Soc Trang Seafood Joint Stock Co. v. United States , 365 F. Supp. 3d 1287 ( 2019 )

Slip Op. 19-23
UNITED STATES COURT OF INTERNATIONAL TRADE
SOC TRANG SEAFOOD JOINT STOCK
COMPANY ET AL.,
Plaintiffs and Consolidated Plaintiff,
and
CA MAU SEAFOOD JOINT STOCK COMPANY,
Plaintiff-Intervenor,
Before: Claire R. Kelly, Judge
v.
Consol. Court No. 16-00205
UNITED STATES,
Defendant,
and
AD HOC SHRIMP TRADE ACTION COMMITTEE,
Defendant-Intervenor and Consolidated
Defendant-Intervenor.
OPINION AND ORDER
[Sustaining the U.S. Department of Commerce’s remand redetermination in the tenth
administrative review of certain frozen warmwater shrimp from the Socialist Republic of
Vietnam.]
Dated: February 19, 2019
Matthew Robert Nicely, Daniel Martin Witkowski, and Julia K. Eppard, Hughes Hubbard
& Reed LLP, of Washington, DC, for plaintiffs, Soc Trang Seafood Joint Stock Company
a/k/a Stapimex; Trong Nhan Seafood Company Limited; Sao Ta Foods Joint Stock
Company a/k/a Fimex VN a/k/a Saota Seafood Factory; Nha Trang Seafoods Group: Nha
Trang Seaproduct Company a/k/a NT Seafoods Corporation a/k/a Nha Trang Seafoods -
F.89 Joint Stock Company a/k/a NTSF Seafoods Joint Stock Company; Viet Foods Co.,
Ltd.; UTXI Aquatic Products Processing Corporation a/k/a Hoang Phuong Seafood
Factory a/k/a Hoang Phong Seafood Factory; Camau Frozen Seafood Processing Import
Export Corporation a/k/a Camau Seafood Factory No. 4; Ngoc Tri Seafood Joint Stock
Consol. Court No. 16-00205 Page 2
Company; Investment Commerce Fisheries Corporation; Quang Minh Seafood Co., Ltd.;
Phuong Nam Foodstuff Corp.; Minh Cuong Seafood Import Export Frozen Processing
Joint Stock Company; Minh Hai Joint-Stock Seafoods Processing Company; Cadovimex
Seafood Import-Export and Processing Joint Stock Company; Can Tho Import Export
Fishery Limited Company; Danang Seaproducts Import Export Corporation a/k/a Danang
Seaproducts Import-Export Corporation a/k/a Seaprodex Danang a/k/a Tho Quang Co.
a/k/a Tho Quang Seafood Processing and Export Company a/k/a Frozen Seafoods
Factory No. 32; Vietnam Clean Seafood Corporation; Viet I-Mei Frozen Foods Co., Ltd.;
Kim Anh Company Limited a/k/a Kim Anh Co., Ltd.; Viet Hai Seafood Co., Ltd. a/k/a
Vietnam Fish One Co., Ltd.; Thuan Phuoc Seafoods and Trading Corporation; Bac Lieu
Fisheries Joint Stock Company; Nha Trang Fisheries Joint Stock Company; Thong Thuan
Company Limited a/k/a T&T Co., Ltd.; Cuulong Seaproducts Company; Camau Seafood
Processing and Service Joint Stock Company; Quoc Viet Seaproducts Processing
Trading and Import-Export Co., Ltd.; C.P. Vietnam Corporation; and Minh Hai Export
Frozen Seafood Processing Joint-Stock Company, and for plaintiff-intervenor, Ca Mau
Seafood Joint Stock Company a/k/a Seaprimexco Vietnam.
Robert George Gosselink, Jonathan Michael Freed, and Jarrod Mark Goldfeder, Trade
Pacific, PLLC, of Washington, DC, for consolidated plaintiff, Mazzetta Company LLC.
Kara Marie Westercamp, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for defendant. With her on the brief were
Patricia M. McCarthy, Assistant Director, Jeanne E. Davidson, Director, and Joseph H.
Hunt, Assistant Attorney General. Of Counsel on the brief was James Henry Ahrens, II,
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, DC.
Nathaniel Jude Maandig Rickard and Sophia J.C. Lin, Picard, Kentz & Rowe, LLP, of
Washington, DC, for defendant-intervenor and consolidated defendant-intervenor, Ad
Hoc Shrimp Trade Action Committee.
Kelly, Judge: Before the court is the U.S. Department of Commerce’s
(“Department” or “Commerce”) remand redetermination filed pursuant to the court’s order
in Soc Trang Seafood Joint Stock Co. v. United States, 42 CIT __, __, 321 F. Supp. 3d
1329, 1353–54 (2018) (“Soc Trang”). See Final Results of Redetermination Pursuant to
Ct. Remand in [Soc Trang], Sept. 19, 2018, ECF No. 74-1 (“Remand Results”).
In Soc Trang, the court addressed challenges to Commerce’s final determination
in the tenth administrative review of the antidumping duty (“ADD”) order covering certain
Consol. Court No. 16-00205 Page 3
frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”). See Soc
Trang, 42 CIT at __, 321 F. Supp. 3d at 1335–53; see also Certain Frozen Warmwater
Shrimp From [Vietnam], 81 Fed. Reg. 62,717 (Dep’t Commerce Sept. 12, 2016) (final
results of [ADD] admin. review, 2014–2015) (“Final Results”) and accompanying Certain
Frozen Warmwater Shrimp from [Vietnam]: Issues & Decision Mem. for the Final Results,
A-552-802, (Sept. 6, 2016), ECF No. 19-2 (“Final Decision Memo”); see also Certain
Frozen Warmwater Shrimp From [Vietnam], 70 Fed. Reg. 5,152 (Dep’t Commerce Feb.
1, 2005) (notice of am. final determination of sales at less than fair value & [ADD] order).
The court remanded to Commerce for further explanation or reconsideration: (i) its
decision to value frozen shrimp using Bangladeshi UN Comtrade data for Harmonized
Tariff Schedule (“HTS”) 0306.13, see Soc Trang, 42 CIT at __, 321 F. Supp. 3d at 1350–
51, 1353–54, and (ii) its decision to deny an offset for excess/scrap packaging. See id.
at __, 321 F. Supp. 3d at 1352–54. For the following reasons, Commerce complied with
the court’s remand order in Soc Trang and its remand redetermination is in accordance
with law and is supported by substantial evidence.
BACKGROUND
The court assumes familiarity with the facts of this case as discussed in the prior
opinion, see Soc Trang, 42 CIT at __, 321 F. Supp. 3d at 1334–35, and here restates the
facts relevant to the court’s review of the Remand Results. At the time of Commerce’s
final determination in the tenth administrative review, Soc Trang Seafood Joint Stock
Consol. Court No. 16-00205 Page 4
Company (“Stapimex”) was the sole mandatory respondent under review. 1 See Final
Decision Memo at 2–3; see also [ADD] Admin. Review of Certain Frozen Warmwater
Shrimp from [Vietnam]: Selection of Respondents for Individual Examination at 9, PD 71,
bar code 3273103-01 (Apr. 29, 2015). 2 Pertinent here, in the final determination,
Commerce valued the frozen shrimp input using Bangladeshi UN Comtrade data for HTS
0306.13, covering “Shrimps & prawns, whether/not in shell, frozen.” See Final Decision
Memo at 46–48. Commerce explained its selection by stating that when the record only
contains data sources from basket HTS categories, as happened here, it prefers to use
data from the primary surrogate country, which is Bangladesh for the purposes of this
review. See id. at 47. Commerce also declined to grant a byproduct offset for packaging
materials that respondent re-sold as scrap; the materials at issue were either directly
purchased by respondent, but not used to pack the finished subject merchandise, or were
acquired by respondent from purchases of raw shrimp. See id. at 67–68. Commerce
explained that it denied the offset because its practice is to grant offsets to byproducts
generated in relation to, or as a result of, the production of subject merchandise and that
the packaging materials at issue here were not so generated. See id.
1
Commerce rescinded its review of the second mandatory respondent. See Certain Frozen
Warmwater Shrimp From [Vietnam], 81 Fed. Reg. 47,758 (Dep’t Commerce July 22, 2016) (partial
rescission of [ADD] admin. reviews (2014–2015; 2015–2016).
2
On December 6, 2016, Defendant submitted indices to the public and confidential administrative
records underlying Commerce’s final determination. These indices are located on the docket at
ECF No. 19-3–4. With the court’s leave, Defendant filed corrected indices to the remand
redetermination; they are docketed at ECF No. 79 and 79-1. Citations to administrative record
documents in this opinion will be to the numbers assigned to the documents by Commerce in
these indices, with documents to the remand redetermination also including an “RR” marker.
Consol. Court No. 16-00205 Page 5
In Soc Trang, the court sustained in part and remanded in part the Final Results.3
See Soc Trang, 42 CIT at __, 321 F. Supp. 3d at 1353–54. The court remanded for
further explanation or reconsideration Commerce’s valuation of the frozen shrimp input
and decision to deny an offset for packaging material. See id. at __, 321 F. Supp. 3d at
1350–51, 1352–54. The court stated that Commerce did not address record evidence
indicating that the alternative data source, i.e., Indian Global Trade Atlas (“GTA”) import
data for HTS 0306.17, was more specific than the selected Bangladeshi data or explain
why, in light of such evidence and the fact that only the Indian GTA data was
contemporaneous to the relevant period of review, its determination was reasonable. See
id. at __, 321 F. Supp. 3d at 1350–51. The court also stated that Commerce did not
explain why its practice of rejecting packaging material as a byproduct is reasonable. See
id. at __, 321 F. Supp. 3d at 1352–53.
Commerce filed the Remand Results on September 19, 2018. On remand,
Commerce reconsidered its valuation of the frozen shrimp input using Bangladeshi UN
Comtrade data for HTS 0306.13 and determined that the Indian GTA import data for HTS
0306.17 constituted the best available information because it is more specific to the input
and more contemporaneous with the period of review. See Remand Results at 8–9, 15–
20. Commerce also further explained its practice for determining what constitutes a
3
Specifically, the court sustained Commerce’s application of its differential pricing analysis, see
Soc Trang, 42 CIT at __, 321 F. Supp. 3d at 1335–41, and surrogate value selections for head
and shell byproduct and ice. See id. at __, 321 F. Supp. 3d at 1349–50, 1351–52. The court also
sustained Commerce’s decision to rescind the review of a mandatory respondent and its
calculation of the all-others rate. See id. at __, 321 F. Supp. 3d at 1344–48. Finally, the court
determined that Commerce fulfilled its statutory duty to maintain a complete and accurate
administrative record. See id. at __, 321 F. Supp. 3d at 1341–44.
Consol. Court No. 16-00205 Page 6
byproduct and explained why, in light of this practice, respondent’s packaging scrap is
not a byproduct. See id. at 9–13, 22–24. Plaintiffs Soc Trang Seafood Joint Stock
Company a/k/a Stapimex et al. and Plaintiff-Intervenor, Ca Mau Seafood Joint Stock
Company a/k/a Seaprimexco Vietnam (collectively “Respondents”) filed comments
challenging Commerce’s continued denial of a byproduct offset for packaging scrap. See
Pls. & Pl.-Intervenor’s Comments Final Results of Redetermination Pursuant Ct. Remand
at 1–4, Oct. 19, 2018, ECF No. 80 (“Respondents’ Remand Comments”). Defendant-
Intervenor, Ad Hoc Shrimp Trade Action Committee filed comments challenging the
agency’s changed position regarding valuation of frozen shrimp. See Def.-Intervenor Ad
Hoc Shrimp Trade Action Comm.’s Comments Final Results of Redetermination Ct.
Remand at 10–27, Oct. 19, 2018, ECF No. 81 (“Def.-Intervenor’s Remand Comments”).
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) (2012) and 28 U.S.C. § 1581(c) (2012).
Commerce’s antidumping determinations must be in accordance with law and supported
by substantial evidence. 19 U.S.C. § 1516a(b)(1)(B)(i) (2012). “The results of a
redetermination pursuant to court remand are also reviewed ‘for compliance with the
court’s remand order.’” Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT __,
__, 968 F. Supp. 2d 1255, 1259 (2014) (quoting Nakornthai Strip Mill Public Co. v. United
States, 32 CIT 1272, 1274, 587 F. Supp. 2d 1303, 1306 (2008)).
Consol. Court No. 16-00205 Page 7
DISCUSSION
I. Frozen Shrimp
On remand, Commerce valued the frozen shrimp input using Indian GTA import
data for HTS 0306.17, covering “Shrimps And Prawns, Frozen, Other Than Cold-Water.”
See Remand Results at 8–9. Specifically, the agency explained that the Bangladeshi
import data did not constitute the best available information because it was not
contemporaneous and not as specific to the frozen warmwater shrimp utilized by
respondents. Id. Defendant-Intervenor challenges the agency’s redetermination. See
Def.-Intervenor’s Remand Comments at 10–27. For the following reasons, Commerce’s
valuation of the frozen shrimp input is sustained.
In antidumping proceedings involving non-market economies, 4 Commerce
generally calculates normal value using the factors of production used to produce the
subject merchandise and other costs and expenses. 19 U.S.C. § 1677b(c)(1).
Commerce will value respondents’ 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 [Commerce].” 19 U.S.C. § 1677b(c)(1)(B). To the extent
possible, Commerce uses factors of production from market economy countries that are:
“(A) at a level of economic development comparable to that of the nonmarket economy
country, and (B) significant producers of comparable merchandise.” 19 U.S.C. §
4The term “nonmarket economy country” refers to a foreign country that Commerce determines
“does not operate on market principles of cost or pricing structures, so that sales of merchandise
in such country do not reflect the fair value of the merchandise.” 19 U.S.C. § 1677(18)(A). In
such cases, Commerce must “determine the normal value of the subject merchandise on the
basis of the value of the factors of production utilized in producing the merchandise . . . [together
with other costs and expenses].” 19 U.S.C. § 1677b(c)(1)(B).
Consol. Court No. 16-00205 Page 8
1677b(c)(4). Commerce’s regulatory preference is to “value all factors in a single
surrogate country.” 19 C.F.R. § 351.408(c)(2) (2015).
Commerce’s methodology for selecting the best available information evaluates
data sources based upon their: (1) specificity to the input; (2) tax and import duty
exclusivity; (3) contemporaneity with the period of review; (4) representativeness of a
broad market average; and (5) public availability. See Import Admin., U.S. Dep’t
Commerce, Non-Market Economy Surrogate Country Selection Process, Policy Bulletin
04.1 (Mar. 1, 2004), available at http://ia.ita.doc.gov/policy/bull04-1.html (last visited Feb.
13, 2019); Final Decision Memo at 46–47. Commerce uses the same methodology to
calculate the surrogate value of byproducts generated during the production process, and
offsets a respondent’s production costs by the value of those byproducts. See Final
Decision Memo at 57–58; see also Tianjin Magnesium Int’l Co. v. United States, 34 CIT
980, 993, 722 F. Supp. 2d 1322, 1336 (2010); Guangdong Chems. Imp. & Exp. Corp. v.
United States, 30 CIT 1412, 1422–23, 460 F. Supp. 2d 1365, 1373–74 (2006).
Commerce’s decision, on remand, to value the frozen shrimp input using Indian
GTA import data is reasonable. The agency explains that the Indian GTA data is more
specific to the input utilized by respondents because it is limited in scope to warmwater
shrimp and is more contemporaneous with the relevant period of review because it is from
2015. See Remand Results at 8–9. By contrast, Commerce explains that the
Bangladeshi data, reported for 2011, is not contemporaneous and is not as specific
because it includes shrimp from coldwater regions. See id. Commerce states that
petitioner’s inference that the Indian GTA import data for HTS 0306.17 includes data from
Consol. Court No. 16-00205 Page 9
a coldwater region is not supported by record evidence and is speculative. Id. at 16–17.
There is no record evidence to suggest that the category is not specific. Id. Commerce
also addresses petitioner’s claim that the Indian GTA import data is “skewed” or captures
unlike products given the large variations in the average unit values reported for the
countries in that dataset; Commerce explains that petitioner’s claim is speculative
because the price variances could be explained by differences in physical characteristics
of the shrimp and for which subheading 0306.17 does not account. Id. at 17–18. Further,
Commerce rejected petitioner’s claim that the Indian GTA data was not a broad market
average because it contained data points from only three countries. Id. at 19–20.
Commerce did not find the amount of imports insignificant and noted that one would
expect the Indian dataset to contain a lesser quantity than the Bangladeshi dataset as the
latter contained both warmwater and coldwater shrimp. Remand Results at 20.
Commerce also concluded that having imports from only three countries did not preclude
a finding that the dataset is a broad market average. 5 Id. at 19–20. Defendant-Intervenor
restates these same challenges before the court.6 See Def.-Intervenor’s Remand
5
Defendant-Intervenor also argues that the Indian GTA data only reflects data collected from
three shipments, which it contends further undermines the conclusion that the dataset represents
a broad market average. See Def.-Intervenor’s Remand Comments at 24–25. Commerce
explains that petitioner’s assumption is not supported by record evidence because although the
Indian GTA data is reported over the course of three months and includes imports from three
countries, nothing on the record indicates that the data points represent three shipments. See
Remand Results at 20
6
Defendant-Intervenor argues that it was arbitrary and capricious for Commerce to conclude that
the Bangladeshi data was less specific because it contained imports form coldwater regions,
when both the Indian and Bangladeshi datasets contain imports from the United Kingdom, a
purportedly coldwater region. See Def.-Intervenor’s Remand Comments at 10–15. Further, the
(footnote continued)
Consol. Court No. 16-00205 Page 10
Comments at 10–25. Commerce addressed each of these challenges and Defendant-
Intervenor did not demonstrate that Commerce either failed to respond to its challenges
or that Commerce’s determination was unreasonable on this record. The court will not
reweigh the evidence. Accordingly, Commerce’s selection of the Indian GTA import data
for HTS 0306.17 to value the frozen shrimp input is reasonable and supported by
substantial evidence.
II. Commerce’s Denial of an Offset for Packaging Scrap
On remand, Commerce continued to deny an offset for packaging scrap and
further explained its practice for evaluating byproduct offset claims. See Remand Results
at 10–13. Respondents contend that the agency did not adhere to the court’s remand
order to further explain the reasonableness of its practice and merely reasserted its
position from the final determination, and that the remand redetermination is not
supported by substantial evidence. See Respondents’ Remand Comments at 1–4. For
the following reasons, Commerce sufficiently explained its practice and its decision to
deny an offset is sustained.
Pursuant to the relevant statute, in a non-market economy Commerce will
calculate the normal value of a given product by valuing “the factors of production utilized
in producing the good[.]” 19 U.S.C. § 1677b(c)(1)(A)–(B). The statute, however, does
not direct how Commerce is to determine which products qualify for the byproduct offset
Defendant-Intervenor argues that Commerce failed to address record evidence that detracts from
its determination that the Indian GTA data constitutes the best available information. See id. at
15–27. Defendant-Intervenor emphasizes that the volume of imports and number of shipments
reflected in the Indian GTA import data do not reflect a broad market average and that the data
includes dissimilar products and shipments from a purportedly coldwater region. See id. at 21–
27.
Consol. Court No. 16-00205 Page 11
and no regulation exists to fill the gap. In such a situation, Commerce has the discretion
to set the standards by which items qualify for a byproduct offset, so long as Commerce’s
selection satisfies the overall purpose of the ADD statute, to calculate accurate dumping
margins and is reasonable. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185,
1191 (Fed. Cir. 1990); see also QVD Food Co. v. United States, 658 F.3d 1318, 1323
(Fed. Cir. 2011).
The agency explains that because the statute is silent on how byproducts should
be treated when calculating normal value, it adopted a practice pursuant to which only
the sales income of materials consumed during the production process will qualify for a
byproduct offset. See Remand Results at 9–10; Final Decision Memo at 67–68. On
remand, the agency provides further explanation of its practice. See Remand Results at
10–13, 22–24. Specifically, it explains that, consistent with generally acceptable
accounting practices, revenue generated from activities unrelated to production is
recorded as miscellaneous income that generally offsets selling, general and
administrative costs, as opposed to costs of goods sold. See id. at 10–11. Indeed,
Commerce notes that Stapimex records packaging sales revenue in a trade receivables
account associated with miscellaneous income and not in the main sales revenue account
for shrimp sales/production activity. See id. at 11–12. Accordingly, although Commerce
agrees that revenue from sales of scrap should be offset, id. at 10, Commerce determined
it would be improper for that revenue to offset the cost of manufacturing. 7 See id. at 11–
7
Respondents argue that Commerce misread record evidence to determine that the packaging
(footnote continued)
Consol. Court No. 16-00205 Page 12
12. Rather, Commerce presumes that the proper offsets are captured in the surrogate
financial statements. Id. Respondents do not point to any record evidence detracting
from the reasonableness of Commerce’s presumption. On remand, Commerce complied
with the court’s order in Soc Trang and its explanation is in accordance with law and
supported by substantial evidence.
CONCLUSION
For the foregoing reasons, the Remand Results comply with the court’s order in
Soc Trang, are in accordance with law and supported by substantial evidence, and are
sustained. Judgment will enter accordingly.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated:February 19, 2019
New York, New York
scrap is not generated during the production process and that the determination is therefore
unsupported by record evidence. See Respondents’ Remand Comments at 3–4. Commerce
identifies record evidence showing that: (1) income from scrap sales is not recorded in the main
business revenue account, i.e., the account used to reconcile sales, see Remand Results at 23
(citing Bus. Proprietary Mem. Accompanying [Remand Results], RR CD 10, bar code 3755076-
01 (Sept. 19, 2018); Exs. D16A–B [attached to Respondents’ Sec. D. Questionnaire Resp.], CD
513–15, bar codes 3288686-18–20 (July 6, 2015)), and (2) the general ledger for one of the cost
accounts reproduced in these exhibits specifically records sales of packaging scrap in a cash
receivables account, which Commerce explains signals “that packing scrap is not considered part
of the main business income (i.e., the income earned from selling shrimp).” Id. As Commerce
explains, when determining whether to grant a byproduct offset it matters where a company
records the sales of the claimed byproduct, not where the costs for purchasing that claimed
byproduct are booked. Id. Commerce’s explanation is reasonable.