Changshou Wujin Fine Chemical Factory Co., Ltd. v. United States ( 2012 )

United States Court of Appeals
for the Federal Circuit
__________________________
CHANGZHOU WUJIN FINE CHEMICAL FACTORY
CO., LTD.,
Plaintiff,
AND
JIANGSU JIANGHAI CHEMICAL GROUP, LTD.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee,
AND
COMPASS CHEMICAL INTERNATIONAL, LLC,
Defendant-Appellee.
__________________________
2011-1080
__________________________
Appeal from the United States Court of International
Trade in case no. 09-CV-0216, Judge Judith M. Barzilay.
__________________________
Decided: December 17, 2012
__________________________
DAVID J. CRAVEN, Riggle and Craven, of Chicago, Illi-
nois, argued for plaintiff-appellant.
CHANGZHOU WUJIN v. US 2
ANTONIA R. SOARES, Trial Attorney, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee United States. With her on the brief were TONY
WEST, Assistant Attorney General, JEANNE E. DAVIDSON,
Director, and PATRICIA M. MCCARTHY, Assistant Director.
Of counsel on the brief was AHRAN KANG MCCLOSKEY,
Office of Chief Counsel for Import Administration, United
States Department of Commerce, of Washington, DC.
JEFFREY S. LEVIN, Mondial Trade Compliance Ser-
vices & Solutions Inc., of Bethesda, Maryland, argued for
defendant-appellee Compass Chemical International,
LLC.
__________________________
Before DYK, CLEVENGER, and REYNA, Circuit Judges.
Opinion for the Court filed by Circuit Judge DYK. Dis-
senting opinion filed by Circuit Judge REYNA.
DYK, Circuit Judge.
Jiangsu Jianghai Chemical Group, Ltd. (“Jiangsu Ji-
anghai”) appeals a decision of the United States Court of
International Trade that the Department of Commerce
(“Commerce”) did not exceed the scope of a remand order
when it recalculated the U.S. price and that the explana-
tion given by Commerce for its calculation of the separate
rate on remand was not unreasonable. We affirm in part,
and reverse and remand in part.
BACKGROUND
When merchandise is sold in the United States at less
than fair value, Commerce is authorized by statute to
3 CHANGZHOU WUJIN v. US
impose antidumping duties. These duties are equal to the
amount by which the price of the merchandise in the
exporting country (“normal value”) exceeds the price of
the merchandise in the United States (“export price” or
“U.S. price.”). See 19 U.S.C. §§ 1673e(a)(1), 1677b(a)(1),
1677a(a). The statute provides that Commerce will
generally determine individual dumping margins for each
known exporter or producer, but if that is not practicable,
Commerce may individually investigate a reasonable
number of respondents. 19 U.S.C. § 1677f-1(c)(1)–(2).
Those not individually investigated are assigned a sepa-
rate rate, sometimes referred to as the “all-others” rate.
19 U.S.C. § 1673d(c)(1)(B)(II). In proceedings involving
non-market economy countries, including China, Com-
merce presumes that exporters and producers are state-
controlled, and assigns them a single state-wide rate. See
19 C.F.R. § 351.107. This presumption is rebuttable; a
company that demonstrates sufficient independence from
state control may apply to Commerce for a separate rate.
Here, Commerce concluded that the appellant was enti-
tled to a separate rate. The central issue concerns the
calculation of that separate rate.
This underlying proceeding involves an investigation
of imports of 1-hydroxyethylidene-1,1-diphosphonic acid
(“HEDP”) from the People’s Republic of China, initiated in
response to a petition filed by Compass Chemical Interna-
tional, LLC (“Compass Chemical”). Commerce sent initial
quantity and value (“Q&V”) questionnaires to ten known
HEDP exporters and producers identified in the petition.
1 Hydroxyethylidene 1,1 Diphosphonic Acid from the
Republic of India and the People's Republic of China, 73
Fed. Reg. 62,470 n.1 (Dep’t of Commerce Oct. 21, 2008)
(“Preliminary Determination”). Five companies re-
sponded: Changzhou Wujin Fine Chemical Factory Co.,
Ltd. (“Wujin Fine Chemical”); Changzhou Kewei Fine
CHANGZHOU WUJIN v. US 4
Chemical Factory (“Kewei”); BWA Water Additives U.S.
LLC (“BWA”); Nanjing University of Chemical Technology
Changzhou Wujin Water Quality Stabilizer Factory Ltd.
(“Wujin Water”); and Jiangsu Jianghai. Because Jiangsu
Jianghai was not one of the ten companies identified in
the petition, Commerce did not send it an initial Q&V
questionnaire; thus, its response was voluntary.
The questionnaire responses indicated that BWA was
one of the largest exporters of HEDP from China to the
U.S. during the period of investigation. However, Com-
merce did not select BWA as a mandatory respondent
because BWA refused to permit public disclosure of its
supplier, and was therefore ineligible to be individually
investigated. Commerce instead selected Wujin Water
and Kewei as the mandatory respondents. Kewei subse-
quently notified Commerce that it would no longer par-
ticipate in the investigation, leaving Wujin Water as the
only cooperating mandatory respondent. Wujin Water,
Wujin Fine Chemical, and Jiangsu Jianghai all responded
to Commerce’s supplemental questionnaires, and Jiangsu
Jianghai and Wujin Fine Chemical requested that Com-
merce assign them separate, company-specific rates.
Because it refused to supply the necessary information,
BWA was ineligible to apply for a separate, company-
specific rate.
On October 21, 2008, Commerce published a prelimi-
nary determination that HEDP from China was, or was
likely to be, sold in the United States at less than fair
value, and assigned antidumping rates to Chinese pro-
ducers of HEDP.1 Preliminary Determination 1. Cooper-
1 On May 16, 2008, the United States International
Trade Commission had published an affirmative prelimi-
nary determination that imports of Chinese HEDP were
likely to materially injure domestic industry.
5 CHANGZHOU WUJIN v. US
ating mandatory respondent Wujin Water received a
preliminary rate of 24.30%, based on the data it had
submitted to Commerce. Id. When Commerce deter-
mines that a respondent has not cooperated to the best of
its ability in supplying Commerce with requested infor-
mation, Commerce may subject that respondent to “ad-
verse facts available” (“AFA”) and employ an inference
adverse to the respondent’s interests when selecting
among the facts available to determine its rate. See 19
U.S.C. § 1677e(b). Applying AFA, Commerce assigned a
preliminary rate of 72.42% to non-cooperating mandatory
respondent Kewei. Kewei’s AFA rate reflected the
amount by which the petition’s alleged normal value
exceeded the petition’s alleged export price. As required
by section 1677e(c), Commerce corroborated Kewei’s AFA
rate using data submitted by Wujin Water.2 Because
1-Hydroxyethylidene-1, 1-Diphosphonic Acid (HEDP) from
China and India, 73 Fed. Reg. 28,507 (Int’l Trade
Comm’n May 16, 2008).
2 Commerce corroborated the AFA rate because it
was based on information from the petition, rather than
information obtained during the investigation. Specifi-
cally, section 1677e(c) requires that:
When the administering authority or the Com-
mission relies on secondary information rather
than on information obtained in the course of an
investigation or review, the administering author-
ity or the Commission, as the case may be, shall,
to the extent practicable, corroborate that infor-
mation from independent sources that are rea-
sonably at their disposal.
19 U.S.C. § 1677e(c). Commerce “ha[s] interpreted ‘cor-
roborate’ to mean that [Commerce] will, to the extent
practicable, examine the reliability and relevance of the
information submitted.” 1-Hydroxyethylidene-1, 1-
Diphosphonic Acid from the People’s Republic of China, 74
CHANGZHOU WUJIN v. US 6
Kewei had not demonstrated its independence from state
control, Commerce treated Kewei as part of a “China-wide
entity”; therefore, all Chinese exporters and producers
that did not qualify for separate rates were likewise
assigned the 72.42% rate.
Turning to Jiangsu Jianghai and Wujin Fine Chemi-
cal, Commerce determined that they had provided suffi-
cient evidence of their independence from state control
and qualified for a separate, company-specific rate. For
preliminary purposes, Commerce assigned them “a
weighted-average margin based on the experience of
mandatory respondents and excluding any de minimis or
zero rates or rates based on [AFA]”. 73 Fed. Reg. at
62,473; see also 19 U.S.C. § 1673d(c)(5)(A). Because the
AFA rate assigned to mandatory respondent Kewei was
excluded from this calculation, Jiangsu Jianghai and
Wujin Fine Chemical were assigned cooperating manda-
tory respondent Wujin Water’s preliminary rate of
24.30%. Id.
Wujin Water provided Commerce with its final data
submission in December of 2008. As a result, Commerce
reduced Wujin Water’s margin from 24.30% to de mini-
mis. 1-Hydroxyethylidene-1,1-Diphosphonic Acid from
the People’s Republic of China: Final Determination of
Sales at Less Than Fair Value, 74 Fed. Reg. 10,545 (Dep’t
of Commerce Mar. 11, 2009). Commerce continued to
apply the single antidumping rate of 72.42% to all other
Chinese exporters and producers, with the exception of
Wujin Fine Chemical and Jiangsu Jianghai, which con-
tinued to qualify for a separate rate.
Fed. Reg. 10,545, 10,547 (Dep’t of Commerce Mar. 11,
2009).
7 CHANGZHOU WUJIN v. US
Under the trade statute, the separate rate for sepa-
rate rate respondents like Wujin Fine Chemical and
Jiangsu Jianghai is normally “an amount equal to the
weighted average of the estimated weighted average
dumping margins established for exporters and producers
individually investigated, excluding any zero and de
minimis margins, and any margins determined entirely
[on the basis of AFA].” 19 U.S.C. § 1673d(c)(5)(A).
Commerce determined that it was no longer appropriate
to assign Wujin Water’s rate to the separate rate appli-
cants, because that rate had been reduced to de minimis.
Commerce looked to section 1673d(c)(5)(B), which pro-
vides that when the margins established for all individu-
ally investigated respondents are zero, de minimis, or
based entirely on AFA, Commerce “may use any reason-
able method to establish the estimated all-others rate for
exporters and producers not individually investigated,
including averaging the estimated weighted average
dumping margins determined for the exporters and
producers individually investigated.” Id. Commerce
explained that
because there are no rates other than de minimis
[i.e., Wujin Water’s] or those based on AFA [i.e.,
Kewei’s], we have determined to take a simple av-
erage of the AFA and the de minimis rate calcu-
lated for Wujin Water as a reasonable method for
purposes of determining the rate assigned to Wu-
jin Fine Chemical and Jiangsu Jianghai.
74 Fed. Reg. at 10,546. Consequently, Wujin Fine Chemi-
cal and Jiangsu Jianghai were assigned a rate of 36.21%,
representing a simple average of Kewei’s 72.42% rate and
Wujin Water’s de minimis rate. Id. at 10,547.
CHANGZHOU WUJIN v. US 8
On June 25, 2009, Jiangsu Jianghai and Wujin Fine
Chemical filed an action in the Court of International
Trade, in which they challenged Commerce’s corrobora-
tion of the AFA rate used to calculate their separate rate,
as well as the financial ratios and surrogate values used
to calculate the AFA rate. They argued, inter alia, that
using a flawed AFA rate in calculating a separate rate
“would, in essence, punish a fully cooperative respondent
and apply adverse inferences in the absence of any finding
of a lack of cooperation.” Mot. J. Agency R. at 16, Chang-
zhou Wujin Fine Chem. Factory Co. v. United States, No.
09-CV-0216 (Ct. Int’l Trade Sept. 21, 2009), ECF No. 25.
The court granted the government’s request for a partial
voluntary remand, and issued an order authorizing Com-
merce
to reconsider the separate rate amount after ex-
amining the following issues []: (i) whether Com-
merce corroborated the [AFA] rate upon which it
relied in calculating the separate rate and (ii)
whether Commerce used the proper financial ra-
tios and the proper surrogate value for Phospho-
rus Trichloride and steam in calculating the
[AFA] rate Commerce used as a basis for the
separate rate.
Changzhou Wujin Fine Chem. Factory Co. v. United
States, No. 09-CV-0216, 2010 Ct. Intl. Trade LEXIS 108,
at *1 (Feb. 8, 2010) (“Remand Order”). The court re-
tained jurisdiction pending the remand. Id. at *2.
On remand, Commerce abandoned the AFA rate
based on the petition, because it found that Wujin Water’s
9 CHANGZHOU WUJIN v. US
data could no longer corroborate that rate.3 See Final
Results of Redetermination Pursuant to Court Order at 5,
Changzhou Wujin Fine Chem. Factory Co. v. United
States, No. 09-CV-0216 (Ct. Int’l Trade May 3, 2010), ECF
No. 44 (“Final Remand Redetermination”). As a prelimi-
nary step in recalculating the separate rate, Commerce
calculated a new, hypothetical AFA rate of 30.94%, which
it based on Wujin Water’s verified normal value data and
unverified U.S. price data obtained from the non-
cooperating respondent BWA. Commerce did not assign
this hypothetical AFA rate to any party; rather, it was
used solely as the predicate for calculating the new sepa-
rate rate for Wujin Fine Chemical and Jiangsu Jianghai.
Commerce determined that because the hypothetical AFA
rate was based on information obtained during the course
of the investigation, corroboration was unnecessary.
Averaging the hypothetical AFA rate of 30.94% with
Wujin Water’s de minimis rate, Commerce obtained a
separate rate of 15.47%, which it assigned to Wujin Fine
Chemical and Jiangsu Jianghai.4
In their comments to Commerce on its draft remand
results, Wujin Fine Chemical and Jiangsu Jianghai
argued that Commerce should not base the hypothetical
AFA rate on BWA’s data. See Comments on Draft Re-
mand Determination by Wujin Fine Chemical & Jiangsu
Jianghai at 6-8, Changzhou Wujin Fine Chem. Factory Co.
v. United States, No. 09-CV-0216 (Ct. Int’l Trade Mar. 31,
3 While some of Wujin Water’s figures remained
relatively constant between the preliminary determina-
tion and the final determination, other figures changed,
apparently due to adjustments in Commerce’s methodol-
ogy.
4 Because Commerce no longer relied on the dis-
puted financial ratios and surrogate values, it did not
address the second part of the court’s remand order.
CHANGZHOU WUJIN v. US 10
2010), ECF No. 47-5. In the Final Remand Redetermina-
tion, Commerce stated that any other data—including the
mandatory respondents’ data, or an average of BWA’s
data with those of any other respondent—would produce
a hypothetical AFA rate of zero. According to Commerce,
this would be unacceptable, because
[a]n AFA rate of zero would not be sufficiently ad-
verse as to effectuate the purpose of the facts
available rule to induce respondents to provide
the Department with complete and accurate in-
formation in a timely manner and would not en-
sure that uncooperative parties do not obtain a
more favorable result by failing to cooperate than
if they had cooperated fully.
Final Remand Redetermination 16.
Following the Final Remand Redetermination, the
Court of International Trade considered the parties’
comments on the remand results. The appellant objected
that Commerce’s deterrence rationale was inappropriate
under the circumstances:
The ultimate objective in this case is to calculate a
margin for the Plaintiffs using a reasonable
method. The most appropriate, if not the only ap-
propriate method, is to use the Q&V [data] of the
[cooperating] plaintiffs . . . . The Department re-
jected the use of this data alleging that it would
result in an AFA rate which would be zero and
that a rate of zero would not act as a deterrent.
Plaintiffs note that the new ‘AFA’ rate would not
be used for any purpose other than assigning a
rate to [cooperating separate rate applicants]. . . .
[A]s discussed above, deterrence is not the only
11 CHANGZHOU WUJIN v. US
factor involved in calculating an AFA rate, and
deterrence is never a factor in calculating a non-
AFA rate.
Pls.’ Comments on Remand Determination 12-13, Chang-
zhou Wujin Fine Chem. Factory Co. v. United States, No.
09-CV-0216 (Ct. Int’l Trade June 4, 2010), ECF No. 48
(“Pls.’ Comments on Remand”).
The Court of International Trade affirmed Com-
merce’s remand results. Changzhou Wujin Fine Chem.
Factory Co. v. United States, No. 09-CV-0216, 2010 Ct.
Intl. Trade LEXIS 96, at *15 (Aug. 5, 2010). The court
rejected the appellant’s contention that Commerce ex-
ceeded the scope of the remand order by recalculating the
U.S. price, concluding that Commerce properly used other
sources of U.S. price data when it determined that it
could not corroborate its initial AFA rate on remand. The
court found that the separate rate recalculation was
supported by substantial evidence and was reasonable in
view of Commerce’s well-established methodologies. It
rejected the contention that BWA’s data failed to reflect
commercial reality as required by Gallant Ocean (Thail.)
Co. v. United States, 602 F.3d 1319, 1323 (Fed. Cir. 2010),
observing that because BWA had a large market share,
its data substantially reflected the HEDP market. The
court likewise considered and rejected the appellant’s
argument that Commerce “erroneously chose BWA’s data
solely to obtain a positive separate rate and, instead,
should have used data from another uncooperative re-
spondent.” Changzhou, 2010 Ct. Int’l. Trade LEXIS 96, at
*11.
After the Court of International Trade denied Jiangsu
Jianghai and Wujin Fine Chemical’s motions for reconsid-
eration, Changzhou Wujin Fine Chem. Factory Co. v.
CHANGZHOU WUJIN v. US 12
United States, No. 09-CV-0216, 2010 Ct. Intl. Trade
LEXIS 106, at *4 (Sept. 13, 2010), this appeal followed.5
We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).
DISCUSSION
This appeal presents the following issues: (1) whether
the Court of International Trade has jurisdiction to re-
view Commerce’s post-remand modification of U.S. price;
and (2) whether Commerce acted arbitrarily when recal-
culating the separate rate assigned to appellant Jiangsu
Jianghai, a cooperative respondent.
This court reviews decisions of the Court of Interna-
tional Trade concerning Commerce's antidumping deter-
minations by applying the same standard of review used
by the trade court. Gallant Ocean, 602 F.3d at 1323
(citing Tung Mung Dev. Co. v. United States, 354 F.3d
1371, 1378 (Fed. Cir. 2004)). In essence, Commerce’s
determination will be sustained unless it is “unsupported
by substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i); see F.
Lli de Cecco Di Filippo Fara S. Martino S.p.A. v. United
States, 216 F.3d 1027, 1031 (Fed. Cir. 2000). Commerce’s
decision will be set aside if it is arbitrary and capricious.
See, e.g., SKF USA, Inc. v. United States, 254 F.3d 1022,
1028 (Fed. Cir. 2001) (“We review Commerce’s decision
under the Administrative Procedure Act and any other
applicable law.”).
5 Wujin Fine Chemical is not a party to this appeal.
13 CHANGZHOU WUJIN v. US
I
We must first decide whether Commerce’s recalcula-
tion of U.S. price was within the scope of the Court of
International Trade’s remand order.
We generally disfavor limited remands that restrict
Commerce’s ability to collect and fully analyze data on a
contested issue. See Am. Silicon Techs. v. United States,
334 F.3d 1033, 1038-39 (Fed. Cir. 2003) (“By sharply
limiting Commerce’s inquiry, the trial court’s remand
actually prevented Commerce from undertaking a fully
balanced examination that might have produced more
accurate results.”). So too, an appellant “faces a very high
hurdle when it tries to convince us that, despite the
remanding Court’s satisfaction, we must conclude that
the ITC on remand acted outside the scope of the remand
directions.” Trent Tube Div., Crucible Materials Corp. v.
Avesta Sandvik Tube AB, 975 F.2d 807, 814 (Fed. Cir.
1992).
The appellant argues that the voluntary remand or-
der was limited in scope, only permitting Commerce to
reconsider the normal value and the impact the surrogate
values and financial ratios had on the AFA rate. Accord-
ing to the appellant, the remand order placed only two
issues before Commerce: “whether Commerce corrobo-
rated the adverse facts available rate upon which it relied
in calculating the separate rate,” and whether Commerce
used the proper financial ratios and surrogate values.
Remand Order 1-2. The appellant argues that “[t]he first
of these issues is clearly inapplicable to the U.S. price as
it merely goes to the test of the selected final rate,” Appel-
lant’s Br. 17, while the second issue relates to calculation
of the normal value, not U.S. price. Because the remand
order required only corroboration of the normal value and
CHANGZHOU WUJIN v. US 14
no party challenged the U.S. price, the appellant con-
cludes, Commerce had no authority to recalculate U.S.
price.
We agree with Commerce that recalculating the U.S.
price was within the scope of the voluntary Remand
Order. Nothing in the remand order limited Commerce to
recalculating the normal value when “examining . . .
whether [it] corroborated the adverse facts available rate
upon which it relied in calculating the separate rate.” See
Remand Order 1-2. Commerce specifically requested the
partial voluntary remand “to examine the issues related
to the adverse facts available rate, to make any necessary
recalculations based on its examination, and to obtain
comments from the parties.” Def’s. Resp. to Mot. for J. on
the Admin. R. at 2, 23, Changzhou Wujin Fine Chem.
Factory Co. v. United States, No. 09-CV-0216 (Ct. Int’l
Trade Jan. 26, 2010), ECF No. 36.
Commerce’s reexamination of the AFA rate used in
calculating the appellant’s separate rate necessarily
involved reconsideration of the underlying variables, i.e.,
normal value and U.S. price. See 19 U.S.C. § 1673e(a)(1).
Once Commerce determined that it could not corroborate
Kewei’s AFA rate as required by statute, see 19 U.S.C.
§ 1677e(c), Commerce reasonably chose to abandon the
secondary information it originally used for normal value
and U.S. price. We reject the appellant’s argument that
the remand order’s second instruction to Commerce,
regarding the proper financial ratios and surrogate val-
ues, limited Commerce to reconsideration of the normal
value only. We conclude that Commerce acted within the
remand order’s broad scope when it decided to select a
new U.S. price for purposes of calculating the appellant’s
new separate rate.
15 CHANGZHOU WUJIN v. US
II
The second question is whether Commerce acted arbi-
trarily in recalculating the appellant’s separate rate,
when Commerce constructed a hypothetical AFA rate
based on U.S. price data obtained from a non-cooperating
respondent, averaged that hypothetical AFA rate with the
de minimis rate for Wujin Water, and then assigned the
resulting separate rate to the appellant. The hypothetical
AFA rate Commerce generated on remand was an “AFA
rate” in name only: its sole purpose was to serve as a
value in the recalculation of the separate rate. The
hypothetical AFA rate was not assigned to any individu-
ally investigated entity, and only affected cooperating
respondents.6
The applicable statute contemplates that the separate
rate will generally be calculated by taking a weighted
average of dumping margins assigned to individually
investigated entities, excluding those margins that are
zero, de minimis, or determined entirely on the basis of
AFA. 19 U.S.C. § 1673d(c)(5)(A). Where, as here, the
dumping margins for all individually investigated entities
are zero, de minimis, or determined entirely on the basis
of AFA, Commerce “may use any reasonable method to
6 Commerce’s Final Remand Redetermination
stated that “BWA’s data was used to calculate an AFA
rate that may be applicable to parties, such as BWA itself,
that have failed to cooperate.” Final Remand Redetermi-
nation 17. But at oral argument, counsel for Commerce
agreed with the court’s statement that “this AFA rate is
only being used to calculate the separate rate for the
appellant [Jiangsu Jianghai] and for no other purpose,”
and confirmed that the new rate would not be applied to
non-cooperating respondents. Oral Argument at 20:21-
20:47, available at http://www.cafc.uscourts.gov/oral-
argument-recordings/all/changzhou.html.
CHANGZHOU WUJIN v. US 16
establish the estimated all-others rate for exporters and
producers not individually investigated, including averag-
ing the estimated weighted average dumping margins
determined for the exporters and producers individually
investigated.” 19 U.S.C. § 1673d(c)(5)(B) (emphases
added). We have recognized that in some circumstances,
antidumping investigations require calculations that are
“by necessity imperfect,” and we consider the circum-
stances when reviewing Commerce’s application of the
statute. Thai I-Mei Frozen Foods Co. v. United States,
616 F.3d 1300, 1309 (Fed. Cir. 2010).
The appellant has not argued that the simple average
methodology suggested by the statute is unreasonable in
all circumstances, nor even that it is necessarily unrea-
sonable when applied to cooperating parties.7 Rather, the
appellant argued to Commerce and before the Court of
International Trade that Commerce’s stated reasons for
its approach were arbitrary, because deterrence is not a
sufficient justification when calculating a rate that solely
affects cooperating respondents.8 The parties continued
7 In KYD, this court held that an AFA rate calcu-
lated for a non-cooperating exporter could be applied to a
cooperating importer of that exporter’s goods. KYD, Inc.,
v. United States, 607 F.3d 760, 768 (Fed. Cir. 2010). KYD
did not address the application of an AFA rate to cooper-
ating importers of other exporters’ goods, nor the use of
an AFA rate in deriving the separate rate for cooperating
parties.
8 Commerce claims the appellant waived this ar-
gument by “agree[ing] with the Department and the
petitioner that the Separate Rate should be calculated by
simple averaging of the rate for Wujin Water with the
revised AFA rate.” Resp. of Wujin Fine Chemical &
Jiangsu Jianghai to Pet’r’s Comments at 2, Changzhou
Wujin Fine Chem. Factory Co. v. United States, No. 09-
CV-0216 (Ct. Int’l Trade Apr. 5, 2010), ECF No. 47-7. But
this overlooks the ongoing dispute between the parties as
17 CHANGZHOU WUJIN v. US
to dispute this point in their briefs on appeal. The appel-
lant contended that
[t]he most appropriate, if not the only appropriate
method [of calculating the appellant’s separate
rate], is to use the Q&V [data] of the appellant,
and another cooperative party which actively par-
ticipated in the investigation and provided multi-
ple responses to Department questionnaires. . . .
The Department rejected the use of this data al-
leging that it would result in an AFA rate which
would be zero and that a rate of zero would not act
as a deterrent. Appellant notes that the new
“AFA” rate would not be used for any purpose
other than assigning a rate to Appellant, a coop-
to how the “revised AFA rate” in question should be
calculated. The appellant argues that basing that rate
solely on BWA’s data is “arbitrary and capricious” be-
cause, inter alia, the deterrence rationale advanced by
Commerce on remand is inapplicable to a rate calculation
that can only affect cooperating respondents. See Appel-
lant’s Br. 34-35; Pls.’ Comments on Remand 12-13.
We “must [] consider whether Commerce’s application
of the facts available was reasonable and supported by
substantial evidence.” Ningbo Dafa Chem. Fiber Co. v.
United States, 580 F.3d 1247, 1258 (Fed. Cir. 2009).
Here, the appellant’s challenge to the hypothetical AFA
rate has two aspects: first, that Commerce’s deterrence-
oriented calculation was not a reasonable method of
obtaining a separate rate, and was therefore arbitrary;
and second, that substantial evidence does not support
the use of the AFA rate in any event. Both aspects of the
appellant’s challenge to the use of the AFA rate in this
case are consistent with its general concession that simple
averaging is not impermissible, so long as the methodol-
ogy does not produce an unlawful result. Because the
appellant is correct that Commerce’s use of the AFA rate
in this case is not reasonable, we need not decide the
merits of the other aspect of its challenge.
CHANGZHOU WUJIN v. US 18
erative [separate rate applicant] respondent. . . .
[D]eterrence is not the only factor involved in cal-
culating an AFA rate, and deterrence is never a
factor in calculating a non-AFA rate.
Appellant’s Br. 34–35. Commerce responded that “a zero
percent adverse facts available rate would not be suffi-
ciently adverse to effectuate the purpose of the adverse
facts available rule,” Appellee’s Br. 32, and therefore
when Commerce determines an [AFA] rate, it se-
lects a rate that is sufficiently adverse and selects
the highest rate in the record of the proceeding to
ensure the party does not obtain a more favorable
result by failing to cooperate than if it had cooper-
ated fully. Selecting Kewei’s data, which would
have yielded a zero percent facts available rate,
would not satisfy this standard.
Id. at 36 (citation omitted). In its reply brief, the appel-
lant continued to argue that “[t]he United States[’] entire
basis for the selection of a new U.S. price in this matter is
that of ‘deterrence.’ This results oriented method is not a
sufficient basis for the selection of an AFA rate,” Reply
Br. 9, to be used solely “as a substitute in the calculation”
of a separate rate for cooperating respondents. Id. at 9
n.1.
The question is whether Commerce’s method was ar-
bitrary and capricious. The dissent urges that the arbi-
trary and capricious standard is inapplicable, and that we
should instead apply a substantial evidence standard.
What the dissent fails to appreciate, however, is that a
reviewing court must apply both standards, and that “an
agency’s finding may be supported by substantial evi-
dence,” yet “nonetheless reflect arbitrary and capricious
19 CHANGZHOU WUJIN v. US
action.” Bowman Transp., Inc. v. Arkansas-Best Freight
Sys., Inc., 419 U.S. 281, 284 (1974). The dissent correctly
points out that the substantial evidence standard applies
to review of factual determinations. But here we are
evaluating the agency’s reasoning, which is reviewed
under the arbitrary and capricious (or contrary to law)
standard. See Motor Vehicle Mfrs. Ass’n v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 48–49 (1983). Therefore,
we first ask whether Commerce articulated an adequate
reason for calculating the appellant’s separate rate in the
manner chosen on remand.
“The grounds upon which an administrative order
must be judged are those upon which the record discloses
that its action was based.” SEC v. Chenery Corp, 318 U.S.
80, 87 (1943). Tellingly, Commerce has not contended
that BWA’s data are more reliable or accurate than data
from the other respondents.9 Rather, the Final Remand
Redetermination explained that Commerce used BWA’s
data to obtain an adverse margin. Commerce determined
that any other respondent’s U.S. price data (or any com-
9 The appellant argues that using BWA’s unverified
U.S. price information resulted in a rate fifteen times
higher than the highest rate calculated for a mandatory
respondent. While conceding that other respondents’ data
would have resulted in a lower rate, Commerce insists
there is no way to prove the other respondents’ data are
more reliable, because their data were not verified either.
That is hardly appellant’s fault: it was Commerce, not the
appellant, who decided which data would be verified.
Furthermore, Commerce refused to use data from Kewei,
the other non-cooperating respondent, even though Kewei
was a high-volume exporter similarly situated to BWA,
cooperated longer than BWA, and—unlike BWA—was a
mandatory respondent. The only reason given by the
Final Remand Redetermination for using BWA’s data, but
not also Kewei’s, was that including Kewei’s yielded an
insufficiently adverse rate.
CHANGZHOU WUJIN v. US 20
bination of BWA’s data with another respondent’s data)
would have produced a de minimis hypothetical AFA rate,
a result Commerce found unacceptable:
[a]n AFA rate of zero [or de minimis] would not be
sufficiently adverse as to effectuate the purpose of
the facts available rule to induce respondents to
provide the Department with complete and accu-
rate information in a timely manner and would
not ensure that uncooperative parties do not ob-
tain a more favorable result by failing to cooperate
than if they had had cooperated fully.
Final Remand Redetermination 16 (emphasis added). In
other words, Commerce chose to use BWA’s data in the
course of recalculating the appellant’s separate rate
because those data gave the most adverse margin possi-
ble, and an adverse margin is necessary to deter non-
cooperating respondents. See also de Cecco, 216 F.3d at
1032.
Deterrence is not relevant here, where the “AFA rate”
only impacts cooperating respondents. We find no sup-
port in our caselaw or the statute’s plain text for the
proposition that deterrence, rather than fairness or
accuracy, is the “overriding purpose” of the antidumping
statue when calculating a rate for a cooperating party.
See, e.g., Parkdale Int’l v. United States, 475 F.3d 1375,
1380 (Fed. Cir. 2007) (“[A]n overriding purpose of Com-
merce’s administration of antidumping laws is to calcu-
late dumping margins as accurately as possible. . .”)
(citing Rhone Poulenc, Inc. v. United States, 899 F.2d
1185, 1191 (Fed. Cir. 1990)). Quite the contrary: applying
an adverse rate to cooperating respondents undercuts the
cooperation-promoting goal of the AFA statute. Com-
merce misses the point when it argues that the appellant
21 CHANGZHOU WUJIN v. US
cannot complain because it does not bear an AFA rate
directly, but only a separate rate derived from the AFA
rate, which is only half as adverse. Although the hypo-
thetical AFA rate was not directly applied to a cooperat-
ing respondent, cooperating respondents were the only
entities impacted by the recalculated rate.
Contrary to Commerce’s argument, the AFA statute
does not compel this result. Commerce maintains that
despite its broad discretion in making antidumping
determinations, its hands are tied by section
1673d(c)(5)(B), which requires that the appellant’s sepa-
rate rate be based on a traditional AFA rate. But the
statute does not say that. Section 1673d(c)(5)(B) states
that Commerce is to select “any reasonable method to
establish the estimated all-others rate for exporters and
producers not individually investigated, including averag-
ing the estimated weighted average dumping margins
determined for the exporters and producers individually
investigated.” 19 U.S.C. § 1673d(c)(5)(B) (emphases
added). The statute’s use of the word “including” contem-
plates the possibility of other valid approaches, and the
requirement that the method be “reasonable” imposes a
duty on Commerce to select a method appropriate for the
circumstances. Furthermore, AFA rates are disfavored by
the statute: section 1673d(c)(5)(B) is an exception to the
preferred method in section 1673d(c)(5)(A), which in-
structs that AFA rates, like de minimis and zero rates,
should be excluded. Indeed, the only AFA rates contem-
plated under section 1673d(c)(5)(B)’s simple average
methodology are those determined for “individually
investigated” parties. Such rates are generally based on
verified data, see 19 U.S.C. § 1677m(i)(1), and bear a
reasonable relationship to the party’s actual business
practices. See Gallant Ocean, 602 F.3d at 1323 (even
“[a]n AFA rate must be a reasonably accurate estimate of
CHANGZHOU WUJIN v. US 22
the respondent’s actual rate, albeit with some built-in
increase intended as a deterrent” (internal quotation
marks omitted)). Substitution of a hypothetical “AFA
rate” inapplicable to any individually investigated party is
neither suggested nor compelled by the statute, particu-
larly where the sole impact of that substitution will be on
cooperating parties.
Finally, while administrative convenience might sup-
port averaging previously-determined, previously-
corroborated rates assigned to mandatory respondents,
including AFA respondents if there are no alternatives,
see 19 U.S.C. § 1673d(c)(5)(B), such a justification can
hardly support Commerce’s choice to calculate a hypo-
thetical “AFA rate” for use solely as a “substitute” rate
that will not be assigned to any mandatory respondent.
In summary, the issue before the court is not whether
Commerce properly considers the policy goals of the
antidumping statute in conducting its investigations (it
does), nor whether Commerce may draw adverse infer-
ences when assigning AFA rates to non-cooperating
respondents (it may). Rather, we address the narrower
question of whether Commerce acted reasonably when—
by its own account—it cherry-picked the single data point
that would have the most adverse effect possible on
cooperating voluntary respondents, in a situation where
there was no need or justification for deterrence.
“[R]eview of an administrative decision must be made on
the grounds relied on by the agency. ‘If those grounds are
inadequate or improper, the court is powerless to affirm
the administrative action by substituting what it consid-
ers to be a more adequate or proper basis.’” In re Lee, 277
F.3d 1338, 1345-46 (Fed. Cir. 2002) (quoting Chenery, 332
U.S. at 196). In this case, we think it clear that Com-
merce acted in an arbitrary and capricious manner.
23 CHANGZHOU WUJIN v. US
For the foregoing reasons, we affirm the decision of
the Court of International Trade in part, reverse in part,
and remand to Commerce to once again reconsider its
approach to calculating the appellant’s separate rate. In
doing so, Commerce must act non-arbitrarily and must
explain why its approach is a “reasonable method” of
calculating a separate rate, in light of the alternatives
available, and with recognition of the fact that the re-
mand calculation will affect only cooperating respondents.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND
REMANDED
COSTS
Each party shall bear its own costs.
United States Court of Appeals
for the Federal Circuit
__________________________
CHANGZHOU WUJIN FINE CHEMICAL FACTORY
CO., LTD.,
Plaintiff,
AND
JIANGSU JIANGHAI CHEMICAL GROUP, LTD.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee,
AND
COMPASS CHEMICAL INTERNATIONAL, LLC,
Defendant-Appellee.
__________________________
2011-1080
__________________________
Appeal from the United States Court of International
Trade in case no. 09-CV-0216, Judge Judith M. Barzilay.
__________________________
REYNA, Circuit Judge, dissenting.
The majority’s conclusion that the Department of
Commerce (“Commerce”) acted arbitrarily when it as-
signed appellant Jiangsu Jianghai Chemical Group, Ltd.
CHANGZHOU WUJIN v. US 2
a company-specific Adverse Facts Available (“AFA”) rate
is based on three fundamental errors.
First, the majority goes to great length to address an
AFA issue that was neither appealed nor otherwise
properly before this court. Appellant had conceded that
specific issue in the underlying proceedings before Com-
merce and the Court of International Trade.
Second, the majority manifests a fundamental misun-
derstanding of the AFA statute and how AFA applies in
the context of antidumping duty investigations. The
majority writes to cure what it perceives to be an injustice
created by Commerce applying AFA to a voluntary, coop-
erating respondent. But the AFA statute operates both to
encourage cooperation in antidumping investigations, and
to prevent absurd or unjust results when parties, cooper-
ating or not, have submitted incomplete or unusable data,
such as awarding a de minimis or zero dumping rate to an
undeserving respondent.
Third, the majority applies the wrong standard of re-
view. The majority applies an arbitrary and capricious
standard to Commerce’s fact finding determinations. Our
case law and that of the Court of International Trade
makes clear that a substantial evidence standard of
review applies with respect to factually based determina-
tions. Consistent with the statute, this court gives defer-
ence to the expertise of the administrating authority,
particularly with respect to the application of AFA and its
choice of methodology.
3 CHANGZHOU WUJIN v. US
In sum, the majority has created its own issue, which
it hoists with non-existing terminology,1 it seeks to correct
a wrong and sets the foundation for absurd results in the
future, and it conducts its analysis under the wrong
standard of review. I dissent.
I. The Issue on Appeal
The majority asserts that only two issues were on ap-
peal and that the second issue was framed as follows:
“[W]hether Commerce acted arbitrarily in recalcu-
lating the appellant’s separate rate, when Com-
merce constructed a hypothetical AFA rate based
on U.S. price data obtained from a non-
cooperating respondent, averaged that hypotheti-
cal AFA rate with the de minimis rate for Wujin
Water, and then assigned the resulting separate
rate to the appellant.
Majority op. at 15. This statement of the AFA issue on
appeal is symptomatic of the majority opinion: It repre-
sents the point of mistaken embarkation from which the
opinion sails into areas well beyond the scope of this
appeal. It introduces a new term to antidumping law,
“hypothetical AFA rate,” with the apparent purpose of
injecting anomaly into what is essentially a typical AFA
case.
The appellant, in fact, raises four issues on this ap-
peal. In its brief at the Statement of Issues section,
appellant details only four issues: two issues pertain to
whether Commerce exceeded the scope of the remand
1 The majority gives great attention to the term
“hypothetical AFA rate.” But there is no such term in
antidumping law, and its meaning remains unclear.
CHANGZHOU WUJIN v. US 4
order, and a third issue pertains to Commerce’s decision
to recalculate U.S. price on remand. The fourth issue
appellant raises is the only issue that pertains to the AFA
rate assigned to appellant. A simple review of this issue
reveals that it is markedly different from the issue the
majority framed. Compare the following issue with the
issue as restated by the majority.
4. Whether the U.S. Court of International Trade
committed error when it ratified the Depart-
ment’s arbitrary selection of certain data to
form the basis for a recalculated U.S. price in
the remand determination.
Appellant’s Br. at 3 (emphasis added).
A comparison of the majority’s and the appellant’s is-
sues reveals that the majority devotes its attention to
whether Commerce acted arbitrarily in the methodology
used to arrive at, or calculate, the AFA rate. Appellant,
however, does not challenge the methodology, but rather
the data selected by Commerce to recalculate the new
U.S. price. In fact, appellant conceded before Commerce
and the Court of International Trade that it did not
challenge the AFA methodology.
The substantive difference between data used in anti-
dumping calculations and the methodology Commerce
adopts to perform antidumping calculations is profound.
The majority opinion demonstrates a failure to distin-
guish between data and methodology in the context of
antidumping duty investigations and instead addresses
methodology when the appeal is about the data.
Indeed, litigants in dumping cases understand well
the distinction between data and methodology as the two
5 CHANGZHOU WUJIN v. US
areas are often the points of greatest contention. This
case is a good example of how litigants will base a strat-
egy on data and not methodology, or vice versa. As the
appellant notes in its brief, it stood to receive a zero
dumping margin had Commerce made the adjustments it
sought to normal value (and which it sought on remand)
while retaining the same methodology used in the inves-
tigation to arrive at the appellant’s separate rate. What
appellant failed to forecast was that Commerce on re-
mand would recalculate U.S. price and use U.S. sales data
taken from BWA’s questionnaire responses. As a result,
on remand its margins were only cut in half, as opposed to
driven to zero. This is why on this appeal the appellant
challenges (1) Commerce’s authority to recalculate a new
U.S. price (that it exceeded the scope of the remand
order), and (2) that Commerce acted arbitrarily in its use
of the BWA data (because it should have used data from
the petition or its own data). If it wins on either issue, it
stands to obtain a zero margin.2
2 Curiously, because of the majority opinion, the
appellant may have won the battle, but lost the war. The
majority offers no clear guidance as to how Commerce is
to proceed. It appears to instruct Commerce that it can
no longer apply any AFA methodology when calculating a
separate rate for a cooperating respondent whose submit-
ted data was deficient. If the majority opinion instructs
that on remand U.S. price must be recalculated using
U.S. sales data or data from sources other than BWA, it is
worth noting that both the petitioner’s and the appellant’s
data have previously been ruled as inappropriate due to,
among other things, non-corroboration and incomplete-
ness. I believe that since we conduct our reviews de novo
and on the basis of the entire record, it behooved the
majority to inform Commerce how to proceed on remand.
In any event, appellant now stands to achieve a higher
margin than it obtained in either the investigation or the
remand.
CHANGZHOU WUJIN v. US 6
II. The Standard of Review
In addition to addressing the wrong issue as a result
of failing to distinguish between data and methodology,
the majority goes on to apply the wrong standard of
review. As noted below, the correct standard of review for
Commerce’s factual determinations is substantial evi-
dence.3 See 19 U.S.C. § 1516a(b)(1)(B)(i). Here, the
majority denies the administrating authority the defer-
ence owed to it under law and case precedent and instead
disturbs well supported findings of fact with its own view
on how the case should have resulted.4
3 The majority’s “contention that the imposition of
adverse facts available was an ‘abuse of discretion’ is a
misstatement of the proper standard of review. . . . [This
court reviews such decisions] under the substantial
evidence standard . . . as opposed to the ‘arbitrary, capri-
cious, abuse of discretion’ standard.” Ta Chen Stainless
Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed.
Cir. 2002); see also Nippon Steel Corp. v. United States,
337 F.3d 1373, 1379 (Fed. Cir. 2003) (“We will uphold
Commerce's determination unless it is ‘unsupported by
substantial evidence on the record, or otherwise not in
accordance with law.’”). Substantial evidence review is
particularly appropriate in cases like this one where
Commerce must fashion its own rules of procedure and
pursue methods of inquiry capable of permitting it to
discharge its multitudinous duties. PSC VSMPO-Avisma
Corp. v. United States, 688 F.3d 751, 760 (Fed. Cir. 2012)
4 The majority justifies its departure from the sub-
stantial evidence standard of review on the grounds that
it “must” also determine whether the agency’s factual
finding is arbitrary and capricious. This is incorrect with
respect to Commerce’s antidumping determinations. We
have repeatedly upheld determinations that are sup-
ported by substantial evidence where anything more than
a “mere scintillia” exists to support Commerce’s determi-
nation and, in doing so, have resisted the urge to insert
our judgment for that of Commerce. See, e.g., PAM, S.p.A.
7 CHANGZHOU WUJIN v. US
III. The Purpose of AFA
The errors advanced by majority opinion portend
grave consequences in the application of the U.S. anti-
dumping statutes. In particular, the majority opinion
creates a new AFA standard for cooperating respondents
whose data is incomplete or inaccurate. This is because
the majority sees only one side of the AFA deterrence
coin, that AFA rates are intended to compel participation
in dumping cases. It fails to see the flip side of the coin;
AFA rates also ensure that a cooperating respondent
whose data for whatever reason is insufficient is not
undeservedly awarded a de minimis or zero dumping rate.
See Nippon Steel Corp. v. United States, 337 F.3d 1373,
1381 (Fed. Cir. 2003) (“Commerce may impose an adverse
inference after determining that a respondent has not
been fully cooperative or has failed to act to the best of its
ability in gathering information.” (emphasis added)). At
bottom, the majority addresses an issue not in contro-
versy to inject its view of fairness into dumping proceed-
ings by replacing the judgment of the administrating
agency with its own.
IV. The AFA Data and Methodology
I agree with Commerce that recalculating U.S. price
was within the scope of the voluntary remand order.
Nothing in the remand order limited Commerce only to
recalculating the normal value when “examining . . .
whether [it] corroborated the adverse facts available rate
upon which it relied in calculating the separate rate.” See
Changzhou Wujin Fine Chem. Factory Co. v. United
v. United States, 582 F.3d 1336 (Fed. Cir. 2009); Ningbo
Dafa Chem. Fiber Co. v. United States, 580 F.3d 1247(Fed. Cir. 2009); Huvis Corp. v. United States, 570 F.3d
1347 (Fed. Cir. 2009); Ta Chen, 298 F.3d 1330.
CHANGZHOU WUJIN v. US 8
States, No. 09-00216, 2010 Ct. Intl. Trade LEXIS 108, at
*1-2 (Ct. Int'l Trade Feb. 8, 2010). After requesting a
remand in the terms adopted verbatim by the Court of
International Trade, Commerce further requested that “if
the Court grants [Commerce’s] request for a partial
remand, the Court allow Commerce . . . to examine the
issues related to the adverse facts available rate, to make
any necessary recalculations based on its examination,
and to obtain comments from the parties.” Joint App’x at
1480, 1501. Appellant apparently did not challenge this
request.
Once Commerce determined that it could not corrobo-
rate the AFA rate, it had to calculate a new AFA rate for
purposes of calculating appellant’s separate rate. Be-
cause AFA rates are based on the difference between the
normal value and U.S. price, Commerce’s establishment
of the AFA rate necessarily involved considering the
continued viability of both normal value and U.S. price.
See 19 U.S.C. § 1673e(a)(1). Commerce could no longer
rely on uncorroborated secondary information for normal
value and U.S. price. See 19 U.S.C. § 1677e(c). Thus,
Commerce’s decision to establish a new U.S. price suscep-
tible to corroboration was reasonable, well within its
authority, and not contrary to law. Id. That no party
challenged the U.S price prior to the remand is immate-
rial. Commerce acted within the remand’s scope when it
recalculated U.S. price to arrive at a new AFA rate and a
new separate rate for appellant.
Nor did Commerce err in its recalculation of appel-
lant’s separate rate. Generally, the separate rate is the
weighted average of dumping margins established for
entities individually investigated, excluding zero and de
minimis margins, and margins determined entirely on the
basis of AFA. 19 U.S.C. § 1673d(c)(5)(A). As in this case,
9 CHANGZHOU WUJIN v. US
where dumping margins for all entities individually
investigated are zero or de minimis or determined en-
tirely on the basis of AFA, Commerce may use any rea-
sonable method for establishing the separate rate for
entities not individually investigated, including averaging
the dumping margins of entities individually investigated.
§ 1673d(c)(5)(B).
Throughout the investigation and on remand, Com-
merce has consistently applied a methodology for calculat-
ing separate AFA rates whereby it averaged the dumping
margins assigned to the entities that were individually
investigated. Appellant has not challenged Commerce’s
decision to use this methodology before the Court of
International Trade, nor has it done so on this appeal.
U.S. Appellee Br. at 33; Compass Appellee Br. at 9 n.2.
The records shows that appellant has specifically en-
dorsed this methodology, Joint App’x at 1571; 1582-83,
and directs its challenge solely to Commerce’s decision to
use BWA’s U.S. price in the AFA calculation.5 Stated
differently, appellant challenges the data used, not the
methodology employed.
Appellant offers a host of reasons why it believes that
Commerce’s decision to use the U.S. price of BWA, a
single uncooperative respondent, in its AFA rate calcula-
tion was contrary to law. It argues that BWA’s U.S. price
is an “extreme outlier” and does not reflect a “commercial
5 BWA was an uncooperative respondent, but it had
submitted a Q&V questionnaire response early in the
investigation. Based on its response, Commerce was able
to determine the average unit value (value divided by
quantity), which approximated the U.S. price of its mer-
chandise during the period of investigation.
CHANGZHOU WUJIN v. US 10
reality.”6 Appellant relies on Gallant Ocean (Thail.) Co.
v. United States, 602 F.3d 1319 (Fed. Cir. 2010), where
this court held that an AFA rate more than five times
higher than the highest rate applied to a cooperating
respondent was not supported by substantial evidence.
602 F.3d at 1324. Because nothing in the record in that
case tied the AFA rate—derived from an adjusted petition
rate—to Gallant, we concluded that the AFA rate was
unrelated to commercial reality and not a reasonable
accurate estimate of Gallant’s actual dumping, hence, not
supported by substantial evidence. Id. Notably, we
observed that “[t]he fact that Commerce ultimately im-
posed dumping margins between 5.91% and 6.82% for the
same products after its initial investigation shows the
possession of better information and shows that the
adjusted petition rate was aberrational.” Id. at 1323-24.
We counseled Commerce that it should have relied on
representative dumping rates of similarly-sized and
similarly-situated exporters, which could have provided a
reasonable basis from which to calculate an appropriate
AFA rate. Id. at 1324.
Appellant’s reliance on Gallant Ocean is misplaced.
First, although the AFA rate determined by Commerce in
this case is arguably a multiple of the highest calculated
rate, Appellant Br. at 37, the AFA rate was not applied to
appellant directly, but rather was used to calculate a
separate rate. It would be unreasonable to require such a
rate to reflect a commercial reality of appellant. Compare
Gallant Ocean, 602 F.3d at 1323-24 (reversing a 57.64%
6 The majority asserts that BWA’s data was not the
best data on record. It does not, however, respond to the
appellant’s arguments that BWA’s data should not have
been used because it was “outlier” data. Whether BWA’s
data was adequate is a question of fact that we review for
substantial evidence.
11 CHANGZHOU WUJIN v. US
AFA rate applied to Gallant because it had no grounding
in Gallant’s commercial reality), with PAM, S.p.A. v.
United States, 582 F.3d 1336, 1336, 1340 (Fed. Cir. 2009)
(affirming a 45.49% AFA rate applied to PAM although
only 0.5% of its U.S. sales were at that margin), and Ta
Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d
1330, 1339 (Fed. Cir. 2002) (affirming a 30.95% AFA rate
applied to Ta Chen although only 0.04% of its sales dur-
ing the period of review were at that margin).
Second, this court in Gallant Ocean held that “Com-
merce failed to corroborate the adjusted petition rate with
‘independent sources that are reasonably at [its] dis-
posal.’” 602 F.3d at 1324 (alteration in original) (citing 19
U.S.C. § 1677e(c)). By contrast, Commerce in this case
abandoned the petition rate on remand when it deter-
mined that it could no longer corroborate it. Since Com-
merce relied on “information obtained in the course of an
investigation” on remand, it was not obligated to corrobo-
rate either BWA or Wujin Water’s data. See § 1677e(c).
We have previously recognized that as long as the data is
corroborated, or as here, does not require corroboration,
“Commerce acts within its discretion when choosing
which sources and facts it will rely on to support an
adverse inference.” PAM, 582 F.3d at 1340 (quoting Ta
Chen, 298 F.3d at 1339); see also F.Lli de Cecco Di Filippo
Fara S. Martino S.p.A. v. United States, 216 F.3d 1027,
1032 (Fed. Cir. 2000) (“Commerce’s special expertise
makes it the ‘master’ of the anti-dumping law, entitling
its decisions to great deference from the courts.”).
Finally, whereas Commerce “possess[ed] . . . better in-
formation” and “had abundant resources from which to
calculate a reasonable AFA rate” in Gallant Ocean, 602
F.3d at 1323-24, any other combination of U.S. price data
in this case, other than BWA’s alone, would have resulted
CHANGZHOU WUJIN v. US 12
in a zero or de minimis dumping margin. Commerce
wields the AFA rate to deter noncompliance with its
investigations. de Cecco, 216 F.3d at 1032. This objective
would be undermined if we compelled it to use de minimis
AFA rates. As Commerce observed,
[a]n AFA rate of zero [or de minimis] would not be
sufficiently adverse as to effectuate the purpose of
the facts available rule to induce respondents to
provide the Department with complete and accu-
rate information in a timely manner and would
not ensure that uncooperative parties do not ob-
tain a more favorable result by failing to cooperate
than if they had had cooperated fully.
Changzhou Wujin Fine Chemical Factory Co. v. United
States, No. 09-00216, ECF No. 44, at 16 (Apr. 30, 2010)
(Final Results of Redetermination Pursuant to Court
Order).
The circumstances of this case are distinct in that
Commerce redetermined the AFA rate on remand solely
for the purposes of determining appellant’s separate rate;
the other non-cooperative respondents did not challenge,
and thus were assigned, the AFA petition rate of 72.42%.
Yet it remained within Commerce’s discretion to choose
which sources and facts to rely on to support an adverse
inference. See de Cecco, 216 F.3d at 1032. Appellant’s
failure to challenge as unreasonable Commerce’s separate
rate calculation methodology exposed it to the conse-
quences flowing from Commerce’s discretion to select an
AFA rate sufficiently adverse to effectuate the purposes of
the statute. While Commerce’s discretion was not bound-
less, id., assigning an AFA rate of zero or de minimis
would be contrary to the statutory objectives of the AFA
rate. Indeed, if Commerce had used any of the alternative
13 CHANGZHOU WUJIN v. US
data sources appellant advances in this appeal, a de
minimis AFA rate would result.
I therefore would hold that Commerce’s reliance on
BWA’s data for U.S. price, and that the methodology it
selected to calculate the separate rate for appellant was
supported by substantial evidence and otherwise not
contrary to law.