Court Opinion

ID: 4316409
Source: CourtListenerOpinion
Date Created: 2018-09-28 13:01:19.561614+00
Date Added: 2024-06-11T14:45:03.169268
License: Public Domain

Slip Op. 18-130

               UNITED STATES COURT OF INTERNATIONAL TRADE

 HEZE HUAYI CHEMICAL CO., LTD.,

                       Plaintiff,

                v.

 UNITED STATES,                                       Before: Jane A. Restani, Judge

                       Defendant.
                                                      Court No. 15-00027
 CLEARON CORP. AND OCCIDENTAL
 CHEMICAL CORPORATION,

                       Defendant-Intervenors

                                    OPINION AND ORDER

[Commerce’s Final Results in the Administrative Review of Commerce’s antidumping duty
order on chlorinated isocyanurates from the People’s Republic of China are remanded for
Commerce to apply the average of the zero rates assessed against the mandatory respondents to
Heze Huayi Chemical Co., Ltd., for the 2012-2013 period of review.]

                                                                 Dated: September 28, 2018

      Gregory Menegaz, Alexandra Salzman, James Horgan, and John Kenkel, deKieffer and
Horgan, PLLC, of Washington, D.C., for Plaintiff Heze Huayi Chemical Co., Ltd.

       David D’Alessandris and Sonia Orfield of the United States Department of Justice, of
Washington D.C. With them on the were Joseph Hunt, Acting Assistant Attorney General,
Jeanne Davidson, Director, and Patricia McCarthy, Assistant Director. Of counsel was David
Richardson of the Department of Commerce, of Washington, D.C., for the Defendant.

      James Cannon, Jr., Jonathan Zielinski, and Ulrika Skitarelic Swanson, Cassidy Levy Kent
(USA), LLP, of Washington, D.C., for the Defendant-Intervenors Clearon Corporation and
Occidental Chemical Corporation.
Court No. 15-00027                                                                          Page 2

       Restani, Judge: This action challenges the final results of the U.S. Department of

Commerce (“Commerce”)’s administrative review of chlorinated isocyanurates (“chlorinated

isos”) from the People’s Republic of China (“PRC”) for the 2012-2013 period of review

(“POR”). See Chlorinated Isocyanurates from the People's Republic of China: Final Results of

Antidumping Duty Administrative Review; 2012-2013, 80 Fed. Reg. 4539 (Dep’t Commerce

Jan. 28, 2015) (“Final Results”); see also Decision Memorandum for the Final Results of

Antidumping Duty Administrative Review: Chlorinated Isocyanurates from the People's

Republic of China; 2012-2013, A-570-898, POR: 6/1/12-5/31/13 (Jan. 21, 2015) (“I&D Memo”).

Plaintiff Heze Huayi Chemical Co., Ltd. (“Heze”) asks the court to remand the case to

Commerce with instructions to assign Heze an antidumping rate based on an average of the zero

rates assigned to the mandatory respondents or else calculate an individual margin based on

record evidence. See Plaintiff Heze Huayu Chemical Co., Ltd. Memorandum in Support of

Motion for Judgment on the Agency Record at 30 (Apr. 6, 2015) (“Heze 56.2 Br.”). Defendant

United States (“the Government”) asks for a remand in the light of the intervening decision in

Albemarle Corp. v. U.S., 821 F.3d 1345 (2016). Defendants Supplemental Brief and Motion for

a Voluntary Remand at 6 (June 21, 2016) (“U.S. Supp. Br.”). Defendant-Intervenors Clearon

Corp. and Occidental Chemical Company (“Clearon and Occidental”) argue that the case should

be remanded to Commerce for it to re-open the record and make a determination. Supplemental

Brief of Clearon Corp. and Occidental Chemical Corporation at 5–6 (June 21, 2016) (“Clearon

Supp. Br.”). For the reasons stated below, the case is remanded to Commerce with direction to

assign a zero rate to Heze for the relevant period of review.
Court No. 15-00027                                                                           Page 3

                                       BACKGROUND

       On August 1, 2013, Commerce initiated an administrative review of the antidumping

duty (“AD”) order on chlorinated isos from the PRC covering the period of review (“POR”)

from June 1, 2012 through May 31, 2013. Decision Memorandum for the Preliminary Results of

the 2012–2013 Antidumping Duty Administrative Review: Chlorinated Isocyanurates from the

People’s Republic of China, A-570-898, POR: 6/1/12-5/31/13, at 2 (July 17, 2014) (“Prelim I&D

Memo”). Amongst a pool of five separate rate applications, Commerce selected the two largest

exporters as mandatory respondents–Hebei Jiheng Chemical Co., Ltd. (“Jiheng”) and Juancheng

Kangtai Chemical Co., Ltd. (“Kangtai”). Id. The third largest respondent–Heze Huayi–was

neither selected to be a mandatory nor a voluntary respondent, despite Heze’s requests to be

considered as such. See Id; Heze 56.2 Br. at 4–5; U.S. Resp. Br. at 4–5. Heze filed suit

challenging Commerce’s decision not to select it as a respondent in either capacity, while the

Government contended that this action was proper, in particular given Heze’s late submission for

individual consideration. See Heze 56.2 Br. at 8–17; Defendant’s Response to Plaintiff’s Rule

56.2 Motion for Judgment on the Agency Record (“U.S. Resp. Br.”) at 13–15. Clearon Corp. put

forth similar arguments to those of the Government with regards to the respondent selection

issue. See Response Brief of Clearon Corp. and Occidental Chemical Corporation (June 8,

2015) (“Clearon Resp. Br.”) at 7–13.

       In addition to the respondent selection claims, Heze challenged the assigned antidumping

duty rate. Heze 56.2 Br. at 17–27. In the light of the zero rate assigned to the mandatory

respondents, Heze contended that the 53.15% rate it was assigned was not supported by
Court No. 15-00027                                                                           Page 4

substantial evidence. Id. at 17–20.1 The Government and Clearon initially disagreed arguing

that it is Commerce’s “general rule” to exclude zero rates when determining the proper non-

respondent rate. U.S. Resp. Br. at 26; Clearon Resp. Br. at 14. In their initial briefs, Defendant

and Defendant-Intervenor also argued that this practice is consistent with the statute. U.S. Resp.

Br. at 26–27; Clearon Resp. Br. at 13–15.

       During the pendency of this action, the Federal Circuit issued its opinion in Albemarle

Corp. v. United States, 821 F.3d 1345 (2016). In that decision, the court held that normally

Commerce should average the zero or de minimus rates of mandatory respondents in

determining the rates of non-examined parties. See Id. at 1354.

       In the light of Albemarle, the court asked the parties to submit supplemental briefing on

the decision’s impact on this proceeding. Heze argues that given the similarity between it and

the plaintiff in Albemarle, the court should remand the issue to Commerce with instructions to

use the “expected method” and apply the zero rate to Heze for the POR. Plaintiff’s

Supplemental Brief Concerning the Impact of the Court of Appeal for the Federal Circuit’s

Decision in Albemarle (“Heze Supp. Br.”) at 4–12. Clearon disagrees arguing that Albemarle is

distinguishable and that if the action is remanded, then Commerce should be permitted to reopen

the record to assess the proper rate against Heze. Clearon Supp. Br. at 4–6. The United States

requests a remand to consider the impact of Albemarle. U.S. Supp. Br. at 5–6.

1
 This matter was assigned to this judge on September 4, 2018. Order of Reassignment, Doc. No.
78. At a conference on September 11, 2018, Heze agreed that there is no need to examine its
other data if it receives a rate of zero based on the rate of the selected mandatory respondents.
Conference Call, Doc. No. 80.
Court No. 15-00027                                                                          Page 5

                     JURISDICTION AND STANDARD OF REVIEW

       The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will uphold

Commerce’s final results in an antidumping review unless those results are “unsupported by

substantial evidence on the record, or otherwise not in accordance with law[.]” 19 U.S.C. §

1516a(b)(1)(B)(i).

                                         DISCUSSION

       In view of the intervening precedent of Albemarle, the resolution of this matter is made

substantially easier. The Federal Circuit Court of Appeals found Commerce’s practice of

disregarding zero or de minimus mandatory respondent rates when determining the rates of non-

respondents to be inconsistent with the Uruguay Round Agreements Act’s2 “expected method.”

2
 The text of the relevant section of the Statement of Administrative Action accompanying the
Uruguay Round Agreements Act reads:

       2) All Others Rate Recognizing the impracticality of examining all producers and
       exporters in all cases. Article 9.4 of the Antidumping Agreement permits the use of an all
       others rate to be applied to non-investigated firms. To implement the Agreement, section
       219(b) of the bill adds section 735(c)(5)(A) to the Act which provides that the all others
       rate will be equal to the weighted-average of individual dumping margins calculated for
       those exporters and producers that are individually investigated, exclusive of any zero
       and de minimis margins, and any margins determined entirely on the basis of the facts
       available. Currently, in determining the all others rate, Commerce includes margins
       determined on the basis of the facts available.

       Section 219(b) of the bill adds new section 735(c)(5)(B) which provides an exception to
       the general rule if the dumping margins for all of the exporters and producers that are
       individually investigated are determined entirely on the basis of the facts available or are
       zero or de minimis. In such situations, Commerce may use any reasonable method to
       calculate the all others rate. The expected method in such cases will be to weight-average
       the zero and de minimis margins and margins determined pursuant to the facts available,
       provided that volume data is available. However, if this method is not feasible, or if it
       results in an average that would not be reasonably reflective of potential dumping
       margins for noninvestigated exporters or producers, Commerce may use other reasonable
       methods.” Statement of Administrative Action accompanying the Uruguay Round
       Agreements Act, H.R. Doc. No. 103–316 (1994), reprinted in 1994 U.S.C.C.A.N. 4040,
       4201; see also 19 U.S.C. § 3512(d)(noting that the statement of administrative action
Court No. 15-00027                                                                          Page 6

See Albemarle, 821 F.3d at 1354. Albemarle, however, made clear that under some

circumstances deviation from this expected calculation method may be reasonable: when there is

evidence that the dumping margins have not changed from period to period (and thus the

assignment of a rate from a previous review might be appropriate) and when, in the adverse facts

available context, “Commerce is allowed to consider deterrence as a factor.” Id. at 1357. In

Albemarle, the Court found that neither circumstance was present in that case given evidence

that the dumping margin had changed over time and that the non-selected party had fully

cooperated with the review, and, in fact, had requested to be individually examined. Id. at 1357–

58.

       Here, neither specified circumstance for deviation from the expected method occurred.

First, there is clear evidence that the dumping margins have changed given the mandatory

respondents were assigned a zero rate in this review, while they were assigned significant rates in

the review immediately prior.3 See Final Results; Chlorinated Isocyanurates From the People's

Republic of China: Final Results of Antidumping Duty Administrative Review; 2011-2012, 79

Fed. Reg. 4875 (Dep’t Commerce Jan. 30, 2014).

       Second, like the plaintiff in Albemarle, Heze’s request that Commerce individually exam

it was denied. See Albemarle, 821 F.3d at 1349; Prelim I&D Memo at 2; Heze 56.2 Br. at 4–5;

U.S. Resp. Br. at 4–5. Additionally, despite being rejected as both a mandatory and voluntary

       “shall be regarded as an authoritative expression by the United States concerning the
       interpretation and application of the Uruguay Round Agreements and this Act in any
       judicial proceeding in which a question arises concerning such interpretation or
       application.”).
3
 In the 2011–2012 POR, Commerce assigned a 47.17% rate to Hebe Jiheng Chemical Co., Ltd.
and a 59.12% rate to Juancheng Kangtai Chemical Co., Ltd. Chlorinated Isocyanurates from the
People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2011–
2012, 79 Fed. Reg. 4875 (Dep’t of Commerce Jan. 30, 2014).
Court No. 15-00027                                                                           Page 7

respondent, Heze still submitted documentation Commerce requested of the selected mandatory

respondents, albeit arguably after the deadline. See Heze 56.2 Br. at 13–14; U. S. Resp. Br. at 4.

In view of Heze’s repeated attempts to cooperate with Commerce, deterrence is not a reasonable

reason to deviate from the expected method of averaging the rates assigned to mandatory

respondents.

       Given that the Federal Circuit left open that other circumstances may exist that could

make deviation from the expected method reasonable, the court asked the United States during

the conference of September 11, 2018, whether there was any reason for Commerce to do

anything other than apply the zero rate to Heze in this circumstance. The United States

responded that no such reason existed. See United States Response to Court’s September 12,

2018, Order at 2. The court concludes there is no reason for further examination of any evidence

and remands this action with instructions for Commerce to apply a zero rate to Heze for the

2012–2013 POR.

                                         CONCLUSION

       For the foregoing reasons, the court remands this matter for Commerce to apply the

mandatory respondent’s averaged zero rate to Heze Huayi. Commerce shall file its remand

determination with the court on or before 21 days of the issuance of this opinion. As there is no

new action possible that could require further briefing, the court does not set a further schedule,

but will enter judgment upon receipt of the conforming determination.

                                                                             __/s/Jane A. Restani
                                                                              Jane A. Restani
                                                                                    Judge
Dated: September 28, 2018
       New York, New York