Court Opinion

ID: 4163066
Source: CourtListenerOpinion
Date Created: 2017-04-25 18:07:13.61284+00
Date Added: 2024-06-11T14:11:34.121176
License: Public Domain

Slip Op. 17 - 48

           UNITED STATES COURT OF INTERNATIONAL TRADE

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AJINOMOTO NORTH AMERICA, INC.,     :

                         Plaintiff,:

                 v.                 :        Court No. 14-00351

UNITED STATES,                      :

                         Defendant.:
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                         Opinion & Order

[Plaintiff’s motion for judgment on the agency record,
 contesting surrogate-value determinations based thereon,
 granted in part; remanded to the International Trade
 Administration.]

                                             Dated: April 25, 2017

     Iain R. McPhie, Peter J. Koenig, and Nicholas Galbraith,
Squire Patton Boggs (US) LLP, Washington, D.C., for the plaintiff.

     Alexander O. Canizares, Trial Attorney, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, Washington,
D.C.; Aman Kakar, Attorney, Office of the Chief Counsel for Trade
Enforcement & Compliance, U.S. Department of Commerce, of counsel;
for the defendant.

          AQUILINO,   Senior   Judge:      This   action   challenges

determinations of the International Trade Administration, U.S.

Department of Commerce (“ITA”) sub nom. Monosodium Glutamate From

the People’s Republic of China: Final Determination of Sales at

Less Than Fair Value and the Final Affirmative Determination of

Critical Circumstances, 79 Fed.Reg. 58326 (Sept. 29, 2014), Public
Court No. 14-00351                                                      Page 2

Record Document (“PDoc”) 279 (“Final Determination”); Monosodium

Glutamate From the People’s Republic of China . . . : Antidumping

Duty Orders; and . . . Amended Final Determination of Sales at Less

Than Fair Value, 79 Fed.Reg. 70505 (Nov. 26, 2014), PDoc 270; and

Monosodium Glutamate From the People’s Republic of China: Second

Amended Final Determination of Sales at Less Than Fair Value and

Amended Antidumping Duty Order, 80 Fed.Reg. 487 (Jan. 6, 2015).

The plaintiff U.S. manufacturer of monosodium glutamate (“MSG”) and

petitioner below has interposed a motion for judgment on the agency

record   in    accordance   with   USCIT   Rule   56.2   on   its   complaint,

confirming jurisdiction of this court pursuant to 19 U.S.C. §§

1516a(a)(2)(A)(i)(II) and (2)(B)(i) and 28 U.S.C. §1581¥c¦.

              ITA is directed by statute, 19 U.S.C. §1677b(c)(1), to

seek surrogate values for the factors of production (“FOPs”) for

subject merchandise produced in or exported from a non-market

economy a la the People’s Republic of China (“PRC”). The plaintiff

alleges error in such valuations herein of corn, lignite, high-

protein scrap from sugar manufacture, and inland freight (including

alleged error in ITA’s rejection of factual information relating

thereto).
Court No. 14-00351                                                   Page 3

                                     I

          With   regard   to   the       corn   FOP,   ITA’s    preliminary

determination based it upon the actual weight of corn consumption

by “Meihua”1, the proceeding’s mandatory respondent.            See Prelim.

Analysis Memo (May 7, 2014), CDoc 109, at 7-8, 303.            For the Final

Determination, the agency used Meihua’s standard weight of corn

consumption rather than the actual weight. See Meihua Analysis Memo

for the Final Determination (Sept. 22, 2014), PDoc 257, at 5.           See

also Allegation of Ministerial Errors Memo (Nov. 20, 2014), PDoc

266, at 2.   The plaintiff argues this amounted to deviation from

ITA’s policy of calculating surrogate values based upon producers’

actual production experiences.

          Without conceding error, the defendant requests voluntary

remand in order to consider this argument in the first instance. As

its “concern” appears “substantial and legitimate”, see SKF USA

Inc. v. United States, 254 F.3d 1022, 1029 (Fed.Cir. 2001), the

request for that purpose can be, and it hereby is, granted.

      1
          “Meihua” consists of Langfang Meihua Bio-Technology Co.,
Ltd., Tongliao Meihua Biological SCI-TECH Co., Ltd., Meihua Group
International Trading (Hong Kong) Limited, Meihua Holdings Group
Co., Ltd., Meihua Holdings Group Co., Ltd., Bazhou Branch. See
Prelim. Decision Memo (May 1, 2014), PDoc 194, at 8-9.
Court No. 14-00351                                                    Page 4

                                      II

            The    plaintiff     challenges      ITA’s   reliance       upon

“coalspot.com” to value the lignite FOP by Meihua.           It argues that

those data are flawed because they (1) reflect “estimated prices,

not the required real prices”; (2) are derived from “Indonesian

coal reference prices”; (3) are export prices “while [agency]

precedent is to use domestic or import prices”, and (4) are not

clearly exclusive of taxes.         The plaintiff also argues ITA should

have used Indonesian import price data under HTS 2702.10 or similar

import data from other countries.

            Substantial evidence supports ITA’s decision to rely upon

coalspot.com, however.       It found that those data met each of the

factors of reliability it generally considers: they reflected a

broad   market    average,   were    publicly   available,    were   product

specific, were exclusive of duties, and were contemporaneous with

the period of investigation.2           Issues and decision memorandum

accompanying Final Determination (“IDM”), p. 25.             ITA considered

        2
          ITA’s practice is to test proposed FOP values to
determine if they reflect (1) a broad market average, (2) publicly
available information, (3) product specificity, (4) tax and duty-
free neutrality, and (5) contemporaneity with the period of
investigation or review. E.g., Notice of Final Determination of
Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater
Shrimp From the People’s Republic of China, 69 Fed.Reg. 70997 (Dec.
8, 2004), and accompanying issues and decision memorandum (“I&D
Memo”) at cmt 1.
Court No. 14-00351                                                     Page 5

the lack of clarity as to whether the data excluded taxes and

determined that they were nevertheless the best available record

information, based upon its consideration of all of the factors.

See id.

             The plaintiff argues that the coalspot.com data are

“estimates”, contending they are “based not on real prices”.

However, ITA found a notation on the coalspot.com printout in the

record to indicate that the prices therein “constitute coal prices

for spot sales”, i.e., prices based on actual sales in March 2014.

See Meihua’s Surrogate Country and Surrogate Value Cmts (April 7,

2014), PDoc       126, at Ex. 9, p. 5.

             Plaintiff’s position focuses primarily on ITA’s contrary

analysis in Certain Polyester Staple Fiber from the People’s

Republic of China, 78 Fed.Reg. 2366 (Jan. 11, 2013), I&D Memo (Jan.

4,   2013)   at    cmt.   1   (“Polyester   Staple    Fiber”),   a   previous

antidumping-duty investigation, asserting that using coalspot.com

is contrary to its valuation of Indonesian steam coal therein.             In

that matter, the agency calculated a surrogate value for steam coal

used to produce synthetic staple fibers.             See PDoc 145.    Noting

that it prefers actual transaction prices, ITA declined to use

prices sourced from the Indonesia Minister of Energy and Mineral

Resources of the Republic of Indonesia (ESDM), which “contains
Court No. 14-00351                                                   Page 6

information from international benchmark steam coal indexes and

certain   brand     name   prices,   rather    than   actual   transactions

involving parties in Indonesia . . . and some of the ESDM values

appear    to   be    derived    from   government      indexes   based   on

non-Indonesian reference values”.             Id. at 5-6. ITA thereupon

concluded that Global Trade Atlas data were the best information

available. Id.

           Here, the defendant responds that the agency did not

specifically consider coalspot.com in Polyester Staple Fiber and

that, although those data regarding lignite were sourced from

Indonesia’s Director General of Mineral and Coal, it is unclear

whether they are substantively equivalent to the ESDM data related

to steam coal in Polyester Staple Fiber.              The defendant thus

contends there is no clear basis to assume that ITA’s concerns

about the ESDM data would or should extend to the coalspot.com data

at bar.

           The plaintiff considers this dissembling, arguing that

the coalspot.com data suffer from precisely the same flaws as did

the pricing data ITA rejected in Polyester Staple Fiber, to wit,

the reported price is calculated "based on January 2013 HBA/HPB

Index”, the source is identified as “The Directorate General of

Mineral, Coal and Geothermal, Ministry of Energy and Mineral
Court No. 14-00351                                             Page 7

Resources” (i.e., ESDM), and HBA is defined as an average of “four

international   coal   indices”   (i.e.,   non-Indonesian   reference

values), including ICI 1, Platts 5900, New Castle Export Index, and

Global Coal New Castle Index.

          Be that as it may, notwithstanding the disadvantages of

the ESDM data identified in Polyester Staple Fiber as compared with

actual transactions, ITA did not declare that it would never use

international indexes and company-specific brand prices.      Suffice

it to state here that there are imperfections in the available data

of record, and it was not unreasonable for the agency to prefer

coalspot.com as sufficiently reliable when compared to other data.

The plaintiff suggests that ITA always prefers import prices,

however there is administrative precedent for using export prices

as the “best” information available, and the use of export prices

here was within its discretion. See, e.g., Certain Cut-to-Length

Carbon Steel Plate from Romania, 70 Fed.Reg. 12651 (March 15, 2005)

(final admin. review), and accompanying I&D Memo at cmt. 3.

          Similarly, ITA’s rationale as to why it did not use the

2012 Indonesian import data for HTS 2702.10 urged by the plaintiff

is supported by substantial evidence.      It noted that those data

were not contemporaneous with the period of investigation (indeed,
Court No. 14-00351                                                  Page 8

Indonesia apparently had no imports under HTS 2702.10 in 2013). The

defendant notes that, although not dispositive, contemporaneity of

data is an important factor when evaluating surrogate values. Def’s

Resp. at 19, referencing Certain Polyester Staple Fiber From The

People’s Republic of China, 75 Fed.Reg. 1336 (Jan. 11, 2010) and

accompanying I&D Memo at cmt. 1.

          Perhaps    more   tellingly,   the   lignite   imported    into

Indonesia in 2012 under HTS 2702.10 consisted in total volume to

the equivalent of a single shipment3 of 3.28 metric tons (MT), see

IDM at 26, which low volume is consistent with the fact that

Indonesia is a large domestic producer of that coal. See Meihua’s

Resubmission of Rebuttal Surrogate Country and Surrogate Value

Comments (April 30, 2014), PDoc 188, Ex. 8 (Indonesia is the second

largest producer of lignite). Given record evidence that that

nation produces approximately 160 million MT of lignite a year, it

was not unreasonable for ITA to rely upon broad and contemporaneous

data instead of a single shipment of 3.28 MT of coal made before

the period of investigation.

      3
          The plaintiff argues there is no indication in the import
data itself that these import(s) only constituted a “single
shipment” and that ITA identifies no basis in the record for
concluding that 3.28 MT of imports does not represent commercial
quantities, but this argument is over a tangential matter in the
determination that does not merit relief.
Court No. 14-00351                                                   Page 9

            The plaintiff suggests that ITA “could have” used coal

import data from other countries such as Thailand, Colombia, South

Africa, or Ecuador.       It contends that such secondary surrogate

country data may be used “where an input cannot be valued in the

selected surrogate country.” Pl’s Br. at 15.           The court, however,

cannot supplant a reasonable determination on the sufficiency of

the coalspot.com data that comports with the agency’s practice of

preferring to value all FOPs from a single primary surrogate

country    whenever     possible   in    accordance     with    19   C.F.R.

§351.408(c)(2).       IDM at 26.   See Jiaxing Bro. Fastener Co. v.

United States, 38 CIT ___, ___, 11 F.Supp.3d 1326, 1332–33 (2014),

aff’d, 822 F.3d 1289 (Fed.Cir. 2016).          Which is another way of

stating    that   the   possibility     of   drawing    two    inconsistent

conclusions from the evidence does not prevent an administrative

agency's approach from being supported by substantial evidence.

Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966).

            The plaintiff contends that ITA should have used pricing

data from other countries on the record as “benchmarks to assess

the accuracy of the Indonesian import values from 2012.” Pl’s Br.

at 16.    This argument appears to be raised for the first time now,

as it does not appear in case briefs before the agency. See Pet’s

Case Br. (July 31, 2014) at 12-14, PDoc 229; Pet’s Rebuttal Br.
Court No. 14-00351                                                    Page 10

(Aug. 7, 2014) at 1-8, PDoc 232. If so, it must be deemed waived

for lack of exhaustion at the administrative level.             See 28 U.S.C.

§2637(d).    See, e.g., Mittal Steel Point Lisas Ltd. v. United

States, 548 F.3d 1375, 1383-84 (Fed.Cir. 2008) (finding that a

party failed to exhaust its administrative remedies when it chose

not to comment on ITA’s draft remand results); Rhone Poulenc, Inc.

v. United States, 899 F.2d 1185, 1191 (Fed.Cir. 1990) (appellant

waived argument even though it was characterized as “simply another

angle to an issue” raised).       In any event, there appears to be no

contrary evidence of record that might have compelled ITA to employ

benchmarks to assess the accuracy of data that it had identified as

reliable by other means.

                                       III

            The   plaintiff    next     challenges    ITA’s    selection    of

Indonesian HTS 2303.10.9000 as the best available to determine the

surrogate value of high-protein scrap.          It argues that Indonesian

HTS 2303.20.0000 covering “waste of sugar manufacture” was the

correct classification to value that scrap, but that, because there

were no Indonesian imports in this classification during the period

of   investigation,   ITA     should    have   used   the     comparable   HTS

classification for Thailand. It further argues that ITA’s analysis
Court No. 14-00351                                                             Page 11

of the use of high-protein scrap in Meihua’s production process

“confuses inputs with outputs.”              Pl’s Br. at 18.        According to the

plaintiff, starch milk is the input for this production step, while

glucose, a form of sugar, is the output, and thus the high-protein

scrap by-product constitutes waste of “sugar manufacture.” Id. at

19.

              In    essence,    plaintiff’s         position      is   that    a     more

product-specific HTS category could have been used but was not.

Even assuming that other data existed that were more specific to

the product, that is insufficient to disturb the administrative

selection of the best available information based upon its weighing

of    all   relevant      factors   so     long    as   that     determination      is    a

reasonable choice.          See, e.g., Nation Ford Chemical Co. v. United

States,     166    F.3d    1373,    1377    (Fed.Cir.       1999)   (ITA     has    “wide

discretion     in    the    valuation      of     factors   or    production”).       The

plaintiff does not take issue with ITA’s conclusion that the

Indonesian HTS 2303.10.9000 classification meets the other four

factors that the agency typically considers.                     See IDM at 28.          In

particular, ITA found that that classification was representative

of    broad   market       averages,     publicly       available,     tax    and   duty

exclusive, and contemporaneous with the period of investigation.

Id.
Court No. 14-00351                                                 Page 12

           The defendant argues the product specificity factor

weighs in favor of the data ITA used and against those advocated by

the plaintiff, explaining that, unlike the Thailand HTS category

urged by the plaintiff, Indonesian HTS 2303.10.9000 is specific to

the primary surrogate country and is consistent with the agency’s

preference for primary surrogate country data to reduce distortion.

Def’s Resp. at 22, citing 19 C.F.R. §351.408(c)(2). Moreover, it

continues, ITA determined that Indonesian HTS 2303.10.9000 properly

applied to the high-protein scrap used by Meihua, based upon its

analysis of the record evidence regarding Meihua’s manufacturing

process.   Id., referencing IDM at 28.

           That appears to be the case.       The record shows that the

high-protein scrap in question is a byproduct that emerges in the

production of MSG.    See Meihua’s Section D Questionnaire Response

(March 10, 2014), CDoc 61, at 21 and Ex. D-1; Meihua Analysis Memo,

CDoc 226, at 5 and Attachment IV.            Based on the confidential

record, it was not unreasonable for ITA to use an HTS category that

includes both “residues of starch manufacture” and “other wastes of

sugar” to value the high-protein scrap, and the plaintiff does not

persuade from the record that the high-protein scrap can only be

classified as a “waste of sugar manufacture” under Indonesian HTS

2303.20.0000   or   that   the   glucose   Meihua   produced   constitutes
Court No. 14-00351                                                      Page 13

“sugar” under that tariff item. See Pl’s Br. at 18-19.                   ITA’s

“judgment call” that Indonesian HTS 2303.10.9000 was preferable to

other evidence is one that cannot here be overturned. See Lifestyle

Enterprise, Inc. v. United States, 751 F.3d 1371, 1378 (Fed.Cir.

2014) (“[w]hen all the available information is flawed in some way,

[ITA] must make a judgment call as to what constitutes the ‘best’

information”).

                                    IV

            On plaintiff’s challenge to ITA’s valuation of inland

freight, it preliminarily valued such freight using a rate from

Doing Business Indonesia 2013 (“DBI”), a World Bank report, based

on a distance of 14.42 kilometers (8.96 miles) from Jakarta center

to   that   city’s     commercial   shipping     port.   For      the    Final

Determination, the agency added to the record the distances from

several “periurban districts to the port of Jakarta” and, based on

the average thereof, it revised the inland freight calculation to

65.08   kilometers4.     ITA   claimed   that   the   propriety    of    those

        4
          IDM at 7.    These ITA obtained from the record of the
inland freight considered in Frozen Fish Fillets From the Socialist
Republic   of   Vietnam:  Final   Results   of   Antidumping   Duty
Administrative Review and New Shipper Review; 2011-2012 (April 7,
2014). The inland freight determination thereof was challenged on
other grounds and recently sustained sub nom. An Giang Fisheries
Imp. & Exp. Joint Stock Co. v. United States, 40 CIT ___, ___, 179
F.Supp.3d 1256, 1284 (2016).
Court No. 14-00351                                                    Page 14

additions was consistent with the DBI methodology because that

report states that the businesses responding to the survey are

located “in the periurban areas of the economy’s largest business

city.”       IDM at 7.

               The “periurban area” of Jakarta is a fuzzy concept.

Certainly, it is unclear from the record what that area actually

encompasses: the DBI study does not define the geographical ambit

of the term as applied to Jakarta, and the papers herein do not

clarify.      As it is unclear whether the distances ITA placed on the

record       are   actually   from   “periurban”   areas    of   Jakarta,    its

statement to that effect in its Freight Distance Memo dated August

14, 2014 is simply conclusory or ipse dixit.

               The fact that those distances were used in a different

proceeding is of no moment here.              In the final analysis, ITA’s

reliance upon the information it placed on the record, without

clarification that those areas are, in fact, “periurban” areas of

Jakarta,      does   not   amount    to   substantial   evidence5.    This   is

         5
          See, e.g., U.S. Magnesium LLC v. United States, 37 CIT
___, ___, 895 F.Supp.2d 1319, 1328 (2013).       Furthermore, even
assuming ITA could reasonably interpret that the “periurban area”
of Jakarta encompasses the locations and distances it placed on the
record, it is unclear whether they provide a representative sample
of “typical” exporters to the port of Jakarta, and plaintiff’s
lament in that regard that ITA’s average does not include any
distance from within the city of Jakarta itself is valid to the
                                                     (continued...)
Court No. 14-00351                                                         Page 15

particularly true of the Cianjur location, which is apparently in

a province that does not even border on the city of Jakarta.                   See

Pl’s Br. at 9.        In short, ITA has not met its burden to reasonably

select the “best available information” in setting the distance

used to calculate a value for inland freight. See 19 U.S.C.

§1677(c)(1)(B).        See also Blue Field (Sichuan) Food Industrial Co.

v. United States, 37 CIT ___, ___, 949 F.Supp.2d 1311, 1336 (2013)

(“[t]he court will uphold [ITA]’s surrogate value choices [only] if

the    agency    fairly    considered     record    evidence     when   choosing

surrogates,      so    that    a   reasonable     mind   could    accept    [it]s

findings”).

              Noted in passing here is plaintiff’s further argument

that regardless of whether the “periurban area” of Jakarta includes

both locations within Jakarta and in other jurisdictions, the TAB

Survey “makes clear” that the DBI report is based on data collected

only   from     business      located   “within    the   city    limits”,    i.e.,

collected only for companies “located in” or “operating in” the

         5
          (...continued)
extent ITA did not include the preliminary distance from the center
of Jakarta to its port in its average calculation. See Pl’s Br. at
9.
Court No. 14-00351                                             Page 16

city of Jakarta.6    However, it does not necessarily follow that

“located in” and “operating in” can only be interpreted as “within

the city limits”, as argued by the plaintiff, as opposed to ITA’s

“looser”   interpretation   of   such   terms   as   encompassing   the

“periurban area” of the city of Jakarta, which is consistent with

what the DBI survey claims to be based upon.

                                  V

           The plaintiff challenges ITA’s rejection of its August

28, 2015 submission of factual data for purposes of calculating

inland freight costs.   It argues that its submission consisted of

“factual information relating to distances from locations other

       6
          See Pet’s Distance Cmts, PDoc 248, at Ex. 1.         The TAB
Survey template provides the following definitions:

     DESTINATION: Company “ABC” located in «Survey_City» seeks
     to trade with «DB_tab_PrepopulationEconomyName»’s largest
     overseas trading partner via ocean transportation through
     its main port (in the case of landlocked countries the
     port is the most commonly used in a neighboring country).
     . . .
     COMPANY “ABC”:
     · operates in «Survey_City», and employs 60 workers or
     more;
     · is a private, limited liability company, registered and
     operating under the commercial laws of the country;
     · is domestically-owned with no foreign ownership;
     · exports over 10% of its sales to international markets;
     does not operate within an export processing zone or
     industrial estate with special export/import privileges.

See PDoc 248 at Ex. 1 (plaintiff’s emphasis).
Court No. 14-00351                                                        Page 17

than those included in [ITA]’s filing” that “fit squarely within

the scope” of ITA’s invitation for submissions and 19 C.F.R.

§351.301(c)(4).    Pl’s Br. at 19.

            Elaborating, the plaintiff argues that nothing in that

section 351.301(c)(4) precluded submission of alternative data to

calculate    freight.    It      points    out    that,     while    19   C.F.R.

§351.301(c)(3)(iv)      limits    a   party      from   placing     “additional,

previously    absent-from-the-record          alternative    surrogate      value

information” on the record to “rebut, clarify, or correct” factual

information placed on the record by another interested party,

section 351.301(c)(4) contains no such limitation in cases in which

data are placed on the record by the agency.

            The defendant contends ITA’s determination to reject the

submission was proper and consistent with regulation, and that the

plaintiff does not dispute that its August 28 proffer consisted of

an alternative to the information on the record.              See Pl’s Br. at

19 (data related to “distances from locations other than those

included in [ITA]’s filing”).             The defendant argues this “new

factual information” did not respond to the factual information

offered by ITA and that plaintiff’s objective was plainly to expand
Court No. 14-00351                                                  Page 18

the scope of the record and to persuade the agency to use such new

information and revise surrogate value accordingly.7

           The   plaintiff,    nonetheless,   asserts   that   19   C.F.R.

§351.301(c)(4) authorized its submission of alternative data. That

provision was codified in April 2013 as part of several rule

changes governing time limits for submitting factual information in

antidumping-duty and countervailing-duty proceedings.8         Among the

purposes of the changes, the plaintiff points out, was to “ensure

that [ITA] has sufficient opportunity to review submissions of

factual information.”    Definition of Factual Information and Time

Limits for Submission of Factual Information, 78 Fed.Reg. 21246,

21246 (April 10, 2013).       See id. at 21250.   They identified five

categories of factual information with associated time limits.          19

C.F.R. §351.301(c)(1)-(5).      Submissions of factual information to

value factors of production are due no later than 30 days before

       7
          The defendant emphasizes that the plaintiff used that
information to calculate a new surrogate value. See Distance
Comments, PDoc 247; Pet’s Resp. to Rejection Memo, PDoc 251.
       8
          See 19 C.F.R. §351.301.       “Factual information” for
purposes of this section is defined, in relevant part, as
“[e]vidence, including statements of fact, documents and data
placed on the record by [ITA], or, evidence submitted by any
interested party to rebut, clarify or correct such evidence placed
on the record by [ITA].” 19 C.F.R. §351.102(b)(21)(iv); See
subsection 351.301(a).
Court No. 14-00351                                                     Page 19

the scheduled date of the preliminary results of review.               Section

351.301(c)(3)(i). Under subsection (c)(3)(iv), an interested party

has “one opportunity to submit publicly available information to

rebut, clarify, or correct” factual information submitted to value

factors of production, but such party “may not submit additional,

previously      absent-from-the-record      alternative     surrogate     value

information”.         Similarly, and of more relevance here, section

351.301(c)(4) provides as follows:

      Factual information placed on the record of the
      proceeding by [ITA]. [ITA] may place factual information
      on the record of the proceeding at any time. An
      interested party is permitted one opportunity to submit
      factual information to rebut, clarify, or correct factual
      information placed on the record of the proceeding by
      [ITA] by a date specified by the Secretary.

             On the interpretation of 19 C.F.R. §351.301¥c¦ generally,

the   parties    argue    over   Husteel   Co.   v.   United    States,   which

considered      and   rejected   argument    over     whether   the   specific

provision of 19 C.F.R. §351.301(c)(1)(v) permitted parties to

submit alternative surrogate data.          39 CIT ___, ___, 98 F.Supp.3d

1315, 1341-42 (2015) (holding that a party’s submission of a

financial statement was a “substitute data source” and not “factual

information to rebut, clarify, or correct” for purposes of that

provision).
Court No. 14-00351                                                        Page 20

              As noted therein, “‘[r]ebuttal evidence’ is generally

understood to be ‘evidence offered to disprove or contradict the

evidence presented by an opposing party.’” 39 CIT at ___, 98

F.Supp.3d at 1341, quoting Black's Law Dictionary (10th ed. 2014).

The defendant here contends Husteel stands for the proposition that

a substitute data source does not constitute “factual information

to   rebut,    clarify,    or   correct”   previously      submitted      factual

information.      The plaintiff contends Husteel’s rejection of a

party’s information submitted per 19 C.F.R. §351.301(c)(1)(v) was

not because the rejected information was alternative surrogate-

value    information,     as    ITA   claims,   but    because    the   rejected

information did not relate to, and therefore did not “rebut”, the

information to which it purportedly responded.

              Plaintiff’s is the more persuasive characterization of

Husteel. In that case, the respondent NEXTEEL provided a breakdown

of its cost and sale information in a supplemental questionnaire

response. The petitioner then responded by submitting a “large

amount    of    new   factual    information”,        including   a     financial

statement, “purporting to ‘rebut, clarify or correct’” the evidence

submitted in the questionnaire response.                 39 CIT at ___, 98

F.Supp.3d at 1338.        The court found that the financial statement,

which ITA used to calculate constructed value (“CV”) profit, did
Court No. 14-00351                                          Page 21

not “disprove or contradict” the limited sales and cost information

in the questionnaire response and therefore did not constitute

“factual information to rebut, clarify or correct” that information

as required by the regulation.9

           In the matter at bar, however, there is no question, and

the defendant does not convincingly dispute, that the periurban

distance information submitted by the petitioner responded and

related directly to the information placed on the record by ITA. It

was, in short, intended to “rebut, clarify or correct factual

information placed on the record of the proceeding by [ITA]”, see

19 C.F.R. §351.301(c)(4), notwithstanding that it includes a “new”

surrogate-value calculation that can be characterized as such, but

it was intended as evidence contradicting ITA’s calculation.

           The defendant considers Baroque Timber Indus. (Zhongshan)

Co. v. United States, 35 CIT ___, ___, 925 F.Supp.2d 1332, 1349-50

       9
          39 CIT at ___, 98 F.Supp.3d at 1341-43.     Specifically,
the court noted:

     NEXTEEL was asked to break down its costs and sales by
     country of sale and product type. Little if anything in
     U.S. Steel's factual submission, and especially the
     evidence in Tenaris’s 2012 financial statement, disproves
     or contradicts NEXTEEL's answers to those questions.
     Rather, U.S. Steel's submission constituted a substitute
     data source that [ITA] could use to calculate CV profit.

Emphasis added.
Court No. 14-00351                                                         Page 22

(2013), instructive.        Considered therein was the meaning of the

phrase “factual information to rebut, clarify, or correct” in

section   351.301(c)(1)          of    the    regulation     governing     factual

information submitted in response to questionnaires. Rejecting the

respondent’s argument that any type of information may be provided

to   rebut,    clarify,      or       correct   information     under      section

351.301(c)(1), Baroque Timber sustained ITA’s interpretation of the

phrase in subsection 351.301(c)(1) as excluding new surrogate-value

data. That decision deferred to ITA’s interpretation of the former

regulation as prohibiting the introduction of new surrogate-value

data where it was silent on the question and ITA’s interpretation

was not “erroneous or inconsistent” with the regulation itself.

             Here, the plaintiff points out, and this court concurs,

that ITA’s interpretation is now “erroneous or inconsistent” with

regard to the new regulation because the new one is no longer

silent on the question.               Instead, the agency has adopted one

provision,    to    wit,   19     C.F.R.     §351.301(c)(3)(iv)    (information

submitted by parties), that expressly prohibits the submission of

“additional,        previously         absent-from-the-record         alternative

surrogate value information” as well as the use of new information

to value FOPs when submitted to rebut, clarify or correct such FOP

information,       while   the    provision     at   issue    here,   19    C.F.R.
Court No. 14-00351                                                           Page 23

§351.301(c)(4)       (information     submitted      by   ITA),    has       no   such

prohibition.        The   defendant    fails    to    explain     how    ITA      can

reasonably      interpret       the     prohibition         of      19        C.F.R.

§351.301(c)(3)(iv) to apply to 19 C.F.R. §351.301(c)(4) when the

agency expressly chose to include it only in subsection (c)(3)(iv).

             Furthermore, defendant's argument that interpreting the

regulation    to    permit   parties    to    submit      new    surrogate-value

information would defeat the purpose of encouraging the parties to

submit information within time limits is baseless.                 The argument

impermissibly begs the question of what the deadline is, because

the petitioner did, in fact, submit the information within the

deadlines:         parties   have   only     “one    opportunity”       to    submit

additional information in response to ITA’s placing information on

the record viz. 19 C.F.R. §351.301(c)(3)(iv) (“[a]n interested

party is permitted one opportunity to submit publicly available

information”), and parties will presumably do so.                 Additionally,

the logic of the argument falls short because parties will not know

at the time of the normal deadline whether such an opportunity will

be afforded in a given proceeding, and they therefore will have

every incentive to submit all relevant information by the original

deadline to ensure that it is considered. The defendant argues the
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petitioner    did   have   an   opportunity   to   submit    inland-freight

distance information at the onset when it submitted its initial

surrogate-value data due April 7, 2014, however the specific issue

of distances relevant to the “periurban area of Jakarta” does not

appear to have arisen until ITA placed its memorandum on the file

directly, with new information specific thereto.            ITA’s claim of a

procedural impediment in rejecting the petitioner’s submission,

rather than considering it in the context of information intended

to rebut, clarify or correct, was therefore in error.

                                     VI

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

on the agency record must be granted to the extent of remand to ITA

for reconsideration of the issues of (1) the appropriate corn FOP

weight and (2) the calculation of an inland-freight surrogate

value.   The results of this remand shall be filed on or before July

31, 2017, with any comments thereon due within 30 days of the

filing thereof.

             So ordered.

Dated:   New York, New York
         April 25, 2017

                                          /s/ Thomas J. Aquilino, Jr.
                                                   Senior Judge