Calgon Carbon Corporation et al v. United States

Slip Op. 20-187
UNITED STATES COURT OF INTERNATIONAL TRADE
CALGON CARBON CORPORATION AND
CABOT NORIT AMERICAS, INC.,
Plaintiffs,
and
CARBON ACTIVATED TIANJIN CO., LTD.
AND CARBON ACTIVATED
CORPORATION, ET AL.,
Consolidated Plaintiffs,
v.
UNITED STATES,
Defendant,
and
CARBON ACTIVATED TIANJIN CO., LTD.
AND CARBON ACTIVATED
CORPORATION, ET AL.,
Defendant-Intervenors.
Before: Mark A. Barnett, Judge
Consol. Court No. 18-00232
OPINION AND ORDER
[Remanding the remand redetermination in the tenth administrative review of the
antidumping duty order on certain activated carbon from the People’s Republic of
China.]
Dated: December 21, 2020
David A. Hartquist, R. Alan Luberda, John M. Herrmann, II, and Melissa M. Brewer,
Kelley Drye & Warren LLP, of Washington, DC, for Plaintiffs/Defendant-Intervenors
Calgon Carbon Corp. and Cabot Norit Americas, Inc.
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Francis J. Sailer, Dharmendra N. Choudhary, and Jordan C. Khan, Grunfeld, Desiderio,
Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Consolidated Plaintiffs/
Defendant-Intervenors Carbon Activated Tianjin Co., Ltd., Carbon Activated
Corporation, Datong Juqiang Activated Carbon Co., Ltd., and Ningxia Guanghua
Cherishmet Activated Carbon Co., Ltd.
Antonia R. Soares, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant United States. With her
on the brief were Jeffrey B. Clark, Acting Assistant Attorney General, Jeanne E.
Davidson, Director, and Reginald T. Blades, Assistant Director. Of counsel on the brief
was Ayat Mujais, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Barnett, Judge: This matter is before the court following the U.S. Department of
Commerce’s (“Commerce” or “the agency”) redetermination pursuant to court remand in
the tenth administrative review (“AR10”) of the antidumping duty order on certain
activated carbon from the People’s Republic of China for the period of review April 1,
2016, through March 31, 2017 (“the POR”). See Final Results of Redetermination
Pursuant to Court Remand (“Remand Results”), ECF No. 75-1;1 see generally Calgon
Carbon Corp. v. United States, 44 CIT ___, 443 F. Supp. 3d 1334 (2020) (“Calgon
1 The administrative record filed in connection with the Final Results is divided into a
Public Administrative Record (“PR”), ECF No. 29-1, and a Confidential Administrative
Record (“CR”), ECF No. 29-2. Parties submitted public and confidential joint
appendices containing record documents cited in their briefs. See Non-Confidential
J.A., ECF Nos. 55-1 (Vol. I), 55-2 (Vol. II), 55-3 (Vol. III); Confidential J.A. (“CJA”), ECF
Nos. 54-1 (Vol. I), 54-2 (Vol. II), 54-3 (Vol. III). The administrative record associated
with the Remand Results is contained in a Public Remand Record, ECF No. 76-2, and a
Confidential Remand Record, ECF No. 76-3. Parties submitted public and confidential
joint appendices containing record documents cited in their briefs on the Remand
Results. See Public Index to Remand J.A., ECF No. 83; Confidential Index to Remand
J.A. (“RCJA”), ECF No. 82. Citations are to the confidential joint appendices unless
stated otherwise.
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(AR10) I”); Certain Activated Carbon From the People’s Republic of China, 83 Fed.
Reg. 53,214 (Dep’t Commerce Oct. 22, 2018) (final results of antidumping duty admin.
review; 2016–2017) (“Final Results”), ECF No. 29-4, and accompanying Issues and
Decision Mem., A-570-904 (Oct. 16, 2018) (“I&D Mem.”), ECF No. 29-5, as amended by
Certain Activated Carbon From the People’s Republic of China, 83 Fed. Reg. 58,229
(Dep’t Commerce Nov. 19, 2018) (am. final results of antidumping duty admin. review;
2016–2017).2
On June 7, 2017, Commerce initiated AR10. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 82 Fed. Reg. 26,444, 26,445 (Dep’t
Commerce June 7, 2017), PR 14, CJA (Vol. I) Tab 6. For the Final Results, and
relevant to this discussion, Commerce valued Respondents’ factor of production
(“FOP”) for carbonized material using Thai import data under Harmonized Tariff
Schedule (“HTS”) subheading 4402.90.1000. See I&D Mem. at 14. The surrogate data
included imports from France and Japan into Thailand. Id. at 15–16. In the Final
Results, Commerce also revised its preliminary decision to rely on Thai financial
statements to value financial ratios and, instead, relied on financial statements of a
Romanian company. See id. at 25–28. Commerce then made several adjustments to
the Romanian company’s financial statements. See Calgon (AR10) I, 443 F. Supp. 3d
at 1351.
2 The court’s opinion in Calgon (AR10) I resolved substantive issues concerning the
Final Results and provides additional factual background; familiarity with that opinion is
presumed.
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Plaintiffs Calgon Carbon Corporation and Cabot Norit Americas, Inc. filed a
motion for judgment on the agency record challenging certain aspects of the Final
Results. See id. at 1338. Consolidated Plaintiffs Carbon Activated Tianjin Co. Ltd.
(“Carbon Activated”), Carbon Activated Corporation (“CAC”), Datong Juqiang Activated
Carbon Co., Ltd. (“DJAC”), and Ningxia Guanghua Cherishmet Activated Carbon Co.,
Ltd. (collectively, “Carbon Activated Group”)3 also filed a motion for judgment on the
agency record challenging various aspects of the Final Results. See id. at 1338–39.
In Calgon (AR10) I, the court remanded the Final Results: (1) to allow the agency
to reconsider or revise its decision to include imports from France and Japan in the
carbonized material surrogate data, id. at 1349–50; and (2) to provide “an opportunity to
address [Respondents’] objections to the adjustments to [the] financial statements,” id.
at 1354. In the Remand Results, Commerce made certain adjustments to the surrogate
financial statements. Remand Result at 7–13, 23. With respect to surrogate data for
carbonized material, Commerce excluded the Japanese imports, id. at 5–7, 22, and
continued to include the French imports, id. at 4–5, 17–22.
Before the court, Carbon Activated Group challenges Commerce’s continued
inclusion of French imports in the Thai data. See Consol. Pls.’ Cmts. in Opp’n to
Remand Redetermination (“CAG’s Opp’n Cmts.”), ECF No. 77. Defendant United
States (“the Government”) filed comments supporting Commerce’s Remand Results.
3 Consistent with Calgon (AR10) I, the court refers to Consolidated Plaintiffs as “Carbon
Activated Group.” The court refers to those Consolidated Plaintiffs that participated in
the underlying administrative proceedings—CAC, Carbon Activated, and DJAC—
together, as “Respondents.”
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See Def.’s Reply in Supp. of the Dep’t of Commerce’s Remand Redetermination
(“Gov’t’s Reply”), ECF No. 81. No party challenges Commerce’s decision to exclude
Thai import prices from Japan or the adjustments made to the surrogate financial
statements4 and they appear to be consistent with the court’s remand instructions;
therefore, the court affirms those aspects of the Remand Results. However, for the
following reasons, the court remands the Remand Results for Commerce to reconsider
its inclusion of French imports in the Thai data in accordance with this opinion.
JURISDICTION AND STANDARD OF REVIEW
The court has 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) (2018), and 28 U.S.C. § 1581(c)
(2018). The court will uphold an agency determination that is supported by substantial
evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). “The
results of a redetermination pursuant to court remand are also reviewed for compliance
with the court’s remand order.” SolarWorld Ams., Inc. v. United States, 41 CIT ___,
___, 273 F. Supp. 3d 1314, 1317 (2017) (quoting Xinjiamei Furniture (Zhangzhou) Co.
v. United States, 38 CIT ___, ___, 968 F. Supp. 2d 1255, 1259 (2014)).
4 Carbon Activated Group also filed comments in support of Commerce’s adjustments to
the surrogate financial statement and exclusion of the Japanese imports from the
surrogate data for carbonized material. See Consol. Pls.’ Cmts. in Supp. of Remand
Redetermination, ECF No. 80.
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DISCUSSION
I. 	Commerce’s Inclusion of French Import Data
A. Legal Framework
“When valuing factors of production in the nonmarket economy context, the
statute directs that Commerce’s decision ‘shall be based on the best available
information regarding the values of such factors in a market economy country or
countries.’” SolarWorld Ams., Inc. v. United States, 910 F.3d 1216, 1222 (Fed. Cir.
2018) (quoting 19 U.S. C. § 1677b(c)(1)). Because the statute does not define “best
available information,” Commerce has broad discretion in selecting surrogate data.
See, e.g., QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011).
B. Factual and Procedural History
In the eighth and ninth administrative reviews (“AR8” and “AR9,” respectively),
Commerce selected Thai import data under HTS subheading 4402.90.1000 to value
carbonized material but excluded imports from France into Thailand because it
determined that the imports consisted of wood-based charcoal—a material that is not
specific to the input in question. See Issues and Decision Mem. for the Final Results of
[AR8], A-570-904, (Aug. 31, 2016) (“AR8 IDM”) at 30–33, available at
https://enforcement.trade.gov /frn/summary/prc/2016-21660-1.pdf (last visited Dec. 21,
2020); Issues and Decision Mem. for the Final Results of [AR9], A-570-904, (Nov. 1,
2017) (“AR9 IDM”) at 24–26, available at
https://enforcement.trade.gov/frn/summary/prc/2017-24184-1.pdf (last visited Dec. 21,
2020).
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For the Final Results of this review, Commerce again valued carbonized material
using Thai import data under HTS subheading 4402.90.1000. I&D Mem. at 14–16;
Prelim. Surrogate Value Mem. (May 3, 2017), Attach. 1 (“SV Spreadsheet”) at 75–76,
PR 215–18, RCJA ECF pp. 17–155.5 The Thai data include monthly quantities
imported from France from May 2016 to January 2017. SV Spreadsheet at 75. Record
evidence indicates that quantities imported in certain months were wood-based
charcoal. See I&D Mem. at 15.
Specifically, a 2016 sales summary indicates that quantities imported in May,
July, and August 2016 were, upon importation, classified under HTS subheading
4402.90.1000 (coconut charcoal). See First Surrogate Value Cmts. by DJAC and
[Carbon Activated] (Sept. 15, 2017) (“Respondents’ SV Cmts.”), Ex. 4A at ECF p. 10,
PR 116–21, RCJA ECF pp. 4–16. However, at the time of exportation from France,
these same quantities were classified under HTS subheading 4402.90.00 (wood-based
charcoal). 6 See id. at ECF pp. 13–14. Additionally, an email from an affiliate of another
company subject to this review refers to the quantities imported for all months as “wood
charcoal.” Id. at ECF p. 8; see also I&D Mem. at 1 & n.3 (noting that Jacobi Carbons
5 The documents submitted in the RCJA were not assigned tab or document numbers.
For ease of identification, the court identifies the location of the documents within the
RCJA using the applicable ECF page ranges. Pin citations are to the internal page
numbers provided in the documents when possible but are otherwise to the ECF page
numbers.
6 The sales summary classifies quantities under HTS subheading 4402.90.00 as
“unspecified charcoal.” Respondents’ SV Cmts., Ex. 4A at ECF p. 12–14. The Parties
and Commerce accept that quantities classified under this subheading are wood-based
charcoal. See, e.g., Remand Results at 21 & n.63 (citation omitted); Gov’t’s Reply at 9.
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AB and Jacobi Carbons, Inc. comprise a separate rate respondent company for
purposes of this review). The record does not contain evidence concerning the
composition of import quantities from France from September 2016 to January 2017.
See I&D Mem. at 15 (noting that record evidence concerning French-origin imports into
Thailand only covers part of the POR).
In Calgon (AR10) I, the court remanded Commerce’s inclusion of imports from
France in the Thai data because Commerce recognized “that the Thai data contain
French imports (wood-based charcoal) for part of the POR,” thereby contradicting “its
finding that the record lacks information that demonstrates that French imports under
HTS 4402.90.1000 were indeed wood-based charcoal.” 443 F. Supp. 3d at 1349
(citation omitted). In light of this contradiction, the court could not discern the path of
Commerce’s reasoning. See id.
In the redetermination, Commerce continued to include the French imports in the
Thai data. Remand Results at 4–5, 17–22. The agency explained:
While these data indicate that some of the exports from France to Thailand
during the [POR] were comprised of wood-based charcoal, the data fail to fully
account for the entire quantity of French imports under HTS 4402.90.1000 during
the POR because the French sales data placed on the record by the mandatory
respondents only cover a part of the POR (April 2016-July 2016).
Id. at 5. The agency went on to acknowledge implicitly that quantities imported in May,
July, and August 2016 (i.e., quantities considered to be wood-based charcoal upon
exportation from France and coconut charcoal upon importation into Thailand) were, in
fact, wood-based charcoal. See id. at 21 & n.63 (citing Respondents’ SV Cmts., Ex. 4A
at ECF p. 14 (showing all imports from France during those months to be French
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exports of wood-based charcoal)). Commerce did not differentiate its treatment of
French imports in this review from AR8 or AR9. 7
Commerce stated that Respondents bore the burden “to demonstrate that all of
the data under consideration [were] unreliable.” Id. at 21 (citation omitted). Because
Respondents did not provide evidence that French imports for every month during the
relevant period were wood-based charcoal, Commerce concluded that there was not a
basis to exclude the French imports. See id. at 21–22.
C. Parties Contentions
Carbon Activated Group contends that substantial evidence does not support the
agency’s inclusion of the French imports because the imports are aberrant and render
the Thai data unreliable. See CAG’s Opp’n Cmts. at 9–10. Carbon Activated Group
further contends that Commerce’s decision to include the French imports improperly
deviates from agency’s treatment of the French imports in AR8 and AR9. See id. at 21.
Finally, Carbon Activated Group attempts to distinguish authority relied on by
Commerce, id. at 10–14, and cites case law and agency determinations that, in its view,
demonstrate the unreasonableness of including the French imports, see id. at 18–22.
The Government contends that Carbon Activated Group failed to carry its burden
of establishing that all of the French imports were wood-based charcoal. See Gov’t’s
Reply at 8–11. According to the Government, although Commerce has excluded entire
7 Commerce acknowledged Respondents’ argument that in AR9 the agency excluded
the French imports from the Thai data, see Remand Results at 15–16, but did not
respond to it.
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country-specific datasets from its surrogate value calculation in other reviews, Carbon
Activated Group has not shown that such treatment is appropriate for the portion of the
Thai dataset at issue. See id. at 11–14. The Government asserts that Commerce’s
exclusion of the French imports in AR9 did not require Commerce to exclude the French
imports in this review. Id. at 16.
D. Commerce’s Inclusion of the French Imports in the Thai Surrogate Data
is Unsupported by Substantial Evidence
Although interested parties bear “the burden of creating an adequate record,”
“Commerce must, nonetheless, support its decision with substantial evidence.” SeAH
Steel VINA Corp. v. United States, 950 F.3d 833, 847 (Fed. Cir. 2020) (citations
omitted). Substantial evidence “must do more than create a suspicion of the existence
of the fact to be established.” NLRB v. Columbian Enameling & Stamping Co., 306 U.S.
292, 300 (1939). Here, Commerce failed to support with substantial evidence its
conclusion that the Thai data inclusive of the French imports were the best available
information to value carbonized material.
Commerce acknowledged that the May, July, and August 2016 import quantities
(i.e., quantities classified as coconut charcoal upon importation) were, in fact, wood-
based charcoal. See Remand Results at 21 & n.63 (citing Respondents’ SV Cmts., Ex.
4A at ECF p. 14). In so doing, Commerce’s finding aligned with its findings in AR8 and
AR9 that all Thai imports from France during the relevant periods consisted of wood-
based charcoal, notwithstanding their classification as coconut-based charcoal.
Compare Respondents’ SV Cmts., Ex. 4A at ECF p. 8 (email from Raphaele Bro-
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Capron and Isabelle Laidin stating that the quantities are “wood charcoal”), with AR9
IDM at 25 (referring to an affidavit by Raphaele Bro-Capron and Isabelle Laidin attesting
that the French imports were wood-based charcoal), and AR8 IDM at 32–33 (same).
Commerce did not identify evidence indicating that any quantity imported during
any subsequent month was something other than wood-based charcoal. Indeed, the
court afforded the Government an additional opportunity “to clarify whether the record
contains any positive evidence that any other imports of charcoal into Thailand from
France differed from the prior imports and, in fact, consisted of coconut-based charcoal
or other non-wood[-]based charcoal.” Order (Dec. 4, 2020), ECF No. 84. The
Government responded by providing excerpts from Exhibit 4A to Respondents’ SV
Comments. See Ltr. From Antonia R. Soares to the Court (Dec. 11, 2020), ECF No. 85.
These documents were consistent with Commerce’s findings that Respondents failed to
provide evidence affirmatively indicating that all Thai imports from France during the
POR consisted of wood-based charcoal. Remand Results at 4–5. However, the
documents also do not provide affirmative evidence that anything had changed with
respect to the Thai imports from France to suggest that it was reasonable for
Commerce to find that after more than two years of shipping only wood-based charcoal
to Thailand, France was suddenly shipping coconut-based charcoal. While each
administrative review is a separate exercise of Commerce’s authority and allows for
different conclusions based on different facts in the record, the record before the court
does not contain such different facts. Because the record as informed by AR8 and AR9
does not support a finding that the French imports into Thailand were anything other
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than wood-based charcoal, Commerce’s inclusion of the French imports is not
supported by substantial evidence and, thus, unlawful.
The Government attempts to avoid this outcome by faulting Carbon Activated
Group for not providing evidence that the French data were wood-based charcoal for
every month during the relevant period. See Gov’t’s Reply at 9–10 (citing Remand
Results at 21). This contention is unavailing. As discussed above, evidence in this
review combined with Commerce’s findings in AR8 and AR9 create a reasonable
inference that all French imports were wood-based charcoal. Commerce failed to cite
any evidence—much less substantial evidence—rebutting that inference and, thus,
failed to provide a reasoned explanation for its decision to use the Thai data inclusive of
the French imports. Under these circumstances, the issue is not that Carbon Activated
Group failed to develop the record, but that Commerce failed its statutory directive to
support its decision that the Thai data inclusive of French imports was the “best
available information” with which to value carbonized material with substantial evidence.
See SeAH Steel, 950 F.3d at 847 (citations omitted).8
8 The Parties also dispute the applicability of Calgon Carbon Corp. v. United States, 35
CIT 234 (2011) (“Calgon (AR1)”). See CAG’s Opp’n Cmts. at 20; Gov’t’s Reply at 17.
The Government contends that Calgon (AR1) is distinguishable because, here, the
issue is whether a country-specific dataset within overall import data is reliable. See
Gov’t’s Reply at 17. Such a factual distinction does not diminish the relevance of the
court’s statement in Calgon (AR1) that “Commerce must do more than erect roadblocks
to respondents’ fair arguments” and “must select the best available information and
substantially support its decisions.” 35 CIT at 248.
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For the foregoing reasons, the court remands Commerce’s selection of Thai data
inclusive of French imports to determine the surrogate value for carbonized material. 9
CONCLUSION AND O RDER
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Remand Results, are remanded; it is further
ORDERED that, on remand, Commerce shall, consistent with this Opinion,
reconsider its surrogate value for carbonized material; it is further
ORDERED that Commerce shall file its remand redetermination on or before
March 22, 2021; it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
56.2(h); and it is further
ORDERED that any comments or responsive comments must not exceed 4,000
words.
/s/ 	Mark A. Barnett
Mark A. Barnett, Judge
Dated: December 21, 2020
New York, New York
9 The court need not reach the Parties’ arguments concerning whether Commerce has
a practice of not disaggregating surrogate data and whether such a practice was
warranted in this case, see CAG’s Opp’n Cmts. at 4–8; Gov’t’s Reply at 11–14, because
substantial evidence does not support Commerce’s inclusion of the French imports—in
whole or in part.
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