Yancheng Hi-King Agriculture Developing Co., Ltd. v. United States

Slip Op. 21–
UNITED STATES COURT OF INTERNATIONAL TRADE
__________________________________________
:
XIPING OPECK FOOD CO., LTD., ET AL., 	:
:
Plaintiffs, 	:
:
and 	:
:
YANCHENG HI-KING AGRICULTURE 	: 	Before: Richard K. Eaton, Judge
DEVELOPING CO., LTD., 	:
: 	Consol. Court No. 19-00202
Consolidated Plaintiff, 	:
:
v. 	:
:
UNITED STATES, 	:
:
Defendant. 	:
__________________________________________:
OPINION
[U.S. Department of Commerce’s final results are sustained.]
 	 	 	 	 	 	 	Dated: 'HFHPEHU
Yingchao Xiao, Lee & Xiao, of San Marino, CA, argued for Plaintiffs Xiping Opeck Food
Co., Ltd., et al.
Adams C. Lee, Harris Bricken McVay Sliwoski, LLP, of Seattle, WA, argued for
Consolidated Plaintiff Yancheng Hi-King Agriculture Developing Co., Ltd.
Mollie L. Finnan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, D.C., argued for Defendant United States. With her on the
brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia
M.McCarthy, Assistant Director. Of counsel on the brief was Brendan Saslow, Office of the Chief
Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington,
D.C.
Eaton, Judge: This case involves the final results of the United States Department of
Commerce’s (“Commerce” or the “Department”) administrative review of the antidumping duty
order on freshwater crawfish tail meat from the People’s Republic of China (“China”) covering
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the period of September 1, 2017, through August 31, 2018. See Freshwater Crawfish Tail Meat
From the People’s Republic of China, 84 Fed. Reg. 58,371 (Dep’t Commerce Oct. 31, 2019)
(“Final Results”) and accompanying Issues and Decision Mem. (Oct. 25, 2019) (“Final IDM”),
PR 106.
Xiping Opeck Food Co., Ltd. (“Xiping Opeck”), Nanjing Gemsen International Co., Ltd.
(“Nanjing Gemsen”), Xuzhou Jinjiang Foodstuffs Co., Ltd. (“Xuzhou Jinjiang”) (collectively,
“Plaintiffs”), and Yancheng Hi-King Agriculture Developing Co., Ltd. (“Consolidated Plaintiff”
or “Hi-King”) are Chinese producers and exporters of freshwater crawfish tail meat that
participated in the underlying review and commenced this action contesting certain aspects of the
Final Results. Now before the court are motions for judgment on the agency record pursuant to
U.S. Court of International Trade Rule 56.2 filed by Plaintiffs and Hi-King. See USCIT R. 56.2;
see also Pls.’ Mem. Supp. Mot. J. Agency R., ECF No. 27-2 (“Pls.’ Br.”); Pls.’ Reply, ECF No.
42; Consol. Pl.’s Mem. Supp. Mot. J. Agency R., ECF No. 26 (“Consol. Pl.’s Br.”); Consol. Pl.’s
Reply, ECF No. 41. For the reasons set forth below, Commerce’s Final Results are sustained.
BACKGROUND
On September 11, 2018, Commerce published a notice of opportunity to request an
administrative review of the antidumping duty order on freshwater crawfish tail meat from China.
See 	Antidumping 	or 	Countervailing 	Duty 	Order, 	Finding, 	or 	Suspended 	Investigation;
Opportunity To Req. Admin. Rev., 83 Fed. Reg. 45,888 (Dep’t Commerce Sept. 11, 2018).
Plaintiffs requested a review of their sales during the period of review. See Req. for Admin. Rev.
(Sept. 18, 2018), PR 2.
The Crawfish Processors Alliance also requested a review of Plaintiffs, as well as Hi-King
and others. See Crawfish Processors All.’s Req. Admin. Rev. (Oct. 1, 2018), PR 6.
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On November 15, 2018, Commerce published a notice of initiation of the administrative
review. See Initiation of Antidumping and Countervailing Duty Admin. Revs., 83 Fed. Reg. 57,411
(Dep’t Commerce Nov. 15, 2018). Nanjing Gemsen together with Hubei Qianjiang Huashan
Aquatic Food and Product Co., Ltd. (“Hubei Qianjiang”) (collectively, “Mandatory Respondents”)
were selected for individual examination as mandatory respondents based on the volume of their
exports during the period of review, pursuant to 19 U.S.C. § 1677f-1(c)(2)(B) (2018). 1 See
Respondent Selection for the 2017-2018 Antidumping Duty Admin. Rev. (Feb. 13, 2019) at 2, 6,
PR 45.
Commerce preliminarily determined that dumping of the subject freshwater crawfish tail
meat occurred during the period of review and calculated an antidumping duty rate of 7.92 percent
for Nanjing Gemsen. See Freshwater Crawfish Tail Meat From the People’s Republic of China,
84 Fed. Reg. 34,339, 34,340 (Dep’t Commerce July 18, 2019) (“Preliminary Results”) and
accompanying Decision Mem. (July 11, 2019) (“PDM”), PR 84. As for Hubei Qianjiang, which is
not a party to this action, Commerce calculated a rate of zero percent. See Preliminary Results, 84
Fed. Reg. at 34,340. The rates for the Mandatory Respondents were calculated by determining the
normal value of each company’s respective exports using the nonmarket economy method under
1 	As shall be seen, this Court has frequently wondered how the primary purpose of
determining accurate rates for unexamined respondents is advanced by selecting only two
mandatory respondents, particularly when the rate for one of the two is undetermined or
disregarded. See, e.g., Jilin Forest Indus. Jinqiao Flooring Grp. Co. v. United States, 45 CIT ___,
___, 519 F. Supp. 3d 1224, 1236 (2021) (first citing Zhejiang Native Produce & Animal By-
Products Imp. & Exp. Corp. v. United States, 33 CIT 1125, 637 F. Supp. 2d 1260 (2009); and then
citing Carpenter Tech. Corp. v. United States, 33 CIT 1721, 662 F. Supp. 2d 1337 (2009)).
Judges of the Federal Circuit have expressed similar concerns. See, e.g., Oral Argument,
Y.C. Rubber Co. (North America) v. United States, No. 21-1489 (Fed. Cir. argued Nov. 5, 2021),
https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/.
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19 U.S.C. § 1677b(c)(1). 2 In doing so, Commerce selected Malaysia as the surrogate country for
valuing almost all of the Mandatory Respondents’ factors of production. 3 For the main factor of
production, live freshwater crawfish, however, the Department relied on Spanish import data
classified under 	Integrated Tariff of the European Communities 4 (“TARIC”) subheading
2 	The statute provides:
If—
(A) the subject merchandise is exported from a nonmarket economy
country, and
(B) the administering authority finds that available information does not
permit the normal value of the subject merchandise to be determined under
subsection (a),
the administering authority shall determine the normal value of the subject
merchandise on the basis of the value of the factors of production utilized in
producing the merchandise and to which shall be added an amount for general
expenses and profit plus the cost of containers, coverings, and other expenses. . . .
[T]he valuation of the factors of production shall be based on the best available
information regarding the values of such factors in a market economy country or
countries considered to be appropriate by the administering authority.
19 U.S.C. § 1677b(c)(1).
3 	The factors of production are those used to produce the subject merchandise—
which include, but are not limited to: “(A) hours of labor required, (B) quantities of raw materials
employed, (C) amounts of energy and other utilities consumed, and (D) representative capital cost,
including depreciation.” 19 U.S.C. § 1677b(c)(3)(A)-(D).
4 	The Integrated Tariff of the European Communities or “TARIC” is a customs
classification system akin to the Harmonized Tariff Schedule of the United States. The TARIC
system is organized in a hierarchical structure by sections, chapters, headings, and subheadings,
and is based upon the international Harmonized Commodity Description and Coding System
administered by the World Customs Organization. It applies to all member states of the European
Union (“EU”) and is designed to provide for the classification of all products imported into the EU
in accordance with a system of numerical codes through which each product is assigned its own
TARIC number. A product’s TARIC number determines, inter alia, the amount of customs duties
owed on the imported good. See Gerd M. Schwendinger & Katka Göcke, Duty Assessment – Tariff
Classification (CN & TARIC), in 2 INTERNATIONAL C ONTRACT M ANUAL § 44:9 (West 2021).
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0306.39.10, which covers live, fresh or chilled freshwater crawfish. 5 See Surrogate Value Mem.
(July 11, 2019) at 2, PR 85. Commerce chose Spain because the record did not contain any data
from Malaysia. 6 See Surrogate Country Mem. (July 11, 2019) at 5, PR 86. No party disputes the
decision to use Spanish information.
Commerce also preliminarily determined that certain companies rebutted the presumption
of de jure and de facto control 7 by the Chinese government and were therefore eligible for a
separate, “all-others” rate. See PDM at 6; see also Yangzhou Bestpak Gifts & Crafts Co. v. United
States, 716 F.3d 1370, 1374 (Fed. Cir. 2013) (citations omitted) (“The separate rate for eligible
non-mandatory respondents is generally calculated following the statutory method for determining
the ‘all others rate’ under § 1673d(c)(5)(A).”). Relying on the general rule under the statute,
Commerce excluded Hubei Qianjiang’s zero percent rate and used Nanjing Gemsen’s 7.92 percent
rate as the all-others rate for the six other companies that qualified for a separate rate, 8 but were
5 	For consistency purposes, the court has adopted the parties’ use of the term
“crawfish.” The TARIC, however, uses the term “crayfish.” No one disputes this difference in
naming conventions, nor is it relevant to the outcome of this case.
6 	Mandatory Respondents placed on the record contemporaneous Spanish import
data for valuing the live freshwater crawfish input. See Surrogate Country Mem. at 5.
7 	Commerce presumes that exporters and producers from nonmarket economy
countries, such as China, are under government control with respect to export activities and thus
should receive a single country-wide dumping rate. See Yangzhou Bestpak Gifts & Crafts Co. v.
United States, 716 F.3d 1370, 1373 (Fed. Cir. 2013) (citing Sigma Corp. v. United States, 117 F.3d
1401, 1405 (Fed. Cir. 1997)). This presumption is rebuttable, however, if a company can
demonstrate its independence from government control, both in law (de jure) and in fact (de facto).
See Sigma Corp., 117 F.3d at 1405. If a company successfully rebuts the presumption of
government control, it may be eligible for a separate antidumping duty rate. If not, it will be
considered part of the country-wide entity and will receive the country-wide rate. See 19 C.F.R.
§ 351.107(d) (2019); see also Jilin, 45 CIT at ___, 519 F. Supp. 3d at 1241.
8 	A “separate rate” is a rate assigned to nonmarket economy exporters or producers
that were not selected for individual examination but have rebutted the presumption of state
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not individually examined (the “Separate Rate Companies”). 9 See PDM at 7; see also 19 U.S.C.
§ 1673d(c)(5)(A).
In October 2019, Commerce published its Final Results which remained unchanged from
the Preliminary Results. See Final Results, 84 Fed. Reg. at 58,371. Commerce continued to use
Spanish import data under TARIC subheading 0306.39.10 (live, fresh or chilled freshwater
crawfish) for valuing the live freshwater crawfish factor of production. See id. Commerce also
continued to use Nanjing Gemsen’s calculated 7.92 percent rate as the all-others rate assigned to
the Separate Rate Companies. See Final IDM at 4-5.
On November 18, 2019, Commerce issued liquidation instructions for the subject entries
of freshwater crawfish tail meat. On November 29, 2019, Hi-King’s period of review entries were
liquidated. Hi-King timely filed its original complaint in this action on December 3, 2019. In its
original complaint, Hi-King neither challenged Commerce’s issuance of liquidation instructions
nor stated that its entries had been liquidated. In fact, Hi-King did not learn that its entries had
been liquidated until after its original complaint had been filed. See Consol. Pl.’s Br. 19.
Upon learning that its entries had been liquidated, Hi-King sought two orders from the
court: one permitting Hi-King to amend its original complaint to add a claim challenging the
Department’s issuance of the liquidation instructions as premature and not in accordance with law;
and another directing Commerce to instruct United States Customs and Border Protection (“CBP”
or “Customs”) to reset its entries to unliquidated status. See Hi-King’s Mot. Leave Amend Compl.,
control, and are therefore not covered by the single country-wide rate. See Changzhou Hawd
Flooring Co. v. United States, 947 F.3d 781, 784 (Fed. Cir. 2020).
9 	The Separate Rate Companies are Deyan Aquatic Products and Food Co., Ltd.,
Hubei Nature Agriculture Industry Co., Ltd., Hubei Yuesheng Aquatic Products Co., Ltd., Xiping
Opeck, Xuzhou Jinjiang, and Hi-King. See PDM at 8. Only Xiping Opeck, Xuzhou Jinjiang, and
Hi-King are parties to this action.
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ECF No. 22; see also Hi-King’s Mot. for Order Directing Its Entries Be Reset to Unliquidated
Status, ECF No. 35. The court granted these motions, accepting Hi-King’s amended complaint as
filed and resetting its entries to unliquidated status. See Order dated Apr. 23, 2020, ECF No. 28;
see also Order dated June 25, 2020, ECF No. 37.
Plaintiffs and Hi-King now challenge Commerce’s Final Results. For their part, Plaintiffs
argue that (1) Commerce’s determination that TARIC subheading 0306.39.10 (live, fresh or chilled
freshwater crawfish) is the best available information for calculating surrogate value is neither
supported by substantial evidence nor in accordance with law; and (2) Commerce unlawfully used
Nanjing Gemsen’s rate as the all-others rate for the Separate Rate Companies. See Pls.’ Br. 5, 10.
Hi-King, too, contests Commerce’s calculation of surrogate value based on TARIC
subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) and raises an additional claim
challenging the Department’s 15-day liquidation policy 10 as unlawful. See Consol. Pl.’s Br. 5, 27.
Together, Plaintiffs and Hi-King ask the court to remand the Final Results to Commerce
with instructions to (1) recalculate the surrogate value for the live freshwater crawfish factor of
production using Spanish import data under TARIC subheading 0306.19.10 (frozen freshwater
crawfish), instead of TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish);
(2) recalculate the all-others rate using an average of the Mandatory Respondents’ calculated rates;
and (3) provide further guidance on the legality of Commerce’s 15-day liquidation policy. See Pls.’
Br. 5-13; Consol. Pl.’s Br. 36-37.
10 	Commerce previously had a practice of issuing liquidation instructions to CBP
fifteen days after publication of the final results of an administrative review in the Federal Register.
This policy has since been discontinued. See Notice of Discontinuation of Policy To Issue
Liquidation Instructions After 15 Days in Applicable Antidumping and Countervailing Duty
Administrative Proceedings, 86 Fed. Reg. 3,995 (Dep’t Commerce Jan. 15, 2021).
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Defendant the United States (the “Government”), on behalf of Commerce, asks the court
to sustain the Final Results and maintains that (1) valuing the Mandatory Respondents’ reported
live freshwater crawfish factor of production using TARIC subheading 0306.39.10 (live, fresh or
chilled freshwater crawfish) is supported by substantial evidence and in accordance with law;
(2) assigning Nanjing Gemsen’s rate as the all-others rate was consistent with the requirements of
the statute; and (3) because the court has granted Hi-King’s consent motion directing Customs to
reset 	its 	entries 	to 	unliquidated 	status, 	Hi-King’s 	claim 	challenging 	Commerce’s 	15-day
liquidation policy is moot. See Def.’s Resp. Pls.’ Mots. J. Agency R., ECF No. 36 (“Def.’s Resp.
Br.”).
JURISDICTION AND STANDARD OF REVIEW
The 	court 	has 	jurisdiction 	under 	28 	U.S.C. 	§ 1581(c) 	(2018) 	and 	will 	sustain 	a
determination by Commerce 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 is
“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 (1951) (quoting Consol. Edison Co. v. NLRB,
305 U.S. 197, 229 (1938)).
DISCUSSION
I. 	Surrogate Value Selections
“The United States imposes duties on foreign-produced goods that are sold in the United
States at less-than-fair value.” Fine Furniture (Shanghai) Ltd. v. United States, 42 CIT ___, ___,
353 F. Supp. 3d 1323, 1335 (2018) (quoting Clearon Corp. v. United States, 37 CIT 220, 222
(2013) (not reported in Federal Supplement)). If a domestic producer or other interested party
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believes that a product is being sold at less-than-fair value in the United States, it may petition
Commerce to initiate an antidumping proceeding. See 19 U.S.C. § 1673a(b). During the initial
antidumping investigation, and any subsequent administrative review, Commerce will determine
whether dumping occurred by making “a fair comparison . . . between the export price[ 11] or
constructed export price[ 12] and normal value.[ 13] ” 19 U.S.C. § 1677b(a). Where, as here, the
exporting country is a nonmarket economy, Commerce relies on surrogate values from market
economy countries to determine normal value. Thus, Commerce will calculate “the normal value
of the subject merchandise [based on] the value of the factors of production utilized in producing
11 	“Export price” means
the price at which the subject merchandise is first sold (or agreed to be sold) before
the date of importation by the producer or exporter of the subject merchandise
outside of the United States to an unaffiliated purchaser in the United States or to
an unaffiliated purchaser for exportation to the United States, as adjusted under
subsection (c).
19 U.S.C. § 1677a(a).
12 	“Constructed export price” means
the price at which the subject merchandise is first sold (or agreed to be sold) in the
United States before or after the date of importation by or for the account of the
producer or exporter of such merchandise or by a seller affiliated with the producer
or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted
under subsections (c) and (d).
19 U.S.C. § 1677a(b).
13 	In general, “normal value” means “the price at which the foreign like product is
first sold (or, in the absence of a sale, offered for sale) for consumption in the exporting country,
in the usual commercial quantities and in the ordinary course of trade . . . .” 19 U.S.C.
§ 1677b(a)(1)(B)(i).
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the merchandise and to which shall be added an amount for general expenses and profit plus the
cost of containers, coverings, and other expenses.” 19 U.S.C. § 1677b(c)(1)(B). 14
In the Final Results, the Department’s calculation of the dumping margins for Mandatory
Respondents was driven primarily by the surrogate value used for the live freshwater crawfish
factor of production. This is not surprising since both Mandatory Respondents Nanjing Gemsen
and Hubei Qianjiang reported using “live freshwater crawfish” as the main input in the production
of the subject merchandise. See, e.g., Nanjing Gemsen’s Sec. D Quest. Resp. at D-8 to D-9, PR
69.
To value the live freshwater crawfish factor of production, Commerce concluded that there
was no available data from Malaysia—the primary surrogate country—and instead turned to
Spanish import data. 15 See Final IDM at 3. Specifically, Commerce used data sourced from
14 	Subsection 1677b(c)(1) provides for the calculation of normal value in nonmarket
economy cases. It states that, in general, if
(A) the subject merchandise is exported from a nonmarket economy country, and
(B) [Commerce] finds that available information does not permit the normal value
of the subject merchandise to be determined under subsection [1677b](a),
[Commerce] shall determine the normal value of the subject merchandise on the
basis of the value of the factors of production utilized in producing the merchandise
and to which shall be added an amount for general expenses and profit plus the cost
of containers, coverings, and other expenses.
19 U.S.C. § 1677b(c)(1)(A)-(B).
15 	Generally, Commerce will value all factors of production with surrogate data from
a single surrogate country. See 19 C.F.R. § 351.408(c)(2) (2019) (“Except for labor . . . the
Secretary normally will value all factors in a single surrogate country.”). Nevertheless, Commerce
may look to values from more than one surrogate country when “a non-primary country provides
values that are more accurate” than the primary surrogate country. See Ancientree Cabinet Co. v.
United States, 45 CIT ___, ___, 532 F. Supp. 3d 1241, 1249 (citing Lasko Metal Prods., Inc. v.
United States, 16 CIT 1079, 1082, 810 F. Supp. 314, 317 (1992), aff’d, 43 F.3d 1442 (Fed. Cir.
1994)).
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Agencia Tributaria 16 under TARIC subheading 0306.39.10 (live, fresh or chilled freshwater
crawfish). See Surrogate Value Mem. at 2, 4.
All parties agree that live freshwater crawfish is the main factor of production, and no party
challenges Commerce’s use of Spanish import data for valuing the live freshwater crawfish factor
of production. Rather, the sole disputed aspect of Commerce’s live freshwater crawfish valuation
is its decision to rely on Spanish import data under TARIC subheading 0306.39.10 (live, fresh or
chilled freshwater crawfish), instead of TARIC subheading 0306.19.10 (frozen freshwater
crawfish).
A. 	Commerce’s 	Valuation 	of 	Mandatory 	Respondents’ 	Live 	Freshwater
Crawfish Factor of Production Under TARIC Subheading 0306.39.10 (Live,
Fresh or Chilled Freshwater Crawfish) Is Supported by Substantial Evidence
and in Accordance with Law
According to Plaintiffs and Hi-King, Commerce should have selected TARIC subheading
0306.19.10 (frozen freshwater crawfish) instead of TARIC subheading 0306.39.10 (live, fresh or
chilled freshwater crawfish) to value the main factor of production, i.e., live freshwater crawfish.
Together, they argue that (1) the dataset selected by Commerce, TARIC subheading 0306.39.10
(live, fresh or chilled freshwater crawfish), is not the best available information because it also
covers “other” products not comparable to live freshwater crawfish and is therefore less specific
than their proposed alternative TARIC subheading 0306.19.10 (frozen freshwater crawfish); and
(2) Commerce’s determination that TARIC subheading 0306.39.10 covers live freshwater
crawfish is not supported by substantial evidence because the record lacks any evidence to support
this determination. See Pls.’ Br. 10-13; see also Consol. Pl.’s Br. 29-36. 17
16 	Part of the Ministry of Finance, the Agencia Estatal de Administración Tributaria,
commonly referred to as “Agencia Tributaria,” is the revenue service of the Kingdom of Spain.
17 	The relevant TARIC provisions in effect during the period of review are as follows:
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SECTION I 	LIVE ANIMALS; ANIMAL PRODUCTS
CHAPTER 3 	FISH 	AND 	CRUSTACEANS, 	MOLLUSCS 	AND 	OTHER
AQUATIC INVERTABRATES
. . .
0306 	Crustaceans, whether in shell or not, live, fresh, chilled, frozen, dried,
salted or in brine; smoked crustaceans, whether in shell or not, whether
or not cooked before or during the smoking process; crustaceans, in
shell, cooked by steaming or by boiling in water, whether or not
chilled, frozen, dried, salted or in brine; flours, meals and pellets of
crustaceans, fit for human consumption:
- 	Frozen:
0306 11 	- 	- 	Rock lobster and other sea crawfish . . .
0306 12 	- 	- 	Lobsters . . .
0306 14 	- 	- 	Crabs
0306 15 	- 	- 	Norway lobsters . . .
0306 16 	- 	- 	Cold-water shrimps and prawns . . .
0306 17 	- 	- 	Other shrimps and prawns
0306 19 	- 	- 	Other, including flours, meals and pellets of
crustaceans, fit for human consumption:
0306 19 10 	- 	- 	- 	Freshwater crayfish
0306 19 90 	- 	- 	- 	Other
- 	Live, fresh or chilled:
0306 31 	- 	- 	Rock lobster and other sea crawfish . . .
0306 32 	- 	- 	Lobsters . . .
0306 33 	- 	- 	Crabs
0306 34 	- 	- 	Norway lobsters . . .
0306 35 	- 	- 	Cold-water shrimps and prawns . . .
0306 36 	- 	- 	Other shrimps and prawns
0306 39 	- 	- 	Other, including flours, meals and pellets of
crustaceans, fit for human consumption:
0306 39 10 	- 	- 	- 	Freshwater crayfish
0306 39 90 	- 	- 	- 	Other
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The Government argues that Commerce was reasonable in selecting TARIC subheading
0306.39.10 (live, fresh or chilled freshwater crawfish) as the best available information because
the record shows that Mandatory Respondents reported using live freshwater crawfish as the main
input in their production processes, and TARIC subheading 0306.39.10 (live, fresh or chilled
freshwater crawfish) covers that main input. See Def.’s Resp. Br. 14. The Government also
contends that, because Commerce was plainly quoting the official TARIC subheading descriptions
in explaining its method of calculating surrogate value for the live freshwater crawfish factor of
production, such descriptions are necessarily incorporated by reference in the Final Results and
are suitable for that use and for the court to take judicial notice of the subheading’s text. See Def.’s
Resp. Br. 17.
Under the statute, Commerce is directed to value factors of production using the “best
available information regarding the values of such factors in a market economy country or
countries considered to be appropriate by the administering authority [i.e., Commerce].” 18 See 19
U.S.C. § 1677b(c)(1). Because the term “best available information” is left undefined by the
governing statute, courts have read this provision to give Commerce some latitude in choosing
what constitutes the best available information. See Wuhan Bee Healthy Co. v. United States, 31
See 	TARIC 	Consultation, 	EUR . 	C OMM’N: 	TAX ’N 	& 	C USTOMS 	UNION ,
https://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en 	(change
reference date to September 1, 2017; then retrieve measures for goods code “0306”; then click
“Frozen” and “Live, Fresh or Chilled” under the “0306” heading; and then click “0306 19” and
“0306 39”) (“TARIC Database”).
18 	Commerce selects a primary surrogate country using a process that tracks the
requirements of 19 U.S.C. § 1677b(c)(1) and (4). The Department’s practice in identifying
countries that are at the same level of economic development is described in the Department’s
Policy Bulletin No. 04.1. See Import Admin., U.S. Dep’t Commerce, Non-Market Economy
Surrogate 	Country 	Selection 	Process, 	Policy 	Bulletin 	04.1 	(2004), 	available 	at
http://enforcement.trade.gov/policy/bull04-1.html (last visited Dec. 2, 2021).
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CIT 1182, 1197 (2007) (not reported in Federal Supplement) (citing Nation Ford Chem. Co. v.
United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999)).
Despite the latitude afforded Commerce in selecting the best available information from
among the available surrogate data for valuing the factors of production, it must still act in a
manner consistent with the underlying objective of the antidumping statute—“to obtain the most
accurate dumping margins possible.” See Shandong Huarong Gen. Corp. v. United States, 25 CIT
834, 838, 159 F. Supp. 2d 714, 719 (2001) (citation omitted). “This objective is achieved only
when Commerce’s choice of what constitutes the best available information evidences a rational
and reasonable relationship to the factor of production it represents.” Id. at 838, 159 F. Supp. 2d
at 719 (citations omitted).
Here, the court finds reasonable Commerce’s use of TARIC subheading 0306.39.10 (live,
fresh or chilled freshwater crawfish) for valuing Mandatory Respondents’ reported live freshwater
crawfish 	factor 	of 	production. 	Plaintiffs’ 	and 	Hi-King’s 	arguments 	to 	the 	contrary 	are
unconvincing.
To begin, both Commerce’s preferred TARIC subheading and that of Plaintiffs and Hi-
King are eo nomine provisions. That is, the subheading itself “describes a commodity by a specific
name, usually one well known to commerce.” See Myers v. United States, 21 CIT 654, 659, 969
F. Supp. 66, 71 (1997) (cleaned up).
Since it is undisputed that live freshwater crawfish is the main input in the production of
the subject merchandise, and Commerce’s preferred TARIC subheading 0306.39.10 (live, fresh or
chilled freshwater crawfish) covers live freshwater crawfish by name, TARIC subheading
0306.39.10 (live, fresh or chilled freshwater crawfish) is specific to the main input. Plaintiffs’ and
Hi-King’s proposed alternative TARIC subheading 0306.19.10 (frozen freshwater crawfish), on
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the other hand, describes frozen freshwater crawfish by name. Frozen freshwater crawfish is not
an input used in the production of the subject merchandise. Thus, Commerce’s chosen TARIC
subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) is specific to Mandatory
Respondents’ 	reported 	input 	and 	Plaintiffs’ 	and 	Hi-King’s 	proposed 	alternative 	TARIC
subheading 0306.19.10 (frozen freshwater crawfish) is not.
Plaintiffs and Hi-King make no real argument in favor of TARIC subheading 0306.19.10
(frozen freshwater crawfish). Rather, they dispute the appropriateness of Commerce’s chosen
subheading. First, Plaintiffs insist that TARIC subheading 0306.39.10 (live, fresh or chilled
freshwater crawfish) is a basket category that covers “other” products than live crawfish such as
“flours, meals and pellets of crustaceans, fit for human consumption,” and therefore is too broad
to be used to value the main input. See Pls.’ Br. 13. Plaintiffs’ argument betrays a basic
misunderstanding of the workings of the TARIC and indeed all tariff classification schemes based
on the World Customs Organization’s Harmonized Commodity Description and Coding System.
Each of these schemes is hierarchical in nature. The six-digit 0306.39 heading, 19 under
which the eight-digit subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) is found,
is indeed a basket category covering many things other than live freshwater crawfish. This heading,
19 	During the period of review, the six-digit 0306.39 heading, under which the eight-
digit 0306.39.10 subheading falls, was described in the TARIC as follows:
- 	Live, fresh or chilled:
. . .
0306 39 	- 	- 	Other, including flours, meals and pellets of
crustaceans, fit for human consumption:
0306 39 10 	- 	- 	- 	Freshwater crayfish
See TARIC Database.
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however, sets the outer limits of what can be classified by the subheadings that follow. For
instance, the 0306.39 heading limits its subheadings to products “fit for human consumption.”
Therefore, live freshwater crawfish (or indeed anything else) “unfit for human consumption” could
not be classified under any subheading below the 0306.39 heading.
The subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) employed by
Commerce, despite falling under the six-digit 0306.39 basket heading, is not itself a basket
provision. Rather, it is, as noted above, an eo nomine provision that is limited to the products
described—live, fresh or chilled freshwater crawfish.
Thus, the entries into Spain that Commerce examined to determine the value of the
Mandatory Respondents’ main input did not contain “flours, meals and pellets of crustaceans, fit
for human consumption.” Rather, these entries into Spain were all entered under the eight-digit
subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) and were thus all of live, fresh
or chilled freshwater crawfish and nothing else. 20
20 	The European Union’s tariff classification system contains general rules of
interpretation nearly identical to the general rules of interpretation for the Harmonized Tariff
Schedule of the United States. Rules 1 and 6 of the European Union’s general rules of
interpretation provide:
1. 	The titles of sections, chapters and sub-chapters are provided for ease of
reference only; for legal purposes, classification shall be determined according to
the terms of the headings and any relative section or chapter notes and, provided
such headings or notes do not otherwise require, according to the following
provisions. . . .
6. 	For legal purposes, the classification of goods in the subheadings of a
heading shall be determined according to the terms of those subheadings and any
related subheading notes and, mutatis mutandis, to the above rules, on the
understanding that only subheadings at the same level are comparable. For the
purposes of the rule, the relative section and chapter notes also apply, unless the
context requires otherwise.
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Next, Plaintiffs and Hi-King make a remarkable argument. They assert that Commerce’s
determination that TARIC subheading 0306.39.10 covers live freshwater crawfish is not supported
by substantial evidence because the record lacks a “description of the particular products that are
covered by [TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish)].” See
Consol. Pl.’s Br. 31; see also Pls.’ Br. 11. In other words, because in the Final Results Commerce
provided only a narrative description 21 of the products TARIC subheading 0306.39.10 (live, fresh
or chilled freshwater crawfish) covers, the determination was unsupported by substantial evidence.
Apparently, Plaintiffs and Hi-King believe that Commerce could only satisfy the substantial
evidence requirement by reproducing a direct quote, printout, or photocopy of the product
description from the TARIC database itself.
This claim is puzzling, however, since the subheading itself describes the input in question.
That is, reference to the TARIC itself makes it clear that subheading 0306.39.10 covers live, fresh
or chilled freshwater crawfish. Anyone reading the Final Results could easily find the subheading
itself, read it in context, and confirm that its provisions covered the product that Commerce
represented it covered. 22
Council Regulation 2658/87 of July 23, 1987, On the Tariff and Statistical Nomenclature and on
the Common Customs Tariff, annex, 1987 O.J. (L 361) 1, 15-16.
21 	Commerce accurately identified on the record that TARIC subheading 0306.39.10
(live, fresh or chilled freshwater crawfish) covers live freshwater crawfish, and Plaintiffs’ and Hi-
King’s proposed alternative, TARIC subheading 0306.19.10 (frozen freshwater crawfish), covers
frozen freshwater crawfish. See, e.g., Surrogate Value Mem. at 4 (“[W]e preliminarily find it is
appropriate to use contemporaneous Spanish import data on the record under TARIC number,
0306.39.10, which represents live crawfish.”); see also, e.g., Final IDM at 7 (“TARIC number
0306.39.10 covers live crawfish, and TARIC number 0306.19.10 covers frozen crawfish.”).
22 	Commerce made clear from the start its intention to value the live freshwater
crawfish factor of production using contemporaneous Spanish import data under TARIC
subheading 0306.39.10 (live, fresh or chilled freshwater crawfish). See Surrogate Value Mem. at 4.
In fact, the Mandatory Respondents themselves stated that “[i]f Commerce finds [TARIC
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It is well established that courts may take judicial notice of the texts of statutes both
domestic and foreign. See, e.g., Micron Tech., Inc. v. United States, 31 CIT 2031, 2038 n.9, 535
F. Supp. 2d 1336, 1343 n.9 (2007) (taking judicial notice of Korean law). The court, having done
so, finds that Commerce’s claims of the contents of the products described by TARIC subheading
0306.39.10 (live, fresh or chilled freshwater crawfish) are supported by substantial evidence.
B. 	Hi-King’s 	Claim 	Challenging 	Commerce’s 	Assertions 	Regarding
Amendments to the TARIC Classification System Are Barred by the Doctrine
of 	Exhaustion 	of 	Administrative 	Remedies 	and 	Would 	Be 	Unavailing
Nonetheless
In past reviews, Commerce reported using TARIC subheading 0306.29.10, 23 which
covered “not frozen freshwater crawfish,” to value Spanish imports of freshwater crawfish. See
Surrogate Value Mem. at 4. Prior to Commerce’s initiation of this administrative review, however,
subheading 0306.19.10 (frozen freshwater crawfish)] data unusable, Commerce shall use the
inflated Spanish import data [under TARIC subheading 0306.39.10 (live, fresh or chilled
freshwater crawfish)].” See Mandatory Respondents’ Comments on Surrogate Value (Apr. 26,
2019) at 2, PR 75.
Thus, Plaintiffs and Hi-King were aware of Commerce’s understanding of the TARIC code
at the preliminary stages of the underlying review. See, e.g., Hi-King Case Br. (Aug. 26, 2019) at
1, PR 101 (quoting Surrogate Value Mem. at 4) (“The Department also specifically stated that it
found it appropriate to use the contemporaneous Spanish import data on the record under TARIC
number 0306.39.10 [(live, fresh or chilled freshwater crawfish)], because this tariff heading
‘represents live crawfish.’”). Despite such notice, they have not provided any authority to support
their arguments to the contrary, notwithstanding their burden to do so. See, e.g., United Steel &
Fasteners, Inc. v. United States, 44 CIT ___, ___, 469 F. Supp. 3d 1390, 1400 (2020) (alteration
in original) (quoting QVD Food Co. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011))
(“[T]he burden of creating an adequate record lies with [interested parties] and not with
Commerce.”).
23 	In 	an 	attempt 	to 	prevent 	any confusion 	between 	the 	discontinued 	TARIC
subheading 0306.29.10 (not frozen freshwater crawfish), which Commerce had relied upon in past
reviews to value Spanish imports of live freshwater crawfish, and the current TARIC subheading
0306.39.10 (live, fresh or chilled freshwater crawfish) used by Commerce to value Spanish imports
of live freshwater crawfish in this review, the court has underlined the fifth and sixth digits (i.e.,
.29 & .39) of each subheading.
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it 	found 	that 	TARIC 	subheading 0306.29.10 	(not 	frozen 	freshwater 	crawfish) 	had 	been
discontinued, and the products previously covered by TARIC subheading 0306.29.10 (i.e., not
frozen freshwater crawfish) were reclassified under either TARIC subheading 0306.39.10, which
covers live, fresh or chilled freshwater crawfish, or 0306.99.10, covering “other” types of
freshwater crawfish, i.e., those that are not frozen, live, fresh or chilled (e.g., cooked freshwater
crawfish). See Surrogate Value Mem. at 4.
In both the Surrogate Value Memorandum and the Final IDM, Commerce stated that using
the current TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) for valuing
Mandatory Respondents’ live freshwater crawfish factor of production was appropriate because it
was now the most specific to the main input. In other words, Commerce identified changes in the
TARIC classification system to explain why it relied on TARIC subheading 0306.39.10 (live, fresh
or chilled freshwater crawfish) in the current administrative review, whereas, in past reviews, it
had relied on TARIC subheading 0306.29.10 (not frozen freshwater crawfish).
Hi-King argues that it was “inappropriate [for Commerce] to assume anything about the
asserted changes [to the TARIC] given the utter lack of supporting record evidence,” and, as a
result, Commerce unlawfully selected TARIC 0306.39.10 (live, fresh or chilled freshwater
crawfish) based on unsubstantiated assertions. See Consol. Pl.’s Br. 29-30 (“There is no evidence
to establish what is the specific connection between the prior TARIC [subheading] 0306.29.10
[(not frozen freshwater crawfish)] and the . . . new TARIC [subheadings] that supposedly
correspond to the old TARIC [subheading].”). Hi-King makes this argument without giving any
reason as to why Commerce should trace the new subheadings to the old ones.
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According to the Government, Hi-King failed to make this argument at the agency level
and, therefore, the doctrine of exhaustion prevents Hi-King from raising this argument for the first
time before the court.
“The exhaustion doctrine requires a party to present its claims to the relevant administrative
agency for the agency’s consideration before raising these claims to the Court.” Shandong
Huarong Mach. Co. v. United States, 30 CIT 1269, 1305, 435 F. Supp. 2d 1261, 1292 (2006)
(quoting Ingman v. U.S. Sec’y of Agric., 29 CIT 1123, 1126 (2005) (not reported in Federal
Supplement)). “This court has discretion to determine when it will require the exhaustion of
administrative remedies” and “shall, where appropriate, require the exhaustion of [such]
remedies.” 28 U.S.C. § 2637(d); Blue Field (Sichuan) Food Indus. Co. v. United States, 37 CIT
1619, 1627, 949 F. Supp. 2d 1311, 1321 (2013) (citation omitted). “Requiring exhaustion is
appropriate where doing so ‘can protect administrative agency authority and promote judicial
efficiency.’” See Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT ___, ___, 968 F.
Supp. 2d 1255, 1265 (2014) (quoting Itochu Bldg. Prods. v. United States, 733 F.3d 1140, 1145
(Fed. Cir. 2013)). “Exhaustion can ‘serve judicial efficiency . . . by giving an agency a full
opportunity to correct errors and thereby narrow or even eliminate disputes needing judicial
resolution.’” Id. (alteration in original) (quoting Itochu, 733 F.3d at 1145).
The record shows that Hi-King merely mentioned, in passing, that Commerce had noted
TARIC subheading 0306.29.10 (not frozen freshwater crawfish) was discontinued, and that the
main input for products covered by this review were reclassified under, inter alia, TARIC
subheading 0306.39.10 (live, fresh or chilled freshwater crawfish). See Hi-King Case Br. at 2. That
is, at the agency level, Hi-King did not challenge the evidentiary support for Commerce’s
assertions regarding whether products previously classified under TARIC subheading 0306.29.10
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(not frozen freshwater crawfish) should be classified under the amended TARIC provisions. Hi-
King instead claimed that Commerce’s selection of TARIC subheading 0306.39.10 (live, fresh or
chilled freshwater crawfish) was unlawful because it was not the best available information on the
record.
“Respondents do not meet exhaustion requirements ‘by merely mentioning a broad issue
without raising a particular argument.’” See Zhejiang Mach. Imp. & Exp. Corp. v. United States,
44 CIT ___, ___, 471 F. Supp. 3d 1313, 1338 (2020) (quoting Timken Co. v. United States, 26 CIT
434, 460, 201 F. Supp. 2d 1316, 1340-41 (2002)). Thus, Hi-King’s passing mention of
Commerce’s observations concerning amendments to the TARIC classification system, without
more, is insufficient to support a claim before the court that Commerce failed to substantiate its
assertion that subheading 0306.29.10 (not frozen freshwater crawfish) was discontinued and
replaced with, inter alia, subheading 0306.39.10 (live, fresh or chilled freshwater crawfish), or
that tracing these changes was somehow necessary for Commerce’s reliance on the plain language
of subheading 0306.39.10 (live, fresh or chilled freshwater crawfish)—i.e., the TARIC subheading
in effect during the underlying review.
It is clear from the record that Hi-King failed to exhaust its administrative remedy by failing
to make its arguments before the Department when it had the opportunity to do so—despite having
notice of Commerce’s conclusions concerning the relevant changes to the TARIC classification
system, and the agency’s intention to rely on the revised TARIC schedule. Thus, Hi-King failed
to take advantage of its opportunity to make its case before Commerce and deprived Commerce
of its chance to consider Hi-King’s claim and make a decision. Accordingly, the doctrine of
exhaustion precludes Hi-King from raising this claim for the first time before this court.
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Even if Hi-King had not failed to exhaust its administrative remedy, its claim would fail.
Notably, Hi-King does not dispute that changes were made to the TARIC classification system.
Rather, Hi-King’s claim is that the record lacks any evidence to support Commerce’s statements
that the products previously classified under the now discontinued TARIC subheading 0306.29.10
(not frozen freshwater crawfish) were recast under TARIC subheading 0306.39.10 (live, fresh or
chilled freshwater crawfish) or subheading 0306.99.10 (other types of freshwater crawfish that are
not frozen, live, fresh or chilled). See Consol. Pl.’s Br. 30. Hi-King makes this claim without
revealing why tracing the products previously classified under the old subheading to the revised
subheading was important in the Final Results or is necessary to a just outcome in this case.
There is no dispute that Commerce used Spanish import data for merchandise entered under
subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) to value the Mandatory
Respondents’ main input without reference to any subheading from a previous iteration of the
TARIC. TARIC subheading 0306.39.10 (live, fresh or chilled freshwater crawfish) was in effect
during the period of review. In other words, Commerce’s observation that the law has changed
from past reviews, while helpful to those following the freshwater crawfish line of cases, was not
dispositive of any issue in this case because Commerce used the current TARIC provisions in
reaching its findings.
As the foregoing portions of this opinion hold, Commerce has supported with substantial
evidence its finding that live freshwater crawfish was included under TARIC subheading
0306.39.10 (live, fresh or chilled freshwater crawfish).
Although Commerce is required to support its selection of TARIC subheading 0306.39.10
(live, fresh or chilled freshwater crawfish) with substantial evidence—which the court finds that it
has done—it does not have to do the same with respect to its statements noting previous changes
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to the law. Thus, the court finds that Hi-King’s argument would be unavailing even if not barred
by the doctrine of exhaustion of administrative remedies.
II. 	Commerce’s Calculation of the Separate Rate Companies’ “All-Others” Rate Is in
Accordance with Law
In the underlying administrative review, Commerce limited the number of individually
examined exporters to two mandatory respondents and calculated entity-specific rates for Hubei
Qianjiang and Nanjing Gemsen. See 19 U.S.C. § 1677f-1(c)(2)(B). 24 Commerce also determined
that certain respondents, not selected for individual examination, had rebutted the presumption of
de jure and de facto control by the Chinese government and were therefore eligible for a separate
rate.
To calculate the separate rate for non-individually examined respondents, Commerce has
adopted the statutory method for calculating the “all-others” rate under 19 U.S.C. § 1673d(c)(5).
While § 1673d(c)(5), by its terms, applies to investigations, this method has been approved by
courts for use in administrative reviews. See, e.g., Navneet Publ’ns (India) Ltd. v. United States,
38 CIT ___, ___, 999 F. Supp. 2d 1354, 1359 (2014) (“Though § 1673d(c)(5) explicitly references
investigations, nothing in that statute or in any other statute expressly or impliedly precludes
application to administrative reviews.”).
24 	When it is not practicable for Commerce to calculate individual weighted average
dumping margins for each exporter and producer involved in the underlying review, the statute
authorizes Commerce to limit the number of individually examined exporters in a manner that
contemplates a “reasonable number of exporters and producers” that either (A) constitute a
statistically 	representative 	sample 	of 	all 	known 	exporters 	and 	producers 	of 	the 	subject
merchandise; or (B) includes “exporters and producers accounting for the largest volume of the
subject merchandise from the exporting country that can be reasonably examined.” See 19 U.S.C.
§ 1677f-1(c)(2)(A), (B).
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Subsection 1673d(c)(5) governs Commerce’s calculation of the all-others rate. Paragraph
(A) provides:
(A) 	General rule
For purposes of this subsection and section 1673b(d) of this title, the estimated all-
others rate shall be an amount equal to the weighted average of the estimated
weighted average dumping margins established for exporters and producers
individually investigated, excluding any zero and de minimis margins, and any
margins determined entirely under section 1677e of this title [i.e., based on facts
available or AFA].
19 U.S.C § 1673d(c)(5)(A).
In other words, the statute provides that to calculate the all-others rate, Commerce will use
the weighted average of all mandatory respondents’ rates, excluding any rates that are zero, de
minimis, or based entirely on facts available or adverse facts available.
Here, Commerce applied the all-others method to its separate rate calculations. Pursuant to
the statute, Commerce excluded Hubei Qianjiang’s zero percent rate from its separate rate
calculations, and assigned the Separate Rate Companies a rate of 7.92 percent—a rate equal to the
calculated rate for Nanjing Gemsen, the sole remaining mandatory respondent with a rate that was
not zero, de minimis, or based entirely on facts available or adverse facts available. See Final
Results, 84 Fed. Reg. at 58,372 (“[I]n accordance with [19 U.S.C. § 1673d(c)(5)(A)] and its prior
practice, Commerce has assigned Nanjing Gemsen’s calculated rate (i.e., 7.92 percent) as the
separate rate for the non-examined separate rate exporters for these final results.”).
First, Plaintiffs take the position that, by refusing to include Hubei Qianjiang’s zero percent
rate in its all-others rate calculation, Commerce failed in its obligation to determine an accurate
rate for the Separate Rate Companies. Next, they argue that Commerce’s decision to apply the
general rule under § 1673d(c)(5)(A), and to exclude Hubei Qianjiang’s zero percent rate from its
separate rate calculations, was unlawful because the statute requires an average of the Mandatory
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Respondents’ rates. Finally, Plaintiffs contend that established Commerce policy requires it to
include zero percent rates in its separate rate calculations when only two mandatory respondents
were selected for individual examination. See Pls.’ Br. 5-9.
To make their case, Plaintiffs assert that “Congress intended that Commerce calculate
dumping margins as accurately as possible and use the best available information,” and the
“fundamental requirement of accuracy requires, in this case, the averaging of the margins of both
mandatory respondents.” Pls.’ Br. 8. Thus, according to Plaintiffs, only by averaging the margins
applied to both Mandatory Respondents could Commerce calculate the dumping margins as
Congress intended—that is, “as accurately as possible.” See Pls.’ Br. 8. Therefore, Plaintiffs ask
the court to remand with instructions that Commerce calculate the all-others rate as a simple
average of the rates received by Hubei Qianjiang (0.00 percent) and Nanjing Gemsen (7.92
percent). See Pls.’ Br. 7-8.
This Court has expressed a certain sympathy with Plaintiffs’ first argument. See, e.g., Jilin,
45 CIT at ___, 519 F. Supp. 3d at 1236 (citations omitted) (footnote omitted) (“Commerce’s
practice has devolved to the point where it regularly chooses only two (and sometimes one)
mandatory respondents to be ‘representative’ of unexamined respondents for the purpose of
calculating the all-others rate in a review, a devolution that this Court has regarded with some
skepticism.”). 25 There can be little question that, if Commerce were to change its method and name
25 	What this Court in Jilin called the statute’s “Mandatory Respondent
Exception” has had a tortured path:
The Mandatory Respondent Exception is used when the number of respondents in
a proceeding is so “large” that it is “not practicable to make individual weighted
average dumping margin determinations.” 19 U.S.C. § 1677f-1(c)(2). When that
occurs, Commerce may determine the weighted-average dumping margins for a
“reasonable” number of exporters or producers by limiting its examination to (1) “a
sample of exporters, producers, or types of products that is statistically valid based
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Consol. Court No. 19-00202 	Page 26
on the information available to the administering authority at the time of selection,”
or (2) “exporters and producers accounting for the largest volume of the subject
merchandise from the exporting country that can be reasonably examined.” Id.
§ 1677f-1(c)(2)(A), (B). The weighted average of the rates for each mandatory
respondent forms the basis of the all-others rate for respondents not individually
examined. See id. § 1673d(c)(1)(B)(i). Here, noting the “large” number of
respondents in the underlying proceeding, Commerce chose to employ this
Mandatory Respondent Exception and base the determination of the all-others rate
on the rate determined for two mandatory respondents, which were the two largest
exporters of subject merchandise by volume during the period of review. Jilin was
one of these. The other was Jiangsu.
The aim of the Mandatory Respondent Exception is to determine an accurate all-
others rate, based on a weighted average of rates determined for mandatory
respondents by statistical sampling or the use of a statistically sufficient volume of
exports. The statute directs Commerce to (1) “determine the estimated weighted
average dumping margin for each exporter and producer individually investigated”
and (2) “determine” in accordance with the statute’s method “the estimated all-
others rate for all exporters and producers not individually investigated.” 19 U.S.C.
§ 1673d(c)(1)(B)(i), (c)(5)(B). Use of the Mandatory Respondent Exception is
intended to fulfill the prime purpose of the antidumping duty statute to calculate
accurate 	rates. 	Compare 	19 	U.S.C. 	§ 	1677f-1(c)(2), 	with 	19 	U.S.C.
§ 1673d(c)(1)(B)(i). The role of the mandatory respondents is therefore broader
than that of the usual individually-examined respondent, because the mandatory
respondents serve as surrogates for what can be (and is, in this case) a much larger
group.
Commerce now employs the Mandatory Respondent Exception often, and reviews
only a limited number of selected respondents. See, e.g., Certain Fresh Cut Flowers
From Colombia: Preliminary Results & Partial Rescission of Antidumping Duty
Admin. Rev., 62 Fed. Reg. 16,772 (Dep’t Commerce Apr. 8, 1997). Indeed,
Commerce’s practice has devolved to the point where it regularly chooses only two
(and sometimes one) mandatory respondents to be “representative” of unexamined
respondents for the purpose of calculating the all-others rate in a review, a
devolution that this Court has regarded with some skepticism. See, e.g., Zhejiang
Native Produce & Animal By-Products Imp. & Exp. Corp. v. United States, 33 CIT
1125, 637 F. Supp. 2d 1260 (2009); Carpenter Tech. Corp. v. United States, 33 CIT
1721, 662 F. Supp. 2d 1337 (2009).
Even when Commerce does choose two mandatory respondents (and despite having
replaced or substituted mandatory respondents in the past), it has more recently
declined to name a mandatory respondent replacement when it became clear that a
chosen mandatory entity would not participate or is otherwise excluded from
examination. See, e.g., Bestpak, 716 F.3d at 1374. When one of two chosen
mandatory respondents does not participate or is excluded from participation, a
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failure to name a replacement can result (as it did here) in an all-others rate being
determined based on the margin of a sole respondent whose percentage of export
volume is quite small in relation to the total volume of exports. See, e.g., Stainless
Steel Sheet & Strip From the People’s Republic of China: Preliminary Affirmative
Determination of Sales at Less Than Fair Value & Preliminary Affirmative
Determination of Critical Circumstances, 81 Fed. Reg. 64,135 (Dep’t Commerce
Sept. 19, 2016), and accompanying decision memorandum.
In November 2013, Commerce announced changes in its method of selecting
mandatory respondents. See Antidumping Procs.: Announcement of Change in
Dep’t 	Practice 	for 	Respondent 	Selection 	in 	Antidumping 	Duty 	Procs. 	&
Conditional Review of the Nonmarket Econ. Entity in NME Antidumping Duty
Procs., 78 Fed. Reg. 65,963 (Dep’t Commerce Nov. 4, 2013) (“Practice Change”).
As originally enacted, a 1984 change in the statute permitted Commerce to use
“statistical sampling” of products “whenever a significant volume of sales is
involved or a significant number of adjustments to prices is required.” See Pub. L.
No. 98-573, § 620(a), 98 Stat. 2948, 3039 (1984). With passage of the Uruguay
Round Agreements Act in 1994, Commerce’s mandatory respondent selection
practice came to rely generally upon the then-new provision of 19 U.S.C.
§ 1677f-1(c)(2) for “exporters and producers accounting for the largest volume of
the subject merchandise from the exporting country that can be reasonably
examined” (“subsection (B)”), and it resorted to using the “statistically valid”
sampling provision (“subsection (A)”) only rarely. See Proposed Methodology for
Respondent Selection in Antidumping Procs.; Req. for Cmt., 75 Fed. Reg. 78,678,
78,678 (Dep’t Commerce Dec. 16, 2010) (“Proposed Methodology”) (emphasis
added) (the Department has used subsection (B) in “virtually every one of its
proceedings”). The 2013 Practice Change announced that Commerce would
consider sampling when it can select a minimum of three respondents to
examine individually and when the three largest respondents (or more if the
Department intends to select more than three respondents) by import
volume of the subject merchandise under review account for normally no
more than 50 percent of total volume. The Department considers 50 percent
[of 	import 	volume] 	to be 	a 	reasonable 	threshold because in 	these
circumstances the agency would be able to calculate specific dumping
margins for the majority of imports during a period of review.
Practice Change, 78 Fed. Reg. at 65,968 (emphasis added).
Thus, the Practice Change announced that Commerce would use the statistical
sampling found in subsection (A) only if certain conditions were met. Otherwise,
subsection (B) (volume) would be used. Specifically, Commerce would use the
sampling of subsection (A) “where possible” on a case-by-case basis for the
selection of mandatory respondents, if interested parties made a specific request to
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more than two mandatory respondents, separate rate companies would receive more accurate rates,
and a great deal of litigation would be avoided. Judges of the Federal Circuit have expressed
similar views. See, e.g., Oral Argument, Y.C. Rubber Co. (North America) v. United States, No.
21-1489 (Fed. Cir. argued Nov. 5, 2021), https://cafc.uscourts.gov/home/oral-argument/listen-to-
oral-arguments/.
Although Plaintiffs’ proposed method of averaging in the zero percent rate might well
result in a more accurate all-others rate, it is not required by the law. Commerce’s exclusion of
Hubei Qianjiang’s zero percent rate from its separate rate calculation comports with the language
of the statute. See 19 U.S.C. § 1673d(c)(5)(A) (emphasis added) (“[T]he estimated all-others rate
shall be an amount equal to the weighted average of the estimated weighted average dumping
use that method. See Proposed Methodology, 75 Fed. Reg. at 78,678. Commerce,
however, would forgo the subsection (A) option (and rely on the (B) option): (1) if
it is unable to examine at least three companies “due to resource constraints”; or
(2) when the largest companies by import volume account for at least 50 percent of
total imports; or (3) when the “characteristics” of the underlying population make
it highly likely that results obtained from the largest possible sample would be
unreasonable to represent the population (i.e., when “information obtained by or
provided to the Department provides a reasonable basis to believe or suspect that
the average export prices and/or dumping margins for the largest exporters differ
from such information that would be associated with the remaining exporters”).
Practice Change, 78 Fed. Reg. at 65,964-65.
There can be little doubt that relying almost exclusively on subsection (B) made
Commerce’s work easier, while still, at least arguably, using a sufficiently large
sample of imports to calculate an accurate rate for the unexamined respondents
receiving the all-others rate. Cf. Practice Change, 78 Fed. Reg. at 65,968. The
Department, however, does not appear to always follow the guidance of the
Practice Change. See, e.g., id. (“The Department considers 50 percent [of import
volume] to be a reasonable threshold because in these circumstances the agency
would be able to calculate specific dumping margins for the majority of imports
during a period of review.”).
Jilin, 45 CIT at ___, 519 F. Supp. 3d at 1235-38 (cleaned up).
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margins established for exporters and producers individually [examined], excluding any zero and
de minimis margins, and any margins determined entirely under section 1677e of this title.”).
By claiming that Commerce must average Hubei Qianjiang’s zero percent rate with
Nanjing Gemsen’s rate of 7.92 percent, Plaintiffs ignore the statute’s express direction that
Commerce exclude “any zero and de minimis margins, and any margins determined entirely [based
on facts available or adverse facts available].” See id. Nonetheless, Plaintiffs maintain that
Commerce has recently established a policy of including zero or de minimis rates in the calculation
of the all-others rate when there are only two mandatory respondents. See Pls.’ Br. 9 & n.4.
Plaintiffs misread the authorities.
Pursuant to the statute, if the estimated weighted average dumping margins established for
all mandatory respondents are zero, de minimis, or determined entirely based on facts available or
adverse facts available, then Commerce “may use any reasonable method to establish the estimated
all-others rate for exporters and producers not individually investigated, including averaging the
estimated weighted average dumping margins determined for the exporters and producers
individually investigated.” See 19 U.S.C. § 1673d(c)(5)(B). In other words, the statute provides
that Commerce is permitted to average zero or de minimis rates under the “any reasonable method”
exception when all of the individually examined respondents’ rates are zero or de minimis. See id.
For example, in Bestpak, a case with only two mandatory respondents, one respondent was
individually examined and received a de minimis rate, while the other was assigned an adverse
facts available rate because it failed to cooperate. See Bestpak, 716 F.3d at 1375 (“In this case . . .
the only two dumping margins on the administrative record were Yama’s de minimis rate and
Jintian’s AFA China-wide rate [which it was assigned because of its refusal to cooperate in the
investigation].”). Thus, both respondents received rates that were zero, de minimis, or determined
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entirely based on facts available or adverse facts available. See id. Therefore, the conditions for
applying the exception found in § 1673d(c)(5)(B) were met, and Commerce took a simple average
of the two rates. See id.
Unlike in Bestpak, use of the exception in § 1673d(c)(5)(B) (and thus averaging the
Mandatory Respondents’ rates) is not statutorily directed here, because the conditions for its
application—i.e., 	when 	the 	dumping margins 	for 	all 	individually investigated 	mandatory
respondents are zero, de minimis, or determined entirely based on facts available or adverse facts
available—were not satisfied. That is, mandatory respondent Nanjing Gemsen’s calculated rate of
7.92 percent was not zero, de minimis, or determined entirely based on facts available or adverse
facts available.
Plaintiffs have cited no case approving the exception found in § 1673d(c)(5)(B) when
Commerce has available to it a calculated margin that is greater than zero and not de minimis. One
day a court may find that record evidence supports a finding that, in a case similar to that presented
here, the assigned rate is so far from the mark that it is unlawful. That day has not yet arrived.
Accordingly, the court finds that Commerce’s reliance on the general rule found in 19 U.S.C.
§ 1673d(c)(5)(A) in applying Nanjing Gemsen’s rate to the Separate Rate Companies as the all-
others rate is reasonable and in accordance with law.
III. 	Hi-King’s Claim Challenging the Lawfulness of Commerce’s 15-Day Liquidation
Policy Is Moot
Commerce published its Final Results on October 31, 2019 and stated therein that it
“intend[ed] to issue assessment instructions to CBP 15 days after the date of publication of the[]
final results of review.” Final Results, 84 Fed. Reg. at 58,372. The liquidation instructions were
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issued on November 18, 2019, and eleven days later, on November 29, 2019, Hi-King’s entries
were liquidated.
On November 26, 2019, three days before its entries were liquidated, Hi-King timely filed
a summons with this Court initiating its appeal challenging certain aspects of the Department’s
Final Results. On December 3, 2019, Hi-King timely filed its initial complaint. On December 4,
2019, it submitted its Form 24 request for a statutory injunction preventing the liquidation of its
entries. The following day, on December 5, 2019, the court granted Hi-King’s request enjoining
Customs’ liquidation of its entries.
It was not until after the filing of its initial complaint, however, that Hi-King’s counsel
realized its entries had been liquidated prior to the issuance of the statutory injunction. Hi-King
filed two motions in response to learning that its entries had been liquidated. The first, on March
19, 2020, was for leave to file an amended complaint to add a claim challenging the lawfulness of
Commerce’s 15-day liquidation policy. The second, on May 21, 2020, was for an order directing
Customs to reset its entries to unliquidated status. By orders dated April 23, 2020 and June 25,
2020, respectively, Hi-King’s amended complaint was deemed filed and its entries reset to
unliquidated status. See supra Background.
Hi-King claims that, notwithstanding the June 25, 2020 order directing Customs to reset
its entries to unliquidated status—with which Customs has complied—its case has not been
mooted, and the court retains jurisdiction over its claim alleging that Commerce’s 15-day
liquidation policy is unlawful. Hi-King acknowledges that the particular harm it suffered was
remedied by the court’s June 25, 2020 order. It maintains, however, that Commerce’s alleged
unlawful application of the 15-day liquidation policy is not limited to this review. See Consol. Pl.’s
Reply 15. For that reason, Hi-King argues that the issue is “capable of repetition yet evading
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review,” and therefore falls within the narrow exception to the mootness doctrine. See Consol.
Pl.’s Reply 15. Thus, Hi-King asks the court to “provide further guidance [regarding] the legality
of the Department’s 15-day liquidation policy.” Consol. Pl.’s Reply 18.
For its part, the Government argues that Hi-King’s claim is moot because the court’s order
restored its entries to unliquidated status, and the “capable of repetition, yet evading review”
exception to the mootness doctrine does not apply here.
Following the court’s order, and following the entry of similar orders in other cases before
this Court, 26 Commerce issued a notice effectively discontinuing the use of its 15-day liquidation
policy. Counsel for Commerce did not inform the court of the notice. Commerce published the
notice in the Federal Register on January 15, 2021, announcing that:
effective immediately upon publication of this notice, [Commerce] is discontinuing
its policy to issue liquidation instructions in certain segments of antidumping duty
(AD) and countervailing duty (CVD) administrative proceedings to [Customs] 15
days after publication or mailing, whichever applies, of final administrative
determinations where no statutory injunction was requested . . . .
Notice of Discontinuation of Policy To Issue Liquidation Instructions After 15 Days in Applicable
Antidumping and Countervailing Duty Administrative Proceedings, 86 Fed. Reg. 3995, 3995
(Dep’t Commerce Jan. 15, 2021).
Accordingly, because Commerce’s 15-day liquidation policy has been discontinued, the
“capable of repetition, yet evading review” exception to the mootness doctrine does not apply.
That is, Hi-King’s claim that Commerce will continue to unlawfully employ its 15-day liquidation
26 	See, e.g., Order, Jinxiang Infang Fruit & Vegetable Co., v. United States, 44 CIT
___, ___, 476 F. Supp. 3d 1415 (2020) (Gordon, J.) (No. 19-211), ECF No. 24; NTSF Seafoods
Joint Stock Co. v. United States, 44 CIT ___, ___, 487 F. Supp. 3d 1310, 1315 (2020) (Choe-
Groves, J.) (“The court issued a letter on August 26, 2020 requesting that Defendant consider
restoring NTSF’s subject entries to unliquidated status. Defendant consented. The court ordered
that NTSF’s subject entries be restored to unliquidated status.”).
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policy 	in 	future 	administrative 	reviews 	has 	been 	rendered 	moot 	by 	the 	Department’s
discontinuation of the policy. For that reason, the court does not address this issue.
CONCLUSION
For the foregoing reasons, the court sustains Commerce’s Final Results. Judgment shall be
entered accordingly.
/s/ Richard K. Eaton
Judge
Dated:'HFHPEHU
1HZ<RUN1HZ<RUN
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