                                           Slip Op. 13-127

                 UNITED STATES COURT OF INTERNATIONAL TRADE



CHANGZHOU WUJIN FINE CHEMICAL
FACTORY CO., LTD., and JIANGSU
JIANGHAI CHEMICAL GROUP, LTD.,

                   Plaintiffs,                       Before: Judith M. Barzilay, Senior Judge

                   v.                                Consol. Court No. 09-00216

UNITED STATES,                                       Public Version

                  Defendant,
       and

COMPASS CHEMICAL
INTERNATIONAL, LLC,

                   Defendant-Intervenor.


                                           OPINION

[Commerce’s Remand Redetermination is sustained.]

                                                                          October 2, 2013

Riggle & Craven (David J. Craven), for Plaintiffs.

Stuart F. Delery, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M.
McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice (Antonia R. Soares); Whitney Rolig, Attorney-International, Of Counsel,
Office of the Chief Counsel for Import Administration, United States Department of Commerce,
for Defendant.

Levin Trade Law, P.C. (Jeffrey S. Levin), for Defendant-Intervenor.


       BARZILAY, Senior Judge: This case returns to the court following a remand to the U.S.

Department of Commerce (“Commerce”) for further proceedings in accordance with the Federal
Consol. Court No. 09-00216                                                                    Page 2


Circuit’s decision in Changzhou Wujin Fine Chemical Factory Co. v. United States, 701 F.3d

1367 (Fed. Cir. 2012) (“Changzhou”).1 The Federal Circuit instructed Commerce to reconsider

its approach in calculating the separate rate assigned to Plaintiff Jiangsu Jianghai Chemical

Group, Ltd. (“Jiangsu”).2 On remand, Commerce changed its approach by abandoning the

simple average methodology from the investigation3 and adopting a different methodology that

relied on inferences about Kewei’s (an uncooperative respondent) actual dumping margin to

conclude that Jiangsu’s rate would have been above de minimis. See Final Results of

Redetermination Pursuant to Court Order, Docket Entry No. 81 (May 13, 2013) (“Remand

Redetermination”). Commerce, however, did not calculate a specific rate for Jiangsu because it

concluded that doing so would have been an unnecessary expenditure of administrative resources

given that the entries covered by the underlying investigation have already been liquidated.

Jiangsu claims that the Remand Redetermination does not comply with the Federal Circuit’s

remand instructions. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). For the reasons

set forth below, Commerce’s Remand Redetermination is sustained.

                                 I. STANDARD OF REVIEW

         When reviewing Commerce’s antidumping determinations under 19 U.S.C. §

1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c), the U.S. Court of International Trade sustains

1
 Familiarity with the administrative and procedural history of this case is presumed. See 1-
Hydroxyethylidene-1, 1-Diphosphonic Acid from the People's Republic of China: Final
Determination of Sales at Less Than Fair Value, 74 Fed.Reg. 10,545 (Dep’t Commerce Mar. 11,
2009); Changzhou Wujin Fine Chemical Factory Co., Ltd. v. United States, No. 09-00216, 2010
WL 3239213 (CIT Aug. 5, 2010); Changzhou, 701 F.3d 1367.
2
    Changzhou Wujin Fine Chemical Factory Co. (“Changzhou”) did not participate in the appeal.
3
 In the investigation there were two mandatory respondents, Changzhou Kewei Fine Chemical
Factory (“Kewei”) and Nanjing University of Chemical Technology Changzhou Wujin Water
Quality Stabilizer Factory Ltd. (“Wujin Water”). The separate rate respondents were Jiangsu
and Changzhou.
Consol. Court No. 09-00216                                                                     Page 3


Commerce‘s “determinations, findings, or conclusions” 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). More specifically, when reviewing agency determinations, findings, or

conclusions for substantial evidence, the court assesses whether the agency action is “reasonable

and supported by the record as a whole.” Nippon Steel Corp. v. United States, 458 F.3d 1345,

1352 (Fed. Cir. 2006) (internal quotations and citation omitted). Substantial evidence has been

described as “such relevant evidence as a reasonable mind might accept as adequate to support a

conclusion.” Dupont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005)

(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Substantial evidence has also

been described as “something less than the weight of the evidence, and the 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).

       Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 842-45 (1984), governs judicial review of Commerce’s

interpretation of the antidumping statute. See United States v. Eurodif S.A., 555 U.S. 305, 316

(2009) (Commerce’s “interpretation governs in the absence of unambiguous statutory language

to the contrary or unreasonable resolution of language that is ambiguous.”).

                                        II. DISCUSSION

        In calculating a separate rate for non-individually investigated respondents in non-

market economy investigations, Commerce normally relies on 19 U.S.C. § 1673d(c)(5), which

defines the all-others rate used in market economy investigations. See Bristol Metals L.P. v.

United States, 34 CIT __, __, 703 F.Supp.2d 1370, 1378 (2010) (citation omitted). The statute
Consol. Court No. 09-00216                                                                      Page 4


instructs Commerce to weight-average the rates calculated for the investigated parties, excluding

de minimis or zero rates and excluding rates based on facts available, to determine the separate

rate. 19 U.S.C. § 1673d(c)(5)(A). However, “[i]f the estimated weighted average dumping

margins established for all exporters and producers individually investigated are zero or de

minimis margins, or are determined entirely [on the basis of facts available], the administering

authority may use any reasonable method to establish the estimated all-others rate for exporters

and producers not individually investigated, including averaging the estimated weighted average

dumping margins determined for the exporters and producers individually investigated.” §

1673d(c)(5)(B). The Statement of Administrative Action provides that the “expected method in

such cases will be to weight-average the zero and de minimis margins and margins determined

pursuant to the facts available, provided that volume data is available.” Uruguay Round

Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103–316, vol. 1, at 873

(1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4201. It goes on to state that “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, Commerce may use other

reasonable methods.” Id.

       In this case, Commerce originally calculated the separate rate by taking a simple average

of the rates assigned to the two mandatory respondents. One mandatory respondent (Wujin

Water) received a de minimis rate (0%) and the other mandatory respondent (Kewei) failed to

cooperate and received a rate based on total adverse facts available (72.42%). This yielded a

separate rate of 36.21%, which Commerce assigned to the separate rate respondents (Jiangsu and

Changzhou). They appealed Commerce’s separate rate determination to this court. During the

course of the litigation, Commerce took a voluntary remand to address (among other things)
Consol. Court No. 09-00216                                                                  Page 5


whether its original AFA rate had been corroborated. Commerce concluded that the 72.42%

AFA rate had not been corroborated and elected to calculate a second AFA rate of 30.94% using

data that did not require corroboration. Importantly, Commerce calculated the second AFA rate

for the sole purpose of establishing a new separate rate for Jiangsu and Changzhou. Commerce,

therefore, did not calculate the second AFA rate to replace the original rate assigned to Kewei.

Kewei did not challenge the 72.42% AFA rate that it received. Commerce then applied the same

methodology, taking the simple average of the 0% de minimis rate and the 30.94% substitute

AFA rate, to arrive at a new separate rate of 15.47%. Although this court sustained Commerce’s

separate rate calculation, Jiangsu appealed that decision, and the Federal Circuit reversed and, as

previously stated, remanded the issue to Commerce.

        The Federal Circuit concluded that Commerce’s separate rate calculation was arbitrary.

It stated that “while administrative convenience might support averaging previously-determined,

previously corroborated rates assigned to mandatory respondents, including AFA respondents if

there are no alternatives, see 19 U.S.C. § 1673d(c)(5)(B), such a justification can hardly support

Commerce’s choice to calculate a hypothetical ‘AFA rate’ for use solely as a ‘substitute’ rate

that will not be assigned to any mandatory respondent.” Changzou, 701 F.3d at 1379. The

Federal Circuit concluded that it was unreasonable to derive a separate rate, which would be

applied only to (cooperative) separate rate respondents, from data that was “cherry picked” to

deter non-compliance. Id. The Federal Circuit provided the following remand instructions:

               For the foregoing reasons, we . . . reverse in part, and remand to
       Commerce to once again reconsider its approach to calculating the appellant's
       separate rate. In doing so, Commerce must act non-arbitrarily and must explain
       why its approach is a “reasonable method” of calculating a separate rate, in light
       of the alternatives available, and with recognition of the fact that the remand
       calculation will affect only cooperating respondents.

Id.
Consol. Court No. 09-00216                                                                  Page 6


      On remand, Commerce provided the following explanation:

               In accordance with the CAFC’s decision and the instructions in the
      remand order, the Department reconsidered its approach to calculating the
      separate rate assigned to Jiangsu Jianghai in the First Remand Results. After
      reexamining the dumping margins of the exporters/producers that were
      individually investigated, the Department finds that: (1) one mandatory
      respondent (i.e., Nanjing University of Chemical Technology Changzhou Wujin
      Water Quality Stabilizer Factory Ltd. had a zero percent dumping margin during
      the period of investigation (“POI”), and (2) the other mandatory respondent (i.e.,
      Changzhou Kewei Fine Chemical Co., Ltd. was assigned a dumping margin based
      entirely on adverse facts available, but it may be reasonably inferred from its
      failure to cooperate that Kewei’s own information would not have shown that
      Kewei’s actual margin of dumping was zero or de minimis. Accordingly, even in
      the absence of considering deterrence of non-cooperation as a factor in
      determining Kewei’s dumping margin, the Department reasonably infers that
      Kewei’s own information, withheld from the Department, would have shown that
      a dumping margin greater than de minimis exists for Kewei during the POI.
               On the basis of this reasonable inference, the Department determines that
      had Kewei cooperated by providing its information, the dumping margins of the
      individually investigated respondents would not have been all zero, de minimis, or
      based entirely on AFA. Therefore, the Department determines that a reasonable
      method of establishing Jiangsu Jianghai's separate rate for the POI is to apply the
      separate rate calculation methodology preferred in the statute, as provided in
      section 735(c)(5)(A) of the Tariff Act of 1930, as amended, with the reasonable
      inference that Kewei’s dumping margin is above de minimis for this purpose. As a
      result, the Department concludes that Jiangsu Jianghai’s separate rate for the POI
      was above de minimis. Further, given that any separate rate above de minimis
      would not apply to any entries of Jiangsu Jianghai’s 1-hydroxyethylidene-1, 1-
      diphosphonic acid ("HEDP"), it would be an unnecessary waste of administrative
      and judicial resources to proceed with the additional resource-intensive
      calculations needed to further specify Jiangsu Jianghai's separate rate.
               ....
               Further, for the two reasons below, the Department disagrees with Jiangsu
      Jianghai's claim that the record evidence in this case compels a finding that
      Kewei' s actual dumping margin for the POI was zero percent. First, Jiangsu
      Jianghai's observation that Kewei's rate would be zero percent if it were
      calculated using the sales and production information on the record is misleading
      because Kewei' s lack of cooperation left the record void of the company-specific
      data necessary to calculate Kewei' s actual dumping margin. Because it does not
      have Kewei's actual, verified sales and production data for the POI, Jiangsu
      Jianghai must rely on data belonging to companies other than Kewei (e.g., Wujin
      Water's weighted-average NV) and Kewei's unverified quantity and value
      information in order to support its claim that Kewei's margin would have been
      zero percent during the POI. Jiangsu Jianghai fails to explain why either Kewei 's
      unverified quantity and value data or data belonging to companies other than
Consol. Court No. 09-00216                                                                    Page 7


       Kewei are in any way indicative of Kewei's actual sales and production data for
       the POI, particularly given the reasonable inference that Kewei made a rational
       decision not to submit its own sales and production data because a margin
       calculation based on this information would not produce a zero or de minimis rate.
       Second, Jiangsu Jianghai has identified no evidence that would dissuade the
       Department from reasonably inferring that Kewei made a rational decision, based
       on its knowledge of its own sales and production data during the POI, that it was
       not capable of obtaining a zero percent or de minimis rate. As explained above,
       the CAFC has confirmed that the Department may reasonably presume that a
       respondent will make a knowing and rational decision whether to respond to the
       Department's questionnaires, based on which choice will result in the lower rate.
       Jiangsu Jianghai provides no evidence that effectively rebuts this presumption or
       supports its speculation that Kewei stopped participating in the investigation
       because it either misjudged the surrogate values that would be applied or
       underestimated the value of participating. Indeed, even if Kewei had stated that it
       believed it was entitled to a zero percent or de minimis rate despite its withdrawal
       from the proceeding, such a statement is not a basis upon which the Department
       could make findings about Kewei's actual dumping margin, and Kewei's failure to
       respond to the Department's questionnaires at all does not undermine the
       Department's reasonable inference that the most important factor in that decision
       was Kewei' s knowledge of its sales and production data. Furthermore, even if the
       timing of Kewei' s withdrawal were relevant, the record does not support Jiangsu
       Jianghai 's suggestion that the withdrawal was contingent on Kewei 's predictions
       regarding the selection of the surrogate country and surrogate values because
       Kewei stopped participating prior to a June 20, 2008 questionnaire response
       deadline- i.e., before July 1, 2008, when comments on surrogate country selection
       and surrogate value submissions were originally due and when Kewei would have
       had a clearer picture regarding surrogate country selection and surrogate values.

Remand Results at 2, 20-21.

       Accordingly, Commerce has outlined a different approach for calculating a separate rate

for Jiangsu. Commerce has drawn an inference that Kewei would have received an above de

minimis4 dumping margin had it participated in the investigation. Commerce claims that

drawing such an inference is reasonable because Kewei’s lack of participation suggests that it

was dumping merchandise and therefore would have been assigned a dumping margin greater

than de minimis. See Remand Results at 6 (citing Laminated Woven Sacks From the People's

Republic of China: Final Results of First Antidumping Dutv Administrative Review, 76 Fed. Reg.
4
 A de minimis dumping margin is defined as less than 2% ad valorem. See 19 U.S.C. §
1673b(b)(3).
Consol. Court No. 09-00216                                                                       Page 8


14,906, 14,910 (Dep’t Commerce Mar. 18, 2011) (citing Rhone Poulenc, Inc. v. United States,

899 F.2d 1185, 1190-92 (Fed. Cir. 1990)). Commerce explains that this approach excludes any

inferences based on AFA (i.e., a built in increase to deter non-compliance), and simply assumes

that Kewei’s lack of cooperation indicates that it did not deserve a 0% rate and would have been

assigned antidumping duties higher than de minimis. The individual dumping margin assigned to

Kewei would then be designated the separate rate and assigned to Jiangsu. Under this approach,

therefore, the separate rate is not derived from AFA or de minimis rates. Commerce stated that

“[p]ursuant to section 735(c)(5)(A) of the Act, when only one dumping margin for the

individually investigated respondents is above de minimis and not based on AFA, the separate

rate will be equal to that single above de minimis rate. Accordingly, if Kewei had chosen to

cooperate, its above de minimis rate would have been assigned to [Jiangsu] as a separate rate in

the Final Determination.” Remand Redetermination at 8-9. Commerce contends that this

approach constitutes a “reasonable method” of calculating a separate rate for Jiangsu.5

        As far as an actual rate, Commerce has concluded that it is unnecessary to calculate a

specific rate for Jiangsu because the entries covered by the separate rate have already been

liquidated. Section 1673e(b)(2) provides that “[i]f the Commission, . . . finds threat of material

injury, . . . then subject merchandise which is entered, . . . on or after the date of publication of

notice of an affirmative determination of the Commission . . . shall be subject to the assessment

of antidumping duties . . . , and the administering authority shall . . . refund any cash deposit

made, to secure the payment of antidumping duties with respect to entries of the merchandise

entered, . . . before that date. 19 U.S.C. § 1673e(b)(2).
5
  The net effect of assigning Jiangsu an above de minimis rate is that Jiangsu remains subject to
the antidumping duty order covering 1-Hydroxyethylidene-1, 1-Diphosphonic Acid from the
People’s Republic of China. A de minimis rate, on the other hand, would permit Jiangsu to be
excluded from the order.
Consol. Court No. 09-00216                                                                  Page 9


       The ITC found a threat of material injury in the investigation and published its final

determination on April 23, 2009. See 1-Hydroxyethylidene-1,1-Diphosphonic Acid (HEDP)

From China and India, 74 Fed. Reg. 18,593 (ITC Apr. 23, 2009) (final results). Commerce, in

turn, ordered Customs to collect cash deposits from Jiangsu (beginning on April 23, 2009) in an

amount equal to the antidumping duty rates established in the investigation. See 1-

Hydroxyethylidene-1, 1-Diphosphonic Acid from India and the People's Republic of China:

Antidumping Duty Orders, 74 Fed. Reg. 19,197 (Dep’t Commerce Apr. 28, 2009). That rate was

36.21% (the separate rate), which remained in effect during this court proceeding, but changed

when Commerce completed the first administrative review of the antidumping order on August

8, 2011. See 1-Hydroxyethylidene-1, 1-Diphosphonic Acid From the People's Republic of China:

Final Results of Antidumping Duty Administrative Review and Final Rescission in Part, 76 Fed.

Reg. 48,142 (Dep’t Commerce Aug. 8, 2011). In the administrative review, Commerce selected

Jiangsu as a mandatory respondent, concluded that it was not free from government control, and

assigned Jiangsu the China-wide rate of 72.42%. The China-wide rate established in the first

administrative review replaced the separate rate (cash deposit rate) assigned to Jiangsu in the

investigation. Because Jiangsu did not appeal the rate that it was assigned in the first

administrative review, there was no court ordered injunction suspending liquidation of its entries.

       Commerce, therefore, ordered Customs to liquidate Jiangsu’s entries made between April

23, 2009 (ITC’s final determination) and March 31, 2010 (end of first review) at the rate

established in the first administrative review. See Message from Michael B. Walsh, Director,

AD/CVD & Revenue Policy & Programs, to Directors of Field Operations, Port Directors,

Liquidation Instructions for 1-Hydroxyethylidene-1, 1-Diphosphonic Acid from the PRC

Exported by the PRC-Wide Entity for the Period 04/23/2009 through 03/31/2010 (A-570-934)
Consol. Court No. 09-00216                                                                     Page 10


(August 25, 2011), available at http://addcvd.cbp.gov/detail.asp?docID=1237303&qu= (last

visited October 2, 2013). Entries made prior to April 23, 2009 were not subject to antidumping

duties. See 19 U.S.C. § 1673e(b)(2). On remand, Commerce observed that the separate rate

would not apply to Jiangsu’s existing entries because they had already been liquidated.

Commerce therefore concluded that it would be a waste of administrative resources to calculate a

specific rate for Jiangsu given that its entries would not benefit from an alternative rate.

       Jiangsu, for its part, claims that Commerce’s Remand Redetermination does not comply

with the remand instructions provided by the Federal Circuit. More specifically, Jiangsu argues

that Commerce’s “’assumption’ that Kewei would not have received a rate of zero or de minimis

is unsupported by the facts of record.” Pl.’s Comments 2. Jiangsu suggests that it is

unreasonable to infer that Kewei failed to cooperate because it “knew” that it would receive an

above de minimis rate. Pl.’s Comments 2. Jiangsu also claims that there is sufficient data on the

record to calculate a specific rate. It argues Commerce’s rationale for not calculating a specific

rate is barred by res judicata. Pl.’s Comments 2-3. The court disagrees.

       Commerce has articulated an alternative approach (methodology) for calculating

Jiangsu’s separate rate. In the investigation, Commerce took the simple average of the

mandatory respondents’ de minimis and AFA rates to derive a separate rate. On remand, though,

Commerce has abandoned the simple average methodology and has instead drawn an inference

that Kewei would have been assigned a dumping margin greater than de minimis had it

participated in the investigation; that individual rate would then be passed on to Jiangsu as the

separate rate. This alternative approach relies on drawing an inference about Kewei’s actual

dumping margin to derive a separate rate.
Consol. Court No. 09-00216                                                                  Page 11


       Drawing such an inference is reasonable because it is logical to assume that Kewei would

have participated in the investigation if it could have proved that it deserved a 0% or de minimis

dumping margin. The cases cited by Commerce, which mostly involve application of AFA, do

provide support for the common sense inference 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.” Tanjin Mach. Import & Export Corp. v. United States, 35

CIT __, __, 752 F. Supp. 2d 1336, 1347 (2011). It is well understood that failing to cooperate in

an antidumping investigation gives Commerce the discretion to draw certain inferences about the

uncooperative respondent’s pricing practices. See id. That is what Commerce did here.

Commerce concluded that Kewei’s failure to participate implied that it was dumping

merchandise and would have been assigned an actual rate. This, though, is separate and distinct

from an adverse inference in which Commerce selects a rate sufficiently adverse to deter non-

compliance. See, e.g., De Cecco Di Filippo Fara S. Martino S.p.A v. United States, 216 F.3d

1027, 1032 (Fed. Cir. 2000). The separate rate calculation in this case would only reflect the

individual rate assigned to Kewei. It would not reflect a built in increase to deter non-

compliance. Applying Kewei’s above de minimis rate to Jiangsu is contemplated in the statute

and preferred over deriving a separate rate from only de minimis and AFA rates. See 19 U.S.C. §

1673d(c)(5).

       Jiangsu, however, claims that Commerce’s inference about Kewei’s dumping margin is

unreasonable given the record. Pl.’s Comments 2. For example, Jiangsu claims that Kewei likely

misjudged its potential dumping margin because of the surrogate values used to calculate normal

value in this case. Pl.’s Comments 5-8. The surrogate data yielded a normal value significantly

less than the normal value in the petition. According to Jiangsu, Kewei likely would have
Consol. Court No. 09-00216                                                                  Page 12


received a de minimis rate had it participated because normal value turned out to be [[           ]]

of the normal value in the petition. Pl.’s Comments 6. Jiangsu cites data from the investigation

indicating that the dumping margins in this case were much narrower than anticipated. Pl.’s

Comments 3-4. Jiangsu suggests that this misjudgment about normal value at the beginning of

the investigation contributed to Kewei’s decision not to participate. Pl.’s Comments 6.

Commerce reasonably rejected these arguments.

       To reach the conclusion suggested by Jiangsu, the court must draw several questionable

inferences. First Jiangsu asks the court to draw its own inferences about Kewei’s lack of

participation and then, in addition, draw a second inference about Kewei’s actual dumping

margin from data of limited probative value. For example, Jiangsu claims that Kewei’s AUV

data combined with Wujin Water’s normal value produces a negative margin, which

demonstrates that Kewei would likely have been assigned a 0% dumping margin. The court,

though, does not have much confidence that this data reflects Kewei’s actual pricing practices.

Kewei’s AUV data is unverified and Wujin Water is a completely different company. The court

cannot reasonably infer that Kewei would have been assigned a 0% dumping margin on the basis

of this data. As a result, Jiangsu is not entitled to a 0% rate under this methodology. Similarly,

Jiangsu also argues that “[t]he data of record supports the proposition that had the [separate rate]

respondents submitted full responses, the [separate rate] respondents would have received a rate

well below de minimis.” Pl.’s Comments 7. Again, the court cannot reasonably infer that

separate rate respondents would have all received 0% dumping margins on the basis of their

unverified AUV data and Wujin Water’s normal value. There is just not enough data to support

that conclusion.
Consol. Court No. 09-00216                                                                   Page 13


       At the investigation stage of an antidumping proceeding Commerce relies on the

participation of the mandatory respondents to establish the administrative record. It is black

letter law that “the burden of creating an adequate record lies with [interested parties] and not

with Commerce.” QVD Food Co., Ltd. v. United States, 658 F.3d 1318, 1324 (Fed. Cir. 2011)

(internal quotations and citation omitted). Where, as here, one mandatory respondent

participates (and receives a de minimis rate) and the other fails to participate (and receives a rate

based on AFA), Commerce is left with very little pricing data to calculate a separate rate. In

those situations Commerce essentially has one substantiated dumping margin (de minimis) and

the remainder is Q&V data. That is what happened here and, more recently, in Bestpak. See

Yangzhou Bestpak Gifts & Crafts Co., Ltd. v. United States, 716 F.3d 1370, 1378-79 (Fed. Cir.

2013). Part of the problem may be due to Commerce’s selection of only two mandatory

respondents under 19 U.S.C. § 1677f-1(c)(2). See Bestpak, 716 F.3d at 1379 (“Even the Court of

International Trade noted that ‘Commerce put itself in a precarious situation when it selected

only two mandatory respondents.’”) (quoting Yangzhou Bestpak Gifts & Crafts Co., Ltd. v.

United States, 35 CIT __, __, 783 F.Supp.2d 1343, 1351 n.4 (2011). Jiangsu never raised that

issue in this proceeding.

       Although it is unfortunate that Jiangsu and other separate rate respondents face negative

consequences as a result of Commerce’s choice, this situation does not support the claim of

respondents, such as Jiangsu, that they are entitled to a 0% dumping margin on the basis of

unverified Q&V data and non-company specific normal values. Here, the court cannot reject

Commerce’s chosen approach for calculating Jiangsu’s separate rate, which is based on a

common sense inference about the pricing practices of uncooperative respondents, in favor of

Jiangsu’s approach, which requires the court to draw favorable, though questionable, inferences
Consol. Court No. 09-00216                                                                   Page 14


about its pricing practices from limited data. The Federal Circuit concluded that it was arbitrary

for Commerce to calculate a hypothetical AFA rate (with a built in increase to deter non-

compliance) solely for the purpose of calculating and assigning a separate rate to Jiangsu (a

cooperative separate rate respondent). Commerce has addressed that issue and articulated an

alternative approach to calculating a separate rate that does not involve AFA. Commerce’s new

approach assumes that Kewei would have been assigned a dumping margin above de minimis

had it participated in the investigation. That rate would also serve as the separate rate. This is a

reasonable approach given the limitations of the record.

       Another alternative would have been for Commerce to calculate a specific rate for

Jiangsu but Commerce has provided a legitimate explanation for not undertaking that process.

None of Jiangsu’s entries can benefit from the separate rate in this case. Those entries have

already been liquidated at the rate established in the first administrative review. In the Remand

Redetermination, Commerce suggests that it might have been forced to collect and verify

additional information to calculate a specific rate for Jiangsu, and that doing so would be a waste

of administrative resources given that the separate rate will not apply to the subject entries. See

id. at 11. The court agrees. Considering that the entries have already been liquidated,

calculating a specific rate for Jiangsu is not necessary. Jiangsu claims that Commerce should

have raised this issue earlier and cannot skip the actual calculation because doing so is barred by

res judicata. “For a prior judgment to bind a party as res judicata, however, the judgment must

have been a final one.” See Koyo Seiko Co., Ltd. v. United States, 95 F.3d 1094, 1097 (Fed. Cir.

1996). The Federal Circuit’s decision was not a final judgment but rather a decision remanding

the case to Commerce to reconsider its approach in calculating Jiangsu’s separate rate. See

Changzhou, 701 F.3d at 1379. After establishing an alternative approach, Commerce reasonably
Consol. Court No. 09-00216                                                                   Page 15


concluded that it was unnecessary to calculate a specific rate for Jiangsu because the subject

entries had already been liquidated. The court is persuaded that the doctrine of res judicata does

not apply here.

       Jiangsu, moreover, has not articulated why Commerce must calculate a specific rate other

than general references to the Federal Circuit’s remand instructions. In the court’s view, the

Federal Circuit’s remand instructions ordered Commerce to consider a different approach for

calculating a separate rate, which Commerce did. The instructions, however, did not order

Commerce to calculate a specific rate. There is no good reason to issue another remand ordering

Commerce to calculate a specific rate when Jiangsu’s entries have already been liquidated.

Although it is possible that a specific rate might serve some purpose in a future review, an

argument raised by Jiangsu on remand, see Remand Redetermination at 22, Jiangsu did not raise

that argument in its comments before this court. The court will therefore treat the issue as

waived. Accordingly, Commerce’s chosen methodology for calculating Jiangsu’s separate rate

is a reasonable choice (i.e., not arbitrary) given the limited options presented by the record.

                                       III. CONCLUSION

       For the foregoing reasons, Commerce’s Remand Redetermination is sustained. Judgment

will be entered accordingly.



Dated: October 2, 2013                                                /s/ Judith M. Barzilay
       New York, NY                                            Judith M. Barzilay, Senior Judge
