Ajinomoto North America, Inc. v. United States

Slip Op. 17 - 48
UNITED STATES COURT OF INTERNATIONAL TRADE
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AJINOMOTO NORTH AMERICA, INC., 	:
Plaintiff,:
v. 	: 	Court No. 14-00351
UNITED STATES, 	:
Defendant.:
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Opinion & Order
[Plaintiff’s motion for judgment on the agency record,
contesting surrogate-value determinations based thereon,
granted in part; remanded to the International Trade
Administration.]
Dated: April 25, 2017
Iain 	R. 	McPhie, 	Peter 	J. 	Koenig, 	and 	Nicholas 	Galbraith,
Squire Patton Boggs (US) LLP, Washington, D.C., for the plaintiff.
Alexander O. Canizares, Trial Attorney, Commercial Litigation
Branch, 	Civil 	Division, 	U.S. 	Department 	of 	Justice, 	Washington,
D.C.; 	Aman Kakar, Attorney, Office of the Chief Counsel for Trade
Enforcement & Compliance, U.S. Department of Commerce, of counsel;
for the defendant.
AQUILINO, 	Senior 	Judge: 	This 	action 	challenges
determinations 	of 	the 	International 	Trade 	Administration, 	U.S.
Department of Commerce (“ITA”) sub nom. Monosodium Glutamate From
the 	People’s 	Republic 	of 	China: 	Final 	Determination 	of 	Sales 	at
Less 	Than 	Fair 	Value 	and 	the 	Final 	Affirmative 	Determination 	of
Critical Circumstances, 79 Fed.Reg. 58326 (Sept. 29, 2014), Public
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Record 	Document 	(“PDoc”) 	279 	(“Final 	Determination”); 	Monosodium
Glutamate From the People’s Republic of China . . . : Antidumping
Duty Orders; and . . . Amended Final Determination of Sales at Less
Than Fair Value, 79 Fed.Reg. 70505 (Nov. 26, 2014), PDoc 270; and
Monosodium 	Glutamate 	From 	the 	People’s 	Republic 	of 	China: 	Second
Amended 	Final 	Determination 	of 	Sales 	at 	Less 	Than 	Fair 	Value 	and
Amended 	Antidumping 	Duty 	Order, 	80 	Fed.Reg. 	487 	(Jan. 	6, 	2015).
The plaintiff U.S. manufacturer of monosodium glutamate (“MSG”) and
petitioner below has interposed a motion for judgment on the agency
record 	in 	accordance 	with 	USCIT 	Rule 	56.2 	on 	its 	complaint,
confirming 	jurisdiction 	of 	this 	court 	pursuant 	to 	19 	U.S.C. 	§§
1516a(a)(2)(A)(i)(II) and (2)(B)(i) and 28 U.S.C. §1581¥c¦.
ITA 	is 	directed 	by 	statute, 	19 	U.S.C. 	§1677b(c)(1), 	to
seek 	surrogate 	values 	for 	the 	factors 	of 	production 	(“FOPs”) 	for
subject 	merchandise 	produced 	in 	or 	exported 	from 	a 	non-market
economy a la the People’s Republic of China (“PRC”). 	The plaintiff
alleges 	error 	in 	such 	valuations 	herein 	of 	corn, 	lignite, 	high-
protein scrap from sugar manufacture, and inland freight (including
alleged 	error 	in 	ITA’s 	rejection 	of 	factual 	information 	relating
thereto).
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I
With 	regard 	to 	the 	corn 	FOP, 	ITA’s 	preliminary
determination based it upon the actual weight of corn consumption
by “Meihua” 1 , the proceeding’s mandatory respondent. 	See Prelim.
Analysis Memo (May 7, 2014), CDoc 109, at 7-8, 303. 	For the Final
Determination, 	the 	agency 	used 	Meihua’s 	standard 	weight 	of 	corn
consumption rather than the actual weight. See Meihua Analysis Memo
for the Final Determination (Sept. 22, 2014), PDoc 257, at 5. 	See
also 	Allegation 	of 	Ministerial 	Errors 	Memo 	(Nov. 	20, 	2014), 	PDoc
266, 	at 	2. 	The 	plaintiff 	argues 	this 	amounted 	to 	deviation 	from
ITA’s policy of calculating surrogate values based upon producers’
actual production experiences.
Without conceding error, the defendant requests voluntary
remand in order to consider this argument in the first instance. As
its 	“concern” 	appears 	“substantial 	and 	legitimate”, 	see 	SKF 	USA
Inc. 	v. 	United 	States, 	254 	F.3d 	1022, 	1029 	(Fed.Cir. 	2001), 	the
request for that purpose can be, and it hereby is, granted.
1 	“Meihua” consists of Langfang Meihua Bio-Technology Co.,
Ltd., Tongliao Meihua Biological SCI-TECH Co., Ltd., Meihua Group
International 	Trading 	(Hong 	Kong) 	Limited, 	Meihua 	Holdings 	Group
Co., 	Ltd., 	Meihua 	Holdings 	Group 	Co., 	Ltd., 	Bazhou 	Branch. 	See
Prelim. Decision Memo (May 1, 2014), PDoc 194, at 8-9.
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II
The 	plaintiff 	challenges 	ITA’s 	reliance 	upon
“coalspot.com” to value the lignite FOP by Meihua. 	It argues that
those data are flawed because they (1) reflect “estimated prices,
not 	the 	required 	real 	prices”; 	(2) 	are 	derived 	from 	“Indonesian
coal 	reference 	prices”; 	(3) 	are 	export 	prices 	“while 	[agency]
precedent 	is 	to 	use 	domestic 	or 	import 	prices”, 	and 	(4) 	are 	not
clearly exclusive of taxes. 	The plaintiff also argues ITA should
have used Indonesian import price data under HTS 2702.10 or similar
import data from other countries.
Substantial evidence supports ITA’s decision to rely upon
coalspot.com, 	however. 	It 	found 	that 	those 	data 	met 	each 	of 	the
factors 	of 	reliability 	it 	generally 	considers: 	they 	reflected 	a
broad 	market 	average, 	were 	publicly 	available, 	were 	product
specific, were exclusive of duties, and were contemporaneous with
the 	period 	of 	investigation. 2 	Issues 	and 	decision 	memorandum
accompanying 	Final 	Determination 	(“IDM”), 	p. 	25. 	ITA 	considered
2 	ITA’s 	practice 	is 	to 	test 	proposed 	FOP 	values 	to
determine if they reflect (1) a broad market average, (2) publicly
available information, (3) product specificity, (4) tax and duty-
free 	neutrality, 	and 	(5) 	contemporaneity 	with 	the 	period 	of
investigation 	or 	review. 	E.g., 	Notice 	of 	Final 	Determination 	of
Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater
Shrimp From the People’s Republic of China, 69 Fed.Reg. 70997 (Dec.
8, 	2004), 	and 	accompanying 	issues 	and 	decision 	memorandum 	(“I&D
Memo”) at cmt 1.
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the 	lack 	of 	clarity 	as 	to 	whether 	the 	data 	excluded 	taxes 	and
determined 	that 	they 	were 	nevertheless 	the 	best 	available 	record
information, 	based 	upon 	its 	consideration 	of 	all 	of 	the 	factors.
See id.
The 	plaintiff 	argues 	that 	the 	coalspot.com 	data 	are
“estimates”, 	contending 	they 	are 	“based 	not 	on 	real 	prices”.
However, ITA found a notation on the coalspot.com printout in the
record to indicate that the prices therein “constitute coal prices
for spot sales”, i.e., prices based on actual sales in March 2014.
See Meihua’s Surrogate Country and Surrogate Value Cmts (April 7,
2014), PDoc 	126, at Ex. 9, p. 5.
Plaintiff’s position focuses primarily on ITA’s contrary
analysis 	in 	Certain 	Polyester 	Staple 	Fiber 	from 	the 	People’s
Republic of China, 78 Fed.Reg. 2366 (Jan. 11, 2013), I&D Memo (Jan.
4, 	2013) 	at 	cmt. 	1 	(“Polyester 	Staple 	Fiber”), 	a 	previous
antidumping-duty investigation, asserting that using coalspot.com
is contrary to its valuation of Indonesian steam coal therein. 	In
that matter, the agency calculated a surrogate value for steam coal
used 	to 	produce 	synthetic 	staple 	fibers. 	See 	PDoc 	145. 	Noting
that 	it 	prefers 	actual 	transaction 	prices, 	ITA 	declined 	to 	use
prices 	sourced 	from 	the 	Indonesia 	Minister 	of 	Energy 	and 	Mineral
Resources 	of 	the 	Republic 	of 	Indonesia 	(ESDM), 	which 	“contains
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information 	from 	international 	benchmark 	steam 	coal 	indexes 	and
certain 	brand 	name 	prices, 	rather 	than 	actual 	transactions
involving 	parties 	in 	Indonesia 	. 	. 	. 	and 	some 	of 	the 	ESDM 	values
appear 	to 	be 	derived 	from 	government 	indexes 	based 	on
non-Indonesian 	reference 	values”. 	Id. 	at 	5-6. 	ITA 	thereupon
concluded 	that 	Global 	Trade 	Atlas 	data 	were 	the 	best 	information
available. Id.
Here, 	the 	defendant 	responds 	that 	the 	agency 	did 	not
specifically 	consider 	coalspot.com 	in 	Polyester 	Staple 	Fiber 	and
that, 	although 	those 	data 	regarding 	lignite 	were 	sourced 	from
Indonesia’s 	Director 	General 	of 	Mineral 	and 	Coal, 	it 	is 	unclear
whether they are substantively equivalent to the ESDM data related
to 	steam 	coal 	in 	Polyester 	Staple 	Fiber. 	The 	defendant 	thus
contends 	there 	is 	no 	clear 	basis 	to 	assume 	that 	ITA’s 	concerns
about the ESDM data would or should extend to the coalspot.com data
at bar.
The 	plaintiff 	considers 	this 	dissembling, 	arguing 	that
the coalspot.com data suffer from precisely the same flaws as did
the 	pricing 	data 	ITA 	rejected 	in 	Polyester 	Staple 	Fiber, 	to 	wit,
the 	reported 	price 	is 	calculated 	"based 	on 	January 	2013 	HBA/HPB
Index”, 	the 	source 	is 	identified 	as 	“The 	Directorate 	General 	of
Mineral, 	Coal 	and 	Geothermal, 	Ministry 	of 	Energy 	and 	Mineral
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Resources” (i.e., ESDM), and HBA is defined as an average of “four
international 	coal 	indices” 	(i.e., 	non-Indonesian 	reference
values), including ICI 1, Platts 5900, New Castle Export Index, and
Global Coal New Castle Index.
Be that as it may, notwithstanding the disadvantages of
the ESDM data identified in Polyester Staple Fiber as compared with
actual 	transactions, 	ITA 	did 	not 	declare 	that 	it 	would 	never 	use
international indexes and company-specific brand prices. 	Suffice
it to state here that there are imperfections in the available data
of 	record, 	and 	it 	was 	not 	unreasonable 	for 	the 	agency 	to 	prefer
coalspot.com as sufficiently reliable when compared to other data.
The 	plaintiff 	suggests 	that 	ITA 	always 	prefers 	import 	prices,
however there is administrative precedent for using export prices
as the “best” information available, and the use of export prices
here 	was 	within 	its 	discretion. 	See, 	e.g., 	Certain 	Cut-to-Length
Carbon Steel Plate from Romania, 70 Fed.Reg. 12651 (March 15, 2005)
(final admin. review), and accompanying I&D Memo at cmt. 3.
Similarly, ITA’s rationale as to why it did not use the
2012 Indonesian import data for HTS 2702.10 urged by the plaintiff
is 	supported 	by 	substantial 	evidence. 	It 	noted 	that 	those 	data
were not contemporaneous with the period of investigation (indeed,
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Indonesia apparently had no imports under HTS 2702.10 in 2013). The
defendant notes that, although not dispositive, contemporaneity of
data is an important factor when evaluating surrogate values. Def’s
Resp. 	at 	19, 	referencing 	Certain 	Polyester 	Staple 	Fiber 	From 	The
People’s 	Republic 	of 	China, 	75 	Fed.Reg. 	1336 	(Jan. 	11, 	2010) 	and
accompanying I&D Memo at cmt. 1.
Perhaps 	more 	tellingly, 	the 	lignite 	imported 	into
Indonesia 	in 	2012 	under 	HTS 	2702.10 	consisted 	in 	total 	volume 	to
the equivalent of a single shipment3 of 3.28 metric tons (MT), see
IDM 	at 	26, 	which 	low 	volume 	is 	consistent 	with 	the 	fact 	that
Indonesia is a large domestic producer of that coal. See Meihua’s
Resubmission 	of 	Rebuttal 	Surrogate 	Country 	and 	Surrogate 	Value
Comments (April 30, 2014), PDoc 188, Ex. 8 (Indonesia is the second
largest 	producer 	of 	lignite). 	Given 	record 	evidence 	that 	that
nation produces approximately 160 million MT of lignite a year, it
was not unreasonable for ITA to rely upon broad and contemporaneous
data 	instead 	of 	a 	single 	shipment 	of 	3.28 	MT 	of 	coal 	made 	before
the period of investigation.
3 	The plaintiff argues there is no indication in the import
data 	itself 	that 	these 	import(s) 	only 	constituted 	a 	“single
shipment” 	and 	that 	ITA 	identifies 	no 	basis 	in 	the 	record 	for
concluding 	that 	3.28 	MT 	of 	imports 	does 	not 	represent 	commercial
quantities, 	but 	this 	argument 	is 	over 	a 	tangential 	matter 	in 	the
determination that does not merit relief.
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The 	plaintiff 	suggests 	that 	ITA 	“could 	have” 	used 	coal
import data from other countries such as Thailand, Colombia, South
Africa, 	or 	Ecuador. 	It 	contends 	that 	such 	secondary 	surrogate
country 	data 	may 	be 	used 	“where 	an 	input 	cannot 	be 	valued 	in 	the
selected surrogate country.” Pl’s Br. at 15. 	The court, however,
cannot 	supplant 	a 	reasonable 	determination 	on 	the 	sufficiency 	of
the coalspot.com data that comports with the agency’s practice of
preferring 	to 	value 	all 	FOPs 	from 	a 	single 	primary 	surrogate
country 	whenever 	possible 	in 	accordance 	with 	19 	C.F.R.
§351.408(c)(2). 	IDM 	at 	26. 	See 	Jiaxing 	Bro. 	Fastener 	Co. 	v.
United States, 38 CIT ___, ___, 11 F.Supp.3d 1326, 1332–33 (2014),
aff’d, 	822 	F.3d 	1289 	(Fed.Cir. 	2016). 	Which 	is 	another 	way 	of
stating 	that 	the 	possibility 	of 	drawing 	two 	inconsistent
conclusions 	from 	the 	evidence 	does 	not 	prevent 	an 	administrative
agency's 	approach 	from 	being 	supported 	by 	substantial 	evidence.
Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966).
The plaintiff contends that ITA should have used pricing
data 	from 	other 	countries 	on 	the 	record 	as 	“benchmarks 	to 	assess
the accuracy of the Indonesian import values from 2012.” Pl’s Br.
at 16. 	This argument appears to be raised for the first time now,
as it does not appear in case briefs before the agency. See Pet’s
Case 	Br. 	(July 	31, 	2014) 	at 	12-14, 	PDoc 	229; 	Pet’s 	Rebuttal 	Br.
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(Aug. 	7, 	2014) 	at 	1-8, 	PDoc 	232. 	If 	so, 	it 	must 	be 	deemed 	waived
for lack of exhaustion at the administrative level. 	See 28 U.S.C.
§2637(d). 	See, 	e.g., 	Mittal 	Steel 	Point 	Lisas 	Ltd. 	v. 	United
States, 	548 	F.3d 	1375, 	1383-84 	(Fed.Cir. 	2008) 	(finding 	that 	a
party failed to exhaust its administrative remedies when it chose
not to comment on ITA’s draft remand results); Rhone Poulenc, Inc.
v. 	United 	States, 	899 	F.2d 	1185, 	1191 	(Fed.Cir. 	1990) 	(appellant
waived argument even though it was characterized as “simply another
angle to an issue” raised). 	In any event, there appears to be no
contrary evidence of record that might have compelled ITA to employ
benchmarks to assess the accuracy of data that it had identified as
reliable by other means.
III
The 	plaintiff 	next 	challenges 	ITA’s 	selection 	of
Indonesian HTS 2303.10.9000 as the best available to determine the
surrogate value of high-protein scrap. 	It argues that Indonesian
HTS 	2303.20.0000 	covering 	“waste 	of 	sugar 	manufacture” 	was 	the
correct classification to value that scrap, but that, because there
were no Indonesian imports in this classification during the period
of 	investigation, 	ITA 	should 	have 	used 	the 	comparable 	HTS
classification for Thailand. 	It further argues that ITA’s analysis
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of 	the 	use 	of 	high-protein 	scrap 	in 	Meihua’s 	production 	process
“confuses inputs with outputs.” 	Pl’s Br. at 18. 	According to the
plaintiff, starch milk is the input for this production step, while
glucose, a form of sugar, is the output, and thus the high-protein
scrap by-product constitutes waste of “sugar manufacture.” Id. at
19.
In 	essence, 	plaintiff’s 	position 	is 	that 	a 	more
product-specific 	HTS 	category 	could 	have 	been 	used 	but 	was 	not.
Even 	assuming 	that 	other 	data 	existed 	that 	were 	more 	specific 	to
the 	product, 	that 	is 	insufficient 	to 	disturb 	the 	administrative
selection of the best available information based upon its weighing
of 	all 	relevant 	factors 	so 	long 	as 	that 	determination 	is 	a
reasonable choice. 	See, e.g., Nation Ford Chemical Co. v. United
States, 	166 	F.3d 	1373, 	1377 	(Fed.Cir. 	1999) 	(ITA 	has 	“wide
discretion 	in 	the 	valuation 	of 	factors 	or 	production”). 	The
plaintiff 	does 	not 	take 	issue 	with 	ITA’s 	conclusion 	that 	the
Indonesian 	HTS 	2303.10.9000 	classification 	meets 	the 	other 	four
factors 	that 	the 	agency 	typically 	considers. 	See 	IDM 	at 	28. 	In
particular, ITA found that that classification was representative
of 	broad 	market 	averages, 	publicly 	available, 	tax 	and 	duty
exclusive, 	and 	contemporaneous 	with 	the 	period 	of 	investigation.
Id.
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The 	defendant 	argues 	the 	product 	specificity 	factor
weighs in favor of the data ITA used and against those advocated by
the 	plaintiff, 	explaining 	that, 	unlike 	the 	Thailand 	HTS 	category
urged by the plaintiff, Indonesian HTS 2303.10.9000 is specific to
the primary surrogate country and is consistent with the agency’s
preference for primary surrogate country data to reduce distortion.
Def’s 	Resp. 	at 	22, 	citing 	19 	C.F.R. 	§351.408(c)(2). 	Moreover, 	it
continues, ITA determined that Indonesian HTS 2303.10.9000 properly
applied 	to 	the 	high-protein 	scrap 	used 	by 	Meihua, 	based 	upon 	its
analysis 	of 	the 	record 	evidence 	regarding 	Meihua’s 	manufacturing
process. 	Id., referencing IDM at 28.
That appears to be the case. 	The record shows that the
high-protein scrap in question is a byproduct that emerges in the
production of MSG. 	See Meihua’s Section D Questionnaire Response
(March 10, 2014), CDoc 61, at 21 and Ex. D-1; Meihua Analysis Memo,
CDoc 	226, 	at 	5 	and 	Attachment 	IV. 	Based 	on 	the 	confidential
record, it was not unreasonable for ITA to use an HTS category that
includes both “residues of starch manufacture” and “other wastes of
sugar” to value the high-protein scrap, and the plaintiff does not
persuade 	from 	the 	record 	that 	the 	high-protein 	scrap 	can 	only 	be
classified as a “waste of sugar manufacture” under Indonesian HTS
2303.20.0000 	or 	that 	the 	glucose 	Meihua 	produced 	constitutes
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“sugar” 	under 	that 	tariff 	item. 	See 	Pl’s 	Br. 	at 	18-19. 	ITA’s
“judgment call” that Indonesian HTS 2303.10.9000 was preferable to
other evidence is one that cannot here be overturned. See Lifestyle
Enterprise, 	Inc. 	v. 	United 	States, 	751 	F.3d 	1371, 	1378 	(Fed.Cir.
2014) (“[w]hen all the available information is flawed in some way,
[ITA] must make a judgment call as to what constitutes the ‘best’
information”).
IV
On 	plaintiff’s 	challenge 	to 	ITA’s 	valuation 	of 	inland
freight, 	it 	preliminarily 	valued 	such 	freight 	using 	a 	rate 	from
Doing Business Indonesia 2013 (“DBI”), a World Bank report, based
on a distance of 14.42 kilometers (8.96 miles) from Jakarta center
to 	that 	city’s 	commercial 	shipping 	port. 	For 	the 	Final
Determination, 	the 	agency 	added 	to 	the 	record 	the 	distances 	from
several “periurban districts to the port of Jakarta” and, based on
the average thereof, it revised the inland freight calculation to
65.08 	kilometers 4 . 	ITA 	claimed 	that 	the 	propriety 	of 	those
4 	IDM 	at 	7. 	These 	ITA 	obtained 	from 	the 	record of the
inland freight considered in Frozen Fish Fillets From the Socialist
Republic 	of 	Vietnam: 	Final 	Results 	of 	Antidumping 	Duty
Administrative Review and New Shipper Review; 2011-2012 (April 7,
2014). 	The inland freight determination thereof was challenged on
other 	grounds 	and 	recently 	sustained 	sub 	nom. 	An 	Giang 	Fisheries
Imp. & Exp. Joint Stock Co. v. United States, 40 CIT ___, ___, 179
F.Supp.3d 1256, 1284 (2016).
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additions 	was 	consistent 	with 	the 	DBI 	methodology 	because 	that
report 	states 	that 	the 	businesses 	responding 	to 	the 	survey 	are
located “in the periurban areas of the economy’s largest business
city.” 	IDM at 7.
The 	“periurban 	area” 	of 	Jakarta 	is 	a 	fuzzy 	concept.
Certainly, 	it 	is 	unclear 	from 	the 	record 	what 	that 	area 	actually
encompasses: the DBI study does not define the geographical ambit
of 	the 	term 	as 	applied 	to 	Jakarta, 	and 	the 	papers 	herein 	do 	not
clarify. 	As it is unclear whether the distances ITA placed on the
record 	are 	actually 	from 	“periurban” 	areas 	of 	Jakarta, 	its
statement to that effect in its Freight Distance Memo dated August
14, 2014 is simply conclusory or ipse dixit.
The 	fact 	that 	those 	distances 	were 	used 	in 	a 	different
proceeding 	is 	of 	no 	moment 	here. 	In 	the 	final 	analysis, 	ITA’s
reliance 	upon 	the 	information 	it 	placed 	on 	the 	record, 	without
clarification that those areas are, in fact, “periurban” areas of
Jakarta, 	does 	not 	amount 	to 	substantial 	evidence 5 . 	This 	is
5 	See, 	e.g., 	U.S. 	Magnesium 	LLC 	v. 	United 	States, 37 CIT
___, 	___, 	895 	F.Supp.2d 	1319, 	1328 	(2013). 	Furthermore, 	even
assuming ITA could reasonably interpret that the “periurban area”
of Jakarta encompasses the locations and distances it placed on the
record, it is unclear whether they provide a representative sample
of 	“typical” 	exporters 	to 	the 	port 	of 	Jakarta, 	and 	plaintiff’s
lament 	in 	that 	regard 	that 	ITA’s 	average 	does 	not 	include 	any
distance 	from 	within 	the 	city 	of 	Jakarta 	itself 	is 	valid 	to 	the
(continued...)
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Court No. 14-00351 	Page 15
particularly true of the Cianjur location, which is apparently in
a province that does not even border on the city of Jakarta. 	See
Pl’s Br. at 9. 	In short, ITA has not met its burden to reasonably
select 	the 	“best 	available 	information” 	in 	setting 	the 	distance
used 	to 	calculate 	a 	value 	for 	inland 	freight. 	See 	19 	U.S.C.
§1677(c)(1)(B). 	See also Blue Field (Sichuan) Food Industrial Co.
v. United States, 37 CIT ___, ___, 949 F.Supp.2d 1311, 1336 (2013)
(“[t]he court will uphold [ITA]’s surrogate value choices [only] if
the 	agency 	fairly 	considered 	record 	evidence 	when 	choosing
surrogates, 	so 	that 	a 	reasonable 	mind 	could 	accept 	[it]s
findings”).
Noted 	in 	passing 	here 	is 	plaintiff’s 	further 	argument
that regardless of whether the “periurban area” of Jakarta includes
both locations within Jakarta and in other jurisdictions, the TAB
Survey “makes clear” that the DBI report is based on data collected
only 	from 	business 	located 	“within 	the 	city 	limits”, 	i.e.,
collected 	only 	for 	companies 	“located 	in” 	or 	“operating 	in” 	the
5 	(...continued)
extent ITA did not include the preliminary distance from the center
of Jakarta to its port in its average calculation. 	See Pl’s Br. at
9.
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Court No. 14-00351 	Page 16
city 	of 	Jakarta. 6 	However, 	it 	does 	not 	necessarily 	follow 	that
“located in” and “operating in” can only be interpreted as “within
the city limits”, as argued by the plaintiff, as opposed to ITA’s
“looser” 	interpretation 	of 	such 	terms 	as 	encompassing 	the
“periurban area” of the city of Jakarta, which is consistent with
what the DBI survey claims to be based upon.
V
The 	plaintiff 	challenges 	ITA’s 	rejection 	of 	its 	August
28, 	2015 	submission 	of 	factual 	data 	for 	purposes 	of 	calculating
inland freight costs. 	It argues that its submission consisted of
“factual 	information 	relating 	to 	distances 	from 	locations 	other
6 	See 	Pet’s 	Distance 	Cmts, 	PDoc 	248, 	at 	Ex. 	1. 	The TAB
Survey template provides the following definitions:
DESTINATION: Company “ABC” located in «Survey_City» seeks
to trade with «DB_tab_PrepopulationEconomyName»’s largest
overseas trading partner via ocean transportation through
its 	main 	port 	(in 	the 	case 	of 	landlocked 	countries 	the
port is the most commonly used in a neighboring country).
. . .
COMPANY “ABC”:
· 	operates 	in 	«Survey_City», 	and 	employs 	60 	workers 	or
more;
· is a private, limited liability company, registered and
operating under the commercial laws of the country;
· is domestically-owned with no foreign ownership;
· exports over 10% of its sales to international markets;
does 	not 	operate 	within 	an 	export 	processing 	zone 	or
industrial estate with special export/import privileges.
See PDoc 248 at Ex. 1 (plaintiff’s emphasis).
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Court No. 14-00351 	Page 17
than 	those 	included 	in 	[ITA]’s 	filing” 	that 	“fit 	squarely 	within
the 	scope” 	of 	ITA’s 	invitation 	for 	submissions 	and 	19 	C.F.R.
§351.301(c)(4). 	Pl’s Br. at 19.
Elaborating, 	the 	plaintiff 	argues 	that 	nothing 	in 	that
section 351.301(c)(4) precluded submission of alternative data to
calculate 	freight. 	It 	points 	out 	that, 	while 	19 	C.F.R.
§351.301(c)(3)(iv) 	limits 	a 	party 	from 	placing 	“additional,
previously 	absent-from-the-record 	alternative 	surrogate 	value
information” on the record to “rebut, clarify, or correct” factual
information 	placed 	on 	the 	record 	by 	another 	interested 	party,
section 351.301(c)(4) contains no such limitation in cases in which
data are placed on the record by the agency.
The defendant contends ITA’s determination to reject the
submission was proper and consistent with regulation, and that the
plaintiff does not dispute that its August 28 proffer consisted of
an alternative to the information on the record. 	See Pl’s Br. at
19 	(data 	related 	to 	“distances 	from 	locations 	other 	than 	those
included 	in 	[ITA]’s 	filing”). 	The 	defendant 	argues 	this 	“new
factual 	information” 	did 	not 	respond 	to 	the 	factual 	information
offered by ITA and that plaintiff’s objective was plainly to expand
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Court No. 14-00351 	Page 18
the scope of the record and to persuade the agency to use such new
information and revise surrogate value accordingly. 7
The 	plaintiff, 	nonetheless, 	asserts 	that 	19 	C.F.R.
§351.301(c)(4) authorized its submission of alternative data. 	That
provision 	was 	codified 	in 	April 	2013 	as 	part 	of 	several 	rule
changes governing time limits for submitting factual information in
antidumping-duty 	and 	countervailing-duty 	proceedings.8 	Among 	the
purposes of the changes, the plaintiff points out, was to “ensure
that 	[ITA] 	has 	sufficient 	opportunity 	to 	review 	submissions 	of
factual information.” 	Definition of Factual Information and Time
Limits 	for 	Submission 	of 	Factual 	Information, 	78 	Fed.Reg. 	21246,
21246 	(April 	10, 	2013). 	See 	id. 	at 	21250. 	They 	identified 	five
categories of factual information with associated time limits. 	19
C.F.R. §351.301(c)(1)-(5). 	Submissions of factual information to
value 	factors 	of 	production 	are 	due 	no 	later 	than 	30 	days 	before
7 	The 	defendant 	emphasizes 	that 	the 	plaintiff used that
information 	to 	calculate 	a 	new 	surrogate 	value. 	See 	Distance
Comments, PDoc 247; Pet’s Resp. to Rejection Memo, PDoc 251.
8 	See 	19 	C.F.R. 	§351.301. 	“Factual information” 	for
purposes 	of 	this 	section 	is 	defined, 	in 	relevant 	part, 	as
“[e]vidence, 	including 	statements 	of 	fact, 	documents 	and 	data
placed 	on 	the 	record 	by 	[ITA], 	or, 	evidence 	submitted 	by 	any
interested party to rebut, clarify or correct such evidence placed
on 	the 	record 	by 	[ITA].” 	19 	C.F.R. 	§351.102(b)(21)(iv); 	See
subsection 351.301(a).
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Court No. 14-00351 	Page 19
the scheduled date of the preliminary results of review. 	Section
351.301(c)(3)(i). 	Under subsection (c)(3)(iv), an interested party
has 	“one 	opportunity 	to 	submit 	publicly 	available 	information 	to
rebut, clarify, or correct” factual information submitted to value
factors of production, but such party “may not submit additional,
previously 	absent-from-the-record 	alternative 	surrogate 	value
information”. 	Similarly, 	and 	of 	more 	relevance 	here, 	section
351.301(c)(4) provides as follows:
Factual 	information 	placed 	on 	the 	record 	of 	the
proceeding by [ITA]. [ITA] may place factual information
on 	the 	record 	of 	the 	proceeding 	at 	any 	time. 	An
interested party is permitted one opportunity to submit
factual information to rebut, clarify, or correct factual
information 	placed 	on 	the 	record 	of 	the 	proceeding 	by
[ITA] by a date specified by the Secretary.
On the interpretation of 19 C.F.R. §351.301¥c¦ generally,
the 	parties 	argue 	over 	Husteel 	Co. 	v. 	United 	States, 	which
considered 	and 	rejected 	argument 	over 	whether 	the 	specific
provision 	of 	19 	C.F.R. 	§351.301(c)(1)(v) 	permitted 	parties 	to
submit alternative surrogate data. 	39 CIT ___, ___, 98 F.Supp.3d
1315, 	1341-42 	(2015) 	(holding 	that 	a 	party’s 	submission 	of 	a
financial statement was a “substitute data source” and not “factual
information 	to 	rebut, 	clarify, 	or 	correct” 	for 	purposes 	of 	that
provision).
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Court No. 14-00351 	Page 20
As 	noted 	therein, 	“‘[r]ebuttal 	evidence’ 	is 	generally
understood 	to 	be 	‘evidence 	offered 	to 	disprove 	or 	contradict 	the
evidence 	presented 	by 	an 	opposing 	party.’” 	39 	CIT 	at 	___, 	98
F.Supp.3d at 1341, quoting Black's Law Dictionary (10th ed. 2014).
The defendant here contends Husteel stands for the proposition that
a substitute data source does not constitute “factual information
to 	rebut, 	clarify, 	or 	correct” 	previously 	submitted 	factual
information. 	The 	plaintiff 	contends 	Husteel’s 	rejection 	of 	a
party’s information submitted per 19 C.F.R. §351.301(c)(1)(v) was
not 	because 	the 	rejected 	information 	was 	alternative 	surrogate-
value 	information, 	as 	ITA 	claims, 	but 	because 	the 	rejected
information did not relate to, and therefore did not “rebut”, the
information to which it purportedly responded.
Plaintiff’s 	is 	the 	more 	persuasive 	characterization 	of
Husteel. 	In that case, the respondent NEXTEEL provided a breakdown
of 	its 	cost 	and 	sale 	information 	in 	a 	supplemental 	questionnaire
response. 	The 	petitioner 	then 	responded 	by 	submitting 	a 	“large
amount 	of 	new 	factual 	information”, 	including 	a 	financial
statement, “purporting to ‘rebut, clarify or correct’” the evidence
submitted 	in 	the 	questionnaire 	response. 	39 	CIT 	at 	___, 	98
F.Supp.3d at 1338. 	The court found that the financial statement,
which 	ITA 	used 	to 	calculate 	constructed 	value 	(“CV”) 	profit, 	did
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Court No. 14-00351 	Page 21
not “disprove or contradict” the limited sales and cost information
in 	the 	questionnaire 	response 	and 	therefore 	did 	not 	constitute
“factual information to rebut, clarify or correct” that information
as required by the regulation. 9
In the matter at bar, however, there is no question, and
the 	defendant 	does 	not 	convincingly 	dispute, 	that 	the 	periurban
distance 	information 	submitted 	by 	the 	petitioner 	responded 	and
related directly to the information placed on the record by ITA. It
was, 	in 	short, 	intended 	to 	“rebut, 	clarify 	or 	correct 	factual
information placed on the record of the proceeding by [ITA]”, see
19 C.F.R. §351.301(c)(4), notwithstanding that it includes a “new”
surrogate-value calculation that can be characterized as such, but
it was intended as evidence contradicting ITA’s calculation.
The defendant considers Baroque Timber Indus. (Zhongshan)
Co. v. United States, 35 CIT ___, ___, 925 F.Supp.2d 1332, 1349-50
9 	39 	CIT 	at 	___, 	98 	F.Supp.3d 	at 	1341-43. 	Specifically,
the court noted:
NEXTEEL 	was 	asked 	to 	break 	down 	its 	costs 	and 	sales 	by
country of sale and product type. Little if anything in
U.S. 	Steel's 	factual 	submission, 	and 	especially 	the
evidence in Tenaris’s 2012 financial statement, disproves
or 	contradicts 	NEXTEEL's 	answers 	to 	those 	questions.
Rather, U.S. Steel's submission constituted a substitute
data source that [ITA] could use to calculate CV profit.
Emphasis added.
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Court No. 14-00351 	Page 22
(2013), 	instructive. 	Considered 	therein 	was 	the 	meaning 	of 	the
phrase 	“factual 	information 	to 	rebut, 	clarify, 	or 	correct” 	in
section 	351.301(c)(1) 	of 	the 	regulation 	governing 	factual
information submitted in response to questionnaires. 	Rejecting the
respondent’s argument that any type of information may be provided
to 	rebut, 	clarify, 	or 	correct 	information 	under 	section
351.301(c)(1), Baroque Timber sustained ITA’s interpretation of the
phrase in subsection 351.301(c)(1) as excluding new surrogate-value
data. 	That decision deferred to ITA’s interpretation of the former
regulation as prohibiting the introduction of new surrogate-value
data where it was silent on the question and ITA’s interpretation
was not “erroneous or inconsistent” with the regulation itself.
Here, the plaintiff points out, and this court concurs,
that ITA’s interpretation is now “erroneous or inconsistent” with
regard 	to 	the 	new 	regulation 	because 	the 	new 	one 	is 	no 	longer
silent 	on 	the 	question. 	Instead, 	the 	agency 	has 	adopted 	one
provision, 	to 	wit, 	19 	C.F.R. 	§351.301(c)(3)(iv) 	(information
submitted by parties), that expressly prohibits the submission of
“additional, 	previously 	absent-from-the-record 	alternative
surrogate value information” as well as the use of new information
to value FOPs when submitted to rebut, clarify or correct such FOP
information, 	while 	the 	provision 	at 	issue 	here, 	19 	C.F.R.
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Court No. 14-00351 	Page 23
§351.301(c)(4) 	(information 	submitted 	by 	ITA), 	has 	no 	such
prohibition. 	The 	defendant 	fails 	to 	explain 	how 	ITA 	can
reasonably 	interpret 	the 	prohibition 	of 	19 	C.F.R.
§351.301(c)(3)(iv) 	to 	apply 	to 	19 	C.F.R. 	§351.301(c)(4) 	when 	the
agency expressly chose to include it only in subsection (c)(3)(iv).
Furthermore, defendant's argument that interpreting the
regulation 	to 	permit 	parties 	to 	submit 	new 	surrogate-value
information would defeat the purpose of encouraging the parties to
submit 	information 	within 	time 	limits 	is 	baseless. 	The 	argument
impermissibly 	begs 	the 	question 	of 	what 	the 	deadline 	is, 	because
the 	petitioner 	did, 	in 	fact, 	submit 	the 	information 	within 	the
deadlines: 	parties 	have 	only 	“one 	opportunity” 	to 	submit
additional information in response to ITA’s placing information on
the 	record 	viz. 	19 	C.F.R. 	§351.301(c)(3)(iv) 	(“[a]n 	interested
party 	is 	permitted 	one 	opportunity 	to 	submit 	publicly 	available
information”), 	and 	parties 	will 	presumably 	do 	so. 	Additionally,
the logic of the argument falls short because parties will not know
at the time of the normal deadline whether such an opportunity will
be 	afforded 	in 	a 	given 	proceeding, 	and 	they 	therefore 	will 	have
every incentive to submit all relevant information by the original
deadline to ensure that it is considered. 	The defendant argues the
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Court No. 14-00351 	Page 24
petitioner 	did 	have 	an 	opportunity 	to 	submit 	inland-freight
distance 	information 	at 	the 	onset 	when 	it 	submitted 	its 	initial
surrogate-value data due April 7, 2014, however the specific issue
of distances relevant to the “periurban area of Jakarta” does not
appear to have arisen until ITA placed its memorandum on the file
directly, with new information specific thereto. 	ITA’s claim of a
procedural 	impediment 	in 	rejecting 	the 	petitioner’s 	submission,
rather than considering it in the context of information intended
to rebut, clarify or correct, was therefore in error.
VI
In view of the foregoing, plaintiff’s motion for judgment
on the agency record must be granted to the extent of remand to ITA
for reconsideration of the issues of (1) the appropriate corn FOP
weight 	and 	(2) 	the 	calculation 	of 	an 	inland-freight 	surrogate
value. 	The results of this remand shall be filed on or before July
31, 	2017, 	with 	any 	comments 	thereon 	due 	within 	30 	days 	of 	the
filing thereof.
So ordered.
Dated: 	New York, New York
April 25, 2017
/s/ Thomas J. Aquilino, Jr.
Senior Judge
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