FEDERAL APPEALS COURT REJECTS VIETNAMESE EXPORTER’S DUTY RATE CHALLENGE

Today, the U.S. Court of Appeals for the Federal Circuit issued a decision rejecting Viet I-Mei Frozen Food Co.’s (Viet I-Mei) challenge of the 25.76% antidumping duty assessed on its shipments of shrimp to the United States for the fourth administrative review period.

 

The administrative review covered shrimp import entries made between February 1, 2008 and January 31, 2009.  In the administrative proceeding, Viet I-Mei refused to provide the U.S. Department of Commerce with information in response to questions raised by the agency.  Because of the refusal to participate, Commerce assigned Viet I-Mei a 25.76% antidumping duty assessment rate.

 

Viet I-Mei appealed Commerce’s decision, arguing that the agency should have allowed the foreign exporter to withdraw its request for individual examination and should have granted the company the antidumping duty assessment rate given to all non-individually-reviewed exporters that were able to establish independence from the government of Vietnam.  After the Court of International Trade held that Commerce had acted lawfully and reasonably in assigning a 25.76% antidumping duty assessment rate, Viet I-Mei appealed that court decision to the Court of Appeals for the Federal Circuit.

 

The Ad Hoc Shrimp Trade Action Committee (AHSTAC) participated in the appeal and represented the domestic shrimp industry at oral argument before the Court of Appeals for the Federal Circuit earlier this summer in defense of the agency’s actions.  Viet I-Mei argued that the company no longer wished to participate in the administrative review proceeding because of changes in the company’s ownership.  In response, AHSTAC argued that other developments were more likely to be the basis for Viet I-Mei’s refusal to participate.  The Court of Appeals, referring to Viet I-Mei by its former name “Grobest” and AHSTAC as “Domestic Producers,” discussed the two different positions in its unanimous opinion:

 

Grobest requested that Commerce reconsider its conclusions in the Reconducted Preliminary Results.  Grobest first argued that Commerce should rescind the reconducted review because the CIT’s Final Judgment should not be considered binding on Commerce and Grobest filed a request to withdraw within the 90-day time period pursuant to 19 C.F.R. § 351.213(d)(1).  Grobest went on to argue that it would not gain any undue or unfair advantage if it withdrew its voluntary respondent request.  The Domestic Producers, in turn, presented a different explanation for Grobest’s new position.  They argued that Grobest’s decision to withdraw was driven by a desire to avoid disclosing its affiliation with companies recently found to have committed material misrepresentations in connection with efforts to evade antidumping duties on warmwater shrimp from Vietnam and China.  They then urged that Grobest’s “[a]voidance of [Commerce’s] affiliation inquiry should be given weight in interpreting and evaluating Grobest’s explanation for declining to further participate in a proceeding that it requested.” . . . .  The Domestic Producers concluded that “the respondent’s own actions led directly to it being preliminarily assigned the 25.76% Vietnam-wide rate as AFA.”. . . .

 

We need not reach the issue of whether Commerce was in fact bound as a matter of law by the Final Judgment or the Domestic Producers’ objection (which the CIT also chose not to address) because we disagree with Grobest’s characterization of Commerce’s justifications for denying Grobest’s request to rescind the individual review.   Contrary to Grobest’s allegation, Commerce explained in the Reconducted Preliminary and Final Results that multiple factors, including but not limited to the Final Judgment and the Domestic Producers’ objection, counseled against granting Grobest’s request. Those additional considerations included Commerce’s expenditure of resources to date and the insufficiency of Grobest’s justification for seeking to avoid review.  Thus, we reject Grobest’s argument that Commerce somehow erred as a matter of law on that basis.

 

Moreover, we agree with Commerce that it was eminently reasonable for it to point to the CIT’s Final Judgment as well as the Domestic Producers’ objections to Grobest’s sudden desire to withdraw as legitimate reasons to maintain the individual examination.  And given the nature of the supplemental questionnaire, Commerce appeared to have reasonable concerns with the veracity or completeness of Grobest’s previously submitted data, warranting further investigation. Grobest also does not meaningfully refute Commerce’s justification that it was not inclined to rescind the individual examination because it had already expended considerable time and resources in connection with the individual examination.  Commerce’s efforts reviewing Grobest’s initial questionnaire responses, identifying and documenting numerous discrepancies in Grobest’s representations (including the company’s affiliations, the quantity and value of its sales of subject merchandise, and factors of production), and formulating supplemental questions to address those concerns cannot be readily dismissed as insignificant.  These considerations all further support the reasonableness of Commerce’s decision to continue the examination.

 

Conversely, Grobest’s professed reason for withdrawing its request for review—the change in ownership—does not withstand scrutiny.  The change of ownership from Grobest & I-Mei to Viet I-Mei took place in December 2010.  Like Commerce and the CIT, we find unpersuasive Grobest’s argument that it was not until years later, after the Final Judgment was entered and after the notice of reconducted examination was published in October 2012, that it appreciated the impact of this change in ownership.

 

Read the Court of Appeals for the Federal Circuit’s full Opinion in Viet I-Mei Frozen Foods Co. Ltd. v. United States, 2016-1006 (October 11, 2016) here:

http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-1006.Opinion.10-7-2016.1.PDF.