Hebei Foreign Trade and Advertising Corp. v. United States

Slip Op. 11-134

UNITED STATES COURT OF INTERNATIONAL TRADE

HEBEI FOREIGN TRADE AND
ADVERTISING CORPORATION,

Plaintiff,

CHERISHMET INCORPORATED,

Consolidated Plaintiff,

v. Before: Jane A. Restani, Judge

UNITED STATES, and UNITED STATES
DEPARTMENT OF COMMERCE, Consol. Court No. 09-00524

Defendants,

CALGON CARBON CORPORATION, and
NORIT AMERICAS INC.,

Intervenor Defendants.

OPINION

[Judgment sustaining remand results in non-market economy antidumping duty matter granting
separate rate status will be entered.]

Dated: October 24, 2011

Mowry & Grimson, PLLC (Kristin H. Mowry, Jill A. Cramer, Jeffrey S. Grimson,
Sarah M. Wyss, and Susan L. Brooks) for the plaintiff, Hebei Foreign Trade and Advertising
Company.

Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP (Francis J. Sailer) for
the consolidated plaintiff, Cherishmet Incorporated.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Claudia
Burke, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Delisa M. Sanchez); Thomas M. Beline, Office of Chief Counsel for Import
Administration, U.S. Department of Commerce, of counsel, for the defendant.
Consol. Case No. 09-00524 Page 2

Kelley Drye & Warren LLP (R. Alan Luberda, David A. Hartquist, and John M.
Herrmann, II) for the intervenor defendants, Calgon Carbon Corporation and Norit Americas,
Inc.

Restani, Judge: This matter comes before the court following its decision in

Calgon Carbon Corp. v. United States, Slip Op. 11-21, 2011 WL 637605 (CIT Feb. 17, 2011),1

in which the court remanded First Administrative Review of Certain Activated Carbon from the

People’s Republic of China: Final Results of Antidumping Duty Administrative Review, 74 Fed.

Reg. 57,995 (Dep’t Commerce Nov. 10, 2009) (“Final Results”) and Certain Activated Carbon

from the People’s Republic of China: Amended Final Results of Antidumping Duty

Administrative Review, 74 Fed. Reg. 66,952 (Dep’t Commerce Dec. 17, 2009) (“Amended Final

Results”), instructing the United States Department of Commerce (“Commerce”) to further

explain its interpretation of the certification requirements of 19 C.F.R § 351.303(g), to

reexamine its determination that Mr. Wang Kezheng (“Mr. Wang”) was not in a position to

certify separate rate status documents for Hebei Foreign Trade and Advertising Corporation

(“Hebei Foreign”), and, if necessary under Commerce’s interpretation of its regulations, to

permit Hebei Foreign to attempt to find someone who fulfills Commerce’s regulatory

requirements.2 Calgon Carbon, 2011 WL 637605, at *3. For the reasons stated below, the court

1
This action was “deconsolidated” in part in order to permit final judgment to be entered
as to another party. This resulted in a caption change for this aspect of the litigation.
2
The court also instructed Commerce to reexamine issues regarding the labor regression
methodology as well as surrogate values for hydrochloric acid, carbonize material, and
bituminous coal. The court later instructed the parties to advise the court as to how to proceed
regarding Commerce’s zeroing methodology in view of the intervening decision in Dongbu Steel
Co. v. United States, 635 F.3d 1363 (Fed. Cir. 2011). The court agreed with the parties to
continue as to the current schedule, and to permit the parties to address Dongbu Steel prior to
(continued...)
Consol. Case No. 09-00524 Page 3

sustains the Final Results of Redetermination Pursuant to Court Remand (Dep’t Commerce July

26, 2011) (Consol. Court No. 09-00524) (“Remand Results”), which, inter alia, set a separate

rate for Hebei Foreign at 16.35%.

BACKGROUND

The facts of this case have been well-documented in the court’s previous opinion.

See Calgon Carbon, 2011 WL 637605, at *1–3. The court presumes familiarity with that

decision, but briefly summarizes the facts relevant to this opinion.

In June 2008, Commerce initiated the first administrative review of its

antidumping (“AD”) order on certain activated carbon from the People’s Republic of China

(“PRC”). Initiation of Antidumping and Countervailing Duty Administrative Reviews and

Requests for Revocation in Part, 73 Fed. Reg. 31,813, 31,813 (Dep’t Commerce June 4, 2008).

Commerce concluded that Hebei Foreign’s separate rate status documents were inconclusive

because Commerce determined that Hebei Foreign either certified the documents using an

individual who was not its employee or filed an inaccurate and unreliable certification. Issues

and Decision Memorandum for the Final Results of the Antidumping Duty Administrative

Review of Certain Activated Carbon from the People’s Republic of China, A-570-904, POR

2
(...continued)
final judgment. No party has commented on the recent zeroing developments post-remand.
Accordingly, the court concludes it need not finally resolve any zeroing issue in this case.
Although Commerce addressed the labor regression methodology and surrogate value
issues on remand, no party commented on or contested Commerce’s explanation. The court
reasonably may infer that the parties concur in the resolution of those issues, as set forth in the
remand redetermination. See JTEKT Corp. v. United States, 780 F. Supp. 2d 1357, 1367 (CIT
2011). Accordingly, the court affirms the resolution of these issues in the remand
redetermination and the 2.95% margin for Ningxia Guanghua Cherishmet Activated Carbon Co.,
Ltd. and Beijing Pacific Activated Carbon Products Co., Ltd. (“Cherishmet”).
Consol. Case No. 09-00524 Page 4

10/11/06–3/31/08, at 80–81 (Nov. 3, 2009), available at

http://ia.ita.doc.gov/frn/summary/prc/E9-27083-1.pdf (last visited Oct. 24, 2011). As a result,

Commerce revoked Hebei Foreign’s separate rate status and assigned Hebei Foreign the PRC-

wide rate of 228.11%. Id. In December 2009, Hebei Foreign filed a complaint challenging the

Final Results and Amended Final Results before the court. Calgon Carbon, 2011 WL 637605, at

*1.

The court remanded the matter to Commerce, holding that Commerce did not

provide substantial support for its determination that Mr. Wang was not a “formal employee” of

Hebei Foreign because “[r]eliance on a single unclear statement by a party outside the

respondent corporation to the exclusion of half a dozen others to the contrary does not rise to the

level of substantial support.” Id. at *3. The court instructed Commerce to “explain its regulation

in the context of Chinese corporations and determine whether or not Mr. Wang was in a position

to certify the facts at issue.” Id. In addition, “[i]f Mr. Wang was in a position to know the facts

but was not an employee in the sense required by Commerce, then Commerce must re-open the

record to allow Hebei Foreign to attempt to find someone who fulfills the regulatory

requirement.” Id.

On remand, Commerce clarified that in 19 C.F.R. § 351.303(g)(1) requires

certification by a current employee of the respondent and that the “employer-employee”

relationship is distinguished from independent contractor or agent of the party relationships.

Remand Results at 5. Hebei Foreign admitted that Mr. Wang was not formally on Hebei

Foreign’s payroll. Id. at 6. As a result, Commerce determined that it was “unclear as to whether

Mr. Wang was an employee of Hebei Foreign or acted as an independent contractor or a selling
Consol. Case No. 09-00524 Page 5

agent for Hebei Foreign . . . .” Id. Commerce permitted Hebei Foreign to submit additional

certifications by someone “currently employed by” Hebei Foreign. Id. at 7. Hebei Foreign

provided new company certifications, signed by Mr. Liu Guozhang—the Chief of Hebei

Foreign—and Ms. Liu Furong. See Admin. R. 2, at Ex. 2–5. The certifications stated that Mr.

Liu Guozhang and Ms. Liu Furong “prepared or supervised the preparation” of the responses in

question. Id. Hebei Foreign provided tax return and payroll information for Mr. Liu Guozhang

and payroll information for Ms. Liu Furong, which Commerce determined satisfied the

definition of “employed by.” Admin. R. 2, at Ex. 6–8;3 Remand Results at 7. As a result,

Commerce granted Hebei Foreign a separate rate. Remand Results at 7. Commerce calculated

Hebei Foreign’s rate to be 16.35% by averaging the rates of Calgon Carbon (Tianjin) Co., Ltd.

and Jacobi Carbons AB. Id.

Hebei Foreign and Calgon commented on the Remand Results. Cmts. of Hebei

Foreign Trade and Advertising Corp. On Dep’t of Commerce July 26, 2011 Final Results of

Redetermination Pursuant to Court Remand (“Hebei Foreign’s Cmts.”) 1; Def.-Intervenors’

Cmts. on Commerce Dep’t Redetermination (“Calgon’s Cmts.”) 1–10. The government

responded.4

3
The payroll information for Mr. Liu Guozhang is from Hebei Shenglun Advertising and
Exhibition, Co, Ltd. (“Shenglun”), which his Declaration explains controlled and operated Hebei
Foreign until mid-2010. Admin. R. 2, at Ex. 5, 7. The Declarant signed the Hebei Foreign tax
return. Id. at Ex. 6.
4
Hebei Foreign attempted to file a reply. Def.-Intervenor’s Motion to Strike 1–3. The
reply was stricken from the record because the court’s order did not permit Hebei Foreign a reply
brief.
Consol. Case No. 09-00524 Page 6

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will uphold

Commerce’s final results, as well as its remand results, in AD reviews unless they are

“unsupported by substantial evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Separate Rate Status

Calgon claims that Commerce’s finding that Hebei Foreign is entitled to a

separate rate status is contrary to law and not supported by substantial evidence. Calgon’s Cmts.

2. Specifically, Calgon argues that 1) Commerce’s conclusion that Mr. Liu Guozhang satisfies

the requirements of 19 C.F.R § 351.303(g) is inconsistent with Commerce’s explanation of its

regulation, Calgon’s Cmts. 2, and 2) Ms. Liu Furong does not meet the requirements of 19 C.F.R

§ 351.303(g), Calgon’s Cmts. 2. Calgon’s arguments fail for the following reasons.

All factual information submitted in an antidumping proceeding must be

accompanied by a certification that the information is accurate. See 19 C.F.R. § 351.303(g).

This necessarily includes factual information supporting a claim of entitlement to status separate

from the government in a non-market economy case. The certification procedure requires that

the person officially responsible for the “presentation of the factual information,” state who he is

“currently employed by.” 19 C.F.R. § 351.303(g)(1). In the remand results, Commerce

explained the regulation as follows:

Whenever a party (e.g., a company or a government) submits factual
information in an AD/CVD proceeding, the law requires that the
person(s) officially responsible for presentation of the factual
Consol. Case No. 09-00524 Page 7

information provide a certification with the submission. The
certifier(s) of that factual submission must be “currently employed
by” the party submitting the factual information. For purposes of this
certification requirement, the Department defines “employed by” as
performing work under an employer-employee relationship. An
“employee” is a person in the service of another where the employer
has the power or right to control and direct the employee with respect
to what work will be done and the details of how it will be done, and
the employee receives payment for services from the employer. In
this regard, an “employee” of the party submitting factual
information is to be distinguished from an independent contractor(s)
or agent(s) of the party. The certifier(s) must be employed by the
party submitting the factual information at the time the submission is
made to the Department and the certifier(s) must have prepared or
supervised the preparation of the submission. The Department may
require proof of employment from the employer.

Remand Results at 5. In the instant case, Commerce determined that Hebei Foreign’s

documentary evidence demonstrated that Mr. Liu Guozhang and Ms. Liu Furong both satisfied

the regulation because they were “currently employed by” Hebei Foreign and they “prepared or

supervised the preparation,” id. at 6, of the separate rate status certifications and responses, id. at

6–7.

First, Calgon claims that Mr. Liu Guozhang did not meet the requirement of the

regulation as “clarified” because he was not an employee of Hebei Foreign when the

certifications were filed but rather was an employee of Hebei Shenglun Advertising and

Exhibition, Co., Ltd. (“Shenglun”). Calgon Cmts. 3–4. The regulation as Commerce attempts to

explain it in the remand results requires the certifier to be “employed by the party submitting the

factual information at the time the submission is made to the Department . . . .” Remand Results

at 5. Commerce relied on Mr. Liu Guozhang’s position as Chief of Hebei Foreign and legal

officer of Hebei Foreign, and also cited to documents where Mr. Liu Guozhang declared that he
Consol. Case No. 09-00524 Page 8

“performed work under an employer-employee relationship” and that he had a fiduciary duty to

Hebei Foreign and that Hebei Foreign had the “power or right to control and direct me with

respect to what work would be done and the details of how it would be done.” Admin. R. 2, at

Ex. 2 ¶ 16.

Calgon is correct that the record indicated Mr. Liu Guozhong is on the payroll of

the related company, Shenglun, which is a parent or successor to Hebei Foreign. He also

appears to be the principal of Hebei Foreign. If Commerce construes its regulation in all

instances to exclude non-payroll principals, i.e., those who know what is actually occurring in

the company, it could make certification of factual submissions impossible for some

corporations. Despite its attempt to be as precise as possible in clarifying its regulation,

Commerce appropriately decided that the payment arrangement does not always answer the

question posed by the regulation. Principals actually might take no salary in some cases.

Commerce has to make a sensible decision as to who can provide factual information and in this

case it has. Furthermore, it is not disqualifying that in some sense Mr. Liu Guozhang directed

and controlled the corporation while, in some other sense, was directed by the corporation, as his

declaration states.5

Second, Calgon claims that Ms. Liu Furong and Mr. Wang could not both have

“prepared or supervised” the September 15 and September 23 separate rate submissions. Calgon

Cmts. 5. In accepting separate rate certifications signed by Ms. Liu Furong, Commerce relied

5
It is apparent that the “clarification” cannot be applied literally. It is sufficient for this
case that the certifications comply with the regulation itself, and that the certifiers are in
positions to know the facts certified.
Consol. Case No. 09-00524 Page 9

upon payroll documents showing that Ms. Liu Furong was employed by Hebei Foreign and the

statement that Ms. Liu Furong “prepared or supervised the preparation of” the separate rate

certifications. Remand Results at 6–7. Nothing in the process of preparing or supervising the

preparation of documents makes preparation or supervision by one individual mutually exclusive

of the same tasks by a second or third individual. Thus, Commerce relied on substantial

evidence in determining that Ms. Liu Furong was employed by Hebei Foreign and that she in

fact supervised or prepared the documents in question. Commerce’s finding that the additional

certifications satisfied 19 C.F.R § 351.303(g) is supported by substantial evidence.6

II. Intent to Deceive

Calgon alleges that Commerce should be precluded from relying on Hebei

Foreign’s separate rate submissions because Hebei Foreign attempted to deceive Commerce with

regards to Mr. Wang’s employment status. Calgon Cmts. 7–10. In essence, Calgon argues that

because Hebei Foreign provided one piece of arguably inconsistent information, Commerce

should exclude all subsequent information submitted by Hebei Foreign from its separate rate

status determination. This claim lacks merit.

Although it remains unclear exactly what Mr. Wang’s status is, assuming some

information was not correct, the invalidity of information or documents cannot be imputed onto

other information or documents without substantial evidence. See Shandong Huarong Gen. Grp.

Corp. v. United States, 27 CIT 1568, 1594–95 (2003) (finding that failure at verification did not

6
Calgon also contests Hebei Foreign’s continued reliance on Mr. Wang’s certifications
and his status as “currently employed by” Hebei Foreign. Calgon Cmts. 6–7. On remand,
Commerce did not use Mr. Wang’s certifications or any documents relating to whether Mr.
Wang is or is not an employee of Hebei Foreign. Thus, Calgon’s argument is irrelevant.
Consol. Case No. 09-00524 Page 10

permit Commerce to also cast doubt upon the reliability of a company’s separate rate

certification); China Kingdom Imp. & Ex. Co. v. United States, 31 CIT 1329, 1331, 507 F. Supp.

2d 1337, 1342 (2007) (holding Commerce exceeded its authority when it rejected new

information on the basis that previous submissions had been incorrect). Commerce can use

adverse facts available, 19 U.S.C. § 1677e, or disregard information in deficient responses, 19

U.S.C. § 1677m(d), where a party fails to cooperate with Commerce or impedes the review

proceeding. See Gerber Food (Yunnan) Co. v. United States, 31 CIT 921, 931, 491 F. Supp. 2d

1326, 1337 (2007) (“Gerber Food II”). In Gerber Food II, Commerce assigned the PRC-wide

rate to two Chinese corporations. Id. at 922, 491 F. Supp. 2d at 1330. Commerce assigned the

PRC-wide rate after excluding all information submitted by Gerber because Gerber’s alleged

misrepresentations in its questionnaire responses “impugned the veracity of all of Gerber’s

responses.” Id. at 931, 491 F. Supp. 2d. at 1338 (emphasis added). The court, however,

determined that the alleged misrepresentations did not support a conclusion that all of the

information submitted was unreliable: Commerce must specify what information was deficient

and provide a reasoned analysis in support of such position. See id. at 929, 491 F. Supp. 2d. at

1335–36.

On remand, Commerce excluded Mr. Wang’s certification because the

information Hebei Foreign provided about Mr. Wang was unclear. Remand Results at 6.

Calgon’s reliance on the insufficiency or lack of credibility of prior documents to impugn

subsequent documents is deficient, particularly where no other record evidence casts significant

doubt on Commerce’s decision to rely on Hebei Foreign’s new submissions on remand. Thus,

Commerce did not err in using the new information provided by Hebei Foreign to determine
Consol. Case No. 09-00524 Page 11

Hebei Foreign’s separate rate status.

CONCLUSION

For the foregoing reasons, Commerce’s determination to grant separate rate status

to Hebei Foreign is supported by substantial evidence and is in accordance with the law.

Accordingly, the Remand Results are sustained.

/s/ Jane A. Restani
Jane A. Restani
Judge

Dated: This 24th day of October, 2011.
New York, New York.