Can Tho Import-Export Joint Stock Company v. United States

Slip Op. 20-32
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Claire R. Kelly, Judge
Court No. 16-00071
PUBLIC VERSION
OPINION AND ORDER
[Sustaining the U.S. Department of Commerce’s remand redetermination in the
eleventh administrative review of the antidumping duty order covering certain frozen
fish fillets from the Socialist Republic of Vietnam.]
Dated: March 12, 2020
Andrew T. Schutz, Andrew B. Schroth, and Jordan C. Kahn, of Grunfeld, Desiderio,
Lebowitz, Silverman & Klestadt LLP, of Washington, D.C., for plaintiff Can Tho
Import-Export Joint Stock Company.
Joseph H. Hunt, Assistant Attorney General, Commercial Litigation Branch, Civil
Division, Department of Justice, of Washington, D.C, for defendant. With him on the
brief were Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director,
and Kara M. Westercamp, Trial Counsel. Of counsel was Ian McInerney, Attorney,
Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department
of Commerce, of Washington, D.C.
CAN THO IMPORT-EXPORT JOINT
STOCK COMPANY,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
CATFISH FARMERS OF AMERICA ET
AL.,
Defendant-Intervenors.
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James R. Cannon, Jr. and Jonathan M. Zielinski, of Cassidy Levy Kent (USA) LLP,
of 	Washington, 	D.C., 	for 	defendant-intervenors 	Catfish 	Farmers 	of 	America;
America’s Catch; Alabama Catfish Inc. d/b/a Harvest Select Catfish, Inc.; Heartland
Catfish Company; Magnolia Processing, Inc. d/b/a Pride of the Pond; and, Simmons
Farm Raised Catfish, Inc.
Kelly, 	Judge: 	Before 	the 	court 	is 	the 	U.S. 	Department 	of Commerce’s
(“Department” or “Commerce”) second remand redetermination in the eleventh
administrative review 1 of the antidumping duty (“ADD”) order covering certain
frozen fish fillets from the Socialist Republic of Vietnam (“Vietnam”), filed pursuant
to the court’s order in Can Tho Import-Export Joint Stock Company v. United States,
43 CIT __, 415 F. Supp. 3d 1187 (2019) (“Can Tho I”). 	See Final Results of
Redetermination Pursuant to Court Remand Order [in Can Tho I], Dec. 16, 2019,
ECF No. 82 (“Second Remand Results”); see also Certain Frozen Fish Fillets from
[Vietnam], 81 Fed. Reg. 17,435 (Dep’t Commerce March 29, 2016) (final results and
partial rescission of [ADD] admin. review; 2013-2014) and accompanying Issues and
Decision Memo. for the Final Results of the Eleventh [ADD] Admin. Review; 2013-
2014, A-552-801, (Mar. 18, 2016), ECF No. 22-3 (“Final Decision Memo.”). 	In Can
Tho I, the court remanded for further consideration Commerce’s decision to deny a
separate rate to Can Tho Import-Export Joint Stock Company (“Caseamex” or
“Plaintiff”). 	See Can Tho I, 43 CIT at __, 415 F. Supp. 3d at 1195. 	Commerce
determined, under protest, that Caseamex was entitled to a separate rate, because
1 The eleventh administrative review covers the period dating August 1, 2013 through
July 31, 2014 (“POR”). See Final Decision Memo. at 1.
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no further evidence exists beyond what it had reviewed in the final determination
and 	first 	remand 	redetermination. 2 	See 	Second 	Remand 	Results 	at 	1–2, 	4.
Defendant-Intervenors Catfish Farmers of America et al. allege that Commerce
overlooked 	record 	evidence 	that 	bears 	on 	whether 	the 	minority 	government
shareholder may exert control over Caseamex and request the court to again remand
the separate rate issue. See Def.-Intervenors’ Opp’n Second Remand Results at 1–5,
Jan. 15, 2020, ECF No. 90 (“Def.-Intervenors’ Br.”). Defendant and Plaintiff disagree
and request the court to sustain the Second Remand Results. See Def.’s Resp. [Def.-
Intervenors’ Br.] at 1, 4–5, Jan. 30, 2020, ECF No. 97 (“Def.’s Br.”); see also Pl.’s Reply
[Def.-Intervenors’ Br.] at 1–4, Jan. 30, 2020, ECF No. 94 (“Pl.’s Br.”). For the reasons
that follow, the court sustains Commerce’s Second Remand Results.
BACKGROUND
The court assumes familiarity with the facts as set forth in its previous opinion,
see Can Tho I, 43 CIT at __, 415 F. Supp. 3d at 1189–90, and recounts those relevant
to the court’s review of the Second Remand Results. In the eleventh administrative
review, Caseamex submitted a separate rate application (“SRA”). See Final Decision
Memo. at 28; see also Resp. Grunfeld Desiderio Lebowitz Silverman Klestadt, LLP to
Sec. of Commerce Pertaining to Caseamex [SRA], CD 34–36, bar codes 3244388-01–
2 By adopting a position forced upon it by the Court “under protest,” Commerce
preserves its right to appeal. See Viraj Grp., Ltd. v. United States, 343 F. 3d 1371,
1376 (Fed. Cir. 2003).
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03 (Dec. 1, 2014) (“Caseamex’s SRA”). 3 Commerce denied Caseamex’s SRA, based on
findings made in the tenth administrative review. See Final Decision Memo. at 28–
30. 	Given that the court remanded Caseamex’s separate rate in the tenth
administrative review in An Giang Fisheries Import and Export Joint Stock Co. v.
United States, 41 CIT __, __, 203 F. Supp. 3d 1256, 1294–95 (2017), Commerce sought
a remand in the eleventh administrative review, see Joint Status Report & Proposed
Br. Sched., Oct. 12, 2018, ECF No. 41, which this court granted. See Order, Oct. 15,
2018, ECF No. 42. 	On remand and in consideration of record evidence, including
Caseamex’s 2012 Articles of Association (“AoA”), Commerce found that the minority
government 	shareholder 4 	retained 	potential 	influence 	over 	the 	selection 	of
management 	and 	Caseamex’s 	day-to-day 	operations. 	See 	Final 	Results 	of
Redetermination Pursuant to Ct. Remand at 7–20, Apr. 4, 2019, ECF No. 51 (“First
Remand Results”). 	As a result, Commerce determined that Caseamex failed to
demonstrate autonomy and did not qualify for a separate rate. See generally id.
3 On June 20, 2016, Defendant filed on the docket the indices to the public and
confidential administrative records of this review at ECF Nos. 22-4–5. Subsequently,
on April 15, 2019, Defendant filed indices to the public and confidential first remand
record at ECF Nos. 53-2–3, and on January 3, 2020, Defendant also filed indices to
the public and confidential second remand record at ECF No. 88-2–3. 	All further
references to documents from the administrative records are identified by the
numbers assigned by Commerce in these indices.
4 The minority government shareholder is the
Caseamex’s SRA at 13.
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In Can Tho I, the court concluded that the record evidence did not support
Commerce’s view that the minority government shareholder could circumvent the
restrictions and limitations imposed by the AoA. 	Can Tho I, 43 CIT at __, 415 F.
Supp. 3d at 1192–95. The court explained that Commerce erroneously assumed that,
because Mr. X 5 was appointed General Director of Caseamex by the minority
government shareholder prior to the POR, he remained beholden to that minority
government shareholder throughout the POR. Can Tho I, 43 CIT at __, 415 F. Supp.
3d at 1193–95. 	The court faulted Commerce for failing to consider the record
evidence, namely the AoA, which establishes that a minority shareholder, such as the
minority government shareholder, has no power to effectuate change. Can Tho I, 43
CIT at __, 415 F. Supp. 3d at 1193–94. Further, on review of the AoA and the share
allocations of Mr. X, the minority government shareholder, and Caseamex employees,
the court noted that Mr. X and his employees, to the extent they are beholden to him,
could block appointments of managers and directors by preventing the minority
government 	shareholder 	from 	reaching 	the 	65% 	share 	threshold 	required 	for
approval. Id. Given that Commerce “offer[ed] no explanation why it is reasonable to
conclude that Mr. X[] was beholden the government, when the AoA precludes the
minority government shareholder from exercising any independent influence on the
Board of Directors or any manager of Caseamex, including Mr. X[,]” the court
5 Mr. X refers to 	See First Remand Results at 8; see also
Caseamex’s SRA at Ex. 1.
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remanded 	for 	further 	consideration 	and 	explanation 	Commerce’s 	denial 	of
Caseamex’s separate rate. Can Tho I, 43 CIT at __, 415 F. Supp. 3d at 1195.
Commerce filed its Second Remand Results under respectful protest, as it
disagrees with the court’s holding in Can Tho I that the record evidence did not
support Commerce’s determination denying Caseamex a separate rate. See id. at 7.
Nonetheless, Commerce finds that there is no further evidence than what it had
reviewed in the First Remand Results to show how the minority government
shareholder was in a position to control, or to potentially control, Caseamex. 	Id. at
1–2. Therefore, Commerce assigned Caseamex a separate rate. Id. at 2.
JURISDICTION AND STANDARD OF REVIEW
The court continues to have jurisdiction pursuant to section 516A(a)(2)(B)(iii)
of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii), and 28 U.S.C. §
1581(c) (2012), which grant the court authority to review actions contesting the final
determination in an administrative review of an ADD order. 6 The court will sustain
Commerce’s final determinations if they are supported by substantial evidence and
are in accordance with law. See 19 U.S.C. § 1561a(b)(1)(B)(i).
6 Further citations to the Tariff Act of 1930, as amended, are to the relevant
provisions of Title 19 of the U.S. Code, 2012 edition.
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DISCUSSION
Defendant-Intervenors 	challenge 	Commerce’s 	Second 	Remand 	Results 	as
unsupported by substantial evidence. 7 See Def.-Intervenors’ Br. at 1–5. 8 Specifically,
Defendant-Intervenors contend that Commerce failed to address record evidence that
demonstrates the minority government shareholder was directly involved in the daily
operations of Caseamex through a Member of the Board of Management (“BOM”),
Ms. Y. 9 	See id. at 1–4. 	Defendant and Plaintiff counter that Commerce reasonably
rejected this argument in the underlying administrative proceeding. 	See Def.’s Br.
at 4–5; Pl.’s Br. at 1–4. For the reasons that follow, Commerce reasonably determined
that the minority government shareholder could not influence the appointment of
managers and directors and the day-to-day operations of Caseamex through Ms. Y.
When 	Commerce 	investigates 	subject 	merchandise 	from 	a 	non-market
economy (“NME”), such as Vietnam, Commerce presumes that the government
7 The court reviews the substantiality of the evidence “by considering the record as a
whole, including evidence that supports as well as evidence that ‘fairly detracts from
the substantiality of the evidence.’” 	Huaiyin Foreign Trade Corp. v. United States,
322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Atl. Sugar, Ltd. v. United States, 744
F.2d 1556, 1562 (Fed. Cir. 1984)). Substantial evidence is “such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.” 	Id. (quoting
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)) (internal quotes omitted).
8 Defendant-Intervenors also state that Commerce’s Second Remand Results are not
in accordance with law, see Def.-Intervenors’ Br. at 5; however, they do not elaborate
on that claim of error.
9 Ms. Y refers to 	and she is the
Caseamex’s SRA at Exs. 9, 18.
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controls export-related decision-making of all companies operating within that NME.
Import 	Admin., 	[Commerce], 	Separate-Rates 	Practice 	and 	Application 	of
Combination Rates in Antidumping Investigations involving [NME] Countries, Pol’y
Bulletin 	05.1 	at 	1 	(Apr. 	5, 	2005), 	available 	at
http://enforcement.trade.gov/policy/bull05-1.pdf (last visited Mar. 4, 2020) (“Policy
Bulletin 05.1”); see also Antidumping Methodologies in Proceedings Involving [NME]
Countries: Surrogate Country Selection and Separate Rates, 72 Fed. Reg. 13,246,
13,247 (Dep’t Commerce Mar. 21, 2007) (background) (stating the Department’s
policy of presuming control for companies operating within NME countries); Sigma
Corp. v. United States, 117 F.3d 1401, 1405 (Fed. Cir. 1997) (approving Commerce’s
use of the presumption). 	Commerce assigns an NME-wide rate, unless a company
successfully demonstrates an absence of government control, both in law (de jure) and
in fact (de facto). 10 Policy Bulletin 05.1 at 1–2. 11
10 Respondents seeking to rebut the presumption of government control submit a
separate rate application. Policy Bulletin 05.1 at 3–4.
11 Commerce examines the following factors to evaluate de facto control: “whether the
export prices are set by, or subject to the approval of, a governmental authority;”
“whether the respondent has authority to negotiate and sign contracts and other
agreements;” “whether the respondent has autonomy from the central, provincial and
local governments in making decisions regarding the selection of its management;”
and, “whether the respondent retains the proceeds of its export sales and makes
independent decisions regarding disposition of profits or financing of losses.” Policy
Bulletin 05.1 at 2. With respect to de jure control, Commerce considers three factors:
(footnote continued)
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Relevant here, Commerce considers government ownership share in assessing
de facto control. Commerce views government majority ownership as actual control,
regardless of whether that control is exercised. 	See, e.g., 1,1,1,2-Tetrafluoroethane
from the People’s Republic of China [(“PRC”)]: Issues and Decision Memo. for the
Final Determination of Sales at Less than Fair Value [ADD] Investigation at 8, A-
570-998, 	(Oct. 	14, 	2014), 	available 	at
https://enforcement.trade.gov/frn/summary/prc/2014-24903-1.pdf (last visited Mar. 4,
2020); Decision Memo. for the Prelim. Determination of the [ADD] Investigation of
Carbon and Certain Alloy Steel Wire Rod from the [PRC] at 6–7, A-570-012 (Aug. 29,
2014), available at https://enforcement.trade.gov/frn/summary/prc/2014-21335-1.pdf
(“Steel Wire Rod Decision Memo.”) (last visited Mar. 4, 2020); see also An Giang
Fisheries Import and Export Joint Stock Co. v. United States, 42 CIT __, __, 284 F.
Supp. 3d 1350, 1359 (2018) (“Where a majority shareholder has potential control that
control is, for all intents and purposes, actual control.”). 	In cases of minority
government ownership, Commerce requires additional indicia of control prior to
concluding that a respondent company cannot rebut the presumption of de facto
control. 	See, e.g., 53-Foot Domestic Dry Containers from the [PRC]: Issues and
Decision Memo. for the Final Determination of Sales at Less Than Fair Value at 48–
“an absence of restrictive stipulations associated with an individual exporter’s
business and export licenses;” “any legislative enactments decentralizing control of
companies;” and, “any other formal measures by the government decentralizing
control of companies.” Id.
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50, 	A-570-014, 	(Apr. 	10, 	2014), 	available 	at
https://enforcement.trade.gov/frn/summary/prc/2015-08903-1.pdf (last visited Mar. 4,
2020) (“Containers Decision Memo.”) (finding de facto control where two government-
owned 	minority 	shareholders, 	together, 	made 	the 	government 	a 	controlling
shareholder 	according 	to 	the 	respondent 	company’s 	Articles 	of 	Association).
Commerce considers the totality of the circumstances for a given period of review and
may draw reasonable inferences that the respondent company does not control its
export activities. See, e.g., Steel Wire Rod Decision Memo. at 5; see also Containers
Decision Memo. at 46–53.
Here, Commerce, after reexamining the record, reasonably determines that
there is no evidence indicating that the minority government shareholder controlled,
or had the potential to control, Caseamex. Commerce specifically examines whether
the 	minority 	government 	shareholder, 	through 	Ms. 	Y, 	could 	influence 	the
appointment of managers and directors as well as the day-to-day operations of
Caseamex. See Second Remand Results at 6–7. First, Commerce finds that the AoA
constrains any influence Ms. Y could exert on the appointment of, for example, Mr. X
as General Director, and members to the Board of Directors. Id. at 6. 12 Even though
12 Defendant-Intervenors point to the reappointment of Mr. X as Caseamex’s General
Director during the POR by the BOM as evidence of the minority government
shareholder’s influence over Caseamex. 	See Def.-Intervenors’ Br. at 3 (citing
Caseamex’s Supp. Resp. at Ex. S3-8, First Rem. CD 2–6, bar codes 3782005-01–05
(footnote continued)
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Ms. Y, as a Member of the BOM participates in the selection of members to the Board
of Directors, any appointment is subject to shareholder approval. See id. Therefore,
Commerce reasonably concludes that “just as the [AoA] mitigate the government’s
potential influence in selecting board members through its status as a minority
shareholder, they similarly constrain such decisions by the Management Board.” Id.
at 6. 	Second, Commerce does not consider that Ms. Y’s position on the BOM would
enable the minority government shareholder to control, or to potentially control, the
day-to-day operations of Caseamex. See id. at 6–7. Referring to Can Tho I, Commerce
explains that Mr. X, not Ms. Y, plays an integral role in Caseamex’s operations. Id.
at 6. 	Notably, the AoA charges the BOM with long-term and strategic decision-
(June 6, 2014)). 	Although Ms. Y, as a member of the BOM, was one of the people
tasked with that decision, it was not her decision to make alone. 	Rather, the
member 	BOM—but 	not 	including 	Mr. 	X—appoints 	the 	General 	Director 	by
See Caseamex’s SRA at Exs. 9, 10
Further, even though 	of the AoA provides that
the appointment of the General Director is subject to shareholder
approval. 	See id. at Ex. 10
In addition, Defendant-Intervenors do not persuade that because
Ms. Y has
“considerable sway in either retaining or dismissing [Mr. X].” 	See Def.-Intervenors’
Br. at 5. 	They do not point to record evidence to suggest that the 	other
members of the BOM would follow her voting prerogatives. Rather, by the terms of
Ms. Y’s vote to retain could be overruled by 	votes to dismiss.
See Caseamex’s SRA at Ex. 10.
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making as well as supervision of the General Director, 13 who, unlike the BOM,
oversees Caseamex’s daily operations. 14 	Moreover, the AoA constrains whatever
power Ms. Y may potentially wield over Caseamex’s operations. 	Decisions of the
BOM are taken by 	and Ms. Y, as one member of a
BOM, including Mr. X, could not surpass the vote threshold to direct decisions of the
BOM. See Caseamex’s SRA at Exs. 9, 10 	Commerce reasonably
determines that the AoA constrains Ms. Y in her role as a member of the BOM, just
as the AoA constrains the minority government shareholder from exercising any
control over Caseamex through the Board of Directors or any manager, including Mr.
X. Cf. Can Tho I, 43 CIT at __, 415 F. Supp. 3d at 1194–95.
13 	of the AoA assigns, inter alia, the following rights and obligations
to 	the 	BOM:
Further,
requires 	BOM 	approval 	for, 	inter 	alia:
See Caseamex’s SRA at Ex.
10.
14 Under 	the General Director, inter alia,
See Caseamex’s SRA at Ex. 10.
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CONCLUSION
For the foregoing reasons, the Second Remand Results are supported by
substantial evidence and comply with the court’s order in Can Tho I, and, therefore,
are sustained. Judgment will enter accordingly.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: 	March 12, 2020
New York, New York
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