Court Opinion

ID: 818716
Source: CourtListenerOpinion
Date Created: 2013-02-03 08:27:37.701649+00
Date Added: 2024-06-11T12:39:35.020922
License: Public Domain

Slip Op. 04 - 111

            UNITED STATES COURT OF INTERNATIONAL TRADE

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RAOPING XINGYU FOODS CO., LTD.,           :

                             Plaintiff,   :

                   v.                     :

UNITED STATES,                            :   Court No. 02-00550

                             Defendant,   :
                 -and-
                                      :
COALITION FOR FAIR PRESERVED MUSHROOM
TRADE,                                :

                 Intervenor-Defendant.    :

- - - - - - - - - - - - - - - - - - - x

                           Memorandum
[Plaintiff's motion for judgment on the
 agency record denied; action dismissed.]

                                              Decided:   August 31, 2004

     DeKieffer & Horgan (John J. Kenkel and J. Kevin Horgan) and
Lee & Xiao (Yingchao Xiao) for the plaintiff.

     Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice (A. David Lafer); and Office of Chief Counsel
for Import Administration, U.S. Department of Commerce (Peter J.S.
Kaldes), of counsel, for the defendant.

     Collier Shannon Scott, PLLC (Michael J. Coursey and Adam H.
Gordon) for the intervenor-defendant.

          AQUILINO, Judge:    According to the Trade Agreements Act

of 1979, as amended, in determining whether foreign merchandise is

being, or is likely to be, sold in the United States at less than

fair value, a comparison shall be made between the export (or con-
Court No. 02-00550                                          Page 2

structed export) price and "normal value."    19 U.S.C. §1677b(a).

And when such merchandise is produced in a nonmarket-economy

country, the act authorizes the International Trade Administration,

U.S. Department of Commerce ("ITA") to

     determine the normal value of the subject merchandise on
     the basis of the value of the factors of production
     utilized in producing the merchandise . . .. [T]he valu-
     ation of the factors of production shall be based on the
     best available information regarding the values of such
     factors in a market economy country or countries consid-
     ered to be appropriate by [it].

19 U.S.C. §1677b(c)(1).   The list of those factors in the statute

includes "amounts of energy and other utilities consumed".       19

U.S.C. §1677b(c)(3)(C).   And the act further provides:

     (4) Valuation of factors of production

          The [ITA], in valuing factors of production under
     paragraph (1), shall utilize, to the extent possible, the
     prices or costs of factors of production in one or more
     market economy countries that are--

               (A) at a level of economic development
          comparable to that of the nonmarket economy
          country, and

               (B) significant producers of comparable
          merchandise.

19 U.S.C. §1677b(c)(4).

                                 I

          The complaint filed in this action alleges that the

above-named plaintiff is a privately-held company organized under
Court No. 02-00550                                           Page 3

the laws of the People's Republic of China ("PRC"), which country

is still considered to have a nonmarket economy.         See, e.g.,

Coalition for the Preservation of American Brake Drum & Rotor

Aftermarket Mfrs. v. United States, 28 CIT   , 318 F.Supp.2d 1305

(2004). Certain mushrooms produced and preserved there and export-

ed to the United States have become subject to an ITA antidumping-

duty order published at 64 Fed.Reg. 8,308 (Feb. 19, 1999).      The

petitioner for that relief, the above-encaptioned intervenor-

defendant herein, requested an agency administrative review of

exports of such merchandise subject to that order emanating from

some 28 named PRC enterprises, including the plaintiff company now

at bar.

          That process resulted in a weighted-average dumping

margin for it of 161.57 percent for the period of review ("POR")

per the ITA's Certain Preserved Mushrooms From the P[RC]: Final
Results of Third New Shipper Review and Final Results and Partial
Rescission of Second Antidumping Duty Administrative Review, 67

Fed.Reg. 46,173, 46,175 (July 12, 2002).     The plaintiff seeks

relief from this determination via a motion for judgment upon the

record compiled by the agency in connection therewith.

          The court's jurisdiction to hear and decide this motion

that has been proffered pursuant to USCIT Rule 56.2 is based upon

28 U.S.C. §§ 1581(c), 2631(c).
Court No. 02-00550                                                  Page 4

                                   A

          The sum and substance of plaintiff's complaint is that

the ITA

     used a surrogate value for the wrong type of fuel in
     calculating the dumping margin for Raoping.      Raoping
     argued and submitted supporting data for Commerce to use
     a value for the actual type of fuel it uses, namely
     "heavy" fuel oil.    Rather, Commerce decided to use a
     value for "furnace oil," a different product. Such an
     apples-to-oranges comparison is unsupported by substan-
     tial evidence on the record and otherwise not in accord-
     ance with law.

Count I, para. 13. Its motion takes the position that the other-

wise-not-in-accordance-with-law element of the court's standard of

review per 19 U.S.C. §1516a(b)(1)(B)(i) governs relief in this

matter in that the "use of a value for a factor of production not

utilized by Raoping Xingyu is unlawful", to borrow the words (but

not the printed emphasis) of its statement of the sole issue,

plaintiff's memorandum, page 1.

          Of course, counsel must recognize that the resolution of

an issue of law often depends on the underlying facts.           Here, they

include ITA issuance to Raoping Xingyu of a dumping questionnaire

on or about March 30, 2001, section D of which, pursuant to 19

U.S.C. §1677b(c)(1),     supra,   was   concerned   with   the   company's

factors of production.    Part IIA thereof, for example, requested a

"description of . . . [it]s productional process for the merchan-

dise under consideration" to include:
Court No. 02-00550                                              Page 5

     . . . 5. . . . all inputs used to produce the merchan-
     dise . . ., including specific types of raw materials,
     labor, energy, subcontractor services, research and
     development, etc.

Boldface in original.     The court has reviewed in camera Raoping

Xingyu's initial response 1 to that part of the agency's question-

naire and found reference to many such inputs, including, for

example, electricity2, water3, and coal4, but no reference to the

input, liquid fuel, still at issue.       A subsequent response on be-

half of the company and "its supplier Raoping Yucan Canned Foods

Factory . . . submit[ted] minor corrections to Raoping Yucan's

factors of production data."5     Among other things, that submission

refers to "industrial heavy oil"6.

            That submission was followed by an ITA letter to company

counsel, apprising them of the agency's "first resort to the use of

publicly available published information from surrogate countries"

and offering an "opportunity to submit any such information which

they believe the Department should consider when valuing the

factors of production".      Defendant's Memorandum, Appendix 3, p. 1.

     1
        Defendant-Intervenor's      [Confidential]   Response   Brief,
Appendix 3.
     2
         See id., pp. D-17 to D-18.
     3
         See id., p. D-18.
     4
         See id., pp. D-18 to D-19.
     5
         Ibid., Appendix 4, first page.
     6
         See, e.g., id., fifth page.
Court No. 02-00550                                            Page 6

Counsel were thereafter admonished by the ITA for "deficiencies,

omissions and areas where further clarification is needed"7 pur-

portedly found in the Raoping Xingyu response(s) to its question-

naire. Whatever the precise nature thereof, the court has reviewed

the company's response8 to that agency letter dated October 3, 2001

and its responses9 to supplemental ITA questionnaires10.     The re-

sponses dated January 11, 2002 and May 10, 2002 each have line

items labelled "Heavy Oil".      The January 11 submission explains

that, once washed and then sliced, Raoping's mushrooms are blanched

in a stainless steel tank heated by steam produced by a boiler,

which burns "heavy oil".      Plaintiff's [Confidential] Memorandum,

Appendix 4, eighth page, para. 3.

             The ITA's Preliminary Results of its administrative re-
view, which were published at 67 Fed.Reg. 10,128 et seq. (March 6,

2002), stated, in pertinent part, that, to

     value furnace oil, we used price data contained in
     Hindustan Lever Limited's . . . 1999-2000 financial
     report because no other data was available from the other
     financial reports on the record.

67 Fed.Reg. at 10,132, col. 2.    The reference to that firm in India

was the result of the agency's reaffirmance of its position that

     7
          Defendant's Memorandum, Appendix 5.
     8
       Defendant-Intervenor's [Confidential] Response Brief, Ap-
pendix 5.
     9
      Id., Appendix 14; Plaintiff's [Confidential] Memorandum, Ap-
pendixes 4, 5.
     10
          Defendant's Memorandum, Appendixes 7, 10.
Court No. 02-00550                                          Page 7

the PRC continue to be treated as a nonmarket-economy country11 and

its determination that

     India is among the countries comparable to the PRC in
     terms of overall economic development . . .. In addition,
     based on publicly available information placed on the
     record, India is a significant producer of the subject
     merchandise. Accordingly, we considered India the pri-
     mary surrogate country for purposes of valuing the fac-
     tors of production because it meets the Department's
     criteria for surrogate country selection.

Id. at 10,131, col. 3.

            This selection precipitated the filing of a case brief

with the ITA on behalf of Raoping, to wit:

          The furnace oil that Hindustan Lever used is of
     different quality from the heavy fuel (which was trans-
     lated literally into "heavy oil" in Raoping's question-
     naire response) that Raoping used for its canned mushroom
     production during the POR. First, the huge difference
     between the prices of Hindustan Lever's and Raoping's
     fuel indicates that the qualities of the two fuels are
     different. We understand that as in a non-market econ-
     omy, Raoping's fuel price cannot be used for such a
     comparison.    However, the heavy fuel price that the
     Department used for China in a different proceeding is
     just a fraction of that of Hindustan Lever's furnace oil.
     . . . [T]he only heavy fuel price . . . used was in the
     Persulfates case (A-570-847), which is $0.12337 per
     kilogram. In the current review the furnace oil that the
     Department used is USD 0.45 per kilogram, 3.6 times of
     that in the Persulfates case, and it is even more ex-
     pensive than the diesel oil which is a purer and better
     quality fuel than heavy fuel. . . . The dramatic dif-
     ference of the prices indicates that the two fuels are of
     different quality. The heavy fuel that Raoping used is
     the last residual of oil refining process and it was so
     cheap that Raoping actually reduced its production cost
     by using it. . . . Raoping's boiler is also specially
     designed to use cheap fuel. While we have no information

     11
          See 67 Fed.Reg. at 10,131, col. 3.
Court No. 02-00550                                          Page 8

     in the record regarding how and for what products . . .
     Hindustan Lever used the furnace oil, we know that canned
     mushroom is a small portion of Hindustan Lever's produc-
     tion, and it is very likely that Hindustan used the fuel
     in the production of the products that require a higher
     quality oil. Even [if] Hindustan Lever uses the furnace
     oil for its canned mushroom production, it may be of a
     higher quality and more efficient oil than that of Rao-
     ping's. Before we know that the two fuels are of similar
     quality, using . . . Hindustan Lever's oil price to
     calculate Raoping's cheap heavy fuel cost is not proper.
     For these reasons, we urge the Department to find a sur-
     rogate price of a fuel that is close to what Raoping used
     during the POR, or continue its past practice to use the
     heavy fuel price in the Persulfates case with adjust-
     ments.

Plaintiff's Memorandum, Appendix 6, third-fourth pages (citations

omitted).   This plea was rejected by the ITA in its Issues and

Decision Memorandum as follows:

     . . . First, we find that the price of Hindustan's fi-
     nancial report is more contemporaneous to the POR than
     the price from Energy, Prices and Taxes. In addition,
     after examining information contained in Hindustan's
     financial report, we find no basis which supports Raoping
     Xingyu's contention that the furnace oil Hindustan uses
     is not comparable to the furnace oil Raoping Xingyu uses
     in its production process. The mere fact that there is a
     difference in the price of furnace oil contained in
     Hindustan's financial report and in Energy, Prices and
     Taxes does not necessarily indicate that there is an
     issue with regard to the quality of the furnace oil
     contained in either resource, especially when one
     recognizes that the price from Energy, Prices and Taxes
     is at least four years older than the price from Hin-
     dustan's financial report. Absent any supporting docu-
     mentation or resources, we find that we cannot agree with
     Raoping Xingyu's claim that it uses furnace oil which is
     vastly different from that used by Hindustan. Thus, we
     are continuing to value this input using data from
     Hindustan's financial report.

Id., Appendix 3, pp. 6-7. The agency's subsequently-published Final

Results that are now before the court adopted this reasoning.    See

67 Fed.Reg. at 46,175, col. 1.
Court No. 02-00550                                          Page 9

                                 B

          That adoption, and that of defendant's counsel in their

memorandum, pages 9-10, seem somewhat incongruous.   If the court's

understanding is correct that Energy Prices & Taxes is a continu-
ing, quarterly publication of statistics by the Organisation for

Economic Cooperation and Development's International Energy Agency

("IEA"), then Hindustan Lever's past fuel prices are not "more con-

temporaneous to the POR than the price from Energy, Prices and

Taxes." Ibid. Indeed, independent of the IEA, the U.S. government

is or should be awash in oil data gathered and published by its own

Energy Information Administration.

          Be that as it may, the ongoing, world-wide phenomenon

that is the flighty pricing of petroleum in all of its combinations

and permutations has made contemporaneity a most-fleeting element

of any related equation.     Spot price is what counts.    In this

matter, however, as the court reads the record, the plaintiff

failed to proffer any price paid for, or understood-grade of, its

fuel oil.12   Belatedly, it pleaded for reference, as quoted above,

to an oil factor listed in the ITA's Index of Factor Values for Use

     12
        Its counsel concede the timely "opportunity to submit any
such information which they believe the [ITA] should consider when
valuing the factors of production". Plaintiff's Memorandum, p. 10,
quoting Appendix 8 thereto, p. 1. Cf. Tianjin Machinery Import &
Export Corp. v. United States, 16 CIT 931, 936, 806 F.Supp. 1008,
1015 (1992)("the burden of creating an adequate record lies with
respondents and not with Commerce"), citing Chinsung Indus. Co. v.
United States, 13 CIT 103, 705 F.Supp. 598 (1989).
Court No. 02-00550                                                   Page 10

in Antidumping Duty Investigations Involving Products from the

P[RC]: Memorandum from Richard Moreland to All Reviewers (April

1997).     Cf. Plaintiff's Memorandum, Appendix 6, Exhibit 1, p. 2.

While that factor may well have been of moment during the period

indicated, October 1994 to March 1995, to require the ITA now to

resort     thereto   would   reduce   the    requirement   of   19   U.S.C.

§1677b(c)(1) of "the best available information regarding the

values of such factors" to a degree certainly not contemplated by

Congress or countenanced by the courts.         Given the record, such as

it is herein, this court cannot find that the Hindustan Lever data

are not the best available, nor can this court conclude that the

agency's reliance thereon was not in accordance with the law

recited hereinabove.

                                      II

            In view of the foregoing, plaintiff's motion for judgment

upon the agency record must be denied and this action dismissed.

Judgment will enter accordingly.

Decided:    New York, New York
            August 31, 2004
                                            Thomas J. Aquilino, Jr.
                                                     Judge