Court Opinion

ID: 9945029
Source: CourtListenerOpinion
Date Created: 2024-02-26 21:02:13.75805+00
Date Added: 2024-06-11T14:25:20.120060
License: Public Domain

Slip Op. 24-23

            UNITED STATES
     COURT OF INTERNATIONAL TRADE

               Court No. 20-00105

    CATFISH FARMERS OF AMERICA, et al.,
                    Plaintiffs,
                        v.
                UNITED STATES,
                    Defendant,
                       and
  NTSF SEAFOODS JOINT STOCK COMPANY,
               Defendant-Intervenor.

          Before: M. Miller Baker, Judge

                    OPINION

[The court partially sustains Commerce’s redetermi-
nation and remands for further proceedings.]

                             Dated: February 26, 2024

Nazak Nikakhtar, Maureen E. Thorson, and Stephanie
M. Bell, Wiley Rein LLP of Washington, DC, on the
comments for Plaintiffs.

Brian M. Boynton, Principal Deputy Assistant Attor-
ney General; Patricia M. McCarthy, Director; and
Kara M. Westercamp, Trial Attorney, Commercial Lit-
igation Branch, Civil Division, U.S. Department of
Ct. No. 20-00105                                   Page 2

Justice of Washington, DC, on the comments for De-
fendant. Of counsel on the comments was Hendricks
Valenzuela, Office of the Chief Counsel for Trade En-
forcement & Compliance, U.S. Department of Com-
merce of Washington, DC.

Robert G. Gosselink and Jonathan M. Freed, Trade Pa-
cific PLLC of Washington, DC, on the comments for
Defendant-Intervenor.

    Baker, Judge: This case returns after the court di-
rected the Department of Commerce to reconsider
(1) whether Indonesia is economically comparable to
Vietnam; (2) the finding that Indian data are superior
to Indonesia’s; (3) certain evidence submitted by Plain-
tiffs Catfish Farmers of America and its individual
members, and in light of that evidence, whether De-
fendant-Intervenor NTSF Seafoods Joint Stock Com-
pany accurately reported production information;
(4) NTSF’s byproduct offset; and (5) evidence relating
to moisture content. ECF 68, at 1–2. 1

   On remand, Commerce largely stood its ground.
Appx017420–017421. Catfish Farmers challenge
those results. ECF 86, at 8. The government re-
sponded, see ECF 84, and NTSF joined in those com-
ments, see ECF 83. The court requested supplemental
briefing, ECF 96, which the parties submitted, ECF 99

1 The court presumes the reader’s familiarity with its pre-

vious opinion, NTSF Seafoods Joint Stock Co. v. United
States, Ct. Nos. 20-00104 and 20-00105, Slip Op. 22-38,
2022 WL 1375140 (CIT Apr. 25, 2022).
Ct. No. 20-00105                                  Page 3

(plaintiffs), ECF 100 (government). The court again re-
mands.

                            I

   Catfish Farmers brought this suit under 19 U.S.C.
§§ 1516a(a)(2)(A)(i)(I) and (a)(2)(B)(iii) to contest Com-
merce’s final determination in the 15th administrative
review of the applicable antidumping order. Subject-
matter jurisdiction is conferred by 28 U.S.C. § 1581(c).

    In actions brought under 19 U.S.C. § 1516a(a)(2),
“[t]he court shall hold unlawful any determination,
finding, or conclusion found . . . to be unsupported by
substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
The question is not whether the court would have
reached the same decision on the same record—rather,
it is whether the administrative record as a whole per-
mits Commerce’s conclusion.

   Substantial evidence has been defined as more
   than a mere scintilla, as such relevant evidence
   as a reasonable mind might accept as adequate
   to support a conclusion. To determine if substan-
   tial evidence exists, we review the record as a
   whole, including evidence that supports as well
   as evidence that fairly detracts from the sub-
   stantiality of the evidence.

Nippon Steel Corp. v. United States, 337 F.3d 1373,
1379 (Fed. Cir. 2003) (cleaned up).
Ct. No. 20-00105                                Page 4

                          II

   Broadly speaking, the issues presented fall into two
buckets: the selection of a primary surrogate country
and how NTSF reported factors of production. The
court addresses them in turn.

                          A

                          1

   In determining costs of production in antidumping
cases involving goods imported from a nonmarket-
economy country, Commerce must use, “to the extent
possible,” one or more market-economy countries (sur-
rogates) that are “at a level of economic development
comparable to that of the nonmarket economy coun-
try.” 19 U.S.C. § 1677b(c)(4) (emphasis added). The
court accordingly instructed the agency to “explain
whether Indonesia is economically comparable to Vi-
etnam using the same World Bank gross national in-
come data used to identify India and the five other
countries on the Department’s list of six countries at
levels of comparable economic development.” ECF 68,
at 1 (remand order).

   Notwithstanding the court’s instruction, Commerce
found Indonesia presumptively ineligible because it
was not at the “same” level of economic development
as Vietnam:

   [D]espite the petitioners’ arguments that Indo-
   nesia represents a country at a comparable level
   of economic development as Vietnam, it was not
   at the same level of economic development and,
Ct. No. 20-00105                                Page 5

   thus, did not present a scenario where Com-
   merce must afford that country the same consid-
   eration as others on the list of countries at the
   same level of economic development.

Appx017428 (emphasis in original; internal quotation
marks and brackets omitted).

   The statute, however, does not require a surrogate
to be at the “same” level of economic development as
the nonmarket-economy country where imports are
produced. Instead, it only dictates that a surrogate
have a “comparable” level of development, 19 U.S.C.
§ 1677b(c)(4), a somewhat broader standard, as it in-
cludes the merely similar as well as the identical.

   Indeed, the remand results themselves show that
Commerce views “the same” as narrower and more se-
lective than “comparable”:

   Surrogate [candidates] that are not at the same
   level of economic development as the [nonmar-
   ket-economy] country, but still at a level of eco-
   nomic development comparable to the [nonmar-
   ket-economy] country, are selected only to the
   extent that data considerations outweigh level-
   of-economic development differences or signifi-
   cant producer considerations.

Appx017423 (emphasis added).

   Commerce thus presumptively disqualifies coun-
tries that are only “comparable” in favor of its own
stricter criterion. But the statute requires the use of
“one or more market economy countries that are . . . at
Ct. No. 20-00105                                Page 6

a level of economic development comparable to that of
the nonmarket economy country.” 19 U.S.C.
§ 1677b(c)(4)(A) (emphasis added). A more demanding
rule that excludes “comparable” countries is therefore
not in accordance with law. The court remands again
for the Department to apply the statutory standard—
under protest, if necessary.

                          2

                          a

   The court concluded that Commerce impermissibly
used circular reasoning to find that “the Indian data
were superior in part because ‘the Indonesian infor-
mation is not from the primary surrogate country
which we have selected in this case, India.’୻” Slip Op.
22-38, at 41, 2022 WL 1375140, at *14. On remand,
the Department objects that “[t]his passage was not
intended to suggest any inherent superiority of the In-
dian data; rather, it reflects the standard application
of Commerce’s sequential surrogate country selection
process.” Appx017430.

   The problem—as explained above—is that the De-
partment went off the rails in its sequential selection
process when it excluded Indonesia from consideration
as a surrogate because that country was only at a com-
parable (rather than the same) level of economic devel-
opment. On remand, insofar as Commerce includes In-
donesia on its candidate list because it is at a compa-
rable level, the Department must evaluate the Indian
data on its relative merits vis-à-vis Indonesian data.
See Import Administration Policy Bulletin 04.1, Non-
Market Economy Surrogate Country Selection Process
Ct. No. 20-00105                                 Page 7

(Mar. 1, 2004), at 4 (“[I]f more than one country has
survived the selection process to this point, the coun-
try with the best factors data is selected as the primary
surrogate country.”), ECF 73-2.

                           b

                            i

   The court directed Commerce to explain its use of
the Fishing Chimes study because it was unclear
whether that study represented a “broad market aver-
age.” Slip Op. 22-38, at 41–45, 2022 WL 1375140,
at **14–15. The court observed that Fishing Chimes
appeared to say that most of Andhra Pradesh’s 2 fish
producers were not located in the districts on which
the study focused. See id. at 43–44, 2022 WL 1375140,
at *15 (“[H]ow can a study that relies on data from only
those two districts represent a broad market average,
absent data (which no party has cited) showing that
those districts produced far more fish than anywhere
else?”).

   Commerce responded by block-quoting a paragraph
from Fishing Chimes that, first, estimates that pan-
gasius is being farmed “in more than 300 villages in
West Godavari and Krishna districts”; second, states
that the survey focused on those areas “as they are ma-
jor producers”; and, third, clarified that “[o]ut of the
300 villages that the study covered, 46 of them are in
these two districts.” Id. (quoting Appx13786). The De-
partment concluded that “the study selected 54

2 Andhra Pradesh is an Indian state.
Ct. No. 20-00105                                  Page 8

farmers from 46 villages, and the researchers explic-
itly considered the representativeness of the data in
selecting their survey sample.” Appx017435.

    The quoted passage from Fishing Chimes does not
support Commerce’s conclusion. While the study re-
fers to pangasius farming in “more than 300 villages”
in the two districts in question, it also says that only
46 of the 300 villages studied were located in those dis-
tricts. By negative implication, that means the other
254 studied villages were not so located. This is the
same problem the court identified when it first reman-
ded, and the Department’s explanation fails to engage
with it. The court again remands. 3

                            ii

    The court instructed the Department to reconsider
its reliance on Fishing Chimes data as to fish feed. Id.
at 46–47, 2022 WL 1375140, at **15–16. Commerce
accordingly cited an article from a source called Un-
dercurrent as substantiating that data. Appx017467.
As Catfish Farmers do not dispute that finding, the
court—putting aside its other concerns with Fishing
Chimes—sustains the agency’s reliance on that study’s
fish feed data.

3 Commerce also found that the Fishing Chimes data as to

fingerlings represent a “broad market average” based on
“the reasons discussed above concerning the reliability of
[that] data in general.” Appx017436. The court therefore
remands the fingerlings finding because it assumes that
the study represents a “broad market average”—a finding
the court again remands for the reasons explained above.
Ct. No. 20-00105                                Page 9

                          iii

   The court originally remanded Commerce’s use of
Fishing Chimes as to the “whole live fish” input be-
cause the agency’s entire finding was that “the Indian
data for this input are in fact a broad market average,
for the reasons discussed above.” Slip Op. 22-38, at 47,
2022 WL 1375140, at *16. The court understood the
finding as a reference to the Department’s general dis-
cussion of whether Fishing Chimes overall repre-
sented a broad market average. Id.

   Insofar as the court can discern, the remand results
do not address this issue. The Department did state
that the prices cited in Fishing Chimes were based on
around 28 million kg of fish in 2017–18 and 14 million
kg during the period of review, which is “a significant
volume of fish.” Appx017465. Even so, it does not indi-
cate anything as to a “broad market average” absent
any discussion showing how those amounts compare
to India’s overall pangasius production, so the court
must remand again.

                           c

   The court remanded Commerce’s valuation of labor
inputs because the Department used 2006 Indian la-
bor data despite Policy Bulletin 04.1 attaching signifi-
cance to whether data are “contemporaneous” with the
period of review. Slip Op. 22-38, at 48–49, 2022 WL
1375140, at *16. The court noted that the only argu-
ment the government made to support the decision
was “its irrelevant contention that Commerce chose
the Indian data because India was the primary surro-
gate country.” Id.
Ct. No. 20-00105                                Page 10

   The Department responded that “the fact that the
data are from India is relevant” because that country
was the primary surrogate based on the “sequential”
process. Appx017438–017439 (emphasis in original).
To repeat: Commerce’s choice of India as the primary
surrogate was contrary to law because the Department
improperly excluded Indonesia from consideration.

   And even if, on remand, Commerce lawfully con-
cludes that Indonesia is not at a “comparable” level of
economic development and therefore chooses India as
the primary surrogate, it must address how it is rea-
sonable to use Indian data from eleven years before
the period of review when Policy Bulletin 04.1 requires
the use of contemporaneous data when possible.

                           B

   The second principal issue involves Catfish Farm-
ers’ challenge to NTSF’s reporting of its factors of pro-
duction. On remand, Commerce stood by its prior con-
clusions. See Appx017440–017442 (whole live fish ra-
tio and byproducts); Appx017442–017446 (moisture
content).

                           1

   The court remanded the whole live fish issue be-
cause Catfish Farmers cited three reports in the record
showing that around 3.2 kg of whole fish is required to
yield 1 kg of product, but the court could “find no indi-
cation that Commerce engaged with the reports [they]
offered.” Slip Op. 22-38, at 62–64, 2022 WL 1375140,
at **21–22. The remand order instructed the Depart-
ment to address those reports and Catfish Farmers’
Ct. No. 20-00105                                Page 11

argument of possible double counting of byproducts.
Id. at 65 n.23, 2022 WL 1375140, at *22 n.23.

   The Department responded that NTSF’s whole live
fish figures are within the ranges seen in verification
reports from yield tests Commerce performed during
prior administrative reviews that are part of the rec-
ord here. Appx017441. It also observed that “none of
the companies verified in these earlier segments, or
NTSF in this segment, had a whole fish to fillet ratio
as high as the ratios proposed by” Catfish Farmers. Id.
(emphasis in original). The agency found Catfish
Farmers’ reports unpersuasive because it did not ei-
ther take part in or observe the creation of those stud-
ies. Appx017441–017442.

    That Commerce did not participate in or observe
the preparation of record evidence does not excuse its
failure to address that material on its own merits. The
court therefore remands again for the Department to
explain why the studies proffered by Catfish Farmers
are unconvincing or unreliable.

    The other aspect of the “whole live fish” issue that
the court remanded involved possible double counting.
See Slip Op. 22-38, at 65 n.23, 2022 WL 1375140,
at *22 n.23. Catfish Farmers now ask the court to re-
mand again because the redetermination was “not con-
sistent with the record.” ECF 99, at 9. For its part, the
government requests a voluntary remand to allow
Commerce “to re-evaluate whether potential double
counting with NTSF’s factors of production reporting
is present.” ECF 100, at 5. The court will do so.
Ct. No. 20-00105                                 Page 12

                            2

   The last issue is Catfish Farmers’ contention that
NTSF overstated the amount of water and under-
stated the volume of fish in its products. As to this dis-
pute, the Department “failed to address both the rec-
ord evidence contrary to its decision and the record ev-
idence potentially supportive of its decision.” Slip Op.
22-38, at 69, 2022 WL 1375140, at *23. The court di-
rected Commerce to address NTSF’s product labels
and “studies and other documentation in the adminis-
trative record.” Id. at 66, 2022 WL 1375140, at *22.

   On remand, the Department stated that NTSF’s ev-
idence included third-party inspection certificates re-
lating to moisture content. It found that they “estab-
lish that NTSF’s reported moisture did not exceed the
stated maximum in the contract,” Appx017443, and
that the test reports showed moisture levels within
one percent of those the company reported, id.

    Commerce then addressed Catfish Farmers’ evi-
dence. The Department found that the product labels
did not undermine NTSF’s reporting because the cus-
tomer—not the company—specifies what information
is printed on the label and nothing in the record shows
how the customer determines what is to appear.
Appx017444. Catfish Farmers object, arguing that the
logic Commerce applied to the inspection reports—
that they “came from an independent third party”
hired by NTSF’s unaffiliated customers “and nothing
on the record undermines the reliability of the party
or the results obtained by its testing”—applies to the
labels as well. ECF 86, at 46.
Ct. No. 20-00105                                  Page 13

   Commerce reasonably addressed the potential in-
consistency. It found that while the inspection reports
come from an independent facility that specializes in
such testing, nothing in the record ties the customer
labels to any testing protocols or shows that NTSF con-
trols the labels’ contents. Appx017477. 4 The Depart-
ment explained that the company and its customers
rely on the independent testing, not the product labels,
to confirm moisture content. Id. Thus, Commerce’s
choice to rely on NTSF’s moisture content reporting is
supported by substantial evidence. 5

4 The agency gave an example of two different calculations

that could both show a 30 percent solution of water.
Appx017477–017478. “Accordingly, what is reflected in the
label depends on how the customer defines ‘contains,’ and
the accuracy of the information therein.” Appx017478. Be-
cause the Department did not have “definitive evidence”
showing how the customers calculated the percentage and
what the labels meant by “contains,” it could not rely on
the labels. Id. In contrast, the inspection certificates
showed that the moisture content was under the maximum
threshold and included actual results of testing consistent
with the company’s reporting. Appx017478–017479.
5 The Department also found that other studies and docu-

mentation on the record were not necessarily reliable be-
cause they may have been prepared using “different proce-
dures and merchandise than those in this review.”
Appx017445. Catfish Farmers do not challenge that find-
ing.
Ct. No. 20-00105                                Page 14

                       *   *   *

   For the foregoing reasons, the court sustains the re-
determination in part and otherwise remands for fur-
ther proceedings.

Dated: February 26, 2024           /s/ M. Miller Baker
       New York, NY                Judge