Changzhou Hawd Flooring Co. v. United States

Slip Op. 15 - 71

UNITED STATES COURT OF INTERNATIONAL TRADE

CHANGZHOU HAWD FLOORING CO.,
LTD., et al.,

Plaintiffs,

v. Before: Donald C. Pogue,
Senior Judge
UNITED STATES,
Court No. 12-00020
Defendant.

OPINION

[remand redetermination affirmed]

Dated: July 6, 2015

Gregory S. Menegaz and J. Kevin Horgan, deKieffer &
Horgan, PLLC, of Washington, DC, for the Plaintiff, Changzhou
Hawd Flooring Co., Ltd.

Alexander V. Sverdlov, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice,
of Washington, DC, for Defendant. With him on the brief were
Benjamin C. Mizer, Principal Deputy Assistant Attorney General,
Jeanne E. Davidson, Director, and Claudia Burke, Assistant
Director. Of counsel was Shana Hofstetter, Attorney, Office of
the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, DC.

Pogue, Senior Judge: This action is again before the

court following a fourth remand and redetermination.1 The only

1 The court has jurisdiction pursuant to § 516A(a)(2)(B)(i) of
the Tariff Act of 1930, as amended, 19 U.S.C. §
1516a(a)(2)(B)(i) (2012) and 28 U.S.C. § 1581(c) (2012) (all
(footnote continued)
Court No. 12-00020 Page 2

issue remaining for review is the antidumping (“AD”) duty rate

assigned to one separate rate respondent – Changzhou Hawd

Flooring Co., Ltd., (“Changzhou Hawd” or “Plaintiff”).2

Previously, in the second and partial third

redeterminations, the Department of Commerce (“Commerce”) had,

belatedly, sought to individually investigate Changzhou Hawd.3

However, this decision was challenged as4 and found to be


further citations to the Tariff Act of 1930, as amended, are to
Title 19 of the U.S. Code, 2012 edition).
2 This action was previously consolidated with Court Numbers 11-
00452, 12-00007, and 12-00013, under Consolidated Court Number
12-00007. Order, May 31, 2012, Consol. Ct. No. 12-00007, ECF No.
37. Court Number 11-00452 was ultimately severed and dismissed.
Am. Order Nov. 27, 2012, Consol. Ct. No. 12-00007, ECF No. 75;
Judgment, Ct. No. 11-00452, ECF No. 68; see Baroque Timber
Indus. (Zhongshan) Co. v. United States, __ CIT __, 853 F. Supp.
2d 1290 (2012); Baroque Timber Indus. (Zhongshan) Co. v. United
States, __ CIT __, 865 F. Supp. 2d 1300 (2012). Following the
first redetermination, Final Results of Redetermination Pursuant
to Ct. Order, Consol. Ct. No. 12-00007, ECF No. 132 (“First
Redetermination”), Court Numbers 12-00007 and 12-00013 were
severed and final judgment entered. Order Granting Mot. to
Sever, Consol. Ct. No. 12-00007, ECF No. 162; Judgment, Ct. No.
12-00007, ECF No. 163; Judgment, Ct. No. 12-00013, ECF No. 32.
These were appealed by Defendant-Intervenor (the Coalition for
American Hardwood Parity). Notice of Appeal, Ct. No. 12-00007,
ECF No. 166; Notice of Appeal, Ct. No. 12-00013, ECF No. 33.
Defendant-Intervenor moved to voluntarily dismiss the appeal,
without opposition. The motion was granted. Zhejiang Layo Wood
Indus. Co. v. United States, 576 F. App’x 1000 (Fed. Cir. 2014).
3 Final Results of Redetermination Pursuant to Ct. Order, ECF
No. 52 (“Second Redetermination”), at 8-9; Final Results of
Redetermination Pursuant to Ct. Order, ECF No. 107 (“Third
Redetermination”), at 16-17.
4 See Comments of Certain Separate Rate Appellants to 2d Remand
Redetermination, ECF No. 69 (“Pls.’ Comments on Second
Redetermination”), at 33-36.
Court No. 12-00020 Page 3

arbitrary and capricious. Changzhou Hawd Flooring Co. v. United

States, __ CIT __, 44 F. Supp. 3d 1376, 1388-90 (2015). On

remand, Commerce determined that the separate rate, and

therefore Changzhou Hawd’s rate, was more than de minimis.

Rather than then calculate a rate for Changzhou Hawd, however,

Commerce decided to continue applying the company’s current cash

deposit rate, as established in the original final

determination,5 pending the final results of the Second

Administrative Review, where Changzhou Hawd is again a separate

rate respondent.6 Final Results of Redetermination Pursuant to

Ct. Order, ECF No. 130 (“Fourth Redetermination”). Plaintiff

challenges this determination as not in accordance with law, not

supported by substantial evidence, and not compliant with the

court’s previous remand order.7

Because Commerce’s decision is based on a reasonable

reading of the law and of the evidentiary record, satisfying the


5 Multilayered Wood Flooring from the People’s Republic of China
[(“PRC”)], 76 Fed. Reg. 64,318 (Dep’t Commerce Oct. 18, 2011)
(final determination of sales at less than fair value) (“Inv.
Final Determination”); Multilayered Wood Flooring from the
[PRC], 76 Fed. Reg. 76,690, 76,691-92 (Dep’t Commerce Dec. 8,
2011) (amended final determination of sales at less than fair
value and antidumping duty order) (“Inv. Amended Final
Determination”).
6 See Multilayer Wood Flooring from the [PRC], 80 Fed. Reg. 1388
(Dep’t Commerce Jan. 9, 2015) (preliminary results of AD duty
administrative review; 2012-2013) (“AR2 Prelim. Determination”)
7 Comments of Changzhou Hawd Flooring Co., Ltd. in Opp’n to 4th
Remand Redetermination, ECF No. 132 (“Pl.’s Br.”).
Court No. 12-00020 Page 4

court’s previous remand instructions, the determination is

affirmed.

BACKGROUND

Previous litigation of the separate rate in this

investigation has produced two court opinions8 and two

corresponding redeterminations by Commerce,9 a voluntary remand

and redetermination,10 a third court opinion,11 and now a fourth

redetermination by Commerce.12 While the court presumes

familiarity with the progression of this case, the immediately

pertinent facts are summarized below.

In the second and supplementing partial third

redeterminations, Commerce inferred that, because there were 110

non-cooperative respondents in the investigation, the separate

rate was more than de minimis. Second Redetermination, ECF

No. 52, at 3-7. Commerce, however, declined to calculate a

specific separate rate. Id. at 7-8. Instead, the agency


8 Baroque Timber Indus. (Zhongshan) Co. v. United States, ___ CIT

___, 925 F. Supp. 2d 1332 (2013); Baroque Timber Indus.
(Zhongshan) Co. v. United States, __ CIT __, 971 F. Supp. 2d
1333 (2014)
9 First Redetermination, Consol. Ct. No. 12-00007, ECF No. 132;
Second Redetermination, ECF No. 52.
10 Third Redetermination, ECF No. 107.
11 Changzhou Hawd, __ CIT __, 44 F. Supp. 3d 1376.
12 Fourth Redetermination, ECF No. 130.
Court No. 12-00020 Page 5

assigned seven of the Plaintiffs13 the rate calculated for them

in the First Administrative Review (which had already, by that

time, been completed),14 as limited by the provisional measures

deposit cap.15 Id. Changzhou Hawd, however, did not have a rate

from the First Administrative Review.16 Commerce, concluding

that it did not have enough data on the record to calculate a

rate reflective of Changzhou Hawd’s economic reality, belatedly

initiated an individual investigation of the company. Id. at


13 Fine Furniture (Shanghai), Ltd. (“Fine Furniture”); Dunhua

City Jisen Wood Industry Co., Ltd; Dunhua City Dexin Wood
Industry Co., Ltd; Dalian Huilong Wooden Products Co.; Kunshan
Yingyi-Nature Wood Industry Co., Ltd.; Armstrong Wood Products
(Kunshan) Co., Ltd. (“Armstrong”); and Karly Wood Product Ltd.
Second Redetermination, ECF No. 52, at 1-2, 7-8.
14See Multilayered Wood Flooring from the [PRC], 79 Fed. Reg.
26,712, 26,713, (Dep’t Commerce May 9, 2014) (final results of
antidumping duty administrative review; 2011-2012) (“AR1 Final
Determination”).
15The provision measures deposit cap “ensures that, for the
interstitial period of the investigation — after the preliminary
determination but prior to the issuance of an AD order —
importers are not liable for more than the rate set for them at
the time of entry.” Changzhou Hawd, 44 F. Supp. 3d at 1388
(citing 19 U.S.C. § 1673f(a); 19 C.F.R. § 351.212(d)(2014)).
This means that “[i]f the AD duty rate set in the first
administrative review (or subsequent litigation) is less, the
difference between it and the cash deposit, bond, or other
security provided at entry, is refunded. If the AD duty rate is
ultimately more, then the difference is not owed.” Id. (citing
Thai Pineapple Canning Indus. Corp. v. United States, 273 F.3d
1077, 1086 (Fed. Cir. 2001)).
16Changzhou Hawd was found to have no shipments for the period
of the first administrative review. AR1 Final Determination, 79
Fed. Reg. at 26,713.
Court No. 12-00020 Page 6

8-9; Third Redetermination, ECF No. 107.17 While the court

affirmed as reasonable Commerce’s inference of a more than de

minimis separate rate and use of rates from the First

Administrative Review, Changzhou Hawd, __ CIT at __, 44 F. Supp.

3d at 1385-88, it found Commerce’s decision to individually

investigate Changzhou Hawd at such a late date in the proceeding

— and after repeatedly refusing to investigate a would-be

voluntary respondent, claiming lack of administrative resources

– to be arbitrary and capricious, and remanded accordingly. Id.

at 1388-91.

On remand, Commerce again inferred that the separate rate

was more than de minimis, but declined, as it did previously, to

calculate a separate rate. Fourth Redetermination, ECF No. 130,

17 Changzhou Hawd subsequently filed a petition for a writ of

mandamus to compel Commerce to refrain from the individual
investigation “until such time as this Court is satisfied that
[Commerce] has complied with its legal obligation to calculate a
lawful separate rate.” Pl. Changzhou Hawd Flooring Co., Ltd.
Pet. for Writ of Mandamus, ECF No. 71. Commerce agreed to
suspend the deadlines for Changzhou Hawd’s individual
investigation, Letter from Commerce to Ct., ECF No. 82, and
sought voluntary remand to reconsider its decision to conduct a
full investigation of Changzhou Hawd, Def.’s Mot. for a
Voluntary Remand, ECF No. 92. The court accordingly denied
Plaintiff’s petition as moot. Changzhou Hawd Flooring Co. v.
United States, __ CIT __, 6 F. Supp. 3d 1358, 1360 n.9 (2014).
Plaintiff now seeks to renew its petition for writ of mandamus.
Pl.’s Br., ECF No. 132, at 15-16. However, as the court has
already found Commerce’s decision to conduct a full individual
investigation of Changzhou Hawd arbitrary and capricious, and
remanded to Commerce with instructions to find a different,
reasonable method of establishing Changzhou Hawd’s rate,
Changzhou Hawd, __ CIT at __, 44 F. Supp. 3d at 1388-90, this
motion remains moot and therefore is again DENIED AS MOOT.
Court No. 12-00020 Page 7

at 4-5. Instead, because of “the limited time for which

Changzhou Hawd’s specific margin will be effective, and in the

continued interest of conserving administrative resources,”18

Commerce has proposed to continue applying the 3.30 percent cash

deposit rate as calculated in the Inv. Amended Final

Determination, 76 Fed. Reg. at 76,691-92,19 until the Second

Administrative Review, where Changzhou Hawd is again a separate

rate respondent, sets Changzhou Hawd’s assessed rate.20 Fourth


18 In making this determination, Commerce emphasizes that its

“discretion in carrying out antidumping and countervailing duty
law should provide [Commerce] [with] the ability to conduct a
full individual examination of a respondent if [Commerce] finds
it necessary to do so,” and only eschews this method because of
the court’s remand order. Fourth Redetermination, ECF No. 130,
at 6. Commerce is correct that it has the discretion to reopen
the record, Essar Steel Ltd. v. United States, 678 F.3d 1268,
1278 (Fed. Cir. 2012), however the exercise of that discretion
cannot be arbitrary and capricious, see Changzhou Hawd, __ CIT
at __, 44 F. Supp. 3d at 1388-90.
19This was the separate rate, calculated by taking the simple
average of the two non-de minimis mandatory respondent rates per
19 U.S.C. § 1673d(c)(5)(A). Inv. Final Determination, 76 Fed.
Reg. at 64,322; Inv. Amended Final Determination, 76 Fed. Reg.
at 76,691-92 (recalculating the separate rate, because of a
change in a mandatory respondent rate, to equal 3.30 percent).
On remand, however, changes to the underlying surrogate values
and calculation methodology reduced the rates for all mandatory
respondents to zero. First Redetermination, Consol. Ct. No. 12–
00007, ECF No. 132, at 2, 52. The separate rate was
subsequently estimated under 19 U.S.C. § 1673d(c)(5)(B). Id.
at 27; Second Redetermination, ECF No. 52, at 6–8; Fourth
Redetermination, ECF No 130, at 4.
20While Changzhou Hawd entered subject merchandise during the
period of investigation (April 1, 2010 through September 30,
2010), Inv. Final Determination, 76 Fed. Reg. at 64,3l8, 64,323;
see also 19 C.F.R. § 351.204(b)(1), it did not during the period
of the First Administrative Review (May 26, 2011 (the
(footnote continued)
Court No. 12-00020 Page 8

Redetermination, ECF No. 130, at 5-6. Commerce’s deadline for

the completion of the Second Administrative Review is July 8,

2015. Id. at 5.

STANDARD OF REVIEW

The court will sustain Commerce’s determination on

remand if it is accordance with law, supported by substantial

evidence on the record, and complies with the court’s remand

order. 19 U.S.C. § 1516a(b)(1)(B)(i); Jinan Yipin Corp., Ltd. v.

United States, 33 CIT 934, 936, 637 F. Supp. 2d 1183, 1185

(2009)


publication of the preliminary determination in the
investigation) through November 30, 2012 (the end of the month
immediately preceding the first anniversary month of the order),
AR1 Final Determination, 79 Fed. Reg. at 26,713; see also
19 C.F.R. § 351.213(e)(1)(ii); Multilayered Wood Flooring from
the [PRC], 76 Fed. Reg. 30,656, 30,657 (Dep’t Commerce May 26,
2011) (preliminary determination of sales at less than fair
value) (dated May 26, 2011); Inv. Amended Final Determination,
76 Fed. Reg. at 76,690 (setting effective date of order at
December 8, 2011). Changzhou Hawd again entered subject
merchandise during the period of the second administrative
review (December 1, 2012 through November 30, 2013). AR2 Prelim.
Determination, 80 Fed. Reg. at 1388, 1389.
The “preliminary determination in an [AD] duty
investigation constitutes the first point at which [Commerce may
require duties],” 19 C.F.R. § 351.205(a), here from the period
of the First Administrative Review, AR1 Final Determination,
79 Fed. Reg. at 26,713. Accordingly, all entries made by
Changzhou Hawd that are actually subject to the AD duty order
(and therefore to a cash deposit requirement) come from the
Second Administrative Review period and are therefore “covered
by” the Second Administrative Review. See 19 U.S.C.
§ 1675(a)(2)(C). The Second Administrative Review will “be the
basis for the assessment of [AD] duties” on these entries, and
“for deposits of estimated duties” going forward. Id.; see
AR2 Prelim. Determination, 80 Fed. Reg. at 1389.
Court No. 12-00020 Page 9

DISCUSSION

I. Commerce’s Methodology

Lacking more specific statutory guidance, Commerce

follows 19 U.S.C. § 1673d(c)(5) (the “[m]ethod for determining

[the] estimated all-others rate”) to establish the separate

rate. See Fourth Redetermination, ECF No. 130, at 4. Generally,

the separate rate is equal to the weighted average of the rates

calculated for individually investigated respondents, “excluding

any zero and de minimis margins, and any margins [based entirely

on facts otherwise available].” 19 U.S.C. § 1673d(c)(5)(A).

However, where, as here, all individually investigated rates are

zero, de minimis, or based entirely on facts otherwise

available, the statute allows Commerce to use “any reasonable

method to establish the estimated [separate rate].” 19 U.S.C.

§ 1673d(c)(5)(B).

“[A]ny reasonable method” is a “lenient standard” that

leaves much to Commerce’s discretion. Yangzhou Bestpak Gifts &

Crafts Co. v. United States, 716 F.3d 1370, 1378 (Fed. Cir.

2013).21 It is expected to mean a weighted average of the rates


21 Presented with such broad language, the court considers only
whether “the agency's interpretation amounts to a reasonable
construction of the statute.” Bestpak, 716 F.3d at 1377 (citing
Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
467 U.S. 837, 842–43 (1984)). Further, “[t]o survive judicial
scrutiny, [Commerce's] construction need not be the only
reasonable interpretation or even the most reasonable
interpretation. Rather, a court must defer to an agency’s
reasonable interpretation of a statute even if the court might
(footnote continued)
Court No. 12-00020 Page 10

calculated for individually investigated respondents. 19 U.S.C.

§ 1673d(c)(5)(B); Uruguay Round Agreements Act, Statement of

Administrative Action (“SAA”), HR. Doc. No. 103-316 (1994)

at 873, reprinted in 1994 U.S.C.C.A.N. 4040, 4201.22 However, if

this method “is not feasible, or if it results in an average

that would not be reasonably reflective of potential dumping

margins for non-investigated exporters or producers,” i.e., is

not reasonable in context, then “Commerce may use other

reasonable methods.” SAA at 873, reprinted in 1994 U.S.C.C.A.N.

at 4201.

Here, Commerce has determined that the expected method

results in a separate rate that is not reasonably reflective of

respondents’ potential dumping margins. Fourth Redetermination,

ECF No. 130, at 4-5; Second Redetermination, ECF No. 52,

at 4-5.23 Instead, citing to the Second Redetermination (and the


have preferred another.” Koyo Seiko Co. v. United States,
36 F.3d 1565, 1570 (Fed. Cir. 1994) (citing Zenith Radio Corp.
v. United States, 437 U.S. 443, 450 (1978)) (emphasis original).
22The SAA is recognized by Congress as an authoritative
expression concerning the interpretation and application of the
Tariff Act of 1930. 19 U.S.C. § 3512(d).
23Plaintiff argues that Commerce “has no basis at all in this
case to set aside the ‘expected method’ of calculating rates for
cooperating non-mandatory respondents,” Pl.’s Br., ECF No. 132,
at 6, and asks that the court “direct [Commerce] to use the
‘expected method’ and assign Changzhou Hawd a de minimis
antidumping duty margin, excluding Changzhou Hawd from the
antidumping duty order on appeal in this case.” Id., at 3.
This argument fails in the same way and for the same
reasons it failed in Changzhou Hawd, __ CIT at __, 44 F. Supp.
(footnote continued)
Court No. 12-00020 Page 11

court’s affirmance thereof), Commerce has inferred that the

separate rate (and therefore Changzhou Hawd’s rate) is more than

de minimis. Fourth Redetermination, ECF No. 130, at 4-5; see

Second Redetermination, ECF No. 52, at 3-6. Rather than

calculate a specific separate rate, however, Commerce decided to

continue applying Changzhou Hawd’s current 3.30 percent cash

deposit rate, as calculated in the Inv. Amended Final

Determination, 76 Fed. Reg. at 76,691-92, in the brief interim

until the Second Administrative Review sets the assessed rate

for Changzhou Hawd’s entries (i.e., until July 8, 2015). Fourth

Redetermination, ECF No. 130, at 5-6. Accordingly, having

inferred from the record that the separate rate is more than de

minimis and applied a (more than de minimis) rate calculated for

Changzhou Hawd, Commerce may be said to have established a rate

“reasonably reflective” of Changzhou Hawd’s “potential dumping

margin[].” See SAA at 873, reprinted in 1994 U.S.C.C.A.N.

at 4201. Accordingly, Commerce’s methodology is within a

reasonable construction of the statute. Cf. Changzhou Hawd, __


3d. at 1383-85. Cf. Pls.’ Comments on Second Redetermination,
ECF No. 69, at 10–13 (making the same argument). The statute
provides an “expected method,” not a compulsory method. “That
‘any reasonable method’ is available to Commerce, not just the
expected method, indicates the statute contemplates the
possibility of a more than de minimis separate rate even where,
as here, all individually investigated rates are zero.”
Changzhou Hawd, __ CIT at __, 44 F. Supp. at 1384 (citing 19
U.S.C. § 1673d(c)(5)(B)).
Court No. 12-00020 Page 12

CIT at __, 44 F. Supp. at 1383-85 (holding the same for the

other separate rate plaintiffs in this action).24

II. Commerce’s Methodology in the Context of the Record

A. Commerce’s Inference that the Separate Rate is More Than
De Minimis
As in the Second Redetermination, Commerce has

inferred that the separate rate is more than de minimis because

110 companies did not respond to Commerce’s quantity and value

questionnaire. Fourth Redetermination, ECF No. 130, at 4; see

Second Redetermination, ECF No. 52, at 4. Commerce again

corroborates its inference with the non-de minimis rates

calculated for separate rate respondents in subsequent


24 Contrary to Plaintiff’s argument, Pl.’s Br., ECF No. 132,

at 2-3, this result is not barred by Changzhou Hawd, __ CIT
at __, 44 F. Supp. 3d at 1388-90. While a redetermination must
comply with the remand order, Jinan Yipin, 33 CIT at 936,
637 F. Supp. 2d at 1185, the remand order here was “for further
consideration” – that is, to find a “reasonable method” to
establish Changzhou Hawd’s rate, rooted in the already robust
evidentiary record, supplemented as necessary given Commerce’s
continued “discretion to reasonably reopen the record.”
Changzhou Hawd, __ CIT at __, 44 F. Supp. 3d at 1390-91. This
is in keeping with this Courts role in reviewing Commerce’s
decisions. See Florida Power & Light Co. v. Lorion,
470 U.S. 729, 744 (1985) (“If the record before the agency does
not support the agency action, if the agency has not considered
all relevant factors, or if the reviewing court simply cannot
evaluate the challenged agency action on the basis of the record
before it, the proper course, except in rare circumstances, is
to remand to the agency for additional investigation or
explanation. The reviewing court is not generally empowered to
conduct a de novo inquiry into the matter being reviewed and to
reach its own conclusions based on such an inquiry.”).
Court No. 12-00020 Page 13

administrative reviews. Fourth Redetermination, ECF No. 130,

at 6-7; Second Redetermination, ECF No. 52, at 7, 30.25

Commerce’s inference of a more than de minimis

separate rate was reasonable in the Second Redetermination, and

remains reasonable here.26 Commerce has made the same rational

connection between the facts found (110 non-cooperating

respondents) and the choices made (the inference of a more than

25 In the First Administrative Review, Commerce found dumping

margins of 0.00, 5.74, and 0.00 for Nanjing Minglin Wooden
Industry Co. Ltd., Fine Furniture, and Armstrong (all separate
rate respondents in the investigation, see Inv. Final
Determination, 76 Fed. Reg. at 64,323), respectively. AR1 Final
Determination, 79 Fed. Reg. at 26,714. Fine Furniture’s rate
became the separate rate (as the only individually investigated
non-de minimis, non-AFA rate). Id. The final results were
subsequently amended, to correct a ministerial error, changing
Fine Furniture’s rate to 5.92 percent (with the separate rate
revised accordingly). Multilayered Wood Flooring from the [PRC],
79 Fed. Reg. 35,314, 35,315-16 (Dep’t Commerce June 20, 2014)
(amended final results of antidumping duty administrative
review; 2011-2012).
In the Second Administrative Review, Commerce has
preliminarily found dumping margins of 0.00 and 18.27 for
individually investigated respondents Dalian Dajen Wood Co.,
Ltd. and Jiangsu Senmao Bamboo and Wood Industry Co., Ltd.
(“Senmao,”) (both separate rate respondents in the
investigation, see Final Investigation, 76 Fed. Reg. at 64,323,
and First Administrative Review, see AR1 Final Determination,
79 Fed. Reg. at 26,714). AR2 Prelim. Determination, 80 Fed.
Reg. at 1389. Senmao’s rate became the separate rate (as the
only individually investigated non-de minimis, non-AFA rate).
Id. Changzhou Hawd, as a separate rate respondent in the Second
Administrative Review, is subject to this separate rate. Id.
The final determination will be issued no later than July 8,
2015. Fourth Redetermination, ECF No. 130, at 5.
26See Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351
(Fed. Cir. 2006) (explaining that the substantial evidence
standard asks whether, given the record as a whole, the agency’s
determination was reasonable).
Court No. 12-00020 Page 14

de minimis separate rate for the investigation).27 See Changzhou

Hawd, __ CIT at __, 44 F. Supp. 3d at 1385-87 (holding that the

same inference on the same record as that here was supported by

substantial evidence).28 This redetermination is only distinct

in that now Commerce also has the preliminary results from the

Second Administrative Review to corroborate its conclusion that

“the separate rate respondents’ economic reality is more varied

and complicated than the mandatory respondent de minimis rates

[in the investigation] suggest” and to “confirm[] that the

separate rate respondents merit the closer consideration that

keeping them subject to the order affords, some receiving

27 See Burlington Truck Lines, Inc. v. United States,

371 U.S. 156, 168 (1962) (holding that the agency must
articulate “rational connection between the facts found and the
choice made”).
28Nonetheless, Plaintiff again argues that this inference is
unsupported by substantial evidence because Commerce relied on
the non-cooperation of 110 respondents, which is tantamount to
applying adverse facts available to cooperative respondents, and
impermissibly considered the presence of non-de minimis
calculated rates for separate rate respondents, including
Changzhou Hawd, in the First and Second Administrative Reviews.
Pl.’s Br., ECF No. 132, at 4-11.
These arguments remain as unpersuasive as before, when
Plaintiffs used them to challenge the same inference in the
Second Redetermination. See Second Redetermination, ECF No. 52,
at 4 (Commerce making the same inference); Pls.’ Comments on
Second Redetermination, ECF No. 69, at 15-19 (Plaintiffs making
the same argument against it); Changzhou Hawd, __ CIT at __,
44 F. Supp. 3d at 1385-87 (holding that Commerce’s inference of
a greater than de minimis separate rate is supported by
substantial evidence, is not the equivalent of applying AFA to
separate rate respondents, and does not impermissibly consider
rates from subsequent stages, rather using them permissibly, for
corroboration).
Court No. 12-00020 Page 15

de minimis rates and others not.” Changzhou Hawd, __ CIT at __,

44 F. Supp. 3d at 1387.29

Changzhou Hawd, in successfully challenging Commerce’s

attempt to individually investigate it (and thereby obtain an

individual rate), retained its separate rate status, Changzhou

Hawd, __ CIT at __, 44 F. Supp. 3d at 1388-90, and as such, it

is subject to a reasonably determined separate rate. As before,

“Commerce's conclusion that — based on the silence of 110

respondents, the resultant gap in the record, and the mixed

results of the first [and now second] administrative review[s] —

the separate rate (and thus Plaintiff[’s] rate) in this

investigation is somewhat more than de minimis and less than

AFA, while not the only possible inference, is a reasonable

inference from the record.” Id. at 1387. Commerce’s inference


29 Plaintiff argues this does not follow because “the [c]ourt’s

[previous] holdings were moored in the facts of [the First
Administrative Review]” and “[t]hose results cannot have
anything to do with Changzhou Hawd’s economic reality because
the company had no sales in that period.” Pl.’s Br., ECF
No. 132, at 12. This misapprehends the nature of Changzhou
Hawd’s status as a separate rate respondent. It is true that
the separate rate must reflect “commercial reality” and “bear
some relationship to [respondents’] actual dumping margins.”
Bestpak, 716 F. 3d at 1380 (quotation marks and citation
omitted). However, the separate rate remains an estimate
calculated for a group of respondents. See 19 U.S.C.
§§ 1673d(c)(5), 1677f-1(c). Subsequently calculated rates from
multiple separate rate respondents “bear some relationship to
[respondents’] actual dumping margins” and tethers the separate
rate to economic reality. See Bestpak, 716 F. 3d at 1380.
Changzhou Hawd, having eschewed individual investigation, is a
separate rate respondent and subject to the separate rate.
Court No. 12-00020 Page 16

of a more than de minimis separate rate remains supported by

substantial evidence.

B. Changzhou Hawd’s Interim Cash Deposit Rate
Commerce, having reasonably inferred that the separate

rate is more than de minimis, again declines to calculate a

specific separate rate. Instead, Commerce will continue to

apply the 3.30 percent cash deposit rate from the Investigation

Amended Final Determination, 76 Fed. Reg. at 76,691-92, until

the Second Administrative Review is completed and sets Changzhou

Hawd’s actual assessed rate. Fourth Redetermination,

ECF No. 130, at 5-6.

As Plaintiff points out, Pl.’s Br., ECF No. 132,

at 13, and Commerce concedes, Fourth Redetermination, ECF

No. 130, at 6, the 3.30 percent separate rate comes from the

Investigation Amended Final Determination and was remanded

because the individually-investigated rates from which it was

calculated were held to be unsupported by substantial evidence.

See Baroque Timber, __ CIT __, 925 F. Supp. 2d 1332. However,

while this 3.30 percent rate lacks the under-pinnings to be a

precise calculation, the particular circumstances presented here

render it a reasonable estimate, a cash deposit rate, of

Changzhou Hawd’s duty liability and therefore supported by

substantial evidence.

First, any specific rate used here is without more

than temporary effect. Regardless of the precise rate
Court No. 12-00020 Page 17

calculated, Changzhou Hawd remains subject to the AD duty order

because its rate, the separate rate, is reasonably more than de

minimis. See 19 U.S.C. §§ 1673b(b)(3), 1673d(a)(4). Changzhou

Hawd’s actual liability will be determined in the Second

Administrative Review, where the assessed rate for Changzhou

Hawd’s entries will be set. See 19 U.S.C. § 1675(a)(2)(C). The

rate set here is only a cash deposit rate, an estimate of

potential duties. 19 U.S.C. § 1673b(d)(1)(B).30 Because the

Second Administrative Review must be completed no later than

July 8, 2015, this rate will only apply for a matter of weeks,

for a shorter period of time than it would take to remand and

redetermine the rate. Fourth Redetermination, ECF No. 130, at 5.

Thus, any rate calculated now is teetering on the brink of

mootness.

Second, a rate of 3.30 percent is a conservative

estimate that aligns with the margins calculated for separate

rate respondents (including Changzhou Hawd) in subsequent

reviews. While each period of investigation or review is a

“separate segment of proceedings with its own unique

facts,” Peer Bearing Co.-Changshan v. United States, 32 CIT

1307, 1310, 587 F.Supp.2d 1319, 1325 (2008) (quotation marks and


30 Any difference between the assessed rate and cash deposit rate

will result either in a refund if duties have been over-
collected, or additional payments if duties have been under-
collected. 19 U.S.C. § 1673f(b).
Court No. 12-00020 Page 18

citation omitted), “if dumping occurred during the review, under

the discipline of an AD order, it is likely to have also

occurred [in the investigation], without the discipline of an AD

order to disincentivize such pricing behavior,” Changzhou Hawd,

__ CIT at __, 44 F. Supp. 3d at 1386.31 In the First

Administrative Review, the separate rate is 5.92 percent.

Investigation Amended Final Determination, 79 Fed. Reg. at

35,315. In the Second Administrative Review, the separate rate

(Changzhou Hawd’s rate as a separate rate respondent) is

preliminarily 18.92 percent. AR2 Prelim. Determination,

80 Fed. Reg. at 1389. This suggests that the 3.30 percent rate

is a fair, if not conservative estimate (being less than any

calculated rate) of Changzhou Hawd’s potential AD duty

liability, and therefore is reasonably reflective of the

company’s economic reality.32


31 This inference is in keeping with Commerce’s permissible

rational actor assumption – i.e., that respondents will make
choices that will result in the lowest possible rate. See
Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d
1330, 1338-39 (Fed. Cir. 2002) (citing Rhone Poulenc, Inc. v.
United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990)); Tianjin
Mach. Imp. & Exp. Corp. v. United States, __ CIT __,
752 F. Supp. 2d 1336, 1347 (2011) (“In other words, [Rhone
Poulenc] stands for the proposition that a respondent can be
assumed to make a rational decision to either respond or not
respond to Commerce's questionnaires, based on which choice will
result in the lower rate.”).
32Cf. Navneet Publications (India) Ltd. v. United States,
Slip-Op. No. 15-41, 2015 WL 1963768, at *4 (CIT May 4, 2015)
(“On remand, Commerce was tasked only with ensuring that the
all-others rate reflected plaintiffs’ reality. That the
(footnote continued)
Court No. 12-00020 Page 19

Accordingly, because Commerce’s estimated rate is both

temporary and conservative, in the interest of administrative

and judicial economy,33 it is reasonable for Commerce to continue

using it as the cash deposit rate for Changzhou Hawd.

CONCLUSION

For the foregoing reasons, and consistent with the

court’s opinion in Changzhou Hawd, __ CIT __, 44 F. Supp. 3d

1376, Commerce’s determination in the Inv. Amended Final

Determination, 76 Fed. Reg. 76,690 as amended by the Fourth

Redetermination, ECF No. 130, is AFFIRMED.

Judgment will be entered accordingly.

/s/ Donald C. Pogue__________
Donald C. Pogue, Senior Judge

Dated: July 6, 2015
New York, NY

[selected, not calculated] 0.5% all-others rate aligns with all-
others rates from past reviews suggests that Commerce fulfilled
this task.”) (citations omitted). Commerce further argues that
“Changzhou Hawd’s ability and willingness to sell subject
merchandise in the U.S. market at a cash deposit rate of 3.30
percent reflects Changzhou Hawd’s economic reality to the extent
necessary under the specific facts of this redetermination” –
that is, it is a temporary rate with a temporary effect, that
has not yet pushed Changzhou Hawd out of the market. Fourth
Redetermination, ECF No. 130, at 7.
33See USCIT Rule 1; Union Camp Corp. v. United States, 23 CIT
264, 280, 53 F. Supp. 2d 1310, 1325 (1999).