Court Opinion

ID: 4555656
Source: CourtListenerOpinion
Date Created: 2020-08-14 14:01:24.334582+00
Date Added: 2024-06-11T13:23:19.971476
License: Public Domain

Slip Op. No. 20-

               UNITED STATES COURT OF INTERNATIONAL TRADE

GUIZHOU TYRE CO., LTD. AND
GUIZHOU TYRE IMPORT AND
EXPORT CO., LTD., et al.,

                           Plaintiffs,             Before: Timothy C. Stanceu, Chief Judge

               v.                                  Consol. Court No. 18-00099

UNITED STATES,

                           Defendant.

                                   OPINION AND ORDER

       [Ordering reconsideration of an agency determination concluding an administrative
review of an antidumping duty order on off-the-road tires from the People’s Republic of China]

                                                                   Dated: $XJXVW

        Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C., for
plaintiffs Guizhou Tyre Co., Ltd., Guizhou Tyre Import and Export Co., Ltd., and GTC North
America, Inc. With him on the brief were James P. Durling and Tung A. Nguyen.

        Richard P. Ferrin, Faegre Drinker Biddle & Reath LLP, of Washington, D.C., for
plaintiff Valmont Industries, Inc. With him on the brief was Douglas J. Heffner.

       John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, D.C., argued for defendant. Of counsel on the brief was
Kristen McCannon, Attorney, Office of the Chief Counsel For Trade Enforcement &
Compliance, U.S. Department of Commerce.

       Stanceu, Chief Judge: Plaintiffs contest an administrative determination issued by the

International Trade Administration, U.S. Department of Commerce (“Commerce” or the

“Department”), to conclude the eighth periodic review of an antidumping duty (“AD”) order on

certain off-the-road (“OTR”) tires from the People’s Republic of China (“China” or the “PRC”).
Consol. Court No. 18-00099                                                                  Page 2

       Before the court are motions for judgment on the agency record challenging various

aspects of the contested determination. Also before the court are a motion, and a second request,

for remand by defendant United States. The court remands the contested determination for

reconsideration by Commerce.

                                         I. BACKGROUND

                                A. The Contested Determination

       The determination contested in this consolidated action1 (the “Final Results”) is Certain

New Pneumatic Off-the-Road Tires From the People’s Republic of China: Final Results of

Antidumping Duty Administrative Review and New Shipper Review; 2015-2016, 83 Fed. Reg.

16,829 (Int’l Trade Admin. Apr. 17, 2018) (“Final Results”). Incorporated by reference in the

Final Results is an “Issues and Decision Memorandum” (“Final I&D Mem.”) containing

explanatory discussion. Issues and Decision Memorandum for the Antidumping Duty

Administrative Review and New Shipper Review: Certain New Pneumatic Off-the-Road Tires

from the People’s Republic of China; 2015-2016 (Int’l Trade Admin. Apr. 11, 2018) (P.R. Doc.

300) (“Final I&D Mem.”).

                            B. The Parties to this Consolidated Case

       There are four plaintiffs in this consolidated action. Guizhou Tyre Co., Ltd., a Chinese

producer of OTR tires, and Guizhou Tyre Import and Export Co., Ltd. (“GTCIE”), a wholly

owned subsidiary of GTC Tyre Co., Ltd. (collectively, “GTC”), are plaintiffs; Commerce

decided to treat these two companies as a single entity (i.e., a single “exporter-producer”) in

conducting the eighth review, a decision not contested in this case. See Final I&D Mem. at

       1
         Consolidated with the lead case, Guizhou Tyre Co. et al. v. United States, Court No. 18-
00099, is Valmont Industries, Inc. v. United States, Court No. 18-00110. See Order Granting
Mot. to Consolidate Cases (June 25, 2018), ECF No. 14.
Consol. Court No. 18-00099                                                                  Page 3

1 n.2. GTC North America, Inc. (“GTC North America”), a U.S. importer and wholly owned

affiliate of Guizhou Tyre Import and Export Co., Ltd., is also a plaintiff, as is Valmont

Industries, Inc. (“Valmont”), an unaffiliated U.S. importer.

       C. Proceedings Conducted by Commerce that Culminated in the Final Results

       Background pertinent to this litigation stems from the administrative proceeding

culminating in the contested decision and also from decisions made in previous, related

proceedings conducted by Commerce. The court summarizes the procedural background below.

       Commerce issued an antidumping duty order on OTR tires from China (the “Order”) in

2008. Certain New Pneumatic Off-the-Road Tires From the People’s Republic of China: Notice

of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping

Duty Order, 73 Fed. Reg. 51,624 (Int’l Trade Admin. Sept. 4, 2008).

       In antidumping duty proceedings involving nonmarket economy (“NME”) countries,

including China, Commerce has adhered to a practice under which it applies a rebuttable

presumption that all companies within the nonmarket economy country are controlled by the

government of that country. See Notice of Final Determination of Sales at Less Than Fair

Value: Silicon Carbide From the People’s Republic of China, 59 Fed. Reg. 22,585, 22,587 (Int’l

Trade Admin. May 2, 1994) (“Silicon Carbide”); Final Determination of Sales at Less Than Fair

Value: Sparklers From the People’s Republic of China, 56 Fed. Reg. 20,588, 20,589 (Int’l Trade

Admin. May 6, 1991). An exporter may overcome the presumption of government control by

convincing Commerce that it is subject neither to de jure nor to de facto control of the

government of the NME country. Silicon Carbide, 59 Fed. Reg. at 22,587.

       In the antidumping duty investigation resulting in the Order, Commerce assigned GTC,

and 28 other companies, a “separate rate,” which was a rate other than the rate Commerce
Consol. Court No. 18-00099                                                                Page 4

assigned to exporters and producers it considered to have failed to rebut its presumption of

government control. See Certain New Pneumatic Off-The-Road Tires from the People’s

Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value and

Partial Affirmative Determination of Critical Circumstances, 73 Fed. Reg. 40,485, 40,487 (Int’l

Trade Admin. July 15, 2008). Commerce placed those companies it considered to have failed to

rebut its presumption within what it called the “PRC-wide” (or “China-wide”) “entity,” to which

it assigned a “PRC-wide” (or “China-wide”) rate. Id. at 40,488.

       In the investigation, GTC was one of the companies individually investigated; Commerce

assigned GTC an estimated weighted average dumping margin of 4.08%. Id. at 40,489.

Concluding that the government of the PRC did not provide requested information, Commerce

assigned the PRC-wide entity a rate of 210.48% based on “facts otherwise available” under

19 U.S.C. § 1677e(a) and an “adverse inference” under 19 U.S.C. § 1677e(b). Id. at 40,488.

Commerce calculated this rate from information it obtained from the petition. Id.

       In the fifth periodic administrative review of the Order, Commerce selected GTC as one

of two mandatory respondents, again determined that GTC was eligible for a separate rate based

on demonstrated independence from government control, and assigned GTC a weighted average

dumping margin of 11.34%, calculated from GTC’s own sales and production data. See Certain

New Pneumatic Off-the-Road Tires From the People’s Republic of China: Final Results of

Antidumping Duty Administrative Review; 2012-2013, 80 Fed. Reg. 20,197, 20,198–99 (Int’l

Trade Admin. Apr. 15, 2015) (“AR5 Final Results”). Commerce again selected GTC as a

mandatory respondent for the seventh administrative review, but this time Commerce determined

that GTC had not demonstrated independence from the PRC government and assigned to GTC

the PRC-wide rate of 105.31%. See Certain New Pneumatic Off-the-Road Tires From the
Consol. Court No. 18-00099                                                                      Page 5

People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2014-

2015, 82 Fed. Reg. 18,733, 18,735 (Int’l Trade Admin. Apr. 21, 2017) (“AR7 Final Results”).

       The PRC-wide rate of 105.31% that Commerce assigned to GTC in the eighth review

was carried over from the final results of the fifth administrative review into subsequent reviews.

Commerce determined this PRC-wide rate in the fifth review by calculating the average of the

210.48% PRC-wide rate prior to the fifth review (determined in the investigation) and a 0.14%

rate Commerce calculated for, but did not assign to, a respondent in the fifth review, Double

Coin Holdings, Ltd. (“Double Coin”), which is not a party to this case. See AR5 Final Results,

80 Fed. Reg. at 20,199. Double Coin challenged the Department’s assigning it the 105.31% rate

in the fifth administrative review, a rate that was based in part on the application of facts

otherwise available and an adverse inference. See China Mfrs. All., LLC v. United States, 43 CIT

__, __, 357 F. Supp. 3d 1364, 1379–80 (2019).

       Commerce initiated the eighth review of the Order by notice (“Initiation Notice”) in

November 2016. See Initiation of Antidumping and Countervailing Duty Administrative

Reviews, 81 Fed. Reg. 78,778, 78,783 (Int’l Trade Admin. Nov. 9, 2016) (“Initiation Notice”).

The eighth review pertained to entries of subject merchandise made during the period of review

(“POR”) of September 1, 2015 through August 31, 2016. Id.

       Commerce published the preliminary results of the eighth review (“Preliminary Results”)

on October 10, 2017, selecting two companies, GTC and Weihai Zhongwei Rubber Co., Ltd.

(“Zhongwei”) for individual examination as “mandatory” respondents. Certain New Pneumatic

Off-the-Road Tires From the People’s Republic of China: Preliminary Results of Antidumping

Duty Administrative Review and Preliminary Rescission of New Shipper Review; 2015-2016, 82

Fed. Reg. 46,965, 46,966 (Int’l Trade Admin. Oct. 10, 2017) (“Prelim. Results”). In the
Consol. Court No. 18-00099                                                                Page 6

Preliminary Results, Commerce preliminarily concluded that GTC had not demonstrated its

independence from control by the government of China and, therefore, was ineligible for

separate rate status. Id. Incorporated by reference in the Preliminary Results is a “Decision

Memorandum” containing explanatory discussion. Decision Memorandum for Preliminary

Results of the Antidumping Duty Administrative Review and Preliminary Rescission of New

Shipper Review: Certain New Pneumatic Off-the-Road Tires from the People’s Republic of

China; 2015-2016 (Int’l Trade Admin. Oct. 2, 2017) (P.R. Doc. 258) (“Prelim. Dec. Mem.”).

       In the Final Results, Commerce concluded that GTC failed to demonstrate independence

from the PRC-wide entity and, on that basis, assigned GTC the PRC-wide rate of 105.31%.

Final Results, 83 Fed. Reg. 16,830–31. Commerce assigned Zhongwei an individually

determined weighted average dumping margin of 11.87% and assigned that rate to two separate

rate respondents (Qingdao Qihang Tyre Co., Ltd. and Shandong Zhentai Group Co., Ltd). Id. at

16,830.

                               D. Proceedings Before the Court

       Before the court is the Rule 56.2 motion for judgment on the agency record of GTC and

GTC North America. [GTC’s] Mot. for J. on the Agency R. & Br. of [GTC] in Supp. of Mot. for

J. on the Agency R. (Sept. 17, 2018), ECF Nos. 22 (conf.), 23 (public) (“GTC’s Br.”). Valmont

also moves for judgment on the agency record, adopting in full the arguments put forth by GTC

and GTC North America. Mot. of Consol. Pl. Valmont Indus., Inc. for J. on the Agency R. under

Rule 56.2 (Sept. 17, 2018), ECF No. 24. Defendant opposes plaintiffs’ motions. Def.’s Resp. to

Mots. for J. on the Agency R. (Dec. 17, 2018), ECF No. 28 (“Def.’s Br.”).

       Defendant has filed two requests for remand. Stating that “Commerce has identified the

need to reexamine certain evidence on the record related to the Chinese government’s
Consol. Court No. 18-00099                                                                   Page 7

involvement in GTC,” defendant requests “that the Court remand the matter to Commerce so that

Commerce can revisit the issue of GTC’s rate.” Def.’s Mot. for Voluntary Remand 1 (July 6,

2018), ECF No. 16. Plaintiffs do not oppose defendant’s request per se but maintain their

challenge to the Department’s separate rate decision in the entirety. GTC’s Resp. to Def.’s Mot.

for Partial Voluntary Remand (July 20, 2018), ECF No. 19 (“GTC’s Opp’n Br.”). In its brief

opposing plaintiffs’ motions, defendant also requests a remand to allow Commerce to reconsider,

in light of the decision of this Court in Thuan An Production Trading & Service Co. v. United

States, 42 CIT __, 348 F. Supp. 3d 1340 (2018) (“Thuan An I”), the explanation Commerce

provided in the Final Results of its statutory authority to apply what it terms “nonmarket

economy-wide” (or “NME-wide”) rates in proceedings such as this one, in which the exporting

country is considered by Commerce to be a nonmarket economy. Def.’s Br. 8–10. Plaintiffs

oppose this motion, urging that the court “instead render a decision addressing GTC’s argument

that Commerce had no authority to assign a PRC-wide AD rate to GTC.” Reply Br. of Pls. GTC

5 (Jan. 14, 2019), ECF No. 29 (“Reply of GTC”).

       The court held oral argument on June 27, 2019. Oral Arg. (June 27, 2019), ECF No. 42.

                                         II. DISCUSSION

                            A. Jurisdiction and Standard of Review

       The court exercises jurisdiction under section 201 of the Customs Courts Act of 1980,

28 U.S.C. § 1581(c) (2012), pursuant to which the court reviews actions commenced under

section 516A of the Tariff Act of 1930 (the “Tariff Act”), as amended 19 U.S.C. § 1516a (2012),
Consol. Court No. 18-00099                                                                    Page 8

including an action contesting a final determination that Commerce issues to conclude an

administrative review of an antidumping duty order.2

       In reviewing a final determination, the court “shall hold unlawful any determination,

finding, or conclusion found . . . to be 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

refers to “‘such relevant evidence as a reasonable mind might accept as adequate to support a

conclusion.’” SKF USA, Inc. v. United States, 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting

Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

                   B. Plaintiffs’ Motion for Judgment on the Agency Record

       Plaintiffs raise, essentially, four claims in contesting the Final Results.

       They claim, first, that Commerce violated the antidumping duty statute in determining,

and assigning to GTC, a rate for the PRC-wide entity. GTC’s Br. 8–27. They advance several

grounds for this claim. They maintain that in an antidumping duty proceeding (as opposed,

specifically, to a countervailing duty proceeding), the statute confines Commerce to assigning

respondents either an individually determined margin or an “all-others” rate, and that the rate

Commerce determined for the PRC-wide entity and assigned to GTC falls into neither of these

categories. Id. at 11–15. Plaintiffs also argue that the statute, while creating special rules in

19 U.S.C. § 1677(18) for identifying nonmarket-economy countries and in 19 U.S.C. § 1677b(c)

for determining normal value in antidumping cases involving such countries, applies the

“standard statutory rules” to Chinese entities for other determinations, including the rules for

determining U.S. prices and dumping margins, and “does not empower Commerce to write a

       2
         All citations to the United States Code herein are to the 2012 edition and all citations to
the Code of Federal Regulations herein are to the 2016 edition, except where otherwise
indicated.
Consol. Court No. 18-00099                                                                        Page 9

whole new type of AD margin from scratch for non-market economies.” Id. at 15–16.

Maintaining that Commerce was required to conduct an individual review of GTC, plaintiffs

characterize the rate Commerce assigned to the PRC-wide entity, and the PRC-wide entity itself,

as “fictitious.” Id. at 2, 11, 13, 52. Plaintiffs, in effect, challenge the legal basis for the

Department’s practice of determining and assigning a rate for the PRC-wide entity as applied in

the eighth review.

        Plaintiffs also direct certain arguments to the Department’s regulations. They argue that

a provision therein, 19 C.F.R. § 351.107(d) (“In an antidumping proceeding involving imports

from a nonmarket economy country, ‘rates’ may consist of a single dumping margin applicable

to all exporters and producers.”), even if presumed valid (which they do not concede), does not

describe what Commerce did in the eighth review, which was create a “third” kind of rate

applicable only to the PRC-wide entity. Id. at 26–27.

        Plaintiffs’ second claim is related to their first. They assert that even were Commerce

presumed to have authority to invent a new type of rate for the PRC-wide entity, it could not do

so by carrying over the 105.31% rate from prior reviews and applying it to GTC, which, they

maintain, fully cooperated in the review. Id. at 50–53. They argue that Commerce, even under

such a presumption, would have been required to calculate a new rate for the PRC-wide entity in

the eighth review and was required to do so using GTC-specific data. Id. at 50–52. They take

issue with the Department’s rationale for not reviewing the PRC-wide entity, which was that no

review of the PRC-wide entity was requested. Id. at 52. They argue that the Department’s

regulations did not allow them to request a review of the PRC-wide entity, and, further, that they

could not have requested such a review without conceding they were part of what they

characterize as a “fictitious” entity. Id. Further, they maintain that, in any event, the request for
Consol. Court No. 18-00099                                                                 Page 10

the review of GTC should have been deemed sufficient to require Commerce to conduct a review

of the PRC-wide entity, under which Commerce should have calculated an individual margin for

GTC based on GTC’s own data. Id. at 52–53.

       Plaintiffs claim, third, that Commerce erred in concluding that GTC had not put forth

information establishing independence from the Chinese government and, specifically, in

determining that the government of the PRC controls GTC’s export activities. Id. at 28–50.

They argue that in making these determinations, Commerce did not follow the correct criteria,

id. at 28–30, and reached a determination unsupported by substantial evidence on the record of

the review, id. at 31–50.

       Finally, plaintiffs claim that in assigning GTC the rate of 105.31%, Commerce

unlawfully refused to make adjustments for subsidies found in the parallel administrative review

of a countervailing duty order on OTR tires from China. Id. at 53–55.

C. Defendant’s Motion that Commerce Be Permitted to Reconsider Its Decision that GTC
                           Is Part of the “PRC-Wide Entity”

       Declining to depart from its analysis in the Preliminary Results, Commerce stated that

“[f]or the final results, we continue to find, based on record evidence, that GTC is not eligible for

a separate rate.” Final I&D Mem. at 19. Before the court, plaintiffs contest this determination

on various factual grounds. Rather than respond substantively to plaintiffs’ arguments,

defendant “respectfully requests a voluntary remand,” without confessing error, for Commerce to

reconsider and explain its determination as to whether GTC qualifies for a separate rate

according to the Department’s criteria. Def.’s Br. 10.

       Commerce stated in the Final I&D Mem. that “[t]o demonstrate independence from

government control and qualify for a separate rate, exporters must affirmatively demonstrate

both the de jure and de facto absence of government control over their export activities.” Final
Consol. Court No. 18-00099                                                                Page 11

I&D Mem. at 19. In the eighth review, Commerce concluded that GTC demonstrated de jure

independence from government control but failed to demonstrate de facto independence under a

four-factor test. Id. (footnote omitted).3 Commerce also found that, because GTCIE was a

wholly owned subsidiary of Guizhou Tyre Co., Ltd., it too was subject to government control.
Id. at 20. On that basis, Commerce considered the combined GTC entity subject to government

control, id. at 19, and assigned it the PRC-wide rate of 105.31%. Final Results, 83 Fed. Reg.

at 16,830.

       Commerce found that GTC’s largest shareholder, Guiyang Industry Investment (Group)

Co., Ltd. (“GIIG”), a state-owned enterprise, had increased its ownership share of Guizhou Tyre

Co., Ltd. from 25.20% during the period of the prior review to 25.33% during the POR and that

the next nine largest shareholders decreased their shares to only a combined 4.7% for the POR,

“further consolidating Guiyang SASAC’s position as the controlling party.” Final I&D Mem.

at 20 (footnote omitted).4 Noting that, based on several factors, it had “determined in the prior

       3
         The memorandum explains that “Commerce typically considers four factors in
evaluating whether a respondent is subject to de facto governmental control of its export
functions: (1) whether the export prices are set by, or subject to the approval of, a governmental
authority; (2) whether the respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the central, provincial, and local
governments in making decisions regarding the selection of its management; and (4) whether the
respondent retains the proceeds of its export sales and makes independent decisions regarding
disposition of profits or financing of losses.” Issues and Decision Memorandum for the
Antidumping Duty Administrative Review and New Shipper Review: Certain New Pneumatic Off-
the-Road Tires from the People’s Republic of China; 2015-2016, at 19 (Int’l Trade Admin.
Apr. 11, 2018) (P.R. Doc. 300) (“Final I&D Mem.”) (footnote omitted).
       4
         In using the term “Guiyang SASAC,” Final I&D Mem. at 20, Commerce referred to
China’s state-owned Assets Supervision and Administration Commission in Guiyang, China.
Commerce incorporated into the Final I&D Mem. by reference its earlier “Preliminary Separate
Rate Memorandum,” Certain New Pneumatic Off-the-Road Tires from the People’s Republic of
China: Preliminary Separate Rate Determination for GTC (Int’l Trade Admin. Oct. 2, 2017)
(P.R. Doc. 260) (“Prelim. Separate Rate Mem.”). Final I&D Mem. at 21. In the Preliminary
(continued . . .)
Consol. Court No. 18-00099                                                               Page 12

[seventh] review that GTC had failed to demonstrate the absence of de facto government control

over its export activities,” id. at 19, Commerce concluded, further, that GTC failed to present any

new information since the prior review that would require Commerce to reconsider its finding of

de facto government control over GTC’s export activities. Id. at 21.

       According to Commerce, record evidence from the prior review “demonstrated that GIIG

circumvented an inclusive board election process to elect members of GTC’s board through a

shareholder’s meeting that was not available to all shareholders.” Id. at 20. Commerce

concluded in that review that “[b]ecause we found that there was no ‘practical difference’

between the shareholder elections and GIIG ‘directly appointing board members by direct

decree,’ we determined that ‘GIIG appointed a majority of the members of GTC’s board of

directors as evidence in the voting records for the shareholder meetings.’” Id. (quoting an

“Issues and Decision Memorandum” incorporated by reference in to the AR7 Final Results).

Commerce also addressed the contention that shareholder voting protections in GTC’s Articles

of Association, such as cumulative voting and online voting, prevented GIIG from exercising de

facto control over the election of directors and selection of management. Id. Commerce found

that, due to a decrease in the relative holdings of other major shareholders in GTC, “GIIG’s

ability to exert de facto control over the management and operational decisions of GTC has been

strengthened through the dilution of shares by other shareholders during this POR in relation to

the prior POR.” Id. The evidence further demonstrated, according to Commerce, that GIIG

“selected the management and controlled the profit distribution for GTCIE.” Id. The Final I&D

                                                                                 (. . . continued)
Separate Rate Memorandum, Commerce found that the Guiyang SASAC owned 100% of
Guiyang Industry Investment (Group) Co., Ltd. (“GIIG”), Prelim. Separate Rate Mem. at 2; it
also found that, after Guiyang SASAC, the next nine largest shareholders previously held a
combined 33.99% share (as shown in GTC’s 2015 annual report), id. at 4.
Consol. Court No. 18-00099                                                                 Page 13

Mem. concluded that “Commerce continues to find that the de facto control over GTCIE’s

selection of management through GIIG and GTC, and GTCIE’s profit distribution, is indicative

of being a state-controlled entity and precludes GTC from eligibility for a separate rate.” Id.

       Before the court, defendant explains that “[o]ne factor that Commerce relied on in [its]

analysis was its finding that, GTC elected members of its board of directors ‘through a

shareholder’s meeting that was not available to all shareholders.’” Def.’s Br. 10–11 (quoting

Final I&D Mem. at 20). Before the court, plaintiffs call that factual finding into question,

explaining that “GTC’s shareholder meetings are always available to all shareholders who wish

to attend,” including the particular shareholders’ meeting that Commerce found was not open to

all shareholders. GTC’s Br. 34–35. Requesting a remand in this case, defendant explains that

because “Commerce’s understanding of such record evidence has the potential to impact the

analysis concerning whether to grant GTC a separate rate in the underlying review,” the

Department’s concern is “substantial and legitimate,” justifying a remand in this case. Def.’s

Br. 11 (quoting SKF USA Inc. v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001) (“SKF”)).

Plaintiffs do not oppose defendant’s request but maintain their challenge to the Department’s

separate rate decision in the entirety. See GTC’s Opp’n Br. 1–2.

       The court exercises discretion in considering a request for a remand. “[I]f the agency’s

concern is substantial and legitimate, a remand is usually appropriate.” SKF, 254 F.3d at 1029.

Agreeing that the Department’s concern regarding this issue is “substantial and legitimate,” the

court is entering an order that permits Commerce, if it wishes to do so, to reconsider its separate

rate analysis on the issue of government control of the GTC entity.

       If Commerce determines that GTC has rebutted its presumption of government control, it

must assign GTC, which Commerce selected as a mandatory respondent, an individual weighted
Consol. Court No. 18-00099                                                                  Page 14

average dumping margin. If Commerce decides that GTC has not rebutted the Department’s

presumption, it must address the other issues plaintiffs raise that are related to the Department’s

decision not to review GTC in the circumstances of the eighth review. As discussed in the

remainder of this Opinion and Order, these are issues Commerce did not address, or failed to

address adequately, in the Final Results.

    D. Defendant’s Request for a Remand on the Issue of Statutory Authority to Apply
                                  “NME-Wide Rates”

       In support of its request for a remand on the issue of statutory authority to apply NME-

wide rates, defendant states that “[t]he Court should grant the Government’s request for a

voluntary remand for Commerce to reconsider its explanation of its statutory authority to apply

NME-wide rates in light of this Court’s findings in Thuan An [I].” Def.’s Br. 5. The court grants

this request but, for the reasons discussed below, does not limit the remand order to the narrow

issue defendant identifies.

       The court rules that defendant’s justification for requesting a remand limited to a narrow

issue is unsatisfactory because defendant is seeking a remand order limited to the Department’s

crafting of a new or revised explanation for its current practice rather than a good faith re-

examination of the decision Commerce made in the Final Results not to review GTC and, as a

consequence, to assign GTC the rate for the PRC-wide entity that it carried over from the prior

review. Such a re-examination is necessary in response to the issues raised by plaintiffs’ claims

in this litigation. The court considers those issues to include those raised by plaintiffs’ claim that

the statute did not authorize Commerce to assign a PRC-wide rate and GTC’s related claim that

the 105.31% rate was not a rate that lawfully could be applied to GTC, even if GTC were

considered part of any PRC-wide entity. For the Final Results, Commerce addressed the issues

plaintiffs raised during the review, see Final I&D Mem. at 7–9, only superficially, relying largely
Consol. Court No. 18-00099                                                                     Page 15

on its own practice rather than an analysis of its statutory and regulatory authority, see Final

I&D Mem. at 11–12. Even absent a request from defendant, a remand would be required due to

the inadequacy of the Department’s explanation.

       In summary, plaintiffs claim that the Tariff Act did not permit Commerce to apply its

practice in the way that it did in the eighth review and, in any event, that doing so was

inconsistent in some respects with the Department’s own regulations. Some of the issues

plaintiffs raise are questions of first impression, i.e., ones the courts have not addressed

previously.5

       Contested in Thuan An I were the final results of the twelfth administrative review of an

antidumping duty order on certain frozen fish fillets from Vietnam. Thuan An I, 42 CIT at __,

348 F. Supp. 3d at 1342. Considering a plaintiff’s claim that Commerce lacked authority to

impose a Vietnam-wide rate in the final results because such a rate was neither an individual rate

nor an all-others rate, id. at __, 348 F. Supp. 3d at 1346–47, the opinion in Thuan An I noted that

defendant United States attempted to justify the Department’s action by relying upon the

Department’s regulation, 19 C.F.R. § 351.107(d) (“In an antidumping proceeding involving

imports from a nonmarket economy country, ‘rates’ may consist of a single dumping margin

applicable to all exporters and producers”) while still insisting that the Vietnam-wide rate is

neither an individual rate nor an all others rate. Id. at __, 348 F. Supp. 3d at 1348 & n.13. The

       5
         The Court of Appeals for the Federal Circuit (“Court of Appeals”) has reasoned that
statutory silence in 19 U.S.C. §§ 1673d and 1677e does not divest Commerce of “its broad
authority to devise alternate procedures to carry out the statutory mandate.” Diamond Sawblades
Mfrs. Coal. v. United States, 866 F.3d 1304, 1312 (Fed. Cir. 2017) (“Diamond Sawblades”). The
Court of Appeals rejected a plaintiff’s challenge to the Department’s application of the PRC-
wide entity rate when Commerce “based that rate on adverse facts available (‘AFA’).” Id. at
1310. Diamond Sawblades did not address certain questions presented by this case, including in
particular the question of whether Commerce had authority to decline to review GTC in specific
circumstances analogous to those of the eighth review of the Order.
Consol. Court No. 18-00099                                                                   Page 16

case held that the regulation does not “grant Commerce authority to create a new kind of rate;

Commerce may determine individual rates and an all-others rate.” Id. at __, 348 F. Supp. 3d at

1348 (citing 19 U.S.C. § 1673d(c)(1)(B)(i)(I)–(ii)). The opinion reasoned that these two types of

rates are the only two types of rates the statute authorizes for investigations, id. at __, 348

F. Supp. 3d at 1345–49, and that this principle applies with equal force to reviews, id. at __, 348

F. Supp. 3d at 1346 n.11 (citing Albemarle Corp. v. United States, 821 F.3d 1345, 1352

(Fed. Cir. 2016)).

       In Thuan An Production Trading & Service Co. v United States, 43 CIT __, 396
F. Supp. 3d 1310 (2019) (“Thuan An II”), this Court sustained the Department’s remand

redetermination, which offered a new explanation for the Department’s decision. Id. at __, 396

F. Supp. 3d at 1319. This Court noted in Thuan An II that on remand Commerce identified the

NME-entity rate in the underlying investigation as an individually investigated rate and specified

that this rate was revised in the tenth review of the antidumping duty order. Id. at __, 396

F. Supp. 3d at 1316. This Court reasoned that Commerce was under no obligation to review the

Vietnam-wide entity again in the twelfth review when it had not received a request to do so and

had not undertaken to self-initiate a review. Id. at __, 396 F. Supp. 3d at 1317–18. The Thuan

An opinions do not indicate that the plaintiff in that litigation contested the Department’s

conclusion that the plaintiff could have requested a review of the Vietnam-wide entity; as

discussed later in this Opinion and Order, plaintiffs in this case argue that the Department’s

regulations did not permit them to request a review of the PRC-wide entity. GTC’s Br. 50–53.

E. On Remand, Commerce Must Reconsider Its Decision Not to Review GTC and Thereby
            Decline to Assign GTC Its Own Individual Dumping Margin

       Plaintiffs’ claims raise issues well beyond defendant’s request for a voluntary remand.

As it did in the Thuan An litigation, Commerce must explain on remand whether Commerce
Consol. Court No. 18-00099                                                                  Page 17

considers the PRC-wide rate it assigned to GTC to be an individual dumping margin or,

alternatively, an “all-others” rate, and include its reasoning. But in light of the claims made in

this litigation, Commerce also must address on remand the larger question of whether, in the

circumstances of the eighth review, Commerce was (as plaintiffs argue) required to review GTC

and assign GTC, as a mandatory respondent, GTC’s own individual dumping margin, regardless

of any treatment Commerce accorded to what it regarded as the PRC-wide entity. That question

involves several issues that pertain to the Tariff Act and to the Department’s regulations.

       The Tariff Act requires generally that Commerce conduct a periodic review of a known

exporter or producer of subject merchandise “if a request for such a review has been received.”

19 U.S.C. § 1675(a)(1). Commerce nevertheless declined to review GTC, Final I&D Mem.

at 22, a decision plaintiffs challenge in this litigation, GTC’s Br. 50–53.

       The Act speaks directly to the issue of how Commerce is to determine margins for

exporters and producers for which a periodic review has been requested. In § 1677f–1(c), the

statute sets forth a “[g]eneral rule” directing that “[i]n determining weighted average dumping

margins under section 1673b(d) [applicable to the preliminary less-than-fair-value determination

in the preliminary investigation], 1673d(c) [applicable to the final less-than-fair-value

determination in the investigation] or section 1675(a) [applicable, as here, to reviews of an

antidumping duty order] of this title, the administering authority shall determine the individual

weighted average dumping margin for each known exporter and producer of the subject

merchandise.” Id. § 1677f–1(c)(1) (emphasis added). A related provision, 19 U.S.C.

§ 1673d(c)(1)(B)(i), directs Commerce, in an antidumping duty investigation, to determine “the

estimated weighted average dumping margin for each exporter and producer individually

investigated,” id. § 1673d(c)(1)(B)(i)(I), and “the estimated all-others rate for all exporters and
Consol. Court No. 18-00099                                                                 Page 18

producers not individually investigated,” id. § 1673d(c)(1)(B)(i)(II). As plaintiffs argue, see

GTC’s Br. 8–11, and as this Court has recognized, the statute authorizes for investigations only

these two types of rates, Thuan An I, 42 CIT at __, 348 F. Supp. 3d at 1346–49, a limitation this

Court has identified as applying with equal force to reviews, id. at __, 348 F. Supp. 3d

at 1346 n.11 (citing Albemarle, 821 F.3d at 1352).

       The statute sets forth an “[e]xception” applicable to the general rule requiring Commerce

to determine a weighted average dumping margin for each known exporter or producer.

19 U.S.C. § 1677f–1(c)(2). The exception applies only where there is a “large number of

exporters or producers involved in the investigation or review.” Id. Under this exception,

Commerce “may determine the weighted average dumping margins for a reasonable number of

exporters or producers by limiting its examination” to a statistically valid sample of “exporters,

producers, or types of products,” id. § 1677f–1(c)(2)(A), or to “exporters and producers

accounting for the largest volume of the subject merchandise from the exporting country that can

be reasonably examined,” id. § 1677f–1(c)(2)(B). In the eighth review, Commerce applied the

exception in § 1677f–1(c)(2) to limit its individual examination to one exporter/producer

(Zhongwei), chosen according to relative export volume. Final Results, 83 Fed. Reg. at 16,830

(citing Prelim. Results, 82 Fed. Reg. at 46,966). Commerce did not invoke this exception in

refusing to assign an individual weighted average dumping margin to GTC.

       In § 1677f–1(c), Congress addressed the circumstances in which Commerce may decide

not to examine individually a known exporter or producer of the subject merchandise for which a

request for review had been received. The provision does not authorize Commerce to decline to

review, as opposed to examine individually, a known exporter or producer. Rather, the statute

addresses the obligation to conduct a review in a related section, § 1675(a)(1) (directing that “the
Consol. Court No. 18-00099                                                                 Page 19

administering authority, if a request for such a review has been received … shall— … review,

and determine (in accordance with paragraph (2)) the amount of any antidumping duty.”

19 U.S.C. § 1675(a)(1). Paragraph (2) imposes the general rule (to which an exception is

provided in § 1677f–1(c)(2)) that Commerce must “determine—(i) the normal value and export

price (or constructed export price) of each entry of the subject merchandise and (ii) the dumping

margin for each such entry.” Id. § 1675(a)(2)(A).

       Interpreted according to plain meaning, the statute contemplates that Commerce, in

administering § 1677f–1(c), is to derive the margins it assigns to individually examined

exporter/producers from each exporter/producer’s own sales, and to derive the margins it assigns

to unexamined exporter/producers, or to unexamined sales transactions, from actual

examinations of other exporter/producers (or transactions) that it conducts in the review. In the

eighth review, Commerce did not assign GTC a rate determined in either of these two ways.

Instead, Commerce concluded that GTC was not under review at all. Prelim. Dec. Mem.

at 16-18. Commerce reasoned that GTC was part of a PRC-wide entity (having decided that

GTC failed to rebut its presumption of government control), id. at 17, and, further, that the PRC-

wide entity was not under review, no one having requested that the PRC-wide entity be

reviewed, id. at 18; Final I&D Mem. at 22.

       In the eighth review, Commerce apparently did not regard GTC as a known exporter or

producer that it was required to review. Instead, Commerce treated the PRC-wide entity as a

known exporter or producer that could be reviewed (although declining to review it) and

assigned it a carry-over rate from the prior review, even though the statute does not expressly

provide that such an “entity” qualifies as a “known exporter and producer of the subject

merchandise,” 19 U.S.C. § 1677f–1(c)(1), that Commerce is to review. Characterizing the PRC-
Consol. Court No. 18-00099                                                                     Page 20

wide rate as “fictitious,” GTC’s Br. 11, and characterizing the PRC-wide entity as “fictitious” as

well, id. at 52, plaintiffs challenge this practice as ultra vires. Commerce failed to explain for

the Final Results how the changing PRC-wide entity could be described as a “known exporter

and producer of the subject merchandise” within the meaning of 19 U.S.C. § 1677f–1(c)(1). In

fact, Commerce did not expressly characterize the PRC-wide entity as a known exporter or

producer of the subject merchandise. And at the time parties were authorized to request a

review, the composition of the “PRC-wide entity” was not known, as the composition of the

entity is subject to change in each review and determined definitively only upon completion of

the review. On remand, Commerce must address this issue of statutory interpretation and

respond to the argument plaintiffs make that the Tariff Act, while creating certain special

provisions for nonmarket-economy countries (most notably, in the determination of normal

value), did not create a special statutory mechanism applying to the method Commerce applied

in the eighth review. See GTC’s Br. 16.

        As the court has noted, the Department’s discussion of the treatment of the PRC-wide

entity as an exporter or producer to which a PRC-wide rate could be assigned was grounded

largely in existing practice rather than in specific citations to authority in the Tariff Act or its

regulations. See, e.g., Prelim. Results, 82 Fed. Reg. at 46,966; Final I&D Mem. at 11–12.

Applying that practice in the Final Results, Commerce, as discussed in further detail below,

identified only three known exporters or producers, one of which was GTC, as being components

of the PRC-wide entity for purposes of the eighth review. Final Results, 83 Fed. Reg. at 16,830

(citing Prelim. Results, 82 Fed. Reg. at 46,966 n.12).

        In the Initiation Notice for the review, Commerce stated that “[i]n proceedings involving

non-market-economy (‘NME’) countries, the Department begins with a rebuttable presumption
Consol. Court No. 18-00099                                                                  Page 21

that all companies within the country are subject to government control and, thus, should be

assigned a single antidumping duty deposit rate.” Initiation Notice, 81 Fed. Reg. at 78,779.

Commerce then added that “[i]t is the Department’s policy to assign all exporters of merchandise

subject to an administrative review in an NME country this single rate unless an exporter can

demonstrate that it is sufficiently independent so as to be entitled to a separate rate.”6 Id. In the

Preliminary Results, Commerce stated as follows:

               The Department’s policy regarding conditional review of the PRC-wide
       entity applies to these reviews. Under this policy, the PRC-wide entity will not be
       under review unless a party specifically requests, or the Department self-initiates,
       a review of the entity. Because no party requested a review of the PRC-wide
       entity in the AR [administrative review] or NSR [new shipper review], the entity
       is not under review and the entity’s rate (i.e., 105.31 percent) is not subject to
       change. Aside from the separate rate companies discussed above, the Department
       considers all other companies for which a review was requested, including the
       mandatory respondent GTC, to be ineligible for a separate rate based on
       information provided.

Prelim. Results, 82 Fed. Reg. at 46,966 (footnotes omitted). The Final Results indicated no

change in these determinations. See Final Results, 83 Fed. Reg. at 16,830.

       6
          It is unclear why Commerce described its practice as one of assigning the NME-wide
rate to “all exporters of merchandise subject to an administrative review in an NME country”
that it deems to have failed to rebut its presumption. Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 81 Fed. Reg. 78,778, 78,779 (Int’l Trade Admin.
Nov. 9, 2016) (“Initiation Notice”) (emphasis added). This appears to be inconsistent with the
Final Results, in which Commerce, rather than consider GTC to be “subject to review,” refused
to review GTC. Certain New Pneumatic Off-the-Road Tires From the People’s Republic of
China: Final Results of Antidumping Duty Administrative Review and New Shipper Review;
2015-2016, 83 Fed. Reg. 16,829, 16,830 (Int’l Trade Admin. Apr. 17, 2018) (citing Certain New
Pneumatic Off-the-Road Tires From the People’s Republic of China: Preliminary Results of
Antidumping Duty Administrative Review and Preliminary Rescission of New Shipper Review;
2015-2016, 82 Fed. Reg. 46,965, 46,966 & n.12 (Int’l Trade Admin. Oct. 10, 2017) (“Prelim.
Results”)).
Consol. Court No. 18-00099                                                                Page 22

       Commerce announced in the Initiation Notice that it had received requests for review of

ten exporters and producers.7 Based on timely withdrawals of review requests, Commerce

rescinded the review for three of the companies named in the Initiation Notice.8 In the

Preliminary Results, Commerce stated that “[t]he administrative review covers six exporters of

the subject merchandise.” Prelim. Results, 82 Fed. Reg. at 46,965. The six companies

remaining in the review after the partial rescission were Cheng Shin Rubber Industry Ltd.

(“Cheng Shin”), Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. (treated

by Commerce as a single exporter/producer, “GTC”), Qingdao Milestone Tyres Co., Ltd.

(“Milestone”), Qingdao Qihang Tyre Co., Ltd. (“Qihang”), Shandong Zhentai Group Co., Ltd.

(“Zhentai”), and Weihai Zhongwei Rubber Co., Ltd. (“Zhongwei”). Prelim. Results, 82 Fed.

Reg. at 46,965–66 & nn.3, 5.

       The same six companies remained in the review for the Final Results. Final Results,

83 Fed. Reg. at 16,830. They consisted of three respondents Commerce designated as separate

rate respondents and three to which it denied separate rate status. Id. The three separate rate

companies were Zhongwei (one of the two mandatory respondents), Qihang, and Zhentai. Id.

       7
         The ten companies listed in the Initiation Notice are Cheng Shin Rubber Industry Ltd.,
Guizhou Tyre Co., Ltd., Guizhou Tyre Import and Export Co., Ltd., Qingdao Milestone Tyres
Co., Ltd., Qingdao Qihang Tyre Co., Ltd., Shandong Zhentai Group Co., Ltd., Trelleborg Wheel
Systems (Xingtai) Co., Ltd., Weihai Zhongwei Rubber Co., Ltd., Weifang Jintongda Tyre Co.,
Ltd., and Zhongce Rubber Group Co., Ltd. Initiation Notice, 81 Fed. Reg. at 78,783. As
discussed herein, Commerce later decided to treat Guizhou Tyre Co., Ltd. and Guizhou Tyre
Import and Export Co., Ltd. as a single exporter/producer, see Prelim. Results, 82 Fed. Reg. at
46,965 n.3; therefore, nine companies can be considered to be those for which review was
requested.
       8
         Certain New Pneumatic Off-the-Road Tires From the People’s Republic of China:
Notice of Partial Rescission of the Antidumping Duty Administrative Review; 2015-2016, 82
Fed. Reg. 16,348, 16,348 (Int’l Trade Admin. Apr. 4, 2017). The companies listed in the notice
as those for which a request for review was withdrawn are Jintongda Tyre Co., Ltd., Trelleborg
Wheel Systems (Xingtai) Co., Ltd., and Zhongce Rubber Group Co., Ltd. Id.
Consol. Court No. 18-00099                                                                     Page 23

The other three were Cheng Shin, GTC (the other mandatory respondent), and Milestone. Id.

Commerce decided that GTC, Cheng Shin, and Milestone (a company Commerce characterized

as “non-responsive”) had not successfully rebutted the presumption of government control. Id.

Commerce received a request for review of each of these three companies. See Initiation Notice,

81 Fed. Reg. at 78,783. As noted above, Commerce calculated an individual weighted average

dumping margin of 11.87% for Zhongwei and also assigned that rate to Qihang and Zhentai.

Final Results, 83 Fed. Reg. at 16,830. Commerce assigned the China-wide rate of 105.31%,

carried over from the previous (seventh) and prior reviews, to Cheng Shin, GTC, and Milestone.
Id. at 16,831 & n.16 (citing AR5 Final Results, 80 Fed. Reg. at 20,199); see also AR7 Final

Results, 82 Fed. Reg. at 18,735 & n.16 (citing AR5 Final Results, 80 Fed. Reg. at 20,199).

       Commerce has not addressed the apparent contradiction under which the PRC-wide

entity, according to Commerce, was not under review, yet the only three exporter/producers it

designated as part of that entity in the eighth review all were the subjects of requests for

review—requests that Commerce, despite the statutory directives, believed it was not required to

honor. Plaintiffs argue that Commerce, regardless of its findings as to government control, was

obligated to determine an individual margin for GTC based on GTC’s sales. GTC’s Br. 50–53.

In the Final Results, Commerce failed to explain why its findings as to potential government

control over certain specified activities of GTC, if presumed valid, sufficed to allow Commerce

to refuse to review GTC under the controlling statutory and regulatory schemes, which do not

contain provisions addressing an NME-wide entity such as that reflected in the Department’s

practice.

       With respect to the statutory scheme, Commerce relied for support of its practice on

section 771(18)(B)(iv)–(v) of the Tariff Act, 19 U.S.C. § 1677(18)(B)(iv)–(v). This reliance is
Consol. Court No. 18-00099                                                                 Page 24

misplaced. Commerce reasoned that “[i]t is within our authority to employ a presumption of

state control in an NME country and place the burden on the exporters to demonstrate an absence

of central government control.” Final I&D Mem. at 11 (citing Sigma Corp. v. United States, 117
F.3d 1401, 1405–06 (Fed. Cir. 1997)). Commerce added that “[u]nder section 771(18)(B)(iv)-

(v) of the Act, this burden is reasonable, as it recognizes the correlation between NME

economies and government price control, resource allocation, and production decisions.” Id.

Because the statutory provision Commerce cites does not authorize Commerce to refuse to

review an exporter or producer for which a request for review was received, it is not reasonably

construed to grant Commerce authority to do what it did in this case. Instead, the provision

defines what is meant by the term “nonmarket economy country” as used in the Tariff Act,

19 U.S.C. § 1677(18)(A), and sets forth factors Commerce is to “take into account” in

determining whether a foreign country conforms to that definition, id. § 1677(18)(B). The

statutory purpose of designating a country as a nonmarket economy country is that the normal

value of that country’s exports is determined in a different way than it is for exports from other

countries. See 19 U.S.C. § 1677b(c). This purpose is revealed in the statutory definition of

“nonmarket economy country,” which is based upon the principle that sales of merchandise in an

NME country, not being based on market principles, do not reflect the fair value of the

merchandise.9

       9
           The statutory definition is as follows:

               The term “nonmarket economy country” means any foreign country that
       the administering authority [Commerce] determines does not operate on market
       principles of cost or pricing structures, so that sales of merchandise in such
       country do not reflect the fair value of the merchandise.

19 U.S.C. § 1677(18)(A) (emphasis added).
Consol. Court No. 18-00099                                                                   Page 25

       The Department’s reliance on Sigma Corp. to support its NME practice as applied in the

eighth review, Final I&D Mem. at 11, is also misplaced. Sigma Corp. involved a challenge

brought by a Chinese exporter, Guangdong Metals & Materials Import & Export Corporation

(“Guangdong”), and five U.S. importers, of iron construction castings from the PRC. Sigma

Corp., 117 F.3d at 1404. The importers contested the final results of an administrative review of

the antidumping duty order on the iron castings, “asserting that Guangdong was independent of

the national Chinese corporation, China National Metals and Minerals Import and Export

Corporation (‘China National’), and that Commerce had therefore erred in applying a country-

wide antidumping margin to Guangdong.” Id. at 1405. The Court of Appeals for the Federal

Circuit (“Court of Appeals”) upheld the Department’s employing a presumption of de jure and

de facto government control by an NME government (in that case, China) that a respondent must

rebut in order to obtain a separate rate and, upon a finding that Guangdong had not rebutted its

presumption, the Department’s adopting a “single country-wide margin” that would apply to all

exporters. Id. at 1405–07.

       The practice Commerce followed in the review at issue in Sigma Corp. is not the same

practice that it followed in the Final Results at issue in this case; to the contrary, it was markedly

different and, in an important respect, opposite. In the review at issue in Sigma Corp.,

Commerce individually reviewed Guangdong, the company it found not to have rebutted its

presumption, rather than refusing to do so on the ground that Guangdong was part of a PRC-

wide entity that Commerce declined to review. See Final Results of Antidumping Duty

Administrative Review: Certain Iron Construction Castings From the People’s Republic of

China, 57 Fed. Reg. 10,644, 10,644 (Int’l Trade Admin. Mar. 27, 1992) (“Castings”).

Commerce assigned Guangdong an individual margin (92.74%, a margin subsequently modified
Consol. Court No. 18-00099                                                                 Page 26

upon judicial review; see Sigma Corp., 117 F.3d at 1411), based on the surrogate value method

of calculating normal value for NME exporters provided for in 19 U.S.C. § 1677b(c). Castings,

57 Fed. Reg. at 10,648. Had Commerce followed in this case the practice it followed in Sigma

Corp., which the Court of Appeals affirmed, Commerce would have adopted one of the methods

plaintiffs are advocating in this case, i.e., assignment of an individual margin to GTC upon

review of the PRC-wide entity.

       Commerce also relied on Transcom, Inc. v. United States, 294 F.3d 1371 (Fed. Cir. 2002)

(“Transcom”), in support of the NME practice it employed in the eighth review. Final I&D

Mem. at 11–12. Transcom held that Commerce permissibly could apply a rate based on “best

information available,” imposed under the previous version of 19 U.S.C. § 1677e, to Chinese

exporters and producers that did not rebut the Department’s presumption of government control.

Transcom, 294 F.3d at 1373. The practice Commerce followed in the review at issue in

Transcom also differed from the practice Commerce applied in the review at issue in this case.

In the review under which the Transcom litigation arose, Commerce placed the PRC-wide entity

under review, which it declined to do in this case. Id. at 1382 (“[B]ecause some of the

companies specifically named in the seventh administrative review did not establish their

independence from the state-controlled entity, Commerce regarded the state-controlled entity as

part of the review.”). Moreover, this case raises statutory and regulatory issues, as discussed in

this Opinion and Order, that were not adjudicated in the Transcom litigation.

       Regarding the regulatory scheme, the Department’s practice pertaining to an NME-wide

entity, as applied in the eighth review, is not provided for in the Department’s regulations and, to

the contrary, receives no specific mention in those regulations. In 19 C.F.R. § 351.107(d), the

regulations provide that “[i]n an antidumping proceeding involving imports from a nonmarket
Consol. Court No. 18-00099                                                                Page 27

economy country, ‘rates’ may consist of a single dumping margin applicable to all exporters and

producers.” This regulation does not describe the current Commerce practice, under which only

some Chinese exporters and producers (not identified definitively until the review is completed)

are subjected to the PRC-wide rate. Plaintiffs make this point in their brief. See GTC’s Br.

17-18. Another provision in the regulations, 19 C.F.R. § 351.401(f) (the “collapsing”

regulation), authorizes Commerce, in defined circumstances, to treat affiliated producers as a

single producer. Although deciding that GTC, Cheng Shin, and Milestone were part of the PRC-

wide entity in the eighth review, Final Results, 83 Fed. Reg. at 16,830, Commerce did not

explicitly find that these three companies were “affiliated” with each other (and to the contrary

decided that GTC was legally (“de jure”) independent from the government of China, see Final

I&D Mem. at 12–21), nor did it decide that the criteria of the collapsing regulation had been

satisfied.10 Even were Commerce to have decided that GTC, Cheng Shin, and Milestone should

be collapsed according to § 351.401(f), the effect under that regulatory provision would not have

been that Commerce could decline to review them.

       While in this case, as in the review that was the subject of Thuan An I and II, Commerce

declined to review the PRC-wide entity and concluded that no party requested a review of that

entity, see Final I&D Mem. at 22, plaintiffs raise an issue not addressed in either of the Thuan An

opinions. That issue is whether the plaintiffs in this action validly could have requested a review

of the PRC-wide entity under the Department’s regulations. GTC’s Br. 51–53. Plaintiffs

       10
         During the eighth review, Commerce summarized an argument made by the petitioners
by recounting that the petitioners argued that “Commerce’s single-entity NME practice is
analogous to its collapsing practice: in both cases, Commerce finds it necessary to treat multiple
companies as a single entity for purposes of determining a dumping margin and preventing
manipulation of that margin.” Final I&D Mem. at 11 & n.68. Commerce did not respond to this
argument. See id. at 11–12.
Consol. Court No. 18-00099                                                                     Page 28

contend that the Department’s regulations did not allow them to do so. Id. at 52 (“Commerce

has expressly confirmed [that] ‘one exporter or producer may not request an administrative

review of another exporter or producer.’” (quoting Antidumping Duties; Countervailing Duties,

62 Fed. Reg. 27,296, 27,318 (Int’l Trade Admin. May 19, 1997))). Here, as in the Thuan An

litigation, Commerce has relied on its determination that no party requested a review of the PRC-

wide entity in support of its decision to assign GTC the 105.31% PRC-wide rate. Final I&D

Mem. at 22. But as the court discusses below, that reliance is not justified because the

Department’s regulations informed the plaintiffs that filing a request for a review of the PRC-

wide entity was not a course of action available to them.

        While the opinion in Thuan An does not indicate that the plaintiff in that case challenged

as unlawful the Department’s practice of reviewing the Vietnam-wide entity only if requested to

do so, plaintiffs in this case specifically are challenging that practice in this litigation, see

GTC’s Br. 50–53. They argue not only that they were unauthorized by the regulations to request

a review of the nonmarket economy-wide entity (the PRC-wide entity in this case) but also that

Commerce could have treated GTC’s request that it be reviewed in the instant proceeding as

effectively a request that the PRC-wide entity be reviewed “for purposes of recalculating the

PRC-wide rate in the underlying review.” Id. at 52.

        In 19 U.S.C. § 1675(a)(1), the Tariff Act provides that Commerce, on each 12-month

anniversary date of the publication of an antidumping duty order, is to conduct a review and

determine the amount of antidumping duty “if a request for such a review has been received.”

The Department’s regulations, in 19 C.F.R. § 351.213(b), specify who may request a periodic

administrative review of an antidumping duty order. The relevant regulations allow for a review

of an antidumping duty order to be made in writing by: (1) a domestic interested party or the
Consol. Court No. 18-00099                                                                 Page 29

foreign government of the country in which the subject merchandise was manufactured or from

which it was exported, who may request review only of specified individual exporters or

producers, 19 C.F.R. § 351.213(b)(1); (2) an individual exporter or producer covered by the

antidumping duty order, who may request review of itself but not of any other party, id.

§ 351.213(b)(2); and (3) an importer, who may request review of an exporter or producer of

subject merchandise that it imports, id. § 351.213(b)(3). As discussed below, none of these

categories authorized a plaintiff in this case (whether a producer, exporter, or importer of the

subject merchandise) to request a review of what Commerce terms an “NME-wide entity,” a type

of entity not mentioned in the regulation. See id. § 351.213(b).

       The Department’s regulation provides that requests for a review may be made in writing

by a “domestic interested party or an interested party described in section 771(9)(B) of the Act

(foreign government),”11 who may request review “of specified individual exporters or producers

covered by an order (except for a countervailing duty order in which the investigation or prior

administrative review was conducted on an aggregate basis), if the requesting person states why

the person desires the Secretary to review those particular exporters or producers.” Id.

§ 351.213(b)(1). The plaintiffs in this action, being neither domestic interested parties nor the

government of the PRC, had no right under this provision to request a review of the PRC-wide

entity. And even if it were presumed that GTC could submit a request for review on behalf of

the Chinese government, it could not request review of a nonspecific “entity.” The provision is

limited to requests for review of “specified individual exporters or producers.” Id.

       11
         Section 771(9)(B) of the Tariff Act defines the term “interested party” to include “the
government of a country in which [subject] merchandise is produced or manufactured or from
which such merchandise is exported.” 19 U.S.C. § 1677(9)(B).
Consol. Court No. 18-00099                                                                     Page 30

       The next paragraph in the regulation provides that “an exporter or producer covered by an

order (except for a countervailing duty order in which the investigation or prior administrative

review was conducted on an aggregate basis) may request in writing that the Secretary conduct

an administrative review of only that person.” Id. § 351.213(b)(2) (emphasis added). The

regulation makes no mention of an entity comprised of an unspecified group of exporters and

producers in an NME country over which Commerce, at the end of a review, determines to have

conducted certain export-related activities over which the government could have exerted control

or potential control. Plaintiffs Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co.,

Ltd. (treated as one exporter/producer by Commerce, “GTC”) could not invoke this provision to

request a review of unidentified individual members of the China-wide entity and GTC, not

being the China-wide entity itself, could not invoke this provision for the entire entity.12

       12
          Later in the eighth review, Commerce decided that GTC was included in the PRC-wide
entity but did not decide that GTC was the entity itself; to the contrary, Commerce found for the
Preliminary Results that GTC had de jure independence (but not de facto independence) from the
government. Decision Memorandum for Preliminary Results of the Antidumping Duty
Administrative Review and Preliminary Rescission of New Shipper Review: Certain New
Pneumatic Off-the-Road Tires from the People’s Republic of China; 2015-2016, at 15, 17 & n.86
(Int’l Trade Admin. Oct. 2, 2017) (P.R. Doc. 258) (“Prelim. Dec. Mem.”) (citing Prelim.
Separate Rate Mem.). At the time GTC could submit a request to be reviewed in the eighth
review, i.e., September 2016, see 19 C.F.R. § 351.213(b)(2), Commerce had not decided that
GTC was part of the PRC-wide entity; it did not do so until October 2017. Prelim. Dec. Mem.
at 17.

        Thus, as of the time Commerce published the Initiation Notice in November 2016,
Commerce still had not decided the question of GTC’s separate rate status as to the review to be
initiated. Initiation Notice, 81 Fed. Reg. at 78,799–80. Commerce decided GTC was part of the
PRC-wide entity in the previous (seventh) review, Certain New Pneumatic Off-the-Road Tires
From the People’s Republic of China: Final Results of Antidumping Duty Administrative
Review; 2014-2015, 82 Fed. Reg. 18,733, 18,735 (Int’l Trade Admin. Apr. 21, 2017), but that
decision was not determinative for the eighth review, for which Commerce indicated in the
November 2016 Initiation Notice that Commerce would be making the decision anew and
invited listed companies, including GTC, to apply for separate rate status. See Initiation Notice,
81 Fed. Reg. at 78,779–80.
Consol. Court No. 18-00099                                                                   Page 31

       The Department’s regulations further provide that “an importer of the merchandise may

request in writing that the Secretary conduct an administrative review of only an exporter or

producer (except for a countervailing duty order in which the investigation or prior

administrative review was conducted on an aggregate basis) of the subject merchandise imported

by that importer.” Id. § 351.213(b)(3) (emphasis added). Plaintiffs GTC North America and

Valmont, as importers of merchandise produced and exported by Guizhou Tyre Co., Ltd. and

Guizhou Tyre Import and Export Co., Ltd., respectively, were not authorized by this provision,

when read according to plain meaning, to request a review of the China-wide entity. Commerce

did not find as a fact that the merchandise imported by these importers was exported or produced

by anyone other than GTC (and had made no relevant finding as of the time review could be

requested), and the provision did not notify either of these importers, in the circumstances

presented here, that it could seek to place an NME-wide entity under review.

       As discussed above, this Court noted in Thuan An II that “as Commerce explains, its

current practice is to review the NME entity only when it receives a request to do so, or when it

chooses to self-initiate such a review.” Thuan An II, 43 CIT __, 396 F. Supp. 3d at 1317. In the

eighth review at issue here, Commerce relied upon the same practice, stating that “[i]t is

Commerce’s practice to review the China-wide entity only when requested.” Final I&D Mem.

at 22. In making this statement, Commerce cited a Federal Register notice, Antidumping

Proceedings: Announcement of Change in Department Practice for Respondent Selection in

Antidumping Duty Proceedings and Conditional Review of the Nonmarket Economy Entity in

NME Antidumping Duty Proceedings, 78 Fed. Reg. 65,963 (Int’l Trade Admin Nov. 4, 2013)

(“Change in Practice”).
Consol. Court No. 18-00099                                                                   Page 32

       Change in Practice announced that Commerce no longer would consider the “NME

entity to be ‘conditionally’ under review” in administrative reviews of antidumping duty orders

involving NME countries. Id. at 65,964. The document states that “[i]f interested parties wish to

request a review of the entity, such a request must be made in accordance with the Department’s

regulations.” Id. One difficulty here is that no such request by these plaintiffs could be made “in

accordance with” the regulations. Change in Practice did not amend, and did not state it was

amending, 19 C.F.R. § 351.213(b).13 In presuming that such a request for a review of the NME

entity could be “made in accordance with the Department’s regulations,” id., Change in Practice

is inconsistent with 19 C.F.R. § 351.213(b).

       In its response brief, defendant points to Change in Practice but argues, without further

elaboration, that “[u]nder Commerce’s regulations, interested parties must request a review of an

NME-wide entity prior to the initiation of an administrative review. See 19 C.F.R.

§ 351.213(b).” Def.’s Br. 12–13. Defendant’s argument does not refute plaintiffs’ argument that

the regulations did not allow these plaintiffs to request a review of the PRC-wide entity.

       While it could be argued that Change in Practice is valid as a relaxation of a regulatory

requirement, even without undergoing ordinary rulemaking and notice and comment procedures,

       13
            The Preliminary Results for the eighth review echoed Change in Practice:

               The Department’s policy regarding conditional review of the PRC-wide
       entity applies to these reviews. Under this policy, the PRC-wide entity will not be
       under review unless a party specifically requests, or the Department self-initiates,
       a review of that entity. Because no party requested a review of the PRC-wide
       entity in the AR [administrative review] or NSR [new shipper review], the entity
       is not under review and the entity’s rate (i.e., 105.31%) is not subject to change.

Preliminary Results, 82 Fed. Reg. at 46,966 (footnotes omitted). The Final Results indicated no
change in these determinations. See Final Results, 83 Fed. Reg. at 16,830; Final I&D Mem.
at 11.
Consol. Court No. 18-00099                                                                  Page 33

such an argument would not justify the Department’s basing its decision to apply the existing

PRC-wide rate to GTC on the fact that no request for review of the PRC-wide entity had been

received. On the issue of whether the plaintiffs in this case were placed on adequate notice of

their right to request a review of the PRC-wide entity, the regulations, not Change in Practice,

must control where, as here, the two are in conflict. Plaintiffs, who were entitled to rely on the

Department’s regulation indicating to them that they had no right to request such a review, were

adversely affected by the Department’s refusal to review GTC. An agency must act consistently

with its regulations where failure to do so would cause prejudice to an interested party. See, e.g.,

Jicarilla Apache Nation v. U.S. Dep’t of Interior, 613 F.3d 1112, 1121 (D.C. Cir. 2010).

Plaintiffs have demonstrated that Commerce acted inconsistently with its regulations and that, as

a result, they incurred obvious prejudice from the loss of any opportunity for GTC to obtain a

rate other than the carried-over PRC-wide rate. See id. Therefore, in the eighth review it was

impermissible for Commerce to assign the PRC-wide rate to GTC on the proffered justification

that parties (including these plaintiffs) had a right to submit a request for a review of the China-

wide entity but failed to do so. See Final I&D Mem. at 22 (citing Change in Practice, 78 Fed.

Reg. at 65,963).

          F. The Court Will Not Address Plaintiffs’ Remaining Claim at this Time

       Plaintiffs claim that in assigning GTC the rate of 105.31%, Commerce unlawfully refused

to make adjustments for subsidies found in the parallel administrative review of a countervailing

duty order on OTR tires from China. GTC’s Br. 53–55. The court considers it premature to

address this claim at this time because the issue raised by this claim may be mooted by the

remand redetermination the court is ordering. Plaintiffs will be in a position to raise this
Consol. Court No. 18-00099                                                                 Page 34

objection anew, if they consider it necessary, once that redetermination has been submitted and is

before the court.

                                  III. CONCLUSION AND ORDER

       On remand, Commerce may choose to reconsider its decision on whether it considers

GTC to have rebutted the Department’s presumption of de facto government control. If upon

reconsideration it decides to reverse its previous decision on that issue, then Commerce, having

selected GTC as a mandatory respondent, must calculate an individual margin for GTC.

       If Commerce decides not to reconsider its decision on de facto government control or

once again decides that GTC has not rebutted its presumption, then it must decide the question of

whether it is nonetheless required to review GTC. If Commerce decides that review of GTC is

required in the particular circumstances of the eighth review of the Order, it must proceed on

remand to determine an individual margin for GTC.

       Should Commerce, on remand, consider taking the position that it is not required to

review GTC, Commerce must be mindful that it is not permissible for it to rely on its earlier

rationale that no party requested a review of the PRC-wide entity, a rationale inconsistent with

the Department’s own regulations. Defendant has not responded to plaintiffs’ claims in a way

that demonstrates that Commerce lawfully could refuse to review GTC in the particular

circumstances of the eighth review, but because defendant has asked for a remand related to this

issue, the court will reserve any decision on this issue until it is presented with the Department’s

position and its reasoning therefor.

       In conclusion, upon consideration of the Final Results, defendant’s motion and request

for remand, all papers and proceedings had herein, and upon due deliberation, it is hereby
Consol. Court No. 18-00099                                                                Page 35

       ORDERED that Commerce shall reconsider the Final Results as directed by this Opinion
and Order and submit a new determination upon remand (“Remand Redetermination”) that
complies with this Opinion and Order; it is further

        ORDERED that Commerce shall submit its Remand Redetermination within 90 days of
the date of this Opinion and Order; it is further

        ORDERED that any comments of plaintiffs on the Remand Redetermination must be
filed with the court no later than 30 days after the filing of the Remand Redetermination; and it is
further

        ORDERED that any response of defendant to the aforementioned comments must be
filed no later than 15 days from the date on which the last comment is filed.

                                                      V7LPRWK\&6WDQFHX
                                                     Timothy C. Stanceu, Chief Judge

Dated: $XJXVW
      New York, New York