Jinan Yipin Corp., Ltd. v. United States

Slip Op. 11- 119

UNITED STATES COURT OF INTERNATIONAL TRADE

__________________________________________________

JINAN YIPIN CORPORATION, LTD., LINSHU :

DADING PRIVATE AGRICULTURAL

PRODUCTS CO., LTD., and SUNNY IMPORT :

& EXPORT LTD.,

:

Plaintiffs,

:

v.

: Court No. 06-00189

UNITED STATES,

:

Defendant,

:

and

:

FRESH GARLIC PRODUCERS ASSOCIATION,

CHRISTOPHER RANCH, L.L.C., THE :

GARLIC COMPANY, VALLEY GARLIC,

and VESSEY AND COMPANY, INC., :

Defendant-Intervenors. :

____________________________________________________________________________________

[Sustaining in part U.S. Department of Commerce’s remand determination in tenth administrative

review of antidumping duty order covering fresh garlic from the People’s Republic of China]

Dated: September 26, 2011

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Mark E. Pardo and Jeffrey O.

Frank), for Plaintiffs.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Reginald T. Blades,

Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice

(Richard P. Schroeder); Reid Swayze, Office of the Chief Counsel for Import Administration, U.S.

Department of Commerce, Of Counsel; for Defendant.

Kelley Drye & Warren LLP (Michael J. Coursey and John M. Herrmann), for Defendant-

Intervenors.

Court No. 06-00189 Page 2

OPINION

RIDGWAY, Judge:

In this action, the plaintiff Chinese producers and exporters of fresh garlic challenged the

final results of the U.S. Department of Commerce’s tenth administrative review of the antidumping

duty order covering fresh garlic from the People’s Republic of China. See generally Zhengzhou

Harmoni Spice Co. v. United States, 33 CIT ____, 617 F. Supp. 2d 1281 (2009) (“Zhengzhou

Harmoni I”). Zhengzhou Harmoni I analyzed each of the seven issues that the Chinese producers

raised, sustaining Commerce’s determination as to two issues, and remanding the remaining five for

further consideration by the agency. See generally id., 33 CIT at ____, ____, 617 F. Supp. 2d at

1289, 1334.

Now pending before the court is Commerce’s Remand Determination, filed pursuant to

Zhengzhou Harmoni I. See generally Final Results of Redetermination Pursuant to Court Remand

(“Remand Determination”). Plaintiffs Jinan Yipin Corporation, Ltd. (“Jinan Yipin”), Linshu Dading

Private Agricultural Products Co., Ltd. (“Linshu Dading”), and Sunny Import & Export Ltd.

(“Sunny”) – collectively referred to as “the Chinese Producers” – continue to dispute the agency’s

treatment of four of the five issues addressed in the agency’s Remand Determination. See generally

Plaintiffs’ Comments Regarding the Department’s Remand Redetermination (“Pls. Comments”);

Plaintiffs’ Reply to Defendant’s Response Comments Regarding Remand Redetermination (“Pls.

Reply Comments”).

For its part, the Government seeks a voluntary remand to allow Commerce to recalculate the

surrogate value for the Chinese Producers’ labor costs, but contends that the Remand Determination

Court No. 06-00189 Page 3

should be sustained in all other respects. See Defendant’s Response to Comments Upon the Remand

Redetermination (“Def. Response”) at 1, 31. Defendant-Intervenors the Fresh Garlic Producers

Association and its individual members (Christopher Ranch, L.L.C., The Garlic Company, Valley

Garlic, and Vessey and Company, Inc.) – collectively referred to as “the Domestic Producers” – do

not oppose the Government’s request for a limited remand to allow the agency to recalculate labor

costs, but urge that the Remand Determination be sustained as to all other issues save one, on which

the Domestic Producers express no view. See Defendant-Intervenors’ Reply Regarding Agency

Remand Redetermination (“Def.-Ints. Reply Comments”) at 1-3.

Jurisdiction lies under 28 U.S.C. § 1581(c) (2000).1 For the reasons detailed below,

Commerce’s Remand Determination is sustained in part, and this matter is remanded to the agency

for further consideration not inconsistent with this opinion.

I. Background

Seven Chinese producers and exporters of fresh garlic brought this action to contest various

aspects of the Final Results of Commerce’s tenth administrative review of the antidumping duty

order on fresh garlic from China, which covered the period from November 1, 2003 through October

31, 2004. See generally Zhengzhou Harmoni I, 33 CIT ____, 617 F. Supp. 2d 1281; Fresh Garlic

from the People’s Republic of China: Final Results and Partial Rescission of Antidumping Duty

Administrative Review and Final Results of New Shipper Reviews, 71 Fed. Reg. 26,329 (May 4,

1

All citations to federal statutes are to the 2000 edition of the United States Code. Similarly,

all citations to federal regulations are to the 2003 edition of the Code of Federal Regulations.

Court No. 06-00189 Page 4

2006) (“Final Results”).2

Zhengzhou Harmoni I sustained Commerce’s use of its “intermediate input methodology”

to value the raw garlic bulb grown by the Chinese Producers, as well as the agency’s inclusion of

certain labor-related expenses as part of manufacturing overhead. See Zhengzhou Harmoni I, 33

CIT at ____, ____, ____, 617 F. Supp. 2d at 1289, 1295, 1333-34. In contrast, Zhengzhou Harmoni

I remanded for further consideration Commerce’s surrogate valuation of certain “factors of

production” necessary for the cultivation and export of fresh garlic – specifically (1) raw garlic bulb,

(2) labor, (3) ocean freight, (4) cardboard cartons, and (5) plastic jars and lids. See id., 33 CIT at

____, ____, ____, ____, ____, ____, 617 F. Supp. 2d at 1289, 1301, 1311-12, 1321, 1327, 1334.

Following Zhengzhou Harmoni I but before issuance of Commerce’s Remand Determination,

four of the seven Chinese producers that filed the complaint in this action moved for voluntary

dismissal. See generally Zhengzhou Harmoni Spice Co. v. United States, 34 CIT ____, 675 F. Supp.

2d 1320 (2010) (“Zhengzhou Harmoni II”).3 Zhengzhou Harmoni II granted the motion and

dismissed the four Plaintiffs from this action with prejudice, leaving Jinan Yipin, Linshu Dading,

and Sunny (collectively “the Chinese Producers”) as the remaining Plaintiffs and the only subjects

2

Although the complaint in this action was filed on behalf of seven Chinese

producers/exporters, only four of the seven moved for judgment on the agency record. See

Zhengzhou Harmoni I, 33 CIT at ____ & n.2, 617 F. Supp. 2d at 1285 & n.2; see also Zhengzhou

Harmoni Spice Co. v. United States, 34 CIT ____, ____, 675 F. Supp. 2d 1320, 1324 (2010)

(“Zhengzhou Harmoni II”).

3

The Partial Consent Motion for Voluntary Dismissal with prejudice was filed on behalf of

the three plaintiff Chinese producers that did not join in the Motion for Judgment on the Agency

Record (i.e., Jining Trans-High Trading Co., Ltd., Jinxiang Shanyang Freezing Storage Co., Ltd.,

and Shanghai LJ International Trading Co., Ltd.), as well as Zhengzhou Harmoni Spice Co., Ltd.

(which was a party to the Motion for the Judgment on the Agency Record). See Zhengzhou

Harmoni II, 34 CIT at ____, 675 F. Supp. 2d at 1324.

Court No. 06-00189 Page 5

of Commerce’s Remand Determination. See id., 34 CIT at ____, ____, 675 F. Supp. 2d at 1324,

1339-40.4

Commerce thereafter issued its Remand Determination. In the Remand Determination,

Commerce revalued raw garlic bulb, labor, and ocean freight. See Remand Determination at 5-15,

15-38, 38-41, 51-59, 59-68. On the other hand, Commerce continued to value cardboard cartons and

plastic jars as it had in the Final Results. See id. at 41-46, 46-50, 68-71, 71-74. As a result of its

reconsideration in the course of the remand, Commerce recalculated the weighted-average

antidumping duty margin for Jinan Yipin as 55.18% (up from 29.52%), for Linshu Dading as

39.51% (up from 22.47%), and for Sunny as 26.67% (up from 10.52%). See id. at 74-75; Final

Results, 71 Fed. Reg. at 26,332.

The Chinese Producers contend that Commerce’s wage rate calculation and its valuation of

raw garlic bulb, cardboard cartons, and plastic jars do not comply with the instructions in Zhengzhou

Harmoni I. See generally Pls. Comments; Pls. Reply Comments. The Chinese Producers maintain

that these matters therefore should be remanded to the agency for further consideration. See Pls.

Comments at 1-2, 18-19, 26, 30, 31; Pls. Reply Comments at 12, 17.

The Government seeks a voluntary remand to allow Commerce to recalculate the surrogate

value for the Chinese Producers’ labor costs in light of the Court of Appeals’ decision in Dorbest,

but maintains that the Remand Determination should be otherwise sustained. See Def.’s Response

at 1, 31; Dorbest Ltd. v. United States, 604 F.3d 1363, 1366, 1369-73 (Fed. Cir. 2010). The

4

This action was thereafter re-styled as Jinan Yipin Corporation, Ltd., et al. v. United States,

et al., as captioned above.

Court No. 06-00189 Page 6

Domestic Producers do not oppose the Government’s request for a voluntary remand on labor costs,

but contend that the Remand Determination should be sustained as to the surrogate valuation of

garlic bulbs, cardboard cartons, and plastic jars and lids. See Def.-Ints. Reply Comments at 1, 3.

The Domestic Producers express no view concerning the Remand Determination on ocean freight

expenses. See id. at 1-3.

II. Standard of Review

In an action reviewing an antidumping determination by Commerce, the agency’s

determination must be upheld except to the extent that it is found to be “unsupported by substantial

evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i);

see also NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed. Cir. 2009). Substantial

evidence is “more than a mere scintilla”; rather, it is “such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.” Universal Camera Corp. v. Nat’l Labor

Relations Bd., 340 U.S. 474, 477 (1951) (quoting Consol. Edison Co. v. Nat’l Labor Relations Bd.,

305 U.S. 197, 229 (1938)); see also Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375,

1380 (Fed. Cir. 2008) (same). Moreover, any evaluation of the substantiality of evidence “must take

into account whatever in the record fairly detracts from its weight,” including “contradictory

evidence or evidence from which conflicting inferences could be drawn.” Suramerica de Aleaciones

Laminadas, C.A. v. United States, 44 F.3d 978, 985 (Fed. Cir. 1994) (quoting Universal Camera

Corp., 340 U.S. at 487-88); see also Mittal Steel, 548 F.3d at 1380-81 (same).

That said, the mere fact that it may be possible to draw two inconsistent conclusions from

the record does not prevent Commerce’s determination from being supported by substantial

Court No. 06-00189 Page 7

evidence. Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001); see also

Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966). Finally, while Commerce must

explain the bases for its decisions, “its explanations do not have to be perfect.” NMB Singapore,

557 F.3d at 1319. Nevertheless, “the path of Commerce’s decision must be reasonably discernable,”

to support judicial review. Id. (citing Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,

463 U.S. 29, 43 (1983)); see also Timken U.S. Corp. v. United States, 421 F.3d 1350, 1355 (Fed.

Cir. 2005) (explaining that “it is well settled that an agency must explain its action with sufficient

clarity to permit ‘effective judicial review,’” and that “[f]ailure to provide the necessary clarity

requires the agency action be vacated”) (quoting Camp v. Pitts, 411 U.S. 138, 142-43 (1973)); see

generally 19 U.S.C. § 1677f(i)(3)(A) (requiring Commerce to “include in a final determination . .

. an explanation of the basis for its determination”).

III. Analysis

Dumping occurs when goods are imported into the United States and sold at a price lower

than their “normal value,” resulting in material injury (or the threat of material injury) to the U.S.

industry. See 19 U.S.C. §§ 1673, 1677(34), 1677b(a). The difference between the normal value of

the goods and the U.S. price is the “dumping margin.” See 19 U.S.C. § 1677(35). When normal

value is compared to the U.S. price and dumping is found, antidumping duties equal to the dumping

margin are imposed to offset the dumping. See 19 U.S.C. § 1673.

Normal value is typically calculated using either the price in the exporting market (i.e., the

price in the “home market” where the goods are produced) or the cost of production of the goods,

Court No. 06-00189 Page 8

when the exporting country is a market economy country. See generally 19 U.S.C. § 1677b.5

However, where – as here – the exporting country has a non-market economy (“NME”), there is

often concern that the factors of production used to produce the goods at issue are under state

control, and that home market sales may not be reliable indicators of normal value. See 19 U.S.C.

§ 1677(18)(A).

In cases such as this, where Commerce concludes that concerns about the sufficiency or

reliability of the available data do not permit the normal value of the goods to be determined in the

typical manner, Commerce “determine[s] the normal value of the subject merchandise on the basis

of the value of the factors of production,” including “an amount for general expenses and profit plus

the cost of containers, coverings, and other expenses.” See 19 U.S.C. § 1677b(c)(1); see generally

Ningbo Dafa Chem. Fiber Co. v. United States, 580 F.3d 1247, 1250-51 (Fed. Cir. 2009) (briefly

summarizing “factors of production” methodology).6 The antidumping statute requires Commerce

to value factors of production “based on the best available information regarding the values of such

factors” in an appropriate surrogate market economy country – in this case, India. See 19 U.S.C.

§ 1677b(c)(1) (emphasis added); see also Shakeproof Assembly Components v. United States, 268

F.3d 1376, 1382 (Fed. Cir. 2001); Ningbo, 580 F.3d at 1254 (emphasizing that statute mandates that

5

In addition, in certain market economy cases, Commerce may calculate normal value using

the price in a third country (i.e., a country other than the exporting country or the United States).

See, e.g., RHP Bearings Ltd. v. United States, 288 F.3d 1334, 1338 (Fed. Cir. 2002) (discussing 19

U.S.C. §§ 1677b(a)(1)(B)(ii), 1677b(a)(1)(C)).

6

Factors of production “include, but are not limited to . . . hours of labor required, . . .

quantities of raw materials employed, . . . amounts of energy and other utilities consumed, and . .

. representative capital cost, including depreciation.” See 19 U.S.C. § 1677b(c)(3); see also Dorbest

Ltd. v. United States, 604 F.3d 1363, 1367 (Fed. Cir. 2010) (discussing factors of production).

Court No. 06-00189 Page 9

Commerce “shall” use “best available information” in valuing factors of production).

In determining which data constitute the “best available information,” Commerce generally

looks to the criteria set forth in its “Policy Bulletin 04.1,” also known as the “NME Surrogate

Country Policy Bulletin” and the “Surrogate Country Selection Bulletin.”7 Policy Bulletin 04.1

explains:

In assessing data and data sources, it is [Commerce’s] stated practice to use

investigation or review period-wide price averages, prices specific to the input in

7

Commerce’s reference to the document as the “Surrogate Country Selection Bulletin” is apt.

See, e.g., Remand Determination at 6; see also id. at 17-18; Issues and Decision Memorandum for

the [Tenth] Administrative Review and New Shipper Reviews of the Antidumping Duty Order on

Fresh Garlic from the People’s Republic of China (April 26, 2006) (Admin. Record Pub. Doc. 462)

(“Issues and Decision Memorandum”) at 31 & n.79, 33, 35 & n.90, 36, 37, 47. The stated purpose

of Policy Bulletin 04.1 is to “provide[] guidance regarding [Commerce’s] selection of surrogate

market economy countries in non-market economy (‘NME’) cases.” See Import Administration

Policy Bulletin 04.1, “Non-Market Economy Surrogate Country Selection Process,” at “Statement

of Issue” (March 1, 2004). The language on which Commerce relies in this and many other cases

appears in a section captioned “Data Considerations.” See Policy Bulletin 04.1, at “Data

Considerations.” The policy bulletin expressly states that the criteria outlined in that section are for

Commerce’s use in winnowing the agency’s list of potential surrogate countries “if more than one

country has survived the selection process to this point” (i.e., if more than one country on the list

of potential surrogates are economically comparable, produce comparable merchandise, and are

“significant” producers of such merchandise). Id. Thus, the policy bulletin explains, “a country that

perfectly meets the requirements of economic comparability and significant producer is not of much

use of as a primary surrogate if crucial factor price data from that country are inadequate or

unavailable.” Id. Accordingly, pursuant to the policy bulletin, Commerce decides from among two

or more countries that are economically comparable and significant producers of the merchandise

by “assessing data and data sources” in the respective candidate countries in accordance with the

criteria outlined in the section of the bulletin at issue. Id.

In short, the criteria outlined in the section of Policy Bulletin 04.1 captioned “Data

Considerations” were developed to serve as a “tie-breaker,” if necessary, in Commerce’s

identification of a surrogate country. The criteria were not promulgated for the purpose of guiding

Commerce’s selection of a surrogate value source from among alternative data sources after a

surrogate country has been identified. Nevertheless, Commerce has used the criteria for that purpose

here and in many other cases.

Court No. 06-00189 Page 10

question, prices that are net of taxes and import duties, prices that are

contemporaneous with the period of investigation or review, and publicly available

data.

See Import Administration Policy Bulletin 04.1, “Non-Market Economy Surrogate Country

Selection Process,” at “Data Considerations” (March 1, 2004); see also Remand Determination at

42 (quoting Policy Bulletin 04.1, and stating that it reflects agency’s “well-established practice for

determining the reliability and appropriateness of surrogate values under consideration”); id. at 6,

40, 47, 69-70, 73; Issues and Decision Memorandum for the [Tenth] Administrative Review and

New Shipper Reviews of the Antidumping Duty Order on Fresh Garlic from the People’s Republic

of China (April 26, 2006) (Admin. Record Pub. Doc. 462) (“Issues and Decision Memorandum”)

at 60-61, 63 & n.161, 66.8

Within this general framework, the statute “accords Commerce wide discretion in the

valuation of factors of production in the application of [the statute’s] guidelines.” See Shakeproof,

268 F.3d at 1381 (internal quotation marks and citation omitted); see also Ad Hoc Shrimp Trade

Action Committee v. United States, 618 F.3d 1316, 1320 (Fed. Cir. 2010) (same); Nation Ford

Chem. Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999) (same). Commerce is recognized

8

Because this action was previously remanded to Commerce in Zhengzhou Harmoni I, two

administrative records have been filed with the court: the initial administrative record (comprised

of the information on which the agency’s Final Results were based), and the supplemental

administrative record compiled on remand (on which the Remand Determination is based).

Because confidential information is included in the administrative records, there are two

versions of each: a public version and a confidential version. The public versions of the

administrative records consist of copies of all documents in the record, with confidential information

redacted. The confidential versions consist of complete, unredacted copies of only those documents

that include confidential information. All citations herein are to the public versions, which are cited

as “Admin. Record Pub. Doc. ____” and “Remand Pub. Doc. ____,” respectively.

Court No. 06-00189 Page 11

as the “master of antidumping law.” See The Thai Pineapple Public Co. v. United States, 187 F.3d

1362, 1365 (Fed. Cir. 1999); see also Shakeproof, 268 F.3d at 1381 (acknowledging “Commerce’s

special expertise”). And “[t]he process of constructing foreign market value for a producer in a non-

market economy country is difficult and necessarily imprecise.” Shakeproof, 268 F.3d at 1381.

Nevertheless, Commerce’s discretion is not boundless. In exercising its discretion,

Commerce is constrained by the purpose of the antidumping statute, which is “to determine

antidumping margins ‘as accurately as possible.’” See Shakeproof, 268 F.3d at 1382 (quoting

Lasko Metal Products, Inc. v. United States, 43 F.3d 1442, 1446 (Fed. Cir. 1994)). And,

Commerce’s discretion notwithstanding, “a surrogate value must be as representative of the situation

in the [non-market economy] country as is feasible.” See Nation Ford, 166 F.3d at 1377 (internal

quotation marks and citation omitted). Thus, “[i]n determining the valuation of . . . factors of

production, the critical question is whether the methodology used by Commerce is based on the best

available information and establishes antidumping margins as accurately as possible.” See Ningbo,

580 F.3d at 1257 (emphases added) (quoting Shakeproof, 268 F.3d at 1382) (internal quotation

marks omitted).

In the present case, pursuant to the remand instructions in Zhengzhou Harmoni I, Commerce

reconsidered various aspects of the agency’s valuation of the factors of production in the final results

of the tenth administrative review of the antidumping duty order covering fresh garlic from China.

As discussed in greater detail below, Commerce’s determination on remand concerning the surrogate

value for the Chinese Producers’ ocean freight costs must be sustained. On the other hand,

Commerce’s determinations as to garlic bulb, labor expenses, plastic jars and lids, and cardboard

Court No. 06-00189 Page 12

packing cartons must be remanded to the agency once again, for further consideration.

A. Valuation of Garlic Bulb

In the administrative review at issue, rather than valuing the Chinese Producers’ so-called

“growing” and “harvesting” factors of production (i.e., the garlic seed, water, fertilizer, labor, and

other “inputs” (commodities) consumed by Chinese producers in cultivating and harvesting whole

raw garlic bulb), Commerce broke with its past practice and employed the agency’s “intermediate

input methodology” to value the whole raw garlic bulb (the “intermediate input”) itself. See

Zhengzhou Harmoni I, 33 CIT at ____, ____, 617 F. Supp. 2d at 1288, 1291.9 Zhengzhou Harmoni

I rejected the Chinese Producers’ objections to Commerce’s use of its intermediate input

methodology here. See id., 33 CIT at ____, ____, ____, 617 F. Supp. 2d at 1289, 1295, 1334; see

9

For a summary overview of Commerce’s intermediate input methodology, see Jining

Yongjia Trade Co. v. United States, 34 CIT ____, ____ & n.6, 2010 WL 5121964 * 2 & n.6 (2010)

(explaining, inter alia, that, when Commerce employs its intermediate input methodolgy, “the cost

(or value) of the whole garlic bulb [is] used as a substitute for the costs of the growing and

harvesting [factors of production] (‘upstream FOPs’) actually reported by [the foreign producer at

issue]”).

In prior administrative reviews, Commerce used the agency’s standard upstream factors of

production methodology, rather than the intermediate input methodology employed here. In those

prior reviews, Commerce calculated separate surrogate values for garlic seed and other so-called

“growing” and “harvesting” factors of production. See Zhengzhou Harmoni I, 33 CIT at ____, ____,

____ n.19, 617 F. Supp. 2d at 1287-88, 1290-91, 1296 n.19; see also, e.g., Taian Ziyang Food Co.

v. United States, 33 CIT ____, ____, 637 F. Supp. 2d 1093, 1124-27 (2009) (“Taian Ziyang I”)

(analyzing Commerce’s valuation of garlic seed in ninth administrative review); Jinan Yipin Corp.

v. United States, 31 CIT 1901, 1924-30, 526 F. Supp. 2d 1347, 1367-72 (2007) (“Jinan Yipin I”)

(same, in eighth review). In the instant (tenth) administrative review (and in subsequent reviews),

Commerce used the intermediate input methodology, due to problems with the data reported by the

Chinese producers in past reviews for their “growing” and “harvesting” factors of production. See

Zhengzhou Harmoni I, 33 CIT at ____, ____, 617 F. Supp. 2d at 1287-88, 1290-91.

Court No. 06-00189 Page 13

generally id., 33 CIT at ____, 617 F. Supp. 2d at 1289-95 (reviewing the Chinese Producers’

objections to intermediate input methodology). On the other hand, Zhengzhou Harmoni I sustained

the Chinese Producers’ challenge to the surrogate value for raw garlic bulb that Commerce

calculated for use in the Final Results, principally on the grounds that the record evidence did not

establish that the data on which Commerce relied were sufficiently “product-specific.” See id., 33

CIT at ____, ____, ____, ____, 617 F. Supp. 2d at 1289, 1298-99, 1301, 1334; see generally id., 33

CIT at ____, 617 F. Supp. 2d at 1295-1301 (analyzing Chinese Producers’ challenge to surrogate

valuation of raw garlic bulb).

As Zhengzhou Harmoni I explained, the Chinese Producers’ garlic “is a large, high yield,

high-quality type of garlic that is distinct from the overwhelming majority of garlic grown in India.”

See Zhengzhou Harmoni I, 33 CIT at ____, 617 F. Supp. 2d at 1296; see also Issues and Decision

Memorandum at 42 (stating that “the primary characteristic that distinguishes the type of garlic

exported by [Chinese producers] from the majority of garlic sold in India” is the significantly larger

bulb size of Chinese garlic). In the Final Results, Commerce calculated a surrogate value of 22.91

rupees per kilogram for garlic bulb, using data from the Indian Agricultural Marketing Information

Network (“Agmarknet”) for a type of garlic referred to as “China” variety. See Zhengzhou Harmoni

I, 33 CIT at ____, 617 F. Supp. 2d at 1296-97; Issues and Decision Memorandum at 39-44, 47. As

support for the finding that India’s “China” variety garlic is sufficiently product-specific to the

Chinese Producers’ large-bulb garlic, the Final Results relied on information drawn from “Market

Research on Fresh Whole Garlic in India,” a June 2003 report prepared by consultants to the

Domestic Producers, which the Domestic Producers placed on the record of this administrative

Court No. 06-00189 Page 14

review. See Zhengzhou Harmoni I, 33 CIT ____, 617 F. Supp. 2d at 1297-98; see also Issues and

Decision Memorandum at 40-41; Domestic Producers’ Surrogate Value Submission (Admin. Record

Pub. Doc. 417), Exh. 33 (“Market Research Report”).10

Relying on the Market Research Report and additional information on the record, the Final

Results explained that Chinese garlic exported to the United States is characterized by its large bulb

size (with an average diameter of greater than 40 millimeters); that the bulb diameter of local, native

garlic typically grown and sold in the Indian market is a mere 20 to 40 millimeters; and that, in

India, cultivation of large-bulb garlic is generally confined to the country’s “long-day” zone, which

enjoys longer periods of sunlight. See Zhengzhou Harmoni I, 33 CIT at ____, 617 F. Supp. 2d at

1297; Issues and Decision Memorandum at 41-44; Market Research Report at 4, 7, 11, 12, 17-18.

Based on this and other information, the Final Results concluded that the Agmarknet data for

“China” variety garlic must represent sales of large-bulb garlic from India’s “long-day” zone. See

Zhengzhou Harmoni I, 33 CIT at ____, 617 F. Supp. 2d at 1298; see also Issues and Decision

Memorandum at 40-42.

But the Agmarknet data provide no description of the physical characteristics of “China”

variety garlic (or any other variety of garlic reflected therein). See Zhengzhou Harmoni I, 33 CIT

10

The Market Research Report was first placed on the record of the eighth administrative

review of the antidumping order on fresh garlic from China. See Market Research Report; see also

Jinan Yipin I, 31 CIT at 1926-29, 526 F. Supp. 2d at 1369-72 (discussing Market Research Report

in context of eighth administrative review). The same Market Research Report was later placed on

the record of the second remand in litigation involving the ninth administrative review, as well as

the record of the review here at issue. See Market Research Report; Zhengzhou Harmoni I, 33 CIT

at ____, 617 F. Supp. 2d at 1297-98; Taian Ziyang Food Co. v. United States, 35 CIT ____, ____

& n.11, 2011 WL 3024720 * 6 & n.11 (2011) (“Taian Ziyang II”) (reviewing second remand

determination in ninth administrative review).

Court No. 06-00189 Page 15

at ____, 617 F. Supp. 2d at 1297-99; see also Issues and Decision Memorandum at 42 (noting that

Agmarknet data do not include descriptions of garlic varieties reflected in the data). Noting that the

Final Results apparently relied on the Agmarknet data “based on nothing more than perhaps the

name of the variety, and the fact that [the “China” variety] had a higher weighted-average price,”

Zhengzhou Harmoni I held that the Final Results were therefore “largely speculative and

conclusory” and “lack[ed] adequate support in the evidentiary record.” See Zhengzhou Harmoni

I, 33 CIT at ____, 617 F. Supp. 2d at 1297-98. Zhengzhou Harmoni I concluded that, absent some

proof of the physical characteristics of “China” variety garlic, Commerce’s decision to use the

Agmarknet data in the Final Results was not supported by substantial evidence and could not be

sustained on the then-existing record. See id., 33 CIT at ____, 617 F. Supp. 2d at 1297-98. The

valuation of raw garlic bulb was thus remanded to the agency for further consideration. See id., 33

CIT at ____, ____, ____, 617 F. Supp. 2d at 1289, 1301, 1334.

In addition to the Chinese Producers’ concerns about product specificity (discussed above),

Zhengzhou Harmoni I addressed a number of other issues. See generally Zhengzhou Harmoni I, 33

CIT at ____, 617 F. Supp. 2d at 1299-1301. Notably, the Chinese Producers argued that the

Agmarknet data actually reflect a final product and not an intermediate input at all. Specifically, the

Chinese Producers asserted that, because the Agmarknet prices – by definition – represent fresh

garlic sold at market, the prices do not reflect an intermediate product and inherently include post-

harvest factors of production. See id., 33 CIT at ____, 617 F. Supp. 2d at 1300. The Chinese

Producers thus contended that the Final Results “impermissibly inflated the surrogate value of fresh

garlic by adding additional post-harvest factors of production (e.g., sales, packing, and transportation

Court No. 06-00189 Page 16

costs) to a figure that already reflected such costs.” See id., 33 CIT at ____, 617 F. Supp. 2d at

1300. Zhengzhou Harmoni I instructed Commerce, on remand, to consider “the potential for double

counting that may result when using data from the Agmarknet database, which presumably contains

information regarding Indian market transactions and is representative of the final garlic product

rather than an intermediate garlic product (i.e., garlic bulb).” See id., 33 CIT at ____, 617 F. Supp.

2d at 1300. Zhengzhou Harmoni I specifically cautioned that, “when valuing an intermediate

product in [a non-market economy] country case, [Commerce] must find a surrogate representative

of that intermediate product.” See id., 33 CIT at ____, 617 F. Supp. 2d at 1300.

On remand, Commerce reexamined the three sets of potential surrogate value data considered

in the Final Results, including the Agmarknet prices, although the agency took no action to obtain

information on the physical characteristics of the “China” variety garlic reflected in the Agmarknet

data and used in the Final Results. See Remand Determination at 6-8, 15. Other than the Agmarknet

data, the Remand Determination also reconsidered Indian import statistics derived from the World

Trade Atlas11 for Indian Harmonized Tariff Schedule subheading 0703.2000 (“garlic, fresh or

chilled”), as well as Indian price data for garlic seed from the National Horticultural Research and

Development Foundation (“NHRDF”), which were placed on the record by the Domestic Producers

and relied on by the agency in previous administrative reviews. See id. at 6-7, 15. In the course of

the remand, Commerce also placed on the record a fourth set of data, which the agency used to value

11

The World Trade Atlas is “a database of commodities using all levels of the Harmonized

Tariff Schedule,” which “enables users to determine the value of a specific product and identify

countries to or from which the product is being exported or imported.” See Zhengzhou Harmoni I,

33 CIT at ____ n.20, 617 F. Supp. 2d at 1296 n.20 (internal quotation marks and citation omitted).

Court No. 06-00189 Page 17

garlic bulb in the eleventh administrative review (as well as other subsequent reviews) – i.e.,

information on garlic prices at the produce market near Delhi operated by the Azadpur Agricultural

Produce Marketing Committee (“APMC”), as published in the Azapur APMC’s “Market

Information Bulletin,” for the two-and-one-half-month period from May 1, 2006 through July 14,

2006. See id. at 2, 6, 10, 13, 15; Letter from Commerce to All Interested Parties (June 5, 2009)

(Remand Pub. Doc. 1) (placing on the record Azadpur APMC’s “Market Information Bulletins” for

May 1, 2006-July 14, 2006) (“Azadpur APMC data”); n.44, infra (discussing use of Azadpur APMC

data in subsequent reviews).

The Remand Determination emphasized the large bulb size of the Chinese Producers’ garlic

(50 mm and above), and the significant role that bulb size plays in garlic pricing. See Remand

Determination at 10-11. Citing the concerns identified in Zhengzhou Harmoni I (particularly the

lack of any physical description of the garlic reflected in the Agmarknet data), the Remand

Determination declined to rely on the Agmarknet data to value garlic bulb. See id. at 5, 7-8, 15.

Further, the Remand Determination again rejected the Indian import statistics as “insufficiently

specific” due to the “basket” nature of the tariff subheading at issue. See id. at 7, 8, 15; see also

Zhengzhou Harmoni I, 33 CIT at ____, 617 F. Supp. 2d at 1296. The Remand Determination

similarly rejected the NHRDF data on garlic seed, concluding that those data would “require a

prohibitive level of adjustment” in order to calculate a value for garlic bulb. See Remand

Determination at 15; see also id. at 7.

Much as Commerce has done in other recent reviews, the Remand Determination based the

surrogate value for garlic bulb here on the Azadpur APMC data, averaging the values for “A”- and

Court No. 06-00189 Page 18

“S.A.”-grade garlic. See generally Remand Determination at 9-15, 53-59. Relying on the Azadpur

APMC data, the Remand Determination calculated a final value of 33.77 rupees per kilogram – a

significantly higher figure than the 22.91 rupees per kilogram established in the Final Results. See

Analysis for the Redetermination of Remand in the Administrative Review of the Antidumping Duty

Order on Fresh Garlic from the People’s Republic of China: Jinan Yipin Corporation, Ltd. (Remand

Pub. Doc. 19) at 2; Issues and Decision Memorandum at 39, 44, 47.

The Remand Determination concluded that the Azadpur APMC data constitute “the best

information available with which to value [the Chinese Producers’] garlic bulb,” even though –

much like the Agmarknet data – the Azadpur APMC data do not describe the physical characteristics

of the garlic to which they refer. See Remand Determination at 14; Azadpur APMC data. To

establish the “product specificity” of the Azadpur APMC data, the Remand Determination therefore

relied on the Market Research Report to find that grade “A” garlic has a bulb diameter of “[a]bove

40 mm (typically 40-55 mm).” See Remand Determination at 11; Market Research Report at 21.

Similarly, the Remand Determination relied on information submitted by the Domestic Producers

to find that the bulb diameter of “S.A.”-grade garlic is 55 mm or more. See Remand Determination

at 11; Domestic Producers’ Comments on New Surrogate Value Information (June 24, 2009)

(Remand Pub. Doc. 3) at 4 (explaining that “S.A.”-grade garlic has bulb diameter “greater than 5.5

cm”).12

Reiterating that a major determinant of the market price of garlic is bulb size, Commerce

12

At one point, the Remand Determination mistakenly states that “S.A.”-grade garlic has a

bulb diameter of “40 mm . . . and above.” See Remand Determination at 9; but see id. at 11 (noting

that bulb size of “S.A.”-grade garlic is “greater than 55 mm”).

Court No. 06-00189 Page 19

gave greater weight to bulb size and “product specificity” in choosing the surrogate value on

remand. See Def. Response at 7; Remand Determination at 8-9, 10-11, 14 (emphasizing significance

of bulb size and garlic prices); id. at 10, 14 (discussing relationship among criteria set forth in Policy

Bulletin 04.1). However, the Remand Determination also addressed other criteria set forth in Policy

Bulletin 04.1, and concluded that the Azadpur APMC data satisfy those too.

For example, the Remand Determination found that the Azadpur APMC data are “publicly

available,” noting that – although the Azadpur APMC Bulletins are not available online – the data

are “readily available to [the] intended audience,” and “are published on each trading day (six days

a week), [are] posted in the APMC’s facilities for public viewing, are electronically archived and

are available upon request.” See Remand Determination at 13-14 (discussing public availability of

Azadpur APMC data); see also id. at 58 (same).13

The Remand Determination further found that the Azadpur APMC data are sufficiently

“contemporaneous,” explaining that Commerce chose the data set beginning May 1, 2006 because

that is the date on which the Azadpur APMC market began differentiating between “A”- and “S.A.”-

grade garlic. See Remand Determination at 14, 58. Because the Azadpur APMC data thus post-date

the period of review by more than one-and-one-half years, Commerce deflated the Azadpur APMC

value to be contemporaneous with the period of review, using the International Monetary Fund

(“IMF”) “Wholesale Price Index.” See Remand Determination at 10, 14-15; Def. Response at 8; see

13

The Remand Determination states at one point that “the APMC bulletins are available daily

online at the Azadpur APMC’s website,” and that “historical bulletins are available upon request.”

See Remand Determination at 58. However, Commerce elsewhere states flatly that “the APMC

Bulletin is not obtainable on the Internet.” See id. at 13-14.

Court No. 06-00189 Page 20

generally Remand Determination at 14, 58 (discussing contemporaneity of Azadpur APMC data).

In addition, Commerce also deducted a 6% “market fee” that is assertedly charged on all sales made

at the Azadpur APMC market. See Remand Determination at 15, 59.14

Finally, while the Azadpur APMC data reflect only two-and-one-half months of information

(rather than the full year covered by the period of review), the Remand Determination nevertheless

found that the data “represent[] a broad market average of large-bulb garlic [prices],” reasoning,

among other things, that the Azadpur APMC market sells “agricultural products from all over

India,” and asserting that the data reflect “a substantial quantity of garlic.” See Remand

Determination at 12-13, 57; see generally id. at 12-13, 57-58, 58-59 (discussing “representativeness”

of Azadpur APMC data).

As detailed below, the Chinese Producers challenge the Remand Determination’s conclusion

that the Azadpur APMC data constitute the “best available information” for use in valuing garlic

bulb, highlighting this as Commerce’s “most critical surrogate value decision,” and attacking the

Azadpur APMC data on multiple fronts. See Remand Determination at 14; Pls. Reply Comments

at 3; see generally Pls. Comments at 2-18 (challenging Remand Determination as to valuation of

garlic bulb); Pls. Reply Comments at 2-12 (same). The Government defends Commerce’s use of

the Azadpur APMC data, arguing that “they were the most product-specific information on the

record and also met Commerce’s other preferred criteria for surrogate values,” and asserting that the

14

Although the Remand Determination refers to the 6% charge as a “market fee,” the

Azadpur APMC data on the record list the 6% charge as a “Commission,” in addition to a “Market

Fee” of 1%. See Azadpur APMC data (section captioned “Information at A Glance”). There is no

indication that the 1% charge has been accounted for, assuming that this information is correct.

Court No. 06-00189 Page 21

Remand Determination as to valuation of garlic bulb should therefore be sustained. See Def.

Response at 5, 9, 16; see generally id. at 4-16 (addressing Remand Determination as to valuation

of garlic bulb). The Domestic Producers support the Remand Determination’s use of the Azadpur

APMC data. See Def.-Ints. Reply Comments at 1-2.

1. “Contemporaneity” of Azadpur APMC Data

As discussed in the introduction to section III above, Policy Bulletin 04.1 sets forth

Commerce’s “well-established criteria for determining the appropriateness of surrogate values under

consideration.” See Remand Determination at 6; Policy Bulletin 04.1; see generally section III,

supra (discussing, inter alia, Policy Bulletin 04.1). According to that policy, “it is [Commerce’s]

stated practice to use . . . prices that are contemporaneous with the period of investigation or

review.” See Policy Bulletin 04.1 (emphasis added) (quoted in Remand Determination at 6). The

Remand Determination further states that “[i]n the selection of surrogate values for garlic bulbs,

[Commerce is] . . . seeking to select as a surrogate value a . . . price average that is . . .

contemporaneous with the period of review” (i.e., November 1, 2003 through October 31, 2004).

See Remand Determination at 6. Nevertheless, the Azadpur APMC data that Commerce ultimately

selected to value garlic bulbs on remand date from mid-2006. See Remand Determination at 14.

The Chinese Producers criticize the Remand Determination’s use of the Azadpur APMC

data, emphasizing that the data are “far from contemporaneous” and, indeed, are the least

contemporaneous of the four sets of data on this administrative record. See Pls. Comments at 12;

see generally Pls. Comments at 2-3, 12-13; Pls. Reply Comments at 8; Remand Determination at

Court No. 06-00189 Page 22

14, 53, 57-58; Def. Response at 13-14. The Chinese Producers note that the Remand Determination

candidly acknowledges that the APMC data are not contemporaneous, but that Commerce concludes

that, as adjusted, the APMC prices are the best available information, because the Azadpur APMC

data are – according to the Remand Determination – the most product-specific. See Pls. Comments

at 12; see also Pls. Reply Comments at 8; Remand Determination at 14.

Although the Chinese Producers stress that the Azadpur APMC data are from

“approximately two years after the mid-point of the period of review,” the Chinese Producers

significantly do not contest any aspect of the methodology that Commerce used to deflate the value

that Commerce derived based on the Azadpur APMC data from mid-2006 levels to be

contemporaneous with the period of review. See Pls. Comments at 2-3; see also Pls. Reply

Comments at 8 (arguing that Azadpur APMC data are “two years removed” from the period of

review) (emphasis omitted); see generally Pls. Comments at 12-13 (discussing contemporaneity of

Azadpur APMC data, but raising no challenge to deflation methodology); Pls. Reply Comments at

8 (same); Def. Response at 8 (stating that Commerce deflated Azadpur APMC data using the IMF

Wholesale Price Index).15

What the Chinese Producers do dispute – vigorously – is the Government’s assertion that the

Remand Determination “reasonably gave greater weight to product-specificity over

15

See also Remand Determination at 10, 14 (stating that, when data selected for surrogate

value post-date the period of review, Commerce’s “normal practice” is to deflate the data to be

contemporaneous); Letter from Commerce to All Interested Parties (July 6, 2009) (Remand Pub.

Doc. 6) (summarizing deflation methodology; explaining that Commerce placed on the record

“Indian price data obtained from the International Monetary Fund’s (‘IMF’) online database . . .

from November 1, 2003, to July 2006,” and used the IMF data to deflate the value that Commerce

calculated from the Azadpur APMC data to be contemporaneous with the period of review here).

Court No. 06-00189 Page 23

contemporaneity.” See Def. Response at 13-14 (citing, inter alia, Remand Determination at 14); id.

at 7, 8 (same); Pls. Reply Comments at 8; see also Pls. Comments at 12 (arguing that “Commerce’s

repeated argument that it must use the non-contemporaneous APMC prices because they are ‘more

specific’ . . . is unpersuasive”); Remand Determination at 14 (discussing trade-off between product

specificity and contemporaneity, and stating that Commerce “does not automatically disregard

surrogate value data which are the most specific . . . solely on the basis that they are post-[period of

review] data”). In particular, the Chinese Producers insist that “it is clear that the [Azadpur] APMC

prices are not specific to the intermediate input [garlic] bulb and are heavily inflated and distorted

by other unknown factors. A simple deflating of the [Azadpur APMC] prices does not remedy these

serious [product specificity] deficiencies.” See Pls. Comments at 12; see also Pls. Reply Comments

at 8.16

The Chinese Producers thus do not actually challenge the Remand Determination’s use of

the Azadpur APMC data on grounds of contemporaneity. But see n.21, infra (questioning Remand

Determination’s use of non-contemporaneous Azadpur APMC data to value garlic with a bulb size

of 40 mm or more, since the Remand Determination and the Market Research Report indicate that

16

According to the Chinese Producers, “the Indian import statistics and the Agmarknet prices

are fully contemporaneous with the [period of review] and provide a far more accurate

representation of the true market price in India during the [period of review].” See Pls. Comments

at 12. The NHRDF data also reflect one full year and are contemporaneous with the period of

review, except that they do not include data for October 2004 (the last month of the period of

review). See Factors Valuations for the Preliminary Results of the Administrative Review and New

Shipper Reviews (Admin. Record Pub. Doc. 400) at 5 (indicating that NHRDF data include

NHRDF quarterly newsletters for October-December 2003, January-March 2004, April-June 2004,

and July-September 2004).

Court No. 06-00189 Page 24

contemporaneous data were available).17 The Chinese Producers’ true, underlying concerns go to

the product specificity of the Azadpur APMC data, and are discussed in section III.A.3, below.

2. “Representativeness” of Azadpur APMC Data

Policy Bulletin 04.1, which sets forth Commerce’s “well-established criteria for determining

the appropriateness of surrogate values under consideration,” explains that “it is [Commerce’s]

stated practice to use . . . review period-wide price averages.” See Policy Bulletin 04.1 (emphasis

added) (quoted in Remand Determination at 6). Moreover, throughout the Remand Determination,

Commerce repeatedly reiterates that it has “historically chosen to use surrogate values that reflect

broad market averages and that cover a substantial time period over price data that are obtained

from so isolated a time frame as to be subject to temporary market fluctuations.” See, e.g., Remand

Determination at 44 (emphases added); id. at 48 (same).18 It is thus Commerce’s standard practice

17

Although the Chinese Producers do not raise a “contemporaneity” challenge to

Commerce’s reliance on the Azadpur APMC data (which postdate the period of review by roughly

two years), it is worth noting that the agency’s position here stands in stark contrast to its position

on the contemporaneity of the Chinese Producers’ price quotes for plastic jars and lids and cardboard

packing cartons (which are much more contemporaneous than the Azadpur APMC data). See

generally section III.D.4.b, infra (discussing the contemporaneity of the price quotes for plastic jars

and lids); section III.E, infra (discussing the contemporaneity of the price quotes for cardboard

packing cartons).

18

See also Remand Determination at 40 (noting that, pursuant to Policy Bulletin 04.1, it is

Commerce’s general practice “to use investigation or review period-wide price averages”) (internal

quotation marks omitted); id. at 42 (same); id. at 43 (asserting that Commerce cannot confirm that

price quotes for cardboard cartons are “representative of prices in the Indian market during the

[period of review]”); id. at 45 (stating that, in Synthetic Indigo from the People’s Republic of China,

Commerce could not determine that price quotes “were representative of the range of prices for the

input during the [period of review]”); id. at 46 (stating that Indian import statistics selected for use

in valuing cardboard cartons are “representative of a range of prices throughout the [period of

review]”); id. at 47 (criticizing price quotes for plastic jars and lids, asserting that they “are not

Court No. 06-00189 Page 25

to seek out values that are both temporally and geographically “representative” of the particular

input (here, raw garlic bulb) at issue. The Chinese Producers contend that, by using the Azadpur

AMPC data in the Remand Determination, Commerce failed on both counts. See Pls. Comments

at 23 (emphasizing that, inter alia, the Azadpur APMC data “are from a single market” and are

“taken from a very limited window of time”).19

a. Temporal Representativeness

Notwithstanding Commerce’s “well-established criteria” and its stated desire to “select as

a surrogate value a period-wide price average,” Commerce here elected on remand to calculate a

surrogate value for the Chinese Producers’ raw garlic bulb using the Azadpur APMC data, which

are not only non-contemporaneous (see section III.A.1, above), but, in addition, represent less than

a quarter of a year’s worth of data. See Remand Determination at 6 (emphasis added); see also id.

at 9 (noting that Azadpur APMC data cover period May 1, 2006 through July 14, 2006); id. at 71,

74 (acknowledging that Azadpur APMC data “encompass a limited time span” and do not represent

representative of prices throughout the [period of review]”); id. at 48 (stating that, on the existing

record, “it is impossible to confirm that the [price quotes for plastic jars and lids] are . . .

representative of prices in the Indian market during the [period of review]”); id. (asserting that “the

record does not demonstrate that the submitted price quotes [for plastic jars and lids] are

representative of . . . prices during the [period of review]”); id. at 49 (stating that, in Synthetic Indigo

from the People’s Republic of China, Commerce could not determine that price quotes “were

representative of the range of prices for the input during the [period of review]”); id. at 50

(concluding that Indian import statistics are best available data for use in valuing plastic jars and lids

because, inter alia, they are “representative of a range of prices throughout the [period of review]”).

19

In litigation challenging the twelfth “new shipper” reviews, the “representativeness” of the

Azadpur APMC data was sustained against arguments generally similar to some of the arguments

raised by the Chinese Producers here. See generally Jining Yongjia Trade Co., 34 CIT at ____,

2010 WL 5121964 * 13 (discussing “Broad Market Average of Super A Grade Garlic Values”).

Court No. 06-00189 Page 26

full year of data).20 To be sure, as the Remand Determination observes, “[t]here is no statutory or

regulatory requirement that [Commerce] use an entire year” of data. See id. at 57-58. However,

while the Remand Determination explains why Commerce selected non-contemporaneous data

(beginning May 1, 2006), and explains that the value that Commerce derived from the 2006 data was

deflated to be contemporaneous with the period of review at issue here, the Remand Determination

is silent as to why Commerce chose to use only two-and-one-half months of data, rather than

deflating and using data for an entire year. See id. at 58 (explaining that Azadpur APMC Bulletin

began listing prices for “S.A.”-grade garlic as of May 1, 2006).21

20

See also Remand Determination at 57 (noting Chinese Producers’ arguments that Azadpur

APMC data are “not sufficiently broad-based” because they “do[] not reflect an entire year” of data);

id. at 53 (same); Pls. Comments at 23 (emphasizing that “[t]he APMC prices are . . . taken from a

very limited window of time”). .

In contrast to the Azadpur APMC data on which the Remand Determination relies, the other

three data sets on the administrative record – i.e., the Agmarknet price data, the Indian import

statistics, and the NHRDF data – all reflect one full year of data, and all three are contemporaneous

with the period of review (with one minor exception as to the NHRDF data). See Factors Valuations

for the Preliminary Results of the Administrative Review and New Shipper Reviews (Admin.

Record Pub. Doc. 400) at 6 (stating that Agmarknet data on the record include India-wide data for

garlic values “for each day of the period of this review”); id. (stating that Indian import statistics on

the record cover “the period November 2003 through October 2004”); id. at 5 (stating that NHRDF

data on the record consist of NHRDF quarterly newsletters for October-December 2003, January-

March 2004, April-June 2004, and July-September 2004, thus covering one full year, and the entire

period of review with the exception of October 2004, the last month of the period of review).

21

The Remand Determination states that Commerce “chose to use price data from the

Azadpur APMC starting on May 1, 2006, because that was the date at which the Azadpur APMC

began denoting large size garlic bulb sales into ‘A’ and ‘Super-A’ values.” See Remand

Determination at 58. The Remand Determination thus makes it clear that May 1, 2006 was not the

first day on which what is now known as “S.A.”-grade garlic was sold at the Azadpur APMC, or the

first day on which large-bulb garlic was sold at the Azadpur APMC, but – rather – that May 1, 2006

was the first day on which large-bulb garlic was separated into grade “A” and grade “S.A.” garlic.

The Market Research Report confirms that, before that date, all such large-bulb garlic was sold

Court No. 06-00189 Page 27

The Remand Determination similarly fails to explain how Commerce has assured itself that

data “obtained from so isolated a time frame as to be subject to temporary market fluctuations” in

fact are not distorted by such “fluctuations.” See, e.g., Remand Determination at 44; id. at 48

(same). Indeed, the Market Research Report seems to indicate that garlic prices in India are subject

to seasonal fluctuation:

Being a seasonal crop, the price of garlic (at both the wholesale and retail level) is

determined by demand-supply factors. Prices generally remain low during the peak

supply period (February to May) when the new crop arrives and begin to rise

thereafter peaking towards the end of the year (October-December).

Market Research Report at 19; see also id. at 26 (noting that “garlic is a seasonal crop,” and that

simply as grade “A.” See, e.g., Market Research Report at 21 (indicating that, as of 2003, “Grade

A” garlic was garlic with a bulb diameter of anything “Above 40 mm (typically 40-55 mm)”). As

such, it is entirely unclear why the May 1, 2006 date has any significance for Commerce’s selection

of data for this review, since Commerce here decided to rely on data for grade “A” garlic, as well

as garlic graded “S.A.”

In other words, if (as the Remand Determination and the Market Research Report indicate)

what was sold as grade “S.A.” garlic on May 1, 2006 was being sold in 2003 (up through April

2006) as grade “A” garlic, and given Commerce’s determination that both “A”- and “S.A.”-grade

garlic should be used in valuing the raw garlic bulb here, there would appear to be no reason for

Commerce to use non-contemporaneous data from the Azadpur APMC market. All other things

being equal, Commerce could (and should) have used contemporaneous Azadpur APMC data for

grade “A” garlic for the actual period of review (November 1, 2003 through October 31, 2004),

because – according to the Remand Determination and the Market Research Report – those

contemporaneous data would include what (as of May 1, 2006) became known as grade “A” and

grade “S.A.” garlic. It is worth underscoring that, in support of its claims concerning the “public

availability” of the Azadpur APMC data, the Remand Determination notes several times that

Azadpur APMC data for past years are “electronically archived” and readily “available upon

request.” See, e.g., Remand Determination at 13-14, 58.

For a variety of reasons discussed herein, Commerce’s selection of a surrogate value for raw

garlic bulb must be remanded for a second time. This particular issue obviously should be clarified

and addressed by the agency on remand.

Court No. 06-00189 Page 28

“domestic garlic prices tend to rise” from “August-December”); id. at 19-20, 22 (charting wholesale

and retail price trends); Pls. Reply Comments at 8 (referring to “drastic fluctuations of the available

‘A’ and ‘S.A.’ garlic prices from 1000 Rupees to 2425 within the span of just a few months”).22

The Remand Determination acknowledges that the Azadpur APMC data cover a mere two-

and-one-half months, but maintains that the data are nevertheless “broad-based” because the data

reflect “a substantial quantity of garlic.” See Remand Determination at 57; see also id. at 71, 74

(stating that Azadpur APMC data reflect “an extremely high volume of sales”); Def. Response at

22

Commerce’s action in turning a blind eye to the problem of the temporal representativeness

of garlic prices here is difficult to square with its position on the price quotes that the Chinese

Producers have submitted for plastic jars and lids and for cardboard packing cartons.

As noted above, there is affirmative record evidence of significant seasonal fluctuation in

garlic prices; and – even if there were no such affirmative evidence – seasonal fluctuation in the

prices of agricultural produce is the norm. See Market Research Report at 19, 20, 22 (documenting

seasonal fluctuations in Indian prices for fresh garlic); section III.D.4.b, infra (noting that not all

commodities or factors of production are equally susceptible to price fluctuations, and that

agricultural produce in particular is frequently subject to seasonal fluctuation). Nevertheless,

Commerce expressed no concern about distortion resulting from “temporary market fluctuations”

in the price of garlic.

On the other hand, Commerce has expressed major concerns about the temporal

representativeness of the price quotes for plastic jars and lids and cardboard packing cartons. See,

e.g., Remand Determination at 58-59 (asserting that prices of jars and lids and cardboard cartons are

“substantially more vulnerable to abnormal market fluctuations” than garlic prices); id. at 57-58

(seeking to contrast “the volume of sales” reflected in the Azadpur APMC data with price quotes

for cartons and jars); id. at 71, 74 (asserting that prices of cartons and jars and lids are “highly

susceptible to market fluctuations”). Yet, unlike fresh garlic, there is no affirmative record evidence

of fluctuation in the prices of plastic jars and lids and cardboard packing cartons. Nor is there any

obvious reason why, unlike fresh garlic, the prices of jars and lids and cardboard cartons would be

subject to any significant fluctuation over the course of a year. See section III.D.4.b, infra

(analyzing Commerce’s criticisms of the “representativeness” of price quotes for jars and lids);

section III.E, infra (analyzing Commerce’s criticisms of the “representativeness” of price quotes for

cardboard cartons); see also Remand Determination at 57-58, 58-59, 71, 73-74; Pls. Comments at

23, 29; Def. Response at 26, 28-29.

Court No. 06-00189 Page 29

26 (same). The Remand Determination thus seeks to buttress Commerce’s claims that the Azadpur

APMC data are temporally “representative” by asserting that a high volume of garlic sufficiently

compensates for the lack of temporal “representativeness.” As the Chinese Producers demonstrate,

however, the Remand Determination’s claims as to the representativeness and significance of the

Azadpur APMC data cannot withstand scrutiny. See generally Pls. Comments at 9-10; Pls. Reply

Comments at 5-6.

The Remand Determination’s analysis of the representativeness of the Azadpur APMC data

(and, to some extent, the related sections of the Government’s brief) are replete with both

fundamental errors in logic and flagrant mistakes of fact. For example, as quoted above, the

Remand Determination states that, although the Azadpur APMC data cover only two-and-one-half

months, the data “contain a substantial quantity of garlic.” See Remand Determination at 57. As

a matter of pure logic, however, the lack of temporal representativeness cannot be cured by the

quantity of the commodity or the number of data points reflected in the limited time period.

Assume, for example, that a party proffered to Commerce data from some source that reflected 5,000

sales of “S.A.”-grade garlic, or data from some source that reflected 50 sales of “S.A.”-grade garlic

of 100 pounds each, but those sales were on a single day. In such a case, no matter how great the

total quantity of the commodity sold or the total number of sales reflected in the data, those data

logically could not reflect seasonal or other price fluctuations, and therefore could not “represent”

a full year of data. The statement in the Remand Determination is thus illogical, because it equates

volume or number of sales with temporal representativeness. This flaw in logic pervades and taints

the Remand Determination’s entire analysis of representativeness. Commerce’s analysis of temporal

Court No. 06-00189 Page 30

representativeness is built on quicksand.

The statement from the Remand Determination quoted above is illogical for a second,

equally important reason. Even assuming (as the Remand Determination does) that the volume or

number of sales compensates (in some fashion) for a lack of temporal representativeness (which it

does not), the issue at hand is whether the Azadpur APMC data are sufficiently representative of

prices for grades “A” and “S.A.” garlic. However, the statement quoted above asserts simply that

the Azadpur APMC data “contain a substantial quantity of garlic,” without reference to grade. See

Remand Determination at 57. Thus, as a matter of pure logic, the statement in the Remand

Determination does nothing to support the Remand Determination’s claims concerning the

representativeness of the Azadpur APMC data as to the specific grades of garlic at issue here.

Other statements in the Remand Determination reflect egregious factual errors, and

demonstrate that Commerce does not understand either the meaning of the Azadpur APMC data or

their limitations. Careful review of the Azadpur APMC data reveals that those data tell Commerce

absolutely nothing about the volumes of “A”- and “S. A.”-grade garlic that were delivered to the

Azadpur APMC market during the two-and-one-half month period, because all Azadpur APMC data

on volume are aggregate data for all grades of garlic as a whole. In other words, the Azadpur

APMC data on volume are not broken down by grade of garlic. From the Azadpur APMC data on

the existing record, it is therefore simply not possible to determine the quantity of grades “A” and

“S.A.” garlic that were delivered to the Azadpur APMC market during the two-and-one-half month

period. See Azadpur APMC data; Remand Determination at 53, 58 (noting Chinese Producers’

point that Azadpur APMC data specifies only total aggregate volume of garlic, and does not break

Court No. 06-00189 Page 31

that figure down by grades of garlic); Pls. Comments at 5, 9-10; Pls. Reply Comments at 6.23

Moreover, even as to all grades of garlic as a whole, the Azadpur APMC data tell Commerce

nothing whatsoever about actual garlic sales (except to the extent that one assumes that all garlic

delivered to the Azadpur APMC market eventually sells, at some price), because the Azadpur

APMC data provide no specific information on sales, and instead document only arrivals (deliveries)

of garlic at the market. See Azadpur APMC data; see also Remand Determination at 53, 58 (noting

Chinese Producers’ point that Azadpur APMC data does not document sales, and instead documents

only volume of garlic delivered to market); Pls. Comments at 5, 9 (same).24 But, in any event, even

23

On each market day, the Azadpur APMC data report the total volume (in tons) of garlic of

all grades that arrived at the market the preceding market day, in a column captioned “Arrival

Variety in Tons.” See Azadpur APMC data; Letter from Commerce to All Interested Parties (June

5, 2009) (Remand Pub. Doc. 1) (stating that Azadpur APMC Bulletins include data from “the

previous trading day”). Another column, captioned “Grade/Size,” lists the grades of garlic offered

for sale on that day. See Azadpur APMC data. However, the volume of garlic arriving at the market

is not broken down by grade of garlic. See id. Thus, from the Azadpur APMC data on the record,

it is impossible to determine the volume of grade “A” and/or “S.A.” garlic delivered to the Azadpur

APMC market on any given day, or even the aggregate volume of grades “A” and “S.A.” garlic

delivered during the entire two-and-one-half month period reflected in the data that Commerce

placed on the record.

24

As noted above, for each market day, the Azadpur APMC data report the total volume (in

tons) of garlic of all grades that arrives at the Azadpur APMC market, in a column captioned

“Arrival Variety in Tons.” See Azadpur APMC data. Another column, captioned “Grade/Size,”

lists the grades of garlic offered for sale on that day. See id. And the day’s offer prices for each

grade are specified in columns captioned “Mini” (minimum), “Maxi” (maximum), and “Modal.”

See id. However, the Azadpur APMC data include no data whatsoever on actual garlic sales – not

even data on aggregate sales, and certainly no data on specific, individual sales. See id. Thus, from

the Azadpur APMC data on the record, it is impossible to determine the volume of garlic sold on

any particular day – or even the total volume of garlic sold during the two-and-one-half month

period reflected in the data that Commerce placed on the record here.

The Remand Determination asserts (in essence) that it is reasonable to assume that all garlic

delivered to the Azadpur APMC market was sold. See Remand Determination at 58; Def. Response

Court No. 06-00189 Page 32

the assumption that all garlic delivered to the market is eventually sold (at some price) does not

permit Commerce to derive any information whatsoever as to the volume of sales of “A”- and

“S.A.”-grade garlic, because (as discussed immediately above) the Azadpur APMC data provide no

information on the volume of “A”- and “S.A.”-grade garlic delivered to the market. See Azadpur

APMC data; Pls. Comments at 5, 9-10; Pls. Reply Comments at 6. Further, even the assumption that

all garlic delivered to the market is eventually sold (at some price) does not permit Commerce to

derive from the Azadpur APMC data any information about the actual dates on which any or all

sales were made, or the prices paid for those sales. Numerous statements in the Remand

Determination indicate that Commerce fails to grasp even these most basic facts.

For example, the Remand Determination states that the Azadpur APMC data “contain[] a

list of all fruit and vegetable sales on any particular day at the [Azadpur] APMC [market].” See

Remand Determination at 9 (emphasis added). As discussed above, however, the Azadpur APMC

data in fact include no information whatsoever on any specific sales – much less “a list of all . . .

[individual] vegetable sales on any particular day,” as the Remand Determination states. See

Azadpur APMC data. The statement in the Remand Determination is thus flatly incorrect – as is the

at 12-13. However, even that assumption is of no real use to Commerce. First, all garlic delivered

to the market on a particular date was not necessarily sold on that date. As the Azadpur APMC data

indicate, garlic was offered for sale at the Azadpur market even on days when no garlic was

delivered. See Azadpur APMC data (for example, data for May 8, 2006, listing offer prices for

garlic, but indicating that no garlic arrived at the market on that date); see also Pls. Comments at 9-

10 (noting that “some [Azadpur APMC] bulletins do not show any arrival amount for garlic but still

show [offer price] data”). There is thus no way to correlate garlic volume with daily sale prices,

since there is no way to ascertain the day on which any particular volume of garlic was sold.

Moreover, even more fundamentally, as discussed above, the volume of garlic delivered to the

market is not broken down by grade. There is thus no way to correlate garlic volume with garlic

grade (much less the price for that grade on any assumed day of sale).

Court No. 06-00189 Page 33

Government’s claim that the Azadpur APMC data “included ‘numerous specific garlic sales.’” See

Def. Response at 7-8 (citation omitted).

The Remand Determination further states that the Azadpur APMC data “note[] the weight

of each sale, the region from which the produce originates, and the grade or size of the product.”

See Remand Determination at 9 (emphases added). But, again, the Azadpur APMC data provide

absolutely no sales-specific information, much less information on “each [individual] sale.” The

Azadpur APMC data emphatically do not provide information on “the weight,” the “region” of

origin, and the “grade or size” of “each sale.” See Azadpur APMC data; Pls. Comments at 9

(explaining that Azadpur APMC data “offer no sales-specific details regarding grades of garlic”).25

25

The Azadpur APMC data include two types of “weight” information for fresh garlic. As

discussed above, the data identify, for each market day, the aggregate volume of all grades of garlic

delivered to the market, under a column captioned “Arrival Variety in Tons.” In addition, the data

identify the unit of measure by which garlic is offered for sale at the market, under the column

captioned “Weight in Kg.” As the Azadpur APMC data indicate, garlic is sold in “40 kg. katta[s],”

or jute bags. See Azadpur APMC data (under column, “Weight in Kg,” for garlic); Market Research

Report at 20 (noting that garlic is sold in jute bags). Significantly, neither of these two types of

“weight” data are sales data, much less data on specific, individual sales as the Remand

Determination states. Thus, contrary to the Remand Determination’s claim, the Azadpur APMC

data emphatically do not “note[] the weight of each sale.” See Remand Determination at 9.

Similarly, the Azadpur APMC data indicate where garlic that was delivered to the market

arrived from, under a column captioned “Name of the Comm. & State.” See Azadpur APMC data

(under column, “Name of the Comm. & State,” for garlic). Yet again, however, that information is

not correlated in any way to sales, much less specific, individual sales. Thus, contrary to the

Remand Determination’s claim, the Azadpur APMC data clearly do not specify for “each sale,” “the

region from which the produce originates.” See Remand Determination at 9.

As indicated above, the Azadpur APMC data also note the various grades of garlic offered

for sale on each market day, under a column captioned “Grade/Size.” See Azadpur APMC data

(under column captioned “Grade/Size,” for garlic). But, once again, that information is not

correlated in any way with any information on sales, much less data on specific, individual sales.

Accordingly, contrary to the Remand Determination’s claim, the Azadpur APMC data plainly do

Court No. 06-00189 Page 34

The statement in the Remand Determination is thus demonstrably untrue. Indeed, it is difficult to

conceive that such statements could be made by anyone who gave the Azadpur APMC data even

the most cursory review.

In addition, the Remand Determination states that the Azadpur APMC data “provide[] a

minimum, maximum, and a modal price for each commodity sold.” See Remand Determination at

9. As discussed above, however, the Azadpur APMC data provide no specific data at all concerning

actual individual sales. See Azadpur APMC data. The Azadpur APMC data themselves do not

establish (except by inference) that any garlic of any grade was actually sold at the Azadpur APMC

market, much less the price that was actually paid for any particular sale. Certainly the data say

nothing about any actual sales (much less actual prices paid) for garlic graded “A” and “S.A.” – the

only grades of garlic that are at issue here.

Elsewhere, the Remand Determination asserts that the Azadpur APMC data are “largely

comprised of numerous specific garlic sales from several of the northern long-day growing regions,

including Himachal Pradesh, Punjab, and Haryana”26 (i.e., several of the regions where – according

to the Market Research Report – larger-bulbed garlic is grown). See Remand Determination at 12

(emphases added); Def. Response at 7-8; Market Research Report at 16 (stating that India’s “‘Long

Day’ Zone” includes “Himachal Pradesh, Jammu and Kashmir, Punjab, Haryana, Uttaranchal, [and]

not indicate “the grade or size of the product” for “each sale.” See Remand Determination at 9.

26

The Remand Determination similarly asserts that “the Azadpur APMC dataset . . . us[ed]

to generate a surrogate value [in the Remand Determination] . . . is overwhelmingly made up of

garlic grown in [the “long-day”] regions.” See Remand Determination at 54-55 (emphasis added).

However, just as there is no basis on the record for concluding that the Azadpur APMC data are

“largely comprised” of “garlic sales from several of the northern long-day growing regions” (see

id. at 12), so too there is no basis on the record for reaching this related conclusion.

Court No. 06-00189 Page 35

Northern Parts of Uttar Pradesh”).27 Yet again, the Remand Determination refers to “sales,” even

though, as discussed above, the Azadpur APMC data provide no sales-specific information

whatsoever – much less information on any “specific [individual] garlic sales,” as the Remand

Determination asserts. See Remand Determination at 12 (emphasis added); Pls. Comments at 9

(noting that Azadpur APMC data “offer no sales-specific details regarding . . . the region in which

the garlic was grown”); see also id. at 5.

Further, even the data on the aggregate total volume of garlic delivered to the Azadpur

market are not broken down by the state from which that garlic arrived. See Azadpur APMC data;

Pls. Comments at 5 (explaining that the Azadpur APMC data do not indicate “the amount [of garlic]

received [at the market] from each particular state”); Pls. Reply Comments at 6 (same).28 It thus

goes without saying that there is also no basis whatsoever for the Remand Determination’s claim

that the Azadpur APMC data are “largely comprised” of sales from the states of Himachal Pradesh,

Punjab, and Haryana. See Remand Determination at 12 (emphasis added).

Moreover, to the extent that the Remand Determination seeks to suggest that any sales from

the specified states (i.e., Himachal Pradesh, Punjab, and Haryana) would be, by definition, sales of

larger-bulbed garlic, that notion is dispelled by the Azadpur APMC data themselves. One of the

27

The Market Research Report makes it clear that the so-called “long-day” zone includes

Himachal Pradesh, Jammu and Kashmir, Punjab, Haryana, Uttaranchal, and Uttar Pradesh. See

Market Research Report at 10-11, 16; but see id. at 17-18 (discussing “long-day” zone, but omitting

reference to Uttar Pradesh). The Remand Determination states that the “long-day” zone “primarily”

includes Uttar Pradesh (as well as Himachal Pradesh, Punjab, Uttaranchal, and Haryan), but omits

any reference to Jammu and Kashmir. See Remand Determination at 54.

28

In addition, as discussed below, the record does not establish that the state from which the

garlic was delivered is in fact the state where the garlic was grown. See section III.A.2.b, infra.

Court No. 06-00189 Page 36

relatively few things that can be said with certainty based on the Azadpur APMC data is that they

clearly list prices for garlic from Himachal Pradesh, Punjab, and Haryana not only for higher, larger-

bulbed grades (i.e., grades “A” and “S.A.”), but also for garlic of lower grades as well. See Azadpur

APMC data (garlic data for, inter alia, July 3, 2006, listing offer prices for grades “B” and “C,” as

well as “A” and “S.A.,” from Himachal Pradesh (“HP”), Punjab (“PUN”), and Haryana (“HAR”),

as well as other states).

In addition, the Remand Determination states that the Azadpur APMC data “for super-A and

A grades of garlic contains 198 points of data, representing over one thousand tons of garlic sold

over a period of several months.” See Remand Determination at 13; see also Def. Response at 12

(same); Remand Determination at 71, 74 (asserting that Azadpur APMC data “include hundreds of

data points”); Def. Response at 26 (same). This statement too is riddled with inaccuracies.29

29

Elsewhere, the Remand Determination asserts that the Azadpur APMC data “represent[]

an extremely high volume of sales.” See Remand Determination at 71, 74; see also Def. Response

at 26 (same). Quite apart from the fact that the Azadpur APMC data in fact include no “sales”-

specific data (as noted repeatedly herein), it is unclear whether the quoted statement is intended to

refer to “sales” of garlic in general, or to “sales” of garlic graded “A” and “S.A.” If the reference

is to garlic in general, the statement is not relevant to the issue of the “representativeness” of the

Azadpur APMC data. On the other hand, if the reference is to garlic graded “A” and “S.A.,” then

the statement lacks support in the administrative record, because the Azadpur APMC data do not

break down by grade the volume of garlic delivered to the Azadpur market. Further, even if sales

figures for “A”- and “S.A.”-grade garlic were available on the record, it would be difficult to credit

the Remand Determination’s claim that the volume of such sales at the Azadpur market is

“extremely high” absent data on the total sales of such garlic nationwide, or at least at other markets,

to put the Azadpur figures in proper context. See generally Jining Yongjia Trade Co., 34 CIT at

____, 2010 WL 5121964 * 13 (noting representation, in litigation challenging twelfth “new shipper”

reviews for period November 1, 2006 to April 30, 2007, that garlic sales at the Azadpur APMC

market “accounted for 5.583 percent of all garlic transactions across India in 2006”).

The Remand Determination makes the point that “the overall value [or volume] of the garlic

sold” at the Azadpur APMC market is “irrelevant” – because, the Remand Determination

Court No. 06-00189 Page 37

As a threshold matter, the claimed “198 points of data” is virtually meaningless. Although

the Remand Determination offers no explanation of the provenance of the “198” figure, close review

of the Azadpur APMC data reveals that it is nothing more than the total number of offer prices for

“A”- and “S.A.”-grade garlic listed (two, three, or four per day) for the two-and-one-half month

period. In other words, the Azadpur APMC Bulletin page for May 1, 2006 lists prices for “A”- and

“S.A.”-grade garlic for “UP/HAR” (i.e., Uttar Pradesh and Haryana), which Commerce counts as

two “points of data”; and, in addition, the same page of the APMC Bulletin also lists prices for “A”-

and “S.A.”-grade garlic for “MP/RAJ/KOTA (NC)” (i.e., Madhya Pradesh, Rajasthan, and

(apparently) the city of Kota), which Commerce counts as another two “points of data,” for a total

of four “points of data” for May 1, 2006. Commerce continued this same counting process,

reviewing the Azadpur APMC data for each market day in the two-and-one-half month period, and

came up with the total of “198 points of data.”30 As discussed above, however, these “points of

data” correlate only to offer prices. As such, the number of “points of data” – whether 198 or even

199,888 – says nothing whatsoever about how many (if any) sales of “A”- and “S.A.”-grade garlic

were actually made during the two-and-one-half month period, or the prices actually paid in any

such sales. Any implication that the figure reflects 198 sales of “A”- and “S.A.”-grade garlic is

underscores, “what matters is the data with respect to the ‘A’ and ‘Super-A’ garlic grades.” See

Remand Determination at 58; see also Def. Response at 13 (discussing same point). The Remand

Determination’s assessment is spot-on; but it is precisely that information which is missing from the

Azadpur APMC data on the record.

30

Careful review of the Azadpur APMC data suggests that the Remand Determination may

have missed several “points of data” (as the Remand Determination refers to them), and that the

actual count should be not 198, but instead 205. See Azadpur APMC data.

Court No. 06-00189 Page 38

absurd.31

The Remand Determination’s assertion that the “198 points of data” for “super-A and A

grades of garlic” represent “over one thousand tons of garlic sold over a period of several months”

is even more inaccurate. See Remand Determination at 13. First, the Remand Determination again

suggests that the Azadpur APMC data include actual sales figures, which they do not. Moreover,

the reference to “over one thousand tons” of “super-A and A grades of garlic” is a reference to the

page of the Azadpur APMC data that is captioned “Prices of Garlic, S.A. Grade, May 1st-July 14th

2006,” which lists at the bottom of the column “Tons” the total “1,032.” See Remand Determination

at 13; Azadpur APMC data. As the caption on the page itself indicates, the price data reflected there

are limited solely to “S.A.”-grade garlic – and to “S.A.”-grade garlic from the state of Himachal

Pradesh, at that. See Azadpur APMC data (page captioned “Prices of Garlic, S.A. Grade, May 1st-

July 14th 2006,” listing “HP” (Himachal Pradesh) under column captioned “State”).

Thus, contrary to Commerce’s representations in the Remand Determination, the page of

Azadpur APMC data at issue includes no data whatsoever on grade “A” garlic; and, even as to grade

31

The number in the Remand Determination would be no more meaningless if Commerce had

tripled the number of “points of data” by counting each grade “A” and “S.A.” listing three times (for

a total of 615 “points of data”) – to reflect the “Mini” (minimum) offer price, the “Maxi”

(maximum) offer price, and the “Modal” offer price. See Azadpur APMC data. Whether the

number of “points of data” is 198, 205, or 615, the figure is largely artificial and meaningless.

The actual number of garlic sales made at the Azadpur APMC market during the two-and-

one-half month period could be either higher or lower than 198, 205, or 615; there is simply no way

to ascertain the actual number of sales from the Azadpur APMC data on the record. The critical

point is that the Azadpur APMC data include no specific sales information of any sort – no specific

sales data whatsoever – and the “points of data” that Commerce is counting reflect nothing more

than offer prices, not specific, individual sales.

Court No. 06-00189 Page 39

“S.A.” garlic, the page does not include all “S.A.”-grade garlic, but, rather, only that “S.A.”-grade

garlic which came from one particular state. Finally, and most importantly, the figure that the

Remand Determination touts – “over one thousand tons” (or 1,032 tons, to be exact) – has no

relationship to the grade “S.A.” garlic from Himachal Pradesh that is the subject of the page, or to

any other specific grade of garlic. Instead, each of the figures in the “Tons” column represents the

total tonnage of garlic of all grades that was delivered to the Azadpur APMC market on the 30 days

listed on the page, which totals 1,032 tons.

In sum, while the Remand Determination claims that the referenced Azadpur APMC data

document the sales of “over one thousand tons” of “super-A and A grades of garlic” over a period

of two-and-one-half months (see Remand Determination at 13), the facts are that: (a) the Azadpur

APMC volume figures are for deliveries of garlic to the Azadpur APMC market, not for sales; (b)

the specific Azadpur APMC data to which the Remand Determination refers do not cover grade “A”

garlic, but, rather, are limited to grade “S.A.” – and, in fact, are confined to grade “S.A.” garlic from

the state of Himachal Pradesh; and (c) the “over one thousand tons” figure that Commerce trumpets

is actually for all grades of garlic (not grades “S.A.” and/or “A”) delivered to the Azadpur APMC

market and, moreover, reflects only those deliveries made on those days when grade “S.A.” garlic

from Himachal Pradesh was offered for sale. The Remand Determination thus evidences shockingly

little comprehension of the Azadpur APMC data.

b. Geographic Representativeness

As discussed above, the existing administrative record cannot support the Remand

Determination’s conclusion that the Azadpur APMC data are temporally representative of the

Court No. 06-00189 Page 40

Chinese Producers’ raw garlic bulb. As to geographic representativeness, the Remand

Determination emphasizes that it is Commerce’s practice to use “country-wide data” rather than

“regional data,” whenever possible. See Remand Determination at 12; see also Def. Response at

6 (stating that Commerce seeks data that are “representative of broad market average prices in

India”). But, much like its claims as to the temporal representativeness of the Azadpur APMC data,

so too the Remand Determination’s claims that the Azadpur APMC data are geographically

representative lack adequate support in the existing record. See generally Remand Determination

at 12-13, 54-55, 58 (discussing representativeness of Azadpur APMC data); see also Def.-Ints.

Reply Comments at 2 (asserting that Azadpur APMC data reflect “a broad market average in

India”).

A number of the Remand Determination’s statements are simply not relevant to the issue of

geographic representativeness. The Remand Determination states, for example, that the Azadpur

APMC market has been designated a “Market of National Importance.” See Remand Determination

at 13. Without more, however, that fact is meaningless. There is no indication that designation as

a “Market of National Importance” is anything other than some sort of honorary recognition of the

market’s historical significance. Certainly there is no indication that the designation is evidence of

any fact that bears on the “representativeness” of the data on “A”- and “S.A.”-grade garlic at issue

here.

Similarly, the Remand Determination’s representation that, as of 2003, the Azadpur APMC

market was “not only the largest APMC [market] in India, but . . . also the largest in Asia” says

nothing whatsoever that is specific to garlic, much less garlic of the particular grades at issue here.

Court No. 06-00189 Page 41

See Remand Determination at 13 (citing Market Research Report at 21). The same is true of the

Government’s assertion that the Azadpur APMC market is “the largest fruit and vegetable market

in Asia.” See Def. Response at 12. The statement says nothing about garlic, not to mention garlic

that is graded “A” or “S.A.”

The Remand Determination’s finding that the Azadpur APMC market is “India’s ‘National

Distribution Centre’ for several agricultural products, including garlic” at least refers to garlic in

general; but, again, the statement is not specific to grades “A” and “S.A.,” and thus is entitled to

little, if any, weight in evaluating the representativeness of the Azadpur APMC data. See Remand

Determination at 13; see also id. at 71, 74 (asserting that Azadpur market is “major distribution

center” of unspecified types of produce).32

The Remand Determination further asserts that the Azadpur APMC market “covers broad

territory in India,” and that “agricultural products from all over India are sold” at the Azadpur

market. See Remand Determination at 13. However, it is unclear what is meant by the claim that

the market “covers broad territory,” and – in any event – the statement is in no way specific to garlic

as a whole, not to mention “A”- or “S.A.”-grade garlic. Similarly, even assuming (without

accepting) that the second quoted statement is true as phrased, “agricultural products” in general are

32

According to the Remand Determination, Commerce took both the statement that the

Azadpur APMC market is a “National Distribution Centre” and the statement that it is a “Market

of National Importance” from the Azadpur APMC’s website. See Remand Determination at 13

(internal quotation marks omitted). But the Remand Determination does not indicate when

Commerce consulted the website. It seems unlikely that Commerce would have done so before the

Azadpur APMC data were first placed on the record of the 2004-2005 review (in August or

September 2006); and it may have been much later. It is thus unclear whether the two statements

were true at the time of the period of review (i.e., November 1, 2003 through October 31, 2004).

Court No. 06-00189 Page 42

not at issue in this action. Even if true, the statement says nothing about the sales of “A”- and

“S.A.”-grade garlic at the Azadpur APMC market.

Any implication that grade “A” and “S.A.” garlic “from all over India [is] sold at the APMC

[market]” is contradicted by another statement in the Remand Determination, which indicates that

“the total data set for super-A and A grades of garlic” used on remand “comes from a broad array

of seven Indian states.” See Remand Determination at 13. But, despite the reference to “seven

Indian states,” the sentence actually lists only five states – specifically, “Uttar Pradesh, Rajasthan,

Madhya Pradesh, Haryana, and Himachal Pradesh.” See id. In any event, an independent review

indicates that the Azadpur APMC data list six states as origins of grades “A” and/or “S.A.” garlic

– including the five states listed immediately above, as well as Punjab, plus “KOTA” (which appears

to refer to a city). Given that India comprises no fewer than 28 states (as well as a number of official

“territories,” including the National Capital Territory of Delhi, where the Azadpur APMC market

is located) and given that several major garlic-producing states are not reflected in the Azadpur

APMC data, it is clear that “A”- and “S.A.”-grade garlic “from all over India” is not sold at the

Azadpur APMC market. See Market Research Report at 7, 9; Azadpur APMC data.33

33

This same analysis disposes of the Government’s claim that “garlic from a broad number

of Indian states is sold at the Azadpur market.” See Def. Response at 12. As discussed above, the

Azadpur APMC data indicate that garlic is delivered to the Azadpur market from six states, as well

as “KOTA.” See Azadpur APMC data. And, even more to the point, garlic in general is not

relevant; what matters is garlic that is graded “A” and “S.A.”

The record does not specifically identify the number of Indian states that grow grade “A”

and/or “S.A.” garlic. However, the Market Research Report states that garlic production is

concentrated in six states which are reflected in the Azadpur APMC data (i.e., Madhya Pradesh,

Rajasthan, Punjab, Haryana, Himachal Pradesh, and Uttar Pradesh), but also in four states that are

not reflected in those data (i.e., Gujarat, Maharashtra, Orissa, and Uttaranchal). See Market

Court No. 06-00189 Page 43

Further, the Remand Determination seems to assume that the origin listed in the Azadpur

APMC data is the place where the produce (including garlic) was grown. As the Chinese Producers

note, however, it does not appear that the location listed in the Azadpur APMC data is necessarily

the place where the produce was grown. See Pls. Comments at 9; Azadpur APMC data (column

captioned “Name of the Comm. & State”). Certainly there is no record evidence to affirmatively

establish that the origin listed in the Azadpur APMC data is the place where the produce was

actually grown. And, in fact, there is evidence that appears to indicate to the contrary. For example,

the Remand Determination notes that the Market Research Report states that garlic imported from

China is sold at the Azadpur APMC market. See Remand Determination at 55; Market Research

Report at 21-22, 29. But nowhere do the Azadpur APMC data show China as the origin of any of

the garlic listed there. See Azadpur APMC data (column captioned “Name of the Comm. & State”).

More to the point, however, the proper focus of Commerce’s geographic

“representativeness” criterion is not on matters such as where the garlic was grown, where the garlic

was located before it arrived at the Azadpur APMC market, or where the Azadpur APMC market

Research Report at 7; Azadpur APMC data. The Market Research Report indicates that the four

states of Madhya Pradesh, Gujarat, Maharashtra, and Rajasthan accounted for 68% of national garlic

production. See Market Research Report at 7; Azadpur APMC data. But two of those states –

Gujarat and Maharashtra – are not reflected in the Azadpur APMC data. See Azadpur APMC data.

The Market Research Report further states that the “North Indian garlic belt” accounted for roughly

15% of the country’s garlic production and is “the only garlic producing belt in India where garlic

is grown under ‘long-day’ conditions.” See Market Research Report at 7. The states in the “long-

day” zone include Punjab, Haryana, Himachal Pradesh, and Uttar Pradesh (which are reflected in

the Azadpur APMC data); but the zone also includes Jammu and Kashmir and Uttaranchal – states

which are not reflected in the data. See id. at 10-11, 16; Azadpur APMC data. Finally, the Market

Research Report also identifies “[k]ey garlic producing districts” in the states of Bihar, Tamil Nadu,

and Karnataka, as well as a “pocket” in the state of Kerala, none of which are reflected in the

Azadpur APMC data. See Market Research Report at 6-9; Azadpur APMC data.

Court No. 06-00189 Page 44

is located within India (or in relation to anything else). The issue is not the geographic

“representativeness” of the Azadpur APMC market itself or the geographic “representativeness” of

the garlic or other produce marketed there. Rather, the proper focus of geographic

“representativeness” here is whether the prices reflected in the Azadpur APMC data are

“representative” of prices across India (and are not, for example, aberrational or distorted local or

regional prices).34

As the Chinese Producers point out, “Commerce itself acknowledges that Azadpur is just one

of numerous APMC markets throughout India.” See Pls. Comments at 10; see also id. at 2, 23

(emphasizing that Azadpur APMC data reflect prices for only a single market); Remand

Determination at 53 (noting Chinese Producers’ argument that data reflect prices for only a single

market); Market Research Report at 1-2 (noting that Agricultural Produce Marketing Committees

(“APMCs”) have “wholesale markets spread across India,” including markets in Maharashtra,

Haryana, Chandigarh, and Himachal Pradesh); id. at 3 (referring to “wholesale garlic markets across

the country”); id. at 21 (referring to APMC “wholesale markets across the country”); Jining Yongjia

Trade Co. v. United States, 34 CIT ____, ____, 2010 WL 5121964 * 13 (2010) (noting

representation, in litigation challenging twelfth “new shipper” reviews, that there are “7,000 APMCs

throughout India”).35 There is, however, no record evidence to indicate how the prices for “A”- and

34

Of course, factors such as where the Azadpur APMC market is located and where the garlic

sold there is grown may well affect prices at the market. But the actual issue that Commerce must

decide is whether the Azadpur APMC data are “representative” of prices across India. The Remand

Determination never directly addresses that issue.

35

See also Taian Ziyang Food Company Ltd. and Taian Fook Huat Tong Kee Foodstuffs Co.,

Ltd. Surrogate Value Submission (Admin. Record Pub. Doc. 83), Exh. 1 (Agmarknet data, including

India-wide garlic values for entire period of review, and listing locations of numerous markets

Court No. 06-00189 Page 45

“S.A.”-grade garlic listed in the Azadpur APMC data compare to prices for such garlic at the

numerous other APMC markets “spread across India.” See Market Research Report at 1. Nor is

there any other record evidence to substantiate the geographic representativeness of the Azadpur

APMC data on which Commerce relies in the Remand Determination.

c. Conclusion

Despite Commerce’s professed preference for a “period-wide price average” that reflects

“country-wide” data, the Azadpur APMC data that the agency selected to value raw garlic bulb in

the Remand Determination “encompass a limited time span” and are from “a single APMC market.”

See Remand Determination at 6 (quoting Policy Bulletin 04.1); id. at 12, 71, 74; Pls. Comments at

2. The Remand Determination fails to explain Commerce’s reason for using a mere two-and-one-

half months of data, rather than deflating and using data for an entire year.36 Nor does the Remand

Determination explain the basis for the agency’s apparent confidence that such time-limited data are

not distorted by seasonal or other “temporary market fluctuations.” See generally Remand

Determination at 44, 48. Similarly, the Remand Determination fails to demonstrate that the Azadpur

APMC data are representative of prices throughout India, and do not reflect local or regional

aberrations.

The Remand Determination is full of broad, sweeping, conclusory assertions concerning both

the temporal and geographic “representativeness” of the Azadpur APMC data. As discussed above,

throughout India from which garlic values were obtained).

36

Indeed, as discussed above, the Remand Determination fails to explain why Commerce did

not use a full year of contemporaneous data. See section III.A.2.a, supra.

Court No. 06-00189 Page 46

however, the data simply do not back them up. Certainly the Remand Determination does not

support Commerce’s hyperbolic claim that the Azadpur APMC data “represent[] a broad market

average of large-bulb garlic and [are] inclusive of all possible data.” See Remand Determination

at 12 (emphasis added).

The outlined concerns about the “representativeness” of the Azadpur APMC data alone

would warrant another remand of the surrogate value for raw garlic bulb. There are, however,

additional problems with the Azadpur APMC data, as discussed elsewhere throughout this section.

See generally section III.A, passim.

3. “Product Specificity” of Azadpur APMC Data

Commerce’s “well-established criteria for determining the appropriateness of surrogate

values under consideration,” set forth in Policy Bulletin 04.1, address not only the

“contemporaneity” and “representativeness” of potential data sources (both of which are discussed

above), but also the “product specificity” of those sources – a critical consideration. See generally

section III.D.6, infra (explaining that other criteria (e.g., contemporaneity, representativeness, and

public availability) are irrelevant if data are not sufficiently product-specific). In particular, Policy

Bulletin 04.1 explains that “it is [Commerce’s] stated practice to use . . . prices specific to the input

in question.” See Policy Bulletin 04.1 (emphasis added) (quoted in Remand Determination at 6).

In the case at bar, the Remand Determination emphasizes that, “[i]n the selection of surrogate

values for garlic bulbs, [Commerce is] . . . seeking to select as a surrogate value . . . [a price] that

is highly specific to the product in question” – specifically, garlic bulb with a diameter of between

50 mm and 65 mm. See Remand Determination at 6, 11; see also Issues and Decision Memorandum

Court No. 06-00189 Page 47

at 42-43 (noting that Chinese garlic exported to U.S. has “bulb diameter above 40 millimeters”);

Remand Determination at 8-9 (same); Market Research Report at 29 (noting that bulb size of

Chinese garlic exported to India generally is “ , 40 mm (typically . . . ranges between 50-65 mm)”).37

37

Commerce and the Government repeatedly underscore both the importance of “product

specificity” and the fact that, in this review, that translates to the diameter of the garlic bulb.

As to the importance of product specificity, see, e.g., Remand Determination at 7 (noting that

Commerce rejected Indian import statistics as surrogate value because “they were deemed

insufficiently specific”); id. at 15 (same); id. at 8 (stating that “the quality and detail of any data used

to obtain a surrogate value for garlic bulbs is of importance”); id. at 9 (stating that “any data that fail

to identify the size and quality of the garlic [described in the data] are ultimately insufficient”); id.

(stating that “[a]ny data used to represent Chinese garlic bulb prices must fit the particular

characteristics of Chinese garlic, which is a large, high yield, high quality variety”); id. at 10 (stating

that “in choosing the most appropriate surrogate value, [Commerce] considers several important

attributes,” including the “specificity” of the “source information”); id. at 12 (same); Def. Response

at 9 (noting that Indian import data were rejected “as being insufficiently product-specific to the

bulb size”); id. at 13 (stating that “what mattered for Commerce’s determination was that the

[Azadpur APMC data] were product-specific”).

As to the significance of bulb diameter, see, e.g., Remand Determination at 8 (stating that

“the size of a garlic bulb is a factor in the ultimate price paid” and “a strong determinant of the grade

and price of garlic”); id. at 9 (stating that “the size of a garlic bulb often drives garlic prices in the

marketplace”); id. (stating that “[a]ny data used to represent Chinese garlic bulb prices must fit the

particular characteristics of Chinese garlic, which is a large, high yield, high quality variety”); id.

at 10 (stating that Commerce “has concluded in several recent reviews that the size of . . . garlic

bulbs [is] given significant value in the marketplace”); id. at 11 (emphasizing importance of basing

surrogate value on Indian sales of “garlic bulbs of similar diameter to that of [the Chinese

Producers’] merchandise”); id. at 14 (stating that “bulb size significantly affects all [factors of

production] and drives the selling price,” such that “bulb size is a key element in valuing the raw

garlic bulb input”); Def. Response at 7 (asserting that “bulb size is the most important factor

concerning the ultimate market price”); id. at 9 (noting that Indian import data were rejected “as

being insufficiently product-specific to the bulb size”); id. at 11 (stating that “[a]s Commerce

explained, . . . the most important factor concerning product-specificity is garlic bulb size”); id. at

13 (stating that “garlic bulb size affects all factors of production and controls the ultimate sale price

of the finished product”).

The Government asserts that, in selecting the Azadpur APMC data from among the various

sets of data on the record, Congress gave product specificity the greatest weight from among the

Court No. 06-00189 Page 48

The Remand Determination similarly emphasizes that Commerce “is seeking a surrogate value that

is . . . as similar as possible to the intermediate input” that the agency is valuing – specifically, raw

garlic bulb as it exists at the “farm gate” (i.e., the raw garlic bulb as it is harvested), with no further

processing or handling, and including no additional charges. See Remand Determination at 56

(emphasis added); Issues and Decision Memorandum at 14 (noting need to value “the garlic [bulb]

that is pulled from the ground . . . [and] not the final product”); id. at 13 (noting need to value “the

raw garlic bulb that is harvested from the ground”); see also, e.g., Remand Determination at 57

(stating that Azadpur APMC data for “A”- and “S.A.”-grade garlic “best approximate the

intermediate input in India”); Issues and Decision Memorandum at 42 (stating that “[Commerce’s]

objective here is to find the best available surrogate value to value garlic bulb (i.e., the intermediate

product)”).38

criteria set forth in Policy Bulletin 04.1. See, e.g., Def. Response at 7 (asserting that “[b]ecause .

. . bulb size is the most important factor concerning the ultimate market price . . . , Commerce

reasonably gave more weight to product-specificity when selecting a surrogate value for garlic

bulb”); id. at 8 (stating that, although Azadpur APMC data are not contemporaneous, “Commerce

concluded that these data were the best available information . . . because the benefit in product-

specificity outweighed the flaw in contemporaneity”); id. at 13 (arguing that “Commerce reasonably

determined that the product-specificity of the [Azadpur APMC data] made [those data] better

information” than other sources of data on the record); id. at 13-14 (arguing that “Commerce

reasonably gave greater weight to product-specificity over contemporaneity and determined that the

highly product-specific [Azadpur APMC data] were the best available information”).

As outlined herein, however, the claims of Commerce and the Government concerning the

product specificity of the Azadpur APMC data are not borne out by the existing administrative

record.

38

In the Remand Determination, “farmgate” prices are described as prices for produce that

goes “straight from the farm to the customer, without intermediary distributors.” See Remand

Determination at 52.

Court No. 06-00189 Page 49

Commerce states that the “A”- and “S.A.”-grade garlic reflected in the Azadpur APMC data

used in the Remand Determination is “highly similar to [the Chinese Producers’] intermediate

input.” See Remand Determination at 56; see also id. at 10-11, 14, 15, 54-55, 56, 57, 59 (same);

Def.-Ints. Reply Comments at 2 (asserting that Azadpur APMC data reflect “garlic bulbs of a size

that correspond to the large-sized garlic bulbs grown by the [Chinese Producers]” and “are specific

to the product being valued”). But the Chinese Producers contest Commerce’s claims of product

specificity.

Specifically, the Chinese Producers contend that there is no unbiased evidence to establish

the bulb size of the “A”- and “S.A.”-grade garlic reflected in the Azadpur APMC data. See

generally Pls. Comments at 3-5; Pls. Reply Comments at 2-3. In addition, the Chinese Producers

argue that there are unexplained disparities between the Azadpur APMC data and other prices for

large-bulb garlic that are on the record; and, according to the Chinese Producers, those disparities

illustrate that the Azadpur APMC data reflect costs that render the Azadpur APMC data

insufficiently specific to the Chinese garlic at issue here. See generally Pls. Comments at 6-8; Pls.

Reply Comments at 4-5.

In particular, the Chinese Producers suggest that the relatively high prices reflected in the

Azadpur APMC data may be attributable to the cost of special seed used to grow large-bulb garlic

in India. See generally Pls. Comments at 13-16; Pls. Reply Comments at 9-10. The Chinese

Producers also suggest that the prices reflected in the Azadpur APMC data may be inflated due to

transportation costs and commission payments and other similar expenses associated with the sales

of garlic at the Azadpur APMC market. See generally Pls. Comments at 10-12; Pls. Reply

Court No. 06-00189 Page 50

Comments at 6-8. According to the Chinese Producers, the inclusion of such costs and expenses

means that the Azadpur APMC data do not constitute “farm gate” prices and thus are not product-

specific to the “intermediate product” that Commerce purportedly valued here. See generally Pls.

Comments at 10-12; Pls. Reply Comments at 6-8.39

a. Descriptions of “A”- and “S.A.”-Grade Garlic

Two key facts underpinning the Remand Determination’s findings that the Azadpur APMC

data are product-specific to the Chinese Producers’ garlic are Commerce’s determinations that the

Azadpur APMC data’s references to grade “A” garlic and grade “S.A.” garlic are to garlic with bulb

diameters of 40 to 55 mm, and 55 mm or more, respectively. See Pls. Comments at 3; Remand

Determination at 11 (concluding that “the two larger Indian varieties – super-A [“S.A.”], which is

defined . . . as having bulbs greater than 55 mm in diameter . . . , and A, which is defined as having

bulbs between 40 and 55 mm in diameter – [are] most similar to the garlic Chinese Respondents

produce”); see also Pls. Comments at 4-5; Pls. Reply Comments at 2-3.

The Chinese Producers correctly note that the Azadpur APMC data themselves do not

describe or define the various grades of garlic. See Pls. Comments at 3; Azadpur APMC data.

According to the Chinese Producers, Commerce’s two “critical findings” on the size of grades “A”

and “S.A.” garlic are “based merely on the unsupported claims of [the Domestic Producers] and their

consultant rather than any objective evidence.” See Pls. Comments at 3-4; Pls. Reply Comments

at 3; see generally Pls. Comments at 3-5; Pls. Reply Comments at 2-3; see also Def. Response at 10-

39

Some of the issues addressed in the analysis of the “representativeness” of the Azadpur

APMC data go to the product specificity of those data as well. See generally section III.A.2, supra.

Court No. 06-00189 Page 51

11; Remand Determination at 51, 53-54 (summarizing, and responding to, Chinese Producers’

arguments; noting that Chinese Producers “claim that the grades of garlic . . . are not described by

any unbiased sources on the record”).

In particular, the Chinese Producers note that Commerce’s finding on the size of grade “A”

garlic is based on a statement in the Market Research Report, which the Chinese Producers

characterize as “a statement by [the Domestic Producers’] paid consultant in a market research study

generated specifically for this case.” See Pls. Reply Comments at 2-3;40 see also Market Research

Report at 21 (stating that, in June 2003, garlic with bulb diameter of greater than 40 mm was

classified as grade “A”). The Chinese Producers dismiss the Market Research Report as a “private

market study commissioned by [the Domestic Producers], which is neither an official nor an

objective source.” See Pls. Comments at 3; see also Remand Determination at 51. The Chinese

Producers further note that the Market Research Report makes no mention of garlic graded “S.A.,”41

and claim that the basis for Commerce’s finding on the size of “S.A.”-grade garlic “amounts to . .

. a statement by [the Domestic Producers] themselves in a letter to Commerce.” See Pls. Reply

40

Contrary to the Chinese Producers’ claim, the Market Research Report was not “generated

specifically for this case.” See Pls. Reply Comments at 2-3. As the Remand Determination notes,

the Domestic Producers first submitted the Market Research Report on the record of the 2001-2002

(eighth) administrative review. See Remand Determination; see also Domestic Producers’ Surrogate

Value Submission (Admin. Record Pub. Doc. 417), Exh. 33 (“Market Research Report”) (indicating

that Exh. 33 was “attached as Exhibit 7 to petitioners’ June 30, 2003 submission in the [2001-2002

Administrative Review]”). The Market Research Report was also placed on the record in the ninth

review – the review immediately preceding the review at issue here. See Taian Ziyang II, 35 CIT

at ____, 2011 WL 3024720 * 6 (citing Market Research Report).

41

The Azadpur APMC market did not begin classifying garlic as grade “S.A.” until May 1,

2006, but the Market Research Report is dated June 2003. See Remand Determination at 58; Market

Research Report. The Market Research Report therefore does not refer to grade “S.A.” garlic.

Court No. 06-00189 Page 52

Comments at 3; Domestic Producers’ Comments on New Surrogate Value Information (June 24,

2009) (Remand Pub. Doc. 3) at 4 (explaining that the Azadpur APMC data “differentiate between

prices for Grade A garlic (bulbs with a diameter of 4.0 to 5.5 cm) and Grade Super A garlic (bulbs

with a diameter greater than 5.5 cm)”).

The Chinese Producers conclude that there is a “serious lack of evidence to support the size

and nature of ‘A’ and ‘S.A.’ garlic.” See Pls. Reply Comments at 3-4 (emphasis added). However,

the gravamen of the Chinese Producers’ argument actually is not that there is an absence of

evidence, but, rather, that the sources on which Commerce relies are not – for lack of a better word

– “disinterested,” and that Commerce’s findings concerning the bulb sizes of “A”- and “S.A.”-grade

garlic are thus not supported by substantial evidence. See id. at 3; Pls. Comments at 5. There is no

merit to this claim.42

As a threshold matter, it strains credulity to suggest (as the Chinese Producers implicitly do)

that the Chinese Producers do not know the descriptions of grade “A” and “S.A.” garlic. See

generally Pls. Comments at 3-5; Pls. Reply Comments at 2-3; see also Remand Determination at 51,

53-54 (summarizing, and responding to, Chinese Producers’ arguments). Chinese garlic producers

are exporting significant quantities of garlic to India. See, e.g., Market Research Report at 28

42

Similarly without merit is the Chinese Producers’ claim that there is no evidence that

“Super A”-grade and “S.A.”-grade garlic are one and the same. See Pls. Comments at 3-4; Pls.

Reply Comments at 3; Remand Determination at 51 (referring to Chinese Producers’ argument).

It is of no moment whether or not “S.A.” stands for “Super A.” The critical fact is the bulb size of

grade “S.A.” garlic as that grade is used in the Azadpur APMC data. See Remand Determination

at 53-54; Domestic Producers’ Comments on New Surrogate Value Information (June 24, 2009)

(Remand Pub. Doc. 3) at 4 (explaining that Azadpur APMC data differentiate between grade “A”

garlic, with bulb diameter of 40 to 55 mm, and grade “S.A.” garlic, with bulb diameter of greater

than 55 mm).

Court No. 06-00189 Page 53

(noting that, during a twelve-month period in 2001-2002 alone, approximately 34,200 metric tons

of garlic were exported from China to India). As such, the notion that Chinese producers lack even

the most basic knowledge about how garlic is graded in India is somewhat difficult to swallow.

It is also worth noting that – although data from the Azadpur APMC market have been used

to value garlic bulb in subsequent reviews – the Chinese producers have not questioned the size of

the various grades of garlic in the more recent proceedings. See, e.g., Issues and Decision

Memorandum for the Final Results of the 15th Administrative Review of Fresh Garlic from the

People’s Republic of China, 76 ITADOC 37,321 (June 20, 2011), at Comment 3 (no reference to

any dispute over size of various grades of garlic); Fresh Garlic from the People’s Republic of China:

Issues and Decision Memorandum for the Final Results of the New Shipper Review of Qingdao Sea-

line Trading Co., Ltd., 75 ITADOC 61,130 (Sept. 24, 2010), at Issue 2 (same); Fresh Garlic from

the People’s Republic of China: Issues and Decision Memorandum for the Final Results of the

[Thirteenth] New Shipper Reviews and Rescission, In Part, of the [Thirteenth] New Shipper

Reviews, 74 ITADOC 50,952 (Sept. 24, 2009) (same).

Moreover, to the extent that the Chinese Producers here harbor any real doubts about the

sizes of “A”- and “S.A.”-grade garlic as those grades are used in the Azadpur APMC data on the

record of this proceeding, the Chinese Producers were obligated to raise their questions in a timely

fashion in the course of the remand, to afford Commerce and the Domestic Producers a proper

opportunity to address them before the evidentiary record closed.43 Although Commerce placed the

43

The Chinese Producers bristle at Commerce’s observation that the Chinese Producers

should have come forward with their own evidence of the description of “S.A.”-grade garlic if the

Chinese Producers dispute the description (i.e., garlic with a bulb diameter of greater than 55 mm)

Court No. 06-00189 Page 54

Azadpur APMC data on the record and invited the parties’ comments, the Chinese Producers’

submission did not question the sizes of “A”- and “S.A.”-grade garlic. See Letter from Commerce

to All Interested Parties (June 5, 2009) (Remand Pub. Doc. 1) (placing on the record Azadpur

APMC data and inviting parties’ comments); Respondents’ Comments Regarding New Surrogate

Value Placed on the Record for the Remand (June 24, 2009) (Remand Pub. Doc. 4) (objecting to use

of Azadpur APMC data in remand results, but raising no issue as to size of garlic bulb grades “A”

and “S.A.”); Remand Determination at 2-3 (summarizing Chinese Producers’ comments on Azadpur

APMC data).44 The Chinese Producers raised the issue of the descriptions of the various grades of

provided in the Domestic Producers’ June 24, 2009 submission. See Remand Determination at 54

(emphasizing that Chinese Producers “have . . . not provided any evidence to counter the

descriptions of the size of ‘S.A.’ grade garlic”); Pls. Comments at 4; Domestic Producers’

Comments on New Surrogate Value Information (June 24, 2009) (Remand Pub. Doc. 3) at 4.

The Chinese Producers insist that Commerce “misses the point,” and asserts that it is the

Chinese Producers’ “position . . . that there is no reliable evidence about what ‘S.A.’ garlic is or is

not.” See Pls. Comments at 4. But the Chinese Producers’ claim that there is no such “reliable

evidence” cannot be credited. “S.A.”-grade garlic is listed in the Azadpur APMC data; clearly,

“S.A.”-grade means something. If the Chinese Producers believe that the term “S.A.”-grade (as it

is used in the Azadpur APMC data) means something other than garlic with a bulb diameter of

greater than 55 mm, then the Chinese Producers should have proffered proof to that effect. If, on

the other hand, the Chinese Producers believe that the term does not have a consistent definition (or

that the definition is somehow ambiguous), then they should have proffered proof to that effect.

44

To be sure, Commerce’s letter placing the Azadpur APMC data on the record on remand

did not state that the Remand Determination would later use those data as the basis to calculate the

surrogate value for garlic bulb. See Letter from Commerce to All Interested Parties (June 5, 2009)

(Remand Pub. Doc. 1). However, at the time of Commerce’s letter, data from the Azadpur APMC

market already had been used to value garlic bulb in the eleventh administrative review, the twelfth

administrative review, the twelfth new shipper reviews, and the preliminary results of the thirteenth

administrative and new shipper reviews. See, e.g., Fresh Garlic from the People’s Republic of

China: Final Results and Partial Rescission of the Eleventh Administrative Review and New Shipper

Reviews, 72 Fed. Reg. 34,438, 34,440 (June 22, 2007); Issues and Decision Memorandum for the

Final Results of the 12th Administrative Review: Fresh Garlic from the People’s Republic of China,

Court No. 06-00189 Page 55

garlic for the first time in their comments on the Draft Remand Determination. See Remand

Determination at 51, 53-54 (summarizing, and responding to, Chinese Producers’ comments on

Draft Remand Determination). The Chinese Producers waived their arguments by failing to raise

them in a timely fashion.

To the extent that the Chinese Producers focus their attack on the Market Research Report

submitted by the Domestic Producers, the Chinese Producers disregard the fact that various types

of market studies, generally commissioned by the parties, are not unusual in international trade

proceedings. See, e.g., Target Corp. v. United States, 609 F.3d 1352, 1360-61 (Fed. Cir. 2010)

(referring to, inter alia, “independent marketing studies” submitted by domestic trade association);

SKF USA, Inc. v. U.S. Customs and Border Protection, 556 F.3d 1337, 1343 (Fed. Cir. 2009)

(referring to “detailed market analyses” submitted by domestic industry, in support of antidumping

73 ITADOC 24,042 (June 9, 2008), at Comment 2A; Antidumping Duty Order on Fresh Garlic from

the People’s Republic of China: Issues and Decision Memorandum for the Twelfth New Shipper

Reviews, 73 ITADOC 56,550 (Sept. 19, 2008), at Comment 4; Fresh Garlic from the People’s

Republic of China: Preliminary Results of the [Thirteenth] Antidumping Duty Administrative and

New Shipper Reviews and Intent to Rescind, In Part, the [Thirteenth] Antidumping Duty

Administrative and New Shipper Reviews, 73 Fed. Reg. 74,462, 74,468 (Dec. 8, 2008); see also

Remand Determination at 3 (noting that data from Azdapur APMC market were used to value garlic

bulb in, inter alia, eleventh, twelfth, and thirteenth administrative reviews).

Moreover, although they were not parties to the most recent reviews, two of the plaintiff

Chinese Producers here – Sunny and Linshu Dading – were parties to the eleventh administrative

review, and were represented by the same counsel in that proceeding as they are here. See Fresh

Garlic from the People’s Republic of China: Final Results and Partial Rescission of the Eleventh

Administrative Review and New Shipper Reviews, 72 Fed. Reg. at 34,438 & n.1 (June 22, 2007).

Accordingly, at least some, if not all, of the Chinese Producers were already well-acquainted with

data from the Azadpur APMC market by the time Commerce put the Azadpur APMC data on the

record in this proceeding, and – if they had any good-faith questions about how garlic was graded

in those data – the Chinese Producers should have raised the issue promptly.

Court No. 06-00189 Page 56

petition); Nevinnomysskiy Azot v. United States, 31 CIT 1373, 1388 (2007) (referring to “industry

reports from two expert studies” (one commissioned, one non-commissioned) submitted by domestic

producers); Tung Fong Indus. Co. v. United States, 29 CIT 346, 351-52 & n.8, 366 F. Supp. 2d

1308, 1312-13 & n.8 (2005) (referring to “foreign market research report,” on which domestic

manufacturers’ antidumping petition was based).

Further, at various points in their own briefs, the Chinese Producers themselves cite and rely

on other information in the Domestic Producers’ Market Research Report. See, e.g., Pls. Comments

at 13-14 (quoting Market Research Report at length to establish that Indian garlic producers must

use more expensive special seed to grow large-bulb garlic, increasing Indian producers’ cost of

production); Pls. Reply Comments at 9 (stating that, “as confirmed by the Market Research Report,

garlic bulbs grow larger in China because of the indigenous seed and natural climate conditions in

the primary garlic growing regions,” unlike garlic grown in India).45 The Chinese Producers’

attempts to single out and discredit one specific statement in the Market Research Report – the

statement concerning the bulb size of grade “A” garlic – thus have a somewhat hollow ring. See

Market Research Report at 21 (indicating that, in June 2003, garlic with bulb diameter of greater

45

The Chinese Producers’ argument challenging the reliability of a single specific statement

in the Market Research Report is doubly ironic. Not only do the Chinese Producers rely elsewhere

on other statements in the Market Research Report, but, in addition, at another point in their briefs,

the Chinese Producers themselves criticize Commerce for doing the same thing that the Chinese

Producers seek to do. Specifically, the Chinese Producers charge Commerce with “cherry picking

. . . parts of [the Market Research Report] while ignoring other parts of that same document.” See

Pls. Reply Comments at 5. Of course, the fact that a party accepts as true one statement from a

particular source in no way obligates the party to accept as true all statements made in that source.

Court No. 06-00189 Page 57

than 40 mm was classified as grade “A”).46

46

The analysis above similarly disposes of the Chinese Producers’ subsidiary argument that

the challenged statements – i.e., the statement in the Market Research Report concerning the size

of grade “A” garlic, and the statement in the Domestic Producers’ June 24, 2009 submission

concerning the size of grade “S.A.” garlic – are not supported by citation to relevant primary

sources. See Pls. Comments at 3, 4; Pls. Reply Comments at 3.

In addition to the subsidiary issue raised by the Chinese Producers (noted above) concerning

the absence of citations to primary source material to support the statements concerning the bulb

size of “A”- and “S.A.”-grade garlic in the Market Research Report and the Domestic Producers’

June 24, 2009 submissions, there is another, potentially even more fundamental issue that the

Chinese Producers have not raised – the absence from the record of the source material that serves

as back-up for the Market Research Report.

In the eighth administrative review, Commerce expressed concern that “[t]he Market

Research Report contains a number of broad assertions regarding the domestic Indian garlic

industry, which, if they were to be [accepted] on [their] face, would have significant implications

for respondents’ final dumping margins. The acceptance of this non-publicly available information

as fact without corroborating source data would lessen the overall transparency of [Commerce’s]

final determination.” See Final Results of Redetermination Pursuant to Court Remand, Court No.

04-00240 (Feb. 25, 2010) at 8-9. Commerce therefore requested that the domestic producers in that

case place on the record of the eighth administrative review certain supporting data for the Market

Research Report – the same Market Research Report that is on the record of this proceeding. See

generally id. at 8-11; see also Jinan Yipin Corp. v. United States, 33 CIT ____, ____, 637 F. Supp.

2d 1183, 1190-91 (2009) (“Jinan Yipin II”) (discussing Commerce’s concerns about supporting data

for Market Research Report and agency’s request for submission of those data, and summarizing

contents of the data). However, it does not appear that those supporting data were ever requested

or placed on the record of this administrative review.

It is not clear whether the supporting data placed on the record in the eighth administrative

review would address the bulb size of grade “A” garlic; and, because the Market Research Report

is dated June 2003 but the Azadpur APMC market did not begin classifying garlic as grade “S.A.”

until May 2006, it seems highly improbable (if not impossible) that the supporting data would

address the bulb size of grade “S.A.” garlic. See Market Research Report; Remand Determination

at 58. Nevertheless, particularly in light of the concerns about the reliability of information in the

Market Research Report that the agency expressed in the eighth administrative review, Commerce

would be well-advised to ensure that – on remand – all necessary supporting data is placed on the

record of this proceeding, particularly if the agency plans to continue to rely on information in the

Market Research Report (whether to support the agency’s selection of the Azadpur APMC data, or

for other purposes). Cf. Nakajima All Co. v. United States, 14 CIT 469, 744 F. Supp. 1168 (1990)

Court No. 06-00189 Page 58

Finally, the Chinese Producers cite no authority to support their claim that Commerce erred

in relying on the Market Research Report and the Domestic Producers’ June 24, 2009 submission

because those documents reflect the Domestic Producers’ “self-interest.”47 Nor could the Chinese

Producers do so. It is hoary black letter law that the “self-serving” nature of evidence goes (at most)

to its weight, not its admissibility. See, e.g., Healey v. Chelsea Resources, Ltd., 947 F.2d 611, 620

(2d Cir. 1991); In re Dana Corp., 574 F.3d 129, 153 (2d Cir. 2009); AK Steel Corp. v. United States,

22 CIT 1070, 1091-93, 34 F. Supp. 2d 756, 772-73 (1998), aff’d in part, rev’d in part, and remanded

on other grounds, 226 F.3d 1361 (Fed. Cir. 2000); see generally 3A J. Wigmore, Evidence § 940,

p. 775 (J. Chadbourn rev. ed. 1970) (explaining that “[i]mpartiality of feeling . . . is no longer

regarded as an essential preliminary to testimony,” and that “partiality” is “always relevant as . . .

affecting the weight of . . . testimony”); id., § 966, p. 812 (stating that “[t]here is no doubt that the

(holding that Commerce improperly relied on market research report that agency had discredited and

disregarded in prior proceedings).

47

The sole case that the Chinese Producers cite is Allied Pacific I. See Pls. Reply Comments

at 3 (citing Allied Pacific Food (Dalian) Co. v. United States, 30 CIT 736, 765-67, 435 F. Supp. 2d

1295, 1320-21 (2006) (“Allied Pacific I”)). But that case is inapposite. Allied Pacific I criticized

Commerce for “adopt[ing] by reference” a domestic producer’s argument wholesale, without

independently scrutinizing the argument and without “cit[ing] to record evidence and provid[ing]

reasoning of its own” to support the agency’s conclusion. See Allied Pacific I, 30 CIT at 766, 435

F. Supp. 2d at 1321. In other words, Allied Pacific I criticized Commerce for adopting by reference

one party’s conclusion. In contrast, in the case at bar, Commerce is not adopting by reference the

Domestic Producers’ arguments, much less their conclusions. Instead, Commerce is citing to

evidence of basic facts that the Domestic Producers have placed on the record, and is relying on

those facts to support the agency’s own reasoning and conclusion. It is no more improper for

Commerce to rely on factual evidence that has been placed on the record by the Domestic Producers

than it would be for Commerce to rely on such evidence placed on the record by the Chinese

Producers. The Chinese Producers’ reliance on Allied Pacific I is therefore unavailing.

Court No. 06-00189 Page 59

interest of a party . . . is a circumstance available to impeach him”).48 Thus, even accepting (for the

sake of argument) their claims that the statements at issue here were not made by an “objective”

source, the Chinese Producers’ assertion that the record reflects a “serious lack of evidence to

support the size and nature of ‘A’ and ‘S.A.’ garlic” cannot be sustained. See Pls. Reply Comments

at 4 (emphasis added); see also Jining Yongjia Trade Co., 34 CIT at ____, 2010 WL 5121964 * 11-

12 (in review of twelfth new shipper review, rejecting Chinese producers’ argument that

Commerce’s decision to value garlic bulb based on particular grade of garlic “must have been based

on statements made by [the domestic producers’ consultants], and, therefore, was not supported by

48

The Chinese Producers’ arguments concerning the Domestic Producers’ June 24, 2009

submission, like the Chinese Producers’ arguments concerning the Market Research Report,

focused solely on the (assertedly) biased, self-serving, and non-“objective” nature of those

statements, in light of the authorship of the documents in which they appeared. Significantly, the

Chinese Producers did not argue that the Domestic Producers’ June 24, 2009 submission constitutes

argument, not evidence. Such a claim would have been a much more difficult call. The distinction

between statements of counsel and evidence is well-established. See, e.g., Campania Mgmt. Co. v.

Rooks, Pitts & Poust, 290 F.3d 843, 852-53 (7th Cir. 2002) (explaining that “it is universally known

that statements of attorneys are not evidence”); Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d

1371, 1380 (Fed. Cir. 2009) (holding that “unsworn attorney argument . . . is not evidence”); EOTT

Energy Operating Ltd. Partnership v. Winterthur Swiss Ins. Co., 257 F.3d 992, 999 (9th Cir. 2001)

(stating that “[c]ounsel’s assertions at oral argument . . . are not part of the factual record”); Estrella

v. Brandt, 682 F.2d 814, 819-20 (9th Cir. 1982) (noting that “[l]egal memoranda and oral argument

are not evidence”); cf. Carlisle Tire & Rubber Co. v. United States, 9 CIT 520, 533, 622 F. Supp.

1071, 1082-83 (1985) (stating that, where Commerce’s verification report failed to indicate whether

the agency verified a certain fact, statement in letter to agency from party’s counsel who was present

at verification (indicating in letter that fact was verified) “possesses none of the indicia of reliability

commonly considered in determining probative value,” and does not constitute substantial evidence

that the fact was verified); but see Shandong Huarong Gen’l Corp. v. United States, 25 CIT 834,

839-42, 159 F. Supp. 2d 714, 720-23 (2001) (sustaining Commerce’s determination that forged steel

was used in production of subject merchandise, where Commerce relied on, inter alia, “statements

made by [Chinese producers’] counsel at an administrative hearing as proof that forged steel likely

was used by [Chinese producers] to produce subject merchandise,” where no party argued that

representations by counsel do not constitute evidence).

Court No. 06-00189 Page 60

substantial evidence”).

b. Seed Value, “Farm Gate” Prices, and Valuation of “Intermediate Input”

The Chinese Producers contrast the Azadpur APMC data for “A”- and “S.A.”-grade garlic

with certain other pricing data on the record, and assert that disparities demonstrate that the

“extremely high prices” reflected in the Azadpur APMC data are attributable to factors other than

bulb size. See Pls. Comments at 6; see generally id. at 6-8; Pls. Reply Comments at 4-5; Remand

Determination at 52 (summarizing Chinese Producers’ concerns); but see id. at 55-56 (addressing

Chinese Producers’ concerns); Def. Response at 11-12.

In particular, the Chinese Producers opine that some of the apparent price disparities may

be attributable to the use of special seed in growing the “A”- and “S.A.”-grade garlic reflected in

the Azadpur APMC data. See generally Pls. Comments at 13-16; Pls. Reply Comments at 9-10;

Remand Determination at 52 (summarizing Chinese Producers’ concerns); but see id. at 56-57

(addressing Chinese Producers’ concerns); Def. Response at 14-15. Further, the Chinese Producers

contend that the prices for “A”- and “S.A.”-grade garlic reflected in the Azadpur APMC data do not

“reflect[] anything close to ‘farm gate’ prices,” but – instead – include additional costs such as the

expenses associated with “middlemen” such as “commission agents and wholesalers,” as well as

“other transportation related costs, fees and commissions,” rendering the Azadpur APMC data

“entirely unreliable as an ‘intermediate input’ surrogate value.” See Pls. Comments at 11; see

generally id. at 10-12; Pls. Reply Comments at 6-8; Remand Determination at 52 (summarizing

Chinese Producers’ concerns); but see id. at 55-56, 57 (addressing Chinese Producers’ concerns);

Def. Response at 14. The Chinese Producers thus conclude that the Azadpur APMC data for “A”-

Court No. 06-00189 Page 61

and “S.A.”-grade garlic are not sufficiently specific to the product here at issue.

i. Disparities Between Azadpur APMC Data and Other Pricing Data

The Chinese Producers challenge as “unsupported” the Remand Determination’s implicit

assumption that the prices reflected in the Azadpur APMC data for “A”- and “S.A.”-grade garlic are

attributable solely to garlic bulb size, asserting that the data “are not an accurate representation of

the cost of 40-65 mm garlic in India during the [period of review].” See Pls. Comments at 8; see

generally id. at 6-8; Pls. Reply Comments at 4-5; Remand Determination at 52 (summarizing

Chinese Producers’ claims).

The Chinese Producers point to Indian import statistics on the record indicating that, during

the period of review, 19,699 metric tons of garlic were imported into India from China, priced at

12.74 rupees per kilogram. See Pls. Comments at 6; Pls. Reply Comments at 4. Similarly, the

Chinese Producers note that the average Agmarknet price during the period of review for garlic from

the “long-day” growing zone of Himachal Pradesh, Jammu and Kashmir, and Uttranchal was 15.34

rupees per kilogram. See Pls. Comments at 6-7; Pls. Reply Comments at 4-5. Contrasting those

prices with the deflated value of 33.77 rupees per kilogram that Commerce derived from the

Azadpur APMC data for “A”- and “S.A.”-grade garlic, the Chinese Producers emphasize that the

value used in the Remand Determination is nearly three times higher than the price of Chinese garlic

imported into India during the period of review, and roughly two times higher than the Agmarknet

prices during the period of review for Indian (domestic) garlic from the specified “long-day”

growing regions. See Pls. Comments at 8; Analysis for the Redetermination of Remand in the

Administrative Review of the Antidumping Duty Order on Fresh Garlic from the People’s Republic

Court No. 06-00189 Page 62

of China: Jinan Yipin Corporation, Ltd. (Remand Pub. Doc. 19) at 2 (establishing value of 33.77

rupees per kilogram).49

From the contrasting figures discussed above, the Chinese Producers argue that – assuming

that the vast majority of the garlic imported into India, and the vast majority of the garlic grown in

the “long-day” growing zone of Himachal Pradesh, Jammu and Kashmir, and Uttranchal, are

essentially the same as the large-bulb Chinese garlic that Commerce is seeking to value here – the

Azadpur APMC data used in the Remand Determination cannot accurately reflect the cost of Indian

garlic bulb with a diameter of between 40 mm and 65 mm during the period of review. See Pls.

Comments at 8; Pls. Reply Comments at 5. Given the magnitude of the apparent price disparities,

the Chinese Producers maintain that there are thus “obviously other factors heavily influencing the

[Azadpur APMC data] garlic prices . . . unrelated to [bulb] size that render the . . . Azadpur APMC

[data] an unreliable and inaccurate surrogate value.” See Pls. Comments at 7; see also id. at 8.

The Remand Determination gives short shrift to the Chinese Producers’ claims. See Remand

Determination at 55-56. According to the Remand Determination, the rationale underpinning the

Chinese Producers’ argument disputing the Azapur APMC data is “quite literally, ‘because the price

is too high.’” See id. at 56; see also Def. Response at 12. Apart from that cavalier dismissal, the

Remand Determination’s sole response to the Chinese Producers’ analysis is Commerce’s

49

The Chinese Producers seek to compare the price data from the Indian import statistics and

the Agmarknet data for the three specified states not only to the deflated Azadpur APMC data, but

also to the raw (non-deflated) Azadpur APMC data from 2006. See Pls. Comments at 7-8; Pls.

Reply Comments at 5. As the Remand Determination notes, however, one “cannot presume that the

[Azadpur APMC data are] inaccurate as a surrogate value source simply because [they do] not offer

prices identical to those . . . three years earlier.” See Remand Determination at 55.

Court No. 06-00189 Page 63

speculation that “there are a number of factors that could explain the difference in prices [between

the Azadpur APMC data and the Indian import statistics], including increases or decreases in the

volume of Chinese imports caused by distortions or market shocks in the domestic Chinese market.”

See Remand Determination at 55 (emphasis added).50 However, the Remand Determination cites

no evidence to support Commerce’s suggestion; and Commerce is required to support the surrogate

value that it selects with substantial evidence. See generally Hebei Metals & Minerals Imp. & Exp.

Corp. v. United States, 29 CIT 288, 296, 366 F. Supp. 2d 1264, 1271 (2005) (“Hebei Metals II”)

(emphasizing Commerce’s obligation “to obtain adequate evidence for the value [the agency]

select[s]”).

Moreover, even if the Remand Determination could explain away the discrepancy between

the Azadpur APMC data and the Indian import statistics (which it does not), the Remand

Determination is entirely silent as to the Agmarknet average price that the Chinese Producers cite

for garlic from the “long-day” growing zones of Himachal Pradesh, Jammu and Kashmir, and

Uttranchal. See Pls. Comments at 6-8; Pls. Reply Comments at 4-5. Accordingly, even if

Commerce had established by substantial evidence that the disparity between the Azadpur APMC

data and the price reflected in the Indian import statistics was attributable to factors such as those

outlined in the Remand Determination (which it has not), Commerce still would not have established

50

The Remand Determination asserts that the Chinese Producers’ arguments “are based

purely on supposition without any supporting evidence.” See Remand Determination at 55; see also

Def. Response at 12 (asserting that Chinese Producers’ arguments are not based on “any record

evidence”). Quite to the contrary, the Chinese Producers’ points are thoroughly grounded in

documents on which both Commerce and the Government rely (including the Market Research

Report and the Agmarknet data which Commerce used in the Final Results), as well as other record

evidence. See generally Pls. Reply Comments at 5.

Court No. 06-00189 Page 64

why the value derived from the Azadpur APMC data is “two times higher than the Agmarknet prices

during the [period of review] [for domestic Indian garlic] from the long-day growing region.” See

Pls. Comments at 8.

In its brief, the Government advances an argument that is more nuanced than either of the

points that Commerce raised in its Remand Determination. Specifically, the Government asserts that

“because there is no record evidence demonstrating that either the basket category Indian import

statistics or the Agmarknet data describe garlic with bulb diameters specific to the large garlic grown

by [the Chinese Producers], it cannot be shown, through an ‘apples-to-apples’ comparison, that the

[Azadpur APMC] data are in any way unrepresentative of India-wide prices.” See Def. Response

at 12.

As a threshold matter, however, the Government’s argument constitutes impermissible post

hoc rationale. Litigation counsel’s attempts at “backfill” are no substitute for an agency’s own

reasoned decisionmaking on the record. And an agency’s action may be upheld, if at all, only on

the grounds articulated by the agency itself. See Burlington Truck Lines, Inc. v. United States, 371

U.S. 156, 168-69 (1962); Abbott Laboratories v. United States, 573 F.3d 1327, 1332-33 & n.1 (Fed.

Cir. 2009); NEC Home Elecs., Ltd. v. United States, 54 F.3d 736, 743 (Fed. Cir. 1995). As such,

the substance of the Government’s argument cannot be considered here.

But, even if the Government’s argument were to be considered on its merits, it would not

carry the day. As the Chinese Producers observe, the Market Research Report indicates that the

Chinese garlic imported into India is “‘large bulbed’ with a diameter greater than 40 mm and mostly

within the 50-65 mm size range.” See Pls. Comments at 6 (citing Market Research Report at 3, 21);

Court No. 06-00189 Page 65

see also Pls. Reply Comments at 4. Similarly, Commerce itself relied on Agmarknet data to value

garlic bulb in the Final Results. See Issues and Decision Memorandum at 47 (noting Commerce’s

decision to value garlic bulb in Final Results using Agmarknet data for “China” variety garlic). And

the Market Research Report states, inter alia, that approximately 43% of the garlic produced in India

in the period at issue was of the hybrid/clonal (large-bulb) varieties, and that the large-bulb garlic

grown in India is grown in the “long-day” regions of the country, which include Himachal Pradesh,

Jammu and Kashmir, and Uttranchal – the three states that the Chinese Producers list. See Market

Research Report at 3-4, 6-11, 13-18.

Taken together, the evidence summarized above more than suffices to call into question the

product specificity of the Azadpur APMC data on which the Remand Determination relied, and to

warrant further inquiry and explanation by Commerce. See generally Dorbest Ltd. v. United States,

30 CIT 1671, 1698, 462 F. Supp. 2d 1262, 1286 (2006) (“Dorbest I”), aff’d in part, vacated in part,

and remanded on other grounds, 604 F.3d 1363 (Fed. Cir. 2010) (explaining that, even if it is not

appropriate to base surrogate value on data from a particular source, that same source nevertheless

can properly be considered for related purposes, including evaluation of other data).

ii. Use of Special Seed to Grow “A”- and “S.A.”-Grade Garlic

The Chinese Producers contend that some of the apparent price disparities discussed above

(in section III.A.3.b.i) are attributable at least in part to the use of special seed in growing the

domestic Indian “A”- and “S.A.”-grade garlic reflected in the Azadpur APMC data. See generally

Pls. Comments at 13-16; Pls. Reply Comments at 9-10. Relying on the Market Research Report,

the Chinese Producers argue that Indian garlic growers must use special, more expensive

Court No. 06-00189 Page 66

hybrid/clonal seed to produce large-bulb garlic comparable to that which Chinese producers are able

to grow using only “indigenous seed.” See Pls. Reply Comments at 9; see also Pls. Comments at

13-15; Remand Determination at 52 (summarizing Chinese Producers’ concerns).

The Chinese Producers reason that “the[] specially designed seeds must increase the cost for

Indian garlic growers seeking to grow larger bulb garlic,” and that “this additional cost must be

reflected in the sales price” of large-bulb garlic such as the “A”- and “S.A.”-grade garlic sold at the

Azadpur APMC market. See Pls. Comments at 14-15; see also Pls. Reply Comments at 9. The

Chinese Producers conclude that “the domestic Indian value for large bulb garlic is distorted by

additional costs that the Chinese producers would not incur were China a market economy,” and,

therefore, that “it is improper to use such [domestic Indian] prices [for large-bulb garlic] as surrogate

values” here. See Pls. Comments at 15-16 (citing, inter alia, Nation Ford, 166 F.3d at 1377-78;

Rhodia, Inc. v. United States, 25 CIT 1278, 1288-90, 185 F. Supp. 2d 1343, 1353-55 (2001)); see

also Pls. Reply Comments at 9; Remand Determination at 52 (summarizing Chinese Producers’

concerns).

Commerce and the Government assert that “there is no record information to indicate that

the ‘A’ and ‘Super-A’ garlic grades sold at the Azadpur APMC [market] are the product of specially

designed garlic seed.” See Remand Determination at 57; see also Def. Response at 14-15; see

generally Remand Determination at 55-57. To the contrary, however, the Market Research Report

explains at some length that the large-bulb garlic that is cultivated in India is the product of special,

hybrid/clonal seed, in contrast to the native, local varieties of Indian garlic (which are typically

small- to medium-bulbed, with diameters of 10 mm to 40 mm). See, e.g., Market Research Report

Court No. 06-00189 Page 67

at 3-4 (highlighting use of hybrid/clonal varieties to produce large-bulb garlic in India’s “long-day”

zone); id. at 12 (noting that native, local Indian varieties of garlic “typically have [a] smaller bulb

diameter varying from 10-40 mm”); id. at 12-17 (contrasting local Indian varieties of garlic with

special, hybrid/clonal varieties).51

The record evidence that the Chinese Producers cite clearly indicates that the large-bulb

garlic grown in India is the product of special, hybrid/clonal seed. The record evidence further

seems to indicate that such seed is more expensive than the “indigenous” seed used by the Chinese

Producers. Commerce cannot impute to the Chinese Producers the added expense of special seed

if the Chinese Producers would not have to incur such an expense if China were a market economy

country. Cf. Taian Ziyang Food Co. v. United States, 35 CIT ____, ____, 2011 WL 3024720 * 7-9

(2011) (“Taian Ziyang II”) (discussing Commerce’s decision on second remand in ninth

administrative review not to value irrigation water, in light of evidence indicating that, inter alia,

Chinese producers did not pay for irrigation water because they drew water from nearby rivers or

wells on the land that they farm). To the extent that the cost of such special, more expensive seed

is embedded in the value for “A”- and “S.A.”-grade garlic that was used in the Remand

Determination, that value is not sufficiently product-specific to the Chinese Producers’ garlic. The

51

See also Market Research Report at 5, 7-9, 11, 17-18 (discussing use of special,

hybrid/clonal seed to grow large-bulb garlic in India’s “long-day” zone). Commerce does not

dispute the Chinese Producers’ statement that the special, hybrid/clonal garlic seed used to grow

large-bulb Indian garlic is more expensive than other seed – a statement that is supported by the

record in this and other related proceedings. See generally Remand Determination at 10-11 (noting

that Commerce “has concluded in several recent reviews that the size of . . . garlic seed . . . [is]

given significant value in the marketplace,” and, inter alia, discussing Agrifound Parvati (a

hybrid/clonal variety) as an example of large-bulb garlic that is “sold at a higher price”) (emphasis

added).

Court No. 06-00189 Page 68

Remand Determination’s findings and reasoning on this matter therefore cannot be sustained on the

strength of the existing record.

iii. Azadpur APMC Data and “Farm Gate” Prices for Garlic Bulb as “Intermediate Input”

The Chinese Producers suggest that – apart from the higher cost of special hybrid/clonal

garlic seed – yet another potential cause of the apparent price disparities discussed above (in section

III.A.3.b.i) are “transportation related costs, fees and commissions” associated with garlic sales at

the

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