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Commerce's Unfortunate Practice of Limiting Respondents in AD Review Not Illegal, CIT Says

Although the Commerce Department could get a more accurate dumping rate for the non-individually examined respondents in antidumping reviews by selecting more mandatory respondents, it has no legal requirement to do so, the Court of International Trade said in a Dec. 17 opinion. Sustaining Commerce's remand results, Judge Richard Eaton said that the agency properly excluded one of the two mandatory respondents' zero percent dumping rate and merely applied the other respondent's rate to all others in the review. The court also upheld Commerce's selection of surrogate data in the face of the plaintiffs' challenge.

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The opinion comes from a case over the administrative review of the antidumping duty order on freshwater crawfish tail meat from China, covering entries in 2017-2018. In the review, Commerce picked two companies, Hubei Qianjiang and Nanjiang Gemsen International Co., to serve as mandatory respondents. Nanjiang Gemsen, along with Xiping Opeck Food Co., Xuzhou Jinjiang Foodstuffs Co. and Yancheng Hi-King Agriculture Developing Co., constitute the consolidated plaintiffs in the action. In the review, Hubei Qianjiang was assigned a zero percent dumping rate while Nanjiang Gemsen was assigned a 7.92% rate.

To establish the all-others rate, Commerce dropped Hubei Qianjiang's zero percent dumping margin and merely applied Nanjiang Gemsen's rate to all others participating in the review. The plaintiffs challenged this decision, arguing that Commerce failed to calculate an accurate rate for the separate rate companies and that Commerce had a mandate to average the mandatory repsondents' rates.

The court sympathized with the plaintiffs on their first argument, acknowledging that adding more respondents to the review would certainly result in a more accurate rate for all of the other exporters. "There can be little question that, if Commerce were to change its method and name more than two mandatory respondents, separate rate companies would receive more accurate rates, and a great deal of litigation would be avoided," Eaton said. But the government did nothing illegal in this instance, the judge held, "although Plaintiffs’ proposed method of averaging in the zero percent rate might well result in a more accurate all-others rate."

The plaintiffs also challenged an element of Commerce's surrogate data selection, and in particular the subheading used to value the main factor of production in the covered goods. The plaintiffs said that the subheading is too broad and covers other goods other than the main input. But the court found that this "betrays a basic misunderstanding of the workings of the [tariff schedule] and indeed all tariff classification schemes based on the" World Customs Organization's Harmonized Commodity Description and Coding System. Commerce's preferred subheading is not a basket provision but actually an eo nomine provision, making the plaintiffs simply wrong.

(Xiping Opeck Food Co., Ltd., et al. v. United States, Slip Op. 21-169, CIT Consol. #19-00202, dated 12/17/21, Judge Richard Eaton. Attorneys: Yingchao Xiao of Lee & Xiao for plaintiffs; Adams Lee of Harris Bricken for consolidated plaintiff Yancheng Hi-King; Mollie Finnan for defendant U.S. government)