Zhaoqing New Zhongya Aluminum Co., Ltd. v. United States

Slip Op. 15-50
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
ZHAOQING NEW ZHONGYA ALUMINUM 	:
CO., LTD., 	:
:
Plaintiff, 	: 	Before: Nicholas Tsoucalas,
: 	Senior Judge
v. 	:
: 	Court No.: 14-00043
UNITED STATES, 	:
: 	PUBLIC VERSION
Defendant, 	:
:
And 	:
:
ALUMINUM EXTRUSIONS FAIR TRADE 	:
COMMITTEE, 	:
:
Defendant-Intervenor. :
_____________________ 	:
OPINION
[Plaintiff’s 	Motion 	for 	Judgment 	on 	the 	Agency 	Record 	is 	DENIED.
Commerce’s 	Final 	Results 	of 	the 	Administrative 	Review 	are
AFFIRMED.]
Dated:________________
Peter J. Koenig, Squire Patton Boggs (US), LLP, of Washington, DC,
for Plaintiff.
Douglas 	G. 	Edelschick, 	Trial 	Attorney, 	Commercial 	Litigation
Branch, 	Civil 	Division, 	Department 	of 	Justice, 	of 	Washington 	DC,
for 	Defendant. 	With 	him 	on 	the 	brief 	were 	Tara 	K. 	Hogan, 	Senior
Trial 	Counsel, 	Commercial 	Litigation 	Branch, 	Civil 	Division,
Department of Justice, Joyce R. Branda, Acting Assistant Attorney
General, 	Jeanne 	E. 	Davidson, 	Director, 	and 	Reginald 	T. 	Blades,
Jr., 	Assistant 	Director. 	Of 	counsel 	on 	the 	brief 	was 	Rebecca
Cantu, Senior Attorney, Office of the Chief Counsel for Enforcement
and Compliance, Department of Commerce, of Washington, DC.
May 27, 2015
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Alan H. Price and Robert E. DeFrancesco, III, Wiley Rein, LLP, of
Washington, DC, for Defendant-Intervenor.
Tsoucalas, 	Senior 	Judge: 	Plaintiff, 	Zhaoqing 	New
Zhongya Aluminum Co., Ltd., (“Zhongya”) moves for judgment on the
agency 	record 	contesting 	Defendant 	United 	States 	Department 	of
Commerce’s 	(“Commerce”) 	determination 	to 	collapse 	into 	a 	single
entity 	three 	affiliated 	exporters/producers, 	the 	Guang 	Ya 	group
(“Guang Ya”), Zhongya, and Xinya, in Aluminum Extrusions From the
People’s 	Republic 	of 	China: 	Final 	Results 	of 	Antidumping 	Duty
Administrative 	Review 	and 	Rescission 	in 	Part 	2010/12 	(“Final
Results of Administrative Review”), 79 Fed. Reg. 96 (Jan. 2, 2014).
Commerce and Defendant-Intervenor, Aluminum Extrusions Fair Trade
Committee, 	oppose 	Zhongya’s 	motion. 	For 	the 	following 	reasons,
Zhongya’s motion is denied and the Final Results of Administrative
Review are affirmed.
JURISDICTION AND STANDARD OF REVIEW
The Court has jurisdiction over this action pursuant to
section 	201 	of 	the 	Customs 	Courts 	Act 	of 	1980, 	28 	U.S.C. 	§
1581(c)(2012) and section 516 of the Tariff Act of 1930, 19 U.S.C.
§ 1516a(a)(2) (2012). 1
1 Further 	citations 	to 	the 	Tariff 	Act 	of 	1930 	are 	to 	the 	relevant
portions 	of 	Title 	19 	of 	the 	U.S. 	Code, 	2012 	edition, 	and 	all
applicable amendments thereto.
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In 	reviewing 	a 	challenge 	to 	Commerce's 	final
determination 	in 	an 	antidumping 	administrative 	review, 	the 	Court
will uphold Commerce's determination unless it is “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 means “more than a mere scintilla”
of 	“such 	relevant 	evidence 	as 	a 	reasonable 	mind 	might 	accept 	as
adequate to support a conclusion.” 	Universal Camera Corp. v. NLRB,
340 	U.S. 	474, 	477, 	71 	S.Ct. 	456, 	459, 	95 	L.Ed. 	456, 	462 	(1951)
(quoting 	Consol. 	Edison 	Co. 	v. 	NLRB, 	305 	U.S. 	197, 	229, 	59 	S.Ct.
206, 217, 83 L.Ed. 126, 140 (1938)). 	To determine if substantial
evidence exists, the court reviews the record as a whole, including
whatever 	“fairly 	detracts 	from 	its 	weight.” 	Id. 	at 	488, 	71 	S.Ct.
at 464, 95 L.Ed. at 467. 	The mere fact that it may be possible to
draw two inconsistent conclusions from the record does not prevent
Commerce's 	determination 	from 	being 	supported 	by 	substantial
evidence. 	Am. 	Silicon 	Techs. 	v. 	United 	States, 	261 	F.3d 	1371,
1376 	(Fed. 	Cir. 	2001); 	see 	also 	Consolo 	v. 	Fed. 	Mar. 	Comm'n, 	383
U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131, 141 (1966).
BACKGROUND
This 	case 	concerns 	the 	first 	administrative 	review 	of
the outstanding 2011 antidumping duty order on aluminum extrusions
from 	the 	People’s 	Republic 	of 	China 	(“PRC”) 	for 	the 	period 	of
review covering November 12, 2010, through April 30, 2012.
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Final Results of Administrative Review, 79 Fed. Reg. at 96; Issues
and 	Decision 	Memorandum 	for 	Final 	Results 	of 	Antidumping 	Duty
Administrative 	Review: 	Aluminum 	Extrusions 	from 	PRC, 	A-570-967,
(Jan. 	2, 	2014) 	(“Antidumping 	IDM”); 	Aluminum 	Extrusions 	from 	the
PRC: Antidumping Duty Order, 76 Fed. Reg. 30,650 (May 26, 2011).
On 	April 	4, 	2011, 	Commerce 	published 	its 	final
determination 	of 	sales 	at 	less 	than 	fair 	value 	for 	Aluminum
Extrusions from the PRC. 	Aluminum Extrusions From the PRC: Final
Determination 	of 	Sales 	at 	Less 	Than 	Fair 	Value 	(“Final
Determination 	of 	Sales 	at 	LTFV”), 	76 	Fed. 	Reg. 	18,524 	(Apr. 	4,
2011). 	Commerce investigated three Chinese producers of aluminum
extrusions: Zhongya, Guang Ya, and Xinya. 	Id.
Commerce 	found 	that 	Guang 	Ya, 	Zhongya, 	and 	Xinya 	were
affiliated 	pursuant 	to 	19 	U.S.C. 	1677 	(A) 	and 	(F) 	and 	collapsed
the three entities into a single entity based upon the claim that
each 	entity 	was 	owned 	by 	a 	member 	of 	the 	Kwong 	family. 	Id. 	at
18,526-27. 	Commerce determined that the single entity was eligible
for 	a 	separate 	rate 	and 	that 	the 	use 	of 	adverse 	facts 	available
(“AFA”) was warranted for both the Guang Ya, Zhongya, Xinya, entity
and the PRC wide entity. Id. at 18,527-29.
On 	April 	4, 	2011, 	Commerce 	also 	published 	the 	Final
Determination of a countervailing duty investigation of Guang Ya,
Zhongya, 	and 	Xinya. 	Aluminum 	Extrusions 	From 	the 	PRC: 	Final
Affirmative 	Countervailing 	Duty 	Determination 	(“Final 	CVD
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Determination”) 	76 	Fed. 	Reg. 	18,521 	(Apr. 	4, 	2011); 	Issues 	and
Decision 	Memorandum 	for 	the 	Final 	Determination 	in 	the 	CVD
Investigation 	of 	Aluminum 	Extrusions 	from 	the 	PRC, 	C-570-968,
(Mar. 	28, 	2011) 	(“IDM 	for 	CVD 	investigation”). 	In 	the 	Final 	CVD
Determination, 	Commerce 	did 	not 	collapse 	Guang 	Ya, 	Zhongya, 	and
Xinya, 	reasoning 	that 	there 	was 	no 	cross-ownership 	among 	the
companies. 	IDM for CVD investigation at 58.
With respect to the antidumping investigation, Commerce
concluded 	that 	the 	margin 	of 	33.28% 	had 	probative 	value 	for 	the
purpose 	of 	being 	selected 	as 	the 	AFA 	rate 	assigned 	to 	the 	Guang
Ya, 	Zhongya, 	Xinya 	entity 	and 	the 	China-wide 	entity. 	Final
Determination 	of 	Sales 	at 	LTFV, 	76 	Fed. 	Reg. 	at 	18,530. 	In 	the
investigation, Commerce found that a fourth company, Da Yang, owned
and managed by another Kwong family sibling, was uncooperative and
so subject to the China-wide rate and not collapsed with Zhongya,
Guang 	Ya, 	and 	Xinya. 	Aluminum 	Extrusions 	From 	the 	PRC 	Notice 	of
Preliminary 	Determination 	of 	Sales 	at 	Less 	Than 	Fair 	Value, 	and
Preliminary 	Determination 	of 	Targeted 	Dumping 	(“Preliminary
Determination of Sales at LTFV”) 75 Fed. Reg. 69,403, 69,408 (Nov.
12, 2010).
This Court affirmed Commerce’s decision to collapse the
entities in the antidumping investigation on October 11, 2012, and
Zhongya 	appealed 	to 	the 	Court 	of 	Appeals 	for 	the 	Federal 	Circuit
(“CAFC”). 	Zhaoqing 	New 	Zhongya 	Aluminum 	Co., 	Ltd. 	v. 	United
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States, 	36 	CIT 	___, 	Slip 	Op. 	12-130, 	887 	F. 	Supp. 	2d 	1301, 	1311
(Oct. 11, 2012); Zhaoqing New Zhongya Aluminum Co., Ltd. v. United
States, Appeal No. 13-1113 (Fed. Cir. June 18, 2013) (not reported
in 	Federal 	Supplement). 	The 	CAFC 	dismissed 	the 	appeal 	on 	June
18, 2013. Id.
Commerce initiated the administrative review on July 10,
2012. 	Initiation 	of 	Antidumping 	and 	CVD 	Administrative 	Reviews
and Request for Revocation in Part, 77 Fed. Reg. 40,565 (July 10,
2012). 	On 	January 	2, 	2014, 	Commerce 	published 	the 	Final 	Results
of 	the 	Antidumping 	Duty 	Administrative 	Review 	and 	Rescission 	for
Aluminum Extrusions from the PRC. 	Final Results of Administrative
Review, 	79 	Fed. 	Reg. 	at 	96. 	Commerce 	again 	collapsed 	Zhongya,
Guang 	Ya 	Group, 	and 	Xinya 	into 	a 	single 	entity. 	Id. 	at 	97.
Additionally, Commerce found that the collapsed entity “failed to
demonstrate 	that 	it 	was 	eligible 	for 	a 	separate 	rate 	and 	thus 	it
is 	part 	of 	the 	PRC-wide 	entity.” 	Id. 	Commerce 	assigned 	the
collapsed entity a 33.28% weighted average dumping margin. 	Id. at
100. 	Commerce 	collapsed 	the 	three 	companies 	claiming 	that 	each
was 	owned 	and/or 	managed 	by 	a 	sibling 	or 	a 	sibling-in-law 	of 	the
Kwong family. Antidumping IDM at 19.
Commerce justified collapsing the three companies in its
Final 	Results 	of 	Administrative 	Review 	while 	rejecting 	Zhongya’s
arguments 	against 	collapsing. 	Id. 	at 	15-21. 	Commerce 	determined
that 	19 	C.F.R. 	§ 	351.401(f) 	controls 	the 	collapsing 	analysis 	and
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that “Zhongya/Guang Ya Group/Xinya is not eligible for a separate
rate 	and 	is 	part 	of 	the 	PRC-wide 	entity.” 	Final 	Results 	of
Administrative 	Review, 	79 	Fed. 	Reg. 	at 	99; 	see 	also 	Antidumping
IDM at 15. 	Commerce found that the Zhongya, Guang Ya, Xinya entity
is not eligible for a separate rate, because Xinya did not answer
any 	of 	Commerce’s 	questionnaires 	including 	the 	quantity, 	value,
and separate rate questionnaires, and Guang Ya did not answer the
main or separate rate questionnaires. Antidumping IDM at 23.
Zhongya disputes Commerce’s decision in the antidumping
administrative review to collapse and treat as one entity Zhongya,
Guang Ya, and Xinya. Pl.’s Mem. J. on R. at 1, Aug. 11, 2014, ECF
No. 28 (“Pl.’s Br.”).
DISCUSSION
1. 19 C.F.R. § 351.401 (f) controls the collapsing analysis
Zhongya 	argues 	that 	the 	antidumping 	statute 	authorizes
collapsing 	only 	if 	producers 	and 	exporters 	jointly 	produce 	the
same 	subject 	merchandise 	under 	19 	U.S.C. 	§ 	1677(28). 2 	Pl.’s 	Br.
2 19 U.S.C. § 1677(28) reads as follows:
The 	term 	“exporter 	or 	producer” 	means 	the 	exporter 	of
the 	subject 	merchandise, 	the 	producer 	of 	the 	subject
merchandise, or both where appropriate. 	For purposes of
section 	1677b 	of 	this 	title, 	the 	term 	“exporter 	or
producer” 	includes 	both 	the 	exporter 	of 	the 	subject
merchandise 	and 	the 	producer 	of 	the 	same 	subject
merchandise 	to 	the 	extent 	necessary 	to 	accurately
calculate 	the 	total 	amount 	incurred 	and 	realized 	for
costs, 	expenses, 	and 	profits 	in 	connection 	with
production and sale of that merchandise.
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at 5. 	Zhongya further contends that Zhongya, Guang Ya, and Xinya
do 	not 	jointly 	produce 	the 	same 	subject 	merchandise; 	therefore,
Commerce 	improperly 	collapsed 	the 	companies. 	Id. 	Zhongya 	relies
on 	AK 	Steel 	Corp. 	v. 	United 	States 	to 	support 	its 	argument. 	AK
Steel 	Corp. 	v. 	United 	States, 	22 	CIT 	1070, 	1080, 	34 	F. 	Supp.2d
756, 765 (1998), rev’d on other grounds, 226 F.3d 1361 (Fed. Cir.
2000). 	Commerce maintains that the language of § 1677(28) is not
intended 	to 	address 	collapsing 	issues. 	Def.’s 	Mem. 	in 	Opp’n 	to
Pl.’s Rule 56.2 Mot. for J. on the Agency R. at 24, Feb. 13, 2015,
ECF No. 39 (“Def.’s Br.”). 	Commerce posits instead that 19 C.F.R.
§ 351.401 (f) controls the collapsing analysis. Id. at 25.
19 	C.F.R. 	§ 	351.401 	(f) 	provides 	that 	Commerce 	may
collapse 	affiliated 	producers 	where 	there 	“is 	a 	significant
potential for the manipulation of price or production.” 	19 C.F.R.
§ 	351.401 	(f)(1) 	(2014). 	In 	determining 	whether 	there 	is 	a
significant 	potential 	for 	manipulation 	Commerce 	considers 	the
following 	factors: 	(i) 	the 	level 	of 	common 	ownership; 	(ii) 	the
extent to which managerial employees or board members of one firm
sit 	on 	the 	board 	of 	directors 	of 	an 	affiliated 	firm; 	and 	(iii)
whether operations are intertwined, such as through the sharing of
sales 	information, 	involvement 	in 	production 	and 	pricing
decisions, the sharing of facilities or employees, or significant
transactions between the affiliated producers. 	19 C.F.R. § 351.401
(f).
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Zhongya 	misinterprets 	the 	Court’s 	holding 	in 	AK 	Steel
Corp., 22 CIT at 1080, 34 F. Supp.2d at 764-65. 	Although the Court
in 	AK 	Steel 	Corp. 	noted 	that 	§ 	1677(28) 	leaves 	Commerce 	the
discretion 	to 	collapse, 	it 	also 	recognized 	that 	“there 	is 	no
explicit reference to collapsing in the legislative history [of 19
U.S.C. 	§ 	1677].” 	Id. 	In 	AK 	Steel 	Corp., 	the 	Court 	found 	that
Commerce 	previously 	published 	proposed 	rules 	to 	incorporate 	the
Uruguay Round Agreements Act amendments in 1996, which included a
codification of Commerce’s collapsing practice. 	Id. at n.22. 	The
proposed rule became codified in 19 C.F.R. § 351.401(f). Id. 	This
court 	finds 	that 	19 	C.F.R. 	§ 	351.401(f) 	controls 	the 	collapsing
analysis in the instant case, because the rule regarding collapsing
is codified in 19 C.F.R. § 351.401(f).
2. Affiliation
Commerce 	may 	collapse 	entities 	where 	the 	entities 	are
affiliated. 	19 	C.F.R. 	§ 	351.401 	(f)(1). 	“‘Affiliated 	persons’
and 	‘affiliated 	parties’ 	have 	the 	same 	meaning 	as 	in 	section
771(33) 	of 	the 	Act 	[19 	U.S.C. 	§ 	1677(33)]”. 	Ta 	Chen 	Stainless
Steel 	Pipe 	Ltd. 	v. 	United 	States, 	23 	CIT 	804, 	808 	(1999) 	(not
reported 	in 	Federal 	Supplement), 	aff’d, 	298 	F.3d 	1330 	(Fed. 	Cir.
2002). 	Commerce may find that “[t]wo or more persons directly or
indirectly 	controlling, 	controlled 	by, 	or 	under 	common 	control
with, any person” are affiliated under subsection (F) of 19 U.S.C.
§ 1677(33). 	19 U.S.C. § 1677(33) (F). 	Prior case law has approved
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a 	finding 	of 	company 	affiliation 	on 	the 	basis 	of 	ownership 	by 	a
single 	family 	under 	subsection 	(F). 	Ferro 	Union, 	Inc. 	v. 	United
States, 	23 	CIT 	178, 	194-95, 	44 	F.Supp.2d 	1310, 	1326 	(1999). 	In
cases 	where 	affiliation 	is 	found 	on 	the 	basis 	of 	ownership 	by 	a
single 	family, 	Commerce 	makes 	the 	legitimate 	choice 	to 	treat 	the
family 	grouping 	as 	a 	“person” 	under 	subsection 	(F). 	Id. 	at 	194-
95, 44 F.Supp.2d at 1326.
Zhongya argues that Commerce erroneously found that the
companies were affiliated under § 1677(33)(F), because Commerce’s
treatment 	of 	a 	family 	grouping 	as 	a 	person 	is 	contrary 	to 	law.
Pl.’s Br. at 27. 	Zhongya contends that the decision in Ferro Union
Inc. does not demonstrate that the singular “person” in the statute
needs 	to 	be 	interpreted 	in 	the 	plural 	to 	facilitate 	statutory
intent. 	Pl.’s 	Br. 	at 	28; 	see 	also 	Ferro 	Union 	Inc. 	v. 	United
States, 23 CIT 178, 194, 44 F.Supp.2d 1310, 1326 (1999).
Contrary 	to 	Zhongya’s 	assertion, 	the 	decision 	in 	Ferro
Union 	Inc. 	supports 	the 	proposition 	that 	the 	singular 	person 	in
the 	statute 	can 	be 	interpreted 	in 	the 	plural 	to 	facilitate
statutory 	intent. 	Ferro 	Union 	Inc., 	23 	CIT 	at 	194, 	44 	F. 	Supp.2d
at 1326. As the Court noted in Ferro Union Inc., the intent of 19
U.S.C. 	§ 	1677(33) 	was 	to 	identify 	control 	exercised 	through
corporate or family groupings. Id. 	By interpreting “family” as a
control 	person, 	Commerce 	was 	giving 	effect 	to 	this 	intent. 	Id.
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Thus, Commerce’s treatment of the Kwong family grouping as a person
is not contrary to law. 	See id.
Zhongya 	next 	argues 	that 	Commerce’s 	finding 	of
affiliation 	is 	not 	supported 	by 	substantial 	evidence, 	because
Commerce does not cite evidence showing that Zhongya, Guang Ya, or
Xinya has the potential to control any of the others. Pl.’s Br. at
31. 	According 	to 	19 	U.S.C. 	§ 	1677(33)(G) 	“a 	person 	shall 	be
considered 	to 	control 	another 	person 	if 	the 	person 	is 	legally 	or
operationally 	in 	a 	position 	to 	exercise 	restraint 	or 	direction
over 	the 	other 	person.” 	19 	U.S.C. 	§ 	1677(33)(G). 	To 	determine
whether 	control 	exists 	Commerce 	may 	consider 	whether 	“family
groupings” 	are 	present; 	however, 	Commerce 	is 	precluded 	from
finding 	control 	“unless 	the 	relationship 	has 	the 	potential 	to
impact 	decisions 	concerning 	the 	production, 	pricing, 	or 	cost 	of
the 	subject 	merchandise 	or 	foreign 	like 	product.” 	19 	C.F.R. 	§
351.102(b)(3). 	Given 	that 	the 	Kwong 	family 	grouping 	owns 	nearly
[[ 	]] 	of 	Guang 	Ya, 	Zhongya, 	and 	Xinya, 	the 	court 	holds 	that
Commerce’s finding was reasonable. 	See id. 	Since the Kwong family
grouping 	controls 	the 	companies, 	the 	court 	finds 	that 	Commerce’s
affiliation finding is supported by substantial evidence. 	See id.
3. 	Collapsing
Commerce 	may 	collapse 	affiliated 	producers 	where 	there
“is 	a 	significant 	potential 	for 	the 	manipulation 	of 	price 	or
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production.” 	19 	C.F.R. 	§ 	351.401 	(f)(1). 	Zhongya 	challenges
Commerce’s 	decision 	to 	collapse 	arguing 	that 	there 	is 	no
significant potential for the manipulation of price or production.
Pl.’s Br. at 36-46.
In determining whether there is a significant potential
for manipulation Commerce considers the following factors: (i) the
level 	of 	common 	ownership; 	(ii) 	the 	extent 	to 	which 	managerial
employees 	or 	board 	members 	of 	one 	firm 	sit 	on 	the 	board 	of
directors of an affiliated firm; and (iii) whether operations are
intertwined, 	such 	as 	through 	the 	sharing 	of 	sales 	information,
involvement 	in 	production 	and 	pricing 	decisions, 	the 	sharing 	of
facilities 	or 	employees, 	or 	significant 	transactions 	between 	the
affiliated 	producers. 	19 	C.F.R. 	§ 	351.401 	(f). 	“These 	factors
are 	considered 	by 	Commerce 	in 	light 	of 	the 	totality 	of 	the
circumstances; no one factor is dispositive in determining whether
to collapse the producers.” 	Koyo Seiko Co. Ltd. v. United States,
31 CIT 1512, 1535, 516 F.Supp.2d 1323, 1346 (2007) aff’d, 551 F.3d
1286 (2008). 	“The regulation’s list of factors is non-exhaustive
and 	merely 	suggests 	three 	factors 	for 	Commerce 	to 	examine 	in
establishing 	potential 	control.” 	Catfish 	Farmers 	of 	America 	v.
United States, 33 CIT 1258, 1266, 641 F.Supp. 2d 1362, 1372 (2009).
Although 	“common 	family 	ownership 	alone 	provides 	an 	insufficient
basis to collapse entities” such ownership is a “positive indicator
of the significant potential for manipulation.” 	Id. at 1265, 641
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F.Supp. 2d at 1371. 	“[T]he existence of the family group, and the
significant 	controlling 	ownership 	by 	the 	family 	members,
reasonably supports Commerce’s collapsing decision.” 	Id.
Zhongya 	argues 	that 	there 	is 	no 	common 	ownership 	among
the 	collapsed 	companies, 	because 	a 	different 	person 	owns 	each 	of
the 	three 	companies. 	Pl.’s 	Br. 	at 	38. 	Nevertheless, 	Commerce
found that the Kwong family grouping holds nearly [[ 	]] common
ownership 	of 	Guang 	Ya, 	Zhongya, 	and 	Xinya 	in 	its 	Memorandum 	for
Preliminary Results and confirmed this finding in its Final Results
of 	Administrative 	Review. 	Decision 	Memorandum 	for 	Preliminary
Results 	of 	Antidumping 	Duty 	Administrative 	Review: 	Aluminum
Extrusions 	from 	the 	PRC 	2010/12 	at 	8, 	A-570-967, 	(June 	3, 	2013);
see 	also, 	Antidumping 	IDM, 	at 	18. 	The 	court 	rejects 	Zhongya’s
argument, 	because 	it 	ignores 	the 	fact 	that 	the 	Kwong 	family
grouping 	owns 	nearly 	[[ 	]] 	of 	the 	three 	companies, 	Zhongya,
Guang 	Ya, 	and 	Xinya. 	See 	Catfish 	Farmers, 	33 	CIT 	at 	1265, 	641
F.Supp. 2d at 1371. 	Such controlling ownership by the Kwong family
members 	is 	a 	positive 	indicator 	of 	the 	significant 	potential 	for
manipulation. See id.
In addressing the second factor, Zhongya argues that no
managerial employees or board members of one firm sits on the board
of directors of another firm. Pl.’s Br. at 39. 	Even if Zhongya is
correct in this assertion, “there is no applicable precedent that
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Court No. 	14-00043 	Page 14
requires 	overlapping 	boards 	of 	directors 	to 	support 	a 	collapsing
determination. 	The 	regulation’s 	list 	of 	factors 	is 	non-
exhaustive. . . .” Catfish Farmers, 33 CIT at 1266, 641 F.Supp. 2d
at 	1372. 	Here, 	members 	of 	the 	Kwong 	family 	are 	managers 	and
members 	of 	the 	board 	of 	directors 	in 	all 	three 	companies. 	This
supports 	a 	conclusion 	that 	there 	is 	a 	significant 	potential 	for
manipulation. 	See 	id. 	(finding 	a 	significant 	potential 	for
manipulation where a family group held senior leadership positions
in 	the 	companies 	at 	issue). 	Furthermore, 	as 	Commerce 	points 	out
in its brief, members of the Kwong family group continued to serve
on 	the 	boards 	of 	the 	Guang 	Ya 	and 	Zhongya. 	Preliminary
Determination Regarding Affiliation and Collapsing at 7-8, A-570-
967, 	(June 	3, 	2012). 	Accordingly, 	the 	court 	finds 	that 	a
reasonable 	reading 	of 	the 	record 	supports 	the 	agency’s 	finding
that there is a significant potential for manipulation with regards
to the second § 351.401(f)(2) factor.
With regards to the third factor, Zhongya claims that it
had 	no 	transactions 	with 	Xinya 	or 	Guang 	Ya 	during 	the 	review
period. 	Pl.’s 	Br. 	at 	41. 	Zhongya 	also 	“certified 	that 	going
forward it will not engage in any such transactions.” Id. 	Zhongya
further 	argues 	that 	Commerce 	“found 	no 	evidence 	of 	[Zhongya’s]
relationships 	with 	Asia 	Aluminum 	Holdings, 	New 	Asia, 	[Xinya] 	and
GYG [Guang Ya].” Rec. App. to Pl. Zhongya’s Rule 56.2 Mem. For J.
on the R., Ex. 1, at 7, Verification Report, January 28, 2010, ECF
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Court No. 	14-00043 	Page 15
No. 	29. 	(“Verification 	Report”). 	Zhongya 	claims 	that 	although
there 	was 	a 	transaction 	between 	a 	sibling 	and 	a 	spouse 	of 	a
sibling, the transaction was neither an export transaction nor did
it involve the subject merchandise. Pl.’s Br. at 46 n.95. Zhongya
asserts 	that 	this 	transaction 	involved 	investing 	in 	futures, 	not
the production or sale of aluminum extrusions. Id.
The Court finds that Zhongya’s arguments are unavailing
for 	several 	reasons. 	First, 	evidence 	regarding 	intertwined
operations during the period of review was limited due to Guang Ya
and Xinya’s failure to cooperate. 	Antidumping IDM at 20. 	Commerce
drew 	a 	reasonable 	inference 	from 	Guang 	Ya 	and 	Xinya’s 	lack 	of
cooperation. 	See 	id. 	Second, 	there 	was 	evidence 	that 	Xinya 	made
payments 	to 	Zhongya 	during 	the 	period 	of 	investigation. 	Public
App. 	to 	Def.’s 	Mem. 	in 	Opp’n 	to 	Pl.’s 	Rule 	56.2 	Mot. 	for 	J. 	on
Agency 	R., 	P.D. 	340, 	Attach. 	1 	at 	10, 	Apr. 	1, 	2013, 	ECF 	No. 	41.
Third, 	as 	Commerce 	found 	“[it] 	is 	not 	clear 	what 	the 	nature 	of
these 	payments 	are, 	as 	New 	Zhongya’s 	accounting 	books, 	the
explanation 	from 	the 	minority 	owner 	of 	New 	Zhongya, 	and 	the
explanation 	from 	the 	majority 	owner 	of 	New 	Zhongya 	were 	not
consistent.” 	Id. 	Commerce’s 	intertwined 	operations 	analysis 	is
reasonable, 	but 	even 	assuming 	arguendo 	that 	Commerce 	failed 	to
show 	intertwined 	operations, 	no 	one 	factor 	alone 	is 	dispositive.
See Koyo Seiko Co., 31 CIT at 1535, 516 F.Supp.2d at 1346 (holding
that Commerce considers these factors “in light of the totality of
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Court No. 	14-00043 	Page 16
the 	circumstances.”) 	In 	sum, 	the 	court 	finds 	that 	Commerce 	was
reasonable 	in 	determining 	that 	a 	significant 	potential 	for 	the
manipulation of price or production exists, as Guang Ya and Xinya
failed to cooperate, and Zhongya failed to adequately explain the
nature of payments made.
Finally, 	Zhongya 	presents 	four 	other 	challenges 	to
Commerce’s decision to collapse the three entities that the court
also 	finds 	unavailing. 	First, 	Zhongya 	argues 	that 	collapsing 	to
address 	possible 	future 	manipulation 	violates 	the 	statutory
mandate 	to 	calculate 	current 	dumping 	margins. 	Pl.’s 	Br. 	at 	9.
The 	court 	disagrees, 	as 	this 	Court 	previously 	recognized 	that
“Commerce's discretion to group or define companies arises out of
the ‘basic purposes of the statute—determining current margins as
accurately 	as 	possible.’” 	Fischer 	S.A. 	Comercio 	Industria 	v.
United States, 36 CIT ___, Slip Op. 12-59 (Apr. 30, 2012).
Second, Zhongya argues that the antidumping statute has
its own mechanisms to address concerns about manipulation without
resorting to collapsing, such as statutory administrative reviews,
statutory 	certifications, 	questionnaires, 	authorized 	channel
dumping 	margin 	rates, 	and 	various 	other 	provisions. 	Pl.’s 	Br. 	at
12-23. 	Zhongya 	notes 	that 	where 	a 	“statute 	explicitly 	provides
remedies 	for 	a 	concern, 	those 	are 	the 	remedies 	intended 	by 	the
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Court No. 	14-00043 	Page 17
statute, 	not 	unlisted 	ones, 	which 	are 	not 	authorized 	by 	the
statute.” Id. at 13.
Zhongya’s argument is without merit. 	The fact that there
are 	other 	mechanisms 	also 	addressing 	manipulation 	does 	not
preclude 	Commerce 	from 	collapsing 	if 	the 	conditions 	of 	19 	C.F.R.
§ 351.401(f) are met. 	19 C.F.R. § 351.401(f). 	The Court held in
Hontex that “[a]lthough the antidumping statute does not expressly
address 	the 	issue 	of 	collapsing, 	this 	court 	has 	found 	Commerce’s
collapsing 	practice, 	now 	found 	in 	its 	regulations, 	to 	be 	a
reasonable interpretation of the statute.” Hontex Enterprises Inc.
v. 	United 	States, 	27 	CIT 	272, 	289-90, 	248 	F.Supp.2d 	1323, 	1338
(2003). 	Therefore, 	Commerce 	acted 	in 	accordance 	with 	the
antidumping statute.
Third, 	Zhongya 	argues 	that 	Commerce’s 	decision 	not 	to
collapse in the CVD investigation is inconsistent with its decision
to 	collapse 	in 	the 	antidumping 	investigation. 	Pl.’s 	Br. 	at 	23.
When 	an 	agency 	treats 	two 	similar 	transactions 	differently, 	an
explanation 	for 	the 	agency’s 	actions 	must 	be 	forthcoming.
Baltimore 	Gas 	& 	Electric 	Co. 	v. 	Heintz, 	760 	F.2d 	1408, 	1418 	(4th
Cir. 	1985). 	Zhongya 	points 	out 	that 	antidumping 	and 	CVD
investigations 	are 	similar 	in 	that 	there 	is 	a 	concern 	regarding
shipping 	through 	a 	lower 	margin 	company. 	Pl.’s 	Br. 	at 	23.
Nevertheless, 	Commerce 	contends 	that 	there 	is 	no 	inconsistency,
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Court No. 	14-00043 	Page 18
because antidumping and CVD proceedings involve different analyses
with 	different 	criteria 	and 	separate 	remedies. 	Def.’s 	Br. 	at 	33-
34. 	The court finds that there is no inconsistency.
Although 	Zhongya 	may 	be 	correct 	in 	asserting 	that
antidumping and CVD cases may be similar in that there is a concern
regarding 	shipping 	through 	a 	lower 	margin 	company, 	Zhongya 	fails
to 	appreciate 	the 	significant 	differences 	between 	19 	C.F.R. 	§
351.401(f) 	and 	19 	C.F.R. 	§ 	351.525(b)(6)(vi) 	(2014) 	that 	led 	to
different 	outcomes 	with 	respect 	to 	the 	collapsing 	at 	issue 	here.
In an antidumping proceeding where the issue is whether to collapse
two 	or 	more 	companies, 	the 	emphasis 	is 	on 	determining 	the
following: whether the companies are affiliated under the statute;
whether 	the 	companies 	have 	facilities 	for 	similar 	or 	identical
products 	that 	would 	not 	require 	substantial 	retooling 	of 	either
facility 	in 	order 	to 	restructure 	manufacturing 	priorities; 	and
whether 	there 	is 	a 	significant 	potential 	for 	the 	manipulation 	of
price or production. 19 C.F.R. § 351.401(f).
In 	contrast, 	in 	a 	CVD 	case, 	the 	inquiry 	is 	limited 	to
whether 	there 	is 	cross-ownership 	between 	the 	companies, 	that 	is,
whether 	“one 	corporation 	can 	use 	or 	direct 	the 	individual 	assets
of 	the 	other 	corporation(s) 	in 	essentially 	the 	same 	ways 	it 	can
use 	its 	own 	assets.” 	19 	C.F.R. 	§ 	351.525(b)(6)(vi). 	Different
standards 	applied 	to 	the 	same 	facts 	may 	reasonably 	lead 	to
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Court No. 	14-00043 	Page 19
different 	outcomes. 	Thus, 	there 	is 	no 	inconsistency 	between
Commerce’s 	decision 	to 	treat 	the 	companies 	as 	a 	single 	entity 	in
the antidumping proceeding but not in the CVD investigation.
Ultimately, 	as 	discussed 	above, 	Commerce’s 	decision 	to
collapse 	the 	three 	companies 	was 	reasonable, 	because 	there 	was 	a
significant potential for manipulation.
4. Separate Rate Status
The 	final 	issue 	before 	the 	court 	is 	whether 	Commerce
acted 	appropriately 	in 	assigning 	the 	collapsed 	entity 	the 	China-
wide 	rate. 	Pl.’s 	Br. 	at 	47. 	Zhongya 	insists 	that 	“Commerce’s
practice 	is 	to 	treat 	companies 	who 	do 	not 	answer 	its 	request 	for
information (e.g., its separate rate questionnaire) as part of the
China-wide 	entity, 	and 	not 	eligible 	for 	collapsing 	with 	other
individually 	reviewed 	respondents.” 	Id. 	Zhongya 	notes 	that 	in
the 	original 	investigation 	of 	aluminum 	extrusions 	from 	China,
Commerce 	determined 	that 	a 	fourth 	company, 	Da 	Yang, 	owned 	and
managed by another Kwong family sibling, was uncooperative and so
subject 	to 	the 	China-wide 	rate 	and 	not 	eligible 	for 	collapsing
with 	Zhongya, 	Guang 	Ya, 	and 	Xinya. 	Preliminary 	Determination 	of
Sales at LTFV, 75 Fed. Reg. at 69,408. 	Therefore, Zhongya asserts
that 	“[b]ased 	on 	the 	similar 	noncooperativeness 	of 	Guang 	Ya 	and
Xinya 	in 	this 	administrative 	review, 	they 	too 	should 	be 	treated
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Court No. 	14-00043 	Page 20
like 	Da 	Yang, 	given 	the 	China-wide 	rate 	and 	not 	collapsed 	with
Zhongya.” Pl.’s Br. at 47.
Commerce 	insists 	that 	it 	“appropriately 	treated 	the
Guang 	Ya 	Group 	and 	Xinya 	as 	part 	of 	the 	collapsed 	entity.”
Antidumping 	IDM 	at 	21. 	Additionally, 	in 	response 	to 	Zhongya’s
argument, 	Commerce 	notes 	that 	its 	decision 	to 	treat 	Da 	Yang 	as
part 	of 	the 	China-wide 	entity, 	was 	made 	“prior 	to 	the 	point 	at
which 	the 	Department 	had 	acquired 	the 	information 	necessary 	to
consider 	whether 	Zhonyga, 	the 	Guang 	Ya 	Group 	and 	Xinya 	should 	be
treated 	as 	a 	single 	entity 	pursuant 	to 	19 	C.F.R. 	§ 	351.401(f).”
Id.; 	Def.’s 	Br. 	at 	33. 	Commerce 	contends 	that 	“allowing 	parties
to exit the collapsed entity as a consequence of their refusing to
participate 	would 	allow 	manipulation 	by 	the 	parties 	to 	obtain 	a
different rate than the one for the collapsed entity.” 	Def.’s Br.
at 32.
Commerce’s 	practice 	as 	to 	nonmarket 	economy 	(“NME”)
exporters 	is 	to 	presume 	that 	all 	exporters 	are 	under 	the 	control
of 	the 	central 	government 	until 	they 	demonstrate 	an 	absence 	of
government control. 	Air Prods. & Chems. Inc. v. United States, 22
CIT 433, 436, 14 F.Supp. 2d 737, 741 (1998); Sigma Corp. v. United
States, 117 F.3d 1401, 1405 (Fed. Cir. 1997). “Those exporters who
do not respond or fail to prove absence of de jure/de facto control
are 	assigned 	the 	country-wide 	rate. 	Therefore, 	a 	NME 	exporter
normally 	receives 	one 	of 	two 	rates: 	either 	the 	separate 	rate 	for
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Court No. 	14-00043 	Page 21
which 	it 	qualified 	or 	a 	country-wide 	rate.” 	Coalition 	for 	the
Pres. of Am. Brake Drum and Rotor Aftermkt. Mfrs. v. United States,
23 CIT 88, 107, 44 F.Supp.2d 229, 248 (1999).
Xinya did not answer any of Commerce’s questionnaires in
this review, including Commerce’s quantity and value and separate
rate 	questionnaires. 	Antidumping 	IDM 	at 	23. 	Guang 	Ya 	did 	not
answer 	Commerce’s 	main 	questionnaire 	or 	Commerce’s 	separate 	rate
questionnaire. 	Id. 	Commerce collapsed Xinya, Zhongya, and Guang
Ya 	in 	the 	Final 	Results 	of 	Administrative 	Review 	and 	found 	that
the 	companies 	were 	part 	of 	the 	PRC 	wide 	entity. 	Id. 	at 	15; 	Final
Results of Administrative Review, 79 Fed. Reg. at 99.
The court holds that Commerce’s collapsing determination
is 	consistent 	with 	its 	separate 	rate 	practice, 	because 	allowing
Guang 	Ya 	and 	Xinya 	to 	exit 	the 	collapsed 	entity 	would 	allow 	for
manipulation. 	Also, 	Commerce’s 	determination, 	that 	Da 	Yang 	is
part of the China-wide entity, was made prior to the point at which
Commerce 	had 	acquired 	the 	information 	necessary 	to 	consider
whether Zhonyga, Guang Ya, and Xinya should be treated as a single
entity 	pursuant 	to 	19 	C.F.R. 	§ 	351.401(f). 	Commerce 	reviews 	all
components 	that 	constitute 	the 	collapsed 	entity 	and 	any 	response
must 	include 	data 	for 	all 	companies 	that 	comprise 	the 	collapsed
entity. 	See 	Notice 	of 	Final 	Determination 	of 	Sales 	at 	LTFV:
Bicycles 	From 	the 	PRC, 	61 	Fed. 	Reg. 	19,026 	(Apr. 	30, 	1996), 	and
accompanying 	Issues 	and 	Decision 	Memorandum 	at 	cmt. 	8; 	see 	also
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Court No. 	14-00043 	Page 22
Light-Walled 	Rectangular 	Pipe 	and 	Tube 	from 	Turkey: 	Final
Determination 	of 	Sales 	at 	LTFV, 	69 	Fed. 	Reg. 	53,675 	(Sept. 	2,
2004); Issues and Decision Memorandum for the Final Determination
in the Antidumping Duty Investigation of Light-Walled Rectangular
Pipe and Tube from Turkey at cmt. 11, A-489-812, (Sept. 2, 2004).
Commerce 	reviewed 	all 	components 	that 	constitute 	the 	collapsed
entity, 	that 	is, 	Xinya, 	Guang 	Ya, 	and 	Zhongya. 	Any 	responses
should have included data for all three companies. 	Xinya and Guang
Ya did not respond with their data. 	Therefore, Commerce correctly
concluded that the collapsed entity failed to demonstrate that it
was eligible for a separate rate and thus it is part of the China-
wide entity.
CONCLUSION
Based 	on 	the 	foregoing, 	Commerce’s 	Final 	Results 	of
Administrative Review are AFFIRMED. 	Zhongya’s Motion for Judgment
on 	the 	Agency 	Record 	is 	DENIED. 	Judgment 	will 	be 	entered
accordingly.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: 	___________________
New York, New York
May 27, 2015
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