Papierfabrik August Koehler SE v. United States

Slip Op. 14-
UNITED STATES COURT OF INTERNATIONAL TRADE
PAPIERFABRIK AUGUST KOEHLER SE, 	:
:
Plaintiff, 	:
: 	Before: Nicholas Tsoucalas,
v. 	: 	Senior Judge
:
UNITED STATES, 	: 	Court No.: 13-00163
:
Defendant, 	:
:
and 	:
:
APPLETON PAPERS INC., 	:
:
Defendant-Intervenor. 	:
:
OPINION and ORDER
[Plaintiff’s Motion to compel Commerce to strike information or, in
the alternative, to disclose the information is denied.]
Dated: January 6, 2014
F. Amanda DeBusk and Matthew R. Nicely, Hughes Hubbard & Reed
LLP, of Washington, DC, for plaintiff.
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,
Assistant 	Attorney 	General, 	Jeanne 	E. 	Davidson, 	Director, 	and
Reginald 	T. 	Blades, 	Jr., 	Assistant 	Director. 	Of 	counsel 	on 	the
brief was Jessica M. Forton, Attorney, Office of the Chief Counsel
for Trade Enforcement and Compliance, U.S. Department of Commerce,
of Washington, DC.
Daniel L. Schneiderman and Gilbert B. Kaplan, King & Spalding
LLP, of Washington, DC, for defendant-intervenor.
Tsoucalas, Senior Judge: 	Plaintiff Papierfabrik August
Koehler 	SE 	(“Koehler”) 	moves 	pursuant 	to 	19 	U.S.C. 	§ 	1677f(c)(2)
for 	an 	order 	compelling 	defendant 	Department 	of 	Commerce
1
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(“Commerce”) 	to 	strike 	part 	of 	defendant-intervenor 	Appvion,
Inc.’s 1 	(“Appvion”) 	May 	18, 	2012 	submission 	of 	new 	factual
information. 	See 	Mot. to Compel (Nov. 5, 2013), ECF No. 57 at 1.
Alternatively, 	Koehler 	requests 	an 	order 	compelling 	Commerce 	to
disclose 	certain 	confidential 	information 	contained 	in 	that
submission. 	Id. at 1–2. 	Commerce and Appvion oppose this motion.
For the following reasons, Koehler’s motion is denied.
BACKGROUND
In the underlying proceeding, Commerce reviewed Koehler’s
sales 	of 	lightweight 	thermal 	paper 	(“LWTP”) 	between 	November 	1,
2010 	and 	October 	31, 	2011 	(the 	“review 	period”). 	See 	LWTP 	From
Germany: Final Results of Antidumping Duty Administrative Review;
2010-2011, 78 Fed. Reg. 23,220 (Apr. 18, 2013) (“Final Results”).
During 	the 	review, 	Appvion 	submitted 	an 	affidavit 	(the
“Affidavit”) 	alleging 	that 	Koehler 	concealed 	certain 	home 	market
sales 	during 	the 	review 	period. 	See 	Letter 	to 	Commerce 	re:
Submission of New Factual Information (May 18, 2012), CR 49 at 2–3,
Exh. 	1 	(“May 	18 th 	Letter”). 	The 	Affidavit 	contained 	information
“obtained 	from 	a 	confidential 	source” 	and 	Appvion 	placed 	certain
information 	in 	single 	and 	double 	brackets. 	Id. 	at 	2, 	Exh. 	1.
Appvion 	requested 	that 	Commerce 	treat 	the 	single-bracketed
1 	On 	May 	13, 	2013, 	Appleton 	Papers 	Inc. 	changed 	its 	name 	to
Appvion, 	Inc. 	See 	Letter 	to 	the 	Clerk 	of 	the 	Court 	(June 	21,
2013), ECF No. 25 at 1.
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information as business proprietary information (“BPI”), available
only 	to 	authorized 	parties 	under 	the 	administrative 	protective
order 	(“APO”) 	for 	the 	review. 	Id. 	at 	2. 	Appvion 	also 	requested
that 	Commerce 	exempt 	the 	double-bracketed 	information 	from
disclosure under the APO because there was a “clear and compelling
need” to withhold the information from disclosure. 	Id.
Appvion also included a public summary of the Affidavit,
which alleged the following: “Koehler has been engaged in a scheme
to defraud [Commerce] by intentionally concealing certain otherwise
reportable 	home 	market 	transactions. 	In 	particular, 	Koehler 	is
selling [LWTP] that it knows is destined for consumption in Germany
through 	various 	intermediaries 	in 	third-countries.” 	Id. 	at 	2–3.
It further alleged that Koehler used this scheme to “artificially
manipulate prices attributable to those sales.” 	Id. at 3.
Koehler 	objected 	to 	Appvion’s 	use 	of 	single 	and 	double
brackets 	in 	the 	Affidavit. 	Letter 	to 	Commerce 	re: 	Objections 	of
Koehler 	to 	Over-Bracketing 	of 	Petitioner’s 	May 	18 	New 	Fictional
Information Letter (May 23, 2012), PR 92 at 1–8. 	It also appeared
to 	deny 	the 	substance 	of 	Appvion’s 	allegations, 	referring 	to 	the
May 	18 th 	Letter 	as 	the 	“Submission 	of 	New 	Fictional 	Information.”
Id. at 1.
Pursuant to Koehler’s objections, Commerce requested that
Appvion provide additional justification for the bracketing in the
Affidavit. 	Letter 	to 	Appvion 	re: 	Submission 	of 	New 	Factual
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Information 	(June 	1, 	2012), 	PR 	98 	at 	1. 	In 	response, 	Appvion
explained 	that 	double-bracketing 	was 	required 	to 	protect 	the
identity of “Source 1,” and that single-bracketing was required to
conceal the affiant’s name and employer, as well as the time period
to 	which 	the 	allegations 	referred. 	Letter 	to 	Commerce 	re:
Explanation Regarding Bracketing Of Information (June 7, 2012), PR
103 at 1–7.
Despite 	initially 	characterizing 	the 	Affidavit 	as
“fictional,” Koehler subsequently admitted that it did not report
certain 	home 	market 	sales. 2 	See 	Koehler’s 	First 	Supplemental
Questionnaire Response (June 27, 2012), CR 66 at 3. 	Koehler also
provided 	a 	revised 	home 	market 	sales 	database 	including 	the
previously unreported sales, id. at 1–4, Exh. S1-27, but Commerce
rejected 	it 	as 	untimely 	filed 	new 	factual 	information. 	See
Rejection of Factual Information Submission Filed by Koehler (Jul.
5, 2012), PR 108 at 1–2.
Commerce applied total adverse facts available (“AFA”) in
the Final Results, imposing a dumping margin of 75.36%. 	See Final
Results, 	78 	Fed. 	Reg. 	at 	23,221. 	It 	imposed 	total 	AFA 	because
“Koehler 	admitted 	to 	the 	transshipment 	scheme 	. 	. 	. 	and 	Koehler
2 	Although 	it 	admitted 	to 	the 	conduct 	Appvion 	publicly
alleged, Koehler subsequently restated its objection to the single-
and double-bracketing of information in the Affidavit. 	See Letter
to Commerce re: Koehler’s Continued Objection to Double Bracketed
Information (Jul. 19, 2012), PR 117 at 1–7.
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admitted to its exclusion of certain reportable 	. . . LWTP sales
to Germany.” 	Issues and Decision Memorandum for the Final Results
of the 2010-2011 Administrative Review on LWTP from Germany (Apr.
10, 2013), PR 176 at 8.
Koehler filed the underlying action to contest the Final
Results pursuant to 28 U.S.C. § 1581(c). 	See Complaint (Apr. 24,
2013), 	ECF 	No. 	6 	at 	1–2. 	Now, 	Koehler 	appeals 	for 	an 	order
compelling 	Commerce 	to 	strike 	the 	Affidavit 	altogether, 	or
alternatively, 	to 	disclose 	the 	double-bracketed 	information 	and
reject 	Appvion’s 	request 	for 	BPI 	treatment 	of 	certain 	single-
bracketed information. 	See Mot. to Compel at 1–2.
DISCUSSION
A 	party 	submitting 	factual 	information 	may 	“[r]equest
that [Commerce] treat any part of the submission as [BPI] that is
subject to disclosure only under an [APO],” or “[c]laim that there
is 	a 	clear 	and 	compelling 	need 	to 	withhold 	certain 	[BPI] 	from
disclosure 	under 	an 	[APO].” 	19 	C.F.R. 	§ 	351.304(a)(1) 	(2012);
see 	19 	U.S.C. 	§ 	1677f(b)(1) 	(2006). 	Upon 	request 	from 	an
interested party, Commerce must disclose all BPI in accordance with
the 	APO, 	“except 	privileged 	information, 	classified 	information,
and specific information of a type for which there is a clear and
compelling 	need 	to 	withhold 	from 	disclosure.” 	Id. 	at 	§
1677f(c)(1).
If 	Commerce 	determines 	that 	“designation 	of 	any
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information as proprietary is unwarranted, then it shall notify the
person who submitted it and ask for an explanation of the reasons
for the designation.” 	Id. at § 1677f(b)(2). 	Commerce “will reject
a 	submission 	that 	does 	not 	meet 	the 	requirements 	of 	[19 	U.S.C. 	§
1677f(b) and 19 C.F.R. § 351.304] with a written explanation.” 	19
C.F.R. 	§ 	351.304(d)(1). 	Commerce 	“normally 	will 	determine 	the
status 	of 	information 	within 	30 	days 	after 	the 	day 	on 	which 	the
information 	was 	submitted.” 	Id. 	at 	§ 	351.304(d)(2). 	And, 	“[i]f
the 	business 	proprietary 	status 	of 	information 	is 	in 	dispute,
[Commerce] 	will 	treat 	the 	relevant 	portion 	of 	the 	submission 	as
[BPI] until [it] decides the matter.” 	Id.
Here, Koehler argues that Commerce erroneously determined
that 	there 	was 	a 	“clear 	and 	compelling 	need” 	to 	withhold 	the
double-bracketed information in the Affidavit from disclosure under
the 	APO. 	Mot. 	to 	Compel 	at 	7–10. 	Furthermore, 	Koehler 	insists
that 	Commerce 	erroneously 	treated 	certain 	single-bracketed
information 	as 	BPI 	because 	the 	information 	was 	not 	eligible 	for
such 	treatment. 	Id. 	at 	11–12. 	Because 	Commerce 	“relied 	on 	the
allegations of fraud in the Affidavit to apply total AFA,” Koehler
contends that Commerce’s treatment of this information violated due
process as well as its statutory and regulatory rights. 	Id. at 7.
Accordingly, 	Koehler 	requests 	that 	this 	Court 	compel 	Commerce 	to
strike 	the 	Affidavit 	or, 	alternatively, 	produce 	the 	double-
bracketed 	information 	and 	reject 	the 	BPI 	designation 	of 	certain
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single-bracketed information. 	Id. at 1–2.
Commerce responds that Koehler’s motion is not properly
before the court because it did not deny Koehler’s application for
access to BPI under the APO. 	See Def.’s Resp. Opp’n Mot. to Compel
(Nov. 26, 2013), ECF No. 65 at 8–10. 	Additionally, even if Koehler
could 	properly 	raise 	a 	claim 	under 	section 	1677f(c)(2), 	Commerce
insists that the court should reject Koehler’s motion because: the
motion is untimely; Koehler waived its claim by failing to raise it
in 	its 	case 	brief 	or 	in 	its 	complaint; 	Koehler 	admitted 	to 	the
allegations put forth in the public summary of the Affidavit; and
Commerce 	reasonably 	determined 	that 	the 	single- 	and 	double-
bracketing in the Affidavit was proper. 	Id. at 10–15.
As 	noted 	above, 	pursuant 	to 	an 	application 	by 	an
interested party, Commerce must provide access to BPI in accordance
with the APO except for proprietary and confidential information,
as well as information for which there is a “clear and compelling
need” to withhold from disclosure under the APO. 	See 19 U.S.C. §
1677f(c)(1). 	If Commerce denies a party’s application for access
to information under the APO, that party may appeal to this Court
for an order directing Commerce to make the information available.
Id. at § 1677f(c)(2); see 28 U.S.C. § 2643(c)(3). 	The action must
be 	filed 	“within 	ten 	days 	after 	the 	date 	of 	the 	denial 	of 	the
request” or it is barred. 	28 U.S.C. § 2636(f).
Under 	28 	U.S.C. 	§ 	1581(f), 	this 	Court 	has 	exclusive
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jurisdiction 	over 	actions 	commenced 	pursuant 	to 	19 	U.S.C. 	§
1677f(c)(2). 	28 U.S.C. § 1581(f). 	The Court has also considered
a section 1677f(c)(2) claim as part of an action under 28 U.S.C. §
1581(c) 	where 	Commerce 	failed 	to 	act 	on 	the 	plaintiff’s 	APO
application 	and 	did 	not 	provide 	access 	to 	BPI 	during 	the
proceeding. 	See 	Gen. 	Elec. 	Co. 	v. 	United 	States, 	16 	CIT 	864,
868–69, 802 F. Supp. 474, 478–79 (1992) (Tsoucalas, J.).
The court agrees with Commerce that Koehler’s motion is
not 	properly 	before 	the 	court 	in 	accordance 	with 	19 	U.S.C. 	§
1677f(c)(2). 	Section 	1677f(c)(2) 	requires 	that 	Commerce 	deny 	a
party’s request for access to information before that party moves
for 	an 	order 	compelling 	Commerce 	to 	provide 	access 	to 	the
information. 	See 19 U.S.C. § 1677f(c)(2). 	Here, Koehler’s motion
does not concern a denied APO application, it concerns Commerce’s
treatment 	of 	certain 	single- 	and 	double-bracketed 	information 	in
the 	Affidavit. 	See 	Mot. 	to 	Compel 	at 	8–13. 	Because 	Koehler’s
motion concerns the BPI designations and not access to information
under 	an 	APO, 	it 	is 	not 	properly 	before 	the 	court. 	19 	U.S.C. 	§
1677f(c)(2).
For 	this 	same 	reason, 	Koehler 	cannot 	rely 	on 	General
Electric 	to 	make 	its 	section 	1677f(c)(2) 	claim 	within 	its 	action
under 	28 	U.S.C. 	§ 	1581(c). 	In 	General 	Electric, 	the 	Court 	found
that Commerce’s failure to act on a party’s APO application denied
that 	party 	an 	opportunity 	to 	“fully 	participate” 	in 	the 	review.
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See 	Gen. 	Elec., 	16 	CIT 	at 	870, 	802 	F. 	Supp. 	at 	480. 	However,
because 	Koehler 	challenges 	Commerce’s 	acceptance 	of 	certain 	BPI
designations, 	it 	does 	not 	have 	a 	claim 	under 	section 	1677f(c)(2)
and 	the 	concerns 	underpinning 	the 	Court’s 	holding 	in 	General
Electric 	are 	not 	applicable. 	See 	id., 	802 	F. 	Supp. 	at 	480.
Accordingly, Koehler’s motion must be denied.
ORDER
Upon 	consideration 	of 	plaintiff’s 	Motion 	to 	Compel
Commerce 	to 	Strike 	Information, 	or, 	in 	the 	Alternative, 	Compel
Commerce to Disclose the Information, the responses thereto, and in
accordance with the above, it is hereby:
ORDERED that plaintiff’s motion is DENIED.
SO ORDERED.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: January 6, 2014
New York, New York
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