Court Opinion

ID: 4645189
Source: CourtListenerOpinion
Date Created: 2020-12-21 18:01:39.845166+00
Date Added: 2024-06-11T08:00:50.723244
License: Public Domain

Slip Op. 20-183

                UNITED STATES COURT OF INTERNATIONAL TRADE

 LINYI CHENGEN IMPORT AND
 EXPORT CO., LTD.,

        Plaintiff,

 and

 CELTIC CO., LTD., ET AL.,

        Consolidated Plaintiffs,
                                                 Before: Jennifer Choe-Groves, Judge
 v.
                                                 Consol. Court No. 18-00002
 UNITED STATES,

        Defendant,

 and

 COALITION FOR FAIR TRADE OF
 HARDWOOD PLYWOOD,

        Defendant-Intervenor.

                                   OPINION AND ORDER

[Sustaining in part and remanding in part the second remand results of the U.S. Department of
Commerce, following the final determination in the antidumping duty investigation of certain
hardwood plywood products from the People’s Republic of China.]

                                                                   Dated: December 21, 2020

Gregory S. Menegaz, J. Kevin Horgan, and Alexandra H. Salzman, deKieffer & Horgan, PLLC,
of Washington, D.C., for Plaintiff Linyi Chengen Import and Export Co., Ltd., Consolidated
Plaintiffs Far East American, Inc. and Shandong Dongfang Bayley Wood Co., Ltd., and
Consolidated Plaintiffs and Plaintiff-Intervenors Celtic Co., Ltd., Jiaxing Gsun Import & Export
Co., Ltd., Anhui Hoda Wood Co., Ltd., Jiaxing Hengtong Wood Co., Ltd., Linyi Evergreen
Wood Co., Ltd., Linyi Glary Plywood Co., Ltd., Linyi Hengsheng Wood Industry Co., Ltd.,
Linyi Huasheng Yongbin Wood Co., Ltd., Linyi Jiahe Wood Industry Co., Ltd., Linyi Linhai
Wood Co., Ltd., Linyi Mingzhu Wood Co., Ltd., Linyi Sanfortune Wood Co., Ltd., Qingdao
Consol. Court No. 18-00002                                                                Page 2

Good Faith Import and Export Co., Ltd., Shandong Qishan International Trading Co., Ltd.,
Shanghai Futuwood Trading Co., Ltd., Suining Pengxiang Wood Co., Ltd., Suqian Hopeway
International Trade Co., Ltd., Suzhou Oriental Dragon Import and Export Co., Ltd., Xuzhou
Andefu Wood Co., Ltd., Xuzhou Jiangyang Wood Industries Co., Ltd., Xuzhou Longyuan Wood
Industry Co., Ltd., Xuzhou Pinlin International Trade Co., Ltd., Xuzhou Shengping Import and
Export Co., Ltd., and Xuzhou Timber International Trade Co., Ltd.

Jeffrey S. Neeley and Stephen W. Brophy, Husch Blackwell LLP, of Washington, D.C., for
Consolidated Plaintiffs Zhejiang Dehua TB Import & Export Co., Ltd., Highland Industries Inc.,
Jiashan Dalin Wood Industry Co., Ltd., Happy Wood Industrial Group Co., Ltd., Jiangsu High
Hope Arser Co., Ltd., Suqian Yaorun Trade Co., Ltd., Yangzhou Hanov International Co., Ltd.,
G.D. Enterprise Limited, Deqing China-Africa Foreign Trade Port Co., Ltd., Pizhou Jin Sheng
Yuan International Trade Co., Ltd., Xuzhou Shuiwangxing Trading Co., Ltd., Cosco Star
International Co., Ltd., Linyi City Dongfang Jinxin Economic & Trade Co., Ltd., Linyi City
Shenrui International Trade Co., Ltd., Jiangsu Qianjiuren International Trading Co., Ltd., and
Qingdao Top P&Q International Corp.

Jeffrey S. Grimson and Jill A. Cramer, Mowry & Grimson, PLLC, of Washington, D.C., for
Consolidated Plaintiffs Taraca Pacific, Inc., Canusa Wood Products, Ltd., Concannon
Corporation d/b/a Concannon Lumber Company, Fabuwood Cabinetry Corporation, Holland
Southwest International Inc., Liberty Woods International, Inc., Northwest Hardwoods, Inc.,
Richmond International Forest Products, LLC, and USPLY, LLC.

Sonia M. Orfield, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief
were Ethan P. Davis, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara
K. Hogan, Assistant Director. Of counsel was Savannah Rose Maxwell, Attorney, Office of the
Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Timothy C. Brightbill, Jeffrey O. Frank, Stephanie M. Bell, and Elizabeth S. Lee, Wiley Rein
LLP, of Washington, D.C., for Defendant-Intervenor Coalition for Fair Trade of Hardwood
Plywood.

       Choe-Groves, Judge: This action concerns the import of hardwood and decorative

plywood and certain veneered panels into the United States from the People’s Republic of China

(“China”), subject to the final affirmative determination in an antidumping duty investigation by

the U.S. Department of Commerce (“Commerce”). See Certain Hardwood Plywood Products

from the People’s Republic of China, 82 Fed. Reg. 53,460 (Dep’t Commerce Nov. 16, 2017)

(final determination of sales at less than fair value), PR 882, as amended, 83 Fed. Reg. 504

(Dep’t Commerce Jan. 4, 2018) (amended final determination of sales at less than fair value), PR
Consol. Court No. 18-00002                                                                 Page 3

894 (collectively, “Final Determination”); see also Issues and Decision Mem. for the Final

Determination of the Antidumping Duty Investigation of Certain Hardwood Plywood Products

from People’s Republic of China, ECF No. 25-7, PR 871 (Nov. 6, 2017) (“Final IDM”).

       Before the court are the Final Results of Redetermination Pursuant to Court Remand,

ECF Nos. 113-1, 114-1 (“Second Remand Results”), which the court ordered in Linyi Chengen

Import & Export Co. v. United States, 44 CIT __, 433 F. Supp. 3d 1278 (2020) (“Linyi Chengen

II”). Plaintiff Linyi Chengen Import & Export Co. (“Linyi Chengen” or “Plaintiff”) filed

comments in support of the Second Remand Results. Pl.’s Resp. Comments in Supp. Second

Remand Redetermination, ECF No. 125 (“Pl. Cmts.”). Consolidated Plaintiffs Zhejiang Dehua

TB Import & Export Co. (“Dehua TB”), Celtic Co. (“Celtic”), and Taraca Pacific, Inc.

(“Taraca”) each filed comments in opposition to the Second Remand Results. Shandong

Dongfang Bayley Wood Co. (“Bayley”), a Consolidated Plaintiff and mandatory respondent, did

not file comments in response to the Second Remand Results. See Final IDM at 2.

       Dehua TB filed comments collectively on behalf of itself and Highland Industries, Inc.,

Jiashan Dalin Wood Industry Co., Happy Wood Industrial Group Co., Jiangsu High Hope Arser

Co., Suqian Yaorun Trade Co., Yangzhou Hanov International Co., G.D. Enterprise, Ltd.,

Deqing China-Africa Foreign Trade Port Co., Pizhou Jin Sheng Yuan International Trade Co.,

Xuzhou Shuiwangxing Trading Co., Cosco Star International Co., Linyi City Dongfang Jinxin

Economic & Trade Co., Linyi City Shenrui International Trade Co., Jiangsu Qianjiuren

International Trading Co., and Qingdao Top P&Q International Corp. Comments in Opp’n to

Remand Redetermination on Behalf of Consolidated Pls. Zhejiang Dehua TB Import & Export

Co., ECF Nos. 116, 117 (“Dehua TB Cmts.”).
Consol. Court No. 18-00002                                                                 Page 4

       Celtic filed comments collectively on behalf of itself and Anhui Hoda Wood Co., Far

East American, Inc., Jiaxing Gsun Import & Export Co., Jiaxing Hengtong Wood Co., Linyi

Evergreen Wood Co., Linyi Glary Plywood Co., Linyi Jiahe Wood Industry Co., Linyi Linhai

Wood Co., Linyi Hengsheng Wood Industry Co., Linyi Huasheng Yongbin Wood Co., Linyi

Mingzhu Wood Co., Linyi Sanfortune Wood Co., Qingdao Good Faith Import & Export Co.,

Shanghai Futuwood Trading Co., Shandong Qishan International Trading Co., Suining

Pengxiang Wood Co., Suqian Hopeway International Trade Co., Suzhou Oriental Dragon Import

& Export Co., Xuzhou Andefu Wood Co., Xuzhou Jiangyang Wood Industries Co., Xuzhou

Longyuan Wood Industry Co., Xuzhou Pinlin International Trade Co., Xuzhou Shengping

Import & Export Co., and Xuzhou Timber International Trade Co. Consolidated Separate Rate

Pls.’ Comments in Opp’n to Second Remand Redetermination, ECF No. 118 (“Celtic Cmts.”).

       Taraca filed comments collectively on behalf of itself and Canusa Wood Products, Ltd.,

Concannon Corp. d/b/a Concannon Lumber Co., Fabuwood Cabinetry Corp., Holland Southwest

International, Inc., Liberty Woods International, Inc., Northwest Hardwoods, Inc., Richmond

International Forest Products, LLC, and USPLY, LLC. Consolidated Pls. Taraca Pacific, Inc.,

Canusa Wood Products, Ltd., Concannon Corp. d/b/a Concannon Lumber Co., Fabuwood

Cabinetry Corp., Holland Southwest International, Inc., Liberty Woods International, Inc.,

Northwest Hardwoods, Inc., Richmond International Forest Products, LLC, and USPLY, LLC

Comments on Final Remand Redetermination, ECF No. 119 (“Taraca Cmts.”).

       The court refers collectively to the non-examined parties that filed Dehua TB Cmts.,

Celtic Cmts., and Taraca Cmts. as “Separate Rate Plaintiffs.” The court also refers collectively

to the non-examined parties that filed separate rate applications in the preliminary proceedings
Consol. Court No. 18-00002                                                                 Page 5

and were assigned the all-others separate rate as “separate rate respondents.” See Final IDM at

2–3; Second Remand Results at 3, 49.

       Defendant-Intervenor Coalition for Fair Trade of Hardwood Plywood (“Defendant-

Intervenor”) filed comments and reply comments in opposition to the Second Remand Results.

Def.-Interv. Coal. Fair Trade Hardwood Plywood’s Comments in Opp’n to Remand

Redetermination, ECF Nos. 121, 122, 123 (“Def.-Interv. Cmts.”); Def.-Interv. Coal. Fair Trade

Hardwood Plywood’s Resp. to Comments in Opp’n to Remand Redetermination, ECF No. 127

(“Def.-Interv. Reply Cmts.”). Defendant United States (“Defendant”) filed a reply to all

comments in opposition to the Second Remand Results. Def.’s Resp. to Comments on Remand

Redetermination, ECF Nos. 128, 129 (“Def. Resp.”).

       For the reasons discussed below, the court sustains in part and remands in part

Commerce’s Second Remand Results.

                                        ISSUES PRESENTED

       The court reviews the following issues:

       1. Whether Commerce’s revised dumping margin for Linyi Chengen is supported by

           substantial evidence; and

       2. Whether Commerce’s revised dumping margin for the Separate Rate Plaintiffs is

           supported by substantial evidence.

                                       BACKGROUND

       The court assumes familiarity with the underlying facts and procedural history of this

case as set forth in Linyi Chengen Import & Export Co. v. United States, 43 CIT__, __, 391 F.

Supp. 3d 1283, 1287–92 (2019) (“Linyi Chengen I”) and Linyi Chengen II, 433 F. Supp. 3d at

1280–84.
Consol. Court No. 18-00002                                                                 Page 6

       In the Final Determination, Commerce applied its intermediate input methodology to

value Linyi Chengen’s log inputs after determining that Linyi Chengen’s log volume reporting

methods were inherently imprecise. 82 Fed. Reg. at 53,461; Final IDM at 23, 25 (valuing

veneers, instead of logs, as the input used to produce hardwood plywood). Commerce stated that

it was unable to verify Linyi Chengen’s reported log consumption against any third-party

sources, such as supplier invoices. Final IDM at 25. Based on Commerce’s application of the

intermediate input methodology, Linyi Chengen’s margin calculation changed from 0% to a final

dumping margin calculation of 183.36%. Final Determination, 82 Fed. Reg. at 53,462.

Commerce applied Linyi Chengen’s rate to the Separate Rate Plaintiffs. Id.; Final IDM at 48.

The court remanded the Final Determination for Commerce to reconsider the accuracy of Linyi

Chengen’s log consumption calculations. Linyi Chengen I, 391 F. Supp. 3d at 1294. Because

Commerce applied Linyi Chengen’s 183.36% dumping margin to the Separate Rate Plaintiffs,

the court also directed Commerce to reconsider the rates applied to the Separate Rate Plaintiffs if

Commerce changed Linyi Chengen’s margin on remand. Id. at 1297.

       Commerce continued to determine on remand that Linyi Chengen’s log volumes were

unreliable because the record failed to show that the conversion table and formula used by Linyi

Chengen reflected the Chinese National Standard and failed to demonstrate accurate log

volumes. Final Results of Redetermination Pursuant to Court Remand at 24, ECF Nos. 88-1, 89-

1 (“Remand Results”). Commerce disregarded Linyi Chengen’s log consumption data based on

Linyi Chengen’s purported failure to provide third-party documentation supporting its reported

log volumes, even though Commerce rejected the documents offered by Linyi Chengen at

verification. Id. at 24–32, 60. Commerce determined that it could not verify the accuracy of

Linyi Chengen’s reported log volumes because the value-added tax invoices and warehouse-in
Consol. Court No. 18-00002                                                               Page 7

tickets provided by Linyi Chengen could not be confirmed by third-party documentation. Id. at

25–26, 49–54. The court again remanded for Commerce to reconsider its application of the

intermediate input methodology and to accept the log volume conversion documents presented

by Linyi Chengen at verification. Linyi Chengen II, 433 F. Supp. 3d at 1286. The court directed

Commerce to make appropriate adjustments to the rate applied to the Separate Rate Plaintiffs if

Commerce changed Linyi Chengen’s margins. Id.

       Commerce accepted Linyi Chengen’s verification documents on second remand and

determined that Linyi Chengen’s reported log volumes were accurate. Second Remand Results

at 10. Commerce refrained from applying the intermediate input methodology to calculate Linyi

Chengen’s dumping margins and instead applied its normal methodology to value all factors of

production used in each stage of production. Id. at 26. Because Commerce determined that

Linyi Chengen’s reported log volumes were accurate, Commerce did not apply adverse facts

available (“AFA”) to Linyi Chengen. Id. at 40. Commerce revised Linyi Chengen’s dumping

margin from 183.36% to 0%. Id. at 8. Commerce determined that the other mandatory

respondent, Bayley, was a China-wide entity and imposed a revised rate of 114.72%. Id. at 15.

Commerce recalculated the Separate Rate Plaintiffs’ dumping margin by averaging Linyi

Chengen’s 0% rate and Bayley’s 114.72% rate. Id. at 16. The Separate Rate Plaintiffs were

assigned a revised dumping margin rate of 57.36%. Id.

                     JURISDICTION AND STANDARD OF REVIEW

       The court has jurisdiction under 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c).

The court will uphold Commerce’s antidumping determinations unless they are unsupported by

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

§ 1516a(b)(1)(B)(i). The court also reviews determinations made on remand for compliance
Consol. Court No. 18-00002                                                                 Page 8

with the court’s remand order. Ad Hoc Shrimp Trade Action Comm. v. United States, 38 CIT

__, __, 992 F. Supp. 2d 1285, 1290 (2014), aff’d, 802 F.3d 1339 (Fed. Cir. 2015).

                                         DISCUSSION

       A.      Commerce’s Revised Dumping Margin for Linyi Chengen

       The first issue considered by the court is whether Commerce’s revised dumping margin

for Linyi Chengen is supported by substantial evidence. Defendant-Intervenor contends that

Commerce’s determination of Linyi Chengen’s revised dumping margin is not supported by

substantial evidence because Linyi Chengen’s reported log volumes are inaccurate and

Commerce should have used the intermediate input methodology. Def.-Interv. Cmts. at 2–24.

Defendant-Intervenor argues that Commerce should have applied AFA to Linyi Chengen. Id. at

25–27. Defendant defends Commerce’s revision of Linyi Chengen’s dumping margin by citing

the accuracy of Linyi Chengen’s reported log volumes and Commerce’s determination that the

facts do not merit the use of the intermediate input methodology. Def. Resp. at 9–10; see also

Second Remand Results at 26.

       In antidumping proceedings involving non-market economy countries, Commerce

calculates normal value based on the factors of production used to produce the subject

merchandise and other costs and expenses. 19 U.S.C. § 1677b(c)(1). Commerce examines the

quantities of raw materials employed by a company in its review of factors of production to

calculate normal value. See id. § 1677b(c)(3)(B). Under certain circumstances, Commerce will

modify its standard factors of production methodology and may choose to apply a surrogate

value to an intermediate input instead of the individual factors of production used to produce that

intermediate input. See Final IDM at 23. Commerce rarely applies this intermediate input

methodology unless there are questions about the accuracy and validity of reported factors of
Consol. Court No. 18-00002                                                                   Page 9

production. See id. at 23–24. Commerce has used the intermediate input methodology: (1) when

a “respondent may report factors used to produce an intermediate input that accounts for an

insignificant share of the total output,” (2) when the burden associated with calculating each

factor outweighs the potential increase of calculation accuracy, or (3) when valuing the factors of

production associated with producing the intermediate input would result in inaccurate

calculations because Commerce is unable to value a significant cost in the overall factors

buildup. Final IDM at 23; see, e.g., Certain Frozen Fish Fillets from the Socialist Republic of

Vietnam, 68 Fed. Reg. 4986–93 (Dep’t Commerce Jan. 31, 2003) (applying the intermediate

input methodology due to problems with upstream data from respondents, such as misreported or

unreported factors of production); Honey from the People’s Republic of China, 71 Fed. Reg.

34,893 (Dep’t Commerce June 16, 2006) (valuing the raw honey consumed as opposed to the

factors of production used to produce the raw honey because of respondent’s inability to

accurately record and substantiate the complete costs associated with production); Fresh Garlic

from the People’s Republic of China, 71 Fed. Reg. 26,329 (Dep’t Commerce May 4, 2006)

(resorting to the intermediate input methodology because respondents were unable to record

accurately and substantiate the costs of growing garlic).

       On second remand, Commerce verified the reliability of Linyi Chengen’s conversion

table and the accuracy of Linyi Chengen’s reported factors of production and financial

statements based on a review of the record. Second Remand Results at 27–29. Commerce

rejected purported discrepancies raised by Defendant-Intervenor and verified the overall

accuracy of Linyi Chengen’s reported log volumes, including Linyi Chengen’s log-to-veneer

conversion and reported grade of veneers. Id. at 29–36. Commerce determined that minor

typographical errors in Linyi Chengen’s conversion table did not impact the reliability of the
Consol. Court No. 18-00002                                                               Page 10

table overall. Id. at 21. After Commerce replaced the obvious typographical errors in the

conversion table with the expected sequence, Commerce verified that the formula produced

correct results. Id. Commerce determined that the conversion table reflected a correct

application of the Chinese National Standard formula to Linyi Chengen’s reported log volumes

and factors of production. Id.

       Commerce verified Linyi Chengen’s reported factors of production by reviewing

numerous business documents placed on the record by Linyi Chengen. Id. at 27–28. Commerce

also verified Linyi Chengen’s cost of goods sold by confirming consistent audited financial

statements and log value accounting. Id. at 28–29. Commerce determined based on its review of

the record that Linyi Chengen’s log-to-veneer volume conversion was accurate because it

reflected Linyi Chengen’s core veneer production, which allowed for cracks, holes, stains, and

knots, and yielded more veneer per log. Id. at 27–30. Commerce determined that even though

Linyi Chengen did not record its grade of veneers consumed, the practice did not give Linyi

Chengen any productive benefit because the surrogate value used did not account for grades of

veneers. Id. at 32–35. After reviewing Linyi Chengen’s factors of production and confirming

their accuracy, Commerce determined that Linyi Chengen’s reported log volumes represented

the accurate volume of logs purchased and consumed by Linyi Chengen. Id. at 10. Commerce

determined that the facts did not merit a departure from Commerce’s normal methodology. Id. at

38. Commerce revised Linyi Chengen’s dumping margin to 0% after using the normal

methodology in lieu of the intermediate input methodology. Id. at 16.

       The court observes that Commerce supported its determination and application of the

chosen methodology by verifying the accuracy of Linyi Chengen’s conversion table, reported

factors of production with related financial statements, reported log volumes, and relevant log-to-
Consol. Court No. 18-00002                                                                 Page 11

veneer volume conversion, and by addressing minor discrepancies raised by Defendant-

Intervenor. Because Commerce had no questions about the accuracy or validity of Linyi

Chengen’s factors of production, it was reasonable for Commerce to apply its normal

methodology to calculate Linyi Chengen’s normal value instead of the intermediate input

methodology. See 19 U.S.C. § 1677b(c)(3)(B). The court sustains Commerce’s revised

dumping margin for Linyi Chengen as reasonable and supported by substantial evidence.

       B.      Commerce’s Revised Dumping Margin for the Separate Rate Plaintiffs

       The second issue considered by the court is whether Commerce’s revised dumping

margin for the Separate Rate Plaintiffs is supported by substantial evidence. The Separate Rate

Plaintiffs argue that Commerce erred by averaging Linyi Chengen’s de minimis dumping margin

and Bayley’s China-wide entity dumping margin. Dehua TB Cmts. at 3–11; Celtic Cmts. at 2–5;

Taraca Cmts. at 2–11. Defendant maintains that Commerce applied an average of Linyi

Chengen’s and Bayley’s rates properly because the exception in 19 U.S.C. § 1673d(c)(5)(B)

allows Commerce to use “any reasonable method” to calculate the all-others separate rate. Def.

Resp. at 17; see also Second Remand Results at 14–15, 43.

       Commerce is authorized by statute to calculate and impose a dumping margin on

imported subject merchandise after determining it is sold in the United States at less than fair

value. 19 U.S.C. § 1673. Under § 1673d(c)(5)(A), Commerce determines an all-others rate

assigned to non-examined companies by calculating the weighted average of the estimated

weighted average dumping margins established for exporters and producers individually

investigated, excluding any zero and de minimis margins, and any margins determined entirely

on the basis of facts available, including adverse facts available. Id. § 1673d(c)(5)(A); see

Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1351 (Fed. Cir. 2016). If the
Consol. Court No. 18-00002                                                                Page 12

estimated weighted average dumping margins established for all exporters and producers

individually investigated are zero or de minimis, or are determined entirely under 19 U.S.C.

§ 1677e, Commerce may invoke an exception to establish a separate rate for exporters and

producers not individually investigated. 19 U.S.C. § 1673d(c)(5)(B). The Statement of

Administrative Action provides guidance that when the dumping margins for all individually

examined respondents are determined entirely on the basis of the facts available or are zero or de

minimis, the “expected method” of determining the all-others rate is to weight-average the zero

and de minimis margins and margins determined pursuant to the facts available, provided that

volume data is available. Uruguay Round Agreements Act, Statement of Administrative Action

(“SAA”), H.R. Doc. No. 103-316, vol. 1, at 873 (1994), reprinted in 1994 U.S.C.C.A.N. 4040,

4201. Commerce may depart from the “expected method” and use “any reasonable method,” but

only if Commerce reasonably concludes that the expected method is not feasible or results in an

average that would not be reasonably reflective of potential dumping margins. See 19 U.S.C.

§ 1673d(c)(5)(B); Navneet Publ’ns (India) Ltd. v. United States, 38 CIT __, __, 999 F. Supp. 2d
1354, 1358 (2014) (“[T]he following hierarchy [is applied] when calculating all-others rates—(1)

the ‘[g]eneral rule’ set forth in § 1673d(c)(5)(A), (2) the alternative ‘expected method’ under

§ 1673d(c)(5)(B), and (3) any other reasonable method when the ‘expected method’ is not

feasible or does not reasonably reflect potential dumping margins.”); see also SAA at 873,

reprinted in 1994 U.S.C.C.A.N. at 4201; Albemarle Corp., 821 F.3d at 1351–52 (quoting SAA at

873, reprinted in 1994 U.S.C.C.A.N. at 4201). Commerce must determine that the expected

method is not feasible or would not be reasonably reflective of the potential dumping margins for

non-investigated exporters or producers based on substantial evidence. Albemarle Corp., 821
F.3d at 1352–53; see also Changzhou Hawd Flooring Co. v. United States, 848 F.3d 1006, 1012
Consol. Court No. 18-00002                                                                  Page 13

(Fed. Cir. 2017). The exception in 19 U.S.C. § 1673d(c)(5)(B) applies expressly to market

economy proceedings but has been extended to non-market economy proceedings as well.

Albemarle Corp., 821 F.3d at 1352 n.6; see also Yangzhou Bestpak Gifts & Crafts Co. v. United

States, 716 F.3d 1370, 1374 (Fed. Cir. 2013) (“Bestpak”).

       On second remand, Commerce noted that “because there are no calculated rates for

individually-investigated respondents other than zero or rates based on total AFA, we have

applied the simple average of the revised AFA rate of 114.72[%] and the [0%] rate calculated for

[Linyi] Chengen as a reasonable method to determine the rate assigned to the producer/exporter

combinations that are party to this litigation and that have been found to be eligible for a separate

rate.” Second Remand Results at 44. To justify its departure from the expected method,

Commerce stated that the expected method of weight-averaging the zero and de minimis margins

and margins determined pursuant to the facts available (i.e., using the 0% rate assigned to Linyi

Chengen) would not be reasonably reflective of the potential dumping margins for the Separate

Rate Plaintiffs. Id.

       Commerce attempted to identify several facts supporting its methodology of departing

from the expected method. First, Commerce explained that the mandatory respondents in this

investigation, Linyi Chengen and Bayley, were not representative of the Separate Rate Plaintiffs

because Bayley was ultimately determined to be a China-wide entity due to Bayley’s failure to

provide essential information regarding Bayley’s ownership and management during the

investigation. See id. at 48–49. After noting Bayley’s designation as a China-wide entity,

Commerce stated that, “[b]ased on that conclusion, we cannot presume that [Linyi] Chengen’s

rate, who is only one of two mandatory respondents in this investigation, is reasonably reflective

of the potential dumping margins for the non-investigated companies.” Id. at 49.
Consol. Court No. 18-00002                                                                Page 14

       Second, Commerce asserted that “additional record evidence indicates that affirmative

dumping potentially existed during the [period of investigation], such that the 0% rate calculated

for [Linyi] Chengen would not be representative of the estimated dumping margins for the non-

investigated companies.” Id. Commerce cited evidence of actual price quotes for subject

merchandise exported from China to United States customers during the period of investigation

by an exporter other than Linyi Chengen, which was alleged in the Petition. Id. Commerce

determined that based on the margins of 114.72% and 104.06% contained in the Petition, “record

evidence demonstrates that potential dumping by the separate rate companies existed during the

[period of investigation] far in excess of the 0% rate calculated for [Linyi] Chengen.” Id.

Commerce determined that Linyi Chengen’s 0% dumping margin would not reflect the potential

dumping margins of the Separate Rate Plaintiffs because the record did not support a de minimis

rate for Bayley and a “cursory analysis indicate[d] that Bayley’s reported data [were] widely

divergent from [Linyi] Chengen’s data.” Id. at 50.

       Commerce is required to support its departure from the expected method by

demonstrating that Linyi Chengen’s 0% dumping margin rate would not be reasonably reflective

of the Separate Rate Plaintiffs’ potential dumping margins based on substantial evidence.

Albemarle Corp., 821 F.3d at 1352–53; see also Changzhou Hawd, 848 F.3d at 1012.

       With respect to the first purported fact asserted by Commerce, that Bayley’s designation

as a China-wide entity supports the conclusion that Linyi Chengen’s 0% rate is not reasonably

reflective of the potential dumping margins for the non-investigated companies, the court notes

that Commerce’s assertion is merely that, a bald assertion without any citations to evidence on

the record. Commerce merely concluded, without any evidentiary support, that Bayley’s lack of

cooperation and designation as a China-wide entity led to the logical conclusion that the Separate
Consol. Court No. 18-00002                                                                 Page 15

Rate Plaintiffs’ potential dumping margin rate was different than Linyi Chengen’s dumping rate

of 0%. Commerce failed to provide any evidence showing how the Separate Rate Plaintiffs’

potential dumping margin was different than Linyi Chengen’s dumping margin. Commerce also

failed to provide any evidence showing what the Separate Rate Plaintiffs’ potential dumping

margin might be. As noted in Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d
1370 (Fed. Cir. 2013), Commerce creates its own problems when it selects only two mandatory

respondents and has minimal information on the record to support its assertions regarding the

potential dumping margins of separate rate respondents. Bestpak, 716 F.3d at 1376–79 (citing

Yangzhou Bestpak Gifts & Crafts Co. v. United States, 35 CIT 948, 955 n.4 (2011) (“Commerce

put itself in a precarious situation when it selected only two mandatory respondents.”).

       With respect to the second purported fact asserted by Commerce, that the margins of

114.72% and 104.06% contained in the Petition were record evidence demonstrating that

potential dumping by the separate rate companies existed during the period of investigation far in

excess of the 0% rate calculated for Linyi Chengen, this is the only evidentiary assertion in the

Second Remand Results. Plaintiffs argue that Bayley’s AFA rate of 114.72% was not based on

economic reality or the company’s actual sales or factors of production and is “simply an

estimated rate from the petition that is totally unconnected to Bayley’s actual antidumping

margin.” Dehua TB Cmts. at 8. In addition, Plaintiffs assert that Commerce’s “reasoning has

nothing to do with the record facts concerning the separate rate companies themselves.” Celtic

Cmts. at 5. The court finds that the margins of 114.72% and 104.06% contained in the Petition

do not provide support for the assertion that the Separate Rate Plaintiffs’ dumping margins are

different than Linyi Chengen’s 0% rate because the margins in the Petition are “untethered” to

the actual dumping margins of the Separate Rate Plaintiffs. See Bestpak, 716 F.3d at 1379.
Consol. Court No. 18-00002                                                               Page 16

Commerce cited no credible economic evidence on the record showing that the Separate Rate

Plaintiffs’ dumping margins are different than Linyi Chengen’s 0% rate or connecting the

Separate Rate Plaintiffs’ dumping margins with the rate of 57.36% that was derived from the

average of Linyi Chengen’s 0% rate and Bayley’s AFA rate of 114.72%.

        The court concludes that Commerce’s explanations, without citations to any credible

record documents, do not rise to the level of substantial evidence required to support

Commerce’s departure from the expected method and apply the “any reasonable method”

exception in 19 U.S.C. § 1673d(c)(5)(B). Commerce’s mere assertions without substantial

evidence do not serve the purpose of calculating dumping margins as accurately as possible.

Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990). The court remands

the Second Remand Results for Commerce to provide more evidence, or otherwise change its

determination in accordance with this opinion.

                                              CONCLUSION

        For the reasons set forth above, the court sustains Commerce’s Second Remand Results

with respect to Commerce’s revised dumping margin for Linyi Chengen, and remands

Commerce’s determination of the dumping margin for the Separate Rate Plaintiffs.

        Accordingly, it is hereby

        ORDERED that the Second Remand Results are remanded to Commerce to provide

more evidence, or otherwise change its determination regarding the dumping margin for the

Separate Rate Plaintiffs; and it is further

        ORDERED that Commerce shall afford the parties at least twelve (12) business days to

comment on the draft third remand results; and it is further

        ORDERED that this case shall proceed according to the following schedule:
Consol. Court No. 18-00002                                                               Page 17

               (1) Commerce shall file the third remand results on or before February 5, 2021;

               (2) Commerce shall file the administrative record on or before February 19, 2021;

               (3) Comments in opposition to the third remand results shall be filed on or before

                  March 19, 2021;

               (4) Comments in support of the third remand results shall be filed on or before

                  April 16, 2021; and

               (5) The joint appendix shall be filed on or before April 30, 2021.

                                                                /s/ Jennifer Choe-Groves
                                                             Jennifer Choe-Groves, Judge

Dated:     December 21, 2020
         New York, New York