Haixing Jingmei Chemical Products Sales Co., Ltd. v. United States

Slip. Op. 17-159
UNITED STATES COURT OF INTERNATIONAL TRADE
HAIXING JINGMEI CHEMICAL
PRODUCTS SALES CO., LTD.,
Plaintiff,
v.
UNITED STATES
Defendant,
and
ARCH CHEMICALS, INC.,
Defendant-Intervenor.
Before: Mark A. Barnett, Judge
Court No. 16-00259
PUBLIC VERSION
OPINION AND ORDER
[Plaintiff’s request for remand is granted for redetermination by the Department of
Commerce whether Plaintiff’s sales subject to the new shipper review were bona fide.]
Dated: December 5, 2017
Gregory S. Menegaz, deKieffer & Horgan, PPLC, of Washington, DC, argued for
Plaintiff. With him on the brief were J. Kevin Horgan and Alexandra H. Salzman.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, argued for Defendant. With him on the brief
were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was
Jessica DiPietro, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Peggy A. Clarke, Law Offices of Peggy A. Clarke, of Washington, DC, argued for
Defendant-Intervenor.
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Barnett, Judge: Plaintiff, Haixing Jingmei Chemical Products Sales Co., Ltd.
(“Plaintiff” or “Jingmei”) challenges aspects of the Department of Commerce’s
(“Commerce” or “the agency”) final determination in the 2014-2015 antidumping new
shipper review of calcium hypochlorite from the People’s Republic of China (“PRC”). 1
See Calcium Hypochlorite from the People’s Republic of China, 81 Fed. Reg. 83,804
(Dep’t Commerce Nov. 22, 2016) (final decision to rescind the new shipper review of
Haixing Jingmei Chemical Products Sales Co., Ltd.; 2014-2015) (“Final Rescission”),
CJA 1, PJA 1, PR 120, ECF No. 36; and the accompanying Issues and Decision Mem.,
A-570-008 (Nov. 14, 2016) (“I&D Mem.”), CJA 2, PJA 2, PR 117, ECF No. 36.
Defendant United States (“the Government”) and Defendant-Intervenor Arch Chemicals,
Inc. (“Arch Chemicals”) filed responses in opposition, to which Plaintiff filed a reply.
Confidential Def.’s Mem. in Opp’n to Pl.’s Mot. for J. upon the Agency R. (“Def.’s
Opp’n”), ECF No. 31; Confidential Def.-Int. Arch Chemicals, Inc. Br. in Resp. to Pl.’s
Mot. for J. on the Agency R. (“Def.-Int’s Opp’n.”), ECF No. 29; Reply Br. of Pl. Haixing
Jingmei Chemical Products Sales Co., Ltd (“Pl.’s Reply Br.”), ECF No. 35. No party
requested oral argument. The court, sua sponte, held a telephone conference with
counsel for Plaintiff, the Government, and Arch Chemicals on November 8, 2017. ECF
No. 39. The matter is now ready for decision.
1 The administrative record for this case is divided into a Public Administrative Record
(“PR”), ECF No. 18-3, and a Confidential Administrative Record (“CR”), ECF No. 18-2.
Parties further submitted joint appendices containing record documents cited in their
briefs. See Public Joint Appendix (“PJA”), ECF No. 37; Confidential Joint Appendix
(“CJA”), ECF No. 36. The court provides PR, CR, and PJA numbers where available,
but references the confidential versions of the relevant record documents throughout
this opinion, unless otherwise specified.
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I. 	Background
In January 2015, Commerce issued an antidumping duty order on calcium
hypochlorite from the PRC. Calcium Hypochlorite from the People’s Republic of China,
80 Fed. Reg. 5,085 (Dep’t Commerce Jan. 30, 2015) (antidumping duty order) (“ADD
Order”). 2 	In July 2015, Plaintiff and its affiliated producer, Haixing Eno Chemical Co.,
Ltd. (“Eno”) filed a request for a new shipper review and identified two sales that would
be subject to their review request. See Entry of Appearance and Corrected Request for
New Shipper Review (July 20, 2015) (“NSR Request”) at 2 and Ex. 2, CJA 5, CR 2, PJA
5, PR 2, ECF No. 36. In response, Commerce initiated the new shipper review on
August 26, 2015 for the period of review (“POR”) July 25, 2014 through June 30, 2015.
Calcium Hypochlorite from the People’s Republic of China, 80 Fed. Reg. 51,774 (Dep’t
Commerce Aug. 26, 2015) (initiation of antidumping duty new shipper review; 2014–
2015) (“Initiation Notice”), CJA 8, PJA 8, PR 8, ECF No. 36.
Upon initiating the review, Commerce issued a standard new shipper review
questionnaire to Plaintiff. See Dep’t Commerce Initial Questionnaire (“IQ”), CJA 9, PJA
9, PR 9, ECF No. 36. In Appendix IX of the questionnaire, Commerce requested
information specific to the importer of the subject merchandise, 3 including the importer’s
2 The scope of the order covers “calcium hypochlorite, regardless of form (e.g., powder,
tablet (compressed), crystalline (granular), or in liquid solution), whether or not blended
with other materials, containing at least 10 percent available chlorine measured by
actual weight,” and also “includes bleaching powder and hemibasic calcium
hypochlorite.” ADD Order, 80 Fed. Reg. 5,085. Commerce established a PRC-wide
entity weighted average antidumping duty margin of 210.52 percent. Id. at 5,086.
3 The sales under review involved Eno and Jingmei as producer and seller, respectively;
[[ 	]], a Hong Kong based wholesaler of swimming pool supplies,
denoted here for confidentiality purposes as Company X; and [[ 	]], a
U.S. customer, denoted here for confidentiality purposes as Company Y. 	See
Jingmei’s Section C Questionnaire Response (Oct. 16, 2015) at C-1, CJA 11, CR 10-23,
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history, organization, ownership, and affiliations; sales during the POR; other purchases
of subject merchandise; and resale of the subject merchandise. IQ, App. IX. The
questionnaire directed either Plaintiff or, if Plaintiff was unable, Company X to answer
the questions and incorporate the answers in Plaintiff’s response. Id. at 1. In
responding to a question soliciting the identity of other companies from which it
purchased the subject merchandise during or subsequent to the POR, and the quantity,
value and date of each purchase, Company X asserted that it considers such
information “to be highly confidential and sensitive.” SAQR at 26. Rather than provide
such information, Company X stated that it “confirmed that the prices as from Jingmei
were within the normal range of [its] prices from other suppliers.” Id.
Commerce issued a supplemental questionnaire to Company X requesting the
same and additional information, but Company X again refused to respond due to the
confidentiality of the information. Jingmei’s Suppl. Section A Questionnaire Resp. (Dec.
28, 2015) (“Suppl. SAQR”) at 21, CJA 13, CR 37-40, PJA 13, PR 38, ECF No. 36.
Commerce also issued Appendix IX to Company Y, but did not receive a complete
response. Memorandum from Kabir Archuletta, Senior Int’l Trade Analyst, to James C.
Doyle, Director, titled Bona Fide Nature of the Sales in the Antidumping Duty New
Shipper Review of Calcium Hypochlorite from the People’s Republic of China: Haixing
Jingmei Chemical Products Sales Co., Ltd. (June 20, 2016) (“Bona Fide Mem.”) at 4-5,
CJA 3, CR 63, PJA 3, PR 102, ECF No. 36. Specifically, Company Y withheld the
identity of its downstream U.S. customers and specific details and documentation
PJA 11, ECF No. 36; Jingmei’s Section A and App. IX Resp. (Sep. 16, 2016) (“SAQR”)
at 23-24, CJA 10, CR 6-8, PJA 10, PR 14-15, ECF No. 36.
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regarding any purchases of subject merchandise from Company X subsequent to the
POR, asserting that it considers the requested information to be “highly confidential.”
Jingmei’s Customer’s Suppl. Questionnaire Resp. (Dec. 28, 2015) at 3, 6, CJA 14, CR
41, PJA 14, PR 39, ECF No. 36.
Commerce informed Plaintiff in a supplemental questionnaire that the information
requested from Company X and Company Y is necessary for Commerce’s analysis in
the new shipper review. Dep’t Commerce Suppl. Section A, C, and Customer
Questionnaire (Mar. 28, 2016) at 6, CJA 16, CR 50, PJA 16, PR 84, ECF No. 36. It
advised Plaintiff that if Commerce “do[es] not receive complete responses to [its]
requests for information or [it] determine[s] that [Plaintiff’s] efforts to obtain the
information [were] not sufficient [it] may use adverse facts available.” 	Id. Moreover, in
supplemental questionnaires to Company X and Company Y, Commerce advised the
companies that their proprietary information would be protected by an administrative
protective order, and that the companies’ continued failure to provide the requested
information may affect Commerce’s determination as to the bona fide nature of
Plaintiff’s sales under review. Id. at 7, 9. Following the companies’ deficient responses,
Commerce asked Plaintiff to describe its efforts to ensure full cooperation from
Company X and Company Y, to which Plaintiff responded that it had undertaken its best
efforts to ensure full cooperation, “but because these downstream customers are not
affiliated with Jingmei, Jingmei has no control over them.” Jingmei Suppl.
Questionnaire Response (April 20, 2016) at 1, CJA 19, CR 60, PJA 19, PR 94, ECF No.
36-1. Plaintiff produced e-mail communication documenting its efforts to encourage
Company X to provide the requested information; however, its efforts were futile
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because Company X responded by stating: “Our accounting ledgers contain other
financial information not relevant to those two purchases. We will not give this kind of
information to anybody, not even to the lawyers or [Commerce].” Id., Ex. SQ8-1
On June 27, 2016, Commerce preliminarily rescinded the new shipper review
based on its determination that it lacked sufficient information to conduct the bona fide
analysis of Jingmei’s new shipper sales. Calcium Hypochlorite from the People’s
Republic of China, 81 Fed. Reg. 41,522 (Dep’t Commerce June 27, 2016) (prelim. intent
to rescind the new shipper review of Haixing Jingmei Chemical Products Sales Co.,
Ltd.), CJA 22, PJA 22, PR 104, ECF No. 36-1 (“Preliminary Rescission”), and
accompanying Prelim. Decision Mem., A-570-008 (June 20, 2016), CJA 21, PJA 21, PR
101, ECF No. 36-1. 4 Information and documentation Commerce deemed necessary but
missing included accounting documentation from Company X and Company Y to
substantiate the information reported by Jingmei. Bona Fide Mem. at 5-8.
Following briefing by Plaintiff and Arch Chemicals, Commerce adopted its
preliminary findings without change. Final Rescission, 81 Fed. Reg. at 83,805 (“Based
on [Commerce’s] complete analysis of all of the information and comments on the
record of this review, we make no changes to the Preliminary Rescission.”). Commerce
concluded that it could not substantiate the price of the sales, which parties incurred
expenses and antidumping duties, whether the subject merchandise was sold at a
profit, and whether the sales were typical. I&D Mem. at 6-10. Commerce did not find
that the sales under review were not bona fide. See id. at 6-10, 13. Citing to Company
4 Because the relevant transactions involved business proprietary information,
Commerce provided a full discussion of its preliminary findings in a separate
memorandum. Prelim. Decision Mem. at 4; see also Bona Fide Mem.
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X and Company Y’s “partial responses to a number of our requests for information” and
“explicit[] refus[al] to tie any of the reported expenses to their financial records,”
Commerce explained that there was insufficient information to conduct the bona fide
analysis of Jingmei’s sales during the POR, and thus rescinded the review. Id. at 10.
Commerce did not use facts available, with or without an adverse inference, in
rescinding the review. Id. at 9, 13.
Jingmei challenges Commerce’s Final Rescission, arguing that it provided the
information necessary for Commerce to perform the bona fide analysis and that
Commerce did not need accounting records from Company X and Company Y. Pl.
Haixing Jingmei Chemical Products Sales Co., Ltd Mot. for J. on the Agency R., ECF
No. 22; Pl. Haixing Jingmei Chemical Products Sales Co., Ltd Mem. in Supp. of Mot. for
J. on the Agency R. (“Pl.’s Br.”) at 13-22. Jingmei additionally argues that it sold the
subject merchandise at a profit and that it should not be penalized for the failure of its
unaffiliated customer (Company X) or the customer’s customer (Company Y) to
cooperate with Commerce’s information requests. Pl.’s Br. at 22-32.
II. 	Jurisdiction & Standard of Review
The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930,
as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), 5 and 28 U.S.C. § 1581(c) (2012).
The court will uphold an agency’s determination that is supported by substantial
evidence on the record and otherwise in accordance with law. 19 U.S.C.
§ 1516a(b)(1)(B)(i). “Substantial evidence is ‘such relevant evidence as a reasonable
5 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code,
2012 edition, and all references to the United States Code and the Code of Federal
Regulations are to the 2012 edition, unless otherwise stated.
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mind might accept as adequate to support a conclusion.’” Huaiyin Foreign Trade Corp.
(30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co.
v. NLRB, 305 U.S. 197, 229 (1938)). It “requires more than a mere scintilla,” but “less
than the weight of the evidence.” Nucor Corp. v. United States, 34 CIT 70, 72, 675 F.
Supp. 2d 1340, 1345 (2010) (quoting Altx, Inc. v. United States, 370 F.3d 1108, 1116
(Fed. Cir. 2004)).
In determining whether substantial evidence supports Commerce’s
determination, the court must consider “the record as a whole, including evidence that
supports as well as evidence that ‘fairly detracts from the substantiality of the
evidence.’” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003)
(quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)).
However, that a plaintiff can point to evidence that detracts from the agency’s
conclusion or that there is a possibility of drawing two inconsistent conclusions from the
evidence does not preclude the agency’s finding from being supported by substantial
evidence. Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir.
1984) (citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 619-20 (1966)). The court
may not “reweigh the evidence or . . . reconsider questions of fact anew.” Downhole
Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 1377 (Fed. Cir. 2015) (quoting
Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807,
815 (Fed. Cir. 1992)); see also Usinor v. United States, 28 CIT 1107, 1111, 342 F.
Supp. 2d 1267, 1272 (2004) (citation omitted) (the court “may not reweigh the evidence
or substitute its own judgment for that of the agency”).
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III. 	Analysis
Jingmei’s primary challenge to Commerce’s Final Rescission is to Commerce’s
conclusion that it did not have sufficient evidence to determine whether Jingmei’s POR
sales were bona fide. Jingmei asserts that finding was unsupported by substantial
evidence and not in accordance with law. See Pl.’s Br. at 1, 11-22; Pl.’s Reply Br. at 3-
11. Commerce’s specific finding was: “we have determined to rescind this [new shipper
review] with respect to Jingmei” because “we requested but were not provided sufficient
information to conduct a bona fide analysis as required by the statute, and accordingly
cannot determine whether the new shipper sales of Jingmei are bona fide.” Final
Rescission, 81 Fed. Reg. at 83,805. Thus, the question posed by Jingmei’s challenge
is whether substantial evidence supports the agency’s determination to rescind the new
shipper review because the agency lacked sufficient information to conduct the bona
fide analysis. The court must conclude that the agency’s decision is unsupported by
substantial evidence and remands for a redetermination by the agency.
Pursuant to 19 U.S.C. § 1675(a)(2)(B)(i), if Commerce receives a request from a
new exporter or producer who did not export merchandise subject to an antidumping
duty order to the United States during the period of investigation, and it is not affiliated
with any exporter or producer that did export, Commerce must conduct a review to
establish an individual weighted-average dumping margin for that exporter or producer.
The provisions relating to new shipper reviews, 19 U.S.C. § 1675(a)(2)(B), were newly
added to the Tariff Act of 1930 by the Uruguay Round Agreements Act (“URAA”). See
URAA, Pub. L. No. 103-465, § 220, 108 Stat. 4809 (1904). These provisions are the
result of an attempt, during the Uruguay Round negotiations, to exempt new shippers
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from countrywide duty liability by requiring a new antidumping investigation along with a
separate finding of injury for each new shipper. URAA, Statement of Administrative
Action, H.R. Doc. No. 103-316, vol.1 at 875 (1994), reprinted in 1994 U.S.C.C.A.N.
4040, 4203 (“SAA”). 6 Instead, “[t]he United States agreed . . . to provide new shippers
with an expedited review that will establish individual dumping margins for such firms on
the basis of their own sales.” Id.
Initially, the statute permitted an importer to post a bond, in lieu of cash deposits,
to serve as security for the future payment of antidumping duties until the completion of
the new shipper review. See 19 U.S.C. § 1675(a)(2)(B)(iii) (2006) (suspended during
the period April 1, 2006 through June 30, 2009 by Pension Protection Act of 2006, Pub.
L. No. 109–280, § 1632(a), 120 Stat. 780, 1165 (2006)). Due to concerns about abuse
of this bonding privilege, 7 Commerce developed a bona fide test to analyze new shipper
6 The SAA “shall be regarded as an authoritative expression by the United States
concerning the interpretation and application of the Uruguay Round Agreements and
this Act in any judicial proceeding in which a question arises concerning such
interpretation or application.” 19 U.S.C. § 3512(d).
7 For example, one method of abuse by exporters subject to high antidumping duty
rates was to “enter into a scheme to structure a few sales to show little or no dumping”
and obtain an expedited new shipper review. H.R. Rep. No. 114-114, pt. 1, at 89
(2015). The atypical sales resulted in a zero or low antidumping duty rate. This allowed
the importer to bring large quantities of the subject merchandise into the United States
at “highly dumped . . . prices but with little or no cash deposit.” Id. By the time
Commerce conducted an annual review of those subsequent sales and assigned the
final duty rate, the importer could disappear or become nonresponsive, leaving Customs
and Border Protection unable to collect the duties. Id. While this example was
discussed in a May 2015 Report of the House Committee on Ways and Means, a May
2008 report by the U.S. Government Accountability Office estimated that abuse of the
new shipper bonding privilege was responsible for about 40 percent of the uncollected
antidumping or countervailing duties from fiscal years 2001 to 2007. U.S. Gov’t
Accountability Off., GAO-08-391, Antidumping and Countervailing Duties: Congress and
Agencies Should Take Additional Steps to Reduce Substantial Shortfalls in Duty
Collection 14, 25 (2008); see also Pension Protection Act § 1632(a),(b)(2)(a)
(suspending the bonding privilege during the period April 1, 2006 through June 30, 2009
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review sales and ensure that the sales under review were representative of the
shipper’s future commercial practices. 8 See e.g., H.R. Rep. No. 114-114, pt. 1 at 89
(addressing areas of abuse in new shipper reviews and discussing Commerce’s
practice of applying a bona fide test for new shipper review sales); Hebei New Donghua
Amino Acid, 29 CIT at 609, 374 F. Supp. 2d at 1338 (citation omitted) (upholding
Commerce’s bona fide sales test as within its statutory authority to ensure that the
antidumping calculation in a new shipper review is based on realistic figures and not on
sales that are atypical “of normal commercial transactions in the industry”); see also
Hebei New Donghua Amino Acid, 29 CIT at 613, 374 F. Supp. 2d at 1341-42 (stating
that without the bona fide factors “a firm intent on unfair competition would be free to
manipulate the antidumping duty regime by selling at a price between normal value and
the export prices of other subject firms and then lowering its price after obtaining an
advantageous cash deposit rate.”).
In an effort to address these concerns, in February 2016, Congress amended the
statute to eliminate the bonding privilege during new shipper reviews. See Trade
Facilitation and Trade Enforcement Act of 2015, Pub. L No. 114-125, § 433, 130 Stat.
in part due to “problem[s] in the collection of antidumping duties on imports from new
shippers”).
8 Commerce’s bona fide analysis employed a “totality of [the] circumstances” test to
evaluate whether the transactions were “commercially reasonable” or “atypical of
normal business practices.” Hebei New Donghua Amino Acid Co. Ltd. v. United States,
29 CIT 603, 610, 374 F. Supp. 2d 1333, 1339 (2005) (quoting Windmill Int’l PTE., Ltd. v.
United States, 26 CIT 221, 229, 193 F. Supp. 2d 1303, 1310-1311(2002)). Relevant
factors included: “(1) the timing of the sale, (2) the price and quantity[,] (3) the expenses
arising from the transaction, (4) whether the goods were resold at a profit, (5) and
whether the transaction was at an arm’s length basis.” Id. (citing Windmill Int'l PTE, 26
CIT at 227, 193 F. Supp. 2d at 1310; Am. Silicon Techs. v. United States, 24 CIT 612,
616, 110 F. Supp. 2d 992, 995. (2000)).
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122 (2016). Additionally, Congress codified Commerce’s bona fide analysis by adding a
new provision to the statute, 19 U.S.C. § 1675(a)(2)(B)(iv). Trade Facilitation and Trade
Enforcement Act, § 433; see also H.R. Rep. No. 114-114, pt. 1, at 89 (stating that the
new provision regarding bona fide sales “reflect[s] . . . Commerce’s current regulations
and practices in this area”). Currently, provided the new shipper has met the conditions
for requesting a new shipper review, the statute requires Commerce to determine any
weighted average dumping margin solely on the basis of bona fide sales to the United
States, and such determination is to be based on the following factors:
(I) the prices of such sales; (II) whether such sales were made in
commercial quantities; (III) the timing of such sales; (IV) the expenses
arising from such sales; (V) whether the subject merchandise involved in
such sales was resold in the United States at a profit; (VI) whether such
sales were made on an arms-length basis; and (VII) any other factor the
administering authority determines to be relevant as to whether such sales
are, or are not, likely to be typical of those the exporter or producer will
make after completion of the review.
19 U.S.C. § 1675(a)(2)(B)(iv) (2016). Commerce may rescind a review if it concludes
that “there has not been an entry and sale to an unaffiliated customer in the United
States of subject merchandise” during the period of review, and that “an expansion of
the normal period of review to include an entry and sale to an unaffiliated customer in
the United States of subject merchandise would be likely to prevent the completion of
the review within the [required] time limits.” 19 C.F.R. § 351.214(f)(2).
The issue, as it arises in this case, is whether Commerce properly rescinded the
new shipper review based upon its asserted inability to complete the bona fide analysis
because downstream customers of Jingmei declined to provide certain information
requested by the agency. Pl.’s Br. at 13-22. Jingmei complains that Commerce’s
determination is unsupported by substantial evidence because it had enough
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information to find Jingmei’s sales to be bona fide and did not need the information from
the downstream customers. Pl.’s Br. at 1, 13; Pl.’s Reply Br. at 3-11. The Government
and Arch Chemicals argue that the information Plaintiff provided was insufficient and
Plaintiff failed to meet its burden of proof in demonstrating that its sales were bona fide.
Def.’s Opp’n at 8,13-30; Def.-Int.’s Opp’n at 2, 4-9.
Commerce does not possess subpoena power to require the respondent or any
other interested party to respond to information requests. See Nan Ya Plastics Corp. v.
United States, 810 F.3d 1333, 1338 (Fed. Cir. 2016) (citing Rhone Poulenc, Inc. v.
United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990)). Rather, Congress gave the
agency the authority to use facts available to fill any gaps in the record and, when
certain conditions are present, to make an adverse inference in the selection of the
available facts (referred to as “adverse facts available” or “AFA”). See 19 U.S.C.
§§ 1677e(a),(b). In other words, Congress has established a statutory scheme in which
it ensured that the agency will have enough information to make its determinations,
whether provided by an interested party in response to an information request or
otherwise selected by the agency.
Prior actions to rescind new shipper reviews did not result from insufficient
information to determine whether the sales were bona fide. 9 	They resulted from a
finding that the initiation requirements were not met or, in many cases, that the sales
were not bona fide. As a consequence of the latter finding, the agency then determined
9 The court has not located any case in which Commerce rescinded a new shipper
review based on insufficient information to conduct the bona fide analysis. During the
telephone conference, neither Plaintiff’s nor Defendant’s counsel were able to direct the
court to any such cases.
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that there were no legitimate sales to review in the new shipper review. 10 That cannot
be said in this case. While Commerce claims it lacked sufficient information to find the
sales to be bona fide, it did not use facts available, with or without an adverse inference,
to fill any asserted gaps in the record. I&D Mem. at 9, 13. In light of this statutory
authority to provide gap-filling information on any record when and as justified, the court
cannot find that the agency’s decision to rescind the new shipper review due to
insufficient information is supported by substantial evidence. 11
During the telephone conference, the Government argued that Marvin Furniture
(Shanghai) Co. Ltd. v. United States, 36 CIT __, 867 F. Supp. 2d 1302 (2012), aff’d, 744
F.3d 1319 (Fed. Cir. 2014), and Qingdao Maycarrier Imp. & Exp. Co., Ltd. v. United
States, 37 CIT __, 949 F. Supp. 2d 1335 (2013), provide support for Commerce’s
decision to rescind the review based on insufficient information to conduct the bona fide
analysis. Marvin Furniture and Qingdao, however, are clearly distinguishable. In those
cases, Commerce did not rescind the review due to insufficient information to conduct
the bona fide analysis; it did not even reach that analysis. See Marvin Furniture, 867 F.
Supp. 2d at 1308; Qingdao, 949 F. Supp. 2d at 1339, 1341. Rather, Commerce
rescinded the new shipper reviews because the parties did not satisfy the statutory and
10 As this court has noted, “Commerce interprets the term ‘sale’ in [19 C.F.R.]
§ 351.214(f)(2)(i) to mean that a transaction it determines not to be a bona fide sale is,
for purposes of the regulation, not a sale at all.” Shijiazhuang Goodman Trading Co. v.
United States, 40 CIT __, __, 172 F. Supp. 3d 1363, 1373 (2016).
11 Jingmei did not expressly challenge Commerce’s legal authority to rescind the review
without determining that the POR sales were not bona fide, and the court does not
remand on that basis. However, if, upon remand, the agency continues to rescind the
new shipper review without making a finding that the sales are not bona fide, the
agency must clearly articulate the legal basis for its authority to rescind its review of the
sales in question.
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regulatory conditions for requesting a new shipper review. See Marvin Furniture, 867 F.
Supp. 2d at 1308; Qingdao, 949 F. Supp. 2d at 1339, 1341; see also 19 C.F.R. §
351.214 (outlining rules for requesting new shipper reviews). In contrast, in the instant
case, Commerce found that Plaintiff met the requirements for initiating a new shipper
review. Initiation Notice, 80 Fed. Reg. at 51,774 (“[Commerce] has determined that the
request meets the statutory and regulatory requirements for initiation.”). Thus, Marvin
Furniture and Qingdao are inapposite.
Finally, the court notes that in providing Commerce with the authority to use the
facts available, including the possibility of an adverse inference, Congress also imposed
certain limitations on the agency. For example, 19 U.S.C. § 1677e(a) provides that any
use of facts available is subject to § 1677m(d) regarding deficient submissions.
Moreover, the use of adverse inferences is subject to certain findings as to whether the
party failed to cooperate by not acting to the best of its ability and, in some cases, an
obligation to corroborate secondary information selected by the agency. See 19 U.S.C.
§§ 1677e(b),(c). By avoiding the use of facts available and, instead, rescinding the
review based on an asserted lack of information, the agency potentially evades these
statutory constraints while creating the effect of applying an adverse inference. By
remanding this determination to the agency to determine whether the sales in question
were bona fide, the court will be in a better position to evaluate whether that
redetermination is supported by substantial evidence and otherwise in accordance with
law.
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The remaining points addressed in Jingmei’s brief are deferred pending the
agency redetermination. To the extent that Jingmei continues to challenge the
redetermination, it should be clear in its briefing which issues it continues to challenge.
CONCLUSION AND ORDER
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Final Rescission is remanded to Commerce so that
it may determine whether Plaintiff’s sales during the period of review were bona fide as
discussed in Section III; it is further
ORDERED that Commerce shall file its remand redetermination on or before
March 5, 2018; and it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
56.2(h) and the court’s Standard Chambers Procedures.
/s/ 	Mark A. Barnett
Judge
Dated: December 5, 2017
New York, New York
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