Shandong Rongxin Import & Export Co., Ltd. v. United States

Slip Op. 16-32
UNITED STATES COURT OF INTERNATIONAL TRADE
SHANDONG RONGXIN IMPORT &
EXPORT CO., LTD.,
Plaintiff,
v.
UNITED STATES,
Defendant,
AND
DIXON TICONDEROGA COMPANY,
Defendant-Intervenor.
Before: 	Nicholas Tsoucalas,
Senior Judge
Court No. 15-00151
OPINION AND ORDER
[Commerce’s final results in antidumping administrative review
are remanded.]
Dated: April 5, 2016
John 	J. 	Kenkel, 	Gregory 	S. 	Menegaz, 	J. 	Kevin 	Horgan, 	and 	Judith
Holdsworth, 	deKieffer 	& 	Horgan, 	PLLC, 	of 	Washington 	DC, 	for
plaintiff.
Robert 	M. 	Norway, 	Trial 	Attorney, 	Commercial 	Litigation 	Branch,
Civil Division, U.S. Department of Justice, of Washington DC, for
defendant. 	With him on the brief were Benjamin C. Mizer, Principal
Deputy 	Assistant 	Attorney 	General, 	Jeanne 	E. 	Davidson, 	Director,
Patricia M. McCarthy, Assistant Director, and Erica A. Hixon, Trial
Counsel. Of counsel on the brief was Amanda T. Lee, Office of the
Chief 	Counsel 	for 	Trade 	Enforcement 	and 	Compliance, 	U.S.
Department of Commerce, of Washington DC.
Felicia 	Leborgne 	Nowels 	and 	Sheryl 	D. 	Rosen, 	Akerman 	LLP, 	of
Tallahassee, FL, for defendant-intervenor.
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Tsoucalas, 	Senior 	Judge: 	Plaintiff, 	Shandong 	Rongxin
Import & Export Co., Ltd., (“Shandong”) contests Commerce’s Final
Results 	of 	the 	Antidumping 	Duty 	Administrative 	Review 	on 	Certain
Cased pencils from the People’s Republic of China (“PRC”), Certain
Cased 	Pencils 	From 	the 	PRC, 	80 	Fed. 	Reg. 	26,897 	(Dep’t 	Commerce
May 11, 2015) (Final Results of the Antidumping Duty Administrative
Review) (“Final Results”); Issues and Decision Memorandum for the
Final 	Results 	of 	Antidumping 	Duty 	Administrative 	Review: 	Certain
Cased Pencils from the PRC; 2012-2013, A-570-827, (Apr. 30, 2015)
(“I&D Memo”); Pl.’s Rule 56.2 Mot. for J. Upon the Agency R., Aug.
28, 	2015, 	ECF 	No. 	24 	(“Pl’s 	Br.”). 	Defendant, 	United 	States
Department 	of 	Commerce 	(“Commerce”), 	and 	Defendant-Intervenor,
Dixon 	Ticonderoga 	Company 	(“Dixon”), 	oppose 	Shandong’s 	Motion.
Def.’s 	Opp’n, 	Dec. 	18, 	2015, 	ECF 	No. 	30; 	Def-Inter. 	Opp’n, 	Dec.
18, 2015, ECF No. 34. 	For the following reasons, Commerce’s Final
Results are remanded.
BACKGROUND
Shandong 	is 	an 	exporter 	of 	pencils 	from 	the 	PRC 	whose
pencils are subject to an Antidumping Duty Order. 	Final Results,
80 	Fed. 	Reg. 	at 	26,897. 	On 	December 	20, 	2013, 	Dixon 	filed 	a
request 	for 	administrative 	review 	of 	Shandong. 	Req. 	for
Administrative 	Review, 	PR 	1 	(Dec. 	20, 	2013) 	ECF 	No. 	27 	(Sept. 	4,
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2015) (“Req.”). 	Dixon’s request stated that “[a]s a United States
importer and manufacturer of subject merchandise, Petitioner is an
interested 	party 	under 	19 	U.S.C. 	§ 	1677(9) 	who 	may 	make 	this
request 	for 	administrative 	review 	pursuant 	to 	19 	C.F.R. 	§
351.213(b).” 	Id. 	at 	1. 	The 	request 	was 	accompanied 	by 	a 	company
certification, signed by Dixon’s Chief Executive Officer (“CEO”),
Timothy Gomez, which stated that the information contained in the
submission is accurate. 	Id. at 3. 	On February 3, 2014, Commerce
initiated 	an 	administrative 	review 	of 	Shandong. 	I&D 	Memo 	at 	2.
During 	the 	review, 	Shandong 	argued 	that, 	first, 	Commerce’s
initiation 	of 	the 	review 	of 	Shandong 	was 	void 	ab 	initio, 	because
Dixon 	failed 	to 	claim 	that 	it 	was 	a 	domestic 	interested 	party,
that 	is, 	a 	U.S. 	manufacturer 	of 	pencils 	during 	the 	period 	of
review, and second, Shandong deserves a separate rate, because it
can demonstrate the absence of government control, both in law (de
jure) and in fact (de facto). Pl. Br. at 3, 20-37.
In 	the 	Final 	Results, 	Commerce 	found 	that 	there 	is 	no
evidence 	“on 	the 	record 	that 	undermines 	or 	calls 	into 	question
Dixon’s certification [that it is an interested party].” I&D Memo
comment 2 at 9.
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JURISDICTION AND STANDARD OF REVIEW
The Court has jurisdiction over this action pursuant to
Section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c)
(2012), and Section 516A(a)(2)(A)(i) of the Tariff Act of 1930, 19
U.S.C. § 1516a(a)(2)(A)(i)(I) (2012).1
The 	Court 	will 	hold 	unlawful 	Commerce’s 	determinations
that are unsupported by substantial evidence on the record, or not
otherwise in accordance with law. 	19 U.S.C. § 1516a(b)(1)(B)(i).
To determine whether Commerce's interpretation and application of
the 	statute 	is 	“in 	accordance 	with 	law,” 	the 	courts 	review 	the
statute to determine whether “Congress has directly spoken to the
precise 	question 	at 	issue.” 	Chevron 	U.S.A. 	Inc. 	v. 	Natural 	Res.
Def. Council, Inc., 467 U.S. 837, 842 (1984). “To ascertain whether
Congress 	had 	an 	intention 	on 	the 	precise 	question 	at 	issue, 	we
employ 	the 	‘traditional 	tools 	of 	statutory 	construction.’” 	Timex
V.I., 	Inc. 	v. 	United 	States, 	157 	F.3d 	879, 	882 	(Fed. 	Cir. 	1998)
(citing 	Chevron, 	467 	U.S. 	at 	843 	n.9). 	The 	tools 	of 	statutory
construction “include the statute’s structure, canons of statutory
construction, 	and 	legislative 	history.” 	Id. 	If 	the 	Court
determines that the statute is silent or ambiguous with respect to
1 Further citations to the Tariff Act of 1930 are to the relevant
portions of Title 19 of the U.S. Code, 2012 edition, and all
applicable amendments thereto.
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the 	specific 	issue, 	the 	question 	then 	becomes 	what 	level 	of
deference 	is 	owed 	Commerce’s 	interpretation, 	the 	traditional
second 	prong 	of 	the 	Chevron 	analysis. 	Chevron, 	467 	U.S. 	at 	842-
43. 	See 	United 	States 	v. 	Mead 	Corp., 	533 	U.S. 	218, 	228 	(2001).
“Chevron 	deference 	is 	afforded 	to 	Commerce’s 	statutory
interpretations as to the appropriate methodology . . . .” Pesquera
Mares Australes Ltda. v. United States, 266 F.3d 1372, 1379 (Fed.
Cir. 2001). 	Under Chevron, “if the statute is silent or ambiguous
with respect to the specific issue, the question for the court is
whether the agency’s answer is based on a permissible construction
of 	the 	statute.” 	Chevron, 	467 	U.S. 	at 	843. 	A 	“permissible”
construction 	under 	Chevron 	is 	understood 	in 	terms 	of
reasonableness; only reasonable interpretations will be upheld by
the Court. See Koyo Seiko Co., Ltd. v. United States, 36 F.3d 1565,
1573 (Fed. Cir. 1994)(“Chevron requires us to defer to the agency's
interpretation 	of 	its 	own 	statute 	as 	long 	as 	that 	interpretation
is reasonable.”). 	To determine reasonableness, the Court looks to
the 	express 	terms 	of 	the 	statute, 	the 	objectives 	of 	the 	statute,
and the objectives of the statutory scheme as a whole. 	Wheatland
Tube Co. v. United States, 495 F.3d 1355, 1361 (Fed. Cir. 2007).
The Court will uphold Commerce’s determination unless it
is 	unsupported 	by 	substantial 	evidence 	on 	the 	record. 	19 	U.S.C.
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§ 1516a(b)(1)(B)(i). 	“[S]ubstantial evidence is more than a mere
scintilla. 	It 	means 	such 	relevant 	evidence 	as 	a 	reasonable 	mind
might accept as adequate to support a conclusion.” Consol. Edison
Co. 	of 	NY 	v. 	NLRB, 	305 	U.S. 	197, 	229 	(1938). 	Moreover,
“substantial evidence” must be measured by the record as a whole,
“including whatever fairly detracts from the substantiality of the
evidence.” Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562
(Fed. 	Cir. 	1984). 	Commerce’s 	determination 	cannot 	be 	based 	on
“isolated 	tidbits 	of 	data 	which 	suggest 	a 	result 	contrary 	to 	the
clear weight of the evidence.” USX Corp. v. United States, 11 CIT
82, 84, 655 F. Supp. 487, 489 (1987). “[T]he substantial evidence
standard 	requires 	more 	than 	mere 	assertion 	of 	‘evidence 	which 	in
and of itself justified [the . . . determination], without taking
into 	account 	contradictory 	evidence 	or 	evidence 	from 	which
conflicting 	inferences 	could 	be 	drawn.’” 	Gerald 	Metals 	Inc. 	v.
United 	States, 	132 	F.3d 	716, 	720 	(Fed. 	Cir. 	1997) 	(quoting
Universal Camera Corp. v. NLRB, 340 U.S. 474, 487 (1951)).
DISCUSSION
The 	issue 	the 	court 	must 	first 	address 	is 	whether
Commerce’s 	determination 	— 	that 	Dixon 	was 	a 	domestic 	interested
party 	with 	standing 	to 	request 	an 	administrative 	review 	— 	is
supported by substantial evidence and in accordance with law. 	If
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Commerce’s determination was not supported by substantial evidence
and in accordance with law, there is no reason to reach the second
issue of whether Shandong deserves a separate rate.
Each 	year 	during 	the 	anniversary 	month 	of 	the
publication 	of 	an 	antidumping 	duty 	order, 	a 	domestic 	“interested
party” 	may 	request 	in 	writing 	that 	the 	Secretary 	conduct 	an
administrative 	review 	“if 	the 	requesting 	person 	states 	why 	the
person desires the Secretary to review those particular exporters
or 	producers.” 	19 	C.F.R. 	§ 	351.213(b)(1) 	(2013). 	An 	interested
party means “a manufacturer, producer, or wholesaler in the United
States of a domestic like product.” 19 U.S.C. § 1677(9)(C)(2012).
Commerce 	may 	presume 	standing, 	absent 	evidence 	to 	the
contrary. 	See Zenith Electr. Corp. v. United States, 18 CIT 1145,
1149, 	872 	F.Supp. 	992, 	996 	(1994) 	(citing 	Minebea 	Co. 	v. 	United
States, 	984 	F.2d 	1178, 	1181 	(Fed. 	Cir. 	1993)). 	“[T]he 	burden 	of
production of evidence to rebut standing has been allocated by the
Federal 	Circuit 	to 	the 	party 	challenging 	standing.” 	Id. 	at 	1150
(citing Minebea, 984 F.2d at 1181).
“[T]he 	legislative 	history 	states 	that 	the 	‘standing
requirements 	[should] 	be 	administered 	to 	provide 	an 	opportunity
for 	relief 	for 	an 	adversely 	affected 	industry 	and 	to 	prohibit
petitions 	filed 	by 	persons 	with 	no 	stake 	in 	the 	result 	of 	the
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investigation.’” 	Brother Indus. (USA), Inc. v. United States, 16
CIT 	789, 	793-94, 	801 	F. 	Supp. 	751, 	757 	(1992) 	(citing 	S.Rep. 	No.
96–249, 	96th 	Cong., 	1st 	Sess. 	63 	(1979), 	U.S.Code 	Cong. 	& 	Admin.
News 1979, pp. 381, 449).
Shandong 	argues 	that 	Dixon 	failed 	to 	make 	a 	claim 	that
it 	was 	a 	domestic 	producer 	during 	the 	period 	of 	review, 	and
therefore Dixon does not have standing to request an administrative
review. 	Pl.’s 	Br. 	at 	10-11. 	Shandong 	further 	argues 	that 	Dixon
implicitly 	claimed 	that 	Dixon 	manufactured 	pencils 	in 	China 	and
exported 	them 	to 	the 	U.S., 	pointing 	to 	Dixon’s 	claim 	that 	it 	was
a manufacturer of “subject merchandise” in the request for review.
Id. at 13; see also 19 U.S.C. § 1677(25) (subject merchandise means
“the 	class 	or 	kind 	of 	merchandise 	that 	is 	within 	the 	scope 	of 	an
investigation, 	a 	review, 	a 	suspension 	agreement, 	an 	order 	under
this 	subtitle 	or 	section 	1303 	of 	this 	title, 	or 	a 	finding 	under
the 	Antidumping 	Act, 	1921.”) 	An 	interested 	party 	means 	“a
manufacturer, 	producer, 	or 	wholesaler 	in 	the 	United 	States 	of 	a
domestic 	like 	product” 	under 	Section 	1677(9)(C), 	not 	a
manufacturer of subject merchandise, as stated in Dixon’s request.
19 	U.S.C. 	§1677(9)(C); 	Req. 	at 	1. 	Nevertheless, 	Shandong 	failed
to 	present 	this 	argument 	in 	its 	case 	brief 	at 	the 	administrative
level 	and 	therefore 	the 	court 	deems 	the 	argument 	waived. 	Pl.’s
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Admin. Case Br. at 15-16, PR 48 (Jan. 30, 2015), ECF No. 27 (Sept.
4, 2015) (“Pl.’s Admin. Case Br.”); See Husteel Co. Ltd. v. United
States, 39 CIT ___, ___, 77 F.Supp.3d 1286, 1294 (2015).
Commerce 	contends 	that 	Shandong 	“fails 	to 	cite 	any
evidence that would undermine Dixon’s claim that it was a domestic
interested party.” Def.’s Opp’n at 8; I&D Memo at 9 (“there is no
evidence 	on 	the 	record 	that 	undermines 	or 	calls 	into 	question
Dixon’s certification.”). 	The court disagrees. 	During the review,
Shandong 	provided 	evidence 	that 	Dixon’s 	affiliated 	Chinese
exporter, 	Beijing 	Fila 	Dixon 	Stationary 	Company, 	Ltd., 	produces
Dixon’s pencils in China. 	Certain Cased Pencils From the PRC, 78
Fed. Reg. 42,932 (Dep’t Commerce July 18, 2013) (Final Results of
Antidumping Duty Administrative Review and Determination to Revoke
Order 	in 	Part; 	2010-2011); 	Pl.’s 	Admin. 	Case 	Br. 	at 	15.
Therefore, 	in 	light 	of 	the 	evidence 	Shandong 	provided, 	Commerce
may 	not 	presume 	standing. 	See 	Zenith, 	18 	CIT 	at 	1149.2 	Commerce
failed to adequately address Shandong’s argument in the I&D Memo.
I&D Memo at 9.
2 In Zenith, the Court found that Commerce did not abuse its
discretion by not conducting a wide-ranging investigation of
Zenith’s standing where Respondent produced a prior statement of
intent to move assembly to Mexico (emphasis added). 	Zenith, 18
CIT at 1149-50. 	Unlike in Zenith, here, Shandong provided
actual evidence that Dixon’s affiliate produces pencils in
China. 	Cf. id.
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Commerce 	argues 	that 	its 	determination 	is 	supported 	by
substantial 	evidence, 	because 	Dixon’s 	CEO, 	Timothy 	Gomez,
certified 	in 	writing 	that 	Dixon 	is 	a 	U.S. 	producer 	of 	pencils.
Def.’s 	Opp’n 	at 	8; 	Req. 	at 	3. 	Nevertheless, 	Commerce 	failed 	to
explain how and why this certification trumps Shandong’s argument
to the contrary. 	See Motor Vehicle Mfr. Ass’n of the U.S. v. State
Farm 	Mut. 	Auto. 	Ins. 	Co., 	463 	U.S. 	29, 	43 	(1983) 	(“[t]he 	agency
must 	examine 	the 	relevant 	data 	and 	articulate 	a 	satisfactory
explanation 	for 	its 	action 	including 	a 	‘rational 	connection
between the facts found and the choice made.’”) (quoting Burlington
Truck Lines Inc. v. United States, 371 U.S. 156, 168 (1962).
Dixon asserts that Commerce’s standing determination was
supported 	by 	substantial 	evidence, 	because 	the 	antidumping 	duty
order 	on 	certain 	cased 	pencils 	from 	the 	PRC 	originates 	from 	a
petition 	filed 	in 	November 	1992 	by 	Dixon 	in 	which 	it 	was 	held 	to
be 	a 	U.S. 	producer; 	it 	has 	appeared 	in 	Sunset 	and 	Administrative
Reviews; and it receives Continued Dumping and Subsidy Offset Act
Disbursements. 	Def-Inter. 	Opp’n 	at 	6-11. 	Nevertheless, 	Dixon
fails 	to 	appreciate 	that 	“an 	agency's 	discretionary 	order 	[must]
be 	upheld, 	if 	at 	all, 	on 	the 	same 	basis 	articulated 	in 	the 	order
by the agency itself.” 	Burlington Truck Lines, Inc., 371 U.S. at
169. 	Commerce 	articulated 	a 	different 	basis 	for 	its 	decision 	on
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standing; 	therefore, 	the 	court 	cannot 	uphold 	Commerce’s 	decision
for the reasons proffered by Dixon. 	See id.; I&D Memo at 9.3
The 	court 	does 	not 	reach 	the 	issue 	of 	whether 	Shandong
deserves a separate rate until the threshold issue of standing is
resolved.
3 “Department's Position: Dixon has certified that it is a domestic
producer 	of 	pencils. 	Rongxin's 	[Shandong’s] 	assertion 	is
unsupported 	by 	factual 	information. 	Therefore, 	there 	is 	no
evidence 	on 	the 	record 	that 	undermines 	or 	calls 	into 	question
Dixon's certification. As a result, the Department finds no reason
to 	revisit 	Dixon's 	interested 	party 	status 	and 	determines 	that
Dixon 	is 	a 	domestic 	producer 	of 	pencils 	with 	standing 	to 	request
an administrative review.”
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ORDER
For the reasons stated above it is hereby,
ORDERED that this case is remanded to the Department of
Commerce, 	International 	Trade 	Administration, 	for 	further
explanation 	or 	reconsideration 	as 	may 	be 	appropriate. 	Commerce
shall 	have 	until 	May 	5, 	2016, 	to 	file 	its 	remand 	results. 	The
parties shall have until June 6, 2016, to file objections, and the
government shall have until July 6, 2016, to file its response.
SO ORDERED.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: April 5, 2016
New York, New York
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