor.

            With regards to the third factor, Zhongya claims that it

had no transactions with Xinya or Guang Ya during the review

period.     Pl.’s Br. at 41. Zhongya also “certified that going

forward it will not engage in any such transactions.” Id.                 Zhongya

further argues that Commerce “found no evidence of [Zhongya’s]

relationships with Asia Aluminum Holdings, New Asia, [Xinya] and

GYG [Guang Ya].” Rec. App. to Pl. Zhongya’s Rule 56.2 Mem. For J.

on the R., Ex. 1, at 7, Verification Report, January 28, 2010, ECF
Court No.   14-00043                                                 Page 15

No. 29. (“Verification Report”).            Zhongya claims that although

there was a transaction between a sibling and a spouse of a

sibling, the transaction was neither an export transaction nor did

it involve the subject merchandise. Pl.’s Br. at 46 n.95. Zhongya

asserts that this transaction involved investing in futures, not

the production or sale of aluminum extrusions. Id.

            The Court finds that Zhongya’s arguments are unavailing

for   several   reasons.        First,   evidence   regarding    intertwined

operations during the period of review was limited due to Guang Ya

and Xinya’s failure to cooperate. Antidumping IDM at 20. Commerce

drew a reasonable inference from Guang Ya and Xinya’s lack of

cooperation. See id.       Second, there was evidence that Xinya made

payments to Zhongya during the period of investigation. Public

App. to Def.’s Mem. in Opp’n to Pl.’s Rule 56.2 Mot. for J. on

Agency R., P.D. 340, Attach. 1 at 10, Apr. 1, 2013, ECF No. 41.

Third, as Commerce found “[it] is not clear what the nature of

these   payments   are,    as    New   Zhongya’s    accounting   books,   the

explanation from the minority owner of New Zhongya, and the

explanation from the majority owner of New Zhongya were not

consistent.”    Id.    Commerce’s intertwined operations analysis is

reasonable, but even assuming arguendo that Commerce failed to

show intertwined operations, no one factor alone is dispositive.

See Koyo Seiko Co., 31 CIT at 1535, 516 F.Supp.2d at 1346 (holding

that Commerce considers these factors “in light of the totality of
Court No.     14-00043                                                    Page 16

the circumstances.”)       In sum, the court finds that Commerce was

reasonable in determining that a significant potential for the

manipulation of price or production exists, as Guang Ya and Xinya

failed to cooperate, and Zhongya failed to adequately explain the

nature of payments made.

             Finally,    Zhongya    presents    four     other    challenges    to

Commerce’s decision to collapse the three entities that the court

also finds unavailing.       First, Zhongya argues that collapsing to

address     possible    future     manipulation       violates    the   statutory

mandate to calculate current dumping margins.                    Pl.’s Br. at 9.

The court disagrees, as this Court previously recognized that

“Commerce's discretion to group or define companies arises out of

the ‘basic purposes of the statute—determining current margins as

accurately    as   possible.’”      Fischer    S.A.    Comercio     Industria   v.

United States, 36 CIT ___, Slip Op. 12-59 (Apr. 30, 2012).

             Second, Zhongya argues that the antidumping statute has

its own mechanisms to address concerns about manipulation without

resorting to collapsing, such as statutory administrative reviews,

statutory     certifications,       questionnaires,       authorized     channel

dumping margin rates, and various other provisions. Pl.’s Br. at

12-23.    Zhongya notes that where a “statute explicitly provides

remedies for a concern, those are the remedies intended by the
Court No.       14-00043                                                         Page 17

statute, not unlisted ones, which are not authorized by the

statute.” Id. at 13.

               Zhongya’s argument is without merit. The fact that there

are    other     mechanisms       also    addressing        manipulation     does      not

preclude Commerce from collapsing if the conditions of 19 C.F.R.

§ 351.401(f) are met.           19 C.F.R. § 351.401(f).              The Court held in

Hontex that “[a]lthough the antidumping statute does not expressly

address the issue of collapsing, this court has found Commerce’s

collapsing      practice,      now     found    in    its     regulations,      to    be   a

reasonable interpretation of the statute.” Hontex Enterprises Inc.

v. United States, 27 CIT 272, 289-90, 248 F. Supp. 2d 1323, 1338

(2003).         Therefore,      Commerce       acted    in     accordance    with      the

antidumping statute.

               Third, Zhongya argues that Commerce’s decision not to

collapse in the CVD investigation is inconsistent with its decision

to collapse in the antidumping investigation. Pl.’s Br. at 23.

When an agency treats two similar transactions differently, an

explanation       for    the    agency’s       actions        must   be   forthcoming.

Baltimore Gas & Electric Co. v. Heintz, 760 F.2d 1408, 1418 (4th

Cir.   1985).           Zhongya    points      out     that    antidumping      and    CVD

investigations are similar in that there is a concern regarding

shipping    through       a    lower     margin      company.    Pl.’s    Br.    at    23.

Nevertheless, Commerce contends that there is no inconsistency,
Court No.    14-00043                                                    Page 18

because antidumping and CVD proceedings involve different analyses

with different criteria and separate remedies. Def.’s Br. at 33-

34.   The court finds that there is no inconsistency.

            Although    Zhongya      may   be   correct    in    asserting    that

antidumping and CVD cases may be similar in that there is a concern

regarding shipping through a lower margin company, Zhongya fails

to appreciate the significant differences between 19 C.F.R. §

351.401(f) and 19 C.F.R. § 351.525(b)(6)(vi) (2014) that led to

different outcomes with respect to the collapsing at issue here.

In an antidumping proceeding where the issue is whether to collapse

two   or   more   companies,       the   emphasis   is    on    determining    the

following: whether the companies are affiliated under the statute;

whether the companies have facilities for similar or identical

products that would not require substantial retooling of either

facility in order to restructure manufacturing priorities; and

whether there is a significant potential for the manipulation of

price or production. 19 C.F.R. § 351.401(f).

             In contrast, in a CVD case, the inquiry is limited to

whether there is cross-ownership between the companies, that is,

whether “one corporation can use or direct the individual assets

of the other corporation(s) in essentially the same ways it can

use its own assets.” 19 C.F.R. § 351.525(b)(6)(vi).                    Different

standards    applied    to   the    same   facts    may   reasonably    lead    to
Court No.    14-00043                                        Page 19

different outcomes.     Thus, there is no inconsistency between

Commerce’s decision to treat the companies as a single entity in

the antidumping proceeding but not in the CVD investigation.

            Ultimately, as discussed above, Commerce’s decision to

collapse the three companies was reasonable, because there was a

significant potential for manipulation.

  4. Separate Rate Status

            The final issue before the court is whether Commerce

acted appropriately in assigning the collapsed entity the China-

wide rate.     Pl.’s Br. at 47. Zhongya insists that “Commerce’s

practice is to treat companies who do not answer its request for

information (e.g., its separate rate questionnaire) as part of the

China-wide entity, and not eligible for collapsing with other

individually reviewed respondents.”      Id.   Zhongya notes that in

the original investigation of aluminum extrusions from China,

Commerce determined that a fourth company, Da Yang, owned and

managed by another Kwong family sibling, was uncooperative and so

subject to the China-wide rate and not eligible for collapsing

with Zhongya, Guang Ya, and Xinya.    Preliminary Determination of

Sales at LTFV, 75 Fed. Reg. at 69,408.    Therefore, Zhongya asserts

that “[b]ased on the similar noncooperativeness of Guang Ya and

Xinya in this administrative review, they too should be treated
Court No.     14-00043                                                   Page 20

like Da Yang, given the China-wide rate and not collapsed with

Zhongya.” Pl.’s Br. at 47.

              Commerce insists that it “appropriately treated the

Guang    Ya   Group   and    Xinya   as   part   of   the   collapsed   entity.”

Antidumping IDM at 21.           Additionally, in response to Zhongya’s

argument, Commerce notes that its decision to treat Da Yang as

part of the China-wide entity, was made “prior to the point at

which the Department had acquired the information necessary to

consider whether Zhonyga, the Guang Ya Group and Xinya should be

treated as a single entity pursuant to 19 C.F.R. § 351.401(f).”

Id.; Def.’s Br. at 33.         Commerce contends that “allowing parties

to exit the collapsed entity as a consequence of their refusing to

participate would allow manipulation by the parties to obtain a

different rate than the one for the collapsed entity.”              Def.’s Br.

at 32.

              Commerce’s practice as to nonmarket economy (“NME”)

exporters is to presume that all exporters are under the control

of the central government until they demonstrate an absence of

government control.         Air Prods. & Chems. Inc. v. United States, 22
CIT 433, 436, 14 F. Supp. 2d 737, 741 (1998); Sigma Corp. v. United

States, 117 F.3d 1401, 1405 (Fed. Cir. 1997). “Those exporters who

do not respond or fail to prove absence of de jure/de facto control

are assigned the country-wide rate.               Therefore, a NME exporter

normally receives one of two rates: either the separate rate for
Court No.    14-00043                                               Page 21

which it qualified or a country-wide rate.”            Coalition for the

Pres. of Am. Brake Drum and Rotor Aftermkt. Mfrs. v. United States,

23 CIT 88, 107, 44 F. Supp. 2d 229, 248 (1999).

            Xinya did not answer any of Commerce’s questionnaires in

this review, including Commerce’s quantity and value and separate

rate questionnaires.         Antidumping IDM at 23.    Guang Ya did not

answer Commerce’s main questionnaire or Commerce’s separate rate

questionnaire.     Id.   Commerce collapsed Xinya, Zhongya, and Guang

Ya in the Final Results of Administrative Review and found that

the companies were part of the PRC wide entity. Id. at 15; Final

Results of Administrative Review, 79 Fed. Reg. at 99.

            The court holds that Commerce’s collapsing determination

is consistent with its separate rate practice, because allowing

Guang Ya and Xinya to exit the collapsed entity would allow for

manipulation.      Also, Commerce’s determination, that Da Yang is

part of the China-wide entity, was made prior to the point at which

Commerce    had   acquired    the   information   necessary   to   consider

whether Zhonyga, Guang Ya, and Xinya should be treated as a single

entity pursuant to 19 C.F.R. § 351.401(f).          Commerce reviews all

components that constitute the collapsed entity and any response

must include data for all companies that comprise the collapsed

entity.     See Notice of Final Determination of Sales at LTFV:

Bicycles From the PRC, 61 Fed. Reg. 19,026 (Apr. 30, 1996), and

accompanying Issues and Decision Memorandum at cmt. 8; see also
Court No.   14-00043                                               Page 22

Light-Walled    Rectangular   Pipe   and   Tube   from   Turkey:    Final

Determination of Sales at LTFV, 69 Fed. Reg. 53,675 (Sept. 2,

2004); Issues and Decision Memorandum for the Final Determination

in the Antidumping Duty Investigation of Light-Walled Rectangular

Pipe and Tube from Turkey at cmt. 11, A-489-812, (Sept. 2, 2004).

Commerce reviewed all components that constitute the collapsed

entity, that is, Xinya, Guang Ya, and Zhongya.           Any responses

should have included data for all three companies. Xinya and Guang

Ya did not respond with their data.    Therefore, Commerce correctly

concluded that the collapsed entity failed to demonstrate that it

was eligible for a separate rate and thus it is part of the China-

wide entity.

                              CONCLUSION

            Based on the foregoing, Commerce’s Final Results of

Administrative Review are AFFIRMED.    Zhongya’s Motion for Judgment

on the Agency Record is DENIED.            Judgment will be entered

accordingly.

                                            /s/ Nicholas Tsoucalas
                                              Nicholas Tsoucalas
                                                 Senior Judge
Dated:      ___________________
             May 27, 2015
            New York, New York