Slip Op. 12- 80
UNITED STATES COURT OF INTERNATIONAL TRADE
JINXIANG HEJIA CO., LTD.,
Plaintiff,
v. Before: Judith M. Barzilay, Senior Judge
UNITED STATES, Court No. 09-00471
Defendant,
and
FRESH GARLIC PRODUCERS
ASSOCIATION, CHRISTOPHER RANCH
L.L.C., THE GARLIC COMPANY, VALLEY
GARLIC, and VESSEY AND COMPANY,
INC.,
Defendant-Intervenors.
[Second remand results sustained.]
June 11, 2012
deKieffer & Horgan (John J. Kenkel, Gregory S. Menegaz, and J. Kevin Horgan), for Plaintiff
Jinxiang Hejia Co., Ltd.
Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director; Reginald T.
Blades, Jr., Assistant Director, Richard P. Schroeder, Trial Counsel, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, George Kivork, Attorney, Office of the Chief
Counsel for Import Administration, U.S. Department of Commerce.
Kelley Drye & Warren LLP (Michael J. Coursey and John M. Herrmann), for Defendant-
Intervenors Fresh Garlic Producers Association, Christopher Ranch L.L.C., The Garlic
Company, Valley Garlic, and Vessey and Company, Inc.
Court No. 09-00471 Page 2
OPINION
BARZILAY, Senior Judge: This case returns to the court following the second remand
ordered in Jinxiang Hejia Co. v. United States, Slip Op. 11-112, 2011 WL 3915675 (CIT Sept. 7,
2011) (“Jinxiang Hejia”).1 In that opinion, the court addressed the normal value the U.S.
Department of Commerce (“Commerce” or “the Department”) calculated for Plaintiff Jinxiang
Hejia Co.’s (“Plaintiff” or “Hejia”) entry of single-clove garlic from the People’s Republic of
China. See Final Results of Redetermination Pursuant to Court Order, No. 09-00471 (Dep’t of
Commerce Jan. 14, 2011) (“First Remand Results”).2 The court sustained the Department’s
conversion to pounds per kilogram of a sales offer – from Indian exporter Sundaram Overseas
Operations (“SOO”) – that it placed on the record for use as surrogate value data. See Jinxiang
Hejia, 2011 WL 3915675, at *6-7. However, the court remanded for further consideration
Commerce’s weight-averaging of the SOO offer (at 50%) and four sales offers for single-clove
garlic that Hejia timely submitted (each at 12.5%). Id. at *9-12. Specifically, the court found
that
Commerce fail[ed] to connect its reasoning regarding the probative nature of the four
sales to the decision to assign them, collectively, 50 percent of the weighted-average.
Nothing inherent in the justifications discussed [in the First Remand Results] would
warrant treating the four offers as one quarter as probative as the SOO offer.
Id. at *11.
Now before the court is Commerce’s second remand determination, issued under protest.
See Final Results of Redetermination Pursuant to Remand, A-570-831 (Dep’t of Commerce Dec.
9, 2011) (“Second Remand Results”). On remand, Commerce removed from its calculation one
1
The court presumes familiarity with the procedural history and background of this case.
2
Commerce issued this first redetermination after the court granted its request for a voluntary
remand. See Jinxiang Hejia Co. v. United States, No. 09-00471 (Oct. 25, 2010) (ordering
remand and denying Rule 56.2 motion).
Court No. 09-00471 Page 3
of the Hejia-submitted sales offers after determining that it originated from Nepal and not India,
the applicable surrogate country. Second Remand Results at 9. Commerce thereafter took a
simple average of the SOO sales offer and the three remaining sales offers that Hejia submitted
and reached a revised dumping margin of zero. Second Remand Results at 8, 13.
Plaintiff does not contest this amended determination. Defendant-Intervenors Fresh
Garlic Producers Association and its individual members, Christopher Ranch LLC, the Garlic
Company, Valley Garlic, and Vessey and Company, Inc. (collectively, “Defendant-
Intervenors”), however, challenge the determination as unsupported by substantial evidence,
arguing that Commerce failed to address the purportedly inferior probative nature of the sales
offers that Hejia placed on the record. The court has jurisdiction pursuant to 28 U.S.C.
§ 1581(c). For the reasons below, the court sustains the Second Remand Results.
I. Standard of Review
The court must sustain a determination by Commerce unless it is “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 constitutes “such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.” Dupont Teijin Films USA, LP v. United
States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). “[T]he possibility of drawing two inconsistent conclusions from the evidence
does not prevent an administrative agency’s finding from being supported by substantial
evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966) (citation omitted). The
court reviews the entire record when reviewing a determination, including anything that “‘fairly
detracts from the substantiality of the evidence.’” Micron Tech., Inc. v. United States, 117 F.3d
1386, 1393 (Fed. Cir. 1997) (citation omitted). Commerce must “articulate a satisfactory
Court No. 09-00471 Page 4
explanation for its action including a rational connection between the facts found and the choice
made.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Ins. Co., 463 U.S. 29, 43
(1983) (citation and quotation marks omitted).
II. Discussion
“The process of constructing foreign market value for a producer in a non-market
economy country is difficult and necessarily imprecise.” Shakeproof Assembly Components,
Div. of Ill. Tool Works, Inc. v. United States, 268 F.3d 1376, 1381 (Fed. Cir. 2001) (citation
omitted). Typically, Commerce calculates “the normal value of the subject merchandise on the
basis of the value of the factors of production” using the “best available information.” 19 U.S.C.
§ 1677b(c)(1)(B). If factors of production data prove inadequate, however, Commerce
determines normal value based upon the price of “comparable . . . merchandise . . . produced in
one or more market economy countries that are at a level of economic development comparable
to that of the non-market economy country.” § 1677b(c)(2). “When there are no better
alternatives, however, Commerce may use price quotes.” Vinh Quang Fisheries Corp. v. United
States, 33 CIT __, ___, 637 F. Supp. 2d 1352, 1358 (2009).
Resurrecting arguments addressed in Jinxiang Hejia, Defendant-Intervenors contend that
Commerce failed to account for the inferiority of the offers Hejia submitted when compared with
other data on the record. First, Defendant-Intervenors note that these three offer prices are far
lower than those on record for actual sales of single-clove garlic in Japan, Germany, and Great
Britain. Def.-Intervenor’s Br. 5-7. Defendant-Intervenors conclude that they are thus less
probative of the normal value of single-clove garlic and should not be afforded equal weight as
the SOO offer in the averaging. Def.-Intervenor’s Br. 5-7.
Court No. 09-00471 Page 5
In the First Remand Results, Commerce relied on the same contrast to justify assigning
the Hejia-submitted offers less weight. See Jinxiang Hejia, 2011 WL 3915675, at *9-10. The
court rejected the utility of this unadorned reasoning, however, absent any explanation of how
prices in these disparate markets would reflect on surrogate value data from India. Id. at *10.
More importantly, as noted, the court found that none of Commerce’s reasoning, as articulated,
supported the particular weighted-average it used. Id. at *11. On remand, Commerce has
chosen to abandon this methodology rather than more fully explain how the comparison justifies
the previous weighted-average, see Second Remand Results at 12, and it is not the court’s role to
question this decision. Defendant-Intervenors have failed to demonstrate that the Japanese,
German, and British prices for single-clove garlic – which are higher than the SOO offer as well
and themselves differ greatly, Def.-Intervenor’s Br. 4 – render the methodology in the Second
Remand Results unreasonable.
Defendant-Intervenors next argue that the inferiority of the sales offers Hejia submitted is
evident given their low price compared to the surrogate value prices Commerce calculated for
the more common multi-clove garlic. Def.-Intervenor’s Br. 7-9. Defendant-Intervenors note that
Hejia itself argued at the administrative level that single-clove garlic demands a higher price as it
is a specialty product. Def.-Intervenor’s Br. 8, 11. The court previously found that, while this
contrast was noticeable, Commerce failed to demonstrate how it supported the weighted-average.
See Jinxiang Hejia, 2011 WL 3915675, at *10. If Commerce had provided a more complete
explanation in the Second Remand Results, this comparison might indeed have justified treating
the Hejia offers with less (or even no) weight in the surrogate valuation. Commerce opted not to,
however, and the court did not, nor could it, restrict Commerce on remand merely to explaining
the methodology it used in the First Remand Results. Faced with a limited record of four usable
Court No. 09-00471 Page 6
sales offers for single-clove garlic, Commerce relied on a simple average of these imperfect data
to calculate surrogate value – a reasonable approach given the record as a whole.
Finally, Defendant-Intervenors argue that the Second Remand Results fail to account for
the fact that the Hejia sales offers are lower than the SOO offer that Commerce placed on the
record. Def.-Intervenor’s Br. 9. As Commerce aptly puts it, however, “this argument begs the
question.” Def.’s Resp. 5. One could just as easily ask why the SOO offer is priced so much
higher than the other Indian sales offers for single-clove garlic.
The issue before the court is not, as Defendant-Intervenors suggest, whether Commerce
could have adequately supported the weighted-average used in the First Remand Results or
whether it could have otherwise treated the Hejia-submitted offers with less weight in the
surrogate valuation. Instead, the court must ask whether it was reasonable for Commerce to do
what it did – use a simple average of the four sales offers. It was. Commerce was presented
with two sets of imperfect data, the SOO offer and the three usable sales offers that Hejia
submitted. Neither contained prices from actual transactions and neither was contemporaneous
with the period of review. Second Remand Results at 13. The court’s opinion in Jinxiang Hejia
reflected the requirement that Commerce provide a rational explanation linking the available data
to its chosen methodology. See Motor Vehicle Mfrs. Ass’n of the U.S., Inc., 463 U.S. at 43;
Timken U.S. Corp. v. United States, 421 F.3d 1350, 1355 (Fed. Cir. 2005) (“[I]t is well settled
that an agency must explain its action with sufficient clarity to permit ‘effective judicial
review.’” (citation omitted)). It did not, however, limit the broad discretion the agency retains
when calculating surrogate value, particularly when confronted with limited data. Defendant-
Intervenors fail to show that Commerce exceeded this discretion.
Court No. 09-00471 Page 7
III. Conclusion
For the foregoing reasons, the Second Remand Results are therefore sustained. The
court will enter judgment accordingly.
Dated: June 11, 2012 /s/ Judith M. Barzilay
New York, NY Judith M. Barzilay, Senior Judge