Court Opinion

ID: 3191344
Source: CourtListenerOpinion
Date Created: 2016-04-05 14:01:30.714378+00
Date Added: 2024-06-11T12:19:16.044072
License: Public Domain

Slip Op. 16-32

           UNITED STATES COURT OF INTERNATIONAL TRADE

SHANDONG RONGXIN IMPORT &
EXPORT CO., LTD.,

      Plaintiff,

v.
                                   Before: Nicholas Tsoucalas,
UNITED STATES,                             Senior Judge

      Defendant,                   Court No. 15-00151

AND

DIXON TICONDEROGA COMPANY,

      Defendant-Intervenor.

                        OPINION AND ORDER

[Commerce’s final results in antidumping administrative review
are remanded.]

                                   Dated: April 5, 2016

John J. Kenkel, Gregory S. Menegaz, J. Kevin Horgan, and Judith
Holdsworth, deKieffer & Horgan, PLLC, of Washington DC, for
plaintiff.

Robert M. Norway, Trial Attorney, Commercial Litigation Branch,
Civil Division, U.S. Department of Justice, of Washington DC, for
defendant. With him on the brief were Benjamin C. Mizer, Principal
Deputy Assistant Attorney General, Jeanne E. Davidson, Director,
Patricia M. McCarthy, Assistant Director, and Erica A. Hixon, Trial
Counsel. Of counsel on the brief was Amanda T. Lee, Office of the
Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington DC.

Felicia Leborgne Nowels and Sheryl D. Rosen, Akerman LLP, of
Tallahassee, FL, for defendant-intervenor.
Court No. 15-00151                                             Page 2

          Tsoucalas, Senior Judge:        Plaintiff, Shandong Rongxin

Import & Export Co., Ltd., (“Shandong”) contests Commerce’s Final

Results of the Antidumping Duty Administrative Review on Certain

Cased pencils from the People’s Republic of China (“PRC”), Certain

Cased Pencils From the PRC, 80 Fed. Reg. 26,897 (Dep’t Commerce

May 11, 2015) (Final Results of the Antidumping Duty Administrative

Review) (“Final Results”); Issues and Decision Memorandum for the

Final Results of Antidumping Duty Administrative Review: Certain

Cased Pencils from the PRC; 2012-2013, A-570-827, (Apr. 30, 2015)

(“I&D Memo”); Pl.’s Rule 56.2 Mot. for J. Upon the Agency R., Aug.

28, 2015, ECF No. 24 (“Pl’s Br.”).          Defendant, United States

Department of Commerce (“Commerce”), and Defendant-Intervenor,

Dixon Ticonderoga Company (“Dixon”), oppose Shandong’s Motion.

Def.’s Opp’n, Dec. 18, 2015, ECF No. 30; Def-Inter. Opp’n, Dec.

18, 2015, ECF No. 34.   For the following reasons, Commerce’s Final

Results are remanded.

                             BACKGROUND

          Shandong is an exporter of pencils from the PRC whose

pencils are subject to an Antidumping Duty Order.      Final Results,

80 Fed. Reg. at 26,897.      On December 20, 2013, Dixon filed a

request   for   administrative   review     of   Shandong.   Req.   for

Administrative Review, PR 1 (Dec. 20, 2013) ECF No. 27 (Sept. 4,
Court No. 15-00151                                                       Page 3

2015) (“Req.”).     Dixon’s request stated that “[a]s a United States

importer and manufacturer of subject merchandise, Petitioner is an

interested party under 19 U.S.C. § 1677(9) who may make this

request    for    administrative   review      pursuant    to    19    C.F.R.   §

351.213(b).” Id. at 1. The request was accompanied by a company

certification, signed by Dixon’s Chief Executive Officer (“CEO”),

Timothy Gomez, which stated that the information contained in the

submission is accurate.       Id. at 3.   On February 3, 2014, Commerce

initiated an administrative review of Shandong.                 I&D Memo at 2.

During    the    review,   Shandong   argued    that,     first,      Commerce’s

initiation of the review of Shandong was void ab initio, because

Dixon failed to claim that it was a domestic interested party,

that is, a U.S. manufacturer of pencils during the period of

review, and second, Shandong deserves a separate rate, because it

can demonstrate the absence of government control, both in law (de

jure) and in fact (de facto). Pl. Br. at 3, 20-37.

             In the Final Results, Commerce found that there is no

evidence “on the record that undermines or calls into question

Dixon’s certification [that it is an interested party].” I&D Memo

comment 2 at 9.
Court No. 15-00151                                               Page 4

                JURISDICTION AND STANDARD OF REVIEW

          The Court has jurisdiction over this action pursuant to

Section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c)

(2012), and Section 516A(a)(2)(A)(i) of the Tariff Act of 1930, 19

U.S.C. § 1516a(a)(2)(A)(i)(I) (2012). 1

          The Court will hold unlawful Commerce’s determinations

that are unsupported by substantial evidence on the record, or not

otherwise in accordance with law.     19 U.S.C. § 1516a(b)(1)(B)(i).

To determine whether Commerce's interpretation and application of

the statute is “in accordance with law,” the courts review the

statute to determine whether “Congress has directly spoken to the

precise question at issue.” Chevron U.S.A. Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 842 (1984). “To ascertain whether

Congress had an intention on the precise question at issue, we

employ the ‘traditional tools of statutory construction.’” Timex

V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998)

(citing Chevron, 467 U.S. at 843 n.9). The tools of statutory

construction “include the statute’s structure, canons of statutory

construction,   and   legislative   history.”   Id.   If   the    Court

determines that the statute is silent or ambiguous with respect to

1 Further citations to the Tariff Act of 1930 are to the relevant
portions of Title 19 of the U.S. Code, 2012 edition, and all
applicable amendments thereto.
Court No. 15-00151                                                       Page 5

the   specific    issue,    the   question   then   becomes    what    level   of

deference   is    owed     Commerce’s   interpretation,       the   traditional

second prong of the Chevron analysis. Chevron, 467 U.S. at 842-

43.   See United States v. Mead Corp., 533 U.S. 218, 228 (2001).

“Chevron    deference        is   afforded     to    Commerce’s       statutory

interpretations as to the appropriate methodology . . . .” Pesquera

Mares Australes Ltda. v. United States, 266 F.3d 1372, 1379 (Fed.

Cir. 2001).      Under Chevron, “if the statute is silent or ambiguous

with respect to the specific issue, the question for the court is

whether the agency’s answer is based on a permissible construction

of the statute.” Chevron, 467 U.S. at 843.                    A “permissible”

construction       under     Chevron    is    understood       in     terms    of

reasonableness; only reasonable interpretations will be upheld by

the Court. See Koyo Seiko Co., Ltd. v. United States, 36 F.3d 1565,

1573 (Fed. Cir. 1994)(“Chevron requires us to defer to the agency's

interpretation of its own statute as long as that interpretation

is reasonable.”).        To determine reasonableness, the Court looks to

the express terms of the statute, the objectives of the statute,

and the objectives of the statutory scheme as a whole.                Wheatland

Tube Co. v. United States, 495 F.3d 1355, 1361 (Fed. Cir. 2007).

            The Court will uphold Commerce’s determination unless it

is unsupported by substantial evidence on the record.                 19 U.S.C.
Court No. 15-00151                                                               Page 6

§ 1516a(b)(1)(B)(i).            “[S]ubstantial evidence is more than a mere

scintilla. It means such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.” Consol. Edison

Co.    of    NY   v.    NLRB,    305 U.S. 197,    229     (1938).       Moreover,

“substantial evidence” must be measured by the record as a whole,

“including whatever fairly detracts from the substantiality of the

evidence.” Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562

(Fed. Cir. 1984).             Commerce’s determination cannot be based on

“isolated tidbits of data which suggest a result contrary to the

clear weight of the evidence.” USX Corp. v. United States, 11 CIT
82, 84, 655 F. Supp. 487, 489 (1987). “[T]he substantial evidence

standard requires more than mere assertion of ‘evidence which in

and of itself justified [the . . . determination], without taking

into    account        contradictory     evidence       or     evidence   from    which

conflicting inferences could be drawn.’” Gerald Metals Inc. v.

United      States,     132 F.3d 716,    720    (Fed.    Cir.   1997)    (quoting

Universal Camera Corp. v. NLRB, 340 U.S. 474, 487 (1951)).

                                       DISCUSSION

              The   issue      the   court     must    first    address   is   whether

Commerce’s determination — that Dixon was a domestic interested

party with standing to request an administrative review — is

supported by substantial evidence and in accordance with law.                        If
Court No. 15-00151                                                    Page 7

Commerce’s determination was not supported by substantial evidence

and in accordance with law, there is no reason to reach the second

issue of whether Shandong deserves a separate rate.

            Each   year    during    the    anniversary     month    of     the

publication of an antidumping duty order, a domestic “interested

party” may    request     in   writing   that   the   Secretary   conduct   an

administrative review “if the requesting person states why the

person desires the Secretary to review those particular exporters

or producers.” 19 C.F.R. § 351.213(b)(1) (2013).              An interested

party means “a manufacturer, producer, or wholesaler in the United

States of a domestic like product.” 19 U.S.C. § 1677(9)(C)(2012).

            Commerce may presume standing, absent evidence to the

contrary.    See Zenith Electr. Corp. v. United States, 18 CIT 1145,

1149, 872 F. Supp. 992, 996 (1994) (citing Minebea Co. v. United

States, 984 F.2d 1178, 1181 (Fed. Cir. 1993)).             “[T]he burden of

production of evidence to rebut standing has been allocated by the

Federal Circuit to the party challenging standing.” Id. at 1150

(citing Minebea, 984 F.2d at 1181).

            “[T]he legislative history states that the ‘standing

requirements [should] be administered to provide an opportunity

for relief for an adversely affected industry and to prohibit

petitions filed by persons with no stake in the result of the
Court No. 15-00151                                                 Page 8

investigation.’”    Brother Indus. (USA), Inc. v. United States, 16
CIT 789, 793-94, 801 F. Supp. 751, 757 (1992) (citing S.Rep. No.

96–249, 96th Cong., 1st Sess. 63 (1979), U.S.Code Cong. & Admin.

News 1979, pp. 381, 449).

           Shandong argues that Dixon failed to make a claim that

it was a domestic producer during the period of review, and

therefore Dixon does not have standing to request an administrative

review. Pl.’s Br. at 10-11.      Shandong further argues that Dixon

implicitly claimed that Dixon manufactured pencils in China and

exported them to the U.S., pointing to Dixon’s claim that it was

a manufacturer of “subject merchandise” in the request for review.

Id. at 13; see also 19 U.S.C. § 1677(25) (subject merchandise means

“the class or kind of merchandise that is within the scope of an

investigation, a review, a suspension agreement, an order under

this subtitle or section 1303 of this title, or a finding under

the   Antidumping   Act,   1921.”)     An   interested   party   means   “a

manufacturer, producer, or wholesaler in the United States of a

domestic   like     product”   under    Section    1677(9)(C),     not   a

manufacturer of subject merchandise, as stated in Dixon’s request.

19 U.S.C. §1677(9)(C); Req. at 1.       Nevertheless, Shandong failed

to present this argument in its case brief at the administrative

level and therefore the court deems the argument waived.            Pl.’s
Court No. 15-00151                                                         Page 9

Admin. Case Br. at 15-16, PR 48 (Jan. 30, 2015), ECF No. 27 (Sept.

4, 2015) (“Pl.’s Admin. Case Br.”); See Husteel Co. Ltd. v. United

States, 39 CIT ___, ___, 77 F. Supp. 3d 1286, 1294 (2015).

             Commerce    contends     that    Shandong    “fails   to    cite   any

evidence that would undermine Dixon’s claim that it was a domestic

interested party.” Def.’s Opp’n at 8; I&D Memo at 9 (“there is no

evidence on the record that undermines or calls into question

Dixon’s certification.”). The court disagrees. During the review,

Shandong     provided    evidence      that     Dixon’s   affiliated      Chinese

exporter, Beijing Fila Dixon Stationary Company, Ltd., produces

Dixon’s pencils in China.       Certain Cased Pencils From the PRC, 78

Fed. Reg. 42,932 (Dep’t Commerce July 18, 2013) (Final Results of

Antidumping Duty Administrative Review and Determination to Revoke

Order   in    Part;     2010-2011);     Pl.’s    Admin.    Case    Br.    at    15.

Therefore, in light of the evidence Shandong provided, Commerce

may not presume standing. See Zenith, 18 CIT at 1149. 2                  Commerce

failed to adequately address Shandong’s argument in the I&D Memo.

I&D Memo at 9.

2 In Zenith, the Court found that Commerce did not abuse its
discretion by not conducting a wide-ranging investigation of
Zenith’s standing where Respondent produced a prior statement of
intent to move assembly to Mexico (emphasis added). Zenith, 18
CIT at 1149-50. Unlike in Zenith, here, Shandong provided
actual evidence that Dixon’s affiliate produces pencils in
China. Cf. id.
Court No. 15-00151                                                    Page 10

          Commerce argues that its determination is supported by

substantial   evidence,     because    Dixon’s       CEO,   Timothy    Gomez,

certified in writing that Dixon is a U.S. producer of pencils.

Def.’s Opp’n at 8; Req. at 3.         Nevertheless, Commerce failed to

explain how and why this certification trumps Shandong’s argument

to the contrary.    See Motor Vehicle Mfr. Ass’n of the U.S. v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (“[t]he agency

must examine the relevant data and articulate a satisfactory

explanation   for   its   action   including     a   ‘rational   connection

between the facts found and the choice made.’”) (quoting Burlington

Truck Lines Inc. v. United States, 371 U.S. 156, 168 (1962).

          Dixon asserts that Commerce’s standing determination was

supported by substantial evidence, because the antidumping duty

order on certain cased pencils from the PRC originates from a

petition filed in November 1992 by Dixon in which it was held to

be a U.S. producer; it has appeared in Sunset and Administrative

Reviews; and it receives Continued Dumping and Subsidy Offset Act

Disbursements. Def-Inter. Opp’n at 6-11.               Nevertheless, Dixon

fails to appreciate that “an agency's discretionary order [must]

be upheld, if at all, on the same basis articulated in the order

by the agency itself.”     Burlington Truck Lines, Inc., 371 U.S. at

169.   Commerce articulated a different basis for its decision on
Court No. 15-00151                                         Page 11

standing; therefore, the court cannot uphold Commerce’s decision

for the reasons proffered by Dixon.   See id.; I&D Memo at 9. 3

            The court does not reach the issue of whether Shandong

deserves a separate rate until the threshold issue of standing is

resolved.

3 “Department's Position: Dixon has certified that it is a domestic
producer of pencils.       Rongxin's [Shandong’s] assertion is
unsupported by factual information. Therefore, there is no
evidence on the record that undermines or calls into question
Dixon's certification. As a result, the Department finds no reason
to revisit Dixon's interested party status and determines that
Dixon is a domestic producer of pencils with standing to request
an administrative review.”
Court No. 15-00151                                             Page 12

                                ORDER

            For the reasons stated above it is hereby,

            ORDERED that this case is remanded to the Department of

Commerce,    International   Trade   Administration,     for   further

explanation or reconsideration as may be appropriate.          Commerce

shall have until May 5, 2016, to file its remand results.           The

parties shall have until June 6, 2016, to file objections, and the

government shall have until July 6, 2016, to file its response.

            SO ORDERED.

                                          /s/ Nicholas Tsoucalas
                                            Nicholas Tsoucalas
                                               Senior Judge

Dated: April 5, 2016
     New York, New York