DOJ, US Activated Carbon Companies Argue for Commerce's Surrogate Pick in AD Case at CAFC

Arguments from plaintiff-appellants in an antidumping duty case, led by Carbon Activated Tianjin Co., are merely a bid to have the U.S. Court of Appeals for the Federal Circuit impermissibly re-weigh the record evidence over surrogate value questions, defendant-appellees Calgon Carbon Corp. and Norbit Americas argued in a May 31 reply brief. Also filing its reply brief was DOJ, arguing that the Commerce Department properly picked Malaysia over Romania as the primary surrogate country (Carbon Activated Tianjin Co. Ltd. v. U.S., Fed. Cir. #22-1298).

The case concerns the 11th administrative review of the antidumping duty order on activated carbon from China, covering entries in 2017-18, wherein plaintiff Carbon Activated served as a mandatory respondent. In the review, the agency initially chose Malaysia but used a financial statement from Romanian company Romcarbon to calculate the financial ratios. Commerce held that Romania was not a significant producer of similar merchandise, barring it from serving as the primary surrogate country. In April, the Court of International Trade remanded this finding, among other things, to Commerce.

The agency then reversed course, declaring Romania a significant producer and using Romcarbon's financial statements but continuing to rely on Malaysia as the main surrogate (see 2107010079). The plaintiffs argued that Romania should have been the primary surrogate because it was found to be a significant producer of activated carbon (see 2108040078). Instead, the trade court upheld Commerce's finding that the Malaysian data was more specific. Commerce said it used Malaysia as the primary surrogate because that country gave data on a Harmonized System 10-digit level specific to coconut-shell charcoal -- a key input of activated carbon -- while Romanian data had only a six-digit basket category subheading (see 2110250027).

However, Commerce used Romcarbon's financial statement to find the financial ratios because the statement gave specific breakouts for raw material, labor and energy not found in the Malaysian statements. At the Federal Circuit, the appellants now argue that the Romanian data is contemporaneous and that the coconut-shell data does not favor Malaysia (see 2204130057). The U.S. and the other defendant-appellees countered this with their reply briefs, arguing that Commerce "amply explained" its Malaysia over Romania surrogate pick based on the better quality of the data and the contemporaneity of the numbers. DOJ argued that the Malaysian data also offered greater product-specific import data to value the one substantiated input used on record.

"These arguments amount to nothing more than an impermissible request for this Court to re-weigh the record evidence," Calgon and Norbit said. "The Department assessed the pros and cons of the data available from Malaysia and, all things considered, determined that the record supported selection of Malaysia as the primary surrogate country." The U.S. and the appellees further countered the appellants' attacks against the surrogate values for two primary inputs used in the activated carbon manufacturing process: coal tar pitch and bituminous coal.

"With respect to coal tar pitch, Plaintiffs-Appellants improperly introduce extraneous evidence and ask this Court to consider it, even though that information was not presented to the agency in a timely manner, was rejected by the agency, and subsequently rejected by the CIT," the appellees said. "This Court should apply the exhaustion doctrine to these arguments and reject them. ... Plaintiffs-Appellants next argue that the Department erred in relying on import statistics from Malaysia, rather than Romania, to value the bituminous coal inputs of suppliers that did demonstrate the calorific value of consumed coal was less than 5,833 kcal/kg., however, they cite to detracting evidence on the record and fail to demonstrate that the Department’s selection was unreasonable."