Court Opinion

ID: 4182241
Source: CourtListenerOpinion
Date Created: 2017-06-29 17:02:44.723569+00
Date Added: 2024-06-11T07:47:17.504532
License: Public Domain

Slip Op. 17-76

               UNITED STATES COURT OF INTERNATIONAL TRADE

 AD HOC SHRIMP TRADE ACTION COMMITTEE,

       Plaintiff,
                                                       Before: Claire R. Kelly, Judge
 v.
                                                       Court No. 15-00279
 UNITED STATES,

       Defendant.

                                       OPINION

[Sustaining the final results of redetermination, pursuant to court remand, in the ninth
administrative review of the antidumping duty order on certain frozen warmwater shrimp
from the Socialist Republic of Vietnam.]

                                                                   Dated: June 29, 2017

Nathaniel Jude Maandig Rickard and Roop Kiran Bhatti, Picard, Kentz & Rowe, LLP, of
Washington, DC, for plaintiff.

Kara Marie Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for defendant. With her on the brief were
Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and
Patricia M. McCarthy, Assistant Director. Of Counsel on the brief was James H. Ahrens,
II, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department
of Commerce.

      Kelly, Judge: Before the court for review is the U.S. Department of Commerce’s

(“Commerce”) remand determination filed pursuant to the court’s order in Ad Hoc Shrimp

Trade Action Committee v. United States, 41 CIT __, 219 F. Supp. 3d 1286 (2017) (“Ad

Hoc Shrimp I”). See Final Results of Redetermination Pursuant to Court Remand, Jun.

7, 2017, ECF No. 66-1 (“Remand Results”).
Court No. 15-00279                                                               Page 2

       In Ad Hoc Shrimp I, the court remanded to Commerce the final results in the ninth

administrative review of the antidumping duty order on certain frozen warmwater shrimp

from the Socialist Republic of Vietnam (“Vietnam”) for redetermination of the surrogate

data selected to value the labor factor of production in this review. Ad Hoc Shrimp I, 41

CIT at __, 219 F. Supp. 3d at 1300. Specifically, the court remanded for Commerce to

explain or reconsider its methodology for demonstrating labor data to be aberrational, and

to explain or reconsider why the Bangladeshi labor data the agency selected is not

aberrational, in light of record evidence of systemic labor abuses in the Bangladeshi

shrimp industry, or to reconsider its selection. See id.

       For the reasons that follow, Commerce’s Remand Results comply with the court’s

order in Ad Hoc Shrimp I and accordingly are sustained.

                                     BACKGROUND

       The court assumes familiarity with the facts of this case as discussed in the

previous opinion ordering remand to Commerce, and here recounts the facts relevant to

the court’s review of the Remand Results. See Ad Hoc Shrimp I, 41 CIT at __, 219 F.

Supp. 3d at 1288–90.

       In the final determination of this administrative review, Commerce selected

Bangladesh as the primary surrogate country for valuing respondents’ factors of

production. Issues and Decision Memorandum for the Final Results, A-552-802, 46–55,

(Sept. 8, 2015), ECF No. 18-2 (“Final Decision Memo”). Over objections from Ad Hoc

Shrimp Trade Action Committee (“Ad Hoc Shrimp”), Commerce also selected labor wage
Court No. 15-00279                                                                    Page 3

rate data from the Bangladeshi shrimp industry to value the labor factor of production. Id.

at 46–55.

       Plaintiff, Ad Hoc Shrimp, commenced this action to challenge Commerce’s

decision to use labor wage rate data for the Bangladeshi shrimp industry, published by

the Bangladesh Bureau of Statistics (“BBS”), to value the labor factor of production in this

review. See Mem. L. Support Pl. Ad Hoc Shrimp Trade Action Committee’s USCIT Rule

56.2 Mot. J. Agency R. 15–39, Apr. 20, 2016, ECF No. 27. Ad Hoc Shrimp presented

evidence of systemic labor abuses throughout the shrimp industry in Bangladesh, which

Ad Hoc Shrimp alleged render the BBS labor data inherently unreliable and aberrational.

See id. at 22–28.      Defendant responded that Commerce’s determination that the

Bangladeshi data was the best available information was supported by substantial

evidence, as Plaintiff did not present “specific quantitative evidence” of aberration; that is,

Plaintiff did not present quantitative evidence establishing that “labor conditions in

Bangladesh depressed wage rates in Bangladesh.” Def.’s Resp. Opp’n Pls.’ Rule 56.2

Mots. J. Agency R. 23, Sept. 29, 2016, ECF No. 42 (“Def.’s Resp.”). Defendant and

Commerce emphasized that Plaintiff’s evidence did not allow the agency to conduct a

quantitative analysis of the data, as is its practice for assessing aberration. Id. at 16–20;

see Final Decision Memo at 49–54. Defendant alleged that, because a quantitative

analysis was not possible, Commerce reasonably concluded that Plaintiff had not met its

burden of proving aberration. Def.’s Resp. at 18–20.

       The court remanded for Commerce to: 1) clarify or reconsider its practice with

regard to how Plaintiff can demonstrate quantitatively that data is aberrational given its
Court No. 15-00279                                                                  Page 4

claims stem from alleged systemic labor abuses; and 2) explain why the Bangladeshi

wage rate data is not aberrational in light of record evidence of systemic labor abuses; or

if the data is aberrational why, it is nonetheless the best available information, or

reconsider its determination that the Bangladeshi data is the best available information.

Ad Hoc Shrimp I, 41 CIT at __, 219 F. Supp. 3d at 1300.

       Commerce filed the Remand Results on June 7, 2017. Commerce reconsidered

its requirement of a quantitative analysis for evaluating a claim of aberrational labor data,

concluding that a quantitative analysis is not reasonable where, as here, the petitioner

has presented evidence of systemic labor abuse. Remand Results at 8. Commerce

explained that, because “wages among economically comparable countries and across

industries often vary considerably,” it determined that “a quantitative comparison of data

across countries, or within a single country, does little to address whether or not a labor

value is ‘aberrational.’” Id. Commerce concluded that “the petitioner cannot reasonably

be expected to ‘demonstrate quantitatively’ that potential surrogate labor values are

aberrational when its claims stem from systematic labor abuses.”            Id.   Commerce

determined that, in light of the record here and the alternate data available, the

Bangladeshi wage rate data does not constitute the best available information for valuing

the labor factor of production in this review, id. at 10–11, ultimately selecting the Indian

wage rate data on the record instead. Id. at 10.

       Following publication of the Remand Results, Ad Hoc Shrimp filed comments in

support of the remand determination, noting “the absence of any challenge to the Remand

Results from any party to this proceeding” and requesting that the court sustain the
Court No. 15-00279                                                                         Page 5

Remand Results. Pl. Ad Hoc Shrimp Trade Action Committee’s Comments on Remand

Results 1–2, Jun. 12, 2017, ECF No. 67.

                      JURISDICTION AND STANDARD OF REVIEW

       The court has jurisdiction pursuant to Tariff Act of 1930, as amended, 19 U.S.C.

§ 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c) (2012),1 which grant the court authority to

review actions contesting the final determination in an administrative review of an

antidumping duty order. The court will uphold Commerce’s determination unless it is

“unsupported by substantial evidence on the record, or otherwise not in accordance with

law.” 19 U.S.C. § 1516a(b)(1)(B)(i). “The results of a redetermination pursuant to court

remand are also reviewed ‘for compliance with the court’s remand order.’” Xinjiamei

Furniture (Zhangzhou) Co. v. United States, 38 CIT __, __, 968 F. Supp. 2d 1255, 1259

(2014) (quoting Nakornthai Strip Mill Public Co. v. United States, 32 CIT 1272, 1274, 587

F. Supp. 2d 1303, 1306 (2008)).

                                          DISCUSSION

       To determine normal value for subject merchandise exported from a nonmarket

economy country, 2 Commerce uses surrogate values for the factors of production (“FOP”)

1
 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of Title 19
of the U.S. Code, 2012 edition.
2
  The term “nonmarket economy country” means any foreign country that 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). In
such cases, Commerce must “determine the normal value of the subject merchandise on the
basis of the value of the factors of production utilized in producing the merchandise . . . [together
with other costs and expenses].” 19 U.S.C. § 1677b(c)(1).
Court No. 15-00279                                                                           Page 6

“based on the best available information 3 regarding the values of such factors in a market

economy country or countries considered to be appropriate by the administering

authority.” 4     19 U.S.C. § 1677b(c)(1); see 19 C.F.R. §§ 351.408(a)–(c) (2015). 5

Commerce determines what data constitutes the best available information using criteria

developed through practice. 6 Qingdao Sea–Line Trading Co. v. United States, 766 F.3d

1378, 1386 (Fed. Cir. 2014). Commerce has a regulatory preference to value all FOPs

using data from a single surrogate country, 19 C.F.R. § 351.408(c)(2), and its current

practice is to value labor using industry-specific data from the primary surrogate country,

as published in Chapter 6A of the ILO Yearbook of Labor Statistics.                     Antidumping

Methodologies in Proceedings Involving Non Market Economies: Valuing the Factor of

Production, Labor, 76 Fed. Reg. 36,092, 36,093 (Jun. 21, 2011); see Final Decision

3
  As “best available information” is not statutorily defined, Commerce has discretion to determine
what data constitutes the best available information in a given case and to value the FOPs
accordingly. See QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011); Nation
Ford Chemical Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999) (Commerce has
considerable discretion in choosing the surrogate values that most accurately reflect the price that
the NME producer would have paid had it purchased the FOP from a market economy country).
This discretion is broad but is not unlimited; “the critical question is whether the methodology used
by Commerce is based on the best available information and establishes the antidumping margins
as accurately as possible.” Shakeproof Assembly Components v. United States, 268 F.3d 1376,
1382 (Fed. Cir. 2001).
4
 Commerce selects for each FOP a surrogate value from a market economy country that is
economically comparable to the NME country and a significant producer of the merchandise in
question. 19 U.S.C. §§ 1677b(c)(4)(A)–(B); 19 C.F.R. § 351.408(b) (2015).
5
    Further citations to Title 19 of the Code of Federal Regulations are to the 2015 edition.
6
  To determine what constitutes the best available information, Commerce evaluates the quality
and reliability of data sources from the countries offered to value respondents’ FOPs favoring data
that is: (1) specific to the input in question; (2) representative of a broad market average of prices;
(3) net of taxes and import duties; (4) contemporaneous with the period of review; and (5) publicly
available. See Import Admin., U.S. Dep’t Commerce, Non-Market Economy Surrogate Country
Selection Process, Policy Bulletin 04.1 (2004), available at http://ia.ita.doc.gov/policy/bull04-
1.html (last visited Jun. 26, 2017); see also Qingdao Sea–Line Trading Co. v. United States, 766
F.3d 1378, 1386 (Fed. Cir. 2014).
Court No. 15-00279                                                                 Page 7

Memo at 46. Where ILO rates are not available, Commerce’s preferred practice is to use

industry-specific labor wage rate data from the primary surrogate country. Final Decision

Memo at 46, 48.

       Commerce has acknowledged that aberrational values should not be used to value

FOPs. Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,366 (Dep’t

Commerce May 19, 1997). Where there is evidence that data is aberrational, Commerce

must address that evidence in order to demonstrate that the data is nonetheless the best

information available. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)

(noting that “[t]he substantiality of evidence must take into account whatever in the record

fairly detracts from its weight.”). Commerce’s usual practice for determining whether data

is aberrational is to require a quantitative analysis, comparing either data from

economically comparable countries or historical data from the country at issue to

determine if the data is unreliable or an outlier. See Remand Results at 7–8.

       In Ad Hoc Shrimp I, the court determined that Commerce had not addressed Ad

Hoc Shrimp’s evidence of alleged systemic labor abuses and thus had not reasonably

found the BBS labor data to be the best available information on the record. See Ad Hoc

Shrimp I, 41 CIT at __, 219 F. Supp. 3d at 1294–1300. The court remanded to Commerce

to clarify or reconsider its determination. Id., 41 CIT at __, 219 F. Supp. 3d at 1300.

       On remand, Commerce complied with the court’s order. Commerce reconsidered

its methodology for determining whether labor data is aberrational. Remand Results at

5–9. Commerce concluded that, due to the distinct nature of the labor FOP, a quantitative

analysis for assessing whether prospective surrogate labor values are aberrational is not
Court No. 15-00279                                                                     Page 8

reasonable. 7 Id. at 8. Thus, Commerce concluded that, due to the distinct nature of the

labor FOP, its “normal practice of determining if a surrogate value is ‘aberrational’ using

a quantitative analysis cannot, and does not, provide a path by which the petitioner can

demonstrate that the Bangladeshi wage rate data are aberrational, given its claim of

systemic labor abuses.” 8 Id. at 9.

       Commerce subsequently reconsidered its determination that the Bangladeshi BBS

data constitutes the best available information:

       Although the Department’s practice with respect to claims of aberration
       does not enable the petitioner to demonstrate quantitatively that the
       Bangladeshi data are aberrational in light of its claim, we acknowledge that
       additional considerations may affect a determination as to whether potential
       surrogate value data constitute the best available information. Given the
       Court’s concerns with respect to the evidence of labor abuses in
       Bangladesh provided by the petitioner, and given that there are no
       allegations of systematic labor abuses specific to the shrimp processing
       industries in certain other potential surrogate countries on the record, we
       have elected to conclude that the Bangladeshi wage rate is not the best
       available information on the record with which to value the respondents’
       labor FOPs.

Id. at 10. Commerce concluded that, notwithstanding the primary surrogate country

selection of Bangladesh, the Indian wage rate data on the record constituted the best

available information to value the labor FOP in this review. Id.

7
  Commerce determined that “a quantitative comparison of data across countries, or within a
single country, does little to address whether or not a labor value is ‘aberrational,’” because
“wages among economically comparable countries and across industries often vary
considerably.” Remand Results at 9. Commerce likewise determined that “the petitioner cannot
reasonably be expected to ‘demonstrate quantitatively’ that potential surrogate labor values are
aberrational when its claims stem from systematic labor abuses.” Id. at 8.
8
 Commerce did not indicate how a petitioner could demonstrate labor wage rate data to be
aberrational, when the claim is one of systemic labor abuses or otherwise.
Court No. 15-00279                                                              Page 9

      Commerce has complied with the court’s order. No party challenges Commerce’s

Remand Results, and the Remand Results are sustained.

                                  CONCLUSION

      In accordance with the foregoing, Commerce’s final determination on remand

complies with the court’s order and is sustained. Judgment will enter accordingly.

                                                /s/ Claire R. Kelly
                                               Claire R. Kelly, Judge

Dated:June 29, 2017
      New York, New York