Zhaoqing New Zhongya Aluminum Co. v. United States

Slip Op.14- 19

UNITED STATES COURT OF INTERNATIONAL TRADE

ZHAOQING NEW ZHONGYA ALUMINUM
CO., LTD. AND ZHONGYA SHAPED
ALUMINUM (HK) HOLDING LTD.,
Before: Donald C. Pogue,
Plaintiffs, Chief Judge

and Court No. 11-00181

EVERGREEN SOLAR, INC.,
Plaintiff-Intervenor,

v.

UNITED STATES,

Defendant,

and

ALUMINUM EXTRUSIONS FAIR TRADE
COMMITTEE,
Defendant-Intervenor.

[Department of Commerce’s Remand Results are AFFIRMED]

Dated: February 19, 2014

Tara K. Hogan, Trial Attorney, Commercial Litigation Branch,
Civil Division, U.S. Department of Justice, of Washington, DC,
for Defendant. With her on the briefs were Stuart F. Delery,
Acting Assistant Attorney General, Jeanne E. Davidson, Director,
and Reginald T. Blades, Jr., Assistant Director. Of counsel on
the briefs was Joanna Theiss, Attorney, Office of the Chief
Counsel for the Import Trade Administration, U.S. Department of
Commerce, of Washington, DC.
Court No. 11-00181 Page 2

Alan H. Price, Derick G. Holt, Laura El-Sabaawi, Maureen E.
Thorson, Robert E. DeFrancesco, Wiley Rein LLP, of Washington,
DC, for Defendant-Intervenor, Aluminum Extrusions Fair Trade
Committee.

OPINION

Pogue, Chief Judge: This case returns to court following a

remand ordered by Zhaoqing New Zhongya Aluminum Co. v. United

States, __ CIT ___,929 F. Supp. 2d 1324 (2013)(“Zhaoqing

Remand”). The Zhaoqing Remand required the Department of

Commerce (“Commerce” or “the Department”) to review the proper

benchmark for measuring the value of the subsidy provided to New

Zhongya Aluminum Company, Ltd. and its affiliates (collectively

“New Zhongya”) in the form of land use rights in the Zhaoqing

High-Technology Industry Development Zone (“ZHTIDZ”) in China.

The Department responded to the Zhaoqing Remand by issuing Final

Results of Redetermination Pursuant to Court Remand, ECF No. 75

(Aug. 21, 2013) (“Remand Results”).

In the Remand Results, Commerce revised its initial

determination to use the price of developed industrial land in

Thailand as a benchmark for valuing New Zhongya’s subsidy and

accepted instead the indicative price of land in the Subic Bay

Freeport Zone in the Philippines (“Subic Bay”) as reported by

the private firm Coldwell Banker Richard Ellis. Remand Results

at 7.
Court No. 11-00181 Page 3

Defendant-Intervenor, the Aluminum Extrusions Fair Trade

Committee (“AEFTC”) now raises two challenges to the

determination in the Remand Results.1 AEFTC first claims that

the use of property in the Philippines as a benchmark for the

subsidy received by New Zhongya is contrary to the Department’s

practice and precedent. AEFTC’s second claim is that there is

insufficient record evidence on the Philippines to support the

use of Subic Bay as a benchmark, and that Commerce must

therefore reopen the administrative record in order to

reasonably support its selection.

As explained below, the selection of lower infrastructure

properties in Subic Bay as a land value benchmark is a

reasonable response to the Zhaoqing Remand. While the

Department selected Subic Bay without reference to the full

range of evidence used in some prior comparable cases, its

decision is neither inconsistent with the Department’s precedent

and practice nor unreasonable.

The second objection raised by AEFTC also fails. While

additional record evidence regarding either Subic Bay or

comparably undeveloped Thai land could produce a more accurate

estimate of the New Zhongya subsidy, the facts in this case do

1
Neither Plaintiffs Zhaoqing New Zhongya Aluminum Co. and
Zhongya Shaped Aluminum Holding, nor Plaintiff-Intervenor
Evergreen Solar have challenged the Remand Results.
Court No. 11-00181 Page 4

not show that Department’s refusal to accept such evidence was

an abuse of discretion.

The court continues to hold jurisdiction over this matter

pursuant to 28 U.S.C. § 1581(c).

BACKGROUND

As part of its investigation of certain aluminum extrusions

from the People’s Republic of China (“China” or the “PRC”), the

Department concluded, inter alia, that countervailing duties

were appropriate to offset the subsidy given to New Zhongya in

the form of reduced costs for land use rights in the ZHTIDZ.

See Aluminum Extrusions from the People’s Republic of China, 76

Fed. Reg. 18,521 (Dep’t Commerce Apr. 4, 2011) (affirmative

countervailing duty determination) and accompanying Issues &

Decision Mem., C-570-968 (Mar. 28, 2011) (“I&D Memo”) at cmt.

23. Based on the impossibility of finding an adequate domestic

or international market price with which to compare ZHTIDZ land

use rights, Commerce determined that it was appropriate to

employ a “third tier” method and calculate the subsidy value by

comparing the price that New Zhongya paid for its land use

rights with market-based prices for comparable land in a country

at a similar level of economic development and in reasonable
Court No. 11-00181 Page 5

proximity to the PRC.2 Remand Results at 2. For this comparison,

the Department selected “indicative land values” from a fully

developed industrial park in Bangkok, Thailand, as a benchmark.

I&D Memo at cmt. 24. These indicative values were taken from a

Coldwell Banker Richard Ellis (CBRE) Industrial Property Guide,

part of a series of industry reports produced by a commercial

real estate services firm operating across Asia.3 Id.

New Zhongya challenged the use of the Thai benchmark during

the administrative review and on appeal to this court. New

Zhongya argued that the benchmark Thai industrial land was not

comparable to the sites made available in the ZHTIDZ as required

by 19 U.S.C. § 1677 and 19 C.F.R. § 351.511(a). Pl. Mot. for

Judgment on the Agency Record ECF No. 44 ("Pl's Mot.") at 4.

2
Commerce had earlier determined that the provision of land use
rights of this type constitutes a countervailable subsidy and
developed its justification for using a third country comparison
to estimate the size of the subsidy in accordance with § 771(5)
of The Tariff Act of 1930, 19 U.S.C. § 1677(5) (all further
references to the Tariff Act of 1930, as amended, are to the
relevant portions of Title 19 of the U.S. Code, 2006 edition)
and 19 C.F.R. § 351.511. See Laminated Woven Sacks From the
People's Republic of China, 72 Fed. Reg. 67,893 (Dec. 3, 2007)
(Preliminary Affirmative Determination) (“LWS from the PRC”) at
67,905, affirmed in Laminated Woven Sacks From the People's
Republic of China, 73 Fed. Reg. 35,639 (Jun. 24, 2008) (Final
Affirmative Determination) at cmt. 11.
3
A description of CBRE and the range of commercial real estate
services they provide to investors throughout Asia appears at
CBRE Industrial MarketView 2Q 2007, ECF No. 82-2 at 69.
Commerce has relied upon CBRE reports for land value questions
in previous cases. LWS from the PRC at 67,908-09.
Court No. 11-00181 Page 6

New Zhongya claimed that several differences precluded any valid

comparison between these sites. The most significant of these

differences was the highly developed state of physical

infrastructure available at the Bangkok site compared to the

ZHTIDZ. Id. at 5. To correct this alleged error in the

Department’s analysis, New Zhongya advocated either the use of

indicative industrial land prices from the Subic Bay Freeport

development site in the Philippines or a downward adjustment to

the indicative prices for the Thai sites. Confidential Response

in opposition to motion for judgment on the agency record ECF

No. 55 at 8. The dispute over this determination centered on

the evidence used by the Department to evaluate the

infrastructure available at the ZHTIDZ site when taken over by

New Zhongya.

The Zhaoqing Remand ordered reconsideration or further

explanation of the Department’s rationale for using the

indicative values given in the CBRE Reports for Thai industrial

land. See Zhaoqing Remand, 929 F. Supp. 2d at 1327-29. The

record evidence did not adequately support the Department’s use

of industrial real estate in Thailand that was already equipped

with extensive physical and logistical infrastructure as a

benchmark for comparison with land in the ZHTIDZ that required

extensive improvement by New Zhongya before productive use.
Court No. 11-00181 Page 7

Specifically, the court ruled that the Department’s

determination was unreasonable in its reliance on two pieces of

relatively ambiguous evidence – a promotional web site and a

series of photographs the provenance of which could not be

established – when this evidence was contradicted by substantial

other material on the record.4 Id. at 1328-29.

In its Remand Results, the Department declined to further

analyze or adjust the Thai benchmark, and instead elected to use

indicative values for land in Subic Bay as a more appropriate

benchmark for the value of New Zhongya’s land use subsidy.

Remand Results at 11. In doing so, the Department selected

indicative values from the CBRE Report for Subic Bay sites that

offered no specific information on levels of infrastructure.5

4
The ruling highlighted the unreasonable reliance on the claims
of a promotional web site, and a series of photographs that
could not be precisely dated, to indicate a high level of
infrastructure development for ZHTIDZ land when considered in
light of the extensive record submissions demonstrating a lower
level of infrastructure in place when New Zhongya began its
lease of the property in 2006. Zhaoqing Remand, 929 F. Supp. 2d.
at 1327-28 (citing Pl’s Mot. at 5 and Zhongya Supplemental
Questionnaire Resp. at 297).
5
This decision was based on the fact that the CBRE reports
listed two types of industrial land. One of these types was
labeled “infrastructure in place,” while the other had no
information on level of industrial amenities or development at
all. Remand Results at 6. The Department inferred that the
lack of a label could be taken as evidence that these sites had
a lower level of infrastructure and were therefore more
comparable to the ZHTIDZ land acquired by New Zhongya. Id.
Court No. 11-00181 Page 8

The subsidy and the appropriate countervailing duty were then

recalculated using this benchmark.

Responding to comments from the parties, the Department

determined that its decision to use the Philippines rather than

Thailand as an appropriate benchmark country for comparison with

China was case-specific and that Thailand would continue to be

used as the default national comparison for the reasons

explained in LWS from the PRC. Id. at 9. In addition, the

Department rejected the Defendant-Intervenor’s requests that it

reopen the administrative record and gather either additional

information on sites in Thailand or macroeconomic and

demographic data that would support the use of the Philippines

with data comparable to that gathered before selecting Thailand

as the default comparison country in LWS from the PRC. Id. at 7,

9.

AEFTC now challenges the Department’s determination on

remand, claiming first that LWS from the PRC established a

procedure for selecting an appropriate third country for

comparison with China in less than adequate remuneration

(“LTAR”) subsidy cases. Defendant-Intervenor argues that, as a

controlling practice or precedent, LWS from the PRC requires

Commerce to re-open the administrative record and develop

additional data to justify the selection of benchmark land
Court No. 11-00181 Page 9

values from the Philippines. Comments of the AEFTC on the

Department of Commerce’s Final Results of Redetermination, ECF

No. 77 (“AEFTC Comments”) at 5.

AEFTC’s second claim is that the inadequacy of the record

data on the Subic Bay site prevents the Department from making a

reasonably accurate estimate of the ZHTIDZ land value subsidy.

This inadequacy, AEFTC alleges, can only be dealt with by

reopening the administrative record and accepting additional

submissions that would improve the accuracy of the benchmark,

specifically information on inflation rates in the Philippines

during the period. Id. at 6-7.

STANDARD OF REVIEW

“The court will sustain the Department’s determination upon

remand if it complies with the court’s remand order, is

supported by substantial evidence on the record, and is

otherwise in accordance with law.” Jinan Yipin Corp. v. United

States, __ CIT __, 637 F. Supp. 2d 1183, 1185 (2009) (citing 19

U.S.C. § 1516a(b)(1)(B)(i)). Substantial evidence means “such

relevant evidence as a reasonable mind might accept as adequate

to support a conclusion.” Universal Camera Corp. v. N.L.R.B.,

340 U.S. 474, 477 (1951) (quoting Consol. Edison Co. v.
Court No. 11-00181 Page 10

N.L.R.B., 305 U.S. 197, 229 (1938)). Accordingly, when

reviewing agency determinations, findings, or conclusions for

substantial evidence, the court assesses whether the agency

action is reasonable given the record as a whole. Nippon Steel

Corp. v. United States, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006).

In doing so, the court must consider any fact that “fairly

detracts from [the agency conclusion’s] weight.” Universal

Camera Corp., 340 U.S. at 488. As importantly, a reviewing

court may not “displace the [agency’s] choice between two fairly

conflicting views, even though the court would justifiably have

made a different choice had the matter been before it de novo.”

Id.

DISCUSSION

I. The Selection of the Philippines as a Benchmark Country

The first of AEFTC’s claims is unpersuasive. AEFTC argues

that the use of the Philippines for comparison with the PRC is

unreasonable because the Philippines was not selected through

the same process and in consideration of the same factors that

were used in LWS from the PRC to identify Thailand as an

appropriate benchmark country. AEFTC Comments at 4.

Invoking the principle articulated in Hussey Copper, Ltd.

v. United States, 17 C.I.T. 993, 997, 834 F. Supp. 413, 418
Court No. 11-00181 Page 11

(1993), that agencies deviating from their own established

practices must offer an adequate explanation for treating

similar situations differently,6 AEFTC argues that the selection

of the Philippines benchmark for industrial land values can only

be justified by the same process of investigation and in

consideration of the same factors used to identify Thailand as a

valid comparison country in LWS from the PRC. AEFTC Comments at

4-5. In support of this claim, AEFTC points out that the

Department intends to use the Philippines as a benchmark only in

this case and that the Department retains a preference for Thai

comparisons. Id. at 4 (citing Remand Results at 7-8). The

Department’s intention, AEFTC suggests, indicates clearly that

the Department itself lacks confidence in the validity of the

Philippines as a comparable market for industrial land. Id. at

5.

6
Hussey Copper, quoting Citrosuco Paulista, S.A. v. United
States, 12 CIT 1196, 1209, 704 F. Supp. 1075, 1088 (1988),
articulated the “general rule that an agency must either conform
itself to its prior decisions or explain the reasons for its
departure.” AEFTC neglects the context of this citation, which
continues directly: “[t]his rule is not designed to restrict an
agency's consideration of the facts from one case to the next,
but rather it is to insure consistency in an agency's
administration of a statute.” Id. The court in Hussey Copper
elaborated further, emphasizing the Department’s “broad
discretion in its selection of methodology to implement the
statute” so long as this discretion is not abused or employed in
an arbitrary manner. Id. Thus Hussey Copper supports, rather
than limits, reasonable consideration of the facts in each case
to inform the Department’s reasonable methodological choices.
Court No. 11-00181 Page 12

To correct this alleged error, AEFTC argues that the

Department must either conduct a more detailed investigation of

the Philippines to justify its use as a benchmark for Chinese

industrial land values or gather more information on industrial

properties in Thailand that lack significant infrastructure and

therefore meet the requirements of the remand. Id. at 5, 6.

The Department acknowledges that the Philippines was not

chosen through a process of investigation as rigorous or

detailed as that used in LWS from the PRC and that record

evidence on the Philippines is limited. Remand Results at 7;

Def.’s Response to Comments Regarding the Remand

Redetermination, ECF No. 80 (“Def.’s Response”) at 7. The

Department argues, however, that it is not compelled to follow

the LWS from the PRC process in selecting comparable countries

for comparison. Commerce specifically notes that LWS from the

PRC reserves the Department’s prerogative to make future

determinations based on a range of factors appropriate to each

case, including the availability of data. Remand Results at 7-8;

Def.’s Response at 8.

Electing not to gather additional data, the Department

argues that the only information presently on the record that

offers price data on land not specifically known to be developed

for industrial use comes from the 2007 CBRE Report and that such
Court No. 11-00181 Page 13

data is only available for Subic Bay in the Philippines. Remand

Results at 7-8. Since the remand found the Department’s use of

prices for developed industrial land with significant existing

infrastructure to be unjustified, the Department argues that the

selection of the Philippines is reasonable. Id.

The Department is correct. While not as well grounded in

record evidence as the selection of Thailand in LWS from the

PRC, the Department’s selection of the Philippines as a

comparison country is not contrary to the Department’s practice

and precedent. In LWS from the PRC, the Department examined

several factors before reaching the conclusion that Thailand

provided the best benchmark for the subsidies provided by LTAR

land programs, including relative wealth, (represented by gross

national income per capita), population density, industrial

density, and the perceptions of foreign investors (represented

by reports from the Japan External Trade Organization as well as

the private firm CBRE). LWS from the PRC at 67,909.

While the procedures used in this determination have

continued to guide the Department in some proceedings,7 they were

7
See, e.g., Citric Acid and Certain Citrate Salts From the
People's Republic of China, 79 Fed Reg. 108 (Dep’t of Commerce
Jan. 2, 2014) (final results of administrative review, 2011) and
accompanying Issues & Decision Mem., A-570-937 (Dec. 26, 2013)
at 28, n. 168.
Court No. 11-00181 Page 14

clearly not intended to establish a general policy for all land

LTAR investigations. Rather, the choice of Thailand in LWS from

the PRC was at least in part driven by its economic similarity

to China’s Shandong Province where the firms under investigation

had received their land use subsidies. This indicated that the

selection of Thailand was not intended to set a new departmental

policy for all LTAR calculations involving any Chinese

industrial land, but was instead tailored to the facts of the

LWS from the PRC case.8 Id. To clarify this, the determination

in LWS from the PRC also emphasized both that the Department

might choose to rely upon other factors in future decisions

regarding LTAR land value comparisons and that the process of

developing a general policy to account for such land subsidies

was ongoing. Id.

Relying on such other factors is exactly what the

Department has done in this case. Specifically, in adopting

8
Shandong’s GNI per capita and population density, both
significantly above the Chinese national average, were found to
be nearer to the Thai levels and therefore to make Thailand a
better comparison. Id. The land at issue in the instant
aluminum extrusions investigation is in Guangdong Province near
Hong Kong. I&D Memo at cmt. 13. The emphasis on this regional
difference undermines the presumption that the Thai comparison
developed by the Department for LWS from the PRC should by
default be applied here, Id. at cmt. 24, and contradicts AEFTC’s
claim that the department has a general “stated policy to use
Thai benchmarks to value PRC land LTAR programs” that is here
being disregarded. AEFTC Comments at 6.
Court No. 11-00181 Page 15

Subic Bay as a benchmark in response to the Zhaoqing Remand, the

Department relied on the inclusion of the Philippines in the

CBRE Report to determine that the country is sufficiently

comparable to China for this purpose without prejudicing its

decisions in the future.9 Remand Results at 9. Though the

criticisms raised by the AEFTC are not unreasonable, nothing in

LWS from the PRC requires a different result.

II. The Department’s Refusal to Reopen the Administrative
Record to Improve the Accuracy of the LTAR Benchmark

9
In the linked antidumping investigation, the Department found
the Philippines to be comparable to China in its level of
economic development as part of a review required to establish
surrogate values for factors of production under 19 U.S.C. §
1677b(c)(4)(B). See Aluminum Extrusions from the People's
Republic of China, 76 Fed. Reg. 18,524 (Dep't Commerce Apr. 4,
2011) (final determination of sales at less than fair value) and
accompanying Issues & Decision Memorandum, A-570-967 (Apr. 4,
2011) at cmt. 1(F) (defending the use of the Philippines as one
of several surrogate countries to establish a market economy
wage rate). This finding of economic comparability has been
relied upon both in other investigations, e.g. Certain Steel
Threaded Rod from the People's Republic of China, 77 Fed. Reg.
27,022 (May 8, 2012) (preliminary results of administrative
review) at 27,025, and in the most recent administrative review
of the Aluminum Extrusions case. Aluminum Extrusions from the
People's Republic of China, 79 Fed. Reg. 96, (Dep't Commerce
Jan. 2, 2014) (final results of antidumping duty administrative
review and rescission) and accompanying Issues & Decision Mem.,
A-570-967 (Dec. 26, 2013) at cmt. 1. These findings demonstrate
that Commerce generally considers the national economy of the
Philippines to be similar to that of China, supporting the
reasonableness of Commerce's choice here to use Philippines data
as a benchmark for estimating the value of the subsidy provide
by the LTAR program.
Court No. 11-00181 Page 16

AEFTC also objects to the adequacy of information available

on the record about the Philippines as a basis for comparison

with ZHTIDZ. AEFTC Comments at 6.10 AEFTC makes both the general

argument that the lack of record data prevents the Department

from making a reasonably accurate estimate of the ZHTIDZ land

value subsidy and the specific argument that inflation data on

the Philippines must be collected in order to establish a

subsidy estimate as accurate as the Thai benchmark that would

normally be used. To accomplish this, AEFTC argues that the

Department should be required to reopen the administrative

record in order to provide the foundation for a more precise

valuation. Id. AEFTC notes that the Department may reopen the

record in response to a remand and argues that it would be

appropriate to do so in this case to advance the purpose of the

remand. Thai Plastic Bags Indus. Co. v. United States, __ CIT

___, 895 F. Supp. 2d 1337, 1346 (Ct. Int'l Trade 2013); Qingdao

Sea-Line Trading Co., Ltd. v. United States, Slip Op. 13-102

(CIT Aug. 8, 2013). The Defendant’s response, in contrast,

emphasizes that the Department has the discretion to reopen the

record and that the determination of when it is appropriate to

do so is properly left to the Department. Def.’s Response at 7,

10
In its redetermination, Commerce found that the Subic Bay sites
had a level of infrastructure lower than the Thai sites. Remand
Results at 7. No party challenges this finding.
Court No. 11-00181 Page 17

citing Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. v.

United States, 33 C.I.T. 695, 625 F. Supp. 2d 1339, 1356 n. 18

(2009).

AEFTC’s most specific argument for compelling the

Department to reopen the record is the lack of any data that

would allow the Department to apply an appropriate discount for

Philippine inflation to the CBRE Report’s indicative values for

Subic Bay properties. In setting out their case, however, AEFTC

goes beyond the issue of accurately accounting for inflation and

cites three admissions by the Department that adequate data on

investor perceptions and Philippine demography are not available

to conduct an investigation of the Philippines comparable to

that conducted of Thailand in LWS from the PRC.11 AEFTC Comments

at 6. Though not clearly stated, the argument suggests that it

is impossible to establish an accurate benchmark for the ZHTIDZ

land use subsidy without these data and that the only way to

deal with this problem is to reopen the administrative record

and gather sufficient information to conduct an investigation of

the Philippines comparable to LWS from the PRC.

11
AEFTC correctly identifies the three types of evidence used by
Commerce in LWS from the PRC that established Thailand as an
adequate benchmark in that case – macroeconomic data,
demographic information, and a study of the perceptions of
foreign investors.
Court No. 11-00181 Page 18

No party contests the Department’s finding that the Subic

Bay benchmark has a lower level of infrastructure in place than

the Thai properties originally used and is therefore more

comparable to ZHTIDZ. See supra n. 9. It follows that we must

reject AEFTC’s argument. Because the Department is not

compelled by its own procedures or the demands of substantial

evidence to conduct a study of the Philippines comparable to LWS

from the PRC, the information on investor perceptions and

Philippine demography highlighted by AEFTC is not necessary. It

would be illogical to remand based on the failure to collect

information that the Department has demonstrated it does not

need.

This leaves AEFTC’s specific objection to the Department’s

failure to correct the Philippines price data provided in the

CBRE Report for inflation. AEFTC argues that the lack of data

on inflation of the Philippine peso prevents the Department from

discounting the Subic Bay land values for the period that

separates the CBRE Report estimates of 2007 from the 2006

acquisition of the ZHTIDZ land by New Zhongya. AEFTC Comments at

7. Since the Thai land prices were so discounted in response to

criticism, AEFTC argues that failing to reopen the record in

order to discount Philippine price data is not reasonable. Id.,

citing I&D Memo at cmt. 24.
Court No. 11-00181 Page 19

The Department’s defense of its decision not to discount

for inflation rests on the relatively short time separating New

Zhongya’s acquisition of land use rights in June and October of

2006 and the second quarter of 2007 from which the indicative

values in the CBRE Report were drawn.12 Remand Results at 10;

Def’s Response at 9.

Again the Department is correct. Neither the Department’s

failure to discount Philippine prices for inflation over a

period of between eight months and one year, nor its refusal to

reopen the record to gather such information, can be considered

unreasonable.

Three factors support the conclusion that Commerce is

operating within the bounds of its discretion. First, though

the Department did discount the Thai benchmark real estate

prices for inflation in its original determination, AEFTC does

not allege that the Department has violated an established

methodology or practice by failing to do so here. I&D Memo at

cmt. 24.

Second, the Department’s decision to discount Thai property

values in the Final Determination is differentiable from the

12
The specific table in the CBRE Report from which the
indicative values for Subic Bay properties are taken labels
these as prices at the close of the second quarter of 2007. CBRE
Report at 12, ECF No. 82-2 at 66.
Court No. 11-00181 Page 20

decision not to do so for the Philippines along precisely the

lines invoked by the Department. The Thai land values used in

the Final Determination are drawn from a CBRE Report citing

prices in the first quarter of 2008 rather than the second

quarter of 2007. Id. This is entirely consistent with the

Department’s explanation that the shorter time period justifies

a different decision.

Third, if the Department had determined that discounting

for Philippine inflation were appropriate, evidence presently on

the record could provide a basis for doing so. The CBRE Report

from which the Subic Bay indicative values were drawn provides

an inflation rate of 2.4% for the Philippine peso as of May

2007.13 CBRE Report at 1, ECF No. 82-2 at 55. While it is

unclear from the Department’s submissions why it would be

inappropriate to use this number to discount the Subic Bay

values, its presence on the record invalidates AEFTC’s claim

that reopening the record would be the only way to address the

inaccuracy introduced into the subsidy estimate by inflation.

13
The CBRE Report provides both the headline inflation rate of
2.4% and a core inflation rate of 2.6%. It also presents an
explanation for the divergence between core and headline figures
based on recent tax changes as part of its general discussion of
the investment environment of the Philippines. It is puzzling
that neither party addresses the existence of these numbers on
page 1 of the CBRE Report before moving on to arguments over the
necessity of reopening the administrative record to collect
inflation data.
Court No. 11-00181 Page 21

Taken together, these factors undermine AEFTC’s argument

that the Department should be compelled to reopen the

administrative record to account for inflation. Since

Commerce’s benchmark selection was not unreasonable, the

Department’s failure to reopen the record was not an abuse of

discretion. Sterling Fed. Sys., Inc. v. Goldin, 16 F.3d 1177,

1182 (Fed. Cir. 1994) (quoting Gerritsen v. Shirai, 979 F.2d

1524, 1529 (Fed. Cir. 1992)) (stating that an agency abuses

discretion, inter alia, when its determination “follows from a

record that contains no evidence on which the [agency] could

rationally base its decision.” (alteration in original)) See

Essar Steel Ltd. v. United States, 678 F.3d 1268, 1278 (Fed.

Cir. 2012)(emphasizing the high threshold for overturning the

Department’s decisions regarding the collection of record

evidence).
Court No. 11-00181 Page 22

CONCLUSION

For the foregoing reasons, the Department’s selection of

the Subic Bay indicative land value as a benchmark for

estimating the subsidy provided to New Zhongya by land use

rights in the ZHTIDZ is affirmed. Judgment shall be issued

accordingly.

It is so ORDERED.

__/s/ Donald C. Pogue_______
Donald C. Pogue, Chief Judge

Dated: February 19, 2014
New York, NY