NTSF Seafoods Joint Stock Company et al v. United States

Slip Op. 21-121
UNITED STATES COURT OF INTERNATIONAL TRADE
NTSF SEAFOODS JOINT STOCK
COMPANY and VINH QUANG
FISHERIES CORPORATION,
Plaintiffs,
v.
UNITED STATES,
Defendant,
and
CATFISH FARMERS OF
AMERICA, ALABAMA CATFISH
INC., AMERICA’S CATCH,
CONSOLIDATED CATFISH
COMPANIES LLC, DELTA PRIDE
CATFISH, INC., GUIDRY’S
CATFISH, INC., HEARTLAND
CATFISH COMPANY,
MAGNOLIA PROCESSING, INC.,
and SIMMONS FARM RAISED
CATFISH, INC.,
Defendant-Intervenors.
Before: Jennifer Choe-Groves, Judge
Court No. 19-00063
OPINION
[Sustaining the remand results of the U.S. Department of Commerce in the 2016–
2017 administrative review of the antidumping duty order on certain frozen fish
fillets from the Socialist Republic of Vietnam.]
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Dated: September 20, 2021
Jonathan M. Freed, Trade Pacific, PLLC, of Washington, D.C., for Plaintiffs NTSF
Seafoods Joint Stock Company and Vinh Quang Fisheries Corporation.
Kara M. Westercamp, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, D.C., for Defendant United States. With
her on the brief were Brian M. Boynton, Acting Assistant Attorney General,
Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of
counsel on the brief was Hendricks Valenzuela, Attorney, Office of the Chief
Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.
Jonathan M. Zielinski, James R. Cannon, Jr., and Nicole Brunda, Cassidy Levy
Kent (USA) LLP, of Washington, D.C., for Defendant-Intervenors Catfish Farmers
of America, Alabama Catfish Inc., America’s Catch, Consolidated Catfish
Companies LLC, Delta Pride Catfish, Inc., Guidry’s Catfish, Inc., Heartland
Catfish Company, Magnolia Processing, Inc., and Simmons Farm Raised Catfish,
Inc.
Choe-Groves, Judge: This case involves frozen fish fillets, including
regular, shank, and strip fillets and portions thereof, of the species Pangasius
Bocourti, Pangasius Hypophthalmus (also known as Pangasius Pangasius) and
Pangasius Micronemus. Plaintiffs NTSF Seafoods Joint Stock Company
(“NTSF”) and Vinh Quang Fisheries Corporation (“Vinh Quang”) (collectively,
“Plaintiffs”) filed this action challenging the final results of the U.S. Department of
Commerce (“Commerce”) in the 2016–2017 administrative review of the
antidumping duty order covering certain frozen fish fillets from the Socialist
Republic of Vietnam. See Certain Frozen Fish Fillets from the Socialist Republic
of Vietnam (“Final Results”), 84 Fed. Reg. 18,007 (Dep’t of Commerce Apr. 29,
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2019) (final results, and final results of no shipments of the antidumping duty
administrative review; 2016–2017); see also Certain Frozen Fish Fillets from the
Socialist Republic of Vietnam: Issues and Decision Mem. for the Final Results of
the Fourteenth Antidumping Duty Admin. Review: 2016–2017 (Dep’t of
Commerce Apr. 19, 2019), ECF No. 24-3 (“Final IDM”). Before the Court are the
Final Results of Redetermination Pursuant to Court Remand (“Remand Results”),
ECF No. 78-1, which the Court ordered in NTSF Seafoods Joint Stock Co. v.
United States (“NTSF”), 44 CIT __, 487 F. Supp. 3d 1310 (2020). For the
following reasons, the Court sustains the Remand Results.
ISSUES PRESENTED
The Court reviews the following issues:
1. Whether Commerce’s determination to grant offsets for NTSF’s fish oil
and fish meal byproducts is supported by substantial evidence; and
2. Whether Commerce’s determination that the GTA Data are the best
available information to calculate a surrogate value for NTSF’s fish oil
and fish meal byproducts is supported by substantial evidence.
BACKGROUND
The Court presumes familiarity with the facts and procedural history set
forth in its prior opinion and recounts the facts relevant to the Court’s review of the
Remand Results. See NTSF, 44 CIT at __, 487 F. Supp. 3d at 1314–16.
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In the Final Results, Commerce granted offsets for fish head and bone
byproducts when calculating normal value for NTSF, but denied offsets for fish oil
and fish meal byproducts because Commerce determined that NTSF failed to
demonstrate that NTSF actually produced and sold fish oil and fish meal
byproducts during the last three months of the period of review. Final IDM at 52–
53. Plaintiffs challenged Commerce’s determination. The Court held in NTSF
that Commerce’s denial of byproduct offsets for fish oil and fish meal was
unsupported by substantial evidence in light of potentially contradictory evidence
on the record and viewing the record as a whole, and remanded the case for further
proceedings. NTSF, 44 CIT at __, 487 F. Supp. 3d at 1321–23.
Commerce filed the Remand Results on March 23, 2021. On remand,
Commerce reversed its Final Results determination and granted NTSF byproduct
offsets for fish oil and fish meal. See Remand Results at 1. Based on Commerce’s
remand redetermination, Commerce calculated a revised dumping margin of $1.28
per kilogram for NTSF. Id. at 16. Commerce based the all-others rate applied to
separate rate-eligible respondents not selected for individual examination on
NTSF’s calculated margin. Id. at 16–17; see Final Results, 84 Fed. Reg. at 18,008;
Final IDM at 49. Commerce adjusted the all-others rate applied to Vinh Quang
accordingly. Remand Results at 17.
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JURISDICTION AND STANDARD OF REVIEW
The Court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and
28 U.S.C. § 1581(c). The Court shall hold unlawful any determination found to be
unsupported by substantial evidence on the record or otherwise not in accordance
with the law. 19 U.S.C. § 1516a(b)(1)(B)(i). The Court also reviews
determinations made on remand for compliance with the Court’s remand order.
Ad Hoc Shrimp Trade Action Comm. v. United States, 38 CIT __, __, 992 F.
Supp. 2d 1285, 1290 (2014), aff’d, 802 F.3d 1339 (Fed. Cir. 2015).
DISCUSSION
Plaintiffs and Defendant United States (“Defendant”) ask the Court to
sustain the Remand Results. See Pls.’ Comments Final Results Remand
Redetermination, ECF No. 85; Def.’s Resp. Supp. Remand Redetermination, ECF
No. 90. Defendant-Intervenors Catfish Farmers of America, Alabama Catfish Inc.,
America’s Catch, Consolidated Catfish Companies LLC, Delta Pride Catfish, Inc.,
Guidry’s Catfish, Inc., Heartland Catfish Company, Magnolia Processing, Inc., and
Simmons Farm Raised Catfish, Inc. (collectively, “Defendant-Intervenors” or
“Def.-Intervs.”) filed Defendant-Intervenors’ Comments in Opposition to Remand
Results, ECF Nos. 83, 84 (“Def.-Intervs.’ Cmts.”).
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I. 	Commerce’s Determination to Grant Byproduct Offsets
Commerce determined on remand that the record supported granting an
offset for NTSF’s sales of fish oil and fish meal byproducts during the last three
months of the period of review. See Remand Results at 4–6. Defendant-
Intervenors argue that NTSF failed to reconcile its byproduct data and support an
offset as required and, therefore, Commerce’s redetermination granting offsets for
fish oil and fish meal byproducts is unsupported by substantial evidence. Def.-
Intervs.’ Cmts. at 3–10.
For antidumping proceedings in which the subject merchandise is exported
from a non-market economy and available information does not permit the normal
value of subject merchandise to be determined using sales in the home market,
normal value is based on the value of the factors of production utilized in the
production of the subject merchandise. 19 U.S.C. § 1677b(c)(1). The statute
provides that Commerce shall value factors of production based on the best
available information from a surrogate market economy country or countries. Id.
The statute states that factors of production include, but are not limited to:
hours of labor required; quantities of raw materials employed; amounts of energy
and other utilities consumed; and representative capital cost, including
depreciation. Id. § 1677b(c)(3). As not all raw materials are incorporated into the
final product, Commerce provides offsets for byproducts generated during the
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production process. See Arch Chems., Inc. v. United States, 33 CIT 954, 956
(2009); Ass’n of Am. School Paper Suppliers v. United States, 32 CIT 1196, 1205
(2008); see also Tianjin Magnesium Int’l Co. v. United States, 34 CIT 980, 993
(2010) (stating that the antidumping statute does not prescribe a method for
calculating byproduct offsets, instead leaving the decision to Commerce). The
producer bears the burden of substantiating any byproduct offsets and must present
Commerce with sufficient information to support its claims for offsets. See Arch
Chems., 33 CIT at 956. The producer must show that the byproduct of the
production of the subject merchandise “is either resold or has commercial value
and re-enters the [producer’s] production process.” Id.; see Am. Tubular Prods.,
LLC v. United States, 38 CIT __, __, Slip Op. 14-116 at 17 (Sept. 26, 2014).
Commerce determined on remand that NTSF reconciled its byproduct
reporting properly and substantiated an offset because NTSF’s reporting accounted
for the byproducts generated during the period of review. Remand Results at 4–6,
10–12. Commerce cited a processing contract between NTSF and an unaffiliated
third-party processor for the production of fish oil and fish meal, which was in
effect during the last three months of the period of review. See id. at 5–6 (citing
Frozen Fish Fillets from Vietnam – NTSF’s Resp. to the Department’s Suppl.
Sections C & D Questionnaire at Supp CD-43, Ex. Supp CD-47, PR 370, CR 179–
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97 (May 15, 2018) (“NTSF Suppl. Resp.”)). 1 Based on its review of NTSF’s
processing contract, Commerce determined that NTSF did not sell fish head and
bone byproducts to the processor and that fish oil and fish meal byproducts were
produced pursuant to a tolling agreement. Id. (citing NTSF Suppl. Resp. Ex. Supp
CD-47). Commerce also cited NTSF’s production data in support of its
determination that during the last three months of the period of review, NTSF
transferred fish head and bone byproducts to the unaffiliated processor for
processing into fish oil and fish meal byproducts, which NTSF subsequently sold.
See id. at 11 (citing Frozen Fish Fillets from Vietnam – Section D Resp. & Section
D App. Resp. at D-16, Ex. D-13, PR 181, CR 92–95 (Jan. 18, 2018) (“NTSF
Section D Resp.”)).
Commerce reviewed NTSF’s financial statements and production data and
determined that NTSF sold fish head and bone byproducts during the first nine
months of the period of review and sold fish oil and fish meal byproducts during
the last three months of the period of review. Id. at 10–12 (citing NTSF Section D
Resp. Ex. D-13; NTSF Suppl. Resp. Ex. Supp CD-44). Commerce determined that
NTSF’s reporting accounts for byproducts generated during the period of review
and that a “miniscule discrepancy” in the reporting of 0.036 percent did not render
1 Citations to the administrative record reflect public record (“PR”) and
confidential record (“CR”) document numbers.
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the reconciliation invalid. Id. at 10–11 (citing NTSF Section D Resp. Ex. D-13;
NTSF Suppl. Resp. Ex. Supp CD-44). Commerce rejected Defendant-Intervenors’
argument that NTSF allegedly failed to reconcile its byproduct transfers
independently from sales. Id. at 11. Commerce determined that NTSF and non-
NTSF byproducts processed by a third-party were not comparable, due to potential
differences in the inputs used for non-NTSF products. Id. at 12 (citing NTSF
Suppl. Resp. Ex. Supp. CD-47). Commerce noted that the record did not indicate
that NTSF’s production data reporting was unreliable and that NTSF had provided
all requested documentation regarding its byproduct generation. Id. at 11.
Commerce concluded that NTSF had reconciled its byproduct production and
presented sufficient information to substantiate byproduct offsets for fish oil and
fish meal. Id.
The Court notes that the processing contract cited by Commerce shows that
NTSF transferred fish head and bone byproducts to a processor, but NTSF retained
ownership of the byproducts and the processed fish oil and fish meal byproducts.
See NTSF Suppl. Resp. Ex. Supp CD-47. The production data cited by Commerce
account for the amount of byproducts generated during the period of review
because the data show fish head and bone byproduct generation, along with fish
head and bone byproduct transfers to an unaffiliated processor and the output of
fish oil and fish meal byproducts from the processor. See NTSF Section D Resp.
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Ex. D-13. The Court observes that NTSF’s financial statements cited by
Commerce support Commerce’s determination that NTSF retained ownership of
the byproducts sent to the processor and show that NTSF sold fish oil and fish
meal, but did not sell fish head and bone, during the last three months of the period
of review. See NTSF Suppl. Resp. Ex. Supp CD-44. NTSF’s financial statements
and production data reviewed by Commerce account for NTSF’s byproducts
generated during the period of review. See id.; NTSF Section D Resp. Ex. D-13.
The Court concludes, therefore, that Commerce’s determinations that NTSF
reconciled its byproduct reporting properly and that NTSF substantiated its fish oil
and fish meal byproducts sufficiently to receive an offset are supported by
substantial record evidence cited by Commerce, including NTSF’s processing
contract, financial statements, and production data.
II. 	Commerce’s Valuation of NTSF’s Byproduct Offsets
In calculating NTSF’s byproduct offsets, Commerce valued NTSF’s
byproducts based on surrogate values from Indonesian import data from the Global
Trade Atlas (“GTA Data”), published by Global Trade Information Services, Inc.
See Remand Results at 12. Commerce selected Indonesia as the surrogate country
during earlier proceedings in the administrative review. See NTSF, 44 CIT at __,
487 F. Supp. 3d at 1314. Defendant-Intervenors argue that Commerce’s surrogate
value calculation for NTSF’s byproducts should be remanded because Commerce’s
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use of import data to calculate surrogate values for NTSF’s byproducts is not
supported by substantial evidence and Commerce should have used domestic
Indonesian prices to calculate surrogate values. Def.-Intervs.’ Cmts. at 10–13.
When valuing factors of production, such as byproduct offsets, the statute
requires Commerce to use the best available information regarding the value of the
factors from a surrogate market economy country or countries. 19 U.S.C.
§ 1677b(c)(1); see also An Giang Fisheries Imp. & Exp. Joint Stock Co. v. United
States, 41 CIT __, __, 203 F. Supp. 3d 1256, 1273 (2017). The statute instructs
Commerce to use the prices or costs of factors of production in one or more market
economy countries that are (1) at the level of economic development comparable
to that of the nonmarket economy country, and (2) significant producers of
comparable merchandise. 19 U.S.C. § 1677b(c)(4). Commerce has broad
discretion to determine what constitutes the best available information. Weishan
Hongda Aquatic Food Co. v. United States, 917 F.3d 1353, 1364–65 (Fed. Cir.
2019). The Court evaluates whether Commerce’s selection of the best available
information is reasonable and supported by substantial evidence. Downhole Pipe
& Equip., L.P. v. United States, 776 F.3d 1369, 1379 (Fed. Cir. 2015).
Commerce valued NTSF’s fish oil and fish meal byproducts using
Indonesian import GTA Data under headings of the Harmonized Tariff Schedule
from the Indonesian Tariff Commission (“HTS”): heading 2301.20.20 “Flours,
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meals and pellets, of fish, with a protein content of 60% or more by weight” for
fish meal byproducts; and heading 1504.20.90 “Fats and oils and their fractions, of
fish, other than liver oils: Other” for fish oil byproducts. Remand Results at 13.
Commerce rejected Defendant-Intervenors’ proposed data, Indonesian price quotes
for pangasius fish oil and fish meal, as not the best available information. Id.
The U.S. Court of Appeals for the Federal Circuit has affirmed that when
determining what constitutes the best available information, Commerce’s standard
practice is to select, to the extent practicable, surrogate value data that are publicly
available, product-specific, reflective of a broad market average, contemporaneous
with the period of review, and tax and duty exclusive. See Jacobi Carbons AB v.
United States, 619 F. App’x 992, 996 (Fed. Cir. 2015). In this case, Commerce
applied the same standard criteria articulated in Jacobi Carbons to determine what
data constitutes the best available information to calculate NTSF’s byproduct
offsets. See Remand Results at 12–13.
Commerce determined that the GTA Data are the best available information
because the GTA Data meet all of Commerce’s standard surrogate value selection
criteria as publicly available, product-specific, reflective of a broad market
average, contemporaneous with the period of review, and tax and duty exclusive.
Id. at 13–16. In contrast, Commerce determined that Defendant-Intervenors’
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proposed price quotes are not publicly available, product-specific, representative of
a broad market average, or fully contemporaneous with the period of review. Id.
Defendant-Intervenors do not contest Commerce’s determinations with
respect to four of the five standard surrogate value selection criteria, that the GTA
Data are publicly available, representative of a broad market average,
contemporaneous, or tax and duty exclusive. See Def.-Intervs.’ Cmts. at 10–13.
Defendant-Intervenors challenge only Commerce’s determination that the GTA
Data are product-specific. See id.
Based on the factor of product-specificity, Commerce valued NTSF’s
byproducts using GTA Data under HTS headings that correspond directly with
NTSF’s fish oil and fish meal byproducts. Id. at 14–15. Commerce determined
that the GTA Data are product-specific and constitute the best available
information because the fish meal HTS heading corresponds closely with the
protein content of the fish meal byproducts, a determining factor in their valuation,
and because the fish oil byproducts are oils with high protein content that fall
under the fish oil HTS heading. Id. In contrast, Commerce determined that despite
being species-specific, Defendant-Intervenors’ proposed Indonesian price quotes
do not discuss the protein content, thereby failing to establish that the price quotes
are product-specific. Id. at 15.
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The Court notes that record evidence supports Commerce’s determination
that the GTA Data are product-specific. For example, Commerce used the HTS
heading 2301.20.20 “Flours, meals and pellets, of fish, with a protein content of
60% or more by weight” for NTSF’s fish meal byproducts and heading 1504.20.90
“Fats and oils and their fractions, of fish, other than liver oils: Other” for NTSF’s
fish oil byproducts. Record evidence cited by Commerce indicates that NTSF’s
fish oil and fish meal were of a high protein content within the HTS headings used
by Commerce. See NTSF Suppl. Resp. Ex. Supp. CD-47; see also Remand
Results at 13. Because the HTS headings in the GTA Data cited by Commerce
correspond directly to NTSF’s fish oil and fish meal byproducts, the Court
concludes that Commerce’s determination that the GTA data are product-specific
is supported by substantial evidence. See NTSF Suppl. Resp. Ex. Supp. CD-47;
Remand Results at 13; see also Submitted GTA Data.
CONCLUSION
The Court holds that Commerce’s determination to grant NTSF offsets for
fish oil and fish meal byproducts is supported by substantial evidence and that
Commerce’s determination that the GTA Data are the best available information to
calculate a surrogate value for NTSF’s fish oil and fish meal byproducts is
supported by substantial evidence. The Court concludes that Commerce supported
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its remand redetermination with substantial evidence and sustains Commerce’s
Remand Results. Judgment will be entered accordingly.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated:
New York, New York
September 20, 2021
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