Court Opinion

ID: 819479
Source: CourtListenerOpinion
Date Created: 2013-02-05 02:39:07.161081+00
Date Added: 2024-06-11T15:36:56.648790
License: Public Domain

Slip Op. 00-90

        UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________________
KOMPASS FOOD TRADING INTERNATIONAL,         :
HEARTLAND FOODS INC., NORTH                 :
EAST MARKETING CO., PORT ROYAL SALES, LTD. :
and UNIPRO FOODSERVICE INCORPORATED,        :
                                            :
          Plaintiffs,                       :
                                            :
J.A. KIRSCH CORP., MANDI FOODS, INC. and    :
SUMMIT IMPORT CORP.,                        :
                                            :
          Plaintiff-Intervenors             :
                                            :
               v.                           :
                                            :
THE UNITED STATES,                          :   Court No.
                                            :   98-09-02848
          Defendant,                        :
                                            :
               and                          :
                                            :
MAUI PINEAPPLE CO., LTD. and THE            :
INTERNATIONAL LONGSHOREMEN’S AND            :
WAREHOUSEMEN’S UNION,                       :
                                            :
          Defendant-Intervenors.            :
___________________________________________:

[ITA’s determination affirmed.]

                                       Dated: July 31, 2000

     Harris Ellsworth & Levin (Herbert E. Harris II and
Jeffrey S. Levin) for plaintiffs Kompass Food Trading
International, Heartland Foods Inc., North East Marketing Co.,
Port Royal Sales, Ltd. and Unipro Foodservice Incorporated.

     Harris Ellsworth & Levin (Herbert E. Harris II and
Jeffrey S. Levin) for plaintiff-intervenors J.A. Kirsch Corp.,
Mandi Foods, Inc. and Summit Import Corp.

     David W. Ogden, Acting Assistant Attorney General, David
M. Cohen, Director, Attorney, Commercial Litigation Branch,
CT. NO. 98-09-02848                                        PAGE 2

Civil Division, United States Department of Justice (Michele
D. Lynch), Cindy G. Buys, Attorney, Office of Chief Counsel
for Import Administration, for defendant.

     Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal,
David C. Smith, Jr. and Adam H. Gordon) for defendant-
intervenors Maui Pineapple Co., Ltd. and the International
Longshoremen’s and Warehousemen’s Union.

                             Opinion

      RESTANI, Judge:   This matter is before the court on a

Motion for Judgment Upon the Agency Record, pursuant to USCIT

Rule 56.2, brought by plaintiffs Kompass Food Trading

International, Heartland Foods Inc., North East Marketing Co.,

Port Royal Sales, Ltd. and UniPro Foodservice Incorporated

(collectively referred to herein as the “Kompass Group”) and

plaintiff-intervenors J.A. Kirsch Corp., Mandi Foods, Inc. and

Summit Import Corp. (collectively referred to herein as the

“Kirsch Group”).

      Under review are the results of the U.S. Department of

Commerce’s (“Commerce”) administrative review of the

antidumping duty order on Canned Pineapple Fruit from

Thailand, 63 Fed. Reg. 43,661 (Dep’t Commerce 1998) (notice of

final results and partial rescission of antidumping duty

admin. rev.) [hereinafter “Final Results”].    The Final Results

covered the period from July 1, 1996 through June 30, 1997.

Id.
CT. NO. 98-09-02848                                            PAGE 3

       Both the Kompass and Kirsch Groups contest Commerce’s use

of adverse facts available to Vita Food Factory Ltd. (“Vita”),

the Thai producer and exporter.     They further contend that

Commerce did not corroborate properly the margin it assigned

to Vita.     Commerce responds that it selected a margin based on

the adverse facts available in accordance with law.

                Jurisdiction and Standard of Review

       The court has jurisdiction pursuant to 28 U.S.C. §

1581(c) (1994).     In reviewing Commerce’s determination in

administrative reviews, the court will hold unlawful those

agency determinations which are unsupported by substantial

evidence on the record, or otherwise not in accordance with

law.     19 U.S.C. § 1516a(b)(1)(B) (1994).

I.     Application of Total Adverse Facts Available to Vita

                             Background

       Both the Kompass and Kirsch Groups import canned

pineapple fruit (“CPF”) from Vita, a producer and exporter of

CPF from Thailand.     Final Results, 63 Fed. Reg. at 43,663.

Because Vita did not participate in the underlying less than

fair value (“LTFV”) investigation of CPF from Thailand,

Commerce originally assigned it the “all others” rate of 24.64

percent.     See Canned Pineapple Fruit from Thailand, 60 Fed.

Reg. 36,775, 36,776 (Dep’t Commerce 1995) (notice of
CT. NO. 98-09-02848                                           PAGE 4

antidumping duty order and amended final det.)

[hereinafter“Final Determination”].    In this review, Maui

Pineapple Co. Ltd. and the International Longshoremen’s and

Warehousemen’s Union specifically requested an administrative

review of Vita.   Letter from Maui Pineapple Co. to Commerce

(July 31, 1997), at 2, P.R. Doc 6, Pl.’s App., Ex. 6, at 2.

     On August 29, 1997, Commerce sent Vita an antidumping

questionnaire and asked that it respond to parts A, B and C.

Letter from Commerce to Vita (Aug. 29, 1997), at 1, P.R. Doc

10, Pl.’s App., Ex. 10, at 1.    On January 2, 1998, Commerce

requested a supplemental questionnaire response to section A.

Letter from Commerce to Vita (Jan. 2, 1998), at 1, P.R. Doc.

87, Pl.’s App., Ex. 12, at 1.    Soon thereafter, Vita’s counsel

informed Commerce that it was withdrawing its representation

of Vita.   Letter from Willkie, Farr & Gallagher to Commerce

(Jan. 8, 1998), at 1, P.R. Doc. 90, Pl.’s App., Ex. 13, at 1.

Only after Commerce inquired as to whether Vita would continue

to participate in the review did Vita respond to Commerce.

Letter from Vita to Commerce (Jan. 12, 1998), at 1, P.R. Doc.

239, Def.’s App., Ex. 4, at 1.    Vita explained, without

specificity, that the difficult economic situation in Thailand

had adversely affected its ability to participate in the

review process.   Id.   Nevertheless, Vita indicated that it
CT. NO. 98-09-02848                                          PAGE 5

would attempt to answer Commerce’s requests without the

assistance of counsel.   Id.; Final Results, 63 Fed. Reg. at

43,664.

     Commerce sent Vita another request asking it to respond

to section D of the antidumping questionnaire because Commerce

had reasonable grounds to believe Vita made sales of the

subject merchandise below the cost of production (“COP”) in

Germany.   Letter from Commerce to Vita (Jan. 13, 1998), at 1,

P.R. Doc. 95, Pl.’s App., Ex. 15, at 1.    Commerce next sent a

letter requesting supplemental information for sections B and

C.   Letter from Commerce to Vita (Jan. 27, 1998), at 1, P.R.

Doc. 107, Pl.’s App., Ex. 16, at 1.   On the same day, Commerce

sent Vita a letter detailing the requirements for documents to

be submitted in this review because Vita no longer had

counsel.   Letter from Commerce to Vita (Jan. 27, 1998), at 1,

P.R. Doc. 114, Pl.’s App., Ex. 17, at 1.    Commerce also re-

sent its supplemental questionnaire for Section A and extended

the deadline for Vita to respond to it.    Id.   Finally,

Commerce sent a letter to Vita reminding it of the approaching

deadlines for all of the questionnaire responses.     Letter from

Commerce to Vita (Feb. 5, 1998), at 1, P.R. Doc. 125, Pl.’s

App., Ex. 18, at 1.   Vita never responded to any of these
CT. NO. 98-09-02848                                         PAGE 6

letters from Commerce.1   Final Results, 63 Fed. Reg. at

43,665.

     In the Final Results, Commerce used the adverse facts

available rate of 51.16 percent because Vita did not respond

to Commerce’s repeated requests for information.   Id. at

43,665, 43,673.   Both the Kompass and Kirsch Groups object to

Commerce’s use of adverse facts available as to Vita.

                           Discussion

     The Kompass and Kirsch Groups claim that Commerce should

have made a separate determination as to whether Vita

cooperated to the best of its ability in accordance with

Borden Inc. v. United States.   4 F. Supp.2d 1221, 1246 (Ct.

Int’l Trade 1998), aff’d sub nom. F. LLI de Cecco di Filippo

Fara S. Martino S.p.A. v. United States, 2000 U.S. App. LEXIS

14148 (Fed. Cir. 2000).   Commerce argues that it made an

adverse inference based on specific factual findings.

     1 Vita’s cooperation ended and it never responded after
Commerce wrote Vita that it had received a verified allegation
of third party sales at less than fair value. See Commerce’s
Memorandum to File (Jan. 8, 1998), at 1-3, P.R. Doc. 92, Pl.’s
App., Ex. 14, at 1-3 (using Vita’s Section B and C responses
to calculate COP for each product sold in Germany and finding
it likely that Vita sold similar product at prices below COP).
Before Commerce informed Vita of the COP investigation, Vita
had responded to Commerce’s queries. It even invited Commerce
to come to Thailand and inspect the documents in its Bangkok
office. Letter from Vita to Commerce, at 2, Def.’s App., Ex.
4, at 2. After Commerce informed Vita of the COP
investigation, however, Vita ceased communicating.
CT. NO. 98-09-02848                                          PAGE 7

Commerce repeatedly contacted Vita to send supplemental

responses, attempted to accommodate Vita’s pro se status and

provided additional instructions to Vita, all without a single

response from Vita.   Commerce contends that this evidence

supports its determination that Vita did not act to the best

of its ability and that adverse inferences were warranted. The

court agrees.

      The statutory scheme requires that Commerce first decide

whether the use of facts available is appropriate under 19

U.S.C. § 1677e(a) and then decide whether to apply adverse

inferences under 1677e(b).   See 19 U.S.C. § 1677e (1994).

Commerce correctly decided to use facts available based on the

requirements set forth in § 1677e(a)(2)(B).2   Next, Commerce

had to make a separate finding, supported by substantial

evidence, under 19 U.S.C. § 1677e(b) that Vita did not act to

the best of its ability to comply with Commerce’s requests.

See 19 U.S.C. § 1677e(b).3   The court has held that a “mere

2  19 U.S.C. § 1677e(a)(2)(B) provides for use of facts
available if:
     (2) an interested party or any other person . . .

           (B) fails to provide such information by the
           deadlines for submission of the information or in
           the form and manner requested[.]
3   19 U.S.C. § 1677e(b) states in relevant part:
      If the administering authority or the Commission (as the
                                                  (continued...)
CT. NO. 98-09-02848                                          PAGE 8

recitation of the relevant standard is not enough for Commerce

to satisfy its obligation under the statute.”     Ferro Union,

Inc. v. United States, 44 F. Supp.2d 1310, 1330 (Ct. Int’l

Trade 1999)(citation omitted).     Moreover, Commerce “must be

explicit in its reasoning” when applying adverse facts

available.   Id. at 1331.

     In five separate letters, Commerce made efforts to

accommodate Vita’s alleged difficulties and attempted to

elicit a response from Vita.     Final Results, 63 Fed. Reg. at

43,664.   Commerce extended a deadline, provided instructions

for submitting responses and even sent Vita a reminder notice

that the submissions were due.     Id. at 43,664-665.   Vita did

not respond and did not provide any explanation as to why it

was unable to do so.   Id.

     The Kompass and Kirsch Groups attempt a post hoc

rationalization of Vita’s conduct.     They argue that the severe

economic crisis in Thailand crippled Vita and prevented it

from responding.   The Thai economic crisis, however, likely

(...continued)
case may be) finds that an interested party has failed to
cooperate by not acting to the best of its ability to comply
with a request for information from the administering
authority or the Commission, the administering authority or
the Commission (as the case may be), in reaching the
applicable determination under this subtitle, may use an
inference that is adverse to the interests of that party in
selecting from among the facts otherwise available.
CT. NO. 98-09-02848                                           PAGE 9

would have affected all respondents in the review.     Commerce

emphasizes that two other respondents were not represented by

counsel but managed to respond to the questionnaires.       See,

e.g., Siam Fruit Canning Co. Supplemental Questionnaire

Response (Feb. 12, 1998), at 1, P.R. Doc. 139 (submitted to

Commerce without counsel); Prachuab Fruit Canning Co.

Supplemental Questionnaire Response (Feb. 3, 1998), at 1, P.R.

Doc. 118 (submitted to Commerce without counsel).     Vita, too,

had informed Commerce it would continue to participate despite

the economic difficulties.    If the situation worsened, Vita

should have informed Commerce and provided a proper

explanation.    See, e.g., 19 U.S.C. § 1677m(c)(1) (1994)

(requiring respondent to notify Commerce if it is unable to

submit information requested).

     The Kompass and Kirsch Groups also argue that Vita was a

first-time participant and Commerce should have made it clear

that ceasing communication would result in the use of adverse

inferences.    Commerce, however, repeatedly warned Vita that a

failure to provide information would result in the use of

facts available.    See Letter from Commerce to Vita (Jan. 2,

1998), at 2, Pl.’s App., Ex. 12, at 2 (notifying Vita that

facts available would be used if Vita did not respond to

supplemental questionnaire for section A); Letter from
CT. NO. 98-09-02848                                        PAGE 10

Commerce to Vita (Jan. 13, 1998), at 1, Pl.’s App., Ex. 15, at

1 (notifying Vita that failure to respond to Section D of

questionnaire would lead to use of facts available as set

forth in Section 776(b) of Act); Letter from Commerce to Vita

(Jan. 27, 1998), at 2, Pl.’s App., Ex. 17, at 2 (notifying

Vita that failure to respond to supplemental questionnaires

for sections B and C would result in use of facts available as

defined in glossary of original questionnaire).     Contrary to

the Kompass and Kirsch Groups’ assertions, Commerce attempted

to assist Vita as well as warn Vita of the consequences.       With

no response from Vita forthcoming, further assistance from

Commerce was not warranted.

      Accordingly, the court sustains Commerce’s finding that

Vita did not act to the best of its ability.

II.   Corroboration of Adverse Facts Available Rate

                             Background

      In the underlying LTFV investigation, Commerce assigned

Vita the “all-others” rate of 24.64 percent.     Final

Determination, 60 Fed. Reg. at 36,776.     In the Final Results

of this administrative review, Commerce assigned Vita a margin

of 51.16 percent.     Final Results, 63 Fed. Reg. at 43,673.

This margin represents the highest calculated margin from a

cooperative respondent, Siam Agro Industry Pineapple and
CT. NO. 98-09-02848                                         PAGE 11

Others Company (“SAICO”), in the original LTFV investigation.

Id. at 43,665.

                           Discussion

     The Kompass and Kirsch Groups contest the use of the

highest calculated margin in the underlying LTFV

investigation.   They assert that the margin is not relevant

because it does not reflect the difficulties of Vita's

situation.   Commerce responds that the rate assigned to Vita

is both corroborated and relevant.   It argues that it has used

a margin properly calculated from a fully cooperative

respondent from the underlying LTFV investigation.

Additionally, Commerce contends SAICO's business practices are

representative of the Thai pineapple industry.    The court

agrees.

      Pursuant to 19 U.S.C. § 1677e(c), Commerce must

corroborate any secondary information it relies on from

independent sources reasonably at its disposal.    19 U.S.C. §

1677e(c).4   According to the Statement of Administrative

     4 19 U.S.C. § 1677e(c) states:
        When the administering authority or the Commission
relies on secondary information rather than on information
obtained in the course of an investigation or review, the
                                                 (continued...)
CT. NO. 98-09-02848                                        PAGE 12

Action ("SAA"), “[c]orroborate means that the agencies will

satisfy themselves that the secondary information to be used

has probative value."    SAA accompanying the Uruguay Round

Agreements Act (“URAA”), H.R. Rep. No. 103-826(I) at 870

(1994), reprinted in 1994 U.S.C.C.A.N. 3773, 4199.

     In Ferro Union, this court instructed Commerce that the

margin selected has to be reliable and relevant.   44 F.

Supp.2d at 1335.   Furthermore, Commerce must use a margin that

bears a rational relationship to the respondent or the past

practices of the industry.   Id. at 1334-35 (citations

omitted).

     The Kompass and Kirsch Groups challenge Commerce’s use of

SAICO’s margin because it is not an attempt to find Vita’s

“true” dumping margin.   Once a respondent refuses to respond

to a questionnaire or does not supply Commerce with an

adequate explanation for refusing to respond, Commerce no

longer focuses on calculating the “true” margin but instead

must focus on determining an adverse margin that will induce

     4
     (...continued)
administering authority or the Commission, as the case may be,
shall, to the extent practicable, corroborate that information
from independent sources that are reasonably at their
disposal.
CT. NO. 98-09-02848                                           PAGE 13

cooperation in the future.

     Under the pre-URAA law, the Federal Circuit Court of

Appeals approved Commerce’s use of the highest margin from

prior proceedings as best information available (“BIA”).

Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190

(Fed. Cir. 1990) (affirming use of highest calculated margin

from prior administrative reviews as BIA for respondent who

provided deficient submissions); see also Mitsuboshi Belting

Ltd. v. United States, No. 93-09-00640, 1997 WL 118397, at *3

(Ct. Int’l Trade Mar. 12, 1997).     This court has recognized

that an uncooperative respondent cannot control the results of

the administrative process via its own unresponsiveness.

Mitsuboshi, 1997 WL 118397, at *3.     Moreover, the agency

relies on the common sense inference that the highest margins

are the most probative because the respondent did not provide

information to rebut this inference.     Id.

     The Kompass and Kirsch Groups next attempt to cast doubt

upon Commerce’s choice of SAICO’s margin by claiming that

depreciation of the baht is an indicator that Vita was less

likely to engage in LTFV pricing.     The record does not reveal

any evidence in support of this contention nor do the Kompass

and Kirsch Groups indicate that any record evidence supports
CT. NO. 98-09-02848                                          PAGE 14

their assertion.    On the contrary, record evidence indicates

that Vita may have engaged in LTFV pricing in Germany.

Commerce’s Memorandum to File, at 1-4, Pl.’s App., Ex. 14, at

1-4.

       Commerce also asserts that SAICO was a fully cooperative

respondent, representative of the Thai pineapple industry.

See Final Results, 63 Fed. Reg. at 43,665.     Commerce justifies

its finding based on two facts.     First, no record evidence

indicates that SAICO’s practices differed from the rest of the

Thai pineapple industry.    Id.   Second, the inclusion of

SAICO’s rate5 in the calculation of the “all others” rate in

the original LTFV investigation also supports the position

that SAICO was representative of the industry.6    Id.

       5
       The Kompass and Kirsch Groups challenge Commerce’s cost
of production methodology for calculating SAICO’s margin. The
Federal Circuit, however, affirmed Commerce’s cost of
production methodology. See Thai Pineapple Public Co. v.
United States, 187 F.3d 1362, 1369 (Fed. Cir. 1999).
       6
       Given that SAICO’s margin is rational and relevant, the
mere fact that it is three years old is an insufficient basis
to invalidate the margin. The cases that the Kompass and
Kirsch Groups cite for support to invalidate SAICO’s margin
contain facts that differentiate them from this case. In
Manifattura Emmepi S.p.A. v. United States, the court
invalidated the use of an eight year old calculated margin
that bore no relationship to respondent because respondent was
not in the market at the time and, after participating in the
prior review, had received a zero calculated margin. 16 CIT
619, 623-24, 799 F. Supp. 110, 114-15 (1992). In contrast,
Vita had received the “all others” rate of 24.64 percent in
                                                (continued...)
CT. NO. 98-09-02848                                         PAGE 15

     Finally, the Kompass and Kirsch Groups argue that Vita,

like Madhya in Stainless Steel from India, should receive the

“all-others” rate and not the highest calculated margin from

the original LTFV investigation.      See Stainless Steel Bar from

India, 64 Fed. Reg. 13,771, 13,774-776 (Dep’t Commerce 1999)

(giving Madhya the “all-others” rate because it responded to

Commerce’s questionnaires, but in an untimely fashion).         The

crucial difference between Madhya and Vita is that Madhya

responded to Commerce’s questionnaires and never ceased

communicating.   See id. at 13,774.     Vita, on the other hand,

never responded to Commerce’s five separate attempts to elicit

a response from Vita.

     Commerce gave Vita ample opportunity to demonstrate that

the all-others rate was still the appropriate rate.      Vita

either should have supplied Commerce with the information

requested or it should have provided a proper explanation for

its failure to participate further in the review.

     6
     (...continued)
the original LTFV investigation and its marked lack of
cooperation would have required a margin higher than the “all
others” rate to induce cooperation in subsequent reviews. In
Ferro Union, Commerce tried to rely on a margin that was eight
years old and most of the information used to calculate that
margin was based on best information available. 44 F. Supp.2d
at 1335. In this case, Commerce used a properly calculated
margin and the record did not reveal any evidence undercutting
its validity for this review.
CT. NO. 98-09-02848                                       PAGE 16

                             Conclusion

     For the foregoing reasons, the court affirms Commerce’s

use of adverse facts available and the margin Commerce

assigned to Vita.

                                    ___________________

                                       Jane A. Restani

Date:   New York, New York

        This 31st day of July, 2000.