Slip Op. 06-42
UNITED STATES COURT OF INTERNATIONAL TRADE
_____________________________
:
HONTEX ENTERPRISES, INC., :
D/B/A LOUISIANA PACKING CO., :
:
Plaintiff, :
:
v. :
: Before: Richard K. Eaton, Judge
UNITED STATES, :
:
Defendant, : Court No. 00-00223
:
and :
:
CRAWFISH PROCESSORS ALLIANCE,:
THE LOUISIANA DEPARTMENT OF :
AGRICULTURE AND FORESTRY, :
AND BOB ODOM, COMMISSIONER, :
:
Def.-Ints. :
_____________________________
MEMORANDUM OPINION AND JUDGMENT
Dated: April 3, 2006
[United States Department of Commerce’s Conclusion in the Final
Results on Remand, affirmed]
Arent Fox Kintner Plotkin & Kahn, PLLC (John M. Gurley),
for plaintiff.
Peter D. Keisler, Assistant Attorney General, Civil
Division, United States Department of Justice; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Jeanne E. Davidson, Deputy
Director, International Trade Section, Commercial Litigation
Branch, Civil Division, United States Department of Justice
(David S. Silverbrand and Paul D. Kovac); United States
Department of Commerce, Office of Chief Counsel for Import
Court No. 00-00223 Page 2
Administration (Marisa Beth Goldstein), of counsel, for
defendant.
Adduci, Mastriani & Schaumberg, LLP (James Taylor, Jr. and
John C. Steinberger), for defendant-intervenors.
Eaton, Judge: This antidumping action is before the court
following a third remand to the United States Department of
Commerce (“Commerce” or the “Department”). See Final Results
of Determination Pursuant to Court Remand (Dep’t Commerce, Dec.
9, 2005) (“Final Results on Remand”). See generally Hontex
Enter., Inc. v. United States, 29 CIT , 387 F. Supp. 2d 1353
(2005) (“Hontex III”). Jurisdiction is had pursuant to 28
U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(iii)
(2000). For the reasons set forth below, the court affirms the
“Conclusion” found in the Final Results on Remand.
BACKGROUND
The facts of this case have been set forth in the previous
opinions of the court. See Hontex III, 29 CIT at __, 387 F.
Supp. 2d at 1355–57; Hontex Enter., Inc. v. United States, 28
CIT __, __, 342 F. Supp. 2d 1225, 1226–28 (2004) (“Hontex
II”); Hontex Enter., Inc. v. United States, 27 CIT __, __, 248
F. Supp. 2d 1323, 1325–28 (2003) (“Hontex I”). The facts
relevant to the instant remand review are as follows.
Court No. 00-00223 Page 3
On October 29, 1998, Commerce initiated an administrative
review of the antidumping duty order covering crawfish tail
meat from the People’s Republic of China (“PRC”). See
Initiation of Antidumping and Countervailing Duty Admin.
Review, Requests for Revocation in Part and Deferral of Admin.
Review, 63 Fed. Reg. 58,009 (ITA Oct. 29, 1998). During that
review, exporters Ningbo Nanlian Frozen Foods Company (“NNL”)1
and Huaiyin Foreign Trading Company (5) (“HFTC5”) submitted
questionnaire responses. See, e.g., Sec. A Questionnaire Resp.
of [NNL] and La. Packing Co. (“NNL Sec. A Resp.”), Pub. R. Doc.
19 (Dec. 8, 1998); Sec. A Questionnaire Resp. of [HFTC5]
(“HFTC5 Sec. A Resp.”), Pub. R. Doc. 24 (Dec. 22, 1998). In
their responses, both NNL and HFTC5 maintained that they shared
neither managers or owners, nor common control, with other
crawfish tail meat exporters. See NNL Sec. A Resp., Pub. R.
Doc. 19 at 3; HFTC5 Sec. A Resp., Pub. R. Doc. 24 at 4.
Despite this assertion, Commerce determined that a “web of
control relationships [existed] between NNL and HFTC5,” and
that the two entities were affiliated and therefore should be
“collapsed” and treated as a single entity. See Hontex III, 29
CIT at __, 387 F. Supp. 2d at 1355–56 (citing Relationship of
1
It should be noted that a “Mr. Lee” is the part-owner of
NNL. See Verification Report for [NNL] in the Antidumping Duty
Review of Freshwater Crawfish Tail Meat from the PRC, Pub. R. Doc.
188 at 5–10. He has, however, no ownership interest in HFTC5.
Court No. 00-00223 Page 4
[NNL] and [HFTC5], Pub. R. Doc. 218). Based on this finding,
Commerce assigned HFTC5's PRC-wide antidumping duty rate of
201.63% to NNL. Id. Although claiming a “web of control
relationships,” Commerce’s determination was based solely on
the business activities of a “Mr. Wei,”2 who was at various
times an employee of each company. Id.
As a domestic importer of the subject merchandise,
plaintiff Hontex commenced this action challenging aspects of
Commerce’s determinations, including Commerce’s decision to
collapse the companies.3 See generally Hontex I. The matter
was ultimately remanded in Hontex I, and further re-
determinations and remands followed thereafter. See generally
Hontex II, and Hontex III.
In Hontex I, Hontex II, and Hontex III, this court found,
inter alia, that substantial record evidence did not support
Commerce’s determination that NNL and HFTC5 should be
collapsed. See Hontex III, 29 CIT at __, 387 F. Supp. 2d at
2
Also known as “Mr. Wei Wei.”
3
As a domestic importer of the subject merchandise,
Hontex is an “interested party” within the meaning of 19 U.S.C. §
1677(9)(A), and is entitled to challenge Commerce’s determination
pursuant to 19 U.S.C. § 1516(a)(2).
Court No. 00-00223 Page 5
1359; Hontex II, 28 CIT at __, 342 F. Supp. 2d at 1236–37;
Hontex I, 27 CIT at __, 248 F. Supp. 2d at 1343–44. As a
result, the court, in each instance, remanded the matter so
that Commerce might marshal more evidence to support its
conclusion. See Hontex III, 29 CIT at __, 387 F. Supp. 2d at
1361; Hontex II, 28 CIT at __, 342 F. Supp. 2d at 1246; Hontex
I, 27 CIT at __, 248 F. Supp. 2d at 1350.
STANDARD OF REVIEW
When reviewing a final determination in an antidumping or
countervailing duty investigation, “[t]he court shall hold
unlawful any determination, finding, or conclusion found . . .
to be unsupported by substantial evidence on the record, or
otherwise not in accordance with law . . . .” 19 U.S.C. §
1516a(b)(1)(B)(i). “Substantial evidence is ‘such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.’” Huaiyin Foreign Trade Corp. (30) v.
United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
“Substantial evidence is more than a mere scintilla.” Consol.
Edison, 305 U.S. at 229. The existence of substantial evidence
is determined “by considering the record as a whole, including
evidence that supports as well as evidence that ‘fairly
Court No. 00-00223 Page 6
detracts from the substantiality of the evidence.’” Huaiyin,
322 F.3d at 1374 (quoting Atl. Sugar, Ltd. v. United States,
744 F.2d 1556, 1562 (Fed. Cir. 1984)).
DISCUSSION
As noted by the court in Hontex III, the theory in support
of collapsing NNL and HFTC5, to that time, had not been
“entirely clear.” See Hontex III, 29 CIT at __, 387 F. Supp.
2d at 1358. At oral argument, however, counsel for Commerce
explained the Department’s position: “Mr. Wei Wei had the
potential to control both companies and . . . Mr. Wei Wei is an
agent of Mr. Lee. Therefore, if you follow the logic . . . Mr.
Lee would have a potential to control both companies through
Mr. Wei Wei.” Oral Arg. Tr. of 3/30/2005 at 33. Based on this
representation, the court in Hontex III reexamined the evidence
and concluded that nothing on the record indicated that Mr. Wei
was acting as Mr. Lee’s agent at HFTC5.4 See Hontex III, 29
CIT at __, 387 F. Supp. 2d at 1360–61. Specifically, the court
found that:
4
The only evidence of anyone having control over Mr.
Wei’s activities at HFTC5 is that he took orders from an
individual identified solely as HFTC5's “general manager.” There
is no evidence, or even a suggestion, that Mr. Lee was HFTC5's
general manager. See Hontex III, 29 CIT at __, 387 F. Supp. 2d at
1360.
Court No. 00-00223 Page 7
An examination of the record reveals that
there is neither: (1) evidence of Mr. Lee
ever actually exercising control over Mr.
Wei at HFTC5; nor (2) any evidence of Mr.
Lee's potential to control Mr. Wei's
activities at that company. Indeed, while
Commerce provides great detail as to Mr.
Wei's activities on behalf of HFTC5, none
of this evidence links Mr. Lee to Mr. Wei's
activities at that company. See, e.g., NNL
Verification Memo, Pub. R. Doc. 188 at 5-7.
. . . [C]ounsel's comments at oral
argument highlight the flaw in Commerce's
reasoning: there is simply no evidence on
the record of this antidumping review that
Mr. Wei was acting as Mr. Lee's "agent" at
HFTC5. While there is ample evidence that
Mr. Lee was acquainted with Mr. Wei and
that Mr. Wei was working as Mr. Lee's
"agent" at NNL, this evidence does not
support a further inference that Mr. Wei
was working as Mr. Lee's "agent" at HFTC5.
Therefore, substantial evidence does not
support the conclusion that Mr. Lee
"controlled" HFTC5.
Id. at 1360–61.
That being the case, the court remanded the matter to
Commerce with instructions to either:
(1)(a) find that Mr. Lee did not control
HFTC5 within the meaning of 19 U.S.C. §
1677(33)(F) & (G), and (b) find that NNL
and HFTC5 were not affiliated, and (c) find
that NNL and HFTC5 should not be collapsed
and given a single antidumping margin, and
(d) find that NNL is entitled to a separate
company-specific antidumping margin and
calculate that margin using the verified
information on the record; or (2)(a) re-
open the record in order to gather
additional evidence of Mr. Lee’s control
Court No. 00-00223 Page 8
relationship with HFTC5 during the period
of review, and (b) place such additional
information on the record, and (c) conduct
an analysis that takes into account any
such new evidence, including the temporal
aspect of any such new evidence.
Id. at 1361. Thus, Commerce was given the choice of two
courses of action, i.e., either find that the companies were
not affiliated or reopen the record. The Final Results on
Remand, however, demonstrate that it chose neither. Rather,
while Commerce states in its Conclusion, that it has now found
that: (1) Mr. Lee did not control HFTC5; (2) NNL and HFTC5 were
not affiliated and therefore should not be collapsed; and (3)
NNL is entitled to a separate company-specific antidumping
margin, and calculated that margin using the verified record
information, it further states that this determination is made
only “for the purpose of these remand results.” Final Results
on Remand at 2. This statement is followed by extensive
argument justifying its previous conclusion that the companies
should be collapsed. In sum, Commerce argues that collapsing
the companies was authorized because Mr. Wei was an employee of
both companies. This position is, of course, different from
that presented by the Department’s counsel in open court.
Moreover, although Mr. Wei was an employee of NNL, there is no
evidence that he in any way controlled the company since, at
Court No. 00-00223 Page 9
all times, his NNL activities were directed by Mr. Lee.5
As to the nature of the Final Results on Remand, the
course of action adopted by Commerce is simply not in
accordance with this court’s remand instructions. “Neither of
the[] choices on remand permit Commerce to affect to adopt the
court’s conclusions . . . without actually doing so.” Fuyao
Glass Indus. Group Co. v. United States, 30 CIT __, __, slip
op. 06-21 at 7 (Feb. 15, 2006) (not published in the Federal
Supplement); see also Vertex Int’l, Inc. v. United States, 30
CIT __, slip op. 06-35 at 1 (Mar. 8, 2006) (“The Department
must adhere closely to the court’s outstanding orders. Failure
to do so unnecessarily absorbs the time of counsel and the
court, [and] does not promote respect for the rule of law. . .
.”). Therefore, the court finds the Summary and Discussion
sections of the Final Results on Remand are not in accordance
with the remand instructions. As a result, those portions of
the Final Results on Remand are to be stricken.
Nonetheless, as has been demonstrated by the court’s
discussion herein, Commerce’s Conclusion is supported by
5
It is worth noting that Mr. Wei had no ownership
interest in either company.
Court No. 00-00223 Page 10
substantial evidence and otherwise in accordance with law. As
a result, that portion of the Final Results on Remand shall be
affirmed.
JUDGMENT
Therefore, in accordance with the foregoing discussion,
the court hereby: (1) strikes from the Final Results on
Remand the portions labeled “Summary” and “Discussion” as
inconsistent with the remand instructions found in Hontex
III; and (2) affirms Commerce’s Conclusion found in the
Final Results on Remand as being supported by substantial
evidence and otherwise in accordance with law.
/s/ Richard K. Eaton
____________________
Richard K. Eaton
Dated: April 3, 2006
New York, New York