Case: 21-2205 Document: 59 Page: 1 Filed: 09/23/2022
United States Court of Appeals
for the Federal Circuit
______________________
XI'AN METALS & MINERALS IMPORT & EXPORT
CO., LTD.,
Plaintiff
SHANXI PIONEER HARDWARE INDUSTRIAL CO.,
LTD., BUILDING MATERIAL DISTRIBUTORS,
INC.,
Plaintiffs-Appellants
v.
UNITED STATES, MID CONTINENT STEEL&
WIRE, INC.,
Defendants-Appellees
______________________
2021-2205, 2021-2227
______________________
Appeals from the United States Court of International
Trade in Nos. 1:20-cv-00103-LMG, 1:20-cv-00111-LMG,
1:20-cv-00116-LMG, Senior Judge Leo M. Gordon.
______________________
Decided: September 23, 2022
______________________
JOSEPH DIEDRICH, Husch Blackwell LLP, Madison, WI,
argued for all plaintiffs-appellants. Plaintiff-appellant
Shanxi Pioneer Hardware Industrial Co., Ltd. also repre-
sented by JEFFREY S. NEELEY, STEPHEN W. BROPHY, Wash-
ington, DC.
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2 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
LIZBETH ROBIN LEVINSON, Fox Rothschild LLP, Wash-
ington, DC, for plaintiff-appellant Building Material Dis-
tributors, Inc. Also represented by BRITTNEY RENEE
POWELL, RONALD MARK WISLA.
ROBERT R. KIEPURA, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee United States.
Also represented by SOSUN BAE, BRIAN M. BOYNTON,
PATRICIA M. MCCARTHY; AYAT MUJAIS, International Office
of the Chief Counsel for Trade Enforcement & Compliance,
United States Department of Commerce, Washington, DC.
ADAM H. GORDON, The Bristol Group PLLC, Washing-
ton, DC, argued for defendant-appellee Mid Continent
Steel & Wire, Inc. Also represented by LAUREN FRAID,
JENNIFER MICHELE SMITH.
______________________
Before MOORE, Chief Judge, NEWMAN and STOLL, Circuit
Judges.
STOLL, Circuit Judge.
Shanxi Pioneer Hardware Industrial Co., Ltd. (Pio-
neer) and Building Material Distributors, Inc. (BMD) ap-
peal the decision of the United States Court of
International Trade affirming the United States Depart-
ment of Commerce’s final results in the tenth administra-
tive review of the antidumping order on certain steel nails
from the People’s Republic of China. Based on its finding
that Pioneer did not cooperate to the best of its ability with
Commerce’s request for information, Commerce applied
adverse facts available against Pioneer and assigned an
antidumping margin of 118.04 percent to Pioneer. We af-
firm the Court of International Trade’s judgment based on
its conclusion that Commerce’s decision to apply adverse
facts available was supported by substantial evidence.
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 3
BACKGROUND
Commerce protects domestic producers from unfair
trade practices, such as dumping, by investigating whether
imported merchandise is being sold in the United States at
less than fair value and imposing antidumping duties on
subject merchandise to level the playing field.
19 U.S.C.
§ 1673. To determine the fair value of merchandise from
non-market economies, such as China, Commerce con-
structs a respondent-specific per unit “normal value” rep-
resenting the cost of production of the merchandise.
Commerce uses this normal value to determine whether
the merchandise is being dumped. If so, Commerce calcu-
lates a dumping margin and a corresponding duty assess-
ment rate for that respondent and issues an antidumping
duty order. At the request of interested parties, Commerce
reviews and reassesses its antidumping duty orders annu-
ally after the initial investigation. § 1675(a).
This story begins in 2008. Mid Continent Steel & Wire,
Inc. (Mid Continent) petitioned Commerce to investigate
the importation and sale of certain steel nails from China.
During this initial investigation, Commerce determined
that the subject merchandise was being dumped and issued
an antidumping duty order. Notice of Antidumping Duty
Order: Certain Steel Nails From the People’s Republic of
China,
73 Fed. Reg. 44961 (Aug. 1, 2008). Because Com-
merce has designated China as a non-market economy,
Commerce applies a rebuttable presumption that all Chi-
nese producers are subject to government control and
therefore should be assigned a country-wide dumping mar-
gin. Commerce selects a number of producers or importers
for individual examination to determine this country-wide
dumping margin and other margins. Pioneer—a Chinese
producer and importer/exporter of steel nails (the subject
merchandise)—applied for and received a separate rate in
this initial antidumping investigation. In other words, Pi-
oneer demonstrated that it was independent of government
control and should be assessed a rate different from the
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4 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
country-wide rate. Commerce did not select Pioneer for in-
dividual examination. Commerce set the country-wide
margin for China at 118.04 percent.
Id. at 44965.
In 2013, Commerce published the results of its third
administrative review of the antidumping order, covering
merchandise entries that occurred between August 1, 2010,
and July 31, 2011. Commerce announced its intention to
require that [a respondent in the third administra-
tive review] and all other future respondents for
this case report all FOPs [factors of production]
data on a CONNUM-specific basis using all prod-
uct characteristics in subsequent reviews, as docu-
mentation and data collection requirements should
now be fully understood by [the particular respond-
ent] and all other respondents.
Certain Steel Nails From the People’s Republic of China;
Issues and Decision Memorandum for the Final Results of
the Antidumping Duty Administrative Review, A-570-909,
ARP 10–11, at 36–40 (Dep’t of Com. Mar. 5, 2013)
(2010–2011 Final IDM) (emphasis added); see also Certain
Steel Nails From the People’s Republic of China; Final Re-
sults of Third Antidumping Duty Administrative Review;
2010–2011,
78 Fed. Reg. 16651 (Mar. 18, 2013).
“‘CONNUM’ is a contraction of the term ‘control num-
ber,’ and is Commerce jargon for a unique product.” Xi’an
Metals & Mins. Imp. & Exp. Co. v. United States,
520
F. Supp. 3d 1314 (Ct. Int’l Trade June 9, 2021) (CIT Op.).
A particular CONNUM roughly corresponds to a particular
product defined “in terms of a hierarchy of specified physi-
cal characteristics determined in each antidumping pro-
ceeding.”
Id. Commerce defines CONNUMs by identifying
“key physical characteristics of the subject merchandise”
that are “commercially meaningful” in the United States
marketplace and “have an impact on costs of production.”
Gov’t Br. 7. CONNUM-specific data allows Commerce to
perform comparisons of its constructed normal values to
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 5
export prices on as precise a basis as possible. CIT Op., 520
F. Supp. 3d. at 1322; Gov’t Br. 7–8. Commerce has re-
quired reporting factors of production (FOPs) on a
CONNUM-specific basis using similar language in various
antidumping proceedings for over a decade.
In 2018, Commerce initiated the administrative review
underlying this appeal, the tenth administrative review of
the antidumping order covering the period of August 1,
2017, to July 31, 2018. Commerce selected three manda-
tory respondents, including Pioneer, for examination from
among the companies that requested to be considered sep-
arate rate companies. Certain Steel Nails from the Peo-
ple’s Republic of China: Preliminary Results of the
Antidumping Duty Administrative Review and Prelimi-
nary Determination of No Shipments; 2017–2018,
84 Fed.
Reg. 55906 (Oct. 18, 2019) (2017–2018 Preliminary Re-
sults). This marked the first time that Pioneer was selected
as a mandatory respondent in the course of this antidump-
ing proceeding and was therefore the first time that Pio-
neer had an individual obligation to cooperate with
Commerce’s investigation, including responding to Com-
merce’s questionnaires designed to obtain information nec-
essary to calculate dumping margins.
Commerce issued questionnaires to the mandatory re-
spondents, requesting FOP data for the subject merchan-
dise using “actual quantities consumed . . . on a CONNUM-
specific basis.” J.A. 279. The questionnaire stated that a
respondent could alternatively provide FOP data using a
different allocation methodology if the respondent provided
a “detailed explanation of all efforts undertaken to report
the actual quantity . . . on a CONNUM-specific basis,” how
the estimated FOP consumption was derived, and “why the
methodology[] selected is the best way to accurately
demonstrate an accurate consumption amount.”
Id. Pio-
neer responded to the questionnaire, representing that it
had “reported the factors of production (FOPs) using actual
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6 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
quantities consumed to produce the merchandise under in-
vestigation on a CONNUM-specific basis.” J.A. 824.
As part of the administrative review process, inter-
ested parties can submit comments to Commerce regarding
the respondents’ responses. In this case, Mid Continent
challenged the integrity of Pioneer’s data, asserting that
although Pioneer “indicate[d] that it ha[d] provided
CONNUM-specific FOPs, it clearly ha[d] not.” J.A. 1012
(footnote omitted). Explaining that Pioneer had “made no
attempt whatsoever to differentiate” its estimated FOP
values on a product-by-product basis “in any way,” Mid
Continent contended that this “failure to calculate product-
specific FOPs is highly distortive as it allocates consump-
tion equally across all CONNUMs and distorts the margin
calculations.” J.A. 1013.
Based on Mid Continent’s comments, Commerce issued
Pioneer a supplemental questionnaire seeking clarifica-
tion. Again, Commerce asked Pioneer to “provide a narra-
tive description and any supporting documentation to
explain why [it was] unable to provide more specific mate-
rial input FOPs on a CONNUM or product group basis.”
J.A. 1026–27. And again, Commerce offered Pioneer the
option to develop an alternative “methodology that cap-
tures consumption differences based on the different
sizes/weights of the nails produced” to the extent Pioneer
did not “track these material consumptions on a more spe-
cific basis.” J.A. 1027. Pioneer responded to Commerce’s
supplemental questionnaire, this time admitting that it
was not providing the FOPs on a CONNUM-specific basis.
J.A. 1042–45. Instead, Pioneer repeatedly asserted that it
had “no cost records that would support any other alloca-
tion methodology” and provided no further explanation.
Id.
On October 18, 2019, Commerce published its prelimi-
nary results. 2017–2018 Preliminary Results,
84 Fed. Reg.
55906. [J.A. 82] Using the FOP data that Pioneer pro-
vided in its initial questionnaire response, Commerce
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 7
calculated a dumping margin of 13.88 percent for Pioneer.
Id. at 55907. At Commerce’s invitation, Mid Continent
filed comments on the preliminary results, highlighting Pi-
oneer’s “fail[ure] to provide information critical to the cal-
culation of accurate margins,” despite the fact that it had
an “opportunity to remedy these deficiencies” in its supple-
mental response. J.A. 1192. According to Mid Continent,
despite Commerce’s “specific[] instruct[ions to] Shanxi [Pi-
oneer] to revise its . . . FOPs to capture product distinc-
tions,” or, alternatively, to “develop a methodology to take
distinctions in weight, size, or surface area into account,”
Pioneer did neither. J.A. 1194. Mid Continent asserted
that, as the producer of the subject merchandise, Pioneer
“[c]learly . . . possesse[d] knowledge and/or records . . . of
its products that would have allowed it to develop more ac-
curate FOP allocation methodologies.”
Id. From Mid Con-
tinent’s perspective, Pioneer’s failure to do so “rendered
[its] response unusable for margin calculations.” J.A. 1192.
On April 22, 2020, Commerce published its final re-
sults. Commerce reconsidered Pioneer’s rate assignment
in view of the comments submitted by Mid Continent. Be-
cause Pioneer “withheld information” requested of it,
“failed to provide data in the form and manner requested,”
and “significantly impeded” the administrative review,
Commerce resorted to facts otherwise available (FA). Cer-
tain Steel Nails from the People’s Republic of China; Issues
and Decision Memorandum for the Final Results of the An-
tidumping Duty Administrative Review, A-570-909, ARP
17–18, at 34 (Dep’t of Com. Apr. 15, 2020) (2017–2018 Final
IDM). In particular, Commerce noted that although “Pio-
neer had notice of the general record-keeping requirements
relating to this order,” Pioneer “did not heed . . . instruc-
tions to maintain appropriate data such that it could
properly report FOPs.”
Id. at 32. And, Commerce ex-
plained, applying adverse inferences when selecting from
facts available (AFA) was also warranted because Pioneer
failed to act to the best of its ability to comply with a
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8 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
request for information. Specifically, Pioneer’s failure to
“maintain[] adequate records” or “develop[] a methodology
to report product-specific costs,”
id. at 34, despite “multiple
opportunities” throughout the underlying administrative
review, constituted a failure to act to the best of its ability,
id. at 32. Commerce assigned a margin of 118.04 percent—
the country-wide rate for China—to Pioneer.
Pioneer and two separate rate respondents, BMD and
Xi’an Metals & Minerals Import & Export Co., appealed
Commerce’s final results to the Court of International
Trade, which consolidated the cases. CIT Op.,
520 F. Supp. 3d at 1318–19. The respondents argued that
Commerce violated the Administrative Procedure Act
(APA) when it announced it would require future respond-
ents to comply with the CONNUM-specific reporting re-
quirement. Pioneer argued that requiring respondents to
“report CONNUM-specific costs amount[ed] to a ‘rule’ that
Commerce ‘promulgated . . . without proper notice and
comment rule making’” under the APA. Id. at 1322–23 (al-
teration in original). Furthermore, Pioneer complained
that Commerce “denied respondent [Pioneer] the oppor-
tunity to use another allocation methodology by requiring
a more specific method of reporting and recordkeeping.”
Id. at 1327.
The Court of International Trade sustained Com-
merce’s final results. The court explained that “Com-
merce’s adoption of a CONNUM-specific reporting
requirement d[id] not amount to the implementation of a
legislative rule that would require notice-and-comment
rulemaking.” Id. at 1323. And because Commerce “deter-
mined that it needed data that more accurately reflected
the costs associated with the production and sale of the
subject merchandise,” Commerce’s announcement of the
CONNUM-specific reporting requirement was “a state-
ment of policy” and not an “explicit invocation of general
legislative authority” that would have triggered the notice-
and-comment requirement of the APA. Id. at 1324.
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 9
Additionally, the court determined that substantial evi-
dence supported Commerce’s application of AFA. Specifi-
cally, the court explained that despite having been on
notice of Commerce’s reporting requirement since 2013 and
having been given multiple opportunities throughout the
course of the underlying administrative review to comply
or explain why it could not comply, Pioneer did neither.
The court concluded that these facts supported Commerce’s
determination that Pioneer failed to cooperate to the best
of its ability, warranting application of AFA.
Pioneer and BMD appeal. Our court consolidated the
appeals. We have jurisdiction under
28 U.S.C.
§ 1295(a)(5).
DISCUSSION
We review de novo the Court of International Trade’s
judgments, reapplying the same statutory standard of re-
view as that court. NEXTEEL Co. v. United States,
28 F.4th 1226, 1233 (Fed. Cir. 2022). Commerce’s “special
expertise in administering the anti-dumping law entitles
its decisions to deference.” Nippon Steel Corp. v. United
States,
337 F.3d 1373, 1379 (Fed. Cir. 2003) (citing cases).
Both the Court of International Trade and our court review
Commerce’s findings for substantial evidence.
Id. Sub-
stantial evidence is “such evidence that a reasonable mind
might accept as adequate to support a conclusion.” SeAH
Steel VINA Corp. v. United States,
950 F.3d 833, 840
(Fed. Cir. 2020) (cleaned up).
On appeal, Pioneer1 primarily argues that Commerce’s
use of FA and AFA based on Pioneer’s failure to comply
with the CONNUM-specific reporting requirement was un-
lawful because the CONNUM-specific reporting require-
ment is a legislative rule that should have been
1 BMD joined Pioneer in its opening and reply briefs
and waived oral argument.
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10 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
promulgated through notice-and-comment rulemaking.
Separately, Pioneer asserts that Commerce’s decision to
apply AFA and assignment of the 118.04 percent margin
was unsupported by substantial evidence. We address
each issue in order.
I
We begin with Pioneer’s arguments that the
CONNUM-specific reporting requirement is unlawful. Pi-
oneer asserts that Commerce’s CONNUM-specific report-
ing requirement is a rule promulgated without the
requisite notice-and-comment rulemaking procedure un-
der the APA and therefore null. Appellants’ Br. 20–21. In
the alternative, Pioneer claims that even if the CONNUM-
specific reporting requirement is exempt from notice-and-
comment rulemaking, the rule is inconsistent with the Tar-
iff Act of 1930 and therefore invalid.
Id. at 31. We address
each argument in turn.
A
Under the APA, certain proposed “legislative rules” ad-
vanced by agencies must be promulgated through notice-
and-comment rulemaking.
5 U.S.C. § 553(b). The APA,
however, makes an exception for “interpretative rules, gen-
eral statements of policy, or rules of agency organization,
procedure, or practice.” § 553(b)(3)(A). Our court has ar-
ticulated the distinction between legislative rules, which
require notice-and-comment rulemaking, and other rules
that do not: “Legislative rules alter the landscape of indi-
vidual rights and obligations, binding parties with the force
and effect of law; interpretive rules, on the other hand,
merely clarify existing duties for affected parties.” Stupp
Corp. v. United States,
5 F.4th 1341, 1352 (Fed. Cir. 2021)
(citing Kisor v. Wilkie,
139 S. Ct. 2400, 2420 (2019)); see
also Splane v. West,
216 F.3d 1058, 1063 (Fed. Cir. 2000).
On appeal, Pioneer “direct[s] our attention to American
Mining Congress v. Mine Safety & Health Administration,
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 11
995 F.2d 1106 (D.C. Cir. 1993),” where our sister circuit
held that a rule is a legislative rule “if any one of [a number
of] conditions are satisfied.” Nat’l Org. of Veterans’ Advo-
cates, Inc. v. Sec’y of Veterans Affs.,
260 F.3d 1365, 1376
n.11 (Fed. Cir. 2001) (citing Am. Mining, 995 F.2d at 1112);
see Appellants’ Br. 22. Here, Pioneer argues that the
fourth American Mining factor—“whether the rule effec-
tively amends a prior legislative rule,” Veterans’ Advocates,
260 F.3d at 1376—is satisfied. Specifically, Pioneer argues
that Commerce’s CONNUM-specific reporting require-
ment is a legislative rule because it “effectively amends”
Commerce’s existing regulation,
19 C.F.R. § 351.401(g).
Section 351.401(g) recites, in relevant part:
(2) Reporting allocated expenses and price
adjustments. Any party seeking to report an ex-
pense or a price adjustment on an allocated basis
must demonstrate to the Secretary’s satisfaction
that the allocation is calculated on as specific a ba-
sis as is feasible, and must explain why the alloca-
tion methodology used does not cause inaccuracies
or distortions.
(3) Feasibility. In determining . . . whether an al-
location is calculated on as specific a basis as is fea-
sible, the Secretary will take into account the
records maintained by the party in question in the
ordinary course of its business, as well as such fac-
tors as the normal accounting practices in the coun-
try and industry in question and the number of
sales made by the party during the period of inves-
tigation or review.
§ 351.401(g)(2), (3).
According to Pioneer, § 351.401(g) requires only that
respondents offer records that are maintained “in the ordi-
nary course of [the respondent’s] business” and according
to “normal accounting practices in the country and
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12 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
industry,” or according to generally accepted accounting
practices (GAAP). Appellants’ Br. 22–23. Pioneer argues
that, in contrast, the CONNUM-specific reporting require-
ment “requires all foreign exporters and producers of nails
to maintain records in a particular way—regardless of
GAAP.” Id. at 25. Pioneer further contends that the
CONNUM-specific requirement relieves Commerce of its
obligation to consider the feasibility of the reporting
method requested and the form of the records kept by the
exporters and producers. Pioneer thus asserts that the
CONNUM-specific requirement alters the legal responsi-
bilities of all respondents and of Commerce itself and there-
fore does not merely clarify the regulation.
As we have previously held, however, “[a] rule does not
. . . become an amendment merely because it supplies
crisper and more detailed lines than the authority being
interpreted.” Veterans’ Advocates, 260 F.3d at 1376 (alter-
ations in original) (quoting Am. Mining, 995 F.2d at 1112);
see also CIT Op., 520 F. Supp. 3d at 1323 (citing Apex Fro-
zen Foods Private Ltd. v. United States,
144 F. Supp. 3d
1308, 1319–20 (Ct. Int’l Trade Feb. 2, 2016), aff’d on other
grounds,
862 F.3d 1337 (Fed. Cir. 2017)). While Pioneer is
correct that § 351.401(g) contemplates records that are
maintained “in the ordinary course of [the respondent’s]
business” or according to “normal accounting practices in
the country and industry,” the regulation also very clearly
states that the respondent “must explain why the alloca-
tion methodology used does not cause inaccuracies or dis-
tortions.” Here, Commerce explained that cost information
in formats other than the requested CONNUM-specific for-
mat resulted in information that “did not reasonably reflect
the costs of production of the merchandise.” CIT Op., 520
F. Supp. 3d at 1323 (citing 2017–2018 Final IDM at 34).
Commerce was therefore entitled to clarify the regulation
regarding the data used in performing margin calculations
in the third administrative review because it needed data
that “more accurately reflected the costs associated with
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 13
the production and sale of the subject merchandise.” Id.
at 1324. We agree with the Court of International Trade
that Commerce’s pronouncement “reflects a statement of
policy rather than the agency’s explicit invocation of gen-
eral legislative authority.” Id. Accordingly, we see no error
in the Court of International Trade’s determination that
the CONNUM-specific rule is not subject to the notice-and-
comment rulemaking provisions of the APA.
B
Pioneer separately asserts that the CONNUM-specific
reporting requirement is unlawful because it is incon-
sistent with the Tariff Act and our decision in Hynix Semi-
conductor, Inc. v. United States,
424 F.3d 1363 (Fed. Cir.
2005). We disagree.
Pioneer contends that 19 U.S.C. § 1677b, concerning
the calculation of the normal value of merchandise, “clearly
and unambiguously expresses a preference for Commerce
to rely on a respondent’s GAAP-compliant normal books
and records” and “does not contemplate the CONNUM-
Specific Rule.” Appellants’ Br. 33. The relevant portion of
§ 1677b recites:
Costs shall normally be calculated based on the rec-
ords of the exporter or producer of the merchan-
dise, if such records are kept in accordance with the
generally accepted accounting principles of the ex-
porting country (or the producing country, where
appropriate) and reasonably reflect the costs asso-
ciated with the production and sale of the merchan-
dise. The administering authority shall consider
all available evidence on the proper allocation of
costs, including that which is made available by the
exporter or producer on a timely basis, if such allo-
cations have been historically used by the exporter
or producer, in particular for establishing appropri-
ate amortization and depreciation periods, and
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14 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
allowance for capital expenditures and other devel-
opment costs.
§ 1677b(f)(1)(A).
In Hynix, we held that § 1677b(f)(1)(A) permits Com-
merce to disregard a respondent’s GAAP-compliant records
upon a finding, supported by substantial evidence, “that
the costs do not reasonably reflect the costs of production
and should not, therefore, be used.”
424 F.3d at 1369. Pi-
oneer claims that Commerce failed to make such a finding
here. Specifically, Pioneer takes issue with Commerce’s re-
jection of Pioneer’s accounting methods without explaining
“why reporting on a CONNUM-specific basis or on a
size/weight-specific basis was necessary or why Pioneer’s
proposed methodology was inadequate.” Appellants’
Br. 36.
But Commerce did explain its reasoning here. As the
Court of International Trade explained, and as we dis-
cussed above, Commerce determined in the third adminis-
trative review that CONNUM-specific data is essential for
the accurate calculation of costs due to the variations in
physical characteristics of the merchandise. CIT Op.,
520 F. Supp. 3d at 1324–25 (citing 2017–2018 Final IDM
at 34 (describing the product-specific costs as “essential to
the accurate calculation of Pioneer’s dumping margin”)).
Commerce “explained that CONNUM-specific reporting
yields data more specific to the costs of the subject mer-
chandise than standard GAAP records.” Id. at 1325. In
other words, Commerce found that Pioneer’s non-product-
specific FOP data did not “reasonably reflect the costs of
production and should not, therefore, be used.” Hynix,
424
F.3d at 1369. On this record, we agree with, and therefore
affirm, the Court of International Trade’s determination
that Commerce’s conclusion was based on substantial evi-
dence.
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 15
II
Pioneer also argues that substantial evidence does not
support Commerce’s decision to apply AFA. We disagree.
Under 19 U.S.C. § 1677e, Commerce can rely on facts
otherwise available when “necessary information is not
available on the record” or “an interested party or any other
person withholds information that has been requested.”
§ 1677e(a). After determining that it can rely on FA, Com-
merce can further apply adverse facts available if a party
has “failed to cooperate by not acting to the best of its abil-
ity to comply with a request for information.” § 1677e(b).
The “best of its ability” standard requires the respondent
to put forth its maximum effort to investigate and obtain
full and complete answers to Commerce's inquiries. Nip-
pon Steel,
337 F.3d at 1382.
The Court of International Trade correctly determined
that Commerce’s application of FA and AFA was supported
by substantial evidence. First, in deciding to apply FA,
Commerce reasonably determined that Pioneer’s repeated
failure to submit its cost information on a CONNUM-
specific basis meant that necessary information reasonably
reflecting the costs of production was not available. 2 CIT
Op., 520 F. Supp. 3d at 1323–24.
Second, in deciding to apply AFA, Commerce deter-
mined that Pioneer “failed to cooperate by not maintaining
adequate records and by not developing a methodology to
2 Although Commerce incorrectly characterizes Pio-
neer’s initial response as one “refusing” to provide the
CONNUM-specific data, the error was harmless because
Pioneer did not actually provide CONNUM-specific data
and also admitted that it would not do so in response to the
supplemental questionnaire. Pioneer stated that it did not
have any “cost records that would support any other allo-
cation methodology.” J.A. 1041–44.
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16 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
report product-specific costs” and thus “failed to act to the
best of its ability to comply with a request for information.”
2017–2018 Final IDM at 34. Substantial evidence supports
this determination. In particular, as the Court of Interna-
tional Trade explained, “Pioneer failed to even provide
more than short, conclusory statements as to why it could
not comply with Commerce’s requests, much less actually
attempt to develop a methodology.” CIT Op.,
520 F. Supp. 3d at 1327 (citing 2017–2018 Final IDM at
32). Moreover, Commerce’s requests for CONNUM-specific
data should not have come as a surprise. Commerce an-
nounced during the third administrative review, nearly
seven years prior to the underlying tenth administrative
review, that it intended to require that “all other future re-
spondents for this case report all FOPs data on a
CONNUM-specific basis using all product characteristics
in subsequent reviews,” explaining that by this stage in the
antidumping proceeding, “documentation and data collec-
tion requirements should now be fully understood” by all
respondents. 2010–2011 Final IDM at 39. In this an-
nouncement, Commerce specifically stated that respond-
ents would have the responsibility to “maintain accounting
and production records on a monthly, product-specific ba-
sis.” Id. at 39–40. Commerce even gave an example of how
to maintain records: “For instance, in order to calculate
product-specific ratios for an input, such as steel wire rod,
Hongli and all future respondents should maintain ware-
house records, workshop records, etc., on a monthly, prod-
uct-specific basis for that input.” Id. at 40 n.132.
Notwithstanding its protest that the underlying adminis-
trative review “marked the first time Pioneer was selected
as a mandatory respondent in an administrative review,”
Appellants’ Br. 7, Pioneer has been on notice of Com-
merce’s reporting requirements as of 2013. Other respond-
ents complied with Commerce’s directive and properly
provided the requested data. Pioneer provided no reason
that it could not have similarly done so. At a minimum,
Pioneer should have explained to Commerce why it was
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 17
unable to comply and developed and documented an alter-
native methodology.
On appeal, Pioneer asserts that “[n]ails are a simple
product with minor variations,” and that “Pioneer reported
selling nails with three thicknesses.” Appellants’ Br. 36.
In Pioneer’s view, “[t]o suggest that failure to report FOPs
on a size/weight-specific basis significantly distorts the
margin defies common sense given the minor physical var-
iations of this product.” Id. at 36–37. But in making this
argument Pioneer bolsters the case against it. Although
the “best of its ability” standard “does not require perfec-
tion,” “it does not condone inattentiveness, carelessness, or
inadequate record keeping.” Nippon Steel,
337 F.3d
at 1382. If a methodology for recordkeeping could have
been easily derived, Pioneer cannot argue in good faith that
it has acted to the best of its ability. Pioneer “[c]learly . . .
possesse[d] knowledge and/or records of the weight, size,
and surface area of its products that would have allowed it
to develop more accurate FOP allocation methodologies,”
as Commerce’s instructions required, but Pioneer refused
to do so. J.A. 1194. Pioneer is responsible for being “famil-
iar with the rules and regulations”; “hav[ing] familiarity
with all of the records it maintains in its possession, cus-
tody, or control”; and “conduct[ing] prompt, careful, and
comprehensive investigations of all relevant records that
refer or relate to the imports in question to the full extent
of [its] ability to do so.” Nippon Steel,
337 F.3d at 1382.
Pioneer’s refusal to participate in Commerce’s investiga-
tion to the best of its ability, despite having the opportunity
to do so, supports Commerce’s application of AFA. For
these reasons, we agree with the Court of International
Trade that Commerce’s application of AFA was supported
by substantial evidence.
Pioneer next argues that even if Commerce’s applica-
tion of AFA was appropriate, “the application of at most
partial AFA, as opposed to total AFA, ‘is directed by the
statute’ in this case.” Appellants’ Br. 50 (quoting Nat’l Nail
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18 XI’AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US
Corp. v. United States,
390 F. Supp. 3d 1356, 1375 (Ct. Int’l
Trade June 12, 2019)). But our court has upheld Com-
merce’s use of total AFA as reasonable when a respondent
has failed to cooperate to the best of its ability despite a
number of opportunities to do so—specifically in the con-
text of failing to provide CONNUM-specific FOPs. Mukand
Ltd. v. United States,
767 F.3d 1300 (Fed. Cir. 2014). As
we stated in Mukand, “[p]roduct-specific information is a
fundamental element in the dumping analysis, and it is
standard procedure for Commerce to request product-spe-
cific data in antidumping investigations.”
Id. at 1307. Be-
cause of the importance of the information requested,
Commerce was entirely reasonable to expect “more accu-
rate and responsive answers to the questionnaire.”
Id. Pi-
oneer did not provide such answers, and therefore we
cannot find the application of AFA unsupported by sub-
stantial evidence. 3
3 Pioneer also asserts that even if we conclude that
Commerce properly applied AFA, Commerce failed to ex-
plain its selection of 118.04 percent, as opposed to a lower
AFA margin. Appellants’ Br. 50–53 (citing our decision in
BMW of N. Am. LLC v. United States,
926 F.3d 1291, 1300
(Fed. Cir. 2019)). We note, however, that Pioneer did not
raise this argument before Commerce or the Court of Inter-
national Trade. J.A. 1288 (only asserting that “Commerce
should be required to explain . . . why a margin of 108.04
[sic] percent is appropriate” in the context of alleging that
Commerce should have relied on respondent’s books and
records). Pioneer did not identify alternative AFA margins
or legal support for the specific argument it now makes.
Pioneer has thus waived this argument because it cannot
“raise[] issues for the first time on appeal.” Hylete LLC v.
Hybrid Athletics, LLC,
931 F.3d 1170, 1175 (Fed. Cir.
2019). To the extent that Pioneer presents this argument
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XI'AN METALS & MINERALS IMPORT & EXPORT CO., LTD. v. US 19
CONCLUSION
We have considered Pioneer’s remaining arguments
and find them unpersuasive. For the foregoing reasons, we
affirm the Court of International Trade’s decision sustain-
ing Commerce’s final results.
AFFIRMED
as it did below to demonstrate that Commerce erred in ap-
plying adverse facts available, we are not persuaded for the
reasons above.
