Court Opinion

ID: 9928663
Source: CourtListenerOpinion
Date Created: 2024-01-31 20:02:59.334635+00
Date Added: 2024-06-11T09:52:52.634613
License: Public Domain

Slip Op. 24-11

            UNITED STATES
     COURT OF INTERNATIONAL TRADE

              Court No. 20-00008

          NEW AMERICAN KEG, d/b/a
          AMERICAN KEG COMPANY,
                    Plaintiff,
                        v.
               UNITED STATES,
                   Defendant,
                       and
      NINGBO MASTER INTERNATIONAL
      TRADE CO., LTD., AND GUANGZHOU
        JINGYE MACHINERY CO, LTD.,
              Defendant-Intervenors.

          Before: M. Miller Baker, Judge

                   OPINION

[The court again remands to Commerce for further
proceedings.]

                             Dated: January 31, 2024

Whitney M. Rolig, Andrew W. Kentz, and Nathaniel
Maandig Rickard, Picard Kentz & Rowe LLP of Wash-
ington, DC, on the comments for Plaintiff.
Ct. No. 20-00008                                  Page 2

Brian M. Boynton, Principal Deputy Assistant Attor-
ney General; Patricia M. McCarthy, Director; and Ash-
ley Akers, Trial Attorney, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice of
Washington, DC, on the comments for Defendant. Of
counsel on the comments was Vania Wang, Attorney,
Office of the Chief Counsel for Trade Enforcement &
Compliance, U.S. Department of Commerce of Wash-
ington, DC.

Gregory S. Menegaz and Alexandra H. Salzman,
deKieffer & Horgan, PLLC, of Washington, DC, on the
comments for Defendant-Intervenors.

   Baker, Judge: This antidumping case involving
beer kegs imported from China returns for a third
time. 1 In its most recent decision, the court remanded
for the Department of Commerce to explain why it
used a Mexican wage rate adjusted with Brazilian in-
flation data rather than employing the latter country’s
rate to calculate a surrogate labor costs value for Chi-
nese producer and mandatory respondent, Ningbo
Master. See Am. Keg II, Slip Op. 22–106, at 9, 2022 WL
4363320, at *3. The court also directed the agency to
identify the evidence supporting a separate rate for
Ulix, another Chinese producer. See id.

1 The court presumes the reader’s familiarity with its two

previous opinions in this matter. See New Am. Keg v.
United States, Ct. No. 20-00008, Slip Op. 21-30, 2021 WL
1206153 (CIT Mar. 23, 2021) (Am. Keg I); New Am. Keg v.
United States, Ct. No. 20-00008, Slip Op. 22-106, 2022 WL
4363320 (CIT Sept. 13, 2022) (Am. Keg II).
Ct. No. 20-00008                                  Page 3

    After reexamining the issue, Commerce acknowl-
edged that adjusting Mexican wage rates with Brazil-
ian inflation data was “improper.” Appx4430. The De-
partment nevertheless rebuffed domestic producer
American Keg’s request to use Brazilian information
because unlike that country, which only makes compa-
rable products, Mexico produces “identical” steel kegs.
Id. Instead, the agency reopened the record and used
a different data set for Mexico—one that was contem-
poraneous with the period of review. Appx4430–4431. 2
It also identified evidence on the record that it charac-
terized as justifying a separate rate for Ulix.
Appx4431–4434.

                            I

    American Keg contests Commerce’s decision to reo-
pen the record and use new Mexican wage rate data
rather than the Brazilian statistics provided by the
parties. The company argues the Department abused
its discretion because contrary to the latter’s stated ra-
tionale, see Appx4435–4436, informational accuracy
did not require any such reopening, and the agency

2 In its prior determination, the Department used non-con-

temporaneous Mexican wage rates from the Conference
Board’s International Labor Comparisons (ILC) that the
parties placed on the record. Appx1469. On remand, Com-
merce placed on the record contemporaneous Mexican
wage data from the International Labour Organization
(ILO). Appx4430–4431. The Department prefers to use ILO
data. See Appx4431 (citing Antidumping Methodologies in
Proceedings Involving Non-Market Economies: Valuing the
Factor of Production: Labor, 76 Fed. Reg. 36,092 (Dep’t
Commerce June 21, 2011)).
Ct. No. 20-00008                                    Page 4

disregarded its general policy of relying on the liti-
gants to create the record.

    The court agrees. To begin with, “a Commerce de-
termination . . . is ‘accurate’ if it is correct as a mathe-
matical and factual matter . . . .” Nan Ya Plastics Corp.
v. United States, 810 F.3d 1333, 1344 (Fed. Cir. 2016).
It’s undisputed that the Brazilian information on the
record was correct as a factual matter—indeed, the
Department so found in its draft redetermination re-
sults. Appx1006. The agency’s reopening the record be-
cause of a purported need for accurate data is not sup-
ported by substantial evidence.

   Insofar as the Department reopened the record be-
cause of its preference for data from countries that pro-
duce identical, as opposed to merely comparable,
goods, that reopening was arbitrary and capricious for
two related reasons. First, Commerce uses figures
from countries that produce comparable products
when there are “data difficulties” with countries that
produce identical products. Import Administration
Policy Bulletin 04.1, Non-Market Economy Surrogate
Country Selection Process, at 2 n.6 (Mar. 1, 2004). On
the record created by the parties, there were data dif-
ficulties with the Mexican ILC wage data because it
lacked an inflation adjustor, but there was no such dif-
ficulty with the Brazilian information.

    Second, “the burden of creating an adequate record
lies with interested parties and not with Commerce.”
QVD Food Co. v. United States, 658 F.3d 1318, 1324
(Fed. Cir. 2011) (brackets omitted). To that end, regu-
lations provide that “[t]he Department obtains most of
Ct. No. 20-00008                                  Page 5

its factual information in antidumping . . . duty pro-
ceedings from submissions by interested parties dur-
ing the course of the proceeding.” 19 C.F.R.
§ 351.301(a). Thus, “Commerce generally does not con-
sider untimely filed factual information.” Essar Steel
Ltd. v. United States, 678 F.3d 1268, 1278 (Fed. Cir.
2012) (citing 19 C.F.R. § 351.302(d)(1)). Nor does the
agency reopen the record to admit evidence that it pre-
fers, such as ILO data, when the parties have intro-
duced otherwise-acceptable evidence that allows an
accurate margin calculation. See, e.g., Multilayered
Wood Flooring from the People’s Republic of China, 85
Fed. Reg. 78,118 (Dep’t Commerce Dec. 3, 2020) and
accompanying I&D Memo at 12 (selecting between two
non-ILO sources placed on the record by interested
parties and explaining that “[a]lthough Commerce
stated a preference for ILO data, it did not preclude
reliance on data from another source”).

    As “[c]onstant reopening and supplementation of
the record would lead to inefficiency and delay in final-
ity,” Essar, 678 F.3d at 1277, supplementation is per-
missible in “a small number of” circumstances. Id. One
such circumstance is “when the underlying agency de-
cision was based on ‘inaccurate data’ . . . .” Id. Because
the Department made no showing that the Brazilian
wage information on the record was inaccurate or oth-
erwise unsuitable for calculation of Ningbo Master’s
Ct. No. 20-00008                                       Page 6

margin, Commerce abused its discretion in reopening
the record to use Mexican ILO wage data. 3

                              II

    To qualify for separate-rate status, an applicant
must provide evidence of sales to an unaffiliated U.S.
customer. See Am. Keg I, Slip Op. 21–30, at 45, 2021
WL 1206153, at *17. The government acknowledges
that because of the undisputed affiliation between
Company A (an American company) and Ulix’s U.S.
customer, if Ulix and Company A were affiliated, “that
would mean [Ulix] and its U.S. customer . . . were af-
filiated.” ECF 90, at 32. In its previous decision, the
court therefore remanded for the Department to iden-
tify evidence on the record that Company A and Ulix
were unaffiliated. Am. Keg II, Slip Op. 22-106, at 8–9,
2022 WL 4363320, at *3.

   Commerce complied by pointing to various parts of
the record, including Ulix’s separate-rate application,
which represented that the company was not affiliated
with any U.S. entity. Appx4432. The Department also
cited the fact that the list of Ulix’s shareholders did
not overlap with the owner of Company A. Id.
Although American Keg challenges the sufficiency of

3 The court acknowledges that it previously declined Amer-

ican Keg’s invitation to preemptively bar the Department
from reopening the record on remand because the company
failed to identify “any authority for the court to so limit the
Department’s discretion.” Am. Keg II, Slip Op. 22-106, at 6
n.3, 2022 WL 4363320, at *2 n.3. Whether the agency
abused that discretion is a different question, and one
within the court’s purview.
Ct. No. 20-00008                               Page 7

that evidence, reweighing the record is not for the
court. Substantial evidence supports the agency’s
remand determination that Ulix is eligible for a
separate rate.

                     *    *   *

   The court remands for further proceedings con-
sistent with this opinion.

Dated: January 31, 2024       /s/ M. Miller Baker
       New York, NY           Judge