                         Slip Op. 06-21

           UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________
                                   :
FUYAO GLASS INDUSTRY GROUP CO.,    :
GREENVILLE GLASS INDUSTRIES, INC., :
SHENZHEN BENXUN AUTOMOTIVE GLASS   :
CO., TCG INTERNATIONAL, INC.,      :
CHANGCHUN PILKINGTON SAFETY GLASS  :
CO., GUILIN PILKINGTON SAFETY      :
GLASS CO., WUHAN YAOHUA PILKINGTON :
SAFETY GLASS CO., and XINYI        :
AUTOMOTIVE GLASS (SHENZHEN) CO.,   :
                                   :     Before: Richard K. Eaton,
                                   :     Judge
     Plaintiffs,                   :
                                   :     Consol. Court No. 02-00282
          v.                       :
                                   :
UNITED STATES,                     :
                                   :
                                   :
     Defendant,                    :
                                   :
          and                      :
                                   :
PPG INDUSTRIES, INC., SAFELITE     :
GLASS CORP., and VIRACON/CURVLITE, :
a subsidiary of APOGEE ENTERPRISES,:
INC.,                              :
                                   :
     Def.-Intervenors.             :
___________________________________:

                        OPINION AND ORDER

[United States Department of Commerce’s Remand Results on float
glass remanded]


                                     Dated: February 15, 2006


     Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP
(Mark E. Pardo, Paul G. Figueroa, Adam M. Dambrov, and Bruce M.
Mitchell), for plaintiffs Fuyao Glass Industry Group Co. and
Greenville Glass Industries, Inc.
Consol. Court No. 02-00282                                    Page 2

     Garvey, Schubert & Barer (William E. Perry), for plaintiffs
Shenzhen Benxun Automotive Glass Co. and TCG International, Inc.

     Pepper Hamilton, LLP (Gregory C. Dorris), for plaintiffs
Changchun Pilkington Safety Glass Co., Guilin Pilkington Safety
Glass Co., and Wuhan Yaohua Pilkington Safety Glass Co.

     White & Case (Adams C. Lee and Frank H. Morgan), for
plaintiff Xinyi Automotive Glass (Shenzhen) Co.

     Peter D. Keisler, Assistant Attorney General, Civil
Division, United States Department of Justice; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Jeanne E. Davidson, Deputy
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Stephen C. Tosini), for defendant
United States.

     Stewart & Stewart (Terence P. Stewart, Eric P. Salonen, and
Sarah V. Stewart), for defendant-intervenors PPG Industries,
Inc., Safelite Glass Corp., and Viracon/Curvlite, a subsidiary of
Apogee Enterprises, Inc.



     Eaton, Judge: This consolidated antidumping action is before

the court on the motions for judgment upon the agency record

filed by plaintiffs Fuyao Glass Industry Group Co., Greenville

Glass Industries, Inc., Shenzhen Benxun Automotive Glass Co., TCG

International, Inc., Changchun Pilkington Safety Glass Co.,

Guilin Pilkington Safety Glass Co., Wuhan Yaohua Pilkington

Safety Glass Co., and Xinyi Automotive Glass (Shenzhen) Co.

(collectively, “plaintiffs”) following two remands to the United

States Department of Commerce (“Commerce” or the “Department”).

See Fuyao Glass Industry Group Co. v. United States, 27 CIT __,

slip op. 03-169 (Dec. 18, 2003) (not reported in the Federal

Supplement) (“Fuyao I”) and Fuyao Glass Industry Group Co. v.
Consol. Court No. 02-00282                                    Page 3

United States, 29 CIT __, slip op. 05-6 (Jan. 25, 2005) (not

reported in the Federal Supplement) (“Fuyao II”).    The Department

has now filed its second remand results. See Final Results of

Redetermination Pursuant to Court Remand (June 9, 2005) (“Remand

Results”).    For the reasons set forth below, the court remands

this matter for a third time.



                             BACKGROUND

     Plaintiffs are exporters to the United States of automotive

replacement glass windshields (the “Windshields”) from the

People’s Republic of China, a nonmarket economy country (“NME”).1

The primary issue in this matter is the price plaintiffs paid for

float glass2 purchased from suppliers in the market economy

countries of Korea, Thailand, and Indonesia.    Float glass is used

in the manufacture of the Windshields.    In addition, plaintiffs

have challenged the treatment of certain other factors of

production.



     1
          A nonmarket economy country is defined as “any foreign
country that the administering authority determines does not
operate on market principles of cost or pricing structures, so
that sales of merchandise in such country do not reflect the fair
value of the merchandise.” 19 U.S.C. § 1677(18)(A)(2000). “Any
determination that a foreign country is a nonmarket economy
country shall remain in effect until revoked by the administering
authority.” 19 U.S.C. § 1677(18)(C)(i)(2000).
     2
          For information regarding the float glass production
process, see http://alzonca.tripod.com/glassprocess.html (last
visited Feb. 14, 2006).
Consol. Court No. 02-00282                                    Page 4
     The court has jurisdiction pursuant to 28 U.S.C. § 1581(c)

(2000) and 19 U.S.C. § 1516a(a)(2)(B)(iii) (2000).



                          STANDARD OF REVIEW

     The court “shall hold unlawful any determination, finding,

or conclusion 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); Huaiyin Foreign Trade

Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir.

2003).   “Substantial evidence is ‘such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion.’”   Huaiyin, 322 F.3d at 1374 (quoting Consol. Edison

Co. v. NLRB, 305 U.S. 197, 229 (1938)).    The existence of

substantial evidence is determined “by considering the record as

a whole, including evidence that supports as well as evidence

that ‘fairly detracts from the substantiality of the evidence.’”

Id. (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556,

1562 (Fed. Cir. 1984)).    Furthermore, “[a]s long as the agency’s

methodology and procedures are reasonable means of effectuating

the statutory purpose, and there is substantial evidence in the

record supporting the agency’s conclusions, the court will not

impose its own views as to the sufficiency of the agency’s

investigation or question the agency’s methodology.”    Ceramica

Regiomontana, S.A. v. United States, 10 CIT 399, 404–05, 636 F.
Consol. Court No. 02-00282                                    Page 5
Supp. 961, 966 (1986), aff’d, 810 F.2d 1137 (Fed. Cir. 1987)

(citing Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc.,

467 U.S. 837, 843 (1984); Abbott v. Donovan, 6 CIT 92, 97, 570 F.

Supp. 41, 47 (1983)).



                             DISCUSSION

I.   Reasons for Third Remand

     In its Final Determination of Sales at Less Than Fair Value:

Certain Automotive Replacement Glass Windshields From The

People’s Republic of China, 67 Fed. Reg. 6482 (ITA Feb. 12,

2002), Commerce found that the prices paid by plaintiffs for

purchases of float glass from the market economy countries of

Korea, Indonesia, and Thailand should be disregarded because it

had a reason to believe or suspect that they were subsidized.    In

Fuyao II, the court found that, with respect to float glass

exported from Korea and Indonesia,3 Commerce had not provided

substantial evidence to support its conclusion.   See Fuyao II, 29


     3
          In Fuyao II, the court affirmed Commerce’s finding that
there was reason to believe or suspect that prices from Thailand
were subsidized. The court stated:

     Commerce has shown that subsidies of the industry in
     question existed in the supplier country, Thailand,
     during the period of investigation; that the supplier
     in question is a member of the subsidized industry, and
     could have taken advantage of any available subsidies;
     and that it would have been unnatural for that supplier
     to not have taken advantage of any available subsidies.

Fuyao II, 29 CIT at __, slip op. 05-6 at 15–16.
Consol. Court No. 02-00282                                      Page 6
CIT at __, slip op. 05-6 at 16.    As a result, the court directed:

      On remand, Commerce may concur with the court’s
      conclusion or, if it continues to find that it has
      reason to believe or suspect that these prices were
      subsidized, it must re-open the record to provide, if
      possible, additional evidence to support its conclusion
      that the prices Fuyao paid to its suppliers were
      subsidized.

Id.

      In the Remand Results, Commerce states that it “has complied

with the Court’s instructions and has recalculated the

Plaintiffs’ normal value using the purchase prices paid by

Plaintiffs to the market-economy suppliers. . . . [H]owever, the

Department has respectfully done so under protest.”    Remand

Results at 4 (footnote omitted).   In other words, given the

choice of re-opening the record and conducting a further

literature review,4 or concurring with the court’s finding that

its conclusions as to subsidization were not supported by

substantial evidence, Commerce has instead chosen a third

approach, i.e., it concurs with the court’s substantial evidence

conclusions, but does so “under protest.”    Id.   By stating that

it is issuing its Remand Results under protest, Commerce appears


      4
          In seeking evidence with respect to subsidization,
Commerce reviews available publications. For example, with
respect to Thailand, Commerce reviewed the World Trade
Organization Trade Policy Review for Thailand; the U.S. Trade
Representative’s 2001 National Trade Estimate Report on Foreign
Trade Barriers for Thailand; reports downloaded from the Thailand
Board of Investment Web site; and various news articles
concerning glass supply in Thailand. See Fuyao I, 27 CIT at __,
slip op. 03-169 at 18–19, 21.
Consol. Court No. 02-00282                                    Page 7
to be signaling that it may appeal this court’s judgment should

the Remand Results be sustained.   See, e.g., Former Employees of

S. Triangle Oil Co. v. United States, 15 CIT 150, 150 (1991) (not

reported in the Federal Supplement) (“The Department complied

under protest and thereafter filed an appeal with the Court of

Appeals for the Federal Circuit.”).



     While Commerce’s decision to recalculate normal value using

the actual prices paid is no doubt a good faith effort to bring

this matter to a more speedy conclusion, the court cannot sustain

the Remand Results for three reasons.   First, Commerce has not

complied with the court’s remand instructions.   These

instructions directed Commerce to take one of two courses of

action: either (1) concur with the court’s conclusions with

respect to substantial evidence; or (2) re-open the record to

provide, if possible, additional evidence to support its

conclusion that the prices Fuyao paid to its suppliers were

subsidized.   Fuyao II, 29 CIT at __, slip op. 05-6 at 16.

Neither of these choices on remand permit Commerce to affect to

adopt the court’s conclusions as to substantial evidence without

actually doing so.   That is, Commerce’s choices were to actually

concur in the court’s substantial evidence conclusions or re-open

the record.   Having done neither, on remand, it must make its

choice between the court’s two prescribed courses of action.
Consol. Court No. 02-00282                                    Page 8
      The second basis for directing a remand is related to the

first.   Although it has recalculated plaintiffs’ normal value

using the prices paid to market economy suppliers, Commerce

has failed to adequately explain its reasons for deciding to do

so.   See Motor Vehicle Mfrs. Ass’n. v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 48 (1983) (“We have frequently reiterated that

an agency must cogently explain why it has exercised its

discretion in a given manner . . . .”); Touros Records, Inc. v.

DEA, 259 F.3d 731, 737 (Fed Cir. 2001) (“A fundamental

requirement of administrative law is that an agency set forth its

reasons for decision.”) (internal quotations omitted); Int’l

Imaging Materials, Inc. v. United States, 29 CIT __, __, slip op.

06-11 at 13 (Jan. 23, 2006) (not published in the Federal

Supplement) (“An agency must explain its rationale . . . such

that a court may follow and review its line of analysis, its

reasonable assumptions, and other relevant considerations.

Explanation is necessary . . . for this court to perform its

statutory review function.”) (internal quotations omitted).    The

“under protest” language is simply not a sufficient explanation

of Commerce’s reasons for recalculating plaintiffs’ normal value.

On remand, Commerce must explicitly state its reasons for

reaching the decision to engage in the recalculation.


      Finally, as discussed in greater detail infra, it is

apparent that the Department has not conducted its analysis in
Consol. Court No. 02-00282                                    Page 9
accordance with the court’s finding with respect to the use of

the word “are” rather than “may be” when applying its subsidized

price methodology.   On remand, Commerce must explicitly state

that it is doing so.


II. The Second Remand Results

     While Commerce has not explained its reasons for

recalculating normal value, the Remand Results do contain

considerable explanation as to why such recalculation is not

required.   Thus, a discussion of the Remand Results is in order.



     In Fuyao I, this court found that Commerce had justified the

use of a methodology it developed for valuing the factors of

production in an NME context.   Fuyao I, 27 CIT at __, slip op.

03-169 at 14.   Part of that methodology was based on the

legislative history for 19 U.S.C. § 1677b(c)(4) which states:

“[I]n valuing such factors [of production for merchandise under

investigation], Commerce shall avoid using any prices [paid by

the NME exporters to suppliers of inputs from market economy

countries] which it has reason to believe or suspect may be

dumped or subsidized prices.”   Omnibus Trade and Competitiveness

Act of 1988, H.R. Conf. Rep. No. 100-576, at 590 (1988),

reprinted in 1988 U.S.C.C.A.N. 1623.   In other words, under this

methodology, where it has reason to suspect subsidization of

sales prices, Commerce does not use the actual prices paid to
Consol. Court No. 02-00282                                   Page 10
market economy suppliers to value factors of production.    In that

situation, Commerce looks to surrogate prices.



     Although Commerce’s methodology was found to be in

accordance with law, the court was also explicit as to its

understanding of what the methodology required.

     In developing its methodology for selecting values for
     factors of production in NME situations, Commerce
     appears to have established a higher standard than
     would necessarily be required. “The legislative
     history and recent Department determinations support
     the principal [sic] that we should disregard prices we
     have reason to believe or suspect are distorted by
     subsidies.” Issues and Decision Mem. at 10 (emphasis
     added). When reaching its findings with respect to
     subsidization, Commerce stated that the evidence
     supports the conclusion: (1) that “it is reasonable to
     infer that all exports to all countries are
     subsidized,” Id. at 11, and (2) that there is
     “particular and objective evidence to support a reason
     to believe or suspect that prices of the inputs from
     that country are subsidized.” Id. The legislative
     history relied upon to establish the reasonableness of
     its methodology, however, instructs Commerce to avoid
     prices “which it has reason to believe or suspect may .
     . . be subsidized.” Conf. Rep. at 590 (emphasis added).
     Commerce apparently has concluded it should be held to
     this higher standard, and there is nothing to indicate
     that this decision is unreasonable. That being the
     case, the court’s analysis will be in accordance with
     the standard evident in Commerce’s selected
     methodology.

Fuyao I, 27 CIT at __, slip op. 03-169 at 17 n.14.   In the text

of its Remand Results, however, Commerce continues to take issue

with the court’s finding in Fuyao I as to the standard it must

support with substantial evidence.   Remand Results at 5.   In

doing so, Commerce insists that it is not required to support
Consol. Court No. 02-00282                                     Page 11
with substantial evidence, the conclusion that it has a reason to

believe or suspect that float glass inputs are subsidized.          Id.

Instead, the Department maintains that the use of      “are” rather

than “may be” was “inadvertent.”     Id.    In addition, the

Department claims, in effect, that whether the word “are” or the

words “may be” follow the words “reason to believe or suspect,”

the standard is the same.    Id. at 7.     Neither of Commerce’s

arguments is convincing.    While it may be that its choice of

words was “inadvertent,” words are the only guide available to

the parties and the court.    That being the case, Commerce cannot

now be heard to claim that it did not mean what it said.       With

respect to the argument that its use of “are” did not change the

standard, it is simply not the case that to say that a set of

facts “are true” is the same as saying that those facts “may be

true.”   Even so, in the Remand Results, and for that matter in

defendant-intervenors’ brief, “may be” is regularly substituted

for “are.”



     Next, Commerce states that although it “does not necessarily

agree that it needs to meet th[e] three-prong test” for subsidies

set forth in Fuyao II, it has nevertheless provided record

evidence to satisfy that test.     Id. at 10.    The court’s test
Consol. Court No. 02-00282                                   Page 12
requires Commerce to show by “specific and objective evidence”5

that: (1) subsidies of the industry in question existed in the

supplier countries during the period of investigation; (2) the

supplier in question is a member of the subsidized industry or

otherwise could have taken advantage of any available subsidies;

and (3) it would have been unnatural for a supplier not to have

taken advantage of such subsidies.   See Fuyao II, 29 CIT at __,

slip op. 05-6 at 15.   In the Remand Results, without offering any

new evidence, Commerce reiterates its position from the first

remand results, Final Results of Redetermination Pursuant to

Court Remand (Mar. 18, 2004) (“First Remand Results”) that

     the record evidence of the numerous CVD [countervailing
     duty] determinations, [World Trade Organization]
     notifications, and USTR [United States Trade
     Representative] Reports supports the Department’s basis
     for its reason to believe or suspect the Korean and




     5
          See China Nat’l Mach. Imp. & Exp. Corp. v. United
States, 27 CIT __, __, 264 F. Supp. 2d 1229, 1239 (2003) (“[T]he
‘reason to believe or suspect’ standard . . . must be predicated
on particular, specific, and objective evidence.”). Commerce
does not dispute this criteria, noting in the Remand Results that
it
     relied on the particular and objective evidence of
     previous countervailing duty (“CVD”) investigations and
     reviews, in addition to numerous other sources of
     information, that were generally available at the time
     to support its conclusion that the market-economy
     purchase prices in this case were likely to be
     distorted by broadly available, non-industry-specific
     export subsidies.

Remand Results at 5.
Consol. Court No. 02-00282                                       Page 13
      Indonesian float glass producers may6 have been
      subsidized because this information was contemporaneous
      and generally available at the time of the
      investigation.

Remand Results at 22.



          In Fuyao I, the court found that “none of the record

evidence for Korea . . . or Indonesia indicates whether the

subsidy programs cited by Commerce are available to all

exporters, or to float glass producers in particular, in the

supplier countries.”      Fuyao I, 27 CIT at __, slip op. 03-169 at

22.   The court explained:

      First, none of the more than 80 countervailing duty
      determinations cited by Commerce concerning Korean
      subsidies involved float glass, the product at issue in
      this case, nor for that matter did any of the
      countervailing duty determinations involve glass of any
      kind. . . . As to Indonesia, one of the countervailing
      duty determinations cited by Commerce concerns extruded
      rubber thread, and all of the others concern apparel
      and textiles (luggage, handbags, gloves, and the like).
      Not one of the determinations concerned float glass.

Id. at __, slip op. 03-169 at 20, 21–22.      In addition to its CVD

determinations, Commerce cited World Trade Organization (“WTO”)

Reports for Korea and Indonesia as “particular and objective

evidence which supports [its] reason to believe or suspect that

the market economy purchase prices of float glass in this case

may be subsidized.”      First Remand Results at 33.   With respect to


      6
          As has been noted, Commerce now regularly uses “may”
where it previously used “are.”
Consol. Court No. 02-00282                                    Page 14
these reports, the court in Fuyao I stated:

     The WTO report for Korea indicates only that “Korea has
     aggressively promoted exports through a variety of
     policy tools,” but does not indicate which exporters
     benefit from such tools . . . [and] the WTO Report for
     Indonesia, which reviews exports subsidies and other
     promotion policies in that country, was completed in
     1999, one year before the period of review for this
     investigation.

Fuyao I, 27 CIT at __, slip op. 03-169 at 20, 22 (internal

citation omitted).   Commerce also cited the U.S. Trade

Representative’s 2001 National Trade Estimate Report on Foreign

Trade Barriers (“NTE Report”) concerning Korea’s and Indonesia’s

export subsidy practices.    As to this report, the court in Fuyao

I stated: “[T]he NTE Report [for Korea] discusses several export

loan and credit programs, but does not indicate which sectors,

producers, or products are eligible for such aid. . . .      The NTE

Report for Indonesia indicates that the export subsidies for

‘special exporters’ (a term which is not defined) lapsed in

1999.”   Id.   The court restated its holding in Fuyao II,

explaining that “it is evident that, in large measure, Commerce

has chosen to present nothing new with respect to these matters;

therefore, the observations contained in Fuyao I remain valid.”

Fuyao II, 29 CIT at __, slip op. 05-6 at 14.



     Finally, Commerce and defendant-intervenors seem to be under

the impression that the court is demanding that there be a

demonstration that the float glass industry in particular be
Consol. Court No. 02-00282                                    Page 15
found to be subsidized in order to meet the standard.   This is

simply not the case.   Rather, the court’s finding was that

Commerce had failed to demonstrate that either: (1) the Korean

and Indonesian float glass industries were subsidized; or (2)

that there were generally available subsidies of which the float

glass industry could take advantage.   With respect to industry

specific subsidies, Commerce has not attempted to show that these

existed in either country during the period of investigation.     As

to generally available subsidies, the Department’s efforts have

simply fallen short.   That is, while Commerce has provided

evidence that some exports from Indonesia would satisfy the

reason to believe or suspect test, for example, rubber thread,

apparel, and textiles, and that there are subsidies for “special

exporters,” this evidence is not sufficient to demonstrate the

existence of generally available subsidies.   Similarly, the more

than 80 countervailing duty determinations concerning Korea deal

almost exclusively with products made of steel; none concern

glass.   Thus, while defendant-intervenors insist that a broad

range of industries and producers of twenty-four product

categories7 were found to have benefitted from the same subsidy


     7
          It appears to the court that only thirteen product
categories are, in fact, represented. Those categories are:
certain steel products; industrial belts; stainless steel cooking
ware; carbon steel plate; stainless sheet and strip in coils;
steel sheet and strip in coils; steel plate in coils; structural
steel beams; oil country tubular goods; platform jackets and
piles; bicycle tires and tubes; steel flat-rolled products; and
Consol. Court No. 02-00282                                   Page 16
programs, these categories are sufficiently restrictive as not to

provide substantial evidence showing that generalized subsidies

were available.



     As the court stated in its remand instructions, “Congress

did not intend that Commerce conduct a formal investigation to

determine a company’s particular subsidy level . . . .”   Fuyao

II, 29 CIT at __, slip op. 05-6 at 16.   Commerce has chosen,

however, not to re-open the record and examine the literature for

evidence to support its determination.   As a result, the court

continues to find, as it did in both Fuyao I and Fuyao II, that

the defendant has failed to provide specific and objective

evidence to support its conclusion that it had a reason to

believe or suspect that prices from Korea and Indonesia were

subsidized.



III. Commerce’s Other Findings

     Because plaintiff’s comments with respect to Commerce’s

other findings may be influenced by the Department’s third remand

results, the court defers consideration of those findings pending

the remand results ordered here.




cold-rolled and corrosion-resistant flat products.   See Conf. R.
Doc. 92, Ex. 1.
Consol. Court No. 02-00282                                   Page 17
                             CONCLUSION

     For the foregoing reasons, the court remands this matter to

Commerce for further action in accordance with this opinion.



     Remand results are due on May 16, 2006, comments are due on

June 15, 2006, and replies to such comments are due on June 26,

2006.




                                /s/ Richard K. Eaton
                                   Richard K. Eaton, Judge


Dated:    February 15, 2006
          New York, New York
