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Qingdao Sea-Line Trading Co. v. United States

United States Court of Appeals, Federal Circuit

September 10, 2014

QINGDAO SEA-LINE TRADING CO., LTD., Plaintiff-Appellant,
v.
UNITED STATES, Defendant-Appellee, and FRESH GARLIC PRODUCERS ASSOCIATION, CHRISTOPHER RANCH L.L.C., THE GARLIC COMPANY, VALLEY GARLIC, AND VESSEY AND COMPANY, INC., Defendants-Appellees

Page 1379

[Copyrighted Material Omitted]

Page 1380

Appeal from the United States Court of International Trade in No. 10-CV-0304, Judge Richard K. Eaton.

ROBERT T. HUME, Hume & Associates LLC, of Ojai, California, argued for plaintiff-appellant.

RICHARD P. SCHROEDER, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant appellee. With him on the brief were STUART F. DELERY, Assistant Attorney General, JEANNE E. DAVIDSON, Director, and REGINALD T. BLADES, JR., Assistant Director. Of counsel on the brief was WHITNEY M. ROLIG, Attorney, United States Department of Commerce, Office of the Chief Counsel for Import Administration, of Washington, DC.

MICHAEL J. COURSEY, Kelley Drye & Warren LLP, of Washington, DC, argued for defendants-appellees. With him on the brief was JOHN M. HERRMANN.

Before NEWMAN, REYNA, and CHEN, Circuit Judges.

OPINION

Page 1381

Reyna, Circuit Judge.

Qingdao Sea-line Trading Company (" Sea-line" ) appeals a decision of the Court of International Trade affirming the Department of Commerce's final remand results in a new shipper review and assignment of an antidumping duty on Sea-line's imports of fresh whole garlic bulbs from the People's Republic of China. For the reasons set forth below, we affirm.

I

A. New Shipper Review

Sea-line challenges the Department of Commerce's (" Commerce" ) calculation of its antidumping duty, which it contends is not supported by substantial evidence. Commerce calculated the antidumping duty as part of a new shipper review initiated at Sea-line's request on an outstanding 1994 antidumping order on fresh garlic imports from China.[1] A new shipper review covers imports by an importer or producer that was not subject to the initial antidumping duty investigation and believes it is entitled to an individual antidumping duty margin. 19 U.S.C. § 1675(a)(2)(B). New shipper reviews cover imports made during a period subsequent to the period of review for the initial investigation.

Commerce conducted Sea-line's new shipper review for the period of November 1, 2008 through April 30, 2009. Because China is a non-market economy, Commerce calculated the factors of production of Sea-line's fresh whole garlic using surrogate values from a comparable market economy. 19 U.S.C. § 1677b(c)(1). Commerce chose India as the primary comparable market economy for this review and sought to identify a surrogate value for the " fresh garlic bulb" intermediate input instead of calculating values for the individual factors of production used to produce that input. Commerce relied on price data from the Azadpur Agricultural Produce Marketing Committee's Market Information Bulletin (" APMC Bulletin" ), which reports daily prices in India for garlic bulbs of various " grades." Garlic bulbs are divided into four grades based on size: grade Super A (greater than 55 mm); grade A (40-55 mm); grade B (30-40 mm); and grade C (less than 30 mm).

Sea-line reported a bulb size of over 55 millimeters for the garlic imported into the United States during the period of review, placing its garlic bulbs in the grade Super A category. The APMC Bulletin, however, did not report any prices for grade Super A bulbs for the period of review. Commerce thus averaged the closest available data points for grade Super A garlic in the APMC Bulletin, which was for November 2007 through April 2008. To make this value contemporaneous with the period of review and account for inflation, Commerce applied the Wholesale Price Index (" WPI" ) for India published by the International Monetary Fund (" IMF" ). Applying the IMF index resulted in a slight increase in the price for grade Super A garlic, even though the prices listed in the APMC Bulletin for the other garlic grades dropped just before the period of review.

In addition to calculating surrogate values for Sealine's fresh garlic, Commerce

Page 1382

also calculated a " surrogate financial ratio" to account for general expenses, factory overhead, and profit. See 19 U.S.C. § 1677b(c)(1). This ratio is determined using financial statements and other non-proprietary information from producers of identical or comparable merchandise in the surrogate country. 19 C.F.R. § 351.408(c)(4). If financial statements are available from multiple producers, Commerce averages the financial ratios derived from all the financial statements.[2]

Commerce calculated a surrogate financial ratio for Sea-line by averaging financial statements from two Indian tea producers, Limtex Tea Limited (" Limtex" ) and Tata Tea Limited (" Tata Tea" ). Commerce noted that " tea, rice, and vegetable processing is similar to garlic because each is not highly processed or preserved prior to sale." J.A. 137. Commerce thus decided to use financial data from Limtex and Tata Tea because tea is comparable to whole and peeled garlic, and each company's ...


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