Court Opinion

ID: 820065
Source: CourtListenerOpinion
Date Created: 2013-02-10 19:35:43.466972+00
Date Added: 2024-06-11T09:03:02.412530
License: Public Domain

Slip Op. 12 - 145

           UNITED STATES COURT OF INTERNATIONAL TRADE

 AD HOC SHRIMP TRADE ACTION
 COMMITTEE,

           Plaintiff,

                  v.
                                     Before: Donald C. Pogue,
 UNITED STATES,                              Chief Judge

           Defendant,                Court No. 11-00335

                  and

 HILLTOP INTERNATIONAL and OCEAN
 DUKE CORP.,

           Defendant-Intervenors.

                        OPINION AND ORDER

[final results of administrative review remanded]

                                            Dated: November 30, 2012

           Andrew W. Kentz, David A. Yocis, Jordan C. Kahn, and
Nathaniel Maandig Rickard, Picard Kentz & Rowe LLP, of
Washington, DC, for Plaintiff Ad Hoc Shrimp Trade Action
Committee.

          Joshua E. Kurland, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for Defendant. With him on the brief were
Stuart F. Delery, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Patricia M. McCarthy, Assistant
Director. Of counsel on the brief was Melissa M. Brewer,
Attorney, Office of the Chief Counsel for Import Administration,
U.S. Department of Commerce, of Washington, DC.

          Mark E. Pardo and Andrew T. Schutz, Grunfeld,
Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington,
DC, for Defendant-Intervenors Hilltop International and Ocean
Duke Corporation.
Court No. 11-00335                                                Page 2

           Pogue, Chief Judge:    This action seeks review of four

determinations by the United States Department of Commerce

(“Commerce”) in the fifth administrative review of the

antidumping duty order on certain frozen warmwater shrimp from

the People’s Republic of China (“China” or the “PRC”).1        Before

the court is Plaintiff’s motion pursuant to USCIT Rule 56.2 for

judgment on the agency record.      By its motion, Plaintiff Ad Hoc

Shrimp Trade Action Committee (“AHSTAC”) seeks a remand to the

agency for reconsideration of Commerce’s I) exclusive reliance

on certain data obtained from U.S. Customs and Border Protection

(“Customs” or “CBP”) to select respondents for individual

examination in this review (“mandatory respondents”);

II) selection of India as the primary surrogate country for

China, which Commerce treats as a non-market economy (“NME”);

III) decision to use Indian data as the exclusive source for

valuing the labor factor of production (“FOP”); and

IV) determination not to exclude imports from North Korea when

																																																								
              1
                  See Certain Frozen Warmwater Shrimp from the People’s
Republic of China, 76 Fed. Reg. 51,940 (Dep’t Commerce Aug. 19,
2011) (final results and partial rescission of antidumping duty
administrative review), Admin. R. (Index) Pub. Doc. 7 (“Final
Results”) and accompanying unpublished Issues and Decision
Memorandum, A-570-893, ARP 09-10 (Aug. 12, 2011), Admin. R.
(Index) Pub. Doc. 4, available at
http://ia.ita.doc.gov/frn/summary/PRC/2011-21259-1.pdf (last
visited Nov. 29, 2012) (“I & D Mem.”) (adopted in the Final
Results, 76 Fed. Reg. at 51,940).
Court No. 11-00335                                                   Page 3

using Indian import statistics to calculate surrogate FOP

values. See Mem. of Law in Supp. of Pl. [AHSTAC]’s Rule 56.2

Mot. for J. on the Agency R., ECF No. 39 (“Pl.’s Br.”).            The

court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of

the Tariff Act of 1930, as amended, 19 U.S.C. §

1516a(a)(2)(B)(iii) (2006),2 and 28 U.S.C. § 1581(c) (2006).

           As explained below, I) Commerce’s mandatory respondent

selection is sustained; II) Commerce’s surrogate country

selection is remanded; and III) and IV) judgment regarding

Commerce’s labor valuation, as well as Commerce’s decision not

to exclude data on Indian imports from North Korea when

calculating surrogate FOP values, is deferred pending Commerce’s

reconsideration of its primary surrogate country selection.

                           STANDARD OF REVIEW

           When reviewing Commerce’s antidumping decisions under

19 U.S.C. § 1516a(a)(2), this Court sustains Commerce’s

determinations, findings, or conclusions unless they are

“unsupported by substantial evidence on the record, or otherwise

not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

Substantial evidence review analyzes whether the challenged

																																																								
              2
                  Further citations to the Tariff Act of 1930, as amended,
are to the relevant provisions of Title 19 of the U.S. Code,
2006 edition.
Court No. 11-00335                                                   Page 4

determination, finding, or conclusion is reasonable given the

record as a whole. Nippon Steel Corp. v. United States, 458 F.3d

1345, 1351 (Fed. Cir. 2006).

                                  DISCUSSION

  I.       Respondent Selection

             AHSTAC first challenges Commerce’s selection of the

mandatory respondent in this review, Hilltop International

(“Hilltop”). Pl.’s Br. at 38-40.        Commerce selected Hilltop for

mandatory individual examination because, based on entry data

obtained from Customs, Hilltop was the largest Chinese exporter

of the subject merchandise, by volume, during the period of

review (“POR”).3 Certain Frozen Warmwater Shrimp from the

People’s Republic of China, 76 Fed. Reg. 8,338, 8,338 (Dep’t

Commerce Feb. 14, 2011) (preliminary results and preliminary

partial rescission of fifth antidumping duty administrative

review), Admin. R. Pub. Doc. 97 (“Preliminary Results”).4

																																																								
              3
                  The POR for this fifth administrative review was
February 1, 2009, through January 31, 2010. Final Results,
76 Fed. Reg. at 51,940.
       4
       See 19 U.S.C. § 1677f-1(c)(2)(B) (“If it is not
practicable to make individual weighted average dumping margin
determinations . . . because of the large number of exporters or
producers involved in the investigation or review, [Commerce]
may determine the weighted average dumping margins for a
reasonable number of exporters or producers by limiting its
examination to . . . exporters and producers accounting for the
                                             (footnote continued)
Court No. 11-00335                                                                                                                                               Page 5

                           AHSTAC argues that Commerce’s selection was not

supported by substantial evidence because, in the course of a

prior review of this antidumping duty order, Commerce discovered

that some entries of subject merchandise had been misclassified

by their importer as merchandise not covered by the order.5

See Pl.’s Br. at 39.                                        As this misclassification was not detected

by Customs, CBP import data for that prior review period

inaccurately reported entry volumes of subject merchandise.

AHSTAC contends that Commerce should have inferred from this

pre-POR discovery that importers similarly misclassified subject

entries during the POR at issue, and therefore that the CBP

entry data are unreliable for determining the actual volume of

subject merchandise entered by each respondent during the POR.

See id.

																																																																																																																																																																																			
largest volume of the subject merchandise from the exporting
country that can be reasonably examined.”).
             5
       Entries are designated by the importer, under penalty of
the law for fraud and/or negligence, 19 U.S.C. § 1592, with a
two-digit code. See U.S. Customs & Border Prot., Dep’t of
Homeland Sec., CBP Form 7501 Instructions 1 (July 24, 2012),
available at http://forms.cbp.gov/pdf/7501_instructions.pdf
(last visited Nov. 29, 2012). “The first digit of the code
identifies the general category of the entry (i.e., consumption
= 0, informal = 1, warehouse = 2). The second digit further
defines the specific processing type within the entry category.”
Id. Consumption entries covered by an antidumping duty order
must be designated as type 03, whereas consumption entries that
are free and dutiable are designated as type 01. Id.
Court No. 11-00335                                             Page 6

            This Court has previously held that, “[i]n the absence

of evidence in the record that the CBP data – for merchandise

entered during the relevant POR and subject to the [antidumping]

duty order at issue – are in some way inaccurate or distortive,

the agency [may] reasonably conclude[] that such data, collected

in the regular course of business under penalty of law for fraud

and/or negligence, presents reliably accurate information.”

Pakfood Pub. Co. v. United States, __ CIT __, 753 F. Supp. 2d

1334, 1345 (2011) (emphasis added, footnote and citations

omitted).   Nonetheless, AHSTAC contends that misclassification

of a respondent’s entries during the period of the third review

constitutes evidence that Customs data for entries made during

the period of the fifth review is inaccurate. Pl.’s Br. at 39.

            This precise issue was already decided in Ad Hoc

Shrimp Trade Action Comm. v. United States, __ CIT __, 828 F.

Supp. 2d 1345, 1351 (2012).   That decision concluded that

Commerce adequately considered the effect of the

misclassification, in the third review, on the quality of the

data used in subsequent reviews of this antidumping duty order.

Id.   Specifically, in the fourth review, Commerce verified that

misclassifications identified during the third review – the very

same misclassifications that form the sole evidentiary basis for

AHSTAC’s present argument, Pl.’s Br. at 39 – were no longer

continuing. Ad Hoc Shrimp Trade Action Comm., __ CIT at __,
Court No. 11-00335                                                   Page 7

828 F. Supp. 2d at 1351.      Commerce thus reasonably resolved any

question arising from these misclassifications regarding the

continued accuracy of CBP entry volume data for respondents

subject to this antidumping duty order. Id.

           Because AHSTAC presents no new evidence to impugn the

accuracy of Customs entry volume data for the POR at issue here,

see Pl.’s Br. at 39, Commerce reasonably concluded that these

data were reliable for purposes of mandatory respondent

selection in this review. See Pakfood, __ CIT at __,

753 F. Supp. 2d at 1345; Ad Hoc Shrimp Trade Action Comm., __

CIT at __, 828 F. Supp. 2d at 1351.        Thus, as AHSTAC presents no

further basis on which to challenge Commerce’s mandatory

respondent selection, see Pl.’s Br. at 38-40, Commerce’s

determination in this regard is sustained.

  II.   Surrogate Country Selection

     A. Background

           With regard to the selection of surrogate market

economy countries in NME cases,6 it is Commerce’s policy7 to

																																																								
              6
                  In antidumping proceedings, Commerce generally treats
China as an NME, and did so in this case. Preliminary Results,
76 Fed. Reg. at 8,340 (“In every case conducted by the
Department involving the PRC, the PRC has been treated as an NME
country. In accordance with [19 U.S.C. § 1677(18)(C)(i)], any
determination that a foreign country is an NME country shall
remain in effect until revoked by [Commerce]. None of the
parties to this proceeding has contested such treatment.”)
                                                         (footnote continued)
Court No. 11-00335                                                                                                                                               Page 8

begin the surrogate country selection process by creating a list

of potential surrogate countries whose per capita gross national

income (“GNI”) falls within a range of comparability to the GNI

of the NME in question (the “potential surrogates list”).

See Commerce Policy 4.1.8                                                “The surrogate countries on [this

																																																																																																																																																																																			
(citation omitted). When calculating dumping margins for
merchandise originating from NME-designated countries, Commerce
determines the normal value of such merchandise based on the
best available information regarding the relevant FOPs in one or
more economically comparable market economy countries that
produce comparable merchandise (“surrogate countries”).
See 19 U.S.C. § 1677b(c)(1), (4); Preliminary Results, 76 Fed.
Reg. at 8,340 (explaining that Commerce calculated the normal
value of subject merchandise in this review in accordance with
19 U.S.C. § 1677b(c)).
             7
       Import Admin., U.S. Dep’t Commerce, Non-Market Economy
Surrogate Country Selection Process, Policy Bulletin 04.1
(2004), available at http://ia.ita.doc.gov/policy/bull04-1.html
(last visited Nov. 29, 2012) (“Commerce Policy 4.1”).
             8
       Having compiled a list of countries with GNI values
comparable to that of the NME, Commerce next identifies the
countries on that list that are producers of merchandise
comparable to the merchandise subject to the antidumping duty
order or investigation. Commerce Policy 4.1. From this list of
economically comparable producers of comparable merchandise,
Commerce then determines which countries are significant
producers of such merchandise. Id. Finally, “if more than one
country has survived the selection process to this point, the
country with the best factors data is selected as the primary
surrogate country.” Id. (footnote omitted). Commerce evaluates
relative data quality based on the data set’s specificity to the
input in question, exclusivity of taxes and import duties,
contemporaneity with the period of investigation or review, and
public availability. Id. Plaintiff does not challenge these
aspects of Commerce’s surrogate country selection policy.
     The policy bulletin provides one exception to this general
sequence. Commerce Policy 4.1 (“Occasionally, there are also
cases in which it is more appropriate for the team to address
                                             (footnote continued)
Court No. 11-00335                                                                                                                                               Page 9

potential surrogates] list are not ranked and [are] considered

equivalent in terms of economic comparability.” Id. (noting that

this practice “reflects in large part the fact that the statute

does not require [Commerce] to use a surrogate country that is

at a level of economic development most comparable to the NME

country”) (emphasis in original).

                           Applying this policy in the administrative review at

issue here, Commerce compiled a potential surrogates list of six

countries (India, the Philippines, Indonesia, Thailand, Ukraine,

and Peru). Selection of Surrogate Country, A-570-893, ARP 09-10

(July 20, 2010), Admin. R. Pub. Doc. 56 (“Surrogate Country

Mem.”).                 Commerce then, without further explanation, “determined

[the countries on this list] to be at a level of economic

development comparable to the PRC in terms of per capita [GNI].”

Id.          The relevant per capita GNI values, whose accuracy is not

																																																																																																																																																																																			
economic comparability only after the significant producer of
comparable merchandise requirement is met. Cases where
particular emphasis on ‘significant producer of comparable
merchandise’ is warranted are generally those that involve
subject merchandise that is unusual or unique (with
correspondingly unusual or unique inputs or other unique aspects
of the cost of production), e.g., crawfish, which is produced by
only a few countries.”) (emphasis in original, citation
omitted). No party argues that this exception describes
circumstances similar to the record here, so this aspect of
Commerce’s policy is not at issue.
Court No. 11-00335                                                 Page 10

in dispute,9 were as follows:

            China:           $2,940

            India:           $1,070
            Philippines:     $1,890
            Indonesia:       $2,010
            Thailand:        $2,840
            Ukraine:         $3,210
            Peru:            $3,990

Id. at Attach. I.

            Commerce acknowledged that India “is not as close [in

terms of GNI] to China as the other [potential] surrogate

countries in the list” and noted that “the disparity in per

capita GNI between India and China has consistently grown in

recent years.” Id.     Nevertheless, Commerce determined to include

India on the potential surrogate list. Id.10

            After receiving comments from interested parties,11

Commerce preliminarily selected India as the primary surrogate

country for China in this review, “because India is at a

comparable level of economic development . . . , is a

																																																								
              9
                  Commerce relied on data obtained from the World Bank’s
World Development Report (2010), which reports data from 2008.
Surrogate Country Mem. Attach. I.
     10
       Commerce noted, however, that should the disparity in per
capita GNI between India and China continue to grow, Commerce
“may determine in the future that the two countries are no
longer ‘at a comparable level of economic development’ within
the meaning of the statute.” Id.
     11
          See Preliminary Results, 76 Fed. Reg. at 8,339.
Court No. 11-00335                                           Page 11

significant producer of comparable merchandise, . . . has

publicly available and reliable data[,] . . . [and] has been the

primary surrogate country in past segments.” Preliminary

Results, 76 Fed. Reg. at 8,342 (citing Mem. Re Surrogate Factor

Valuations for the Preliminary Results, A-570-893, ARP 09-10

(Feb. 7, 2011), Admin. R. Pub. Doc. 93 (discussing Indian data

sources without comparing India to other countries)).

          In its case brief to the agency, AHSTAC argued that,

for the final results of this review, Commerce should choose

Thailand, rather than India, as the primary surrogate country.

AHSTAC Case Br., A-570-893, ARP 09-10 (Mar. 28, 2011), Admin. R.

Pub. Doc. 109 (“AHSTAC Case Br.”) at 1-13.   AHSTAC maintained

that “(1) the record contains publicly available and reliable

surrogate value data for Thailand that is at least as

comprehensive, if not more comprehensive, than that for India,

while (2) Thailand is at a much closer level of economic

development to the PRC than is India, and (3) is an even more

significant producer of comparable merchandise.” Id. at 2;

see also id. at 13 (“Given th[e] wide disparity in economic

comparability – and the largely minor differences in the quality

of the factor data available for India and Thailand – the only

rational choice for [Commerce] is to select Thailand rather than

India as the surrogate country for the final results.”).
Court No. 11-00335                                            Page 12

            After considering AHSTAC’s claim, Commerce continued

to use India as the primary surrogate country. See Final

Results, 76 Fed. Reg. at 51,940 (listing no changes to surrogate

country selection from the Preliminary Results); I & D Mem.

cmt. 2 at 10.

            AHSTAC now argues that Commerce’s selection of India

as the primary surrogate country for China in this review was

not supported by a reasonable reading of the record. Pl.’s Br.

at 10-18.   Commerce responds that the court should decline to

consider this argument because AHSTAC failed to exhaust its

administrative remedies. Def.’s [2d] Corrected Resp. in Opp’n to

Pl.’s Mot. for J. upon the Agency R., ECF Nos. 59 (confidential)

and 62 (public) (“Def.’s Br.”) at 18.   In the alternative,

Defendant asserts that a reasonable reading of the record

supports Commerce’s decision. Id. at 22-26.     Each issue will be

considered in turn.

     B. Exhaustion of Administrative Remedies

            In actions challenging antidumping determinations,

“the Court of International Trade shall, where appropriate,

require the exhaustion of administrative remedies.” 28 U.S.C.

§ 2637(d) (2006).    Generally, a party sufficiently exhausts its

administrative remedies regarding a challenge to an antidumping

proceeding if that party participates in the proceeding and

presents the challenge in its administrative case brief. See Ad
Court No. 11-00335                                           Page 13

Hoc Shrimp Trade Action Comm. v. United States, __ CIT __,

675 F. Supp. 2d 1287, 1300 (2009) (“It is ‘appropriate’ for

litigants challenging antidumping actions to have exhausted

their administrative remedies by including all arguments in

their case briefs submitted to Commerce.”) (quoting 28 U.S.C.

§ 2637(d)).   An argument raised in the case brief satisfies the

administrative exhaustion requirement “if it alerts the agency

to the argument with reasonable clarity and avails the agency

with an opportunity to address it.” Luoyang Bearing Corp. v.

United States, 28 CIT 733, 761, 347 F. Supp. 2d 1326, 1352

(2004) (citing Hormel v. Helvering, 312 U.S. 552 (1941); Rhone

Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir.

1990)).

            Here AHSTAC argues that the record does not support

Commerce’s choice of India for the primary surrogate country

because the record contains quality data from another country

that was much more economically comparable to China while also

meeting Commerce’s remaining eligibility criteria. Pl.’s Br. at

12-17.    AHSTAC sufficiently alerted the agency to this argument

when AHSTAC contended, in its case brief before the agency, that

Thailand was the only rational surrogate country choice because,

out of all of the potential surrogates that satisfied Commerce’s

eligibility criteria, Thailand’s per capita GNI was closest to

that of China. AHSTAC Case Br. at 2, 13-14.   Because the
Court No. 11-00335                                              Page 14

argument presented in AHSTAC’s case brief includes the challenge

AHSTAC now seeks to have adjudicated, AHSTAC properly exhausted

its administrative remedies in this regard. See Luoyang Bearing,

28 CIT at 761, 347 F. Supp. 2d at 1352.

           Moreover, Commerce explicitly addressed AHSTAC’s

economic comparability argument in its Issues and Decision

Memorandum. I & D Mem. cmt. 2 at 5 (noting AHSTAC’s argument

that “Thailand has a per capita [GNI] that is much closer to

that of the PRC than is India[’s]”) and 6-7 (addressing AHSTAC’s

relative economic comparability argument but concluding that,

“consistent with [Commerce’s] policy . . . , [Commerce]

continues to find that [India and Thailand] are equally

economically comparable to the PRC for purposes of [surrogate

value] calculations”).    Judicial review of this issue is

therefore appropriate, because Commerce had the opportunity to

consider AHSTAC’s argument, make its ruling, and state the

reasons for its decision.12

     C. Commerce Acted Unreasonably

           In the administrative review, Commerce defended its

primary surrogate country selection against AHSTAC’s challenge
																																																								
              12
                    Cf. Unemployment Comp. Comm’n of Alaska v. Aragon,
329 U.S. 143, 155 (1946) (holding that a reviewing court usurps
the agency’s function when it deprives the agency of “an
opportunity to consider the matter, make its ruling, and state
the reasons for its action”)(footnote omitted).
Court No. 11-00335                                          Page 15

by relying on its policy of treating all countries on the

potential surrogates list as equally economically comparable,

regardless of relative differences among them in terms of GNI

comparability to the NME in question. I & D Mem. cmt. 2 at 6-7

(relying on Commerce Policy 4.1).   Commerce defended this policy

on the ground that “the statute does not require [Commerce] to

use a surrogate country that is at a level of economic

development most comparable to the NME country,” Commerce Policy

4.1 at n.5 (emphasis in original); see also I & D Mem. cmt. 2 at

6-7; Def.’s Br. at 22 – i.e., Commerce defended its policy on

the ground that the statute does not expressly prohibit it.

     But the absence of an express statutory prohibition does

not render permissible all that is not expressly prohibited.

“Not only must an agency’s decreed result be within the scope of

its lawful authority, but the process by which it reaches that

result must be logical and rational.” Allentown Mack Sales &

Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998).   Without some

link to Commerce’s statutory authority and the particular

evidence in this case, an explanation that amounts to “we did it

because it is our policy to do so” is not an explanation that “a

reasonable mind might accept as adequate to support a

conclusion.” Cf. Consol. Edison Co. v. NLRB, 305 U.S. 197, 229

(1938) (defining “substantial evidence”).   A policy that, though
Court No. 11-00335                                                    Page 16

not expressly prohibited, is nevertheless unreasonable, cannot

serve as a basis for Commerce’s reasoned decision-making.

           Commerce’s policy of disregarding relative GNI

differences among potential surrogates for whom quality data is

available and who are significant producers of comparable

merchandise is not reasonable, because it arbitrarily discounts

the value of economic comparability relative to the remaining

eligibility criteria (i.e., significant production of comparable

merchandise and quality of data).        While it is true, as Commerce

emphasizes, that the most economically comparable country would

not be a reasonable surrogate choice if the dataset from that

country was inadequate, Commerce Policy 4.1; Def.’s Br. at 22,

this is equally true of the remaining criteria.           Thus, for

example, the most economically comparable country would be an

unreasonable surrogate choice if it were not a significant

producer of comparable merchandise,13 and the country with the

absolute best dataset would similarly be an unreasonable

surrogate choice if it were not economically comparable to the

NME in question.14     Indeed, Commerce’s own policy suggests that

none of the three surrogate country eligibility criteria –

																																																								
              13
                    See Shandong Rongxin Imp. & Exp. Co. v. United States, __
CIT __, 774 F. Supp. 2d 1307, 1316 (2011).
     14
       Cf. Dorbest Ltd. v. United States, 604 F.3d 1363, 1371-73
(Fed. Cir. 2010).
Court No. 11-00335                                           Page 17

economic comparability, significant production of comparable

merchandise, and quality data – is preeminent. See Commerce

Policy 4.1 (explaining that “the relative importance that

[Commerce] attaches to each [eligibility criterion] will

necessarily vary depending on the specific facts in each case”).

          Because none of Commerce’s three surrogate country

eligibility criteria is preeminent, it follows that relative

strengths and weaknesses among potential surrogates must be

weighed by evaluating the extent to which the potential

surrogates satisfy each of the three criteria.   If, for example,

one potential surrogate has superior data quality and another is

closer in GNI to the NME in question, Commerce must weigh these

differences when selecting the appropriate surrogate. Amanda

Foods (Vietnam) Ltd. v. United States, __ CIT __, 647 F. Supp.

2d 1368, 1376 (2009).   An unexplained and conclusory blanket

policy of simply ignoring relative GNI comparability within a

particular range of GNI values does not amount to a reasonable

reading of the evidence in support of a surrogate selection

where more than one potential surrogate within that GNI range is

a substantial producer of comparable merchandise for which

adequate data is publicly available. See id.   Rather, in such

situations, Commerce must explain why its chosen surrogate’s

superiority in one of the three eligibility criteria outweighs
Court No. 11-00335                                              Page 18

another potential surrogate’s superiority in one or more of the

remaining criteria. Id.

             The Government argues that Commerce provided the

necessary explanation in this case when it stated that India was

a more appropriate surrogate than Thailand, notwithstanding the

relative GNI disparity, because “the Thai data were unsuitable

with respect to the most critical factor of production.” Def.’s

Br. at 22.    But this argument mischaracterizes Commerce’s

decision.    Commerce did not decide that the superiority of

Indian data quality outweighed the superiority of Thailand’s

economic comparability to the NME.    Rather, Commerce decided

that it need not consider relative economic comparability, or

weigh one country’s strength in economic comparability against

another’s strength in data quality. I & D Mem. cmt. 2 at 6-7.

Because Commerce has provided no reasonable explanation as to

why potentially slight differences in data quality necessarily

outweigh potentially large differences in economic

comparability, a blanket policy of simply refusing to engage in

this inquiry does not amount to reasoned decision-making.

             In addition, even assuming, arguendo, that Commerce’s

decision rests on the determination that Thai data quality

rendered Thailand unusable as a primary surrogate in this

review, the record does not support such a conclusion.    Indeed,

Commerce found that the Indian and Thai data were so similar in
Court No. 11-00335                                           Page 19

quality that Commerce was unable to make a distinction between

the two countries based on the datasets’ specificity to the

input in question, exclusivity of taxes and import duties,

contemporaneity with the period of investigation or review, or

public availability – i.e., based on its usual data-evaluation

standards. I & D Mem. cmt. 2 at 7.

          “Because the Indian and Thai import data did not allow

[Commerce] to make a distinction between the two countries,”

Commerce compared Indian and Thai information for valuing shrimp

larvae, the critical input for producing the subject

merchandise. Id.   Here again Commerce found that, as with Indian

and Thai import statistics generally, Indian and Thai

information for valuing shrimp larvae was of very similar

quality. See I & D Mem. cmt. 2 at 8.   Both countries provided

relevant information that was publicly available, and “neither

source [was] definitively tax/duty-exclusive or representative

of a broad-market average.” Id.   The distinction between the two

countries’ shrimp larvae data that Commerce focused upon was

that the Thai data were specific to black tiger shrimp, whereas

the Indian data did not specify a species. Id.   Based on this

distinction, Commerce concluded that because the sole mandatory

respondent had stated that it neither produced nor sold black

tiger shrimp during the POR, the Indian shrimp larvae data were

superior (because, unlike the Thai data, they did not specify
Court No. 11-00335                                                  Page 20

the species of shrimp to which they pertained). Id.          Thus

Commerce concluded that Indian data were superior to Thai data

essentially based on a finding that a subset of the Indian data

is more vague than its counterpart within the Thai data. See id.

           Contrary to the Government’s assertions, however, this

record is not so “clear” as to lead to the conclusion that this

insubstantial, if not illusory,15 difference in data quality

necessarily outweighed the concern that India’s per capita GNI

was nearly a third of China’s, whereas Thailand’s per capita GNI

was nearly identical thereto. See Def.’s Br. at 22-23.          The

conclusion that Commerce need not have weighed relative GNI

proximity against relative data quality in the course of its

surrogate selection, “because the clear difference in data

quality provide ample basis for Commerce’s selection decision,”

see id., is not supported by the record.

           Because Commerce’s stated reasoning regarding the

surrogate country selection in this review does not comport with

																																																								
              15
                    AHSTAC suggests that, although the Indian data did not
specify a shrimp species, it is highly likely that they too,
like the Thai data, pertained to black tiger shrimp. Pl.’s Br.
at 16 (“[T]he record establishes that black tiger is the main
species produced in India and that vannemai (the main species in
China) was approved for sale in India only shortly before the
POR.”) (citing Ex. 4C to First Surrogate Value Submission for
[Hilltop], A-570-893, ARP 09-10 (Sept. 10, 2010), Admin. R. Pub.
Doc. 70, at 30).
Court No. 11-00335                                                   Page 21

a reasonable reading of the record, this issue is remanded for

further consideration.

  III. Labor Wage Rate Valuation

            Commerce’s current methodology, which was applied in

this review, is to value the surrogate labor wage rate FOP using

data from the chosen primary surrogate country. I & D Mem.

cmt. 5 at 24 (citing Antidumping Methodologies in Proceedings

Involving Non-Market Economies: Valuing the Factor of

Production: Labor, 76 Fed. Reg. 36,092 (Dep’t Commerce June 21,

2011)).16   AHSTAC appears to challenge Commerce’s application of

this methodology in this review only insofar as AHSTAC disagrees

with Commerce’s chosen primary surrogate, as discussed above.

See I & D Mem. cmt. 5 at 23 (describing AHSTAC’s argument that

Commerce “should choose Thailand as the primary surrogate

country and value labor using Thai labor data”); Pl.’s Br. at 29

(suggesting that AHSTAC would not object to Commerce’s valuing

labor using data from “another [surrogate] country that was

economically comparable to China and had non-aberrant labor

data”).

																																																								
              16
                    Commerce recently changed its methodology for calculating
surrogate labor wage rate values in antidumping proceedings
involving merchandise from NME-designated countries. For a
detailed discussion of this policy change, see Camau Frozen
Seafood Processing Imp. Exp. Corp. v. United States, No. 11-
00399, 2012 WL 5519636, at *5-8 (CIT Nov. 15, 2012).
Court No. 11-00335                                           Page 22

             Because the challenged labor valuation is premised on

Commerce’s selection of India as the primary surrogate country

in this review, and because Commerce’s selection of India as the

primary surrogate is remanded for further consideration,

judgment regarding Commerce’s labor valuation will be deferred

until Commerce’s selection of the primary surrogate country is

finalized. Cf., e.g., Tianjin Magnesium Int’l Co. v. United

States, __ CIT __, 722 F. Supp. 2d 1322, 1340 (2010).

  IV.   Use of Data on Imports into India from North Korea

             AHSTAC also challenges Commerce’s determination not to

exclude data on imports into India from North Korea when

calculating surrogate FOP values in this review. Pl.’s Br.

at 35-38.    As with Commerce’s surrogate labor wage rate

valuation, the determination not to exclude data on imports from

North Korea, when using Indian import statistics to calculate

surrogate FOP values, presupposes the selection of India as the

primary surrogate country. See I & D Mem. cmt. 6; see also id.

cmt. 5 at 24 (describing Commerce’s general practice of valuing

all FOPs using data from the primary surrogate country); Def.’s

Br. at 38.    As with Commerce’s surrogate labor wage rate

valuation, therefore, judgment regarding this issue will be

deferred until Commerce’s selection of the primary surrogate
Court No. 11-00335                                          Page 23

country is finalized. Cf., e.g., Tianjin Magnesium, __ CIT at

__, 722 F. Supp. 2d at 1340.

                              CONCLUSION

          For the reasons stated above, Commerce’s Final

Results, 76 Fed. Reg. 51,940, are affirmed with regard to

Commerce’s selection of the mandatory respondent, and remanded

with regard to Commerce’s selection of the primary surrogate

country for this review.   Commerce shall reconsider its primary

surrogate country selection and either provide additional

explanation, based on a reasonable reading of the record, or

make an alternative primary surrogate selection that is

supported by the record.   Commerce shall have until January 29,

2013 to complete and file its remand determination.   Plaintiff

and Defendant-Intervenors shall have until February 12, 2013 to

file comments.   Plaintiff, Defendant, and Defendant-Intervenors

shall have until February 26, 2013 to file any reply.

          It is SO ORDERED.

                                          /s/ Donald C. Pogue______
                                       Donald C. Pogue, Chief Judge

Dated: November 30, 2012
       New York, NY